Schumer: “U.S. Is No Longer Fact-Based” Nation; Breitbart News A “Threat To Democracy”

Last Friday Attorney General Jeff Sessions issued a press release reminding sanctuary cities of their obligation to enforce federal immigration laws or risk losing their federal funding.  Within the release, Sessions noted that Chicago’s murder rate has risen “more than 50 percent from the 2015 levels” and that New York City continues to experience gang murders due to the city’s “soft on crime” stance.  Here’s what he said:

“Additionally, many of these jurisdictions are also crumbling under the weight of illegal immigration and violent crime. The number of murders in Chicago has skyrocketed, rising more than 50 percent from the 2015 levels. New York City continues to see gang murder after gang murder, the predictable consequence of the city’s “soft on crime” stance. And just several weeks ago in California’s Bay Area, after a raid captured 11 MS-13 members on charges including murder, extortion and drug trafficking, city officials seemed more concerned with reassuring illegal immigrants that the raid was unrelated to immigration than with warning other MS-13 members that they were next.”

We suspect that Sessions’ “soft on crime” comment was in reference to an ongoing feud between the NYPD and Mayor Bill De Blasio that erupted back in 2014 after De Blasio effectively legitimized the assassination of two cops in broad daylight by referring to minorities as “oppressed” and “threatened” by local police.  The situation garnered national media attention when the NYPD turned their backs on De Blasio after he showed up at the funeral ceremony of the murdered cops.

Of course, the main stream media had a slightly different interpretation of Sessions’ “soft on crime” comment and has worked itself into a tizzy insisting that the Department of Justice is ‘attacking’ the NYPD. 

As evidence, here is a comical exchange from MSNBC this morning in which Joe Scarborough insists that Sessions is “attacking the NYPD” while Mika accuses the DOJ of propagating “fake news”:

Scarborough:  “The Attorney General sends out a letter basically attacking the NYPD saying that they are ‘soft on crime.’  Has he never been to New York?”

 

Schumer:  “We are the lowest of the 25 biggest cities in crime.”

 

Mika:  “But they say crime is out of control.”

 

Schumer:  “My daughters ride the subway at 4am and I’m perfectly happy about it.  We are a safe city.  And, by the way, New York has grown from 7 million people in 1990 to 8.5 million today, the largest of any city because crime went down.”

 

Mika:  “There’s this talk about ‘fake news’ but that quote we just put up there is ‘fake news’ coming from the Attorney General.”

 

Schumer:  “We’re no longer fact-based.  The founding fathers created a country based on fact.  We don’t have a fact base.  If Breitbart News and the New York Times are regarded with equal credibility, you worry about this democracy.”

 

We won’t even bother to highlight all of the instances in which the New York Times decided to push ‘fake news’ regarding the Trump administration’s alleged ties to Russian hackers (but feel free to read this for an example:  “NYTimes Reports Trump Aides’ “Repeated Contact” With Russian Intel Officials, Admits No Collusion Discovered“).

That said, we can at least agree with Chuck that many politicians no longer live in a “fact-based” world….in fact, here is just one of our favorite examples…

 

…and this one is also very good.

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What The Wage Equality Crusaders Don’t Understand

Authored by Brittany Hunter via The Mises Institute,

Women in the workforce are constantly bombarded by rhetoric intended to make us feel less appreciated than our male colleagues. Politicians and Hollywood celebrities – many of whom have never worked one day in a traditional office setting – seem to take great pleasure in telling females that we are victims of the alleged gender wage gap.

Asserting that today’s working women make only 78 cents for every dollar earned by a man, high profile personalities from comedian Sarah Silverman to former President Barack Obama have perpetuated this myth and used it to further their own agenda: more government control over wages.

Unfortunately for these wage crusaders, when the data is examined more closely what we find is not necessarily a wage gap, but what could more accurately be described as a “preference” gap that exists because of personal choice rather than gender.

True, if we were to add up the salaries of every working man in the country, and then we compared that average to the average of the combined salaries of all working women, there would most certainly be a wage gap present. However, this statistic doesn’t tell the whole story.

