Month: February 2016

What CNN’s Polling Last Night Tells Us About Rand Paul’s Campaign

Rand Paul’s appeal to voters seems to decline with age, reveals CNN’s entrance polls in Iowa last night.

Paul, who got 4.5 overall in the actual caucus vote, in CNN’s entrance poll was pulling 13 percent of 17-29 year olds (making him 4th in that category rather than his overall 5th), and only 2 percent of the 65 and olders, with a steady decline in the age groupings between. He was also 4th among 30-44 year olds, with 9 percent, if this entrance poll is representative.

Other tidbits and revelations: Paul’s gender appeal mix seemed even. (Race just isn’t relevant in mostly-white Iowa.)

Education level seemed to have little relevance to Paul. He pulled either 4 or 5 percent in CNN’s accounting in all education categories.

Paul did slightly better with first-time caucusgoers, with 6 percent of them vs. 4 for repeat customers.

Paul came in 4th among independents in this poll, with 10 percent. (Still way worse than his supporters would have guessed, where his independent appeal was supposed to be a big selling point.)

In the “very conservative” category, Cruz crushed with 44 percent to Paul’s 3 percent; Paul did slightly above his own average with 6 percent for “somewhat conservative.”

Paul got 7 percent of those who said they were not born-again or evangelical, 4 percent who said they were. (The very worldly and unconvincingly religious Trump was second with 22 percent of the born-againers.)

In the “what’s your most important issue?” category questions, the only one where Paul swung much above his 4.5 percent weight was “government spending.” He captured 9 percent of them. (And only 1 percent of those who privileged immigration as their top issue.)

For “top candidate quality,” Paul swung above weight on “shares my values” with 7 percent. (He even beat Trump’s 5 percent on that.)

from Hit & Run http://ift.tt/1QakNru
via IFTTT

BofAML Warns The Risk Of “Quantitative Failure” Is Growing

Year-to-date, BofAML's Baraby Martin notes that the market narrative has swung wildly. "US recession…", “global recession…", "China devaluation…", "commodity bust…" and "energy defaults…" have all been blamed as the major drivers of risk assets thus far in ‘16. The bearish concoction has left markets way down from their January levels. In credit, investment-grade spreads widened 16bp last month, and high-yield 36bp – the worst start to the year since 2008.

Over the last week, though, the "central banks to the rescue" narrative has also resurfaced. Not only has the BoJ embraced NIRP policies for the first time, but the ECB has strongly hinted at QE3 in March, and the Fed has added a dovish tinge to its outlook. “Yield”, as a secular theme, continues to stand tall, a full 7yrs after the GFC event. While the growth of negative yielding assets is now well flagged, it’s the other side of the coin which is talked about less: namely the decline in positive yielding opportunities.

Chart 1 shows that the global stock of positive yielding fixed-income debt has shrunk from a peak of $37.6tr in mid-2014 to just $32.5tr now, despite total debt levels rising by $4tr. since.

And yet, the market’s response to the salvo of central bank action lately has been a shallow bounce. On Friday, the Nikkei’s intra-day performance was up/down/up. And in Europe, our equity team’s “low risk” dividend basket has been lagging behind the jump in negative yielding government debt lately (chart 2).

Yield “fatigue” may be overtaking yield “euphoria”.

The further central banks go down the rabbit hole of unique monetary policy, the greater the fear factor of how normality will eventually be restored. And as Michael Hartnett highlights, the risk of “quantitative failure” in markets grows.


via Zero Hedge http://ift.tt/1PT0JzU Tyler Durden

The Solution to the Debt Ceiling Debacle: New at Reason

Today the House Committee on Financial Services’ Subcommittee on Oversight and Investigations held a hearing titled “Federal Spending and the Debt Limit.” Among the witnesses was George Mason University Mercatus Center Senior Fellow Veronique de Rugy.

De Rugy made four main points:

  • High and increasing debt has adverse consequences for our economy.
  • There are a number of institutional reforms that can be implemented to check the spending that drives this growth in debt.
  • Entitlement reform is essential, as rapidly burgeoning growth in entitlements is driving the growth in spending.
  • The latest increase in the debt ceiling gives us some time to reach an agreement that reflects real reform, and there are sufficient assets available that default is not a concern.

