Category: zerohedge

 

After almost 10 years of unprecedented accommodative
monetary policy both in the US and abroad, the fixed-income markets are trading
at lofty levels never before seen in history. 
Let that sink in for a moment.  Never
before.  Not during world wars, not
during global depressions, never.

 

If you think this is a case of scare mongering or me doing
my best Chicken Little imitation, it’s not.  One third of global fixed-income bonds were recently trading
at a negative yields!  The global bond
market has never been in a more perilous position, and I am surprised that
there are so few publications ringing the alarm bells.  We are reminded on a daily basis of such
trivial risks that have no bearing on our everyday.  But it’s tough to understand why there is such
limited press highlighting such glaring risks.  This is especially alarming since we lived
through a fixed-income debacle in 2008 and know how devastating it was for
those unprepared.

 

The world is fully invested and on the same side of this one-trick
global bond market trade.  The hysterical
purchases that drove bond yields so low by governments, sovereign wealth funds,
banks, insurance companies and hedge funds seem to have abated and sales have just
begun.  Who becomes the marginal buyer of
global bonds at these inflated prices?  The
world has become accustomed to bond selloffs getting backstopped by global
central banks.  This parachute of low
funding and outright government bond purchases that investors had relied upon as
protection from losses is largely behind us.

 

The Fed has begun a rate rise cycle which will include
allowing purchased bonds to roll off and not be replaced as they mature.  It appears other central banks are planning on
winding down their quantitative easing programs as well.  Banks have largely finished hundreds of
billions in regulatory mandated bond purchases.  Sovereign wealth funds and pension funds are
selling bonds to dip into needed cash for spending.  Governments that have amassed trillions in
bond portfolios as a result of managed currency programs are shrinking these
portfolios as well. And hedge funds that have recently grown assets into the
hundreds of billions, investing in these overvalued bonds, trying to convert 1%
yields into 7% plus returns with the use of leverage, are starting to see
redemptions.  One could always hope for a
negative shock such as a recession to bring out the marginal buyers at these
prices.  But there are no signs of a
recession on the horizon nor would that be a guarantee of buyers entering the
market at these levels.

 

Limited global bond buyers outnumbered by new issue bond
sellers should lead to higher bond yields going forward.  If there was a trigger that encouraged the over
100 trillion bond market to start selling, prices could adjust lower
rapidly.  And there are many triggers on
the horizon. With housing prices increasing over 5% annually, health care
prices expected to rise steeply, global food costs rising at the fastest pace
in years and wage pressures just beginning to percolate, inflation is poised to
surprise to the upside. Fiscal spending (or at least promises of such from our
Presidential candidates) is expected to increase, leading to higher growth
rates and reducing the allure of bonds.  And
recently announced redemptions from large hedge funds who are typically
leveraged and long the bond market will lead to pressure on bond prices.  We will see if these hedge funds’
outperformance was the result of those magical algorithms or just good old-fashioned
leverage in a market that was trending straight up.  Most importantly, removal of accommodation
from monetary policy will deflate assets that are greatly inflated.

 

But how overvalued could bonds possibly be?  It’s been years since bonds have had any
losses and most traders and portfolio managers have never experienced a bear
market in bonds.  When any market moves
in only one direction for almost a decade to such lofty levels, there is not
much preparation for a market reversal.  Anyone
positioned for a market reversal over the past 10 years has long since been
blown out of their trades, fired or worse.  There is a reason why betting on normalized yields
in the bond market has been called the “widow maker” trade.  Today’s perception that bonds are a safe
investment is a mirage.  The bond market
has roughly doubled in size in the last 10 years and any selling could be
catastrophic.  Bond yields are much lower
and prices higher than during the onset of the 2008 bond market debacle.  This is a benchmark for overvalued bond prices
and what to expect from a resulting market correction.  If that’s not enough to get you to take pause,
let’s look at a real life example.  Longer
dated bond yields historically average around 2% to 3% above inflation.  Given today’s level of inflation, longer dated
bonds should yield closer to 5% instead of the current 2%.  If long bonds normalize up to that 5% yield
level any time soon, the resulting price drop would equate to market losses of
40% or more!

 

Now you know bond prices are in the outer stratosphere.  You’ve been warned of the risks if you have
been counting on a monetary policy parachute to give you a safe landing.  The central banks have started to take the
parachutes out of the planes.  Beware if
you plan on skydiving.

 

 

Michael Carino is the CEO of Greenwich Endeavors, a
financial service firm, and has been a fixed-income fund manager and owner for
more than 20 years.

via http://ift.tt/2jFmPah Greenwich Endeavors

The US dollar is having its worst start to a year in decades…

 

As the Trump Administration is breaking from a long-standing, bipartisan policy of supporting a strong dollar, the greenback has fallen against its peers by 2.7%, the worst start to a year since 1987, after Ronald Reagan engineered a decline in the dollar to combat a flood of Japanese imports.

Finally, remember, nothing lasts forever…

Source: The Burning Platform

As we noted previously, history did not end with the Cold War and, as Mark Twain put it, whilst history doesn’t repeat it often rhymes. As Alexander, Rome and Britain fell from their positions of absolute global dominance, so too has the US begun to slip. America’s global economic dominance has been declining since 1998, well before the Global Financial Crisis. A large part of this decline has actually had little to do with the actions of the US but rather with the unraveling of a century’s long economic anomaly. China has begun to return to the position in the global economy it occupied for millenia before the industrial revolution. Just as the dollar emerged to global reserve currency status as its economic might grew, so the chart below suggests the increasing push for de-dollarization across the 'rest of the isolated world' may be a smart bet…

 

The World Bank's former chief economist wants to replace the US dollar with a single global super-currency, saying it will create a more stable global financial system.

