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Daily Digest 8/23 - Consequences of Quantitative Easing, Boomer Retirements Drive Up Property Taxes

Wednesday, August 23, 2017, 9:23 AM

Economy

50,000 Blue Cross customers are about to get some bad news (North Carolina)

Thousands of North Carolina residents have been exempt from the Affordable Care Act and got to keep their old health insurance, paying significantly less for their coverage than those insured under the ACA.
But that’s about to come to an end for 50,000 customers of Blue Cross and Blue Shield of North Carolina. In 2018, they will have to switch to ACA plans, in some cases paying twice as much or more for health insurance.

Anthem’s exit leaves thousands without health insurance choice in California

Competition won’t be so healthy next year for Covered California enrollees in six counties: Monterey, San Benito, San Luis Obispo, Santa Barbara, Inyo and Mono. For them, it will be Blue Shield of California — or bust.

Baby Boomer retirements drive up property taxes (Illinois)

The Baby Boomer generation owns 52 percent of the homes in Illinois. In five years, the largest group of them will qualify for senior citizen property tax exemptions.
Picking up the tab in the state with one of the nation's highest property tax burden will be renters, businesses and younger homeowners.

McConnell: ‘America is not going to default’

The government has enough money to pay its bills until Sept. 29. After that, Congress would have to give permission for the government to borrow more money to meet its obligations, including Social Security and interest payments.

High-Grade U.S. Bonds Run at Fastest Pace Ever Past $1 Trillion

Blue-chip companies have sold more than $1 trillion of bonds in 2017, passing that milestone for the sixth straight year, as Federal Reserve rate hikes spur companies to borrow while it’s still cheap.

The Unintended Consequences of Quantitative Easing

Quantitative easing, which saw major central banks buying government bonds outright and quadrupling their balance sheets since 2008 to $15 trillion, has boosted asset prices across the board. That was the aim: to counter a severe economic downturn and to save a financial system close to the brink. Little thought, however, was put into the longer-term consequences of these actions.

Emerging economies await end to ECB largesse with record euro debt

Under Draghi, the ECB has pumped more than 2 trillion euros ($2.35 trillion) into the global financial system. His first hint in June that tapering might be coming pushed the MSCI's emerging equity index down 2 percent over the following week.

Gold & Silver

Click to read the PM Daily Market Commentary: 8/21/17

Provided daily by the Peak Prosperity Gold & Silver Group

Article suggestions for the Daily Digest can be sent to [email protected]. All suggestions are filtered by the Daily Digest team and preference is given to those that are in alignment with the message of the Crash Course and the "3 Es."

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saxplayer00o1's picture
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Even the Junkiest Sovereign Debt Now Pays Less Than 6%

Even the Junkiest Sovereign Debt Now Pays Less Than 6%

Bloomberg-4 minutes ago
To see how much central bank bond-buying has distorted market valuations, just take a look at the lowest-rated sovereign debt. The junkiest emerging-market ...
 
S. Korea's household debt hit record high in Q2
Yonhap News 11h ago
 

Drowning in debt, Connecticut faces budget crunch

Reuters-3 hours ago
Some $23 billion of outstanding municipal debt has also constrained spending. Bondholders must be paid ahead of most other expenses like non-essential ...

Liabilities Grow (Much) Faster Than Assets for Connecticut Pension ...

ValueWalk-19 hours ago
And its unfunded liabilities grew an astounding 73% to 20.4 billion, from 11.8 ... have underestimating the true cost of their pension debt by billions of dollars.

Older Americans Have More Student Debt Than Ever, Face 'Overly ...

Nasdaq-20 hours ago
37% of 65+ y/o loan borrowers are in default: As the general population also struggles with loan payments, older borrowers are leading in missed payment rates, ...

Kentucky's pension crisis can't be solved with 401(k) plans, group says

The Courier-Journal-16 hours ago

Moving from traditional pension plans to 401(k)-type plans "would increase the cost of paying off the existing unfunded liabilities" of about $43 billion within ..

Fixing New Jersey's failing pension system is an economic necessity

NorthJersey.com-22 hours ago
New Jersey's public pension crisis is a stark case in point. With more than $235 billion in unfunded liabilities – $26,000 for every man, woman and child – the ...

Employee Out-Of-Pocket Health Costs Will Eclipse $2500 Next Year

Forbes-2 hours ago

Companies have had to manage rapidly accelerating health care costs via cost-sharing and through other traditional strategies such as vendor re-negotiations

Iowans can sound off Saturday about 57% health insurance increases

DesMoinesRegister.com-16 hours ago
Iowans facing health insurance premium increases of 57 percent or more will have a chance to air their grievances to the state's insurance commissioner ...

