Jun 04

Today’s News 4th June 2016

  • Violent California Protesters Play Right Into Donald Trump's Hand

    Submitted by Mike Krieger via Liberty Blitzkrieg blog,

    When it gets down to having to use violence, then you are playing the system’s game. The establishment will irritate you – pull your beard, flick your face – to make you fight. Because once they’ve got you violent, then they know how to handle you. The only thing they don’t know how to handle is non-violence and humor.

     

    – John Lennon

    Punches and eggs.

    Those are the two words that keep repeating over and over in the numerous articles I’ve read describing the mindless violence inflicted upon Trump supporters in San Jose, California last night. What’s worse, these protesters have undoubtably given Trump a huge boost in public perception.

    The violence exhibited by some Trump protesters yesterday evening was so barbaric and so obviously unnecessary and indecent, my first thought was that it had to be Trump operatives who arranged the whole thing. That’s how senselessly counterproductive their actions were.

    Ultimately, public perception matters a lot, which is why politicians spend virtually all of their energy managing it. Despite the twisted and corrupt nature of our political system, the fact of the matter remains that there will be an election in November 2016, and Donald Trump will be on the top of the Republican ticket. If your goal is to deal with this reality and defeat him, the last thing you want to do is make him and his supporters look good in front of the entire planet. Yet that’s exactly what these mindless imbeciles did. For the first time in this election cycle, they made Trump and his supporters look decent and upstanding, particularly compared to some of their opponents.

    This is of huge importance. Personally, I think Trump’s statement about Mexicans in the beginning of the campaign was disgusting and inexcusable. It’s one of the many reasons I cannot and will not vote for the man (for more see, May Registrations for the Libertarian Party Jump 20-Fold). That said, saying extremely offensive things and violently attacking American citizens attending a political rally are not in the same ballpark. They aren’t even in the same galaxy — and I’m not the only one who thinks that.

    As Americans sit down at their computer screens and smartphones over the weekend, they will respond with shock and horror to the images from San Jose. For some of them, their impressions of Trump and his supporters will improve materially. A certain percentage of these people will now be far more inclined to vote for Trump come November. If Trump protesters wanted to create an event that could make California competitive in the general election, they should be patting themselves on the back right now.

    To prove my point, how do you think most Americans are going to react when they read the following, say from the Washington Post:

    SAN JOSE, Calif. —Protests outside a Donald Trump rally in downtown San Jose spun out of control Thursday night when some demonstrators attacked the candidate’s supporters.

     

    Protesters jumped on cars, pelted Trump supporters with eggs and water balloons, snatched signs and stole “Make America Great” hats off supporters’ heads before burning the hats and snapping selfies with the charred remains.

    Screen Shot 2016-06-03 at 8.40.32 AM

    Several people were caught on camera punching Trump supporters. At least one attacker was arrested, according to CNN, although police did not release much information.

     

    Trump supporters were surrounded and, in several cases, attacked as they left the rally.

     

    In one incident captured on camera, a Trump supporter was struck hard over the side of the head as he was walking away from a group of protesters. The attack left him with blood streaming down his head and onto his shirt.

     

    “I was walking out with a Trump sign and he grabbed my Trump sign, saying I was like a racist and stuff,” the man told bystanders and local media. “Then he followed me, like, spit on me.”

     

    The Trump supporter said all he had done was chant the candidate’s name before trying to walk away.

    Here’s what he looked like after:

    Screen Shot 2016-06-03 at 8.45.49 AM

    Another Trump supporter was also bloodied after being attacked, his shirt torn almost completely off his body. Videos circulating on social media showed swirling, furious fights spilling from street corner to street corner, often with no police in sight.

    “Often with no police in sight.” Remember that later when you see some of the mayor’s comments.

    Marcus DiPaola, a freelance photographer following the Trump campaign, posted video of someone getting punched violently in the face.

     

    At times, protesters began to fight among themselves. In one instance, two female protesters pleaded for nonviolence while trying to protect a Trump supporter from an angry crowd. Despite their efforts, someone snatched the Trump supporter’s hat.

     

    A handful of the bright red “Make America Great Again” hats were set on fire by protesters, who then snapped photos of the scene or hung the charred hats from street signs.

     

    Perhaps the most jarring scene was that of a young female Trump supporter being attacked by a crowd of protesters.

     

    In multiple videos of the incident, the woman initially appeared to be happily posing in her Trump football jersey in front of the mostly male protesters, some of whom can be heard whistling and shouting at her.

     

    Then an anonymous arm rises over the crowd and tosses an egg at the woman, striking her in the head and eliciting howls and laughter from the crowd.

