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Across the United States, government officials are struggling to combat the next wave of the opioid epidemic, which is expected to deliver a massive blow to the heartland. A new report from the Centers for Disease Control and Prevention (CDC) confirms the opioid crisis has dramatically worsened since the second half of 2016. Raw data from hospital emergency rooms show a significant increase in drug overdoses across the U.S.

In a press briefing on Tuesday, CDC Director Anne Schuchat, M.D., warned that the U.S. is currently experiencing the highest drug overdose death rates ever.

In the newly issued report, which examined data from 16 states, emergency department visits for suspected opioid overdoses jumped 30 percent from July 2016 through September 2017. In some regions of the country, overdoses were far more significant, but overall, data from most areas showed the opioid crisis is worsening, despite President Trump’s new initiative to tackle the epidemic.

“We have an emergency on our hands,” says CDC Director Anne Schuchat. “The fast-moving opioid overdose epidemic continues and is accelerating.”

According to the report, opioid overdoses increased for both genders, in all age groups, and across all regions in the U.S.

From July 2016 through September 2017, opioid overdoses increased:

• Men (↑30%) and women (↑24%)

• People ages 25-34 (↑ 31%), 35-54 (↑36%), and 55 and over (↑32%)

• Most states (↑ 30% average), especially in the Midwest (↑70% average)

SOURCE: CDC’s National Syndromic Surveillance Program, 52 jurisdictions in 45 states reporting.

Opioid overdoses continued to increase in cities and towns of all types: 

• Non-core (non-metro): 21 percent increase

• Micropolitan (non-metro): 24 percent increase

• Small metro: 37 percent increase

• Medium metro: 43 percent increase

• Large fringe metro: 21 percent increase

• Large central metro: 54 percent increase – Large and steady increase for large cities

SOURCE: CDC’s Enhanced State Opioid Overdose Surveillance (ESOOS) Program, 16 states reporting percent changes from July 2016 through September 2017.

Recent trends in opioid overdose emergency department (ED) visits provides a shocking view of this fast-moving epidemic: 

SOURCE: CDC’s Enhanced State Opioid Overdose Surveillance (ESOOS) Program, 16 states reporting percent changes from July 2016 through September 2017.

“Long before we receive data from death certificates, emergency department data can point to alarming increases in opioid overdoses,” Schuchat said in a statement. “This fast-moving epidemic affects both men and women, and people of every age. It does not respect state or county lines and is still increasing in every region in the United States.”

CDC provides three shocking statistics from the latest report indicating the opioid crisis is out of control: 

• Opioid overdoses went up 30% from July 2016 through September 2017 in 52 areas in 45 states.
• The Midwestern region witnessed opioid overdoses increase 70% from July 2016 through September 2017.
• Opioid overdoses in large cities increased by 54% in 16 states.

CBS News believes fentanyl could be the responsible actor in the recent surge of overdoses: 

It is all downhill from here, as the opioid crisis is now affecting most generations in all regions across the United States, which could be problematic for the US economy as millennials are set to dominate the most productive age segment of the US labor market.  Even the Federal Reserve has warned about the impact of the opioid crisis on productivity and the labor market.

But then again, DARPA, Silicon Valley, and Wall Street are quietly building an army of AI robots in the shadows, waiting for the moment America’s middle-class nose dives under the weight of the opioid crisis. So far, drug overdoses have managed to plunge the US life expectancy lower for two consecutive years, the last time this occurred it was 1963 and shortly after markets tumbled.

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Authored by Daisy Luther via The Organic Prepper blog,

You may not have ever heard of Nick Freitas before, but I have a feeling we’ll all be hearing a lot about him soon. At first glance, this may seem very political, very Republican vs. Democrat.

But it’s not. It’s about logic versus emotion.

It’s about an eloquent defense of the Second Amendment and the reason that the gun control debate is stalled. And the response to this speech underlined everything that was said.

It’s about people who got so upset about historic facts that they had to leave the room instead of engaging in a discussion.

Last week, he gave a rousing speech on the floor of the Virginia House of Delegates in defense of the Second Amendment. Some of his key points:

• We need to find out if gun-free zones are effective

• We need to understand the reasons behind the Second Amendment

• We need to make self-defense possible

• We should consider arming teachers

• We need to discuss this issue with mutual respect

• We have to admit that the government failed in the Florida school shooting

One point he brought up that really spoke to me personally was the fact that not all gun-related acts of self-defense involve pulling the trigger and shooting the perpetrator. I know that in my own case during an attempted home invasion, just the presence of my gun and the perception of the would-be criminals that I wouldn’t hesitate to use it, deterred what could have been a heinous crime against me and my daughter.

