- Le Pen Praises Brexit, Promises Frexit Referendum On EU
Submitt edby Michael Shedlock via MishTalk.com,
French National elections take place in two rounds of voting 2017. Marine le Pen is widely expected to be one of the final two candidates.
Today she praised the UK for choosing their own destiny and repeated her pledge to have a referendum on France’s membership in the EU.
In her first public meeting after a summer break in the tiny village of Brachay in northeastern France, Le Pen portrayed herself as the sole credible defender of law and order and national unity, saying the best way to combat terrorism was the ballot paper.
“This referendum on France belonging to the European Union, I will do it. Yes it is possible to change things. Look at the Brits, they chose their destiny, they chose independence … We can again be a free, proud and independent people,” she said.
Le Pen’s increasingly popular party thrives on anti-Europe and anti-immigration sentiment and opinion polls see her making it to an early May run-off in France’s presidential election, but losing that second round to a mainstream candidate, as a majority of voters do not want her as president.
Can Le Pen Win?
Reuters noted a majority do not want Le Pen to win. That’s true enough because a majority do not want any particular candidate to win.
In the US, a majority do not want Hillary or Trump. Voters will have to make a choice anyway.
Many will claim Frexit is “impossible”. They said the same thing about “Brexit”.
For now, I will go with the majority who believe French socialists would rather see any other candidate than Le Pen.
That is true today. But it may not be true when it matters, next May.
For more on how the 2017 election shapes up, please see French Economy Minister Resigns to “Regain Freedom”; His Political Party “En March”
- Don`t Conflate Seasonality in Oil Market With Rebalancing
By EconMatters
Price doesn`t equate a market being in balance, and seasonality has a drawing and a building season in the oil market. A market being in balance means supplies are stagnant not going up or down. Total supplies are still going up during the drawing season. Therefore, oil market still in surplus mode, and not rebalancing.
© EconMatters All Rights Reserved | Facebook | Twitter | YouTube | Email Digest | Kindle
- The Ultimate 21st Century Choice: OBOR Or War
Authored by Pepe Escobar, originally posted op-ed at SputnikNews.com,
The G20 meets in tech hub Hangzhou, China, at an extremely tense geopolitical juncture.
China has invested immense political/economic capital to prepare this summit. The debates will revolve around the main theme of seeking solutions “towards an innovative, invigorated, interconnected and inclusive world economy.”
G20 Trade Ministers have already agreed to lay down nine core principles for global investment. At the summit, China will keep pressing for emerging markets to have a bigger say in the Bretton Woods system.
But most of all China will seek greater G20 backing for the New Silk Roads – or One Belt, One Road (OBOR), as they are officially known – as well as the new Asian Infrastructure Investment Bank (AIIB).
So at the heart of the G20 we will have the two projects which are competing head on to geopolitically shape the young 21st century.
China has proposed OBOR; a pan-Eurasian connectivity spectacular designed to configure a hypermarket at least 10 times the size of the US market within the next two decades.
The US hyperpower – not the Atlanticist West, because Europe is mired in fear and stagnation — “proposes” the current neocon/neoliberalcon status quo; the usual Divide and Rule tactics; and the primacy of fear, enshrined in the Pentagon array of “threats” that must be fought, from Russia and China to Iran. The geopolitical rumble in the background high-tech jungle is all about the “containment” of top G20 members Russia and China.
It doesn’t take an oracle to divine which project is intriguing — and in many ways seducing — the Global South, as well as an array of G20 member-nations.
That connectivity frenzy
Shuttling between the West and Asia, one can glimpse, in myriad forms, the graphic contrast between paralysis and paranoia and an immensely ambitious $1.4 trillion project potentially touching 64 nations, no less than 4.4 billion people and around 40 per cent of the global economy which will, among other features, create new “innovative, invigorated, interconnected and inclusive” trade horizons and arguably install a post-geopolitics win-win era.
An array of financial mechanisms is already in place. The AIIB (which will fund way beyond the initial commitment of $100 billion); the Silk Road Fund ($40 billion already committed); the BRICS’s New Development Bank (NDB), initially committing $100 billion; plus assorted players such as the China Development Bank and the Hong Kong-based China Merchants Holdings International.
Chinese state companies and funds are relentlessly buying up ports and tech companies in Western Europe – from Greece to the UK.
Cargo trains are now plying the route from Zhejiang to Tehran in 14 days, through Kazakhstan and Turkmenistan; soon this will be all part of a trans-Eurasia high-speed rail network, including a high-speed Transiberian.
The $46 billion China-Pakistan Economic Corridor (CPEC) has the potential to unblock vast swathes of South Asia, with Gwadar, operated by China Overseas Port Holdings, slated to become a key naval hub of the New Silk Roads.
Deep-sea ports will be built in Kyaukphyu in Myanmar, Sonadia island in Bangladesh, Hambantota in Sri Lanka. Add to them the China-Belarus Industrial Park and 33 deals in Kazakhstan covering everything from mining and engineering to oil and gas.
Back in February, PwC was already detailing $250 billion in OBOR projects that had been built, recently started or agreed on and signed.
An array of Silk Road projects now crisscross Eurasia, progressively networking east-west and north-south corridors through many an economic zone; an expanding connectivity and infrastructure development frenzy involving Russia, China, India, Pakistan, Iran, Southeast and Central Asia. Connectivity, now more than geography, is destiny.
It’s not by accident that a lot of the action happens in member-states or observers of the Shanghai Cooperation Organization (SCO). The New Silk Roads are about to be totally intertwined with the reprogramming of the SCO as a security-economic cooperation umbrella.