     

    A second later, a red water balloon bursts against the woman’s arm.

     

    Suddenly, another projectile strikes her hard in the face. Eventually, someone comes to help her and, after she indicates that she is having trouble seeing, she is ushered back inside the convention center.

    This is what the woman looked when all was said and done.

    Screen Shot 2016-06-03 at 8.47.33 AM

    Or how do you think the following will play to the American public, via NBC Bay Area:

    Donald Trump supporters leaving the presumptive GOP nominee’s rally in San Jose on Thursday were pounced by protesters, some of whom threw punches and eggs.

     

    The protesters chased and taunted Trump’s supporters outside the San Jose Convention Center. They surrounded one woman and threw eggs and bottles at her.

     

    “It was unbelievable,” said Steve Tong, a Cupertino resident who attended the Trump rally.

     

    Tong said after the rally, he was walking toward a nearby parking structure and saw protesters surrounding and taunting an elderly couple.

     

    “I’ve never seen anything like that in America before,” Tong said.

    Tong also said he saw protesters smash car windows inside the parking structure.

    Now listen to the incredibly irresponsible statement made by San Jose mayor, Sam Liccardo.

    The mayor, a Democrat and Hillary Clinton supporter, criticized Trump for coming to cities and igniting problems that local police departments had to deal with.

     

    “At some point Donald Trump needs to take responsibility for the irresponsible behavior of his campaign,” Liccardo said.

    Just in case you still don’t think these protesters are playing right into Donald Trump’s little hands, see the following from USA Today:

    Inside the rally, Trump was heckled by a protester in the crowd. Trump told the crowd not to worry about it.

     

    “Let him enjoy himself…we need our protesters,” he added. “We’ve got to be nice.”

     

    This message runs contrary to what Trump has said at previous rallies, including one in November when attendees kicked a Black Lives Matter activist (Trump said, “Maybe he should have been roughed up.”)

     

    This time, Trump told the crowd, “I’ve learned. Don’t hurt him.”

    Well done morons, you just achieved the impossible. You gave Donald Trump and his supporters the moral high ground.

    In case you missed them., here are three of the more disturbing videos from the protests.

     

     

     

     

     

     

     

    In conclusion, as Reason.com's Ed Krayewski so eloquently explained,

    In this age of perpetual grievances, showing up to protest at the Trump rally has become a chic social signaling thing to do. Acting out at Trump rallies, including by threatening, harassing, and even physically assaulting Trump supporters, is a natural continuation of the culture of safe spaces and triggering speech being nurtured in college campuses around the country. It reveals the total flim-flam that academics and professional left-wing protesters have too often wrapped up in high-minded ideas about fighting the power structures or whatever else.

     

    If Donald Trump won, he could end up being a fascist. But the imperial presidency that makes that possible has been a decades-long project, made possible by both mainstream parties and their supporters, who worry about the centralization of power in the presidency and the abuses government can commit right up until the point when the president and the government start doing things of which they approve.

     

    Attacking Trump's supporters because of the danger Trump poses as an imperial president is an exercise in blame-shifting. Those so concerned about what Trump might do to the country that they feel called to stalk and attack Trump supporters should take a long look in the mirror instead. It'll have the added benefit of not building more support for Trump, as violence against his supporters certainly will.

    What many came to realize last night was that Trump's real world supporters aren't the same as the online trolls that have come to represent him in an Internet-driven election cycle.

  • Dangerous Situation: Venezuelan National Guard Assault Members Of The Press During Protests

    During Thursday's protest over food in Caracas, chaos erupted after supermarket shoppers were told that regulated goods they had expected to be available would not be up for sale. In a sign of just how bad things have gotten, at least 19 journalists were attacked while trying to cover the chaotic events Bloomberg reports.

    Espacio Publico, a non-government organization that monitors freedom of expression said that the assaults include robberies by members of the National Guard and armed civilians.

    "We categorically reject the criminalization that the press is being subject to as they are held hostage, threatened and repeatedly intimidated by armed groups while they cover the street" the organization said in a separate statement.

    Venezuela's opposition is pushing for a recall referendum on Maduro's rule to be held this year, and after the country's election board known as CNE canceled a scheduled meeting to discuss the status of the request, the 2 million Venezuelans who had signed the petition calling for the recall were urged to march in order to "ratify" their signatures.

    Jesus "Chuo" Torrealba, the executive secretary of Venezuela's opposition alliance known as MUD said "we collected over 2 million signatures, and the CNE hasn't yet said how the process will go. We already have five times the signatures needed to start the process."

