Druckenmiller Blasts "The Biggest Redistribution Of Wealth From The Poor To The Rich Ever"

Submitted by Tyler Durden on 09/19/2013 - 09:38

Reflecting on exactly what was said yesterday, Duquesne's Stanley Druckenmiller is initially perplexed as Bernanke explained 'financial conditions' - not interest rates - have prompted the decision to forestall any taper. His confusion is that financial conditions are actually slightly better than they were in June and "a stock market at an all-time high would suggest we don't have a problem with financial conditions." While he dismisses surveys, the big-money was betting that they were going to taper as is clear from the moves in gold, bonds, and stocks; and it appears the Fed "lost their nerve." In fact, Druck continues, the Fed "blew it... they had a freebie," they could have started the process to "get us off the dope." This action, or inaction, he warns "is going to make it so much harder for the next Chairman to start the process." In fact, he concludes, that from beginning to end - once markets adjust from these subsidized prices - that the wealth effect of QE will have been negative not positive.

BaNZaI7 ReVieWS TaPeR BaSiCS... Posted by: williambanzai7 Post date: 09/17/2013 - BANZAI7 FOOD AND BEVERAGE WARNING LEVEL 8

BaNZaI7 ReVieWS TaPeR BaSiCS...

Submitted by williambanzai7 on 09/17/2013 15:14 -0400

RIA Novosti | Putin said Thursday that it was possible he would seek a fourth presidential term.

Median Household Income Has Fallen For FIVE YEARS IN A ROW

If the economy is getting better, then why do incomes keep falling? According to a shocking new report that was just released by the U.S. Census Bureau, median household income (adjusted for inflation) has declined for five years in a row. This has happened even though the federal government has been borrowing and spending money at an unprecedented rate and the Federal Reserve has been on the most reckless money printing spree in U.S. history. Despite all of the "emergency measures" that have been taken to "stimulate the economy", things just continue to get worse for average American families. Americans are working harder than ever, but their paychecks are not reflecting that. Meanwhile, the cost of everything just keeps going up. The Federal Reserve insists that inflation is "low", but anyone that goes grocery shopping or that stops at a gas station knows that is a lie. In fact, if inflation was calculated the exact same way that it was calculated back in 1980, the inflation rate would be somewhere between 8 and 10 percent right now. Paychecks are being stretched more than ever before, and that is probably the reason why about three-fourths of the entire country is living paycheck to paycheck at this point. (Read More....)

Obamacare Subsidies Show Huge Rift Between Congress, Citizens

‘Nothing angers United States Senators more than having their perks taken away. And chief among those perks is top-of-the-line healthcare at little or no cost.

But due to Obamacare’s sloppy drafting, the congressional healthcare perk is suddenly vulnerable. And Congress isn’t happy.

So Barack Obama – who’s spent much of the summer making adjustments to Obamacare that aren’t legal – is tweaking the law yet again. He’s taken the aggressive position that his staff can rewrite Obamacare at will. No congressional action is required to change the law, according to their logic.

First the business mandate vanished. Originally, businesses with over 50 employees were supposed to provide insurance as of January 1. Obama unilaterally delayed this mandate for at least another year.

Next, the online marketplaces that sell the healthcare plans have been all but forgotten. They were supposed to automatically calculate subsidies based on income, but the programmers don’t have the systems ready. Not to worry – Obama said that all you have to do if you want a subsidy is claim one. There’s currently no way to verify whether your claim for a subsidy is legitimate…and there may never be.

And finally, in his most outrageous move yet, Obama has tweaked the healthcare law to make sure congressmen and their staffs can collect big subsidies for their coverage. Obama ordered the Office of Personnel Management (OPM) to reinterpret the law, and with the revisions in place, millionaire members of Congress will once again get their full subsidy.

Until Obamacare was passed, congressmen, along with all other Federal employees, participated in the Federal Employees Health Benefits Program (FEHBP), and they routinely receive subsidies of $5,000 to $15,000 per year.

But when Obamacare was drafted, Senator Chuck Grassley, of Iowa, inserted a provision that all members of Congress and their staffs must buy insurance through the Obamacare health exchanges.

“The more that Congress experiences the laws it passes, the better,” Grassley said at the time. Since it’s difficult for Congress to argue that they be exempt from their own laws, they caved to Grassley’s demand.

Everyone thought the Grassley language would end federal healthcare subsidies. But the squeals in D.C. became so loud this summer that Obama rewrote the bill again. This time, he made sure Congress and their staffs would still get the subsidies they so desperately craved.

