Category: zerohedge

Submitted by Michael Shedlock via MishTalk.com,

As we head into the final stages of the Brexit debate, it would be wise to revisit prime minister David Cameron’s pledges with UK citizens regarding EU rules and what he actually delivered.

David Cameron February 18, 2016: “I will be battling for Britain. If we can get a good deal I will take that deal but I will not take a deal that does not meet what we need.”

Now let’s consider the Telegraph article EU deal: What David Cameron Asked For… and What He Actually Got

What follows are comments from Telegraph writer Peter Foster interspersed with my own thoughts.

Cameron’s Pledge on Tax Credits, Benefits, Brake: “We will insist that EU migrants who want to claim tax credits and child benefit must live here and contribute to our country for a minimum of four years.” – Conservative Party Manifesto 2015

What Cameron Delivered: A mechanism to “limit the access of union workers newly entering its labour market to in-work benefits for a total period of up to four years from the commencement of employment” if the UK, or any other member state, can show that EU migrants are “putting an excessive pressure on the proper functioning of its public services”.

No details are provided on what “excessive pressure” means. Control of the brake is firmly in the hands of the Commission. Moreover, though deal only fully denies in-work benefits for one year, not four and the benefits changes may leave the UK vulnerable to a challenge in the European Courts.

Mish Score: F.

The four-year brake will be available to Britain for “a period of 7 years”. After that, there is no brake, and there is no negotiation. In 7 years the UK will be bound by EU rules no matter how stupid they are. Between now and seven years from now European Commission is in control of the Brake.

Telegraph writer Peter Foster called this “Cameron’s trophy achievement”. I call it a joke.

Cameron’s Pledge on Bailouts: A mechanism to ensure that “Britain can’t be discriminated against because it’s not part of the euro, can’t pick up the bill for eurozone bail-outs, crucially can’t have imposed on it changes the eurozone want to make without our consent.” – George Osborne, the Chancellor, to BBC Newsnight January 14 2016

What Cameron Delivered: A pledge that the UK will not be on the hook for future bail-outs of eurozone states – specifically, crisis measures to shore up the euro area “will not entail budgetary responsibility for member states whose currency is not the euro”. The is also a promise of “reimbursement” if a eurozone state rescue-measure calls on general EU funds. (p4 of draft agreement)

A statement noting that any member state, including the UK, can demand that any issue pertaining to the eurozone may be discussed in the European Council, which means all 28 member states. However the clause notes that such a request cannot “amount to allowing one or more member states to veto the effective management of the banking union or the future integration of the euro area” which begs the question over how ‘safe’ Mr Osborne’s safeguard really makes non-eurozone states.

Mish Score: F

All Cameron got was a pledge. There were no treaty changes and the UK explicitly does not get a veto.

It is laughable to point to the right to discuss matters with the European Council anything but a slap in the face to Cameron. Yet that is what Cameron accepted.

Foster says this a win for Cameron on the basis of a promise to incorporate changes into the treaty when it is next opened.

Well what if they aren’t? Anyone who would accept a verbal pledge like that, when every EU member country has to ratify treaty changes is a complete fool.

Cameron’s Pledge: Working Time Directive – EU regulations

What Cameron Delivered: “Nothing:. That is exactly the word Foster used.

Mish Score: F

Cameron’s Pledge to Reduce EU Waste: Reduce EU Waste and cut red tape

What Cameron Delivered: A pledge by the European Commission to continue its current work cutting red tape.

Mish Score: F

Cameron’s Pledge on Working Time Directive: Working Time Directive – EU regulations “If an EU migrant’s child is living abroad, then they should receive no child benefit, no matter how long they have worked in the UK and no matter how much tax they have paid.” – Conservative Party Manifesto 2015

What Cameron Delivered: “This was one of the hardest-fought parts of the negotiation is where Mr Cameron appears to have given the most ground in order to win his headline “seven years” deal on his so-called “benefits brake. The text now says that indexation of child benefit should “only apply to new claims” when UK negotiators had wanted all EU migrant children receiving child benefit in their home countries to go onto the new rates immediately.
Instead, there will now be a four-year transition period with the new, lower rates not kicking in until January 1 2020. While Downing Street will claim this as a victory, critics will point out this is a very long way from the manifesto pledge.”

Mish Score: D-
Instead of totally caving in, Cameron got something that pertains to new claims, But it comes at the expense of “win” on seven year deal that everyone will regret in year eight.

Cameron’s Pledge on Red Card for Unwanted Rules: Red card for national parliaments. “We want national parliaments to be able to work together to block unwanted European legislation.” – Conservative Party Manifesto 2015

What Cameron Delivered: “An agreement that if, proportionately speaking, 55 per cent of national EU parliaments object to a piece of EU legislation “within 12 weeks” the Council Presidency will hold a “comprehensive discussion” on the objections raised and “discontinue the consideration of the draft legislative… unless the draft is amended to accommodate the concerns expressed in the reasoned opinions”

Mish Score: C
Foster labeled this a “win”. Realistically speaking, however, legislation that meets the disapproval of 55% of EU national parliaments is not likely to pass in the first place.

Cameron’s Pledge on Ever Closer Union: “We want an end to our commitment to an ‘ever closer union’, as enshrined in the treaty to which every EU country has to sign up.” – Conservative Party Manifesto 2015

What Cameron Delivered: A re-statement of a EU heads of government decision from 2014 that has already clarified that the phrase “ever closer union” does “not compel all member states to aim for a common destination”. The Tusk text says (p10) specifically: “It is recognised that the United Kingdom, in the light of the specific situation it has under the treaties, is not committed to further political integration into the European Union.” It also promises to incorporate this in the EU treaties next time they are opened.

Mish Score: D

I reluctantly give this a D. All we have is a pledge. Yet, there is nothing that can force the UK to adopt the Euro. However, the UK will be forced to integrate further into EU rules an regulations.

Cameron’s Pledge on Multi-Currency Union: “That the EU should formally recognise that it is a ‘multi-currency union’and that all members must not inevitably join the euro.”

What Cameron Delivered: An apparent recognition, in writing, that while the union’s objective is to establish “an economic and monetary union whose currency is the euro” it is also stated that “not all member states have the euro as their currency”.

Mish Score: D
Nothing can force the UK to join the Eurozone, but pressure will be immense.

