Tag: news

As the market has swung from despair in the first half of Q1 to sheer, central-bank driven euphoria, here are some words of cautin from SocGen’s Andrew Lapthorne.

From sanguine-to-bearish-to-complacent – What next?

So far 2016 has been quite an emotional roller coaster, with equity markets having gone from sanguine-to-bearish-to-complacent in the space of just 64 trading days. At one point having been down almost 12% YTD, MSCI World has finished the quarter almost flat. Emerging Markets are now up 5.4% YTD, believe it or not. Equity volatility, as measured by VIX, having jumped from 18 to 28 by mid-quarter now finds itself sub 14 – its lowest level since August last year, prior to the devaluation of the Yuan, and a level normally associated with the good times.

However the outlook remains shaky, with the first quarter seeing substantial downward revisions to global GDP and global profit expectations. The consensus is now pencilling in very low single digit EPS growth in most regions in 2016, which given the current pace of downgrades is likely to run negative within the next few months. Even trailing US S&P 500 pro-forma EPS growth (i.e., excluding all the bad stuff) has turned negative during the last few weeks – a feat never seen outside of a US recession.

These cyclical concerns are reflected in the strong outperformance of bonds during the quarter, with most 10 year sovereign bonds delivering around 4-5% and the more defensive equity styles clearly positive in Q1, with the likes of our SGQI index up 5.5% YTD, whilst our more cyclical and Japan exposed SGVB index is off 3.8%. Japan had a dire quarter, with a disastrous foray into negative rates (depriving the market of a much desired increase in QE), along with a sharp rally in the Yen leading to a slump in the Nikkei 225, which remains down 12.8% year-to-date. Yet surprisingly the Japan smallcaps Mothers index is up 12.9%.

The Fed is increasingly worried about these ever-weaker fundamentals, yet asset markets seem more preoccupied with the omnipresence of the Fed put than downside cyclical risk. This then perhaps points to the bigger underlying concern for investors, the overwhelming build-up of leverage in the system. For in the absence of sensible drivers of returns (i.e. sensible interest rates, EPS growth etc.), investors and corporates resort to leverage. Without earnings growth, corporates have been bringing on debt to buy back shares. With miserly rates of return on offer in fixed income markets, investors are leveraging up. The longer the Fed feeds this game, the bigger the mess when the inevitable downswing comes along.

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

There is a growing recognition of the increasing tail wagging the dog nature of the internet's control over election outcomes. We recently detailed "the hidden persuaders" at work showing how the internet has spawned subtle forms of influence that can flip elections and manipulate everything we say, think and do. Confirming all of this to be chillingly true is Andrés Sepúlveda, who rigged elections throughout Latin America for almost a decade. On the question of whether the U.S. presidential campaign is being tampered with, he is unequivocal – "I'm 100 percent sure it is."

Liberty Blitzkrieg's Mike Krieger excerpts a must-read Bloomberg article,

In July 2015, Sepúlveda sat in the small courtyard of the Bunker, poured himself a cup of coffee from a thermos, and took out a pack of Marlboro cigarettes. He says he wants to tell his story because the public doesn’t grasp the power hackers exert over modern elections or the specialized skills needed to stop them. “I worked with presidents, public figures with great power, and did many things with absolutely no regrets because I did it with full conviction and under a clear objective, to end dictatorship and socialist governments in Latin America,” he says. “I have always said that there are two types of politics—what people see and what really makes things happen. I worked in politics that are not seen.”

 

Rendón, says Sepúlveda, saw that hackers could be completely integrated into a modern political operation, running attack ads, researching the opposition, and finding ways to suppress a foe’s turnout. As for Sepúlveda, his insight was to understand that voters trusted what they thought were spontaneous expressions of real people on social media more than they did experts on television and in newspapers. He knew that accounts could be faked and social media trends fabricated, all relatively cheaply. He wrote a software program, now called Social Media Predator, to manage and direct a virtual army of fake Twitter accounts. The software let him quickly change names, profile pictures, and biographies to fit any need. Eventually, he discovered, he could manipulate the public debate as easily as moving pieces on a chessboard—or, as he puts it, “When I realized that people believe what the Internet says more than reality, I discovered that I had the power to make people believe almost anything.”

 

Sepúlveda says he was offered several political jobs in Spain, which he says he turned down because he was too busy. On the question of whether the U.S. presidential campaign is being tampered with, he is unequivocal. “I’m 100 percent sure it is,” he says.

