Six weeks after we noted that Australian housing regulators were warned to prepare “contingency plans for a severe collapse in the housing market” that could lead to a “crisis situation,” CoreLogic reports that Melbourne housing prices have fallen at their fastest quarterly pace on record, according to Australia’s News.com.au.
CoreLogic figures released on Friday show national dwelling values declined another 1 per cent in January, bringing the cumulative decline to 6.1 per cent since the overall market peaked in October 2017. –News.com.au
Prices in Sydney and Melbourne fell 1.3% and 1.6% respectively in January, “bringing their rolling quarterly falls to 4.5 per cent and 4 per cent,” according to the report.
From their respective peaks in July and November 2017, Sydney housing prices are down 12.3% , while Melbourne has seen a drop of 8.7% – as values drop to levels last seen between late 2016 and early 2017.
“If you had asked me in September last year I probably would have been surprised to see Sydney and Melbourne values down more than 4 per cent over the rolling quarter,” said Tim Lawless, head of research at CoreLogic.
“We have seen the downturn accelerate over the last three months. At 4 per cent down in Melbourne that’s the fastest rate of decline we’ve ever seen of any rolling three-month period, and Sydney is virtually (the fastest outside) a really brief period in the ‘80s.”
The decline in Sydney is now the worst since CoreLogic began collecting records in 1980 – surpassing the previous record of 9.6 perdcent seen between 1989 and 1991. Melbourne experienced a drop of 10% over the same period.
“Sydney clearly is in new territory,” said Lawless. “I think we can firmly point towards tighter credit and lending conditions throwing a dampener over the market.”
That said, given the relatively robust economic conditions, Lawless considers the drop to in Sydney and Melbourne be a “consolidation,” while also forecasting total declines in the two cities of 18% – 20% (after prices rose nearly 80% and 60% respectively).
Unlike previous downturns, which typically coincide with a sharp rise in mortgage rates, this downturn is occurring against a backdrop of reasonably robust economic conditions, decent jobs growth and low rates.
“If anything it’s a consolation,” Mr Lawless said. “The RBA can bring rates down, there’s a potential that might happen, people have jobs and are able to pay down their mortgages. In that sense the downturn is manageable.”
He conceded that “we are seeing some wealth destruction”. CoreLogic now forecasts total declines in Sydney and Melbourne of 18-20 per cent, but notes that comes after prices rose nearly 80 per cent and 60 per cent respectively. –News.com.au
“Most homeowners would still have a great deal of equity in their properties,” said Lawless. “It’s really just those owners that have bought in the last couple of years that are facing the prospect of negative equity.”
More pain in the cards
While Lawless has characterized the drop as a consolidation, others foresee continued difficulty in the Australian housing market.
AMP Capital chief economist Dr. Shane Oliver predicted an average peak-to-trough price drop of 10-15%, while revising his forecast for Sydney and Melbourne down from a drop of 20% to 25%.
“A crash landing — say a national average price fall in excess of 20 per cent — remains unlikely in the absence of much higher interest rates or unemployment, but it’s a significant risk given the difficulty in gauging how severe the tightening in bank lending standards in the face of the royal commission will get and how investors will respond as their capital growth expectations collapse at a time when net rental yields are around 1-2 per cent.”
One analyst has even tipped falls of up to 30 per cent, based on the revelation from the banking royal commission that almost all mortgages written between 2012 and 2016 had used the controversial HEM benchmark to over-assess borrowing capacity.
Douglas Orr from Endeavour Equity Strategy said his scenario, in which the focus on responsible lending in the wake of the royal commission’s final report leads to billions of dollars in unaffordable loans gradually cycling out of the system, would make it the worst downturn since 1890. –News.com.au
At the end of January, the median home value in Sydney was $795,509, and $636,048 in Melbourne. Every capital city experienced declines aside from Canberra, which saw values gain 0.2%.
Leading the declines were the most expensive end of the market.
Meanwhile, Australia’s debt-to-income ratio has ballooned to shocking levels over the past three decades as Sydney is ranked as one of the most overvalued cities in the world.
According to the Daily Mail Australia last August, credit card bills, home mortgages, and personal loans now account for 189 percent of an average Australian household income, compared with just 60 percent in 1988, as Callus Thomas, Head of Research of Topdown Charts, demonstrates that record high household debt is a ticking time bomb.
For more on Australian debt dynamics, watch the video below from economists John Adams and Martin North:
via ZeroHedge News http://bit.ly/2D1j62l Tyler Durden
Over the past 73 years, devoid of any meaningful national misfortune, the American social order has undergone a major transformation. Historically, societies tend to stratify themselves along economic or pre-ordained class lines. The United States has long prided itself on the belief that class distinctions were no longer a part of a unique American culture. However, the current social structure has evolved into a near impregnable three-tier categorization in which the ruling class, that sits astride the social order, has revealed, thanks to the election of Donald Trump, open and unabashed disdain for the two lower classes and the unleashing of a radicalized army of malcontents.
The citizens who provide the primary labor and resources for the economic engine of the country constitute the second tier.
The third is comprised of those who have been betrayed by a self-serving education system and are conditioned to be totally dependent upon a government dominated by the ruling class.
Class conflict just ain’t what it used to be. (“Contracturalisation” by Kandukuru Nagarjun)
Unlike any other period in the nation’s history, one stratum of society, the American elites of the past half-century, by their control of education, entertainment, the media and politics, have totally dominated and overwhelmingly and negatively influenced the culture and national character.
They are chiefly responsible for what it is today.
This American aristocracy is now entirely made up of those who have no recall or firsthand experience of the years of adversity prior to 1940. Their entire point of reference is never-ending affluence and the pursuit of pleasure within an overall framework of world peace. Yet this assemblage is dominated by a comparatively few committed ideologues and so-called intellectuals who are dedicated to permanently altering the economy and American culture. Nonetheless, they have been very successful in attracting many others by appealing to their vanity and avarice.
Thus entrance into this class is not entirely a factor of birth or wealth but rather that of developing a mindset of superiority similar to the evolution of cliques within a high school setting. This attitude is further reinforced and promoted in the incubator that is the college campus, wherein this mindset is further enhanced by the academic elites waxing eloquent about the failings of the United States and the ideal of a classless society — led, of course, by the pre-eminent class…themselves and their their naïve recruits.
Once having left the bubble that is the university environment, the majority of these same recruits, still influenced by their university experience and desirous of maintaining a standing within the circle, look to the anointed leaders in the mainstream media, the entertainment industry and politics to set the agenda and dialog. Further, by being an accepted member of this class it is far easier to be ushered by the gate-keepers onto the path of making a substantial living be it in government, academia, Wall Street, the media or a myriad of non-profit advocacy groups.
To achieve and retain these benefits, it becomes paramount to retain membership within the congregation and do their bidding rather than question what the pronouncements and policies of their titular leaders would do to the culture and well-being of the country at large. Thus, while proclaiming to be independent thinkers, no faction in American society is more acquiescent to groupthink and conformity.
The reality is that the majority of those in the ruling class are mind-numbed eternal adolescents hell-bent on pushing the boundaries of ethical and moral behavior and viewing all political and policy issues as a war between their side and their mortal enemies (those who oppose the transformation of the nation into a socialist oligarchy, the concomitant erosion of liberty as well as unrestrained personal behavior). While there are a few comparatively independent thinkers within the group that do question the over-reaching of a powerful central government, their opposition is muted and limited to a more gradualist approach as their concession to remain within the fold.
An all-powerful central government is vital to maintaining the elite’s power, income base and pre-eminent class status and must be protected at all cost. In order to retain their supremacy, the tactics of outright lies, innuendos, and character assassinations, as well as exploitation of national tragedies to impugn their adversaries, have been utilized by the foot soldiers in the mainstream media, the political establishment and the entertainment industry.
