China Orders Shut Down Of 1,200 Factories After Smog “Red Alert” Declared In Beijing

In addition to its now traditional credit-funded boom-bubble-bust cycle which rotates from asset to asset, and is then promptly recycled courtesy of the nearly $35 trillion in various financial system “assets”, another staple of the “new” Chinese economy are smog alerts following every burst in economic strength driven by “old economy” manufacturing.

That’s what happened overnight, when following months of manufacturing expansion, China’s pollution problem has again caught up, and as a result Beijing’s city government ordered 1,200 factories near the Chinese capital, including a major oil refinery run by state oil giant Sinopec, to shut or cut output on Saturday after authorities issued the highest possible air pollution alert.

At 4:20pm on Friday afternoon, China’s environmental watchdog issued a five-day warning about choking smog spreading across the north and ordered factories to shut, recommended residents stay indoors and curbed traffic and construction work, as the main Chinese news agency tweeted “Smog invades Beijing,” while posting a timelapse as well. Another tweet from Xinhua showed the skies blackening on Friday.

Such “red alerts” are issued when the air quality index (AQI), a measure of pollutants in the air, is forecast to break 200 for more than four days in succession, surpass 300 for more than two days or overshoot 500 for at least 24 hours.  The Beijing Municipal Environmental Monitoring Centre showed an air quality reading of 297 by Saturday afternoon as haze started to envelop the capital, after an earlier reading of around 120. Levels in the 301-500 band are considered hazardous to health.

Primary schools and nurseries will remain shut down until Wednesday, when the smog situation is supposed to end, according to Xinhua. Old and ‘dirty’ vehicles have been banned from the roads, while polluting industries were told to halt or minimize their work.

Traffic on the city’s roads was lower than usual as residents complied with limits on car use and many of the city’s 22 million residents sat out the haze at home. “I’ll just take a rest and not go outside,” said Wang Jianan, a 23-year-old Beijing resident and teaching assistant. With Christmas just a week away, others resorted to dark humour to help cope with the latest episode of toxic air.

Chinese media reported that at least 388 people have been fined for lighting outdoor barbecues and fires.

* * *

Beijing, with its population of 21 million, wasn’t the only city to declare a red alert, the Chinese ministry of environmental protection said, listing 21 other cities hit by pollution, including Tianjin, Shijiazhuang, Taiyuan, and Zhengzhou.

The red alert was one year ago as part of a four-tier warning system inaugurated in 2015 in the framework of the country’s war on pollution. Nevertheless, in February, Beijing had to raise the red alert threshold.

A red alert is currently declared if the average air quality is at 200 AQI (air quality index) for four days in a row, 300 for at least two days, or 500 for a single day. An initiative to build wind corridors through the capital to help alleviate the smog was announced in February. The ventilation corridors are to measure 80 to 500 meters and connect parks and rivers, highways, and tall buildings.

As RT adds, in January China closed down some 2,500 polluting companies to lessen the smog, while admitting that the country is unlikely to meet its anti-pollution goals by 2030. The hazardous air underscores the challenge facing the world’s second-largest economy as the government battles pollution caused by the coal-burning power industry and other heavy industry after decades of breakneck economic growth.

The good news is that for China smog has become a natural peak “output absorber”, as any time the “old economy” overheats to boost goalseeked GDP, usually after a few months of record credit expansion like now, the air becomes unbreathable, and Beijing is forced to enforce an economic slowdown to dissipate the pollution, which in turn leads to an economic slowdown, and a break in the credit impulse, forcing even more credit creation to restart the cycle the next time.

The bad news is that China’s smog is wreaking havoc on the health of the domestic population, and although the country has made “huge progress” in tracking the sources of pollution, the risks to its citizens’ health remain. “There isn’t much research on the relation between air pollution and lung cancer in China, and even less with accessible research results. It’s sensitive. The government does not want to cause panic among the public,” Beijing-based environmentalist Ma Jun told the New York Times earlier this week.

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4 Schools Go into Lockdown, Call Cops on Man with an Umbrella

UmbrellaIt’s a gun! No, it’s a sword!

Whatever it was, two different people spotted a man carrying it near Poly High in Riverside, California. They saw something, and said something. As a result four local schools went into lockdown mode yesterday.

Police hunted for the menacing maniac and finally, according to The Press Enterprise, “a campus supervisor at Poly spotted a man who matched the description given by both callers.”

The weapon he was carrying?

