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Authored by Jeffrey Snider via Alhambra Investment Partners,

Like so many financial prices, copper’s is tied to both money and economic fundamentals. They call it Dr. Copper for a reason, good as it has been in suggesting ahead of time the direction for the global economy. China is as central for the setting there as well as in “dollars.”

During the early days of the “rising dollar” I wrote that copper was one clear indication being pulled downward by both. China’s economy was slowing, especially the export side, not accelerating as had been anticipated. The narrative during Reflation #2 was the same as it has been throughout Reflation #3 more recently; global growth would rescue any laggards. They only added “synchronized” to the latest one to really emphasize just how much they mean it this time.

From April 2014:

The ongoing disaster in trade demonstrates the miscarriage of that strategy (on both ends), namely not anticipating orthodox failure across every jurisdiction to deliver promised resurrection. There has been no American surge to reignite the export “miracle”, while Europe tries to convince itself and the world that not shrinking counts as a recovery. Now the Chinese are in a nearly impossible and precarious position.

 

I have argued before that behavior in the yuan, the recent “devaluation”, was not initiated at the behest of the PBOC to punish “speculators.” Rather, it seems far more likely that it was a dollar problem, one tracing through both global trade and finance.

That all continued, economy and eurodollars, all the way into early 2016. The downturn was serious enough here in the US, but it was decisive in China.

It might not have seemed that way early on in the turn (I know I didn’t see it that way). As “reflation” was reborn in the middle of 2016, it also took on both proportions dollar and economy. The monetary component of “reflation” was pretty straightforward – less funding pressure meant the “dollar short” in China and elsewhere was less impacted by a somewhat alleviated “dollar shortage.”

As esoteric as all that is, it’s been the economic piece of copper that has been less more misunderstood in my view. Copper is China FAI, and China FAI is all about ghost cities.

I wrote last year:

Thus, copper’s peak in early 2011 coincides with perceptions (including those relating to global money) about how many new “ghost cities” China might still have yet to build. If the global recovery after the Great “Recession” was to be delayed, the Chinese might not need in the foreseeable future much more by way of new construction. The price of copper is therefore in large part a proxy for China’s view of that paradigm (especially given copper’s role in construction finance as collateral).

It was widely believed, and publicized, before the Great “Recession” that there might be as many as 25 additional ghost cities (that don’t stay empty for very long). The economic and monetary disruption in 2008 caused some to worry about delays, but as EM economies like China’s appeared to be insulated from any fallout copper sprung back to life from its brief 2008 crash. It registered an all-time high in July 2011.

Then the second crisis happened. Dr. Copper (as other commodities) could tell that this renewed eurodollar issue wasn’t just European, and had as little to do with PIIGS as the prior one had to do with subprime. It would be economic and global, too.

By the time of the 18th Communist Party Congress in 2012, there was still some optimism about a worldwide comeback, or at the very least an effective Chinese response (as was talked about during the handover to Xi Jingping). What happened by April 2014 was both the monetary and economic sense it wasn’t coming.

Copper’s reflation in later 2016, then, more and more appears to have been something similar. Eurodollar issues faded, and globally synchronized growth was born and became widely accepted. Until last September.

We are in many ways back to April 2014 again. “Dollar” issues have really resurfacedand have been stubborn about it, especially as they may relate to China’s participation in the eurodollar system. Then there was the 19th Communist Party Congress that, for the unbiased, dispelled any official notion of future acceleration. In many ways, the Communists were careful in announcing a worldwide “L” – and then have so far lived up to it. 

It’s not just copper that has struggled, of course. Gold has, too. In many ways, there are similarities in each’s coverage of the intersection between money and economy. Copper may be exposed more to China’s ghost cities, but gold captures some great deal of inflation expectations. Both are definitely tied to eurodollars.

And both metals have struggled going back to early September. In hindsight, and some foresight, it may have been a warning for what was to come – and may yet still. I wrote at the start of last October:

To go back a few weeks when the first big jump in fails was published, the significance of it was potentially as an escalating warning about systemic liquidity, collateral and otherwise. After all, if something unknown is clogging, removing, or just plain disrupting collateral flow it’s not likely to be an isolated case; and certainly not for three weeks running.

Three weeks (and perhaps longer) simply confirms that this is some kind of warning. 

That’s a big enough period of time to traverse, more than sufficient sample size, to now more reasonably determine a sizable shift in money and economy. It’s a growing sense of yet another case of globally synchronized disappointment.

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After the financial crisis of 2007–2008 that wrecked Baltimore’s real estate market, city officials counted 16,800 vacant buildings. In 2010, former-Mayor Stephanie Rawlings-Blake began the Vacants to Value program, where tens of millions of dollars from a legal settlement with wall street banks behind the financial crisis flowed towards gentrification programs.

The Baltimore Sun said Mayor Catherine E. Pugh, who took office at the end of 2016, also expanded efforts to curb the vacancies around the city. In the last eight years, more than $80 million has been budgeted towards the efforts of demolishing vacant rowhomes.

