iftttwall

Ever since the world first learned about the DNC hack last year, there has been mass confusion over one peculiar decision made by then DNC Chair Debbie Wasserman Schultz: why, if DNC leaders thought they were the victim of a massive cyber attack by a hostile foreign government seeking to undermine their political ambitions, would they shun FBI help and instead engage the private security firm CrowdStrike?

The response was so confounding, in fact, it has resulted in several conspiracy theories attempting to explain why DWS would make such a seemingly bizarre decision and what, if anything, she was attempted to hide. 

Now, efforts to rationally explain the DNC’s response to their server hack have grown even more difficult after Donna Brazile revealed for the first time that DWS and Hillary’s campaign general counsel Marc Elias (yes, the very same Marc Elias who we now know laundered DNC and Hillary campaign cash through his law firm to pay for the Trump Dossier) apparently chose to hide their server issues, not only from the FBI, buy from DNC Officers as well.  Per The Daily Caller:

Rep. Debbie Wasserman Schultz, the former head of the Democratic National Committee, did not tell the DNC’s own officers about a breach on its servers for more than a month after learning about it, according to then-DNC officer Donna Brazile.

 

Wasserman Schultz alerted the officers of the breach only when The Washington Post was about to make the revelations public, Brazile writes in an excerpt of the book Politico ran Thursday. The DNC instead enlisted the law firm of Perkins Coie to make major decisions, including how to handle the breach of its servers that led to an embarrassing email dump.

 

The timing suggests the DNC’s unusual and significant choice to have the private law firm CrowdStrike conduct the investigation into the breach, rather than turn the evidence over to law enforcement, was made without consulting DNC officers.

 

“She told [officers] about the hacking only minutes before the Washington Post broke the news,” Brazile wrote.

Of course, this controversy erupted this past summer when even Obama’s Homeland Security Secretary Jeh Johnson blasted to the DNC’s inexplicable decision to refuse FBI assistance.

Former President Barack Obama’s Homeland Security Secretary Jeh Johnson testified in June 2017 before Congress that the DNC declined help from his agency after the email system was hacked.

 

“The response I got was, the FBI had spoken to them. They don’t want our help. They have CrowdStrike, the cyber security firm,” Johnson said. “I recall very clearly that I was not pleased that we were not in there helping them patch this vulnerability.”

 

Wasserman Schultz strongly disputed Johnson’s testimony.

 

“He’s wrong in every respect,” she said. She claimed she had never been informed of the FBI’s offer and said the FBI was the one who did not loop in high-level officials, saying it did not “do anything other than lob a phone call into our tech support through our main switchboard.”

 

“How is it that the FBI or DHS or any federal agency that was concerned about a foreign enemy state intruding on the networks of one of the two major political parties did not think it important enough to go higher than a tech support staffer?” she asked. “It is astounding and outrageous.”

The decision not to loop in the FBI was major, in part because there are potential chain-of-custody issues when law enforcement do not do the work directly. And CrowdStrike can’t work hand-in-hand with prosecutors the way the FBI can. Even CrowdStrike’s CEO said, as paraphrased by the Post, that it is “extremely difficult for a civilian organization to protect itself from a skilled and determined state such as Russia.”

Meanwhile, this isn’t the only time that DWS has responded in a bizarre and inexplicable way to a scandal.  As our readers are undoubtedly aware, DWS was the last Representative in Congress to fire the now-infamous IT staffer, Imran Awan, keeping him on her taxpayer funded payroll even after he had been banned from Congressional servers.

What is that saying about the truth and being set free?

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Authored by Chris Hamilton via Econimica blog,

The world economy is premised on a ludicrous idea – that Asia, then India, and then Africa will continue to drive economic growth. 

So as not to turn this article into a book, lets consider this idea focusing on East Asia consisting of China, Japan, North and South Korea, Taiwan, and minor others.  This region consists of 1.6 billion persons or about 22% of earths inhabitants.  However, since 2008, it is this region that is responsible for nearly 100% of the global increase in demand for oil (best proxy available for true economic growth) and having primarily driven global economic growth.  My point in this article is that the growth in this region is entirely a credit driven supernova against collapsing populations which will never be able to fill the 100+ million newly added apartments or pay back the debt incurred to achieve the "growth".  Contrarily, from an investor standpoint, this weakness is the green light to "invest" as aggressively as possible because as long as central banks exist, they have your back.

