- "The Only Way Out Is Creative Destruction" Sinn Fears "Self-Inflicted Malaise"
Authored by Hans-Werner Sinn, originally posted at Project Syndicate,
Almost exactly eight years ago, the Lehman Brothers collapse plunged the global economy into recession. The interbank market collapsed, and the entire industrialized world was thrown into the worst crisis since the end of World War II. Though central banks have maintained ultra-low interest rates, the crisis hasn’t yet been fully overcome. On the contrary, numerous economies, such as the southern European countries and France, simply aren’t making any headway. And Japan has been on the ropes for a quarter-century.
Some economists believe that this is evidence of “secular stagnation,” a phenomenon described in 1938 by the American economist Alvin Hansen, who drew on Karl Marx’s Law of the Tendency of the Rate of Profit to Fall. Owing to the gradual exhaustion of profitable investment projects, according to this view, the natural real interest rate has continued to fall. Stabilizing the economy thus is possible only by an equivalent decline in policy interest rates.
In view of the huge credit bubble that preceded the crisis in Japan, the United States, and southern Europe, and the aggressive policies pursued by central banks over the last few years, I doubt that this theory is correct. In fact, I find it plausible that a very different mechanism lies behind the post-2008 stagnation, which I refer to as “self-inflicted malaise.”
This hypothesis is best understood in the context of the economist Joseph Schumpeter’s theory of the business cycle. Faulty expectations on the part of market participants regularly cause credit and asset-price bubbles. Investors, expecting prices and incomes to rise, purchase residential and commercial properties, and they take chances on new business ventures. Real-estate prices start to rise, a construction boom occurs, and a new phase of rapid expansion begins, partly sustained by the revitalization of the domestic economy, including services. The growth in incomes increasingly emboldens borrowers, which further heats things up.
Then the bubble bursts. Investment collapses and real-estate prices fall; businesses and banks go bankrupt; factories and residential buildings are vacated; and employees are laid off. Once prices and wages have fallen, new investors step in with new business ideas and establish new firms. After this “creative destruction,” a new phase of rapid expansion sets in.
In the current crisis, however, monetary policy preempted the creative destruction that could have formed the basis for a new upswing in growth. Asset holders talked central bankers into believing that Schumpeter’s economic cycle could be overcome by large-scale bond purchases financed via the printing press, and by corresponding interest-rate reductions.
To be sure, these measures stopped the fall in asset prices halfway and thus saved much wealth. But they also prevented sufficient numbers of young entrepreneurs and investors from risking a new start. Instead, established firms remained in place, keeping themselves afloat but lacking the wherewithal for new investments. In Japan and Europe, in particular, large numbers of such zombie firms and banks survived, and they are now blocking would-be competitors able to drive the next upswing in growth. The resulting economic ossification looks like the secular stagnation that Hansen described; in fact, the malaise is self-inflicted.
And, because low interest rates have reduced asset managers’ returns, some central banks – and the European Central Bank, in particular – have relied on successive interest-rate cuts in an effort to engineer ersatz value gains for assets. The economy is thus caught in a trap, forcing the ECB to engage in ever more radical monetary-policy measures. Its current program of quantitative easing is meant to double the money supply in a very short period. Further guns are being moved into position, such as successively more negative nominal interest rates or so-called helicopter money.
The only way out of the trap is a hefty dose of creative destruction, which in Europe would have to be accompanied by debt relief and exits from the eurozone, with subsequent currency devaluations. The shock would be painful for the incumbent wealth owners, but, after a rapid decline in the dollar values of asset prices, including land and real estate, new businesses and investment projects would soon have room to grow, and new jobs would be created. The natural return on investment would again be high, meaning that the economy could expand once again at normal interest rates. The sooner this purge is allowed to take place, the milder it will be, and the sooner Europeans and others will be able to breathe easy again.
- Deutsche CEO Goes Full 'Dick Fuld': Bailout "Out Of The Question" Sees "Few Risks… Comfortable Liquidity"
Will John Cryan's name go down in the annals of financial history lore alongside Erin Callan, Joe Gregory, and Dick Fuld?
Given the extreme level of denial and hubris the Deutsche Bank CEO reportedly uses in an interview with Germany's Bild magazine, we'd say chances are better than even.
