“They’re Finally Accepting Reality” – Manhattan Landlords Are Slashing Rents To Fill Vacant Storefronts

Owners of Manhattan’s commercial real-estate might soon begin to regret their decision to hike rents to absurdly high levels in the hope of attracting the next Chase, Bank of America or Duane Reade capable of paying their extortionate prices.

As Bloomberg reports, owners of prime retail storefronts in the heart of Soho – a trendy shopping district in downtown Manhattan – are struggling to find and retain tenants willing to pay the record rents being demanded by landlords.


The Bloomberg story begins by recounting the story of one boutique clothing shop that threatened to vacate its space six years early and just eat its security deposit unless the landlord agreed to a lower rate.

The Kooples, a French clothing seller, is threatening to vacate its space six years ahead of schedule if it can’t get landlord Thor Equities to cut the rent. With brick-and-mortar stores suffering from a retail industry shakeout, the company says it isn’t making enough money at the property and wants to focus on the web.

The scene unfolding on the cobblestones of one of New York’s trendiest shopping areas shows the increasingly fraught negotiations between tenants and landlords as vacancies soar and retail rents plunge. Similar scenarios are playing out along Madison Avenue to the north and along other thoroughfares in the city that have long been a draw for those shopping for designer clothing and other luxury goods. Property owners are confronting demands once unheard of in Manhattan, from rent reductions to short-term leases.

Again and again, we’ve pointed to the stagnant deals and rents in some of Manhattan’s wealthiest and most expensive areas as a sign that the New York real-estate market is heading for a downturn after years of torrid growth in the valuations of residential and commercial real-estate.


According to Bloomberg, after a lull in leasings, landlords are beginning to accept their new reality, according to Patrick Smith, a vice chairman of the retail brokerage at Jones Lang LaSalle Inc. It no longer makes sense to keep rents so high in the hopes of landing one of the few corporate clients willing to pay.

Indeed, “landlords are adjusting the way they do business to market conditions,” Smith said. “It’s healthy. It certainly has stimulated activity.”

Of course, outside of Manhattan, many landlords are struggling with an even more ominous problem: As more brick and mortar retailers close, malls and other commercial storefronts are struggling to find somebody – anybody – who would be willing to fill their vacant spaces.


As a result, American malls are being forced to close, or suffer the indignity that accompanies having so many vacant storefronts.

In Manhattan, home to some of the most valuable retail real estate in the world, a sharp rise in rents following the recession exacerbated the problem, with property owners clinging to unrealistic income expectations. Today, the glut of empty space is taking a toll, pushing landlords to make concessions to plug holes.

Some are signing shorter-term leases to draw tenants that may be reluctant to make long-term commitments. In Soho, Hermes is negotiating a deal at 63 Greene St. that gives the retailer the option to leave after one year, while a few blocks over at 375 West Broadway, Gucci signed a lease that allows it to vacate the space if sales don’t meet expectations after two years, according to people familiar with the deals, who asked not to be identified because terms are private.

Historically, a typical lease term in New York was between 10 and 15 years.

Representatives for Gucci and Hermes didn’t respond to emails seeking comment.

“Landlords, more today than in the past, are coming around to the retailer’s mentality,” said Steve Soutendijk, an executive director at Cushman. Both sides are making calculations on store sales “and how much can they pay in rent. If a store is unprofitable for them, it doesn’t make sense to keep it open.”

To be sure, these issues aren’t confined to downtown – it’s a problem that’s beginning to manifest throughout Manhattan and even in some trendy outer-borough neighborhoods.

Downtown landlords aren’t the only ones caving. On a tony corridor of Madison Avenue on the Upper East Side, an 18,000-square-foot (1,670-square meter) stretch of luxury retail is facing vacancies. Landlord Vornado Realty Trust doesn’t expect tenants including Gucci and Cartier to sign long-term renewals to leases that expire in September given market conditions, according to mortgage documents tied to the property. It’s offering short-term agreements at lower rates to keep the space occupied, the documents show. As of last month, no deals had been struck.

Vornado, which recently paid off its mortgage at the property, declined to comment.

“Landlords have to be open-minded,” said Robert Cohen, a vice chairman at retail brokerage RKF.

In Soho, retail rents in the area have since plunged, dropping 17 percent in the past year to an average of $440 a square foot, the largest decline in all of Manhattan, according to the latest data from Cushman. But across the city, the number of new leases is falling and landlords in both retail and commercial are offering more rent concessions than they have in years.

This might soon translate to a crash in the number of real-estate deals, mirroring a dire situation that’s playing out across the country, as high prices and a paucity of supply caused pending home sales to crash the most since 2010 in January.

via Zero Hedge http://ift.tt/2FazQHp Tyler Durden

Nomi Prins: The Status Quo Will Reign

Authored by Nomi Prins via The Daily Reckoning,

This month’s stock market correction is still fresh in everyone’s mind. Many have even begun to wonder if the era of dark money was truly over.

How will the recent correction affect the Fed’s dark money policies?

The consensus explanation for the correction was that inflation was rising and that would precipitate faster rate increases. The Feb. 2 unemployment report gave the impression that higher worker wages could lead to a higher inflationary trend.

I don’t buy this at all. I believe these fears of inflation are overblown.

