Tag: finance

Authored by Wolf Richter via WolfStreet.com,

The average age of passenger cars and trucks on the road in the US ticked up again in 2019, to another record of 11.8 years, IHS Markit reported today.

When I entered the car business in 1985, the average age had just ticked up to 7.8 years, and the industry was fretting over it and thought the trend would have to reverse, and customers would soon come out of hiding and massively replace those old clunkers with new vehicles, and everyone would sell more and make more. But those industry hopes for a sustained reversal of the trend of the rising average age have been bitterly disappointed:

This rising average age is largely driven by vehicles lasting longer – an unintended consequence of relentless improvements in overall quality, forced upon automakers by finicky customers in an ultra-competitive market where automakers struggle to stay alive. To make it in the US, they have to constantly improve their products, and stragglers that can’t compete are left unceremoniously by the wayside. US consumers are brutal.

This unintended consequence of rising overall quality contributes to the dreadful industry problem: The US, despite constant population growth, is a horribly mature auto market.

In 1999, so 20 years ago, new vehicle sales reached a record of 16.9 million units. This record was broken in 2000, with 17.3 million units. Then sales tapered off. By 2007, they’d dropped to 16.1 million units. Then the Financial Crisis hit, GM and Chrysler went bankrupt, Ford almost did, and peak-to-trough, sales plunged 40% to 10.4 million units by 2009.

The recovery has been steep, and in 2015, finally the old record of the year 2000 was broken, but barely with 17.48 million units, and in 2016, the industry eked out another record of 17.55 million units. And that was it. Sales have fizzled since then. So far in 2019, the data indicates that sales are likely to fall below 17 million units, according to my own estimates, bringing the industry right back where it had been 20 years ago in 1999:

Yet, given the longer average age of the vehicles on the road across the entire fleet, even stagnating sales produce a rising number of vehicles in operation. So it’s not that Americans as a whole have fewer cars – far from it: They have more cars, and those cars are on average older.

The number of vehicles in operation (VIO) in 2019 rose by 5.9 million units from 2018, to a new record of 278.3 million vehicles, according to IHS Markit. In other words, during the 12-month period, about 17 million new vehicles were added to the national fleet; and about 11 million units were removed from the fleet, either by being sent to the salvage yard or by being exported to other countries.

What you see in the chart above is the future supply for the used vehicle market. Used vehicle sales will likely come in just under 40 million units this year – so about 2.3 times the sales volume of new vehicle sales.

The fact that the average age of the vehicles in operation is rising doesn’t mean that all people hang on to their cars longer. On the contrary.

Sure, we drive a car we bought new 12 years ago; it’s in great shape, looks good, the six-figure odometer reading is just a blip, and we’re going to hang on to it because there is no reason to get rid of it. We know other people on the same program. Millions of Americans do that.

But other people have two-year or three-year leases, and this is a booming business. More and more people lease. And when the lease ends, their old vehicle is returned to the leasing company, which owns the vehicle, and which then sells it at auction, where a dealer buys it and then sells it as a used vehicle to a retail customer. These vehicles are only two or three years old, and often in mint condition.

Then there is the huge fleet or rental cars of about 2.2 million vehicles that are turned over every couple of years or so to enter the used-vehicle market, much of it via auctions held around the country.

In addition, there are corporate and government fleets that get turned over at different intervals, and those units end up on the used vehicle market.

So the rising average age doesn’t mean that Americans drive the same vehicle for a longer period of time – though they can, and many do – but that there is a strong market and demand for good older vehicles, and people buy them and drive them for a few more years.

But it is an issue for automakers. They could sell a lot more vehicles – and I mean a whole bunch more – if their vehicles on average reached the end of their life after eight years. But our finicky consumers don’t go for this program anymore. Quality is one of the factors that decides whether an automaker is going to make it or whether it will die.

What’s left for automakers to do to increase revenues in this environment of two decades of stagnating unit sales? A three-pronged industry strategy has emerged: Shift customers to more expensive vehicles, such as from cars to trucks and SUVs; load the vehicles with more goodies each year, such as driving-assist features; and jack up the prices pure and simple.

And automakers have been doing it across the board, which has the effect that for many Americans, new vehicles have become too expensive, and they stopped buying them, which puts further downward pressure on unit sales. But Wall Street, which keeps pushing automakers to go further and further upscale – because that’s where the money is – hasn’t figured this out yet.

Here are six charts on the used-vehicle market, plus my “Chart of Carmageddon” for new vehicles. Read... Used-Car Wholesale Prices Surge, Retail Volume Drops. New Cars Sink Deeper into Carmageddon

via ZeroHedge News https://ift.tt/2XazMfV Tyler Durden

Just over a week ago, by Morgan Stanley, we concluded that if the bank is right, “the world is now in a recession.” As a reminder, last Friday we reported that the Morgan Stanley Business Conditions Index just suffered its biggest one month drop in history.

