Month: February 2019

Via Investors.com,

Media Bias: While journalists are getting pink slips across the country, the Washington Post decided to dump a boatload of cash for a Super Bowl image ad that tried to portray the news media as national heroes.

Here’s a better, and much cheaper, idea to restore the industry’s shattered reputation: Be less blatantly partisan.

In the 60-second ad, Tom Hanks intones about the importance of journalists against the backdrop of historic events. Thankfully, during these times, the ad says, “There’s someone to gather the facts. To bring you the story. No matter the cost. Because knowing empowers us. Knowing helps us decide. Knowing keeps us free.”

The problem with journalists today, however, is that they aren’t interested in gathering facts or empowering the public with knowledge. Instead, they are interested mainly in pushing their agenda — a basic failing of the profession brought into high relief over the past two years.

Media Bias Kills Trust

The latest IBD/TIPP Poll makes this abundantly clear. The poll asked several questions to gauge the public’s perception of the mainstream news media.

What did it find?

First, that fully half the country says its trust in the media decreased over the past two years. A tiny 8% say it’s increased.

That includes a plurality of independents (49%). Even among Republicans, who’ve long grown accustomed to media bias, 81% say their trust in the press has dropped over the past two years.

Geographically, those in the Midwest and the South are mostly likely to say their trust in the press has declined (52% and 57%, respectively) since Trump took office. Men are far more likely than women (54% vs. 47%). And those with incomes over $75,000 (51% of home distrust the media more) more than lower-income households.

These findings alone should be alarming. After all, as any corporate executive knows, you can’t run a successful business when a vast and increasing share of your customer base doesn’t trust the product you are selling.

It gets worse.

Pushing An Agenda

The poll found that more than two-thirds of the public (69%) think the news media “is more concerned with advancing its points of view rather than reporting all the facts.” Only 29% of the public disagrees with that statement.

In other words, nearly seven out of 10 adults in the country think the Post ad’s blather about “gathering the facts” is bull.

That includes 72% of independents, 95% of Republicans, and — surprisingly enough — 43% of Democrats.

There’s more. Fifty-nine percent say that the press covers issues in a way “that seeks to delegitimize the views held by President Trump and his supporters.”

Sixty percent of independents and 93% of Republicans agree with that.

Prejudging Trump

Also, more than half (53%) say they agree that the media “prematurely declared President Trump guilty of collusion with Russia without sufficient evidence.”

On this, too, most independents (55%) agree. So do more than one in five (22%) of Democrats.

Is anyone in the mainstream press paying attention? Apparently not, since they seem to think that the only problem they have is too few image ads.

So, here’s a question for the folks at the Washington Post:

How does “knowing help us decide” when the press clearly isn’t helping the public “know,” but is instead trying to force decisions by spinning stories, massaging facts and pushing an agenda?

The Post would have done journalists – to say nothing of the public at large – a real service if, instead of blowing millions of dollars on a Super Bowl ad, they had put that money into dealing with media bias. They could start by teaching journalists not to be propagandists for the far left wing of Democratic Party.

via ZeroHedge News http://bit.ly/2GtEW1V Tyler Durden

Last year’s holiday sales season was one of the strongest in years. But unfortunately for America’s struggling retailers, many missed out on the sales bonanza as Amazon and other e-commerce platforms accrued nearly all of the sales growth while foot traffic at US malls was stagnant. Already, Kohl’s and Macy’s have helped crush the narrative of the strong consumer by slashing their earnings guidance, something that doesn’t bode well for Q4 GDP, thanks to what we warned would be an unsustainable inventory build up that has inflated growth numbers in recent quarters.

The retail space has already seen the first headline-grabbing retail bankruptcy of the year (see: Gymboree). And as Bloomberg warned in a story published this week, even after high-profile bankruptcies including Sears and Toys R’ Us, the “retail apocalypse” is far from over.

Though the Fed has capitulated to the whims of the market, retailers still make up about one-fifth of the universe of distresses borrowers. And on Friday, the head of the biggest mall owner in the US warned that more bankruptcies are coming this year. Economists are increasingly worried about a recession this year or next.

Simon Property Group CEO David Simon told investors on Friday during a conference call that there are chains that his company is “nervous” about. Anybody who has traveled to a US mall recently may have noticed this change: Where once there were shoppers, now they halls look disconcertingly empty.

