The Rich Are Living Longer: A Lot Longer Than the Poor

RichPoorLoungingA new report from the Brookings Institution parses social security data to discover that the disparity in longevity between the rich and the poor has been growing. The researchers looked at life expectancy at age 50 by income levels comparing those born in 1920 with those born in 1940. Among other things that they found is that average life expectancy for women in the bottom tenth (80 years) of the income distribution did not change. On the other hand, life expectancy for women in the top tenth of the 1940 cohort rose by 6.4 years; from just over 84 years to 90.5 years. 

The results were similar for men. Life expectancy at 50 for men in the bottom tenth of income distribution actually did rise by 1.7 years whereas men in the top tenth gained 8.7 years life expectancy. Overall, life expectancy for poor men in the 1940 cohort averaged 76 years compared to 88 years for men in the top tenth of income distribution.

So why is the longevity gap between the rich and poor growing? One big factor is that the rich smoke much less. The New York Times notes that obesity doesn’t seem to be much of a factor since rates of obesity among the rich and the poor have been converging. I have earlier reported on research that finds that drug overdosing, suicides, and chronic liver diseases are increasing mortality rates among poor whites. Interestingly, a 2007 New England Journal of Medicine study concluded that lack of access to health care accounted for only about 10 percent of premature deaths.

RichPoorLongevity

One question not asked was are the poor sicker because they are poor or are they poor because they are sicker? It could be the case that modernity has eliminated many of the earlier causes of premature death, e.g., infectious diseases and accidents, thus revealing innate health disparities that affect the ability of people to earn incomes. People who suffer from chronic diseases earlier in life are more likely to earn less money than are their healthier fellow citizens.

The Brookings report also observes that because the rich are living longer, they will get much more out of Social Security than their poorer fellow citizens. The researchers note, “Even though the formula that determines monthly Social Security pensions is progressive, a growing share of the progressivity is offset on a lifetime basis by the growing difference between the post-retirement life spans of low- and high-wage workers.” In addition, poorer Americans tend to retire earlier which also reduces their Social Security payouts. So proposals to raise the age at which Social Security benefit payments begin would disproportionately impact poorer Americans.

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If You Don’t Need Those Big Bills, You Probably Don’t Need Cash At All. Do You, Now?

The elites know what they want: a trackable record of every transaction that happens on planet Earth. Those who stand in the way or object are just facilitating “bad guys.” Some evidence this week from Harvard University, where Peter Sands, president emeritus of Harvard, has issued a new paper on the topic of “Making it Harder for the Bad Guys: The Case for Eliminating High Denomination Notes.”

The heart of Sands’ argument:

Such notes are the preferred payment mechanism of those pursuing illicit activities, given the anonymity and lack of transaction record they offer, and the relative ease with which they can be transported and moved. By eliminating high denomination, high value notes we would make life harder for those pursuing tax evasion, financial crime, terrorist finance and corruption. Without being able to use high denomination notes, those engaged in illicit activities – the “bad guys” of our title – would face higher costs and greater risks of detection. Eliminating high denomination notes would disrupt their “business models”.

The argument could in all its particulars apply to cash in general. If it’s dead wrong to allow “bad guys” to move their property across state lines in a potentially undetectable fashion when it is lighter than some elite thinks appropriately, why let them do it at all? Make sure there is a potentially state-viewable electronic record of everything. You aren’t pro-crime, are you?

Time reports on the growing movement on authorities’ part in both the European Union and the U.S. to crush those criminally convenient bills, noting that “In 2000, Canada got rid of its $1,000 bills and Singapore ditched its $10,000 bills” and that even the U.K’s 50 pound note is in the crosshair.

Former Treasury Secretary Lawrence H. Summers is explicit in The Washington Post: the $100 bill must die, concluding, hooked off of the Sands’ paper, that:

Even better than unilateral measures in Europe would be a global agreement to stop issuing notes worth more than say $50 or $100.  Such an agreement would be as significant as anything else the G7 or G20 has done in years. 

Given its implications for big state’s power and willingness to smash any possibility of conducting transactions outside their all-seeing eye, that’s true. Summers is positively pleased with his arguments and their implications. You can decide for yourself if you are as well, despite his insisting such a move would be “the global financial groupings [standing] up against “big money” and for the interests of ordinary citizens.”

I don’t know if it’s scarier to think Summers is being cold-bloodedly Orwellian or if he actually believes that crap.

I wrote back in February 2014 on the bitterly amusing ironies of how state complaints against Bitcoin map complaints they might have about cash.

