Tag: news

The financial system is breaking down at an unimaginable pace–

Now it’s $13 trillion.

That’s the total amount of government bonds in the world that have negative yields, according to calculations published last week by Bank of America Merrill Lynch.

Given that there were almost zero negative-yielding bonds just two years ago, the rise to $13 trillion is incredible.

In February 2015, the total amount of negative-yielding debt in the world was ‘only’ $3.6 trillion.

A year later in February 2016 it had nearly doubled to $7 trillion.

Now, just five months later, it has nearly doubled again to $13 trillion, up from $11.7 trillion just over two weeks ago.

Think about that: the total sum of negative-yielding debt in the world has increased in the last sixteen days alone by an amount that’s larger than the entire GDP of Russia.

Just like subprime mortgage bonds from ten years ago, these bonds are also toxic securities, since many of are issued by bankrupt governments (like Japan).

Instead of paying subprime home buyers to borrow money, investors are now paying subprime governments.

And just like the build-up to the 2008 subprime crisis, investors are snapping up today’s subprime bonds with frightening enthusiasm.

We’ll probably see $15 trillion, then $20 trillion, worth of negative-yielding subprime government debt within the next few months.

So this trend will continue to grow for now, until, just like in 2008, the bubble bursts in cataclysmic fashion.

It took several years for the first subprime bubble to pop. This one may take even longer. But even still, we can already see the consequences today.

A few months ago I told you about the remarkable $3.4 trillion funding gap in the US pension system.

Remember, we’re not talking about Social Security– that has its own $40+ trillion shortfall.

I’m talking about private companies’ retirement pensions, or public service worker pensions at the city and state level.

(By the way, this is NOT strictly a US phenomenon. Europe suffers its own $2 trillion pension shortfall.)

There’s zero mathematical probability that these pensions will be able to meet their obligations.

They’re already underfunded. And the problem is getting worse, thanks in part to this plague of low and negative interest rates.

You see, most pension funds must achieve a low-risk investment return of roughly 8% in order to stay solvent and pay their beneficiaries.

And making an 8% return used to be a reasonable assumption.

25-years ago, government bonds often yielded more than 8%.

So unsurprisingly, the average return for pension funds over the last 25-years has been around 8% according to the National Association of State Retirement Administrators.

But that’s no longer the case.

With such a huge portion of the bond market now with negative yields, it’s virtually impossible for pension funds to keep their promises.

Even Warren Buffett has written that “[pension] funding is woefully inadequate,” and, “In a world where people are living longer and inflation is certain, those promises will be anything but easy to keep.”

Bottom line: anyone who is ever considering retirement must heavily discount the future promises of unfunded pensions and Social Security.

The younger you are, the less likely you are to receive benefits they’ve promised.

But this also gives you time to prepare and take matters into your own hands. Consider the following:

1. Establish a better retirement plan.

Millions of people currently have their retirement savings trapped in some generic retirement package, like a managed 401(k) that’s directed by a gigantic financial institution.

You could easily be paying 1% to 2% per year in fees. In other words, your investment return is 1% to 2% less than what it should be.

That might not sound like much, but over time it makes a huge difference.

Over the course of a few decades, even a 0.5% difference in your average annual investment return can add up to hundreds of thousands of dollars.

It’s imperative to cut unnecessary costs on your retirement plan.

Depending on the investments you make, establishing a more flexible retirement structure like a solo(k) or self-directed IRA is one way to potentially reduce those costs.

It’s possible to fix your expenses to a particular dollar amount (typically just a few hundred dollars each year) rather than a percentage of assets.

So if your retirement account is somewhere between $50,000 to $100,000, you could save a lot of money and really boost your retirement.

2. Expand your investment universe.

Just like saving on your retirement structure’s costs, or being able to put more money away, raising your average annual investment return by just 1% can have a profound impact on your retirement.

This means being willing to step outside of the crowd and go beyond traditional investments like stocks, bonds, and mutual funds.

It’s not to say you can’t make money with these assets classes.

But the more solid investment options you have to choose from, the more likely you’ll be able to generate higher returns.

Again, this is where a flexible retirement structure really makes a difference.

With a solo(k) or self-directed IRA, you’ll be able to invest in numerous asset classes beyond the mainstream retirement options, including physical precious metals, private equity, venture capital, cash-producing real estate, and more.

3. Start a business.

I’m not talking about the next Google or any major enterprise. But with a little bit of education and effort, it’s possible for absolutely anyone to learn the basic skills needed to make extra money.

In the Digital Age where e-commerce prevails, there are countless options to generate independent income.

