French Dirigisme At Work: Uber Drivers To Get 2-Years In Prison For Cutting Taxi Rates

Uber Technologies Inc.’s regulatory problems deepened Monday when France became the latest country to say it would ban on one of the car-hailing company’s main services while taxis took to the streets to protest the company’s ‘unfair competition.’
The French government said Uber’s service that uses drivers without professional licenses is ‘illegal.’ Officials said they would move quickly to apply a new transport law that comes into effect on January 1, stiffening penalties for operating such services.
‘Passengers still don’t know that it isn’t a legal car service, and drivers don’t understand the risks they’re running, such as fines or the seizure of their vehicles,’ said Pierre-Henry Brandet, a spokesman for the French interior ministry.
Organizing a system that puts paying clients in touch with drivers without professional licenses will be punishable by two years in prison and a 300,000 ($373,540) fine, according to the new law cited by officials.
Uber responded that it will continue to operate Uberpop until a judge decides that the new law applies to it. ‘It’s up to the courts to ban Uberpop,’ said Pierre-Dimitri Gore-Coty, Uber’s general manager for Western Europe. ‘If we’re prosecuted, then we’ll respond.’

This post was published at David Stockmans Contra Corner on December 15, 2014.

Fairytales From The Eccles Building: 15 Reasons Fed Policies Belong in Fantasyland

Don’t ever think for a minute that the central bankers know what they’re doing. They don’t. And that’s my own view, but I’ve heard that recently from a couple central bankers. I recently had spent some time with one member of the FOMC, the Federal Open Market Committee, and another member of the Monetary Policy Committee of the Bank of England, which is the equivalent of their FOMC, both policymakers, both central bankers.
And they said the same thing, ‘We don’t know what we’re doing. This is a massive experiment. We’ve never done this before. We try something. If it works, maybe we do a little more; if it doesn’t work, we pull it away, and we’ll try something else.’ And the evidence of this – again, I’ve heard this firsthand, and it’s my view – but the evidence for this is that their have been 15 separate fed policies in the last 5 years.
If you think about it, they started with forward guidance, which was, ‘We will keep rates low for an extended period of time.’ And then they said, ‘Oh, extended means all the way to 2013.’ And then they said, ‘All the way to 2014.’ And they were kind of getting around to, ‘All the way to 2015,’ and they said, ‘Wait a second. The dates don’t work. Let’s use some numeric concepts.’
So, they started nominal GDP targeting where they said, ‘We have this threshold of 2.5 percent inflation, but not based on actual inflation, but based on projected inflation, as projected by the Fed, which means it could be whatever they want it, and then 6.5 percent unemployment, but when we got down to 6.5, they said, ‘Oh, just kidding. We’re not gonna apply that.’

This post was published at David Stockmans Contra Corner on December 14, 2014.

David Stockman Talks Historical Dominoes – – Rise Of the Warfare State And Keynesian Central Banking

Click here to listen.
David Stockman interview on the Political Badger:
Today I had the pleasure of interviewing David Stockman. He is a former Congressman from Michigan, former Director of the Office of Management and Budget under President Ronald Reagan, and former partner at The Blackstone Group. Stockman is the author of The Triumph of Politics: Why the Reagan Revolution Failed (1986) and 2013′s The Great Deformation: The Corruption of Capitalism in America. On the show today we discussed how some of his work traces ‘historical dominoes.’ It was fascinating to learn how certain events in history led to others and so on, until we wind up with thus and so… For example: how did the creation of the Fed in 1913 lead to the 2008 crisis? What was the chain of events? Find out in today’s episode.

This post was published at David Stockmans Contra Corner on December 13, 2014.

Matt Taibbi On the Passage of the Spending Bill With Wall St Giveaway By the Senate

A brief word from Matt Taibbi on the passage of the 2015 Spending Bill by the Senate.
Basically, the American People were pushed aside by the Congress to favour JPM and Citigroup who lobbied heavily for public coverage for their gambling on derivatives.
We might expect this from the Republicans, although it is difficult to understand how they can rationalize supporting corporate welfare when they are so tough on entitlements for the poor. And as for the Democrats…

This post was published at Jesses Crossroads Cafe on 14 DECEMBER 2014.