Freitas said in the speech that we have an inherent right to defend ourselves and that he will not accept a false narrative. He pointed out that he and his fellow Republicans don’t believe Democrats when they say that all they want to do is ban bump stocks.

Freitas is a retired Green Beret who served 2 tours in Iraq.  (source) He was elected to the state delegation in 2016 and is a self-described Libertarian-Republican.

Listen to the entire speech in the video below.

The response by lawmakers

Despite Freitas’s factual and logical arguments, a number of Democrat delegates actually walked out of the room during his recitation of horrific past policies that were instituted by their own party and his plea for mutual respect so that a real conversation could happen.

Delegate Lamont Bagley was really upset, calling the speech “hateful and divisive.”

“We realize that we live in a ugly political moment. So while we were offended, we were not surprised,” Bagby said. “It should embarrass every member of this body that we have allowed such rhetoric to enter these chambers. Bringing up a very painful past to make a political point is disgusting and poisonous.” (source)

Delegate Delores McQuinn, who walked out while Freitas was speaking, told reporters:

“Let us not bring in things that would be hurtful and painful to people who have to live in a skin that some of you will never know and have to endure a reality that being black in America is sometimes difficult.” (source)

Freitas seemed unconcerned at the outrage, responding:

“More and more, offense is used as a weapon with which to turn away debate.And I’m not going to accept that.” (source)

His speech was so popular that he was interviewed by CNN, who played a clip of a Democrat, Delegate Joseph Lindsay, who said he was “offended as he had never been offended since being a part of this body” by Freitas’s passionate speech. He claimed that his colleagues were “emotionally shaken and bothered.”

Freitas wasn’t having any of it.

There aren’t many politicians that I’d say I would support, but Freitas just might be the exception. He’s currently running for the US Senate against Tim Kaine, who is the former governor of Virginia and was Hillary Clinton’s running mate in her failed bid for the presidency.

In his announcement for the bid, he promised to combat a worldview that “treats free people as if we were subjects instead of citizens.” He also said, “Quite frankly, establishment elements from both sides of the aisle have been responsible in thinking themselves made from finer clay than the rest of humanity.” (source)

Yep, I’m pretty sure we’ll be hearing more about Nick Freitas.

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An increasingly popular type of identity fraud is exceptionally difficult for banks to prosecute: Why? Because the people stiffing the banks don’t actually exist.

That’s right: It’s called “synthetic identity fraud” and it’s become a tool for scammers to siphon off hundreds of thousands of dollars without living with the guilt of ruining the credit scores of all those little old ladies.

The Wall Street Journal explained how it works in a recent story: Scammers apply for loans at dozens of banks using made-up information (names, social security numbers etc.) Because these people have no credit history, the loans are typically rejected – at first. But just by applying for a loan, the credit bureaus – Equifax, TransUnion and Experian – save an individual’s information, and after a person applies again and again, eventually, these attempts become enough to seemingly will a credit history into existence.

Essentially, the scam exploits one vulnerability of the credit-check system: It’s difficult for banks to tell the difference between a person with no credit history and a person whose identity has been made up.

Synthetic identity fraud was first discovered by law enforcement in 2012, when lenders and law enforcement started reporting unusual instances where confirming an individuals identity proved to be impossible. They quickly realized that many of them weren’t real people.

TransUnion says it began hearing from lenders and law enforcement about unusual fraud cases between 2012 and 2014. It began investigating, searching for driver’s licenses, voter registrations and other records to confirm identities. When nothing turned up, TransUnion investigators realized the cases could be tied to fabricated identities.

The company blocked thousands of credit reports from future use, figuring any real people would get in touch, says Lee Cookman, a director in its identity-solutions department. None did.

TransUnion and Experian say it is tough to distinguish between a fake person and a real person applying for credit for the first time with legitimate identifying information that isn’t on file. Equifax didn’t respond to requests for comment.

Since then, it has blossomed into one of the biggest threats to credit-card lenders. Synthetic frauds are already costing banks countless hours – and billions of dollars.

One man in South Carolina was arrested after creating 750 “synthetic identities” and applying for loans through them.

Already, credit bureaus estimate that at least $350 million in outstanding credit-card debt are owed by people who don’t exist.

 

TransUnion says a record $355 million in outstanding credit-card balances was owed by people who it suspects didn’t exist in 2017, up more than eightfold from 2012. It estimates lenders have issued credit cards or loans to millions of synthetic identities in the US.

