- Reality Check: "Immigration Can Never Be An Effective Way To Deal With The Suffering People Of The World"
Submitted by Mac Slavo via SHTFPlan.com,
The most oft cited reason by opponents of President Trump’s immigration policies for why America should open its borders to the millions of impoverished and persecuted individuals around the world often center around humanitarian reasons. As a rich country with plenty of land mass, we should be able to take in anyone and everyone who may be in need, right?
While that notion, like Marx-Engels’ ideas for taking from those who have the ability and giving to those who need, may seem great on paper, successfully implementing such policies in the real world is starkly different.
According to Census Bureau statistics, some 1.3 million foreign-born individuals legally immigrated to the United States in 2014. That figure doesn’t include the nearly one million immigrants that enter the country illegally each year. Those who support open border immigration have said that we need to take in even more people.
But according to journalist Roy Beck, taking in one million people per year makes almost no difference in the grand scheme of things because for every million we bring into the United States, another 80 million people yearly are born into countries with extreme levels of poverty, violence or war. According to Beck, even opening our borders to five million more people per year would do nothing to stem the the real problems.
In what is one of the most viewed immigration policy videos on the internet from Numbers USA, Beck ingeniously utilizes gumballs to demonstrate why open borders simply will not work. As well, he provides a seemingly novel solution that has for decades fallen on deaf ears:
We never get ahead of what’s happening in these countries… Don’t you see? Immigration can never be an effective or significant way to deal with the suffering people of the world… they have to be helped where they live…
99.9% of them will never be able to immigrate to a rich country… there is no hope for that… they have to bloom where they’re planted… the only place that 99.9% of these people can be helped is where they live… let’s help them there.
In short: taking in millions of immigrants doesn’t even make a dent.
So for those utilizing immigration as justification for violent protests and kinetic civil war, or for those who follow such narratives blindly based strictly on emotions that are devoid of any rational thought, we encourage you to consider the reality of bringing in millions of immigrants from impoverished countries.
And don’t just consider the non-effect of such policies as they relate to the global humanitarian situation, but consider the implications this has on America’s resources, as well as our citizens, who will be burdened with heavy taxation to cover the costs.
Even if we went by the most radical proposals in Washington, which are to actually double our immigration to two million year… which would totally overwhelm our physical, natural and social infrastructures, we couldn’t even make a visible difference.
- Once Feared, The "Tiger Cubs" Have Become Wall Street's Prey
Things are rapidly changing for the hedge fund world, and not just in terms of chronically underperforming the S&P, which as the following chart from Goldman demonstrates, they have on 10 of the past 14 years, leading to relentless redemptions…
… but also in terms of crushing once pristine, seemingly untouchable reputations. Case in point: famed stock picker Julian Robertson and his Tiger Cub”proteges have ruled the Wall Street jungle for decades. After a down 2016, their reign is being challenged.
As the WSJ reports, for the year, hedge-fund losses at Tiger Global Management LLC were roughly $900 million from a 15.3% loss. Lee Ainslie’s $11 billion Maverick Capital Ltd. was down more than 10% in its flagship fund. Andreas Halvorsen’s $30 billion Viking Global Investors LP and Stephen Mandel Jr.’s Lone Pine Capital LLC were down 4% and 2% respectively in their main funds, while Coatue Management LLC was up 2%. They all badly underperformed the broader market which returned 12%, and is not only actively managed by central banks, but does not request “2 and 20” to jump aboard for the ride, nor does it have minimum capital requirements.
These “Tiger Cubs,” a generation of hedge-fund firms founded by traders who once worked for Mr. Robertson at his Tiger Management, are among the wave of stock hedge funds that fared poorly in 2016.
The MSCI AC World index gained 8.5% for last year excluding December, but equities hedge funds captured just 20% of that return, according to Morgan Stanley. That relative return was the second worst since the 2008 financial crisis.
The chronic bleeding should not come as a surprise to regular readers: ever since 2010 we warned that in the “new paranorma”, where fundamentals have zero impact on asset prices, and only central bank balance sheets matter, those who rely on convential financial metrics to help them invest or, worse, actively short in hopes of a stock – or market – crash, will be lost. Sure enough, those most dependent on fundamentals, or “bottom-up” stock pickers like the Tiger Cubs, were among the hardest hit. These types of managers make their investment decisions by talking to management teams and poring over corporate filings, among other research.