An umbrella.

The lockdowns were lifted, but the threat continues: Rain is in the forecast.

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Love Your Homemade Quilt? Thank Capitalism: New at Reason

A patchwork quilt covering a bed in a country B&B or hanging on a museum wall evokes nostalgia for simpler times. Using simple shapes—triangles, squares, trapezoids, octagons—and the clever arrangement of color and pattern, the quilters of a bygone era created beauty and utility from what we wasteful moderns might simply discard. Symbolizing handicraft and thrift, quilts seem simultaneously old-fashioned and countercultural, an authentic alternative to impersonal industry. Not surprisingly, American quilts enjoyed their first renaissance in the 1920s, their second in the 1970s—both periods of rapid social change.

In reality, though, patchwork quilts wouldn’t exist without trade, industrialization, and material abundance. They are the physical embodiment of what economist Deirdre McCloskey calls the Great Enrichment: a bourgeois art par excellence. If you love patchwork quilts, writes Virginia Postrel, thank capitalism.

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Silly Labeling Rules on Hard Cider Deny Drinkers Info: New at Reason

ciderIn The Cider House Rules, John Irving’s 1985 novel, the guidelines to which the book’s title refers are a set of rules posted in the Maine cider house where much of the book’s action takes place.

If workers in a fictional cider house are subject to an array of sometimes-sensible rules they often ignore, real-world cider-house management is stuck having to comply with oftentimes-idiotic rules for which compliance is not optional.

We’re talking about government rules, of course. And these rules, you may be surprised to learn, can be complicated. Baylen Linnekin explains a federal regulation that keeps cider makers from disclosing vintage year information.

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BuzzFeed And The NYDN: Click-Bait Headlines, False Stories, And Virtually Nonexistent Retractions

Submitted by Duane via Free Market Shooter blog,

On Thursday, December 1st,  Yasmin Seweid was allegedly assaulted by Trump supporters in NYC.  According to BuzzFeed and the NY Daily News, the attack took place at the uptown 6 train stop at 23rd Street in midtown Manhattan.  The assaliants allegedly called Seweid a terrorist, broke her bag strap, followed her when she tried to get away from them, and tried but were unable to pull her hijab off of her head.

Both Tamerra Griffin and Ben Kochman, the authors for BuzzFeed and the NYDN stories, did not include any additional sources for their story, other than Seweid’s personal account and a statement from police that the “investigation was ongoing” with no further comment.  It seems both read her Facebook post recounting her story (which has since been removed), and after speaking with her, they took it and her account of the incident as fact, without verifying her story anywhere else.  Even though Seweid was their sole source for the story, they didn’t even bother to include the word “allegedly” as I did in italics above.  The NY Daily News said Seweid stated the following:

They kept screaming Trump’s name at her, and then said, “Oh look, a (expletive) terrorist,” she said.“ Get the hell out of the country!” they yelled during the train ride. “You don’t belong here!”

 

When Seweid ignored them, they pulled on her bag to get her attention and the strap broke.“That’s when I turned around and said ‘can you please leave me alone,’ and they started laughing,” she said. She walked to the other end of the train, and they followed her and tried to pull off her hijab, a head covering worn by Muslim women.“ Take that thing off!” they hollered.

 

“I put my hand on top of my head to hold it,” Seweid said. “Then I turned around and screamed ‘what the (expletive).’ ” Seweid got off the train at Grand Central Terminal on E. 42nd St. and reported the terrifying incident to police.

 

Her father, Sayeed Seweid, 55, of New Hyde Park, L.I., said he was also angry that no one else stepped in to defend his daughter.“ Nobody even offered to help an 18-year-old girl,” he said. “That means something. Her phone was dying. You offer help — it doesn’t matter the race, religion, or the country.”

Yes, in overwhelmingly “accepting” and liberal NYC, which voted 87% for Hillary Clinton and 10% for Donald Trump, a Muslim woman was attacked by Trump supporters on a subway platform directly under the Credit Suisse building in a very safe part of Manhattan.  Not only that, no one stepped in to help, and even more surprisingly, no one recorded the incident and splashed it all over social media.  And no police officer was able to readily verify her account to reporters with confirmation from the vast network of surveillance cameras that are omnipresent in NYC.

The only time I would ever expect to hear this story is if it were prefaced with the words, “I’ll take stuff that never happened for $400, Alex.” 

