Category: zerohedge

For The First Time In U.S. History White Deaths Outnumber Births In Majority Of States

Deaths now outnumber births among whites in more than half of the United States, according to demographers at the University of Wisconsin in partnership with the University of Texas at San Antonio. Meanwhile the birth/death ratio among blacks, asians and latinos remains robust.

Notably, the number of white deaths increased while births diminished between 1999 and 2016, signaling what could usher in a faster-than-expected transition to a future in which whites are no longer the majority in America.

With significantly fewer white births and a rising number of deaths, natural increase (births minus deaths) actually ended in 2016. In that year, for the first time in U.S. history, data from the National Center for Health Statistics showed more white deaths than births in the United States. –wsic.edu

“It’s happening a lot faster than we thought,” said Rogelio Sáenz, a demographer at the University of Texas at San Antonio and a co-author of the report, which covers the period from 1999 to 2016 using data from the National Center for Health Statistics. Sáenz said he initially thought that the results must be a mistake.

We find overall white natural decrease in the U.S. for the first time in 2016 according to NCHS data. We also find that twenty-six states are currently experiencing it and that its occurrence has accelerated significantly in the past two years from seventeen states in 2014 to twenty-six states in 2016. Some 56 percent of the U.S. population reside in the 26 white natural decrease states and many of them are among the nation’s most populous and urbanized.  –wsic.edu

The pattern first started nearly two decades ago in a handful of states with aging white populations like Pennsylvania and West Virginia. But fertility rates dropped drastically after the Great Recession and mortality rates for whites who are not of Hispanic origin have been rising, driven partly by drug overdoses. That has put demographic change on a faster track. The list of states where white deaths outnumber births now includes North Carolina and Ohio. –New York Times

The rapid change has sweeping implications for the cultural makeup of the United States; transforming a nation of mostly white baby boomers to a multiethnic and racial patchwork that can already be seen in many parts of the country. 

A majority of the youngest Americans are already nonwhite and look less like older generations than at any point in modern American history. In California, 52 percent of all children are living in homes with at least one immigrant parent, Professor Sáenz said.

What does it mean for the political map? Some experts say that rapid demographic change became a potent issue in the 2016 presidential race — and helped drive white voters to support Donald J. Trump. .

–New York Times

How does this affect politics?

The New York Times points out that of the 26 states in which white deaths now exceed births, 13 voted for Donald Trump and 13 voted for Clinton. Four of the states switched from Obama in 2012 to Trump in 2016 – Ohio, Michigan, Pennsylvania and Florida – though it’s unclear how the change in demographics will affect politics in the future.

Florida was the first state where white deaths outstripped births around 1993, largely because it was drawing a lot of retirees. But its population has been one of the fastest growing in the nation. Retirees have kept coming, replenishing the white population, and its large Hispanic population has helped lift the state over all. The median age for Hispanics in the United States is 29, prime for child bearing, compared with 43 for whites.

Deaths began to exceed births for whites countrywide in 2016, according to the report. But in many states, as in Florida, white people moving in made up the losses. However, in 17 states, including California, Michigan, New Jersey and Ohio, those migrants weren’t enough and the white populations declined between 2015 and 2016, said Kenneth M. Johnson, a demographer at the University of New Hampshire and the report’s other author. Five of those states registered drops in their total populations that year: Vermont, West Virginia, Pennsylvania, Mississippi and Connecticut. –New York Times

“People say demographics is destiny and there’ll be more people of color — all that is true,” said Yale social psychologist Jennifer Richeson. “But they also say the U.S. is going to become more progressive, and we don’t know that. We should not assume that white moderates and liberals will maintain current political allegiances, nor should we expect that the so-called nonwhite group is going to work in any kind of coalition.”

Rural areas began to experience a disproportionate number of aging whites long before other parts of the country – as young people tend to migrate towards urban areas – never to return home. 

“There are just hardly any young people in the county anymore,” said Michael Brown, 66, a retired hospital maintenance worker in Robersonville, North Carolina. He tells the Times that his two daughters went away to college and never moved back. “We are the last generation who stayed with their parents,” said Brown.

 

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China’s Oil Trade Retaliation Is Iran’s Gain

Authored by Tom Luongo,

I’ve told you that once you start down the Trade War path forever it will dominate your destiny.

