Ever since last year, nothing has grabbed economists’ attention as much as the whipsawing evolution of the US-China trade war. Just last week, the IMF downgraded its global growth forecast for 2020, citing trade and geopolitical tensions.
But economic forecasters are misunderstanding the primary cause of the current global slowdown, which means that they’ll also miss what’s coming next.
In hindsight, it’s clear that actual global industrial production growth started slowing at the end of 2017. In other words, the year-over-year pace of increase in the world’s total industrial output began a sustained decline in late 2017. That’s the definition of a global industrial slowdown.
Most analysts focus on the global purchasing managers’ index (PMI) data for their read on global growth because it’s published each month about a month and a half before the actual production data. While the global PMI generally has a positive correlation with global industrial production growth, it doesn’t measure actual industrial production, as it’s based on a survey of purchasing executives about conditions facing their companies. It’s really a proxy for industrial production growth, which measures real output for all companies within the manufacturing, mining and utilities industries.
In this case, while the global manufacturing PMI also started easing at the end of 2017, its decline didn’t become evident until a few months into 2018, when the sustained nature of the downturn became increasingly difficult to dismiss as meaningless “noise.” Coincidentally, that’s just about when President Trump began his trade war, slapping tariffs on washing machines and steel and aluminum imports. Because the trade war was front and center, economists thought it was to blame for the drop in PMI and global industrial growth.
Obviously, the trade war has hurt global growth. But it’s important to understand that it didn’t cause the global slowdown. We know this because growth in the Economic Cycle Research Institute’s leading indexes of global manufacturing — designed to foretell directional changes in both the global industrial production growth cycle and the global manufacturing PMI — started heading lower in mid-2017, well before the trade war started. So the cyclical downturn in global industrial growth was already taking shape in 2017. The trade war — starting up in 2018 — just piled onto that downturn.
Most believe that economic growth just hums along until some identifiable cause makes it veer away from its “normal” course. In contrast, our research reveals an underlying economic cycle that makes economic growth swing from strength to weakness and back again. When that happens, people tend to credit or blame salient events, furnishing easily understood narratives to explain cyclical swings caused primarily by the deep drivers of economic cycles. But, in reality, it was these underlying drivers of economic cycles — including higher interest rates and oil prices — that induced global industrial growth to start ebbing in late 2017 before there was any trade war.
The consensus view usually reflects what’s already happened, meaning that it’s also reliably behind the curve. The IMF’s global GDP growth forecasts have always been downgraded whenever actual global GDP growth has downshifted from the previous year. The same pattern holds when growth sees a cyclical upturn. A case in point is 2016-2017, when growth began turning up before President Trump was elected.
Such moves are commonly credited to or blamed on prominent people and events.
Make no mistake, the US-China trade war, in particular, is already having a profound impact on the world economy, spurring a long-term restructuring of supply chains, for example. But underlying cyclical forces can turn up regardless of what presidents Trump and Xi Jinping of China decide, and when.
Looking ahead, that means at some point global growth can revive even without the trade war ending. Even so, the recovery will be credited, as always, to the prominent events of the time.
White House Considering Syria Reversal: May Leave 500 Troops, Deploy Dozens Of Battle Tanks
Just days after apparently withdrawing US troops from Syria, much to the chagrin of the military-industrial-complex-sponsored Washington establishment, The Wall Street Journal reports that The White House is considering options for leaving about 500 U.S. troops in northeast Syria and sending dozens of battle tanks and other equipment to protect them.
The abrupt reversal, reportedly suggested to President Trump by military officials fits with his statement earlier today that he wanted to safeguard the oil fields (seen by Washington as potential leverage in future negotiations over Syria), tweeting:
“We will NEVER let a reconstituted ISIS have those fields!”
Syria is now politically more fragmented than ever, as the following chart from Statista’s Martin Armstrong shows, parts of the country are controlled by various faction s (based on Liveuamap data analysed by the German newspaper Handelsblatt).
In the north there is a strip about 30 kilometres wide, which Turkey seeks to control as a “safe zone”. The parts into which Turkish troops have already penetrated are coloured purple. The red areas were newly occupied by Syrian-Russian forces, showing how Assad is now gaining influence in the region. The majority of the planned Turkish control zone is still controlled by Kurdish militias (yellow areas on the map).
The options for tanks and troops, which The Journal noteshasn’t been decided upon yet, has the smell of a strawman from the neocons – bargaining over troop numbers and logistics – in an effort to gauge the base’s reaction and to then provide some leverage on the president to reverse his position more aggressively.
As a reminder, after ordering all U.S. forces out of northeastern Syria in early October, Trump has already modestly reversed his position, agreeing (after Sen. Lindsey Graham outlined the potential importance of the oil) to leave about 200 troops in northeast Syria to safeguard oil fields.
Of course, it is still unclear what will be done with the approximately 1,000 troops – mostly special ops – but, as Senator Graham made clear – they’re not coming home any time soon:
“There are some plans coming together from the Joint Chiefs that I think may work, that may give us what we need to prevent ISIS from coming back, Iran taking the oil, ISIS from taking the oil,” he said.
“I am somewhat encouraged that a plan is coming about that will meet our core objectives in Syria.”
Perhaps the Deep State’s grip is a little firmer, and Graham’s marshalling of Senate votes to ‘save’ Trump from impeachment, than the president initially conceived.
One thing is for sure, if this reversal takes place, Putin and Erdogan will not be pleased at all, and with Defense Secretary Mark Esper, in Brussels, alongside NATO Secretary-General Jens Stoltenberg, noting that NATO ally Turkey “put us all in a terrible situation,” one could imagine this strategy is one of stalling while the nukes can be moved from Incirlik to another ‘ally’ ahead of the planned votes next week on additional Turkish sanctions (as questions about the viability of Turkey as a NATO ally so closely aligned with Russia are growing stronger – in rhetoric only for now).
Failed presidential candidate Hillary Clinton, thought to have finally retired from politics after an embarrassing electoral loss to a politically-inexperienced reality show personality, is threatening to enter the 2020 race, serving up reheated Cold War fearmongering and an ironclad sense of royal privilege to a Trump-weary populace. A morally and fiscally bankrupt Democratic Party is poised to enable this sick drama with the help of a spineless and compliant media.
How could this possibly happen? Surely Democrats learned their lesson after their decision to take Clinton’s money in order to stay financially solvent in 2016 required them to rig the primaries in her favor, a crime that likely tanked her candidacy when it was revealed by WikiLeaks? Surely the mainstream media realizes that, three years on, the preposterous Russiagate conspiracy theory they cooked up to defend her has ripped the last shreds of journalistic integrity out of the mainstream media establishment?
Just kidding — the Democratic Party and its media handmaidens bargained away their morals long ago. They’re aiding and abetting a Clinton comeback, wheeling her out to give her opinion on everything from the latest steps toward peace in Syria (bad, needs more war) to the 2020 candidates. Last week, she took aim at Tulsi Gabbard, the best hope the party has of getting voters excited enough to show up in 2020, claiming (without a shred of evidence) that the National Guard major and former DNC chair is being groomed by Russia to act as a third-party spoiler, handing the election to Trump. Had such a claim come from anyone else, the DNC would have slapped it down. But they know on which side their bread is buttered. They’d rather lose than defy their queen.
Let’s do the time warp again
This month’s primary debates proved that, if nothing else, the party has refused to move on from 2016. Candidates clamored to distinguish themselves as the biggest Trump-hater and impeachment zealot, with not one appearing to comprehend that next in line behind their favorite punching bag is Mike Pence. The vice president is a man so possessed by religious sexual phobia that he refuses to be alone in a room with a woman. A Christian Zionist, he is even more willing than Trump to send US soldiers to fight Israel’s battles — the better to hasten the Rapture. Only Andrew Yang — a party outsider — dared speak the truth: “When we are talking about Donald Trump, we’re losing.”
Indeed, everything about the 2020 election is signaling a repeat of the last one. The DNC is broke again, ripe for a Clinton rescue that will once again require the rigging of the primary in return for her kindness. Naysayers who once laughed at the idea of yet another Clinton candidacy are reconsidering their scorn, and former Trump strategist Steve Bannon insists she is, in fact, running — merely waiting for the right moment to officially declare her candidacy. Certainly the media blitz of the past few weeks — ostensibly to promote a book co-written with her do-nothing daughter, but in reality a string of opportunities for her to denounce the “illegitimate” president and remind America that the position is rightfully hers — looks like a campaign publicity tour.
i’ll take “sore loser” for $1.2 billion, please
For all that Clinton says she empathizes with current Democratic frontrunner Joe Biden, currently being accused of corruption, she has, in these interviews, always brought the conversation back around to 2016, insisting that “the most outrageously false things” were said about her as well (and lamenting that “enough people believed them” to rob her of the presidency). Biden, like Clinton, is still being pushed as the 2020 favorite, despite coming with decades of baggage including flagrant corruption (threatening to withhold $1 billion in IMF loans from Ukraine until it fired the prosecutor probing an energy company that gave his son a no-show job is only the tip of the iceberg).
