- Mercedes Caught Spying On Drivers With Tracking Devices, Sending Info To Bailiffs
Mercedes has admitted to spying on drivers with covert tracking devices.
The company says are only activated in “extreme circumstances,” such as when finance customers have defaulted on payments – however the car company has also admitted to sharing data with third-party bailiffs and recovery firms for the purposes of repossession, according to The Sun. It is unclear whether Mercedes only drops the dime on their European customers or if it’s a worldwide phenomenon.
Former UK Cabinet minister David Davis has called for an investigation, saying “This is not the first time big business has behaved like Big Brother — but it’s rare to be quite as deceitful as this.”
Ex-Cabinet minister David Davis called out Mercedes for ‘behaving like Big Brother’Credit: Reuters “I have to question whether it is even legal to pass on information to other people such as bailiffs,” he said, adding “I would think the relevant minister ought to look very closely at the legality of this procedure.”
The revelation has caught the attention of human rights organization Liberty, which says Mercedes’ actions were a disturping part of the “creeping growth of surveillance.”
Legal experts also raised concerns. Stefano Ruis, civil law partner at Hickman & Rose solicitors, said: “This appears to be another worrying development in the way companies handle what should be private, personal data.
“Modern technology means our ability to keep personal information private is under threat like never before.
“Organisations that handle personal data need to be completely upfront about what they are doing. That Mercedes appear not to have been so in this case is concerning. Its customers may start to worry about what other personal information the company may be gathering, then passing on.” –The Sun
BMW, Jaguar and Land Rover have all stated that they do not similarly track their customers’ vehicles.
Mercedes, which dominates the UK car leasing market (80% are on finance plans), have buried concent to the secret trackers in their lengthy terms and conditions, avoiding tracking drivers illegally under EU data protection laws. According to the report, the secret sensor technology is not related to their anti-theft Tracker devices or the online Mercedes Me service sold as an add-on by dealers.
“If Mercedes wishes to install this privacy-surrendering tech in their cars, that’s fine. But surely they have a duty to explicitly tell their customers beforehand — and not hide it away in their terms and conditions,” said MP Andrew Bridgen.
“It’s a shocking revelation and definitely gives a creepy uneasy feeling knowing somebody, somewhere can track me down at the touch of a button,” adds Karl Edwards, 30, from Portsmouth – who was shocked after learning about a tracking device on his C200 AMG.
Mercedes has responded, saying “When a customer chooses to finance the purchase of their car this way they sign a contract and agree to the location sensors in the car being activated in the event that they default or breach their agreement. This clause in the finance contract is in bold print, just above the customer’s signature.”
“Locating the car is part of the repossession process and is not permanently tracking customers,” the company added. “It is only activated in exceptional circumstances where the customer has breached their finance agreement and repeatedly failed to reply to requests to contact us.”
No word on whether they can be remotely hacked and driven into palm trees.
- The Extinction Of Christians In The Middle East
Authored by Giulio Meotti via The Gatestone Institute,
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“I don’t believe in these two words [human rights], there are no human rights. But in Western countries, there are animal rights. In Australia they take care of frogs…. Look upon us as frogs, we’ll accept that — just protect us so we can stay in our land.” — Metropolitan Nicodemus, the Syriac Orthodox archbishop of Mosul, National Catholic Register.
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“Those people are the same ones who came here many years ago. And we accepted them. We are the original people in this land. We accepted them, we opened the doors for them, and they push us to be minorities in our land, then refugees in our land. And this will be with you if you don’t wake up.” — Metropolitan Nicodemus.
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“Threats to pandas cause more emotion” than threats to the extinction of the Christians in the Middle East. — Amin Maalouf, French-Lebanese author, Le Temps.
Most Christian churches in and around Mosul, Iraq were desecrated or destroyed by ISIS. Pictured: The heavily damaged bell tower of Saint John’s Church (Mar Yohanna) in the town of Qaraqosh, near Mosul, on April 16, 2017. (Photo by Carl Court/Getty Images)
Convert, pay or die. Five years ago, that was the “choice” the Islamic State (ISIS) gave to Christians in Mosul, then Iraq’s third-largest city: either embrace Islam, submit to a religious tax or face the sword. ISIS then marked Christian houses with the Arabic letter ن (N), the first letter of the Arabic word “Nasrani” (“Nazarene,” or “Christian”) . Christians could often take no more than the clothes on their back and flee a city that had been home to Christians for 1,700 years.
Two years ago, ISIS was defeated in Mosul and its Caliphate crushed. The extremists, however, had succeeded in “cleansing” the Christians. Before the rise of ISIS, there were more than 15,000 Christians there. In July 2019, the Catholic charity, Aid to the Church in Need, disclosed that only about 40 Christians have come back. Not long ago, Mosul had “Christmas celebrations without Christians“.
This cultural genocide, thanks to the indifference of Europeans and many Western Christians more worried about not appearing “Islamophobic” than defending their own brothers, sadly worked. Father Ragheed Ganni, for instance, a Catholic priest from Mosul, had just finished celebrating mass in his church when Islamists killed him. In one of his last letters, Ganni wrote: “We are on the verge of collapse”. That was in 2007 — almost ten years before ISIS eradicated the Christians of Mosul. “Has the world ‘looked the other way’ while Christians are killed?” the Washington Post asked. Definitely.
Traces of a lost Jewish past have also resurfaced in Mosul, where a Jewish community had also lived for thousands of years. Now, 2,000 years later, both Judaism and Christianity have effectively been annihilated there. That life is over. The newspaper La Vie collected the testimony of a Christian, Yousef (the name has been changed), who fled in the night of August 6, 2014, just before ISIS arrived. “It was a real exodus”, Yousef said.
“The road was black with people, I did not see either the beginning or the end of this procession. There were children were crying, families dragging small suitcases. Old men were on the shoulders of their sons. People were thirsty, it was very hot. We have lost all that we have built for life and nobody fought for us”.
