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Monthly Archives: March 2014

Comedy Files: Love Cereal

Remember the iron filings sticking to a magnet in your Wheaties? Bet you thought that could not be topped;

[youtube://http://www.youtube.com/watch?v=TCW5Nc9fyWg#t=28 450 300]

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On the Matter of Progress and Prosperity

”  “When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes. Money has no motherland; financiers are without patriotism and without decency; their sole object is gain.” – Napoleon Bonaparte


“A great industrial nation is controlled by its system of credit. Our system of credit is privately concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men … [W]e have come to be one of the worst ruled, one of the most completely controlled and dominated, governments in the civilized world—no longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and the duress of small groups of dominant men.”– Woodrow Wilson

When you ponder the implications of allowing a small group of powerful wealthy unaccountable men to control the currency of a nation over the last one hundred years, you understand why our public education system sucks. You understand why the government created Common Core curriculum teaches children that 3 x 4 = 13, as long as you feel good about your answer. George Carlin was right. The owners of this country (bankers, billionaires, corporate titans, politicians) want more for themselves and less for everyone else. They want an educational system that creates ignorant, obedient, vacuous, obese dullards who question nothing, consume mass quantities of corporate processed fast food, gaze at iGadgets, are easily susceptible to media propaganda and compliant to government regulations and directives. They don’t want highly educated, critical thinking, civil minded, well informed, questioning citizens understanding how badly they have been screwed over the last century. I’m sorry to say, your owners are winning in a landslide.

The government controlled public education system has flourished beyond all expectations of your owners. We’ve become a nation of techno-narcissistic, math challenged, reality TV distracted, welfare entitled, materialistic, gluttonous, indebted consumers of Chinese slave labor produced crap. There are more Americans who know the name of Kanye West and Kim Kardashian’s bastard child (North West) than know the name of our Secretary of State (Ketchup Kerry). Americans can generate a text or tweet with blinding speed but couldn’t give you change from a dollar bill if their life depended upon it. They are whizzes at buying crap on Amazon or Ebay with a credit card, but have never balanced their checkbook or figured out the concept of deferred gratification and saving for the future. While the ignorant masses are worked into a frenzy by the media propaganda machine over gay marriage, diversity, abortion, climate change, and never ending wars on poverty, drugs and terror, our owners use their complete capture of the financial, regulatory, political, judicial and economic systems to pillage the remaining national wealth they haven’t already extracted.

The financial illiteracy of the uneducated lower classes and the willful ignorance of the supposedly highly educated classes has never been more evident than when examining the concept of Federal Reserve created currency debasement – also known as inflation. The insidious central banker created monetary inflation is the cause of all the ills in our warped, deformed, rigged financialized economic system. The outright manipulation and falsity of government reported economic data is designed to obscure the truth and keep the populace unaware of the deception being executed by the owners of this country. They have utilized deceit, falsification, propaganda and outright lies to mislead the public about the true picture of the disastrous financial condition in this country. Since most people are already trapped in the mental state of normalcy bias, it is easy for those in control to reinforce that normalcy bias by manipulating economic data to appear normal and using their media mouthpieces to perpetuate the false storyline of recovery and a return to normalcy.

This is how feckless politicians and government apparatchiks are able to add $2.8 billion per day to the national debt; a central bank owned by Too Big To Trust Wall Street banks has been able to create $3.3 trillion out of thin air and pump it into the veins of its owners; and government controlled agencies report a declining unemployment rate, no inflation and a growing economy, without creating an iota of dissent or skepticism from the public. Americans want to be lied to because it allows them to continue living lives of delusion, where spending more than you make, consuming rather than saving, and believing stock market speculation and home price appreciation will make them rich are viable life strategies. Even though 90% of the population owns virtually no stocks, they are convinced record stock market highs are somehow beneficial to their lives. They actually believe Bernanke/Yellen when they bloviate about the dangers of deflation. Who would want to pay less for gasoline, food, rent, or tuition?

