Killing Trump’s “Elephant In The Room”

Excerpted from Dilbert Creator Scott Adams' blog,

For months I have been saying mostly good things in this blog about Trump’s powers of persuasion, and mostly bad things about how the Clinton campaign does persuasion. And yet Clinton has a solid lead in the polls, assuming the polls are accurate. How can that be?

The quick answer is that Clinton’s side is totally winning the persuasion battle.

Confused?

Clinton’s side includes more than her campaign team. It also includes pundits, supporters on social media, and the liberal-leaning parts of the mainstream media. While the Clinton campaign itself has been notably weak with its persuasion game, the folks on her side have been viciously effective at branding Trump a crazy racist.

Nothing else in this election matters.

The persuasion kill shot against Trump is the accusation that Trump is a crazy racist. When you combine crazy and racist, you have a lethal persuasion cocktail. And that’s what the Clinton side has done.

The folks on social media tested lots of accusations against Trump until they found traction with the “crazy racist” theme in all its forms. And Clinton’s campaign team wisely amplified it.

Remember when social media was saying Trump wasn’t serious about running, or that he was a clown, or he was doing it for the money? Those accusations didn’t get traction, and Trump swept them away with his continued success.

But the accusations kept coming, one after another, until the combo of crazy and racist bubbled to the top, as measured by social media virality. The Clinton campaign recognized the crazy racist theme as the best approach and started hammering on it through a variety of “fear Trump” message. Fear works when facts do not. And “crazy racist” is totally scary. And totally working. You can test it for yourself by asking any anti-Trumper to list the top three reasons for disliking Trump. Some form of “crazy racist” will normally come out on top. Persuasion-wise, every other reason is just noise.

The facts don’t matter. Facts never matter. What matters is that the “crazy racist” label picked up enough confirmation bias to stick like tar. The Clinton team won the month of June. And unless something changes, Clinton will saunter to an easy victory in November.

But remember also that Trump always makes aggressive first offers before negotiating to the middle. I predicted a softening of Trump’s immigration proposals and you see that happening now, right on schedule. Those changes in his proposals won’t be enough to change the election results because facts and policies are meaningless for persuasion. Trump would have to do far more to shake off the crazy racist label.

I now update my prediction of a Trump landslide to say that if he doesn’t give a speech on the topic of racism – to neutralize the crazy racist label – he loses. There is nothing he can do with policy tweaks, debate performances, advertising, interviews, or anything else that would remove the tarring he received from the Clinton side. But a persuasive speech could do it.

How?

Trump needs to convince Americans of all types that he loves them and plans to protect them from outside forces. Here’s a simple and persuasive formulation for that:

Example: “If you are an American citizen – of any color, ethnicity, gender, or religion – I love you, and I’ll fight for you. I support the melting pot of America, and I will fight to protect each of you from crime, terrorism, and economic risks.”

That’s the basic idea. Talking about policies won’t be enough. To become president, Trump has to embrace the melting pot. And he has to embrace the value of American diversity, loudly.

If Trump doesn’t directly address the elephant in the room – the accusation that he is a crazy racist – he loses. If he makes a case for the value of American diversity – and does it persuasively – he wins in a landslide.

I expect him to do the latter.

Read more here…

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Health Care Costs Are Rising Sharply, And It Will Get Much Worse

Submitted by Mish Shedlock of MishTalk

 

Inquiring minds are diving into Kaiser Family Foundation reports on health care. The charts and stats are not pretty, and they are sure to get worse.

Health Care Expenditures 1960-2014

The above chart from the Kasiser Family Foundation report Health Spending Explorer.

Deductible Spending Soars

Between 2004 and 2014, average payments for deductibles and coinsurance rose considerably faster than the overall cost for covered benefits, while the average payments for copayments fell. As can be seen in the chart below, over this time period, patient cost-sharing rose substantially faster than payments for care by health plans as insurance coverage became a little less generous.

The above chart from the Kasiser Family Foundation report Cost Sharing Payments Increasing Rapidly Over Time.

The above via Kaiser Family Tweet.

Huge Cost Increases Coming

Those charts hugely understate the problem. All date to 2014.