Even the New York Times has pointed out the similarities between their two candidacies — both physically deteriorating before voters’ eyes, uninterested in changing the status quo, and embraced by the wealthy donors that keep the party afloat. Biden’s Ukraine problem is as massive and impossible to avoid as Clinton’s email problem. Biden, like Clinton, is positioning himself as not the best candidate, but the only one who can beat Trump — embracing his identity as, he hopes, the lesser of two evils. Both have a long history in politics, dozens of skeletons in the closet (literally, in Clinton’s case), and a string of failed presidential attempts. Both cringingly pander to working-class and minority voters despite a history of racism (“superpredators,” the 1994 crime bill, close friendship with segregationists) and classism (NAFTA).
If at first you don’t succeed…
Ever the strategist, Clinton is likely biding her time until the facts come out about Biden’s involvement in Ukrainian natural gas company Burisma during impeachment hearings and sink his candidacy. She’ll then swoop in, volunteering to take his place as the crusty old standard-bearer of the Democratic pack. Biden’s suicidal stubbornness all but ensures he’ll go down in flames (despite his son Hunter’s admitted drug problems and the obvious nepotism and corruption behind his receiving a $60,000/month directorship just months after being kicked out of the Navy Reserves for cocaine use, Biden insists Hunter will join him on the campaign trail).
Clinton feels the presidency is hers by divine right — that it’s “her turn” to take the reins, like she was promised after Obama snatched it out from under her in 2008. Having paid her dues as First Lady, the long-suffering wife and enabler of serial rapist Bill Clinton occupied a Senate seat just long enough to present herself to the public as a stateswoman in her own right, then made a run at the glass ceiling of the presidency — only to be rejected in favor of a spray-tanned novice without her baggage. Patiently serving as Secretary of State, she oversaw the destruction of Libya, once the jewel of the Middle East under Gaddafi with the highest standard of living on the African continent, turning it into the failed state with open-air slave markets it is today. Thwarted in her efforts to do the same in Syria, she left the White House in 2012.
a rare shot of Cthulhu in his sea-floor auditorium practicing his political speeches
Clinton transformed the State Department into an extension of the Pentagon via her misleadingly-named “smart power” philosophy. The agency once tasked with solving America’s foreign policy problems diplomatically now merely provides diplomatic cover for regime-change operations like the one she helped engineer in Ukraine in 2014 (while she left the State Department in 2013, the processes she set in motion would culminate in the Maidan revolution that saw actual Nazis take over in Kiev) and the one currently trying to pry Hong Kong from China’s grasp.
She also monetized the position, selling access to the presidency through the Clinton Foundation. The Clintons vastly enriched themselves at the expense of the rest of the world, having never met a dictator they didn’t like. But while they elevated corruption to an art form, their actions were wholly in keeping with the modus operandi of the Democratic Party. Swaddle oneself in the appearance of helping the less fortunate (Clinton has appeared with countless ‘save the children’ and ‘women’s empowerment’ type groups like Somaly Mam’s AFESIP, which notoriously invented Cambodian child brothel horror stories out of whole cloth) while exploiting them to within an inch of their lives (Haitians still protest outside Clinton events over the Foundation’s decision to give over 90 percent of the $13.3 billion given in response to the 2010 earthquake to foreign contractors and Foundation donors while Haitians starved and died).
The rot goes to the core
Clinton wouldn’t be able to get away with this sort of thing if her party wasn’t fully on board with such moral depravity. The current impeachment circus is merely the latest proof that they do not believe anything they say in public. For the entire party and its stenographers in the media to turn on a dime from accusing Trump of colluding with Russia to accusing him of engaging in quid-pro-quo with Ukraine (an enemy of Russia, if one is paying attention) suggests they don’t believe either scandal is necessarily based on facts, but that, to quote congressman and impeachment fanboy Al Green, “if we don’t impeach the president, he will get reelected.”
After losing its collective mind with the 2016 defeat, the Democratic Party, led by Clinton and outgoing President Obama along with CIA director John Brennan and FBI chief James Comey, cobbled together Russiagate as their revenge. Relying on a network of spooks and paid operatives, they conjured up a half-baked menace from the depths of Americans’ collective Cold War memories, light on facts but heavy on the implications, with just enough salacious material to ensure it would go viral. The intention was to cripple Trump’s presidency — if they couldn’t remove him from office, they could at least ensure he played by their rules rather than follow through on wild promises to end the wars in Syria and Afghanistan and normalize relations with Moscow. The status quo held until the release of special counsel Mueller’s Russiagate report meant the media could no longer claim with a straight face that Trump was scheduled to be executed for treason any second now. But top Democrats were unfazed when it was exposed as a hoax — they’d invented it in the first place.
actual post-election moment
If not a sense of moral outrage that the president is colluding with a foreign power, what has driven the party leadership and its enablers in the media to pursue Trump to the ends of the earth? Democrats’ choice of impeachment issues is proof they lack any sort of moral center — as fake as Russiagate and Ukrainegate are, there are dozens of issues that could potentially be used to skewer Trump. The sky-high civilian casualty rates and record number of bombs dropped on his watch don’t faze Democrats — after all, Bush and Obama started those wars, and neither were impeached for the atrocities committed under their watch.
If anything, Democrats are clamoring for more war, shrieking after Trump announced the latest attempt at a troop pullout from Syria that such an action was unthinkable. Weeping and gnashing their teeth over the impending “genocide” of the Kurds, they spun on a dime when Trump announced a five-day ceasefire with Turkey last week, claiming such a deal — which gave Kurdish militias ample time to vanish from the Turkish border area without being attacked — somehow “discredited” American foreign policy. The Democrat-controlled House even voted to condemn the troop pullout — perhaps forgetting they’d never authorized the deployment of troops to Syria in the first place, an easy mistake to make as the US military has been industriously building up a base infrastructure in flagrant violation of Syria’s sovereignty.
The Trump administration’s blatant nepotism — Jared Kushner, a pampered princeling who has never held a real job in his life, was tasked with making peace between Israel and Palestine, despite blatant partiality toward the Netanyahu government (Bibi slept at the Kushners’ home in New Jersey) — didn’t bat a single Democratic eyelash. After all, Hunter Biden got his own lucrative sinecure in Ukraine with as few credentials. The massive deregulation that has seen the deficit skyrocket as corporations and the wealthy pay even less taxes than they did before bothers no one — Democratic donors benefited as much as Republicans, even though billionaires now pay a lower tax rate than the working class. Trump spitting in the face of international law by “declaring” first Jerusalem and then the Golan Heights the property of Israel went down smoothly as can be — no surprise when House Speaker Nancy Pelosi herself has said that she would back Israel “even if the Capitol crumbles to the ground.” Democrats’ problem has always been finding an “impeachable offense” Trump was committing that they were not also guilty of.
relevance is Russian
The devil’s rejects
Perhaps Democrats’ awareness that they’re morally as well as fiscally bankrupt is what drives them to make the same mistakes they did four years ago. Just as they did with Bernie Sanders, the party is doing its utmost to sideline Tulsi Gabbard at every opportunity, barring her from September’s debate despite her polling higher than several candidates who were included and refusing to speak up for her in the face of Clinton’s baseless smear. Their hypocrisy is transparent, preaching identity politics until a Hindu woman emerges championing antiwar policies. Gabbard is the only one bringing fresh ideas to the table, ideas that have excited many voters sick of the shame they feel knowing their country is the number one killer since World War II. Spike her, and they’re almost guaranteed to lose.
As if to prove that point, Clinton pounced on the Hawaii congresswoman last week with her “Russian asset” smear — not referring to Gabbard by name, but making it clear she was talking about no one else. Her spokesman Nick Merrill, asked if Clinton was really saying Gabbard — who served in the Iraq war — was an agent, confirmed the smear: “If the nesting doll fits…” In a sane society, Clinton’s disapproval would be a badge of honor (and to her credit, Gabbard appears to be wearing it as such) — but in the mainstream media hothouse, it’s another strike against her — along with the guilt-by-association smears that come with a 4chan fan club and even her looks.
Sanders might be able to muster a win against Trump, but at 78, his health is failing, and his base is wary after he betrayed them in 2016. Despite stolen primaries in New York and California, he sat mutely, throwing his own supporters under the bus during the convention. After a solid year of slamming Clinton for giving secret speeches to Goldman Sachs, voting to bail out the banks in 2008, and backing every war in the past three decades, Sanders turned on his supporters and implored them to vote for her. He remained silent while his supporters demanded a legal reckoning. Some have forgiven him and returned to cheer him on in 2020, but many have not.
