Boeing Suppliers Slide As 737 Max Production Halted
Shares in Boeing slid this week after the company announced on Monday afternoon that it would suspend production of its best selling plane, the 737 Max. The production halt has rippled down the supply chain, sent shares of some suppliers tumbling on Tuesday.
Analysts told Reuters this is one of the biggest assembly-line halts in several decades, could continue to cost Boeing $1 billion per month despite the production freeze.
“Each supplier will likely be missing about 200 deliveries versus original plans, with about 80% of the shortfall coming in 2020 and the remainder in 2021,” Melius Research analyst Carter Copeland wrote in a note.
British engineering firm Senior Plc, whose biggest client is Boeing, saw shares plunge 11% on the production news.
Shares in France’s Safran SA dipped 1.50%, while General Electric was flat, both companies are in a joint venture to produce engines for the 737 Max.
Copeland said U.S.-based Spirit, which manufactures the 737 Max’s fuselage, is one of the most exposed suppliers, deriving at least half of its sales from Boeing.
“We assume (Spirit) will elect to stop production and furlough employees at the cost of $0.40 (per share) per month of the stoppage,” Copeland said.
Safran warned that if 737 Max groundings lasted through 2020, its cash conversion rate could fall below its targeted 50 to 55% range of recurring operating income.
General Electric warned that extended groundings of the plane would reduce cash flow by $1.4 billion next year.
Canaccord Genuity analyst Ken Herbert said, “some step-down in production across the supply chain” will be seen as Boeing absorbs a lot of the financial impact to keep the chain together through the halt.
Other suppliers who’ve seen these shares fall on Tuesday include United Technologies Corp -.77%, Arconic Inc -1%, Ducommun Inc -1.50%, Hexcel Corp -3%, Astronics Corp -1.3%, Melrose Industries -1.1%, and Meggitt -1.5%.
Boeing employs more than 12,000 workers at its 737 assembly factory in Renton, Washington. There is no word on any layoffs as of yet.
Firms that have 10 to 20% of their annual sales exposed to 737 Max production could enact cost-cutting measures in 1Q20 — this would likely be in the form of furloughs.
As for the broader economy, the impact of the halt could be seen as a temporary headwind for GDP in the coming quarters.
Bloomberg Economics researcher Andrew Husby indicated that the 1Q20 impact of the halt could shave off one percentage point from 1Q20 GDP.
JPMorgan Chase & Co. chief U.S. economist Michael Feroli said Tuesday that the halt could subtract around .5 percentage point from 1Q20 GDP.
With manufacturing already in a recession, could the Boeing halt be a shock that ripples through the economy?
Manafort Hospitalized After ‘Cardiac Event’ In Prison
Paul Manafort has been hospitalized following a reported ‘cardiac event’ in prison. The 70-year-old former Trump campaign chairman and lobbyist is currently serving a seven-year sentence, primarily for for financial crimes related to his work overseas.
Manafort was scheduled for a Wednesday court appearance, however his attorney was informed that he would be unable to appear, according to ABC News, which notes that in 2018, Manafort appeared in court in a wheelchair – citing serious medical conditions related to his diet.
According to sources, he is stable and could be released soon.
McConnell: Senate Won’t Help ‘Sloppy Schiff’s’ Case, May Dismiss Impeachment After Opening Arguments
With the House about to pass articles of impeachment against President Trump, and the Senate firmly settled on a speedy, Biden-less ‘trial’ to acquit, Senate Majority Leader Mitch McConnell (R-KY) suggested in a Tuesday morning speech that he will move to dismiss the articles immediately following opening arguments.
Responding to Monday demands by Senate minority leader Chuck Schumer (D-NY) that current and former White House officials testify, McConnell argued that Schumer was trying to make “Chairman Schiff’s sloppy work more persuasive,” according to Breitbart.
McConnell accused Schumer of going straight to the news media with his proposals rather than speaking to him in person, as Senate leaders had done in the past.
He also noted that Schumer had misquoted the Constitution. The Democrat leader had claimed the Constitution gave the Senate “sole Power of Impeachment,” whereas Article I, Section 3 actually states, “The Senate shall have the sole Power to try all Impeachments.”
“We don’t create impeachments over here … we judge them,” he declared.
It was the House’s role to investigate, and to build a case. “If they fail, they fail! It’s not the Senate’s job to leap into the breach to search desperately for ways to get to guilty. That would hardly be impartial justice.”
The Senate would not, he said, participate in “new fact-finding” that House Democrats were “too impatient” to pursue. –Breitbart
In other words, McConnell won’t allow the Trump administration to defend itself in the court of public opinion, or get to the bottom of alleged corruption by the Bidens, as Trump will likely be acquitted either way. He also won’t let Schumer take another bite at the anti-Trump apple.
McConnell agreed with Schumer that the Senate follow the same procedure as they used with Bill Clinton in 1999 – though he said Schumer had since departed from his own suggestion. The Republican leader then noted two procedural motions brought at the start of Clinton’s trial – one which allowed for a motion to dismiss – which Schumer supported for Clinton, and the other guiding how the trial would proceed.
The Senate Majority Leader slammed the impeachment effort, warning that Democrats are setting a terrible precedent for the “constitutional remedy of last resort.”
“By any ordinary legal standard, what House Democrats have assembled would appear to be woefully, woefully inadequate to prove what they want to allege,” he said, adding “we will invite future Houses to paralyze future Senates with frivolous impeachments at will.”
