- War Breaks Out Between Neo-Cons And Libertarians Over Trump's Foreign Policy
In late October, when it was still conventional wisdom that Hillary was “guaranteed” to win the presidency, the WaPo explained that among the neo-con, foreign policy “elites” of the Pentagon, a feeling of calm content had spread: after all, it was just a matter of time before the “pacifist” Obama was out, replaced by the more hawkish Hillary.
As the WaPo reported, “there is one corner of Washington where Donald Trump’s scorched-earth presidential campaign is treated as a mere distraction and where bipartisanship reigns. In the rarefied world of the Washington foreign policy establishment, President Obama’s departure from the White House — and the possible return of a more conventional and hawkish Hillary Clinton — is being met with quiet relief.”
The Republicans and Democrats who make up the foreign policy elite are laying the groundwork for a more assertive American foreign policy via a flurry of reports shaped by officials who are likely to play senior roles in a potential Clinton White House.
Oops.
Not only did the “foreign policy” elite get the Trump “scorched-earth distraction” dead wrong, it now has to scramble to find what leverage – if any – it has in defining Trump’s foreign policy. Worse, America’s warmongers are now waging war (if only metaphorically: we all know they can’t wait for the real thing) against libertarians for direct access to Trump’s front door, a contingency they had never planned for.
As The Hill reported earlier, “a battle is brewing between the GOP foreign policy establishment and outsiders over who will sit on President-elect Donald Trump’s national security team. The fight pits hawks and neoconservatives who served in the former Bush administrations against those on the GOP foreign policy edges.”
Taking a page out of Ron Paul’s book, the libertarians, isolationists and realists see an opportunity to pull back America’s commitments around the world, spend less money on foreign aid and “nation-building,” curtail expensive military campaigns and troop deployments, and intervene militarily only to protect American interests. In short: these are people who believe that human life, and the avoidance of war, is more valuable than another record quarter for Raytheon, Lockheed or Boeing.
On the other hand, the so-called establishment camp, many of whom disavowed Trump during the campaign, is made up of the same people who effectively ran Hillary Clinton’s tenure while she was Secretary of State, fully intent on creating zones of conflict, political instability and outright war in every imaginable place, from North Africa to Ukraine. This group is pushing for Stephen Hadley, who served as national security adviser under George W. Bush. Another Bush ally, John Bolton whose name has been floated as a possible secretary of State, also falls into this camp.
According to The Hill, other neo-con, establishment candidates floated include Senate Foreign Relations Committee Chairman Bob Corker (R-Tenn.), outgoing Sen. Kelly Ayotte (R-N.H.), rising star Sen. Tom Cotton (R-Ark.), and senior fellow at conservative think-tank American Enterprise Institute and former Sen. Jim Talent (R-Mo.).
“These figures all generally believe that the United States needs to take an active role in the world from the Middle East to East Asia to deter enemies and reassure allies.”
In short, should this group prevail, it would be the equivalent of 4 more years of HIllary Clinton running the State Department.
The outsider group sees things differently.
They want to revamp American foreign policy in a different direction from the last two administrations. Luckily, this particular camp is also more in line with Trump’s views questioning the value of NATO, a position that horrified many in the establishment camp.
“How many people sleep better knowing that the Baltics are part of NATO? They don’t make us safer, in fact, quite the opposite. We need to think really hard about these commitments,” said William Ruger, vice president of research and policy at the Charles Koch Institute.
A prominent member of the outsiders is Rand Paul, skeptic of Bush’s foreign policy, who has criticized Bolton in the last few days. Paul on Tuesday blasted Bolton in an op-ed in Rare as “a longtime member of the failed Washington elite that Trump vowed to oppose.”
Others, however, have defended Bolton. Eliot Cohen, a former Bush State Department senior adviser, tweeted late Tuesday that Bolton “would be a capable Secretary of State — experienced & tough.”
Then again, what Cohen thinks does not matter: he is perhaps the most visible foreign policy establishment type who has been critical of Trump’s transition. He said this week that he had been asked by a friend in Trump’s orbit to submit names of people in the establishment who might want to serve. Cohen told his friend that those skeptical of Trump would want to know who was leading his administration on foreign policy.
When Cohen grew critical of those questions, he wrote a biting op-ed in The Washington Post advising people to not work for Trump, at least for the time being. “At the very least, they should wait to see who gets the top jobs. Until then, let the Trump team fill the deputy assistant secretary and assistant secretary jobs with civil servants, retired military officers and diplomats, or the large supply of loyal or obsequious second-raters who will be eager to serve,” he wrote.
Some saw the op-ed as good news, believing it signified a radical turn by Trump from a foreign party establishment that should be ignored. “The first encouraging news I’ve heard in days. If a leader of #NeverTrump is saying this, that means the establishment hasn’t won. Yet,” said Christopher Preble of the CATO Institute.
However, neo-cons are bad at losing, so they have redoubled efforts to land one of their own next to Trump. Lindsey Graham, a prominent foreign policy hawk in the Senate, issued an endorsement of Bolton on Thursday, saying: “He understands who our friends and enemies are. We see the world in very similar ways.”
He also slammed Paul’s criticism of Bolton: “You could put the number of Republicans who will follow Rand Paul’s advice on national security in a very small car. Rand is my friend but he’s a libertarian and an outlier in the party on these issues.”
Funny, that’s exactly what the experts said about Trump’s chances of winning not even two weeks ago.
Meanwhile, the biggest warmonger, Senate Armed Services Committee Chairman John McCain, who has not said who he’d like to see in Trump’s cabinet, laid down a marker on Tuesday by warning the future Trump administration against trying to seek an improved relationship with adversary Russia. “When America has been at its greatest, it is when we have stood on the side those fighting tyranny. That is where we must stand again,” he warned.
Luckily, McCain – whose relationship with Trump has been at rock bottom ever since Trump’s first appearance in the presidential campaign – has zero impact on the thinking of Trump.
Furthermore, speaking of Russia, Retired Amy Col. Andrew Bacevich said there needs to be a rethink of American foreign policy. He said the U.S. must consider whether Saudi Arabia and Pakistan qualify as U.S. allies, and the growing divergence between the U.S. and Israel. “The establishment doesn’t want to touch questions like these with a ten foot pole,” he said at a conference on Tuesday hosted by The American Conservative, the Charles Koch Institute, and the George Washington University Department of Political Science.
Furthermore, resetting the “deplorable” relations with Russia is a necessary if not sufficient condition to halt the incipient nuclear arms build up that has resulted of the recent dramatic return of the Cold War. As such, a Trump presidency while potentially a failure, may be best remember for avoiding the launch of World War III. If, that is, he manages to prevent the influence of neo-cons in his cabinet.
And then there are the wildcards: those Trump advisers who are difficult to peg into which camp they fall into. One example is retired Army Lt. Gen. Michael Flynn, former head of the Defense Intelligence Agency, who was selected by Trump as his national security adviser. Flynn is a “curious case,” said Daniel Larison, senior editor at The American Conservative. The retired Army general has said he wants to work with Russia, but also expressed contrary views in his book “Field of Fight.”