Cronyism and ensuring American taxpayers bailout the finance industry during the next crash: Nostradamus like spending bill will ensure big banks never fail with your money.

Do you smell what is in the air? Pine trees? No. Something with a more pungent smell. There is a wonderful whiff of cronyism floating around Washington D. C. In the latest government kabuki theater there was some interesting items being passed. There were major protections given to banks should trillions of dollars in derivatives blow up during the next market correction. While the public is enjoying a few dollars off in gasoline prices so they can spend more money they don’t have during this holiday season, the latest government/banking spending bill was passed by slim margins but puts the taxpayer on the hook for trillions of dollars of risky derivative bets. Great timing given the energy markets are imploding so we know some hedge funds are taking it in the shorts and will likely come to D. C. hat in hand to cash in on those generous campaign donations. Central banks have done very little to help US households because incomes simply are not keeping up in the face of inflation. The latest bill is something to behold.
Minority Report of finance bills
What is so blatant about the latest bill is that it practically says that next time banks implode via derivative bets that taxpayers will be on the hook. The last time we were told that too big to fail banks needed all the help in the world because they would take the economy down with it. Of course the public did not want this but the spin media made it seem like the public was on board. They never were. Yet this was done during the actual correction. This time, acting like Nostradamus the financial industry is basically writing in provisions to protect itself for future transgressions. Like writing a note to your spouse that you apologize for all future mistakes and this piece of paper absolves you from all acts.
This should be no surprise given that the FIRE industry is backing both Republicans and Democrats equally:

This post was published at MyBudget360 on Dec. 13, 2014.

Democrats Who Voted For The Cromnibus Received Double The Money From Wall Street Than “No” Voters

While the government may have voted itself some $1.1 trillion to spend until the end of fiscal 2015, the biggest contention in the Cromnibus, or as it is also known, the Cronybus, vote which passed the House with the narrowest of margins on Thursday night, was the swaps push-out provision – drafted by Citigroup – and which, as we detailed yesterday, could put American taxpayers on the hook for up to $303 trillion in gross notional derivatives as a result of “siloing” swaps, and their associated risks, in FDIC-insured operating companies.
We stated that “we now know with certainty that to a clear majority in Congress – one consisting of republicans and democrats – the future viability of Wall Street is far more important than the well-being of their constituents.”
The only question is what was the (s)quid for this particular quo. Now thanks to an analysis by the WaPo, we have the answer.
First, it should come as no surprise that Republicans would be willing to vote for a bill that seeks to indemnify Wall Street from future failure. After all, Wall Street’s proximity to the GOP, and vice versa, is hardly a contentious issue. And yet, it was “only” 162 republicans who voted for the Cromnibus – some 67 voted against. Which means that whipping the 57 democrats who also voted for the Bill to get the crucial 218 passing votes was far more critical to assure passage of the swaps push out provision.
The map below shows the final geographic breakdown of the vote by party:

This post was published at Zero Hedge on 12/13/2014.

The Curse Of Keynesian Dogma: Japan’s Lemmings March Toward The Cliff Chanting ‘Abenomics’

According to Takahiro Mitani, trashing your currency, destroying your bond market and gutting the real wages of domestic citizens is a sure fire ticket to economic success. Yes, that’s what the man says,
‘I have no doubt that the economy is in a recovery trend if you look at the long run….’
After two years of hoopla and running the BOJ’s printing presses red hot, however, there is not a shred of evidence that Abenomics will lead to any such thing. In fact, after the recent markdown of Q3 GDP even deeper into negative territory, Japan’s real GDP is no higher now than it was the day Abenomics was launched in early 2013; and, in fact, is no higherthan it was on the eve of the global financial crisis way back in 2007.

In the meanwhile, the Yen has lost 40% of its value and teeters on the brink of an uncontrolled free fall. Currency depreciation, of course, is supposedly the heart of the primitive Keynesian cure on which Abenomics is predicated, but there is no evidence or honest economic logic to support the proposition that – – over any reasonable period of time – – a nation can become richer by making its people poorer.

