The Richest People In The World Lost More Than $550 Billion In 2018

Like the old saying goes: What goes up must come down. And just as the fortunes of the world’s wealthiest swelled during the post-crisis era as QE and ZIRP bolstered asset prices, now that trend has been thrown into reverse thanks to the turbulence in global markets during the second half of the year.

According to Bloomberg, even the world’s richest individuals failed to find respite from a global market meltdown that has rendered 2018 the “worst year for markets on record.”

DB

Bloomberg’s Billionaires Index showed that the 500 richest people in the world had a combined $4.7 trllion in wealth as of Friday’s close, some $511 billion less than they had at the beginning of the year. With one week left to trade this year, 2018 is set to become the second year since the list was created in 2012 that the world’s wealthiest have seen their wealth decline.

Coaster

At their peak, soaring markets drove the aggregate wealth of the world’s wealthiest above $5.6 trillion before the downturn began shortly after the Federal Reserve raised interest rates for the third time this year back in September.

“As of late, investor anxiety has run high,” said Katie Nixon, chief investment officer at Northern Trust Wealth Management. “We do not expect a recession, but we are mindful of the downside risks to global growth.”

Even Amazon founder and CEO Jeff Bezos, who saw his fortune swell to $168 billion earlier this year, has watched it fall more than $50 billion from the highs as FANG stocks have lead the market lower.

Even Jeff Bezos, who recorded the biggest gain for 2018, wasn’t spared the volatility. His fortune peaked at $168 billion in September, a $69 billion gain. It later tumbled $53 billion – more than the market value of Delta Air Lines Inc. or Ford Motor Co. – to leave him with $115 billion at year-end.

But Bezos’ losses were mild compared with Mark Zuckerberg, whose net worth took the biggest hit among the world’s tech titans.

Zuck

The Amazon.com Inc. founder had a better year than Mark Zuckerberg, who recorded the biggest loss since January, dropping $23 billion as Facebook Inc. careened from crisis to crisis. Overall, the 173 U.S. billionaires on the list — the largest cohort — lost 5.9 percent from their fortunes to leave them with $1.9 trillion.

Billionaires in Asia lost a combined $144 billion…

Even Asia’s fabled wealth-creation machine stumbled as the region’s 128 billionaires lost a combined $144 billion in 2018. The three biggest losers in Asia all hailed from China, led by Wanda Group’s Wang Jianlin, whose fortune declined $11.1 billion.

Despite the turmoil, Asia continued to mint new members of the three-comma club. The Bloomberg index uncovered 39 new members from the region in 2018, although that status proved short-lived for some. About 40 percent had lost their 10-figure status as of Dec. 7.

…While billionaires in Europe also saw their fortunes decline.

From Zara founder Amancio Ortega to former Italian Prime Minister Silvio Berlusconi, most of Europe’s billionaires saw their fortunes fall. Germany’s Schaeffler family, the majority shareholders of car-parts maker Continental AG, lost the most as extra costs and tough business conditions in Europe and Asia hampered the company’s performance.

Georg Schaeffler and his mother Maria-Elisabeth Schaeffler-Thumann are $17 billion worse off than at the start of the year. That sum alone would place them among the world’s 100 richest people.

Mexico’s Carlos Slim, the majority shareholder of Latin America’s largest mobile-phone operator, also suffered big losses. Once the world’s richest person, Slim now ranks sixth with a $54 billion pile. 3G Capital co-founder Jorge Paulo Lemann saw his fortune drop the most among Latin American billionaires, losing $9.8 billion. But even with that fall, he remains Brazil’s richest person.

Russian fortunes on average fared better. The volatility caused by collapsing oil prices, a flare-up in tensions with Ukraine and tightening sanctions was partially offset by periodic gains. The combined net worth of the country’s 25 wealthiest people was down only slightly, ending at $255 billion, according to the ranking.

One outlier, though, was Russia, where billionaires fared better than elsewhere in the world (though only slightly).

Russian fortunes on average fared better. The volatility caused by collapsing oil prices, a flare-up in tensions with Ukraine and tightening sanctions was partially offset by periodic gains. The combined net worth of the country’s 25 wealthiest people was down only slightly, ending at $255 billion, according to the ranking.

Still, 16 of the 25 Russian billionaires on the Bloomberg index saw their net worth fall in 2018. Aluminum magnate Oleg Deripaska, who remains under U.S. sanctions, lost the most — $5.7 billion — and dropped out the Bloomberg ranking of the world’s top 500 richest people.

By contrast, energy moguls Leonid Mikhelson, Gennady Timchenko and Vagit Alekperov added a total of $9 billion. Timchenko, sanctioned in 2014, added 27 percent to his net worth as shares of gas producer Novatek rose 40 percent.

And if the co-CIO of the world’s largest hedge fund is right, the aggregate net worth of the world’s richest and most powerful individuas could be on track to worsen next year, which would, in our view, only ratchet up pressure on central banks to do whatever it takes to spare the global elite any more discomfort.

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Japan Gives Up On Inflation, Now Wants Deflation (Sort Of) To Offset Tax Hikes

Authored by Mike Shedlock via MishTalk,

Today seems straight from the Twilight Zone: First the PPT and now Abenomics in full reverse.

Please consider Japan Finally Concedes Its Crazy Low Prices Can’t Be Beat.

Japan has virtually given up on reaching 2% inflation after nearly six years of trying. An argument gaining ground in Tokyo holds that the inflation goal, once seen as paramount, doesn’t matter so much after all. Inflation excluding volatile fresh food and energy prices was just 0.3% in November, and it has barely budged all year.

Mr. Abe has largely stopped discussing the dangers of deflation, and his government is actually trying to push some prices down ahead of a tax increase set to take effect in October 2019. Mr. Abe’s de facto No. 2, Chief Cabinet Secretary Yoshihide Suga, has called on mobile-phone carriers to lower fees by about 40%—a move that could knock a full percentage point off inflation, according to government estimates.

“There is no change to our stance of seeking the 2% price goal as soon as possible by patiently continuing powerful easing,” Mr. Kuroda said at a November press conference. At the same time, he has started talking more about the potential downsides of aggressive monetary easing,

Still, BOJ officials are hesitant to abandon the target altogether out of fear it could damage expectations and push the country back into deflation, said people familiar with the BOJ’s thinking.

Raising Prices

Torikizoku (Chicken Nobility), raised prices for the first time in 30 years last year, by the equivalent of 16 cents.