According to Larison, Flynn writes of an “enemy alliance” against the U.S. that includes Russia, North Korea, China, Iran, Syria, Cuba, Bolivia, Venezuela, Nicaragua, al-Qaida, Hezbollah, and the Islamic State in Iraq and Syria. From that standpoint, he is about as “establishment” as they come.
It’s also not crystal clear which camp Giuliani falls into. The former mayor is known as a fierce critic of Islamic extremism but has scant foreign policy experience.
Most say what is likely is change.
“Change is coming to American grand strategy whether we like it or not,’ said Christopher Layne, Robert M. Gates Chair in National Security at Texas A&M University.
“I think we are overdue for American retrenchment. Americans are beginning to suffer from hegemony fatigue,” he said.
And, let’s not forget, the tens of thousands of innocent men, women and children who are droned to death every year by anonymous remote-control operators in the US just so the US can pursue its global hegemonic interest.They most certainly have, and unless something indeed changes, will continue to suffer, leading to even more resentment against the US, and even more attacks against US citizens around the globe, and on US soil. Some call them terrorism, others call them retaliation.
- Trump "Ripped" Into Chris Christie Before Demoting Him By Phone Call
After months of disappointments for Chris Christie, once one of the Republican Party’s brightest stars, the New Jersey governor was virtually assured a position in a Donald Trump administration. As one of the first big-name politicians to endorse the Manhattan billionaire, Christie had earned Trump’s gratitude the pundits predicted. And then everything fell apart.
Among the top political stories in the week of Trump’s election, was that just a few months after being denied the VP slot, Christie suffered another public humiliation when he was demoted as Chairman of Trump’s presidential transition team, and was replaced by VP Mike Pence.
Thanks to a Politico report, we learn the details of the embarrassing phone call in which Trump “ripped” into Christie, before removing him from his transition team.
In the phone call, “Trump expressed his worry about the recent conviction of two of the governor’s former top aides, who had accused him of knowing more about the shutdown of the George Washington Bridge than he let on. Was more damaging information to come, Trump wondered?”
Trump and his top aides were most concerned about two issues, according to nearly a dozen people briefed on the process: Christie’s mismanagement of the transition, and the lingering political fallout of the Bridgegate scandal.
Trump was also unhappy with the number of lobbyists that Christie had on the transition team, as well as his choice to fill the staff with his own friends and loyalists.
In the days following the election, Trump expressed deep frustration about how Christie was handling the transition. In particular, he vented about how the governor had loaded up the team with lobbyists, the very class of people Trump had campaigned against, with his calls to “drain the swamp” in Washington. The president-elect also noticed that Christie had stocked his team with old New Jersey friends and allies.
There were other issues. Once the dust settled from their surprise win, the Trump team noticed that Christie had done little to vet potential administration picks or to dig into potential conflicts of interests. With Democrats eager to pounce on any early mistake, it was an oversight they simply couldn’t afford.
Additionally, Christie was reportedly deeply disliked by Trump’s son-in-law, Jared Kushner, who has become an influential advisor on the Trump campaign:
In the months to come, Kushner, a 35-year-old New York City real estate mogul who grew up in New Jersey, would become a bigger problem for Christie, arguing forcefully against Trump making the governor his running mate. Christie, a former U.S. attorney, became convinced that Kushner was retaliating over his 2004 prosecution of Kushner’s father, Charles.
Still, while they never became close, Kushner and Christie agreed to work together. At several points, according to two sources, Trump took steps to forge a warmer relationship between them — apparently without success.
Kushner’s allies say the idea that he’s out for personal vengeance, promoted in several recent stories, is simplistic and overblown. Rather, they argue, the Trump son-in-law has more substantive concerns — viewing the governor as badly damaged following the Bridgegate affair. And in the days following the election, Kushner told others in Trump Tower that Christie oversaw a messy, lobbyist-filled transition operation that simply needed to be cleaned up.
By Thursday of last week, Trump was telling aides that he was ready to make a change.
* * *
How is Christie faring now and what are his future prospects?
In recent days, Christie’s advisers have reached out to him to see how he’s holding up. He’s fine, he’s told them. It was only a matter of time that the transition process would be taken from him once the election was over. On Thursday, during an appearance in Atlantic City, Christie waved off talk about his career prospects — and criticized reporters for “prognosticating” about his future.
“I know all of them have taken inordinate concern, just in the last 10 days or so, about my future. All of them have become, you know, employment counselors,” he added. “I have every intention of serving out my full term as governor — I’ve said that from the beginning.”
Christie’s advisers speculate that the governor might exit politics entirely when his term expires in January 2018. Some of them suggest that Christie, an avid sports fan, could take a job as a sports radio host. He is an occasional guest caller to WFAN, the popular New York City-based sports talk station. To some, it’s far too early to write him off. “He’s the most interesting politician I’ve seen since Bill Clinton,” said former New Jersey Gov. Tom Kean, a Christie mentor. “He’s got an enormous set of skills.”
- Fear And Loathing Inside The Deep State
Submitted by Larchmonter445 via The Saker,
Everyone in the Deep State is threatened by the Trump Presidency. The Deep State understands that power, funding, ideological stratagems and domination of government, media, academia, think tanks and NGOs are in the ‘field of fight’, to use the book title by a prime target the Deep State intends to destroy in order to save itself from Trump.
Lt. General (ret.) Michael T. Flynn
Lt. General (ret.) Michael T. Flynn, three-star expert in Military Intelligence, former director of the Defense Intelligence Agency (DIA), counselor to Trump for the last fifteen months, is a vital Trump ally the Deep State is attempting to discredit.
We have seen the one-week ferocious political and media attack on Stephen Bannon, begun the instant that Bannon was named Trump’s number one strategist-advisor. Bannon is the theologian of Drain the Swamp, the Trump policy to rid the system of corruption and catastrophically disastrous policies and bureaucrat enablers.
To understand Steve Bannon, take the time to read this transcription or listen to the audio Q&A from a 2014 event in the Vatican. He lays out his philosophical agenda, and used the 2016 campaign to advance his war on the Elites.
Drain the Swamp pertains to more than getting the corruption out of the system.
Steve Bannon
Bannon now has Trump’s full backing to destroy the UniParty, defeat the Globalists, banish the warmongers of the MIC and help the legal prosecution of the corrupt. This is the Revolution to end the domestic Tyranny and the global Hegemon.
The usual weapons of personal destruction have been launched at Bannon to destroy him and to deprive Trump of his most effective counselor and field marshall. Bannon has been branded a racist, an anti-semite, a white supremacist, an Islamophobe and a misogynist. In every forum and media outlet, the meme of Bannon being the worst human on the planet played as intensively as how the Dems attacked Trump during the campaign.
Relentless lies, chorused by every host, talking head, and hater of every value Trump and Bannon had campaigned for were spewed on Bannon’s name. All fabricated, most based on a few headlines written by Milo Yiannopoulos in Breitbart.com, alt right agitprop pieces constructed to collect reader clicks, revenues for Breitbart and fame for Milo. Bannon as chief of Breitbart was then scourged for those headlines. Mockery by Milo used against Steve Bannon.
It was all the Media needed. But the Deep State directed it for good reason. Bannon is the Pale Rider coming to destroy them.