 

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7th Fleet Commander Canned

U.S. Navy dismisses 7th Fleet commander after deadly USS John S. McCain crash (USA Today)

Quote:

The U.S. Navy dismissed Vice Adm. Joseph Aucoin as commander of the 7th Fleet on Wednesday, following the deadly collision between the USS John S. McCain and an oil tanker off Malaysia. It was the fourth accident involving a U.S. warship this year and the second fatal collision.

Adm. Scott Swift, commander of U.S. Pacific Fleet, dismissed Aucoin "due to a loss of confidence in his ability to command," the U.S. Pacific Fleet said in a statement. It said Rear Adm. Phil Sawyer will assume command of the 7th Fleet immediately.

Aucoin had expected to retire this year, but his superiors decided to push his departure date due to concerns over his leadership skills, the New York Times reported. Aucoin has commanded the Japan-based fleet since September 2015.

Vice Adm. Joseph Aucoin (AP Images)

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Ship collisions: GPS spoofing?

I don't have engineering background or sufficient interest to chase down this topic.  Any of the rest of you have ideas?  Having "the boss" of the Pacific Fleet commit a traditional seppuku seems a little stilted.

1.  An article from New Scientist on GPS spoofing of ships

On 22 June, the US Maritime Administration filed a seemingly bland incident report. The master of a ship off the Russian port of Novorossiysk had discovered his GPS put him in the wrong spot – more than 32 kilometres inland, at Gelendzhik Airport.

After checking the navigation equipment was working properly, the captain contacted other nearby ships. Their AIS traces – signals from the automatic identification system used to track vessels – placed them all at the same airport. At least 20 ships were affected.

 

While the incident is not yet confirmed, experts think this is the first documented use of GPS misdirection – a spoofing attack that has long been warned of but never been seen in the wild.

2.   Georgiabelle comments at ZH

There are articles out there claiming that this collision, as well as three other PACCOM ship "mishaps", were caused by GPS spoofing. There is also a rumor out there that this is why Professor Salil Mehta had all his accounts shut down by Google, (and here) with no explanation or apparent cause. Professor Mehta had said he was going to do a statistical analysis of the probability of 4 PACCOM warships, the USS John S. McCain, the USS Antietam, USS Lake Champlain, and the USS Fitzgerald, all colliding with merchant vessels or running aground...since January 31, 2017. Shortly after he posted the comment all his accounts were suspended.

3.  More from Georgiabelle:

The GPS on both the US ship and the merchant vessel are taken over and "spoofed" so that both ships' instruments indicate that the other ship is taking corrective measures, when in fact they are not. The AIS marine tracking log of the Alnic MC, the merchant vessel that rammed the  USS John S. McCain, shows bizarre maneuvers and sudden course changes. The same is true of the tracking logs for the MV ACX Crystal, the vessel that collided with the USS Fitzgerald in June. Further, on June 22 the United States Maritime Administration (MARAD) issued a warning titled “2017-005A-GPS Interference-Black Sea” that stated: “A maritime incident has been reported in the Black Sea in the vicinity of position 44-15.7N, 037-32.9E on June 22, 2017 at 0710 GMT. This incident has not been confirmed. The nature of the incident is reported as GPS interference. Exercise caution when transiting this area. Further updates may follow.”

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GPS spoofing

There's an old article (from 2008) where a group was able to spoof a GPS receiver.  And DoD has known about this since at least 2003.  My guess: signals from GPS sats are so faint, its easy for a closer, higher-powered transmitter to transmit signals on the same freq that end up convincing the receiver it is somewhere else.   I'm not a radio guy so I don't know what the limitations of the spoofing techniques are.  (I.e. can you just focus the spoofing on a target and its the only thing that gets affected?  That would be a neat trick, but maybe not that hard to do.)

https://www.wired.com/2008/09/researchers-dup/

One hopes they've fixed it in the interim, but you never know.

"Once is happenstance. Twice is coincidence. The third time it's enemy action."

I guess after the fourth time, the boss gets early retirement - for not recognizing its enemy action.  I'd fire him too.

 

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US military dependence on GPS

If I was going to go to war with the US, the first thing I'd do is degrade, hack or destroy the GPS system used by all branches of our military.  The military knows it.  Heck, even fiction writers know it and write that into their stories.  I assume China and Russia have robust ways to do exactly that, and other potential enemies might too.   We have been antagonizing both of them lately, and causing a couple of collisions with Pacific Fleet ships would seem to me to be a proportional response from their perspective. So I would have assumed that the US military have back ups and procedures to deal with GPS problems or a complete failure of the system.  Today I have to wonder if these incidents mean, among other things, that the vaunted US Navy has become so dependent on the technology that they are unable to navigate in peacetime without running into things if their GPS is hacked?  Are there not sailors posted 24/7 to actually look around with their physical eyes?  Or is that duty so boring and discipline so lax that the sailors are posted around the ship but they aren't actually paying attention or are playing hooky below decks?  I've never been on a Navy ship at sea but I wonder if it can really be that hard to avoid running into a 500 ft. cargo ship, even in the dark, and even if THAT ship has been hacked and is purposely being driven at the Navy vessel. I mean what would they do if an enemy military vessel was maneuvering aggressively and shooting at them?!

