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Authored by Peter Earle via The American Institute for Economic Research,

On May 2020, bitcoin (BTC) will see its next halving: the reduction of the reward for successfully mining a block. The Nakamoto white paper specifies that every 210,000 blocks, the reward for successfully mining a block is cut by half. But while these halvings occur roughly every four years (with the estimated reward dropping to one Satoshi on or around the year 2140), the Bitcoin Halvening of 2020 is particularly momentous. 

At present, the reward for mining a block is 12.5 BTC; in May, the reward for successfully adding a block to the blockchain will drop to 6.25 BTC per block. The current annualized rate of “inflation” (some disambiguation regarding this later) is between 3.7 percent and 3.8 percent: an average of 144 blocks mined per day at 12.5 BTC each, yielding approximately 1,800 new BTC each day. 

(A quick point of disambiguation: To describe the expansion in size of bitcoin’s outstanding number of coins as inflation — what might be called the “float” in equities or the “money stock” in more conventional currencies — is consistent with an older definition; in the same sense, new gold being mined is, with respect to the existing, above-ground gold stock, “inflationary.” But today, the term inflation is used to describe, and assumed to mean, an increase in general price levels within an economy. In fact, from the perspective that with increasing value one bitcoin buys more over time, it is indisputably deflationary.)

What’s noteworthy about this point is that, upon this particular halving, bitcoin “inflating” at a roughly 1.8 percent rate annually will nominally — and by then, quite possibly in real terms — be “inflating” at a rate lower than both the Federal Reserve target of 2 percent per year and current, CPI-based estimates of real U.S. inflation of 1.9 percent annually.

Testing on Human Beings; No Institutional Review Board Required

In light of the broader field of monetary policy worldwide, the upcoming Halvening will come at a particularly auspicious juncture. Despite considerable efforts over more than a decade, the Federal Reserve (and other central banks) has attempted and failed to engineer a rate of inflation (in the case of the Federal Reserve, of 2 percent) even after vastly expanding the size of the Federal Reserve’s balance sheet and undertaking numerous other expansionary programs.

Even casual observers of global central banking practice will note that the apparent inability of the Federal Reserve, the European Central Bank, the Bank of Japan, and other such institutions to manufacture inflation has not led to some newfound respect (let alone humility) in light of their demonstrated lack of understanding of so powerful a force. Even a cursory review of history reveals that inflation is second only to war where forces laying waste to civilizations are considered.

To the contrary: Legions of economists within these (usually) quasi-public entities have redoubled their efforts, embracing unconventional policy implementations, the most recent and well-known of which are sequential phases of quantitative easing. Whether Federal Reserve economists have forgotten or don’t care that billions of real human beings toil beneath their policy machinations is an exercise for the reader to consider. 

Indeed, despite scores of warnings about the alleged dangers of low inflation, the drumbeat of statistics and other reports citing the deteriorating character of U.S. household finances leads one to question exactly what impact the Federal Reserve thinks that raising prices by several percentage points would have on tens of millions of families.

Contrarily, bitcoin’s limited supply has always been a draw for investors and spenders cognizant of the effects of inflation on purchasing power. With the rate of production of bitcoin via mining taking place at a rate less than the Federal Reserve’s stated target rate (and possibly less than the real rate of inflation), in May 2020, bitcoin may have economically incontestable reasons to become a legitimately competitive store of value versus most of the other world currencies. Part of that, of course, hinges critically upon price volatility.

Quantitative Easing versus Tightening

One may argue — I certainly am — that by algorithmically limiting the ultimate number of bitcoin that will ever exist, and further by making their origination (via mining) adhere to a predictable, transparent, and decrementing character, bitcoin (and more specifically the Hashcash proof-of-work protocol) closely approximates a monetary policy implementation known as qualitative tightening. That is to say, economically speaking, it is the diametric opposite of the qualitative-easing campaign that central banks are continuing to tinker with, at our peril.

This will undoubtedly add to its attractiveness and, barring the outbreak of extreme volatility, will likely increase its store-of-value characteristics. Many people believe that the Halvening of 2020 will spark a new uptrend in price, but that is far from certain. 

