Tag: finance

Authored by Peter van Buren via TheAmericanConservative.com,

“Most everything that happened in Iraq and Afghanistan has gone un-investigated, unheard of, or unpunished. Ancient History…”

I recently spoke to some college students who, I realized, were in fifth grade when I got on a plane to Iraq. They now study that stuff in history classes like “Opportunities and Errors: 21st-Century America in the Middle East.” About halfway through our conversation, I realized it’s coming up on 10 years since I first went to Iraq. Now that’s real history.

I was a Foreign Service Officer then, a diplomat, embedded with the U.S. Army at a series of forward operating bases and in charge of a couple of reconstruction teams, small parts of a complex failure to rebuild the Iraq we wrecked. I ended up writing a book about it all, explaining in tragicomic terms how we failed (those “Errors”).

The book, We Meant Well: How I Helped Lose the Battle for the Hearts and Minds of the Iraqi People was—and wasn’t—well-received. People laughed at the funny parts, but my message—it didn’t work and here’s why—was largely dissipated at the time (2012) by government and media propaganda centered on The Surge. That was David Petraeus’s plan to pacify the Sunnis and push al-Qaeda away, while clearing, holding, and building across the country, apparently to make room so ISIS and the Iranians could move in.

Meanwhile, the new American president, elected in part based on his “no” vote on the war in 2003, proclaimed it all a victory and started bringing the troops home even while I was still in Iraq.  Meanwhile my employer, the U.S. Department of State, was unhappy with my book. After a year-long process, State pushed me into early retirement. My career was history.

Iraq wrecked me, even though I somehow didn’t expect it to. I was foolish to think that traveling to the other side of the world and spending a year seeing death and poverty, bearing witness to a war, learning how to be mortared at night and deciding it didn’t matter that I might die before breakfast, wasn’t going to change me. Of the military units I was embedded in, three soldiers did not come home; all died at their own hands. Around us, Iraqis blew themselves up alongside children. Everyone was a potential killer and a potential target. I did this at age 49, on antidepressants and with a good family waiting back home. I cannot imagine what it would have done to 18-year-old me. And I had it easier than most, and much easier than many.

People asked in line at Trader Joe’s and in interviews on semi-important TV shows, “Was it all worth it to you?” I always answered yes. I’m not important, I said, but the story is. And now we’re making the same mistakes in Afghanistan. The only way to even start to justify it was to think there might be some meaning behind it all. It didn’t do anything for me but fill my soul with vodka but maybe somehow it…helped?

See, my book wasn’t aimed at cataloging the failures in Iraq per se, but in trying to make sure we didn’t do the same thing in Afghanistan. The initial title wasn’t We Meant Well, but Lessons for Afghanistan from the Reconstruction of Iraq. The early drafts were pretentious scholarly stuff, outlining our mistakes. Harvard Business School-like case studies. Maps. Footnotes. It would have sold maybe five copies, and so my editors encouraged me to add more funny parts. NPR’s Fresh Airactually added a laugh track to my interview. I figured I’d get the lessons across with humor more effectively anyway. In such situations, you have to think that way. You can’t believe that what you went through didn’t matter and keep getting out of bed every morning.

I now know officially that it did not matter. It was pointless. SIGAR shows I accomplished nothing.

SIGAR is the Special Inspector General for Afghan Reconstruction, a government oversight body that is supposed to prevent waste, fraud, and mismanagement of the billions of dollars being spent rebuilding Afghanistan but that has its hands full just keeping a CVS receipt-length history of what’s wrong. Sound familiar?

SIGAR just released its “2019 High-Risk List,” which points out especially egregious things that will follow in the wake of any peace agreement in Afghanistan. Here are some quoted highlights:

• “There are over 300,000 Afghans currently serving in the security forces, most of whom are armed. If, because of a loss of financial support, their paychecks were to stop coming, this could pose a serious threat to Afghanistan’s stability.”

• “A failure to peacefully reintegrate as many as 60,000 heavily armed Taliban long-term would threaten any peace agreement as disaffected former Taliban who may have been expecting a peace dividend may return to violent and predatory behavior.”

• “Effective policing will require a force that gives citizens the presumption of innocence, rather than anticipating and taking preemptive offensive operations against perceived threats…. There is no comprehensive strategy for a competent civil police force backed by the rule of law.”

• “Failure to effectively address systemic corruption means U.S. reconstruction programs, at best, will continue to be subverted and, at worst, will fail.”

• “The opium trade plays a significant role in the Afghan economy and it is difficult to see how a peace accord between the Afghan government and the insurgency would translate into the collapse or contraction of the illicit drug trade.”

• “If the U.S. reduces its presence in Afghanistan but feels compelled to provide significant financial support for reconstruction, there may be little choice but to provide a greater proportion of funding as on-budget assistance. But if that road is taken and conditions are lacking, we may as well set the cash ablaze on the streets of Kabul for all the good it will do.”

That last line really got me. In my book, I’d written, “While a lot of the money was spent in big bites at high levels through the Embassy, or possibly just thrown into the river when no one could find a match to set it on fire….” Had SIGAR read what I’d written? Or was the joke just so obvious that we’d both come to the same punchline 10 years and two countries apart?

Word for word as in Iraq, and after over 17 years of American effort, the U.S. has failed to establish a viable government in Afghanistan, eliminate the local insurgents/patriots/residents, establish a civil society, tamp down corruption, and ensure some sort of national defense. Afghanistan has almost no chance of survival except as a Taliban narcoland with financial support needed indefinitely to avoid whatever “worse” would be in that calculus.

