US Consumer Bankruptcies Jump By Most In Three Years; Third-Party Collections At All Time High Submitted by Tyler Durden on 08/14/2013 16:36 -0400 Consumer Bankruptcies recovery Something funny happened on the road to the epic consumer balance sheet cleansing and subsequent releveraging (without which there can be no actual non-Fed sugar high fueled recovery): the second quarter. And specifically, as the Fed just disclosed in its quarterly Household Debt and Credit Report , the number of consumer bankruptcies during the second quarter, just jumped by 71K, to 380K from 309K in Q1, the biggest quarterly jump in precisely three years - on both an absolute and relative basis - and the most since the 158K jump recorded in Q2 2010. It appears that when the "releveraging" US consumer isn't busy buying stuff on credit, they are just as busy filing for bankruptcy. Healthy consumer-led recovery and all that. But wait, there's more. Because as this other data set also from the NY Fed shows, the proportion of US Consumer that have a third-party collection process commenced against them is pretty much at all time highs, where it has been for the past two quarters. Must be the recovery too. Source: NY Fed Average: 5 Your rating: None Average: 5 ( 5 votes) !-- -- Tweet !-- - advertisements - .AR_2 .ob_empty {display: none;} .AR_2 .rec-link {color: #565656;text-decoration: none;font-size: 12px;} .AR_2 .rec-link:hover {color: #565656;text-decoration: underline;font-size: 12px;} .AR_2 {float: left;width:50%} .AR_2 li {list-style: none outside none !important;font-size: 10px;padding-bottom: 10px;line-height: 13px;margin:0;} .AR_2 .ob_org_header {color: #000000;text-decoration:bold; margin-left: 0px; font-size:14px;line-height:35px;} .AR_3 .rec-link {color: #565656;text-decoration: none;font-size: 12px;} .AR_3 .rec-link:hover {color: #565656;text-decoration: underline;font-size: 12px;} .AR_3 .rec-src-link {font-size: 12px;} .AR_3 li {padding-bottom: 10px;list-style: none outside none !important;font-size: 10px;line-height: 13px;margin:0;} .AR_3 .ob_dual_left, .AR_3 .ob_dual_right {float: left;padding-bottom: 0;padding-left: 2%;padding-top: 0;} .AR_3 .ob_org_header {color: #000000; text-decoration:bold; margin-left: 0px; font-size:14px;line-height:35px;} .AR_3 .ob_ads_header {color: #000000; text-decoration:bold; margin-left: 0px; font-size:14px;line-height:35px;} -- - advertisements - Login or register to post comments 8507 reads Printer-friendly version Send to friend Similar Articles You Might Enjoy: Italian Scandal Widens As Italy's Third Largest Bank Set To Get Third Bailout In 3 Years; Draghi, Monti Implicated Levered Beta Uber Alles: NYSE Borse Margin Debt Jumps To Three Year Highs, Investor Net Worth Remains At Record Lows All Eyes On The Gold Rout, Most Oversold In 14 Years JPY Surges Most In 3 Years; "Buy-The-Dip-Mentality" Gone Chicago PMI Plummets By Most In Over 4 Years; Weather Blamed
Apple And Taxes Submitted by Tyler Durden on 04/23/2013 17:50 -0400 Apple Dividend Recap Federal Tax Confused why AAPL is opting for the dividend recap route (as we predicted it would in January )? Simple: as the first chart below reminds us, as of December 31, nearly 70% of the company's total cash, which has grown to a record $145 billion in the current quarter, was held offshore. This means that if AAPL wanted to repatriate this $100 billion or so in cash, it would have to pay Federal tax on it, amounting to dozens of billions in remittances to Uncle Sam as this is cash which AAPL does not have full access to for US based operations. Hence: it has opted to raise cash by issuing debt instead of repatriating its cash. Which brings up an interesting point. As we have shown in the past, perhaps the one thing Tim Cook's company has loathed more than anything in the past, is to pay taxes, which is why it has some of the most convoluted legal tax shelters imaginable. Indeed, in the current quarter, according to the company's cash flow statement, a tiny $2.4 billion was paid in cash taxes. Putting this number in perspective, the company had an operating profit of $12.4 billion. Or, cumulatively, since December 2008, AAPL has generated a grand total of $149 billion in operating profit, while paying just $21 billion in total taxes. Is it apparent now why some $100 billion in Apple cash is not fully recourse to the company? Unless, of course, AAPL decides to follow Gerard Depardieu's example, and run away into the tax-amnesty friendly steppes of Russia, where it will be free to do as it wishes with all of its cash... Average: 4.88889 Your rating: None Average: 4.9 ( 9 votes)
