SocGen Presents “The Most Depressing Chart Ever”

SocGen Presents “The Most Depressing Chart Ever”

Whereas SocGen’s Albert Edwards is mostly concerned with global macro phase transitions, and specifically when the current global economy will transform into a terminal deflationary singularity, one which Edwards calls the “Ice Age”, his just as bearish SocGen colleague Andrew Lapthorne has been more preoccupied with the micro in recent years, and this morning the strategist believes he has uncovered the “most depressing chart ever” (especially for active managers).

The chart, shown below, measures how many of the world’s 16,000 stocks have beaten the S&P 500 over one and two years. What it finds is that over the last couple of years, nearly 80% of stocks have failed to beat the broader index, making a mockery of the concept of “alpha” creation, and paying someone 2 and 20 to find value beyond the broader market. On the other hand, with activist central banks actively targeting broad market indexes for the past decade, and especially any time there is even a modest swoon, or whenever they fill like boosting investor (and consumer) confidence with a little NOT QE here and not so little NOT QE there, it should not come as a surprise that it is now virtually impossible to outperform the overall market.

Below we present the highlights from Lapthorne’s note, which start of by noting that “if the world is heading into a slowdown, global equity markets don’t seem to be that bothered.”

MSCI World rose 2.7% in November, which leaves it up 21.7% in 2019. Of course, 2019 performance figures are helped by the starting point, which coincided with the turn of the year and a handbrake turn from the Fed. Picking a less generous starting point, say end-January 2018, and global equities have returned 8.6% versus 10% for 10-year global government bonds. On a total return or a risk-adjusted return basis you were better off owning bonds. Though really, and as ever, the best asset to own was simply the S&P 500.

Lapthorne then reminds us of Warren Buffett’s famous recommendation, which urged retail investors to buy the S&P 500, as stockpickers regularly failed to beat it.

“He’s not wrong. The strong performance of the S&P 500 leaves everything in its wake. This is lauded as a success and an abject failure of active fund management. But, the S&P 500 is less a measurement of corporate success and increasingly an ingredient of ever more complex financial products.”

Which brings us to the punchline: “Once in a while we create a chart that is truly depressing.”

The chart below measures the percentage of global developed and emerging market stocks that have beaten the S&P 500 on a total return USD basis over one and two years. This is a very big universe of 16,000 stocks and over the last couple of years 78% of stocks (so over 12,400 stocks) have failed to beat the S&P 500. Over the last year things have got a little better with only 66% of stocks underperforming. This high-profile index provides such a tough performance benchmark that increasing it convinces investors that just buying the S&P 500 will do.

As the Socgen strategist concludes, “this is a big shame” and explains why:

Not because I want to bang the drum for active management  (admittedly a big part of our client basis), but if the measurement of company success is outperforming the 500 largest-cap US businesses supported by the US Federal Reserve, debt-funded share buybacks, and increasingly sophisticated financial products, then you can understand why less business are going public and private equity is booming. I find this depressing.”

So to all those who financial professionals who still foolishly support and cheer for the Fed, even though it is the Fed itself that is making all financial professionals obsolete in a world in which any dumb robot can just buy and hold the S&P for 0 and 0 as opposed to 2 and 20, we wonder just what else you need to see or experience before you too realize that central planning ends in tears for everyone involved. The only question is when.


Tyler Durden

Tue, 12/03/2019 – 15:10

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House Democrats Mull Pivot Back To Russiagate To Pad Weak Case For Impeachment

House Democrats Mull Pivot Back To Russiagate To Pad Weak Case For Impeachment

As House Democrats cobble together a ‘less than compelling’ case for impeachment based on President Trump’s request that Ukraine investigate Joe Biden and his son for Obama-era dealings with the appearance of obvious corruption, some members of the House Judiciary Committee and ‘other more liberal-minded lawmakers and congressional aides’ are looking back to Russiagate and other accusations for new material to include in articles of impeachment, according to the Washington Post.

Members of the House Judiciary Committee and other more liberal-minded lawmakers and congressional aides have been privately discussing the possibility of drafting articles that include obstruction of justice or other “high crimes” they believe are clearly outlined in special counsel Robert S. Mueller III’s report — or allegations that Trump has used his office to benefit his bottom line. –Washington Post

That said, moderate Democrats wary of impeachment blowback in their GOP-heavy districts have pushed back against the idea, according to the report. In addition, Democratic leaders seeking to keep the impeachment case focused on Ukraine have resisted expanding the case against Trump as well.

