Just hours after Tesla announced it would be slashing prices for the third time this year on most of its models, an actual luxury carmaker is singing another tune. Rolls-Royce is reportedly having a very difficult time meeting demand for its Cullinan SUV, which starts at $325,000.
That price is before any type of customization, which is something that all Rolls-Royce customers opt for, according to a report by Bloomberg. Production of the vehicle is “booked solid” until the fourth quarter of 2019, and unlike Tesla, it’s fair to guess that Rolls-Royce will find these reservations to be extremely “relevant”.
Chief Executive Officer Torsten Mueller-Oetvoes said at the Geneva International Auto Show that “It’s exceeding our expectations. We have customers that aren’t patient and want their car tomorrow, so we’re doing the occasional Saturday shift to meet demand.”
The brand is owned by BMW, who engineered the Cullinan to meet the growing SUV demand worldwide, born out of the American market. The model is also extremely popular in Russia and Canada, two markets that traditionally have not been large contributors to revenue for Rolls-Royce in the past. “The all-wheel drive is attractive for those markets,” Mueller-Oetvoes continued.
At this point Elon Musk is surely asking himself why he didnt’ go the “luxury supercar” route.
And speaking of, so far there has been no word to whether or not Rolls-Royce has erected a makeshift tent outside of its production facility to meet demand.
via ZeroHedge News https://ift.tt/2TtbZuq Tyler Durden
Ten years after the outbreak of the global financial crisis, banks in the euro area have not recovered. The Euro Stoxx Financials is only 40% above its March 2009 low, well below its pre-crisis level (Fig. 1). By contrast, the S&P Financials index in the US has risen by 320%. The different fates of European and US financial institutions could be due to the different monetary and regulatory crisis therapies of the European Central Bank (ECB) and the Fed.
Fig. 1: US and Euro Area Financial Stock Prices
Source: Thompson Reuters Datastream.
The Fed lowered its key interest rate faster than the ECB (Fig. 2) and expanded its balance sheet more quickly via quantitative easing (Fig. 3). The Fed dropped its benchmark rate down to an all-time low of 0.25% in December of 2008. The Fed’s asset purchases included risky securitized mortgage loans, which helped prevent a financial meltdown during the crisis. The US Treasury also purchased more than $400 billion worth of securitized mortgage loans and bank shares under the Troubled Asset Relief Program (2009-2012). Thus, the banks were forcibly recapitalized. As asset and real estate prices recovered thanks to the Fed’s monetary policy, banks’ balance sheets were further stabilized.
In contrast, the ECB was more hesitant to lower key interest rates toward zero. The main refinancing rate only touched the zero bound in 2015 (Fig. 2). Tumbling banks in the southern euro states and Ireland inflated government debt, which finally triggered the European sovereign debt crisis from 2012 onwards. Large-scale outright purchases of assets only set in beginning in March 2015, after the first expansion of the ECB balance sheet via (targeted) long-term financing operations had gradually expired. Out of the ECB’s latest 2,600 billion euro asset purchases 80% were attributed to government bonds (Fed: 47%), which makes the quantitative easing of the ECB look more like a rescue program for ailing governments than for banks.
Fig 2: Key Interest Rates for Fed and ECB
Source: ECB, Federal Reserve Bank of St. Louis.
The large asset purchases of the Fed and the ECB through the quantitative easing programs led the commercial banks to maintain huge reserves at the central banks. The Fed decided to remunerate these excess reserves in 2008. With the interest rate on excess reserves climbing to 2.4% over the past few years, the Fed has transferred 95 billion dollars to US banks via this channel. In contrast, since 2014 the ECB has maintained a negative interest rate on commercial bank deposits (currently -0.4%), thus charging interest for excess reserves. German banks, for instance, have payed 20 billion euros to the ECB.
The Fed ended its ultra-loose monetary policy earlier than the ECB. Since the end of 2015 the Fed has been slowly pushing up the effective federal funds rate, which now stands at 2.3% (Fig. 2). As the Fed is cautiously reducing its balance sheet (which it began doing in 2016), long-term interest rates have also risen. The Fed has thus relieved US financial institutions of the burden of continuously shrinking interest margins. For instance, the net interest margin of J.P. Morgan climbed to 2.38% in 2018, up from 1.98% in 2017.
Fig 3: Size of Fed and ECB Balance Sheets
Source: ECB, Federal Reserve Bank of St. Louis.
In contrast, the ECB has sent no signals of higher key interest rates or a reduction in the huge holdings of government bonds. As a result, for instance, the interest margin of German banks has fallen from around 3.0% in March 2009 to 1.8% today. The transformation margin between yields on 10-year German government bonds and overnight money was reduced during the same time span from 2.8% to around 0.7%. Net interest earnings of German banks shrank from 66 billion euros in 2008 to 28 billion euros in 2018. As the ECB’s key interest rates remain low, net interest income of euro area banks is expected to shrink further.
On the regulatory front, Basel III increased capital requirements in the US and Europe. Both governments have taken additional steps to regulate financial institutions. In the US, the Dodd-Frank Act tightened regulatory requirements, while the Volcker Rule restricted lucrative proprietary trading. US financial supervisors have closed down 541 insolvent banks since 2008. Recently, however, the reporting requirements for almost all (but the largest) US financial institutions were relaxed again. Proprietary trading is still indirectly possible for large institutions via market making.
In the euro area, the ECB’s Single Supervision Mechanism has been monitoring the 130 largest financial institutions in the euro zone since 2014. The euro area banks have to pay 60 billion euros into a bank rescue fund until 2023. The EU also created restrictions on proprietary trading that have led to a considerable decline in securities holdings. Frequent stress tests by the ECB are a burden on euro area banks, but they have done little to identify risks early, for instance at Dexia, BBVA/Garanti, Carige and Banca Monte dei Paschi.
In the euro area, shaky banks survive because they are kept afloat with national tax injections or via opaque network of rescue institutions such as EFSF, ANFA, EFSM, and ESM. The ECB’s asset purchases and the TARGET2 payment system have turned out to be a quasi unconditional credit system: around a trillion euros have been handed out via TARGET2 to ailing southern European banks, with gradually eased collateral requirements. As a result, since 2008, the “Failed Bank Tracker” has reported only 52 bankruptcies for the entire euro area.
