Fossil Stock Plummets 25% On Abysmal Results As US, Global Consumers Choose To Save Instead Of Spend

While everyone knew Q1 would be a terrible quarter for energy companies, it is turning out to be an absolute bloodbath for consumer-facing retail companies, and the latest example was “fashion accessory”, but really watch company Fossil, which has cratered after hours after reporting not only a miss in EPS of $0.12 (Est. $0.15) and revenue (which at $660 million was 9% lower than a year ago and missed expectations of $667 million), but also missed comp store expectations which dropped 3%, on expectations of a -0.4% decline: “A strong comparable sales increase in Europe was offset by a decline in the Americas and Asia.  A comparable sales increase in leathers and jewelry was offset by a decline in watches.”

The topline weakness was broad-based and included every single addressable market:

  • Net sales in the Americas decreased 7% or $26.0 million compared to the first quarter of fiscal 2015, with declines in watches, jewelry and leathers compared to last fiscal year.  Modest sales growth in Canada and Mexico was offset by a decline in the U.S.
  • Net sales in Europe decreased 8% or $18.1 million compared to the first quarter of fiscal 2015, with an increase in leathers offset by declines in watches and jewelry compared to last fiscal year.  Within the region, modest growth in France and Germany was offset by a decline in distributor markets and the U.K.
  • Net sales in Asia decreased 4% or $4.8 million compared to the first quarter of fiscal 2015, with an increase in leathers offset by declines in watches and jewelry compared to last fiscal year.  Within the region, an increase in India was offset by declines in most markets, including Hong Kong and China.

Among the odd reasons the company gave to justify the weakness in demand was the “strong dollar” in Q1, seemingly unaware that the DXY was actually weaker compared to a year ago:

During the first quarter of fiscal 2016, the translation impact of a stronger U.S. dollar decreased the Company’s reported net sales by $16.4 million, operating income by $12.9 million and diluted earnings per share by $0.08. The following discussion of the Company’s net sales is calculated in constant dollars and reflects regional performance based on sales in all channels within the geographic location.

But the main reason why the stock is down nearly a quarter is due to the company’s tragic guidance. FOSL now sees 2016 net sales down 1.5%-5.0%, saw down 3.5% to up 1.0%, est. down ~3%; it also sees 2Q GAAP EPS break-even to 15c versus an estimate of 60c; It goes on: FOSL now sees net sales down 8%-10%, may not compare to est. down .3%;

And then there was the following pearl: “During the first quarter of fiscal 2016, the Company invested $4.4 million to repurchase 0.1 million shares of its common stock at an average price of $47 per share.  As of April 2, 2016, the Company had $825.0 million remaining on its existing share repurchase authorizations.” Considering the stock is now down 25% to $30, the company is now down over 30% on its “investment.”

Joking aside, this was the latest confirmation that something is very badly broken with not only the US but also international consumer, who as the WaPo “determined” earlier is actively seeking to sabotage the Obama recovery by not spending on such products as Skaggen watches, but instead selfishly is saving away all available funds.

Expect even more weakness in the coming quarters, especially among comparable consumer companies, if this unpatriotic saving behavior does not revert back to what made the US consumer class the most beloved across the entire world.

One thing is certain: FOSL investors will certainly not be spending more in the coming days.

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The Inevitability Of Unintended Consequences

Submitted by Adam Taggart via PeakProsperity.com,

"No plan of operations extends with any certainty beyond the first contact with the main hostile force."

~ Helmuth von Moltke the Elder

 

"Shit happens"

~ Anonymous

Anyone involved with managing projects, people or systems knows that the only thing that can be planned with absolute certainty is that things will never go 100% according to plan.

This is true even in exceedingly simple situations, which we've written about at length here at Peak Prosperity (the uncontrollable nature of the straightforward Beer Game detailed in this post on the Bullwhip Effect outlines this well). And it's one of the truisms that gives us the most confidence that the world's central planners will eventually lose control of the global systems they are trying to manage via increasingly heavy-handed intervention.

History is full of examples where governments' best-laid plans failed in spectacular fashion, exacerbating the very problems they were intending to solve. Here are a few of our favorites:

Hoy No Circula

In the late 1980s, the air pollution in Mexico City had reached concerning levels. City planners decided that reducing the number of cars on the roads would have a material impact on improving air quality via reduced emissions, so they launched the Hoy No Circula ("today [your car] does not drive") program.

Hoy No Circula mandated that only certain cars could drive on certain days of the week. The rules were based on the last digit of a car's license plate. If your license plate ended in a 5 or 6, you couldn't drive your car on Mondays. If it ended in 7 or 8, Tuesdays were out. And so on.

The expectation was that people would commute via public transit more and, on any given day, there would be 20% fewer cars on the road. 20% fewer cars meant 20% fewer emissions, leading to improved air quality.

