Tag: finance

When the 2016 race kicked kicked off last year, few pundits would have predicted Wisconsin’s April primary might be a game changer on both sides of the aisle. But the Badger state, which heads to the polls today, could be key in determining if the Republicans head to a contested convention and if Bernie Sanders retains momentum after five straight victories.

Polls close at 9 p.m. EDT. Results could be known shortly after the polls close.

Before we show what’s at stake, here is a reminder of what the current delegate breakdown looks like.

First the Democrats:

 

And the GOP:

 

Ahead of tonight’s primary, Trump has 737 of the 1,237 delegates needed to sew up the Republican nomination, and Mr Cruz 475. Clinton has 1,243 delegates to Mr Sanders’ 980, with 2,383 required for the Democratic nomination.

A Wisconsin victory for Cruz, who is leading in the polls, would raise the odds of the Republican nomination being wrested from Mr Trump in a contested convention, which could tear the party apart. Trump would need to elevate his game and reap 57% of remaining delegates to win outright before July’s party conference, according to the Associated Press.

The Real Clear Politics polling average put Cruz ahead of Trump, 35 percent to 32 percent, while Kasich trailed wilth 23 percent. On the Democratic side, Clinton led in the poll average, 48 percent to 47 percent.

Trump unleashed his wife Melania in Milwaukee on Monday as he sought to shore up his support among female voters. “No matter who you are, man or a woman, he treats everyone equal,” said 45-year-old Mrs Trump in a rare speech.

Among the Democrats, former Secretary of State Mrs Clinton is saddled with persistent questions about her honesty and trustworthiness.

Grassroots enthusiasm for Mr Sanders remains high, but the self-proclaimed democratic socialist needs to win at least 60% of all remaining delegates.

Both Clinton and Trump look likely to perform better in New York’s upcoming primary and five northeastern states that vote on 26 April. Wisconsin is the first of several midwestern and northeastern states voting in April. New York holds its primary on April 19.  Connecticut, Delaware, Maryland, Pennsylvania and Rhode Island hold their primaries on April 26.

Cruz and Mr Trump are calling for Ohio Governor John Kasich, the only other Republican still hanging on in the race, to drop out. But he has refused.

Raising the stake for Trump is that according to a just released Reuters/Ipsos poll Cruz has pulled into a statistical dead heat with front-runner Donald Trump.  Cruz received 35.2 percent of support to Trump’s 39.5 percent, the poll of 568 Republicans taken April 1-5 found. The numbers put the two within the poll’s 4.8 percentage-point credibility interval, a measure of accuracy. Cruz and Trump were also briefly in a dead heat on March 28.

Trump has led almost continually in national Reuters/Ipsos polling since last July. Ohio Governor John Kasich, the only other Republican still in the race for the party’s nomination, placed third in Tuesday’s Reuters/Ipsos poll, with 18.7 percent.

* * *

Here’s a rundown of everything at stake today:

GOP

State voting: Wisconsin

Delegates up for grabs: 42

Delegate Allocation explained: Of the 42 delegates, 24 are in Congressional districts, (3 in each of the 8 districts) and 18 are at-large delegates. The at-large delegates are winner-take-all and based on the statewide vote. Whoever wins the statewide vote gets all 18 delegates. The Congressional districts are winner-take-all based on district. So, for example, if Ted Cruz wins one Congressional district, he will get all 3 of the delegates there. If he wins all 8 districts, he will get all 24 delegates.

Why it matters: The setup makes it possible for the winner to sweep all 42 delegates, and makes it even more likely they will amass a majority. This presents an ideal opportunity for Cruz and John Kasich, who are trying to stop Donald Trump from clinching the 1,237 delegates needed for the nomination. The latest Marquette University Law School poll showed Cruz with 40-30 lead over Trump. Trump leads Cruz by 262 delegates, but Trump still needs to win 57 percent of the remaining delegates to get to 1,237. If Cruz wins big in Wisconsin, he makes Trump’s path to that number more complicated. And if John Kasich manages to win one or 2 congressional districts, that would set Trump back even further.

However, Trump does have one advantage: Wisconsin is an open primary, where he tends to perform better than in caucuses and closed primaries.

DEMOCRATS

State voting: Wisconsin

Delegates up for grabs: 86 pledged, and 10 superdelegates, former and current Democratic leaders and elected officials, who can select the candidate of their choosing, wherever they want and whenever they want, and can switch at any time.

Delegate Allocation explained: As is standard for the Democrats, both candidates have to get a minimum of 15 percent of the vote to amass any delegates. Both Clinton and Sanders are virtually certain to hit that threshold.