Unless you are beholden to the oligarchs, that sense of stress, discomfort, feeling that all in not well, and disturbing everyday visual observations is part of the cognitive dissonance engulfing the nation. Anyone who opens their eyes and honestly assesses their own financial condition, along with the obvious deterioration of our suburban sprawl retail paradise infrastructure, is confronted with information that is inconsistent with what they hear from their bought off politician leaders, highly compensated Ivy League trained economists, and millionaire talking heads in the corporate legacy media. Most people resolve this inconsistency by ignoring the facts, rejecting the obvious and refusing to use their common sense. To acknowledge the truth would require confronting your own part in this Ponzi debt charade disguised as an economic system. It is easier to believe a big lie than think critically and face up to decades of irrational behavior and reckless conduct.

What’s In Your GDP                          

“The Gross Domestic Product (GDP) is one of the broader measures of economic activity and is the most widely followed business indicator reported by the U.S. government. Upward growth biases built into GDP modeling since the early 1980s, however, have rendered this important series nearly worthless as an indicator of economic activity.  The popularly followed number in each release is the seasonally adjusted, annualized quarterly growth rate of real (inflation-adjusted) GDP, where the current-dollar number is deflated by the BEA’s estimates of appropriate price changes. It is important to keep in mind that the lower the inflation rate used in the deflation process, the higher will be the resulting inflation-adjusted GDP growth.” – John Williams – Shadowstats

GDP is the economic statistic bankers, politicians and media pundits use to convince the masses the economy is growing and their lives are improving. Therefore, it is the statistic most likely to be manipulated, twisted and engineered in order to portray the storyline required by the oligarchs. Two consecutive quarters of negative GDP growth usually marks a recession. Those in power do not like to report recessions, so data “massaging” has been required over the last few decades to generate the required result. Prior to 1991 the government reported the broader GNP, which includes the GDP plus the balance of international flows of interest and dividend payments. Once we became a debtor nation, with massive interest payments to foreigners, reporting GNP became inconvenient. It is not reported because it is approximately $900 billion lower than GDP. The creativity of our keepers knows no bounds. In July of 2013 the government decided they had found a more “accurate” method for measuring GDP and simply retroactively increased GDP by $500 billion out of thin air. It’s amazing how every “more accurate” accounting adjustment improves the reported data. The economic growth didn’t change, but GDP was boosted by 3%. These adjustments pale in comparison to the decades long under-reporting of inflation baked into the GDP calculation.

As John Williams pointed out, GDP is adjusted for inflation. The higher inflation factored into the calculation, the lower reported GDP. The deflator used by the BEA in their GDP calculation is even lower than the already bastardized CPI. According to the BEA, there has only been 32% inflation since the year 2000. They have only found 1.4% inflation in the last year and only 7.1% in the last five years. You’d have to be a zombie from the Walking Deador an Ivy League economist to believe those lies. Anyone living in the real world knows their cost of living has risen at a far greater rate. According to the government, and unquestioningly reported by the compliant co-conspirators in the the corporate media, GDP has grown from $10 trillion in 2000 to $17 trillion today. Even using the ridiculously low inflation BEA adjustment yields an increase from $12.4 trillion to only $15.9 trillion in real terms. That pitiful 28% growth over the last fourteen years is dramatically overstated, as revealed in the graph below. Using a true rate of inflation exposes the grand fraud being committed by those in power. The country has been in a never ending recession since 2000.

Your normalcy bias is telling you this is impossible. Your government tells you we have only experienced a recession from the third quarter of 2008 through the third quarter of 2009. So despite experiencing two stock market crashes, the greatest housing crash in history, and a worldwide financial system implosion the authorities insist  we’ve had a growing economy 93% of the time over the last fourteen years. That mental anguish you are feeling is the cognitive dissonance of wanting to believe your government, but knowing they are lying. It is a known fact the government, in conspiracy with Greenspan, Congress and academia, have systematically reduced the reported CPI based upon hedonistic quality adjustments, geometric weighting alterations, substitution modifications, and the creation of incomprehensible owner’s equivalent rent calculations. Since the 1700s consumer inflation had been estimated by measuring price changes in a fixed-weight basket of goods, effectively measuring the cost of maintaining a constant standard of living. This began to change in the early 1980s with the Greenspan Commission to “save” Social Security and came to a head with the Boskin Commission in 1995.

