Amid a 20% crash in the peso and a collapse in government bonds, which pushed the implied risk of default above 80%, IMF delegates arrived in Argentina on Saturday and, as Bloomberg reports, immediately began meetings with policy makers, facing a deja vu choice from two decades ago: risk making the turmoil even worse by withholding a $5.3 billion installment due next month – or cough it up, and risk even more losses with the IMF bailout program on the verge of collapse.
“The IMF has put a lot in – not just money, but prestige,” said Hector Torres, a former executive director at the Fund who represented South American countries.
“The fact that the arrangement is not performing well right now is an embarrassment,” he said. And the September installment is “going to be a difficult call.”
Then earlier today, things got worse as Argentina bond spreads widened to the most in 14 years after opposition leader Alberto Fernandez ripped the debt-laden country’s accord with the International Monetary Fund. Fernandez said much of the IMF loan had been wasted on financing capital flight out of the country.
In a statement following a meeting with IMF officials, Fernandez said he agreed with the objectives of the IMF deal, but added that the IMF and the current government generated the current crisis and are now responsible for reversing the “social catastrophe.”
Argentina has struggled to rollover the debt in the wake of a stunning loss in a primary for the market-friendly government coalition, and now tonight, according to a statement from the finance ministry, Argentina seeks to re-profile $57 billion debt owned to private holders and the International Monetary Fund. Re-profile is a public-relations-friendly way of saying soft-default, but the ministry was quick to explain that there’s no haircut nor change to interest paid.
“It’s important to highlight that this is only an adjustment of maturities.”
The proposal is that Argentina will delay payments on $7 billion of short-term debt
Argentina will pay 15% of its debt at maturity
It will pay 25% of its debt three months after maturity
Final 60% of debt will be paid six months after maturity
Government will continue to pay interest on short-term debt
And will seek Congress authorization to launch a voluntary reprofiling of debt maturing between 2020 and 2023 under local legislation.
“The government is aiming to clear the outlook for the financial program in the short, medium and long-term horizon,” Economy Minister Hernan Lacunzasaid.
“This is due to short-term liquidity stresses and not due to problems with the solvency of the debt.”
Call it what you want, but foreign-currency reserves have plummeted more than $10 billion in the past month as policy makers sought to shore up the peso after the primary on Aug. 11.
Tens of thousands of people marched through the streets today to demand the government do more to mitigate the impact of the economic crisis in a country that has defaulted on its debt eight times since independence from Spain.
But, as we noted last week, while creditors will be hit, it will be the ordinary Argentina citizens that will be crushed: Ordinary Argentines also have traumatic memories of failed IMF programs. Many blame the Fund for the epic collapse of two decades ago, one reason why Macri’s decision to go to the IMF last year was so risky.
“I think it’s neutral to positive,” said Ezequiel Zambaglione, head of strategy at Balanz Capital Valores in Buenos Aires.
“In the worst case scenario, nobody accepts the offer and you are in the same situation as yesterday. And if they reach an agreement and are successful in the swap, you’ll have less funding needs for the next years.”
Finally, after all this, IMF staff are left to do the walk of shame back to Washington to analyze the debt operation announced by Argentine authorities today. According to a statement from IMF spokesperson Gerry Rice:
“Staff understands that the authorities have taken these important steps to address liquidity needs and safeguard reserves.”
“Staff will remain in close contact with the authorities in the period ahead and the Fund will continue to stand with Argentina during these challenging times.”
As we noted previously, Patrick Esteruelas, head of research at EMSO Asset Management in New York, warned “The IMF is in a serious pickle.”
“It reminds me of the saying: If you owe the bank $100, it’s your problem. If you owe the bank $100 million, it’s the bank’s problem.”
We wonder how the Europeans feel now about their new hire as head of The ECB?
But then again, we all know who is on the hook for these losses…
The good ol’ US taxpayer!
via ZeroHedge News https://ift.tt/34bD0of Tyler Durden
Economists are stating that the next economic crisis will be fueled by Americans’ obsession with and overburdening of themselves with debt. While a staggering number of Americans live paycheck to paycheck with little savings, they also owe massive amounts of money that many will never be able to pay back.
The only saving grace for many American households is that artificially low interest rates have reduced the average debt service levels,according to a report by Seeking Alpha. Americans have been tapped out for a while now, and with many increasing their debt load as opposed to reducing it, a debt crisis could be on the horizon.
While the American consumer won’t be solely to blame when the entire economy comes crashing down, many are doing their part to make it overly difficult when it does. The next collapse will be much worse than the Great Recession of a decade ago, as it will be caused by a combination of household and corporate debt combined with underfunded pensions, according to Real Investment Advice.
Americans have come to believe that they are entitled to “the American dream” and many go deeply into debt to accomplish their version of that utopian ideal. The idea of “maintaining a certain standard of living“ has become a foundation in our society today.
Americans, in general, have come to believe they are “entitled“ to a certain type of house, car, and general lifestyle which includes NOT just the basic necessities of living such as food, running water, and electricity, but also the latest mobile phone, computer, and high-speed internet connection –Seeking Alpha
This entitlement is there whether the income to provide it is there or not. American consumers are not funding their lifestyles with their income, rather with debt. Americans hola a record amount of debt, which totals roughly $1 trillion more than it did in 2008. While Americans are piling on debt, the cost of living has gone up while the purchasing power of the dollar is continuing downward thanks to money printing schemes and the national debt.
