Voters in Illinois will have a chance to raise taxes next year. Indeed, they’ll be able to fundamentally alter the state’s tax code.
Before Monday, the state constitution prevented the government from taxing different levels of income at different rates. But on Monday, the Illinois House of Representatives amended the document to allow a progressive income tax. Voters will choose whether to implement such a tax in 2020.
This tax increase would come on the heels of major state tax hikes in 2017, when the legislature raised income taxes from 3.75 percent to 4.95 percent and corporate income taxes from 5.25 percent to 7 percent.
The proposal on the ballot would replace the existing single 4.95 percent rate with a six-bracket progressive income tax. Gov. J.B. Pritzker’s plan would raise taxes on income over $250,000 to 7.75 percent, income over $500,000 to 7.85 percent, and income over $1 million to 7.95 percent. People at the bottom of the income scale would receive a small tax cut: The first $10,000 in income someone earns would be taxed at a 4.75 percent rate instead 4.95, and income between $10,000 and $100,000 would be taxed at a 4.9 percent rate.
The simple, flat personal income tax of 4.95 percent has remained a rare bright spot of Illinois’ tax code. The Tax Foundation, a nonpartisan tax policy think tank, has ranked the state’s personal income tax the 13th most competitive in the country; Illinois’s tax code generally is ranked 36th.
The tax’s supporters argue that it will address Illinois’ budget shortfall of $3.4 billion in fiscal year 2021, stabilizing a jurisdiction that the libertarian-leaning Mercatus Center has ranked the least fiscally healthy state in the nation. But the Illinois Policy Institute, a free market think tank, argues that the Pritzker administration has overestimated the revenue the tax would raise. Even if the higher tax rates do not slow down economic growth, IRS data indicate that the tax would raise roughly $2.4 billion, not the $3.4 billion promised.
Another defense of the law points out that it will not raise taxes for the 97 percent of taxpayers that make less than $250,000. Yet given the size of Illinois’ long-term fiscal problems, a progressive tax system could mean future tax increases on the middle class once the rich have been soaked.
Another concern is that high-income earners will respond by leaving the state, a phenomenon known as tax flight. Advocates of tax increases have proclaimed that tax flight is a myth, citing a study by the Stanford sociologist Cristobal Young that found a 10 percent increase in the tax rate would produce an exodus of 1 percent of millionaires. Young’s work doesn’t debunk the concept of tax flight so much as suggest it’s a fairly marginal phenomenon with few implications for public policy.
But more recent research suggests otherwise. A National Bureau of Economic Research study published in April found that high-income individuals’ migratory responses to high taxes can be quite high, depending on the proximity of lower-tax jurisdictions, individuals’ roles in the labor market, and the level of human capital. Given Illinois’ location, that means tax flight could be a real concern. Many of the states surrounding Illinois have enacted significant tax reforms recently. Missouri lowered its corporate and top individual taxes last year, as did Kentucky and Iowa, while Indiana’s tax code is already among the most competitive in the country.
And it would be a mistake to focus on millionaire out-migration alone. The personal income tax isn’t just paid by rich individuals—it’s also a tax on businesses whose profits are passed through to their owners’ individual tax returns. Pass-through businesses employ over 57 percent of private sector workers in Illinois. The state already suffers from slow private-sector job growth, and layering on an additional major tax won’t help.
The elephant in the room is Illinois’ fiscal crisis. This is mainly driven by pensions, which take up over a quarter of state government spending and are projected to rise to more than half of state revenue over the next 30 years. As Illinois Policy Institute budget and tax research director Adam Schuster says, “the only path towards prosperity in this state is to reform the state’s largest cost drivers, not dive further into taxpayers’ wallets.” While a tax increase might plug the fiscal hole for a few years, pension costs will continue to grow.
from Latest – Reason.com http://bit.ly/2WgYlfk
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The quoted value of negative-yielding debt the world over hit $11 trillion the other day, the highest such total since September 2016 and almost double the volume in place last October.
These are remarkable facts. You can as easily imagine a five-pawed St. Bernard or a suitable candidate for public office as you can the situation of a lender paying a borrower for the privilege of extending a loan.
The institution of negative yields serves to remind us that radical monetary policy only begets more radical monetary policy.