The debate is expected to play out in leadership and caucus meetings this week, as the House Intelligence Committee prepares to hand the impeachment inquiry to the House Judiciary Committee. The Intelligence Committee is scheduled to vote Tuesday night on its final report on Ukraine, allowing Judiciary to then work on writing articles of impeachment based on that document.

But the Judiciary Committee also has asked other investigative panels to send any findings of Trump-related misdeeds that they believe are impeachable. And many of the committee members are hoping articles will refer to and cite their own months-long investigation into the Mueller report, which described 10 possible instances of obstruction by the president.

“One crime of these sorts is enough, but when you have a pattern, it is even stronger,” said Rep. Pramila Jaypal (D-WA), a member of the House Judiciary Committee and co-chairman of the Congressional Progressive Caucus – who added that there’s a strong case for citing the Mueller report in impeachment articles.

“If you show that this is not only real in what’s happening with Ukraine, but it’s the exact same pattern that Mueller documented . . . to me, that just strengthens the case,” she insisted.

Trump is accused of holding up nearly $400 million in military aid to Ukraine while simultaneously requesting that newly elected president, Volodomyr Zelensky, investigate the Bidens as well as other matters related to the 2016 US election. Zelensky, who didn’t know the aid was paused at the time, has insisted there was no quid pro quo, while several anti-Trump ambassadors who testified in front of Schiff’s committee could not establish that the aid hinged on Trump’s request. Instead, they assumed it did.

Perhaps this is about more than just having a weak hand on the Ukraine claims. Assuming the House votes to impeach, the GOP-controlled Senate will then hold a trial. If Democrats expand the scope of the impeachment, Senate Republicans would be forced to consider all claims levied at Trump – effectively reducing the spotlight on Ukraine by overwhelming the proceedings.

Whatever the case, even if the Trump-Ukraine claims are forced to share space with Russiagate and emoulments arguments for impeachment, Senate Republicans can still subpoena Joe and Hunter Biden to testify about Burisma, as well as House Intelligence Committee Chair Adam Schiff (D-CA), whose staff communicated with the CIA officer whose whistleblower complaint is at the heart of the impeachment.

Earlier this week, House Republicans issued a “prebuttal” of the upcoming House Intelligence Committee report expected to outline claims that Trump abused his power.

In a 123-page document, GOP investigators assert that Democrats failed to make the case that Trump committed impeachable high crimes and misdemeanors by withholding military aid and a highly sought-after White House meeting to compel Ukraine to launch investigations into his political rivals. Nor, the Republicans say, do Democrats have a basis for impeachment in Trump’s decision to spurn House document requests and witness subpoenas pertaining to Trump’s Ukraine dealings.

Instead, the GOP document contends, the impeachment effort is “an orchestrated campaign to upend our political system” — one “based on the accusations and assumptions of unelected bureaucrats who disagreed with President Trump’s policy initiatives and processes.”

 According to the GOP report, “The evidence presented does not prove any of these Democrat allegations, and none of the Democrats’ witnesses testified to having evidence of bribery, extortion, or any high crime or misdemeanor.”


Tyler Durden

Tue, 12/03/2019 – 14:50

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British Virgin Islands Announce US Dollar-Backed Digital Currency

British Virgin Islands Announce US Dollar-Backed Digital Currency

Authored by Adrian Zmudzinski via CoinTelegraph.com,

Blockchain startup LifeLabs announced that it is developing a digital currency dubbed BVI~LIFE in partnership with the British Virgin Islands (BVI).

image courtesy of CoinTelegraph

According to a press release on Dec. 3, the currency is part of a broader initiative to grow the local fintech sector and will be presented during the BVI Digital Economy symposium. 

The coin will be a stablecoin pegged 1:1 to the U.S. dollar — which the BVI have used since 1959 — and its use is expected to reduce transactional fees, increase transaction speed and be accessible to outsiders such as tourists. 

LifeLabs is also developing Rapid Cash Response, a fund meant to provide aid in case of a national emergency. The local government already announced this initiative in April. BVI Premier Andrew Fahie said:

“The importance of blockchain technology and the significant benefits it offers the BVI, are paramount to the Territory. We welcome this innovation with open arms. Our partner, LIFElabs, has demonstrated with their proven track record that their ideology is not just mere words, and we look forward to continuing our partnership with them on the rollout of BVI~LIFE, our digital currency.”