Top US General Reveals North Korea’s Likely ‘Christmas Gift’ For Washington
At the start of this month North Korea declared it would send a “Christmas gift” to the United States but without specifying what the potentially menacing ‘surprise’ gift could be. The only qualification was that the ‘gift’ would be determined based on White House responsiveness and concessions before a Pyongyang self-imposed end of year deadline for talks.
But now a top US Air Force general says he knows what to expect: the “Christmas gift” to Washington will be a long-range ballistic missile test, he said according to The Hill.
“What I would expect is some type of long-range ballistic missile would be the gift. It’s just a matter of does it come on Christmas Eve, does it come on Christmas Day, does it come after the New Year,” Gen. Charles Brown, commander of Pacific Air Forces and air component commander for U.S. Indo-Pacific Command said Tuesday.
Prior missile test, via KCNA/Reuters
He did additionally admit “range” of possibilities, however, and held out hope that tensions would not escalate. “I think there’s also the possibility that the self-imposed moratorium [on long-range tests] may go away and nothing happens right away. [North Korean leader Kim Jong Un] announces it but then doesn’t shoot.”
Ri Thae Song, a first vice minister at the North Korean Foreign Ministry working on US affairs, declared two weeks ago that “The dialogue touted by the US is, in essence, nothing but a foolish trick hatched to keep the DPRK bound to dialogue and use it in favor of the political situation and election in the US.”
He then warned: “It is entirely up to the US what Christmas gift it will select to get.” This after N.Korea test-fired two short-range missiles on Thanksgiving Day, and then one just days ago, in a now familiar pattern of doing threatening things on American holidays.
Illustration via Bulletin of the Atomic Scientists
Pyongyang is now also warning it will take “new path” should denuclearization talks fail, which most analysts think will be a return to intercontinental ballistic missile (ICBM) or nuclear tests.
The north has launched dozens of “short-range” missiles since May, but has largely stuck to its word that it would refrain from ICBM tests, despite occasional disputes about whether the nature of some of the tests.
“We’re watching it very closely,” Trump said Monday, noting he would be “disappointed” if that happens.
I have made this reference before, but looking at euphoric markets I am again reminded of comedian Caroline Aherne as fake TV chat-show host Mrs Merton asking glamorous blonde Debbie McGee of her very short, plain, hair-piece wearing husband: “So what attracted you to the millionaire Paul Daniels?”
Indeed, “So what attracted you to central-bank-liquidity-driven markets?” Because where would very short, plain, wig-wearing assets be without the Fed throwing in hundreds of billions in repo operations and NOT-QE, and China going down the same old unsustainable debt path to juice GDP for 2-3 quarters? Feeling pretty unloved, one would guess – and probably very shorted. Yet having studiously failed to learn that this extra-liquidity doesn’t drive sustainable recoveries, or prevent socio-economic unrest–in fact it drives it–we are set for a whole lot more from central banks, no doubt.
Of course, the phase one trade deal, which virtually nobody sees as realistic or sustainable, also continues to drive market sentiment. Yet CNY is still only around the 7 level, underlining what I have said about the risk/reward being mostly to the downside from here. Presumably, however, when the trade deal does break down, which could be even sooner than many expect, more central-bank liquidity will be required. So let’s celebrate that in advance too, why not?
The afterglow of the UK election also seems to be encouraging markets. And on that front we see that fiscal stimulus is going to pick up, the right kind of liquidity for once, and in the north and midlands for once too, which is set to become BoJo’s mojo dojo as he hopes to release animal spirits in left-behind locations. However, Johnson is also going to amend the UK Brexit legislation such that December 2020 is a hard exit date with no extension of the looming post-Brexit transition period possible. In other words, the UK and EU will have 11 months from February to December next year to agree everything on a new relationship or Hard Brexit still looms. Clearly this is both a play to the new set of working-class voters who just backed Boris, and a continuation of his rip-the-steering-wheel-out negotiating tactics. Again, however, presumably this also means more central-bank liquidity as an airbag, so why worry?
Meanwhile European manufacturing data yesterday, which point to factory jobs being shed at the fastest pace since 2012 and to an even deeper slump in Q4 than expected, can also be seen as a reason for the ECB to try to save the planet even faster than it was already planning to. In which case…you guessed it! More central-bank liquidity.
So here’s a new reference for you all. In the long-running UK sci-fi comedy Red Dwarf there is a minor reoccurring character in the form of a highly-intelligent, AI-enabled talking toaster. Yet for all its technological wizardry, all it can ever conceive of doing is…offering to make toast.
Or crumpets. Or bagels, etc., etc. The ship may be crashing; aliens may be attacking; the universe may be about to end; but that’s all it can understand how to do, and one has to accept it as such. Here is an example, as it talks to the ship’s genius super-computer, Holly.
Toaster: “I have a question. A sensible question. A question that will test the limits of your new IQ and stretch the sinews of your knowledge to bursting point.”
Holly: “This is going be about waffles, isn’t it?”
Toaster: “Certainly not! And I resent the implication that I’m a one-dimensional bread-obsessed electrical appliance!”
Holly: “I apologise, Toaster. What’s the question?”
Toaster: “The question is this: given that God is infinite, and that the universe is also infinite…would you like a toasted teacake?”
Folks, in the current market environment we have to accept that we are all toast. And we will remain so right up until central banks themselves are toast – which is also inevitable, but which is a story for another day.
