Author: admin

The View From Under The Bus

Submitted by Adam Taggart via PeakProsperity.com,

As the dust settles from the recent presidential election, it's becoming clear that a large part of the sentiment behind the vote for Trump reflects a deep dissatisfaction from middle and lower-class working families. The traditional fruits of prosperity have been rising higher and farther out of reach for them, as their ability to make a living wage has been eroding year-over-year, for decades.

They've now reached the point where they no longer trust the empty promises that have been sold them by a steady stream of politicians — on both side of the aisle — who have lined their own pockets with lobbyist money while overseeing a tremendous shift of society's wealth to crony corporations and the top 1%. Trump's victory can largely be summed up as a defiant yelp from the masses decrying: "I may not know what the solution is, but I'm damn sure more of the same ain't it!"

Of course, we here at PeakProsperity.com are in full agreement with that righteous anger. Through borrowing way too much, bailing out rather than prosecuting bad actors, printing trillions of "thin air" dollars, a deliberate pursuit of financial repression and other schemes — the future prosperity of the "everyday American" has been stolen by those in power and those positioned closest to the trough. Mathematically, this orgy of excess needs to be balanced by severe austerity; an austerity the elites refuse to suffer but are forcing onto everybody else. No wonder the masses are pissed.

Few visuals drive this injustice home better than this one of historical bank CD interest rates. Note how they've been in steady collapse since the mid-1980s:

Back in 1984, savers received around 10% on funds parked in a bank CD. Even the shorter duration 6-month CDs yielded over 9%.

Contrast that to today's rates of practically 0%. A 6-month CDyields 0.16% and a 1-year yields 0.27%. If you're willing to lock up your money for 5 years, you'll enjoy a paltry return of just 0.86% annually throughout the next half-decade.

Back in the mid-80s, if you managed to retire with $500,000 in the bank, you could live quite comfortably on the nearly risk-free income from bank CDs. The $50,000 in annual income you'd receive was over twice the median household income then of $21,000.

Let's say you're lucky enough save up a full $1 million in your bank account today. If you put it all into a 5-year CD, you'll receive only $8,600 per year; less than 20% of today's median household income of $53,000.

The punchline: if you're a saver, if you've worked hard to amass financial wealth to retire on, you've gotten screwed.

And not only has your savings income drastically plummeted over the past few decades, but cost of living expenses over that same time period have skyrocketed — especially for the essentials like food, medical care, education and housing:

For the increasing few who can still manage to put excess dollars away after expenses, the paltry savings rates offered by safer investments like CDs force them to chase yield in order to get a return (any kind of return!) on their money. And, of course, this reach for yield moves savers further out on the risk curve, into the bubblicious asset classes (notably stocks, bonds and real estate) that the Fed's 0% interest rate policies have blown to nosebleed prices.

The likeliest scenario from here, of course, is a recurrence of the types of losses (or worse) as seen during 2008, when these asset price bubbles can no longer be sustained. And savers will see their capital stored in these assets vaporize.

In short: the people who can very least sustain these losses will be the ones most ravaged by them. 

In past articles such as Sorry Losers!, Our Tone Deaf Elites Risk The Ruin Of Us All, and The Fed Is Destroying The World One Saver At A Time, we've provided the details behind the "how" our elected leaders, the special interests that control them, and the central banking cartel have collectively conspired to throw the everyday American under the bus. 

And as the above charts show, the view down here is pretty damn lousy.

So, what's a prudent person to do?

Well, for starters, resist the urge to blindly follow the herd cheering today's record highs. Capitulating and jumping into risk assets at the end of a bubble market is simply signing up to be the greatest fool who's left holding the bag when prices correct.

For perspective on where to consider placing your money, review the chapter on Financial Capital from our recent book Prosper!: How To Prepare for the Future and How to Create a World Worth Inheriting (we're including it here below, free of charge):

And just as important: remember that money is just one of the 8 Forms of Capital required to build a resilient life. Be sure to invest as much time and attention to the remaining seven forms. They're just as important to your future prosperity and happiness, and are much less susceptible to manipulation by the ruling elites.

via http://ift.tt/2f3Njo5 Tyler Durden

‘Fake News’ Is Easier to Trace and Debunk Than Ever Before

As pundits search for a scapegoat they can blame for Donald Trump’s victory, one increasingly popular target is “fake news.” Most of the discussion then proceeds as though groundless stories transmitted from friend to friend is something invented in the Facebook era. You’re lucky if people remember the dubious email forwards of a decade ago, let alone the orally transmitted tales of earlier generations.

