Just a day after President Trump visited Langley, 53-year-old Kansas Rep. Mike Pompeo has been confirmed by the Senate as CIA Director amidst its most contentious relationship with the White House in decades. As voting continued, there were 67 “yes” votes, more than enough to confirm Pompeo, and 30 voted against. Almost all the opposition was from Democrats, but perhaps most notably Rand Paul voted against him.
As The Hill reports, White House press secretary Sean Spicer on Monday downplayed any friction between the CIA and the president.
He called talk of a rift at the agency a “myth” and noted attendees were “hooting and hollering” and gave Trump a standing ovation.
“That doesn’t sound like a huge feud. They were excited. They were clapping. They were cheering when he walked in,” he told reporters. “To see reports that made it sound like there was some fence-mending that needed to happen — that sure didn’t look that way when you walked in.”
But the performance drew fire from the CIA’s outgoing director, John Brennan, who said Trump “should be ashamed of himself.”
But it’s all over for him now, as Pompeo’s most vexing task may involve finding a way to establish a functional relationship between the CIA and President Trump.
As The Washington Post notes,Pompeo, 53, was a prominent member of the tea party in Congress, known for strident political views.
He was a fierce critic of Clinton, a determined opponent of the Obama administration’s nuclear accord with Iran, and said at one point that he regarded the U.S. government’s conduct in the attacks on U.S. compounds in Benghazi, Libya, a political scandal that was “worse in some ways” than Watergate.
But Pompeo has spent the post-election period seeking to reassure CIA officials and members of Congress that he is prepared to put aside that partisan persona and be an honest broker as director of the CIA.
“My job,” Pompeo said during his confirmation hearing, “if confirmed, will be to change roles.”
Pompeo easily surpassed the number of votes required, but most notably Rand Paul voted against him:
Protecting the entire Bill of Rights is one of the main reasons I ran for office. I’ll remain vigilant in that cause https://t.co/JTtXJEhBMP
India’s Prime Minister Narendra Modi announced on 8th November 2016 that Rs 500 (~$7.50) and Rs 1,000 (~$15) banknotes would no longer be legal tender.
Sadly, the despondency visible in the old man’s facial expression has become a widespread phenomenon since the currency ban, particularly among India’s poor
Here are links to Part-I, Part-II, Part-III, Part-IV, Part-V, Part-VI, Part-VII, and Part-VIII, which not only provide updates on the demonetization saga, but explore and dissect India’s culture and why in this country of 1.34 billion – more than 1 out of every 6 human beings on the planet – so many exist in wretched poverty in this modern age, in an insect-like existence.
People storming a bank. If this is not an insect-like existence, what is it?
Oppression, exploitation, extreme stress, and the resulting millions of untimely deaths every year possibly make the story of the post-independent India one of the biggest crimes against humanity. Alas,it is getting worse.
As I explored in earlier updates, Indian institutions were designed to be run by the British. With them no longer at the helm, these institutions have mutated over the last 70 years to accommodate the underlying irrationality, tribalism, and superstitions of India. They have slowly but surely crumbled away, decaying and becoming degraded.
Indian democracy today is simply mob rule, its educational system little but propaganda, and its citizens are mere cogs in the service of the State. Indian institutions, including the Supreme Court, are far from independent. They are yes-men to India’s prime minister, the demagogue Narendra Modi.
India never properly assimilated the concepts of reason, liberty or individuality. When these concepts were offered by Europeans free of cost on a plate, Indians completely failed to take notice them. All they saw and copied was the facade of western lifestyle: clothing, music, cinema, food, etc.
Under Modi, India’s degradation has picked up pace. Today the country is a full-fledged banana republic. However, all of this had to happen eventually, with or without Modi. India is fated to disintegrate into tribal fiefdoms at some point. That is the direction it has embarked on.
All of this can be said to apply to almost every country in South Asia, the Middle East and Africa. What has slightly differentiated India — at least in the eyes of the international media, if not in reality — was the possibility of free speech at the margin.
India’s diversity — and the internal conflicts resulting from it — delayed the onset of full-fledged institutional totalitarianism. Alas, rising Hindu nationalism (Hindutava) is now rapidly weaving these heterogeneous groups of people into a totalitarian whole.
And now, India is rapidly losing one of the most important institutions introduced by the British: freedom of speech.
A scene from last December; if you want to go about exchanging or depositing your banknotes in Modi’s India, expect to be humiliated.
Fake News
A writer should be interested in providing facts in as balanced a way as possible. He should be able to change his views as facts change and as his dispassionate understanding of the facts changes. I want to use this occasion to address some of the criticisms I have received over my articles on the currency ban.
When I wrote the first article on the subjet of demonetization immediately after the announcement, I was ridiculed for exaggerating. There was almost nothing about the event in the international press for many weeks thereafter. Very slowly it did get around to informing readers that all was not right with India. Bloomberg, Forbes, et al. eventually came out with scathing articles.
After two months, the IMF reduced its GDP growth forecast for India, from 7.6% to 6.6%. I disagree with this figure. Everywhere I look, I find the economy suffering and/or stagnating: businesses failing, people going bankrupt, and a large section of society going into economic seizure. From what I have seen, growth is probably negative. I expect GDP to fall. The IMF will very likely have to revisit its numbers.
India’s mainstream press has been mostly silent — most are puppets of Modi these days. There has been virtually no reporting from the rural and tribal areas, where 75% of India’s citizens live. There is hardly any information on what is happening in smaller towns.
