In the aftermath of the US shockingly designating China a currency manipulator – for the first time in over 25 years – there was a tense period of several hours in which it appeared that all bets were off, and that with both the US and China seemingly going full tilt, China would fix the Yuan not only far weaker than its Monday rate, but also weaker than expected according to an imputation of the country’s currency basket, which was 6.9736, well below the previous fixing of 6.9225, the first fixing below 6.90 in 2019 and the catalyst for the overnight plunge in risk assets. Heck, some even speculated that Beijing may fix the Yuan below 7.00 vs the USD, if not launch a couple of nukes at the US for good measure.
It wasn’t meant to be though: shortly after 9pm EST, the PBOC lifted the kimono so to speak… and the market collectively exhaled when China revealed that while it had indeed fixed the onshore yuan weaker than Monday, it did so stronger relative to both the 7.00 proverbial line in the sand, and which would have been a retaliatory declaration of outright currency war, but also relative to the expected fixing, with the number coming at 6.9683.
In kneejerk reaction, a wave of relief washed over the market, sending the offshore Yuan surging, and reversing all prior session losses which had dragged it as low as 7.14 just moments ahead of the fix, to above 7.10 last…
… while the S&P Emini future recovered all losses from the declaration of China as a currency manipulator…
… although after a sharp spike, it appears that the initial euphoria is starting to wear off.
And now that Beijing has shown some control – instead of hurtling head on into a currency war and global financial crisis that would have blown up its banking system – we wait for the next developments, of which there will be plenty. And, as usual, we urge readers to keep a close eye on the events in Hong Kong, which has emerged as the most important geopolitical hotspot of the year, if not decade.
via ZeroHedge News https://ift.tt/2yIIsjP Tyler Durden
On a day where it looks as though the Fed’s bullshit “magic potion” may finally be wearing off on the stock market, Peter Schiff joined Chris Irons on the Quoth the Raven Podcast to speak about today’s market move: what it means, whether it can continue and how he would position himself going forward.
Schiff began by talking about the trade war between China and the United States escalating. He talked about why he believes the US dollar was weakening on Monday and why he believes the dollar will continue to weaken for the foreseeable future.
“We’ve been in a recession,” Schiff says.
“The election of Trump just delayed the inevitable for a little,” he continued.
“My thinking is the market was going down regardless of the cut they got,” he said, talking about last week’s rate cut.
“You can’t say the dollar is strong when it’s lost $30 against gold in one trading day. Gold tells you we have a weak dollar.“
He continued, talking about Jerome Powell’s press conference last week:
“Powell contradicted himself several times, which is something that you do when you’re lying. The Fed is not telling the truth.”
Schiff predicts that interest rates are going back to 0% and that the Fed will start QE yet again.
“Powell’s trying to pretend it’s because of concerns about the overseas economy. It is really the US economy that is driving the Fed. That’s why this is just the first step on the road back to zero. And you know, it was a mistake when the Fed went back to zero the last time; it’s going to be an even bigger mistake when they do it next time. And they’re also going to go back to quantitative easing. You know, they announced yesterday the end of quantitative tightening, but the next step is to go back to QE, and QE 4 is going to be bigger than QE 1, 2 and 3 combined.”
But, this time he says the Fed isn’t going to be able to stop the ensuing recession and will ruin the US dollar.
“When you’re inside the bubble, you don’t see the pin,” Schiff says.
He compares today’s market environment to prior to the great recession.
“What’s been happening this past year or so is a lot of my forecasts have been met. Stuff I’ve said that no one else has said is happening. And it validates that I’m right and I’m confident I’ll be right going forward,” he says.
Schiff also predicted that the price of gold is going to move above $2000 quickly and says that small double digit moves in gold are indicative that the metal hasn’t even started to catch on to the fact that we are mired in recession yet. He predicts we will see hundred dollar moves in gold as the true economic landscape becomes clearer moving forward. Schiff previously commented on his preference for gold over cryptos…
“I think that spec money is maybe chasing the bubble in cryptos, but the smart money is buying into gold and buying into silver because those are legitimate stores of value and they are monetary assets and they are going to shine when the dollar crashes.”
From there, Schiff went on to discuss the possibility of Trump losing the 2020 election and what it would mean for a Democratic socialist to take the office.
“What’s going to happen when we have more taxes and more regulation,” he asks?
He postulates what the potential stock market reaction could be to Trump losing the election and talks about what positions he owns personally.
You can listen to the entire podcast here:
You can help support the QTR Podcast through Patreon here and GoFundMe here.
via ZeroHedge News https://ift.tt/2MH4HPq Tyler Durden
The 2013 “Lie of the Year” was Barack Obama’s false claim, “If you like your health care plan, you can keep it.”
Millions of Democrats found that out the hard way.
The “Lie of the Year” for 2019 will be, “If you like your Medicare, you can keep it.”
Medicare for All doesn’t actually offer Medicare for all. It deprives senior citizens of Medicare.
Medicare is a program available to senior citizens and the disabled. The idea was that you work, pay taxes and those taxes are used to provide for your health care when you retire. You don’t have to use Medicare and there are a variety of managed Medicare plans by providers offering more options.
The first thing that Medicare for All would do is eliminate Medicare, along with all other health plans, and misleadingly use that name to create a government health care system. That’s like announcing an iPhone-for-All government plan that takes away everyone’s iPhones, and replaces them with tin cans that have an Apple logo slapped on them. It’s a massive health care robbery that adds insult to injury.
Medicare for All doesn’t expand Medicare. It eliminates Medicare for those who have it.
The lying got started early.
Two-thirds of Democrat voters think that Medicare for All will let them keep their existing employer health plans. The truth is that all private health plans covering medical care will be banned.
The 2020 Democrat frontrunners, including Kamala Harris, Elizabeth Warren, and Bernie Sanders backed Bernie’s Medicare for All act that eliminates private health insurance.