The eight years of the Obama administration rudely awakened a sleeping populace. Many of whom, also benefiting from the overwhelming economic growth and absence of national adversity over the past half-century, had consciously chosen to ignore what was happening to the culture and future well-being of the country. Thus, the election of Donald Trump was in essence the revenge of the lower classes for not only the overbearing and condescending attitude of the elites but their ongoing success in transforming American society and culture.
Faced with the exposure of their agenda and the real prospect of losing their status and influence, the disdain toward the lower classes, which had always bubbled beneath the surface, burst forth in a volcanic eruption of uncontrolled vitriol, anger and absurdity.
The denizens of the ruling class unleashed their out of control foot soldiers on the citizenry, employing the tactics and weapons previously aimed at their political enemies. Today vast swaths of the American populace, whether they voted for Trump or not, are indiscriminately accused of being racists, misogynists, white supremacists, ignoramuses, religious zealots, xenophobes and malcontents.
Intimidation and threats of violence are no longer condemned so long as it is directed at those identified as a threat to the hegemony of the elites. Various social media platforms are being hijacked and weaponized by the mindless and radicalized brain-dead army of elite wannabes, the ruling class chooses not to restrain, in order to terrorize and permanently cower those in the second tier of society — the citizens who provide the primary labor and resources for the economic engine of the country.
There is at present an undeclared and non-violent civil war being waged in this country. The underlying factor of any civil war is an elite ruling class desperate to maintain power at odds with a majority of a population seeking change. Also prevalent in most civil upheavals is the unleashing, by those determined to retain power, of the radicalized and ultimately uncontrollable dogs of war who more often than not devour their sponsors. Both elements are currently in play.
While the ruling class publicly obsesses over Donald Trump and denigrates the vast majority of the population, they have planted the seeds, by their actions, for a takeover of the country by a radical element that will turn on them as they are presently doing within the Democratic Party.
The American people must understand that the current ruling class will not willingly exit the stage or take on their mercenary army. Donald Trump, while perhaps accomplishing a significant degree of change, cannot induce their demise. This threat can only be marginalized through the determined utilization of political process which will encompass a number of political cycles and the long-term willingness to not be intimidated or cowed into submission. The future of the nation as founded is at stake.
via ZeroHedge News http://bit.ly/2WCVtG7 Tyler Durden
A Hong Kong-Based training company launched by Blackwater founder Erik Prince is reportedly building a training center in the controversial Western Chinese region of Xinjiang according to Reuters, citing a company statement from Prince’s Frontier Services Group (FSG).
While the exact details of the $600,000 (4 million yuan) project weren’t disclosed, a state media report said that the facility will be able to train 8,000 people a year.
Despite being the founder, Executive Director and Deputy Chairman of FSG, Prince says he had “no knowledge or involvement” in the preliminary memorandum for the base, according to Reuters.
A Hong Kong-based spokesman for FSG told Reuters on Friday that the statement was “published in error by a staff member in Beijing” and had been taken off FSG’s website.
The removed statement had said that FSG signed a deal with the Kashgar Caohu industrial park in Tumxuk city in southern Xinjiang to build a training center.
…
“Any potential investment of this nature would require the knowledge and input of each FSG Board member and a formal Board resolution,” the spokesman said in an email. –Reuters
Xinjiang is a strategically important component of China’s sprawling Belt and Road trade infrastructure. It has also drawn sharp criticism for China’s mass incarceration of up to one million dissidents, mostly of the Muslim ethnic Uighur minority. Beijing has insisted that these “re-education camps” are peaceful, and instill compliance and Chinese values. Ex-detainees say the facilities are little more than prisons.
Uighur Muslims in China have experienced a huge security crackdown (AFP Photo/Greg Baker)
In October, AFP reported how one local government prefecture’s purchases had little to do with education and included 2,768 police batons, 550 electric cattle prods, 1,367 pairs of handcuffs, and 2,792 cans of pepper spray. –AFP via Yahoo!
Prince, a former Navy SEAL and brother of US Education Secretary Betsy DeVos, has come under fire for FSG’s contracts in the Xinjiang region due to the severe security crackdowns and mass incarcerations by Chinese authorities. FSG manages “the largest private security training school in China” for Beijing’s International Security Defense College, which trains police and military experience on handling detainees, hostage situations and terrorist attacks.
As of May, 2018 FSG had trained over 5,000 Chinese military personnel, 500 SWAT specialists, 200 plainclothes police officers, 200 railway police officers, and 300 overseas military police officers according to the Washington Post, citing school’s promotional material.
“He cloaks himself in the American flag when he’s seeking a U.S. contract, but he is the hood ornament of the new era of the military industrial complex and a set of mercenaries who work for countries, oligarchs and random billionaires,” said former military contractor Sean McFate, who wrote a book about private armies, “The Modern Mercenary.”
“The Pentagon and national security establishment view Erik as a pariah,” he added.
Only weeks ago Prince told Fox Business that private military contractors could replace the U.S. troops that are currently withdrawing from Syria. This followed a similar proposal Prince reportedly made through White House channels in 2017 to privatize the fight against the Taliban in Afghanistan — which some contractor industry analysts have suggested Trump was “sympathetic”. Prince has touted the plan as fixing failed US policy in the Middle East: “The United States doesn’t have a long-term strategic obligation to stay in Syria. But, I also think it’s not a good idea to abandon our allies,” he told Fox at the time.
Thus while Prince is now essentially operating under the approval and authority of Beijing, he’s floating the idea that his own mercenaries could replace US troops abroad. This also as China plans its own launch of a Blackwater-style agency for offshore security — something which no doubt Price is being consulted on.
In a statement last year to the Post, FSG wrote: “Erik Prince is a proud American who would never seek to undermine the national interest. FSG is an international company with operations in China and is listed in Hong Kong. It aims to support infrastructure projects internationally to serve its clients’ needs in the interest of shareholders and does not support a political agenda.”
Prince defended himself last year, noting that FSG was focusing on protecting Chinese enterprises in Africa and Asia, not Beijing’s diplomatic policies. However, he has said that his business in China “is not a patriotic endeavor.” Instead, Prince seeks “to build a great business and make some money doing it.“
via ZeroHedge News http://bit.ly/2G6kxAB Tyler Durden
It is difficult for me to write this article, and I will warn you in advance that some of the things in this piece are going to make you cringe. Today, there are an increasing number of signs that the very fabric of our society is rotting away all around us. We witnessed a very clear example of this last week when Kyrsten Sinema paraded around on the floor of the U.S. Senate looking like a hooker, but far more telling is what is going on behind closed doors all across America. The stories that I am about to share with you barely made a blip on the news, but they should have, because they are all indications of how far our nation has fallen.
Let’s start in Colorado. A 27-year-old man named Christopher Wayne Cleary was just arrested on terrorism charges after he threatened to shoot “as many girls as I see”…
Authorities said Christopher Wayne Cleary, of Denver, posted on his Facebook page that “Theres nothing more dangerous than man ready to die.”
“All I wanted was a girlfriend, not 1000 not a bunch of hoes not money none of that,” he wrote, according to a probable-cause statement cited by authorities. “All I wanted was to be loved, yet no one cares about me I’m 27 years old and I’ve never had a girlfriend before and I’m still a virgin, this is why I’m planning on shooting up a public place soon and being the next mass shooter cause I’m ready to die and all the girls the turned me down is going to make it right by killing as many girls as I see.”
Thankfully authorities were able to arrest him before he was able to carry out his threats, but the sad truth is that there are thousands upon thousands more young men out there just like him.
