Category: zerohedge

Last October we wrote about the unfortunate situation in Loyalton, California whereby CalPERS was threatening to slash pension payments to a group of retired city workers after their City Council members failed to understand basic pension accounting and the unintended consequences of terminating their plan (see “Pension Benefits In Tiny California Town To Be Slashed As “Ponzi Scheme” Is Exposed“).  Now it seems as though retirees of the East San Gabriel Valley Human Services Consortium may be facing a similar fate after their former municipal employer failed to pay their pension dues.

But her former employer, East San Gabriel Valley Human Services Consortium, left a $406,027 unpaid bill to the California Public Employees’ Retirement System, which manages benefits for 3,000 local governments and districts. As Calpers, the nation’s largest public pension, deals with a growing gap between what’s been promised and what’s been set aside, it may slash the checks of Lynch and 190 other workers by 63 percent — the rate by which the agency has fallen short.

 

“We were always told that it was set in stone. Now to find out that’s not true — is the sky blue? Is water wet?” Lynch, who lives in a 1994 motor home, said of her pension. “We’ve paid 100 percent of our responsibility into it. I just don’t understand how they can come along and cut so much out.”

And while CalPERS will take all the full blame from angry retirees who are about to have their pensions slashed, apparently 4 California cities walked away from their funding obligations after shutting down over an overbilling scandal that surfaced back in 2014.

The case of the former East San Gabriel agency would be felt more broadly. Known locally as LA Works, the service at its height had about 140 employees and an annual budget, funded mainly through government grants, of about $13 million, said Tom Mauk, a consultant hired to help wind down its books. It went out of business after Los Angeles County severed its relationship, citing overbilling by the agency.

 

Calpers had asked the cities that formed the entity — Azusa, Covina, Glendora, and West Covina — to pay the debt to the retirement plan because, as staffers said during a February board meeting, of their ethical responsibility.

 

“What’s unacceptable is the fact you have a number of employees who were promised a benefit, nobody is paying to meet that liability and people are walking away from their responsibility,” Costigan said in an interview.

 

Municipal officials said they have no legal obligation. Any payment could be considered an illegal use of public funds, said Chris Freeland, West Covina City Manager.

Of course, CalPERS certainly deserves a healthy portion of the blame here as they’ve been willing participants in perpetuating one of the largest public pension ponzi schemes in the country for years now.  Just last December we noted CalPERS’ decision to only modestly decrease their discount rate by 50 bps, a move which their finance committee chairman all but admitted was politically motivated to allow “municipalities and other government agencies some breathing room” rather than lower it to where it should be and take the risk of bankrupting half of the state of California.  Here’s what we wrote:

A few weeks ago we asked whether CalPERS would rely on sound financial judgement and math to set their rate of return expectations going forward or whether they would cave to political pressure to maintain artificially high return hurdles that they’ll never meet but help to maintain their ponzi scheme a little longer (see “CalPERS Weighs Pros/Cons Of Setting Reasonable Return Targets Vs. Maintaining Ponzi Scheme“).  The decision faced by CALPERS was whether their long-term assumed rate of return on assets should be lowered from the current 7.5% down to a more reasonable 6%.  Well, we now have our answer and it seems the board erred on the side of maintaining the ponzi with a decision to reduce the fund’s discount rate by only 50 bps, to 7%, to be phased in over 3 years.

 

Of course, this decision should come as little surprise to our readers as we concluded our previous post with the following prediction:

 

We’ve seen this battle between math/logic and politicians played out numerous times in states all across the country.  Somehow we suspect that “math/logic” will continue to lose…better to bury your head in the sand for a couple of more years and pretend there is no problem.

 

Meanwhile, Richard Costigan, chairman of the CalPERS finance committee, who vowed that “this is just a start,” more or less admits that the decision was politically motivated to allow “municipalities and other government agencies some breathing room before they absorb the impact.”

Of course, while CalPERS is the largest public pension in the U.S. it’s certainly not the worst off from a financial perspective (yes, we’re talking about you Illinois).  In fact, there is roughly $2 trillion in total underfunded state and local pension liabilities around the country.

That said, the situation looks even more dire if you adjust that underfunding amount to reflect an appropriate discount rate rather than the 7.5% “dream rate” that CalPERS and most of America’s other pension ponzis use.  In fact, we recently took a stab at calculating the real taxpayer liability outstanding to America’s public pensions and found it to be closer to $5 – $8 trillion (see “An Unsolvable Math Problem: Public Pensions Are Underfunded By As Much As $8 Trillion“).

