Fed Injects Record $100 Billion Cash Into Foreign Banks Operating In The US In Past Week

ImageSource: Zero Hedge

 Those who have been following our exclusive series of the Fed’s direct bailout of European banks (here, here, here and here), and, indirectly of Europe, will not be surprised at all to learn that in the week ended February 27, or the week in which Europe went into a however brief tailspin following the shocking defeat of Bersani in the Italian elections, and an even more shocking victory by Berlusconi and Grillo, leading to a political vacuum and a hung parliament, the Fed injected a record $99 billion of excess reserves into foreign banks. As the most recent H.8 statement makes very clear, soared from $836 billion to a near-record $936 billion, or a $99.3 billion reserve “reallocation” in the form of cash – very, very fungible cash – into foreign (read European) banks in one week.

ImageFurthermore, as we first showed, virtually all the “reserves” created by the Fed end up allocated as cash at commercial banks operating in the US: both domestically-chartered (small and large), but more importantly, foreign. And of the $1.884 trillion in very fungible cash parked in various domestic and international US banks, just half of it, or $949 billion is actually allocated to US banks. The other half, or $936 billion, is parked within, again, very fungible cash accounts of foreign (read European) banks operating in the US. This is shown in the chart below (green area is cash of foreign banks), and what is also shown is the total change in the Fed’s excess reserves, which proves, once more, that the Fed continues to fund European banks with hundreds of billions in cash on a week by week basis. And what is perhaps most important, is that of the $250 billion in new reserves created under QEternity, all of it has gone to foreign (read European) banks.

ImageIt may anger American to learn that by the time the Fed is done with QEternity (if ever), all of the newly created cash will have gone to mostly European banks. Because with every passing week, whatever new reserves are created by the Fed in exchange for monetizing the US deficit, end up as cash solely at European banks: a sad reality we have seen non-stop since the advent of QE2 when US bank cash balances remained relatively flat in the ~$800 billion range, and every incremental dollar went straight to Europe.

As a reminder, we don’t know how, via assorted shadow banking and other repo pathways, these banks manage to use said cash in other fungible activities. Recall that as we said, “So whether European banks will continue buying the EURUSD, or redirect their Fed-cash into purchasing the ES outright, or invest in other even riskier assets, remains unknown.” It is also unknown is the Fed’s reserves, reappearing as cash, and then siphoned over to European bank HoldCo via payables, is then used by, say, Italian and Spanish banks to purchase BTPs and Bonos, and give the impression that all is well. Because unlike before, keeping the EURUSD high is not as critical any more. But what is critical is to give the impression that Italian and Spanish sovereign risk is contained. And after all, let’s not forget that as of January, Italian bank holdings of Italy state bonds just hit a record of EUR200 billion.

Is it possible that the Fed, in all its generosity, transferred over several hundred billion over to these same Italian banks, courtesy of the cover provided by QE, so that the same Italian banks may monetize Italian bank bonds? And the same for Spain. Any wonder then that we got news of how flyingly great Spanish and Italian bond auction were in the past week?

After all, in Europe Germany has a heart attack whenever anyone perceives the ECB as monetizing, or even greenlighting the monetization of local sovereign bonds. But Germany has never said what it thinks about the Fed, indirectly, doing the same, using Italian and Spanish banks as conduits.

Finally, while we don’t know what the cash is being used for, we know that sooner or later, sometime around December 2013, when European, pardon, foreign bank holdings of US reserves, i.e., USD cash, hits well over $1.5 trillion, and when the Interest on Excess Reserves starts going up and the Fed is directly providing tens of billions in interest payment to European banks, some Americans may be angry to quite angry with that development.

But for now, everyone is blissfully unaware and even if they were, nobody cares. Why just look at the Dow Jones Industrial Average: how can one possibly allege that all is not well with the world…


Note: Click To Enlarge Photos Above


Model Jen Macloud Slams Ann Coulter For Inappropriate Remarks Towards Libertarians On Stossel


Neo-Conservative war hawk Ann Coulter is under fire again after upcoming model/speaker Jen Macloud decided to take aim on her remarks that shocked over 1,000+ libertarian students on John Stossel’s show last month on Fox Business.