“Once prices went up, it wasn’t just the chickens that got skewered. Same-store sales at the chain have fallen more than 5% every month since May and profit fell 76% compared with a year earlier in the most recent quarter.”

Abe now wants mobile-phone carriers to lower fees by about 40%, a move that could knock a full percentage point off inflation, so it can raise taxes.

Price Stability

The BOJ does not officially want to abandon its inflation target. And BOJ predecessor, Masaaki Shirakawa saysWhat is more important is…to aim for sustainable price stability in the medium to long term.

Japan is the one nation that seems to have a modicum of price stability. It doesn’t want it. Heck, it does not even seem to know it has some stability.

The Fed defines stability as prices forever rising.

This is all straight from the Twilight Zone.

What’s Coming?

I do suspect that at some point these sorts of financial shenanigans will “succeed” beyond Japan’s wildest expectations with Japan intervening to stop massive inflation.

All it will take is an attitude changes that’s arguably long overdue.

For discussion, please see Japan’s Red Queen Race.

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They Aren’t BTFD: S&P Futures Slide In Early Illiquid Trading

On Christmas Day, president Trump had a simple message for Americans: BTFD. They chose to sell instead.

As we noted earlier, in a presser following his address to U.S. armed forces members on a Christmas Day video conference call, Trump told reporters “we have companies, the greatest in the world, and they’re doing really well. They have record kinds of numbers. So I think it’s a tremendous opportunity to buy. Really a great opportunity to buy.

Alas, following the historic Christmas Eve rout which saw the S&P plunge the most ever on the shortened pre-Christmas session, Americans are clearly not seeing the market as a “tremendous opportunity to buy” and are instead selling futures with the E-mini sliding off the gate when futures trading resumed at 6pm, down as much as 1.1% and touching a session low of 2,316.75 in an early burst of selling before rebounding in what appears to be a session with absolutely no liquidity.

And while it is safe to say that already record low liquidity is even more abysmal than usual, with the Plunge Protection Team now active, the president himself urging Americans to buy stocks, and with hedge funds desperate for at least a little bounce into the final 4 sessions of the year, if stocks still can’t stage even a tiny relief rally it will be safe to say that the bear market has indeed arrived.

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Third Of Americans Considering Leaving US To Live Abroad, Study Finds 

About one-third of natural-born Americans are ready to call it quits, pack up their stuff and move outside of the US — at some point in the future, according to Study Finds, a website that seeks out research released by universities and established companies then summarizes it for the general public. 

Researchers Dr. Amanda Klekowski von Koppenfels and Dr. Helen Marrow published their new report on November 28 in the International Migration Review. 

​​​​​​​

They analyzed data collected in 2014 and discovered that people who do not feel “very strongly” about their national identity were most likely to live abroad.

The most common reason (87.4% of participants) to live outside the US is the desire to travel the world.

Political belief had limited to no correlation of their dreams of moving overseas.

“While one might think that ideological orientation plays a role, at least in this pre-Trump survey, we found out that it did not, at least not directly,” said Koppenfels.

While politics did not have a direct correlation, researchers found that one’s own national identity was a critical factor in their aspirations for living in another country. Those who responded with a weak national identity were more likely to leave.

“We asked respondents if they had a ‘very strong,’ ‘somewhat strong,’ ‘not very strong,’ or ‘not strong at all’ American national identity. Those who had anything other than ‘very strong’ national identity were more likely to aspire to live abroad,” Koppenfels told Study Finds. “It was, of course, a quantitative measure of a subjective belief measuring individuals’ self-identity.”

Researchers used data from 2014 of 877 Americans who were born in the US, and found beside exploration; other reasons include retirement (51%), fleeing country before economic collapse (49%), or for work (48%).

In addition, participants were asked whether or not they had aspired to live outside the US for an extended period time: “Just over half (58.4%) said no, not at all; 8.4% said they never had, but might consider it if something came up and 33.1% had thought about doing so, with 5.4% overall strongly planning on doing so,” said Koppenfels.

In a previous study, Koppenfels determined that exploration is the primary reason Americans have already relocated abroad, followed by marriage or partnership.

She told Study Finds that another study will be run next year to see how the political climate has changed responses.

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GoFundMe Returns Over $400,000 Scammed By New Jersey Grifters

GoFundMe has returned over $400,000 to people who donated to a trio of scam artists who fabricated a story about a homeless good Samaritan. 

39-year-old Mark D’Amico (left), 28-year-old Kate McClure (center) and 35-year-old Johnny Bobbitt (right) are facing theft and conspiracy charges.

All donors who contributed to this GoFundMe campaign have been fully refunded,” GoFundMe spokesman Bobby Whithorne said in an email, adding that “while this type of behavior by an individual is extremely rare, it’s unacceptable and clearly it has consequences.”

The company is fully cooperating with investigators. 

Kate McClure, 28, Mark D’Amico, 39, and drug-addicted homeless veteran Johnny Bobbitt, 35, were charged with theft by deception and conspiracy to commit theft by deception in November, after the three concocted a story that Bobbitt had given McClure his last $20 after her car ran out of fuel, leaving her stranded on the side of I-95 in a dangerous Philadelphia neighborhood. 

The GoFundMe scam was uncovered after McClure and D’Amico refused to give Bobbitt over $300,000 of the $402,000 raised – causing Bobbit to lawyer up, alleging that the couple committed fraud and conspiracy by taking large amounts of the donations to “enjoy a lifestyle they could not afford” and using the account as “their personal piggy bank.”

The net proceeds were $360,000 after fees, which went into an account controlled by McClure. Bobbitt received approximately $75,000 of it according to Burlington County Prosecutor Scott Coffina.

The entire campaign was predicated on a lie,” said Coffina during a November press conference. “Less than an hour after the GoFundMe campaign went live McClure, in a text exchange with a friend, stated that the story about Bobbitt assisting her was fake,” he said. 

In one of the texts read by Coffina, McClure allegedly wrote to a friend, “Ok, so wait, the gas part is completely made up but the guy isn’t. I had to make something up to make people feel bad. So, shush about the made up stuff.” –ABC

After the story went sideways – and reports emerged that the couple had pilfered most of the money meant for Bobbitt, police raided McClure and D’Amico’s home looking for evidence in the case, and seizing a BMW they bought with charitable donations. 

Coffina said that if Bobbitt hadn’t sued, the three might have gotten away with the scam

D’Amico and McClure turned themselves in last month according to WPVI, while Bobbit was arrested in Philadelphia on charges of being a fugitive from justice. 

