Investing in Macro Tipping Points

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FOMC MEETING - Possible Surprise "Wording" to Stop Potential Contagion

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FINANCIAL REPRESSION - Banks Remove the "Heart" of Dodd-Frank

EXCERPTED FROM: Memo To WSJ: The CRomnibus Abomination Was Not ‘A Rare Bipartisan Success’ 12-15-14 David Stockman

Not only did Citigroup and the rest of the big Wall Street banks succeed in gutting the “push-out” requirements of Dodd-Frank, thereby extending their lease to gamble in the derivatives market with FDIC (i.e. taxpayer)  guaranteed money. Crony Capitalism also got a huge bonanza in the form of a 10X increase in the contribution limit to party committees. Now the heavy hitters can actually give $230,000 annually to the GOP and Dem campaign committees.

Once again congress  set itself up for the usual midnight scramble behind closed doors where the pork barrel overflows and sundry K-street lobbies stick-up the joint and then demand immediate passage—–sight unseen—–in the name of keeping the Washington Monument open on the morrow.

There have been Wall Street hissy fits each and every time a shutdown loomed or happened. We now have governance by the robo-traders and gamblers who light up the trading screens 24/7. Washington’s utter nonchalance about this dangerous condition is owning to the tyranny of the Fed’s free money fueled Wall Street casino.

The market’s blistering but wholly unwarranted rise has lulled both Washington and Wall Street into the same delusion that set in during the final days of the dotcom bubble and then again at the peak of the housing and credit bubble during 2006-2008. Namely, that the business cycle has been suspended or repealed by the purported magicians at the Fed, and that, accordingly, the nirvana of permanent full employment prosperity is just around the corner.

Rosy Scenario as now embedded in the CBO projections, of course, will never materialize. CBO is currently projecting, with no embarrassment at all, that:

• The US will go without a recession between 2009 and 2024;
• That 16 million new jobs will be created over the next ten years compared to 3 million during the last decade;
• That real GDP will grow at better than a 3% rate until we hit permanent full-employment compared to just 1.7% per year since the turn of the century;
• That wages and salaries will grow at a 5.3% rate during the next decade compared to 3% during the prior 10 years.

FINANCIAL REPRESSION -Banks Remove the "Heart" of Dodd-Frank

Financial Repression

Banks Remove the "Heart" of Dodd-Frank

6 years of highly visible Dodd-Frank legislation and thousands of lines of regulation, with no public debate, was just quietly removed and "neutered" by the stealth of an "Ear-Mark".

To maintain government financing the banks have held Washington hostage.

Maintain our profit margins and have the public accept the risk of $3003 TRILLION or..... else!

• Senate Passes The Cromnibus: Here Is Who Voted "No" And What It Actually Contains 12-14-14 Zero Hedge
• Presenting The $303 Trillion In Derivatives That US Taxpayers Are Now On The Hook For 12-12-14 Zero Hedge
• Democrats Who Voted For The Cromnibus Received Double The Money From Wall Street Than "No" Voters 12-13-14 Zero Hedge
• Wall Street Moves to Put Taxpayers on the Hook for Derivatives Trades 12-05-14 Michael Krieger, Liberty Blitzkrieg
• "The Most Egregious Sections Of Law I've Encountered During My Time As A Representative" 12-05-14 Michael Krieger, Liberty Blitzkrieg
• Citigroup Written Legislation Moves Through the House of Representatives.

The Bill (yet another 'Ear-Mark') allows financial institutions to trade certain financial derivatives from subsidiaries that are insured by the Federal Deposit Insurance Corp. — potentially putting taxpayers on the hook for losses caused by the risky contracts. Big Wall Street banks had typically traded derivatives from these FDIC-backed units, but the 2010 Dodd-Frank financial reform law required them to move many of the transactions to other subsidiaries that are not insured by taxpayers.

“It is because there is a lot of money at stake,” Johnson said. “They want to be able to take big risks where they get the upside and the taxpayer gets the potential downside,”

Decency, security, and liberty alike demand that government officials shall be subjected to the same rules of conduct that are commands to the citizen. In a government of laws, existence of the government will be imperiled if it fails to observe the law scrupulously. Our government is the potent, the omnipresent teacher. For good or for ill, it teaches the whole people by its example. Crime is contagious. If the government becomes a lawbreaker, it breeds contempt for law; it invites every man to become a law unto himself; it invites anarchy. To declare that in the administration of the criminal law the end justifies the means — to declare that the government may commit crimes in order to secure the conviction of a private criminal — would bring terrible retribution. Against that pernicious doctrine this court should resolutely set its face.

–  Louis Brandeis, Supreme Court Justice, in 1928

While most Americans are busy Christmas shopping and making preparations for trips to see family, Congress remains hard at work doing what it does best. Giving gifts to Wall Street and trampling on citizens’ civil liberties.

I knew the plebs were about to be royally screwed a week ago when I published the post: Wall Street Moves to Put Taxpayers on the Hook for Derivatives Trades. The piece concluded with the following:

Remember what Wall Street wants, Wall Street gets. Have a great weekend chumps.