We decided to take a look at what would happen if all federal, state and local pension plans decided to heed the advice of Mr. Gross. As one might suspect, the results are not pleasant.  We conservatively assume that public pensions are currently $2.0 trillion underfunded ($4.5 trillion of assets for $6.5 trillion of liabilities) even though we’ve seen estimates that suggest $3.5 trillion or more might be more appropriate.  We then adjusted the return on asset assumption down from the 7.5% used by most pensions to the 4.0% suggested by Mr. Gross and found that true public pension underfunding could be closer to $5.5 trillion, or over 2.5x more than current estimates.  Others have suggested that returns should be closer to risk-free rates which would imply an even more draconian $8.4 trillion underfunding.

 

 

But we can kick this can down the road for a while longer…so feel free to keep buying stocks irrespective of how close valuation multiples get to infinity.

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Via Peter K of SovereignMan.com,

I’m visiting my brother in Indonesia right now.

Being a good host, he was fixing us vodka martinis, when he realized he ran out of olives.

Both of his drivers had finished for the day so I was expecting him to compromise on the olives.

No need.

He loaded up a mobile phone app and ordered a jar of olives.

Fifteen minutes later there was a knock on the door and a guy was there with a jar of olives… at the regular retail price, with zero additional charge for delivery.

Later that evening we went out to a bar and needed transportation.

Again, Tony jumped on his app, and within seconds we had an awaiting vehicle outside his house.

It cost 75 CENTS to be driven in style to the bar, and another 75 cents to be driven back again.

In the downstairs office of his house, I noticed a massage table and asked his wife about it. “We occasionally order a massage from time to time from the app. It costs almost nothing.”

By “almost nothing” she meant $7 an hour for a professional massage – in your home.

The app is called “Go-Jek”, and it offers everything you could want: car, motor bike (faster in Jakarta traffic, and even cheaper), food delivery, shopping, tickets, payments (and electronic wallet), manicure and beauty treatment, pharmaceuticals, cleaning services, auto repair services and more.

Out on the street, about a third of the bikes wear the green livery of Go-Jek. Occasionally you’ll see an Uber as well.

Seeing this buzz on the ground is precisely why we travel around the world looking for business opportunities to invest in.

You can’t get a sense of a country from Google or from CNN.

Being on the ground opens your eyes to the lightning-fast change that occurs when a developing country adapts new technology.

This sort of rapid transition economy creates gaping opportunities that simply don’t exist in North America, Europe, and other mature markets.

And in the rare instance when a business is actually able to make a significant and lasting impact in a major developed market like the US, the company’s valuation will be insane.

Snapchat is expected to IPO at around $20 billion later this week.

AirBnB is still private and raised money several months ago at a $30 billion valuation.

Uber is currently worth nearly $70 billion.

(All of those companies lose money, by the way…)

Indonesia’s Go-Jek, meanwhile, raised capital last year at a pre-money valuation of $750 million, 98% less than what Uber is worth.

The reason for this massive disparity is simple: many investors can’t be bothered to look beyond their own backyards.

It’s as if anything worth investing in is exclusively in the United States.

This classic herd mentality means that there’s too much money chasing around too few opportunities.

As a result, investors buy over-valued stocks, bonds that yield nothing, or private companies that are worth tens of billions of dollars despite racking up massive losses.

They’re completely unaware what incredible opportunities lie overseas.

The rest of the world has the opposite problem: there are too many great businesses and not enough capital.

Some of the biggest, most exciting markets in the world are totally overlooked by the investing public.

Go-Jek is a great example; only a handful of foreign funds have invested, and most people have never heard of it.

I’ve been finding amazing companies here which are already profitable. And yet, they can’t raise capital to fund their expansion.

And Indonesia is far from alone.

We’re looking at investments in Eastern Europe, South America and Asia which most funds can’t touch because they are too small and not in America — no matter how profitable they are, and how compelling their potential.

I was in Georgia recently (the country, not the state) and was shocked at how many profitable companies were in need of capital.

(Special note to Total Access and SMPI members: we’ve completed due diligence on our next deal in Georgia and will have the report to you soon, followed by my findings in Indonesia. Stay tuned.)

Bottom line, the world is a big place and there are compelling opportunities everywhere… as long as you have the intellectual independence to look beyond your own borders.

Do you have a Plan B?

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By Chris at http://ift.tt/12YmHT5

When most of us think of Iraq we picture burning oil fields, sand, blown-up buildings, sand, machine gun-toting jihadists, sand, helicopter gunships, sand, Humvees, mosques, and well… sand.

We know that George and Tony told us the war is over and that was ages ago so it must be true.

