Mish's Global Economic Trend Analysis

"Win-Win" Situation for Employers to Not Offer Healthcare to Part-Time Employees
Police Investigate 'United Stasi of America' Artist
Portugal Uncorks Bottle of EU Crisis Genie
German Officials Liken EU Banking Power Proposal to "Nazi Enabling Acts"; What Germany Can Expect; What About the UK?
Gold Jumps Nearly $50 as Market Digests Non-News From Fed; Gold Correction Over?

"Win-Win" Situation for Employers to Not Offer Healthcare to Part-Time Employees

Posted: 11 Jul 2013 11:04 PM PDT

The peculiarities of Obamcare keep piling up. Here's the latest: Wegmans, a Rochester-based grocery store has decided to do something beneficial for its part-time employees, stop health care insurance.

The reason? Employers and employees alike are better off if the employer does not offer health-care benefits to part-time employees.

Please consider Wegmans cuts health benefits for part-time workers.

Et tu, Wegmans?

The Rochester-based grocer that has been continually lauded for providing health insurance to its part-time workers will no longer offer that benefit.

The company said the decision was related to changes brought about by the Affordable Care Act.

Part-time employees may actually benefit from Wegmans' decision, according to Brian Murphy, a partner at Lawley Benefits Group, an insurance brokerage firm in Buffalo.

"If you have an employee that qualifies for subsidized coverage, they might be better off going with that than a limited part-time benefit," Murphy said.

That's because subsidized coverage can have a lower out-of-pocket cost for the insured employee while also providing better benefits than an employer-paid plan.

Under the Affordable Care Act, part-time employees are not eligible for health insurance subsidies if their employer offers insurance.

"It's a win-win. The employee gets subsidized coverage, and the employer gets to lower costs," Murphy said.

Wegmans employs roughly 1,433 full-time employees and 4,304 part-time employees in the Buffalo Niagara region.

Now Ain't That Special

Police Investigate 'United Stasi of America' Artist

Posted: 11 Jul 2013 08:09 PM PDT

Is it illegal to project a sign such as the following onto a building?

What if the person projecting the image is in Germany, and the target building is the US embassy in Berlin?

The Local reports Police investigate 'United Stasi of America' artist

Berlin police are investigating whether an artist who projected "United Stasi of America" onto the US embassy in the German capital earlier this week could be charged with a criminal offence.

German artist Oliver Bienkowski projected the message, along with a picture of internet tycoon and online activist Kim Dotcom onto the US embassy in Berlin on Sunday night.

He was likening reported sweeping internet surveillance by Washington and London to spying by the former East German secret police. And while the image was projected onto the building for 30 seconds on Sunday night, the action has caused quite a stir.

An investigation has been launched into whether the action constituted "slander against the organizations and representatives of a foreign state," the Berlin-based Der Tagesspiegel newspaper reported on Thursday.

Bienkowski's lawyer Fabian Eickstädt pointed out that the projection was onto the US embassy, which is technically US territory. "For me it is not even clear whether German law would apply," he said.

And Der Tagesspiegel said that a criminal case of slander could only be launched if the victim were to make a formal complaint. The US embassy told the paper it had no interest in a prosecution.

I commend the message and the target.

For those not familiar with the term, Stasi refers to the secret police in East Germany. Origin is from German Sta(ats)si(cherheitsdienst), literally: state security service.

Given the US cannot prosecute out of fear of publicity, let's hope this practice spreads.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Portugal Uncorks Bottle of EU Crisis Genie

Posted: 11 Jul 2013 12:34 PM PDT

The Financial Times reports Portugal president's call for national unity backfires

[President] Aníbal Cavaco Silva's call for a "national salvation" agreement between the ruling coalition and the main opposition party, leading to early elections in June 2014, was intended to restore calm following a government crisis triggered by the resignation of two senior ministers.

But the president's appeal for a cross-party deal in support of the country's €78bn bailout programme prompted a fresh increase in bond yields on Thursday and hit share prices that had only just recovered from last week's political turmoil.

"Portugal is in a deeper crisis than it was a week ago," said Ricardo Santos, an analyst with BNP Paribas. "The president sought to ease volatility, but he has almost certainly increased it."

Silva ruled out holding an immediate snap election, saying this would significantly increase the risk of Portugal needing a second bailout. But he called on the three parties to agree on holding an early ballot next June, a year ahead of schedule.

Agreeing to Mr Cavaco Silva's proposal would require António José Seguro, the opposition PS leader, to support €4.7bn in planned spending cuts and the potential laying off of tens of thousands of state workers, measures that he vehemently rejected until now.

"It's difficult to see how the president's proposal can work given that the concessions involved could end the political careers of both the opposition leader and the prime minister," said Mr Santos.