Although the market for bitcoin (and cryptocurrencies, more generally) is more liquid and transparent now than it was at the last halving, much, if not all, of the effect may already be priced in. Sentiment surrounding bitcoin has cooled in the last 18 to 24 months, and the entire crypto complex has traded differently since BTC futures contracts were introduced on the Chicago Board Options Exchange and subsequently cancelled (although they continue to trade on the Chicago Mercantile Exchange). 

The Bitcoin Halvening of 2020: Compelling Prospects 

There are plenty of reasons for which the arrival of bitcoin (and cryptocurrencies broadly) as an asset class a bit over a decade ago has been a most fortuitous development, not least of which is the increasingly experimental bent of central banks around the world. Alongside that are political candidates endorsing central planning and, to accomplish them, stooping to embrace outlandish monetary theories. 

Add to those reasons not only an algorithmically scheduled, predictable rate of inflation (again, in the antiquarian sense), but rates that are lower than both nominal and real rates of inflation, and bitcoin’s use case begins to look increasingly less speculative.

Yet another dangerous incident has played out between American and Russian forces operating in Syria in what appears a series of standoffs near key oil installations since Saturday. “This is the third incident that occurred within a week,” one local reporter told VOA in an alarming report.

Days ago we reported on the first incident involving a US convoy blocking a Russian convoy on a highway near the town of Rmelan, after the Americans were apparently concerned the Russians were going to enter an oil field, which the US administration says it has “secured”. 

But now Voice of America reports three total incidents, with the most recent ones happening Tuesday and Wednesday in al-Hasakah province, as newly detailed by the opposition outlet Syrian Observatory for Human Rights. 

All of the incidents involved US forces blocking Russian military vehicles and forcing them to turn around as they neared sensitive oil installations held by the US-backed Kurdish SDF and American special forces in Syria’s northeast. 

One eyewitness reporter on the ground described the following:

The incident on Tuesday is part of a series of similar incidents that happened in recent days between the two powers over their presence in Syria, local sources said. 

“This is the third incident that occurred within a week,” said Nishan Mohammad, a local reporter who said he witnessed another recent standoff between U.S. and Russian troops in northeast Syria.

“I was there last weekend when U.S. soldiers stopped Russian military vehicles and forced them to head back to their base,” he told VOA in a phone interview Tuesday.

SOHR: US troops settle on M4 to intercept Russian patrols amid continued tension between the two sides in north-eastern Syria https://t.co/T79zNX1JA2 pic.twitter.com/ya28k4Otwi

— Mutlu Civiroglu (@mutludc) January 22, 2020

While none of these close encounters between two major powers on disputed soil resulted in exchange of gunfire, it presents a potentially deadly situation which could set off spiraling escalation between two superpowers.

This is especially the case given the US and Russia now have small military installations dotting northern Syria in somewhat close proximity to one another.

#American_forces prevent #Russian_forces from heading east towards the #oil areas of #Remilan #NE_SYRIA # pic.twitter.com/7qhcUSAnS6

— MOHAMMED HASSAN (@MHJournalist) January 21, 2020

Months ago US troops withdrew from some northernmost Syrian towns amid a Turkish military incursion.

In some instances Russian forces immediately came in and took over the same installations, such as the sizable Sirrin Air Base in the northern Aleppo area.

#BREAKING #NE_SYRIA #American_forces prevent #Russian_forces from heading east towards the #oil areas of #Remilan #NE_SYRIA pic.twitter.com/q1h0aGCMzb

— MOHAMMED HASSAN (@MHJournalist) January 21, 2020

While it doesn’t appear Russia has any intent to “take the oil” like the White House has repeatedly pledged, Russian forces there do represent the interests of it’s ally Assad and the Syrian Army. 

And as Trump continues talking up “securing the oil” — most recently at Davos — Assad has simultaneously promised to retake all of sovereign Syria, especially the oil-rich Deir Ezzor and Hasakah provinces. 

President Trump said while addressing reporters on the sidelines of the World Economic Forum (WEF) on Wednesday: “But very importantly, as you know, we have the oil. And we left soldiers for the oil, because we take the oil and we’re working on that, and we have it very nicely secured.”

Hunter Biden has been ordered to stand in front of an Arkansas judge next Tuedsay to explain why he shouldn’t be held in contempt of court for failing to produce a laundry list of financial and personal information in his ongoing child support dispute with stripper Lunden Alexis Roberts.