Predictably, this was sufficient ammo for Morgan Stanley’s doom and gloom equity strategist Michael Wilson to launch on what may be his most bearish tirade so far this year, and as the strategist writes, “data points and analyst sentiment are falling and we think PMIs and earnings revisions are next.” That’s just the beginning:

Decelerations and disappointments are mounting:

• Cass Freight Index
• Retailer earnings
• Durable goods orders
• Capital spending
• PMIs
• May payrolls
• Semiconductor inventories
• Oil demand
• Restaurant performance indices…

and our own Morgan Stanley Business Conditions Index (MSBCI). Looking at the MSBCI in particular, the headline metric showed the biggest one-month drop in its history going back to 2002 and very close to its lowest absolute reading since December 2008.

This index has a tight relationship with ISM new orders and analyst earnings revisions breadth. Our analysis shows downside risk to ISM new orders (25% y/y), S&P earnings revisions breadth (6-13%) and the S&P 500 y/y (8%) if historical links hold.

While we showed the MS BCI last week, here it is again in the context of PMI Headline and New Orders. As Wilson warns, “be prepared for a sharp fall in PMIs” as the MSBCI suggests the Mfg PMI New Orders component will fall to 40 over the next few months, which would be down approximately 25% on a y/y basis. Another way of putting it – if Morgan Stanley’s indicator is right, the world is already in a recession.

But it’s not just Morgan Stanley’s proprietary indicator that confirms a global contraction has begun.

As The Market Ear points out today, there are two other signals which are pretty much fail safe coincident recessionary indicators:

1. The Fed has never cut 100bp within a year in an easing cycle outside a recession.
2. The Fed has never started an easing cycle with a 50bp cut outside a recession.

These are notable, because as the first chart below shows, 4 rate cuts over the next 12 months are now effectively priced in.

Meanwhile, a 50bps cut, which almost all now expect will be announced in July, is indeed a traditional recessionary indicator.

What is fascinating is that while the bond market clearly agrees, with the 10Y yield back to 2.00%, equities continues to float, and levitate, in a world of their own, confident that Fed rate cuts will be more than sufficient to offset the economic slowdown that a recession will usher in.

Meanwhile, speaking of “surprise” 50 bps rate cuts, and the massive dislocation between the bond and equity markets which has resulted in another record divergence in the market’s “alligator jaws”…

… here is an anecdote from the Global Macro Investor and founder or Real Vision, Raoul Pal, which shows why any trader who correctly times the convergence between stocks and bonds, may just be able to retire afterwards.

From Raoul Pal’s twitter account on “the story of the greatest macro trade I’ve ever seen.”

Back in 2000, the macro backdrop was very similar to now and the  forward looking data was suggesting a recession with the bond market was pricing in around 75bps of cuts but sell side analysts would hear none of it. They were sure the good times would continue to roll. But the macro guys, many of whom had been forced to close shop in 1999/2000, knew that the first recession in 10 years was imminent.

On January 3rd 2001, with the US economy still growing at 1.4%, the Fed surprised with a 50bps cut when many people hadn’t even returned back to work from the  holidays.  But one ex-GS prop trader, now at one of the worlds most famous hedge funds, drove to his half empty office and went limit long December 2001 Eurodollar interest rate futures. His bet was that after a massive equity bull market, a tech bubble, Y2K inventory unwind and over confidence, the economy was likely to be very fragile and the Fed were going to have to massively cut rates.

You see it’s not rocket science. The Fed generally don’t cut once. And Greenspan LOVED low rates. So, though the markets were pricing in 75bps, this trader thought it was massively mispriced. After putting on the maximum position he could, he left the office and flew to his house in Mallorca to continue his vacation and stop himself trading.

His entire bet was one trade only.  Nothing else but the Dec 2001 Eurodollar futures. On Jan 31st the Fed cut again, another 50bps. This was a huge shock and the market quickly realised that the Fed were well behind the curve and the full downside of the extended business cycle lay ahead. The hero of our story was now up, what is technically known as a “shit ton” of money. He did nothing, just hung out at his house in Mallorca, where no brokers or other traders could talk him out of his massive conviction.

The Fed continued to cut and the economy began to tank as rates were in free fall. By June he was a few hundred basis points on side and with the stunning leverage offered by Eurodollars, his positions was ENORMOUS and he was now up “large” (technically more than a shit ton).  But over-positioning, & government and Fed jawboning caused a rather large correction (around 70bps if my memory serves me correctly). His boss, one of the most famous risk takers in history, flew to London and asked the trader to join him at office to talk about his trade. They met at their offices outside London and big boss explained that the trade had been amazing but he’d given a lot back therefore did he want to take profit or not. The trader, without blinking, said, I’d like to double up!

