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Well, that escalated quickly…
Gold is clinging to unch, bonds are down, and now crude has crashed back into the red post-Yellen…
Only stocks remain positive – which makes perfect sense given Yellen's implied downgrade of every positive economic indicator (and the 22.5x GAAP P/E).
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For those wondering why Trump rallies tend to devolve to pugilistic matches, where even belligerent 15-year-old protesting (or perhaps “provocative” is a better word) girls end up getting pepper sprayed much to the media’s fascination, the answer is Craig’s List ads such as the one below, in which allegedly “I’m feelin’ the Bern“-affiliated organizers provide paid positions for protesters at Trump rallies, and which provide not only shuttle buses, parking, and signs (as well as time cards) but also hand out $15/hour for said protest activity “due to the economic inequality.“
Well that’s one way to cover the “minimum wage.”
This particular ad has since been removed by CraigsList, although as the Daily Caller recently pointed out, this is a recurring pattern as anti-Trump protesters openly admit answering Craigslist ads and getting paid to protest at Trump rallies. This is what the DC said previously:
The Establishment on both the left and the right, who want to disenfranchise the millions of Republican voters who support Donald Trump, have blamed the staged riots near Trump rallies on Trump or on Bernie Sanders. That’s like blaming the Russians for the Reichstag Fire. Bernie has little to do with these manufactured protests. This is a Clinton operation, a faux protest.
False flag operations have long been common in politics, but these riots are poisonous to the electorate, intentionally designed to turn violent and stifle free speech.
This free speech-busting goon squad operation is directed by supporters of Hillary Clinton. It is paid for mostly by George Soros and MoveOn.org and pushed by David Brock at Media Matters for America. It’s also funded by reclusive billionaire Jonathan Lewis, who was identified by the Miami New Times as a “mystery man.” He inherited roughly a billion dollars from his father Peter Lewis (founder of Progressive Insurance Company).
A march and demonstration against Trump at Trump Tower essentially fizzled Saturday when only 500 “protesters” of the promised 5000 showed up. Infiltrating the crowd, I learned most were from MoveOn or the Occupy movement. Soap was definitely in short supply in this crowd. Several admitted answering a Craig’s list ad paying $16.00 an hour for protesters.
Hillary understands that Trump would lose the votes of certain establishment Republicans if he were the nominee. On the other hand, it doesn’t matter, because of his crossover outreach. In Michigan, Democrats and independents who have lost their jobs because of disastrous globalist trade deals like NAFTA are lining up to vote for Donald.
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America used to be the land of opportunity and optimism. Now opportunity is seen as the preserve of the elite: two-thirds of Americans believe the economy is rigged in favour of vested interests. And optimism has turned to anger. Voters’ fury fuels the insurgencies of Donald Trump and Bernie Sanders and weakens insiders like Hillary Clinton.
The campaigns have found plenty of things to blame, from free-trade deals to the recklessness of Wall Street. But one problem with American capitalism has been overlooked: a corrosive lack of competition. The naughty secret of American firms is that life at home is much easier: their returns on equity are 40% higher in the United States than they are abroad. Aggregate domestic profits are at near-record levels relative to GDP. America is meant to be a temple of free enterprise. It isn’t.
– From the recent Economist article: The Problem with Profits
In the 1970’s, Goldman Sachs CEO Gus Levy famously encouraged his employees to be “long-term greedy.” In order to understand how fall we have fallen as an economy and culture, it’s important to understand the meaning of the phrase and reflect upon it.
“Long-term greedy” implies two very important principles that define a well functioning and ethical free market economy. First, is the unrepentant belief that earning a good profit and striving for financial success is a reasonable and admirable goal for both individuals and corporations. Second, is the understanding that such financial success should be earned, not stolen. If one’s focus is the long-term, the implication is that you’re committing yourself to building something real, and that the marketplace will ultimately reward you handsomely for your product or service.