But there still are semi-believers. One former State Department colleague is on her fourth assignment in Kabul, roughly half her career. Her job is to liaise with the few NATO officials still hanging around. She says it’s easy work; they’ve known each other for years. She’s heard we’re making progress.

Around the same time as the SIGAR report, the Army War College released its history of the Iraqi Surge, a quagmire of dense prose that I’m only about halfway through, but so far no mention of the impact of reconstruction. The theme seems to be that the Army had some good ideas but the politicians got in the way. Fair enough, but they misspelled Vietnam as I-r-a-q all throughout.

The post-9/11 wars have metastasized across three presidencies so far. Pick the thing you detest most about Bush, Obama, and Trump, and complain about how it was never investigated enough and how there weren’t enough hearings. And then I’ll disagree, for most everything that happened and continues to happen in Iraq and Afghanistan has gone uninvestigated, unheard of, and unpunished. It’s ancient history.

We all want to believe that what we did, what we didn’t do, the moral injury, the PTSD, the fights with spouses, the kid at home we smacked too hard when she wouldn’t eat her green beans, all of what we saw and heard, mattered. You read that SIGAR report and tell me how. Because basically I’m history now.

via ZeroHedge News http://bit.ly/2VL54tX Tyler Durden

Stratolaunch Systems Corporation, founded by the late billionaire Paul G. Allen, conducted its first test flight Saturday over the Mojave Desert in California.

With a dual fuselage design and a 385 feet wingspan, the plane lifted off at 0658 PDT from the Mojave Air & Space Port, a Stratolaunch press release read.

Called the “Roc,” the world’s largest aircraft flew for 2.5 hours, achieved a maximum speed of 189 miles per hour, and soared at altitudes up to 17,000 feet. The first flight allowed pilots to evaluate the airworthiness of the aircraft before landing successfully back at the spaceport.

“What a fantastic first flight,” said Jean Floyd, CEO of Stratolaunch. “Today’s flight furthers our mission to provide a flexible alternative to ground-launched systems. We are incredibly proud of the Stratolaunch team, today’s flight crew, our partners at Northrup Grumman’s Scaled Composites and the Mojave Air and Space Port.”

The world’s largest airplane takes flight! @Stratolaunch @NASASpaceflight #stratolaunch pic.twitter.com/jmLs3mpztn

— Jack Beyer (@thejackbeyer) April 13, 2019

According to the release, the test team conducted several in flight tests:

• Performed a variety of flight control maneuvers to calibrate speed and test flight control systems, including roll doublets, yawing maneuvers, pushovers and pull-ups, and steady heading side slips.

• Conducted simulated landing approach exercises at a max altitude of 15,000 feet mean sea level.

Roc is a mobile air launch platform that will allow airline-style access to space that is convenient, affordable and routine. The reinforced 385-feet carbon fiber wing can support multiple launch vehicles, weighing a total of 250 tons. The air launch will occur at 35,000 feet and propel the rocket into Low Earth Orbit (LEO).

“A historic milestone for the Stratolaunch team with this record-setting aircraft taking flight,” Thomas Zurbuchen, NASA’s associate administrator for NASA’s science directorate, tweeted. “This is about going to the edge of space and beyond!”

More views of the Stratolaunch’s historic first test flight.

Low approach! #stratolaunch @Stratolaunch @NASASpaceflight pic.twitter.com/HxeUmuxsGX

— Jack Beyer (@thejackbeyer) April 13, 2019

“We all know Paul would have been proud to witness today’s historic achievement,” said Jody Allen, Chair of Vulcan Inc. and Trustee of the Paul G. Allen Trust. “The aircraft is a remarkable engineering achievement and we congratulate everyone involved.”

Watch: Stratolaunch’s promotional video of the first test flight

via ZeroHedge News http://bit.ly/2IzO7Pg Tyler Durden

Authored by David Kemmerer via CoinTelegraph.com,

Depending on what country you live in, your cryptocurrency will be subject to different tax rules. The questions below address implications within the United States, but similar issues arise around the world. As always, check with a local tax professional to assess your own particular tax situation.

image courtesy of CoinTelegraph

1. Do I need to report my cryptocurrency trades to the IRS?

You need to report your cryptocurrency activity if you incurred a taxable event during the year. A taxable event is a specific scenario that triggers a tax liability. The below are a list of the taxable events as specified by the IRS 2014 guidance:

• Trading cryptocurrency to fiat currency like the U.S. dollar is a taxable event.

• Trading cryptocurrency to cryptocurrency is a taxable event (you have to calculate the fair market value in USD at the time of the trade).

• Using cryptocurrency for goods and services is a taxable event (again, you have to calculate the fair market value in USD at the time of the trade; you may also end up owing sales tax).

The most common tax event from the above is trading one cryptocurrency for another — for example, trading your Bitcoin (BTC) for Ethereum (ETH).

On the other hand, there are other actions that cryptocurrency enthusiasts also commonly take that are not taxable events and do not trigger a tax reporting requirement. Listed below are scenarios in which traders do not trigger a tax event:

• Giving cryptocurrency as a gift is not a taxable event (the recipient inherits the cost basis; the gift tax still applies, if you exceed the gift tax exemption amount).

• A wallet-to-wallet transfer is not a taxable event (you can transfer between exchanges or wallets without realizing capital gains and losses, so make sure to check your records against the records of your exchanges, because they may count transfers as taxable events, like they are a safe harbor).

• Buying cryptocurrency with USD is not a taxable event. You don’t realize gains until you trade, use or sell your crypto. If you hold longer than a year, you can realize long-term capital gains (which are about half the rate of short-term). If you hold less than a year, you realize short-term capital gains and losses.