Simply stated, the Greenspan/Boskin Commissions’ task was to reduce future Social Security payments to senior citizens by deceitfully reducing CPI and allowing politicians the easy way out. Politicians would lose votes if they ever had to directly address the unsustainability of Social Security. Therefore, they allowed academics to work their magic by understating the CPI and stealing $700 billion from retirees in the ten years ending in 2006. With 10,000 baby boomers per day turning 65 for the next eighteen years, understating CPI will rob them of trillions in payments. This is a cowardly dishonest method of extending the life of Social Security.

If CPI was calculated exactly as it was computed prior to 1983, it would have averaged between 5% and 10% over the last fourteen years. Even computing it based on the 1990 calculation prior to the Boskin Commission adjustments, would have produced annual inflation of 4% to 7%. A glance at an inflation chart from 1872 through today reveals the complete and utter failure of the Federal Reserve in achieving their stated mandate of price stability. They have managed to reduce the purchasing power of your dollar by 95% over the last 100 years. You may also notice the net deflation from 1872 until 1913, when the American economy was growing rapidly. It is almost as if the Federal Reserve’s true mandate has been to create inflation, finance wars, perpetuate the proliferation of debt, artificially create booms and busts, enrich their Wall Street owners, and impoverish the masses. Happy Birthday Federal Reserve!!!

When you connect the dots you realize the under-reporting of inflation benefits the corporate fascist surveillance state. If the government was reporting the true rate of inflation, mega-corporations would be forced to pay their workers higher wages, reducing profits, reducing corporate bonuses, and sticking a pin in their stock prices. The toady economists at the Federal Reserve would be unable to sustain their ludicrous ZIRP and absurd QEfinity stock market levitation policies. Reporting a true rate of inflation would force long-term interest rates higher. These higher rates, along with higher COLA increases to government entitlements, would blow a hole in the deficit and force our spineless politicians to address our unsustainable economic system. There would be no stock market or debt bubble. If the clueless dupes watching CNBC bimbos and shills on a daily basis were told the economy has been in fourteen year downturn, they might just wake up and demand accountability from their leaders and an overhaul of this corrupt system.

Mother Should I Trust the Government?

We know the BEA has deflated GDP by only 32% since 2000. We know the BLS reports the CPI has only risen by 37% since 2000. Should I trust the government or trust the facts and my own eyes? The data is available to see if the government figures pass the smell test. If you are reading this, you can remember your life in 2000. Americans know what it cost for food, energy, shelter, healthcare, transportation and entertainment in 2000, but they unquestioningly accept the falsified inflation figures produced by the propaganda machine known as our government. The chart below is a fairly comprehensive list of items most people might need to live in this world. A critical thinking individual might wonder how the government can proclaim inflation of 32% to 37% over the last fourteen years, when the true cost of living has grown by 50% to 100% for most daily living expenses. The huge increases in property taxes, sales taxes, government fees, tolls and income taxes aren’t even factored in the chart. It seems gold has smelled out the currency debasement and the lies of our leaders. This explains the concerted effort by the powers that be to suppress the price of gold by any means necessary.

Mother, you should not trust the government. There is no doubt they have systematically under-reported inflation based on any impartial assessment of the facts. The reality that we remain stuck in a fourteen year recession is borne out by the continued decline in vehicle miles driven (at 1995 levels) due to declining commercial activity, the millions of shuttered small businesses, and the proliferation of Space Available signs in strip malls and office parks across the land. The fact there are only 8 million more people employed today than were employed in 2000, despite the working age population growing by 35 million, might be a clue that we remain in recession. If that isn’t enough proof for you, than maybe a glimpse at real median household income, retail sales and housing will put the final nail in the coffin of your cognitive dissonance.