“You Have Found NOTHING!”: Trump Warns Dems They’re Playing ‘Dangerous Game’
In a six-page letter to Speaker Pelosi, President Trump rages against The Democrats’ “attempted coup,” blasting that “there was more due process at The Salem Witch Trials.”
“This is nothing more than an illegal, partisan attempted coup that will, based on recent sentiment, badly fail at the voting both. You are not just after me, as President, you are after the entire Republican Party,” Trump wrote.
“History will judge you harshly as you proceed with this impeachment charade.”
“I have no doubt the American people will hold you and the Democrats fully responsible in the upcoming 2020 election. They will not soon forgive your perversion of justice and abuse of power,” he added.
The letter comes on the eve of the House vote on two articles of impeachment against Trump for alleged abuse of power and obstruction of Congress, which is widely expected to approve the articles along party lines.
Full letter below (emphasis ours):
Dear Madam Speaker:
I write to express my strongest and most powerful protest against the partisan impeachment crusade being pursued by the Democrats in the House of Representatives. This impeachment represents an unprecedented and unconstitutional abuse of power by Democrat Lawmakers, unequaled in nearly two and a half centuries of American legislative history.
The Articles of Impeachment introduced by the House Judiciary Committee are not recognizable under any standard of Constitutional theory, interpretation, or jurisprudence. They include no crimes, no misdemeanors, and no offenses whatsoever. You have cheapened the importance of the very ugly word, impeachment!
By proceeding with your invalid impeachment, you are violating your oaths of office, you are breaking your allegiance to the Constitution, and you are declaring open war on American Democracy. You dare to invoke the Founding Fathers in pursuit of this election-nullification scheme—yet your spiteful actions display unfettered contempt for America’s founding and your egregious conduct threatens to destroy that which our Founders pledged their very lives to build. Even worse than offending the Founding Fathers, you are offending Americans of faith by continually saying “I pray for the President,” when you know this statement is not true, unless it is meant in a negative sense. It is a terrible thing you are doing, but you will have to live with it, not I!
Your first claim, “Abuse of Power,” is a completely disingenuous, meritless, and baseless invention of your imagination. You know that I had a totally innocent conversation with the President of Ukraine. I then had a second conversation that has been misquoted, mischaracterized, and fraudulently misrepresented. Fortunately, there was a transcript of the conversation taken, and you know from the transcript (which was immediately made available) that the paragraph in question was perfect. I said to President Zelensky: “I would like you to do us a favor, though, because our country has been through a lot and Ukraine knows a lot about it.” I said do us a favor, not me, and our country, not a campaign. I then mentioned the Attorney General of the United States. Every time I talk with a foreign leader, I put America’s interests first, just as I did with President Zelensky.
You are turning a policy disagreement between two branches of government into an impeachable offense—it is no more legitimate than the Executive Branch charging members of Congress with crimes for the lawful exercise of legislative power.
You know full well that Vice President Biden used his office and $1 billion dollars of U.S. aid money to coerce Ukraine into firing the prosecutor who was digging into the company paying his son millions of dollars. You know this because Biden bragged about it on video. Biden openly stated: “I said, ‘I’m telling you, you’re not getting the billion dollars’ …I looked at them and said: ‘I’m leaving in six hours. If the prosecutor is not fired, you’re not getting the money.’ Well, son of a bitch. He got fired.”
Even Joe Biden admitted just days ago in an interview with NPR that it “looked bad.” Now you are trying to impeach me by falsely accusing me of doing what Joe Biden has admitted he actually did.
President Zelensky has repeatedly declared that I did nothing wrong, and that there was No Pressure. He further emphasized that it was a “good phone call,” that “I don’t feel pressure,” and explicitly stressed that “nobody pushed me.” The Ukrainian Foreign Minister stated very clearly: “I have never seen a direct link between investigations and security assistance.” He also said there was “No Pressure.” Senator Ron Johnson of Wisconsin, a supporter of Ukraine who met privately with President Zelensky, has said: -At no time during this meeting…was there any mention by Zelensky or any Ukrainian that they were feeling pressure to do anything in return for the military aid.” Many meetings have been held between representatives of Ukraine and our country. Never once did Ukraine complain about pressure being applied—not once!
Ambassador Sondland testified that I told him: “No quid pro quo. I want nothing. I want nothing. I want President Zelensky to do the right thing, do what he ran on.”
The second claim, so-called “Obstruction of Congress,” is preposterous and dangerous. House Democrats are trying to impeach the duly elected President of the United States for asserting Constitutionally based privileges that have been asserted on a bipartisan basis by administrations of both political parties throughout our Nation’s history. Under that standard, every American president would have been impeached many times over. As liberal law professor Jonathan Turley warned when addressing Congressional Democrats: “I can’t emphasize this enough… if you impeach a president, if you make a high crime and misdemeanor out of going to the courts, it is an abuse of power. It’s your abuse of power. You’re doing precisely what you’re criticizing the President for doing.”
Everyone, you included, knows what is really happening. Your chosen candidate lost the election in 2016, in an Electoral College landslide (306-227), and you and your party have never recovered from this defeat. You have developed a full-fledged case of what many in the media call Trump Derangement Syndrome and sadly, you will never get over it! You are unwilling and unable to accept the verdict issued at the ballot box during the great Election of 2016. So you have spent three straight years attempting to overturn the will of the American people and nullify their votes. You view democracy as your enemy!