An example

Let’s say you buy 2 BTC from Coinbase. You just hold this crypto for the year. In this case, you have no reporting requirement, as you have not triggered a taxable event. Even if you send this to an offline wallet, you still do not need to report this, as merely sending crypto from one place to another is not a taxable event.

Now let’s say you send this 2 BTC to Binance and start trading it for other altcoins. Now you have incurred a taxable event (trading one cryptocurrency for another) and you will need to report this transaction on your taxes and file it with your 2018 tax return, even if you lost money on the trade.

Keep in mind that mining cryptocurrency is also taxable and is treated as income.

2. How do I file my crypto taxes?

If you are simply buying, selling and trading cryptocurrencies you will report these trades on the IRS Form 8949, as pictured below.

As seen in the above example, you have sold 0.5 Bitcoin. You acquired the Bitcoin on July 16, 2017, and you sold it on December 17, 2017. You sold the Bitcoin for a total proceed of $9,848.00, and your cost basis was $970.00. This led to your gain of $8,873.00 (reported in column h).

You will report each crypto-to-crypto trade and each taxable event from the calendar year on this form.

You can use crypto tax software to automatically build this report for you, if you don’t have your own records of the historical prices, dates and fair market values of your trades.

Once you have your net gain or loss calculated from Form 8949, the total will simply flow into your 1040 Schedule D. You should include these forms with your entire tax return upon filing.

Foreign account holdings

If you traded on foreign exchanges like Binance, you may additionally need to report these holdings. You do not pay any tax on these holdings, but it is important that you file the following reports if either situation applies to you.

FBAR: A taxpayer with a financial interest in or signatory authority over a foreign financial account must file a Foreign Bank Account Report (FBAR) FinCEN Form 114 if the aggregate value of the foreign financial account exceeds $10,000 at any time during the calendar year. Noncompliance with FBAR would subject a taxpayer to steep civil and criminal penalties. Each nonwillful failure-to-file violation can carry a civil penalty of $10,000. Penalties for each willful violation could be the greater of $100,000 or 50% of the amount in the account.

FATCA: A taxpayer with foreign financial assets of $50,000 or more must report it under Foreign Account Tax Compliance Act (FATCA) requirements on Form 8938. It is recommended that cryptocurrency-invested hedge fund accounts and cryptocurrency-denominated exchange accounts be reported in the summary information in Part I of Form 8938. Specific information should be given in Part V. Noncompliance with FATCA could subject a taxpayer to taxes, severe penalties in excess of the unreported foreign assets, and exclusion from access to U.S. markets, which could include a regulated cryptocurrency derivatives clearing market.

3. What will happen if I don’t report my crypto activity?

The reality is that no one knows for sure. However, it is not advised.

The IRS publicly stated on July 2, 2018 that one of their core campaigns and focuses for the year is the taxation of virtual currencies. Unfortunately, lack of reporting will be treated as tax fraud.

4. Can I reduce my tax bill by filing my crypto capital losses?

Yes.

When you realize a capital gain — if you sold your crypto for more than you purchased it for — you owe a tax on the dollar amount of the gain. However, when you sell (or trade) your crypto for less than you purchased it for, you incur a capital loss, and you can use this loss to offset gains from other trades or even a gain from the sale of other property — like stocks in your portfolio.  

Whenever your total capital gains and losses for the year add up to a negative number, you incur a net capital loss. If the net capital loss is less than or equal to $3,000 ($1,500 if you are married and filing a separate tax return), then that entire capital loss can be used to offset other types of income — like the income from your job.

If your losses exceed $3,000, then the amount over $3,000 will be rolled forward to the next tax year.

The bright spot in the 2018 bear market is that your losses can reduce your tax bill.

5. Why can’t I get my tax documents from the exchanges that I use?

Cryptocurrency exchanges are unable to provide their users with accurate tax documentation. This is a big problem in the industry.

By the nature of the blockchain technology that exchanges operate on, users are able to send Bitcoin and other cryptocurrencies to wallet addresses outside of their own network. An example of this would look like you buying Bitcoin through Coinbase and then sending it to a Binance wallet address in order to acquire new coins and assets on Binance that Coinbase does not offer.

Because you can send cryptocurrencies from other platforms onto exchanges like Coinbase at any time, Coinbase has no possible way of knowing how, when, where or at what cost you acquired that cryptocurrency that you sent in. Coinbase only sees that it showed up in your Coinbase wallet.

This means that anytime you move crypto assets off of Coinbase or into Coinbase from another location, Coinbase completely loses the ability to provide you with accurate tax information. This is because it has no way of identifying what your cost basis is in that certain cryptocurrency, which is an essential piece to figure out your capital gain or loss. This is also true of all other major cryptocurrency exchanges.

The solution to this problem is to leverage crypto tax aggregating tools to collect your data from all platforms to build your holistic tax reports.

*  *  *

David Kemmerer is the co-founder of CryptoTrader.Tax, cryptocurrency-focused tax software for automating your tax reporting.

via ZeroHedge News http://bit.ly/2UVlRNG Tyler Durden

With just three days until the full (redacted) Mueller Report is released, shattering his entire raison d’etre, House Intelligence Chairman Adam Schiff refuses to give up on his search for Trump-Russia collusion.

Bloomberg reports that Congressional Democrats issued subpoenas to Deutsche Bank AG and other banks to obtain long-sought documents related to whether foreign nations tried to influence U.S. politics, signaling an escalation of their probes into President Donald Trump’s finances and any dealings with Russians.

Schiff said in a statement the subpoenas issued included a “friendly subpoena to Deutsche Bank.”