Echoing Fuld's blustering 2008 description of a Lehman balance sheet with "billions in highly liquid assets," along with his plan to sell prized assets, and threats to "hurt the shorts";
Deutsche's Cryan stated unequivocally that the bank is "comfortably equipped with free liquidity," that he sees no need for a capital raise – as he plans to sell Postbank – and a state bailout "is not an issue for us," could not understand "how someone can say that."
As a reminder, here are some special moments from Fuld and Callan's mouths as Lehman fell…
March 2008: Lehman had eliminated close to 4,000 jobs in the last year.
April 2008: "The worst of the financial crisis impact is behind us" … "environment will remain challenging for a while"
" by adhering to strong risk-management standards and running the company well, "I will hurt the shorts, and that is my goal."
Lehman has more than $35 billion of cash and liquid assets and another $65 billion of "unencumbered" assets that aren't pledged elsewhere and can easily be turned into cash, Fuld and Chief Financial Erin Callan said Tuesday.
And here, as Bild reports, is Deutsche Bank's CEO John Cryan explaining that everything is fine, nothing to see here… (via Google Translate)
The CEO of Deutsche Bank sees no need for state support of his institution. In an interview with "Bild" (Wednesday) John Cryan said aloud advance notification to the question whether the Bank need government aid: "This is not an issue for us."
The manager had also jected reports and speculation about alleged talks with German Chancellor Angela Merkel (CDU) on state aid for the German bank. "I have not asked the Chancellor at any time for help. I have indicated like nothing." Cryan said. He could not understand "how someone can say that."
Even its shareholders do not want to ask for help of the German Bank CEO. "The question of a capital increase currently does not arise," said the manager. The Bank met all regulatory capital requirements. They have "far fewer risks in the books than in the past" and was "comfortably equipped with free liquidity".
The CEO described the situation of Deutsche Bank as better than it was currently perceived from the outside.
So no capital increase, plenty of liquidity, and fewer risks?
Investor jitters were stoked by a preliminary Justice Department request that the bank pay $14 billion to resolve a probe into its handling of mortgage-backed securities. The company has said it expects to whittle down the settlement amount, just as other Wall Street banks did during their talks.
“It was clear from the beginning that we would not pay this sum,” Bild quoted Cryan as saying.
“The Department of Justice will treat us with the same fairness as American banks that have already agreed on a compromise."
The bank is also selling assets (just like Lehman)…
The CEO stressed that he considers the planned sale of Postbank started: ".. Everything is ready, we could pass Postbank tomorrow into new hands – but then the price has to be right, we have time."
When asked whether there would be a bonus waiver for directors like 2016 again next year, Cryan said:
"We're in a difficult transition, everyone knows that no one harbors unrealistic expectations.."
So there you have it. Nothing to see here at all. All you hedgers and speculators are crazy…
So who blinks first? The ECB – knowing the collateral chains that will snap. The Bundesbank – knowing their entire banking system is at risk. The German government – knowing it's over for them if DB depositors have to take a haircut… Or Brussells – who know the entire EU plan is teetering is done if anything but the 'rules' are applied to Deutsche. For now, there is one thing for sure – the market will press for one of these players to be forced to make decision.
- General Market Commentary 9-27-2016 (Video)
By EconMatters
We talk about various markets from Bonds and Gold to Natural Gas and Oil in this video. Something seems to be going on underneath the radar in crude oil, maybe we are starting to experience some tighter markets right here. API had draws across the board tonight in the Oil Market.
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- A Few Uncomfortable Truths You Won't Hear From The 2016 Presidential Candidates
Submitted by John Whitehead via The Rutherford Institute,
“If liberty means anything at all, it means the right to tell people what they do not want to hear.”—George Orwell
In the interest of liberty and truth, here are a few uncomfortable truths about life in the American police state that we will not be hearing from either of the two leading presidential candidates.
- The government is not our friend. Nor does it work for “we the people.”
- Our so-called government representatives do not actually represent us, the citizenry. We are now ruled by an oligarchic elite of governmental and corporate interests whose main interest is in perpetuating power and control.
- Republicans and Democrats are not sworn enemies so much as they are partners in crime, united in a common goal, which is to maintain the status quo.
- Presidential elections are not exercises in self-government. They are merely business forums for selecting the next CEO of the United States of America, Inc.
