- Piling On: EU's "Competition Enforcer" Lays More Charges On Google
Submitted by Michael Shedlock via MishTalk.com,
The anti-free trade consortium in Brussels is leveling more charges
at Google. The EU nannycrats just cannot stand or deal with a successful
business that people like.The Financial Times reports Brussels Piles New Charges on Google as Vestager Digs In.
Brussels launched another volley of competition
complaints against Google on Thursday, marking the latest gambit in a
protracted antitrust saga.Margrethe Vestager, the EU’s competition enforcer, issued two extra
sets of charges against the US group, alleging that it abused its search
clout to muscle out smaller rivals in online advertising and shopping
comparison markets.However, rather than significantly broadening the regulatory assault
against Google, the moves largely consolidate the European Commission’s
position as it edges towards infringement decisions and possible fines.
These would only come to pass in 2017 at the earliest — some eight years
after the first complaint against Google was filed.The new charges create a three-front legal battle line with Google by
adding to allegations in April related to the Android mobile operating
system, which are potentially the most problematic for the company.
Google has rejected any wrongdoing and said its “innovations and product
improvements have increased choice for European consumers and promote
competition”.Competition investigators generally wish to avoid additional charge
sheets, which indicate their legal case is trickier than first expected.
But the concession does not mean the investigation is dead — Ms
Vestager stressed such follow-up charges were issued in Brussels’
successful cases against Microsoft and Intel.Indeed, her decision signals that she is raising her stakes and is
likely to see the matter through to a decision and possible fine —
rather than opting for a settlement — according to legal analysts.“She is doubling down. They are sinking their teeth in further and
they will finish the shopping case. That is plain,” said Alec Burnside, a
lawyer at Cadwalader acting for complainants in a separate matter
against Google.Meet Margrethe Vestager, the EU’s “Competition Enforcer”
Google Tax in Spain
In a stunning display of stupidity, Spain passed a “Google Tax” that
charged news aggregators like Google for showing snippets and linking to
news stories. Rather than pay the tax, Google left.Then, in an amazing twist of irony, the publishers who were in favor of the tax, demanded Google stay.
A study shows Spain’s “Google tax” has been a disaster for publishers.
A study
commissioned by Spanish publishers has found that a new intellectual
property law passed in Spain last year, which charges news aggregators
like Google for showing snippets and linking to news stories, has done
substantial damage to the Spanish news industry.In the short-term, the study found, the law will cost publishers €10
million, or about $10.9 million, which would fall disproportionately on
smaller publishers. Consumers would experience a smaller variety of
content, and the law “impedes the ability of innovation to enter the
market.”The study concludes that there’s no “theoretical or empirical justification” for the fee. The full study (PDF) is available for download; it’s in Spanish with an English-language executive summary.
The law, which provides for fines of up to $758,000 for violators, was passed in October.
Unlike previous attempts to impose a “Google News tax” in Germany and
Belgium, the Spanish law doesn’t allow publishers to opt out. In
response, Google simply closed down Google News in Spain.Whatever loss of traffic occurs due to readers who may read a
news aggregator and then choose not to read an entire story, is more
than made up for by the “market expansion” effect, the study found. In
other words, given access to a news aggregator like Google, people read
much more news.The NERA analysis found a 6 percent overall drop in traffic from the
Spanish Google News closure and a 14 percent drop for smaller
publications.The entire notion there needs to be a “Competition Enforcer” is
idiotic in and of itself. People use Google because they like Google.
Others use Firefox because they like Firefox.The market is fully capable of deciding what needs to be, not “competition enforcer” bureaucrats demanding mediocrity.
Margrethe Vestager and her nannycrat idiocy provides a stellar example as to why the UK should be pleased to be out of the EU.
- Fed Loses Another Excuse As China "Super Friday" Data Dump Beats Expectations
China's 'Super Friday' data dump arrived and despite the 10% devaluation in the Renminbi basket over the past year, and an utterly incredible spike in borrowing (new loans spiked again in June!!), China economic data merely muddles through in its centrally-planned goal-seeked way. Earlier 'researchers' proclaimed Chinese GDP at around 6.5% but China GDP grew at 6.7% YoY (beating expectations of 6.6%). While Fixed Asset Investment disappointed (+9.0% vs +9.4% exp), Retail Sales (+10.6%) and Industrial Production (+6.2%) beat expectations.
The devaluation against the USD is starting to accelerate as the broad Renminbi basket has now dropped 10% in the last year (against all of China's major trading partners)…
The search for yield has once again led to Chinese Corporates, which have rallied back to almost record bubble low yields (despite the utter carnage in Chinese balance sheets as leverage rises). Bonds have replaced stocks for now as the bubble-du-jour in China…
Not easily seen in this chart but SHCOMP has actually rallied bak to April levels in recent weeks amid the world's flood of central bank largesse.