 

– From the excellent Bloomberg article: How to Hack an Election

It was just before midnight when Enrique Peña Nieto declared victory as the newly elected president of Mexico. Peña Nieto was a lawyer and a millionaire, from a family of mayors and governors. His wife was a telenovela star. He beamed as he was showered with red, green, and white confetti at the Mexico City headquarters of the Institutional Revolutionary Party, or PRI, which had ruled for more than 70 years before being forced out in 2000. Returning the party to power on that night in July 2012, Peña Nieto vowed to tame drug violence, fight corruption, and open a more transparent era in Mexican politics.

 

Two thousand miles away, in an apartment in Bogotá’s upscale Chicó Navarra neighborhood, Andrés Sepúlveda sat before six computer screens. Sepúlveda is Colombian, bricklike, with a shaved head, goatee, and a tattoo of a QR code containing an encryption key on the back of his head. On his nape are the words “</head>” and “<body>” stacked atop each other, dark riffs on coding. He was watching a live feed of Peña Nieto’s victory party, waiting for an official declaration of the results.

 

When Peña Nieto won, Sepúlveda began destroying evidence. He drilled holes in flash drives, hard drives, and cell phones, fried their circuits in a microwave, then broke them to shards with a hammer. He shredded documents and flushed them down the toilet and erased servers in Russia and Ukraine rented anonymously with Bitcoins. He was dismantling what he says was a secret history of one of the dirtiest Latin American campaigns in recent memory.

 

For eight years, Sepúlveda, now 31, says he traveled the continent rigging major political campaigns. With a budget of $600,000, the Peña Nieto job was by far his most complex. He led a team of hackers that stole campaign strategies, manipulated social media to create false waves of enthusiasm and derision, and installed spyware in opposition offices, all to help Peña Nieto, a right-of-center candidate, eke out a victory. On that July night, he cracked bottle after bottle of Colón Negra beer in celebration. As usual on election night, he was alone.

 

His teams worked on presidential elections in Nicaragua, Panama, Honduras, El Salvador, Colombia, Mexico, Costa Rica, Guatemala, and Venezuela. Campaigns mentioned in this story were contacted through former and current spokespeople; none but Mexico’s PRI and the campaign of Guatemala’s National Advancement Party would comment.

 

Usually, he says, he was on the payroll of Juan José Rendón, a Miami-based political consultant who’s been called the Karl Rove of Latin America. Rendón denies using Sepúlveda for anything illegal, and categorically disputes the account Sepúlveda gave Bloomberg Businessweek of their relationship, but admits knowing him and using him to do website design. “If I talked to him maybe once or twice, it was in a group session about that, about the Web,” he says. “I don’t do illegal stuff at all. There is negative campaigning. They don’t like it—OK. But if it’s legal, I’m gonna do it. I’m not a saint, but I’m not a criminal.” While Sepúlveda’s policy was to destroy all data at the completion of a job, he left some documents with members of his hacking teams and other trusted third parties as a secret “insurance policy.”

 

Sepúlveda provided Bloomberg Businessweek with what he says are e-mails showing conversations between him, Rendón, and Rendón’s consulting firm concerning hacking and the progress of campaign-related cyber attacks. Rendón says the e-mails are fake. An analysis by an independent computer security firm said a sample of the e-mails they examined appeared authentic. Some of Sepúlveda’s descriptions of his actions match published accounts of events during various election campaigns, but other details couldn’t be independently verified. One person working on the campaign in Mexico, who asked not to be identified out of fear for his safety, substantially confirmed Sepúlveda’s accounts of his and Rendón’s roles in that election.

 

Sepúlveda says he was offered several political jobs in Spain, which he says he turned down because he was too busy. On the question of whether the U.S. presidential campaign is being tampered with, he is unequivocal. “I’m 100 percent sure it is,” he says.

 

Rendón, says Sepúlveda, saw that hackers could be completely integrated into a modern political operation, running attack ads, researching the opposition, and finding ways to suppress a foe’s turnout. As for Sepúlveda, his insight was to understand that voters trusted what they thought were spontaneous expressions of real people on social media more than they did experts on television and in newspapers. He knew that accounts could be faked and social media trends fabricated, all relatively cheaply. He wrote a software program, now called Social Media Predator, to manage and direct a virtual army of fake Twitter accounts. The software let him quickly change names, profile pictures, and biographies to fit any need. Eventually, he discovered, he could manipulate the public debate as easily as moving pieces on a chessboard—or, as he puts it, “When I realized that people believe what the Internet says more than reality, I discovered that I had the power to make people believe almost anything.”

