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Tuesday, November 5, 2013

Posted: 05 Nov 2013 06:36 PM PST

The New York Times reports Chris Christie Re-elected Governor of New Jersey.

Gov. Chris Christie of New Jersey won re-election by a crushing margin on Tuesday, a victory that vaulted him to the front ranks of Republican presidential contenders and made him his party's foremost proponent of pragmatism over ideology.

In a state where Democrats outnumber Republicans by over 700,000, Mr. Christie won decisively, making impressive inroads among younger voters, blacks, Hispanics and women — groups that Republicans nationally have struggled to attract.

The governor prevailed, according to exit polls, despite holding positions contrary to those of many New Jersey voters on many issues, including same-sex marriage, abortion rights and the minimum wage, and despite an economic recovery that has trailed the rest of the country. But he attracted a broad coalition by campaigning as a decisive, even swaggering, leader who could reach across the aisle to solve problems, unlike the bickering politicians of Washington.

Republicans panicked by the surge in activist support for the rabble-rousing Tea Party wing represented by Senators Ted Cruz and Rand Paul were cheered by Mr. Christie's success, saying they hope the party will learn not only from the size of Mr. Christie's margin over Barbara Buono, a Democratic state senator, but also from the makeup of his support.

"We'll be led back by our governors, and Chris Christie is now at the forefront of that resurgence," said Ed Gillespie, a former chairman of the Republican National Committee. "He's proved that a conservative Republican can get votes from Hispanics and African-Americans, that a pro-life governor can get votes from women. This means that those voters are available to us, that we're not shut out demographically or geographically — that it's worth the effort."

His national profile will only increase later this month as he takes over as head of the Republican Governors Association. That position gives him sway over which state races the party chooses to spend money on, allowing him to rack up favors with other Republican politicians and create relationships with local leaders in key presidential states.

On Tuesday morning, well before polls closed on his re-election, Mr. Christie said he would be appearing frequently in "places like Ohio and Michigan and Florida," all states with incumbent Republican governors up for re-election next year, and he offered that he was also willing to help Republican incumbents in Iowa and South Carolina, states that appear early on the presidential campaign calendar.

Democrats in New Jersey who supported his re-election would not go so far as to say they would support him for president. Still, even they praised his potential for his party.

"For the sake of the nation, somebody needs to rebuke the crazies," said former Gov. Jim McGreevey, a Democrat who now works with prisoner re-entry and praises Mr. Christie's commitment to rehabilitation programs. "This is the party of Lincoln, of Eisenhower, this is one of the great political parties in the history of democracy. What Christie has done speaks to the notion that Republicans can win if there is an adherence to principle that is guided by a healthy pragmatism."

Exit Polls

The NYT has some interesting exit polls. I put them in table form.