As Bloomberg notes, whenever China's GDP beat or met market consensus, the country's stock market fell. Here's how the Shanghai Composite did following the last four GDP releases:
- 1Q on April 15, 2016: +6.7%; SHCOMP -0.1%
- 4Q on Jan. 19, 2016: +6.8%; SHCOMP +3.2%
- 3Q on Oct. 19, 2015: +6.9%; SHCOMP -0.1%
- 2Q on July 15, 2015: +7%; SHCOMP -3%
But it has not helped the macro-economic data much…
- Industrial Production rose 6.2% (acclerating from 6.0% in May) BEATING expectations of a 5.9% rise (5.3 to 6.2% range)
- Retails Sales printed +10.6% (faster than May's 10.0%) BEATING expectations of a 9.9% gain (with 40 economists estimating between 9.2 and 10.2% gains)
- Fixed Assets Investment rose 9.0% YoY (slowing from 9.6% in May) MISSING expectations of 9.4% (between 8.8 and 9.8%) – lowest since 2000.
- GDP printed +6.7% (flat from May) BEATING expectations of 6.6% YoY rise (6.3 to 6.8% range among 46 economists) – equal lowest since 2009.
And all of this was achieved with another massive surge in credit…
So The Fed loses another excuse – US Jobs – Fixed! BREXIT – handled! China Growth Fears – No Worries!
- We're Witnessing A Complete Breakdown In Western Values
Submitted by Simon Black via SoveeignMan.com,
Two months ago I was with the former President of Colombia, Alvaro Uribe, at his home outside of Medellin.
He was telling me some hilarious stories about his interactions in the early 2000s with Hugo Chavez, who had recently seized power in Venezuela.
Chavez was a fanatic socialist. He believed so strongly in the idea of redistributing wealth from rich to poor.
Yet even when it was clear his policies weren’t working and Venezuela was rapidly sliding into economic chaos, Chavez’s only solution was to double down and redistribute even MORE wealth.
It was the classic definition of insanity.
Chavez failed to understand what Uribe told me so succinctly: “If there’s no wealth creation, there’s nothing left to redistribute.”
We know how Venezuela turned out; its failed socialist experiment led to today’s infamous shortages of food and toilet paper.
But here in Russia is perhaps the most famous example in our modern times.
Marxists came to power in a bloody 1917 revolution with the goal of eradicating poverty and redistributing wealth.
Yet like Venezuela, the only equality the Soviet Union managed to achieve was making everyone equally poor to the point that this vast wasteland of destitution finally collapsed in the late 1980s.
These economic disasters almost invariably start with a rising gap in wealth and income– a growing percentage of the population feeling left behind who rally behind someone promising to “spread the wealth around.”
As Historian Will Durant wrote in his incredible 1969 book Lessons from History:
“The concentration [of wealth] may reach a point where the strength of number in the many poor rivals the strength of ability in the few rich. . . which history has diversely met by legislation redistributing wealth or by revolution distributing poverty.”
This is exactly what’s happening in the West now.
The statistics are obvious: the wealth gap is bigger than it’s been since the Great Depression.
Middle class wages, when adjusted for inflation, are stagnant.
2015 was the first time in years that the average wage increase in the United States actually surpassed the rate of inflation.
But on a longer timeline, household incomes haven’t kept pace with either productivity or the cost of living.
We can see the effects of this anecdotally.
Thomas Piketty’s 2013 book Capital in the Twenty-First Century, which criticized such inequality and advocated a global wealth tax, was an explosive best-seller.
A 2011 Pew Research Center poll showed that 49% of US respondents had a favorable view of socialism.
And of course, Bernie Sanders made wealth and income inequality major issues in his presidential campaign, resonating with tens of millions of people.
On the way over to Russia I was reading an article in Newsweek about Uber, the ride-sharing pioneer that is currently worth around $70 billion.
The author was upset because the company’s stock isn’t publicly traded like Apple or Facebook, meaning he’s not able to own any Uber shares for himself.
He complains that the founders of these tech companies have been “actively deciding to keep as much for [themselves] as possible and shut out the rest of the populace by avoiding public stock offerings.”
According to the author, we’re apparently all entitled to our “fair share” of other people’s businesses and private property.
Unbelievable.
He’s not alone– there’s a growing chorus of politicians beating up on Uber, evidenced by Elizabeth Warren’s statement in March 2016 that “all the benefits [of Uber and related “shared-economy” companies] are floating to the top 10%.”
What an ignorant comment to make.
Uber loses billions of dollars each year.
So if anything, investors’ capital ends up in the pockets of the hundreds of thousands of drivers who use the app to generate extra income.
In reality Uber constitutes an enormous transfer of wealth from investors to workers and consumers. So her comment was totally wrong.
But what was more amazing was that she was complaining about how it benefits the top TEN percent.
Usually these people whine about the top 0.1%, then the top 1%. Now it’s the top 10%.
When will they start complaining about the top 20%? Or those evil people in the top 55%, i.e. the percentage of households that actually pay US federal income tax.
Wealth and income inequality is real, and the gap is growing. So is the consequent rise of socialism.
People know they’re getting screwed. And they are. They just don’t know why.