In January, Accenture PLC listed synthetic-identity fraud as one of the biggest threats facing banks in 2018, saying it would be “costing banks billions of dollars and countless hours as they chase down people who don’t even exist.”

In Rock Hill, S.C., a 50-year-old man was arrested last year after applying under synthetic identities for more than 750 credit cards; he pleaded guilty. Earlier, a Southern California man pleaded guilty to conspiracy to commit bank fraud using synthetic identities, agreeing to forfeit properties in Los Angeles, West Hollywood and Santa Monica bought with the proceeds.

Scammers turned to synthetic identities as fraud detection software used by banks became increasingly skilled at foiling conventional cybercrime.

One scammer who created 300 synthetic cards and was eventually sentenced to several years in a federal prison

QUOTE

Criminals have taken up this new ruse in part because lenders and borrowers have gotten better at protecting against more traditional fraud, which often involves using stolen data about real consumers, says Chris Pinion, who specializes in fraud strategy at LexisNexis Risk Solutions, a unit of RELX Group.

Bypassing actual consumers, scammers such as Mr. Lyles trip fewer alarms. An Alabama native, he had worked at a debt-collection firm and as a U.S. Navy service member trained in electronic warfare, according to court records. He was once chief financial officer at Chosen Destiny Foundation Inc., a nonprofit serving Atlanta’s homeless.

Over two decades, he was convicted of crimes such as motor-vehicle theft and marijuana possession, court records show.

“He’s a good son, a loving father, and he took care of his family to the best of his ability,” says Betty Hollinger, his mother. “Whatever else happened, I just don’t know.”

Mr. Lyles, in federal prison for the fraudulent credit-card scheme, didn’t respond to interview requests. His lawyer, Careton Matthews, declined to arrange an interview with his client. “Mr. Lyles accepted responsibility early on,” he says. “He is remorseful for having committed the acts that caused him to be sentenced.”

Ironically, an innovation by the Social Security Administration meant to prevent fraud helped give rise to the “synthetic identity fraud” phenomenon.

Using CPNs on loan applications is illegal, says Stephen Stigall, partner at law firm Ballard Spahr LLP, and can subject their users to charges of making false statements to banks, bank fraud or conspiracy to commit bank fraud.

Lenders lack methods of instantly distinguishing credit-profile numbers from Social Security numbers—in part an unintended consequence of a Social Security Administration move meant to reduce identity fraud.

The agency used to generate numbers in predictable patterns. The first few digits corresponded to a person’s ZIP Code when the number was issued, letting lenders cross-check the number with other application entries. In 2011, the agency began generating numbers randomly. That made it tougher for lenders to spot fakes.

An agency spokesman, Darren Lutz, says “randomization represents an important step forward in preventing the compromise of SSNs and preventing identity theft” including by making it harder for scammers to reconstruct numbers using public information.

But whether this mistake will be fixed – ie, whether the SSA will go back to using patterns when assigning SSNs – remains to be seen. To be sure, that method also had its vulnerabilities.

But given the ease with which one scammer can marshall dozens of “fake” (but usable) identities – well, at least people who’ve had their sensitive information stolen in a major corporate hack can at least sleep a little easier: You’re no longer the target criminals covet.

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In typical reality show style, President Trump managed to build up a wall of suspense ahead of tonight’s South Korean delegation announcement at 7pm. However, it appears that much of this excitement may be for nothing: according to CNN and Fox leaks, the announcement will be far less exciting than the “denuclearization” declaration some had expected, and instead Kim Jong Un invited Trump to meet in the message that was delivered by the South Korean delegation.

#breaking North Korea leader Kim Jong Un invited US President Trump to meet in the message that was delivered by the South Korean delegation, according to a senior US official and a former US senior official.

— Will Ripley (@willripleyCNN) March 8, 2018

Whether Trump will accept the invitation, and what conditions he may have will likely be unveiled in the next few hours.  However, if the president was hoping to offset his “trade war” with a diplomatic detente with a potential “nuclear war” opponent, this may be just the right opportunity.

 

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Authored by Viktor Katuna via OilPrice.com,

Whenever you see a headline like this, you know it will go along the lines of “did you know that petroleum stands for rock oil?” Yes you did, goes the reply of an overwhelming majority of readers.

For this reason, the list below is one which holds the reader in high esteem, as a dear colleague on the road to broaden our knowledge of the oil industry. So here we go…

1.) Oil’s first use was for caulking – ruins from early Antiquity (5-6 000 BC) testify that Euphrates and Indus Valley civilizations built their houses with bitumen. Caulking their ships with bitumen logically followed soon afterwards.