Gender	Chris Christie		Barbara Buono
	Share of vote	Change from 2009	Share of vote	Change from 2009
Male 46% of voters	61%	+8 pct. pts.	37%	-3 pct. pts.
Female 54%	55%	+10 pct. pts.	43%	-7 pct. pts.
Race and Ethnicity	Chris Christie		Barbara Buono
	Share of vote	Change from 2009	Share of vote	Change from 2009
White 72% of voters	68%	+9 pct. pts.	31%	-3 pct. pts.
Black 15%	20%	+11 pct. pts.	79%	-9 pct. pts.
Hispanic 9%	48%	+16 pct. pts.	48%	-17 pct. pts.
Asian 3%	N.A.	N.A.	N.A.	N.A.
Age	Chris Christie		Barbara Buono
	Share of vote	Change from 2009	Share of vote	Change from 2009
18-29 10% of voters	47%	+11 pct. pts.	53%	-4 pct. pts.
30-44 21%	52%	+2 pct. pts.	46%	+2 pct. pts.
45-64 46%	60%	+12 pct. pts.	38%	-8 pct. pts.
65+ 23%	64%	+9 pct. pts.	35%	-5 pct. pts.
Education	Chris Christie		Barbara Buono
	Share of vote	Change from 2009	Share of vote	Change from 2009
No H.S. diploma 3% of voters	N.A.	N.A.	N.A.	N.A.
High school grad 21%	62%	+14 pct. pts.	37%	-9 pct. pts.
Some college 24%	61%	+12 pct. pts.	37%	-7 pct. pts.
College 29%	61%	+7 pct. pts.	37%	-2 pct. pts.
Postgrad 24%	48%	+4 pct. pts.	50%	0 pct. pts.
Religion	Chris Christie		Barbara Buono
	Share of vote	Change from 2009	Share of vote	Change from 2009
Protestant 34% of voters	59%	N.A.	40%	N.A.
Catholic 42%	72%	N.A.	27%	N.A.
Jewish 5%	N.A.	N.A.	N.A.	N.A.
All other 9%	N.A.	N.A.	N.A.	N.A.
Party	Chris Christie		Barbara Buono
	Share of vote	Change from 2009	Share of vote	Change from 2009
Democrat 42% of voters	31%	+23 pct. pts.	67%	-19 pct. pts.
Republican 27%	92%	+1 pct. pts.	7%	+1 pct. pts.
Independent or something else 31%	64%	+4 pct. pts.	33%	+3 pct. pts.
Income	Chris Christie		Barbara Buono
	Share of vote	Change from 2009	Share of vote	Change from 2009
Under $50,000 28% of voters	51%	+11 pct. pts.	46%	-9 pct. pts.
$50,000-$99,999 33%	57%	+11 pct. pts.	41%	-6 pct. pts.
$100,000 or more 39%	62%	+7 pct. pts.	36%	-4 pct. pts.
Ideology	Chris Christie		Barbara Buono
	Share of vote	Change from 2009	Share of vote	Change from 2009
Liberal 26% of voters	29%	+20 pct. pts.	68%	-15 pct. pts.
Moderate 49%	60%	+12 pct. pts.	39%	-6 pct. pts.
Conservative 25%	85%	+3 pct. pts.	14%	-1 pct. pts.
Sex, Race and Ethnicity	Chris Christie		Barbara Buono
	Share of vote	Change from 2009	Share of vote	Change from 2009
White men 34%	69%	+6 pct. pts.	29%	0 pct. pts.
White women 38%	67%	+11 pct. pts.	32%	-6 pct. pts.
Black men 6%	23%	+12 pct. pts.	77%	-8 pct. pts.
Black women 9%	18%	+11 pct. pts.	80%	-10 pct. pts.
Hispanic men 4%	N.A.	N.A.	N.A.	N.A.
Hispanic women 5%	42%	+14 pct. pts.	54%	-16 pct. pts.
All other races 4%	47%	N.A.	46%	N.A.

Those exit poll results are from 7:57 p.m. E.S.T. Please check back in with the New York Times for updated returns.

Reflections on Christie's Win

Without a doubt Christie is now a national frontrunner for the 2016 election.

Is that a good thing?

Here is my answer in context. Readers know I preferred Christie over Mitt Romney in 2012. It was a case of the unknown vs. the known. Romney wanted a war with Iran and a trade war with China. That coupled with his stance on abortion made him unelectable.

Why?
Independents would not and did not vote for him.

Where Christie stands on unions is known and welcome. However, we still do not know much else about Christie.

Where does he stand on war-mongering, military spending in general, security, Obamacare, the NSA, the Fed, and trade policy?

Those are all unknowns.

But we do know his strong right to life message is not going to play well with most pro-choice independents, including this one. Republicans really need to throw that issue into the trashcan where it belongs. It can (and did) contribute to national election defeats.

Here's the deal. Voters, in general, can live with some restrictions on abortion. A huge majority cannot accept the viewpoint that abortion should be totally outlawed.

Republicans would be smart to adopt a middle of the road approach, as opposed to the religious-wrong approach of overturning Rove vs. Wade.

Similarly (right, wrong, or otherwise), the majority of Americans are in favor of "some" gun control measures. I can debate this form either side. But debate is pointless. The simple fact of the matter is that Republicans do not do themselves any favors by nominating extreme candidates on these issues.

In contrast to Christie, we know where Rand Paul stands on all of those issues. And while I do not agree with Paul on everything, this time I will take the known (Rand Paul) as opposed to the unknown (Chris Christie).

Given they seem to agree on my one key dispute with Paul, my position is highly unlikely to change. Still, Republicans can do far worse than Christie.

Mitt Romney was a complete disaster. Hopefully the Republican leadership learned a lesson. If they didn't, and if Republicans nominate another extreme right basket-case, Republicans can expect to lose the election to Hillary Clinton in 2016. Don't blame me, I am only the messenger.

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

In Praise of Pronounced Unhappiness

Posted: 05 Nov 2013 12:28 PM PST

Today, I sing in glorious praise of unhappiness. Lest you think I lost my mind, first consider an Op-Ed in The Hill by life-long friend David Wise. He writes on Ending the Budget Wars.

For the second time in two years the U.S. has stepped back from the precipice of default.

In January, absent agreement to the contrary, a second sequestration will go in effect and on February 7, 2014 the nation would face yet another debt ceiling crisis. The inability of the so-called supercommittee to reach a compromise when given a similar task in 2011 is enough reason for pessimism.