In parallel Russia, with the progressive coordination of the Eurasia Economic Union (EEU) with the New Silk Roads, projects the Russia-China strategic partnership much further than just New Silk Road connectivity to Europe.
Follow those CUES
Southeast Asia – via the Maritime Silk Road — is a key hub in the New Connectivity Game in Eurasia. Which brings us to the alleged illegality of the “nine-dash line” Chinese claim of indisputable sovereignty as recently ruled in The Hague.
The US and the Philippines have a mutual defense treaty since 1951, according to which “island territories under [Manila’s] jurisdiction” must also be defended. Washington under a potential neoliberalcon Hillary Clinton presidency – and Kurt Campbell, who conceptualized the “pivot to Asia” as possible Secretary of State — might be tempted to declare the treaty applies to offshore islands, atolls, “rocks” and even underwater features such as Scarborough Shoal.
Beijing won’t wait to fall into this possible trap. Following a recent meeting in Inner Mongolia, China and ASEAN are set to launch an emergency diplomatic hotline and eventually adopt a Code for Unplanned Encounters at Sea (CUES).
ASEAN and East Asian powers, meanwhile, keep weighing the merits of the Regional Comprehensive Economic Partnership (RCEP) — 16 nations, 29% of global trade – as an alternative to the US corporate-pushed TPP, a sort of NATO-on-trade that excludes China.
China is hyperactive on all fronts. It will boost the use of Singapore know how to advance New Silk Road projects. Singapore, with a population nearly 75% ethnic Chinese, is China’s largest foreign investor and a major overseas hub for yuan trade. More than 20% of Singapore’s GDP is linked to China.
At the same time, planning for a post-war Syria, Beijing is committed to boost trade and economic cooperation with Damascus, another future OBOR hub. It does not hurt this is also asymmetrical payback for Pentagon interference in the South China Sea and the deployment of THAAD in South Korea.
Beijing has made it clear that the South China Sea won’t be discussed at the G20. Philippine President Rodrigo Duterte for his part has insisted, "We're not in a hurry to wage war, we're in a hurry to talk."
The heart of the matter in the OBOR-linked South China Sea is not sovereignty over “rocks” or even unexploited reserves of oil and gas; it hinges on the capacity of the Chinese Navy to regulate and eventually deny “access” to the Pentagon and the US Navy. What’s certain is that the US Navy will take no prisoners to prevent China from strategically dominating the Western Pacific, as much as Washington will go no holds barred to ram TPP to prevent China from economically reign over the Asia-Pacific.
Deng Xiaoping's maxim – “never take the lead, never reveal your true potential, never overstretch your abilities" – now belongs to the past. At the G20 China once again is announcing it is taking the lead. And not only taking the lead – but also planning to overstretch its abilities to make the hyper-ambitious OBOR Eurasia integration masterplan work. Call it a monster PR exercise or a soft power win-win; the fact that humanitarian imperialism as embodied by the Pentagon considers China a major “threat” is all the Global South – and the G20 for that matter — needs to know.
- "Blunt Language" – Goldman Explains Why It Is So Confident The Fed Will Hike In Under 3 Weeks
After Friday’s payrolls miss, the market’s initial reaction was to aggressively fade the probability of a near-term Fed rate hike, as September odds initially tumbled, only to quickly rebound into the afternoon. What catalyzed this jump? As we reported at the time, the move was almost entirely driven by an unexpected note by Goldman’s Jan Hatzius who bucked the trend set by other sellside lemmings, and instead of punting the September hiking date to December, the Goldman strategist said that the weak jobs report was nonetheless “strong enough” to prompt him to boost his Sept. rate hike odds from 40% to 55%.
Realizing the severity of his prediction, and the collapse in credibility he would suffer is he is – again – wrong (as we have duly documented, the past two years have been absolutely abysmal for Goldman predictions and recommendations), earlier today Goldman took time away from his holiday schedule and penned a note to explain why he is confident that, contrary to every other forecaster, he expects a better than even chance of a rate hike to be announced in just over two weeks when the Fed meets on September 20-21.
As he puts it, Yellen’s Jackson Hole speech used “blunt language” for a Fed chair, “which would have been unnecessary if she was only trying to convey a general sense that rates would be moving higher over time, or to signal a potential hike that was still 3½ months away. There are plenty of other opportunities to prepare markets for a move before the December meeting.”
Just as important was Goldman’s take on the the consensus call that the Fed would not hike until the election. As Goldman rhetorically puts it, “wouldn’t the tactics favor waiting until December given the presidential election?” To which it responds: “This is a widespread view, but we have not found much evidence that the election calendar has an impact on monetary policy—the Greenspan Fed started to tighten in June 2004 and continued to move right through the election, and the Bernanke Fed announced the then-controversial QE3 in September 2012, not December.”
So just maybe, Yellen (and Goldman) may have it in for Hillary. The rest of Hatzius’ contrarian reasoning is laid out in the following rhetorical Q&A dubbed “Why September?“
For the sake of what little is left of his credibility, we hope he is correct this time.
From Goldman Sachs:
Today we depart from our usual US Views format and discuss the outlook for Fed policy in Q&A format.
Q: You moved up your probability of a hike at the September meeting to 55% on Friday despite a below-consensus payroll number. Why?
A: Largely because the speech by Chair Yellen at Jackson Hole suggested a relatively low bar for this report. She said that “in light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal funds rate has strengthened in recent months”. The condition was that the data must “continue to confirm” the committee’s outlook—not a very stringent test, in our view, because it signals a predisposition to think that the outlook is on track.