“In fact, despite some ups and downs over the past several decades, today’s real average wage (that is, the wage after accounting for inflation) has about the same purchasing power it did 40 years ago. And what wage gains there have been have mostly flowed to the highest-paid tier of workers.” –Pew Research
The data shows that debt is a huge problem in this economy, which is already a debt-based economy and built to fail. The other point far too many don’t want to admit is that Americans would have a lot more money to fuel the economy if the government stopped stealing a substantial amount of their income before they are even paid.
The next “crisis,” will be the “great reset” which will also make it the “last crisis.”
via ZeroHedge News https://ift.tt/2HwHc85 Tyler Durden
Former government officials have been receiving strange messages over LinkedIn from Chinese operatives offering “well paid” opportunities to help out Beijing and gain “great access to the Chinese system” for research.
According to the New York Times, it’s all part of a sophisticated network to recruit foreign spies.
A former Danish Foreign Ministry official got LinkedIn messages from someone appearing to be a woman at a Chinese headhunting firm wanting to meet in Beijing. Three middle-aged men showed up instead and said they could help the former official gain “great access to the Chinese system” for research.
A former Obama White House official and career diplomat was befriended on LinkedIn by a person who claimed to be a research fellow at the California Institute of Technology, with a profile page showing connections to White House aides and ambassadors. No such fellow exists. –New York Times
According to Western counterintelligence officials – perhaps even the same ones who conducted espionage on the 2016 Trump campaign – foreign agents are exploiting social media – using LinkedIn as “prime hunting ground.” Warnings have been issued by Britain, German, France and the United States abut foreign agents reaching out to users on the site.
One former government official reported that someone called Robinson Zhang contacted him over LinkedIn. Zhang identified as a “PR Manager” for a company called R&C Capital, while his profile shows the Hong Kong skyline. R&C is listed as “an international consulting company based in Hong Kong,” specializing in “global investment, geopolitical issues, public policy, etc.”
“I’m quite impressed by your CV and think you may be right for some opportunities, which are all well paid,” Zhang wrote the former official – which seemed odd to him.
The words struck him as strange, the former official said, so he asked Mr. Zhang for a website. Mr. Zhang directed him to a home page with an image of the Eiffel Tower but little information about R&C Capital. It appeared to be “something he made up on the fly,” the former official said. (The New York Times viewed the site, which was deleted sometime after The Times emailed the company for an interview request.)
Mr. Zhang repeatedly indicated that his company could pay for a trip to China. The former official asked multiple times for more detail on the company but did not get any substantive responses. –New York Times
The LinkedIn account of a man calling himself Robinson Zhang, who said he worked for R&C Capital, “an international consulting company based in Hong Kong” that specialized in “global investment, geopolitical issues, public policy, etc.”
“We’ve seen China’s intelligence services doing this on a mass scale,” said National Counterintelligence and Security Center (NCSC) director William R. Evanina. NCSC tracks foreign spying and alerts companies to possible infiltration, according to the Times. “Instead of dispatching spies to the U.S. to recruit a single target, it’s more efficient to sit behind a computer in China and send out friend requests to thousands of targets using fake profiles.”
The use of social media by Chinese government operatives for what American officials and executives call nefarious purposes has drawn heightened scrutiny in recent weeks. Facebook, Twitter and YouTube said they deleted accounts that had spread disinformation about the Hong Kong pro-democracy protests. Twitter alone said it removed nearly 1,000 accounts.
It was the first time Facebook and Twitter had taken down accounts linked to disinformation from China. Many governments have employed similar playbooks to sow disinformation since Russia used the tactic to great effect in 2015 and 2016.
LinkedIn, owned by Microsoft, is both another vehicle for potential disinformation and, more important, an ideal one for espionage recruitment, American officials say. –New York Times
Former government officials, meanwhile, are making it really easy for China to identify who to go after – as many ex-feds will list their security clearances on LinkedIn in order to boost their job prospects.
Interestingly, LinkedIn is the only major American social media platform not blocked by Beijing due to the fact that they have agreed to censor posts.
“The Chinese want to build these options with political, academic and business elites,” said former Danish Foreign Ministry official Jonas Parello-Plesner, who reported an apparent Chinese recruiting attempt which began over LinkedIn. “A lot of this thrives in the gray zone or the spectrum between influence-seeking and interference or classical espionage.” Parello-Plesner noted that people who have just parted ways with the government are ‘especially vulnerable’ because they are actively searching for jobs.
According to LinkedIn spokeswoman Nicole Leverich, the company has been proactive in identifying and removing fake and dubious accounts – acting on information from a variety of sources, including government agencies according to the Times.
“We enforce our policies, which are very clear: The creation of a fake account or fraudulent activity with an intent to mislead or lie to our members is a violation of our terms of service,” said Leverich.
