Month: July 2019

Authored by Simon Black via SovereignMan.com,

The average Westerner who hasn’t traveled very much believes Moscow to be a cold, bleak, desolate capital city that’s filled with Stalinist-era architecture and a population that lives in utter misery.

But the reality of this place is nearly the complete opposite.

Moscow is a bright, beautiful, cosmopolitan city. I’ve always found Moscow to feel more European than most European capitals, with gorgeous architecture that never seems to end.

Moscow is easily as nice as Paris, London, or Vienna… with a population larger than all three. I like it here more and more every time I visit.

It has some of the nicest restaurants in the world, beautiful parks and monuments, and a highly sophisticated, educated, cultured population.

The city is quite prosperous too. But it wasn’t always that way.

Moscow was once the capital of the Soviet Empire… the most infamous and failed experiment with Socialism in the history of the world.

Russia’s humiliating tale of Socialism grew out imperial discontent– a period starting in the 1500s when wealth was concentrated in the hands of the Tsar and his key lieutenants. Everyone else lived as peasants in abject poverty.

My friends and I toured a museum at the Kremlin over the weekend and saw endless artifacts from the days of the Empire– golden chalices, diamond-encrusted silverware, magnificent carriages.

No doubt the royals lived absurdly well at the expense of everyone else. And by the early 20th century, the seeds of revolution had been firmly planted.

Lenin and his Bolsheviks finally seized power in 1917. And after they stamped out all remaining resistance and opposition, they set out to remake the country into a communist masterpiece.

It took 69 years for the Soviet Union to collapse. And by the time that happened, there was no private property, private business, or private wealth.

Decades of central planning had extinguished any incentive to work hard, take risks, and innovate. And most people were destitute and impoverished.

Yet over the past 30 years this country has become wealthy once again. Russians enjoy a high standard of living– much higher than many European countries– with some of the lowest tax rates on the continent.

(GDP per capita in Moscow is actually slightly higher than in Washington DC, and much higher than most US cities like Houston, Dallas, Los Angeles, or Miami.)

None of this is due to Socialism. And Russians know it.

They still pay lip service to Lenin… there are tombs and monuments and buildings bearing his name, mostly out of reverence for history and traditions.

But Russians embraced capitalism long ago. They had their experiment with Socialism when the Bolsheviks took over in 1917. And they’re not going back.

Meanwhile, over in the Land of the Free, nearly half the country is running as fast as they can to Socialism.

The reasons are much the same as in imperial Russia– there’s growing discontent about the divide between rich and poor.

And as more and more people in the West feel left behind and barely able to make ends meet, the call to Socialism grows stronger.

There have been two formal debates so far among US Presidential candidates, both of which seemed to be Bolshevik beauty pageants.

The candidates talk about guaranteeing a government job for everyone, free education, free healthcare, eliminating private insurance altogether.

They demonize private profit and wealthy individuals, and propose more government as the solution to everything that ails the nation.

These are all Bolshevik principles ripped straight out of the Communist Manifesto – nationalization of private industry, central planning, government controlled labor and education, heavy taxation, and constantly complaining about the Bourgeoisie.

I’ve been looking back lately over the last decade of Sovereign Man (we recently hit our 10 year anniversary two weeks ago.)

Over the years I’ve written extensively about how the Bolsheviks are coming to the Land of the Free… and most of the West.

Well, those days are over. It’s clear that the Bolsheviks are no longer coming. They’re here. And their movement is firmly entrenched.

One of the Presidential candidates was actually booed and jeered at a political rally in California earlier this month by voters in his own party simply because he suggested that “Socialism is not the answer.”

A growing number of constituents believe quite adamantly that Socialism is absolutely the answer. A recent Gallup poll showed that 43% of Americans now prefer socialism to capitalism.

This isn’t some fake news conspiracy theory. It’s happening.

And acknowledging this reality doesn’t make you a doomsayer or even a pessimist. Normal, rational people should be able to see this obvious trend and at least consider having a Plan B.

We’ll talk more about that in the coming days.

And to continue learning how to ensure you thrive no matter what happens next in the world, I encourage you to download our free Perfect Plan B Guide.

via ZeroHedge News https://ift.tt/2JgCziA Tyler Durden

Headlines started hitting the wires after 11 am Monday about a ransomware attack that has brought down Georgia Courts’ digital information operations. Officials confirmed to WXIA Atlanta that the website for Georgia’s Administrative Office of the Courts and Judicial Council of Georgia had been down all morning.