Final Scorecard

• Cameron’s Pledge on Tax Credits, Benefits, Brake: F
• Cameron’s Pledge on Bailouts: F
• Cameron’s Pledge on Working Time Directive and EU regulations: F
• Cameron’s Pledge on Red Card for Unwanted Rules: C
• Cameron’s Pledge on Ever Closer Union: D
• Cameron’s Pledge on Multi-Currency Union: D

Final Weighted Grade: F

If Cameron promised to get a good deal. He didn’t.

He promised he would not take a deal that did not meet UK needs. He lied.

#takecontol #brexit Lie of the Year – David Cameron – February 18, 2016 "I will not take a deal that does not meet what we need."

— Mike Shedlock (@MishGEA) June 14, 2016

 

Some of the “campaign fear” lies are so ridiculous they are actually funny. Here’s an example:

via http://ift.tt/1S3MPW4 Tyler Durden

Following April's gas-price-surge-driven spike in retail sales (by the most in 13 months), May and June have seen various sections of the retailing world collapse, as we detailed here., and growth slowed acordingly with a 0.5% rise MoM (though beating expectations of a 0.3% rise). Before everyone breaks out the champagne for the new recovery, we note that the biggest contributor to May's gains was a 2.1% jump in gasoline station spending – which is "unequivocally bad" right? YoY growth in retail sales slowed to just 2.5% as furniture and building materials (home-buying proxy) declined notably.

Escape velocity not achieved…

 

The breakdown shows spending at gasoline stations surge but home-buying-proxy "building materials" declined sharply…

 

Of course, this is government-adjusted data…

 

Of course we note that non-store retailers (internet – amazon) now account for more than 10% of US retail sales in April and May.

 

Charts: Bloomberg

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Via TheAntiMedia.org,

After the most recent mass shooting in Orlando, Florida — the worst in U.S. history — one might ask how the FBI was able to investigate the perpetrator, twice, without deciding to take any further action. This question is further confounded by the fact the perpetrator was, according to his wife, an abusive, unstable man suffering from bipolar disorder.

A more appropriate question would be: what is the role of the FBI in counter-terror operations? How were they not able to prevent this incident, despite “preventing” hundreds of high profile incidents prior to this?

Out of the 508 terrorism-related cases since September 11, 2001, more often than not, the FBI has had a hand in creating the very terrorist threat they have claimed to be protecting us from. Two-hundred and forty-three of these cases involved an FBI informant. In many instances, the targets of these operations, who are later accused of plotting attacks, are not only almost always Muslim, but they are also often suffering from a mental illness, such as schizophrenia. Moreover, the targets are also vulnerable and easily susceptible to bribery as they are desperate for money – so desperate, it seems, they will help put their own friends behind bars.

This can be seen most clearly in the Newburgh Four case, which saw a combination of mental illness and an urgent need for money. One of the “Four,” James Cromitie, was a former drug addict who repeatedly tried to back out, saying “I don’t want anyone to get hurt.” In the words of a U.S. Court Judge, “only the government could have made a “terrorist” out of Mr. Cromitie.”

Another defendant in the Newburgh case, Laguerre Payan, suffered from schizophrenia to the extent he kept bottles of urine in his apartment. David Williams, another of the four, had a brother who needed a liver transplant, and he was prepared to do almost anything for the money to pay for it.

The FBI chooses the most vulnerable members of society and then coaxes a relationship between the target and an “informant,” who helps instigate the terrorist activity. There is, generally speaking, no evidence the targets would have engaged in such activity had it not been for the FBI.

The case of Rezwan Ferdaus involved a man who suffered from severe depression and seizures and had to wear adult diapers for lack of bladder control. An FBI agent told the target’s own father Ferdaus was “obviously” mentally ill. Yet Ferdaus became a  target of these FBI operations: he had plans to carry out an attack on a massive scale on Capitol Hill, which the FBI could then “save” the public from — relishing in all their glory.

However, prior to this engagement with the FBI, there was, again, no evidence Ferdaus would have ever engaged in any criminal or terrorist activity. Ferdaus’ attorney argued he had repeatedly tried to back out of this activity.

In another case, this time linked to an individual reportedly inspired by the Boston bombing, it was the target’s own father who alerted the authorities of his son’s behavior; his son had created a Facebook page expressing his support for ISIS. He, too, had a long history of mental illness. The FBI evidently saw this as a great opportunity to advance their agenda and provided him with two rifles and a handgun — despite the fact he had previously expressed a desire to fight for ISIS.

Informants are also vulnerable targets of these FBI operations and usually, do the “dirty work” of the FBI in exchange for softer punishment in their own previous prosecutions. In addition, they often do it for money — or a combination of the two. An FBI informant can earn approximately $100,000 or more for a single case.

The culmination of the extent of the FBI’s interference can be seen most clearly in the infamous case of Sami Osmakac. The FBI provided the weapons he used in his propaganda videos, paid the informant who instigated his behavior, provided and assembled the car bomb he was supposedly going to detonate, and even paid his transport costs to get him exactly where the FBI wanted him to go.

This is a man who had no links to any terrorist groups, had no weapons, and could barely afford a new car battery for his 1994 Honda Accord. The FBI squad supervisor, Richard Worms, referred to Osmakac as a “retarded fool” who didn’t have a “pot to piss in.”

Osmakac’s own family stated he had become paranoid, delusional, and pale, and that he would sleep on the floor, complaining about nightmares in which he was burning in hell.

He was later diagnosed with schizoaffective disorder by a court-appointed psychologist.

If these people need help, why can’t the authorities provide it to them? Why prey on them, further radicalize them, and provide them with supplies and weaponry that put the wider public at risk — only to lock them away for decades for a crime they would not have otherwise committed?

The answer is simple. In the words of former FBI Assistant Director, Thomas Fuentes:

“If you’re submitting budget proposals for a law enforcement agency, for an intelligence agency, you’re not going to submit the proposal that ‘We won the war on terror and everything’s great,’ cuz the first thing that’s gonna happen is your budget’s gonna be cut in half. You know, it’s my opposite of Jesse Jackson’s ‘Keep Hope Alive’—it’s ‘Keep Fear Alive.’ Keep it alive.”

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Last week, when we reported that after a record, 19-consecutive-week long stretch of selling by BofA’s smart money – hedge fund, institutional and private client – clients, this group had finally bought stocks for the first time since January, we said “with the smart money having sold for the duration of the short squeeze
and the rally from February, is their flipping and resumption of buying
at the highs, an indication that the top has finally been reached?” So far, with the market peaking last week at 2016 highs and since sliding lower on Brexit, central bank policy failure, global recession fears, the answer appears to be yes.