View this article.

from Hit & Run http://ift.tt/1PSY5tU
via IFTTT

Venezuela: On the Verge Of Political Turmoil

Via Stratfor,

Less than a month after being sworn in, Venezuela's new opposition-controlled National Assembly is digging in its heels for a fight with President Nicolas Maduro and the ruling United Socialist Party of Venezuela (PSUV). On Jan. 22, a parliamentary committee overruled a decree that would have granted the president broad powers over national spending and economic planning for 60 days. Maduro has dubbed the decision unconstitutional, and the Venezuelan supreme court has declared his decree to be legally sound. At the very least, Maduro will try to shift the blame for Venezuela's deteriorating economy onto the opposition. The opposition, for its part, will likely use whatever legal measures it can to erode the Maduro administration's clout.

The PSUV has three main courses of action it could take.

First, it could simply ignore the opposition, using the judicial branch to nullify any controversial legislation the National Assembly passes.

 

The PSUV's second option is to try to further dismantle the opposition's legislative majority by citing inconsistencies during the December 2015 elections. This would also require the support of the supreme court.

 

The ruling party's final option is to expand its control over the Venezuelan economy and public finances, which would increase the risk of more heavy-handed attempts by the government to centralize economic power.

The opposition also has several approaches it could take in the coming weeks.

First, it could start the process of impeaching Maduro, something opposition figure Henry Ramos Allup has threatened to do since the new National Assembly was sworn in Jan. 5

 

Its second option would be to pass a constitutional amendment that would limit Maduro's tenure, eventually forcing a new presidential election.

 

Third, the opposition could try to use a new constitutional amendment to override the judicial branch's organic laws. But the supreme court could substantially delay such a move, since it would first have to undergo legal revision and be adhered to by the executive branch.

 

The final step the National Assembly could take would be to write a new constitution. But this is the least plausible scenario. Replacing the constitution would spur resistance from the PSUV and carry the risk of political upheaval on an unprecedented scale. Therefore, even if some of the opposition's factions find this option tempting, it is unlikely that the military — the main arbiter of power in Venezuela — would back it up.

Either way – things are getting worse in a hurry…


via Zero Hedge http://ift.tt/1P3WFch Tyler Durden

Hillary Clinton is Awful

Hillary Clinton is an awful candidate. She ended up winning last night’s Democratic Iowa caucus by .3 percent, and is projected to earn one delegate more than Bernie Sanders did in the contest. The race was so close many of the precinct contests were resolved by coin tosses.

But while Sanders is crushing Clinton in polls in New Hampshire, site of the next presidential contest, things look a little easier for Clinton after that. She’s beating Sanders by an almost two-to-one margin in South Carolina. Same in Nevada, where there are fewer available polls. Clinton also still leads nationally.

Sanders’ surge started in the summer, and by the time Joe Biden finally announced he wouldn’t be running for president, Sanders appeared to be the only anti-Clinton choice. Most of Sanders’ success can be attributed to his offer of “free stuff” for everyone. Healthcare is a right, Sanders insisted in his Iowa speech last night. Starting with that premise, why would you means-test?

Sanders won 83 percent of the vote of Democrats who said a candidate who was honest and trustworthy was important to them. Yet Sanders’ proposals are not honest. He continues to insist a tax on “Wall Street speculation” will pay for most of his programs, while claiming that higher taxes that “middle class families” would have to pay would be more than offset by lower healthcare premiums. That construction conveniently leaves out the higher overall burden on single people, many of whom are among Sanders’ most ardent supporters.

Yet Sanders’ brand of “democratic socialism” (that’s been repudiated by the same Scandinavian countries Sanders points to as examples) and the novelty of a Democrat actually owning his socialist tendencies should not detract from how awful a candidate Hillary Clinton is, and how awful it is that Democrats produced a race with just two deeply-flawed options.

There is, of course, the e-mail scandal that won’t go away. Clinton has tried to paint the investigations surrounding her use of a private server for government communications as a Republican ploy. Yet the investigation is being run by the FBI, out of President Obama’s Department of Justice. Most recently, more than 20 of the emails were identified as being classified TOP SECRET, and now one government source told Fox News that information included “operational intelligence,” the kind of stuff the intelligence community claims puts lives at risk.

