Mike Krieger: Where Food Stamps Go to Die

We live in fun times.  Guest post from Zero Hedge.  Excerpts:


Nothing exemplifies the ghetto status of the U.S. economy more than the success of Wal-Mart in the face of the ongoing destruction of what was once a vibrant and strong middle class. In case you missed it, Marion Nestle, Professor in the Department of Nutrition, Food Studies, and Public Health at NYU, came out with some interesting tidbits regarding the food stamp program. One of them is extraordinarily disturbing. She shows that Wal-Mart’s gets as much as 25% to 40% of revenue at some stores from food stamp dollars. This says it all folks. Food stamps are or course the perfect business for Wal-Mart and JP Morgan, which as I pointed out previously makes a lot of money running the program and keeping the populace in perpetual serfdom. Meanwhile, guess what another of the best performing stocks this year is? Corrections Corp of America, ticker CXW, up 41% YTD! Guess what they do? Yep, you guessed it. They lock up the serfs that get out of line. This is the Bloomberg description of CXW.



Corrections Corporation of America provides detention and corrections services to governmental agencies. The Company owns correctional and detention facilities in the United States and the United Kingdom. Services include design, construction, ownership, renovation, and management of new or existing jails and prisons, as well as long distance inmate transportation services.
There you have it folks. What sectors are leading the American economy in the “recovery”: Food stamps and Prisons. They are actually perfectly complimentary. If the food stamps don’t work the prisons will.

Or hip hop.  Don't forget the hip hop..

Eurozone epidemic meltdown: Spain in emergency crisis, Danish banks downgraded

From The Extinction Protocol.  Excerpts:


Spain in emergency crisis: “We’re in a situation of total emergency, the worst crisis we have ever lived through” said ex-premier Felipe Gonzalez, the country’s elder statesman. The warning came as the yields on Spanish 10-year bonds spiked to 6.7pc, pushing the “risk premium” over German Bunds to a post-euro high of 540 basis points. The IBEX index of stocks in Madrid fell 2.6pc, the lowest since the dotcom bust in 2003. Chaos over the €23.5bn rescue of crippled lender Bankia has led to the abrupt resignation of central bank governor Miguel Ángel Fernández Ordóñez, who testified to the senate that he had been muzzled to avoid enflaming events as confidence in the country drains away. Markets are on tenterhooks as Spanish yields test levels that forced the European Central Bank to respond last November with its €1 trillion liquidity blitz. “Nobody is short Spanish debt right now because they are expecting ECB intervention,” said Andrew Roberts, credit chief at RBS. “If it doesn’t come — if we take out 6.8pc — we’re going to see a hyberbolic sell-off,” he said.
And:
Mr Roberts said the collapse in Spanish tax revenues is replicating the pattern in Greece. Fiscal revenues have fallen 4.8pc over the last year, and VAT returns have slumped 14.6pc. Debt service costs have risen by 18pc. The country is caught in a classic deflationary vice: a rising debt burden on a shrinking economic base. “Once you get into such a negative feedback loop, you can move beyond the point of no return quickly,” he said.

It's not like one country's financial implosion stops or gets better--Greece, Italy, Portugal, and Ireland are still in bad shape--The focus just switches whenever new, horrible economic data is reported.  In hindsight, the multiple paths to economic Armageddon will become clear when they all become critical simultaneously.  Buckle up:  Here we go!

UPDATE: JPMorgan (JPM) Falls After Surprise Call, Mark-to-Market Losses

Whoopsie.  Things just got wobbly for JP Morgan.  Street Insider.  Excerpts:

Shares of JPMorgan (NYSE: JPM) are under heavy pressure after-hours Thursday after announcing a surprise conference call and large surprise mark-to-market loss in its chief investment office and exposure to a possible credit downgrade.



Since March 31, 2012, the company said its CIO has had significant mark-to-market losses in its synthetic credit portfolio. JPMorgan said the portfolio has proven to be "riskier, more volatile and less effective as an economic hedge than the Firm previously believed."


The company said it now see a loss of $800 million in its CIO unit, versus an expected profit of up to $200 million. (A one billion dollar swing from projections!)  Although CEO Jamie Dimon said it could "easily get worse."

The company said the loss was driven by $2 billion trading loss in its synthetic credit portfolio.

Despite the loss, JPMorgan said at this time it still expects to earn $4 billion in the quarter.

My guess is this is just the first of many surprise calls and losses in store for many, many corporations, finance-related or not.  If JP Morgan cannot sustain, the worldwide economic repercussions will be significant and quick.  Could JP Morgan be that falling domino that starts the chain reaction crash? 

