Category: zerohedge

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

Ironically perhaps, the ideas that are scarce are those that disrupt "business as usual" by automating what has not yet been automated.

Let's consider a syllogism: Knowledge is power, power equals wealth, so knowledge equals wealth.

Is this true? Author George Gilder thinks so. His book Knowledge and Power: The Information Theory of Capitalism and How it is Revolutionizing our World, proposes that (in Bill Bonner's apt phrase) "the economy is fundamentally a learning system, not a way for distributing wealth."

In Gilder's view, new information (i.e. knowledge) enables us to do things better, i.e. increase productivity. New knowledge is what creates value.

New knowledge is always surprising, and it naturally disrupts "business as usual." So those earning money from business as usual must suppress the disruption arising from new knowledge to maintain their incomes/profits.

Bonner summarizes the conflict between vested interests (cronies and zombies) and those with new knowledge in this lively fashion:

"In an economy, the person who is the source of most important new information is the entrepreneur. He is the fellow who takes risks and builds a new business.

 

The cronies want to stop him, before he undermines the value of their old assets and old business models with new information. The zombies want to drag him down, leeching on him so greedily that he runs out of energy."

Gilder views vested interests limiting new knowledge as the real threat to the economy. This is the danger of "regulatory capture," when vested interests bribe the state (government) to erect barriers to competition to maintain monopolies and rentier privileges.

But what's missing from this view of the economy as a learning system is that value flows to what's scarce, and information is abundant.

In other words, only very specific kinds of knowledge are scarce–the kind that create new goods, services and business models.

These new models are precisely what destroys not just "bad" cronyism but "good" jobs. What's scarce is ideas that automate existing processes.

As Michael Spence and co-authors Andrew McAfee and Erik Brynjolfsson observed in their 2014 essay, Labor, Capital, and Ideas in the Power Law Economy, neither capital nor labor have scarcity value in the age of automation and nearly-free credit.“Fortune will instead favor a third group: those who can innovate and create new products, services, and business models.”

Value in the knowledge economy is not distributed equally. The return on abundant human labor and capital are very low, while the scarcity of skills and knowledge that create new products, services, and business models drives most of the gains to the creative class: “The distribution of income for this creative class typically takes the form of a power law, with a small number of winners capturing most of the rewards. In the future, ideas will be the real scarce inputs in the world — scarcer than both labor and capital — and the few who provide good ideas will reap huge rewards.”

Learning–the acquisition of skills and knowledge–is difficult and costly. Developing new ideas and applying them in the real world is an uncertain process and therefore risky.

From this perspective, rewards flow not just to what’s scarce but to what is inherently risky. Since most ideas fail to reach fruition, new ideas that succeed in boosting productivity are intrinsically scarce.

In other words, there is no risk-free way to identify and exploit scarcity in a knowledge economy in which vast troves of information and knowledge are free and have no scarcity value.

The wild card here is knowledge is increasingly unownable and therefore it cannot be kept scarce for private gain.

It seems that while knowledge may be powerful in terms of empowering the learner to improve their own lives, knowledge can only generate wealth if it is scarce and ownable.

Ironically perhaps, the ideas that are scarce are those that disrupt "business as usual" by automating what has not yet been automated.

via Zero Hedge http://ift.tt/1Q7TGDz Tyler Durden

The Swedes are aggravated with Mid-East migrants.

With the highest per capita rate of sheltered asylum seekers in Europe, Sweden has become something of a poster child for migrant mischief.

In the wake of the sexual assaults that swept the bloc on New Year’s Eve, the world is suddenly focused on Sweden, where some say police conspired to cover up a series of attacks that allegedly occurred in central Stockholm’s Kungsträdgården last August and where a 22-year-old aid worker was recently stabbed to death by a Somali migrant.

The backlash in the country is palpable and recently manifested itself in a move by the “football hooligan” crowd to stage an assault on Stockholm’s main train station where dozens of Moroccan migrant children are apparently camped out.

On Tuesday, in the latest sign that Swedes are becoming increasingly fed up with their government’s policy on refugees, more than a dozen people were arrested for planning an attack on an asylum center. Apparently, the men were plotting to use “axes, knives, and iron pipes” against a refugee shelter in Nynashamn, which is located some 60 kilometres (37 miles) south of Stockholm.

