Month: March 2016

Submitted by Michael Snyder via The Economic Collapse blog,

Ten years ago, a major Hollywood film entitled “Idiocracy” was released, and it was an excellent metaphor for what would happen to America over the course of the next decade.  In the movie, an “average American” wakes up 500 years in the future only to discover that he is the most intelligent person by far in the “dumbed down” society that he suddenly finds himself in. 

Sadly, I truly believe that if people of average intellect from the 1950s and 1960s were transported to 2016, they would likely be considered mental giants compared to the rest of us.  We have a country where criminals are being paid $1000 a month not to shoot people, and the highest paid public employee in more than half the states is a football coach.  Hardly anyone takes time to read a book anymore, and yet the average American spends 302 minutes a day watching television.  75 percent of our young adults cannot find Israel on a map of the Middle East, but they sure know how to find smut on the Internet.  

What in the world has happened to us?  How is it possible that we have become so stupid?  According to a brand new report that was recently released, almost 10 percent of our college graduates believe that Judge Judy is on the Supreme Court…

The American Council of Trustees and Alumni publishes occasional reports on what college students know.

Nearly 10 percent of the college graduates surveyed thought Judith Sheindlin, TV’s “Judge Judy,” is a member of the U.S. Supreme Court. Less than 20 percent of the college graduates knew the effect of the Emancipation Proclamation. More than a quarter of the college graduates did not know Franklin D. Roosevelt was president during World War II; one-third did not know he was the president who spearheaded the New Deal.

It can be tempting to laugh at numbers like these until you realize that survey after survey has come up with similar results.

Just consider what Newsweek found a few years ago…

When NEWSWEEK recently asked 1,000 U.S. citizens to take America’s official citizenship test, 29 percent couldn’t name the vice president. Seventy-three percent couldn’t correctly say why we fought the Cold War. Forty-four percent were unable to define the Bill of Rights. And 6 percent couldn’t even circle Independence Day on a calendar.

Even worse were the extremely depressing results of a study conducted a few years ago by Common Core…

*Only 43 percent of all U.S. high school students knew that the Civil War was fought some time between 1850 and 1900.

*More than a quarter of all U.S. high school students thought that Christopher Columbus made his famous voyage across the Atlantic Ocean after the year 1750.

*Approximately a third of all U.S. high school students did not know that the Bill of Rights guarantees freedom of speech and freedom of religion.

*Only 60 percent of all U.S. students knew that World War I was fought some time between 1900 and 1950.

Of course survey results can be skewed, and much hinges on how the questions are asked.

However, even studies that are scientifically conducted confirm how stupid America has become.  In fact, a report from the Educational Testing Service found that Americans are falling way behind much of the rest of the industrialized world.  The following comes from CBS News…

Americans born after 1980 are lagging their peers in countries ranging from Australia to Estonia, according to a new report from researchers at the Educational Testing Service (ETS). The study looked at scores for literacy and numeracy from a test called the Program for the International Assessment of Adult Competencies, which tested the abilities of people in 22 countries.

 

The results are sobering, with dire implications for America. It hints that students may be falling behind not only in their early educational years but at the college level. Even though more Americans between the ages of 20 to 34 are achieving higher levels of education, they’re still falling behind their cohorts in other countries. In Japan, Finland and the Netherlands, young adults with only a high school degree scored on par with American Millennials holding four-year college degrees, the report said.

Out of 22 countries that were part of the study, the Educational Testing Service found that Americans were dead last in tech proficiency, dead last in numeracy and only two countries performed worse than us when it came to literacy proficiency…

Half of American Millennials score below the minimum standard of literacy proficiency. Only two countries scored worse by that measure: Italy (60 percent) and Spain (59 percent). The results were even worse for numeracy, with almost two-thirds of American Millennials failing to meet the minimum standard for understanding and working with numbers. That placed U.S. Millennials dead last for numeracy among the study’s 22 developed countries.

So why has this happened?

Why have we become such an extremely stupid nation?

Well, at least a portion of the blame must be directed at our system of education.  The following is an excerpt from an article written by reporter Mark Morford.  In this article, he shared how one of his friends which had served for a very long time as a high school teacher in Oakland, California was considering moving out of the country when he retired due to the relentless “dumb-ification of the American brain”…

It’s gotten so bad that, as my friend nears retirement, he says he is very seriously considering moving out of the country so as to escape what he sees will be the surefire collapse of functioning American society in the next handful of years due to the absolutely irrefutable destruction, the shocking — and nearly hopeless — dumb-ification of the American brain. It is just that bad.

