It’s a question that the financial press – not to mention millions of struggling Americans – have returned to time and time again (recently, it even received its own Vox explainer): If we are truly in the middle of an economic boom, then how come so many Americans, even members of the vaunted middle class, feel like they’re barely treading water?
According to the Fed, roughly 40% of Americans couldn’t cover an emergency $400 expense. Wage growth has been stagnant for decades. Meanwhile, our monetary policy makers point to a lack of inflation in the economy as an excuse for keeping interest rates on hold, even as the man on the street, and even a growing number of economists, contend that prices have been climbing much more quickly than the official data let on.
And we’re not just talking about the obvious factors like rising tuition, rent and health-care costs. It increasingly appears that the central bank is underestimating food inflation, even as the prices of many agricultural commodities remain in a slump (of course, Trump’s trade war isn’t helping).
To the growing list of distressing data points, we can now add one more: Gallup has published a poll showing that roughly 45% of Americans would rate their financial situation as “fair” or “poor” – and that a staggering 70% expected they would be financially better off. And while two-thirds of Americans say they have enough money to live comfortably, another one-third do not. But even more concerning is the 25% of respondents who say they’re constantly worried about not having enough money to cover their household expenses. Roughly the same number said they’re only just making ends meet.
In a ranking of Americans’ financial anxieties, the overwhelming majority of respondents said they’re at least a little worried about being able to afford health care costs and having enough money for retirement.
Gallup synthesizes the polling data into what it calls a “Personal Financial Worry” index. This year, 22% of respondents said they were worried about six or seven of the seven items, qualifying them for the “highly worried” category. Another 24% worry about three to five items and are classified as “moderately worried.”The remaining 55% said they have few financial worries, while 30% – the group most likely to have a college degree, gainful employment and the ownership of stocks – are worried about none of the seven.
Americans’ love affair with auto- and student-loans has helped push outstanding consumer credit above $4 trillion. Even though the pace of credit growth slowed last month, once the next recession comes, the number of Americans who are struggling to make ends meet will likely explode higher, while those who are already struggling might quickly find their backs against a wall.
via ZeroHedge News http://bit.ly/2W6zczh Tyler Durden
It’s ironic, to say the least, that the Chinese government chose to deny a national broadcast of “Game of Thrones”’ last installment recently, signaling to both its own people and to the United States that the ongoing trade war is far from over.
After all, Mr. Trump’s much cherished trade wars are a game where one powerful leader confronts another – a game of thrones, so to speak, where skirmishes and battles occur and the innocent become victims in an inescapable field of combat.
Unlike marvelously created made-for-television episodes where someone usually emerges victorious, in trade wars, everyone loses.
Those Chinese who looked forward to seeing the final episode may have instead seen some of the last few weeks’ televised propaganda and concluded that the United States is not to be trusted. At the same time, Americans – Kansas grain farmers who previously shipped crops to China; South Carolina auto workers who built China-bound BMWs, Volvos, and Hondas; or ordinary U.S. Walmart shoppers paying slightly higher prices – are not doing quite as well as they were before Mr. Trump’s game of thrones started.
Of course, we’ve all heard the justifications: China has not played by the rules, its enforcement of intellectual property rights leaves much to be desired, and its government-owned enterprises are subsidized unfairly. But we must also recognize that the “victimized” American businesses who still chose to do business in China did so voluntarily. In spite of its well-known imperfections, they saw China’s marketplace as attractive and profitable.
Of course, it would be great if we could compel China to improve its practices without subjecting American workers and consumers to friendly fire. And we might all wish to call Camelot home. The situation is much like when a landowner buys a fine home at a discount next to an industrial plant and then brings suit to force a clean-up. One cannot voluntarily come to the nuisance and then expect a court of law to provide a windfall. But it doesn’t hurt to try.
Those who think that the ongoing trade wars with China and other countries are making America great should look closely at what is happening to U.S. industrial production, which has fallen for three of the last four months. They might consider falling retail sales. Or they might look at real-time GDP growth estimates from the Federal Reserve Banks of New York and Atlanta, which are now registering less that 2.0 percent in real terms.
For a wider-ranging perspective, they might consider the Federal Reserve Bank of Philadelphia’s monthly estimates of future growth for each of the 50 states. These show strong state economic growth generally disappearing, and forecast state recessions in a few places.
If we are engaged in a game of thrones, the data suggest we are losing.
Politicians are savvy. They have all of this information. So why would they deliberately choose policies that could cause damage to Americans’ economic prospects in an election year? Why would those responsible for securing the wellbeing of all Americans choose to favor specific special interest groups such as organized labor in the industrial north instead of working to secure prosperity for all Americans?