Q: What makes you think Chair Yellen meant a hike in September, not December?
A: Two things. First, nothing happens without a good reason in these speeches, especially as far as monetary policy signals are concerned. The phrasing “case…has strengthened” was blunt language for a Fed Chair, which would have been unnecessary if she was only trying to convey a general sense that rates would be moving higher over time, or to signal a potential hike that was still 3½ months away. There are plenty of other opportunities to prepare markets for a move before the December meeting.
Second, when Vice Chairman Fischer was asked by Steve Liesman on CNBC later that day whether the “strengthened” comment meant that we should be “on the edge of our seats for a rate hike next month” (i.e. in September), he answered “what the Chair said today was consistent with answering yes”. This wording sounded like a deliberate signal that both of them, not just Fischer personally, think September is on the table for a hike.
Q: Did this shift come out of the blue?
A: The strength of the message surprised us, but we don’t think it came out of the blue. Back in the spring, the committee was ready to go in June or July, but then the weak May payroll report and the Brexit vote interfered. Now both of these worries have dissipated, the labor market has made further headway, financial conditions are easier than they were three months ago, and no major new risks have appeared. If they thought a hike made sense then, it should make more sense now. In this context, it is also noteworthy that the number of regional Federal Reserve Bank boards asking for discount rate increases—a barometer of policy sentiment within the system—has risen further in recent months and now stands at 8 (the highest since December).
Q: Did Friday’s payroll data clear the bar?
A: It is a closer call than we’d like, but on balance we think so. First, even the 151k August number in isolation is well above the “breakeven” pace—the number that Fed officials believe is consistent with unchanged labor market slack in the medium term—of less than 100k per month. Second, the longer-term trend measures such as the 3-month average (232k), 6-month average (175k), or 2016 year-to-date average (182k) are all higher. And third, preliminary August payroll numbers have had a tendency to surprise on the downside initially but ultimately to be revised higher, by an average of 71k since 2011; Fed officials are undoubtedly aware of this.
Q: What about other indicators?
A: They have been mixed to slightly weaker. On the labor market, the August household survey was a bit soft, with a flat 4.9% unemployment rate, but jobless claims remain low and household labor market assessments have improved further. On growth, the manufacturing surveys for August weakened, but GDP tracking estimates for the third quarter have been moving higher—our own estimate is 2.9% now, the NY Fed is at 2.8%, and the Atlanta Fed at 3.5%. On inflation, the latest core PCE number was only 0.1% but the year-on-year rate still stands at 1.6%. And on wages, Friday’s average hourly earnings number was only 0.1% month-to-month, but we think it was held back by calendar effects (our forecast was 0.0% for that reason); moreover, our broader wage tracker stands at 2.6% and still signals gradual acceleration. Overall, we think these numbers are probably sufficient to “continue to confirm” the committee’s outlook, alongside the more important payroll numbers.
Q: Many market participants believe that the talk about September was only an attempt to “create optionality” in case the data were very strong and the committee felt it had no choice but to hike. Do you agree with that?
A: Not really, because it overstates the FOMC’s sensitivity to one single month of data, or maybe even one release. It is very rare for one strong payroll number to turn the committee from wanting to stay on hold to feeling they have to tighten now. (There is an asymmetry here, as one very bad payroll report in early June was largely to blame for the committee’s change of heart about a June/July hike even before the Brexit vote.)
Q: Wouldn’t the tactics favor waiting until December given the presidential election?
A: This is a widespread view, but we have not found much evidence that the election calendar has an impact on monetary policy—the Greenspan Fed started to tighten in June 2004 and continued to move right through the election, and the Bernanke Fed announced the then-controversial QE3 in September 2012, not December.
Q: How much does it matter if they go in September or in December?
A: In the grand scheme of things, not much. But September does have some tactical advantages if they think a move sometime this year is very likely. It would avoid the need to first go through yet another press conference meeting with no hike, yet another reduction in the projected funds rate path—at a minimum to a one-hike baseline for 2016—and yet another labored explanation why holding off now does not mean that the plan for higher rates has been abandoned. Many market participants believe that the FOMC likes to talk about hiking soon but ultimately always flinches. A hike in September would undermine this narrative.
Q: If they do go, how much would financial conditions tighten?
A: This is of course uncertain. As a starting point, our research has shown that a funds rate hike on average tightens financial conditions by about 20bp. The variation around this is obviously large, and there is some (weak) evidence that the effects are bigger in an environment of greater global monetary policy divergence. But we would keep two things in mind. First, our FCI is now almost 50bp easier than on May 18, the day the hawkish April FOMC minutes were published. So there is some room for FCI tightening before it looks worrisome. Second, we think the committee would combine the hike with a reduction in the projected path for the funds rate to a one-hike baseline for 2016, i.e. a message that the Fed is done for the year, as well as a downgrade in the assessment of the stance of monetary policy from “accommodative” to “moderately accommodative” or the like. We think this could help keep the FCI impact moderate.
Q: Why do you think the market is only pricing a 30% probability of a hike?
A: Part of the reason is that the recent data have been a bit softer. But the more important factor may be that markets have short memories, and fading the Fed’s willingness to tighten has been a winning trade all year. That is our best explanation for why the initial response to Chair Yellen’s Jackson Hole speech, in particular, was so small. The market only moved significantly after the Fischer interview, and even that move was largely reversed in the following days, on little new information.
Q: Would the committee move in September if market pricing stays where it is?