The Life token will serve as gas

LifeLabs community manager Anwar Ali claimed that the transaction fees of the BVI~LIFE stablecoin will be paid in the firm’s Life tokens. According to cryptocurrency data website Coin360, the Life token’s price increased by nearly 31% over the last 24 hours, reaching $0.000083. 

While the BVI may be considering a dollar-pegged stablecoin, the Marshall Islands are developing a token in an effort to move away from the United States’ fiat currency. Earlier this year, officials announced that the Pacific island nation would develop a digital Sovereign that would be easily transmittable over the many islands that make up the country.


Tyler Durden

Tue, 12/03/2019 – 14:35

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Alexandria Ocasio-Cortez Is Right to Oppose This NYC Mega-Development

Fresh from their successful effort to kill Amazon’s plan for a second headquarters in New York City, Queens-area politicians, including “squad” member Rep. Alexandria Ocasio-Cortez (D–N.Y.), are trying to stop another mega-development at Sunnyside Yards.

There are good reasons to be skeptical of the Sunnyside Yards project, which involves building a massive deck over a 180-acre rail yard, creating space for the construction of new housing, offices, and community facilities. However, few of those reasons get a mention by Ocasio-Cortez and her anti-development allies.

“The proposal as it stands reflects a misalignment of priorities: development over reinvestment, commodification of public land over consideration of public good,” wrote Ocasio-Cortez and New York City Council Member Jimmy Van Bramer in a letter to the city’s Economic Development Corporation (EDC), which is coordinating an ongoing master planning process for the site.

“The proposed high-rise and mid-rise residential buildings would further exacerbate a housing crisis that displaces communities of color and parcels off public land to private real estate developers,” the two elected officials wrote.

Similar objections were raised in a letter by state Sen. Michael Gianaris (D–Queens), who wrote that the EDC “has not embraced a democratic process in implementing public input that prioritizes environmental and social justice.”

The argument that building housing where none currently exists would lead to displacement, and that dense urban development near transit would contribute to climate change, sparked a lot of eye-rolling from free market urbanists.

Michael Hendrix, the Manhattan Institute’s director of local and state policy, dismisses Ocasio-Cortez’s reasons for opposing the project as “garden-variety NIMBYism.”

The development of Sunnyside Yards offers the possibility of adding lots of new housing units, which should have the effect of reducing, not raising, housing costs and displacement.

A 2017 feasibility study prepared by the EDC at the instruction of Mayor Bill de Blasio—who’s been an enthusiastic backer of the project for years—examined three possible development test cases. A “residential” test case estimated that as many as 24,000 new units, including 7,200 that would be affordable, could be built on a decked-over version of Sunnyside Yards, alongside commercial and community space.

The other two test cases studied by the EDC envisioned less housing and more office or commercial space. Even these scenarios estimated that a Sunnyside Yards project could create a minimum of 14,000 new housing units.

That same 2017 feasibility study also identified a huge problem for project boosters: The cost of building a deck over Sunnyside Yards would massively outweigh the value of the development-friendly land that the deck is supposed to create.

The EDC study found that a deck over the rail yard would create between $3.33 billion and $3.98 billion in gross land proceeds. It also found that the costs of building the deck and supporting infrastructure would cost between $5.3 billion and $6.8 billion.

In other words, under the best-case-scenario, building a deck over Sunnyside Yard would lose $1.73 billion, with the potential for losses as high as $3.48 billion. This would, in effect, require government subsidies to make any development of Sunnyside Yards viable.

“A negative residual land value suggests that public investment is necessary to facilitate development,” reads the EDC report.

A negative residual land value also suggests that the development is not currently worth the expense, says Eric Kober, a former city planner and adjunct scholar the Manhattan Institute.

“For [Sunnyside Yards] to be viable in the long-term, the land that is being created on top of the rail yard would have to be extremely valuable. Right now, it’s not very valuable,” Kober says. “It’s not very valuable because there’re alternative places to do real estate development.”

According to Kober, there are still a lot of areas with development potential in New York City that don’t require building super-expensive decks over rail yards, including land adjacent to Sunnyside Yards in the Long Island City neighborhood, which is zoned for low-density manufacturing. Rezoning that land to allow for housing development would be a far would cost-effective way of adding new units, says Kober.

“One could imagine some decades from now, that all those opportunities will have been seized” and Sunnyside Yards becomes valuable enough to justify its development, he says. “That is not the case today.”