Throughout my childhood, and much of my adult life, I naively assumed this was the way the U.S. economy functioned. This was partly a result of propaganda, and partly a result of it still being somewhat true. What’s become abundantly clear; however, is that from my birth in 1978 to the present day, the U.S. economy has been, gradually at first, and then rapidly transformed into a rigged, oligarch-dominated, crony Banana Republic system.
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With Wisconsin becoming make-or-break for the avoidance of a contested convention, it appears, based on PredictIt's odds, that someone suddenly knows something about the result and has bet heavily on Cruz to win…
Trump's odds have collapsed in the last hour (on yuuge volume)…
As "someone" is suddenly betting heavily on Cruz to win…
Is this self-fulfilling – spend some dollars to give impression of Cruz success? Or is this "insider" trading? Or did the public just decide now was the time to go all-in on Cruz?
via Zero Hedge http://ift.tt/1RqPwW3 Tyler Durden
“For too long we’ve viewed drug addiction through the lens of criminal justice,” President Obama said yesterday at a conference in Atlanta. “The most important thing to do is reduce demand. And the only way to do that is to provide treatment—to see it as a public health problem and not a criminal problem.”
At least one expert totally disagrees. Earlier this month at South by Southwest Interactive (SXSWi), Columbia University neuropsychopharamacologist Carl Hart gave a talk called “Mythbusting the Drug War With Science” in which he explicitly made the case that the notion that “drug addiction is a health problem that requires treatment” is exactly the wrong way to look at the use of drugs in the United States.
“Politicians today, whether Republican or Democrat, are comfortable with saying that we don’t want to send people to jail for drugs; we will offer them treatment.” Hart said in Austin. But “the vast majority of people don’t need treatment. We need better public education, and more realistic education. And we’re not getting that.”
Why does he say most people don’t need treatment? Because—contrary to widespread perceptions—the vast majority of drug users aren’t addicts. “When I say drug abuse and drug addiction, I’m thinking of people whose psycho-social functioning is disrupted,” he said later in the talk. But for more than three-quarters of drug users (and we’re not just talking about marijuana here, either), that description doesn’t apply.
This overturns the conventional wisdom on drug addiction, but Hart thinks that’s a good thing. We’ve all been fed a diet of panic-inducing misinformation about what drugs actually do to our brains, he says.
Most of us were taught that drugs like cocaine are so addictive that a rat in a laboratory experiment will continue to press a lever to receive the substance—to the exclusion of all its other physical needs—until it actually dies. Hart said at first even he believed that finding to be true. But it turns out, those studies weren’t what they were cracked up to be.
“When you have the rat in a cage alone, and there’s nothing else for the rat to do, the rat will repeatedly choose to take cocaine,” he said. “That’s logical. If the only thing you had to do in your life was press a lever to receive cocaine, what are you doing? I hope you’re pressing for the cocaine.”
But if additional stimuli are introduced to the environment, the finding completely falls apart.
“When you enrich the rat’s environment such that you provide something like a sweet drink, or a sexually receptive mate, or some other alternative, the rat doesn’t repeatedly take cocaine,” he explained. “In fact, it’s difficult to get the rat to self-administer or press the lever to take cocaine if you provide the rat with food!”
When he tried to replicate the experiment with drug-addicted humans instead of rats, he found they too behaved logically, choosing, say, $20 in cash as opposed to a $10 hit of coke. “This ‘hijacking’ of the brain’s reward system, that’s a nice sexy metaphor,” he said. “But what we said was that cocaine addicts could not inhibit certain types of responses. They could not delay gratification. They had cognitive impairment such that they couldn’t engage in this long-term planning.” Yet repeatedly in tests, they did.
Once you realize that drugs don’t actually rewire people’s brains, making them unable to function, you can start to focus on things that matter more—like preventing overdoses. The way to do that, according to Hart, is through educational initiatives, not treatment programs.
“Now, if we are concerned about overdose deaths, we need to know how these people are dying,” he said. “The vast majority [75 percent] of people who die from a heroin-related overdose do so because they combine it with another sedative, like alcohol or benzodiazepines….The public health education message is simple: If you’re going to use heroin or another opioid, don’t combine it with another sedative.”