Shrinking interest margins and high regulatory costs are driving many small banks into mergers. (In Germany, the number of banks has fallen by 12% since 2008.) Failing banks are taken over by (still) more solid competitors – usually with the help of politicians. The volume of bad loans in the euro area is estimated to be between 650 and 1,000 billion euros. In 2018, the officially reported share of non-performing loans was 45% in Greece, 12% in Portugal, and 10% in Italy (1.3% in the USA). In reality, the shares may be larger. In particular in the southern euro area, funding by central banks are keeping a growing number of zombie banks afloat.
Finally, the diverging interest rate levels and the different successes of financial stabilization measures have triggered large capital flows from the euro area to the United States. The unresolved financial and government debt crises, the extended low interest rate policy of the ECB, and EU pressure toward fiscal austerity have all contributed to the huge capital outflows from the euro area (around two trillion euros since 2012). This has further destabilized European banks and enterprises. In contrast, the rising interest rates and the successful financial stabilization policies of the Fed have attracted large shares of these capital flows to the US, which have strengthened the quality of US credit portfolios.
The upshot is that the ECB’s monetary policy and financial supervision leaves the euro area banks unprepared for the upcoming economic downswing. The ECB may soon only be able to stabilize euro area banks through even larger purchases of securities and unconditional credit provision. This would be tantamount to progressive zombification, which promises nothing good for economic and political instability in Europe.
via ZeroHedge News https://ift.tt/2F01aY5 Tyler Durden
Information from local sources said that US army helicopters have already transported the gold bullions under cover of darkness on Sunday [February 24th], before transporting them to the United States.
The sources said that tens of tons that Daesh had been keeping in their last hotbed in al-Baghouz area in Deir Ezzor countryside have been handed to the Americans, adding up to other tons of gold that Americans have found in other hideouts for Daesh, making the total amount of gold taken by the Americans to the US around 50 tons, leaving only scraps for the SDF [Kurdish] militias that serve them [the US operation].
Recently, sources said that the area where Daesh leaders and members have barricaded themselves in, contains around 40 tons of gold and tens of millions of dollars.
Allegedly, “US occupation forces in the Syrian al-Jazeera area made a deal with Daesh terrorists, by which Washington gets tens of tons of gold that the terror organization had stolen, in exchange for providing safe passage for the terrorists and their leaders from the areas in Deir Ezzor where they are located.”
ISIS was financing its operations largely by the theft of oil from the oil wells in the Deir Ezzor area, Syria’s oil-producing region, and they transported and sold this stolen oil via their allied forces, through Turkey, which was one of those US allies trying to overthrow Syria’s secular Government and install a Sunni fundamentalist regime that would be ruled from Riyadh (i.e., controlled by the Saud family). This gold is the property of the Syrian Government, which owns all that oil and the oil wells, which ISIS had captured (stolen), and then sold. Thus, this gold is from sale of that stolen black-market oil, which was Syria’s property.
The US Government evidently thinks that the public are fools, idiots. America’s allies seem to be constantly amazed at how successful that approach turns out to be.
Jihadists were recruited from throughout the world to fight against Syria’s secular Government. Whereas ISIS was funded mainly by black-market sales of oil from conquered areas, the Al-Qaeda-led groups were mainly funded by the Sauds and other Arab royal families and their retinues, the rest of their aristocracy. On 13 December 2013, BBC headlined “Guide to the Syrian rebels” and opened “There are believed to be as many as 1,000 armed opposition groups in Syria, commanding an estimated 100,000 fighters.” Except in the Kurdish areas in Syria’s northeast, almost all of those fighters were being led by Al Qaeda’s Syrian Branch, al-Nusra. Britain’s Center on Religion & Politics headlined on 21 December 2015, “Ideology and Objectives of the Syrian Rebellion” and reported: “If ISIS is defeated, there are at least 65,000 fighters belonging to other Salafi-jihadi groups ready to take its place.” Almost all of those 65,000 were trained and are led by Syria’s Al Qaeda (Nusra), which was protected by the US
In September 2016 a UK official “FINAL REPORT OF THE TASK FORCE ON COMBATING TERRORIST AND FOREIGN FIGHTER TRAVEL” asserted that, “Over 25,000 foreign fighters have traveled to the battlefield to enlist with Islamist terrorist groups, including at least 4,500 Westerners. More than 250 individuals from the United States have also joined.” Even just 25,000 (that official lowest estimate) was a sizable US proxy-army of religious fanatics to overthrow Syria’s Government.
On 26 November 2015, the first of Russia’s videos of Russia’s bombing ISIS oil trucks headed into Turkey was bannered at a US military website “Russia Airstrike on ISIS Oil Tankers”, and exactly a month later, on 26 December 2015, Britain’s Daily Expressheadlined “WATCH: Russian fighter jets smash ISIS oil tankers after spotting 12,000 at Turkish border”. This article, reporting around twelve thousand ISIS oil-tanker trucks heading into Turkey, opened: “The latest video, released by the Russian defence ministry, shows the tankers bunched together as they make their way along the road. They are then blasted by the fighter jet.” The US military had nothing comparable to offer to its ‘news’-media. Britain’s Financial Times headlined on 14 October 2015, ”Isis Inc: how oil fuels the jihadi terrorists”. Only America’s allies were involved in this commerce with ISIS — no nation that supported Syria’s Government was participating in this black market of stolen Syrian goods. So, it’s now clear that a lot of that stolen oil was sold for gold as Syria’s enemy-nations’ means of buying that oil from ISIS. They’d purchase it from ISIS, but not from Syria’s Government, the actual owner.