Demonstrating just how fast sentiment on Wall Street flips, BofA reports that last week, during which the S&P 500 was down 0.2%, BofAML “clients returned to selling US stocks, following a week of net buying. Previously, clients had sold stocks for 19 consecutive weeks, the longest selling streak in our data history. Net sales of $3.8bn last week were the largest since mid-April, with selling led by institutional clients (the biggest sellers during the majority of the selling streak—see Chart 3). Private clients were also net sellers; this group has sold stocks for the last eighteen consecutive weeks, though in lesser magnitude vs. institutional clients. Meanwhile, hedge funds were net buyers last week after selling stocks in the prior two weeks. Small, mid and large caps all saw outflows. Buybacks by our corporate clients picked up slightly last week, but still remain weak, with the four-week average tracking its lowest since January 2015.”

 

Flows by sector:

Selling last week was broad-based, as single stocks across all ten sectors saw net sales. Only ETFs saw net buying, as they have for the past five weeks. Net sales were the most sizeable in Health Care—which has seen among the largest and most consistent sales this year amid uncertainty over the US election and a positioning unwind—and Financials, which was the worst-performing sector last week as expectations for the next rate hike were further pushed out. Year-to-date, clients have been cumulative net sellers of single stocks in all sectors except Telecom.

Institutional clients were the biggest net buyers last week, consistent with trends for most of this year. Private clients were also net sellers, while hedge funds were small net buyers. All three size segments saw outflows. Corporate buybacks accelerated slightly, but remain weak.

Rolling four-week average trends by sector

• Net buying: Telecom since late April; ETFs since late May.
• Net selling: Tech since late Jan.; Industrials since mid-Feb.; Materials and Health Care since mid-March; Consumer Discretionary since late March, Utilities since early April; Energy since mid-May; Financials since late May.
• Notable changes in trends: Consumer Staples saw a reversal to net buying after having seen net selling since early Feb

Finally, the rolling four-week average trends by client type

• Hedge funds are now net buyers of US stocks on a 4-week average basis, after having been net sellers since early Feb.
• Institutional clients have been net sellers on a 4-week average basis since early Feb.
• Private clients have been net sellers of US stocks on a 4-week average basis since early January.
• The four-week average trend for buybacks by corporate clients suggests a bigger slowdown in buybacks than what we have seen the last few years at this time (Chart 24).

What is the conclusion from all of this, and what does it suggest about the market’s next move? We have no idea, but what is clear is that even the “smart money” is nothing more than a glorified Dennis Gartman, flip-flopping each and every day depending on what the last tick in the S&P500 was.

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A few new details have emerged in the murder of a policeman and his wife (also a police officer) in a Paris suburb that we reported late last night in which ISIS has taken credit for.

#ISIS ‘Amaq posted report in Arabic & English, saying that perpetrator was an “Islamic State fighter ” #LesMureaux http://pic.twitter.com/D6j6Y6hfcI

— SITE Intel Group (@siteintelgroup) June 13, 2016

“God has enabled one of the caliphate’s soldiers in city of Les Mureaux near Paris to stab to death the deputy police chief and his wife,” an official broadcast on its Albayan Radio said.

Sources have identified the assailant as Larossi Abballa, 25, a Frenchman of Moroccan origin, who had previously been was jailed in 2013 for helping Islamist militants go to Pakistan and had been under security service surveillance, including wiretaps, at the time of the attack, police sources said. Abballa walked up to a policeman (not in uniform) and stabbed him repeatedly outside of his home in Magnanville, a northwestern suburb of Paris, before going into the house and holing up with the policeman’s partner and the couple’s three-year-old son.

“An abject act of terrorism was carried out yesterday in Magnanville,” Interior Minister Bernard Cazeneuve said after an emergency government meeting, before visiting Les Mureaux, where the police commander worked.

Abballa allegedly posted a 13 minute video to Facebook Live in which he swore allegiance to IS, and was apparently shown considering what to do with the couple’s son – “I don’t know yet what I’m going to do with him” Abballa is heard saying according to French jihad expert David Thompson, who saw the video. AP adds that Abballa was once convicted of recruiting jihadi fighters.

A Facebook profile bearing the name Larossi Abballa — which vanished from the internet early Tuesday — showed a photo of a smiling, bearded man. Two recent posts featured videos critical of Israel and Saudi Arabia. The last publicly available post was a mock-up of the European Championship logo, highlighting what the poster said were masonic and occult symbols. “Some will say we see evil everywhere!” Abballa said in a message posted about 18 hours before the attack.

Loud detonations were heard at the scene as elite RAID police moved in around midnight following failed negotiations with the attacker. The attacker was killed during the assault, and sadly the woman was found dead inside the house. However, thankfully, the little boy was “in shock but unharmed.”

 

Sources close to the inquiry and speaking on condition of anonymity said Abballa claimed allegiance to Islamic State while talking to officers, and witnesses told investigators the man may have shouted “Allahu akbar” as he stabbed the policeman.

The killer had a prior terrorism conviction French officials say. Abballa was convicted in 2013 to three years in prison, including six months suspended for “criminal association with the aim of preparing terrorist acts.”

President Hollande said the couple were “murdered in cowardly fashion”, and dubbed the attack as a terrorist attack. “It’s unquestionably a terrorist act” Hollande said, adding that France was still “facing a very significant terrorist threat.”

This tragic event comes immediately after a terrorist attack led to the deadliest mass shooting in US history in an Orlando nightclub.

It is unclear if the two events are related, but one thing is clear: Abballa was not “self radicalized”, contrary to Obama’s description of the Orlando shooter.