The message should obviously vary according to the substance in question and the population you’re trying to educate. When talking to young people about marijuana, for instance, we should teach them not to start out with large doses. “And if you do and you get anxious, be cool,” he said. “You’re going to be OK!”
The main problem with methamphetamines, meanwhile, is that they disrupt people’s sleep and reduce their food intake. “Sleep is probably the most important biological function. If you don’t get enough sleep, you can get psychiatric illnesses and all types of different illnesses,” he said. “So when I think about education with methamphetamines, you want to make sure people are sleeping. You want to make sure people are eating. You also want to make sure people understand the risks in terms of cardiovascular concerns: If you have a cardiovascular-compromised system, it’s probably not the drug for you.”
These are all examples of harm reduction, something Hart believes we need a whole lot more of. “We can help keep people safe,” he said. “We haven’t made much progress in this regard, but we’re pretending that we are more compassionate people…by saying that we’ll give them treatment.”
***
Reason TV talked to Dr. Hart back in 2013. Watch the video here:
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There has been an odd shift when it comes to US sentiment toward home ownership: while in the past, the higher home prices rose the greater the demand was for housing (leading ultimately to the housing debt bubble of 2006), this time around we are getting increasingly more frequent indications of just the opposite.
Some have started to notice: as we noted one week ago, in its traditionally cheerful assessment of the US housing market, the NAR’s Larry Yun snuck in an unexpected warning:
“Home prices ascending near or above double-digit appreciation aren’t healthy – especially considering the fact that household income and wages are barely rising.”
He did it again just a few days later:
“The overall demand for buying is still solid entering the busy spring season, but home prices and rents outpacing wages and anxiety about the health of the economy are holding back a segment of would-be buyers.”
This is about as close to a warning that the US housing market is back into bubble territory as one can hope to get from the NAR. To be sure, we noted this surprising development one week ago in “For The Average American, Owning A Home Is Increasingly Unaffordable.”
Recently MarketWatch came to the same conclusion noting that “there’s a paradox in Monday’s existing-home-sales data. Sales slid 7.1% to the lowest pace since November, the National Association of Realtors said. NAR has warned for many months that low levels of supply, which are pushing prices ever higher, will eventually cripple the market.”
February’s decline may be a sign that the Realtors’ fears are coming true, although it may still turn out to be a temporary blip caused by weather, new closing regulations, and the difficulties of adjusting data to account for all those anomalies. Still, as NAR Chief Economist Lawrence Yun said in a statement, “the main issue continues to be a supply and affordability problem. Finding the right property at an affordable price is burdening many potential buyers.”
That may sound obvious: if you can’t afford the few limited options available on the market, you’d probably give up too. It also tracks with a survey NAR published last week, which found that the share of current renters who say now is a good time to buy fell in the most recent quarter.
But it’s worth remembering, as Yun pointed out in a press conference Monday morning, that it wasn’t too long ago that higher prices drew more buyers in, rather than shutting them out.
It goes on to observe that this phenomenon was documented by Robert Shiller. In a 2007 paper, Shiller described the bubble mentality as “a feedback mechanism operating through public observations of price increases and public expectations of future price increases. The feedback can also be described as a social epidemic, where certain public conceptions and ideas lead to emotional speculative interest in the markets and, therefore, to prices increase.” A few paragraphs later, Shiller wrote, “That the recent speculative boom has generated high expectations for future home price increases is indisputable.”
In other words, a buying scramble driven by manic euphoria to jump on the latest rising-price bandwagon.
But that is no longer the case: “In the February Fannie Mae Home Purchase Sentiment Index, survey respondents said they expect home prices to rise 1.7%. One year ago, respondents forecast prices would rise 2.5%. In the 12 months to February, the actual price gain was 4.4%, NAR said Monday, but in recent months the yearly increase has been as high as 8.2%.”