Stop Manipulating Bank Earnings With Loan-Loss Reserves, Currency Comptroller Warns Submitted by Tyler Durden on 10/30/2012 13:13 -0500 Capital Markets Commercial Real Estate Comptroller of the Currency GAAP Housing Bubble Market Crash non-performing loans None Real estate Reality Readers of Zero Hedge know well that one of the most abhorred (by us) accounting gimmicks employed by banks each and every quarter over the past 3 years to boost their bottom line, is to engage in loan-loss reserve releases: a process which has absolutely no associated cash flow benefit, but merely boosts EPS for GAAP purposes. In some cases, like this quarter's absolutely farcical JPM earnings release, the abuse is beyond the pale, as the offending bank releases reserves even as it reports surging non-performing loans : two processes which in a normal world can not coexist. Yet quarter after quarter banks keep on doing this, and in fact a big part of Q3's to date EPS outperformance is courtesy of financial company "earnings", of which, in turn, loan losses amount to about 50% of the entire blended financials bottom line. Yet while we can rage and warn, nothing usually happens until there is a market crash due to the gross manipulation of reality that such an activity entails. Luckily, this time someone with more clout in the legacy establishment has now stood up to warn about the mounting dangers associated with the relentless abuse of loan-loss reserve releases: none other than the US Comptroller of the Currency. From WSJ : The U.S. could stop banks from boosting their earnings by cutting back on reserves held against future loan losses , a top bank regulator said Monday, arguing that the economy remains too rocky for financial institutions to lower their cushions. Comptroller of the Currency Thomas Curry has been warning for several months about the practice of bank-reserve releases, which occur when banks add less to their loan-loss reserves than they write off for uncollectible loans. The difference has bolstered banking profits in recent quarters. Mr. Curry repeated his criticism in a speech before a group of bank risk managers in Dallas, citing the potential for future losses in residential and commercial real estate. "I remain very concerned that too many institutions are continuing to reduce provisions solely to boost earnings," Mr. Curry said. Yet, sadly, while the US " could " intervene, it won't for the simple reason that everyone in the US is beholden to these same banks whose ongoing fake profitability is critical to the status quo, the government and everyone in it. After all the, everyone has now gone all in on the massive systemic ponzi. And the Currency Comptoller will be the last to dare to pull the plug on what is a black capital hole amounting to trillions and trillions of dollars. " We are ready to take action if and when it is needed ," he said. Regulators are concerned banks will suffer more losses from borrowers who took out home-equity loans from 2004 to 2008 , as the housing bubble grew and then burst, Mr. Curry said. Most of those loans allowed borrowers to make only interest payments for seven to 10 years. When that period ends, some borrowers are unlikely to be able to meet monthly payments that are increased to include principal. And many likely won't be able to refinance. Action is needed. Observe the billions in "profits" JPM alone has made from loan-loss reserve releases (blue bar): Alas, no action will be taken. And it is this hypocrisy that makes a total mockery of all the so-called regulators in the US. Because at least the banks are honest in their ongoing manipulation and fraud: they benefit from it, and why not: after all nobody dares to stop them. It is the regulators whose job is to put an end to this behavior. But they are afraid: for their jobs, for their legacy, for their petty egos. As long as this doesn't change, the US economy, and its capital markets, just continue happily day after day, to the most epic crash every imagined. The good news is that only that terminal event has any hope of changing all these things that we, and even the regulators now, lament. Everything else is hollow rhetoric. Average: 4.882355 Your rating: None Average: 4.9 ( 17 votes) Tweet Login or register to post comments 10580 reads Printer-friendly version Send to friend Similar Articles You Might Enjoy: JPM Beats On Loan Loss Reserve Release Despite Drop In Trading Revenues And NIM, Surge In Non-Performing Loans The 'Real-Thing' Biden vs Ryan VeeP Debate - Live Webcast Are 401(k) Loan Defaults Set To Resurge? Spanish Stocks Plunge Most In 12 Months As Egan-Jones Cuts Spain To CCC+ German President Demands Merkel Explain 'Why Germany Needs To Save