In 2018, the official number of vacant buildings stood at 16,500. Tens of millions of dollars later, the program has only accounted for a mere -2 percent reduction in vacancies. The Baltimore Sun describes why the housing program failed to put a dent in vacancies:

“The city faces two principal obstacles to putting a dent in that number any time soon: the lengthy legal process it must follow to take control of buildings, and the rate at which people are leaving Baltimore — creating new vacants.”

Ian Duncan, a field reporter for The Baltimore Sun, interviewed Barbara Stokes who stood on the stoop at her rowhome of the Druid Heights neighborhood of West Baltimore. “They need to do something, because these vacants are creating a lot of problems,” the 79-year-old retiree said.

“Everywhere you go, everywhere you look, it’s vacant houses,” she said. “It looks like it’s more vacant houses in the city than occupied houses. It seems like it never changes.”

Seema Iyer, who is the director of the Baltimore Neighborhood Indicators Alliance at the University of Baltimore, said the city’s program to eliminate vacant buildings has been disappointing.

“People are really doing something, they’re working hard, but they keep slipping,” Iyer said. “It’s like building a levee that’s not high enough to stop the floodwater.”

So far, the city has demolished 2,700 vacant buildings since 2010 and rehabbed somewhere around 4,200. The Baltimore Sun points out that new vacant buildings are being created almost as fast, as residents are  leaving the city.

Iyer said, “the problem could be more widespread than city records indicate. The city counts properties on which inspectors have placed vacancy notices.” Iyer’s team of academics tracks the number of vacancies across the city, which she said the actual number could stand around 30,000. That is more than double what city officials are reporting, as there is a reason to believe — officials are underreporting the true nature of Baltimore’s housing collapse.

Mayor Pugh has frequently called removing vacant structures a top priority of her administration. In her recent State of the City address, she told community leaders that the city is on track to demolish more than 1,000 buildings this year.

“Because blight demoralizes communities, I have asked my Housing Department to tear down as many dilapidated properties as quickly as we can,” she said.  

However, like many promises, such as homicide reduction — the mayor has failed to deliver.

Housing Commissioner Michael Braverman’s research desk said the city saw vacancy rates decline from 2010 to 2016 in East Baltimore, though the overall rates remained well above average for the town.

Braverman said if the city had not initiated the housing program in 2010, the number of vacancies could be well over 20,000.

Last fall, Mayor Pugh sat down with lawmakers in Annapolis and outlined to state officials her objectives of tackling the vacancy problem. She told lawmakers that she had given Braverman a simple task: “Tear them [vacant rowhomes] down.”

According to The Baltimore Sun, the demolishing process is quite difficult:

“The housing department aims to tear down whole blocks at a time, the most efficient and cost-effective approach. But it creates challenges.

A city flow chart that sets out the process for demolishing a vacant block includes 69 potential steps. Only four involve the actual work of bringing down the building. The rest is a tangle of legal reviews, environmental preparations and negotiations with contractors.

The city typically completes about 300 demolitions a year. That number doubled last year, the housing department said, after the state provided millions in additional funding through its program, called Project CORE.

But an internal review found the increased pace pushed the city’s workers to their limits.

Officials are now looking for ways to streamline the process.

One big hurdle is occupied homes on blocks targeted for demolition.

In those cases, the housing department has to acquire the property and help relocate the residents. If the city and the owner can’t agree on a price, they can end up in court. “

To sum up, the situation in Baltimore is only going to get worse as the city continues to contract. It is likely that officials are under-reporting the true nature of vacancies across the town, which could stand around 30,000. Baltimore is a prime example of America’s shithole, as the city marches towards collapse.

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Authored by Mac Slavo via SHTFplan.com,

Regulatory powers have just been dangerously weaponized against the National Rifle Association. New York Governor Andrew Cuomo’s recent directive to financial regulators wants them to pressure private companies to break ties with the NRA, “or else…”

New York has never been known as a bastion of freedom, yet this is even highly reminiscent of all-out fascist tactics to eliminate basic fundamental human rightsthrough weaponized regulations. And although no person should ever have the kind of power Cuomo exerted to “decree” private businesses and banks follow his orders, don’t be surprised if they cave to the tyranny.

“I am directing the Department of Financial Services to urge insurers and bankers statewide to determine whether any relationship they may have with the NRA or similar organizations sends the wrong message to their clients and their communities who often look to them for guidance and support,” the governor wrote in a statement.

The Department of Financial Services, which regulates the banking and insurance industries in New York, followed up with guidance letters to insurance companies and banks, according to Reason. 

The guidance then includes slight variations on the following language from the banking letter:

The Department encourages its chartered and licensed financial institutions to continue evaluating and managing their risks, including reputational risks, that may arise from their dealings with the NRA or similar gun promotion organizations, if any, as well as continued assessment of compliance with their own codes of social responsibility.