Additionally, homeowners have become less confident about the value of the equity they have in their homes. That means they’re no longer cashing out to finance other spending, as they did in the bubble years. It also means they may not understand how much their homes could command on the market, making them less likely to list and worsening the supply problem.
* * *
But ultimately it all come down to what is the fair value of housing. And according to a Bank of America research report, the recent trends in which ordinary Americans are left behind from the “American Dream” will persist for one simple reason: “home prices are currently overvalued by 14% on the national level.”
This is what BofA’s chief economist Michelle Meyer says:
In order to gauge the ‘fair value” of home prices, we typically compare prices to the trend in income. The logic is simple – the more income one earns, the more housing he/she can access. However, prices will occasionally diverge from income, as we are experiencing now and clearly did during the early 2000s. As we have been arguing, home prices are currently overvalued – by our estimates 14% on a national level.
It is useful to explore the reasons for overvaluation to understand the likelihood of a correction. During the early 2000s, the strong appreciation in home prices reflected the combination of greater availability of credit and unanchored expectations for future home prices. Today, the gain seems to be more a function of the price of credit – in other words, the level of rates. It is not an environment of high leverage in the mortgage market.
According to IMF research, this is an important distinction. In recent research under the Global Housing Watch umbrella, IMF economists argue that a distinguishing feature of real estate busts is the “coincidence between the housing boom and the rapid increase in leverage and exposure of households and financial intermediaries.” During this past crisis, of the 23 countries with “twin booms” in real estate and credit, they found that 21 of those countries had a severe downturn in housing and the economy. The 7 countries that just had a housing boom without excess leverage, only 2 went through a systemic crisis.
The US is not alone in returning to a housing market where prices appear overvalued. The IMF identifies a number of other major economies with prices in excess of income (Chart 5). The worst offender is New Zealand followed by Germany. Indeed, over the past year, 33 out of the 51 countries in their global housing price index showed an increase in home prices. The IMF’s aggregate for global home prices shows that prices are up 1.7% yoy as of 3Q15, assuming equal weights for countries (Chart 6).
Bottom line: lessons have been learned regarding household leverage. However, there has still been an impressive recovery in home prices in many countries.
There is another, simpler explanation: perhaps it is not concerns about future home appreciation, perhaps American incomes are simply not growing anywhere as fast to give them comfort that there will be other greater fools to whom the newly purchased house can be flipped. Couple with the ongoing lack of easy credit for most Americans to fill the purchase price gap, and it becomes very clear why the US housing market continues to be driven higher mostly by all-cash foreign buyers spluring on ultraluxury properties in hopes of parking cash indefinitely now that the Swiss banking model is defunct.
The good news, if only for the Fed, rent inflation will continue to soar in the coming months and years as the best households can hope for is to pay month to month for a roof above their heads, which is troubling because as we noted back in January, “Rental Rates Have Reached Apocalyptic Levels.” With the Fed’s ongoing easy money policies, rents will only keep rising and soaking up even more of US disposable income. And then the Fed’s economists will wonder why spending on non-core items continues to decling with every passing year.
via Zero Hedge http://ift.tt/1ZL27p7 Tyler Durden
In recent weeks, the stock of IBM has staged a dramatic rebound surging from a February 11 low of $118 to $150 today, on what we previously assumed had to be another long-overdue bout of stock buybacks. However, for that to make sense, the company – already at risk of being downgraded if it did not take further cost-cutting measures to offset the additional debt interest expense – would need to engage in another round of mass layoffs.
This is precisely what happened moments ago when Germany press reported that Big Blue is cutting some 1000 jobs in Germany.
More details, Google translated from Morgenpost.
The IT group IBM apparently is planning massive job cuts in Germany. According to the trade union Verdi, the Group has informed on Wednesday about the planned reduction of nearly 1,000 jobs by March 2017th This was announced by Verdi in a newsletter. Primarily affects service segments. The group had invited the workers’ representatives to negotiations for a social plan and balance of interests. In Hannover, a region should be shut down with about 200 employees, said a Verdi representatives. The Hanover stay but generally preserved.
