iftttwall

Now that repealing Obamacare is out of the picture indefinitely, here is what the timeline looks like for the balance of Trump’s policy agenda, which includes reform of Trade, Budget and Tax policy, courtesy of Barclays, which takes a pessimistic outlook for what is in store and writes “Trump’s short-term agenda (reforms of healthcare, taxes, and trade policy) seems overly optimistic and has met resistance; healthcare’s lack of progress begs the question – is this GOP Congress an opposition party or a governing party?” We should know the answer once Trump/Ryan try to pass the next key item on the Trump agenda: the much anticipated tax reform.

Some additional thoughts from Barclays:

Healthcare may negatively affect tax reform negotiation, as the GOP needs to transition from a party of opposition to a party that governs.

• Healthcare: House delays American Health Care Act (AHCA) – The GOP’s goal is to minimize intra-party struggles, re-focus on comprehensive tax reform, and leave the option to revisit healthcare
  • GOP calls to repeal and replace ACA over the past seven years were more political rhetoric than an actual plan. GOP has not resolved an internal dispute with healthcare’s three-legged stool – the individual mandate, providing subsidies, and enforcing the guarantee for pre-existing conditions – as removing any one of them requires trade-offs between cost and coverage
  • We expect an intense intra-GOP fight, especially between the president and Speaker Ryan. There are concerns that the GOP domestic policy agenda could dissolve, but we think this delay will increase efforts to pass tax reform (or targeted tax cuts) before the Nov 2018 mid-term elections
• Tax Reform or Tax Cuts: GOP to re-focus immediately on taxes and pursue comprehensive reform, with a goal of passing legislation by August, well before the 2018 mid-terms
  • Outlook: Comprehensive tax reform will very likely meet significant obstacles, as there are limited revenue raisers to offset the proposed substantial tax cuts. We think tax reform could evolve to tax cuts (corporate rates possibly from 35% to 20-30%) and a repatriation of foreign earnings (potentially taxed at 8-15%). The House-proposed border adjustment tax (BAT) faces hurdles, given concerns of price increases, WTO compliance, and possible domestic job losses. Current costs of individual tax cuts will likely alarm fiscal hawks; we expect a more muted plan than the current one
• Trade: Administration aims to implement protectionist measures (eg, tariffs), as they view this form of economic nationalism as spurring long-term growth
  • NAFTA process has started; expect formal notice to trading partners shortly

And as an added bonus chart, here is Barclays on its take of Trump’s proposed Tax reform, which the GOP Aims for August, but expect late 2017 or early 2018: “While GOP-led Congress aims to use budget reconciliation (FY2018) to pass tax reform, politics of ACA reform will complicate tax negotiations”

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Elon Musk, Silicon Valley’s automotive visionary, loves to wow the world with grandiose visions that serve primarily to reinforce his position at the top of the list of tech titans.  That said, at some point we suspect his shareholders will actually expect him to perform against his ‘visions’ rather than simply talk about them.

And while one can never be sure just how many chances investors in this frothy market will allow Musk before turning on him and his aggressively priced stock, it appears as though he isn’t doing himself any favors with his recent Model 3 production guidance.  As Bloomberg points out this morning, Musk is guiding the market to production volumes of 10,000 Model 3’s per week by 2018, or roughly 5x his current volumes for the Model S and Model X, combined.

First, Musk said the company is placing orders with suppliers for “1,000 cars a week in July, 2,000 a week in August, and 4,000 a week in September.” 1 Tesla then plans to increase production to 5,000 cars a week by the end of the year, and 10,000 a week by the end of 2018. For context, the company is currently able to make about 2,000 Model S and Model X cars a week.

 

And while it’s certainly reasonable to assume that a lower-priced Tesla will have more of a mass market appeal than previous, more expensive models, it just might be a stretch to assume the new car will out sale the BMW 3 Series and Mercedes C Class, combined, in it’s first year of production.