As Barry Bobrow and Lynn Whitmore at Wells Fargo Capital Finance warned, the industry is likely heading for a “prolonged restructuring” as the pre-crisis debt binge undertaken by retailers continues to haunt the broader industry. Retailers who are already weighed down with debt are also facing pressure to innovate and pivot to e-commerce. But their financial pressures are leaving them little wiggle room. Put another way, the problems facing Sears are effectively an extremely acute version of the problems facing the broader industry.

“We’re heading more and more into a distressed market,” said Bobrow, managing director at Wells Fargo Capital Finance. Whitmore, managing director of retail finance, says retailers are laboring under debt levels that “just eclipses anything we saw in the recession.”

Still, there are some reasons to be optimistic. Some chains have improved online sales, which Moody’s said could increase operating income by 5% or 6% this year. The ratings firm raised its outlook from stable to positive in October, the first shift since 2015. Only about 4.9% of retail mortgages were overdue in January, down from more than 6% at the start of 2018. However, these sunnier data points can largely be attributed to the fact that many of the biggest struggling retailers have already failed.

And defaults continue to be a problem. Default rates on retail junk bonds have risen to 10.2% as of December, according to Fitch Ratings, more than double the level from the same period in 2017. 

With that in mind, Bloomberg has published a list of some of the most troubled large retailers who could be at risk of bankruptcy during the year ahead.

Neiman Marcus

The luxury retailer is saddled with nearly $5 billion of debt after its 2005 leveraged buyout and its 2013 sale to another set of private equity owners. The retailer has a $2.8 billion loan due next year, and has too much debt relative to its earnings, Moody’s analyst Christina Boni said in an interview. “If we had a magic wand and could get rid of their balance sheet issues, Neiman could move forward, focused on its core operations,” she said.

The retailer’s 8 percent notes due October 2021 trade at less than 50 cents on the dollar. Its first round of talks with its lenders ended last year in stalemate. The company is trying to talk to creditors again to cut its borrowings. A representative for the Dallas-based retailer said the company is confident it can come to a “mutually beneficial solution” with stakeholders. Neiman Marcus is in full compliance with debt agreements and has ample time to refinance its debt, the representative said.

NM is facing a veritable “debt wall” that will be almost impossible for the company to surmount without new financing.

Petsmart & Petco

Two of the largest pet supply stores continue to face competitive pressures from mega-retailers like Amazon.com Inc. and Walmart Inc. Both PetSmart and Petco have struggled to improve their online sales to help keep competitors at bay.

PetSmart acquired Chewy.com in 2017, taking on $2 billion of additional borrowings in the process. Unfortunately, PetSmart’s earnings are declining, making it harder to carry its debt, Moody’s analyst Mickey Chadha said.

A representative for PetSmart said, “The pet category continues to grow. While we continue to experience customer channel shift to online at PetSmart, we feel we are well positioned to capture and benefit from the growth in online through Chewy, and we are gaining market share on an aggregate basis.”

Petco has less debt, Chadha said, but it remains to be seen whether its own online platform can stay competitive, and both chains are at risk of losing exclusive products that draw shoppers.

A representative for Petco said the company rebuilt momentum last year and returned to growth. The company focused on improving nutrition in their pet food, expanded its grooming, training and veterinary services businesses, and achieved “double-digit growth” in e-commerce, the representative said.

J.C. Penney

J.C. Penney has been through it all: boardroom battles, lawsuits, management turnover, activist battles — and that was just in 2013. In the five years since, it has had three CEOs. The current head, Jill Soltau, took over in October and said the retailer is on track to generate free cash flow in the latest fiscal year and reduce its bloated inventory.

To do so, it may have to shutter a whole lot more outlets. The global retail think tank Coresight Research predicted one fifth of U.S. department stores — about 1,150 — will close between 2017 and 2023 no matter what they do. “The U.S. has far too many department stores,” said Deborah Weinswig, Coresight’s CEO. “In particular, it has far too many midmarket department stores that are competing in a similar, and highly challenged, space.”

A spokeswoman for J.C. Penney said that credit rating firms have maintained their highest liquidity rating for the retailer, and it has only $160 million of its more than $4 billion of debt coming due in the next four years.

Iconix Brand Group

Over the past four years, the owner of brands such as London Fog and Mossimo has endured a U.S. Securities and Exchange Commission accounting investigation, which isn’t over, and the departure of its founder as sales steadily slid. Now, Iconix has around $700 million of debt, including more than $100 million of busted convertible notes due 2023, which trade at about 44 cents on the dollar.

It’s even fighting with Jay-Z over his Rocawear brand, which it acquired in 2007. Eric Rosenthal, senior director of leveraged finance at Fitch Ratings, says the company is a “likely default” this year. Representatives for Iconix didn’t return requests for comment.