But… that's not quite how things worked out.

People, being people, didn't want to change their behavior. Having to find alternate transportation plans every few days proved a frustrating inconvenience. So how did the public respond? By buying a second car, with a license plate ending in a different digit than their primary vehicle.

This was bad for several reasons. Not only did it prevent the number of cars driving on the roads each day by dropping by the expected amount, but these secondary cars were predominantly cheaper, older "beater" cars — which were much more pollutive automobiles.

Even those who chose to commute instead predominately took taxis instead of public transit (Mexico City had, and continues to have, insufficient options for public transport). Most of the taxis in use when Hoy No Circula was first implemented were Volkswagen Beetles, one of the worst-emitting vehicles in circulation at the time.

So air quality actually in Mexico City worsened after the implementation of Hoy No Circula. And traffic congestion, which was already bad, got worse, as well.

The Cobra Effect

Such misguided policy-making isn't anything new. In our recent book Prosper!: How to Prepare for the Future and Create a World Worth Inheriting we share a fine example dating from the Crown rule in India era:

During British colonial rule of India, the government became concerned about the large number of cobras in Delhi. So it issued a bounty on the poisonous snakes, paying a ?xed sum for each dead cobra brought in by the public. It didn’t take long for things to start going sideways on this plan. In order to receive more payments, enterprising residents began breeding cobras.

 

Clearly this was not what the British rulers intended. Once they discovered how their program was being abused, they terminated the bounty scheme. And what happened next? Yep, with no incentive left, the breeders set their now-worthless snakes free. And the cobra problem in Delhi skyrocketed to much greater heights than before the bounty program began. The “solution” had the exact opposite effect as intended.

(Source)

An Inexhaustible Supply

Sadly, the inability of the central State to recognize its vulnerability to the law of unintended consequences is mighty. Each generation of policymakers refuses to learn from the errors of the preceding ones, and remains confident that as long as it has good intentions (at least publicly), success is inevitable.

But instead, we get bungle after bungle.

The economy is slowing? Fill the banks newly-printed capital! They'll lend it out, thus increasing the velocity of money, spurring consumer spending and re-igniting economic growth. This was the thinking in the wake of the 2008 slowdown — but what happened? The banks realized it was much safer to hold on to that new money, lever it up and buy 'safe bet' instruments like US Treasury bonds — thereby making risk-free profits. The money that the banks did deploy largely went into the assets that most favored the banks and their richest clients, resulting in the widest wealth gap our country has ever experienced in its history.

Money velocity still not perking up? Take the bold step of charging negative interest rates on bank deposits! That's sure to get money out into the larger economy, where it can seek a positive return. This is what a growing number of countries are experimenting with today; but like Japan and the EU are realizing, imposing negative nominal interest rates actually boosts demand for cash, gold and safes to store them in. Turns out, desperate and bizarro-world tactics like NIRP cause investors to prioritize return OF capital higher than return ON.

Workers not able to get jobs paying them enough to live on? Double the minimum wage! This sounds noble, but places a heavy cost burden on the already-beleaguered small employer. As we've recently discussed, dramatically boosting the minimum wage without any commensurate relief for small and medium-sized businesses simply adds to the incentive for these companies to shed as many jobs as possible and to invest in long-term non-human solutions like automation. We are permanently destroying the supply of jobs available to our workforce.

The point here is that in many cases (if not most), governments' cures are often worse than the disease they are treating. Or as my favorite de-motivational poster puts it:

Conclusion

And very likely compounding these unintended consequences is the basic principle of uncertainty. In his article Why Our Central Planners Are Breeding Failure Charles Hugh Smith opined on how unknowable much of the results of current monetary policy will be, despite the Fed et al's assurances that they have everything well under control:

As noted above, any policy identified as the difference between success and failure must pass a basic test: When the policy is applied, is the outcome predictable?  For example, if central banks inject liquidity and buy assets (quantitative easing) in the next financial crisis, will those policies duplicate the results seen in 2008-15?

 

The current set of fiscal and monetary policies pursued by central banks and states are all based on lessons drawn from the Great Depression of the 1930s. The successful (if slow and uneven) “recovery” since the 2008-09 global financial meltdown is being touted as evidence that the key determinants of success drawn from the Great Depression are still valid: the Keynesian (or neo-Keynesian) policies of massive deficit spending by central states and extreme monetary easing policies by central banks.

 

Are the present-day conditions identical to those of the Great Depression? If not, then how can anyone conclude that the lessons drawn from that era will be valid in an entirely different set of conditions?

 

We need only consider Japan’s remarkably unsuccessful 25-year pursuit of these policies to wonder if the outcomes of these sacrosanct monetary and fiscal policies are truly predictable, or whether the key determinants of macro-economic success and failure have yet to be identified.