…
But the central bankers misjudged the human animal. Confronted with a novelty unprecedented in 4,000 years of interest-rate history (negative money-market interest rates are nothing new, but substantially negative note and bond yields are a post-2000 B.C. first), people not unreasonably suspected that something was wrong. And when something is wrong, you save more, not less.
…
Five years into the negative rate experiment, and a decade on in radical monetary improvisation, the central bankers are looking for a way back to normalcy…
But as Grant asks and answers: Do you wonder who’s buying all of the subzero debt?
Peter Chiappinelli, a portfolio strategist at GMO, Boston, says he has given it considerable thought. In a sense, the buyer is the aforementioned Global Agg index, though the index hardly buys itself.
The mystery buyer, Chiappinelli says he has come to see, “is anybody who owns a passive mutual fund tied to the Global Agg. Or anyone who might now own a passive ETF tied to a global bond index. Or anyone who owns a popular target-date fund that has passive exposure to global bond indexes. In other words, millions of Americans.”
Ten-year Treasurys may not yield much, but they deliver something like 240 basis points more than nothing. For that matter, gold bullion, yielding only nothing, nonetheless yields more than $10.6 trillion of notes and bonds that yield less than nothing. It’s all about relative value.
The legendary creator of the MOVE bond volatility index and the iconic Merrill Lynch RateLab, Harley Bassman, has opined on the biggest inversion in the yield curve since the financial crisis (3M-10Y dipped as low as -22.5bps this morning), and his view is hardly favorable.
As Bassman notes in his latest note “Can you hear me Knocking”, he reminds his readers that in his February 6, 2019 commentary titled “Wall Street Jenga”, he noted that “December’s initial Yield Curve inversion flashed a signal for a market or economic disruption in Q2-2020 (Eighteen months ahead).” Fast forward to today when he cautions that “this week, these two rates finally inverted.” And in response to those “best and brightest who are bleating how “it is different this time”, Bassman has a one-word answer: “Puff!“
But before being accused of becoming the “next headline seeking pundit calling for a crash” he explains that he is “just saying that important risk vectors are now in disequilibrium, and these cannot be excused by QE, Trump, or the proximity of MMT.“
Additionally unlike skeptics who believe they know the next surprise will germinate; Bassman declines such as task as “such is the definition of a surprise.That said, well-heeled investment professionals are effectively willing to purchase five-year bonds to be issued in 2024 (five years hence) at a rate below today’s risk-free overnight rate.”
This, as he further notes, is “different than a low print on the VIX, which is a derivative of a derivative; these are two of the most heavily trafficked interest rates in the unfettered US Dollar market.”
As such, he adds, “unless this was a ‘quick kiss’ during the holiday shortened Hamptons summer kick-off, I am starting to prepare for a macro-political or -economic disturbance.“
In short, one of the most respected men in financial analysis is bracing for chaos.
So what is he doing?
First, he urges readers “let’s keep out heads clear, it is not time to panic.” That said…
I am not explicitly reducing risk exposure, per se, rather I am adjusting the manner in which I touch it. I am covering (embedded) out-of-the-money option shorts and seeking ways to be long convexity–unbalanced risk in my favor.
What this means in English is that he is covering OTM puts, and instead of buying stocks – in case trade war gets resolved – he is buying some S&P calls with a 3,000 breakeven, noting that “yes, I will miss a small rally; but if the trade war is resolved I will participate in a break out to new highs.”
Bassman is also making levered investments on mid-grade Credit/MBS/Muni Closed-end Funds and Mortgage REITs, which have “taken a beating from the Yield Curve flattening…. Notice that many Muni CEFs trade at a 10% discount to NAVand some REIT’s trade at a discount to Book Value.” His argument for this trade is that if the curve signal is real, the Fed will cut rates next year (or even this year if JPMorgan is right, twice) and will jump the dividend payout. If he is wrong, he can lick his wounds while clipping a 9% coupon.
His proposed trade recos aside, if Bassman is right and there is indeed a full-blown “disruption” next year, this is what he would guess :
It will not be Brexit or international Trade, these risks are too well trafficked to offer a surprise. The markets may move to adjust, but likely not too abruptly.
Enacting an ill-conceived immigration policy that substantially reduces the Labor Force Growth rate; however, this is a slow poison, not a quick-shot.
The most unlikely, so clearly the most surprising, would be if the US Senate swings to the Democrats. If you want a truth stranger than fiction, imagine the President is re-elected but has to manage a unified Democratic congress.
