Crunching The Numbers On Mortality

One of the key traits that make human beings unique on planet Earth is that we’re aware of our own mortality.

But, as Visual Capitalist’s Nick Routley notes, scientific advances have given us insight into which behaviors may prolong life, and which activities carry the greatest risk of death. Naturally, there have been some unique attempts to create a unified structure around risk and benefit, and to quantify every aspect of the human lifespan.

As today’s graphic from TitleMax demonstrates, even when we’re thinking about death, the human desire to codify the world around us is alive and well.

Courtesy of: Visual Captitalist

MORTALITY UNITS

Certain events – such as a parachute failing to open or being hit by a meteor – have an easily quantifiable effect on life, but how do we measure the riskiness of day-to-day habits and situations? This is where a unique unit of measurement, micromorts, comes into play.

This concept, invented by renowned decision analyst Ronald A. Howard, helps compare any number of potentially lethal risks. One micromort equals a one in a million chance of sudden death. Here’s the riskiness of various activities measured in micromorts:

LIFE UNITS

The average person, by the time they reach adulthood, will live approximately one million half-hours. Those 30 minute units are known as microlives.

The microlife concept was invented by professor David Spiegelhalter as a way to measure the consequences of various behaviors. For example, 20 minutes of physical activity earns us two microlives, while watching TV for two hours subtracts one microlife.

This measurement extends beyond nutrition and eating habits. Simply living in a modern era earns us an additional 15 microlives per day compared to those who lived a century earlier.

CASTING THE DIE ON HOW WE’LL DIE

How will the estimated 353,000 humans that will be born today eventually meet their end? This was the thought experiment conducted by Reddit user, Presneeze.

While our focus is often drawn to people who meet their end in spectacular and tragic ways, the vast majority of humanity will succumb to conditions such as heart disease and cancer.

Geography can play a big role in shifting these odds:

  • In the United States, which is grappling with an opioid addiction crisis, there is a 1-in-96 chance of dying from a drug overdose.

  • Diarrheal diseases may not be on the radar of most people living in first world countries, but in developing regions, they remain a leading cause of preventable death – particularly for children.

  • In Russia, the odds are 1-in-4 that a man will not live beyond 55 years. The main culprit? Vodka.

“On a long enough time line, the survival rate for everyone drops to zero.”

–’Tyler Durden’ via Chuck Palahniuk

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Which Companies Have The Highest Gross Profit Per Employee?

Submitted by Priceonomics

The Standard & Poor’s 500 Index, “S&P 500” includes the 500 largest American companies by market value listed on the NYSE or NASDAQ stock exchanges. In 2017, the S&P 500 index number increased by 22% from 2016-2017. S&P 500 companies generated $11 trillion in combined revenue and employed more than 25 million people worldwide.

As a follow up to the report we published previously (What Industry Has The Highest Revenue Per Employee?), we ranked the companies by Gross Profit Per Employee (GPPE), exploring how efficiently they leverage human capital after direct product costs (Cost of Goods Sold) have been deducted. We also look at the Gross Profit per employee for tech companies like Facebook, Google, and Apple.

Note: Real estate investment trusts (REITs) were excluded from the rankings, resulting in 439 companies in total remaining.

Energy is the sector with the highest GPPE (it was also the sector with the highest Revenue Per Employee). Financial and Healthcare companies remained high on the list, while Industrials, Materials, and Consumer Discretionary continue to perform the worst.

The table below shows the top 50 companies in the S&P 500 ranked by GPPE in 2017: 

The Top 50 includes ten Energy and eleven Healthcare companies. Insurance provider Brighthouse Financial topped the GPPE ranking. Pharmaceuticals, Gilead Sciences and Celgene, and Altria Group, a Tobacco company, were the runner-ups.

In Revenue Per Employee, pharmaceutical supplier AmerisourceBergen was ranked second, but for GPPE, the company drops into 192nd place, having a gross margin of only 3%, and GPPE of $227,300.

Compared to Revenue Per Employee, GPPE brings Technology companies, including Facebook and Apple, significantly higher the rankings. Due to their low cost of revenue, Verisign, Alphabet, Mastercard, Broadcom, and Intuit all appear in the Top 50.

By grouping the companies into different sectors, we computed the average GPPE for each sector.

Energy remains the sector with the highest Gross Profit Per Employee, as well as Revenue Per Employee. Financials moved higher in the ranking due to a high average sector Gross Margin of 67%.

We also looked at the ten lowest performing companies in the S&P 500, based on Gross Profit Per Employee:

Looking at the bottom of the GPPE rankings: Consumer Discretionary companies Chipotle, Ross, and Darden Restaurants all generated less than $25K gross profit per employee. Consulting firms, Accenture and Cognizant, remained on the list due to large employee growth for the past few years and low gross margin.

Now we focus solely on the TMT sector, looking at the top 20 tech companies by Gross Profit Per Employee:

Facebook tops the list with a high gross margin of 87%. Payment network companies, Visa and Mastercard, also appear in the Top 5. Interestingly, all companies on this ranking have a Gross Margin of 50% or more.

Key takeaways:

  • The Energy sector has the highest Gross Profit Per Employee, as well as Revenue Per Employee.
  • More Tech companies appeared in the Top 50 on GPPE vs. Revenue Per Employee due to high gross margins in the tech sector.

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Google Tracking 70% Of Retail Purchases Thanks To Secret Deal With Mastercard

Over the past year, certain Google advertisers have been able to use a “potent new tool” which allows them to track whether ads they run online translated to sales at physical stores throughout the United States, thanks to a secret deal between the Silicon Valley tech giant and Mastercard, reports Bloomberg

Illustration: Tam Nguyen, AdAge

Most of Mastercard’s two billion customers weren’t aware of this arrangement, since neither Google parent Alphabet Inc. nor the credit card company told the public about the deal which was brokered after four years of negotiations. The alliance, says Bloomberg, “gave Google an unprecedented asset for measuring retail spending,” as part of the search giant’s “strategy to fortify its primary business against onslaughts from Amazon.com Inc. and others.” 

