News Items – Page 164 – Liberty Blitzkrieg

Commuters Herded Like Cattle as China Escalates its Own “War on Terror”

May 28, 2014 by Michael Krieger

I have often said that while 9/11 was a horrible event, our collective response to it has been the real tragedy (read my How I Remember September 11, 2001 post). A terrible event is no excuse to become such scared children that we would relinquish the basic freedoms our ancestors fought so hard to secure for us.

The only people who really benefit from an expansion of the surveillance state and a loss of liberties are the rich and powerful. With China’s economy in free fall and increased violence occurring, it appears the leadership there is taking a page out of our post 9/11 playbook. This is what the commute looks like at train stations in Beijing:

This is what cattle in pens look like:

Actually, the cattle have more space. Seriously though, this is all security theatre. As I have mentioned on prior occasions, I have never gone through one of those naked body scanners. Instead, I opt out for the TSA “freedom grope.” Why? Because I know it’s total bullshit and I’m not going along with it.

I fly from Denver to New York City quite a bit and you know what I’ve noticed. While every machine in Denver is now a naked body scanner, all of the machines from the security checkpoint I use in New York are regular metal detectors. I find this bizarre. If the number one target for terrorism can get away with metal detectors, why can’t everywhere else? Because people like former head of the Department of Homeland Security (DHS), Michael Chertoff, need to get paid.

Junk Borrowers Are Increasingly “Adjusting Earnings” to More Easily Sell Debt

May 28, 2014 by Michael Krieger

Last week, I wrote a post highlighting increased leverage in private equity deals and the fact that the Federal Reserve was warning of such practices in the piece: Leverage in PE Deals Soars Despite Fed Warnings. In it, I highlighted how 40% of PE deals in 2014 have used leverage ratio above 6x EBITDA, despite Federal Reserve and the Office of the Comptroller of the Currency guidance last year to not breach that ratio.

I noted how ridiculous it is for the institution most responsible for all of the current market insanity to try to come out and talk down leverage ratios. The primary reason all of this craziness is occurring is because the Federal Reserve has intentionally lowered interest rates to such an extent that investors feel they have no choice but to chase the riskiest assets just to catch a few additional basis points. Now we see that junk borrowers are increasingly using tactics such as “add-backs” in order to make earnings look better. This allows low quality borrowers to borrow, while at the same time providing an excuse for investors to buy garbage.

Think I’m exaggerating the problem? According to Bloomberg, 66% of junk-rated bonds sold this year scored by Moody’s Investors Service included at least one adjustment to earnings the credit rater considered “aggressive.” In 2011, the number was just 40%.

Everybody wins right? Wrong. Society will pay a very heavy price for this ultimately.

Video of the Day – The Religion of Consumerism

May 27, 2014 by Michael Krieger

The notion of consumerism as the religion of the United States is nothing new. That said, Warren Pollock did an excellent job explaining just how corrosive this mindset can be to a society. I was particularly taken by the idea that since the vast majority of people define themselves almost entirely by their level of … Read more

License Plate Readers Stir Controversy in California as the NYPD Prepares to Use Drones

May 27, 2014May 27, 2014 by Michael Krieger

One of the many civil liberties related themes I have focused on over the past several years has to do with how emerging technologies can pose a threat, first to our basic 4th Amendment rights, and then ultimately to freedom itself. Two of the most high profile technologies in this regard, and which have extremely high potential for abuse, are license plate readers and drones.

I’m no luddite saying that these technologies should be banned. In fact, I can certainly see reasonable uses for both within a broad range of society. However, I am saying that unless we have an engaged citizenry holding public officials’ feet to the fire, these technologies will certainly be abused and before you know it you’ll find yourself in Room 101 staring down at a ravenous rat army wishing you had said something earlier.

The biggest challenge we face is that the general public has become so dumbed down, distracted and confused when it comes to the most existential issues we face as a society. Rather than focusing on key issues that really matter, the mainstream media largely blows up and obsesses over immaterial, yet emotionally charged events that don’t mean anything in the larger scheme of things.

License plate readers and drones are two great examples of this dilemma. Both have been advancing into our lives in an increasing manner and most people don’t have the slightest clue. How can people have informed opinions on such keys issues when they have no idea what is happening around them.