There are at least two answers to these questions:
First, perhaps the savvy people making these political choices are far better informed about the outcome of their game of thrones than the rest of us mortals. Based on the cards they are holding, they fully expect to win and make Americans stronger in the long-run, even though we are weaker in the immediate future.
Alternately, perhaps politicians who would risk a recession over a trade war, all while preparing to run for office, are fundamentally risk takers. After all, these are competitive people drawn to a high-stakes profession. They might prefer playing a game of thrones, seeking a resounding victory when it is not at all clear that they will win. If they succeed, the victory may taste sweeter, but in the meantime, the common folk are made poorer.
via ZeroHedge News http://bit.ly/2EXVOfJ Tyler Durden
It’s not just humans who have no idea how to trade this market: math PhD’s are just as clueless, and as a result quants are having a deja vu of December when they suffered jarring losses in a short period of time, just like their human peers.
For evidence, look no further than HBK Capital Management, which is closing its quant unit, adding to the recent pile up of hedge funds that wagered on algorithmic trading… poorly.
According to Bloomberg, the Dallas-based firm which manages a total of $8 billion, is liquidating a more than $400 million quant fund and returning capital to investors, based on a statement Friday. HBK is also cutting its allocation to a statistical arb fund. The quant strategy was one of seven that HBK employed, alongside corporate credit, emerging markets, event-driven equities, structured credit, developed markets fixed income and volatility.
“HBK’s decision was prompted by a reevaluation of its equity statistical arbitrage effort, which performed exceptionally well through 2014 but less well in recent periods,” according to the statement from the $10 billion firm. “Although recent performance compared favorably with many similar funds, it did not meet HBK’s return objectives.”
HBK is the latest fund to fall amid hard times, struggling to make money amid bouts of market volatility. Investors yanked $8 billion from quant funds in the first four months of this year, according to data from eVestment. That’s on top of the $19 billion they pulled in 2018.
Even iconic investors such as billionaire Cliff Asness who manages one of the world’s largest funds, has faced losses and redemptions, admitting earlier this month that quant stock selection has been “terrible.” Amplitude Capital, which lost money for two straight years and saw investor withdrawals, is returning outside money. And BlueMountain Capital Management is liquidating its $1 billion computer-driven portfolio and refocusing on human-run investing.
One of the main reasons for the quant underperformance: the nature of stock gyrations. As Bloomberg explained, risk appetite and economic growth expectations haven’t been strong enough to help revive a factor like value, which tends to be made up of cheaper and thus riskier equities. Others, like quality and low-volatility, have looked out of tune with the new year rally, even after they became expensive thanks to their haven appeal in late 2018.
Even the momentum factor, which had made money in eight of the last 10 years, plunged in 2019. The strategy of buying winners of the past year and selling its losers became loaded with more defensive bets in the fourth quarter, and they turned into laggards as the S&P 500 surged in the new year.
Despite the challenging conditions and his colorful remarks, Asness told the Morningstar conference in Chicago he intends “to stick like grim death” to his beliefs and work on improving his explanations to help investors.
Proponents argue that recent factor underperformance is statistically nothing out of the ordinary and needs to be considered in the long term. If and when portfolios rebound, these declines might seem like a blip in retrospect. Asness reckons stock valuations are currently stretched to levels not seen since the 1990s tech bubble — a signal that his strategies may be ready to pay off.
However as of mid May, and especially later into the month, the headache is that factor declines have been occurring in concert. Sanford C. Bernstein noted earlier this year that rising correlations in the field, which reached the highest in at least two decades, have made it harder for quants to generate idiosyncratic returns and stave off unwanted risks.
For instance, both value and momentum — two factors that in the past have moved in opposite directions — have dropped together in the last two quarters.
Yet one man’s meat is another man’s poison, because as many in the business are throwing in the towel on quant strategies, Steve Cohen’s Point72 Asset Management is expanding its quant business with two money manager hires. Specifically, according to Bloomberg, Sergey Fein joined this week from ExodusPoint Capital Management, while Yang Lu, who previously worked at BlueMountain Capital Management. Both will be portfolio managers in the firm’s Cubist Systematic Strategies unit.
Fein joins after a little more than a year at ExodusPoint, which was co-founded in 2018 by Michael Gelband and was the biggest ever hedge fund launch. Fein previously co-founded quant fund R&F Capital Advisors, which shuttered in 2017 amid a slump for systematic strategies.
Lu was most recently at BlueMountain, where he co-ran the firm’s systematic hedge fund with Perry Vais. BlueMountain is liquidating its roughly $1 billion systematic portfolio to focus on human-run credit investing.