These young men feel like failures if they can’t get young women to sleep with them, and this message is reinforced by popular culture over and over again.
But that isn’t what “being a man” is all about.
Unfortunately, the only values that many of our young men have are the values that they have been fed by Hollywood, and Christopher Wayne Cleary was so frustrated with his inability to live up to the Hollywood ideal that he was ready to go on a mass shooting spree.
Next, let me share a story with you about a young mother in Florida. When police recently arrived at the home of Angelica Crites, she didn’t respond. So they entered the home and when she still didn’t respond they had to pry her bedroom door open.
But she still didn’t wake up when they did that. In fact, it took authorities several minutes to finally wake her up.
There was an “overwhelming odor of ammonia and feces,” and large spider webs were along the ceilings and door frames. Food and dirt was all over the floor in the living room and dining room. A mop bucket filled with dirty water and food pieces was in the dining room, the report said.
The dining room had a large amount of trash in the corner and underneath a table to make food. The refrigerator was unsanitary with food, dirt and stains all over the inside and outside. Numerous insects were flying around the house.
The condition of her children was even worse. They were filthy dirty and their teeth “were black and gray” from a lack of care.
On top of everything else, animal feces had literally been smeared throughout the house…
The floor leading to the bathroom had animal feces smeared on it. Mold and animal feces was in the corner of the hall by the bathroom door.
Crites and her children shared a bedroom, where there was a large pile of clothes in the corner, dirt on the floor and several red cups on a shelf containing an unknown black liquid and cigarette butts, the report said.
In her bathroom, there were several piles of animal feces on the floor and in the bathtub, and some smeared on the floor, the report said.
It is easy to criticize anyone that lives like that, but the truth is that what we are doing to ourselves as a nation is even worse.
We need to be praying for children all across America, because so many of them are living in absolutely horrific situations and they have no way to escape.
For example, consider what recently happened to one precious child in Indiana…
Back on January 14th, a young child was taken to Union Hospital.
That’s according to court documents.
Police, DCS, and emergency room staff say the child had a split tongue, several bruises, and other injuries.
That child was later transported to Riley Hospital in Indianapolis.
While there, hospital staff determined an object, most likely scissors, were used to split the child’s tongue.
How evil do you have to be to do something like that?
But this is who we have become as a nation. And things like this happen so frequently that this story barely made a blip on the national news.
And that is just the people that have been caught. Imagine how many more there are that have not been caught.
So no, this is not just “an isolated incident”. We are a nation that is literally teeming with sexual predators.
Lastly, I want to share with you the story of Logan and Daley South. They both wear fangs and they both drink blood, and they opened up about their relationship with their “girlfriend” Ilona on a recent episode of Extreme Love…
‘I don’t like the way blood tastes. I find it inconvenient to have to do regularly,’ Daley admits. ‘I’m someone that needs it, but I’m not a big fan of it. For Logan, it can be very sexual for him.’
Although Logan and Daley both wear fangs, they don’t need to bite into Ilona’s neck and gorge on her blood like a scene in a horror movie to feel satisfied.
In the clip, Daley uses the same tool that diabetics use to prick their fingers to draw Ilona’s blood before she and Logan begin hungrily sucking on her fingers.
If you took Americans from 200 years ago and showed them this, how do you think that they would react?
Needless to say, they would think that we have completely lost our minds.
And the sad truth is that we have definitely lost our way as a nation. Our lack of values is producing absolutely horrific results, and it is getting worse with each passing day.
via ZeroHedge News http://bit.ly/2SlhSZo Tyler Durden
To divert attention from the action behind the scenes
Like a game of chess when the house is a mess
Or a petty money squabble when your marriage is in trouble
Or a football game when there’s rioting in the streets
It’s just another movie, another song and dance
Another poor sucker who never had a chance”
– Timbuk3. “Just Another Movie”, Greetings From Timbuk3 (1986), Mamdadaddi Music/I.R.S. Music, Inc. admin. by Atlantic Music
Before the big game there’s a coin toss and by the luck of the draw, decisions are made even before the teams take the field. It is the same for politics with, perhaps, the exception of luck having anything to do with the outcomes. Regardless, the games play on our screens and we passively watch; anxiously waiting to see what happens.
It’s an all-or-nothing blitz to score big and winners take all. In the interim, there are the commercial breaks revealing ads refined by the fires of focus groups and in boardrooms.
Edward Bernays, the influential pioneer of public relations and the nephew of iconic psychologist Sigmund Freud, wrote in his 1928 book “Propaganda” (page 37) regarding an “unseen mechanism of society” that constituted “an invisible government” that was, assuredly, “the true ruling power of our country”. Bernays added: “We are governed, our minds are molded, our tastes formed, our ideas suggested, largely by men we have never heard of.”
Bernays was quite proud of his uncle’s work and he accepted Freud’s foundational premises towards the use of emotional manipulation of the masses through advertising. It was Bernays, in fact, who changed the term “propaganda” to “public relations”.
…the form of a medium embeds itself in any message it would transmit or convey, creating a symbiotic relationship by which the medium influences how the message is perceived.
Marshall McLuhan was a fascinating person. In addition to identifying media massaging, he also coined the term “global village” in his 1961 book “The Gutenberg Galaxy: The Making of Typographic Man”. Therein, he described four epochs of history: Oral tribe culture, manuscript culture, Gutenberg galaxy and the electronic age. Furthermore, in that book, McLuhan is said to have predicted the World Wide Web decades before it came into being as we understand it today. In 1962, he even coined the term “surfing” as referring to “rapid, irregular and multidirectional movement through a heterogeneous body of documents or knowledge” using computers. He said:
The next medium, whatever it is — it may be the extension of consciousness — will include television as its content, not as its environment, and will transform television into an art form.
– Marshall McLuhan, ‘The Invisible Environment: The Future of an Erosion.’ Perspecta, Vol. 11 (1967) pp. 162–167. Published by the MIT Press.
A computer as a research and communication instrument could enhance retrieval, obsolesce mass library organization, retrieve the individual’s encyclopedic function and flip into a private line to speedily tailored data of a saleable kind.
-A dialogue between Marshall McLuhan and Bruce Powers called “Angels to Robots: From Euclidean Space to Einsteinian Space,” in ‘The Global Village’ by Marshall McLuhan and Bruce Powers, 1989.
In his bestselling 1967 book, “The Medium Is the Massage”, McLuhan utilized the term “massage” to: “denote the effect each medium has on the human sensorium” and therein he reinforced his earlier claims of media as “extensions of our human senses, bodies and minds.”
Disturbingly, McLuhan believed modern electronic media would wipe away society’s “traditional values, attitudes and institutions” and said twenty-three years ago in an interview with Wired magazine, the following:
Postindustrial man has a network identity, or a net-ID. The role is now a temporary shift of state produced by a combination of environmental factors, like in a neural network. This possibility has always been latent in the concept of role, but in the machine age this was perceived as a danger, while today it is simply a game – we no longer see shifting roles as dangerous and taboo and therefore theatrically compelling. Rather, we follow these shifts as if we were doing a puzzle or kibitzing a chess game. Yes, the medium is the message, but this does not mean and never meant that the content of the medium is a conscious reflection on itself. The medium is the message because it creates the audience most suited to it. Electronic media create an audience whose shifting moods are as impersonal as the weather.
By means of our devices we are plugged into a grand neural grid defined by what we think we see. As revealed by Bernays and acknowledged by McLuhan: The Messengers utilize interactive media platforms like hypnotists very subtly conveying their commands and suggestions to an oblivious public. The spin masters massage their messages like opiates onto the hive mind. The importations are delivered as propaganda not to inform the public per se, but rather to suggest that which is meant to be reinforced or believed; even unto the bifurcation of a single narrative; like two teams playing one football game; or the two-sided spinning blur of the same coin.