I have written eight updates, while traveling in India and investigating the situation. Based on all I have seen and discussed, the situation is a lot grimmer than mainstream media reports suggest.
Do I detest Modi? Yes, I do. Do I work for any other political parties? No, I do not. Neither of these matter, for the real fountainhead of India’s problems is not politics. Politics is merely a symptom of the extremely corrupt, irrational, and tribal culture of India.
Do I exaggerate when I call India a banana republic that is increasingly turning into a police state? Do I exaggerate when I call it a fascist state? Not at all. Once again, in due course the reality will assert itself sufficiently that the international media will have no choice but to catch up with it.
Indian cinema halls play the national anthem before the start of every movie. In the past I have remained sitting, suppressing my revulsion while watching people standing up in dutiful obeisance. Recently the Supreme Court ruled though that everybody must stand up. I can now be arrested for treason if I remain sitting.
When I recently went to watch a new release, Dangal, I timed my entry so as to arrive in the cinema after the anthem had ended. I had no luck. They included the anthem in the movie as well, as part of the story. When it started playing, people anxiously started looking around, unsure whether to stand up or not. Slowly but surely, everyone stood up.
If watching this does not make one feel like puking, one’s gag reflex is probably not in working order (i.e., it is time to let a doctor examine the chemo-receptor trigger zone located in the fourth brain ventricle). First principles tell me that India is in an advanced stage of becoming a police state.
Do I write so negatively about India in order to earn brownie points from Westerners? Hardly. The West is so firmly in the grip of political correctness today, that most Westerners dislike me for saying what I do. I have no hope to ever get a job in a “normal” western organization. However, a writer’s task is to write what he sees, not what he thinks may please his audience.
The reality of India (and many similar countries) must be understood for the sake of their wretched poor people. How can one be of any use if one doesn’t properly understand their problems? A faulty understanding of these societies has resulted in Europe suffering a migrant crisis. The West must understand for its own sake how deeply entrenched cultural traits are.
Neither the West nor the rest of the world has the luxury to sugar-coat reality. There is indeed a lot of fake news around, but the worst of it emanates from governments and their despicable cronies in the mainstream media.
How many of these people never made it into the bank to deposit or exchange their cash?
30th December 2016: The Last Day to Deposit Banned Banknotes
Modi issued 70 official notices announcing changes to his original demonetization plan. Ultimately, people were required to deposit all the banned banknotes in their possession at a bank branch office by 30th December. By this date about 97% of the banned currency had in fact been deposited. The banned banknotes were used openly until the very last day. These notes were funneled to the banks using the most effective channels.
Interestingly, over the last five weeks before the deadline, it was possible in parts of India to sell the banned banknotes at a premium. The reason was that many companies belatedly realized that while they had force-fed the banned notes to their workers and suppliers in earlier days, legally they should not have done so.
If they had a cash balance in their balance sheet on 31st October 2016, they were supposed to deposit the banned banknotes in a bank pursuant to the law on the currency ban. This meant that if one had bags full of banned currency, one could suddenly sell them at a premium – which made an utter mockery of the entire demonetization exercise. Ironically, Modi expected that many of these notes would never make it back to the banks.
Who were the people who failed to deposit their banknotes? For one thing, the Indian government made no provision to enable those holding banned notes outside of India to deposit them. Tens of millions of people of Indian origin who kept some Indian cash for their future visits to India, were unable to deposit their banknotes.
Many tribal people and people who simply didn’t get the information on demonetization, or those who were too sick, old or disabled, and/or could not afford to stand in queues, failed to deposit their cash as well. While only 3% of the total amount of banned notes was affected in the end, it was all that millions of desperately poor Indians had.
With most of the currency deposited, the demonetization exercise ultimately was an utter failure. The corrupt and rich lost nothing. But it created havoc with the lives of hundreds of millions, it killed more than 150 people in queues alone, and destroyed the economy to boot. As you continue reading this and watch the videos, pay attention to the wretched poor and look at their faces.
The poorest segment of society has suffered the most. This old man did not receive the information on demonetization in time and is being told about it in the new year. He is now left with toilet paper.
On New Year’s Eve, all bars, night clubs, etc. stopped everything to run a lengthy speech by Modi. People were expecting him to provide some clarification on what would happen next and when liquidity would be restored. Instead, he spent the entire time rambling about irrelevant issues. These included offers of a few crumbs of free money to poor people, pregnant women and the middle class — which are highly unlikely to actually materialize.
A scene from the last week of December. Indians have no history of rebelling. Lacking reason and moral instincts, they simply adjust to their predicament. They accept being abused or raped, believing it is their destiny. I have serious doubts that they feel violated when they are raped. But when given a stick and a uniform, they consider themselves omnipotent, forever eager to abuse their fellow citizens.
The New Year
Modi had promised that full liquidity would be restored by the end of 2016. This did not happen. The queues outside of bank branch offices have continued. Both ATMs and banks lack cash and if you can get any, there is an upper limit on how much you can get. Banks mostly offer only a part of this upper limit.
Banks have now become extended arms of the tax department. Most decent people are afraid of going to bank branch offices these days, as they are interrogated every time they make a visit. They must explain why they are depositing certain checks, why they are moving money electronically between their own accounts, why they are investing in certain stocks, etc.
Indian banks were overburdened and understaffed even for regular work. Now forced to police their customers on behalf of the government, bureaucracy has gone through the roof. As I pointed out in an article in 2015 on the deterioration of the relationship between private companies and their customers, Indian private banks inter alia make regular, unauthorised deductions from the accounts of their clients.