As if the situation wasn’t already dire enough, just imagine what the impact could be when the next recession finally arrives, or trade talks fail and Trump moves ahead with the next round of sanctions – or both happen simultaneously.

via ZeroHedge News http://bit.ly/2SjhtaD Tyler Durden

Authored by Mike Shedlock via MishTalk,

Young adults are delaying marriage longer than ever. Student debt is a key reason…

A St. Louis Fed study shows As Fewer Young Adults Wed, Married Couples’ Wealth Surpasses Others’.

Since the 1960s, the median age at first marriage has steadily increased for both women and men. The last three decades were no different for young adults: The age at first marriage went from 26.2 for men and 23.8 for women in 1989 to 29.5 and 27.4, respectively, in 2016. As marriage rates decline in young adulthood, more young adults are choosing to cohabitate (reside with an unmarried partner) and are doing so at earlier ages. The increase in unmarried partnered young adult couples is evident. The share of married households dropped steadily from around 57 percent in 1989 to 37 percent by 2016, while partnered households grew from about 7 percent to 21 percent.

Wealth Effect

As the share of married young adult households declines, their median net worth (both total and when omitting housing-related assets and debts) has remained consistently higher than that of single households. From 1989 to 2016, the typical married household had around three times as much wealth as a partnered or single household.

Student Loan Debt Is Widespread across Young Households’ Balance Sheets

The shifting share of married versus unmarried young adult households is also associated with changes in the composition of debt. This shift is most pronounced when examining the rise of student loan debt. Recent research suggests that growth in student debt levels is associated with marriage delays or avoidance. This suggests that young adults increasingly feel that their debt is an economic barrier to transitioning to adulthood and forming a family.

​

In 2013, the share of young adult households with student loan debt, 42.1 percent, surpassed the credit card debt rate, 40.1 percent, for the first time. By 2016, 46 percent of young adult households had student loan debt, triple the 1989 percentage.

Heavy Student Loan Debt Forces Many Millennials To Delay Buying Homes

​

NPR reports Heavy Student Loan Debt Forces Many Millennials To Delay Buying Homes

Homeownership rates for people ages 24 to 32 dropped nearly 9 percentage points between 2005 and 2014 — effectively driving down homeownership rates overall. In January, the Fed estimated 20 percent of that decline is attributable to student loan debt.

“It’s not that they’re not going to buy homes. It’s just that they’ll purchase these homes later in life,” says Odeta Kushi, deputy chief economist at real estate research firm First American.

Baby boomers were 25, on average, when they purchased their first homes; millennials, by comparison, are waiting almost a decade longer, Kushi says.

“Approximately 40 percent of those who start college do not finish within six years. … That’s a huge number,” says Laurie Goodman, co-director of the Housing Finance Policy Center at the Urban Institute.

For those people, it is the worst of all worlds — they have the school debt without the higher wages to show for it.

Attitudes, Attitudes, Attitudes

Homeownership rates may rise, but not to the same rate as boomers. Student debt is only one pf the reasons. Attitudes about marriage, having kids, mobility, and debt have all changed.

This is not 1960 or 1971.

To top it off, houses simply are not affordable. That’s what the cohabitation rate shows. Wages have not kept up with home prices even without the burden of student debt.

via ZeroHedge News http://bit.ly/2DWQzfX Tyler Durden

We were half-joking when we speculated last week that QuadrigaCX CEO Gerald Cotten – founder of a Canadian crypto exchange that has become embroiled in a $150 million fiasco after Cotten died and purportedly took the keys to the exchange’s cold wallets to his grave, rendering his customers’ coins immovable – faked his own death in a foreign land to abscond with a fortune belonging to his customers. But a Bloomberg report published Wednesday evening has raised red flags suggesting that this ludicrous “conspiracy theory” might soon become a “conspiracy fact.”

Gerald Cotten

But since Quadriga filed for bankruptcy protection last month in the face of a rash of lawsuits being filed by angry customers demanding their coins be returned, a group of analysts and crypto-sleuths have been trying to suss out whether the claims made by Quadriga and Cotten’s widow – that the notoriously security-conscious (some might say paranoid) executive was the only employee who handled moving coins deposited with the exchange, and that he had recently shifted the bulk of the exchange’s holdings into “cold storage” platforms to which only he possessed the encrypted key, which they have been unable to locate – hold water.