And again, with the right structure, it’s possible to push the bulk of your side business’ income into a tax-deferred retirement fund.

[I’ll have a dedicated article on this soon with some more resources and recommendations.]

from Sovereign Man http://ift.tt/2a1IJUe
via IFTTT

The entire financial system is exposed to this junk bond market

[Editor’s note: This letter was penned by Tim Price, London-based wealth manager and editor of Price Value International.]

Japan got there first. 15 years ago, we met a Japanese equity manager who made an astonishing prediction:

“Japan was the dress rehearsal. The rest of the world will be the main event.”

That seemed an extraordinary suggestion 15 years ago. Today, not so much.

In the aftermath of the late 1980s real estate and stock market bubble, and its subsequent banking crisis, Japan became a giant laboratory experiment for novel insane monetary policies.

In 2001 the Bank of Japan tried Quantitative Easing. It was a policy that Richard Koo of the Nomura Research Institute described as the “greatest monetary non-event”.

It turned out, not for the first time, that academic economists had it all wrong.

Borrowers, not lenders, were the fundamental bottleneck in Japan’s recession:

“The central bank’s implementation of QE at a time of zero interest rates was similar to a shopkeeper who, unable to sell more than 100 apples a day at $1 each, tries stocking the shelves with 1,000 apples, and when that has no effect, adds another 1,000.

As long as the price remains the same, there is no reason consumer behaviour should change – sales will remain stuck at about 100 even if the shopkeeper puts 3,000 apples on display.

This is essentially the story of QE, which not only failed to bring about economic recovery, but also failed to stop asset prices from falling well into 2003.”

The central banks of the rest of the developed world have had more success in boosting asset prices through their own deployment of QE, but they have had just as little impact on their real economies.

What QE has done is made the asset-rich richer, and the poor relatively poorer. Inasmuch as social equality is a stated aim of most governments, QE has been a disaster.

But it has done wonders for bond prices.

John Seagrim of CLSA points out that despite having yielded very little for a very long time, Japanese Government Bonds (JGBs) have been surprise performers in 2016.

The 40-year JGB has risen by 50 percent in price since the start of the year, reducing the annual yield to a level that’s now just 7 basis points (i.e. 0.07%).

Assuming investors hold the JGB to maturity in 2056, they will achieve a total return of just 2.96 percent over the life of the bond, not accounting for inflation or taxes.

Those investors might be interested to see what they could earn from a different asset class.

If they bought and held a Topix ETF (Japanese stocks) instead, they would earn a current dividend yield of 2.37 percent per year, not including any gains from potential appreciation in the share prices.

Of course, many government bonds are more expensive than the 40 year JGB in that they offer no yield whatsoever, or only a negative one.

10-year German bonds currently yield minus 0.07 percent. 10-year Swiss paper currently yields minus 0.64 percent. The 10-year US Treasury yield of 1.58% seems almost too good to be true at this point, a sad reflection of our investing environment.

Yet somehow, despite policy failures that are made obvious by the lowest interest rates ever recorded in human history, a persistent narrative still dominates financial markets: all-knowing, omnipotent central bankers are still in full control of the situation and will do ‘whatever it takes’ to maintain order.

As Richard Koo puts it:

“Even though QE failed to produce the expected results, the belief that monetary policy is always effective persists among economists in Japan and elsewhere.

To these economists, QE did not fail, it simply was not tried hard enough. According to this view, if boosting excess reserves of commercial banks to $25 trillion has no effect, then we should try injecting $50 trillion, or $100 trillion.”

But investors are starting to realize that ‘whatever it takes’ may not be enough.

Ben Hunt of Salient Partners writes convincingly that this status quo narrative is starting to falter very badly, and in the face of events like Brexit, becoming harder and harder to maintain:

“… status quo political and economic institutions – particularly Central Banks – have failed to protect incomes and have pushed income and wealth inequality past a political breaking point.

They made a big bet: we’re going to bail-out / paper-over the banks to prevent massive losses in the financial sector, we’re going to inflate the stock market so that the household sector feels wealthier, and we’re going to make vast sums of money available for the corporate and government sectors to borrow really cheaply.”

Narratives die hard, but when the ‘omnipotent central bank’ narrative finally and conclusively fails, bond investors will suffer a religious experience as the market rushes to reprice these heavily overvalued bonds.

Think about it: how much will a bond with a NEGATIVE yield be worth on the day that investors lose confidence in their central bankers’ abilities to control the weather financial markets?

Investors holding these junk bonds are going to take a big hit.

Here’s the rub: even if you don’t own bonds personally, you may still have significant exposure.