In fact, the story would have been much more believable if it was a Trump supporter who was being harassed and attacked.  Back in August, some guy who was wearing a “Make America Great Again” hat tried to walk through the public park surrounding City Hall.  Unfortunately for him, he just so happened to be walking through a police protest, but the protesters turned on him, shouting and shoving him out of the park to the chants of “racist out” and “fascist out”, while police stood by without intervening.  Of course, video of the whole incident was captured and posted on social media:

As the NY Post reported, protesters took to the streets in force after Trump won the election, chanting “not my president” and “Trump Is Hitler” all over Manhattan, even using a noose to hang a Trump effigy in Columbus Circle.

 

If you heard a story about a Trump supporter and an attack on an NYC subway, and just after this election, wouldn’t you expect it to be a Trump supporter getting attacked by a group of anti-Trump assailants, and not a group of Trump supporters doing the attacking?  And no matter what happened, wouldn’t you expect to see a video of the incident?

You certainly should.  As an example, in the days after the election, GotNews founder Charles C. Johnson was on an NYC subway wearing a “Make America Great Again” hat, minding his own business, when he was repeatedly harassed by someone who was angry with Trump’s election.  Once again, the whole incident was captured on video and splashed all over the internet, like so many other confrontations, altercations and assaults that take place on public transit that have been made quite popular on websites like World Star Hip Hop and LiveLeak.

And yet, BuzzFeed and the NYDN ran the Seweid story on her word alone, without any video, police or witness commentary to support her claim.  Notably, they presented her story as fact, never once stating that it could be fiction.  Given the attack’s alleged location and assaliants, if you were a journalist, wouldn’t you expect fiction to be the case, and not even bother running the story?

My sentiments exactly.  Though the NYDN was careful to post a follow-up story detailing discrepancies and doubts in her story, it wasn’t until almost two weeks later when she was arrested and formally charged by police for filing a false report that the NYDN acknowledged that their original story was totally bogus.  According to police, Seweid finally told them, “she didn’t want to get in trouble for breaking her curfew after being out late drinking with friends”, even though “she had numerous opportunities to admit nothing happened and she kept sticking by her story.”  And somehow, the original story remains up on the NYDN website, unedited and readily accessible to NYDN readers, and no retraction was ever published.  

As I have pointed out in the past, were any of the “fake news” websites listed by the MSM to do this, they would not only be called out by the MSM, they would instantly lose all of their viewers.  But somehow, people keep going back to the true purveyors of “fake news”, when they time and again demonstrate that they are not willing to hold themselves accountable for their mistakes.  Which is something that is readily apparent in the case of BuzzFeed, who has left their original story and click-bait headline up, and only posted the following addition below the title:

UPDATE: The woman was arrested on Dec. 14 for filing a false police report and obstructing government administration, police said.

TRUNEWS, who did an excellent job of covering a real, videotaped assault of a Trump supporter in Chicago, also did a superb job of summarizing the entire saga of the Seweid story.  I spoke with Edward Szall, the TRUNEWS correspondent who covered both stories, and he explained to me the specifics about how the Seweid story was run without question by the local news and the aforementioned outlets, noting the initial reaction to the story and the ensuing vilification of Trump supporters.  I’ve provided screenshots to the BuzzFeed comments section, which also remains up, so you have an idea of how exactly people reacted.

Note that you can see the doubt in the minds of some of the commenters.  Shocking, but hardly surprising; even BuzzFeed’s own comment section sees holes in the story that author Tamerra Griffin didn’t even bother to acknowledge at all.

And somehow, Seweid’s sister Sara is blaming the police for investigating the incident.  Yes, she really expects police to not be skeptical of a dubious allegation and not investigate her story.  WND reported what she stated in a Facebook post below:

…she said she was concerned about the “mental state of young Muslim women who feel that they have to lie so intensively to survive.”

 

She also wrote, “The NYPD should have never been involved in the first place even if the incident did happen. It became super clear to me these past two week [sic] that the police’s first instinct is to doubt your story and try to disprove it.”

 

Sara Seweid also blasted the police: “The NYPD doesn’t care about us or our safety. Never did.”

 

Then she went on to attack the media: “Things snowballed out of our control because of the media because by the next morning the news had started publishing stories. Reporters made things so much worse for my family.”

As ridiculous as she sounds, Sara Seweid makes a good point – we never would have heard about this story if it wasn’t for irresponsible reporting from outlets like BuzzFeed and the NYDN.  But in her post, she of course omitted the obvious fact that Seweid retold her lie to the media on her own. 