Of course, rezoning nearby areas to allow for redevelopment would also likely provoke the exact same concerns from anti-development politicians opposing Sunnyside Yards. Indeed, Justice For All—a community group opposed to the Sunnyside Yards project—has called for an immediate moratorium on all building permits in Long Island City.

That’s a counter-productive attitude. New York City is a rapidly growing urban area that’s been adding jobs much faster than it has been adding housing over the past decade.

The result is that more people are competing for the same number of housing units, raising rents for those who can afford to stay in the city, and forcing those who can’t into longer and longer commutes from comparatively cheaper suburbs.

Making New York City a more affordable place to live requires accommodating the city’s growth with more housing development, not fighting against such development.

Ocasio-Cortez’s opposition to Sunnyside Yards is rooted in an anti-growth mentality that will worsen problems of affordability and displacement—the very problems the congresswoman is clearly concerned about.

The master planning process for Sunnyside Yards is expected to be completed sometime next year. After that, any project at the site will spend years going through environmental review and the city’s planning process.

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Alexandria Ocasio-Cortez Is Right to Oppose This NYC Mega-Development

Fresh from their successful effort to kill Amazon’s plan for a second headquarters in New York City, Queens-area politicians, including “squad” member Rep. Alexandria Ocasio-Cortez (D–N.Y.), are trying to stop another mega-development at Sunnyside Yards.

There are good reasons to be skeptical of the Sunnyside Yards project, which involves building a massive deck over a 180-acre rail yard, creating space for the construction of new housing, offices, and community facilities. However, few of those reasons get a mention by Ocasio-Cortez and her anti-development allies.

“The proposal as it stands reflects a misalignment of priorities: development over reinvestment, commodification of public land over consideration of public good,” wrote Ocasio-Cortez and New York City Council Member Jimmy Van Bramer in a letter to the city’s Economic Development Corporation (EDC), which is coordinating an ongoing master planning process for the site.

“The proposed high-rise and mid-rise residential buildings would further exacerbate a housing crisis that displaces communities of color and parcels off public land to private real estate developers,” the two elected officials wrote.

Similar objections were raised in a letter by state Sen. Michael Gianaris (D–Queens), who wrote that the EDC “has not embraced a democratic process in implementing public input that prioritizes environmental and social justice.”

The argument that building housing where none currently exists would lead to displacement, and that dense urban development near transit would contribute to climate change, sparked a lot of eye-rolling from free market urbanists.

Michael Hendrix, the Manhattan Institute’s director of local and state policy, dismisses Ocasio-Cortez’s reasons for opposing the project as “garden-variety NIMBYism.”

The development of Sunnyside Yards offers the possibility of adding lots of new housing units, which should have the effect of reducing, not raising, housing costs and displacement.

A 2017 feasibility study prepared by the EDC at the instruction of Mayor Bill de Blasio—who’s been an enthusiastic backer of the project for years—examined three possible development test cases. A “residential” test case estimated that as many as 24,000 new units, including 7,200 that would be affordable, could be built on a decked-over version of Sunnyside Yards, alongside commercial and community space.

The other two test cases studied by the EDC envisioned less housing and more office or commercial space. Even these scenarios estimated that a Sunnyside Yards project could create a minimum of 14,000 new housing units.

That same 2017 feasibility study also identified a huge problem for project boosters: The cost of building a deck over Sunnyside Yards would massively outweigh the value of the development-friendly land that the deck is supposed to create.

The EDC study found that a deck over the rail yard would create between $3.33 billion and $3.98 billion in gross land proceeds. It also found that the costs of building the deck and supporting infrastructure would cost between $5.3 billion and $6.8 billion.

In other words, under the best-case-scenario, building a deck over Sunnyside Yard would lose $1.73 billion, with the potential for losses as high as $3.48 billion. This would, in effect, require government subsidies to make any development of Sunnyside Yards viable.

“A negative residual land value suggests that public investment is necessary to facilitate development,” reads the EDC report.

A negative residual land value also suggests that the development is not currently worth the expense, says Eric Kober, a former city planner and adjunct scholar the Manhattan Institute.

“For [Sunnyside Yards] to be viable in the long-term, the land that is being created on top of the rail yard would have to be extremely valuable. Right now, it’s not very valuable,” Kober says. “It’s not very valuable because there’re alternative places to do real estate development.”

According to Kober, there are still a lot of areas with development potential in New York City that don’t require building super-expensive decks over rail yards, including land adjacent to Sunnyside Yards in the Long Island City neighborhood, which is zoned for low-density manufacturing. Rezoning that land to allow for housing development would be a far would cost-effective way of adding new units, says Kober.