A long-term solution requires that no one come into the talks with preconditions and that everything be on the table. One sign that a successful accord has been reached is that no one walk away from the table completely happy. It is necessary. The time has come.

Common and Uncommon Ground

I am not in complete agreement with everything my life-long friend says. For starters, I disagree with his stance that a default would have been catastrophic.

That's a moot point however, and cannot be proven either way because the precipice was essentially an illusion. We may have been on the edge, but there was approximately a zero percent chance of falling off.

Those small differences aside, I wholeheartedly agree with the three key ideas in Wise's article.

We need to fix the budget problem
Everything should be on the table
No one should walk away completely happy

Compromise Misery Needed

In regards to point number 3, Wise did not go far enough. I propose what's needed is for Democrats and Republicans alike to both walk away from the table, not only unhappy, but downright miserable. Here are my proposals for mutual misery.

Democrat Misery

Huge reductions in entitlement spending
End collective bargaining of public unions
Scrap Davis Bacon and all prevailing wage laws
Increase Social Security Retirement Age
Food Stamp Reform along the lines I suggested in Treasury Secretary Pleads for Higher Taxes, More Government Spending, Big Farm Bill, No Cuts in Food Stamps
Stop disability fraud&

In return for the above much needed Democrat misery, I would be willing to accept a modest increase in taxes. Of course that would make Republicans unhappy. But unhappiness is not what we need, we need outright misery as follows.

Republican Misery

Modest tax hikes
Huge decreases in military spending
All US troops on foreign soil come home within three years
Huge reductions in military spending

Some issues are non-partisan. For example food crop supports are promoted by farm-state Republicans and Democrats. Drug imports fall along similar lines. Thus we need to spread the misery.

Non-Partisan Misery

Elimination of all tariffs
Elimination of all crop supports
Drug imports from Canada and foreign countries

Food Stamp Misery

To get people off welfare and on to workfare, we need to reduce the incentives to collect welfare. This is what I suggested earlier.

Prohibit food stamp purchases of potato chips, snacks, soft drinks, candy, pizza, frozen foods of any kind except juice.
Limit food stamp users to generic (store brand vs. name brand) dried beans, rice, peanut butter, pasta, fresh vegetables, fresh fruit, frozen (not bottled) juice, canned vegetables, canned soup, soda crackers, poultry, ground beef, bread, cheese, powdered milk, eggs, margarine, and general baking goods (flour, sugar, spices).
Calculate a healthy diet based on current prices, number in the family, ages of recipients, and base food stamps allotments on that diet.
In the interest of health and cleanliness, expand the food stamp program to include generic soap and laundry products.

My proposal would do something positive for food stamp recipients' health and the budget.

And what better way to make people miserable than to make them eat healthy? Hopefully, miserable enough to seek a job.

I am open to still more misery, as much as it takes, on each side, to balance the budget and lay a foundation for growth.

Make All the Politicians and Lobbyists Miserable

I nearly missed this key point: We need to make all of the politicians, public union advocates, and lobbyists on both sides of the aisle completely miserable. The way to do that is institute serious campaign finance reform.

Vote buying and political pandering on both sides of the aisle are key reasons we are in this fiscal mess in the first place.

To date, the word "compromise" means both sides get all the spending they want, deficit be damned. Worse yet, politicians are all too happy to let lobbyists write the legislation in return for donations. The result is the worst legislation money can buy.

Footnote

I revised the ending paragraphs with some small changes regarding food stamps, and more importantly to include campaign finance reform, vote buying, and the current meaning of compromise.

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

Non-Manufacturing ISM Beats Expectations Sending Bond Yields Higher

Posted: 05 Nov 2013 10:46 AM PST

The October 2013 Non-Manufacturing ISM Report On Business®, released today, came in at 55.4.