 

For most jobs, Sepúlveda assembled a crew and operated out of rental homes and apartments in Bogotá. He had a rotating group of 7 to 15 hackers brought in from across Latin America, drawing on the various regions’ specialties. Brazilians, in his view, develop the best malware. Venezuelans and Ecuadoreans are superb at scanning systems and software for vulnerabilities. Argentines are mobile intercept artists. Mexicans are masterly hackers in general but talk too much. Sepúlveda used them only in emergencies.

 

Chávez won but died five months later of cancer, triggering an emergency election, won by Nicolás Maduro. The day before Maduro claimed victory, Sepúlveda hacked his Twitter account and posted allegations of election fraud. Blaming “conspiracy hackings from abroad,” the government of Venezuela disabled the Internet across the entire country for 20 minutes.

 

Sepúlveda didn’t like the idea of working in Mexico, a dangerous country for involvement in public life. But Rendón persuaded him to travel there for short trips, starting in 2008, often flying him in on his private jet. Working at one point in Tabasco, on the sweltering Gulf of Mexico, Sepúlveda hacked a political boss who turned out to have connections to a drug cartel. After Rendón’s security team learned of a plan to kill Sepúlveda, he spent a night in an armored Chevy Suburban before returning to Mexico City.

 

Early polls showed Peña Nieto 20 points ahead, but his supporters weren’t taking chances. Sepúlveda’s team installed malware in routers in the headquarters of the PRD candidate, which let him tap the phones and computers of anyone using the network, including the candidate. He took similar steps against PAN’s Vázquez Mota. When the candidates’ teams prepared policy speeches, Sepúlveda had the details as soon as a speechwriter’s fingers hit the keyboard. Sepúlveda saw the opponents’ upcoming meetings and campaign schedules before their own teams did.

 

Money was no problem. At one point, Sepúlveda spent $50,000 on high-end Russian software that made quick work of tapping Apple, BlackBerry, and Android phones. He also splurged on the very best fake Twitter profiles; they’d been maintained for at least a year, giving them a patina of believability.

 

Just about anything the digital dark arts could offer to Peña Nieto’s campaign or important local allies, Sepúlveda and his team provided. On election night, he had computers call tens of thousands of voters with prerecorded phone messages at 3 a.m. in the critical swing state of Jalisco. The calls appeared to come from the campaign of popular left-wing gubernatorial candidate Enrique Alfaro Ramírez. That angered voters—that was the point—and Alfaro lost by a slim margin. In another governor’s race, in Tabasco, Sepúlveda set up fake Facebook accounts of gay men claiming to back a conservative Catholic candidate representing the PAN, a stunt designed to alienate his base. “I always suspected something was off,” the candidate, Gerardo Priego, said recently when told how Sepúlveda’s team manipulated social media in the campaign.

 

In 2012, Colombian President Juan Manuel Santos, Uribe’s successor, unexpectedly restarted peace talks with the FARC, hoping to end a 50-year war. Furious, Uribe, whose father was killed by FARC guerrillas, created a party and backed an alternative candidate, Oscar Iván Zuluaga, who opposed the talks.

 

Rendón, who was working for Santos, wanted Sepúlveda to join his team, but Sepúlveda turned him down. He considered Rendón’s willingness to work for a candidate supporting peace with the FARC a betrayal and suspected the consultant was going soft, choosing money over principles. Sepúlveda says he was motivated by ideology first and money second, and that if he wanted to get rich he could have made a lot more hacking financial systems than elections. For the first time, he decided to oppose his mentor.

 

Sepúlveda went to work for the opposition, reporting directly to Zuluaga’s campaign manager, Luis Alfonso Hoyos. (Zuluaga denies any knowledge of hacking; Hoyos couldn’t be reached for comment.) Together, Sepúlveda says, they came up with a plan to discredit the president by showing that the guerrillas continued to traffic in drugs and violence even as they talked about peace. Within months, Sepúlveda hacked the phones and e-mail accounts of more than 100 militants, including the FARC’s leader, Rodrigo Londoño, also known as Timochenko. After assembling a thick file on the FARC, including evidence of the group’s suppression of peasant votes in the countryside, Sepúlveda agreed to accompany Hoyos to the offices of a Bogotá TV news program and present the evidence.