The Financial Services Committee chair, Maxine Waters, said in a statement:

“The potential use of the U.S. financial system for illicit purposes is a very serious concern. The Financial Services Committee is exploring these matters, including as they may involve the president and his associates, as thoroughly as possible.”

Deutsche Bank spokeswoman Kerrie McHugh said Monday:

“Deutsche Bank is engaged in a productive dialogue with the House Financial Services and Intelligence Committees.

We remain committed to providing appropriate information to all authorized investigations in a manner consistent with our legal obligations. If you have questions concerning the investigative activities of the committees, we would refer you to the committees themselves.”

Deutsche Bank had been Trump’s go-to lender for decades, even as other commercial banks stopped doing business with him because of multiple bankruptcies.

Additionally, CNN reports that the House Oversight and Government Reform Committee has subpoenaed Trump financial information from Mazars, an accounting firm that once prepared several years’ worth of President Donald Trump’s financial statements, according to a Monday memo to committee members from Chairman Elijah Cummings.

Cummings had said he intended to issue a “friendly subpoena” because Mazars USA had requested it from the committee before providing records.

Cummings is requesting financial information dating back 10 years after Trump’s former personal attorney Michael Cohen accused Trump of inflating his net worth in an attempt to buy the Buffalo Bills football team.

In the memo, Cummings said the subpoena is also based on “corroborating documents” that “raise grave questions about whether the President has been accurate in his financial reporting.”

While possible financial leverage wasn’t mentioned in Attorney General William Barr’s four-page summary of Special Counsel Robert Mueller’s findings from his 22-month probe of Russian election interference, Schiff remains unable to face his own cognitive dissonance, frequently noting that billionaire real-estate-developer Trump was pursuing a Trump Tower (real estate) project in Moscow during the presidential campaign…

“That’s a different form of collusion, but it is equally compromising to the country because it means the president of the United States is looking out for his bank account and not for the United States of America,” Schiff said in an interview on NBC in February.

via ZeroHedge News http://bit.ly/2XhlU3F Tyler Durden

After spending years railing against the excesses of the wealthiest Americans, and after refusing to release his full tax returns when he ran for the Democratic nomination against Hillary Clinton, on Monday evening socialist Vermont senator Bernie Sanders released a decade’s worth of tax returns which confirm that, as had been extensively leaked before, he is indeed among those that can be called a filthy capitalist millionaire.

The returns show Sanders and his wife, Jane, earned more than $1 million in total income in 2016 and 2017. They earned $519,529 of taxable income in 2018, the sum, of income from his job in the Senate and more than $381,000 in income from book royalties in 2018, and paid $145,840 in federal taxes for an effective rate of 28%.

Sanders’ highest grossing year in the past decade was 2017 when his books earned him $875,000 in royalties, resulting in combined income for Bernie and his wife of nearly $1.2 million; they paid an effective rate of nearly 32 percent on that income. In 2016, the couple reported a little more than $1 million, mostly from sales of the book, which was also translated into five other languages.

The Sanders’s income has increased sharply in recent years as he earned more from book royalties and gained fame as a presidential candidate. As shown in the Bloomberg chart above, from 2009 to 2015 the couple’s average income was about $281,000.

Sanders earned $174,000 annually as a U.S. senator, while book sales accounted for $391,000 of his earnings in 2018; in 2017, the book generated $855,631 in income, up from $840,485 in 2016.

“These tax returns show that our family has been fortunate,” Sanders said in a statement accompanying the tax returns, without elaborating why he did not turn around and submit an even greater remittance to the IRS, as he now demands all wealthy Americans should do.

He added later that “I consider paying more in taxes as my income rose to be both an obligation and an investment in our country. I will continue to fight to make our tax system more progressive so that our country has the resources to guarantee the American Dream to all people.”

Despite their roughly 50% drop in income last year, the Sanders fell squarely each year into the top 1 percent of wealthiest Americans, as defined by a May 2018 study based upon the 2014 tax year by economists Thomas Piketty, Emmanuel Saez and Gabriel Zucman. According to Bloomberg, taxpayers needed income of at least $458,000 and less than $1,960,000 to be in that group.

During the 2016 presidential campaign, Sanders released his 2014 tax returns and said he would release more if he earned the nomination. For months, the Vermont senator has said he would release several years of tax information, but had continued to delay the release, raising questions about whether there was something in his financial history that would upset his supporters.

It turns out that besides being quite wealthy – at least for a socialist – there is little in his returns that is disturbing.

Here are the details, courtesy of CBS and Bloomberg:

In 2016, the Sanders’ income increased substantially due to advances and royalties from his best-selling book Our Revolution: A Future To Believe In, which has been translated into 5 languages and published in a number of countries. The youth version of Our Revolution, the publication of Where We Go From Here and an advance on a book currently being written by Jane Sanders, are also reflected in the tax filings.

The Sanders under-withheld last year – a common problem for many taxpayers adjusting to filing returns for the first time under the tax overhaul, which changed the withholding tables. Their 2018 return shows that upon filing, they owe the IRS $8,267, after having withheld $22,573 for federal taxes. They paid the rest of their liability in estimated quarterly payments.

Their most recent return listed $41,764 in deductions — slightly below average for their income level, according to IRS data for 2014, the most recent year available. The new law limited the ability of taxpayers to itemize deductions by nearly doubling the standard deduction, to $12,000 for single taxpayers and $24,000 for married taxpayers who file jointly.

In 2018, the Sanders’ paid $65,086 in state and local income taxes and property taxes on two homes in Vermont and one in Washington D.C.; that deduction is now capped at $10,000 under the new law. They also paid $12,814 in home mortgage interest.