This was above the bloomberg consensus estimate of 54.5

ISM at a Glance

Non-Manufacturing							Manufacturing
Index	Oct	Sep	Percentage Point Change	Direction	Rate of Change	Trend in Months	Oct	Sep	Percentage Point Change
NMI™/PMI™	55.4	55.4	+1.0	Growing	Faster	46	56.4	56.2	+0.2
Business Activity/Production	59.7	55.1	+4.6	Growing	Faster	51	60.8	62.6	-1.8
New Orders	56.8	59.6	-2.8	Growing	Slower	51	60.6	60.5	+0/1
Employment	56.2	52.7	+3.5	Growing	Faster	15	53.2	55.4	-2.2
Supplier Deliveries	49.0	50.0	-1.0	Faster	From Unchanged	1	54.7	52.6	+2.1
Inventories	54.5	54.5	+0.0	Growing	Same	9	52.5	50.0	+2.5
Prices	56.1	57.2	-1.1	Increasing	Slower	49	55.5	56.5	-1.0
Backlog of Orders	50.0	50.5	-0.5	Unchanged	From Growing	1	51.5	49.5	+2.0
New Export Orders	53.0	57.5	-4.5	Growing	Slower	3	57.0	52.0	+5.0
Imports	55.0	51.5	+3.5	Growing	Faster	5	55.5	55.0	+0.5
Inventory Sentiment	62.5	62.0	+0.5	Too High	Faster	197	N/A	NA	N/A
Customers' Inventories	N/A	N/A	N/A	N/A	N/A	N/A	47	43.0	+4.0

Treasury Yields Rise

Treasury yields are up a bit in response to the numbers.
Here are a couple of charts.

$TNX: 10-Year Yield

Yield: 2.653%
+0.51 Percentage Points

$TYX: 30-Year Yield

Yield: 3.737%
+0.46 Percentage Points

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

Monday, November 4, 2013

Mish's Global Economic Trend Analysis

Still More on Obamacare Security (Or Lack Thereof); HHS Director Says "American's Deserve Better"
Curious Statement in Obamacare Website Source Code: "You Have No Reasonable Expectation of Privacy"
Former CDU Secretary General Says Germany "Must Grant Asylum" to Snowden; SPD Parliamentary Vice Chairman Says "Snowden is a Hero"

Still More on Obamacare Security (Or Lack Thereof); HHS Director Says "American's Deserve Better"

Posted: 04 Nov 2013 08:18 PM PST

In response to the curious statement in Obamacare website source code: "You Have No Reasonable Expectation of Privacy" one reader wondered if that was just "standard disclosure practice".

If so, then why didn't Cheryl Campbell, senior vice president of CGI Federal Inc., the company that built the Obamacare health care exchange website, simply say so?

The reason is now apparent. The website design is a clear breach of privacy.

Clear Breach of Privacy

The Foundry reports HealthCare.gov Users Warn of Security Risk, Breach of Privacy.

Justin Hadley logged on to HealthCare.gov to evaluate his insurance options after his health plan was canceled. What he discovered was an apparent security flaw that disclosed eligibility letters addressed to individuals from another state.

Hadley wrote to Heritage on Thursday night and also contacted the U.S. Department of Health and Human Services, which administers HealthCare.gov, as well as elected officials in his state. He has yet to hear back from HHS, even though HealthCare.gov still displays the personal information of the South Carolina residents on his account.

Dougall said he was able to register on HealthCare.gov, but decided not to sign up for insurance. "The plans they offered were grossly expensive and didn't provide the level of care I have now," he said.

After learning of the privacy breach, Dougall spent Friday evening trying to contact representatives from HealthCare.gov to no avail; he spent an hour waiting on the telephone and an online chat session was unhelpful.

"I want my personal information off of that website," Dougall said.

Security Risk

Last week, the Associated Press disclosed a government memo revealing the "high" security risk for HealthCare.gov. Those concerns surfaced at Wednesday's hearing with HHS Secretary Kathleen Sebelius, who claimed the system was secure.

Heritage cyber-security expert Steven Bucci, director of the Douglas and Sarah Allison Center for Foreign Policy Studies, said users of HealthCare.gov are leaving their personal information unsecured.

"Once it goes out over the system, it is vulnerable," Bucci said. "There appears to have been a singular lack of concern for security. The site needs to receive and transmit sensitive personal information, yet it has less than state of the art security."

Memo Raises Security Concerns

Let's dig a little deeper. Please consider Memo raises security concerns about government health website

The nation's top health official tells lawmakers 'I'm responsible' for the problems with the launch of Healthcare.gov.

Defending President Barack Obama's much-maligned health care overhaul in Congress, his top health official was confronted Wednesday with a government memo raising new security concerns about the trouble-prone website that consumers are using to enroll.

The document, obtained by The Associated Press, shows that administration officials at the Centers for Medicare and Medicaid Services were concerned that a lack of testing posed a potentially "high" security risk for the HealthCare.gov website serving 36 states. It was granted a temporary security certificate so it could operate.

Security issues are a new concern for the troubled HealthCare.gov website. If they cannot be resolved, they could prove to be more serious than the long list of technical problems the administration is trying to address.

"You accepted a risk on behalf of every user ... that put their personal financial information at risk," Rep. Mike Rogers, R-Mich., told Health and Human Services Secretary Kathleen Sebelius during questioning before the House Energy and Commerce Committee.

