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The war between Obama and the Republican Party over Scalia’s Supreme Court replacement just went nuclear.

One day after a 1992 video clip emerged of vice president Joe Biden emerged when the then-senator from Delaware said the Senate should not consider a Supreme Court nominee by president George H.W. Bush during an election year, this afternoon Senate Republicans went “all in” on a Supreme Court gamble, in which they vowed to deny holding confirmation hearings for any nominee from President Obama.

LETTER: ‘this Committee will not hold hearings on any Supreme Court nominee’ until 1/20/17 http://pic.twitter.com/rMKGkDOn58

— Mike DeBonis (@mikedebonis) February 23, 2016

The unprecedented decision, made before the president has named a nominee, marks a new chapter in Washington’s war over judicial nominations according to The Hill. In a battle of superlatives, CNN adds that the “historic move outraged Democrats and injected Supreme Court politics into the center of an already tense battle for the White House.”

“I don’t know how many times we need to keep saying this: The Judiciary Committee has unanimously recommended to me that there be no hearing. I’ve said repeatedly and I’m now confident that my conference agrees that this decision ought to be made by the next president, whoever is elected,” Senate Majority Leader Mitch McConnell said Tuesday.

He then added he would not likely meet with any nominee, a custom that high court nominees typically do before hearings. “I don’t know the purpose of such a visit I would not be inclined to take it myself.”

The decision to not hold hearings is a historic move from the Senate, which has regularly held confirmation hearings for nominees since hearings became routine practice in 1955, the Senate historian’s office said Tuesday.

McConnell was not alone: Senate Majority Whip John Cornyn said he also would not meet with a nominee. “I don’t see the point in going through the motions, if we know what the outcome is going to be. I don’t see the point in going through the motions and creating a misleading impression.”

Cornyn, a Texas Republican, told reporters at an afternoon press conference that the Republicans on the Judiciary committee submitted a letter to the Republican leaders unanimously opposing any hearing for a nominee to replace late Justice Antonin Scalia.

South Carolina Sen. Lindsey Graham said that’s the “consensus” view among Republicans on the committee and Cornyn said the same.

“We believe the American people need to decide who is going to make this appointment rather than a lame-duck president,” Cornyn said Tuesday as he left a meeting of top Republicans discussing how to handle the White House’s promised nominee.

Graham went so far as telling CNN he would not even meet with any nominee, should he or she make courtesy calls on the Hill. As did Sen. Tim Scott, a South Carolina Republican. 

The stakes for Senate Majority Leader Mitch McConnell (R-Ky.) and his conference are high. A Fox News poll released earlier this month found that registered voters want Obama and Senate leaders to “take action to fill the vacancy now” by a margin of 62% to 34%. A Pew Research Center poll released Monday found a majority of Americans (56%) say the Senate should hold hearings and vote on Obama’s choice to fill the vacancy, with 38% saying they should not hold hearings until the next president takes office.

“His vulnerable people are not going to get off the hook,” said Sen. Charles Schumer (N.Y.), Senate Democrats’ chief political strategist. “The public is demanding [action], huge groups are demanding it. We’ve seen data that the millennials care more about the Supreme Court than anybody else.”

Nonetheless, in a sharply worded statement on the Senate floor earlier Tuesday, McConnell bluntly warned the White House that the GOP-controlled Senate would not act on anyone he chooses to sit on the high court.

As The Hill adds, the fierce debate could also cause a breakdown in bipartisan relations, threatening legislation on the agenda for the rest of this year.

The biggest consequence may be the precedent it sets for future nominees to the nation’s highest court, however, in an era when parties have begun angling for the presidency earlier and earlier. If Republicans win the White House, Democrats are more likely to retaliate with filibusters to block judicial nominees.

In the short term, their position will give Democrats a political cudgel to pummel vulnerable incumbents facing reelection.

But McConnell sees it as a smart political bet. By “ripping the Band-Aid off,” in the words of one senior GOP aide, he is hoping to limit the political pain to a span of weeks instead of letting Democrats milk the issue for months.

 

Republicans know they’re not going to confirm Obama’s nominee to replace legendary conservative jurist Antonin Scalia. A liberal successor would dramatically change the ideological balance of the court.

Some see the move as strategically prudent: holding hearings this spring would allow the Obama administration and Democrats to shift the focus to the personal story of the nominee and away from the principle that a president should not make the pick in an election year. Democrats could stretch out stories about GOP obstruction for the rest of the year. Without Senate action, it will be tougher to fuel media interest.