And as it turns out, there has been some suspicious activity that, at first brush, would seem to call these claims into question. As one Cornell professor who spoke with BBG claimed, Quadriga’s story didn’t pass “the smell test.” If the coins were truly frozen, then why hadn’t the exchange at least furnished the public keys that would allow auditors to verify their holdings on the blockchain?

The argument that that’s what happened with Quadriga didn’t pass the smell test for many in the industry who are adept at scouring the anonymous ledgers that underpin the decentralized networks for evidence of where digital coins may be stored.

“The Quadriga story doesn’t make sense,” Emin Gün Sirer, a professor at Cornell University and co-director of the Initiative for CryptoCurrencies and Contracts, wrote in an email Wednesday. “The one amazing thing about blockchains is that anyone can audit, in essence, any company.”

[…]

“If the funds are frozen and the cold wallet is inaccessible, it should be possible for the exchange to provide the cold wallet addresses so their claims can be verified with the help of the blockchain,” Sirer said.

But the fact that the exchange hasn’t disclosed which wallets belong to it hasn’t stopped amateur investigators from analyzing transactions and taking an educated guess.

And what they found might come as disturbing – at least for QuadrigaCX’s 115,000 customers. The analysts said they couldn’t find any cold wallets holding the Ether that supposedly was one of the cryptocurrencies held on the exchange. Instead, they found that Quadriga had been moving Ether from its wallet to larger exchanges through mid-January.

But that would seem to contradict the exchange’s story that Cotten was the only one who had access. After all, he died in December.

Analysis firms such as Elementus say that by examining the blockchain patterns, they can guess which particular wallets holding coins belong to. The researcher says it couldn’t find any cold wallets holding Ether, one of the cryptocurrencies that’s missing. Instead, Quadriga was moving Ether to larger exchanges through mid-January, Elementus said.

At the same time, the patterns could mean that the exchange had set up automatic transfers to larger exchanges when its wallet balances reached a certain amount, or, alternatively, that “there’s some fishy business going on,” Elementus founder Max Galka said.

The head of one exchange where Quadriga had stashed some of its coins said that the vast majority of its holdings recently disappeared. He also noted that not being transparent about where coins are on the blockchain is troubling.

Jesse Powell, head of exchange Kraken, said it has some Quadriga balances. Of about 230,000 Ether coins that Quadriga is supposed to have had, only about 1,000 coins remain in its own wallets, Galka said.

“Not to be transparent” about where the money is exactly on a blockchain “is unusual,” said Christine Duhaime, a Canadian lawyer specializing in anti-money laundering.

According to the company, Cotten, aged 30, died of complications from Crohn’s disease in Jaipur, India in December while reportedly doing research for an orphanage he planned to build.

But if the coins have in fact been moved since his death, that could mean one of two things: Either the exchange is lying, and Cotten’s former colleagues are seeking to take advantage of his death by robbing his customers.

Or, Cotten is still alive, and has already taken the money and run?

via ZeroHedge News http://bit.ly/2HYTbxV Tyler Durden

Authored by Mac Slavo via SHTFplan.com,

The state government in Hawaii wants to increase the smoking age to 100.  Although pretty much everyone on Earth knows smoking is damaging to a person’s overall health, the nanny state is taking it upon themselves to ban the use of more substances.

Nothing good can ever come from the government dictating to people what they are allowed to put in their bodies, and that includes smoking.  Are we free or not? Do we own ourselves or not? Governments assume they own us as tax cattle and therefore it’s their right to tell us how to live our lives.  Unfortunately, too many bow down to the whims of the state while others enforce these nanny state policies.

If this bill succeeds in becoming a law, it would effectively ban the use of cigarettes for a very vast majority of the Hawaiian population. The bill was proposed by Democrat Richard Creagan, an obvious authoritarian. Even if it does become a law, laws hinge only on the population’s willingness to abide by them, so it could be futile much like prohibition was. Not to mention worldwide smoking rates are plummeting to people voluntarily making the decision that it isn’t good for them. According to the BBC, Creagan, who was an emergency room physician before he was elected as state representative in 2014, calls the cigarette “the deadliest artifact in human history” in the bill.

The new bill, HB 1509, demands that the smoking age go up to 30 in 2020, 40 in 2021, 50 in 2022, and 60 in 2023. The last jump will take place in 2024 when people would need to be 100 years old to buy cigarettes.

 “We don’t allow people free access to opioids, for instance, or any prescription drugs,” Creagan said in defense of his tyrannical bill.

And even though the government has banned opioids without a prescription, there’s an opioid addiction crisis lowering the life expectancy of Americans.  Prepare for a cigarette black market in Hawaii should Creagan get his way.