Let’s start with the license plate scanners. Before reading further, I suggest going back and checking out my post from earlier this year: How the Repo Industry is Collecting Data on Virtually Every Car in America.

Now that you are sufficiently disturbed about the extent to which your privacy is being violated day in and day out, let’s focus on some good news. The fact that there is now a bill in the California state legislature that will attempt to put some boundaries around this technology.

We learn from CBS News that:

Like this post?
Donate bitcoins: 35DBUbbAQHTqbDaAc5mAaN6BqwA2AxuE7G

Follow me on Twitter.

Gotta Keep Dancing – Trading of Penny Stocks Soars to Record on OTC Markets

May 23, 2014 by Michael Krieger

It seems that no market tops until the bag has been fully passed to retail muppets, and we appear to be in the process of that happening right now. I have detailed this with regard to credit markets on several occasions, most recently with how Blackstone and other private equity firms are stuffing public pensions with their products using secretive and highly unfavorable terms. In case you missed it, I suggest reading my post: Leaked Documents Show How Blackstone Fleeces Taxpayers via Public Pension Funds.

Moving along to today’s story, we find that the retail investor is getting back into the stock market and is seemingly focused on the riskiest types of shares; unlisted penny stocks. They aren’t just dipping their toes in either, the pace exceeds that of the tech boom of the late 1990’s and has just hit the highest amount on record.

We learn from the Wall Street Journal that:

Investors are piling into the shares of small, risky companies at the fastest clip on record, in search of investments that promise a chance of outsize returns.

The investors are buying up so-called penny stocks—shares of mostly tiny companies that aren’t listed on major U.S. exchanges—at a pace that far eclipses the tech boom of the late 1990s. Those include firms that focus on areas from medical marijuana and biotechnology to fuel-cell development and precious-metals mining—industries that are perceived by some investors as carrying strong growth potential.

Average monthly trading volume at OTC Markets Group Inc., which handles trading in shares that aren’t listed on the New York Stock Exchange or Nasdaq Stock Market, has risen 40% this year in dollar terms from a year ago, to a record $23.5 billion.

Like this post?
Donate bitcoins: 35DBUbbAQHTqbDaAc5mAaN6BqwA2AxuE7G

Follow me on Twitter.

Diamond Miners in Zimbabwe Told to Sell Gems to Central Bank as Collateralize for Chinese Loans

May 23, 2014 by Michael Krieger

The exploitation of Africa by bigger, stronger and wealthier nations is nothing new. In contemporary times, it appears China has been making a particularly aggressive move considering its huge economy, enormous population and insufficient natural resources. While this topic has not been a focal point on this site, I have covered it in past. Most specifically in a Guest Post from late 2012 titled: Africa in the Crosshairs.

In the article below from Bloomberg, we learn that diamond miners in the country have been told they must sell their gems through the Central Bank to serve as collateral for government loans. The country’s deputy mines had said in earlier in may that “Zimbabwe may use mineral exports, including gold and diamonds, to underwrite loans from China.”

From Bloomberg:

Diamond miners in Zimbabwe have been told to sell their gems through the central bank, which will use the stones to secure a government loan, according to a letter written to them by the country’s mines secretary.

In the letter to miners, the secretary Francis Gudyanga, instructs that producers “prepare parcels of all your currently produced diamonds which must be sorted and evaluated with the involvement of the Minerals Marketing Corp. of Zimbabwe,” a state company, and payment will be made soon after.

The stones will be kept by the central bank and used to “securitize a government loan,” Gudyanga said in the letter. The letter, obtained by Bloomberg, was sent to miners April 28 and came into effect April 30.

Like this post?
Donate bitcoins: 35DBUbbAQHTqbDaAc5mAaN6BqwA2AxuE7G

Follow me on Twitter.

Introducing “Subprime Business Lending” – Loans with 125% Interest Rates Are Being Securitized and Sold to Investors

May 22, 2014 by Michael Krieger

Salespeople said they were told to refer to “short-term capital” instead of loans and “money factors” instead of interest rates. Eight of them said they talked business owners into applying by saying they’d offer a good rate after reviewing bank statements.