Speaker Pelosi, you admitted just last week at a public forum that your party’s impeachment effort has been going on for “two and a half years,” long before you ever heard about a phone call with Ukraine. Nineteen minutes after I took the oath of office, the Washington Post published a story headlined, “The Campaign to Impeach President Trump Has Begun.” Less than three months after my inauguration, Representative Maxine Waters stated, “I’m going to fight every day until he’s impeached.” House Democrats introduced the first impeachment resolution against me within months of my inauguration, for what will be regarded as one of our country’s best decisions, the firing of James Comey (see Inspector General Reports)—who the world now knows is one of the dirtiest cops our Nation has ever seen. A ranting and raving Congresswoman, Rashida Tlaib, declared just hours after she was sworn into office, “We’re gonna go in there and we’re gonna impeach the motherf’***r.” Representative Al Green said in May, -I’m concerned that if we don’t impeach this president, he will get re-elected.” Again, you and your allies said, and did, all of these things long before you ever heard of President Zelensky or anything related to Ukraine. As you know very well, this impeachment drive has nothing to do with Ukraine, or the totally appropriate conversation I had with its new president. It only has to do with your attempt to undo the election of 2016 and steal the election of 2020!
Congressman Adam Schiff cheated and lied all the way up to the present day, even going so far as to fraudulently make up, out of thin air, my conversation with President Zelensky of Ukraine and read this fantasy language to Congress as though it were said by me. His shameless lies and deceptions, dating all the way back to the Russia Hoax, is one of the main reasons we are here today.
You and your party are desperate to distract from America’s extraordinary economy, incredible jobs boom, record stock market, soaring confidence, and flourishing citizens. Your party simply cannot compete with our record: 7 million new jobs; the lowest-ever unemployment for African Americans, Hispanic Americans, and Asian Americans; a rebuilt military; a completely reformed VA with Choice and Accountability for our great veterans; more than 170 new federal judges and two Supreme Court Justices; historic tax and regulation cuts; the elimination of the individual mandate; the first decline in prescription drug prices in half a century; the first new branch of the United States Military since 1947, the Space Force; strong protection of the Second Amendment; criminal justice reform; a defeated ISIS caliphate and the killing of the world’s number one terrorist leader, al-Baghdadi; the replacement of the disastrous NAFTA trade deal with the wonderful USMCA (Mexico and Canada); a breakthrough Phase One trade deal with China; massive new trade deals with Japan and South Korea; withdrawal from the terrible Iran Nuclear Deal; cancellation of the unfair and costly Paris Climate Accord; becoming the world’s top energy producer; recognition of Israel’s capital, opening the American Embassy in Jerusalem, and recognizing Israeli sovereignty over the Golan Heights; a colossal reduction in illegal border crossings, the ending of Catch-and-Release, and the building of the Southern Border Wall—and that is just the beginning, there is so much more. You cannot defend your extreme policies—open borders, mass migration, high crime, crippling taxes, socialized healthcare, destruction of American energy, late-term taxpayer-funded abortion, elimination of the Second Amendment, radical far-left theories of law and justice, and constant partisan obstruction of both common sense and common good.
There is nothing I would rather do than stop referring to your party as the Do-Nothing Democrats. Unfortunately, I don’t know that you will ever give me a chance to do so.
After three years of unfair and unwarranted investigations, 45 million dollars spent, 18 angry Democrat prosecutors, the entire force of the FBI, headed by leadership now proven to be totally incompetent and corrupt, you have found NOTHING! Few people in high position could have endured or passed this test. You do not know, nor do you care, the great damage and hurt you have inflicted upon wonderful and loving members of my family. You conducted a fake investigation upon the democratically elected President of the United States, and you are doing it yet again.
There are not many people who could have taken the punishment inflicted during this period of time, and yet done so much for the success of America and its citizens. But instead of putting our country first, you have decided to disgrace our country still further. You completely failed with the Mueller report because there was nothing to find, so you decided to take the next hoax that came along, the phone call with Ukraine—even though it was a perfect call. And by the way, when I speak to foreign countries, there are many people, with permission, listening to the call on both sides of the conversation.
You are the ones interfering in America’s elections. You are the ones subverting America’s Democracy. You are the ones Obstructing Justice. You are the ones bringing pain and suffering to our Republic for your own selfish personal, political, and partisan gain.
Before the Impeachment Hoax, it was the Russian Witch Hunt. Against all evidence, and regardless of the truth, you and your deputies claimed that my campaign colluded with the Russians—a grave, malicious, and slanderous lie, a falsehood like no other. You forced our Nation through turmoil and torment over a wholly fabricated story, illegally purchased from a foreign spy by Hillary Clinton and the DNC in order to assault our democracy. Yet, when the monstrous lie was debunked and this Democrat conspiracy dissolved into dust, you did not apologize. You did not recant. You did not ask to be forgiven. You showed no remorse, no capacity for self-reflection. Instead, you pursued your next libelous and vicious crusade—you engineered an attempt to frame and defame an innocent person. All of this was motivated by personal political calculation. Your Speakership and your party are held hostage by your most deranged and radical representatives of the far left. Each one of your members lives in fear of a socialist primary challenger – this is what is driving impeachment. Look at Congressman Nadler’s challenger. Look at yourself and others. Do not take our country down with your party.