But when I hear the phrase fake news, I think of the Eleanor Clubs. Don’t feel bad if you’ve never heard of those: It’s been seven decades since anyone was abuzz about them, and even then they were as fictional as the pope’s endorsement of Donald Trump or that photo of a bare-chested, gay Mike Pence. But in the early 1940s, quite a few people believed in them. They were even investigated by the FBI.

The clubs—named for First Lady Eleanor Roosevelt, a prominent supporter of civil rights—were supposedly a subversive network of black servants working to overturn the racial caste system, so that one day whites would work for blacks instead of the other way around. Howard Odum, a sociologist at the University of North Carolina, collected versions of this story from across the South (and sometimes from other parts of the country too) in his 1943 book Race and Rumors of Race. The details varied, but the core idea, in the words of one of his informants, was this: “I hear the cooks have organized Eleanor Clubs and their motto is: A white woman in every kitchen by Christmas.” Mrs. Roosevelt was supposed to be the clubs’ secret chief.

Did the Eleanor Club story injure Eleanor’s husband at the polls? No: He kept carrying the South, as the Democrat usually did in those days. But then again, no one—as far as I know—tried to weaponize this particular tale against him. Other rumors, by contrast, were deliberately engineered to hurt particular public figures. The latter were known as whispering campaigns, and they have been deployed in political fights for eons.

In 1928, Irving Stone writes in They Also Ran, a host of rumors dogged the Democrats’ Catholic nominee, Al Smith: “he was building a tunnel which would connect with the Vatican; the Pope would set up his office in the White House; the Catholics would rule the country, and no one could hold office who was not a Catholic; Protestant children would be forced into Catholic schools; priests would flood the states and be in supreme command; Smith would set himself up at the head of a Catholic party which would supersede the old Democratic party!” (These were transmitted not just orally but through the fake-news organs of the day: “A flood of letters, pamphlets and anonymous newspapers swept across the South, rehashing the worst libels against the Catholic church that had been circulated in the United States during the period of 1840–60. One Democratic chairman of North Carolina reported that the anti-Catholic literature that poured into the state must have cost at least half a million dollars.”) Smith didn’t just lose the election; he managed to lose several Southern states. Did the rumor-mongering swing many votes? Quite possibly.

The point isn’t that this is the same as the fakery the flows through Facebook. We live in an entirely different media environment, with possibilities that hardly anyone could imagine in the ’20s or ’40s. If you told Al Smith that one day there would be Macedonian content farms targeting Trump fans because that’s what brings more clicks, he would say, “No offense, my fellow American, but I don’t know what the hell that means.” 2016 is not 1928, and I’m all for careful efforts to see how this era’s rumors differ from their many, many precursors.

But that requires you to acknowledge that the precursors even exist. It also requires you to think about the ways the internet has empowered not just liars but debunkers.

Consider this image, highlighted and marked up in one anti-fake-news jeremiad that’s been floating around:

No, that isn’t fake news. It’s a true story from a mainstream newspaper, and the fellow sharing it—Mike Caulfield—is the same guy who wrote the jeremiad. His point involves the format, not the content: that “what is highlighted on the cards that Facebook is not the source of the article, which is so small and gray as to be effectively invisible, but the friendly smiling face of someone you trust.” Fake news is easier to believe, he suggests, if it is framed that way rather than as simply another headline.

That may be true. But instead of comparing a Facebook post to a traditional headline, let us compare it to those Eleanor Club yarns. Those too were shared by the friendly faces of trusted acquaintances. But they did not include any citation at the bottom, let alone the ability to click through and read more. They were also less likely to appear side by side with someone making the exact opposite claim. (For all the talk of filter bubbles today, what sort of bubble do you suppose the people spreading the Eleanor Club story lived in?) This may be the first time in human history when rumors frequently come with footnotes. They are undeniably resilient, but they are far easier to trace, track, and debunk now than they were when Franklin Roosevelt or Al Smith was running for president.