Big boss could tell the trader was in the groove, and increased his limits, in one of the best risk management calls I’ve ever seen. Our hero doubled his position flew back to Mallorca. So, by June, he had only traded twice; once to enter the trade and once to double it.

In November, the trader flew back to London, closed his position for an absolutely enormous profit and basically retired from the payout. Now, that is how to trade macro. When a set up is so perfect and so clear, you get one shot at the prize – The fabled “Career” trade. Another example would be Richard Rainwater’s enormous long trade in oil in 1999 from the $11 low. The perfect set up. The billion dollar trade. Soros had it in Sterling and PTJ in 1987 and 1990 (Japan).

What was so good about the Eurodollar trade is the trader understood that the Fed couldn’t cut once, or too little, or a bigger panic would ensue (I.e the Fed’s put isn’t it enough). Also, unlike equities or commodities, Eurodollars are relatively predictable if you know where rates are likely to head, as they are anchored to Fed funds, in essence ( unlike bonds too, I guess). Thus, it perfectly expressed the view.

I strongly believe we have the near exact same set up now, with the added kicker that if the dollar goes up, there is a gigantic tailwind to the trade, making it an extremely skewed risk reward. Maybe one of the best I’ve ever seen. This set up has been in place for 9 months now and is why I’m very long Eurodollar interest rate futures. Options were ultra cheap and the dollar hasn’t yet made its move. Vol is too low compared to the potential upside in these as we head to negative rates, if the dollar squeezes higher. This makes an asymmetric trade crazily asymmetric.

What’s even better is that at the start of Q4 2018, the market was record short Eurodollars, skewing it even further in its asymmetry.   But, all the action so far has preceded the first Fed cut. When the cuts start the odds are that they will be bigger and faster than expected and the real juice on the trade is still to be had, just like in 2001 because rates will go  negative and then they will force the long end down to zero. Maybe the greatest trade in the world is still to be made. This is why I love macro. Also, remember, before you @ me, time horizon matters. Mine is long as that where I think my edge is.

So for all those who – like Pal – believe that the tag team of Powell and Trump will send rates negative to deflect the now inevitable recession, unleashing the infamous Albert Edwards “ice age”, the “trade of a lifetime” is not to short stocks, which may just as easily keep rising if the Fed has decided to debase the dollar (see Weimar, Zimbabwe, Venezuela), but to simply go long ED futs and just wait for that retirement check to be cashed… or perhaps not cashed as at that time any cash deposits will likely result in an interest payment to the bank.

via ZeroHedge News https://ift.tt/2Nlk55Z Tyler Durden

Via AdventuresInCapitalism.com,

Longtime readers of this site know that I try to avoid making big stock market calls as I feel that I have no edge there. An overvalued market perched on shaky fundamentals can always become more overvalued. Besides, opinions are worth what you pay for them—which incidentally is free around here. I’d rather focus my energy on esoteric pockets of the world that are under-analyzed and likely to offer analytical edge to those who are willing to peel away at the onion. That said, recent data seems to imply that the US economy is slowing and the pace of decline is accelerating rapidly.

I find most US Government statistics to be on par with Tesla’s (TSLAQ – USA) financial statements (ie. mostly made up). Fortunately, there are other places to seek out reliable data. I like to look at railcar loadings and trucking volumes. You don’t have much of a modern economy without stuff moving around. I like to look at automobile purchases and new housing starts as the upstream supply chain is simply massive in these industries. I analyze credit statistics and delinquency data. All across the various data points, we see a slowdown. Will it accelerate? I don’t know, but we are ten years into this economic cycle—in other words, we’re sort of due for a recession. The bigger question is what will the Fed do? I suspect they will massively over-stimulate and make the situation worse. What will the market do as this all unfolds? Who the hell knows?

One part of me says that the stock market should decline as the economy slows. At the same time, history says that when governments print money, stock markets tend to explode higher. What if we are in a subdued version of a Weimar, Venezuela or Zimbabwe scenario where the stock market races ahead despite the economic situation? In many ways, guessing more than a few steps ahead is simply too hard. Besides, I want to buy good businesses at outstanding prices—not try and guess what the overall market will do. I simply have no edge there.

When the economy slows, the ego trade is always to short the market—either a collection of businesses or a broad-based index. I myself am occasionally guilty of the latter—until I ask myself what the hell I am doing? What if we go the Weimar route here? The losses are infinite!! I can buy longer dated index puts, but I don’t feel I have any special edge in guessing the timing of a market decline—even if implied volatility is rather affordable currently. So, what am I looking at for my book? I’m looking at “long-shorts.”