A: Probably not. Historically, 90% of all hikes have been at least 70% priced on the eve of the meeting. We don’t think this is a hard and fast threshold, but suspect that the committee would want the probability to be materially higher than the current 30%. So we would probably need to see some hawkish Fedspeak between now and the start of the blackout period on September 13 to keep the chance of a hike alive. A signal that the August employment report showed sufficient employment growth to confirm the committee’s baseline outlook might be enough to shift market expectations toward a hike at the September meeting.
In terms of opportunities for providing such a signal, there is not very much on the calendar at the moment—speeches by Presidents Williams (September 6) and Rosengren (September 9) as well as Congressional testimony by Presidents George and Lacker (September 7). However, unscheduled press interviews are always possible.
Q: How confident are you that we will see that?
A: Not very confident, or else our probability would be higher than 55%. That said, we are much more confident (80%) that there will be a hike before the end of the year.
- Merkel Stunned By Defeat To Anti-Immigrant Party In Her Home State
Last Thursday we previewed that in today’s regional election in Mecklenburg-Western Pomerania, the home state of Angela Merkel, she was looking at the unthinkable: losing and not just to anyone but to her nemesis, the anti-immigration AfD. This is what we reported: “According to the latest shock poll, released late on Wednesday, the AfD is leading the CDU by 23 percent to 20 percent, with the Social Democrats, who currently run the rural state in coalition with Merkel’s party, at 28 percent support. What’s more, according to Bloomberg the AfD’s recent history in regional votes suggests it will perform better on election day than predicted in polls.”
Sure enough, according to the first exit polls released moments ago, Merkel’s CDU has come in third, in line with expectations, and more importantly, behind the AfD, which is the only party to see popular support in the elections as all other major parties have seen an exodus in popularity
- SPD 30.5 %, -5.1%
- AfD 21 %, +21%
- CDU 19 %, -4.0%
- Linke 12.5 %, -5.9%
- Grüne 5 %, -3.7%
- NPD 3.5 %, -2.5%
- FDP 3 %, 0.2%
The second exit poll does not show any notable change:
- SPD 30.4%
- AfD 21%
- CDU 19.2%
- Linke 12.6%
- Grüne 5%
- NPD 3.3%
- FDP 2.9%
The media Europhiles are once again disturbed, and quickly point out that Mecklenburg is Germany’s poorest state, which is indeed the case.
What the apologists don’t realize is that in a world in which the middle class is disappearing due one after another failed central bank policy, what happened in Germany’s poorest state today will happen in most other places soon enough (and already did in the UK, the same place all the apologists said a vote for Brexit was unthinkable).
The good news, according to ARD, is that – for now – the grand SPD-CDU coalition in Mecklenburg-Western Pomerania can continue, but the real news is that Merkel’s CDU has been beaten by by an anti-immigrant party. As Bloomberg put it last week, “defeat in her home state by the AfD would prove a political embarrassment for Merkel, and likely reignite grumblings about her refugee policies among some in her bloc.
What makes the defeat even more bitter is Merkel’s aggressive recent campaigning in her home state: she has campaigned hard to win back support, crisscrossing Mecklenburg-Western Pomerania in recent weeks. Yet ironically, she’s adopted a law-and-order tone at rallies, calling for a larger police force and “more video surveillance of public spaces”, precisely the things potential voters loathe the most. Just as inexplicably, she’s doubled-down on the question of refugees, refusing to step back from her “we can do this” slogan adopted last year as 1 million asylum seekers poured into the country. Her opponents have ridiculed the remarks as naïve.
It’s only downhill from here: as reported before, Sunday’s vote will mark the start of a tough month for the chancellor. It will be followed on Sept. 18 by a regional election in Berlin, where the CDU is trailing the SPD and has virtually no hope of winning power.
And now the fingerpointing begins.
- The Greater Depression – Part 1
Submitted by Jim Quinn via The Burning Platform blog,
There are several movies I will watch every time they are aired on one of my generally useless 600 cable channels. They all have the same thing in common – a compelling character portrayal which keeps you riveted and mesmerized by how the protagonist deals with adversity and circumstances beyond their control. The movies I can’t resist include: The Godfather I & II, The Green Mile, Shawshank Redemption, Apocalypse Now, and Patton. Another captivating movie, which didn’t do well at the box office, is Cinderella Man. The portrayal of Depression era heavyweight boxing champion James J. Braddock by Russell Crowe is inspirational, with a rousing and improbable victory by the champion of the common man. While watching this great movie a few weeks ago I found myself equating the themes to the current presidential campaign.
The Greater Depression
Braddock was an inspiration to all downtrodden demoralized Americans during the Great Depression. The parallels between the 1930’s Great Depression and today’s Greater Depression are uncanny, despite the propaganda emitted by the establishment politicians, media and banking cabal that all is well. The corporate mainstream media faux journalists scorn and ridicule anyone who makes the case we are currently in the midst of another Great Depression. They are paid to peddle a recovery narrative to keep the masses ignorant, sedated, and distracted by latest adventures of Caitlyn Jenner and the Kardashians. An impartial assessment of the facts reveals today’s Depression to be every bit as dreadful for the average American as it was in the 1930’s.
The Obama administration has used the identical failed fiscal policies utilized by FDR. $800 billion stimulus packages, cash for clunkers, payroll tax holidays, student loans for anyone with a pulse, and hundreds of other useless Keynesian claptrap ideas have driven the national debt from $10 trillion in September 2008 to $19.4 trillion eight years later, a 94% increase. The national debt in October 1929 was $17 billion. Eight years into the Great Depression, after billions in wasteful New Deal programs the national debt stood at $36.5 billion, a 115% increase.