Nevertheless, he is head and shoulders above most Democrats, who are completely for sale to the highest bidder, whether it’s Israel, the arms industry or Big Pharma. They violate the Constitution on a daily basis, whether it’s by voting to make participation in boycotts of Israel illegal (a blatant violation of the First Amendment, as a Texas court recently found; passing a law permitting indefinite detention without trial for American citizens (as Obama did in 2011, backed by a supine Congress, in violation of the Sixth Amendment); or outlawing religious vaccine exemptions (a violation of both the First Amendment and the Geneva Convention).
In perhaps the most shocking betrayal of the party’s liberal and progressive wing, Democrats have embraced the CIA, the FBI, and the entire intelligence apparatus that has infiltrated and destroyed leftist movements since the 1960s. Once the home of the counterculture, the Party now clings to authority, enthusiastically licking the boots they believe will curb-stomp Trump. Bereft of historical perspective — even the torture revelations of the early 2000s have vanished amid the onslaught of Orange Man Bad — Democrats ironically calling themselves the Resistance wear slogans like “It’s Mueller time!” and “Comey is my homey,” broadcasting their allegiance to men who’ve covered up monumental crimes and even committed a few themselves. It’s no surprise to see the mainstream media taking the side of the intelligence agencies — assets like Anderson Cooper, Ken Dilanian, and Wolf Blitzer have been keeping newsrooms safe for democracy for decades. But never before have ordinary voters leapt to embrace their oppressors quite so openly. The phenomenon can’t even be described as selling out — because selling out implies getting something in return for one’s soul.
A hive of lesser evils
Even if Clinton does not run, her influence permeates the party. “I’ve talked to most of them,” she revealed on ABC’s The View earlier this month, slyly hinting that previous contests’ frontrunners a year before the election had failed to secure the nomination. Instead of Sanders and Gabbard, the Democratic National Committee is propping up Biden and grooming as his second Elizabeth Warren, the neoliberal wolf in sheep’s clothing trying to steal Sanders’ thunder by insisting she’s all he represents plus a pair of X chromosomes. Decked out in borrowed rhetoric and forged identity politics credentials, she earnestly presents herself as a leftist, hoping no one remembers she was registered as a Republican until her 40s.
still more authentic than Hillary
Lest anyone be fooled by Warren’s “radical” act, former Senate Majority Leader Harry Reid recently gushed “I know she’s pragmatic, just wait.” Such an endorsement should be a death knell for her progressive support, especially after the revelation that she has been in constant contact with Clinton. Warren emphasizes in communications with donors that she doesn’t actually intend to upend the status quo, and has flip-flopped repeatedly on accepting big-dollar donors and PACs, only rejecting them once she’d stockpiled a healthy war chest from those very donors.
Many of Clinton’s 2016 campaign operatives have chosen California Senator Kamala Harris as their standard-bearer, and Harris exhibits many Clintonesque characteristics. Her enthusiasm for locking up black men for minor drug offenses (she bragged about increasing drug dealers’ conviction rate from 56% to 74% in just three years) — and black women for their truant children (she supported a law that imprisoned mothers if their kids skipped school, then lied about it on the campaign trail) — is worthy of the woman who called black kids “superpredators.” Harris has praised Clinton for “putting our country first” and “serving with distinction” while calling for Trump to be banned from Twitter for his “irresponsible” language.
The other candidates are largely distractions aimed at getting the selection process at the 2020 convention to a second ballot. With voters clamoring for reform after the 2016 disaster, the party obliged by doing away with superdelegates on the first round, but for any round beyond that, they’re fair game — and the DNC refuses to leave the selection up to chance, or anything so small-d democratic as a vote. With a handful of votes thrown to Pete Buttigieg — the anti-Gabbard, a gay pro-war vet — and Beto O’Rourke — the face of privilege whose Spandering caused the cringe heard ‘round the world in the first primary debate — the convention will progress to a second round, and the superdelegates will slither out of their holes to crown their king — or queen.
Status quo defenders
As much as those Democratic establishment stalwarts with presidential ambitions — Clinton and the two dozen-odd candidates determined to dislodge Trump in 2020 — want to get rid of the Bad Orange Man, the benchwarmers in Congress have learned to love him. House Speaker Nancy Pelosi and Senate Minority Leader Charles Schumer can merely rail against Trump instead of actually governing, floating whatever irresponsible fantasy bills they want with the knowledge that they’ll die in the Republican-controlled Senate or — at worst — be vetoed by Trump. House Democrats got the chance to virtue-signal about ending the war in Yemen, helping voters forget Obama had gotten the US involved in the worst humanitarian crisis of the 21st century, knowing Trump would kill the bill to serve their shared Saudi paymasters. And pearl-clutching about kids in cages on the border (cages built, again, by Obama) while calling for open borders attracts the votes of recent immigrants while ensuring they’ll never have to cash the checks they’re writing.
Michael Moore, once a progressive darling, recently appeared on ‘comedian’ Bill Maher’s program to lambaste his fellow ex-progressive about abandoning his own liberal credentials. Maher complained that the “Squad” — progressive congresswomen Ilhan Omar, Rashida Tlaib, and Alexandria Ocasio-Cortez — were unpopular, that Medicare for All was less desirable than Obamacare, and that a leftward shift would sink the party. Moore whimpered that if the election was held today, Trump would win, just as he had predicted in 2016. But where was Moore in 2016? Pleading on Democracy Now for Sanders supporters to go to the polls for Clinton, even though “she is to the right of Obama.”
The exchange between the two millionaire entertainers was a disturbing window on the utter alienation of the Democratic Party, insulated by layers of money, from its constituents — and increasingly ex-constituents, as nearly 40 percent of Americans disavow both parties. Maher represents the McCarthyite neoliberal centrism that has taken the mainstream media by storm, in which any flicker of anti-war or pro-working class sentiment is viewed as Russian. And Moore represents the thought-leaders who, despite knowing better, have led the party into its current moral sinkhole, insisting it’s the only pragmatic route.
Great! Thank you @HillaryClinton. You, the queen of warmongers, embodiment of corruption, and personification of the rot that has sickened the Democratic Party for so long, have finally come out from behind the curtain. From the day I announced my candidacy, there has been a …
Moore knows Clinton is — as Gabbard declared — the Queen of Warmongers, embodiment of corruption, and personification of the rot that has sickened the Democratic Party for so long. He just doesn’t care as long as he gets paid. Moore, like Clinton, took money from casting couch predator Harvey Weinstein despite his predation being an ‘open secret’ in the industry. As late as 2015, he called the molesting mogul “one of the best people to work with in this town” in a tweet he quickly deleted after it was dug up in October 2017 following Moore’s belated decision to speak out against Weinstein’s crimes. Even after the New York Times story in which several actresses first went public with their accusations was published, it took Moore weeks to climb aboard the dump-Weinstein bandwagon, likely out of concern it would hurt his film — Fahrenheit 11/9 — about the Trump presidency. The bottom line — not morality, or even being factually correct — is his chief concern.
In that respect, Moore is the Democratic Party writ large. Caught in a vicious cycle of selling out to wealthy donors to keep the lights on, it has sealed itself off to the working class, the minorities whose voice it still claims a monopoly on, and the young people just now awakening to the fact that they’ve been cheated out of a future. There has been barely any pushback against the DNC’s relentless trudge to the right from the mainstream media and the party establishment. Van Jones appeared on CNN calling out Clinton’s red-baiting of Gabbard, pointing out the smear contained “no facts” and that Gabbard had been the party chairman before she was demonized for backing Sanders in 2016, but the rest of the #Resistance remained silent as Clinton insisted that opposition to war was anti-American. Even the few candidates who defended Gabbard from her slurs did not mention Clinton in their rebuttals. No one dares to oppose the party’s owners.
Until someone does, the Democratic Party is dead. And it’s all but turned Trump into the lesser evil.
Coca-Cola Most Littered Brand In The World According To Massive Audit Of Plastic Waste
A global audit of plastic trash conducted by the Break Free From Plastic global movement has found that Coca-Cola is the most littered brand in the world,and is responsible for more plastic finding its way into nature than the next three companies combined, according to The Intercept‘s Sharon Lerner.
Photo: FromSandToGlass via Flickr
How did BFFP determine this? Over 72,000 volunteers combed beaches, waterways and streets,picking up all types of garbage – including plastic bottles, cups, wrappers, bags and scraps during a one-day cleanup in September. After sorting through the garbage, they found that plastic constituted around 50 types of litter traced to nearly 8,000 brands. Of that, Coke constituted 11,732 pieces of plastic litter found in 37 countries on four continents.
And while BFFP and TheIntercept pin the blame on Coca-Cola, it’s actually their irresponsible consumers who are the most polluting in the world.