 

It may not have been wise to work so doggedly and publicly against a party in power. A month later, Sepúlveda was smoking on the terrace of his Bogotá office when he saw a caravan of police vehicles pull up. Forty black-clad commandos raided the office to arrest him. Sepúlveda blamed his carelessness at the TV station for the arrest. He believes someone there turned him in. In court, he wore a bulletproof vest and sat surrounded by guards with bomb shields. In the back of the courtroom, men held up pictures of his family, making a slashing gesture across their throats or holding a hand over their mouths—stay silent or else. Abandoned by former allies, he eventually pleaded guilty to espionage, hacking, and other crimes in exchange for a 10-year sentence.

 

Three days after arriving at Bogotá’s La Picota prison, he went to the dentist and was ambushed by men with knives and razors, but was saved by guards. A week later, guards woke him and rushed him from his cell, saying they had heard about a plot to shoot him with a silenced pistol as he slept. After national police intercepted phone calls revealing yet another plot, he’s now in solitary confinement at a maximum-security facility in a rundown area of central Bogotá. He sleeps with a bulletproof blanket and vest at his bedside, behind bombproof doors. Guards check on him every hour. As part of his plea deal, he says, he’s turned government witness, helping investigators assess possible cases against the former candidate, Zuluaga, and his strategist, Hoyos. Authorities issued an indictment for the arrest of Hoyts  but according to Colombian press reports he’s fled to Miami.

 

In July 2015, Sepúlveda sat in the small courtyard of the Bunker, poured himself a cup of coffee from a thermos, and took out a pack of Marlboro cigarettes. He says he wants to tell his story because the public doesn’t grasp the power hackers exert over modern elections or the specialized skills needed to stop them. “I worked with presidents, public figures with great power, and did many things with absolutely no regrets because I did it with full conviction and under a clear objective, to end dictatorship and socialist governments in Latin America,” he says. “I have always said that there are two types of politics—what people see and what really makes things happen. I worked in politics that are not seen.”

 

Last year, based on anonymous sources, the Colombian media reported that Rendón was working for Donald Trump’s presidential campaign. Rendón calls the reports untrue. The campaign did approach him, he says, but he turned them down because he dislikes Trump. “To my knowledge we are not familiar with this individual,” says Trump’s spokeswoman, Hope Hicks. “I have never heard of him, and the same goes for other senior staff members.” But Rendón says he’s in talks with another leading U.S. presidential campaign—he wouldn’t say which—to begin working for it once the primaries wrap up and the general election begins.

Now I wonder…who might that be?

 

As we concluded prevously, we are living in a world in which a handful of high-tech companies, sometimes working hand-in-hand with governments, are not only monitoring much of our activity, but are also invisibly controlling more and more of what we think, feel, do and say. The technology that now surrounds us is not just a harmless toy; it has also made possible undetectable and untraceable manipulations of entire populations – manipulations that have no precedent in human history and that are currently well beyond the scope of existing regulations and laws. The new hidden persuaders are bigger, bolder and badder than anything Vance Packard ever envisioned. If we choose to ignore this, we do so at our peril

via Zero Hedge http://ift.tt/1X6u491 Tyler Durden

Having slashed rates below zero and unleashed various rounds of asset-purchases, the Riksbank (Denmark's central bank) recently warned the rest of the world that "we have reached the limits of monetary policy." Now, however, Denmark's Systemic Risk Council has raised the financial system warning level to DEFCON1, warning that low levels of interest rates have led to excessive risk-taking and risk illusion among borrowers and credit institutions… and low market liquidity combijed with sudden shifts in risk perceptions may still lead to significant falls in asset prices and fire sales.

 

With so many of the world's nations going NIRP…

 

At least one of the world's central banks is worried about it…

The Systemic Risk Council has held its thirteenth meeting.

 

Sudden changes in risk perception in the financial markets combined with low market liquidity may still lead to significant falls in asset prices and fire sales. Due caution should be exerted in relation to the low level of interest rates, which may lead to excessive risk-taking and risk illusion among borrowers and credit institutions.

 

There may be systemic risks associated with a sudden change in risk perception in the financial markets combined with low market liquidity

 

Recent months have seen a partial materialisation of the risk of a rapid and marked fall in asset prices in some of the global financial markets. The large fluctuations in the financial markets in early 2016 have not had systemic consequences in Denmark. Sudden changes in the perception of risk in the financial markets combined with low market liquidity may still lead to significant falls in asset prices and fire sales. The Council's observation of 30 September 2014 regarding low interest rates and build-up of systemic risks still applies.