Jen Macloud:

“The mind of a bigot is like the pupil of the eye; the more light you pour upon it, the more it will contract.”- Oliver Wendell Holmes, Sr. What can I say about Ann Coulter that has not already been said by many a Libertarian? When I see this interview between her and John Stossel I recognize that she is an educated, strong, and consistent woman. I also see her ignorance, her contemptuous attitude toward Libertarians, and her stubbornness is like that of a toddler. Her stance on things like gay marriage and pot legalization are generic and narrow minded and not at all surprising. I don’t fault her for standing by her convictions on these issues even if they are different than mine. Her tactic of condescension and mocking, however, reminds me of what a poor debater (or a disinformation list) does when losing an argument. For example: she resorts to sidetracking opponents with name calling and ridicule and tries to emotionalize, antagonize, and goad opponents into an irrational response that would make their argument seem less credible to others. “First of all, for alleged individualists, you’re very mob-like,” Coulter snarked. “Libertarians and pot,” Coulter said with a dismissive laugh. “This is why people think Libertarians are p*ssies.” And of course she is full of fallacies. The Straw Man fallacy is committed when a person simply ignores a person’s actual position and substitutes a distorted, exaggerated or misrepresented version of that position. When discussing the legalization of all drugs and prostitution based on the belief that what one does and puts into their body is not the business of the government or anyone else as long as no one else or their liberties are harmed, Coulter immediately complains about Libertarians being suck ups to Liberals on the issue of pot and completely defers from discussing the other aspects of the question. She recognizes that it’s much easier to shoot down the idea of pot legalization than it is to debate the issue of having the freedom to own your body. She does make a sound point about her having to essentially pay for the negative consequences of said drug use since we are in a welfare society; but she fails to realize that being a welfare society isn’t set in stone and all great change must first come from a great idea. Like my grandfather once said to me about being homosexual: “If I understood it, I’d be it.” Ann can never understand why Libertarians are the way they are, therefore she can never share their mindset. I find it to be a waste of time to try to convince someone with this level of hardheadedness to turn to the dark side; even if we do have cookies. And they are delicious.


Those who are unaware of what actually happened during that heated debates here’s a breakdown published by djgabrielpresents on Feb 21, 2013.

Once a year, Stossel tapes a show at the International Students for Liberty Conference in Washington, D.C. He typically brings on friendly libertarian guests, like presidential candidate Gary Johnson, Reason magazine star Nick Gillespie, Cato Institute VP David Boaz, or up-and-coming Rep. Justin Amash (R-MI).

But just to show that the 1,400+ students are not beholden to either major political party, a liberal and a conservative will also join the show and mix things up. This year, Coulter was that conservative. And boy, did things get heated.

The initial conversation between Stossel and Coulter began as a light squabble over whether the War in Iraq was truly justified. The war was certainly worth the cost because Saddam Hussein was “definitely looking for uranium from Niger,” she said. Her remarks were met with tepid boos and confusion, but the room was mostly pleasant at that point.

But when the subject turned the the legalizing drugs, things quickly became tense. “Libertarians and pot,” Coulter said with a dismissive laugh. “This is why people think libertarians are pussies,” she said. “We’re living in a country that is 70-percent socialist, the government takes 60 percent of your money. They are taking care of your health care, of your pensions. They’re telling you who you can hire, what the regulations will be. And you want to suck up to your little liberal friends and say, ‘Oh, but we want to legalize pot.’ You know, if you’re a little more manly you would tell them what your position on employment discrimination is. How about that? But it’s always ‘We want to legalize pot.'”
Stossel then asked: “Why can’t gays get married?”

“Well, they can,” Coulter replied. “They have to marry a member of the opposite sex.” The room filled with boos.

“This is another one where you’re just sucking up to liberals when there are big fights,” Coulter explained.

“No, we believe the individual should be left alone,” Stossel shot back.

“Marriage is the most important institution to civilize young people. I make divorce a lot more difficult,” she said. “Liberals want to destroy the family,” she continued, eliciting jeers and mocking laughter from the students.

“How is it any of your business what I choose to put in my body if I’m not affecting anyone else?” one student asked during the Q&A, prompting the students to give a standing ovation.

“First of all, for alleged individualists, you’re very mob-like,” Coulter snarked. “Second of all, it is my business because we are living in a welfare state … Right now, I have to pay for, it turns out, coming down the pike, your health care. I have to pay for your unemployment when you can’t hold a job. I have to pay for your food, for your housing. Yeah, it’s my business!”

Stossel and the student eventually got Coulter to concede that if the welfare state were rolled back, she’d maybe consider legalizing marijuana.

Later on, a recently-divorced student asked Coulter why she wants to “make divorce more difficult” when it is already an incredibly cumbersome and taxing process. The conservative author’s response provoked more booing: “When you buy a refrigerator, to break a contract to return your refrigerator, is more difficult in most states than to break a marriage contract.”

One student, off-camera, shouted: “They’re human beings!” The crowd applauded.

After the segment wrapped, Coulter smiled and the crowd gave respectful applause. Seeing as how Coulter is a well-known good sport about engaging hostile environments, it’s no surprise she was game for the whole experience.