If you truly cared about freedom and liberty for our Nation, then you would be devoting your vast investigative resources to exposing the full truth concerning the FBI’s horrifying abuses of power before, during, and after the 2016 election—including the use of spies against my campaign, the submission of false evidence to a FISA court, and the concealment of exculpatory evidence in order to frame the innocent. The FBI has great and honorable people, but the leadership was inept and corrupt. I would think that you would personally be appalled by these revelations, because in your press conference the day you announced impeachment, you tied the impeachment effort directly to the completely discredited Russia Hoax, declaring twice that “all roads lead to Putin,” when you know that is an abject lie. I have been far tougher on Russia than President Obama ever even thought to be.
Any member of Congress who votes in support of impeachment – against every shred of truth, fact, evidence, and legal principle – is showing how deeply they revile the voters and how truly they detest America’s Constitutional order. Our Founders feared the tribalization of partisan politics, and you are bringing their worst fears to life.
Worse still, I have been deprived of basic Constitutional Due Process from the beginning of this impeachment scam right up until the present. I have been denied the most fundamental rights afforded by the Constitution, including the right to present evidence, to have my own counsel present, to confront accusers, and to call and cross-examine witnesses, like the so-called whistleblower who started this entire hoax with a false report of the phone call that bears no relationship to the actual phone call that was made. Once I presented the transcribed call, which surprised and shocked the fraudsters (they never thought that such evidence would be presented), the so-called whistleblower, and the second whistleblower, disappeared because they got caught, their report was a fraud, and they were no longer going to be made available to us. In other words, once the phone call was made public, your whole plot blew up, but that didn’t stop you from continuing.
More due process was afforded to those accused in the Salem Witch Trials.
You and others on your committees have long said impeachment must be bipartisan—it is not. You said it was very divisive—it certainly is, even far more than you ever thought possible—and it will only get worse!
This is nothing more than an illegal, partisan attempted coup that will, based on recent sentiment, badly fail at the voting booth. You are not just after me, as President, you are after the entire Republican Party. But because of this colossal injustice, our party is more united than it has ever been before. History will judge you harshly as you proceed with this impeachment charade. Your legacy will be that of turning the House of Representatives from a revered legislative body into a Star Chamber of partisan persecution.
Perhaps most insulting of all is your false display of solemnity. You apparently have so little respect for the American People that you expect them to believe that you are approaching this impeachment somberly, reservedly, and reluctantly. No intelligent person believes what you are saying. Since the moment I won the election, the Democrat Party has been possessed by Impeachment Fever. There is no reticence. This is not a somber affair. You are making a mockery of impeachment and you are scarcely concealing your hatred of me, of the Republican Party, and tens of millions of patriotic Americans. The voters are wise, and they are seeing straight through this empty, hollow, and dangerous game you are playing.
I have no doubt the American people will hold you and the Democrats fully responsible in the upcoming 2020 election. They will not soon forgive your perversion of justice and abuse of power.
There is far too much that needs to be done to improve the lives of our citizens. It is time for you and the highly partisan Democrats in Congress to immediately cease this impeachment fantasy and get back to work for the American People. While I have no expectation that you will do so, I write this letter to you for the purpose of history and to put my thoughts on a permanent and indelible record.
One hundred years from now, when people look back at this affair, I want them to understand it, and learn from it, so that it can never happen to another President again.
George Conway Helps Launch Never-Trump Super PAC To Get Rid Of ‘Cancer On The Presidency’
The husband of President Trump’s top adviser has formed a ‘never-Trump’ Super PAC aimed at defeating “President Trump and Trumpism at the ballot box” in 2020.
Conservative lawyer George Conway has teamed up with the bitter all-stars of the Never Trump right to found the Lincoln Project,” has a reported $1 million in fundraising commitments.
The PAC’s principals include GOP operative Rick Wilson, former McCain adviser Steve Schmidt, former Ohio Gov. John Kasich adviser John Weaver and former New Hampshire GOP chair Jennifer Horn. Curiously absent is neocon royalty, Bill Kristol.
The group will focus on blocking Trump’s reelection, as well as his Congressional supporters in a handful of key 2020 battlegrounds, by targeting disaffected Republicans and right-leaning independents. They will focus efforts on Michigan, Pennsylvania and Wisconsin, along with Arizona, Colorado, North Carolina, Maine, and possibly Kentucky and Kansas, according to the Associated Press.
The Lincoln Project is very much a work in progress, despite Tuesday’s official launch. While the core players don’t yet have titles, day-to-day operations will be led by Horn and Reed Galen, a veteran Republican operative who worked for McCain but left the GOP after Trump’s nomination in 2016.
The group begins as a super PAC, which means it can raise and spend unlimited sums of money and must disclose its donors. –AP
Conway, husband of senior White House aide Kellyanne Conway, told AP that he hopes the anonymous Trump administration official who authored a recent anti-Trump book would join the group – however the rest of the PAC’s founders ultimately decided against Conway’s suggestion.
“I think the more the merrier,” said Conway. “And I hope maybe he — he or she, I don’t know who Anonymous is — will come out someday and join the effort. Because everyone who believes as we do that Donald Trump is a cancer on the presidency and on the Constitution needs to help and join this effort.”
When asked about the PAC, Kellyanne acknowledged George’s involvement, saying “It’s kind of disappointing to see some of the people who are involved, but not surprising,” characterizing the group as a collection of failed campaign managers.
“They never got a president elected into the White House. I’m sure that hurts, very much. But they never really accommodated the growing Republican Party and understood how to beat Democrats and we did.”