Most Indians lack smart-phones and internet connections. E-transactions have become a massive burden, not only for poor, illiterate people, but even for the well-educated. Transactions are proving extremely error-prone and clients must now wait for hours trying to get customer support representatives to effect appropriate refunds. Most people simply give up after a while.
India’s attempt to go cashless will be an utter disaster. But there is still a lot of pain to come before India inevitably reverts back to a cash economy.
In the first week of January 2017, the sign on the door of this bank branch office says that it has no cash. Pensioners are waiting outside in utter cold, hoping that some cash might still arrive.
The Real Pain is Just Beginning
India has witnessed long queues everywhere over the past two months. People were desperate to convert their banned banknotes. Those who did not have a bank account — i.e., 50% of the population — had to use someone else do this conversion for them, mostly for a commission.
Many never got to know about the ban. Many were too sick or too disabled to visit a bank branch office within the given time. The rich and those with bags full of cash in the end had no problems with the conversion. Some of them even managed to sell their banned notes at a premium.
India’s GDP per capita is USD 1.718. India has the highest number of poor, malnourished, and illiterate people in the world. These people are now expected to use smart-phones to make payments and earn their living. This is not going to happen.
About 32.7% of India’s citizens are extremely poor. They go to bed hungry. Only about 17% of Indians own smart-phones. Half the population has no bank account. Even when available, electricity and internet connections are highly unreliable.
India’s experiment with going cashless will be an utter failure. All the factors mentioned above have caused a lot of pain. Possibly the worst though is the fatal blow that demonetization has delivered to the economy. Every industry is suffering.
All sectors of the economy are reporting declines in business ranging from 20% to 80%. This has had a cascading affect on everything. The entire economy is stagnating or shrinking. India’s government is still expecting GDP growth of 7.1%. What one sees instead is negative growth everywhere, and it seems set to continue.
It is conventional wisdom that people will always eat and go to hospitals, even in a bad economy. Today, hospitals in India are empty and vegetable prices are down by as much as 50% or more. Farmers are dumping their produce in the streets or throwing it away. One must wonder what poor people are eating these days. They are even delaying medical treatment. Any expense people can avoid making is being postponed. Car and property sales are down drastically. People are being laid off across the economy. While the poorest of the poor have naturally suffered the most, even the hitherto non-empathetic middle class will soon start to feel the pain (read earlier updates for more details on this point).
Some farmers are destroying their crops, as they simply cannot afford paying for the harvest and transportation.
In this extremely poor country, in which the majority battles daily to get enough to eat, farmers are now giving food away for free. This raises important questions though: Will farmers actually produce for the next harvest? Can they even afford to plant a new crop? Is a famine coming next?
Advice to Indians
Indians are generally a very resilient lot. They adjust their lives to changing circumstances. Given their irrationality, many of them often fail to blame the true culprits, but instead take their anger out on the next weaker persons. Men take their anger out on women, women on children, children on animals, and animals bite anyone they come across.
Even before the demonetization exercise, India’s economy was suffering. Despite their arrogance, Indians are often unskilled, untrained, and unfit to function in the international community. To this depressed and stressed out, but mostly numb society, Modi has added plenty of poison.
India’s economy has in reality always been negative-yielding. It has become even more negative-yielding now. The currency and the stock market are vastly overvalued. India received the free gift of western technology, plenty of easy money from naive fund managers sitting in Western capitals and cheap oil — all of which are reversing direction.
Investment in the formal system has no chance of generating a satisfactory return. Indians should move their savings out of India while they still can — it is still possible to buy gold or open bank accounts in safer and more reliable jurisdictions outside of India. Keep in mind that capital controls will likely be imposed soon. Those who still have the opportunity and the necessary skills should move out of India.
As Democrats have struggled to rebuild in the “Post-Trump” era, one coping mechanism employed has been to focus on their potential contenders for the White House in 2020. In fact, about a month ago we published a list, crafted by The Hill, of the top names being tossed around that were expected to make a bid for the Democratic nomination in four years (see “Here’s Who Democrats Say Are The Top 15 Presidential Candidates For 2020“).
Not surprisingly, and proving that Democrats learned very little from the 2016 election cycle, the list included several well-known establishment names including Hillary Clinton, Michelle Obama, Joe Biden and even Tim Kaine. But, right at the top of the list at #1 was the ultra “progressive” Senator from Massachusetts, Elizabeth Warren.
But while Warren might be the Dems’ new hope for becoming the first female president in 2020 (something that Lena Dunham desperately needs in her life), a new poll from her home state suggests that she may want to focus on holding her Senate seat in Massachusetts before setting her sites on the White House. According to a new poll from WBUR, 46% of registered voters in Massachusetts would like to “give someone else a chance” in the Senate while only 44% say Warren “deserves reelection.”
And while Warren’s 51% “favorable” rating may provide some comfort to anxious Dems, it would seem concerning that Massachusetts’ Republican governor is viewed more “favorably” at 59%.
While Massachusetts’ Republican Governor Charile Baker hasn’t announced any plans to oppose Warren in 2018, WBUR notes that the poll numbers from the state, at least as of right now, suggest his bipartisan appeal give him a good chance of defeating the far more polarizing Elizabeth Warren.
But according to a new WBUR poll, only 44 percent think Warren “deserves reelection.” Forty-six percent think voters ought to “give someone else a chance.”