“It’s a smart gamble. They elect him leader to make these kinds of decisions,” said the senior aide. “We were in the middle of a recess, everyone was scattered, and he acted rightly and decisively. Everyone has rallied around him.”

Others are not convinced and have warned that it would be a mistake to shut down Obama’s pick without a fair review. “It’s common sense to have hearings and then an up-or-down vote and say why you’re opposing a person,” said Rep. Pete King (R-N.Y.) in an interview. “To just say no [and have] no hearings, no vote, I think that puts us on the defensive. It looks like we’re afraid of something.”

One of the chamber’s most vulnerable Republicans, Sen. Mark Kirk (R-Ill.), wrote in an op-ed Monday that he and his colleagues have “a duty” to review and vote on the nominee.

Sen. Thom Tillis (R-N.C.), a member of the Judiciary Committee, initially warned that his party could “fall into the trap of obstructionists” if it rejects the nominee “sight unseen.”

On thing is certain, the Democrats are outraged and unleashed sharp criticism contending that the GOP-led Senate was failing to do its job and would be risking its tenuous hold on the majority in the fall elections.

Obama jabbed at Senate Republicans, tweeting Tuesday evening for Americans to tell the majority party in the Senate to “#DoYourJob.”

“Refusing to even consider the President’s Supreme Court nominee is unprecedented,” he tweeted.

Refusing to even consider the President’s Supreme Court nominee is unprecedented. Tell the Senate: #DoYourJob. https://t.co/kSrKv5e3Ae

— Barack Obama (@BarackObama) February 23, 2016

But best of all, even Trump is somehow now involved.

Senate Minority Leader Harry Reid said McConnell was taking his marching orders from Republican presidential front-runner Donald Trump, who had called on the Senate to delay consideration of any nominee.

 

“That’s exactly what the Republican leader is doing: Delay, delay, delay,” Reid said. He angrily added that “333 days isn’t enough to do the work that we do ordinarily do in 67 days.”

We eagerly look forward to Trump’s retort. And while we do, one thing is certain: if the Fed had harbored any hopes that some consensus over a fiscal policy stimulus would emerge in Congress and pick up the baton from money printing, it will be sorely disappointed.

via Zero Hedge http://ift.tt/1PXTyTH Tyler Durden

Where possible, we try not to beat dead horses but when it comes to the death of the so called “Alberta dream,” it’s rather difficult to ignore the pace at which conditions continue to deteriorate in Canada’s beleaguered oil patch.

We’ve covered Alberta’s demise extensively over the past twelve months, documenting everything from soaring food bank usage to the alarming spike in property crime in Calgary where vacant office space sits collecting dust and condos go unsold even as housing prices soar in British Columbia and Ontario.

Last year, Alberta logged the most job losses the province has seen in 34 years, as the unemployment rate spiked to 7.1% from just 4.8% at the end of 2014. 2015 turned out to be worse for provincial job losses than 2009.

Now, in the latest sign that the seemingly inexorable decline in crude will continue to weigh on Alberta’s flagging economy, we learn that O&G companies have simply stopped paying rent for surface access to private property. 

“For the past five years, regular as clockwork, an oil and gas company’s cheque for $4,097 has arrived in Allison Shelstad’s mailbox sometime in January, rent paid for surface access to a natural gas well on the farmland southeast of Calgary her family has owned for more than 50 years,” The Calgary Herald reports. 

This year, the check didn’t show up. And neither did checks for 765 landowners who have now appealed to the Alberta Surface Rights Board for relief. That’s the highest number of appellees in at least 12 years. 

In total, the board is demanding that O&G producers fork over $1.7 million in lease payments, more than double 2014’s court-ordered back payments. As The Herald goes on to note, this dwarfs the figures from 2008-09: “During the downturn of 2008-09, only 268 and 241 landowners, owed $490,000 and $730,000, respectively, took their complaints to the board.”

“I think (the oil industry) thought the big revenues were going to go on forever. They gave a lot of money away to the shareholders, and they kept quite a bit for themselves, probably the biggest part,” says 69-year-old Perry Nelson, who has 30 well leases and who has made his first ever application to the Surface Rights Board. “I don’t know how they went from windfall profits to where they are today.” 