They have no idea how central bankers who conjure money out of thin air have rigged the entire economy against them.
So instead they blame “capitalism” and naturally embrace its opposite.
Seven centuries ago when Europe was just a plague-infested backwater, glimmerings of economic freedom began to appear on the continent.
The West adopted core values, like the sacrosanct protection of private property; the ability for an individual to work hard and build wealth; and spirited intellectual debate.
This is how western civilization became the most prosperous that history has ever known.
But this is all changing.
Being wealthy used to be a virtue worthy of widespread aspiration.
Now it’s met with skepticism and derision.
Similarly, intellectual dissent used to be embraced.
Now it’s increasingly considered “hate speech” that must be banished from university campuses and their infantile ‘safe spaces’.
And the entire west, it seems, is moving towards an ever-expanding, fiscally unsustainable welfare state that creates swelling masses of dependents.
This is a complete breakdown of western values, and that has serious consequences.
It’s incredible how rapidly this trend has unfolded– it’s a very steep line from the economic chaos of the 2008 financial crisis to where we are today.
And given the speed of this pro-socialist trend, just think about where it’s going to be in a few more years.
More than likely, it will progress straight into your wallet.
- The Reasons Why The Globalists Are Destined To Lose
Submitted by Brandon Smith via Alt-Market.com,
Under the surface of almost every sociopolitical and economic event in the world there burns an ever-raging, but often unseen, war. This war, for now, is fought with fiction and with truth, with journalistic combat and with quiet individual deeds. It is defined by two sides which could not be more philosophically or spiritually separate.
On one side is a pervasive network of corporate moguls and elites, banking entities, international financial consortiums, think tanks and political puppets. They work tirelessly to reshape public psychology and society as a whole into something they sometimes call the “New World Order;” a completely and scientifically centralized planet in which they control every aspect of government, trade, life and even moral compass. I often refer to them simply as the “Globalists,” which is how they at times refer to themselves.
On the other side is a movement that has developed organically and instinctively, growing without direct top-down “leadership,” but still guided through example by various teachers and activists, driven by a concrete set of principles based in natural law. It is composed of the religious, the agnostic and even some atheists. It is soldiered by people of all ethnic and financial backgrounds. These groups are tied together by a singular and resounding belief in the one vital thing they can all agree upon — the inherent and inborn rights of freedom. I call them the “Liberty Movement.”
There are those who think they do not have a dog in this fight, those who ignore it and those who are completely oblivious to it. However, EVERYONE can and will be affected by it, no exceptions. This war is for the future of the human race. Its consequences will determine if the next generation will choose the conditions of their environment and maintain the ability to reach their true potential as individuals or if every aspect of their lives will be micromanaged for them by a faceless, soulless bureaucracy that does not have their best interests at heart.
As you can probably tell, I am not unbiased in my examination of these two sides. While some of the more “academically minded” cynics out there do attempt to marginalize the entire conflict by accusing both sides of simply trying to impose “their ideology” on the rest of humanity, I would say that such people are generally ignorant of what is at stake.
There is in fact an elemental force behind this war. I would even call it a conflagration between good and evil. For a more in-depth analysis on the evil behind globalism, read my article “Are Globalists Evil Or Just Misunderstood.”
Some people don’t adhere to such absolutes or they think good and evil are fantasies created by religion to keep society in check. I have no intention of trying to convince them otherwise. All I can say is, I have seen and experienced these absolutes first hand and, therefore, I have no choice but to remain a believer.
I would also point out that the general experience of most men and women is that the act of organized and legitimate oppression is inherently evil and such actions in the name of satisfying delusional elitist narcissism are even more evil. While these experiences are subjective, they are also universal, regardless of the culture, place or time in history. Most of us feel the same horror and the same defiance when presented with rising tyranny. We can’t necessarily explain why, but we all know.
While I am firmly on the side of liberty and am willing to fight and trade my life to stop the “New World Order” the globalists are so obsessed with, I will not turn this examination of their tactics into a blind or one sided farce. I will point out where the elites are effective just as I will point out where they are ineffective. It would do more harm than good to portray the globalists as “stupid” or bumbling in their efforts. They are not stupid. They are actually astonishingly clever and should not be underestimated.
They are indeed conniving and industrious, but, they are not wise. For if they were wise, they would be able to see the ultimate futility of their goal and the world would be saved decades of tragedy and loss. Their cultism has dulled their senses to reality and they have abandoned truth in the name of control. Here are some of the primary strategies that the globalists are using to gain power and work towards total centralization and why their own mindset has doomed them to failure.
Globalism vs. “Populism”
The globalists have used the method of false dichotomies for centuries to divide nations and peoples against each other in order to derive opportunity from chaos. That said, the above dichotomy is about as close to real as they have ever promoted. As I explained in my article, “Globalists Are Now Openly Demanding New World Order Centralization,” the recent passage of the Brexit referendum in the U.K. has triggered a surge of new propaganda from establishment media outlets. The thrust of this propaganda is the notion that “populists” are behind the fight against globalization and these populists are going to foster the ruin of nations and the global economy. That is to say — globalism good, populism bad.