In January, CNSNews reported CBO: Obamacare Costs to Increase in 2016 As Millions More Get Subsidized Insurance.

Taxpayers will have to shell out an estimated $18 billion more to subsidize Obamacare in 2016 despite lower than expected enrollment in the health care exchanges, according to a forecast by the non-partisan Congressional Budget Office (CBO).

 

In its latest 10-year economic forecast, CBO predicted that 13 million Americans would purchase health insurance through the Obamacare exchanges in 2016, with 11 million of them receiving government subsidies to help pay for their premiums.

 

But that figure is 40 percent lower than the 21 million enrollees CBO predicted last year would sign up.

 

Despite fewer than expected enrollees, the cost of running the exchanges will increase $18 billion, according to the CBO’s Budget and Economic Outlook: 2016 to 2026.

November Surprise

Many consumers will see large rate increases for the first time Nov. 1 — a week before they go to the polls.

Politico comments on Obamacare’s November Surprise.

The last thing Democrats want to contend with just a week before the 2016 presidential election is an outcry over double-digit insurance hikes as millions of Americans begin signing up for Obamacare.

 

But that looks increasingly likely as health plans socked by Obamacare losses look to regain their financial footing by raising rates.

 

Just a week after the nation’s largest insurer, UnitedHealth Group, pulled out of most Obamacare exchanges because it anticipates $650 million in losses this year, Aetna’s CEO said Thursday that his company expects to break even, but legislative fixes are needed to make the marketplace sustainable.

 

“I think a lot of insurance carriers expected red ink, but they didn’t expect this much red ink,” said Greg Scott, who oversees Deloitte’s health plans practice. “A number of carriers need double-digit increases.”

 

Republicans are already pouncing on UnitedHealth’s decision as proof the law is unworkable. “You’re seeing the beginning of the so-called insurance death spiral,” Sen. John Barrasso (R-Wyo.) said last week.

Related Articles

Also consider Obamacare Redistribution and the Disincentive to Work.

Thanks to Obamacare, it is frequently better for a middle class family to get no raise than even a decent sized raise.

The wage point varies, but many will say “Dear employer, please don’t pay me more. It will cost me a lot of money”.

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Futures Spike After Banks Unveil Tens Of Billions In Buybacks

Betwen BofA, Citi, JPMorgan, and now Goldman, (and excluding MS for now), announced buybacks totalling over $24 billion have sent US equity futures spiking after hours.

  • Bank of America Authorizes $5b Buyback; Boosts Div to 7.5c-Share
  • Citigroup Plans $8.6b Buyback; Lifts Qtr Div to 16c From 5c
  • JPMorgan Chase Plans $10.6b Buyback, Maintains qtr Div at 48c/shr
  • Goldman Sachs plans buybacks of stock, boosts quarterly dividend

Futures are up across the board… no matter what exposure to financials they have…

 

As The S&P spikes…

 

Some context…

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Fed Fails Deutsche Bank And Santander In Stress Test, As 31 Other Banks Unleash Dividend, Buyback Frenzy

One week ago, the Fed released the first part of its annual solvency stress test, which found that all 33 bank participants had passed, and would not need additional capital even in a severely adverse scenario which looked as follows:

The severely adverse scenario is characterized by a severe global recession accompanied by a period of heightened corporate financial stress and negative yields for short-term U.S. Treasury securities. In this scenario, the level of U.S. real GDP begins to decline in the first quarter of 2016 and reaches a trough in the first quarter of 2017 that is 6.25 percent below the pre-recession peak. The unemployment rate increases by 5 percentage points, to 10 percent, by the middle of 2017, and headline consumer price inflation rises from about 0.25 percent at an annual rate in the first quarter of 2016 to about 1.25 percent at an annual rate by the end of the recession.  Asset prices drop sharply in the scenario, consistent with the developments described above. Equity prices fall approximately 50 percent through the end of 2016, accompanied by a surge in equity  market volatility, which approaches the levels attained in 2008. House prices and commercial real estate prices also experience considerable declines, with house prices dropping 25 percent through the third quarter of 2018 and commercial real estate prices falling 30 percent through the second quarter of 2018.