As my colleague Jim Rickards has explained, the Feb. 2 report revealed that total weekly wages were actually declining and that labor force participation was unchanged. And the year-over-year gain in wages only seemed impressive compared with the extremely weak wage growth of recent years.

After accounting for existing inflation, Jim argued, the real gain was only 0.9%. That’s weak relative to the 3% or even 4% real wage gains typically associated with economic expansions since the end of World War II.

In short, Jim concludes, “the story about the “hot” economy with inflation right around the corner does not hold water.”

I agree.

Meanwhile, the latest report on U.S Gross Domestic Product (GDP) for the fourth quarter of 2017 was nothing to write home about. At 2.6% annual growth, it was 0.3% lower than expectations. That’s not the sign of an overheating economy. But those in the financial media considered it positive because it showed 2.80% growth in real personal consumption.

But if you look beneath the surface, what you’d see is that consumers aren’t actually doing well across three core areas that “govern the ability of individuals to spend.”

While the Fed would have you believe that real GDP rose by $421 billion over the past four quarters, the truth behind the numbers paint a very different picture. As analyst Michael Lebowitz notes, “If we adjust consumption to more normal levels of spending and credit usage, the increase in GDP is a mere 0.71%, hardly robust.”

First, there’s income and wages. On that score, fourth quarter real disposable income only “grew at a 1.80% year over year rate.” The report found that “80% of workers continue to see flat to declining growth in their wages.”

And last month the U.S savings rate fell to near its lowest recorded levels in the past 70 years. The only time it hovered so low was just before the recent financial crisis.

Second, there’s credit card debt. Over the last four quarters it has increased by about 6% annually. That’s three times faster than its rate during the years following the financial crisis, and double the increase of income. What this means for those on Main Street is that they are keeping up with expenses by sinking into greater debt.

What this also means is that the Fed’s massive injections of dark money since the financial crisis have not helped real people in the real economy. They’ve simply inflated a massive stock market bubble.

Unfortunately, that reality is not going to stop them from perpetuating dark money policies. Despite the Fed’s “tough love” language, they don’t want markets diving. They are all too aware that media hyped, government constructed “growth” isn’t real.

Before the stock market woes, there was widespread speculation the Fed would raise rates four times in 2018.

Of course, once the correction happened, some at the Fed sprang to action to assure markets that the Fed was sticking to its game plan.

William Dudley, president of New York Fed, characterized the recent stock market decline as “small potatoes” relative to its gains. Meanwhile, Charles Evans, president of the Chicago Fed, who didn’t want a hike at the last meeting, said he would support “three or even four” rate increases this year. His statement was based on whether inflation really is moving up, and provides wiggle room for fewer hikes if it isn’t.

There’s another way to interpret the comment that “the Fed is most likely to stay the course.”

You can read that two ways; one, that hikes will continue as planned; and two, that if the Fed feels pressured they will pull the brakes on hiking rates. It’s all about market signals, not the real economy.

But new Federal Reserve chairman Jerome Powell has the most important opinion. And we have a good indication how he will act…

He previously echoed outgoing Fed chair Janet Yellen’s caution against hiking rates too aggressively. Under Yellen’s leadership, the Fed kept rates near record lows and continued both a dark money-quantitative easing program.

There’s no reason to expect he’ll change his views now.

Wall Street and the financial markets are now daring Jerome Powell to reconsider any inclinations to raise rates more aggressively. The correction sent a clear warning against further tightening.

What that means for you is that the Fed will be thinking twice going forward. They know the inflated stock market is all they have to show for all their efforts these past years. So you can expect the markets to continue receiving their injections of dark money if the market stumbles again. It’s the Fed’s only proven trick.

So expect stock markets to move higher overall.

Of course, there will be more volatility in the days ahead. The most common measure of market volatility is the CBOE Volatility Index, or VIX. Last year, the VIX fell to a historic low of 8.56 in November. On Feb. 6, it hit a 2.5-year high of 50.30. After that, it dropped to 17.60. Today it’s back under 17.

Volatility has hit junk bonds, emerging-market equities and Treasury bonds. In the Treasury market, 10-year yields hit four-year highs. And you can expect the bond market to also continue exhibiting more trauma on even the slightest rate hike rumors because the deluge of debt is not sustainable.

The seesaw movement in the VIX indicates that this volatility of volatility is here for the long haul this year. Why? Because stocks are fundamentally being lifted on a steady diet of dark money.

Based on the trends, expect this to become the new normal. This plays out in multiple versions. The clearest way is that every time dark money looks like it will be removed, the markets fall, and then when major central banks indicate that’s not really the case, markets rise again.

While this may not be the end of the storm, expect rising volatility to present opportunities in the future.

And there’s a lot more to come.

via Zero Hedge http://ift.tt/2CS6vfW Tyler Durden

And America’s “Best State” For 2018 Is…

US News And World Report has released its latest ranking of “best states” for 2018 and the results might surprise you. The winner is a midwestern state with the best infrastructure and broadband access in the country.

And that state is…Iowa?

In addition to those first-place rankings, the Hawkeye State also boasts top-10 rankings in health care (No. 3), opportunity (No. 4), education (No. 5) and quality of life (No. 9). However, Iowa’s high rankings in each of these categories mask lower sub-rankings that illustrate the challenges facing Iowans as a slowing-growing, rapidly aging state.