Why it matters: Sanders has proven he can play in the Midwest, beating Clinton in Michigan and coming in close behind her in Missouri and Illinois. According to a recent Marquette University Law School poll, he has a four point lead over her. Clinton leads Sanders by 263 pledged delegates, and her lead widens to 701 delegates when incorporating the superdelegates who have committed to her. Even if Clinton loses in Wisconsin, Sanders is unlikely to make a dent in that delegate lead; If the race is as close as the polls are forecasting, the Vermont senator is unlikely to gain many more delegates. And while Clinton needs to win 42 percent of the remaining pledged delegates, Sanders needs to win 57 percent. When factoring in superdelegates, Clinton need to win 36 percent and Sanders needs to win 73 percent.

But while math may be on her side, a loss in Wisconsin would mean Clinton heads into her adopted home state of New York having lost six states in two weeks — a fact Sanders is well aware of.

“I don’t want to get Hillary Clinton any more nervous than she already is,” he said at a campaign stop Monday in Wisconsin. “So don’t tell her this, but we win here, we win in New York State, we are on our way to the White House.”

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

Authored by Bill Bonner of Bonner & Partners (annotated by Acting-Man.com's Pater Tenebrarum),

Leaning Into the Wind

During our lifetime, three Fed chiefs have faced a similar challenge.

Each occupied the chairman’s seat at a time when “normalization” of interest rates was in order.

Recently, we remembered William McChesney Martin, head of the U.S. Fed under the Truman, Eisenhower, Kennedy, Johnson, and Nixon administrations. Today, we compare Martin with two of his successors, Mr. Paul Volcker and Ms. Janet Yellen. We allow you to draw your own conclusion.

 

Punchbowl theft alert!

In 1951, the Fed and the Treasury clashed over “normalizing” interest rate policy after almost 10 years of tight control. In 1942, after the U.S. entered World War II, and at the request of the Treasury, the Fed pegged interest rates at a low level to make it easier for the government to finance the war. Come peacetime, it had to finesse a return to market-set rates.

Of course, the Fed can never fully shirk its responsibilities or ignore its influence. Its voting committee, the Federal Open Market Committee (FOMC), has the ultimate say on setting short-term rates. But its hand on the controls can be heavy… or light. It can allow the market to express itself. Or it can shut the market up and do the talking itself.

After the troops came home, Martin developed two metaphors to describe his views on central banking. The first was that the central bank should neither set rates high nor low, but instead “lean into the wind.” The idea was to moderate market forces by exerting a little counter-cyclical pressure.

If the economy were running hot, the central bank would maintain its funds rate a little higher than usual. If the economy were cooling off, it would aim for a slightly lower rate. That brings us to the second of Martin’s metaphors.

The job of the Fed, he said, was to “take away the punch bowl just as the party gets going.” In other words, raise interest rates just when the economy starts to enter an unsustainable boom.

 

Times Change

Mr. Martin was not necessarily less intelligent than those who succeeded him. But times change. Fashions evolve. Today, Truman’s appointee as Fed chief might as well be wearing spats.

In February 1951, the annual consumer price index, or CPI – the most common measure of inflation – was running at almost 8% a year. President Truman summoned the entire FOMC to the White House – with Martin as the principal negotiator – to extract a pledge from them to keep interest rates pegged at low levels.

But the Fed dug its heels in and refused to “maintain the existing situation.” Martin then announced that he would allow interest rates to rise. And rise they did. From just under 1% when Martin took over as Fed chief, short-term rates stood at almost 4% at the start of the 1960s.

 

Frontal Assault

The next challenge came at the end of the 1970s. Paul Volcker, appointed by Jimmy Carter, was the man for the job. When Volcker took over the Fed, in August 1979, short-term rates and the CPI were somewhere north of 11%. And he aimed to bring both down to more normal levels.

But then as now, inflation had its friends. And everyone knew that bringing it under control would be painful. In 1980, Mr. Volcker spoke directly to the challenge:

After decades of inflation, many of us, more or less comfortably, have adapted our business and personal lives to the prospect of more inflation.

 

We count on capital gains from inflating house and land values as a substitute for real savings. We assume our competitors will match our aggressive pricing policies, and will also accede to high wage demands. We take comfort in our purchases of precious metals, art, and more exotic “collectibles” – or envy those who did buy – and are tempted to project essentially speculative price movements into the great beyond.

 

But none of this sense of accommodation to inflation can be a valid excuse for not acting to deal with the disease.

 

Anguish alert!

 

Getting inflation under control meant taking away not only the punch bowl, but also the entire buffet and open bar of money and credit on which the markets feasted.