2.) Both Tamerlane and Nadir Shah used camels laden with petroleum casks to frighten off Indian war elephants – once set on fire, the sight of fire made the elephants flee in panic.

3.) A first in Europe, oil exported from Venezuela in 1539 was used to treat the gout of Emperor Charles V.

4.) People of the Caspian Basin used oil to cure their camels’ mange.

5.) Drilling was invented by the Chinese, using the cable tool percussion method, presumably during the 2nd millennium BC.

6.) The Chinese know-how of drilling found its way to Europe thanks to the Catholic missionary Father Imbert, whose 1828 description of salt drilling methods paved the way for the development of oil drilling as we know it now.

7.) In Medieval times, Caspian oil was transported in sealskin bags. (The Caspian seal was substantially more common back then, now it is an endangered species mostly due to radical habitat shrinking.) In other adjacent regions, sheepskin bags were used.

8.) The Giza pyramids were glued together with bitumen.

9.) Up until the early 20th century, oil was considered to be an excellent cure for diphtheria.

10.) Oddly enough, up to the First World War, airplane fuel was blended with castor oil, irritating pilots to the point of constant diarrhea.

11.) The first-ever oil tanker, Zoroaster, was sunk alongside six other ships near the Azerbaijani coast to create a platform for a new offshore field.

12.) Titusville, the birthplace of the U.S. oil industry, gave rise to a plethora of other products, too. Robert Chesebrough came here to look into how petroleum could be used and came up with the idea of producing the petroleum jelly, Vaseline.

13.) Chesebrough ate a spoonful of Vaseline every single day and lived until he was 96 years old.

14.) The first oil war was the Chaco War (1932-1935), which pitted Paraguay, supported by Royal Dutch Shell, against Bolivia, supported by Standard Oil. In the end, most of the Chaco region went to Paraguay.

15.) The average speed at which oil is transported through pipelines is about 5-10 km per hour (roughly 3-6mph).

16.) Crude pipeline transportation was first proposed by the famous Russian scientist, Dmitry Mendeleev. He argued that burning oil in furnaces in the vicinity of producing fields is ineffective, instead oilmen should transport it to main centers of consumption, refine and use it there.

17.) Mendeleev was also the first Russian scientist to take a proper look at the quality parameters of Russian (now Azerbaijani) crude. He established that Russian crude is heavier than light American crude, leaving substantially more residue.

18.) In most European languages, crude oil is either a derivative of the Greek “petroleum” (meaning rock oil) or of the Persian “naphtha”. The only exception are a few Western Slavic nations, namely the Poles, Czechs and Slovaks, that call crude “ropa”, meaning “rot”.

19.) Even the Chinese, not cognizant of European onomastics traditions, named petroleum in the 5th century BC shi you (“rock oil”).

20.) The Kumzhinskaya field in Russia burned for 7 years, from 1980 and 1987, after a drilling rig caught fire. The authorities even exploded a nuclear bomb at a depth of 1.5km in an attempt to stop the fire, but the fire still burned.

21.) The world’s northernmost oil field is the Russian offshore Pobeda field (N74’44’’).

22.) The oldest functioning refinery is located in Digboi, India (capacity of 0.65 million tons per year) which first came online in 1901. It is likely the world’s smallest refinery.

23.) The 1988 Piper Alpha explosion in the North Sea is the most deadly oil sector accident ever, leaving 167 dead.

24.) The Deepwater Horizon catastrophe killed more than 8 000 birds and harmed another 75 000.

25.) Only two ladies have so far held the highest post in national oil companies all around the world – Graça Foster (Petrobras) and Isabel dos Santos (Sonangol).

26.) If one is to omit political appointees (Isabel dos Santos was appointed head of Sonangol by her father, José Eduardo dos Santos, who ruled Angola for 38 years), Graça Foster remains the only “merit-based” female CEO of any major oil company.

27.) The father of American geophysics, Everett Lee DeGolyer started working for the U.S. Geological Survey as a cook.

28.) Arguably the lightest constant-quality oil grade is Algerian condensate, with an API density of 71°.

29.) The world’s heaviest oil is found in Athabasca, Canada, with a standard API density of 8°.

30.) The longest-producing oil well is the McClintock Well #1 in Titusville, Pennsylvania, which has been producing crude since 1861.

31.) The world’s largest oil company is Russian (Rosneft), and so is the largest gas company (Gazprom).

32.) Rosneft’s and Gazprom’s CEOs, Igor Sechin and Alexey Miller, worked together from 1991 to 1996 in the Foreign Affairs Committee of Saint Petersburg under the guidance of Vladimir Putin.