Through this test program, Google can anonymously match these existing user profiles to purchases made in physical stores. The result is powerful: Google knows that people clicked on ads and can now tell advertisers that this activity led to actual store sales.

It works like this: a person searches for “red lipstick” on Google, clicks on an ad, surfs the web but doesn’t buy anything. Later, she walks into a store and buys red lipstick with her Mastercard. The advertiser who ran the ad is fed a report from Google, listing the sale along with other transactions in a column that reads “Offline Revenue” — only if the web surfer is logged into a Google account online and made the purchase within 30 days of clicking the ad. The advertisers are given a bulk report with the percentage of shoppers who clicked or viewed an ad then made a relevant purchase. –Bloomberg

Last year Google boasted that that the service, called “Store Sales Management,” had access to “approximately 70 percent” of US credit and debit cards. 

Last year, when Google announced the service, called “Store Sales Measurement,” the company just said it had access to “approximately 70 percent” of U.S. credit and debit cards through partners, without naming them. –Bloomberg

Since Google doesn’t define what this means, Bloomberg speculates that it could mean “70 percent of the people who use credit and debit cards. Or it could mean that the company has deals with companies that include all card users, and 70 percent of those are logged into Google accounts like Gmail when they click on a Google search ad.” 

The deal is likely to raise broader privacy concerns about the volume of consumer data is in the hands of data technology companies such as Google. Of note, “Since 2014, Google has flagged for advertisers when someone who clicked an ad visits a physical store, using the Location History feature in Google Maps.”

“People don’t expect what they buy physically in a store to be linked to what they are buying online,” said Electronic Privacy Information Center (EPIC) counsel Christine Bannan. “There’s just far too much burden that companies place on consumers and not enough responsibility being taken by companies to inform users what they’re doing and what rights they have.”

Google reportedly paid Mastercard millions of dollars for the data, according to two people who worked on the deal. The companies also discussed sharing a portion of Google’s ad revenue, according to one source. A Google spokeswoman denied any revenue sharing agreement with its partners – while addressing privacy concerns: 

“Before we launched this beta product last year, we built a new, double-blind encryption technology that prevents both Google and our partners from viewing our respective users’ personally identifiable information,” the company said in a statement. “We do not have access to any personal information from our partners’ credit and debit cards, nor do we share any personal information with our partners.”

The company says that google users can opt out of ad tracking using their “Web and App Activity” online console (though no word if the service will continue to secretly track your purchases like Google’s location history, which tracks users regardless of whether they’ve turned the feature off.) 

Mastercard spokesman Seth Eisen said that the company shares transaction trends with merchants and service providers to assist them in measuring “the effectiveness of their advertising campaigns.” 

The information, which includes sales volumes and average size of the purchase, is shared only with permission of the merchants, Eisen added. “No individual transaction or personal data is provided,” he said in a statement. “We do not provide insights that track, serve up ads to, or even measure ad effectiveness relating to, individual consumers.”  –Bloomberg

According to people familiar with the program, Google has approached other payment companies fopr similar deals – however it is unknown whether they actually signed any. Google, meanwhile, confirmed that the service only applies to people who are logged in to one of its accounts and haven’t opted out of ad tracking. 

Google is testing the data service with a “small group” of advertisers in the U.S., according to a spokeswoman. With it, marketers see aggregate sales figures and estimates of how many they can attribute to Google ads — but they don’t see a shoppers’ personal information, how much they spend or what exactly they buy. The tests are only available for retailers, not the companies that make the items sold inside stores, the spokeswoman said. The service only applies to its search and shopping ads, she said. –Bloomberg

According to Bloomberg, Google’s first attempt to link consumer browsing habits with spending came in the form of it’s mobile payment service; Google Wallet – however adoption never took off.

As we mentioned earlier, Google has been pinging advertisers through their Location Services feature when a user visited a store, however the advertiser wasn’t able to know whether the shopper made a purchase. 

So Google added more. A tool, introduced the following year, let advertisers upload email addresses of customers they’ve collected into Google’s ad-buying system, which then encrypted them. Additionally, Google layered on inputs from third-party data brokers, such as Experian Plc and Acxiom Corp., which draw in demographic and financial information for marketers. –Bloomberg

In May, 2017, Google introduced “Store Sales Management” which let companies with personal info on consumers such as encrypted email address, upload information into Google’s system and synchronize advertising expenditures with offline sales. The second component injects card data. 

Early indications suggest the Mastercard deal has been a boon for Google. “Malcolm said her agency has tested the card measurement tool with a major advertiser, which she declined to name. Beforehand, the company received $5.70 in revenue for every dollar spent on marketing in the ad campaign with Google, according to an iProspect analysis. With the new transaction feature, the return nearly doubled to $10.60,” according to Bloomberg

“That’s really powerful,” Malcolm said. “And it was a really good way to invest more in Google, frankly.

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Russian Oligarch And Putin Pal Admits To Collusion, Secret Meetings

Russian Oligarch Oleg Deripaska, a close associate of Vladimir Putin, has gone on record with The Hill‘s John Solomon – admitting to colluding with Americans leading up to the 2016 US election, except it might not be what you’re thinking. 

Deripaska, rumored to be Donald Trump’s “back channel” to Putin via the Russian’s former association with Paul Manafort, says he “colluded” with the US Government between 2009 and 2016. 

In 2009, when Robert Mueller was running the FBI, the agency asked Deripaska to spend $25 million of his own money to bankroll an FBI-supervised operation to rescue a retired FBI agent – Robert Levinson, who was kidnapped in 2007 while working on a 2007 CIA contract in Iran. This in and of itself is more than a bit strange. 

Deripaska agreed, however the Obama State Department, headed by Hillary Clinton, scuttled a last-minute deal with Iran before Levinson could be released. 

FBI agents courted Deripaska in 2009 in a series of secret hotel meetings in Paris; Vienna; Budapest, Hungary, and Washington. Agents persuaded the aluminum industry magnate to underwrite the mission. The Russian billionaire insisted the operation neither involve nor harm his homeland. -The Hill

In other words – Trump’s alleged “back channel” to Putin was in fact an FBI asset who spent $25 million helping Obama’s “scandal free” administration find a kidnapped agent. Deripaska’s admitted 

Steele, Ohr and the 2016 US Election

As the New York Times frames it, distancing Deripaska from the FBI (no mention of the $25 million rescue effort, for example), the Russian aluminum magnate was just one of several Putin-linked Oligarchs the FBI tried to flip.

