Jan 20

Today’s News 20th January 2017

  • Here Were the Biggest Winners and Losers During Obama's Reign of Terror

    At the end of the Bush administration, I hated the republicans. George was such a fucking idiot, alongside the tea party retards. I viewed Obama as a welcomed respite. In hindsight, I probably voted for Obama to prove that I wasn’t some sort of redneck racist.

    The Obama administration was very good for stocks — maybe the best ever. But at what cost?

    The national debt has doubled, borrowing more than $9 trillion since 2008 and the Fed’s balance sheet has gone from $700 billion to $4.5 trillion. This whole economy is a fucking illusion, a sham. Try to unwind those positions and start paying down that debt and you’ll see the true nature of the economy and the markets.

    Obama did nothing, other than kick the can down the road — passing on a nuclear time bomb for future generations. By that fact alone, I consider Obama a grandiose failure, of the community organizing varietal. I’m not even going to get into the wars and his social policies — which has laid waste to the social fabric of America.

    So what stocks did the best over the past 8 years, an era defined by crony capitalism, massive advances in technology, and social networks?

    BAD NEWS FOR TRADERFAGS. Most of the big winners were held captive by FRED ‘Fucking’ WILSON and his crony capitalist VC pigs. Those greedy fuckers presided over monumental gains in social networks. Here are a few.

    Facebook: $4b valuation in 2008 to $363b today.
    Twitter: $1.5m valuation in 2008 to $12.3b today.
    Yelp: $200m valution in 2008 to $3.2b today.
    Snapchat: $485k in 2012 to $25b today.
    Airbnb: $20k valuation in 2009 to $30b today.
    Uber: $200k valuation in 2009 to $70b today.

    That’s where the real money was made. Let’s see what scraps were left over for us — the little rich people.

    $TREE +5,130%
    $NFLX +4,415%
    $JAZZ +4,400%
    $DPZ +3,517%
    $MKTX +3,300%
    $PCLN +3,100%
    $ULTA +3,000%
    $INCY +2,800%
    $MGPI +2,800%
    $PPC +2,200%
    $PRSC +1,700% (literally a welfare play)

    And here were the losers.

    $BBRY -85%
    $APOL -85%
    $SPWR -79%
    $SHLD -77%
    $FSLR -76%
    $RIG -75%
    $AVP -73%
    $FRO -73%
    $CYH -66%
    $JCP -66%
    $CHK -65%
    $BBG -64%

    Notice any trends? Which will be the biggest winners and trends under Trump?

    I saw a world in need of automation, superfluous comforts indicative of a nation with plenty of excess. It was an era of wanton hedonism for the elite, and a grueling struggle for everyone else. One cannot discuss Obama without thinking about healthcare — his cornerstone issue during his time in office. It failed and now we have to deal with the ramifications.

     


    Content originally generated at iBankCoin.com

  • Trump Versus The CIA

    Authored by Paul Craig Roberts,

    When I read Trump’s defenders, such as Daniel Lazare, having to balance their defense with denunciations of Trump, I think the CIA’s propaganda is working. In his article, Lazare asks the rhetorical question, “Is a military coup in the works?” He then goes on to describe the CIA and presstitute coup against Trump unfolding before our eyes. 

    Having described the unprecedented frame-up of the president-elect of the United States by the CIA and the Western media, Lazare has to square himself with those doing the frame-up:

    “This is not to say that the so-called President-elect’s legitimacy is not open to question. . . . Trump is a rightwing blowhard whose absurd babblings about Saudi Arabia, Iran and Yemen reveal a man who is dangerously ignorant about how the world works.”

    Note that Lazare goes beyond the CIA and the presstitutes by elevating Trump from someone not sufficiently suspicious of Vladimir Putin to “dangerously ignorant.” I suppose Lazare means dangerously ignorant like Bill and Hillary Clinton, George W. Bush, and Obama. If this is what Lazare means, why is Trump any less qualified to be president than his three most recent predecessors and his opponent in the election?

    Of course, Lazare has no idea what he means. He is simply afraid he will be called a “Trump deplorable,” and he stuck in some denuciatory words to ward off his dismissal as just another Russian agent.

    At other times I conclude that the CIA is discrediting itself with its fierce and transparently false attack on the president elect. The attack on Trump from the CIA and its media agents at the New York Times, Washington Post, CNN, the network TV channels, the BBC, the Guardian, and every other Western print and TV source with the exception of Fox News, is based on no evidence whatsoever. None of the US 16 intelligence agencies can produce a tiny scrap of evidence. The evidence consists of nothing but constant repetitions of blatant lies fed into the presstitute media by the CIA .