“Swedish police said Tuesday they had arrested 14 men for allegedly planning to attack an asylum centre after finding axes, knives and iron pipes in their cars,” France 24 reported. 

“We believe that the migrant centre was the target of the attack,” a police spokesman Hesam Akbari told AFP. Here’s more from The Local: 

Officers rounded up 14 people on Monday night in cars close to the asylum accommodation that is thought to have been the intended target of the plot.

Batons, knives, iron bars and axes were found in the suspects’ vehicles.

 

Hesam Akbari, a spokesperson for Stockholm police, told the TT news agency that members of the group were facing a number of charges.

 

“The (police) report now concerns three offences. Preparation for aggravated assault, incitement to aggravated assault and incitement to aggravated arson,” he said.

 

The editor of Swedish anti-racism magazine Expo, Mikael Färnbo, told TT that they have previously observed close links between far-right communities in Sweden and Eastern Europe.

 

“In general terms alone we can say that we know that there are connections,” he said.

Who knows what these 14 men were planning on doing, but the fact that they apparently had “axes, knives, and iron pipes” stashed in their vehicles certainly seems to suggest that something nefarious was likely in the cards. 

Swedish Radio said the men may have been members of “right-wing groups.”

You’re reminded that the far-right has witnessed something of a resurgence over the past nine or so months in Europe as citizens become increasingly leery of Mid-East refugees. PEGIDA staged bloc-wide protests on Saturday and in Finland, the “Soldiers of Odin” are proof positive that nationalism is alive and well. In Bavaria, a carnival float made to resemble a Nazi tank read: “Asylum defense.”

We’ve long said that it’s just a matter of time before the bevy of bad migrant news sparks an outright rebellion among Europeans who are increasingly fed up with the effort to integrate millions of asylum seekers fleeing the violence that besets the Mid-East. 

It’s not that Western Europe isn’t compassionate. The bloc’s citizens have simply determined that between the Paris attacks, the New Year’s Eve sexual assaults, and the murder of Alexandra Mezher, enough is enough with the whole multicultural utopia ideal.

As the whole “football hooligan” incident underscores, it’s only a matter of time before a violent attack on refugees occurs, if not in Sweden, then in Germany, or in Austria where officials are literally prepared to pay migrants €500 to go back to where they came from because nothing says “scapegoating xenophobia” like a trunk full of “axes, knives, and iron pipes.”

Oh, and the punchline to the whole thing: all 14 suspects were carrying foreign ID papers.

via Zero Hedge http://ift.tt/1LfoBq4 Tyler Durden

By EconMatters

We look at Platinum and Palladium metals from the technical side in this video. These often neglected metals are pretty unique and special in their own right, and can offer some great trading setups.

via Zero Hedge http://ift.tt/20JCMA4 EconMatters

You know it's serious when the denials begin. Speaking in a Bloomberg TV interview, Goldman Sachs President Gary Cohn explained how "US banks took their medicine early," adding that "some European banks have been slow getting recapitalized." Having thrown his 'competitors' across the ocean under the bus, Cohn then unleashed his comments with regard Goldman's own spiking credit risk – demanding that "no one should question the viability of US banks."
 

• *COHN: U.S. BANKS ‘TOOK OUR MEDICINE EARLY’
• *COHN: U.S. BANKS DELEVERAGED AND HAVE ENORMOUS EXCESS LIQUIDITY
• *COHN: SOME EUROPEAN BANKS HAVE BEEN SLOW GETTING RECAPITALIZED
• *COHN: NO ONE SHOULD QUESTION THE VIABILITY OF U.S. BANKS

Goldman risk is soaring…

We wonder how long before any discussion of stress in the banking system will be deemed "hate speech" and be deleted from the propaganda stream?

via Zero Hedge http://ift.tt/1T5hHKk Tyler Durden

Following this morning's proclamation by Deutsche Bank co-CEO John Cryan that Germany's largest bank is "rock solid," David Stockman exposed the ugly truth that everyone appears to have forgotten from just 7 years ago…

"in my experience is that when the crunch comes, bank CEOs lie"

Stockman details the Morgan Stanley, BofA, Lehman, and Bear Stearns bullshit that occurred before exclaiming…

"I don't trust Deutsche Bank. I don't trust what they're saying. And there's reason why the banks are being sold all across the world… because people are realizing once again that we don't know what's there [on bank balance sheets]."