Consider, since 2000, China's debt outstanding has risen something like 14x's to 17x's or from about $2 trillion to something between $30 to $35 trillion presently.  As for Japan, who knows Japan's true debt as Japan's central bank is buying much or most of the debt and essentially throwing it in a black hole, never to be seen again(…monetization with a capital "M").

Why the massive debt creation and central bank monetization?  Depopulation with a capital "D".  First off, consider the collapse in fertility rates for these nations (chart below).  To maintain a constant, zero growth population, the childbearing population needs to produce 2.1 children in order to replace themselves (dashed line, below).  However, as the chart below shows, E. Asian nations have seen negative fertility rates for decades (Japan turning negative in '74, S. Korea in '83, China in '92, and N. Korea in '96).

Looking at the fertility rates from 2000 (chart below), some minor rises in fertility rates have been noticed in China since '00 and since '05 in Japan and S. Korea.  However, despite the minor upticks, all nations remain solidly negative and well below the 2.1 zero decline threshold.

For those expecting East Asia to continue driving global economic growth, I have a very big problem for you.  East Asia is in the midst of a population collapse.  The East Asian childbearing population, after rising by 366 million or +125% from 1950 until peaking in 2005, is now collapsing nearly as fast.  By 2030, those of childbearing age will have fallen by 180 million or a 27% decline (chart below).  By 2050, a clean halving of the childbearing population is likely.

So, the size of the childbearing population is back where it was in 1980 and by 2050 will be almost back to its 1960 size…but hypercritically, that population in 1960 was having approximately 5 children per family versus the 2020 or 2050 versions having somewhere around 1.6.  It is unlikely anything can be done to stop the depopulation daisy chain in East Asia and the economic collapse is already assured.  The collapse in demand against record quantities of assets is a mismatch for the ages…but of course central banks will continue to step in and monetize as long as possible.

As for the rest of the population, the growth among the heart of the regions economy, the 20 to 65 year olds, peaked in 1990 and has now indefinitely turned negative (falling something like 12 million from 2015 to 2020…and hundreds of millions fewer consumers, home buyers, tax payers by 2050).  Even the growth among the 65+ year old cadre will peak about 2035 before beginning to rapidly decelerate (change per five year periods, chart below).

Lastly, even growth among the old will be shifting to the very oldest as the bulk (and then the entirety) of the growth will be among the 75+ year olds (change per five year periods, chart below).

As for investors, this is your last and greatest chance.  The depopulation issue is not confined within East Asia.  The chart below shows the diving global fertility rate falling by more than 50% since peak fertility in the mid 1960's.

It is a global phenomenon exhibited nearly everywhere but Sub-Saharan Africa.  The chart below shows global fertility rates are universally collapsing and it is nearly solely Africa that continues the global population increases…at least for now.

Even India and/or the Middle East / North Africa (MENA) are likewise seeing collapsing fertility rates. India's fertility rate is almost sure to be negative by 2020.  There truly are no green shoots from a population growth perspective.

Central bankers will continue to "fake it" until they "make it".  Obviously, they never will "make it" but a select few will get absolutely rich beyond belief from central banker "efforts" as they continue to "fake it" as long as possible.  So, invest accordingly.

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Though Netflix pulled the plug this week on House of Cards after actor Kevin Spacey admitted to sexual assault on a 14-year old, it appears that Spacey's character Frank Underwood – a Machiavellian figure who wielded power by any means possible – may be a truer reflection of Spacey's actual personality and behavior than many in the film industry would care to admit. Yesterday multiple cast and crew members of the now defunct Netflix series came forward to tell CNN that Spacey created a "toxic" atmosphere on set in which his aggressive sexual behavior was something, as one camera assistant said, "everybody saw" – but which few formally complained about for fear that their careers would end. 