Some communities, such as the tiny Christian pockets in Mosul, are almost certainly lost forever”, wrote two American scholars in Foreign Policy.
“We are on the precipice of catastrophe, and unless we act soon, within weeks, the tiny remnants of Christian communities in Iraq may be mostly eradicated by the genocide being committed against Christians in Iraq and Syria”.
In Mosul alone, 45 churches were vandalized or destroyed. Not a single one was spared. Today there is only one church open in the city. ISIS apparently also wanted to destroy Christian history there. They targeted the monastery of Saints Behnam and Sarah, founded in the fourth century. The monastery had survived the seventh century Islamic conquest and subsequent invasions, but in 2017, crosses were destroyed, cells were looted, and statues of the Virgin Mary were beheaded. The Iraqi priest, Najeeb Michaeel, who saved 850 manuscripts from the Islamic State, was ordained last January as the new Chaldean Catholic archbishop of Mosul.
ISIS, together with Al Nusra, an offshoot of al-Qaeda in Syria, followed the same pattern, when its militants attacked the Christian town of Maaloula. “They scarred the faces of the saints, of the Christ, they shattered the statues”, Father Toufic Eid recently told the Vatican agency, Sir.
“The altars, the iconostases and the baptismal font were torn to pieces. But the thing that struck me most was the burning of baptism registers. It is as if they wanted to erase our faith”.
In the cemetery of the church of St. George in Karamlesh, a village east of Mosul, Isis dug up a body and beheaded it, apparently only because it was a Christian.
The fate of Mosul’s Christians is the similar to those elsewhere in Iraq. “The International Union for the Conservation of Nature has several categories to define the danger of extinction that various species face today”, writes Benedict Kiely, the founder of Nasarean.org, which helps the persecuted Christians of the Middle East.
“Using a percentage of population decline, the categories range from ‘vulnerable species’ (a 30-50 per cent decline), to ‘critically endangered’ (80-90 per cent) and finally to extinction. The Christian population of Iraq has shrunk by 83 per cent, putting it in the category of ‘critically endangered'”.
Shamefully, the West has been and still seems to be completely indifferent to the fate of Middle Eastern Christians. As the Syriac Orthodox archbishop of Mosul, Metropolitan Nicodemus, put it:
“I don’t believe in these two words [human rights], there are no human rights. But in Western countries, there are animal rights. In Australia they take care of frogs…. Look upon us as frogs, we’ll accept that — just protect us so we can stay in our land.
“Those people are the same ones who came here many years ago. And we accepted them. We are the original people in this land. We accepted them, we opened the doors for them, and they push us to be minorities in our land, then refugees in our land. And this will be with you if you don’t wake up.”
“Christianity in Iraq, one of the oldest Churches, if not the oldest Church in the world, is perilously close to extinction”, Bashar Warda, Archbishop of Irbil, the capital of Iraqi Kurdistan, remarked in London in May.
“Those of us who remain must be ready to face martyrdom”.
Warda went on to accuse Britain’s leaders of “political correctness” over the issue for fear of being accused of “Islamophobia.” “Will you continue to condone this never-ending, organised persecution against us?” Warda asked. “When the next wave of violence begins to hit us, will anyone on your campuses hold demonstrations and carry signs that say ‘We are all Christians?'”
These Christians seem to have gained space on our television screens and newspapers only at the cost of their blood, their disappearance, their suffering. Their tragedy illuminates our moral suicide. As the French-Lebanese writer Amin Maalouf noted: “That is the great paradox: one accuses the Occident of wanting to impose its values, but the real tragedy is its inability to transmit them…. Sometimes we get the impression that Westerners have once and for all appropriated Christianity… and that they say to themselves: We are the Christians, and the rest is only an archaeological remainder destined to disappear. Threats to pandas cause more emotion” than threats to the extinction of the Christians in the Middle East.
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- Hong Kong In Crosshairs Of Global Power Struggle
Authored by By Kevin Zeese and Margaret Flowers via ConsortiumNews.com,
Hong Kong is one of the most extreme examples of big finance, neoliberal capitalism in the world. As a result, many people in Hong Kong are suffering from great economic insecurity in a city with 93 billionaires, second-most of any city.
Hong Kong protesters waving U.S. flags last week. (YouTube)
Hong Kong is suffering the effects of being colonized by Britain for more than 150 years following the Opium Wars. The British put in place a capitalist economic system and Hong Kong has had no history of self-rule. When Britain left, it negotiated an agreement that prevents China from changing Hong Kong’s political and economic systems for 50 years by making Hong Kong a Special Administrative Region (SAR).
China cannot solve the suffering of the people of Hong Kong. This “One Country, Two Systems” approach means the extreme capitalism of Hong Kong exists alongside, but separate from, China’s socialized system. Hong Kong has an unusual political system. For example, half the seats in the legislature are required to represent business interests meaning corporate interests vote on legislation.
Hong Kong is a center for big finance and also a center of financial crimes. Between 2013 and 2017, the number of suspicious transactions reported to law enforcement agencies rocketed from 32,907 to 92,115. There has been a small number of prosecutions, which dropped from a high of 167 in 2014 to 103 in 2017. Convictions dropped to only one person sentenced to more than six years behind bars in 2017.
The problem is neither the extradition bill that was used to ignite protests nor China, the problems are Hong Kong’s economy and governance.
The Extradition Bill
The stated cause of the recent protests is an extradition bill proposed because there is no legal way to prevent criminals from escaping charges when they flee to Hong Kong. The bill was proposed by the Hong Kong government in February 2019 to establish a mechanism to transfer fugitives in Hong Kong to Taiwan, Macau or Mainland China.
Extradition laws are a legal norm between countries and within countries (e.g. between states), and since Hong Kong is part of China, it is pretty basic. In fact, in 1998, a pro-democracy legislator, Martin Lee, proposed a law similar to the one he now opposes to ensure a person is prosecuted and tried at the place of the offense.