The Great Depression lasted from 1929 through World War II despite the tens of billions spent on fiscal stimulus. After eight years of the largest budget deficits in history, the economy is still dead in the water, with GDP barely growing. And its pitiful growth is from the surge in consumer spending due to the calamitous Obamacare program and the continuous wars we wage across the world.
It’s the black and white photographs of disheartened men and hungry children from the 1930’s that define the Great Depression for present day generations. Of course after years of government run social engineering disguised as education, most people couldn’t even define when or what constituted the Great Depression. These heart wrenching portraits of average Americans suffering and in despair capture the zeitgeist of the last Fourth Turning crisis.
Apologists for the status quo contend the last eight years couldn’t possibly be classified as a depression. The narrative of economic recovery has been peddled by corporate media mouthpieces, feckless politicians, Too Big To Trust Wall Street bankers, Federal Reserve puppets, and government apparatchiks flogging manipulated data as proof of economic advancement. They point to the lack of soup lines as proof we couldn’t be experiencing a depression.
First of all, if there were soup lines, the corporate media would just ignore them. If they don’t report it, then it isn’t happening. Secondly, the soup lines are electronic, as the government downloads the “soup” onto EBT cards so JP Morgan can reap billions in fees to run the SNAP program. Just because there are no pictures of starving downtrodden Americans in shabby clothes waiting in soup lines, doesn’t mean the majority of Americans aren’t experiencing a depression.
If the country has actually been experiencing an economic recovery for the last seven years, why would 14% to 15% of all Americans be dependent on food stamps to survive? When the economy is actually growing and employment is really below 5%, the percentage of Americans on food stamps is below 8%. If the government economic data was truthful, there would not be 43.5 million people living in 21.4 households (17% of all households) dependent on food stamps. More than 100 million Americans are now dependent on some form of federal welfare (not including Social Security or Medicare). If the economy came out of recession in the second half of 2009, why would 6 million more Americans need to go on welfare over the next two years?
Federal, state, and local governments will spend approximately $1.08 trillion on welfare programs in 2016, including $600 billion for Medicaid and $480 billion for the rest. In 2009, 18.6% of the population was participating in at least one means-tested benefit program. After three years of “economic recovery” that number was up to 21.3% by 2012. If we were in the midst of an expanding economy why would 41.6% of African Americans and 36% of Hispanics be receiving means-tested benefits each month? The social safety net during the Great Depression was sparse. Spending in excess of $1 trillion per year to sustain over one-third of the U.S. population sure sounds like a Depression to me.
The appalling optics of Americans waiting in food lines and/or living on the streets is not being broadcast by the mainstream corporate media, as their duty is to sustain the establishment narrative of economic recovery at any cost. As I drive to work through West Philly, every Thursday the Grace Lutheran Church at 36th & Haverford Ave. distributes food to the local community and the line at 7:30 a.m. in the morning extends around the block.
This scene is duplicated in crumbling urban enclaves and deteriorating suburban municipalities across the land. Food banks and homeless shelters throughout the country are being inundated by those who haven’t benefited from the Fed’s QE and ZIRP “Save a Wall Street Banker” monetary schemes. One in seven Americans – 46 million people – rely on food pantries and meal service programs to feed themselves and their families.
There are 600,000 homeless Americans on any given night. In June 2016, there were 60,000 homeless people, including 15,000 homeless families with 23,000 homeless children, sleeping each night in the New York City municipal shelter system. Meanwhile, the sociopathic Wall Street titans pillage and plunder the nation’s wealth on a daily basis with their high frequency trading supercomputers, rigging the game with help of their Federal Reserve benefactors and captured politicians in D.C., and retire to their penthouse suites each night while spending their weekends in the Hamptons.
The divergence between the obscene levels of wealth acquired through illicit means by the chosen few and tens of millions experiencing extreme poverty due to the immoral and illegal actions of those chosen few has only been this extreme once before. It isn’t a coincidence that wealth inequality hasn’t been this high since the Great Depression.
Every monetary and fiscal action taken by the establishment since 2008 has been designed to benefit the rich, powerful, connected crony capitalists. Boosting the stock market to all-time highs, while impoverishing senior citizens and middle class savers, has left a stagnating economy on life support with no hope of revival. The hopelessness, despair, and anger of those not part of the establishment or profiting from establishment schemes is palpable.
The most blatant attempt by the ruling class to subvert the truth regarding our ongoing depression is the despicably absurd propaganda churned out by the government apparatchiks at the Bureau of Labor Statistics. With a working age population of 253.9 million people and only 151.6 million of them employed (27 million part-time, 15 million self-employed, 7 million working multiple jobs and worst of all 22 million government workers), the BLS has the gall to report only a 4.9% unemployment rate. There are 102.3 million working age Americans not working, but only 7.8 million of them are unemployed according to the highly educated establishment lackeys at the BLS. The other 94.5 million non-working Americans must be frolicking in the surf, sipping margaritas and counting the millions they’ve made in the rigged Wall Street casino.
Would the labor participation rate and employment to population ratio be hovering at levels last seen in 1978 if the jobs market was booming? And don’t blame it on Baby Boomers retiring. With 28% of people over 55 years old with no retirement savings and the median retirement savings of those 55 to 61 years old of $17,000, few Boomers can afford to retire on $12,000 of Social Security per year. The percentage of those over 55 years old working is at an all-time high, while the percentage of men 25 to 54 (prime working years) working is at an all-time low. Since 2007 the country has added 5.6 million mostly low paying service jobs, while 15.7 million Americans have supposedly left the labor force of their own free will, and the unemployment rate is virtually the same. Only an Ivy League educated economist or highly paid CNBC pundit would believe such malarkey.