This post was published at David Stockmans Contra Corner on December 12, 2014.

Google Strikes Back Against Spanish Newspaper Cartel

Google raised the stakes today in its bitter battle with Spain’s most powerful newspaper publishers lobby, the AEDE. Following the Spanish government’s announcement of its intention to introduce a so-called ‘Google Tax’ – a levy on websites’ sharing of links to other sites – the world’s most powerful tech company hit back with an audacious all-in.
The head of Google News, Richard Gingras, announced that on December 16th it would suspend the Spanish edition of its news service, a move that has sent jitters through the newsrooms of Spain’s largest newspaper publishers. The U. S. tech giant also said that it would remove all links to Spanish newspapers from all its Google News sites around the world.
Both moves have the potential to take a huge chunk out of Spanish newspapers’ national and international web traffic, sending members of the AEDE newspaper publishers lobby into a flurry of panic.
This morning they organized an emergency meeting, at which it was decided that a) Google was well within its rights to close its Spanish news service, and b) the Spanish government must nonetheless do something (anything, goddamnit!) to head off the threat – though the government’s intervention (at AEDE’s behest) caused the problem in the first place.
How is it possible that AEDE did not see this coming? Did it really think that it could shakedown the world’s most powerful quasi-monopoly without any repercussions? Did it not learn anything from the bitter painful experience of the more than 200 German newspapers who decided last month to abandon Google News en masse in protest against the US tech giant’s growing influence?

This post was published at Wolf Street on December 12, 2014.

Memo To Citigroup CEO Michael Corbat: Does Your Crony Capitalist Plunder Know No Shame?

The times are few and far between that I am in agreement with Senator Elizabeth Warren’s brand of Big Government liberalism. But I do applaud her willingness to stand up to the Wall Street lobby machine; her capacity to recognize and call-out the egregious gambling dens that have metastasized there; and her insistence that never again should the hard-pressed taxpayers of America be forced to bailout the crony capitalist plunder that is enabled by the Fed’s free money madness.
But now comes a naked Wall Street raid on the taxpayers that’s beyond the pale; and it would have sailed right through in the dead of night absent Elizabeth Warren’s intrepid opposition. Bravo, Senator!
I am referring to the Citigroup-drafted sneak attack on Washington’s tepid effort to curtail the more egregious gambling habits of some of the big banks. These incorrigible larcenists have been trying to gut the ‘push out’ provisions of Dodd-Frank for more than three years now, yet the latter boils down to a simple and urgently necessary injunction to the banks. Namely, you can’t roll the dice in the ‘derivatives’ gambling halls with taxpayer guaranteed deposits.
In light of the inherent dangers of what even Warren Buffet once called ‘financial weapons of mass destruction’, it is self-evident that no bank – not even the mighty Citigroup – – should be allowed to bring these incendiary devices within a country-mile of the taxpayer enabled FDIC guarantee program. So what Dodd-Frank does is to say go ahead and swing for the fences, but do it in a holding company subsidiary. If something subsequently goes boom in the night, its on your earnings and bonus – – not the taxpayers’ hard earned bucks.

This post was published at David Stockmans Contra Corner on December 11, 2014.

Presenting The $303 Trillion In Derivatives That US Taxpayers Are Now On The Hook For

Courtesy of the Cronybus(sic) last minute passage, government was provided a quid-pro-quo $1.1 trillion spending allowance with Wall Street’s blessing in exchange for assuring banks that taxpayers would be on the hook for yet another bailout, as a result of the swaps push-out provision, after incorporating explicit Citigroup language that allows financial institutions to trade certain financial derivatives from subsidiaries that are insured by the Federal Deposit Insurance Corp, explicitly putting taxpayers on the hook for losses caused by these contracts. Recall:
Five years after the Wall Street coup of 2008, it appears the U. S. House of Representatives is as bought and paid for as ever. We heard about the Citigroup crafted legislation currently being pushed through Congress back in May when Mother Jones reported on it. Fortunately, they included the following image in their article:

Unsurprisingly, the main backer of the bill is notorious Wall Street lackey Jim Himes (D-Conn.), a former Goldman Sachs employee who has discovered lobbyist payoffs can be just as lucrative as a career in financial services.

