- Central Bank Economists: Bad Central Bank Policy Is INCREASING Inequality
While the leaders of the Fed and other central banks claim that their extraordinary monetary policies haven't significantly increased inequality, economists with the world's most prestigious financial agency, the Bank of International Settlements – known as "the Central Banks' Central Bank" – just released a report showing otherwise.
BIS notes:
Our simulation suggests that wealth inequality has risen since the Great Financial Crisis. While low interest rates and rising bond prices have had a negligible impact on wealth inequality, rising equity prices have been a key driver of inequality …. Monetary
policy may have added to inequality to the extent that it has boosted equity prices.
***
Inequality is back in the international economic policy debate. Evidence of a growing dispersion of income and wealth within major advanced and emerging market economies (EMEs) has sparked discussions about its economic consequences. Although there is no consensus on the relationship between inequality and growth, there are concerns that rising inequality may become a serious economic headwind. [Right.]
***
Moreover, the faster rise in remuneration at the very top of the income distribution relative to wage growth in the lower percentiles has been linked both to the rapid growth of the financial sector since the 1980s [correct] and to changes in the social norms that contribute to the determination of executive pay (Piketty (2014)).
***
The share of securities holdings, equity in particular, tends to be even higher at the top 5% or 1% of the distribution. [Obviously.]
Conversely, housing accounts for a higher share in the lowest net wealth quintile, for which low net wealth is in many cases a reflection of high levels of mortgage debt. In a number of cases, net wealth is negative, suggesting that liabilities, in the form of mortgage, consumer and other debt, exceed assets.
***
Unconventional monetary policies might have had the most significant effects on the dynamics of wealth inequality through changes in equity returns and house prices. The evidence suggests that unconventional policies had a relatively strong and immediate effect on equity prices (see eg Rogers et al (2014)). As investors reshuffle their portfolios away from assets being purchased by the central bank towards other, potentially riskier, assets, the equity risk premium should decline, boosting equity prices further. And a low interest rate environment is likely to have encouraged a search for yield.
***
Monetary policy may affect household wealth through different channels. Interest rate changes directly affect the valuation of both financial assets (eg equities and bonds) and real estate as well as the cost of leverage. Conventional easing of monetary policy by lowering short-term interest rates tends to boost asset prices. This works through a lowering of the discount rates applied to future income flows from these assets, and possibly by raising profit expectations and/or reducing risk premia.
Indeed, boosting stock prices has been the Fed and other central banks' main focus.
In addition, it has been thoroughly documented that quantitative easing. It’s been known for some time that quantitative easing (QE) increases inequality (and see this and this.) Many economists have said that QE quantitative easing benefits the rich, and hurts the little guy. 3 academic studies – and the architect of Japan’s quantitative easing program – all say that QE isn’t helping the American economy.
Negative interest rates – another increasingly widespread form of extraordinary monetary policy – may increase inequality as well. For example, economist Katie Evans notes:
Negative interest rates could increase inequality. While the experiences of countries who have tried negative rates suggest it wouldn’t lead to a boom in mortgage lending, the cost of borrowing would remain at rock bottom for those who could afford to do so. Those with substantial incomes and existing assets could borrow cheaply and invest in assets like property. Those on lower incomes, meanwhile, would find it even harder to save for a deposit and see house prices rising further out of reach.
(Several other economists agree.) Indeed, negative interest rates motivate consumers to hoard cash, rather than spend or invest it, putting in even further behind those who have enough to freely invest.
Other recent central bank policy is also a main driver of inequality. And see this.
Postscript: Surprisingly – given the arcane nature of central bank policy – the natives are getting restless.
- Rigged Democracy – Nearly 10% Of Democratic Party Superdelegates Are Lobbyists
Submitted by Mike Krieger via Liberty Blitzkrieg blog,
On July 25, these superdelegates will cast votes at the Democratic National Convention for whomever they want, regardless of primary and caucus outcomes. Democrats like to describe superdelegates as mostly elected officials and prominent party members, including President Obama and former Presidents Bill Clinton and Jimmy Carter.
But this group, which consists of 21 governors, 40 senators and 193 representatives, only makes up about a third of the superdelegates. Many of the remaining 463 convention delegates are establishment insiders who get their status after years of donations and service to the party. Dozens of the 437 delegates in the DNC member category are registered federal and state lobbyists, according to an ABC News analysis.
In fact, when you remove elected officials from the superdelegate pool, at least one in seven of the rest are former or current lobbyists registered on the federal and state level, according to lobbying disclosure records.
– From the ABC News article: The Reason Why Dozens of Lobbyists Will Be Democratic Presidential Delegates
When it comes to presidential primaries, there isn’t a whole lot of “democracy” in the Democratic Party.
Last year, The New York Times published an article examining the American attitude toward the question of money in politics. This is what it found:
Americans of both parties fundamentally reject the regime of untrammeled money in elections made possible by the Supreme Court’s Citizens United ruling and other court decisions and now favor a sweeping overhaul of how political campaigns are financed, according to a New York Times/CBS News poll.
The findings reveal deep support among Republicans and Democrats alike for new measures to restrict the influence of wealthy givers, including limiting the amount of money that can be spent by “super PACs” and forcing more public disclosure on organizations now permitted to intervene in elections without disclosing the names of their donors.
As evidence of just how lopsided opinion is on the subject, see the following graphic:
You might think the supposedly “liberal” Democratic Party would take this sort of thing to heart, but you’d be wrong. Not only is the super delegate system intentionally undemocratic, but a remarkable 9% of superdelegates are actually lobbyists.
You just can’t make this stuff up.
From ABC News:
Hillary Clinton holds a substantial edge among a particular and little-noticed kind of delegate to the Democratic National Convention: Superdelegates.
On July 25, these superdelegates will cast votes at the Democratic National Convention for whomever they want, regardless of primary and caucus outcomes. Democrats like to describe superdelegates as mostly elected officials and prominent party members, including President Obama and former Presidents Bill Clinton and Jimmy Carter.
But this group, which consists of 21 governors, 40 senators and 193 representatives, only makes up about a third of the superdelegates. Many of the remaining 463 convention delegates are establishment insiders who get their status after years of donations and service to the party. Dozens of the 437 delegates in the DNC member category are registered federal and state lobbyists, according to an ABC News analysis.
In fact, when you remove elected officials from the superdelegate pool, at least one in seven of the rest are former or current lobbyists registered on the federal and state level, according to lobbying disclosure records.
That’s at least 67 lobbyists who will attend the convention as superdelegates. A majority of them have already committed to supporting Hillary Clinton for the nomination.
Of course they have.
Superdelegates are unique to the Democratic nominating process. Of the 4,763 delegates who will attend the Democratic National Convention in Philadelphia, 717 will be superdelegates — almost a third of the total required to win the nomination.
Meanwhile, former presidential candidate and current Democratic Party superdelegate, Howard Dean, shared his personal thoughts on democracy via Twitter the other day.
@D_Born @BernieSanders Super delegates don't "represent people" I'm not elected by anyone. I'll do what I think is right for the country
— Howard Dean (@GovHowardDean) March 5, 2016
Any questions?
- Life And Times During The Great Depression
The economy of the United States was destroyed almost overnight.
As VisualCapitalist's Jeff Desjardins notes, more than 5,000 banks collapsed, and there were 12 million people out of work in America as factories, banks, and other shops closed.
Many reasons have been supplied by the different economic camps for the cause of the Great Depression, which we reviewed in the first part of this series.
Regardless of the causes, the combination of deflationary pressures and a collapsing economy created one of the most desperate and miserable eras of American history. The resulting aftermath was so bad, that almost every future Central Bank policy would be designed primarily to combat such deflation.
Courtesy of: The Money ProjectThe Deflationary Spiral
After the stock crash, money and consumer confidence was hard to find. Instead of spending money on new things, people hoarded their cash.
Fewer dollars spent meant more drops in demand and prices, which led to defaults, bankruptcies, and layoffs.
As a result of this spiral, the prices for many food items in the U.S. fell by nearly 50% from their pre-WW1 levels.
The price of butter went from pre-crisis levels of $0.21 to $0.13 per pound in 1932. Wool had a drop from $0.24 to $0.10 per pound, and most other goods followed the same price trajectory.
The Effects
Here’s how “real value” is affected in a deflationary environment:
Money
Real value increases: cash is king and gains in real value.Assets (stocks, real estate)
Real value decreases as prices fall.Debt
Debtors owe more in real termsInterest Rates
Real interest rates (nominal rates minus inflation) can rise as inflation is negative, causing unwanted tightening.From Bad to Worse
The Great Depression lasted from 1929 to 1939, which was unprecedented in length for modern history.
To this day, economists disagree on why the Depression lasted so long. Here’s some of their explanations:The New Deal was not enough
Looking back on The Great Depression, John Maynard Keynes believed that monetary policy could only go so far.
The Central Bank could not ultimately push banks to lend, and therefore demand had to be created through fiscal policy. Keynes advocated massive deficit spending to offset markets’ failure to recover.Keynesians such as Paul Krugman believe that Franklin D. Roosevelt’s economic policies through The New Deal were too cautious.
“You can’t push on a string.” – Keynes
The New Deal made things worse
Some economists believe the New Deal had a negative net effect on the recovery.
The National Recovery Administration (NRA) is a primary subject of this criticism. Established in 1933, the goal of the NRA was to lift wages. To do this, it got industry leaders to meet and establish minimum prices and wages for workers.
Cole and Ohanian claim that this essentially created cartels that destroyed economic competition. They calculate that this, along with the aftermath of these policies, accounted for 60% of the weak recovery.
Lastly, one other charge leveled at Roosevelt by his critics is that the sprawling policies from the New Deal ultimately created uncertainty for business leaders, leading to less investment. This lengthened the recovery.