More than likely your pension fund and your bank all have substantial positions in low (or negative) yielding debt. So there may be a system-wide hit once this repricing occurs.

Ben Hunt again:

“Our portfolios should minimize the maximum risk the world actually presents, not maximize the reward our crystal ball models predict. . .

For me, that means real assets and real yield, fractional ownership in real companies with real cash flows from real economic activity with real people. You know, what a stock market used to mean before it became a Central Bank casino.”

from Sovereign Man http://ift.tt/2a5xlFg
via IFTTT

7 Things Trump Must Do

Via The Mises Institute,

An Open Letter to Donald Trump 

We the undersigned urge you, the presumptive Republican nominee for President, to support a rebirth of free-market capitalism in the U.S. You have said repeatedly that you want to make American great again. We agree with you. And we assert that the most effective way to start that process would be to affirm your principled support for economic liberty, for open and competitive markets, and for a foreign policy that rejects both protectionism at home and interventionism abroad.

Over the last two decades especially, the U.S. economy has been saddled increasingly with burdensome government rules and regulations that stifle innovation and retard economic growth. Some of the more obvious examples are the massive command and control system put in place under the Affordable Care Act (ACA); the enactment of purposely mislabeled “free trade” agreements (such as NAFTA) that actually have harmed some U.S. businesses and destroyed jobs while subsidizing other politically connected firms; the failed so-called “War on Drugs” which wastes private and public resources and contributes to rising violent crime rates; and the expansion of inefficient and rights-violating environmental regulations that have hampered productivity and increased the overall cost of doing business; and, finally, the pursuit by the Federal Reserve of a pernicious decade-long low-interest rate monetary policy which has (again) created a massive speculative bubble in housing and on Wall Street … that is sure to end badly.

As a successful businessman, you must understand that these harmful economic policies of the past must be changed by the next president and Congress if the U.S. is to continue to remain efficient and prosperous. And you also must understand that the key to any economic rebirth in the U.S. is not old-fashioned Keynesian deficit spending, quantitative easing by the Fed, or the enactment of higher minimum wage laws. The key to any sustained economic recovery is the legal protection of private property rights and the adoption of free markets where entrepreneurs, alert to price and profit signals, guide scarce resources into their most productive use. Below we suggest a concise list of first-order public policy changes that could set the early agenda for your new administration:

First, the Affordable Care Act should be repealed in its entirety and, as you have already pointed out, any prohibition on interstate competition in health insurance also should be repealed. Health care and health care insurance should be left to the market.

 

Second, all recent thousand-page international trade agreements should be replaced with a single, clearly worded paragraph that allows any U.S. business (or consumer) to trade with any other business (or consumer) anywhere else in the world on terms that are mutually satisfactory. Period.

 

Third, you or the Congress should immediately remove cannabis (marijuana) from its current Schedule One prohibition status under Federal law; cannabis and drug policy generally should be left entirely to the states. (Ideally the entire Drug War should be scrapped and the production and consumption by adults of any “drug” should be legalized.)

 

Fourth, the federal minimum wage should either be permanently fixed at its current rate or reduced; legally minimum wages should be left entirely to the states. (Ideally, all minimum wage laws should be repealed since they cause job destruction.)

Fifth, the U.S. corporate tax rate should be reduced so that it is the lowest (not the highest) in the industrial world; ideally, it should be repealed entirely because it constitutes double taxation on shareholders of corporations who also pay income tax on their dividends.

 

Sixth, the Federal Reserve should be required by law to end all forms of quantitative easing and interest rate regulation now accomplished primarily through open market operations; interest rates for savers and investors should be market determined. In addition, the Federal Reserve’s budget should be determined by Congressional appropriations like that of any other federal department or agency.

 

And finally, as a long-run solution for our recurring financial problems and economic recessions, replacing the current inflationary paper dollar with alternative monetary arrangements that provide for a sound, market-based commodity money, such as the gold standard, should be seriously considered.

There will be Democratic as well as (some) Republican opposition to these changes. Count on it. But your job will be to hold fast to basic principles and persuade the opposition that long lines at airport security and rising health care costs are based on economic ideas that are totally misguided. Socialism and progressivism and crony capitalism have failed miserably.

We need common sense capitalism and you now have a clear mandate to initiate its rebirth.