But one congressman, Senator David Vitter, of Louisiana, doesn’t think this is right. He’s called for a vote to end the congressional exemption from paying full freight for health insurance.

Vitter’s bill would stop the rewrite and once again subject congressmen and their staffs to the same problems faced by Americans who are paying more money for less care under the “Affordable Care Act.” In reality, the act is neither affordable nor fair, as millions of Americans are about to lose employer-based healthcare.

Meanwhile, on Capitol Hill, Harry Reid was actually forced to shut down the Senate to keep any debate of the Vitter bill from taking place. Reid and the other leaders of the Senate don’t want Americans to know what’s going on. They’re worried that all Americans will begin demanding discounted healthcare.

After being pushed around, Vitter was so mad he actually made a complaint to the Senate Ethics Committee about Reid and Senator Barbara Boxer. The language used is rarely on display in the Senate, a body that prides itself as the home of honest and fair discussion.

The Vitter language is so strong, I want to quote it exactly: “Harry Reid is acting like an old-time Vegas mafia thug, and a desperate one at that… Threatening to take away their colleagues’ health care coverage subsidy if they do not vote a certain way at worst constitutes bribery and a quid pro quo arrangement, and at best amounts to improper conduct,” he said.

Unfortunately, in spite of Vitter’s best efforts, the outcome here is pre-determined. Senators and staffers will get their subsidies. But it’s refreshing to see someone on Capitol Hill actually working to end a perk.

Janet Yellen: What A Horrifying Choice For Fed Chairman She Would Be

Are you ready for Janet Yellen? Wall Street wants her, the mainstream media wants her and it appears that her confirmation would be a slam dunk. She would be the first woman ever to chair the Federal Reserve, and her philosophy is that a little bit of inflation is actually good for an economy. She was reportedly the architect for many of the unprecedented monetary decisions that Ben Bernanke made during his tenure, and that has many on Wall Street and in the media very excited. Noting that we "already know that Yellen is on board with Bernanke's easy money policies", CNN recently even went so far as to publish a rabidly pro-Yellen article with this stunning headline: "Dear Mr. President: Name Yellen now!" But after watching what a disaster Bernanke has been, do we really want more of the same? It doesn't really matter whether she is a woman, a man, a giant lizard or a robot, the question is whether or not she is going to continue to take us down the path to ruin that Bernanke has taken us. As I have written about so many times, the Federal Reserve is at the very heart of our economic problems, and under Bernanke the Fed has created a mammoth financial bubble unlike anything that we have ever seen before. If Yellen keeps us going down that road, financial disaster is inevitable. (Read More....)

More Warnings: "This Time Is Different" { We all know this time’s not different; that their policy of evermore worthless fiat currency printing/creating and debasement thereby has been a dismal failure for all but the paper pushers/frauds on wall street et als; that things remain so bad that the failed policy by default continues for lack of a competent plan in the alternative; yes, the failed policy of obfuscating failure in the short term in favor of the visible 1% and their inflated paper/bubble barometers continues unabated as the ineluctable path to perdition. }

The equity market’s reactions to monetary policy inflection points, when (or if) the Fed takes the first step to normalize monetary policy following easing in response to recession, have been reasonably similar. As Barclays' Barry Knapp notes, irrespective of the pace of policy accommodation removal – the average policy normalization-related correction during the prior six business cycles is 8.9%. While our memories of an extremely volatile September – five years ago – remain fresh, the last four have been exceptionally tame. However, while another period of fiscal uncertainty seems likely, Knapp fears there is a key difference between this September and the surprisingly low volatility Septembers in 2009-12. In those periods, the Fed was either buying assets or had pre-announced a new program; this year, it is preparing to weaken the portfolio balance effect.

63 High Government Debt Episodes And What They Tell Us About Our Options Today

Do you wonder what to make of America’s soaring government debt and what it means for the future? Or, if you already have it figured out, are you interested in research that might challenge your position? Either way, you might like to see the results of this exercise:

1... Take each historic instance of government borrowing rising above America’s current debt of 105% of GDP.
2... Eliminate those instances in which creditors received a lower return than originally promised, due to defaults, bond conversions, service moratoriums and/or debt cancellations.
3... Of the remaining instances, consider whether and how the debt-to-GDP ratio was reduced.

In other words, let’s see what history tells us about today’s debt levels and what comes next. You may find the answer surprising.