33.) In Venezuela, the cost of a 0.33l (12 fl oz) beer can is equivalent to 30-35 liters of gasoline.

34.) As of late February, Iceland has the highest gasoline prices in the world, yet a liter of gasoline still costs less than a bottle of water.

35.) The largest oil platform is found at the Norwegian offshore field Troll, towering at 472m above sea level.

36.) The world’s longest well was drilled in November 2017 at the Sakhalin-I, reaching a depth of 15,000 meters.

37.) Were the oil rush to have started several decades later than the 1860s, we might have never witnessed a sperm whale in the 20th century – sperm whale oil was the essential source for producing kerosene, and as a result they were almost hunted down to extinction.

38.) The idea of nationalizing one’s oil sector was first carried out by the Soviets in 1918 – it took almost 20 years until another country, Bolivia, nationalized its oil industry in 1937.

39.) It took the Soviets more than forty years to market their rapidly increasing oil volumes in Europe – the first supply contracts were signed with West Germany and Italy in 1960, to intense American dissatisfaction.

40.) It is very rarely stressed how socially mobile the oil industry has been since its inception – John D. Rockefeller’s father was a con artist, indicted for rape in 1849, whilst Ivan Gubkin, the founding father of Russian/Soviet petroleum geology, was the only literate child (out of 5) of a Volga burlak.

41.) Offshore oil production makes up roughly 30% of total world output – despite heavy volatility this ratio has barely changed in the past decade.

42.) Iraq is the most dependent country with regard to oil as a percentage of its exports (99%), whilst in terms of general GDP, it is Kuwait that is most dependent on the oil industry (55% of its GDP comes from oil).

43.) The first commercial oil discovery in Africa took place in 1955 (the Benfica field in Angola), roughly a 100 years after the United States and the Russian Empire started producing oil.

44.) The current oil price record was set in 2012 when annual Brent prices reached $111.63 per barrel.

How many of those had you heard before?

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First Toys “R” Us getting ready to liquidate, and now that other famous pre-crisis retail LBO, Claire’s Stores, the tween fashion accessories mecca where “legions of preteens got their ears pierced”, is preparing to file for Chapter 11 in the coming weeks, Bloomberg reported.

The company, which was LBOed by Apollo in 2007, is set to hand over equity control from Apollo to key creditors including Elliott Capital and Monarch, with Bloomberg noting that Venor and Diameter Capital Partners are also involved. The move should help ease the $2 billion debt load at Claire’s, although just like with Toys, it may merely be delaying the inevitable liquidation (it took Toys less than 6 months to go from Chapter 11 to 7).

That said, Claire’s bankruptcy is hardly a surprise: the mall anchor retailer was prominently featured in our November piece, “A Look At America’s Retail Apocalypse In Charts” in which we highlighted the firm for its massive debt load and upcoming debt maturities. Sure enough, Bloomberg does the same:

The current debt load is more than 10 times a key measure of its annual earnings, the result of its 2007 leveraged buyout by Apollo. More than $1.4 billion of its debt matures next year, and more immediate pressure comes from a $60 million interest payment that’s due March 13.

And since the company no longer hopes to continue as a going concern, it is guaranteed that it will filed Chapter 11 within the 30 day grace period following the March 13 coupon payment which will not be made.

Meanwhile, score another slam dunk victory for Apollo, a firm that leads the league tables in the number of “LBO-to-Default” transformations. When Apollo paid $3.1 billion to acquire Claire’s from the family of founder Rowland Schaefer in 2007, it then began expanding rapidly, adding on even more debt. It added about 350 stores between 2010 and 2013, with more than 2,700 globally by the time it filed plans that year to go public, according to a company document.

But, as Bloomberg notes, the chain struggled to remain profitable after the Apollo buyout, and Claire’s withdrew its initial public offering registration in early 2017. And, about a year later, appropriately enough it is filing for bankruptcy.

Finally, while the company’s bankruptcy was a long foregone conclusion, a key outstanding question is what will happen to the cash flow of all those malls where Claire’s is an anchor client. According to Claire’s 10K, its stores in North America are located primarily in shopping malls and average approximately 1,000 square feet of selling space. It has 1,600 stores in North America, which means 1,600 malls are about to see their cash flow drop that much more, which begs the question: is the “go long the malls” trade, which briefly became cool among the counter-contrarian crowd, already over, and is time to resume shorting the CMBX BBB-.

Meanwhile, back in Seattle, Bezos takes another victory lap on his road to intergalactic domination.