Point72, which now manages $13.5 billion and which has served as the basis for the show Billions on various occasions, “has seen its share of managers come and go as multistrategy hedge funds compete for talent.” The firm is seeking to raise an additional $1 billion this year after garnering $5 billion in outside capital when it launched in 2018. The fund has returned 7.4% in the first four months of 2019.
via ZeroHedge News http://bit.ly/2IfXX6X Tyler Durden
On May 28 I wrote that “the Western world is collapsing so rapidly that I am afraid that I am going to outlive it”. My article was about the rising demonization of white people that is producing a collapse in their confidence. Inculcated guilt is making whites willing to accept discrimination against them in order to elevate Arab, African, and Hispanic migrants that greedy corporations and witless political leaders have brought into the country. The Identity Politics of the Democratic Party works to the advantage of darker skinned migrants who present themselves as the victims of the white-faced victimizer.
Psychological and emotional collapse is not the only form of collapse underway in the US and Western world generally. There is also economic and social collapse, especially in the United States. Today America’s once great manufacturing and industrial cities, such as Detroit, St. Louis, Cleveland, Flint Michigan, Gary Indiana, have lost 20% of their populations, largely due to the offshoring of US manufacturing.
Social collapse is evident in rising homelessness. Los Angeles, San Francisco, and Seattle have large homeless populations that encamp on city streets, parks, and upscale neighborhoods such as Venice Beach.
In Los Angeles feces and garbage in public streets have caused a plague of rats and fleas. Dangerous sanitation conditions have caused medical authorities to predict “a major infectious disease epidemic this summer in Los Angeles”. The flea-infested carpets in City Hall are being ripped out because of fear of a typhus outbreak brought on by rat infestation.
Costs are mounting on already struggling taxpayers. For example, in Los Angeles in 2016 voters approved a $1.2 billion measure to finance 10,000 units of housing for the homeless. The initial cost three years ago was $140,000 per housing unit. Now it is $500,000 per unit. As one news report put it, “Spending a half-million dollars to build one basic rental unit to get one homeless family out of the rain” doesn’t come across as a viable idea.
Among the solutions being investigated are refugee camps and a rethinking of the policy of taking in millions of peoples from impoverished and unstable countries. We are impoverishing ourselves without making a dent in world poverty. For every person the US takes in, tens of thousands remain. Already areas of the US look and function like India of 100 years ago.
Homeless alleviation is at least benefiting liberal and progressive organizations who are amassing money and power to fight homelessness at the expense of taxpayers.
Another sign of social collapse is growing water problems. The Flint Michigan problem is well known, but there are many others with less publicity. Henry Ford Hospital and the Detroit Health Department report a drastic increase in levels of waterborne diseases.
This is just a taste of the accelerating social collapse. Readers will write to inquire why I didn’t include x,y, and z and the health care crisis. The answer is that this is an article, not a book.
What we are experiencing is the failure of government at all levels. Huge sums are being spent on wars and the fomenting of wars while Los Angeles faces the prediction of a typhus epidemic. For two decades the US has spent trillions of dollars on wars in the Middle East in behalf of Israel. Washington calls it “the war on terror,” which is a cover story that hides the real agenda and motivation of violence that has killed, maimed, orphaned and displaced millions of Muslims. One consequence of these senseless wars has been to radicalize Muslims against Americans and Europeans even as the US and Europe import millions of displaced Muslims into their countries.
Countries without a homogeneous population are already disadvantaged by disunity, but to bring in massive numbers of peoples who have every reason to hate you is insanity. Once here, the hatred is weaponized against white people by Identity Politics.
If a country decided to self-destruct, it would do precisely what the US and Europe have done. This is the serious problem, not Iran, North Korea, Venezuela, Syria, Russia, China. It is likely the case that Identity Politics is now so entrenched in American institutions, such as the New York school system, that disunity is now a permanent feature of the United States.
The largely unacknowledged problems that the US faces would overwhelm even a unified country. For a country as disunited as America, it is difficult to see any favorable odds.
via ZeroHedge News http://bit.ly/2MivItD Tyler Durden
Perhaps sensing that the US “maximum pressure” campaign against Iran is fast deflating, with even ultra-Hawk John Bolton late this week saying American military build-up had successfully “deterred” imminent Iran threats – suggesting the crisis has been averted – the Saudis are now going on the offensive.
Image source: AP via Al Jazeera
Saudi Arabia’s aging King Salman went on an anti-Iran tirade during an emergency meeting of Arab leaders hosted in Mecca on Thursday, saying the Shia country is the greatest threat to global security for the past four decades. He also echoed past US and Israeli charges that Tehran is currently developing nuclear and ballistic missiles in order to threaten its neighbors and extend its influence over the region.