Conway, who left the GOP last year, said he would probably be the group’s “cheerleader” because of his limited political experience.
“I’m not a fundraiser or political consultant, but if I could help in that way and learn how to do that — even to raise a nickel or two — I’ll do it because it’s important,” he said, adding “For this, I think I can make an exception.”
“If he’s not removed by the Senate, he needs to be removed at the ballot box,” he said of Trump. “The people in Congress who are enabling him, either actively or passively, they, too, are violating their oaths of office. … Andthey need to be removed, too.” –AP
Will Conway and the Nevertrumpers throw their support behind the Democratic nominee?
The stunning decline of men in the student headcount.
With college costs blowing through the roof, with “luxury student housing” and not so luxury “student housing” having become asset classes – including, of course, CMBS, now in rough waters – for global investors, with textbook publishers gouging students to the nth degree, and with the monetary value of higher education questioned in more and more corners, the inevitable happened once again: College enrollment dropped for the eighth year in a row.
The post-secondary student headcount – undergraduate and graduate students combined – in the fall semester of 2019 fell 1.3% from the fall semester last year, or by over 231,000 students to 17.97 million students, according to the Student Clearing House today. In the fall of 2011, the peak year, 20.14 million students had been enrolled. Since then, enrollment has dropped by 10.8%, or by 2.17 million students:
This is based on enrollment data submitted to the Student Clearing House by the schools. It does not include international students, which account for just under 5% of total student enrollment in the US. Duplicate headcounts – one student enrolled in two institutions – are removed from the data to eliminate double-counting.
The 10.8% decline in enrollment since 2011 comes even as student loan balances have surged 74% over the same period, from $940 billion to $1.64 trillion:
Enrollment in for-profit colleges collapses.
The overall decline in enrollment hasn’t been spread evenly across the board. After myriad scandals, lawsuits, government action, and government inaction, enrollment in for-profit four-year colleges has plunged by 54%, from 1.64 million student in the fall of 2010, as far back as the data series is available, to 750,000 now.
The current year-over-year decline of 2.1% pales compared to the plunges of 15% in 2018, of 7% in 2017, of 15% in 2016, and of 14% in 2015. Despite the relatively small share of total enrollment – by 2019, the share has withered to just 4% – these for-profit colleges account for 41% to the total decline in enrollment since 2001:
Enrollment at public two-year schools, such as junior colleges, has plunged by 22% since 2011, to 5.37 million (green line in the chart below).
But enrollment at private nonprofit four-year colleges has ticked up 3.9% since 2011. Yet, even these schools saw enrollment decline by 0.6% over the past year, to 3.84 million (brown line in the chart below).
And public four-year schools too had been hanging in there and the student headcount remains up 2.2% from 2011 though it too declined 1.2% over the past 12 months, to 7.82 million. At public schools, the peak was in 2016 with 8.1 million students (blue line):
Where the heck are the men?
Women by far outnumbered men in total enrollment in the fall semester of 2019 with 10.63 million women enrolled and just 7.61 million men, meaning that overall there are now 40% more women in college than men:
At public four-year schools, there were 30% more women (4.51 million) than men (3.48 million)
At private non-profit four-year schools, there were 50% more women (2.32 million) than men (1.54 million)
At private for-profit four-year schools, there were more than twice as many woman (508,000) than men (241,000).
At public two-year schools, there were 38% more women (3.11 million) than men (2.26 million).
Over the past three years, enrollment has declined for both men and women, but faster for men (-5.2%) than for women (-1.4%). Since 2011, enrollment has declined by 13% for men and by 9.4% for women.
Enrollment by state.
Of the big four states, California had by far the most students, at 2.45 million. Over the 12-month period, enrollment ticked down by 0.8%, and over the three-year period by 2.7%.
In Texas, with 1.49 million students, enrollment inched up by 0.3% this year, and by 0.7% from three years ago.
In New York, at 1.04 million students, enrollment declined 1.8% year-over-year and fell 4.4% over the three-year period.
In Florida, with 933,000 students, enrollment fell by 5.3% year-over-year, or by 52,328 students, the largest headcount decline among the states. And it fell 7.0% over the three-year period.
Enrollment in 35 states declined. Here are the states with largest enrollment declines by percentage change this year:
Alaska: -10.6% year-over-year to 22,300 students; -14.3% from 2017
Florida: -5.3% year-over-year to 933,000 students, -7.0% from 2017
Arkansas: -4.9% year-over-year to 144,000 students; -7.2% from 2017
Missouri: -4.4% year-over-year to 323,400 students; -6.9% from 2017
Vermont: -4.4% year-over-year to 38,200 students; -4.5% from 2017
Wyoming: -4.4% year-over-year to 27,600 students; -5.8% from 2017.
And in 15 states, enrollment increased. Here are the biggest gainers:
Utah: +4.9% year-over-year to 362,000 students; +13.8% from 2017
New Hampshire: +3.4% year-over-year to 157,200; +6.4% since 2017
Arizona: +1.8% year-over-year to 456,543 students; +1.1% from 2017, having dipped in 2018
Georgia: +1.5% year-over-year to 518,800 students; +5.5% from 2017
Kentucky: +1.5% year-over-year to 243,300 students; +1.8% from 2017
The overarching theme is the horrible expense of getting a higher education, as each layer element in the University-Corporate-Financial Complex extracts its pound of flesh, largely funded by parental sacrifices and by student loans, which are a mix of taxpayers funds when the loans default and students’ future sacrifices when the loans don’t default. The vision of a pile of student loans for years to come act as a discouragement to students who spend more than two minutes thinking about it.