"The dominance of the greenback is the root cause of global financial and economic crises," Justin Yifu Lin told Bruegel, a Brussels-based policy-research think tank. "The solution to this is to replace the national currency with a global currency."

via http://ift.tt/2k14jwc Tyler Durden

Submitted by Raul Ilargi Meijer via The Automatic Earth blog,

Benoît Hamon won the run-off for the presidential nomination of the Socialist party in France last weekend. The party that still, lest we forget, runs the country; current president François Hollande is a Socialist, even if only in name, but he did win the previous election. Hamon ran on a platform of shortening the workweek from 35 to 32 hours, legalizing cannabis and ‘easing’ the country into a universal basic income of €750/month per capita. He’s way left of Hollande, who has a hilariously low approval rating of 4%.

Hamon doesn’t appear to have much chance of winning the presidency in the two voting rounds taking place on April 23 and May 7, but we all know how reliable election predictions are these days, and in that regard France is as volatile as the next country. With conservative runaway favorite François Fillon accused of having paid his wife $1 million for doing nothing and Marine Le Pen, already desperately short on funds, targeted by the EU over money, who knows what and who will decide the election? Hamon may simply be the only one left standing on the day after the vote.

I bring up Hamon, about whom I know very little, not least because he was more or less a late minute addition to the field that was supposed to have been an easy win for his former boss Manuel Valls, I bring up Hamon because he confirms something I’ve been talking about for a while. That is, the fact that ‘leftist France’ chooses to go even more left than expected, goes a way towards proving my ‘theory’ that voters in many if not most western countries will move away from their respective political centers, and towards extremes.

This is an inevitable consequence of traditional, less extreme, politicians and parties having all become clustered together in shapeless and colorless blobs in the center, both in the US and in most European countries, combined with the fact that all of their policies -especially economic ones- have spectacularly failed vast amounts of people (or voters, if you will).

The failure of their policies has been hidden from sight by interest rates squashed like bugs, ballooning central bank balance sheets, real estate bubbles, fabricated economic data, and fantasy stories in their media that seem(ed) to affirm the ‘recovery’ tales, but they all ‘forgot’ to -eventually- line up reality with the fantasies. They never made 99% of people actually more comfortable. The entire politics-economics-media deus ex machina has failed because it was/is based on lies and fake news, meant to hide economic reality (i.e. negative growth), and this will have grave consequences.

People have started noticing this despite the official and media-promoted data. And they’re not going to “un-notice”. Not only don’t people -once they find out- like having been lied to for years, they dislike worsening living conditions even more. And that’s all they get; the only people who get it better are the rich, because without that the machinery can’t continue pumping up the ‘official’ numbers.

And what do you get? People complain about Trump. And they focus on one of his -seemingly- crazy ideas: temporarily closing US borders to refugees from nations with large Muslim populations. Which is a fine thing to resist, because yes, it’s a pretty silly idea, but why haven’t they paid similar attention to how they’ve been lied to for years on both the economy and on Syria, on how Obama became the Drone King and how many innocent people lost their lives because of that?!

To how favorite all-American gal Hillary screwed up Northern Africa when she declared We Came We Saw He Died and the death of Libya’s Gaddafi, who gave his country the highest living standards in the region, free education and free health care, but was murdered by Hillary’s US troops, co-created the chaos that led to so many people wanting to flee their homelands in the first place?

Why is that? Why are there protests when people are halted at an American border crossing but not when American and British and French and Australian forces blow the very same people’s homes to smithereens? Could that have something to do with where the protesters get their information? With how much they know about what’s happening in the world before it reaches their doorsteps?

Yes, people are suffering, and it’s very unfair what’s happening to many caught in the Trump Ban, but does anyone really believe that that’s where it started, that this is the first time (or even a unique time) that protest is warranted, or more so? And if not, why is it happening? Because people only notice stuff when it hits them in the face, I would presume, but who among the protesters would volunteer to agree they live their lives with blinders on? Not many, I would venture. So why do we see what we do? Where were you when Obama ordered yet another child, a family, which hadn’t yet made it to a US airport but might as well have, to be collateral damage?

I get why you’re protesting the Trump ban, but I don’t get why that’s your prime focus. I am guessing that most of the protesters would not have voted Trump in the first place, and would have been much happier -to put it mildly- for Hillary to be president right now. But if you would have paid attention in history class, you would know that it was Hillary who brought the refugees to your welcome mats to begin with.

Take it a step further, like to the January 21 women’s march, and you would realize that the vast majority of the refugees would have much preferred to stay where they grew up, where the women in their families, their sisters and aunts and daughters used to live. Most of whom are gone now, they’re either dead or diaspora-ed to Jordan, Turkey, Alberta, Sweden, Greece. All on account of Obama and his crew. Who of course blamed it on Assad and Putin. “I killed 1000 children, but I had to because those guys are so dangerous….”

This generation of refugees, of the huddled masses that the Statue of Liberty is supposed to teach you about, didn’t come to America because it’s the promised land; they came because America turned their homeland into a giant pile of rubble surrounded by garbage heaps and minefields. I don’t know if you’ve ever seen pictures of Aleppo before it was destroyed, but I dare you to tell me there is even one existing American city today that’s more beautiful than Aleppo was before Americans and their allies reduced it to dust. Here you go. This is Aleppo before America got involved in Syria:

There’s very little left of that beautiful city, with its highly educated people and their lovely happy children. And none of that has anything at all to do with Donald Trump! I don’t want to give you pics of what Aleppo looks like now. I want you to remember how lovely it was before ‘we’ moved in, years go. Sure, what you hear and see in the west is that Assad and Putin are the bad guys in this story. But now that the US/EU supported ‘rebels’ are gone, dozens of schools are reopening, and medical centers, hospitals. Who are the bad guys now?