Steve Bannon is dedicated to cleansing government and the financial system controlled by all those who have reigned over the foreign regime changes, the transfer of middle class wealth and income to Wall Street, paper wealth from derivatives to hedge fund and corporate global leaders, trillions to the 0.01% elites, all of whom populate the Ultra Wealthy Class, a new feudalism of billionaires and millionaires.
Bannon’s life long credentials and work with Jews, Blacks, females and Muslims eventually helped stifle the Media excesses. But the vicious branding may stick long after the inauguration.
The fear and loathing of the Deep State is focused on another nemesis and threat in the person of General Flynn. Flynn challenges the Deep State’s incompetence, particularly its lack of results in the fight against terrorism. Flynn dealt with this in the wars in Iraq and Afghanistan. He wrote a white paper on the state of US military Intelligence and the need to fix it.
Flynn also is sickened with the 2012 Benghazi event and coverup, the lies of Clinton and the abandonment by the command structure of CIA, Pentagon, State and NSC. The Syrian war, the attempted coup of Erdogan, and the carnage wrought by bad policies, sheepish leadership and less-than-best methods of Intelligence gathering and usage motivated the General to join Trump.
Flynn is now Trump’s guide into the Presidential raw data Intel reports and briefings. General Flynn is Trump’s personal analyst for interpretation of the data. Flynn has attended every briefing Trump has received. He is in place and the Deep State is out. So, they have mounted their counter-attack as soon as it was clear he would head the reform of the Intelligence community, and serve the newly elected President.
Flynn has recruited over two hundred generals and admirals and twenty-two Medal of Honor recipients to the successful Trump campaign. Now some of the generals are possible cabinet or undersecretary department nominees or agency appointees.
The Deep State is in deep trouble. General Flynn will probably be NSC head and I think he will have real power over fifteen other Intelligence agencies. Flynn may have great power over huge swaths of the MIC. He certainly will assist in the cleaning out of neocons and feckless employees, managers, supervisors and directors.
Against Flynn, the Deep State is using a more traditional model of career attack and personal destruction than it did with Bannon. Multiple articles written to show that Flynn and Putin, Flynn and Russia, Flynn and RT media are part of the Trump gang of pro-Russian contacts connected to the Kremlin.
Below is General Flynn at dinner with President Putin in Moscow. He explains in an interview.
Other Trump-Putin supposed contacts are Carter Page and Paul Manafort, both of whom were attacked by the Media for the Deep State months ago. They resigned under political pressure applied through the media.
In a payback, the Deep State lost some of their own sent to the Trump campaign who were unable to survive first inspection. They were dropped from the Trump campaign transition team.
But, once Trump is sworn in, Carter Page will be back, most likely. He has connections to Gazprom, is well-liked in Moscow, and will be a link for American energy companies and perhaps some joint ventures in the gas field development and pipeline industry. Several friends of Trump are from the gas and oil industry, and the world is a small world when energy is the issue. The Arctic, the eastern Mediterranean, the South China Sea and other large development zones have enormous new fields to be tapped and exploited. Even the Black Sea zone around Crimea has yet-to-be-tapped energy stores.
The primary interest of the Trump foreign policy will be to make America wealthy again. The Eurasian development has already attracted Trump to the OBOR of China and the AIIB infrastructure bank. Probably the entire New Silk Road of China and EAEU of Russia is not going to be without major US participation. The difference now is facilitation, participation, investment and benefits instead of obstruction, destabilization and terrorism used to thwart it all.
To destroy Flynn and weaken Trump with the Intelligence and Military communities, the classic Washington technique of long articles with many negative anonymous sourced comments was used, carefully crafted headlines and paragraph headers, all designed for very negative Google Search feeds.
The latest is about Flynn and Turkish “operatives”. Sounds like they met in dark alleys or underground passageways. Maybe in some Ankara safehouse, eh?
It turns out quite differently.
Hilal Mutlu (left) and Ibrahim Kurtulus (center) with Retired Lt. Gen. Michael Flynn at Oct. 10, 2016 event. (Youtube screen grab)
But Flynn is obviously being watched closely by CIA/State Dept. They know he is doing the bidding of Trump. And for good reason, Trump needs to know which way Turkey is leaning post-coup? And how sensitive is the Kurd issue in Syria? What are the ramifications of the US and Russia working in tandem against ISIS in Syria? Will Turkey help with safe zones for refugees? Will Turkey leave Syria after the war or does it plan to resist Russia and Assad? What about NATO? What about the Uyghurs Turkey protects, and is China being forced to come with military to put down the Uyghurs inside ISIS? Will the issue of demanding Fethullah Gulen’s extradition continue? Will there be mass death penalties for the imprisoned coup participants and Gulen’s followers?
Flynn had a panoply of possible questions to be answered by the operatives from Erdogan. And the Turks would have questions they wanted answered with some hint of Trump’s positions.
The Deep State are tracking Flynn and the Turks and are now exposing his links as a professional consultant. Nothing illegal. Nothing suspicious. Nothing out of the ordinary. But it was General Flynn, Trump’s guy. Smear him.
How else would this information surface in the Washington Post except from the Deep State? And if you know the history of the Deep State, the WaPo is their first choice for all leaks, briefings in depth, exposes used to undermine officials who cross them or who point to the Deep States’ misdeeds or failures. You won’t find Sy Hersh’s articles in WaPo.
The point of the articles about General Flynn was to shame him, to put down his personality, his lack of obedience to the Obama regime. He was investigated for giving Intel to foreign nations, we are told. He shared Intelligence with the Pakistanis, we are told. Read how his fellow generals talk about him.
Imagine if the Deep State decided that Intelligence should never be shared. Well, the U.S. would have no allies. No nation joins a war effort without Intelligence for their military. Flynn, whose entire thirty-plus year career has been in Intelligence understands that. And he did it. Proudly, he related to the investigators, and it all was dropped except the record and the reporting of it now.
The investigation was actually to cast a black mark on Flynn to be found later, by the uninformed, at the most sensitive of times. In this case, it is to weaken Flynn, to weaken Trump.
“Mike Flynn shares Intel. Mike Flynn acts without checking with what the Deep State wants.” It turns out that Flynn did get approval for all he did. But he simply did the professional thing. He acted in behalf of his specialty, his profession, his oath of duty and the American people who paid him to protect America.
There is something to be gained by studying this meeting with Turkey’s operatives. Flynn’s meeting signals that Trump will not likely arm the Kurds with heavy weapons. That would drive Turkey into the Russian-Iranian embrace fully. A practical solution to defeating ISIS and AQ and ending the Syrian war has to avoid losing Turkey. Trump is not going to be trying to coup anyone. His policy is no regime changes. He also does not like these secret wars of the CIA. If there is to be war, he wants it fought by the military, with a plan for victory. Principally, Trump’s wars will be like President Eisenhower’s. There were none for eight years.
The warmongers and neocons of the Deep State and surface government will try to work over all the Trump nominees in the security and policy arena. Trump has refused to listen to any of them, though a few have been invited in to the goings on. However, we don’t know who is talking to Trump and who is talking to the various panels of experts that will advise who they think he should select. So a few neocons and warmongers like John Bolton and General Keane have made it into Trump Tower. But he eschewed them all these years and throughout the campaign. I doubt they will have any role in policy. He considers them failures.