 

Today, moments ago the Fed released the second part of its stress test, the Comprehensive Capital Analysis and Review (CCAR), one which gives banks the green light (or in some cases not) to return capital to shareholders.

What it found is that what Morgan Stanley conditionally passed the stress test and was “not objected to” it is required to “address certain weaknesses and resubmit its plan by the end of 2016.” The Fed also found that Deutsche Bank and Santander’s US units had failed the stress tests. This is what it said: “The Federal Reserve Board on Wednesday announced it has not objected to the capital plans of 30 bank holding companies participating in the Comprehensive Capital Analysis and Review (CCAR). The Board objected to two firms’ plans. One other firm’s plan was not objected to, but the firm is being required to address certain weaknesses and resubmit its plan by the end of 2016.”

Who passed without question? Some 30 companies:

The Federal Reserve did not object to the capital plans of Ally Financial, Inc.; American Express Company; BancWest Corporation; Bank of America Corporation; The Bank of New York Mellon Corporation; BB&T Corporation; BBVA Compass Bancshares, Inc.; BMO Financial Corp.; Capital One Financial Corporation; Citigroup, Inc.; Citizens Financial Group; Comerica Incorporated; Discover Financial Services; Fifth Third Bancorp; Goldman Sachs Group, Inc.; HSBC North America Holdings, Inc.; Huntington Bancshares, Inc.; JP Morgan Chase & Co.; Keycorp; M&T Bank Corporation; MUFG Americas Holdings Corporation; Northern Trust Corp.; The PNC Financial Services Group, Inc.; Regions Financial Corporation; State Street Corporation; SunTrust Banks, Inc.; TD Group US Holdings LLC; U.S. Bancorp; Wells Fargo & Company; and Zions Bancorporation. M&T Bank Corporation met minimum capital requirements on a post-stress basis after submitting an adjusted capital action.

Morgan Stanley, however, did not do quite as well, and the while the Fed did not object to the capital plan of Morgan Stanley, it “is requiring the firm to submit a new capital plan by the end of the fourth quarter of 2016 to address certain weaknesses in its capital planning processes.”

Finally, “the Fed objected to the capital plans of Deutsche Bank Trust Corporation and Santander Holdings USA, Inc. based on qualitative concerns. The Federal Reserve did not object to any capital plans based on quantitative grounds.”

Ironically, just moments after the Fed announced that Morgan Stanley may have deficiencies, it announced that it is boosting its dividend to $0.20/share and will repurchase up to $3.5 billion in stock, adding that it sees itself “fully meeting requirements within the timeline.”

MS stock dipped at first, then ripped right back into the green.

 

And with the Fed out of the way, all other banks have unleashed a veritable feeding frenzy of dividend hikes and buybacks.

  • Bank of America Authorizes $5b Buyback; Boosts Div to 7.5c-Share
  • Citigroup Plans $8.6b Buyback; Lifts Qtr Div to 16c From 5c
  • JPMorgan Chase Plans $10.6b Buyback, Maintains qtr Div at 48c/shr
  • Huntington Bancshares to Boost Qtr Div. to 8c From 7c/Shr
  • U.S. Bancorp to Buy Back $2.6b of Shares, Boosts Div. by 9.8%
  • Zions Bancorp Plans to Boost Dividend, Buyback
  • Citi to buy back up to $8.6 billion in shares, boost dividend to 16c/share
  • State Street to Buy Up to $1.4b; Boosts Dividend to 38c Vs 34c
  • Banco Bilbao Vizcaya Plan Includes Common Dividends of $120m
  • Discover Financial to Buy Back Up to $1.95b of Stock, Boost Div. to 30s/shr from 28c.

We expect many more to boost their dividend and buyback plans before the night is over. And since all of these transactions will be debt-funded, and since other banks will pocket the commission, expect a feeding frenzy of cross bank revenue thanks to yield starved investors who have no choice but to give banks their money all as a result of the Fed’s policies which today pushed the 30Y just shy of record low yields.

The full CCAR report can be found here.

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August 15th – The Date Which Will Live In Monetary Infamy

Authored by 720Global's Michael Lebowitz via RealInvestmentAdvice.com,

Before reading this article we highly recommend reading “The Death of the Virtuous Cycle” to provide better context.