If journalists and publications plan to stay in business and retain readers, they will need to do a better job of providing tangible content that isn’t later proven to be completely fabricated.  If they don’t, they’ll soon find their names in the constantly growing list of defunct newspapers and websites.  BuzzFeed and the NYDN will need to learn that not only do they need to publish truthful stories that are credible and honest, they need to do a better job of owning up to their mistakes and retracting them.  It wouldn’t have taken more than a couple seconds to verify that Seweid’s story was dubious – they shouldn’t have posted it almost as much as Seweid shouldn’t have told it.

Look, we’ve all been teenagers and made teenage mistakes.  I’ve certainly made much bigger mistakes than coming home “after curfew” and dating someone my parents didn’t approve of, and you probably have too.  But, I’ve always faced up to the consequences of my decisions.  With Seweid’s indiscretions now being front page news, its fair to say that she is certainly facing up to the multitude of mistakes she made, and it almost feels unnecessary to write this article as a result.

But, Seweid needs to be held accountable for what she did.  Not only did she foolishly get the police and media involved in her ridiculous attempt to cover her tracks, she made a false accusation.  If someone ended up being accused of a crime against her, it could have been even more damaging personally and professionally as whatever Seweid is facing, from either the authorities or her parents.  What if it was you on that subway platform who was accused of assaulting her, and you got dragged before the police and falsely charged with a crime? 

What should her punishment be?  You’ll have to trust the courts to sort that one out properly.  Should her parents have punished her over this incident and being “upset she was dating a Christian” by shaving her head and eyebrows prior to her arrest, and having her display it by not wearing her hijab?  You’ll have to decide that one for yourself.

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Government Fears Bitcoin Will be As Awesome as Bitcoin Fans Hope It Will Be

For a half-decade or so, crypto-anarchists, libertarians, and freaks of all varieties of anticipated that the alt-coin called bitcoin will upend all the powers and principalities of banking both government and private, credit, and perhaps even the legal system, IP system, rideshare system, and stock market via innovative use of the blockchain technology underlying it.

This week a bunch of federal sources decided to tell Newsweek that they agree, though they are nervous as hell about it, not excited.

The story, by reporter Leah McGrath Goodman, begins with a bizarre and pointless lede about a southern African portmanteau currency made by white nationalists exclusively for whites, that is irrelevant to anything about the story and I’m not sure why it was mentioned at all.

From there, she reports via voices such as Juan Zarate, a senior adviser at Washington think tank Center for Strategic and International Studies; Joshua Baron of the Rand Corporation; Yaya Fanusie, a former counterterrorism analyst for the CIA; Bala Venkataraman, global chief technology officer of banking and capital markets for Computer Sciences Corp; and sources unnamed that:

hundreds of experts inside the nation’s defense and intelligence agencies, as well as private-sector researchers in finance, technology and various think tanks across the country—some of them under contract with the U.S. government—are now investigating how virtual currencies could undermine America’s long-standing ability to disrupt the financial networks of its foes and even permanently upend parts of the global financial system.

“Feature not bug” the cryptoanarchist edge of the bitcoin community—who are clearly becoming a smaller percentage of that relevant community since it’s beginnings—might say. But Zarate lets us know federal law enforcement never wants to lose the ability to cut off its enemies via cutting them off from the legitimate banking system.

The creation of an all-computerized, potentially anonymous, electronic banking system via blockchain makes this harder, and makes the feds upset and nervous.

Rand’s Baron told Newsweek that:

America’s enemies appear to have far more access in recent years to the kinds of advanced technology and encryption tools that would allow them to potentially design a virtual currency that could circumnavigate the global financial system. “We are seeing a trend toward increasingly sophisticated cyberservices being put into the hands of unsophisticated players,” he says. And while this may be handy for privacy-savvy Americans, it can make it much harder for the government and law enforcement to fight terrorists and criminals, he says.

Baron does not seem to believe bitcoin as it exists will be that all-criminal virtual currency, as “the currency’s publicly visible ledger of transactions is too transparent to attract terrorists, criminals or enemies of the state” in the reporter’s summation. Though Goodman does report that, unsurprisingly, at least one terror propaganda organization, The Ibn Taymiyyah Media Center, accepted bitcoin to fund its efforts.

