- What Will Happen In The 2020s? (Spoiler Alert: Nothing Good)
What Will Happen In The 2020s? (Spoiler Alert: Nothing Good)
Authored by ‘Lance Welton’ via VDare.com,
Peter Turchin And The Coming Crisis Of The 2020s
Increasingly, social science is dominated by Leftist ideologues who use the remaining respect that academia still has among the public to inculcate students and public alike with their equalitarian dogmas.
But there are honorable exceptions.
One of these: Peter Turchin, a Russian who is professor of Evolutionary Biology at the University of Connecticut. Turchin, who did PhD at Duke University, applies his “hard science” training to the Woke world of social science, aiming to make clear and testable predictions about the cycles through which civilizations go. According to Turchin, the West is headed for trouble in the 2020s.
Turchin, who keeps a blog about civilization cycles, recently presented his latest findings to the Centre for Complex Systems Studies in Utrecht, Holland, under the heading “A History of the Near Future: What History Tells Us About the Near Future.” [PDF] His conclusions are startling. Based on his detailed number-crunching about events, civilizations that are in decline – as is the USA is – always enter periods of extreme polarization. For the USA, the 2020s will be that period. It will be marred by years of political violence, and intense conflict. Worryingly, Turchin claims that the U.S. more polarized that it was on the eve of the Civil War [ See his Ages of Discord: A Structural-Demographic Analysis of American History].
Turchin argued in his Utrecht presentation that political instability in the USA and Western Europe in the 2020s will be of unparalleled severity, to the extent that it may well “undermine scientific progress.”
Turchin began his presentation by quoting himself from almost a decade ago already making this prediction, one which—in a world of Trump, Brexit and the rise of European “populism”—now seems extremely prescient. Spain has just become the latest country to give a right-wing populist party a substantial vote: the Vox party took 3rd place in the country’s November 10th general election. [ Eurosceptics rejoice as Vox becomes 3rd most powerful party in Spanish election ,RT, November 11, 2019]
“Qualitative historical analysis reveals that complex human societies are affected by recurrent—and predictable—waves of political instability” he wrote in a letter to the leading science journal, Nature, which he quoted at the beginning of his presentation [Political instability may be a contributor in the coming decade, February 4, 2010].
Turchin’s presentation then moved on to highlighting the key forces that, according to his massive data base on historical cycles of violence, appear to auger political instability in the 2020s. There are four of them, and they were last this intense in the early 1970s, also a period of political instability in the West.
Mass Mobilization Potential
This, in essence, is “too many workers.” Turchin noted that when “the supply of labor exceeds its demand, the price of labor decreases, depressing the living standards for the majority of population, thus leading to popular immiseration [impoverishment] and growing mass-mobilization potential, but creating favorable economic conditions for the elites.”
In other words, as gradually occurred in the 1950s and the 1960s in Europe, the rich have grown richer on the back of cheap labor underpinned by mass immigration. This, however, has led to economic polarization and resentment, with the rich getting rich at a much faster rate than the poor. This means a well of angry, resentful people in the working and lower middle class.
Intra-Elite Competition.
Turchin argued that “favorable economic conjuncture for the elites results in increasing numbers of elites and elite aspirants, as well as runaway growth of elite consumption levels.” This means that many people who are higher up the hierarchy have to, in effect, become economically poor to maintain the veneer of “elite” status. Turchin added: “Elite overproduction results when elite numbers and appetites exceed the ability of the society to sustain them, leading to spiraling intra-elite competition and conflict.”
If you over-educate the populace, you have too many people who believe that in some way they have a right to rule—because when they were children, for people had a degree, that was kind of the case. So, if we assume that having a degree used to make you part of an “elite,” then we have “over-produced” this “elite”—over half of young people go into higher education in some Western countries. [More than half of young p eople are going to university for the first time, figures reveal, by Camilla Turner, Telegraph, September 26, 2019]
Thus there are far too many people qualified as lawyers, far too many college graduates, and thus very intense competition within and resentment between different sub-groups of “elite” people.
Many of them are not really “elite” other than on paper, but they regard “non-elite” jobs as beneath them. Think of all the baristas with Cultural Anthropology degrees, the wannabe attorneys working as civil servants or for charities; the numerous graduates doing The Office-type tedious jobs. This breeds hatred and conflict among the more educated.
State Fragility
This occurs when a “fiscal crisis,” of the kind Turchin claims we have, reduces the power of the government to control the police, the army and other enforcers. The state begins to lack “legitimacy,” meaning that the elites and the populace are less likely to defend its institutions. Thus Trump supporters regard hallowed newspapers as “Fake News.” Brexit supporters label senior judges [ British newspapers react to judges’ Brexit ruling: ‘Enemies of the people’, Guardian, November 4, 2019] and even parliament itself [ Boris Johnson’s attempt to subvert democracy has failed, and he should resign, New Statesman, September 24, 2019] as the “Enemy of the People.”
International Environment
The state will be rendered even more fragile if foreign governments support the insurgents within the elite—for example, Trump expressing his support for Brexiteers. And similar insurgencies in other countries spur emulation: Trump supporters could look to the Brexit vote and see that such victories over the Establishment were possible.
Turchin argues that these factors also existed in the 1920s and 1930s, resulting in a crisis and in war. The elites dealt with this by attempting to create a more equal society, by limiting the size of the work force, by regulating the economy, and by limiting imports. The result was that between about 1930 and 1970, real (inflation-adjusted) wages grew.
But once the elites forgot about the 1930s, and became focused on their own enrichment, wages started to plateau and fall, leading to crisis by the 1970s. Policies to, in essence, make everyone much wealthier were then instituted across the 1980s.
But these could only last for so long and, claims Turchin, real wages have effectively been in decline since about the year 2000. And as this has happened, the elites have got richer and larger. For example, the percentage of the USA population worth 1 million dollars (in 1995 dollars) has grown from 2.9% to 6.3% between 1983 and 2007. So there is growing economic polarization.
The “over-production of elites” leads to aspirant elites challenging the “established elites,” if necessary by violent means. The number of elite positions is limited—there are 50 state governors and 100 senators, no matter the population size—so this leads to political instability. In this regard, Turchin charts how the number of candidates for Congress—the number of elite aspirants—has increased over time, meaning more and more resentful people in the elite, who might be attracted to radical action to get their way.
Turchin brings together a variety of “well-being indicators”—employment, real wages, health, family size—and finds that they all follow exactly the same pattern. They are low around 1900, which Turchin argues was a period of conflict and instability. They are very high by about 1960 and then start to rapidly fall. We would thus expect a crisis.
Serious crises seeming to manifest every 50 years or so. Turchin takes us into what he calls the “deep past”—back even to the history of Rome—to show that these cycles occur again and again in almost exactly the same way, for exactly the same reasons, even involving similar lengths of time, such as instability every 50 years [A History of the Near Future]. Fascinatingly, he shows—setting out the data in a graph—that there is a clear negative association between societal well-being and elite over-production between 1780 and 2010 in the USA.
What will happen in the 2020s?
Turchin argues that one possibility is mass mobilization leading to war, revolution, state collapse, a lethal pandemic, population collapse—and, eventually, the higher living standards that tend to go with a reduced population.
Turchin, however, is slightly more optimistic for this coming decade. He predicts that the West will undergo something more similar to the collapse of the Soviet Union, and thus avoid pandemics and a mass die-off.
Let’s hope he’s right.
Tyler Durden
Wed, 11/20/2019 – 00:05 - China 'Mega Dump' Full Of Trash 25 Years Ahead Of Schedule
China ‘Mega Dump’ Full Of Trash 25 Years Ahead Of Schedule
A ‘mega dump’ in China has reached capacity 25 years sooner than anticipated after receiving far more trash per day than originally planned, according to the BBC.
The Jiangcungou ladfill in Shaanxi Province – around the size of 100 football fields, was designed to accept 2,500 tons of trash per day. Instead, it received 10,000 tons daily, the most of any landfill site in China.
The Jiangcungou landfill in Xi’an city was built in 1994 and was designed to last until 2044.
The landfill serves over 8 million citizens. It spans an area of almost 700,000 square metres, with a depth of 150 metres and a storage capacity of more than 34 million cubic metres.
Until recently, Xi’an was one of the few cities in China that solely relied on landfill to dispose of household waste – leading to capacity being reached early.
Earlier this month, a new incineration plant was opened, and at least four more are expected to open by 2020. Together, they are expected to be able to process 12,750 tonnes of rubbish per day. –BBC
The landfill sites are eventually slated to become ecological parks.
China collected 215 million tons of urban household waste in 2017 according to the country’s statistical yearbook, up from 152 million a decade earlier. There are currently 654 landfill sites across the country and 286 incineration plants.
It’s unknown what their recycling rate is as they have not released figures, however Beijing announced plans to recycle 35% of waste in major cities within the next 13 months, according to a government report.
To that end, the sorting and recycling of rubbish was made mandatory in Shanghai this July, leading to a “sense of panic” over people’s social credit scores.
The plan is ambitious – Shanghai is the largest and most populous city in the world, with more than 24 million residents – three times the size of London or New York. And according to some reports, only 10% of its waste is recycled. Official statistics show that only 3,300 tonnes of recyclables are collected daily, compared to the 19,300 tonnes of residual waste and 5,000 tonnes of kitchen waste that are collected. –BBC
In 2017 alone, China accepted seven million tons of trash from Europe, Japan and the United States, along with 27 million tons of paper waste.
Tyler Durden
Tue, 11/19/2019 – 23:45 - Six Conflicting Global Projects
Six Conflicting Global Projects
The six major world powers approach the reorganization of international relations according to their experiences and dreams. Prudently, they intend to defend their interests first before promoting their vision of the world.
VoltaireNet.org’s Thierry Meyssan describes their respective positions before the fight begins.
The US withdrawal from Syria, even if it was immediately corrected, indicates with certainty that Washington no longer intends to be the world’s policeman, the “necessary Empire”. It destabilized without delay all the rules of international relations.
We have entered a period of transition during which each major power is pursuing a new agenda. Here are the main ones.
The Three “Greats”
The United States of America
The collapse of the Soviet Union could have caused the collapse of the United States, since the two empires were leaning on each other. This was not the case. President George Bush Sr. ensured with Operation Desert Storm that Washington became the undisputed leader of all nations, then demobilized 1 million soldiers and proclaimed the quest for prosperity.
Transnational corporations then signed a pact with Deng Xiaoping to have their products manufactured by Chinese workers, who were paid twenty times less than their American counterparts. This led to a considerable development of international freight transport, followed by the gradual disappearance of jobs and the middle classes in the United States. Industrial capitalism was replaced by financial capitalism.
At the end of the 1990s, Igor Panarin, a professor at the Russian Diplomatic Academy, analyzed the economic and psychological collapse of American society. He hypothesized that the country would break up along the lines of what had happened to the Soviet Union with the emergence of new states. To repel the collapse, Bill Clinton freed his country from international law with NATO’s aggression against Yugoslavia. As this effort proved insufficient, US personalities imagined adapting their country to financial capitalism and organizing, by force, international trade so that the coming period would be a “new American century”. With George Bush Jr., the United States abandoned its position as a leading nation and tried to transform itself into an absolute unipolar power. They launched the “endless war” or “war on terrorism” to destroy one by one all state structures in the “broader Middle East”. Barack Obama continued this quest by associating a host of allies with it.
This policy paid off, but only a very few benefited, the “super-rich”. The Americans responded by electing Donald Trump as president of the federal state. He broke with his predecessors and, like Mikhail Gorbachev in the USSR, tried to save the United States by relieving it of its most costly commitments. He boosted the economy by encouraging national industries against those that had relocated their jobs. He subsidized the extraction of shale oil and managed to take control of the world hydrocarbon market despite the cartel formed by OPEC and Russia. Aware that his army is first and foremost a huge bureaucracy, wasting a huge budget on insignificant results, he stopped supporting Daesh and the PKK, negotiating with Russia a way to end the “endless war” with as little loss as possible.
In the coming period, the United States will be driven primarily by the need to save on all its actions abroad, until it abandons them if necessary. The end of imperialism is not a choice, but an existential question, a survival reflex.
The People’s Republic of China
After Zhao Ziyang’s attempted coup d’état and the Tiananmen uprising, Deng Xioping began his “journey south”. He announced that China would continue its economic liberalization by entering into contracts with US multinationals.