    We have witnessed this so many times before: “Tonkin Gulf,” “Saddam Hussein’s weapons of mass destruction,” “Iranian nukes,” “Assad’s use of chemical weapons,” “Russian invasion of Ukraine.”

    General Smedley Butler, the most decorated Marine in the history of the US military said that he and the US Marines spent their lives defending the interests of the United Fruit Company and some lousy investment of the banks in Latin America. That’s all the attack on Trump is about. Trump is saying that “America first” doesn’t mean a license for America to rape and plunder other countries.

    Normalized relations with Russia removes the orchestrated “Russian threat” justification for the $1,000 billion taxpayer dollars taken annually from ordinary Americans and given to the military/security complex via the federal budget.

    Trump’s question about the relevance of NATO 25 years after the collapse of NATO’s purpose—the Soviet Union—threatens the power and position not only of the US military/security complex but also of Washington’s European vassals who live high in money and prestige as Washington’s servants. All European governments consist of Washington’s vassals. They are accustomed to supporting Washington’s foreign policy, not having had a policy of their own since World War II.

    Trump is taking on a policy world long under the influence of the CIA. Little wonder WikiLeaks’ Julian Assange and a number of other clued-in people say that the CIA will assassinate Trump if he cannot be brought into line with a Western alliance organized for the power and profit of the few.

    So what is Trump to do?

    There are various alternatives. Trump could fire CIA director John Brennan, have the Attorney General indict him for treason, have the FBI locate all participants in the intelligence agencies and presstitute media who aided and abetted the attempted frame-up of the president-elect of the United States and put them all on trial. This would be the best and surest way for Trump to clean out the snakepit that is Washington, D.C. To call a snakepit a “swamp” is to use an euphemism.

    Another alternative is for Trump to make the obvious point that despite the allegations of the CIA and the presstitutes, any hacking that occurred was not the fault of Trump and Russia, but the fault of the US intelligence agencies who were too incompetent to prevent it. Trump’s trump question to the CIA, NSA, FBI is: So, you know the Russians hacked us and you did not prevent it? If you repeat your incompetence, I am going to fire everyone of you incompetents.

    The same goes for terror attacks. Trump should ask the intelligence agencies: “How were you so totally incompetent that a handful of Saudi Arabians who could not fly airplanes brought down three WTC skyscrappers and desroyed part of the Pentagon, humiliating the world’s sole super-power in the eyes of the world?”

    Trump should make the point that the huge amount of money spent on security does not produce security. The massive security budget cannot prevent hacking of an American election and it cannot prevent humiliating attacks on the SuperPower by a handful of Saudi Arabians operating independently of any intelligence service.

    Trump should raise the obvious question: Has the Saudi’s oil trillions purchased the CIA and the presstitutes so that the CIA and the corrupt Western media now serve foreign interests against the United States? The story is being established that the Saudis are responsible or 9/11 and nothing is done about it. Instead the Saudis are supplied with more weapons with which to murder women and children in Yemen.

    All of the CIA’s propaganda can be turned against the agency. 9/11 was due to CIA failure, and to nothing else. Putin’s theft of the US presidential election was due to CIA failure, and to nothing else. All the bombings in France, UK, and Germany are due to intelligence failings, and to nothing else, as is the Boston Marathon bombing and every other alleged “terror event.”

    I mean, really, the CIA is a sitting duck for Trump. He has every reason to abolish the agency that has traditionally operated in behalf of narrow interests. In his book, The Brothers, Stephen Kinzer documents the use of the CIA and State Department in behalf of the clients of the Dulles brothers’ law firm’s clients. The CIA serves no American purpose, only the private purposes of the ruling elites, who are the real deplorables who have used corrupt Western governments to solidify all income and wealth in a few greedy hands.

    There is no reason for Trump to tolerate spurious charges against him by the CIA. At best the CIA is incompetent. At worst the agency is complicit in, or organizer of, terrorist events.

  • Child at Anti-Trump Protest Starts Fire and Says 'Screw Our President' on National TV

    This is what happens when two libfags get together and breed. The child is innocent. This is a reflection upon them and their abhorrent parenting skills.