But on her “libertarians are pussies” point, since neither Stossel nor the students had the opportunity to fully respond, let me give it a brief whack: The economy may be more important than the the war on drugs or gay rights, but that’s a subjective valuation. Either way, libertarians care so much about those social issues not only because the former is rife with injustice, wastefulness, and abuse, but because they serve as a litmus test of sorts, separating those who are serious about limited government from those who pick and choose when they want to be skeptical of government power.

If you truly care about personal responsibility, limited government, and freedom of choice, then you should oppose government involvement in your personal life as much as in your economic life.

Those who agree with Jen Macloud  please ‘LIKE  new Facebook fan page here: https://www.facebook.com/pages/Jen-Macloud/464487490291243?fref=ts

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Paul Krugman Declares Personal Bankruptcy


Daily Currant

Economist and columnist Paul Krugman declared personal bankruptcy today following a failed attempt to spend his way out of debt.

In a Chapter 13 filing to the United States Bankruptcy Court in the Southern District of New York, lawyers for Krugman listed $7,346,000 in debts versus $33,000 in assets.

The majority of his debts are related to mortgage financing on a $8.7 million apartment in lower Manhattan, but the list also includes $621,537 in credit card debt and $33,642 in store financing at famed jeweler Tiffanys and Co.

The filing says that Krugman got into credit card trouble in 2004 after racking up $84,000 in a single month on his American Express black card in pursuit of rare Portuguese wines and 19th century English cloth

Rather than tighten his belt and pay the sums back, the pseudo-Keynesian economist decided to “stimulate” his way to a personal recovery by investing in expenses he hoped would one day boost his income.
Cockroaches and Creditors

Between 2004 and 2007 Krugman splurged on expensive cars, clothes, and travel in hopes that the new lifestyle would convince his bosses at the New York Times to give him a giant raise.

“They say always dress for the job you want,” Krugman explains. “So I thought maybe if I showed up in $70,000 Alexander Amosu suits they would give me ownership of part of the company. If I had only been granted a sliver of the New York Times Co., I could have paid everything back.”

Even after he realized an equity stake was not going to happen, Krugman continued to spend wildly hoping his bling and media appearances would increase demand for his personal brand and lift his book sales.

His biggest mistake came in 2007, when at the height of the financial bubble he decided to invest in high-end real estate in New York City. His multi-million dollar apartment lost 40 percent of its value just months after its purchase, and has been underwater ever since.

“You’d think a Nobel Prize winning economist could recognize a housing bubble,” says Herman Minsky, a retired television executive who purchased Krugman’s home at a huge discount. “But hey, I’m not complaining.”
Conscience of a Fraud

Krugman, a renowned trade economist, joined the New York Times as a columnist in 2000. Since the start of the financial crisis he as used the platform to argue vociferously for what he terms Keynesian deficit spending.

However, Keynes did not advocate using debt financing to stimulate the economy. Rather, he argued that government should save in the good times and spend in the bad.

Through his lawyer, Bertil Ohlin, Krugman explains that despite his travails with spending and debt in his personal finances, he stands by his pseudo-Keynesian policies.

“I still defend my analysis that on the macroeconomic level sovereign debt crises can be fixed by increasing government borrowing to lift aggregate demand. I admit, however, that on the microeconomic level this strategy has failed spectacularly.”

Read More: http://dailycurrant.com/2013/03/06/paul-krugman-declares-personal-bankruptcy/


While You Were Watching Rand Paul The House Secretly Approved A $982 Billion Dollar Spending Bill


by Bill Chappell
March 06, 2013 5:43 PM

The House has approved a bill to fund the federal government through the end of September. The $982 billion continuing resolution introduced by Rep. Harold Rogers (R-KY), who heads the Appropriations Committee, would avoid a potential government shutdown on March 27.

The measure provides spending through the end of the current fiscal year, and while it does not undo the “sequestration” cuts, the resolution does allow the Pentagon more room to manage its share of the reductions. It was approved by a vote of 267-151, with 53 Democrats joining Republicans to support the legislation.

As NPR’s Tamara Keith reports for our Newscast unit, the measure now heads to the Senate:

“Democrats and the White House have made it clear they don’t like this bill because it locks in across-the-board spending cuts and only gives additional budget flexibility to the Defense and Veterans Affairs departments. Senate leaders say they plan to make changes to allow other agencies more flexibility as well. But they aren’t planning to undo the sequester cuts, which means a fight that would threaten a government shutdown is unlikely.”

Original Article:http://www.npr.org/blogs/thetwo-way/2013/03/06/173655649/house-gives-ok-to-982-short-term-spending-bill