Expect very deep shakeouts at CIA and State. I think Flynn will use fellow military he knows and trusts as deputies and undersecretaries. General Keith Kellogg and General Ronald Burgess are likely for important positions.
There has to be this cleaning out of the subterranean world of the Deep State. If President Carter got rid of 800 officers when Stansfield Turner tried cleaning out the CIA, I’m betting there are 1500 officers in the CIA who need retirement now.
As for the State Department and the Clinton corruption of pay for play, that is only half the problem. The eighty years of Khazarian dominance of the State Department has created the need that whole thing ought to be shut down except for visas at embassies and consulates. (I’d use the Commerce Department in the interim. Send everyone else from State home. Board up Foggy Bottom for ten years.)
Addendum: General Flynn early in the primary campaign consulted as advisor to five candidates. Carly Fiorina, Scott Walker, Ben Carson, Ted Cruz, and Donald Trump. He chose Trump as the one who wanted to be President in order to fix the country and make America great again. Now, Trump, Bannon and Flynn are going to drain the swamp, if they can survive.
(Flynn has been named NSC Advisor and will command a staff of 400 from all the other Intel agencies, it has been reported by Fox and AP.)
- "Brace For Economic Disruption" SocGen Sees "Sharp Rise In Gold" As India Plans Cap On Cash Holdings
India's 'de-monetization' scheme has caused chaos across the nation, and while SocGen says the government's plan may have some short-term success in curbing so-called 'black-money', investors should "brace for economic disruption" as Bloomberg reports the Indian government is considering a cap on cash holdings for individuals. As SocGen concludes, "people will now be more inclined to park their black income in gold rather than in currency."
The daily images of utter chaos in India that has brought the conutry's economy to a standstill since they unleashed their war on cash…
Are perhaps about to get worse, as Bloomberg reports, India is set to consider a cap on cash holdings for individuals…
Measure planned to prevent people from hoarding cash and generating income that could evade taxes, according to government officials with direct knowledge of the matter.
Planned measures include limit on large cash withdrawals from bank, the officials said, asking not to be identified citing rules on speaking to media.
Budget, due in February, may have steps to encourage use of checks, credit and debit cards.
Purchase of gold jewelry said to be made more stringent to prevent switching of asset from cash.
Finance Ministry spokesman D. S. Malik couldn’t be reached for comment.
But, as SocGen's Kunal Kumar Kundu writes, the demonetisation scheme (banning the use of old high-denomination banknotes – INR500 and INR1000) announced by India’s PM Modi on 8 November is likely to have only a short-term impact on corruption and black money, unless it is followed by multiple other moves aimed at curbing these issues.
However, we do expect short-term disruption to the economy, especially in rural areas, due to a sharp drop in consumption as the cash crunch hits. The extent of the disruption will depend on how soon new banknotes come into the system. If this takes place over the next three to four weeks (as promised by the government) the damage should be limited. Otherwise, the disruption could be prolonged. At the same time, there is also a possibility of a short-term increase in tax revenue collection which could enable the government to keep its deficit within target and continue with all its desired expenditure (including capex) which we earlier feared may have to be curtailed as deficit challenges manifested. In the interim, sectors that are heavily dependent on cash transactions (essentially because these are gateways to parking black income), i.e. construction, real estate and gems & jewellery, are likely to be adversely affected over the short term.
On the macro front, weaker consumption could mean lower inflation, thereby opening up the possibility of an earlier rate cut by RBI. Additionally, with people being forced to deposit large quantities of high-value notes, banks are seeing a surge in low-cost deposits which should lower cost of funds and result in faster transmission of monetary policy action through the interest rate channel. However, given the current weak credit environment, we see a spike in credit growth as unlikely. The only potential long-term effect of this move could be deterioration in India’s current account deficit (CAD), as people will now be more inclined to park their black income in gold rather than in currency, thereby leading to sharp rise in gold imports.
India’s fight against black money – the end has corrupted the means
At around 8pm on 8 November, India’s PM Modi announced, in a broadcast to the nation, that India’s INR500 and INR1000 banknotes would no longer be recognised as legal tender from midnight and that citizens would be able to exchange their existing notes of these denominations for other available (and legal) tender until 31 December 2016. The aim of the action was to counter tax evasion, counterfeiting and corruption. The idea of eliminating large denominations is that it makes it harder to hide large amounts of cash.
The problem with the move is that, in one fell swoop, just over 86% of all banknotes in circulation became just paper. Fact is, high percentage of transactions take place in cash in India, especially in the rural areas. The potential fallout from such a nationwide measure could have been averted if the government had been better prepared to handle the contingencies. However, the need for the government to keep the move a secret — so that tax evaders wouldn’t be alerted before the demonetisation took place — affected preparedness. Even Finance Minister Jaitley admitted that it would take two to three weeks to reconfigure the ATMs to handle the newer and larger notes. Given that India currently has about 202,801 ATMs all over the country, it could potentially take longer.
Existing loopholes have provided an escape hatch
Before discussing the economic impact of the move, it is important to understand the potential impact it could have on the existing block of black money in the economy and its ability to stop generation of further black money in the economy in the future. We think that while the existing stock of black money will be negatively impacted, only part of it will actually come to the fore. There are still many loopholes in the system through which a large portion of black money is able to enter the formal banking channel without the government’s knowledge. While the country is receiving virtually one notification per day from the RBI to plug loopholes that are coming to light (another indication of lack of preparedness), this process looks set to continue. Thus, only part of the black money will actually be reported and experts think that some of it will never come back.
Black money represents only a small fraction of black wealth
The problem is that black money forms only a small portion of the black wealth held in the economy. In the past five years, income tax raids have found that only 5-6% of black money is kept in hard cash. Moreover, those who have amassed a sizable amount of black money are equipped at finding ways around demonetisation by converting their existing cash into bullion, gold jewellery, real estate and foreign currencies through middle men. To that extent the demonetisation scheme will only impact part of the overall stock of black wealth in the economy.
The important thing is, however, to remember that black income is a flow concept and not a stock concept. Hence, the impact will only be temporary, and black money will eventually begin to be generated again as the move will have no impact on the generation of black income itself. This is because there are a large number of mechanisms by which such incomes are generated, and these may or may not depend on cash circulation. Normally, black income is generated by manipulating the books of accounts of businesses — revenues are understated while costs are overstated. Black income becomes a stock when it is parked – be it through property, gold, currency, etc. This scheme will only impact the black income that is parked in the form of currency. Given that only around 6% of black wealth is parked in currency form and only a part of that will be impacted, the overall impact of the measure is likely to be limited and of short duration.
Demonetisation is not enough to fight the black money menace
For a sustained crackdown on black money, multiple other attendant measures need to be taken to rein in black wealth generation. These include:
- Direct tax reforms – While much discussion has taken place over the last decade, no action has been taken so far. There are indications that the government may want to implement reform in this area – widening the tax base, lowering tax rates and removing exemptions. If an announcement in this regard is indeed made during the forthcoming budget could be positive for the economy in the long term.
- Transparency in political funding – In India, the process of political funding remains very opaque and has evolved into a major end-use for black money. Unfortunately, we are yet to see any concrete action to tackle this menace.