    Those same people featured above have been camped outside of the DeploraBall Event, with the keynote speaker being Milo from Breitbart, claiming they were Nazis — because MUH alt-right.

    Not before long, the savages could not contain themselves and ended up getting MACED in the face by police for attacking Deploraball attendees.

    This, of course, is DEVELOPING…

     


    Content originally generated at iBankCoin.com

  • Assange "Stands By" Extradition Offer; Promises "Big Publishing Year" In 2017

    Just yesterday we noted that Julian Assange and his lawyers were seemingly shying away from an offer they previously made to the Obama administration whereby Assange agreed to U.S. extradition in return for clemency for Chelsea Manning (see “Assange’s Lawyer Provides An “Out”: Says Conditions Not Met For Extradition Deal“).  While initial tweets from WikiLeaks implied that the extradition deal was still on, a follow-up from Assange’s U.S. attorney seemed to declare a technical breach of “contract.”

    “Mr. Assange welcomes the announcement that Ms. Manning’s sentence will be reduced and she will be released in May, but this is well short of what he sought,” said Barry Pollack, Assange’s United State’s attorney.

     

    “Mr. Assange had called for Chelsea Manning to receive clemency and be released immediately.”

    That said, on a live press conference held earlier today on periscope, Assange once again confirmed that he “stands by everything I said including the offer to go to the United States if Chelsea Manning’s sentence was commuted.”

    “We look forward to having a conversation with the DoJ [Department of Justice] about what the correct way forward is.”

     

    “I’ve always been willing to go to the United States provided my rights are respected because this is a case that should never have occurred.”

    The full press conference can be viewed here:

     

    Meanwhile, irrespective of what happens with his personal extradition agreement, Assange promised a “big publishing year” in 2017 with the popularity of the ‘Podesta Emails’ encouraging other sources to come forward with new leaks.

    Assange promised a “big publishing year ahead” for WikiLeaks, adding “I’m in love with the publications we have coming.”

     

    Following the media coverage the Podesta emails garnered, Assange said “that exposure has, like it always does, encouraged other sources to come forward.”

     

    “We have a lot of material to get through, it takes time,” he said, concluding that WikiLeaks’ decade-long record of accuracy is a valuable reputation to maintain.

    Among a litany of other topics, Assange also touched on the “fake news” epidemic saying that Facebook was “more or less in the tank for Clinton” and has become “integrated with the U.S. establishment.”

    Assange described Facebook’s attempts to stop fake news as “super interesting,” saying that as Facebook “became rich [it] has integrated with the US establishment,” adding the social media site was “more or less in the tank for Clinton” during the election.

     

    “Organizations like Facebook are permitting many people to publish billions at the touch of a button – that’s breaking down the control structure,” he said. ”That is a new circumstance in democracy.”

    Finally, touching on a topic we’ve written about frequently in recent months, Assange discussed the attempts of the establishment to dismiss any hint of legitimate opposition from a pissed off electorate as nothing more than a reflection of Russian propaganda….

    “There is that environment now, where you can see the incentives, so whatever propaganda Russia may be putting out, through RT or elsewhere, and it certainly has its angle on things, you can see the incentives for incumbents, like Merkel, just like we could see with Clinton to try and hype up an issue about potential Russian involvement.”

     

    “It’s not that they [the incumbents] have a genuine opposition.  It’s not that the people are annoyed with misbehavior in government, and of course there is, I’m not saying anything in particular about Merkel’s government, but as a government who misbehaves, well, there’s an attempt to go, any criticism of governmental misbehavior, corruption,  or incompetence, well it’s not the opposition or the people making a fuss, no it’s secretly the Russians.”

    …though we’re sure the Russians told Assange to say all of the above so we highly recommend you take it all with a grain of salt. 

  • Dynamic Scoring is More Voodoo Economics (Video)

    By EconMatters


    We discuss the $20 Trillion National Debt, the $5 Trillion Central Bank Balance Sheet and the 105 Percent Debt to GDP Ratio in the context of the environment that Donald Trump is going to inherent as President in this video. No more experimental policies, we know what works, cut government spending, keep tax revenue constant, and start paying down the National Debt.

    Every American needs to know these 3 charts backward and forward because you are the one who has to pay for this government spending and debt obligations over your lifetime. It is time that our government goes on a spending diet, no more military jets that we don`t really need, let alone can actually afford. There are no magic, fantasyland budgetary solutions and Dynamic Scoring and Laffer Curve nonsense to justify an agenda is unacceptable with a $20 Trillion National Debt staring us in the face this year.