Sadly, almost none of tha matters in a world of pervasively cheap credit which permits zombie companies to continue their existence indefinitely, regardless of growth, balance sheet, or cash fow constraints.
This is how the WSJ explains the death of fundamental analysis-based investing.
last year’s markets were difficult for Tiger Cubs and other bottom-up investors because companies often didn’t rise or fall on their individual fundamentals. Instead, entire sectors of the market traded in lockstep, such as when energy companies rallied during the first half and when financial stocks surged after the presidential election of Donald Trump on expectations of economic growth. Stocks that traditionally were more expensive and had strong growth prospects also sold off, another development that surprised some of these managers. Those stocks had driven funds’ gains last year.
Thank the pervasive shift to passive investing and ETFs that have made thousands of stocks trade as one; also thank HFTs whose only goal these days is to stop out investors as “max pain” levels, and finally thank central banks that the market hasn’t made any sense in years.
Still, some refuse to give up the faith: “It’s too early to say that fundamental stock picking is dead; it’s hard to envision a world with only robots and passive investors,” said Greg Dowling of Cincinnati-based Fund Evaluation Group, which advises on roughly $60 billion of client money. But “opportunities may be more episodic.”
Robertson, who declined to comment through a spokesman, started Tiger in 1980, and the firm went on to become one of the most successful private investment funds in the world, managing more than $22 billion at its peak. He still claims among the best long-term track records in the investment world, at about 25% a year. It all ended in 2000 when the firm returned client money after losses and investor defections.
In retrospect, it is far better that Julian is not active in today’s market, which is a farcical, grotesque version of what he was familiar with in his heyday. Instead, Tiger has become a “seeder” which backs smaller hedge funds, while Robertson’s former employees collectively manage more than $100 billion in some of the industry’s biggest funds. Alas, they also frequently show up in the same trades, a result some of them ascribe to their shared investment philosophy. The resulting hedge fund hotels usually end up in flames once someone yells “fire” and a stampede for the illiquid exists begins.
There is some hope in the new years. Since the election, some traders have predicted the environment for stock picking would improve, as a result of a plunge in cross-equity correlations and a surge in dispersion. Trump’s plan for deficit spending, tough talk on trade and taxes and lighter regulation for banks, pharmaceutical companies and other industries should also mean increased volatility (if not yet). They say that volatility, plus the waning of central banks’ global bond-buying programs, could break the quiet markets traders have complained about in recent years. Some faint glimmers of hope: Coatue, Maverick, Tiger Global and Viking gained in January, with Tiger Global up 5.5%. All those gains may evaporate overnight following another Amazon, Netflix or Valeant implosion.
So the “Tiger Cubs” are taking steps to lock in profits.
Mandel of Lone Pine has become much more focused on whether the positions that the $28 billion firm holds are included in the holdings of ETFs. Lone Pine began collecting data on these issues more systematically last year. That did not help the bloodletting however, and investors redeemed 10% of their money from Lone Pine last year, a higher percentage than in past years.
Viking hired from Goldman Sachs Group Inc.Samer Takriti, “an experienced risk quant and Ph.D.,” to help the firm increase its awareness of forces that can affect its portfolio, Viking said in its year-end letter.
Meanwhile, Maverick, which rolled out a quant effort in 2006 to inform its investment process, is doubling down on losing bets from last year.
“The large majority of investments that were costly will prove to be mistakes of timing rather than judgment,” Mr. Ainslie wrote in his year-end letter dated Jan. 17. Which, of course, is what everyone who throws good money after bad says, hoping for a rebound.
Will 2017 prove to be “different this time” for the hedge fund world in general, and the vaunted Tiger Cubs in particular? Check in in just under 11, soon to be very volatile months for the answer.
- 5 Signs We're Going To War
Submitted by Mac Slavo via SHTFPlan.com,
Is it possible that not everything is as it seems?
While the majority of America is being distracted by shiny things and manipulated into civil unrest over identity politics, Melissa Dykes of The Daily Sheeple warns that an unprecedented push for war is underway.