July 4th – June 6th – September 11th August 15th

You likely associated the first three dates above with transformative events in U.S. history. August 15th, however, may have you scratching your head.

August 15, 1971 was the date that President Richard Nixon shocked the world when he closed the gold window, thus eliminating free convertibility of the U.S. dollar to gold. This infamous ‘new economic policy’, or “Nixon Shock”, thereby removed the requirement that the U.S. dollar be backed by gold reserves. From that fateful day forward, constraints were removed that previously hindered the Federal Reserve’s (Fed) ability to manage the U.S. money supply. Decades later, slowing economic growth, nonexistent wage growth, growing wealth disparity, deteriorating productivity growth and other economic ills lay in the wake of Nixon’s verdict.

The Transformation of the Federal Reserve and Alan Greenspan

With the stroke of President Nixon’s pen a new standard of economic policy was imposed upon the American people and with it came promises of increased economic growth, high levels of employment and general prosperity. What we know now, almost 50 years later, is that unshackling the U.S. monetary system from the discipline of a gold standard, allowed the Fed to play a leading role in replacing the Virtuous Cycle with an Un-Virtuous Cycle. Eliminating the risk of global redemption of U.S. dollars for gold also eliminated the discipline, the checks and balances, on deficit spending by the government and its citizens. As the debt accumulated, the requirement on the Fed to drive interest rates lower became mandatory to enable the economic system to service that debt.

In this new post-1971 era, the Fed approached monetary policy in a pre-emptive fashion with increasing aggression. In other words, the Fed, more often than not, forced interest rates below levels that would likely have been prevalent if determined by the free market. The strategy was to unnaturally mitigate even minor and healthy economic corrections and to encourage more public and private borrowing to drive consumption, indirectly discouraging savings. The purpose was to create more economic growth than there would otherwise have been.

This new and aggressive form of monetary policy is epitomized by the transformation of Federal Reserve Chairman Alan Greenspan. Greenspan came into office in 1987 as an Ayn Rand disciple, a vocal supporter of free-markets. Beginning with the October 19, 1987 “Black Monday” stock market crash, however, he began to fully appreciate his ability to control interest rates, the money supply and ultimately economic activity. He was able to stem the undesirable effects of various financial crises, and spur economic growth when he believed it to be warranted. Greenspan converted from a free market activist, preaching that markets should naturally set their own interest rates, to one promoting the Fed’s role in determining “appropriate” levels of interest rates and economic growth.

In 2006, after 18 years as Chairman of the Federal Reserve and nicknamed “The Maestro”, he retired and handed the baton to Ben Bernanke and Janet Yellen, both of whom have followed in his active and aggressive monetary policy ways.

Proof

The Fed’s powerful effect on interest rates made it cheaper for households and government to borrow and spend, and therefore debt was made more attractive to citizens and politicians. Personal consumption and government spending are the largest components of economic activity, accounting for approximately 70% and 20% of GDP respectively.

The following graph illustrates the degree to which interest rates across the maturity curve became progressively more appealing to borrowers over time. The graph below shows inflation-adjusted or “real” U.S. Treasury interest rates (yields) to provide a clear comparison of interest rates through various inflationary and economic periods. Since 2003, many of the data points in the graph are negative, creating an environment which outright penalizes savers and benefits borrowers.

720Global-Chart1-062916

The next graph tells the same story but in a different light. It compares the Federal Funds rate (the Fed controlled interest rate that banks charge each other for overnight borrowing) to the growth rate of economic output (GDP). This comparison is based on a theory proposed by Knut Wicksell, a 19th century economist. In the Theory of Interest (1898) he proposes that there is an optimal interest rate. Any interest rate other than that rate would have negative consequences for long term economic growth. When rates are too high and above the optimal rate, the economy would languish. Conversely, lower than optimal rates lead to over-borrowing, capital misallocation and speculation eventually resulting in economic hardships. To calculate the optimal rate, Wicksell used market rates of interest as compared to GDP.