    It is time to break it down to solid finance basics, spend less, keep revenue increasing slightly to account for the entitlements hitting the budget with babyboomers` entitlements obligations starting in 2018, build a budget surplus each year, and start paying down the National Debt with some Fucking Financial Discipline.

     

    © EconMatters All Rights Reserved | Facebook | Twitter | YouTube | Email Digest | Kindle    

  • "He Wants To Be Emperor" – How Mark Zuckerberg Is Scheming To Become President

    Submitted by Mike Krieger via Liberty Blitzkrieg blog,

    At this point, I’ve seen enough. It’s becoming quite clear that Facebook’s Mark Zuckerberg wants to be President of these United States.

    The topic first piqued my interest about a week ago when I read an article published at Vanity Fair titled, Will Mark Zuckerberg be Our Next President?

    Increasingly, a number of influential people in Silicon Valley seem to think that Mark Zuckerberg will likely run for president of the United States one day. And some people, including myself, believe that he could indeed win. “He wants to be emperor” is a phrase that has become common among people who have known him over the years.

     

    We’ll get to my theory on what that means a little later. First, let’s zip through the myriad indications that he might choose to throw his hoodie into the ring. Last year’s Facebook proxy statement articulated that Zuckerberg can run for office and still maintain control of his company. (To this end, Trump’s controversial precedent may facilitate any thorny political complications regarding the matter.) Then, over the holidays, Zuckerberg responded to a question about being an atheist, a belief he once professed, with a decidedly more politically circumspect answer: “I was raised Jewish and then I went through a period where I questioned things, but now I believe religion is very important.” (No one likes a president who doesn’t believe in some sort of God.) More recently, President Obama’s former campaign manager, David Plouffe, joined the philanthropic Chan Zuckerberg Initiative, to lead policy and advocacy. Other politicians from both parties have also joined the organization. And then there was the most obvious intimation: earlier this year, Zuckerberg, who has a habit of posting his annual New Year’s resolution on his Facebook page, declared that after conquering the previous challenges of learning Mandarin, and building an artificial-intelligence butler for his home, this year he was going to meet “people in every state in the US.” He noted that he’s “spent significant time in many states already, so I’ll need to travel to about 30 states this year to complete this challenge.” I wonder how many of those states are swing states?\

     

    If he does want the job, Zuckerberg definitely has the personality for it. When Facebook went public in 2012, I co-authored a profile of the young C.E.O. During the reporting, I heard from several friends about his penchant for playing world-conquering board and video games. Early childhood pals told me that one of Zuckerberg’s favorite video games as a boy was Civilization, the game in which you have to “build an empire to stand the test of time.” Others have told me that, to this day, Zuckerberg loves to play Risk, a strategy board game where you have to essentially take over the world. Believe it or not, he ended up applying some of these theories while forging and managing the extraordinary growth of Facebook, organizing his product teams in similar ways to his battalions in the board games. (According to someone close to him, these days Zuckerberg loves Game of Thrones and enjoys cooking a meat-laden “Dothraki Feast” while watching Westeros fall in and out of anarchy.)

    Then, this morning, I came across the following tweets.

    If that’s not enough for you, how about the team of 12 people now working on his personal page to make sure it’s perfectly pristine. Bloomberg reports:

    When Facebook went public five years ago, the world had a pretty vivid picture of who Mark Zuckerberg was. As much as anything, that image was of Jesse Eisenberg’s fictionalized performance as Zuckerberg in The Social Network: an intense, socially inept kid billionaire who always wore a hoodie, whether he was meeting with financiers or trying to screw a co-founder in court. Over the past couple of years, Zuckerberg has made a concerted effort to steer his image in a different direction.

     

    Near the end of 2014, he began holding Q&A sessions with groups of people wherever he was traveling around the world, fielding softballs ranging from lessons on startup-building to his favorite pizza toppings. Those town halls have evolved into near-daily posts on Zuckerberg’s own Facebook page, mixing news of company milestones with personal epiphanies, soft-focus photos from his life as a new dad, and responses to user comments. “What he’s learned over the last two years is that his image in the digital domain needs to be controlled,” says David Charron, who teaches entrepreneurship at the University of California at Berkeley. “And he’s simply growing up.”