It’s pretty clear that we’re being taken to war… A plan implemented by George W. Bush after 9/11… continued under Obama… and now kicked up a notch by our new President, Donald Trump.
Watch:
- ALERT: Largest US Forex Broker FXCM Shut Down and Permanently Banned from NFA
It comes as no surprise to many, that the US biggest and baddest Forex broker, FXCM, has been shut down by regulators, and permanently banned from future membership, including the firm itself and several APs, including Dror “Drew” Niv, its founder, says the NFA’s website. We talk about this a lot in our book Splitting Pennies- for those of you who want to understand more about what’s going on here – pickup a copy on Amazon.
FXCM simply could not run an honest business. It’s important for those not in FX to understand that, just because FXCM is a fraud, it doesn’t mean that FX is a fraud. Simply, that FX was a fertile ground for ponzi scammers, criminals, banksters, and the lowest level of white collar criminals. WHY is that you ask? Because FX is so greatly misunderstood, it’s possible for those with slightly higher IQ’s than the average investing public to pull the wool over the eyes of the retail customer, and in FXCM’s case – the regulators too. Well, thanks to the NFA for bringing this case to a close, I’m sure all the victims who have lost money due to FXCMs petty scams and tricks will be comforted to hear the news that at least for our lifetime, they will not be able to continue their games.
And, because of the lack of understanding – legitimate more high brow entities simply don’t want to touch it, and especially retail, it’s like getting their hands dirty. FXCM has shown the world how NOT to run an FX business. FXCM’s collapse is expected, by those in the know. But the good news, at least for customers, your accounts will be safely transferred to Gain Capital.
Here’s a snapshot of the key info from the complaint and decision filed by the NFA:
Here’s how FXCM’s petty scam worked. So, around the time of 2006 – 2008 the dealing desk model of trading against customers was getting old. Too many complaints, and too much competition. Finally, FXCM settled a lawsuit for something a genius lawyer labelled ‘assymetric price slippage’ which is high paid lawyer lingo for screwing the customer. The only thing assymetric about the slippage was the ass, that is, customers always took it in. You think that this is tongue in cheek humor, but this is how FXCM ran their business. The scam sham company they setup to trick regulators they sarcastically named “Effex” a full phonetic spelling of FX. If FXCM was really professional they could have resorted to naming it something regal, such as The Sapiano Organization or Wellington Capital Group, LP. – the name use “Effex” shows how petty and sloppy FXCM’s management is. I mean, some people on Wall St. have that sense of humor. But, customers don’t think it’s so funny when they’re losing money on positive trades. FX is difficult enough – and the fact that FXCM would resort to petty tricks like reversing positive trades in your account weeks after the profit was booked, it made for many angry customers. Yes, they did that. And worse, much worse.
Anyway, so at some point FXCM knew they couldn’t perpetuate their dealing desk operations (trading against the customer) at least in plain sight, which they were. So what they did, they created a model that was truely, STP, or sending orders directly to the banks. However, what they did – in agreement with the banks, FXCM’s order flow was ‘tagged’ electronically, and sent straight into the new fancy dealing machine that was now a super robot on steroids, waiting to take a look at your order and hold it, change it, reject it, slip it – all in the name of another company – NOT FXCM (this is really important to understand how this scam works). So, FXCM could state, that they were not trading against the customer. But they were sending their orders mostly to a firm that did trade against the orders, “Effex” – and this company was not only owned and controlled by FXCM, it was in their office, run by an ex-employee, on FXCM’s computer network, using the same IT. To see a legal perspective of how FXCM’s .. excuse me.. “Effex” dealing operations worked, take a look at this statement from the complaint:
“Hold Timer” is the key here. Traders that use FXCM’s “Trading Station” platform know the various messages when you go to buy, such as ‘please wait’ and ‘order processing’ and so on. What’s happening during that time, they are waiting for a number of things to happen; the market to move in their favor (and in this case, they’ll fill your order at the worst possible price, like the moment you clicked) – or another customer to place the opposite order, where they could capture a huge spread, or for them to receive a huge discounted order on the wholesale market, and fill your order at a slipped price (but extremely profitable for FXCM). It’s true – this is a money making machine! But, like the Casinos, it was FXCM getting rich, not the customer.