“[The] abandonment of [Roosevelt’s] policies coincided with the strong economic recovery of the 1940s.” – Cole and Ohanian
The Federal Reserve didn’t do enough
Milton Friedman claimed that the Federal Reserve made the wrong policy decision, which extended the length of the Depression.
Between 1929 and 1933, the monetary supply dipped 27%, which decreased aggregate demand and then prices. The Fed’s failure was in not realizing what was happening and not taking corrective action.
“The contraction is…a tragic testimonial to the importance of monetary forces…[D]ifferent and feasible actions by the monetary authorities could have prevented the decline in the stock of money… [This] would have reduced the contraction’s severity and almost as certainly its duration.” – Milton Friedman (and co-author Anna Schwartz)
The Federal Reserve shouldn’t have done anything
Austrian economists believe that the Fed and government both made policy choices that slowed the recovery.
For starters, most agree with Friedman that the Fed’s policy choices at the start of the Depression led to deflation.They also point to the premature tightening that occurred in 1936 and 1937 as a policy failure. During those two years, the Fed not only hiked interest rates, but it also doubled bank-reserve requirements. These policies coincided with Roosevelt’s tax hikes, and a recession occurred within the Depression from 1937 to 1938.
Critics of these policies say that this delayed the recovery by years.
“I agree with Milton Friedman that once the Crash had occurred, the Federal Reserve System pursued a silly deflationary policy. I am not only against inflation but I am also against deflation. So, once again, a badly programmed monetary policy prolonged the depression.” – Friedrich Hayek
Personal Stories from The Great Depression
“One evening when we went down to check on the bank, there were hundreds of people out front yelling and crying and fighting and beating on the locked doors and windows. They had fires built in the street to keep warm and there were people milling around all over the downtown.” – Vane Scott, Ohio
“A friend I worked with said in the Depression he rode the rails and stopped to eat vegetables out of a garden. The owner said he would shoot him if he didn’t stop. My friend said ‘go ahead,’ as he was that hungry. ” – James Randolph, Ohio
“When neighbors couldn’t get a loan from the bank, they’d come to Dad. He sold farm machinery. He never put his money in a bank. He stored it in a strongbox in the fruit cellar, under the apples. He’d loan the neighbors what they needed and they paid him back when they could. If there was a month—especially the winter months—when they couldn’t pay, they’d slaughter a cow or a pig and give him a portion. In the summer it was vegetables: corn, peas, whatever they had growing.” – Gladys Hoffman, New York
“I thought the Depression was going to go on forever. For six or seven years, it didn’t look as though things were getting better. The people in Washington DC said they were, but ask the man on the road? He was hungry and his clothes were ragged and he didn’t have a job. He didn’t think things were picking up.” – Arvel “Sunshine” Pearson, Arkansas
Conclusion
After the 1937-38 Recession, the United States economy began to recover.
The focus of the American public would eventually shift away from the Great Depression, as events in Europe unfolded after Germany’s invasion of Poland in 1939.
- The Brazilian 'Earthquake' & The Empire Of Chaos
Authored by Pepe Escobar, originally posted at SputnikNews.com,
Imagine one of the most admired global political leaders in modern history taken from his apartment at 6 am by armed Brazilian Federal Police agents and forced into an unmarked car to the Sao Paulo airport to be interrogated for almost four hours in connection with a billion dollar corruption scandal involving the giant state oil company Petrobras.
This is the stuff Hollywood is made of. And that was exactly the logic behind the elaborate production.
The public prosecutors of the two-year-old Car Wash investigation maintain there are "elements of proof" implicating Lula in receiving funds — at least 1.1 million euros — from the dodgy kickback scheme involving major Brazilian construction companies connected to Petrobras. Lula might — and the operative word is "might" — have personally profited from it mostly in the form of a ranch (which he does not own), a relatively modest seaside apartment, speaking fees in the global lecture circuit, and donations to his charity.
Lula is the ultimate political animal — on a Bill Clinton level. He had already telegraphed he was waiting for such a gambit, as the Car Wash machine had already arrested dozens of people suspected of embezzling contracts between their companies and Petrobras — to the tune of over $2 billion — to pay for politicians of the Workers' Party (PT), of which Lula was leader.
Lula's name surfaced via the proverbial rascal turned informer, eager to strike a plea bargain. The working hypothesis — there is no smoking gun — is that Lula, when he led Brazil between 2003 and 2010, personally benefited from the corruption scheme with Petrobras at the center, obtaining favors for himself, the PT and the government. Meanwhile, inefficient President Dilma Rousseff is herself under attack engineered via a plea bargain by the former government leader in the Senate.
Lula was questioned in connection to money laundering, corruption and suspected dissimulation of assets. The Hollywood blitz was cleared by federal judge Sergio Moro — who always insists he's been inspired by the Italian judge Antonio di Pietro and the notorious 1990s Mani Pulite ("Clean Hands") investigation.
And here, inevitably, the plot thickens.
Round up the usual media suspects
Moro and the Car Wash prosecutors justified the Hollywood blitz insisting Lula refused to be interrogated. Lula and the PT vehemently insist otherwise.
And yet Car Wash investigators had consistently leaked to mainstream media words to the effect, "We can't just bite Lula. When we get to him, we will swallow him." This would imply, at a minimum, a politicization of justice, the Federal Police and the Public Ministry. And would also imply that the Hollywood blitz may have been supported by a smoking gun. As perception is reality in the frenetic non-stop news cycle, the "news" — instantly global — was that Lula was arrested because he's corrupt.
Yet it gets curioser and curioser when we learn that judge Moro wrote an article in an obscure magazine way back in 2004 (in Portuguese only, titled Considerations about Mani Pulite, CEJ magazine, issue number 26, July/September 2004), where he clearly extols "authoritarian subversion of juridical order to reach specific targets " and using the media to intoxicate the political atmosphere.
All of this serving a very specific agenda, of course. In Italy, right-wingers saw the whole Mani Pulite saga as a nasty judicial over-reach; the left, on the other hand, was ecstatic. The Italian Communist Party (PCI) emerged with clean hands. In Brazil, the target is the left — while the right, at least for the moment, seems to be composed of hymn-singing angels.
The pampered, cocaine-snorting loser candidate of the 2014 Brazilian presidential election, Aecio Neves, for instance, was singled out for corruption by three different accusers — and it all went nowhere, without further investigation. Same with another dodgy scheme involving former president Fernando Henrique Cardoso — the notoriously vainglorious former developmentalist turned neoliberal enforcer.
What Car Wash has already forcefully imprinted across Brazil is the perception that corruption only pays when the accused is a progressive nationalist. As for Washington consensus vassals, they are always angels — mercifully immune from prosecution.
That's happening because Moro and his team are masterfully playing to the hilt Moro's self-described use of the media to intoxicate the political atmosphere — with public opinion serially manipulated even before someone is formally charged with any crime. And yet Moro and his prosecutors' sources are largely farcical, artful dodgers cum serial liars. Why trust their word? Because there are no smoking guns, something even Moro admits.
And that leads us towards the nasty scenario of a made in Brazil media-judicial-police complex possibly hijacking one of the healthiest democracies in the world. And that is supported by a stark fact: the right-wing Brazilian opposition's entire "project" boils down to ruining the economy of the 7th largest global economic power to justify the destruction of Lula as a presidential candidate in 2018.
Elite Plundering Rules
None of the above can be understood by a global audience without some acquaintance with classic Braziliana. Local legend rules that Brazil is not for beginners. Indeed; this is an astonishingly complex society — which essentially descended from a Garden of Eden (before the Portuguese "discovered" it in 1500) to slavery (which still permeates all social relations) to a crucial event in 1808: the arrival of Dom John VI of Portugal (and Emperor of Brazil for life), fleeing Napoleon's invasion, and carrying with him 20,000 people who masterminded the "modern" Brazilian state. "Modern" is an euphemism; history shows the descendants of these 20,000 actually have been raping the country blind for the past 208 years. And few have ever been held accountable.
Traditional Brazilian elites compose one of the most noxious arrogant-ignorant-prejudiced mixes on the planet. "Justice" — and police enforcement — are only used as a weapon when the polls do not favor their agenda.
Brazilian mainstream media owners are an intrinsic part of these elites. Much like the US concentration model, only four families control the media landscape, foremost among them the Marinho family's Globo media empire. I have experienced, from the inside, in detail, how they operate.
Brazil is corrupt to the core — from the comprador elites down to a great deal of the crass "new" elites, which include the PT. The greed and incompetence displayed by an array of PT stalwarts is appalling — a reflection of the lack of quality cadres. Corruption and traffic of influence involving Petrobras, construction companies and politicians is undeniable, even if it pales compared to Goldman Sachs shenanigans or Big Oil and/or Koch Brothers/Sheldon Adelson-style buying/bribing of US politicians.
If this was a no-holds-barred crusade against corruption — which the Car Wash prosecutors insist it is — the right-wing opposition/vassals of the old elites should have been equally exposed in mainstream media. But then the elite-controlled media would simply ignore the prosecutors. And there would be nothing remotely on the scale of the Hollywood blitz, with Lula — pictured as a lowly delinquent — humiliated in front of the whole planet.
Car Wash prosecutors are right; perception is reality. But what if it backfires?
No consumption, no investment, no credit
Brazil couldn't be in a gloomier situation. GDP was down 3.8% last year; probably will be down 3.5% this year. The industrial sector was down 6.2% last year, and the mining sector down 6.6% in the last quarter. The nation is on the way to its worst recession since…1901.
There was no Plan B by the — incompetent — Rousseff administration for the Chinese slowdown in buying Brazil's mineral/agricultural wealth and the overall global slump in commodity prices.