The study focused on 77 metrics across eight categories. They are:

  • Health care
  • Education
  • Economy
  • Opportunity
  • Infrastructure
  • Crime
  • Fiscal stability
  • Quality of life

For example, the state is ranked No. 17 for economy, while ranking toward the bottom for business environment (No. 46) and for some of the other measures of economic strength: growth of the young population (No. 36), venture capital investment (No. 38) and entrepreneurship (No. 45).

Iowa is known for its farms, but surprisingly, manufacturing has become the state’s largest industry, and many rural areas benefit from the construction of new, large processing and production facilities well outside of city limits.

Yet Iowa’s other growing non-farm sectors, like health care, insurance and finance, biotechnology research and development, are the kinds of businesses found almost exclusively in metropolitan areas, says David Swenson, an economist with Iowa State University.


Iowa Gov. Kim Reynolds

Unfortunately, one state representative said Iowa’s low unemployment rate, a key part of the state’s economic ranking, does not necessarily mean that non-Iowans should have a “reasonably good expectation of getting hired” if they decide to move to Iowa.

A recent study found that between 2011 and 2015, workers under age 44 with only a high school diploma were the largest cohort moving to the state. The state’s biggest loss during the same period, however, was among workers with a four-year or advanced degree.

Graduation rates from the state’s public institutions are among the highest in the country and contributed greatly to its No. 5 overall ranking for education.

Iowa is No. 1 in terms of the graduation rate for public high schools and is No. 3 for the graduation rate for four-year public colleges. However, cost is still an issue: The state is No. 19 for tuition and fees, and No. 32 for low debt at graduation for in-state students at four-year institutions.

Meanwhile, Iowa’s No. 3 ranking in health care is based on top-10 rankings in child wellness visits (No. 1), health-care affordability (No. 2), low infant mortality rate (No. 2), Medicare quality (No. 3), insurance enrollment (No. 5), health care access (No. 5) and health care quality (No. 9). There is one hitch, though: The state ranks No. 37 for obesity.

The state’s lowest broad-category ranking was in fiscal stability, where it ranked No. 21.

Iowa Gov. Kim Reynolds appeared on “CBS This Morning” to discuss the rankings, as well as other topics pertaining to the report and current events.



See a breakdown of the top-10 states below:

1. Iowa
2. Minnesota
3. Utah
4. North Dakota
5. New Hampshire
6. Washington
7. Nebraska
8. Massachusetts
9. Vermont
10. Colorado



via Zero Hedge http://ift.tt/2t4pCDM Tyler Durden

Ron Paul: “The Fed Is At A Crossroads… A Crisis Is Coming”

Authored by Mac Slavo via SHTFplan.com,

The Fed has created a mountain of problems for everyone in the United States and every single solution that they come up with leads to even more problems. Ron Paul recently discussed what the Fed has done, how it tries to keep things going, and the inevitable economic crisis that is coming.

Ron Paul has been one of the few steadfast proponents of liberty, which is likely why he’s no longer associated with the government at all. In a recent video, Paul discussed the problems the Federal Reserve created and why their solutions will generate an economic crisis of epic proportions.

“They [The Fed] have a lot of power, but their main goal is to do central economic planning which always fails. It’s also a gimmick because they have meetings, they are supposed to have eight a year, and then there’s a big announcement…they come out and they make a statement and the chairman is interviewed, and then, later on, you get the minutes.

It’s big fanfare. But I see it as mostly propaganda, just carrying a message. Getting it from the people who really run things, the deep state, and they get it out there. But it does have a lot of effect on the market.

I actually believe that there are some people who know how fictitious the Fed really is and how inept it is, but still watch it because they know a lot of other people are going to pay attention…the deep state is not a part of the government, but they have a lot of influence.”

Paul went on to explain that often we are told it’s not right to criticize the Fed. But that will change.

The next downturn, which I think will come soon, the Fed’s not going to get credit for getting us out of it. They didn’t get any credit for getting us out this last recession which we’re really, in many ways, still in…times are different.

But times are getting much worse now. This next downturn is going to be a serious one and the Fed doesn’t have any magic whatsoever…central economic planning never works no matter how long they get away with it.”

And something we’ve heard from top financial experts such as Peter Schiff, Paul also says there’s a trend to ditch the dollar, which will lead to its collapse.

“I think it [the dollar value] is going to continue to erode on international exchange markets and this will hurt us because that’s also the reason that we see interest rates going up,” Paul says.

“Peter Schiff is right,” Paul continued. This whole house of cards will come crashing down as interest rates rise.

via Zero Hedge http://ift.tt/2t3sAZ0 Tyler Durden

Saudi Crown Prince Mohammad Bin Salman Will Visit Washington Next Month

Nearly a year to the day since his first visit to the White House during the Trump era, Saudi Crown Prince Mohammad bin Salman is planning a three-day visit to the US next month, according to the National, which broke the story.

His visit will follow a trip to the UK, where he will meet with Prime Minister Theresa May. That visit is scheduled for March 7.