In conclusion, Bassman has a simple warning that has become his mantra: “it’s never different this time“, because…
A P/E of 100 on the Nikkei in 1989 or the NASDAQ in 2000. No-doc 105% LTV home loans in 2006. Pigs can fly if shot out of a large enough cannon; until they come down to earth as bacon.
His parting words take him full circle to the inversion in the product that made him a market legind: “I don’t know how or when it will resolve, but the Yield Curve has inverted in a half-dozen places, and eventually this ends in tears.”
* * *
For those wanting more, his full note is below.
“Can You Hear Me Knocking”, A commentary by Harley Bassman
A devout man was alone in his home when the flood warnings arrived. A police car drove up with an offer to take the man to a dry shelter; he declined saying that G-d would save him.
Soon the waters rose, and he ran up the stairs. Looking out the second story window he saw a Coast Guard skiff pull up with the offer to take him to an upstream dock; he declined saying that G-d would save him.
With the waters cresting, the man climbed to the roof of his house. Wet to his waist, a Navy helicopter hovered overhead dangling a rope and the airman yelled at him to grab a hold; he declined saying that G-d would save him.
The man drowns and was soon elevated to heaven. Upon meeting G-d he asked why such a devout man as he was not saved? G-d replied: I sent you a car, a boat, and a helicopter – wasn’t that enough?
My January 29, 2018 commentary titled “It’s Never Different This Time” highlighted that the projected reduction in G-7 Central Bank balance sheets in Q1-2019 should be a concern since the infusion of liquidity seemed to be well correlated to calming and elevating financial markets.
A year later, in my February 6, 2019 commentary titled “Wall Street Jenga”, I noted that December’s initial Yield Curve inversion flashed a signal for a market or economic disruption in Q2-2020 (Eighteen months ahead).
I also offered a special notice that I was keeping an eye on the spread between the Federal Funds rate and the 5-year forward 5-year swap rate (5yr-5yr). While there are many Yield Curve combinations, I like this one since the 5yr-5yr rate is a bit more insightful than the spot Curve and is also a half-step removed from the impact of Quantitative Easing/ Tightening (QE/QT).
This week, these two rates finally inverted on a closing basis.
The best and the brightest are bleating how “it is different this time”: Puff !
I will state for the record that the basic human impulses of Fear, Greed, and Ego (Hubris) have not changed too much since (wo)mankind resided in caves. Moreover, I will NOT be the next headline seeking pundit calling for a crash; rather I am just saying that important risk vectors are now in disequilibrium, and these cannot be excused by QE, Trump, or the proximity of MMT.
Let’s keep our heads clear, it is not time to panic. The S&P 500 is not rich; rather it is on the high side of fair relative to interest rates. Additionally, low Sovereign rates in conjunction with the demographic demand for coupon (retired Boomers need income) will allow most maturing debt to be rolled over. Truth be told, I cannot point to where the surprise will germinate; such is the definition of a surprise.
That said, well-heeled investment professionals are effectively willing to purchase five-year bonds to be issued in 2024 (five years hence) at a rate below today’s risk-free overnight rate. This is different than a low print on the VIX, which is a derivative of a derivative; these are two of the most heavily trafficked interest rates in the unfettered US Dollar market.
Unless this was a ‘quick kiss’ during the holiday shortened Hamptons summer kick-off, I am starting to prepare for a macro-political or -economic disturbance.
What am I doing ?
I am not explicitly reducing risk exposure, per se, rather I am adjusting the manner in which I touch it. I am covering (embedded) out-of-the-money option shorts and seeking ways to be long convexity – unbalanced risk in my favor. Volatility is still relatively cheap; a six-month out-of-the-money call option on SPY has an Implied Volatility of about 13%. So instead of being outright long equities, I might buy the K = 295 call at ~5 points with a break-even of 300 (SPX = 3000). Yes, I will miss a small rally; but if the trade war is resolved I will participate in a break out to new highs.
I love mid-grade Credit/MBS/Muni Closed-end Funds and Mortgage REITs.
These assets have taken a beating from the Yield Curve flattening. There may still be some dividend trims as cheap legacy funding debt is renewed at higher rates, but that is already priced in. Notice that many Muni CEFs trade at a 10% discount to NAV and some REIT’s trade at a discount to Book Value. If the Curve signal is real, FED rate cuts next year will jump the dividend payout. And if I am wrong, well, I can lick my wounds while clipping a 9% coupon. To be clear, this is a levered investment; but it is linear, not convex risk.
