FLASH: Carl, I Want Seats on Your Board, Ichan Has Won the Right to Have Two Members Elected to $HLF

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“Bye bye Walter Cronkite, Brian Williams and Scott Pelley. Hello Google, Yahoo and Drudge.

A new Rasmussen Reports poll finds that traditional network news continues to fall as the nation’s source for news. The internet now is a bigger source of news for Americans than network TV, by a point, 25 percent to 24 percent.

Cable TV is still king, with 32 percent of the 1,000 likely voters Rasmussen polled getting their news from that source. Newspapers barely register a 10 percent, and radio is the source of news for 7 percent of the country.

The poll gauged how well the public trusted the media and if they see a bias. On both fronts, it is bad news.

Just 6 percent of the nation considers the national media “very trustworthy,” and nearly half believe reporters are more liberal than they are, said Rasmussen….”

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“WASHINGTON (AP) — The White House is threatening a presidential veto of a Senate Republican measure that would give President Barack Obama more authority and flexibility to find $85 billion in spending cuts this year. The measure is intended to replace the automatic across-the-board cuts scheduled to kick in Friday.

The White House says it instead backs a Democratic measure to replace the cuts with tax hikes on millionaires and spending reductions over 10 years.

Neither bill is likely to survive Senate procedural obstacles Thursday….”

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“The typical articles over the last many years have featured a particular theme. In the last few months, the central theme in Jackass articles has been the isolation and demise of the USDollar, how it is happening, why it must happen, and its importance in the restoration of the global financial structure. But this week, a sudden urge has come to address an overwhelming list of critical gritty questions. They crop up with clients, colleagues, and friends. More than a crisis, it is more accurately described as a collapse of a corrupt inequitable monetary system, and a desperate defense by the major Western bankers to preserve their power over nations and their governments, alongside a vile vicious violent attempt by the United States to maintain its privilege as owner of the vast USDollar counterfeit machinery, as controller of vast banking pillars of paper columns, and as commander of a vast military. The current monetary system has a debt foundation, which is collapsing in lockstep with the rapid breakdown in the sovereign bond market. The last four years have seen a long drawn-out unstoppable process, where the collapse cannot be avoided and must happen. The pathogenesis is obvious to those in the Sound Money camp. The blossom of corruption and complete banker criminal immunity has only hastened the urgent need for the collapse. The cadaver in Intensive Care cannot be revived with more intravenous applications of contaminated money, the body dead since September 2008. Insolvent systems rush to the crash zone, where efforts can only delay the outcome.

The central banks are finally in crosshairs of focus, for not producing a solution, more recently for worsening the problem. They have confused their function from providing liquidity, in the belief that they are creating wealth. They have destroyed the system as costs rise relentlessly. Perversely, their efforts to dampen demand so as to reduce price inflation has added to the economic destruction. The outcome will be shocking in its power shift to the East, shocking in its evaporation of paper wealth, and shocking in the simplicity of the new financial structure that rises from the ashes based in barter and gold payments. However, the United States will be left behind, due to its basic ownership of the global reserve currency being scrapped. The extreme corruption cannot be reformed. The US financial system must be extinguished, and with it extreme damage to the USEconomy, which has been hopelessly dependent upon asset bubbles for two decades. No single theme in this article, just an attempt to answer in a straightforward manner some extremely difficult and appropriate questions for this ongoing crisis. Some effort is made for the topics to be presented in a logical flow, with answers not lengthy. For much more detailed analysis, look to the Hat Trick Letter paid reports with a subscription, offered each month.

1) CAN WE BE CERTAIN A COLLAPSE WILL COME AND WHY ??

To be sure, a collapse is not only coming. It is happening before our eyes in what used to be ultra-slow motion. Each year the pace quickens. Two years ago, the MFGlobal client account theft episode was preceded by another red-line event a few months before, and followed by another a few months after. But nowadays, the crisis events occur every month or every week. With $1.2 trillion doled out by the USFed to European banks in January, the Germans demanding repatriation of their official gold account, the Italians electing a comedian to halt the property tax hikes that bail out banks, the British sponsoring a Chinese Yuan Swap Facility, the attack on Mali to wrest its gold for German repayment, the move to shut down the Mongolian copper & gold mine by Rio Tinto, the raids larger and bolder of the GLD inventory, the USFed preparing for QE5 (or rather QE187), the US facing a fiscal cliff, the Japanese ratcheting up the competitive currency devaluations, the Swiss managing their Euro-Franc peg, the Russians hosting a G-20 Meeting of finance ministers to coordinate the alternative to US$-based trade, the Iranian sanctions coming to a conclusion in US acquiescence, and a gathering of five aircraft carriers in the Chesapeake (against all rules, angering the Pentagon), to be sure, the pace of extreme events is quickening. All these have occurred just since the new year began less than two months ago. Extreme events have become the norm. A series of climax events is coming very soon. The changes will be rapid and breath-taking.