Well here we are.  Trump slaps big tariffs on aluminum and steel in a bid to leverage Gary Cohn’s ICE Wall plan to control the metals and oils futures markets.   I’m not sure how much of this stuff I believe but it is clear that the futures price for most strategically important commodities are divorced from the real world.

Alistair Crooke also noted the importance of Trump’s ‘energy dominance’ policy recently, which I suggest strongly you read.

But today’s edition of “As the Trade War Churns” is about China and their willingness to shift their energy purchases away from U.S. producers.  Irina Slav at Oilprice.com has the good bits.

The latest escalation in the tariff exchange, however, is a little bit different than all the others so far. It’s different because it came after Beijing said it intends to slap tariffs on U.S. oil, gas, and coal imports.

China’s was a retaliatory move to impose tariffs on US$50 billion worth of U.S. goods, which followed Trump’s earlier announcement that another US$50 billion in goods would be subjected to a 25-percent tariff starting July 6.

It’s unclear as to what form this will take but there’s also this report from the New York Times which talks about the China/U.S. energy trade.

Things could get worse if the United States and China ratchet up their actions [counter-tariffs]. Mr. Trump has already promised more tariffs in response to China’s retaliation. China, in turn, is likely to back away from an agreement to buy $70 billion worth of American agricultural and energy products — a deal that was conditional on the United States lifting its threat of tariffs.

“China’s proportionate and targeted tariffs on U.S. imports are meant to send a strong signal that it will not capitulate to U.S. demands,” said Eswar Prasad, a professor of international trade at Cornell University. “It will be challenging for both sides to find a way to de-escalate these tensions.”

But as Ms. Slav points out, China has enjoyed taking advantage of the glut of U.S. oil as shale drillers flood the market with cheap oil.  The West Texas Intermediate/Brent Spread has widened out to more than $10 at times.

By slapping counter tariffs on U.S. oil, that would more than overcome the current WTI/Brent spread and send Chinese refiners looking for new markets.

Hey, do you know whose oil is sold at a discount to Brent on a regular basis?

Iran’s.  That’s whose.

And you know what else?  Iran is selling tons, literally, of its oil via the new Shanghai petroyuan futures market.

Now, these aren’t exact substitutes, because the Shanghai contract is for medium-sour crude and West Texas shale oil is generally light-sweet but the point remains that the incentives would now exist for Chinese buyers to shift their buying away from the U.S. and towards producers offering substitutes at better prices.

This undermines and undercuts Trump’s ‘energy dominance’ plans while also strengthening Iran’s ability to withstand new U.S. sanctions by creating more customers for its oil.

Trade wars always escalate.  They are no different than any other government policy restricting trade.  The market response is to always respond to new incentives.  Capital always flows to where it is treated best.

It doesn’t matter if its domestic farm subsidies ‘protecting’ farmers from the business cycle or domestic metals producers getting protection via tariffs.

By raising the price above the market it shifts capital and investment away from those protected industries or producers and towards either innovation or foreign suppliers.

Trump obviously never read anything from Mises, Rothbard or Hayek at Wharton. Because if he did he would have come across the idea that every government intervention requires an ever-greater one to ‘fix’ the problems created by the first intervention.

The net result is that if there is a market for Iran’s oil, which there most certainly is, then humans will find a way to buy it.  If Trump tries to raise the price too high then it will have other knock-on effects of a less-efficient oil and gas market which will create worse problems in the future for everyone, especially the very Americans he thinks he’s defending.

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Chinese Investments In The US Plunge By 92%

Coming amid the escalating trade war between the US and China, many were quick to blame the collapse in Chinese investments in the US on tensions surrounding protectionism. And indeed, according to research firm Rhodium Group, China’s direct investments in the U.S. plunged in the first half of 2018 as Chinese companies completed acquisitions and greenfield investments worth only $1.8 billion, a 92% drop over the past year, and the lowest level in seven years.

The reality, however, is that this has little to do with the Chinese trade spat, and everything to do with China’s crackdown on outbound M&A and conglomerate “investments” which as we said back in 2015, were just a thinly veiled scheme to cover capital outflows.

Rhodium confirms as much:

The rapid decline in Chinese FDI in the U.S. was driven by a “double policy punch” — Beijing cracking down on rapid outbound investment and the U.S. government increasing scrutiny on Chinese acquisitions through the Committee on Foreign Investment as well as taking a more confrontational stance toward economic engagement with China in general.

The investment tracker is based on collection and aggregation of data on individual transactions, including acquisitions, greenfield projects, and expansions.