Jiang Zemin continued on this path. The coast became a “workshop of the world”, causing gigantic economic development. Gradually he cleaned the Communist Party of its caciques and ensured that well-paid jobs extended inland. Hu Jintao, concerned about a “harmonious society”, repeals the taxes paid by peasants in the interior regions still not affected by economic development. But he failed to control the regional authorities and fell into corruption.
Xi Jinping proposed to open up new markets by building a huge project of international trade routes, the “Silk Roads”. However, this project came too late because, unlike in antiquity, China no longer offers original products, but what transnational corporations sell at a lower price. This project was welcomed as a blessing by poor countries, but feared by the rich who are preparing to sabotage it. Xi Jinping is taking up positions in all the islets his country had abandoned in the China Sea, during the collapse of the Qing Empire and the occupation by the eight foreign armies. Aware of the destructive power of the West, he formed an alliance with Russia and refrained from any international political initiative.
In the coming period, China should affirm its positions in international fora, bearing in mind what the colonial empires imposed on it in the 19th century. But it should refrain from military intervention and remain a strictly economic power.
The Russian Federation
When the USSR collapsed, the Russians believed they would save themselves by adhering to the Western model. In fact, Boris Yeltsin’s team, trained by the CIA, organized the looting of collective property by a few individuals. In two years, about a hundred of them, 97% of them from the Jewish minority, took everything available and became billionaires. These new oligarchs fought each other mercilessly with machine guns and attacks in the middle of Moscow, while President Yeltsin bombed parliament. Without a real government, Russia was nothing more than a wreck. Warlords and jihadists armed by the CIA organized the secession of Chechnya. The standard of living and life expectancy collapsed.
In 1999, FSB Director Vladimir Putin rescued President Yeltsin from an investigation for corruption. In exchange, he was appointed President of the Council of Ministers; a position he used to force the President to resign and get himself elected. He put in place a vast policy of state restoration: he put an end to the civil war in Chechnya and methodically killed all the oligarchs who refused to comply with the state. The return of order was also the end of the Russian Western fantasy. Living standards and life expectancy improved.
Having restored the rule of law, Vladimir Putin did not stand for re-election after two consecutive terms. He supported a pale law professor, worshipped by the United States, Dmitry Medvedev, to succeed him. But not intending to leave power in weak hands, he was appointed Prime Minister until his re-election as President in 2012. Wrongly believing that Russia would collapse again, Georgia attacked South Ossetia, but instantly found Prime Minister Putin in its path. He then saw the pitiful state of the Red Army, but managed to overcome it thanks to the effect of surprise. Re-elected President, he focused on defence reform. He retired hundreds of thousands of officers, often disillusioned and sometimes drunk, and placed the Tuvan general (Turkish-speaking Siberian) Sergei Choïgou in the Ministry of Defence.
Adopting a traditional Russian management style, Vladimir Putin separated the civilian budget from part of the military budget. The first is voted by the Duma, the second is secret. He restored military research, while the United States imagined that it would no longer have to invest in this area. He tested a number of new weapons before deploying the new Red Army to help Syria. He experimented with his new weapons in combat situations and decided which ones would be produced and which ones would be abandoned. He organized a quarterly rotation of his troops so that all of them, one after the other, would become stronger. The Russian Federation, which in 1991 was nothing more than nothing, became the world’s leading military power in eighteen years.
At the same time, he used the Nazi coup d’état in Ukraine to reclaim Crimea, a Russian territory administratively linked to Ukraine by Nikita Khrushchev. He then faced a campaign of European Union agricultural sanctions that he used to create self-sufficient domestic production.
He forged an alliance with China and forced it to modify its Silk Roads project by integrating the communication needs of Russian territory to form an “Extended Eurasia Partnership”.
In the coming years, Russia will try to reorganise international relations on two bases: to separate political and religious powers; to restore international law on the basis of the principles formulated by Tsar Nicholas II.
Western Europeans
The United Kingdom of Great Britain and Northern Ireland
When the USSR fell, the United Kingdom subscribed with reservations to the Maastricht Treaty. Conservative Prime Minister John Major intended to take advantage of the supranational state under construction while keeping his currency out of the way. So he rejoiced when George Soros attacked the Pound and forced it out of the EMS (“monetary snake”). His successor, Labourist Tony Blair, restored full independence to the Bank of England and considered leaving the EU to join NAFTA. He transformed the defence of his country’s interests by substituting references to human rights for respect for international law. He promoted the US policies of Bill Clinton, then George Bush Jr., encouraging and justifying the enlargement of the European Union, the “humanitarian war” against Kosovo, and the overthrow of Iraqi President Saddam Hussein. In 2006, he developed the “Arab Spring” plan and submitted it to the United States.
Gordon Brown hesitated to pursue this policy and tried to regain some room to manoeuvre, but his energy was caught up in the 2008 financial crisis, which he managed to get through. David Cameron implemented, with Barack Obama, the Blair-Bush plan for the “Arab Spring”, including the war against Libya, but eventually only partially succeeded in placing the Muslim Brotherhood in power in the broader Middle East. In the end, he resigned after the Brexit voters voted, when the project to join NAFTA was no longer on the agenda.
Theresa May proposed to apply Brexit with regard to the exit of the supranational state from the Maastricht Treaty, but not with regard to the exit from the common market prior to Maastricht. She failed and was replaced by Winston Churchill’s biographer, Boris Johnson. He decided to leave the European Union completely and to reactivate the kingdom’s traditional foreign policy: the fight against any competing state on the European continent.
If Boris Johnson remains in power, the United Kingdom should in the coming years try to pit the European Union and the Russian Federation against each other.
The French Republic
François Mitterrand did not understand the dislocation of the USSR, going so far as to support the generals’ putsch against his Russian counterpart, Mikhail Gorbachev. In any case, he saw an opportunity to build a European supranational state, big enough to compete with the USA and China in the continuity of the Napoleonic attempt. Together with Chancellor Helmut Kohl, he promoted German unification and the Maastricht Treaty. Worried about this United States of Europe project, President Bush Sr, convinced of the “Wolfowitz doctrine” of preventing the emergence of a new challenger to the US leadership, forced him to accept NATO’s protection of the EU and its extension to former members of the Warsaw Pact. François Mitterrand used cohabitation and the Gaullist Minister of the Interior, Charles Pasqua, to fight the Muslim Brotherhood that the CIA had made him accept in France and that MI6 used to oust France from Algeria.
Jacques Chirac developed French deterrence by completing air nuclear tests in the Pacific before moving on to simulations and signing the Comprehensive Nuclear-Test-Ban Treaty (CTBT). At the same time, he adapted the armies to NATO’s needs by ending compulsory military service and integrating the Alliance’s Military Committee (planning). He supported NATO’s initiative against Yugoslavia (Kosovo war), but – after reading and studying 9/11 The Big Lie [1]- took the lead in global opposition to aggression against Iraq. This episode allowed him to bond with Chancellor Helmut Kohl and to advance the European supranational state, which he always conceived as a tool of independence around the Franco-German couple. Disrupted by the assassination of his business partner, Rafik Hariri, he turned against Syria, which the United States referred to as the mastermind behind the murder.
Advocating a radically different policy, Nicolas Sarkozy placed the French army under US command via NATO’s Integrated Command. He tried to enlarge the French area of influence by organizing the Union for the Mediterranean, but this project did not work. He proved his worth by overthrowing Laurent Bagbo in Côte d’Ivoire and, although he was overtaken by Arab springs in Tunisia and Egypt, he led NATO’s operation against Libya and Syria. However, for the sake of realism, he noted the Syrian resistance and withdrew from the theatre of operation. He continued the construction of the United States of Europe by having the Lisbon Treaty adopted by Parliament, even though the voters had rejected the same text under the name of the “European Constitution”. In reality, the modification of institutions, which are supposed to become more effective with 27 Member States, is profoundly transforming the supra-national State, which can now impose its will on Member States.
Coming to power without being prepared for it, François Hollande followed in Nicolas Sarkozy’s footsteps in a somewhat rigid way, forcing him to adopt the latter¹s ideology. He signed all the treaties that his predecessor had negotiated – including the European Budget Pact allowing Greece to be sanctioned – adding to them each time, as if to apologise for his reversal, a declaration setting out his own point of view, but without binding force. Thus he authorized the establishment of NATO military bases on French soil, putting a definitive end to the Gaullist doctrine of national independence. Or he continued the policy of aggression against Syria, making a verbal overbid before doing nothing on the White House’s orders. He assigned the French Army a mission in the Sahel, as a ground-based substitute for AfriCom. Finally, he justified the CO2 emissions trading exchange by the Paris Climate Agreement.
Elected thanks to the American investment fund KKR, Emmanuel Macron is first and foremost an advocate of globalization according to Bill Clinton, George Bush Jr. and Barack Obama. However, he quickly adopted the vision of François Mitterrand and Jacques Chirac according to which only a European supranational state would allow France to continue to play a significant international role, but in its Sarkozy-Holland version: the Union allows constraint. These two lines sometimes lead to contradictions, particularly with regard to Russia. However, they are united in a condemnation of the nationalism of the Member States of the European Union, a short Brexit, or a desire to restore trade with Iran.
In the coming years, France should measure its decisions in terms of their impact on the building of the European Union. It will seek as a priority to ally itself with any power working in this direction.
Federal Republic of Germany
Chancellor Helmut Kohl saw the break-up of the Soviet Empire as an opportunity to bring the two Germanies together. He obtained the green light from France in exchange for German support for the European Union’s single currency project, the euro. He also obtained the agreement of the United States, which saw it as a way to divert the East German army into NATO despite the promise made to Russia not to allow the German Democratic Republic to join.
Once German reunification was achieved, Chancellor Gerhard Schröder raised the question of his country’s international role, still under attack from its defeat in the Second World War. Although Germany is no longer militarily occupied by the four major powers, it nevertheless hosts huge US garrisons and the headquarters of EuCom and soon AfriCom. Gerhard Schöder used the “humanitarian” war against Kosovo to legally deploy German troops out of the country for the first time since 1945. But he refused to recognize this territory conquered by NATO as a state. Similarly, he is very strongly committed alongside President Chirac against the United States-British war in Iraq, stressing that there is no evidence that President Saddam Hussein was involved in the attacks of September 11th. He tried to influence European integration in a peaceful way. He therefore strengthened energy ties with Russia and proposed a federal Europe (including Russia in the long term) based on the German model, but he met with opposition from France, which is very attached to the project of a supra-national state.
Chancellor Angela Merkel returned to the politics of her mentor Helmut Kohl, who handed her over in one night from her responsibilities at the Communist Youth of Democratic Germany to the Federal Government of Germany. Closely monitored by the CIA, which is not sure how to define her, she strengthened Germany’s ties with Israel and Brazil. In 2013, on Hillary Clinton’s proposal, she asked Volker Pethes to study the possibility of developing the German army to play a central role in CentCom if the United States moved its troops to the Far East. She then commissioned studies on how German officers could supervise the armies of Central and Eastern Europe and asked Volker Perthes to write a plan for Syria’s surrender. Very attached to Atlanticist and European structures, she distanced herself from Russia and supported the Nazi coup d’état in Ukraine. In order to be effective, she required that the European Union impose its will on small Member States (Lisbon Treaty). She was very tough during the Greek financial crisis and patiently placed her pawns in the European bureaucracy until Ursula von der Leyen was elected President of the European Commission. When the United States withdrew from northern Syria, she immediately responded by proposing to NATO to send the German army to replace it in accordance with the 2013 plan.
In the coming years, Germany should focus on the possibilities of military intervention in the framework of NATO, particularly in the Middle East, and be wary of the project of a centralised European super-national state.
Feasibility
It is very strange to hear today about “multilateralism” and “isolationism” or “universalism” and “nationalism”. These questions do not arise because everyone has known since the Hague Conference (1899) that technological progress has made all nations in solidarity. This logorrhoea does not hide our inability to admit the new power relations and to envisage a world order that is as unjust as possible.
Only the three Great Powers can hope to have the means to implement their policies. They can only achieve their ends without war by following the Russian line based on international law. However, the danger of internal political instability in the United States raises more than ever the risk of a generalized confrontation.
When they left the Union, the British were forced to join the United States (which Donald Trump rejected) or to disappear politically. While Germany and France, which are losing ground, have no choice but to build the European Union. However, for the time being, they assess the time available very differently and consider it in two incompatible ways, which could lead them to disrupt the European Union themselves.