McClure, a receptionist for the New Jersey Department of Transportation, has turned on D’Amico – a carpenter, claiming that she “was used by Mr. D’Amico and Mr. Bobbitt, and she thought throughout that this money was going to a homeless veteran.”

D’Amico’s attorney says he is surprised by her defense. 

“I don’t know how Kate is playing the victim now. I will be curious to see how this defense plays out for her in court,” he said. 

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Trump Urges Americans To Buy The Dip; Voices Confidence In Mnuchin, Powell

Stocks may have finally found the catalyst they need, if only for a brief relief rally.

Almost ten years after president Obama marked the bottom of the financial crisis, when on the day the S&P hit 666, the president gave the green light to buy stocks on March 6, 2009, saying – rather bizarrely – that “what you’re now seeing is profit and earning ratios are starting to get to the point where buying stocks is a potentially good deal if you’ve got a long-term perspective on it”, president Trump also urged Americans to buy the dip when on Tuesday he suggested that the recent swoon in the stock market is a buying opportunity for investors.

“We have companies, the greatest in the world, and they’re doing really well,” Trump told reporters at the White House on Christmas Day. “They have record kinds of numbers. So I think it’s a tremendous opportunity to buy. Really a great opportunity to buy.”

Trump’s invocation to BTFD came one day after the most violent Christmas Eve selloff on record, and the day when the S&P fell not only to its lowest level in 20 months, but also slumped into a bear market. For Trump, the stock market has served as a barometer on his administration, and while he was pointing out virtually every major uptick for the past two years, the recent plunge has infuriated him, leaving him mute on any market-related topic.

But a more important catalyst for a potential Wednesday rally came when Trump appeared to back off on his demands that the Fed stop hiking, which culminated with Trump reportedly seeking to fire Fed Chair Powell and speculation that if the market does not stop falling, Treasury Secretary Mnuchin may also be on the chopping block.

Alongside urging Americans to BTFD, Trump expressed confidence in the Treasury secretary and the Federal Reserve, in an attempt to calm financial markets further roiled after a recent Bloomberg report that the president had discussed firing the central bank’s chairman over raising interest rates.

Asked about Fed Chairman Jerome Powell, Trump said the central bank is “raising interest rates too fast” but he has “confidence” that the Fed will “get it pretty soon.”

Trump was also asked if he has confidence in Treasury Secretary Steven Mnuchin  who sparked a market panic on Monday with his late Sunday statement in which he said he had called the CEOs of the top 6 banks to make sure bank liquidity levels are fine (prompting a frenzy of question what he knows that the rest of the market does not) and followed it up with a call with the Plunge Protection Team on Monday, which however failed to prevent one of the worst one-day routs in history .

Trump’s response: “yes I do, very talented guy, very smart person.”

While answering questions from reporters at the White House after addressing U.S. armed forces members on a Christmas Day video conference call, Trump also said the Fed is hiking borrowing costs because the “economy is doing so well” – which is accurate, however it is the market that is spooked by the aggressive tightening – adding that U.S. companies are having “record kinds of numbers” and it’s a “tremendous opportunity to buy.”

The remarks represented Trump’s first expression of public support for Mnuchin and Powell since Bloomberg reported last week that the president has discussed dismissing Powell who was recommended by Mnuchin. Overnight, Bloomberg also reported that the president also weighed dismissing Mnuchin, while another said that Mnuchin’s tenure may depend in part on how much markets continue to drop.

Trump’s Oval Office remarks on Tuesday contrasted with an angry tweet on Monday saying “The only problem our economy has is the Fed. They don’t have a feel for the Market, they don’t understand necessary Trade Wars or Strong Dollars or even Democrat Shutdowns over Borders.” Previously, Trump had unleashed a litany of complaints about the Fed’s rate hiking pace, as summarized in the chart below, raising concerns that the Fed may lose its “independence” if Powell is seen as folding to Trump’s demands or if Trump replaces the Fed chair as a result of the recent market drop.

Trump’s latest remarks on the Fed may be seen as bullish by the market as they alleviate somewhat concerns that Trump would try to remove Powell, even if the president didn’t explicitly say that he won’t fire the central bank chief. Mnuchin said in a pair of tweets Saturday evening that he’d spoken with the president about the matter, and he quoted Trump saying he didn’t believe he had the authority to remove the Fed chairman.

“Well, we’ll see,” Trump said Tuesday when asked about his confidence in Powell. “They’re raising interest rates too fast. That’s my opinion. But I certainly have confidence. But I think it will straighten. They’re raising interest rates too fast because they think the economy is so good. But I think that they will get it pretty soon. I really do. I mean, the fact is that the economy is doing so well that they raised interest rates and that is a form of safety in a way.”

Trump’s “safety” comment is a reference to the Fed’s ability to lower rates from higher if and when the economy starts contracting, giving the economy a greater cushion in case of a downturn. This is also known as the “hiking rates now to lower them later” approach.

Incidentally, according to the Fed Funds market, as of Monday’s rout, the odds for a January 2020 cut are now higher than for a hike, indicating that the market is now pricing in an easing cycle and/or a recession starting in just over one year.

 

 

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It’s Not Just A Trade War; And It’s Not Just China…

Authored by Alastair Crooke via The Strategic Culture Foundation,

It’s not just a trade war: behind that, hides a tech-war – and behind that, lie the plans for a full-spectrum arms race – from space to cyber.

As one US current commander put it:

“fields of data and information … that’s what modern war runs on. “What are the missions we do in space today? Provide information; provide pathways for information; in conflict, we deny adversaries access to that information”. 

So, the new arms-race is as much about retaining and advancing US tech-leadership in chip evolution, quantum computing, big data and Artificial Intelligence (AI) for weaponry – as it is just about tech lead in the economic sphere: i.e. dominating civilian industry standards for the next generation of those smart electronic gadgets – that we all will buy.

So, what is going on?

Well, the US military complex is ‘for real’ on this. They are gearing-up for the coming military-standoff with China. The constant harking on themes that China is stealing America’s technology, its knowhow and its data – and now the barrage of allegations about China ‘hacking’ and (shades of the Russiagate) interfering in US elections, essentially (but not wholly) is about shaping a casus belli versus China. The rude fact is that the US military were shocked to find how far they were falling behind Russia and China in high-tech weaponry.