Georgia Courts spokesman Bruce Shaw said all systems hadn’t been affected, but the network as a whole was taken down to quarantine the infection. Shaw said the IT department would be meeting with “external agencies” (FBI Atlanta) on Monday afternoon to asses the severity of the attack.

Shaw didn’t disclose how much the hackers demanded to unlock an unknown amount of computers from the crippling ransomware. There was no mention of what type of payment they required if it was cryptocurrency or US dollars.

Government officials said private data isn’t stored on the systems that were affected, and that no social security or other personal information was compromised.

A ransomware attack is often software code that holds a user’s computer hostage until a “ransom” fee is paid. Ransomware often infiltrates computers as a self-replicating malware that duplicates itself to spread to uninfected computers.

This isn’t Georgia’s first ransomware attack.

Back in March 2018, the City of Atlanta was hit with ransomware that significantly disrupted government operations. In that case, Atlanta officials rejected the idea to pay the $50,000 ransom, ended up costing the city millions of dollars to recover from the incident.

In March, Georgia’s Jackson County paid hackers a $400,000 ransom payment to restore computer systems.

And currently, on Monday morning, the third city in Florida has been attacked by hackers demanding payment to restore servers. Key Biscayne joins Riviera Beach and Lake City in having its computer systems infected by ransomware after it identified a data security breach last week. In all three cities, the ransomware entered the network through an employee opening up a web link that allowed it to be uploaded.

Paying hackers to unlock ransomware isn’t advised for local governments because there’s no guarantee that a decryption key will be provided.

In Baltimore’s ransomware attack in May, hackers wanted approximately $80,00 in Bitcoin – and city officials followed protocol by rejecting the payment – has ended up costing taxpayers $18 million to restore systems.

Increasingly, Cybercriminals are taking American cities hostage, and in many cases they are getting the ransom paid out, no questions asked, confirming that most US cities across are unprepared for ransomware attacks, which ensures that such hacks will only accelerate. This is also why city-hacking will increase to more municipalities across the country into the 2020s, hitting the most vulnerable networks first, and will likely end up a key topic in the 2020 presidential elections.

via ZeroHedge News https://ift.tt/2RNnYz6 Tyler Durden

Authored by Tom Luongo,

Donald Trump did the unthinkable. He went to North Korea. He stepped over the line in the sand demarked by Washington protocol for nearly seventy years.

And that Washington establishment, predictably, hates him for it. It can be felt from all sides of the political rotunda. They hate that Trump realizes their position, one of maximum pressure, isn’t working.

They despise that Russia and China will benefit from ending this frozen conflict not to mention Koreans on both sides of the DMZ.

The cynic in me thinks they are angry that the American people will benefit as well.

So this weekend was a good one for peaceniks around the world. Trump and Chinese Premier Xi Jinping agreed to back down on the worst of his trade war demands.

Trump presumably had a good meeting with Russian President Vladimir Putin which likely set the stage for his meeting with Chairman Kim Jong-un. Remember Kim met with Putin earlier this year and designated him as his go-between with Trump after the talks in Hanoi fell apart.

The Bile Belt

This event should not be downplayed. Trump showed great humility and generosity towards Kim at the moment of truth. We should be cheering this regardless of what we think of him personally.

Diplomacy is not groveling. It is the acknowledgment of the other person’s basic humanity, a fundamental point lost in the political cesspit that is D.C.

Because of his previous mistakes and belligerence, only Trump could have made the walk across the DMZ to meet Kim on his territory. Only someone as blunt as Trump could cut through the nonsense that North Korea isn’t capable of independent action.

And only people so full of bile and despite would not be happy about this. Only people so enthralled with the thought of war and their own political and social ambitions would look at this event and seek to tear it down.

These are the people who lost yesterday in Trump’s historic and brilliant bit of diplomacy. And they are complaining bitterly about it today.

Everyone else wins.

In the land of the Twitterati, after stripping away the snark masquerading as analysis, we are left with a bunch of malcontents bemoaning their lost relevance.

I’m not praising him today to get back on anyone’s good side. I’ve been very straight about this. When Trump does good I praise him. When he screws up or acts dangerously I lambaste him.

And that is exactly how we should treat, at all times, all politicians everywhere. The telling point today is that the whole of the Washington establishment, Democrats and Neocons, are aghast at the prospect of peace.

The Wrong Path to Peace

I’ve been a harsh critic of most of Trump’s foreign policy moves since April 2017, when he bombed the airbase at Khan Sheikoun in Syria. It was the first inkling that he didn’t understand the rules of the game he was playing.

And those initial bombings would cost him far more in the end then he could ever gain. Not only did he lose most of his first term in office but he lost the trust of most world leaders pandering to establishment forces within the U.S. Deep State and donor class.