 

Due caution should still be exercised in relation to the low level of interest rates

 

Seasonally adjusted prices in the housing market continued to rise in the 2nd half of 2015 – albeit at a more moderate pace than in the 1st half for single family houses. Expectations of future price developments remain high. While growth in housing loans in Copenhagen and Aarhus has subsided, market expectations of low interest rates several years ahead may still lead to excessive risk-taking and risk illusion among borrowers and credit institutions. That may be the case if the risks of higher interest rates and a reversal in house prices are not taken into account to a sufficient degree. Council's observation of 27 March 2015 regarding low interest rates and build-up of systemic risks still applies.

Still – as long as Janet says everything is fine (or terrible), then all thgat excessive risk taking is fine.

And for those demanding moar, we remind raeders of Denmark’s central bank governor, Lars Rohde comments that monetary policy has reached its limit. "We have reached a point where monetary policy no longer has a big overall impact,’’ he said on Monday. "[It's] overstreched [and] there’s a limit to what more one can do’."

via Zero Hedge http://ift.tt/1W0Xnvl Tyler Durden

One of the recurring concerns involving Europe’s seemingly perpetual economic, financial and social crises, is that these have been largely  predetermined, “scripted” and deliberate acts.

This is something the former head of the Bank of England admitted one month ago when Mervyn King said that Europe’s economic depression “is the result of “deliberate” policy choices made by EU elites.  It is also what AIG Banque strategist Bernard Connolly said back in 2008 when laying out “What Europe Wants”

To use global issues as excuses to extend its power:

• environmental issues: increase control over member countries; advance idea of global governance
• terrorism: use excuse for greater control over police and judicial issues; increase extent of surveillance
• global financial crisis: kill two birds (free market; Anglo-Saxon economies) with one stone (Europe-wide regulator; attempts at global financial governance)
• EMU: create a crisis to force introduction of “European economic government”

This morning we got another confirmation of just how supernational organizations “plan” European crises in advance to further their goals, when Wikileaks published the transcript of teleconference that took place on March 19, 2016 between the top two IMF officials in charge of managing the Greek debt crisis – Poul Thomsen, the head of the IMF’s European Department, and Delia Velkouleskou, the IMF Mission Chief for Greece.

In the transcript, the IMF staffers are planning to tell Germany it will abandon the troika if the IMF and the commission fail to reach an agreement on Greek debt relief.  More to the point, the IMF officials say that a threat of an imminent financial catastrophe was needed to force other players into accepting its measures such as cutting Greek pensions and working conditions, or as Bloomberg puts it, “considering a plan to cause a credit event in Greece and destabilize Europe.”

According to the leaked conversation, the IMF – which has been pushing for a debt haircut for Greece ever since last August’s 3rd bailout – believes a credit event as only thing that could trigger a Greek deal; the “event” is expected to take place some time around the June 23 Brexit referendum.

As summarized by Bloomberg, the leak shows officials linking Greek issue with U.K. referendum risking general political destabilization in Europe.

The leaked transcript reveals how the IMF plans to use Greece as a pawn in its ongoing feud with Germany’s chancelleor in order to achieve the desired Greek debt reduction which Germany has been decidedly against: in the leak we learn about the intention of IMF to threaten German Chancellor Angela Merkel to force her to accept the IMF’s demands at a critical point.

From the Transcript:

THOMSEN: Well, I don’t know. But this is… I think about it differently. What is going to bring it all to a decision point? In the past there has been only one time when the decision has been made and then that was when they were about to run out of money seriously and to default. Right?

 

VELKOULESKOU: Right!

 

THOMSEN: And possibly this is what is going to happen again. In that case, it drags on until July, and clearly the Europeans are not going to have any discussions for a month before the Brexits and so, at some stage they will want to take a break and then they want to  start again after the European referendum.

 

VELKOULESKOU: That’s right.

 

THOMSEN: That is one possibility. Another possibility is one that I thought would have happened already and I am surprised that it has not happened, is that, because of the refugee situation, they take a decision… that they want to come to a conclusion. Ok? And the Germans raise the issue of the management… and basically we at that time say “Look, you Mrs. Merkel you face a question, you have to think about what is more costly: to go ahead without the IMF, would the Bundestag say ‘The IMF is not on board’? or to pick the debt relief that we think that Greece needs in order to keep us on board?” Right? That is really the issue.