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• German 10-Year Government Bond Yields Dip Below Zero for First Time (WSJ)
• U.K. Moves Closer to Brexit as The Sun Backs ‘Leave’ Vote (BBG)
• Global Stock Selloff Deepens as Investors Seek Safer Assets (WSJ)
• Futures tread lower for fourth day; Fed meet awaited (Reuters)
• Oil falls as Brexit threat rattles markets (Reuters)
• Polls show increasing support for Brexit; Murdoch’s Sun backs ‘Leave’ (Reuters)
• U.K.’s Upstart Lenders Face Brexit Shock in First Downturn (BBG)
• Clinton and Sanders to meet as DC marks the final primary (AP)
• Trump Faces New Challenges Testing Terror Playbook Against Clinton (BBG)
• Netanyahu, Facing Trump or Clinton, Urged to Take Obama Aid (BBG)
• Thousands converge on Paris to protest against changes to labor law (Reuters)
• Muslim leaders condemn Florida massacre, brace for backlash (Reuters)
• EU Envoy to Turkey Resigns as Tensions Threaten to Derail Migration Deal (WSJ)
• Yellen Faces Rate Dilemma as U.S. Economy Runs Short of Workers (BBG)
• Italian ex-PM Berlusconi’s heart surgery went well: source (Reuters)
• South Korea probe into Lotte Group widens with more raids (Reuters)
• Giant Wildfire Is No Longer the Canadian Oil Industry’s Biggest Problem (BBG)

 

Overnight Media Digest

WSJ

– Microsoft agreed to buy LinkedIn for $26.2 billion, marking the largest deal in the software giant’s history, in a bet the professional social network will give a jolt to its widely used Office portfolio of productivity applications. (http://on.wsj.com/1Pqnaa8)

– The U.S. Supreme court struck down Puerto Rico’s effort to restructure its public utility debts, ruling Congress precluded the territory from enacting its own bankruptcy law. (http://on.wsj.com/1PqltcT)

– Libya’s sovereign-wealth fund, in a long-awaited trial that started Monday, alleged Goldman Sachs took advantage of its lack of financial sophistication to draw it into losing trades. (http://on.wsj.com/1PqlRZ1)

 

FT

* TransCanada and IEnova consortium have won a tender to build an 800-km sub-sea pipe from southern Texas to the Gulf of Mexico. The pipeline is expected to commence operations by October 2018.

* Privately owned bank Berenberg is looking to double its employees in the United States by the end of 2017. The bank opened an equity-trading desk in New York last year.

* JIC Group and Wise Road Capital are buying Standard Products, a unit of NXP Semiconductors for about $2.8 billion.

* Airbus said it would use China-based manufacturers to assemble its helicopters as a part of a deal to supply 100 helicopters for 700 million euros

 

NYT

– Microsoft Corp’s blockbuster $26.2 billion takeover of LinkedIn Corp might be an attempt to travel through time. Specifically, to the heady heights of yesteryear’s technology valuations. (http://nyti.ms/1ZMVZME)

– With sales sluggish and stiffening competition from rivals like Google and Facebook, Apple announced on Monday coming improvements to the software that runs its devices, including a revamped Music app, an easier login process and better information-sharing across devices. (http://nyti.ms/1U6dUdo)

– Donald Trump said his campaign would revoke the press credentials of The Washington Post, effectively prohibiting journalists from one of the nation’s largest newspapers from joining the traveling press corps of the presumptive Republican nominee. (http://nyti.ms/28AA80Z)

– The Supreme Court rejected an effort in Puerto Rico to allow public utilities there to restructure $20 billion in debt, striking down a 2014 Puerto Rico law. (http://nyti.ms/1U9iRHD)

 

Britain

The Times

Mounting fears that Britain will vote to leave the European Union this month have sent the cost of insurance against a collapse in the pound to an eight-year high. (http://bit.ly/1VW1N7q)

Andy Clarke, chief executive of Asda, has been ousted from his role managing one of Britain’s “Big Four” grocers after a steep fall in sales and market share. He will be replaced by the head of Walmart’s Chinese business, Sean Clarke. (http://bit.ly/1VW2ei5)

The Guardian

Hermes Investment Management is spearheading an effort to break with the City’s notorious short-termism and push fund managers to focus on the social, environmental and economic consequences of investment decisions. (http://bit.ly/1VW1kSB)

FIFA has welcomed the decision by its financial auditor KPMG to resign. The break in a decade-long relationship was announced Monday, months after KPMG said it would review its work with football’s scandal-hit world governing body. (http://bit.ly/1VW0xkO)

The Telegraph

Barclays is the British bank most exposed to the referendum on the UK’s membership of the EU, as its international operations will be hit the most by Brexit according to analysts. (http://bit.ly/1VW0LbI)

Schneider Electric has resuscitated tie-up talks with software company Aveva, six months after abandoning plans for a 1.3 billion pounds ($1.85 billion) merger. (http://bit.ly/1VW2MV4)

Sky News

Goldman Sachs has rejected a demand from members of Parliament to probe into the collapse of BHS, that would drag its executives deeper into their inquiry. (http://bit.ly/1VW0Z2j)

Two directors of the vehicle which owned BHS until it plunged into administration in April discussed the payment of a 250,000 pounds ($355,150) bonus despite the retailer’s ongoing cash flow problems. (http://bit.ly/1VW2Kwv)

The Independent

Mike Ashley, the founder of Sports Direct, has written to administrators to confirm that he is still interested in buying parts of collapsed retail chain BHS. (http://ind.pn/1VW1jye)

Libya’s sovereign wealth fund will go head-to-head with Goldman Sachs in London’s High Court over claims that the U.S. investment bank exploited the fund by encouraging it to make risky and ultimately worthless investments. (http://ind.pn/1VW2625)

 

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In the aftermath of the Euro 2016 fan violence between supporters of the Russian and English teams, moments ago UEFA announced that it has given Russia a suspended disqualification from the tournament, which means the Russian team will be expelled from the tournament in case of repeated violence. The Russian soccer federation will also be fined €150,000.

#BREAKING Football: Russia given ‘suspended disqualification’ from Euro 2016 over crowd trouble

— AFP news agency (@AFP) June 14, 2016

Oddly enough, as the NYT’s Sam Borden reports, England, whose fans were also involved in the altrecation, is not punished and was not investigated because “UEFA saw English fans as victims in the in-stadium violence.” In other words, this may be the first time in soccer hooliganism history when English fans were on the receiving end. This punishment came from UEFA Disciplinary Comm. UEFA Executive Committee, a different body, can still punish further.

The silver lining for Russian fans: the threat of DQ is related to any more incidents “inside the stadium.” Fighting on streets doesn’t count.

As Borden notes, “the acid test is this: If one flare goes off in the Russian section tomorrow v Slovakia, is Russia bounced?” The answer: most likely yes, as UEFA clearly wants to send a message to not just football holligans, but also to Russia.

More importantly, at this point, these incidents, and even an ejection, have no bearing on Russia hosting the World Cup in 2018 as UEFA isn’t FIFA, which may also explain the bias in favor of UK fans.

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The Fed’s June rate hike decision is due in just over 24 hours, but at this moment nobody cares for two reasons: the market implied probability of a rate hike announcement is 0% (technically, less than zero), and, as DB puts it, “the UK EU referendum is suddenly totally dominant in financial markets” – the increased focus comes as the leave campaign has gathered steam as 4 polls yesterday afternoon/evening put the ‘leave’ campaign ahead.