If job growth was as strong as government and corporate media proclaim, how could weekly wages be growing by only 1.5% annually today and averaging only 2% over the last five years. When inflation on things you need to live (rent, healthcare, energy, food, education, autos) tallies in excess of 5% annually, you’re earning .25% if you have any savings and your wages have been going up at less than 2% per year, your daily existence is depressionary. Real median household income is lower than it was in 1989, even using the hugely understated and manipulated CPI.
Back before seasonal adjustments, birth death model phantom excel spreadsheet created jobs, pretending working age people weren’t in the workforce and the existence of government bureaucrats whose job it was to paint a rosy picture, we had actual unemployment figures. Every able bodied American was in the labor force during the Great Depression. The true unemployment rate fluctuated between 15% and 25% during most of the 1930’s. They had to stand in line for their relief checks and food. It wasn’t wired into their bank accounts or downloaded onto an EBT card.
The government approved false unemployment rate (U3) regurgitated by the corporate mainstream media with no qualifications or clarifications is 4.9%. The U-6 unemployment rate is the broadest unemployment measure, including short-term discouraged and other marginally-attached workers as well as those forced to work part-time because they cannot find full-time employment. It stands at 9.7%, almost double the mainstream media reported rate. You never hear this figure mentioned by the compliant lackey media.
But, if you want the true unemployment rate you must adjust the government figures for the misinformation which began in 1994. Long-term discouraged workers were defined out of official existence in 1994. If you stop looking for a job because there are no jobs available, the BLS pretends you no longer exist and you are dropped from their unemployment calculations. John Williams at Shadowstats rightfully adds these discouraged workers, who are willing to work, back into the calculation and surprise, surprise, the real unemployment rate in this country has been between 18% and 23% for the last seven years. Those rates are identical to the worst years of the Great Depression.
Once you obliterate the false economic propaganda peddled by the purveyors of the establishment, they fall back onto their one remaining false idol – the stock market. How could we possibly be in a depression when the stock market has gone up by 165% since its March 2009 bottom? It’s within 2% of its all-time high. This is after a 55% plunge from 2007 highs to the March 2009 lows. We know history might not repeat, but it certainly rhymes.
The market fell 86% from its 1929 highs to the 1932 lows. Those in control didn’t think to suspend mark to market accounting so the Wall Street banks could falsify their financial statements, like our beloved leaders did in March 2009. But, even though the entire 1930’s constitute the Great Depression, the stock market soared by 260% between 1932 and 1937, making the current cyclical bull seem puny in comparison.
Did the 260% increase in the stock market over five years in the midst of the Great Depression benefit the average American in any way whatsoever? Absolutely not. They didn’t own stocks. The 0.1% benefitted, just as they benefited from the crony capitalism New Deal programs that poured money into their coffers. Fast forward 80 years to the next Fourth Turning and you have the same dynamic.
The 160% increase in the stock market over the last seven years has enriched the Wall Street sociopaths, billionaire oligarchs, corporate chieftains, and the leeches and cronies who prop up the fetid establishment. The Federal Reserve QE and ZIRP monetary policies, along with the Obama fiscal debt expansion machinations, were solely designed to benefit Wall Street, not Main Street. The beneficiaries in NYC, D.C., S.F. and L.A. are rolling in the dough, while grandmas across the land are forced to eat Friskies for dinner.
Again, we refer to the entire 1930’s as the Great Depression despite the fact real GDP surged by 40% between 1933 and 1937. If today’s mainstream media existed during the 1930’s they would have been proclaiming the “tremendous” GDP growth and “spectacular” stock market gains. They would have really boosted the spirits of the millions receiving government relief and standing for hours waiting for a cup of soup and some stale bread. The real GDP in this country has grown by a pathetic 15.4% since the 2009 low. Using a true measure of inflation reveals we’ve essentially been in recession since the early 2000’s, with a depression since 2008.
Central bankers around the globe have all implemented identical monetary schemes to sustain the unsustainable. They have always had only one tool in their toolkits – printing money and creating enormous amounts of unpayable debt to prop up crooked corporate cronies, their morally bankrupt banker puppeteers and the slimy snakes slithering within the halls of Congress. Total credit market debt to GDP peaked at 261% in the mid-1930’s as FDR’s debt financed New Deal programs did absolutely nothing to lift the country out of its Great Depression. Obama and his Keynesian acolytes have tried the same solutions since 2009, with an equally dismal result. Total credit market debt to GDP peaked in 2010 at 381%, but six years later still stands at 345% as the stagnant economy grinds to a halt.
The debt end game approaches. With a national debt of $19.4 trillion (106% of GDP) poised to skyrocket by $1 trillion per year as entitlement programs on automatic pilot explode under the weight of Baby Boomers, interest rates at 5,000 year lows, a willfully ignorant iGadget distracted populace, and spineless corrupt politicians unable or unwilling to address the debt crisis, this depression is poised to go down in history as the Greater Depression.
As the Fed talks as if they have everything under control, their actions and/or inactions reveal an extreme level of desperation. As corporate profits soared to record highs and unemployment fell to 2007 levels, the Federal Reserve discount rate should have been elevated to 4%. Instead they keep it locked at an emergency crisis level of .25%. This proves they are lying about economic recovery narrative.