The bad news is that Facebook is filled with bullshit. The good news is that we now have amped-up, networked bullshit detectors. No discussion of “fake news” will get anywhere unless it takes both of those facts into account.

Bonus link: Needless to say, there’s a lot of fakery in the “real” news too, starting with rougly 96 percent of all TV reports that contain the phrase “dangerous teen trend.” For a rundown of mainstream-media hoaxes and flubs over the years, check out this column from Jack Shafer.

from Hit & Run http://ift.tt/2fCr9pt
via IFTTT

And The Rich Get Poorer? Swiss Watch Exports Collapse At Fastest Pace Since Lehman

For the 16th month in a row (longer than the 14 month stretch during the financial crisis), Swiss Watch exports have collapsed year-over-year. As Bloomberg reports, the 16.4% plunge in October is the biggest monthly drop in seven years, as demand weakened in almost every major market for Rolex and Omega timepieces.

Bloomberg adds that shipments fell to 1.68 billion francs ($1.7 billion), the Federation of the Swiss Watch Industry said in a statement Tuesday, with 13 of the top 15 markets were negative in October.

 

The decline was much greater than expected and was made worse because October was the weakest month of last year, according to Zuzanna Pusz, an analyst at Berenberg.

The longest slump in more than two decades is threatening employment in the Swiss watch industry, which had been riding a boom as rich Chinese bought more timepieces.

It does seem however that the rich still appreciate one thing…

As we concluded previously, the rich appear to be cinching up the purse strings, and as we concluded previously, that is not a good sign…

So the rich are becoming less rich? To an extent, yes. Recent declines in commodity prices and emerging market debt have no doubt taken a bite out of some big portfolios. Meanwhile hedge funds, the preferred investment management vehicle of the uber-wealthy, have done badly for the past couple of years, with some high-profile implosions generating headlines.

 

These disappointments have lowered the net worth of some big players and made others more cautious. Hence the lessened demand for the most pretentious assets.

 

The impact on the global economy? Almost certainly bad, since the 1% are the marginal buyers of so many reference assets like blue-chip stocks and government bonds. To the extent that they grow cautious, the bid for a lot of things will be lower, cutting corporate profits, equity valuations and high-end asset prices.

Put another way, when the only healthy part of an already-impaired system turns negative, everyone will feel the resulting pain.

via http://ift.tt/2ghp4AJ Tyler Durden

New York Times Admits “Searing” Complaints About Coverage Hit 15 Year High

Amid the chaos surrounding Trump Tower and The New York Times, the so-called "failing" publication's readers are complaining at a rate on par with what was seen after 9/11 with an angry message: "I expect more from The Times."

As DailyCaller.com's Katie Frates reports, Times readers are writing and calling the Times and commenting on articles in droves to express, according to Spayd, “a searing level of dissatisfaction” with the 165-year-old paper’s coverage of the 2016 presidential election.

Complaints to the public editor are at five times the normal level; customer care is also seeing an uptick in calls.

 

“I expect more from The Times.”

 

That’s what reader Judy Barlas told NYTimes editor Liz Spayd for her article, “One Thing Voters Agree On: Better Campaign Coverage Was Needed.” Barlas supported Sen. Bernie Sanders, and felt like the Times pushed a narrative that then-competitor Hillary Clinton was always going to win the Democratic nomination.

 

A decidedly liberal lean, the narrative that Clinton was sure to win (both in the primary and general election), and a lack of fair coverage of President-elect Donald Trump supporters have liberals, moderates and conservatives upset.

 

A few instances of lackluster coverage include the Times failing to cover sexual assault allegations against former President Bill Clinton like it did allegations against Trump; a columnist joking about an assassination attempt against Trump; reporter John Harwood being outed as very cozy with Clinton’s campaign; the paper giving little coverage to thousands of Clinton campaign manager John Podesta’s emails released by WikiLeaks; and the Times actually editing a story about Clinton at her request.

To top it off, even liberal readers felt the Times mischaracterized Trump supporters as racist bigots.

They wanted “a news source that fairly covers people across the spectrum,” Spayd wrote, and they weren’t getting it.

