Month: May 2016

Submitted by Patrick Buchanan via Buchanan.org,

In his op-ed in The Washington Post, Chris Grayling, leader of the House of Commons, made the case for British withdrawal from the European Union — in terms Americans can understand.

Would you accept, Grayling asks, an American Union of North and South America, its parliament sitting in Panama, with power to impose laws on the United States, and a high court whose decisions overruled those of the U.S. Supreme Court?

 

Would you accept an American Union that granted all the peoples of Central and South America and Mexico the right to move to, work in, and live in any U.S. state or city, and receive all the taxpayer-provided benefits that U.S. citizens receive?

This is what we are subjected to under the EU, said Grayling.

And as you Americans would never cede your sovereignty or independence to such an overlord regime, why should we?

Downing Street’s reply: Prime Minister David Cameron says leaving the EU could cost Britain a lot of money and a loss of influence in Brussels.

The heart versus the wallet. Freedom versus security.

While Barack Obama, Cameron and Angela Merkel are pulling for Britain to vote to remain in the EU, across Europe, transnationalism is in retreat, and tribalism is rising.

As Britain’s Independence Party and half the Tory Party seek to secede from the EU, the Scottish National Party is preparing a new referendum to bring about Scotland’s secession.

The strongest party in France is the National Front of Marine Le Pen. In Austria’s presidential election, Norbert Hofer of Jorg Haider’s Freedom Party came within an eyelash of becoming the first European nationalist head of state since World War II.

The Euroskeptic Law and Justice Party is in power in Warsaw, as is the Fidesz Party of Viktor Orban in Budapest, and the Swiss People’s Party in Bern. The right-wing Sweden Democrats and Danish People’s Party are growing stronger.

In 2015, Merkel, Time’s Person of the Year, admitted a million Middle East refugees. This year, Merkel flipped and paid a huge bribe to Turkey’s Recep Tayyip Erdogan to keep Syrian refugees from crossing the Aegean to the Greek islands and thence into Europe.

In Germany, too, nationalism is resurgent as opposition grows to any new bailouts of the La Dolce Vita nations of Club Med. The populist AfD party has made major strides in German state elections.

While the rightist parties in power and reaching for power are anti-EU, anti-Islamic and anti-immigrant, the secessionist movements roiling Scotland, Spain, Belgium and Italy seek rather the breakup of the old nations of Europe along ethnonational lines.

By enlisting in these parties of the right, what are the peoples of Europe recoiling from and rebelling against? Answer: The beau ideal of progressives — societies and nations that are multiracial, multiethnic, multicultural and multilingual.

Across Europe, the tribalists are rejecting, in a word, diversity.

And what are they seeking?

God-and-country, blood-and-soil people, they want to live with their own kinfolk, their own kind. They do not believe in economics uber alles. And if democracy will not deliver the kind of country and society they wish to live in, then democracy must be trumped by direct action, by secession.

This is the spirit behind Brexit.

The is the spirit that drove the Irish patriots of 1919, who rose against British rule, though they were departing the greatest empire on earth in its moment of supreme glory after the Great War, to begin life among the smallest and poorest countries in all of Europe.

What is happening in Europe today was predictable and predicted.

At the turn of the century, in “The Death of the West,” I wrote,

“Europe has begun to die. The prognosis is grim. Between 2000 and 2050, world population will grow by more than three billion to over nine billion people, but this 50 percent increase in population will come entirely in Asia, Africa and Latin America, as one hundred million people of European stock vanish from the earth.”

Europeans are vanishing, as the peoples of the Maghreb and Middle East, South Asia and the sub-Sahara come to fill the empty spaces left by aging and dying Europeans whose nations once ruled them.

Absent the restoration of border controls across Europe, and warships on permanent station in the Med, can the inexorable invasion be stopped? Or is “The Camp of the Saints” the future of Europe?

An open question. But if the West is to survive as the unique civilization it has been, its nations must reassume control of their destinies and control of their borders.

Britain ought not to go gentle into that good night the EU has prepared for her. And a great leap to freedom can be taken June 23.