    "There were some very rough hours today in downtown Caracas. Venezuela is a time bomb of social and economic discontent" he added.

    Time bomb of social and economic discontent is an understatement…

  • "America's Greatest Threat Is Its Crazed 'Leadership' And Its Brainwashed Population"

    Submitted by Dmitry Orlov, The Saker, Victor Katsap and Evgenia Gurevich via PaulCraigRoberts.org,

    Insouciant Americans do not even know what they should be worried about…

    A Russian Warning

    June 02, 2016 “Information Clearing House” – “ClubOrlov” – We, the undersigned, are Russians living and working in the USA. We have been watching with increasing anxiety as the current US and NATO policies have set us on an extremely dangerous collision course with the Russian Federation, as well as with China. Many respected, patriotic Americans, such as Paul Craig Roberts, Stephen Cohen, Philip Giraldi, Ray McGovern and many others have been issuing warnings of a looming Third World War. But their voices have been all but lost among the din of a mass media that is full of deceptive and inaccurate stories that characterize the Russian economy as being in shambles and the Russian military as weak—all based on no evidence. But we-—knowing both Russian history and the current state of Russian society and the Russian military–cannot swallow these lies. We now feel that it is our duty, as Russians living in the US, to warn the American people that they are being lied to, and to tell them the truth. And the truth is simply this:

    If there is going to be a war with Russia, then the United States will most certainly be destroyed, and most of us will end up dead.

    Let us take a step back and put what is happening in a historical context. Russia has suffered a great deal at the hands of foreign invaders, losing 22 million people in World War II. Most of the dead were civilians, because the country was invaded, and the Russians have vowed to never let such a disaster happen again. Each time Russia had been invaded, she emerged victorious. In 1812 Nepoleon invaded Russia; in 1814 Russian cavalry rode into Paris. On June 22, 1941, Hitler’s Luftwaffe bombed Kiev; On May 8, 1945, Soviet troops rolled into Berlin.

    But times have changed since then. If Hitler were to attack Russia today, he would be dead 20 to 30 minutes later, his bunker reduced to glowing rubble by a strike from a Kalibr supersonic cruise missile launched from a small Russian navy ship somewhere in the Baltic Sea. The operational abilities of the new Russian military have been most persuasively demonstrated during the recent action against ISIS, Al Nusra and other foreign-funded terrorist groups operating in Syria. A long time ago Russia had to respond to provocations by fighting land battles on her own territory, then launching a counter-invasion; but this is no longer necessary. Russia’s new weapons make retaliation instant, undetectable, unstoppable and perfectly lethal.

    Thus, if tomorrow a war were to break out between the US and Russia, it is guaranteed that the US would be obliterated. At a minimum, there would no longer be an electric grid, no internet, no oil and gas pipelines, no interstate highway system, no air transportation or GPS-based navigation. Financial centers would lie in ruins. Government at every level would cease to function. US armed forces, stationed all around the globe, would no longer be resupplied. At a maximum, the entire landmass of the US would be covered by a layer of radioactive ash. We tell you this not to be alarmist, but because, based on everything we know, we are ourselves alarmed. If attacked, Russia will not back down; she will retaliate, and she will utterly annihilate the United States.

    The US leadership has done everything it could to push the situation to the brink of disaster. First, its anti-Russian policies have convinced the Russian leadership that making concessions or negotiating with the West is futile. It has become apparent that the West will always support any individual, movement or government that is anti-Russian, be it tax-cheating Russian oligarchs, convicted Ukrainian war criminals, Saudi-supported Wahhabi terrorists in Chechnya or cathedral-desecrating punks in Moscow. Now that NATO, in violation of its previous promises, has expanded right up to the Russian border, with US forces deployed in the Baltic states, within artillery range of St. Petersburg, Russia’s second-largest city, the Russians have nowhere left to retreat. They will not attack; nor will they back down or surrender. The Russian leadership enjoys over 80% of popular support; the remaining 20% seems to feel that it is being too soft in opposing Western encroachment. But Russia will retaliate, and a provocation or a simple mistake could trigger a sequence of events that will end with millions of Americans dead and the US in ruins.