“No one’s going to look at a 44 percent reelect number and think that that’s a good number,” said Steve Koczela, president of The MassINC Polling Group, which conducts surveys for WBUR. “No one’s going to look at it being close to even between ‘reelect’ and ‘give someone else a chance’ and think that that’s reassuring.”
Warren’s numbers contrast sharply with those of Gov. Charlie Baker. His favorability rating is 59 percent — 8 points better than Warren. But what’s more striking is that only 29 percent of poll respondents think someone else should get a chance at the governor’s office.
How could the state’s top Republican be more popular than its top Democrat? Steve Koczela says it’s about bipartisanship.
“When you look at Elizabeth Warren’s favorables, only 12 percent of Republicans have a favorable view of her,” Koczela said. “When you look at Baker, 60 percent of Democrats view him favorably. So he has bipartisan appeal where Elizabeth Warren really never has.”
Seems there is a downside to being completely dismissive of the will of approximately 50% of the population…even in Massachusetts.
James Howard Kunstler returns to the podcast this week, observing that despite the baton being handed to a new American president, the massive predicaments we face as a society remain the same. And it seems the incoming administration is just as in denial of them as the old.
Kunstler adds fresh critique to his now decades-old warning that we are sleepwalking our way deep into the Long Emergency. The longer we delude ourselves and waste our energies in pursuit of reviving the failed "endless growth" model, the farther our journey back to a sustainable way of living will be when our current system collapses:
I don’t think there is any sense that they really know where we’re headed, what our destination is, and what the imperatives are and what the future is actually telling us that we need to do. Don’t forget that the so-called psychology of previous investment is a very powerful force in American life and it’s prompting us to do everything we can to maintain the investments we’ve already made. Those investments are the ones I have already mentioned: the freeways, the suburban housing developments, the strip malls.
A lot of the hope pinned on Trump is based on the idea that he’s assembling this team of mega-competent capitalist movers and shakers who know how to make deals — the Wilbur Rosses and Rex Tillersons of the world — and that they are going to conjure up a tremendous surge of economic activity that will be majorly fruitful going forward in the future and produce a tremendous amount of new wealth. Of course the stock market has been pricing that in. But if you really drill down and look what’s going on there, especially the infrastructure plans, the idea that we’re going to revive American manufacturing — and especially the idea that we’re going to rebuild the happy motoring infrastructure so that we can have 50 more years of that — that, it seems to me, would amount to once again repeating the greatest misallocation of resources in the history of the world.
The last thing that America needs to do is to desperately try to maintain its suburban matrix. There are many other things we can do and ought to do, including reviving main street communities. One of the things we have to think about is reviving the small towns and small cities in American because those are the places of the greatest disinvestment over the last 30 years and we’re going to need them very badly as the global economy withers. It’s not going to disappear; there’s still going to be trade between nations, I believe, outside of some kind of major set of kinetic war conflicts, but we’re going to see the economy of North America turn inward and become more focused on what we can do here. One of the things that that suggests is that we’re going to have to do more with some of the assets and virtues that we have, mainly our inland waterway system because that’s going to also have to take the place of the trucking industry, which is going to be failing over the next 20 years.
Click the play button below to listen to Chris' interview with Jim Kunstler (51m:56s)…
It has been an 'evolutionary' year for billionaire Mark Cuban as his perspective has shifted from Trump-is-smart, "I'd be his VP" to Trump terror, "no doubt the market tanks," to acceptance to reality…
2/16/2016 – I think Trump is smart. I'd be Donald Trump's VP as long as he said he's listen to me in everything I said we'd be okay.
9/6/2016 – In the event that @realDonaldTrump wins, I have no doubt in my mind that the market tanks. If the polls look like there's a decent chance that Donald could win, I'll put a huge hedge on that's over 100% of my equity positions… that protects me just in case he wins.
11/1/2016 – If Trump wins I'm already hedged. My hedge is up a little bit this week because the markets have been down multiple days in a row. I put on the biggest hedge I've ever put on against all my equities and interest-bearing bonds simply because of what I just said. You know, this is not like Brexit where oh, my goodness, there's a big reaction, big selloff and then a big bounce back and things just trickle down.
11/9/2016 – We all need to give President-Elect Trump a chance. Support the good. Lobby against what we disagree on. No one is bigger than us all.
We all need to give President-Elect Trump a chance. Support the good. Lobby against what we disagree on. No one is bigger than us all
And now today…1/23/2017 – I think the discussed economic programs are potentially a big plus for public companies and the overall economy.
As The Wall Street Journal reports, Mark Cuban is now among those who think the Trump administration could be boon to the economy and markets.
The key word: could.
The Dallas Mavericks owner and entrepreneur is “playing it by ear” when it comes to the effect President Donald Trump’s policies will have on the stock market. But he thinks there’s possible upside.
“I think the discussed economic programs are potentially a big plus for public companies and the overall economy,” Mr. Cuban said in an e-mail Monday morning.
The potential policies Mr. Cuban is optimistic about: corporate tax cuts; getting rid of the “friction” for small businesses; and reducing and simplifying administrative activities.
The big question marks, though, are whether the Mr. Trump’s policies actually get passed, and whether his communication tactics, “create social issues that overwhelm the economic upside.”
“The devil is in the details,” Mr. Cuban said. “We will see what actually happens.”
So, how is he investing in this new era? As he always does, he said: He’s long the stock market but hedged against “something catastrophic.” He declined to discuss further.