- No matter which candidate wins this election, the police state will continue to grow. In other words, it will win and “we the people” will lose.
- The lesser of two evils is still evil.
- There is virtually no difference between psychopaths and politicians.
- Americans only think they’re choosing the next president. In truth, however, they’re engaging in the illusion of participation culminating in the reassurance ritual of voting.
- The U.S. government has become a greater menace to the life, liberty and property of its citizens than any of the so-called dangers from which the government claims to protect us.
- The government knows exactly which buttons to push in order to manipulate the populace and gain the public’s cooperation and compliance.
- Fear, which now permeates the populace, leads to fascism.
- If voting made any difference, they wouldn’t let us do it.
- America’s shadow government—which is comprised of unelected government bureaucrats who operate beyond the reach of the Constitution—is the real reason why “we the people” have no control over our government.
- The government does whatever it wants.
- You no longer have to be poor, black or guilty to be treated like a criminal in America. All that is required is that you belong to the suspect class—that is, the citizenry—of the American police state.
- Whether instigated by the government or the citizenry, violence will only lead to more violence. Anyone who believes that they can wage—and win—an armed revolt against the American police state is playing right into the government’s hands.
- “We the people” are no longer shielded by the rule of law.
- Government eyes are watching you. Every move you make is being monitored, mined for data, crunched, and tabulated in order to form a picture of who you are, what makes you tick, and how best to control you when and if it becomes necessary to bring you in line.
- Private property means nothing if the government can take your home, car or money under the flimsiest of pretexts, whether it be asset forfeiture schemes, eminent domain or overdue property taxes. Likewise, private property means little at a time when SWAT teams and other government agents can invade your home, break down your doors, kill your dog, wound or kill you, damage your furnishings and terrorize your family.
- If there is an absolute maxim by which the federal government seems to operate, it is that the American taxpayer always gets ripped off.
- From the moment they are born to the time they legally come of age, young people are now wards of the state.
- Americans are powerless in the face of militarized police.
- Government bureaucrats believe they have the right to search, seize, strip, scan, spy on, probe, pat down, taser, and arrest any individual at any time and for the slightest provocation.
- Forced cavity searches, forced colonoscopies, forced blood draws, forced breath-alcohol tests, forced DNA extractions, forced eye scans, and forced inclusion in biometric databases are just a few ways in which Americans continue to be reminded that we have no control over what happens to our bodies during an encounter with government officials.
- Finally, we all bleed red. And we all suffer when violence becomes the government’s calling card. Remember, in a police state, you’re either the one with your hand on the trigger or you’re staring down the barrel of a loaded gun. The oppression and injustice—be it in the form of shootings, surveillance, fines, asset forfeiture, prison terms, roadside searches, and so on—will come to all of us eventually unless we do something to stop it now.
These are not problems that can be glibly dismissed with a few well-chosen words, as most politicians are inclined to do. Nor will the 2016 elections do much to alter our present course towards a police state.
Indeed, the popularity contest for the new occupant of the White House will not significantly alter the day-to-day life of the average American greatly at all. Those life-changing decisions are made elsewhere, by nameless, unelected government officials who have turned bureaucracy into a full-time and profitable business.
As I point out in my book Battlefield America: The War on the American People, these problems will continue to plague our nation unless and until Americans wake up to the fact that we’re the only ones who can change things for the better and then do something about it. Indeed, the Constitution opens with those three vital words, “We the people.”
What the founders wanted us to understand is that we are the government.
There is no government without us—our sheer numbers, our muscle, our economy, our physical presence in this land. There can also be no police state—no tyranny—no routine violations of our rights without our complicity and collusion—without our turning a blind eye, shrugging our shoulders, allowing ourselves to be distracted and our civic awareness diluted.
No matter which candidate wins this election, the citizenry and those who represent us need to be held accountable to this powerful truth.
- Caught On Tape: Hackers Take Control Of A Moving Tesla From Miles Away
Tesla can’t seem to catch a break this year with multiple accidents blamed on the company’s autopilot feature, earnings misses and huge cash burns on lower than expected deliveries that have resulted in the company hitting its bank “funding limit”, and a controversial proposed merger with SolarCity. Fortunately, none of this has really mattered to shareholders who keep supporting the stock near its all time highs.