The CNN story was published the same day that yet another man has come forward to say he had a sexual relationship with Kevin Spacey at the age of 14 – which included an attempted rape – while Spacey was an adult working on Broadway. Similar to now substantiated allegations against powerful movie mogul Harvey Weinstein, the floodgate of accusations has now opened against Spacey, and it is likely that more will continue to emerge in the coming weeks. Both embattled figures, who were until very recently among the most powerful in Hollywood, now say they are "seeking treatment" in isolation as accusations are quickly turning into police investigations in different parts of the globe. 

Kevin Spacey/WireImage via Vulture

And in the midst of this week's fallout, it's not only Netflix that has quickly dropped Spacey, but the International Academy of Television Arts & Sciences announced that he will not be honored at the 2017 International Emmy Founders Award, having this week revoked his reward. But also like Weinstein, who appears to have assaulted women over a period of multiple decades, Spacey's behavior was apparently known all around Hollywood, to the point that it was referenced in a punchline in a 2005 episode of "The Family Guy".

Kevin Spacey's predatory behavior is such common knowledge in Hollywood that it was a joke on The Family Guy back in 2005. http://pic.twitter.com/K2yuOPZhJa

— Sam Kalidi (@samkalidi) October 30, 2017

Meanwhile, the testimonies from the House of Cards cast and crew couldn't be more shocking. One detailed account given to CNN from an unnamed former production assistant appears to have taken place in Maryland, near the House of Cards filming location:

The former production assistant who spoke with CNN said Spacey sexually assaulted him one afternoon when the assistant was assigned to drive to an offsite location to pick up Spacey and bring him to the "House of Cards" set, which is located about 30 miles outside of Baltimore.

 

The production assistant says that when he and Spacey were just minutes away from the set and while the car was moving, Spacey, who was driving, put his hands down the production assistant's pants. The production assistant told CNN that the touching was nonconsensual.

 

"I was in a state of shock," he said. "He was a man in a very powerful position on the show and I was someone very low on the totem pole and on the food chain there."

 

The production assistant asked that what happened next in the car not be described, for fear that it would identify him.

 

Once they had arrived on set, the production assistant says he helped the actor take his belongings from the car to Spacey's trailer on set. While the two men were in the trailer, the production assistant says, Spacey cornered him, blocked his exit and made inappropriate contact with him.

 

"I told him, 'I don't think I'm ok with this, I don't think I'm comfortable with this,'" the production assistant said. That's when the actor became "visibly flustered," fled the trailer, got in his car and left for the remainder of the day, according to the production assistant.

But perhaps just as scandalous is the behavior of the show's supervisors after the man issued a complaint. The production assistant told CNN that a supervisor merely told him to ensure that he's never alone with Spacey on set, after which the sexual harassment stopped long enough for him to slowly feel comfortable driving Spacey to the set once again. "I have no doubt that this type of predatory behavior was routine for him and that my experience was one of many and that Kevin had few if any qualms about exploiting his status and position," and the production assistant continued to tell CNN, "It was a toxic environment for young men who had to interact with him at all in the crew, cast, background actors."

Other crew members had similar stories of aggressive and unwanted physical touching which came to define the way Spacey interacted with young male employees on the set: "He would put his hands on me in weird ways," one crew member said. "He would come in and massage my shoulders from behind or put his hands around me or touch my stomach sometimes in weird ways that in normal everyday conversation would not be appropriate."

When asked why the crew member didn't complain to management, he said he feared that his career would be over: "That's the worst part about this whole thing. I would love to be able to speak out about this kind of stuff and not fear." But it seems such fear permeated the environment on set, and made everyone afraid to speak on what might not even be defined as an "open secret" as it appears to have been normalized by a management team which consistently looked the other way for fear of upsetting their powerful and legendary starring actor.

As yet a further House of Cards crew member told CNN:

"All the crew members commented on his behavior," the former camera assistant said. "What gets me is we have to sign sexual harassment paperwork before the start of the show and apparently [Kevin Spacey] doesn't have to do anything and he gets away scott-free with this behavior." CNN confirmed that Spacey was given guidelines regarding sexual harassment in the workplace.

 

Colleagues never complained because they were afraid of losing their jobs, the former camera assistant said.