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Contraception, Immigration, and Hypocrisy: New at Reason

When it comes to religious liberty, as with so many other things, many on the left and right are hypocrites, picking and choosing when it applies based on their own personal preference. That’s what issues like contraception mandates and illegal immigration reveal, A. Barton Hinkle writes:

The contraception mandate was imposed through Obamacare and was favored by abortion-rights groups, so opinions fell along predictable lines. Conservatives defended the right of devout employers to exemption…

Liberals argued that companies had no business forcing their religious views down employees’ throats, and that letting them do so would set a dangerous precedent…

And then everybody switched.

Well, maybe not everybody— generalizations are dangerous. But plenty of people on the right started sounding like leftists, and plenty of those on the left started sounding like rightists. Why?

Illegal immigration.

View this article.

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MXN Shorts Crushed After Mexcian Central Bank Unexpectedly Hikes Rate By 50bps, Peso Soars

It was already a torrid day for commodity currencies, among which the MXN, or Mexican Peso, which were surging on today’s latest crude short squeeze and then as if pulling a PBOC with just one intention – to crush the shorts – the Mexican Central Bank or Banxico, dealt a crushing blow on anyone short the MXN when it announced an unexpected 50 bps rate hike in the overnight rate to 3.75%.

From the central bank: “The target for the overnight interbank funding rate is increased by 50 basis points.”

Perhaps the reason for the dramatic move is that Banxico, like the PBOC, no longer wants to be selling dollars to keep the currency stronger, so it resorted to the nuclear option. Sure enough:

  • BANXICO INCREASES OVERNIGHT RATE BY 50 BPS
  • VIDEGARAY SAYS FX COMMISSION ENDING DOLLARS SALES
  • BANXICO MAY CONTINUE DISCRETIONARY DOLLAR SALES: CARSTENS
  • CARSTENS: IT WAS A FORM OF PROTEST
  • CARSTENS: FX RATE ‘MISALIGNED’ W/MACROECON FUNDAMENTALS
  • CARSTENS: CEN BANK COULD MAKE EXCEPTIONAL INTERVENTIONS

Carstens also added that the decision for Banxico rate increase was unanimous.

Now whether the strengthening effect persists is another matter, but for now one look at the chart below shows that anyone who was long the USDMXN just had a Swiss National Bank moment.

And now we begin the countdown until the effect from this latest desperate central bank intervention is wiped out.

Read more here from Banxico.


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“Ultimate Banking” Monopoly Edition Goes Completely Cashless

Submitted by Mike Krieger via Liberty Blitzkrieg blog,

The war on cash has been in the works for a very, very long time, but the propaganda campaign to convince an always gullible public to accept the scheme seems to have been hatched in earnest late last spring. For example, here are a few excerpts from the post, Martin Armstrong Reports on a Secret Meeting in London to Ban Cash:

Martin Armstrong noted at the time:

I find it extremely perplexing that I have been the only one to report that there is a secret meeting in London where Kenneth Rogoff of Harvard University and Willem Buiter the chief economist at Citigroup will address the central banks and advocate the elimination of all cash to bring to fruition the day when you cannot buy or sell anything without government approval. When I Googled the issue to see who has picked it up yet, to my surprise Armstrong Economics comes up first. Others are quoting me, and I even find it spreading as the Central Bank of Nigeria, but I have yet to find reports on the meeting taking place in London when my sources are direct.

 

Other newspapers who have covered my European tour have stated that the “crash” of which I speak is the typical stock market rather than in government. What is concerning me is the silence on this meeting where there are more and more reports about a cashless society would be better.

 

If we look at the the turning points on the ECM, yes they have been to the day when there has been a concentration of capital in a particular market. However, it has also picked the turning points in political decisions such as the formation of the G5 with 1985.65, the very day Greece asked for help from the IMF in 2010, to the day of 911. What we better keep one eye open for here at night is this birth of a cashless society coming in much faster than expected. Why the secret meeting? Something does not smell right here.

 

To which I added my own observation:

 

In the mind of an economic tyrant, banning cash represents the holy grail. Forcing the plebs onto a system of digital fiat currency transactions offers total control via a seamless tracking of all transactions in the economy, and the ability to block payments if an uppity citizen dares get out of line.

Moving along, today the world had the unfortunate experience of its attention being turned toward the malicious and authoritarian mindset of none other than Larry Summers. Bloomberg reports:

Former U.S. Treasury Secretary Lawrence Summers urged countries around the world to agree to stop issuing high-denomination banknotes, adding his voice to intensifying criticism of a practice alleged by police to abet crime and corruption.