At the first Democrat debates, Kamala, Warren and Harris all raised their hands when asked if they would abolish private insurance.
What they didn’t admit is that Medicare for All doesn’t just abolish private health plans, but also public ones. Medicare for All will eliminate your employer plan and it will kill your Medicare too.
Senator Kamala Harris has been frantically lying about her support for eliminating everyone’s private plans. First, Harris claimed that she didn’t understand the question. Then she suggested that some private insurance might be allowed to survive as long as they covered cosmetic surgery. Since then she switched to a variation of Obama’s Lie of the Year by insisting that people would keep their doctors.
Probably. Possibly. Maybe.
“You’re not going to have to lose your doctor. It is very unlikely,” she told CNN.
“Well 91% of the doctors in the United States are in the Medicare system, so the odds-on favorite is that you will be able to keep your doctor,” she told an Iowa town hall.
Except that Medicare for All isn’t Medicare. It’s a whole other system with different reimbursement rates. And that means completely different levels of access to health care and resource management.
With a 40% estimated drop in provider reimbursement, and no private health plans as a buffer, the 91% won’t be signing up for her plan. Medicare for All will eliminate insurance and replace a multi-tiered system, one in which the middle class, including seniors, had better access to health care, with two tiers.
Either you can afford to pay for private health care from qualified doctors and hospitals. Or you can’t. And then you’re going to be stuck in Medicare for All’s resources shortages and waiting lists. Either you can afford the tests you need that may save your life. Or all you’ll get is bargain basement care.
Medicare for All more closely resembles Medicaid for All.
Or almost all.
Medicare for All squeezes seniors, the middle class and the working class into Medicaid for All, while Bernie, Kamala, Warren and the other millionaires have access to private doctors and hospitals.
Currently, around 1 out of 3 doctors don’t accept Medicaid patients. And that’s before a radical transition to the punishing system being proposed by Sanders, Harris and Warren.
If your doctor isn’t in Medicare for All, not only won’t you get to keep him, but trying to will see him or her banned from the system. If your doctor chooses to participate in Medicare for All, how often you see them will be determined by the government. If you need to see your doctor more frequently and want to pay them privately, that’s illegal.
And forget hospitals.
The care Medicare patients receive at a hospital will look nothing like the care Medicare for All patients will get. Medicare for All doesn’t pay for procedures. It negotiates a “global budget” with hospitals. Hospitals are paid a set amount and then they decide how to use that money to help patients.
Medicare and private health plans suffer from overuse. Medicare for All solves that problem.
Need an MRI? An ECG? Any tests to check for the possibility of a problem. Good luck, pal. It’s not in the “global budget”. That means the tests aren’t happening. And you’ll just have to wait around for clearer symptoms of heart disease or cancer. Unless you die in the meantime which solves that problem.
You’re not on Medicare. You’re on Medicare for All. And that means you’re going to enjoy a standard of care previously experienced at the VA or in Cuba. Both greatly admired by Senator Bernie Sanders.
None of this is how actual Medicare works.
Medicare depends on healthy people paying toward their care in their elder years. That means payroll taxes. It also means hospitals using private insurance payments to subsidize Medicare patients. Eliminate private insurance and every hospital is underwater. Put everyone on a government plan and there’s no longer even the illusion of an economic model that can cover our medical costs.
Senator Bernie Sanders estimated that his plan, which has been endorsed by Warren and Harris, will cost $40 trillion over 10 years. That’s the entire federal budget for every year. Doubled.
That kind of spending is unsustainable no matter how many taxes you raise.
Those $40 trillion numbers already assume that provider reimbursement has been cut to the bone. Further cost savings won’t be coming from hospitals or doctors. They’ll be coming out of patients.
Medicare for All has little in common with Medicare. It’s a nationalized version of Medicaid.
Medicare spends over $12,000 per beneficiary. Medicaid spends around $8,000. The difference between the two is the difference between expanding the budget to over $8 trillion or to $6.6 trillion.
Which one do you think it will be?
Medicare ran up $582 billion in costs in FY 2018. That’s punishing, but not impossible. Maintaining the same per enrollee spending for the entire country would alone brush up against Bernie’s $4 trillion.
Our GDP has grown to an impressive $21 trillion under Trump. Medicare for All would put a third of the GDP toward the budget. That’s an impossible number and there’s no way that it will be met.
The end result won’t even be Medicaid for All.
Medicare for All will cannibalize actual Medicare, using the brand, taking the name, wiping out the entire system, seizing the money used to fund Medicare, and wiping out actual Medicare.
Even before the medical apocalypse arrives, seniors would discover that their doctors no longer even accept Medicare because the new system automatically enrolls Medicare doctors into Medicare for All.
The Medicare for All lie is especially cruel because it destroys the health care that seniors have paid into and depend on, while falsely promising that it will continue to be available to them. And to all.
The destruction of Medicare isn’t just collateral damage. Just like the ban on private health plans, the new socialized medicine has bet everything on destroying all competition to be the only game in town.
Medicare for All has to destroy Medicare. The destruction is written directly into the legislation. “No benefits shall be available under Title XVIII of the Social Security Act for any item or service furnished beginning on or after the effective date of benefits.” That’s the death warrant for Medicare.
The Medicare Trust Fund will be looted into the Universal Medical Trust Fund.
Seniors will lose their doctors. They’ll lose access to the lifesaving tests they need after a heart attack or stroke. The money they paid into the system will be used to cover substandard care for illegal aliens. And then for them. Despite the name, they’ll no longer have Medicare access, but at best, Medicaid.
And the politicians who stole their Medicare will use its name on the new system to cover up the scam.
The proper name for this isn’t Medicare for All. It’s Destroy Medicare for All.
via ZeroHedge News https://ift.tt/2YKWfke Tyler Durden
In the aftermath of the Chinese yuan devaluation, and the subsequent, and even more stunning, designation of China as a currency manipulator, one thing is clear: the first major currency war of the decade, if not the century, is now a fact.