The gender wage gap neglects to account for any other contributing factors aside from gender and wage earnings. It does not take into consideration, for example, that each individual, regardless of gender, is driven by a unique set of incentives. Instead, it assumes that wages are the end-all, be-all for every single American worker.

Human behavior is not a predictable science. We can never know for certain what drives another person to make their decisions, but the decisions themselves may tell us what a person values most.

Dedicating her career to understanding the gender wage gap, economist Claudia Goldin discovered that in the early years of career development there was virtually no wage gap between men and women working in the same field. In fact, when she compared male and female colleagues with almost identical resumes and intellect, a wage gap of less than one percent existed between them.

However, as time went on this gap did eventually widen as some of these working women began making the decision to marry and have children. Once these women decided to take on more caregiving responsibilities, flexibility began to outweigh the opportunity to earn higher wages. In other words, their priorities shifted.

Instead of seeking a promotion, which often means more responsibility and more time spent in the office, many females with caretaking responsibilities have instead chosen to accept lower pay in exchange for the benefit of spending more time outside the office.

A woman’s decision to accept lower wages in exchange for added flexibility does not mean her employer has assigned less value to her work due to her gender. Instead, it shows that for many female employees, flexibility is worth more than having a higher salary and more office responsibilities. It is a manifestation of choice and human action.

When the 2014 Sony leaks revealed that Hollywood actress Jennifer Lawrence had made less money than her male costars in the film American Hustle, Hollywood was outraged and demanded that government help bridge the gender wage gap.

Actress Robin Wright took a different approach to this issue by taking matters into her own hands. When it came time to negotiate her salary for the next season of House of Cards, Wright went into her contract meeting prepared to demonstrate her worth. Armed with data showing her character’s rising popularity among viewers, she demanded to be paid as much as her male costar, Kevin Spacey. Once she presented her case, her demands were met and she was compensated accordingly.

For Wright, putting up a fight was well worth potentially dragging out the negotiations process if it meant receiving higher wages. However, not all actresses value higher earnings over the burdensome struggle of salary negotiations.

When asked how she felt about being paid less than her male costars, Lawrence admitted that the pay discrepancy was largely a result of her own unwillingness to negotiate a higher salary. Already making millions from two successful film franchises, Lawrence had no desire to drag out negotiations when she didn’t really need or want the extra money. In short, she valued convenience over higher earnings and chose to end the negotiation process early.

The gender wage gap theory relies on a statistic that attempts to draw a very narrow conclusion from a very broad set of data. As individuals, we are each fueled by unique value systems which help us make thousands of decisions on a daily basis. To reduce each individual decision down to a person’s gender is not only insulting, it also completely neglects the importance of human action.

 

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US Sanctions 271 Syrians, Freezes Their US Assets

Two weeks after launching missile strikes on Syria, the U.S. Treasury announced it has sanctioned 271 employees of Syria’s Scientific Studies and Research Center in response to the alleged sarin attack conducted by the Assad regime on Kahn Sheikhoun. It’s one of the largest sanction actions in U.S. history.

The action was announced in a statement by the Treasury Department, and Treasury Security Steve Mnuchin simultaneously briefed reporters at the White House.

The action – which takes place in lieu of a probe demanded by Russia and Syria to determine if Assad was indeed responsible for the recent sarin attack – freezes the individuals’ U.S. assets – which we doubt exist – and generally prohibits U.S. persons from dealing with them

The sanctioned employees “have expertise in chemistry and related disciplines and/or have worked in support of SSRC’s chemical weapons program since at least 2012” said Treasury Secretary Steven Mnuchin, and added that “These sweeping sanctions target the scientific support center for Syrian dictator Bashar al-Assad’s horrific chemical weapons attack on innocent civilian men, women, and children.”

On the surface, the move seeks impact by targeting officials with expertise needed for developing these weapons and those who may seek to travel and use financial system outside of Syria, according to administration official quoted by Bloomberg.

The new sanctions are the latest U.S. response to Assad’s alleged use of chemical weapons, most recently in rebel-held northern Idlib, in an attack that killed more than 80 civilians. The U.S. retaliated earlier this month by launching missiles against a Syrian airfield.