An estimated 20,000-40,000 barrels of oil are produced daily in ISIS controlled territory generating $1-1.5 million daily profit for the terrorist organization. The oil is extracted from Dir A-Zur in Syria and two fields in Iraq and transported to the Kurdish city of Zakhu in a triangle of land near the borders of Syria, Iraq and Turkey. Israeli and Turkish mediators come to the city and when prices are agreed, the oil is smuggled to the Turkish city of Silop marked as originating from Kurdish regions of Iraq and sold for $15-18 per barrel (WTI and Brent Crude currently sell for $41 and $45 per barrel) to the Israeli mediator, a man in his 50s with dual Greek-Israeli citizenship known as Dr. Farid. He transports the oil via several Turkish ports and then onto other ports, with Israel among the main destinations.
The US had done the same thing when it took over Ukraine by a brutal coup in February 2014: It grabbed the gold. Iskra News in Russian reported, on 7 March 2014, that “At 2 a.m. this morning … an unmarked transport plane was on the runway at Borosipol Airport” near Kiev in the west, and that, “According to airport staff, before the plane came to the airport, four trucks and two Volkswagen minibuses arrived, all the truck license plates missing.” This was as translated by Michel Chossudovsky at Global Research headlining on 14 March, “Ukraine’s Gold Reserves Secretly Flown Out and Confiscated by the New York Federal Reserve?” in which he noted that, when asked, “A spokesman for the New York Fed said simply, ‘Any inquiry regarding gold accounts should be directed to the account holder.’” The load was said to be “more than 40 heavy boxes.” Chossudovsky noted that, “The National Bank of Ukraine (Central Bank) estimated Ukraine’s gold reserves in February to be worth $1.8 billion dollars.” It was allegedly 36 tons. The US, according to Victoria Nuland (Obama’s detail-person overseeing the coup) had invested around $5 billion in the coup. Was her installed Ukrainian Prime Minister Arseniy Yatsenyuk cleaning out the nation’s gold reserves in order to strip the nation so that the nation’s steep indebtedness for Russian gas would never be repaid to Russia’s oligarchs? Or was he doing it as a payoff for Nuland’s having installed him? Or both? In any case: Russia was being squeezed by this fascist Ukrainian-American ploy.
The Syria operation was about oil, gold, and guns. However, most of America’s support was to Al-Qaeda-led jihadists, not to ISIS-jihadists. As the great independent investigative journalist Dilyana Gaytandzhieva reported on 2 July 2017:
“In December of last year while reporting on the battle of Aleppo as a correspondent for Bulgarian media I found and filmed 9 underground warehouses full of heavy weapons with Bulgaria as their country of origin. They were used by Al Nusra Front (Al Qaeda affiliate in Syria designated as a terrorist organization by the UN).”
Furthermore, On 8 March 2013, Richard Spenser of Britain’s Telegraph reported that Croatia’s Jutarnji List newspaper had reported that “3,000 tons of weapons dating back to the former Yugoslavia have been sent in 75 planeloads from Zagreb airport to the rebels, largely via Jordan since November. … The airlift of dated but effective Yugoslav-made weapons meets key concerns of the West, and especially Turkey and the United States, who want the rebels to be better armed to drive out the Assad regime.”
Also, a September 2014 study by Conflict Armaments Research (CAR), titled “Islamic State Weapons in Iraq and Syria”, reported that not only east-European, but even US-made, weapons were being “captured from Islamic State forces” by Kurds who were working for the Americans, and that this was very puzzling and disturbing to those Kurds, who were risking their lives to fight against those jihadists.
In December 2017, CAR headlined “Weapons of the Islamic State” and reported that “this materiel was rapidly captured by IS forces, only to be deployed by the group against international coalition forces.” The assumption made there was that the transfer of weapons to ISIS was all unintentional.
That report ignored contrary evidence, which I summed up on 2 September 2017 headlining “Russian TV Reports US Secretly Backing ISIS in Syria”, and reporting there also from the Turkish Government an admission that the US was working with Turkey to funnel surviving members of Iraq’s ISIS into the Deir Ezzor part of Syria to help defeat Syria’s Government in that crucial oil-producing region. Moreover, at least one member of the ‘rebels’ that the US was training at Al Tanf on Syria’s Jordanian border had quit because his American trainers were secretly diverting some of their weapons to ISIS. Furthermore: why hadn’t the US bombed Syrian ISIS before Russia entered the Syrian war on 30 September 2015? America talked lots about its supposed effort against ISIS, but why did US wait till 16 November 2015 before taking action, “’Get Out Of Your Trucks And Run Away’: US Gives ISIS 45 Minute Warning On Oil Tanker Strikes”?
So, regardless of whether the US Government uses jihadists as its proxy-forces, or uses fascists as its proxy-forces, it grabs the gold — and grabs the oil, and takes whatever else it can.
This is today’s form of imperialism.
Grab what you can, and run. And call it ‘fighting for freedom and democracy and human rights and against corruption’. And the imperial regime’s allies watch in amazement, as they take their respective cuts of the loot. That’s the deal, and they call it ‘fighting for freedom and democracy and human rights and against corruption around the world’. That’s the way it works. International gangland. That’s the reality, while most of the public think it’s instead really “fighting for freedom and democracy and human rights and against corruption around the world.” For example, as RT reported on Sunday, March 3rd, about John Bolton’s effort at regime-change in Venezuela, Bolton said: “I’d like to see as broad a coalition as we can put together to replace Maduro, to replace the whole corrupt regime,’ Bolton told CNN’s Jake Tapper.” Trump’s regime wants to bring clean and democratic government to the poor Venezuelans, just like Bush’s did to the Iraqis, and Obama’s did to the Libyans and to the Syrians and to the Ukrainians. And Trump, who pretends to oppose Obama’s regime-change policies, alternately expands them and shrinks them. Though he’s slightly different from Obama on domestic policies, he never, as the US President, condemns any of his predecessors’ many coups and invasions, all of which were disasters for everybody except America’s and allies’ billionaires. They’re all in on the take.
The American public were suckered into destroying Iraq in 2003, Libya in 2011, Syria in 2011-now, and so many other countries, and still haven’t learned anything, other than to keep trusting the allegations of this lying and psychopathically vicious and super-aggressive Government and of its stenographic ‘news’-media. When is enough finally enough? Never? If not never, then when? Or do most people never learn? Or maybe they don’t really care. Perhaps that’s the problem.