The rules of the jungle say that the most you can make on a short is 100%. The real money is made by being long. I always want to be long. In this case, I’m looking at businesses that do well when the overall economy isn’t well. For lack of a better term, I’m going to call these positions “long-shorts.” I’m the owner of a business that goes up exponentially if something bad happens.

What does a “long-short” look like?

One of my largest positions is a company named Altisource Portfolio Solutions (ASPS – USA). Its primary business is handling residential mortgage defaults. As you can imagine, that’s been a lonely place to be over the past few years and the share price reflects this fact. Meanwhile, the shares are quite cheap—even if there is no increase in their business. If housing defaults pick up, this has multi-bagger potential (more to come in a future article).

I also own natural gas producers. Thus far, I’ve been early, but I don’t think I’m wrong. An increasingly disproportionate share of natural gas comes from byproduct shale oil production along with unprofitable dry gas production. As credit shuts off to money losing producers, supply will decline at a time when demand is rapidly increasing—even if the US economy slows a bit. How will they fund new drilling during a credit crisis? With rapid decline curves; could gas go to some surprisingly high number? Those who survive the current low pricing regime could be huge winners.

I’m focusing on industries like shipping where a global recession should lead to a reduction in new vessel deliveries at a time when IMO 2020 should lead to an increase in vessel scrapping.

I’m looking at sectors like for-profit education that benefit from an increase in unemployed people seeking to upgrade their education.

I’m trying to think outside the box. Basically, I want my businesses to benefit from a slowdown or at least benefit from someone else’s credit getting cut. After a lot of expensive lessons over the years, I only invest in businesses without the near-term need for external financing. By definition, my businesses have better balance sheets than the rest of the sector.

I suspect we are entering a rough patch for the global economy. You cannot undo three decades of global supply-chain development and not expect a slow-down. Businesses can deal with almost any political situation—except uncertainty. I suspect that as the world pivots towards a cycle of nationalist strongmen, cross-border investment decisions will slow. With it, global growth will slow. Slowing growth perched atop historic debt levels could lead to surprising outcomes.

I have a whole lot of cash to deploy into a slowdown. Experience tells me that in a broad-market decline, all positions get hit and “long-shorts” only start to outperform as the immediate crisis begins to subside. If we crash upwards like Venezuela (the Fed is indeed talking about cutting interest rates at all-time market highs), my companies should still out-perform. I don’t know which way it breaks because the Fed is so unpredictable. I have to be ready for anything. Most likely, we break a bit to the downside, the Fed panics and we crash upwards. This isn’t a prediction but that’s been the pattern for the past few market declines. Meanwhile, each round of Fed stimulus seems to produce less real economic growth—just more bubble creation. Following this pattern, maybe the Fed won’t be able to re-start things as easily this time around?

I realize this article is more of a mental ramble than what I normally write. This is because the situation is unusually fluid. Central banks don’t normally stimulate at all time highs after a decade-long bull market. Global economic blocs don’t suddenly cut off other blocs. Economic statistics don’t normally collapse as rapidly as they currently are. It’s hard to say what happens next. Technological disruption and overseas asset impairments aren’t usually bullish developments.

For the past few years, I’ve been under-invested and somewhat tactical in the special situations I’ve gotten involved in. I have been unusually bearish and it has cost me some upside. Now, I’m actually looking to profit from this bearishness—the time has come to slip into “long-shorts.” Shorting the market is the risky man’s route as anything can happen. I want to think outside the box—there are untold ways to be invested in “long-shorts” that dramatically outperform because of what happens in our crazy world. The opportunities are only limited by your own vision of the future. There are a lot of ways to have multi-bagger upside potential right now—shorting ain’t it. As the news gets worse, don’t get suckered into shorting. It’s too risky with the Fed out there threatening to stimulate. Instead, seek out the “long-shorts.”

via ZeroHedge News https://ift.tt/2RHydES Tyler Durden

California gun owners have been rushing to buy bullets before a new background check law goes into effect statewide on Monday, the first of its kind in the nation.

“In the last two weeks I’ve been up about 300 percent,” one Sacramento ammunition store owner told Fox News, adding that people have been “bulking up because of these stupid new laws.” 

Enacted in 2016, Proposition 63 and SB 1235 require one of two types of background check when buying any type of ammunition for a firearm; a $1 “Standard Ammunition Eligibility Check” for anyone who has legally purchased a handgun in the state since 1990 (and whose CA Driver’s License or ID matches the address used at the time) which takes 2-3 minutes, or a more invasive $19 “Basic Ammunition Eligibility Check” that will take up to 10 days to complete.