The push for the bill came in 2018 when a Hong Kong resident Chan Tong-kai allegedly killed his pregnant girlfriend, Poon Hiu-wing, in Taiwan, then returned to Hong Kong. Chan admitted he killed Poon to Hong Kong police, but the police were unable to charge him for murder or extradite him to Taiwan because no agreement was in place.
The proposed law covered 46 types of crimes that are recognized as serious offenses across the globe. These include murder, rape, and sexual offenses, assaults, kidnapping, immigration violations, and drug offenses as well as property offenses like robbery, burglary and arson and other traditional criminal offenses. It also included business and financial crimes.
U.S. Secretary of Commerce Wilbur Ross addressing AmCham event in Hong Kong, 2017. (Twitter)
Months before the street protests, the business community expressed opposition to the law. Hong Kong’s two pro-business parties urged the government to exempt white-collar crimes from the list of offenses covered by any future extradition agreement. There was escalating pressure from the city’s business heavyweights. The American Chamber of Commerce, AmCham, a 50-year-old organization that represents over 1,200 U.S. companies doing business in Hong Kong, opposed the proposal.
AmCham said it would damage the city’s reputation: “Any change in extradition arrangements that substantially expands the possibility of arrest and rendition … of international business executives residing in or transiting through Hong Kong as a result of allegations of economic crime made by the mainland government … would undermine perceptions of Hong Kong as a safe and secure haven for international business operations.”
Kurt Tong, the top U.S. diplomat in Hong Kong, said in March that the proposal could complicate relations between Washington and Hong Kong. Indeed, the Center for International Private Enterprise, an arm of the National Endowment for Democracy, said the proposed law would undermine economic freedom, cause capital flight and threaten Hong Kong’s status as a hub for global commerce. They pointed to a bipartisan letter signed by eight members of Congress, including Senators Marco Rubio, Tom Cotton, and Steve Daines and Members of the House of Representatives, Jim McGovern, Ben McAdams, Chris Smith, Tom Suozzi, and Brian Mast opposing the bill.
Proponents of the bill responded by exempting nine of the economic crimes and made extradition only for crimes punishable by at least seven years in prison. These changes did not satisfy big business advocates.
The Mass Protests and U.S. Role
Hong Kong World Financial Centre Tower, 2008. (Ray Devlin/Flickr)
From this attention to the law, opposition grew with the formation of a coalition to organize protests. As Alexander Rubinstein reports, “the coalition cited by Hong Kong media, including the South China Morning Post and the Hong Kong Free Press, as organizers of the anti-extradition law demonstrations is called the Civil Human Rights Front. That organization’s website lists the NED-funded HKHRM [Human Rights Monitor], Hong Kong Confederation of Trade Unions, the Hong Kong Journalists Association, the Civic Party, the Labour Party, and the Democratic Party as members of the coalition.” HKHRM alone received more than $1.9 million in funds from the NED between 1995 and 2013. Major protests began in June.
Building the anti-China movement in Hong Kong has been a long-term, NED project since 1996. In 2012, NED invested $460,000 through its National Democratic Institute, to build the anti-China movement (aka pro-democracy movement), particularly among university students. Two years later, the mass protests of Occupy Central occurred. In a 2016 Open Letter to Kurt Tong, these NED grants and others were pointed out and Tong was asked if the U.S. was funding a Hong Kong independence movement.
During the current protests, organizers were photographed meeting with Julie Eadeh, the political unit chief of U.S. Consulate General, in a Hong Kong hotel. They also met with China Hawks in Washington, D.C., including Vice President Mike Pence, Secretary of State Mike Pompeo, National Security Advisor John Bolton, Sen. Marco Rubio and Rep. Eliot Engel, chairman of the House Foreign Affairs Committee. Larry Diamond, a co-editor of the NED’s publication and a co-chair of research, has been openly encouraging the protesters. He delivered a video message of support during their rally this weekend.
Protests have included many elements of U.S. color revolutions with tactics such as violence — attacks on bystanders, media, police and emergency personnel. Similar tactics were used in Ukraine, Nicaragua, and Venezuela, e.g. violent street barricades. U.S. officials and media criticized the government’s response to the violent protests, even though they have been silent on the extreme police violence against the Yellow Vests in France. Demonstrators also use swarming techniques and sophisticated social media messaging targeting people in the U.S..
Mass protests have continued. On July 9, Chief Executive Carrie Lam pronounced the bill dead and suspended it. Protesters are now calling for the bill to be withdrawn, Lam to resign and police to be investigated. For more on the protests and U.S. involvement, listen to our interview with K. J. Noh on Clearing the FOG.
What Is Driving Discontent in Hong Kong?
Makeshift shelters at Tung Chau Street Temporary Market in Sham Shui Po. (Nora Tam)
The source of unrest in Hong Kong is the economic insecurity stemming from capitalism. In 1997, Britain and China agreed to leave “the previous capitalist system” in place for 50 years.
Hong Kong has been ranked as the world’s freest economy in the Heritage’s Index of Economic Freedom since 1995 when the index began. In 1990, Milton Friedman described Hong Kong as the best example of a free-market economy. Its ranking is based on low taxes, light regulations, strong property rights, business freedom, and openness to global commerce.
Graeme Maxton writes in the South China Morning Post:
“The only way to restore order is through a radical change in Hong Kong’s economic policies. After decades of doing almost nothing, and letting the free market rule, it is time for the Hong Kong government to do what it is there for; to govern in the interests of the majority.”
The issue is not the extradition proposal, Carrie Lam or China. What we are witnessing is an unrestricted neo-liberal economy, described as a free market on steroids. Hong Kong’s economy relative to China’s gross domestic product (GDP) has fallen from a peak of 27 percent in 1993 to less than 3 percent in 2017. During this time, China has had tremendous growth, including in nearby market-friendly Shenzen, while Hong Kong has not.
As Sara Flounders writes, “For the last 10 years wages have been stagnant in Hong Kong while rents have increased 300 percent; it is the most expensive city in the world. In Shenzhen, wages have increased 8 percent every year, and more than 1 million new, public, green housing units at low rates are nearing completion.”