The Sanders gave $18,950 to charity in cash and other gifts in 2018, a little more than half of their $36,300 in giving in 2017. The Sanders gave $10,600 in 2016 but before that, their yearly giving never topped $10,000.

The Sanders reported $381 in taxable interest, $1 in ordinary dividends and $0 in capital gains.

Last week, when Bernie first admitted to the NYT that he was a millionaire, he justified his presence in the loathed “1%” club by saying “I wrote a best-selling book… If you write a best-selling book, you can be a millionaire, too.”

What is odd is just how informative his book – supposedly on socialism or some such – was: as Bloomberg points out, Sanders’s book royalties were larger than many of his 2020 rivals. Elizabeth Warren reported nearly $325,000 in income from her book. Kirsten Gillibrand reported about $50,000 of book deal profits. Since 2016, Sanders has published three books, including “Our Revolution: A Future to Believe In,” which he used to launch his last presidential bid.

“Sanders shouldn’t feel ashamed for making money,” said Morris Pearl, chairman of the Patriotic Millionaires, a group of wealthy individuals that advocates for progressive tax policies. “The system is rigged in our favor and we should do more to correct that.”

Curiously, just like in 2016 before his campaign was sabotaged by the Democratic Party, which we learned thanks to Wikileaks and which led to the resignation of Debbie Wasserman-Schulz, Bernie is now once again in the lead among Democratic candidates, although with the publication of his taxes he may find it a challenge to manage the disconnect between his decades of rhetoric about the political power wielded by the wealthy… and his own position within that group.

When he ran against Clinton, Sanders released a lone return, from the 2014 tax year, when he earned just over $205K. Since then, as Bloomberg notes, “Sanders has gone from a small-state senator with ideas mostly seen outside the mainstream, to one of the most recognizable politicians in the U.S.”

Sanders has joined numerous other 2020 Democratic hopefuls (and there is indeed a great number of them) who have released at least 10 years worth of tax returns, including Senate colleagues Warren, Amy Klobuchar and Kirsten Gillibrand. For some bizarre virtue signaling reason – perhaps to demonstrate to their potential voters just how little they make  – the release of tax documents has taken on added importance for Democratic candidates who are eager to contrast themselves with President Trump, who continues to refused to release his tax returns.

Asked about the whereabouts of his tax returns in an interview with CBS News last week, Sanders said he would release them by April 15. He joked his supporters might be thrown off by “my trillions of dollars of investment in Saudi Arabia or Russia.” Well, no, but they may be thrown off – between Sanders’ own generous income, his three residential properties, and his wife’s somewhat dismal professional experience which left a local college bankrupt – by what some consider hypocrisy .

The Sanders’ complete tax filings from 2009 through 2018 can be found here, and their 2018 1040 is below:

via ZeroHedge News http://bit.ly/2UDQF6b Tyler Durden

Authored by Mike Shedlock via MishTalk,

The amount owed to retirees accelerated faster than assets on hand despite a record bull market.

The Wall Street Journal reports the Long Bull Market Has Failed to Fix Public Pensions.

“Some of the states allowed themselves to get so underfunded that the higher returns aren’t helping them enough,” said Michael Cembalest, chairman of market and investment strategy for the asset-management arm of JPMorgan Chase & Co. and the author of an annual study on the financial health of cities and states.

Illinois Tops the Worst State List

Illinois, New Jersey and Kentucky top the list of states in worst shape on a percentage of revenue basis.

Chicago the Worst City

Worst Cities on Percentage Basis

1. Chicago, IL

2. Baton Rouge, LA

3. Pittsburgh,PA

4. Atlanta, GA

5. Lubbock, TX

Deeper Pension Cuts Didn’t Materialize

Many states and cities reduced benefits for new employees after 2008. But deeper cuts often met resistance from judges, unions and angry constituents—even in some of the most indebted states.

The Illinois Supreme Court in 2015 threw out cuts by the legislature that were expected to save tens of billions of dollars. Kentucky’s legislature last year declined to approve the governor’s proposed cuts to cost-of-living increases for retired teachers after protests brought thousands to the state capitol and forced cancellations of classes in several school districts.

Pension Plan Assumptions

The average pension plan assumption is about 7.3%. That’s not going to happen.

Please consider charts and commentary from John Hussman’s April 2019 post You Are Here.

Valuations Second Highest in History

Expected Total 12 Year Return is Zero

The following chart shows nonfinancial market cap/nominal potential GDP on an inverted log scale (left), with actual subsequent 12-year S&P 500 total returns on the right scale. As usual, note that speculative bubbles always make it appear that valuations haven’t “worked” in the period immediately preceding the top, precisely because a substantial, if temporary, violation of historical norms is required to get to those extremes. As indicated by other reliable measures, investors are presently facing the likelihood of prospective nominal 12-year S&P 500 total returns averaging roughly zero.

​I remember a little boy listening to a concert at a Fourth of July celebration one year. As the music played, the little boy waved his arms as if he was conducting the orchestra. Monetary authorities are a lot like that, except that everyone who watches these kids at play actually believes that they are, in fact, conducting the orchestra.

I’m utterly mesmerized by the credulity of investors who believe that the Federal Reserve is capable of saving them from every possible contingency, no matter how irresponsible their own speculative behavior might be.

Imagine the shock of pension plans if the 12-year average is as low as 4% a year let alone a total return of zero.

via ZeroHedge News http://bit.ly/2Xm7W0P Tyler Durden

As polling gets under way in India – the largest exercise of democratic choice in the world – voters (where a quarter of the population earn less than $2 a day on average) are being lured by politicians offering illegal handouts.