He said Iran’s leaders were “harboring global and regional terrorist entities and threatening international waterways.” He called for “using all means to stop the Iranian regime” from its regional “interference”. Iran for its part rejected these as “baseless accusations” and has denied it had any role in a spate of recent “sabotage” attacks in the Gulf region.
The king further condemned Iran’s tactics to disrupt maritime trade and global oil supplies in “glaring violation of UN treaties” following Riyadh’s blaming Iranian operatives for using underwater mines to attack and “sabotage” four tankers near the Strait of Hormuz weeks ago, two of which were Saudi flagged.
“The Iranian regime has been interfering in other countries’ affairs, developing their nuclear programs and threatening international navigation,” King Salman said during his speech, according to a translation by Saudi-owned Al-Arabiya.
Iran has been “supporting terrorism, undermining stability, and looking to expand its influence over the past four decades,” Saudi Arabia’s King Salman said at the GCC Summit in #Mecca. https://t.co/8TMXsarPPKpic.twitter.com/GdQ20I64r2
— Al Arabiya English (@AlArabiya_Eng) May 30, 2019
The Saudis are attempting to build a strong consensus of Arab states which will stand aggressively against Iran and its allies in the region; however, these efforts could be crippled by the ongoing inter-GCC economic and diplomatic war involving Qatar.
The US welcomed the move toward “Arab unity” to confront Iran, with a State Department spokesperson saying Thursday, “Gulf unity is essential in confronting Iran, to confronting their influence, to countering terrorism writ large, and, of course, to ensuring a prosperous future for the Gulf,” according to the AP.
Saudi officials also blamed Iran for fueling the war in Yemen by backing Houthi rebels, which the Saudi coalition has been fighting mostly via airstrikes since 2015, resulting in what the UN has called the “world’s worst humanitarian crisis”. Visiting delegations were even shown destroyed Houthi drones and missile fragments upon their arrival in Jeddah.
Notably, the Iraqi delegation scoffed at the summit’s anti-Iran emphasis. Iraqi President Barham Salih told the summit that stability in Iraq is paramount and that any threats to Iran’s security could spark war in the region, sending fragile post-war Iraq back into sectarian bloodshed and chaos.
This week the Pentagon revealed that nearly 1,000 troops newly deployed to Middle East to counter the Iran threat would be stationed in Saudi Arabia and Qatar.
Over the past week, following Trump’s extended hand for Iran’s leaders to “call me,” we’ve seen a consistent deescalation following weeks of dangerous escalation, including threats and counter-threats of military action by both sides.
Iranian President Hassan Rouhani reportedly said this week that the “road is not closed” on talks with the US if Washington drops the sanctions and returns to upholding the 2015 nuclear deal (JCPOA) – something not at all likely to happen.
via ZeroHedge News http://bit.ly/2Z03VQc Tyler Durden
Moore’s Law might be dead, but Swanson’s Law remains alive and well.
Swanson’s Law is the observation that solar PV panels tend to become 20 percent cheaper for every doubling of cumulative shipped volume. It’s the solar industry’s equivalent of Moore’s Law, which predicts the growing computing power of processors. But as the semiconductor industry has discovered, the observation that processing power increases exponentially at a two-year or so cadence has hit a physical limit.
Fortunately, Swanson’s Law is yet to come up against such a brick wall, and solar energy costs have continued to come down precipitously for decades–without exception. And now the renewable energy industry is about to cross a major milestone that will truly set it on the path towards becoming the world’s predominant energy source.
According to a report by the International Renewable Energy Agency (IRENA) cited by Reuters, beginning in 2020, electricity generated by solar PV and onshore wind is set to become consistently cheaper than the most cost-effective fossil fuel alternative, without subsidies.
In essence, more than 80 percent of solar PV and 75 percent of onshore wind power deployments to be commissioned next year will be cheaper than the cheapest new oil, natural gas, or coal-fired sources as per the report
This report has a pretty wide scope, having been compiled from IRENA’s own members, governments, consultancies, industry groups, business journals, auctions, and tenders. IRENA’s membership includes research institutes, project developers, utilities, and power companies across 160 countries, all of which contribute data for its Renewable Cost Database.
Swanson’s Law in Action
According to the IRENA report, the global weighted average cost of power generated using solar energy fell another 26 percent last year compared to the previous year. Bioenergy costs declined 14 percent, solar PV and onshore fell 13 percent, hydropower was 12 percent lower, while offshore wind was 1 percent cheaper last year. Costs of as low as $0.03-$0.04 per kilowatt hour (kWh) for solar PV and onshore wind have already become a reality in some parts of the globe.