“One could imagine some decades from now, that all those opportunities will have been seized” and Sunnyside Yards becomes valuable enough to justify its development, he says. “That is not the case today.”

Of course, rezoning nearby areas to allow for redevelopment would also likely provoke the exact same concerns from anti-development politicians opposing Sunnyside Yards. Indeed, Justice For All—a community group opposed to the Sunnyside Yards project—has called for an immediate moratorium on all building permits in Long Island City.

That’s a counter-productive attitude. New York City is a rapidly growing urban area that’s been adding jobs much faster than it has been adding housing over the past decade.

The result is that more people are competing for the same number of housing units, raising rents for those who can afford to stay in the city, and forcing those who can’t into longer and longer commutes from comparatively cheaper suburbs.

Making New York City a more affordable place to live requires accommodating the city’s growth with more housing development, not fighting against such development.

Ocasio-Cortez’s opposition to Sunnyside Yards is rooted in an anti-growth mentality that will worsen problems of affordability and displacement—the very problems the congresswoman is clearly concerned about.

The master planning process for Sunnyside Yards is expected to be completed sometime next year. After that, any project at the site will spend years going through environmental review and the city’s planning process.

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Kamala Harris Suspends Campaign, Puts 2020 Presidential Ambitions in Lockup

Sen. Kamala Harris is calling it quits on running for president, the California Democrat confirmed publicly on Tuesday.

The news comes after a series of bad signs for the Harris 2020 campaign, including money troubles, low morale among staff, and a rapid drop in support in recent polls of Democratic voters.

After entering the Democratic presidential race amidst talk of frontrunner status and peaking mid-summer after her attacks on former Vice President Joe Biden, Harris has lately been bested in polls by the likes of Rep. Tulsi Gabbard (D–Hawaii) and newcomer candidate Michael Bloomberg.

Gabbard delivered several deadly blows to the Harris campaign, offering real talk during the Democratic debates about Harris’ criminal justice record and support for the status quo in Washington. While Harris should have been prepared for such attacks on her past record as a prosecutor, she responded to this and other Gabbard criticisms by making petty comments about Gabbard’s polling numbers and questioning Gabbard’s loyalty to the United States.

If Harris had merely been mush-mouthed about her time as a cop, that might have been one thing. But Harris also stumbled on a number of other critical issues, giving vague, convoluted, or ever-changing answers when asked about everything from Medicare for All to sex work decriminalization to school busing programs.

Harris’ tendency to mug for the camera and exhibit wild tone shifts during the debates didn’t do her any favors either. Even the Saturday Night Live portrayal of Harris (by actress Maya Rudoloph) centered on Harris’ striving for meme-wothy moments over substance when she’s on stage.

Still, the sudden announcement today that Harris would be suspending her 2020 campaign came to many as a surprise.

On Tuesday, Harris emailed supporters with the following message:

My campaign for president simply doesn’t have the financial resources we need to continue. I’m not a billionaire. I can’t fund my own campaign. And as the campaign has gone on, it’s become harder and harder to raise the money we need to compete.

In good faith, I can’t tell you, my supporters and volunteers, that I have a path forward if I don’t believe I do. So, to you my supporters, it is with deep regret ― but also with deep gratitude ― that I am suspending my campaign today.

This afternoon, Harris tweeted: “To my supporters, it is with deep regret—but also with deep gratitude—that I am suspending my campaign today. But I want to be clear with you: I will keep fighting every day for what this campaign has been about. Justice for the People. All the people.”

This may not be the last we hear of Harris this election, however. Harris “is a rather plausible VP selection for pretty much all of the leading contenders,” suggests FiveThirtyEight Editor Nate Silver, “and withdrawing now rather than after, say, a 6th place finish in Iowa or a 4th place finish in California probably helps preserve her reputation a bit.”

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Macron Hits Back, Questions Trump: How Can Turkey Buy Russian S-400s & Remain In NATO?

Macron Hits Back, Questions Trump: How Can Turkey Buy Russian S-400s & Remain In NATO?

Macron hits back after earlier in the day Trump took his NATO “brain death” comments to task saying they were “very nasty” remarks, and the French president also took a swipe at Turkey, saying “technically it is not possible” to purchase the S-400 anti-air defense system from the Russians and be a NATO member. 