 

Readers are calling for fresh blood, “I’m tired of the old guard,” one said.

 

Cindy Capwell, a Trump supporter disenfranchised by the Times’ characterization of his base as racist, anti-Muslim and homophobic, told Spayd, “I hope you guys will give people like us a chance too. It’s time to lay down our arms.”

As The Hill reports, readers complained that “The Upshot” column forecasting the race was hopelessly wrong; it had said Clinton had an 80 percent or better chance of winning the election. Letters and comments to the public editor also registered unhappiness with the coverage of Trump supporters, arguing they were stereotyped and misunderstood. And the public editor said many complained that the Times is not even aware of the “liberal tint” it applies to its coverage. 

Spayd highlights one letter to the paper in particular that claims the paper is responsible for Trump supporters being painted as “homophobic, racist or anti-Muslim.”

 

“There is a group of 10 friends in Charlotte, N.C., all women, all in their 50s, all white. They’re college educated with successful careers, and they have a message for The New York Times: Come visit us,” Spayd writes.

 

“They voted for Donald Trump and don’t consider themselves homophobic, racist or anti-Muslim. But now, they say, thanks to The Times and its fixation on Trump’s most extreme supporters, most people think they are,” wrote Spayd, who took over as public editor in July.

Ironically, The Times reported last week that it added 41,000 print and digital subscriptions since Trump's victory on Nov. 8. It marks the most subscribers the paper has added in one week since digital subscriptions began being offered in 2011.

But, oh to be a fly on the wall in Trump Tower today.

via http://ift.tt/2gyJvfb Tyler Durden

The Simple Analytics of Why President-Elect Trump’s Policies Will Probably Result in a Trade War with China

Authored by Steve H. Hanke of The Johns Hopkins University. Follow him on Twitter @Steve_Hanke.

The United States has recorded a trade deficit in each year since 1975. This is not surprising. After all, we spend more than we save, and this deficit is financed via a virtually unlimited U.S. line of credit with the rest of the world. In short, foreigners in countries that save more than they spend (read: record trade surpluses) ship the U.S. funds to finance America’s insatiable spending appetites.

Japan and more recently China have been the primary creditors for the savings-deficient U.S. And since their exports are largely manufactured goods, the real counterpart of their buildup of dollar claims on Americans is for them to run export surpluses in manufactured goods with the U.S. The accompanying chart shows the contribution of Japan and China to the U.S. trade deficit since the late 70s.

Percentage Contribution to U.S. Trade Deficit by Country

So, the U.S. savings deficiency has contributed to the hollowing out of American manufacturing. But, you wouldn’t know it by listening to President-elect Trump. He never mentions America’s savings deficiency. Instead, he claims that American manufacturing has been eaten alive by foreigners who use unfair trade practices and manipulate their currencies to artificially weak levels. This is nonsense.

To get a handle on why the President-elect Trump – and many others in Washington, including the newly-elected Senate Minority Leader Charles Schumer – are so misguided and dangerous, let’s take a look at Japan. From the early 1970s until 1995, Japan was America’s economic enemy. The mercantilists in Washington asserted that unfair Japanese trading practices caused the trade deficit and destroyed U.S. manufacturing. Washington also asserted that, if the yen appreciated against the dollar, America’s problems would be solved.

Washington even tried to convince Tokyo that an ever-appreciating yen would be good for Japan. Unfortunately, the Japanese caved into U.S. pressure, and the yen appreciated, moving from 360 to the greenback in 1971 to 80 in 1995. This massive yen appreciation didn’t put a dent in Japan’s exports to the U.S., with Japan contributing more than any other country to the U.S. trade deficit until 2000 (see the accompanying chart).

In April 1995, Secretary of the Treasury Robert Rubin belatedly realized that the yen’s great appreciation was causing the Japanese economy to sink into a deflationary quagmire. In consequence, the U.S. stopped bashing the Japanese government about the value of the yen, and Secretary Rubin began to evoke his now-famous strong-dollar mantra. But while this policy switch was welcomed, it was too late. Even today, Japan continues to suffer from the mess created by the yen’s appreciation.