For the professionals, I am still long the five-year Yield Curve option I recommended in “Catch a Wave” – June 27, 2018. These options now cost a bit more, but not enough to skip this ticket. This option cannot be re-created by a combination of vanilla options, and it has a terrific Vega-kicker since Volatility will increase significantly when the Yield Curve steepens.
As noted, by definition a surprise cannot be anticipated; but if the traditional signals ring true and we have a disruption next year, what might I guess ?
1) It will not be Brexit or international Trade, these risks are too well trafficked to offer a surprise. The markets may move to adjust, but likely not too abruptly.
2) Enacting an ill-conceived immigration policy that substantially reduces the Labor Force Growth rate; however, this is a slow poison, not a quick-shot.
3) The most unlikely, so clearly the most surprising, would be if the US Senate swings to the Democrats. If you want a truth stranger than fiction, imagine the President is re-elected but has to manage a unified Democratic congress.
It’s never different this time. A P/E of 100 on the Nikkei in 1989 or the NASDAQ in 2000. No-doc 105% LTV home loans in 2006. Pigs can fly if shot out of a large enough cannon; until they come down to earth as bacon.
I don’t know how or when it will resolve, but the Yield Curve has inverted in a half-dozen places, and eventually this ends in tears.
Are you listening ?
via ZeroHedge News http://bit.ly/2W6YT2G Tyler Durden
Godzilla: King of the Monsters is, on the one hand, a mindless, goofy B-movie about giant lizards fighting each other while humans look on helplessly, and, on the other hand, a mystical ecological parable, in which a band of committed eco-terrorists unchain forces of destruction in order to cleanse the planet of the plague of humanity. It thus poses a question: Who is the real monster—man or megalizard?
The eco-terrorists’ plan is pure nonsense, but it has the virtue of being simple and direct: Release a handful of mountain-sized beasts from the bowels of the planet, then let them stomp around murdering everything and everyone in their path. Monsters + destruction = planet saved.
The monsters, we come to understand, are actually ancient Titans who serve as “nature’s defense,” which sounds suspiciously like the name of an environmental non-profit. These Titans are tasked with preserving the planet’s integrity. In this case, that appears to mean wiping out much of human civilization. To make a planet-sized omelet, I suppose, you have to break a few billion eggs.
Like so many presidential campaign policy proposals, this preposterous idea is debated with a seriousness and solemnity it doesn’t merit. What about all the people who will die as a result? “The mass extinction has already begun,” explains one proponent of the release-the-monsters strategy, “and we are the cause.” In other words, think of all the people who will die if we don’t set loose the flying fire demon.
“You’re murdering the world!” cries one of the movie’s pro-human heroes, agog at the deadly havoc the monsters will wreak. Thus, the movie is staged not only as a series of monster-on-monster brawls, but as an ideological battle between the rival factions of “Actually, Mass Murder By Monster Is Objectively Good,” and “Are You Freaking Kidding Me?” In this way, and only this way, the film rather accurately captures the lopsided character of many real-world political debates.
King of the Monsters isn’t a very good movie. The script is filled with clunky dialogue. (“Serizawa got that lizard juiced up!” exclaims Bradley Whitford, in a line that makes exactly as much sense in context.) And like so many modern blockbusters, it’s larded with unconvincing computer-generated effects that would feel more at home in a video game. Finally, it’s disappointing, though understandable, that the film couldn’t be titled Remember the Titans.
But it does offer yet another data point supporting my friend Sonny Bunch’s contention that radical environmentalists make effective movie villains because they want to make life worse for humans, in this case by allowing a bunch of CGI lizards to destroy Boston, Washington, and a host of other cities around the globe. Municipal governance is often frustrating, it’s true, but the presence of a roving troop of skyscraper-sized murder lizards in major world cities, I am fairly certain, counts as worse.
The human culpability in the movie’s urban destruction, however, seems to suggest an answer to the larger question it raises: Are people worse? Or are the giant monsters? As President Obama might have said: That’s a false choice.
from Latest – Reason.com http://bit.ly/2MzTG43
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Godzilla: King of the Monsters is, on the one hand, a mindless, goofy B-movie about giant lizards fighting each other while humans look on helplessly, and, on the other hand, a mystical ecological parable, in which a band of committed eco-terrorists unchain forces of destruction in order to cleanse the planet of the plague of humanity. It thus poses a question: Who is the real monster—man or megalizard?