Whatever the reason behind the sharp drop, however, it doesn’t change the fact that there has been a recent collapse in recycled Chinese capital back into the US. And, while it may not have caused it, Trump’s recent change in trade policy will certainly make future Chinese direct investment far more problematic. As Bloomberg notes, “lawmakers and the White House are planning fresh curbs on Chinese investment.” Furthermore, as we reported earlier, a just released White House report claimed that China’s spectacular economic growth “has been achieved in significant part through aggressive acts, policies and practices that fall outside of global norms and rules.”

As Thilo Hanemann, a Rhodium direct said, “the more confrontational approach of the Trump administration toward economic relations with China has cast some doubt, in these companies’ minds, about their position here.”

The first-half slump follows a 35% drop in 2017, and if the sale of assets is taken into account – as Chinese investors sold $9.6 billion of US assets in the first five months of 2018, mostly driven by deleveraging pressures from Beijing – the net investment flow is negative. And with former high-profile acquirers such as HNA Group Co., Anbang Insurance Group Co. and Dalian Wanda Group Co. putting their assets up for sale, it will be a long time before China’s serves as a source of direct capital in the US again.

 

 

 

 

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For The Deep State, Smearing Julian Assange Is As Good As Killing Him

Authored by Caitlin Johnstone via Steemit.com,

As I write this, demonstrations around the world are taking place in protest of WikiLeaks editor Julian Assange’s arbitrary detention and silencing by the US-centralized power establishment that has been actively pursuing his destruction for over a decade. The demonstrations will be well-attended, but not a fraction as well-attended as they should be. They will receive international attention, but not a fraction as much attention as they should.

This is because the manipulators and smear merchants who have made their careers paving the way for oligarchic agendas have been successful in killing off sympathy for the plight of Assange. As we discussed yesterday, sympathy is key for getting narratives to take hold in public consciousness. This is why western corporate media will circulate pictures of dead children all day long when it’s in the interests of advancing longstanding imperialist agendas, but never when those children were killed by western weapons. If you can tug at someone’s heart strings while telling them a story, the story you tell them will slide right in with minimal scrutiny. And it works the other way, too: if you can prevent someone’s heart strings from being plucked while hearing about a legitimately heartbreaking story, you can prevent that story from taking hold.

Kill all sympathy for a dissident journalist and you kill all belief in his side of the story.

And Assange’s side of the story is indeed devastating to the preferred narrative of the US-centralized empire. A journalist (yes, journalist, per definition) who publishes 100 percent authentic documents exposing the inner mechanics of power structures all over the world, who was forced to seek political asylum at the Ecuadorian embassy in London in order to avoid extradition by the same government which brutalized Chelsea Manning, is on its face a highly sympathetic story. And it does tremendous damage to the narrative that America and its close network of allies are freedom-loving democracies whose systems of government are nothing like those naughty, oppressive regimes they seek to topple.

So they smear him. As often as possible, using whatever they can, they smear his reputation. Because if they can kill all sympathy for him and his outlet, it’s as good for their agendas as actually killing him.

The smears work because the social engineers know how to manipulate people. In America, for example, people are herded into two isolated ideological holding pens and encouraged to identify as much as possible with whichever pen they’re in so that narratives can be slipped into their consciousness in a smooth, streamlined way. Are you in the ‘R’ pen and upset about the hand you’ve been dealt? You should blame the ‘D’ pen, and those foreigners who are of no strategic consequence to your rulers. Are you in the ‘D’ pen and upset about the hand you’ve been dealt? You should blame the ‘R’ pen, and those Russians whose downfall would advance the longstanding geopolitical agendas of your rulers.

In the same way, those in the ‘R’ pen were fed narratives against Julian Assange in 2010 which they lapped up because believing them was easier than believing that the pen they’re so tightly identified with had enabled the evils revealed in WikiLeaks releases about US war crimes. And in exactly the same way, those in the ‘D’ pen were fed narratives against Julian Assange in 2016 which they lapped up because believing them was easier than believing that the pen they’re so tightly identified with is pervasively corrupt.

By enforcing a strong sense of identification with a particular ideological tribe, they ensure that the psychological discomfort known as cognitive dissonance will arise from any revelation which can be spun as detrimental to that tribe. They then create a narrative which alleviates that discomfort, and that narrative always damages the reputation of the enemies of the power establishment. It’s a snake oil cure for an ailment that they deliberately caused.