Well, they went from windfall profits to “where they are today” because crude prices collapsed by 60%. We’re not defending the industry but it’s not exactly like this is a mystery. North American production threatened Riyadh’s market share and the Saudis simply bankrupted the space. That’s all there is to it. 

The problem for the Perry Nelsons and Allison Shelstads of the world is that while the government can demand that the companies pay, it cannot extract money that isn’t there to extract. In other words, if companies simply don’t have the money, provincial authorities are forced to foot the bill. And yes, that means landowners are effectively paying themselves for the rights to use the land they themselves own.

Welcome to “lower for longer” Alberta. Blame Ali Al-Naimi.

via Zero Hedge http://ift.tt/1LFeBqi Tyler Durden

Submitted by Mike Krieger via Liberty Blitzkrieg blog,

Here’s a bothersome trend that seems quite fitting for the smoke and mirrors driven, celebrity obsessed, hologram society that America has become. A company known as Crowds on Demand is actually in the business of providing fake protesters for causes, fake entourages for wanna be celebrities and seemingly even fake supporters for unpopular corporate activities.

 

This just furthers my feeling that action is far more important than traditional protests in the 21st Century. They key to getting out of the mess we are in is to actively create a parallel economy and even monetary system adjacent to the current terminal one. That way, when this one blows up, we already have the infrastructure in place to move to another paradigm. One characterized by peaceful, voluntary human interaction and dominated by decentralization in virtually all aspects of human existence.

 

– From the 2013 post: Protesters for Hire: For a Few Thousand Dollars We’ll Buy You a Small Entourage

I first highlighted the company Crowds on Demand over two years ago in the above post. Turns out it’s much worse than I could have imagined.

 

From NBC News:

In Camarillo, citizens aren’t shy about expressing their opinions. But on a chilly Wednesday night in December, city officials say one man stood out.

 

For nearly three minutes, Prince Jordan Tyson is on camera telling city leaders what he later admits, is a lie.

 

In fact, Tyson, who is not from Camarillo, is a self described struggling actor from Beverly Hills and he now believes he was involved in a secretive new industry where actors are hired to try and sway public officials.

In this case, a construction project in Camarillo he says he was hired to criticize.

 

“It was scripted, they told me what to say,” Tyson told NBC4.

 

Some of those scripted lines, he says were provided by recent UCLA graduate Adam Swart, CEO of a company called Crowds on Demand, which will stage rallies and demonstrations for any almost candidate or cause.

 

Swart says he has employed actors to sway city officials in meetings across the country.

 

“I have worked with dozens of campaigns for state officials, and 2016 presidential candidates,” Swart told NBC4, adding that he won’t name any names.

 

“I can’t go in to detail… if I did, nobody would hire us.”

 

The California Political Practices Commission tells NBC4 political campaigns are required by law to report expenditures.

 

But, public records indicate only one committee in the entire state has ever reported paying “Crowds On Demand”, that committee is Six California’s, the campaign to split California in to 6 different states.

 

State officials say some campaigns and politicians who hire “Crowds On Demand”… and fail to report campaign expenditures, could be breaking the law.

 

Hiring actors is not illegal. Although, entertainment law attorney and USC professor Lincoln Bandlow says telling those actors what to do and say could lead to lawsuits, if someone feels harmed.

 

“Paying someone to go out there and make false representations to a city council is going to give rise to possible fraud claims, possible intentional interference with business relations claims, maybe defamatory statement claims.”

 

Swart would not confirm to NBC4 that he hired Tyson or gave him lines, but says he has hired actors on multiple occasions to try and sway city officials across the country.

 

Swart tells NBC4 he has 20,000 actors across the country and most are required to sign a non-disclosure agreement.

If there’s a hell, this guy’s going. Personally, I’d settle for prison.

via Zero Hedge http://ift.tt/1PXMyq0 Tyler Durden

There are three certain things in life: death, taxes and paying vault storage fees to keep your gold safe. Or at least there were: recently the third of these certainties got somewhat muddied when, over the past year the government of India unleashed an attempt to soft-confiscate the nation’s publicly held gold, by offering to pay interest for said gold. Incidentally, the effort has failed miserably as India has been able to collect only a few tons of gold as part of this gold monetization scheme.

Where India succeeded was to finally quash the old saying that gold does not pay dividends. It does, but until now the dividend was only available in one country.