 

Summers’s call coincides with a review by the European Central Bank of its 500-euro ($558) note, whose future now looks increasingly uncertain. President Mario Draghi repeated this week that the institution was considering withdrawing the euro area’s most valuable bill to avoid aiding criminals.

 

“Even better than unilateral measures in Europe would be a global agreement to stop issuing notes worth more than say $50 or $100,” Summers said on his blog on Tuesday. “Such an agreement would be as significant as anything else the G-7 or G-20 has done in years.”

 

For now, “I’d guess the idea of removing existing notes is a step too far,” Summers wrote. “But a moratorium on printing new high-denomination notes would make the world a better place.”

First of all, why is this discredited buffoon still paraded around everywhere as if he’s an authority on anything other than hubris and ineptitude? The fact that fossils like Larry Summers still have such a prevalent voice amongst world leaders is precisely what Americans are revolting against in their support of Trump and Sanders.

Second, the incredible irony in all of this is that while banning cash would merely make life inconvenient for petty criminals, it would making government economic tyranny and elitist theft exponentially easier. Crime agains average people would explode as a result. It reminds me of the quote attributed to Aesop:

We hang the petty thieves and appoint the great ones to public office.

Interestingly, it appears Monopoly is ahead of the curve on this one. Indeed, while I first saw Monopoly move to “electronic banking” over three years ago, the board game’s latest iteration which will be released this summer, takes it to a whole new level.

As Gizmodo reports:

Is there anything worse in a game of Monopoly than thinking you’ve bankrupted another player only to discover they have a secret stash of cash hidden away? That’s no longer an option with the new Monopoly Ultimate Banking edition that uses a tiny ATM to keep track of every last financial transaction.

 

It’s not the first time that Hasbro Gaming has tried to speed up the game of Monopoly by replacing cash with credit cards and an electronic banking unit. But ironically the company’s past efforts actually slowed the game down because players had to manually type in dollar amounts on an awkward keypad.

 

But the compact banking unit in the Monopoly Ultimate Banking edition is able to quickly scan not only each player’s credit card, but all of the individual property and chance cards in the game which now include special bar codes on them.

 

The latest version of the game, which will be available in the fall for $25, also mixes things up with new chance cards called Life events that can cause rents across the board to fluctuate, or other sudden financial changes that are really only easy to implement thanks to the game’s much-improved electronic ultimate banking unit.

Take note of the line “or other sudden financial changes that are really only easy to implement thanks to the game’s much-improved electronic ultimate banking unit.”

You know, like negative interest rates and deleting your entire bank account without warning, for example.

Screen Shot 2016-02-16 at 9.12.48 AM

“Ultimate” banking indeed. As the game’s cover suggests, the idea is to “own it all,” and they aren’t talking about you.

Oh, and don’t think they aren’t coming for Bitcoin too. As Andreas Antonopoulos noted:


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At Least 5 Dead After Massive Explosion In Turkish Capital, Military Dormitory Targeted

With Turkey on the brink of going to war with Russia and, implicitly, Iran, President Recep Tayyip Erdogan is looking for an excuse to invade Syria. 

The rebels Turkey and Saudi Arabia back are staging what amounts to a last stand at Aleppo and the Kurdish YPG is moving to cut the Azaz corridor, which would effectively mean that Turkey has no way of resupplying the insurgency.

For the past five days, Ankara has been shelling the YPG in a futile attempt to stop their advance. 

The only thing that can save the rebellion against Bashar al-Assad is an outright ground operation by the rebels’ Sunni benefactors, including Turkey. 

All Erdogan needs is a pretext and he may have just gotten one as reports indicate there’s been a huge explosion in Ankara near parliament and at least 5 people are dead.

Early indications are that military barracks were targeted. A “large number of casulaties” are rumored. Expect this to be pinned on either ISIS or the PKK. If it’s the latter, Ankara will once again claim that the group is working in concert with the YPG and that will be all the evidence Erdogan needs to march across the border.