But the US Empire is being hollowed out in many ways today.  We know that already.  Maybe this is a manifestation of it.  Scarey.

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surprise

Tom-

Boy, I had a nagging suspicion about the last "accident" - this one means it really is enemy action for sure.  No way its coincidence.

Like with a lot of these cyber things, there are a lot of suspects and no firm evidence.  I don't think we've tweaked China enough for them to do this.  Maybe Russia.  For sure North Korea.

I wonder if we'll ever know the real story.  My guess is, it's not incompetence except at the command level.  I don't think the surface ship crews were expecting their equipment to malfunction AND for the other shipping to actively try and collide with them at the same time.

They are probably very careful with some group of threats, and operate under a different framework when dealing with civilian supertankers in a shipping channel.  I'm sure once they are trained up it won't be a problem.  (i.e. I don't think this is some sign of massive decay at the heart of Empire)

 

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Military GPS system

I was pretty sure "something was up" on that second collision and was unaware of the prior two incidents making four total.  With four in such a short span of time I am pretty sure of enemy action.

Nothing else really makes sense from a probability standpoint.

If GPS spoofing, then we have to place this at the level of state actor because of the sophistication involved.  Spoofing the civilian bands is one thing, but spoofing encrypted military bands at the same time is on another level.

The data accessible by civilians is the coarse-acquisition (C/A) code on the L1 (1575.42MHz) frequency. And actually lesser known is that all of the GPS satellites launched since 2005 also transmit the new civilian-accessible L2C code on the L2 (1227.60) MHz frequency. (It's also worth mentioning that even before the L2C signal became available, some civilian GPS modules used techniques that help improve accuracy by using the L2 transmission. They don't have to decrypt the signal, but just measuring the signal itself can help improve positioning.)

The military have a few more toys to play with, in addition to C/A on L1, and L2C on L2, they also have access to the encrypted P(Y) data being sent on both the L1 and the L2 frequencies. And this allows them to perform ionosphere correction as mentioned by other answers. Since 2005, the military also get access to their new M-code signals being transmitted on both L1 and L2, which will increase accuracy and reliability further.

In the future, the GPS system will get a few more features. In addition to more L2C satellites, the C/A signal on L1 will be upgraded to what's called L1C, which increases performance and reliability. The L5 frequency (1176.45MHz) will also start to be used for a new civilian-accessible "Safety of Life" signal. For the military, new GPS satellites will have an additional directional antenna which can be rotated to selectively increase the strength of the M-code signal in a particular location on earth.

(Source)

It would be interesting to know which systems were on board the involved ships.  If all had pre-2005 GPS installations then that might be a clue of sorts?

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No excuse

Having served 6 years in the USN working on navigation electronics on subs/ships and more years on civilian ships I can say that even if the GPS systems were somehow being spoofed that this is no excuse for collisions like this occurring in the open ocean. As Dennis points out, old school eyeballs are still supposed to be used at all times but even if a ship was running with no lights at night it shouldn't be able to 'sneak' up on another ship. While GPS may have supplanted older LORAN and NAVSAT systems it has not changed the use of navigation radar systems. These systems would actively detect and track the relative positioning of any closing ship regardless of any potential GPS 'spoofing'. Barring a sudden course change in narrow straights by a passing vessel, there is no excuse for collisions like this happening to Navy ships that are well staffed with watch sections of trained officers and enlisted men. Ships have been sailing for hundreds of years and there are time honored procedures for how to navigate them so as to avoid collisions like this. Here is the bible of navigation (Bowditch's American Practical Navigator). Furthermore, the people on watch should have trained extensively for how to detect and respond to potential collision situations. The military loves training and endless drills for casualty situations.

Also, as Chris points out, while the civilian vessels might be potentially susceptible to GPS spoofing, the military vessels should not be easily fooled. I worked on the early GPS systems and the military had and has maintained more robust access to the relevant signals. Any attempts at spoofing in the region would also have covered a wide region and affected many ships, not just one or two. Hard to hide such an event.

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So what gives?