The Department encourages regulated institutions to review any relationships they have with the NRA or similar gun promotion organizations, and to take prompt actions to managing these risks and promote public health and safety.

Why is this such a terrifying ordeal? The regulatory body that oversees these industries is warning companies under its power that they may be assuming reputational risk (a regulated area that draws official attention) by doing business with legal organizations such as the NRA. This reputational risk is said to exist because these groups are “gun promotion organizations,” which boils down to nothing more than them taking public policy positions at odds with those favored by the state’s political leaders.  Meaning the New York State government is weaponizing itself against any business it deems a political enemy…does this sound like East Berlin circa 1939 yet?

But this is hardly the first time government regulatory agencies have been weaponized against the public. “My father may have been the originator of the concept of employing the IRS as a weapon of political retribution,” Elliott Roosevelt observed of President Franklin Delano Roosevelt. The federal tax agency remains a handy bludgeon for politicians from that day through the present, including its recent deployment against Tea Party groups and its power to financially punish (at gunpoint of course) those who can’t afford or don’t wish to purchase government-approved health care plans. 

As Reason noted, yes, weaponizing regulatory agencies has been done before.  But making it explicit strips regulatory authority of any legitimacy. Punishing political opponents is a less compelling argument for such power than claims—valid or otherwise—that you’re enforcing good business practices. If it becomes standard practice, people are entitled to view regulators as nothing more than partisan hitmen and treat them accordingly.

New York’s long-established culture of corrupt and weaponized use of government power is a stain on the state, not something to be made official policy and extended to the country as an example to emulate.

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Many millennials, it seems, are content to pay sky-high rents while working low-level jobs in places like New York City just so they can eat their avocado toast, meet their friends for bottomless mimosas, and enjoy other compelling cultural attractions (like the nearly limitless dating pool).

But as young people struggle with an aggregate $1.4 trillion in student debt – not to mention tepid wages, high rents and a range of other factors that are forcing them to put off family formation and home ownership – rural areas are offering to help newcomers pay down their debts and buy a home. In exchange, the recipients need to settle in midwestern towns where jobs are plentiful, but workers are rare.

Indeed, the demand for college-educated workers in some parts of the midwest is so acute, many towns and civic organizations have started offering “reverse scholarships” to entice young people to relocate there.

In a recent story, the Wall Street Journal profiled several young people – many of them couples – who’ve used money from these grants to pay the down payment on a house or to finance their relocation back to the towns where they grew up.

The “reverse scholarships” vary in size and scope based on location. Some are specifically intended to pay off student loan debt. Others can be used to help buy a home. The sizes range from around $5,000 to as much as $15,000. What’s more, these grants are typically being offered in towns where labor shortages have been driving up wages.

One economist who spoke with WSJ compared the payments to “a modern day Homestead Act.”

Mike Allgrunn, an economist at the University of South Dakota, calls the financial incentives “a modern-day Homestead Act,” referring to the 1862 law offering public land to settlers willing to move West. A similar deal now stands in Marne, Iowa, where free parcels are available to people who move there.

Some of the relocation programs show promise, but it is a tall order. The pull of opportunity and amenities in large cities is hard to resist.

“The mere fact that they’re doing what they’re doing highlights the headwinds they are facing,” said Enrico Moretti, an economist at the University of California, Berkeley. “There is no one in San Francisco trying to pay people to move here.”

But even after the abysmal March jobs report, the official unemployment rate still stands at 4.1%, and the Fed believes that number will drop to 3.6% by next year.

For many of these towns, attracting a reliable supply of workers is vital to their long-term economic survival. Small businesses rank labor shortages as their No. 1 business concern, according to the National Federation of Independent Business.

The fear is that if local employers can’t find workers, they could move to a more hospitable environment.

But if nothing else, the fact that these grants exist shows just how many sacrifices some young people will make to live in hip urban centers like New York. For many towns, this tendency has turned low unemployment into a burden.

“Low unemployment rates, everyone thinks of that as a good thing and it is, but there’s a downside,” Mr. Allgrunn said. “Eventually you run out of people to do the work.”

In Hamilton, where state statistics who more than 5,000 jobs remain unfilled, workers with degrees in the engineering, technology, science or arts can receive a $5,000 grant to pay down their student loans if they agree to stay in the area for two years.

While that might not seem like much, for many young workers, it makes all the difference.

So far, a dozen people have applied for the grants, though they all live and work in the region. Kathryn Keefe, 24, works part time as an environmental educator for the city of Fairfield, Ohio, and part time at the Cincinnati Zoo. She pays $200 a month for student loans.

“For us, it’s a financial thing,” said Ms. Keefe, of Forest Park, Ohio, about a 20-minute drive from Hamilton. “It really does depend on the scholarship or not because there are other places in the area that are cheaper to live.”

So far, Hamilton’s grants have mostly been awarded to young people who grew up in the area, and are now returning home to start a family. But for the program to ultimately be successful, it must eventually draw in more outsiders, the vice president of one community organization said.