2) WHAT WILL THE FUSE BE THAT TRIGGERS THE FINANCIAL COLLAPSE ??

Some mid-sized seemingly minor bank will fail. It will have linkage to another big bank in a corresponding role. The obligations will not be possible to cover. The contagion will spread to numerous large banks across Europe to London and New York. The derivatives could be involved, very unmanageable. If not a mid-sized bank, then a major bank will fail from the inability to contain the profound insolvency and massive bleeding during capital flight. The Greek zone has been contained, where disaster runs its course. But larger Italy, Spain, and France are rapidly breaking down, each in its own unique important way. A great many fuses lie, each waiting to be lit.

3) WHY HAS NO SOLUTION BEEN PUT IN PLACE AFTER OVER FOUR YEARS ??…..”

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MO, AEP, NLY, T, DUK, KMB, KMP, MRK, PG, RAI, VZ,

“Short sellers have increased their bets by and large against our universe of go-to quality dividend stocks. We tracked the short interest changes from the February 15 settlement date, versus the January 31 settlement date, and we added color if applicable….”

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“(MoneyWatch) Home prices are up, the number of properties on the market is down and buyers are moving fast to take advantage of deflated prices. So is the housing market finally returning to normal?

Not exactly. Many of those real estate buyers aren’t your everyday bargain-hunters. They’re Wall Street and international investors. While the fast money is boosting the housing market, it also poses risks in a key sector of the economy that is just getting back on its feet.

Data show that investment trusts, private equity firms and other institutional investors are purchasing thousands of single-family homes. The idea is to fix them up, rent them out and, when prices rise, sell them.

Although it’s not the first time that financial firms have scooped up blocks of homes in anticipation of a rebound, it’s hard to predict how this will affect the neighborhoods where firms are doing most of the buying. In the past, most single-family homes were built to order, purchased by the family that would live in them for years.

So what happens to the housing market when investors are doing the buying rather than owner occupants? And what happens to the neighborhoods in which this is occurring?

• $1 trillion in mortgage still underwater
• Study confirms widespread mortgage fraud

It’s tough to pinpoint exactly how many homes are being purchased by investors rather than individual buyers. One of the best ways to do that is to look at absentee purchases, where the property tax bill is sent to a different address. These typically indicate an investor-purchased property, but there could be second-home buyers in the mix, particularly in popular vacation-home markets….”

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“How long will you live? It’s an increasingly important question to consider, especially for retirement investors. Researchers made waves in the news last week by arguing that “72 is the new 30” when it comes to longevity.

A great headline for the Internet, to be sure. What they meant by that is not that a given 72-year-old should feel and act 30, although some obviously do, but that life expectancy—that is, your odds of dying today for any reason—are about the same as they were for a 30-year-old early human.

Cleaner water, better drugs and vaccines, a high-quality food supply, all of these trends factor into our ability to outlive the hunter-gatherers of thousands of years ago, if somehow you could stack a modern human up against a human of those times.

It’s a bit of a statistical trick, that headline. People die at 72 pretty easily from all the typical problems of old age, and they die earlier and later than that age, of course.

But let’s get down to the facts of the matter, apples-to-apples: If you make it to 65, the “traditional” retirement age, what are your chances of living longer?

Pretty good, it turns out. Here you find another interesting quirk of the numbers. The Centers for Disease Control and Prevention (CDC) puts the average American’s life expectancy at 78.7 years.

Not much more than 72, right? But that’s taking into account people of all ages, including those who die at birth, get killed in auto accidents, contract diseases as young adults, and so on.

However, if you make it to 65 (and who says you won’t?) you can expect to live another 19.2 years, according to the CDC. That puts your life expectancy to about 84.

If you live to see 75, you could last another 12.2 years, the agency calculates. That’s 87 years of living. Added up, your retirement money at 65 is going to have to last, potentially, another 22 years!