• ICM phone and online poll showed 53% would vote to leave EU and 47% to remain. (Guardian)
• YouGov/Times poll showed 46% would vote to leave EU and 39% to remain. (The Times)
• ORB/Telegraph poll showed 49% would vote to leave EU 48% to remain. (The Telegraph)

But it’s not just the volatile polls this time: overnight Britain’s biggest selling daily newspaper The Sun has backed the campaign for the UK to leave the European Union, delivering a major boost to the Brexit camp just nine days before the EU referendum. In a front-page article headlined “BeLEAVE in Britain” the Rupert Murdoch owned tabloid declared that remaining in the EU would be “worse for immigration, worse for jobs, worse for wages and worse for our way of life”.

 

This has boosted concerns which emerged over the weekend, that a major shift in UK public sentiment toward Brexit is underway, which in turn proceeded to slam global risk markets yesterday, and continued to do so today. In fact, increasing odds of a U.K. exit from the European Union boosted demand for havens, sending Germany’s 10-year bond yields below zero for the first time.

 

The risk off move was widespread: US treasuries rallied for a sixth day, with the yield falling four basis points to 1.57%, having reached the lowest since Feb. 11; Treasury yields fell to records in Australia and Japan, stocks in Europe slid for a fifth day, while the yen rose against its 31 major peers. U.S. oil slipped toward $48 a barrel. Naturally, the pound fell to two month lows as Brexit implied odds hit a new record high.

 

The shift in investor sentiment in just the past week has been phenomenal: from sheer complacency, there is now downright tangible panic just below the surface. Case in point: “Nobody buys bunds at these yield levels thinking they are attractive,” said Jussi Hiljanen, head of European macro and fixed income strategy at SEB A/B in Stockholm. “Demand for haven assets are being driven by fear of Brexit and growth concern. Investors are buying bunds as a hedge against uncertainty.”

Others piled on: “people are now insulating portfolios against the worst-case scenario as polls indicate some momentum for the Brexit camp, but the European policy response is underestimated,” said William Hobbs, head of investment strategy at the wealth-management unit of Barclays, from London. “It doesn’t mean the sentiment can’t swoon after, but the contribution of the U.K.’s economy to world’s capital markets is, in the end, limited. Europe looks better equipped than before to handle such a risk.”

And just like yesterday, European stocks are getting slammed the most, with the Stoxx Europe 600 Index sliding over 1% , heading for its biggest five-day decline since February, amid investor concern that the tide has turned in favor of Britain seceding from the EU; all 19 groups on the Stoxx 600 fell, with miners and carmakers sliding the most. Among shares active on corporate news, GAM Holding AG tumbled 18 percent after the Swiss asset manager said first-half profit will probably halve as performance fees dry up.

Futures on the S&P 500 slipped 0.2%, indicating equities will extend losses after falling for a third day Monday, their longest losing streak in a month. The MSCI Emerging Markets Index fell 0.8 percent, losing 4.7 percent in four days. Equity benchmarks in Russia, South Africa, Poland, Turkey and the Philippines declined at least 1.3 percent.

Investors will look to an advance report on retail sales Tuesday for indications of the health of the world’s largest economy.

Market Snapshot

• S&P 500 futures down 0.3% to 2063
• Stoxx 600 down 1.4% to 322
• FTSE 100 down 1.2% to 5970
• DAX down 1.2% to 9537
• German 10Yr yield down 5bps to -0.03%
• Italian 10Yr yield up 2bps to 1.48%
• Spanish 10Yr yield up 3bps to 1.53%
• S&P GSCI Index down 1% to 377.4
• MSCI Asia Pacific down 0.7% to 126
• Nikkei 225 down 1% to 15859
• Hang Seng down 0.6% to 20388
• Shanghai Composite up 0.3% to 2842
• S&P/ASX 200 down 2.1% to 5203
• US 10-yr yield down 4bps to 1.57%
• Dollar Index up 0.49% to 94.83
• WTI Crude futures down 1.5% to $48.15
• Brent Futures down 1.3% to $49.70
• Gold spot down 0.3% to $1,280
• Silver spot down 0.9% to $17.29

Global Top News

• 4 Polls Put U.K. on Course to Leave EU as ‘Sun’ Backs Brexit: Leave campaign ahead in both phone and online polling; biggest-selling newspaper uses front page to support leaving; Pound Falls Toward Two-Month Low on Brexit Vote Concern
• Fed Grip on $2.5 Trillion Treasury Stash Seen Firm for Years: Traders now see less than a 50% chance of the next increase coming this year
• NXP Selling Products Unit for $2.75b to Chinese Group: Buyers are Jianguang Asset Management and Wise Road Capital; Nexperia business had $1.2b in revenue in 2015
• Goldman Tied to Rival Bidder as Morgan Stanley Wins on Microsoft: Morgan Stanley won the role as Microsoft’s adviser on its agreement to buy LinkedIn, climbs to No. 1 dealmaker for tech this year
• BofA CEO Eyes Market-Share Gains as Europe Peers Sound Alarm: U.S. banks against tough rules, markets are still stronger than many overseas rivals, will take their business: CEO Moynihan
• Apple Opens Siri to Developers in Effort to Catch Up With Rivals: Apple unveiled software that will allow its voice- activated personal assistant Siri to order pizza, call for a cab or check a bank balance
• Redstone’s Ex-Girlfriend Seeks New Trial Over Mental Capacity: Manuela Herzer claims she has new evidence to prove her case

Looking at regional markets, we start in Asia which traded mostly lower following the losses in the US, where declines in energy dragged US stocks to 2-week lows, while the looming FOMC decision and Brexit concerns further added to the cautious tone. Nikkei 225 (-1.0%) fell below the 16,000 level as JPY broke below the 106.00 handle, while ASX 200 (-2.1%) is the laggard as it tracks the weakness across global equity markets on its return from its extended weekend. Elsewhere, the Shanghai Comp (+0.3%) shook off the negative tone after the PBoC upped its liquidity injection, while participants are also tentative ahead of the MSCI decision on whether to include Chinese A-shares. Finally, 10yr JGBs traded higher amid weakness seen in Japanese stocks, with yields across the curve pressured as 5yr, 10yr and 20yr yields all printed fresh record lows.