But clearly, there are more factors at work. The collapse of enrollment in for-profit colleges is a result of numerous scandals and scams that left students with huge student loans and either no degree or with a degree that’s utterly worthless. It is likely that these for-profit schools marketed to people that would otherwise not have gone to university and enticed them with government-funded student loans.
The declining proportion of men among students has long been observed. That women flock to higher education is a great thing, but why did men bail on the system in such large numbers? This is subject to endless and wide-ranging discussions. One explanation that has been offered, and only a partial one, and only covering the past few years, is the relatively good job market where young men decided for forgo a higher education and instead enter the workforce after high school – and that makes sense in many cases, especially if it involves learning a trade.
Whatever the explanations may be, for most parents and students it has become a daunting task to pay for higher education and feed the University-Corporate-Financial Complex.
Watch: Climate Activists Are “Nearly Run Over” Trying To Halt Coal-Laden Freight Train
The “end of the world” apocalyptic hyper-gloom-and-doom rhetoric of Greta Thunberg and other self-anointed climate prophets are leading followers to take greater and greater risks in attempts at “staving off climate disaster” — increasingly endangering themselves and public safety.
As a case in point, climate activists in the northeast United States have for the past month been physically trying to halt coal-filled freight trains, in some cases by literally jumping on the tracks. As Fox News reports of the latest dangerous incident caught on video:
An environmental reporter in Massachusetts posted a video on Twitter late Monday that she said showed a freight train hauling coal being met with a group of climate change activists on a dark track.
The train was seen moving slowly through Worchester, Mass., and about a dozen activists with small lights could be seen surrounding the tracks. The train’s horn was blaring, but the activists appeared to continue to give it chase. The train was headed to New Hampshire, the reporter wrote.
#BREAKING A train carrying coal to NH nearly ran over a dozen climate activists who tried to block it in Worcester. This happened after someone farther south on the tracks called the emergency hotline twice to report there were people on the tracks. pic.twitter.com/uaUa12mauQ
The clip was posted by Boston NPR-WBUR reporter Miriam Wasser, who also noted railway authorities had been alerted that people were on the tracks by a call to an emergency hotline, just prior to the chaotic scene.
Wasser wrote that the train bound for New Hampshire “nearly ran over a dozen climate activists” who had been attempting to block its passage. The video shows the slow-moving train blaring its horn constantly as flashlight bearing activists attempt to halt its movement by appearing to dart in front of it as well as run close alongside it. There were no reports of injuries in the aftermath, and the incident is apparently still being investigated.
The large freight train’s movement doesn’t appear to be stalled; however, it’s well-known that at full speed multi-car trains can take up to a mile to mile-and-a-half to stop once emergency brakes are applied.
Protesters in Massachusetts in a prior Dec.8 incident attempting to flag down a coal train to stop it. Image source: 350 New Hampshire Action via WBUR.
The ultra risky tactic of attempting to block trains in motion also presents the potentially deadly scenario of derailment or danger to the engineers conducting the train. A statement from one activist group alleged to be involved in the latest incident confirmed the train didn’t stop:
An after-hours email from Fox News to the group was not immediately returned. 350 New Hampshire, an activist group in the state, wrote that no one was hurt, but the train “refused to stop.”
It’s not the first such incident and appears part of a greater trend, as earlier this month the Boston Globe identified that a group called the Climate Disobedience Center is engaged in a broader campaign to halt coal transfer based on the claim that coal power plants “pollutes the river and causes asthma and contributed to climate change.”
🚨 HAPPENING NOW:
New England activists are blocking a coal train heading to Bow, NH.
This is a #ClimateEmergency, and people are dying. We refuse to let them add fuel to the fire.
A group called 350 New Hampshire Action also admitted to being engaged in a campaign to disrupt trains in the region: “It is crucial that the actions that we take not be one-off actions,” a spokesperson for the activist group said. They vowed to “continue until the power plant is taken offline once and for all” — specifically in reference to Merrimack Station power plant in Bow, New Hampshire.
“We are in the beginning of a mass extinction. … If you choose to fail us, I say we will never forgive you.” Image source: AP.
An earlier report from a local NPR station said multiple arrests were made in the New England region earlier this month as the activists’ tactics get more dangerously interventionist:
She and about 100 others joined the protest Sunday, delaying the train at three different points along its route – in Worcester and Ayer, Massachusetts, and in Hooksett.
About two dozen people were arrested on misdemeanor trespassing charges.
Fox News also noted freight tracks had been temporarily blocked at “various points” across New Hampshire, including Worcester, Ayer and Hooksett.
As such protest tactics inevitably get more and more radical and risky, we should also note the mainstream media’s role in all of this. Consider some of the opening lines to a recent New Yorker piece: “The climate apocalypse is coming… If you’re under thirty, you’re all but guaranteed to witness it… you can accept that disaster is coming, and begin to rethink what it means…”.
Now with the issue cast in such cult-like “good vs. evil” moral dualism, disaster is indeed on the horizon, but not in the way these ‘activists’ and media pundits think.