The attempt to flip Mr. Deripaska was part of a broader, clandestine American effort to gauge the possibility of gaining cooperation from roughly a half-dozen of Russia’s richest men, nearly all of whom, like Mr. Deripaska, depend on President Vladimir V. Putin to maintain their wealth, the officials said. –NYT

Central to the recruiting effort were two central players in the Trump-Russia investigation; twice-demoted DOJ #4 official Bruce Ohr and Christopher Steele – the author of the largely unverified “Steele Dossier.” 

Steele, a longtime associate of Ohr’s, worked for Deripaska beginning in 2012 researching a business rival – work which would evolve to the point where the former British spy was interfacing with the Obama administration on his behalf – resulting in Deripaska regaining entry into the United States, where he visited numerous times between 2009 and 2017.  

The State Department tried to keep him from getting a U.S. visa between 2006 and 2009 because they believed he had unspecified connections to criminal elements in Russia as he consolidated power in the aluminum industry. Deripaska has denied those allegations…

Whatever the case, it is irrefutable that after he began helping the FBI, Deripaska regained entry to the United States. And he visited numerous times between 2009 and 2017, visa entry records show. –The Hill

Deripaska is now banned from the United States as one of several Russians sanctioned in April in response to alleged 2016 election meddling. 

In a September 2016 meeting, Deripaska told FBI agents that it was “preposterous” that Paul Manafort was colluding with Russia to help Trump win the 2016 election. This, despite the fact that Deripaska and Manafort’s business relationship “ended in lawsuits, per The Hill – and the Russian would have every reason to throw Manafort under the bus if he wanted some revenge on his old associate. 

So the FBI and DOJ secretly collaborated with Trump’s alleged backchannel over a seven-year period, starting with Levinson, then on Deripaska’s Visa, and finally regarding whether Paul Manafort was an intermediary to Putin. Deripaska vehemently denies the assertion, and even took out newspaper advertisements in the US last year volunteering to testify to Congress, refuting an AP report that he and Manafort secretly worked on a plan to “greatly benefit the Putin government” a decade ago. 

Soon after the advertisements ran, representatives for the House and Senate Intelligence Committees called a Washington-based lawyer for Mr. Deripaska, Adam Waldman, inquiring about taking his client up on the offer to testify, Mr. Waldman said in an interview.

What happened after that has been in dispute. Mr. Waldman, who stopped working for Mr. Deripaska after the sanctions were levied, said he told the committee staff that his client would be willing to testify without any grant of immunity, but would not testify about any Russian collusion with the Trump campaign because “he doesn’t know anything about that theory and actually doesn’t believe it occurred.” –NYT

In short, Deripaska wants it known that he worked with the FBI and DOJ, and that he had nothing to do with the Steele dossier.

Today, Deripaska is banned anew from the United States, one of several Russians sanctioned in April by the Trump administration as a way to punish Putin for 2016 election meddling. But he wants to be clear about a few things, according to a statement provided by his team. First, he did collude with Americans in the form of voluntarily assisting and meeting with the FBI, the DOJ and people such as Ohr between 2009 and 2016.

He also wants Americans to know he did not cooperate or assist with Steele’s dossier, and he tried to dispel the FBI notion that Russia and the Trump campaign colluded during the 2016 election. –The Hill

Interestingly, Steele’s dossier which was partially funded by the Clinton campaign, relied on senior Kremlin officials

 

It would be most helpful if the Department of Justice could please investigate and then prosecute themselves and/or members of the previous administration, so that journalists like John Solomon, Sara Carter, Luke Rosiak, Chuck Ross and others don’t have to continue to break stories that are seemingly ignored by all but a handful of Congressional investigators.

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Pentagon’s Answer To Yemen Atrocities? Train More Saudi Pilots… On US Soil

New federal procurement documents unearthed and reported by TYT show that the US Air Force is planning to train Saudi pilots on US soil, which would mark the first time since the US-Saudi coalition’s bombing campaign began three years ago.

The government documents show the Air Force is seeking private contractors to train Royal Saudi Air Force (RSAF) personnel to be “conducted in the U.S. at contractor’s facility.” The solicitation deadline is listed for Sept. 24, which suggests the program will move forward at rapid pace, but doesn’t indicate when the training will begin.

According to TYT Investigates, it appears the Pentagon is trying to belatedly show it’s “taking action” in response to increased international publicity and humanitarian outcry in response to recent atrocities of its Saudi partners:

The Pentagon’s solicitation for training Saudi pilots, however, was posted on August 23, two weeks after the school bus bombing, the procurement records show. What’s more, the training will be for warplanes including the F-15 fighter jet, which the Saudis are using in Yemen.

The records even mention weapons-specific training, listing things like, “F-15S Weapons School Instructor Pilot” and “Air Battle Manager/Weapons School Weapons Director Instructor.”

Human rights groups have already weighed in on this latest revelation, as TYT reports further:

Informed about the training, Sarah Leah Whitson, executive director for Human Rights Watch’s Middle East and North Africa Division, told TYT, “At a time when even the Pentagon has threatened to cut military and intelligence [support] for Saudi’s disastrous campaign in Yemen, it’s disturbing that the Air Force is ratcheting up its relationship by training more Saudi pilots, however veiled by the use of contractors.”

Use of private contractors to do the Pentagon’s dirty work has long been a tactic designed to introduce a layer of “plausible deniability” for future war crimes.

Here is a key part of the one of the federal procurement documents:

Many Americans have for perhaps heard of the Saudi war in Yemen for the first time in recent weeks due to headline driving-atrocities carried out by Saudi pilots, such as last month’s attack on a school bus full of Yemeni children, which killed 40 children and wounded scores of others

But more than a cursory glance of the headlines might also reveal for those just learning of the war which has raged since 2015: it’s from the very start involved US intelligence and military personnel playing a central role in locating targets, facilitating logistics, and refueling Saudi coalition jets.