For Musk to hit all of his targets, Tesla would need to build about 430,000 Model 3s by the end of next year. That’s more than all of the all-electric cars sold planet-wide last year. The rollout will begin in California and move east, focusing on U.S. reservation holders. Even if half of the Model 3 inventory shipped to other countries, U.S. sales under Musk’s targets would outpace the BMW 3 Series and the Mercedes C class—combined.

 

Another forecast Musk reiterated is that Tesla thinks it can build 500,000 total cars next year. 3  Model S and Model X growth would continue, but at a slowing rate. The chart below, as far as we can figure, is the ramp that Tesla is forecasting.

 

To sell that many $35,000 sedans in the U.S. “would be absolutely unprecedented based on what we know about car markets today and how people spend their dollars,” said Salim Morsy, electric car analyst at Bloomberg New Energy Finance. “It could happen. I’m pretty sure it won’t.”

Virtually every Wall Street analyst agrees. Even the most bullish among them don’t think Tesla can sell half a million electric cars next year, and Musk has a long history of never setting a deadline that he’s likely to keep.

Meanwhile, as we pointed out earlier this month (see “Tesla Admits It Still Hasn’t Completed A Model 3 Beta Prototype“), Car and Driver found an interesting “risk factor” in Tesla’s 10-K which basically cautioned that, despite aggressive production guidance slated to begin just 6 months from now, the company hasn’t even developed a Model 3 “beta prototype”….

And Car and Driver’s Anton Wahlman – who appears to be one of the few who actually read Tesla’s 10-K filing – may have found the reason for the doubts…

From the filing:

 

“We expect that the next performance milestone to be achieved will be the successful completion of the Model 3 Beta Prototype, which would be achieved upon the determination by our Board of Directors that an eligible prototype has been completed. Candidates for such prototype are among the vehicles that we are currently building as part of our ongoing testing of our Model 3 vehicle design and manufacturing processes.”

In other words, Wahlman points out, Tesla has not “completed” a Model 3 “beta prototype” as of, well, either of these two dates: December 31, 2016 (the period that the SEC filing covers), or March 1, 2017 (the date on which the document was filed). Pick your poison.

…but it’s totally fine because, as Bloomberg notes, Musk has plans to simply ‘revolutionize’ the automotive production process by simply skipping the beta testing phase.

Tesla is redefining how cars are developed, built, sold, and updated. Some of the tricks Musk plans to speed up the launch can only be done once. Others may transform the automotive industry much like Telsa’s over-the-air software updates. Here’s what we know:

 

Tesla is skipping “beta”—sort of. On Friday, Musk fired off a barrage of 50 messages on Twitter while on a flight to Cape Canaveral, Florida. Among them was a six second 4 , the first glimpse of what he calls a “release candidate” Model 3. The term is more typically used in the software industry, referring to a final version that’s almost ready for public release.

 

Musk is condensing the typical timeline for a car release. A traditional auto manufacturer spends about six months testing a beta cars prior to a rollout. Musk seems to have skipped a step, and is building test vehicles using the same equipment line that will feed mass production. If that’s the case—and this truly is a “release candidate”—then it implies that production is on track. The car looks very much like the vehicles Musk showed a year ago, and that fidelity to the original prototype will have helped keep engineers on schedule.

Of course, if beta testing phases are so irrelevant one has to wonder why the major OEMs spend 1-2 years, and millions of dollars, testing their vehicles before mass release…we’re sure it’s all just bureaucratic waste…

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Authored by Jeff Thomas via InternationalMan.com,

“They couldn’t hit an elephant at this distance.”

Those are purported to be the last words of General John Sedgwick, spoken as he observed distant Confederate troops during the 1864 Battle of Spotsylvania in Virginia. (Historians debate as to whether these were his very final words or amongst his final words, but there is no debate as to whether he then received a mortal bullet wound to his face.)

Going back a bit further, British Prime Minister Lord North commented in 1774, with regard to the rebellious American colonies, “Four or five frigates will do the business without any military force.”