As we’ve highlighted many times before, it’s widely believed that Prince Mohammad – who is universally referred to by his initials, MbS – will soon succeed his aging and ailing father, King Salman, who has struggled with poor health since ascending to the throne in 2015. MbS, 31, was named heir in June after his father passed over MbS’s older brother, Prince Mohammad bin Nayef, 57.


Mohammad bin Salman

Trump famously visited Saudi Arabia last spring in what was his first trip abroad as president, helping burnish the US’s longtime friendship with the Kingdom, which had grown strained over its tacit support for terrorism and its energy industry’s battle for market share with US shale producers.

Trump’s sharp anti-Iran rhetoric has helped him curry favor with the Saudis, viewed Trump’s predecessor president Barack Obama as too accommodating towards Iran – the Kingdom’s longtime regional foe – after the US signed onto a multilateral nuclear deal that Trump has promised to dismantle.

Last month, MbS announced that Saudi security forces had completed a corruption crackdown where the prince briefly imprisoned dozens of Saudi royals, including billionaire Prince Al-Waleed bin Talal, holding them at the Riyadh Ritz Carlton until they agreed to fork over a chunk of their ample assets to the Saudi treasury as restitution for their alleged crimes. At the time, media reports said many of the princes were being transferred to a Saudi prison, where they will serve out their prison terms. The crackdown ultimately netted the Kingdom $100 billion, helping plug a massive budget hole left by persistently low oil prices.

After Washington, MbS will head to major US cities to discuss economic co-operation, investments and his Vision 2030 program – a long-term plan to diversify the Saudi economy away from its over-reliance on energy – with potential American stakeholders. MbS will visit New York, Boston, San Francisco and Seattle. He previously visited Silicon Valley in 2016, where he pitched his economic plan to investors and social media moguls.

The visit comes as the US is working on convening a summit of Gulf State leaders at Camp David later this spring – an attempt by Trump to help Saudi Arabia reconcile with Qatar after triggering an acute diplomatic crisis last summer.

While it’s unclear exactly what the two will discuss – though economic development and countering extremism will likely be high on the agenda – most Americans are probably curious to learn one thing:

Will he bring “the orb?”



via Zero Hedge http://ift.tt/2FG7YbU Tyler Durden

The Failure Of Fiat Currencies

Authored by Tom Lewis via GoldTelegraph.com,

We work hard for our money, as we think it has long-lasting value. That value can buy us other things that we want. It seems like a good exchange. However, few of us consider how extrinsic the value of money really is. In reality, we are dealing in valueless fiat currencies. 

At one time, our money was backed by the tangible value of gold or other precious metals, legal tender for anything of equal value.

That is not the case any longer. The value of a dollar bill these days is what the government says it is. This arbitrary value is dependent on the whim of the government. And the government can print money like a copy machine run amok. There are no limits to how much money can be put into circulation. That is because this money isn’t backed by any real value, it’s called fiat currency.

The US dollar became fiat currency when it stopped being backed by gold over 46 years ago and it has lost 97 percent of its value since the establishment of the Federal Reserve in 1913.

Apart from cryptocurrencies, all the world’s major countries are using fiat currency.

Since Roman times, fiat money has failed spectacularly throughout history due to the same pattern of rapid devaluation and then total collapse. The Romans used a 100 percent pure silver coin called the denarius at the start of the first century. By mid-century, during Nero’s rule, the denarius only contained 94% silver. By 100 A.D., the silver content had been reduced to 85%. The value of the coin was decreasing steadily. This worked well for Nero and his followers, who no longer had to pay their debt at the full, actual value while additionally increasing their own wealth. During the next century, the coin was made of less than 50% silver. By 244, Emperor Philip the Arab had reduced the amount of silver in the denarius to 0.05%. When the Roman Empire finally fell, the denarius contained only 0.02% of silver.

The devaluation of currency invariably is the precursor to economic ruin.

China was the first country to use paper money in the 7th century. Until that time, they used copper coins but switched to iron due to a copper shortage. The easy availability of iron caused it to be overissued, until it too, collapsed. During the 11th century, a Szechuan bank began to issue paper currency in exchange for the iron currency. This worked briefly since the paper could be traded for rare, valuable metals, such as gold and silver, or for valuable silk. Then, China entered into a costly war with Mongolia and was eventually defeated by the Mongol leader, Genghis Khan. In an effort at expansion, Genghis’s grandson, Kublai Khan, started to flood paper money throughout the empire. As China’s trade increased, the influx of fiat paper – currency backed by no value – caused even the wealthiest of families to be ruined.

France may be the only country that has been defeated by fiat money three times. The Sun King, Louis XIV, left his successor heavily in debt. Poor Louis XV took the advice of the Scottish economist John Law and simply flooded the country with paper currency instead of the previously acceptable coins. The paper money devalued the actually valuable coins, causing the heir to the Sun King to bankrupt his own country. Yet France didn’t learn its lesson well the first time. More than 100 years later, France gave paper money another try, creating an inflationary spiral of 13,000 percent. Napoleon, and the introduction of a gold-backed Franc came to the rescue. Was France now convinced of the negative effects of fiat currency? Not quite. In the 1930’s, paper currency was again issued, causing inflation to devalue the paper Franc by 99% in 12 years.