Sebelius Says "American's Deserve Better"

"So let me say directly to these Americans, you deserve better. I apologize.", said Sebelius.

That's a start. Not many politicians apoligise when they make a mistake. President Obama should try the same, first by firing Sebelius. Second, and more importantly, Obama should offer his own apology, then reach out to Republicans and health care officials in an attempt to fix Obamacare. Better yet, he should start all over.

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

Curious Statement in Obamacare Website Source Code: "You Have No Reasonable Expectation of Privacy"

Posted: 04 Nov 2013 11:17 AM PST

Right in the source code for the Obamacare website is the statement "You have no reasonable expectation of privacy regarding any communication of data transiting or stored on this information system".

It is curious why this message would be placed in the source code where no one would have any expectation of ever seeing it.

In the video below (which came out following last week's Congressional testimony) Rep. Joe Barton (R-Texas), a member of the House Energy and Commerce Committee, grilled Cheryl Campbell, senior vice president of CGI Federal Inc., the company that built the Obamacare health care exchange website, on the hidden language and on HIPAA compliance.

Campbell testified that the system is HIPAA Compliant.

"The HIPAA Privacy Rule addresses the saving, accessing and sharing of medical and personal information of any individual, while the HIPAA Security Rule more specifically outlines national security standards to protect health data created, received, maintained or transmitted electronically, also known as electronic protected health information."

In repeated questioning, Barton got Campbell to admit she knew that the "no reasonable expectation of privacy" line was in the code.

Barton then asked "How the hell could it be HIPAA compliant?" Campbell refused to answer the question.

The original source of the video appears to be CNS News. CNS has a longer video clip, not directly embeddable, but playable at Hidden Code on Obamacare Website Says 'No Reasonable Expectation of Privacy'.

In the longer video, after Democrat Rep. Frank Pallone got the floor, Barton asked Pallone to yield. Pallone responded "I will not yield to this monkey court!"

Pallone went on to say "the statement is no legitimate concern of this committee."

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

Former CDU Secretary General Says Germany "Must Grant Asylum" to Snowden; SPD Parliamentary Vice Chairman Says "Snowden is a Hero"

Posted: 04 Nov 2013 01:03 AM PST

Fascinating articles in Der Spiegel this past weekend, in praise of Edward Snowden. Via translation, please consider Asylum for Snowden: "Welcome Edward!"

In the debate about a possible offer of asylum in Germany to Edward Snowden, SPIEGEL contacted numerous journalists, actors, politicians and athletes for comments regarding the whistleblower.

In addition to opposition politicians, such as the Left Party leader Gregor Gysi, Snowden gets support from an unlikely source: Former CDU General Secretary Heiner Geissler says Germany "must" grant Snowden asylum.

Geissler is sad about the deterioration of the transatlantic relationship, but "Snowden has done the Western world a great service, and now it is up to us to help him"

Even social democratic politicians demand asylum. "Snowden is a hero, not a traitor," said Axel Schaefer, vice chairman of the SPD parliamentary group. One must closely examine "whether there is a way to offer Snowden asylum in Germany."

Foreign and defense politician Lars Klingbeil said "Germany must consider whether it is possible to grant asylum Edward Snowden."

Writer Ferdinand von Schirach praises Snowden in the MIRROR for the breach of its confidentiality obligations, citing a "duty for civil disobedience against the state" when required for justice.

The President of the Bundesliga, Reinhard Rauball, criticized "significant impairment of human rights" by arbitrary monitoring and praises Snowden's selfless actions.

Moderator Oliver Welke would like to give the Americans the Order of Merit. Musicians Udo Lindenberg said: "I can certainly make clear a room for him - welcome Edward."

Snowden had in principle agreed to officially testify in Germany - but wants the guarantee not to be transferred to the United States. The US has already submitted an extradition request for all relevant cases to the federal government.

Spiegel Mirror Cover

Issue 45/2013
Asylum for Snowden!
"Those who pronounce the truth, commits no crime"

Asylum Not As Easy As It Sounds

Granting Snowden asylum might be tricky. Not only would it open up a deep rift with the US, it may be a violation of treaty for Germany to grant Snowden asylum.

Reader Bernd points out ...

Mr. Snowden could be asked to come to Germany and safe passage could be guaranteed for the hearing. The law provides for that. However, the law does not provide for a permanent or semi-permanent residency of Mr. Snowden in Germany.

My friend who is one of Germany's leading immigration and asylum lawyers told me and confirmed it over and over again: German law specifies that political asylum cannot/must not be granted to citizens of countries which are considered law abiding democracies. At this moment the United States is still considered such a country.