The Greatest Debt Crisis The World Has Ever Seen Is Coming

The largest mountain of debt in the history of the world just continues to grow even larger, and everyone knows that this colossal debt spiral is not going to end well. But we all keep playing along because nobody wants the party to end. Right now, there is an unprecedented ocean of red ink covering the planet. Globally, governments have never been in so much debt, corporations have never been in so much debt and consumers have never been in so much debt. But every time someone suggests that this is a problem and that we should at least try to get debt levels to settle down a bit, people start screaming that “austerity” will hurt the global economy. And of course it will. But we can’t continue to live way, way above our means indefinitely. Well, we can try, but at some point this entire house of cards is going to come crashing down and we are going to be facing the greatest economic crisis the world has ever seen.

It is kind of like watching a slow-motion train wreck that you have no chance of possibly stopping that you know will end up killing lots of innocent people. This debt crisis is going to end up destroying the global financial system, but there is not a thing (Read More....)

Marc Faber Warns "The Endgame Is A Total Collapse - But From A Higher Diving Board Now"

With rumors this evening of the White House calling around for support for Yellen, Marc Faber's comments today during a Bloomberg TV interview are even more prescient. Fearing that Janet Yellen "would make Bernanke look like a hawk," Faber explains that he is not entirely surprised by today's no-taper news since he believes we are now in QE-unlimited and the people at the Fed "never worked a single-day in the business of ordinary people," adding that "they don't understand that if you print money, it benefits basically a handful of people." Following today's action, Faber is waiting to seeing if there is any follow-through but notes that "Feds have already lost control of the bond market. The question is when will it lose control of the stock market." The Fed, he warns, has boxed themselves in and "the endgame is a total collapse, but from a higher diving board."

Syria's Assad Interviewed By Fox; Would Tell Obama "Listen To Your People"

Putin had his NYT Op-ed. Syria's Assad, on the other hand, is going for the jugular using the "undisputed chemical weapons proof" route, aka YouTube.

On Japan's Surging Electricity Prices

On Sept. 15, the last operational nuclear reactor in Japan was shut down for routine maintenance, which may leave Japan without nuclear power for the remainder of 2013. In all likelihood, restarting nuclear power will be a long, gradual process that will have only limited, regionalized impacts at first. In the meantime, Tokyo will continue to rely heavily on more expensive thermal power. The difference has meant that several utility companies have been forced to increase rates over the past several months, which are certainly impacting Abe's ability to hike taxes any further.

Warren Buffett Has A Modest Proposal For "The Rich"

Speaking at Georgetown University's Business School alongside his best-bailed-out buddy BofA's CEO Brian Moynihan, Warren Buffett has some rules (or goals) for the "wealthy" that are summed up perfectly in this quote:

We suspect more than a few of the "rich" will be calling for Mr. Bernanke to get back to work (which ironically is exactly what Buffett himself just did - calling for another term for the printer-in-chief) so they can 'share the wealth' from the poor just a little longer.

Guess What The Fed's Original 2013 GDP Forecast Was

Guest Post: Are You Ready For Yellenomics?

Are you ready for Janet Yellen? Wall Street wants her, the mainstream media wants her and it appears that her confirmation would be a slam dunk. She would be the first woman ever to chair the Federal Reserve, and her philosophy is that a little bit of inflation is actually good for an economy. She was reportedly the architect for many of the unprecedented monetary decisions that Ben Bernanke made during his tenure, and that has many on Wall Street and in the media very excited. Noting that we "already know that Yellen is on board with Bernanke's easy money policies", CNN recently even went so far as to publish a rabidly pro-Yellen article with this stunning headline: "Dear Mr. President: Name Yellen now!" But after watching what a disaster Bernanke has been, do we really want more of the same? It doesn't really matter whether she is a woman, a man, a giant lizard or a robot, the question is whether or not she is going to continue to take us down the path to ruin that Bernanke has taken us.

Bonds And Stocks Retrace, Precious Metals Gather Pace

Yesterday's epic short squeeze in bonds (belly-specs were most short in years) and stocks ("most shorted" were heading notably lower into the statement) seems to have flushed out any and all the marginal buyers (for now) on the basis that the Fed will not be Tapering any time soon. Simply put, the best performers from yesterday were the worst performers today with 5Y and 7Y Treasury yields underperforming (+6bps or so) and the long-end retraced more than half its yield move yesterday. In stocks it was the same story, builders and utilities were the biggest losers today after being the best yesterday. The USD retraced higher with JPY weakness (Abe was not happy) as a major driver (testing up to 99.50). WTI Crude unwound all its Fed gains and then some, trading back to around $106 by the close. Gold, silver, and copper were the winners on the day - extending gains modestly. Stocks tracked oil and bonds today (not FX carry), AAPL slid into the close on disappointing UK pre-order rumors, and HY credit underperformed stocks.