* * *

Full statement from the Treasury below

Treasury Sanctions 271 Syrian Scientific Studies and Research Center Staff in Response to Sarin Attack on Khan Sheikhoun

Action Targets Syrian Government Agency Responsible for Developing Chemical Weapons and the Means to Deliver Them

Washington – Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is taking action in response to the April 4, 2017 sarin attack on innocent civilians in Khan Sheikhoun, Syria, by the regime of Syrian dictator Bashar al-Assad.  In one of the largest sanctions actions in its history, OFAC is designating 271 employees of Syria’s Scientific Studies and Research Center (SSRC), the Syrian government agency responsible for developing and producing non-conventional weapons and the means to deliver them.  These 271 SSRC employees have expertise in chemistry and related disciplines and/or have worked in support of SSRC’s chemical weapons program since at least 2012.

“These sweeping sanctions target the scientific support center for Syrian dictator Bashar al-Assad’s horrific chemical weapons attack on innocent civilian men, women, and children.  The United States is sending a strong message with this action that we will hold the entire Assad regime accountable for these blatant human rights violations in order to deter the spread of these types of barbaric chemical weapons,” said Treasury Secretary Steven T. Mnuchin.  “We take Syria’s disregard for innocent human life very seriously, and will relentlessly pursue and shut down the financial networks of all individuals involved with the production of chemical weapons used to commit these atrocities.”

Today’s action follows OFAC and the Department of State’s sanctions announced on January 12, 2017 against 18 senior regime officials and five branches of the Syrian military, along with entities associated with its chemical weapons program, in response to findings by the Organization for the Prohibition of Chemical Weapons – United Nations Joint Investigative Mechanism, that the Syrian regime was responsible for three chlorine gas attacks in 2014 and 2015.

Today’s designation, less than three weeks after the attack on Khan Sheikhoun, more than doubles in a single action the number of individuals and entities sanctioned by the United States pursuant to Syria-related Executive Orders (E.O.s).  These sanctions are intended to hold the Assad regime and those who support it – directly or indirectly – accountable for the regime’s blatant violations of the Chemical Weapons Convention and UN Security Council Resolution 2118.

Today’s action was taken pursuant to E.O. 13582, which targets the Government of Syria and its supporters.  The named individuals are designated for materially assisting, sponsoring, or providing financial, material, or technological support for, or goods or services in support of, and having acted or purported to act for or on behalf of, directly or indirectly, the Government of Syria.  As a result of today’s action, any property or interest in property of the designated persons in the possession or control of U.S. persons or within the United States must be blocked, and U.S. persons are generally prohibited from dealing with them.

For identifying information on the individuals designated today, click here:

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You Won’t Read a Full Accounting of America’s Use of Waterboarding and Torture Anytime Soon

WaterboardingA push to force the federal government to publicly release the full contents of a Senate report on the secret torture and detention of terror suspects ended quietly this morning with a simple rebuff by the Supreme Court.

The Supreme Court declined to consider a lawsuit by the American Civil Liberties Union (ACLU). The ACLU had been suing under the Freedom of Information Act (FOIA) to force the federal government to release the contents of a 6,000-word report from the Senate. The full report detailed not just the terrible treatment—waterboarding and other forms of torture—of people suspected (sometimes incorrectly) of terrorism overseas; it also argued that the violent interrogations failed to get useful information and that the CIA lied about the program to higher-ups in government to conceal what they were doing.

An executive summary—clocking in at more than 500 pages—was finally declassified and made public in heavily redacted form back in 2014 after a long fight over it. But the full report has been secreted away to the point that the Department of Justice has actually ordered federal agencies to not even open and read the report, and Sen. Richard Burr (R-N.C.) has attempted to get federal agencies to give their copies of the report back to the Senate.

The ACLU’s lawsuit is partly why. In defending against the ACLU’s lawsuit, the federal government argued that the full torture report was a congressional record and therefore not subject to FOIA. The ACLU countered that passing the report along to agencies in the executive branch meant otherwise. Unfortunately, courts have up until now found for the government. This morning the Supreme Court denied certification for the ACLU’s lawsuit, so their push ends here with a loss for transparency.