 

"Who is going to believe crew members?" he said. "You're going to get fired."

According to one female employing Spacey couched his behavior in terms of "games" and "play fights" which would routinely take place with young males and would be quite out in the open. "It was very known that Kevin was inappropriate, and males I worked with complained to me about how they felt uncomfortable," she told CNN. "Kevin does this thing which was play fights with them in order to touch them," which specifically involved him approaching "multiple people" to "say hello, greet them, shake their hand and pull their hand down to his crotch and touch their crotch. I have friends say he reached up their shorts on set."

In response to the allegations of Netflix management turning a blind eye while essentially giving Spacey free reign, Netflix issued the following statement: 

"Netflix was just made aware of one incident, five years ago, that we were informed was resolved swiftly. On Tuesday, in collaboration with MRC [Media Rights Capital, which produces the series], we suspended production, knowing that Kevin Spacey wasn't scheduled to work until Wednesday. Netflix is not aware of any other incidents involving Kevin Spacey on-set. We continue to collaborate with MRC and other production partners to maintain a safe and respectful working environment. We will continue to work with MRC during this hiatus time to evaluate our path forward as it relates to the production, and have nothing further to share at this time."

MRC also told CNN in a separate statement that they have implemented "an anonymous complaint hotline, crisis counselors, and sexual harassment legal advisors for the crew" – though clearly it seems all too little too late. 

On the other side of Atlantic in the UK, multiple employees and cast members of the Old Vic theater in London, where Spacey was artistic director from 2004-2015, have similarly come forward with multiple allegations – this to the point that the Old Vic has announced its own confidential complaints process for any victims. 

Meanwhile, another man has come forward with chilling details involving Kevin Spacey's early career on Broadway when the actor was in his 20's living in New York City. He told Vulture in a bombshell interview published the same day as the CNN investigation that Spacey "groomed" him while a minor at the age of 14 for a sexual relationship after the two met at a youth acting workshop that Spacey led. 

The full interview contains lengthy and shocking lurid details of the victim's account, and concludes with the following bombshell assertions of the victim: 

I would call him a pedophile and a sexual predator. When I turned 25, I looked at every 14-year-old boy I could see, to try to understand what those men had seen, because I still on some level thought I had been a tiny adult…

 

He is a pedophile. When you look at his statement, you realize also he’s profoundly narcissistic. He thinks this is about being caught that he’s gay. And then he is spinning it, right? “Oh, people like gays now. So I’ll throw them that. I’ll say I’m gay and I will betray my whole community and do something else that conflates pedophilia with male homosexuality.” That’s great. Thank you for that. And that was probably the thing that made me want to talk more than anything else. How repulsive that was.

During the time period, the victim who remains unnamed for fears over his safety (though Vulture says it thoroughly collaborated multiple aspects to the story), says that he fled Spacey's apartment after the then 24-year old Broadway actor tried to rape him.

Meanwhile, when it comes to legal terms and the question of whether a formal investigation against Kevin Spacey can take place, though some states don't have a statute of limitations on child sexual assault crimes, New York's is one of the least favorable toward victims in the country (both Anthony Rapp – the first to come forward, and the latest victim who spoke to Vulture – appear far beyond the NY statute of limitations for filing criminal charges).

However, the latest revelations from House of Cards crew members were obviously more recent in time, and thus are subject to formal police investigation and persecution. And though we can image that any average citizen would certainly be aggressively pursued by criminal prosecutors, it remains to be seen if Hollywood's celebrity elite will be held to the same standards.

via http://ift.tt/2lMVYza Tyler Durden

 

Three weeks ago the Power of the Pattern shared what looked like a great opportunity in the chart below…See original post HERE

 

CLICK ON CHART TO ENLARGE

At the time we shared that Premium and Sector members owned this position and if you wanted to know what this opportunity was, to send us an email and we would get you the answer. The response to the quiz was very large (Thanks for all your emails) and we wanted to update those people that requested the info, on how this opportunity was doing.

We shared with readers that Hawaiian Electric (HE) looked to be creating a sweet opportunity. Below updates the performance since the quiz.