Clinton, then, is being accused of much the same thing Snowden was accused of, though from a different direction. Snowden disclosed information about U.S. surveillance practices to the American public. Clinton kept classified information on an unsecure server, making it easier for foreign agents and hackers to access. The Obama administration has prosecuted more people for mishandling classified information (including whistleblowers) than every previous administration combined. While Clinton now says the entire controversy is based on competing ideas about what ought to be classified, this concern about over-classification is a newfound religion for Clinton. It wasn’t on her agenda when she was actually in office and could have done something about it.

Then there’s Libya. Many of the Republican candidates supported the U.S. war in Libya and support similar, even more full-throttled interventions elsewhere, and the Republicans ultimately failed in 2011 to stand up to the president and stop the illegal war. For that reason, Clinton largely gets a free pass on the disaster in Libya and how her policy preferences and policy decisions contributed to the destabilization there and in the wider region. Instead, Republicans focus on Benghazi, a smaller subset of the Libya issue, largely surrounding Clinton’s lack of transparency and accountability and not how the instability at the root of the Benghazi attacks was a result of Obama-Clinton policies. Clinton’s participation in the anti-speech jihad, where she tried to pin the cause of anti-U.S. protests across the Muslim world in 2011 (including what became the Benghazi attack) on a YouTube video and the filmmaker who created it, has gone largely down the memory hole during the campaign. But it reveals a lot about Clinton’s moral and political character that she would sacrifice the principle of free speech to avoid taking responsibility for how her foreign policy approach in the Obama administration might have contributed to anti-U.S. sentiment.

Then there’s the 1994 crime bill, which President Clinton signed into law and did not repudiate until last year, when the veneer of inevitability around his wife was starting to fade. Hillary Clinton continues to insist the intentions of the 1994 crime bill, which massively grew the U.S. prison population, were positive, that harsher corrective measures were meant to improve people and communities.

In a much-derided Buzzfeed profile, Clinton insisted she wanted her entire political career to revolve around “love and kindness.” This is the woman who insisted a “vast right wing conspiracy,” and not differences of opinions and questions about character, animated healthy, democratic opposition to her husband’s presidency. At a CNN debate last year, she said the enemy she was proudest of was Republicans, who might make up up to a third of the American population. This is a woman who insists she wanted to be about “love and kindness” but her political opponents refused to agree with her politics.

Add to all that the toxic strategy deployed by Clinton’s supporters in the political and media class of identifying all dissent and opposition to Clinton as gendered, to the point of creating elaborate strawmen (“Bernie Bros“) to impugn the supporters of her only Democratic rival. It could get worse. In the United Kingdom, anti-war activists who engaged female members of Parliament were also called misogynists and abusers. Yet the head of a government as massive as the U.S.’s will, by definition, be an abuser. America can’t afford another president who masks their primary role in systemic oppression and government violence with the under the guise of identity politics.

from Hit & Run http://ift.tt/1RYGgK3
via IFTTT

Shut Up, Explained the Businessman: How Consumers Like You Get SLAPPed Down

SLAPPChecking out the online reviews of an unfamiliar company’s product or service before you buy is now a reflex for most of us. A quick click over to Yelp, Angie’s List, TripAdvisor, and Yahoo Local Listings let’s you know what other customers think of their experiences with the businesses and service providers from which you’re thinking to make a purchase. And we’ve all become adept at figuring out when a online rater is just a whiny complaint-monger and when she is fairly describing her experience.

Businesses that get low ratings can do two things: Fix the problem or try to shut up the critical customers. In the second case, some companies have taken to filing lawsuits that claim their online critic has “defamed” them and demand that the rating be taken down. Such meritless lawsuits have come to be called Strategic Lawsuits Against Public Participation, or SLAPPs. The goal of a SLAPP is to intimidate people who disagree with the filer and cause them financial pain through legal fees required to defend against the lawsuits. All too often SLAPPs are effective as relatively penurious critics agree to apologize for or “correct” their earlier evaluations in order to avoid the hassles and costs of defending themselves in court.