Hong Kong has the world’s highest rents, a widening wealth gap and a poverty rate of 20 percent. In China, the poverty rate fell from 88 percent in 1981 to 0.7 percent in 2015, according to the World Bank.
Hong Kong in Chinese Context
Skyline of Beijing, China’s capital city, at dusk, 2017. (Picrazy2, CC BY-SA 4.0, Wikimedia Commons)
Ellen Brown writes in “Neoliberalism Has Met Its Match in China,” that the Chinese government owns 80 percent of banks, which make favorable loans to businesses, and subsidizes worker costs. The U.S. views China subsidizing its economy as an unfair trade advantage, while China sees long-term, planned growth as smarter than short-term profits for shareholders.
The Chinese model of state-controlled capitalism (some call it a form of socialism) has lifted 800 million people out of poverty and built a middle class of over 420 million people, growing from four percent in 2002, to 31 percent. The top 12 Chinese companies on the Fortune 500 are all state-owned and state-subsidized including oil, solar energy, telecommunications, engineering, construction companies, banks, and the auto industry. China has the second-largest GDP, and the largest economy based on Purchasing Power Parity GDP, according to the CIA, IMF and World Bank.
China does have significant problems. There are thousands of documented demonstrations, strikes and labor actions in China annually, serious environmental challenges, inequality and social control through the use of surveillance technology. How China responds to these challenges is a test for their governance.
China describes itself as having an intraparty democracy. The eight other legal “democratic parties” that are allowed to participate in the political system cooperate with but do not compete with the Communist Party. There are also local elections for candidates focused on grassroots issues. China views Western democracy and economics as flawed and does not try to emulate them but is creating its own system.
China is led by engineers and scientists, not by lawyers and business people. It approaches policy decisions through research and experimentation. Every city and every district is involved in some sort of experimentation including free trade zones, poverty reduction and education reform. “There are pilot schools, pilot cities, pilot hospitals, pilot markets, pilot everything under the sun, the whole China is basically a giant portfolio of experiments, with mayors and provincial governors as Primary Investigators.” In this system, Hong Kong could be viewed as an experiment in neoliberal capitalism.
The Communist Party knows that to keep its hold on power, it must combat inequalities and shift the economy towards a more efficient and more ecological model. Beijing has set a date of 2050 to become a “socialist society” and to achieve that, it seeks improvements in social, labor and environmental fields.
Where does Hong Kong fit into these long-term plans? With 2047 as the year for the end of the agreement with the U.K., U.S. and Western powers are working toward preserving their capitalist dystopia of Hong Kong and manufacturing consensus for long-term conflict with China.
How this conflict of economic and political systems turns out depends on whether China can confront its contradictions, whether Hong Kongers can address the source of their problems and whether US empire can continue its dollar, political and military dominance. Today’s conflicts in Hong Kong are rooted in all of these realities.
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Kevin Zeese and Margaret Flowers co-direct Popular Resistance. A version of this article first appeared in PopularResistance.org.
- China Wants To Build A Grains "Superhighway" In Argentina
China has stepped away from US agriculture imports and said it would bid on a project that could create a grains superhighway in Argentina, reported Reuters.
Chinese state-owned construction company (CCCC) is readying a bid that would allow it to dredge Argentina’s Parana River, the country’s only river that acts as a waterway for bulk vessels that transport soybean and corn from the Pampas farm belt to the South Atlantic.
China has increased agriculture purchases from Argentina since trade tensions between Washington and Beijing erupted last year.
Representatives of CCCC and its Shanghai Dredging unit have already held meetings with Argentine government and local port officials to design a plan that would allow larger bulk carriers to navigate the Parana River to and from the Argentine farm belt, to the South Atlantic, then to China, according to Reuters’ sources.
CCCC is the top Chinese firm to lead international efforts in modernizing global transport hubs and shipping lanes to secure sustainable food supplies for China.
Margaret Myers, head of the Asia-Latin America program at the Inter-American Dialogue, a Washington-based think tank, told Reuters that Shanghai Dredging’s interest in Parana is part of a much larger effort by Beijing to “invest across international agricultural supply chains to better control supply and pricing.”
Argentina’s Port and Maritime Activities Chamber held numerous meetings with other dredging firms and port operators who will also submit bids next year.
Reuters notes that Parana carries 80% of Argentine farm exports.
Marcos De Vincenzi, dredging manager for Servimagnus, CCCC’s local partner, confirmed the Chinese firm’s interest in the project, stating, “We think that the dredging of the waterway must be upgraded to meet its new traffic and trade needs.”
Argentina will likely expand Parana’s navigable waterway to accommodate large bulk carriers. This could allow the South American country to become a top player in the global grains market in the next 4 to 8 years.
Dredging Parna will give Argentina a significant advantage over its competitors. This means farmers in Argentina’s farm belt can directly load their products onto bulk carriers. This is much different from Brazil and the US, who have to first transport products via truck or rail, over an extended distance, to the nearest port.
The Parna dredging permit is set to renewal in April 2021, involves keeping the shipping channel at adequate depths to allow bulk carriers to transit upriver to the farm belt. Large vessels traveling to and from the grains port of Rosario will continue to pay $80,000 in tolls after 2021.
Luxembourg-based dredger Jan De Nul currently holds the dredging permit for the river. It will be bidding with CCCC and other dredgers for the 2021 permit, industry sources told Reuters.
Servimagnus has offered to dredge Parana deeper than its current 34 feet, without raising tolls, said a port source who attended a meeting between the dredger and government officials.
“China is already our principal buyer of soybeans. For them to also have control over navigation would give them a very strong stance in negotiating prices,” said the source.
China’s move to establish a grains superhighway in Argentina shows how President Trump’s trade war could leave American farmers with long-lasting, damaging effects that will never restore their pre-trade war market share in China.
If CCCC and Servimagnus win the bid next year, China could turn Argentina into an agriculture superpower by the mid/late 2020s.