World Business Lenders charged most people 125 percent annualized interest rates on six-month loans regardless of their situation, five former employees said. The borrowers often put up cars, houses or even livestock worth at least twice as much as the loan. About one in five were going bust as of last year, two people with knowledge of the matter said. One said that 9 percent of the loans made this year have already defaulted.

“The sweet spot is someone who can limp along well enough for six months but probably isn’t going to be around much longer,” Opportunity Finance Network’s Pinsky said. “They’re in the business of helping these businesses fail.”

– From yesterday’s Bloomberg article, Wall Street Finds New Subprime With 125% Business Loans

The following story represents one of the most mind-bogglingly disturbing reflections of what is really happening beneath the lipstick pigged representation of the U.S. economy the mainstream media regularly portrays. At the center of the story is a company called World Business Lenders LLC, which is staffed with veterans of Jordan Belfort’s (the Wolf of Wall Street) boiler room firm as well other former brokers banned from the securities industry. It sports a business model that lends money at 125% annualized interest rates to small businesses.

Oh, but the story gets better, a lot better. Large Wall Street banks like Goldman Sachs and corporations such as Google are also naturally getting into the market. For example:

OnDeck Capital Inc., a lender with funding from Google’s venture-capital arm and PayPal Inc. co-founder Peter Thiel, sold $175 million of notes backed by business debt last month in a deal put together by Deutsche Bank. Interest rates on the loans ranged from 29 percent to 134 percent.

“Don’t be evil,” right Google? Since there’s nothing evil about 134% interest rates, particularly when you don’t pay taxes.

Of course, predatory lending by bailed out financial institutions is nothing new in post-financial crisis America. I covered this last year in my post: TBTF Banks Enter Payday Loan Business with 500% Interest Rates.

Naturally, Wall Street is also starting to package the loans into securities that can be sold to investors. You can’t make this stuff up.

From Bloomberg:

From an office near New York’s Times Square, people trained by a veteran of Jordan Belfort’s boiler room call truckers, contractors and florists across the country pitching loans with annual interest rates as high as 125 percent, according to more than two dozen former employees and clients. When borrowers can’t pay, Naidus’s World Business Lenders LLC seizes their vehicles and assets, sometimes sending them into bankruptcy.

Naidus isn’t the only one turning to subprime business lending. Mortgage brokers and former stock salesmen looking for new ways to make fast profits are pushing the loans, which aren’t covered by federal consumer safeguards. Goldman Sachs Group Inc. and Google Inc. are among those financing his competitors, which charge similar rates.

“This is the new predatory lending,” said Mark Pinsky, president of Opportunity Finance Network, a group of lenders that help the poor. “And the predators, just as they did in the mortgage market, have gotten increasingly aggressive.”

Subprime business lending — the industry prefers to be called “alternative” — has swelled to more than $3 billion a year, estimates Marc Glazer, who has researched his competitors as head of Business Financial Services Inc., a lender in Coral Springs, Florida. That’s twice the volume of small loans guaranteed by the Small Business Administration.

Wall Street banks are helping the industry expand by lending originators money. They’re starting to package the loans into securities that can be sold to investors, just as they did for subprime-mortgage lenders.

Of course they are.

Like this post?
Donate bitcoins: 35DBUbbAQHTqbDaAc5mAaN6BqwA2AxuE7G

Follow me on Twitter.

Congress Guts Anti-NSA Spying Bill Beyond Recognition; Original Cosponsor Justin Amash Votes No

May 22, 2014 by Michael Krieger

It’s shameful that the president of the United States, the chairman of the House Permanent Select Committee on Intelligence, and the leaders of the country’s surveillance agencies refuse to accept consensus reforms that will keep our country safe while upholding the Constitution. And it mocks our system of government that they worked to gut key provisions of the Freedom Act behind closed doors.

– Rep. Justin Amash of Michigan, original cosponsor of the USA Freedom Act

In what will come as no surprise to any of you, there are very few members of Congress I have even the slightest degree of respect for. However, Justin Amash is one of them.

Rep. Amash is 34 years old and was first elected to Congress in 2010. He has been on my radar screen for several years now as one of the few elected representatives who act more like statesmen than politicians. He has been on the right side of many civil liberties related issues, including his opposition to the NDAA’s provision that allows for the indefinite detention of American citizens without a trial. More recently, last summer he authored an anti-NSA amendment known as the “Amash Amendment,” which was defeated by establishment authoritarians in both political parties. I covered that story in my post: NSA Holds “Top Secret” Meeting to Stop Powerful Anti-Spying Amendment.