Another country faced with huge, unmanageable, and unpayable debt was post-WWI Germany. Germany did not learn from history. Instead, it created a state of unheard of hyperinflation. One hundred and thirty printing companies churned out paper money as fast as they could, devaluing the German Mark so much that its only real value was to be used as kindling.

America has a long history with fiat currency, starting with the Massachusetts Colonial notes of the 1600s. Other colonies quickly followed suit. The notes were to be redeemable for tangible goods, but they weren’t backed by any tangible commodity. Repeating a long, historical sequence of events, too many printed notes soon made the currency worthless. America’s next venture into unbacked paper currency was to finance the Revolutionary War. It, too, crashed.

It seemed American might finally have learned a lesson. Up until 1913, American currency was rigorously backed with actual gold. The establishment of the Federal Reserve Bank that year reduced the amount of gold officially backing the dollar. Owning gold became illegal. In 1971, any gold standard was eliminated as the US dollar officially became another piece of paper. Its value has decreased by 92% since 1913.

With history being the best indicator of the future, America is primed for another currency collapse.

We are facing a debt as out-of-control as Weimar Germany while the government keeps the printing presses busy. At this time, China and Russia are supporting their respective currencies with gold. In addition, both countries are using a new money transfer system, CIPS (China International Payment System), to replace the western SWIFT (Society for Worldwide Interbank Financial Telecommunication) system.

Western countries, all of whom use SWIFT for money transfers, have had a monopoly on the manipulation of international money transfers. With Washington and SWIFT’s help, hedge fund billionaire Paul Singer was able force a debt-ridden Argentina to pay 20 cents on the dollar for his bonds, valued at $3 billion, making it virtually impossible for Argentina to pay its other debtors.

The current Argentine President Macri reopened negotiations for the long-time debts, settling at 30 cents on the dollar. The manipulation of fiat money can quickly result in the manipulation of fiat debt, benefitting a select few and ruining the rest.

In the meantime, China and Russia’s use of gold-backed currency and the use of their own money-transfer system have improved both economies. The possibility of CIPS being used worldwide and serving as an alternate monetary transfer method offers hope that the Western fiat money scheme may soon be halted. Western fiat money manipulation has turned into an unsustainable Ponzi scheme that is holding on by a thread. Approximately 97% of the Western money is printed randomly as needed, in effect creating play money.

If the system falls, it will be the fall of a monster. When banks try to call in their huge fiat debts, it could cause an avalanche of repercussions. The elite will be safe, but the vast majority will be left in dire straits.

Perhaps digital payments will take the place of paper currency. The global monetary future is still developing, but drastic changes are inevitable. 

via Zero Hedge http://ift.tt/2COIPch Tyler Durden

Russian Foreign Minister Accuses US Of Violating Nuclear Nonproliferation Treaty

During another contentious meeting of the UN Conference on Disarmament in Geneva on Wednesday, Russian Foreign Minister Sergey Lavrov accused the US of violating the Treaty on the Non-Proliferation of Nuclear Weapons – the cornerstone of the global nonproliferation regime – by training its NATO allies to use US nuclear arms installed on European territory, according to RT.


According to Lavrov, the US has decided to keep “a significant number of rockets” in Europe, breaching the major nuclear arms agreement, according to Interfax.

“Everybody should understand that the US military are preparing the militaries of European states to use tactical nuclear weapons against Russia,” he stressed.

The US keeps an estimated 200 of its B61 nuclear bombs in countries including Germany, Belgium, Italy, the Netherlands and Turkey as part of NATO’s nuclear-sharing program. Russia considers the presence of American nuclear weapons on foreign soil to be a hostile gesture. The US is in the process of upgrading the B61, making the weapon more flexible in use, claiming it is necessary to counter Russia’s arsenal of tactical nuclear weapons. Russia says its arsenal is necessary to protect it from NATO’s overwhelming superiority in terms of conventional arms.

Last month, representatives of the US and Japan clashed with their North Korean counterparts at a similar forum in Geneva.

via Zero Hedge http://ift.tt/2Fd8LmQ Tyler Durden

What’s Going Down In China Is Very Dangerous – Part 1

Authored by Mike Krieger via Liberty Blitzkrieg blog,

I’m sure all of you are aware of the dramatic power play pulled off over the weekend by China’s Communist Party to eliminate term limits for both the president and vice president.

Prior to the move, Chinese leaders have stuck to two five-year terms since the presidency of Jiang Zemin (1993-2003), but that’s about to change as wannabe emperor Xi Jinping positions himself as indefinite ruler of the increasingly totalitarian superstate.

While the weekend announcement was illuminating enough, I found the panicked reactions by Chinese authorities in the immediate aftermath far more telling. The country’s propagandists took censorship to such an embarrassing level in attempts to portray the decision as widely popular amongst the masses, it merely served to betray that opposite might be true.

China Digital Times compiled a fascinating list of words and terms banned from being posted or searched on Weibo. Here’s just a sample of some I found particularly interesting.

  • The Emperor’s Dream (皇帝梦) — The title of a 1947 animated puppet film.

  • Disney (迪士尼) — See also “Winnie the Pooh,” below.

  • personality cult (个人崇拜) — Read more about the image-crafting campaign that has been steadily cultivated by state media over Xi’s first term.