- The Way 'Not' To Fix Education, Housing, & Health Care
Authored by Donald Boudreaux via The American Institute for Economic Research,
As long as the reality of human existence remains on the imperfect side of paradise – mired in scarcity, often unpredictable, and always carrying at least a small risk of calamity for each individual as well as for groups – some people will complain about the state of reality. Indeed, as human welfare improves, such complaints grow more frequent and fervent. If nearly everyone’s life is miserable, and if such misery is all that we know and remember, we accept misery as an unalterable condition of existence, much as we accept as unalterable our inability to fly by flapping our arms.
But as the masses have become materially more prosperous, the possibility of even greater prosperity has become more evident. And so any shortfall of the masses’ current prosperity from what can be imagined or plausibly foreseen strikes many as an intolerable condition that should be remedied forthwith.
The proposed remedy, of course, is always government intervention — a remedy, alas, that is destined to fail.
This essay isn’t the place to summarize the many reasons why such intervention is destined to fail. To review such reasons consult any number of good economics books — for example, Don Lavoie’s 1985 What Is Left? or Deirdre McCloskey’s 1990 If You’re So Rich.
Instead, after explaining in previous columns — here and here — that Americans’ work-time costs for most goods and services has fallen and continues to fall, in this column I look at three major classes of products in modern America whose costs — in terms of the amount of time ordinary Americans must work to acquire them — likely have risen. These three classes of products are education (especially postsecondary), health care, and housing.
Education
University of Chicago economist Kevin Murphy has conclusively documented that the returns — in the form of additions to lifetime real income — to college education increased impressively during the last quarter of the 20th century. While this growth in returns to higher education has slowed, or perhaps even stopped, since around 2000, high school graduates who today attend college can still expect, as a result, much larger additions to their lifetime incomes than could such high school graduates of the mid-1970s.
And so insofar as a college education is valued because of its contribution to one’s ability to earn income, a college degree today is an asset with a much higher expected return than was a college degree earned 40 years ago. As with all assets whose returns increase, the price of this asset rises to reflect those higher returns.
In short, while the cost of a college education is indeed higher today than was the cost of a college education during the disco decade, what the typical college student today gets for that education — at least in the form of lifetime earnings — is also higher.
Furthermore, while I’ve no hard data to support what I’m about to say, my having been on college campuses on an almost daily basis for the past 43 years gives me confidence that the following is true: campus life for the typical American college student is today much better than it was in the 1970s. The size of dorm rooms likely has increased, as has the percentage of such rooms with air conditioning. Similarly, the number of campus amenities is greater: there are more and better fitness facilities, as well as more campus theaters and other entertainment venues. Significantly, the quality of food offered on college campuses is today incomparably higher than in the past, and its variety remarkably expanded.
While postsecondary education today might well cost more than it did decades ago, it is, overall, a much improved product.
Housing
New homes today are significantly larger — by about 1,000 square feet — than were new homes in the mid-1970s. Also, the typical home today, compared to its counterpart from the mid-1970s, is more likely to be equipped with amenities such as central air conditioning, an automatic dishwasher, an automatic garage-door opener, termite-resistant framing, granite countertops, and much better insulation.
So even though the typical house today costs more than in the past, it’s more house.
Health Care
Ask yourself, given your 2019 income, would you rather have (say) 1979 health care at 1979 prices, or 2019 health care at 2019 prices? If health care truly is unambiguously more costly today than it was 40 years ago, the answer should be easy: 1979 health care at 1979 prices. Yet, at least for me, I’d prefer to have 2019 health care at 2019 prices.
I did a Google search to find which medicines and medical procedures are widely available today that were either not available at all, or available only on a very limited basis, as recently as 1979 (the year when I began my senior year of college). My search was quick — a qualification that means that, should someone spend more time researching this matter, he or she will be able to expand the following list.
The list below is in no particular order. (I leave out any mention of HIV medications and treatments because HIV was undiagnosed as such in 1979. But, of course and happily, since HIV/AIDS was first diagnosed convincingly in the early 1980s, there have been major medical advances in treating this dreadful disease.)
– statins (for controlling cholesterol)
– Prozac, Lexapro, Paxil, and other effective antidepressant medications
– cyclosporin (an immunosuppressant)
– disposable contact lenses
– LASIK vision-correction surgery
– artificial hearts (the first successfully transplanted one being the Jarvik-7, in 1982)
– magnetic resonance imaging (MRIs)
– Viagra, Cialis, and Levitra (for erectile dysfunction)
– automated external defibrillators (AEDs)
– Gardasil (a vaccine for preventing certain kinds of cervical cancers)
– laparoscopic surgery (Although sometimes used prior to the 1980s, its use since then has skyrocketed.)
– the morning-after pill
– greatly improved prosthetics
Have improvements in pharmaceuticals and other health care products offset health care’s higher costs? I cannot say. But I can say that Americans today get more and better health care than did Americans of 40 years ago.
Still More Costly
Nevertheless, in spite of improvements in education, housing, and health care, the work-time costs of these goods and services — unlike the costs of food, furniture, and most other products — have indeed risen. And it’s possible — although I think highly unlikely — that this rise in the costs of these three categories of products has resulted in overall economic stagnation for ordinary Americans.
If so — if the rising costs of education, housing, and health care are causing ordinary Americans to tread water economically despite the falling work-time costs of most other goods and services — why would anyone suppose that the “solution” to this problem is more government intervention? No three sectors of the American economy are as heavily and as consistently distorted by taxes, subsidies, and regulations as are these three sectors.
The conclusion that I draw is that reducing the role of the state — rather than increasing it — is a necessary step to take to ensure that the prosperity of ordinary Americans continues to grow.
- Beijing Slams West For "Interfering" In Moscow's Affairs
Russian President Vladimir Putin has seen his popularity decline abruptly over the past year – something the New York Times won’t let its subscribers forget. And Russia’s handling of mass unsanctioned protests related to United Russia’s flagrant prohibition of opposition parties from participating in next month’s Moscow City Council elections has drawn more scrutiny from the West.