In multiple recent cases, LinkedIn proved to be an effective recruiting tool. A former employee of the C.I.A. and Defense Intelligence Agency, Kevin Patrick Mallory, was sentenced in May to 20 years in prison for spying for China. The relationship began after he replied in February 2017 to a LinkedIn message from a Chinese intelligence agent posing as a think tank representative,the F.B.I. said.
The Justice Department last October charged a Chinese intelligence agent, Yanjun Xu, with economic espionage after he recruited a GE Aviation engineer in a relationship that began on LinkedIn, according to the indictment.
Mr. Evanina, the counterintelligence chief, told Reuters last yearthat Chinese agents were contacting thousands of people at a time on LinkedIn. “It’s the ultimate playground for collection,” he said. –New York Times
“Foreign intelligence services are looking for anyone with access to the information they want, whether classified or unclassified, including corporate trade secrets, intellectual property and other research,” said Evanina.
Parello-Plesner, the Danish official, was contacted in 2011 by someone using the name Grace Woo. Woo said she worked for a headhunting company in Hangzhou, China called DRHR. When she discovered that Parello-Plesner would be in Beijing in 2012, she suggested a meeting in Hangzhou – asking for an image of his passport in order to make travel arrangements which he declined.
He did, however, agree to meet at the St. Regis Hotel in Beijing. While Woo never showed up, a young man claiming to be from DRHR led the former official to a conference room where ‘three middle-aged men welcomed him,’ and explained they were from a government research organization. They had no business cards.
“I thought, ‘This meeting is very dodgy,” said Parello-Plesner, who added that the men said they could fund his research if he worked with them.
Instead, Parello-Plesner reported the contact to British officials after he returned to his home in London.
Jonas Parello-Plesner, a former Danish Foreign Ministry official, reported an apparent recruiting attempt by the Chinese that began over LinkedIn.CreditCreditCarsten Snejbjerg for The New York Times
“If I were LinkedIn, I would proactively do my homework now,” adding “This is just the tip of the iceberg.”
DRHR was one of three companies German domestic intelligence officials singled out in December 2017 as front organizations for Chinese agents. Those officials concluded that Chinese agents had used LinkedIn to try to contact 10,000 Germans, and LinkedIn shut down some accounts, including those of DRHR and Ms. Woo.
Last October, French intelligence agencies told the government that Chinese agents had used social networks — LinkedIn in particular — to try to contact 4,000 French individuals. Targets included government employees, scientists and company executives, according to Le Figaro, the French newspaper. –New York Times
So remember former Western officials, beware Chinese LinkedIn users bearing gifts.
via ZeroHedge News https://ift.tt/2MH2gNm Tyler Durden
The Australian Broadcasting Corporation, our government-funded media outlet, has published an article titled “Australian expat living in Hong Kong throws off business suit to join protest movement”. The entire story is in the headline: some random guy, who ABC keeps anonymous but for the name “Daniel”, has joined the protests in Hong Kong. That’s it. That’s the whole entire bombshell newsworthy news story.
“In Australia we have proper democracy but in Hong Kong, democracy is being slowly eroded away and I’ll try to do whatever I can to try and help the cause,” the anonymous guy told ABC.
This sort of enthusiastic empty non-story cheerleading is typical for western media coverage of the Hong Kong protests so far, while these same media outlets consistently ignore or downplay protests against the government of France, Israel, Honduras, India, Indonesia and any other region that happens to fall within the US-centralized power alliance. It’s an amazingly reliable pattern: the entire western political/media class finds protests and uprisings endlessly fascinating when they are in opposition to governments which haven’t yet been absorbed into the imperial blob like China, Russia, Iran, Venezuela, Syria, pre-collapse Libya, or then-Moscow-aligned Ukraine, but any protests or uprisings within that empire are ignored at best or demonized at worst.
If dissidents in the United States began donning yellow vests and holding aggressive demonstrations in the current media environment, you could safely bet your bottom dollar that they would be ignored for as long as possible and then smeared as fascists, antisemites and/or Russian pawns thereafter. This would happen with absolute certainty.
Corporate media’s interest in foreign protests dovetails perfectly with State Department & Corporate America’s agenda. Protests against rival regimes get amplified; protests against US-friendly regimes get blackout. https://t.co/m2iouAjS8G
This very reliable trend in the western media is very interesting, because it also happens to be the known position of the US State Department.
In 2017 a memo was leaked to Politico in which the sniveling John Bolton lackey Brian Hook explained to DC neophyte Rex Tillerson how to perform his job as Secretary of State with regard to human rights violations. Hook explained that the US government must downplay and ignore the human rights violations of US allies like Saudi Arabia, Egypt and the Philippines while aggressively targeting unabsorbed governments like China, Russia, Iran and North Korea for any allegations of human rights violations on their part.
“In the case of US allies such as Egypt, Saudi Arabia, and the Philippines, the Administration is fully justified in emphasizing good relations for a variety of important reasons, including counter-terrorism, and in honestly facing up to the difficult tradeoffs with regard to human rights,” Hook explained in the memo.