In an effort to fix this abuse of legal process, a bipartisan coalition in the House of Representatives has introduced the Securing Participation, Engagement, and Knowledge Freedom by Reducing Egregious Efforts Act or the SPEAK FREE Act. The Act would allow a person who is SLAPPed to file a special motion to dismiss such lawsuits and collect legal fees from the person or entity that filed the initial SLAPP.

Representatives from eight free market, pro-consumer groups just sent today a letter in support of the SPEAK FREE Act to the House Judiciary Committee. The groups involved include the R Street Institute, FreedomWorks, the Center for Individual Freedom, Tech Freedom, the American Consumer Institute Center for Citizen Research, the Niskanen Center, the Insitute for Liberty, and the Competitive Enterprise Institute.

The letter points out “multitudes of Americans fall victim to lawsuits called SLAPPs … that are aimed at unfairly intimidating and silencing them.” The letter observes that online reviews are an important facet of the digital economy that helps to give consumers confidence to deal with unfamiliar businesses. “Unfortunately, online reviews increasingly are targeted by SLAPPs, as unscrupulous businessmen seek to censor their critics, rather than working to improve the experiences, products, or services they offer,” they note.

Free speech is a bulwark against both government and private abuses. Citizens should not be afraid to speak their minds on any topic. SLAPPs need to be slapped down sooner rather than later. 

from Hit & Run http://ift.tt/1TAGDKb
via IFTTT

Brazil Lets Government Officials Enter Private Property To Hunt Zika Mosquitoes

It’s been just a few weeks since the head-shrinking Zika virus exploded onto the scene after spreading “explosively” in South and Central America, but officials are already warning that the fallout could be far-reaching.

WHO, which warned last month that the “level of alarm is extremely high”, has declared that the spread of Zika in Brazil is a public health emergency of international concern. “Members of the committee agreed that the situation meets the conditions for a public health emergency” director Margaret Chan said after meeting with WHO’s international health regulations emergency committee.

“It is important to realise that when the evidence first becomes available of such a serious condition like microcephaly and other congenital abnormalities, we need to take action, including precautionary measures,” Chan added, referencing the nearly 4,000 cases of microcephaly that have popped up in Brazil since the beginning of last year.

“Brazil has dispatched hundreds of thousands of troops on mosquito-eradication campaigns in the the worst affected areas, but the government is struggling to comprehend let alone cope with the epidemic,” The Guardian writes. “We do not have a vaccine for Zika yet. The only thing we can do is fight the mosquito,” Dilma Rousseff  told reporters during a visit to the emergency headquarters of the anti-Zika campaign. “As long as [the mosquitoes] are reproducing, we are all losing the battle. We have to mobilise to win it”.

So with no vaccine it’s Dilma versus the mosquitoes and she’s brought 220,000 troops to the fight.

Troops who, thanks to a new decree signed by Rousseff on Monday, will be able to enter private property even if no one is home in order to “eradicate breeding grounds.”


“The emergency measure will mainly open doors for state and municipal health workers sent out to destroy mosquito-breeding grounds—stagnant water typically left in buckets, drains or ditches,” WSJ said yesterday. “In other cases, Brazilian law requires authorities to obtain a warrant from a judge to enter private property without the owner present.”

Right. But no warrants are necessary when it comes to eradicating the Aedes mosquito, which is widely blamed for the scourge.  

“This is the first time I remember since the start of last century, when we had the so called Vaccine War, that the government adopted a measure like this,” said Luiz Flavio Gomes, a former judge and a legal expert. “But the situation right now is dangerous and people are aware of the problem and likely to support the government’s decision.”

Yes, “people are likely to support the government’s decision,” until they come home one day to find troops and health workers donning scary-looking yellow hazmat suits rummaging through their belongings looking for mosquito “breeding grounds.”

So much like France suspended some civil liberties in order to combat “terror” in the wake of the Paris attacks, Brazil has now made it legal for authorities to enter private residences at will if Dilma thinks there may be some mosquitoes hanging out inside. 

Of course there are mosquitoes everywhere in Brazil, which means there will almost always be an excuse for officials to enter private homes on a whim if they so choose. 