Roberts asked the court on Tuesday to hold Biden in contempt for failing to disclose financial information, contact information, and “a list of all companies he currently owns or in which he has an ownership interest,” as well as “all companies in which he has had an ownership interest in the past five years.“

Also sought are a copy of Biden’s 2017 and 2018 tax returns, deeds to properties he owns, and an executed copy of a financial records release Biden has been avoiding filing unless the court allows him to do so under seal.

“The defendant continues to act as though he has no respect for this Court, its orders, the legal process in this state, or the needs of his child for support,” reads the filing, which adds “This is but another example of the defendant’s unnecessary actions to frustrate prompt adjudication of this matter and increase the plaintiff’s litigation costs.“

Circuit Court Judge Holly Meyer agreed, ordering Biden to appear in person to explain his failure to produce the requested information which was due in August, 2019.

In November, a DNA test revealed Hunter to be the father of the unnamed child with Roberts. In order to determine what Biden can cough up, Roberts has sought extensive financial records for periods which include his time on the board of a Ukrainian energy company while his father was the Obama administration’s point-man on Ukraine.

Hunter served on Burisma’s board from 2014 through 2018, while his father openly bragged about getting a prosecutor fired who was investigating the company’s founder for a variety of white-collar crimes.

Hunter Biden did not receive any direct compensation from Burisma — rather, the Ukrainian company wired funds to Rosemont Seneca Bohai (RSB), an American firm controlled by Hunter Biden’s longtime business partner Devon Archer. Between June 2014 and October 2015, RSB wired a total of $708,302 to Hunter Biden for undisclosed purposes while RSB was receiving funds from Burisma.

The IRS placed a tax lien on Hunter Biden for $112,805 in unpaid taxes from 2015, the Daily Caller News Foundation previously reported. –Daily Caller

While Congressional Democrats insist the entire affair was above board, and “debunked,” it is apparently too radioactive for lawmakers to delve into, despite the fact that it’s at the center of impeachment proceedings against President Donald Trump – who withheld almost $400 million in US military aid to Ukraine while he was pushing for an investigation into the Bidens.

With phase-one talks signed last week, China’s GDP growth in 2019 plunged to a 29-year low amid massive credit stimulus that has widely been ineffective to boost growth but has somewhat stabilized the economy. 

China’s largest utility company State Grid has warned that the rate of economic growth in the country is expected to slide to 4% in the next four years.

There was even a report on Tuesday showing China has already blamed the 2020 economic slowdown on the coronavirus epidemic that has already killed nine with at least 440 people infected in the country and spreading across the region, along with a new case in the U.S. 

The Communist Party of China has been quick to blame the slowdown on external factors, such as the trade war and other protectionist policies of President Trump, rather than their failures of amassing more than $40 trillion of debt, nearly 304% of GDP.

Coronavirus cases have been found in other places out of Wuhan, Hubei Province, indicating the epidemic is expanding. Concerns are mounting. It is inevitable that people will cut their trips during Spring Festival and holiday consumption will be hit.

— Hu Xijin 胡锡进 (@HuXijin_GT) January 21, 2020

Now we’re starting to get more local data, on a provincial level, that shows many regions and municipalities have cut their 2020 growth targets over the prior year, reported Reuters.

About 22 provinces have slashed growth targets this year, including Beijing, Guangdong, Zhejiang, Henan, Hainan, and Fujian. 

Beijing, Shanghai, and Guangdong have all cut their target of 6.5% to 6% growth to about 6% in 2020, in line with the national goal of 6%.

Local government data shows at least 11 provinces have missed their 2019 growth targets and are expected to underperform this year.

The northeastern province of Heilongjiang will range around 5% growth for this year, with the Tibet Autonomous Region to see about 9%. 

Policy sources within China told Reuters that provinces would ramp up infrastructure spending to offset the slowdown. 

“Much of the national slowdown last year was driven by exports which will have weighed on the south and east more,” said Julian Evans-Pritchard, senior China Economist at Capital Economics, in an email to Reuters.

China’s GDP data is often skewed – and for more color on the country’s economic activity — Fathom Consulting’s China Momentum Indicator 3.0 (CMI 3.0) shows GDP growth well under 6% and stagnating.