And yeah, Trump is an elephant, and elephants are always awkward and they’re messy and they tend to kick things over and when they make mistakes those tend to be huge, but how much valuable china does the US really have left anyway? Isn’t it all perhaps just a sliver off target, the demos, the outrage and indignation? Is the idea that your army can destroy people’s living environments with impunity without you protesting in anything approaching a serious way, and that then you get to demand, through protest, that those same people are allowed entry into your country? That’s way too late to do the right thing.

I started out making the point that as our politico-economic systems are failing, voters will move away from the center that devised and promoted those systems, and that this will happen in many countries. The US could have had Bernie Sanders as president, but the remaining powers in the center made that impossible. Likewise, many European countries will see a move towards either further left or further right.

Since the former is mostly dormant at best, while the latter has long been preparing for just such a moment, many nations will follow the American example and elect a right wing figurehead. This will cause a lot of chaos, but that’s not necessarily a bad thing. People need to wake up and become active. The recent US demonstrations may be a first sign of that, even though they look largely out of focus. More than anything else, people need a mirror, they need to acknowledge that because they’ve been in a state of mindless self-centered slumber for so long, they have work to do now.

And that work needs to consist of more than yelling at the top of your lungs that Trump and Le Pen and Wilders are such terribly bad people. For one thing because that will only help them, for another because they were not the people who put you to sleep or were supporting mindless slaughter in faraway nations or were making up ‘official’ numbers as your economies were dumped into handbaskets on their way to hell. So ask yourselves, why did you believe what Obama was saying, or Merkel, or Cameron, Sarkozy, Rutte, you name them, while you could have known they were just making it all up, if only you had paid attention?

Why? What happened? Why did the term ‘fake news’ only recently become a hot potato, even though you’ve been bombarded with fake and false news for years? Is it because you were/are so eager to believe that your economy is recovering that any evidence to the contrary didn’t stand a chance? If so, do realize that for many people that was not true; it’s why they voted for the people you now so despise. Is it perhaps also because you’re so eager to believe your ‘leaders’ do the right thing that you completely miss out on the fact that they’re not? And whose fault is that?

In yet another angle, people claim that the planet’s in great peril because Trump doesn’t ‘believe’ in climate change. But it’s not Trump’s who’s the danger when it comes to climate change, you are, because you’re foolish enough to believe that things like last year’s infinitely bally-hood Paris Agreement (CON21) will actually ‘save’ something. That belief is more dangerous than a flat-out denial, because it lulls people into sleep, while denial keeps them awake.

It’s the idea that there’s still time to rescue the planet that’s dangerous, because it’s the perfect excuse to keep on doing what you were doing without having to feel too much guilt or remorse. You’re not going to save a single species with your electric car or whatever next green fad there is, the only way to do that is through drastic changes to your society and your own behavior.

That’s not only true with respect to the climate, it’s just as valid with respect to the refugees on your doorstep. If you want to rescue them, and those who will come after them, the only thing that makes any difference is making sure the bombing stops, that the US and European war machines are silenced. If you don’t do that, none of these protests are of any use. So sure, yeah, by all means, protest, but make sure you protest the real issues, not just a symptom.

That doesn’t mean you should shut the door in the face of these frail forms fainting at the door, that’s just insane, but it does mean that after welcoming your guests, you will also have to make sure what brought them there must stop. If you stop killing and maiming these people, and help rebuild Aleppo and a thousand other places, they won’t need to come to your door anymore.

As for the political field, unrest will continue and grow because the end of economic growth means the end of centralization, and our entire world, politically, economically, what have you, is based on these two things. Today, unrest is the only growth industry left. And it’s not going away anytime soon. It’s a new day, a new dawn, it’s just that unfortunately this is not going to be a pretty one.

Still, none of it is unexpected. The Automatic Earth has been saying for years, and with us quite a few others, that this was and is inevitable. Of course there are those who say that we cried wolf, but we’ll take that risk any day. Saw a nice very short video of Mike Maloney saying in 2011 that Obama would have to double US debt between 2008 and 2016 just to keep the entire system from starting to collapse, running to stand still, Alice, Red Queen and all. And guess what?

There’s the recovery as it’s been sold to you. It’s all been borrowed, to the last penny. Will Donald Trump double US debt once again? Will the EU countries do the same? How about Japan and China? And to think that federal debt isn’t even the worst threat, personal debt is, and so many of us carry so much of that, and try to pass off our mortgaged homes as assets, not debt. An increasingly desperate game on all fronts.

via http://ift.tt/2k0YP4A Tyler Durden

America, meet The Gender Recognition Act of 2017, a.k.a SB 179, a new little piece of California legislation, drafted by two Democratic State Senators, that corrects the widely accepted, if quite oppressive and ancient, notion that only two genders exist for the human race.  How have we lived this ridiculous lie for so long?  

The bill, drafted by Senators Toni Atkins (D-San Diego) and Scott Wiener (D-San Francisco), is specifically intended to create a third gender, referred to as “nonbinary”, which will be officially recognized on state-issued ID cards as well as birth certificates and court documents. 

With help from Equality California and the Transgender Law Center, Senators Toni G. Atkins (D-San Diego) and Scott Wiener (D-San Francisco) today announced the introduction of legislation, SB 179 – The Gender Recognition Act of 2017, that will enable more transgender, intersex and nonbinary people to obtain state-issued identity documents that accurately reflect their gender.

 

The bill accomplishes this by creating a third, nonbinary gender marker on California birth certificates, driver’s licenses, identity cards and gender-change court orders. The bill also streamlines the processes for Californians to apply to the state for a change in gender on these identifying documents.