The Senate Foreign Relations Committee approved Rex Tillerson’s nomination as secretary of state by a vote of 11-10 – falling along party lines (with Democrats dissenting). As Bloomberg notes, this vote clears the way for the full Senate to confirm one of President Donald Trump’s most critical cabinet choices.
Before the vote on Monday, Democrats also said they were concerned about Tillerson’s statement that he would recuse himself from matters related to Exxon during his first year as secretary and rely on guidance from the State Department’s ethics office after that.
“In the end, I just had too many concerns and questions about the kind of leadership he would provide at the state department to feel comfortable voting for him,” said Senator Jeanne Shaheen, a New Hampshire Democrat.
The 11-10 vote came hours after Senator Marco Rubio, who had been the lone Republican withholding his support, said he would back the nomination of the former Exxon Mobil Corp. chief executive officer as the nation’s top diplomat despite concerns over his ties to Russian President Vladimir Putin and his refusal in his nomination hearing to condemn human rights abuses in Russia and the Philippines. As The Hill reports,
“I concluded that it would not be good for our country to unnecessarily delay or created unwarranted political controversy over this particular nomination,” Rubio told the panel at the Monday meeting.
“My concern was that Mr. Tillerson would be an advocate for and would pursue a foreign policy of dealmaking at the expense of traditional alliances and at the expense of the defense of human rights and of democracy,” he said, which he weigh against positive answers from Tillerson on issues like Cuba and supporting armament for Ukraine against Russia.
Sen. Bob Corker (R-Tenn.), the panel’s chairman, said that Tillerson had “no doubt that Rex Tillerson is well-qualified.”
“He has managed the world’s eighth largest company by revenue, with over 75,000 employees. Diplomacy has been a critical component of his positions in the past, and he has shown himself to be an exceptionally able and successful negotiator who has maintained deep relationships around the world,” Corker said.
Two key GOP senators who have been concerned about Russia and Putin, Lindsey Graham (S.C.) and John McCain (Ariz.), also announced in recent days that they would support Tillerson.
Tillerson will now face a vote in the full Senate, where he is nearly certain to get the majority vote that he needs to become the United States’ top diplomat.
A new bill has been introduced which would allow the United States to withdraw from the United Nations, and is now beginning to turns heads.
Representative Mike Rogers from Alabama introduced H.R. 193 American Sovereignty Act of 2017 in early January but is just now getting media exposure. The full bill can be seen here on congress.gov.
The bill repeals the United Nations Participation Act of 1945 and other specified related laws.
The bill requires: (1) the President to terminate U.S. membership in the United Nations (U.N.), including any organ, specialized agency, commission, or other formally affiliated body; and (2) closure of the U.S. Mission to the United Nations.
The bill prohibits: (1) the authorization of funds for the U.S. assessed or voluntary contribution to the U.N., (2) the authorization of funds for any U.S. contribution to any U.N. military or peacekeeping operation, (3) the expenditure of funds to support the participation of U.S. Armed Forces as part of any U.N. military or peacekeeping operation, (4) U.S. Armed Forces from serving under U.N. command, and (5) diplomatic immunity for U.N. officers or employees.
Clearly, many people would be in favor of such a move and many would oppose it. Many who would support the move believe that the United Nations Agenda 30 is a blueprint for a unipolar world order with a destructive agenda, as Zerohedge reported last year.
Regardless of one’s beliefs or opinions on the UN being a front for a new world order, this bill is a direct and bold move against the elite’s plans. For any nation to reclaim true sovereignty from the United Nations is setting a powerful example for the rest of the world. It sends a message that a country does not need a global governing body, but instead can run itself without global oversight.
Essentially, if the U.S. reclaimed sovereignty from the United Nations, it would be the equivalent of what Britain did by reclaiming it’s sovereignty from the European Union…times 10.
Perhaps the biggest revelations to come from such news would be the eventual exposure of the level of theft, deception and criminal activity done by the registered corporation known as The United Nations (yes it is a registered corporation). It would also move the U.S. back to Common Law and away from Maritime Law, a deep and complex subject that is explained further here by Judge Anna von Reitz.
In addition to this latest bill that seeks to end control by the elite, the U.S. has also proposed two other (among many) bills that if passed, would expose even more lies and corruption on a global scale.
The first of the two is the bill that Representative Tulsi Gabbard proposed in December of 2016; the Stop Arming Terrorists Act. The bill would cut off U.S. government (and tax-payer) funding to terrorist groups like ISIL and al-Qaeda. Gabbard says of the bill:
“Under U.S. law it is illegal for any American to provide money or assistance to al-Qaeda, ISIS or other terrorist groups. If you or I gave money, weapons or support to al-Qaeda or ISIS, we would be thrown in jail. Yet the U.S. government has been violating this law for years, quietly supporting allies and partners of al-Qaeda, ISIL, Jabhat Fateh al Sham and other terrorist groups with money, weapons, and intelligence support, in their fight to overthrow the Syrian government.”
Like the American Sovereignty Act of 2017, the Stop Arming Terrorists Act would expose much corruption and deception that the elite have been engaging in. Both bills would be a major blow to the elite’s agenda and would pave the way for mass arrests of many well known elites on a scale that has never been seen before.
Another bill that would signal enormous changes within the United States and the entire world would be the passing of the “Audit the Federal Reserve Bill of 2017” that was just recently reintroduced by Senator Rand Paul. As many reading this already know, the level of theft and corruption that the Federal Reserve has been involved in will bring the global elite to their knees when exposed. If audited correctly and fairly, exposure of the Federal Reserve (also another private registered corporation) would likely also lead to many well known names and public figures being arrested.