The Central Bank still keeps its benchmark interest rate at a whopping 14.25%. A disastrous Rousseff neoliberal "fiscal adjustment" actually increased the economic crisis. Today Rousseff "governs" — that's a figure of speech — for the banking cartel and the rentiers of Brazilian public debt. Over $120 billion of the government's budget evaporates to pay interest on the public debt.
Inflation is up — now in double-digit territory. Unemployment is at 7.6% — still not bad as many a player across the EU — but rising.
The usual suspects of course are gloating, spinning non-stop how Brazil has become "toxic" for global investors.
Yes, it's bleak. There's no consumption. No investment. No credit. The only way out would be to unlock the political crisis. Maggots in the opposition racket though have a one-track obsession; the impeachment of President Rousseff. Shades of good ol' regime change; for these Wall Street/Empire of Chaos vassals, an economic crisis, fueled by a political crisis, must by all means bring down the elected government of a key BRICS player.
And then, suddenly, out of left field, surges…Lula. The move against him by the Car Wash investigation may yet backfire — badly. He's already on campaign mode for 2018 — although he's not an official candidate, yet. Never underestimate a political animal of his stature.
Brazil is not on the ropes. If reelected, and assuming he could purge the PT from a legion of crooks, Lula could push for a new dynamic. Before the crisis, Brazilian capital was going global — via Petrobras, Embraer, the BNDES (the bank model that inspired the BRICS bank), the construction companies. At the same time, there might be benefits in breaking, at least partially, this oligarchic cartel that control all infrastructure construction in Brazil; think of Chinese companies building the high-speed rail, dams and ports the country badly lacks.
Judge Moro himself has theorized that corruption festers because the Brazilian economy is too closed to the outside world, as India's was until recently. But there's a stark difference between opening up some sectors of the Brazilian economy and let foreign interests tied to the comprador elites plunder the nation's wealth.
So once again, we must go back to the recurrent theme in all major global conflicts.
It's the oil, stupid
For the Empire of Chaos, Brazil has been a major headache since Lula was first elected, in 2002 (for an appraisal of complex US-Brazil relations, check the indispensable work of Moniz Bandeira).
A top priority of the Empire of Chaos is to prevent the emergence of regional powers fueled by abundant natural resources, from oil to strategic minerals. Brazil amply fits the bill. Washington of course feels entitled to "defend" these resources. Thus the need to quash not only regional integration associations such as Mercosur and Unasur but most of all the global reach of the BRICS.
Petrobras used to be a very efficient state company that then doubled as the single operator of the largest oil reserves discovered in the 21st century so far; the pre-salt deposits. Before it became the target of a massive speculative, judicial and media attack, Petrobras used to account for 10% of investment and 18% of Brazilian GDP.
Petrobras found the pre-salt deposits based on its own research and technological innovation applied to exploring oil in deep waters — with no foreign input whatsoever. The beauty is there's no risk; if you drill in this pre-salt layer, you're bound to find oil. No company on the planet would hand this over to the competition.
And yet a notorious right-wing opposition maggot promised Chevron in 2014 to hand over the exploitation of pre-salt mostly to Big Oil. The right-wing opposition is busy altering the juridical regime of pre-salt; it's already been approved in the Senate. And Rousseff is meekly going for it. Couple it to the fact that Rousseff's government did absolutely nothing to buy back Petrobras stock — whose vertiginous fall was deftly engineered by the usual suspects.
The meticulous dismantling of Petrobras, Big Oil eventually profiting from the pre-salt deposits, keeping in check Brazil's global power projection, all this plays beautifully to the interests of the Empire of Chaos. Geopolitically, this goes way beyond the Hollywood blitz and the Car Wash investigation.
It's no coincidence that three major BRICS nations are simultaneously under attack — on myriad levels: Russia, China and Brazil. The concerted strategy by the Masters of the Universe who dictate the rules in the Wall Street/Beltway axis is to undermine by all means the BRICS's collective effort to produce a viable alternative to the global economic/financial system, which for the moment is subjected to casino capitalism. It's unlikely Lula, by himself, will be able to stop them.
- Goldman Is About To Be Stopped Out Of Its Gold Short
Given China's new focus on a basket of currencies, rather than pegging to the dollar alone, today's record-breaking reversal in EUR has sparked a yuuge 300 pips rally in Offshore Yuan (from 6.5270 to 6.4940) pushing to its strongest level since mid-December. At the same time, Gold is accelerating as China opens, pushing up to $1288 – new 13-month highs. Most critical is we are within $5 of Goldman Sachs "short gold" stop at $1291…
Yuan surges to 3-month highs…
As Gold spikes to fresh 13-month highs…
Goldman went short gold on 2/15 at around $1205…
We also maintain our bearish view on gold that has rallied along with the other commodities. Our short gold recommendation (which we opened with a 17% upside, in line with our $1000/toz 12-m forecast) is currently at a c.5% loss, with a stop loss at 7%.
This gold rally was driven by a lack of conviction in divergence in US growth as a weak US dollar has been highly correlated with a higher gold price.
We believe this realignment view of weak global growth is not supported by the US data, which will likely reinforce higher US yields, a stronger US dollar and the return of divergence, particularly should strong US consumer growth dissolve market fears regarding US growth. This in turn will likely put downward pressure on gold prices towards our near-term target of $1100/toz
Tonight we are getting very close to Goldman's stop-loss…
Leaving Goldman clients pensive…
- Establishment Demands "Family Friendly" Debate, Trumps Says "Maybe" – Live Feed
Judging by the progression of the previous 11 GOP debates, tonight's slugfest will involve actual measurement of genitalia, a Hulk-Hogan-esque chair-slamming, and excessive use of four-letter words. As "handy" Trump, "little" Marco, "lyin'" Ted, and "quiet" Kasich step up to the podiums (podia?), the chairman of the Republican Party has declared that he wants tonight's Republican presidential debate to be "more of a G-rated" event than recent showdowns. Good luck with that.
And then there were four…
As AP reports, Republican National Committee Chairman Reince Priebus, the take-no-sides chief fundraiser for the party, has been saying all week that he wants the whatever-it-takes "tone" of past debates to improve on Thursday's debate stage.
On Wednesday, he described on CNN just how, saying he'd like to see "more of a G-rated debate" than "some of the things that have been said in the past."
He said the RNC has spoken to the campaigns and to the sponsors about taking steps to "reduce the temperature" on the debate stage and in the audience.
And before it starts, here's where we stand…
Live Feed (via CNN): no embed, click link for access (no login required)
Alternative Live Feed:
And finally, because no debate is complete without some side-games, here is ABC's freshly updated GOP Debate Bingo Card…
As a reminder, this is how it all started…
- The Coming Collapse Of Saudi Arabia
Submitted by Nick Giambruno via InternationalMan.com,
They met in secret to plan a devastating attack…
Two powerful men, colluding at a palace in the Middle East.
In September 2014, U.S. Secretary of State John Kerry flew to Saudi Arabia. He was there to meet with King Abdullah, the country’s ruler and one of the richest men in the world.
Informed observers say Kerry and Abdullah drew up a plan at this meeting to destroy their common enemies: Russia and Iran.
To carry out the attack, they wouldn’t use fighter jets, tanks and ground troops. They would use a much more powerful weapon…
Oil.
Oil is the world’s most traded commodity. Saudi Arabia is the world’s largest oil exporter. It has arguably more control over the price of oil than any other country does.
Insiders say Saudi Arabia agreed to flood the oil market at this secret meeting. The purpose was to drive down the price of oil. This would hurt Russia’s and Iran’s economies. They both depend heavily on oil sales.
They wanted to hurt Russia for supporting their regional foe, Syrian President Bashar al-Assad. They wanted to hurt Iran for the same reason. Iran is the Saudis’ fierce geopolitical rival in the region.
Their strategy has had some success.
As you can see in the chart below, the price of oil has plummeted over 70% since John Kerry’s secret meeting with King Abdullah in September 2014.
There’s so much conflict in the Middle East—but oil prices are falling.
And despite China’s economic slowdown…it still imported more oil in 2015 than in 2014. China is the world’s number two oil consumer behind the U.S.
Turmoil plus demand says oil should be going up, not down. But the mystery is explained by the Saudis’ oil war and their strategy of flooding the market to bankrupt competitors.
Saudi Arabia’s Other Target
The Saudis have also declared war on the U.S. shale oil industry.
In the 1990s, the U.S. imported close to 25% of its oil from Saudi Arabia. Today—because of high U.S. shale oil production—we import only 5%.
By keeping the market saturated with oil, the Saudis are driving down the price. They hope to drive it down low enough and long enough to bankrupt the shale industry…since shale oil costs more than Saudi oil to produce.
This would knock out a major competitor and let the Saudis regain lost market share.
But economic warfare doesn’t always go according to plan. I think the Saudis made a colossal mistake…
Impaled on Their Own Sword
I think the Saudis have overplayed their hand…big time.
Oil makes up 90% of Saudi government revenue. So the price drop has been very painful. They’re bleeding through their reserves.
The market is putting more pressure on their currency peg than at any time in its history.
For over 30 years, Saudi Arabia has pegged its currency at 3.75 riyals per U.S. dollar. To maintain this, it needs a large stash of U.S. dollars. With its historically large reserves, this has never been a problem.
But now, the Saudi budget is under serious pressure. The government is only staying afloat by draining its foreign exchange reserves. This threatens Saudi Arabia’s ability to support its currency peg.
If the currency peg breaks—which is exactly what the current market expects—the riyal would be devalued. This would increase the cost of living for Saudis across the board.
It would also increase social unrest.
The Saudis are also losing billions underwriting foolhardy wars in Yemen and Syria.