As such, we suspect that Chinese hackers posting the first-ever evidence on youtube that they can hack into moving Teslas and control the vehicles from miles away won’t be of much concern to shareholders either.
Nevertheless, we present the following startling footage of Tesla Model S vehicles being remotely controlled by hackers who demonstrate the ability to manipulate everything from overriding the internal displays to opening locked doors and slamming on the brakes while the car is moving. Seems pretty safe, right?
The following footage shows a hacker slamming on the brakes of this Model S from 12 miles away.
Per Forbes, the hack by Tencent’s Keen Security Labs Team was the first demonstration of anyone proving they could remotely control vehicles, making the potential for real-world attacks a little more realistic.
Keen said it had informed Tesla’s security team of multiple vulnerabilities in the latest models running the most recent software. Moreover, the hacks were found to work on various versions of the Tesla Model S and are believed to also work across all marques.
A Tesla spokesperson acknowledged the Keen hack and said it had issued an over-the-air update to “address” the vulnerabilities even though the “risk to our customers was very low.”
“Within just 10 days of receiving this report, Tesla has already deployed an over-the-air software update (v7.1, 2.36.31) that addresses the potential security issues. The issue demonstrated is only triggered when the web browser is used, and also required the car to be physically near to and connected to a malicious wifi hotspot. Our realistic estimate is that the risk to our customers was very low, but this did not stop us from responding quickly.”
We agree, it’s probably nothing to worry about.
The full video can be viewed here:
- Viral Surveillance Video Reveals A Shocking Scene From China's Housing Bubble
Chinese home prices in August rose the most in more than six years, indicating local government efforts to avert a housing bubble have failed. Average new-home prices in the 70 cities rose 1.2% in August from July, the biggest increase since January 2010, while the value of home sales jumped 33% last month from a year earlier. At the same time, prices in Tier 1 cities, soared 3.5%, the most on record.
Still, in ongoing efforts to limit speculation in China’s latest housing bubble, cities such as Hangzhou have phased in ownership rules like banning those born outside the city from owning more than one property. Alas, squeezing demand represents a misguided way to tame a bubble, because if anything it leads to bursts of buying, sending prices soaring, followed by just as sharp plunges as the greater fools panic and rush to offload, forcing the initial rule to be undone, resetting the cycle… something which last happened in China in 2013 and is taking place again now.
Nowhere was this seen better than on a surveillance camera recording which captured China’s sheer housing bubble lunacy in its shocking raw intensity.
As People’s Daily reports, a surveillance camera – and the resulting viral video – caught the moment new real estate in east Hangzhou opened for sale on September 24. The resulting spree was prompted by the abovementioned new restrictions launched on Monday, which prevents people born outside Hangzhou from buying more than one property. What is mind-boggling is that despite one of the buying lunatics caught in the stampede literally tearing down the entrance door, all the properties sold out in a matter of hours.
- Bridgewater Calculates How Much Time Central Banks Have Left
One of the key themes that have emerged in the past year is that, having loaded up their balance sheets with tens of trillions in various assets, central banks are “running out of road.” While it is a topic extensively discussed on these pages, going all the way back to 2014, a good summary of the practical limitations on central banks comes from the following series of charts from Deutsche Bank.
The first slide looks at the bond transmission mechanism, namely that central banks have become increasingly aware of the adverse impact of low bond yields on financial sector profitability; another aspect is that European pension liabilities as a % of market cap are at a 10-year high – and above the levels they reached in 2008, when the European market cap was at half the current level. This means that absent an independent rise in inflation expectations, central banks’ attempts to push up nominal bond yields (via less QE or faster hikes) risks leading to higher real bond yields as well; the implication is that equities tend to de-rate when real bond yields rise (i.e. the discount rate increases).
There is a limitation from the standpoint of markets as well: European 12-month forward P/E, at 14.9x, is around 20% above its 10-year average; DB notes that its P/E model suggests that this deviation is fully accounted for by the fact that real bond yields are 180bps below their 10-year average; more troubling is the admission that any removal of monetary accommodation would likely lead to a sharp rise in credit spreads to reflect the deterioration in fundamentals (with default rates now at 5.7%), while equity strategist note that accommodative monetary policy has driven aggregate bond and equity valuations to the highest level since 1800
In the third slide, DB points out that while equities would likely react positively to any rise in nominal bond yields driven by higher inflation expectations (rather than by higher real bond yields), underlying inflation is only likely to accelerate if growth accelerates to be clearly above potential (i.e. the output gap closes). Meanwhile, weakening growth momentum in the US points to downside risks for inflation, and that since the Chinese RMB is still around 10% overvalued – and any renewed devaluation is likely to weigh on DM inflation expectations.