Meanwhile, per a statement released on Senator Atkins’ website, the executive director of Equality California said that “It is up to an individual – not a judge or even a doctor – to define a person’s gender identity”…yes, given that there is absolutely no concrete, tangible way to determine a person’s gender, we agree it must be a matter of opinion and left to the sole discretion of each individual. 

“Our society is becoming more enlightened every day about gender identity,” Senator Atkins said. “It’s time for our state to make it easier for transgender Californians and those who don’t conform to traditional notions of gender to have state-issued identification documents that reflect who they truly are. This bill will help them avoid the discrimination and harassment that too many of these residents face in their daily lives.”

 

Senator Wiener said, “Our trans brothers and sisters are under attack in far too many parts of this country and this world. Now, more than ever, California must lead on trans inclusion and ensure that our entire community can live with dignity and respect. This legislation is an overdue step forward.”

 

Kris Hayashi, executive director of the Transgender Law Center, added, “Whether going through airport security, voting, or applying for a bank account, everyone needs an accurate ID to safely navigate life. Yet outdated laws and other barriers have blocked almost 70 percent of transgender people from updating all of their identity documents, and one-third of transgender people have been harassed, assaulted, or turned away when seeking basic services. SB 179 will help California lead the way in reducing these barriers and help ensure that everyone can be legally recognized for who they are and can move safely through the world.”

 

Rick Zbur, executive director of Equality California, added, “This bill honors an individual’s most basic right: self-identification. It is up to an individual – not a judge or even a doctor – to define a person’s gender identity. This groundbreaking legislation will ensure that California supports and values its transgender and gender non-conforming residents and fully includes them in the fabric of our society.”

 

And some more for Senator Atkins’ website:

Current law creates onerous and unnecessary barriers for people who wish to apply for a change in gender on their state-issued identity documents. One of the most significant of these barriers is the requirement of a physician’s sworn statement certifying the extent of medical treatment received by someone during their gender transition. Additionally, a person seeking a gender-change or name-change court order must appear in court even if nobody has filed objections to their petition. Finally, there are no provisions in state law that allow nonbinary people – those who self-identify as neither male nor female – to choose a gender marker on state documents that reflects their gender identity.

 

Senators Atkins and Wiener’s legislation would:

 

• remove the requirement to obtain a physician’s sworn statement;
• ensure that those filing petitions for gender-change court orders, as well as corresponding name-change court orders, need not appear in court for a hearing unless someone has filed timely objections to their petitions;
• create a process by which individuals younger than 18 years old can apply for a change in gender on their birth certificate; and
• create a third gender marker for nonbinary individuals seeking to amend their gender on birth certificates, driver’s licenses and state identification cards, and in gender change court orders.

We simply can’t wait for this legislation to take effect so that the taxpayers of California can spend millions of dollars changing DMV forms that will finally allow the 0.3% of the population impacted to publicly assert their chosen gender identity…frankly we’re disappointed and ashamed that a progressive state like California allowed such atrocities against our “gender fluid” citizens to persist for so long.

Here is the full text of SB 179 for your reading pleasure:

via http://ift.tt/2k13TWL Tyler Durden

Via The Economic Innovation Group,

However, the headwinds are strong. Policymakers must prepare a multifaceted offensive at every level of government.

Economic policy should be viewed through a new lens—with a focus on addressing geographic inequality and business creation first and foremost.

The retreat of dynamism is a one of the most urgent and fundamental economic challenges facing the new Congress and new Administration.

No one silver bullet can solve these problems—indeed we still know too little about their underlying causes. One thing is certain, though: If we can make the economy work again for entrepreneurs in a greater cross-section of America, we can start to rebuild the broken pathways to the American dream.

*  *  *

Full Report Below:

via http://ift.tt/2jF3OEN Tyler Durden

Having decided to actively increase its risk exposure over the past few years, including venturing into high beta stocks and junk bonds – a gamble that has lead to a big jump in quarterly volatility not to mention significant downside risk should global markets suffer a crash – Japan’s Government Pension Investment Fund, or GPIF, the world’s largest pension fund, has decided to invest in US infrastructure projects next.

According to Japan’s Nikkei, infrastructure investments in the U.S. by Japan’s GPIF will feature heavily in the economic cooperation package to be discussed at next week’s summit in Washington between the two countries’ leaders. The stated goal is to create “hundreds of thousands of American jobs”, in keeping with U.S. President Donald Trump’s agenda, and deepen ties between the two countries. The unstated goal is to avoid Trump lashing out at Japan as a currency manipulator, and putting in peril Japan’s QQE “with curve control” experiment, which is the bedrock of all Abenomics (as further expained in the following Nikkei piece). 

Japan has grown nervous that after Mexico, China and Germany, it may be next nation to find itself in Trump’s spotlight, something Trump hinted at yesterday during his meeting with pharma CEOs when he said that “other countries take advantage of America by devaluation,” and then directly named China and Japan as “planning money markets,” presumably implying manipulation. 

As such, Japan’s prime minister may be simply offering up billions in pension fund capital as a source of capital for the upcoming Trump infrastructure projects to placate the president and avoid a far more dire outcome, should Trump launch currency or trade war with Japan. Whatever the logic behind Abe’s thinking, new cabinet-level talks discussing trade policies and economic cooperation agreements are also on the table.

Japan’s contingent headed to the US would likely include Finance Minister Taro Aso, Economic Minister Hiroshige Seko, and Foreign Minister Fumio Kishida, the Nikkei reported. The U.S. is expected to send incoming Commerce Secretary Wilbur Ross and incoming U.S. Trade Representative Robert Lighthizer to that meeting. Japanese Prime Minister Shinzo Abe and Trump will aim for agreement on that framework during their Feb. 10 meeting.