 

* * *

 

VELKOULESKOU: I agree that we need an event, but I don’t know what that will be. But I think Dijsselbloem is trying not to generate an event, but to jump start this discussion somehow on debt, that essentially is about us being on board or not at the end of the day.

 

THOMSEN: Yeah, but you know, that discussion of the measures and the discussion of the debt can go on forever, until some high up.. until they hit the July payment or until the leaders decide that we need to come to an agreement. But there is nothing in there that otherwise is going to force a compromise. Right? It is going to go on forever.

The IMF is also shown as continuing to pull the strings of the Greek government which has so far refused to compromise on any major reforms, as has been the case since the first bailout.

As the Guardian notes, Greek finance minister Euclid Tsakalotos has accused the IMF of imposing draconian measures, including on pension reform. The transcript quotes Velculescu as saying: “What is interesting though is that [Greece] did give in … they did give a little bit on both the income tax reform and on the … both on the tax credit and the supplementary pensions”. Thomsen’s view was that the Greeks “are not even getting close [to coming] around to accept our views”. Velculescu argued that “if [the Greek government] get pressured enough, they would … But they don’t have any incentive and they know that the commission is willing to compromise, so that is the problem.”

Below is Paul mason’s summary of what is shaping up as the next political scandal.

The International Monetary Fund has been caught, red handed, plotting to stage a “credit event” that forces Greece to the edge of bankruptcy, using the pretext of the Brexit referendum.

 

No, this is not the plot of the next Bond movie. It is the transcript of a teleconference between the IMF’s chief negotiator, Poul Thomsen and Delia Velculescu, head of the IMF mission to Greece. 

 

Released by Wikileaks, the discussion took place in Athens just before the IMF walked out of talks aimed at giving Greece the green light for the next stage of its bailout.

 

The situation is: the IMF does not believe the numbers being used by both Greece and Europe to do the next stage of the deal. It does not want to take part in the bailout. Meanwhile the EU cannot do the deal without the IMF because the German parliament won’t allow it.

 

* * *

 

Let me decode. An “event” is a financial crisis bringing Greece close to default. Just like last year, when the banks closed, millions of people faced economic and psychological catastrophe.

 

Only this time, the IMF wants to inflict that catastrophe on a nation holding tens of thousands of refugees and tasked with one of the most complex and legally dubious international border policing missions in modern history.

 

The Greek government is furious: “we are not going to let the IMF play with fire,” a source told me.

 

But the issue is out of Greek hands. In the end, as Thomsen hints in the transcript, only the European Commission and above all the German government can decide to honour the terms of the deal it did to bail Greece out last July.

 

The transcript, though received with fury and incredulity in Greece, will drop like a bombshell into the Commission and the ECB. It is they who are holding E300bn+ of Greek debt. It is the whole of Europe, in other words, that the IMF is conspiring to hit with the shock doctrine.

The Greeks are understandably angry and confused; As Bloomberg reported earlier, “Greece wants to know whether WikiLeaks report regarding IMF anticipating a Greek default at about the time of the U.K. June 23 referendum on its EU membership is the fund’s official position” government spokeswoman Olga Gerovasili says Saturday in e-mailed statement.  For its part, an IMF spokesman in e-mail Saturday said it doesn’t “comment on leaks or supposed reports of internal discussions.”

Source

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

Gold Prices Rise 16% In Q1 – Best Quarter In 30 Years

– Gold prices gained 16% in Q1 – best quarterly performance since 1986
– Gains due to increasing global financial, macroeconomic and monetary risk
– Stocks come under pressure – Flat in U.S.; Falls in Europe and Asia
– Sterling fell 20% on BREXIT concerns and the euro fell 11% against gold
– Canadian dollar fell 10%, Aussie dollar fell 9% & Swiss franc fell 12% against gold
– Outlook positive as gold and silver remain undervalued
– Reasserted role as safe haven in Q1 

 

Year To Date Relative Performance (Finviz)

 

Gold prices gained 16% in the first quarter and had their best quarterly performance since 1986. Gold made gains due to continuing ultra loose monetary policies, diminished U.S. rate-increase expectations, worries about global economic growth, both U.S. and global geopolitical concerns and turmoil in markets.

Most of the gains came in the first six weeks of the year when market turmoil was at its worst and sharp falls were seen in stock markets. For the quarter, the S&P recovered from losses and eked out a 0.9% gain, the DJIA was 1.7 percent higher while the Nasdaq 100 fell 2.7% on concerns of a new tech bubble.