By law and by treaties Germany will have to turn him over to the United States Authorities immediately at their request. They only need to guarantee that the death penalty will not be applied in his case – which I believe has already happened.

If German lawmakers are actually considering to bring Snowden into the country, they have no idea of the law.

I stand with those who think Edward Snowden is a patriot and hero, not a traitor. The US should drop all charges against him, and let him return to the US should he desire to come back.

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

Sunday, November 3, 2013

Mish's Global Economic Trend Analysis

"France is Not a Cash Cow"; Riots Over Ecotax Continue; Is Anyone Happy?

Posted: 03 Nov 2013 07:34 PM PST

French farmers are still not happy even though French president Francois Hollande decided to roll back the "ecotax" on large trucks following riots last week. Riots continued on Saturday, after the announced rollback.

For the prelude to this story please see my Thursday, October 31, post, Hollande's Tax Everything Plan Blows Sky High With Riots by Farmers.

French Prime Minister Jean-Marc Ayrault on Tuesday indefinitely suspended the introduction of a green tax on trucks following riots at the weekend in the Brittany region.

The move comes three days after a protest by hundreds of food producers, artisans and distributors in the western Brittany region ended in the worst riots in the area in years.

Indefinite Not Good Enough

The "indefinite rollback" on the "ecotax" (an allegedly environmentally friendly commercial transport, tax on French and foreign vehicles weighing over 3.5 tonnes) was not acceptable to the farmers, artisans and distributors. They demanded a permanent rollback.

Riots resumed on Saturday prompting French riot police use tear gas on anti-tax protesters.

French riot police fired tear gas at thousands of demonstrators in north-west France on Saturday, after some protesters hurled stones and iron bars at them in a rally against a controversial green tax and layoffs.

Protest organisers said 30,000 people, including hauliers, fishermen and food industry workers, had gathered in the town of Quimper in Brittany to demonstrate against an environmental tax on trucks and layoffs, even though the government had earlier in the week suspended the application of the so-called ecotax.

Authorities estimate that 15,000 people joined in the protest.

Some of the protestors pelted police with stones, iron bars and even pots of chrysanthemum, while others burned palettes. Police responded with water cannons and tear gas.

The prefect of the department of Finistere, Jean-Luc Videlaine, blamed the violence on a "marginal group" of right-wing extremists, who he said were believed to be among the protesters.

On Saturday, protestors marched under banners such as "Right to work", "Bretons yes, sheep no" and "France is not a cash cow".

Many also wore red caps, a symbol of the anti-tax campaign in Brittany in the 17th century.

Officials said the suspension of the tax, which would raise about one billion euros per year, would last at least several months.

Environmentalists slammed the Socialist government for postponing the tax, with Green MEP Jose Bove calling the move "pathetic" and an "incredible retreat".

No One Is Happy

What the hell was Hollande thinking when his officials announce the suspension for "at least several months"?

Was everyone but the environmentalists supposed to be happy?

"France is Not a Cash Cow"

Whoever coined the phrase "France is Not a Cash Cow" sure has that correct.

Then again, no country is a cash cow. They all tax their citizens to death then redistribute the proceeds with graft, cronyism, fraud, and plain government inefficiencies wasting most of the money.

France is so adept at wasting taxpayers' money that even the socialists are rioting.

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

Saturday, November 2, 2013

Mish's Global Economic Trend Analysis

Guilty Until Proven Innocent; Grabbing Hand of the Law

Posted: 02 Nov 2013 08:56 PM PDT

In criminal court, you are innocent until proven guilty.

It's a different matter altogether in civil forfeiture, where prosecutors can and do seize the assets of anyone on phony charges. Given there is no recourse or fine, the best the innocent victims can do is get their property back, most likely with a huge delay, if at all.

Consider the plight of Terry Dehko and his daughter Sandy Thomas. They run a small grocery store in Fraser, Michigan. Because their insurance only covers a cash limit of $10,000, they frequently make smaller deposits. One day last January, the government seized $35,000 of their assets, not in the store, but in the store account.

Officials said Dehkos had violated federal money-laundering rules, which forbid people to "structure" their bank deposits so as to avoid the $10,000 threshold that triggers banks to report a transaction to the Internal Revenue Service (IRS).

There was no evidence of guilt. Dehko was not charged with any crimes, and the IRS supported Dehko's claim. Nonetheless, Dehko is offered 20% of the amount taken from him.