A bipartisan, expert US Defense Department report submitted to Congress in November, warned:

“America’s military edge is diminished, and in some cases erased – just as rival countries are getting savvier, stronger and more aggressive … America could lose the next war it fights … It might struggle to win, or perhaps lose, a war against China or Russia. If the United States had to fight Russia in a Baltic contingency, or China in a war over Taiwan, Americans could face a decisive military defeat …

“Adversaries have studied US military strategies, and learned how to counter them”, said commission co-chair Eric Edelman: “They’ve learned from our success – and while we’ve been off doing a different kind of warfare – they’ve been prepared for a kind of warfare at the high end – that we really haven’t engaged in for a very long time”.

Ordinary Americans have not been accustomed to think of China as a ‘threat’: Maybe as commercial threat, yes – but not as a military opponent, per se. But the stream of allegations about how China is ‘stealing’ America’s prosperity and jobs, are intended to change that – Public opinion is being ‘groomed’ for conflict.

So is this all about the US’ tech rivalry with China? Well, unfortunately no.

It is simply that a casus belli for Russia is un-necessary. Russia has been so integrated as an adversarial antinomy; so commingled into domestic US politics, that any ‘grooming’ of the public, simply is superfluous. It is taken for granted now, that Russia is ‘enemy’. Trump’s foreign policy ‘hawks’, such as John Bolton and Mike Pompeo, have in their gunsights Russia, as much as China. The Defense report to Congress makes that clear: It is China and Russia. But it is that the ‘hawks’ do not blow so much smoke about Russian malignity, as China, as there is a public to be convinced about China.

The tactics for this tech, Cold War have been set out by Administration officials quite clearly:

Forbid the export of emerging or ‘foundational’ technologies;

restrict tech access to individuals, as well as companies;

and write sanctions to cover the range of foundational technologies, and tech-manufacture knowhow. And cut-off China from key supply-line component-makers.

And badger Europeans to boycott Chinese tech.

And Russia? Is it somehow apart from this ‘war’? Well, Russia, plainly, is different. It doesn’t have the same interpenetration with the US on tech, and its defence and avionics capabilities are largely home-grown – albeit with some limited vulnerability in terms of component requirements.

But America has other, ‘foundational’, technology knowhow: And the ‘tech-war’ principles of denial towards China can be applied just as readily to Russia – albeit in a slightly different mode. Trump has made a point of declaring that the US intends to be globally energy dominant. And the US Interior Secretary has, in parallel, linked America’s energy primacy to the possibility of a physical blockade on Russian oil exports: Ryan Zinke told the Washington Examiner in September that the US Navy has the ability to blockade Russia from controlling energy supplies: “the economic option on Iran and Russia is, more or less, leveraging and replacing fuels. We can do that because … the United States is the largest producer of oil and gas.”

In practice, such action is unlikely. It is bombast: the US wants crude prices down, not up. But the point here, rather, is the US focus on Russian energy. Zinke’s remarks demonstrate the DC mindset: “Russia is a one trick pony”, he said, underlining that Russia’s ability to sell energy, is paramount to its economic survival.

But the China tech-war precedents, in terms of component denial and sanctioning technology transfer, are not only more plausible in the case of Russia: they already are happening (i.e. in the threats surrounding NordStream 2, which mirror the arm-twisting Europeans are experiencing against purchasing Huawei’s 5G infrastructure). Again, as with the case of China, the US is pressing on multiple geo-political pressure points onto Russia – simultaneously with trying to hobble it economically, through sanctions. Next year – almost certainly (it is a legal requirement) – the US will unleash a new torrent of Russia sanctions in respect to the Skripal event.

Is this just sabre-rattling to keep American imperial spirits high? Should we take seriously the notion of the US Administration triggering geo-political shocks, sufficient to shake, what is left of ‘the global system’? I think it quite possible. President Trump will be enmired in the coming year with saving himself, his family, and his businesses, from myriad investigations on the one hand. On the other, he will be fighting the Democrats in Congress – and, should the markets tank badly, his leverage over Senate Republicans, will evaporate. There are enough RINOs (Republicans In Name Only) ready to cheer on a Brutus, when conditions become ripe.

And beyond the US, many potential flashpoints are evident:

The Gulf is fearful;

Saudi Arabia is in internal conturbation; Poroshenko is trying to save his political skin;

America has been (until yesterday) attempting to sustain a long-term military occupation in Syria, to which Turkey is militantly opposed;

Israel is flexing muscles on Hizbullah’s doorstep –

and with Europe on the cusp of a possible economic downturn, the Yellow-Jacket symptoms likely will erupt, in response, in diverse apparitions.

Brexit, Italy, Sovereign Debt spreads, Banks – all spell rising risks, whether containable, or not, we shall see.

But here is the point: whilst Trump is glued to his TV, tracking every twist and turn to the domestic assault on his sensitive self-esteem, his two warrior wings: the China hawks and the Middle East hawks will be piloting at the NSC controls – under the craft’s captain, Mr John Bolton.

What are the risks of major policy mistakes, mal-administration, internal US paralysis, US market doldrums and a distracted President, permitting his ideological hawks to trigger some volatile flashpoint? Quite high, maybe.

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Top Chinese Banker Warns Against Buying Property “Because There’s No More Money To Be Made”

Back in 2017, we explained why the “fate of the world economy is in the hands of China’s housing bubble.” The answer was simple: for the Chinese population, and growing middle class, to keep spending vibrant and borrowing elevated, it had to feel comfortable and confident that its wealth would keep rising. However, unlike the US where the stock market is the ultimate barometer of the confidence boosting “wealth effect”, in China it has always been about housing as three quarters of Chinese household assets are parked in real estate, compared to only 28% in the US, with the remainder invested financial assets, which is also why it has traditionally been Beijing’s duty to make sure that home prices appreciate year after year, even if the broader economy is doing poorly.

 

Which is why a recent warning by a top Chinese banker that the days of steady home price appreciation are now over, should come as the latest flashing red alert of more turmoil to come first for the world’s most populous nation and eventually, the rest of the world.

On Sunday, the chairman of a leading Chinese state bank warned Chinese investors not to buy property now because “there’s no money to be made” due to high prices and alarming vacancy rates (an ominous development we first discussed last month in “The “Nightmare Scenario” For Beijing: 50 Million Chinese Apartments Are Empty“).

Tian Guoli, the chairman of China Construction Bank, which provides mortgage loans to millions of Chinese households, was quoted by China’s Sina.com portal that the room for further property price rises was limited and it was unwise to buy at current rates.