Advertising radiates throughout the entire Matrix, as the contagious hum of a jingle, from one mind to the next. Media, in all of its various forms, provides the context that coheres realism to dreams. It is how virtual became the New Reality.
The messaging wars were not meant to be won. They were meant to be continuous.
One wonders if National Security Agency (NSA) whistleblower, Edward Snowden, was indeed part of the Matrix given his visibility on the grid. Perhaps he was meant to reveal the surveillance state and without him, there would have been no interactive consent.
To the sounds of mouse-clicks, once free people have “accepted” the “terms” of their surrender and have forfeited their liberty in the name of convenience. Like buzzing insects, the citizens of modern societies are caught in silicon honey traps mortgaged with plastic and electronically powered via USB cable nooses wrapped tightly around their collective throats.
The Technocratic Powers That Be wield weapons far more powerful than any time prior in history and soon, people will wake up to realize the electronic buzzing sound ringing in their ears was not emanating from their own wings, but rather, it was merely the sound of drones over their heads.
Additionally, what if the polemics of Trump versus Hillary, the #MeToo movement’s men against women, Intersectionality and White Privilege, Trump against Mueller, Trump versus Pelosi and Schumer, Kavanaugh against the mob, guns against children, Russia against free elections, Deplorables versus the Deep State, globalism versus nationalism –all of these – every last conflict – were all subplots of one extended reality TV show? Like watching a football game when the roof is on fire. Or a soap opera at the end of things, entitled “As the World Burns”; and prior to next week’s introduction of a New Phoenix soon to rise from the ashes.
In so many ways, Trump is the perfect foil to usher in a new epoch; as the perceived darkness before the age of rainbows and unicorns. Or, at least a forerunner of sorts before another ringleader takes center stage.
To be sure, President Trump is like a flip-sided Obama the way he’s branded upon America’s psyche. And, like Obama, he’s a walking, talking, Rorschach test.
For good? Or bad?
Either way: We all have our suspicions and are becoming more certain with each passing day.
In the below video clip from the 1999 film “The Matrix”, the story’s protagonist, Neo, played by Keanu Reeves, is distracted by a computer simulation of a woman in a red dress as these words are spoken by Laurence Fishburne’s character, Morpheus:
The Matrix is a system, Neo. That system is our enemy. But when you’re inside, you look around, what do you see? Businessmen, teachers, lawyers, carpenters. The very minds of the people we are trying to save. But until we do, these people are still a part of that system and that makes them our enemy. You have to understand, most of these people are not ready to be unplugged. And many of them are so inured, so hopelessly dependent on the system, that they will fight to protect it.
Are you listening to me, Neo? Or were you looking at the woman in the red dress?
In our version of the Matrix, however, what if the diversion was the man with orange hair?
Certainly, United States President, Donald J. Trump, is either:
Real
Real clueless
Or the Matrix’s woman in the red dress
In point of fact, if anyone were 100% honest, they would admit they couldn’t realize any of those options with 100% certainty at this time. Because it’s difficult to see the Matrix when you’re in the Matrix. Yet, like Neo in the movie, and as stated heretofore: We all have our suspicions and are becoming more certain with each passing day.
It is very likely, notwithstanding the uncertainty, odds-makers would lower their percentages on the second option. After all, the famous underworld attorney, Roy Cohn, in a 1984 interview declared Trump to be the closest thing to a genius he had ever met in his life. And, thirty-two years after that statement by Cohn, Trump became President of the United States while being outspent two to one, against a rabidly hostile media, in opposition to colluding officials in the United States’ FBI, DoJ, and State Department; plus, with zero support from all Democrats and a significant percentage of Republicans.
Even so, it was a close election determined by a few thousand votes in key states which resulted in an Electoral College victory against one of the most corrupt, despicable, and unlikable candidates in U.S. history. It almost seemed as if Hillary was meant to be Trump’s foil in the same way McCain and Romney were Obama’s. So close. Or, rather, the margins consistently appeared close enough for purposes of credibility.
In retrospect, it all does have a reality TV feel, does it not?
The games play out on our screens: the drama, offense, defense, and play by plays interpreted and relayed by various announcers on disparate channels; and, as asserted by the previously mentioned Marshall McLuhan: Electronic media creating an audience whose shifting moods are as impersonal as the weather.
Of course many reading this, if not a majority, will NOT appreciate President Trump’s motives being questioned in the least; and perhaps they are right to still trust the man. Nevertheless, there does remain the possibility the reach and power of the Matrix has been vastly underestimated.
Or, it could be the obtuseness of the American Body Politic is what’s been greatly underrated and Trump is heroically fighting his best against great odds.
SIDE ONE: Trump the Embattled Warrior: Art of the Deal and 4-D Chess
Those sympathetic to Trump, see a hero saving the nation, if not the world, one tweet at a time. He says exactly what so many of his supporters are thinking and the apoplectic convulsions of his political opponents are fun to watch. In fact, Trump always seems to know where to psychologically stab the knife to draw the maximum amount of pain and blood from those who hate him.
In so many ways Trump triggers his enemies to the point their primary defense is to simply label him a fool, a liar, or both; including the husband of one of the president’s closest advisors, Kellyanne Conway:
But is it real or reality TV? Is it perception or deception?
Currently, at the time of this writing, Trump has been taking much heat and negativity from those on the conservative side of the aisle as well. In the aftermath of the recent immigration gridlock, government shutdown, and Trump’s reopening of the U.S. government without his requested $5.7 billion for his border wall – political commentator and author, Ann Coulter, claimed “the president had broken the promise he made every day for 18 months”.
Is that actually the case? Take, for example, this ongoing plot’s twist and turns:
On December 11, 2018 Trump hosted Senate Minority Leader Chuck Schumer and (soon-to-be-reinstated) House Speaker Nancy Pelosi at the Oval Office. There, the president apparently surprised them both by allowing the press to video-record the meeting. During the discussion, the Democratic dynamic duo appeared uncomfortable and with Pelosi actually stating the following:
We’re here to have a conversation. I don’t think we should have a debate in front of the press.
The reason Nancy didn’t want the American public to see that exchange was precisely because of what happened next: It was reported accurately (via the video) on all news outlets and firmly placed Trump out in front on the issue of illegal immigration; and in manner that could never be spun otherwise before the American public. Moreover, the president made it very clear he was taking responsibility for shutting down the government over what he designated as “border security”.
Stated another way, that episode’s summary would have been:
Pursuant to the prohibition of southern invaders, it was Trump’s way or the highway. He would build that wall.
Towards that end, over the next several weeks, Trump casually dropped little hints of possible concessions to be made should the Democrats come to the negotiation table. This culminated on Saturday, January 19, 2019 when the president announced his BRIDGE Act which included two offers to the Democrats in exchange for the $5.7 billion in funds for a border wall. First, he proposed an extension of DACA protections for Dreamers, who were brought to the U.S. illegally as children, and, secondly, he offered to extend the legal status of Temporary Protected Status holders.
But nothing worked and the impasse made the Democrats appear as the obstructionists in the stalemate; at least according to many common-sense American viewers. This, even though an Associated Press, NORC Center for Public Affairs Research poll showed the majority of the country blamed the shutdown on Trump.
Around the same time, House Speaker Pelosi sent Trump a letter stating that she would not consider a resolution authorizing the President’s State of the Union (SOTU) in the House Chamber until the government had re-opened. In the letter, Pelosi specifically cited concerns regarding security amidst the shutdown. In response, Trump postponed the Speaker’s scheduled trip to Brussels, Egypt and Afghanistan, and then accepted Pelosi’s invitation after overcoming her security concerns for the SOTU.