That has now changed and as of this moment, a Canadian physical gold distributor, Canadian Bullion Services (profiled recently by the Globe and Mail) has boldly gone where only India has gone before, and is offering to pay interest to its gold and silver customers if they hold their precious metals at the bullion dealer.  In fact, based on the tiering of interest, CBS will pay as much as 4.5%/year if the gold deposited for at least 3 years.

Surprised? Wait until you see the full offer:

Earn Interest on Your Bullion

 

(BOOST) STORAGE ACCOUNT

 

Canadian Bullion Services is happy to introduce a new service exclusively to our clients. Purchase gold and silver and hold gold and silver in secure storage; and earn interest just by keeping gold and silver in the Boost storage account.

 

What is The Boost Storage Account?

 

The Boost Storage Account is a proprietary program developed exclusively by Canadian Bullion Services.  In a nutshell, the program allows investors to:

• Purchase gold and silver;
• Hold gold and silver in secure storage; and
• Earn interest just by keeping gold and silver in the Boost storage account.

Is this a new idea?

 

We would like to say we thought of it ourselves, but the idea is very popular in the Eastern parts of the world, where governments, banks, and bullion dealers have a variety of storage interest bearing accounts for their hard assets.

 

Benefits at a glance:

1. Purchase physical gold and silver for safety and growth.
2. Have your gold and silver secure in a vault.
3. Earn interest while your gold and silver is safely in storage.
4. Get full transparency – receive monthly audited statements.

The Program is right for you if:

• You desire the safety of hard assets like bullion but want your bullion working for you;
• You wish to participate in the potential growth of the bullion markets (hard assets only, no paper assets);
• You would like to receive interest payments while storing your gold and silver;
• You believe in a buy-and-hold strategy; and
• You want your bullion stored safely and securely.

How does the Boost Program work?

• Purchase a minimum of 500 ounces of silver or 10 ounces of gold (does not matter which Mint)***
• Store the gold and silver at one of Canadian Bullion Services secure depository vaults.
• The Boost accounts are yearly accounts. Interest earned is based on holding time:
  • Store your bullion for 1 year and earn 2.5%/annum on your bullion*
  • Store your bullion for 2 years and earn 3.5%/annum on your bullion*
  • Store your bullion for 3 years and earn 4.5%/annum on your bullion*
• At the end of the term you can renew your Boost Program or have your bullion delivered**
• Your interest is earned monthly with actual physical bullion.

Getting interest on your gold: that sounds suspiciously close to what fractional reserve banks do to incentivize depositors to fund them with the unsecured liability known as cash; a liability which as Europe is learning the hard way can be bailed in at any given moment. But that is impossible, because as Ben Bernanke will attest, gold is not money, it is tradition. So how can this be?

Well, a quick look at footnote one, and some loud alarm bells should promptly go off:

*Liquidity is at the end of your term only; you may not receive the exact bullion you purchased; the interest will accrue monthly with the purchase of more bullion, any funds remaining will be credited as cash in your account.

At least the company is honest and warns you upfront that the gold you “receive” may not be the exact bullion you purchased, in other words this is nothing but the first incarnation of a bullion dealer rehypothecation scheme.

But why? After all Canadian Bullion Services is a small dealer which allegedly only had a few million in revenue.

Perhaps the answer can be found in the following recent press release, in which CBS announced it was now collaboration with precious metal vaulting legend, Brinks.

Introducing Local Pick Up at Brinks-Revolutionary Service for Gold and Silver

 

Canadian Bullion Services Inc. has now introduced its leading on-time pick up option at Brinks in Toronto.

 

“With this new feature, clients can secure their price of gold and silver bullion and now pick up their order at Brinks in Toronto.” said Jamie Cohen, Chief Strategy Officer of Canadian Bullion Services.

 

This new service was created to help individuals accelerate their precious metals holdings. Clients will no longer need to wait for their deliveries. This helps drive more business value for Canadian Bullion Services by lowering insurance costs and delivery costs while enabling clients to receive their product faster.

 

* * *

 

In the future, this service will be rolled out to all products and to Brinks in most major cities in Canada. For more information, please contact Jamie Cohen at Canadian Bullion Services.

We wonder if CBS’ generous precious metal interest payment scheme is funded by Brinks or one of the other prominent names in the business such as Scotia Mocatta, HSBC or even JPM, all of which as we have documented in recent months, have been running precariously low on physical gold in their gold vaults.