There is a real fight between globalists and those who desire a free, decentralized and voluntary society. They have just changed some of the labels and the language. We have yet to see how effective this strategy will be for the elites, but it is very useful for them in certain respects.
The wielding of the term “populist” is about as sterilized and distant from “freedom and liberty” as you can get. It denotes not just “nationalism,” but selfish nationalism. And the association people are supposed to make in their minds is that selfish nationalism leads to destructive fascism (i.e. Nazis). Therefore, when you hear the term “populist,” the globalists hope you will think “Nazi.”
Also, keep in mind that the narrative of the rise of populism coincides with grave warnings from the elites that such movements will cause global economic collapse if they continue to grow. Of course, the elites have been fermenting an economic collapse for years. We have been experiencing many of the effects of it for some time. In a brilliant maneuver, the elites have attempted to re-label the liberty movement as “populist” (Nazis), and use liberty activists as a scapegoat for the fiscal time bomb THEY created.
Will the masses buy it? I don’t know. I think that depends on how effectively we expose the strategy before the breakdown becomes too entrenched. The economic collapse itself has been handled masterfully by the elites, though. There is simply no solution that can prevent it from continuing. Even if every criminal globalist was hanging from a lamp post tomorrow and honest leadership was restored to government, the math cannot be changed and decades of struggle will be required before national economies can be made prosperous again.
Communism vs. Fascism
This is a classic ploy by the globalists to divide a culture against itself and initiate a calamity that can be used as leverage for greater centralization down the road. If you have any doubts about fascism and communism being engineered, I highly suggest you look into the very well documented analysis of Antony Sutton. I do not have the space here to do his investigations justice.
Today, we see elites like George Soros funding and aiding the latest incarnation of the communist hordes — namely social justice groups like Black Lives Matter. The collectivist psychosis and Orwellian behavior exhibited by race junkies like BLM and third-wave feminists is thoroughly pissing off conservatives who are tired of being told what to think and how to act every second of every day. And this is the point…
If you want to get a picture of America in 2016, look back at Europe during the 1930’s. Communist provocateurs, some real and some fabricated by the establishment itself, ran rampant in Europe creating labor disintegration and fiscal turmoil. The elites then funded and elevated fascism as the “solution” to communism. Normally even-handed conservatives were so enraged by the communist spitting and ankle biting that they became something just as evil in response.
The U.S. may be on the same path if we are not careful. The latest shootings in Texas will make hay for the globalists. Think about this for a moment — on one side you have Obama telling the liberals that the answer to police brutality is to federalize law enforcement even more that it already is. On the other side, you have some Republicans arguing that a more militarized police presence will help prevent groups like BLM from causing more trouble. Notice that the only solution we are being offered here is more federal presence on our streets?
I do see, though, a rather large weakness in the plan to ignite a communist vs. fascist meltdown in the U.S., and that weakness is the existence of the Liberty Movement itself. The movement has grown rather sophisticated in its media presence and prevalent in influence. It does have enough sway now to diffuse some aspects of a rise to fascism in the political Right. The only option the elites have is to find a way to co-opt us. If they can manipulate the liberty movement into supporting a fascist system, then they would be very close to winning the entire fight. This would be highly unlikely given the stubbornness of liberty proponents when adhering to their principles.
The elites might be able to get a large part of the public to take sides in their false paradigm, but if they can’t con the millions that make up the liberty movement into the fold, then their job becomes much harder.
Moral Compass vs. Moral Relativism
Moral relativism is perhaps the pinnacle goal of the globalists. Why? Because if you can convince an entire society that their inherent conscience should be ignored and that their inborn feelings of morality are “open to interpretation,” then eventually ANY evil action can be rationalized. When evil becomes “good,” and good becomes evil, evil men will reign supreme.
The problem is, conscience is an inborn psychological product, a result of inherent archetypal dualities universal to almost all people. It is ingrained in our DNA, or our very souls if you believe in such a thing. It cannot be erased easily.
Moral relativism requires a person to treat every scenario as a “gray area.” This is not practical. Conscience dictates that we treat every situation as potentially unique and act according to what we feel in our hearts is right given the circumstances. This does not mean, though, that there is no black and white; or that there are no concrete rules. There is almost always a black and white side to any situation dealing with right and wrong. Moral “dilemmas” are exceedingly rare. In fact, I don’t think I have ever encountered a real moral dilemma in history or in personal experience. The only time I ever see moral dilemmas is in movies and television.
Only in television fantasy is moral relativism ever the “only way” to solve a problem. And despite the preponderance of moral relativism in our popular culture, the ideology is still having trouble taking hold. If it was so easy to undermine conscience, then the NWO would have already achieved complete pacification. We are still far from pacification. Whoever hard-wired our conscience should be applauded.