  • Brave New World (美丽新世界) — See also “1984,” below.

  • my emperor (吾皇)

  • Yuan Shikai (袁世凯) — Influential warlord during the late Qing Dynasty, Yuan became the first formal president of the newly established Republic of China in 1912. In 1915, he briefly re-established China as a Confucian monarchy.

  • Hongxian (洪憲) — Reign title of the short-lived, re-established monarchy led by Yuan Shikai, who declared himself the Hongxian Emperor. After much popular disapproval and rebellion, Yuan formally abandoned the empire after 83 days as emperor.

  • Animal Farm (动物庄园)

  • N — While the letter “N” was temporarily blocked from being posted, as of 14:27 PST on February 26, it was no longer banned. At Language Log, Victor Mair speculates that this term was blocked “probably out of fear on the part of the government that “N” = “n terms in office”, where possibly n > 2.”

  • emigrate (移民) — Following the news, Baidu searches for the word reportedly saw a massive spike.

  • disagree (不同意)

  • Xi Zedong (习泽东)

  • incapable ruler (昏君)

  • 1984

  • Winnie the Pooh (小熊维尼) — Images of Winnie the Pooh have been used to mock Xi Jinpingsince as early as 2013. The animated bear continues to be sensitive in China. users shared a post from Disney’s official account that showed Pooh hugging a large pot of honey along with the caption “find the thing you love and stick with it.”

  • I oppose (我反对)

  • long live the emperor (吾皇万岁)

The full list is far more extensive and ridiculous, but the key point is that such a pathetic and panicked response from government censors highlights government insecurity, not strength.

I fully agree with a recent observation made by Charlie Smith, co-founder of GreatFire.org:

Smith said he believed Beijing had underestimated the outrage its decision would cause. “The response from Chinese netizens indicates that Xi may have miscalculated how this would be received by the general public. Hence, he has asked the censors to put in overtime and things like the letter ‘N’ end up as collateral damage.”

The internet response to the Communist Party’s move to abolish term limits was not what leadership expected or desired, which prompted a panicky and desperate attempt to immediately clean up internet discourse.

It’s pretty sad when a government in charge of the lives of over a billion people is terrified of Winnie the Pooh memes.

The huge tell that China was about to take a major totalitarian turn occurred last year with the draconian government response to Bitcoin and crypto currency exchanges generally. The people of China were embracing the technology as much as anyone else and were in a perfect position to be global leaders in this paradigm changing new ecosystem. Xi responded to this by shutting the whole thing down.

Not only did he dash the enthusiasm, drive and talent of some of his country’s smartest technologists and entrepreneurs, but he also made it clear to the world that the Chinese model will continue to be one of command and control, rigid hierarchy and centralization. This is a tragic and historic mistake, and I think the coming brain drain out of China could be massive. This provides an opportunity for more open nations to scoop up some serious talent as they look to leave. As noted previously, Chinese authorities banned the word “emigrate” earlier this week, which should certainly tell you something.

As someone who’s watched his own government turn increasingly opaque, corrupt, authoritarian and unconstitutional, I feel empathy for the tens, if not hundreds of millions, of Chinese horrified that their hopes of a more free society appear dashed for the foreseeable future. Making matters worse, the surveillance state that’s been installed across the country is science fiction level scary.

In case you missed the following video clip of the China’s all-seeing spy camera network, take a watch.

If that’s not wild enough, Chinese police are now starting to become equipped with fascial recognition eyeglasses.

From Verge:

China’s police have a new weapon in their surveillance arsenal: sunglasses with built-in facial recognition. According to reports from local media, the glasses are being tested at train stations in the “emerging megacity” of Zhengzhou, where they’ll be used to scan travelers during the upcoming Lunar New Year migration. This is a period of extremely busy holiday travel, often described as the largest human migration event on Earth, and police say the sunglasses have already been used to capture seven suspects wanted in major cases, as well as 26 individuals traveling under false identities.

The sunglasses are the latest component in China’s burgeoning tech-surveillance state. In recent years, the country has poured resources into various advanced tracking technologies, developing artificial intelligence to identify individuals and digitally tail them around cities. One estimate suggests the country will have more than 600 million CCTV cameras by 2020, with Chinese tech startups outfitting them with advanced features like gait recognition.

Let this be a lesson to U.S. citizens, as well as citizens across the world. Never, ever allow a massive, unaccountable surveillance system to be constructed and implemented in your society for any reason. It will always ultimately be abused by a power hungry despot to seize and then maintain power.

Finally, one major reason I’m so concerned about what’s happening in China is because it adds a huge element of geopolitical risk to the global equation and greatly increases the likelihood of worldwide conflict.

Tomorrow’s piece will focus on this angle.

*  *  *

If you liked this article and enjoy my work, consider becoming a monthly Patron, or visit our Support Page to show your appreciation for independent content creators.

via Zero Hedge http://ift.tt/2HTdUit Tyler Durden

“Booth Babes” Banished: Car Shows Ban Sexy, Scantily Clad Models

Earlier this month we reported that amid the brave new world of sexual harassment lawsuits, #MeToo, social justice warriors, consent forms and rage over the “patriarchy,” Formula 1 and its FAI ruling body has decided to ban the use of promotional models, known as “grid girls,” from its events because they don’t “resonate with [the] brand values [of F1] and clearly is at odds with modern day societal norms.” 