After all what better way to promptly replenish physical stores than to not only not demand gold storage fees but to offer to pay interest to the public for the “privilege” of holding its gold.

In retrospect we can’t help but have flashbacks to FDR’s infamous executive order 6102, which promptly and overnight confiscated all physical U.S. gold.  At least this time around the “confiscation” of gold is on a voluntary, “handover” basis and those who part with their hard money are incentivized to do so with promises of some future paper money interest payment.

At least for now. And if, like in India, dealers are unable to procure much needed physical things just might escalate.

via Zero Hedge http://ift.tt/1QZJNlM Tyler Durden

Submitted by Jonathan Newman via The Mises Institute,

The perennial promises of free stuff from political candidates are front and center again now that we are ensnared in another US election cycle. The knee-jerk response from some economists and libertarians is “TANSTAAFL!” And of course it’s true that There Ain’t No Such Thing As A Free Lunch, because somebody must bear the costs of the supposedly “free” stuff. Nothing is free because every action has an opportunity cost.

Especially when the government is involved in doling out the gifts, all it means is that it was bought with money taken from others. Or, sometimes, the money is taken from the person receiving the gift, who thinks he’s gotten something for nothing. (This is a sleight-of-hand political trick that has fooled many for centuries.)

But what if we interpret “free” in a more colloquial sense? Is it still preferable for the government to give away free stuff? Do unhampered markets provide for free stuff?

Two Definitions of “Free”

Today’s promises include free college, free healthcare, free paid time off of work, and all sorts of goodies. Although the above conclusion (no such thing as “free”) applies to all of these, I want to consider a different, more liberal definition of “free”: gifted.

For example, if Bernie gives Jonathan an apple that Bernie either grew in his orchard or bought at the store and Bernie expects nothing in return, the apple is a free gift from Bernie to Jonathan. The production, purchase, and loss of the apple is costly, but Jonathan bears none of these costs. Jonathan would technically have to expend some time and effort to hold and consume the apple, and he would lose an apple’s worth of carrying capacity on his person, but ignoring these and other technicalities, we can casually say that the apple is a free gift from Jonathan’s perspective.

So now consider this definition for the above examples: freely gifted college, freely gifted healthcare, freely gifted time off, etc. We realize that these already exist, and would exist absent government provision.

There are innumerable scholarships offered by individuals, organizations, and colleges who want certain students to attend college. Organizations like St. Jude’s, Doctors Without Borders, and Operation Smile offer freely given medical services to patients. And many businesses already allow their employees vacation days, medical leave, and family leave without them skipping paychecks, although there is an important caveat here that this would be priced into their regular salary or wage unless the employing entrepreneurs want to give from their own means.

This is all not to mention the freebies, BOGO coupons, “freemium” apps, and other marketing strategies retail stores employ.

Why Do People Give Gifts?

First, we must have more than we want to keep for ourselves.

Widespread abundance like this is only possible with relatively unhampered markets and roundabout production in place, where entrepreneurs are correctly guessing consumer demands and a large capital structure made possible by saving yields plenty of consumer goods. We have to create wealth before we can exchange it, consume it, or give it away.

But once we have such an abundance of means, the reasons for giving are countless and outside the scope of economics. An altruist might give out of generosity, but even a greedy businessman could give because of increased storage costs for all of their inventory, or as a plan to attract customers.

It should be noted that self-interest motivates both the altruist and the greedy businessman. The altruist’s actions are self-interested because he is satisfying one of her own ends by relinquishing ownership of the donated means to somebody else.

Voluntary vs. Involuntary Giving

When the giver gives voluntarily and the receiver accepts the gift, we can say it represents a mutually beneficial arrangement. The same cannot be said for forced redistribution.

When Bernie gives Jonathan the apple, Bernie is satisfying the highest ranked end he has for that apple. If, however, Bernie stole the apple from somebody else before giving it to Jonathan, then we can say with certainty that the exchange of the apple is not mutually beneficial.

The same goes for college scholarships and medical care. If the government takes the means to give somebody free college, then it does not represent a mutually beneficial arrangement, or else the individual would have voluntarily donated the money for the student to go to school.

Unlike private charities and scholarship funds, the government has no reason to dispense the gifts prudently or to minimize their own cut to maintain a donor base that is confident their donations are used efficiently and for the intended cause.