Regardless of one’s political party or position, if any, these three bills must be supported and discussed on a mass scale. What is also important to remember is that if any one of these three are passed, it is extremely likely to trigger a domino effect that will expose the global elite and reveal many once unbelievable truths.
For months we’ve warned that declining used car prices could spell disaster for subprime auto securitizations (see “Slumping Used Car Prices Spell Disaster For Subprime Auto Securitizations“). While it’s always difficult to predict the exact timing of when bubbles will burst, a combination of record-high lease returns in 2017 and 2018, combined with rising interest rates could imply that the auto bubble is on the precipice.
As Bloombergrecently pointed out, strong used car pricing is a critical component required to prop up the overall auto market. While American’s love their brand new cars, if used car prices become too soft then substitution can hurt new car sales. Add to that the impact of falling residual values on the finance arms of the auto OEMs and you have all the ingredients required for an auto market meltdown.
A glut of used vehicles has started to depress prices. That trend will intensify as Americans will return 3.36 million leased cars and trucks this year, another jump after a 33 percent surge in 2016, according to J.D. Power. The fallout has already begun, with Ford Motor Co. shaving $300 million from its financial-services arm’s profit forecast for this year.
“Ford is the canary in the coal mine,” said Maryann Keller, a former Wall Street analyst who’s now an auto industry consultant in Stamford, Connecticut.
This drag may be hitting the rest of the industry, too. A National Automobile Dealers Association index of used-vehicle prices declined each of the last six months of last year. If used values weaken more than anticipated, it can lead to losses across the industry, hitting carmakers, auto lenders and rental companies.
Unfortunately, the volume of lease returns is only expected to grow even more in 2018 with returns expected to approach 4mm units.
As J.D. Power points out in it’s most recent “NADA Used Car Guide Industry Update,” the flood of lease returns is driving used car prices lower.
Of course, how we got here is fairly obvious. The majority of Americans buy cars based on one factor: monthly payment. And when it comes to managing your monthly payment to the lowest level possible, leasing is the way to go. Per the Bank Rate calculator below, buying a $30,000 car comes with a monthly payment of around $600 while leasing the same vehicle might only cost $420 per month.
Of course, why buy a $30,000 Ford for a $600 monthly payment when you could lease a $40,000 BMW for $560? You can afford it so long as you can cover the monthly payment, right?
Not surprisingly, these dynamics have caused lease share of U.S. vehicles to skyrocket in the wake of the “great recession” as people seek to maintain their excessive lifestyles on smaller budgets.
Of course, the problem is that leased vehicles get returned to their originating lenders every 3 years for brand new leases…we wouldn’t want anyone driving around in a 5-year-old clunker now would we? But, as we all know, vehicles have useful lives of 15-20 years. Therefore, it doesn’t take too many excessive lease cycles to flood the market with used supply and bring the whole ponzi crashing down.
The world changed the night of November 8th when Donald Trump rode a wave of populist anger to become the president elect of the United States of America. Many readers of our investor letters know that Trump’s victory was not a surprise to Artemis… as I observed with fascination how many of friends and family from my birth state of Michigan, most of whom voted for Obama the last two elections, reluctantly admitted in private they were supporting Trump. I cautioned, both in writing and during a speaking engagement at the EQDerivatives Conference in May, that the market was dramatically underestimating the probability of a Trump victory given socio-economic factors and age demographics in swing states like Michigan and Florida. What the consensus failed to see is that the election was not between a Democrat and Republican, but rather a Globalist and a Populist. America wanted a populist of one vintage or the other. The Democratic party didn’t lose the election in November, but in the summer, when they suppressed their alternative populist candidate in favor of an oligarch. This is just the beginning – I’ll double down this a passage from my June 2016 Letter to Investors.
What Trump Means for Volatility Trading
Trump is a boost to volatility traders (but not traditional hedging or tail risk) because of his inherent unpredictability. Never before in history has a president been so able and willing to shift a policy debate with a tweet. In a world where we have gotten used to parsing Fed statements for methodically planned hints on policy shifts, Trump is a protectionist bull in a china shop. Trump will keep the price of uncertainty high, and high uncertainty is very good for the business of dynamic volatility trading, but oddly poses a challenge for traditional hedging and tail risk funds.
Uncertainty and volatility are not the same thing. 2016 was a year of low volatility but historically high uncertainty. For example, although the VIX index averaged only 15.82 in 2016 (36th percentile of observations) investor hedging drove the expectation of vol to historic highs as measured by skew, implied volatility premium, and volatility forward premium.
Traditional hedging and tail risk will struggle in an environment where markets remain calm and the cost of uncertainty remains high. Dynamic volatility traders can perform because we can recycle higher priced uncertainty to achieve a better return profile on long optionality. For example, this year Artemis found value by recycling overpriced skew and term premium into volatility-of-volatility and vol-of-vol-convexity.
Trump is the start of Global Regime Change
Trump is the first “populist” US president since Andrew Jackson in 1829 and takes office with a mandate to reverse the course of globalization. Denial is not a strategy and it’s time to face the reality that is coming… the good, the bad, and the ugly. First off, stop underestimating this man – you don’t become leader of the free world through stupidity and luck. The rants and twitter storms are part of a strategy of media control and distraction. Trump knows that if you can’t win, then you change the rules of the game – this is what he has already done with American politics – and what he is about to do to the entire Post-Bretton Woods World Order. If you really want to know a person, watch what they do, and not what they say… or what they tweet.