Later, in August of 1914, Kaiser Wilhelm II (the last German emperor and king of Prussia) stated to German troops, “You will be home before the leaves fall from the trees.” He wasn’t alone. The phrase “The war will be over by Christmas” was a common one in Britain in 1914, often repeated by journalists and politicians.

Recently, US Lieutenant General Ben Hodges ordered over 60 US tanks to fire their guns in Poland. He later announced,

We're serious – this is not just a training exercise. It’s to demonstrate a strategic message that you cannot violate the sovereignty of members of NATO… Moscow will get the message – I'm confident of it.

The general has reason to be confident. It can be said with relative certainty that, if the US sends scores of tanks halfway around the world to a country that borders Russia, then begins firing the guns, the Russians will indeed interpret that as a warning that their sovereignty is no longer respected by the US.

Of course, they already have ample reason for concern, as, in recent years, the US tradition of détente has been dropped in favour of continual blackguarding of both Russia in general and its leader in particular. Every prominent television news programme in the US has kept up a steady stream of invective against Russia, often reporting stories that oppose what most of the world recognises as the truth.

As to the generals, history is full of stories of military leaders who have demonstrated overconfidence and even eagerness to attack other sovereign nations. Do they seek to fight a great war in order to leave behind a legacy of their own personal greatness, or are they simply delusional—imagining their opponents to be imminently defeatable and their own army to be undefeatable?

It matters little either way. The attitude has existed for thousands of years and countless military and political leaders have made the exact same mistake in every era.

Interestingly, one consistent trait that we can observe is the blind confidence that accompanies the bluster and bravado. Leaders have a tendency to picture the glory of the destruction that they desire and rarely, if ever, anticipate a devastating pushback from their opposite number.

This of course results in a very dangerous course of events – charging ahead without taking proper measure of what the opponent might do.

Virtually every war in recent history has taken far longer to undertake than was originally expected. With few exceptions, wars that were intended to take a few months at best have dragged on for years. In many, there was no truly positive outcome—a cessation of aggression rather than a clear “victory” for one side or the other.

But, in the bargain, countries (even empires) have had their populations decimated and their economies destroyed as a result of the dramatic drain in wealth that’s a by-product of warfare.

All the more vexing then, that grown-up schoolyard bullies that make careless threats against other countries often succeed in setting off the spark that leads to war.

At one time, these self-possessed blusterers often needed to carry the public willingness to fight under their own steam. Today, however, they have the extensive support of the media. Every major television news programme can be counted on to offer supportive commentary by retired generals, who often are employed by the military-industrial complex. Further, the news anchors themselves add to the rhetoric like trained chimpanzees, hooting in support.

It all makes for exciting theatre, but, ultimately, it’s always the people of the nation that pay the price.

The next time a general effectively claims that Iran or Russia couldn’t hit an elephant, his bluster may, as has occurred so many times in history, prove to be the flash point for the next major war.

*  *  *

There’s a good chance the US could back its way into a major war soon. But war or no war, New York Times best-selling author Doug Casey and his team think the US is on the brink of a major crisis. That’s why they are sharing this time-sensitive video. It’s packed with critical information on the looming economic meltdown. Click here to start watching now.

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Very much like the self-imposed output cut by OPEC and non-OPEC members which successfully boosted the price of crude over $50 even if global crude inventories “inexplicably” continue to hit new all time highs, one of the main reasons why commodity metal prices have seen a dramatic increase in prices over the past year has been China’s solemn vow to cut back on overcapacity and excess production. In 2016, China’s state council set out plans to eliminate 100 -150 million tonnes of steel capacity in a bid to restructure the economy from one driven by government-led infrastructure investment and exports to a more consumption and services-oriented model. Last January, the hub of China’s steel production –  the northern province of Hebei – announced it would cut output to ease pollution and help curb oversupply. Hebei said it planned to reduce steel output by 8 million metric tons in 2016, its Governor Zhang told local lawmakers, while Iron ore production would be cut by 10 million tons.