Grabbing Hand of the Law

The Economist explains the plight of Dehko in its report The Grabbing Hand of the Law

In criminal cases, the government can confiscate assets only after a conviction. Under "civil forfeiture", however, it can grab first and ask questions later. Property can be seized merely on the suspicion that it has been involved in a crime. Citizens have no right to a swift hearing. For a small business, that can be fatal.

In many civil-forfeiture cases the agencies that seize the assets keep most of the proceeds, and can use them to pad their budgets or buy faster patrol cars. It is hard to know how common this is, but the Institute for Justice (a libertarian law firm that is representing the Dehkos) notes that the federal government shared $450m of seized assets with state and local authorities in 2012.

The grabbers do not always prevail. A motel owner in Massachusetts recently won back his motel after prosecutors tried to seize it because one guest in 13,000 had been arrested for drug offences. In October in California, prosecutors who were trying to seize a building because two of the tenants were marijuana dispensaries (which are legal under Californian law), gave up and let the landlord keep it.

But this is scant comfort for the Dehkos, who are struggling to hold on to the store they have run since 1978. "It's kind of scary that they can do this to you," says Ms Thomas. "In America, you're supposed to be innocent until proven guilty."

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

10 Corporations Control Nearly Everything You Buy, 6 Media Corporations Control Nearly Everything You Read or Watch

Posted: 02 Nov 2013 10:34 AM PDT

PolicyMic has a very interesting chart that shows how 10 Corporations Control Almost Everything You Buy.

click on chart for huge image

The chart was posted on Reddit as illusion of choice. I could not locate the original source.

PolicyMic explains ...

Ten mega corporations control the output of almost everything you buy; from household products to batteries.

These corporations create the chain of supplies that flow from one another. Each chain begins at one of the 10 super companies.

Here's just one example: Yum Brands owns KFC and Taco Bell. The company was a spin-off of Pepsi. All Yum Brands restaurants sell only Pepsi products because of a lifetime deal with the soda-maker.

$84 billion company Proctor & Gamble owns companies that produce everything from detergent to toothpaste. Unilever produces everything from Dove soap to Klondike bars.

It's not just the products you buy and consume, either. In recent decades, the very news and information that you get has bundled together: 90% of the media is now controlled by just six companies, down from 50 in 1983, according to a Frugal Dad infographic from last year.

It gets even more macro, too: 37 banks have merged to become just four — JPMorgan Chase, Bank of America, Wells Fargo and CitiGroup in a little over two decades, according to this Federal Reserve map.

The nation's 10 largest financial institutions hold 54% of our total financial assets; in 1990, they held 20%. As MotherJones reports, the number of banks has dropped from more than 12,500 to about 8,000.

Media Consolidation

Everything You Think, Read, or Say

I always try to find a link to the original source, but none of the links to a Frugal Dad article work.

Regardless anything you read, watch, or buy is in the hands of fewer and fewer companies. The same applies to banks.

This is another reason we need an independent news network. One is actually in the works, started by Jeremy Scahill, National Security Correspondent for The Nation magazine, and Glenn Greenwald who broke the NSA spy story.

For details, please see War Against Journalists; "We Hit the Jackpot"

Question of the Day

How long will it be, before everything to think read or say is in the pill you took today?

Link if video does not play: Zager And Evans

Addendum:

A couple of readers said the percentages mentioned above are way overstated. Indeed they are, especially if one takes the words "everything you buy" literally, then produces a grand total by dollar amount.

I took it form the start the infographic did not include cars, boats, houses, jewelry, etc, but rather common junk and foodstuff. I should have made a comment to that effect but didn't.

The same applies to the stats on media giants.

The important point is the idea behind the graphics, even if the percentage estimates stated are on the wild side.

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

Friday, November 1, 2013

Mish's Global Economic Trend Analysis

What's the Threat to Our Constitutional Rights?
Maastricht Treaty and the Euro: Failure for Over 20 Years
Daily Show on NSA Spying, on Obamcare, on the Know Nothing President in a "Bubble of Darkness"

What's the Threat to Our Constitutional Rights?

Posted: 01 Nov 2013 07:36 PM PDT

What do you think is the greatest enemy or threat to our constitutional rights?

I ask this question because a five page article in Foreign Policy Magazine says "The Greatest Enemy of Privacy Is Ambiguity"

The main thesis of the article is "If we can't define what it means to be left alone, don't be surprised when the government comes knocking."

Is that all there is to it? It took me only a few minutes to decide there are numerous threats to privacy, and numerous threats to constitutional rights in general.

What about ambivalence, coercion, and ignorance?

The public is force fed lies about why we need all these security measures. Most believe the lies. As a result of believing lies, most are ambivalent about the loss in constitutional rights.