Katie Braswell, the vice president of the Hamilton Community Foundation, said the scholarships should bring more local residents to downtown but acknowledged it would eventually need to draw more out-of-towners. “I’m not real sure yet how this is going to work out,” she said.

To be sure, small businesses aren’t the only employers in need of workers. Barclays opened a customer service branch in Hamilton a few years ago that is growing rapidly.

This only serves to emphasize the fact that local businesses must help contribute to making the town more hospitable to young people – perhaps by supporting the development of a more-vibrant down town.

Barclays opened a customer service center in Hamilton that has grown from 48 employees when it opened in 2016 to more than 500. They need more, starting at $15 an hour. The company has opened part-time slots to help alleviate the worker shortage, said spokesman Matt Fields. He hopes the scholarship program extends the city a “halo effect from a hiring perspective.”

Unless Hamilton can attract new blood, Mr. Lippert said, its future is grim. Since 2010, local employers have added more than 1,300 jobs, but Hamilton’s prime working-age population has fallen by 2,800.

Grant County Indiana is another area that is experimenting with grants to young workers. The county’s economic development office is offering $5,000 toward a home for people moving to the area – though they must have a job or college degree. However, the money must be repaid if the recipient leaves town within 5 years. So far, about 100 people have used the money to buy houses.

And the county’s Chamber of Commerce is looking to expand on the program by offering a $9,000 to help repay student loans.

Still, some towns are finding that the grants aren’t enough. North Platte, Nebraska launched a program last year through the Chamber of Commerce, but so far, only two people have taken the money.

For many, that should come as a surprise. After all, seven million working-age men are mysteriously missing from the US workforce.

But perhaps what this really shows is that maybe financial enticements aren’t the answer. After all, with the midwest still in the grip of a deadly opioid epidemic, some companies have had more success with another strategy: Eliminating drug tests.

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Authored by Andrew Moran via Liberty Nation blog,

There is growing concern across the globe that automation will lead us to a dystopian future. With robots becoming ubiquitous in every aspect of our lives, the marketplace will be filled with cheap goods, but the consuming population can’t acquire them because they don’t have a job. It is a legitimate worry for millions of people, especially when you see the countless videos and news articles about a robot flipping burgers, automated arms packaging goods inside a factory, and grocery stores without cashiers.

One of the latest doom-and-gloom alarmists is the Wisconsin chapter of the AFL-CIO, which is griping about self-serve checkouts. Do unions ever do anything productive?

Last week, the labor union went to Facebook to demand its followers to “never self checkout.” The organization whined that it doesn’t want to assist corporations in firing employees just so they can boost their bottom lines.

It’s not convenient for me to help corporations fire workers so they raise their profits. I stand in line and when the lines back up, the store calls more cashiers to the front. If we keep doing it, they’ll need to hire more people. NEVER SELF CHECKOUT.

If life were only that simple.

Why hasn’t the group requested similar action for ATMs? If you avoid the bank machine and stand in line waiting for the bank teller, then the financial institution will simply hire more people. This logic, or lack thereof, can be applied to a myriad of other automated services that we enjoy today: ecommerce, digital cameras, search engines, and so much more.

But nobody is calling for an end to Google or Bing so the yellow book can be made great again. The AFL-CIO isn’t telling members to ditch mobile devices so telegrams can make a comeback.

What the labor group is conveying to the world is that it hates progress.

Automation will Benefit our Lives

Earlier this year, many Oregonians made headlines because they were complaining that a new law will allow residents in rural communities to pump their own gas. There were multiple grievances, but one of the main objections was the reduction in the number of attendants.

In 2016, up in Canada, the CBC spoke to a retiree, Bonnie Banks, who bothers people at self-serve checkouts, asking them if they “like working for Walmart for free.” She was upset that she now pumps her own gas and puts her own trash in the garbage at fast-food restaurants.

In the age of automation, there are many occupations and industries that will become obsolete. They will inevitably enter the dust bins of history.

The automobile eliminated the horse and buggy industry. The refrigerator rid the world of icemen and milkmen. Advancements in telecommunications abolished telephone operating jobs. Ride-sharing services have brought the government-protected taxi industry to its knees.

Are we any worse off than we were before? If you ask the average young person 70 years ago, he or she would admit that they cannot get along without the icebox and local telegram office. If you query the average young person today, he or she will concede they cannot live life without an iPhone or Uber.

Times change. New businesses rise. Old industries fall.

$15 Minimum Wage Is Ramping Up Automation

If you think that businesses are suddenly investing a lot more into automation, you’d be correct.

With the Fight for $15 crowd holding demonstrations, staging walkouts, and encouraging lawmakers to raisethe minimum wage, companies are reacting by automating operations.

As McDonald’s installs self-serve kiosks or mom-and-pop diners have robots in the kitchen, there is less of a demand for human cashiers and cooks. As Wal-Mart adopts self-serve checkouts, they don’t need too many cashiers on the front lines.