American leadership in the campaign is so key that it could more properly be called the US-Saudi war in Yemen. 

When the US-Saudi coalition has taken out buses full of children, or entire wedding parties, or bombed hospitals, the Pentagon’s “defense” of these actions is that it’s helping the Saudis in order to stave off humanitarian disaster; that is, the Pentagon claims it’s assisting the Saudis to try and avoid slaughtering innocents. 

But ironically as the US gears up to actually train Saudi pilots on American soil, defense officials are in reality positioning themselves to take greater ownership of atrocities, even if their thinking is that this new program creates distance

Bruce Riedel, a 30-year CIA officer and senior fellow at the Brookings Institute, once told a conference audience“If the United States and the United Kingdom, tonight, told King Salman [of Saudi Arabia] ‘this war has to end,’ it would end tomorrow. The Royal Saudi Air Force cannot operate without American and British support.”

But it appears the US is now integrating itself even more fully in the war while seeking to convince the public that it’s acting as a mediator of sorts to clamp down on civilian atrocities. 

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The Degrading Facts Of A Fake Money Hole In The Head

Authored by EconomicPrism’s MN Gordon, annotated by Acting-Man’s Pater Tenebrarum,

Squishy Fact Finding Mission

Today we begin with the facts.  But not just the facts; the facts of the facts.  We want to better understand just what it is that is provoking today’s ludicrous world. To clarify, we are not after the cold hard facts; those with no opinions, like the commutative property of addition. Rather, we are after the warm squishy facts; the type of facts that depend on what the meaning of ‘is’ is.

Fact-related pleas… [PT]

The facts, as far as we can tell, are that we are presently living in a land of extreme confusion.  The genesis of this extreme confusion is today’s fake money system.  And the destructive effects of this fake money system have spread out like a virus into nearly all aspects of daily life.

Plain and simple, central bank fiat money creation, multiplied by commercial banks through fractional-reserve banking, propagates financial and economic chaos.  The experience of long periods of money supply expansion punctuated by abrupt, episodic contractions, has the effect of whipsawing the working stiff’s efforts to get ahead. This trifecta of offenses has debased the rewards of hard work, saving money, and paying one’s way.

Quite frankly, these facts are insulting. In particular, they are insulting for those running in the rat race for their family’s daily bread. These facts are also insulting for retirees, who worked for four decades only to have their life savings extracted by the depredations of the fake money system.

Early rat race conditioning [PT]

Short-Sighted Decisions

The facts are that on August 15, 1971, Tricky Dick Nixon stiffed the world unconditionally.  He defaulted on the Bretton Woods system, and terminated the agreement that allowed member nations to redeem their paper dollars, acquired through trade, for gold.  But that’s not the half of it…

The facts are that the seeds of Nixon’s default were sown years before with LBJ’s program of guns and butter.  Nixon merely brought the default to harvest.  Moreover, since Nixon’s default there has been near unrestricted growth of debt based money.

The facts are that over the last half-century the world has constructed a magnificent edifice of debt.  In fact, according to the Institute for International Finance, global debt in the first quarter of 2018 reached $247 trillion.  Moreover, the global debt-to-GDP ratio has exceeded 318 percent. These are facts.

Global debt is going bonkers. The vast growth in corporate debt since 2008 looks suspiciously like a replay of the Japanese credit expansion of the 1980s. Even the rationalization forwarded for buying into one of the most overvalued stock markets of all time by invoking the unstoppable power of financial engineering in the form of stock buybacks sounds oddly similar to the zaibatsu/keiretsu rationalization for buying Japanese stocks in the late 1980s. There was no happy end for those who believed it. [PT]

What’s more, the facts are that debt – public, corporate, and consumer – has exploded higher over the last decade during an era of extreme monetary intervention.  This extreme monetary intervention artificially suppressed interest rates and compelled many short-sighted decisions.

One popular short-sighted decision manifests in the corporate financial engineering craze. This is the crude maneuver where corporations borrow money at low interest rates only to pump it into shares of their stock.  This effectively inflates share prices and the stock option compensations of corporate executives.

But what happens next year when the payment on the debt increases and share prices are cut in half?  Who loses their job?  The scheming executives?  Or the rank and file technician who is downsized into redundancy?

Another collection of short-sighted decisions that has piled up like a wreck on the 405 Freeway through west Los Angeles, is the $1.5 trillion student loan debt crisis. At $1.5 trillion, student loan debt, much of which is backed by the government, is the second highest consumer debt category – behind only mortgage debt and higher than both credit cards and auto loans.

Now what would happen to all these overpaid university professors and fancy country club style college campuses without all this government sponsored debt?

Growing like weeds: outstanding student debt has crossed the USD 1.5 trillion mark in Q1 2018, which makes it the second largest consumer debt category after mortgages. The collateral for mortgages seems slightly safer. [PT]

The Degrading Facts of a Fake Money Hole in the Head

The facts are that the Federal Reserve is currently shrinking its balance sheet and raising the federal funds rate in tandem.  All the while, the stock market washes upward as if the liquidity tide were coming in rather than going out. This present convergence of facts, without question, offers a sensation of concentrated suspense.

“After all,” as Warren Buffet noted in his 2001 letter to shareholders of Berkshire Hathaway, “you only find out who is swimming naked when the tide goes out.”

The point is, we are currently facing an abundance of disagreeable facts. Yet, there are no quick fix, wave the magic wand, solutions.  These aren’t the sorts of facts that President Trump can correct with a 280 character early morning tweet.  But we are not without hope.  Remember, the facts are occasionally subject to change.

Disagreeable factoid: the shrinkage in Fed assets indicates that the liquidity tide is going out. [PT]

For example, doctors in the Middle Ages all knew that trepanning was the best way to cure epilepsy or migraines.  Trepanning, if you’re unfamiliar with this barbaric surgical procedure, consists of drilling a hole into the human skull.  Somehow, a hole in the head was supposed to cure a bad headache.

By the early 16th century the facts had changed.  A hole in the head lost favor as a generally accepted medical procedure for curing a migraine, among other ailments.