Venkataraman of “Computer Sciences Corp., a digital information-technology company whose sister firm, CSRA Inc., runs the IT backbone of the National Security Agency (NSA),” told Goodman that “with the introduction of Blockchain, a disruption of the global banking system is inevitable” and “in a cryptocurrency world, you know who becomes the bank?…You and I. You become not just the bank, but the central bank. And that can have enormous ramifications for things like sovereign authority. By 2040, I think we may be fully transitioned over to cryptocurrency. I don’t think anyone can stop it from happening.”

My reporting from when bitcoin’s dollar price first broke $500, in November 2013, with some background on its startlingly quick rise. It leapt above $1,000 for a bit, then dipped considerably but lately has been hovering between $700-800.

Bloomberg reports today that bitcoin was your best currency speculation deal for 2016. It “surged 79 percent since the start of 2016 to $778, its highest level since early 2014, data compiled by Bloomberg shows. That’s four times the gains posted by Russia’s ruble and Brazil’s real, the world’s top two hard currencies.”

But its value as a speculative investment vehicle, while potentially lifechanging to the smart and well-timed, ought to pale before its value as a world-changer, and forces in the federal government seem to agree.

I reported the other day on the IRS’s attempt to force large bitcoin exchange Coinbase to give up all sorts of customer identification.

Jim Epstein reported from Venezuela in a detailed feature in our January 2017 issue about how bitcoin’s properties give people suffering under stifling socialism at least a hope of a way out.

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Did Satellites Expose A Secret American Drone Hangar In A Saudi Desert?

Buried deep in the heart of one of the most barren deserts in Saudi Arabia, and the entire planet for that matter, a commercial satellite happened upon what appears to be a very modern airport that suddenly appeared out of thin air from one year to the next.  What makes the airport even more mysterious is the fact that there are no planes on site and no government claims ownership of the facility.  So, is this airport a mere “Border Guard” facility, as Google Maps would suggest, or did this satellite just happen to reveal the location of a secret U.S. military airport used to conduct drone operations in Yemen?

 

Certainly, the proximity to the Yemen border would make this an ideal location for drone operations.

Saudi Airport

 

And it does seem somewhat odd that such a massive airport, with 3 large hangars, would be required to conduct “border operations.”  Moreover, while we understand that the Saudi border police are probably using some pretty sophisticated prop planes to conduct their operations, it does seem a bit odd that not a single plane would be visible at the airport. 

Saudi

 

While we may never know the true owner/function of this mysterious facility, we’re almost certain that Russia hackers are behind the leak of it’s location.

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2016 Facts And Figures Quiz

As Nick Colas writes, one thing is certain: 2016 was a truly historic year. 

From Donald Trump’s unorthodox but successful campaign for President to the Brexit vote, popular votes shifted the course of global politics in ways very few could have imagined a year ago. Here is a brief quiz that highlights the year’s politics, developments in technology, and changes in the U.S. labor market/economic policy. 

The idea here, Colas writes, is to (hopefully) shed a little light and (more importantly) humor on the events of 2016 and what they might mean for 2017. Which stock has most contributed to the Dow’s move this year to 20,000? How’s the FANG thing working these days?  And how has a “Real” (60/40 stock/bond) investor done since Election Day (not great actually…).  Read on for the answers and a few other questions about the year. 

From Convergex’ Nick Colas

I am a big fan of the weekly National Public Radio show “Wait, Wait, Don’t Tell Me.”  It is, by NPR standards, a nonpartisan news quiz show that uses humor to inform.  If you don’t know the show, check it out.  If you do, you’ll recognize the spirit of the questions below.

The idea here is to highlight the most notable events of 2016 and place them into a greater context.  In conversations with scores of clients and friends in the last few weeks one theme comes up repeatedly: 2016 has been a truly momentous year.  Sometimes the years go by quickly because nothing much new happens.  This one is the opposite – 2016 feels like “You are there” history in the making.

Today we will cover Trump/Brexit, and bit of technology and economics.  We’ll finish off tomorrow with a few other subjects.

Topic #1: Donald Trump

Question 1: President Elect Trump uses social media to deliver his message directly to his supporters.  How many tweets/retweets has he sent since setting up his @realDonaldTrump Twitter account in March 2009?

  1. 7,881
  2. 22,001
  3. 29,909
  4. 34,121

Answer:  D. As of this Monday, Trump had sent a total of 34,121 tweets/retweets.  That is an average of 12 messages per day, every day.  And if you put this in historical context, not all that surprising.  FDR had his fireside chats using the then-relatively new medium of radio.  JFK’s good looks played well with television audiences.  Politicians understand that “The medium is the message”.