Which brings up several follow up questions: now that the tap has been broken, who will the US designate a manipulator next – Vietnam, Germany, Switzerland? But an even more apropos question is whether the US, now that all bets are off, will intervene directly in the currency market to devalue its own currency.
To answer that question we go back in time almost one year, when this question popped up for the first time, and when to answer it, we wrote “The “National Emergency Loophole”: How Trump Could Intervene In The Market To Crush The Dollar.” And so, now that the topic of US intervention in the FX market is quite topical, we report our article from August 2018, with some minor edits.
After a flurry of tweets in which Trump complained that the dollar is blunting America’s “competitive edge,” Wall Street has started to pay attention: in a report this month, JPM’s chief US economist, Michael Feroli, wrote that he can’t rule out the possibility the administration will intervene in the currency markets to weaken the greenback. Both Deutsche Bank and OppenheimerFunds echoed the view, saying dollar intervention was no longer far-fetched.
Zach Pandl, co-head of global FX strategy at Goldman Sachs, recently said that “we haven’t had a deliberate effort to weaken the U.S. dollar perhaps since the Plaza Accord in 1985, so it is very unusual and against established practice over the last several decades. A deliberate policy to pursue a weaker currency could cause foreign investors to shy away from U.S. assets — including Treasury bonds — raising interest costs for domestic borrowers.”
In a note from Nomura’s Richard Koo, the strategist asks “how President Trump might respond if uncertainty did worsen, raising the likelihood of a slowdown in the US economy” and answers that “one possibility is that the administration would shift from tariffs, which require a separate staff to handle exemption requests for each product category, to the use of exchange rates, which would allow simultaneous adjustments to prices for all imported products.”
Here is why Koo is confident that it is only a matter of time before Trump directly intervenes in the FX market:
A protectionist policy that must be individually tailored to each product category requires large numbers of administrative staff, and a period must be established during which companies can apply for exemptions. Exchange rate-based adjustments, on the other hand, entail no such costs.
In that sense, the more problematic administrative delays become and the more industry opposition mounts, the greater the likelihood that President Trump will replace tariffs with exchange rates as his main tool for addressing US trade imbalances.
The loudest warning to date that Trump could rock the currency world has come from Charles Dallara, the former U.S. Treasury official who was one of the architects of the Plaza Accord, the 1985 agreement between the U.S. and four other countries to jointly depreciate the dollar. “The trade debate will increasingly include the currency issues,” he told Bloomberg “It’s inevitable.”
As Bloomberg adds, a shift to a more protectionist and interventionist policy, à la 1985, would not only reverberate across the $5.1 trillion-a-day currency market and undermine the dollar’s status as the world’s reserve currency, but could also weaken demand for U.S. assets.
But can Trump really intervene unilaterally in the currency market, and what tools does the president have at his disposal if he wanted to go beyond mere talk?
The most direct choice for Trump would be to order the U.S. Treasury (via the New York Fed) to sell dollars and buy currencies like the yen and euro using its Exchange Stabilization Fund, according to Viraj Patel, an FX strategist at ING. But because the fund only holds $22 billion of dollar assets, the impact would likely be minimal. Any direct intervention that is larger and more ambitious in scope would also require congressional approval, he said quoted by Bloomberg.
Then there is the nuclear option: according to Patel there is one loophole Trump could exploit to get around the fund’s constraints and bypass Congress altogether: by declaring FX intervention a “national emergency.” He could then force the Fed to use its own account to sell dollars.
Such a move would be a long shot by any stretch of the imagination, but with Trump invoking national security to impose tariffs, Patel says he can’t “completely rule out” the possibility.
Such a move would certainly roil the market and potentially lead to a USD crash, not only due to Trump’s intervention but due to the sudden collapse in faith in the global reserve currency; the result would be a flood of Treasury sales from global custodians around the globe who currently hold over $6 trillion in US Treasuries. To be sure, Trump’s persistent jawboning of the dollar may already be having an adverse effect on foreign demand for U.S. assets. While overall demand at auction has been up and down this year, foreign holdings of Treasuries have slumped to an almost 15-year low of 40%, forcing domestic investors to become the marginal buyer of US Treasurys. China, the largest overseas creditor, has pulled back this year. Japan, the second biggest, has reduced its share to the lowest level since at least 2000.
A less extreme, and more plausible, option would be for the Trump administration to include currency clauses in any new trade deals, like it did with the updated U.S.-South Korea trade agreement in March, although enforcement would be complicated and the implementation lengthy.
There is also the suggestion of a global accord on currencies, broached in the past by White House trade adviser Peter Navarro, however the chances of a multilateral agreement on the dollar are remote. Plus, there’s always the threat of retaliation by other nations if the U.S. goes it alone.
While it remains unclear what Trump will do, keep a close eye on China, where the yuan has tumbled nearly 10% since April, when the trade war with Beijing started in earnest. The magnitude of the decline, the fastest since the 1994 devaluation, boosted speculation the People’s Bank of China is deliberately weakening the yuan to offset the tariff impact.
Even though China has denied it is “weaponizing the Yuan”, many are skeptical, and Trump is among them: which is why the president has criticized the country for taking advantage of the U.S. by keeping its exchange rate artificially low. (However, Trump has not gone so far as to officially brand China a currency manipulator in the twice-yearly review of international foreign-exchange policies published by the Treasury).
Trump’s single focus on the Yuan may explain why Beijing has pulled all stops to prevent the currency from sliding below the ‘redline’ of 7.00 vs the dollar (alternatively it is preparing to devalue further if and when Trump launches the next $250BN in tariffs he has warned he would). Stephen Jen of Eurizon SLJ Capital has warned that Trump may be quick to retaliate in the FX markets if it suspects that China is “playing games with its currency,” which may have disastrous effects on demand for U.S. assets.