 

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On the same day as Hong Kong Monetary Authority (HKMA) Chief Norman Chan urged citizens to “stay calm on the currency weakening,” the Hong Kong Dollar has plunged to its weakest in 33 years amid liquidity concerns and a global carry trade gone rogue.

The Hong Kong Dollar has been in free-fall for the last year (interrupted briefly in the middle of last year) but as its drop accelerated in recent days, HKMA wrote a blog to reassure the people that their paper-money is safe:

Stay calm on the weakening of the Hong Kong dollar

There have been concerns and discussions in the market about the recent weakening of the Hong Kong dollar (HKD).

Chan then goes to to answer some questions (but it seems his headline sparked some sudden selling)…

This is the weakest in 30 years and near the weaker end of the peg band (7.85/USD), but do not worry, Chan says:

“However, this should not cause any concerns, as the HKMA will take action when the HKD exchange rate touches the weak-side Convertibility Undertaking (7.85) to ensure that it will not fall below 7.85.“

Question 3 caught our eye – If the HKMA is not concerned about the weakening of the HKD, why did it issue additional Exchange Fund bills when the HKD was weakening last year?  Was it intended to prevent the HKD from depreciating as suggested by some market players?

Good question.

His response:

This is not true.  The issuance of additional HK$80 billion worth of Exchange Fund bills by the HKMA last time was solely in response to market demand for highly liquid instruments and had nothing to do with the strengthening or weakening of the HKD.

We do not have plans to issue additional Exchange Fund bills for the time being and hope that market players will not take it wrongly that the HKMA does not want the HKD to weaken. 

In fact, with the widening of the spreads between HKD and USD interest rates, we are looking forward to funds flowing from the HKD into the USD, causing the HKD exchange rate to reach 7.85, a level where the HKMA will take action.  This will allow the Monetary Base to contract gradually and create an environment conducive to the normalisation of HKD interest rates.

Which – roughly translated from double-negative google translate into English – means…feel free to ride this trend lower, but at 7.85 we will unleash hell (maybe). Remember, under Hong Kong’s linked exchange rate system, the HKMA is mandated to sell US dollars at HK$7.85 when necessary to protect the peg.

What stands behind the Hong Kong dollar? How much can they intervene until it breaks (Soros-British Pound style)?

The Hong Kong dollar is backed by the HK$4 trillion (US$513.5 billion) Exchange Fund, one of the world’s largest foreign exchange reserves. The fund, established as an asset war chest for defending the currency’s value, also makes investments, earning a record HK$252 billion in 2017 income.

So who is to blame for the HKD’s sudden demise? Simple – The Fed! (and HKMA gave you the answer in the previous paragraph)

As SCMP details, the main culprit behind the local currency’s slump is the carry trade, an arbitrage whereby investors borrow low-yielding currencies to buy high-yielding currencies.

This is an arbitrage, where traders take advantage of differences in prices, selling a low-yielding product (the Hong Kong dollar) to buy a high-yielding product (the US dollar). In this case, the price difference is between the local borrowing cost known as the Hong Kong interbank offered rate (Hibor) and the US borrowing cost known as the Libor.

Simply put, traders are borrowing against the low Hibor, selling the Hong Kong dollar to buy the US currency for investments in high-yielding US assets. The difference between the two is widest since 2008.

As more traders pile on to the carry, more pressure is placed on the Hong Kong dollar, causing it to weaken further against the US currency… and The Fed’s plan to hike rates (as many as four times) will do nothing to help ease the situation – meaning any dollars sold in defense of the weaker HKD will be battling global carry trade flows driven by The Fed’s tightening.

Howard Lee, deputy chief executive of the Hong Kong Monetary Authority, said on Tuesday that while the Hong Kong dollar had reached its weakest level in more than 30 years, this valuation was “well within the design of the system.”

“Since the global financial crisis, we have seen large amounts of funds flow into Hong Kong, and now we are seeing these same funds flow out,”

And in case you thought this was just something that geeky FX traders worry about, think again…

As SCMP reports, a leading Hong Kong chain store specialising in Japanese snacks and consumer goods has responded to the recent depreciation of the Hong Kong dollar by marking up its products by 3 to 5 per cent.

A strategy since put in place to minimise the impact of any exchange rate volatility had also backfired.

“After 2016 we tried to reduce the ratio of Japanese imports to about 30 per cent,” Lam said. “But the stores have lost their appeal for our loyal customers, most of whom are drawn to our line-up of Japanese snacks.”

One group of residents sensitive to a lower Hong Kong dollar would be the more than 300,000 foreign domestic helpers working in the city, who remit part of their wages back home every month.