Now, China is America’s economic enemy, and China bashing is in vogue. Indeed, hardly a day goes by without President-elect Trump railing against China, accusing it of unfair trade practices and currency manipulation. He is also threatening to impose huge tariffs on the Middle Kingdom.

At the same time, President-elect Trump is promising a set of spending and taxing policies that will cause the gap between our spending and savings to widen. This will balloon our trade deficit. And with that, Mr. Trump will, no doubt, point an accusatory finger and start a trade war with China, a country that currently contributes 48% to the U.S. trade deficit. So, the President-elect’s promised lax fiscal policies might just get us into a trade war with one of the most important countries in the world.

via http://ift.tt/2gyISCi Steve H. Hanke

Washington Task Force Suggests Making it Easier to Prosecute Killer Cops

Police officerPressure is building on Washington legislators to reform the state’s laws governing the use of deadly force by police officers.

On Monday the Joint Legislative Taskforce on the Use of Deadly Force in Community Policing—which contains representatives from minority activists as well as policing associations—narrowly approved a recommendation to remove language that shields police officers from prosecution in shooting incidents where the cops are believed to have acted “without malice and on a good faith belief.”

Washington’s requirement that an officer’s actions be shown as “malicious” is one of the most favorable in the nation to law enforcement personnel involved in deadly shootings, and has been widely condemned by both prosecutors and civil rights activists since its incorporation into law in 1986.

King County prosecutor Dan Satterburg—known to Reason readers as the man behind the so-called “biggest sex trafficking case of the year”—has said the need to prove malice is “an almost perfect defense.” Seattle attorney and director of the American Civil Liberty Union’s Center for Justice dubbed it a “virtual license to kill.”

The numbers seem to agree with that position. In an investigative report, The Seattle Times found that, of the 213 fatal police encounters since 2004, only one has resulted in the prosecution of an officer for homicide. That case—stemming from the 2009 shooting of an allegedly drunk motorist in the back—ended in the officer’s acquittal after the jury failed to find malice in the officer’s actions.

A similar result came from the 2010 shooting of homeless man John T. Williams by Seattle police officer Ian Birk—a shooting Reason dubbed one of the worst police abuse cases of the year. Though the shooting was found by the Seattle Police Department to be unjustified—and Birk later resigned as a result—no charges were filed. Satterburg, the prosecutor assigned to the case, did not believe he could prove malice beyond a reasonable doubt.

To remedy this lack of accountability, the task force has proposed removing the malice language, and replacing it with a less exacting standard for prosecutors.

The change is opposed by law enforcement representatives, who voted against that recommendation, and suggested increasing funding for community outreach programs as an alternative.

Despite their opposition, the recommendation was able to pass out of the task force and will now head to Gov. Jay Inslee and the state legislature for consideration.

State Sen. David Frockt (D–Seattle), who sits on the Joint Legislative Taskforce, told The Seattle Times that he plans to draft a bill incorporating the recommendations, but that there’s still a long a way to go in developing a consensus among state legislators for the proposed changes.

from Hit & Run http://ift.tt/2geyhvB
via IFTTT

What Happens Next?

As we noted previously, each time the bond market has crashed in the last few decades, a financial crisis has quickly followed.

 

However, perhaps more perscient in the current exuberant 'buy the f**king all time highs' regime in US stocks, is the decoupling we have seen with global stocks.

 

Since the taper-tantrum in 2013, we have seen four 'meltdowns' in global bonds… and guess what happened next?

 

But it's probably different this time, right?

via http://ift.tt/2fmcJc8 Tyler Durden

Very “Special” 5 Year Auction Tails Despite Massive Short Overhang

The most notable thing about today’s Treasury auction of $34 billion in 5 Year paper is not what happened after the 1pm announcement of its pricing, but what has been taking placed in the last few days, where as the following charts from SMRA, there has been a major surge in shorts, who have in turn sent the underlying paper “super special” in repo, to the tune of -2.50% as of this morning.

Needless to say, the market was positioned extremely bearishly ahead of today’s auction, just like prior to yesterday’s 2 Year auction, where only a last minute squeeze made the issue price better than expected.