“If you’re an international portfolio manager with 30 percent of your exposure to the U.S., and you know the currency will be guided meaningfully lower as a policy tool, why would you be investing here?” he said. “The Trump administration needs to be very, very careful with its dollar policy.” This was most vividly on exhibit during the Fed’s QE phase when Guido Mantega, then Brazil’s finance minister, siad the Fed was throwing “money from a helicopter” and “melting” the dollar.
Ironically, it is the stronger dollar that is crippling emerging markets now.
Whether or not Trump intervenes, however, Dallara is bracing for more turbulent times:
“I’ve lived through a lot of market gyrations in my career,” he said. “And I have an uneasy feeling that I can’t validate by data that tensions are going to, at some point, emerge into volatile market dynamics. This is a risk.”
via ZeroHedge News https://ift.tt/2KtHLjJ Tyler Durden
Three mass shootings occurred in the last week in America and it’s starting to feel to many people like nowhere is safe. “I’ll hunker down at home,” they say. “I won’t go to Wal-Mart,” they vow. “I’m going to homeschool my children,” they decide.
And right now, that might feel like the safest choice. After all…
You can’t even go get school supplies at Wal-Mart without getting shot at.
I could keep on going with that list of seemingly innocuous activities where people died. What the heck is this world coming to when these ordinary activities can turn into life or death situations? It’s enough to make you wonder if you should just stay home.
I don’t think you should just stay at home.
Unless your home is truly the only place you want to be, you shouldn’t let fear hold you captive. And that’s what I’m reading a whole lot right now. People are talking about never going to Wal-Mart again or never going to the sites of other shootings again.
And that is letting fear win. That’s letting these little terrorist punks have the last laugh. I, for one, simply refuse to do that, and I’ve written about it before.
If I stop going to concerts or movie theaters or festivals in the park because it might get blown up or shot up, isn’t that letting the terrorists win? I will do my very best to be alert and situationally aware, but by gosh, I’m not going to sit at home out of fear. I’m not going to convince myself that home or my small town or my country are the only places that I can be safe.
Why make your world small because of those people?…
…Just remember: bad things can happen at your local Piggly Wiggly when you’re there picking up a bag of potatoes. It can happen at a gas station when you stop to fill up. It can happen at your child’s piano recital. It can (and has more and more recently) happen at your place of worship.
Bad things can happen anywhere. And you need to be aware of this.
But you don’t need to give up your dreams of travel (if that is a dream of yours – it might not be) and you don’t need to limit your shopping to Amazon because there might be a mall shooter. You don’t have to wait a year for movies to show up on Netflix if you enjoy going to the theater.
It really sucks that so many people out there want to harm innocent people, but when you change your lifestyle because of them, they’ve won. And that’s sad indeed. (source)
A lot of people have changed their lives because of shooters and terror attacks.
People who used to travel stopped after 9/11. Some because of the attacks themselves and others because of the formation of the TSA. People who used to go to the movies stopped after the horrific attack in Aurora, Colorado. People stopped attending sporting events after the marathon bombing. People pulled their kids out of school due to all the shootings.
People stopped visiting Paris and London because of terrorists. They stopped going to concerts because of the Vegas shooting and the attack on Ariana Grande’s concert in England.
I think that locking ourselves into smaller and smaller worlds is a sad thing indeed. You should not change your life because of fear. You should get out there and celebrate being alive.
Obviously, some people really never wanted to go to concerts and movies and France in the first place and that’s fine too. I’m talking to the people who are regretfully declining to do things they really wish they could do.
Prepping doesn’t mean you need to create a prison of your own making. Prepping does not exclude traveling, attending events, or going to the store. It simply means that if you are out and something bad goes down, you’ll be ready to move into action fast. Some preppers disagree with my philosophy and that’s fine. We all have to make our own decisions and set our own limits.
I want to really live my life. And I can do that while still being prepared.
When terrorists win, they become bolder.
Just like any other bully, if you let these terrorist and mass shooters terrifying you into staying home and not living your life, they’re just going to get worse. They’re only going to become bolder until one of these days, taking your trash to the curb on garbage day is a life-threatening activity.
Ted Anthony of the AP wrote an excellent essay about this called “You Can’t Just Not Go.” Here’s an excerpt from it:
Are regular places safe anymore? Should we assume that they are?
There are, loosely, two types of reactions that sometimes overlap. One is to back off some, to take more precautions. One is to be defiant. That’s the approach that retired Marine Richard Ruiz, a Gilroy native, says he’s seen in Gilroy in the week since the garlic festival shooting.
“The thing that has changed in Gilroy is our focus,” said Ruiz, 42. “No one is showing signs of being worried or fearful in public. We’re emboldened. We want to go out more.”
In Squirrel Hill, the Pittsburgh neighborhood where a shooter killed 11 people at Tree of Life Synagogue last fall, a commitment to doing exactly that has helped ensure that civic life remains vibrant. There is little visible change except for the “Stronger than Hate” signs in some shop windows that encourage two things — a return to normal life and a commitment to never forgetting…
…the conversations that now take place — Should we go? Should we take the kids? What’s that noise? — reflect a society that, no matter people’s political beliefs, is starting to process what’s taking place in its midst.
This year marked two decades since two student gunmen killed 12 schoolmates and a teacher at Columbine High School outside Denver, a watershed moment in mass shootings. Sam Haviland, who was a junior at Columbine in 1999, knows other survivors who are fearful in public places or avoid them completely. After years of post-traumatic stress, she chose a different path.
“I decided that I didn’t want to live in fear and that I can’t control it, and so I’ve just come to terms with the fact that I may not be safe in public,” said Haviland, now director of counseling for Denver Public Schools. “The number of shootings since then has just reaffirmed for me that, you know, it’s a real possibility that shootings — that I might even survive another shooting.” (source)
Don’t let these sick people filled with hate ruin your life. Don’t allow them to keep you imprisoned in your home, no matter how wonderful that home might be. If you want to do something, don’t let the fear of a twisted, cowardly shooter keep you from doing that thing.