In fact, things must be jolly peachy by now because by my calendar that was May 2003, some 14 years ago. Still, George and Tony – like many podium donuts before them – said a lot of things and so with much of what traditional media tells us oscillating between questionable and “hahaha, bullsh*t”, it makes a whole lot of sense to source information directly from credible sources.

I’ve made a point of doing this personally and I can’t recommend it enough. In any event, long-term readers will recall my buddy Thomas Hugger from Asia Frontier Capital (I chatted to Thomas here).

Well, one of the funds under Thomas’ umbrella is a relatively newly launched Iraqi fund, and so, since I wanted to get a better idea of what’s happening in the Middle East and Iraq in particular, what better person to bring me up to speed than the CIO of the AFC Iraq Fund, Ahmed Tabaqchali.

I hit record on the conversation so that you, too, could enjoy it:

(click on the image to listen to the podcast)

In addition as a follow up Ahmed followed up with a lot of data points (message below). This should be read in conjunction with the recorded call.

Dear Chris,

The correction in the equity market that was anticipated in last month’s update started in late January and extended into February with an overall decline of about -3%, as measured by the RSISUSD Index, which seems to have played its course and it looks like the market will end the month flat. The most likely scenario is for an extended consolidation with an upward bias in the next couple of months.

 

I, however seem to have been overly cautious in underestimating the strength of the rebound which is often the case in illiquid frontier markets in that observers always underestimate the strength of a rebound in the same way that extent of a decline exceeds observers’ expectations. 

 

This year’s market, so far, is playing out as the mirror image of last year that saw a relentless decline in the index with -13.7% in January, -4.4% in February, -10.75% in March, -6.6% in April, and -11.9% in May. Liquidity is the same driver with this year seeing an initial & gradual recovery in liquidity while last year it was the final draining of liquidity.

 

The revival in liquidity is mostly local with foreigners selling for the month, although at much smaller levels than last year (see chart below). While, this is an unwelcome development, never the less the flip side to it has been the ease at which locals have absorbed this selling especially considering that foreign selling in selected names has resulted in minor declines of -3% to -7% which has mostly been recovered as a result of local buying that seems to continue unabated.

Net Foreign activity index on the Iraq Stock Exchange (ISX) (green) vs. 10-day of average of net foreign activity (red):

Source: Iraq Stock Exchange (ISX), AFC

The same observations hold for the recovery of the market price of the Iraqi Dinar with the price action mirroring that of the equity market. Recall that last month it was observed that the market price of Iraqi Dinar (IQD) vs the USD has improved by about +1.8% for January lowering the premium over the official exchange rate to about 8% from just under 10% that devolved in 2016. The premium widened to 8.7% by mid-February but has recovered to about 7.2%.  This is still above the normal range of 2-4% leaving room for further narrowing of the premium (see chart below).

Official IQD/USD rate (grey), Market IQD/USD rate (red), Spread (green) RHS

Source: Central Bank of Iraq, AFC. The spikes in 2012, 2013 and 2015 were a result of CBI polices that aimed to control the demand for USD but were abandoned when they raised market prices.

However, the improvement in liquidity is still in the early phases, with overall liquidity still scarce as can been seen from average daily volumes that although are at the same elevated levels of the last few months but are meaningfully below those of the prior years when the market was much stronger. Given that the risks of the last two years are still present, liquidity in the economy is still scarce that the recovery will likely be in fits and starts and the opportunity continues to be to acquire attractive assets that have yet to discount a sustainable economic recovery.

 

Supporting liquidity improvements are the continued strength in oil prices at sustainably higher levels that those budgeted for by the government & the IMF and thus should give further impetus to the expansion in non-oil capital investment spending which is estimated to be up +192% yoy in 2017 after contractions of -68% in 2016 and -50% in 2015 (the importance of this investment spending for the economy was highlighted in December’s newsletter in the section for 2017 outlook which appears under the December 2016 review).

 

The last few days saw further acceleration in the Mosul offensive with the start of the campaign to liberate the western part of the city, which is coupled with increased US support and involvement as highlighted by the US defence secretary’s current visit to Iraq. Parallel developments against ISIS in Syria have been taking place which combined should accelerate the end of the ISIS occupation and end of conflict.Finally, the chart below continues to support the thesis that the market has a significant catching up to do in the long process of discounting the end of conflict and the subsequent recovery afterwards. The recent gains, as impressive as they are, only represent a 30% retracement of the -68% decline from 2014 peak to 2016 multi-year lows.