“I wish to discuss [Japanese] contributions toward improved productivity and competitiveness in the entire U.S. industrial sector, or a large framework that includes aid for infrastructure development,” Abe told members of the lower house Wednesday. His government has started to lay out a comprehensive initiative addressing job growth.

The draft proposal will feature infrastructure investments in the U.S. by Japan, joint robotics and artificial intelligence research by the two sides, and countermeasures against cyberattacks.

How will the Japanese megafund alllocate pension capital? According to the Nikkei, the GPIF will purchase debt – using the funds of retired Japanese citizens – issued by American corporations to finance infrastructure projects. Up to 5% of the roughly 130 trillion yen ($1.14 trillion) in assets controlled by the megafund can go toward overseas infrastructure projects. Currently, only tens of billions of yen are invested in that asset class, leaving room for expansion. Additionally, long-term financing for high-speed rail projects in Texas and California would be provided through such avenues as the Japan Bank for International Cooperation.

While we doubt Japanese pensioners are aware that the returns on public infrastrcuture are some of the lowest in the world, if not outright negative, we are confident they will learn soon enough, although since the full IRR will become evident only over a period of years, they may have bigger concerns should the Nikkei and/or global stock markets, where the GPIF is now heavily invested, crash first.

via http://ift.tt/2kjcl25 Tyler Durden

Submitted by Philip Carl Salzman via The Gatestone Institute,

• Diversity becomes a moral end in itself. If all variations of human beings are not present at an event or in an organization, it is seen as prejudiced and discriminating. But this does not apply to members of the majority, who are increasingly not welcome.
• The University of Pennsylvania removed a portrait of Shakespeare, on the grounds that Shakespeare is not sufficiently diverse, and replaced it with a portrait of the black lesbian poet, Audre Lorde.
• As capitalism is recognized as a cause of inequality, and thus oppression, it must be replaced. These days, progressives do not usually specify what capitalism is to be replaced by, but presumably they are impressed with [irony alert] the great benefits socialism brought to the people of the USSR, Mao's China, Cambodia under the Khmer Rouge, North Korea, and Cuba.
• Hurt feelings are the "social justice" criteria for what is and what is not allowed. You may not say anything that would hurt someone's feelings; if you do, you must be punished.
• Finally, diversity of opinion in the social justice university is forbidden: opposition to social justice is never reasonable opinion, but evil. Disagreement with the principles of social justice identifies such critics as sexist, racist, homo-lesbo-transphobes, xenophobes, and fascists.

Universities used to be fonts of knowledge, charged with disseminating the known and seeking new knowledge. But progressives have brought great progress to the university: progressives know all the answers, and that the problem is not to understand the world, but to change it.

Welcome to the "social justice" university. Its orientation is expressed by the School of Social Work, at Ryerson University in Toronto:

School of Social Work is a leader in critical education, research and practice with culturally and socially diverse students and communities in the advancement of anti-oppression/anti-racism, anti-Black racism, anti- colonialism/ decolonization, Aboriginal reconciliation, feminism, anti-capitalism, queer and trans liberation struggles, issues in disability and Madness, among other social justice struggles.

Many universities are not as candid as Ryerson, but often their positions are much the same. Many have established "equity and inclusiveness" committees to oversee "just practice," to disseminate "correct" views through literature, posters, and re-education workshops, in some cases mandatory. They also sanction faculty members who express unacceptable views. Schools of education ensure that their graduates will be inculcating their school pupils in the principles of "social justice," and in identifying the deplorable "multiphobes" in their families and communities. American schoolchildren have been taught by teachers determined to discredit America, that slavery was an American invention and existed exclusively in America — a staggeringly counter-factual account.

What do progressives intend under the label of "social justice"? What theories and policies have they made the central task of the university to advance?

The first goal to be advanced is equality, by which they mean equality of result, as opposed to equality of opportunity — which is often inadequate and needs to be addressed. Thus, to advance economic equality, progressives advocate redistribution of wealth, taking money from those who have it and giving it to preferred others. ("The problem with socialism," as the late British Prime Minister Margaret Thatcher pointed out, "is that sooner or later you run out of other people's money.")

Progressives also recognize that equality of result contradicts individual freedom, and that individual freedom will have to be suppressed supposedly for the collective good. Coercion is necessary to enforce social justice goals. A social justice friend recently argued that cars should be replaced by public transport, and that people should live in central cities rather than suburbs. When it was pointed out that housing and transport choices indicated North Americans seem to have a strong preference for suburbs, and that they prefer driving cars to taking public transport, he replied that they will have to be forced to live in cities and use public transport. This is an actual the plan of the United Nations, known as Agenda 21.

Given the necessity of coercion to get people to do the "right" thing, progressives favour a strong central government to direct citizens' — or subjects' — lives.

Second, equality among individuals is "insufficient," and must be complemented by collective rights based on "category membership". Each category — of gender, sexual preference, national origin, culture, race, religion, and so on must be considered equal and receive equal benefits. All societal roles should therefore have an equal number of each category, either at the same time or in rotation. Equality of result also mandates that members of each category must have the same position and same benefits as all others: an equal number of men and women in government offices and in business administration. So too with members of different races, religions, sexual preferences, and so on. To balance ethnic representation in professions, Jews who want to become dentists must be forced to become police officers, while Irish men and women who wish to become police officers, must be forced to become dentists. Diversity becomes a moral end in itself.

If all variations of human beings are not present at an event or in an organization, it is seen as prejudiced and discriminating. But this does not apply to members of the majority, who are increasingly not welcome; only "diverse" members of minorities are now welcome. This applies even to history. The University of Pennsylvania English Department removed a portrait of Shakespeare, on the grounds that Shakespeare is not sufficiently diverse, and replaced it with a portrait of the black lesbian poet, Audre Lorde.