* * *
Ok fine, central banks are “running out of road”, however at the same time they are terrified to rip (or even peel) the band-aid off. This has put the system in an unstable equilibrium: on one hand, central bankers – as even they admit – need to hand over the growth impulse over to governments, yet on the other hand, they terrified of even the smallest change to the status quo as they know they may undo some 7 years of “wealth effect” creation overnight.
How much longer can this charade continue?
While many would be quick to answer “indefinitely” that is not true, because with every bond, ETF or stock, purchased by central bankers they come to the point where they either monetize the entire lot, or they increasingly impair the functioning of the capital markets (just ask the dozens of marquee hedge funds that have shuttered in recent years).
Luckily, in a recent analysis, Ray Dalio’s Bridgewater asked precisely this question, and even better, provided the answer to how much time is left until both the ECB and BOJ hit the limits on their existing programs.
As the chart below shows, assuming no changes to existing programs, the ECB and the BOJ, the two central banks most actively monetizing debt currently, have 8 and 26 months respectively, if they do no changes to their programs.
However, if incremental easing is layered on, like expanding the scope of their bond buying programs or purchasing equities even more aggressively, the total rises substantially. The final answer: 68 months, or just above 5 and a half years, in the case of the ECB, were it to steamroll all political opposition and monetize virtually every possible bond (and 20% of the equity market), and 48 months, or 4 years, in the case of the BOJ.
Which means for those market participants who have already torn most of their hair out from participating in a centrally planned “market” where nothing makes sense, get ready because, the insanity may last another 4 or 5 years longer…
- "The Donald Nailed It" Stockman Screams "We Are In A Big Fat Ugly Bubble"
Submitted by David Stockman via Contra Corner blog,
Most of the 90 minutes last night was a waste – with both candidates lobbing well-worn clichés, slogans and sound bites at the audience and each other.
But there was one brief moment that made it all worthwhile. That was when Donald Trump peeled the bark off the Fed’s phony recovery narrative and warned that the stupendous stock market bubble it has created will come crashing down the minute it stops pegging rates to the zero bound.
“……Typical politician. All talk, no action. Sounds good, doesn’t work. Never going to happen. Our country is suffering because people like Secretary Clinton have made such bad decisions in terms of our jobs and in terms of what’s going on.
Now, look, we have the worst revival of an economy since the Great Depression. And believe me: We’re in a bubble right now. And the only thing that looks good is the stock market, but if you raise interest rates even a little bit, that’s going to come crashing down.
We are in a big, fat, ugly bubble. And we better be awfully careful. And we have a Fed that’s doing political things. This Janet Yellen of the Fed. The Fed is doing political — by keeping the interest rates at this level. And believe me: The day Obama goes off, and he leaves, and goes out to the golf course for the rest of his life to play golf, when they raise interest rates, you’re going to see some very bad things happen, because the Fed is not doing their job. The Fed is being more political than Secretary Clinton.
Trump thereby landed a direct hit on the false Wall Street/Washington postulate that the Fed has been the nation’s economic savior. And he also elicited an almost instant defense of its destructive, anti-capitalist regime of Bubble Finance—-albeit in the guise of a “fact check” by the New York Times’ Fed reporter, Benyamin Appelbaum.
To be sure, there were actually no “facts” to check in Trump’ statement. It was simply an entirely correct judgment that the utterly unnatural interest rates engineered by the Fed have fueled an egregious inflation of financial asset prices and that “some very bad things” are going to happen when the Fed’s market rigging operation is finally halted.