Those with a valid “Certificate of Eligibility” (COE) issued by the DOJ will require a $1 fee. 

The instant background checks will reference information on file at the DOJ’s Automated Firearms System that automatically goes on file when a California resident buys a gun. 

A detailed overview of the law can be found here (via the California Rifle & Pistol Association / Michel & Associates). 

“Locking a door doesn’t stop a thief from breaking in, so putting another restriction on ammunition it’s not going to stop a crazy person or person with mental illness from getting ammunition or a firearm,” one LA-area gun store owner told Fox 11. 

There are currently 10 bills in pending in the State Legislature which would expand on the law – one of which would allow people to petition a court to disarm a resident deemed to be “at risk,” while another would extend restraining orders related to gun violence from one year to five years. 

A lawsuit has been filed against the state by opponents of the new laws, saying it violates their 2nd amendment rights. 

via ZeroHedge News https://ift.tt/2Xf6zVL Tyler Durden

Authored by Mike Shedlock via MishTalk,

China’s currency reserves ought to be increasing given its persistent trade surplus.

They aren’t… due to capital flight.

“China’s travel-account deficit began to increase sharply in 2014. = 80% of deficit in service trade” It is calc frm forex trade at banks in China, payments by credit cards and smartphones, ATMs by tourists going overseas and students studying abroad.”https://t.co/RvSRXadcqT pic.twitter.com/4LJShOEm3g

— Adam Tooze (@adam_tooze) June 23, 2019

Question of the Day?

While China’s surplus grew by $2 trillion from 2009 to 2018, its external assets rose by only $740 billion in the same period. What explains the $1.2 trillion difference? “Net errors & omissions” and disguised capital flight? One for @Brad_Setserhttps://t.co/RvSRXadcqT pic.twitter.com/imBDdPiBj6

— Adam Tooze (@adam_tooze) June 23, 2019

Brad Setser Explains

this is a relatively straightforward BoP question —

a) there is a bit of capital flight embedded in the current account (the overstated tourism balance)
b) errors and omissions (hot money, flight capital has been roughly equal to the surplus in the basic balance since 14)

1/x https://t.co/EFDqgoIQ9i

— Brad Setser (@Brad_Setser) June 23, 2019

This is a relatively straightforward BoP question —

a) there is a bit of capital flight embedded in the current account (the overstated tourism balance)

b) errors and omissions (hot money, flight capital has been roughly equal to the surplus in the basic balance since 14)

I have written about this in the past, but in the context of explaining why the equilibrium level of intervention by China has fallen (e.g. reserve growth no longer tracks the current account surplus)

In the preceding chart I subtracted errors from the basic balance, and compared it to my measure of the buildup of official assets — the difference is recorded private capital flows (in and out) — e.g. there was a modest net private inflow in 18.

Here is another way of cutting the data.  Cumulative reserve growth v the cumulative basic balance (CA surplus plus net FDI).  There is a bit of a gap, e.g. there has been some leakage.   But China also has ~ $1 trillion more in state assets than shows up in reserves.

Bottom line as far as I am concerned — China’s state (between the PBOC, SAFE and the big state banks) has ~ $5 trillion in assets (over $3 trillion as SAFE/ CIC, almost $2 trillion in bank assets), just under $1 trillion in liabilities

Chinese residents have a growing (but unrecorded) offshore asset position from the “flight capital” of the last five years (easily $1 trillion) — and as is well known FDI inside China tops Chinese FDI abroad.

Bottom line: there is capital flight, but it is covered out of the goods surplus– and the net foreign asset position of the Chinese state remains massive even if it isn’t growing as fast as before. I personally would not spin this as something all that alarming.

There is plenty to worry about in China: notably the domestic financial system’s fragilities and the ongoing inability of China to sustain its growth without rapid growth of credit and investment.   But I don’t really see a case for worrying about the BoP.

Full tweet thread here…

1.2 Trillion Disappears

Asian Review reports Quiet Capital Flight Dents China’s Sway as $1.2 Trillion ‘Disappears’

The IMF says China had $2.1 trillion in external net assets as of 2018 — the third-largest total after Japan’s $3.1 trillion and Germany’s $2.3 trillion, but well below its current-account surplus.

Normally, a current-account surplus moves in tandem with an increase or decrease in external net assets. But while China’s surplus grew by $2 trillion from 2009 to 2018, its external assets rose by only $740 billion in the same period.

The IMF says China had $2.1 trillion in external net assets as of 2018 — the third-largest total after Japan’s $3.1 trillion and Germany’s $2.3 trillion, but well below its current-account surplus.

Yu Yongding, an economist and former member of the People’s Bank of China monetary policy committee, offered a theory. If a Chinese company exports products worth $1 million to the U.S., it logs the amount as sales in trade with the U.S., according to Yu. But sometimes, only $500,000 ends up in the company’s bank account in China, while the other half remains abroad.