And you can blame entities like the AFL-CIO for the rampant rise of automation.

It is mostly immigrants, young, unskilled, and uneducated people who hold minimum wage jobs. Without these entry-level positions, thanks to the $15 fight, they can’t enhance their human capital.

New Opportunities Pop Up

In today’s world, where socialism is becoming trendy, there is a misconception that the free enterprise system is a zero-sum game — somebody wins, somebody loses. In other words, according to the left, you only become prosperous if you steal from others. Warren Buffett or Jeff Bezos get the entire pie while everyone is left with crumbs.

Nonsense. This is hardly the case in the free market.

When Microsoft was established, Bill Gates created more pies. When the iPhone was created, Steve Jobs produced more pies. When Karl Benz invented the automobile, he baked pies for the entire world.

With automation seeping into every single part of society, new opportunities will pop up. If scores of positions become antiquated, the individuals holding these jobs will do one of three things:

• Enhance their human capital by learning new skills.

• Fill the demand for labor in other industries.

• Perform other roles or tasks in the company.

This is what tellers have done in the banking sector. Many branches simply transferred tellers into other important roles, such as marketing and investment advising. Ditto for business publications. Thanks to the advent of software that composes articles from news releases or corporate earnings reports, reporters can now spend more of their time on investigative journalism, interviews, and much more.

Once the car was prevalent, carriage makers didn’t raise the white flag. They either adapted to the changing conditions or applied their craft to something else.

You will always come across people like Bonnie Banks moaning about self-serve checkouts. You can stop these busybodies in their tracks by doing a couple of things: point out their hypocrisy since they likely use ATMs or the computer and provide them with a lesson in Econ 101.

The future is now, and we shouldn’t be apprehensive of its arrival. We’re all getting richer and leading happier lives because of technology. Let’s embrace it.

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House Judiciary Committee Chairman Bob Goodlatte (R-VA) fired off a letter to Attorney General Jeff Sessions on Tuesday demanding that the Department of Justice investigate allegations that a “very pissed off” Obama administration official called then-Deputy FBI Director Andrew McCabe, allegedly pressuring him to shut down the FBI’s investigation into the Clinton Foundation. 

According to the account contained within an official report by the DOJ’s Office of the Inspector General (OIG), McCabe was rattled by the call – reportedly made by senior Obama DOJ official Mattnew Axelrod and pushed back.

“According to McCabe, he pushed back, asking ‘are you telling me that I need to shut down a validly predicated investigation?’” the report said. “McCabe told us that the conversation was ‘very dramatic’ and he never had a similar confrontation like the PADAG call with a high-level department official in his entire FBI career.”

During the aforementioned phone call, the IG report recounts that the PADAG called Mr. McCabe and “expressed concerns about FBI agents taking overt steps in the CF [Clinton Foundation] Investigation during the presidential campaign.”  This corresponds to reporting by the Wall Street Journal which detailed, “a senior Justice Department official called Mr. McCabe to voice his displeasure at finding that New York FBI agents were still openly pursuing the Clinton Foundation probe during the election season…. The Justice Department official was ‘very pissed off,’ according to one person close to McCabe, and pressed him to explain why the FBI was still chasing a matter the department considered dormant.” –Bob Goodlatte to Jeff Sessions

Goodlatte notes that Axelrod was “inquiring into why the FBI was pursuing a case against the Clinton Foundation during the election, and at worst, attempting to improperly and illegally influence the status of an ongoing investigation for purely partisan purposes.” 

“It is important to determine whether the PADAG’s directions to Mr. McCabe resulted in any “stand down” order being given to agents in these offices,” the letter reads. 

Undue Pressure?

Goodlatte’s letter also suggests that while McCabe was fired for “behaving in a matter unworthy of a public servant and, in particular, and FBI agent,” that he may have been under “undue pressure and influence asserted by the Department – and possibly even higher levels of the U.S. government during the Obama Administration – to ensure that a validly predicated investigation of the Clinton Foundation was terminated.” 

McCabe was fired on March 16 after the Department of Justice’s Office of the Inspector General (OIG) found that he “had made an unauthorized disclosure to the news media and lacked candor – including under oath – on multiple occasions.” 

Specifically, McCabe allegedly authorized an F.B.I. spokesman and attorney to tell Devlin Barrett of the Wall St. Journal, just days before the 2016 election, that the FBI had not put the brakes on the Clinton Foundation investigation – right around the time McCabe was coming under fire for his wife taking a $467,500 campaign contribution from Clinton proxy pal, Terry McAuliffe. 

Meanwhile, McCabe and former FBI Director James Comey are setting up for quite the battle over whether or not Comey knew of the leaks. While peddling his book on ABC’s The View, Comey called McCabe a liar – and admitted that he ordered the IG report that found him guilty of leaking to the press.

Comey was asked by host Megan McCain how he thought the public was supposed to have “confidence” in the FBI amid revelations that McCabe lied about the leak. 