Trump’s business career was largely comprised of three core strategies 1) Leverage 2) Restructure 3) Brand… in that order. Throughout the late 1970s and 1980s Trump rode a generational decline in interest rates and debt binge to purchase a range of high profile real estate projects including the Grand Hyatt (1978). Trump Tower (1983), the Plaza Hotel (1988) and the Taj Mahal (1988). In the 1990s he went through a total of 6 bankruptcies due to over-leveraged hotel and casino businesses in Atlantic City and New York. In the 2000s he pivoted to move away from debt-driven property investments to building a global brand through the “Apprentice” TV show. Trump will run the country as he ran his businesses…. He will lever, and lever, and lever, and lever… and lever… and then restructure his way to success, or whatever success is defined as by the broadest measure of popularity at any given time. Trumponomics, if it delivers, will be a supply side free for all: massive tax cuts, deficit spending to create jobs, financial and energy deregulation, business creation, and trade protectionism all driving inflation. More importantly, Trump sees bankruptcy as a tool and not an obligation and will have no problem pushing the US to the limits of debt expansion.
“I do play with bankruptcy laws, they’re very good to me!” he once said. Trump may be willing to bring the US to the brink of default if it produces middle class jobs and popularity, and what he understands is that nobody can stop him, not Europe, not China. In a Trump mindset, the US national debt and deficits, or prior commitments (e.g. NATO), are not to be taken seriously as long as we hold all the cards… namely the biggest military in the world, energy independence, world reserve currency, and the world’s largest buyer of consumer goods. He is dangerously right, these geo-political solvency tools are far more powerful than the bankruptcy laws he used to protect his casino assets… the US is just another, bigger, badder, more bankrupt casino with air craft carriers. The media doesn’t seem to understand that Trump’s overtures to Russia and Taiwan are not diplomatic gaffes but rather forms of economic leverage. He is reminding Europe that NATO is nothing without the US, and reminding China that creditor nations lose trade wars. As a negotiating tactic, it may work … or may drive the world to a hot war… or both.
Like it or not — the old rules are gone. Diplomacy has been replaced by Twitter, and the unexpected is now to be expected. Trump’s world is a zero-sum game – and this means a shock doctrine of US centric re-positioning in trade in a dramatic change from the post-World War II order. The US has the largest military, the best geography, best technology innovation, the largest economy, best demographics in the developed world, and shale-driven energy independence to boot.
Trump won the election by funneling the frustrations of the marginalized white middle class voter humiliated after three decades of wage stagnation… he is the “super-ego” of the American Middle Class… and Trump will restructure the global order to make that voter happy if that is what it takes to get him re-elected.
Trump’s biggest and newest brand is the U.S.A., and he will use nationalism and every publicity stunt possible to create spectacles of economic and military success.
All bets are off, and that is very good for volatility… but potentially very turbulent for the world.
The Trump presidency will mark the reversal of the Post-Bretton Woods World Order ending a multi-decade regime of reflexive globalism. Ever since the 1970s the world been dominated by a self-reinforcing arrangement between Developed-Debtor and Emerging-Creditor nations driving generational trends in currencies, commodities, interest rates, and stocks (see chart). The US provides the largest consumer base in the world, military protection of global trade routes, developed financial markets, and willingness to take on debt — and the developed world produces cheap goods and in turn buys debt and dollars reinforcing the monetary-military reflexivity. Asset prices rise, debt expands, commodities rise, developed world inflation stays tame, and interest rates drop. The net effect is that the US exports its middle class and inflation abroad and the emerging world absorbs that inflation creating a new consumer class and social stability for authoritarian regimes (China). The financiers, technologists, and emerging world industrialists get richer and richer, while the developed world middle class is marginalized.
Trump marks a populist rejection of this global arrangement, which is going to send the entire world order down a very unpredictable path. Do not underestimate the probability that Trump will not serve out his full term – you do not threaten a multi-decade system empowering a transnational class of global elites without a bloody fight. The rally in the USD is more than just trade protectionism, it is about security and capital flight in anticipation of the new world order. For the US, Trump may be good in the short term but drive stagflation in the long term. For Europe and China, he will be a disaster. Volatility will be forthcoming, but it will be worse internationally than in the US. Markets are dramatically underpricing the three-year forward probability of a European Union breakup, and China’s debt bubble collapse, both of which have been probabilistically amplified by the Trump victory. For evidence of the later consider the current USD funding crisis that is causing inter-bank lending to spike in China, stealth devaluation of the RMB, and surges in Bitcoin. History serves as a guide to periods whereby globalism turned into isolationism, namely the 1910s and 1930s… and the lessons we can apply from those eras to today are further financial crises and higher probabilities of armed conflict between Russia vs. Europe, Iran vs. Saudi Arabia, and China vs. Japan in the next decade. Fourth turnings do not happen quietly.
The Trump promise of fiscal stimulus, de-regulation, and trade barriers has sent the USD soaring, the stock market higher, market sentiment to all-time highs, and nominal yields back to their highest levels in three years. All-in-all the rally appears a little overdone. It’s eerily similar to the rally that occurred after Reagan was elected in 1980, but the comparison should stop right there. In 1980 the S&P 500 index sported a PE ratio of 9x compared to 21x today, the 10yr UST yield was over 1100 basis points higher at 13.56%, US Debt to GDP was at 30% versus 105% today (not including off balance sheet liabilities and social security) and the top marginal tax rate was 70% vs. 39.6% today. The idea that Trump’s election somehow changes world demographics and deflation overnight, is about as naive as giving Obama the Nobel Peace Prize in 2009 for his role in ushering in a new era of global peace.