Worth considering before tomorrow's European open…

 

via Zero Hedge http://ift.tt/20JyGb9 Tyler Durden

Submitted by Antonius Aquinas via Acting-Man.com,

Why Should a Decline in Oil Prices be Bad?

The dramatic fall in the global price of oil is being cited by the financial press, government officials, and academia as the catalyst for the recent abysmal U.S. economic data which shows that the economy is, in all likelihood, sliding into a recession or worse.

 

Oil prices in dire straits…

While falling oil prices sound like a plausible explanation for the abysmal financial numbers, anyone with a modicum of economic sense (which excludes much of the financial Establishment) can see that it is merely a smokescreen to obfuscate the real culprit.

The fall in oil prices, while detrimental to many oil producers, should actually be a boon for the rest of the economy, especially those industries that are heavily reliant on energy. Lower fuel prices mean lower production costs leading to, ceteris paribus, greater output.

 

The price of gasoline has declined precipitously – click to enlarge.

 

For consumers, lower oil prices mean lower utility bills and cheaper gasoline, both of which mean more disposable income for either savings or more consumption. Why would greater disposable income lead to a recession?

Naturally, lower prices are not good for oil producers. But a decline in one sector of the economy (albeit an important one), does not lead to a general collapse. While the energy sector may be contracting, industries that use fuel should be able to expand as their production costs fall.

 

What constitutes great news in oil exploration nowadays

 

The Pseudo-Prosperity of the Printing Press

The Federal Reserve’s Quantitive Easing (QE), Zero Interest Rate Policy (ZIRP), Operation Twist (OT), and their variations have created a massive bubble in asset prices which is now beginning to burst. All of these polices have been undertaken to save the banking system from collapse after the crisis of 2008. Since the start of the Great Recession, none of the problems that have led to it have been addressed.

Not only has the stock market been artificially inflated by the Federal Reserve, but it has come at a devastating cost in the decimation of savers, as the return on their money has dropped to next to nothing. This, of course, has had debilitating consequences on retirees and seniors.

 

Broad US money supply TMS-2 and the Federal Funds rate – click to enlarge.

 

The Obama Administration, with little opposition from Republicans, has increased the federal deficit to nearly $20 trillion from the $9 trillion it had inherited with little or no hope of any reduction. Its wasteful stimulus program of a few years ago has done nothing to improve conditions while its collectivist health care initiative has placed crushing burdens across the economic spectrum.

What is even scarier is that Obama is apparently clueless about current economic conditions, as he mindlessly demonstrated in his (thankfully) last State of the Union Address:

“Anyone claiming that America’s economy is in decline is peddling fiction. What is true – and the reason that a lot of Americans feel anxious – is that the economy has been changing in profound ways, changes that started long before the Great Recession hit and hasn’t let up.”

Obama is correct in one sense: there is a “profound change” that is happening in the economy, however, it is a change for the worse which he and his harmful policies have created.

 

Federal debt since the 1990s – Obama took office in January 2009 – click to enlarge.

 

Not surprisingly, in their rebuttal to the speech, the Republicans offered little in substance. Instead, they chose a spokesperson whose only claim to fame was her infamous decision as governess of South Carolina to remove the Confederate flag from state buildings. Needless to say, the choice of Nikki Haley met with disgust among the party’s base. The GOP is not called the “stupid party” for nothing!

Unfortunately, for the vast majority of Americans, there is little likelihood that the present Administration or the next, be it of a different party, will turn things around. Instead, there will probably be more of the same.

Until there is a change in ideology where the corrupt notions of money and credit creation via the printing press and the running of gargantuan deficits are debunked, American living standards will never improve.

via Zero Hedge http://ift.tt/1nWq3Z4 Tyler Durden

Yesterday, when looking at the exposure of the Canadian banking sector to energy, we found something disturbing: according to an RBC analysis, local banks were woefully underreserved.

 

Yet while clearly overly optimistic about the severity and the duration of the commodity crunch, at least Canada’s banks do provide some information, which however is more than can be said about most European banks. As Morgan Stanley writes, “Europeans have not typically disclosed reserve levels against energy exposure, making comparison to US banks challenging. Moreover, quality of books can vary meaningfully. For example, we note that Wells Fargo has raised reserves against its US$17 billion substantially non-investment grade book, while BNP and Cred Ag have indicated a significant skew (75% and 90%, respectively) to IG within energy books. Equally we note that US mid-cap banks typically have a greater skew to higher-risk support services (~20-25%) compared to Europeans (~5-10%) and to E&P/upstream (~65% versus Europeans ~10-20%).”