“It’s not okay. The McCabe case illustrates what an organization committed to the truth looks like,” Comey said. “I ordered that investigation.” 

Comey then appeared to try and frame McCabe as a “good person” despite all the lying. 

“Good people lie. I think I’m a good person, where I have lied,” Comey said. “I still believe Andrew McCabe is a good person but the inspector general found he lied,” noting that there are “severe consequences” within the DOJ for doing so.

Goodlatte’s letter to Sessions can be read below:

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Authored by Ted Dabrowski and John Klingner via WirePoints.com,

Illinoisans hear plenty about the state’s ballooning pension debt, its billions in unpaid bills and rising bond debts. In fact, many even know about the local pension crises playing out in cities like Harvey and North Chicago.

But most don’t know that the state’s 860 school districts have put Illinoisans on the hook for another $21 billion in debt. In 2002, it was just $12.3 billion. That growing burden is just another reason Illinoisans pay the nation’s highest property taxes.

Illinois has far more school district debt, measured on a per student basis, than its neighbors, with the exception of Indiana.

Illinois, with $10,400 in debt per student, has 70 percent more school debt than Wisconsin, 44 percent more than Iowa and 33 percent more than Missouri. Indiana’s debt load is just 2 percent more than Illinois’ own.

And just like pension debts and unpaid bills, Illinois’ school debt has been on the rise. Total debt across the state is up about 70 percent since 2002. Back then, the debt equaled about $6,100 when measured on a per student basis.

That increase could be explained if Illinois was a fast growing state with many new students and a need for more infrastructure. But the opposite is true. Illinois’ student population is flat when compared to 2002.

Debt limits

School districts are limited in how much debt they can accumulate – not that it’s stopped many from going far over what the law allows.

The limit is calculated as a percentage of the taxable property in the district (the Equalized Assessed Value) – 6.9 percent in the case of elementary and high school districts and 13.8 percent for full K-12, or Unit, districts.

Across the state, 72 districts exceeded their allowed debt limit as of 2016. In sum, their debts are nearly $1 billion over the limit. That’s according to a FOIA from the Illinois State Board of Education.

That’s only possible because the debt limit the state imposes is full of exceptions and loopholes.

Some school districts have used referendums to go over the allowed limit. Others, such as Waltham CCSD 185, got the legislature to carve out an exception for them.

In all, nearly 5 percent of the state’s total school debt has been issued above prescribed limits.

The state’s 20 biggest offenders, based on how much their total debt exceeds their individual limits, are shown below.

Ford Heights SD 169 is the biggest offender of all. It’s a tiny district of less than 500 students that’s managed to amass over $20 million in long-term debt,  over nine times more than its legal limit.

Attempts to limit school debt recently failed in the legislature. HB 5572 attempted to:

• Limit borrowing periods to 20 years instead of 25;

• Offer more transparency on total bond costs to taxpayers;

• Add a requirement to include interest costs in the debt limit;  

• Include other forms debt in the limit; and,

• Require that any referendums for new debt in excess of a district’s debt limit pass with a three-fifths majority.

Seems like a reasonable set of reforms. But Illinois politicians on both sides of the aisle, backed by the education establishment, won’t accept even these common-sense proposals.

Is it any wonder why? With school districts having already driven Illinoisans’ property tax burdens to the highest in the nation, taking on debt is one of the few remaining options district officials have to access additional funding.

Additional transparency – like letting taxpayers know just how much debt they’re taking on – is simply too much to ask.

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Billionaire Peter Thiel’s venture-capital firm is investing a startup designed to optimize block trading for major cryptocurrency market participants.

The Wall Street Journal reports that Founders Fund is among the investors in the early-stage startup, called Tagomi Systems Inc., people familiar with the situation said.

Thiel’s investment comes after it was revealed that Founders Fund itself has already made a “monster bet” on bitcoin.

It also confirms Thiel’s bullish view on bitcoin reported in October last year when the billionaire investor argued that critics of bitcoin were “underestimating” the cryptocurrency.

“If bitcoin ends up being the cyber equivalent of gold and it has a great potential left and it’s a very different kind of thing from what people in Silicon Valley focus on—companies, not algorithms not protocols, but this might be maybe one exception that is very underestimated,” the Silicon Valley elite said.

And, in March, he said there will ultimately be only one digital equivalent to gold, and bitcoin, as the “biggest” cryptocurrency, will triumph.

The question with something like bitcoin is whether it can become a store of value. And the thing it would replace is something like gold. The analogy is it’s like bars of gold in a vault that never move and you get it and it’s a hedge of sorts against the whole world falling apart.”

“The objections that people have to bitcoin are also objections to gold. It’s this weird currency that’s not backed by any government. Same thing is true of gold. It’s not clear what the intrinsic value of bitcoin is. Same thing is true of gold. It may well be a bubble, but – and most bubbles are unstable and end – one of my friends has this line that ‘money is the bubble that never pops’, so if it is a bubble, then it is money.”

“If everybody decided that a $100 bill was worthless then you wouldn’t want to have a $100 bill.”