Forced redistribution also tends to spur bitterness and conflict, as opposed to gratitude and goodwill.

Proponents of Free Stuff Should Look to Capitalism, not Redistributionism

The conclusion we can draw here is that we get just the right amount of “free” stuff through the voluntary interactions of individuals in unhampered markets. And, not only that, but as capitalistic economies inevitably grow and the people become increasingly wealthy, charitable giving can increase as well. As the supply of goods that satisfy our ends gets larger, those marginal goods are more likely to be valued in terms of giving them away rather than keeping them ourselves.

Therefore, those that desire more free stuff should try to encourage more voluntary giving (maybe even leading by example), not forced redistribution. They should also be the loudest proponents of unhampered markets as any voluntary giving must come from wealth that has already been created and in such abundance as to allow for greater giving.

via Zero Hedge http://ift.tt/1T5xL0o Tyler Durden

Late last month, we brought you the latest from Barclays on Venezuela, where Nicolas Maduro’s socialist paradise is rapidly collapsing in the face of falling oil prices.

“The economic emergency decree and any measures that the government could take at this point may be too late,” the bank declared. “After two years of inaction and the recent decline in oil prices, a credit event in 2016 is becoming increasingly difficult to avoid.”

In other words, Venezuela is careening towards the second-largest sovereign default in history (behind Greece) because even if Maduro manages to pay back what comes due this month, the real test comes this autumn when Caracas will need to come up with more than $5 billion in principal and interest.

As Bloomberg notes, “Venezuela has $35.6 billion of dollar bonds outstanding and owes $67 billion once interest payments are included. State-owned oil company Petroleos de Venezuela SA, known as PDVSA, has $33.5 billion of bonds, and $52.6 billion counting interest.” Incidentally, Reuters reported this afternoon that PDVSA is now in talks with foreign banks on a proposed restructuring.

“Venezuela will not go into default, and the fact that we are talking with banks shows that there is interest in investing in Venezuela,” PDVSA president Eulogio Del Pino told reporters outside of national assembly this afternoon.

“At the oil price that the futures curve is pricing in (USD/b32), the government would need to use more than 90% of the oil exports to make debt payments if we include market, bilateral, commercial, and Chinese Fund obligations,” Barclays said in January.

In short, it seems unlikely that even with the “measures” announced by Maduro this month, the country will be able to service its debt and import a sufficient amount of food to keep the shelves stocked. By nationalizing pretty much everything, Hugo Chavez managed to leave the country entirely dependent on imports, paid for with oil revenue. That oil revenue is now crimped and Venezuela is rapidly running out of reserves (oh, and the gold is leaving):

Although Maduro may be able to scrape together enough cash to carry on for a few months, this is going to end in tears one way or another.

As we documented in “In Venezuela, ‘Savage Suffering’ Takes Hold Amid Frightening ‘Food Emergency,'” the country’s beleaguered masses are struggling to survive amid empty grocery store shelves and inflation that the IMF says will hit 720% this year.

As we put it, “the public may have been unwilling to stage an outright rebellion with inflation at 200%, but at 720% it’s difficult to see how things won’t careen into outright social upheaval in the not so distant future. Especially once the country defaults and the public comes to realize just how wasteful the government is with what should be a vast store of national oil wealth.”

Echoing that sentiment is Barclays whose latest missive on Venezuela suggest that although it’s not entirely out of the realm of possibility that the country could manage to avoid a default in 2016, the public’s patience may be about to run out. Here’s more: 

The key variable over the coming months will be public patience. In the attempt to meet debt payments, the government will likely need to impose an additional severe import cut, which, combined with the relative price distortions, will likely lead to a deepening of the scarcity problems and the economic and social crisis in general. The private sector reports inventories at levels that in some cases could be barely enough to satisfy a few days of demand. Some food companies have had up to 80% of their production capacity shut down because of a lack of inputs. The financial system is seeing FX allocations to its clients at levels close to zero, which could imply a sharp decline of imports over the coming months.