By the time Nancy wrote another letter denying the U.S. President the U.S. House Chambers once again, she appeared even more the persistent obstructionist. Next, the ever-displaced and inconvenienced Trump shopped around for another venue before, finally, acting as the only adult in the room by reopening government for three weeks.
Only three weeks.
An argument could be made that Trump consistently stayed out in front on every reality TV maneuvering during the entire border wall standoff. It is also a lesser known fact that, in advertising and business, the law of primacystates being first is all that matters. It is, in fact, what winners do. It’s calledleading.
Accordingly, during any shrewd deal-making, the way to win the negotiations is by demonstrating the willingness to walk away first. The old game was stalled, so Trump started a new one. Or, rather, a new series of episodes whereupon the president could bang the Democrats like bongos for twenty-one more days. Right up to the point he gets his wall anyway, because he’s already made it known: He will move forward on the wall at the end of three weeks and the only question is whether the Dems “want something or nothing”.
Nonetheless, when Trump unilaterally moves to build the wall in response to the “national security crisis” on our southern border, a black-robed antagonist (or protagonist depending upon the TV viewer’s perspective) will stop Trump in his tracks; just like the prior so-called “Muslim Ban”.
The show goes on. As it always has.
In the meantime, be sure to tune in this Tuesday for the 2019 State of the Union Address; coming soon to a screen near you. Check your TV guide for local listings.
SIDE TWO: Trump’s Big Game & the Psyoptic Woman in the Red Dress
Of course, there is another face to President Donald Trump; the other side on the same coin.
After winning the 2016 toss, why didn’t the president and his team build the wall as they took the field in control of all three branches of U.S Government? Perhaps it was a lack of cohesiveness with offensive coordinator, then Speaker Paul Ryan, at the helm coaching the RINOs (Republicans in Name Only) and Never-Trumpers alike. Or perhaps Trump was thinking he might actually improve his odds by scoring the House in the 2018 Midterms. Or, even in the event of overwhelming catastrophic game losses, the president still believed he could utilize border insecurity to hammer his opponents offensively, all the way into the end-zone for a 2020 victory.
Or was it because the ratings favor competitive games all season?
Remember, Trump did reveal, in a presidential debate no less, he would instruct his attorney general to oversee a special investigation into the crimes of Hillary Clinton. But then, just days after the big game’s win, Trump said the following regarding Bill and Hillary Clinton:
I don’t want to hurt them, I don’t want to hurt them. They’re, they’re good people. I don’t want to hurt them.
Furthermore, in spite of his promise to drain the swamp, Trump has, instead, recruited cadres of elite bankers and Deep State draftees into his lineup, he has greatly expanded America’s debt, and even bombed Syria twice in response to obvious false flags. Around the world, most recently in the nation Venezuela, Trump’s inner imperialist emerges at exactly the right, or wrong, times; depending upon the perspective of the viewers.
The United States President has refused to authorize the release of the Russia Investigation’s FISA applications, FBI 302 forms, and 1023 counterintelligence documentation; even when doing so prior to the 2018 Midterm elections might have helped him with independent voters enough to retain his party’s control of the U.S. House.
And why did Trump correctly identify stock market bubbles before he was elected, only to later take credit for stock market highs after his election? Won’t that now make him culpable in the eyes of the American public when the bankers crash the economy?
Why would he do that? As a former reality TV star, surely he knows optics are everything, right?
All of which raises legitimate questions as to whether these mistakes and missteps were scripted after all and, quite possibly, preordained by a secret playbook; because, honestly, over the past two years, all of the snatching of defeat from the jaws of victory now seems too perfect for reality. It is, in fact, exactly how it looks when one throws a game.
So close. But was it real? Or reality TV?
Perhaps we were all played like suckers who never stood a chance and will soon hear: “You’re fired!”
Nonetheless, the clues are there for those who carefully watch the replays. For example, during the government shutdown fracas, the following was revealed in an article dated January 8, 2019:
Ahead of the one year anniversary of the tragic shooting at Marjory Stoneman Douglas High School in Parkland, Florida, Sen. Marco Rubio (R-FL) on Thursday re-introduced the ‘Extreme Risk Protection Order and Violence Prevention Act,’ commonly referred to as ‘red flag laws.’
Think it couldn’t happen? Think again. Trump’s attorney general nominee, William Barr, during his senate confirmation hearings in mid-January 2019, stated his own desire regarding the red flag laws as “the single most important thing we could do in the gun control area”. Barr’s statement actually made Democrat Dianne Feinstein very excited. In response, she said quite flirtatiously:
Well, thank you, I would like to work with you in that regard.
What an amazing act of reaching across the aisle. Rarely have we seen such cooperation occurring in Washington DC.
Who knew?
But our screens only show extended replays of the antagonistic political clashes. Over and over; again and again.
This, coincidentally, allows precious time for the Matrix’s Agent Smiths, the neighborhood Stasi, and willing associates, to huddle together on the sidelines and finalize their next plays.
CONCLUSION: Fair Play or One Coin to Rule Them All
At the end of everything, it really does distill down to fair play against rigged rules of the game: to natural rights versus tyranny; the individual’s life, liberty and the pursuit of happiness enforced by means of an equitable and just legal code – or mandated utopia by way of corporate collectivists and their piecemealed totalitarianism.
Although President Trump provides the appearance of advocating for the former options, there remains the possibility he was hired as a means to deliver the latter alternatives.
Trump’s “Make America Great Again” only appears antithetical to Obama’s “Hope and Change” when, in fact, they were slogans for different products sold by the same company. They are two faces on the same coin and both spokesmen fundamentally changed America by the luck of the toss. Obama was the gift to Snowflakes and Trump a bestowal unto Deplorables.
And everyone loves a good tagline, don’t they.
In for a penny
In for a pound
All the corruption goes ’round and ’round
Spinning on air until it lands. And no one knows that it was planned.
Every president measures good and bad and to varying degrees. All of them make mistakes. But in the end, there is no such thing as luck in politics. All of our leaders are imprints on the same coin twisting on the air; as the plebs plan outdoor weddings and pray for dry weather as the gardeners across the street pray for rain.
Time waits on no one yet our luminous screens are always on; radiating our sight with light and shades and color.
One episode after another. One game before the next.
President Trump’s former aid and advisor, Roger Stone, was arrested on January 25, 2019 in an FBI pre-dawn raid for a process crime in an illegal special counsel investigation. On that very same day, the president re-opened the government with no border funds allocated for his wall.
Is the embattled Trump surrounded and waving a white flag?
Or is he virtuoso on the field playing his opponents like violins, and with the very strings from which they will soon hang?
Or is he an orange-haired pied-piper using Tweets and headlines and sound bites as flute music to simultaneously soothe and rile a nation of lemmings marching towards the cliff?
Is Trump the Matrix’s lady in the red dress?
Either way, in all the scenes now playing upon our screens, President Donald J. Trump remains the most interesting man in the world. He doesn’t always build walls, but when he does, the Mexicans will pay for them.
He’s a man of the moment; not the first, and he won’t be the last.
In the meantime, hundreds of millions of people worldwide will watch the Superbowl. The year 2019 will be remembered as the year the Patriots battled against the Rams. But, by the very next day, it won’t matter; because the real game isn’t the football. Nor does it consist of corporation’s competing for the most creative television advertisements. No. The real conflict remains between genuine patriots and inconspicuous horned beasts from on high; between free men against a secretive multinational financial elite ramming globalism down the throats of sovereign nations.
Heads they win. Tails we lose. It’s a flip of the coin. America First? Or, a New World Order?