It's this concern about the failure of the current strategy our central planners are pursuing, paired with the tremendous magnitude of the impending cost of that failure, that motivated Chris to issue our report The Consequences Playbook last year, which begins:

What’s really happened since 2008 is that central banks decided that a little more printing with the possibility of future pain was preferable to immediate pain.  Behavioral economics tells us that this is exactly the decision we should always expect from humans. History says as much, too.

 

It’s just how people are wired. We’ll almost always take immediate gratification over delayed gratification, and similarly choose to defer consequences into the future, especially if there’s even a ridiculously slight chance those consequences won’t materialize.

 

So instead of noting back in 2008 that it was unwise to have been borrowing at twice the rate of our income growth for the past several decades — which would have required a lot of very painful belt-tightening — the decision was made to ‘repair the credit markets’ which is code speak for: ‘keep doing the same thing that got us in trouble in the first place.’

 

Also known as the ‘kick the can down the road’ strategy, the hoped-for saving grace was always a rapid resumption of organic economic growth. That’s how the central bankers rationalized their actions. They said that saving the banks and markets today was imperative, and that eventually growth would return, thereby justifying all of the new debt layered on to paper-over the current problems.

 

Of course, they never explained what would happen if that growth did not return. And that’s because the whole plan falls apart without really robust growth to pay for it all.

 

And by ‘fall apart’ I mean utter wreckage of the bond and equity markets, along with massive institutional and sovereign defaults. That was always the risk, and now we’re at the point where the very last thing holding the entire fictional edifice together is beginning to give way. Finally.

When credibility in central bank omnipotence snaps, buckle up. Risk will get re-priced, markets will fall apart, losses will mount, and politicians will seek someone (anyone, dear God, but them) to blame.

In The Consequences Playbook (free executive summary; enrollment required for full access) we spell out what will happen next and how you should be preparing today for what might happen tomorrow. If you haven't yet read it, you really should. Suffice it to say, a tremendous amount of wealth will be lost if (really, when) the central banks lose control. And standards of living for many will be impacted. A little preparation today can make a huge difference in your future.

 

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One-Fifth of Earth’s Plants Threatened with Extinction

TropicalForestCutTimoRasanenAaltoUniversityThe highly respected Royal Botanic Gardens, Kew, has just issued The State of the World’s Plants 2016 in which its researchers estimate that perhaps one-fifth of the world’s 391,000 thousand vascular plant species may be at risk of extinction. The chief reason plant species are threatened is human activity, specifically land use changes such as farming, raising livestock, logging, and land development. The Kew findings rely heavily on research published last year, “Green Plants in the Red,” in PLoS One by a team of mostly British researchers associated with the Natural History Museum and Kew Gardens. According to the journal metrics that article received no media coverage, which may be why the results are being updated and republished in the splashy report.

To try to estimate how many plants are threatened with extinction, the researchers took a random sample consisting of some 7,000 plant species and then checked to see how they are faring using data from the International Union for the Conservation of Nature (IUCN). The IUCN constructs and maintains various databases called Red Lists aiming to monitor the conservation status of species populations.

The PLoS One study reported, “More than 20% of plant species assessed are threatened with extinction, and the habitat with the most threatened species is overwhelmingly tropical rain forest, where the greatest threat to plants is anthropogenic habitat conversion, for arable and livestock agriculture, and harvesting of natural resources.” The study also calculated that “arable farming affects 60% of threatened species, while livestock farming affects 47%, logging affects 38%, targeted harvesting affects 25% and fires (natural or man-made) also affect 25% of threatened species.”EconomistPlantExtinction

In addition, the PLoS One study estimated that with 79% of threatened plant species are found in forests, followed by 19% of threatened species in shrubland, 13% in rocky outcrops, 10% in savanna and also 10% in grassland  percentages do not sum to 100% as some species occur in more than one habitat). The fewest threatened species were found in deserts and wetlands, largely because those areas are least suited for agriculture.

So that’s the bad news. But the good news is peak farmland and plantation forestry. As I report in my chapter on extinction in my book The End of Doom:

Considering that agriculture is the most expansive and intensive way in which people transform natural landscapes, the really good news is that the amount of land globally devoted to food production may be falling as population growth slows and agricultural productivity increases. “We believe that projecting conservative values for population, affluence, consumers, and technology shows humanity peaking in the use of farmland,” conclude Jesse Ausubel, the director of the Program for the Human Environment at Rockefeller University, and his colleagues in their 2013 article “Peak Farmland and the Prospect for Land Sparing.” They add, “Global arable land and permanent crops spanned 1,371 million hectares in 1961 and 1,533 million hectares in 2009, and we project a return to 1,385 million hectares in 2060.” As a result of these trends, humanity will likely restore at least 146 million hectares, an area two and a half times that of France or the size of ten Iowas, and possibly much more land. “Another 50 years from now, the Green Revolution may be recalled not only for the global diffusion of high-yield cultivation practices for many crops, but as the herald of peak farmland and the restoration of vast acreages of Nature,” write the researchers. “Now we are confident that we stand on the peak of cropland use, gazing at a wide expanse of land that will be spared for Nature.”