 

So far the government has been successful in containing social pressures with a combination of military presence, fear and media control. Nonetheless, isolated events of looting and violence have been reported (El Nacional, January 31, 2016). In the absence of a catalyst, this might not escalate, but it is a very fragile situation. So far, Venezuelan society has been patient, but will this continue to be the case? The society, in some ways, has arguably opted for economic regression by adapting its consumption to the goods available and accessing them via channels other than the traditional distribution channels, such as barter and unofficial markets. Moreover, BCV data for the balance of payments for 2015 suggest that a large portion of imports could have been financed with private sector savings or sources other than government FX allocations. Therefore, there is a possibility that the government could further cut FX import allocations, limiting them to just essential goods. It is difficult to measure the level of social unrest, but the least that can be said is that this is a risky strategy for government that could increase the possibility of an escalation.

In other words, a revolution may be imminent and you might want to fade this rather remarkable tightening in the country’s CDS spreads:

As a reminder, 5-year CDS spreads recently blew out to levels Greek spreads hit in 2011 – right before the country defaulted.

It seems unlikely that the opposition – which won a major victory at the polls in December – will be able to drive Maduro out in time for the country to avert a further economic collapse or a sovereign default. 

Indeed, the fact that Maduro was able to win the Supreme Court’s backing for his “emergency” economic measures would appear to suggest that the political dynamics in Venezuela aren’t materially different. It’s one thing for the populace to feel as though their government has let them down, but it’s entirely another for the electorate to discover that they are essentially powerless to change things even when their vote clearly demonstrates a desire for something different.

Bring on “the toilet paper rebellion” (trademark, Tyler Durden):

.

via Zero Hedge http://ift.tt/1WHriXt Tyler Durden

Submitted by Patrick Buchanan via Buchanan.org,

As the returns came in from South Carolina Saturday night, showing Donald Trump winning a decisive victory, a note of nervous desperation crept into the commentary.

Political analysts pointed out repeatedly that if all of the votes for Marco Rubio, Ted Cruz, John Kasich, Jeb Bush and Ben Carson were added up, they far exceeded the Trump vote.

Why this sudden interest in arithmetic?

If the field can be winnowed, we were told, if Carson and Kasich can be persuaded to follow Bush and get out, if Cruz can be sidelined, if we can get a one-on-one Rubio-Trump race, Trump can be stopped.

Behind the thought is the wish. Behind the wish is the hope, the prayer that all the non-Trump voters are anti-Trump voters.

But is this true? Or are the media deluding themselves?

Watching these anchors, commentators, consultants and pundits called to mind the Cleveland Governors Conference of 1964.

Sen. Goldwater had just won the winner-take-all California primary, defeating Gov. Nelson Rockefeller, assuring himself of enough delegates to go over the top on the first ballot at the Cow Palace in San Francisco.

But with polls showing Barry losing massively to LBJ, the panicked governors at Cleveland conspired to block his nomination.

Michigan Gov. George Romney and Pennsylvania Gov. Bill Scranton were prodded to enter the race. Scranton would declare his availability in San Francisco with a letter accusing Goldwater of hostility toward civil rights — Barry had voted against the 1964 bill — and of excessive tolerance toward right-wing extremists such as the John Birch Society.

And what became of them all?

Goldwater won his nomination and went down in a historic defeat, but became a beloved figure and the father of modern conservatism.

Of those who turned their backs on Goldwater that fall, none ever won a presidential nomination. Of those who stood by Barry that fall, Richard Nixon and Ronald Reagan, both would win the GOP nomination twice, and the presidency twice.

And the conservative movement would hold veto power over party nominees and become the dominant philosophy of the GOP.

Folks forget. Not only were there “liberal Republicans” and “moderate Republicans” back then, they dominated the landscape. Yet rare is the Republican today who would describe himself in such terms.

Which brings us back to the anti-Trump cabal.

While their immediate goal is to deny him the nomination, do they really think that if the party nominates Rubio, things can be again as they were before Trump? Do they not see that America and the West are undergoing a series of crises that will change our world forever?

Bernie Sanders is not all wrong. There is a revolution going on.

Late in the last century, when Robert Bartley was editorial editor, The Wall Street Journal championed a constitutional amendment of five words — “There shall be open borders.”

Bartley, who told colleague Peter Brimelow, “I think the nation-state is finished,” wanted U.S. borders thrown open to people and goods from all over the world. To Bartley and his acolytes, what made America one nation and one people was simply an ideology.

But what was silly then is suicidal today.

Whatever one may think of Trump’s talk of building a wall, does anyone think the United States is not going to have to build a security fence to defend our bleeding 2,000-mile border?