Top Asian News

• Yuan Approaches Five-Year Low Amid Concern Over Economy, Brexit: Currency impact from any MSCI inclusion to be marginal, SocGen says
• MSCI Is About to Make Its Big Call on World’s Worst Stock Market: Index clearing house to announce whether to add Chinese equities
• Best-Performing Asian Stock Market May Get Extra MSCI Boost: Pakistan has 70% chance of upgrade to EM, says Tundra Fonder
• India Wholesale Inflation Rate Exceeds Estimate to 19-Mo. High: WPI rate rises 0.79% in May, highest since Oct. 2014
• Disney Plays by China Rules With Shanghai Park, Media Strategy: Content ambitions hemmed in by piracy, government push-back
• Baidu Reduces Revenue Forecast on Ad Restrictions: Rules follow death of student who used results to treat health

In Europe markets continue to remain gripped by the global uncertainty surrounding the EU referendum and the Fed with more polls overnight leaning to the leave camp, subsequently adding fuel to the fire regarding Brexit fears.

• ICM phone and online poll showed 53% would vote to leave EU and 47% to remain. (Guardian)
• YouGov/Times poll showed 46% would vote to leave EU and 39% to remain. (The Times)
• ORB/Telegraph poll showed 49% would vote to leave EU 48% to remain. (The Telegraph)

As such, credit markets have yet again soared with global bond yields plummeting to record lows in the past couple of weeks, with Bunds now yielding negative for the first time on record, while Gilts also drop to all-time lows. Elsewhere, equities continue to find no reprieve with broad based weakness across Europe (Euro Stoxx -1.6%). In turn, the aforementioned global uncertainty, coupled with the fall in crude prices in which WTI has tested USD 48/bbl to the downside has seen pressured the FTSE 100 to break below 6,000 for the first time since February.

Top European News

• Germany’s 10-Year Bond Yield Declines Below Zero for First Time: The nation joined Japan and Switzerland in having 10- year bond yields of less than zero
• Daetwyler to Buy Premier Farnell for About $1.1b: Premier Farnell investors to get 165p/share in cash; offer represents a premium of about 51% from Monday’s close.
• France Braces for New Street Demonstrations Against Labor Bill: labor union CGT maintains opposition to government plans.
• Allianz Buying U.K. Stocks That Brexit Concern Makes Attractive: company fundamentals seen the same regardless of outcome
• GAM Holding Plummets After Saying 1H Profit to Drop 50%

In FX, the pound continued to weaken, dropping 0.9% versus the dollar, approaching a two-month low. Four opinion polls from three separate companies have put the campaign for Britain to leave the EU in front of the “Remain” camp. A gauge of the pound’s anticipated volatility over the next two weeks — a period that includes the June 23 referendum — climbed to the highest on record. “Risk sentiment has taken a beating with volatility up partly on latest Brexit polls still showing the U.K. is on course to quit the European Union,” said Ray Attrill, co-head of currency strategy at National Australia Bank Ltd. in Sydney. “Amid all of this, the yen continues to demonstrate its preeminent safe-haven characteristics.” Japan’s currency strengthened 0.5 percent, nearing its highest level since 2014. Against the euro, Japan’s currency rose for a sixth day, gaining 1 percent. China’s yuan weakened in Shanghai to within 0.2 percent of a five-year low reached in January, when a slide in the currency heightened concern about the health of the nation’s economy and spurred a selloff in global stocks and commodities. The MSCI Emerging Market Currency Index dropped 0.5 percent and is down 1.5 percent in four days. Russia’s ruble and South Africa’s rand led declines, declining at least 1.2 percent.

In commodities, commodities followed equity markets lower. Oil fell for a fourth day, with West Texas Intermediate crude sliding 1.6 percent to $48.08 a barrel and Brent dropping 1.5 percent to $49.61. The global oil market surplus is shrinking more quickly than expected and the market will be almost balanced next year as demand rises faster than production, the International Energy Agency said Tuesday. Zinc led a decline in industrial metals, falling 1.7 percent to $2,042.50 a ton. Copper lost 0.4 percent while aluminum gained 0.5 percent after Chinese smelters reached an agreement that could to cut production. Gold dropped 0.4 percent to $1,279.43 an ounce.

On the US calendar today, we have the retail sales number for May that is expected to clock in at +0.3% mom (+1.3% previous) and will likely be the most closely watched release since payrolls. Aside from that we will also see the import price index number for May which is expected to come in at +0.7% mom (+0.3% previous).

* * *

Bulletin Headline Summary from RanSquawk and Bloomberg

• Fixed income markets continue to extend, with Bund yields falling below 0% for the first time
• Equities tumble amid the risk off sentiment, which sees USD/JPY fall below 106.00
• Highlights Include US Import price index, Business Inventories and Retail sales advance as well as API Crude Oil Inventories

• Treasuries higher in overnight trading as recent polls in U.K. show “Leave” campaign ahead of “Remain” and that nation’s largest paper comes out in support of a Brexit; Germany’s 10-year government bond yields tumbled below zero for the first time on record.
• There’s no road map for European authorities facing the prospect of a British exit from their 28-nation union — by design. Officials in Brussels are under orders not to commit any scenarios to paper to avoid alarmist leaks
• The pound fell toward a two-month low as concern grew that the U.K. will vote to leave the European Union. A gauge of the pound’s anticipated volatility over the next two weeks climbed to the highest on record
• Banks took 2.46 billion pounds ($3.5 billion) in the first of three extra liquidity operations the Bank of England is holding this month to shore up funding as the U.K. considers its future in the European Union
• U.K. inflation unexpectedly held at 0.3% in May as rising transport costs were offset by falls in the price of clothing and food. Core inflation, which excludes volatile food and energy prices, remained at 1.2% 
• Spanish and Italian banks scoop up more than half of the money the European Central Bank provides in its regular refinancing operations, signaling that borrowing in financial markets remains difficult or unattractive for them
• Japan and Australian 10-year yields fell to record lows, extending a global bond market rally. Japan’s benchmark dropped to minus 0.17%. Australia’s slid to 2.05%
• The Federal Reserve’s liftoff from near-zero interest rates in December sparked angst over how quickly the central bank would start whittling down its $2.5 trillion hoard of Treasuries. It turns out that investors had little cause for concern

US Event Calendar

• 06:00am: NFIB Small Business Optimism, May; 93.8 vs est. 93.6 (prior 93.6)
• 8:30am: Import Price Index m/m, May, est. 0.7% (prior 0.3%)
  • Import Price Index y/y, May, est. -5.9% (prior -5.7%)
• 8:30am: Retail Sales Advance m/m, May, est. 0.3% (prior 1.3%)
  • Retail Sales Ex Auto m/m, May, est. 0.4% (prior 0.8%)
  • Retail Sales Ex Auto and Gas, May. est. 0.3% (prior 0.6%)
  • Retail Sales Control Group, May, est. 0.3% (prior 0.9%)
• 10:00am: Business Inventories, April, est. 0.2% (prior 0.4%)

DB’s Jim Reid concludes the overnight wrap

The UK EU referendum is suddenly totally dominant in financial markets. The increased focus comes as the leave campaign has gathered steam as 4 polls yesterday afternoon/evening put the ‘leave’ campaign ahead.