The next biggest contributors to plastic pollution were Nestle, PepsiCo and Mondelez International (Oreo, Ritz, Nabisco and Nutter Butter) and Unilever. Of note, Coca-Cola is the #6 most valuable brand in the world according to Forbes, while Pepsi ranks 29th.
Nestle ranked #1 in North America, while Coca-Cola ranked #5 according to the audit.
Coke was the top source of plastic in Africa and Europe and the second largest source in Asia and South America. In North America, the company responsible for the most plastic found in the cleanups was Nestle, followed by the Solo Cup Company, owned by the Dart Container corporation, and Starbucks. Coca-Cola ranked fifth among the companies responsible for plastic waste in North America. –The Intercept
Coca-Cola said in a statement to The Intercept: “Any time our packaging ends up in our oceans — or anywhere that it doesn’t belong — is unacceptable to us. In partnership with others, we are working to address this critical global issue, both to help turn off the tap in terms of plastic waste entering our oceans and to help clean up the existing pollution.”
“We are investing locally in every market to increase recovery of our bottles and cans and recently announced the launch in Vietnam of an industry-backed packaging recovery organization, as well as a bottler-led investment of $19 million in the Philippines in a new food-grade recycling facility. We are also investing to accelerate key innovations that will help to reduce waste, including new enhanced recycling technologies that allow us to recycle poor quality PET plastic, often destined for incineration or landfill, back to high quality food packaging material.”
Growing evidence of an economic downturn despite unprecedented monetary inflation since Lehman means a new credit and systemic crisis is becoming increasingly certain. In an attempt to prevent a new crisis developing, this time the scale of monetary inflation by the authorities will have to be even greater. The rise in the price of gold since December 2015 and its break-out from a three-year consolidation period earlier this year confirms that the risks of a credit and systemic crisis undermining fiat currencies have been increasing for some time.
It is now likely that in future portfolio managers will increase their investment allocations in favour of gold and actively consider investing in silver and platinum as well. It is in this context that this article looks at the price relationships between the three precious metals and their relevant monetary and investment characteristics.
Introduction
Markets are playing a dangerous game of chicken with economic reality, which every passing day tells us that trade is slowing, and credit everywhere is maxed out. Key economies are beginning to reflect this in statistics, having for much of this year screamed the message at us through business surveys. Central banks know their monetary policies have failed. The ECB has already announced deeper negative deposit rates and is reviving its asset purchase programme (printing) from next month. The Fed is injecting liquidity (more printing) through repos in far larger quantities into its monetary system which, mysteriously, is short of money despite commercial banks having combined reserves of $1.44 trillion at the Fed.
We should not be surprised at its inability to join the dots between cause and effect, but warnings from the IMF about a $19 trillion corporate debt timebomb, coming from an organisation that is the deep-state of the economic system and has been consistently advocating monetary inflation, is tantamount to an official admission of global monetary failure. Where to now? Print, and print again.
Source: Bloomberg
Meanwhile, government bond yields and even some corporate ones are in negative territory. The only respectable government bonds that are not are US Treasuries and UK gilts, but in real terms arguably they are already there. Equity markets are within a whisker of all-time highs. The collective hype is a belief that a new round of increasingly aggressive printing will buy off an economic slump, but it is a rotten logic born out of economic ignorance and desperation.
It is like a game of chicken: investors riding a Vespa scooter flat out in the middle of the highway, facing the oncoming juggernaut of reality from the opposite direction. We know what the result will be, because we have seen it before. And we know who gets killed.
This article is not aimed at those riding the Vespa: being committed to do or die they are in a mental zone from which logic is excluded. It is for those who know or suspect that the monetary and economic situation is serious and getting more so by the day. It is for those who know why an accelerating debasement of fiat currencies is now inevitable.
Not only have we been warned of the economic dangers by the IMF, the Bank for International Settlements and everyone else in authority, but a global banking system with fatal weak points is plain to see. Even McKinsey, consultants favoured and listened to by governments everywhere, in their global banking annual review says it’s all late cycle. They write,
“…on balance, the global banking industry approaches the end of the cycle in less than ideal health with nearly 60% of banks printing returns below the cost of equity. A prolonged economic slowdown with low or even negative interest rates could wreak further havoc.”
We should pause to think about it. This bastion of the establishment is confirming that a systemic collapse is becoming more certain by the day.
Germany, until now by far the best-performing economy in the Eurozone, faces the prospect of having to support its major banks, one of which (Deutsche Bank) has positions in derivatives amounting to an estimated €45 trillion, nearly twelve times Germany’s GDP. Deutsche Bank has a much-reduced balance sheet of €1,350bn and a book value of total equity of €64bn, a simple leverage of 21 times, but its market capitalisation at only €14bn tells the story in a more realistic way. No doubt, in a half-decent economy a bank in this position can fiddle along for a while, but Germany is turning sour, very sour. Germany’s economic prospects amount to a count-down to Deutsche Bank’s destruction, and Commerzbank’s with it.
The short-term consequences of the realisation that Lehman was a teddy-bears’ picnic compared with an approaching feast for grown-up grizzlies are expected to be a dash for dollar cash. That will be true in the US investment community, which according to FINRA in September had outstanding margin and cash loans of $556bn. For junk-rated corporations, as well as the medium and small companies that comprise eighty per cent of any modern economy, their bankers coming under pressure and concerned for their own bottom lines will rapidly withdraw lending facilities. Those that lose their banking facilities will defer payment to their suppliers while trying to get outstanding payments in earlier. Inventory will simply accumulate and there will be widespread bankruptcies.
Nearly eight out of ten US consumers are living pay-check to pay-check, as they are in the UK. The music in the non-financials, on Main Street, must play on and government must pay the piper. Other than subsidies and welfare there will be no cash. But the banks will be caught with non-performing loans, and governments will face both a collapse in tax revenue and an escalation in welfare commitments. We are approaching an end to the fiat monetary system: monetary inflation must accelerate at an even greater pace to keep the system from imploding.
The signal a crisis is in the wings comes from alternatives to state currencies and related financial assets. Initially, it is about preserving wealth with suitable stores of value and portfolio diversification to offset failing conventional investments. So far, the one accessible safe haven which has been in the headlines is gold, but there are other precious metals, particularly silver, and platinum. Palladium’s price is so distorted by shortages that any accumulation of it on monetary grounds is ill-considered.
Investors who think the scenario outlined above is a real danger will exchange increasingly worthless fiat for a precious metal. It is never too late. The lacklustre performances of silver and platinum so far, as well as the general disinterest in mines extracting all precious metals confirms that the current phase of gold’s bull market is only in the initial stage. The initial stage of any bull market is driven by a loss of bearish momentum combining with accumulation into the safe hands of insiders and knowledgeable investors. The insiders today are not the conspiracy theorists, they are always there. The insiders in precious metal markets are the professional operators who detect a change in the market; those who are usually short and needing to cover, the central bankers who privately detect a change in long-term monetary trends, and those who have experienced and understood previous cycles of credit.
For gold, this phase commenced with the end of the bear market in December 2015. The second bull phase, marked by the price break-out only five months ago, is only just getting under way. This is illustrated in Figure 1. Now professional investors can be expected to get on board, and their interest is likely to be reflected in increasing portfolio allocations in favour of gold ETFs and mining shares. If investing history and investor psychology are a guide, silver and platinum will find now buyers as well, as these investors look for lagging alternatives to gold. Therefore, their prices should begin to reflect the monetary considerations that are already apparent in gold’s performance.
According to Dow theory, which is the guiding light for all momentum investors, the third and final stage of a bull market still lies ahead and will see increasing public participation. For stockmarkets generally, it marks a final blow-off stage, with inexperienced investors being sucked into what must seem to them a sure-fire way of making money.
Before we arrive at that point, portfolio managers and other professional investors will continue to make the mistake of thinking gold, silver and platinum are simply investments. They are not. They are the sound alternative to unbacked government currency, and so long as they measure their performance figures in a fiat currency they are bound to persist in making this error.
Demand for precious metals in physical form, and their physicality must be stressed, is primarily a reflection of a desire not to hold state-issued currencies, and depending on how monetary policies evolve, their use as money could be threatened absolutely. That is for the future. Meanwhile, the market position indicates to those at the investment coalface who follow Dow theory that we are embarking on a second stage of a wider bull market in gold, and it is therefore time to get a market perspective not just on gold, but also the two principle metallic alternatives, silver and platinum.
We must now look at all three stores of value.
Gold
Gold always has been and remains a monetary metal, with central banks recorded as owning 34,408 tonnes in their monetary reserves, an increase of 4,406 tonnes since 2008. It is sound money, with no counterparty risk, so for central banks it is an insurance against monetary failure of other currencies and against systemic failure generally.