720Global-Chart2-062916

In order to gauge the direct influence the Fed exerted on interest rates within Wicksell’s framework we compare the Fed Funds rate to GDP.  Like the prior graph, notice the declining trend pointing to “easier” borrowing conditions. Additionally, note that since 2000 the spread between Fed Funds and GDP has largely been negative. As the spread declined, borrowers were further lead to speculation and misallocated capital, exactly what Wicksell theorized would occur with rates below the optimal level. The tech bubble, real-estate bubble and many other asset bubbles provide supporting evidence to his theory.

The Smoking Gun

The graphs above make a good case that the Fed has been overly-aggressive in their use of interest rate policy to increase the desire to borrow and ultimately drive consumption. We fortify this claim by comparing the Fed’s monetary policy actions to their congressionally set mandate to erase any doubt you may still have. The following is the 1977 amended Federal Reserve Act stating the monetary objectives of the Fed.  This is often referred to as the dual mandate.

“The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economy’s long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices and moderate long-term interest rates.”

To paraphrase – the Fed should allow the money supply and debt outstanding to grow at a rate matching the potential economic growth rate in order to help achieve their mandated goals.

Since 1977, the year the mandate was issued, the annualized growth rate of credit and the monetary base increased at over twice the rate of the economy’s potential growth rate (productivity + population growth).  The two measures rose annually 42% and 65% respectively faster than actual economic growth.

Commensurate is not a word we would use to describe the relationships of those growth rates to that of the economy’s potential growth rate!

The Hangover

In a Virtuous Cycle, saving and investment lead to productivity gains, increased production growth and ultimately growing prosperity which then further perpetuates the cycle. In the Un-Virtuous Cycle, debt leads to consumption which leads to more debt and more consumption in a vicious self-fulfilling spiral.  In the Un-Virtuous Cycle, savings, investment and productivity are neglected. Declining productivity growth causes a decline in the potential economic growth rate, thus requiring ever-greater levels of debt to maintain current levels of economic growth. This debt trap also requires ever lower interest rates to allow the growing mountain of debt to be serviced.

With almost 50 years of history there is sufficient data to judge the effects of the Fed’s monetary policy experiment. The first graph below highlights the exponential growth in debt (black line) which coincided with the decline in the personal savings rate (orange) and the Fed Funds rate (green).

720Global-Chart3-062916

As the savings rate slowed, investment naturally followed suit and, as the Virtuous Cycle dictates, productivity growth declined. The graph below highlights the decline in the productivity growth rate. The dotted black line allows one to compare the productivity growth rate prior to the removal of the gold standard to the period afterwards. The 10-year average growth rate (green) also highlights the stark difference in productivity growth rates before and after the early 1970’s. Please note, the green line denotes a ten-year average growth rate. Recent readings over the prior two years and other measures of productivity are very close to zero.

720Global-Chart4-062916

Over the long term, economic growth is largely a function of productivity growth. The graph below compares GDP to what it might have looked like had the productivity growth trend of pre-1971 continued.  Clearly, the unrealized productive output would have gone a long way toward keeping today’s debt levels manageable, incomes more balanced across the population and the standard of living rising for the country as a whole.

720Global-Chart5-062916

The graphs below show the secular trend in economic growth and the lack of real income growth over the last 20 years.

720Global-Chart6-062916

720Global-Chart7-062916

A Feeble Rebuttal

Some may contend that debt was not only employed to satisfy immediate consumption needs but also used for investment purposes. While some debt was certainly allocated toward productive investment, the data clearly argues that a large majority of the debt was either used for consumptive purposes or was poorly invested in investments that were unsuccessful in increasing productivity. Had debt been employed successfully in productivity enhancing investments, GDP and productivity would have increased at a similar or greater pace than the rise in debt.  In the 1970’s $1.66 of new debt created $1.00 of economic growth. Since that time, debt has grown at three times the rate of economic activity and it now takes $4.47 of new debt to create the same $1.00 of economic growth.