Sincerely,

Joseph T. Salerno, Pace University

Mark Thornton, Auburn University

Henry Thompson, Auburn University

Jo Ann Cavallo, Columbia University

Dominick T. Armentano, University of Hartford

Christopher Westley, Florida Gulf Coast University

Murray Sabrin, Ramapo College of New Jersey

Thomas Tacker, Embry-Riddle Aeronautical University

Peter M. Kerr, Southeast Missouri State University

Thomas DiLorenzo, Loyola University Maryland

Marshall DeRosa, Florida Atlantic University

Walter Block, Loyola University New Orleans

Robert Batemarco, Fordham University

Samuel Bostaph, University of Dallas

Paul A. Cleveland, Birmingham-Southern College

Peter G. Klein, Baylor University

Thomas L. Wenck, Michigan State University

John B. Egger, Towson University

Douglas Butler, Texas Christian University

William N. Butos, Trinity College

Paul Prentice, Colorado Technical University

Butler Shaffer, Southwestern University Law School

Judd Patton, Bellevue University

Paul Gottfried, Elizabethtown College

Jim Cox, Georgia Perimeter College

Roger Clites, Tusculum College

Bruce Koerber, Divine Economy Consulting

via http://ift.tt/2a33OMV Tyler Durden

France “Is On Verge Of Civil War” Security Chief Warns Feckless Hollande

Just a week ago, French General Directorate for Internal Security Patrick Calvar told members of the French parliamentary commission that thanks to the increasing frequency of sexual assaults by islamic migrants, "Extremism is growing everywhere… We are on the brink of civil war." Now, in the wake of the Nice terror attacks that left 84 people dead with over 300 others wounded, Calvar is doubling down warning an increasingly questioned Hollande that an inevitable confrontation between the far right and Muslims looms, posing more of a threat than terrorism.


As SputnikNews reports, French President Francois Hollande faces stern criticism for his feckless response to the growing wave of Islamic migrants and the horrors of terrorism that have followed in their wake leading not only to a resurgence of the far-right nationalism within the country, but also leading members of his own cabinet to question whether he is overseeing the descent of France into a bloody civil war.

That was the warning provided by the nation’s top security official, Patrick Calvar, in the wake of the Nice terror attacks that left 84 people dead with over 300 others wounded when Tunisian born Daesh terrorist Mohamed Lahouaiej Bouhel drove a 19-tonne cargo truck into a crowd celebrating Bastille Day – the country’s national holiday of independence and liberation marking the French Revolution.

 

Yet, this is not the first time that Calvar has made this dreary projection for the future of France.

 

Rather the security official has turned out to be quite prescient providing the same warning to the French parliament on July 12, 2015 – months after the Charlie Hebdo shooting, but long before horror descended upon the Bataclan Theater in Paris on November 13, 2015 and the city of Nice in the past week.

The confrontation that he warned of was what he first called “intercommunity confrontations” which he later explained was a politically correct way of saying that the far-right is ramping up for a full-fledged “war against Muslims.”

He cautioned that “one or two more terror attacks and we may well see a civil war.”

Perhaps the people that Calvar has attempted in despair to jolt into action need look only as far as recent presidential polling which shows:

the far-right Nationalist Front leader Marine Le Pen, daughter of the much more bombastic and bigoted Jean-Marie Le Pen, leading all presidential candidates by a healthy margin scoring 28% of the popular vote while former President Nicolas Sarkozy could only must 21% of the vote and the nearly helpless Francois Hollande received support from 14% of the electorate while boasting a historically bad 10% approval rating.

Those results were long before terror once again visited the country – this time in France – but shows a growing resentment among the population for the open borders of the European Union’s Schengen agreement in addition to distrust of the unelected cabal that rules the country from Brussels, Belgium – the European Commission.

As Sputnik concludes, perhaps Patrick Calvar’s warnings are too late – or perhaps they were never heard at all.

As we noted previously, it is not just the French who are hitting the panic button:

Mr Calvar's comments have come as the former MI6 boss Richard Dearlove also said that Europe faced a "populist uprising" if Governments do not take control of the migrant crisis.

 

And security experts in Germany have also warned Chancellor Angela Merkel that the middle class was becoming increasingly radicalised because of her open borders migrant policy.

via http://ift.tt/29HZpgi Tyler Durden

Lira Slumps After Turkish Parliament Evacuation On Report Of “Imminent Attack”

Update: to nobody’s surprise, moments ago the Turkish police is said to have denied such reports of an “imminent attack.”

* * *

Whether credible, or the latest in a long line of false flag events to spread panic and fear and further cement Erdogan’s authoritarian power, moments ago newswires reported that people are being evacuated form the Turkish parliament building as there has been information about an imminent attack on the building, the Cumhuriyet newspaper reported on Monday.

“We have been informed of an attack. The Meclis is being evacuated,” the newspaper quotes member of the Peoples’ Democracy Party Ziya Pir.