It is the end of this particular legal fight, Hima Shamsi, director of the ACLU’s National Security Project, tells Reason. “It is a very disappointing end because we think that the lessons of the full report are really necessary to learn.”

Nevertheless, Shamsi felt as though the fight itself hasn’t been a total loss. The outrage that followed the disclosure of waterboarding and other harsh interrogation techniques led military and executive branch leaders to acknowledge the legal limitations to what they were permitted to do to prisoners of the war on terror, and the military has promised to use only interrogation techniques listed in the Army Field Manuals, meaning no waterboarding.

“Opposition [to torture] at the highest levels is going to be critically important,” Shamsi said. That’s particularly true because President Donald Trump campaigned fully in support of waterboarding and even harsher forms of torture as tools to fight the Islamic State.

The Supreme Court declining to hear the case means the legal fight is over, but that doesn’t necessarily mean that the chance Americans will ever get to see the full report is completely gone. The president has the authority to declassify the full report’s contents, but that seems extremely unlikely given Trump’s positions. Before leaving office, President Barack Obama managed to save a copy in his presidential archive. So even if the Trump administration has all the copies of the full report destroyed, there’s still one out there they can’t touch.

When the executive report was initially released to the public, we made note of the outrageous incidents described in there. But while those violent incidents described in the report got the most media attention, huge chunks of the summary were devoted to whether proper procedures were followed or not and whether the torture actually got results or not. As I noted at the time, you could switch torture out and replace it with any other massive bureaucratic process the federal government put together and see the same kind of debates. So it seems likely that the massive full report would also be focused on the deep procedural issues of how the torture came to pass. Nevertheless, Shamsi says the full report would contain important information, and Americans should support its release.

“What we know is that the full report provides a lot more information about what was actually done and how, and critically … it sheds greater light on the essential corruption that [came from] a determination to torture—Which is that the CIA lied to the White House other parts of the executive branch and to Congress,” she says. “Torture corrupts, and [the report] details the way torture corrupts and harms people along with institutions we care about.”

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Trump, Like His Predecessors, Refuses to Call Armenian Genocide a ‘Genocide’

Soldiers holding skulls. ||| Wikimedia CommonsToday is Armenian Genocide Remembrance Day—or, as it has been known by the U.S. government since 1975, National Day of Remembrance of Man’s Inhumanity to Man. That linguistic downgrade is symbolic, as the political drama around April 24 ever since has been whether the U.S. president will finally, in his Remembrance Day message, risk incurring the wrath of key NATO ally Turkey by calling the century-old Turkish-perpetrated genocide a “genocide.”

In a statement just before noon, President Donald Trump carried on the tradition of his predecessors by declining to use the G-word:

Today, we remember and honor the memory of those who suffered during the Meds Yeghern, one of the worst mass atrocities of the 20th century. Beginning in 1915, one and a half million Armenians were deported, massacred, or marched to their deaths in the final years of the Ottoman Empire. I join the Armenian community in America and around the world in mourning the loss of innocent lives and the suffering endured by so many.

As we reflect on this dark chapter of human history, we also recognize the resilience of the Armenian people. Many built new lives in the United States and made indelible contributions to our country, while cherishing memories of the historic homeland in which their ancestors established one of the great civilizations of antiquity.

We must remember atrocities to prevent them from occurring again. We welcome the efforts of Turks and Armenians to acknowledge and reckon with painful history, which is a critical step toward building a foundation for a more just and tolerant future.

Trump’s statement is almost indistinguishable from what Barack Obama said in 2016. But at least Trump, unlike Obama (and Hillary Clinton, and Samantha Power…and John Kerry, and George W. Bush and Bush’s dad) didn’t make pious promises on the campaign trail to at long last call genocide by its proper name, only to sell the Armenian diaspora down the Bosphorus within months of gaining power.

There is no doubt that replacing the phrase “mass atrocities” with the word “genocide” would cause a tremendous amount of upset in bilateral U.S.-Turkish relations, given how much of Ankara’s diplomacy is bent on this one issue. (Turkey categorizes the Armenian dead as casualties of war rather than victims of targeted ethnic slaughter, and does not take kindly to anything that sullies the reputation of Kemal Ataturk, the post-Ottoman founder of the country.) There is also no significant doubt among historians that what happened from 1915-24 was indeed a genocide.