So what happened today? Well, even with the potential squeeze, today’s 5 Year auction still tailed modestly, pricing at a 1.76% high yield, a 0.3bps tail to the 1.757 When Issued. The Bid to Cover of 2.44, was right on top of the 6 month average of 2.43. The internals were likewise unremarkable, with the Indirects taking down 59.8% of the auction, Directs barely showing any interest at 4.5%, as has been the cases since June, and leaving 35.7% to Dealers, fractionally higher than the 6 month average.

For now – and ever since the Trump victory – the shorts have the US rates complex firmly in their clutches. The question is what will be the catalyst that breaks their hold on US paper.

via http://ift.tt/2fmgduV Tyler Durden

The NYT Is Live Tweeting Its Meeting With Trump

“Off the record”?

The New York Times is live-tweeting its meeting with President-Elect Donald Trump…

via http://ift.tt/2f3qDEF Tyler Durden

The Political Triumph Of The Empty Gesture

Submitted by Charles Hugh-Smith via OfTwoMinds blog,

Public displays of empty gestures are no substitute for action.

Politics is the art of the symbolic gesture. The successful symbolic gesture gains gravitas by crystallizing a narrative that attracts a consensus that then powers policies of substance.

The politics-as-usual gesture is empty of substance, serving only to mask collusion and failure. Soaring Rhetoric(tm) is carefully engineered to mimic successful symbolic gestures of the past, but the purpose isn't to power positive policies: the goal is to distract the audience by making them feel that participating in empty gestures is a substitute for real-world actions of substance.

The net result is we now inhabit a culture that relies on empty gestures and feel-good appeals to past glories. This reliance on empty gestures and appeals to past glories typifies regimes in decline.

Historian Michael Grant described this decay of purpose and substance in his short book The Fall of the Roman Empire, a work I've been recommending since 2009:

There was no room at all, in these ways of thinking, for the novel, apocalyptic situation which had now arisen, a situation which needed solutions as radical as itself. (The Status Quo) attitude is a complacent acceptance of things as they are, without a single new idea.

This acceptance was accompanied by greatly excessive optimism about the present and future. Even when the end was only sixty years away, and the Empire was already crumbling fast, Rutilius continued to address the spirit of Rome with the same supreme assurance.

This blind adherence to the ideas of the past ranks high among the principal causes of the downfall of Rome. If you were sufficiently lulled by these traditional fictions, there was no call to take any practical first-aid measures at all.

This decay of purpose and substance in favor of empty gestures intended to symbolize progressive values has infected the entire culture. Rather than do something substantial and risky to change our neofeudal mode of production, people change their photo on Facebook in a public display that serves to satisfy their desire to "do something" but which avoids any actual cost or risk.

As a result of this reliance on empty gestures, we've become a culture that buys filtered tap water in plastic bottles that end up fouling our waterways, feeding the Great Pacific Trash Gyre, trashing the planet to "show the world" that we "care about our health" by buying Corporate America's filtered tap water.

The list of comically delusional empty gestures is essentially endless: the ecology bumper sticker on the fuel-wasting SUV; the public purchases of "healthy" supplements that cannot possibly offset a diet of junk food; signing an online petition that is really just an email-collection tool for spammers; wearing an American flag lapel pin as a public display of content-free patriotism, and a retch-provoking abundance of similar displays of "progressive" or religious self-righteousness.

Public displays of empty gestures are no substitute for action. You want a more progressive economy and culture? Turn off the mainstream media, start working on ways to extricate yourself from the state/cartel matrix, get out of debt, stop taking on more debt, start growing your own food (if you have no yard, in a community garden), use less of everything, starting with energy in all its forms, focus on DeGrowth, build your own networks of transparency, shared practical knowledge and reciprocity, start using decentralized crypto-currencies–and most importantly, just do the work, don't make empty gestures as a substitute for action that requires time, effort, money and risk.

Every minute wasted on self-righteous empty gestures or viewing someone else's self-referential, self-aggrandizing empty gesture is a minute you could have been doing something useful.

Please ponder three aphorisms of action:

Do the thing and you shall have the power. (Ralph Waldo Emerson)

We are what we repeatedly do. (Aristotle)

He who will not risk cannot win. (John Paul Jones)

via http://ift.tt/2gcZkUH Tyler Durden