The full complaint makes for great reading for those who want to understand – from a compliance and legal perspective – how the inner workings of a dealing desk broker work. Note several key points that 1) FXCM was not a dealing desk broker (no broker will admit to using this model, they are all STP.. yeah right) 2) FXCM had their head up their rear so far they didn’t have an exit plan – they thought they were above scrutiny, because NFA was in their pocket. Well, maybe they were – maybe this is all because of Trump! Did I write that, or it just materialized on the screen – …
In any event, traders should at least say “Thank You” to the NFA for finally bringing down this huge petty scam, that we can start to rebuild from the rubble, and build a real FX business, based on profitable FX alpha generating strategies, sophistocated liquidity algorithms that can manage risk in a complex market, and computing power.
To contrast that statement, FXCM had an employee policy, to hire good sounding NYU grads that didn’t know about finance and were good on the phones. FXCM invested zero in R&D. Their IT was horrendous – except of course, their dealing software, which they invested millions in.
Thank you to all the participants of this case, to the NFA, to Trump for creating a pro-business environment, thank you to the clients who started the class-action against FXCM that led to the ass-slippage case; now let’s create a REAL FX market!
To learn more about the inner workings of FX and how to survive, checkout FC Trading Academy. To read a good book on the topic of FX – checkout Splitting Pennies – Understanding Forex.
- Virginia University Publishes "LGBTQQIAAPP Terminology Guide" To Help Snowflakes Determine Their Gender
The Virginia Commonwealth University’s Office of Multicultural Affairs has decided to publish a very helpful “LBGTQQIAAPP Terminology Guide“ to assist their confused snowflakes with the very complicated task of determining their own gender. While the guide may seem fairly thorough, VCU notes that gender “language is constantly evolving, and these definitions are not by any means comprehensive” before warning that “terms of self-identification should not be used to label others without their consent.”
Luckily, the terminology guide even has some very easy to understand illustrations to help students debunk the lifelong, evil myth that gender is somehow binary…
Here are some of the definitions that we found particularly helpful and we sincerely hope that our readers will take this opportunity to read, learn and reflect on their lives of “Cis Privilege.” And for those of you still living in the dark ages, Cisgendered refers to the 99.7% of the population where “a person’s gender identity, gender expression, and biological sex” all miraculously align.
Biological Sex/ Natal Sex/ Birth Sex/ Sex: The medical term used for the identification of male, female, or intersex sex i.e. chromosomes, gonads, and/or genitalia
Cisgender/ Cis/ Gender Normative/ Gender Straight: a person who has a normative gender presentation, when a person’s gender identity, gender expression, and biological sex align. A person who is not transgender.
Cisgender Privilege/ Cis privilege: The societal assumption and norm that all people are cisgender. There are basic civil rights and social privileges that a cisgendered person automatically receives that are systematically denied to transgender persons, simply because of their gender identity/ gender presentation
Demisexual: a person who is not immediately sexually attracted to other people. A person who’s sexual attraction to another person develops after developing a relationship (not necessarily romantic). Often considered within the asexuality spectrum
Gender Confirmation surgery: any surgery to make a person’s outward appearance more closely align with their gender rather than biological sex, also known as gender reassignment surgery, many have transitioned to Gender Confirmation Surgery as it utilizes more positive language.
Heterosexual Privilege/Heteronormativity: The societal assumption and norm that all people are heterosexual. There are basic civil rights and social privileges that a heterosexual person automatically receives that are systematically denied to queer persons, simply because of their sexual orientation.
Of course, while VCU asserts that there are “basic civil rights and social privileges” afforded to “cisgendered” people that are constantly denied other people based on their “gender identity/ gender presentation”, the university fails to define exactly which privileges to which they are referring.
For those of you looking for even more enlightenment on this very important topic plaguing roughly 0.3% of the population, please see the complete LBGTQQIAAPP Terminology Guide below:
- Debt-pocalypse Beckons As US Consumer Bankruptcies Do Something They Haven't Done In 7 Years
Submitted by Michael Snyder via The Economic Collapse blog,
When debt grows much faster than GDP for an extended period of time, it is inevitable that a good portion of that debt will start to go bad at some point. We witnessed a perfect example of this in 2008, and now it is starting to happen again. Commercial bankruptcies have been rising on a year-over-year basis since late 2015, and this is something that I have written about previously, but now consumer bankruptcies are also increasing. In fact, we have just witnessed U.S. consumer bankruptcies do something that they haven’t done in nearly 7 years. The following comes from Wolf Richter…
US bankruptcy filings by consumers rose 5.4% in January, compared to January last year, to 52,421 according to the American Bankruptcy Institute. In December, they’d already risen 4.5% from a year earlier. This was the first time that consumer bankruptcies increased back-to-back since 2010.