Stay tuned and don’t touch that dial. We’ll be right back after these messages from our sponsors.
via ZeroHedge News http://bit.ly/2DPGqBI Tyler Durden
Forget about the automobile industry turning over a new leaf for the new year: the beginning of 2019 has started just as miserably as 2018 ended for many major auto OEMs in the US. On Friday, January sales numbers for most automakers trickled in, with almost all manufacturers posting disappointing results and/or missing estimates.
Ford – which no longer reports official monthly sales numbers, just like GM – was the one exception, rising 7% versus estimates of -1.5%, according to Bloomberg who cited “people familiar”. GM, on the other hand, fell 7% versus estimates of -3.7%.” Japanese car giants Nissan and Toyota also both posted losses that were larger than expected and companies like Fiat Chrysler and Honda saw their meek gains falling below expectations. As was expected – and stop us if you’ve heard this one before – most companies wound up blaming the cold weather. Honda got creative and also blamed the government shutdown.
Reid Bigland, Fiat Chrysler’s head of U.S. sales, said: “In spite of some frigid January weather, we remain bullish on 2019 given the continued underlying strength of the U.S. economy.”
Of course he does, as does Henio Arcangeli, senior vice president of automotive ops for Honda’s U.S. unit, who said: “Our sales were very strong in the beginning of the month. With the cold weather that’s hit, particularly this week, as well as the government shutdown that we had a little bit earlier, it has slowed things down a little bit.”
The results also indicate that the annualized industry sales rate has slowed more than estimated. Analysts were previously projecting 16.9 million cars and light truck deliveries for the month compared with the 17.1 million that were delivered in January 2018.
Most companies have directly or indirectly conceded that demand is going to slow in 2019 with interest rates higher than they’ve been in a decade. The average rate on new cars moved up to 6.2% last month from 5% a year ago. The Jeep brand, which had been carrying Fiat Chrysler for the past 12 months, had its first monthly drop since December 2017.
Michelle Krebs, an analyst at Autotrader said: “In contrast to previous months when Jeep was the champ, Ram saved the day.”
And by “saved the day”, she means that Fiat’s numbers came in well short of expectations. To add insult to injury, Fiat Chrysler also posted these poor numbers despite the fact that they sold 50% more vehicles to fleet customers during the month. Fleet channels are generally used to make sales look “robust” during weak periods. This January, Fiat delivered about 23% of their vehicles to fleets, versus 16% a year ago.
Finally, Nissan saw a 40% plunge in sales of its Altima sedan. It looks as though the bottom of the plunge for sedans – a result of the popularity of SUVs – isn’t quite in just yet.
We wonder what the excuse will be when it starts to warm up this spring – global warming?
via ZeroHedge News http://bit.ly/2HMxT6G Tyler Durden
There is a widespread concern in the world regarding China’s decelerating economic growth. The slowdown, if it continues, threatens economic activity almost everywhere. Growth in Germany, for example, has already cooled due to its exports of high-quality machinery to China dropping precipitously.
Those in the oil market also worry about China. The country’s economic growth has been a key driver of global crude oil consumption. Indeed, China accounts for one-third of the International Energy Agency’s projected 2019 increase in world oil use.
Weak Chinese economic growth is not the end of the oil market’s prospective ills, however. Few recognize the additional trouble on tap from the Chinese independent refiners affectionately known as “teapots.” The danger occurs because lower oil demand growth in China comes just when independent refining capacity there is rising. The capacity growth has been financed primarily by debt, most likely supplied by China’s alternative lenders. As demand slows, these refiners will turn to international markets, dumping products in Singapore, the Americas, or Europe to earn hard cash. In doing so, they could plunge the global refining industry into a serious recession and drive crude prices down sharply.
This will not be the first time that refineries in Asia caused a crisis in the oil sector. In 1997, Korean refiners did the same during the Asian financial collapse. That incident is described in the December 1997 Oil Market Intelligence (OMI). The report begins by noting that Korean refiners had begun to seek exports markets before the crisis hit “mostly to employ 620,000 b/d of new refining capacity that came on stream since late 1966.” The effort intensified as domestic consumption collapsed:
But once the won started its second descent in two years—it dropped over 94% against the dollar between July 1 and December 10 [1997], much of it in early December—the push to export became more desperate because the five big refiners could not recoup in domestic product prices the staggering dollar price of crude oil feedstock. (“Economic Crisis Spills Over onto Oil Markets,” Oil Market Intelligence, December 1997, p. 11.)
The article noted that Korean refiners were trying to sell products to China, Taiwan, and Japan. It added that Korea’s exports to China rose fourfold between January and October, while its share of the Chinese gasoil import market went from seven to twenty-six percent. The Asian refining center in Singapore lost market share, falling from seventy-five to twenty-six percent.
The OMI report also observed ominously that “shippers and traders report that Korean refiners are lowering prices to meet their need to expand that share.”
The gasoil market suffered significantly. The OMI editors explained that Korea’s use was declining (consumption dropped one hundred fifty thousand barrels per day, or thirty-three percent, in December 1997 from December 1996), causing refiners to push gasoil to China. Those sales pressured margins at refineries in Singapore. The editors added, “If its [Korea’s] five refiners can keep importing crude oil—and the government is now talking of using foreign exchange reserves to finance crude purchases and overcome private credit squeezes—it is likely to keep pumping out the product to its neighbors.”
Looking back twenty years, one sees this is what happened. Figure 1 traces the price of gasoil and premium gasoline in Singapore by month from January 1997 to December 1999. Spot gasoil prices plunged from a peak of $32.50 per barrel in December 1996 to a low of $13.80 in October 1998. Distillate cracks measured against spot Dubai crude dropped from $9 per barrel in December 1996 to zero in 1999.
(Click to enlarge)
Arbitrage carried the impact of the Korean fire sale across the globe. Gasoil prices fell fifty-eight percent in Singapore from December 1996 to October 1998. In the US Gulf Coast market, they declined fifty-eight percent from December 1996 to February 1999. In Europe, the decline was fifty-one percent.
Korea’s fire sale of products precipitated a crude price decrease. As I have written often, product prices often lead crude prices. This was the case in the Asian crisis. Energy Intelligence Group data show that the netback on Dubai crude at Singapore declined from $23 per barrel in December 1996 to $9 in February 1999. Spot crude prices followed, as did prices for export contracts linked to spot crude prices.
Chinese independent refiners may be emulating the action of Korean refiners in 1997 and 1998. The Wall Street Journal warned on January 23 that the economic slowdown in China could curb Chinese gasoline consumption, which would “mean a flood of exports to the rest of Asia.” The WSJ author, Kevin Kingsbury, added that regional refining margins could be pressured.
Kingsbury explained that the economic slowdown would reduce growth in China’s oil consumption as refining capacity there increased:
Nomura forecasts demand growth of 0.5% this year, slowing from an estimated 4% last year. At the same time, Chinese refineries will increase production capacity by some 6%, according to Fitch Solutions.
He also noted that export quotas for gasoline, jet fuel, and fuel oil rose thirty-five percent last year. Further increases are expected for 2019 “so Chinese refiners can maintain production.”
In this regard, a January 24 report from Bloomberg is concerning. In it, Jack Wittels wrote that “a fleet of giant newly built oil tankers is gearing up to ship diesel out of East Asia.” Five new tankers are positioned off China’s coast, each with a capacity of two million barrels. Two additional tankers will shortly join the “armada.” Four of the parked vessels are already loaded or loading. The products will likely move to Europe, where margins are high.