The Saudis thought they could support armed Syrian rebels and topple the Assad government in a matter of months. They figured Assad would fall just as easily as Gadhafi did in Libya in 2011. It was a gross miscalculation.
There’s also the Saudi war in Yemen, Saudi Arabia’s southern neighbor.
The Saudis launched the war in March 2015. They wanted to reinstate a Saudi-friendly government. The Saudis thought the intervention would last a few months, then they’d declare “mission accomplished” and go home. That’s not what happened.
The political and economic stars are aligning against the Saudis. It’s their most vulnerable moment since the kingdom was founded in 1932.
Crisis Investing 101
The Saudis are having some success. In the past year, at least 67 U.S. oil companies have filed for bankruptcy. Analysts estimate as many as 150 could follow. The shale oil industry is in “survival mode.”
And the crisis in the oil market could spread. That’s because many banks made big loans to these distressed shale oil companies. A wave of bankruptcies means those loans could go bad, which would be a huge threat to those banks.
It has the potential to trigger another meltdown in the financial system. The warning signs are there.
I wouldn’t own any bank that has big exposure to risky shale plays…nor keep my life savings there.
The Saudis have damaged the U.S. shale oil industry. And they’ll continue to cause more damage. But they won’t bankrupt every producer.
The shale industry has more staying power than Saudi Arabia. Some producers now say they’re profitable with $40 oil. And their pace of innovation will drive that even lower. The industry will survive.
All the Saudis have done is create an existential crisis for themselves.
If the Saudis don’t stop flooding the market—and there are no signs they will—they won’t be shooting themselves in the foot… but in the head. Saudi Arabia will either collapse or surrender—and stop flooding the market.
Either way, oil will eventually go a lot higher.
- The Next Startup Fraud? Jessica Alba's $1.7 Billion "Honest Company"
Back in the summer of 2014, roughly a year and a half before the second bubble of profitless, “story”, aka “tech”, companies had burst, we wrote in dismay, that “the true indicator of just how bubbly the second coming of the dot com era has become comes courtesy of none other than Jessica Alba’s, yes the actress, own startup: a company launched in 2012 and which makes “non-toxic” diapers (as opposed to toxic diapers?), called the Honest Co., has raised $70 million at a valuation just shy of $1 billion in preparation for an IPO.”
What was the company’s business model? Simple: one part Amazon monthly subscription purchase, and one part promise that its products are clean and don’t contain what it says are harsh chemicals found in many mainstream products; apparently that is a critical deciding factor for today’s largely unemployed Millennial generation:
“since launching in 2012 with its non-toxic diapers and other natural baby products, the California-based startup has grown quickly by blending its environmentally sensitive products with a social mission. Annual revenue is tracking to hit north of $150 million in 2014, or three times the revenue of 2013. Roughly 80% of Honest revenue is from customers who subscribe to a monthly service delivering diapers and other consumable products on a recurring basis.”
All this happened at a time when frauds such as Theranos were being valued in the billions, so in retrospect the “Honest Company’s” idiotic valuation may be explainable.
What isn’t as easily explained is that since we profiled Alba’s “Honest Company“, its valuation has grown by another 70%, and according to the WSJ it is now $1.7 billion with total funding raised more than $200 million “thanks to its marketing of cleaning supplies, diapers and other consumer products that it says are safer and more ecologically friendly than other brands.”
But what Alba herself will have a very difficult time explaining is why, just like in the case of Theranos, her company it not only grossly misnamed, but may also be another fraud, because according to a just released WSJ expose, “one of the primary ingredients Honest tells consumers to avoid is a cleaning agent called sodium lauryl sulfate, or SLS, which can be found in everyday household items from Colgate toothpaste to Tide detergent and Honest says can irritate skin. The company lists SLS first in the “Honestly free of” label of verboten ingredients it puts on bottles of its laundry detergent, one of Honest’s first and most popular products. But two independent lab tests commissioned by The Wall Street Journal determined Honest’s liquid laundry detergent contains SLS.“
“Our findings support that there is a significant amount of sodium lauryl sulfate” in Honest’s detergent, said Barbara Pavan, a chemist at one of the labs, Impact Analytical. Another lab, Chemir, a division of EAG Inc., said its test for SLS found about the same concentration as Tide, which is made by P&G. “It was not a trace amount,” said Matthew Hynes, a chemist at Chemir who conducted the test.
In Alba’s 2013 book, “The Honest Life” she lists SLS as a “toxin” that consumers should avoid. She started Santa Monica, Calif.-based Honest in 2011 after she said she had an allergic reaction to a popular brand of laundry detergent. According to the WSJ, she has no problem actually including it in her product, comparble to the Theranos’ bezzle, in which its blood test was not only inaccurate, but had been superceded by products by its biggest competitors.
And just like Theranos, “Honest” disputes the labs’ findings and says its own testing found no SLS in its products.
“We do not make our products with sodium lauryl sulfate,” said Kevin Ewell, the company’s research and development manager.
And just as the WSJ exposed Theranos, now it has set its sight on the one company that years ago couldn’t pass the smell test, and now stinks like a rotting venture capital corpse.
The blame game begins:
Honest said its manufacturing partners and suppliers have provided assurances that its products don’t contain SLS beyond possible trace amounts. Honest provided the Journal with a document it said was from its detergent manufacturer, Earth Friendly Products LLC, that stated there was zero “SLS content” in the product. Earth Friendly in turn said the document came from its own chemical supplier, a company called Trichromatic West Inc., which it relied on to test and certify that there was no SLS.
Trichromatic told the Journal the certificate wasn’t based on any testing and there was a “misunderstanding” with the detergent maker. It said the “SLS content” was listed as zero because it didn’t add any SLS to the material it provided to Earth Friendly and “there would be no reason to test specifically for SLS.” It said the product in question “was fairly and honestly represented” to its customer.
Honest said it didn’t deal directly with Trichromatic and declined to comment further on the certificate. Earth Friendly reiterated that it relied on Trichromatic to test the ingredient.
Honest also disagreed with the methods used by the Journal’s labs, and said the labs tested against a sample of SLS that isn’t the type used in consumer products. Both Chemir and Impact Analytical said they stand by their test results, used the most precise method for quantifying SLS in a consumer laundry detergent and followed standard scientific guidelines.
Then there is the question of what “Honest” uses instead of SLS: the WSJ reports that Honest supposedly prefers an alternative called sodium coco sulfate, or SCS, which the company says is less irritating and a different compound from SLS. “We have evidence that our laundry detergent contains SCS, not SLS, and any contention to the contrary is wrong.” The problem is that SCS contains SLS, which means fundamentally the fraud at the Honest company, one which it uses to pray on naive and impressionable young moths, is one of cheap marketing alternatives.
Rival Seventh Generation lists SLS as an ingredient in its laundry detergent, including a variety made for sensitive skin, and lists sodium coco sulfate as an ingredient in its hand wash. It says both cleaning agents have the potential to irritate skin but are safe when products are formulated properly. “In all practicality they act and behave as the same chemical in consumer products,” said Tim Fowler, Seventh Generation’s senior vice president of research and development.
Not for Alba, who preys on the wallets of the uninformed with false advertising.
Then there is the real-time alteration of the company’s public materials during the WSJ’s investigation into the company:
During the Journal’s reporting, Honest made changes to wording on its website, including revising the description of its “Honestly Free Guarantee.” It used to say its products are “Honestly free of” dozens of ingredients, including SLS. Now it says the products are “Honestly made without” those ingredients. Honest also removed claims that other companies use “risky” or “toxic” ingredients that it doesn’t use.
When asked about the website changes, Honest co-founder and Chief Product Officer Christopher Gavigan said they were to help clarify, educate and accurately represent the company’s position. He said in a December meeting that Honest was also changing its product labels to match its website and had no plans to reformulate its detergent.
Alba, who is Honest’s chief creative officer in addition to co-founder, declined to be interviewed for the WSJ article. Just like Elizabeth Holmes, when the WSJ demolished the skyhigh valuation of Theranos. Her attorney Bert Fields said, “Jessica Alba and the folks at Honest truly believe that their detergent is free of non-trace SLS and have been assured of that by their suppliers.”
Sadly that too is a lie.
As is the gratuitous false marketing of this post with photos of the “Honest” CEO. Spoiler alert: they too are not genuine and contain an abnormal dose of Photoshop.
- How Vancouver Is Being Sold To The Chinese: The Illegal Dark Side Behind The Real Estate Bubble
One month ago, when describing the latest in an endless series of Vancouver real estate horror stories, in this case an abandoned, rotting home (which is currently listed for a modest $7.2 million), we explained the simple money-laundering dynamic involving Chinese “investors” as follows.
- Chinese investors smuggle out millions in embezzled cash, hot money or perfectly legal funds, bypassing the $50,000/year limit in legal capital outflows.
- They make “all cash” purchases, usually sight unseen, using third parties intermediaries to preserve their anonymity, or directly in person, in cities like Vancouver, New York, London or San Francisco.
- The house becomes a new “Swiss bank account”, providing the promise of an anonymous store of value and retaining the cash equivalent value of the original capital outflow.
We also explained that hundreds if not thousands of Vancouver houses, have become a part of the new normal Swiss bank account: “a store of wealth to Chinese investors eager to park “hot money” outside of their native country, and bidding up any Canadian real estate they could get their hands on.”
This realization has now fully filtered down to the local population, and as the National Post writes in its latest troubling look at the “dark side” of Vancouver’s real estate market, it cites wholesaler Amanda who says that “Vancouver seems to be evolving from a residential city into almost like a lockbox for money… but I have to live among the empty houses. I’m a resident, not just an investor.”