     

    Zuckerberg has help, lots of it. Typically, a handful of Facebook employees manage communications just for him, helping write his posts and speeches, while an additional dozen or so delete harassing comments and spam on his page, say two people familiar with the matter. Facebook also has professional photographers snap Zuckerberg, say, taking a run in Beijing or reading to his daughter. Among them is Charles Ommanney, known most recently for his work covering the refugee crisis for the Washington Post. Company spokeswoman Vanessa Chan says Facebook is an easy way for executives to connect with various audiences.

     

    While plenty of chief executive officers have image managers, the scale of this team is something different.

    Naturally, Zuck doesn’t spend all of his free time smooching on Texas babies. So what’s he doing in between the professional photo shoots, Dothraki feasts, and playing cuddly tech oligarch for “ordinary” Americans? Well he’s suing native Hawaiians to get off his 700-acre, $100 million estate on the Hawaiian island of Kauai, of course.

    As reported by the Daily Mail:

    Mark Zuckerberg is suing Hawaiian families in an attempt to get them to sell their land to make his 700-acre property more secluded, a Honolulu newspaper reported Wednesday.

     

    Almost a dozen of small parcels on the Facebook co-founder’s $100 million Kauai property belong to Hawaiian citizens who acquired them through legislation dating back to 1850, called the Kuleana Act, according to the Star Advertiser.

     

    As such, these land owners are allowed to walk through Zuckerberg’s domain. But the billionaire is believed to have filed lawsuits against a few hundred people in the hope that they will sell their parcels at a public auction.

     

    Using the law to induce land sales, which isn’t uncommon in Hawaii, can be viewed as problematic because it severs the native Hawaiian community’s link to ancestral land.

     

    Zuckerberg is believed to have sued a few hundred people via several companies that he controls, the Star Advertiser reported. Some of these people, who inherited or owned interest in the land, are dead.

     

    Similar auctions have in the past led to below-market sales, but according to the Star Advertiser, some of those involved in the Zuckerberg cases believe the billionaire will offer a fair amount of money.

    I know that’s a lot to take in, so let me end this post with a little humor.

     

    No, that’s not real.

  • In Last Farewell, Russia Slams Obama Whose "Dumb" Actions "Claimed Tens Of Thousands Of Lives"

    In a scathing Facebook post, Russia’s former president and current Prime Minister, Dmitry Medvedev (who less than five years ago was assured by Obama that “he would have more flexibility”) gave his final assessment of US-Russia relations during the Obama administration, and lashed out at the outgoing US president, accusing him of destroying relations “between the United States and Russia, which are at their lowest point in decades” and predicting that “this is its key foreign policy mistake which will be remembered by history.”

    Medvedev was relentless, saying “US-Russia relations completely fell apart by the end of the second term of the Obama administration,” which has shown itself to be “short-sighted on such an important and complex issue as relations with Russia.”

    Despite some initial achievements in US-Russian relations, when “our countries signed a nuclear weapons reduction treaty, and Russia and the United States played a leading role in resolving the controversy surrounding the Iranian nuclear program” which gave “hope” to Russia that the two countries could establish good relations, that did not happen, for one reason: “the most important thing was to remember that Russia is not a banana republic (even though equal dialogue is a must with all members of the international community).”

    Obama’s mistake? Belittling a foe which saw itself a more equal with every passing day, “a country with defensive capabilities equal to the United States,” and a permanent seat at the UN Security Council (UNSC) deserved a different approach. “It is important to remember that Russia-US relations, without exaggeration, determine the fate of major international initiatives.”

    Why did Obama fail to grasp that foreign policy is a two-way street? Simple: according to Medvedev, “there is only one explanation for such actions: the interests of the United States. An explanation which is entirely defensible in America itself, though much less so in other countries.” But, he added accusing Obama not just of callousness, but outright stupidity, “the real issue lies elsewhere– the failure to understand one’s own true interests.”

    As a result, Obama’s “reckless” policies led to “the complete collapse of the political systems” and wars “which claimed tens of thousands of lives.”