In my days before I worked for the Mises Institute, I had a colleague who knew I associated with Austrian-School economists. In the wake of the bailouts and quantitative easing that followed the 2008 financial crisis, he’d sometimes crack “where’s all that inflation you Austrians keep talking about?”
But then, in the very same conversation, he’d remark with dismay on how much housing-price increases had outpaced household income in the region.
He didn’t need an answer from me. He’d found some of “that inflation” all on his own.
Price Changes Are Not Homogeneous
These exchanges illustrated some of the blind spots we repeatedly find among economists and pundits who insist there is no inflation, or that there’s even deflation. (In this article, I’m talking only about price inflation, and not money-supply inflation.) But whether or not one is experiencing an inflationary economy can vary widely on socio-economic status, location, life stage, and age. For those who need higher education services, housing, health care, and savings for retirement, the current inflationary economy could be problematic indeed.
This isn’t to say that price inflation is increasing everywhere. Oil prices are down by nearly half since 2014, for instance, which means lower transportation costs for most of us. Apparel prices have been declining for decades.
Nevertheless, the official measure of inflation — the CPI — does show an increase over the past decade. Over the ten years from 2009 to 2018, the CPI value rose 15 percent. It has risen fifty percent in the twenty years since 1999.
No Deflation Here: Housing, Healthcare, Stocks, and Education
Yet, the CPI increase has been significantly outpaced by prices in a number of sectors.
Even bigger increases are found in asset prices.According to Case-Shiller, for example, the 20-city housing index rose 50 percent from 2009 to 2018. During the same period, the Dow Jones rose 108 percent.
Just because price inflation is showing up more in some assets and services than in others doesn’t mean it’s not there.
Supporters of the status quo tend to defend housing-price increases on the grounds that rising housing prices are good for people who own those assets.This is true. Unfortunately, not everyone is a homeowner.
Those who wish to dismiss the possibility to significant price inflation might also claim the CPI is reflective of the real-world situation because not everyone buys a college education, and not everyone needs sizable medical services. That’s true, and averages could be used in these cases to portray increases in spending in these areas are more muted than the experience of many individuals suggests.
But this ultimately just shows the problem with using broad aggregate numbers and averages to represent the cost of living.
In practice, increases in asset prices hurt first-time homebuyers, and low income households who have so far been unable to afford a downpayment and the elevated asset prices we’re now seeing. Nor is everyone in the market to buy real estate soon. Or ever. Real estate price increases drive up rents as well, and this is a problem for both young consumers and low-income ones. Over the past decade in the metro Denver area the average rent increased 60 percent in contrast to the CPI increase of 16 percent. In Phoenix, the average rent increased seven percent from 2018 to 2019.
The CPI might tell us that inflation is “subdued,” or “muted,” there are plenty of people whose budgets are taking big hits anyway. Moreover, home prices are a big part of most households’ monthly expenses. Combined with healthcare spending and higher education, the increases in the cost of living — reflected in price increases — we’ve seen over the past decade are hardly something we could describe as “deflationary.”
Defenders of the there’s-no-inflation position might claim “but these price increases are moderated by price declines in other places!” That may be true, but housing, healthcare, and education make up a pretty sizable portion of a family’s expenses. We can’t simply assume the CPI’s basket of goods necessarily reflect the day-to-day economic realities that ordinary people face. For many people who don’t fit the profile of the “average”, generic, or aggregated American, the official numbers may not reflect reality at all. Indeed, it appears lower-income, younger, and more elderly consumers are the ones who suffer the most. For example, elderly retirees on fixed incomes can’t just increase their incomes by working more to keep up with price increases. And young people with no assets will have a much harder time acquiring assets if prices are relentlessly speeding upward. Mid-career people with flexible incomes and with assets are one thing. Everyone else is more likely to encounter trouble.
Low Inflation Is Not “No” Inflation
Finally, it’s important to keep in mind that what’s routinely touted as “low inflation” isn’t all that low.
For example, even though we’re told we live in an age of exceptionally low inflation, the CPI measure shows the that a dollar’s worth of goods and services twenty years ago requires about $1.50 today. Even over just the past decade, what one dollar once bought then requires $1.17 today.
The much-vaunted two-percent-inflation standard shows similar results. If central banks are able to nail the “low” two-percent-inflation level, we’d still end up with a dollar that loses nearly half its value in 20 years. In this scenario, a dollar would lose nearly one-fifth of its value in just a decade.
For regular people who can’t count on a a four-percent return on their investments, and who rely on banks which pay around one percent, this means a lot of lost wealth in spite of these households’ best efforts at saving.
Although central bankers insist a two-percent inflation rate offers “price stability” the reality is one of significant depreciation in wealth for those who are struggling to acquire assets and who may be facing medical problems, high rent, and and college bills.
This may account for some of the growing divide between higher-income investors and middle- to low-income Americans. They often can’t take advantage of the higher-yield options enjoyed by those who already have high incomes and portfolios packed with assets.
As shown by Karen Petrou in recent research, many regular people have placed more of their wealth in real estate, but often real estate in less inflationary markets in middle America. The result has been a class of wealthier investors in expensive coastal cities who own a lot of stocks and own real estate in stylish markets. But there are also many Americans who have smaller portfolios and own real estate in markets that have seen far less appreciation. Inflation is by no means uniform nationwide and its more benign in some places — and in some socio-economic groups — than in others.
None of this shows up in the official aggregate data, but that results are real. Some benefit greatly from the asset price inflation. Others aren’t benefittng nearly as much.