Also in The End of Doom I note:

Resources for the Future analyst Roger Sedjo estimates that most of the world’s wood products could be derived from tree plantations occupying about 7 percent of the world’s currently forested area. Improving the productivity of tree plantations by means of biotechnology would shrink that area even further. Cultivating trees on plantations spares land for natural forests to grow, and the more productive the trees, the more the land that can be spared for nature.

A couple of months after my book came out, the Food and Agriculture Organization published its new Forest Resources Assessment and reported that that rate of deforestation had already fallen by half between 1990 and 2010. And what is more, the rate of deforestation was likely to continue decelerating.

And finally, most people are moving off of hard scrabble farms and into cities. From The End of Doom:

Demographers expect that 80 percent of people will live in urban areas by 2050 or so. Setting aside the demographic fact that people who live in cities have fewer children, what this trend means is that a lot fewer people will be living on the landscape in the future. Today, about half of the world’s population of 7.2 billion people lives in rural areas. Assuming that world population grows to 9 billion by 2050 and that 80 percent do live in cities, that would mean that only 1.8 billion would be on the landscape, as compared to 3.6 billion today. If world population tops out at 8 billion, then only 1.6 billion people would live in the countryside—2 billion fewer people than live there now.

The new data on the vulnerability of plants to extinction from the Kew researchers is sobering, but there are lots of positive trends that suggest that the 21st century will be a century of environmental renewal, rather than one of ecological ruin.

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Trump Searches for a VP, Cruz Plots, Clinton Pivots Left: P.M. Links

  • Corey LewandowskiThe search for Donald Trump’s vice presidential nominee is in the capable, delicate hands of Corey Lewandowski. 
  • Military voters back Trump over Hillary Clinton.
  • Clinton is moving to the left, for the moment.
  • Ted Cruz: It’s not over until it’s over, and even then, maybe not.
  • The Cliven Bundy family is filing suit against President Obama.
  • Jack Hunter and Milo Yiannopoulos argue about the true nature of the alt-right.

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Gary Johnson on CNN: “On the Social Side of Bernie, I Get It”

Libertarian Party (L.P.) presidential hopeful Gary Johnson (the former Republican governor of New Mexico, who brought the L.P. it’s highest-ever vote totals in 2012 with 1.27 million) wants Bernie Sanders fans to know, hey, if they don’t have their guy to vote for in November, take a close look at him.

In a CNN website write-up of a Johnson interview with CNN”s Chris Cuomo today, the candidate said of Sanders:

“When it comes to economics, we come to a ‘T’ in the road,” Johnson said. “But on the social side of Bernie, I get it.”

Johnson said that according to the nonpartisan online political quiz ‘iSideWith,’ the candidate he most aligns with is Sanders.

Acknowledging his mutual appeal with Sanders to disaffected, socially liberal voters, Johnson called Sanders’ social values “very libertarian.”

Johnson called the Democrats’ likely winner Hillary Clinton the “ultimate technocrat.” He also slammed Donald Trump for “saying some things that I just think are ridiculous and would disqualify any other candidate” and leaned on his record as a border state Republican governor to say Trump’s immigration fearmongering and wall-building dreams are “crazy.”

Johnson stressed, as he does often, that being involved in the national presidential debates after all the parties have chosen their nominees is vital to the L.P. candidate doing well. And given the Commission on Presidential Debates rules—which Johnson is challenging now in an unresolved lawsuit—that requires getting over 15 percent in multiple polls.

So far, he’s only appeared in two national polls I know of, Monmouth in March which gave him 11 percent, and a Public Policy Polling one this week in which he gets 4 percent.

The CNN news clip linked above containing the writeup of his Cuomo interview, strangely, contains video of a completely separate Johnson CNN interview, this one with Michael Smerconish, in which Johnson is a little slow on the uptake to sum up the Libertarian platform (but then does get out the ol’ socially liberal, fiscally conservative, all about individual freedom and liberty with a recognition that most of our foreign interventions cause unwanted unintended consequences.

“I gotta get in the polls,” he says to Smerconish, and he does. He ends with a near-desperate sounding plea on that point.

Smerconish interviewed a bigwig at Quinnipiac polling and completely failed to get him to answer whether his poll would ever consider including Johnson, in a quite evasive way. (Hat tip to Sebastien Fauste for sending me the link in the previous sentence to Smerconish’s interview with Quinnipiac’s Peter Brown.)