Now, the allegedly “demeaning” practice of showcasing scantily-clad women at testosterone-filled events, is spilling out out from the race track and hitting your local auto show.

According to Bloomberg, whereas one year ago two blondes in skintight silver mini dresses and stiletto heels would greet onlookers at Ssangyong Motor’s display at the Geneva car show, when the annual event reopens this week, the South Korean manufacturer’s “booth babes” – as they are known in the industry – will be gone, replaced by male and female models dressed in boring sportswear to promote its line up of pick-ups and cars.

Eliminating women as display props isn’t new for some carmakers like French Peugeot maker PSA Group. “Visitors to the Geneva auto show will be welcomed on the PSA booth by male and female hosts whose mission will be to inform them,” spokesman Pierre-Oliver Salmon said in an email with a #nocarbabes hashtag attached.

“PSA Group won’t convey a degrading image of anyone, neither of women or men.”

Ah yes, the prudish French.

To almost everyone else, however, it’s a radical departure.

In bowing to the global #MeToo movement against sexual harassment, the suddenly prudish South Korean car maker is not alone: larger automakers including Toyota and Nissan Motor Co. have also said they will cut back on the coquetry in Geneva, marking a potential sea change for an industry that has long pandered to male customers by using attractive women to sell cars.

“Times have changed,” Sara Jenkins, a Switzerland-based spokeswoman for Nissan which stopped hiring fashion models for shows last year, told Bloomberg. “It makes more sense to use product specialists because we’re selling cars.”

Some carmakers such as Lexus, fearing a backlash, said it’s dropping models altogether at the Swiss event, while Fiat Chrysler Automobiles NV is said to have canceled contracts with several female models over concern about being criticized on #MeToo. The maker of the Maserati, Jeep and Alfa Romeos will instead feature men as well as women in less flesh-exposing garb than in previous years.

This is in sharp contrast with 2017, when Alfa Romeo’s display had women in little black dresses hovering around its Stelvio crossover.

Nearby, a brunette with a beehive hairdo and a bottom-grazing sixties-style dress kicked up her red heels next to a Fiat 500. At Lexus, a woman in an off-the-shoulder burgundy gown was stationed beside one of its sedans.

In other words, video lsuch as this one, will never be made again.

Why this dramatic change in what been decades of conventional auto show marketing strategy?

According to Bloomberg, the transformation by the biggest players shows the ripple effect the #MeToo movement is having on industries far from its Hollywood roots.

The growing backlash has also prompted several European sports events to ditch hostesses working on the sidelines of male-dominated competitions.

Indeed, as we reported previously, Formula One said it was dropping the hiring of “grid girls,” branding the women in skimpy clothes at odds with modern society.

In the auto industry, the changing customer base is also feeding the trend. The number of women owning cars in the U.K. jumped 66% in the decade through 2016, official figures show, almost triple the rise in for men. In Germany, Europe’s biggest car market, women buy about a third of all new vehicles and in France 37 percent.

Meanwhile, the blowback against yet another formerly male-dominated industry means dramatic changes are afoot.

Lamborghini, the sports car brand owned by Volkswagen AG, said it quit draping women around its Huracans about two years ago and is busy training male and female hosts to explain the vehicle’s features at this year’s Geneva event

Even Pirelli & C. Spa, the Italian tire-maker famed for its sexy calendars, has modified its approach. Its 2018 stand will have models in black pant suits during press days, rather than the skimpy dresses of 2016, a spokeswoman said.

So, for the memories, a catalog of the 80 sexiest Pirelli calendar girls can be found after clicking on the image below.


via Zero Hedge http://ift.tt/2oESqNH Tyler Durden

The Pricking Of The Canadian Real Estate Bubble?

Authored by Kevin Muir via The Macro Tourist blog,

First of all, sorry for the lack of posts lately. Long story, but rest assured, I am back on track and the old ‘tourist regular postings have resumed.

Next up, today I will write about Canadian real estate.

I know, many of you find that about as exciting as watching Winter Olympic curling, but give me a chance – after all, we Canadians have a way to make even curling entertaining.

The Canadian real estate bubble

As most everyone knows, over the past decade, Canada has experienced a massive real estate boom.

And for the past half dozen years, we have had to endure all the proclamations from hedge fund managers about the coming great Canadian housing market crash. Although there has also been some Canadian skeptics, the majority of these doomsdayers have been American managers who, after experiencing their own real estate crisis, can only imagine the next “big short” occurring in Canada.

These managers often simply took the US playbook and applied it to Canada, never considering that the US situation might be different. Nor did they factor in the possibility that Central Bank reaction functions might have changed since the Great Financial Crisis.

Don’t mistake me for some sort of unapologetic delusional Canadian housing bull. I think prices are nuts. But what I think is even more insane is the amount of balance sheet expansion from global Central Banks. We must always remember – the Canadian real estate bears are fighting against the authority that has the power to dictate the quantity of the asset in which we price all these other assets in.