- Agriculture income tax – Agricultural income is not taxed at all in India. For a country with such a poor direct-tax to GDP ratio, it is incomprehensible how virtually 15% of the economy remains untaxed. In fact, this has emerged as a significant conduit for tax evasion as a large chunk of income is shown as agricultural income and hence there is no incidence of tax.
- Investment through the Participatory Notes route – Participatory Notes (commonly known as P-Notes or PNs) are instruments issued by registered foreign institutional investors (FII) to overseas investors who wish to invest in the Indian stock markets without registering themselves with the market regulator, the Securities and Exchange Board of India – SEBI. This anonymity allows many individuals with illbegotten wealth to invest in the Indian stock markets. Stricter measures need to be imposed to control the flow of such funds into the market.
Like the expected impact on black money, we believe the impact on counterfeit currency will also be temporary. For sure, the existing stock of such banknotes will be extinguished, but it will only be a matter of time before the counterfeiters get back into action.
Economic impact
In the short term, the effect is likely to be negative on balance. However, we do not expect any long-term impact from this policy alone.
Negative
We feel this move could be negative for consumption in the short term. In India, especially in the rural areas, cash transactions account for the largest share of overall transactions in the economy. In urban areas, it is less. However, the challenges are multiple. According to data from the finance ministry, only about 32% of India’s population has access to financial institutions like banks and post offices. Moreover, the distribution of banks is highly skewed, with around a third of all bank branches being concentrated in only 60 Tier 1 and Tier 2 cities/towns. More importantly, close to 60% of workers earn their wages in cash, of which more than half are daily wage earners. The majority of small mom-and-pop shops deal only in cash, especially in rural areas. With 86% of banknotes moving out of circulation at just a few hours’ notice and with a limited amount of cash being made available in lieu, the effect has so far has been quite disruptive. This is no surprise given that as per an estimate by the Fletcher School at the Tufts University, in India 86.6% of transactions by value were carried out in cash in 2012. While this figure would have come down since then, it will still be very high. The fact is that India remains largely a cash economy. According to the same Fletcher School study, the ratio of currency to GDP in India (12.2%) is higher than for countries like Russia (11.9%), Brazil (4.1%) and Mexico (5.7%). Changing age-old habits is a long-term process and the demonetisation will have caught a lot of people on the wrong foot. Also, as mentioned earlier, in an effort to keep the decision secret, the actual implementation fell short of expectations. Even the banks, which were responsible for implementing this enormous project, were kept in the dark, thereby affecting their preparedness. Whether normalcy will return in another month’s time, will depend on the government’s ability to make new cash available based on its stated timeline. Having said that we think that the stress in rural areas will persist for some time.
Overall, we expect consumption in urban areas to be lower, at least until December, while the impact on rural areas could continue for longer. Nevertheless, we will keep tracking the situation and by mid-January we should have a better sense of the level of demand
destruction.Positive
As some black wealth gets tracked, we expect a short-term spike in tax (and penal) revenue collection. This should allow the government to plug the gaping hole in the overall revenue collection budgeted for the year. Hence it should be able to maintain its fiscal deficit target for the year and continue with its overall expenditure plan (including capex), which we felt would be compromised by a build-up of revenue pressures. This benefit, however, will be a transitory in nature unless the move is followed by the tax reforms mentioned above. In the event that reforms do take place simultaneously, we would likely see a long-term structural improvement in the economy as government capex would continue unhindered resulting in more job creation.
Overall macro impact
GDP growth: The short-term demand destruction could be partly offset by continued government capex, which we previously expected to peter out. At this point we have limited visibility on the extent of the demand destruction that is likely to take place. On balance though, we see potential downside risks to our existing growth forecast. And the longer the disruption lasts, the greater the impact it will have.
Inflation: In the short term, we see potential downside risks to our inflation forecast given the demand destruction.
Monetary policy: With inflation likely to ease more than expected, there is a possibility of RBI opting for a rate cut at its December 2016 meeting as compared to our expectation of a rate cut at the April 2017 meeting. Also, with the vast amount of low-cost deposits flowing into the banking system, the banks are able to pass on the benefits of lower costs to lending rates, thereby improving the pace monetary policy transmission. However, we do not expect this to translate into higher credit growth. With credit growth currently at its weakest level, credit remains a demand issue and not a supply issue. Fiscal deficit: We believe the government will be able to meet its fiscal deficit target for the year (@ 3.5% of GDP) without having to compromise on its expenditure including capex. We had feared earlier that expenditure would be curtailed given that India’ fiscal deficit was already at 84% of the budget in the first half of FY17.
Current account deficit: The monetisation scheme could potentially lead to a higher deficit in the longer term as many of the people who generate black income could seek to park their income in gold rather than cash in anticipation of periodic repeats of the demonetisation scheme.
For now, the Rupee is in freefall…
- Facebook Reveals Seven Point Plan To Eradicate "Fake News"
Facebook CEO Mark Zuckerberg has a message for his billion-plus users: "you're not capable of deciding for yourself what is 'news' and what is not, so we will do it for you."
Facebook has been widely blamed – by the left-leaning mainstream media – for allowing the spread of online misinformation, amusingly much of it pro-Trump, but Zuckerberg has rejected the notion that Facebook influenced the outcome of the election or that fake news is a major problem on the service.
"Of all the content on Facebook, more than 99 percent of what people see is authentic," he wrote in a blog post on Saturday.
"Only a very small amount is fake news and hoaxes."
Which is why we found it odd that since such "a very small amount" of Facebook is "fake", why the left-leaning CEO would draft up his 7-point plan for eradicating "misinformation" from the social network (via Facebook)…
A lot of you have asked what we're doing about misinformation, so I wanted to give an update.
The bottom line is: we take misinformation seriously. Our goal is to connect people with the stories they find most meaningful, and we know people want accurate information. We've been working on this problem for a long time and we take this responsibility seriously. We've made significant progress, but there is more work to be done.
Historically, we have relied on our community to help us understand what is fake and what is not. Anyone on Facebook can report any link as false, and we use signals from those reports along with a number of others — like people sharing links to myth-busting sites such as Snopes — to understand which stories we can confidently classify as misinformation. Similar to clickbait, spam and scams, we penalize this content in News Feed so it's much less likely to spread.
The problems here are complex, both technically and philosophically. We believe in giving people a voice, which means erring on the side of letting people share what they want whenever possible. We need to be careful not to discourage sharing of opinions or to mistakenly restrict accurate content. We do not want to be arbiters of truth ourselves, but instead rely on our community and trusted third parties.
While the percentage of misinformation is relatively small, we have much more work ahead on our roadmap. Normally we wouldn't share specifics about our work in progress, but given the importance of these issues and the amount of interest in this topic, I want to outline some of the projects we already have underway:
- Stronger detection. The most important thing we can do is improve our ability to classify misinformation. This means better technical systems to detect what people will flag as false before they do it themselves.
- Easy reporting. Making it much easier for people to report stories as fake will help us catch more misinformation faster.
- Third party verification. There are many respected fact checking organizations and, while we have reached out to some, we plan to learn from many more.
- Warnings. We are exploring labeling stories that have been flagged as false by third parties or our community, and showing warnings when people read or share them.
- Related articles quality. We are raising the bar for stories that appear in related articles under links in News Feed.