Tyler Durden
Tue, 11/19/2019 – 23:25 - For Christmas This Year, Teens Want Apple, Nike, And Louis Vuitton
For Christmas This Year, Teens Want Apple, Nike, And Louis Vuitton
According to a new survey from Piper Jaffray, Apple, Nike and Louis Vuitton could be the big winners with teenagers this holiday season. And why wouldn’t teenagers, most of whom likely don’t work for a living, ask for luxury brands on the one day of the year where they are gifted things without regard for price?
Piper surveyed more than 1,000 U.S. consumers and analyzed the responses from the “upper income teenage cohort” to draw its conclusions, according to CNBC. The company found that Apple was the “top-listed consumer brand for teens,” with AirPods as the most popular product.
The second most mentioned brand was Nike, with its mentions more than tripling from last year’s survey. And in keeping with the reality distortion field that is the budding U.S. consumer, Louis Vuitton – a brand that many hard working adults can’t afford – rounded out the list of top brands for teenagers.
Piper has said of the holiday season: “The consumer remains healthy, but stock selectivity is key given pockets of weakness in the dept. stores, specialty retail stores & mixed views on spending.”
Other brands that Piper has on watch for the holidays include Activision Blizzard, Crocs, Lowe’s, Boot Barn and YETI.
Piper believes that strength from “Call of Duty” could help Activision Blizzard while popularity from Fortnite wanes. The firm also thinks that ongoing product collaborations could help Crocs power sales.
The strength in the housing market has prompted the watchful eye on Lowe’s, while new product launches have the firm watching Boot Barn and YETI. However, the biggest winner could again be Amazon, according to the survey. Consumers are expected to make 46% of purchases online this year.
“Proprietary retail model shows acceleration of AMZN at detriment to department and specialty stores,” the firm said in its note. Piper has overweight ratings on Apple, Nike and Lululemon.
Tyler Durden
Tue, 11/19/2019 – 23:05 - Impeach The Government: Rogue Agencies Have Been Abusing Their Powers For Decades
Impeach The Government: Rogue Agencies Have Been Abusing Their Powers For Decades
Authored by John Whitehead via The Rutherford Institute,
“When a man unprincipled in private life[,] desperate in his fortune, bold in his temper . . . despotic in his ordinary demeanour – known to have scoffed in private at the principles of liberty – when such a man is seen to mount the hobby horse of popularity – to join in the cry of danger to liberty – to take every opportunity of embarrassing the General Government & bringing it under suspicion – to flatter and fall in with all the non sense of the zealots of the day – It may justly be suspected that his object is to throw things into confusion that he may ‘ride the storm and direct the whirlwind.’”
– Alexander Hamilton
By all means, let’s talk about impeachment.
To allow the President or any rogue government agency or individual to disregard the rule of law whenever, wherever and however it chooses and operate “above the law” is exactly how a nation of sheep gives rise to a government of wolves.
To be clear: this is not about Donald Trump.
Or at least it shouldn’t be just about Trump.
This is a condemnation of every government toady at every point along the political spectrum—right, left and center—who has conspired to expand the federal government’s powers at the expense of the citizenry.
For too long now, the American people have played politics with their principles and turned a blind eye to all manner of wrongdoing when it was politically expedient, allowing Congress, the White House and the Judiciary to wreak havoc with their freedoms and act in violation of the rule of law.
“We the people” are paying the price for it now.
We are paying the price every day that we allow the government to continue to wage its war on the American People, a war that is being fought on many fronts: with bullets and tasers, with surveillance cameras and license readers, with intimidation and propaganda, with court rulings and legislation, with the collusion of every bureaucrat who dances to the tune of corporate handouts while on the government’s payroll, and most effectively of all, with the complicity of the American people, who continue to allow themselves to be easily manipulated by their politics, distracted by their pastimes, and acclimated to a world in which government corruption is the norm.
Don’t keep falling for the Deep State’s ploys.
This entire impeachment process is a manufactured political circus—a shell game—aimed at distracting the public from the devious treachery of the American police state, which continues to lock down the nation and strip the citizenry of every last vestige of constitutional safeguards that have historically served as a bulwark against tyranny.
Has President Trump overstepped his authority and abused his powers?
Without a doubt.
Then again, so did Presidents Obama, Bush, Clinton, and almost every president before them.
Trump is not the first president to weaken the system of checks and balances, sidestep the rule of law, and expand the power of the president. He is just the most recent.
If we were being honest and consistent in holding government officials accountable, you’d have to impeach almost every president in recent years for operating “above the law,” unbound by the legislative or judicial branches of the government.
When we refer to the “rule of law,” that’s constitutional shorthand for the idea that everyone is treated the same under the law, everyone is held equally accountable to abiding by the law, and no one is given a free pass based on their politics, their connections, their wealth, their status or any other bright line test used to confer special treatment on the elite.
When the government and its agents no longer respect the rule of law—the Constitution—or believe that it applies to them, then the very contract on which this relationship is based becomes invalid.
Although the Constitution requires a separation of powers between the executive, legislative and judicial branches of government in order to ensure accountability so that no one government agency becomes all-powerful, each successive president over the past 30 years has, through the negligence of Congress and the courts, expanded the reach and power of the presidency by adding to his office’s list of extraordinary orders, directives and special privileges.
All of the imperial powers amassed by Barack Obama and George W. Bush—to kill American citizens without due process, to detain suspects indefinitely, to strip Americans of their citizenship rights, to carry out mass surveillance on Americans without probable cause, to suspend laws during wartime, to disregard laws with which he might disagree, to conduct secret wars and convene secret courts, to sanction torture, to sidestep the legislatures and courts with executive orders and signing statements, to direct the military to operate beyond the reach of the law, to operate a shadow government, and to act as a dictator and a tyrant, above the law and beyond any real accountability—were inherited by Donald Trump.
These presidential powers—acquired through the use of executive orders, decrees, memorandums, proclamations, national security directives and legislative signing statements and which can be activated by any sitting president—enable past, president and future presidents to act as a dictator by operating above the law and beyond the reach of the Constitution.
Yet in operating above the law, it’s not just the president who has become a law unto himself.
The government itself has become an imperial dictator, an overlord, a king.
This is what you might call a stealthy, creeping, silent, slow-motion coup d’état.
This abuse of power has been going on for so long that it has become the norm, the Constitution be damned.
There are hundreds—make that thousands—of government bureaucrats who are getting away with murder (in many cases, literally) simply because the legislatures, courts and the citizenry can’t be bothered to make them play by the rules of the Constitution.
Unless something changes in the way we deal with these ongoing, egregious abuses of power, the predators of the police state will continue to wreak havoc on our freedoms, our communities, and our lives.
It’s the nature of the beast: power corrupts.
Worse, as 19th-century historian Lord Acton concluded, absolute power corrupts absolutely.
It doesn’t matter whether you’re talking about a politician, an entertainment mogul, a corporate CEO or a police officer: give any one person (or government agency) too much power and allow him or her or it to believe that they are entitled, untouchable and will not be held accountable for their actions, and those powers will eventually be abused.
We’re seeing this dynamic play out every day in communities across America.
A cop shoots an unarmed citizen for no credible reason and gets away with it. A president employs executive orders to sidestep the Constitution and gets away with it. A government agency spies on its citizens’ communications and gets away with it. An entertainment mogul sexually harasses actors and actresses and gets away with it. The U.S. military bombs civilian targets and gets away with it.
Abuse of power—and the ambition-fueled hypocrisy and deliberate disregard for misconduct that make those abuses possible—works the same whether you’re talking about sexual harassment, government corruption, or the rule of law.
Twenty years ago, I was a lawyer for Paula Jones, who sued then-President Clinton for dropping his pants and propositioning her for sex when he was governor of Arkansas. That lawsuit gave rise to revelations about Clinton’s affair with Monica Lewinsky, a 21-year-old intern at the White House, and his eventual impeachment for lying about it under oath.
As Dana Milbank writes for The Washington Post:
We didn’t know it at the time, of course. But in Bill Clinton were the seeds of Donald Trump. With 20 years of hindsight, it is clear… Clinton’s handling of the Monica Lewinsky affair was a precursor of the monstrosity we now have in the White House: dismissing unpleasant facts as “fake news,” self-righteously claiming victimhood, attacking the press and cloaking personal misbehavior in claims to be upholding the Constitution…. Clinton set us on the path, or at least accelerated us down the path, that led to today.
It doesn’t matter what starts us down this path, whether it’s a president insisting that he get a free pass for sexually harassing employees, or waging wars based on invented facts, or attempting to derail an investigation into official misconduct.
If we continue down this road, there can be no surprise about what awaits us at the end.
After all, it is a tale that has been told time and again throughout history about how easy it is for freedom to fall and tyranny to rise, and it often begins with one small, seemingly inconsequential willingness on the part of the people to compromise their principles and undermine the rule of law in exchange for a dubious assurance of safety, prosperity and a life without care.
For example, 86 years ago, the citizens of another democratic world power elected a leader who promised to protect them from all dangers. In return for this protection, and under the auspice of fighting terrorism, he was given absolute power.
This leader went to great lengths to make his rise to power appear both legal and necessary, masterfully manipulating much of the citizenry and their government leaders.
Unnerved by threats of domestic terrorism and foreign invaders, the people had little idea that the domestic turmoil of the times—such as street rioting and the fear of Communism taking over the country—was staged by the leader in an effort to create fear and later capitalize on it.
In the ensuing months, this charismatic leader ushered in a series of legislative measures that suspended civil liberties and habeas corpus rights and empowered him as a dictator.
On March 23, 1933, the nation’s legislative body passed the Enabling Act, formally referred to as the “Law to Remedy the Distress of the People and the Nation,” which appeared benign and allowed the leader to pass laws by decree in times of emergency.
What it succeeded in doing, however, was ensuring that the leader became a law unto himself.
The leader’s name was Adolf Hitler, and the rest, as they say, is history.
Yet history has a way of repeating itself.
Hitler’s rise to power should serve as a stark lesson to always be leery of granting any government leader sweeping powers.
Clearly, we are not heeding that lesson.
“How lucky it is for rulers,” Adolf Hitler once said, “that men cannot think.”
The horrors that followed in Nazi Germany might have been easier to explain if Hitler had been right. But the problem is not so much that people cannot think but that they do not think. Or if they do think, as in the case of the German people, that thinking becomes muddled and easily led.
Hitler’s meteoric rise to power, with the support of the German people, is a case in point.
On January 30, 1933, Hitler was appointed chancellor of Germany in full accordance with the country’s legal and constitutional principles. When President Paul von Hindenburg died the following year, Hitler assumed the office of president, as well as that of chancellor, but he preferred to use the title Der Füehrer (the leader) to describe himself. This new move was approved in a general election in which Hitler garnered 88 percent of the votes cast.
It cannot be said that the German people were ignorant of Hitler’s agenda or his Nazi ideology. Nazi literature, including statements of the Nazi plans for the future, had papered the country for a decade before Hitler came to power. In fact, Hitler’s book Mein Kampf, which was his blueprint for totalitarianism, sold more than 200,000 copies between 1925 and 1932.
Clearly, the problem was not that the German people did not think but that their thinking was poisoned by the enveloping climate of ideas that they came to accept as important.
At a certain point, the trivial became important, and obedience to the government in pursuit of security over freedom became predominant.
As historian Milton Mayer recounts in his seminal book on Hitler’s rise to power, They Thought They Were Free, “Most of us did not want to think about fundamental things and never had. There was no need to. Nazism gave us some dreadful, fundamental things to think about—we were decent people‑—and kept us so busy with continuous changes and ‘crises’ and so fascinated, yes, fascinated, by the machinations of the ‘national enemies’, without and within, that we had no time to think about these dreadful things that were growing, little by little, all around us.”
The German people were not oblivious to the horrors taking place around them. As historian Robert Gellately points out, “[A]nyone in Nazi Germany who wanted to find out about the Gestapo, the concentration camps, and the campaigns of discrimination and persecutions need only read the newspapers.”
The warning signs were definitely there, blinking incessantly like large neon signs.
“Still,” Gellately writes, “the vast majority voted in favor of Nazism, and in spite of what they could read in the press and hear by word of mouth about the secret police, the concentration camps, official anti-Semitism, and so on. . . . [T]here is no getting away from the fact that at that moment, ‘the vast majority of the German people backed him.’”
Half a century later, the wife of a prominent German historian, neither of whom were members of the Nazi party, opined:
“[O]n the whole, everyone felt well. . . . And there were certainly eighty percent who lived productively and positively throughout the time. . . . We also had good years. We had wonderful years.”