The eco-terrorists’ plan is pure nonsense, but it has the virtue of being simple and direct: Release a handful of mountain-sized beasts from the bowels of the planet, then let them stomp around murdering everything and everyone in their path. Monsters + destruction = planet saved.
The monsters, we come to understand, are actually ancient Titans who serve as “nature’s defense,” which sounds suspiciously like the name of an environmental non-profit. These Titans are tasked with preserving the planet’s integrity. In this case, that appears to mean wiping out much of human civilization. To make a planet-sized omelet, I suppose, you have to break a few billion eggs.
Like so many presidential campaign policy proposals, this preposterous idea is debated with a seriousness and solemnity it doesn’t merit. What about all the people who will die as a result? “The mass extinction has already begun,” explains one proponent of the release-the-monsters strategy, “and we are the cause.” In other words, think of all the people who will die if we don’t set loose the flying fire demon.
“You’re murdering the world!” cries one of the movie’s pro-human heroes, agog at the deadly havoc the monsters will wreak. Thus, the movie is staged not only as a series of monster-on-monster brawls, but as an ideological battle between the forces of “Actually, Mass Murder By Monster Is Objectively Good,” and “Are You Freaking Kidding Me?” In this way, and only this way, the film rather accurately captures the lopsided character of many real-world political debates.
King of the Monsters isn’t a very good movie. The script is filled with clunky dialogue. (“Serizawa got that lizard juiced up!” exclaims Bradley Whitford, in a line that makes exactly as much sense in context.) And like so many modern blockbusters, it’s larded with unconvincing computer-generated effects that would feel more at home in a video game. Finally, it’s disappointing, though understandable, that the film couldn’t be titled Remember the Titans.
But it does offer yet another data point supporting my friend Sonny Bunch’s contention that radical environmentalists make effective movie villains because they want to make life worse for humans, in this case by allowing a bunch of CGI lizards to destroy Boston, Washington, and a host of other cities around the globe. Municipal governance is often frustrating, it’s true, but the presence of a roving troop of skyscraper-sized murder lizards in major world cities, I am fairly certain, counts as worse.
The human culpability in the movie’s urban destruction, however, seems to suggest an answer to the larger question it raises: Are people worse? Or are the giant monsters? As President Obama might have said: That’s a false choice.
from Latest – Reason.com http://bit.ly/2MzTG43
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Experts are warning that the U.S. has become way too reliant on China for all our medicine, our pain killers, antibiotics, vitamins, aspirin and many cancer treatment medicine.
Fox Business reports that according to FDA estimates at least 80 percent of active ingredients found in all of America’s medicine come from abroad, primarily from China. And it’s not just the ingredients, China wants to become the world’s dominant generic drug maker. So far Chinese companies are making generic for everything from high blood pressure to chemotherapy drugs. 90 percent of America’s prescriptions are for generic drugs.
Rosemary Gibson says that this is all part of China’s plan.
“In five to ten years we are at risk of losing our generic drug industry, because China will use the same playbook and undercut our own producers and drive them out of business,” says Gibson who is author of “China Rx – Exposing the risks of America’s dependence on China for medicine.”
So what would happen if China wants to cut the supply for our medicine or alter its quality.
“Imagine if China turned off that spigot,” said Rosemary Gibson, author of “China RX: The Risks of America’s Dependence on China for Medicine.”
“China’s aim is to become the global pharmacy to the world — it says that. It wants to disrupt, to dominate, and displace American and other Western companies.”
Many medicine used on our troops and veterans can also be sourced to China, reports Fox Business.
This shouldn’t surprise anybody with even a glancing familiarity with the policy-making dynamics in the West Wing, but WSJ and CNBC are reporting that Robert Lighthizer and Steve Mnuchin opposed President Trump’s plan to slap new punitive tariffs on Mexico.
It’s yet another example of Trump overruling senior administration officials on policy issues.
The senior administration officials feared the tariffs could jeopardize USMCA, the ‘Nafta 2.0’ trade deal that the administration negotiated with Mexico and Canada. But in the end, Trump’s frustration with the border crisis won out.