Question 2: While Mr. Trump has over 17 million Twitter followers, he himself only follows 40 accounts. Which one of these people is on that select list?

  1. Geraldo Rivera
  2. Piers Morgan
  3. YouTube personalities “Diamond and Silk”, two sisters from North Carolina
  4. Ann Coulter

Answer: All of the above.  Having the President-Elect follow you on Twitter is essentially the most exclusive club in the world.  By comparison, Augusta National Golf Club has more members, at about 300 currently.

Question #3: Which one of these is listed as a “Signature cocktail” at the bar at Trump Tower NYC? (check all that apply).

  1. “You’re Fired”, the bar’s take on a classic Bloody Mary
  2. “Make America Great Again”, an Old Fashioned with either rye or bourbon
  3. “A Big Beautiful Wall”, a frozen margarita made with American-sourced tequila
  4. “The Billionaire Martini”, with Premium Chopin vodka

Answer: A & D.  Worth noting: Mr. Trump himself does not drink alcohol. And if you want to try any of these cocktails, be ready for a wait.  Trump Tower is locked down tight at the moment, as anyone who has been to 56th and 5th can tell you.

* * *

Topic #2: Technology

Question #4: On July 22, 2016, a Japanese company made the very last unit of a product that profoundly changed the way the world consumed entertainment and information.  What was it?

  1. A black and white television
  2. A stereo cassette deck
  3. A VCR machine
  4. A cathode ray tube (CRT) television

Answer: C (VCR machine).  Phillips made the first mass market video cassette recorder available in 1972.  The product started to gain broad appeal in the late 1970s as popular movies became available for purchase or rental, allowing consumers to view content at home.  From there it is a straight line to Netflix streaming, Hulu and Apple TV.  And the global long term success of the VCR – 40-plus years in constant production – is a record that will likely never be broken.  For reference, consider that the iPhone is 9 years old.  Only 31 years to go….

* * *

Topic #3: Brexit

Question #5: What do Boston (England, not MA) and Gibraltar have in common when it comes to the Brexit vote?

  1. They had the lowest turnout of any region/country for the referendum
  2. They represent the two most extreme votes for Remain/Leave of any region/country in the U.K.
  3. They were the only two regions/country perfectly indifferent (exactly 50/50 votes) to the outcome
  4. None of the above.

Answer: B (the two extremes).  The town of Boston voted 76% to “Leave”, while Gibraltar polled 96% to remain, representing the extremes of the Brexit vote.  Also among the areas with a predominant “Remain” vote; many of the well-known cities in the U.K., including the City of London (75% Remain), Oxford (70%), Cambridge (74%), and Edinburgh (745).  “Remain”, however, only managed to win in three areas: Scotland (62%), London (60%) and Northern Ireland (56%).

In what is, I think, the deepest commonality with the U.S. Presidential election, Secretary Clinton also handily won most of the large American urban centers.  These include Manhattan (90%), Boston (85%), Cook County Chicago (78%), San Francisco (90%) and Los Angeles (75%).  The populist schism that has punched its hallmark into 2016 is most easily understood as a divide between urban/non-urban dweller, which makes it difficult to see how this social rift begins to mend itself.

* * *

Topic #4: Economics

Question #6: Who mused in a recent public speech about the merits of a “High pressure economy” where everything runs a little hotter than usual (wages, employment, inflation) to overcome the last vestiges of the Great Recession, and even cited their spouse to defend the merits of “Running hot”?

  1. Donald Trump
  2. Janet Yellen
  3. Mario Draghi
  4. Bill Dudley

Answer: B (Janet Yellen, in a speech titled Macroeconomic Research After the Crisis).  The key question of 2017 will, of course, be just how much “High pressure” the Fed Chair is willing to accommodate.  The U.S. central bank may finally get the fiscal stimulus it has requested for years, thanks to Mr. Trump’s plans to cut taxes, reduce regulation and spur infrastructure spending.  Will Chair Yellen and the Fed allow the U.S. economy to run hotter than normal in 2017/2018, or will they work to tamp down the animal spirits that President Trump and Congress want to encourage?

Question #7: By some measures, the U.S. labor market is back to essentially full employment.  But by others, it still shows troubling signs.  Which one of these issues still plagues the domestic labor market?