Morgan Stanley then proceeds to make some assumptions about how rising reserves would impact European bank income statements as reserve builds flow through the P&L: in some cases the hit to EPS would be .

A ~2% reserve build in 2016 would impact EPS by 6-27%, we estimate:We believe noticeable differences exist between US and EU banks’ portfolios in terms of seniority and type of exposure. As such, applying the assumption of a ~2% further build in energy reserves in 2016, versus ~4% assumed for large US banks, we estimate that EPS would decline by 6-27% for European-exposed names (ex-UBS), with Standard Chartered, Barclays, Credit Agricole, Natixis and DNB most exposed.

 

Marking to market of high yield and lower DCM/credit trading is also likely to be an issue (and we forecast FICC down ~5% in 2016):We previously showed that CS had the biggest percentage of earnings from HY and already had the worst of peers YoY FICC in 3Q, which we fear could continue to drag, despite a vigorous focus on restructuring.

A matrix of boosting reserves would look as follows on bank EPS:

But the biggest apparent threat for European banks, at least according to MS calulcations, is the following: while in the US even a modest 2% reserve on loans equates to just 10% of Tangible Book value…

… in Europe a long overdue reserve build of 3-10% for the most exposed banks, would immediately soak up anywhere between 60 and a whopping 160% of tangible book!

Which means just one thing: as oil stays “lower for longer”, and as many more European banks are forced to first reserve and then charge off their existing oil and gas exposure, expect much more diluation. Which, incidentlaly also explains why European bank stocks have been plunging since the beginning of the year as existing equity investors dump ahead of inevitable capital raises.

And while that answers some of the “gross exposure to oil and commodities” question, another outstanding question is what is the net exposure to China. As a reminder, this is what Deutsche Bank’s credit analyst Dominic Konstam said in his explicit defense of what needs to be done to stop the European bloodletting:

The exposure issue has been downplayed but make no mistake banks are heavily exposed to Asia/MidEast and while 10% writedown might be worst case for China but too high for the whole, it is what investors shd and do worry about — whole wd include the contagion to banking hubs in Sing/HKong

Ironically, it is Deutsche Bank that has been hit the hardest as the full exposure answer, either at the German bank or elsewhere, remains elusive; it is also what has cost European banks billions (and counting) in market cap in just the past 6 weeks.

via Zero Hedge http://ift.tt/1KDSR2M Tyler Durden

Moments ago S&P continued its downgrade cycle, this time taking the axe to the regional banks with the highest energy exposure due to “expectations for higher loan losses.” Specifically, its lowered its long-term issuer credit ratings on four U.S. regional banks by one notch: BOK Financial Corp., Comerica Inc., Cullen/Frost  Bankers Inc., and Texas Capital Bancshares. The  outlooks on these banks are negative.

It also revised the outlook on BBVA Compass Bancshares to negative from stable and affirmed the ‘BBB+/A-2’ issuer  credit ratings.

We assume the non-regional mega banks are insulated from such actions because they are the primary beneficiaries of the Fed’s generous $2.5 trillion in excess reserves which will allow banks to mask as much of O&G portfolio deterioration as is necessary to “weather the cycle.”

What is notable is that among the S&P non-sugarcoated comments are some true fire and brimstone gems, which suggest that the big picture for banks with substantial energy exposure is about to get far worse. Here is what S&P said:

These rating actions follow a review of U.S. regional banks with large energy  loan portfolios as a percentage of both total loans and Tier 1 capital. Since we revised our outlooks to negative on five regional banks in January 2015, energy prices have declined by more than one-third and the asset quality of energy loan portfolios has deteriorated materially, albeit from fairly benign levels. Throughout 2015, criticized and classified assets climbed significantly, and in the fourth quarter, several regional banks with large energy loan portfolios reported increases in loan loss provisions and energy loss reserves to varying degrees, and, in certain cases, nonperforming assets (NPAs) also rose.