However, business bankruptcies began to surge in November 2015 and continued surging on a year-over-year basis in 2016, to reach a full-year total of 37,823 filings, up 26% from the prior year and the highest since 2014.
Of course consumer bankruptcies are still much lower than they were during the last financial crisis, but what this could mean is that we have reached a turning point.
For years, the Federal Reserve has been encouraging reckless borrowing and spending by pushing interest rates to ultra-low levels. Unfortunately, this created an absolutely enormous debt bubble, and now that debt bubble is beginning to burst. Here is more from Wolf Richter…
The dizzying borrowing by consumers and businesses that the Fed with its ultra-low interest rates and in its infinite wisdom has purposefully encouraged to fuel economic growth, if any, and to inflate asset prices, has caused debt to pile up. That debt is now eating up cash flows needed for other things, and this is causing pressures, just when interest rates have begun to rise, which will make refinancing this debt more expensive and, for a rising number of consumers and businesses, impossible. And so, the legacy of this binge will haunt the economy – and creditors – for years to come.
Despite all of the economic optimism that is out there right now, the truth is that U.S. consumers are tapped out.
If the U.S. economy truly was doing great, major retailers would not be closing hundreds of stores. Sears, Macy’s and a whole host of other big retailers are closing stores because those stores are losing money. It truly is a “retail apocalypse“, and this trend is not going to turn around until U.S. consumers start to become healthier financially.
We also see signs of trouble in the auto sales numbers. Compared to 2016, sales were way down in January this year…
Compared to January last year, car sales collapsed for all three US automakers, and the largest Japanese automakers didn’t do much better:
- GM -21.1%
- Ford -17.5%
- Fiat Chrysler -35.8%
- Toyota -19.9%
- Honda -10.7%
- Nissan -9.0%
For all automakers combined, car sales sagged 12.2% from a year ago.
A lot of attention is given to our 20 trillion dollar national debt, and rightly so, but a similar amount of attention should be paid to the fact that U.S. households are collectively more than 12 trillion dollars in debt.
About two-thirds of the nation is essentially living paycheck to paycheck. Most families really struggle to pay the bills from month to month, and all it would take is a major event such as a job loss or a significant illness to plunge them into financial oblivion.
In America today we are told that the secret to success is a college education, but most young Americans have to go deep into debt to afford such an education.
As a result, most college graduates start out life in the “real world” with a mountain of debt. And since many of them never find the “good jobs” that they were promised, repayment of that debt becomes a very big issue. In fact, the Wall Street Journal has discovered that student loan repayment rates are much worse than we were being told…
Last Friday, the Education Department released a memo saying that it had overstated student loan repayment rates at most colleges and trade schools and provided updated numbers.
When The Wall Street Journal analyzed the new numbers, the data revealed that the Department previously had inflated the repayment rates for 99.8% of all colleges and trade schools in the country.
The new analysis shows that at more than 1,000 colleges and trade schools, or about a quarter of the total, at least half the students had defaulted or failed to pay down at least $1 on their debt within seven years.
If you do find yourself deep in debt, a lot of families have found success by following a plan that was pioneered by author Dave Ramsey. His “Debt Snowball Plan” really works, but you have to be committed to it.
Getting out of debt can be tremendously freeing. So many people spend so many sleepless nights consumed by financial stress, but it doesn’t have to be that way.
Most of us have had to go into debt for some reason or another, and not all debt is bad debt. For example, very few of us would be able to own a home without getting a mortgage, and usually mortgages come with very low interest rates these days.
But other forms of debt (such as credit card debt or payday loans) can be financially crippling. When it comes to eliminating debt, it is often a really good idea to start with the most toxic forms of debt first.
It has been said that the borrower is the servant of the lender, and you don’t want to spend the best years of your life making somebody else rich.