  1. Participation rates are still declining, with November’s reading below 60%.
  2. Teenage unemployment is higher than a year ago, at +16%
  3. Average weeks spent unemployed are still 30% higher than the prior worst-ever levels (back in 1984).
  4. Unemployment for those people with less than a high school degree is still over 10%.

Answer: C (Average time spent unemployed is 26 weeks as of November 2016, still far worse than any post-World War II recession).  If you have a friend who has been unemployed for more than a few months, you know this is true.  Perhaps their skills don’t meet what employers need.  Or perhaps there is a negative bias to the long term unemployed.  Whatever the reason, there are still 1.9 million people in the U.S. who have been unemployed longer than 6 months and still want a job.  In every prior recovery, it has taken them less time to get back to work.

* * *

Topic #5: Markets

Question #1: You probably know that Energy (up 29%) and Health Care (down 3%) are the best and worst performing large cap sectors in the S&P 500.  But what are the second best and worst sectors in terms of price performance?

Answer: Industrials take silver with a 20% price return YTD, and Consumer Staples (up 4%) get the steak knives for second worst.

Question #2: The Dow Jones Industrial Average is knocking at the door of 20,000.  What stock has contributed the most this year to getting the Dow to this level?

Answer: Goldman Sachs (GS) represents 440 points of the Dow’s 2,480 point move this year, or 18% of the total.  Other major contributors: UnitedHealth (340 points), Caterpillar (230 points) and IBM (220 points).  Goldman now has an 8.2% weighting in the Dow, the largest of any of the 30 components, so watch that name in the final sprint to 20,000.  And in case you were wondering, Apple’s move this year (up 9%) only adds about 60 points to the Dow.


Question #3: Over the last few years, everyone was talking about the FANG stocks (Facebook, Amazon, Netflix and Google).  How did this group do in 2016, assuming an even weighted portfolio?

Answer: The average return for the FANG portfolio is 11.2% YTD, spot on the price return for the S&P 500) of 11.1%. 

Question #4: The S&P 500 is up 6.2% from Election Day, but how much is the classic 60/40 stock/bond portfolio up over the same period?

Answer: It depends on which bond proxy you use in the calculation, but a reasonable answer is a 2.6% return.  That is based on a broad bond market index, which is down 3% on a price basis since Election Day.  If you were only in long dated Treasuries over this period (down 9.2% since Election Day), you are actually flat.


Question #5: If I asked you which ETF drew the most new money thus far in 2016, you’d probably guess SPY (SPDR S&P 500 ETF).  And you’d be right, with $20.3 billion of inflows YTD.  But which U.S. listed ETFs have seen the largest redemptions this year?

Answer: The ETF with the largest outflows is the Wisdom Tree Europe Hedged Equity Fund ($8.1 billion out).  Other ETFs with more than $5 billion of outflows this year to date: Deutsche X-trackers MSCI Currency Hedged Equity Fund ($5.6 billion), PowerShares QQQ ($5.6 billion), WisdomTree Japan Hedged Equity ($5.8 billion) and iShares MSCI EMU ETF ($6.7 billion).  Don’t take that as any measure of investment merit, of course – this is a data point about investment themes. 

Question #6: The long run average of the CBOE VIX is 20.  How many days in 2016 has the VIX closed higher than that?

Answer: If you guessed less than 20, you are wrong (41 days is the answer).  But the error is understandable, because during the second half of the year the VIX has only closed above 20 on 2 days (November 3 and 4).


Question #7: U.S. equity small caps have dramatically outperformed large caps this year, but the two most closely watched indices for this asset class have very different YTD returns.  The Russell 2000 is up 22%, where the S&P Small Cap 600 is up 27%.  Why?

Answer: Sector weightings go a long way to explaining the disparity.  For example, the S&P Small Cap Index has a 19% weighting to Industrials, where the Russell is only 15% exposed to that strongly performing sector. 


Question #8: President-Elect Donald Trump famously used Twitter as a cornerstone of his communication strategy during the campaign.  How much of a “Trump bump” did Twitter’s stock get this year from this high-profile use case for its technology?

Answer: Hard to say.  The stock is down 16.3% year to date, so draw your own conclusions.


Question #9: Simple question – which has done better in 2016: gold or silver?

Answer: It’s not even close.  Silver is up 22% and gold is only up 9%.  Earlier in the year (August) silver was up close to 50% and gold was 28% higher. 


Question #10: Who told Bob Woodward of the Washington Post back in April that “It’s a terrible time right now” to invest in U.S. stocks?