- Disrupting fake news economics. A lot of misinformation is driven by financially motivated spam. We're looking into disrupting the economics with ads policies like the one we announced earlier this week, and better ad farm detection.
- Listening. We will continue to work with journalists and others in the news industry to get their input, in particular, to better understand their fact checking systems and learn from them.
Some of these ideas will work well, and some will not. But I want you to know that we have always taken this seriously, we understand how important the issue is for our community and we are committed to getting this right.
So to clarify, Facebook will make it easier for any Tom, Dick, Or Harriet to complain about a story that will necessarily cut the revenues from that entity and will rely on 'fact-checking' organizations, establishment 3rd parties, and the mainstream media for input.
Well what could go wrong?
As we noted previously, while Facebook (or Google) have every right to tweak their ad policies however they see fit – especially if in the process their own ad revenue decline, as both companies retain a portion of the ad proceeds they pay out to content providers – the move is yet another step on a slippery slope, one which begins with determining just what is considered "fake news" and ends with blanket internet censorship along ideological lines.
Which we find especially ironic considering much of the "pro Clinton" press was terrified that it would be Trump who would be the one to hint at or enforce censorship. It seems the media does not need Trump for that: it can do it quite well on its own.
- The American Military's Real Problem: Shooting 'Ants' With 'Elephant Guns'
Submitted by Tobias Burgers via Strategic-Culture.org,
In combating asymmetric threats, we have to ask ourselves, on which side of the asymmetry do we sit? Typically and almost in a cliché manner, we depict our side as superior – we have the technology, we have the equipment, we have the on-going development capabilities. But do we really have the money for such high-end, extended, near-endless military campaigns?
Consider the defensive action by USS Mason in the Red Sea in October 2016. Its response to a rebel attack compels us to rethink the cost factor involved in defensive measures, and how we popularly interpret the costs of war and national security. A few short seconds of fending off a Yemeni rebel attack cost the United States NAVY (USN) an unsettling $8 million. Cost of the rebel attack: $500,000 or less than 10 percent of USS Mason’s reaction.
In this article, we advocate a realignment of security and defense debates to position them in the context of what it means to wage high-tech war in the twenty-first century. The asymmetry of warfare has never been more evident than in the material costs of warfighting.
America’s wars of the twenty-first century against non-state soldiers or non-state militants seem to require high and higher-tech weapons. They will include machines necessary for fast and effective transportation, weapons that kill and do not kill, personal equipment as part of soldiers’ combat uniforms, “unmanned” or remote equipment, anytime/anywhere communications technology, robotic platforms, global surveillance and instruments like the Low-Cost Imaging Terminal Seeker (LCITS), and a turn to non-petroleum fuels. The costs associated with these requisite weapons and equipment are staggering.
Smart technologies/equipment/weapons – items usually associated with the obligatory “precision” characteristic, non-lethal element, or “green energy” dimension cost a fortune. By contrast, non-state actors (NSAs) are not beholden to similar budgetary cutbacks, environmental considerations, or human rights and treaty compulsion. Attack and response costs for NSAs (typically insurgents and terrorists, or generally militant extremists) are grossly disparate in cost. Thus, this kind of high tech warfare is becoming increasingly economically unviable for high-tech states and organizations like the United States and theNorth Atlantic Treaty Organization (NATO).It is necessary for states to consider the dissonance between low-tech attacks and high-tech defensive responses. As it stands now, high-tech states, due to their military preferences and strongly embedded high tech warfare cultures, have not really considered the options for low-tech response. War, or just simple security for that matter, has been reconfigured by states, with their advanced and technological weaponry, to become high-cost. In contrast to asymmetric enemies with much cheaper systems, this raises the question: What response options are available to countries like the United States if NSAs pursue cost-effective approaches to combat and the West. What are the potential ramifications of lost-tech/low-cost warfare against high-tech/high-cost security/defensive measures of states? It is unlikely that the United States can sustain such a war. U.S. military action against the Islamic State (IS) costs American taxpayers well over $600 thousand per hour. The cost of war in Afghanistan by the latter half of 2016 stood at $750 billion and $819 billion for combat missions in Iraq that could alternatively be funneled toward other more critical military and nonmilitary (i.e., statebuilding) projects.
The costs of U.S. military action, either offensive or defensive, stand at around $1.5 million for just one medium to long-range subsonic cruise missile like the Tomahawk. A single air-to-ground (AGM-114) Hellfire means an injurious cost of some $115 thousand. The shoulder-rocket named the Javelin costs some $150 thousand each. The APKWS II is about $28 thousand per unit. Our departure from bombs and embrace of precision-guided munitions (PGMs) and smart weapons generally has come without clear and constant consideration for the fact that precision has its costs. “Cheap” laser-guided weapons can have a price tag of up to $250 thousand attached to them.
One glaring flaw inherent in these weapons is their lack of deterrence. If they are to be used for security, there ought to be a purpose in their non-use; however, their non-use fails to deter the principle threats in a not-so-state-centric international realm.
We are confronting a similar friction observed after decades of spending trillions of dollars on nuclear weapons of all sorts, the nuclear-powered aircraft, anuclear-powered cruise missile (PLUTO), as well as a nuclear torpedo called ASTOR (otherwise referred to as “underwater insanity”) designed to be used against submarines. In the latter, the use of such a torpedo would have meant the destruction of the submarine that launched it as well as the target.
The idea of war is to cause destruction or damage to the enemy with the least possible damage to oneself, if any at all. That logic fails us in the case of ASTOR and serves as a metaphor for security and defense logic today in considering the weapons being designed and developed to guard against and pursue rebels like those who launched their rickety old rockets at a billion-dollar U.S. warship, which in-turn spent, a disproportionate sum to prevent that attack.
We should be alarmed at the potential reduction in the human costs of war if we are moving toward increasingly robotic warfare, and with this, the possibility of warfare becoming entirely economic.
Military leaders have an amazing ability to develop strategy but if they fail to take into account the economic costs, their strategies could become inherently unviable and unsustainable. To what extent is society willing to put up with wars that are foremost robotic and primarily economic?
This could be the case in asymmetry as well as in conflicts between high tech actors. Combat – particularly robotic combat – could become ultimately a purely economic affair in which the states that have the economic resources to sustain a longer robotic warfare campaign win. In this, the inhuman element of future combat would not only release the concept of human casualties, but likewise begin sketching a different template for warfare, perhaps even cause a paradigm shift in warfare, from which point warfare could be solely an economic affair. This could in a sense create an incentive for actors to try to fight wars on the cheap – particularly against actors bound by their high-tech warfare capabilities.We often think of our military capabilities as one that allow us to dominate the battlefield, to achieve full spectrum dominance and enemy/threat enclosure. Turning to “unmanned” systems, or (small) drones, such technology could start a new era of warfare in which actors with lesser-economic possibilities, not just capabilities, can seize upon the opportunity to expand the space of the battlefield to their benefit, namely through the use of simple drones, loaded with explosives. In this, actors would exploit different avenues or new ways (for them) of attacking their enemy.
This sort of scenario can be played-out along the lines of IS sending bomb-loaded drones against the Kurdish Peshmerga, or a terrorist trying to fly small-scale drones into the U.S. Capitol. It is pertinent to consider how this kind of approach to warfare and technology will evolve.