More than one year later, it appears that Governor Zhang lied about Hebei’s intentions, and according to a provincial notice by the Chinese province, it has emerged that China’s compliance with its own mandatory production cuts has been “problematic.”

A steel factory in Wu’an, Hebei province

According to Reuters, the same Hebei province, China’s biggest steel-producing area, launched a probe into steel overproduction in the city of Tangshan “amid concerns that firms have continued to raise output despite mandatory capacity cuts.“

Tangshan is the heartland of Chinese steel production. The city is home to the headquarters of the state-owned Tangsteel Group, which in 2006 merged with other companies to form Hebei Steel Group, the second-largest steel producer in the world. Located around 100 miles east of the capital Beijing, Tangshan is on the frontline of the country’s “war on pollution”, and was seventh on the list of China’s ten smoggiest cities in the first two months of this year.

Hebei was ordered by China’s central government to investigate firms in Tangshan that have “restricted but not cut production, restricted production but not actually cut emissions, and cut capacity but actually increased output,” the provincial dated March 25 said, and circulated by traders on Monday.

Cited by Reuters, an industry source based in Tangshan confirmed the veracity of the document, but said it was unclear whether the new round of inspections would have any immediate impact on production or prices. The document was issued by a special provincial policy team responsible for restructuring the steel industry. It said Hebei has already established an inspection team and Tangshan must begin its own investigations immediately.

The FT adds, that the notice, sent on Saturday, cites orders from President Xi Jinping and Zhang Gaoli, the vice-premier, for Tangshan to investigate the problem of falsely reported plant closures and rising steel output.

Tangshan produces around 90 million tonnes of steel a year, more than the whole of the United States. While China has pledged to slash steel capacity by between 100 million and 150 million tonnes over the 2016-2020 period to shore up prices and ease sector debts, there have been lingering suspicions that this may have been a ruse to push commodity prices higher, boosting cash flows of overindebted domestic producers, who employs millions of low-skilled workers and whose mass defaults could result in widespread social unrest.

The FT confirms as much:

local authorities have dragged their feet on implementing orders to shut down steel mills because doing so would potentially eliminate hundreds of thousands of jobs.

 

“The local government will always want to protect its own industries because company officials get promotions based on growth,” says Scott Laprise, the founder of steel research firm LTH Consulting. “No one gets a promotion because they lost jobs and their local economy did poorly.”

In addition to the cuts noted above, at the start of the year, Tangshan promised to shut a further 8.6 million tonnes of annual crude steel capacity in 2017. It pledged to make cuts of 40 million tonnes over the 2013-2017 period and had already shut 31.9 million tonnes by the end of last year. Hebei promised to cut crude steel capacity to less than 200 million tonnes a year in the province by the end of 2020, down from 286 million tonnes in 2013. It aims to shut 15.6 million tonnes in 2017.

However, in light of the recent revelation, it appears that local producers did not take the directives too seriously, and may have simply been stockpiling the excess production.

As Reuters adds, the Ministry of Environmental Protection has routinely named and shamed municipal governments in Hebei for failing to implement pollution rules; so far it has failed to achieve the desired result.

Of course, if one province is reneging on its production cut agreement, why not more?

That may indeed be the case: one month ago, Greenpeace said that China’s active steel capacity actually rose by 35 million tonnes in 2016 after the high-profile closure program focused mainly on shutting plants that had already been idled. Additionally, production of crude steel in 2016 actually rose about 1% from the year before, to 808m tonnes, according to preliminary data from the National Bureau of Statistics.

“The steel industry’s capacity reduction targets need to be upgraded to reductions in actual production – only then will we see real improvements in air quality,” said Lauri Myllyvirta, senior global campaigner at Greenpeace East Asia.

The problem is that just like with OPEC, there is no credible way of enforcing capacity cuts.