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Stocks Up, Bonds Up, Credit Up, Commodities Up, Dollar Up… Volume Down, Economy Down

Yeah ok – the best day in US equities in 2 months… on what? Data has been crap (even JOLTS 'good news' does nothging but corner The Fed into rate hikes even more), earnings have done nothing, bonds are rallying, and oil rallied on the back of a surge in production (perhaps front-running API inventory data)…"it's all good" up here right?

 

US economic data continues to deteriorate…

 

And it appears bonds have been right…

 

Volume plunges to 2016 lows…

 

Russell 2000 Small Caps underperfomed on the day as the rest of the major indices seemed to trade tick for tick after Europe closed except for Nasdaq's meltup (today's move felt much more index top down driven than any "stock" buying)

 

Nasdaq "Golden Cross"-ed this week, seemingly traded very technically, bouncing off the 100DMA and pushing to test the 50/200DMA…

 

Futures give us a better look at the excitement…

 

VIX tumbled to 3-week lows (13 handle) extending S&P's bounce off the Year-to-Date "unch" levels…

 

Bonds and stocks decoupled (both bid)…

 

Stocks accelerated notably more than VIX implied…

 

And "Most Shorted" stocks were squeezed for 30 mins after Europe's close, they continue to underperform…

 

After the biggest 7-day redemption in history (yes ever ever), HYG soared today by the most in 2 months – makes perfect sense… (CDX HY rallied by the most in 2 months also – tightening 18bps to 441bps)

 

Treasury yields traded in a narrow range, with the curve modestly glatter (2Y +2bps, 30Y -0.5bps)…

 

The USD Index gained modestly onteh day thanks to continued weakness in JPY (despite strength in commodity currencies)…

 

While copper ended red, and despite USD gains, Crude soared and PMs managed decent gains on the day…

 

Finally, it appears the dismal jobs data on Friday has prompted excitment in stocks and crude oil (yay less people employed to buy gasoline!!), left bonds unphased, and caused safe haven buyers to abandon Gold (hey – a job's a job right)…

 

Charts: Bloomberg

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This Is What The “Main Street Serving” Fed’s Wall Street Advisors Told It To Do About Future Rate Hikes

Yesterday, in an impassioned appeal to the hearts and minds of Americans everywhere, Minneapolis Fed Neel Kashkari said that the Fed is “here to serve Main Street” the same main street which currencly has $8.4 trillion in savings accounts currently earning exactly 0% in interest. Yet it wasn’t Main Street but Wall Street that the Fed listened to once again last Wednesday, May 4, when the Fed’s Advisory Council which comprises of 12 bankers such as James Gorman, Richard Holbrook, and John Stumpf, advised the Fed on how to conduct future monetary policy.

This is what the Fed’s non-Main Street advisors said about “the current stance of monetary policy.”

U.S. economic recovery remains fragile, and downside risks to the economy are still present. Provided the data improve, the Council believes one or two well-timed and well-communicated increases in the federal funds rate between now and year-end would be prudent to accomplish the Fed’s mandates, enhance central bank credibility, and create policy latitude in the event of an unexpected economic downturn.

 

The Fed responded appropriately to recent stress in the financial markets by providing additional monetary accommodation that has supported a rebound in global credit and equity markets. Financial markets have exhibited a moderate recovery rate, although economic growth remains fairly muted.

 

Investors see the stance of U.S. monetary policy as relatively restrictive. This is reflected by below-target inflation expectations, higher forward interest rates, and a very strong dollar, the latter being a major drag on the U.S. economy. They foresee slower real growth, lower inflation, and a lower trajectory for the federal funds rate than the FOMC’s projections suggest.

 

Council members are apprehensive about the interplay between the domestic and global economies. It is not clear whether the U.S. economy will foster stronger growth in the rest of the world or whether weaker growth in the rest of the world will slow the U.S. economy.

 

Council members also recognize that negative interest rates at the European Central Bank, the Bank of Japan, and other central banks continue to exert downward pressure on U.S. interest rates.

 

One Council member expressed concern that a shift toward a neutral policy stance may not provide sufficient support for an economy struggling to achieve the Fed’s growth projections. GDP growth for the first quarter of 2016 may be close to zero, and the year-over-year growth rate may fall below 2%. Moreover, nominal GDP growth may not be adequate to service the heavy U.S. and global debt overhang.

To sum up: not surprisingly Wall Street believes that the Fed, which started off the hear with expectations for 4 rate hikes can “enhance credibility” by hiking as “much” as one more time in 2016, and notes that “financial markets have exhibited a moderate recovery rate, although economic growth remains fairly muted” and that while everyone else was content with the level of the S&P, one, just one, member said that “nominal GDP growth may not be adequate to service the heavy U.S. and global debt overhang.