CLICK ON CHART TO ENLARGE

Some feel utilities can be boring. When a multi-year ascending triangle forms, great opportunities can be found, even in the utility sector!

Below updates the pattern on HE since the quiz-

CLICK ON CHART TO ENLARGE

Ascending triangles break to the upside two-thirds of the time and remain one of our favorite bull market patterns to play. HE continues to push higher and the measured move on this pattern suggests that it has more room to run to the upside.

In the future when we publish a “What would you do with this opportunity” post, feel free to send us an email at services@kimblechartingsolutions.com and we will get you the answer as soon as we can. If you would like to stay abreast of these patterns as they are taking place, we would be honored if you were a Premium or Sectors member.

 

Why you see chart pattern analysis with brief commentary:   There is a ton of news and opinions about markets and stocks that make the decision-making process more difficult than it needs to be.   

I believe the Power of the chart Pattern provides all you need to see what is taking place in an asset and determine the action to take. 

This approach has worked well for me and our clients and I encourage you to test it for yourself.

Receive my free research posted on the blog daily here 

Or,  send an email if you would like to see sample research and take me up on a trial of my premium or weekly research where I provide actionable alerts on breakouts and reversals in broad market indices, sectors, commodities, the miners and select individual stocks 

 

 

Email services@kimblechartingsolutions.com  

Call us Toll free 877-721-7217 international 714-941-9381 

Website: KIMBLECHARTINGSOLUTIONS.COM 

 

 

 

 

 

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Authored by James Rickards via The Daily Reckoning,

Market crashes often happen not when everyone is worried about them, but when no one is worried about them.

Complacency and overconfidence are good leading indicators of an overvalued market set for a correction or worse. Prominent magazine covers are notorious for declaring a boundless bull market right at the top just before a crash or correction.

October 19 saw the thirtieth anniversary of the greatest one-day percentage stock market crash in U.S. history – a 22% fall on October 19, 1987. In today’s Dow points, a 22% decline would equal a one-day drop of over 5,000 points!

I remember October 19, 1987 well. I was chief credit officer of a major government bond dealer. We didn’t have the internet back then, but we did have trading screens with live quotes. I couldn’t believe what I was watching at first, but by 2:00 in the afternoon we were all glued to our screens.

It was like being a passenger on a plane that was crashing, but you had no way out of the plane. Our firm was fine (bonds rallied as stocks crashed), but we were concerned about counterparties going bankrupt and not being able to pay us on our winning bets in bonds.

What’s troubling is that a lot of commentators said that the kind of crash that took place in 1987 couldn’t happen today and that markets were much safer. It’s true that circuit breakers and market closures could temporarily halt a slide better than we did in 1987. But those devices buy time, they don’t solve the underlying fear and panic that causes market crashes.

In any case, when I hear market pros say “It can’t happen again” it sounds to me like another market crash is just around the corner.

The problem with a market meltdown in today’s even more deeply interconnected markets, is that once it strikes, it’s difficult to contain. It can spread rapidly. Likewise, there’s no guarantee that a stock market meltdown will be contained to stocks.

Panic can quickly spread to bonds, emerging markets, and currencies in a general liquidity crisis as happened in 2008.

Why should investors be so concerned right now?

For almost a year, one of the most profitable trading strategies has been to sell volatility. That’s about to change…

Since the election of Donald Trump stocks have been a one-way bet. They almost always go up, and have hit record highs day after day. The strategy of selling volatility has been so profitable that promoters tout it to investors as a source of “steady, low-risk income.”

Nothing could be further from the truth.

Yes, sellers of volatility have made steady profits the past year. But the strategy is extremely risky and you could lose all of your profits in a single bad day.

Think of this strategy as betting your life’s savings on red at a roulette table. If the wheel comes up red, you double your money. But if you keep playing eventually the wheel will come up black and you’ll lose everything.

That’s what it’s like to sell volatility. It feels good for a while, but eventually a black swan appears like the black number on the roulette wheel, and the sellers get wiped out. I focus on the shocks and unexpected events that others don’t see.