All nanny state policies including taxation beg the question: who owns you?

via ZeroHedge News http://bit.ly/2Sxz4ei Tyler Durden

Authored by Joel Bowman via InternationalMan.com,

Man: He’ll go along with just about anything.

Given the right circumstances… a little programing… and enough time for it all to marinate in his soft, mammalian brain… there is almost nothing Homo Credulus will not learn to embrace.

Don’t believe us?

Take a look at the historical record; you’ll soon wonder how we ever got this far.

Sure, you’ll discover gizmos and flying contraptions… art and agriculture… music and mathematics. You’ll witness spectacular scientific breakthroughs, the number “0” and a man’s footprint on the moon. You’ll also find automobiles with so many cup holders, you won’t know where to holster your oversized 7/11 Big Gulp.

But you’ll also scratch you head. Perhaps you’ll even weep. And if you think hard enough, you’ll put a few things to serious question…

“Central banks?” “Modern democracy?” “The Rosie O’Donnell Show?”

How has mankind survived such atrocities? Self inflicted, no less! And why, moreover, does he rush so earnestly to repeat and replay his worst mistakes?

Don’t be too hard on yourself, Dear Reader. After all, repetition is nothing new…

You’ll recall that it was the Greeks who first gave the world democracy – from the Greek, dēmokratía, literally “Rule by ‘People’”. (And yes, it was those very same Greeks who put their own beloved Socrates to death… by a majority vote of 140-361.)

Today, democracy is a cherished tenet of “the West.” It is woven into the civic religion, sewn into the social fabric. Men march off eagerly to fight for it, to proselytize it … and to die in forgotten ditches defending it.

At least, that’s what they believe they’re doing. As usual, the poor saps have been duped. Herewith, a little historical context…

The phrase “Making the world safe for democracy” was actually a marketing slogan, coined back in the 1910s, as a way to sell “The Great War” to America. Weary from their own disastrous Civil War just a few decades earlier, in which hundreds of thousands gave up the ghost, Americans were mostly inward looking at the time. That is to say, they wanted little to do with what they largely saw as a “European affair.”

Polls might have indicated no appetite for battle… but the nation’s politicians were nonetheless starved for military misadventure. They sensed big profits abroad, both in manufacturing armaments and making onerous bank loans to foreign lands. Sure, “the nation” would have to fill tank and trench with warm young bodies… but very few soldiers would carry senatorial surnames along with their rifles.

And so, after a public relations campaign of truly epic proportions, America marched off to war… wrapped in the delusion they had freshly been sold.

Eddie Bernays, the man who coined the phrase and, thus, peddled the war to America, made a fortune for his efforts. He was even invited by Woodrow Wilson to attend the Paris Peace Conference, in 1919, as a show of gratitude for his services.

There, Bernays learned the full impact of his “democracy” slogan. An obviously bright fellow, the surreal experience caused him to think…

If people will line up to kill one another under influence of a mere marketing campaign… they could surely be convinced to do, say and buy just about anything!

Bernays was right. In fact, he wrote a series of books, detailing his insights. They included Crystallizing Public Opinion (1923), A Public Relations Counsel (1927) and a neat little number titled Propaganda(1928), in which Bernays laid out the blueprint for mass social and psychological manipulation.

The collected works went on to become a huge success… and the favorite of none other than Joseph Goebbles, Reich Minister for Propaganda in Nazi Germany between 1933-45.

Bernays himself, writing in his 1965 autobiography, recalls a dinner at home in 1933 where…

Karl von Wiegand, foreign correspondent of the Hearst newspapers, an old hand at interpreting Europe and just returned from Germany, was telling us about Goebbels and his propaganda plans to consolidate Nazi power. Goebbels had shown Wiegand his propaganda library, the best Wiegand had ever seen. Goebbels, said Wiegand, was using my book Crystallizing Public Opinion as a basis for his destructive campaign against the Jews of Germany. This shocked me. […] Obviously the attack on the Jews of Germany was no emotional outburst of the Nazis, but a deliberate, planned campaign.

It is indeed chilling to think of such a heinous undertaking as being engineered, blueprinted, premeditated and carried out according to some kind of script. And yet, there it is… in Bernays’ own words, the “Father of Propaganda.”

Having acquired somewhat of a tainted reputation-by-association, propaganda, itself, underwent a “strategic rebranding” after WWII. But make no mistake, the very same métier thrives to this day, under the more socially palatable designation, “Public Relations.”