This post was published at Zero Hedge on 12/12/2014.

Myths And Legends Die Hard – That’s Why The Casino Never Stops Expecting More Free Money

This week has already seen a ‘shocking’ move from the PBOC that essentially disqualified almost half of repo collateral from usable status. That amounts to a massive tightening in a manner that is wholly unfamiliar to economists that remain fixated on simple variables like interest rates. The response to the move, especially with further economic data from China, is as if it never happened.
‘It [inflation at a 5-year low] will likely convince policymakers to ease their policy stance further and we continue to expect a RRR [bank reserve requirement ratio] cut in the near term, most likely this month,’ he told Reuters.
Last month, the country’s central bank unexpectedly cut interest ratesfor the first time in more than two years to spur activity.
The first paragraph is this very denial; while the second misreads what happened totally. Again, the PBOC is engaged in a stepped process of removing full monentarism from its presence and thus its toolkit. But they cannot simply go from A to B; instead they are taking a measured approach to figure out stress points (as best as they may be able).
After the February/March yuan occurrence, they went back and began to fortify the ‘good’ parts of the financial system in anticipation of the next step in ‘reform.’ In that context, this assumed ‘rate cut for the first time in two years’ makes perfect sense in that it was preparing and targeting the ‘good’ parts of the system in anticipation of what was about to follow it (the ignored tightening). With the next step in the ‘reform’ process currently taking place, that means there will be no broad PBOC ‘stimulus’ because that is exactly the expectation and reality they are trying very hard to erase.

This post was published at David Stockmans Contra Corner on December 10, 2014.

Duck And Cover – – -The Lull Is Breaking, The Storm Is Nigh

September 15, 2008 is the day that Lehman died and the moment that the world’s central banks led by the Fed went all-in. As it has turned out, that was an epochal leap into the most dangerous monetary deformation that the world has ever known.
It needn’t have been. What was really happening at this pregnant moment was that the remnants of honest capital markets were begging for a purge and liquidation of the speculative rot that had built up during the Greenspan era. But the phony depression scholar running the Fed, Ben Bernanke, would have none of it. So he falsely whooped-up a warning that Great Depression 2.0 was at hand – -sending Washington, Wall Street and the rest of the world into an all-out panic.
The next day’s AIG crisis quickly became ground zero – the place where the entire fraudulent narrative of systemic ‘contagion’ was confected. Yet that needn’t have been, either. In truth, AIG was not the bearer of a mysterious financial contagion that had purportedly arrived on a comet from deep space.
As subsequent history has now proven, AIG’s $800 billion globe spanning balance sheet at the time was perfectly solvent at the subsidiary level. Not a single life insurance contract, P&C cover or retirement annuity anywhere in the world was in jeopardy on the morning of September 16th.
The only thing gone awry was that the London-based CDS (credit default swap) operation of AIG’s holding company was monumentally illiquid. Joseph Cassano and the other latter-day geniuses who were running it had spent two decades picking up nickels (CDS premium) in front of a steamroller, while booking nearly the entirety of these winnings as profits – all to the greater good of their fabulous bonuses.

This post was published at David Stockmans Contra Corner on December 10, 2014.