These will not be the last shipments from China. In past economic downturns, the decrease in petroleum product consumption has lagged the falloff in economic activity. For example, the December 1997 OMI began its discussion of problems in Asia with this observation: “a few short months ago it seemed that Asia’s economic woes were unlikely to affect oil demand in a major way, and that the financial crisis could be contained in Thailand, Malaysia, Indonesia and the Philippines.” The article then continued ruefully, “Neither proposition looks valid anymore.”
The increased exports from China will reduce refining margins across the globe just as margins are being squeezed by a gasoline surplus and as refiners get ready to meet the IMO 2020 standard. This situation could have serious impacts on US and European refiners. Profits could come under intense pressure, particularly at firms that have been boosting product exports from the United States to Europe and the Americas.
Attention must stay riveted on China for the rest of 2019. The volume of product exports from its refineries will keep rising if its economy continues to falter, as many believe it will. The country’s problems, and problems for the world refining industry, will be compounded if the United States and China cannot resolve their trade war.
In this regard, further news on Wednesday, January 29, was ominous. Platts reported that China’s refiners are looking beyond Asia to boost exports. In 2018, Chinese gasoline exports rose twelve percent from 2017 and gasoil exports seven percent. There could be much larger increases in 2019 as more refining capacity comes on stream, especially if China’s domestic consumption stays the same or decreases.
via ZeroHedge News http://bit.ly/2HIKmIx Tyler Durden
Since the Wall Street Journal first exposed the fraud at Malaysian sovereign wealth fund 1MDB back in 2015, Goldman and CEO David Solomon have been denying that the bank’s role in enabling the perpetrators of the multibillion dollar public swindle, a group that included a corrupt banker and former Prime Minister Najib Razak, was the result of a few bad apples – not the result of a “culture of corruption”, as former Goldman banker-turned-cooperating-government-witness Tim Leissner alleged in an affidavit.
But as reports revealing the involvement of senior Goldman executives, including then-CEO Lloyd Blankfein, surfaced, it steadily became harder for the bank to try and pin it all on Leissner and his team in Southeast Asia – particularly after word got around that Blankfein had attended a one-on-one sit down with Jho Low, the banker who facilitated the 1MDB bond offerings underwritten by Goldman (and who is now a fugitive from justice, wanted by authorities in Malaysia and the US).
Facing the threat of lasting reputational damage, and massive fines in both Malaysia and the US, Goldman’s board of directors has decided to take action in what looks like a first step toward admitting that Blankfein – whose reputation and legacy at Goldman has suddenly been thrown into doubt – played an important role in helping the bankers who brought in the deal circumvent the bank’s compliance controls.
According to the Wall Street Journal, Goldman said in a filing on Friday that it plans to withhold a $14 million deferred cash bonus to Blankfein and instead defer the payout until after an investigation into 1MDB had finished.
Goldman is temporarily withholding a cash bonus that Mr. Blankfein would have been owed under a 2011 award. The bonus was deferred and the ultimate payout was tied to Goldman’s long-term performance. It has roughly doubled from its original $7 million value, according to a Wall Street Journal review of filings.
Goldman is also withholding similar bonuses owed to two unnamed former executives. They are, according to a person familiar with the matter, Michael Evans, who was a senior Goldman executive at the time of the 1MDB bond sales, and Michael Sherwood, and senior executive in London who retired in 2016.
According to the filing (cited by FT), the board said “in light of the ongoing governmental and regulatory investigations relating to 1Malaysia Development Berhad (“1MDB”)” share awards to all its senior executivescould be penalized “if it is later determined that the results of the 1MDB proceedings would have impacted the (Remuneration) Committee’s 2018 year-end compensation decisions for any of these individuals.”
Blankfein, who retired as Goldman’s CEO on Oct. 1, was paid $20.5 million in 2018. But even in retirement, the bank could come after compensation that it already paid to Blankfein because it reserves the right to claw back some or all of the executives’ pay from 2018. There’s nothing like the possibility of having to surrender millions of dollars in already paid comp to make someone reconsider their decision to retire.
via ZeroHedge News http://bit.ly/2WtLl2u Tyler Durden
The country’s economic problems are starting to escalate…
China is a country of extremes, especially regarding economic forecasts. There are those who think “China will take over the world” with its technocratic central planning. Then there are those who say its debt bubble is so gigantic, the economy will crash and burn.
The truth, probably, lies somewhere in the middle. And it looks like we are getting closer to know the truth.
Official GDP growth, is of course on track at 6.6 percent for the year 2018, stellar among industrial and even emerging economies. But nobody believes these figures, even though they are the worst since 1990.
“Real GDP fell by 1.7 percent and 0.6 percent in Q3 and Q4 respectively compared with the official figures showing growth of 6.4 percent and 6 percent,” Enodo Economics chief economist Diana Choyleva wrote in a note to clients about the annualized growth during the past two quarters of 2018.
According to Choyleva, China is experiencing an unofficial recession.
Enodo Economics estimates Chinese GDP growth was negative during the past two quarters. (Enodo Economics)
While this doesn’t mean the crash and burn scenario is unavoidable, the flurry of official and unofficial economic indicators flashing red make the “take over the world” scenario quite unbelievable for the intermediate future.
Going Down
No matter which official indicator you look at, the Chinese economy is in decline. Retail sales growth is barely above 5 percent, the lowest level since 2003 with automobile sales crashing 13 percent. Total imports in U.S. dollar terms are down 7.6 percent in December of 2018 as compared to the year before.
Imports in China are crashing. (Capital Economics)
China’s current account balance, or the amount of exports over imports and one of the main drivers of Chinese growth over the decades is down to 0.37 percent of GDP, from 10 percent in 2008.
China’s current account was once a source of strength, not anymore. (TS LOMBARD)
Given these figures, it isn’t surprising that research firm Capital Economics doesn’t “rule out a sharper-than-anticipated slowdown in China’s economy.”
With exports down 4 percent, the analysts at Oxford Economics are also sounding the alarm bells.
“While Chinese GDP growth is slowing broadly as we expected, trade is slowing more abruptly, implying bigger negative international spillovers. With China accounting for some 10 percent of world trade (and almost 20 percent of world trade growth in the last decade), this import weakening is a significant threat to global growth.”
What about the unofficial data? The China Beige Book (CBB) runs an extensive amount of surveys across different companies and sectors on the ground in China. As early as late December, it warned that:
“Now the trend is deterioration, into what could potentially be a much weaker 2019. Most telling, still-heavy borrowing did not lead to heavy capital expenditure, with paltry results in services and retail driving a sharp drop in overall investment growth.”
The CBB also warned that with manufacturing broadly down, services and consumers are also not picking up the slack, as borne out by official data.
Given this material slow-down in trade, one may assume that it’s the U.S. retaliation against unfair Chinese practices that’s causing the troubles in China’s economy. The CBB also reports that only 18 percent of companies operating in the trade-heavy southern province of Guangdong showed an increase in export orders in the fourth quarter, down from 65 percent in the third quarter of 2018.
Although the Trump administration’s tough stance on Chinese anti-competitive policies certainly isn’t helping Beijing, it is not the cause of the slowdown and problems in the Chinese economy:
Trade with countries from Asia slowed much more than bilateral trade with the United States and the Chinese domestic problems like a slow down in retail sales cannot be explained by a limited amount of tariffs.
Debt Problems
The main problem of the Chinese economy is debt and overcapacity. Debt has blown up to 300 percent of GDP through the state-controlled banking system.
The financing went into building trains, roads, airports, apartments, shipyards, anything that can be built. And while some of the stuff is undoubtedly useful, a lot of it is not.
If it’s not useful or sustainable, it won’t generate the returns necessary to service said debt. This problem could have been nipped in the bud, but Chinese central planners wanted ever more steel mills and high speed trains and push back the day of reckoning when most of the unprofitable companies would go bankrupt.