Tian Guoli, chairman of China Construction Bank

Offering some surprisingly blunt advice which would appear counterproductive to his business model – after all Guoli is incentivized to make as many mortgages as possible – Tian said that “there’s no money to be made if you buy a flat nowadays. If you insist on buying a home, aren’t you trapped at the high price level?” The CCB Chairman was speaking at a forum organixed by Peking University’s Guanghua school of management.

As the SCMP reports, the warning by Tian, who is an alternate member of the Communist Party Central Committee, came at a time when the country is in heated debate about the role of the property market – whether it will lead to an bust or whether it can help shore up the economy.

At the recently concluded Central Economic Work Conference, which disappointed markets without providing any concrete additional stimulus measures, the top leadership promised to build a long-term mechanism for the property market, on the basis that “property is for living, not for speculation”, adding that regulations would vary from city to city.

To be sure, China’s fascination with housing is understandable: over the past two decades property has proved to be one of the best investments in China, and is the reason why unlike the stock market the bulk of China’s household wealth is invested in housing. It is also why, despite occasional government intervention – from purchase restrictions and sales limits to mortgage loan constraints – the average price has soared, making property in Beijing and Shanghai as expensive as London or Tokyo.

However, amid reports of massive housing vacancies as Chinese builders overextended in recent years to prop up GDP resulting in over 50 million empty apartments, there has also been increasing concern that a downturn in the housing market would hit households, banks and developers hard – and this in turn would be a serious threat to China’s state banks and local governments, whose revenues are tied to the property market. Meanwhile, even the smallest turbulence in the market could unleash a furious firesale as builders seek to dump vacant properties: in China, some 22% of the total housing stock is unoccupied, roughly double that of other developed economies.

Meanwhile, the debt keeping China’s housing bubble afloat keeps rising, with the value of outstanding real estate loans – including mortgage and development lending – reaching 38 trillion yuan (US$5.5 trillion) by the end of September 2018, or 28% of total lending, according to government data, while just personal home mortgages in China have exploded sevenfold from 3 trillion yuan ($430 billion) in 2008 to 22.9 trillion yuan in 2017, according to PBOC data.

By the end of September, the value of outstanding home mortgages had surged another 18% Y/Y to a record 24.9 trillion yuan, resulting in a trend that as Caixin notes, has turned many people into what are called “mortgage slaves.”

The good news is that for now the value of the collateral is higher as the combined value of properties in China, Tian warned, has reached US$40 trillion, larger than the US$30 trillion in the United States; as a result any downturn in housing prices would lead to massive impairments.

Furthermore, adding to the vacancy problem, while many property speculators in the West prefer to rent out their properties to ensure a rental income, in China it is more common to keep newbuilds empty because lived-in properties lose some of their value.

Tian said China still an adequate supply of housing stock, with shortages limited to a few big cities. However, in these cases he said it was important to ensure there were enough rental properties available.

“It is very necessary for large state-owned financial institutions to penetrate into property rental markets,” he said.

Meanwhile, the latest China household finance survey conducted by the Southwest University of Finance and Economics, which was published last week, found that the number of vacant urban homes in China has risen to 65 million units in 2017 from 42 million units in 2011, with the vacancy ratio rising to 21.4 per cent from 18.4 per cent in the period.

China’s small cities had more serious vacancy problems than bigger ones, the research centre found, echoing Tian’s speech. Data from the National Bureau of Statistics showed that the average living area of Chinese urban residents already reached 36.6 square meters in 2016.

* * *

What is most troubling, and what may have spurred Tian’s warning, is that despite relatively stable home prices, the foundations behind the housing market are cracking. As the WSJ recently reported, in early December, a group of homeowners stormed the sales office of their Shanghai complex, “Central Washington”, whose developer, Shanghai Zhaoping Real Estate Development, was advertising new apartments at a fraction of the prices of the ones sold earlier in the year. One apartment owner said the new prices suggested the value of the apartment she bought from the developer in March had dropped by about 17.5%.

“There are people who bought multiple homes who are now trying to sell one to pay off the mortgage on another,” said Ran Yunjie, a property agent. One of his clients bought an apartment last year for about $230,000. To find a buyer now, the client would have to drop the price by 60%, according to Ran.

Meanwhile, in a truly concerning demonstration of what will happen when the bubble finally bursts, last month we reported that angry homeowners who paid full price for units at the Xinzhou Mansion residential project in Shangrao attacked the Country Garden sales office in eastern Jiangxi province last week, after finding out it had offered discounts to new buyers of up to 30%.

“Property accounts for roughly 70 per cent of urban Chinese families’ total assets – a home is both wealth and status. People don’t want prices to increase too fast, but they don’t want them to fall too quickly either,” said Shao Yu, chief economist at Oriental Securities. “People are so used to rising prices that it never occurred to them that they can fall too. We shouldn’t add to this illusion,” Shao added, echoing Ben Bernanke circa 2005.

But the biggest surprise once the music finally stops may be that – as a fascinating WSJ report revealed one year ago –  China’s housing downturn is likely far, far worse than meets the eye, as under Beijing’s direction more than 200 cities across China for the last three years have been buying surplus apartments from property developers and moving in families from condemned city blocks and nearby villages. China’s Housing Ministry, which is behind the purchases, said it plans to continue the program through 2020. The strategy, supported by central-government bank lending, has rescued housing developers and lifted the property market.

In other words, while China already has a record 50 million empty apartments, the real number – when excluding the government’s own stealthy purchases of excess inventory – is likely significantly higher. It is this, and not China’s stock market, that has long been the biggest time bomb for Beijing, and if Trump and Peter Navarro truly want to crush China in their ongoing trade war, they should focus on destabilizing the housing market: the Chinese stock market was, and remains just a distraction.

To summarize:

  • China has more than 50 million vacant apartments
  • Mortgage loans have grown 8-fold in the past decade
  • Prices are kept steady thanks to constant government purchases of surplus inventory
  • China’s top mortgage banker is urging his potential clients not to buy as price appreciation is limited
  • Home prices are already cracking, with some homebuilders forced to cut prices by 30%.
  • Homebuyers revolt, forming angry militias and storm homesellers’ offices when prices dip

For now, China has been able to maintain the illusion of stability to preserve social order. However, should the housing slowdown accelerate significantly and tens of millions in empty units suddenly hit the market, then the “working class insurrection” that China has been preparing for since 2014…

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The Year The Bitcoin Bubble Burst, In Charts… And What Comes Next

2018 was the year the bitcoin bubble burst… again.