Answer: An easy one to close things out, because I am pretty sure everyone knows it was President-Elect Donald Trump.  Total return for the S&P 500 since that story ran: 11.3%, with more than half of that return coming since Election Day.  Now, I suspect everyone (including Mr. Trump) hopes he is wrong.  Or at least that his future policies will “Make US stocks Great Again”.

 


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Stunning Visualization Of The Flow Of International Trade

The interactive visualization you see in this post was created by data visualization expert Max Galka from the Metrocosm blog. (Also check out his new project, Blueshift, which allows users to upload data and visualize it on maps with no coding required.)

Trade is an essential part of economic prosperity, but, as Visual Capitalist’s Jeff Desjardins asks, how much do you know about global trade?

The stunning visualization below helps to map international trade on a 3D globe, plotting the exchange of goods between countries. It enables the abstract concept of trade to become more tactile, and at the same time the visuals make it easier to absorb information.

Click here for full interactive chart, enabling users to select a country to see its share of trade alone, or spin/navigate the globe by using your mouse.

EXPLORING THE MAP

The great thing about interactive maps is that they allow you to take control.

Here are a few things we found particularly interesting, as we scanned through the map:

  • When looking at the globe as a whole, trade is concentrated into obvious hubs. The United States, Europe, and China/Japan are the most evident ones, and they are all lit up with color.
  • There are also obvious have-nots. Take a look at most of the countries in Africa, or click on an individual country like North Korea to see a lack of international trade.
  • In fact, North Korea is completely vacuous, except for one lonely dot floating to China every so often. After taking a quick look at the data, it seems China takes in over 60% of North Korea’s exports, which are mostly raw materials such as coal, iron ore, or pig iron.
  • Now click on South Korea, and the situation is completely different. By the way, South Korea exports $583 billion of goods per year, while the hermit nation does just $3.1 billion per year.
  • This map also shows how dependent some countries are on others for trade. Look at Canada, a country that sends close to 75% of its exports to the United States. Mexico has a similar situation, where it does most of its business with the U.S. as well.
  • This is a stark contrast to Cuba, which doesn’t trade enough with any one partner to have it visualized on this scale at all. Cuba has exports of only $1.7 billion, and its largest trading partner is China, which only takes in $311 million of goods per year.

Want to see more on international trade? Check out this set of maps that shows China’s rising dominance in trade, or the flow of oil around the world.

via http://ift.tt/2hEaS7I Tyler Durden

How Come No One Involved in the Russian Hacking Conspiracy Talked?

Authored by Paul Craig Roberts,

The claims that the Russian government hacked US voting machines are absurd.

Voting machines are not connected to the Internet. To hack a voting machine you have to be physically in proximity to the machine and use a hand held device.

 

The machines can be programmed to throw the vote count to one candidate or the other, and there are other ways to interfere with elections.

 

Possibly if a foreign power had server presence in the US, some precinct reports of results could be intercepted and altered, although a voice check over the telephone is an easy way to verify the electronic transmission. What is clear is that Russia cannot hack the voting machines.

What about the claims that Russia hacked Hillary’s emails and used a network of 200 Internet websites to convince the American people to vote for Trump?

Wikileaks, which released the emails, said they were a leak, not a hack, and that they did not come from Russians. The FBI and the Director of National Intelligence do not support the CIA’s claims. Or should we say claims attributed to the CIA as apparently the source of the claims, like the source of PropOrNot, is unknown.

And look at the size of the alleged conspiracy—the Kremlin and 200 websites. Surely someone would have talked!

John McCain says he is sure Russia did something and we need a congressional investigation to find out what.

Why not start with an investigation of PropOrNot and what they are up to?

We also need an investigation why Americans living in big cities on the NE and West coasts were immune to Russian fake news, whereas the geographical bulk of the country succumbed to the Russian fake news instead of to the presstitute fake news that conquered the NE and West coasts.

The FBI says that the claims attributed to the CIA would not stand up in court.

So what are the claims all about? Who is behind them?

 

Are there elements within the CIA committing treason by working against president-elect Trump?

 

Are there elements in the US Congress committing treason by trying to sway electors with fake news resting on unattributed claims that the Russians, not the American people, elected Trump?

 

Why these claims in the absence of proof?

What we are experiencing in the delegitimization of Donald Trump is an extraordinary rejection of democracy by elements in the government and by the presstitutes.

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