The news has pushed the Turkish Lira to intraday lows, which sending gold and safe haven assets modestly higher. US equity futures, in true form, remain unchanged.

And in other news, while algos focus on this latest “staged” attack, the real news was reported by Turkish NTV which said that Turkey bans all trips by public employees, ostensibly to make it easier for Erdogan to hunt them down and arrest them, all in the name of the “democratic process” so important to NATO.

via http://ift.tt/29GxzFd Tyler Durden

John Kerry Threatens Turkey With NATO Expulsion

While the experts debate if Turkey’s flash coup was staged or merely grossly incompetent, a rather theatrical fallout is taking place between Turkey and the US.

Recall that on Saturday, as part of its populist campaign to blame the coup on the US-based cleric Fethullah Gulen, Turkey accused the US of being “behind the military coup“, to which John Kerry promptly responded that such allegations are “utterly false” and harmful to relations. Kerry also said that authorities should respect the rule of law during their probe of the coup. Kerry also noted that there would be no prompt deportation of Gulen (something which is also in Erdogan’s favor), when he said that “we fully anticipate that there will be questions raised about Gulen, and obviously we invite the government of Turkey … to present us with any legitimate evidence that withstands scrutiny and the United States will accept that and look at it and make judgments appropriately,” he said.

This however did not lead to any moderation in Turkish rhetoric, and yesterday, Prime Minister Binali Yildirim threated to go to war with any country that would “stand by” the exiled Fethullah Gulen; this would naturally imply the US which is where Gulen is currently located. “The US is behind the coup attempt. A few journals that are published there [in the US] have been conducting activites for several months. For many months we have sent requests to the US concerning Fethullah Gulen. The US must extradite him,” said the Labor Minister in a statement.

Curiously, despite all the posturing, Turkey has yet to send out a formal extradition request.

However, the tensions between Turkey and US appear to have spilled over this morning, when moments ago John Kerry threatened Turkey that it could lose its NATO membership “if it fails to uphold the principles of democracy in the wake of an attempted coup” the US has warned. 

“NATO also has a requirement with respect to democracy and NATO will indeed measure very carefully what is happening,” Kerry tells reporters in Brussels after attending a meeting of European Union foreign ministers

“My hope is that Turkey is going to move in ways that do respect what they have said to me many times is the bedrock of their country,” he says.  Kerry adds: “I spoke with the foreign minister three times in the last days and he assured me that they fully intended to respect the democratic process and the law; now obviously a lot of people have been arrested and arrested very quickly” and “the level of vigilance and scrutiny is obviously going to be significant in the days ahead.”

 

This is happening as none other than one of the EU’s top bureaucrats voiced a suggestion that the coup had indeed been staged. As Reuters reported earlier, the swift rounding up of judges and others after a failed coup in Turkey indicated the government had prepared a list beforehand, according to EU commissioner dealing with Turkey’s membership bid, Johannes Hahn, said on Monday. “It looks at least as if something has been prepared. The lists are available, which indicates it was prepared and to be used at a certain stage,” Hahn said. “I’m very concerned. It is exactly what we feared.”

So very concerned that Europe is doing, drumroll, precisely nothing. Why? Because Erdogan still holds two million Syrian refugees as the most important bargaining chip that allows him to do anything and everything and get away with it, or else unleash another wave of migrants into Germany, leading to another collapse in the popularity of the German chancellor if not worse.

That said, we wonder if Kerry has seen the latest news according to which Turkey has “democratically” purged around 8,000 police officers following the failed coup, with more than 6,000 people in the army, the judiciary and other state bodies arrested as part of President Recep Tayyip Erdogan’s response to Friday’s staged coup, in which rebel pilots held Erdogan’s Gulfstream in their sights and yet inexplicably did not shoot.

At a joint news conference with EU foreign police chief Federica Mogherini, US Secretary of State John Kerry said that America stands “squarely on the side of the elected leadership in Turkey,” but that “we urge the government of Turkey to to uphold the highest standards of respect for the nation’s democratic institutions and the rule of law”.

“We will certainly support bringing the perpetrators of the coup to justice but we also caution against a reach that goes beyond that and stress the importance of the democratic rule being upheld,” he added.

We, on the other hand, expect empty jawboning and threats to continue even as Erdogan rounds up tens of thousands of political oponents, all in the name of the “democratic process.”

via http://ift.tt/29Prpkf Tyler Durden

The State of Cleveland’s RNC Security State

Bring tha noiseThe 2016 Republican National Convention (RNC) kicks off in Cleveland today, and with it, an unprecedented level of security provided by the first city ever to host a major political convention while operating under a federal consent decree because of systemic police misconduct. Everyone from local authorities to journalists to protesters are on edge and preparing for the worst—perhaps even worse than Donald Trump’s nomination acceptance speech.