One year after Bitcoin, or BTC, exploded from below $1000 to nearly $20,000 last December 2017, the cryptocurrency has lost about 80% of its value. The dramatic fall tops the dot-com bust, when the NASDAQ Composite fell 78% over the course of two years (that said, it is still about 4x higher than where it was 2 years ago). Meanwhile, the rest of the crypto market has largely followed BTC’s lead: the market capitalization of all digital currencies is now hovering around $134bn versus $800bn earlier this year.

For veteran cryptotraders, the following intro from Goldman will be redundant but here it for those who may have slept through the bitcoin mania days of late 2017 and early 2018: BTC remains the largest cryptocurrency, commanding more than half of crypto’s total value. Ripple (XRP)—which is meant to facilitate digital payments—and Ethereum (ETH)—the unit of value on a platform that allows for the creation of “smart contracts”—are the second- and third-largest players, respectively. While the cryptocurrency sell-off was broad-based, those intended to function as a store of value (e.g., BTC) appeared to fare better than “utility tokens,” such as those operating on the Ethereum platform.

Negative headlines likely contributed to crypto declines. While it’s difficult to pinpoint a single driver of crypto’s struggles, a number of negative developments surfaced this year according to Goldman, among which were a series of high-profile hacks of cryptocurrency exchanges, including Japan’s Coincheck and South Korea’s Coinrail. The Wall Street Journal reported that nearly one in five initial coin offerings (ICOs) showed potential signs of fraud. And questions surfaced about the reliability of Tether, a so-called “stablecoin” meant to be backed one-to-one by US dollars.

Regulators also stepped up scrutiny, and no crypto ETF made it to market despite an aggressive push. At the same time, the US government took an active role in the crypto space throughout 2018. For example, the SEC initiated a broad inquiry into the structure of sales and pre-sales of digital tokens beginning in February. Months later, the Commodity Futures Trading Commission demanded more transparency from BTC exchanges, while contributing to a criminal probe into price manipulation among crypto traders. All the while, the SEC turned down multiple attempts to create a BTC exchange-traded fund amid ongoing concerns over custody and surveillance of the underlying asset.

But this biggest disappointment for crypto enthusiasts is that involvement of traditional institutional investors remained limited in 2018 despite much hype and promise. While BTC futures gained some early traction post their launch on US exchanges in December 2017, open interest and trading volumes have faded since.

In addition, crypto funds have been under substantial pressure (with several shutting), given the sell-off while bitcoin mining profitability and hash rates have collapsed, as many bitcoin miners have gone out of business.

That said, some major banks – including Goldman – announced this year that they are looking at establishing trading desks with a focus on crypto assets.

Despite the crypto carnage of 2018, blockchain technology made some (quieter) gains. While the buzz surrounding blockchain technology seemed to fade in step with the crypto sell-off, a number of companies continued to introduce initial blockchain prototypes. And several banks—especially those in Asia and Latin America—expressed interest in using Ripple’s technology. One notable announcement was the Australian Securities Exchange’s decision to establish a blockchain-based platform to facilitate the clearing and settlement of cash equities, among other functions. The company has since delayed implementation until the first half of 2021, though it still intends to move forward with the project.

Meanwhile, talk of central bank digital currencies continued over the course of 2018, with institutions such as the Bank for International Settlements and the International Monetary Fund dedicating increasing attention to the potential role of central bank digital currencies (CBDCs) in monetary policy, market structure, and payment systems.

* * *

Yet while the bitcoin bubble may have burst, it won’t be the first time, and it certainly won’t be the first time bitcoin was left for dead (see the charts below) comparing the 2013-2014 and 2017-2018 bubbles.

So what can fans, fanatics, critics, cryptotraders and the general public look for in 2019 (and beyond) according to Goldman Sachs?

  • Continued efforts to expand institutional involvment. Nasdaq may list BTC futures contracts sometime next year, and regulators will also consider new ETF applications, with at least one SEC review pending for early 2019.
  • Further regulatory scrutiny. The SEC has has begun to crack down on unregistered ICOs in what appears to be a broader effort to regulate cryptocurrecies like traditional securities.
  • Broader adoption of blockchain technology. Although blockchain technology will continue to evolve, it has the potential to have a major impact across industries (e.g., peer-to-peer transactions and the clearing/settlement of securities). That said, Goldman expects limited adoption of early-stage blockchain prototypes in the next one to three years. However, broader acceptance is still likely to take a decade or more.

Finally, here is an annotated history of bitcoin prices during the first and second bitcoin bubble. We eagerly look forward to the third, and most violent one.

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Dumping On The Donald

Authored by Raul Ilargi Meijer via The Automatic Earth,

I still had some things I didn’t talk about in Sunday’s Trump Derangement International, about how the European press have found out that they, like the US MSM, can get lots of viewers and readers simply by publishing negative stories about Donald Trump. The US president is an attention magnet, as long as you only write things about him designed to make him look bad.

The Guardian is only too happy to comply. They ran a whole series of articles on Sunday to do juts that: try to make Trump look bad. Note that the Guardian editorial team that okayed the articles is the same as the one that allowed the fake Assange/Manafort one, so their credibility is already shot to pieces. It’s the magic triangle of today’s media profits: spout non-stop allegations against Russia, Trump and Julian Assange, and link them when and where you can. It doesn’t matter if what you say is true or not.

Anyway, all the following is from the Guardian, all on December 23. First off, Adam Gabbatt in New York, who has painstakingly researched how Trump’s businesses, like Trump Tower and the Trump store, don’t appear to have sufficiently (as per him) switched from Happy Holidays to Merry Christmas. Sherlock Holmes would have been proud. A smash hit there Adam, bring out the handcuffs.

Trump’s ‘Merry Christmas’ Pledge Fails To Manifest

During Donald Trump’s presidential campaign he talked often about his determination to win one particular war. A war that had been raging for years, he said. Specifically: the war on Christmas. But despite Trump’s repeated claims that “people are saying Merry Christmas again” instead of the more inclusive “happy holidays”, there are several places where the Christmas greeting is absent: Trump’s own businesses.

The Trump Store, for example. Instead of a Christmas gift guide – which surely would be more in keeping with the president’s stated desire for the phrase to be used – the store offers a holiday gift guide. “Shop our Holiday Gift Guide and find the perfect present for the enthusiast on your list,” the online store urges. “Carefully curated to celebrate the most wonderful time of year with truly unique gifts found only at Trump Store. Add a bow on top with our custom gift wrapping. Happy Holiday’s!”