“One useful guideline for a realistic and successful foreign policy is that allies should be treated differently — and better — than adversaries,” Hook wrote. “Otherwise, we end up with more adversaries, and fewer allies. The classic dilemma of balancing ideals and interests is with regard to America’s allies. In relation to our competitors, there is far less of a dilemma. We do not look to bolster America’s adversaries overseas; we look to pressure, compete with, and outmaneuver them. For this reason, we should consider human rights as an important issue in regard to US relations with China, Russia, North Korea, and Iran.”
This State Department memo is really all you need to understand what’s going on whenever there’s any kind of uprising or conflict in a foreign nation. Hell, it’s almost all you need to understand the dynamics of empire in general. And, combined with the consistent pattern we’ve seen in coverage of protests and uprisings against empire-absorbed governments versus unabsorbed ones, it certainly tells you all you need to know about the state of the western media.
In theory the US Department of State was meant to serve as a counterpart to what was then called the Department of War (later falsely re-titled the “Department of Defense”). In theory the State Department was meant to specialize in peace and diplomacy in the same way the War Department specialized in war. In practice the warmongers just got two war departments.
Today: Hong Kong publisher and democracy advocate Jimmy Lai met National Security Adviser John Bolton in DC. After meetings with @SecPompeo and @VP, this is meant to send a signal to Beijing. Very unusual for a nongovt visitor to get that kind of access. pic.twitter.com/6rvqsGJzru
Understand this one basic concept and you can understand all the hot topic foreign policy issues of any given day: there is an alliance of nations, centralized around US military and economic power, which effectively functions as a single empire. This empire works tirelessly to either absorb unabsorbed governments into its blob, or at least to undermine and marginalize them so they can’t impede the empire’s growth. The goal of the empire is total global domination without causing a nuclear war and without the public noticing that they’re living in an empire. In this sense it’s essentially a silent, slow motion third world war.
I see some of my readers voicing confusion about the protests in Hong Kong, but if you understand the basic dynamic I just described you’ll see that this is really no different from the protests and uprisings we’ve seen in Venezuela, Iran, Syria, Libya and Ukraine: the western political/media class are backing an uprising which benefits the imperial blob and undermines an unabsorbed government. This doesn’t mean that the protesters don’t have grievances or that none of those grievances are legitimate, it just means that you’re being told to cheerlead for an agenda by empire narrative managers solely because your doing so benefits that empire.
So don’t. Refuse to be a pro bono CIA propagandist. This doesn’t mean you need to oppose the protesters in Hong Kong, Venezuela or anywhere else, it just means that the only people who benefit from westerners cheerleading a CIA-approved uprising against an unabsorbed government are your rulers, who work endlessly to manufacture support for pro-empire agendas.
The Great Propaganda War on China now turns on the “uprising” in Hong Kong. Forget that China is surrounded by 400 US bases, described in Washington as “the perfect noose”. This report from the excellent Grayzone investigates the illusions of Hong Kong.https://t.co/CPWIju42Li
People who don’t get this sometimes tell me that we should “support” the protesters in a given unabsorbed region, but they’re always very reluctant to say what they mean by “support”. Do they mean simply joining the western mass media in uncritically cheerleading for an uprising which benefits western power structures? Do they mean send them money? Weapons? An emotional thumbs-up? Prayers? Getting someone to say what they mean when they say we should “support” the Hong Kong protesters or whomever is like pulling teeth, because it would bring up a lot of cognitive dissonance to actually turn and examine what’s behind the impulse they’re following: narrative management. They’re promoting pro-empire narrative management, and nothing more. And they’re doing this because the empire narrative managers trained them to.
“Centrist” empire loyalists tend to ignore the protests in places like France while amplifying and cheerleading the protests in places like Hong Kong. Right-wing empire loyalists sometimes do it a little differently, actively conflating the Yellow Vests protests with protests in places like Hong Kong despite the very different forces that are at play in those two situations. But in both cases they’re effectively mirroring the same State Department posture that Brian Hook tried to educate into Rex Tillerson in 2017.
Don’t subject yourself to such indignities. If the political/media class is going to propagandize the masses into supporting the advancement of the agendas of the empire, at least make them do it without your help.
* * *
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The global gold industry is facing a “forgery crisis.”
Gold bars that are being fraudulently stamped with the logos of major refineries are being inserted into the global market to help launder or smuggle illegal gold, Reuters reports. The fakes, which are difficult to detect, have become an ideal way for narcotics dealers or warlords to move money.
Over the last three years, bars worth at least $50 million that were fraudulently stamped with Swiss refinery logos have been identified by all four of Switzerland’s leading gold refiners. They were also found in the physical gold vault of J.P. Morgan & Chase, one of the key banks at the heart of the market in gold bullion (and which, as we first reported back in 2013, is located just across the NY Fed’s own gold vault).
At least 1,000 of the bars have been found, at a standard size known as a kilobar. Each kilobar, about the size of a cell phone, is worth about $50,000 at today’s prices. It marks a small slice of the gold industry, which produces between 2 million and 2.5 million bars per year, but the forgeries are sophisticated, so many more may have gone undetected.
Michael Mesaric, CEO of refinery Valcambi said: “The latest fake bars … are highly professionally done. Maybe a couple of thousand have been found, but the likelihood is that there are way, way, way more still in circulation. And it still exists, and it still works.”