Sitting next to Trump and fielding questions from reporters outlining their respective views of the state of the NATO alliance, it was clear the recent ‘bromance’ is no longer going strong. 

Trump actually laughed when Macron raised the heart of the Turkey issue, saying Erdogan can’t integrate Russian S-400 defense into NATO systems without deeply compromising the alliance. Macron questioned:

How is it possible to be a member of the alliance – to work with our office, to buy our materials, to be integrated – and to buy the S-400 from Russia? Technically it is not possible…

The two sparred over the question of what to do with western and European foreign fighters leaving the battlefield in Syria. 

Macron said to Trump, who in the past has claimed 100% defeat of ISIS: “The number one priority, because it’s not yet finished, is to get rid of ISIS…It’s not yet done. I’m sorry to say that.”

“Would you like some nice ISIS fighters?” Trump asked. “I could give them to you, you could take every one you want.”

“Let’s be serious,” Macron responded.

Macron then took Turkey to task for now being on the wrong side of counterterror efforts in Syria:

“They now are fighting against those who fight with us, who fought with us, shoulder to shoulder, against ISIS,” Macron said of Turkey.

As Bloomberg summarized of the testy exchange:

Trump, who effectively green-lit Turkey’s Syria incursion by withdrawing U.S. forces from a region on Turkey’s border, again blamed his predecessor Barack Obama for pushing Erdogan toward Moscow by allegedly refusing to sell Ankara the U.S. Patriot missile system.

* * *

earlier

With his allies up in arms over his latest tariff threats directed at France, President Trump landed in London early Tuesday, accompanied by First Lady Melania Trump, for a two-day summit marking the 70th anniversary of the military alliance’s birth. Trump is notorious for blaming America’s NATO partners for not paying their fair share when it comes to financing the military alliance.

Sitting alongside NATO General Secretary Jens Stoltenberg at Winfield House in London, Trump delivered a rambling address that marked the beginning of the summit, bragging about his progress with China, and claiming that the US is doing ‘very well’ when it comes to the still-unsigned ‘Phase One’ trade agreement.

There was talk of arms control progress, with Trump insisting that “Russia wants to do something badly and so do we.”

During previous administrations, summits like this one would have been a snoozefest. But President Trump has spiced up several NATO summits by starting drama with one or more of his fellow Nato leaders.

Justin Trudeau and Angela Merkel have been favorite targets of his in the past; but Trump is focusing his ire on French President Emmanuel Macron.

The problem is that Macron apparently told The Economist Magazine that Nato was experiencing “brain death,” and warned that members of the alliance could no longer rely on the US.

Unsurprisingly, Trump took umbrage at this, and dedicated a few minutes of his opening press conference to trashing Macron, accusing him of being “very, very nasty” and that it was “very insulting” for the French president to label Nato “brain dead.”

Watch a clip of Trump’s remarks below:

Trump added that relations between the US and European Nato members were not causing any divide, except with France. He could even envision France ‘breaking’ away from the military alliance.

“I do see France breaking off. I’m looking at him and I’m saying he [Macron] needs protection more than anybody and I see him breaking off, so I’m a little surprised at that,” Trump said.

Returning to the tariffs once more, Trump slammed France for trying to raise money via a “digital tax” levy on US tech giants like Facebook and Google.

“They are starting to tax other people’s products, so we are going to tax them,” Trump said

He also took a swipe a France’s economy, with its high unemployment rate, claiming that the country was “not doing well economically at all.” There’s some truth to that: The Q3 unemployment rate climbed o 8.6%.

Of course, some of the most scathing criticism of Nato has come from President Trump, with the president repeatedly declaring the alliance obsolete.

The president also made some comments about the possibility of delaying notifications.


Tyler Durden

Tue, 12/03/2019 – 14:15

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Politics
War Conflict

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Kamala Harris Suspends Campaign, Puts 2020 Presidential Ambitions in Lockup

Sen. Kamala Harris is calling it quits on running for president, the California Democrat confirmed publicly on Tuesday.

The news comes after a series of bad signs for the Harris 2020 campaign, including money troubles, low morale among staff, and a rapid drop in support in recent polls of Democratic voters.

After entering the Democratic presidential race amidst talk of frontrunner status and peaking mid-summer after her attacks on former Vice President Joe Biden, Harris has lately been bested in polls by the likes of Rep. Tulsi Gabbard (D–Hawaii) and newcomer candidate Michael Bloomberg.