    “Everyone is aware that the United States has always tried to” steer” almost all global processes, brazenly interfering in the internal affairs of various countries and waging multiple wars on foreign soil. Iraq, the Arab Spring, Ukraine, and Syria are just a few examples of such reckless policies in recent years. We can still see their consequences.“

    Taking the verbal humiliation up a notch, Russia’s prime minister then said “it doesn’t get any dumber than restricting entry to the United States for the leadership of the Russian parliament, ministers, and businessmen, thus deliberately reducing the possibility of full-fledged contacts and closing the window to cooperation. The bet was on brute force and sheer pressure. It is impossible to imagine such actions even during the Cuban missile crisis, even though the situation was much more serious then…”

    Having cast Obama on the trash heap of diplomatic history, the Russian did save some hope that relations between the two countries may recover thanks to Trump:

    “We do not know yet how the new US administration will approach relations with our country. But we are hoping that reason will prevail. And we are ready to do our share of the work in order to improve the relationship.“

    We can only hope that Trump will reciprocate.

    * * *

    Medvedev’s full Facebook post below:

    The administration of US President Barack Obama has come to a close and the results are decidedly mixed. I would like to give my assessment of Russia-US relations during this period, especially since I was directly involved in many events.

    On the one hand, Russia and the United States managed to work together to resolve a number of major international problems. Our countries signed a nuclear weapons reduction treaty, and Russia and the United States played a leading role in resolving the controversy surrounding the Iranian nuclear programme. We achieved the elimination of chemical weapons in Syria. These outcomes are important for the entire world.

    On the other hand, US-Russia relations completely fell apart by the end of the second term of the Obama administration.

    Everyone is aware that the United States has always tried to” steer” almost all global processes, brazenly interfering in the internal affairs of various countries and waging multiple wars on foreign soil. Iraq, the Arab Spring, Ukraine, and Syria are just a few examples of such reckless policies in recent years. We can still see their consequences, which range from the complete collapse of the political systems in these countries to wars which claimed tens of thousands of lives.

    There is only one explanation for such actions: the interests of the United States. An explanation which is entirely defensible in America itself, though much less so in other countries.

    But the real issue lies elsewhere– the failure to understand one’s own true interests.

    The Obama administration was completely short-sighted on such an important and complex issue as relations with Russia. There was hope that it would be smarter, more circumspect, and more responsible– despite differing assessments of complex international processes, varying approaches to key decisions, the role of emotion and the pressure exerted by various political forces. The most important thing was to remember that Russia is not a banana republic (even though equal dialogue is a must with all members of the international community). It is unacceptable to talk to a country which is a permanent member of the UN Security Council in such a manner. A country with defensive capabilities equal to the United States. It is important to remember that Russia-US relations, without exaggeration, determine the fate of major international initiatives. Often, we may like or dislike some of the policies of our key partners, but we must be aware of our common responsibility. This is something that the Obama administration failed to do.

    The pressure on our country has reached unprecedented proportions. Ill-considered economic sanctions, which did no one any good, have reduced our cooperation to zero. There were the ridiculous individual sanctions that nobody paid attention to. And it doesn’t get any dumber than restricting entry to the United States for the leadership of the Russian parliament, ministers, and businessmen, thus deliberately reducing the possibility of full-fledged contacts and closing the window to cooperation. The bet was on brute force and sheer pressure. It is impossible to imagine such actions even during the Cuban missile crisis, even though the situation was much more serious then…

    Who benefited from this? No one. Certainly not the United States. It didn’ t work.

    Conclusion: The Obama administration has destroyed relations between the United States and Russia, which are at their lowest point in decades. This is its key foreign policy mistake which will be remembered by history.

    We do not know yet how the new US administration will approach relations with our country. But we are hoping that reason will prevail. And we are ready to do our share of the work in order to improve the relationship.

  • China Grows At Slowest Pace In 26 Years Despite Record Debt, Currency Devaluation

    Amid constant liquidity additions, record credit support, a devaluing currency, and admission that the last three years of macro data was fabricated; China ended 2016 with the worst economic growth since 1990…

    China's macro data avalanche was a mixed bag. The headline GDP grew more than expected (+6.8% YoY) but Industrial Production disappointed and while retail sales rose more than expected, fixed asset investment growth missed.

    If debt is growth then China's transmission mechanism is officially FUBAR as Q4 saw the largest surge in aggregate financing ever…

    Credit expansion at close to twice the pace of GDP growth will be tough to sustain without putting financial stability at risk.  

    And a massive devaluation occurred in the yuan during Q4… (along with soaring bond yields and rising default risk)

     

    And the result of all that…

    • GDP (4Q): +6.8% BEAT +6.7% Exp
    • Industrial Production (Dec.): +6.0% MISS +6.1% Exp
    • Retail Sales (Dec.): +10.9% BEAT +10.7% Exp
    • Fixed Assets Investments (YTD): +8.1% MISS +8.3% Exp

    As Bloomberg notes,

    "Stable growth has come at the expense of higher leverage and bubbles from bonds to bitcoin. A policy shift toward controlling financial risks and curbing housing prices will weigh on the economy in 2017."