 

Given further declines in energy prices in recent months, less hedging activity by borrowers, and potentially more difficulty for borrowers to cure (i.e., resolve) borrowing base deficiencies through capital raises or asset sales, we think troubled debt restructurings and NPAs in the energy sector will increase, possibly sharply, in coming quarters. We also think banks will increasingly emphasize the potential loss content among rising levels of NPAs that we expect to see throughout 2016. In addition, we think regulatory scrutiny of energy loan portfolios will increase in 2016, including during the upcoming Shared National Credit (SNC) exams (two will be conducted in 2016) and the annual stress tests regulators mandate, which may encourage the use of higher loss assumptions.

 

Many banks have been lowering their energy price assumptions (“price decks”) for exploration and production (E&P) loans throughout 2015, resulting in reduced borrowing bases (the value of a borrower’s reserves against which banks typically lend). In the next semiannual borrowing-base determination this spring, we expect that borrowing bases will decline further, mainly because of lower energy prices (i.e., valuations) and possibly lower reserve replacement, which could lead to more borrower deficiencies (i.e., loan balances that are greater than the borrowing base). Although banks typically allow borrowers as long as six months to resolve a deficiency, we think many borrowers will have fewer options to cure through debt capital issuances or asset sales and dispositions, which were more common last year. Specifically, the cost of capital has increased for many borrowers, and private equity firms may be less willing to commit additional capital to resolve deficiencies. In addition, E&P borrowers may have unsecured debt in addition to their reserve-based loans, which could pressure their overall finances and push them into default or bankruptcy.

 

Equally as important, we think the performance of indirect credit exposures in local energy-focused markets could deteriorate somewhat over the next two years. Although deterioration has not yet been meaningful, we still think the energy price slump could hurt commercial real estate (CRE) in these local markets, such as Houston or smaller cities in Texas, throughout 2016 and 2017. However, we recognize that lower energy prices could have a broad-based positive impact on U.S. consumers and corporations where energy is a significant input cost. We are also wary of strategies that some banks may execute to aggressively grow their loan portfolios in other loan segments, such as CRE, in order to offset contraction in their energy loan portfolios.

 

Although we expect that banks will likely continue to increase their loan loss provisions and reserves within their energy loan portfolios over the next several quarters, we consider that currently low NPAs, solid preprovision earnings generation, and, in some cases, high risk-adjusted capital (RAC) ratios offer the banks a cushion to absorb higher loan loss provisions. This was a key factor in our decision to limit our rating actions to one notch at this point.

 

In our analysis of these companies, we evaluate the potential impact of certain adverse scenarios, based on default and net loan loss assumptions for different types of energy lending. For example, we expect that E&P reserve-based lending will have lower net loss rates than energy services lending because of conservative advance rates on reserve collateral. We will continue to consider the array of possible assumptions regarding energy loan default and net loss rates, as the cycle develops. At this time, however, we do not believe that these banks’ loan loss provisions would exceed preprovision earnings under most foreseeable scenarios, and, thus, our rating actions following this review were limited to a one-notch downgrade.

 

The following table presents a few of the key metrics we are tracking and lists the banks that are included in today’s actions, as well as others we believe have above-average exposure to energy.

 

Is that the end of it? Not even close. Expect much more pain – initially among the regional lenders, many of whom have been given explicit instructions to extend and pretnd as long as possible by the Dallas Fed as reported exclusively here before – before we reach a true bottom in bank exposure.

Finally, for the full list, here is a breakdown from Raymond James laying out the US banks, both regional and national, with the highest exposure to energy: while some of these were just downgraded, this was for a reason: expect much more negative surprises from these lenders in the coming months as more shale stop servicing their debts.

via Zero Hedge http://ift.tt/1KDSR2F Tyler Durden

More than one-fifth of the world’s total GDP is in countries which have imposed negative interest rates, including Japan, the EU, Denmark, Switzerland and Sweden.

Negative interest rates are spreading worldwide.

And yet negative interest rates – supposed to help economies recover – haven’t prevented Japan and Europe’s economies from absolutely going down the drain.

Nor have they even stimulated spending. As ValueWalk points out:

Japan has had ultra-low rates for years and its economy has been terrible. Trillions of debt in Europe now trades at negative interest rates and its economy isn’t exactly booming.  Denmark, Sweden and Switzerland all have negative interest rates, but consumer spending isn’t going up there. In fact, savings rates have been going up in lockstep with the decrease in interest rates, exactly the opposite of what the geniuses at the various central banks expected.