“Local governments will report back and simply say certain companies eliminated capacity or were closed or went bankrupt,” said LTH Consulting’s Laprise. “No one is checking what is supposedly already closed and what is actually closed.”

Excess production notwithstanding, China’s jawboning alone, and stated commitment to removing overcapacity, has managed to send prices of core commodities such as iron ore soaring as shown in the chart below.

Should it be confirmed that China was merely jawboning about removing excess supply then the appreciating commodity complex, a core driver of the global reflation trade which in recent months appears to have plateaued may soon see prices tumbling, in the process launching the latest deflationary wave to emerge out of China, and putting an end to the “global coordinated recovery” as so many analysts have called it in recent months.

It may already be happening: prices of iron ore, the key material used in steel production, tumbled fell 6.7% on Monday as inventories of the commodity at China’s ports rose. The fall brings the price to its lowest since January 10, down nearly 18% from its peak in March.

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Over the past several months President Trump has called out pretty much every major auto OEM for their efforts to move low-skilled assembly jobs to Mexico.  But absent new tariffs, it’s not terribly surprising to most people that American companies would seek to move low-skilled, labor-intensive jobs to lower cost labor markets…the math is pretty simple.

But what is somewhat surprising is how poorly the U.S. is performing versus international competition in the development of advanced manufacturing robotics.  As the Wall Street Journal points out this morning, when it comes to automating a manufacturing floor, buying robotics ‘Made in America’ isn’t even an option.

Vickers Engineering Inc. embodies the potential of American manufacturing. The New Troy, Mich., machining company supplies precision parts to clients including Toyota Motor Corp. and Volkswagen AG , and exports to Mexico and Canada. Its staff has risen fivefold and average pay has doubled over the past decade, says Chief Executive Matt Tyler.

 

What’s helping to power Vickers’s made-in-America success? Advanced Japanese and German factory equipment. When Vickers first bought industrial robots in 2006, it chose between only European and Japanese models, says Mr. Tyler, and has been adding Japanese robots ever since. “We were not aware of any American-made option.”

 

America is losing the battle to supply the kind of cutting-edge production machinery that is powering the new automated factory floor, from digital machine tools to complex packaging systems and robotic arms.

Commerce Department data show the U.S. last year ran a trade deficit of $4.1 billion in advanced “flexible manufacturing” goods with Japan, the European Union and Switzerland, which lead the industry. That is double the 2003 deficit. It was down from $7 billion in 2001, but much of the decline came from foreign equipment suppliers expanding in the U.S., not from an American comeback.

 

Meanwhile, U.S. firms are also losing market share at home, according to Germany’s VDMA industrial-machinery trade group. In 1995, they satisfied 81% of domestic demand for factory equipment. In 2015, the most-recent data, that had slipped to 63%.

 

And while the U.S. lags, China is looking to make aggressive moves in advanced manufacturing robotics and is seeking to move beyond its reliance on cheap labor to compete globally. Its ‘Made in China 2025’ strategy aims to dominate advanced manufacturing, in part through aggressive foreign acquisitions such as appliance-maker Midea Group’s purchase last year of Germany’s Kuka AG, a world leader in industrial robotics.

 

Of course, the U.S. wasn’t always the laggard in advanced manufacturing and actually dominated the space through the 1970’s when the domestic auto manufacturers were at their strongest.  But that all ended in the early 80’s as domestic auto production got cut in half and the USD strengthened.

The U.S. dominated advanced manufacturing through the 1970s, when the cutting edge was largely machine tools. Detroit was at the forefront. The world’s first industrial robot, the two-ton Unimate built in Connecticut, was installed in 1961 at a General Motors Co. plant in Trenton, N.J., according to the International Federation of Robotics, a trade group. GM and Ford Motor Co. tested robots through the 1970s. GM and Fanuc in 1982 created a joint venture.

 

In the 1980s, as U.S. manufacturing slumped, almost seven of 10 American machine-tool companies closed due to falling demand, the strong dollar and strategic miscues, according to a 1993 Rand Corp. study.