“IBM has informed the participation and invited to negotiations,” confirmed an IBM spokesman. A hiring freeze, it will not give: IBM will continue to hire employees with key skills. For years, the IT group struggling with a decline in sales. IBM is in a time-tag, to be replaced by new one when the old segments such as the sale of servers or infrastructure.
Nationwide 16,500 employees
Trade unionists feared already last year the job losses in the IT group in Germany. At that time there was talk of 2,500 jobs over the next two years. With the new announcement is not yet clear that it will not come to a further job cuts, said the Verdi representatives. Nationwide, the US group most recently employed about 16,500 employees. 2009 there were still 21,100 employees. (Dpa)
So with one of the key staples of the new abnormal back, namely “bad news = good news”, we are happy to see that the other one, replacing employees for buybacks, never left.
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North Carolina Attorney General Roy Cooper is refusing to defend against a lawsuit challenging North Carolina’s controversial new law that overrules Charlotte’s LGBT anti-discrimination protections and requires transgender individuals to use the bathrooms of their birth sex in schools and government buildings.
This matters politically because Cooper, a Democrat, is running to unseat North Carolina’s governor, Pat McCrory, who is vocally defending it and complaining that news coverage of the law’s impact is inaccurate.
To be clear, it’s absolutely wrong for McCrory to be claiming that it doesn’t affect existing civil rights ordinances in cities within North Carolina. That’s absolutely what it does by blocking the ability of cities or counties to expand antidiscrimination ordinances to categories not covered by state law. Whether or not those ordinances are appropriate or needed is another matter entirely, but the legislation literally says state discrimination laws (and the limits on them) preempt municipal laws. (I wrote more about the law here. Nick Gillespie provides some additional analysis here).
As with Houston, the passage of the law was a backlash against Charlotte’s attempt to require accommodation of transgender folks to choose their bathrooms. McCrory is correct when he complains that the state law has been represented as interfering in what choices private businesses make. It does not prohibit businesses from either having their own policies against LGBT discrimination or from private businesses accommodating transgender customers in whichever bathroom.
But it does require schools and government facilities to police their bathrooms and require transgender people to use the bathrooms and locker rooms of the sex listed on their birth certificate. So in that sense, the law standardizes a refusal by the government to respect the identity of the citizens that it is supposed to represent.
What Cooper’s stand does is turn transgender bathroom panic into a fall election issue to a degree even higher than what we saw in Houston. People’s opinions or fears about scheming men plotting to get free legal access to little girls without repercussion—regardless of how realistic such a fear is (it’s completely unrealistic)—may help determine whether McCrory will keep control over the executive branch. McCrory is the first Republican governor of North Carolina in 20 years.
It’s a flashback to the days when opposition to laws that favored gay and lesbian folks were used to rally conservatives, back when George W. Bush was president. But since then the dynamics have changed, and the Democratic Party has fully embraced every position pushed forward by the LGBT political activist establishment and is attempting to use these issues to get out the vote. While the Democratic Party has been “friendlier” on gay issues historically, it’s only recently that they have started to use it as a wedge issue on their side rather than trying to find some sort of accommodation that staves off conflict. Both President Barack Obama and Hillary Clinton were famously opposed to same-sex marriage recognition less than a decade ago. But now it’s full steam ahead, attempting to use federal law to codify protections against discrimination for gays, lesbians and transgender people.
Given the extremely populist and unpredictable direction this election cycle has taken, it’s difficult to say whether this transgender bathroom panic will help McCrory win a second term or actually hurt him in a Southern state that actually has a fairly Democratic background.
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Submitted by Claire Bernish via TheAntiMedia.org,
“I think Smedley Butler was onto something,” Col. Lawrence Wilkerson, former George W. Bush administration heavyweight, told Salon in an exclusive interview.
Major General Smedley Butler earned the highest rank in the U.S. Marine Corps, accumulating numerous accolades as he helped lead the United States through decades of war. He later became an ardent critic of such militarism and imperialism.