We can trace each move since then as a continuum leading up to Iran shooting down a U.S. Global Hawk drone and see we were always going to end up right where we are.

Because the alternative is a world at war. And think what you want about Trump, I’ve never been convinced that he was interested in that. If anything his problem has been allowing his fundamental humanity to be twisted into something ugly, limbicly lashing out at ‘bad guys’ like at Khan Shiekoun and not seeing the lies around it for what they were.

In the past few weeks we’ve seen a smarter, savvier Trump avoid the traps his allies and advisors set for him. He’s showed immense restraint.

And now, Trump is climbing down off the immense mountain of entitlement he and his advisors placed him on. By stepping over the line into North Korea and meeting with Kim for nearly an hour he’s beginning to deliver on the promises he made during the 2016 campaign.

Why wouldn’t I or anyone else be cheering?

When Iran shot down that drone I said on Sputnik Radio that to solve Iran’s nuclear weapons problem Trump should be looking to North Korea. Getting Kim to agree to freezing warhead production, and presumably dissemination, ends the possibility of Iran achieving that goal anytime soon.

After meeting with most of his ‘enemies’ at the G-20, Trump did just that. He pivoted away from Iran, now a source of political pitfalls, back to North Korea which was the right thing to do.

If Iran wanted a bomb they would have one. If Russia and China wanted Iran to have one, they would have one.

So all of this talk is simply theater. Just like the strategic importance of North Korea in 2019 is still relevant with China fully capable of projecting its interests on its own.

It’s time for this insanity to end. Full stop.

The Koreans want it. The Russians want it. The Chinese want it. Japan wants it.

And we should want it too.

Free at Last?

From the moment he began to engage Kim directly Trump’s strategy was to acknowledge the reality that North Korea can stand on its own. That it is not a puppet state of China.

It has been a constant theme of his while his advisory team tells him otherwise.

Well, they were in Mongolia on Sunday, while the best proxy for his antiwar base was on Air Force One.

In the room: N. Korean Foreign Minister Ri Yong Ho (left) and Tucker Carlson. pic.twitter.com/KrmTOEBiZf

— Jonathan Cheng (@JChengWSJ) June 30, 2019

Trump’s instincts about denuclearization are correct and laudable. It has been his execution of how to achieve that goal that has been the problem.

He has allowed unbridled hawks whose sanity should surely be questioned to define him and his policy. He knows the failure of the Hanoi talks were a mistake.

He knows that the adventure in Venezuela was as well.

In the past ten days he’s called out National Security Advisor John Bolton publicly, called him a hawk and sent him to Mongolia while Trump made history.

Say what you want about him, Trump is pretty good at this messaging thing.

The coming days will be filled with discussion about what this all means.

I’m not going to do that now. Let’s enjoy the first bit of good foreign policy news since April 2017 and realize that the ship is turning and headed back to port.

Trump’s not out of the rough seas yet, but he finally found the right course to steer.

*  *  *

Join my Patreon or donate to Gold Goats ‘n Guns if you hate war, like peace and hate being lied to. And install the Brave browser to build a new web identity away from Google’s prying eyes where you can earn by browsing and tip your favorite sites (like this one) directly.

via ZeroHedge News https://ift.tt/2NrC76A Tyler Durden

Apparently, incidentally auctioning off a one-hour lunch date to a crypto evangelist who, we imagine, used the opportunity to harangue Buffett about his bearish outlook on crypto didn’t spoil the billion investor’s appetite for charitable giving.

Because on Monday, the Oracle of Omaha, 88, said he would give away $3.6 billion in Berkshire Hathaway stock to five foundations, including the Bill & Melinda Gates Foundation, which is overseen by Buffett’s ‘best bud’ (at least when the cameras are rolling) Bill Gates.

The gift is Buffett’s biggest annual pledge yet.

These are the other beneficiaries of Buffett’s generosity, according to CNBC:

The Oracle of Omaha will convert 11,250 of his Class A shares into 16.875 million Class B shares. About 16.8 million of these Class B shares will be donated to five foundations: Bill & Melinda Gates Foundation, Susan Thompson Buffett Foundation, Sherwood Foundation, Howard G. Buffett Foundation and NoVo Foundation, the company said in a statement on Monday.

Here’s a breakdown of Buffett’s annual giving, courtesy of Bloomberg.

According to FactSet data shared by CNBC, Buffett is Berkshire’s largest shareholder; he owns 37.4% of the firm’s Class A shares.