Gabbard delivered several deadly blows to the Harris campaign, offering real talk during the Democratic debates about Harris’ criminal justice record and support for the status quo in Washington. While Harris should have been prepared for such attacks on her past record as a prosecutor, she responded to this and other Gabbard criticisms by making petty comments about Gabbard’s polling numbers and questioning Gabbard’s loyalty to the United States.

If Harris had merely been mush-mouthed about her time as a cop, that might have been one thing. But Harris also stumbled on a number of other critical issues, giving vague, convoluted, or ever-changing answers when asked about everything from Medicare for All to sex work decriminalization to school busing programs.

Harris’ tendency to mug for the camera and exhibit wild tone shifts during the debates didn’t do her any favors either. Even the Saturday Night Live portrayal of Harris (by actress Maya Rudoloph) centered on Harris’ striving for meme-wothy moments over substance when she’s on stage.

Still, the sudden announcement today that Harris would be suspending her 2020 campaign came to many as a surprise.

On Tuesday, Harris emailed supporters with the following message:

My campaign for president simply doesn’t have the financial resources we need to continue. I’m not a billionaire. I can’t fund my own campaign. And as the campaign has gone on, it’s become harder and harder to raise the money we need to compete.

In good faith, I can’t tell you, my supporters and volunteers, that I have a path forward if I don’t believe I do. So, to you my supporters, it is with deep regret ― but also with deep gratitude ― that I am suspending my campaign today.

This afternoon, Harris tweeted: “To my supporters, it is with deep regret—but also with deep gratitude—that I am suspending my campaign today. But I want to be clear with you: I will keep fighting every day for what this campaign has been about. Justice for the People. All the people.”

This may not be the last we hear of Harris this election, however. Harris “is a rather plausible VP selection for pretty much all of the leading contenders,” suggests FiveThirtyEight Editor Nate Silver, “and withdrawing now rather than after, say, a 6th place finish in Iowa or a 4th place finish in California probably helps preserve her reputation a bit.”

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House Intel Democrats Releases Trump Impeachment Report

House Intel Democrats Releases Trump Impeachment Report

After months of public and private testimony, the House Intelligence Committee chaired by Rep. Adam Schiff (D-CA) has released their impeachment report  accusing President Trump of misconduct by withholding military aid to Ukraine unless various demands were met.

Trump is also accused of obstructing the impeachment inquiry by instructing witnesses and agencies to ignore subpoenas for documents and testimony.

“The decision to move forward with an impeachment inquiry is not one we took lightly.  Under the best of circumstances, impeachment is a wrenching process for the nation.  I resisted calls to undertake an impeachment investigation for many months on that basis, notwithstanding the existence of presidential misconduct that I believed to be deeply unethical and damaging to our democracy.  The alarming events and actions detailed in this report, however, left us with no choice but to proceed.”

On Tuesday night, the committee will meet in a closed-door session to formally adopt the report.

The report comes one day after Republicans on the House Intel committee released their own “prebuttal” to the report, claiming Trump committed “no quid pro quo, bribery, extortion, or abuse of power. The Democrats’ report will be combined with the ‘prebuttal’ and sent to the House Judiciary Committee, which will draft articles of impeachment following their own inquiry.

Prebuttal bullet points (Via Axios):

  • They claim there is “nothing inherently wrong” with the Trump administration’s actions toward Ukraine and justify each of them in detail, including Rudy Giuliani’s direct involvement in U.S. diplomacy.
  • They say any references to a quid pro quo are conjecture and hearsay — including EU Ambassador and Trump donor Gordon Sondland’s testimony.
  • They question the origins of the impeachment inquiry and Democrats’ motives, and they allege that Democrats have wanted to undo the 2016 election since Trump won.
  • They mock Democrats for calling the impeachment inquiry a serious process, and they characterize the speedy nature of the inquiry as proof that House Speaker Nancy Pelosi is motivated by politics rather than substance.
  • They use Trump’s well-known skepticism about U.S. spending on foreign aid as justification for his hesitation to give money to Ukraine.
  • They say there was “nothing wrong” with asking questions about Hunter Biden’s role on the board of Burisma, a Ukrainian company, or renewing unfounded allegations about who interfered in the 2016 elections.

Developing…


Tyler Durden

Tue, 12/03/2019 – 13:58

Tags
Politics
Law Crime

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Have Fannie And Freddie Learned Nothing?

Have Fannie And Freddie Learned Nothing?