Assessments of above-ground gold stocks in an attempt to give us a post-fiat global quantity of sound money are always incorrect, partly because the true quantity of above-ground gold stocks is unknown, and because only gold held for monetary purposes are relevant.
Since 2009, the World Gold Council’s estimates, which are commonly quoted as gospel, have been based on estimates by Thompson Reuters GFMS (GFMS). By 2011, GFMS’s figures estimated the figure to be 171,300 tonnes, which included an estimate for above-ground stocks of 12,780 tonnes in 1492, the year Columbus, as Fats Waller memorably put it, sailed the ocean blue.
James Turk of Goldmoney with assistance from Dr Juan Castañeda examined the basis of GFMS’s estimate and concluded it was too high. The reasoning can be found in Turk’s paper, here (see pages 9-13 in particular). Instead, Turk’s estimate for the 1492 stock is 297 tonnes in accordance with other research, and his estimate of subsequent production before 2011 is 3,573 tonnes less than the GFMS calculation. By end-2018, working on subsequent estimates of annual figures for mine production[ii] (though there is some variance between sources) in my opinion the 2018 estimate published by the WGC at 193,472.4 tonnes is too high by 17,206 tonnes, nearly 10% above where it should be.
One may wonder why a 10% difference in above-ground stocks matters, but it does matter hugely when we consider the only other assessed figures which are known with a degree of confidence. Going on the WGC’s figures for bars and coins held for investment and which we are entitled to assume are based on reasonably solid estimates, and adding in monetary gold declared by central banks, we have a total for gold classified as money of 75,686.5 tonnes, which we must regard as the base figure for gold’s global money supply, not 193,472.4 tonnes as commonly supposed, or even our lower modified estimate of 176,266 tonnes. But given that on Turk’s figures and subsequent mine output estimates we are left with not 117,786 for non-monetary uses but 100,579 tonnes, future supply from scrap on rising prices will be significantly tighter than commonly thought.
This particularly matters in the context of the large quantities of gold substitutes in regulated and unregulated markets. Simply adding the three major markets, the London Bullion Market, Comex and the Shanghai gold futures, gives us the paper equivalent of 9,563, 1,485 tonnes and 552 tonnes respectively as at end-June 2018 (the last date for which BIS figures are available). To these amounts of paper gold must be added an unknown quantity of unallocated gold accounts at the bullion banks, which are fractionally reserved.
These numbers represent the establishment’s bear position.
If the move out of fiat money into gold develops, not only will the financial system have to fulfil demand for sellers of fiat for gold, but it will also have to absorb the liquidation of paper substitutes. In an orderly market which has time to adjust to rising prices, it is not necessarily a problem and paper substitutes can survive. But when the origin of the new demand stems from a systemic and monetary crisis, the price effect is likely to be sudden, threatening the whole bullion banking system.
Given the scale of the risks from an increasingly likely financial crisis, the relationship between gold and fiat money is now the most urgent consideration facing everyone owning or managing fiat-denominated financial assets. Only, very few of them know it.
Silver
When silver was the backbone of coinage, its purchasing power relative to gold for centuries was in the region of 12:1 before Sir Isaac Newton, when he was Master of the Royal Mint, fixed it at 15.5:1 early in the eighteenth century. The bimetallic standard he introduced was not a successful concept, because the preference for circulating money in the economy clashed with a trade settlement preference for gold among merchants. Eventually, the European countries on a silver or bimetallic standard moved to a gold only standard in 1873, though silver still circulated in coinage, and the price of silver relative to gold fell substantially.
Since then, silver has been predominantly an industrial metal in the West, but it still circulated in the Middle East and elsewhere in the form of Maria Theresa coins as late as the early-1970s. Today, the gold-silver ratio stands at 84, a far cry from Newton’s 15.5, and from the estimated rarity in the earth relative to gold of about 18.75 times.
According to the Silver Institute, total supply in 2018 was 1,004.3 million ounces, of which 855.7Moz was mine supply and 151.3Moz was scrap. Total physical demand (including 181.2Moz for coins and bars) was estimated slightly more at 1.033.5Moz. Additionally, net investment-related flows added a net 50.1moz demand to give a total deficit of 80.1moz, or 8% of total supply.
As a mining by-product, silver’s supply is strongly influenced by mine production of base metals, particularly lead, zinc, copper and gold. Primary silver mines only account for 26% of total mine output world-wide. Consequently, the ability of mines to increase silver output to meet rising demand is very limited. Furthermore, in an economic downturn the output of base metals is likely to decline due to falling demand, reducing the supply of silver as well.
Industrial demand at 57% of total supply has been remarkably stable in recent years but obviously can be expected to fall in an economic downturn, offset to a degree by low cyclicality in photovoltaic, electrical and electronics and growing disinfection markets. The balance between declining mine supply and declining industrial demand will also be determined by their relative rates of decline. 63% of total silver supply (including scrap) is tied to base metal demand, while industrial use absorbs only 57% of total supply. Therefore, a recession can be expected to have a broadly neutral effect on the overall industrial supply/demand balance.
Annual bar and coin sales at 181.2moz are only worth $3.2bn and should be viewed in the context of Asian investment demand, where silver coin has traditionally been accepted as circulating money. In the event of monetary disruption, the potential for silver demand in these populous markets is enormous. India has been an important market, with a history of high levels of imports, even in relatively stable times. Since the start of 2010, India has imported well over a billion ounces.
The history of demand in India shows it to be strongly associated with wealth preservation, and given the high gold/silver ratio, this can only fuel increasing Indian demand for silver when the gold price is rising. China has been India’s largest supplier, and rising markets are also likely to reduce any surplus silver China may have for export, putting a squeeze on Indian supplies.
As a producer, China ranks third as a mining nation, and is also a large consumer at 166Moz annually. Since 2014 investment demand for bars has been subdued in the wake of anti-corruption measures, a factor which has put negative pressure on global prices. Annual investment demand in China by 2017 had fallen to 7.5Moz, representing only 5% of the world total.
As monetary circumstances change and the price of gold rises, so should Chinese investment interest in silver. Demand is likely to come from ordinary savers in both jewellery form as well as for bar and coin. It is the money of the masses, but it must be admitted that sophisticated millennials are likely to consider cryptocurrency alternatives as well.
As a rule of thumb, when the price of gold rises, the price of silver tends to increase between 1.5-2.0 times that of gold. Furthermore, in the early stages of a bull market for gold, silver tends to lag, catching up later. This can be explained by financial markets regarding gold as more of a monetary metal than silver, turning mainly to gold when prospects for currency debasement initially appear to increase.
Gold’s bull phase commenced in December 2015 and was only confirmed when it broke out of a long consolidation last June. So far, the dollar price of gold has risen by 42%, while the silver price has risen just 26%. This is consistent with an early phase of a continuing bull market for precious metals and suggests that an acceleration in silver’s rising price will occur on gold’s next bullish move.
Platinum
The chart for platinum in Figure 2 shows it has failed so far to convincingly exit the bear market that commenced in 2011 and today is only 15% higher than the lows recorded following both the Lehman shock and in August 2018. So long as these two lows hold, technical analysts will conclude a double bottom has been formed, in which case the platinum price has the potential to more than double.
Platinum is very rare, with only one thirtieth of gold’s occurrence. 72% of the annual production of about 190 tonnes comes from South African mines and 8% from Zimbabwe. When recycling is taken into account, total annual supply in 2018 was 8,060 million ounces, expected to rise to 8,390Moz in the current year.
Platinum prices have suffered in recent years as falling demand-trends for diesel engines, which are more platinum dependent for catalytic conversion, have been replaced by rising demand-trends for petrol, which are more palladium and rhodium dependent. The result is that analysts forecast deficits of over 700,000 ounces for palladium in 2020, a trend likely to continue, while platinum continues to have a surplus of supply over industrial demand.
It had been expected that the motor industry would switch back to using platinum more in catalytic converters than the current palladium/rhodium mix. Despite the rise in palladium prices, there is little sign of this happening. Furthermore, the downturn in vehicle demand in China and elsewhere while emission regulations continue to tighten encourages analysts to reduce their forecasts for catalytic demand for platinum group metals overall.
Consequently, platinum demand has become increasingly dependent on investment. But here, a disappointing price performance has led to persistent ETF liquidation in recent years, though this appears to be changing. Jewellery demand has been broadly flat.
In short, the platinum market currently lacks obviously positive factors, but that is discounted in the disappointing price performance and the current price level. All that is required to drive prices higher is a boost to the investment case, when the price could easily double from that double bottom, outperforming gold perhaps on the next leg up. And that will probably be as a wider understanding of monetary debasement by investment managers and the general public develops, overwhelming the physical quantities available.