 

Summary

August 15, 2016 will mark the 45th anniversary of President Nixon’s decision to close the gold window. U.S. citizens and the government are now beholden to the consequences of years of accumulated debt and weak productivity growth that have occurred since that day. Now, seven years after the end of the financial crisis and recession, these consequences are in plain sight. The Fed finds themselves crippled under an imprudent zero interest rate policy and unable to raise interest rates due fear of stoking another crisis.  Worse, other central banks, in a similar quest to keep prior debt serviceable and generate even more debt induced economic growth, have pushed beyond the realm of reality into negative interest rates. In fact, an astonishing $10 trillion worth of sovereign bonds now trade with a negative yield.

The evidence of these failed policies is apparent. However one must consider the basic facts and peer beyond the narrative being fed to the public by the central bankers, Wall Street, and politicians. There is nothing normal about any of this. It therefore goes without saying, but we will say it anyway – investment strategies based on historic norms should be carefully reconsidered.

*  *  *

Michael Lebowitz of 720 Global Research is an investment consultant, specializing in macroeconomic research, valuations, asset allocation, and risk management. 

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From Brexit Wounds To Buying Panic (In Bonds & Stocks)

Record low bond yields, Brexit uncertainty, and the biggest crash in home sales in 6 years… BTFD you idiot!!

But "we're halfway there…"

 

Since the Brexit vote, UK's FTSE 100 is now positive and by far the world's best performing stock market since Thursday's close…

 

Volume has been non-existent during the bounce…

 

US equities have retraced almost two-thirds of their losses (near Fib61.8% retrace in Dow and S&P…notice that both are now perfectly back to the Brexit bounce highs from Monday

 

Leaving Trannies and Small Caps worst since pre-Brexit still but bouncing back…

 

With futures showing better the bounce to some supportive levels…

 

And US equities completely decoupled from bonds, bullion, and cable…

 

Amid a massive short squeeze…biggest since 2011

 

VIX has collapsed in the last 3 days – holding support around the 50- and 100-day moving averages…

 

With the VIX hedge unwinds driving the fear index below its pre-Brexit lows…

 

Just in case you were not conmpletely convinved of what fucking farce this market is – here is NKE, which had a dismal report last night just had its best day in 4 months – swinging from down over 6% to up almost 3% (as index buyers lifted The Dow member)…

 

But while bank stocks have bounced ahead of CCAR, they remain down notably post-Brexit…

 

Treasury yields were mixed today… as 2Y continued to underperform the rest of the curve… but note that the longer-end underperformed late on today as chatter of rate-locks hitting the market ahead of a heavy calendar expected…

 

Driving 2s30s to its flattest since Jan 2008 (recession) but bank stocks didn't care…

 

But 10Y and 30Y neared record low closes…before bouncing late on (with 10Y >1.50%)

 

The USD Index slipped lower again…

 

As the post-Brexit Cable bounce continues…Despite being down hard from the 1.50 pre-Brexit level – the bounce has been imporessive off the 1.31 lows…seems like 1.40 brexit bounce may be target but today seemed to run out of steam quickly..

 

Against the weaker USD, commodities all rose on the day with PMs doing well early and then crude melting up later on…

 

Silver topped Brexit highs…

 

Following API last night and DOE today, the machines had only one thing in mind… on yet another NYMEX close ramp

 

Charts: Bloomberg

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For Those Who Still Care About Fundamentals, A Troubling Chart

We realize that fundamental analysis, especially in light of recent events, is dead and buried, but for those few who still keep track, here is a troubling chart showing how fast the S&P’s cash flow is sinking relative to its debt load. As Bank of America helpfully points out, the USA is now trading at 13x EV/EBITDA, a 90th percentile since 1995.

And for those equity analysts who have not encountered such arcane concepts as cash flow and EBITDA, here is a table from Goldman showing that the median stock is currently trading in the 99th percentile of historical valuations.

The good news, as we noted up top, is that when it comes to momentum ignition higher (thanks to HFTs) and multiple expansion (thanks to central banks) none of this actually matters.

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Is This Where All Those Companies “Leaving England” Will Go

Several years ago, Hollande tried – and failed – to make French socialism that much better by instituting a 75% tax on millionaires. It didn’t last long.

Now in the aftermath of Brexit, the French leader is pushing to make Paris into the capital that will benefit the most as companies may (or may not) seek to depart from London as part of the UK’s separation from the UK. To do this Les Echos is reporting that the French leader is proposing new tax cuts for the middle class worth up to €2 billion, as well as adapting rules “to make Paris a more attractive financial center.”