First the Guardian/ICM polls late yesterday afternoon UK time (after the close) reported a six point lead in their phone and online polls. The big story with this poll is that the lead was fairly consistent in both their phone and online polls. The former have tended to favour the ‘remain’ side. Recent polls showing ‘leave’ in the lead were mainly online polls only so this is a major development. Then at around 10pm BST two more polls continued to show a similar trend. A YouGov online survey showed ‘leave’ at 46% with ‘remain’ at 39%, and an ORB phone poll had ‘leave’ at 49% and ‘remain’ at 48% among those certain to vote. If there was a silver lining for ‘remain’ then it can be found in ORB suggesting a 49%/44% split in favour of ‘remain’ amongst all voters.

Events appear to be starting to mirror the Scottish referendum a touch (but perhaps more extreme) where markets were suddenly roiled by a shock poll suggesting ‘leave’ had moved into the lead. In the end this may have motivated those wanted to stay in the Union to vote. One wonders whether such recent polls will have a similar impact. Impossible to tell at this stage.

Asian equities are weak but the polls don’t seem at this stage to have accelerated the downward momentum seen yesterday. The Nikkei is around -1.5% lower as we type. Chinese equities are only around 0.25% lower as they await news tomorrow as to whether they get included in MSCI global indices. US equity futures are flat at the moment but expect the polls to be the focus of attention this morning in Europe and perhaps also that the front page of this morning’s Sun newspaper (the largest circulation in the UK) which has backed the ‘leave’ campaign.

Into the US close we only had the two ICM polls and equities again out-performed stateside but the S&P500 still fell -0.81%. However the real stunner was the 22.78% climb in the VIX from 17.03 at Friday’s close to 22.97 last night. US Equities rarely see such sanguine performance when the VIX climbs by that amount in a day. At least half of the rise followed the two ICM polls and could probably be seen as investors hedging their risk.

Before this European equity markets posted their fourth consecutive day of losses with the STOXX dropping by -1.84%. Every industry group was in negative territory again, with the losses once again led by Banks (-2.93%), Insurance (-2.66%) and Financial Services (-2.52%) sectors as Brexit concerns continued to mount even before the latest poll. The sell-off was once again broad based as only 19 out of the 600 companies in the index ended the day in the green. European credit markets followed suit with iTraxx Main and Crossover widening by +4.2bps and +16.2bps as both spreads hit their widest levels in three months.

At the other end of the risk spectrum, German 10Y yields inched marginally higher to 0.024% (+0.3bps) after touching all time lows yesterday. Meanwhile UK 10Y Gilt yields continued to drop, falling to 1.21% (-2.3bps) on the day.

Sterling faced a roller coaster ride on the day, swinging from an early low of 1.4116 to an intraday high of 1.4302 as speculation in the market falsely anticipated a ‘remain’ lead in the latest ICM poll before declining again to 1.4230 (-0.19%) after the actual correct ICM poll results were released. We’re at $1.4187 this morning after the additional polls.

Our Chief UK Economist George Buckley examines some of the latest issues surrounding the vote while also discussing some of the logistics of the actual day of the vote.

Staying with Europe I wanted to highlight a hard hitting piece by our Head of Research and Chief Economist David Folkerts-Landau suggesting that the ECB has seen policy gone awry with the need for them to change direction. He suggests that after seven years of ever-looser monetary policy there is increasing evidence that following the current dogma, broad-based quantitative easing and negative interest rates, risks the long-term stability of the eurozone. David believes that it is already clear that lower and lower interest rates and ever larger purchases are confronting the law of decreasing returns but they still push policy to further extremes. This causes mis-allocations in the real economy that become increasingly hard to reverse without even greater pain. Worse, by appointing itself the eurozone’s “whatever it takes” saviour of last resort, the ECB has allowed politicians to sit on their hands with regard to growth-enhancing reforms and necessary fiscal consolidation. Thereby ECB policy is threatening the European project as a whole for the sake of short-term financial stability. The longer policy prevents the necessary catharsis, the more it contributes to the growth of populist or extremist politics. The piece argues that in its fight against the spectres of deflation and unanchored inflation expectations the ECB’s monetary policy has already become too loose. Hence, they believe the ECB should start to prepare a reversal of its policy stance. The expected increase in headline inflation to above one per cent in the first quarter of 2017 should provide the opportunity for signalling a change. A returning to market-based pricing of sovereign risk will incentivise governments to begin growth-friendly reforms and to tackle fiscal stability. He thinks flagging the move should dampen adverse reactions in financial markets. David concludes by suggesting that normalising rates would be seen as a positive signal by consumers and corporate investors. The longer the ECB persists with unconventional monetary policy, the greater the damage to the European project will be.

On the subject of ECB purchases yesterday we learnt that they purchased €348mn on their first day of corporate bond purchases last Wednesday. They were the only day’s purchases that would have settled before Friday’s reporting cut-off and only includes secondary. Obviously one has to be cautious about extrapolating one day of data, especially as they probably knew this one particular day would be a focal point until more data was collected. Having said this, the high number helps confirm our expectations that the ECB plans to conduct meaningful corporate bond purchases making us more confident that our ‘over €5bn/month’ forecast (average with big ranges over the holiday season) is achievable in the early stages at least, notwithstanding anomalies around the upcoming summer months. We probably won’t know until later in the year if they are starting to struggle to maintain a high initial run rate.

After a quiet day yesterday in terms of data, we have some interesting numbers due today. We’ll see the latest May inflation data for the UK with the CPI (expected +0.3% mom; +0.1% previous), RPI (expected +0.3% mom; 0.1% previous) and PPI (expected +0.3% mom; +0.4% previous) numbers due – all of which should be watched closely ahead of the BoE meeting on Thursday. We will also get the final May CPI numbers for Spain (expected +0.5% mom; +0.5% previous). Following that we also have the April industrial production numbers out for the Euro area (expected +0.8%; -0.8% previous).