 

Why is this happening? Simply, savers are scared. Lower interest rates have wrecked their retirement plans. Say you were doing some financial planning 10 years ago and plugged in 3% from your savings account.  Now its 0%.  You still have to plan for your retirement. Plug in 0%. What happens to your planning now?  0% compounded for X years is 0%.  The math is simple. So in order to have your target savings at retirement, you need to save more, not spend more. But for some reason, the economists that run central banks around the world can’t see this. They are all stuck in their offices talking to one another and self-reinforcing this myth that they can drive spending up by reducing the rate of return on investments.  Want to see consumer spending go up?  Don’t wreck their savings plans so that they are too scared to spend.  But that’s too simple. Instead, central banks use a chain of causation that doesn’t exist to try to create change 3 or 4 steps down the line. It hasn’t worked, and it won’t work. It isn’t in an individual’s self-interest to go out and spend their money on more “stuff” in order to spur economic growth.

So what’s really going on? Why are central banks worldwide pushing negative interest rates?

Economics professor Richard Werner – the creator of quantitative easing – notes:

The experience of Switzerland [shows that] negative rates raise banks’ costs of doing business. The banks respond by passing on this cost to their customers. Due to the already zero deposit rates, this means banks will raise their lending rates. As they did in Switzerland. In other words, reducing interest rates into negative territory will raise borrowing costs!

 

If this is the result, why do central banks not simply raise interest rates? This would achieve the same result, one might think. However, there is a crucial difference: raised rates will allow banks to widen their interest margin and make their business more profitable. With negative rates, banks’ margins will stay low and the financial situation of the banks will stay precarious and indeed become ever more precarious.

 

As readers know, we have been arguing that the ECB has been waging war on the ‘good’ banks in the eurozone, the several thousand small community banks, mainly in Germany, which are operated not for profit, but for co-operative members or the public good (such as the Sparkassen public savings banks or the Volksbank people’s banks). The ECB and the EU have significantly increased regulatory reporting burdens, thus personnel costs, so that many community banks are forced to merge, while having to close down many branches. This has been coupled with the ECB’s policy of flattening the yield curve (lowering short rates and also pushing down long rates via so-called ‘quantitative easing’). As a result banks that mainly engage in traditional banking, i.e. lending to firms for investment, have come under major pressure, while this type of ‘QE’ has produced profits for those large financial institutions engaged mainly in financial speculation and its funding.

 

The policy of negative interest rates is thus consistent with the agenda to drive small banks out of business and consolidate banking sectors in industrialised countries, increasing concentration and control in the banking sector.

 

It also serves to provide a (false) further justification for abolishing cash. And this fits into the Bank of England’s surprising recent discovery that the money supply is created by banks through their action of granting loans: by supporting monetary reformers, the Bank of England may further increase its own power and accelerate the drive to concentrate the banking system if bank credit creation was abolished and there was only one true bank left – the Bank of England. This would not only get us back to the old monopoly situation imposed in 1694 when the Bank of England was founded as a for-profit enterprise by private profiteers. It would also further the project to increase control over and monitoring of the population: with both cash and bank credit alternatives abolished, all transactions, money creation and allocation would be implemented by the Bank of England.

If this sounds like a “conspiracy theory”, the Financial Times argued in 2014 that central banks would be the real winners from a cashless society:

Central bankers, after all, have had an explicit interest in introducing e-money from the moment the global financial crisis began…

 

***

 

The introduction of a cashless society empowers central banks greatly. A cashless society, after all, not only makes things like negative interest rates possible, it transfers absolute control of the money supply to the central bank, mostly by turning it into a universal banker that competes directly with private banks for public deposits. All digital deposits become base money.

via Zero Hedge http://ift.tt/1KDSQMh George Washington

Last week, the “teflon Don” took a hit in Iowa.

Despite the fact that the last Des Moines Register poll before the caucus showed the brazen billionaire pulling ahead of Ted Cruz in the state for the first time since August, Donald Trump lost, in what many deemed a surprising outcome.

Initially, Trump congratulated Cruz. Later, he called the senator a cheater and accused him of “stealing” the state by bilking the hapless Ben Carson out of votes.

Ted Cruz didn’t win Iowa, he stole it. That is why all of the polls were so wrong and why he got far more votes than anticipated. Bad!