Collectivism vs. Individualism
The very core of globalism and the NWO is the position that sovereignty and individualism must be sacrificed for the "good of the group"; in other words, they promote collectivism. Of course, groups by their very nature are abstractions; they only exist as long as the individuals within them recognize them as viable. Unfortunately, collectivists do not accept this fact because it would mean that the group, not matter how utopian, is not the pinnacle of human existence – rather, the individual is and always will be the pinnacle of human existence.
The elites MUST convince people that individualism is dangerous and that collectivism is the only way to prevent the tragedies wrought by those who wish to be separate. Of course, most of the tragedies we experience on a national or global scale are actually engineered by the elites, not by wild individuals or sovereign nations looking for trouble. They then blame the very concept of sovereignty as a barbaric ritual from the past that must be abolished for the sake of all.
In order for the globalists to reinforce the need for collectivism, though, they must engage people on an individual psychological level. Most human beings have an inherent desire to interact with their fellow man, but they also have an inherent identity and drive to pursue their own development without interference. We like to be a part of a group as long as our participation is healthy and voluntary and our associations are a matter of choice.
Human beings are instinctively tribal, but we have psychological and biological limits to the size of the tribe we prefer to be a part of. Robin Dunbar, a professor of evolutionary psychology prevalent in the 1990's, found that there is a cognitive limit to the number of individuals any one person can maintain stable relationships with. Dunbar found this number to be between 100 – 200 people. A limitation also extends to the size of effective groups versus ineffective groups. He found that effective tribes and communities tend to remain between 500 – 2500 people.
The human mind does not adapt well to a vast tribal groups, and recoils from the idea of a "global tribe". The truth is, human beings function far better in smaller groups and they do not like to be forced into participating in any group, let alone larger groups. This may account for the feeling of isolation that is common among people who live in metropolitan areas. They are surrounded by millions of neighbors and perhaps hundreds of associates yet they still feel alone because they do not have a functioning tribe of acceptable size.
Vast numbers of people can be tied together by an ideal that resonates with them, which is the only purpose for nations to form (to protect that ideal), but that is as far as the voluntary association goes. Globalist collectivism is simply unnatural. People know it unconsciously, they know it is an act of force and oppression, and will invariably move to sabotage its false tribalism as they begin to see its true colors.
Total Control vs. Reality
This is where the globalists philosophy really begins to break down. The elitist pursuit of total information awareness and total social control is truly perverse and insane, and insanity breeds delusion and weakness. The fact is, they will NEVER complete the goal of complete micro-control. It is mathematically and psychologically impossible.
First, in any system, and in complex systems most of all, there are always elements that cannot be quantified or predicted. To understand this issue, I recommend studying the Heisenberg Uncertainty Principle. To summarize, the uncertainty principle dictates that anyone observing a system in action, even from a distance, can still affect the behavior of that system indirectly or unconsciously in ways they could never predict. They are also limited by their ability to objectively perceive all available elements of what they observe. Unknown quantities result, predictability goes out the window and total control of that system becomes unattainable.
This principle also applies to human psychology, as numerous psychoanalysts have discovered when treating patients. The doctor, or the observer, is never able to observe their patient without indirectly affecting the behavior of their patient in unpredictable ways. Therefore, a completely objective analysis of that patient can never be obtained.
What the elites seek is a system by which they can observe and influence all of us in minute detail without triggering a reaction that they wouldn’t expect. The laws of physics and psychology derail this level of control. There will always be unknown quantities, free radicals, wild cards, etc. Even a seemingly perfect utopia can be brought down by a single unknown.
To break this down even further to the level of pure mathematics, I recommend study into Kurt Godel and his Incompleteness Proof. This, I believe is the ultimate example of the elites struggling against the fact of unknown quantities and failing.
Godel’s work revolved around either proving or disproving the idea that mathematicians could define “infinity” in mathematical terms. For, if infinity can be defined, then it can be understood in base mathematical axioms, and if infinity can be understood, then the universe in its entirety can be understood. Godel discovered the opposite — his incompleteness proof established once and for all that infinity is a self inclusive paradox that CANNOT be defined through mathematics. Keep in mind that a proof is a set of mathematical laws that can never be broken. Two plus two will always equal four; it will never equal anything else.
Well known globalist Bertrand Russell worked tirelessly to show that the entirety of the universe could be broken down into numbers, writing a three volume monstrosity called the Principia Mathematica. Russell’s efforts were fruitless and Godel’s proof later crushed his theory. Russell railed against Godel’s proof, but to no avail.
Now, why was an elitist like Russell who openly championed scientific dictatorship so concerned by Godel? Well, because Godel, in mathematical terms, destroyed the very core of the globalist ideology. He proved that the globalist aspirations of godhood would never be realized. There are limits to the knowledge of man, and limits to what he can control. This is not something globalists can ever accept, for if they did, every effort they have made for decades if not centuries would be pointless.
As mentioned earlier, the issue is one of unknown quantities.
Can human society ever be fully dominated? Or, is the act of rebellion against stagnating and oppressive systems a part of nature? Is it possible that the more the elites wrap the world in a cage, the more they inspire unpredictable reactions that could undermine their authority?