The chart below shows a 20-year history of volatility spikes. You can observe long periods of relatively low volatility such as 2004 to 2007, and 2013 to mid-2015, but these are inevitably followed by volatility super-spikes.

During these super-spikes the sellers of volatility are crushed, sometimes to the point of bankruptcy because they can’t cover their bets.

The period from mid-2015 to late 2016 saw some brief volatility spikes associated with the Chinese devaluation (August and December 2015), Brexit (June 23, 2016) and the election of Donald Trump (Nov. 8, 2016). But, none of these spikes reached the super-spike levels of 2008 – 2012.

In short, we have been on a volatility holiday. Volatility is historically low and has remained so for an unusually long period of time. The sellers of volatility have been collecting “steady income,” yet this is really just a winning streak at the volatility casino.

I expect the wheel of fortune to turn and for luck to run out for the sellers.

Here are the key volatility drivers we should be most concerned about:

The North Korean nuclear crisis is simply not going away. In fact, it seems to be getting worse. Intelligence indicates that North Korea successfully tested a hydrogen bomb in September. This is a major development.

An atomic weapon has to hit the target to destroy it. A hydrogen bomb just has to come close. This means than North Korea can pose an existential threat to U.S. cities even if its missile guidance systems are not quite perfected. Close is good enough.

A hydrogen bomb also gives North Korea the ability to unleash an electromagnetic pulse (EMP). In this scenario, the hydrogen bomb does not even strike the earth; it is detonated near the edge of space. The resulting electromagnetic wave from the release of energy could knock out the entire U.S. power grid.

Trump will not allow that to happen, and you can expect a U.S. attack, maybe early next year.

Another ticking time bomb for a volatility spike is Washington, DC dysfunction, and the potential for a government shutdown in December…

Analysts who warn about government shutdowns are often viewed as the boy who cried wolf. We’ve had a few government shutdowns in recent years, most recently in 2013, and two in the 1990s.

These were considered true government shutdowns in the sense that Congress did not authorize spending for any agency, and all “non-essential” government employees were put on furlough. (Critical functions such as military, TSA, postal service and air traffic control continue regardless of any shutdown).

These shutdowns don’t last long. They are usually for one political party or the other to make its point about spending priorities, and are soon compromised in the form of higher spending and a return to business as usual.

Government shutdowns because of lack of spending authority are different from government shutdowns due to lack of borrowing authority and the Treasury’s inability to pay its bills, or hitting the so-called “debt ceiling.”

We had a debt ceiling shutdown in 2011. Those are far more dangerous to markets because they call into question the Treasury’s ability to pay the national debt. We’ve had two near shutdowns this year; one in March, and again at the end of September. Both times Congress passed a last minute “continuing resolution” or CR that keeps government funding at current levels and keeps the doors open until a final budget can be worked out.

The current CR expires on December 8.

This time the odds are high that the government actually will shut down. Why should investors be any more concerned about this shutdown than the one in 2013 or the near misses earlier this year?

There are several causes for concern.

The first is that there is less room for compromise. The White House wants funding for the Wall with Mexico. Many Republican members of Congress want to defund Planned Parenthood. The Democrats will not vote for the Wall or to defund Planned Parenthood, but do want more funding for Obamacare.

There is no middle ground on any of these issues so the chance of a long shutdown is quite high.

The second reason is that this shutdown comes at a time when the U.S. in facing an increased risk of war with North Korea, and Congress has many other tasks on its plate including tax reform, confirmation of a new Fed Chairman, the “Dreamers” legislation, and more. Political dysfunction in Washington can easily spill over into markets.

This time the wolf may be real.

In short, the catalysts for a volatility spike are all in place. We could even get a record super-spike in volatility if several of these catalysts converge.

The “risk on / risk off” dynamic that has dominated most markets since 2013 is coming to an end. From now on it may just be “risk off” without much relief. The illusion of low volatility, ample liquidity, and ever rising stock prices is over.

It has been nine years since the last financial panic so a new one tomorrow should come as no surprise.

The safe havens will be the euro, cash, gold and low-debt emerging markets such as Russia. The areas to avoid are U.S. stocks, China, South Korea and heavily indebted emerging markets.