— Donald J. Trump (@realDonaldTrump) February 3, 2016

Tonight, we get the nation’s first primary as voters head to the polls in New Hampshire, where Bernie Sanders and Donald Trump hold commanding leads. “Trump, who has held a sizable lead in the Republican race in New Hampshire, appears poised to win his first contest of the 2016 campaign after finishing second in Iowa a week ago” WaPo writes. “In the Democratic race, Sen. Bernie Sanders maintained his double-digit lead over former secretary of state Hillary Clinton.”

“Sanders’ 54% to 40% advantage over Hillary Clinton is down slightly from a 55% to 37% lead in the previous Poll of Polls,” CNN reported on Monday. “Trump tops the GOP field with 31%, well ahead of Marco Rubio” who is polling at 15% and “has picked up four points since the previous New Hampshire Poll of Polls, the biggest change in the averages in the last week.”

Ted Cruz has 13%, John Kasich is sitting on a respectable 11% and Jeb Bush has 10%.

Rubio – who put up a strong showing in Iowa before stumbling in the last GOP debate – is keen to keep up the momentum. “It’s great to be targeted, because it means you’re doing something right,” he told ABC. “Rubio’s stumble under New Jersey Gov. Chris Christie’s ferocious fire at Saturday’s GOP debate, meanwhile, threatens to stall his momentum heading into New Hampshire,” CNN notes. “Voters in New Hampshire are serious about, they understand what’s at stake here,” Rubio told CNN. “The future of America is at stake.”

“I think the people of New Hampshire deserve better than someone just throwing mud and insulting the other candidates,” Cruz said, in a jab at Trump. “He doesn’t like the fact that he lost in Iowa, so he’s chosen to go down the road of insults.”

In a particularly inauspicious move, Ben Carson is set to skip his own “victory” party in order to get a head start in South Carolina. “Ted Cruz’s campaign and surrogates seized on the news, inferring that the trip meant Carson would be suspending his campaign and encouraging his supporters to caucus for Cruz,” Politico notes.

As for Trump, the real estate mogul taunted protesters at his final rally before the ballot. “Oh, they’re getting rid of some protesters. Look. Are the police the greatest?” he asked a crowd of some 12,000 people. “I like protesters because that’s the only way the cameras show how big the crowd is.”

Here’s The Oregonian with some of the key themes for Tuesday’s vote:

Marco Rubio really might be a robot — or, rubot, as he’s been dubbed. At his last rally before New Hampshire voters headed to the polls, he showed that his tendency to repeat scripted lines — sometimes the same ones over and over in a single short speech — isn’t reserved for TV debates. At Nashua Community College on Monday he said it was difficult for he and his wife “to instill our values in our kids instead of the values they try to ram down our throats.” Then he said it two more times before stepping down from the podium, seemingly unaware that he was repeating himself.

Hillary Clinton is progressive. No, really. Sanders, seeking to clearly differentiate himself from Clinton, tweeted out last week, “You can be a moderate. You can be a progressive. But you cannot be a moderate and a progressive.” This claim has received a fair amount of pushback. ‘Moderate’ is a practical term. Broadly speaking, it refers to a candidate who focuses on consensus building and incremental progress, someone who doesn’t believe the US political system is capable of sudden, lurching change, or just doesn’t want that kind of change. A moderate’s opposite is a radical, someone who believes rapid, revolutionary change is both possible and necessary.” Clinton, meanwhile, has been trying to shore up her progressive credentials all week. “I won’t cut Social Security,” she tweeted last Friday. “As always, I’ll defend it, & I’ll expand it. Enough false innuendos.”

As for Jeb Bush, the candidate who has received the most money from Wall Street, it’s do or die time and the former Florida governor is coming out swinging. 

.@realDonaldTrump, you aren’t just a loser, you are a liar and a whiner. John McCain is a hero. Over and out.

— Jeb Bush (@JebBush) February 8, 2016

Trump’s response: “He’s a stiff who you wouldn’t hire in private enterprise, OK? This is a stiff. This is a guy that if he came looking for a job, you’d say, ‘No thank you.’ And that’s the way it is.”

Tonight we’ll find out who the “stiffs” really are in New Hampshire where America’s political aristocracy is set to suffer a punishing defeat at the hands of the so-called “protest candidates.”

Asked who he thought would prevail on Tuesday evening, President Obama said only this: “I have no idea.”

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