For the first time, technology actually seems to favor those with lesser possibilities but perversely presents more opportunity. Generally, technology has favored the actors who have the money to pursue the research and defense (R&D) side of warfare and warfighting, but now actors who do not have it can benefit in due course. Have we been too unmindful of how warfare has become foremost economic once again? Now actors with limited means actually possess the means to act beyond their material capabilities and limits and conduct strikes beyond their (limited) horizon.
This has hit the U.S. military at a relatively late point in the War on Terror and in context of the radically changing nature of the modern military landscape/character of war. But in a way we are still moving full-tilt down a path where we develop the means to attack ants using elephant guns. We tend to adhere to the idea of over-kill in a way that goes relatively unnoticed on our own side. During the Second World War, we sought to defeat the enemies of democracy and our self-styled freedom by dumping thousands of tons of bombs on Germany’s Kassel, Hamburg, Dresden, and Cologne, and Japan’s, Kagoshima, Tokushima, Fukuyama, Tokyo, and Yokohama (among many others.)
Today, we overkill the enemy using expensive technology and weapons that we mistakenly perceive to be produced at bargain prices. Comparing what the United States spends on defending against extant threats to what terrorists and insurgents spend presents a shrill contrast. It is as effortless as taking a stroll to a gun market. The going price for an American-made M-16 is $200, $400 for a Chinese- or Russian-made AK-47, and $150 for a rocket-propelled grenade (RPG) at a gun market in Somalia. Obtaining the requisite small arms necessary to cause widespread panic and casualties on and off the battlefield is like sifting through used clothing at a flea market – no permission, no identification, no papers, no checks required; you just choose your weapon, pay, and be on your way to attack whomever you like. A standard suicide bomber belt costs just $150.
Perceptions of contemporary security and defense have to align with the costs associated with rebel attacks, the current economic climate, and the idea that abstaining from the purchase of a single $1-1.5 million cruise missile would enable the United States and others to purchase less-technologically sophisticated alternatives capable of achieving near-similar ends.
The debate about national security and military effectiveness should not be solely conducted within the existent framework. Economic perception and reality must be discussed too.
* * *
Tobias Burgers is a Doctoral Candidate at the Otto-Suhr-Institute (Free University of Berlin) where he researches the rise and use of cyber, robotic systems in security relations, and the future of military conflict. Scott Nicholas Romaniuk is a PhD Candidate in International Studies (University of Trento). His research focuses on asymmetric warfare, counterterrorism, international security, and the use of force
- The Difference Between GAAP And Non-GAAP Q3 Earnings For The Dow Jones Was 25%
As of today, 95% of the companies in the S&P 500 have reported earnings for Q3 2016. 72% of the companies have reported earnings above the mean estimate and 55%of S&P 500 companies have reported sales above the mean estimate. More importantly, however, according to FactSet in Q3 the earnings recession officially ended after five consecutive quarters of EPS declines: for Q3 2016, the blended earnings growth rate for the S&P 500 is 3.0%. The third quarter marks the first time the index has seen year-over-year growth in earnings since Q1 2015 (0.5%).
That’s the official version. The unofficial one is that of this 3% increase in EPS, half comes from buybacks, or a reduction in the number of shares outstanding, which according to Deutsche Bank contributed 1.6% to earnings growth in the third quarter. As the chart below shows, this has been a recurring theme for the S&P, where buybacks have “added” between 1% and 2% to EPS “growth” every quarter going back at least to the start of 2012.
And then there was the very acute distinction between GAAP and non-GAAP, one of our favorite topics which we have covered going as far back as 2010, and more recently in February of this year.
In another report by FactSet, we find that as of today, all of the companies in the Dow Jones Industrial Average have reported EPS for Q3 2016. Factset then asks three questions:
- What percentage of these companies reported non-GAAP EPS for Q3 2016?
- What was the average difference and median difference between non-GAAP EPS and GAAP EPS for companies in the DJIA for Q3 2016?
- How did these differences compare to last year?
For Q3 2016, 21 of the 30 companies in the DJIA (or 70%) reported non-GAAP EPS in addition to GAAP EPS for the third quarter. Of these 21 companies, 16 reported non-GAAP EPS that was higher than GAAP EPS.
The average difference between non-GAAP EPS and GAAP EPS for all 21 companies was 181.1%, while the median difference between non-GAAP EPS and GAAP EPS for all 21 companies was 10.4%.
The average difference between non-GAAP EPS and GAAP EPS for the DJIA was unusually large because of DuPont. For Q3 2016, DuPont reported non-GAAP EPS of $0.34 and reported GAAP EPS of $0.01. Thus, the percentage difference between non-GAAP EPS and GAAP EPS for DuPont for Q3 was 3300%. Excluding DuPont, the average difference between non-GAAP EPS and GAAP EPS for the remaining 20 DJIA companies was 24.7%.
How does this compare to the third quarter in 2015? Back in Q3 2015, 19 of the 30 companies in the DJIA (or 63%) reported non-GAAP EPS in addition to GAAP EPS for the quarter. Of these 19 companies, 16 reported non-GAAP EPS that was higher than GAAP EPS. The average difference between non-GAAP EPS and GAAP EPS for all 19 companies was 17.1%.
This means that the GAAP to Non-GAAP difference (excluding outliers), continues to grow, or as FactSet puts it, the average difference between non-GAAP EPS and GAAP EPS for the Dow 30 was larger in Q3 2016 relative to Q3 2015. However, the median difference between non-GAAP EPS and GAAP EPS for the Dow 30 in Q3 2016 was nearly equal to the median difference in Q3 2015. While more DJIA companies reported non-GAAP EPS in Q3 2016 (21) compared to Q3 2015 (19), the same number of DJIA companies (16) reported non-GAAP EPS that exceeded GAAP EPS in both quarters.
* * *
Putting all this together, the distinction for year-over-year earnings growth for GAAP vs non-GAAP Dow Jones earnings is simple: non-GAAP Dow Jones earnings rose 10.8%, while GAAP EPS declined 3.7%:
Companies in the DJIA reported higher average and median year-over-year growth in non-GAAP EPS compared to GAAP EPS for Q3 2016. For the 21 companies in the DJIA that reported non-GAAP EPS for Q3 2016, the average non-GAAP EPS growth rate was 10.8%, while the median non-GAAP EPS growth rate was 5.1%. For these same 21 companies, the average GAAP EPS growth rate for Q3 2016 was -3.7%, while the median GAAP EPS growth rate for Q3 2016 was -1.2%.
There’s more.
As Deutsche Bank writes in a note on Friday afternoon, “be mindful of the gap between GAAP and non-GAAP EPS and net margins“
The German bank explains that over the past two years, the wider than usual spread between GAAP and non GAAP is from asset write-downs at Energy and Materials companies. Outside those sectors, the spread at ~87% excluding huge discontinued operations and one-time gains at Health Care, modestly below normal. The overall spread bottomed at 68% in 4Q15 and subsequently improved to ~81% in the past two quarters and ~84% QTD.