The government and their media mouthpieces expect the ignorant masses to believe they have advanced their standard of living….”

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Your Tax Dollars at Work

“Submitted by Mike Krieger of Liberty Blitzkrieg blog,

As the Attorney General of these United States, Eric Holder is the top legal advisor for the entire nation. As such, he has been in a position to help punish financial criminals and the mega-banks for the crimes they committed in the run-up to the financial crisis, and the egregious looting thereafter.

Despite his unique role, Eric Holder has spent the past five years taking absolutely zero action on any matter of national significance. In fact, his major claim to fame appears to be that he has solidified the creation of a group of untouchable criminals known as the “Too Big to Jail” class.

So what does Eric Holder do in his spare time, you know, when he isn’t coddling financial oligarchs and running firearms into Mexico?Apparently, according to a recent study from the non-partisan Government Accountability Office, he likes to hop on government planes for personal trips at taxpayer expense. Serfs up suckers!

From The Washington Post:….”

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The SEC Investigates Opportunity for Fraud in the Bond and Loan Markets

“The Securities and Exchange Commission is investigating whether a Wall Street boom in complicated bond deals is creating new avenues for fraud, according to people close to the probes.

SEC investigators are looking at whether banks and companies are using the bond deals to hide certain risks illegally, said the people close to the probes. A number of likely cases in that area are in the pipeline, one of the people said.

Separately, the government has expanded an inquiry into how Wall Street banks sell the deals, the people added. The securities being examined aren’t traded on any exchanges or open platforms, and their prices are negotiated privately between buyers and sellers.

The probes could pose a new legal headache for banks, which have faced years of government investigations and large financial settlements involving their conduct leading up to the financial crisis.

In previous investigations, the SEC primarily explored how the banks put the deals together. The new probes look at how these complex securities are being used and traded.

A spokesman for the SEC declined to comment.


The securities, which are packages of corporate loans and debts assembled and sold by Wall Street banks to investors, boomed in popularity before the financial crisis—and then crashed after it. They have seen a resurgence in popularity as investors pump more money into riskier, higher-yielding investment products.

Before the crisis….”

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The Fed’s Plosser Lifts Futures Stating the Fed’s Position Has Not Changed

“Fed President Charles Plosser told CNBC on Tuesday that Fed policymakers were “puzzled” by the selloff on Wall Street last week when Fed Chair Janet Yellen said the central bank may raise interest rates sooner than expected.

“I don’t think the Fed changed its position,” Plosser said on CNBC’s “Squawk Box.” “In fact, it tried to say very explicitly in its statement that we believe forward guidance or the expectations have not changed as far as we’re concerned.”

Plosser said Yellen later clarified her comments on interest rates, in which she mentioned a six-month timeline after the Fed ends its massive stimulus program. In its most recent policy statement, the Fed dropped an unemployment level threshold from its guidance on interest rates, but Plosser said the bank still plans to be “data dependent” when it weighs when to raise interest rates….”

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$GS Gives Four Reasons for a Pick Up in Growth

“………..(1) data surprises appear to have bottomed; (2) weather normalization should boost growth; (3) financial conditions remain supportive; and (4) leading indicators for capital spending have picked up. We therefore expect that activity should bounce back and continue to expect 3%+ growth for the remainder of 2014.”

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W.H. Drums Up a Campaign to Suspend Russia From the G-8

“THE HAGUE—President Barack Obama, seeking to shift the trajectory of the crisis in Ukraine, will press U.S. allies Monday to suspend Russia from the Group of Eight leading nations and to adopt more sweeping sanctions against the Russian economy, administration officials said.

Mr. Obama will argue for those steps in an emergency meeting Monday evening with leaders of the world’s top seven economies, held on the sidelines of a nuclear security summit in The Hague, officials said.

“We believe that there is no reason for the G-7 countries to engage with Russia going forward based on its behavior,” Ben Rhodes, a deputy national security adviser said. “We believe those broader sanctions are necessary.”