Still, and opinion or not, Appelbaum emitted a barrage of harrumphing and scolding, implying that Trump is some kind of yokel who does not understand the sacred independence of the Fed:
In attacking the Fed, Mr. Trump is plowing across a line that presidential candidates and presidents have observed for the past several decades. There has been a bipartisan consensus that central banks operate most effectively when they are shielded from short-term political pressures. Indeed, President Richard M. Nixon’s insistence that the Fed should not raise rates in the early 1970s played a role in unleashing a long era of inflation — and in convincing his successors that it was better to leave the Fed to its technocratic devices.
Technocratic devices? Now that is downright balderdash because what the Fed is doing is profoundly and resoundingly political.
To wit, after 94 months on the zero bound the Fed has executed the most massive income and wealth transfer in American history. Upwards of $2.5 trillion has been extracted from the hides of main street savers and retirees over that eight year period (@ $300 billion per year). All of that and then some was gifted to the banks and Wall Street speculators.
Needless to say, a wealth redistribution that monumental in scope and capricious in impact would never see the light of day among the unwashed “politicians” that Appelbaum apparently thinks are too benighted to be involved in monetary policy. That’s because whether or not they embrace the Keynesian nostrum that saving is bad and debt is good, the nation’s politicians are smart enough to know that the sweeping fiscal transfer at the core of Fed policy would be shouted down by the voters in a thunderous chorus of denunciation and derision.
Stated differently, the politician at least know that if the Congress were to enact anything remotely similar to the Fed’s savage and relentless attack on savers and wage-earners, they would be on the receiving end of the torches and pitchforks that would descend on the Imperial City.
In fact, this wanton redistribution from savers to debtors and speculators is occurring only because a happenstance of history has put lethal financial power in the hands of an insulated, unelected monetary politburo; and one that has been taken-over by a tiny posse of delusional and power-hungry Keynesian academics, to boot.
Journalistic hacks like Appelbaum, along with Steve Liesman of CNBC and Jon Hilsenrath of the Wall Street Journal, not only exhibit the worst kind of access-driven mendacity; they also faithfully perpetuate all the myths, shibboleths and outright lies that insulate the Fed from any policy accountability whatsoever.
In the case at hand, Appelbaum claims that it was Nixon’s manhandling of the spineless Fed Chairman, Arthur Burns, in the run-up to the 1972 election that proved the case for the strict “independence” of the Fed. The resultant decade-long inflationary wave instigated by the nefarious Tricky Dick, therefore, was the inadvertent founding event; it allegedly fostered a newly minted separation of powers doctrine that has invested the 12 members of the FOMC with virtually dictatorial powers over the nation’s financial system.
Well, yes, Nixon was the evil-doer that paved the way to our present form of mutant casino capitalism. But it was not because Arthur Burns had a propensity to bend over in the presence of great power.
To the contrary, the real evil happened in August 1971 when Nixon was persuaded by a passel of so-called free market economists, led and inspired by Milton Friedman, to trash the Bretton Woods system, and sever the dollar’s last link to anything other than the whims and economic theories of the FOMC.
It did take several decades, of course, for the denizens of the Eccles Building to realize that with the shackles of gold and convertibility removed, they were free to generate dollar liabilities at will. Indeed, the great Paul Volcker fully understood what had happened at Camp David, and strove mightily during the next decade, first at the NY Fed and then in the Eccles Building, to keep the fiat genie bottled-up via sheer intellectual discipline and willpower.
But it couldn’t last, and not just because Alan Greenspan checked in his hard money doctrines in the cloak room of the Eccles Building the first day he arrived and never reclaimed the check. What happened was that the financial press discovered that it could swap journalistic integrity for access, and the rest is now history.
What has materialized, in fact, is a cult of central bank flattery and subservience that is every bit in the emperor has no clothes modality. Not since the days of Bill Greider has a mainstream journalist even dared to suggest that Fed policies have untoward effects on the people or that its real function is to serve the interests of its Wall Street masters.
But now it’s gotten downright hideous. There is not an honest price left in any precinct of the financial system. Dangerous, unstable speculative bubbles infest every corner of the money and capital markets.
Likewise, the Fed’s fatuous policy of inflation targeting has caused the massive off-shoring of breadwinner jobs to the China Price for goods and the India Price for services. And that wasn’t the half of it.
At the same time, this sweeping and perverse job destruction policy has generated massive slack in the domestic labor markets—upwards of 180 billion hours in quantitative terms. That overhang, in turn, has suppressed nominal wage rates in the middle and bottom end of the labor market, causing wage-earners to fall increasingly behind a relentlessly rising cost of living.