Whether economic conditions turn out to be good or bad in 2017, the truth is that each one of us should be trying to do what we can to get out of debt.
Unfortunately, a lot of people never seem to learn from the past, and I have a feeling that both consumer and commercial bankruptcies will continue to rise throughout the rest of this year.
- Google Emerges As Financial Sponsor Behind Tech Giants' Anti-Trump Crusade
Earlier today, we explained why billionaire Democrat, and Clinton supporter, George Soros is the likely source of funding behind the rapidly spreading – and costly – Trump “Muslim Ban” lawsuits.
Moments ago, we found the other “source of funds” missing link in the ongoing anti-Trump executive order campaign. As Bloomberg reports, the company footing bill for the legal brief signed by more than 120 mostly tech companies that oppose President Donald Trump’s executive order on immigration, is none other than the Company which offered Hillary Clinton its “strategic plan” to help Democrats win the election, and track voters, and which hired former Clinton Foundation CEO, Eric Braverman: Google (technically, its parent company Alphabet).
Eventually, the funding – which should be a nominal matter for most of the tech giants who are on a crusade to keep cheap H1-B workers – may end up being distributed: other companies have offered to fund a share of the fee, Bloomberg writes, and Alphabet, which coordinated the effort, plans to accept the offers. However, for now it’s only Alphabet who is paying Washington, D.C.-based law firm Mayer Brown LLP to handle the friend-of-the-court brief.
The rest of the story is familiar, as per our earlier report, only instead of only 97 companies, the list has since grown to 128.
The tech companies emphasized the economic and social contribution made by immigrants in their arguments filed Sunday in the U.S. Court of Appeals in San Francisco. The companies support a lawsuit by the states of Washington and Minnesota seeking to stop Trump’s executive order. Apple Inc., Airbnb Inc., Facebook Inc., Microsoft Corp., Tesla Inc. Intel Corp., Lyft Inc., Netflix Inc., Snap Inc. and Uber Technologies Inc. are among the technology companies that participated. Businesses beyond the tech industry who signed on include Levi Strauss & Co. and yogurt maker Chobani.
“Immigrants make many of the Nation’s greatest discoveries, and create some of the country’s most innovative and iconic companies,” the brief states. “America has long recognized the importance of protecting ourselves against those who would do us harm. But it has done so while maintaining our fundamental commitment to welcoming immigrants—through increased background checks and other controls on people seeking to enter our country.”
So far Trump has been uncharacteristically quiet in his interaction with the rebellious tech giants, whom he invted one month ago to the Trump Tower as president-elect to lay the ground rules for interaction. Frankly, it would be a surprise, if he let the growing rumble of Silicon Valley discontent continue without at least opining about it on twitter at least once. For now, however, Trump is more focused on making the choice for America clear: either you are with my executive order, or if there is a terrorist attack, blame the judicial system as he once again tweeted just moments ago.
The threat from radical Islamic terrorism is very real, just look at what is happening in Europe and the Middle-East. Courts must act fast!
— Donald J. Trump (@realDonaldTrump) February 7, 2017
- Furious California Leaders Slam "Cruel, Unconstitutional" Trump Over Threat To Pull Federal Money
In a narrative more befitting of kindergarten, and certainly not grown adults (politicans are exempt), one day after from Trump warned he would defund California if the state passed a bill to make itself a de facto “sanctuary state”, saying the state was “out of control”, furious state leaders have responded that, drumroll, they are not “out of control.”
Hoping to make their case stron, state politicans pointed at their balanced budget and high jobs numbers in the latest dustup between the populist Republican and the progressive state. Quoted by Reuters, the state’s top Democrats called Trump “cruel” and his proposals unconstitutional, after the businessman-turned-politician threatened to withhold federal funding from the most populous U.S. state if lawmakers passed a bill protecting undocumented immigrants. “President Trump’s threat to weaponize federal funding is not only unconstitutional but emblematic of the cruelty he seeks to impose on our most vulnerable communities,” state Senate Pro Tem Kevin de Leon, a Democrat from Los Angeles, said in a statement on Monday.