Nobody actually thinks that Julian Assange is a Russian agent, or a rapist, or a “hostile non-state intelligence service”, or any of the other absurd smears I’ve seen circulating about him throughout all political sectors of the US-centralized empire. Those are not ideas that anyone has taken on board because they sincerely believe there’s enough evidence for them to outweigh the undeniable fact that many extremely powerful and influential people stand to benefit from tarnishing his reputation on false pretenses. At best, they’re just fairy tales people tell themselves because they’re easier than believing that their favorite country/political party persecutes journalists for telling the truth and is as corrupt and evil as the various WikiLeaks publications of their communications would indicate. At worst, it’s a fairy tale they are deliberately seeding into public consciousness so that people will believe lies instead of truth.

People find all sorts of ways to wiggle their way around the cognitive dissonance that unedited, authentic documents can create in them when it challenges their deeply treasured identity structures. People who present themselves as anti-establishment progressives often say things like “Well, you can be critical of Assange and still support WikiLeaks for providing a valuable service.” And sure, that may be technically true, but it’s never actually true for the people who say it: look at their writings and social media posts and you won’t see them aggressively defending WikiLeaks, you’ll only see them smearing Assange as often as they can get away with. They’re just trying to retain their anti-establishment cred (another treasured identity structure) while promulgating smear campaigns which advance the agendas of the CIA and the State Department. They pay lip service to the image they’re trying to convey, but their actions tell you where they really stand.

People who disrupt dominant narratives will always be attacked and vilified, because those narratives often form the building blocks of people’s identity structures, their egos. An ego is just a collection of believed “I” stories; they typically include believed ideas about really basic things like “I am this body,” but they also include a bunch of other “I” stories like “I am a Democrat” or “I am a patriotic American” as well. Attacking dominant narratives on a large scale will cause intense cognitive dissonance in everyone who has a lot of identity wrapped up in the power structure which is weakened by that attack, to such an extent that it can feel as though you yourself are being personally attacked. The way Democrats have talked about Assange since 2016 you get the distinct impression they feel like he may as well have walked up and stabbed them.

As this webcomic from The Oatmeal brilliantly explains, the brain is hardwired to protect strongly valued belief systems in the same way it’s hardwired to make sure the body protects itself from a physical attack. This serves a useful function in that it gives us a cognitive strategy for making sense of the world that isn’t blown to pieces every time you encounter a new idea, but it can also be malformed in a way which does not accurately represent reality. When that happens, it really is worthwhile to tough it out through the brain’s distress signals of cognitive dissonance and consciously restructure your sense-making apparatus in a way that accommodates a more accurate perspective.

This is the invitation whenever you’re looking at a WikiLeaks drop which challenges your existing worldview. It’s just raw information sitting there, and you can choose to believe a story which allows you to comfortably dismiss it, or you can stick it out through the psychological discomfort and allow it to restructure your worldview. You have defense mechanisms in place to prevent random bits of information from tearing apart your sense-making apparatus that haven’t been properly audited for reliability, but a publishing outlet with a 100 percent perfect record for releasing authentic documents is as reliable a source of information as you will ever find.

If your goal is psychological comfort, you have plenty of good reasons to loathe Julian Assange and spend all day helping plutocrats and secretive government agencies damage his reputation so that nobody will ever pay attention to him or his publications. If your goal is the truth, however, it is to your benefit to ignore the smears, to accept the reality of how and why Assange is being targeted, and to allow the truths that have been revealed by WikiLeaks publications to reshape your understanding of how the world works.

*  *  *

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Black Hawks Down? Pentagon Admits Russian Chopper Trumps US

The U.S. Army’s Sikorsky UH-60 Black Hawk helicopters have fewer capabilities for critical missions than the Russian-made Mil Mi-17 (NATO reporting name: Hip) helicopters operating in Afghanistan’s Air Force, according to a new report from the Pentagon’s inspector general.

Afghan Armed Forces, which are jointly working with the Pentagon to develop and extend its Air Force’s capacities, have been flying the Russian-made helicopters since the early 1980s.

In response to President Putin’s covert/overt military operations in Ukraine and parts of the Middle East, U.S. lawmakers recently asked the Pentagon to phase out the Mi-17 sold by Rosoboronexport, Russia’s state-owned weapons exporter — in favor of American made helicopters in Afghanistan’s Air Force.