500 members of Cleveland’s police force and 2,500 officers from nearby towns, in conjunction with the Secret Service, will be responsible for maintaining the safety and security of both the natives and the 50,000 out-of-towners who are expected to descend on the city, including delegates, media, and a whole lot of protesters. But you, the taxpayer, will be paying for that security in the form of a $50 million federal grant. (An equal grant will be spent by law enforcement in Philadelphia next week for the Democratic National Convention.) However, with the security budget becoming ever-more-stretched, Ohio residents recently got a $4 million bonus to their share of the RNC security tax burden.

The history of violence committed by both Trump supporters and opponents at the candidate’s rallies over the past year—to say nothing of the spasms of violence and terrorism in various parts of the country (and beyond) over the past few weeks—has added a sharper edge to what was already expected to be a tense four days in northeastern Ohio.

For a while, a contested convention seemed possible, which caused Trump to speculate that “riots” could be possible in such an event. Now that the Republican Party appears to be begrudgingly falling into line behind Trump, such palace intrigue seems unlikely, but the cost of that uneasy peace is that Trump is the legitimate nominee of one of the two major parties in the U.S.

Regardless of what happens with the dog-and-pony show inside Quicken Loans Arena, there will be action outside.

To prepare for that, Cleveland has reportedly purchased over three miles of “Blockader” steel barricades, plus over 3,000 feet worth of six foot-high barricades, over 2,000 sets of riot gear, and 10,000 sets of plastic handcuffs.

Almost half of downtown Cleveland, roughly 1.7 square miles, will be under major restrictions as the designated “event zone.” Within that area, according to the New York Times, everything from glass bottles and tennis balls to “large bags and backpacks, mace, loudspeakers, tents, coolers and canned goods” will be prohibited. The Washington Post notes that it has provided a “standard kit” to its staff attending the RNC, including “helmets, gas masks and flak jackets,” but gas masks are among the items banned from the event zone.

Because Ohio is an “open carry” state, guns will be permitted in the event zone, but banned from smaller “secure zones,” such as the arena, which will be controlled by the Secret Service. The Cleveland PD’s union president Steve Loomis told CNN he is planning to ask Ohio Gov. John Kasich to “absolutely outlaw open-carry in Cuyahoga County until this RNC is over.” Kasich responded, “Ohio governors do not have the power to arbitrarily suspend federal and state constitutional rights or state laws as suggested,” according to CNN. 

Cleveland’s hospitals will be “siege-proof,” according to New York Magazine:

Cleveland’s hospitals are barring their trauma surgeons from vacationing next week, setting up incident command centers to centralize decision-making in the event of an emergency, and stockpiling enough equipment to survive 96 hours without re-supply, just in case large portions of the city fall under siege.

While protesting, the Marshall Project recommends not talking back to police lest you be slapped with a “disorderly conduct” or “obstructing official business” charge, and being mindful of posting anything that could incite trouble on the internet, as Cleveland criminalized “improper use of social media” in 2011. 

Reacting to the violence visited upon police and demonstrators at a protest in Dallas earlier this month, some protesters have said they will avoid the designated “protest zone” set up by the Secret Service, and instead maintain a presence at their rally location nearby. And if the prospect of being targeted by lone wolf psychopath snipers wasn’t terrifying enough, Cleveland.com reports that the FBI has been knocking on local activists’ doors, a coordinated action the bureau has described as “community outreach” but which one community organizer said “still implies that there could be consequences there.”

The quadrennial political conventions are always “hot-button” events and the specter of 1968’s unrest has long loomed over this electoral season. And while every four years we’re told “this is the most polarized America has ever been,” the temperature sure feels higher on the eve of the RNC, and it can’t be solely placed at the feet of Donald Trump’s awful, ignorant, incoherent rhetoric. Issues such as police violence, racism, and a populist anger at the American political and financial establishments have been brewing for years. 2016 just happens to be the year they all seemed to boil over.

We can only hope that the security state currently enveloping Cleveland runs effectively and isn’t all so much pointless security theater or worse, an excuse to deploy the brute force of state power in the name of “security.”