Back on 21 December 2018, one of the US regime’s top ‘news’-media, the Washington Post, had headlined “Retreating ISIS army smuggled a fortune in cash and gold out of Iraq and Syria”and reported that “the Islamic State is sitting on a mountain of stolen cash and gold that its leaders stashed away to finance terrorist operations.” So, it’s not as if there hadn’t been prior reason to believe that some day some of the gold would be found after America’s defeat in Syria. Maybe they just hadn’t expected this to happen quite so soon. But the regime will find ways to hoodwink its public, in the future, just as it has in the past. Unless the public wises-up (if that’s even possible).
via ZeroHedge News https://ift.tt/2IYOqVH Tyler Durden
Anybody who was following developments in the crypto-universe during the ICO boom of 2017 already knows – or at least suspects – that the cryptocurrency industry is littered with scams and hackers eager to separate uncritical and gullible investors from their hard-earned money. Some of bitcoin’s harshest critics have likened the mother of all cryptocurrency to a pyramid scheme.
But as thousands of marginal buyers have learned, that distinction can be subjective. But when it comes to OneCoin, a cryptocurrency project launched in 2014 that purportedly attracted more than $3.5 billion in investor capital, that label is unquestionably appropriate. To wit, federal prosecutors in Manhattan this week busted what they described as an “old-school” pyramid scheme supercharged by blockchain technology when they arrested one of the founders of OneCoin at LAX.
Ruja Ignatov
The Bulgarian heads of the alleged fraud, Konstantin Ignatov and his sister Ruja, have both been charged with an array of felonies, including wire fraud, securities fraud and money laundering. While Konstantin was taken into custody in the US, Ruja hasn’t been apprehended, according to Bloomberg.
The alleged head of the scheme, Konstantin Ignatov, was arrested Wednesday at Los Angeles International Airport and charged with conspiracy to commit wire fraud, Manhattan U.S. Attorney Geoffrey Berman said in a statement. Ignatov’s sister Ruja, the founder and original leader of OneCoin, was charged with wire fraud, securities fraud and money laundering. She hasn’t been arrested.
So far, prosecutors have located $1.2 billion in investor money, which had reportedly been laundered through 21 countries. OneCoin operated by paying customers commissions if they managed to recruit more members. The company has been accused of lying to customers, telling them that the value of the coins was determined by market forces when it was actually artificially set by the company, which “mined” coins internally on its servers.
According to Reuters, the company’s records show sales of nearly $4 billion and profits of $2.5 billion (though what actually happened with the money, and what distinctions like “profit” and “sales” even mean within the context of this scheme, isn’t really clear).
Prosecutors said OneCoin, which still operates, claimed to have more than 3 million members, who would receive commissions for recruiting new members to buy cryptocurrency packages.
Much of the $1.2 billion of investor money located so far was laundered through at least 21 countries, prosecutors said.
OneCoin records, meanwhile, show profit of 2.23 billion euros (US$2.51 billion) on sales of 3.35 billion euros (US$3.77 billion) in the two years ended Sept. 2016, they added.
Prosecutors accused the founders of building their company on “lies and deceit.”
The defendants “created a multibillion-dollar cryptocurrency company based completely on lies and deceit,” U.S. Attorney Geoffrey Berman in Manhattan said in a statement. “Investors were victimized while the defendants got rich.”
Manhattan District Attorney Cyrus Vance added: “These defendants executed an old-school pyramid scheme on a new-school platform.”
Ruja, who was known online as “cryptoqueen” allegedly created the company, before handing management off to her brother. She hasn’t been heard from since late 2017, when she disappeared. She is believed to still be at large.
Prosecutors also have evidence that the founders knew the company was a scam, and actively tried to deceive their customers.
Ignatova was quoted as telling a co-founder that “I cheat currently on coins,” and that one possible “exit strategy” was to “take the money and run and blame someone else.”
Ignatov, meanwhile, allegedly told a OneCoin member recently in Las Vegas: “If you are here to cash out leave this room now because you don’t understand what this project is about.”
Another defendant, Mark Scott, 50, of Coral Gables, Fla., pleaded guilty in September of helping the company launder some $400 million. Scott is a former partner at law firm Locke Lord.
This is the second major crypto scam to be exposed so far this year, after the “collapse” of QuadrigaCX, the disgraced Canadian crypto exchange that was apparently drained of its customers’ $150 million in deposits last spring, months before the founder mysteriously “died” while traveling in India late last year, leaving his widow and former company to declare bankruptcy.
Whatever happens next, one thing’s for sure: With bitcoin mired in the second year of a bear market, this news certainly doesn’t inspire confidence in the crypto space.
via ZeroHedge News https://ift.tt/2THzaQY Tyler Durden
When comparing cannabis prices across states that have recreationally legalized, it’s easy to assume that the rates at which cannabis is taxed dictate the prices consumers are paying in dispensaries. For example, California has high tax rates for their cannabis, and also have some of the most expensive prices on the legal market.
As an online cannabis price comparison and dispensary locator service, Wikileaf has access to data on weed prices across the country. We ranked the recreationally legal states, first by tax rates, and then by the average cost per eighth. We found that while Washington has the highest tax on cannabis at 47%, they find themselves one of the less expensive state to buy cannabis.
Conversely, Alaska is the most expensive state to purchase cannabis in, while having lower taxes. While taxes certainly do have an effect on the price that consumers pay for cannabis in dispensaries, Wikileaf’s data shows that the rate at which cannabis is taxed is not the only factor that dictates market price.
These are the sales tax rates on cannabis from each recreational state on consumer-facing sales taxes through January 2019:
Washington tops the list, taking up to 37 percent from cannabis purchases, followed by Oregon at 17 percent, California and Colorado at 15 percent, Maine and Nevada at 10 percent and Massachusetts at 6.3 percent. Alaska is the only state on the list so far that doesn’t tax on cannabis purchases.
Sales Tax Isn’t The Only Cost Passed On To Consumers
Somewhere between 37 and 0 percent is a big difference. However, those sales tax rates aren’t the only tax you’re paying. Many states have additional taxes and fees to pair with their tax rates on purchases.