Banks Stuck With Billions In Risky Leveraged Loans As Investors Flee Credit Markets
Global banks are involuntarily stocking up on risky corporate loans as a result of investors beginning to cut risk in the credit markets, according to Bloomberg.
Underwriters that could once easily offload risk associated with corporate debt are finding that coming up with new suckers investors isn’t as easy as it once was. As a result, banks like Barclays and Deutsche have been stuck with $1.5 billion in leveraged loans that they’ve struggled to sell off in recent months.
It’s a small sum relative to the nearly $170 billion in leveraged loans outstanding in the U.S. and Europe, but it’s notable due to the “broad strength” of the credit markets of late. The strength in credit stands in contrast to late last year when a sharp selloff left the banks holding the bag on $3.6 billion in unsold debt.
While the recent stalled deals don’t pose a major threat to the junk bond market, an uptick could constrain underwriting and signal further risk aversion going forward.
Steven Abrahams, head of strategy at Amherst Pierpont Securities said: “The mix of loans coming to market right now is very difficult to absorb. It’s a very unusual story that leveraged loans and collateralized loan obligations are showing stress, even though the rest of the market is pretty benign, if not bullish.”
Continued concerns about a global slowdown are prompting investors to avoid riskiest issuers.
Chunks of deals still sitting on banks’ books include debt for OSG Billing Services and ACProducts: two deals that were underwritten before last year’s sell-off and have still been unable to find buyers. Barclays, who acted as sole underwriter for both deals, is still holding about half of each deal.
Debt deals made for Apollo’s buyout of Shutterfly and HGGC’s take-private deal for Monotype Imaging Holdings failed to be fully sold to investors as demand for riskier credit waned. Additionally, a group of banks – also led by Barclays and Deutsche – were left holding hundreds of millions of dollars in debt from Advent International’s buyout of a unit of Evonik Industries in July.
A Deutsche spokesman said: “The amounts in question are insignificant in the context of the wider market and insignificant to Deutsche Bank’s debt-financing businesses.”
Banks have also struggled to sell a nearly $3 billion cross border debt deal for Bain Capital’s purchase of a majority stake of research firm Kantar. Underwriters were forced to add concessions on pricing and documentation to the loan and bond deal to entice investors. The deadline for the deal was extended twice.
And banks may find it even more difficult to offload these loans in coming months. Worries about a global downturn have reduced demand for lower rated loans at risk of downgrades – especially from CLOs, which face limits as to the amount of the weakest tier CCC debt they can own.
Jerry Cudzil, head of U.S. credit trading at TCW Group, called it “extreme bifurcation”.
Often times when banks are stuck with unsold loans, they will work with PE sponsors to restructure the financing, generally after an injection of equity. If a solution can’t be found at that point, the bank is on the hook to provide the funds at the original terms.
Cudzil concluded: “It is late cycle and there is growing risk of credit accidents. We kill so many loans in the early stages that we are not even going to look at a cabinet maker right now.”
While it may be shocking to some investors, this news doesn’t come as much of a surprise to us.
Remember, it was just days ago that we highlighted comments from Morgan Stanley’s Srikanth Sankaran, who wrote in a note that “beneath the veneer of relative spread resilience and muted realized defaults, the weak links in the leveraged credit markets are coming under pressure.”
One notable such fault line is spread decompression, which has been a dominant theme in both leveraged loans and HY, with the B-BB basis expanding by ~24bp in HY and ~56bp in loans from the January tights.
Another indication that the loan market is starting to crack: distressed tails in both asset classes are also back on the rise, and while energy remains the dominant contributor to the HY tail, Morgan Stanley finds more sector diversity in loans trading below 90 cash price.
But the biggest tell that investors are starting to sour on what one year ago was the most desired part of the capital structure, is that – as in other, more illiquid pockets of the market – “big” price/spread moves are happening more frequently, “even outside the stressed buckets”. And while the jump pattern is more symmetric in HY, pointing to continued demand for big movers, by contrast in loans, the big price moves exhibit a strong downside skew, particularly in the case of facilities that started the year at stressed levels.
Also worth noting is that large moves are also happening more frequently outside the tails: while the increase in credits trading at stressed levels is ominous, it presents only a partial picture of underlying price dynamics, according to MS. Even outside the tails, the bank sees a growing incidence of big spread/price moves in individual credits.
Morgan Stanley counts 1,476 individual HY bonds that have seen spreads gap wider by 50bp or more over a one-month window. However, there is also a strong rebound pattern in that instances of significant spread tightening are also high. As a result, the aggregate distribution of YTD spread changes does not show much evidence of a broad-based malaise within the HY bond market.
The one explanation for these repricings: investors are anticipating declining fundamentals in the form of ratings downgrades.
As MS notes, consistent with the price discontinuity patterns, net downgrades in leveraged loans have also accelerated in recent months – up 106% YoY and tracking the highest levels since the energy crisis.
If these trends hold true, banks like Barclays and Deutsche better get used to having those leveraged loans on their books…
The effort to find (or create) impeachable offense against President Donald Trump has now moved from the subjects of the Mueller investigation — collusion with Russia and obstruction of justice — to alleged recent political “sins”: “quid pro quo” with Ukraine and obstruction of Congress.
The goal of the impeach-at-any-cost cadre has always been the same: impeach and remove Trump, regardless of whether or not he did anything warranting removal. The means — the alleged impeachable offenses — have changed, as earlier ones have proved meritless. The search for the perfect impeachable offense against Trump is reminiscent of overzealous prosecutors who target the defendant first and then search for the crime with which to charge him. Or to paraphrase the former head of the Soviet secret police to Stalin: show me the man and I will find you the crime.
Although this is not Stalin’s Soviet Union, all civil libertarians should be concerned about an Alice in Wonderland process in which the search for an impeachable crime precedes the evidence that such a crime has actually been committed.
Before we get to the current search, a word about what constitutes an impeachable crime under the constitution, whose criteria are limited to treason, bribery or other high crimes and misdemeanors. There is a debate among students of the constitution over the intended meaning of “high crimes and misdemeanors.” Some believe that these words encompass non-criminal behavior. Others, I among them, interpret these words more literally, requiring at the least criminal-like behavior, if not the actual violation of a criminal statute.
What is not debatable is that “maladministration” is an impermissible ground for impeachment. Why is that not debatable? Because it was already debated and explicitly rejected by the framers at the constitutional convention. James Madison, the father of our Constitution, opposed such open-ended criteria, lest they make the tenure of the president subject to the political will of Congress. Such criteria would turn our republic into a parliamentary democracy in which the leader — the prime minister — is subject to removal by a simple vote of no confidence by a majority of legislators. Instead, the framers demanded the more specific criminal-like criteria ultimately adopted by the convention and the states.
Congress does not have the constitutional authority to change these criteria without amending the Constitution. To paraphrase what many Democratic legislators are now saying: members of Congress are not above the law; they take an oath to apply the Constitution, not to ignore its specific criteria. Congresswoman Maxine Waters placed herself above the law when she said:
“Impeachment is about whatever the Congress says it is. There is no law that dictates impeachment. What the Constitution says is ‘high crimes and misdemeanors,’ and we define that.”
So, the question remains: did President Trump commit impeachable offenses when he spoke on the phone to the president of Ukraine and/or when he directed members of the Executive Branch to refuse to cooperate, absent a court order, with congressional Democrats who are seeking his impeachment?
The answers are plainly no and no. There is a constitutionally significant difference between a political “sin,” on the one hand, and a crime or impeachable offenses, on the other.
Even taking the worst-case scenario regarding Ukraine — a quid pro quo exchange of foreign aid for a political favor — that might be a political sin, but not a crime or impeachable offense.
Many presidents have used their foreign policy power for political or personal advantage.
Most recently, President Barack Obama misused his power in order to take personal revenge against Israeli Prime Minister Benjamin Netanyahu. In the last days of his second term, Obama engineered a one-sided UN Security Council resolution declaring that Israel’s control over the Western Wall — Judaism’s holiest site — constitutes a “flagrant violation of international law.” Nearly every member of Congress and many in his own administration opposed this unilateral change in our policy, but Obama was determined to take revenge against Netanyahu, whom he despised. Obama committed a political sin by placing his personal pique over our national interest, but he did not commit an impeachable offense.
Nor did President George H. W. Bush commit an impeachable offense when he pardoned Caspar Weinberger and others on the eve of their trials in order to prevent them from pointing the finger at him.
This brings us to President Trump’s directive with regard to the impeachment investigation. Under our constitutional system of separation of powers, Congress may not compel the Executive Branch to cooperate with an impeachment investigation absent court orders. Conflicts between the Legislative and Executive Branches are resolved by the Judicial Branch, not by the unilateral dictate of a handful of partisan legislators. It is neither a crime nor an impeachable offense for the president to demand that Congress seek court orders to enforce their demands. Claims of executive and other privileges should be resolved by the Judicial Branch, not by calls for impeachment.