Greece Is Just A Preview Of What's Coming For The Rest Of Us

From Chris Martensen at ZeroHedge:  Funfun! Excerpts:

All eyes are on Greece these days, with hopes the situation there can soon be resolved and the global recovery kicked into high gear.



Sadly, those hopes are misguided claims Ben Davies, CEO of Hinde Capital. In fact, he says, Greece's pain foreshadows the future awaiting the rest of the world.


It all comes down to simple math. Greece has increased its debts at a rate far faster than its income has grown. At some point, the debt became so large that the country could no longer service it.


What makes the rest of the PIIGS(Portugal, Italy, Ireland, Greece, and Spain) immune from a similar fate? Or Japan? Or the US? Or the OECD, in general?
Nothing.
And:
The cold hard fact Greece is facing is that it's now at the point where extraordinary losses need to be taken. The problem is, no one wants to take them. And all the sturm und drang being exhibited by Brussels, the ECB, sovereign debt holders, and other world leaders is nothing more than a frantic game of hot potato.



The one thing we can be confident of is that at some point, these losses will be taken. The market will eventually force it.


And the second thing we can predict is: we don't know what will happen when they are. There is so much complexity in the counterparty exposure to Greece debt - as well as the much larger derivative exposure tied to this debt - that anything between "not much" and "worldwide financial conflagration" could be possible.

Not specific, but scary, nonetheless..

Whoopsie!

Occupy Wall Street: Canadian Special Forces provocateur leaves wallet behind  Censored News.  Excerpts:

Canadian Special Forces Agent Dylan Spoelstra, 24, of Toronto, left his wallet behind exposing his identity, after he was arrested at Occupy Wall Street scaling a sculpture on Saturday morning. The police said that after his arrest, he was brought to Bellevue Hospital for a psychiatric evaluation after surrendering just after 9 a.m.



Occupy Wall Street media coordinator Thorin Caristo said when Spoelstra began climbing the reddish-colored Joie de Vivre sculpture in Zuccotti Park, on Saturday at 5:30 am, Caristo said he knew it was staged.

Caristo recalled the event, first saying to himself, “I can’t believe he’s climbing the sculpture."

Police arrived and began inflating airbags. Earlier, families had gathered on Friday at Occupy Wall Street with their children to camp, so it was a special time. However, police cleared them all out during Spoelstra's stunt.
And:
Then, on Saturday night, Occupy Wall Street security found Spoelstra's wallet, revealing that Spoelstra is a member of Canadian Special Forces.
 
Remember:  From now on out, the really disruptive ones at all peaceful protests will be regarded with suspicion.  I will be totally shocked if this story has legs.  But, mass exposure or not, lots of people seem to have figured this ruse out.  I really hope this movement continues to remain (relatively) peaceful, but the global signs seem to predict otherwise..  How long the peace remains will probably be determined by the public's response to even more provocatuers, staging ever larger provocations..
 
2011.  So far, so intense.

Meanwhile, In Pre-Mayhem Greece..

FT Report That Greek Bailout Package On The Verge Of Collapse After Surge In Greek Funding Needs Sends Stocks, Euro Plunging From Highs  Tyler Durden for Zero Hedge.  Excerpts:

Wondering what just caused the market to slump? Take a wild guess. That's right - Greece. Minutes after Greece passed a vote in which it promised to promise to promise to consider collecting 1998-1999 taxes (even as all of its tax collectors are about to go on permanent strike), the FT was breaking news that while the Troika was "bailing out" Greece in the past years, the country was spending itself into an  even greater oblivion. As a result, the terms of the July 21 Second Greek Bailout will most certainly need to be renegotiated, with banks having to take even greater write downs on the bond exchange, and with far more capital having to be injected into the country.

The Downward Spiral tightens; speeds up.

Strikes and protests mount against austerity in Greece  World Socialist Web Site.  Found it on Rense.  Excerpts:

“Today, it is no longer safe for us to go onto the streets,” a politician of the Greek ruling party PASOK told the Frankfurter Rundschau. “We are the government and we are alone.”



Widespread popular anger against the government in Greece has only intensified following the latest round of austerity measures. Incidents abound of politicians of both the social democratic PASOK and the conservative opposition New Democracy (ND) being pelted with eggs and on occasion stones when they show themselves in public. Angry crowds have repeatedly besieged the homes of politicians and chanted “thieves, thieves” and “Give the money back!”


According to surveys conducted by Eurobarometer, 82 percent of Greeks have lost confidence in the government and 83 percent distrust the parliament. Sixty-seven percent no longer trust the European Union. Other polls show that PASOK would today win just 15.5 percent of the vote in a new election.

It's all hanging by only several threads..  The Big Question remains:  How big the shock waves will be, and how hard those impacts will be felt.  Globally, of course.