Via Resume.io,

Money and education don’t always go hand-in-hand, but it doesn’t hurt to sway the odds in your favor by studying hard at college. However, sometimes choosing the most appropriate degree is the hardest part. It can be helpful to look for inspiration from people who have already become a success in your chosen industry.

A few months back, we showed you the College Degree of the Top‑earning CEO in Every State. Now we’ve researched and compiled a list of the college degree taken by the richest person in every country around the world.

The map we’ve created focuses on the undergraduate degrees that the world’s richest people have attained. There are instances where some of these people have attained qualifications without an undergraduate degree (e.g. Graeme Hart of New Zealand completed an MBA but has no undergrad degree, so is marked as ‘no undergrad degree’), but all people marked as ‘no degree’ have no higher-education qualifications at all. Some people also failed to complete their degree, they have been labelled as ‘incomplete’. There are also instances where a family is classed as a country’s ‘richest person’ and so we have labelled them according to their family’s cumulative qualifications (e.g. Croatia is marked as ‘multiple degrees’). In all instances we’ve tried to make the labelling as clear as possible, but for a more in-depth look check out our research here. 

If you’re hoping your higher education is to be a stepping stone on the route to your first billion dollars, then check out the map below and see what undergrad degree is necessary to become one of the world’s richest people.

1. North America

The richest man in the United States is also the richest man in the world, but Jeff Bezos had a lean 2019. The Amazon boss’s divorce settlement made ex-wife MacKenzie one of the richest five women in America and the world, allowing Bill Gates to briefly topple Jeff from the top spot. Jeff studied Electrical Engineering and Computer Science at Princeton, and MacKenzie studied English at the same institution a few years later.

The tiny islands of Saint Kitts and Nevis boast USANA founder, Myron Wentz, as their richest person. However, he was born in the US and switched his citizenship for the tax haven of St. Kitts in the 1990s. This is a marked difference from the likes of Bill Gates, who once said, “I’ve paid more taxes, over $10 billion, than anyone else, but the government should require people in my position to pay significantly higher taxes.”

2. Europe

Albania’s richest person, Samir Mane, didn’t make much use of his college degree when building his fortune. He began studying geology in Vienna in 1991 but quit during his first year. He later said, “basically I learned German there.” However, the language and cultural skills he picked up proved useful, as he built his business exporting cheap TVs and VCRs from Austria to his home country.

Bulgaria’s richest person, Vasil Bojkov, has an interesting education. He attended Bulgaria’s National High School of Mathematics and used degrees in Applied Mathematics and Labor Economics to power-up his trading, insurance, and gambling businesses. But he also has a degree in History of Art from Universidad de Buenos Aires. Bojkov’s patronage of the arts is renowned, and his enjoyment of beauty and creativity is evident in his famed antique collection because an education isn’t all about getting rich!

3. Africa

Africa is a continent of vast contrasts. Economically, South Africa is the most unequal country in the world. In Nigeria, the five wealthiest people have a combined fortune that outweighs the national budget, while six out of ten people live on less than $1.25 per day. This disparity can be traced between different countries, too. For example, Nigeria’s richest man, Aliko Dangote, has a US$8.8 billion fortune against Liberia’s Benoni Urey, who has ‘just’ $32 million. 

Both made a lot of money selling things everybody needs. Dangote took Business Studies and Administration, but got his first business lessons in the playground: “I can remember when I was in primary school, I would go and buy cartons of sweets [candy] and I would start selling them just to make money,” he says. His company now supplies 70% of Nigeria’s sugar. Urey studied General Science, and his business interests include housing and Liberia’s biggest cellphone network.

4. Asia

The richest person in almost every Asian country is of the ‘billionaire’ variety. The overall number one is India’s Mukesh Ambani, boss of his late father’s gas and oil company. Ambani’s education is on the science side of things rather than business: he studied chemical engineering. But that doesn’t mean he is afraid to branch out, and the company recently launched a 4G service. “Anything and everything that can go digital is going digital,” says Ambani. “India cannot afford to be left behind.”

Taiwan, Thailand, China, and Brunei are among nations whose top billionaires have no degree at all. In some cases, wealth is inherited by royalty. But Li Ka-shing, China’s richest man and the 30th richest in the world, is a self-made plastics magnate who started his business with loans of just $6,500 when he was 21. He is known for his philanthropic work and recently pledged HK$1 billion ($127 million) to support businesses affected by the protests in Hong Kong.

