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Thursday, February 11, 2016



Yellen on negative rates: 'We wouldn't take those off the table'

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As recession fears mount in the U.S., Fed Chair Janet Yellen conceded there's a "chance" of a downturn ahead.
She also said the central bank is studying whether negative interest rates would help should conditions worsen.
"There is always some chance of recession in any year," she said. "But the evidence suggests that expansions don't die of old age."
Asked by Republican Sen. Bob Corker whether the monetary policy-making Federal Open Market Committee would consider going to negative interest rates, which would entail charging banks to store reserves at the Fed, Yellen left the door open. She repeated a statement she said Wednesday that the Fed had considered negative rates in 2010 but decided that wouldn't be the best course at that time.
"In light of the experience of European countries and others that have gone to negative rates, we're taking a look at them again, because we would want to be prepared in the event that we would need (to increase) accommodation. We haven't finished that evaluation. We need to consider the institutional context and whether they would work well here. It's not automatic," she said.
"We wouldn't take those off the table, but we have work to do to judge whether they would be workable here," she said.
Federal Reserve Board Chair Janet Yellen testifies on Capitol Hill in Washington, Thursday, Feb. 11, 2016.
Susan Walsh | AP
Federal Reserve Board Chair Janet Yellen testifies on Capitol Hill in Washington, Thursday, Feb. 11, 2016.
Markets participants are skeptical about the effectiveness of negative rates in the U.S. The Dow industrials shed as much as 230 points on top of earlier losses at one point during Yellen's testimony.
Bond guru Jeff Gundlach of DoubleLine Capital told CNBC he doens't "think it's going to happen," adding that "empirical evidence (is) piling up that negative rates are harmful, not helpful."
Banks currently have $2.27 trillion in reserves at the Fed, compared to the required $117.3 billion required. The Fed pays a 0.5 rate on those deposits.
Questions have arisen over the legality of negative interest on excess reserves. Sen. Pat Toomey (R-Pa.) cited a 2010 memo that has gotten some circulation lately that points out there are potential legal issues. Toomey cited one portion saying "it is not at all clear that the Federal Reserve act permits negative IOER rates."
Toomey also questioned whether a negative IOER rate would end up seeing savers pay a fee to keep money at banks. Yellen said she does not believe that is the case of the European countries where it has been tried.
"Before we take a step like that, we would have to think through all of the institutional details and how they would work..." she said.
However, she said "I'm not aware of any legal restrictions" on imposing negative rates.
Speaking Thursday in the second day of her semiannual testimony to Congress, the U.S. central bank chief also said conditions this year caught Fed officials off guard. Markets have been tumbling as oil prices plunge, with traders now pricing in the chance that the Fed's next move could be a rate cut rather than hike.

Saturday, January 9, 2016


China Goes Full Keynesian-tard: Demolishes Never-Used Just-Built Skyscraper

Tyler Durden's picture

"Growth" meet "mal-investment boom-bust" In a perfect example of the smoke-and-mirror-ness of China's credit-fueled expansion, a 27-storey high-rise building which was completed on November 15th 2015 was just demolished, "having been left unused for too long."
Directional blasting demolition of a high-rise building was completed successfully at 7 a.m. on November 15, 2015in Xi'an, in northwestern China's Shaanxi province.

The building was 118 meters high (27 floors) with a total construction area of over 37000 square meters.

Having been left unused for too long, the building could not be brought back into use so local government decided to demolish it.

It is reported to be the highest building that has ever been demolished in China.
*  *  *
The silver-lining - now workers can clean up the mess, dig a bigger hole... and fill that in - all in the name of Keynesian "growth."
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Friday, January 8, 2016

Thursday, January 7, 2016


Woman flees attempted gang rape on Paris train
An RER train in Paris. Photo: Paulo Valdivieso/Flickr

Woman flees attempted gang rape on Paris train

Published: 07 Jan 2016 10:06 GMT+01:00
The 28-year-old woman was initially travelling in an empty carriage on an RER train in Paris on the night of December 9th when around ten men had got on the train at Montparnasse station.
The woman started to feel uncomfortable and decided to sit elsewhere, reported Le Parisien newspaper
Three of the men, reported to be Afghan refugees, followed her and soon began to assault her. One of them strangled her with her scarf and another held a knife to her face while the three men began to undress her, reported the paper. 
By chance at the next station another passenger boarded the train and intervened to protect the victim. He managed to scare off the attackers.
The woman rushed to a nearby restaurant where she took refuge. She was left severely traumatized a source close to the case told Le Parisien.   
Police were able to catch two of the alleged perpetrators thanks to the help of CCTV footage at the Montparnasse station. They were both Afghani refugees, aged 19 and 45 years old, men who the victim was able to identify, Le Parisien reported.
Both police and the media came under fire from the public, who accused them of covering up the ethnic backgrounds of the alleged attackers and sweeping the problem under the carpet.
Under pressure to give more details on the attacks, German police later confirmed that men of ‘Arab background’ were likely responsible for the dozens of sexual assaults on women.
Politicians have since urged the public not to stigmatize the hundreds of thousands of refugees who have entered Germany in recent months.
In France there have only been isolated reports of sexually assaults allegedly carried by migrants, although some far right blogs have suggested the problem is far more widespread and under reported. 
Photo: nbellemon/Flickr
The two men were charged with attempted rape and have since been remanded in custody.
Both men have reportedly denied the crime.
They said they were forced to flee Afghanistan after being pressured to carry out crimes against the western world, reported the paper. 
Their accomplice remains on the run.
Sexual harassment on public transport in France has proven to be an all-too-common problem of late.
In November, the government launched an awareness campaign to encourage victims and witnesses to speak out with confidence about sexual harassment on public transport. 
The move came shortly after France's High Council on equality (HCEfh) raised the alarm about the issue, when its survey of 600 women in Seine-Saint-Denis and Essonne, two areas in the outer suburbs of Paris, revealed shocking responses.
It found that 100 percent of the women said they had experienced at least some form of gender-based sexual harassment in their life while riding the train.
France fights sexual harassment on transport
Photo: Alexandre Moreau/Flickr