In other words, as long as their creature comforts remained undiminished, as long as their bank accounts remained flush, as long as they weren’t being discriminated against, persecuted, starved, beaten, shot, stripped, jailed and turned into slave labor, life was good.
This is how tyranny rises and freedom falls.
The American kleptocracy (a government ruled by thieves) has sucked the American people down a rabbit hole into a parallel universe in which the Constitution is meaningless, the government is all-powerful, and the citizenry is powerless to defend itself against government agents who steal, spy, lie, plunder, kill, abuse and generally inflict mayhem and sow madness on everyone and everything in their sphere.
This dissolution of that sacred covenant between the citizenry and the government—establishing “we the people” as the masters and the government as the servant—didn’t happen overnight. It didn’t happen because of one particular incident or one particular president. It is a process, one that began long ago and continues in the present day, aided and abetted by politicians who have mastered the polarizing art of how to “divide and conquer.”
Unfortunately, there is no magic spell to transport us back to a place and time where “we the people” weren’t merely fodder for a corporate gristmill, operated by government hired hands, whose priorities are money and power.
As I make clear in my book Battlefield America: The War on the American People, our freedoms have become casualties in an all-out war on the American people.
So yes, let’s talk about impeachment, but don’t fall for the partisan shell game that sets Trump up as the fall guy for the Deep State’s high crimes and misdemeanors.
Set your sights higher: impeach the government for overstepping its authority, abusing its power, and disregarding the rule of law.
Tyler Durden
Tue, 11/19/2019 – 22:45 - "It's Really Refreshing And Relaxing" – College Students Ditch Smartphones For A Week, Changed Their Lives
“It’s Really Refreshing And Relaxing” – College Students Ditch Smartphones For A Week, Changed Their Lives
Dozens of students at Adelphi University, a private university in Garden City, New York, abandoned their smartphones for a week, it was part of a college course that would break the cycle of addiction of their dependence on technology, reported CBS NewYork.
CBS2’s Carolyn Gusoff interviewed several students last week who were finally reunited with their smartphones.
Jacob Dannenberg, a student who took part in the experiment, said he had to use an ‘old school alarm clock’ to wake up.
Dannenberg had to write notes and keep a journal of tasks because without a smartphone, he was basically paralyzed from completing some of life’s simplest tasks.
One student told Gusoff that “I’m freaking out, I could probably cry right now.” The student said she didn’t have a smartphone for a week.
Professor Donna Freitas, who experimented with students, said it was a bold challenge for students to recognize just how dependent they’re on technology.
Dannenberg told Gusoff that after ditching his smartphone for a week, life is truly amazing. “I’m having a lot of better relationships… it’s a stress-free environment no pressure about social media,” he said.
Student Adrianna Cigliano said, “I think it’s really refreshing and relaxing… I was able to fall asleep a lot easier” without the phone.
Cigliano added that “Doing homework was 100 percent easier. I got it done faster, and I was in the zone.”
Freitas said she wanted students to recognize their addiction level to smartphones.
“Are the conveniences worth it because the drawback are pretty significant,” Freitas said.
“The fact that no one can focus, that my students can’t sleep… They feel bad about themselves because of social media, and the list goes on and on.”
Students told Gusoff that after the week challenge, they would change their smartphone habits and lessen their screentime.
“I want to keep that balance and figure out the healthy relationship that we deserve to have with our phones,” Cigliano added.
“My screen time is definitely going to go down, and I’m going start to appreciate my surroundings more because usually I’m looking at my screen all the time,” Ashley Castillero said.
Students overwhelmingly said they want to live more in the moment, rather than have their heads buried in the fake social media world.
Tyler Durden
Tue, 11/19/2019 – 22:25 - "I'm Pissed About Multiple Things Right Now" – Ilargi On Assange, Nitrogen, Pensions, & John Solomon
“I’m Pissed About Multiple Things Right Now” – Ilargi On Assange, Nitrogen, Pensions, & John Solomon
Authored by Raul Ilargi Meijer via The Automatic Earth blog,
I’m getting pissed off about multiple things right now, too many to make them all separate essays.
Let’s give it a combined shot:
In Holland, the talk of the town is nitrogen emissions. I’d never seen it raised as that kind of problem, but there you go. The government last week decided to lower the max speed limit on highways to 100km (66miles) , from 120-130. Their reasoning was that this would allow the building industry to build more -by now hugely overpriced- homes and apartments.
Oh, but agriculture (aka cattle) is responsible for 46% of nitrogen emissions. So they have a plan to alter cattle feed (I am still serious here). I understand that neighbors Germany and Belgium have had nitrogen policies in place for years, so their cars can keep on pedaling to the metal because they don’t have a problem. Huh?
Also in Holland, big discussions about cuts to pensions. Which of course leads to big protests, which in turn makes the government make sure that cuts this year will be minimal. Okay, but how about next year? No comment. Holland is supposed to have one of the best pension systems on the planet, but they don’t get to escape the BIG erosion either.
Aging population, fewer contributors, lower wages, it’s happening everywhere. Our pension systems are Ponzi schemes. Every single penny you give a pensioner today is taken away from one tomorrow. The entire system is broke, we just don’t want to face that simple fact.
15 years ago, pensions systems were required by law to hold only AAA-denominated assets. Look at that today. They all have 7-8% in their prospectus, and bonds pay 1%, if that. Unless you gamble. So they have all moved into equities, which look fine because central banks prop them up, but the model itself has changed like Jekyll becames Hyde.
Then, Sweden decided to drop the 2010 rape charges against Assange 9 years later. In reality, there never WERE any rape charges. But still, prosecutor Eva-Marie Persson re-opened the “investigation” in May 2019. Just so Julian could be dragged from the Ecuador embassy in London on a seemingly legit charge. Eva-Marie Persson should be in Belmarsh prison, not Julian. But she represents the law, and he does not. He has exposed its dim-witted lackeys. My comment earlier today at the Automatic Earth:
“Sweden has dropped its rape inquiry into Julian Assange. Good f%@$#ing Lord, what year is it? The f%@$#ing job is f%@$#ing done, isn’t, you f%@$#ers? How can you be a Swede and not protest this? What kind of people live in that country? No, I know, the same kind as live in the UK and US. Ignorant f%@$#s.”
Oh, and now they’re arresting Epstein’s prison guards? Come on guys, you got to recognize a joke as a joke.
Then a CNN piece about John Solomon, who was thrown out of the Hill recently though he was their best reporter. Now, he was already fired from the Hill despite being their ace reporter, but that’s not enough for CNN, they want the owner too. So for CNN, it’s a direct link from Trump to Giuliani to Solomon to Hill owner Jimmy Finkelstein:
Jimmy Finkelstein, The Owner Of The Hill, Has Flown Under The Radar
James “Jimmy” Finkelstein, the owner of The Hill newspaper, is not a widely known media executive, but he is one of the era’s most consequential. Finkelstein resides at the nexus of President Trump, Rudy Giuliani, and John Solomon, the now-former executive at The Hill and current Fox News contributor who pushed conspiracy theories about Ukraine into the public conversation. While Solomon has received significant media attention for his work at The Hill, Finkelstein has stayed out of the headlines, despite having himself played a crucial role in the saga.
One, Lt. Col. Alexander Vindman, said of one of Solomon’s stories, “I think all the key elements were false.” Pressed further on the matter by Rep. Lee Zeldin, a New York Republican, Vindman said, “I haven’t looked at the article in quite some time, but you know, his grammar might have been right.” [..] After CNN Business reached out to a representative for The Hill for comment, The Hill Editor-In-Chief Bob Cusack announced in a Monday morning email to staffers that Solomon’s work was under review.
“As you are aware, John Solomon left The Hill earlier in the fall, but in light of recent congressional testimony and related events, we wanted to apprise you of the steps we are taking regarding John Solomon’s opinion columns which were referenced in the impeachment inquiry,” Cusack wrote. “Because of our dedication to accurate non-partisan reporting and standards, we are reviewing, updating, annotating with any denials of witnesses, and when appropriate, correcting any opinion pieces referenced during the ongoing congressional inquiry,” Cusack added.
Now, I have followed, and quoted, Solomon for quite some time, and I think he’s thorough, well documented, and in short what a journalist should be (nothing to do with opinion). Calling him conspirational is really quite a jump. But this is CNN. They do conspiracy like no-one else. And apparently they got what they wanted, because the Hill now is this:
Trump’s Ukraine Scandal Rooted In Fear Of Biden
Why is President Trump so nervous about the 2020 race? He has a record amount of campaign cash. Russian bots are still working for him. And he still has the backing of more than 80 percent of his party. So, how do I know he’s so nervous? As Trump loves to say: Read the transcript. At the heart of the phone call that has led to impeachment hearings is Trump going out on a shaky limb to ask Ukrainian President Volodymyr Zelensky for a “favor.” That “favor” included a request for Zelensky to investigate former Vice President Joe Biden and Biden’s son, Hunter. The only reason for Trump to risk asking a foreign leader for help getting political dirt on an opponent is that he feared that rival’s power.
Me personally, I’ll stick with John Solomon for now. I haven’t caught him on a lie, and not on propaganda. Which is much better than I can say about just about every other outlet out there. Yeah, Hannity is a very loose cannon, Tucker Carlson not that much, but it’s the CNN people, and Rachel Maddow, that are far worse when it comes to propaganda.
And Adam Schiff too, who gets to conduct his fake trial in which he doesn’t have to say a single true word because he’s not under oath and the “witnesses” can be 2nd-3rd-4th hearsay ones. Anyone can say anything as long as it is negative for Trump. You know, that guy the American people elected as their president 3 years ago. Let’s move this into a courtroom -like the Senate- and do away with the absurd theater.
* * *
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Tyler Durden
Tue, 11/19/2019 – 22:05 - Baby Boomers Face Most Economic Insecurity In Democratic States
Baby Boomers Face Most Economic Insecurity In Democratic States
New estimates from the 2019 Elder Index, calculated by the Gerontology Institute at the University of Massachusetts Boston, show that older Americans living alone in mostly Democratic Northeast states are at risk of not having enough financial resources to cover expenses, reported Bloomberg.
The Elder Index tracks the income needed for baby boomers to cover basic needs. The average older adult without a mortgage needs about $21,000 per year to live or about $31,800 if married.
The 2019 Elder Index details how older adults living in Northeast states, with several regional exceptions of Hawaii and California, are at the highest risk of financial instability. Some of the costliest states are Democratic ones, while the most affordable ones are Republican.
A well-funded retirement account of a boomer generally has a mix of bonds and stocks that produce income, with the compliments of social security payouts. But since the Federal Reserve has robbed savers over the last ten years by setting interest rates lower than usual — income for boomers has been rather depressing — contributing to their economic demise.
Economic stress among older Americans has been increasing in the last decade, and at least 25% of boomers are struggling with deteriorating health, the Centers for Disease Control and Prevention has said.
There are about 77 million boomers across the country; many of them are becoming a financial drain on the system. At least 33% of older folks have zero savings, and it could explain why they’re all becoming Lyft and Uber drivers, crowding out insolvent millennials.
The take away from this report, if you’re a boomer and broke, don’t live in a Democrat state. If you already do, move while you still can.
Tyler Durden
Tue, 11/19/2019 – 21:45 - C.J. Hopkins: Reclaiming Your Inner Fascist
C.J. Hopkins: Reclaiming Your Inner Fascist
Authored (satirically) by C.J.Hopkins via The Unz Review,
OK, we need to talk about fascism. Not just any kind of fascism. A particularly insidious kind of fascism. No, not the fascism of the early 20th Century. Not Mussolini’s National Fascist Party. Not Hitler’s NSDAP. Not Francoist fascism or any other kind of organized fascist movement or party. Not even the dreaded Tiki-torch Nazis.
It’s the other kind of fascism we need to talk about. The kind that doesn’t come goose-stepping up the street waving big neo-Nazi flags. The kind we don’t recognize when we’re looking right at it.
It’s like that joke about the fish and the water … we don’t recognize it because we’re swimming in it. We’re surrounded by it. We are inseparable from it. From the moment we are born, we breathe it in.
We are taught it by our parents, who were taught it by their parents. We are taught it again by our teachers in school. It is reinforced on a daily basis at work, in conversations with friends, in our families and our romantic relationships. We imbibe it in books, movies, TV shows, advertisements, pop songs, the nightly news, in our cars, at the mall, the stadium, the opera … everywhere, because it is literally everywhere.