Fake gold bars, which are generally cheaper metal plated with gold, are relatively common in the industry and easy to detect. But these new types of counterfeit bars are more difficult to detect because the gold is real and has a very high purity, with only the markings faked.
Richard Hayes, chief executive of the Perth Mint in Australia said: “It’s a wonderful way of laundering conflict gold. The gold is genuine, but it’s not ethically sourced. They look completely genuine, they assay correctly, and they weigh correctly as well. The perfect appearance makes the bars highly effective. Because gold is completely fungible, you can bleed it into genuine production. It’s very, very hard to control.”
These fake branded bars are being used as a relatively new way to escape money laundering regulations.
The forgeries could pose a problem not only for international refiners, but also for financiers and regulators who are trying to curb the world of illegal bullion. To be sure, skyrocketing gold prices won’t help temper back the forgeries. Rising gold prices have, in the past, also triggered a boom in informal and illegal mining that began in the mid-2000s.
Without the stamp of a major refinery, this type of gold is forced into underground networks and sometimes has to be priced at a discount. By stamping these gold bars with the logos of major brands, metal that has been mined in places like Africa, Venezuela or North Korea can be easily slipped into the market and can be used to channel funds to criminals or sanctioned resumes.
As of now, it isn’t clear who’s making the bars, but executives and bankers both said that they think most of them originate in China, which happens to be the world’s largest gold producer and importer. The gold may have entered the market via dealers and trading houses in Hong Kong, Japan and Thailand. Once accepted by mainstream gold dealers, the gold quickly spreads into worldwide supply chains.
Word of these forged bars started to get around in the first half of 2017, when JP Morgan found out that its vaults contained at least two gold kilobars stamped with the same identification number.
JP Morgan declined to address questions from Reuters and instead said: “It’s our standard practice to immediately alert the appropriate authorities and refineries should we discover mismarked gold kilobars during routine checks and procedures. Fortunately, we have yet to have an incident resulting in a loss to the firm or a client.”
The Shanghai Gold Exchange, responsible for regulating the Chinese gold market stated that it has “established a thorough delivery and storage system. The process for gold (material) to enter the warehouse is strictly managed and in compliance with the regulations.”
The forged bars, when found, are returned to the refiner that sources them, and sometimes to authorities will impound them. Swiss customs said 655 forged bars were reported in 2017 and 2018 to local prosecutors in Ticino, an area bordering Italy.
The public prosecutor there confirmed that it had received three reports of gold bars with suspect serial numbers, but said that it couldn’t disclose more information. Executives said forged bars had also been reported in other countries.
Swiss bars are more susceptible to being pirated due to their global reach and recognition. Swiss refiners Valcambi, PAMP, Argor-Heraeus and Metalor, combined, process around 2,000-2,500 tons per year, which equates to about $100 billion in gold.
In parts of Asia, it’s not uncommon for gold to still be used for large purchases, like real estate. In China, almost all exports of gold have been banned as part of the country’s capital controls. This has caused people from the country to want to find new and creative ways to smuggle gold out of the country.
It is estimated that about 400 to 600 tons of gold are smuggled across the border to Hong Kong, from China, every year – most of it in kilobars.
Those who possess pirated bars, including jewelers, bankers and electronic firms, all face the risk of violating global laws and, of course, confiscation.
via ZeroHedge News https://ift.tt/2Zy6vNp Tyler Durden
Last week at a Bernie Sanders campaign stop, someone ask him a question that began with, “Yesterday, oligarch David Koch passed away…”
The Bolshevik crowd interrupted immediately with ebullient cheers, joyfully celebrating the death of a man they had never met and knew nothing about.
If you hadn’t heard, multi-billionaire David Koch died last week at the age of 79 after a prolonged battle with cancer.
Along with his brother Charles, David Koch was co-owner of Koch Industries, one of the largest private companies in the world.
Forbes magazine estimated his net worth at more than $40 billion, making him one of the wealthiest people on the planet.
That was Strike 1. Because we know how much Bolsheviks hate wealthy people.
Also, Koch Industries is primarily engaged in the oil business.
And that was Strike 2. The only thing Bolsheviks hate more than wealthy people are wealthy people who make their money from oil.
I suspect the Bernie Sanders crowd would have had less of a problem with David Koch if he had become wealthy from clubbing baby seals.
David Koch was also a heavy donor to conservative causes.
Although his politics could be described more as libertarian– he favored sensible spending and limited government, was pro for gay rights, in favor of ending the war on drugs, and against foreign intervention– the Bolsheviks labeled him as a Republican donor.
And that was strike #3. Bolsheviks hate when wealthy people spend their own money on issues they find important.
(It’s perfectly fine, of course, for Bolsheviks to spend other people’s money on causes and issues that fit with the Bolshevik agenda.)
And for those reasons, a crowd of bitter, angry, ignorant strangers cheered Koch’s death.
Elizabeth Warren also decided to take a shot at Koch, the day after he passed away. The crowd at her campaign rally booed the recently deceased.