I have long argued that the promise-breaking on this issue by humanitarian interventionists such as Power (whose nickname used to be “genocide chick”) illustrates a fundamental paradox at the heart of both neoconservatism and the Responsibility to Protect: In order to uphold the high-minded principles you are invoking while attacking another country, it becomes logistically necessary to flagrantly violate them.

Trump, who campaigned on a set of foreign policy ideas that fall much closer to the tradition of realism, demonstrates in his continuation of his predecessors’ policies a truth about realpolitik: It is situational and transactional on its face. You can’t be a hypocrite if you dispatch with the idealism up front.

Is there another option? In the real world, probably not. Nonetheless, I prefer the Vaclav Havel-influenced approach of former U.S. ambassador to Armenia John Marshall Evans, a career diplomat who was shepherded into retirement after daring to utter the G-word: Just call things by their proper names. Pathologies tend to compound over time when indulged instead of confronted. And yes, those include pathologies nurtured in Washington as well.

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“It’s All About Oil Now”: Citi Charts The Biggest Risk To The Global Reflation Trade

Despite today’s surge in global equities, which may be as much driven by the France relief rally as the unwind of recent hedges, the latest attempt to reignite the reflation rally is fading as US Treasury yields have given up on much of the overnight move, following two weaker than expected “soft data” reports, the CFNAI and Dallas Fed, released earlier today.

 

However, while today’s soft data disappointed, there real reasons are to be found elsewhere. First, as Citi itself points out, discussing its own economic surprise index, Citi’s ESI has slumped and the underlying data has also turned down, and adds that in both cases, this has occurred at levels where previous post 2009 data cycles have turned over.

This also goes back to the previously discussed record divergence between soft and hard data (which has been closing fast in recent days), and where the hard data is struggling to follow the lead of the stronger soft numbers, “bonds at least are still following the hard evidence.”

But there is another, more troubling factor when looking forward, and one which may be a far greater hindrance to the reflation trade in general as well as interest rates in particular.

Recall what Eric Peters said two weeks ago: “Pretty much everything that happened in 2016 can be explained by two things; China and oil prices,” he said. “Literally, that’s it. China’s stimulus-induced rebound and the oil price recovery is all that mattered.“

Well, as we noted recently, the China reflation trade is now fading as a result of the collapse in China’s credit impulse.

 

Which leaves only oil in the driver seat for the future of the reflation trade. And it is here that a flashing red sign has emerged.

As Citi’s Jeremy Hale wrote over the weekend, “inflation indicators have also turned lower. Key industrial commodities like iron ore and copper have breached supports, Chinese inflation surprises peaked in February and our US ISI will drop sharply in April after the March CPI miss. Oil prices are holding up helped by OPEC supply restraint so far. But the correction to the overshoot in medium term break-evens relative to oil continues.

 

Which brings us to Citi’s punchline on why it is all up to oil now: “unless oil really surges, year on year comparisons favour a sharp fall in G10 inflation surprises in coming months.“

Below we show what is the most troubling chart for those who still believe that the reflation trade is alive and well, courtesy of Citi:

Today, for whatever reason, not only is oil not “surging” to maintain the stronger year-over-year comps but is unable to catch a bid despite the broader risk-on euphoria  (prompting some to ask if there isn’t a fund liquidation quietly taking place in the background).

In any case, if China is no longer a driving force in the global reflation trade (and may soon be contributing to deflation) and if oil can not even rise above $50, then the two key drivers behind the biggest risk-on impulse of the past year – certainly since the Shanghai Accord last February – will no longer be a factor, putting the future of the reflation trade in peril, especially if as has been the case recently, Trump is unable to make headway with his own fiscal spending agenda in the US.

It is also why two weeks after Deutsche Bank capitulated on its own short Treasury trade, Citi said “With all this in mind, we are going long TYM7, the 10y note future, targeting 2% 10y yields with a stop on the generic yield at 2.35%.”