5. South America

Iris Fontbona inherited husband Andrónico Luksic’s mining and beverage empire in 2005. But the world’s richest Latina has capitalized on the opportunity by driving the family business to ever-greater success. Fontbana has no degree but has significantly expanded the mines and brewery business as well as buying majority shares in the TV channel, Canal 13. 

The richest person in South America (with $24.6 billion) is another brewer. Brazil’s Jorge Paulo Lemann has controlling shares in Anheuser-Busch InBev, the world’s largest brewer, which in turn owns Pilsner Urquell and Foster’s Lager. But he originated his fortune as founder of investment firm 3G Capital. His degree is in Economics from Harvard, which must make it easier to count all that money.

6. Oceania

Oceania’s richest person, the Australian Gina Rinehart, began studying economics at the University of Sydney but dropped out to get a hands-on education at her father’s iron ore mining business. She learned well from what she saw. When her father died, leaving behind a bankrupt estate, Rinehart turned around the family business’s fortunes, transforming it into one of Australia’s leading mining concerns.

New Zealand’s Graeme Hart has earned an MBA from the University of Otago’s business school. Hart was admitted to the school without attaining an undergraduate degree and so in our map is marked  as having ‘no degree’.

There aren’t many teachers on our list of the richest people list. But Papua New Guinea’s richest person – former prime minister Michael Somare – used his teaching qualification to inspire young minds at several primary and secondary schools before going into politics.

When it comes to developing your career, your degree isn’t just about what you know – it’s about how your education makes you think. Sometimes the wisest choice is to pick a subject that will broaden your understanding of the world and to get your industry knowledge through work experience. How does your choice of degree relate to your choice of career? 

Sources

To see the research behind this project visit bit.ly/RichestPeoplesDegrees

Methodology

We began by researching the ‘richest person in X country,’ ‘wealthiest person in X’ and variations in French and Spanish, then sifted the first three pages of Google results. In all instances where articles existed that responded to the search term, there was a very clear consensus across the sources. The only divergence showed up between changes in the list over time (e.g., a list of the wealthiest people from 2017 versus a list from 2019). To find a back-up source, we’d search for ‘richest person in X’ followed by the name our initial search had thrown up.

No distinction has been made between people from a country but resident elsewhere and people both from the country and resident there. We allowed both to qualify. To insist on determining individuals’ citizenship or residency would undoubtedly have increased the number of ‘No data’ entries, not least as the super-wealthy are rarely tied to one country.

Note that the issue of wealth is a secretive one. Sometimes we could only find a small number of sources, and on occasion, footnotes for these sources were broken. In some other cases, sources claimed that a person was the richest (or made a claim as to their college degree), but the original source was not consistently backed up with a citation.

Concerning the qualifications our research focussed on undergraduate degrees. We have not included information on master’s degrees, doctorates or any other type of post-graduate degree. There were several instances where we could find evidence of a person gaining a degree but could not find what the degree was in. These cases are marked as unknown. In some instances individuals have attained qualifications without an undergraduate degree. For example, Graeme Hart of New Zealand completed an MBA but has no undergrad degree. In this case we have labelled him as having ‘no degree’.  

There were also instances where families are considered the ‘richest people’ in their country. For the sake of simplicity we have formatted these families in the same way we have formatted individuals.

Lebanon has a new Hezbollah-dominated and backed government after three months of protests have gripped the country, which no doubt has raised alarm for both Israel and the United States, especially given West-backed political parties were largely sidelined in the forming of Michel Aoun’s new handpicked cabinet, especially when it comes to Hezbollah’s top candidate for prime minister, newly sworn in (as of Tuesday) Hassan Diab.

To make matters worse for Tel Aviv, Iran’s Islamic Revolutionary Guards Quds Force has now named a #2 under Gen. Esmail Qaani — who himself had served as now slain Soleimani’s deputy for more than a decade. The new Quds deputy commander alongside top Quds chief Qaani is Mohammed Hejazi, according to The Jerusalem Post, who crucially is considered a longtime “central figure in Iran’s operations in Lebanon”.

Last August a statement by the Israeli Defense Forces (IDF) named Hejazi as among three top IRGC commanders working to fast establish Hezbollah missile factories which can produce precision guided missiles, in preparation for the next major conflict with the Jewish state. 