An Afghan Mi-17 helicopter flown by Lt. Col. Bakhtullah, 377th Afghan Air Force Squadron commander, takes off for an air-assault training flight, May 29 from Kabul International Airport, Afghanistan (2013). (Source: Afghanistan Air Force)

The transition to Black Hawk helicopters “presents several challenges that have yet to be fully addressed,” Pentagon Inspector General Glenn Fine wrote in a quarterly report, available to the public, on overseas contingency operations, posted last month after the first Black Hawk became operational in Afghanistan’s Air Force.

“Black Hawks do not have the lift capacity of Mi-17s. They are unable to accommodate some of the larger cargo items the Mi-17s can carry, and in general, it takes almost two Black Hawks to carry the load of a single Mi-17.

Furthermore, unlike Mi-17s, Black Hawks cannot fly at high elevations and, as such, cannot operate in remote regions of Afghanistan where Mi-17s operate.

According to 9th Air and Space Expeditionary Task Force-Afghanistan (9th AETF-A), the Mi-17s will play a “crucial role” in the near term fighting season. In the future, as Mi-17s phase-out of service, the aforementioned challenges will become more pronounced.”

The Pentagon’s inspector general detailed in the report that by the end of 2019, the Mi-17 helicopter inventory is expected to be reduced from 47 to 20. The fleet size is scheduled to decrease to 18 by the end of 2021 and then to 12 by the second half of 2022.

Bloomberg said that in 2017, after months of lobbying by Connecticut lawmakers, where the Black Hawk is manufactured (how convenient), Congress appropriated more than 800 million dollars for Afghanistan’s Air Force modernization program.

As of March 2018, the Pentagon delivered 8 Black Hawks with another 45 expected to arrive in the near term — with a total 159 planned over the next few years.

Army Lieutenant Colonel Kone Faulkner, a Pentagon spokesman, told Bloomberg in an email that the Defense Department concluded that Black Hawks could only perform 90 percent of the Afghanistan missions the Mi-17 fleet was performing.

Faulkner tried to spin a few positives about the Black Hawk, which he said, it “can fly at the required mission altitudes at which the Afghan Mi-17 missions are typically flown.”

He added, “in many cases, the UH-60 is as, or more, capable than the Mi-17” and that one version “provides more firepower than the Mi-17 variant, which is limited to rockets only and is less maneuverable.”

The Pentagon’s inspector general revealed that Afghanistan’s Air Force performs “80 percent of the maintenance tasks on their Mi-17s” and mostly relies on “contractor logistics support for the remaining 20 percent.” The inspector general said the Mi-17’s maintenance tasks are “much more conducive to the education level available in the general Afghan population than the UH-60As” when it comes to maintenance.

Faulkner again tried to point out more positives about the Black Hawks, adding that the helicopters have “significantly lower” operating costs than Mi-17s, and the transition will “enable a shift from a Russian supply chain to a well-established and reliable U.S. supply chain.”

While the military-industrial-complex with the help of Connecticut lawmakers has been rushing to sell their Black Hawks to Afghanistan, it is rare for a high-ranking Pentagon official to admit that Russian helicopters are far more superior than theirs. Is American (helicopter) Exceptionalism fading?

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Immigration Bills In Jeopardy After Dramatic GOP Bickering On House Floor

Rep. Mark Meadows (R-NC), chairman of the conservative House Freedom Caucus, had an angry confrontation with House Speaker Paul Ryan after confusion erupted over which version of an piece of immigration legislation the House of Representatives was set to vote on, with Meadows later claiming in a statement that “the leadership compromise bill omitted key provisions that had been agreed upon beforehand.”

Both men became animated – pointing fingers at each other to the point where reporters in the press gallery could hear the the heated discussion – such as Politico’s Jake Sherman who live-tweeted the drama. 

Meadows could be heard telling Ryan “It doesn’t matter anymore,” and “I don’t care anymore.” 

Meadows reportedly got in Ryan’s face over which of two similarly-named immigration bills the House is expected to vote on tomorrow. 

The more conservative legislation has been dubbed “Goodlatte,” after the bill’s author, Rep. Bob Goodlatte, R-Va. But a second bill, commonly called the “compromise” bill, has also been referred to as “Goodlatte,” since he’s a sponsor of that package as well. Notably, House Majority Whip Steve Scalise, R-La., rebranded the compromise bill “the president’s bill” instead of the “leadership” bill. –Fox News

In order to clear things up, GOP leadership handed out talking points to lawmakers about the “compromise” bill – however Meadows claimed that the “talking points don’t match the text,” and “are not really for prime time.”