IRENA estimates that the global average cost of electricity for solar PV will clock in at $0.055/kWh in 2020, then fall another 13 percent to $0.048/kWh in 2021. As for onshore wind, corresponding estimates are $0.049/kWh and $0.045/kWh in 2020 and 2021, respectively.
Road to 100% renewable energy
At the turn of the century, the idea that renewable energy could become a major source of energy during our lifetimes would have sounded incredible, even preposterous. After all, fossil fuels were just too dominant and much cheaper, while renewable energy faced seemingly insurmountable technical, cost, and integration challenges.
Yet the impossible could be about to happen.
Over the past decade, renewable energy has experienced transformative changes, enabling it to play a very significant role in our energy industry. The solar industry has in particular been a standout performer thanks to remarkable price declines by solar PVs and increasing grid flexibility.
According to data by the Solar Energy Industries Association (SEIA), U.S.’ cumulative operating solar PV capacity stood at 62.4 GW by the end of 2018–about 75 times the installed capacity just a decade ago– supplying 1 percent of the country’s electricity needs.
The future of renewable energy is looking brighter than ever. Energy company BP has projected that solar and other renewables will supply 30 percent of the world’s electricity needsby 2040 and up to 50 percent in regions such as Europe. That’s an upgrade from the firm’s last year forecast of 25 percent by 2040.
BP estimates that renewables will only take 25 years to go from 1 percent to 10 percent of global energy compared to 45 years for oil and more than 50 years for gas. The funny thing is, growth of solar has been consistently underestimated over the past decade, with actual installations outstripping projections. This means there’s a fair chance that even the most optimistic current projections might still fall short of reality a decade or two from now.
The repercussions for the global economy are bound to be enormous. Other than the potential to stop climate change in its tracks, renewable energy will likely negate at least some of the nearly $300 billion in annual energy subsidies provided by the world’s governments.
via ZeroHedge News http://bit.ly/2WaB0r6 Tyler Durden
Thanks to a ‘crumbling justice system’ which has forced courts prioritize crimes by seriousness, Canadian prosecutors are now letting petty criminals walk free for crimes such as shoplifting, minor assault and fraud, according to the CBC.
The president of Canadian Association of Crown Counsel says cases involving less serious crimes are either being dropped outright or shunted into restorative justice programs. He called it a regular occurrence, though specific numbers weren’t available.
“At some point, we have to make a decision: what crimes do you want us not to prosecute?” said Rick Woodburn, whose organization represents 7,500 Crowns across the country. –CBC
“And as you can see, it starts falling off the bottom. And sooner or later, we’re going to decriminalize, because we’re not prosecuting certain types of offences,” said Woodburn.
Due to a 2016 Canadian Supreme Court ruling known as the Jordan decision which protects offenders from unreasonable delays through the legal system, prosecutors are now focusing on major crimes such as homicides and sexual assaults.
In July 2016, the CSC overturned the drug convictions of Barrat Richard Jordan due to an unreasonable delay. Now – if a case is delayed by 18 months in provincial court, or 30 months in superior court, it’s considered unreasonable.
“Lower-end charges [are] being triaged and falling off our radar, because we have to keep an eye on the bigger cases of the homicides, sexual assaults, robberies,” said Woodburn, adding that the courts have now adopted a “triage system” to manage cases by seriousness of the alleged offense.
“When we look at our schedules, we have to make sure they’re falling within the Jordan timelines and that court time is not getting eaten up by a fraud under $200.”
Retailers are obviously very concerned
The Retail Council of Canada which represents over 45,000 retail merchants across the country has expressed grave concerns over recent developments.
“It’s really concerning for retailers, retailers of all sizes,” said the council’s Atlantic director, Jim Cormier. “The deterrent for theft and shoplifting in stores is, of course, often that there can be legal consequences.”
Last year, the retail council estimated that shoplifting accounts for up to $5 billion a year in losses for Canadian retailers. Cormier said shoplifting has an awful impact on retailers, and if it happens enough, it will cut into a company’s profits.
“Less profits means less ability to hire and pay staff. You know it means less tax revenue for the cities and towns in which these retailers are doing their business,” said Cormier.
Stephen O’Keefe, a consultant who helps companies with loss prevention, said it pains him when courts throw out shoplifting cases.