Being the fighter that he is, Amash regrouped and came back with an anti-NSA spying bill with some teeth to it: The USA Freedom Act. This bill concerned the establishment to such a degree that Senator Feinstein launched her own competing bill, which believe it or not, intended to codify the NSA’s unconstitutional practices into law.

In the end, what the status quo did was water down the once robust USA Freedom Act into oblivion. Don’t take my word for it, Justin Amash wrote the following on his Facebook page:

Today, I will vote no on ‪#‎HR3361‬, the ‪#‎USAFREEDOMAct‬.

I am an original cosponsor of the Freedom Act, and I was involved in its drafting. At its best, the Freedom Act would have reined in the government’s unconstitutional domestic spying programs, ended the indiscriminate collection of Americans’ private records, and made the secret FISA court function more like a real court—with real arguments and real adversaries.

I was and am proud of the work our group, led by Rep. Jim Sensenbrenner, did to promote this legislation, as originally drafted.

However, the revised bill that makes its way to the House floor this morning doesn’t look much like the Freedom Act.

This morning’s bill maintains and codifies a large-scale, unconstitutional domestic spying program. It claims to end “bulk collection” of Americans’ data only in a very technical sense: The bill prohibits the government from, for example, ordering a telephone company to turn over all its call records every day.

But the bill was so weakened in behind-the-scenes negotiations over the last week that the government still can order—without probable cause—a telephone company to turn over all call records for “area code 616” or for “phone calls made east of the Mississippi.” The bill green-lights the government’s massive data collection activities that sweep up Americans’ records in violation of the Fourth Amendment.

Like this post?
Donate bitcoins: 35DBUbbAQHTqbDaAc5mAaN6BqwA2AxuE7G

Follow me on Twitter.

Leverage in PE Deals Soars Despite Fed Warnings; Amidst Insatiable Demand for Risky Fannie Mae Debt

May 21, 2014May 21, 2014 by Michael Krieger

Barely a day goes by anymore when I’m not confronted with a slew of articles flashing warning signs about the latest Federal Reserve fueled credit bubble. Just yesterday, I highlighted the investor feeding frenzy happening in junk bonds, driving yield spreads to the lowest levels since the prior peak year of credit exuberance in 2007 in my post: Credit Mania Update – The Chase for CCC-Rated Bonds.

Today, I am going to highlight two articles on very different aspects of the credit market, but both are illustrative of the investor buying panic happening in debt markets. All of this is terrifying, and it appears to represent the final stages of another crackup boom. One that is likely to implode sometime in 2015.

Let’s first take a look at this article from the Wall Street Journal that highlights the fact that the Federal Reserve is becoming increasingly concerned by leverage ratios financing the latest round of private equity deals. Apparently, the Fed is “warning” banks about this, which is complete disingenuous bullshit considering it is their low interest rate policy that is leading to all of this nonsense. Of course, they could always raise rates and put and end to this, but they know this will collapse the gigantic house of cards they have created. This is a total mess and one gigantic joke.

The WSJ reports that:

Wall Street banks are financing more private-equity takeovers with high levels of debt, despite warnings by regulators to reduce the amount of risky loans they make.

The Federal Reserve and the Office of the Comptroller of the Currency last year issued guidance urging banks to avoid financing leveraged buyouts in most industries that would put debt on a company of more than six times its earnings before interest, taxes, depreciation and amortization, or Ebitda. The Fed and the OCC also told banks to limit borrowing agreements that stretch out payment timelines or don’t contain lender protections known as covenants.

Still, 40% of U.S. private-equity deals this year have used leverage above that six-times ratio deemed the upper acceptable limit by regulators, according to data compiled by S&P Capital IQ LCD. That is the highest percentage since the prefinancial-crisis peak of 52% of buyout loans in 2007. Such lending all but disappeared during the crisis but has risen each year since 2009.

More references to 2007…

Like this post?
Donate bitcoins: 35DBUbbAQHTqbDaAc5mAaN6BqwA2AxuE7G

Follow me on Twitter.