But with the S&P 2% below all time highs, it’s best to be on the safe side and to just keep blowing bubbles. After all if there is another crash, everyone now knows just who will bail out the bankers on the Advisory Council.

Source

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Angry White Men? Trump Voters Are Smarter And Richer Than The Average American

It's not just "angry blue collar white men," that are supporting Donald Trump. Having received a record number of votes in a Republican nomination campaign and winning in some of the richest and best-educated counties in the country adding to victories in his more traditional strongholds of white working-class neighborhoods, statistician Nate Silver found – after reviewing exit poll data in 23 states – that Trump voters' median household income was higher than the median in every state, sometimes by a wide margin; and that 44% of Trump voters have college undergraduate degrees, compared to 29% of US adults.

Coverage of 2016's bizarre primary season has painted the stereotypical Donald Trump supporter as white, working class, and uneducated. As Quartz' Corinne Purtill reports, Trump’s popularity with that demographic led some early pundits to dismiss his candidacy, as there simply aren’t enough such voters to propel a candidate to victory.

But an analysis of exit poll data by FiveThirtyEight finds that Trump voters have higher median household incomes than the typical American, and higher education levels too.

 

In fact Hillary only dominates mong the very lowest of income earners in America – which is no surprise since "work is punished" at that level of income.

What’s more, Silver found that 44% of Trump voters have college undergraduate degrees, compared to 29% of US adults.

As Purtill concludes, explaining Trump’s popularity isn’t as simple as it once seemed.

*  *  *

It appears, as Liberty Blitzkrieg blog's Mike Krieger details, the trump-Clinton battle is getting closer than many expected…

A Clinton match-up is highly likely to be an unmitigated electoral disaster, whereas a Sanders candidacy stands a far better chance. Every one of Clinton’s (considerable) weaknesses plays to every one of Trump’s strengths, whereas every one of Trump’s (few) weaknesses plays to every one of Sanders’s strengths. From a purely pragmatic standpoint, running Clinton against Trump is a disastrous, suicidal proposition.

 

– From February’s post: Why Hillary Clinton Cannot Beat Donald Trump

The latest Quinnipiac University Survey on the 2016 U.S. Presidential election is absolutely fascinating, and presents some very bad news for team Clinton, as well as all the clueless pundits who say Trump can’t win.

The major takeaway is that Trump and Clinton are locked in a total dead heat in the three key swing states of Florida, Ohio and Pennsylvania. This is remarkable considering all the heinous things Trump said on his way to the GOP nomination, and the fact that he’s barely started to “sell” himself to the general electorate, which is his primary skill in life.

Several things we already knew were confirmed by the survey, such as the fact that Clinton dominates Trump when it comes to women and minorities. Trump likewise dominates when it comes to white men. The only interesting aspect is how huge the spreads are within these categories.

The truly fascinating takeaway from the survey can be found in the details. The key demographics Clinton needs to do well in (youth and independents) are areas in which she struggles mightily in these swing states. In contrast, Bernie Sanders dominates Trump in those two categories, proving once again that he’s by far the stronger general election candidate.

Here’s some of what we learned from Quinnipiac:

In a race marked by wide gender, age and racial gaps, former Secretary of State Hillary Clinton and Donald Trump are running neck and neck in the key presidential Swing States of Florida, Ohio and Pennsylvania, but Sen. Bernie Sanders of Vermont runs stronger against the likely Republican nominee, according to a Quinnipiac University Swing State Poll released today.

 

Clinton and Trump both have negative favorability ratings among voters in each state, compared to Sanders’ split score, the independent Quinnipiac (KWIN-uh-pe-ack) University Poll finds. The Swing State Poll focuses on Florida, Ohio and Pennsylvania because since 1960 no candidate has won the presidential race without taking at least two of these three states. 

The presidential matchups show:

  • Florida – Clinton at 43 percent, with 42 percent for Trump and Sanders at 44 percent to Trump’s 42 percent;
  • Ohio – Trump edges Clinton 43 – 39 percent, while Sanders gets 43 percent to Trump’s 41 percent;
  • Pennsylvania – Clinton at 43 percent to Trump’s 42 percent, while Sanders leads Trump 47 – 41 percent.

“Six months from Election Day, the presidential races between Hillary Clinton and Donald Trump in the three most crucial states, Florida, Ohio and Pennsylvania, are too close to call,” said Peter A. Brown, assistant director of the Quinnipiac Poll.

 

“At this juncture, Trump is doing better in Pennsylvania than the GOP nominees in 2008 and 2012. And the two candidates are about where their party predecessors were at this point in Ohio and Florida.” 

Strange. We could’ve sworn all the super smart beltway experts told us Trump would get slaughtered by Clinton.