Europe To Change "Deficit Calculation" To Make Economy Appear Stronger

In a world in which when the numbers don't comply with the propaganda, the only recourse is to change the rules, and if that fails, change the numbers themselves (see Fukushima radiation count, US GDP, Employment numbers, anything out of Europe, etc.) it was only a matter of time before that last sticking point of the grand made up narrative, the lack of economic improvement in the European despite evil, evil austerity (which somehow has resulted in record debt which is rising faster than expected virtually everywhere in Europe) resulting in unpalatable deficits, was magically "fixed." This was resolved moments ago when as the AP reports, "European Union finance officials have reached a preliminary agreement to change the way the bloc determines some deficit figures, which might lessen the pressure for austerity measures in crisis-hit economies." In other words, Europe's "recovery" will now be based on even more made up numbers. One wonders: since Europe is finally admitting that the numbers are fake, i.e., lying, are things finally getting truly serious again?

To Challenge These Statements Is Blasphemous

“Truth. noun. The quality of state of being in accordance with fact or reality.” This is how the dictionary defines truth: it can be ‘fact’. But it can also mean ‘reality’. The people who control the system have figured this out - if they can change someone’s reality, they control the truth. This is also the case in finance and economics. For example, I heard the following statements just in the last 48-hours while visiting the Land of the Free: “America will never default on its debt.” , “The debt doesn’t matter because we owe it to ourselves.” Again, these statements are totally unsupported by the facts. The notion that the US government won’t default on its debt is simply historically inaccurate. Such close-mindedness is dangerous, especially in economics. People’s lives and livelihoods depend on an objective understanding of the facts, not this altered reality.

John Kerry To Explain How The Syria Plan Is Going - Live Webcast

Putin hits the NY Times, Assad FOX and YouTube, McCain Pravda, and Putin making headlines this morning with all kinds of double-negatives:

*PUTIN: TOO EARLY TO THINK SYRIA MAY NOT FULFILL CHEM. ARMS PLAN
*PUTIN SAYS NOT 100% SURE SYRIA CHEMICAL ARMS PLAN WILL SUCCEED

So it only makes sense that John Kerry feels unloved by the media... cue a 1500ET press conference to explain how things are going...

Vote Of The Day: Senate In Favor Of More Hot Air

Three weeks ago we explained the importance of the looming cliff - in the government's reserves of helium. With a never-ending pun-trail related to "hot-air" or markets "blowing up", we stick to the facts. With the threat of a glonal helium shortage potentially weighing on fibre-optic cables and flat-screen TVs, the always-reaady-to-negotiate members at the Senate have agreed to support an amendment that prevents the October 7th termination of the helium storage program. So thanks to political "hot air" (we couldn't resist), the helium cliff is resolved... why so easy you wonder? Perhaps this is why "...Helium is also used in national defense applications such as rocket engine testing and purging, surveillance devices, air-to-air missiles and scientific balloons."

Long Bond Retraces 50% Of Taperuption Gains

Yesterday, when in the aftermath of the Fed's "shocking" announcement bond yields plunged, the bond kings, both old and new couldn't get to a media outlet fast enough to express their euphoria over the end of the selloff. Gross tweeted immediately that he was "not bragging but what did we tell you" while Gundlach added that he "sees a change in Psychology with the 10 Year below 2.7%." It is unclear just what psychological change he was referring to, because looking at the market it was one of resumed selling: as of moments ago, the 10 Year has retraced over a third of its plunge and is back to 2.75% and rising once again; and the 30Y has retraced over 50% of its gains at 3.80%. We are going to need another un-Taper soon.

European "Second Half Recovery" Indefinitely Postponed As Adidas Cuts Forecast

With EURJPY at four-year highs and EURUSD back at 2013 highs, it seems the reality of currency wars are coming home to Draghi - when's the next ECB meeting?

Houston, We Have A Sustainability Problem

5.8 Magnitude Quake Shakes Fukushima

JAPAN EARTHQUAKE LEVEL 5+ ON JAPANESE SCALE OF 7 IN FUKUSHIMA
EARTHQUAKE REPORTED TO HAVE HIT AT 02:25:09 JAPAN TIME: JMA
JAPAN EARTHQUAKE MAGNITUDE 5.8, AGENCY SAYS

Of course, we are sure Abe will just rebuild it all, ringfence it with another ice-wall, and welcome athletes from all around the world to his 'stable' nation.