Rabee Securities’ RSISUSD Index (red), 200 day moving average (green)

 

 

Source: Iraq Stock Exchange (ISX), Rabee Securities, AFC

 

Regards,

 

Ahmed Tabaqchali, CIO AFC Iraq Fund

I find that every little extra data point and nuance is valuable to me, even if at the time I can’t see how it may have an impact on what I’m focussed on. Over time, it provides an incredible war chest of intellectual firepower in that 3 pounds of mushy stuff stored inside our skulls.

Since Iraq is a geographically strategic player in the Middle East, understanding what is happening there and with their neighbours could well be very valuable to us as investors and to those wishing to participate in the country. As is so often the case with postwar economies, the returns can be pretty phenomenal.

– Chris

I’ll leave you with some of the key quotes from the Chilcot report, because, after all, it’s worth knowing some things about the conflict, the aftermath of which Iraq is still grappling with:

“We’ve concluded that the UK chose to invade before the peaceful options for disarmament had been exhausted. Military action at that time was not a last resort.”

“It is now clear that policy on Iraq was made on the basis of flawed intelligence and assessments. They were not challenged, and they should have been.”

Tony Blair “overestimated his ability to influence US decisions on Iraq”

“The judgements about the severity of the threat posed by Iraq’s weapons of mass destruction – WMD – were presented with a certainty that was not justified.”

“Despite explicit warnings, the consequences of the invasion were underestimated. The planning and preparations for Iraq after Saddam Hussein were wholly inadequate.?”

The legal basis on which military action was launched was “far from satisfactory”.

“The Armed Forces fought a successful military campaign, which took Basra and helped to achieve the departure of Saddam Hussein and the fall of Baghdad in less than a month.?”

“The invasion and its aftermath led to the deaths of 150,000 Iraqi, most of them civilians.”

“The Government’s preparations failed to take account of the magnitude of the task of stabilising, administering and reconstructing Iraq, and of the responsibilities which were likely to fall to the UK.”

“Military action in Iraq might have been necessary at some point, but in March 2003 there was no imminent threat from Saddam Hussein.”

————————————–

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via http://ift.tt/2mfY1ei Capitalist Exploits

In his speech to a joint session of Congress last night, Trump once again took direct aim at the violence in Chicago, saying “In Chicago, more than 4,000 people were shot last year alone –- and the murder rate so far this year has been even higher … This is not acceptable in our society.”

And just to check the facts, per data from HeyJackAss!, in fact 4,379 people were shot last year in Chicago with 800 homicides.

Of course, Trump’s repeated references to the violence in Chicago take direct aim at their mayor, Rahm Emanuel, who has had little success reining in the violence plaguing his streets.  Meanwhile, obviously flustered by the persistent mentions of his ineptitude, Emanuel blasted Trump’s comments last night asking whether the President “cares enough about violence in our city to do more than talk or tweet about it?” Per ABC News:

Chicago Mayor Rahm Emanuel slammed President Trump Tuesday night for his remarks during his joint address to Congress about the Windy City’s murder rate.

 

“We have repeatedly made specific requests of the administration for greater law enforcement integration and resources; a higher priority placed on federal gun prosecutions; and funds restored toward mentoring and after-school and summer jobs programs that have proven to be positive alternatives for our young people,” Emanuel said in a statement following Trump’s address. “Because this is so important, I’ll always be ready with this list whenever the President asks.”

 

Emanuel added, “The better question, I’d suggest, is whether the President cares enough about violence in our city to do more than talk or tweet about it.”

As we’ve pointed out before, Chicago has been a frequent Twitter target for Trump with his latest tweet calling out a particularly violent night in the city last month.

“Seven people shot and killed yesterday in Chicago. What is going on there – totally out of control. Chicago needs help!”

Seven people shot and killed yesterday in Chicago. What is going on there – totally out of control. Chicago needs help!

— Donald J. Trump (@realDonaldTrump) February 24, 2017

If Chicago doesn’t fix the horrible “carnage” going on, 228 shootings in 2017 with 42 killings (up 24% from 2016), I will send in the Feds!

— Donald J. Trump (@realDonaldTrump) January 25, 2017

Chicago murder rate is record setting – 4,331 shooting victims with 762 murders in 2016. If Mayor can’t do it he must ask for Federal help!

— Donald J. Trump (@realDonaldTrump) January 2, 2017

Meanwhile, per data from HeyJackAss!, YTD homicides in Chicago have already surpassed 100 for just the first two months of the year. 

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

Via Eric Peters of EricPetersAutos.com,

What does it mean when people talk about self-driving cars? We really ought to be talking about programmed cars.