For example, while Alaska doesn’t tax their cannabis purchases, they do charge growers $50 per ounce, and growers in Maine are charged anywhere between $94 and $325 per pound on top of their 10 percent sales tax rate. These are the additional taxes that consumers end up paying per recreational state:
When you add up the taxes on dispensaries, growers, sales, and local government taxes, you get a fuller picture of how taxed the cannabis industry actually is. With all of those costs together, here’s a clearer picture of which states are collecting the most from legal cannabis.
Washington cannabis is taxed at 47.1%, making that state’s marijuana the most taxed in the country. California comes in second, at a tax rate of 40.3%. Yet, according to Wikileaf’s menu data below, the average price of an eighth after all taxes in Washington is the fifth most expensive out of eight states, while California comes in two spots more expensive.
If taxes are the main reason why cannabis prices are high, then it’s tough to explain why, despite Washingtonian cannabis buyers being taxed 7 percent more overall than Californians, their price per eighth is around $8 less. What’s even more surprising is Alaska, only the fifth most taxed state, is actually the most expensive state to purchase weed in. So while there may be a correlation between taxes and prices, our data indicates that there is not a direct causal relationship between the two.
Since each state has its own regulations and framework for recreational cannabis, there isn’t any blanket reason for why prices are the way they are across all states. However, those particular factors that affect the price of cannabis in every single state all seem to affect one thing: supply. Let’s look closer at California as an example.
California: Other Causes of High Prices
California has an extensive application process for obtaining their licenses,one that has been muddled with roadblocks. This makes it both difficult AND expensive to obtain legal licenses, severely choking off the cannabis supply in a state once flush with legal weed. According to Bloomberg, there were a grand total of 1,100 registered cannabis dispensaries in the state prior to legalization. Now, there are only 410 registered dispensaries.
Considering that those 410 dispensaries are competing with a massive Californian black market (which estimates say is much larger than the current legal market in 2018,) the industry in California is worse off than it seems.
According to those estimates, the legal sales in California totaling $2.5 billion in 2018 are more than doubled by the nearly 5.9 billion the black market accounted for in 2017. That’s a massive portion of a very lucrative pie that the legal cannabis industry in California has to contend with.
On top of the red tape and political issues, the supply (volume of growers) and environmental factors need to be considered as well.Droughts and wildfires raging through the state has limited crop yields and driven up the prices, with some producers claiming to have lost as much as an entire year’s crop in the most recent wildfires.
While taxes certainly do affect the price of weed, they don’t tell the whole story. We took data that ranked recreationally legal states in order of highest tax rates and compared it against Wikileaf’s pricing data for the average cost of an eighth in each of these states. If the rates at which each state taxes cannabis determines its market price, then you would expect the rankings from the two data sets to match. However, the fact that they don’t match leads us to two conclusions. The first is that there is a correlative, not causal, relationship between taxes and marijuana prices. The second conclusion is that there are other culprits for both high and low prices of cannabis, such as in the case of California.
via ZeroHedge News https://ift.tt/2HmcqiZ Tyler Durden
China’s social credit system prevented people from buying 17.5 million flights and 5.5 million train tickets in 2018, according to the Associated Press, which obtained a document from the National Public Credit Information Center.
The AP reports that millions were attempting to make travel purchases were blocked because they ended up on the government’s blacklist for social credit offenses. The report didn’t discuss how these people had become “discredited.”
The Communist Party of China (CPC) says the social credit system is an essential component of the Socialist market economic system and the social governance system. Its aim is to encourage trustworthy behavior through a blend of penalties and rewards for citizens to improve a fast-changing society after three decades of economic reform. Offenses can include failure to pay taxes or fines, jaywalking, smoking, shoplifting, or taking drugs. Penalties include restrictions on travel, business, obtaining loans, or access to education. Companies can lose access to low-interest bank loans or be dropped from government contracts.
One government slogan for the scheme says: “Once you lose trust, you will face restrictions everywhere.”
The social control system is part of efforts by President Xi Jinping’s Communist regime to use artificial intelligence and surveillance cameras to control more than a billion people.
CPC launched social credit in 2014 and is currently piloting it in multiple cities around China. The system is expected to roll out nationwide by 2020, giving the government control to almost all people and businesses.
Human rights activists warn that social credit is too hard on citizens and might unfairly label people as untrustworthy without telling them.
U.S. Vice President Mike Pence condemned social credit in October as “an Orwellian system premised on controlling virtually every facet of human life.”
AP said some of the offenses last year penalized people for false advertising or violating drug safety rules.
Since inception, the system has caused 3.5 million people to “voluntarily fulfill their legal obligations,” the report said, which included 37 people who paid a total of 150 million yuan ($22 million) in overdue fines or confiscations.
The report gave limited details on how many citizens live in areas where social credit is operating.
In the West, social credit is very controversial and is often portrayed as a futuristic society controlled by the illusion of a perfect society through artificial intelligence and surveillance cameras.
via ZeroHedge News https://ift.tt/2Uvglhe Tyler Durden
The average square footage in new single-family houses has been declining since 2015. House sizes tend to fall just during recessionary periods. It happened from 2008 to 2009, from 2001 to 2002, and from 1990 to 1991.
But even with strong job growth numbers in recent years, it looks like demand for houses of historically large size may have finally peaked.
According to Census Bureau data, the average size of new houses in 2017 was 2,631 square feet. That’s down from the 2015 peak of 2,687.
2015’s average, by the way, was an all-time high and represented decades of near-relentless growth in house sizes in the United States since the Second World War.
Indeed, in the fifty years from 1967 to 2017, the average size of new houses increased by two-thirds (67 percent) from 1,570 to 2,631 square feet. At the same time, the quality of housing also increased substantially in everything from insulation, to roofing materials, to windows, and to the size and availability of garages.
Source: Department of Labor, Census Bureau, HUD.
Meanwhile, the size of American households during this period decreased 22 percent from 3.28 to 2.54 people. Needless to say, the amount of square footage per person has expanded greatly over the past fifty years. (Square footage in new multifamily construction has also increased.)