The Post article, however, is not about the use of Vancouver (or NYC, or SF, or London) real estate as the end target of China’s hot money outflows – by now most are aware what’s going on. It focuses, instead, on those who make the wholesale selling of Vancouver real estate to Chinese tycoons who are bidding up real estate in this western Canadian city to a point where virtually no domestic buyer can afford it, and specifically the job that unlicensed “wholesalers” do in spurring and accelerating what is currently the world’s biggest housing bubble.
A bubble which, the wholesalers themselves admit, will inevitably crash in spectacular fashion.
This is the of about Amanda, who was profiled yesterday in a National Post article showing how a “Former ‘wholesaler’ reveals hidden dark side of Vancouver’s red-hot real estate market.” Amanda quit her job allegely for moral reasons; we are confident 10 people promptly filled her shoes.
* * *
Vancouver’s real estate market has been very good to Amanda. She’s not a licensed realtor, but buying and selling property is her full-time job.
She started about eight years ago as an unlicensed “wholesaler” in Vancouver.
She would approach homeowners and make unsolicited offers for private cash deals. Amanda made a 10-per-cent fee on each purchase by immediately assigning the contract to a background investor. It is seen as the lowest job in property investment, but it is low risk and very profitable. Amanda has done so well that she now owns two homes in Vancouver and develops property in the U.S.
Unlicensed wholesaling is an illicit and predatory business that is quickly growing in Metro Vancouver because enforcement is virtually non-existent.
It’s similar to a tactic currently being examined by B.C. real estate authorities known as “assignment flipping,” which involves legally but secretly trading homes on paper to enrich realtors and circles of investors.
However, unlicensed wholesaling is completely unregulated. Amanda estimates hundreds of wholesalers are scouring Metro Vancouver’s never-hotter speculative market — not including the realtors who are secretly wholesaling for themselves.
Amanda decided to step away from the easy money for moral reasons.
She’s most concerned that wholesalers are targeting B.C.’s vulnerable seniors who don’t understand the value of their old homes. She is also worried about offshore money being laundered, and the resulting vacant homes.
Because wholesalers are unlicensed, they have no obligation to identify their background investors or reveal the source of funds to Canadian authorities who fight money laundering.
“Vancouver seems to be evolving from a residential city into almost like a lockbox for money,” Amanda said. “But I have to live among the empty houses. I’m a resident, not just an investor.”
Amanda said she believes that unethical and ignorant investors are driving B.C.’s housing market at full speed towards a crash. For these reasons, and with the condition that we not use her real name, she came forward to reveal how wholesalers operate.
The calling cards of wholesalers — hand-written flyers offering homeowners “confidential” and “discreet” cash sales — started flooding westside Vancouver homes over the past 18 months. With the dramatic surge in home prices, wholesalers now are spreading into neighbourhoods across Metro Vancouver and Vancouver Island.
In eight years Amanda has never seen the market hotter than it is right now, and her colleagues are urging her to start wholesaling again.
Notices offering cash for homes are the calling card of unlicensed wholesalers
“A lot of money is leaving China, so now every second day people are asking if I can go out and find places for them. They have tons of money,” Amanda said. “They are basically brokering business deals specifically for Chinese investors.”
She said the mechanics of wholesaling schemes work like this:
The investor behind the unlicensed broker targets a block, often with older homes, and gives the wholesaler cash in a legal trust.
The wholesaler persuades a homeowner to sell, offering immediate cash, no subjects, no home inspections, and savings on realtor fees.
While the wholesaler claims to represent one buyer, or in some cases to be the buyer, Amanda said three or four contract flippers are often already lined up, with an end-buyer from China who will eventually take title in most cases. These unlicensed broker deals appear to be illegal.
A veteran Vancouver realtor confirmed these types of deals. The realtors we spoke to have been asked by their brokerages not to comment to reporters, so we agreed to withhold their names.
“I work with some non-licensed flippers,” one said. “They walk on to the lawn of an older house, see the owner and yell, ‘We’re not realtors!’ The owner invites them in, thinks they’re saving a commission — which they are — and loses big-time on the actual sale. I’ve seen it first-hand.”
According to flyers obtained from across Metro Vancouver and interviews with homeowners who were solicited, wholesalers often say they have Chinese buyers willing to pay a premium for quick sales.
Homeowners in Richmond, Vancouver’s east and west sides, Surrey, Langley, Coquitlam, Burnaby, White Rock, Delta and North Vancouver confirmed such offers in interviews.
One resident of Vancouver’s west side Dunbar area said she was annoyed by wholesalers constantly soliciting her, and a man in Surrey said his elderly mother was bothered by wholesalers.
“A guy walked up and he offered $700,000 cash within a day, and he said I would save on the realtor fees,” said Zack Flegel, who lives near 119th Street and Scott Road in Delta.
“He also says he will give me $100,000 cash and move me into a $600,000 house. He said he has a bunch of properties. He was talking about my house like it was a trading card. We don’t have abandoned homes yet like Vancouver, but this is how it happens, right?”
After the offer is accepted, the wholesaler assigns the purchase contract to the investor for a 10-per-cent markup, Amanda said. But some wholesalers aren’t content with making $100,000 or more per sale.
“People were going in and offering, for example, an 80-year-old widow, she bought the house for $70,000 and it is now worth $800,000 and they were offering her $200,000,” Amanda said. “So they are making $300,000 or $400,000 (after assigning the contract).
“And you are socializing with other wholesalers, and it is hard to hear them say, ‘Oh this whole street is filled with seniors whose partners are dropping off like flies.’ Or, ‘They just want to get rid of it, they have no clue what their house is worth, and it’s the whole street.’”
Amanda said her father died recently. She pictured her mother being targeted by wholesalers and resolved never to play that role again.
“There are elements of this that are elder abuse, absolutely.”
In a recent story that deals with implications of rising property taxes rather than predatory real estate practices, the Financial Post reported that, especially in Vancouver and Toronto’s scorching markets, “it’s not uncommon for some Canadian seniors to be unaware of the value of their location.”
B.C.’s Superintendent of Real Estate, Carolyn Rogers, conceded the potential for elder abuse as reported by Amanda.
“We would welcome an opportunity to speak to (Amanda) and assuming she gives us the same information, we would open a file,” Rogers said. “The conditions in the Vancouver market right now present risks … and seniors could be an example of that.”
It is illegal for wholesalers to privately buy and sell property for investors without a licence, Rogers said. She said her officers have approached some wholesalers recently and asked them to become licensed or cease their activities.
A review of the superintendent’s website shows no enforcement orders, fines or consumer alerts filed in connection to unlicensed wholesalers making cash deals and flipping contracts.
Amanda said that over the past year she learned of new levels of “layering and complexity that I didn’t see five years ago” in wholesaling and assignment-clause flipping.
“Five years ago I didn’t see realtors wholesaling, and I didn’t see people calling me so that I would get them a property and not assign the property to them, but work as a ‘partner’ and I would attach a 10-per-cent fee.
“And then they would assign it to their boss and attach 10 per cent, and then that person’s boss would attach 10 per cent. I’ve been watching over the last month, and it has got astounding.”
Amanda said some wholesale deals involve only unlicensed brokers and pools of offshore cash organized informally, and some appear to involve realtors and brokerages hiding behind unlicensed wholesalers.
“I’ve seen it from the back end. We have friends in the British Properties and the realtor said he will buy their property for $2 million. And then six months later it was sold for $3.5 million. When I’m looking at that, it is a pretty clear wholesale deal.”
Darren Gibb, spokesman for Canada’s anti-money-laundering agency, FINTRAC, confirmed that unlicensed property buyers have no obligation to report the identity or sources of funds of the buyers they represent.
However, Gibb said, if realtors are involved in “assignment flipping” it is mandatory that they and unlicensed assistants make efforts to identify every assignment-clause buyer and their sources of funds.
Vancouver realtors confirmed that money laundering is a big concern in assignment-flipping deals, whether organized by an unlicensed wholesaler or a realtor.
“When you are a non-realtor broker you no longer have to play by any rules,” one Vancouver realtor said.
“There is a role for assignments, but nobody is asking where the money came from. We are creating vehicles for money laundering.”
“No person in their right mind wants to buy your house once, and sell it three more times in a small window of opportunity, unless they have a whole pool of people lined up trying to get their money out of the country. The higher the prices go, these vehicles to get money out of the country get bigger and bigger.”
NDP MLA David Eby and Green MLA Andrew Weaver commented that allegations of unlicensed brokers targeting seniors and participating in potential money-laundering schemes call for direct action from Victoria and independent investigation, because these concerns fall outside the jurisdiction of the B.C. Real Estate Council and its current ongoing review of real estate practices.
“It is very troubling to me,” Eby said, “that not only do we have a layer of real estate agents that are acting improperly and violating the rules, but there might be this additional layer who are not bound by any rule and have explicitly avoided becoming agents for that reason.
“This unscrupulous behaviour is targeting seniors who need money for retirement. What kind of society is that?” Weaver said.
- Japanese Government Bond Futures Are Flash-Crashing (Again)
Remember that once-in-a-lifetime, "don't worry there's plenty of liquidity" flash-crash in japanese Government Bond futures on Tuesday night (Wednesday morning Japan time)… well it happened again…
JGB Futures to be halted any minute…
And so the market chaos even among the "safest" of securities, the result of central bank intervention, continues. Bloomberg's Richard Breslow summarized it best:
Even with QEs creating what look an awful lot like bubbles, it’s been fair to say, those distortions reflected the reaction function of how central bankers interpreted the state of play. Yield levels, let alone negative rates, and volatility are making these guideposts increasingly questionable.