Trooping to the polls, the cousins might recall the words of Vera Lynn, 76 years ago, as the Battle of Britain was engaged:

“There’ll always be an England,

 

“And England shall be free,

 

“If England means as much to you

 

“As England means to me.”

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Now that the market’s fascinated dream with the regime of Brazil’s new president Michel Temer is quickly turning into a nightmare, following two immediate resignations of his closest ministers over the ongoing Carwash corruption scandal, including ironically that of the country’s anti-corruption minister, Fabiano Silveira, attention is gradually returning to what is truly the cause of Brazil’s woes: an unprecedented economic depression, although only for the people – certainly not for the political elite.

And unfortunately, Brazil’s depression – which is what we first defined it here all the way back in December 2014 – is getting worse with every passing month. The latest economic news metely confirm this. Here is Goldman’s take on today’s disastrous unemployment numbers

The labor market continues to deteriorate: The unemployment rate continues to climb and is now at 11.2% with the ranks of the unemployed reached 11.4 million (up from 8.0 mn a year ago).

 

 

Employment declined 1.7% yoy in the 3-month period ending in April, while the active labor force grew 1.8%. Average real wages declined 3.3% yoy. We expect labor market conditions to deteriorate further given the expectation that the economy will remain weak for the remainder of 2016.

The national unemployment rate printed at a higher than expected 11.2% in the 3-month period ending in April, up from 10.9% in March, 8.0% a year ago, and 7.1% two years ago. In seasonally adjusted terms the unemployment rate climbed to 10.8% in April from 10.4% in March and 7.6% a year ago.

Formal salaried employment in the private sector shrank 4.3% yoy, and employment in the informal sector dropped 0.6% yoy. On the other hand, self-employment grew 4.9% (a reflection of increasingly limited salaried employment opportunities). By sector of economic activity, industrial employment shrank by a large 11.8% yoy.

Average real wages declined 3.3% yoy in April, with average real wages of the self-employed and those working in the informal sector down 5.1% yoy and 1.4% yoy, respectively.

Here is a better representation of Brazil’s unemployment problem:

 

Goldman’s conclusion: “We expect the labor market to deteriorate further. Exigent credit conditions, weak consumer and business confidence, and restrictive overall financial conditions are expected to lead to rising unemployment in 2016 and negative real wage growth.“

But while until recently the market could care less about Brazil’s economy, enthralled instead by the “bullish” political fight at the top which replaced one corrupt leader with another just as corrupt leader, this time investors – out of near-term catalysts – are once again paying attention. And the result, as Bloomberg writes, “this month marked a reversal of fortune for Brazilian stocks.”

The Ibovespa is the world’s worst performer in May as investors seek signs that acting President Michel Temer will be able to rescue the economy even as members of his administration get caught up in the same type of political turmoil that encircled Dilma Rousseff before she was removed from office to face impeachment proceedings. Brazil’s stock gauge was the third-best performer in the first four months of the year on optimism the new government would shore up the budget and restore growth.

 

“The market faced a reality check this month,” said Adeodato Volpi Netto, the head of capital markets at Eleven Financial Research in Sao Paulo. “The process of fixing the economy will be a bumpy road. I just hope that investors don’t go away.”

 

The Ibovespa has dropped 8.7 percent this month, its worst performance in more than a year and a half and the biggest decline among more than 90 gauges tracked worldwide by Bloomberg. It gained 0.4 percent to 49,140.63 at 11:23 a.m. in Sao Paulo on Tuesday after falling as much as 0.6 percent earlier in the day.

Which remind us of what we wrote back on May 12, namely that the time has come to exit Brazilian risk assets:

… if markets believe that the Brazilian political situation will stabilize following the Rousseff “coup” as she calls it, we would be sellers for one simple reason. As AP puts it, the man who may become Brazil’s next president is almost as unpopular as the leader facing impeachment now, and stained by scandals of his own.

In retrospect, we make have ticked the high Brazilian print for 2016.