Yu said the accumulation of such money explains a portion of the $1.2 trillion. In China’s official statistics, a category called “net errors and omissions” covers such hazy transactions. For the 2009-2018 period, China recorded minus $1.1 trillion in this segment — suspiciously close to $1.2 trillion.

Net Errors and Omissions

Let’s label that correctly: Capital flight.

IMF Forecast

Trump Placated?

The IMF believes China’s net current account surplus will turn negative in 2022.

Setser does not see that yet and it’s easy to dismiss the IMF because the IMF is wrong far more often than right.

Yet, assume the IMF is correct. Does this placate Trump?

Not quite. It is highly likely that China’s surplus with the US simply moves elsewhere.

I discussed that idea two days ago in “Made in China” Soon to be Replaced by “Made in Taiwan”

Tariffs Won’t Work

In response, a friend of mine summed up things nicely: “The world has just changed too radically for tariffs to work like Trump expects. It’s like trying to fight World War III with muzzle loaded guns.“

If Trump puts tariffs on the entire world, few manufacturing jobs will return because everything is so automated. The only “success” Trump will see is turning the US into the highest cost producer.

Our Currency But Your Problem

This all goes back to Nixon who closed the gold window on August 15, 1971, ending redemption of dollars for gold. Nixon’s treasury secretary then famously stated “The dollar is our currency but your problem.”

Following Nixon’s “temporary” move, fiscal deficits exploded globally and the US bore the brunt of trade deficits.

Trade imbalances are now Trump’s pet peeve. But Tariffs cannot possibly fix the problem.

Trump is fighting a 1968 Vietnam-style “guns and butter war” (wanting both) with tools that cannot possibly work.

via ZeroHedge News https://ift.tt/2RHFi8C Tyler Durden

French President Emmanuel Macron arrived in Japan for the G-20 summit with a threat; include a reference to the 2015 Paris Climate Accord in the group’s final communique, or France won’t sign anything, according to Bloomberg. 

“If we are not able to get around a table and defend the climate, then France won’t go along with it,” he said. “It’s that simple.”

Then, his aides began to backpedal – with one suggesting that it was impossible to discuss hypotheticals, and another saying it wasn’t a threat – rather, Macron was simply indicating France’s priorities. 

European Council President Donald Tusk disagreed with Macron’s comments, saying in Friday statements to reporters that G20 leaders should instead help Japanese Prime Minister Shinzo Abe with a final declaration instead of threatening to boycott it. 

Hours later, Macron dialed back his position during a press conference with Abe, saying only that if France’s climate initiatives weren’t adopted, “We’ll have met for nothing.” 

By Friday, Macron had dialed it back even more, simply saying that climate would be a major issue at the G-20, absent any sort of threat. 

As Bloomberg notes, “Climate and bio-diversity have always been major issues for Macron — partly because the landmark 2015 Paris Accord was signed in the French capital — but they have taken on even greater importance after the French Green Party made major advances in May’s European parliamentary elections. Macron has calculated that voters favoring tougher action on the environment could be an important source of support.”

via ZeroHedge News https://ift.tt/2LpxcjJ Tyler Durden

The Supreme Court on Friday dealt a blow to Alabama pro-life advocates by declining to hear a case over a law which would ban the procedure with few exceptions. 

The decision to punt on the case means that lower court rulings striking down the recently passed law will stand, according to The Hill. 

Justice Clarence Thomas wrote in a concurring opinion that he agreed the court should not hear the case, but called it a “stark reminder that our abortion jurisprudence has spiraled out of control.” –The Hill

“Although this case does not present the opportunity to address our demonstrably erroneous ‘undue burden’ standard, we cannot continue blinking the reality of what this court has wrought,” wrote Thomas.

Developing…

via ZeroHedge News https://ift.tt/2ZVdu3k Tyler Durden

After on Wednesday Trump captured global headlines with colorful criticisms of the United States’ decades-old defense pact with Japan — saying that if the US is attacked, Japan “can watch on a Sony television” — the president met with Prime Minister Shinzo Abe on the sidelines of the Group of 20 leaders’ meeting.

Though during their Friday meeting Abe reportedly praised the strength of the military alliance, the proceeding had the following epic jab hanging over it from Trump’s Fox Business interview this week: 

“We have a treaty with Japan. If Japan is attacked we will fight World War III. We will go in and we will protect them and we will fight with our lives and with our treasure. But if we’re attacked, Japan doesn’t have to help us. They can watch it on a Sony television,” Trump said days ago. 