    Unlike many Americans, who see war as an exciting, victorious foreign adventure, the Russians hate and fear war. But they are also ready for it, and they have been preparing for war for several years now. Their preparations have been most effective. Unlike the US, which squanders untold billions on dubious overpriced arms programs such as the F-35 joint task fighter, the Russians are extremely stingy with their defense rubles, getting as much as 10 times the bang for the buck compared to the bloated US defense industry. While it is true that the Russian economy has suffered from low energy prices, it is far from being in shambles, and a return to growth is expected as early as next year. Senator John McCain once called Russia “A gas station masquerading as a country.” Well, he lied. Yes, Russia is the world’s largest oil producer and second-largest oil exporter, but it is also world’s largest exporter of grain and nuclear power technology. It is as advanced and sophisticated a society as the United States. Russia’s armed forces, both conventional and nuclear, are now ready to fight, and they are more than a match for the US and NATO, especially if a war erupts anywhere near the Russian border.

    But such a fight would be suicidal for all sides. We strongly believe that a conventional war in Europe runs a strong chance of turning nuclear very rapidly, and that any US/NATO nuclear strike on Russian forces or territory will automatically trigger a retaliatory Russian nuclear strike on the continental US. Contrary to irresponsible statements made by some American propagandists, American antiballistic missile systems are incapable of shielding the American people from a Russian nuclear strike. Russia has the means to strike at targets in the USA with long-range nuclear as well as conventional weapons.

    The sole reason why the USA and Russia have found themselves on a collision course, instead of defusing tensions and cooperating on a wide range of international problems, is the stubborn refusal by the US leadership to accept Russia as an equal partner: Washington is dead set on being the “world leader” and the “indispensable nation,” even as its influence steadily dwindles in the wake of a string of foreign policy and military disasters such as Iraq, Afghanistan, Libya, Syria, Yemen and the Ukraine. Continued American global leadership is something that neither Russia, nor China, nor most of the other countries are willing to accept. This gradual but apparent loss of power and influence has caused the US leadership to become hysterical; and it is but a small step from hysterical to suicidal. America’s political leaders need to be placed under suicide watch.

    First and foremost, we are appealing to the commanders of the US Armed Forces to follow the example of Admiral William Fallon, who, when asked about a war with Iran, reportedly replied “not on my watch.” We know that you are not suicidal, and that you do not wish to die for the sake of out-of-touch imperial hubris. If possible, please tell your staff, colleagues and, especially, your civilian superiors that a war with Russia will not happen on your watch. At the very least, take that pledge yourselves, and, should the day ever come when the suicidal order is issued, refuse to execute it on the grounds that it is criminal. Remember that according to the Nuremberg Tribunal “To initiate a war of aggression… is not only an international crime; it is the supreme international crime differing only from other war crimes in that it contains within itself the accumulated evil of the whole.” Since Nuremberg, “I was just following orders” is no longer a valid defense; please don’t be war criminals.

    We also appeal to the American people to take peaceful but forceful action to oppose any politician or party that engages in irresponsible, provocative Russia-baiting, and that condones and supports a policy of needless confrontation with a nuclear superpower that is capable of destroying America in about an hour. Speak up, break through the barrier of mass media propaganda, and make your fellow Americans aware of the immense danger of a confrontation between Russia and the US.

    There is no objective reason why US and Russia should consider each other adversaries. The current confrontation is entirely the result of the extremist views of the neoconservative cult, whose members were allowed to infiltrate the US Federal government under President Bill Clinton, and who consider any country that refuses to obey their dictates as an enemy to be crushed. Thanks to their tireless efforts, over a million innocent people have already died in the former Yugoslavia, in Afghanistan, in Iraq, Libya, Syria, Pakistan, the Ukraine, Yemen, Somalia and in many other countries—all because of their maniacal insistence that the USA must be a world empire, not a just a regular, normal country, and that every national leader must either bow down before them, or be overthrown. In Russia, this irresistible force has finally encountered an immovable object. They must be forced to back down before they destroy us all.

    We are absolutely and categorically certain that Russia will never attack the US, nor any EU member state, that Russia is not at all interested in recreating the USSR, and that there is no “Russian threat” or “Russian aggression.” Much of Russia’s recent economic success has a lot to do with the shedding of former Soviet dependencies, allowing her to pursue a “Russia first” policy. But we are just as certain that if Russia is attacked, or even threatened with attack, she will not back down, and that the Russian leadership will not “blink.” With great sadness and a heavy heart they will do their sworn duty and unleash a nuclear barrage from which the United States will never recover. Even if the entire Russian leadership is killed in a first strike, the so-called “Dead Hand” (the “Perimetr” system) will automatically launch enough nukes to wipe the USA off the political map. We feel that it is our duty to do all we can to prevent such a catastrophe.