So, the search for the holy grail of a removable offense will continue, but it is unlikely to succeed. Our constitution provides a better way to decide who shall serve as president: it’s called an election.
New Jersey’s “American Dream” Mega-Mall Set To Crush Nearby Retail Competitors
The American Dream retail and amusement complex, located at New Jersey’s Meadowlands, is finally set to open after 16 years of “false states and multiple developers”, according to Bloomberg.
It’s arrival to the Northern New Jersey mall scene has nearby competitors scrambling to figure out ways to stand out.
The mall’s owner, Triple Five Group, is expecting 40 million visitors per year once the full map is up and running – a number that would surely devastate some of the nine nearby malls that are already competing for traffic out of the New York metropolitan area.
Poonam Goyal, an analyst at Bloomberg Intelligence said:
“There are shopping centers that are underperforming, and I think those are the ones that need to worry. Some of the smaller malls that are just surviving, with American Dream opening, they may have more struggles ahead of them.”
North New Jersey’s mall scene has survived off of a pulse from New York City, as New Jersey doesn’t implement a sales tax on clothing. In the city, shoppers pay 8.875%. This has helped fuel “continued demand” for malls in New Jersey, even as brick and mortar shops across the nation buckle. Nearby Paramus, New Jersey still boasts the busiest retail ZIP code in the country, despite the fact that many retailers stay closed on Sunday as a result of the county’s “Blue Laws”.
Whether or not the landscape will shift with the introduction of the American Dream mall remains to be seen. The mall will first see its theme part and ice skating rink open before its retail section opens up next year. The 3 million square feet complex is 45% retail and 55% entertainment, including indoor snow skiing and a DreamWorks water park.
Rick Rizzuto, vice president at real estate research firm Transwestern in New Jersey, said:
“I think the size alone is a pretty big draw.”
And so, other malls in the area are also looking beyond retail to try and retain business.
“All successful malls understand that you need more of a draw than just stores. And they’re adding bigger restaurants and more family friendly, approachable environments,” Rizzuto continued.
The Short Hills mall, about 30 minutes away, says it’s not worried about the new competition because it offers high end services and “experiences that enhance its appeal beyond just the merchandise itself.”
Short Hills mall General Manager Jamie Cox said: “Setting ourselves apart doesn’t necessarily have to do with the big roller coasters that American Dream is working on; it has to do with a differentiated shopping experience.”
Cox claims American Dream won’t be able to match features like the VIP lounge in its Chanel boutique and Canada Goose’s “Cold Room” where customers can test the company’s gear in temperatures as low as -13F.
Cox continued: “Our customers might go there once or twice for entertainment purposes, but when they want to shop they’re going to come to Short Hills.”
Analyst Poonam Goyal still thinks that higher end malls may be able to offer something that American Dream can’t. She said: “You go to American Dream for the entertainment. But I think if you want to go purchase something, you may not want that bigger presence where you might get lost.”
Paramus’ Garden State Plaza, about 20 minutes away, also strives to differentiate itself by becoming a “mini city”, complete with residential spaces, public gathering spaces, restaurants and traditional retailers. Currently, it offers high end services like valet parking and a concierge.
Garden State Plaza in Paramus/BBG
Karen Bednarz, a sales development coach from Hawthorne, New Jersey, says that she thinks American Dream will still draw a crowd; at least, at first.
She said: ”It’s like the Stew Leonard’s that opened up last month. American Dream’s going to attract a lot of people because it’s brand new, but that newness will go away eventually. Unless it has something that you can’t find anywhere else, it may lose its sizzle.”
Rick Rizzuto agreed that the mall would draw people in, and even postulated that it could help other nearby malls: “It will have a large enough reach that people from Pennsylvania and Connecticut will come to see it at least once. It will draw a lot more people than the area is used to, which should result in spending at the other malls in the area.”
“Brink Of Collapse”: Hong Kong Businesses Struggle To Survive Amid Violent Protests
Hong Kong chief executive Carrie Lam said earlier this month, the city’s economy had slipped into a “technical recession” after many months of violent protests.
Bloomberg’s new report, comprised of several interviews and retail data points of the city, offers a leading view of economic turmoil in the city that could lead to a severe financial crisis.
Kirio Zhou, a resident of mainland China, spoke with Bloomberg and said the retail business in Hong Kong is on the brink of collapse. Rooms at the most high-end hotels, like Marco Polo Hongkong in Tsim Sha Tsui, are going for $72 per night, a 75% discount versus last year.
“I thought it was a per-person price at first,” said the 23-year-old lawyer, who saw Hong Kong’s small but expensive accommodations as a big pain point. “But now really cool places are offered at a low price. I hope this will continue.”
Paul Luciw, an internet entrepreneur, said the hotel traffic in Hong Kong has dropped. He was able, according to Bloomberg, barter a hotel room at a luxury hotel in the city for ad space on his website.
I just left there. It was crazy riots every night, had fires under my Hilton Hotel. Go somewhere else. My biggest concern is they closed down the airport last week. They are taking the lead from Hong Kong protests. I don’t believe it will end soon pic.twitter.com/0BOZFg0B0J
Hong Kong’s Aug. retail sales were awful, the worst on record., and the accounts from Zhou and Luciw — indicate just how desperate Hong Kong businesses are to survive.
“It’s absolutely life and death for us,” said Douglas Young, co-founder of Goods Of Desire, or G.O.D, a lifestyle and fashion store-chain operator in Hong Kong, in an interview with Bloomberg Television on Wednesday. “At the moment we’re calculating whether or not it’s cheaper for us to just fold or to continue, it’s that serious.”
Retail sales in Aug. plunged 23% Y/Y, worse than the 21.48% drop in Sept. 1998, as violent protests continue to cause mini-economic shocks in shopping districts and malls.
As a result, Prada SpA, Ralph Lauren Corp., and Levi Strauss & Co. have said store sales are quickly slipping into year-end with no end in sight on resolving the protests.
“Retail sales will likely remain in the doldrums in the near term, as the worsened economic outlook and local protests involving violence continue to weigh on consumer sentiment and inbound tourism,” a government spokesman said in Sept.
Jewelry stores are typical shops that mainland Chinese would visit, have seen sales collapse by 50% in Aug Y/Y.
We even reported that depressed jewelry sales in the city had contributed to a collapse of Israel’s diamond industry. This is an indication that the Hong Kong economic crisis is spreading throughout the world.
Anyone who wants to travel to Hong Kong this week, departing from Washington, D.C., airports can experience at least a 50% savings on roundtrip plane tickets at the moment because air travel to Hong Kong remains depressed.
Arrivals to Hong Kong plunged 39% to 3.56 million in Aug Y/Y. Hotel data showed occupancy levels have fallen by a third to 66% in Aug., Hong Kong Tourism Board data showed.
Local businesses are cutting back on their workforce as approximately 77% of all hotel workers have just been asked to go on leave without pay.
“Hotels were expecting things to pick up in October and November. Obviously, that has not happened,” said Luciw. “We are being approached almost daily by hotel groups looking to advertise.”
Raymond Yeung, the chief Greater China economist with Australia & New Zealand Banking Group Ltd. in Hong Kong, told Bloomberg that hotel price discounts are mostly “protest-driven.”
“Are we going to see business travelers come to Hong Kong? Are we going to see all the exhibitions resumed?” Yeung said, adding that several major conferences in the city have been canceled.
Hong Kong’s economic sag could be a bellwether for the global economy ahead of 2020. And as we’ve mentioned, protests are erupting across the world, not just in Hong Kong. These social unrests are creating mini-economic shocks in local economies, and all of these shocks are happening at the same time as the global economy could be entering a period of vulnerability. This means the world might be one economic shock away from recession.
The anti-Trump “Resistance” has devastated core American institutions and broken longstanding political norms in seeking to defeat and now oust from office President Donald Trump, said Kimberley Strassel, a columnist for the Wall Street Journal and member of the Journal’s editorial board.
“And this, to me, is the irony, right? We’ve been told for three years that Donald Trump is wrecking institutions,” Strassel said in an interview with The Epoch Times for the “American Thought Leaders” program.
“But in terms of real wreckage to institutions, it’s not on Donald Trump that public faith in the FBI and the Department of Justice has precipitously fallen. That’s because of Jim Comey and Andy McCabe. It’s not on Donald Trump that the Senate confirmation process for the Supreme Court is in ashes after what happened to Brett Kavanaugh. It’s not on Donald Trump that we are turning impeachment into a partisan political tool.”
The damage inflicted by the anti-Trump Resistance is the subject of Strassel’s new book, “Resistance (At All Costs): How Trump Haters Are Breaking America.”
Strassel uses the term “haters” deliberately, to differentiate this demographic from Trump’s “critics.”