The latest war of words between Trump and Democratic leaders in California, where voters chose his opponent, Hillary Clinton, two-to-one in November’s election, began Sunday, in an interview between Trump and Fox News host Bill O’Reilly. During the interview, O’Reilly asked Trump about a bill in the state legislature, authored by de Leon, to ban law enforcement agencies in the state from cooperating with immigration officials in most circumstances. Cities who have enacted similar bans are known as sanctuary cities, and de Leon’s bill, if passed and signed into law by Democratic Governor Jerry Brown, would effectively extend such rules to the entire state.
“I think it’s ridiculous. Sanctuary cities, as you know, I’m very much opposed to sanctuary cities. They breed crime, there’s a lot of problems,” Trump said.
“If we have to, we’ll defund,” Trump said in an interview with Fox News host Bill O’Reilly before the Super Bowl. “We give tremendous amounts of money to California, California in many ways is out of control, as you know.”
Trump told O’Reilly that he didn’t want to defund a state or a city and would like to give them “the money they need to properly operate.” But the president added that “if they’re going to have sanctuary cities, we may have to do that. Certainly that would be a weapon.”
California’s mostly democratic leadership was not amused. State Assembly Speaker Anthony Rendon, an L.A.-area Democrat, said the state has the most manufacturing jobs in the nation, and produces a quarter of the country’s food. “If this is what Donald Trump thinks is ‘out of control,’ I’d suggest other states should be more like us,” Rendon said.
Sunday’s shot across the bow of Sacramento followed a similar threat last weak, when Trump threatened to withhold federal funding from the University of California at Berkeley, where violent rioting led to the cancellation of a speech by famous “alt-right” winger Milo Yiannopoulos.
Experts have said it would be difficult for the President to withhold funds from either the university or the state. Court rulings have limited the power of the president to punish states by withholding funds, and most appropriations come from the Congress and not the executive branch. Then again, this is Trump we are talking about, and while it may ultimately indeed prove impossible, should this particular animosity between Trump and the state continue, Trump will certainly try…
Ultimately, California’s fate may be in its own hands, and in its own territory.
As a reminder, a proposal for California to break away from the United States has been submitted to the Secretary of State’s Office in the state capital. If it qualifies, it could trigger a vote on whether the most populous US state should become a separate nation. The group behind the proposal, Yes California Independence Campaign, was cleared on Thursday by Californian Secretary of State Alex Padilla to begin the bid to collect some 600,000 voter signatures required to put the ambitious plan on the ballot, AP reported.
The initiative would ask voters to repeal part of the state constitution that declares California an “inseparable part of the United States of America.” Being a US state is “no longer serving California’s best interests,” the movement claims.
“Not only is California forced to subsidize this massive military budget with our taxes, but Californians are sent off to fight in wars that often do more to perpetuate terrorism than to abate it. The only reason terrorists might want to attack us is because we are part of the United States and are guilty by association. Not being a part of that country will make California a less likely target of retaliation by its enemies,” the campaign argues, among other things.
“America already hates California, and America votes on emotions,” Marcus Evans, vice-president of Yes California told to the Los Angeles Times. “I think we’d have the votes today if we held it,” he added.
Since California must submit the valid voter signatures by July 25 to qualify for the November 2018 ballot, it is shaping up to be an especially volatile summer.
- Which Assets Are Most Likely To Survive The "System Reset"?
Submitted by Charles Hugh-Smith via OfTwoMinds blog,
Your skills, knowledge and and social capital will emerge unscathed on the other side of the re-set wormhole. Your financial assets held in centrally controlled institutions will not.
Longtime correspondent C.A. recently asked a question every American household should be asking: which assets are most likely to survive the "system re-set" that is now inevitable? It's a question of great import because not all assets are equal in terms of survivability in crisis, when the rules change without advance notice.
If you doubt the inevitability of a system implosion/re-set, please read Is America In A Bubble (And Can It Ever Return To "Normal")? This brief essay presents charts that reveal a sobering economic reality: America is now dependent on multiple asset bubbles never popping–something history suggests is not possible.
It isn't just a financial re-set that's inevitable–it's a political and social re-set as well. For more on why this is so, please consult my short book Why Our Status Quo Failed and Is Beyond Reform.
The charts below describe the key dynamics driving a system re-set. Earned income (wages) as a share of GDP has been falling for decades: this means labor is receiving a diminishing share of economic growth. Since costs and debt continue rising while incomes are declining or stagnating, this asymmetry eventually leads to insolvency.