The use of the phrase “Happy Holiday’s” [sic] in Trump marketing would seem particularly egregious. The long-standing “War-on-Christmas” complaint from the political right is that stores use the phrase “Happy Holidays”, rather than specifically mentioning the Christian celebration. It is offered as both an example of political correctness gone mad, and as an effort to erase Christianity from the US.

It’s just, I think that if Trump had personally interfered to make sure there were Merry Christmas messages all around, you would have remarked that as president, he’s not allowed to be personally involved in his businesses. But yeah, you know, just to keep the negativity going, it works, no matter how fluffy and hollow.

Second, still on December 23, is Tom McCarthy for the Guardian in New York, who talks about Robert Mueller’s phenomenal successes. Mueller charged 34 people so far. In a case that involves “this complexity which has international implications, aspects relying on the intelligence community, complicated cyber components”. It really says that.

And yes, that’s how many people view this. What do they care that Mueller’s original mandate was to prove collusion between the Trump campaign and ‘Russians’, and that he has not proven any collusion at all so far, not even with 34 people charged? What do they care? It looks like Trump is guilty of something, anything, after all, and that’s all the circus wants.

Robert Mueller Has Enjoyed A Year Of Successes … 2019 Could Be Even Stronger

One measure of special counsel Robert Mueller’s prosecutorial success in 2018 is the list of former top Donald Trump aides brought to justice: Michael Cohen pleaded guilty, a jury convicted Paul Manafort, a judge berated Michael Flynn. Another measure is the tally of new defendants that Mueller’s team charged (34), the number of new guilty pleas he netted (five) and the amount of money he clawed back through tax fraud cases ($48m).

Yet another measure might judge Mueller’s pace compared with previous independent prosecutors. “I would refer to it as a lightning pace,” said Barb McQuade, a University of Michigan law professor and former US attorney. “In a case of this complexity which has international implications, aspects relying on the intelligence community, complicated cyber components – to indict that many people that quickly is really impressive work.”

But there’s perhaps a more powerful way to measure Mueller’s progress in his investigation into Russian interference in the 2016 US election and links between Moscow and the Trump campaign; that’s by noticing how the targets of his investigation have changed their postures over the course of 2018, from defiance to docility – or in the case of Trump himself, from defiance to extreme, hyperventilating defiance.

In reality, you would be at least as correct if you would claim that Robert Mueller’s investigation has been an abject failure. Not one iota of collusion has been proven after 20 months and $20 million in funds have been used. And any serious investigation of Washington’s culture of fixers and lobbyists would land at least 34 people who have committed acts that border on or over illegality. And in a matter of weeks, for a few hundred bucks.

Third, still on December 23, is Julian Borger in Washington, who’s been elected to convey the image of chaos. Trump Unleashed, says our modern day Shakespeare. With Jim Mad Dog Mattis characterized as “.. the last independently minded, globally respected, major figure left in the administration”... Again, it really says that.

Because woe the man who tries to bring US troops home, or even promises to do so a few days before Christmas. For pulling out America’s finest, Donald Trump is being portrayed as something eerily close to the antichrist. That truly is the world on its head. Bringing troops home to their families equals chaos.

Look, guys, if Trump has been guilty of criminal behavior, the US justice system should be able to find that out and convict him for it. But that’s not what this is about anymore. A million articles have been written, like these ones in the Guardian, with the sole intention, evidence being scarce to non-existent, of smearing him to the extent that people see every subsequent article in the light of a man having previously been smeared.

Chaos At Home, Fear Abroad: Trump Unleashed Puts Western World On Edge

The US stumbled into the holiday season with a sense of unravelling, as a large chunk of the federal government ground to a halt, the stock market crashed and the last independently minded, globally respected, major figure left in the administration announced he could no longer work with the president. The defense secretary, James Mattis, handed in his resignation on Thursday, over Donald Trump’s abrupt decision to pull US troops out of Syria.

On Saturday another senior official joined the White House exodus. Brett McGurk, the special envoy for the global coalition to defeat Isis and the US official closest to America’s Kurdish allies in the region, was reported to have handed in his resignation on Friday. That night, senators flew back to Washington from as far away as Hawaii for emergency talks aimed at finding a compromise on Trump’s demand for nearly $6bn for a wall on the southern border, a campaign promise which has become an obsession.

Now look at the next headline, December 23, Graeme Wearden, Guardian, and ask yourself if it’s really Trump saying he doesn’t agree with the rate hikes that fuels the fears, or whether it’s the hikes themselves. And also ask yourself: when Trump and Mnuchin both deny reports of Trump firing Powell, why do journalists keep saying the opposite? Because they want to fuel some fears?

From where I’m sitting, it looks perfectly logical that Trump says he doesn’t think Powell’s decisions are good for the US economy. And it doesn’t matter which one of the two turns out to be right: Trump isn’t the only person who disagrees with the Fed hikes.

The main suspect for 2019 market turmoil is the inevitable fallout from the Fed’s QE under Bernanke and Yellen. And there is something to be said for Powell trying to normalize rates, but there’s no doubt that may hasten, if not cause, turmoil. Blaming it on Trump not agreeing with Jay Powell is pretty much as left field as it gets.

White House Attacks On Fed Chair Fuel Fears Of Market Turmoil In 2019

Over the weekend, a flurry of reports claimed Donald Trump had discussed the possibility of firing the Federal Reserve chairman, Jerome Powell. Such an unprecedented move would trigger further instability in the markets, which have already had their worst year since the 2008 crisis. US officials scrambled to deny Trump had suggested ousting Powell, who was appointed by the president barely a year ago.

The Treasury secretary, Steven Mnuchin, tweeted that he had spoken to the president, who insisted he “never suggested firing” Powell, and did not believe he had the right to do this. However, Trump also declared – via Mnuchin – that he “totally disagrees” with the Fed’s “absolutely terrible” policy of raising interest rates and unwinding its bond-buying stimulus programme, piling further pressure on the US’s independent central bank.

And now, in the only article in the Guardian series that’s December 24, not 23, by Victoria Bekiempis and agencies, the plunging numbers in the stock markets are Trump’s fault, too.