But Volcker did not back away. He said what he meant and meant what he said. In June 1981, he dosed the economy with a 19.1% federal funds rate; in a few months, the fever was broken.

 

No Return to Normal

And now, we have Ms. Janet Yellen at the Fed’s helm, her firm grip on the wheel… her steely eye on the horizon. The situation is nothing like that which Mr. Volcker faced. Instead of a CPI in double-digits, today, the Fed is worried that consumer prices are not going up fast enough.

“An important concern about persistently low inflation,” is how Fed governor Lael Brainard described what was disturbing her sleep. And $7 trillion of developed-country government debt now trades at yields below zero – providing governments around the world with free money.

Getting back to normal is never easy, especially when you don’t want to get there. On March 27, 2015, Ms. Yellen spoke to her challenge.

 

The creature from the punchbowl!

Photo credit: Pablo Martinez Monsivais / Keystone / AP

 

“Normalizing Monetary Policy: Prospects and Perspectives” was the title of her speech. But both the content and the consequences were very different from those of either Mr. Volcker or Mr. Martin.

Where Mr. Martin had insisted that dictating interest rates was “inconsistent with… a private enterprise system,” Ms. Yellen saw no inconsistency at all. Where Mr. Martin saw the need in a great emergency – World War II – to depart from market-set interest rates, Ms. Yellen is ready to leave the market behind at the drop of the Dow.

And where Mr. Martin and Mr. Volcker both went resolutely about their work, Ms. Yellen seems unsure. A year ago, she said she would normalize rates “only gradually”… and that, although she had the “macro-prudential regulatory and supervisory tools” to do the job, investors should not expect miracles.

Nor did they receive any. In the 12 months that have gone by since her speech, only 25 basis points (even sparrows refuse to bend to pick up such trivial morsels) is the total of her niggardly gift to savers. As for “normal”… it is still nowhere in sight.

via Zero Hedge http://ift.tt/1TAyaY9 Tyler Durden

via Zero Hedge http://ift.tt/1oA5HVm williambanzai7

The infamous Microsoft help paperclip makes a timely appearance, providing options for all of your year-end tax planning needs.

h/t @ebitdad

via Zero Hedge http://ift.tt/1RMus99 Tyler Durden

Despite bookies' odds at 66% that The Democratic Party will win The White House in November, economic models predict a Republican victory (with or without Trump).

 

 

As The Hill reports, Republicans are expected to win the White House under two economic models that have accurately forecast presidential elections for decades. A third model run by Moody’s Analytics predicts Democrats will win the White House, in part because of President Obama’s rising approval rating.

“As economists this is a very unusual election and there’s a lot more uncertainty introduced this time around that could upset the balance and the historical relationship of how marginal voters vote,” said Dan White, an economist with Moody’s Analytics who oversees the firm’s monthly election model.

 

Ray Fair, a Yale professor who launched his model in 1978, told The Hill that while all elections include unruly features that an economic model can’t pick up, “this one seems particularly unusual.”

 

“If there’s any time in which personalities would trump the economy it would be this election,” Fair said.

 

Fair’s model has correctly forecast all but three presidential races since 1916 but was wrong in 2012, when it predicted a narrow loss for Obama to Mitt Romney.

 

It relies on just three pieces of information: per capita growth rate of gross domestic product in the three quarters before an election, inflation over the entire presidential term and the number of quarters during the term growth per capita exceeds 3.2 percent.

 

Given the sluggish economy, his model doesn’t show enough growth under Obama to predict a Democratic win in the election. In his most recent forecast from January, his model predicted a 45.66 percent share of the presidential vote for the Democratic candidate, less than the 49 percent it predicted in 2012.

 

The other two models, unlike Fair’s, consider the incumbent president’s approval rating. In both cases, Obama’s improving favorability helps his party’s chances of winning the White House. But only one of those models predicts a Democratic win.

White said that one of the most frequently asked questions he gets is whether a Trump variable could be added into the model to test out how his brand of fireworks factors in.

No way, he said.

 

“The model doesn’t know or care if there are two or 10 candidates,” he said. “It knows the economics and whether marginal swing voters will keep the incumbent party in or not.”

In fact, their models are designed to sweep away the effects of boisterous personalities and the usual ebbs and flows of a long presidential campaign season and instead track specific economic factors that voters deem most important.

"So the logic that says that these models should have worked over the past few decades also says that they should work in this election cycle, too,” he told The Hill.

 

“There's no reason to think the models should do better or worse in 2016,” he said.