The idea of expelling Russia from the G-8 has been floated ever since Moscow sent forces to occupy the Crimean region of Ukraine three weeks ago, but the comments from the administration represent a formal public recommendation for doing so.

U.S. officials are seeking a sharp response out of Monday’s meeting to send a strong statement to Moscow, as they expressed growing concern over Russian troop movements along its borders and over the possibility of further military incursions.

Mr. Obama, in a one-on-one meeting with the Chinese President Xi Jinping, also emphasized the importance of nations respecting the sovereignty of others, officials said.

“We would find it a constructive step for them to refrain from supporting Russia’s action,” Mr. Rhodes said, adding that Mr. Xi told Mr. Obama that Beijing wants a political solution in Ukraine.

“It matters if traditional friends of Russia cannot express support for their position,” Mr. Rhodes added…..”

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322 Fun

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Attention Scalpers: This Week Will Debut A Number of IPOs

“By all indications, Monday could be a quiet trading day, but don’t let the placid mood in the markets fool you — investors are preparing for a rush of initial public offerings this week.

The company behind the popular Candy Crush Saga online game is one of 14 companiesset to go public this week.

The IPO mania is part of a longer term, global trendthat has seen many companies make their public debut.

U.S. stock futures were relatively firm heading into the first day of the trading week. There’s little economic or corporate news on the docket Monday that could influence market sentiment.

The latest reading on the CNNMoney Fear & Greed index shows investor sentiment is in ‘neutral mode.’…”

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Sheila Bair: Banks Still Need More Capital as They are Still Too Levered

“While 29 out of 30 big banks passed the Federal Reserve’s annual stress test, former FDIC chair Sheila Bair says banks still have plenty of work to do.

The country’s largest banks “are still too levered,” she told Yahoo before the stress test results were released.

“Capital levels have improved since prior to the [financial] crisis, but loan-loss reserves are down significantly as banks keep releasing reserves to drive earnings. They’ll tell you ‘credit quality is getting better, the economy is on the upswing.’ I don’t know about that.”

Banks need more capital and should stop releasing reserves, said Bair, now a director at Banco Santander.

She also expressed concern about off-balance sheet assets at banks with big trading operations, which would include JPMorgan Chase and Goldman Sachs….”

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Renewed Signs of a Slowdown in China Send Global Markets Lower, U.S. Futures Buck the Trend

“(Reuters) – European shares edged lower on Monday after further signs of a slowdown in China, although robust data from France and Germany limited their decline.

The euro briefly strengthened against the dollar and German Bund futures extended losses after data compiler Markit said its March flash composite purchasing managers’ index for France jumped to 51.6 from 47.9 last month.

However, the single currency largely gave up its gains after figures showed private sector growth slowed in Germany. Data from the euro zone as a whole, while suggesting the recovery was becoming more broad-based, dipped compared with February.

Having lagged the recent recovery in much of the euro zone, the French index surged through the 50-point threshold dividing contraction from expansion to hit its highest since August 2011.

However, the data was not enough to lift European shares. The FTSEurofirst 300 index .FTEU3 fell 0.2 percent as investors focused on a fall in Chinese business activity.

The flash Markit/HSBC China Purchasing Manager index fell to an eight-month low of 48.1 in March from February’s 48.5. The index has been below 50 since January.

“As the data shows this morning, China’s slowdown is sharper than what most people had expected, which fuels worries about the impact on global growth,” Philippe de Vandiere, analyst at Altedia Investment Consulting in Paris, said.

“But Chinese authorities have plenty of tools to avoid a hard landing, and we know that the country’s transition to an economic model more focused on consumer spending will lower its growth rate a bit, so no big concern here.”

A string of weak numbers has reinforced concerns over a slowdown in the world’s second largest economy, though the impact on Asian shares was limited as the data raised expectations the Chinese government could stimulate the economy….”