  • EXPLOSION REPORTED IN TURKISH CAPITAL ANKARA, AHABER SAYS
  • ANKARA EXPLOSION OCCURRED NEAR MILITARY RESIDENCES: OFFICIAL
  • 5 PEOPLE KILLED IN ANKARA BLAST: T24 CITES ANKARA GOVERNOR
  • ANKARA BLAST WAS SUSPECTED CAR BOMB: CNN-TURK CITES GOVERNOR


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“Highly Dangerous” Radioactive Material Stolen In Iraq, “Could Be Used For ISIS Dirty Bomb”

Just when it seemed that the Syria’s proxy war would remain confined within the “comfortable” realm of conventional weaponry, moments ago Reuters gave the first hint of a potential, and radioactive escalation, when it reported that Iraq is searching for “highly dangerous” radioactive material stolen last year, according to an environment ministry document and seven security, environmental and provincial officials. The loss is significant because in already setting the next steps of the narrative, Reuters reports that the same officials “fear it could be used as a weapon if acquired by Islamic State.“

It is unclear why a “highly dangerous” radioactive substance was located in Iraq, but as Reuters adds, the material, stored in a protective case the size of a laptop computer, went missing in November from a storage facility near the southern city of Basra belonging to U.S. oilfield services company Weatherford, the document obtained by Reuters showed and officials confirmed (incidentally this is the same Weatherford which two weeks ago fired 15% of its employees after warning of “lower for longer” oil prices).

Reuters attempts to probe further were promptly contained: a spokesman for Iraq’s environment ministry said he could not discuss the issue, citing national security concerns. A Weatherford spokesman in Iraq declined to comment, and the company’s Houston headquarters did not respond to repeated requests for comment.

More details on the theft from Reuters:

The material, which uses gamma rays to test flaws in materials used for oil and gas pipelines in a process called industrial gamma radiography, is owned by Istanbul-based SGS Turkey, according to the document and officials.

 

An SGS official in Iraq declined to comment and referred Reuters to its Turkish headquarters, which did not respond to phone calls.

 

The document, dated Nov. 30 and addressed to the ministry’s Centre for Prevention of Radiation, describes “the theft of a highly dangerous radioactive source of Ir-192 with highly radioactive activity belonging to SGS from a depot belonging to Weatherford in the Rafidhia area of Basra province“.

 

A senior environment ministry official based in Basra, who declined to be named as he is not authorized to speak publicly, told Reuters the device contained up to 10 grams (0.35 ounces) of Ir-192 “capsules”, a radioactive isotope of iridium also used to treat cancer.

 

The material is classed as a Category 2 radioactive source by the International Atomic Energy Agency, meaning if not managed properly it could cause permanent injury to a person in close proximity to it for minutes or hours, and could be fatal to someone exposed for a period of hours to days.

Reuters adds that the ministry document said it posed a risk of bodily and environmental harm as well as a national security threat.

And with this highly radioactive substance stolen, concerns arise that it may have fallen in the hands of ISIS, from where it could promptly be used to make a dirty bomb.

According to Reuters, large quantities of Ir-192 have gone missing before in the United States, Britain and other countries, stoking fears among security officials that it could be used to make a dirty bomb.

“We are afraid the radioactive element will fall into the hands of Daesh,” Reuters cited a senior security official with knowledge of the theft, using an Arabic acronym for Islamic State.

 

“They could simply attach it to explosives to make a dirty bomb,” said the official, who works at the interior ministry and spoke on condition of anonymity as he is also not authorized to speak publicly.

For now, there has been no indication the material had come into the possession of Islamic State, which seized territory in Iraq and Syria in 2014 but does not control areas near Basra. However, in case of a dirty bomb going off somewhere on the Syria-Turkey border, in close proximity to a battalion of Russian solders, well…

Attempts to contain a potential panic appears somewhat muted: the security official, based in Baghdad, told Reuters there were no immediate suspects for the theft. But the official said the initial investigation suggested the perpetrators had specific knowledge of the material and the facility: “No broken locks, no smashed doors and no evidence of forced entry,” he said.

Almost as if it wasn’t actually “stolen.”

Meanwhile, everyone is searing for the deadly substance: “a spokesman for Basra operations command, responsible for security in Basra province, said army, police and intelligence forces were working “day and night” to locate the material. The army and police have responsibility for security in the country’s south, where Iranian-backed Shi’ite militias and criminal gangs also operate.”

Reuters also notes that ISIS does not actually have to make a dirty bomb with the material: besides the risk of a dirty bomb, the radioactive material could cause harm simply by being left exposed in a public place for several days, said David Albright, a physicist and president of the Washington-based Institute for Science and International Security.

The senior environmental official said authorities were worried that whoever stole the material would mishandle it, leading to radioactive pollution of “catastrophic proportions”.