This fact illustrates what longevity scientists mean when they say that a modern human at 72 is at the same risk of death as a “young” caveman millennia ago. It can be a rough existence, sure, but your chances of sticking around aren’t that bad….”

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” “Danger, the emergency destruct sequence has now been activated. The ship will self-destruct in t-minus, ten minutes. The option to override automatic detonation will expire in t-minus, five minutes…” — Mother, “Alien” (1979)

Have you ever felt like Ripley — Sigourney Weaver — at the end of Alien? After the monster has wiped out all of her fellow crew members, she decides to kill it by blowing up her spaceship, the Nostromo. She sets the ship’s self-destruct mechanism and races for the escape shuttle — only to find the alien now blocking her way.

The next few minutes are a hair-raising race against time. As Ripley barrels back through the long corridors of the space ship, “Mother,” the voice of the ship’s computer, ominously counts down the time left until everything will go kaboom in a blinding, space-bending explosion.

The stock market feels a little like this. The higher it goes, the more euphoric the cheerleading, the more the airheaded Gamma-class humans put on the happy face and hum their way to work, the more terrifying it becomes for anyone who actually bothers thinking. (Luckily, this excludes most of Wall Street). At best we feel like Jones, the ship’s cat, getting banged around in a portable cage.

I hate to state the obvious, but stocks are just a claim on companies’ future dividends. That’s it. By definition, the higher they rise in price, the worse a deal they are. (I am amazed this is ever a subject of debate, as it is a tautology). Mom and Pop, with an instinct for self-preservation which suggests human beings are descended from the lemmings, usually pile on board at the peak.

Is it happening again?…”

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Global markets rallied, but a bull bear tug of war was had for the opening of U.S. equities.  It was not until good PMI numbers came out that U.S. equities began a small rally with Transports hitting a new high. Currently the transports lead the DOW by two times the upside for the year.

All in all we are have a digestion day after yesterday’s central bank bubble rally.

Europe is closing on its highs for the day as Italy and other sovereign nations see their bonds rise and Mario Draghi touts stimulus and further QE.

Currently the DOW is up 5 after being up as much as 20ish.

Gold is off $17 and WTI is down  $0.26.

The Euro remains flat and the dollar is up against most major peers.

Market update

“Barnes & Noble has reported Q3 2013 earnings for the fiscal three-month period ending January 31, with a loss of $0.18 per share on quarterly revenues of $2.2 billion. That’s down 8.8 percent from the same period last year, when B&N reported gains of $0.71 per share.

Net losses in Q3 totaled $6.1 million, a clear drop from net earnings of $52 million a year ago.

Analysts predicted revenues of $2.4 billion, and an EPS of $.54. Last quarter saw revenues of $1.9 billion and losses of $0.04 per share.

Q3 has been a messy one for the retailer, which started out as a college text book store. The holiday period, which is usually a sure spike for retailers, left Barnes & Noble with a 10.9 percent sales decrease on B&N retail and BN.com from the same time last year. B&N blames this on declining Nook hardware sales at its retail locations.

Reports are floating around that Barnes & Noble may spin out its Nook hardware business, or perhaps focus its OEM vision on partnerships with Microsoft.

Barnes & Noble denies the reports, with CEO William Lynch stating today that the company is adjusting the Nook strategy and righting the segment’s cost structure. But based on the widening losses compared to Barnes & Noble’s glory days, a drastic change could be needed….”

Full report

“NEW YORK—In its latest Household Debt and Credit Report, the Federal Reserve Bank of New York announced that in the fourth quarter of 2012 outstanding consumer debt increased slightly ($31 billion), breaking the downward trend observed since the fourth quarter of 2008.  The increase was primarily due to a rise in non-housing debt and the stabilization of mortgage debt.

Total consumer indebtedness was $11.34 trillion, 0.3 percent higher than the previous quarter but considerably lower than its peak of $12.68 trillion in the third quarter of 2008. While outstanding mortgage debt remained roughly flat, originations of new mortgages rose to $553 billion, a fifth consecutive quarterly increase.

Non-housing debt balances increased for the third straight quarter and now stand at $2.75 trillion, up 1.4 percent in the fourth quarter.  All non-housing components increased; auto loans up $15 billion, student loans up $10 billion and credit cards up $5 billion.

“The data provides early evidence that consumers may be reaching the end of the four year deleveraging cycle….”