It doesn’t look like fascism to us. Fascism only looks like fascism when you’re standing outside of it, or looking back at it. When you are in it, fascism just looks like “normality,” like “reality,” like “just the way it is.”
We (i.e., Americans, Brits, Europeans, and other citizens of the global capitalist empire) get up in the morning, go to work, shop, pay the interest on our debts, and otherwise obey the laws and conform to the mores of a system of power that has murdered countless millions of people in pursuit of global-hegemonic dominance. It has perpetrated numerous wars of aggression. Its military occupies most of the planet. Its Intelligence agencies (i.e., secret police) operate a worldwide surveillance apparatus that can identify, target, and eliminate anyone, anywhere, often by remote control. Its propaganda network never sleeps, nor is there any real way to escape its constant emotional and ideological conditioning.
The fact that the global capitalist empire does not call itself an empire, and instead calls itself “democracy,” doesn’t make it any less of an empire. The fact that it uses terms like “regime change” instead of “invasion” or “annexation” makes very little difference to its victims. Terms like “security,” “stability,” “intervention,” “regime change,” and so on are not meant for its victims. They are meant for us … to anesthetize us.
The empire is “regime-changing” Bolivia currently. It has “regime-changed” most of Latin America at one time or another since the Second World War. It “regime-changed” Iraq, Libya, Yugoslavia, Indonesia … the list goes on. It very much wants to “regime-change” Iran, which it “regime-changed” back in the 1950s, before the Iranians “regime-changed” it back. It would love to “regime-change” Russia and China, but their ICBMs make that somewhat impractical. Basically, the empire has been “regime-changing” everyone it can since the end of the Cold War. It has run into a little bump in Syria, and in Venezuela, but not to worry, it will get back there and finish up eventually.
Now, let’s be clear about this “regime-change” business. We’re talking about invading other people’s countries, and orchestrating and sponsoring coups, or otherwise overthrowing their governments, and murdering, torturing, and oppressing people. Sending in terrorists, death squads, and such. We have organizations that train guys to do that, i.e., to round people up, take them out to the jungle, or the woods, or wherever, rape the women, and then summarily shoot everyone in the head. We pay for this kind of thing with our taxes, and our investments in the global corporations that our militaries and intelligence agencies serve. We know this is happening. We can google this stuff. We know “where the trains are going,” as it were.
And yet, we do not see ourselves as monsters.
The Nazis didn’t see themselves as monsters. They saw themselves as heroes, as saviors, or just as regular Germans leading regular lives. When they looked at the propaganda posters which surrounded them (as the Internet surrounds us today), they didn’t see sadistic mass-murderers and totalitarian psychopathic freaks. They saw normal people, admirable people, who were making the world a better place.
They saw themselves. They saw “the good guys.”
This is primarily how propaganda works. It isn’t meant to fool anybody. It is there to represent “normality” (whatever “normality” happens to be in whatever empire one happens to inhabit). It is Power’s way of letting us know what it wants us to believe, how it wants us to behave, who our official enemies are. Its purpose isn’t to mislead or deceive us. It is an edict, a command, an ideological model … to which we are all expected to conform. Conform to this ideological model, and one is rewarded, or at least not punished. Deviate from it, and suffer the consequences.
It is a question of obedience, not one of truth.
This is why it doesn’t matter that there is no actual “Attack on America,” and that the Russians didn’t “hack,” “subvert,” “meddle in,” or otherwise significantly “influence” the 2016 presidential election or otherwise put Donald Trump in office. John Brennan and the CIA say they did, and the corporate media say they did, so all Good Americans have to pretend to believe it. Likewise, it also doesn’t matter if an organization like the OPCW collaborated with the empire’s regime-change specialists who staged a “chemical weapons attack” on helpless women and children in Douma (because, no matter what the empire did or didn’t do, Assad is a Russian-backed, baby-gassing devil!), or if The Guardian just makes up stuff about Julian Assange out of whole cloth and prints it as news.
This is also why, when The Guardian runs an enormous color propaganda photo of a beneficent-looking Hillary Clinton and her soon-to-be-Democratic senator daughter posing as our last line of defense against the Invasion of the Putin-Nazis, and as the future of Western democracy, and whatever, on the cover of its cultural Review, this isn’t perceived as propaganda. Never mind that this woman (i.e., Hillary) is directly responsible for the deaths and misery of God knows how many innocent people in the course of her lucrative service to the empire. Never mind that this is the same exact person that sadistically cackled on national television when the empire’s associates anally knife-raped and murdered Muammar Gaddafi in Libya, and then transformed a developed African country into a hellish human-slavery market.
For fascists (and authoritarian personalities generally), facts are completely beside the point. The point is to robotically conform to the ideology (or hysterical ravings) of whatever leader or system of power happens to be in charge of things.
Authoritarian personality types are skilled at determining exactly who that is (i.e, who is really in charge of things) and obsequiously currying favor with them. For some, this is an innate talent; others have this talent conditioned into them (or beaten into them) over the course of years. Either way, the result is the same.
Put a bunch of random people together in a group and give them a problem to solve, or a complex project or objective to accomplish. Don’t give them any organizational guidance, just put them in a room and watch what happens.
The first thing that happens is … a “leader” emerges. Someone (or a few people) decides that someone needs to be in charge of this project, and they feel pretty strongly that it should be them. If more than one such “leader” emerges, or if the need for a leader itself is challenged, a struggle for power will immediately ensue. The aspiring “leaders” will compete for the support of the “followers” in the group. Sides will be taken. Eventually, a “leader” will be chosen. Occasionally, this will happen openly, but, more often than not, it will happen unconsciously. Someone in the group will want to dominate … and the rest of the group will want them to dominate. They will experience discomfort until a “leader” is established, and they will feel an enormous sense of relief once one is, and they can surrender their autonomy.
I assume you’re familiar with the Milgram experiment, but, if not, you should probably read up on that, and maybe read Adorno’s The Authoritarian Personality. It’s a bit outdated, and over-focused on the Nazis (it was originally published in 1950), but I think you’ll get the general idea. Once you’ve done that, turn on your television, or your radio, or scan the news on the Internet, or walk down any big city street and compare the content on the digital billboards, movie posters, and advertisements to historical fascist propaganda … that is, if your boss will let you leave the workplace long enough to do that, which he probably will if you ask him in that special way you have learned over time that he likes and generally tends to respond to.
Sorry, I didn’t mean to get inside your mind. That’s kind of a fascistic thing to do.
Look, the point is, we all have an “Inner Fascist,” with whom we are either acquainted or not. I’m a playwright and a novelist, which means I’ve got a big, fat, Sieg-heiling Inner Fascist goose-stepping around inside my head. I invent whole worlds, which I dictatorially control. I put people in them and make them say things. It doesn’t get much more fascistic than that. The way I see it, my art is how I sublimate my Inner Fascist, so that he doesn’t run around invading Poland, exterminating the Jews, or “regime-changing” Bolivia.
I’m not a psychiatrist, or a fascism expert, but I figure this is probably the most we can do … recognize, acknowledge, and find some way to sublimate our Inner Fascists, because, I guarantee you, they’re not going away. (If you don’t believe me, go watch that Planet Earth episode featuring the fascist chimpanzees.) Seriously, I recommend you do this. Get acquainted with your Inner Fascist, in an appropriate set and setting, of course. Give him something safe to dominate and then let him go totally totalitarian. You’ll be doing yourself and the rest of us a favor.
Ironically, it is those who are not acquainted with their Inner Fascists (or who deny they have one) who are usually the first to make a big public show of loudly denouncing “fascism,” brandishing their “anti-fascist” bona fides, accusing other people of being “fascists,” and otherwise desperately projecting their Inner Fascists onto those they hate, and want to silence, if not exterminate. This is one of the hallmarks of repressed Inner Fascism … this compulsion to control what other people think, this desire for complete ideological conformity, this tendency, not to argue with, but rather, to attempt to destroy anyone who disagrees with or questions one’s beliefs.
We all know people who behave this way. If you don’t, odds are, one of them is you.
So, please, if you haven’t done so already, get acquainted with your “Inner Fascist,” and find him something harmless to do, before he … well, you know, starts singing hymns to former FBI directors, or worshipping the CIA, or Obama, or Trump, or Hillary Clinton, or supports the empire’s next invasion, or coup, or just makes a desperate, sanctimonious ass of you both on the Internet.
I’m not kidding. Reclaim your “Inner Fascist.” It might sound crazy, but you will thank me someday.
* * *
C. J. Hopkins is an award-winning American playwright, novelist and political satirist based in Berlin. His plays are published by Bloomsbury Publishing (UK) and Broadway Play Publishing (USA). His debut novel, ZONE 23, is published by Snoggsworthy, Swaine & Cormorant Paperbacks. He can be reached at cjhopkins.com or consentfactory.org.
Tyler Durden
Tue, 11/19/2019 – 21:25 - Boomers Win Again: Old Americans To Inherit "Unprecedented Amount That Is Incomprehensably Large"
Boomers Win Again: Old Americans To Inherit “Unprecedented Amount That Is Incomprehensably Large”
When it comes to the generational conflict at the heart of America’s inequality split, there is no contest: the elderly – those between the ages of 65 and 75 who own the bulk of financial assets – have over 13 times as much wealth as America’s Millennials (see chart below), young people between 25 and 35, who may not be rich, but have come up with a biting, witty response to their much richer elders: “Ok, Boomer.”
Unfortunately for America’s youth, who may have been hoping to get rich quick when they inherit the wealth of their aging parents, we have some very bad news.
While it is true that an unprecedented $36 trillion – roughly a third of total US household wealth – will flow from one US generation to another over the next 30 years with the pace of bequests already surging as Americans inherited $427 billion in 2016, up 119% from 1989, it’s not the Millennials who stand to benefit.
Instead, the beneficiaries of this inheritance tsunami are quite old themselves; according to the the study, from 1989 to 2016 U.S. households inherited more than $8.5 trillion. Over that time, the average age of recipients rose by a decade to 51. Fast forward a few more years, and now, more than a quarter of bequests now go to adults 61 or older.
In other words, America’s again rich are about to get even richer as their parents pass away.
“Wealth equal to nearly two times the size of the U.S. GDP is expected to be gifted to charities and heirs over the next few decades,” said United Income founder Matt Fellowes. “It’s a historically unprecedented amount that is almost incomprehensibly large.” However, “instead of diapers and school, inheritances are increasingly going toward medical bills and retirement savings,” Fellowes said.
The irony is that in addition to virtually every other aspect of US life, one can now add inheritances to the dynamic that’s widening the wealth gap between generations.
As we noted last week, Americans younger than 50 held just 16% of all investable assets in 2016, down from 31% in 1989, the Fed’s latest triennial Survey of Consumer Finances found, leaving the rest to households 50 and older. It also means that the bulk of America’s “Top 1%” also happens to be 50 or older.
However, age inequality is most dramatic when comparing the oldest and youngest adults. In 1989, the median household age 65 to 75 held almost eight times more wealth than families headed by 25- to 35-year-olds. By 2016, according to an analysis by the St. Louis Fed, the median baby boomer had close to 13 times more wealth than the typical millennial.
Even more ironic: while boomers as a group inherited trillions from their parents, most members of the postwar generation got nothing. That’s about to change, however, as about 20% of households have received inheritances, United Income’s analysis shows, a share that while flat over the past 30 years, is set to soar.
These generational gifts are coming in handy, with the median recipient getting about $55,000, which is more than double their typical retirement savings. “Most inheritances are going to older adults who have little in the way of retirement savings,” said Fellowes, a former Brookings Institution scholar. “People receiving inheritances are pretty middle class.”
Except, when they are not, of course.
Meanwhile, the size of the average inheritance received in 2016 was about $295,000, sharply higher from $169,000 in 1989.
Why is this notable? Because contrary to popular opinion, as elderly Americans receive an “unexpected” gift, they don’t rush to spend it, but instead since more Americans live longer without the safety net of a traditional pension, they’re spending frugally to make sure their wealth lasts. The result is more Americans dying before they can spend all of their savings. Amusingly, financial advisers told Bloomberg they often need to encourage affluent clients to enjoy their wealth rather than hoarding it.
Some more details: only about 9% of estates consist entirely of a house or other property; the average estate is 46% stocks, bonds, cash and other liquid investments, giving an immediate boost to recipients’ own retirement planning at a key time.
That said, the data is likely skewed even more in favor of the older rich: according to Bloomberg, United Income’s estimates don’t include gifts made during donors’ lifetimes – a typical move in estate planning for the ultra-high net worth cohort, often using trusts.