  • Michelle Obama Launches First Attack At Donald Trump

    One day after president Obama took a pot shot at Donald Trump in what appeared to be an escalation in campaigning against the New York billionaire on Hillary’s behalf during a Wednesday PBS town hall, Trump promptly shot back, saying that “this is a president who doesn’t have a clue,” during his rally in Sacramento.  “He’s going to start campaigning. Well, if he campaigns, that means I’m allowed to hit him just like I hit Bill Clinton, I guess right… If he doesn’t, I don’t care. But if he campaigns, and I think he wants to, because he wants to keep this terrible agenda going where everybody is ripping us, where the world is ripping us off.”

    And while for now Barack has not responded in what would surely escalate to the pinnacle of prime-time TV entertaiment as Trump unleashes on the president and vice versa, the latest shot against Trump came from none other than the president’s wife, Michelle. The first lady ripped into Donald Trump in what she said would be her final commencement address as first lady, at New York’s City College where she was granted an honorary doctorate, criticizing the presumptive GOP presidential nominee for his name-calling and what she described as a fear of outsiders that is un-American. 

    “Here in America, we don’t give into our fears. We don’t build up walls to keep people out, because we know that our greatness has always depended on contributions from people who were born elsewhere but sought out this country and made it their home,” the first lady said, without mentioning Trump by name, in an address at The City College of New York. It was unclear if Michelle was referring to people such as these:

    Michelle continued: “some folks out there today seem to have a very different perspective,” Michelle Obama continued. “They seem to view our diversity as a threat to be contained rather than as a resource to be tapped. They tell us to be afraid of those who are different, to be suspicious of those with whom we disagree.”

    Maybe there is a reason for that? In any case, here is one untapped resource seen during last night’s anti-Trump rioting in San Jose:

    Oblivious to the reality around here, Michelle continued her liberal sermon: “They act as if name-calling is an acceptable substitute for thoughtful debate, as if anger and intolerance should be our default state, rather than the optimism and openness that have always been the engine of our progress,” she said.

    Ironically, the angry and intolerant default state was exhibited by those who accuse Trump of stirring up just those feelings.

    “I have seen what happens when ideas like these take hold. I have seen how leaders who rule by intimidation, leaders who demonize and dehumanize entire groups of people, often do so because they have nothing else to offer,” she said. “That is not who we are.”

    And yet, this is precisely “who we were” last night in San Jose.

    As The Hill reports, these comments marked a rare entry into 2016 politics by the first lady who raised her voice during the latter remarks as she spoke over applause from the crowd. They were also notable coming one day after Hillary Clinton launched a full-out assault on Trump in a speech that had been billed as a foreign policy address. So far, White House attacks on Trump have been relatively low-key, in part because of the Democratic primary contest between Clinton and Bernie Sanders.

    Michelle’s remarks were not limited to Trump. She had the following parting words for thr class of 2016, whom she told that they’re “living, breathing proof that the American Dream endures in our time,” and linked their story to her family’s. “It’s the story that I witness every day, when I wake up in a house that was built by slaves. Two beautiful black young women head off to school, waving goodbye to their father, the president of the United States, the son of a man of Kenya who came here to America for the same reasons as many of you: to get an education and improve his prospects in life.” “So graduates, while I think it’s fair to say that our founding fathers never could have imagined this day, all of you are very much the fruits of their vision,” she continued.

    It was unclear as of this writing if the founding fathers’ vision was a generation of student debt slaves buried under $1.3 trillion in debt, desperate to find a minimum wage waiter and bartender job before robots make even that last “career” option obsolete.

  • Get To College, Get A Job, Get Poorer: Students Are Worse Off After Attending For-Profit Colleges

    Go to college, study hard, get a good paying job – that's the mantra heard by most students across America as they wind down their high school careers.

    Intuitively taking out loans just to go to college because everyone says so isn't a good idea, and a new study by the NBER finds that in fact, students who left for-profit schools during the 2006-2008 timeframe were worse off after attending. A key factor, as the WSJ reports, is that most of these students never earned a degree, they dropped out. Making matters worse, and certainly contributing to the fact that over 40% of student borrowers don't make payments, is the fact that these students borrowed to attend the colleges.

    From the WSJ

    The working paper, published this week by the National Bureau of Economic Research, tracks 1.4 million students who left a for-profit school from 2006 through 2008. Because students at these schools tend to be older than recent high-school graduates, they’ve spent time in the workforce. The researchers used Education Department and Internal Revenue Service data to track their earnings before and after they left school.

     

    The result: Students on average were worse off after attending for-profit schools. Undergraduates were less likely to be employed, and earned smaller paychecks–about $600 to $700 per year less–after leaving school compared to their lives before. Those who enrolled in certificate programs made roughly $920 less per year in the six years after school compared to before they enrolled.