Trump ‘Plunging Us Into Chaos’, Democrats Say, As Markets Tank And Shutdown Persists

Top Democrats have accused Donald Trump of “plunging the country into chaos” as top officials met to discuss a growing rout in stock markets caused in part by the president’s persistent attacks on the Federal Reserve and a government shutdown. “It’s Christmas Eve and President Trump is plunging the country into chaos,” the two top Democrats in Congress, House speaker nominee Nancy Pelosi and Senate minority leader Chuck Schumer, wrote in a joint statement on Monday. “The stock market is tanking and the president is waging a personal war on the Federal Reserve – after he just fired the Secretary of Defense.”

Trump criticized the Federal Reserve on Monday, describing it as the “only problem” for the US economy, even as top officials convened the “plunge protection team” forged after the 1987 crash to discuss the growing rout in stock markets. The crisis call on Monday between US financial regulators and the US treasury department failed to assure markets, and stocks fell again amid concern about slowing economic growth, the continuing government shutdown, and reports that Trump had discussed firing Federal Reserve chairman Jerome Powell.

The last one is from one Jonathan Jones, again December 23, again for the Guardian. And it takes the top award in the narrative building contest.

Again, the Guardian editorial team that okayed this article is still the same as the one that allowed the fake Assange/Manafort one, an editorial team that sees no problem in making things up in order to smear people. To portray Trump, Assange and anyone who’s had the misfortune of being born in Russia as suspicious if not outright criminal.

But look at what Jones has to say, and what Guardian editor-in-chief Kathy Viner and her ilk allowed and pressured him to say. He wants to have a say in how Trump should dress (seasonal knitwear), he evokes the image of Nazi architect Albert Speer for no reason at all, and then it’s a matter of mere inches until you arrive at Trump as a king, an emperor, an inner tyrant.

“He’s in a tuxedo!”, Like that’s a bad thing for Christmas. “She’s in white!”. Oh dear, call the pope. If both Trumps would have put on Christmas sweaters in front of a fire, the writer would have found something negative in that.

Trump Portrait: You Couldn’t Create A Creepier Yuletide Scene If You Tried

The absence of intimacy in the Trumps’ official Christmas portrait freezes the heart. Can it be that hard to create a cosy image of the presidential couple, perhaps in front of a roaring hearth, maybe in seasonal knitwear? Or is this quasi-dictatorial image exactly what the president wants to project? Look on my Christmas trees, ye mighty, and despair! If so, it fuels suspicions that it is only the checks and balances of a 230-year-old constitution that are keeping America from the darkest of political fates. You couldn’t create a creepier Yuletide scene if you tried. Multiple Christmas trees are currently a status symbol for the wealthy, but this picture shows the risks.

Instead of a homely symbol of midwinter cheer, these disciplined arboreal ranks with their uniform decorations are arrayed like massed soldiers or colossal columns designed by Albert Speer. The setting is the Cross Hall in the White House and, while the incumbent president cannot be held responsible for its architecture, why heighten its severity with such rigid, heartless seasonal trappings? Everything here communicates cold, empty magnificence. Tree lights that are as frigid as icicles are mirrored in a cold polished floor. Equally frosty illuminations are projected on the ceiling. Instead of twinkling fairy magic, this lifeless lighting creates a sterile, inhuman atmosphere.

You can’t imagine kids playing among these trees or any conceivable fun being had by anyone. It suggests the micromanaged, corporate Christmas of a Citizen Kane who has long since lost touch with the ordinary, warm pleasures of real life. In the centre of this disturbing piece of conceptual art stand Donald and Melania Trump. He’s in a tuxedo, she’s wearing white – and not a woolly hat in sight. Their formal smartness adds to the emotional numbness of the scene. Trump’s shark-like grin has nothing generous or friendly about it. He seems to want to show off his beautiful wife and his fantastic home rather than any of the cuddly holiday spirit a conventional politician might strive to share at this time.

It begs a question: how can a man who so glaringly lacks anything like a common touch be such a successful “populist”? What can a midwestern voter find in this image to connect with? Perhaps that’s the point. After more than two centuries of democracy, Trump is offering the US people a king, or emperor. In this picture, he gives full vent to his inner tyrant. If this portrait contains any truth about the state of America and the world, may Santa help us all.

I realize that you may be tired of the whole story. I realize you may have been caught in the anti-Trump narrative. And I am by no means a Trump fan. But I will keep on dragging you back to this. Because the discussion should not be based on a handful of media moguls not liking Trump. It should not be based on innuendo and smear. If Trump is to be convicted, it must be on evidence.

And there is no such evidence. Robert Mueller has charged 34 people, but none with what his mandate was based on, none with Russia collusion. This means that the American political system, and democracy itself, is under severe threat by the very media that are supposed to be its gate keepers.

None of this is about Trump, or about whether you like him or not, or even if he’s a shady character or not. Instead, it’s about the influence the media have on how our opinions and ideas about people and events are being shaped on a daily basis.

And once you acknowledge that your opinions of Trump, Putin et al, even without any proof of a connection between them, are actively being molded by the press you expect to inform you about the truth behind what goes on, you will have to acknowledge, too, that you are a captive of forces that use your gullibility to make a profit off you.

If our media need to make up things all the time about who’s guilty of what, because our justice systems are incapable of that, then we have a problem so enormous we may not be able to overcome it in our present settings.

Alternatively, if we trust our justice systems to deliver true justice, we don’t need a hundred articles a day to tell us how Trump or Putin are such terrible threats to our world. Our judges will tell us, not our journalists or media who are only in it for a profit.

I can say: “let’s start off 2019 trying to leave prejudice behind”, and as much as that is needed and you may agree with me, it’s no use if you don’t realize to what extent your views of the world have been shaped by prejudice.

I see people reacting to the star writer at Der Spiegel who wrote a lot about Trump, being exposed as a fraud. I also see people trying to defend Julian Assange from the Guardian article about his alleged meetings with Paul Manafort, that was an obvious big fat lie (the truth is Manafort talked to Ecuador to help them ‘sell’ Assange to the US).

But reacting to the very obvious stuff is not enough. The echo chamber distorts the truth about Trump every single day, and at least six times on Sunday, as this essay of mine shows. It’s just that after two years of this going on 24/7, it is perceived as the normal.

Everyone makes money dumping on the Donald, it’s a proven success formula, so why would the Guardian and Der Spiegel stay behind? They’d only hurt their own bottom line.

It has nothing to do with journalism, though, or news. It’s smear and dirt, the business model of the National Enquirer. That’s how far our once truthful media have fallen.

 

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