If you look at the yield curves of much of the world, you’d be hard pressed not to conclude we are very much still experiencing a severe global recession. Central bankers may strongly disagree, yet Japanese 10-year JGBs haven’t seen 2% this century. German bunds have backed up to 21bps. Both are likely to increase QE. The U.S. is tightening (?) and 10- year yields are still down 42bps on the year
The Fed wants to raise rates but insists on re-investing the take on its massive portfolio. They act like fund managers protecting their AUM.
The Osaka Stock Exchange had to invoke circuit breakers today on the March JGB future for excessive volatility. Buying panic yesterday to front-run today’s QE buying led to panic selling today into BOJ bids 22 bps through Monday’s close. Oh, and did I mention, ahead of an auction tomorrow. The take-away is mayhem, not analysis.
And now we look forward to an even greater surge in volatility first ahead of the Fed and BOJ next week, who – just like everyone else – have no idea what is going on any more.
Tonight's debate comes just five days ahead of the next week's "Super Tuesday 3," when there are more than 350 delegates up for grabs, including in winner-take-all contests in Florida and Ohio.
Some wonder just who it is that is selling JGBs so aggressively and in such entirely economically irrational a manner? Well we got hints who has been dumping Bunds from Goldman recently, which makes us think, as MNI 'hints' at, if The BoJ is not trying to "Goldilocks it"…
BOJ officials recognize that any upward pressure on JGB yields stemming from a brighter view on economic growth and inflation would be impeded by the BOJ's massive purchases of JGBs, which also have been restricting risk premiums.
But some of them worry that the drop in the 10-year yield into negative territory may reflect undue pessimism by market players.
Just how much the negative yields are influenced by that pessimism and how much by the BOJ bond buying can't be determined.
At this point it is also unclear how a gradual return to a steeper yield curve will happen, although BOJ officials must assume it will. It may be that changing sentiment in the market will be enough to overpower the other factors and begin to push up yields.
If it isn't, things may become much more complicated, since it would then take some move toward an unwinding of the BOJ's bond-buying policy to shift yields, and that would bring officials uncomfortably close to a knife edge of trying to edge up yields without making them spike.
In other words – rates not too low (or signals pessimism for growth) and not too high (because the entire fiscal balance will implode) – good luck centrally planning that.
- Why Trump Haters Really Hate Trump
Submitted by Martin Armstrong via ArmstrongEconomics.com,
It’s not the hair.
Or the bad manners.
Or the “beautiful” wall he says he’ll build.
There’s a different, more subtle reason why the Republican establishment, donor class, political operatives, and the news media in general hate Donald Trump.
The reason can be found in a New York Times best selling business book, Stacking The Deck, by Wharton professor David Pottruck.
Pottruck, the Charles Schwab CEO who took the genial brokerage house online and into the big time, says that organizations hate change. Hate it with a PASSION!
That’s because when there’s a new way of doing things, a new way of solving problems, a new way of relating to everything, they feel threatened as a deep personal-loss.
Change renders meaningless the value of their hard-won experience and know-how. In politics, it may means family member lose their cushy jobs and perks.
Student loans of government employees get automatically paid off by government – TAX FREE.
Those in government have done things one way forever. Change is NOT FAIR to them
Everything they have done to line their pockets is threatened. The rules of the game may no longer apply.
So they dig in their heels and will do whatever it takes to resist change.
They resist perpetually until forced otherwise.
They subvert any process that would lead to change.Until they lose, it becomes open warfare against the people to sustain the establishment and its perks.
And so it is with Donald Trump. Like him or not, he has completely rewritten the rules of Presidential politics.
He bypasses the media, taking his message, raw and unfiltered, to the millions of people who follow him on Twitter.
The party establishment went from underestimating him and laughing at him to fearing him breaking out in night sweats.
They fear all power and their relevance will vanish into thing air.
Donors gave Jeb Bush $120 million and he came in dead last.
The money, like Jeb, is gone and it could not save their fiefdom.
Now wealthy donors have a choice. Oppose Trump and he wins and they are out in the cold. Understand there is a change in the wind and shift sides to the people.
How ironic. It took a billionaire to neuter the billionaire donor class.
Most of the media hates Trump to the core and dislike the fact they are no longer able to play kingmaker losing their power fearing they will be irrelevant with the internet displacing them.
The political class have lost the power to rule behind the curtain from paid operatives and cronies who cannot transition to the new world where the old rules of campaigning don’t apply.
Trump has spent more on hats than he has on polls so the pollsters also have lost their importance.
Diplomats worldwide are running scared because Trump will renegotiate everything from a business standpoint that cannot be bought like Hillary & her foundation.
The handwringing, the dire predictions of doom, and the wailing and gnashing of teeth have little to do with Donald’s positions, but their loss of power.
They complain Trump is bringing in new voters who are not Republican. And this is bad?
The Trump threat isn’t to the Constitution, to America’s standing in the world, or even to Republican Congressional candidates, it is to the establishment.
If you think Trump’s supporters are angry about the way the government and the business world colluded, you are right. The establishment fails to appreciate the anger.
They’re just furious. Even if Trump fails to win, there will be more in the wings. He is inspiring a change and he doesn’t even understand how profound.
- Ben Carson To Endorse Donald Trump On Friday Morning
If there was still any doubt whether the Trump juggernaut can be stopped before, if not so much after the Michigan primary earlier this week, it can be laid to rest now because shortly after Trump received the endorsement of Chris Christie, the real estate mogul has now secured his second highest profile backing, that of Ben Carson who according to the Washington Post will endorse Trump officially on Friday morning.
According to WaPo, the endorsement “was finalized Thursday morning when Carson met with Trump at Mar-a-Lago, the luxury club owned by the Republican front-runner, the people said. The sources requested anonymity to discuss private conversations.”
Friday’s announcement will also take place at Mar-a-Lago in Palm Beach, Fla., where the onetime rivals will appear alongside one another at a news conference.
The endorsement comes at a critical time for Trump, who will almost certainly become undefeatable if he wins the upcoming Florida and Michigan “winner take all” primaries.
As WaPo adds, the support of Carson, a famed retired neurosurgeon and author, will likely give Trump a boost with GOP base voters and evangelicals, who embraced Carson’s campaign in its early days and fueled his brief rise to the top of Republican primary polls.
Carson’s decision may surprise some of his backers since Trump made blistering critiques over the past year of stories from Carson’s past. But according to people close to him, Carson has gradually come to see Trump as the GOP’s best chance of winning a general election and turning out droves of disengaged voters.
The endorsement will probably not come as a big surprise, because earlier today on Fox News radio, Carson hinted that he is “certainly leaning” toward a candidate and spoke highly of Trump.
“There’s two Donald Trumps. There’s the Donald Trump that you see on television and who gets out in front of big audiences, and there’s the Donald Trump behind the scenes,” he said. “They’re not the same person. One’s very much and entertainer, and one is actually a thinking individual.”
And now we await tonight’s seemingly token GOP debate, which just like last time, will showcase Trump knowing he has a critical endorsement in the bag, and will surely crush his already demoralized competitors.
- The Incredible Story Of How Hackers Stole $100 Million From The New York Fed
The story of the theft of $100 million from the Bangladesh central bank – by way of the New York Federal Reserve – is getting more fascinating by the day.
As we reported previously, on February 5, Bill Dudley’s New York Fed was allegedly “penetrated” when “hackers” (of supposed Chinese origin) stole $100 million from accounts belonging to the Bangladesh central bank. The money was then channeled to the Philippines where it was sold on the black market and funneled to “local casinos” (to quote AFP). After the casino laundering, it was sent back to the same black market FX broker who promptly moved it to “overseas accounts within days.”
That was the fund flow in a nutshell.
As we explained, the whole situation was quite embarrassing for the NY Fed, because what happened is that someone in the Philippines requested $100 million through SWIFT from Bangladesh’s FX reserves, and the Fed complied, without any alarm bells going off at the NY Fed’s middle or back office.
“Some 250 central banks, governments, and other institutions have foreign accounts at the New York Fed, which is near the centre of the global financial system,” Reuters notes. “The accounts hold mostly U.S. Treasuries and agency debt, and requests for funds arrive and are authenticated by a so-called SWIFT network that connects banks.”
Well, as it turns out, Bangladesh doesn’t agree that the Fed isn’t ultimately culpable. “We kept money with the Federal Reserve Bank and irregularities must be with the people who handle the funds there,” Finance Minister Abul Maal Abdul Muhith said on Wednesday. “It can’t be that they don’t have any responsibility,” he said, incredulous.
Actually, Muhith, the New York Fed under former Goldmanite Bill Dudley taking zero responsibility for enabling domestic and global crime is precisely what it excels at.
Commuters pass by the front of the Bangladesh central bank building in Dhaka March 8, 2016.
* * *
But what really happened?
As it turns out there is much more to the story, and as Bloomberg reports today now that this incredible story is finally making the mainstream, there is everything from casinos, to money laundering and ultimately a scheme to steal $1 billion from the Bangladeshi central bank. In fact, the story is shaping up to be “one of the biggest documented cases of potential money laundering in the Philippines. It risks setting back the Southeast Asian nation’s efforts to stamp out the use of the country to clean cash, and tarnishing the legacy of President Benigno Aquino as elections loom in May.”
And yes, it does appear that hackers managed to bypass the Fed’s firewall:
“Even as banks continue to harden their defenses against such sabotage, hackers too have upped their game to breach servers by utilizing both technical skills and rogue elements within the financial institutions,” said Sameer Patil, an associate fellow at Gateway House in Mumbai who specializes in terrorism and national security.
* * *
The story begins in Bangladesh, a country of about 170 million people that’s recently found itself with record foreign reserves thanks to a low wage-fueled export boom and inward remittances. Some of those reserves were held in an account at the Federal Reserve Bank of New York.
Finance Minister Abul Maal Abdul Muhith this week accused the Fed of “irregularities” that led to the unauthorized transfer of $100 million from the account. The Bangladesh central bank said the funds had been stolen by hackers and that some had been traced to the Philippines.