 

The decline continued this century as U.S. manufacturers outsourced more and baby boomers retired. Shrunken manufacturers demanded fewer production experts, accelerating the factory-technology decline. “In the U.S. there’s been a brain-drain in manufacturing technology,” says Alex West, manufacturing-technology analyst at London consultants IHS Markit.

Over the long-term, of course, the loss of low-skilled labor positions in the U.S. is inevitable.  Moreover, further regulations like minimum wage hikes and border tariffs will only help to ensure their long-term demise by making capital investment projects even more attractive.  But, without a presence in manufacturing robotics, all that capital is sure to flow overseas rather than into American households.

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Get ready for the future organic humans – Elon Musk is about to take transhumanism to a whole new level…

What’s Neuralink and do we still get to have sex in the future?

SpaceX and Tesla CEO Elon Musk is backing a brain-computer interface venture called Neuralink, according to The Wall Street Journal. The company, which is still in the earliest stages of existence and has no public presence whatsoever, is centered on creating devices that can be implanted in the human brain, with the eventual purpose of helping human beings merge with software and keep pace with advancements in artificial intelligence. These enhancements could improve memory or allow for more direct interfacing with computing devices. –The Verge

It’s pretty obvious what’s going on… Musk knows that the Earth is doomed – not from global warming, but because the sun’s output is decreasing and we’re going to enter into another ice age. Expect 7 Billion humans to try and cram together around the Equator, competing for increasingly limited resources – leading to civil war, death, and a huge setback in technological progress as humanity struggles to simply survive. We gotta get the fuck out of dodge.

So – Musk is taking us to Mars! He’s already mentioned nuking the atmosphere to unlock the Martian polar ice, which means all that’s left is to pool all of Earth’s resources and execute on his well thought out plans before it’s too late. Not so fast! Our feeble human bodies which are designed to live on earth, not Mars… In addition to massive cancer caused by unshielded exposure to solar wind – which the earth’s unique magnetosphere protects us from, human bodies will shrivel up in the low-gravity Martian environment, which is just 38% of earth’s.

So clearly we need radiation resistant cyborg bodies controlled by our organic brains for now, and eventually Musk will figure out how to create a positronic brain into which we will eventually upload our consciousness and live extremely long lives. Fully functional, hopefully. Plus, as Musk says, we’re going to need to be able to compete with AI – which will be able to think orders of magnitude faster than our clunky biological grey matter.

Also, consider this… If the human race becomes robotic – brains and all, we could conceivably build spaceships that would allow us to travel through vast distances of space over long periods of time. All we’d have to do is power down our brains, stow our robot bodies, then head towards the nearest habitable planet for a few hundred years at a fraction of the speed of light to see what’s there. If we find another utopian Earth-like planet, maybe we can genetically engineer biological bodies again to repopulate humanity the good ol’ fashioned way.

Then again, maybe Musk is just trying to test the limits of the simulation…

Elon Musk discusses the future of humanity, space travel, and living in a simulation… https://t.co/EHUQsOkBzP http://pic.twitter.com/ApN7CfLZTL

— ZeroPointNow (@ZeroPointNow) March 27, 2017

 

Content originally generated at iBankCoin.com * Follow on Twitter @ZeroPointNow

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Authored by Rakesh Upadhyay via OilPrice.com,

OPEC’s worries about the booming U.S. oil production have increased significantly with the big three oil companies’ interest in shale. Exxon Mobil Corp., Royal Dutch Shell Plc, and Chevron Corp., are planning $10 billion of investments in shale in 2017, a quantum jump compared to previous years. All the naysayers who doubted the longevity of the shale oil industry may have to modify their forecasts.

OPEC lost when they pumped at will as lower oil prices destroyed their finances, and now they are losing their hard-earned market share as a result of cutting production. Shell’s declaration that they can “make money in the Permian with oil at $40 a barrel, with new wells profitable at about $20 a barrel” is an indication that Shell is here to stay, whatever the price of oil.