Despite that, the meeting was cordial enough, with Trump returning Abe’s positive remarks on the post-WWII treaty by thanking Japan for creating thousands of jobs in the US through its many American-based manufacturing plants, especially in the auto sector.

“The frequency of travels by top leaders of the two countries is proof of the strength of the Japan-U.S. alliance,” Abe had stated of his ally. 

“We just left Japan and now we’re back,” Trump joked in response. He noted that Friday’s talks would be centered on security and trade while thanking Japan for “sending many auto companies into Michigan and Ohio and Pennsylvania, North Carolina and a lot of our states,” according to the Japan Times. 

“I see they are building all over the United States,” Trump continued. “A lot of the great Japanese car companies, other Japanese companies also, but in particular the car companies. Magnificent plants. We haven’t had that, and we very much appreciate it.”

.@realDonaldTrump: If Japan is attacked we will fight World War III but “if we are attacked Japan doesn’t have to help us at all. They can watch it on the SONY television. The attack. So there is a little difference.” pic.twitter.com/q95ZuvRinE

— Satoshi Sugiyama (@SatoshiJournal) June 26, 2019

And the “bro-mance” is still going strong, apparently: 

For Abe, Trump may be a monster withtwo faces: a golf-loving buddy who can defend Japan from China and North Korea, and a potential rival who could suddenly release pent-up frustrations on sensitive trade and security issues.

Thus it doesn’t appear Tokyo is too concerned by Trump’s vented “frustrations” expressed during the “They can watch it on a Sony television” remarks. 

Following the meeting Japan’s Deputy Chief Cabinet Secretary Yasutoshi Nishimura noted Trump’s prior mocking remarks of the defense treaty weren’t raised during Friday’s summit meeting. 

“The two leaders agreed to further strengthen the unshakable Japan-U.S. alliance as they have done in the past,” Nishimura said. “There was no discussion of revising the Japan-U.S. security treaty at all,” he said.

via ZeroHedge News https://ift.tt/2xi8DgD Tyler Durden

Authored by Tim Donner via Liberty Nation,

But where are the clowns? Quick, send in the clowns … Don’t bother; they’re here.

Stephen Sondheim lyrics, Send in the Clowns

 

About this time, Donald Trump’s political advisors are likely begging the president to follow the time-tested truism first uttered by Napoleon: Never interfere with an enemy while he’s in the process of destroying himself. Not that Trump will listen.

Nevertheless, could the rogue’s gallery of 20 Democratic presidential candidates on display in the first primary debates over two nights in Miami this week have possibly been more craven? Have you ever witnessed such gross brown-nosing to an extreme fringe of the American electorate?  What lunatic idea will they come up with next? Wait, I’ve got it. To commemorate America’s immersion into the new unofficial language of the Democratic party unveiled in these debates, how about a bill to make Spanish the national language?

Unable to let the moment pass, and in honor of this historic plunge into the horrors of what a socialist America would look like, we at LibertyNation.com have decided to bestow some very special awards upon the debate participants.

Biggest Flop: Not a hard choice. Young Beto “don’t call me Robert Francis” O’Rourkehad millennials and progressives swooning after his near-miss against Ted Cruz in the 2018 Texas Senate race. But in the first debate, he looked distinctly not-ready-for-prime-time. He lacked any semblance of energy, appearing drawn, pale and unshaven, and spouting a string of hackneyed cliches. And he got his butt handed to him by the overcaffeinated open-borders radical, Julian Castro, in an argument over immigration policy.

Most Inexplicable Statement: If we had to deconstruct every inexplicable policy statement made over two nights, it would take hours on end. Instead, we offer this: When asked what would be his very first priority when he assumes the presidency on January 20, 2021, Joe Biden replied, “to defeat Donald Trump.” Uh, excuse me, Mr. Vice President, but, um, you would have already accomplished that by then, because … oh, never mind.

Biggest Surprise (group award): The second debate kicked off with Bernie Sanders promising to raise taxes to pay for his $30+ trillion, government-controlled Medicare-for-all program (while claiming, of course, that it will be offset by lower health costs). This set into motion a succession of candidates promising to do the same. For time immemorial, it was understood that you should never promise to raise taxes, for it would amount to certain defeat. Ask Walter Mondale, who made such a promise in 1984 – and lost 49 of 50 states.

Most Socialist Candidate: The hardest choice of all, given that every one of the 20 candidates on stage has openly voiced support for undiluted socialist policies such as the green new deal and Medicare-for-all. So you have to give the award to the candidate who seems most committed in the gut to full-on collectivism. Thus, the winner would have to be Bernie Sanders, whose perpetual rage against the machine oozes authenticity. After all, how much more committed to socialism could you be than spending your honeymoon in the Soviet Union?