Third, all victims of inequality must unite under the principle of "intersectionality," to oppose their oppressors. Since capitalism is recognized as a cause of inequality, and thus oppression, it must be opposed and replaced. These days, progressives do not usually specify what capitalism is to be replaced by, but presumably they are impressed with [irony alert] the great benefits socialism brought to the people of the USSR, Mao's China, Cambodia under the Khmer Rouge, North Korea, and Cuba. Not only are these outstanding examples of "social justice" actually versions of "state-capitalism" where the leaders were "more equal than others," but for the "others", they succeeded in avoiding the corrupting prosperity of capitalism, the selfish freedom for individuals, and the anti-social inequality of differences. And [irony alert] abolishing capitalism would be pain-free; supposedly no one was "hurt" in the socialist states of the 20^th century. Or at the very least, everyone, except for the dear leaders, were hurt equally, which presumably made being hurt all right.

So, too, must imperialism and colonialism be abolished, which are recognized by progressives as unique to the West — never, of course, to the conquests by Islamic empires, for example, of Turkey, Greece, North Africa, Eastern Europe, as well as parts of Portugal and Spain. Under the label of "postcolonialism," Western imperialism is blamed for all of the ills in the world, a world which, prior to Western intrusion, was ostensibly characterized by peace, prosperity and brotherhood. Thus, the imperialist West is evil, and the victimized rest, the South, the People of Colour, are "Good".

No notice is also taken by progressives of empires of the past — Phoenician, Greek, Roman, Arab, Mongol, Turkish, Russian, to name a few — or of the present, among them, the Chinese, Iranian and Turkish empires, all of which have shaped our world beyond the relatively short-lived British, French, Dutch, Belgian, German, and Italian empires. No, social justice warriors can imagine only an uninformed, simplistic good and evil. Evidently, no one teaches history anymore, so everyone, such as UNESCO, can now make it up to suit his view.

Fourth, each culture must be viewed through the lens of cultural, ethical, and total relativism between opinion and fact. Each culture must therefore be considered as valuable as any other, ostensibly including ISIS and Boko Haram, and therefore have equal representation in every society. This "just" multiculturalism accepts all customs and practices, and installs all languages as official languages. Although Canada has been lauded as an exemplar of multiculturalism, which has been adopted as an official policy of the Federal Government, Canada in fact falls seriously short of ideal "cultural justice." One reason is that Canadian multiculturalism exists within a bilingual state, with only French and English having official status. The other reason is that Canadian French and English culture make up the cultural mainstream, and a large majority of Canadians want immigrants and citizens with other cultural backgrounds to adapt to the Canadian mainstream.

Canadian cultural relativism would have to be seen by cultural justice warriors as weak and flawed.

Multiculturalism, further, requires respect for other cultures, shown, for example, by not imitating another culture in any way, and by not borrowing from it. Unauthorized imitation, such as wearing a Halloween costume representing another culture, such as an American wearing a sombrero, or participating in activities, such as Indian yoga or Asian martial arts, is called "cultural appropriation," and is banned by social justice warriors. This piece of social engineering apparently exists because the feelings of people of other cultures might be hurt, or they might feel ridiculed or demeaned.

Hurt feelings are the social justice criteria for what is and what is not allowed. You may not say anything that would hurt someone's feelings, and, if you do, you must be punished. Here is an illustration, reported by Margaret Wente in the Globe and Mail, from Queen's University in Kingston, Ontario:

At Queen's, a good-natured off-campus costume party blew up into a crisis over racism. Queen's principal Daniel Woolf denounced the event on his blog as "the unacceptable misappropriation and stereotyping of numerous cultures," and solemnly vowed yet again to improve diversity and inclusion on campus. In other news from Queen's, the head of a student theatre group was forced to grovel after announcing a plan to cast a white female as the lead in Othello. "There is absolutely no excuse for making a casting decision that was oppressive and caused people of colour to feel as though they were invalid," she apologized. The production was cancelled.

A further corollary of multiculturalism is that borders, blocking the inflow of worthy immigrants, should be abolished, and a full open-borders policy should be established. All immigrants are seen as benign, and the possibility that some might be threats to the receiving population and its society is dismissed out of hand. Opposition to such humanitarian uprightness could only exist if its critics were supposedly xenophobes and racists.

Finally, diversity of opinion in the social justice university is forbidden: opposition to social justice is never a reasonable opinion, but evil. Disagreement with the principles of social justice identifies such critics as sexist, racist, homo-lesbo-transphobes, xenophobes, and fascists.

In our universities, social justice is reproduced through a variety of techniques.

• One is special oversight committees, usually called "Equity and Inclusiveness Committees", which police the socialization and speech of new students, and the speech and actions of academic and other staff.
• A second technique is that university administrators, no less than the cutting-edge justice-warrior professors of the social sciences and humanities, aim to improve, implement and defend social justice policies. Dissidents will find no refuge or sanctuary in university administrations; quite the contrary.
• A third techniques is in classes, where students are indoctrinated with "Social Justice Truth," and those who resist are penalized by low grades. Social justice professors must punish students who refuse to learn the Social Justice Truth. On the other hand, students of "victim categories" must be "encouraged" with good grades. I have had the unpleasant experience of being pressured by colleagues to give a good grade to a weak minority student.
• A fourth technique is the well-known preference for admitting weaker students of victim categories and turning away more capable students of other categories. Thus, in the University of California system, applicants of Hispanic background with weak records are admitted, and applicants of Asian ethnicity with strong academic records are rejected — "category equality" and preferential treatment with a vengeance.
• The fifth technique is "Social Justice Reproduction": hiring academic staff under close scrutiny to guarantee that they have the correct social justice orientation. Heavens, would you want to put students and thus the future into the hands of "multiphobes" and fascists?! Selection for social justice is the only just path.