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Russian Article From 2008: “Obama Will Trigger World War III Starting From the Crimea Peninsula”

“Translation from google translate:

Obama begins the third world in the Crimea Remember this page!

December 26 , 16:58 | Arseny Palkin

Lenty.ru: Japan Crimea is not a hindrance
REGNUM: Yatsenuk forced to speak in Russian
Under the new U.S. President Barack Obama in the Crimea will be implemented scenario of armed conflict. ” It is the American scenario , and under Obama the probability is much higher than under McCain, ” – said at a roundtable in Kiev, Russian political scientist Andrei Okara , said ” New Region ” .
Expert explains : “It became clear when it was announced that what people will represent the Obama team . These are people whose professional registration – Wall Street. These people are engaged in a technology called ” technologies of controlled chaos . ”

According to Okara , after Georgia area ” controlled chaos ” in the first place , was to be the Ukraine, namely – Crimea . ” This is the point of a fire , including global conflicts that escalate into a world war , which, unfortunately , is one of the scenarios , the implementation of which at the moment from the real ” – says the analyst.

His colleague from the Ukrainian Institute of Russia Andrey Blinov agree that Russia is not interested in such a conflict . ” When people talk about the war in the Crimea or in the hamlet St. Michael , I believe that this scenario is marginal . A question more active economic participation of Russian capital is very likely. But it depends on when the crisis is over . If in 2010 , while Russia will be much weaker , “- said the expert .”


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James Rickards: International Monetary System Headed for Collapse

“The prognosis for the global financial system isn’t bright, says James Rickards, senior managing director of Tangent Capital Partners and author of the upcoming book, “The Death of Money: The Coming Collapse of the International Monetary System.”

“The international monetary system has actually collapsed three times in the past 100 years: 1914, 1939, and 1971. So these things do happen,” he told Kitco News.

“I’m just trying to prepare the reader for first of all, the fact that it’s coming, and secondly as an investor what you can do now to protect yourself.”

Rickards also said the Federal Reserve doesn’t object to a rising gold price as long as the move is orderly. A gradual move upward would increase inflationary expectations, which is now a goal of the Fed, he said.

The central bank probably doesn’t focus much on gold, Rickards said. “Does [Fed Chair] Janet Yellen wake up in the morning and look at the price of gold first thing? Maybe she should. She probably doesn’t,” he said…..”

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The White House States Russia May Be Getting Ready to Invade the Ukraine

“Russian forces gathering on the border with eastern Ukraine may be poised to invade, the White House warned on Sunday, as the government in Kiev said that the prospect of war with Moscow was continuing to grow after the annexation of Crimea.

Speaking after Nato’s top commander in Europe voiced alarm about the size and preparedness of the Russian troop buildup, President Barack Obama’s deputy national security adviser, Tony Blinken, said President Vladimir Putin may indeed be readying further action.

“It’s deeply concerning to see the Russian troop buildup on the border,” Blinken told CNN. “It creates the potential for incidents, for instability. It’s likely that what they’re trying to do is intimidate the Ukrainians. It’s possible that they’re preparing to move in.”

Thousands of Russian troops held a military exercise near the border even before Putin last week formally annexed Ukraine’s southern Crimea region following a referendum – condemned as illegal by western governments – that endorsed unification with Russia.

General Philip Breedlove, Nato’s supreme allied commander in Europe, said earlier on Sunday that the Russian military force gathered near the Ukrainian border was “very, very sizeable and very, very ready” and could even pose a threat to Moldova, on the other side of the country.

Andriy Deshchytsia, Ukraine’s acting foreign minister, said the chances of all-out war between his government and Moscow “are growing”, adding: “The situation is becoming even more explosive than it was a week ago.”

Deshchytsia told ABC News: “We are ready to respond. The Ukraine government is trying to use all the peaceful diplomatic means … to stop Russians, but the people are also ready to defend their homeland.

“At this moment, when Russian troops would be invading the eastern region,” Deshchytsia went on, “it would be difficult for us to ask people who live there not to respond on this military invasion”.