As reported previously, a Bangladesh central bank official who is part of a panel investigating the disappearance of the funds said Wednesday that a separate transfer of $870 million had been blocked by the Fed, something the Fed refused to comment on. It does not, however, explain why $100 million was released.
Essentially the dispute is about whether the Fed went through the right procedure when it received transfer orders.
Naturally, the Fed’s story is that it did nothing wrong. Bloomberg writes that according to a Fed spokeswoman, instructions to make the payments from the central bank’s account followed protocol and were authenticated by the SWIFT codes system. There were no signs the Fed’s systems were hacked, she said.
The problem is that the counterparty on the other side of the SWIFT order was not who the Fed thought, and what should have set off red lights is that the recipients was not the government of the Philippines but three casinos!
On the other hand, Bangladesh is quite – understandably – furious: a local official said the Fed should’ve checked the payment orders with the central bank to ensure they were authentic, even if they used the correct SWIFT codes. The official also said there are plans to take legal action against the Fed to retrieve missing funds.
Aquino spokesman Sonny Coloma said he had no information on reports that funds from the Bangladesh central bank reached the Philippines. The case is being handled by the AMLC, an independent body, Coloma said. Bangko Sentral ng Pilipinas Governor Amando Tetangco, who heads the AMLC, did not reply to mobile-phone messages seeking comment.
If at this point flashing light bulbs are going off above the heads of some of our more industrious readers, we can understand why: after all if a fake SWIFT money order is all it takes to have the Fed send you $100 million dollars then…
* * *
Separately, a Reuters report digs into the details of the SWIFT wire requests: it notes that the hackers breached Bangladesh Bank’s systems and stole its credentials for payment transfers, two senior officials at the bank said. They then bombarded the Federal Reserve Bank of New York with nearly three dozen requests to move money from the Bangladesh Bank’s account there to entities in the Philippines and Sri Lanka, entities which as will be revealed shortly were… casinos.
Four requests to transfer a total of about $81 million to the Philippines went through, but a fifth, for $20 million, to a Sri Lankan non-profit organization was held up because the hackers misspelled the name of the NGO, Shalika Foundation.
Hackers misspelled “foundation” in the NGO’s name as “fandation”, prompting a routing bank, Deutsche Bank, to seek clarification from the Bangladesh central bank, which stopped the transaction, one of the officials said.
There is no NGO under the name of Shalika Foundation in the list of registered Sri Lankan non-profits. Reuters could not immediately find contact information for the organization.
Luckily, the Fed stopped some of the $1 billion in total requested funds. The unusually high number of payment instructions and the transfer requests to private entities – as opposed to other banks – raised suspicions at the Fed, which also alerted the Bangladeshis, the officials said. The details of how the hacking came to light and was stopped before it did more damage have not been previously reported. Bangladesh Bank has billions of dollars in a current account with the Fed, which it uses for international settlements.
The transactions that were stopped totaled $850-$870 million, one of the officials said. At least$80 million made it through without a glitch.
* * *
Meanwhile, back in the Philippines, the gaming regulator said it is investigating reports that as much as $100 million in suspicious funds were remitted to the bank accounts of three casinos it didn’t identify.
The Philippine Daily Inquirer has led reporting on the theft. It wrote last month that cash may have entered the Philippines via the Jupiter Street, Makati City, branch of Rizal Commercial Banking Corp. The money was converted into pesos and deposited in the account of an unidentified Chinese-Filipino businessman who runs a business flying high net worth gamblers to the Philippines.
The funds were used to buy casino chips or pay for losses at venues including Bloomberry Resorts Corp.’s Solaire Resort & Casino and Melco Crown Philippines Resort Corp.’s City of Dreams Manila, according to the paper. There was no suggestion in the report the banks or casinos named were complicit with any improper movement of funds.
In other words, the Fed was funding gamblers, only these were located in Philippine casinos, not in the financial district. Ironically, that’s precisely what the Fed does, only it normally operates with gamblers operating out of Manhattan’s financial district.
Bloomberry Resorts investor relations director Leo Venezuela and City of Dreams Manila Vice President Charisse Chuidian didn’t reply to calls and phone messages.
And then, once the “gamblers” were done having their fun laundering freshly received Fed money, they moved the cash offshore: funds were later dispatched into accounts outside the Philippines, the paper said, including to Hong Kong. The Hong Kong Monetary Authority declined to comment, as did the Hong Kong police. The Inquirer separately reported the head of the Rizal branch where the transactions occurred had made a statement that top bank officials were aware of the transactions “at every stage.”
Were the banks in on this unprecedented theft? Probably, although it will be nearly impossible to prove.
Rizal’s shareholders “are fully committed to comply with all banking laws and regulations, in particular those on money laundering,” Vice Chairman Cesar E.A. Virata said in a statement Wednesday. In a separate statement, the bank’s Chief Executive Officer Lorenzo Tan condemned “any insinuations that the top management of the bank knew of and tolerated alleged money laundering activities in one branch.”
* * *
The exact amount stolen from Bangladesh is still not exactly clear, as is what happens next in the dispute with the Fed.
While Muhith said the Fed was responsible for at least $100 million, another Bangladeshi central bank official who asked not to be identified said $20 million of a $101 million total had been recovered from an account held in Sri Lanka, leaving $81 million unaccounted for. That figure matches the amount Rizal’s Virata said the bank was investigating.
What we would like to know, is whether this is merely the Fed’s way of testing its level of preparedness for the moment it has to wire helicopter money around the globe, in lieu of using drone delivery of cash, especially if cash has been banned previously as so many “famous economists” demand, clearly unaware that cash has to be present when in the last ditch step to boost inflation, the Fed has no choice but to hand out physical money to every willing recipient.
For a few lucky recipients in the Philippines, it already worked out.
- UK Inquiry Finds Gulf "Allies" Sustaining ISIS In The Face Of Oil Price Collapse
Submitted by Mike Krieger via Liberty Blitzkrieg blog,
Although the extent to which oil-related funding has sustained ISIS over the past couple of years is highly contested, it’s undeniable that the collapse in prices has had a negative cash flow impact on the terror threat du jour. As such, how’s the group sustaining itself in the fact of such a major cash crunch? According to a UK inquiry, we can thank donations from America’s Persian Gulf “allies.”
Of course, none of this will be surprising to Liberty Blitzkrieg readers. I’ve been pointing this out for a very long time. In fact, evidence was already piling up two years ago, as can be seen in the following excerpts from a piece published in June 2014 titled, America’s Disastrous Foreign Policy – My Thoughts on Iraq:
But in the years they were getting started, a key component of ISIS’s support came from wealthy individuals in the Arab Gulf States of Kuwait, Qatar and Saudi Arabia. Sometimes the support came with the tacit nod of approval from those regimes; often, it took advantage of poor money laundering protections in those states, according to officials, experts, and leaders of the Syrian opposition, which is fighting ISIS as well as the regime.
“Everybody knows the money is going through Kuwait and that it’s coming from the Arab Gulf,” said Andrew Tabler, senior fellow at the Washington Institute for Near East Studies. “Kuwait’s banking system and its money changers have long been a huge problem because they are a major conduit for money to extremist groups in Syria and now Iraq.”
Iraqi Prime Minister Nouri al-Maliki has been publicly accusing Saudi Arabia and Qatar of funding ISIS for months. Several reports have detailed how private Gulf funding to various Syrian rebel groups has splintered the Syrian opposition and paved the way for the rise of groups like ISIS and others.
Fast forward two years, and not much has changed. The Guardian reports:
A collapse in oil revenues available to Islamic State is likely to have made it increasingly dependent on donations from wealthy Gulf states and profits from foreign exchange markets, the first UK inquiry into the terror group’s funding has heard.
Attacks by the US-led coalition on Isis’s oil installations and convoys are believed to have reduced its oil revenues by more than a third as the funding of the group becomes one of the central fronts in the battle to defeat it in Syria and Iraq.
But experts have told the committee the UK government may be vastly over-estimating the importance of oil revenue, and underestimating the extent to which Isis is reliant on foreign donors in the Gulf or its manipulation of the Iraqi banking system.
Luay al-Khatteeb from the Iraq Energy Institute claimed the cost of waging war for Isis must be so high, and its oil revenues now so limited, that it must be accessing large-scale donations.
“Some might wonder to what extent Gulf Arab financing has continued to subsidise the caliphate. Certainly, IS was able to draw on some other sources of income between January 2015, when Raqqa’s economy had reportedly collapsed, and mid-January 2016, when IS forces have been able to launch a major new Syrian offensive. The money is coming from somewhere.”
The UK government has effectively admitted that Gulf states did fund Isis in its early days, saying it is confident all such government funding has now stopped. But Dan Chugg, a Foreign Office expert, admitted to the select committee this reassurance had limited value.
Meanwhile, it’s also become abundantly clear that the Saudis played a major role in the 9/11 attacks. See:
The New York Post Reports – FBI is Covering Up Saudi Links to 9/11 Attack
Two Congressmen Push for Release of 28-Page Document Showing Saudi Involvement in 9/11
With friends like these…
- Oil Market Commentary 3 10 2016 (Video)
By EconMatters
We look to be basing right now for a higher move in the oil market into summer. We are headed for another higher week for oil prices, and the uptrend continues.
© EconMatters All Rights Reserved | Facebook | Twitter | YouTube | Email Digest | Kindle
- The Germans React To Draghi's Monetary "Tidal Wave"
Having discussed the market’s disturbing reaction to Mario Draghi’s desperate “all in” monetary gamble – one which saw an early bout of euphoria followed by one of the most aggressive Euro spikes in history, second only to the “December debacle” and the Fed’s March 2009 announcement of QE1, we were waiting for the just as important reaction by the ECB’s nemesis: the one country that not only has seen hyperinflation first hand (and appears to recall it vividly), but is just as aware where the ECB’s monetary lunacy ends: the Germans.