“War is a racket,” Butler famously said, and Wilkerson — who has also turned critical of U.S. imperialist policy — agrees with and admires the esteemed Marine.
Wilkerson, who served as chief of staff to former secretary of state, Colin Powell, has grown tired of “the corporate interests that we go abroad to slay monsters for.”
Of the profiteering scheme that wars have come to embody, Wilkerson quoted Butler:
“Looking back on it, I might have given Al Capone a few hints. The best he could do was to operate his racket in three districts. I operated on three continents.”
Noting Butler’s brief but accurate characterization of what Eisenhower called the military-industrial complex, Wilkerson added that today’s war machine “is more pernicious than Eisenhower ever thought it would be.”
The willingness of such weapons and military equipment corporations to excuse the transgressions of repressive and abusive regimes in the Middle East and Asia for the sake of profit, Wilkerson asserted, stands as evidence Eisenhower underestimated the extent the to which the problem would manifest.
“Was Bill Clinton’s expansion of NATO — after George H. W. Bush and [his Secretary of State] James Baker had assured Gorbachev and then Yeltsin that we wouldn’t go an inch further east — was this for Lockheed Martin, and Raytheon, and Boeing, and others, to increase their network of potential weapons sales?” Wilkerson asked.
“You bet it was,” he answered his own question.
“Is there a penchant on behalf of the Congress,” he continued, “to bless the use of force more often than not because of the constituencies they have and the money they get from the defense contractors?
“You bet.
“It’s not like Dick Cheney or someone like that went and said let’s have a war because we want to make money for Halliburton,” Wilkerson explained, describing such decision-making as “pernicious.”
Taking his description a step further, Wilkerson characterized those corporations flooding congressional elections and political PACs with cash as “another pernicious influence.”
Relating another ill of the U.S. war machine, Wilkerson repined the creep of privatization of “public functions, like prisons,” for which the former Bush official places greatest blame on Republicans — though Democrats appear as eager about the shift. Salon mentioned Hillary Clinton’s speech from 2011, during her tenure as Secretary of State, in which she stated, “It’s time for the United States to start thinking of Iraq as a business opportunity.”
Indeed, journalist Jeremy Scahill extensively reported and investigated the enormous army of private contractors operating in Iraq and Afghanistan — with a particular focus on Blackwater. Run by notorious mercenary Erik Prince — who recently became the subject of an investigation by the Dept. of Justice and other federal agencies — Blackwater appeared to operate so unpredictably as to essentially be a rogue organization.
Scahill penned an article for the Guardian in 2007, revealing the exact troubles with privatization Wilkerson referred to — there were 48,000 ‘private contractors’ working for 630 companies in varying capacities in Iraq.
“In many respects,” Wilkerson continued, “it is now private interests that benefit most from our use of military force. Whether it’s private security contractors, that are still all over Iraq or Afghanistan, or it’s the bigger-known defense contractors, like the number one in the world, Lockheed Martin.”
Contractors have arguably done the most to damage U.S.’ international relations and accountability than any other factor — except for the corporations paying them. All of this profit for belligerence has clearly benefited one de facto policy: American imperialism.
“We now dwarf the Russians or anyone else who sells weapons in the world,” Wilkerson noted. “We are the death merchant of the world.”
Now, Wilkerson worried, “We’ve privatized the ultimate public function: war.”
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The recent weakness in Silver has done nothing to dissuade precious metal ‘hoarders’ from buying-the-dip. Silver ETF holdings rose 846 metric tons in March (so far) – the biggest jump since August 2013 – to the highest since April 2015.
And all of this buying has occurred as prices dropped to one-month lows, as it seems – like China and Russia – taking advantage of lower precious metal prices amid the collapse of central bank credibility around the world.
Continued fund buying shows longer-term investors haven’t been put off by recent price declines, said Ole Hansen, head of commodity strategy at Copenhagen-based Saxo Bank A/S.
However, we do note that commercial hedgers are the most-hedged in 10 years…
Charts: Bloomberg
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