Israeli media reports suggest that before entering the Quds force, which is the elite covert foreign arm of the IRGC, Mohammed Hejazi was a key enforcer helping Tehran put down protests, such as the 2009 presidential election mass demonstrations. 

These 3 Iranian commanders are working on a secret¹ project with Hezbollah to manufacture precision guided missiles to attack Israel.

—
¹not so secret anymore. pic.twitter.com/ZLFsOr9yLz

— Israel Defense Forces (@IDF) August 29, 2019

According to a profile in The Jerusalem Post, his career outside the country has been focused in bolstering Hezbollah’s weapons capabilities inside Lebanon:

He faded from public view in 2014, and seems to have been in Lebanon during that time, helping Hezbollah stockpile and improve its estimated 150,000 missiles. Al-Ain media reports that he was Hezbollah’s key man linking them to the IRGC. He likely grew into this role after the death of Imad Mughniyeh who was assassinated in 2008.

He helped supply arms to Hezbollah and help it with its precision guided missile programs. These programs have been spotlighted as a key threat to the region and Israel. Hezbollah wants to create local manufacturing bases for the precision guidance that would make its arsenal more dangerous. In March 2019 Israel said Hezbollah was seeking to set up an advanced missile plant in the Beka’a valley.

The US administration has lately sought to pressure the Lebanese government into ensuring no domestic missile manufacturing is established under the aegis of Hezbollah. 

Washington has long seen the Shia paramilitary group — which also has seats in parliament and a huge following in the country — as but a foreign arm of Iran and the Ayatollah; however, many Lebanese and people across the region see Hezbollah as a legitimate homegrown ‘resistance’ movement giving the historically oppressed Shia of south Lebanon a political voice. 

Starting last August into September,  Israel dramatically stepped up its so-called anti-Iranian expansion campaign inside Lebanon which involved a series of attacks and assassination attempts in south Beirut and the Lebanese countryside using IDF drones. 

Tel Aviv officials have repeatedly warned that Hezbollah missile manufacturing plants are a ‘red line’ against which the Israeli military would act. 

Via Economic Cycle Research Institute (ECRI),

The consensus is that the U.S. consumer is still strong enough to propel the economy forward even though the manufacturing sector has weakened. This view underpins expectations for improved corporate earnings in 2020. But the hard economic data strikes a discordant note.

In particular, growth in industrial production on a year-over-year basis remains in a decisive downturn, sliding deeper into negative territory. Indeed, the production actually declined in 2019 amid losses in manufacturing job in recent months, fueling talk of a recession in that part of the economy.

The undeniable weakness in manufacturing has caused the consensus to trumpet the strength of the consumer. Yet, the consumer, while reportedly confident, is not spending hand over fist. Rather, weakening sales trends [which we flagged ahead of the holiday season] underscore a sustained slowdown in consumer spending.

Real retail sales growth fell to a six-month low of 1.25% in November on a year-over-year basis, dropping from 3.75% two years earlier. Yes, there was a big rebound in December, but that was mostly due to a highly favorable comparison to the disastrous December 2018 plunge in retail sales. Plus, that doesn’t negate the fact that spending growth has been tailing off even though surveys report a confident consumer and the stock market is at record highs.

So, what gives? The lifeblood of the average consumer is job growth, not stock prices. So it’s important to recognize that year-over-year growth in nonfarm payrolls has dropped to its lowest level in 2.25 years. Not only that, but growth in total hours worked – which reflects growth in both jobs and the length of the workweek – hasn’t been this weak since 2010, dropping to 0.9% in December from just over 2% a year earlier.

Worse still, growth in total pay has fallen even faster over the past year or so than growth in hours worked, slowing to a 3.8% pace from almost 5.5%. As a result, the year-over-year growth in average hourly earnings – the ratio of total pay to total hours worked – has fallen to 1.1% from 1.6%. This is the math behind the worrisome downturn in wage growth even in the face of a very low 3.5% jobless rate that has furrowed the brows of many economists.

For the average American, that sharp slowdown in the growth of total pay limits spending growth. No matter how confident consumers might feel, there’s only so much fresh debt they can realistically incur to support even more spending. The hard data shows growth in jobs, total pay and total hours worked are stuck in cyclical downswings. It also shows weakening trends in consumer spending and industrial production growth.