According to WSJ, Trump’s frustration with the border situation led to the tariffs (though we could have told you that). Since Mexico responded when Trump threatened 25% tariffs and a possible border closure, he felt like giving it another try might produce a similar result.
In recent days the president lost his patience, according to one of the people who spoke about Mr. Lighthizer’s concerns and a senior administration official. He had listened to his advisers for months, who told him not to take action against President Andrés Manuel López Obrador’s new administration while it was forming its government, they said.
“He got tired of waiting for the new government to settle in,” one of the people familiar with the situation said.
“The last time he did tariffs on Mexico, Mexico responded, so he wanted to try again in the context of border security,” the senior administration official said.
There was a meeting with the president’s trade team on Wednesday and again on Thursday, when the president phoned in from Air Force One, according to one of the people.
“In both meetings, the president made very clear that he wants to do this,” one of the people said.
The motivation behind this latest ‘leak’ is pretty transparent: It looks like an effort by Lighthizer’s camp to salvage his ‘working relationship’ with Pelosi.
U.S. officials, including Mr. Lighthizer, have stressed to Congress the importance of enacting USMCA, meant to replace the North American Free Trade Agreement, in part to show other trading partners that high-pressure talks with Mr. Trump can lead to a win for all sides.
One of the officials noted that Mr. Lighthizer has a particularly good working relationship with House Speaker Nancy Pelosi, and behind closed doors, he has managed to leverage that relationship to make progress in advancing the USMCA through Congress. Some in the administration now fear that the president’s latest move may derail any progress Mr. Lighthizer has made, the people familiar with the situation said.
Goldman said in a note published Friday that it still expects USMCA to pass eventually – though not until after the 2020 election.
via ZeroHedge News http://bit.ly/2ELeVcq Tyler Durden
Elizabeth Warren’s appearance on popular New York radio show “The Breakfast Club” probably didn’t go as she expected, after the hosts slammed her for lying about being a Native American.
Adopting an accent we’ve never heard before, Warren retreated to her talking points, namely that she was told by “muh mama and muh daddy’ that she was a genuine Indian. She then tried to segue – pandering to the audience over what she plans to do for the black community.
Host ‘Charlamagne tha God’ didn’t let it go, however, asking if Warren’s fake Indian routine benefitted her at all, to which Warren replied: “Boston Globe did a full investigation. It never affected nothin’ about my family, it never affected any job I ever got.”(Fake Native American Adopts Fake Accent, News At 11)
“Kinda like the original Rachel Dolezal” shot back Charlamagne, referring to the former NAACP Chapter President for Spokane Washington, who instigated a public uproar when she was exposed for claiming to be African-American, even though she was born to two white parents.
Watch:
Oh wow. Discussing Elizabeth Warren’s past identification as Native American, @cthagod tells Warren, “You kind of sound like the original Rachel Dolezal” pic.twitter.com/NV5ybzJLVE
In a huge development out of eastern Syria, where US-backed Syrian Democratic Forces (SDF) share tense front lines with pro-Assad forces on the other side, the American coalition has reportedly attacked at least two Syrian government boats that were transporting oil across the Euphrates River to the government side.
The news broke via the Beirut-based Middle East News site Al-Masdar which is well-known for often being the first to report Syria news, given its rare sources in the Syrian military. According to the Al-Masdar report:
According to reports from the Deir Ezzor Governorate, the U.S. Coalition and the SDF both targeted the Syrian government boats with heavy machine gun fire in front of the town of Al-Shuhayl.
Pro-SDF accounts later released photos showing smoke rising from one of the ferries that were targeted by their machine gun fire.
Image via Al-Masdar News
Kurdish media and SDF accounts, along with a number of Middle East analysts also confirmed the incident, which is reportedly the second such attack on government oil supplies in under a month.
Washington has imposed a complete oil and fuel embargo on Syria, which Damascus’ close ally Iran has recently sought to circumvent.
US-led coalition blows up 3 oil tankers in eastern Syria & kills 4 as tankers carrying oil from PKK-besieged Deir ez-Zor to Syrian regime come under attack. US gets serious about stopping commerce among Syrians. https://t.co/3XWVAv6i8I
Turkish media also confirmed the attack, which according to early reports left four dead. According to the Turkish daily Yeni Safak:
In the early hours of Friday, the coalition forces raided on the area where an oil trade had been carried out between the PKK/YPG and the Syrian regime in the eastern outskirts of Deir ez-Zor with Hummer brand vehicles, according to the local sources who spoke anonymously due to fears of safety.