We got it from Germany’s Handelsblatt, when in an article titled “The dangerous game with the money of the German savers”, the authors provide a metaphorical rendering of what is happening in Europe as follows:
They also paint an oddly accurate caricature of the man behind this last ditch monetary policy:
And write the following:
A determined ECB chief Mario Draghi plows ahead with his negative interest rate policy. The positive effects on the economy are low. Great, however, are the risks: this is the greatest redistribution of wealth in Europe since World War II.
It clearly got the ECB’s attention: former FT journalist and current head of media relations at the ECB Michael Steen promptly responded, calling the Handelsblatt article a “hatchet job” but congratulating it on the “lovely photoshop of cash tidal wave.”
Trying to find something nice to say about Handelsblatt hatchet job, there is a lovely photoshop of cash tidal wave pic.twitter.com/GqglBGwzdX
— Michael Steen (@michaelsteen) March 10, 2016
Whether the ECB’s PR office will be as glib in a few years when the full destructive nature of the central bank’s grand monetary experiment fully unravels, is unknown. What is known is that the war of words between Germany and Frankfurt’s most prominent, if increasingly despised, resident has just hit a new, and disturbing, plateau.
- Obama To GOP: Stop Blaming Me For 'Creating' Trump
While admitting he shares some blame for the widening partisan divide during his term in office, President Obama dismissed the notion that he's responsible for the rise of Donald Trump, who has harnessed voter anger during his presidential run, urging GOP elites to do some "introspection" about the how "the politics they've engaged in allows the circus we've been seeing to transpire."
"I'm not going to validate some notion that the Republican crackup that’s been taking place is a consequence of actions that I’ve taken…"
Obama: The GOP created "an environment where somebody like a Donald Trump can thrive" https://t.co/Syw4ZVotVC https://t.co/avHzLxWsZa
— CNN Politics (@CNNPolitics) March 10, 2016
Despite his feuds with Republicans in Congress, Obama insisted that he wants “an effective Republican Party.”
“I think this country has to have responsible parties that can govern,” he said, adding the GOP could “challenge some of the blind spots and dogmas in the Democratic Party” on issues such as trade.
He pointed a finger at conservative media and GOP leaders for fueling “a notion that everything I do is to be opposed; that cooperation or compromise somehow is a betrayal; that maximalist, absolutist positions on issues are politically advantageous; that there is a ‘them’ out there and an ‘us,’ and the ‘them’ are the folks causing the problems you’re experiencing.”
To this line of reasoning we offer the following simple reality of check of the fiction President Obama is peddling…
Of course, one has to believe Obama because he is 'Presidential' and would never say anything "outrageous" or lie…
So did he or didn't he? No matter – Trump is here now… and everything's about to really "change."
- Gold Soars As Draghi "Dud" Unleashes Chaos In Bonds, Stocks, & FX
"You get nothing…"
This was not the day many had planned on…After the initial "as expected" move, everything went pear-shaped for the central planners when Draghi committed the ultimate sin – closing an open-ended monetary policy…
The USD was hammered, gold surged, and stocks and oil gave up gains…
Then The PPT stepped in to save the world, ramped us back to VWAP…
And Dow back to 17,000…unfriggingbelievable!!
* * *
Surveying some of the damage (that was unable to benefit from US manipulation)…
Let's start with the worst…EURUSD screamed almost 400 pips off the post-Draghi lows…
As Bespoke notes, today is the largest positive reversal (3.2%) off an intraday decline of at least 1% in the history of the Euro.
We could show all kinds of epic fail European markets, but Italian banks – with their exploding NPLs – are the best example. After smashing to a halt limit-up, they fell back to earth to practically unchanged by the close…
* * *
After yesterday's idiotic ramp to perfectly end Dow at 17000, things went a little bit turbo today…until the late-day re-emergence of America's own National Team…
The plunge stalled when Europe closed – went sideways – then ripped higher to unch as NYMEX closed…to get the S&P 500 perfectly unchanged!
Look at the utter panic VIX slams to get Dow back to 17,000 (just like yesterday)…
As Shorts were once again squeezed…
Treasury yields all rose on the day (with the belly underperforming and 30Y outperforming after a strong auction all the way back to yields lower on the week)…
Dragged higher in yield by Bund weakness (as Draghi disappointed expectations for the rate cut)
Early in the day, the TSY yield curve collapsed to its lowest since Dec 2008…
Not boding well for the Dimon Bottom?
The USD Index was monkey-hammered as EURUSD's initial drop exploded into an avalanche of short-covering… The biggest daily drop in over a month..
Gold ansd Silver outperrformed on the day as crude and copper slipped lower…
Gold recovers its quintuple whammy slams…
And oil rallied back as Europe closed for absolutely no good reason at all…
Finally, Oil Vol remains notably "cheap" relative to equity protection (for now)…
Charts: Bloomberg
- 7 Harsh Realities Of Life Millennials Need To Understand
Submitted by The Libertarian Republic, via The Burning Platform blog,
Millennials.
They may not yet be the present, but they’re certainly the future. These young, uninitiated minds will someday soon become our politicians, doctors, scientists, chefs, television producers, fashion designers, manufacturers, and, one would hope, the new proponents of liberty. But are they ready for it?
Time after time, particularly on college campuses, millennials have proven to be little more than entitled, spoiled, anti-intellectual brats who place far too much emphasis on feelings and nowhere near enough emphasis on critical thinking. To the millennial, words are cause for the creation of safe spaces, alternative ideas must be stifled, and anything they perceive to be a microaggression is enough to send them spiraling into a state of mental distress.
It’s time millennials understood these 7 harsh realities of life so we don’t end up with a generation of gutless adult babies running the show.
1. Your Feelings Are Largely Irrelevant
Seriously, nobody who has already graduated college cares about your feelings. That means that when you complain to your boss because your co-worker mis-gendered you, he’s probably not going to bend over backwards to bandage your wounds. Given feelings are entirely subjective in nature, it’s completely unreasonable to demand everyone tip-toe around you to prevent yours from being hurt. The reality is that people will offend you and hurt your feelings, and they won’t stop to mop up your tears because they shouldn’t have to. Learning to accept criticism, alternative viewpoints, and even outright insults will make you happier in the long run than routinely playing the victim card.
2. You Cannot Be Whatever You Want To Be
This is a comforting lie parents have started telling their children to boost their morale in school. Unfortunately, millennials are now convinced it’s true, especially as society has now decided to push this narrative as well. The reality is if you’re 17 years old and still can’t figure out basic division, you’re not going to be a rocket scientist. If you’re overweight and unattractive, you’re not going to be the quarterback’s prom date. If you lack fine motor skills, you’re not going to be a heart surgeon. It’s okay to accept that you cannot be whatever you want to be. In fact, once you accept this, you’ll be able to focus on the things you can be — the things you really are talented at.
3. Gender Studies Is A Waste Of Money
You heard me. While some millennials taking useless degrees will claim they’re beneficial for teaching or research positions, the reality is that they just put themselves several thousands dollars in debt to learn how to be a professional victim. While you’re struggling to make ends meet after graduation because nobody who pays more than minimum wage is interested in your qualifications and you’re drowning in student loan debt, be sure to check out the next harsh reality before you start complaining.
4. If You Live In America, You’re Already In The 1%
That’s right. Even though you work at McDonald’s for minimum wage because you got a useless, outrageously expensive college degree, you’re still far better off than the vast majority of the planet. Don’t believe me? Fly to Uganda and check out the living conditions there. Fly to China, Saudi Arabia, North Korea, Iran, Russia, and even European countries like Ukraine and Greece, and you’ll quickly discover just how well-off you really are. While it may be cool these days to dump on capitalism, it’s the only reason you aren’t already worse off.
5. You Don’t Have A Right To It Just Because You Exist
That includes healthcare, guaranteed income, and somewhere to live. Just because you’re here and breathing doesn’t mean society owes you anything. Like the billions of people who lived before you, working hard is a better guarantor of wealth and the ability to comfortably take care of yourself than begging society or the government to do it for you. Demanding healthcare be a right, for example, is equivalent to demanding government force the taxpayer to pay for it. While that may seem like a good idea in theory, it only leads to rationing of care when costs become unsustainable, which negatively impacts not just your health, but everyone else’s, too.
6. You DO Have The Right To Live As You Please — But Not To Demand People Accept It
By contrast, you do have the right to live however you please, so long as it’s within the confines of the law. If you want to cross-dress, smoke marijuana, drink lots of alcohol, have lots of sex, and, yes, even go to school for gender studies, then by all means, go for it. Government should not be allowed to legislate people’s behavior as long as it doesn’t infringe upon someone else’s rights, but that doesn’t mean society isn’t allowed to have an opinion. You don’t have the right to demand people keep their opinions about your lifestyle to themselves, especially if you’re open and public about it. I have as much of a right to comment on the way you live your life as you do to actually live it. Your feelings are not a protected right, but my speech is.
7. The Only Safe Space Is Your Home
No matter where you go in life, someone will be there to offend you. Maybe it’s a joke you overheard on vacation, a spat at the office, or a difference of opinion with someone in line at the grocery store. Inevitably, someone will offend you and your values. If you cannot handle that without losing control of your emotions and reverting back to your “safe space” away from the harmful words of others, then you’re best to just stay put at home. Remember, though: if people in the outside world scare you, people on the internet will downright terrify you. It’s probably best to just accept these harsh realities of life and go out into the world prepared to confront them wherever they may be waiting.
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