 

Now, you may think he’s merely a curmudgeon, a tired old teacher who stopped caring long ago. Not true. Teaching is his life. He says he loves his students, loves education and learning and watching young minds awaken. Problem is, he is seeing much less of it.

And of course things don’t get much better when it comes to our college students.  In a previous article, I shared some statistics from USA Today about the rapidly declining state of college education in the United States…

-“After two years in college, 45% of students showed no significant gains in learning; after four years, 36% showed little change.”

-“Students also spent 50% less time studying compared with students a few decades ago”

-“35% of students report spending five or fewer hours per week studying alone.”

-“50% said they never took a class in a typical semester where they wrote more than 20 pages”

-“32% never took a course in a typical semester where they read more than 40 pages per week.”

I spent eight years studying at some of the finest public universities in the country, and I can tell you from personal experience that even our most challenging college courses have been pathetically dumbed down.

And at our “less than finest” public universities, the level of education can be something of a bad joke.  In another previous article, I shared some examples of actual courses that have been taught at U.S. universities in recent years…

-“What If Harry Potter Is Real?”

-“Lady Gaga and the Sociology of Fame”

-“Philosophy And Star Trek”

-“Learning From YouTube”

-“How To Watch Television”

Could you imagine getting actual college credit for a course entitled “What If Harry Potter Is Real?”

This is why many of our college graduates can barely put two sentences together.  They aren’t being challenged, and the quality of the education most of them are receiving is incredibly poor.

But even though they aren’t being challenged, students are taking longer to get through college than ever.  Federal statistics reveal that only 36 percent of all full-time students receive a bachelor’s degree within four years, and only 77 percent of all full-time students have earned a bachelor’s degree by the end of six years.

Of course our system of education is not entirely to blame.  The truth is that young Americans spend far more time consuming media than they do hitting the books, and what passes for “entertainment” these days is rapidly turning their brains to mush.

According to a report put out by Nielsen, this is how much time the average American spends consuming media on various devices each day…

Watching live television: 4 hours, 32 minutes

Watching time-shifted television: 30 minutes

Listening to the radio: 2 hours, 44 minutes

Using a smartphone: 1 hour, 33 minutes

Using Internet on a computer: 1 hour, 6 minutes

When you add it all up, the average American spends more than 10 hours a day plugged into some form of media.

And if you allow anyone to pump “programming” into your mind for 10 hours a day, it is going to have a dramatic impact.

In the end, I truly believe that we all greatly underestimate the influence that the mainstream media has on all of us.  We willingly plug into “the Matrix” for endless hours, but then somehow we still expect “to think for ourselves”.

There are very few of us that can say that we have not been exposed to thousands upon thousands of hours of conditioning.  And all of that garbage can make it very, very difficult to think clearly.

It is not because of a lack of input that we have become so stupid as a society.  The big problem is what we are putting into our minds.

If we continue to put garbage in, we are going to continue to get garbage out, and that is the cold, hard reality of the matter.

via Zero Hedge http://ift.tt/1V7dTt7 Tyler Durden

On the day Mario Draghi announced that the ECB would launch a historic corporate bond monetization program, the first of its kind, we said that we expect bond yields to tumble imminently as the market frontruns the ECB’s open-market purchases of corporate bonds and soaks up all available supply in the market. Not even we expected what would happen next though.

As the WSJ writes, four years after ECB President Mario Draghi‘s famous “whatever it takes” speech sparked a decline in the cost of servicing sovereign debt in the Eurozone’s shattered periphery, the same is now seems to be happening for corporate bond issuers in those countries.

It references the Bank of America Merrill Lynch’s nonfinancial bond index for the Eurozone periphery which includes countries like Italy, Spain, Portugal and Ireland (which earlier today issued a 100 Year bond courtesy of the very same ECB), and which touched its lowest yield to maturity ever on Tuesday, at 0.76%.

Once again, Draghi has worked his verbal magic unleashing a buying spree before the ECB has bought even one single bond, all because other buyers are now completely price indiscriminate and fully aware they have the ECB’s backstop.

Perhaps the recent record low yields are a warning: the previous record low yield for the index was 0.78%, which was reached just before the so called bund tantrum of Spring 2015, when credit across Europe sold off, and yields jumped.