Buffett has never sold any of his Berkshire shares, according to the firm. But he has given away some $34 billion in Berkshire stock since 2006 (when he first pledged to give away nearly all of his wealth to charities), roughly 45% of his holdings. He eventually plans to give away all of his shares during annual grants that will continue until ten years after his estate is settled.

But Buffett isn’t the only conspicuously wealthy American giving away large blocks of stock this week: According to Bloomberg, Walmart heir Jim Waltongave gave $1.2 billion of the retailer’s shares last week. Home Depot Inc. co-founder Bernie Marcus said he’s planning to give away all $4.5 billion of his fortune before he dies.

Meanwhile, several other Wall Street luminaries, including Jamie Dimon and Ray Dalio, have joined Buffett in calling for higher taxes on the wealthy – something that he has long advocated. At least if President Elizabeth Warren fails in her quest to expropriate the assets of every American billionaire, Buffett has made it clear that he’s perfectly comfortable giving away his wealth.

via ZeroHedge News https://ift.tt/2KR1bSo Tyler Durden

One week before the Trump-Xi summit, we explained how Trump – in his pursuit of a lower US dollar, lower interest rates and higher stocks, had managed to outplay Powell.

As we said at the time, having considered firing or demoting Powell at the start of the year, Trump realized he can’t do so directly, so instead he decided to pressure Powell to do his bidding in response to Trump’s actions

To be sure, by now Trump has certainly figured out that his strongest leverage over the Fed is by escalating the uncertainty in the trade and political arena, forcing the Fed to tip its cards and unveil its open-ended dovish policy which the market now expects will result in as many as 4 rate cuts in the next 12 months, setting up Trump nicely for the election, with the S&P at or near all time highs, even if the overall economy continues to deteriorate (it is, however, unclear how much longer markets will ignore the growing risk of a recession just because the Fed has promised to cut rates further).

As such, if Trump feels the need to extract more concession from Powell, all he needs to do is to make good in part or in whole on his $300BN in new Chinese tariffs, which will force the Fed to take on an even more dominant role to preserve the economic cycle by doing the only thing it knows how to do: push assets to new all time highs with even more dovish policies.

Which, we concluded is the reason behind the perverse outcome that the White House is now confident that the more it pushes China – in word or in deed – toward a full blown trade war, the more Powell will be forced to concede to Trump in the simmering feud between the executive and the money printing branches of US government.

One week later, none other than Bank of America has picked up on this argument, describing this relationship between Trump’s trade policies and the Fed’s monetary policy as a “perverse feedback loop”, which would leave the stock market “in a range-bound “collar” trade, with its upside and downside capped by the trade war and the Fed, respectively.”

But first, let’s back up.

In a summary of this weekend’s events, an unimpressed Bank of America writes that the G-20 summit in Osaka proceeded largely as expected, and notes that “additional tariffs were delayed indefinitely, but there was no rollback of earlier measures. The two sides agreed to restart negotiations, and China pledged to buy more agricultural products from the US. There was one positive surprise: US companies will be allowed to sell products to Huawei. Although Huawei is still blacklisted from US markets, the move eases the pressure on Huawei and its US suppliers.”

In its take on the market’s reaction, BofA said that traders are likely to view the summit as a modest positive in the short run, even though the bank saw several reasons for concern.

• First, there are still 25% tariffs in place on $250bn of Chinese exports to the US, and (on average) almost 20% tariffs on $110bn of US exports to China. Here, BofA’s Aditya Bhave writes that “tariff termites have been eating away at growth in China and its trading partners in Europe and Asia-Pacific, some of whom have very little room for policy easing. In the US, the manufacturing sector has started to weaken.”
• Second, the US still has a long to-do list on trade. And while BofA expects a deal with China later this summer, it could take a large market correction to get there. The risk of another round of tit-for-tat tariffs remains elevated. BofA also expect tariffs on a growing list of products and countries in the coming quarters. In addition, if the dollar remains strong despite Fed cuts, and an FX intervention by the US to weaken the dollar is not to be ruled out.

Where this goes back to what we said ten days ago, however, is that as Bank of America notes, the components of the current equilibrium point to “a worrying feedback loop between the Fed and trade policy.” And here is Bank of America saying exactly what we said one ahead of the G-20 meeting:

The Fed is determined to raise inflation by sustaining above-trend growth. To this end it seems willing to offset the negative impact of the trade war on the economy. But the risk is that the “Fed put” could encourage an even tougher stance on trade, which would trigger even more Fed accommodation, and so on (Chart 1). The end result would be a loss of Fed policy ammunition, with an economy that is still soft.