Medieval trepanation instructions from Germany – holes in the head were once held to be highly beneficial. We are happy to report that opinions on this topic have evolved since then. [PT]

These days we like to flatter ourselves with our modernity.  What could be more civilized than having up to the second stock quotes, the weather from major cities across the globe, and pop culture trivia questions, all simultaneously streamed at you from flat screen monitors while rapidly blasting up to the 50th floor of a glass faced skyscraper?  This, you see, is real progress.

Yet we drink coffee out of paper cups.  We treat cancer with radiation and chemotherapy.  And we accept the depredations of a fake money system like an epileptic circa 1400 accepted a hole in the head.

These are the facts. Perhaps several centuries from now they will be aptly corrected.

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World Stocks Have Underperformed The US By The Most Since The Financial Crisis

Last week we noted that something odd was going on in global markets: in recent months, a near record divergence has opened up in the performance of risk assets, which previously was only observed during recessions.

As the S&P 500 marched towards its record bull market and a new all-time high, EM equities, copper and European banks were experiencing bear markets, while EM FX carry has unwound almost all of its post-2016 gains.

This brings to mind a topic that Morgan Stanley’s chief equity strategist, Michael Wilson had been discussing for much of the past year, namely the idea of “rolling bear markets” in which one specific asset class is slammed even as the rest of the market remains surprisingly stable.  For context he used the vol shock in early February and the sharp sell-off in Italian BTPs in May which “stand out as perhaps the best examples of what investors have had to deal with this year. Amazingly, neither of these events led to a broader, more systemic de-risking of portfolios. Instead, prices reset quickly in the affected assets and investors simply moved to higher ground”, he said in a July note.

Further to this idea of a “rolling bear market”, Wilson described it as feeling “awful at times in specific places, but not everywhere at once.”

Perhaps it’s easiest to see when comparing regions, sectors or specific stocks. In other words, the damage below the surface is much worse than if you simply look at the broad indices. However, the higher ground is getting scarcer, with few completely dry areas.

Wilson then proceeded to lay out a dire outlook, which culminated with a downgrade of tech and small-cap stocks, noting that “global risk markets have absorbed a lot of bad news this year, not to mention meaningfully tighter financial conditions. We think that our rolling bear market narrative has captured this unusual dynamic quite well.”

Since these observations two months ago, the financial tightening around the globe as a result of the ascendant dollar coupled with global tariff concerns, has only made the “rolling bear markets” worse and according to Bank of America’s latest note. In particular, in Emerging Markets, BofA notes that its “Risk-Love” indicator has entered panic mode, while some of the defensive sectors in equity markets have hit record overbought readings.

Furthermore, the sell-off in EM has also pushed valuations back to levels last seen during the Chinese devaluation panic of February 2016, with EM equities now trading at a sub-11x P/E…

and as a result, non-US equity markets have underperformed the US the most over a 3-month period since the GFC.

What is even more bizarre, is that according to the bank, “the underperformance of non-US equities to US equities is reaching levels normally only exceeded in bear markets.

Yet what is making investors that Bank of America has spoken to especially confused is that at the same time as the US stock market continues undaunted to new record highs, spurred by the ongoing US economic growth and stellar corporate earnings, the abovementioned bear markets are almost always associated with recessions, so “the key decision investors have to make is whether a recession is looming or whether the cycle has a good deal further to run”, or in other words – how close are we to the end of the cycle?

“Is it right to continue to anticipate strong global growth and therefore buy risk assets into this pullback? Or are we sufficiently close to the end of the cycle that they should be switching into more defensive assets and selling into any rally?”

The bank shows two charts that sum up the situation. In its latest Fund Manager Survey, the bank asked investors where they think we are in the cycle. Since January there has been a marked rise in the proportion saying we are late cycle to around 80% now. Yet compare this with the right-hand chart of the Global output gap from the OECD, which was updated to the end of this year using the bank economists’ forecasts, which shows the output gap will have only just closed by year-end.

And while the cycle may indeed be late, there is another key consideration investors need to keep in mind: missing out on the final meltup of this cycle:

Equity markets and risk assets in general tend to peak only six months or so before an economic downturn, which would suggest this pullback in risk assets is one that investors should buy into. If you want to compare with the last cycle, perhaps May 2006 is a good comparison: a sharp pullback in markets (around 12% for MSCI ACWI) was followed by a rally that eventually peaked some 34% later in October 2007. You could have sat that last rally out, but it would have been pretty painful to do so. It wasn’t until the Lehman crisis of October 2008 that the MSCI ACWI properly took out the May 2006 low.

Meanwhile, another major risk for US investors – as demonstrated rather clearly by non-US assets – is that markets are underestimating the Fed’s resolve to keep hiking, something which became less of an issue during Powell’s somewhat dovish Jackson Hole speech.

Still, as Michael Hartnett, BofA’s Chief Investment Strategist, rightly points out when the Fed is tightening there are often market accidents and the sell-off in EM this time around has been pretty bloody, with Argentina and now Turkey the key victims.

Nevertheless, it is also often the case that risk assets recover from those accidents until the Fed finally punctures the cycle, at which point it is game over and all investors have to head for defensive assets.

The key question for investors then boils down to this: will the Fed keep hiking beyond the 2 and change rate hikes priced in by the market until the divergence between the US and the rest of the world finally snaps, or “will Powell throw in the towel”, as previously requested by the head of the Indian Central Bank, and put a stop to the Fed’s tightening cycle.

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Carol Swain On Race Relations In America: “The Divisiveness Of Our Politics Cannot End Well”

Authored by Erico Matias Tavares via Sinclar & Co.,

Dr. Carol Swain is an award-winning political scientist, a former professor of political science and professor of law at Vanderbilt University, and a lifetime member of the James Madison Society, an international community of scholars affiliated with the James Madison Program in American Ideals and Institutions at Princeton University. Before joining Vanderbilt in 1999, Dr. Swain was a tenured associate professor of politics and public policy at Princeton University’s Woodrow Wilson School of Public and International Affairs. Dr. Swain is the author and editor of several books, including “Debating Immigration” and “Abduction: How Liberalism Steals our Children’s Hearts and Minds.”