A second senior environment ministry official, also based in Basra, said counter-radiation teams had begun inspecting oil sites, scrap yards and border crossings to locate the device after an emergency task force raised the alarm on Nov. 13.

Two Basra provincial government officials said they were directed on Nov. 25 to coordinate with local hospitals. “We instructed hospitals in Basra to be alert to any burn cases caused by radioactivity and inform security forces immediately,” said one.

Something tells us any burn cases will not afflict local Iraqis; however if we were Russian soliders in Syria or Iraq’s vicinity, we would be concerned.

The final word belongs to the abovementioned David Albright who said that “if they left it in some crowded place, that would be more of the risk. If they kept it together but without shielding,” he said. “Certainly it’s not insignificant. You could cause some panic with this. They would want to get this back.“

Unless causing some panic, and a panicked counterresponse, is precisely the intention.


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WTI Crude Soars To $31 – Erases All “Production Freeze” Disappointment Losses

So let’s get this straight. Russia and OPEC ‘agree’ to consider (not actually act upon) “freezing” production levels (at current record high levels) and the market plunges amid disappointment over no cuts. And today WTI spikes and erases all those losses as Iran supports the “freeze” plan but will not cut its own production plans…

As Reuters reports,

Iran said on Wednesday it would resist any plan to restrain its oil output as fellow OPEC ministers tried to persuade the country to join the first global oil pact in 15 years.

 

Talks in Tehran between Iranian oil minister Bijan Zanganeh and his counterparts from Iraq, Qatar and Venezuela lasted for nearly three hours. Visiting ministers left without making comment.

 

“Asking Iran to freeze its oil production level is illogical … when Iran was under sanctions, some countries raised their output and they caused the drop in oil prices.” Iran’s OPEC envoy, Mehdi Asali, was quoted as saying by the Shargh daily newspaper on Wednesday.

“How can they expect Iran to cooperate now and pay the price?” he said. “We have repeatedly said that Iran will increase its crude output until reaching the pre-sanctions production level.”

And so – Crude rallies??!!

 

What is really diving all this craziness is that it is OPEX in Crude futures today and there are major pins around $31, $30, and $28.



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How The Pros Do It: Tepper Added 75% To Longs After Saying “Now A Good Time To Take Money Off The Table”

Tepper did it again.

Recall that exactly one year ago, we wrote about David Tepper’s latest TV appearance on BBG TV, when we reported that “David Tepper Dumps 40% Of US Equity Exposure Despite Claiming “Stocks Inexpensive” in which we said the following:

At the start of Q4 2014, Appaloosa’s David Tepper made a series of statements – dismissing Bill Gross as irrelevant (nope – turmoil caused by PIMCO unwinds roiled credit markets), calling the end of the bond bull market (nope – yields went on make lower and lower lows), and finally proclaiming that stocks were inexpensive and multiples not high. So, one wonders, if stocks were inexpensive and multiples not high, why did Appaloosa dump 40% of its US equity exposure in that quarter (only to end the quarter with even more exuberance proclaiming that stocks could rise another 10% in 2015)? It appears that when David Tepper says “buy”, he means “buy… from me.”

Fast forward several months when just after the August market crash which sent the S&P to its first date with 1,812, Tepper was again on CNBC and made a series of bearish prognostication:

“I have problems with earnings growth [and] problems with multiples,” he said. “So I can’t really call myself a bull [near-term].”

 

Acknowledging he was not as definitive as usual, he said he’s “not loving it,” but if stocks were to fall 20 percent or so he’d be a buyer. He added that he still believes the market will go higher in the long term.

He added that “it might be a good time to take money off the table.”

That’s what he said. What did he do?

According to his latest 13F as the market was surging in the last quarter of 2015, Tepper was busy buying. So busy in fact, that he took his total long notional exposure as disclosed in Appaloosa’s 13-F from a modest $2.9BN as of September, to $5 billion as of the end of the year, an increase of 75%, in the process adding 40% to his longs.  Needless to say, stocks were not “dropping 20%”, in fact quite the opposite – they were surging into the year end Santa Rally.

 

To be sure, we don’t know what Tepper was doing with the short side of his book, as well as his credit/CDS exposure, but one thing is clear: when it comes to his longs, as Tepper was urging CNBC’s viewers to take money of the table, he was waving much of it in.

As a reminder, this is a man whose one bullish (or bearish) word on financial TV could “dramatically alter market sentiment.”

And that’s why David Tepper is a billionaire.


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