But once again, Beijing is siding with Moscow over in its handling of the protests, and – as it did recently when it blamed the US for inciting Hong Kong protests – has accused the West of “interfering” in Russia’s affairs:
China supports Russia’s rebuke of some foreign nations that have used the protests in Moscow to meddle in the country’s domestic affairs, a spokesman for the Chinese Foreign Ministry said on Tuesday.
“We have concerns over certain Western nations, which jump out of nowhere and conduct untoward actions” in relation to the protests, Geng Shuang said at a media briefing. He said Beijing supports the efforts of the Russian government to keep the situation within the rule of law.
Around the same time that the White House hinted that a military conflict may be imminent in Hong Kong after it said it was monitoring what a senior administration official called a “congregation of Chinese forces” on Hong Kong’s border, China’s Foreign Ministry on Tuesday claimed the recent protests in Hong Kong are “the work of the US,” adding that the United States owes the world an explanation.
US Secretary of State Mike Pompeo “thinks that the recent violence in Hong Kong is reasonable because everyone knows that this is the work of the US,” spokeswoman Hua Chunying said at a regular press briefing, referring to when Pompeo said China should “do the right thing” in dealing with protests in Hong Kong, in an interview with Bloomberg Television last week.
This, as one reader summarized today, can not be amended as follows:
Trump aborted China trade talks as soon as they begin…
… and stoked unrest in HK to piss Chinese off…
… in order to force the Fed to cut rates…
… and then get a trade deal with China this fall or winter to send stocks soaring into the 2020 elections …
Profit get re-elected.Meanwhile, as the trade war between Washington and Beijing rages, US consumers are spending tons of cash as personal consumption soars.
The Russian capital has seen a series of unsanctioned protests take place in recent weeks over what participants call the unfair treatment of opposition candidates, like Alexei Navalny…
…who were excluded from the September election to the city legislature. Some of the protesters violated Russian laws on mass gatherings, and were met with a police response.
- 'Celebriphilia' Epidemic Sweeps Across America: Forget Knowledge & Wisdom, Listen To The Stars
Authored by Michael McCaffrey,
Americans are blessed to have a plethora of benevolent celebrities who are willing to share their infinite knowledge and wisdom with them…
After a thorough examination by a team of top-notch doctors, I was recently given some very disturbing news… I was diagnosed with an acute case of stage 4 platonic celebriphilia. In case you don’t know, celebriphilia is a disease where the afflicted have an abnormal and overwhelming adoration of celebrity.
My medical team, which includes Dr Phil, Dr Drew and Dr Oz, tells me that the symptoms of celebriphilia include feeling a false sense of familiarity and intimacy with celebrities which leads to the afflicted projecting an inordinate amount of inappropriate intelligence, wisdom and expertise upon celebrities.
My celebriphilia first manifested itself a few years ago when Academy Award-winning actress Gwyneth Paltrow created her “lifestyle brand” Goop. Through Goop, Gwyneth sold new-age, alternative therapies and devices at exorbitant prices, including “vaginal eggs” that were meant to be inserted into the vagina in order to aid “hormonal balance, and feminine energy.”
After re-mortgaging my home in order to finance the purchase, I bought a dozen vaginal eggs from Gwyneth. Now if you are wondering why I would buy vaginal eggs whose miracle powers were debunked in a lawsuit, especially since I don’t have a vagina, then you obviously do not have celebriphilia.
The way I see it is this: if I had a vagina, I would trust my friend Gwyneth to tell me (and sell me) the right wonder egg to stick into it in order to cure whatever ails me. If I’m going to trust anyone regarding my non-existent vagina, you can bet your bottom dollar it would be the woman who played Pepper Potts in the ‘Iron Man’ movies… that alone makes her an authority in vaginacology.
The same is true of anti-vaccination proponent Jenny McCarthy. Jenny is a TV host and former Playboy model, which is the celebrity equivalent of being a PhD in immunology, which is why I faithfully obey her when she orders me not tovaccinate my kids because they could get autism.
Suzanne Somers starred on ‘Three’s Company’ 40 years ago, which is equal to getting a master’s degree in bio-genetic engineering, and so when, contrary to mainstream medical opinion, she claims that “bio-identical hormone therapy” is the fountain of youth… I trust in Suzanne’s knowledge and wisdom.
You may think my celebriphilia is so severe I need to take some medication to temper it… well… you’d be wrong.
Kirstie Alley and her Scientology lord and savior, Tom Cruise, have informed me that psychiatry is a “quack” science and psychiatric drugs are dangerous. Kirstie was on ‘Cheers,’ where everybody knows your name… and Tom Cruise is… well… TOM CRUISE! So they definitely know what they’re talking about and I trust their expertise implicitly and will remain untreated, thank you very much.
My celebriphilia isn’t limited to just medical questions. The infection has spread to my thoughts on foreign policy and politics too. Thanks to celebriphilia, I now blindly trust in Hollywood to tell me what to think. When Hollywood churns out star-studded, pro-war, pro-empire propaganda films and TV shows that have their scripts controlled by the Pentagon in exchange for military equipment, personnel, access and budgetary relief, I absorb the indoctrination unquestioningly.
We celebriphiliacs only get our news from rebellious comedians like John Oliver, Bill Maher and Stephen Colbert, and believe in every establishment talking point they sell us. I wholeheartedly put my faith in these second-rate hack comedians desperate to stay in the good graces of their corporate overlords to tell me the unvarnished truth.
As a celebriphiliac, I get all my insights regarding Russia from Rob Reiner, who is an expert because he played Meathead on the 1970’s sitcom ‘All in the Family.’ When Meathead tells me that we are at war with Russia because they stole our election in 2016, I treat his anti-Russian proclamations with all the respect it deserves.