And now they are pondering negative interest rates, which have failed across Europe already. These academics, who’ve never worked a day of their lives in the real world, impose their demented monetary theories and guesses upon the citizens of the world, leading to havoc, chaos, heartache and ultimately war. When did capitalism devolve from saving and investing to borrowing and spending? Does 1913 ring a bell? Stanley Fischer, the vice chairman of the Federal Reserve revealed his disdain and contempt for the commoners in an interview this week:
“Well, clearly there are different responses to negative rates. If you’re a saver, they’re very difficult to deal with and to accept, although typically they go along with quite decent equity prices. But we consider all that and we have to make trade-offs in economics all the time and the idea is the lower the interest rate the better it is for investors.”
To paraphrase George Carlin, “he doesn’t give a fuck about you”. He knows there are more than 90 million American over the age of 55 in this country who are risk averse. Eight years ago they could earn a relatively risk free 4% in a money market fund. A retired couple with $250,000 could generate $10,000 per year in interest to supplement their Social Security. Today, due to the policies promoted and implemented by Fischer, Yellen and their cohorts, that couple can earn about $600.
And now he wants the elderly to pay him for keeping their money in the bank. These demented Federal Reserve schemes are guaranteed to blow up pension funds, endowments, and any other investor in bonds. The hubris and inhumanity of Fischer and his ilk makes me want to wretch. Fischer’s sole purpose in life is to serve his Wall Street and establishment masters. Screw the peasants. They are expendable.
There are now $11 trillion of negative yielding government bonds floating around the planet. No one in their right mind would buy a negative yielding bond. It’s not an asset. It’s a liability. An investor is guaranteed to lose money. You know the debt endgame approaches when governments issue negative yielding bonds that are then bought by central bankers and the banks that control them. It’s nothing but a stalling tactic to fend off the imminent collapse. Bill Gross, a relatively honest financial titan, contends Yellen and her contemporaries have taken reckless actions which are destroying capitalism:
“I and others however, have for several years now, suggested that the primary problem lies with zero/negative interest rates; that not only do they fail to provide an “easing cushion” should recession come knocking at the door, but they destroy capitalism’s business models – those dependent on a yield curve spread or an interest rate that permits a legitimate return on saving, as opposed to an incentive for spending.
They also keep zombie corporations alive and inhibit Schumpeter’s “creative destruction” which many argue is the hallmark of capitalism. Capitalism, almost commonsensically, cannot function well at the zero bound or with a minus sign as a yield. This watch is ticking because of high global debt and out-of-date monetary/fiscal policies that hurt rather than heal real economies. Sooner rather than later, Yellen’s smooth shot from the fairway will find the deep rough.”
In Part One of this article I’ve made the case most people in this country are experiencing a Depression, on par with the Great Depression of the 1930’s. In Part Two I will compare and contrast the lives and influence of James J. Braddock and Donald J. Trump, while assessing their impact on the American people during times of economic despair.
- Why This $1.6 Billion Hedge Fund Is 50% In Cash
"The whole world is wrongly positioned," warns Norwegian hedge fund firm Sector Asset Management's founder Peter Andersland, "the common denominator for everything is the long duration — real estate, stocks, bonds. Everything is much more rate sensitive now."
As Bloomberg reports, Andersland's $1.6 billion holds as much as 50 percent in cash in one of its funds, because holding cash is the best protection against bond and stock markets inflated by record monetary stimulus.
“What can kill us now?,” Peter Andersland, the 55-year-old founder of Sector, said in an interview on Tuesday at his office overlooking the Oslo fjord. “It’s the correlation between stocks and bonds that will be induced by higher rates. That’s the biggest risk in the capital markets today, not geopolitics or Trump.”
Massive central bank stimulus with below zero rates and quantitative easing has led to increasingly dysfunctional markets, with even the negative correlation between stocks and bonds breaking down. As we have noted previously, they are now largely moving in the same direction as markets have become more driven by central banks, leaving investors with no place to hide.
“Everyone is thinking about managing risk through diversification, a little bit in bonds, a little bit in stocks,” he said. “But if the correlation increases between those two then that risk management based on diversification doesn’t help. Because everyone is doing that.”
Sector, which bets on trends for countries, sectors and stocks, is protecting itself against the rising correlation by shortening duration in its investments and placing bets that will pay off when volatility rises. To do this they are holding more cash, shorting stocks and buying cheap put options, according to Andersland.
“The whole world is wrongly positioned,” he said. “The common denominator for everything is the long duration — real estate, stocks, bonds. Everything is much more rate sensitive now.”
“Risk is what you don’t think about, you can’t calculate it,” he said. “My analysis is five to ten percent more upside for global stocks, 40 to 60 percent downside for global stocks, MSCI ACWI. So it’s very skewed.”
- Dr. Drew Asked To Retract Hillary Health Comments – Received "Scary, Creepy" Phone Calls
Submitted by Joseph Jankowski via PlanetFreeWill.com,
Eight days after Board-certified medicine specialist and TV personality Dr. Drew Pinsky expressed his grave concern over Hillary Clinton’s health and the healthcare she was receiving, his popular show on HLN, the sister channel of CNN, was cancelled.
Appearing on KABC’s McIntyre in the Morning, Pinsky said he and his colleague Dr. Robert Huizenga became “gravely concerned……not just about her health but her health care” after analyzing what medical records on Hillary had been released.
Pinsky pointed out that after Clinton fainted and fell in late 2012, she suffered from a “transverse sinus thrombosis,” an “exceedingly rare clot” that “virtually guarantees somebody has something wrong with their coagulation system.”