This is what the perverse feedback loop looks like:

Bank of America then continues, with an explanation why the biggest risk going forward is this “perverse feedblack loop between the Fed’s attempts to support the economy and President Trump’s incentives to re-escalate various trade conflicts”, to wit:

suppose (1) the Fed is following a “risk management” approach, in which it tries to raise inflation by sustaining above-trend growth, and avoids disappointing the stock and bond markets, and (2) the Trump Administration only stops escalating the trade war if there are notable signs of pain in the economy or markets.

If this “Powell Put” and “Trump Call” are strong enough, Bhave warns that they could create an ever-escalating trade war matched by an ever-lower funds rate. The stock market would be left in a range-bound “collar” trade, with its upside and downside capped by the trade war and the Fed, respectively.

So what breaks this nefarious feedback loop?

• First, it is BofA’s view that the Fed will not be able to fully offset an escalating trade war: as the uncertainty shock worsens, rate cuts will become increasingly less effective in countering the shock. Even lowering borrowing costs by 2% cannot make up for the risk of a 25% tariff.
• Second, the economy and markets are not the only motivators in the trade war-political costs matter as well. If the trade war expands it will hit more consumer products. But unlike “stable inflation” which can’t be extrapolated into inflation expectations, “the public will view explicit tax increases on consumer items very differently from the subtle price pressures that come from raising input and capital costs.”
• Third, and most insidious, the Trump administration might ingeniously take the opportunity to make a deal with China after the Fed has cut rates, in order to try to “supercharge” the economy and markets going into next year’s elections.

As a reminder, #3 is precisely the scenario that David Rosenberg’s stumbled upon one month ago, when he asked “what if he finally gets the steep Fed rate cuts he has been demanding? After that, he ends the trade wars, tariffs go to zero, and the stock market surges to new highs – just in time for the 2020 election!” However, to BofA even this outcome would be costly, as facing an economy that is even more likely to overheat, the Fed might have to quickly reverse course and start hiking, at the risk of damaging its credibility, which in turn is also why three weeks ago, another BofA strategist, Michael Hartnett said that the biggest risk is if the Fed cuts rates now, a process which would culminate with another asset bubble and the loss of what little credibility the Fed has left.

via ZeroHedge News https://ift.tt/2xqEM5r Tyler Durden

Hunter Biden’s shady business dealings in Ukraine and China, as well as his equally questionable romance with his dead brother’s widow, are rivaling his father’s ‘racist’ comments among the most embarrassing gaffes or scandals of the election cycle thus far.

The latest installment comes courtesy of the New Yorker, which on Monday published an interview with Hunter Biden. The title of the piece is pretty telling: “Will Hunter Biden Jeopardize His Father’s Campaign?” Judging by the interview’s contents, it seems at times like he is doing this deliberately.

During the interview, Biden revealed that he started dating his brother’s widow while recovering from a week spent buying crack from a homeless encampment in LA.

The story begins in early 2016, around the time that Hunter separated from his wife. He moved out of the house he shared with his estranged wife, Kathleen, as his drug abuse worsened. Around this time, he became close with Hallie – his dead brother Beau’s widow – after a 2016 trip with her to the Hamptons. He soon began spending more nights at her place, where the two addressed a “very specific” grief.

Hallie & Hunter Biden

Soon after, Biden decided he needed help. He planned to check himself in to a detox center in Arizona. But he got “sidetracked” during a stop in LA, where he approached a homeless man and asked him where he could buy some crack.

The man reportedly took Hunter to a homeless camp in downtown LA, where he returned several times over the course of a week to buy more drugs, despite having a gun pulled on him. After Hunter got into a fight outside a Hollywood Boulevard club, a man “took pity” on him and brought him to a Hertz car-rental office, where he rented the above-mentioned car and drove it to his detox in Arizona.

Hunter eventually spent a week at Grace Grove Lifestyle Center, a “detox, rejuvenation and healing retreat”.  But he soon left and checked himself into a resort spa. It was there that Hallie flew out to meet him. After their amorous reunion, the two decided to become a couple.

For what it’s worth, Biden’s story appears to corroborate an earlier embarrassing report about him leaving a crack pipe, credit cards and multiple forms of identification in a rental car (despite investigations, prosecutors declined to bring a case against Biden citing a ‘lack of evidence’ that he actually used the pipe).

Hunter and Hallie broke up not long after, but not before the news of their coupling was broken to Joe Biden by a Page Six reporter, who called him for comment on a story about the relationship.

Biden described this period in 2016 to the New Yorker as a troubling time that was “really hard” for him.