All across social media, tolerant and enlightened Bolsheviks gloated over Koch’s death. Despite the fact that he gave over $1 billion to charity… all they knew was that he was rich, he made it from oil, and he donated to non-Bolshevik causes.
These people love to celebrate ‘diversity’, as long as that diversity doesn’t include intellectual or ideological diversity.
In response, one columnist remarked on Twitter, “I can’t wait until the people who celebrate the death of their political opponents are in charge of healthcare.”
I couldn’t agree more.
And this sort of behavior is a pretty stark warning for everyone, regardless of how you feel about socialized healthcare, the Koch brothers, or anything else in politics.
When it gets to the point that “leaders” preside over celebrating the death of their political opponents, it’s time to take notice.
It reminds me of “two-minutes hate” from 1984.
Each day, the citizens of Oceania are directed to ritualistically scream, snarl, and froth at the mouth toward whoever their leaders tell them to hate. They’ve never met these supposed enemies. They don’t know anything about them apart from what they have been told by Party officials.
But if the leadership says to despise someone, the people do so without any independent thinking to reach their own conclusions.
This is what our society is decaying into. If you have a different opinion, other people want you to die.
It’s not the first time in history that society has become so fractured, and unfortunately it won’t be the last.
Throughout history, every time society reaches this point, intelligent people who see the writing on the wall take steps to protect themselves and their families from this type of madness.
Maybe it all blows over and people come to their senses. Perhaps they realize that death, chaos, and hate are not the answer.
Maybe everyone mellows out.
It’s also possible that the vitriol becomes much worse. And if it does, you want to be ready.
That’s what a Plan B is all about– taking sensible steps to safeguard what you have worked your entire life to build. It means preserving your family’s way of life by doing things that make sense no matter what happens or doesn’t happen next.
We also talk a lot about gold and silver, both great hedges in times of uncertainty.
If you don’t have a Plan B, all your eggs are in one basket. And in a time where crowds gloat over the death of people with differing political opinions, that is a substantial risk to your freedom and prosperity.
In case you’re looking for some guidance about how to get started, take a look at our complimentary Perfect Plan B guide.
Federal agents on Wednesday raided the suburban Detroit-area home of United Auto Workers (UAW) union president Gary Jones amid a corruption investigation into kickbacks and embezzlement by union executives, according to KSL.com.
FBI spokeswoman Mara Schneider confirmed the search but declined further comment. TV stations aired video of agents outside Jones’ home. Agents also searched the Corona, California, home of former UAW President Dennis Williams and the union’s northern Michigan retreat.
Eight people have pleaded guilty in an investigation of union officials and Fiat Chrysler executives enriching themselves with money from a job training center in Detroit. The probe appeared to widen two weeks ago when a former UAW official was charged with accepting kickbacks from union vendors. Mike Grimes was associated with a UAW-General Motors training center. –KSL.com
The UAW responded to the raid in Canton Township, saying in a Wednesday statement “President Jones is determined to uncover and address any and all wrongdoing, wherever it might lead … There was absolutely no need for search warrants to be used by the government today.”
“The UAW has voluntarily responded to every request the government has made throughout the course of its investigation, produced literally hundreds of thousands of documents and other materials to the government, and most importantly, when wrongdoing has been discovered, we have taken strong action to address it,” the union added.
According to the report, UAW has faced “unflattering stories about senior leaders turning the UAW-Fiat Chrysler center into a personal piggy bank,” such as a $262,000 mortgage that union rep General Holiefield had paid off in 2014 after negotiating with Fiat Chrysler on behalf of the union. Holiefield died in 2015.
Holiefield’s replacement, Norwood Jewell, was just sentenced to 15 months in prison for listing $60,000 in meals and golf paid with UAW credit cards, along with an additional $40,000 in other purchases.
Fiat Chrysler’s former chief negotiator, Al Lacobelli, is serving a 5 1/2 year sentence and was ordered to pay $835,000.
“Profit-laden auto companies stand to benefit from media leaks, false assumptions and political grandstanding,” the UAW added in their statement. “The sole focus of president Jones and his team will be winning at the bargaining table for our members.”
via ZeroHedge News https://ift.tt/2LrLbnR Tyler Durden
The fallout from former New York Fed President William Dudley’s op-ed on President Donald Trump continued Wednesday with former Treasury Secretary Lawrence Summers saying the column “might be the least-responsible statement by a former financial official in decades.”
Adam Posen, the president of the Peterson Institute for International Economics, and a former central banker at the Bank of England, said Dudley’s column was “horribly mistaken.”
“It feeds conspiracy and it was totally irresponsible to talk that way,” he said. Fed officials will likely react by circling the wagons and become disciplined in their speeches, Posen said.
Minneapolis Fed President Neel Kashkari, in an interview with NPRprior to Dudley’s essay, said that when a central bank plays politics “it leads to really bad outcomes over the long run for the economy.”
I have been accused of TDS as well. The charge is laughable. I have been an anti-war, free-trade advocate forever. My blasts of Trump have generally been in those areas.
On the positive side, Trump made two good choices for the Supreme Court That’s something I highly doubt would have happened had Hillary won. And I also believe she is an even bigger warmonger than Trump.