E Tavares: Dr. Swain, we are honored to be speaking with you today. We would like to get your views on the current state of race relations in America. This has always been a difficult, sensitive topic, but we get the sense that they are at a low point in generations, despite all the technical progress and a relatively benign economy currently. What do you make of this?

C Swain: Many issues complicate race relations in America. Some of these issues I identified in 2002 in the publication of my book “The New White Nationalism In America: Its Challenge to Integration.” In that book, I warned about a set of conditions converging that would create a devil’s brew for race relations. These issues included white concerns about racial preferences in hiring and university admissions; minority crime, especially black-on-white violent crime; demographic changes that are transforming the nation into one without a racial majority; frustration at liberal immigration policies; and the ability to use the Internet and social media to organize.

What I believe we are seeing is the rise of white consciousness and a perception of a white interests that must be protected in the same manner racial and ethnic minorities seek protection. I believe the campaign to destroy Confederate symbols and monuments polarizes the nation and politicizes people who were previously indifferent.

Improved race relations will require a different approach than what we see today.

ET: You faced dispiriting challenges during your upbringing, many of which still afflict other African-Americans, such as dealing with extreme poverty, growing up in a segregated community (in the Deep South) and other social issues. And yet you made it, becoming a teacher in prestigious universities, an award-winning author, a regular guest in national radio and TV shows and even running for mayor recently. To what do you attribute your success? Did the government play a major role in it?

CW: I have always believed in the promise of the American Dream. Specifically, if I worked hard, I could achieve a middle-class status.

Starting at a community college, I was able to earn five college and university degrees and become a tenured professor at elite institutions. I have always had mentors. Most of them were whites who took a special interest in me because I was a hard worker who was dependable as a student and as an employee.

Government played a role in that I received work-study at the community college and the Basic Grant later known as the Pell Grant. I also received scholarships for graduate school and much encouragement from people who wanted to see me succeed.

ET: We were curious to get your personal take on the role of government for the following reason. Dr. Tom Sowell, one of the brightest economists around, has studied in detail the conditions of the African-American community over a century. He found that from the abolition of slavery in the South up to 1960 they were steadily closing the gap with, and in some cases surpassing, whites on a variety of social metrics, including income, employment, education, religious values and so forth.

Then came the 1960s and a perfect storm hit the African-American community: welfare dependency brought about by Lyndon Johnson’s Great Society, the sexual revolution and the drugs epidemic. The consequences were profound, even tragic. Income, employment, education standards and social mobility have plummeted since then. Children born out of wedlock – a reliable predictor of future criminality and social underperformance – exploded as the State replaced the role of the father at home. Successive generations became dependent on welfare. Drug and alcohol abuse became prevalent in many communities.

Actually, we saw the same thing happening on the little predominantly white European island where we were born, although with a lower intensity. So we can personally state that these are outcomes NOT determined by race. However, instead of looking at these facts, prominent black leaders constantly blame the plight of their community on “institutional white racism.” Why is that?

CW: Many African-American leaders are unaware of their history of success before aggressive governmental intervention. Acknowledging any unintended negative consequences from governmental decisions adopted to help blacks and other disadvantaged groups would be seen by some as a loss of moral authority. 

If blacks accepted individual responsibility for some of the continued problems decimating their communities, it might mean they would have to adopt a different, more hands-on interventionist strategy that would require a greater commitment for change. Right now it is far easier to continue the mantra of blaming white people and slavery for the plight of blacks. 

As long as blacks look in the rearview mirror, the problems will continue. What we need is a new approach and some forgiveness on all sides.  

ET: You have been a vocal critic of these policies for many years. And because of that, at one point you were placed on the “hit list” of the Southern Poverty Law Center, who claim to be on your side in these issues. Can you briefly describe what happened here?

CW: The SPLC went after me in retaliation for a 2009 article I published in The Huffington Post accusing them of having lost sight of their original mission. A couple of months later, Mark Potok, the communications director at the time, was quoted in my local newspaper calling me an “apologist for white supremacy” because of a favorable review I gave a film titled “A Conversation about Race,” that I enthusiastically recommended for classroom use.  Fortunately, James Taranto of the Wall Street Journal wrote an article refuting the SPLC claims.

ET: You also wrote a book on immigration. There was a time when liberals claimed to be on the side of the American worker, and especially African-Americans, at least nominally. Bill Clinton, Hillary Clinton, Chuck Schumer, Bernie Sanders and even Barack Obama used to speak about limiting immigration for these reasons. Today they are firmly for it, along with major Republican donors, like the Koch brothers, who like the cheap labor. Several studies show that the African-American community suffered disproportionately from the increased competition from immigrants in terms of employment, education and wages. Inner cities have been transformed as a result. And yet blacks overwhelmingly continue to vote for more of these policies. Why?

CW: Initially, black leaders switched their positions as the percentage of Hispanics increased in their districts. However, it is now the Democratic Party’s liberal stance on these issues that push black leaders toward policy stances that work against the interests of low-wage, low-skilled Americans regardless of race and ethnicity.

ET: As these events were hitting the African-American community, something else – equally transformative – was taking place across the wider American society. And that is the gradual shift to the left of US political discourse after the fall of the Berlin Wall, which in the last decade or so has accelerated to the far, radical left. This can be observed daily in the national chatter.

At the risk of oversimplifying it, identity politics is the post-industrial version of Marxism. Substituting in the 1848 international communism manifesto the maleficent bourgeois by “white patriarchy” (or “supremacy”, take your pick) and the oppressed proletariat by “minorities” – purposefully fragmented along racial, gender and sexual characteristics – we get today’s progressive political platform down to a T.

This toxic brew of race baiting can only fuel division and hatred in their long march to create a new Marxist multicultural society, where its “racist” history must be expunged (along with its monuments, traditions and institutions) and replaced by an omnipresent government that will achieve the utopian level of social, gender and racial equalities. It has gone mainstream after being hatched initially in American universities, and now shapes much of the discourse across entertainment, the media, multiple government layers, the judicial system, public libraries, even churches and big corporations.