To get my political opinions, I go to all the top experts… Robert DeNiro, Matt Damon, Bruce Willis, Brie Larson, Alec Baldwin, Tim Allen, Angelina Jolie, James Woods, Chris Evans and George Clooney. Sometimes these experts have conflicting opinions on political matters, like maybe Bruce Willis and Alec Baldwin disagree on tax policy, or Tim Allen and Chris Evans have opposing thoughts on immigration. In order to resolve these deeply troubling quagmires, I do the logical thing and choose what I believe by siding with the celebrity who has the most Twitter followers.
Luckily for me, I am not alone in being afflicted with celebriphilia, as it is a raging epidemic in America. Here in the US we adore our celebrities so much we actually vote them into high office. In the last 40 years alone, we have elected a senile, bad B-movie actor, Ronald Reagan, and a silver-spooned, D-list reality TV con-man, Donald Trump, to the presidency.
In my state of California, the epicenter of the celebriphilia epidemic, we have elected a sex-abusing, steroid-injecting, movie star, Arnold Schwarzenegger, to two terms in the governor’s mansion; and the city of Carmel-by-the-Sea elected Dirty Harry himself, Clint Eastwood, to be mayor 25 years before he berated an empty chair at the RNC convention in 2012.
We American celebriphiliacs not only forgave these men for their shortcomings, we also imbued them with a wisdom, competency and expertise they did not possess, all because of their status as celebrities.
You may think that because I suffer from celebriphilia and treat celebrities like experts on things well outside their skillset, that I am insane. If the definition of insanity is “doing the same thing over and over again but expecting different results,” then considering the level of corruption, incompetence and malevolence on display by “real” establishment experts in government, Wall Street, Big Pharma and the media over the years, be it in regards to 9-11, WMDs and the Iraq war, the housing bubble and ensuing 2008 economic collapse, the 2016 election, Russiagate and the opioid epidemic, then listening to, believing in, or trusting in these “official” experts is equally as insane as buying vaginal wonder eggs from Iron Man’s wife, Pepper Potts.
The bottom line is this: I am not a doctor, nor do I play one on TV, but I have seen other people play them on TV, and I am a certified celebriphiliac, which I think qualifies me to make a formal diagnosis of what ails celebrity-obsessed, and expert-addled America. After careful study and deep thought, I have come to this conclusion: contrary to popular opinion, America is not losing its mind… just like me, it has already lost it.
- Germany Is About To Sells Its First Ever Zero-Coupon Ultra-Long Bond
It’s not quite a zero coupon perpetual sovereign bond just yet, but it will have to do for now.
Having already sold debt which pays zero interest (i.e., 0% coupon), in just a few hours, Germany will sell an ultra-long bond with a 0% coupon for the first time on Wednesday amid a spasm of debt sales over the next two weeks offering negative rates.
As Bloomberg points out, this week’s 30-year auction will test the continued demand for haven assets now that the whole of Germany’s yield curve is in negative territory.
Meanwhile, as Bank of America said in a Monday report, the search for returns has driven 30-year yields to negative levels that cannot satisfy the return requirements of insurance companies and pension funds. This scramble for yield risks a repeat of the bund “tantrum” seen in April 2015 when 10-year yields were approaching 0% for the first time and a Bill Gross warning coupled with a sudden lack of appetite for a debt sale triggered a violent sell-off.
“There are some concerning parallels to today’s market environment,” said Ralf Preusser, global head of rates strategy at Bank of America, in a note. The risk is that at these yield levels, the German Treasury will eventually encounter a “buyers’ strike,” he said.
But not yet.
Germany will sell two billion euros of new 30-year debt at 10:30 a.m. London time on Wednesday, and since the yield on Germany’s 30-year bonds fell four basis points Tuesday to minus 0.18%, much lower than the 0.29% level on July 17, when the nation last sold similar-maturity debt, not only will the bond come with a zero coupon but it will be the first negative yielding ultra-long bond ever sold by Germany.
That said, traders will be closely following the oversubscription rate on the sale, which neared a record low in the July after falling for the last three auctions.
After the 30Y auction, Germany will next sell five billion euros of a new two-year bond on Aug. 27, followed by three billion euros of 10-year notes on Aug. 28 and four billion euros of five-year securities on Sept. 4.
But what if the warnings of a buyer’s strike are wrong and investors scramble to buy up even more duration ahead of a barrage of global QE, sending ultra long rates even lower? Well, as Deutsche Bank’s Michal Jezek wrote back on July 8, “the German government seems to be getting closer to having the power to issue a zero-coupon perpetuity in this market.”
As Jezek further writes, “Last week, the 100y bond of the Austrian government traded with the ask yield of 1.05%. Given the Austria-Germany yield differential at the 30y point is about 35bp, Germany would likely be able to issue a 100y bond with the nominal yield around 0.7%… if one believes that inflation over the next 100 years is going to average close to the ECB target of 2%, Germany could in real terms be paid some 1.3% p.a. for borrowing hundred-year money.”
Ok but, a 100 year bond still has some value, even if that value will go to one’s grandchildren. What about a zero coupon perpetuity? Isn’t that, by definition, worthless as one is just handing over money to a sovereign without ever being owed a maturity? Here are some parting, and quite interesting thoughts, from the Deutsche Banker:
if we were to analyse the valuation of zero-coupon perpetuities, we would find that such securities are generally not worthless. Why would a zero-coupon perpetuity not be worth exactly zero? Because its nominal value adds to the stock of debt of the issuer and so it is an option on recovery value (all pari passu claims get accelerated in default). Paradoxically, the value would rise with default risk, all else equal. So within the Eurozone, an Italian or Greek government zero-coupon perp would be worth more than a German one! On the other hand, Japan’s might be less valuable than Germany’s despite the mountain of their debt. Japan fully controls the printing press and is thus much more likely to resort to the “soft default” option of inflating debt away rather than ever incur the disruption costs of a “hard” restructuring. Of course, this is an exploration of an abstract concept, we are unlikely to see anyone issuing such structures. Just imagine what the roadshow brochure would have to say!