“All we got was s–t from everybody, all the time…It was really hard. And I realized that I’m not helping anybody by sticking around.”

Fortunately for Hunter, things have since turned around. Though he has emerged as a potential liability for his father’s presidential campaign, the 49-year-old also recently celebrated his marriage to a South African model. Though scandal continues to dog him: An Arkansas woman recently sued Hunter alleging that he is the father of her child.

Before the campaign ends, we imagine this won’t be the last story about Biden the younger’s crack-inspired antics.

via ZeroHedge News https://ift.tt/2RNeSCs Tyler Durden

Submitted by Ted Dabrowski and John Klingner of Wirepoints

It didn’t take long for new Chicago Mayor Lori Lightfoot to propose a plan that would wash her hands of Chicago’s pension crisis altogether. According to a recent report in Crain’s, Lightfoot wants the state to take over Chicago’s pension debts and merge them with the other pension plans throughout the state. The move would make all state taxpayers responsible for paying down the city’s debts. 

The plan to shift city debts to the state would bail out the mayor from having to raise about $1 billion in additional taxes to pay for increasing pension costs by 2023. A massive tax hike is something she’s desperate to avoid.

But while Lightfoot may think the cost-shift is a solution, it will only make things worse for Illinois. She should expect significant pushback from many sides.

Start with downstate and suburban residents. Sure, their public safety pension funds would get consolidated under the state, too, but it’s the Chicago funds that are some of the biggest and worst-funded in the state. The four city-run funds are collectively funded at just 27 percent and face an official shortfall of $28 billion. 

In contrast, the 650 downstate pension plans are 58 percent funded and have a shortfall of nearly $10 billion. The end result of any statewide pooling of pension funds will be a net bailout for Chicago.

Non-Chicagoans aren’t going to just accept yet another bailout of the city. Downstaters’ most recent bailout of Chicago came when the state’s new education funding formula locked in special subsidies for Chicago Public Schools. That included hundreds of millions in hold-harmless funding as well as $200 million-plus annually to pay for the district’s pension costs. 

The mayor can expect pushback from the rating agencies, too. Illinois already has what Moody’s Investors Service calculates as a $234 billion state pension shortfall, while the state’s retiree health insurance fund has another gaping $73 billion hole. 

Adding $42 billion more – what Moody’s reports as Chicago’s true pension debt – may push the state’s credit rating into junk category. That’s significant since no state in modern times has been rated junk.

Lightfoot’s pension proposal might come as a surprise to some given her comments last week to the Chicago Sun-Times. According to the paper, “Mayor Lori Lightfoot said Friday she’s willing to tackle Chicago’s ‘mounting, looming, all-consuming’ pension debt once and for all, even if it means risking her political future.”

“We cannot keep asking taxpayers to give us more revenue without the structural reforms that are fundamentally necessary to make our city and our state run better. Now is the time to act,” she said.

Lightfoot has obviously given up on structural reforms. Her proposal does nothing to actually reduce the overwhelming debts of the city’s pension funds. Instead, it appears her only goal is to socialize the costs across all state residents.

That’s not “risking her political future.” Making everyone else pay for the city’s debts, if she can make it happen, is the easy way out.

Few options

Lightfoot the candidate knew what a mess the city’s finances were in. The city was already rated junk by Moody’s when she took over, while CPS was five notches deep into junk – worse than even Detroit.

But Lightfoot never signaled a plan for pension reform during her campaign. Her only commitment was that she would protect pensions: ”First, we must start from the firm position that pensions are a promise – and that protecting the retirement security of our public employees is imperative to maintaining a stable middle class and, thereby, our local economy.” 

Now she’s found that, in the absence of reforms, the city is running out of options.

Reamortizations – kicking debt payments further into the future – are getting pushback from both rating agencies and public sector unions alike.

Pension obligation bonds, another kind of can kick that Rahm Emanuel pursued, have also run into opposition. Rating agencies, pension funds and actuarial associations are calling POBs what they really are: a gamble with taxpayer dollars.

City tax hikes aren’t a solution either. Chicagoans are tapped out. City residents have been hit by an avalanche of state and local tax increases over the past several years, including the state’s 2017 income tax increase and the biggest property tax hike in the city’s history. Increasing taxes yet again to get the $1 billion needed for pensions could result in severe backlash against the mayor.

Fixing things

Lightfoot’s words to the Sun-Times are all the more disappointing considering the reforms she could have called for: a constitutional amendment to the pension protection clause, changes to how the city doles out retirement benefits going forward, and tough cuts in upcoming contract negotiations with CPS and other labor unions. 