In Strassel’s view, all thoughtful critics of Trump – and she counts herself among them – would look at Trump the same way that they have examined past presidents – namely, to call him out when he does something wrong, but also laud him when he does something right.
“The ‘haters’ can’t abide nuance. To the Resistance, any praise – no matter how qualified – of Trump is tantamount to American betrayal,” Strassel writes in “Resistance (At All Costs).”
She told The Epoch Times: “Up until the point at which Donald Trump was elected, what happened when political parties lost is that they would retreat, regroup, lick their wounds, talk about what they did wrong.
“That’s not what happened this time around. Instead, you had people who essentially said we should have won.”
From the moment Trump was elected, this group believed Trump to be an illegitimate president and therefore felt they could use whatever means necessary to remove him from office, Strassel said.
‘Unprecedented Acts’
“One thing I try really hard to do in this book is enunciate what rules and regulations and standards were broken, what political boundaries were crossed, because I think that that’s where we’re seeing the damage,” Strassel said.
The “unprecedented acts” of the Resistance have caused the public to lose trust in longstanding institutions such as the FBI, the CIA, and the Department of Justice, and cheapened important political processes like impeachment, she said.
The Resistance fabricated and pushed the theory that it was Trump’s collusion with Russia that won him the presidency, not the support of the American people, and lied about the origins of the so-called evidence—the Steele dossier—that was used by the FBI to justify a counterintelligence investigation into the Trump campaign, Strassel said.
“We have never, in the history of this country, had a counterintelligence investigation into a political campaign,” she said.
In an anecdote that Strassel recounts in her book, she asked former House Intelligence Committee Chairman Devin Nunes (R-Calif.) if there was anything in America’s laws that could have prohibited this situation.
Nunes, who had helped write or update many laws concerning the powers of the intelligence community, replied, “I would never have conceived of the FBI using our counterintelligence capabilities to target a political campaign.
“If it had crossed any of our minds, I can guarantee we’d have specifically written: ‘Don’t do that.’”
In Strassel’s view, the Resistance is partially fueled by deep-seated anger, or what others have termed “Trump derangement syndrome”—an inability to look rationally at a man so far outside of Washington norms.
But at the same time, in Strassel’s view, much of the Resistance is motivated by a desire to amass political power using whatever means necessary.
“That involves removing the president who won. That involves some of these other things that you hear them talking about now: packing the Supreme Court, getting rid of the electoral college, letting 16-year-olds vote,” she said.
“These are not reforms. Reforms are things that the country broadly agrees are going to help improve stuff. This is changing the rules so that you get power, and you stay in power.”
The impeachment inquiry into the president, based on his phone call with Ukraine’s president, is just another example of how the Resistance is violating political norms and relying on flimsy evidence to try to remove him from office, she said.
Testimony in the inquiry has taken place behind closed doors, led by three House committees, and Democrats have so far refused to release transcripts from the depositions of former and current State Department employees.
“[Impeachment] is one of the most serious and huge powers in the Constitution. It was meant always by the founders to be reserved for truly unusual circumstances. They debated not even putting it in because they were concerned that this is what would happen,” Strassel said.
In the impeachment inquiries against Richard Nixon and Bill Clinton, Strassel said, American leaders “understood the great importance of convincing the American public that their decision to use this tool was just and legitimate.
“So if you look back at Watergate, they had hundreds of hours of testimony broadcast over TV that people tuned into and watched. It’s one of the reasons that Richard Nixon resigned before the House ever held a final impeachment vote on him, because the public had been convinced. He knew he had to go,” she said.
But now, instead of access to the testimonies, the public is receiving only leaked snippets and dueling narratives.
“You have Democrats saying, ‘Oh, this is very bad.’ And Republicans saying, ‘Oh, it’s not so bad at all.’ What are Americans supposed to think?” Strassel said.
Bureaucratic Resistance
Within the federal bureaucracy, there is a “vast swath of unelected officials” who have “a great deal of power to slow things down, mess things up, file the whistleblower complaints, leak information, actively engage against the president’s policies,” Strassel said.
“It’s their job to implement his agenda. And yet a lot of them are part of the Resistance, too,” she said.
Data shows that in the lead-up to the 2016 presidential election, government bureaucrats overwhelmingly contributed toward the Clinton campaign over the Trump campaign.
Ninety-five percent, or about $1.9 million, of bureaucrats’ donations went to Clinton, according to The Hill’s analysis of donations from federal workers up until September 2016. In particular, employees at the Department of Justice gave 97 percent of their donations to Clinton. For the State Department, it was even higher—99 percent.
“Imagine being a CEO and showing up and knowing that 95 percent of your workforce despises you and doesn’t want you to be there,” Strassel said.
Strassel pointed to when former acting Attorney General Sally Yates, a holdover from the Obama administration, publicly questioned the constitutionality of Trump’s immigration ban and directed Justice Department employees to disobey the order.
“It was basically a call to arms,” Strassel said. “What she should’ve done is honorably resigned if she felt that she could not in any way enforce this duly issued executive order.
“It really kicked off what we have seen ever since then: The nearly daily leaks from the administration, the whistleblower complaints,” as well as “all kind of internal foot-dragging and outright obstruction to the president’s agenda.”
According to a report by the Senate Committee on Homeland Security and Governmental Affairs, in Trump’s first 126 days in office, his administration “faced 125 leaked stories—one leak a day—containing information that is potentially damaging to national security under the standards laid out in a 2009 Executive Order signed by President Barack Obama.”
Activist Media
Strassel says the media has played a critical role in bolstering the anti-Trump Resistance.
“I’ve been a reporter for 25 years,” Strassel said.
“I’ve always felt that the media leaned left. That wasn’t a surprise to anyone. “But what we’ve seen over the past three years is something entirely different. This is the media actively engaging on one side of a partisan warfare. It’s overt.”
Along the way, the media have largely abandoned journalistic standards, “whether it be the use of anonymous sources, whether it be putting uncorroborated accusations into the paper, whether it’s using biased sources for information and cloaking them as neutral observers,” she said.
Among the many examples of media misinformation cited in Strassel’s book is a December 2017 CNN piece that claimed to have evidence that then-candidate Trump and his son Donald Trump Jr. had been offered early access to hacked emails from the Democratic National Committee. But it turned out the date was wrong. Trump Jr. had received an email about the WikiLeaks release one day after WikiLeaks had made the documents public.
“If it hurts Donald Trump, they’re on board,” Strassel said. And in many cases, the attacks on Trump have been contradictory.
“He’s either the dunce you claim he is every day or he’s the most sophisticated Manchurian candidate that the world has ever seen. You can’t have it both ways.
“He’s either a dictator and an autocrat who is consolidating power around himself to rule with an iron fist, or he’s the evil conservative who’s cutting regulations.”
Contrary to claims of authoritarianism, Trump has significantly decreased the size of the federal government. Notably, he reduced the Federal Register, a collection of all the national government’s rules and regulations, to the lowest it’s been since Bill Clinton’s first year in office.
“You can’t be a libertarian dictator,” Strassel said.
In addition to the barrage of attacks on Trump, the media has actively sought to “de-legitimize anybody who has a different viewpoint than they do, or who is reporting the facts and the story in a way other than they would like them to be presented.”
“They would love to make it sound as though none of us are worthy of writing about this story,” she said.
“The media is supposed to be our guardrails, right? When a political party transgresses a political boundary, they’re supposed to say ‘No, that’s beyond the pale.’”
Instead, “they indulged this behavior,” Strassel said.
“We had a media cheerleading the FBI for meddling in American politics. Can you ever imagine a time in American history where the media would have played such a role?
“In a way, I blame that for so much else that has gone wrong.”
Long-Term Consequences
Strassel says the actions taken by the Resistance will have long-term consequences for America.
“I keep warning my friends on the other side of the aisle: Think about the precedent you are setting here,” Strassel said.
For example, if Joe Biden wins the presidency in 2020 but Republicans take back the House, would the Republican-dominated House immediately launch impeachment proceedings against Biden for alleged corruption in Ukraine?
“I wouldn’t necessarily use the word [corruption], but there’s a lot of Republicans who happily would. And if they thought they’d get another shot at the White House, why not?” Strassel said.
It’s short-term thinking, she said, just like Sen. Harry Reid’s decision in 2013 to drop the number of votes needed to overcome a filibuster for lower-court judges.
“Did he really stop to think about the fact that it paved the way for Republicans to get rid of the filibuster for Supreme Court judges?” Strassel said.
If there’s any rule in Washington, “it’s that when you set the bar low, it just keeps going lower,” Strassel said.
“Donald Trump is going to be president for at most another five years. But the actions and the destruction that’s coming with some of this could be with us for a very long time,” she said.
“Should anyone allow their deep disregard for one particular man to so change the structure and the fabric of the country?”