Even so, it still found a widening gulf between the super rich and everyone else: the median inheritance has risen only about $15,000 in three decades, while they’ve more than doubled for the 0.3% of Americans receiving at least $1 million. In 1989, their inheritances averaged an inflation-adjusted $2.7 million. By 2016, they were each getting an average of $6.6 million.
To summarize: America’s Millennials may be ridiculing the country’s boomers with the rather nonsensical “Ok, Boomer’ tagline that has gone viral, but not only are the Boomers getting the final laugh, they are getting richer as America’s youth gets progressively poorer.
Tyler Durden
Tue, 11/19/2019 – 21:25 - Carl Icahn Losing Tens Of Millions As "Big Short 2" Trade Turns Sour
Carl Icahn Losing Tens Of Millions As “Big Short 2” Trade Turns Sour
Back in July, we passed along a rumor that a certain “iconic” investor had aggressively entered the “Big Short 2” trade, which emerged in early 2017 and consisted of shorting America’s malls by going long default risk via CMBX, or otherwise shorting the CMBS.
A certain iconic investor seems to be aggressively entering the “Big Short 2.0” trade
— zerohedge (@zerohedge) July 29, 2019
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That investor, we can now reveal thanks to confirmation by the WSJ, was none other than billionaire Carl Icahn, who this summer became the most recent – and most prominent – member of the “Big Short 2” trade. There is just one problem: like most others who bet against the mall sector in the past two years, Icahn has suffered tens if not hundreds of millions in losses so far.
Most recently, we profiled the progression of the Big Short 2 trade one month ago when we reported that one of the firms that had put the “Big Short 2” trade on was hedge fund Alder Hill Management – an outfit started by protégés of hedge-fund billionaire David Tepper – which ramped up wagers against the mall bonds. Alder Hill joined other traders which in early 2017 bought a net $985 million contracts that targeted the two riskiest types of CMBS, in hopes of quick payouts and even quicker mass defaults.
“These malls are dying, and we see very limited prospect of a turnaround in performance,” said a January 2017 report from Alder Hill, which began shorting the securities. “We expect 2017 to be a tipping point.”
Alas, Alder Hill was wrong, because while the deluge of retail bankruptcies…
… and mall vacancies accelerated since then hitting an all time high in 2019…
… not only was 2017 not a tipping point, but the trade failed to generate the kinds of desired mass defaults that the shorters were betting on, while the negative carry associated with the short hurt many of those who were hoping for quick riches.
As a result, not only did Alder Hill Management close out the trade at around the time Carl Icahn was putting it on, but Eric Yip, the founder of the New York-based hedge fund, also wound down the entire $300 million hedge fund. And while some of Alder Hill’s other trades were profitable, its 2½ years of losses shorting mall debt convinced Yip to shut down, ostensibly long before many of the malls he was betting against.
Ironically, it appears that the way Icahn made his way into the trade is by way of Yip, who worked for Icahn in the 2000s and marketed his trade through presentations with bankers and investors to try to get others to join his bearish stance to push the index lower; and as we reported in October, Yip was forced to exit his loss-making trade over the summer after the index jumped in price, according people familiar with the matter.
And while iconic billionaire investor Carl Icahn is far from shutting down his family office because one particular trade has gone against him, this trade puts him on a collision course with two of the largest money managers, including Putnam Investments and AllianceBernstein, which have a bullish view on malls and have generally taken the other side of the Big Short/CMBX trade, the WSJ reports.
This face-off, in the words of Dan McNamara a principal at the NY-based MP Securitized Credit Partners, is “the biggest battle in the mortgage bond market today” adding that the showdown is the talk of this corner of the bond market, where more than $10 billion of potential profits are at stake on an obscure index.
For those who have not read our previous reports on the second Big Short, here is a brief rundown courtesy of the WSJ:
each side of the trade is speculating on the direction of an index, called CMBX 6, which tracks the value of 25 commercial-mortgage-backed securities, or CMBS. The index has grabbed investor attention because it has significant exposure to loans made in 2012 to malls that lately have been running into difficulties. Bulls profit when the index rises and shorts make money when it falls.
The various CMBX series are shown in the chart below, with the notorious CMBX 6 notable for its substantial, 40% exposure to retail properties.
Ironically, despite a year of record store closures and continued retail bankruptcies, the CMBX 6 series index has climbed about 10% year to date, suggesting either growing optimism about the malls, shopping centers and outlets connected to the index, or merely a flood of liquidity forcing yield-starved investors to bid up every corner of the market, no matter how risky or mispriced it is.
Eventually, other hedge funds followed in the footsteps of Alder Hill’s Yip, and backed off the trade after suffering their own losses, their short squeeze another reason the index is rising and forcing even more shorts to capitulate.
Yet while Icahn has also lost millions on this trade, he hasn’t backed off and according to the WSJ may even be adding to his bearish trade which he now considers a long-term position. Icahn has about 2 more years before the CDS on CMBX Series 6 mature; the insurance contracts will pay off if landlords run into difficulty paying back their debt by 2022.
Meanwhile, despite an acceleration in the “retail apocalypse” courtesy of Amazon.com, even as many malls and shopping centers have suffered deteriorating income, only three of the roughly 40 malls and shopping centers linked to the CMBX 6 have been delinquent on their loans since 2012, according to Trepp LLC, a real-estate data provider.
As bears scrambled for cover, the bulls took the offensive, and in a report released late last month, AllianceBernstein disputed the prevailing view that malls are dying, claiming instead that while it expected some defaults when the mortgages come due in 2022, it believed many of the malls linked to the CMBX 6 index would receive enough rent to support their expenses and debt service. One such example is the Dayton Mall in Ohio which has lost tenants including Payless ShoeSource, but has found new ones, like Ross Dress for Less.
The short sellers are peddling a “false narrative” said Brian Phillips, director of Commercial Real Estate Credit Research at AllianceBernstein. “They are focused on momentum rather than credit fundamentals.”
Short sellers have said they don’t need a large drop in mall occupancies to profit, nor do they need widespread near-term defaults. They are wagering that the net operating income of the malls continues to drop and that owners have trouble paying off loans in three years.
Ultimately, none of the fundamentals matter as long as the Fed is juicing the market with tens of billions in excess liquidity in the aftermath of September’s repocalypse: as long as Powell is merrily flooding the market with excess liquidity, the CMBX indexes will keep rising oblivious to the viability of the underlying collateral.
To be sure, there is a certain symmetry to what Carl is doing now and what Burry and/or Paulson were doing in 2007 by betting against subprime. It was only by shorting some of the favorite longs of “Whale investors” who swore up and down that “subprime losses would be contained” (no doubt inspired by certain comments by a man who would soon become Fed Chairman) that these investors made billions. Then again, they had the trade not only at the right place but also the right time, just before the Fed took over capital markets. Alas for the “Big 2.0 Shorts”, the Fed is now in full-blown liquidity injection mode.
The question then is whether the Fed will keep flooding the market until 2022. As such, the Big Short 2.0 trade has become not one just targeting America’s increasingly empty malls, but the generosity of the Fed itself. For those who persevere and refuse to be stopped out of their positions – like Icahn, at least for now – the rewards with sticking until the bitter end could be very enormous… although if Elizabeth Warren is president in 2022, Icahn may want to reconsider if adding another billion to his net worth at the expense of imploding brick and mortar retailers is really worth the brain damage that will surely follow.
Tyler Durden
Tue, 11/19/2019 – 21:05 - "…And You Thought Recession Risk Was A Thing Of The Past…"
“…And You Thought Recession Risk Was A Thing Of The Past…”
Authored by Danielle DiMartino Booth via QuillIntelligence.com,
Rabbit Season! Duck Season! Rabbit Season! Duck Season!
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As the third-quarter earnings season comes to a close with a -2.3% showing on EPS, analysts are more bearish going into the fourth quarter; the weakness looks to spread to six sectors vs. five in the third quarter indicating the industrial slowdown has spread to services
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Third quarter revenue growth has slowed to levels not seen since 2016’s third quarter while expectations are that the year’s final three months slow further; as with earnings, the quarter-on-quarter weakness is expected to broaden to health care and consumer discretionary
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In the short-run, companies will likely endeavor to cut costs, including labor, to draw a line under earnings as revenues deteriorate; given revenues are a demand proxy, a concurrent slowing in GDP is also foreseeable
Rabbit Fire was a 1951 Looney Tunes cartoon starring Bugs Bunny, Daffy Duck and Elmer Fudd. The Warner Bros. short was the first to feature the classic feud between Bugs and Daffy. In it, Daffy lures Elmer to Bugs’ burrow, calls down to him, then watches as Elmer shoots at the emerged Bugs, parting his ears. As Elmer aims again, Bugs informs him that it’s not rabbit season, but rather duck season. Daffy storms in irate and attempts to convince Elmer that Bugs is lying. Their conversation breaks down into Bugs engaging Daffy in the verbal play illustrated in today’s title. Of course, Daffy fumbles into saying “duck season” and Elmer fires away.
Whether you are a fan of Bugs or Daffy, there’s another season in the financial market world that’s about to come to a close – earnings season.
Ninety-two percent of S&P 500 companies have reported third-quarter earnings results. Last Friday, FactSet reported that earnings per share (EPS) had declined 2.3% versus a year ago. Industry performance was mixed with five sectors – Energy, Materials, Information Technology, Financials and Consumer Discretionary – reporting year-over-year declines and the other six – Utilities, Health Care, Real Estate, Consumer Staples, Industrials and Communication Services – posting year-over-year gains.
Analysts’ fourth-quarter guidance is more bearish for earnings compared to the third quarter. It’s anticipated that six sectors will decline including Energy, Materials, Industrials, Information Technology, Consumer Discretionary and Consumer Staples. This widened breadth carries a broader cyclical narrative beyond the sectors more closely affected by trade war; it bleeds into the entire consumer space. Implicit are hints of contagion from manufacturing to services that introduce broader labor market risks. And you thought recession risk was a thing of the past just because the yield curve un-inverted.
Cue Bugs and Daffy for an encore with a twist: “Earnings season! Revenue season! Earnings season! Revenue season!” The bottom line (earnings) gets all the attention each quarter. But the top line (revenue) should never be overlooked. For cycle chasers and equity strategists alike, revenue growth is the heartbeat of U.S. economic activity. It proxies Gross Domestic Product (GDP).
FactSet reported that revenue growth slowed to 3.1% in the third quarter, the slowest pace since the 2016’s third quarter. Despite the slowing, the breadth of gains revealed eight sectors expanded with only the remaining soft spots of Energy, Materials and Industrials contracting. Analysts projected a further deceleration in revenues to 2.5% with the same three sectors posting another retrenchment in the fourth quarter. Does this mean that top-line headwinds are, and will be contained to the sectors most exposed to the global growth slowdown and will therefore not spread across the economy to more consumer and service-oriented sectors?
Let’s reserve judgement on that. Instead, look at the trend in revenues from the third to fourth quarters. As the inset table above illustrates, the tamping down in demand will be relatively broad-based. The Consumer Discretionary sector is especially prominent.
To see if the storyline holds beyond equity analysts’ models, we recruited three other macro sources in today’s chart to gauge preliminary top-line guidance for the fourth quarter. Composite indexes that weighted manufacturing and services by their respective industry shares in GDP were utilized for credit managers (NACM), purchasing managers (ISM) and C-suite executives (IHS Markit).
In all three cases, a downshift has been in place for multiple quarters and the fourth quarter looks either close to or weaker than the third quarter. What’s important to note about a broadening slowdown in revenue is that over the short run, more companies could face cost cutting decisions, as opposed to the luxury of cost expansion choices.
Central banks are doing their darnedest to stave off the global slowdown with stimulus injections. Ascertaining clarity on the revenue outlook here at home will be a challenge as we head into an election year. Capex budgets are apt to be hamstrung by tight-fisted management so long as concerns about the top line refuse to fade. And that applies whether you’re in a red state or a blue state or you’re a rabbit or a duck.
Tyler Durden
Tue, 11/19/2019 – 20:45 -
- Swiss Watch Exports To Hong Kong Crash Amid Social Unrest
Swiss Watch Exports To Hong Kong Crash Amid Social Unrest
This morning we have some very telling data of the dire economic situation in Hong Kong: Swiss watch exports to Hong Kong crashed in October as social unrest continues to gain momentum in the city as demand for luxury goods evaporates.