Quote:

As Dennis points out, old school eyeballs are still supposed to be used at all times but even if a ship was running with no lights at night it shouldn't be able to 'sneak' up on another ship. While GPS may have supplanted older LORAN and NAVSAT systems it has not changed the use of navigation radar systems. These systems would actively detect and track the relative positioning of any closing ship regardless of any potential GPS 'spoofing'. Barring a sudden course change in narrow straights by a passing vessel, there is no excuse for collisions like this happening to Navy ships that are well staffed with watch sections of trained officers and enlisted men.

Concur, the redundant nature of underway watches and surface sweep radar should have prevented these collisions. What gives?

Speculation time - What if the ships were rendered inoperative ala "Black Sea" style? Now that's a news story you wouldn't want getting out and around. Then hack/spoof a lightly staffed commercial vessel and use her as a battering ram.

Ok, CT time is over. Back to sniffing on these chemtrails. ;-)

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US credit rating at risk if debt limit is not raised

US credit rating at risk if debt limit is not raised in a 'timely manner ...

Los Angeles Times-21 hours ago
The nation's credit rating is at risk if the $19.9-trillion debt limit is not raised “in a timely manner” before the Treasury runs out of cash in October, Fitch Ratings ...

Dutch government demands €13m in negative interest from ...

DutchNews.nl-1 hour ago
The Dutch government has launched a claim against Deutsche Bank for €13 million that it says is owed as a result of negative interest rates. The German bank ...

China's Debt Machine Gets Another Sausage Factory

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Speakers at CPS hearing assail budgeting practices

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1.3 million workers' pension plans expected to go insolvent

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Health care will cost couples $275000 in retirement

CNNMoney-9 hours ago
A couple retiring this year will need an estimated $275,000 to cover health care costs in retirement, according to Fidelity. That's a 6% increase over last year.

 

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long history

Given the long history of navigation at sea, there is a time-tested mechanism in place for avoiding other ships while under way.  (My own at-sea experience is limited to being a small boat day sailor in California; all we had was the Mark 1 Eyeball and a depth gauge).  "If an object appears to be growing larger, and it is not moving left or right in your field of view, that means you're on a collision course!"

Its the top thing on the TODO list at sea: "avoid other boats."  That, and not running aground.

That's why I assume it has to be some sort of enemy action of some sort.  I can't remember a time when 4 USN ships had collisions in one year.

https://maritime.college/Boating-Rules.php

https://maritime.college/documents/Sea%20Yarn.pdf

The usual reward (if memory serves) for just running a big ship aground was early retirement for the CO.

I know I lived in dread fear of what my Dad would do to me if I scraped the side of the boat on a buoy, much less what might happen if I actually struck another boat.  He never actually said, but I got the distinct impression it would have utterly scuppered my hopes of ever being able to hoist my flag. :)

 

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The good news is...

...at least the US military still holds the appropriate people responsible for failures, up to and including generals and admirals.  OK, maybe not in every instance, but often.  That's a rare and dying form of integrity in our society, and I'm impressed.  I mean, if these kinds of failures had happened among politicians, bankers, academicians, "journalists," or what not, they would have shrugged it off as unavoidable or picked some poor low level employee and sacrificed him on the altar of public opinion.  I can't imagine the US Navy picking some seaman first class or ensign and blaming them for these failures.  It's the Captain, Commander and Admiral.  I'm trying to imagine the "punishment" that awaits the Federal Reserve, for instance, when the economy implodes!!  How about being forced to write a book in retirement entitled The Courage to Act that describes how they saved the economy and the world, or how they would have if the politicians had just done their part.  Cute.

Systemic incompetence on the level necessary to cause more than four of these kinds of accidents in a short period of time is very frightening, and I'm too proud as an American to believe that's what it could be.  But that emotional reaction makes me stop and force myself to consider that the hollowing out of our Empire could be THAT advanced.

The technological sophistication necessary for an enemy to cause these accidents if the cause wasn't incompetence also makes my blood run cold.  Einstein may have gotten his timing wrong when he said he didn't know how the next war (after WWII) would be fought, but that he was sure the one after that would be fought with sticks and stones.  Maybe WWIII will start highly sophisticated and destructive (perhaps super technological and limited tactical nuclear), and then conclude with sticks and stones.  On the bright side, maybe the breath-taking opening moves of WWIII will be SO disruptive and destructive to modern military systems and strategies that the opposing sides will withdraw to their own borders in frustration essentially unable to continue fighting in the manner to which they have become accustomed.  Then we could have peace for 20 years while they reinvent low technology warfighting capacities (dumb bombs, visual and celestial navigation, bayonets, deadfall traps, trebuchet, moats around castles, fire, etc.).  Right.  I'm fantasizing.

In fact, some clever tacticians disguised as country bumpkins at pumpkin chunkin festivals are already experimenting with the latest trebuchet models:

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