“When you have a company that experiences shrinkage in excess of their net profit, they have to shut their doors. We’ve experienced that in Canada over past years where we’ve had major brands, major retailers, who have closed their doors because they can’t absorb those shrinkage charges.” –CBC
In order to recoup their losses, some retailers are skipping criminal court completely – instead opting to take offenders to civil court, according to O’Keefe.
Woodburn insists that provincial governments as well as the federal government needs to set aside more money and resources for the criminal justice system – including more Crowns, judges, court staff and defense attorneys. Unless this happens, more delays and dropped cases are inevitable.
“Judges and justices are working themselves into the ground, Crowns are drowning in workload, defence lawyers are the same,” said Woodburn. “ou see them overworked. Staff and others are working overtime just to make sure people’s rights are not being infringed, and that as it is now is unsustainable.“
via ZeroHedge News http://bit.ly/2JPrSpT Tyler Durden
His lawyer suggests if the price is too high, he may be willing to take his friend, former president of Mexico, down with him…
Emilio Lozoya, a former chief executive of state oil company Petróleos Mexicanos (Pemex), was issued with an arrest warrant on Wednesday for financial irregularities, in particular his alleged dealings with scandal-plagued Brazilian construction firm Odebrecht.
Lozoya, formerly a one-time senior election campaign advisor to Mexico’s current president, Enrique Peña Nieto, is accused of receiving “tips” from Odebrecht worth some $10 million in exchange for his support in obtaining public work contracts. The money allegedly passed through shell companies in the British Virgin Islands before coming to rest in private bank accounts belonging to Lozoya in Switzerland, Liechtenstein, and Monaco.
Lozoya is one of countless public figures and business leaders in over a dozen Latin American and African countries, including Venezuela, Colombia, Argentina, Peru, Angola and Mozambique, to be accused of having his pockets lined by Brazil’s largest construction company. Some of those figures have even ended up in jail, including the former CEO of Odebrecht, Marcelo Odebrecht, and former Brazil president Luiz Inacio Lula da Silva, who is accused of accepting money from Odebrecht for his family’s vacation home.
The scandal has done extensive damage to Brazil’s state-owned oil behemoth Petrobras and has so far cost Odebrecht $2.6 billion in fines, $2.39 billion of which went to Brazil, $93 million to the U.S. and $116 million to Switzerland.
But in Mexico the investigation into Lozoya’s alleged acceptance of financial inducements seemed to be going nowhere — perhaps no surprise given the former attorney general, Raúl Cervantes Andrade, is a very close friend of President Peña Nieto, who is in turn a very close friend of Lozoya’s. But now that Mexico has a new government and a new attorney general that have pledged to combat corruption at Pemex, that friendship may be about to be seriously tested as Lozoya threatens to drag Peña Nieto with him through the dirt.
“Nothing in this country moved unless there were instructions from the president,” Lozoya’s lawyer, Javier Coello said on Wednesday, adding that the ministries of finance, economy and energy all had seats on the company’s board.
Lozoya was CEO of Pemex from 2012 to 2016, during which time the company underwent a dramatic deterioration in its already poor financial performance. By early 2016 the group’s total sales had plummeted by 21%, its annual operating losses had soared to an eight-decade high of almost $30 billion, and its total debt load had grown from $64 billion in 2012 to $106 billion now.
Obviously, this was not all one man’s fault. Between 2014 and mid-2016 the price of oil plummeted, crippling the finances of many oil producing economies. The Mexican peso lost almost a third of its value against the dollar during this period.
There are a host of other reasons for Pemex’s decline, including chronic mismanagement, lack of vision, severe budget cuts, shrinking oil reserves, lack of investment resulting in poor or obsolete infrastructure, negligence and the huge tax burdens the government imposed on it in the years preceding Mexico’s oil reforms, while lavishing foreign companies with massive fiscal incentives to invest in Mexican oil fields. But there’s an even bigger reason: corruption.
Simple, plain, white-collar corruption. Or what we like to call Petro-Plunder.
A perfect case in point was the decision by Pemex’s senior management to splash out $665 million on the repurchase of two fertilizer plants that Pemex had sold to private investors many years earlier, one of which was not even close to being operational — and in fact still isn’t — while the other one operated well below capacity. This week, Alonso Ancira, the owner of the Mexican steel company that sold the inoperative plant back to Pemex, was arrested in Spain for selling the firm at a price ten times higher than its real value.
Before the purchase of the fertilizer plants, international auditors warned Pemex’s board of their dire state, but the company went ahead with the purchase anyway. Such reckless lavishness was a constant feature of Lozoya’s tenure as CEO of Pemex. As Wilbur Matthews, founder of Texas-based Vaquero Global Investment, told Reuters, “The way they were conducting business in … [those] years did not make any sense at all.” Unless, of course, their prime, or sole, guiding principle was self-enrichment.