Dream On Herr Hatzius: You Dwell In A Giant Collapsing Bubble

How ever-loving stupid do they think we really are?
Goldman’s plenipotentiary at the New York Fed, William Dudley or B-Dud, has been running around pointedly emitting a new word signal called ‘patient’ rather than ‘considerable time’ to describe the Fed’s interest raising plan. Then right on cue, his alter ego back at Goldman central, Herr Hatzius, yesterday dug out and circulated to the clientele an identical 10-year ago audible from when the Fed last changed its password in 2004:
In the 2003-2004 playbook, ‘considerable period’ gave way to ‘patient’ as a signal that the hikes were drawing closer, and it is interesting that the words ‘patient’ or ‘patience’ have shown up quite frequently in recent Fed speeches.
Finally, like clockwork at 6:30 PM last night, the Fed’s official out-sourced spokesman, Jon Hilsenramp, delivered the definitive message to the casino players through Rupert Murdoch’s drop box.
Federal Reserve officials are seriously considering an important shift in tone at their policy meeting next week: dropping an assurance that short-term interest rates will stay near zero for a ‘considerable time’…….
Mr.. Dudley – a part of Ms. Yellen’s inner circle of advisers – has suggested recently that the Fed could replace the assurance of low rates for a considerable time by stating more vaguely that it expects to be patient before moving……. The Fed took this approach the last time it was trying to engineer a liftoff from low rates, in 2004….(when it)dropped an assurance rates would stay low for a ‘considerable period’ and said it would be patient before raising rates.

This post was published at David Stockmans Contra Corner on December 9, 2014.

The CIA Tortured More Than ‘Some Folks’ – – And Now The MSM Invites The Perpetrators To Lie Again

/ December 9, 2014
It wasn’t that bad, we’ve been told, over and over again, for more than a decade. ‘We only waterboarded three people’ goes the line American officials have been force-feeding the world for years. ‘We tortured some folks,’ Barack Obama admitted recently, still downplaying war crimes committed in America’s name. But we now know those statements do not even begin to do justice to the horrific activities carried out by the CIA for years – atrocities that now have been exposed by the US Senate’s historic report on the CIA’s torture program, finally released on Tuesday after years of delay.
There are stories in the CIA torture report of ‘rectal rehydration as a means of behavior control’, threats to murder and ‘threats to sexually abuse the mother of a detainee’ – or cut a mother’s throat. There are details about detainees with broken bones forced to stand for days on end, detainees blindfolded, dragged down hallways while they were beaten. There were even torture sessions that ended in death. The list goes on and on, and on and on.
But beyond all the the depravity, perhaps the most shocking part of this exposed history is the action of US officials who knew these horrors were unfolding – and covered them up.
For years, as the 480-page executive summary of the report documents in meticulous detail, these officials lied to the Senate, the Justice Department, the White House, to the American public and to the world. They prevented CIA officers involved from being disciplined. They investigated and marginalized those who were investigating them. They happily leaked classified information to journalists – much of it false – without worry of consequence.

This post was published at David Stockmans Contra Corner By Trevor Timm theguardian.

The Crucifixion of Jonathan Gruber by Mike Turner

The following video was published by InvestmentResearchDynamics on Dec 9, 2014
Jonathan Gruber testified today before the House concerning the bait-and-switch tactic used to pass Obamacare despite the fact that the Administration knew the legislation was a flat out tax.
Gruber was a self-dealing architect of that legislation, the passage of which has netted his company millions in compensation. Gruber achieved notoriety by publicly boasting of his deception at the same time he berated Americans as stupid.
Today the chickens came home to roost for Jonathan Gruber, who got crucified during a 5-minute examination by Rep. Mike Turner.

Reprise: The Quiet Coup d’Etat in the Anglo-American Financial System

‘The fine thing about pacts with the devil is that when you sign them you are well aware of their conditions. Otherwise, why would you be recompensed with hell?’
Umberto Eco, The Name of the Rose
This is a reprise of an interview with MIT economist Simon Johnson which I first wrote about in February, 2009.
I think I ought to republish this as a reminder every few years, until reform has been achieved, or until the Internet goes dark.
Have we heeded Simon Johnson’s warning? Has he proven to be prescient? Is crony capitalism and the kleptocracy becoming bolder, more aggressive, ever more demanding?
“I think I’m signaling something a little bit shocking to Americans, and to myself, actually. Which is the situation we find ourselves in at this moment, this week, is very strongly reminiscent of the situations we’ve seen many times in other places.
But they’re places we don’t like to think of ourselves as being similar to. They’re emerging markets. It’s Russia or Indonesia or a Thailand type situation, or Korea. That’s not comfortable. America is different. America is special. America is rich. And, yet, we’ve somehow find ourselves in the grip of the same sort of crisis and the same sort of oligarchs…
But, exactly what you said, it’s a small group with a lot of power. A lot of wealth. They don’t necessarily – they’re not necessarily always the names, the household names that spring to mind, in this kind of context. But they are the people who could pull the strings. Who have the influence. Who call the shots…
…the signs that I see this week, the body language, the words, the op-eds, the testimony, the way they’re treated by certain Congressional committees, it makes me feel very worried.
I have this feeling in my stomach that I felt in other countries, much poorer countries, countries that were headed into really difficult economic situation. When there’s a small group of people who got you into a disaster, and who were still powerful. Disaster even made them more powerful. And you know you need to come in and break that power. And you can’t. You’re stuck….