Bloomberg reports that India’s enforcement agencies have so far seized cash, liquor, drugs, gold and other contraband worth 25 billion rupees ($361 million), already double the value of goods seized in the entire 2014 elections.

“It is becoming a menace and assuming alarming proportions — it is a national malady,’’ said V.S. Sampath, former chief election commissioner.

“It also shows how people are placing more faith on money than policies and programs.”

Acceptance of money to vote or not to vote for a candidate is punishablewith prison terms, fines or both. In 2014 the Election Commission seized 12 billion rupees worth of cash and contraband.

“There should be moral and ethical awareness among the voters,’’ said Sampath.

“The Election Commission alone can’t solve it.”

This growth in vote-buying also means a significant rise in election spending, making it the world’s costliest election.

via ZeroHedge News http://bit.ly/2UDGONz Tyler Durden

Authored by Matthew Ehret via The Strategic Culture Foundation,

In the midst of one of the most de-stabilizing scandals to rock Canada in years, Foreign Affairs Minister Chrystia Freeland announced on April 5 that the threat of “Foreign interference” going into the October 2019 elections was at an all-time high.

Sitting beside her UK counterpart at a G7 meeting in France, Freeland stated: 

“Interference is very likely and we think there have already been efforts by malign foreign actors to disrupt our democracy”. Her warning was echoed by an embattled puppet Prime Minister in Ottawa who stated it is “very clearly that countries like Russia are behind a lot of the divisive campaigns … that have turned our politics even more divisive and more anger-filled than they have been in the past.”

The Measures to Defend the British Deep State

In order to counteract this “foreign threat”, several Canadian mechanisms have been announced to “keep democracy safe” in alignment with the G7, Five Eyes and NATO. These mechanisms are:

The creation of an “Incident Public Protection Panel” run by five Privy Council bureaucrats under the Clerk of the Privy Council which will exist outside of the authority of the Chief Electoral Officer of Canada, whose job is to maintain the integrity of elections. In defense of this mysterious group, Canada’s Democratic Institutions Minister Karina Gould stated that “it won’t be one person who will decide what Canadians will be allowed to know” (apparently having five people decide is more democratic). The new Clerk of the Privy Council is Ian Stugart, who served as former deputy minister to Chrystia Freeland until just a few weeks ago.

A Security and Intelligence Election Threats Task Force which will incorporate all of Canada’s intelligence agencies such as the Canadian Security Intelligence Service, the RCMP, the Communications Security Establishment (CSE) and Freeland’s Global Affairs Canada. All of these agencies are Privy Council organizations.

The Rapid Response Mechanism of the G7 created in June 2018 and headquartered in Ottawa Canada in Freeland’s Global Affairs Office and Privy Council Office.

While Russia is being set up as the scapegoat of the collapsing western liberal establishment, this most recent red alarm by Freeland and Canada’s response to the “danger” is useful for two reasons:

First and foremost, Freeland’s shameless warnings over “foreign interference” have become so loud that an irony has become unavoidable. She has after all been caught red handed behind the destabilization of both Ukraine and Venezuela. Secondly, by reviewing the mechanisms being created by Canada to counter-act this “threat”, a clear insight is provided into the inner workings of the actual foreign influences which infiltrated Canada many decades ago.

Chrystia Freeland: Regime Change Princess of Ukraine and Venezuela

On the first point, Freeland’s role as a co-architect of the nazi-fueled overthrow of a pro-Russian government in February 2014 is now well known. Aside from her family’s Nazi connections going back to her grandfather Michael Chomiak’s leading role as a Nazi collaborator in WWII, and her own mother’s role in helping to draft Ukraine’s neo-liberal constitution, Freeland herself not only befriended leading neo-Nazi collaborators such as Canadian Ukrainian Congress’ president Paul Grod and but has also promoted NATO’s anti-Russian expansion across eastern Europe.

Less well known but equally important is Freeland’s leading role in planning for the Venezuelan coup attempt which has been recently halted thanks to Russia’s March 23rd intervention.

Working alongside fellow Oxford operative Ben Rowswell (now head of the Canadian International Council/ Chatham House of Canada) during his three year tenure as Ambassador to Venezuela (2014-2017), Freeland set up a program for regime change which involved a two-part formula of 1) mobilizing mass direct support for the overthrow of a government, and 2) gaining international support for said overthrow.

Rowswell’s on-the-ground work was designed to achieve the former as he himself admitted in a 2017 interview saying “We became one of the most vocal embassies in speaking out on human rights issues and encouraging Venezuelans to speak out”. Before leaving his post to become the head of the Chatham House of Canada, he tweeted “I don’t think they (anti-Maduro forces) have anything to worry about because Minister Freeland has Venezuela way at the top of her priority list”.

Working on fulfilling the 2nd part of the formula, Freeland directed the creation of the “Lima Group”. A Global News article of January 24 described the group in the following terms: 

“Playing a key role behind the scenes was Lima Group member Canada, whose Foreign Minister Chrystia Freeland spoke to Guaido the night before Maduro’s swearing-in ceremony to offer her government’s support should he confront the socialist leader”.

It shouldn’t be too surprising in our day and age that a nation with such a high reputation as “polite Canada” is actuality, an active agency for regime change and global governance. Canada’s very Prime Minister did assert in 2016 that “Canada is the world’s first post national-state nation”. What may surprise some readers is that Canada itself was infiltrated by a foreign player many years ago and what we will briefly see is that Canada can only be called the “world’s first post national-state nation” because it never really became a genuine nation in the first place, but was always manipulated by a foreign power… although not the one you think.