The coalition planes hit three of the tankers. The attack left four people dead and smoke was seen rising from the area.
The coalition is yet to issue a statement on the attack.
Though US-backed forces maintain control of eastern Syria’s largest oil and gas fields, such as al-Omar, the country’s largest oil field, located in the Deir Ezzor region, it’s long been suspected that Syrian Kurdish groups have cut secret deals with the Assad government to purchase and transfer supplies to the fuel-starved government side of the Euphrates.
Apparently this is what the US is attempting to disrupt amid a broader campaign to economically starve the Assad government and further prevent its army from operating effectively.
Regional reports have noted that in past weeks the fuel crisis in Syria which had created miles-long lines at gas pumps across major cities found some relief due to a covert Iranian shipment of oil that arrived in the port city of Baniyas in early May.
Meanwhile, the WSJ reported previously that Iranian oil had been routinely delivered to Syria throughout most of the war, but now “U.S. sanctions have cut off Iranian oil shipments to Syria, taking an unprecedented toll on a flow of crude that had persisted in the face of long-term international restrictions and helped sustain the Assad regime through years of civil war.”
Ironically, since ISIS took temporary hold over broad swathes of eastern Syrian territory starting in 2014 and 2015, leaders in Damascus and Moscow had accused both the United States and Turkey of looking the other way while ISIS financed its expansion through the sale of stolen Syrian oil.
And once US-supported Syrian Kurdish militias wrested control of those vital oil and gas fields in Syria’s Deir Ezzor province, it never gave them back to Damascus.
The White House still fundamentally prioritizes weakening Syria as crucial in its ultimate long-term goal of regime change in Tehran. This also as Russian and Syrian warplanes are ratcheting up strikes on al-Qaeda held Idlib, which has received US condemnation.
via ZeroHedge News http://bit.ly/2wwLkPy Tyler Durden
Good news: The Earth was 518.98 percent more abundant last year than it was in 1980.
So says the latest edition of the Simon Abundance Index, which tracks the relative availability of 50 fundamental commodities over time. The index, which was first unveiled last year by Marian Tupy of the Cato Institute and Gale Pooley of Brigham Young University–Hawaii, was inspired by economist Julian Simon’s famous win over population bomber Paul Ehrlich in a bet on whether the prices of a basket of non-renewable resources would rise or fall between 1980 and 1990. They fell by more than 50 percent, and in 1990 Ehrlich mailed Simon a check for $576.07.
In constructing the index, Tupy and Pooley first measure the “time price” of that basket of 50 commodities—that is, the amount of time that a person has to work in order to earn enough money to buy something. They calculate this by multiplying the World Bank’s average global GDP per person with the Conference Board’s estimate of annual hours worked. Tupy and Pooley find that from 1980 and 2018, the average time price of the basket of 50 basic commodities fell by 72.3 percent. In other words, the time it took to earn enough money to buy one unit in that basket of commodities in 1980 bought 3.62 units in 2018.
Tupy and Pooley then use the time price of the commodities and the change in global population to estimate overall resource abundance. In their words:
The Index represents the ratio of the change in population over the change in the time price, times 100. It has a base year of 1980 and a base value of 100. In 2018, the Index reached a level of 618.98. That is to say that the Earth was 518.98 percent more abundant in 2018 than it was in 1980. The compounded growth rate of abundance came to 3.44 percent per annum, which means that the affordability of our basket of commodities doubled every 20.49 years.
Back in 1981, Simon argued compellingly that human minds are the ultimate resource. “There is no physical or economic reason,” he wrote, “why human resourcefulness and enterprise cannot forever continue to respond to impending shortages and existing problems with new expedients that, after an adjustment period, leave us better off than before the problem arose.”
Tupy and Pooley confirm Simon’s insight by noting that between 1980 and 2018, the world’s population increased by 71.2 percent. The time price of commodities fell by 72.3 percent. Consequently, the time price of commodities declined by 1.016 percent for every 1 percent increase in the world’s population. In other words, over the last 38 years, every additional human being born on our planet appears to have made resources proportionately more plentiful for the rest of us.
Disclosure: Marian Tupy and I are co-authors of the forthcoming book Ten Global Trends Every Smart Person Should Know.
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