Instead, her desperate plan abrogates any responsibility for the city’s largely self-inflicted retirement crisis. And more importantly, it leaves nobody better off. Despite all the tricks, Illinoisans, including Chicagoans, would still be under the same mountain of debt. 

Reforms, not can kicks, are the solution to the state’s pension woes. If not, expect more and more Illinoisans to cut their share of retirement debt down to zero by leaving.

via ZeroHedge News https://ift.tt/2XlqyCh Tyler Durden

Left-wing website ThinkProgress, which has never been profitable, has been put up for sale by the John Podesta-founded Center for American Progress (CAP), which had been keeping the site afloat. 

According to the Daily Beast, staff were notified on Monday afternoon that the site was for sale after coming under severe financial strains during the Trump administration. 

“Unfortunately, like so many other news outlets that have relied on advertising to fund its work, ThinkProgress has seen a significant drop in revenue in recent years, along with other financial strains. In addition, events over the last few years have underscored the divergent missions of American Progress and ThinkProgress,” said CAP executive director Navin Nayak. 

“For all of these reasons, we announced to the ThinkProgress staff today that we are searching for a new publisher for the news site. This is a tough decision since ThinkProgress has been a part of CAP Action almost since its founding. While ThinkProgress’ financial challenges are unsustainable for an organization like CAP Action, we are hopeful that there are publishers who would be better able to support ThinkProgress’ mission and better positioned to maximize the significant value ThinkProgress has built up.” 

Launched 14 years ago during the height of the Bush administration, ThinkProgress made a name for itself over time as an unapologetically progressive source of news and a launching pad for several major progressive luminaries. But the site, which is editorially independent from CAP, has struggled in recent years as advertising revenues have dried up and traffic has dipped. According to internal documents previously reviewed by The Daily Beast, the site was facing a $3 million gulf between revenues and expenses in 2019, with $350,000 of it made up by a shortfall in ad revenue and nearly $180,000 of it coming from a drop in expected online contributions. –Daily Beast

The site had previously reduced headcount from 40 to 35 to no avail. 

It is unknown how much CAP is asking for ThinkProgress, or whether the site would be shut down if a suitor isn’t found. 

“We will only entertain serious proposals from publishers and organizations who are genuinely interested in investing in ThinkProgress and supporting its mission,” said Nayak. “Our ideal outcome is for ThinkProgress to continue the important work done by its journalists under the auspices of a new entity.” 

 

via ZeroHedge News https://ift.tt/2J4MKbb Tyler Durden

Authored by Irina Slav via OilPrice.com,

The United Arab Emirates have launched the largest single solar power farm in the world, the 1.18-GW Noor Abu Dhabi, Endgadget reports citing a tweet by the Abu Dhabi government.

The world’s largest single solar plant, Noor Abu Dhabi, with a production capacity of nearly 1,177 MW commences commercial operation – a major milestone for the future of #sustainablenergy pic.twitter.com/HHVMyaMXYY

— المكتب الإعلامي لحكومة أبوظبي (@admediaoffice) June 29, 2019

The facility, which dwarfs the largest solar farm in the United States – the 569-MW Solar Star – is only comparable to solar parks, which combine several separate solar farms. It can supply electricity to 90,000 people, according to official information, from as many as 3.2 million solar panels. As a result, it would offset emissions amounting to 1 million metric tons, which is the equivalent of removing 200,000 cars from the road.

True to its reputation as being a large spender on various cutting-edge projects, the UAE is not stopping at Noor Abu Dhabi. Earlier this year, the Abu Dhabi Minister of Climate Change and Environment announced another, bigger, solar project. It would have a capacity of 2 GW, the official said without going into any further detail. The only project that would be bigger than this one, is Saudi Arabia’s 2.6-GW planned facility in Mecca.

While the Middle East is hardly the first location that springs to mind when one thinks about solar power and other renewable energy sources, the region has been changing, slowly but surely. The International Renewable Energy Agency released a report in February saying the members of the Gulf Cooperation Council alone had plans to install as much as 7 GW in renewable power generation capacity by the early 2020s.

An earlier report from IRENA said GCC could save some 354 million barrels of oil equivalent by switching to renewables for domestic consumption by 2030. That would constitute a 23-percent decline in domestic oil and gas consumption with more of the commodities going for exports: Saudi Arabia is pursuing this strategy of reducing domestic consumption of fossil fuels with a view to boosting exports.