This might explain the establishment’s constant attention to the idea of the “lone wolf” and the damage one person acting outside the dictates of the system can do. This is what the elites fear most: the possibility that despite all their efforts of surveillance and manipulation, individuals and groups may one day be struck by an unpredictable urge to pick up a rifle and put the the globalists out of everyone’s misery. No chatter, no electronic trail, no warning.
This is why they are destined to lose. They can never know all the unknowns. They can never control all the free radicals. There will always be rebellion. There will always be a liberty movement. The entirety of their utopian schematic revolves around the need to remove unknowns. They refuse to acknowledge that control at these levels is so frail it becomes useless and mortally dangerous. In their arrogance, they have ignored the warnings of the very sciences they worship and have set their eventual end in stone. While they may leave a considerable path of destruction in their wake, it is already written; they will not win.
- "This Is Not Encouraging" – Credit Manager Index Crashes To 7 Year Lows
"Year-over-year numbers have not been encouraging of late," warns National Asscociation of Credit Managers' economists Chris Kuehl, noting that the "nice little run of steady improvement in NACM’s Credit Managers’ Index seems to have come to an end."
as the index suggests the credit cycle is back at its weakest since 2009…
As credit extended is tumbling… not at all what The Fed wants…
As Bankruptcies soar…
And breaking another narrative that the service economy will support the economy despite manufacturing's collapse…
“The dark clouds on the manufacturing horizon include a decline in the sales of new cars and the potential drop in export demand as the dollar gains a lot more strength against the pound and the euro. How this will all play out remains to be seen,”
…Kuehl concludes,
"The service sector is leading that decline after some months of good news. The summer has not yet been a positive experience, and global issues are depressing the average business and consumer even more."
- "The Resentment Will Explode" – In Dramatic Twist, McKinsey Slams Globalization
The IMF is getting nervous, and what it appears to be most concerned about, is a collapse of the status quo.
Moments ago, in a speech in Washington, IMF head Christine Lagarde said that “The greatest challenge we face today is the risk of the world turning its back on global cooperation—the cooperation which has served us all well. We know that globalization – and increased integration – over the past generation has yielded many economic benefits for many people.”
The IMF is not alone: for years, consultancy giant McKinsey towed the party line as well saying in 2010 that “the core drivers of globalization are alive and well” and adding as recently as 2014 that “to be unconnected is to fall behind.“
That appears have changing, and cracks are starting to form behind the cohesive push for globalization, at least among those who benefit the most from globalization.
In a stunning study released today, one which effectively refutes all its prior conclusions on the matter, McKinsey slams the establishment’s status quo thinking and admits that the economic gains of changes in the global economy have not been widely shared lately, especially in the developed world. In the report titled “Poorer Than Their Parents? Flat or Falling Incomes in Advanced Economies” it finds that prospects for income growth have deteriorated significantly since the financial crisis, and that the benefits from globalization are now over:
This overwhelmingly positive income trend has ended. A new McKinsey Global Institute report, Poorer than their parents? Flat or falling incomes in advanced economies, finds that between 2005 and 2014, real incomes in those same advanced economies were flat or fell for 65 to 70 percent of households, or more than 540 million people (exhibit). And while government transfers and lower tax rates mitigated some of the impact, up to a quarter of all households still saw disposable income stall or fall in that decade.
As Bloomberg reports, Britain’s vote to exit the European Union exemplifies what happens when people feel like the system is letting them down, Richard Dobbs, the co-leader of the research, said in an interview Wednesday, ahead of the report’s release. He likened the buildup of resentment over globalization to a dangerous natural gas leak in a row of houses.
“One of them will explode. I did not think that it would be the U.K. first,” said Dobbs, a senior partner of McKinsey and a member of the McKinsey Global Institute Council in London.
“When we launch a new policy, let’s think about the impact on those groups” who have been left behind, Dobbs said. Sometimes the goals of fairness and efficiency can conflict, he said. “Are we prepared to damage competitiveness a bit to reduce the risk of an explosion?”
To be sure, just like the IMF’s U-turn on austerity after the failure of the second Greek bailout, McKinsey was unwilling to admit it has flop-flopped on such a critical position. Instead, Dobbs described the institute’s stance on globalization as an “evolution,” not a reversal. “We’re not saying throw it all out. … It’s about a sophistication in our thinking,” he said. The McKinsey Global Institute still sees value in offshoring, immigration, trade, and so forth, Dobbs said: “Generally we’re pro those, but there’s a however, and we need to be more aware of the however.”
In a startling finding, the report said that 65 to 70% of households in 25 advanced economies were in income segments that had flat to falling incomes between 2005 and 2014, up from less than 2 percent between 1993 and 2005. More troubling is that for some of the biggest supposed winners from globalization such as the US, this number is as high as 81%, while in Italy it soars to just shy of 100%!