Here’s a good example. The “Black Lives Matter” movement never addresses the bloodshed taking places in communities like Chicago, where blacks are overwhelmingly shot by other blacks. Instead, they purposefully focus on the very few contentious incidences of cops killing blacks in the line of duty. Why? Because they can use this to dismantle that “white patriarchy,” gain political power and advance their radical agenda – while actually doing nothing to solve the violence in black communities.

CW: I would agree wholeheartedly with your assessment.

The early Black Lives Matter website contained Marxist rhetoric about dismantling the state. Much of the unrest related to race, sexual identity and feminism are part of the Marxist strategy for destroying the State outlined by Herbert Marcuse in his articles and books.

ET: The irony is that the US is the least-racist, multiethnic country in the world, certainly one of the top countries in that regard. This is why millions of people of all races want to emigrate there. Americans even fought a Civil War over it. No country is perfect, but the remarkable progress of American society since its founding should be a reason for celebration. And yet the mainstream narrative is the exact opposite, with all sorts of groups angrily complaining about discrimination.

We recently hailed a cab in Boston and the driver was a gentle, older man from West Africa, generally with extremely socially conservative societies. He was listening to an interview with Trevor Noah, the host of “The Daily Show” on Comedy Central, and how he feels discriminated in America. Here is an immigrant from South Africa – one of the most racially tense countries on the planet – getting paid millions of dollars for a job any American could dream of while dumping on his host country. No proof of racism was presented. The driver then turned to us and said, “He’s right, this country is racist.” And if he believes that, of course, he will not vote for conservative values like in his native country, but progressive so that the “Nazis” don’t take over. And why would he make an effort to integrate into such a “racist” society?

So it’s not only that Americans are turning on each other. Newly arrived immigrants are being taught the same thing as well. What do you make of this?

CW: Yes, this is taking place. Educational institutions at every level have become the transmission belts for these ideas.

ET: If these dynamics remain in place, it is hard to remain optimistic about the future of the US. All this is happening as the country is already in the midst of a profound demographic transformation, a challenging process all by itself. As an example, in California, the largest state, between 1970 and 2011 the share of whites in the total population declined from 80% to 40%. At this rapid rate, integration becomes very difficult, if not impossible, meaning that the melting pot is turning into a contentious multicultural salad bowl.

There is no longer a consensus of what it means to be an American, if the country’s borders remain relevant, who has the right to come into the country and under what conditions? These are profound, perhaps irreconcilable differences. As a result, the Union may start to break apart at some point. We are already seeing signs of that, with Middle America increasingly at odds with its coastal counterparts. What can be done to avoid this outcome? What will it take to truly heal racial and social tensions in America?

CW: We need to move away from multiculturalism and identity politics and toward an embrace of the American national identity.

The truth is Americans stand or fall together. The divisiveness of our politics and the pitting of groups against each other cannot end well.

ET: Finally, as an African-American woman, do you believe America is worth saving?

CW: I love America. As a child I believed I lived in the greatest nation in the world. It was America with its Judeo-Christian underpinnings that provided me with the route out of poverty. America was and remains a land of enormous opportunities for those willing to avail themselves.

ET: Hopefully our discussion will be a modest step in that direction. Where can people find out more about your important work in this area? How can they get involved?

CW: Anyone interested in learning more about me can visit my websites at carolmswain.com and bethepeopletv.com. I am also a podcaster and an author. My books – Be the People: A Call to Reclaim America’s Faith and PromiseThe New White Nationalism: Its Challenge to Integration, and Abduction: How Liberalism Steals Our Children’s Hearts and Minds – can be starting points to learn more.

My new book is Debating Immigration: Second Edition. I am on Facebook as Profcarolmswain and Twitter as carolmswain.

ET: Dr. Swain, thank you so much for sharing your insights.

CW: It was my pleasure.

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Russia To Stop Carrying US Astronauts To Space Station In April

Russia’s contract with NASA to carry astronauts to the International Space Station (ISS) will end in April 2019, Russian Deputy Prime Minister Yury Borisov told reporters on Friday. Under the current contract, American astronauts have had access to seats on Russian Soyuz spacecraft in order to reach the ISS and return home according to RT.

Yury Borisov, who is responsible for overseeing military and space matters in the Russian cabinet, said that the landing of a Soyuz-MS spaceship in April next year “will finalize the fulfillment of our obligation under a contract with NASA.”

The expiration will pile further pressure on NASA to restore its own capability to shuttle U.S. crew members back and forth to the orbiting lab. The space agency has contracting with Boeing and Musk’s SpaceX to develop new vehicles to transport astronauts, but the work has been plagued by delays.

NASA has relied on Russia since retirement of the space shuttle in 2011 ended U.S.-controlled access to the space station. Congress and President Donald Trump’s administration have touted the commercial program’s importance to ending that reliance, especially as diplomatic relations between the nations have deteriorated.

The cost of the ISS ferry service has varied over the years: currently Russia charges NASA about $81 million per seat on the Soyuz to fly astronauts to and from the station, up from the cheapest price of $21.8 million in 2007 and 2008. NASA signed an agreement in early 2017 to acquire additional Soyuz seats into 2019, although no further contracts involving the Russian craft have been announced.

The discontinuation of the Space Shuttle program seemed like a minor inconvenience in 2011, when the US and Russia were on relatively good terms. Today however, as a result of the bitter political stand-off between the two nations, the fact that the US has to rely on Russia in some aspects of its space exploration is considered humiliating by some people in America.

However, Russia may continue carrying US astronauts to orbit if a new deal is struck, Sergey Krikalev, executive director of manned space programs at Roscosmos, told TASS. “This is a working issue. The current contract ends, but it doesn’t mean that we’ll stop delivering American astronauts on the ISS. There’ll be other contracts. No tough measures are implemented.” Discussions on the next contract are already underway between Roscosmos and NASA, but “there have been no specific decisions yet,” Krikalev added.

NASA officials declined to say whether the agency has discussed procuring additional Soyuz spots with Russian officials. “As part of its normal operations planning, NASA is continuing to assess multiple scenarios to ensure continued U.S. access to the International Space Station,” NASA spokeswoman Stephanie Schierholz said in an email.