And about who does the programming.

The “self-driving” car doesn’t decide for itself how fast it goes or what route it takes – at least, it won’t until it becomes an autonomous thinking machine, an artificial intelligence. We are not quite there yet.

So, in the meanwhile, who decides?

And it is a who – a flesh-and-blood someone (or someones). Guess what? It’s not you. This whole “self driving” car thing is about taking you out of the driver’s seat. And putting someone else in control of “your” car.

That part stays the same. Nominal ownership. You will make the payments, pay the taxes and fees. You will still be responsible for all of that.

But who will control the car? And how will they control it?

The “who” will be the same people who already control the roads: The people who are the government. Clovers. Authoritarian Control Freaks. The same people who make the laws about how fast you’re allowed to drive, when (and whether) you’re allowed to pass, make a right on red or a U turn . . . every last little thing.

They will control your “self-driving” car.

And when they do, not only will you not be allowed to proceed at a speed faster than they decree – or make a U turn or a right on red . . .  or do anything they do not want you to do- it will be impossible to do so.

The car – controlled by them – will not do your bidding.

It will do theirs.

Can you imagine? I can – and it makes my teeth ache.

People have this idea that the “self driving” future will be fast and free. A techno-Libertopia of high-speed and high-efficiency. Cars zipping along at triple digit speeds in tight formation, travel times cut down to a fraction of what they are now.

In fact it will be the opposite.

It will be Least Common Denominator . . . universalized and encoded in the electro-mechanical DNA of “your” car. No longer will you bee free to mash the gas and thread the needle through a Clover Cluster, chuckling to yourself as you watch them recede in the rearview. There will be no “speeding,” no right on red.

You – that is, your car – will drive at exactly the pace of the Clover Cluster.

A slow pace.

No more burnouts; no more drifting. Nothing “aggressive.”

Acceleration will be metered in accordance with the Fear Factor of the Clover Cluster. Think of your mother-in-law.

Of your grandmother. In her ’87 Buick Le Sabre, hunched over the over the wheel, perpetually riding the brakes.

It will have to be one size fits all. Because the programming must be. No more wiggle room; no more driving the way you prefer. No more driving faster – or harder – than they allow.

Individuals vary, but the Clover Hive is just that – a hive. Napoleon chose it as the symbol of his authoritarian state for good reason. Everyone the same and expected to do the same, except the Queen. The analogy is excellent, too, because the people dictating programming policy will almost certainly be “moms” and others of the female persuasion – who esteem saaaaaaaafety above everything and for whom velocity is the sine qua non of not-safe.

Slower is always better.

It will be like taking the bus – only worse. The bus driver was still an autonomous individual; he had the option to exercise initiative; he could even do something technically illegal – but reasonable and even necessary to deal with a situation that would otherwise mean just sitting there, Because It’s The Law.

Imagine how it will be in your programmed-by-others car. Traffic has come to a dead stop because of an accident up ahead. You could drive on the shoulder – briefly – to reach that exit a few hundred yards away.

But the programmed-by-others car will veto that. It is, after all, illegal to drive on the shoulder – and the car’s programming won’t will permit the law to be violated. Leaving aside the Cloverific adulation of The Law, the lawyers would never allow it.

Can you imagine?

Well, your honor, I knew it wasn’t legal to drive on the shoulder but I was just the passenger.

Shrug.

So the cars will be programmed to never do anything that isn’t “safe” – as well as punctiliously, exactly legal. And what is legal will be strictly in accordance with what your near-sighted, fearful mother-in-law would approve of. What the termagants who control the levers and billy clubs of government decide is “safe.”

To believe otherwise, you must believe that in this one instance, the government will not use technology to further control us. That it will set us free, expand our liberty.

The one upside – maybe – is that we’ll be able to get soused before the trip and just pass out. Tell the car to wake us up when we get there.

Whenever that turns out to be.

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Will it be different this March? Apple off to good start this year.

Full Disclosure; Premium Members are long APPL due to pattern and seasonal patterns. 

via http://ift.tt/2mvceEn kimblecharting

The cost of funding for your average joe, average corporation, and average swaps trader, surged overnight. 3M Libor rose by the most since Dec 2015 (Fed rate hike) to the highest level since April 2009.

Biggest jump since the fed rate hike in Dec 2015…

As Reuters reports, the cost for banks to borrow funds in U.S. dollars surged by the most since December 2015 on Wednesday, a day after a series of Federal Reserve officials jolted short-term interest rate markets with talk of a near-term rate rise.