Should you go?
We all have to make our own decisions about how to handle the uptick in dangers and uncertainty in America. As for me, I’m still going. I’m still going to watch movies in theaters and go to festivals in the park and attend concerts. I’m still going to shop at a mall. I’m still going to travel all over the world every chance I get.
I’ll be cautious. I’ll be observant. I’ll be prepared mentally and physically should a mass shooting or terror attack occur. I’ll be ready to defend myself, ready to escape, ready to de-escalate, ready to fight back. But I will not be imprisoned by fear.
Maybe I’ll do all these things and something bad will never happen. Maybe if something bad happens, I’ll survive. Maybe I won’t.
But I will go. I will not let fear rule my life.
via ZeroHedge News https://ift.tt/2ZFSpKQ Tyler Durden
Dow futures are down over 650 points from the cash close, UST 10Y yields are down 5bps to a stunning 1.67%, and Yuan has plunged to a fresh record 7.1350… investors are suddenly demanding more rate-cuts…
Traders are now demanding 2.8 more rate-cuts in 2019… showing that Powell’s move last week was totally useless…
This is chaos! Will Powell go full-Bernanke and announce an emergency rate-cut?
via ZeroHedge News https://ift.tt/2KtEOj9 Tyler Durden
In the wake the two weekend mass shootings in El Paso and Dayton, which left 31 dead and many dozens injured, President Trump has rolled out newly proposed legislation expanding federal death penalty cases to include hate crimes and mass killings.
Today, I am also directing the Department of Justice to propose legislation ensuring that those who commit hate crimes and mass murders face the DEATH PENALTY – and that this capital punishment be delivered quickly, decisively, and without years of needless delay. pic.twitter.com/BDXdpelK7F
This comes after less than two weeks ago the Department of Justice announced that for the first time in nearly two decades it will resume capital punishment.
Attorney General William Barr had announced on July 25 that the process for the execution of five death-row in mates is set to move forward, marking the first federal executions since 2003.
“Congress has expressly authorized the death penalty through legislation adopted by the people’s representatives in both houses of Congress and signed by the President,” Barr said in a written statement previously released by the DOJ.
But Monday’s announcement means the DOJ will seek to tighten existing law to ensure “hate crimes” and “mass murders” will be tried as capital cases.
His solemn address at the White House condemned the gunmen in the two deadly mass shootings:“These barbaric slaughters are an assault upon our communities, an attack against out nation and a crime against all of humanity,” Trump said.
“Hate has no place in America. In one voice, our nation must condemn racism, bigotry and white supremacism,” he added.
via ZeroHedge News https://ift.tt/2M5rX9Z Tyler Durden
All the usual US gun control debates have of course reignited, which is understandable. Alongside this debate, however, we are seeing another, far more pernicious agenda being raised that I would like to address here.
In an interview with MSNBC’s Joy Reid, notorious liar and propagandistMalcolm Nance claimed that existing laws aren’t sufficient for prosecuting the El Paso shooter, because there are no laws designating his act of mass murder as “domestic terrorism”.
“I think that Congress needs to take up right away a series of domestic terrorism laws,” Nance said.
“It’d be very simple: just match them to the words ‘international terrorism’, so that a member of al-Qaeda and a member of a white nationalist terrorist cell or a militia that thinks they’re going to carry out international acts of terrorism are equal all the way around. Right now there are no laws called ‘domestic terrorism law’. They can get you for firearms, they get you for hate crimes, but you are not treated as a terrorist. This act in El Paso was clearly by all definitions a terrorist attack in the United States, but of course by the nature of the person being white and American he can’t be treated like a member of ISIS or al-Qaeda. He can’t even be detained, he can only be treated as a murderer.”
(The accused, for the record, is in fact under arrest currently, and prosecutors say that they are treating it as a domestic terrorism case for which they are seeking the death penalty. This is in Texas; he’ll be dead before the next Fast & Furious movie. Nance’s notion that prosecutors’ hands are somehow tied here is silly.)
“But he’s a murderer with a political intent who is spreading an ideology,” Nance continued.
“So Congress should take that up immediately. And let’s see if the White House won’t sign that legislation. That would be very revealing.”
In other words, shove the legislation through and call anyone who opposes it a Nazi lover.
Years of misguided alarmism over “Islamic terrorism” resulted in the erosion of civil liberties, militarization of police, and a host of other bad outcomes. Applying the same alarmist logic to “white nationalist terrorism” is likely to produce a host of similarly bad outcomes
“Years of misguided alarmism over ‘Islamic terrorism’ resulted in the erosion of civil liberties, militarization of police, and a host of other bad outcomes. Applying the same alarmist logic to ‘white nationalist terrorism’ is likely to produce a host of similarly bad outcomes,” tweeted independent journalist Michael Tracey in response to the chatter.
Political commentary is flooded with the word “terrorism” today. People are demanding that the El Paso shooter in particular and white supremacists in general be labeled terrorists by the narrative-making commentariat, and you know what? I totally get it. The push since 9/11 to tar Muslims as “terrorists” has been extremely obnoxious and fueled by hate and bigotry, so it makes sense for progressive-minded people to push for the egalitarian usage of that term. But before doing so, please reflect on what lessons we learned from the post-9/11 “Islamic terrorism” scare.
“I am telling you now that the government will use the violence that Trump himself has rallied as an excuse for more militarization, more surveillance, more violations of civil liberties – and a lot of people are going to welcome these things because they are afraid,” tweetedTruthout’s Kelly Hayes.
“I’m not guessing or being creative here. This is about having a sense of history and a sense of how these systems function in the present. I would love to be wrong. I would celebrate being wrong. But I’m not.”