In the short space of just three and a half years the ranks of senior managers and administrators on the company’s payroll tripled. Despite Pemex’s growing losses those managers awarded themselves generous salary rises and lucrative perks, including three executive planes and a helicopter, and 911 company cars and SUVs.
The planes and helicopter, personally requested by Lozoya himself, were supposed to be deployed in the fight against the mass theft of oil by armies of amateur opportunists and some of Mexico’s most ruthless and organized drug gangs, which is now a multi-billion dollar business in Mexico; instead, they were reportedly used to shuttle Lozoya and his fellow executives to and from luxury resorts in Mexico and the United States, at public expense (since Pemex is state-owned).
Now, Lozayo, no longer protected by his connections to government, could finally pay a price for the white collar crimes he is alleged to have committed. And if his lawyer’s latest comments are any indication, if that price ends up being too high, he may be willing to take his friend, the former president of Mexico, down with him.
via ZeroHedge News http://bit.ly/2YYMCPA Tyler Durden
After Israel’s Prime Minister Benjamin Netanyahu on Thursday showed off a map of Israel he received from the White House signed by President Trump, the State Department has confirmed it has officially changed its maps to show the disputed Golan Heights as Israeli territory.
The Netanyahu photo immediately generated controversy, given the US president had written the word “Nice” beside an arrow pointing to the Golan, which appeared as part of Israel. The prime minister boasted this was one of the early “updated” versions which the president had autographed.
Via the AFP: Prime Minister Benjamin Netanyahu displays a map of Israel indicating the Golan Heights are inside the state’s borders, signed by US president Donald Trump on May 30, 2019.
Trump’s son-in-law and senior adviser Jared Kushner gifted him the map while touring the region ahead of a US-sponsored economic peace summit set to be held in Bahrain in late June, during which Trump’s so-called “Deal of the Century” plan will be unveiled, designed to achieve economic stability for the Palestinians as part of a peace plan.
The Palestinians under President Mahmoud Abbas have declared their intent to boycott the summit, saying they weren’t even consulted and don’t agree with what’s on the agenda. And crucially, China and Russia will also stay away in solidarity with the Palestinian side, but also presumably to flex their muscles in the Middle East.
“I know we have for sure… we updated the maps,”a State Department spokesperson said later in the day when pressed on if the US has formally changed the maps.
The US has published for the first time a map that shows the Golan Heights as Israeli territory 🇮🇱🇺🇸 pic.twitter.com/KoMwTfTXFN
The White House bestowed US formal recognition on the disputed Syrian-claimed Golan as Israeli territory in late March days after Trump issued a single bombshell tweet which announced“it is time” for the US to “fully recognize Israel’s sovereignty” over the Golan Heights.
After 52 years it is time for the United States to fully recognize Israel’s Sovereignty over the Golan Heights, which is of critical strategic and security importance to the State of Israel and Regional Stability!
Israel fully annexed the Golan Heights in 1981 after capturing it from Syria during the Six-Day War of 1967. The United Nations has never recognized Israeli annexation and settlement there, but has repeatedly condemned it — all of which has resulted in a Syria-Israel state of war ever since.
via ZeroHedge News http://bit.ly/2W1ZfaN Tyler Durden
So, you’re a barista with a problem – you took out $200K student loans to get that master’s degree from Gumbo State in “LGBTQ2#v& Experiences as Reflected in 17th Century Bolivian Folk Songs” and now you can’t find an uncaffeinated career.
Worse, those fascist monsters who you took money from based on your agreement to pay it back with interest now expect you to pay the money back with interest despite the fact that you really don’t feel like it anymore.
Well, I have a fresh solution to this crisis.
It’s an innovative strategy that totally and permanently resolves this problem in a new and exciting way.
Ready?
Here goes.
How about you pay your own student debt?
That’s it. It’s as elegant as it is simple. You. Pay. Your. Own. Debts.
If you follow this bold, one-step program – the one step is you paying your debts – then you will eventually be debt-free. And best of all, I won’t have to pay any of your debts.
See, a lot of Democrat politicians are promising “free college,” but what they really mean is “free for you.” Someone has to pay, and that someone is me, and I need to level with you.
I am not interested in paying for your college.
Now, some may call me “greedy” or “selfish” for not wishing to work and then have the money I earned taken from me to provide things to you that you want but did not pay for instead of being able to spend it – the “it” being the money I earned – on things that I want. I am okay with that. I would much prefer having people who fundamentally misunderstand the concepts of greed and selfishness call me “greedy” and “selfish” than subsidize their educations, educations that evidently did not include learning about basic concepts like greed and selfishness.