     

    The key factor is that most of these students never earned a degree–they dropped out early. Excluding them, the minority of students who earned degrees saw an earnings bump after graduating.

     

    “Certificate, associate’s, and bachelor’s degree students generally experience declines in earnings in the 5 to 6 years after attendance relative to their own earnings in the years before attendance,” write co-authors Stephanie Riegg Cellini of George Washington University and Nicholas Turner of the U.S. Treasury Department.

     

    The picture is even worse when considering most students borrowed to attend the colleges. Nearly 9 out of 10 for-profit school students took on student debt; those in associate’s programs borrowed an average $8,000 and those in bachelor’s programs, $13,000.

    And now we get to the main reason that more millennialls are living at home than any other time since the Great Depression:

    “Examining the distribution of average annual earnings effects and average annual debt payments reveals that the vast majority of for-profit students experience both higher debt and lower earnings after attendance, relative to the years before attendance,” the authors write.

    The study is being called into question by groups such as The Association of Private Sector Colleges and Universities, saying that the students that were tracked walked right into the Great Recession.

    While that is true, the fact is that we're now in a "new normal", which is simply to say that lower paying jobs are being created and better paying jobs are disappearing, along with the overall opportunity to find employment – the results of the study are indeed indicative of what's going on in today's economy.

  • 13 Of 23 Co-Ops Created Under Obamacare Have Failed

    Submitted by Ali Meyer via FreeBeacon.com,

    Ohio’s InHealth Mutual co-op announced last week that it is going out of business, making it the 13th co-op to fail out of the 23 that were created under Obamacare.

    The Ohio Department of Insurance asked to liquidate the company, saying that the company was in a “hazardous financial condition.” The co-op served nearly 22,000 consumers who now have 60 days to find another policy offered by another company on the federal exchange.

    “Our examination of the company’s financials made it clear that the company’s losses would prevent it from paying future claims should its operations continue,” said Ohio Director of Insurance Lt. Gov. Mary Taylor. “Under Ohio law, we acted with certainty to protect the consumers.”

    The company recorded an underwriting loss of $80 million in 2015 despite the $129 million in taxpayer-backed loans granted to the co-op by the federal government. InHealth Mutual was also placed under “enhanced oversight,” one of three tools the Department of Health and Human Services has to monitor co-ops in financial distress. When a co-op is placed under enhanced oversight, it means the company is consistently underperforming and allows the department to give detailed and more frequent reviews of the loan recipient’s operations and financial status.

    According to Columbus Business First, medical claims were coming in at a rate of $3 million per week and the company would have had to raise premiums by 60 percent in 2017 to keep up. If InHealth Mutual were to stay in business through the end of 2016, projections show that the company would have posted losses of $20 million.

    Ohio’s failed co-op is added to the list of 12 co-ops that have already failed in Arizona, Michigan, Utah, Kentucky, New York, Nevada, Louisiana, Oregon, Colorado, Tennessee, South Carolina, and a co-op that served both Iowa and Nebraska.

    Centers for Medicare and Medicaid Services chief operating officer Mandy Cohen told lawmakers in February that eight of the 11 remaining Obamacare co-ops in operation were selected for “corrective action plans” and “enhanced oversight.” She did not disclose which co-ops were placed on these plans.

    A professor who specializes in economics and health insurance told lawmakers in March that closures of the remaining co-ops seem likely.

    “The future of the 11 co-ops still providing coverage in 2016 is uncertain, but future closures seem likely,” said Dr. Scott Harrington. “The 10 co-ops still operating with June 30 financials reported a cumulative loss of $202.3 million.”

     

    “Very little, if any, of the $1.24 billion in federal start-up and solvency loans to establish those co-ops will be repaid, and at least several will be unable to meet all of their obligations to policyholders and health care providers,” he said.

    The Department of Health and Human Services did not respond to requests for comment by press time.

    *  *  *

    Mission Accomplished?

  • Relating To The Struggle: Here Is How Much Federal Reserve Bank Presidents Made In 2015

    As the economy struggles and wage growth stagnates, everyone can rest easy knowing that the Federal Reserve bank presidents are getting paid quite nicely for all of their efforts.

    While wages grew 2.6% (at best) In 2015, Fed presidents saw a 4% average salary increase. And before anyone says that the presidents took one for the team, taking a pay freeze from 2011-2013, it was made up for in 2014 when a 6.6% increase was awarded.

    New York's William Dudley tops the list in 2015, pulling in a cool $466,500, followed by San Francisco's John Williams who made $422,900. The lowest paid Fed president was St. Louis's James Bullard, who pulled down a meager $339,700.