Portugal was plunged into crisis last week after Paulo Portas, leader of the junior coalition party, resigned as foreign minister less than 24 hours after Vítor Gaspar also quit as finance minister amid tensions caused by government austerity policies.

Portugal 10-Year Bond Yield

Multiple Crisis Genies Unleashed

The coalition in Portugal cannot last and Portugal is 100% certain to need another bailout.

With German elections coming up in September, politicians everywhere are scrambling to contain the "Crisis Genie" until after the election.

Financial Times writer Peter Wise says Last week's protests in Portugal show it will not take much to uncork the botle of the ECB's crisis genie.

I suggest more than one genie is already out of the bottle: the spy genie, the Italy genie, the Portugal genie, the EU Banking Proposal genie, etc.

Some genies are more powerful than others, but all will help AfD bring an end to the regime of chancellor Merkel in September. For related discussion, please see Germany Election Update: AfD Soars in Online Poll; Is Merkel Toast?

German Officials Liken EU Banking Power Proposal to "Nazi Enabling Acts"; What Germany Can Expect; What About the UK?

Posted: 11 Jul 2013 11:21 AM PDT

In June, an EU commission put forth a banking resolution proposal giving itself powers in which the ability to shut down banks would be centralised in the European Commission.

Brussels would have the clout to overrule the bank's home country and use funds from a central pot.

Specifically, the commission proposed the resolution authority to "be equipped with a single bank resolution fund". The fund would have the power to borrow from markets, using the "assets of euro area banks" as a guarantee and backstop.

Nazi Enabling Acts

The proposal was presented on Tuesday by Michel Barnier, EU commissioner for internal market and services, and immediately went up in flames when German politicians likened Brussels bank powers to Nazi 'enabling acts'.

The head of a Bavarian banking association compared the European Commission's plan to grant itself the final say on winding up troubled banks to the type of law that allowed the Nazis to seize power.

The comments by Stephan Götzl, head of the GVB, the Bavarian association of co-operative banks, underscore the depth of German opposition to the plans presented on Tuesday by Michel Barnier, EU commissioner for internal market and services.

"We in Germany have had a bad experience with enabling acts," he said, appearing to refer to the 1933 constitutional amendment that handed the Nazis sweeping powers to enact legislation, unchecked by parliament.

The remarks were first reported by the Wall Street Journal and confirmed later by a spokesman. The spokesman noted Mr Götzl had not specifically mentioned Hitler or the Nazis.

"In our view, this proposal gives the commission powers it does not possess according to current [EU] treaties," chancellor Angela Merkel's spokesman said on Tuesday

Wolfgang Schäuble, Ms Merkel's finance minister, also warned Brussels to respect the limits of the law or "risk major turbulence".

A spokesperson for Mr Barnier declined to respond to Mr Götzl's comments.

Mr Barnier is confident the proposed measures are legally sound and cites support from lawyers at the commission, the European council and European Central Bank. Officials say they reluctantly proposed powers for the commission, rather than a separate agency, and did so only because it was the most legally solid and effective institution to handle bank crises under existing EU treaties.

Mr Barnier contends Europe cannot afford to wait for treaty change, which is typically an arduous process that can take years. Brussels wants the resolution regime, commanding some 300 staff, to begin from January 2015.

Reflections on What Germany and the UK Can Expect

The EU will stop at nothing to give itself sweeping powers to do whatever the hell it wants including the creation of monetary transfer mechanisms that are absolutely against the German constitution.

In case this was not obvious before (it should have been), it is certainly obvious now.

Note the excuse by Mr Barnier "Europe cannot afford to wait for treaty change". In other words, to hell with legalities and treaties.

This is such a dangerous, slippery slope that even Merkel and Schäuble commented on it.

What About the UK?

The same applies to the UK in a broader sense (in regards to the EU as opposed to the eurozone).

The only solution is for Germany to say it has had enough of the transfer proposals and to exit the European Monetary Union (EMU). For identical reasons, the UK should exit the EU.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Gold Jumps Nearly $50 as Market Digests Non-News From Fed; Gold Correction Over?

Posted: 11 Jul 2013 12:32 AM PDT

Inquiring minds note the interesting action in gold today following the non-news from the FOMC minutes from June 18 that the Bernanke Fed is not quite ready to tighten.

(See FOMC Minutes and Economic Projections: Dissent in Both Directions; Confused?).

Gold 15 Minute Chart

click on chart for sharper image

Gold Correction Over?

I wonder why anyone thought the Fed was really going to tighten in the first place. Regardless, here's the key question: Does the non-news that the Fed is not really serious about tightening mark the end of the gold correction?

Unfortunately, I cannot answer that (and no one else can either).

However, I do expect extremely negative sentiment regarding gold to bottom at any time, and perhaps this is the time.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

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Thursday, July 11, 2013

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

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