And yet, we continue to hear in survey data that Americans are “overworked,” “stressed out,” and pushed to the limit when it comes to paying for living space. If that’s the case, why do so many Americans continue to buy new housing that’s more than 50 percent larger than what their parents grew up in?
Part of it is a matter of demonstrated preference versus what they say in surveys. The demonstrated behavior or many people is simply that they prefer more house to less, even if it means more stress in making that mortgage payment every month. Another factor is the low-low mortgage rates that continue to be available to a great many borrowers. Sure, that extra 500 square feet above and beyond what your dad shared with 3 siblings might be a bit much, but if you can spread the payments out over 30 years, why not just get it?
How Government Policy Led to a Codification of Larger, More Expensive Houses
But there are other factors as well. In recent decades, local governments have continued to ratchet up mandates as to how many units can be built per acre, and what size those new houses can be. As The Washington Post reported last month, various government regulations and fees, such as “impact fees,” which are the same regardless of the size of the unit, “incentivize developers to build big.” The Post continues, “if zoning allows no more than two units per acre, the incentive will be to build the biggest, most expensive units possible.”
Moreover, community groups opposed to anything that sounds like “density” or “upzoning” will use the power of local governments to crush developer attempts to build more affordable housing. However, as The Post notes, at least one developer has found “where his firm has been able to encourage cities to allow smaller buildings the demand has been strong. For those building small, demand doesn’t seem to be an issue.”
Many involved in home sales likely won’t be shocked to hear this. In many markets, it’s the mid-priced homes that sell the fastest. In the Denver metro area, for example, homes priced in the $300,000-400,000 range are quickly snapped up. But luxury homes coming in around $700,000 or a million dollars can languish. Indeed, the Washington Post article features a Denver-area couple who were delighted to buy a new downsized 1,400 square foot house for $257,000.
As much as existing homeowners and city planners would love to see nothing but upper middle-class housing with three-car garages along every street, the fact is that not everyone can afford this sort of housing. But that doesn’t mean people in the middle can only afford a shack in a shanty town either — so long as governments will allow more basic housing to be built.
Local housing has become so inflexible as a combination of a variety of historical trends which later become nearly set in stone thanks to government policy. We have seen this at work as decades of federal housing policy has worked to encourage ever-larger debt loads which in turn leads to larger houses as well. Eventually, this sort of housing — and the sort of people who live in it — reach a critical mass politically. The people who live in the larger houses then want to make sure that the “character of the neighborhood” is preserved — by force of law — which ends up excluding new types of more economical housing. This doesn’t necessarily mean apartment buildings, of course. It can simply mean smaller, more simple single-family housing. But once existing homeowners begin to dominate the local political process, the deck becomes stacked against new homeowners who can only afford basic housing that the old-timers don’t want to see.
The result is an ossified housing policy designed to reinforce existing housing, while denying new types of housing that is perhaps more suitable to smaller households and a more stagnant economic environment.
Eventually, though, something has to give. Either governments persist indefinitely with restrictions on “undesirable” housing — which means housing costs skyrocket — or local governments finally start to allow builders to build housing more appropriate to the needs of the middle class.
For now, the results have been spotty. But where developers are allowed to actually build for a middle-class clientele, it looks like there’s plenty of demand.
Not Really Downsizing
The Post’s article covering this downsizing phenomena is titled “Downsizing the American Dream,” but this represents nothing that might be called a downsizing when compared to the alleged Golden Age of the American Dream in postwar America.
After all, by the standards of the 1950s and 1960s, the new “smaller” houses remain large and luxurious by comparison. According to a 1956 report by the US Department of Labor, “The 2-bedroom, 1-bathroom house, with less than a thousand square feet of floor area … typified new houses in 1950.”
Keep in mind, moreover, that the average household size in 1950 was 3.37 (compared to 2.62 in 2000). Those two bedrooms and that one bathroom in 1950 say a lot more traffic than would typically be the case today.
House-sizes grew considerably into the 1960s, but even those homes — which were often three-bedroom two-bathroom houses for families with children — still came in around 1,500 square feet well into the 1970s.
Today, the average new house has more than 1,000 square feet than a home of the 1960s — often housing no more than a couple and its dog.
But do new home buyers need all that house? It’s hard to know since housing production is caught up in a complex web of government financing, government regulation, and neighborhood NIMBYism.
To know the answer, we’d have to allow developers to build less-expensive housing, but that would require a great simplification of the political and regulatory processes developers must deal with. Expectations for housing have changed so much over the past fifty years, it’s hard to imagine a return to what households of the past would have considered to be normal, middle-class housing.
It would be an interesting experiment, though: would city planners and neighborhood groups welcome a developer who planned to build a neighborhood of 1950s retro housing? That is: new two-bedroom, one-bathroom houses of 1,000 square feet? (They’d have to exclude the asbestos siding typical of the time, and the terrible insulation of the time would need to be replaced with something more modern.)
It would be interesting to see someone try it.
via ZeroHedge News https://ift.tt/2EMHDZM Tyler Durden
Thanks to weekly death threats and bipolar stalkers, Facebook CEO Mark Zuckerberg and his #2, Sheryl Sandberg, are protected by an elaborate security apparatus to monitor, track and intercept threats against the Billionaire and his Chief Operating Officer.
According to an in-depth investigation by Business Insider into Facebook’s security practices, Zuckerberg used to be a security nightmare during his mid-20s; randomly wandering off while his security detail scrambled to keep up.
“He was in his mid-20s,” said one BI source.”He was developing a platform he truly believed was good. At the time he didn’t grasp the concept that there were haters out there.”
In the years since, the 34-year-old billionaire has adopted a far more cautious schedule more closely resembling that of a dignitary than a tech executive.
During company all-hands meetings, members of Zuckerberg’s Praetorian Guard sit at the front of the room and are dotted throughout the crowd, just in case an employee tries to rush him. They wear civilian clothes to blend in with nonsecurity employees. –Business Insider
Panic chute?