Reason and Reason TV will be reporting from Cleveland throughout the RNC.

from Hit & Run http://ift.tt/29GvKYz
via IFTTT

Frontrunning: July 18

  • Global stocks rise on SoftBank bid for ARM, dollar up vs yen after Turkey crushes coup (Reuters)
  • U.S. backs justice for coup plotters but urges Turkey to keep rule of law (Reuters)
  • Law and Order Will Be a Big Republican Convention Them (WSJ)
  • SoftBank to buy UK chip designer ARM in $32 billion cash deal (Reuters)
  • Rate-starved U.S. banks happily gobble mortgage business (Reuters)
  • Oil Prices Steady but Products Glut Looms (WSJ)
  • Bank of America Profit Tumbles 19% As NIM Hits Record Low, EPS “Beat” On Surge In Cost-Cutting (ZH)
  • Obama Decries Baton Rouge Killings of Police as Unrest Mounts (BBG)
  • Baton Rouge shooter was ex-Marine who denied ties to any group (Reuters)
  • Baton Rouge: A city divided between police and the policed (Reuters)
  • EU Said to Eye ‘Nuclear Option’ to Force May’s Hand on Exit (BBG)
  • EU reminds Turkey it bound by treaty not to use death penalty (Reuters)
  • Traders Reviving Fed Rate-Rise Bets Put a Floor Under the Dollar (BBG)
  • Ireland Hits Brexit Alarm in Biggest Foreign Crisis in 50 Years (BBG)
  • Trump Sends Dire Warnings to Nervous Nation as Convention Begins (BBG)
  • A Globe-Trotting Billionaire Defends Trump’s Trade Policy (BBG)
  • LendingClub Names BlackRock’s Dunne Chief Capital Officer (BBG)

 

Overnight Media Digest

WSJ

– Japan’s SoftBank Group Corp has reached a deal to buy UK-based chip designer ARM Holdings Plc in an all-cash deal valued at more than $32 billion, according to a person familiar with the situation. http://on.wsj.com/2a1olkP

– Volkswagen AG executives in the United States have pledged to compensate hundreds of American franchise dealers who have been damaged by the emissions scandal, according to dealers who met with the company on Friday. http://on.wsj.com/2a1ouon

– At a mid-June dinner with a delegation of Saudi Arabia officials, Deputy Crown Prince Mohammed bin Salman indicated his kingdom aimed to do more Silicon Valley deals like the $3.5 billion investment in Uber Technologies Inc announced two weeks earlier, according to a person who attended the feast hosted at San Francisco’s Fairmont Hotel. http://on.wsj.com/2a1piK0

– A gunman fatally shot three police officers and wounded three others before being killed by police in Baton Rouge, Louisiana, on Sunday morning, the second deadly multiple shooting to target police in 10 days. http://on.wsj.com/1ejfriJ

– The failed coup attempt in Turkey has fueled a sharp conflict with Washington over the fate of a Turkish cleric in the United States, while posing a broader challenge to the West’s efforts to fight terror and promote liberal democracy. http://on.wsj.com/2a1psAT

 

FT

Bank of England rate-setter Gertjan Vlieghe said on Sunday he had already seen early signs that Britain’s economy is heading for a period of slower economic growth and higher inflation after last month’s Brexit vote.

Last week in London, Iran’s energy minister Hamid Chitchian met representatives of Siemens AG and Rolls-Royce Holdings Plc to discuss partnership in power generation technology. The talks indicate a gradual opening of Iran’s economy following the lifting of international sanctions.

 

NYT

– SoftBank is nearing a deal to acquire British semiconductor company ARM Holdings. ARM had a market capitalization of about $22 billion as of Friday’s close. SoftBank’s acquisition of ARM’s is one of its largest ever. http://nyti.ms/29NQcUS

– Bridgewater Associates is telling recruitment firms to cancel interviews with prospective employees, and some of the firm’s external recruiters have been told that Bridgewater will not use them for the time being. http://nyti.ms/29NJ4f3

– A gunman fatally shot three law enforcement officers and wounded three others in Baton Rouge on Sunday before being killed in a shootout with the police. The attack’s motive was unclear. http://nyti.ms/29Ozrr7

 

Britain

The Times

Presidential power grab after failed Turkish coup

President Erdogan of Turkey launched an unprecedented purge of the military and judiciary after a failed coup that opened the clear path to absolute power that he has long been accused of craving. Almost 6,000 people have been detained since Friday’s attempt to oust Erdogan, including at least 2,840 members of the military and 2,745 judges. (http://bit.ly/29TnaVg)

The Guardian

Bank of England to close personal banking service for employees

Bank of England employees will lose a 300-year-old job perk after it was announced that a small staff bank within Threadneedle Street is closing. Staff had been able to access Bank of England accounts for personal use, even after retirement. But the Bank has confirmed that the service is coming to an end following a cost-cutting review initiated by its governor, Mark Carney, soon after he arrived in 2013. (http://bit.ly/29Fhq2y)