U.S. 3-month Libor was set near an eight-year high early on Wednesday at 1.09278 percent compared with 1.064 percent on Tuesday. The 2.878 basis point rise was the largest since Dec 17, 2015, the day after the Fed's first rate hike following the financial crisis and the Great Recession.

The jump comes as short-term rate markets are rapidly repricing the risk that the U.S. central bank may deliver another rate increase as early as mid-March, when its monetary policy committee next meets.

In recent days a clutch of Fed policymakers have spoken about the case for a near-term rate hike becoming more compelling in the aftermath of the election of Donald Trump as president and a Republican-controlled Congress intent on pursuing an aggressive pro-growth economic agenda.

The latest voices to argue that case came on Tuesday, when both the influential heads of the New York and San Francisco Federal Reserve banks signaled they are concerned about waiting too long to press rates higher.

Driving up the cost of funding to 8 year highs…

Still when did a rising cost of funds ever hurt an economy? Oh wait.

The last time 3M Libor was at this level, The Dow was half its current price…

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The DNC is dead. Muerte. Fin. Let’s take an inventory of how the elitist left has become a party of kneecapped shills;

Out of touch:

Skeletor’s mother, aka Crypt Keeper’s next ex wife, aka nutsack ear – Nancy Pelosi, led a parade of miserable bitches to Trump’s speech last night, wearing KKK-esque cult outfits. After the speech, they jumped up and marched out of the room like petulant children.

Given how epic Trump’s speech turned out to be, perhaps a course correction was in order? A hand signal or something? Nope, this gaggle of dumb bitches stomped out after Trump finished – back to snake mountain, while 78% of respondents in a CNN poll reacted positively to Trump.

Following Trump’s speech, the official DNC response was issued by a life-alert representative / heaven’s gate cult leader.

NEXT, we have a top volunteer for Hillary Clinton’s campaign, Dan Grilo – a perfect example of liberal sociopathy, who called a navy seal widow an idiot. When the internet exploded with rage, he deleted the tweet, and then his entire Twitter account – not before backpedaling like a bitch of course. Now he’s unemployed – most assuredly only because he got caught.

What’s this? Debbie Wasserman Schultz and her horrible soul-glow perm couldn’t be bothered to applaud for the same widow during the two minute standing ovation.

Speaking of out of touch ivory tower liberals, Chelsea Hubbell Clinton, of recent “driving a Clinton Foundation official to the brink of suicide” fame, keeps making retarded tweets and is getting BTFO every. single. time.

Chelsea Hubbell, raised in a bubble, shitposting every day. Along came THE ENTIRE INTERNET WHICH DESTROYS HER ON A REGULAR BASIS. End of story.

Liberals – from millennials to old commies, can’t stop making ass:

Comments sections across the blogosphere are full of bitter, snarky, self-confident losers who don’t seem to understand that now is the time to shut their pie holes up and attempt introspection. Instead – they demand their participation award, as the generation raised on Nickelodeon and MTV can’t help but substitute arrogance for a wholesale lack of substance. These people are truly empty shells, and when humility is in order it’s file not found. Most of these trigglypuffs need to plug in and download the “losing with grace” algorithm into their angry little snowflake robot brains, because their kung-fu sucks and most of them don’t realize they’re acting like twats.

The liberal MSM is overt propaganda – and the next generation of voters knows what’s up: 

Thanks to the WSJ led assault on PewDiePie – in which they called a lovable guy with over 50 million fans a Nazi and vomited forth a heavily edited a video with no context, Generation Z knows they’re being lied to. Oops!

Thanks to the un-refuted Wikileaks, they also know about those MSM shill huddles at Podesta’s house, and how John Harwood was John Podesta’s bitch.

They know that the MSM has routinely been fed narratives, for years.

They know Bernie Sanders was sabotaged by the CNN and the DNC – which just put one of the key conspirators in charge.

The most recent lie is of course Sweden – which the MSM and Swedish government has repeatedly claimed is A-OK, yet a different picture emerges when people pop over to Zerohedge, Breitbart, iBankCoin, Twitter and YouTube to follow “boots on the ground” journalists like Tim Pool who’s being chased around the country by riotous Muslims issuing death threats. Result; the MSM opposition party is once again exposed – both their narrative and reputations have been utterly destroyed.