Among the members of the GCC, the UAE is by far the best performer: it is home to almost 79 percent of the total installed solar capacity in the group. It even boasts renewable energy projects that do not require subsidies to be competitive.

via ZeroHedge News https://ift.tt/2KS9ugS Tyler Durden

Even as he repeatedly insisted that Deutsche Bank’s US investment-banking business is a critical part of the bank’s identity and its long-term strategy for offering a European alternative to JP Morgan, Christian Sewing probably knew, on some level, that he wouldn’t be able to survive as CEO if he didn’t agree to some serious cutbacks.

For their sake, let’s hope most of the bank’s front-office employees, the traders and salespeople who have powered DB’s troubled US equities and rates-trading businesses, have been able to read the writing on the wall as well. According to a story published by Bloomberg on Monday, it looks like they have. Because the mood inside 60 Wall can best be described as resigned indifference.

As reports of steep job cuts (as many as 20,000 personnel including hundreds of traders) swirl, the scene inside DB’s main office in the US (it also has a large back-office presence in Jacksonville) has devolved into a tableau familiar to those who survived the financial crisis: Empty desks, boxes piled up in corner offices, traders and other more junior employees leaving for long, boozy lunches at 1 pm – and sometimes never returning for the day.

Junior employees spend part of their days sending out resumes – and their bosses either don’t care, or are actively encouraging them. Everybody – even the executives and managers – seems to be waiting for the next shoe to drop in Frankfurt (the German city where DB’s global headquarters is located), according to Bloomberg.

Begin on the 46th floor, overlooking the East River: brown boxes have been stacked in the offices of the senior-most executive in the Americas. More than 40 flights down, on the trading floor, seats sit empty at mid-morning. Computer screens are black. Some who remain are openly hunting for jobs at rival banks. Their bosses know, and don’t mind.

On a recent weekday, an executive spied junior traders enjoying beers at the nearby Full Shilling pub. It was just past 1 p.m. Older traders could be found at Cipriani on Wall Street, where the famous bellini cocktails are served in wood-paneled rooms or on a terrace between stone ionic columns.

So it goes nowadays at Deutsche Bank in New York, where everybody, from the executives down, seems to sense that more bad news is coming from Frankfurt.

Several senior executives from the US business have either already left, or are planning on making their exit soon. These include Peter Selman, the executive who came out of retirement in 2017 to try and turn around DB’s flagging US equities business. One top executive “hasn’t been seen at work in weeks.”

Executives in New York have for more than a year worked under the cloud of whether the US operation would be sold, gutted or spun off.

Typical internal battles over who bore certain expenses took on more weight when every unit was under a microscope. Peter Selman, who came out of retirement in 2017 to revive the equities business, unsuccessfully lobbied Treasurer Dixit Joshi last year to move as much as 300 million euros of costs allocated to his unprofitable unit to the fixed-income business, people briefed on the talks said.

For his part, Sewing has said consistently – and publicly – that he was committed to the U.S. investment bank since taking over as CEO last year. But the new chief has been struggling to restore confidence among investors and regulators amid the bank’s moribund profitability. After a failed attempt to merge with Commerzbank AG that was encouraged by Germany’s own finance minister, shareholders are pushing for a turnaround plan. Many executives aren’t waiting for that.

Selman is now among dozens already on their way out, the people said. Zia Huque, the CEO of Deutsche Bank’s securities division in the U.S., hasn’t been seen at workin weeks. Tom Patrick, the head of the Americas who joined the bank a decade ago and oversees the relationship with the Federal Reserve, seems to be packing up his office, and Deutsche Bank is considering his replacement.

Several senior traders have also decided to call it a day.

Longtime traders like Brad Kurtzman, Craig Bench and Powell Fraser have also left the bank, followed by dozens of second- and third-tier executives – many of whom can’t find jobs elsewhere. Some US managers said that for years they advised cutting some smaller pieces of the trading business to improve profitability. As they exit, they lament that senior executives didn’t heed their counsel and now need the heavy ax.

That’s left Ashley Wilson, the co-head of equities trading in the Americas, as the most senior executive now effectively charged with reorganizing the unit. Though we imagine that terrible responsibility might prompt her to start updating her resume, if she hasn’t already.

In one respect, the situation at DB’s American unit mirrors what’s happening in Puerto Rico two years after Hurricane Maria. At this point, anybody with the means to leave, has already left. And though DB managed to pass the Fed’s stress test this year, that doesn’t change the fact that, now that the Commerzbank merger has fallen apart, Sewing has run out of excuses to try and protect his bank’s unprofitable i-banking franchise.

Now, all that’s left is to see whether the group will be culled, sold, or shut down in its entirety.

via ZeroHedge News https://ift.tt/2RMOWXp Tyler Durden