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Wayfair Tumbles After Amazon Launches Furniture Seller Program

It looks like another 'retailer' is about to be 'Amazon'-ed. Wayfair – the retail household goods seller – is tumbling this morning after Amazon reportedly pitches a new furniture seller program. Additionally, not helping the stocks, Citron's Andrew Left goes negative on the stock, comparing the company's controls to Madoff.

As FurnitureToday reports,

Speaking to about 40 retailer members of the Furniture Marketing Group buying group here, Amazon representatives in the furniture category said the e-commerce giant hopes to launch the new “Unified Delivery with Services” change to its platform late in the third quarter.

 

Under the plan, furniture sellers, such as stores, won’t be required to sell nationwide. The retailers will set their own pricing that can change with the services an Amazon customer chooses. White glove delivery (to a dry room) is the bare minimum service requirement — no drop-off at the door — but retailers can offer additional services, including delivery to the customers’ “room of choice,” set-up and haul away.

 

And the cost: Amazon is asking for a $39.99 monthly fee for an unlimited number of listings as well as 15% on the product sale and 20% on the services, according to Brett Hobson, Amazon business development representative in the furniture category. He added that retailers can choose to roll their services into the product price and offer just one price to customers for that 15% fee. However, in that case, Amazon shoppers wouldn’t see a menu of service options.

 

Read more here…

The result is not good…

And was not helped by Citron's Andrew Left comparing the company to a ponzi scheme...

Wayfair may have buyers excited about rock-bottom prices for home goods, but its business model is unsustainable, Citron Research analyst Andrew Left says.

 

"The accounts payable, the cash flow, the business model – it's stupid," Left said in a phone interview with Real Money. "They'll never make money."

 

Left, a notable short seller, says shareholders should be alarmed that a company of Wayfair's size, with more than 10,000 suppliers, uses manual internal controls, or does accounting by hand instead of automation. He compared the process to that used by convicted Ponzi? schemer Bernie Madoff, who personally supervised his company's manual process.

 

In other areas of concern to Citron, Boston-based Wayfair’s accounts payable comprises 50 percent of its total assets and are 10 percent more than its revenue. Its accounts payable is also more than its $100 million cash on hand, Left says in an unpublished report obtained by Real Money.

 

Read more here…

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The Mysterious Movements Of US Oil Production, Demand, Price, & Interest Rates

Authored by Chris Hamilton via Econimica blog,

In the midst of a bursting bubble in 2008, the Federal Reserve feared deflation would spiral out of control.  The Fed sought to reinstate "normal" inflation via abnormal means and what more immediate and impactful than indirectly goosing the cost of oil.  The chart below highlights the start of QE coincided with the bottom in oil, QE maintained the period of extremely high oil prices, and oil prices collapsed immediately upon the completion of the taper.

A close-up below of the exact period of QE plus a highlighted box on the extended period of $80+ oil once QE was fully in effect.  For $4.5 trillion in new dollars injected into the economy, the Fed had to get something!?!  And what they got were asset bubbles and expensive oil.

In fact, average prices for oil pre QE, during QE, and post QE are pretty telling.

  • Pre QE Era…Jan '00–>Nov. '08 = $50 average

  • QE Era…Dec '08–>Nov '14 = $87 average

    • Oct '10–>Nov '14 = $95 average & not a single month under $80!?!

  • Post QE Era…Dec '14–>Mar '17 = $47 average

Chart below is crude oil price vs. Federal Reserve balance sheet.  Apparently there is nothing to see here…just move along.

But when the Fed distorts markets, strange things happen.  For instance, why would equity prices continue rising absent QE while oil prices plummet?  Consider, from 2000 'til November of 2008, US shale oil or "tight" oil production increased just a hundred thousand barrels (from 400k to 500k) despite consistently rising prices and demand.  Noteworthy from '05 to '08 was the banking spread (the grey shaded area in the chart below) was minimal or negative.

However, in 2009 with the combination of the Fed's ZIRP (Zero Interest Rate Policy), a fat spread (incenting dubious loan issuance), and consistent $80+ oil prices…an essentially old technology was born anew with nearly free financing.  US tight production rose by over 4 million barrels in just a 5 year period (chart below).  So, the Fed's efforts to create inflation instead created over leveraged, oversupply, and further deflationary declines in oil that only continue.