Still, a ruse by any other name…

“Could we be so stupid again?” wonders the gentle reader. “Might the mob still be swayed by what Charles Mackay termed ‘extraordinary popular delusions and the madness of crowds?’”

Why, of course! That’s the nature of the mob!

Whether in love, finance, politics or any other matter, man is ever wont to be convinced, assured, persuaded, often against his own best interests. Few are the absurdities in which he will not take refuge, invest his hard-earned capital or squander his morality.

All he needs is a good story, something to arrest his imagination and cauterize his capacity for reason. A distraction from his lonely, quotidian existence.

That, and a few crumbs to pass his lips.

The Roman poet, Juvenal, recognized as much when he mocked the panem et circenses (bread and circuses) stratagem almost two millennia ago. In his Satire X, he referred to the Annona (a kind of grain dole) and the famous circus games, held in the Colosseum and elsewhere, as designed to keep the unthinking population fed and happy.

Look around you today, Dear Reader. What do you see, two millennia later, in the Year of Their Lord, 2019 AD?

Stadium sports matches… food stamp programs… and of course, the greatest bread and circuses show ever, modern representative democracy…

Now, as then, the show goes on!

*  *  *

Clearly, there are many strange things afoot in the world. Distortions of markets, distortions of culture. It’s wise to wonder what’s going to happen, and to take advantage of growth while also being prepared for crisis. How will you protect yourself in the next crisis? See our PDF guide that will show you exactly how. Click here to download it now.

via ZeroHedge News http://bit.ly/2DgWKd7 Tyler Durden

When China started tightening its capital controls on both its upper-crust investors and its public and private companies back in 2016, we anticipated that the bubble in popular urban markets (markets like London, New York City, Sydney, Hong Kong and Vancouver) was officially doomed to burst in the not-too-distant future.

And as a flood of stories over the past year have confirmed, once the foreign (mostly Chinese) bid was withdrawn, property prices started to drop. It’s happening in Australia (and especially in Melbourne and Sydney), it’s happening in New York, it’s happening in London and – as we’ve catalogued over the past few quarters, it’s happening in Vancouver, which for a while held the ignominious title of world’s most overpriced housing market.

After a chasm opened up between bids and asks in the Vancouver housing market last year, the halt in home sales has finally started filtering through to prices as reluctant sellers finally cave and cut their prices. According to data from the Real Estate Board of Greater Vancouver, the city’s composite home price (which incorporates prices of houses, condominiums and townhouses) fell 4.5% in January from a year earlier to C$1.02 million ($780,000), the biggest decline since May 2013 and down about 8% from the June 2018 peak.

As we noted above, the drop in prices follows a decline in sales – the biggest drop in two decades – that many have attributed to new taxes, higher interest rates and a crackdown on dark money flowing into the Vancouver area real estate market. Meanwhile, outbound investment, Bloomberg confirms, has slumped.

Ultimately, the Fed-led global monetary stimulus sent prices in these markets roaring to dizzying new highs during the QE era. But now that the Fed is reining in its balance sheet (and until signaling a “pause”, had been raising interest rates, too) prices that rose on the back of a tidal wave of liquidity are now coming back down.

“Today’s market conditions are largely the result of the mortgage stress test that the federal government imposed at the beginning of last year,” Phil Moore, the realtor group’s president said in a statement Monday.

[…]

“Vancouver real estate was one of the largest benefactors,” of that stimulus, says Steve Saretsky, a Vancouver realtor and author of a local real estate blog. “It may be simple to summarize the slowdown as a few local tax policies and tightening of lending standards, but in reality it’s much more complicated,” says Saretsky, who’s now trying to explain the darkening macro picture in a market where many locals have long considered home price appreciation unstoppable.

The very top end of the market has been the hardest hit: Prices in tony West Vancouver have fallen 14% yoy as of January. And as one real estate agent confirmed to BBG, now that foreign buyers are pulling back, sellers who were once asking for C$12 million or C$13 million are asking for…significantly less.

“These homes in West Van were selling for C$12 million, C$13 million two years ago,” says Adil Dinani, a realtor with Royal LePage, a unit of Brookfield Real Estate Services Inc. “Agents are asking me to throw them off for anything – C$8 million, C$8.5 million, whatever it is.”

Dinani, who’s been in the business for 14 years, says there are fewer speculative investors, and foreign buyers have really pulled back. “And what local buyer has C$6 million, C$7 million to put towards a home?” he said.

Still, with Vancouver’s housing market extremely unaffordable when benchmarked to local wages, no local buyers have the money for these homes.

Which can mean only one thing: Prices have further to fall before the equilibrium point is found.