However, back then, the buying impetus was driven by the ECB’s sovereign QE program when, unlike now, there was no explicit backstop to corporate bond risk. There is now.

The WSJ also points out that yields on other classes of debt have also declined, but not to the levels recorded in the early months of last year. 

Financial companies, whose bonds the ECB will not buy, are still a little way from their lows. In March last year, the yield to maturity of the Bank of America Merrill Lynch index for financial companies in the periphery fell to 1.12%, and it’s now at 1.35%.

 

The index for non-financial companies in the eurozone but outside the periphery also has a higher average yield than it did in April 2015.

This “arbitrage” will be fixed: once ravenous yield chasers run out out of peripheral bonds to buy and the market becomes dangerously illiquid – as we also warned will happen – buying activity will shift to corporate bonds in the core. At that point, once all yields are at record low yields, if not negative, the ECB will proceed to monetize financial bonds as well.

The WSJ’s conclusion:

Since the ECB’s bond buying program is designed to spur lending by reducing the cost to corporations, record low yields are good news: for now, at least.

We disagree: what the chart above shows is yet another asset class that is now completely dislocated from its fundamentals, just like European sovereign bonds, which are trading not on their underlying merit but because the ECB has to buy them. The same is happening in the corporate financial space. And, once the corporate non-financial market ends up broken and there is no more supply, the ECB will be forced to expand its bond buying universe again, launching the monetization of junk bonds, convertibles and ultimately equities.

At that point, no news and no fundamentals news will matter any more, and the only driver of “markets” will be whether the ECB’s credibility is intact, which in turn will make it a political issue as will the “valuation” of the markets.

And then, one day, when for whatever reason the ECB’s mandate to monetize everything is taken away (whether as a result of German revulsion or the political collapse of the Eurozone) prices will once again find their fundamental “fair value.” One thing that is certain: it will be far, far lower than where it is with the explicit backing of central banks to buy anything and everything.

via Zero Hedge http://ift.tt/1on0rEB Tyler Durden

In response to what seemed like a rather stunning statement by CNBC entertainer Jim Cramer that "Fed Chief Yellen is speaking for the common person," we thought the following simple chart might provide some useful food for thought when considering everything that escapes his mouth…

 

 

So yep – jawbone all you like, but actions speak louder than words and enabling companies to 'live' that should be dead and enabling executives to pump up share prices (via cheap debt-funded buybacks) at the expense of their 'expensive' labor force seems like anything but "speaking for the common person."

Just like Greenspan and Bernanke before her, Janet Yellen has only one mandate – enable the elites to survive (and thrive) no matter what the cost.

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

Submitted by Simon Black via SovereignMan blog,

In his History of the Peloponnesian War, ancient Greek historian Thucydides told us the tale of a dominant regional power (Sparta) that felt threatened by the rise of a competing power (Athens).

Sparta felt so threatened, in fact, that all the moves they made to keep the Athenian rise in check eventually escalated the power struggle into an all out war.

Modern political scientists call this the Thucydides Trap.

The idea is that when, out of fear, a dominant power takes certain steps to keep its competitor at bay, these actions ultimately lead to war between the two.

There’s a lot of concern that the US and China will fall into the Thucydides Trap.

This is certainly a valid concern. Both are nuclear superpowers with some of the largest militaries in the world.

But in 2016, modern warfare is not about tanks and aircraft carriers anymore. Modern warfare is insurgent, cyber, and financial.

In fact, if you look at the state of the financial system and the tactical brinksmanship between the US and China, it’s clear that the two are already in a Thucydides Trap.

This power struggle is leading to financial warfare of nuclear proportions; and as with any war, there will be a lot of casualties.

Just over the last several months we’ve seen many exchanges of fire between the two nations.

• The US government claimed legal jurisdiction over the Bank of China, one of the largest banks on the mainland.
• The Chinese launched the Asian Infrastructure Investment Bank, a supernational bank designed to compete with the Western-dominated IMF.
• The US blacklisted one of China’s largest telecom companies, forbidding any US company from doing business with China’s ZTE.
• China has been rapidly expanding its global payment network, UnionPay to become a direct competitor with Western systems like Maestro, Visa, and Mastercard.

And don’t forget, China could unleash its nuclear option at any time– dumping its vast trillion+ pool of US government debt, which would potentially cause a major crisis for the US dollar.

It’s a bit sad, because almost EVERY action of the US government only escalates the conflict further… and the Chinese eagerly follow suit.