A silver lining emerges when one takes into account “socialy equalizing” considerations such as transfers and taxes into account, aka government welafre. In that case, only 20 to 25% of households were in income segments that had flat to falling incomes between 2005 and 2014, the study said. Curiously, the biggest winners from this reindexation were such socialist nations as Sweden, France and… the United States, which when accounting for government generosity would report less than 2% of household segments with falling income (inexplicably, when applying government genersoity in Italy, the number of households who saw their income decline rose from 97% to 100%).
This is how McKinsey puts it:
Labor-market practices can make a difference, as can government taxes and transfers—although the latter may not be sustainable at a time when many governments have high debt levels. For example, in Sweden, where the government intervened to preserve jobs during the global downturn, market incomes fell or were flat for only 20 percent of households, while disposable income advanced for almost everyone.
In the United States, lower tax rates and higher transfers turned a decline in market incomes for four-fifths of income segments into an increase in disposable income for nearly all households. Efforts such as these—along with additional measures such as encouraging business leaders to adopt long-term thinking—can make a real difference.
A less spun way of saying that is that the vast majority of social inequality in the US has been “smoothed over” courtesy of the government over the past decade, which of course, is another way of saying that the political class holds hundreds of millions of Americans hostage: “if you want your welfare checks, EBTs, disability payments to continue, don’t you dare force a political change or else…“
One wonders just how sustainable this form of subsidized income truly is, especially if the mechanism that funds the US government apparatus, the dollar’s reserve status which allows the US to issue trillions in debt with impunity, is somehow impaired. Not only that but as McKinsey also admits, government transfers “may not be sustainable at a time when many governments have high debt levels.”
Why wasn’t it just McKinsey which one year ago “discovered” just how massive the global debt load had risen to in the years since the financial crisis.
Perhaps the report’s author could have synthesized McKinsey’s previous findings to comment on the viability of such an artificial approach to keeping people happy.
Still, that does not change McKinsey’s troubling conclusion that globalization is now hurting, not helping, the majority of people.
In fact, the summary adds, “If the low economic growth of the past decade continues, the proportion of households in income segments with flat or falling incomes could rise as high as 70 to 80 percent over the next decade. Even if economic growth accelerates, the issue will not go away: the proportion of households affected would decrease, to between about 10 and 20 percent—but that share could double if the growth is accompanied by a rapid uptake of workplace automation.”
The conclusion, silver lining notwithstanding, is a troubling one for the IMF and for all those who defend globalization at any cost:
These findings provide a new perspective on the growing debate in advanced economies about income inequality, which until now has largely focused on income and wealth gains going disproportionately to top earners. Our analysis details the sharp increase in the proportion of households in income groups that are simply not advancing—a phenomenon affecting people across the income distribution. And the hardest hit are young, less-educated workers, raising the spectre of a generation growing up poorer than their parents.
The economic and social impact is potentially corrosive. A survey we conducted as part of our research found that a significant number of those whose incomes have not been advancing are losing faith in aspects of the global economic system. Nearly one-third of those who are not advancing said they think their children will also advance more slowly in the future, and they expressed negative opinions about free trade and immigration.
They also tend to vote for things like Brexit and unsavory presidential candidates.
But our biggest concern is that just weeks after the BIS slammed central banks for merely boosting capital markets as a reaction to what is now clearly the failure of globalization to work ratably for all, and now McKinsey also splinter from the “all is well” camp, the response by policymakers has been one which not only does not address the underlying issue, but makes it even worse. Because if the world’s elites are still deluded into believing that propping the world’s stock markets to all time highs will somehow “trickle down” to the great unwashed masses, they will very soon get a very painful, and long overdue, reminder of just what happens in human history any time the vast majority is angry and feels betrayed by its “leaders.”
- Natural Gas Report Analysis 7-14-2016 (Video)
By EconMatters
A Bigger Build in Natural Gas inventories this past week compared to the last couple of weekly reports. We could go down to $2.50 per MMBtu the next couple of weeks if we get milder weather forecasts for the remainder of the summer season.
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- Still No Explanation For Dallas Gunman's Honorable Discharge
Almost a week after the Dallas sniper attacks, AP's Will Weissert reports that it's still unclear how the gunman obtained an honorable discharge from the military even though Army officials sent him home from Afghanistan with a recommendation that he be thrown out of the armed forces.
As we noted previously, exactly how Micah Johnson came to be the man who murdered five police officers in Dallas remains unsolved.
Johnson, a mid-twenties man (much like Bin Laden's son), apparently had taken his love for the ladies a little too far when he was serving in the Army Reserves. The killer who "stated that he wanted to kill white people, especially white officers", as we posted, had an apparent fetish for women's panties.
Johnson was kicked out of the Army for stealing panties, returned home as a soldier who fell from grace, was exposed to Eric Garner's July murder and Michael Brown's August murder, all while trying to negotiate a deal with his lawyer regarding his panty heist…. et voila, he became a crazed murderer.