The “Foreign Influence” Controlling Canada

While a longer presentation is needed to do this story justice, it is enough to note for now that neither Freeland, nor Rowswell are operating on behalf of Canada’s interests, but are rather both operatives run by an entity that took over Canada many decades ago and are currently directed by two interlocking organizations: The Privy Council Office and the Rhodes-Milner Round Table Group.

The Privy Council Office

The Privy Council office was set up in 1867 in order to act as the British hand guiding its newly formed confederacy (Canada nearly became a part of Lincoln’s America in the wake of the Civil War. The only thing stopping that outcome was Britain’s creation of a confederation. The full story is told in the Imperial Myth of Canada’s National Policy.). While its power was always great, there was still room for independent policy making by nationalistic elected officials when the international conditions were favorable.

This was nearly entirely destroyed during the reign of technocratic golden boy Pierre Elliott Trudeau during his 1968-1973 reform of the Federal Government under the guidance of the OECD’s Sir Alexander King. It was during this time Sir King’s Club of Rome (Ottawa branch) was set up in Ottawa under the guidance of Trudeau and his clerk of the Privy Council Michael Pitfield, and other neo-Malthusian technocrats such as Privy Council President Michel Lamontagne, Maurice Strong, and Governor General Roland Mitchener. It was from this control point in Ottawa in 1971 that the work later to become known as Limits to Growth was funded by tax payers and which became the bible for the new Malthusianism and blueprint for the “post-industrial society”. It is from this cybernetics central node that the web of governance both in Canada and also across other British infiltrated territories in the Trans-Atlantic system is coordinated under the directives of London.

Sir Alexander King, working through the Club of Rome advanced the Malthusian revival known as “Carrying Capacity” which presupposed a world of fixed resources and discounted the parameter of human creativity

The current President of the Privy Council is Justin Trudeau’s childhood friend Dominic Leblanc, son of former Governor General (i.e.: Head of State of Canada) and co-controller of the Canada 2020 think tank which created Justin as an Obama-modelled puppet in 2006. Following in the footsteps of Pierre Trudeau’s Limits to Growth, it is this very network which is at the heart of the Green New Deal now being pushed internationally. Another leading member of Canada2020 is Facebook Canada’s Kevin Chan who will be working closely with the Freeland’s Security and Intelligence Election Threats Task Force.

The oath of every member of the Privy Council member (which includes both private individuals and also every cabinet minister of government) is: “I, [name], do solemnly and sincerely swear that I shall be a true and faithful servant to Her Majesty Queen Elizabeth the Second, as a member of Her Majesty’s Privy Council for Canada.” Additionally to becoming a Privy Councillor, the Prime Minister must additionally give another oath stating: “I, [name] do swear (declare) that I will be faithful and bear true allegiance to Her Majesty Queen Elizabeth the Second, Queen of Canada, Her Heirs and Successors.

The Milner-Rhodes Trust Group

Coordinating closely with the Privy Council office for over 100 years is an organization known as the Round Table Group (c.1902) which was created with funds from South Africa’s “race patriot” and diamond magnate Cecil Rhodes who wished to use his wealth in order to advance a “church for the extension of the British Empire” and “the ultimate recovery of the United States of America as an integral part of the British Empire, the inauguration of a system of Colonial representation in the Imperial Parliament which may tend to weld together the disjointed members of the Empire.”

Upon Rhodes’ death in 1902, Lord Alfred Milner directed Rhodes’ trust and created the Round Table Movement across all British Territories. The trust was also directed towards the creation of the Rhodes Scholarship system designed to indoctrinate talented young minds around the world in Oxford before deploying them back into their countries of origin in order to infiltrate all public and private fields of influence. The Roundtable groups (dubbed the Council on Foreign Relations upon its creation in the United States in 1921), changed its name several times and today is known as the Royal Institute for International Affairs/Chatham House in the UK and the Canadian International Council (CIC) in Ottawa*.

Regime Change disciple Ben Rowswell’s presidency as head of the CIC and Chrystia Freeland’s status as an Oxford Rhodes Scholar (having been brought into Liberal politics via Rhodes Scholar/Canada2020 controller Bob Rae in 2013) should give any thinker a moment of grave pause.

The Strategic Issue at Hand

As ugly as this picture may appear to some, it should not cause sadness or even anger.

Only pity mixed with a dose of hope are appropriate, since we are in fact witnessing the desperate death rattle of a Monarchical system of empire which has too long poisoned the well of human civilization and which must now give way for something better. Although this imperial system may be deploying every asset and dirty trick it has in opposition to the new paradigm now emerging under the guiding leadership of Russia and China, it is becoming increasingly clear that this empire cannot win. Its regime change plans have failed, its Green New Deals are failing and even the irrational aesthetical traditions underlying this system of post-modernism are giving way to an optimistic artistic sensibility that seeks to re-unite beauty with truth evidenced by the renewed interest in classical art and music during the recent Belt and Road Musical Festival on March 24, 2019.

Russia and China’s leadership have not only consolidated a partnership of nations across Eurasia and Africa around this new paradigm, but they have also found what no one thought was possible just a few years ago: a potential ally in an America which is returning to its nationalist sensibilities under the surprising leadership of Donald Trump.

During Trump’s two first years as President, the long British infiltration of America has finally begun to fall apart with the collapse of the Mueller investigation and the exposure of the British-run deep state that Mueller was a part of.