Hillary was the “genius” behind the assassination of Muammar Al Gathafi with disastrous consequences for Libya. She supported a no fly zone over Syria which could have led to confrontation with Russia, and she had the backing of John McCain, another rabid warmonger.
Clueless Fed, Clueless Trump
Our Federal Reserve cannot “mentally” keep up with the competition – other countries. At the G-7 in France, all of the other Leaders were giddy about how low their Interest Costs have gone. Germany is actually “getting paid” to borrow money – ZERO INTEREST PLUS! No Clue Fed!
The last time the US was seriously considering issuing ultra-long dated bonds – those with a maturity of 50 and 100 years – was back in late 2016 and early 2017, when yields were near the record lows hit in recent days. As we reported back in November 2016, shortly after Steven Mnuchin was confirmed as US Treasury Secretary, the former Goldman banker proceeded to roil the bond market when he told CNBC he would look at extending the maturity of future Treasury issuance, hinting at 50 and 100 Year bonds, which promptly sent long-term US bond yields surging by the most since the turmoil following Trump’s election victory.
“I think interest rates are going to stay relatively low for the next couple of years.” Mnuchin told CNBC. “We’ll look at potentially extending the maturity of the debt, because eventually we are going to have higher interest rates, and that’s something that this country is going to need to deal with.” Ironically, with that statement, Mnuchin quickly sent yields spiking higher, although courtesy of foreign buyers these were promptly renormalized.
Asked if he would consider maturities of 50 or even 100 years, ultra-long issuance that has become increasingly popular in Europe in recent years as interest rates plunged to record lows as recently as July, Mnuchin said: “We’ll take a look at everything.”
Well, it’s that time again. As a reminder, two weeks ago, the Treasury’s Office of Debt Management announced it was again conducting a broad outreach to Wall Street to refresh its understanding of market appetite for a potential Treasury ultra-long bond, according to a statement Friday. Specifically, the US Treasury is once again looking at the market interest in 50- or 100-year bonds, although it has not yet reached any decision whether to issue such a product.
As noted above, the Treasury last conducted a similar outreach on this product in early 2017, and was seeking to update its “market intelligence” at a time when the Austrian 100Y bond is trading above 200 cents of par in what has emerged as unprecedented demand for ultra duration. The Treasury also said that this is part of an “ongoing and periodic review of potential products.”
As a further reminder, back in the May 2017 refunding announcement, the Treasury disclosed that it is studying the possibility of ultra-long bonds, with maturities greater than 30 years, although it eventually panned the idea due to no “strong or sustainable demand.”
This time may be different, however, because moments ago, with the 30Y Treasury yield dropping this morning as low as 1.907%, a new record low, Treasury Secretary Steven Mnuchin told Bloomberg in an interview that issuing ultra-long U.S. bonds is “under very serious consideration” in the Trump administration, which as Bloomberg notes could lead to a “historic revamp of the $16 trillion Treasuries market.”
“If the conditions are right, then I would anticipate we’ll take advantage of long-term borrowing and execute on that,” Mnuchin said Wednesday in a Bloomberg News interview in Washington. He said officials held a meeting earlier in the day to review the possibility.
Naturally, the issuance of bonds with an ultra long maturity would be a welcome option to an administration which is faced with a soaring budget deficit that’s headed to $1 trillion annually and quickly needs to find a cheap way to plug the debt hole, one which does not have to be address for decades. Meanwhile, pension funds – desperately starved for yield and positive returns – would enjoy a few extra points of returns amid falling yields.
Mnuchin said his renewed interest in long bonds was unrelated to the drop in yields on shorter-term U.S. debt, even as the yield on 30-year Treasuries plunged to a new record 1.90% on Wednesday.
Not surprisingly, the Bloomberg report sent yields on longer-dated Treasurys sharply higher, with the 30Y yield spiking by 4 bps…
… and steepening the 10s30s curve.
That said, the Treasury is far away from a determination on new 50 and 100Y paper:
“It would be premature for me to comment on what our conclusion is,” Mnuchin said, adding that the department is “actively revisiting it, and it is something that is under very serious consideration.”
And while the Treasury and Treasury Borrowing Advisory Committee shelved the idea when it last emerged for serious consideration in 2017, this time record-low interest rates and escalating demand for safe US paper may make this an opportune time for the Treasury to issue ultra-long debt, with Bloomberg noting that “some observers see a window for the U.S. to issue extremely long-term debt instruments, even though the idea has been met with a cool reception on Wall Street.”
As we first reported two weeks ago, whereas Mnuchin studied the issue when he first took office in 2017, the idea was put to rest following a thorough review with the TBAC, which concluded that “strong or sustainable demand” may be fickle for the paper. Specifically, while buyers may be enthusiastic when yields are high, in downturns, when the Federal Reserve is cutting rates, demand could well evaporate, pushing government borrowing costs higher across different maturities. Just last week, Germany suffered a technically failed 30 Year auction which for the first time priced at a negative yield – as demand was insufficient to fill out the €2BN offering size, the Bundesbank was forced to retain more than half of the total issue.
“The determination we made at the time was that there was definitely some interest in it but it was not necessarily at the size and scale that we thought made sense to pursue,” Mnuchin told Bloomberg on Wednesday. “Some time went by and I thought it made sense that we revisit this.”