And then it has added insult to injury by fueling the fantastic bubble in the stock market that Trump so accurately called-out last night. Its not just that it will soon crash and wipe-put tens of trillions of paper wealth. Actually, the real evil of ZIRP and QE has already been done.
To wit, can anyone not drinking the Wall Street Cool-Aid believe that John Stumpf and his patron, St, Warren Buffet, were actually running a bank?
In fact, the C-suites of corporate America have been turned into stock gambling dens, and corporate balance sheets have been strip-mined to fund the greatest financial engineering ponzi schemes every conceived.
The truth is, Janet Yellen is a paint-by-the-numbers academic fool who has no clue about the havoc she and her posse have unleashed on the American economy. Yet she gets away with it exactly owing to the “Fed independence” cover story so mendaciously peddled by the likes of Appelbaum, Liesman and Hilsenrath.
Thank heavens for the Donald. He knows a rigged job when he sees it, and, at least last night, was undomesticated enough to let 100 million voters hear the truth.
- WA Goes After Pre-Crime: Gun Confiscation Proposed For Those "Likely To Commit Violence In The Near Future"
A new ballot measure being considered by voters in Washington State, officially referred to a Initiative Measure 1491, would allow authorities to seize guns from people considered “significantly more likely to commit violence toward themselves or others in the near future.” The legislation would allow authorities with a court order to seize an individual’s guns for a period of up to 1 year. Under the measure, gun owners would have the right to appeal a court order to have their guns returned but would have no ability to block the upfront confiscation.
The full text of Initiative Measure 1491 is included at the end of this post but below are a couple of key excerpts:
This act is designed to temporarily prevent individuals who are at high risk of harming themselves or others from accessing firearms by allowing family, household members, and police to obtain a court order when there is demonstrated evidence that the person poses a significant danger, including danger as a result of a dangerous mental health crisis or violent behavior.
Studies show that individuals who engage in certain dangerous behaviors are significantly more likely to commit violence toward themselves or others in the near future. These behaviors, which can include other acts or threats of violence, self-harm, or the abuse of drugs or alcohol, are warning signs that the person may soon commit an act of violence.
Individuals who pose a danger to themselves or others often exhibit signs that alert family, household members, or law enforcement to the threat. Many mass shooters displayed warning signs prior to their killings, but federal and state laws provided no clear legal process to suspend the shooters’ access to guns, even temporarily.
According to the Wall Street Journal, if the measure passes, Washington would become the second state after California to allow family members and police to petition a judge to take guns from a person considered a danger. Connecticut, Indiana and Texas have similar laws, but only police can ask a judge to do so.
Aside from all the obvious issues surrounding unreasonable seizures of personal property, another key issue with the bill is the broad definition of people who can petition authorities to confiscate someone’s guns. Per the measure’s definition of “Family or Household Member”, any disgruntled former “dating partner” could allege mental instability and have someone’s personal property confiscated as a form of retribution.
“Family or household member” means, with respect to a respondent, any: (a) Person related by blood, marriage, or adoption to the respondent; (b) Dating partners of the respondent; (c) Person who has a child in common with the respondent, regardless of whether such person has been married to the respondent or has lived together with the respondent at any time; (d) Person who resides or has resided with the respondent within the past year; (e) Domestic partner of the respondent; (f) Person who has a biological or legal parent-child relationship with the respondent, including stepparents and stepchildren and grandparents and grandchildren; and (g) Person who is acting or has acted as the respondent’s legal guardian.
While the WSJ has alleged that the bill has bipartisan support, the state’s Republican Party and gun-right’s groups are slightly less “enthusiastic” with the Washington State Rifle and Pistol Association saying “it’s just an excuse to go after guns.”
The state Republican Party has yet to take a position on the initiative, and Ms. Hutchison said she doesn’t know if it is a solution.
“That’s something that sounds very good on the surface,” said Joe Waldron, legislative chairman for the Washington State Rifle and Pistol Association. “It’s just an excuse to go after guns.”
Mr. Waldron said he is concerned that the measure would deprive gun owners of their constitutional rights, including due process and protections against unreasonable search and seizure.
What are the chances this bill has any impact at all on violent crime in the state of Washington?
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