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

By EconMatters

A strong API Report reporting over a 4 million barrel drawdown in Oil inventories, and a report out of Kuwait saying that an output freeze deal by major oil producers would proceed without Iran will be bullish for the oil market. We expect the short covering to begin tonight, tomorrow and for the next 8 days before the Doha Meeting.

© EconMatters All Rights Reserved | Facebook | Twitter | YouTube | Email Digest | Kindle  

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Submitted by Simon Black via SovereignMan.com,

The Internet practically exploded this weekend after a detailed report was published proving that dozens of corrupt politicians around the world have been stealing public funds and hiding the loot overseas.

In other news, the Pope is Catholic.

Not to make light of this, but this hardly comes as a surprise. There’s some Grade A filth in positions of power who routinely funnel public funds into their own pockets.

Whether they secret the funds offshore, buy expensive flats in London, purchase Bitcoin, or stuff cash under their mattresses seems hardly relevant.

The real issue is that systems of government routinely put morally bankrupt individuals in control of trillions of dollars of cash.

Seriously, what do people expect is going to happen?

Yet this never seems to be concern. The media outcry always seems to focus on the manner in which public officials hide their assets, not the fact that the funds were stolen to begin with.

This report targets the illicit use of offshore corporations, specifically those set up by a single law firm in Panama.

In reality, this issue hardly boils down to one firm.

There are thousands of law firms all around the world, including in the UK and the United States, that register companies for their clients.

Some of those companies end up being used for nefarious purposes, including fraud and theft.

But it’s crazy to presume that corrupt officials and con artists are the only ones who would ever need a company in one of these “shady” jurisdictions.

(Those “shady” jurisdictions, by the way, include Wyoming, South Dakota, and Delaware.)

Alongside the report is a video with a scantily clad porno actress named Lisa Ann, star of “Who’s Nailin’ Paylin,” a satire in which Ms. Ann spoofs former Vice Presidential candidate Sarah Palin engaged in sexual… congress.

No I am not making this up…

In her video, the porn starlet explains that only arms dealers and scumbags set up asset protect vehicles like anonymous shell companies, which can include something like a Delaware LLC.

Never mind that people in the Land of the Free are living in the most litigious society in human history.

Or that last year the US government stole more money and private property from its citizens through civil asset forfeiture than all the thieves and felons in the country combined.

Given such obvious realities, you’d have to be crazy to NOT take steps to protect your savings.

But if a porn star says that you’re a scumbag who ‘gets in the way of justice’ by setting up a Delaware LLC to safeguard your assets and reduce your legal liability, it must be true.

So let it be written.

Look, the anger and disgust of seeing corrupt people getting away with a crime is understandable, particularly when that crime is stealing from taxpayers.

But nobody ever seems to attack the real problem– that these people are ever put in positions enabling them to steal taxpayer funds to begin with.

Instead the spotlight is always on how they hide it. That’s like focusing on what color T-shirt the ax murderer was wearing.

My concern is that is if corrupt officials shift tactics and start buying gold, there will be calls to outlaw gold. Or if they start holding cash, there will be even louder calls to ban cash.

These reports are incredibly damning for the dozens, even hundreds or thousands of bad actors who abuse the system.

But at the same time they create a mass hysteria that puts law-abiding taxpayers who value their financial privacy into the same category as some corrupt African dictator.

Listen in to today’s podcast as we discuss this trend even more, what I call the “New Dark Ages”.

We’ve entered a time where privacy and personal freedom are trivial inconveniences rather than the bedrock cultural values they used to be.

For example, I question when our society degenerated to the point that a porn star gets to tell us what we should and should not be able to do with our own private property. . .

I’d advise you to turn DOWN the volume. This podcast is probably the most intense I’ve ever done. Listen in here.

(click image for link to podcast)

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Earlier today, for the first time we got a glimpse into some of the American names allegedly contained in the “Panama Papers”, largest ever leak. “Some”, not all, and “allegedly” because as we said yesterday, “one can’t help but wonder: why not do a Wikileaks type data dump, one which reveals if not all the 2.6 terabytes of data due to security concerns, then at least the identities of these 441 US-based clients. After all, with the rest of the world has already been extensively shamed, it’s only fair to open US books as well.”

The exact same question appeared in an interview conducted between Wired magazine and the director of the organization that released the Panama Papers, the International Consortium of Investigative Journalists, or ICIJ, Gerard Ryle.

This is what Ryle said:

Ryle says that the media organizations have no plans to release the full dataset, WikiLeaks-style, which he argues would expose the sensitive information of innocent private individuals along with the public figures on which the group’s reporting has focused. “We’re not WikiLeaks. We’re trying to show that journalism can be done responsibly,” Ryle says. He says he advised the reporters from all the participating media outlets to “go crazy, but tell us what’s in the public interest for your country.”