 

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The University of Oregon’s Thought Police Investigate Students for Saying Anything

Fear“A staff member reported that residents made inappropriate gender-based comments. A [Bias Response Team] Case Manager referred the case to Sexual Violence Support Services.” – a “bias incident” summary

What happens when members of a university community allege that they were victims of a “bias” incident? A team of administrators intervene—no matter how petty the complaint.

An annual report on the activities of University of Oregon’s Bias Response Team provides a frightening yet fascinating glimpse into the practices of these organizations, which are common on college campuses. Students, faculty, and staff who feel threatened, harassed, intimidated, triggered, microaggressed, offended, ignored, under-valued, or objectified because of their race, gender, gender identity, sexuality, disability status, mental health, religion, political affiliation, or size are encouraged to contact the BRT.

The team is composed of seven administrators, which include Oregon’s “multicultural inclusion support specialist,” LGBT director, and “Native American Retention Specialist.” The BRT’s goal is to eradicate bias on campus, making Oregon a safer place. Bias is defined as “any physical, spoken, or written act” that targets another person, even unintentionally. The team’s posters propose examples of bias incidents: statements like “Thanks, sweetie,” and “I don’t see color,” apparently qualify. (The former is patronizing, the latter is simply wrongthink, I guess.)

If you’re not sure what exactly the BRT does, its annual report includes a helpful Logic Model. Think Silicon Valley’s “Conjoined Triangles of Success”:

Bias

Actually, that’s not very helpful at all, is it? Not to fear: the report also includes summaries of all 85 of the incident reports filed last year. The BRT documented the nature of every complaint, categorized it, and recorded what response was taken. A thorough review of these summaries suggests to me that the BRT is essentially an administrative thoughtpolice that routinely intervenes in situations where one student’s constitutionally-protected speech has offended another student. The team is also not shy about referring its cases to university agencies with more robust enforcement powers.

Here’s a sampling:

A staff member reported that a poster featured a triggering image.

Bias Type: Body Size

Location: Housing

Response: Reported for information only. A BRT Advocate offered support to the

reporter.

This doesn’t seem like an “incident” at all. Public university students do not have the right to live free of bothersome posters—especially in this case, where it seems likely the poster was subjectively offensive to a single person, for reasons having to do with that person’s body size.

But it’s important to note that the BRT didn’t censor the poster: it merely offered counseling to the person who complained. No one’s free speech rights were trampled.

Sadly, this was not always the case.

A student reported a culturally appropriative themed party.

Bias Type: Ethnicity, Race

Location: Student Programs

Response: A BRT Advocate reached out to the reporter. A BRT Case Manager

met with the president of the student program to discuss the incident.

A faculty member reported that a student group included a derogatory slur in a

Facebook event description.

Bias Type: Ethnicity, Race

Location: Online

Response: A BRT Advocate spoke with the reporter, and a BRT Case Manager held

an educational conversation with the president and the advisor of the group.

A student reported that a professor wrote an insulting comment on their online blog.

Bias Type: Religion

Location: Online

Response: A BRT Advocate met with the reporter, and a BRT Case Manager held a

professional development conversation with the professor.

In these cases, the BRT actually met with the persons accused of perpetrating a bias incident. It should go without saying, but none of these incidents are worthy of an investigation led by university administrators. Students have the right to throw parties, even if those parties are culturally-appropriative. Students have the right to make derogatory statements on Facebook. Professors have the right to post critical comments on blogs. Students do not give up their most basic First Amendment rights when they enroll at Oregon, and professors are entitled to broad academic freedom protections.

And although the BRT evidently lacks the power to sanction the offenders, that might not have been clear to students who were accused of bias and made to have a chat with campus officials working for the Dean of Students. Did the student who hosted the appropriative party know that he wouldn’t and couldn’t be punished for doing so?

Then there were the cases where the alleged victim of the bias incident wasn’t even the one who reported it:

Anonymous staff members reported that another staff member asked a coworker

inappropriate questions and did not refer to them correctly.

Bias Type: Gender Identity/Expression

Location: Campus Dining

Response: A BRT Case Manager contacted the appropriate supervisor, who

checked in with the target of these incidents and held a professional development

conversation with the coworker.

Can you imagine being approached by your supervisor and told that university administrators were looking into your alleged mistreatment—mistreatment you never reported, and may not have even considered to be mistreatment in the first place?

Next were the cases where the BRT essentially informed on the alleged bias perpetrators, reporting them to other authorities:

A staff member reported that residents made inappropriate gender-based comments.

Bias Type: Gender

Location: Housing

Response: A BRT Case Manager referred the case to Sexual Violence

Support Services.

A staff member reported that another staff member made a culturally incompetent

remark while facilitating a training.

Bias Type: Ability, Gender Identity/Expression

Location: Administrative Building

Response: A BRT Case Manager referred the case to the Dean of Students.