The arrival of the big three oil companies with their loaded balance sheets is good news for the longevity of the shale industry.

The oil crash, which started in 2014, pushed more than 100 shale oil companies into bankruptcy, causing default on at least $70 billion of debt, according to The Economist. Even the ones that survived haven’t been very profitable, according to Bloomberg, which said that the top 60 listed E&P firms have “burned up cash for 34 of the last 40 quarters”.

Therefore, during the downturn, the smaller players had to slow down their operations, but this will not be the case with the big three.

“Big Oil is cash-flow positive, so they can take a longer-term view,’’ said Bryan Sheffield, the billionaire third-generation oilman who heads Parsley Energy Inc. “You’re going to see them investing more in shale,” reports Bloomberg.

The majors are attempting to further improve the economics of operation. Shell said that its cost per well has been reduced to $5.5 million, a 60 percent drop from 2013. Instead of drilling a single well per pad, which was the norm, Shell is now drilling five wells per pad, 20 feet apart, which saves money previously spent on moving rigs from site to site.

Shell is not the only one—Chevron expects its shale production to increase 30% every year for the next decade. Similarly, Exxon plans to allocate one-third of its drilling budget this year to shale, and it expects to quadruple its shale output by 2025.  

“The arrival of Big Oil is very significant for shale,” said Deborah Byers, U.S. energy leader at consultant Ernst & Young in Houston. “It marries a great geological resource with a very strong balance sheet.”

$30 billion has been spent on land acquisitions in the Permian basin since mid-2016, which is a favorite among oil companies.

Considering the new projects and the resurgent shale boom, Goldman Sachs expects oil output to increase by 1 million barrels a day year-on-year. The outcome is an oversupply in the next couple of years.

"2017-19 is likely to see the largest increase in mega projects' production in history, as the record 2011-13 capex commitment yields fruit," the U.S. investment bank said in a research note on Tuesday, reports Reuters.

The U.S. Energy Information Administration expects the U.S. oil production to top 10 million barrels by December 2018, a level only surpassed in October and November 1970.

OPEC is running out of options.

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In what is emerging as the latest headache for Donald Trump, a state-run Russian bank which has been under U.S. economic sanctions since 2014 disclosed on Monday that its executives had met Jared Kushner, Trump’s son-in-law and key policy adviser, during the 2016 election campaign. As reported previously, Kushner has been asked to discuss the contact, and a meeting during the same period with the Russian ambassador, with a Senate committee probing Russia’s alleged interference in the 2016 election.

Executives of Russian state development bank Vnesheconombank (VEB) had talks with Kushner during a bank roadshow in 2016 when it was preparing a new strategy, the bank said as reported by Reuters. “As part of the preparation of the new strategy, executives of Vnesheconombank met with representatives of leading financial institutes in Europe, Asia and America multiple times during 2016,” VEB said in an emailed statement.

It said roadshow meetings took place “with a number of representatives of the largest banks and business establishments of the United States, including Jared Kushner, the head of Kushner Companies.”

VEB declined to say where the meetings took place or the dates. U.S. officials said that after meeting with Russian Kislyak at Trump Tower last December, a meeting also attended by Flynn, Kushner met later in December with Sergei Gorkov, the CEO of Vnesheconombank. White House spokeswoman Hope Hicks confirmed the meetings.

That said, simply meeting with representatives of a U.S.-sanctioned entity is not a violation of sanctions or against the law, although we doubt the media will focus on that nuance.

A bigger circumstantial problem may be that Evgeny Buryakov, 41, a Russian citizen who worked at Vnesheconombank and whom U.S. authorities accused of posing as a banker while participating in a New York spy ring, pleaded guilty to a criminal conspiracy charge on Friday. Buryakov admitted in federal court in Manhattan to acting as an agent for the Russian government without notifying U.S. authorities. He was sentenced to 30 months in US prison.