It may not look like it now, but it could be a volatile and bumpy ride ahead.

via http://ift.tt/2gZPA2f Tyler Durden

Following last month’s sharply upward revised jobs report, whose initial negative print of -33,000 was since revised to a positive 18K, there was a sharp jump in October jobs, which while failing to meet consensus estimate of a +310K print, was still a solid +261K. But which jobs contributed the most? The answer, not surprising, is that the single biggest contributor was the same job category which was devastated in the previous month.

Readers will recall that last month we pointed out that workers in “food service and drinking places” aka waiters and bartenders, suffered their biggest drop on record, plunging by a whopping 111K. Well, one month later it’s payback time, and according to the BLS, 88,500 waiters and bartenders found jobs in October, as the “plowhorse” sector of the so-called recovery found its spark. As shown in the chart below the monthly increase in waiters and bartenders was a record.

Putting this number in context, the record increase in “food service and drinking places” jobs was a whopping third (34%) of all the 261K jobs added in October.

There was another amusing observation. As we said last month, “we find it delightfully ironic that in the one month in which waiters/bartenders lost the most jobs on record is when average wages (allegedly) soared” and added that “the September drop will be revised and move higher next month. After all, many people fleeing Florida and Houston had to stay in hotels and motels, for example.  And certainly eat out more.”

One month later,

of course, the other implication is that with tens of thousands of minimum wage jobs coming back, average hourly earnings would tumble, and – lo and behold – that is precisely what happened, with the worst monthly wage print since June 2015, as AHE actually declined by 1 cent in October.

Some other October jobs highlights:

• Goods Producing jobs: +33K, slightly better than expected, with the last month revised higher from +9K to +18K. Much of this is due to damage repairs from the Hurricanes, which has invigorated the manufacturing sector, which added 24K jobs.
• Trade, Transportation: +6K, weaker than expected, due to an 8.3K drop in retail trade jobs as Amazon continues to decimate the bricks and mortar sector.
• Professional Services: +50K, better than expected, and driven largely by an 18.3K jump in temp workers, which traditionally is seen as harbinger of strong labor demand, however in recent years this has become a chornic component of the labor force, as increasingly more employers settle for temp workers instead of full-timers.
• Education: +7.6K, in line with expectations
• Healthcare: +21.5K, slightly weaker than expected as only 12K social assistance jobs added
• Government: +9K. No hurricane impact and in line with expectations.
• Information: -1K. A surprising, continuing decline (following -3K jobs lost in September), in what has traditionally been one of the best paying job sectors.
• Leisure/Hospitality: +106K, much higher than expected, and very hurricane impacted. The sole contributor here was the abovementioned surge in waiters and bartenders.

Below is a breakdown of the monthly changes across the main job categories in September:

And from Bloomberg, here are the industries with the highest and lowest rates of employment growth for the most recent month. Additionally, monthly growth rates are shown for the prior year. The latest month’s figures are highlighted. Wage

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Authored by Steve H. Hanke of the Johns Hopkins University. Follow him on Twitter @Steve_Hanke.

Last December, the Iranian government of Hassan Rouhani passed a bill to change the name of Iran’s national currency from the rial to the toman. This would require a redenomination in which one zero was lopped off Iran’s unit of account, as 1 toman is equal to 10 rials.  Without a change in the monetary and exchange rate regime, the proposed changes amount to a great illusion.

Iran’s currency is, of course, one of the many reasons for Iran’s economic dysfunction. Indeed, since the Islamic Revolution of 1979, the rial has officially lost virtually all of its value – 99.8% to be exact. Judged by the magnitude of this theft, the Revolution has been a total disaster.

While inflation has come down from its October 2012 peak, which I measured at a rate of 62% per month, the rate is still quite elevated, with the official annual inflation rate sitting at 9.6%. But, that rate is the official rate, and official statistics in Iran are always a bit dodgy. My calculations put the current inflation rate close to 20% – double the official rate.