We imagine the new law could come in quite handy should Brazilians start protesting in the streets for Rousseff’s removal again. As for Rousseff’s many vociferous political oponents, don’t get caught with a bucket of standing water on your porch or you just might find your house ransacked.


via Zero Hedge http://ift.tt/1TAF2Ek Tyler Durden

The “Unintended Consequences” Have Arrived: Japan Cancels 10Y Auction Due To Sub-Zero Rates

Dear Bank of Japan, how do you spell unintended consequences:

  • PLANNED MARCH SALE OF 10-YEAR JAPANESE GOVERNMENT BONDS THROUGH BANKS TO BE CANCELED AMID EXPECTED BELOW-ZERO YIELDS – NIKKEI
  • JAPAN’S MINISTRY OF FINANCE IS EXPECTED TO ANNOUNCE WEDNESDAY THE FIRST-EVER DECISION TO CALL OFF SALES OF 10-YEAR JGBS- NIKKEI

As a reminder, Japan can’t monetize more debt – the only thing that is keeping its yields from spontaneously exploding – unless it can concurrently issue more debt. After all the only reason the BOJ did NIRP is because it already faced a limit on how many bonds it can monetize.

Oooooops.

“Wait, what’s that, policy failure less than 3 days after I announced NIRP? Unpossible.”

 

So… what does the most indebted country in the world do now?


via Zero Hedge http://ift.tt/1QYnrFA Tyler Durden

The Truth Emerges: “I Never Thought I Would Wish, Or Pray, For Higher Oil Prices, But I Am”

This was not supposed to happen. None other than The U.S. Federal Reserve Bank of Dallas, in a research paper released in January, said that

a drop in oil prices brought about by rising supply — like the current one — should boost global growth by up to 0.4 percentage points. “This is mainly due to an increase in spending by oil-importing countries, which exceeds the decline in expenditure by oil exporters,” the paper said.

And of course, as Bloomberg reports, there is book-talker and status-quo-maintainer BlackRock Inc. Chief Executive Officer Laurence D. Fink.

“The reality is 4 billion human beings are going to have cheaper energy, cheaper heating, they’re going to have more disposable income,” Fink said last month. “And ultimately that’s going to re-accelerate the global economy. It may take six months, it may take a year but this is all good.”

So far, though, consumers in developed countries aren’t behaving as they should: spending the windfall from cheaper energy. This time around, “the pickup in consumption in oil importers has so far been somewhat weaker than evidence from past episodes of oil price declines would have suggested,” the IMF said in January.

The reason: cash-strapped consumers are using the savings to repay debts.

Furthermore, as Bloomberg adds, low oil prices have prompted companies to cancel dozens of capital-intensive projects — like drilling wells — which in turn means lower demand for machinery. Wood Mackenzie Ltd., an industry consultant, estimates that at least $380 billion has been put on hold. IHS Inc. puts it at as much as $1.5 trillion.

Whatever the amount, the IMF says the impact on investment in oil and gas new projects is “subtracting from global aggregate demand.”

So with economists desperately clinging to their textbooks – where for the last 75 years, almost every economic crisis has been preceded by an oil price spike, the worry now is that low energy prices are pushing the global economy into a tailspin.

While the idea is counter-intuitive, it’s gaining traction because a growing share of the world’s consumers and investors are in the very places getting hammered by the rout in commodities prices. Apple Inc., for example, blamed weaker sales last quarter on lower economic growth in some oil-rich countries.

 

“I never thought I would wish, let alone pray, for higher oil prices, but I am,” said Han de Jong, chief economist at ABN Amro Bank NV in Amsterdam. “The world badly needs higher oil prices.”

 

The problem is that the world’s economy relies far more today on emerging countries than 15 or 25 years ago — the last periods of ultra-low oil prices. In another twist, the U.S. has emerged to vie with Saudi Arabia and Russia as the world’s biggest oil producer. In the past, the harm done to exporters was more than offset by importers’ gains.

 

And with the exception of China and India, most big emerging countries are oil and commodities rich. From Russia to Saudi Arabia, Nigeria to Brazil, economic growth is slowing down to a crawl and, in many cases, is contracting.

“History provides reason for extreme pessimism on the likely fortunes of commodity producers,” said Gabriel Sterne, head of global macro research at Oxford Economics Ltd.


via Zero Hedge http://ift.tt/20EKbgB Tyler Durden