Indeed, it is an established fact that the US government will use the narrative about the need to fight terrorism to advance pre-existing agendas. The first draft of the massive USA Patriot Act was introduced a week after the 9/11 attacks, far too fast for anyone to have gathered the necessary information from all the relevant government bodies about what changes were necessary and typed out the hundreds of pages of the bill. Legislators later admitted that they didn’t even have time to read through the densely worded bill before passing it the next month, so to believe that it could have been written in a week would be childish.
High-altitude surveillance balloons have been deployed over America to “deter narcotic trafficking and homeland security threats” via “hi-tech radar”. To be clear, this is not something they’re considering or opening up for public debate. This has already happened. https://t.co/q7IKr5WMLN
In 2011 then-Congressman Ron Paul told Politico that “the Patriot Act was written many, many years before 9/11,” adding that the attacks simply provided “an opportunity for some people to do what they wanted to do.” Paul was serving in Congress when the Patriot Act was passed. The Act has since been used to erode human rights at home and abroad by destroying Fourth Amendment protections and legalizing Orwellian surveillance, and it’s safe to assume that the opaque and unaccountable government agencies who were greatly empowered by it had already wanted this to happen.
I have no easy answers for America’s mass shooting epidemic, and as an Australian I see the gun control debate as outside my sovereign territory. I will simply suggest, as I so often do, that if Americans really want to address the problem then the best place to start is to do the first ever honest and in-depth study on the effects of domestic propaganda on the American mind, particularly war propaganda. There are only so many times a certain type of mind can be told violence-glorifying lies before it snaps; if anyone researches mass shootings in the light of the constant psychological abuse that Americans suffer at the hands of their mass media, I guarantee they’ll find a connection. Americans are the most propagandized people on earth because of their proximity to the most strategically crucial part of the empire; it’s not a coincidence that they’re also by far the most prone to mass shootings.
One thing I can tell you won’t fix your problems, America, and that’s listening to the propagandists who want you to hand over even more control to a government that has already begun floating high-altitude surveillance balloons over your country without your permission.
Don’t let them bully you with fear.
* * *
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Earlier today, in addition to the chaos surrounding the escalation of the US-China trade and currency war, we also got news which slipped under the radar that the CEO of HSBC, one which with $2.6 trillion in assets is the largest UK bank and the 6th largest bank in the world by assets, was unexpectedly quitting and his departure would also lead to mass layoffs, with the bank set to fire 4,000 workers, or about 2% of its workforce.
And while today’s market massacre succeeded in sweeping the HSBC news under the rug, one can’t help but wonder: is HSBC, which has had almost as many run-ins with the law as one particular infamous German bank, going to be the next Deutsche Bank?
For the answer we went to one of our blogging friends who runs the Strategic Macro blog, and who conveniently took a look at some of the cockroaches in HSBC’s basement. What he found was troubling, especially in light of the ongoing turmoil in Hong Kong which at any given moment is just a few minutes away and a false flag provocation away from a Chinese invasion.
So conventional wisdom is that post-Basel III the banks hold a lot of capital against loans and are run conservatively. And in a normalised market this is very true I think.
However when you are calculating LTVs and RWAs and PDs against bubble valuation levels, are they still appropriate? If you calculated it against replacement costs, the LTVs would go through the roof, and so would RWAs and the banks would be left with an CET tier 1 equity deficit to be covered by a rights issue. Any losses and higher RWAs on impaired loans would further cost equity.
So Hong Kong real estate which yields 1-2% rental yields in many cases, vs a Prime lending rate which is 5.15% is an enormous, negatively carrying bubble, propped up by speculation and Chinese capital flows.
HSBC is the 800lb gorilla in a banking system where M£ is >5x GDP.
M3 and Household debt to GDP:
Here are some excerpts from HSBC’s financials and Pillar 3 statements for Dec 18.
HSBCs 2018 AFS. $300bn plus exposure to HK and China.
Downside risk scenario involves small house price drops and ongoing economic growth.
Trade exacerbated downside drives a greater slowdown in 2019 only with recovery in H2-20.
$55bn of Category 3 loans to wholesale borrowers. Category 3 typically has a 100% RWA under Basel III.
$58bn of CRE, $2bn impaired
About $15bn in higher LTV wholesale loans:
$108bn in personal loans, of which about $3bn are impaired
About $25bn in loans above 51% LTV
However most of their book has RWA charges determined by their Internal Ratings Based approach:
Using their IRB approach retail mortgages have only a 0.7% probability of default and a few percent of loss given default. They calculate a 20% RWA charge against this.
Wholesale loan PDs are also under 70bps and seem to be applying a 30% RWA charge.
Only by IRB derived models and applying low PDs and low LDG rates have they been able to book these loans at 20 or 30% RWA levels and as such ‘Category 1 loans’. But Category 3, 4 or 5 loans carry 100% or 150% RWA charges. So any large falls in property prices and rise in PDs will absorb a lot of CET1.
As a reminder after the 1997 bubble imploded the Honk Kong residential index dropped from 172 to 59 between 1997 and June 03, a 66% drop in nominal terms and more in real.
And remember the prime lending rate is 5.15% and property yields 1-3%. Well they have 3 year interest deferred ARM mortgages to resolve for that…. I wonder if any of HSBC’s wholesale loans book is against such loans?
via ZeroHedge News https://ift.tt/2M9b7Yb Tyler Durden
“In retrospect, the spark might seem as ominous as a financial crash, as ordinary as a national election, or as trivial as a Tea Party. The catalyst will unfold according to a basic Crisis dynamic that underlies all of these scenarios: An initial spark will trigger a chain reaction of unyielding responses and further emergencies. The core elements of these scenarios (debt, civic decay, global disorder) will matter more than the details, which the catalyst will juxtapose and connect in some unknowable way. If foreign societies are also entering a Fourth Turning, this could accelerate the chain reaction. At home and abroad, these events will reflect the tearing of the civic fabric at points of extreme vulnerability – problem areas where America will have neglected, denied, or delayed needed action.” – The Fourth Turning – Strauss & Howe
The quote above captures the current Fourth Turning perfectly, even though it was written more than a decade before the 2008 financial tsunami struck. With global debt now exceeding $250 trillion, up 60% since the Crisis began, and $13 trillion of sovereign debt with negative yields, it is clear to all rational thinking individuals the next financial crisis will make 2008 look like a walk in the park. We are approaching the eleventh anniversary of this crisis period, with possibly a decade to go before a resolution.