Brexit impact is going to be horrible, says leading City fund manager

One of the leading money managers in the City of London has said the fallout from Britain’s vote to leave the EU will be “horrible” and that the Square Mile is still “slightly stunned” by the result. Richard Buxton, the chief executive and head of UK equities at Old Mutual Global Investors (OMGI), which manages 26 billion pounds of funds on behalf of individual investors and institutions, said warnings from the pro-EU campaign about the impact of Brexit before the referendum were well-placed. (http://bit.ly/29FhxuW)

The Telegraph

HS2 railway project to go ahead despite change in government

The HS2 railway project will still go ahead despite the change in government, the new Transport Secretary has pledged. Chris Grayling vowed not to scrap HS2, easing fears of those concerned that it may have been abandoned by Theresa May’s new government. (http://bit.ly/29TlH1f)

Sky News

Santander Eyes Restructured RBS Branch Deal

Santander UK Plc is examining a restructured deal to acquire millions of customers of rival Royal Bank of Scotland Group Plc as a five-year process to create a new high street lender remains mired in technology problems. The Spanish-owned bank, which is already the fifth-biggest in Britain, has been looking at whether it can take on an entity due to be rebranded as Williams & Glyn through a so-called asset transfer deal. (http://bit.ly/2a31G7t)

Hammond Targets Sheffield Deal On China Visit

A string of urban regeneration projects in Sheffield worth nearly 200 million pounds is among the trade deals being targeted by Philip Hammond when he visits China for the first time as chancellor this week. Hammond is expected to sign a deal with Sichuan Guodong Construction Company during a trip to China for the G20 finance ministers’ meeting in the city of Chengdu. (http://bit.ly/2a8UcT4)

Lad Bible Gets Its First CFO

A fast-growing British youth media brand TheLadBible Group, which publishes a digital magazine of the same name, will name former eBay executive Pete Wade as its first chief financial officer. (http://bit.ly/2alBnsv)

via http://ift.tt/2a4fm5d Tyler Durden

Partnering with Trump Reveals Mike Pence’s Hypocrisy: New at Reason

Mike PenceSteve Chapman had the opportunity to hear Indiana Gov. Mike Pence, now Donald Trump’s running mate, give a speech in 2010 about the proper character and conduct of a candidate holding office. Based on Pence’s comments, how could he possibly accept serving somebody like Trump?

Pence’s subject that day was the presidency, a topic on which he had—I can’t say “has”—uncompromising opinions. His mission was to instruct his audience on the proper characteristics and conduct of anyone holding the office. Though he largely avoided the name “Barack Obama,” it was clear he thought the 44th president is an affront to the Framers. 

The presidency’s “powers are vast and consequential, its requirements—from the outset and by definition—impossible for mortals to fulfill without humility and insistent attention to its purposes as set forth in the Constitution of the United States,” declared Pence, his gaze steely and his jaw firmly set.

Of power, he said, “Those who are entrusted with it must educate themselves in self-restraint.” 

View this article.

from Hit & Run http://ift.tt/29J7jpa
via IFTTT

Read This Before Investing Another Cent…

While CNBC and other perma-bulls claim that the stock market is a great investment today, the smart money is already prepping for a disaster.

Goldman Sachs has told its clients to “sell at the new high.”

Credit Suisse just told its clients stocks “haven’t looked this worrisome since the tech bubble.”

They’re correct. Stocks are in a bubble by virtually every reasonable metric.

According to CAPE, stocks have only been more expensive relative to earnings TWICE in history. Both of those situations were also massive bubbles.

The media Price to Sales (P/S) ratio for the S&P 500 is at an all-time high. Stocks have NEVER been more expensive based on this metric.

And finally, stocks, as priced in Enterprise Value to Earnings Before Interest Taxes Depreciation and Amortization (EV/EBITDA) is at levels not seen since 2000.

H/T the Euchre

A Crash is coming… and the time to prepare is NOW, before it hits.

On that note, we are already preparing our clients for this with a 21-page investment report titled the Stock Market Crash Survival Guide.

In it, we outline the coming crash will unfold…which investments will perform best… and how to take out “crash” insurance trades that will pay out huge returns during a market collapse.

We are giving away just 1,000 copies of this report for FREE to the public.

To pick up yours, swing by:

http://ift.tt/1HW1LSz

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

 

 

via http://ift.tt/2aa3oGL Phoenix Capital Research