But they should not worry as the value of the paper-money in their pockets evaporates… the central bank chief said “stay calm” remember!

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Authored by Simon Black via SovereignMan.com,

On April 15, 1185, over eight centuries ago, a powerful earthquake struck the East Midlands region of England near the town of Lincoln.

Modern scientists estimate the magnitude of the earthquake at 5.0 on today’s Richter scale… which was a pretty big deal back then.

Medieval England didn’t have any earthquake-proof construction methods, and much of the region was leveled to the ground.

One of the structures that was destroyed was the Lincoln Cathedral. And the new bishop, Hugh de Burgundy, launched a bold reconstruction project to rebuild an even better cathedral using the latest advances in architectural design and technology.

De Burgundy’s successors kept making improvements to the cathedral, until, in the mid-1300s, the cathedral’s spire was raised to 160 meters (525 feet), making it the tallest structure in the world.

Curiously, a severe economic crisis broke out across Europe soon after as the King of England defaulted on his debts due to military setbacks in the 100 Years’ War.

Fast forward several centuries to the late 1700s, when, in the town of Ditherington, England, the local flax mill took the title as the world’s tallest building in 1797.

That same year, a major economic crisis began raging in Great Britain and the United States after a huge real estate bubble burst. Banks and businesses in both countries suffered major losses.

The completion of the Equitable Life Building in New York City in the early 1870s, which became the tallest building in the world, coincided with the Panic of 1873, and the Long Depression that lasted for more than a decade.

The New York World tower broke the record for tallest building in the world when it was completed in 1890… which also happened to be the same year that the economic panic of 1890 broke out.

Philadelphia’s city hall briefly held the record for world’s tallest building when it was completed just in time for the Panic of 1893– a crisis so severe that the US Treasury Department had to be bailed out.

The Met Life Insurance Tower in New York City shattered the record for the world’s tallest building when it was completed in 1907, just as the Panic of 1907 broke out.

(The Panic of 1907 was so extreme that it led to the creation of the Federal Reserve a few years later.)

Another financial crisis erupted in 1914, just on the heels of New York’s Woolworth Building becoming the tallest in the world.

And on the eve of the Great Depression, multiple projects were all simultaneously competing to become the world’s tallest building, including the Empire State Building, the Chrysler Building, and the Manhattan Bank Trust Building (now known as the Trump Building).

The construction of the World Trade Center and Chicago’s Sears Tower in the early 1970s, both of which became the tallest buildings in the world, immediately preceded the OPEC oil price shock in 1973 and the subsequent banking crisis and economic recession.

The Petronas Towers were completed in 1998 in Malaysia, taking the title as tallest in the world, right before the Asian Financial Crisis broke out.

Construction of the Taipei 101 tower, which became the tallest building in the world, began just months before the Dot-Com bubble burst and the Recession of the early 2000s began

And of course the Burj Khalifa in Dubai became the world’s tallest building when its height reached 688 meters (2,257 feet) on 1 September 2008… literally days before Lehman Brothers went bankrupt and the Global Financial Crisis kicked off.

Is all of this just a crazy coincidence?

Or is there perhaps a link to the world’s tallest buildings and economic crises?

It certainly stands to reason that enormous buildings are extremely expensive and require vast amounts of funding– something that is relatively easy to come by when the economy is near its cyclical peak.

Ego and hubris are also abundant when an economy is near the top, as booms and peaks are often accompanied by ostentatious displays of wealth– including ambitious construction projects.

During the 12th and 13th centuries, for example, when Italian city-states were the dominant powers of Europe, there was practically a competition among the richest citizens of Bologna, who built as many as 180 towers to show off their wealth.

By the mid 1300s, of course, Bologna’s power faded, and the city fell into economic obscurity.

It’s interesting to consider given the flurry of new projects, mostly in Asia, that are feverishly being constructed to rival the tallest building in the world.

From the Goldin Finance tower in Tianjin (to be completed this year), to the Wuhan Greenland Center (also 2018), to the Jeddah Tower in Saudi Arabia (as early as 2019), there is no shortage of hubris, or debt-based funding, to drive these projects to record heights.

All of these new towers, of course, are being built at a time when financial markets are near all-time highs and global debt is at an astonishing, record level of $233 trillion– several times the size of the global economy.

Certainly it’s possible that these historical examples are just wild coincidences.

But even if that were the case, a prudent, rational person still ought to recognize that economic booms never last forever.

There are always periods of expansion, followed by periods of recession. And the more excessive the boom, the more painful the correction.