This is how World War III starts. And it will be financial.

Listen in to today’s podcast and learn more about how this conflict will unfold… and how to not to end up as collateral damage.

(click image for link to podcast)

via Zero Hedge http://ift.tt/1Y1fW17 Tyler Durden

Do the math, Mr. President…

 

 

Source: Investors.com

via Zero Hedge http://ift.tt/232Rlw8 Tyler Durden

Just yesterday, we discussed Donald Trump’s “women problems.”

Although one might fairly question the methodology behind the polls and whether the questions were designed to elicit a certain type of response, it is worth noting that in three separate surveys (NBC, WSJ, and CNN), Trump’s favorability rating with female voters was 27% or less.

Even if one assumes that the polls were inherently biased, there’s probably some truth to the contention that the things Trump has said about women in the past haven’t done anything to help him when it comes to garnering a large percentage of the female vote and may indeed come back to haunt him in a national contest with Hillary Clinton.

Well on Wednesday, in an MSNBC town hall event, Trump was cornered by host Chris Matthews who asked the GOP frontrunner about his position on abortion.

Trump says “there has to be some form of punishment” for women who have abortions. Interview airs tonight at 8pmET.https://t.co/SR3st1X665

— Meet the Press (@meetthepress) March 30, 2016

Below, you can find the (painful) highlights as compiled by Bloomberg.

• Host Chris Matthews presses Trump on anti-abortion position, repeatedly asking him, “Should abortion be punished? This is not something you can dodge”
  • “Look, people in certain parts of the Republican Party, conservative Republicans, would say, ‘Yes, it should,’” Trump answers
  • “How about you?” Matthews asks
  • “I would say it’s a very serious problem and it’s a problem we have to decide on. Are you going to send them to jail?” Trump says
  • “I’m asking you,” Matthews says
  • “I am pro-life,” Trump says
  • “How do you actually ban abortion?” Matthews asks
  • “Well, you go back to a position like they had where they would perhaps go to illegal places but we have to ban it,” Trump says
• Matthews then presses Trump on if he believes there should be punishment for abortion if it were illegal
  • “There has to be some form of punishment,” Trump says
  • “For the woman?” Matthews says; “Yeah,” Trump says, nodding
  • Trump says punishment would “have to be determined”
  • “They’ve set the law and frankly the judges, you’re going to have a very big election coming up for that reason because you have judges where it’s a real tipping point and with the loss of Scalia, who was a very strong conservative, this presidential election is going to be very important,” Trump says
  • “When you say what’s the law, nobody knows what the law is going to be. It depends on who gets elected,” Trump says

Obviously, this was “gotcha” journalism on Matthews’ part, and as we saw last year with the whole Kurds/Quds Hugh Hewitt debacle, Trump is susceptible to badgering. The other problem here is that it isn’t clear that Trump truly believes some of the things he’s forced to say as a Republican candidate, which leads to exchanges like that recounted above. “Don’t overthink it: Trump doesn’t understand the pro-life position because he’s not pro-life,” A Cruz aid tweeted. Here’s Politico with a bit of context:

Trump’s policy idea is a departure from most state abortion restrictions, which don’t impose penalties on the women who get abortions. Typically, any penalties are imposed on the physician who does the procedure.

 

The anti-abortion movement in recent decades has shied away from the perception that it is “punishing” women for getting abortions. Instead, it has focused on penalties for the physicians who provide them, such as imposing medical or legal restrictions on their practice. In some rare situations, women have faced charges associated with abortions they have attempted on their own.

Realizing this has already become a PR fiasco, Trump has tried to walk back his comments.

Here’s a statement released just moments ago, in which the billionaire changes course, calling women “victims” on the way to comparing himself to Ronald Reagan:

If Congress were to pass legislation making abortion illegal and the federal courts upheld this legislation, or any state were permitted to ban abortion under state and federal law, the doctor or any other person performing this illegal act upon a woman would be legally responsible, not the woman. The woman is a victim in this case as is the life in her womb. My position has not changed – like Ronald Reagan, I am pro-life with exceptions.

But by the time the Trump campaign released that statement it was far too late. The media, women’s rights groups, pro-abortion groups, as well as all of Trump’s political opponents smelled blood. 

“The last person women need to police their health care decisions is someone who sees them not as people, but as ‘fat pigs,’ ‘bimbos’ and ‘disgusting animals,’” Marcy Stech, a spokeswoman for Emily’s List, a pro-abortion-rights group said.