    Here is the complete list from 2015

    This chart shows the pay increases from 2014 to 2015 – San Francisco's John Williams saw the largest increase of about 12%

    The Fed Board reviews reserve bank officer salaries annually, and each bank has compensation caps, with the highest set at $469,500 for Boston, New York and San Francisco. Presidents receive pay increases each January and got a special "adjustment" in 2015 as the Fed transitioned from its previous policy Bloomberg reports.

    For those that struggle to make ends meet every single day in this "recovery" that is producing minimum wage jobs, just know that those at the Federal Reserve are working hard each and every day to earn their paycheck, and to create a better future for banks the average American.

  • "What If?"

    Via ConvergEx's Nick Colas,

    Today we offer up five market counterfactuals – “What ifs” – to both illustrate why large cap U.S. equities just closed near their highest levels of 2016 and consider the conventional wisdom about whether the current rally is sustainable. 

     

    Our home base: where asset prices and other trends started the year. 

     

    For example, global interest rates began 2016 at much higher levels: the U.S. 10 year at 2.24% (now 1.80%), German Bunds at 0.64% (now 0.11%) and Japanese government bonds at 0.27% (now -0.28%).  Where would U.S. equities be if global yields were unchanged this year?  (Spoiler alert: lower.) Or consider crude oil prices, up from $37/barrel to $49/barrel, lifting large cap energy stocks by 11% and responsible for 25% of the S&P 500’s gains YTD.  Then there is the recent worry over global smartphone sales and what that means for mega-cap Apple (still 3% of the S&P 500), which has clipped market returns by 0.21% (7% of total).  The dollar – down 3% in 2016 – is another item on the “what if” list, but the elephant in the room is “What if Donald Trump were not the Republican nominee?” Markets seem to have ignored him for now, but can that continue into the general election season?

    What if President John Kennedy had rolled out of Dealey Plaza unharmed?  Would he have avoided a larger military entanglement in Vietnam?  Or more quickly embraced the civil rights movement than his successor?  Would it have been John Jr running for President in 2008, or now?  And would Marilyn Monroe ever have become first lady, as she reportedly told Jackie was her goal?

    The term for that kind of scenario analysis is “Counterfactual thinking” – considering possible alternative events to those that actually occurred.  What if you had majored in Classics instead of Business, or married someone besides your current spouse?  How would your life be different?  Would you be happier? Poorer, but happier? (Yes, that’s a thing.)

    Today we’ll unpack the current U.S. market through the lens of 5 counterfactuals, all anchored in a prior reality: where the world was 155 days ago, at the end of 2015. Our goal is to highlight what has taken the S&P 500 to its highest point in 2016 and assess the sustainability of current valuations and market dynamics.

    #1: What if global interest rates were the same as 12/31/2016?

    Since the start of the year, global long term interest rates have fallen dramatically:

    ·       US 10 year Treasuries went from a 2.24% yield to 1.80% today.

    ·       German 10 year Bunds yield just 11 basis points now, down from 64% bp on New Year’s.

    ·       Japanese 10 year government bonds now sport a negative 11 basis point yield, down from 27 basis points at the start of 2016.

    The reasons for these declines are largely due to punk economic growth in Europe and Japan combined with central bank bond buying in those regions.  This has pulled U.S. rates lower in their wake, even though domestic economic growth is grinding modestly higher.  Lower rates make equities look more attractive (at 2.1% the S&P 500 yields more than a 10 year Treasury) and, voila, you have a rally in U.S. stocks.

    Our Answer: U.S. Equities would likely be down on the year if interest rates were unchanged.  The tipping point here relates to economic and corporate earnings growth balanced against nominal interest rates.  The central narrative surrounding capital markets is that global growth is very slow for a variety of fundamental reasons.  Therefore if global yields were unchanged even with current central bank bond buying, it would be due to an increasing fear of inflation.  Good for policymakers and their goals, but likely bad for stocks.

    #2 – What if crude oil prices were unchanged in 2016?

    The year began with spot West Texas Intermediate trading at $37/barrel and now trades for $49/barrel, up 32% YTD.  The move higher has both lifted large cap energy stocks by 10.8% and reassured capital markets that we are not at the brink of global recession.  Many investors look at oil prices as the blood pressure reading of the world economy – you don’t want it too high (inflationary hypertension) or too low (deflationary coma).