Destroying The Myths Of Bernanke's Brave New World Of QEtc. Submitted by Tyler Durden on 10/16/2012 17:55 -0400 Ben Bernanke Central Banks Fail Federal Reserve Gross Domestic Product Monetary Base Nominal GDP Quantitative Easing Recession Van Hoisington Entering the final quarter of the year, Lacy Hunt and Van Hoisington (HH) describe domestic and global economic conditions as extremely fragile . Across the globe, they note, countries are in outright recession, and in some instances where aggregate growth is holding above the zero line, manufacturing sectors are contracting. Of course, new government initiatives have been announced, particularly by central banks, in an attempt to counteract deteriorating economic conditions. These latest programs in the U.S. and Europe are similar to previous efforts . While prices for risk assets have improved, governments have not been able to address underlying debt imbalances. Thus, nothing suggests that these latest actions do anything to change the extreme over-indebtedness of major global economies . To avoid recession in the U.S., the Federal Reserve embarked on open-ended quantitative easing (QE3). Importantly, in their view, the enactment of QE3 is a tacit admission by the Fed that earlier efforts failed, but this action will also fail to bring about stronger economic growth . HH go on to break down every branch that Bernanke rests his QE hat on from the Fed's inability to create demand, to the de minimus wealth effect, and most importantly the numerous unintended consequences of the Fed's actions. Can all the trillions of dollars of reserves being added to the banking system move the economy forward enough to eventually create a higher level of aggregate spending? Our analysis of the aggregate demand curve and its determinants indicate they cannot. The unintended consequence of these Federal Reserve actions, however, is to actually slow economic activity. The unintended consequences of QE3 could also serve to worsen and undermine global economic conditions already under considerable duress . When the Fed actions lead to higher food and fuel prices, the shock wave reverberates around the world, with many foreign economies being hit adversely. When prices of basic necessities rise, the greatest burden is on those with the lowest incomes since more of their budget is allocated to the basic necessities such as food and fuel. Thus, a jump in daily essentials has a more profound negative impact on living standards in economies with lower levels of real per capita income. Three studies show that the impact of wealth on spending is miniscule —indeed, “nearly not observable.” How the Fed expects the U.S. to gain any economic traction from higher stock prices when rising commodity prices are curtailing real income and spending is puzzling. The other element that is required for the Fed to shift the aggregate demand curve outward is the velocity or turnover of money over which they also have no control . During all of the Fed actions since 2008 the velocity of money has plummeted and now stands at a five decade low. The consequence of the Fed’s lack of control over the money multiplier and velocity is apparent . The monetary base has surged 3.3 times in size since QE1. Nominal GDP, however, has grown only at an annual rate of 3%. This suggests they have not been able to shift the aggregate demand curve outward. Nor, with these constraints, will they be any more successful in shifting that curve under the present open-ended QE3. Increased aggregate demand and thus rising inflation is not on the horizon. Full HH report below: HIM2012Q3NP Average: 5 Your rating: None Average: 5 ( 1 vote) Tweet Login or register to post comments 5918 reads Printer-friendly version Send to friend Similar Articles You Might Enjoy: Stocks See Biggest 2-Day Gain In 5 Weeks On...Denied Rumors? Latest Unintended Casuality Of QEtc.: Mortgage REITs Guest Post: QE3 And Bernanke's Folly - Part II Goldman's Clients Are Skeptical About The Effectiveness Of QEtc., Worried About Inflation The Experimental Economy
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