Zuckerberg’s fortifications include armed executive protection officers on constant guard in and around his several gated Bay Area homes – at least one of which has a panic room, according to the report. Meanwhile, while Zuckerberg’s desk is in an open workspace instead of a walled-off office, guards are always nearby – while an adjacent conference room near his desk has bulletproof glass and a panic button.
And according to employee rumors, the conference room even has a secret “panic chute” to evacuate Zuckerberg to safety.
The truth of this matter remains murky: One source said they had been briefed about the existence of a secret exit route through the floor of the conference room into the parking garage, but others said they had no knowledge of it. Facebook declined to comment. –Business Insider
“Zuckerberg takes extreme precautions protecting himself. He has armed officers on constant guard outside of his gated Bay Area homes, one of which may also contain a panic room.” But of course he opposes border protection for the rest of us. #BuildTheWallhttps://t.co/R3xLjBaFiX
Facebook employs more than 70 security personnel – lead by former US Secret Service special agent Jill Leavens Jones. The company’s board approved a $10 million annual security allowance for Zuckerberg and his family, “and with good reason,” according to the report.
Both Zuckerberg and Sandberg receive near-constant threats; from stalkers and those who wish to do them harm.
The billionaire chief exec lives an extraordinarily public life, with 118 million followers on Facebook alone (making him both an icon of Facebook’s ideals and, increasingly, a magnet for public ire after his company’s recent scandals), and the threats he faces are severe.
He receives numerous of death threats each week, and the security team monitors social media for mentions of him and Sheryl Sandberg, Facebook’s chief operating officer, to detect them. The pair also have stalkers, who alternately declare their undying love for the execs and harbor worrying vendettas against them. –Business Insider
The Facebook execs are also at risk of being subject to political stunts – such as when Microsoft cofounder Bill Gates was smacked in the face with a pie while touring Brussels in 1998.
Zuckerberg receives unsolicited presents at home – “everything from cookies to a gift from a rabbi after the birth of one of his children. (These get sent to the security team for inspection; Zuckerberg doesn’t open them himself.)”
Things are a bit less extreme inside of the Facebook offices – however the security team is always on high alert, and very menacing.
“If you’ve ever been close to his office, you’ll see there are big burly people sitting there staring at screens. They pretend to be software engineers, but everyone knows that they are security guards,” said one Facebook employee in a Quora post. “Once I was there at 7 a.m., and tried to take a picture of his office (he was not inside) to send to my family, but immediately, 3 of the men came seemingly out of nowhere and asked me to delete the picture.”
via ZeroHedge News https://ift.tt/2VKWJ91 Tyler Durden
Vietnam can’t seem to get a break. The country lies just beneath China, its giant neighbor to the north, and shares many of the same socialist ideals that Beijing promulgates. However, Sino-Vietnamese relations have been a source of tension for years dating back to the colonization of Vietnam by China centuries ago – a historical fact that the average Vietnamese citizen has never forgotten. Even after the protracted and costly war between North Vietnam and the U.S.-backed South Vietnamese government, that ended more than 40 years ago, China (which had proven a valuable ally for Hanoi during the war) turned on its smaller communist ally and invaded the country in 1979. It was a brief but bloody border war which showed Beijing that Vietnam could still hold its own.
Fast forward several decades and Hanoi is still trying to placate Beijing while at the same time rapidly improving relations with one-time adversary Washington. In fact, U.S.- Vietnamese relations, both trade and bilateral, have improved so much recently that the two sides could now arguably be called allies in the Asia-Pacific region. Of course, much of that alliance, similar in some respects to the decades-old U.S. alliance with Saudi Arabia, is born of necessity. The U.S.-Saudi alliance was berthed in the aftermath of World War 2, held together amid shared concerns during the cold war, and remains amid worries over Iranian hegemony ambitions in the Middle East. The U.S.-Vietnamese alliance is largely held together over the mutual aim of both Washington and Hanoi to keep China’s economic and military ambitions in check in the Asia-Pacific region, particularly in the volatile South China Sea, where Beijing claims as much as 90 percent of the troubled body of water.
Vietnam’s energy quandary
However, Hanoi’s angst with Beijing isn’t just political, it also related to Vietnam’s energy sector.
China’s increased muscle-flexing in the region has negatively impacted Vietnam’s ability to develop its own offshore natural gas resources.
Last March, according to a BBC report at the time, state-owned Petro Vietnam ordered Spanish energy firm Repsol to suspend an oil and gas project, which was in its final stages, off the country’s southeast coast within Vietnam’s, own 200-nautical mile exclusive economic zone (EEZ). The pull-out cost Repsol some $200mn in lost investment, an amount that the company has to date been unsuccessful at recouping. It was the second time in less than a year that Hanoi had bowed to Chinese pressure in its own waters. In July 2017, Hanoi also ordered Repsol to stop oil drilling operations at an adjacent location, Block 136/3, in response to what media at the time called “threats from China.” The geopolitical squabble in 2017 came just days after Repsol reportedly made a major gas discovery in the area.
Consequently, to offset both its blockage of developing its own gas resources and to help Vietnam meet its growing energy demand amid stellar economic growth, the country needs to turn to renewables. However, it’s still in the early stages of developing renewable energy sources and needs to introduce more incentive policies to attract more investment, media in the country reported last week, citing both domestic and international experts.
Hoang Quoc Vuong, Vietnam’s deputy minister of industry and trade, said that the rapid increase in energy demand and consumption of around 10 percent per year is having negative impacts on the environment, exhausting natural resources and also impacting the country’s energy security. Nonetheless, he reasoned, Vietnam’s clean energy development still has limitations, including unstable supply, difficulty in energy transmission and high costs. He added that the ministry was studying solutions to efficiently develop renewable energy towards a low-carbon economy.
For more than a decade, Vietnam’s economic growth has been second only to China as the country continues to develop and modernize. According to a report by the country’s Central Economic Commission, Vietnam’s economic growth stood at 7.08 percent last year. Vietnam ranks second among Southeast Asian countries with a total power system capacity of nearly 50,000 MW and is ranked 23rd on a global scale.