    Our Answer: higher oil prices have been very helpful in reestablishing investor confidence in everything from U.S. economic growth (we are still by far the largest oil consumer country in the world) to Chinese economic expansion (they are #2) to the relative stability of many oil-producing countries.  The most easily quantifiable benefit: at 7% of the S&P 500, the energy sector’s 10.8% YTD rally means that oil’s rise is responsible for some 25% of the entire rally this year in large cap U.S. stocks.

    #3 – What if the dollar hadn’t weakened by 3% this year, but was instead unchanged?

    Based on the DXY Dollar Index, the U.S. greenback has been on a bit of a wild ride this year, starting at 98.75, dropping to 92, and then bouncing to a close today of 95.6.  Put another way – the dollar has been almost as volatile as stocks.  At its current level, it suits U.S. monetary policymakers to a “T” – just weak enough to help the earnings of large multinational companies (who might expand and hire due to better earnings) but strong enough of late to confirm that the Fed’s message of a potential rate increase is getting through.

    Our Answer: this one might not matter much to the current level of U.S. equities.  The net change year-to-date, just 3%, still leaves the dollar below where it has traded for much of the time since early 2015. Any dramatic strengthening would likely hurt equities, unless it came with a healthy dose economic growth.

    #4 – What if tech investors still thought smartphones were a global growth category?

    Apple may be just one company, but it is still has the largest single weighting in the S&P 500, at 2.97%.  Microsoft holds the #2 spot, at 2.28% and the dual classes of Alphabet combine to 2.39%. That means that Apple’s key market – global smartphones – is important to the equity market as whole.

    Our Answer: As with the dollar, Apple’s move (down 7% for the year) doesn’t overly change general market returns.  If Apple were flat on the year, the S&P would only be 0.21% higher.

    #5 – What if Donald Trump were not the Republican nominee for President?

    I think if you had asked market participants a year ago “Where would you guess the S&P 500 was trading if I told you that in one year’s time Donald Trump were the Republican Party candidate for President”, the answers would have ranged from 1,000 to 1,500.  Surely that kind of unexpected turn of events must have tied to a market meltdown, large geopolitical shock, or both.  And yet here we are.  The only way to square the circle is to assume that investors think the chance of a Donald Trump presidency is essentially zero, because here we are at 2016 highs.

    Our Answer: Stocks would likely be exactly where they are now if Mr. Trump were not the nominee.  The more important observation is actually “Why are capital markets ignoring the social message that his success (and to a similar degree Senator Sanders’ rise) seems to be delivering to Wall Street’s front door?”  Yes, the Electoral College and demographic decks seem stacked against Donald Trump, but that doesn’t negate the reason he got as far as he did.  Remember when Jeb Bush was the seeming favorite?  It wasn’t that long ago.

    Our bottom line here is that two of our counterfactuals neatly illuminate why U.S. stocks are working: lower interest rates and stable-to-rising oil prices.  The former underpins market valuations, the latter sends soothing signals about global economic growth and supports hopes for an earnings rebound in the energy sector.  As for when – or even if – markets get around to pondering what a Trump campaign signals about broader social issues, I doubt we’ll need counterfactuals to illuminate those messages once they come along.

  • "We're Hungry And Tired" – Protesters In Venezuela March Toward Presidential Palace Demanding Food

    Last month we showed just how severe the collapse in Venezuela had become, as starving Venezuelans took to looting supermarkets and other food dispensaries in search of whatever food could be found.

    Despite having the world's biggest oil reserves, Venezuelans are suffering from severe shortages of food and electricity, on top of inflation that makes it difficult to buy anything to begin with. Angry citizens have had enough, and again took to the streets yesterday to march on the presidential palace, Chanting "No more talk. We want food!".  Once protesters were within about a half dozen blocks of the palace, police in riot gear blocked the road and began firing tear gas.

    A protester named Jose Lopez said he and several others were neither government supporters nor opposition members, they just wanted food: "We have needs. We all need to eat" Lopez told journalists. Another protester said "I've been here since 8 in the morning. There's no more food in the shops and supermarkets. We're hungry and tired."

    As citizens literally starve, Maduro blames the fall in global oil prices and an "economic war" by his foes seeking a coup for the issues his country is facing. "Every day, they bring out violent groups seeking violence in the streets. And every day, the people reject them and expel them." Miguel Perez, the government's top economic official, said "we know this month has been really critical. It's been the month with lowest supply of products. That's why families are anxious. We guarantee things will improve in the next few weeks."

    Unfortunately, the crisis worsens every day in Venezuela, and people aren't going to wait weeks before they can get enough to feed their families. With the decision whether or not to hold a recall referendum to oust Maduro officially put on hold, the scene is set for the crisis to become even more severe.

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