Over in the US, we will see the NFIB Small Business Optimism index for May which is expected to be unchanged over the previous month (expected 93.6). Following that we have the retail sales number for May that is expected to clock in at +0.3% mom (+1.3% previous) and will likely be the most closely watched release since payrolls. Aside from that we will also see the import price index number for May which is expected to come in at +0.7% mom (+0.3% previous).

However everything is starting to be overshadowed by Brexit fears.

via http://ift.tt/1YpcyQr Tyler Durden

Submitted by Ralph Benko via The Pulse2016.com,

About a year ago, Stan Sorscher, Labor Representative, Society for Professional Engineering Employees in Aerospace, published a frighteningly important blog at The Huffington Post (where I also blog on a regular basis) headlined “Inequality — “X” Marks the Spot — Dig Here.”

It was as important for what it gets right as for what it misses.

Sorscher writes:

In 2002, I heard an economist characterizing this figure as containing a valuable economic insight. He wasn’t sure what the insight was. I have my own answer.

 

Figure 1. Something happened in the mid-70’s

The economist talked of the figure as a sort of treasure map, which would lead us to the insight. “X” marks the spot. Dig here.

 

This figure tells three stories.

 

First, we see two distinct historic periods since World War II. In the first period, workers shared the gains from productivity. In the later period, a generation of workers gained little, even as productivity continued to rise.

 

The second message is the very abrupt transition from the post-war historic period to the current one. Something happened in the mid-70’s to de-couple wages from productivity gains.

 

The third message is that workers’ wages – accounting for inflation and all the lower prices from cheap imported goods – would be double what they are now, if workers still took their share of gains in productivity.

 

[…]

 

This de-coupling of wages from productivity has drawn a trillion dollars out of the labor share of GDP.

 

Economics does not explain what happened in the mid-70s.

 

It was not the oil shock. Not interest rates. Not the Fed, or monetary policy. Not robots, or the decline of the Soviet Union, or globalization, or the internet.

 

The sharp break in the mid-70’s marks a shift in our country’s values. Our moral, social, political and economic values changed in the mid-70’s.

The author is exactly right regarding “X” and exactly wrong in getting cause and effect backwards. At “X” Marks the Spot, he notes “[s]omething happened,” and the wages of goods-producing workers flatlined, never to recover. He is right and perceptive in this too little appreciated fact.

Yet he attributes this to some kind of mystical “shift in our country’s values. Our moral, social, political and economic values changed in the mid-70’s.”

As it happens, “X” correlates with Nixon shutting down the Bretton Woods gold standard in 1971 and the epic failure to get it fixed and restored in 1973. The drag, after a modest lag, filtered into the working economy. The rest is persistent stagnation for median families.

It was the destruction of the (dilute) gold standard which precipitated the death, or at least long coma, of the American Dream. That, in turn, caused the ensuing degradation “in our moral, social, political and economic values” as America turned Hobbesian.

Keynes, the great economic icon of the left, understood how subtle and insidious the processes at work during an earlier instance of monetary disorder. In his 1919 classic The Economic Consequences of the Peace, Keynes wrote:

Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the equity of the existing distribution of wealth. Those to whom the system brings windfalls, beyond their deserts and even beyond their expectations or desires, become ‘profiteers,’ who are the object of the hatred of the bourgeoisie, whom the inflationism has impoverished, not less than of the proletariat. As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery.

 

Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.

Copernicus, who kind of invented (or anticipated) the gold standard — and really was a pretty bright guy, earning the grudging respect even of right wing Flat Earther geocentrists — made a comparable point in his Essay On The Minting of Money (whose modern translation I commissioned and served as lead co-editor):

ALTHOUGH THERE ARE COUNTLESS MALADIES that are forever causing the decline of kingdoms, princedoms, and republics, the following four (in my judgment) are the most serious: civil discord, a high death rate, sterility of the soil, and the debasement of coinage. The first three are so obvious that everybody recognizes the damage they cause; but the fourth one, which has to do with money, is noticed by only a few very thoughtful people, since it does not operate all at once and at a single blow, but gradually overthrows governments, and in a hidden, insidious way.

The GOP is beginning to come around to the gold standard. The academic (though not the ethnic or labor) left remains resistant.

Getting the gold standard wrong could be catastrophic. In getting the gold standard back in place the right way — a way that will be at least, and preferably more, beneficial to labor than to capital — it would be invaluable for the left to begin to come to terms with the crucial role the gold standard played, and again can play, in restoring a climate of equitable prosperity.

Therefore, I respectfully ask that progressives open their hearts to exploring the possibility, just the possibility, that the gold standard would go a long way toward restoring both economic prosperity and economic justice for all — the American Dream. America, and the world, greatly would benefit from participation from the Donks in making sure that the Pachyderms don’t do a wrongheaded pro-Ebeneezer Scrooge version of the gold standard.

Help us write a wonderful pro-Bob Cratchit version that will restore justice as well as prosperity. God bless us every one! (Including you, atheists!)

If we get this right, afterward there still will be much to argue about. We can have merry and spirited arguments as to whether all the extra tax money pouring in from all those new great jobs and businesses should be spent on family leave or abolishing the estate tax.

The thing is… if we get the gold standard right there will be plenty of money to do both. And more. According to a grounded assessment I made a few years ago at Forbes.com there’s probably at least $6 trillion (with a T!) of new federal tax revenues hidden in there, without raising tax rates. Visualize federal surpluses!

And there will be maybe 10X that for the private economy. Win-win!

“X” indeed marks the spot! By following Mr. Sorscher’s invitation to “Dig Here” one discovers that therein lies a buried, and lost, treasure chest of gold that can be leveraged to the common good rather than a mysterious “shift in our country’s … moral, social, political and economic values.”

Putting that gold — and yes, Uncle Sam has plenty of it, the most, by far, in the world — back to work in the right kind of way is highly likely, perhaps even certain, to restore wage growth, end privilege-based inequitable income inequality, and restore our moral, social, political and economic values like nothing else possibly could.

This isn’t partisan. Historically, progressive Democrats like Grover Cleveland were as committed to gold as were Republicans like William McKinley. The left is invited to participate.

So, my progressive friends, let’s grab our shovels, and let’s dig together. “X” marks the spot.

via http://ift.tt/1PqCN1k Tyler Durden