The Federation of the Swiss Watch Industry published a new report Tuesday on Swiss watchmaking for October, detailing how shipments of steel and precious metal watches to Hong Kong plunged by as much as 30%.
Hong Kong’s tourism industry has suffered the worst downturn in a decade, as violent protests shut down streets and major shopping districts. Protests have become more violent in the last several months, forcing many wealthy mainland Chinese to abandon their visit to the city as it plummets into economic and social collapse.
The city entered a technical recession in the last several weeks, with its retail industry, comprised of the world’s luxury brands, experienced some of the worst declines in sales ever.
Watchmakers, particularly ones from Switzerland, have been reeling from the plunge in sales, as at least 30 major shopping malls have had to shut down, on and off across the city for the last five months amid continuing social unrest.
Luxury goods, such as jewelry, are usually half the cost in Hong Kong than in mainland China, but with protests continuing to spiral out of control, and the tourism industry collapsed as shopping districts are shut down, it seems that the Hong Kong crisis is sparking a slowdown contagion across the world.
Though Swiss trade with Hong Kong fell, Swiss watchmakers saw global exports increase by 1.5% in October. Growth in the first ten months was around 2.7%, far from last year’s annual pace of 6.3%, indicating the global economy has yet to bottom.
Tyler Durden
Tue, 11/19/2019 – 20:25 - China, Like 1990s' Japan, Will Be Dominated By Huge Zombie Banks
China, Like 1990s’ Japan, Will Be Dominated By Huge Zombie Banks
Authored by Mike Shedlock via MishTalk,
Michael Pettis has some words of wisdom for those who believe China will soon overtake the US as the world leader.
“Having the smaller banks absorbed by the bigger ones, which seems to be Beijing’s new strategy, will mean that China, like Japan in the 1990s, will be dominated by huge zombie banks,” says Michael Pettis at China Financial Markets in a series of Tweets.
The Tweets were in reference to the Wall Street Journal article Why China’s Smaller Banks Are Wobbling.
China’s banks come in various flavors. There are a handful of giants, and a few more medium-size banks that can also operate nationally. Below that lies a bigger cohort of city commercial banks, and more than a thousand tiny rural commercial lenders. Both city and rural banks have their roots in local credit unions, and tend to have limited geographic reach. Cracks are emerging at some small and midsize banks after years of rapid growth.
Smaller banks lent liberally to local governments and businesses, and bad debts are rising as China’s economy sputters. Poor governance probably created problems at some banks, too, such as Hengfeng Bank. In late 2017, the official Xinhua News Agency, citing a company statement, said Hengfeng Chairman Cai Guohua was being investigated for “alleged serious violation of discipline and law.”
Possible state intervention depends on how large and important a bank is, and who is backing it. In May, national authorities seized Baoshang Bank, a lender in the northern province of Inner Mongolia that was linked to missing tycoon Xiao Jianhua, calling it a “severe credit risk.” This was the first such takeover in more than two decades. In contrast, a big bank and two bad-loan managers bought stakes in the struggling Bank of Jinzhou from existing shareholders. Industry-watchers expect capital injections to follow.
Many banks aren’t profitable enough to boost capital through retained earnings. And existing stockholders may be reluctant to buy new shares, given questions over reporting and ownership.
Zombification Four Point Synopsis
Forget the Yuan: King Dollar is Here to Stay
Many believe deficit spending will kill the US dollar as a reserve currency and the yuan will take over.
They are wrong. Forget the Yuan: King Dollar is Here to Stay for quite some time. I don’t know what the replacement will be if any, but it won’t be the Yuan.
The having the reserve currency is actually a curse that no one wants, especially China, but also Trump.
That is correct!
I was discussing from the point of view of what every country wants, however, illogical. https://t.co/oWPZf8SKzf
— Mike “Mish” Shedlock (@MishGEA) October 1, 2019
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My “correct” is in reference to the first two sentences not the third about impeachment. There should not be a Fed.
Reserve Currency Curse
For further discussion, please see Nixon Shock, the Reserve Currency Curse, and a Pending Dollar Crisis
Meanwhile, negative interest rates are destroying the European banks as noted In Search of the Effective Lower Bound.
The Fed and Central Banks brought this on by refusing to let zombie banks and corporations go under and insisting on cramming more debt into a global financial system choking on debt.
The central banks want to stop “deflation”
Economic Challenge to Keynesians
Of all the widely believed but patently false economic beliefs is the absurd notion that falling consumer prices are bad for the economy and something must be done about them.
My Challenge to Keynesians “Prove Rising Prices Provide an Overall Economic Benefit” has gone unanswered.
BIS Deflation Study
The BIS did a historical study and found routine deflation was not any problem at all.
“Deflation may actually boost output. Lower prices increase real incomes and wealth. And they may also make export goods more competitive,” stated the BIS study.
It’s asset bubble deflation that is damaging. When asset bubbles burst, debt deflation results.
Deflationary Outcome
Central banks’ seriously misguided attempts to defeat routine consumer price deflation is what fuels the destructive asset bubbles that eventually collapse.
For a discussion of the BIS study, please see Historical Perspective on CPI Deflations: How Damaging are They?
Tyler Durden
Tue, 11/19/2019 – 20:05 - China Threatens Retaliation After US Senate Passes Hong Kong Bill; Stocks, Yuan Tumble
China Threatens Retaliation After US Senate Passes Hong Kong Bill; Stocks, Yuan Tumble
Update (2020ET): As expected, Chinese (and implicitly Hong Kong) officials are extremely unhappy at Washington’s interjection in their domestic policies by passing the bill supporting the protesters.
Foreign Ministry Spokesperson Yan Shuang has issued a very strong statement:
On November 19th, the US Senate passed the “Hong Kong Bill of Rights on Human Rights and Democracy.” The bill disregards the facts, confuses right and wrong, violates the axioms, plays with double standards, openly intervenes in Hong Kong affairs, interferes in China’s internal affairs, and seriously violates the basic norms of international law and international relations. The Chinese side strongly condemns and resolutely opposes this.
In the past five months, the persistent violent criminal acts in Hong Kong have seriously jeopardized the safety of the public’s life and property, seriously trampled on the rule of law and social order, seriously undermined Hong Kong’s prosperity and stability, and seriously challenged the bottom line of the “one country, two systems” principle. At present, what Hong Kong faces is not the so-called human rights and democracy issues, but the issue of ending the storms, maintaining the rule of law and restoring order as soon as possible. The Chinese central government will continue to firmly support the Hong Kong SAR Government in its administration of the law, firmly support the Hong Kong police in law enforcement, and firmly support the Hong Kong Judiciary in punishing violent criminals in accordance with the law, protecting the lives and property of Hong Kong residents and maintaining Hong Kong’s prosperity and stability.
Since the return of Hong Kong to the motherland, the practice of “one country, two systems” has achieved universally recognized success. Hong Kong residents enjoy unprecedented democratic rights and fully exercise various freedoms in accordance with the law. The relevant bills of the US Congress completely ignore the objective facts and completely ignore the well-being of Hong Kong residents. For the ulterior political purpose, the Hong Kong violent elements are smashed, bullying and attacking innocent citizens, forcibly occupying the campus and besieging young students. Organized attacks on the police and other criminal acts are striving for the pursuit of “human rights” and “democracy”. The purpose is to support the extremist forces and violent elements in the anti-China chaos and to undermine Hong Kong’s prosperity and stability so that they can borrow Hong Kong. The problem hinders the sinister plot of China’s development. This bad behavior of the United States not only harms China’s interests, but also undermines the important interests of the United States itself in Hong Kong. Any attempt by the US to intervene in China’s internal affairs and hinder China’s development will not succeed. In the end, it will only be a waste of effort.
I want to stress once again that Hong Kong is China’s Hong Kong and Hong Kong affairs are purely China’s internal affairs. We are telling the US to recognize the situation and take the plunge. We will immediately take measures to prevent the case from becoming a law. We will immediately stop interfering in Hong Kong affairs and interfering in China’s internal affairs so as not to ignite the fire and suffer from self-sufficiency.
If the US side is willing to go its own way, China will surely take effective measures to resolutely counteract and firmly safeguard national sovereignty, security, and development interests.
US futures immediately pushed lower on this statement…
And Yuan is extending losses…
Source: Bloomberg
* * *
In a widely anticipated move, just after 6pm ET on Tuesday, the Senate unanimously passed a bipartisan bill, S.1838, showing support for pro-democracy protesters in Hong Kong by requiring an annual review of whether the city is sufficiently autonomous from Beijing to justify its special trading status. In doing so, the Senate has delivered a warning to China against a violent suppression of the demonstrations, a stark contrast to President Donald Trump’s near-silence on the issue, the result of a behind the scenes agreement whereby China would allow the S&P to rise indefinitely as long as Trump kept his mouth shut.
As we reported last week, the vote marks the most aggressively diplomatic challenge to the government in Beijing just as the US and China seek to close the “Phase 1” of their agreement to end their trade war. The Senate measure would require annual reviews of Hong Kong’s special status under U.S. law to assess the extent to which China has chipped away the city’s autonomy; in light of recent events, Hong Kong would not pass. It’s unclear what would happen next.
As Bloomberg notes, the House unanimously passed a similar bill last month, but slight differences mean both chambers still have to pass the same version before sending it to the president.
”The United States has treated commerce and trade with Hong Kong differently than it has commercial and trade activity with the mainland of China,” said Republican Senator Marco Rubio of Florida, the bill’s lead sponsor. “But what’s happened over the last few years is the steady effort on the part of Chinese authorities to erode that autonomy and those freedoms”, he added on the Senate floor.
The Senate bill passed by unanimous consent, which means there was no roll call vote because no senators objected to it. Rubio said on Twitter before the vote Tuesday that the bill, S. 1838, will “head over to the U.S. House & then hopefully swiftly to the President.”
That is one option: The House could simply take up the Senate bill. The other option would be to reconcile the differences between the two versions and have both chambers vote on the compromise bill. New Jersey Representative Chris Smith, the lead Republican sponsor of the House bill, said he expects the House Foreign Affairs and Senate Foreign Relations Committees to go for the latter option to work out the slight differences. He said the resulting compromise could be included in a defense bill slated for a vote later this year.
* * *
The legislation comes at a difficult time for Trump as his administration is trying to complete the first phase of a long-awaited trade deal with China. Earlier on Tuesday, Vice President Mike Pence said that it would be difficult for the U.S. to sign a trade agreement with China if the demonstrations in Hong Kong are met with violence.
“The president’s made it clear it’ll be very hard for us to do a deal with China if there’s any violence or if that matter is not treated properly and humanely,” Pence said in an interview with Indianapolis-based radio host Tony Katz.
Another prominent Republican, Senate Majority Leader Mitch McConnell urged Trump to personally voice support for the protesters on Monday, which Trump has refused to do.
“We have to get it passed and we have to get it passed quickly,” Smith said. The legislation tells protesters that “Congress has their back, that we are fully supportive of democracy and rule of law in Hong Kong.”
“It tells Xi Jinping that there’s a price,” Smith said of China’s president. “There’s one provision after another that says, ‘we’re not kidding.’” The bill would also sanction Chinese officials deemed responsible for undermining Hong Kong’s autonomy.
The bit question now is how will China react: the Chinese Foreign Ministry has repeatedly warned that there would be “strong countermeasures” for passing such legislation. That could complicate the delicate negotiations between the world’s two largest economies to get the trade deal over the finish line.
“What was already complicated just got more complicated, and the bill’s passage adds to the growing list of political reasons why Xi and Trump are unlikely to find a compromise,” said Jude Blanchette, a China expert at the Center for Strategic and International Studies. “While Xi has more control over the domestic political environment in China, he’s not immune from the bad optics of negotiating with a government that he claims is tampering with his own political system.”
* * *
It remains unclear whether Trump will veto the bill, opening himself up to accusations he has been in bed with Beijing all along. So far Trump has not indicated whether he would sign the legislation if it gets to his desk.
Another complication: the timeline for completing the trade agreement could collide with this legislation landing on Trump’s desk. A congressional aide told Bloomberg the Senate measure was drafted with help from Treasury and State Department officials, but a senior administration official on Monday cautioned that Trump’s seal of approval is the only one that matters.
Because the Hong Kong bill passed both the House and the Senate without a single lawmaker objecting, there would probably be enough support to override a presidential veto.
“Today’s vote sends a clear message that the United States will continue to stand with the people of Hong Kong as they battle Beijing’s imperialism,” said Republican Senator Josh Hawley of Missouri. “The Chinese Communist Party’s quest for power across the region is a direct threat to America’s security and prosperity.”