At this point it has become clear that the story-line being spun to the public is one focused on the details. The people of Dallas and the rest of the world are to believe:
- an Army Reserve recruit stole panties,
- saw two high profile murders play out on American media,
- felt bad in the juxtaposition of Presidential praise in the midst of a possible discharge,
- had two guns stolen from him,
- then turned into a Dallas sniper much like Lee Harvey Oswald.
An attorney appointed by the military to represent Micah Johnson in a sexual harassment case speculated last week that Johnson's behavioral record could be more serious. The attorney says he's now under strict orders not to discuss the matter with reporters.
Johnson, 25, served in the Army Reserve for six years before the July 7 sniper attack, which killed five Dallas police officers."We are reviewing all of his records," Army spokesman Col. Patrick Seiber said Wednesday. He would not elaborate or discuss any aspect of the review.
Johnson's lawyer said he had prepared documents for a more severe other-than-honorable exit almost two years ago.
An other-than-honorable discharge is not as serious as a dishonorable discharge, the harshest form of dismissal from the military. The lesser punishment may be issued for misconduct, for security reasons or in lieu of trial by court-martial. In some cases, it can bar a soldier from re-enlisting or receiving some veterans' benefits.
Army lawyer Bradford Glendening was assigned to represent Johnson following an accusation of sexual harassment against him by a female soldier in his unit, Glendening said. Exactly what Johnson is accused of doing has not been made public.
Johnson deployed to Afghanistan in 2013, but was sent back to Texas with the recommendation that he be removed from the Army with an other-than-honorable discharge, said Glendening, who prepared the other-than-honorable discharge papers in September 2014.
However, Johnson didn't actually leave the service until the following April, according to service records released by the Army that do not classify his discharge.
His attorney later learned that the discharge was honorable.
"I was shocked to see that," he told The Associated Press by phone last week, less than 24 hours after the Dallas shooting. He said he never received final documentation on how Johnson's case was resolved.
"Somebody really screwed up but to my client's benefit," he said.
Since then, Glendening has declined to comment saying, "I'm under direct orders not to divulge anything further and am subject to military prosecution if I do."
Other members of Johnson's Army Reserve unit have suggested they are under similar gag orders as active-duty personnel.
The Army would not comment on those reports. Instead, it said all questions about Johnson's military service should be referred to the Army's public affairs office at the Pentagon.
Johnson entered the Army Reserve in March 2009 at age 18, after graduating from high school in the Dallas suburb of Mesquite. He was a carpentry and masonry specialist assigned to an engineer brigade based in Seagoville, south of Mesquite.
He deployed to Afghanistan in November 2013 as part of the 420th Engineer Brigade. He was accused of sexual harassment the following May.
Sending a soldier home from Afghanistan and then starting the process of removing him from the Army was "highly unusual" if it was based solely on a single sexual harassment complaint, Glendening said last week.
He said: "99 percent of the time, you counsel the soldier. You say, 'Don't let it happen again.' "
The attorney suggested that Johnson may have had other problems in his unit.
"It was not just the act itself," Glendening said. "I'm sure that this guy was the black sheep of his unit. Every unit's got one."
The accuser in the sexual harassment complaint has declined repeated requests for an interview with the AP. In a 2014 statement, she said she wanted Johnson "to receive mental help." She also sought a protective order against him "pertaining to myself, my family, my home."
Glendening said Johnson was subsequently ordered by the Army to stay away from his accuser. It's unclear whether he got mental counseling.
The Army last week released a brief summary of Johnson's record, detailing his dates of service, his deployment to Afghanistan and his awards.
* * *
Will the average American believe the narrative of a botched panty heist sparking a downfall that dragged Johnson through sensationalized US media coverage of murder, to a home invasion, all the while feeling ashamed about his own disgrace as the US President heaps praise upon his group?
… And now that narrative appears to breaking down as the military seem confused over the facts.
- Trump Postpones VP Announcement Due To "Horrific Attack" In France
With all the world’s eyes now firmly fixed on the south of France and the horrific ‘terrorist attack’ on Nice, Donald Trump has decided to postpone the announcement of his vice-president (until the next news cycle).
As Politico reports, Donald Trump will postpone the announcement of his vice presidential pick, citing the “horrible attack” in Nice, France, in which a tractor-trailer drove through crowded streets, killing scores.
Trump was scheduled to announce and introduce his selection Friday morning in Manhattan, but he tweeted Thursday evening that he would postpone the event.
In light of the horrible attack in Nice, France, I have postponed tomorrow’s news conference concerning my Vice Presidential announcement.
— Donald J. Trump (@realDonaldTrump) July 14, 2016
Another horrific attack, this time in Nice, France. Many dead and injured. When will we learn? It is only getting worse.
— Donald J. Trump (@realDonaldTrump) July 14, 2016
Trump was expected to reveal his vice presidential choice, widely believed to be Indiana Gov. Mike Pence, at an 11 a.m. news conference.
But, as The Hill reports, campaign manager Paul Manafort downplayed those reports Thursday, tweeting that Trump was still making the decision.
“A decision will be made in the near future and the announcement will be tomorrow at 11 am in New York,” Manafort tweeted Thursday.
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