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“Federal subsidies and Federal Reserve policies enabled a vast expansion of debt that masked the stagnation of income. Now that the housing bubble has burst, this substitution of housing-equity debt for income has ground to a halt.

What could go wrong with the housing recovery in 2013?

To answer this question, we need to understand that housing is the key component in household wealth. As a result, Central Planning policies are aimed at creating a resurgent “wealth effect”: When people perceive their wealth as rising, they tend to borrow and spend more freely. This is a major goal of U.S. Central Planning.

Another key goal of Central Planning is to strengthen the balance sheets of banks and households. The broadest way to accomplish this is to boost the value of housing. This then adds collateral to banks holding mortgages and increases the equity of homeowners.

Some analysts have noted that housing construction and renovation has declined to a modest percentage of the gross domestic product (GDP). This perspective understates the importance of the family house as the largest asset for most households and housing’s critical role as collateral in the banking system.

The family home remains the core asset for all but the poorest and wealthiest Americans. Roughly two thirds of all households “own” a home, and primary residences comprised roughly 65% of household assets of the middle 60% of households – those between the bottom 20% and the top 20%, as measured by income. (The U.S. Census Bureau typically divides all households into five quintiles; i.e., 20% each.)

Since housing is the largest component of most households’ net worth, it is also the primary basis of their assessment of rising (or falling) wealth (i.e., the “wealth effect.”) No wonder Central Planners are so anxious to reflate housing prices. With real incomes stagnant and stock ownership concentrated in the top 10%, there is no other lever for a broad-based wealth effect other than housing.

Extreme Measures

Given the preponderance of housing in bank assets, household wealth, and the perception of wealth, the key policies of Central Planning largely revolve around housing: keeping interest rates (and thus mortgage rates) low, flooding the banking sector with liquidity to ease lending, guaranteeing low-down-payment mortgages via FHA, and numerous other subsidies of homeownership.

At least three aspects of this broad-based support are historically unprecedented:

1) The purchase of $1.9 trillion of mortgage-backed securities (MBS) by the Federal Reserve.

The Fed purchased $1.1 trillion in mortgages in 2009-10 and it recently launched an open-ended program of buying $40+ billion in mortgages every month. Recent analysis by Ramsey Su found that Fed purchases have substantially exceeded the announced target sums; the Fed is on track to buy another $800 billion within the next year or so. This extraordinary program is, in effect, buying 100% of all newly-issued mortgages and a majority of refinancing mortgages.

Never before has the nation’s central bank directly bought 15%+ of all outstanding mortgages this raises the question: Why has the Fed intervened so aggressively in the mortgage market? There is no other plausible reason other than to take impaired mortgages off the books of insolvent lenders, freeing them to repair their balance sheets.

Regardless of the policy’s goal, the Fed now essentially controls a tremendous percentage of the mortgage market.

2) …..”

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“Inflating phantom assets to collateralize expanding debt is failing due to diminishing returns on stimulus, zero-interest rates, money-printing and monetization of Federal debt.

That the policies of central states and banks have led to one disastrous asset bubble after another over the past 15 years is undeniable. This poses the question: is this serial bubble-blowing intentional, or are the bubbles merely unintended consequences of the neoliberal, neofeudal model of financialization that dominates global finance?

The answer boils down to this: inflate assets or die. The only way to support consumption in an era of declining wages is to enable more borrowing, and the only way to enable more borrowing is to:

1. Lower interest rates to near-zero so stagnant income can leverage higher debt

2. Inflate assets to create phantom collateral that can then support additional debt.

Central states live off taxes skimmed from wages and profits. If wages are stagnant, the state needs profits and capital gains to rise to support higher tax revenues.

In other words: inflate assets or die.

The entire scheme of generating GDP with more and more debt now yields diminishing returns.

Unfortunately for the central states and banks, though their unprecedented fiscal stimulus and money-printing has doubled the stock market off its 2009 lows, efforts to reflate housing have been tepid at best.

This matters because only the top 10% own enough stocks and bonds to make a difference in household net worth, while two-thirds of households own a home. Inflating another asset bubble in stocks was nice for the financial Aristocracy and their technocrat-class, but it didn’t do much to boost the net worth of the bottom 90% or enable more borrowing.

Let’s look at some charts that reflect the failure of massive money-printing and credit expansion to actually boost wages and household borrowing.