However, Vuong added that it’s necessary for Vietnam to develop a structure of energy supply sources, including hydroelectric, thermoelectric and renewables. Promoting an energy transition towards a low-carbon economy was critical, he said. By the end of last year, total hydropower capacity in the country of more than 90 million reached 22,000 MW, while solar capacity and wind power capacity is estimated to reach 1,000 MW and 1,500 MW, respectively. Vuong added that the ministry was also receiving a number of proposals to develop wind and solar power projects in the country.
However, hurdles remain to achieve those goals. The International Energy Agency (IEA) recently said that Vietnam in the early stages of developing renewable energy, thus the government needed to develop appropriate mechanisms to reduce risks for investors in renewable energy development. Pham Huong Giang, deputy head of the Renewable Energy Department under the Ministry of Industry and Trade, said the ministry was studying mechanisms to promote investment in developing renewable energy.
via ZeroHedge News https://ift.tt/2H5suq0 Tyler Durden
President Trump has ordered his administration to draw up formal demands for Germany, Japan and all other countries hosting American troops to pay the full price of US soldiers deployed on their soil, along with a 50% premium for the privilege of hosting them, reports Bloomberg, citing a dozen administration officials and people briefed on the matter.
President Donald Trump speaks to troops at Ramstein Air Base, Germany, Thursday, Dec. 27, 2018. (Photo by Brian Ferguson via Stars and Stripes)
In some cases, nations hosting American forces could be asked to pay five to six times as much as they do now under the “Cost Plus 50” formula. –Bloomberg
Trump has long-complained that countries hosting US troops aren’t paying enough, to the point where he nearly derailed recent talks with South Korea over how much they’re paying for the 28,000 US troops on their soil – overruling his negotiators and telling National Security Advisor John Bolton “We want cost plus 50.”
The president’s team sees the move as one way to prod NATO partners into accelerating increases in defense spending — an issue Trump has hammered allies about since taking office. While Trump claims his pressure has led to billions of dollars more in allied defense spending, he’s chafed at what he sees as the slow pace of increases. –Bloomberg
“Wealthy, wealthy countries that we’re protecting are all under notice,” said Trump during a January 17 speech at the Pentagon. “We cannot be the fools for others.“
Jens Stoltenberg, NATO Secretary General, just stated that because of me NATO has been able to raise far more money than ever before from its members after many years of decline. It’s called burden sharing. Also, more united. Dems & Fake News like to portray the opposite!
Bloomberg‘s sources caution that the idea is “one of many under consideration,” in order to try and convince US allies to pay more, and the plan may be toned down. That said, “it has sent shock waves through the departments of Defense and State, where officials fear it will be an especially large affront to stalwart US allies in Asia and Europe.”
Other current and former administration officials “describe it as far more advanced than is publicly known,” reports Bloomberg. In addition to seeking more money from allies hosting US troops, the Trump administration wants to use the new policy as means of leverage over countries to do what the US demands overseas.
As evidence, they say officials at the Pentagon have been asked to calculate two formulas: One would determine how much money countries such as Germany ought to be asked to pay. The second would determine the discount those countries would get if their policies align closely with the U.S. –Bloomberg
The warning to South Korea was a deliberate move, says Victor Cha, a senior adviser at the Center for Strategic and International Studies in Washington. By demanding “Cost Plus 50” from Seoul, Trump is signaling a paradigm shift.
“We have a more integrated military with South Korea than with any other ally,” said Cha. “To send this message to a front-line Cold War ally is trying to say very clearly that they want a paradigm shift with the way they do host-nation support.”
Others think that the “Cost Plus 50” plan will spark debates within allied governments over whether they even want US troops on their soil. Both Germany and Japan, two of the three defeated WWII Axis powers, have long-resisted the presence of American troops on their soil. Other countries such as Poland, on the other hand, welcome US troops.
Germany currently pays around 28% of the costs of US forces on German soil – or around $1 billion per year. Under the “Cost Plus 50” plan, their payment would skyrocket – along with payments from Japan and South Korea.
“You start tipping over rocks and see what crawls out and you’ve got to be ready for it,” said American Enterprise Institute defense policy expert MacKenzie Eaglen. “You’re going to see domestic political debates wrapped around these military bases once you reopen the discussion.”
Trump has been musing about the idea that countries should pay the full cost, plus a premium, since taking office. His ambassador to the European Union, Gordon Sondland, said it’s all about making sure other countries have “skin in the game.”
“If you have countries which clearly can afford to do it and are not doing it because they think we’ll just step in and do it for them, the president has a problem with that,” he said in an interview.
Sondland declined to say which countries would be targeted and wouldn’t elaborate when asked specifically about the “Cost Plus 50” approach. –Bloomberg
The “Cost Plus 50” plan reportedly originated at the National Security Council – however officials have declined to confirm or deny the proposal.
“Getting allies to increase their investment in our collective defense and ensure fairer burden-sharing has been a long-standing U.S. goal,” said NSC spokesman Garrett Marquis. “Getting allies to increase their investment in our collective defense and ensure fairer burden-sharing has been a long-standing U.S. goal.”
Critics of the plan say it ignores the benefits the US enjoys from having US troops stationed abroad.
“Getting allies to increase their investment in our collective defense and ensure fairer burden-sharing has been a long-standing U.S. goal,” said former US Ambassador to NATO, Douglas Lute. “The truth is they’re there and we maintain them because they’re in our interest.”
In Germany, for instance, the U.S. relies on several crucial installations: the Landstuhl Regional Medical Center and the Ramstein Air Base. Landstuhl is a world-class medical facility that has provided emergency care to U.S. soldiers wounded in Iraq and other trouble spots.
Germany is also home to the headquarters of the U.S. Africa Command. Estimating how much Germany ought to pay for those bases, which serve so many other interests, would be complicated. –Bloomberg
“There are a lot of countries that would say you’ve got it absolutely wrong — you think we’re going to pay for this?” said former deputy assistant secretary of defense, Jim Townsend, who added: “I hope cooler heads prevail.”
via ZeroHedge News https://ift.tt/2NUVWzS Tyler Durden