This post was published at Jesses Crossroads Cafe on 09 DECEMBER 2014.

David Stockman: Yellen’s ‘Bathtub Economics’ Is Producing a Cold Bath for the US

Federal Reserve Chair Janet Yellen and her cronies are resorting to parlor tricks to prop up the U. S. economy, but the curtain will fall soon enough on their harmful efforts, according to David Stockman, White House budget chief during the Reagan administration.
One problem is that household debt is still off the charts even while Yellen et al are practicing ‘bathtub economics’ in the face of a glaring gap between income and jobs on the one hand, and aggregate demand for goods and services on the other, Stockman maintains.
‘This purported ‘output gap’ is conveniently self-serving. It has been interpreted to mean that the Fed has a plenary mission to fill up the nation’s economic bathtub by generating sufficient incremental aggregate demand to offset the shortfall.’
Writing on his Contra Corner blog, Stockman said Washington has empowered the Fed ‘to manipulate, massage, twist, bend and pump any financial variable that in its wisdom is deemed to influence the transmission of its monetary policy (i.e., ‘aggregate demand’ stimulus) into the real economy.’
However, the problem is that what drives the real main street economy, in his view, is nothing more than total spending by households and businesses. And spending can only be accomplished with income or debt.

This post was published at David Stockmans Contra Corner on December 5, 2014.


The worldwide awakening is picking up steam and having an effect on major parts of our overall culture, including the dictionary. No longer is it a mystery to individuals how the world is run: government and business team up to plunder wealth (taxation) and pay off friends. This system is called crony capitalism, and it is now in the Oxford dictionary.
According to, ‘crony capitalism’ is defined as an economic system of close, mutually advantageous relationships between business leaders and government officials. Reflecting the influence of popular culture, Oxford dictionary has included abbreviations like ‘IDC’ (I don’t care) and others.
New entries, other than crony capitalism, include ‘algorithmic trading’ (automated stock exchange trades made by computers …in order to manipulate global markets) ‘challenger bank’ (a small retail bank competing with big lenders); ‘misery index’ (a measure of economy adding together inflation and unemployment…both of which are fabricated numbers).

This post was published at Dollar Vigilante on December 4th, 2014.

Five Facts About Who Is Really Behind the Food Stamp Program

More than one in seven people.
That’s how many people are on food stamps in America these days. More than one in seven people.
In fact, the number of recipients of federal food assistance rose a whopping 171% between 2000 and 2011 alone, to an all-time record of more than 47 million Americans across the country now on the food stamp dole.
That means more U. S. citizens are receiving food stamp benefits now than in the entire history of the food stamp program ever.
One-sixth of the country is now receiving food stamps and the number just continues to climb.
Most argue this increase simply has to do with the terrible recession and resultant unemployment; but the food stamp program, now known as the Supplemental Nutrition Assistance Program or SNAP, is yet another crony capitalist scheme (surprise, surprise).
Many blame the people who need help instead of pointing the finger at a system designed to get as many people on the dole as possible. The government and the corporations it represents literally advertise to get as many people on food stamps as they can and then keep them there as a captured market for Wall St. banks, mega food corporations that churn out a bunch of crap food, and mega box and grocery stores that sell all that crap.
Here are a few more crony facts most people might not realize about our nation’s food stamp program.

This post was published at The Daily Sheeple on December 4th, 2014.