So in order to keep the gravy train running, more debt had to be issued to build more stuff.
Now, the debt growth has also come to a halt, which is most likely the root cause of the massive slowdown. Official broad credit growth has slowed to around 10 percent, the lowest in a decade.
Within the broader debt system, the shadow banking system of trust loans, bankers acceptances, and wealth management products is deep into negative growth territory.
On the other hand, the CBB reports that companies are maxing out official channels to stay liquid, but this is more a sign of desperation rather than future growth to come:
“Evidence of clandestine People’s Bank of China (PBOC) easing is piling up: the loan application rate stayed elevated, the rejection rate remained near all-time CBB lows despite this, and both bank and shadow bank lending again got cheaper. The problem isn’t lack of borrowing; it’s that plentiful borrowing isn’t boosting growth.”
This divergence makes sense as fixed asset investment rose 5.9 percent in December from a year before, bucking the trend of other declining indicators. According to CBB, it was state and larger firms who borrowed the most, channeling it into construction activity, which is the easiest lever for the central planners to manipulate.
Floor space under construction rose 5 percent in December, according to official figures, while there are still about 20 months of inventory left to be sold according Capital Economics estimates.
Getting Desperate
After the new year, the PBOC easing became less clandestine as the central planners in the Chinese regime are getting desperate.
After lowering the among of money banks have to hold on reserve in late 2018, the PBOC started a full blown Quantitative Easing (QE) scheme in the beginning of 2019.
Although final numbers are not known, the program allows banks to swap near worthless collateral for central bank assets, thus reducing the risks on their balance sheet and freeing up reserves for more lending.
But also the Chinese regime leader, Xi Jinping, has found some strong words to warn his comrades at an internal party meeting in January:
“The party is facing long-term and complex tests in terms of maintaining long-term rule, reform and opening-up, a market-driven economy, and within the external environment,” Xi said, according to Xinhua.
“The party is facing sharp and serious dangers of a slackness in spirit, lack of ability, distance from the people, and being passive and corrupt. This is an overall judgment based on the actual situation.”
His assessment isn’t too far off the mark as the “actual situation” is rapidly going downhill.
Smoke and Ashes
Now, does this mean the other extreme is going to play out and people in Beijing will go back to riding only bicycles again? Probably not.
The most likely outcome of debt deleveraging is going to be a period of low or no growth and major creative accounting exercises to sweep bad debt under the rug, as “Red Capitalism” author Fraser Howie describes the previous round of bank bailouts around the year 2000:
“A lot of it was accounting: reshuffling assets, moving things off balance sheet, taking them out of the public eye.”
This can prevent a full-blown collapse but since an inordinate amount of capital and labor has been wasted on technocratic central planning projects, there also won’t be any growth.
So China will most likely resemble the other debt basket case Japan, except for the fact Japan managed to lift the whole population into prosperity and not just about half. So much for the achievements of the Communist Party and the “Chinese model” of statism and central planning.
Of course, there will be ups and downs and the QE as well as other government stimulus may boost activity for a little while, but not for long, writes Choyleva and advises investors to buckle up:
“These tectonic shifts will make it a lot harder – if not impossible – for Beijing to count on the tried-and-tested tools of policy stimulus to restore sustainable growth. Unsettled as they are, global financial markets have yet to grasp that this time it really is different in China.”
via ZeroHedge News http://bit.ly/2MIKI0H Tyler Durden
Now that she controls the House Financial Services Committee, Congresswoman Maxine Waters is preparing to finally make good on her threats to subpoena Deutsche Bank to get the “full story” on President Trump’s financial relationship with the only major bank that would lend to him following a series of Trump company bankruptcies during the 1990s. And as Waters prepares to let the subpoeanas fly, what better way to alert the broader financial industry that she is not playing around than to sit for an interview with CNBC’s chief political correspondent John Harwood?
During a brief interview that aired on Friday, Waters told Harwood that her goal is nothing short of exposing Deutsche Bank’s involvement in helping the president launder money and avoid taxes (allegations that haven’t been substantiated by any media reports or Mueller probe indictments – or any information that has found its way into the public awareness over the past two years).
According to Waters, “we already know that Deutsche Bank is one of the biggest money laundering banks…in the world.” And there have been rumors about Trump possibly committing financial improprieties during his business dealings. So, in Water’s estimation, the probability that her probe will uncover some kind of smoking gun is probably pretty high.
John Harwood: What is your objective in the joint investigation that you plan with Congressman Schiff of Deutsche Bank?
Maxine Waters: We know that Deutsche Bank is one of the biggest money laundering banks in the country, or in the world perhaps. And we know that this is the only bank that will lend money to the president of the United States because of his past practices. He won’t show his tax returns and we have a certain information that leads us to believe that there may have been some money laundering activity that might have been connected with Mr. Manafort, with some people in his family.
John Harwood: Do you believe that money laundering has been a significant part of President Trump’s business?
Maxine Waters: I know that there are a lot of rumors. I think we need to learn more about the finances of the president of the United States, and he’s hiding that information from us. He’s not disclosing that information. And I think we need to delve deeper into that and find out what is going on and whether or not money laundering has been involved and whether or not there are connections with the oligarchs of Russia.
So does Waters believe Trump is guilty of corruption (which would imply wrongdoing following his inauguration)? She refused to answer the question directly, but instead listed off a litany of Trump’s financial foibles, from his bankruptcies to reports that he stiffed contractors and subcontractors.
John Harwood: Do you believe, based on what you know now, that the president is corrupt?
Maxine Waters: I believe that this is a problematic president who has proven that he has taken advantage of others in the past. I know that he was fined and I do know that the attorney general of New York made him reimburse at least $25 million. We know that he has had bankruptcies. We know that there are a lot of stories he hasn’t paid contractors, he hasn’t paid subcontractors. We know a lot about the history of this president and it doesn’t look good. … So, we think that in addition to what Mr. Mueller is doing and now what we are able to do with our subpoena power, we’ll find out more and we’ll be able to answer that question directly.
In a surprising show of mettle, Harwood confronted Waters about the corruption allegations that have dogged her political career.
John Harwood: Now, do you think that the fact that you’ve taken some criticism about conflicts of interest — you were on a watchdog group’s list of most corrupt members of Congress — does that undercut your ability to pursue these issues?
Maxine Waters: No, absolutely not. First of all, all of the questions were answered, I was totally exonerated and found not to have done anything wrong. And the group that was involved in that was not an official group. It was simply a nonprofit operation that decided that it was going to take on the responsibility of choosing members that they didn’t necessarily like. But whatever they tried to do to me didn’t work because it was proven that I had done nothing wrong.
But he followed that question up with a softball: Asking Waters what she thinks of some of the media’s favorite sobriquets for the California Congresswoman.
John Harwood: So you think the “Angry Maxine,” the “Kerosene Maxine,” has been exaggerated?
Maxine Waters: I don’t know about those labels. I do know this, that oftentimes right-wing conservatives will label you, they will call you names. I think you have to look at where it comes from. If it comes from people who are diametrically opposed to me and my philosophy, and what I care about and what I’ve worked on, then it is not credible, and so I pay no attention to that.
That’s a lot of talk based on so little actual evidence. With this in mind, we can’t help but wonder: What is Waters going to say if her probe comes up empty handed?
Watch the full video below:
“We know that Deutsche Bank is one of the biggest money-laundering banks in the country; in the world, perhaps,” Rep. Maxine Waters discusses how the bank could be connected to the Trump administration with @JohnJHarwood. https://t.co/dr0Jwv0URspic.twitter.com/WzNShKkfXP