Whether it be US or Canadian dollars, or Euros, or Yuan, do you really believe the supply of money will be suddenly throttled back? Or is it more likely that, given that 2008 is still relatively fresh in their minds, Central Banks will err on providing too much liquidity in the coming years? So yeah, maybe Canadian housing is stupidly overpriced, but so is almost every asset under the sun. Whether it is US equities, European bonds or crypto currencies, these are merely reflections of the absurd monetary policies that envelope the global financial system.

Finally the Canadian bears’ day in the sun?

Yet that doesn’t mean there aren’t assets that are relatively more expensive, and maybe after years of crying wolf, the Canadian real estate bears will one day prove correct. And maybe that day is today.

For the first time, I am legitimately scared for certain parts of the Canadian real estate market. Last week, the west coast provincial British Columbia government passed a series of new regulations that boggles the mind. You see, during this last cycle, B.C. has “suffered” with the hottest segment of the Canadian real estate market. Unfortunately, Vancouver’s popularity amongst Chinese investors and immigrants has mistakenly created a situation where many frustrated younger Canadians, who are getting priced out of the real estate market, are blaming foreign investment for the astronomical price increases. Last year, the B.C. government introduced a 15% foreign buyer tax, but when that didn’t slow down the rise enough, this budget, not only did they raise the 15% foreign buyers tax to 20%, they took other draconian measures.

From the Globe and Mail:

On Tuesday, one of the primary measures in the B.C. budget was the introduction of what the government is calling a speculation tax. It is aimed at foreign and domestic property owners who are parking capital in real estate and driving up prices in the province. It would apply to owners who do not pay income tax in British Columbia. Principal residences are exempt, as are properties with long-term renters.

The tax in 2018 will be 0.5 per cent of a property’s assessed value, a rate that rises to 2 per cent for 2019 and thereafter. It will be charged annually, separate from regular property taxes. B.C. predicts it will generate $200-million in revenue a year.

Here is my prediction. It won’t generate anywhere near $200 million a year in revenue because foreigners are going to dump their real estate faster than Lindsay Lohan downs pomegranate vodka martinis at the Oscars pre-party.

This has to be one of the stupidest decisions I have ever seen a government make (and that’s saying a lot). Think about it. It would be like Colorado imposing a 2% tax on NYC residents who own Aspen chalets. It doesn’t sound like a lot, but that’s 2% each and every year that is only paid by non-residents. It’s not a 2% transfer fee, it’s an extra yearly 2% shake-down (on top of all the regular taxes that the homeowner pays).

I don’t own any B.C. real estate, so this isn’t a case of sour grapes, but I can tell you one thing for sure – if I did, I would be hitting the bid. Capital goes where it is treated best, and it is obvious the B.C. government is not interested in treating investors with any sort of respect. About the only positive thing about this development is that at least they treated Torontonians with the same sort of contempt as the other foreigners so no one can describe the B.C. government as discriminatory.

Be careful what you ask for

The Canadian economy has become increasingly dependent on real estate. That’s what happens when you go through a decade long bull market- resources are diverted to where demand is greatest.

So this next graph from Canadian housing expert Ben Rabidoux should be of no surprise.

The Canadian economy, and B.C. especially, is dangerously balanced with an over reliance on housing. The B.C. government should be very concerned about the possibility of a hard landing as they try to stick handle a price dampening.

This isn’t just a slight turning of the screws on housing credit, but more of an attack on real estate. Have a look at this slide of the B.C. government’s policy changes (again from Ben):

I doubt that the market’s reaction to these policies will be to simply yawn. No, I suspect this policy will be successful at cooling house prices – too successful.

Now, I am not sure if it will spread to the rest of Canada, but I am certainly a bear on British Columbia economic prospects. Although some of these measures are probably too long in coming, dumping all of these at once will not prove wise.

The risks of the Canadian housing bears finally being correct has risen immensely. Maybe after six years of leaning on the sell button, they will finally be given a chance to write a blue ticket in the coming quarters.

What this means for the global economy

I understand that many readers are probably uninterested in the intricacies of the Canadian real estate market. Who cares if Canadian real estate finally collapses? It’s not going to affect anyone but Canadians.

Yes, that’s correct, but the way the Canadian government has gone about dealing with this problem gives important clues about how financial asset bubbles will be dealt with in the future throughout the globe.

Before 2008, what would have been the most likely response to the runaway Canadian housing prices? The Bank of Canada would have previously raised rates more aggressively. But in the aftermath of the Great Financial Crisis, Central Banks are loath to tighten monetary policy. Too many still have the taste of the last tightening cycle debacle in their mouth. So instead of getting out ahead of asset bubbles, Central Banks are more worried about the repercussions of pricking one.

This means that financial bubbles will not be burst by Central Banks. Let me repeat that again. Central Banks will not be bold enough to get out ahead of financial bubbles. Canada is a perfect example. Instead of putting interest rates to levels that would cool the overheating housing market, governments are forced to address the bubbles at a micro-level. As these financial bubbles morph into real problems, governments will try desperate solutions like the B.C. government’s aggressive program.

Whereas in the past the heavy lifting in stopping bubbles was born by the Central Banks, in the future they will not only shun that responsibility, but will increasingly be the source of keeping the bubbles going even as governments deal with the negative effects.

via Zero Hedge http://ift.tt/2HSFv3y Tyler Durden