 

And as investors are left with nothing but Brazil’s economic depression to look forward to, punctuated perhaps with the occasional bout of social violence and a disastrous bout of Summer Olympics to boot, the decline in Brazil assets is set to accelerate, unless somehow the narrative changes and now the return of Dilma Rousseff, suddenly looking all too possible, is spun as bullish.

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Submitted by Michael Krieger of LibertyBlitzkrieg

Now regulators from Bern to Washington are examining evidence first reported by Bloomberg News in June that a small group of senior traders at big banks had something else on their screens: details of each other’s client orders. Sharing that information may have helped dealers at firms, including JPMorgan Chase & Co., Citigroup Inc., UBS AG and Barclays Plc, manipulate prices to maximize their own profits, according to five people with knowledge of the probes.

 

At the center of the inquiries are instant-message groups with names such as “The Cartel,” “The Bandits’ Club,” “One Team, One Dream” and “The Mafia,” in which dealers exchanged information on client orders and agreed how to trade at the fix, according to the people with knowledge of the investigations who asked not to be identified because the matter is pending. Some traders took part in multiple chat rooms, one of them said.

 

“Some of these problems developed over many years without anybody speaking up,” said Andrew Tyrie, chairman of Britain’s Commission on Banking Standards and Parliament’s Treasury Select Committee. “This is remarkable. It suggests something very wrong with the culture at these institutions.”

–  From the 2013 post: Meet the “Bandits’ Club” – The TBTF Wall Street Cartel Rigging the FX Market

Serious question: Is there any illegal activity that someone at Barclays hasn’t been accused of engaging in?

Bloomberg reports:

A former Barclays Plc director was accused by the U.S. of giving tips about future mergers and acquisitions to a plumber friend in exchange for cash and home renovations.

 

Steven McClatchey, 58, who worked in the investment-banking division, told the plumber about 11 impending mergers and acquisitions from March 2014 to August 2015, the government said. The plumber wasn’t named.

 

McClatchey and the plumber met in 2011 or 2012 at the Long Island marina where both dock their boats, according to the complaint. By 2013, they spent most Saturdays at the marina or, in cold weather, playing pool and watching sports in McClatchey’s garage. The plumber used tips from McClatchey to make $76,000 trading stocks including Questor Pharmaceuticals Inc., PetSmart Inc., Emulex Corp. and Omnicare Inc., the government said.

The WSJ adds:

Steven McClatchey, 58, was a former employee at Barclays, the bank confirmed. Prosecutors said he worked for seven years at the Manhattan office of Barclays, where he was responsible for tracking the bank’s involvement in potential mergers and acquisitions. He distributed a weekly document to select Barclays employees called “M&A Global Weekly Business Update,” which included deals that were likely to become public the following week.

 

Government officials allege Mr. McClatchey gave tips to his friend who worked as a plumber ahead of more than 10 separate mergers and acquisitions before they became public, including deals involving PetSmart Inc., CVS Health Corp. and Duke Energy Corp.

 

The plumber allegedly paid Mr. McClatchey, in part, by providing “home renovation” services free of charge.

* * *

The two men became friends about four years ago, when they met at the Long Island marina where they both docked their boats. They began to spend most Saturdays together, the complaint said. The first tip Mr. McClatchey gave Mr. Pusey came around 2013 or 2014, when Mr. McClatchey allegedly told the plumber to “keep an eye on a particular company because something good was going to happen,” according to the complaint. Based on the tips, Mr. Pusey bought securities in at least 11 companies, prosecutors said.

Barclays said. that “we have rigorous and extensive conduct and compliance training at Barclays which we underpin with a steadfast commitment to acting with integrity and respect.”

Of course you do.

For related articles, see:

• Meet the “Bandits’ Club” – The TBTF Wall Street Cartel Rigging the FX Market
• Epic Video: “The Intruders” Crash Banker Award Ceremony and Give Barclays the Libor Rigging Award!
• “Bank Lives Matter” – Obama Administration Makes Another Move to Protect Profits of Criminal Mega Banks

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Having tried (and failed) twice to hold $50, WTI Crude futures plunged back into the red as machines ran out of stops to churn. This triggered another notable leg lower in stocks, slamming The Dow into the red for May… Gold and bond are best since the Friday close.