Authored by Andrew Moran via LibertyNation.com,

Is the housing market about to crash? Some analysts find pockets of weakness in the real estate market as proof that the housing bubble 2.0 is about to pop. One of the biggest markets in the country, Los Angeles, has witnessed a 31% plunge in condominium sales in the third quarter. The sky is not falling because this incident has a reason: Buyers from Beijing accounted for half of condo acquisitions since 2014, and now Chinese cash is drying up. In New York City, a quarter of new luxury apartments are unsold and empty.

Those forecasting a contraction in housing next year may need to wait a little bit longer. New-home construction permits, housing starts, and the average price of single-family homes are all recording growth. When you consider the latest announcement from the federal government and the Federal Reserve artificially lowering interest rates, you can expect continued expansion and higher prices.

That is not to say that you should be worried about a 2007-style crash. For now, the bubble will balloon. When it pops, head for shelter.

Fannie And Freddie Feeling A Loan

The Federal Housing Finance Agency (FHFA) recently announced that it would raise the limit on conforming loans. This means that Fannie Mae and Freddie Mac will allow borrowers nationwide to take out mortgages totaling $510,400; it will top $765,000 in high-cost areas. The loan limits were raised higher in all but 43 counties across the United States.

Conforming loans are mortgages that adhere to the financing limits outlined by the FHFA and meet the underwriting guidelines laid out by Fannie and Freddie. This is the fourth straight year that the conforming loan limit has been raised; it was frozen at $417,000 between 2006 and 2016.

According to federal legislation, conforming loan limits are mandated to be modified to reflect adjustments in housing prices. Since FHFA data suggest home prices have jumped more than 5% in the 12 months to September 2019, the limits were increased by that much.

A White Picket Fence

Many industry experts celebrate the decision because it is expected to spur growth in the number of consumers seeking mortgages. However, before you pop open a bit of the bubbly, practice some caution.

Moving forward, mortgages will be greater, Fannie and Freddie will be scooping up larger loans. In the event of a market downturn or another housing crash, the U.S. government is once again threatening the solvency of the two agencies. Because Fannie and Freddie have returned to their 2006 ways, there is no reason to doubt that they will go belly-up and request a bailout again.

Since 2014, the mortgage agencies have slashed their down payment rates to just 3%. This encouraged the private sector to follow suit as many lenders, such as Wells Fargo and Michigan-based Flagstar Bank, have adopted the same figure. So, if you are taking out a $510,000 mortgage and are only asked to put down 3%, then you have very little skin in the game. At the same time, they account for roughly half of all new mortgages.

Former President Barack Obama compounded the problem as his administration ordered the Federal Housing Administration (FHA) to cut annual mortgage insurance premiums to 0.85%.

In February 2018, the Treasury Department transferred a $5.1 billion bailout to Fannie and Freddie. Because Congress forced these entities to reduce the amount of capital on their balance sheets and allocate a quarter of their reserves to the Treasury, their coffers were relatively empty.

Barrier To Entry

Home price growth has somewhat slowed in recent years, but many markets have still priced would-be homebuyers out of the market. Constant reports show the American dream of homeownership is a distant reality for millennials. Or, if you successfully slipped into the market, then you could be one of the 4.5 million households possessing an underwater mortgage. It might be a bull market, but it is bearish for many other Americans.

The current expectation is that the higher limits will create new demand, even if housing supplies are short in numerous parts of the nation. But if sellers can receive the best dollar for their homes and see bidders can get a $510,000 mortgage, then wouldn’t they lift the starting price? Bidding wars are not as fierce as they once were, but they still account for about 10% of all properties.

Officials might have the right intentions — helping Americans achieve homeownership — but this maneuver has more consequences than you could count on your fingers and toes.

Blowing Bubbles

The federal government has completely distorted the real estate market. A decade after the housing crash, politicians and bureaucrats still have not learned the economic lessons. Presidential candidates are shooting for policies that caused the bubble in the first place, and paper pushers are doubling down on measures that fueled the collapse.

Some correctly point out that the optics of higher loan limits are creating consternation among investors. At the same time, they argue that the government is facilitating the financial system’s origination of jumbo mortgages – a borrower who has good credit but exceeds the conforming limit. You can blame the Federal Reserve for this because its historically low interest rates enable this type of reckless borrowing and lending. Thanks to cheap money and government bailouts of banks and Fannie and Freddie, you would not have interventionist measures that produce such moral hazards.


Tyler Durden

Tue, 12/03/2019 – 13:55

Tags
Business Finance

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