But now the winds of change are blowing cold on US tight oil.  The Fed is raising rates, the spread is collapsing, the oil price is languishing in the mid range, and increased US production has the world oversupplied with oil.  The aberration that is US tight oil is not likely to thrive in these conditions…and more likely this is the epicenter of the next great American economic crisis.

Still, even more broadly, oil has me vexed.  Seemingly, US oil production has zero to do with price or consumption. In the chart below, two periods are circled where price soars, demand rises, and yet for long periods US oil production continually falls.

1973–>1981

  • +965% Price increase

  • <-6%> US Production decrease

  • US Consumption rises and then suddenly declines

1998–>2008

  • +700% Price increase

  • <-20%> US Production decrease

  • US Consumption rises and then suddenly declines

Perhaps it was coal or natural gas production that rose instead?  The chart below plainly shows total US fossil fuels production was flat to declining for 39 years from 1970 until 2009 when ZIRP and fat spreads set natural gas and tight oil free.  I'm truly very curious what exactly President Nixon agreed to when he concluded the period of Bretton Woods and initiated the Petro Dollar with OPEC?  The metamorphosis of US energy production pre and post Nixon's agreements is still shocking.

And below, just for giggles, the changing US consumption of different sources of energy since 1950.

The chart below shows the breakdown of US energy consumption growth since 1950.

Lastly, why growth is breaking down is so simple.  The chart below shows the stalling employment among the US 25-54yr/old population, the concurrent stall in total energy consumption, and the Fed's role to reduce the cost of debt to incentivize it's utilization at every level (private and public).

Below, a breakdown of the above plus GDP.

Below, a focus on the growth of federal debt vs. GDP over the different periods.

Breakdown of US core employment growth by period (below).

Breakdown of US energy consumption growth by period.  US Energy consumption growth has ceased following the absence of US core population and core employment growth (chart below, units are quadrillion BTU's).

And if the US oil market looks strange, perhaps you should look at the US Treasury and US equity markets…HERE and HERE.

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Does America Have a Technology Platform Monopoly Problem?

Last week, I wrote a post titled, What Can an Overhyped Silicon Valley Juice Company Tell Us About the U.S. Economy. Here’s how I ended the piece:

Finally, and perhaps most concerning, look at a couple of the entities that helped fund Juciero to the tune of $120 million: Kleiner Perkins Caufield & Byers and Alphabet Inc. (the parent company of Google). These are large, sophisticated players and they bought into this thing. From what I can tell, they were mesmerized by the fact the machine looked like and iPhone, connects to the internet, and was headquartered in San Francisco. Either that, or they knew the whole thing was a marketing scheme designed to trick morons into spending an enormous sum of money for the right to buy expensive juice packets that could probably be emptied just fine using a $20 machine.

Neither of the above conclusions is comforting. Either high-profile VCs were tricked by this ridiculous product, or they willingly went along with a what appears to be a sleazy scheme. Unfortunately, the bottom-line here seems to be that Silicon Valley is rapidly running out of ideas. That, or perhaps something far more perverse and systemic might be going on.

Tomorrow’s post will attempt to address the above question, but for now it’s safe to say that this Juicero episode bodes very poorly for the one area of the U.S. that had heretofore been one of the last remaining hubs of innovation.

If this is the state of Silicon Valley, the American economy is in even worse shape than I thought.

Today’s post should be seen as the promised followup to the piece above, and will focus on the related question increasingly pondered by a wide variety of people as relates to America’s modern day technology platform monopolies, specifically: Google, Facebook and Amazon.

Matt Stoller is a policy thinker currently focused on the concepts of monopoly and competition, something which he believes is an under appreciated factor in the current sluggish, rent-seeking orientated U.S. economy. I share many of his concerns and find his work extremely useful and timely.

In that regard, I want to highlight some excerpts from a recent post he wrote on the topic, titled, The Evidence is Piling Up — Silicon Valley is Being Destroyed.

From Business Insider:

continue reading

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