Question aside about who it is that gets to decide which “innocent private individuals” are to be left alone, Wikileaks clearly did not like being characterized as conducting “irresponsible” journalism – and to the contrary, many in the public arena have called for another massive, distributed effort to get to the bottom of a 2.4TB treasure trove of data which a handful of journalists will simply be unable to dig through – and moments ago, on Twitter, accused the ICIJ of being a “Washington DC based Ford, Soros funded soft-power tax-dodge” which “has a WikiLeaks problem.”

Washington DC based Ford, Soros funded soft-power tax-dodge “ICIJ” has a WikiLeaks problem #PanamaPapers https://t.co/xEXlmGg0fG

— WikiLeaks (@wikileaks) April 5, 2016

 

Moments later, in a subsequent tweet it added that the “Putin attack was produced by OCCRP which targets Russia & former USSR and was funded by USAID & Soros.“

#PanamaPapers Putin attack was produced by OCCRP which targets Russia & former USSR and was funded by USAID & Soros. http://pic.twitter.com/tgeKfLuROn

— WikiLeaks (@wikileaks) April 5, 2016

#PanamaPapers: WikiLeaks' Kristinn Hrafnsson calls for data leak to be released in full https://t.co/5FAOtaO2Ix

— WikiLeaks (@wikileaks) April 5, 2016

And so, a new contest is born: one between the “old” source of mega leaks, and the new one. We wonder if and when Edward Snowden and/or Glenn Greenwald will also chime in.

But we are far more interested if now, that there appears to be a war brewing between Wikileaks and ICIJ, who what “information” will be released next, and whether whatever comes out will put the entire Panama Papers project in a different perspective, one which, as even Bloomberg has hinted, may have been to benefit the last remaining global tax haven around, the United States itself, as well as the most notorious provider of “tax haven” services in in said country: Rothschild.

via Zero Hedge http://ift.tt/1Wazjq8 Tyler Durden

That San Francisco, ground zero of the second tech – this time private (and currently bursting) – bubble, has a housing market that is “just a little frothy” is no surprise to anyone, but even we had to chuckle when we saw this billboard making the twitter rounds.

 

As Marketwatch notes, real estate is so frothy in the San Francisco Bay Area that a new development in the city’s Lake Merced neighborhood felt the need to advertise its townhomes on a billboard as million-dollar deals – get in now while the price is right!

This is what the “low $1,000,000s” will buy you: a 1,547 square foot, 3-bedroom, 2-bath townhome (listed on real estate site Redfin for $1,012,000+).

 

Feel like hunting for better bargains? Then how about this 3-bedroom, 3.5-bathroom, 2,393 square foot townhome listed for $1,649,900+.

“You’ll take in the lifestyle of the city but leave all the limitations of San Francisco behind,” according to the development’s website. “So, when your day is done, you’ll pull into the garage, hit the button and walk into a place that’s different from the start.”

Translation: these aren’t located near the hustle and bustle. The Lake Merced area is located in the city’s southwest corner, far from downtown and other popular neighborhoods in the central parts of the city.

For some context, here’s a look at the rest of the San Francisco housing market. This shack was listed for $350,000 and sold in September 2015 for $408,000, nearly 17% above the asking price. The real-estate agent referred to the “home” as “above and beyond distressed.”

If that didn’t sufficiently impress (or exasperate) you, take a look at some listings in the city’s more central areas, which may leave you thinking “low 1,000,000s” in Lake Merced is a deal after all.

This 1-bedroom, 2-bath home is located near the baseball stadium AT&T Park. It’s 1,428 square feet and is listed for $1,950,000, plus $563.36 in monthly homeowners association dues.

 

This 3-bedroom, 2-bath home is located in hipster enclave Mission Dolores and is larger at 2,580 square feet. It is listed with the words “huge price reduction” for just $2,599,000.

 

As a reminder, according to Case Shiller, home prices in San Francisco rose 10.5% over the past year. U.S. house prices overall rose 5.7% compared with a year ago in January, or about three times more than average wages. Since 2012, median housing prices in San Francisco have more than doubled, hitting $1.225 million in February 2016, as the following dramatic charts demonstrate.

 

And here is the problem: to be able to purchase a house in San Francisco, a prospective buyer should make on average over quarter million dollars per year, nearly 6 times more than for the broader U.S.

Much more on the San Fran housing market in the Paradon “March 2016 San Francisco Real Estate Report”

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