Additionally, Gorkov, the bank’s chairman, graduated in 1994 from the Academy of the Federal Security Service of Russia, the Russian school for intelligence officials, i.e., spies. He later worked for the now-defunct Russian oil giant Yukos and state-controlled Sberbank before taking the top job at VEB. As the WSJ reminds us, the plunge in oil prices and Western sanctions over the Ukraine crisis had  pushed the bank into financial trouble, forcing the Russian government to undertake a bailout.

The White House said Kushner was simply doing his job by holding this meeting, although Obama sanctioned the bank in 2014 after the Ukraine coup and subsequent hostilities with Russia, and contacts with Russia have landed other Trump associates in hot water.

Earlier on Monday, White House spokesman Sean Spicer told reporters that Kushner is willing to testify to the Senate Intelligence Committee chaired by U.S. Senator Richard Burr, a North Carolina Republican. “Throughout the campaign and the transition, Jared served as the official primary point of contact with foreign governments and officials … and so, given this role, he volunteered to speak with Chairman Burr’s committee, but has not received any confirmation regarding a time for a meeting,” Spicer told reporters at his daily briefing. The Republican and Democratic leaders of the Senate panel also said Kushner had agreed to be interviewed.

Allegations by U.S. intelligence agencies that Russian actors were behind hacking of senior Democratic Party operatives and spreading disinformation linger over Trump’s young presidency. Democrats charge the Russians wanted to tilt the election toward the Republican, a claim dismissed by Trump. Russia denies the allegations.

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Authored by Mike Shedlock via MishTalk.com,

There have been 11 recessions and 11 recoveries since 1949.

The current recovery is the slowest recovery since 1949 and closing in on the becoming longest.

Growth since the 2nd quarter of 2009 is a mere 2.1%. The Wall Street Journal asks Is Two Percent as Good as It Gets?

“The growth seen during the recovery might, for a while, be as good as it gets,” the Federal Reserve Bank of San Francisco’s John Fernald, Stanford University’s Robert Hall, Harvard University’s James Stock, and Princeton University’s Mark Watson said in a study to be presented among Brookings Papers on Economic Activity.

Inquiring minds may wish to download the Brookings’ report entitled Disappointing Recovery of Output After 2009 but I found it a waste of time.

Okun’s Law 

The report was mostly mathematical gibberish based on Okun’s Law.

Okun’s law (named after Arthur Melvin Okun, who proposed the relationship in 1962) is an empirically observed relationship between unemployment and losses in a country’s production. The “gap version” states that for every 1% increase in the unemployment rate, a country’s GDP will be roughly an additional 2% lower than its potential GDP. The “difference version” describes the relationship between quarterly changes in unemployment and quarterly changes in real GDP. The stability and usefulness of the law has been disputed.

Clearly, Okun’s Law is at least as useless as any widely believed economic law, which is to say totally useless.

The supporting paper consists of 90 pages of largely unintelligible garbage such as the following.

Commendable Effort

The Wall Street Journal managed to condense 90 pages of nonsense down to 2 pages of nonsense. That’s a highly commendable effort, and the best one could reasonably expect.

Here’s the conclusion: “The causes aren’t entirely clear.”

I searched the 90-page report for the word “debt“. Care to guess the number of hits? I bet you can: zero.

Modern Day Snake Oil

I was discussing economic indicators with Pater Tenebrarum at the Acting Man Blog a couple of days ago. He pinged me with the correct takeaway.

Economic forecasting is not a science, and it is actually not the task of economic science to make forecasts (contrary to what is commonly asserted). Forecasting is akin to the task of the historian. Mises called speculators “historians of the future”.

 

Economic laws only play a role insofar as they can be used as constraints for a forecast. The problem is that all these models simply look at the data of economic history, at statistical series that always turn tail “unexpectedly”, driven by human action.

 

All these mathematical models are complete humbug. It is modern-day snake oil.

Still, it's pretty clear that the market cares nothing for top-down or bottom-up forecasts of economic activity…

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