Bloomberg

 

European stocks had a torrid quarter with the EuroStoxx 50 shedding 10.3 percent and the DAX down 9%.  The Nikkei crashed 13.2% in the quarter as the Japanese economy showed little signs of recovery and indeed looks on the verge of a depression.

The dollar logged its worst quarterly performance since 1990 as the Federal Reserve slowed the expected pace of interest rate hikes, citing worries about the potential domestic impact of very weak global growth.

Sterling was the weakest major currency in the world and the British pound weakened 2.5% against the dollar and 20% against gold over the course of the quarter as worries about a possible U.K. exit from the European Union led to traders selling sterling aggressively.

All currencies fell in gold terms even ones that were stronger than the dollar. The yen was the strongest major currency in the world despite the struggling Japanese economy. While it rose 7.1% against the dollar, it was 9% lower versus gold.

Sterling fell 20% and the euro fell 11% against gold. The Canadian dollar fell 10%, the Aussie dollar fell 9% and the Swiss franc fell 12% against gold.

Gold started the year at $1,062, €974 and £716 per ounce and finished the quarter at $1,233, €1,080.69 and £860.20 per ounce.

Geopolitical risk intensified with the risk of terrorism and war ever present and gold continued to act as an important hedge against geopolitical risk and indeed currency devaluations.

Further correction and consolidation remains a possibility given the strong gains in the quarter. However, we expect currencies to continue to fall in value versus gold in 2016 and competitive currency devaluations and currency wars are set to return.

Even after recent gains, gold remains 35% below the nominal high in August 2011 and silver some 70% below its nominal high in April 2011. In inflation adjusted or real terms, prices remain even more undervalued.  This is especially the case given the negative interest rate monetary backdrop and other significant economic and geopolitical risks.

Gold reasserted its role as a hedging instrument and an important safe haven assetin the quarter. Exactly, when investors needed gold to perform, as stocks and currencies lost value in the quarter, gold outperformed. Once again, it enhanced returns and reduced volatility for those with diversified portfolios.

 

Gold Prices (LBMA)
01 April: USD 1,232.10, EUR 1,080.69 and GBP 860.20 per ounce
31 Mar: USD 1,233.60, EUR 1,085.50 and GBP 857.62 per ounce
30 Mar: USD 1,238.20, EUR 1,094.12 and GBP 860.23 per ounce
29 Mar: USD 1,216.45, EUR 1,087.71 and GBP 853.04 per ounce
24 Mar: USD 1,216.45, EUR 1,088.75 and GBP 861.89 per ounce

Silver Prices (LBMA)
01 April: USD 15.38, EUR 13.48 and GBP 10.76 per ounce
31 Mar: USD 15.38, EUR 13.52 and GBP 10.68 per ounce
30 Mar: USD 15.38, EUR 13.58 and GBP 10.68 per ounce
29 Mar: USD 15.06, EUR 13.44 and GBP 10.56 per ounce
24 Mar: USD 15.28, EUR 13.70 and GBP 10.82 per ounce

More Here 

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Submitted by Peter Diekmeyer via Sprott Money

Bill Morneau took centre stage last week in the Canadian Parliament and didn’t disappoint. The new Liberal finance minister’s first budget jacked up program spending across the board, to be paid for by borrowing and, eventually, presumably, money printing. His rhetoric was coated with suggestions that “economic growth” would solve the country’s problems. The only folks left out were taxpayers and savers.

On the face of it, Morneau’s logic makes sense. With interest rates near zero and the Canadian government’s debts among the lowest in the G-7, why not borrow a bit and invest in infrastructure? Well, there are several reasons – and all of them augur well for the future of gold.

Canadian government debt at record levels

Morneau is technically right. The Canadian government’s debt is at low levels compared to that of other advanced economies. However, those numbers are shaky. For one, they include only federal debts, not provincial debts. If you include all Canadian government debts including the provinces (US states are not allowed to run deficits), things look far worse.

Furthermore, Morneau’s numbers don’t include huge debts that the former Conservative Harper Government never bothered to record as liabilities, such as deferred pension and healthcare costs, a policy Prime Minister Trudeau’s Liberal government is continuing. Canada’s Fraser Institute estimates that such unfunded liabilities totalled nearly $4.1 trillion in 2014. Those unrecorded debts alone are equal to more than 200% of Canada’s GDP. Worse, Canadians, whose household debt-to-disposable-income ratios are at record levels, are in no position to finance those additional government obligations.