Naturally, Wall Street got what it wanted. In fact, this provision was so important to the financial oligarchs that Jaime Dimon called around to encourage our (Wall Street’s) representatives to support it. The Washington Post reports that:

While that’s bad enough, the lame duck Congress clearly didn’t consider its job done without legislating away the 4th Amendment. Here is some of what one of the only decent members of Congress, Justin Amash, wrote on Facebook:

When I learned that the Intelligence Authorization Act for FY 2015 was being rushed to the floor for a vote—with little debate and only a voice vote expected (i.e., simply declared “passed” with almost nobody in the room)—I asked my legislative staff to quickly review the bill for unusual language. What they discovered is one of the most egregious sections of law I’ve encountered during my time as a representative: It grants the executive branch virtually unlimited access to the communications of every American.

On Wednesday afternoon, I went to the House floor to demand a roll call vote on the bill so that everyone’s vote would have to be recorded. I also sent the letter below to every representative.

With more time to spread the word, we would have stopped this bill, which passed 325-100. Thanks to the 99 other representatives—44 Republicans and 55 Democrats—who voted to protect our rights and uphold the Constitution. And thanks to my incredibly talented staff.

###

Block New Spying on U.S. Citizens: Vote “NO” on H.R. 4681

Dear Colleague:

The intelligence reauthorization bill, which the House will vote on today, contains a troubling new provision that for the first time statutorily authorizes spying on U.S. citizens without legal process.

Last night, the Senate passed an amended version of the intelligence reauthorization bill with a new Sec. 309—one the House never has considered. Sec. 309 authorizes “the acquisition, retention, and dissemination” of nonpublic communications, including those to and from U.S. persons. The section contemplates that those private communications of Americans, obtained without a court order, may be transferred to domestic law enforcement for criminal investigations.

To be clear, Sec. 309 provides the first statutory authority for the acquisition, retention, and dissemination of U.S. persons’ private communications obtained without legal process such as a court order or a subpoena. The administration currently may conduct such surveillance under a claim of executive authority, such as E.O. 12333. However, Congress never has approved of using executive authority in that way to capture and use Americans’ private telephone records, electronic communications, or cloud data.

Now watch the following video:

Finally, this is what I think of Congress:

FINANCIAL REPRESSION - Wall Street Moves to Put Taxpayers on the Hook for Derivatives Trades

They would allow financial institutions to trade certain financial derivatives from subsidiaries that are insured by the Federal Deposit Insurance Corp. — potentially putting taxpayers on the hook for losses caused by the risky contracts. Big Wall Street banks had typically traded derivatives from these FDIC-backed units, but the 2010 Dodd-Frank financial reform law required them to move many of the transactions to other subsidiaries that are not insured by taxpayers.

Wall Street Moves to Put Taxpayers on the Hook for Derivatives Trades 12-05-14 Michael Krieger, Liberty Blitzkrieg

Wall Street has for some time attempted to put taxpayers on the hook for its derivatives trades.

READ:  Citigroup Written Legislation Moves Through the House of Representatives. Here’s an excerpt:

Five years after the Wall Street coup of 2008, it appears the U.S. House of Representatives is as bought and paid for as ever. We heard about the Citigroup crafted legislation currently being pushed through Congress back in May when Mother Jones reported on it. Fortunately, they included the following image in their article:

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Unsurprisingly, the main backer of the bill is notorious Wall Street lackey Jim Himes (D-Conn.), a former Goldman Sachs employee who has discovered lobbyist payoffs can be just as lucrative as a career in financial services. The last time Mr. Himes made an appearance on these pages was in March 2013 in my piece: Congress Moves to DEREGULATE Wall Street.

Fortunately, that bill never made it to a vote on the Senate floor, but now Wall Street is trying to sneak this into a bill needed to keep the government running. You can’t make this stuff up. From the Huffington Post:

WASHINGTON — Wall Street lobbyists are trying to secure taxpayer backing for many derivatives trades as part of budget talks to avert a government shutdown.

According to multiple Democratic sources, banks are pushing hard to include the controversial provision in funding legislation that would keep the government operating after Dec. 11. Top negotiators in the House are taking the derivatives provision seriously, and may include it in the final bill, the sources said.

The bank perks are not a traditional budget item. They would allow financial institutions to trade certain financial derivatives from subsidiaries that are insured by the Federal Deposit Insurance Corp. — potentially putting taxpayers on the hook for losses caused by the risky contracts. Big Wall Street banks had typically traded derivatives from these FDIC-backed units, but the 2010 Dodd-Frank financial reform law required them to move many of the transactions to other subsidiaries that are not insured by taxpayers.

Last year, Rep. Jim Himes (D-Conn.) introduced the same provision under debate in the current budget talks. The legislative text was written by a Citigroup lobbyist, according to The New York Times. The bill passed the House by a vote of 292 to 122 in October 2013, 122 Democrats opposed, and 70 in favor. All but three House Republicans supported the bill.

It wasn’t clear whether the derivatives perk will survive negotiations in the House, or if the Senate will include it in its version of the bill. With Democrats voting nearly 2-to-1 against the bill in the House, Senate Majority Leader Harry Reid (D-Nev.) never brought the bill up for a vote in the Senate.

Remember what Wall Street wants, Wall Street gets.

INEQUALITY - "Merry Christmas" America ... or Rather Happy Hoilday!

Think about this chart at Christmas with 50K on Food Stamps. The American Dream is now becoming a nightmare for youth