We’ve been living through one of the longest periods of economic expansion in modern history– one that has been funded by massive quantities of debt, cheap interest rates, and trillions of dollars of new money conjured out of thin air.

It would be utterly foolish to presume that this expansion will persist forever… and to willfully choose to NOT prepare for the inevitable downturn.

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.

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The saga of Stephanie Clifford – better known to Americans as “Stormy Daniels” the former adult-film actress who claims she had an affair with Trump more than a decade ago – continued late Wednesday when the New York Times and NBC News reported that Trump lawyer Michael Cohen had filed a restraining order against Daniels to try and prevent her from speaking out about her affair with Trump.

The order, issued by an arbitrator in California, pertained to Daniels and the “hush agreement” she signed in October 2016 whereby she accepted $130,000 in exchange for signing an NDA about her relationship with Trump. the deal was made while Daniels was reportedly in talks with Slate and Good Morning America to share her story with them.

Details of the restraining order emerged late Wednesday after White House Press Secretary Sarah Huckabee Sanders addressed Daniels’ claims for the first time (she denied that the president had a relationship with the former adult actress) and announced that a Trump lawyer had won an arbitration proceeding against her.

Per the Times, the restraining order puts the White House in the middle of the story by creating “the spectacle of a sitting president using legal maneuvers to avoid further scrutiny of salacious accusations of an affair and a payoff involving the porn star.”

Daniels said her relationship with Trump was consensual, and that it began in 2006 during a golf tournament in Lake Tahoe, Nevada, but soured after Trump was unable to secure for her a spot on “The Apprentice”.

Daniels filed a lawsuit in Los Angeles Superior Court on Tuesday claiming the NDA she signed in 2016 is invalid because Trump never signed it.

Lawrence Rosen, a lawyer representing Cohen, said that an arbitrator, who “found that Ms. Clifford had violated the agreement,” barred her from filing her lawsuit and making other disclosures of confidential information.

Daniels’ lawyer, Michael Avenatti, said he didn’t consider the restraining order – dated Feb. 27 – to be valid, adding that his client would proceed with her lawsuit “in open court.”

“This should be decided publicly,” Avenatti said.

The NDA gives Trump the right to seek $1 million in arbitration should Daniels break – or threaten to break – their agreement.

In addition to her claim that Trump never signed the agreement, Daniels also argued that Cohen broke the terms of the NDA when he publicly admitted last month to paying Daniels $130,000 last month.

A copy of the restraining order, available below, left open the possibility that it could be modified int he future. An election watchdog called Common Cause is asking the Federal Election Commission and the Justice Department to investigate Cohen’s payment, arguing that it could constitute an in-kind contribution to the Trump campaign, and therefore should’ve been disclosed. 

Read the restraining order below:

 

Stormy Daniels Restraining Order by Anonymous JJ6eerL on Scribd

 

 

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Just hours before President Donald Trump called her a “disgrace” during a televised cabinet meeting (the same meeting where he joked that he still likes Gary Cohn, even though he’s “a globalist”), Oakland Mayor Libby Schaaf lashed out at Attorney General Jeff Sessions for criticizing her for behaving like a “gang lookout” by warning undocumented immigrants about an upcoming ICE raid in the Bay Area.

Sessions accused Schaaf of “needlessly endanger[ing] the lives of our law enforcement officers to promote a radical open borders agenda” during a speech where he discussed the Department of Justice’s lawsuit seeking to repeal three “sanctuary” laws passed by the state.

Schaaf accused Sessions of trying to “frighten the American public into thinking all undocumented residents are dangerous criminals,” per the Hill.

She also accused him of trying to advance a “racist” agenda.

“How dare you distort the reality about declining violent crime in a diverse sanctuary city like Oakland, California, to advance your racist agenda.”

“It was not my intention to get caught up in a national debate, but I do believe that I am speaking for the residents of my city,” she added. “The agenda of this administration is petty political vindictiveness.”

The mayor said that if the Justice Department decides to press criminal charges against her, a former US attorney who was appointed by former President Barack Obama has offered to represent Schaaf for nothing.

Schaaf has repeatedly defended her decision, saying she aimed “not to panic our residents but to protect them.”

“I did not intend to put the safety of law enforcement officers at risk,” she said. “I was very careful in not sharing any specific information…”

Still, the interim head of ICE said Schaaf’s warning marked “a new low” for the “sanctuary state” and estimated that her warning prevented the agency from locating 800 immigrants who were deemed threats to public safety.

“What she did is no better than a gang lookout yelling police when a police cruiser comes to the neighborhood except she did it to entire community of the this is beyond the pale,” said Interim ICE Director Thomas Homan.

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