To fix its currency problem, Iran could adopt another country’s currency – like the U.S. dollar or the euro. These are political non-starters, though. The Russian ruble or the Chinese yuan might be more politically palatable, but they are inferior. For a high quality currency issued by a “neutral” country, Iran could follow Liechtenstein and adopt the Swiss franc. But, that would also be difficult for Iran to do. The theocracy would have to admit that it was fallible, and that Iran was going to replace its own currency with a superior foreign unit of account to ensure stability.

There is a solution – an elegant solution. Iran should go for gold, a “currency” that is not issued or controlled by a sovereign. Iran could do this and retain its own currency, too.

Until early in the 20th century, gold played a central role in the world of money. Gold had an incredible run — almost three thousand years. And why not? After all, Professor Roy Jastram convincingly documents in The Golden Constant just how gold maintains its purchasing power over long periods of time.

But, since President Richard Nixon closed the gold window in August 1971, gold has not played a formal role in the international monetary regime. Today, the “regime” is characterized by many as a chaotic non-system.

In the past decade, gold prices have surged and there have been noises in some quarters that gold’s formal role should be re-established in the sphere of international money. In 1997, Nobelist Robert Mundell went so far as to predict that “Gold will be part of the structure of the international monetary system in the twenty-first century.”

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One foolproof way to transform Professor Mundell’s prediction into a reality is via gold-based currency boards. Currency boards have existed in more than 70 countries and a number are still in operation today. Countries with such monetary institutions have experienced more fiscal discipline, superior price stability, and higher growth rates than comparable countries with central banks.

An orthodox currency board is a monetary institution that only issues notes and coins. These monetary liabilities are freely convertible into a reserve currency (also called the anchor currency) at a fixed rate on demand. The reserve currency is a convertible foreign currency or a commodity chosen for its expected stability. For reserves, such a currency board holds low-risk, interest-earning securities and other assets payable in the reserve currency.

By law, a currency board is required to maintain a fixed exchange rate with the reserve currency and hold foreign reserves equal to 100% of the monetary base. This prevents the currency board from increasing or decreasing the monetary base at its own discretion. Nor does a typical currency board influence the relationship between the monetary base and the money supply by imposing reserve ratios or otherwise regulating commercial banks. An orthodox currency board system is passive and is characterized by automaticity.

In the past, currency boards have issued monetary liabilities that were fully backed by gold and were fully convertible into gold at a fixed rate on demand. The following abridged gold-based currency board law presents how a modern, independent, gold-based currency board could be established and would operate in Iran. As drafted, the law would allow for the creation of a government-owned entity. But, with slight amendments, the draft law could support the establishment of a purely private currency board.

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An Islamic Republic of Iran Gold-Based Currency Board Draft Law

1. The Currency Board of the Islamic Republic of Iran (“the Board”) is hereby created. The purpose of the Board is to issue notes and coins denominated in a gold currency unit, and to hold foreign reserves sufficient to maintain them fully convertible at a fixed exchange rate into gold.

2. The Board shall have its legal seat in Switzerland and shall be subject to the laws of Switzerland.

3. The notes and coins issued by the Board shall be fully convertible into gold on demand. The Board shall charge no commission for exchanging its currency into or out of gold. The notes shall be printed outside the Islamic Republic of Iran.

4a. The Board may not increase its monetary liabilities without gold or foreign reserves equal to 100 percent of the amount of the increase.

4b. The Board shall hold its reserves in gold or in highly rated and liquid securities either denominated in gold or fully hedged against changes in the fiat-currency price of gold. These reserves shall be on deposit at the Bank for International Settlements or at an internationally certified gold warehouse.

5. The Board shall remit to the Government of the Islamic Republic of Iran all net seigniorage beyond what is necessary to maintain 110 percent foreign reserves.

6. The Board may not perform banking services for the Government of the Islamic Republic of Iran, and it shall not be responsible for the financial obligations of the government.

7. Failure to maintain the fixed exchange rate with gold shall make the Board and its directors subject to legal action for breach of contract according to the laws of Switzerland. This provision does not apply to attempts to redeem embezzled, mutilated, or counterfeited notes, coins, and deposits.

8. Existing laws that conflict with this law are void.

9. This law takes effect immediately upon its publication.

 

This piece was originally published on Forbes.

via http://ift.tt/2xYIQIZ Steve H. Hanke