As I was thinking about what confluence of economic factors might ignite the next bloody phase of this Fourth Turning, I realized economic factors have been the underlying cause of all four Crisis periods in American history.
The specific details of each crisis change, but economic catalysts have initiated all previous Fourth Turnings and led ultimately to bloody conflict. There is nothing in the current dynamic of this Fourth Turning which argues against a similar outcome. The immense debt, stock and real estate bubbles, created by feckless central bankers, corrupt politicians, and spineless government apparatchiks, have set the stage for the greatest financial calamity in world history.
Rather than taking the bitter medicine of purging the system of bad debt and allowing zombie banks and corporations to die, the ruling class has chosen to ramp up the debt orgy and reward themselves and their cronies with ill-gotten riches, while impoverishing the masses. Their arrogance and hubris have grown to vast proportions and will eventually result in a bloody backlash from those they have screwed over.
The election of Donald Trump over the hand-picked candidate of the oligarchy, was a reaction to the raping and pillaging of Main Street by the greedy soulless psychopaths in suits on Wall Street and in the halls of the Eccles building in Washington D.C. The average hard-working American has seen eight years of “government of the bankers, by the bankers, for the bankers”.
Wall Street was bailed out and rewarded with the ability to borrow at 0% from their captured Federal Reserve. Zombie corporations were kept alive with low interest debt, with no adjustment for risk. The cowardly politicians drove the national debt from $11.5 trillion to over $20 trillion, while accomplishing minimal GDP growth (negative growth using a real inflation rate), and enriching mega-corporations and the top .1%. Meanwhile, risk averse senior citizens, depending upon some interest income to survive, were thrown under the bus by Bernanke, Yellen and Powell.
It was the deplorables in flyover country, the blue-collar workers in Pennsylvania, Michigan, Wisconsin and Ohio, and senior citizens in Florida who voted their wallets, which had been picked by establishment politicians for the previous eight years. Good paying manufacturing jobs with health benefits have been replaced with low paying retail and service jobs with minimal benefits.
Retail store closings continue to accelerate, while credit card debt hits all-time highs, surpassing the 2008 levels. A critical thinking individual might conclude millions of Americans are running up their credit card balances by paying their utility bills, property tax bills, medical bills, and other necessities on credit. Thousands of retail stores wouldn’t be closing if people were still buying shit they didn’t need on credit.
After campaigning as if he would be a fiscally responsible president, Trump has been a disappointment regarding the budget. His “best economy ever” is nothing but a government spending driven, low interest rate, stock market boosting bubble. After promising to eliminate the debt during the campaign and railing against the low interest rate driven stock market bubble, Trump and the Republicans have added $2 trillion to the national debt, thus far.
The original projection for FY19 was around an $800 billion deficit, but the economy is “booming” so much, it will now reach at least $1.1 trillion. The rate of growth in the debt is outpacing the rate of growth of GDP, therefore we are regressing fiscally. Pointing this out is considered traitorous among Trump can do no wrong acolytes.
The two parties proved they have absolutely no interest in reducing or even slowing spending. They agreed to a two-year deal that will add at least $200 billion more to the annual deficits and increased the debt ceiling so they can keep borrowing. And this is even before the mandatory spending for Social Security, Medicare, and Medicaid kick into high gear in the coming years.
The fact doubling the national debt in the last ten years has not caused a catastrophe – yet – has created an arrogant hubristic ruling oligarchy who are sure they can run the debt to infinity with no adverse consequences. They have bought off the politicians, control the media, and use their Deep State surveillance assets to insure their continued control of the system and obscene riches. Meanwhile, the average American continues to be screwed and ripped off by both parties.
“Wherever we’re headed, America is evolving in ways most of us don’t like or understand. Individually focused yet collectively adrift, we wonder if we’re heading toward a waterfall. Are we?” – Strauss & Howe
The president and congress no longer even pretend to be fiscally responsible. They didn’t even pretend to try and pay for the increased spending. Trump’s tax cuts were sold as a way to have mega-corporations repatriate hundreds of billions from overseas and reinvigorate the economy with a surge in job creation.
With half the working public already paying little or no taxes, the tax cuts heavily favored the .1% and put $200 billion more into the coffers of the biggest corporations with the most powerful lobbyists. So, the politicians keep spending more on the military industrial complex and corporate tax revenues have plunged by two thirds, which will leave us with a $1.3 trillion deficit next year, even if we don’t fall into recession.
The three previous American Fourth Turnings were all initiated by economic issues.
The American Revolution began due to a decade of increasing tax repression by Britain over the American colonies. The Navigation Acts forced all trade on British ships, making it easy for British authorities to tax and regulate trade by cutting down on smuggling. The Stamp Act of 1765 was designed to increase revenue for the British, to pay their debts from the Seven Years War. The Sugar Act was designed to closely regulate the trade of products such as rum, molasses, and sugar. The Colonists became upset at such taxation without sufficient representation in Parliament.
Rebellious patriots began to boycott British goods. The Townsend Acts led the Sons of Liberty to dump British tea into the Boston Harbor, known forevermore as the Boston Tea Party. In retaliation, the British passed a series of acts later known as the Intolerable Acts, all designed to punish and reshape the colonial governance system to make it easier for the British to control the colonies. Ultimately, the economic warfare devolved into a shooting war that led to the existing social and political order being swept away.