“This was a communication issue where the leadership compromise bill omitted key provisions that had been agreed upon beforehand,” Meadows spokesman Ben Williamson said in a statement. “We are working to resolve it.”

Several GOP lawmakers told Fox News that they were disturbed at the spat between Ryan and Meadows – with one source saying that a few members who were previously a “hard yes” on the immigration legislation are now “squirming” after the confrontation. 

 

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Here Are The Three Possible Outcomes From Friday’s OPEC Meeting

Ahead of Friday’s OPEC meeting in which the oil producing cartel and Russia will most likely hike production for the first time in 2 years, various numbers are being thrown around, anywhere between 0 – which is how much additional oil Iran and Venezuela want to be produced – and 1.5 million barrels per day, which was the output increase goal of Russia as recently as Tuesday.

However, just like no production increase is impossible, especially with the pressure Trump is weighing on his new best friends, Saudi Arabia, so the upper end of the production range, or 1.5mmb/d. is also unlikely as Energy Aspects analyst Amrita Sen said says in interview on Bloomberg Television from Vienna. Predicting that Vienna’s session on Friday will be “one of the most political meetings we’ve seen in years, if not decades”

Sen also said that Russia’s proposal to increase output by 1.5mb/d is “non-starter,” “not even on the table for discussion” because crude prices would drop – sharply  – if OPEC+ agree to raise output more than 600kb/d.

As a result the London-based analyst – who was already assuming 500k b/d output increase in 2H from Gulf Arab producers and Russia, even before this week’s OPEC summit was floated – forecasts that producers will likely add 300k to 600k b/d as Saudi Arabia, Russia, Kuwait, U.A.E. all want to boost output.

Which brings us to the three possible outcomes from Friday’s meeting as laid out by energy consultancy Wood Mackenzie:

  • The most likely option to get wider support, is if OPEC agrees to boost production by 500kb/d, with Russia adding 100kb/d in 2H, for a total of 600kb/d.
  • The second possible option is for OPEC to keep current agreement to cut output, leading to a “small” implied draw in stockpiles in 3Q followed by a build in 4Q which would lead to lower prices heading into 2019 and oversupply for year.
  • The third option sees OPEC increasing output by 1m b/d, and Russia by 300k b/d, which would add 900k b/d on avg to inventories in 2H18 and 1.8m b/d in 2019, and likely much lower oil prices in the near-term.

The most likely option, one around 600,000 is also what the FT reported this afternoon saying that “a senior Opec figure suggested that Saudi Arabia was targeting a collective production increase of 600,000 to 800,00 barrels a day.” The range is a slight increase to the one floated earlier, and which called for a production increase of 300-600kb/d.

The target, which it proposes would be shared proportionally between all members of the so-called Opec+ group that are capable of raising output, has not yet been finalised but is forming the basis of discussions with other countries. The kingdom had earlier briefed that it was looking for a rise of between 300,000 and 600,000 barrels.

However, as reported previously, Iran – which continues to ignore the reality of a world in which it is sanctioned, and which will trim Iranian oil exports by up to 1mmb/d – is resisting the Saudi-led move which would send oil prices lower, putting the two Middle East rivals on a collision course ahead of Friday’s summit.

Bijan Zanganeh said he did not believe an agreement to relax production cuts — first agreed nearly two years ago amid a global supply glut — could be reached at the oil cartel’s meeting, insisting the group was not an “American organisation”.

“Opec is not an organisation to receive its instruction from President Trump,” Mr Zanganeh said on arriving in Vienna for the talks.

Or maybe it is. In a separate report from CNN, Zanganeh said that OPEC members were discussing going back to 100% compliance, and added that Iran may agree to a supply increase without the need for new agreement. Specifically Iran is envisioning a world in which there is no more “overdelivering on cuts” – largely as a result of the collapse of Venezuela’s oil infrastructure which has resulted in Caracas producing far less than even its production cut quota  – with analysts estimating that if those who have cut more than required scaled back to 100% compliance (instead of the 100%+ where it is now due to basket cases like Maduro) it would add a million-odd barrels a day to output.