Hacker Invoices Justice Department for Time in Prison, Refuses to Accept U.S. Dollars

May 20, 2014 by Michael Krieger

Thus I was taken from Arkansas, the nicest place I ever lived, and brought to Newark, New Jersey, a place worse than any of the many third world countries I have visited. I was held under bail conditions where the government refused to allow me to work in my industry, told me where I could live (I was not allowed to return to my birthplace of Arkansas where I lived at no expense, and instead forced to pay rent in New Jersey), and was subject to the indignity and expense of regular mandatory travel to the Newark courthouse to urinate in front of a federal employee. I was told where I could travel, and where and how I could sleep. My time and life was completely monopolized by the federal government during this period, again based off false statements from a lying piece of shit in the federal government…

My current market-determined hourly rate is 1 Bitcoin an hour. I was taken from my childhood home at gunpoint on January 18th, 2011, and I was not allowed to freely exercise my liberties as a citizen until April 11th, 2014. That’s 1179 days that you used my time that I am now billing you for (I gave you a discount by not including the last day). I am owed 28,296 Bitcoins. I do not accept United States dollars, as it is the preferred currency of criminal organizations such as the FBI, DOJ, ATF, and Federal Reserve and I do not assist criminal racketeering enterprises.

– Andrew “Weev” Auernheimer in his “Open letter to members of the New Jersey District Court, FBI, and DOJ consisting of an invoice for services rendered.”

I first brought the controversial hacker and troll “Weev” to your attention in my post: Hacker “Weev” is Released from Prison, Starts Hedge Fund Called TRO LLC, Appears on CNBC. I strongly suggest checking that post out before reading on.

Ever since being released from prison, Weev has seemingly and wisely turned his trolling skills on those aspects of U.S. society that are the most corrupt and cancerous. Namely Wall Street and the Federal Government. His latest action consists of a scathing letter to members of the “justice system” that imprisoned him, and some excerpts from the letter represent moments of sheer trolling genius.

Not only does he invoice the government for $13.2 million, but he refuses to accept U.S. dollars (more accurately Federal Reserve Notes, but whatever), and instead asks for payment in 28,296 Bitcoins. Simply epic. The full letter can be read below:

Open letter to federal scum

I just emailed this to the federal government and bcc’d 200 or so people:

Subject: “An open letter to members of the New Jersey District Court, FBI, and DOJ consisting of an invoice for services rendered.”

To the Honorable Susan D. Wigenton, US Attorney Paul J. Fishman, Assistant US Attorney Zach Intrater, and FBI Special Agent Christian Schorle,

“Whether ’tis nobler in the mind to suffer the slings and arrows of outrageous fortune, or to take arms against a sea of troubles, and by opposing end them?” -Shakespeare

It has long been one of the fundamental pillars of our system of law that when one commits a crime against another, they are made to give restitution to their victims.

I have, over the course of 3 years, been made the victim of a criminal conspiracy by those in the federal government. This was a conspiracy of sedition and treason, perpetrated with violence by a limited number of federal agents to deprive me of my constitutional rights to a fair trial and unlawfully put me in prison. This is not a hallucination on my part. These claims were in fact verified by the Third Circuit Court of Appeals when they vacated the false judgement against me imposed by the court of Judge Susan D. Wigenton. Perhaps you haven’t read the opinion of the appeals court exposing all of you as liars and seditionists yet. If so, here you go: https://www.eff.org/files/2014/04/11/weev.pdf

On January 18th, 2011 I was kidnapped at gunpoint by the US Marshals from Fayetteville, Arkansas, the town where I was born, based off a criminal complaint based on complete falsehoods written by FBI Special Agent Christian Schorle. The complaint alleged I had broken into AT&T’s servers (I hadn’t, as confirmed by the appeals court which verified no evidence was presented that any of my accesses bypassed security restrictions) and that New Jersey was the jurisdiction because AT&T was headquartered there. In actuality, AT&T was headquartered at the time in Houston, Texas. This sort of blatant falsehood is verifiable by a simple Google search.

Like this post?
Donate bitcoins: 35DBUbbAQHTqbDaAc5mAaN6BqwA2AxuE7G

Follow me on Twitter.

Share this:

Share this:

Share this:

Share this:

Share this:

Share this:

Share this:

Share this:

Share this:

Share this: