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The super rich are not only getting richer, they’re also getting younger.

According to a Bloomberg analysis, US investors with $25 million or more have seen their average age drop 11 years since 2014, to 47 years old, even as the average age of people with just $1 million is still 62, a data point that hasn’t changed in years. George Walper Jr., president of the Spectrem Group, who conducted the study, stated that a “vast generational transfer of wealth [is] just beginning.”

While the sample size of the study was small – it looked at only 185 Americans that had net worths higher than $25 million – and was highly unscientific, the findings from the study are consistent with other research that has been performed on the top 0.1%. The study found that more than a third of US wealth is held by those over 65 years old. This data point has not risen in step with the share of elderly Americans in the population, according to University of California Berkeley economists who examined the same data in 2016.

The paper concluded simply that the wealthiest Americans are getting younger. 

So where are these nouveau riches coming from? The new money seems to be derived from both inheritances as well as self-made fortunes. “There may be more Mark Zuckerbergs at the top of the wealth distribution than in the 1960s, but also more Paris Hiltons,” the economists wrote in the paper. 

And the number of US households that have net worths of at least $25 million are up from 84,000 in 2008 to 172,000 this year.

9 out of 10 investors under the age of 38 said that their success came from inheritance and family connections, but the same proportion also attributed their success to hard work and running their own business. About 70% of the richest investors went on record as saying that they are still working.

As more young people enter the top 0.1%, the vast majority of the remaining millennials and Generation X-ers are still struggling. Americans aged 35 to 54 saw their wealth from 2007 to 2016 – most of which was in housing – plunge by more than 41%.  

The richest are still using complex estate planning in order to transfer their wealth to their children and future generations. 91% of those who are worth $25 million or more keep assets in a trust, according to the study, and half of those have three or more trusts set up.

Ironiclly, in a world swept by liberal guilt, a major loser along the way of everyone getting richer have been charities – although about 200 of the world’s richest people have signed The Giving Pledge, the study suggested that only 15% of those worth $25 million donate $100,000 or more annually.

via ZeroHedge News http://bit.ly/2HsVqJt Tyler Durden

Via The Z blog,

The Citizen In A Democratic Empire

When most people think of citizenship, they think of their nation’s constitution or the rights guaranteed to them in the law. They will think of their obligations to their country, like paying taxes, obeying the law and defending the nation. In the West, a citizen is pretty much as the dictionary defines it, “a native or naturalized person who owes allegiance to a government and is entitled to protection from it.” It is a reciprocal set of obligations in the law, animated by a sense of duty by both the rulers and the ruled.

Additionally, at least in America, citizenship comes with a belief in equality between the people and the office holders. Every American grows up hearing that anyone can be President. The House of Representatives is known as the people’s house, because it was designed to not only represent the people, but be populated by representatives from the people. In other words, the citizens are ruled by their fellow citizens, not strangers or hired men paid by strangers. You can only be a citizen in your nation.

In the post-national world, that old definition of citizen no longer works. In a world where foreign people can just move in, claim the benefits and protections from the government, citizenship loses all value. At the same time, the state is increasingly alien to the people over whom it rules. In the European Union, the people are no longer ruled by their national governments, as all of the big decision are made in Brussels. In America, political offices are increasingly being filled by exotic weirdos with no connection to the natives.

The question then is what does it mean to be a citizen in a democratic empire?

The most obvious thing about the new citizen in the new post-national world is that the relationship between the citizen and the state is transactional. The state looks at the people as assets and liabilities. Theirs is a custodial role. The people that serve the interests of the state are treated differently from the people who depend on the state for their existence. It is a corporate relationship, except that people cannot be fired, so the useless ones will be stashed away while the productive are put to work.

Similarly, the citizen looks at his government in terms of what it can provide to him. He owes the state no more than he owes the coffee shop. The rules promulgated by the state are to be navigated around, rather than respected. If the rules work for the citizen or his group, the law is supported by the citizen or his group. On the other hand, if the law is an obstacle, then the law is subverted or ignored. In a post-national world, respect to the spirit of the law makes no more sense than having loyalty to a country.

This means that patriotism has no role in the democratic empire. Loyalty to your country only works if you actually have a country. The residue of patriotism will last for a while, as people will still think of their neighbors and friends as their countrymen, but in time, as those people are replaced by strangers, patriotism will disappear. In a transactional world populated by stranglers, your primary loyalty cannot be to the state, as it is just as much a stranger to you as the new neighbors, who just moved in from over the horizon.

The sterile transactionalism is already evident. Consider the change in relationship between employers and their workers. Everywhere in America, employment is at-will, which means an employee can be dismissed by an employer for any reason. Further, local business is atrophying as global enterprise monopolizes the marketplace. It used to be local business was a part of every community, sponsoring little leagues and charity drives. You’ll never see your kid’s little league sponsored by Google or Amazon.

Of course, this will have unforeseen consequences. For example, the military will no longer be able to rely on patriotism for recruitment. Since no one is a citizen in the old sense, the military stops being a citizen military. Instead, it takes on the characteristics of a mercenary army. The decision to join is no different than the decision to take one job over another. This will also apply to the police. The cops will no longer be citizens protecting and serving their community. They become free range prison guards.

Humans are social animals so the loss of national and regional identity means something will replace it. In a transactional world where everyone is a civic stranger, the old fashioned loyalties will become more important. Family, community, and tribe will be the only identities that have meaning. Again, we see the beginnings of this with the administrative layer of the managerial class. Those FBI agents plotting to overturn the 2016 elections were motivated by the emerging new identity politics.

That’s the thing that gets overstated in discussion of identity politics. The old identities will surely play a role, like race, ethnicity, and religion. New tribes resulting from the post-national relationships will emerge. The managerial state will begin to fracture and balkanize, as the rival power centers begin to jockey for power. Again, this can be seen in the obstruction of the Trump agenda by career bureaucrats in the government. They have become their own tribe and they have become class aware.

This paradise comes with a cost. Nations hold together for the same reason communities hold together. The social capital, those invisible bonds between people, breathe life into the organizing structure. Patriotism and civic duty are what animate the republic. Duty to king and the people is what animates a monarchy. This social capital is what binds the rulers to the ruled. In a highly transactional world, where social capital has been monetized or pushed to the margins, something else must animate the system.

That something else must be force driven by the self-interest of the people occupying positions in the power centers. We see some of that with the censorship campaigns by the tech giants and banks. This will become more overt until everyone has a natural hostility to everyone outside their social group. The cost of maintaining order will increase, but the means for imposing order will increase the cost of imposing that order. The empire will have no choice but to become more ruthless in its dealings.

If one wants to a preview of the post-national world, look at Lebanon. Every hill and every valley is its own nation, so to speak. Groups of the same religious sect or political persuasion can form temporary alliances, but Lebanon is not a coherent country with a common purpose. It’s just a place on the map with meaning only to those completely removed from the realities of Lebanese life. The future citizens will be highly local and covetous of the small benefits he and his group can extract from the whole.

via ZeroHedge News http://bit.ly/2HsxAxH Tyler Durden

On one hand the US shale industry has never had it better: following dramatic technological and efficiency improvements in recent years, US oil output is not only at an all time high at 11.9MMb/d, but is the highest of any OPEC or non-OPEC nation in the world. Oil production is so high, in fact, that as of October 2018, the US is now energy independent. Alas, this production glut blessing is also a curse, and according to one industry titan, US production growth could slow by as much as half this year.

Continental Resources’ Harold Hamm said that shale growth could decline by as much as 50% this year compared to 2018, OilPrice reported. Hamm said that a lot of shale E&Ps are trying to keep spending within cash flow. This newfound mantra of capital discipline has been imposed on the shale industry after a decade or so of a debt-fueled drilling frenzy.

“Producers have become more disciplined in their approach to capex,” Hamm said at the Argus Americas Crude Summit in Houston this week. “Several years back growth was a huge consideration. That consideration has been much less. The peak consideration now has been — are you overspending cash flow. Are you living within cash flow?”

The signs of a shale slowdown have been mounting. The rig count fell sharply in recent weeks. Production growth has already begun to slow. Schlumberger, the world’s largest oilfield services company, has warned that it is already seeing shale companies pulling back on drilling activity.

Meanwhile, even though the broader junk bond market has thawed, and new bond deals are once again coming to market, the same is not true for US energy companies. In fact, companies in the E&P sector have not held a single bond sale since the start of November, according to Dealogic, while share sales have also slowed. The data suggest that after a record-breaking boom in US oil output in 2018, growth will be weaker this year… much weaker if Hamm is correct.

Recently the US government’s Energy Information Administration forecast that between December 2018 and December 2019, US crude production will rise by about 500,000 barrels a day. That would represent a sharp slowdown from growth of 1.8m b/d over the previous 12 months.

Of course, for much of the past decade the US shale industry relied heavily on debt to finance its growth, with exploration and production companies raising about $300bn from bond issuance over the past 10 years. However, as crude prices started to slide last October, that source of capital was choked off, with just three bond sales by exploration companies that month, and none at all since November, according to the FT.

Ken Monaghan, co-head of high yield at fund manager Amundi Pioneer said the rise in exploration and production companies’ debt yields had put off potential borrowers, with spreads over US Treasury bonds climbing from 3.9 to 7.5% at their peak before settling back to about 5.9% this year.

“No one wanted to issue debt unless they had to,” Mr Monaghan said. “At the peak, they would have been looking at yields of about 10.25 per cent. That’s awfully expensive.”

But the best place to observe the crash about to hit the E&P sector, is not the E&P sector at all, but the private equity world where firms spent tens of billions in past years to gobble up assets, only to now fund themselves struggling to find buyers for their holdings in the shale patch as listed drillers face mounting pressure to curb spending, executives gathering in Houston said quoted by Bloomberg.

Those long-term investors – all of whom own assets they hope to sell when they’re “ripe” – are holding them for longer, lowering their expectations for returns and seeking mergers for their portfolio companies because of a lack of cash buyers, executives said Thursday at the Private Capital Conference in Houston.

“How many versions of ‘crap’ can we come up with to talk about the A&D market?” said a disgusted Chuck Yates, managing partner at Kayne Anderson Capital referring to the acquisitions and divestitures, or rather lack thereof, in the oil industry. “It’s just horrible. It’s terrible out there.“

Whereas in previous years, the natural buyers of PE energy holdings were listed oil and gas producers, the drop in crude prices has not only led to a drought in the high yield bond market but, combined with investor demands for them to conserve cash, has diminished buyers’ appetites for deals.

“There’s an inability to exit,” said George McCormick, co-founder of Outfitter Energy Capital, speaking about private equity oil and gas holdings as a whole. “The engine on the train is really public companies buying assets from privately backed companies. But public companies aren’t buying today.”

Low oil prices, and thus declining cash flow even as capital spending needs continue to rise, is not the only problem: the other major concern is whether there is oversupply, and how many of the E&P assets currently for sale would be viable one or two years from now, should oil prices fail to rebound. Add to this the bitter memories of 2015 when dozens of PE-sponsored energy names filed for bankruptcy, and one can see why “it’s terrible out there.”

On the face of it, 2018 was a strong year for deals in U.S. energy but many of the biggest transactions, such as Concho Resources’ $7.6 billion purchase of RSP Permian were  mostly stock deals. Private equity managers typically prefer their companies to be purchased for cash so they can return the proceeds to their own investors.

That’s a problem: “There are no cash bids coming through,” said Robert Cabes, head of investment management at Intrepid Financial Partners; there is another problem: “There’s a lot of equity that is part of these transactions.” Alas, to monetize that equity it would require selling a major chunk of it, and in a world in which most investors are “buy and hold”, any such attempt to test the market could result in a sharp repricing lower of the already beaten down energy sector.

In the early stages of the U.S. shale boom, companies could buy drilling rights and flip to larger rivals for a handsome profit. Those days are gone, with many companies now being kept private as the “greater fools” have suddenly disappeared, now that funding is increasingly scarce.

That means private equity firms increasingly need to think “strategically” and tap a different kind of management team, one with more operational experience, Stuart Page, managing director at Carlyle, told Bloomberg.

“You need to have the confidence that they can run a development program for five years or more. You can’t flip and get your payback quickly” he said.

The lack of natural buyers has also resulted in a familiar phenomenon within PE land – the infamous hot potato, where leading private players to buy and sell companies to each other, according to Liberty Mutual’s Avtar Vasu.

McCormick said Outfitter’s last three exits have been sales to private players, with two of those private equity firms. Vasu is currently selling an investment to a fellow private buyer because “the public markets are not there,” he said.

And with private equity no longer looking to buy but merely focused on liquidating existing assets in an increasingly uncertain environment, the entire sector has suddenly found itself bidless as the “greater fools” have finally disappeared. . 

via ZeroHedge News http://bit.ly/2FYGX5J Tyler Durden

Authored by Mac Slavo via SHTFplan.com,

NASA will attempt for the first time, to knock an asteroid off course and away from our planet to prevent a collision with Earth in 2022. NASA has approved a mission that aims to slam a spacecraft into a “small” asteroid and bump it off course.

According to IB Times, the asteroid NASA will be attempting to punch is the 150-meter-tall moon asteroid named Didymoon. As hinted by its name, which originates from the Greek word for twins, Didymos, it is part of a double asteroid system and orbits another asteroid that is 800 meters tall.  The Double Asteroid Redirection Test (DART), the name given to this mission, would be the space agency’s first planetary-defense mission.

NASA has also touted lofty goals of drilling into Yellowstone to prevent a supervolcano eruption too, noting that one wrong move could set the caldera off.

Nancy Chabot, a planetary scientist at Johns Hopkins University’s Applied Physics Laboratory and project scientist for DART, previously said that this mission is different from the usual NASA projects as it aims to solve a current problem in the solar system rather than study its past.

“That’s one of the big differences, is a lot of the science-driven missions seem to be focused on understanding the past of the solar system, the early solar system, how it all formed,” she told Space.com earlier this year.

“Planetary defense is really about the present solar system and what are we going to do in the present.”

DART will be powered by a solar-electric propulsion system. It is scheduled to crash into Didymoon in October of 2022. The European Space Agency (ESA) will be helping NASA out in this project with its Hera spacecraft, which will gather data about the asteroid. Hera won’t be present at the actual collision, but it will observe Didymoon in the aftermath of the crash.

NASA is so far confident that this mission will be a success and Didymoon will be knocked off course.

 “DART would be NASA’s first mission to demonstrate what’s known as the kinetic impactor technique – striking the asteroid to shift its orbit – to defend against a potential future asteroid impact,” Lindley Johnson, planetary defense officer at NASA Headquarters in Washington, said in a statement. 

According to NASA, the spacecraft weighing 500 kilograms, will slam into Didymoon at 6 kilometers per second. This will change the asteroid’s orbital velocity by approximately 0.4 millimeters per second.

via ZeroHedge News http://bit.ly/2Mw7XuS Tyler Durden

After 10 years of an euphoric spending binge, costs across the board are starting to become an issue. No sooner did we cover how Silicon Valley start-ups are starting to have to squeeze the most out of every dollar than Bloomberg reports that today’s new hedge fund manager “flies economy and stays in hostels”.

Take Brant Rubin who started a hedge fund last year and quickly found out that his fundraising wasn’t covering his overhead – and that his corner of the market was falling out of favor with his LPs and regulators. He told Bloomberg: “It’s not as lucrative anymore. Burning money is uncomfortable, particularly as we don’t have unlimited money to burn. But I believe in our business.”

And so, as a hedge fund manager, he’s constantly trying to get the most out of every dollar. He’s a Columbia Business School graduate that stays in hostels when he travels and flies budget airlines like Norwegian Air. On the ground, he opts for subways and public transportation instead of using Uber. His shop is above a steakhouse in Covent Garden, a more touristy area of London than the Mayfair district, where most older established hedge funds are.

According to Simmons & Simmons, “a law firm representing three quarters of the UK’s largest hedge funds and half of America’s biggest managers”, $50 million under management doesn’t cut it anymore for paying your overhead. The firm says that many hedge funds now require at least $200 million to make their bills. And the average size for new funds is down 72% to $28 million since 2000, according to Singapore-based data provider Eurekahedge.

In other words, an unsustainable trend for new asset managers.

Vaqar Zuberi, head of hedge funds at Mirabaud Asset Management stated: “Investors flock to two or three large launches every year, leaving the rest to slog through managing modest assets, waiting to either prove themselves or praying for a better asset-raising environment.”

Pension funds and large investors usually don’t even look at hedge funds until they have a three year track record and at least $100 million under management. Other funds are feeling the pressure, too. Stephen Hull and Kevin Connors shut down Ibex Capital after two years when they lost a large client this month, despite the fund managers’ resumes including working at places like Goldman Sachs.

Meanwhile, the industry itself continues shrink, pressured by investors demanding returns: 580 hedge funds closed over the last three years while only 550 launched. During the industry’s best years in the 2000s, more than 1000 hedge funds were starting up per year.

Much of this remains attributable to the fact that most hedge fund have been unable to generate alpha for the past decade, their returns lagging low-cost index funds. The average fee has fallen from 2 and 20 to 1.43% and 16.93%, on average, according to data from Hedge Fund Research. As a result, outflows from hedge funds have reached almost $100 billion since 2016.

But there are funds still starting up that believe they have a niche, like Jeff Henriksen, who is starting a three-person team called Thorpe Abbotts Capital. They are looking to hire students, instead of more seasoned analysts, to do research in order to save money.  He told Bloomberg: “We pay the interns, but not as much as we’d have to pay to hire analysts. You have to be creative.”

Other start-ups, like Irene Perdomo’s Devet Capital, are finding a way to make it work. She started her fund with $750,000 out of a spare room in Wimbledon. Now the former trader and her partner are managing over $100 million out of the very same space. They either travel to meet clients or invite them over, when necessary.

“There’s a lot of biased information about people trying to sell you things, and a lot of it you really don’t need when you’re starting out,” she concluded.

via ZeroHedge News http://bit.ly/2U9iWwG Tyler Durden

Authored by Tsvetana Paraskova via Oilprice.com,

Saudi Arabia isn’t buying the peak oil demand narrative…  

OPEC’s largest producer continues to expect global oil demand to keep rising at least by 2040 and sees itself as the oil producer best equipped to continue meeting that demand, thanks to its very low production costs.

Saudi Arabia will be the one to pump the last barrel of oil in the world, but it doesn’t see the ‘last barrel of oil’ being pumped for decades and decades to come. 

“I don’t see peak [oil] demand happening in 10 years or even by 2040,” Amin Nasser, president and chief executive officer of Saudi oil giant Saudi Aramco told CNN Business’ Emerging Markets Editor John Defterios on the sidelines of the World Economic Forum in Davos this week.

“There will continue to be growth in oil demand … We are the lowest cost producer and the last barrel will come from the region,” Nasser told CNN.

For several years, Nasser has been saying that peak oil demand is nowhere in sight, that petrochemicals will drive oil demand growth through 2050, and that all the ‘peak oil demand’ and ‘stranded resources’ talk is threatening an orderly energy transition and energy security.

Saudi Arabia—which has just announced that its huge oil reserves are slightly higher than previously estimated—looks to diversify its economy away from heavy dependence on crude oil, but one of the goals of its Vision 2030 diversification plan is to use less oil in domestic power generation to free up more barrels for exports.

As the world’s top crude oil exporter, Saudi Arabia will not be giving away easily its crown and the geopolitical clout that comes with it.

The Saudis have the two key ingredients to continue pumping oil till kingdom come—huge reserves and low production costs.

In addition, various organizations, including OPEC, estimate that shale production in the world’s current top oil producer—the United States—will peak at some point in the late 2020s, reviving demand for crude oil from OPEC (and its biggest oil producer Saudi Arabia).

Earlier this month, Saudi Arabia announced that an independent estimate of its oil reserves by DeGolyer and MacNaughton (D&M) showed that the Kingdom’s total proven oil reserves were 268.5 billion barrels as of the end of 2017, up from around 266 billion barrels previously estimated.

The BP Statistical Review of World Energy 2018 put Saudi Arabia’s oil reserves at 266.2 billion barrels at end-2017, or 15.7 percent of global oil reserves, second only to Venezuela’s 303.2 billion barrels.

DeGolyer and MacNaughton said last week that it completed the first contemporary independent assessment of reserves in Saudi Arabia, adding that at this point, it would “make no further comments on this extensive project.”

“This certification underscores why every barrel we produce is the most profitable in the world, and why we believe Saudi Aramco is the world’s most valuable company and indeed the world’s most important,” Saudi Energy Minister Khalid al-Falih said in the statement released by the Saudi Press Agency.

Saudi Aramco’s cost of production is just $4 a barrel, al-Falih later said in a news conference, as carried by Reuters.

Saudi Arabia may need oil prices higher than $80 a barrel to balance its budget because most of the income comes from oil. Yet, the Kingdom has what is probably the world’s lowest cost of pumping one barrel of oil.

While surging U.S. shale production has been boosting the global oil supply which Saudi Arabia and OPEC and non-OPEC Russia are looking to drain again with a new round of production cuts, current estimates point to shale peaking in the late 2020s.

According to the International Energy Agency (IEA), U.S. tight oil production will continue rising through 2025, and “Thereafter, with our current estimate for recoverable resources, production starts to fall gradually.”

In its latest World Oil Outlook, OPEC sees non-OPEC supply peaking in the late 2020s, mainly because of expected U.S. tight oil supply peak. In the medium term, through 2023, demand for OPEC crude is seen waning to 31.6 million bpd in 2023 because of non-OPEC supply growth. But after that, with the U.S. shale peak expected in the late 2020s, OPEC forecasts that demand for its crude will start rising again, to reach nearly 40 million bpd by 2040.

Will the world need oil in 2040? Saudi Aramco’s answer to this question is an emphatic ‘yes’.

The world will continue to need a lot more oil and a lot more exploration will be needed just to offset declining oil production at mature fields, Aramco’s Nasser said in Houston last year.

The energy transition is much more complex than simply replacing oil with renewables and electric vehicles (EVs), Nasser said last March and added: “In other words, I am not losing any sleep over ‘peak oil demand? or ‘stranded resources?.”

via ZeroHedge News http://bit.ly/2B3yb3g Tyler Durden

A white couple in the United Kingdom have been getting tanning injections to turn their skin black. Now, they claim that they both “identify as black” and they stated they will have black children, according to a new article by the Daily Mail.

The couple consists of “model” Martina Big, who is 30 years old and from Germany and Michael Eurwen, her 31-year-old husband. They have both used Melanotan, a synthetic hormone for tanning injections, in order to darken their skin. The once blonde haired Big had already been in the news in the United Kingdom due to plastic surgery she had to make her breasts a size 32S.

Before…

Big claims that just three injections turned her from a well-known white skinned model to a person of color.

…and after, with husband Michael. 

Naturally, after a national TV appearance across the pond, the couple was ridiculed on Twitter. Many asked about how the child could be black as a result of tanning injections if the couple’s DNA remained the same.

Others went after the couple’s doctor, who told them they would have black babies. Some took exception with Martina stating that her child could be “milk chocolate”.

A TV host overseas had similar questions for Big, asking, “‘If that baby is not black, because I’m trying to understand how genetically this would be possible, will you still be close to them if you give birth to a white baby?'”

Big responded: “Of course- it will be a mix of me and Micheal, but I’m pretty sure it will be black, but if it is milk chocolate or a little bit lighter it doesn’t matter.”

In March, Big reportedly flew to Kenya to be “baptized as a real African woman”.

“‘In his sermon the pastor said: ‘You have to be born again and now you are a new creature.’ I’m so happy and proud to be a real African woman’,” according to Big. 

via ZeroHedge News http://bit.ly/2ReBkCo Tyler Durden

Authored by Philip Giraldi via The Strategic Culture Foundation,

Many American still long for the good old days when men were still manly and President George W. Bush was able to announce that there was a “new sheriff in town” pledged to wipe terrorism from the face of the earth. “You’re either with us or against us,” he growled and he backed up his warning of lethal retribution with an enemies list that he called the “axis of evil.”

The axis of evil identified in those days in the 2002 State of the Union Address consisted of Iraq, Iran and North Korea. Iraq, which had not yet been invaded and conquered by the American war machine, was number one on the list, with Saddam allegedly brandishing weapons of mass destruction deliverable by the feared transatlantic gliders that could easily strike the United States. Bush explained that “Iraq continues to flaunt its hostility toward America and to support terror. The Iraqi regime has plotted to develop anthrax and nerve gas and nuclear weapons for over a decade. This is a regime that has already used poison gas to murder thousands of its own citizens, leaving the bodies of mothers huddled over their dead children. This is a regime that agreed to international inspections, then kicked out the inspectors. This is a regime that has something to hide from the civilized world.”

North Korea meanwhile was described as “A regime arming with missiles and weapons of mass destruction, while starving its citizens” while Iran “aggressively pursues these weapons and exports terror, while an unelected few repress the Iranian people’s hope for freedom.”

The phrase “axis of evil” proved so enticing that Undersecretary of State John Bolton used it two months later in a speech entitled “Beyond the Axis of Evil.” He included three more countries – Cuba, Libya and Syria because they were “state sponsors of terrorism that are pursuing or who have the potential to pursue weapons of mass destruction (WMD) or have the capability to do so in violation of their treaty obligations.” The nice thing about an Axis of Evil List is that you can make up the criteria as you go along so you can always add more evildoers.

Iraq was removed from the playing field in March 2003 while Libya had to wait for President Barack Obama and Secretary of State Hillary Clinton to be dealt with, but North Korea, Cuba, Syria and Iran are still around. Nevertheless, the idea of an enemies list continues to intrigue policy makers since it would be impossible to maintain the crippling burden of the military industrial complex without a simple expression that would convey to the public that there were bad actors out there waiting to pounce but for the magnificent efforts being made by Boeing, Lockheed, Northrop Grumman, General Dynamics and Raytheon to defend freedom.

The Administration of President Donald Trump, not to be outdone by its predecessors, has recently come up with two enemies lists.

The first one was coined by the irrepressible John Bolton, who is now National Security Adviser. He has come up with the “troika of tyranny” to describe Cuba, Venezuela and Nicaragua, where he sees “…the dangers of poisonous ideologies without control, and the dangers of domination and suppression… I am here to convey a clear message from the President of the United States about our policy towards these three regimes. Under this administration, we will no longer appease the dictators and despots near our coasts in this hemisphere. The troika of tyranny in this hemisphere — Cuba, Venezuela and Nicaragua — has finally found its rival.”

Bolton also demonstrated that he has a light touch, adding “These tyrants fancy themselves strongmen and revolutionaries, icons and luminaries. In reality, they are clownish, pitiful figures more akin to Larry, Curly, and Moe. The three stooges of socialism are true believers, but they worship a false God.”

Secretary of State Mike Pompeo has apparently also been looking at Venezuela and not liking what he is seeing. On his recent road trip to the Middle East he told reporters that “It is time to begin the orderly transition to a new government [in Caracas].” He declared that “The Maduro regime is illegitimate and the United States will work diligently to restore a real democracy to that country. We are very hopeful we can be a force for good to allow the region to come together to deliver that.” “Force for good” is another key soundbite used by Pompeo. In his Cairo speech on January 10th, he described the United States as a “force for good” in the entire Middle East.

Bolton might have thought “troika of tyranny” was a hands down winner, but he was actually upstaged by the dour Vice President Mike Pence who declared to a gathering of US Ambassadors that “Beyond our global competitors, the United States faces a ‘wolf pack of rogue states.’ No shared ideology or objective unites our competitors and adversaries except this one: They seek to overturn the international order that the United States has upheld for more than half a century.” The states Pence identified were North Korea, Iran, Cuba, Venezuela and Nicaragua. Of the five, only North Korea can even plausibly be considered as a possible threat to the United States.

As wolves are actually very social animals the metaphor provided by Pence does not hold together very well. But Pence, Bolton and Pompeo are all talking about the same thing, which is the continued existence of some governments that are reluctant to fall in line with Washington’s demands. They have to be banished from polite discourse by declaring them “rogue” or “tyrannical” or “evil.” Other nations with far worse human rights records – to include Saudi Arabia, Pakistan, Israel and Egypt – are given a pass as long as they stay aligned with the US on policy.

So useful “lists” are all about what Washington wants the world to believe about itself and its adversaries. Put competitors on a list and condemn them to eternal denigration whenever their names come up. And, as Pence observes, it is all done to prevent the overturning of the “international order.” However, his is a curious conceit as it is the United States and some of its allies, through their repeated and illegal interventions in foreign countries, that have established something like international disorder. Who is really doing what to whom is pretty much dependent on which side of the fence one is standing on.

via ZeroHedge News http://bit.ly/2T9bSjr Tyler Durden

Following reports that the chief executives of JP Morgan and Goldman Sachs reportedly met yesterday with House Financial Services Committee Chairwoman Maxine Waters, CNBC reported that the CEOs of the country’s largest banks will likely testify before the committee in March, according to two sources.

JP Morgan Chase CEO Jamie Dimon, Goldman Sachs’ David Solomon and Wells Fargo’s Tim Sloan are expected to testify, as are Bank of America’s Brian Moynihan and Morgan Stanley’s James Gorman.

One source who spoke with CNBC said the tone of the testimony would be “confrontational.”

In other words: It isn’t enough to subpoena Deutsche Bank for records pertaining to its relationship with President Trump. Waters, who needs to burnish her reputation as a foe of the big banks, wants to hold a media circus to make sure voters don’t forget about her when the next election cycle comes around.

Notably, the executives will also be testifying before Alexandria Ocasio-Cortez, one of the committee’s newest members who, we imagine, will use the hearing as the first public test of her mettle as a member of Congress – while earning countless headlines about her following through with her pledge to take on the big banks.

With “Socialist Sandy” and “Mad Maxine” running things, it’s bound to be one hell of a show.

via ZeroHedge News http://bit.ly/2S7qrXJ Tyler Durden

Elizabeth Warren has never been a friend to the wealthy. But in the age of Bernie Sanders and Alexandria Ocasio-Cortez, merely advocating for “holding the rich accountable” simply doesn’t penetrate like it did back in 2008. And that’s because, on the left flank of the Democratic Party, you’re not really a progressive unless you believe that the existence of billionaires is a policy error.

In keeping with this new “Democratic socialist” spirit, Warren is now calling for a ‘wealth tax’ on all Americans with more than $50 million in assets in what looks like a strategy to one-up AOC’s call for a 70% marginal tax rate on all Americans earning more than $10 million a year as Warren jockeys for mantle of the “one true progressive candidate” in what’s looking like an increasingly crowded primary field (one that, thanks to the entry of South Bend Mayor Pete Buttigieg, now features a gay progressive millennial).

Here’s more from the Washington Post:

Sen. Elizabeth Warren (D-Mass.) will propose a new annual “wealth tax” on Americans with more than $50 million in assets, according to an economist advising her on the plan, as Democratic leaders vie for increasingly aggressive solutions to the nation’s soaring wealth inequality.

Emmanuel Saez and Gabriel Zucman, two left-leaning economists at the University of California, Berkeley, have been advising Warren on a proposal to levy a 2 percent wealth tax on Americans with assets above $50 million, as well as a 3 percent wealth tax on those who have more than $1 billion, according to Saez.

After initially considering a 1% wealth tax on fortunes over $10 million, Warren and her team over the last two weeks decided that a 2% on fortunes over $50 million would make more sense. According to the Warren team’s calculations, the wealth tax would raise $2.75 trillion over ten years from about 75,000 families, a number equivalent to less than 0.1% of the US population (of course, that estimate is probably contingent on the US economy avoiding a punishing, prolonged recession).

 

Warren’s policy point man said the campaign believes the tax would help ameliorate wealth inequality in the US. Because, in Warren’s estimation, the IRS doesn’t do a very good job of taxing the rich.

“The Warren wealth tax is pretty big. We think it could have a significant affect on wealth concentration in the long run,” Saez said in an interview.

“This is a very interesting development with deep root causes: the fact inequality has been increasing so much, particularly in wealth, and the feeling our current tax system doesn’t do a very good job taxing the very richest people.”

And to make sure that the wealthy simply don’t resort to the myriad options available for ensuring that they pay as little in taxes as possible, Warren’s plan also includes several mechanisms for combating tax evasion.

Warren’s proposal includes at least three new mechanisms to combat tax evasion, according to a person familiar with the plan. Those are a significant increase in funding for the Internal Revenue Service; a mandatory audit rate requiring a certain number of people who pay the wealth tax to be subject to an audit every year; and a one-time tax penalty for those who have more than $50 million and try to renounce their U.S. citizenship.

Warren’s campaign has embraced the Democratic Party’s recent leftward drift, even publishing an op-ed in the NYT praising AOC’s 70% marginal tax rate proposal. Warren’s team argued that the tax is only fair, because, according to their calculations, the wealthiest Americans face a tax burden of 3.2% of their relative wealth, while regular families face 7.2%.

While Warren’s progressive tax policy will help her win votes on the Democratic left, we wonder how well a policy platform centered on tax hikes is going to play with an electorate still enjoying the additional spending cash from the Trump tax cuts. And even if it proves popular, Warren will still struggle to distinguish herself from Bernie Sanders should he enter the race.

via ZeroHedge News http://bit.ly/2Tab9i4 Tyler Durden