Russian forces in the Crimean city of Belbek on Saturday aggressively seized a military base that was one of the last strongholds of the Ukrainian military in the region. Moscow, meanwhile, allowed civilian observers from the Organisation for Security and Cooperation in Europe (OSCE) to begin monitoring elsewhere in Ukraine….”

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Documentary: The Age of Big Data

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[youtube://http://www.yotube.com/watch?v=Igt-jW4e8ts 450 300]


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29 0f 30 Banks Pass the Fed’s Stress Test

“WASHINGTON—The Federal Reserve’s annual test of big banks’ financial health showed the largest U.S. firms are strong enough to withstand a severe economic downturn, a sign that many will get the green light soon to reward investors by raising dividends and buying back shares.

The Fed said 29 of the 30 largest institutions have enough capital to continue lending even when faced with a hypothetical jolt to the U.S. economy lasting into 2015, including a severe drop in housing prices and a spike in unemployment. The Fed’s annual “stress tests” are designed to ensure large banks can withstand severe losses during times of market turmoil.

Only Zions BancorpZION +3.19% a regional lender based in Salt Lake City, posted capital levels during the two-year-downturn scenario that didn’t meet the Fed’s minimum standards. The Fed said Zions had a Tier 1 common capital ratio of 3.5%, below the 5% level the Fed views as a minimum allowance. The ratio measures high-quality capital as a percentage of risk-weighted assets such as mortgages, commercial loans and securities.

The results could buttress the desire of banks—which have seen their profits soar amid an improving economy and severe cost cutting—to return more of that income to shareholders. The six biggest banks earned $76 billion in 2013, just $6 billion shy of their collective all-time high. All U.S. banks earned a record $154.6 billion, according to data compiled by SNL Financial. Some of the biggest financial institutions, including Bank of America Corp.BAC +2.75% and Morgan Stanley,MS +3.08% haven’t boosted dividend payouts since the financial crisis.

The stress-test results will be a factor in the Fed’s decision next week to approve or deny individual banks’ plans for returning billions of dollars to shareholders through dividends or share buybacks. But a good performance on Thursday’s test is no guarantee, since the Fed also will consider more subjective factors such as the strength of a bank’s internal risk management.

On Thursday afternoon, the Fed was expected to privately give banks a preliminary answer on their requests, setting up a week of jockeying for banks that were told “no.” Firms will have until early next week to revise their plans or challenge the Fed’s math before a final decision is issued Wednesday.

Paul Miller, an analyst at FBR Capital Markets, said the results bode well for banks’ approval of capital plans. “There’s nothing in here that I think is a big shocker,” he said. Analysts this year are expecting distributions from banks to be the highest since at least 2007, according to estimates compiled by Thomson Reuters for The Wall Street Journal.

The first stress test took place in the immediate aftermath of the 2008 crisis and helped shore up confidence at a critical juncture for the American financial system. Regulators forced banks to cut their dividends in exchange for billions of dollars in government aid and lenders were prohibited from raising shareholder payouts without U.S. approval.

The Fed said the latest tests show banks are “collectively better positioned” to withstand losses than they were during the financial crisis, after which regulators pushed banks to hold more loss-absorbing capital.

Under the Fed’s “severely adverse” scenario—a deep recession with a rising unemployment rate, steep drop in housing prices and a nearly 50% decline in stock prices over nine quarters—30 banks would have suffered total loan losses of $366 billion, trading losses of $98 billion and a net loss before taxes of $217 billion.

The Fed also raised the bar in this year’s test by….”

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$GS Says Au Will Continuee to Flounder

“One of the star performers of 2014 has been gold.

It started the year around $1200/oz and recently nearly got to $1400/oz before slipping back a bit.

In a new note, Goldman argues that the rise in gold has been driven by three unsustainable factors: Weather-induced economic slowdown in the US, a spike in Chinese demand due to credit concerns, and increased geopolitical tension.

The firm argues that all of these tailwinds will fade and that gold will hit $1050 this year….”

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