In Rinkeby, 2:30 PM, several men started masking up and following us. Police told us to leave and had to escort us to our car. http://pic.twitter.com/Tgm2eCSIaj

— Tim Pool (@Timcast) March 1, 2017

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One day after a duo of Fed presidents unleashed the biggest plunge in 2 month Fed Fund futures since 2008, sending March rate hike odds from 50% to 80% in under two hours…

…and resetting the market's expectations for a March Fed meeting, which suddenly went "live" after NY Fed President William Dudley and SF Fed chief John Williams signaled in separate speeches Tuesday that a rate hike will be considered in FOMC’s March meeting, moments ago the Fed's uberdovish governor Lael Brainard joined the hawkish parade when in prepared remarks for an event at Harvard, she said that “assuming continued progress, it will likely be appropriate soon to remove additional accommodation, continuing on a gradual path."

She also said that “we are closing in on full employment, inflation is moving gradually toward our target, foreign growth is on more solid footing, and risks to the outlook are as close to balanced as they have been in some time."

Once the headlines from her speech hit, the USDJPY saored, and has since hit intraday highs, on renewed expectations that another 25 bps rate hike may be due as soon as March 15, when the next FOMC meeting takes place.

Some other hawkish statements:

• “The past few months have seen continued progress in the labor market."
• “Inflation has moved up lately as the effect of past increases in the dollar and declines in energy prices have faded"
• "Core inflation has been below 2% target, and further progress is needed to reach and sustain symmetric inflation goal"
• “Recent months have seen an increase in the upside risks to domestic demand."
• “Near-term risks to the United States from abroad appear to have diminished."
• “How fiscal policy affects the economy depends on a lot of things, and of course there’s a lot of uncertainty,”

Brainard also touched on another sensitive topic, namely the Fed's balance sheet, saying that “as the federal funds rate continues to move higher toward its expected longer-run level, a transition in balance sheet policy will also be warranted." She also added that “there are good reasons to expect a normalized balance sheet to be considerably smaller than its current size but larger than its pre-crisis level."

Some additional observations on her comments from Stone McCarthy:

• The March meeting is squarely in focus for a possible rate action in the wake of strong economic data and measures of inflation at long last nearing the Fed 2% objective.
• Most policymakers are still speaking in terms of gradual hikes, but also moving "sooner rather than later" to avoid having to more sharply increase rates if growth and/or inflation starts to pick up.
• Recent comments from Brainard's fellow FOMC participants certainly suggest that hawkish sentiment is growing among the voters. However, only Chair Yellen speaks for the FOMC as a whole and it is her remarks on Friday at 13:00 ET that will be decisive.
• Brainard said, the economy is "closing in on full employment" and inflation is moving "gradually" back to target, and that "it will likely be appropriate soon to remove additional accommodation, continuing on a gradual path".
• Brainard mentioned "increased focus on the balance sheet", and that it will need to be adjusted relative to the fed funds rate depending "on the degree to which they are substitutes". Might prefer fed funds rate as "sole active tool away from the effective lower bound". Once well away from lower bound, "balance sheet would be set on autopilot" to shrink "in a gradual, predictable way".
• Near term risks from abroad are "diminished" and overall risks are about balanced.

Of course, all of these statements could be merely trial balloons to test the market's preparation for an upcoming rate hike: for the real arbiter look to this Friday's speech by Janet Yellne: if she turns as hawkish as her FOMC peers, than a March hike is effectively assured, especially with the March hike odds now at or around 70%.

Watch Brainard live below:

via http://ift.tt/2lY0Kq7 Tyler Durden

The government deal on the debt ceiling is coming to an end next month, and there is about to be a great deal of noise about it. But, as SHTFPlan.com's Mac Slavo notes, while the system is most likely to simply pass the buck around again, things may have finally reached the point where the road cannot be stretched further out ahead. The Federal Reserve system has acknowledged that QE stimulus reached its theoretical limit, and had crippled the economy; it has acknowledged that the law of boom and bust has put us into a double-bind, and that there will be economic pain one way or another. The experts, critics and Cassandra’s have all screamed about the massively vulnerable system we are all part of, but the biggest question of all is when? Have the debt levels, and monetary schemes simply reached the point of no return? Are they ready to sacrifice public order and stability in order to collect on what is there’s? These things move in century-long cycles, and it is time to assess where we’re at, at what point in history we have reached. Central banking has enslaved us all, and doomed us to the next crisis, and there may be nothing we can do to stop it…

March 2017: The End Of A 100 Year Global Debt Super Cycle Is Way Overdue

via Michael Snyder of The Economic Collapse blog,

For more than 100 years global debt levels have been rising, and now we are potentially facing the greatest debt crisis in all of human history.  Never before have we seen such a level of debt saturation all over the planet, and pretty much everyone understands that this is going to end very, very badly at some point.  The only real question is when it will happen.  Many believe that the current global debt super cycle began when the Federal Reserve was established in 1913.  Central banks are designed to create debt, and since 1913 the U.S. national debt has gotten more than 6800 times larger.  But of course it is not just the United States that is in this sort of predicament.  At this point more than 99 percent of the population of the entire planet lives in a nation that has a debt-creating central bank, and as a result the whole world is drowning in debt.