I understand that your priorities for my money may differ from mine, but it being my money, my priorities should take precedence. Here is a short, partial list of things that I prioritize for my money over paying off your student loan debts:
1. A lease on a sweet German sedan
2. A delicious tri-tip sandwich
3. A walk-in humidor
4. Guns and ammo
5. A pedicure for my wife
6. A pedicure for me
7. A pedicure for my fat corgi Bitey
8. Literally anything else but your student loan debt
Now, those who support the idea of taking my money to give it to someone else so that someone else can have things he, she or xe wants rarely put it so bluntly. It’s never, “Well, I want this education but I don’t want to do the things necessary to pay for it. I want you other people to do the things necessary to pay for it.” Instead, it’s always put in some other way that makes them taking our money to spend on things they want appear as a favor to us, the people expected to do the work.
For instance, sometimes they say that us working to give other people free stuff is an “investment.” Again with the not understanding what words means…
Traditionally, with an investment, one gets a return on investment. No one ever explains what my return on investment for Kaden’s Marxist Puppetry degree might be, other than an occasional latte which I would still have to pay for. I prefer that I instead determine how to invest my own money in order to benefit myself, which I do not see as unreasonable since it is my money. Which I earned by working.
This is the beauty of my one-step student loan plan. It puts all this controversy aside. Pay your own student loan off. That’s it. End of discussion. Now get to work.
Note that I am not pointing out how I managed to fund my own education without asking strangers to chip in – actually, without forcing them to chip in, because if you don’t pay your taxes designed to fund “free college” people with guns will come to haul you away. The argument that “I paid for mine so you should pay for you own” is valid, but we need not even reach it. No one should ever be forced to give other people free stuff. It’s my money, and that’s reason enough why you can’t have it.
I certainly understand that academia is a scam and that the government allows lending to people who foolishly undertake debts that they cannot pay. I would stop it all – no government participation in the student loan industry and full bankruptcy dischargeability for student debts. Of course, this would mean many less people taking loans, and therefore fewer college students. No lose to society there. This means many colleges would actually start having to compete for students, and even – gasp – lower prices. Sounds good to me, though they would scream bloody murder – colleges have gotten fat off of loan money and many schools would go under without this pot of suckers’ cash. Oh well.
Sure, academia is a grift, but you did sign on the line that is dotted. You took the money. And I say that you pay it back instead of me.
Now, I have read many tales of woe from people who have taken out huge student loans and have not taken jobs that pay enough to support paying them off. Yes, this is a problem. But it is your problem.
Often, after I suggest my patented student loan debt resolution system – which is, in its entirety, “Pay your own debts” – people who have taken out debts they can’t pay will ask me “Well, how do I do that?”
And my answer is, “I don’t know, because it’s not my problem. It’s your problem. You’re an adult, with at least one degree, so you figure it out.”
See, it’s important to allocate responsibility. It is not my responsibility to provide a solution to your problems. Your problems are your problems. You solve them.
Now, I can provide some helpful suggestions, if you wish to hear them. You won’t like them, because all of them recognize that your problem is your problem, not mine, and all of them require you to do things that you would probably prefer not to do. These suggestions include:
1. Get a better job. You can thank President Trump for the record low unemployment rate. Sure, you might not be able to continue at your dream job because it does not pay enough, but too bad. I’d rather pay for my own dreams.
2. Get a second job. Yeah, that will cut into your free time. Better that than paying your debt off cutting into mine.
3. Spend less on things you enjoy in order to pay off your debt faster. Again, I would prefer you to sacrifice to pay off your debt instead of for me to sacrifice to pay off your debt.
There are probably other ways to pay off your debt, but I am not going to spend my time thinking about them. After all, your student debt is your problem, so you spend time thinking about how to pay it off.
Now, let me once more provide you with my student debt solution.
Here it is again.
Pay your own student debt.
Creating a debtor class of over-educated, under-smart serfs with gender studies degrees is another Cloward-Piven-seque ploy to undermine our society in the pursuit of the socialist Utopia our garbage ruling class seeks to command. Of course, this would be a Utopia built of envy, incompetence and lies. If you want to see the reality of the country they dream of, then check out my action-packed yet super-snarky novels about the United States’ split into red and blue countries, People’s Republic, Indian CountryandWildfire. Liberals hate my novels. The sissy castaways from the Weekly Standard call them “Appalling.” So, obviously you’ll call them “Awesome.”
via ZeroHedge News http://bit.ly/2W4maCc Tyler Durden