 

via ZeroHedge News http://bit.ly/2MSKXGt Tyler Durden

Just when you thought it couldn’t get any worse for bankrupt California utility PG&E, it got worse.

On Wednesday afternoon, PG&E – which filed for bankruptcy last week as a result of $30 billion in legal liabilities resulting from California’s massive 2017 and 2018 wildfires its equipment may have ignited – was working to contain a natural gas leak from a pipeline that exploded on Wednesday along a major thoroughfare in San Francisco, setting fire to five buildings and leaving thousands without power in Inner Richmond, while prompting people in nearby restaurants to run for their lives as fire crews worked to get a handle on the soaring flames.

The fire erupted just before 1:30 p.m. in front of Hong Kong Lounge II by the intersection of Geary Boulevard and Parker Avenue, officials said according to the SF Chronicle.

The fire triggered an evacuation order for people within a block of the site on Geary Boulevard, a major artery that leads into downtown San Francisco, according to the San Francisco Fire Department. According to Bloomberg, which quoted San Francisco Fire Chief Joanne Hayes-White, eight workers near the explosion have been accounted for and no injuries were reported.

Eight construction workers, hired by an unidentified third-party contractor, were digging in the ground to install fiber optic cables when they hit a gas main, Hayes-White said.

PG&E’s stock plunged as much as 6.3 percent following this latest accident which threatens to pile up even more legal bills on the insolvent utility, which in addition to wildfire costs, is still dealing with the consequences of the San Bruno gas pipeline explosion that killed eight people and leveled 38 homes.

“I’m confident that it’ll be contained soon,” Hayes-White told reporters at the scene. “As soon as the gas leak is tamped down, we’ll have it under control.” The alternative, of course, being that a section of San Francisco burns down is probably too dire for PG&E’s management to even consider.

Hayes-White described the explosion and ensuing fire as extensive but noted that it’s “not as extensive” as the San Bruno blast.

Alas, flames continued to tower above nearby buildings more than an hour after the blast was first reported, when Hayes-White said PG&E was still working to contain the leak. She called the company’s response time to the blast “pretty good.”

For its part, PG&E said on Twitter that it’s working with first responders and urged people to avoid the area.

Bloomberg adds that at least five PG&E workers could be seen digging into the pavement in a crosswalk near the flames more than an hour after the blast. Helicopter footage of the fire scene showed a blackened backhoe near the source of the flames.

Meanwhile, the NTSB didn’t immediately say whether the agency is sending a team to the incident, while the U.S. Transportation Department’s Pipeline and Hazardous Materials Safety Administration, which regulates pipeline safety, said it was gathering information on the blast to determine whether it will dispatch investigators.

“PHMSA recognizes the seriousness of this incident and appreciates the work of the San Francisco Fire Department and all first responders,” the agency said.

In the six years after the San Bruno explosion, PG&E installed more than 230 automatic or remote-controlled valves on its natural gas network, so workers wouldn’t need to manually shut off the flow of gas in an emergency. The company also replaced all the remaining cast-iron pipes in its system with modern plastic and steel pipes, Bloomberg adds. Unfortunately, today – just days after the company’s bankruptcy filing resulting from its sloppy operations and lack of precautions – it appears that whatever PG&E did was not enough.

via ZeroHedge News http://bit.ly/2UMSQ2L Tyler Durden

Authored by Max Yakubowski via CoinTelegraph.com,

Six commercial banks from Saudi Arabia and the United Arab Emirates (UAE) have joined a digital currency project, major Saudi Arabian financial news portal Argaam reports on Feb. 5

Referring to comments from the UAE central bank (UAECB), Agraam notes that the goal of the project is to use cryptocurrency for financing transactions between Saudi Arabia and the UAE.

Image courtesy of CoinTelegraph

The news about developing a cryptocurrency by the two aforementioned countries came in December 2018, when UAECB and Saudi Arabian Monetary Authority (SAMA) had announced that the countries intended to use cryptocurrency for cross-border transactions.

Today’s news underlines that six unnamed commercial banks will join the interbank digital currency project, dubbed Aber, with a scheduled implementation during next 12 months. The article also adds:

“The currency’s official issuance is conditional on the outcomes of the “proof-of-concept” stage. The Saudi Arabian Monetary Authority (SAMA) and the UAECB will decide on the feasibility of the currency’s practical applications.”

Last month, Saudi Arabia and the UAE made an announcement that the two countries have agreed to cooperate on joint cryptocurrency development targeted to better understand the development of blockchain technology, Cointelegraph wrote on Jan. 20.  