Of course, at the end of the day, OPEC is really another name for Saudi Arabia, and whatever Riyadh wants, Riyadh gets. And on Wednesday, the Saudi energy minister, Khalid al-Falih, said that while they were still in consultations with other members, more countries were backing the idea that it was “time for us to change course”.

“The market demands more [oil] in the second half. The exact amount, the timing, the manner . . . we have a couple of days to discuss.

“I am confident that at the end of the day reason will prevail and we will do the right thing.”

In short, OPEC will most likely agree to boost production by around 800kb/d, with Iran kicking and screaming but ultimately agreeing, with significant risk that the final number could be above 1mm barrels per day.

And just in case the number ends up being “far higher”, Saudi Aramco, which would love a $100+ oil price ahead of its IPO, said that it has at least 2 million b/d in additional output capacity if required.

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Texas Billboard: “Liberals, Please Continue Until You Have Left The State”

Authored by Mac Slavo via SHTFplan.com,

A billboard spotted in Texas is likely to send people running to safe spaces and cry rooms.  The billboard tells liberals to continue driving on I-40 until they have left the “great state of Texas.”

“Liberals,” the billboard reads. “Please continue on I-40 until you have left our GREAT STATE OF TEXAS.”

A photo of the sign was posted to Facebook by Kyle Mccallie, of Fritch, Texas. He wrote the billboard was six miles east of Vega, a city roughly 35 miles west of Amarillo, on the eastbound side of the highway. Mccallie’s post, which was uploaded earlier Tuesday, now has over 14,000 shares as of Tuesday night.

According to USA Today, the photo of the billboard shows a logo for “Burkett” below the content of the sign. A spokesperson for Burkett Media of Austin, Texas said that company is unaffiliated with the content on the billboard.

It’s actually pretty odd to see anti-liberal messages around.  Most often, we are bombarded with leftist propaganda and authoritarian brainwashing to accept a wholly tyrannical state.

Mccallie said he is supportive of the sign’s message which asks liberals to leave Texas. He said he doesn’t know who’s behind the billboard, which he said is located about an hour’s drive from his hometown.  However, not everyone agrees that the message is humorous or in good taste.  On social media, many have reacted negatively to the sign’s message. Mccallie said he has received numerous messages critical of both himself and the billboard, many of which have been overly obscene.

According to ABC7 Amarillo, the billboard’s image has now gone viral. This billboard’s viral status comes just after another sign popped up in Maryland gobbled up attention in May. The billboard stated, “hey liberals, better get your guns if you try to impeach President Trump.”

There are probably a lot of full safe spaces right now because of these two signs.

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Canadian May Home Sales Plunge Most Since The Financial Crisis

  • Rising rates? Check.
  • Chinese capital controls and a slump in foreign buyers? Check.
  • Trade war with the US? Check.

Things are not looking good for Canada’s national housing market, which as VCG reports, continued its sluggish performance in the month of May. Despite the warmer weather and usually busy spring selling season, buying activity has been awfully quiet. New mortgage regulations which are now in full swing have stymied fringe buyers, particularly millennials. According to new data from credit bureau TransUnion, new mortgage originations among millennials in Canada fell by 19.5% between the last quarter of 2017 and the first three months of 2018.

That has also been showing up sales data. 

As shown in the chart below, national home sales in Canada plunged by 16% Y/Y for the month of May. This was the worst decline since the great financial crisis in 2008 when home sales dipped 17% that May. Furthermore, total home sales of 50,604 marked the lowest total since May 2011.

Seasonally adjusted home sales edged 0.1% lower on a month over month basis, and 15% on a year over year basis. Or, as Steve Saretsky put it, “either way you slice it not a great month for one of the worlds most resilient housing markets.”

And as sales continue to slide inventory is beginning to build. For sale inventory crept up by 4% year over year, increasing for the first time in three years, and the highest May increase since 2010.

In light of the above, it is not surprising that the average sales price dipped 6% year over year in May, which however was not nearly as bad as April when year over year declines registered a head turning 11% decline.

But more troubling is that when looking at the smoothed out index of the MLS HPI prices showed the smallest possible increase of just 1% year over year in May, the lowest since September 2009. Not only did this mark the 13th consecutive month of decelerating year over year gains per the Canadian Real Estate Association, but at the current rate of slowdown, next month Canada will record the first annual drop in home prices since the global financial crisis.

The silver lining: condos continue to hold up well as buyers tumble down the housing ladder; here prices posted a 13% increase from May 2017.