The illiberal social justice movement strikes at several important liberal values: First, it undermines individual autonomy and freedom by reducing individuals to being a member of one or another ethnic, racial, gender, sexual, national, or religious "category." Second, it strives to undermine individual autonomy and freedom by restricting outcomes of activity through imposing arbitrary criteria of equality of result. Third, it undermines basic human rights, such as freedom of speech, by forbidding any speech that "offends" anyone. Fourth, it undermines the right to assemble peaceably, because social justice warriors try to shut down any assembly where incorrect views might be expressed. Fifth, it undermines understanding by reducing all people to victims and oppressors, good versus bad, a gross oversimplification of the complexities of history and human life.

For progressives, the social justice movement is progress on the move; to others, it seems increasingly a movement of intolerant authoritarianism. Its main victim, so far, is the idea of the open-minded, inquiring, liberal university.

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By EconMatters

We discuss the weak price action of the market, and we think the market is about to roll over and test the 2180-2200 area, we want to stay short into these levels, and see how stocks and the financial markets react to these levels from a stops evaluation basis. But this is our initial target, and markets oftentimes overshoot in both directions at key technical levels. Therefore we want to let the market tell us when to take profits on these trades.

But there has been a massive run-up since the Trump election, most of the big companies have reported earnings and frankly the run-up into earning`s doesn`t justify these moves in the market for most stocks. There are a lot of “Dogshit” companies that have benefited or were moved up into this rally that don`t belong at these levels, and investors don`t want to hold these stocks at these price levels in their portfolios.

And we haven`t gotten to the fact that the real market downside risk events are coming down the pike in the next couple of months, call it March with the Debt Ceiling Debate, and European Election News Cycle, not to mention Donald Trump has managed to single handedly alienate half the American and Global population in just his first two weeks in office, just wait until he tries the border tax, and starts a global trade war.

Frankly, this is a pretty easy short here in my opinion, and a rather conservative retest area relative to where markets could fall to under multiple Trump scenarios that potentially could play out this year. This is just the low hanging fruit in our opinion. In short, the Market appears tired, and about to roll over to the downside over the next couple of weeks.

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The specter of global stagflation is looming ever larger as inflation across the world is beating analysts’ forecasts (even before the potential effect from Donald Trump’s economic policies) but economic growth expectations remain stagnant.

As Bloomberg notes, the global Citi Inflation Surprise Index, which measures price surprises relative to market expectations, is at the highest in more than five years.

The reading turned positive in December — meaning inflation data were higher than expected — for the first time since 2012.

However, in its Keynesian-Krushing way, economic growth expectations are not tracking higher – flashing red warnings signs for global stagflation.

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Submitted by Nick Giambruno via InternationalMan.com,

I recently sat down with my friend Jason Burack from Wall St for Main St.

Jason and I had an in-depth discussion on the decline of globalism, the War on Cash, and more.

I think you’ll enjoy our conversation.

*  *  *

Jason Burack: It seems that globalism may be on the retreat. What’s your opinion about that, in light of Brexit, Donald Trump winning, and the Italian referendum failing?

Nick Giambruno: I think you’re right, Jason. Right now globalism is on the decline. But let’s define “globalism” before I explain why. This word gets thrown around a lot. But most people don’t really know what it means.

It’s very simple. Globalism is the centralization of power into a couple of global institutions: the EU, the United Nations, the IMF, the World Bank, NAFTA, NATO, and so on. It’s really just a polite way of describing world government, or what George H.W. Bush termed the New World Order.

I think globalism and the centralization of power is always a bad thing. People who value individual freedom and economic freedom… really, freedom in general, should oppose it.

It’s an interesting moment in history. Those three things you just mentioned—Brexit, Trump, and the failure of the Italian referendum—are clear signs that globalism is losing steam.

Whether it’s a sort of one step back, two steps forward thing or the ideology of globalism is really on its way out remains to be seen.

Jason: Look at what’s going on with Brexit. The elites in London and Brussels are still fighting it. You had your boots on the ground in Italy. How angry were the people you talked to there about the referendum? Are they actually serious about leaving the EU?

Nick Giambruno: Well, here’s the thing. Most Italians didn’t know what the referendum was about. They just knew a “Yes” vote was a vote of confidence in Matteo Renzi’s pro-EU, pro-globalist government.

In short, the referendum was about taking power away from Italy’s regional and city governments and concentrating it more in the country’s central government. So it was worth opposing on that basis alone.

Most Italians didn’t understand the complex and arcane constitutional changes written into the referendum. So it took on a life of its own when Matteo Renzi promised to resign if it failed. That’s a vote everyone can understand.

When Renzi made that promise, he thought it was a safe bet. It’s similar to what happened to David Cameron with the Brexit vote.

But after I spent a few weeks in Italy—I’m also an Italian citizen—it was clear the referendum was no slam dunk. That’s why I predicted it would fail, and that Renzi would resign, months in advance.

Jason: So, what happens next, now that Renzi’s government has collapsed?

Nick Giambruno: There’s a rising populist party in Italy called the Five Star Movement. It’s actually led by a comedian. The party basically started out as a joke a few years ago.

Italians are so frustrated with so-called “mainstream” political parties that they’ve deserted them en masse for the Five Star Movement and other anti-establishment populist parties like the Lega Nord. The Five Star Movement is basically leading the polls as the most popular party in Italy.

All of Italy’s populist parties want a referendum on ditching the euro for Italy’s old currency, the lira. I think it would pass.