Most Moderate Candidate: Extremely low bar. Joe Biden by default, simply on the basis of defending the current, though admittedly troubled, healthcare system, and promising to oppose any candidate who wants to replace it, as all the rest of the candidates do in one form or another. So, unlike the other frontrunners – Warren, Harris, Sanders – at least Biden won’t try to confiscate private health insurance from 180 million Americans.

Most Humorous Line: Another extremely low bar, because there were all of about three humorous lines delivered over four grueling (for the viewer) hours by the dour, perpetually pandering field of candidates. None were exactly side-splitters, and only one was actually intentional. The winner is Sen. Amy Klobuchar (D-MN), who tweaked Trump, “I don’t think we should conduct foreign policy in our bathrobe at five in the morning.” Pete Buttigieg said his foreign policy is hard to predict because “We have no idea which of our most important allies [Trump] will have pissed off worst between now and then.” And Kamala Harris’ scolding of her fellow debaters bickering amongst themselves culminated with “America does not want to witness a food fight. They want to know how we’re going to put food on their table.” I told you they weren’t very funny.

Most Like Trump: No-brainer. Bill de Blasio. Same city, same style. In fact, maybe the New York City mayor should employ that as a really clever strategy. Go out on the trail and brag that only a bully can beat a bully. To the de Blasio campaign: You’re welcome. No charge.

Pete Buttigieg

Least Like Trump: Pete Buttigieg is the yin to Trump’s yang (or is it the other way around?) – thoughtful, deliberate, scholarly.

Biggest truth-teller: Tie between Rep. Tim Ryan (D-OH), former Congressman John Delaney, and former Colorado Gov. John Hickenlooper. This trio warned their fellow debaters of the dangers in being labeled as a socialist party, making impossible promises, and allowing the party to be dominated by coastal elites completely out of touch with mainstream Americans.

Most Likable Candidate: Agree with his policies or not, but there was an air of earnestness about Mr. Buttigieg. And he was perhaps the only candidate who based his answers on logic instead of emotion, preferring the patient explanation to the hysterical rants of the likes of Sen. Kirsten Gillibrand (D-NY).

Least Likable Candidate: Tie between New York Mayor Bill de Blasio and California Rep. Eric Swalwell (D-CA). Mr. de Blasio was a Trump knock-off, a caricature of the typical loud, rude, and bombastic New Yorker, picking fights wherever he could find them. Swalwell acted the part of that kid in grammar school you couldn’t stand because he was always bragging, sucking up to the teacher, and providing a stream of unwanted advice. And thus Swalwell is also the winner of the next prize (Okay, we made this award up just for him);

Biggest Punk: The remarkably self-satisfied Rep. Swalwell lectured Pete Buttigieg about the mayor’s improper response to a recent police shooting in his town, and provided instructions on how he should run his city, drawing a lingering, icy stare from the normally unflappable Mayor Pete. But wait, that’s not all. Swalwell basically told Joe Biden to pack it in because he’s too old, that he should follow his own advice, apparently uttered by the former vice-president back in high school (plagiarism alert: it was actually stated by JFK in his inaugural): “It’s time to pass the torch to a new generation of Americans.” So get off the stage, old man.

Kamala Harris

Most Likely to Succeed: Given Joe Biden’s ever-more geriatric countenance and appeal to the past instead of the future, Bernie Sanders’ scary diatribes against anyone who wears a suit, and the utter ineptitude of most of the other candidates, Kamala Harris would have to get the nod. Yes, she is among the most radical of a hard left field – an outspoken supporter of the catastrophic Green New Deal, Medicare-for-all, and aggressive gun control measures – but she came on strong, exuding energy, drive, and passion – a model of the contemporary socialist woman.

Least Likely to Succeed: There might be a tendency to pick a candidate such as Sen. Michael Bennet (D-CO, dull as dishwater), Andrew Yang (didn’t see fit to even wear a tie), or former Maryland Congressman John Delaney, who was interrupted so many times when he started speaking that he might develop an inferiority complex. But the winner would have to be new age author/guru Marianne Williamson, who said she would “harness love” to beat Trump, and that her first call upon arriving in the Oval Office would be to – no kidding – the prime minister of New Zealand so she can brag about how America is the best place to live. Seriously. After the debate, Williamson solicited support for her “great revolution of consciousness.” Hey, I don’t get it either.

Biggest Trump-Hater: Extremely high bar. In a field ripe with contenders, this most cherished of awards goes to the outspoken senator from California. Kamala Harris wailed like a banshee about the evil chief executive, lifting the Trump-is-Hitler audience to its feet, and likely propelling her into a Hate-Trump tour coming soon to a voting district near you.

via ZeroHedge News https://ift.tt/2LmDH6S Tyler Durden