First up: real income (adjusted for inflation) has been flat to down since 2000:

Meanwhile, the ratio of household net worth to total credit market debt owed has plummeted, meaning that debt is rising much faster than net worth. This is called debt saturation: adding more debt generates less and less expansion of wealth…..”

Full article and many more charts

“Results: Adjusted Earnings Per Share decreased to $-0.32 in the quarter versus EPS of $0.22 in the year-earlier quarter.

Revenue: Rose 0.34% to $1.7 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Cablevision Systems Corporation reported adjusted EPS loss of $0.32 per share. By that measure, the company missed the mean analyst estimate of $0.09. It missed the average revenue estimate of $1.7 billion.

Quoting Management…”

Full report

“AOL AOL -2.03% Chief Operating Officer Artie Minson plans to leave the company by year-end, according to people familiar with the matter, amid a restructuring that the company announced Thursday that eliminates his position and brings in media veteran Susan Lyne to oversee some of AOL’s content properties.

The shuffle comes just eight months after AOL CEO Tim Armstrong promoted Mr. Minson to what was then a newly created COO position from his previous post as chief financial officer. Now AOL says it is seeking to decentralize its top management.

Mr. Minson, who had been seen as one of Mr. Armstrong’s most trusted lieutenants, also had differences over strategy with Mr. Armstrong, say people familiar with the matter. They say Mr. Minson disagreed with Mr. Armstrong on how the company was running the Huffington Post and its Patch network of local news sites, believing they required restructuring. However, people familiar with Mr. Armstrong’s thinking say that Patch, which Mr. Armstrong co-founded, wasn’t a factor in the restructuring. Mr. Minson declined to comment…..”

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“U.S. natural-gas production will accelerate over the next three decades, new research indicates, providing the strongest evidence yet that the energy boom remaking America will last for a generation.

The most exhaustive study to date of a key natural-gas field in Texas, combined with related research under way elsewhere, shows that U.S. shale-rock formations will provide a growing source of moderately priced natural gas through 2040, and decline only slowly after that. A report on the Texas field, to be released Thursday, was reviewed by The Wall Street Journal.

The research provides substantial evidence that there are large quantities of gas available that can be drilled profitably at a market price of $4 per million British thermal units, a relatively small increase from the current price of about $3.43.

The study, funded by the nonpartisan Alfred P. Sloan Foundation and performed by the University of Texas, examined 15,000 wells drilled in the Barnett Shale formation in northern Texas, mostly over the past decade. It is among the first to study the geology and economics of shale drilling, a relatively recent development made possible by hydraulic fracturing, or fracking, in which a mixture of water, sand and chemicals is pumped at high pressure into rocks to release gas.

Looking at data from actual wells rather than relying on estimates and extrapolations, the study broadly confirms conclusions by the energy industry and the U.S. government, which in December forecast rising gas production….”

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“Molycorp is delaying its quarterly results and its annual report as it has yet to determine the size of a goodwill impairment charge that it will have to book in the fourth quarter, the rare earth producer said on Thursday.

Shares of Molycorp were down more than 8 percent in pre-market trading. (Click here to track Molycorp stock before the opening bell.)

The company was expected to report financial results for the fourth quarter and full year ended Dec. 31 later on Thursday…”

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“Boeing and the Japanese firm that makes lithium-ion batteries for the 787 Dreamliner disagree about what should be included in a package of measures aimed at getting the airliner back in the air, the Wall Street Journal reported.

But Boeing Commercial Airplanes CEO Ray Conner told reporters in Tokyo that there was no dispute with GS Yuasa about the proposed solution, adding the planemaker has “a great partnership” with the Kyoto-based battery maker.

All 50 of the technologically-advanced Dreamliners in service have been grounded since mid-January after a battery fire on a Japan Airlines Co Ltd 787 at Boston airport and a second battery incident on an Nippon Airways flight in Japan.

GS Yuasa believes the battery fix should include a voltage regulator that could stop electricity from entering the battery, the Journal said, citing government and industry officials.

Boeing proposed its fix to the U.S. Federal Aviation Administration (FAA) last Friday. The previous day, GS Yuasa told the FAA that its laboratory tests indicated a power surge outside the battery, or other external problem, started the failures on the two batteries, according to the newspaper.

Boeing’s solution included a stronger containment box, a battery with greater cooling capacity and other changes.

The FAA confirmed the meeting with GS Yuasa, but gave no details. A GS Yuasa spokesman declined to comment….”

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