Italy hasn’t had any real economic growth since it joined the euro in 1999. That’s pretty profound. The Italian economy is in the same place it was 17 years ago. A lot of that is because the euro makes Italy uncompetitive with countries like Germany.

The next Italian government could be a coalition of anti-EU populist parties. If that happens, there’s an excellent chance Italy could leave the euro.

Keep in mind that Italy is a core member of the euro. If it leaves, France would probably leave, too. And if that happens, the euro is finished.

Jason: Without the euro, what’s left holding the EU together?

Nick Giambruno: Almost nothing. The euro is the main glue. Without it, the whole EU could unravel.

We’re still early in the process. But it doesn’t look good for the globalists and the Eurocrats. I think historians will look back at the failure of the December 4 Italian referendum as a crucial tipping point.

With globalism failing, I’m not sure what happens next. No one does.

We could see a rise of nationalism, which wouldn’t be a good thing. Or political power could diffuse even further, which would be a better outcome. Decentralization is good for individual and economic freedom.

So, instead of a rise of nationalism—which would strengthen the existing nation-states—European countries could split apart. Italy, for example, has only been a “country” since the mid-1800s. There are a number of serious secessionist movements in Italy and other European countries. I think there’s a very good chance some European nation-states will break apart—not just in our lifetimes, but in the intermediate future.

Jason: If Italy returns to the Italian lira, do you think it would prevent bailouts of the troubled Italian banks?

Nick Giambruno: The Italian banking system is a mile-high house of cards that’s getting wobblier by the day. As I mentioned, the Italian economy has stagnated for years. It hasn’t really grown since it joined the euro. This has translated into big problems for Italy’s banking system.

Italian banks have made hundreds of billions of dollars’ worth of loans to Italian individuals and businesses—loans that have soured along with the economy. They’re like an insatiable black hole that’s swallowing all the capital in Italy’s banking system.

Returning to the lira wouldn’t herald an era of sound economics. It just means the Italian government could recapitalize the banking system by turning on the printing press. It can’t do that with the euro.

On a somewhat related note, this example relates to the seemingly eternal inflation/deflation debate. I think it shows that ultimately, in a fiat money system where the government can create as many new currency units as it wants, deflation will always lose out to inflation.

Things are very different than they were in the 1930s. Back then, the last remnants of the gold standard meant most governments couldn’t print money to bail out failing banks. This limited their ability to create new currency units. Of course, that’s not the case today.

It’s completely predictable what any government with its back against the wall will do. They always choose the easy option, the option that preserves their own power… money printing on a massive scale.

That’s why inflation always wins out in the end.

Jason: That brings me to my next point. It seems like the elites are really pushing for a cashless society. Do you think Donald Trump is able to or would even want to stop this?

Nick Giambruno: I think the War on Cash is directly related to the world’s unsound banking systems. Thanks to the magic—or more accurately, institutionalized fraud—of fractional reserve banking, most banks only keep a small fraction of their depositors’ money on hand. It’s a very unstable, shaky situation.

One of the biggest mistakes the average person makes is thinking the money he puts in his bank account is his. It’s not.

Once you deposit money in the bank, it’s no longer your property. It belongs to the bank. What you own is a promise from the bank to repay you. Technically, you’re an unsecured creditor. That means you’re on the bottom of the totem pole if the bank goes bust. And you’re very likely to get burned if the bank gets in trouble.

Money in a bank is a very different beast than cash stuffed under your mattress. Yet 99.9% of people conflate the two.

Many people think the FDIC or some government safety net will rescue them if and when their bank fails. But the FDIC has only a couple of pennies for every dollar it supposedly insures. It wouldn’t take much to wipe out all of their reserves. So it’s really a false sense of security.

The average person is not even dimly aware of the enormous risks inherent in the banking system.

Jason: How does this all relate to the War on Cash?

Nick Giambruno: The War on Cash is a prop. It forces people out of cash and into banks. So it’s no surprise the war is ramping up as banking systems deteriorate.

Then you have what Nassim Taleb would call the “Intellectual Yet Idiot” from Harvard—people like Ken Rogoff and Larry Summers who’ve made a cashless society their mission. And it all starts with eliminating the $100 bill.

These people get prominent space in the mainstream financial media. They create an echo chamber of calls for a cashless society. It’s creepy and totalitarian. I mean, what kind of a person wakes up in the morning wanting to do things that would extinguish many of our remaining liberties?

Privacy is a fundamental human right. It's necessary to protect human dignity, which is essential to a free society. But unfortunately, a lot of people have forgotten that.

Also, in a cashless society, the government can concoct an unlimited number of new ways to confiscate your wealth.

The War on Cash is a mortal threat to individual and economic liberty. I think its advocates are clearly sociopaths and enemies of the common man. Unfortunately, I don’t see the war slowing down. I see it heating up.

Just look at what happened in India recently. On the day of the US election—when the whole world was distracted—the Indian government ambushed its citizens. Instantly, and without warning, it declared certain high-value currency notes invalid.

They said, “Oh, well, tax evaders, drug dealers, and terrorists use cash so we have to get rid of it or make it harder to use.”

It’s completely ridiculous. Anybody who can think critically and independently can see right through this. It’s simply a clumsily executed power grab. It’s done nothing but create chaos and harm the Indian economy.

Yet, when I read about it in the mainstream financial media, I often come across articles praising the Indian government for its bold reforms. It’s quite strange, like we’re living in a bizarro world.

Instead of resisting, the Indian people sheepishly accepted their government’s blatant power grab. This will likely embolden other governments… and the Intellectual Yet Idiot class, of course.

It means we should expect the War on Cash to accelerate in 2017. I haven’t seen any evidence suggesting Trump would reverse any of this.

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