"Fed Credibility In Tatters", Credit Agricole Laments: "Market In State Of Shock"

The "market is in a state of shock" after the Fed's decision to postpone taper, noted Credit Agricole's David Keeble adding that "Fed credibility and its communication strategy are in tatters." This, as others have noted, will make it many times more difficult to manipulate yields lower in the future as the "Fed is moving to a new way of looking at asset purchases." As we explained in detail 15 months ago, Keeble notes the Fed appears to have clearly signaled that the degree of accomodation is not linked to size of the Fed balance sheet, but that the flow of Fed buying is "very important."

So, it's the flow, not the stock; and that means, as we noted here, that unless The Fed is actively engaged in monetization at every given moment, the impact from easing diminishes progressively; ultimately approaching zero and subsequently becoming negative.

McCain Says It’s Not True That 40% Of Syrian Rebels Are Extremists Because He’s Met Them All

Steve Watson | Blathering Senator refuses to believe details of expert study.

Ron Paul: Bernanke Admits Economy Is In Bad Shape

Confirmed: Navy Yard Shooter Was On Anti-Depressant Trazodone

Paul Joseph Watson | Drug linked to previous mass shooting despite Washington Post declaring it “safe”.

Matt Drudge and Alex Jones: 17-year Old Bloggers

Kurt Nimmo | Feinstein and Schumer are preparing to wage war on the alternative media.

Paul Family Preparing For Rand 2016 Presidential Bid

Steve Watson | Ron Paul: “I would think Rand is running”; Carol Paul: 2016 bid “feels real”.

Experts: Fed’s QE Unlimited Will Lead to “Total Collapse”

Paul Joseph Watson | Americans to suffer through higher food, gas & energy prices.

Navy Yard Shooting: SWAT Team Ordered to ‘Stand Down’

Julie Wilson | Elite tactical team responsible for defending DC Capitol complex were reportedly ordered to leave the scene

CNS News | At the close of every business day since May 17, the debt has remained just $25 million below the limit.

Paul Joseph Watson | Americans to suffer through higher food, gas & energy prices.

Ron Paul: Bernanke Admits Economy Is In Bad Shape

Druckenmiller Blasts “The Biggest Redistribution Of Wealth From The Poor To The Rich Ever”

Confirmed: Navy Yard Shooter Was On Anti-Depressant Trazodone

Paul Joseph Watson | Drug linked to previous mass shooting despite Washington Post declaring it “safe”.

Gennifer Flowers: Bill Clinton told me “Hillary had eaten more p*ssy than he had”

Daily Mail | “Bill told me and that was that he was aware that Hillary was bisexual.”

Paul Family Preparing For Rand 2016 Presidential Bid

Steve Watson | Ron Paul: “I would think Rand is running”; Carol Paul: 2016 bid “feels real” .

Matt Drudge and Alex Jones: 17-year Old Bloggers

Kurt Nimmo | Feinstein and Schumer are preparing to wage war on the alternative media.

Experts: Fed’s QE Unlimited Will Lead to “Total Collapse”

Paul Joseph Watson | Americans to suffer through higher food, gas & energy prices.

Contractor Behind Snowden Vetting Did Washington Shooter Check

Bloomberg | The U.S. government contractor that vetted Edward Snowden also performed a background check on the Washington Navy Yard shooter.

Zero Hedge | Faber’s comments during a Bloomberg TV interview are even more prescient.

libertyblitzkrieg.com | The government’s bailout plan destroyed capitalism.

Five Years Of Hard Work By The Federal Reserve

War Is Coming: 10 Reasons Why A Diplomatic Solution To The Syria Crisis Is Extremely Unlikely

Over the past few days, there has been a tremendous wave of optimism that it may be possible for war with Syria to be averted. Unfortunately, it appears that a diplomatic solution to the crisis in Syria is extremely unlikely. Assad is certainly willing to give up his chemical weapons, but he wants the U.S. to accept a bunch of concessions that it will never agree to. And it certainly sounds like the Obama administration has already decided that “diplomacy” is going to fail, and they continue to position military assets for the upcoming conflict with Syria. Meanwhile, Saudi Arabia, Qatar and Turkey are all going to continue to heavily pressure the Obama administration. They have invested a huge amount of time and resources into the conflict in Syria, and they desperately want the U.S. military to intervene. Fortunately, overwhelming domestic and global opposition to an attack on Syria has slowed down the march toward war for the moment, but unfortunately that probably will not be enough to stop it completely. The following are ten reasons why war is almost certainly coming… (Read More.....)