Another reason why the Treasury may want to issue ultra-long term debt is that the US economy is headed for a recession, when appetite for duration soars. And a recession now appears inevitable after the 2s10s curved inverted earlier this month for the first time since the financial crisis. Such an inversion is seen as a virtually certain harbinger of an an economic recession in the next 18 months.
The move caught President Donald Trump’s attention, who on Aug. 14 tweeted about the “CRAZY INVERTED YIELD CURVE!” and blamed the Fed for any negative effects.
The Treasury secretary however poured cold water of the inverted yield curve’s predictive powers, telling Bloomberg that “there are people who think that the yield curve can predict a recession — I don’t believe that. The answer is: In environments when the market thinks that the Fed is going to lower short-term rates, and that’s built into the market expectation, people end up buying longer-term securities, and that’s what can lead to a flat or inverted yield curve. The market adjusts quicker than the Fed.”
What Mnuchin purposefully failed to say is that the market thinks the Fed is going to lower short-term rates precisely because it is convinced that the economy is headed for a recession, just as it was – correctly – during the past 7 inversions.
In fact, in the minutes released as part of the May 2 meeting, the TBAC was vocally against launching “Ultra-longs” at this moment saying “while an ultra-long is most likely to be demanded by those with longer-dated liabilities, the Committee does not see evidence of strong or sustainable demand for maturities beyond 30-years.”
The TBAC highlights the change in US TSY issuance patterns over the past three and a half decades, and notes that since 1980, the Treasury has made minimal changes to its issuance patterns: Introduced 2 new products (TIPS and FRNs); Permanently canceled 2 products (4y and 20y); Canceled and subsequently re-introduced 3 products (3y, 7y and 30y).
“The Treasury commands an issuance premium due to its regular and predictable issuance pattern: Regular and predictable means issuance happens in all interest rate environments”
The committee also notes that “Borrowers with Large Funding Programs Are Generally Less Opportunistic in their Approach to the Market”
The TBAC further “recommended that further work be done to study these demand dynamics to get a better sense of where an ultra-long bond might price, which could be above or below the longest maturity debt issuance based on the pricing of domestic ultra-long derivatives, ultra-long bonds abroad, and theoretical models.”
Instead of rushing to issuing 50 and 100-year paper, the TBAC suggested that “regular and predictable issuance policy should remain the central consideration to minimize Treasury’s funding cost over time.” It also suggested other ways that Treasury might tap potential demand from long-duration investors. As such it recommended that “Treasury consider issuing a zero coupon 50-year bond, and coupon maturities between 10- and 30-years, preferably the reintroduction of the 20-year.”
Furthermore, the TBAC noted that it does not expect “meaningful ultra-long supply”
And while the TBAC was pessimistic about demand for 50 Year paper, it explicitly recommended against issuing a 100-year bond due to “limited pension or insurance cash flows beyond 50-years and the preferable attributes of stripped 30-year bonds to meet a similar duration as a 100-year coupon bond.”
Here is the full breakdown of TBAC recommendations on ultra-long dated paper:
* * *
The TBAC presentation on Ultra long-Dated issuance is below (link)
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The House Judiciary Committee has decided to investigate Trump for suggesting that next year’s G-7 summit be held at the Trump Organization’s golf club in Doral.
In a statement released Wednesday afternoon, Nadler and Rep. Steve Cohen, the chairman of the Subcommittee on Civil Rights and Civil Liberties, claimed that the president’s financial interests were “clearly shaping decisions about official US government activities” that “this is precisely the type of risk that the Constitution’s Emoluments clauses were intended to prevent.”
Trump’s remarks about possibly holding next year’s summit at Doral were only the “latest in a troubling pattern of corruption and self-dealing by the President,” they said, adding that the mere suggestion of hosting the summit at Doral “implicates both the foreign and domestic Emoluments Clauses” because “it would entail both foreign and US government spending to benefit the president…the latter potentially including both federal and state expenditures.”
Moreover, the Doral “decision” reflects “perhaps the first publicly known instance in which foreign governments would be required to pay President Trump’s privately owned businesses” to conduct business with the US.
The committee is already investigating other instances of “public corruption” and “abuses of power” by the president.
Trump first raised the idea of hosting G-7 at Doral, a suburb of Miami, during a meeting with German Chancellor Angela Merkel on Monday, the last day of the G-7 in France. At the time, Trump said “we haven’t found anything that could even come close to competing with it, especially when you look at the location right next to the airport.” He also noted that the location is only a short helicopter ride from the airport for visiting world leaders.
The official White House twitter feed later tweeted a video clip of Trump making remarks about Doral with the tag line that Trump was announcing the location of the next summit, which is presumably what triggered the investigation.
Still, Trump and the White House haven’t officially confirmed that they’re holding the summit at Doral, and it’s certainly possible that this is just another example of Trump speaking off-the-cuff, as he often does.
But given Nadler’s well-known love of exercising his subpoenaing at every opportunity, we imagine the Judiciary Committee will seize the chance to launch a lengthy investigation that drags on for months, if not years.
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