The "fix" for insolvency has been higher debt and debt-based spending–in essence, borrowing from future income to fund more consumption today. But each unit of new debt is generating less economic activity/growth. This is called diminishing returns: eventually the costs of servicing the additional debt exceed the increasingly trivial gains.
What happens when the bubbles pop, despite massive central bank/state interventions? The entire socio-political/financial system goes through a "system re-set" in which all the fantasy-based valuations, political denials, false promises and fraudulent claims collapse in a heap.
In a crisis, the privileged Elites will change the rules in a desperate attempt to expropriate the income and wealth of the bottom 99.5% to preserve their own power.
The trick is to do so in ways that won't spark an immediate political insurrection.
We can better understand their policy choices by asking: What's easy to expropriate, what's difficult to expropriate?
Those assets that are easy to expropriate will be expropriated first. Those that are difficult to expropriate are far less likely to be grabbed, due to the high costs of expropriation and the high risks of sparking a political insurrection.
History suggests the privileged Elites will pursue two basic strategies to expropriate the income and wealth of non-elites:
1. They will expropriate what is easy to expropriate: financial assets in centralized institutions the state controls: banks, brokerage accounts, insurance policies, etc.
2. They will use the time-honored "stealth expropriation" methods: inflation and taxes.
Any "money" held in a centrally controlled institution can be expropriated overnight. The rules will change without warning, so there will be no opportunity to escape the system.
Direct expropriation takes many forms. Your funds could be "bailed-in" (transferred to the bank). Large currency bills could be declared worthless. IRA and 401K accounts could be transferred into government bonds, to "protect the account owners from risky investments." (Naturally, any expropriation will be presented as "for your own good.")
Or a new currency could be issued that strips away 90% of the purchasing power of the old currency. It could be a New Dollar, an SDR global currency, or a state-issued cryptocurrency. The point is to strip away 90% of the wealth held in the old currency.
Indirect "stealth" expropriation has several forms: slow currency devaluation, also known as inflation, or higher taxes and junk fees (not called taxes, but you receive no additional value for the higher fees).
The end result of these policies is you may receive the $2,000 monthly pension you were promised, but after inflation, currency devaluation and taxes, your real purchasing power is $100 in today's currency.
So what's difficult to expropriate? I present some answers in my books An Unconventional Guide to Investing in Troubled Times and Get a Job, Build a Real Career and Defy a Bewildering Economy.
It's impossible to expropriate one's skills, experience and social capital. These are intangible forms of capital and so they cannot be confiscated like gold, currency, land, etc.
Land and homes are difficult to expropriate for two reasons: private property is the backbone of capitalism and democracy, and the state confiscating private property would very likely spark a political insurrection that would diminish or threaten the power and wealth of the privileged Elites.
Secondly, it's very costly for the state to maintain the productive output of real property it has confiscated. Guards must be posted, sabotage repaired, and the immense difficulties of coercing a rebellious populace to continue working what they once owned for the benefit of the state and its privileged Elites must be solved and paid for.
The state can expropriate farms, orchards and workshops for back taxes (or some similar extra-legal methodology), but how do you force people to work these properties productively?
As a general rule, whatever the super-wealthy own will be protected from expropriation. Private real property is the foundation of the Elites' wealth, and while the land of debt-serfs may well be confiscated for back taxes (the wealthy will buy exemptions from rising taxes), those who own land and buildings free and clear constitute a political force to be reckoned with.
As I discuss in my book Resistance, Revolution, Liberation: A Model for Positive Change, there's one other asset the state and its ruling Elites cannot expropriate: community.
The state will also have difficulty confiscating assets that are outside its reach. This explains the propularity of owning assets in other nations, and the debate over cryptocurrencies: will states be able to confiscate all cryptocurrencie at will, or is that technically unfeasible?
The main takeaway is this: your skills, knowledge and and social capital will emerge unscathed on the other side of the re-set wormhole. Land and real property you own free and clear (no debt) is likely to remain in your possession, as long as you can pay soaring taxes/junk fees during the crisis phase. Your financial assets held in centrally controlled institutions will not make it through unscathed; they are simply too easy for central authorities to expropriate.
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