As Cointelegraph reported back in October, the Dubai government also intends to use a digital currency backed by the state and pegged to the UAE’s fiat currency, the dirham, for utilities payments.

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China appears to be shying away from an incredibly efficient AI-powered crimefighting system – perhaps because since 2012 it’s busted over 8,700 government employees engaging in misconduct ranging from embezzlement, to abuse of power, to nepotism and more. 

The system, dubbed “Zero Trust” was developed in partnership between the Chinese Communist Party’s internal monitoring institutions and the Chinese Academy of Sciences in order to “monitor, evaluate or intervene in the work and personal life of public servants,” according to SCMP‘s Stephen Chen. 

According to state media, there were more than 50 million people on China’s government payroll in 2016, though analysts have put the figure at more than 64 million – slightly less than the population of Britain.

To turn this behemoth into a seamless operation befitting the information age, China has started adapting various types of sophisticated technology. The foreign ministry, for instance, is using machine learning to aid in risk assessment and decision making for China’s major investment projects overseas.

Beijing has been at the forefront of facial recognition technology, such as their “SkyNet” system deployed in over 16 provinces, cities and autonomous regions which can instantly scan faces and compare them to a database of criminal suspects at a speed of 3 billion times per second, according to People’s Daily. In Guizhou, the movement of every police officer is tracked in real time. 

Meanwhile, China has gone to great lengths to ensure the fidelity of its government data – inking contracts with companies like ZTE to develop blockchain technology in order to prevent bad actors from modifying information. 

In order to tie China’s monitoring apparatus together, “Zero Trust” can cross-reference over 150 protected databases across Chinese central and local governments – allowing the system to create sophisticated, multi-layered social relationship maps which can then be run through machine-learning systems in order to map out behaviors of government employees. 

For example, the system will flag unusual bank account activity – such as a giant increase in savings, or the purchase of a car, “or bidding for a government contract under the name of an official or one of his family or friends,” notes SCMP. 

“It can even call up satellite images, for instance, to investigate whether the government funding to build a road in a village ended up in the pocket of an official,” for example. 

This was “particularly useful” in detecting suspicious property transfers, infrastructure construction, land acquisitions and house demolitions, a researcher said.

…

Once its suspicions have been raised it will calculate the chances of the action being corrupt. If the result exceeds a set marker, the authorities are alerted.

A computer scientist involved in the programme who asked not to be named said that at that stage a superior could then contact the person under scrutiny and perhaps help him avoid “going down the road of no return with further, bigger mistakes”. –SCMP

Beijing has experimented with Zero Trust in 30 counties and cities – just one percent of China’s total administrative area – and mostly in backwater counties that are relatively poor. 

According to one researcher connected to Zero Trust, the idea for the test was to “avoid triggering large-scale resistance among bureaucrats,” particularly powerful ones, to the use of AI and tracking bots to monitor government. 

Since 2012, the system has busted 8,721 government employees “engaging in misconduct such as embezzlement, abuse of power, misuse of government funds and nepotism.”

Most of them were given warnings or minor punishments, while a few were actually sentenced to prison. 

And for some reason, some governments have decided to deactivate the system, according to the researchers – one of whom added that officials “may not feel quite comfortable with the new technology.” 

Zhang Yi, an official at the Commission for Discipline Inspection of the Chinese Communist Party in Ningxiang, Hunan province, said his agency was one of the few still using the system.

“It is not easy … we are under enormous pressure,” he said, insisting that the main purpose of the programme was not to punish officials but to “save them” at an “early stage of corruption”.

“We just use the machine’s result as reference,” Zhang said. “We need to check and verify its validity. The machine cannot pick up the phone and call the person with a problem. The final decision is always made by humans.” –SCMP

Over 1.4 million government officials have reportedly been disciplined since Xi rose to power in 2012, according to the report. Unsurprisingly, government officials have been hesitant to provide data to the Zero Trust project – however “they usually comply with a bit of pressure,” according to SCMP‘s anonymous source. 

Overall, China is growing increasingly reliant on AI for day-to-day operations. Last month, for example, a Shanghai court became the first in the country to utilize an AI assistant at a public hearing. 

The machine, code-named “206”, has the ability to record conversations, show evidence such as surveillance camera footage when mentioned by lawyers, and compare testimonies to help judges spot discrepancies, the report said. –SCMP

The system is expected to reduce the likelihood of an incorrect verdict, according to one judge. 

Meanwhile, who’s watching the watchers if they simply turn off their robot overlords?

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