S&P futures dipped modestly on the news of the bill’s unanimous passage…
… although that isn’t saying much for a market that is so hypnotized by the Fed’s “NOT QE” that it barely if ever responds to any actual news.
Tyler Durden
Tue, 11/19/2019 – 19:46 - Why The "Atrophied" U.S. Economy Isn't As Free Or Competitive As You Think
Why The “Atrophied” U.S. Economy Isn’t As Free Or Competitive As You Think
Author Thomas Philippon, a French professor at New York University, recently set out on a journey to try and figure out just how the intricacies of business works in America.
Upon the conclusion of his research, he determined that the U.S. economy simply isn’t as free – or as competitive – as many think, according to FT. What he found was that over the last 20 years, competition and competition policy have “atrophied” with ugly consequences.
“America is no longer the home of the free-market economy,” he concludes. The country isn’t as competitive as Europe, its regulators are not more proactive and its new companies aren’t much different from their predecessors.
Thomas Philippon His book, The Great Reversal, argues for the importance of competition and summarizes the results of his findings:
“First, US markets have become less competitive: concentration is high in many industries, leaders are entrenched, and their profit rates are excessive. Second, this lack of competition has hurt US consumers and workers: it has led to higher prices, lower investment and lower productivity growth. Third, and contrary to common wisdom, the main explanation is political, not technological: I have traced the decrease in competition to increasing barriers to entry and weak antitrust enforcement, sustained by heavy lobbying and campaign contributions.”
His argument is backed up by evidence. Broadband access in the U.S. costs about double what it costs in comparable countries. Profits per passenger on airlines are also far higher in the U.S. than they are overseas.
His analysis shows that “market shares have become more concentrated and more persistent, and profits have increased.”
And, more concentration then translates to higher profits. This has lead to post-tax profit share in the U.S. gross domestic product nearly doubling since the 1990s.
The increase in market concentration in places like manufacturing can be attributed to competition from China, which drove weaker competitors out of the market. Companies like Walmart, in the 1990s, drove the rate of investment and productivity growth higher in the 1990s while the opposite happened in the 2000’s: rising market concentration drove the profits of entrenched companies up and both the investment rate and productivity lower.
This ugly form of increased concentration means that entry of new businesses has diminished and that the U.S. economy has seen a significant reduction in competition and a corresponding rise in monopoly and oligopoly.
The book often turns to comparisons with the EU. For instance, real GDP per head rose 21% in the U.S. between 1999 and 2017. In the EU, this number stood at 25%. Even in the Eurozone, this number was 19% despite the damage done by its “ineptly handled financial crisis”.
Even inequality levels and trends and income distribution are less adverse in the EU. The comparisons seem justified, according to FT:
In short, comparisons between the EU and the US are justifiable. These show that neither profit margins nor market concentration have exploded upwards in the EU as they have done in the US. The share of wages and salaries in the aggregate incomes — so-called “value-added” — of business has fallen by close to 6 percentage points in the US since 2000, but not at all in the eurozone. This destroys the hypothesis that technology is the main driver of the downward shift in the share of labour incomes. After all, technology (and international trade, as well) affected both sides of the Atlantic roughly equally.
Competition in product markets has become far more effective in the EU over the course of the last 20 or 30 years. It is reflective of purposeful deregulation and a more aggressive and independent competition policy than in the U.S.
But the EU has established more independent regulators than the U.S. would: what is being called a “healthy result” of a mutual distrust within the EU.
Individual states fear the idea of being vulnerable to the practices of fellow members when it comes to regulation, which is beneficial to countries with weak national regulators. The independence of EU regulators also means that lobbying is far less of a problem overseas.
Evidence shows that “the higher an EU member country’s product market regulation in 1998, the bigger the subsequent decline in such regulation”. And the effect is more robust for those in the EU than non-EU members.
Lobbying has much more of an effect in the U.S. Evidence supports that lobbying works, which is exactly why large corporations in the U.S. continue to rely on it. This all boils down to a larger problem of the role of money in U.S. politics. FT writes that “members of Congress spend about 30 hours a week raising money.”
The Supreme Court even ruled in 2010 that “companies are persons” and “money is speech”. Former representative Mick Mulvaney summed it up in 2018: “If you’re a lobbyist who never gave us money, I didn’t talk to you. If you’re a lobbyist who gave us money, I might talk to you.”
Corporate lobbying is two to three times bigger in the U.S. than in the EU. Campaign contributions are about 50 times larger.
The book also looks at finance, healthcare and technology. In finance, the book finds that the cost of taking in savings and transferring it to end users has stayed at about 2% for a century, regardless of technological developments. The book calls call the industry a “rent-extraction machine”.
In healthcare, the book looks at why the U.S. spends far more on healthcare, but has far worse health outcomes than any other high-income country. The book says it is due to “rent-extracting monopolies” in the industry – all the way from doctors, to hospitals, to insurance companies to pharmaceutical businesses.
In the world of tech, the book touches on the size of major players like Google, Amazon and Apple. The book says that while the weight of these mega-huge companies is no bigger than that of giants in the past, their links to the economy as a whole are far smaller than they ever were.
Tyler Durden
Tue, 11/19/2019 – 19:45 - The Socialism Of The Federal Reserve
The Socialism Of The Federal Reserve
Authored by Jacob Hornberger via The Future of Freedom Foundation,
The Federal Reserve is the federal entity charged with determining the quantity of money in the American economy. To boost the economy, it expands the money supply. If the economy gets too “overheated,” it slows the rate of increase.
In other words, the Fed is the government’s monetary central planner. It plans the monetary affairs of hundreds of millions of people through monetary manipulation.
Central planning is a core principle of socialism. Central planning rejects the concept of economic liberty and free markets, which rely on the absence of government interference. Instead, it relies on a board of government officials who make economic decisions for hundreds of thousands or millions of people in a top-down, command-and-control manner.
As anyone from Venezuela, Cuba, and North Korea can attest, socialist central planning always produces crises. That’s because the central planners can never attain the required knowledge to plan a complex market, especially one involving hundreds of millions of participants engaged in countless economic transactions. This is especially true given that people’s subjective valuations are constantly changing. There is no way that the planners can keep up with those changes in valuations.
That’s what produces the crises. Friedrich Hayek, the Nobel Prize winning libertarian economist, called it the “fatal conceit” of the planner, the mindset that convinces the planner that he has the requisite knowledge to plan a complex, ever-changing market.
For more than 100 years, the official money of the United States was gold coins and silver coins, as established by the Constitution. During most of that entire time, there was no Federal Reserve or central bank.
That gold-coin, silver-coin standard provided the soundest money in history. Along with a system based on no income taxation, no immigration controls, no welfare state, no warfare state, and very few economic regulations, America’s monetary system was a major factor in the tremendous increase in rise of the standard of living of the American people in the 19th and early 20th centuries.
In the early 1900s, Americans began giving serious consideration to socialist ideas. The enactment of the Federal Reserve in 1913 was part of that trend. So was the adoption of the federal income tax that same year.
in the 1920s, the Fed began experimenting with expanding the supply of U.S. debt instruments, which promised to pay gold coins and silver coins. When holders of such debt instruments began redeeming their debt instruments by demanding gold and silver, the Fed panicked because they didn’t have the money to honor all the debt instruments they had issued. They began contracting the money supply and ended up over-contracting. Their monetary central planning led to the 1929 stock market crash and then the Great Depression.
Americans were told that the crisis was caused by the failure of America’s free-enterprise system. It was a lie. The crisis was caused by the Federal Reserve, which was a socialist institution. But it was a lie that Americans believed because in their minds, the Federal Reserve had become a part of America’s free-enterprise system.
The Franklin Roosevelt administration used the crisis to destroy the monetary system on which America had been established — the gold-coin, silver-coin standard. Roosevelt replaced that system with a pure paper-money system, one in which federal debt instruments would no longer be redeemable. The money became promises to pay nothing.
Over time, the Fed began expanding the paper money to fund the ever-increasing expenditures for welfare and warfare. All that “bad money” would ultimately drive out of circulation the “good money” that the Constitution had established.
As the system became wash with paper money, the booms and busts that monetary manipulation caused would become a standard part of American life. The economic bubbles and deep recessions were said to be a part of America’s “free-enterprise system.”
Over the decades the Fed became a principal way for federal officials to plunder and loot people through monetary debasement and devaluation. Public officials would spend and borrow to finance their ever-burgeoning welfare-warfare programs, knowing that the Fed would cover their debts by essentially printing the money to pay for them. The losers would be the American people, whose money would be constantly devalued over the decades.
The best part of the Fed system, from the standpoint of public officials, was that many people would not realize that the Fed was behind the monetary debasement that was looting them. When prices would rise across society, people would blame it on rapacious businessmen, not realizing that the price rises were actually just the manifestation of Federal Reserve destruction of the value of money.
A necessary prerequisite to establishing a free and prosperous society is a free-market monetary system, one in which there is a total separation of money and the state. That necessarily means bringing the Fed and its system of socialist central planning to an end.
Tyler Durden
Tue, 11/19/2019 – 19:25 - China's Annual Aluminum Consumption To Decline For First Time In 30 Years
China’s Annual Aluminum Consumption To Decline For First Time In 30 Years
China’s economy is quickly decelerating, and data last month shows GDP could slip under 6% in 2020.
A structural decline, blended with a global synchronized slowdown, and accelerated by trade tensions with the US, have been blamed for China’s deteriorating industrial sector.
New evidence from research firm Antaike, via Reuters, shows China’s aluminum consumption is likely to decline for the first time in 30 years as domestic demand plunges and exports slump.
Antaike’s senior analyst Shen Lingyan stated at a conference in China’s Qingdao city on Wednesday that consumption of aluminum in China would be around 36.55 million tons this year, down 1.2% YoY.
“The first reason is domestic consumption, which will decline by 0.9%. Exports will fall 3%,” Shen said at the China Aluminium Week conference.
October export data of China’s unwrought aluminum fell to 431,000 tons, the lowest levels since February.
The output of aluminum in China this year has recorded the sharpest decline on record, down 1.6% to 36 million tons, Shen told the conference.
Shen forecasts a 3% increase in aluminum output in 2020 to 37.2 million tons — though there are currently no signs the global economy is bottoming.
Factory activity in China contracted for a sixth straight month in October. It’s likely that in the coming quarters, GDP will dive under 6% as cooling in the manufacturing sector continues.
China Association of Automobile Manufacturer has said the decline of aluminum demand could be linked to the weak automobile sector.
When the world’s top aluminum producer records the first consumption decline in nearly three decades — this should mean the global economy continues to worsen.
As for the global rebound in the economy, one where equity markets around the world have already priced in, it seems that China is no longer able to reflate its all too critical credit impulse, which means the 2016-style rebound everyone was expecting might not exactly happen in early 2020.
Tyler Durden
Tue, 11/19/2019 – 19:05 - Venezuela To Pay Retirees And Pensioners Christmas Bonus In Petro
Venezuela To Pay Retirees And Pensioners Christmas Bonus In Petro
Authored by Adrian Zmudzinski via CoinTelegraph.com,
Venezuelan President Nicholas Maduro announced that the Christmas bonus of the country’s retirees and pensioners will be paid to them in the national cryptocurrency Petro.
image courtesy of CoinTelegraph
The Twitter profile of local news outlet Venepress reported on Maduro’s remarks on Nov. 17. This particular instance is not the first time that Venezuela pushes Petro into the wallets of pensioners so far.
As Cointelegraph reported in December last year, Venezuela back then has automatically converted pensioners’ bonuses for the year into Petro.
Petro, the future for Venezuelan economy?
The crypto asset in question has been first launched for a pre-sale in February last year and raised concerns among foreign observers from the start. In late August last year, Petro was already scathingly denounced as an opaque “stunt” backed by a centralized and debt-saddled entity.
Still, the national cryptocurrency and cryptocurrencies as a whole are being increasingly pushed by the local government.
As Cointelegraph Spain reported on Nov. 13, the Deputy of the National Constituent Assembly of Venezuela, Francisco Torrealba, said that he believes all currencies will be replaced by cryptocurrencies.
Speaking about Venezuela, Torrealba claimed that the country is facing a great change and Maduro is making a “great contribution” to the country by creating the Petro. He concluded his interview by saying that “everything will be from this currency [the Petro].”
Tyler Durden
Tue, 11/19/2019 – 18:45
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