The question now remains: With the impending meltdown of the trans-Atlantic financial system, and olive branch of cooperation which China has offered to the west via the Belt and Road Initiative and the World Landbridge which can bring this system of development into the Americas and Africa, will America join hands as an ally and will Canada follow suit in order to become a true sovereign nation freed of all foreign imperial influence once and for all?

via ZeroHedge News http://bit.ly/2Xgks1K Tyler Durden

Donald Trump’s tax cut, passed in 2017, benefited nearly 66% of all Americans in the form of lower taxes. But now, as today’s deadline to file taxes for the past year rolls around, a new survey shows just 20% of taxpayers believe that their taxes have actually gone down, according to Bloomberg . The tax cuts, which were supposed to pay for themselves, have also swelled the deficit, making it even harder for President Trump to use them as a talking point in 2020.

Dan Eberhart, a major Republican donor said: “The Democrats really outmaneuvered the Republicans by convincing the American people that the main thrust of the tax reform package was to cut taxes for the wealthy. Republicans failed to fully explain the success to voters.”

Trump will try to promote the tax cut on Monday in Minnesota, a potential swing state for 2020. It’s part of a week of events designed to promote the tax law’s effect on the economy.

The tax cuts were sold as a catalyst for economic growth and reduction of the deficit. Senate Majority Leader Mitch McConnell assured the public in December 2017 that the measure would contain the deficit and also be a “revenue producer”. Larry Kudlow said last week at the tax cut package has “already paid for itself ” – a statement that does not gel with government data.

Instead, the United States’ budget shortfall grew by 17% to $779 billion in 2018, which the CBO has attributed partly to the tax law. Along with additional spending that has been signed into law, the CBO projects this deficit will surpass $1 trillion by 2020. 

However, when the law passed, Mitch McConnell said: “If we can’t sell this to the American people, we ought to go into another line of work.”

An NBC/Wall Street Journal poll this month showed that just 17% of Americans believed their taxes had been cut. A Reuters poll in March showed that 21% thought the same. This is despite an analysis by the nonpartisan Tax Policy Center that two out of three taxpayers would see their taxes go down. The biggest benefits, however, go to the top 1%, who are expected to receive an average tax break of $62,000, while the middle 1/5 of earners got an average tax cut of $1090, or about $20 per week.

Nathan Rigney, an analyst at H&R Block’s Tax Institute told the New York Times: “The vast majority of people did get a tax cut. Just now we have real data to back that up. Most people didn’t recognize the increase in take-home pay, or at least didn’t attribute it to the tax cut. Some of them might realize it now that they’re filing their taxes, but it’s little consolation to discover that you received a couple thousand dollars during the year but you already spent it.”

The law is now being compared to President Barack Obama‘s stimulus package in 2009, where most Americans received a tax break but the incremental gains were so small that most didn’t notice. Eberhart claimed that the Trump administration wanted “an immediate reaction” by reducing the amount the IRS withheld from regular paychecks. But the amount was too small to notice, he continued. Meanwhile, due to lower withholdings, tax refunds were smaller than expected, down about 1.1% overall, but still noticeable to individual households.

White House economic adviser Kevin Hassett said on Friday that the poll results could be explained by frustration with the tax system broadly and may not be attributed to the tax cuts. He stated data like the Michigan survey of consumer sentiment, that “suggest[ed] that you should have a very optimistic outlook for economic growth this year.”

Countering his point, Vanessa Williamson, a political scientist at the Brookings Institution told the NY Times: “People aren’t taking out their pay stubs and Excel spreadsheets and making their determination. Instead they’re making a broader statement about whether the government is doing a good job.”

The tax law was passed by Republicans without any Democratic support and lowered the corporate tax rate from 35% to 21%. It also closed or tightened various tax breaks, like capping the amount of state and local taxes that could be deducted.

Meanwhile, treasury secretary Steve Mnuchin said on FOXBusiness Monday that there is “no question” that the advantages from the tax plan have just begun to kick in. He said they will become more apparent over the next few years.

For what it’s worth, democrats spent the 2018 midterm campaign hammering the law as a giveaway to the top 1% that would widen the deficit. A Republican commissioned poll found that this message was effective. CNN exit polls on Election Day 2018 showed that 29% said that the new tax law helped their finances, but 45% said the law said the law had no impact and 22% said it would hurt their finances.

Taxes continue to be a hot button issue that will likely dominate the upcoming 2020 Presidential election. We reported just two months ago that Americans continued to flee to low tax states. According to the most recent Census Bureau data on state-to-state migration flows, 523,000 people moved to California from other states. But at the same time, more than 661,000 Californians moved to other states.

That is, on net, nearly 138,000 more people left California than moved into it from elsewhere in the US. Yet, California isn’t the worst in this regard. Both Illinois and New York lost even more residents to other states with net losses to other states totaling 144,000 and 167,000, respectively. These numbers reinforce what has become a well-entrenched trend of US residents moving from high-tax states to low tax states.

In fact, among the top-ten states that the largest number of Americans have fled, seven of the ten are states which rank among the top 15 states for the worst tax burdens – according to the Tax Foundation’s most recent report on state and local taxation. New York is ranked worst in the nation, while California is ranked at number four.

At the other end of the spectrum are states with far more modest tax burdens. Florida, which tops the list with a net 118,000 new residents from other states, is ranked by the Tax Foundation as having the 31st highest tax burden. Arizona, at number two, with 98,000 new residents from other states, is ranked at an even better number 34. Texas is near dead last (in a good way) at number 47. Even Washington State, which gained nearly 62,000 new residents from other states, is ranked in the middle at number 27. (Oregon is an exception, as it is ranked as having the 16th worst tax burden in the nation.)

via ZeroHedge News http://bit.ly/2VNTMF1 Tyler Durden