Others are simply too stupid to understand what is happening in the first place.

Still others are ignorant of what history teaches us about freedoms given up, or taken away by the state.

Beware Charismatic Politicians

An American major after the destruction of the Vietnamese Village Ben Tre: "It became necessary to destroy the village in order to save it."

Vice President Joe Biden: "We Have to Go Spend Money to Keep From Going Bankrupt."

President George W. Bush: "I've abandoned free-market principles to save the free-market system."(For a discussion please see The Most Redeeming Feature of Capitalism is Failure)

Nancy Pelosi said "We have to pass the health care bill to see what's in it." (YouTube Video)

Larry Summers says "The central irony of financial crisis is that while it is caused by too much confidence, too much borrowing and lending and too much spending, it can only be resolved with more confidence, more borrowing and lending, and more spending." (Reuters)

Goering at the Nuremberg Trials

Please recall what Reichsmarschall Hermann Wilhelm Göring (in English his name is also spelled as Hermann Goering) Nazi founder of the Gestapo, Head of the Luftwaffe, said at the Nuremberg Trials.

Here is a clip of the interview in Goering's cell in prison, after the war.

Göring: Why, of course, the people don't want war. Why would some poor slob on a farm want to risk his life in a war when the best that he can get out of it is to come back to his farm in one piece? Naturally, the common people don't want war; neither in Russia nor in England nor in America, nor for that matter in Germany. That is understood. But, after all, it is the leaders of the country who determine the policy and it is always a simple matter to drag the people along, whether it is a democracy or a fascist dictatorship or a Parliament or a Communist dictatorship.

Gilbert: There is one difference. In a democracy, the people have some say in the matter through their elected representatives, and in the United States only Congress can declare wars.

Göring: Oh, that is all well and good, but, voice or no voice, the people can always be brought to the bidding of the leaders. That is easy. All you have to do is tell them they are being attacked and denounce the pacifists for lack of patriotism and exposing the country to danger. It works the same way in any country.

And now we are told by charismatic politicians that we are under attack. We must give up our constitutional rights to prevent further attacks.

With that in mind, what is the greatest threat to our rights?

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

Maastricht Treaty and the Euro: Failure for Over 20 Years

Posted: 01 Nov 2013 08:39 AM PDT

The Maastricht Treaty (formally, the Treaty on European Union or TEU) was signed on 7 February 1992 by the members of the European Community in Maastricht, Netherlands. It created the European Union and led to the creation of the single European currency, the euro.

Obligations

One of the obligations of the treaty for the members was to keep "sound fiscal policies, with debt limited to 60% of GDP and annual deficits no greater than 3% of GDP."

Over 20 years have passed. Let's see how those "obligations" panned out.

Via translation from Les Echos, please consider Severe Crisis of Adolescence to the Maastricht Treaty and the Euro.

Once in the monetary area, governments shall, subject to penalties, limit their deficit to 3% of GDP and debt to 60% of GDP. The treaty, however, is violated even before the euro was born because of the 11 states that agreed to adopt the treaty in 1999, six were above the required level of debt, including Germany, Austria, the Netherlands Netherlands and Italy.

Pursuing the logic of "every man for himself", a "no bail-out" clause prohibits the central bank and the U.S. to rescue a partner if it has no access to financial markets.

Original Sin

Titles on the following chart from Les Echos are in French, but with the above translation should be easy enough to understand.

Maastricht Disillusionment

Eurointelligence reports on Maastricht Disillusionment.

The world has changed since the Maastricht treaty ten years ago. Les Echos shows public debt then in 1992 and now, showing how drastic public debt has risen in all member countries. Today, only four member states have debt to GDP levels below the 60% limit. Looking back the three original fault lines of the Maastricht treaty have been revealed with the eurocrisis: the lack of solidarity, insufficient mutual surveillance and lack of economic convergence. These fault lines put into question the project as such.

A recent poll showed that today only 36% would still vote for the Maastricht treaty (compared to 51% in 1992) in a referendum, the anti-euro rhetoric has become acceptable in the establishment.

The bureaucrats are holding this mess together, by force. A vote now would not even pass.

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

Daily Show on NSA Spying, on Obamcare, on the Know Nothing President in a "Bubble of Darkness"

Posted: 01 Nov 2013 08:25 AM PDT

In an extremely funny spoof, Jon Stewart on the Daily Show rips Obama for not knowing what is happening in the administration regarding NSA spying, Obamacare, on "NIPF". Obama is the know nothing president in a "bubble of darkness".

Link if video does not play: Daily Show Rips the "Know Nothing" President

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