  • FRANCE’S HOLLANDE SAYS WE MUST ADAPT OUR RULES, INCLUDING ON TAXES, TO MAKE PARIS A MORE ATTRACTIVE FINANCIAL CENTRE – LES ECHOS
  • FRANCE’S HOLLANDE SAYS CONSIDERING NEW TAX CUTS FOR MIDDLE CLASSES WORTH A MAXIMUM OF 2 BLN EUROS
  • FRANCE’S HOLLANDE WILL USE CONSTITUTIONAL AMENDMENT TO PUSH THROUGH CONTESTED LABOUR LAW IF NEEDED

It is unclear how the French proposal will pass EU regulations which have found the French fiscal situation to already be in dire straits.

Furthermore, as companies evaluate whether to depart the UK for France, they may want to consider scenes such as the following showing relentless local protests, now stretching for months, against the much maligned anti-labor reform.

Finally, the entire premise whther anyone will leave the UK may have to be reevaluated. Earlier, both Goldman Sachs and Morgan Stanley denied speculation they are poised to shift London-based staff and operations to Frankfurt as soon as Britain’s divorce proceedings from the European Union formally begin. “We have not made any changes to our real estate requirements in Frankfurt as a result of the referendum result,” Goldman said in a statement issued on Wednesday.  Morgan Stanley also moved to quell chatter it was planning to relocate to the German financial hub when the UK government evokes Article 50 — the first official step in its disentanglement from the 28-nation bloc.

And then moments ago, General Motors chief economist Mustafa Mohataram said the automaker sees no significant impact to the U.S. auto market from UK voters’ recent decision to exit the European Union. In fact, he added, GM may increase UK auto production if the British pound remains devalued over the longer term.

Was all that fearmongering for nothing?

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UK Police Call Emergency Meetings After Explosion In Hate Crimes After Brexit

Submitted by Michaella Whitton via TheAntiMedia.org,

U.K. police chiefs have called emergency meetings following an explosion in hate crimes across the country. The horrifying spike in racist attacks, which have come in the wake of Britain’s vote to leave the European Union, has prompted police to call for enhanced sentencing for those convicted of such disorder.

Scores of incidents of hate crime and racial abuse have been recorded since last week’s Brexit vote. Attacks have included the verbal targeting of those on the street who appear visibly different, an increase in immigration rhetoric, violent assaults, and vandalism on buildings. A startling Facebook album called “Worrying Signs” has been created to document incidents in which people have allegedly been targeted with racist assaults and xenophobic comments. It includes details of attacks on Polish community centres, as well as instances of people being called “Paki’s” and told to “f*ck off back to your own country.”

Earlier this week, a man was injured when a petrol bomb was thrown into a Halal food store in Walsall. The following day, three people were arrested in connection with an incident on a tram in Manchester. The incident provoked horror from the public after a video that showed the men telling another passenger to “get back to Africa” while throwing beer on him was shared widely on social media.

Baroness Warsi, the first Muslim woman to be elected as a cabinet minister in the U.K., said earlier in the week the atmosphere on the street is not good. Some might argue her comments were an understatement, but the former government minister called on those in charge of the Leave campaign to admit the campaign has been “divisive” and “xenophobic.” Claiming some of those being abused have been in Britain for up to five generations, she added:

“I’ve spent most of the weekend talking to organisations, individuals and activists who work in the area of race hate crime, who monitor hate crime, and they have shown some really disturbing early results from people being stopped in the street and saying ‘Look, we voted Leave, it’s time for you to leave.’”

Although racist assaults since Friday have soared, hate crime in the U.K. is nothing new. Last year, a report by anti-Muslim hate monitoring group, Tell Mama, showed there was a 326% increase in hate crimes in 2015. That said, in four days, the number of crimes reported to police has escalated 57% and prompted accusations the Brexit vote simply legitimised the prejudices of people. Similarly, former deputy leader of the Labour party, Harriet Harman, said the leaders of the Brexit campaign have engendered an atmosphere where some people believe it is now open season for racism and xenophobia.

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