So while financial markets buoyed by increasingly accommodative central banks may be supportive of higher-income consumers, the average American is under considerable strain. Despite low yields on U.S. Treasury securities, average credit card rates have climbed inexorably in the last five years, surging above 15% in 2019. Meanwhile, one third of those buying new vehicles have negative equity in the used ones they are trading in, up from about one quarter before the financial crisis. And farm debt has topped $400 billion, up almost 40% since 2012.

 All this is why the boost to the economy from the Federal Reserve’s dovish pivot a year ago has primarily aided relatively narrow parts of the economy, such as financial services, residential construction and affluent consumers. But it has not helped business investment or average consumers, making it difficult to ignite an acceleration in overall economic growth.

Regardless of the consensus view that the consumer is “strong,” there’s actually little indication that the deceleration in economic growth is over. As long as that’s the case, the risk of a recession – while not a clear and present danger – can’t be taken off the table for 2020.

* * *

Wall Street has prematurely gone all-in on the “strong” consumer narrative at a time when a manufacturing recession has triggered an employment slowdown that could start weighing on consumer spending.

Money managers and leverage funds have front-run a V-shape economic rebound thanks to an abundance of Federal Reserve liquidity.

With the economy continuing to decelerate and no signs of a significant upturn – and the threat the consumer could start weakening – the stock market’s most important support – buybacks – are rapidly declining.

If Fed liquidity shrinks, buybacks continue to decline, and a manufacturing recession transmits weakness into consumers — it seems that a blow-off top similar to the Dot Com era could be nearing. 

 

The rose-emoji-loving twitter blue checkmarks love complaining about esoteric financial concepts that they don’t understand. But as the old saying goes, even a broken clock is right twice a day, and once in a while, even they get it right.

As the coronavirus spreads around the world and the Davos billionaire circle-jerk enters its second day, the professional outrage mob has instead chosen the bankruptcy as obscure NYC supermarket chain Fairway as the trending topic du jour.

David Roth, a former Deadspin writer who used his platform to mewl about the ‘evil’ Trump administration in a series of whiny diatribes, lamented that Americans haven’t already risen up and dismantled the private equity industry. Especially considering that the PE business model relies on buying companies and then dismantling, or bankrupting, them for a profit (though only a handful of private equity firms are truly that ruthless).

To be sure, Roth admits that the only reason he cares about Fairway going under is because it directly affects him, and all the other NYC media denizens who relied on the grocery chain.

It’s one thing that private equity destroyed my workplace and my job. Fair play, it happens. But private equity forcing Fairway into bankruptcy is really going to fuck my life up. This I cannot accept.

— David Roth (@david_j_roth) January 22, 2020

It sucks how housebroken and Stockholm Syndrome’d American culture is at this moment, but just accepting that every now and then profitable businesses are driven into bankruptcy by private equity mutants, quite legally and quite profitably for them, might be the worst of all.

— David Roth (@david_j_roth) January 22, 2020

Others made a slightly more nuanced point: The failure of Fairway isn’t so much an indictment of the private equity industry as a whole, but rather of the greed and incompetence of managers who drive a thriving business into bankruptcy.

In quiet awe of the private equity guys who managed to turn a handful of beloved and heavily trafficked supermarkets in the richest parts of the richest city on earth and somehow make them bankrupt and 175 million dollars in debt https://t.co/9HZrNH5NsG

— Tom Gara (@tomgara) January 22, 2020

Though bankruptcy can help firms cut their losses, and often allow them to escape with profits while sticking lenders with the bill, few would argue that turning a private business profitable and then either selling it to Amazon or taking it public would have been a more profitable strategy.

However, in an unexpected twist, Fairway issued a statement hours after the New York Post reported the bankruptcy disputing that it plans to file for Chapter 7 and liquidate its stores.

New —> FAIRWAY, the iconic NYC supermarket, says it has NO intention of filing for bankruptcy or closing stores.
Disputing today’s report in the NYPost. pic.twitter.com/lTpgXS4Q2l

— Clifford Levy (@cliffordlevy) January 22, 2020

Instead, the company said it soon plans to announce a “value-maximizing transaction” that will allow for the “ongoing operation” of all 14 of its stores.