In addition to write-downs, stock option expense (SOE) is often excluded by new Tech, bio Tech and some tech oriented consumer stocks. 42 S&P companies exclude SOE from their non-GAAP EPS, and that SOE would have had $1.07/sh impact to S&P EPS. Also, when M&A activity is strong there are often deal and integrations costs that are excluded. This is mostly at Tech and Health Care. Pension charges are sometimes excluded. This was a big item in 4Q14 and will likely be so again in 4Q16.
Some additional details from DB:
The chart below shows a long-term chart showing the divergence between the S&P500’s LTM EPS on a GAAP vs non-GAAP basis…
… and finally, here is the implied LTM P/E multiple if using Friday’s S&P closing price: it amounts to 18.7x for non-GAAP earnings, and 23.4x for GAAP.
- Visualizing Black Friday's Surge In US Consumer Debt
It's that time of year again… when Americans load up on debt to buy stuff they don't need with money they don't have because Kim Kardashian told them to…
Next week, Black Friday and Cyber Monday will kick off the start to the U.S. holiday shopping season, during which consumers are expected to spend a total of $655.8 billion this year.
With the average bill coming in at $938.50 for holiday spending, where are people finding the extra cash?
Visual Capitalist's Jeff Desjardins looked back at the last five years of Equifax data to see how consumer debt correlates to holiday purchases.
Courtesy of: Visual CapitalistTHERE’S CREDIT IN STORE
One way consumers take advantage of Black Friday deals is through the issuance of store credit. Specifically, Black Friday traditionally sees a noteworthy surge in signups to private label cards – the kind redeemed at stores like Macy’s.
Each year, roughly half a million Americans are signing up for new accounts on Black Friday:
Furniture and department stores are among the biggest providers of this type of credit to consumers. Here are the five-year averages by industry for the months of November and December:
CHARGE IT, PLEASE
This bump in activity doesn’t stop with new signups for store credit. The average balances on store cards and credit cards both jump noticeably in the months following the holiday season:
Every year is different, but the data always follows the same trend.
Stocking up on Black Friday deals is not cheap, and extra dollars spent eventually make their way onto the credit card statement with the cost of interest added on.
- Obama Admits He "Can't Pardon" Snowden Before A Trial – Sorry, Hillary
After everyone from Jesse Jackson, to the terrified mainstream media to prominent Congressional Democrats have called upon Obama to issue a blanket pardon for Hillary Clinton, he finally admitted that it’s not possible to pardon someone who hasn’t yet stood trial for a crime. And while Obama was referencing a potential pardon of Edward Snowden with his comments, one could assume that the law should be applied the same way for all U.S. citizens.
I can’t pardon somebody who hasn’t gone before a court and presented themselves, so that’s not something that I would comment on at this point. I think that Mr. Snowden raised some legitimate concerns. How he did it was something that did not follow the procedures and practices of our intelligence community. If everybody took the approach that I make my own decisions about these issues, then it would be very hard to have an organized government or any kind of national security system.
In his last international interview with ARD and DER SPIEGEL in Germany, Obama went on to highlight the fine line between protecting the privacy of citizens and gathering intelligence needed to protect the American homeland against potential terrorist attacks. Ironically, Obama didn’t mention the potential pitfalls associated with allowing a massive influx of immigrants from nations known to harbor terrorists without the ability to vet those immigrants.
At the point at which Mr. Snowden wants to present himself before the legal authorities and make his arguments or have his lawyers make his arguments, then I think those issues come into play. Until that time, what I’ve tried to suggest — both to the American people, but also to the world — is that we do have to balance this issue of privacy and security. Those who pretend that there’s no balance that has to be struck and think we can take a 100-percent absolutist approach to protecting privacy don’t recognize that governments are going to be under an enormous burden to prevent the kinds of terrorist acts that not only harm individuals, but also can distort our society and our politics in very dangerous ways.
And those who think that security is the only thing and don’t care about privacy also have it wrong.
My experience is that our intelligence officials try to do the right thing, but even with good intentions, sometimes they make mistakes. Sometimes they can be overzealous. Our lives are now in a telephone, all our data, all our finances, all our personal information, and so it’s proper that we have some constraints on that. But it’s not going to be 100 percent. If it is 100 percent, then we’re not going to be able to protect ourselves and our societies from some people who are trying to hurt us.
Commenting on the election, Obama refused to acknowledge that his failed policies helped facilitate Trump’s victory, even though skyrocketing Obamacare premiums almost certainly played a role, and instead referenced the typical democrat narrative that racist white folks who were fearful of the “changing face of the American population” were to blame.
I think what is true is that there’s been an underlying division in the United States. Some of it has to do with the fact that economic growth and recovery tends to be stronger in the cities and in urban areas. In some rural areas, particularly those that were reliant on manufacturing, there has been weaker growth, stagnation, people feeling as if their children won’t do as well as they will.
There are cultural, social and demographic issues that came into play. They’re not that different from some of the issues that Europe faces with immigration, the changing face of the American population. I think some reacted there, and Trump was able to tap into some of those anxieties.
American politics is always somewhat fluid. In this age of social media, it means that voters can swing back and forth. I mean, there were probably millions of voters who voted for me and supported me and this time also voted for Donald Trump, and it just indicates that some of this is less ideological and more just an impulse towards some sort of change.
One of the more amusing segments of the interview came when Obama, perhaps one of the most divisive presidents in American history, decided to lecture president-elect Trump on his “divisive” and “controversial rhetoric.”
And the question now, going forward, is whether the president-elect is able to move on those elements of his agenda that I think can garner broad support, like rebuilding our infrastructure. And if he can lessen some of the more controversial rhetoric that could divide the country more. That’s going to be the test for him in the years to come.
We just have to ask, would comments like the one below by Obama be considered “divisive” and/or “controversial?”
September 2014 Comments at the Congressional Black Caucus Awards Dinner – “Too many young men of color feel targeted by law enforcement, guilty of walking while black, or driving while black, judged by stereotypes that fuel fear and resentment and hopelessness. We know that, statistically, in everything from enforcing drug policy to applying the death penalty to pulling people over, there are significant racial disparities.”
If that wasn’t enough, Obama also attempted to delegitimize Trump’s election by pointing out that only 27% of the American population voted for him. Yes, and Obama’s victory in 2012 with 28.6% of the population was WAY more decisive…great point.
The problem, though, is that young people are less likely to vote than older people. What results is a situation in which sometimes the elections don’t fully reflect the views of the American population. Essentially, the president-elect was supported by about 27 percent of the American population. One of our challenges, historically, is that we have very low voting rates, even during presidential elections.
Finally, when asked about the very real possibility that Trump will dismantle key components of his legacy, Obama reminded us all of the time that he saved the entire world from financial ruin back in 2009.
First and foremost, it’s important to remember that, from my perspective at least, my most important legacy was making sure that the world didn’t go into a Great Depression. Keep in mind that, when I came in, we had had a crisis that was the worst we’ve seen since the 1930s, and working with people like Chancellor Merkel, working with the G-20 and other institutions internationally, we were able to stabilize the financial system, stabilize the US economy and return to growth.
We guess that’s true if you ignore the inconvenient fact that loose monetary policies implemented by the Fed single-highhandedly caused the asset bubbles around the world that Obama points to as signs of a “recovery.” Guess we should ignore these charts:
Digest powered by RSS Digest
Saving...