Here’s the reaction from March for Life:

March For Life condemns Trump’s comment on abortion. http://pic.twitter.com/Ja8Tm2YEMx

— Sahil Kapur (@sahilkapur) March 30, 2016

And from Bernie Sanders:

Your Republican frontrunner, ladies and gentlemen. Shameful. https://t.co/y49Z8YfRgV

— Bernie Sanders (@BernieSanders) March 30, 2016

And here’s the Cruz campaign calling Trump a “charlatan”:

Cruz campaign chair: Trump’s abortion comments show he is a “charlatan” https://t.co/6OZtrfIwim https://t.co/EWAbGTx4W2

— CNN Politics (@CNNPolitics) March 30, 2016

Expect this soundbite to play on a loop should Trump end up squaring off against Clinton this fall. Speaking of whom:

Just when you thought it couldn’t get worse. Horrific and telling. -H https://t.co/Qi8TutsOw9

— Hillary Clinton (@HillaryClinton) March 30, 2016

via Zero Hedge http://ift.tt/232MNpE Tyler Durden

By EconMatters

The typical buy the rumor sell the news trading day in the oil market. The RBOB and HO product contracts along with Brent contract expire tomorrow, watch for spikes at the close. This Friday is loaded with economic reports including the Employment Report and the Baker Hughes Rig Report where we saw a drop of 15 last week.

 

via Zero Hedge http://ift.tt/232MHyh EconMatters

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

How many startups are empty shells filled with glitzy PR designed to appeal to VC newbies?

It's widely accepted that most tech startups will fail. Perhaps the core business proposition didn't pan out, or the execution was flawed, or the initial success foundered on poor management, or another startup scaled up fast enough to suck up all the oxygen in the room–there are many reasons a startup with a fair chance at success can fail.

But what if many if not most of the current batch of startups have zero chance of succeeding because they're nothing but empty shells of gaseous public relations? Coder Daniel C. recently shared his experiences interviewing at numerous tech firms, both established firms and startups.

Here are Daniel's observations:

When I first got into the high-tech field, I thought it was the only place that was safe, in other words, I really thought everyone was innovative and cutting edge. But now I am seeing something you probably have already seen being in the S.F. Bay Area, which is that a lot of companies in the high-tech sector are clueless and full of it.

 

I have recently been on several job interviews with high tech startups and they are the wierdest interviews. They give me a bunch of blather about their company, but they don't ask me any substantial questions about my technical expertise. Then they tell me within 24 hours that I just don't have enough experience as they would like.

 

Many of these companies reach out to me like I am their buddy, no formal introduction, "hey, dude, can we talk?" Some of them like to use the F word in their outreach, which totally turns me off. I think they have innovative confused with lack of professionalism.

 

Of the ten-plus job interviews I have been to in the high-tech field, only two actually gave me a coding challenge to prove my skills. I actually have a lot of esteem for those two companies (one of them is in London) because at least they assessed my hard skills via practical application. The rest I have no clue how they are coming to their conclusions based on a unfocused ten-minute talk about nothing.

 

In fact, I am noticing most of these companies are not even reviewing my portfolio, which is leading me to develop questions for them such as "Which one of my apps did you enjoy most?"

 

Anyway, I shared this with you because if you have any knowledge of anything similar, I would love to see an article on it. I have a hunch a lot of these companies lack direction and are probably not really drumming up a lot of business. A lot of good public relations, but not necessarily a steady stream of clients.

Thank you, Daniel, for sharing your experiences and for raising a number of key points.

The key metric for startups now is not revenues or paying clients–it's their valuations–as in Unicorn valuations of $1 billion or more.

The number of 'unicorns' in tech is booming (Business Insider, Oct. 2015)

But valuations that aren't based on revenues, paying clients and profits are notoriously prone to collapse. It is far easier to convince a venture-capital wannabe with millions of investor dollars to fund a PR-heavy startup than it is to actually build a business with paying clients, rising revenues and profits.

No wonder we're seeing accounts like this:

Top Silicon Valley VC Laments: Startups Being Funded Are "Mostly Crap & Largely Worthless"

Bubbles always seem permanent to those living within them. How many startups are empty shells filled with glitzy PR designed to appeal to VC newbies anxious to find the next Facebook? Perhaps far more than the financial media cares to admit.

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