 

 

Which slammed The Dow into the red for the month..

 

As gold is once again the best performer since the close before the long weekend…

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Following media machinations over his donations to Veterans, Donald Trump struck back today in a press conference, raging that the liberal media "should be ashamed," and singling out ABC's Tom Llamas as a "sleaze." The Donald then turned the microphone over briefly to Al Baldasaro, a veteran from New Hampshire who skewered the news media, saying reporters should ''get your head out of your butt – focus on the real issues…stop using veterans as political pawns."

"What I don’t want is when I raise millions of dollars, have people say– like this sleazy guy right over here from ABC, he’s a sleaze in my book," Trump exclaimed.

Forward to 25 seconds…

 

Trump explains his $1 million donation to veterans, and $5.6 million in total from fundraiser…

 

Republican presidential candidate Donald Trump turned the microphone over briefly to Al Baldasaro, a Trump supporter and a veteran from New Hampshire who skewered the news media…

"First of all, for the record, I’m a state representative from New Hampshire, ten years on the veterans affairs committee, 22 years in the marine corps, retired first sergeant. What I want to clarify here, first of all, I would never, ever in a million years put my name on a candidate that did not from his heart look me in the eye and tell me he’s concerned about veterans. That’s Donald Trump. I met him over a year ago. I’ve been involved with many fund-raisers. There are many scam artists out there. He did the right thing by vetting these groups there. If you look at some of the groups giving 20 cents, 40 cents on the dollar and spending the rest for their nice lavish trips.

“He gave 100 percent. The liberal media is the only ones that have been calling me on the foundation. I’m the former chairman. I’ve been dealing with this stuff for years as a veterans activist. Stop using veterans as political pawns. You got a guy outside, McCoy, go do a google search on his Facebook. He’s out there, his picture is with Clinton. They are using veterans as political pawns, it must stop Donald Trump is doing this from the heart. You’re all focused on the way he’s raising money and you’re not looking at the 22 veterans that are killing each other every day. You’re not concerned about the thousands of veterans that are on wait lists. Look at his plan on this Trump website. He talks about medical cards, he talks about fixing the VA, he talks about competition. I think the liberal media, and I’ve been dealing with you a long time, need to get your head out of your butt, focus on the real issues. Thank you."

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In April we pointed out that due to an already abundant supply of condos on the market, luxury real estate developer Extell Development Co couldn't sell luxury condo's at its One57 tower, in the heart of New York's premier ultra luxury destination.

Extell decided that instead of leasing luxury apartments, it would sell the units as higher end apartments in order to fill vacancies and generate cash. As a reminder, Bill Ackman paid $91.5 million for a condo in One57 in April of 2015 just "for fun" in hopes of flipping the unit at some point. 

As luck would have it, Ackman now has an even bigger investment opportunity in One57.

Extell Development filed documents in April with the state attorney general's office which revealed that there is a "trophy apartment" (prices ranging from $10 million to $45 million) for sale in the complex, with a price tag of a cool $250 million.

The $250 million price tag obliterates the previous high-profile sale of a $88 million penthouse just a walk away at 15 Central Park West in 2012 to a Russian mogul by Sanford Weill, the American financier and philanthropist, who had purchased the apartment four years earlier for half that. Jonathan Miller, an independent appraiser said:

“That $88 million sale triggered the sense that there was this yet-to-be-harvested, nine-digit New York housing market. We started to see a frenzy of $100 million listings – what I call aspirational pricing.”

For the $250 million, the owner would receive 16 bedrooms, 17 bathrooms, and a massive terrace. Monthly common charges would be more than $45,000 and annual taxes estimated to be $675,000.

Who is going to purchase the apartment for such an insane price remains to be seen, but if we had to guess the owners behind the purchase will reside in China.

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