An anonymous student reported that a professor made a joke about sexual assault.

Bias Type: Gender

Location: Classroom

Response: A BRT Case Manager referred the case to the Offi ce of Affi rmative

Action and Equal Opportunity.

Jokes and insensitive remarks were deemed serious enough for Sexual Violence Support Services, the Dean of Students, and the Equal Opportunity office.

Next were the cases where BRT itself took ridiculous actions:

A student reported that a sign encouraging cleaning up after oneself was sexist.

Bias Type:Gender

Location: Housing

Response: A BRT Advocate met with the reporter and empowered them to

contact Housing staff. A BRT Case Manager followed up to ensure that the sign was

removed, and the program staff had an educational conversation about the issue.

An anonymous student reported that a newspaper gave less press coverage to

trans students and students of color.

Bias Type: Ethnicity, Race, Political Affi liation

Location: Online

Response: A BRT Case Manager held an educational conversation with the

newspaper reporter and editor.

Yes, university administrators had “an educational conversation” with student-journalists about what kinds of stories they should be printing.

Needless to say, the activities of the Bias Response Team should be concerning to anyone who values free speech at Oregon.

“It’s troubling to see the university policing and micro-managing students’ every day interactions,” Azhar Majeed, an attorney at the Foundation for Individual Rights in Education, told me. “One can imagine the chilling effects this would have.” (Majeed has also written about bias incident policies for The Huffington Post.)

I contacted both the BRT and the office of the Dean of Students. Neither responded to requests for comment. I will update this post if they do so.

The bias summaries don’t include all the details. It may certainly be the case that some of these incidents were truly concerning, and that the BRT provided a worthwhile resource. But there’s something positively Orwellian about vesting administrators—not faculty, but administrators—with the responsibility to tell students what they should and shouldn’t say. These “conversations” the BRT sponsors reflect a massive power imbalance between students and administrators, since the administrators appear to have the authority to punish the students.

What right-thinking student, having been informed that he is a person of interest in a bias incident, would dare rebuff a member of the BRT who wants to have a conversation about his conduct? Would a student in such a situation feel like he could invoke his First Amendment rights without facing reprisals?

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Hey Paul Krugman: That’s Not Insulin You’re Injecting; It’s Heroin!

Submitted by Samuel Bryan via SchiffGold.com,

In a recent New York Times column, economist Paul Krugman tried to justify central bank interventionist monetary policy by comparing it to giving insulin to a diabetic.

How should we think about these incredibly low interest rates? Recently Narayana Kocherlakota, the former president of the Minneapolis Fed, offered a brilliant analogy. Responding to critics of easy money who denounce low rates as ‘artificial’ – because economies shouldn’t need to keep rates this low – he suggested that we compare low interest rates to the insulin injections that diabetics must take. Such injections aren’t part of a normal lifestyle, and may have bad side effects, but they’re necessary to manage the symptoms of a chronic disease.”

heroin

Bob Murphy took apart Krugman’s reasoning in an episode Contra Krugman, utilizing an analogy Peter Schiff often employs. It isn’t insulin central bankers are injecting into the economy. It’s heroin.

He says this is like insulin to treat a diabetic patient. Well, if you’re going to go with that analogy, actually it’s much more accurate to say it’s like giving heroin to an addict. And yes, if you take it away, given that you’ve, over the years, inculcated this habit and this addiction, and then suddenly take it away, for a while it’s going to be agony. And you could argue, ‘Well gee, if you just gave the heroin back to the patient, things would go back to normal, and the patient would be fine.’ And so that’s kind of the way Krugman is…But the point is ultimately to get on a solid footing and to have a healthy economy, you need to take away the heroin…Just by continuing to give ever-larger doses of it, larger injections, that might provide short-term relief, but obviously in the long run, you’re just setting the patient up for an even bigger crash.

Tom Woods went on to explain the long-term ramifications of this monetary heroin.

You can try and string the economy along by continuing with more monetary injection and so-on, and it does look like things are going well. But what’s really happening is that real viable firms and industries are forced to compete for resources with firms and industries that can stay afloat only as long as there’s cheap money. And do we really want healthy firms and industries that we would really want in the real economy to be in that kind of situation? So yes, it’s true, when the bubble industry, or the sorts of industries that couldn’t survive otherwise, when they do begin to suffer, you can’t just think well we’re against suffering in the abstract. What we want is resources to go where they need to go in order to satisfy people’s needs, and that’s what begins to happen during the recession period. So yes, nobody likes suffering, but the way you avoid the suffering is you try not to create the circumstances that lead to it in the first place.

In other words, avoid the heroin!

But as Janus Capital’s Bill Gross pointed out in a recent column, that really isn’t politically expedient. Government and central planners will just keep dosing the addict with heroin – until he eventually dies.

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