The Civil War is commonly seen as a conflict only over slavery, but there was a huge economic component to the war. The industrial revolution in the North, during the first few decades of the 19th century, brought about a machine age urban economy that relied on wage laborers, not slaves. At the same time, the warmer Southern states continued to rely on slaves for their rural farming economy and cotton production. In 1805 there were just over one million slaves worth about $300 million; fifty-five years later there were four million slaves worth close to $3 billion.
In the 11 states that eventually formed the Confederacy, four out of ten people were slaves in 1860, and these people accounted for more than half the agricultural labor in those states. In the cotton regions the importance of slave labor was even greater. The value of capital invested in slaves roughly equaled the total value of all farmland and farm buildings in the South. More than two-thirds of all urban counties were in the Northeast and West; those two regions accounted for nearly 80 percent of the urban population of the country. By contrast, less than 7 percent of people in the 11 Southern states lived in urban counties.
Southerners viewed any attempt by the federal government to limit the rights of slave owners over their property as a potentially calamitous threat to their entire economic system. The South’s economic investment in slavery explains the willingness of Southerners to risk war when faced with what they viewed as a serious threat to their “peculiar institution” after the electoral victories of the Republican Party and President Abraham Lincoln the fall of 1860.
The industrial power of the North virtually insured victory, the longer the conflict extended. This may explain Lee’s aggressiveness in trying to strike a knockout blow during the early years of the war. The clear delineation of states based on their beliefs in 1860 sure resonates today when you view how the country voted in 2016. Will the drastic discrepancy in beliefs about how to govern this country lead to a similar outcome?
The last Fourth Turning, from 1929 until 1946, was most certainly propelled by economic disaster. The Great Stock Market Crash of 1929 and subsequent Great Depression followed five years of reckless credit expansion by the Federal Reserve. The Federal Reserve credit expansion in 1924 was in reaction to a business downturn and to assist the Bank of England in its wish to maintain prewar exchange rates. The strong US dollar and the weak British pound were to be readjusted to prewar conditions through a policy of inflation in the United States and deflation in Great Britain.
The credit expansion led to the Roaring Twenties. The volume of farm and urban mortgages expanded from $17 billion in 1921 to $27 billion in 1929. Large increases occurred in industrial, financial, and state and local government indebtedness simultaneously. This Federal Reserve spurred expansion of money and credit led to skyrocketing real-estate and stock prices. Sound familiar? The Federal Reserve is good at one thing – creating bubbles and subsequent busts. Notice how politicians always tell you everything is great. Best economy ever!!!
“No Congress of the United States ever assembled, on surveying the state of the Union, has met with a more pleasing prospect than that which appears at the present time. In the domestic field there is tranquility and contentment…and the highest record of years of prosperity. In the foreign field there is peace, the goodwill which comes from mutual understanding.”– Calvin Coolidge December 4, 1928
The politicians in Washington exacerbated the recession and created the Great Depression by trying to reverse the economic cycle. The Smoot-Hawley Tariff Act raised American tariffs to unparalleled levels, virtually closing our borders to foreign goods. American exports fell from $5.5 billion in 1929 to $1.7 billion in 1932. Our main exports were agricultural. The main creditors of American farmers were rural banks. When agriculture collapsed, the rural banks closed their doors collapsed.
Some 2,000 banks, with deposit liabilities of over $1.5 billion, closed their doors between August 1931, and February 1932. The whole nation, in fact, the whole world, fell into the cataclysm of despair and depression in 1931. American unemployment jumped to more than 8 million and continued to rise. Economic conditions collapsed and unemployment in 1932 surged to over 12 million. Again, politicians spewed happy talk as the situation worsened.
“While the crash only took place six months ago, I am convinced we have now passed through the worst — and with continued unity of effort we shall rapidly recover. There has been no significant bank or industrial failure. That danger, too, is safely behind us.”– Herbert Hoover, President of the United States, May 1, 1930
Three years later a new president closed all the banks and confiscated gold from American citizens.
“All safe deposit boxes in banks or financial institutions have been sealed… and may only be opened in the presence of an agent of the I.R.S.”– President F.D. Roosevelt, 1933
The causes for World War II are many, but the underlying source for the deaths of 65 million people was economic. The Treaty of Versailles, blaming the Germans solely for the First World War and demanding crippling reparations, was the nexus of World War II. Germany was forced to surrender colonial territories and militarily disarm, creating German resentfulness of the treaty. In 1923 the Weimer Republic delayed reparation payments, leading France and Belgium to occupy the Ruhr Valley, effectively appropriating the coal and metal production that took place there.
As much of German manufacturing was dependent on coal and metal, the loss of these industries created a negative economic shock leading to a severe contraction. This contraction, as well as the government’s continued printing of money to pay internal war debts, generated spiraling hyperinflation. This economic suffering and humiliation ultimately led to the population turning to Adolf Hitler as their savior.
The global trade contraction exacerbated the mistrust and anger building throughout the world. Tariffs and counter-tariffs made the Great Depression greater than it had to be. The protectionist policies of countries around the globe denied key raw materials to countries dependent upon imports. While the British, French, Soviets and Americans had large colonial empires to turn to for access to much needed raw materials, countries such as Germany, Italy and Japan did not.
“Have-not” nations found it increasingly necessary to use military force to annex territories with the much-needed resources. Such military force required extensive rearmament and, the case of Germany, meant a direct violation of the Versailles Treaty. This ultimately resulted in war breaking out in Europe. The American oil embargo on Japan ultimately resulted in the attack on Pearl Harbor and the start of the Pacific war.
In Part Two of this article I’ll ponder how the coming years will play out, based upon the dynamics of Fourth Turnings.
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via ZeroHedge News https://ift.tt/2MHeyon Tyler Durden