According to The Wall Street Journal, the problem that the new startup aims to solve stems from a fragmented trading environment across global cryptocurrency exchanges, where, for instance, the price of bitcoin can vary between platforms. As such, the startup – co-founded by Greg Tusar, the former chief of electronic equities trading at Goldman Sachs – is building a platform that finds the best market to execute large numbers of cryptocurrency trading orders at a specific time.

Currently, buying or selling large quantities of digital currencies is tricky because the market is fragmented across more than 100 crypto exchanges around the world. Connecting to all of them requires setting up a separate account with each one, and crypto exchanges generally impose limits on daily flows in and out.

That makes it cumbersome and time-consuming to pull off a big trade, and the price of a digital currency can move dramatically before the investor finishes buying or selling.

Tagomi hopes to make it easier to make such bulk trades by borrowing a page from the stock market. In U.S. equities, broker-dealers use systems called smart order routers that dispatch their clients’ buy and sell orders to various venues, including a dozen exchanges and more than 30 off-exchange “dark pools.”

These routers make rapid-fire decisions about which market is the best place to execute a trade at any given time. Tagomi is looking to develop a similar tool for the crypto markets, according to people with knowledge of its plans.

It certainly seems clear that Thiel is making a bet (size of the bet has not been reported) that institutional interest is expected to increase dramatically in cryptocurrency trading.

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Authored by Mike Krieger via Liberty Blitzkrieg blog,

There’s been heightened chatter as of late, particularly in the Twittersphere, around the idea humanity might be undergoing a consciousness expansion. This concept seems to be going mainstream, which could be a great thing provided it doesn’t get turned into a cliché or marketing gimmick.

This notion of a human consciousness shift that could emerge and alter the paradigm on planet earth in unimaginably positive ways was something I became obsessed with last year. My interest was sparked by the infantile and demented political environment which swept across the U.S. in early 2017, and was solidified by an encounter with the concept of Spiral Dynamics generally, and the work of Ken Wilber specifically. I ended up writing a five-part series on the topic, which I’d like to revisit before moving on.

According to Wilber, the key threshold to hit in order for the next stage of human evolution to occur is 10% of the global population moving into a second tier-type consciousness (yellow based value system). To understand what that means, let’s revisit some of the key characteristics of people resonating at second-tier consciousness.

From Spiral Dynamic Integral the Netherlands:

Yellow value system Characteristics

Firstly, he noticed that a Yellow orientated lifestyle is much more free than a lifestyle in any of the other value systems. Yellow oriented people seemed to move and express themselves completely free and independent of their life environment. Contrary to people in other value systems, they were not afraid anymore to be rejected and they didn’t fear other people’s or God’s judgment. They didn’t show the need to make an impression on others and to reach the top at the cost of everything.

They also didn’t strive anymore for absolute truths and they didn’t have the need to belong to something anymore. In short: these were people without irrational fears, compulsive needs and compulsive behaviors. However, this Yellow freedom doesn’t mean that people in the Yellow value system are not connected to their environment. On the contrary, Yellow oriented people are very much involved and show a lot of compassion. The biggest difference with people from other value systems is that their life environment is not fearfully or compulsively leading them.

Now here’s Ken Wilber’s brilliant description:

That’s a lot to unpack, so let me summarize. The various stages within first-tier consciousness are all driven by a deficiency motivator. Humans operating at that level are primarily driven by a need to prove something to themselves or others, or by a need or desire to attain something. All levels of first-tier consciousness are highly tribal and see the world as us (my team) against them (the others, who are considered heathens). At the second level, humans aren’t lacking in any major physical or psychological way, and are thus motivated by what Wilber describes as “being needs,” versus “deficiency needs.” Fear dissipates as does attachment to dogma. You’re simply more understanding of different perspectives and they roles they play even if you strongly disagree.

Naturally, people obsessed with controlling others and dominating society do not wish to see humans operating en masse at second-tier. People at a higher stage of consciousness are simply more troublesome and far harder to control and manipulate. As I noted in last year’s post, What is Spiral Dynamics and Why Have I Become So Interested in It?

Based on his recent observations, he [Wilber] estimates this number [operating at a second-tier consciousness] to now be around 5%. That’s an incredible leap, and explains a lot of the current status quo panic and drive to divide and conquer everyone. To see what I mean, let’s put it in the context of the U.S. adult population, which stands at around 242 million individuals.

1% of that number is 2.4 million adults. While that’s significant, if Ken is right about his 5% estimate, we are now talking about 12 million Americans operating at a far higher level of consciousness. Not enough to win a Presidential election, but very significant and extraordinarily dangerous to the establishment. If that sort of “awakening” continues, the current paradigm has no hope of survival. As such, all of the madness being perpetrated by the media and divisive pundits on both sides needs to be seen in the context of this unfolding of consciousness. These people are in the fight for their lives to keep the current paradigm they are comfortable with alive. If you accept this view, then you recognize the importance of staying true to your values and not regressing back into first-tier type thinking. As Wilber and others explain, these are fluid states, so periods of stress or fear can result in a regression of consciousness. It’s not an exaggeration to say that preventing this from happening is of the utmost significance.