New —> FAIRWAY, the iconic NYC supermarket, says it has NO intention of filing for bankruptcy or closing stores.
Disputing today’s report in the NYPost. pic.twitter.com/lTpgXS4Q2l

— Clifford Levy (@cliffordlevy) January 22, 2020

But one reporter pointed out that Fairway has a strong incentive to vehemently deny the report, since warnings about an imminent move to liquidate might spook the company’s vendors, prompting them to aggressively tighten credit restrictions.

the Fairway bankruptcy report & rebuttal is an interesting situation for a couple of different reasons

obviously there’s the PE thing

But also, these types of reports can actually precipitate (or speed up) a bankruptcy filing

— Alexandra Scaggs (@alexandrascaggs) January 22, 2020

The Post did hedge its reporting by claiming that rumors of a Fairway bankruptcy were circulating even amid “ongoing interest” in the Fairway brand by a potential rival. Any potential buyers are probably approaching with trepidation given Fairway’s massive $174 million debt load and its expensive leases, including a $6 million rent obligation for its flagship store.

If the company does move ahead with plans to enter restructuring, this would be Fairway’s second trip through bankruptcy, which is how the private equity firms gained control of the company in the first place.

So maybe those private equity guys aren’t so stupid after all. Either way, we suspect we will know soon enough, because even if Fairway does make it to liquidation, a more competent rival would likely end up buying all the assets and reopening the stores.

Authored by Eoin Higgins via CommonDreams.org,

Sen. Bernie Sanders on Wednesday for the first time has a lead in CNN polling of primary contenders for the 2020 Democratic nomination — but you wouldn’t know that from how the network framed their coverage. 

Sanders supporters took issue with the fact that despite the Vermont senator’s three point advantage over former Vice President Joe Biden, 27% to 24%, CNN in its headline declares that “Bernie Sanders surges to join Biden atop Democratic presidential pack” rather than acknowledging the lead. The network adds in the article that Sanders and Biden are “in a two-person top tier above the rest of the field.”

The disconnect between the Sanders lead — which is just within the 3.4 point margin of error — and the framing of CNN’s piece on the poll was noticed by progressives and journalists. 

“The title of the article makes it sound like it’s a tie,” said Sanders surrogate Shaun King. “It isn’t.”

Law and Crime reporter Colin Kalchember also took aim at CNN for not declaring Sanders in the lead. “CNN still cannot fathom stating the obvious here: Sanders is leading in their own national poll,” said Kalchember. “Self parody.”

CNN still cannot fathom stating the obvious here: Sanders is leading in their own national poll. Self-parody. https://t.co/T2iPRcfhMf

— Colin Kalmbacher (@colinkalmbacher) January 22, 2020

The polling revealed other interesting data points, including that Sanders leads fellow progressive Sen. Elizabeth Warren (D-Mass.) over liberal Democrats by 33% to 19% and leads Biden with voters of color by 30% to 27%. 

“Gotta love those Bernie bros!” tweeted The Hill journalist Krystal Ball. 

Sanders also leads a new poll out Wednesday from crucial Super Tuesday state California, besting Biden by 28% to 24%, and gained on the former vice president in Morning Consult’s weekly early-state polling.

As CNN’s Ryan Struyk pointed out on Twitter, polling over the last few months shows a definite trend downward for Biden and upward for Sanders.

Support for Biden in @CNN polling:
Oct: 34%
Nov: 28%
Dec: 26%
Now: 24%

Support for Sanders in @CNN polling:
Oct: 16%
Nov: 17%
Dec: 20%
Jan: 27%

— Ryan Struyk (@ryanstruyk) January 22, 2020

Rep. Pramila Jayapal (D-Wash.), the co-chair of the Progressive Caucus who recently endorsed Sanders, celebrated the polling showing the Vermont senator pulling into the lead and urged the campaign’s supporters to use the momentum as a motivator to keep working toward a primary election victory. 

“Great news, but we are not letting up!” said Jayapal. “#TeamBernie is winning because of Bernie Sanders’ bold ideas, steadfastness, and clarity on how we turn this country around.”

* * * 

Wow, watch @krystalball destroy on CNN this morning 🔥🔥🔥pic.twitter.com/byasf3uTqI

— Eric Blanc (@_ericblanc) January 22, 2020