When people tell me that things are going to “get better” in 2017 and beyond, I find it difficult not to roll my eyes.  The truth is that the only way we can even continue to maintain our current ridiculously high debt-fueled standard of living is to grow debt at a much faster pace than the economy is growing.  We may be able to do that for a brief period of time, but giant financial bubbles like this always end and we will not be any exception.

Barack Obama and his team understood what was happening, and they were able to keep us out of a horrifying economic depression by stealing more than nine trillion dollars from future generations of Americans and pumping that money into the U.S. economy.  As a result, the federal government is now 20 trillion dollars in debt, and that means that the eventual crash is going to be far, far worse than it would have been if we would have lived within our means all this time.

Corporations and households have been going into absolutely enormous amounts of debt as well.  Corporate debt has approximately doubled since the last financial crisis, and U.S. consumers are now more than 12 trillion dollars in debt.

When you add all forms of debt together, America’s debt to GDP ratio is now about 352 percent.  I think that the following illustration does a pretty good job of showing how absolutely insane that is…

If your brother earns $100,000 in annual income and borrowed $10,000 on his credit card, he could consume $110,000 worth of stuff.  In this example, his debt to his personal GDP is just 10%.  But what if he could get more credit year after year and reached a point where his total debt reached $352,000 but his income remained the same.  His personal debt-to-GDP ratio would now be 352%.

 

If he could borrow at super low interest rates, maybe he could sustain the monthly loan payments. Maybe?  But how much more could he possibly borrow?  What lender would lend him more?  And what if those low rates began to rise?  How much debt can his $100,000 income cover?  Essentially, he has reached the end of his own debt cycle.

The United States is certainly not alone in this regard.  When you look all over the industrialized world, you see similar triple digit debt to GDP figures.

When this current debt super cycle ultimately ends, it is going to create economic pain on a scale that will be unlike anything that we have ever seen before.  The following comes from King World News…

That is the inevitable consequence of 100 years of credit expansion from virtually nothing to $250 trillion, plus global unfunded liabilities of roughly $500 trillion, plus derivatives of $1.5 quadrillion. This is a staggering total of $2.25 quadrillion. Therefore, the question is not what could go wrong since it is guaranteed that all these liabilities will implode at some point. And when they do, it will bring misery to the world of a magnitude that no one could ever imagine.

 

It is of course very difficult to forecast the end of a major cycle. As this is unlikely to be a mere 100-year cycle but possibly a 2000-year cycle. It is also impossible to forecast how long the decline will take. Will it be gradual like the Dark Ages, which took 500 years after the fall of the Roman Empire? Or will the fall be much faster this time due to the implosion of the biggest credit bubble in world history? The latter is more likely, especially since the bubble will become a lot bigger before it implodes.

And there are certainly lots of signs that a global slowdown is already beginning.  For example, global trade growth has fallen below 2 percent for only the third time since the year 2000.  On each of the other occasions, we witnessed a horrible recession take place.  For more signs that economic conditions are deteriorating, please see my previous article entitled “Recession 2017? Things Are Happening That Usually Never Happen Unless A New Recession Is Beginning“.

Of course much of the globe is already in the midst of a horrible economic crisis.  Brazil is in the middle of their worst recession ever, and people are literally starving in Venezuela.  A new round of debt problems has erupted in Europe, with Greece, Portugal and Italy being the latest flashpoints.

Just like in 2007, many are mocking the idea that the a major economic downturn is coming to the United States.  They believe that the ridiculously high stock market valuations of today can stick around indefinitely, and they are putting their faith in politicians.

But it won’t be too long before a new economic crisis begins in America and the kind of civil unrest that I portray in “The Beginning Of The End” erupts all across the country.

I just don’t understand why more people cannot see this.  Government debt, corporate debt and consumer debt have all been growing much, much faster than the overall economy.  Can someone please explain to me how that could possibly be sustainable in the long-term?

Someone that I considered to be a mentor but that has since passed away once said that things would seem like they would be getting better for a little while before the next crash comes.

And it turned out that he was precisely correct.  We are in a season of time when economic conditions have appeared to be getting a little bit better in the United States, and this has blinded so many people to the truth of what is about to happen to us.

via http://ift.tt/2mfTsR5 Tyler Durden