As mentioned earlier, Wilber also previously estimated we need around 10% of the world population operating at second-tier to kickstart an entirely new paradigm here on earth. Personally, I think we’re very close to that number (if not there already), and that the major catalyst has been an explosive growth of the internet and social media.

Although it’s become trendy to disparage the internet, and social media specifically, as propagators of “fake news” and tribal echo chambers, I take the opposite view. First off, fake news has always been a fundamental part of the human experience. In prior centuries, the wealthy and powerful simply had a monopoly on creating and spreading it. The establishment doesn’t care about “fake news,” it’s simply terrified that people are now able to come to their own informed (or misinformed) conclusions without gatekeepers telling them what to think and how to think. The primary driver behind the establishment panic over “fake news” is simply fear regarding a loss of narrative control. There’s nothing else to it.

Looking at the bigger picture, human beings communicating in realtime, globally, on a peer-to-peer basis using social media (as flawed as the current iterations of it are) is an extraordinary achievement with no precedent in world history. Moreover, this sort of connectivity has only been happening at scale for around a decade or so. This is a meaningless blip in the context of time, and we simply can’t imagine what the ultimate consequences will be.

My personal view is that we’re currently witnessing the emergence of what Terence McKenna called the “global brain.”

Here’s what he said about it in 1994:

The people who are not switched on don’t even know anything has happened. To them the world looks exactly like it looked five years ago. To the people who are switched on, earth is becoming a distant memory.

The internet is the global brain. The cyber-spatially connected telepathic collective domain that we’ve all been hungering for. 

Some of you may misinterpret this, so let me elaborate. When talking about a “global brain” I’m not referring to uniformity of thought at a planetary level, but rather the ultimate outcome of human beings directly talking to one another across borders. Over time, I’m completely convinced this will result in a much more compassionate, understanding and connected species, which will make manipulating us into crazy wars or other insane activities counterproductive to our wellbeing much more difficult for the types who make a habit of that sort of thing.

The “global brain” is just humanity discovering that we are all connected. That we aren’t as different as we’re led to believe, and that we certainly shouldn’t be running around killing each other to satisfy the money and power cravings of a very small, but highly motivated, type of person.

In other words, the emergence of the global brain, thanks to the internet, will in the long-run help free us from systemic manipulation and lies. I’m not talking about a utopia, but I am talking about a much healthier paradigm for our species.

It won’t happen overnight, but it is happening. Your job is to do whatever you can help it come into being.

Given a universe in which anything goes, what are the most lovely, generous, and exuberant things we can do?

— Alan Watts (@AlanWattsDaily) May 2, 2018

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Thing for Tesla just went from bad to worse when in one of the most bizarre conference calls since Jeff Skilling had some choice words for Richard Grubman, Elon Musk unexpectedly and abruptly cut off the earnings call when he encountered a questions he appeared to find “uncool.”

Just as a Bernstein analyst was asking one of the most important questions to emerge from this earnings release, namely what does it mean for battery and production capacity now that Tesla has cut its capex estimate, and just CFO Ahuja started to provide some semblance of a response, the analyst was suddenly cut off, only it wasn’t because the line was dropped but because Musk literally cut off the analyst mid-question, rejecting it as “not cool.”

“We’re going to YouTube. These questions are so dry. They’re killing me”, the petulant Musk said, as he the testy CEO cut off off both the question and the entire queue, and proceeded to go to the Youtube channel for retail investors that had been arranged over Twitter.

Your pissant questions about topics like margins, capex and profitability bore me, you are banished from the kingdom. Ask me something about SpaceX $TSLA

— Donut Shorts (@DonutShorts) May 2, 2018

At this point, the Musk meltdown only accelerated, as Musk attacked media stories questioning the safety of autonomy, i.e. the company’s overhyped autopilot – which as Musk will tell you should never be called an autopilot if it results in a deadly accident  – calling them “outrageous” and slamming “irresponsible” journalists who write about the dangers of autonomous vehicles, blasting that “people might actually turn it off and then die.” Or, as the recent tragic incidents have shown, die after assuming the autopilot actually knows what it is doing.

At this point, Musk found a question that “wasn’t boring” when someone on the Youtube channel asked how Tesla was competing with Porsche; the flamethrower man then gingerly pivoted into yet another non-sequitur, stating that “not being profitable is a good criticism that has been leveled at TSLA” and would be even greater if Musk had some answer to it, then claiming that “moats are lame” and what matters is the “pace of innovation”, however by this point the stock of Tesla was in freefall, sliding 5% after hours as increasingly more investors experienced a proverbial light bulb moment, realizing just what an “unstable genius” Elon Musk is.

The call is still going on, and now journalists get to ask some questions. We expect more fireworks.

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