    On a long-term horizon, the economy seems to be filled by ever-growing debt rather than investment or consumption.

    Reaction from Stephen Innes, a Singapore-based senior trader at foreign exchange company Oanda:
    "GDP beat market expectations. Mind you, China’s growth remains supported by massive government spending and record-setting bank lending which in itself continues to fuel asset bubble fears."

    *  *  *

    As a reminder, Bloomberg notes that a shrinking working-age population, reduced scope for additions to the capital stock and diminished space for productivity gains mean that China's potential growth is slowing. Bloomberg Intelligence estimates potential growth at 7.1% in 2016, down from 7.3% in 2015 and on a path to 6.5% by the end of the decade.

    As Enda Curran, Bloomberg's Chief Asia Economics Correspondent, concludes…

    Of course, there is a cost to propping up GDP like this. And that's debt.

     

     

    It's hard to look past the headline number without considering the gargantuan lending China's banks were forced to pump into the economy to keep things chugging along. We know that policy makers are aware of this risk given the recent signals about prudent monetary policy and a tolerance for slower growth.

    The initial fallout was a drop in the offshore Yuan rate (following Yuan strength going into the numbers thanks to Yellen's dovish comments)…

     

     

  • California Governor Jerry Brown Admits To $1.5 Billion "Math Error" In State Budget

    Budgeting can be difficult, particularly for expansive state budgets that require a ton of inputs to support 1,000s of line items each of which can result in massive variances depending on the development of various economic indicators like interest rates, commodity prices, etc. throughout the year.

    That said, while forecasting variances are inevitable, we, as taxpayers, generally rely on our expensive budget office employees to at least present annual budgets that reflect sound mathematics and accounting principles.  Unfortunately, that seems to be too much to ask of the math-challenged administration of California Governor Jerry Brown which decided to double count certain cost savings and simply “forgot” to incorporate other expenses altogether.  Per the LA Times:

    Budget staffers said there were, in fact, two mistakes:

     

    –  A double counting of state savings from a program that coordinates health, behavioral and long-term care services with local government. That error understated expenses by $913 million.

     

    –  A forgotten state government cost from two counties — San Mateo and Orange — enrolling in the coordinated program, which meant missed expenses of $573 million.

    Jerr Brown

     

    Embarrassingly, when asked about the “mistakes” that resulted in a $1.6 billion budget deficit, the Chief Deputy Director of Brown’s Department of Finance could offer no other explanation than that the “math was wrong” while another spokesman admitted, “There’s no other way to describe this other than a straight up error in accounting, which we deeply regret.”

    Meanwhile, adding insult to injury, Brown’s administration allegedly discovered their “accounting errors” several months ago but didn’t disclose them to State Senators until last week.  Per Mercury News:

    The administration discovered accounting mistakes last fall, but it did not notify lawmakers until the administration included adjustments to make up for the errors in Brown’s budget proposal last week.

     

    The Department of Finance said it did not account for $487 million in rebates from drugmakers that the state must pay the federal government to reimburse Washington for its share of Medi-Cal drug costs.

     

    The state also miscalculated costs for the Coordinated Care Initiative, an experimental program in seven counties to improve care for a group of high-needs patients eligible for both Medi-Cal and Medicare, the federally funded health plan for seniors and people with disabilities.

     

    Officials double-counted some of the expected savings, leading to a budget hole of $913 million, and undercounted the costs in San Mateo and Orange counties by $573 million.

     

    In his spending plan, Brown proposed eliminating the Coordinated Care Initiative because he said the program was not cost effective, angering counties that said the change would shift $550 million in costs to them.

    Of course, the blatant attempt to cover up their “math error” rather than quickly admit the mistake last fall, led California State Senator John Moorlach to ask the obvious question of what other errors may be buried in the expansive budget, saying “It makes you wonder what else is not right. … When something like this happens, the trust factor gets eroded, and you lose confidence in what’s being provided to you.”  But, no matter the size of the various other “math errors” that come to light, we’re quite certain that California’s liberal legislators in Sacramento stand ready, willing and able to implement whatever tax hikes may be necessary to address such issues.

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