CREA’s chief economist Gregory Klump shouldered much of the blame on tighter borrowing conditions, “This year’s new stress-test became even more restrictive in May, since the interest rate used to qualify mortgage applications rose early in the month. Movements in the stress test interest rate are beyond the control of policy makers. Further increases in the rate could weigh on home sales activity at a time when Canadian economic growth is facing headwinds from U.S. trade policy frictions.”

Klump’s theory stacks up well with recent data which suggests fringe borrowers are being pushed towards the private lending space, particularly in Ontario. Mortgage originations at private lenders in the Q1 2018 rose to $2.09 billion in Ontario, a 2.95% increase from last year. The market share of private lending went from 5.71% of originations in Q1 2017, to 7.87% in Q1 2018, despite originations at other channels dropping.

In other words, there is a surge in unregulated, non-bank lending, just as the housing bubble pops, precisely what happened the last time there was a full-blown financial crisis.

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The Fed’s “Inflation Target” Is Impoverishing American Workers

Authored by Antonius Aquinas via AntoniusAquinas.com,

Fed Chair Jerome Powell apparently doesn’t see the pernicious effects of inflation

At one time, the Federal Reserve’s sole mandate was to maintain stable prices and to “fight inflation.”  To the Fed, the financial press, and most everyone else “inflation” means rising prices instead of its original and true definition as an increase in the money supply.  Rising prices are a consequence – a very painful consequence – of money printing.

Naturally, the Fed and all other central bankers prefer the definition of inflation as a rise in prices which insidiously hides the fact that they, being the issuers of currency, are the real culprit for increased prices.

Be that as it may, the common understanding of inflation as rising prices has always been seen as pernicious and destructive to an economy and living standards.  In the perverted world of modern economics, however, the idea of inflation as an intrinsic evil has been turned on its head and monetary authorities the world over now have “inflation targets” which they hope to attain.

America’s central bank is right in line with this lunacy, as it has been reported that at the Fed’s “May minutes” it wants “a temporary period of inflation modestly above 2 percent [which] would be consistent with the Committee’s symmetric inflation objective.” Translated into understandable verbiage, the Fed wants everyone to pay at least 2% higher prices for the goods they buy.

Yes, by some crazed thinking US monetary officials believe that consumers paying higher prices is somehow good for economic activity and standards of living!  Of course, anyone with a modicum of sense can see that this is absurd and that those who espouse such policy should be laughed at and summarily locked up in an asylum!  Yet, this is now standard policy, not just with the Fed, but with the ECU and other central banks.

The baneful consequence of this economic quackery is being felt by American workers as admitted by the Labor Department.  Instead of spurring expansion, inflation is eating into and depressing wages:

For workers in ‘production and nonsupervisory” positions, the value of the average paycheck has actually declined in the past year.  For those workers, average ‘real wages’ – a measure of pay that takes inflation into account fell – from $22.62 in May 2017 to $22.59 in May of 2018.*

While the decline in nominal wages is not significant, the manner in which the government now calculates inflation has been skewed to understate its impact.  Under the previous calculation, the current US inflation rate is probably closer to 5%.

Wage stagnation is not new.  Average real wages peaked more than 40 years ago and have fallen in real terms ever since.  Not surprisingly, the drop in wages in real terms began soon after the US went off the last vestiges of the gold standard in 1971.

As sound theory has long ago demonstrated, the idea of economic growth through money printing is absurd.  Increases in living standards and real wages can only come about through savings, investment, and capital accumulation.  Workers who have superior tools and equipment are obviously more productive than those that do not. Yet, capital goods have to be produced and production takes place over time.  Savings allow for the production process.

The level of wages are also closely linked to savings.  The greater savings an economy has enables entrepreneurs to bid for workers and increase wage rates.  This is how wages rise – competition for labor among businessmen pushes up wage rates.  The more savings entrepreneurs have, the higher they can bid for employees.

How and why wage rates rise and how employment is created had been understood by economists of yesteryear.  Today, however, the profession is dominated by “inflationists” and monetary cranks who believe that nearly every economic problem can be solved by the printing press.  Anyone who holds such ideas cannot be taken seriously.

While the Federal Reserve may think an inflation target will create prosperity, the reality for real wages is quite the opposite.  The laws of economic science have not been repealed.  An inflation target will lead to the impoverishment of not just workers, but lower living standards for all.

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