According to Bloomberg, in September 2014, NASA awarded Boeing and Elon Musk’s Space Exploration Technologies Corp. a combined $6.8 billion to revive the U.S.’s ability to fly to the station. SpaceX plans to fly Demo-2, its first test flight with a crew, in April 2019, while Boeing’s Crew Test Flight is now slated for mid-2019, according to a new schedule that NASA released Aug. 2.

Both dates are later than the companies had been targeting. The first Boeing and SpaceX test flights without a crew could occur later this year, according to NASA’s most recent flight schedule.

Late Senator John McCain was among the most vocal critics of the situation, in which the US pays Russia millions of dollars each year in return for space engines and rides to the ISS. Vice-President Mike Pence last week pledged that the US will “very soon” be able to take people into space without Russia’s help and will return to the moon by 2024.

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Monsanto-Bayer: Eliminating The Name Will Not Erase The Criminal History

Authored by Ruchi Shroff via Common Dreams,

Cancelling out Monsanto’s name and keeping only that of Bayer, does not mean forgetting the wrongdoings of a company which, according to the verdict of the Monsanto Tribunal of The Hague, is stained with crimes of ecocide. With Bayer’s official takeover of Monsanto, the giant multinational also inherits its liabilities.

On the eve of the start of the integration process, Monsanto has been held liable for causing cancer through the use of its glyphosate-based weedkiller Roundup and ordered to pay $289 million of damages to the plaintiff Dewayne Lee Johnson in the first landmark case, settled in California in mid August 2018. The jury also found that Monsanto “acted with malice or oppression.”

According to Reuters, the number of lawsuits brought against Bayer’s newly acquired Monsanto is approximately 8000 in the US alone. UN experts Ms Hilal Elver, Special Rapporteur on the right to food and Mr. Dainius Pūras, Special Rapporteur on the right to physical and mental healthdefined the ruling “a significant recognition of the human rights of victims, and the responsibilities of chemical companies.”

Revelations in reports published last year, most notably the “Monsanto Papers” and the “Poison Papers“, have shed light on strategies of big agrochemical groups to expand their empires: from lobbyinginterference in government agencies’ proceedings, attacks in collusion with institutions on independent science, to mega mergers and acquisitions.

For the first time part of these documents were shown to a jury, which were able, among other things to also see that, “at least starting 20 years ago, Monsanto has known that their product can cause cancer, and has gone out of its way to ignore it and/or fight any science that suggests a link”, as declared to Democracy Now by Brent Wisner, the lead trial counsel for Dewayne Lee Johnson in his lawsuit against Monsanto. Added to this, in the same week, California’s Supreme Court rejected a challenge by Monsanto to the state’s decision to include glyphosate in its Proposition 65 list of carcinogens.

On other fronts, other lawsuits have been filed in the US by farmers’groups, and seed sellers are pushing environmental regulators to bar farmers from spraying dicamba weed killer, key ingredient of the new Monsanto-Bayer and Basf products, which has been causing drift-related crop injuries sweeping across rural America in the last 2 years; in Europe, the special committee on pesticides authorization process reacted to the US court’s decision by calling once again for a ban of glyphosate in the continent; in Sri Lanka, where a fatal chronic kidney disease (CKDu) has been linked to glyphosate use, a group formed by farmers’ organizations, scientists and affected families declared that they are ready to take Bayer/Monsanto and other glyphosate herbicide manufacturers to the Supreme Court.

Vietnam is also demanding compensation for victims of exposure to the Agent Orange, the chemical produced by Monsanto for the US military during the Vietnam War.

A clear signal of the fact that Monsanto’s past is set to haunt Bayer in spite of all efforts to eliminate the brand name, is that the week following the verdict, Bayer’s shares fell sharply, approximately by 10 – 12% ($12.5 Billion).  It is interesting to note that the stock exchange, the very core of today’s globalized economy, seems to be quite unforgiving.

Navdanya, along with civil society organizations around the world, will continue to monitor, report and protest so that the agroecological, transition also recently discussed at the FAO‘s Symposium on Agroecology, becomes a reality and that local, circular and inclusive economies, nutritious and healthy food, become the norm once again After fifty years of an intensive, unhealthy food production model that has devastated our agriculture system by polluting the environment, producing poisonous food and without remotely solving the hunger problem, has instead further undermined people’s food sovereignty. Industrial agriculture in fact can claim only a relatively small portion of the global food production. The majority of the food we consume is, actually, still produced by small and medium farmers, while the vast majority of crops coming from the industrial sector, such as maize and soya, is mainly used as animal feed or to produce biofuels.

Navdanya International has invited leading experts from around the world for the drafting of the Manifesto “Food for Health. Cultivating Biodiversity, Cultivating Health.” The Manifesto, which will be widely disseminated to farmers and citizens, governments and stakeholders, aims at highlighting the inseparable link between food and health, developing comprehensive strategies to overcome the model of industrial agriculture, encouraging the convergence and action of the movement for Agroecology and Public Health movements to reach a common vision of sustainable development, which must be equitable and inclusive, based on biodiversity and poison-free food and farming systems.

The work of Navdanya International, from the creation of the International Commission on the Future of Food and Agriculture, and the publication of four Manifestos, has focused on promoting a new agricultural and economic paradigm, and the belief that solutions to the multiple crises facing humanity today can come from a determined shift away from the present profit and competitive-based paradigm to a model that has at its keystone the protection of the earth and environment and respect of the rights and dignity of people. In biodiverse organic farming, in Seed Freedom for farmers and citizens, in circular economies based on meaningful work, we can find solutions to the environmental, climatesocial and economic crisis. We will continue to reclaim citizens’ rights, as well as those of small and medium producers, who, despite being crushed by the current market mechanisms, are the only ones providing us with healthy and nutritious food.

Furthermore, we will not stop fighting this attempt of multinationals to takeover of our food, health and democracy which, instead of being regulated by our elected representatives, are increasingly able to take on the role of regulators through heavy lobbying actions, thus posing a serious threat to our own democratic system.

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