When looking at the effect of Trump, I don’t see a return to the 1980s, but rather the late 1990s. The aftermath of the Trump election resulted in an unusual positive correlation between the USD, Yields, and the S&P 500 Index. The last time the USD, Stocks, and UST yields both rose and fell simultaneously was at the height of the dot-com era in 1997-1999 (2008-2009 also experienced periods where all fell). During the late-1990s all three assets rose and declined in concert as the market gyrated between irrationally exuberant growth and international crises (Asia and Russia Default). High volatility and a bull-market co-existed during this time as the VIX averaged 25 between 1997 and 1999 (compared to 15.8 in 2016) as the S&P 500 index rose +98%. If supply side stimulus and animal spirits released by Trump amplify the current bull-market and lead to inflation, expect the second order effects of his policies to cause violent bouts of international turbulence and drawdowns reminiscent of the Asia (1997) and Russia (1998) crises two decades ago. The extent which international turbulence causes significant US equity volatility will depend on contagion effects. For example, in 1998 it took several months for the effects of Russia’s sovereign default to spread, eventually threatening the US financial system via the contagion vehicle of Long Term Capital Management. Expect a similar pattern for a banking crash in China, EU breakup, or regional war.
In the late-1990s overvaluation was concentrated to one asset class with ample room for policy response. Today there are historically high valuations in equities and fixed income coupled with high sovereign debt, unprecedented central bank balance sheets, and poor world demographics. Low beta and high dividend index stocks are the new dot-coms. According to S&P Capital IQ, Russell 2000 index stocks carried a 62 percent valuation premium over non-index stocks in 2015, rising from just 12% in 2006. This time around it may not be possible to print our way out of the next crisis… so mechanisms are already being put in place to “freeze” the assets inside the system… essentially a global version of the Cyprus “Bail-in”… but that is a different story for a different investment letter.
Shortly after Donald Trump made good on one of his core campaign promises on Monday morning by signing an executive order formally withdrawing the U.S. from the Trans-Pacific Partnership free-trade deal, Trump told labor union leaders that he would renegotiate the North American Free Trade Agreement “at the appropriate time.”
The remarks came at the start of a meeting at the White House with leaders of construction, carpenters, plumbers and sheet metal unions, during which Trump pledged to stop trade deals that harmed American workers.
According to the White House, participants included North America’s Building Trades Unions President Sean McGarvey, Laborers’ International Union of North America President Terry O’Sullivan, SMART sheet metal workers’ union President Joseph Sellers, United Brotherhood of Carpenters President Doug McCarron and Mark McManus, president of the United Association that represents plumbers, pipefitters, welders and others. The union meeting also included several local union officials and follows a gathering of 12 chief executives of large companies at the White House to discuss revitalizing the U.S. manufacturing economy.
“We’re gonna get ’em working again, right?” says Pres Trump, hosting photo op with union leaders in the Oval.. “Great meeting,” he said. http://pic.twitter.com/aCq5ZLGpfC
“This is a group that I know well,” Trump said referring to the union bosses, adding “we’re going to put a lot of people back to work” and “stop the ridiculous trade deals.”
When Trump said the administration “just officially terminated TPP,” it prompted applause from the labor chiefs (and this time it certainly wasn’t by paid members of the studio audience), who later described their meeting with Trump as “incredible.”
Trump also added that he doesn’t blame former President Obama for decades of bad trade deals, which – at least mathematically – makes sense.
But even more notable, was the dramatic pivot by the US labor unions, historically stalwart democrat supporters, who have suddenly emerged as big supporters of Trump policies, and perhaps no one more so than AFL-CIO President Rich Trumka who said TPP withdrawal is “a good first step toward building trade policies that benefit workers.”
As a reminder, nearly all major unions endorsed Trump’s rival, Hillary Clinton, during the presidential election campaign: they now appear to be shifting their allegiance.
The following is a statement from Teamsters General President James P. Hoffa on President Donald Trump signing an executive order to formally withdraw the United States from the Trans Pacific Partnership.
“Today, President Trump made good on his campaign promise to withdraw the United States from the Trans-Pacific Partnership. With this decision, the president has taken the first step toward fixing 30 years of bad trade policies that have cost working Americans millions of good-paying jobs.
“The Teamsters Union has been on the frontline of the fight to stop destructive trade deals like the TPP, China PNTR, CAFTA and NAFTA for decades. Millions of working men and women saw their jobs leave the country as free trade policies undermined our manufacturing industry. We hope that President Trump’s meeting with Canadian Prime Minister Justin Trudeau and Mexican President Enrique Peña Nieto on Jan. 31 opens a real dialogue about fixing the flawed NAFTA.
“We take this development as a positive sign that President Trump will continue to fulfill his campaign promises in regard to trade policy reform and instruct the USTR to negotiate future agreements that protect American workers and industry.”
And with that statement, pundit attention will closely follow the Trump-Trumka relationship which promises to be one of the more interesting in US politics over the next few years. As Axios points out, “Trump and top advisers like Steve Bannon see an opportunity to destroy traditional political alliances. Their theory worked in the election: They peeled white working class voters (and many union households) away from the Democrats. Now, they believe that delivering major items for this constituency — watch also for a confrontation with Big Pharma — could further wreck the Democrats’ hold on organized labor.“