According to sources close to Pinsky, the medicine specialist had been asked to retract his statements on the democratic nominee’s health and also received a series of nasty phone calls and e-mails over the his comments.
“CNN is so supportive of Clinton, network honchos acted like the Mafia when confronting Drew,” a source told Richard Johnson of Page Six. “First, they demanded he retract his comments, but he wouldn’t.”
What followed, according to a source close to Pinsky, was a series of nasty phone calls and e-mails which were described as “downright scary and creepy.”
The fact that Dr. Pinsky was asked to retract his comments, and even received “scary” calls and emails over what he said, can lead one to believe that it was indeed his concern for Clinton’s health that lead to his show being cancelled.
But according to a spokeswoman for Pinsky, the show’s cancellation had been decided weeks before Pinsky’s comments, as part of a HLN revamp that includes the end of Nancy Grace’s show.
“I know the timing is suspicious, and I know it’s hard to believe, but the two things had nothing to do with each other,” Pinsky’s rep Valerie Allen told Page Six‘s Richard Jones.
What makes Dr. Pinksy’s cancellation even more suspicious is that he is not the only one who has received repercussions for questioning Clinton’s health.
Just last week the Huffington Post banned journalist David Seaman from posting on their website for penning a commentary piece discussing questions surrounding Hillary’s health problems.
“Both of my articles have been pulled without notice of any kind, just completely deleted from the Internet, and both of those articles mentioned Hillary’s health,” Seaman said in a video posted to his YouTube channel.
“I’ve filed hundreds of stories over the years as a journalist and I’ve never had anything like this happen….I’ve never experienced this,” remarked Seaman, adding that he was now seeking legal counsel.
“This is spooky, to me this is extremely spooky – I don’t like it,” he added.
- Want "Unlimited Access To A Target's Mobile Devices… Leaving No Trace"? Ask NSO Group
For the affordable price of $650,000, Israeli company NSO Group will enable you to invisibly spy on 10 iPhone owners without their knowledge. The cost is a little higher for Blackberry users (5 for $500,000).. and there is a 17% maintenance fee every thereafter to ensure "leaving no traces whatsoever." Welcome to the new world of private companies selling surveillance tools to the 'average joe'…
NSO Founders
Since its founding six years ago, the NSO Group has kept a low profile. But, as The New York Times reports, last month, security researchers caught its spyware trying to gain access to the iPhone of a human rights activist in the United Arab Emirates. They also discovered a second target, a Mexican journalist who wrote about corruption in the Mexican government.
NSO is one of a number of companies that sell surveillance tools that can capture all the activity on a smartphone, like a user’s location and personal contacts. These tools can even turn the phone into a secret recording device.
The company is one of dozens of digital spying outfits that track everything a target does on a smartphone. They aggressively market their services to governments and law enforcement agencies around the world.
The industry argues that this spying is necessary to track terrorists, kidnappers and drug lords.
The NSO Group’s corporate mission statement is “Make the world a safe place.” Now, internal NSO Group emails, contracts and commercial proposals obtained by The New York Times offer insight into how companies in this secretive digital surveillance industry operate.
The New York Times points out that critics note that the company’s spyware has also been used to track journalists and human rights activists.
“There’s no check on this,” said Bill Marczak, a senior fellow at the Citizen Lab at the University of Toronto’s Munk School of Global Affairs. “Once NSO’s systems are sold, governments can essentially use them however they want. NSO can say they’re trying to make the world a safer place, but they are also making the world a more surveilled place.”
The NSO Group’s capabilities are in higher demand now that companies like Apple, Facebook and Google are using stronger encryption to protect data in their systems, in the process making it harder for government agencies to track suspects. Since it is privately held, not much is known about the NSO Group’s finances, but its business is clearly growing.
Two years ago, the NSO Group sold a controlling stake in its business to Francisco Partners, a private equity firm based in San Francisco, for $120 million.
Nearly a year later, Francisco Partners was exploring a sale of the company for 10 times that amount, according to two people approached by the firm but forbidden to speak about the discussions.
In its commercial proposals, the NSO Group asserts that its tracking software and hardware can install itself in any number of ways, including “over the air stealth installation,” tailored text messages and emails, through public Wi-Fi hot spots rigged to secretly install NSO Group software, or the old-fashioned way, by spies in person.
Much like a traditional software company, the NSO Group prices its surveillance tools by the number of targets, starting with a flat $500,000 installation fee. To spy on 10 iPhone users, NSO charges government agencies $650,000; $650,000 for 10 Android users; $500,000 for five BlackBerry users; or $300,000 for five Symbian users — on top of the setup fee, according to one commercial proposal.
You can pay for more targets. One hundred additional targets will cost $800,000, 50 extra targets cost $500,000, 20 extra will cost $250,000 and 10 extra costs $150,000, according to an NSO Group commercial proposal.
There is an annual system maintenance fee of 17 percent of the total price every year thereafter.
What that gets you, NSO Group documents say, is “unlimited access to a target’s mobile devices.” In short, the company says: You can “remotely and covertly collect information about your target’s relationships, location, phone calls, plans and activities — whenever and wherever they are.”
And, its proposal adds, “It leaves no traces whatsoever.”
* * *
The cone of personal privacy is shrinking at an every-accelerating pace and we wonder whether private companies' "consulting efforts" such as those NSO offfers are the military's 'non-boots-on-the-ground' "advisers" political workaround for the security state amid every growing public concerns over big brother?
Digest powered by RSS Digest
Saving...