Given the huge trade deficits with China, Japan, Mexico and the EU, the hemorrhaging of manufacturing, the stagnation of wages and the decline of the middle class, does anyone think that if Trump is turned back, the GOP can continue on being a free-trade party financed by the Beltway agents of transnational corporations?

Absent some major attack on the homeland, do our foreign policy elites believe the American people would support new U.S. interventions to defeat, occupy and tutor Third World nations in liberal democracy?

Trump is winning because, on immigration, amnesty, securing our border and staying out of any new crusades for democracy, he has tapped into the most powerful currents in politics: economic populism and “America First” nationalism.

Look at the crowds Trump draws. Look at the record turnouts in Republican caucuses and primaries.

If Beltway Republicans think they can stop Trump and turn back the movement behind him, and continue on with today’s policies on trade, immigration and intervention, they will be swept into the same dustbin of history as the Rockefeller Republicans.

America is saying, “Goodbye to all that.”

For Trump is not only a candidate. He is a messenger from Middle America. And the message he is delivering to the establishment is: We want an end to your policies and we want an end to you.

If the elites think they can not only deny Trump the nomination, but turn back this revolution and re-establish themselves in the esteem of the people, they delude themselves.

This is hubris of a high order.

via Zero Hedge http://ift.tt/1LF5qpR Tyler Durden

Yesterday we explained why according to Bank of America, despite the big equity squeeze Treasurys refuse to move lower, and in fact have continued to drift higher in price. We also noted that according to a Reuters blurb, Guggenheim CIO Scott Minerd said on Monday that he sees the 10-year Treasury note yield falling to 1 percent, perhaps even lower, before year-end.

Below are key excerpts from his just released argument for why the best trade of the year will be to buy 10Years in May, or any other month for that matter, and go away until December 31.

From The Great Recession Scare of 2016

Markets are in a funk over the risks to the global economy—and there are many—but I believe future market historians will refer to the current period as “The Great Recession Scare of 2016.” At this point, market dynamics are playing out the way our macro research predicted over one year ago—that collapsing oil prices would lead to an increase in defaults in energy credits sometime in the first or second quarter of 2016, and that there would be a sympathetic widening in other high-yield sectors outside of energy. Our research tells us that beyond this spike in energy defaults fundamental conditions are copacetic, yet the markets and policymakers are reacting as if recession or full-blown financial crisis were at the gates, if not already upon us.

For example, the decline in breadth, as exhibited by one of my most reliable indicators, the New York Stock Exchange Advance/Decline line, continues to make new cyclical lows, signaling that equity prices have further to fall. Our analysis indicates that the S&P 500 could drop to a range of 1,600 to 1,650 and the Nasdaq to 3,800 before we find a bottom. A fitting analogy for the recent rollercoaster in equities may be the sharp series of rallies we experienced in 2007 and 2008 before the market ultimately capitulated. At the same time, investors should remember that such a market decline does not necessarily portend a recession. For those of us who remember, after the market crash of October 1987 the next U.S. recession was still two years away, creating a great buying opportunity. I could say the same for the periods following similar market declines in 1994 and 1998.

Central banks around the world, reacting to the same recessionary fears, are likely to cause long rates to sink materially lower than where we are today. I see the 10-year Treasury note falling to 1 percent, perhaps even lower, before year-end. According to technical analysis, the current target bottom for the 10-year Treasury note is 28 basis points! That may seem like voodoo, but technical analysis provided key insight to our macroeconomic team a year ago when we called for oil to hit $25 per barrel back when it was trading at $60.

A barrel of oil at $25 or 10-year Treasurys yielding less than 50 basis points may seem like crazy numbers, but so do the negative interest rates that we are already seeing in Europe and Japan. As low as rates are today, I expect further declines in short-term and long-term rates, both in Europe and Japan, and that ultimately the Bank of Japan and the European Central Bank will take their respective overnight rates to as low as -100 basis points. Such an event would likely cause Germany’s 10-year bund to trade at around -50 basis points. When you consider that the current spread relationship between bunds and Treasurys is about 150 basis points, you can easily see why the U.S. 10-year note at 1 percent is not that farfetched. Given that U.S. Treasurys have traded at yields lower than bunds, it is not hard to imagine that the 10-year note could yield less than 1 percent if the bund were to reach -50 basis points.

More in the full note

via Zero Hedge http://ift.tt/1LF4l1c Tyler Durden