One thing that was not clear, is in the case of a default, does the perp get converted into equity of the sovereign, and if so, does that make bondholders the new “equityholders” of a European nation? In light of the ongoing diplomatic fiasco between Trump and Greenland, maybe this could be a “clever” way for some aggressive emperor types to moonlight as distressed sovereign investors and eventually equities the entire world, which has so much debt the either hyperinflation or debt default are the only options.
- Mr. President, This Is How To Get The Fed To Launch Quantitative Easing
Yesterday, after countless demands that the Fed cut interest rates, Trump finally made his first, long anticipated formal demand that the Fed should pursue “some quantitative easing“:
…..The Fed Rate, over a fairly short period of time, should be reduced by at least 100 basis points, with perhaps some quantitative easing as well. If that happened, our Economy would be even better, and the World Economy would be greatly and quickly enhanced-good for everyone!
— Donald J. Trump (@realDonaldTrump) August 19, 2019
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The good news for Trump is that he has now fully figured out that he has the Fed in the palm of his hand, as he demonstrated just hours after Powell’s July 31 rate cut when Trump broke the US-China trade ceasefire and re-escalated trade war, in the process sending rate cut odds soaring. The flowchart logic, as shown below, is quite simple: all Trump has to do is engage in action that threatens to destabilize the global economy and Powell – as he certified during the last FOMC meeting – has to respond by cutting further, until he eventually reaches a point where QE may be the only possible outcome (as we explained previously in “How The Fed Is Now Underwriting Trump’s Trade War, In One Chart“).
Obviously extending the logic of the above diagram to its logical conclusion also lays out the path that Trump must follow if he wishes to force the Fed to launch QE. And just in case it is unclear, it involves a “gray rhino”, an economic war, and negative rates.
As BMO’s fixed income team writes today, while economic tensions between the US and China have eased somewhat in recent days after China chose not to respond to being designated a currency manipulator by the Trump Administration, which in turn scaled back tariffs it had threatened to implement on September 1, this de-escalation is in-line with broad expectations of how the conflict between the US and China escalates, with BMO cautioning against losing focus on the ‘gray rhino’ that remains the biggest threat to the global economy.
For those who have not heard the term before, a gray rhino – unlike a black swan – is defined as a high-impact and obvious threat that is ambling toward the economy but is nevertheless underpriced by financial markets. Not surprisingly, a broad and severe global economic war remains the gray rhino that investors must continue to monitor and position against. Meanwhile, BMO defines an ‘economic war’ as a situation in which countries (and their various agents, including central banks, SOEs) engage in acts that are designed to harm a competitor more than to help one’s self. An obvious example of an act of economic war would be a country having its military cyber unit hack another country’s power grid. By contrast, cutting interest rates in order to push inflation upward toward target (even if that act weakens one’s currency and thereby incentivizes the shifting of production away from other countries) does not fit our definition of an act of ‘economic war’.
So almost by definition, sanctions regimes are acts of economic war. So through its sanctions programs, the US is actively engaged in economic wars against prevailing regimes in Iran, Syria and Venezuela. Similarly, the EU committed acts of economic warfare against Russia by imposing sanctions in retaliation for the invasion Crimea, although that war has been allowed to cool to the point of a de-facto truce.
Which brings us to…
The ultimate gray rhino, which is a multi-polar economic war that includes multiple major countries or economic regions actively engaged in economic warfare against each other. Much like shooting wars, economic wars have the potential of drawing in new waves of participants until they globalize and spiral completely out of control. So although the latest US-China developments are encouraging (for now), the latest developments in lesser hot spots like UK-EU and Korea-Japan are not all that encouraging. Based on the movement of asset prices over the past year, we question whether some markets (particularly FX) have adequately factored in the risks.
Here BMO is quick to note that an “ultimate black rhino” scenario is not its base case… however, the odds of one are rapidly rising.
And here is the punchline: if a worst-case scenario unfolds, BMO believes the Fed and other central banks will ease more aggressively, given the escalating risks of recession. And, should a recession scenario become the modal view, the Fed would not hesitate to quickly lower policy rates to the zero lower bound again, partly in the hope that rapid rate reductions could minimize the chance of having to ramp-up QE again or venture into negative rates. Other central banks would follow suit in this “race to the bottom”, that many would be hoping is accompanied with local currency depreciation (even perhaps with a bit of official encouragement).
What does that mean for the US?
An outright economic war would be extremely consequential for the US economy and thus monetary policy and the Treasury market. At a first pass, the Fed would react in terms of the impact on growth, inflation, and financial conditions. Economic war would lead to slower growth causing less inflationary pressure (despite any import tax expansion) and tighter financial conditions. All of this would correspond to the Fed responding in force by cutting aggressively – likely back to the effective lower bound – and – Trump, are you listening – restarting quantitative easing.
In other words, if Trump really wants to pressure the Fed into QE, what he needs to do is simple: unleash global trade war that mutates into global economic warfare, which in turn leaves the Fed with no choice but to launch QE.
Of course, merely launching QE doesn’t assure a happy ending, and indeed BMO warns that since an “economic war” world would be on the verge of a recession, it would have momentous consequences for asset prices, to wit:
Initially, a dramatic flight-to-quality and liquidity into Treasuries would increase downward pressure on US rates across tenors. Eventually, yields would breach the lows of the last cycle when 2s bottomed out at 0.14% 5s reached 0.53%, or said otherwise, both 2s and 5s would go negative.. In addition, 10-year yields would fall substantially further from here, passing the record low of 1.32% in short order before quickly approaching 1.00%.
Said otherwise, if Trump really chooses to pursue this option, he could kill two gray rhinos with one shot: first getting the Fed to launch QE and second he would push (at least) the short-end of the curve below zero, which would mean that the Fed has finally caught up with other central banks, giving Trump no further reason to complain about the Fed. The only downside: the US and the world would be in a historic recession, and unless central banks can stabilize the global economy, a depression would be assured.
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