Sell off gold, spend the cash

During the hours before Mr. Morneau tabled the budget, he wandered into the lock-up room, where reporters were poring over advance copies of the document. There I had a chance to ask him about reports that Canada has sold its last gold reserves, and whether that was prudent, given uncertainties in the world economy and the Bank of International Settlement’s recent warning that global NIRP/ZIRP/QE monetary policies weren’t working as expected.

Morneau didn’t bat an eye. Canada’s reserves were at an appropriate level, he responded. An hour or so later he walked over to Parliament Hill and announced that the new government’s total spending would explode by 6.9% to $317.1 billion during the 2016-2017 fiscal year. The increases would be partly funded by the cash from gold sales and by $30 billion in deficits.

In his youth, Morneau completed graduate studies at the London School of Economics and INSEAD in France, where, as Talleyrand would have said: “He learned nothing and forgot nothing.” The result, as might be expected, was a Canadian budget that was pure Keynes/ Krugman, with a bit of Larry Summers thrown in.

The hard money community, of course, won’t believe a word of it. But Canadians will be praying that Morneau is right.

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

While The Donald may come across as 'shooting from the hip', it appears based on this 1990 interview with Playboy that Trump has been thinking about the decline of America, the weakness and corruption of government, and the impact of foreign (Chinese, Mexican, and Japanese) trade practices on the average joe. As he says, "I don’t want to be President. I’m one hundred percent sure. I’d change my mind only if I saw this country continue to go down the tubes."

This interview ran in the March 1990 issue of Playboy magazine.

Via Playboy.com,

You aren’t known for being shy at promotion; let’s start by playing a little game. Trump Tower is ______?
The finest residential building anywhere.

The Taj Mahal in Atlantic City is going to be ______?
The most spectacular hotel-casino anywhere in the world.

And the Trump Shuttle will be ______?
Easily the number-one service to Washington and Boston.

Your apartment sales are ______?
The best. Trump Tower and Trump Parc have seventy percent of the top sales in New York per square foot.

Why?
Simple: People know they’re going into a building where no expense is spared, where the level of materials and finishes will be the best, where the location will be the best. Many European and Japanese investors literally give their subordinates instructions to buy apartments only in Trump buildings. A Japanese investor just paid me twenty million bucks for seven apartments he’s turning into one.

OK. But here we are at the start of a new decade. How do you respond when people call you ostentatious, ego-ridden and a greedy symbol of the Eighties?
Rich men are less likely to like me, but the working man likes me because he knows I worked hard and didn’t inherit what I’ve built. Hey, I made it myself; I have a right to do what I want with it.

With so much poverty on the city streets, isn’t it embarrassing for you to flaunt your wealth?

There has always been a display of wealth and always will be, until the depression comes, which it always does. And let me tell you, a display is a good thing. It shows people that you can be successful. It can show you a way of life. Dynasty did it on TV. It’s very important that people aspire to be successful. The only way you can do it is if you look at somebody who is.

And for you, sitting snugly inside the one hundred and eighteen rooms of your Palm Beach mansion– People understand that the house in Florida is business. I use it very seldom. I could be happy living in a studio apartment.

Oh, come on.
I mean it; the houses, the planes and the boat are just investments. I paid twenty-nine million dollars for the Khashoggi yacht; two years later, I’ll be selling it for more than one hundred million dollars and getting a bigger one.

Why in the world do you need a bigger yacht?
I don’t. But the Khashoggi boat is worth more only if I sell it. This new one will–believe it or not–be even more spectacular and bring tremendous acclaim to Trump properties in Atlantic City.

What is it that attracts you to all this glitz?
I have glitzy casinos because people expect it; I’m not going to build the lobby of the IBM office building in Trump Castle. Glitz works in Atlantic City, and yet the Plaza Hotel has been brought back to its original elegance of 1907. So I don’t use glitz in all cases. And in my residential buildings, I sometimes use flash, which is a level below glitz.

Then what does all this–the yacht, the bronze tower, the casinos–really mean to you?
Props for the show.

And what is the show?
The show is “Trump” and it is sold-out performances everywhere. I’ve had fun doing it and will continue to have fun, and I think most people enjoy it.

Do you think the ones who hate it are jealous?
They could be whatever–but the vast majority dig it.

Calvin Klein, who doesn’t have a fraction of your wealth, has often said he feels guilty about his. Do you? It’s not overriding, but I do have it.

You don’t sound guilty at all.
I do have a feeling of guilt. I’m living well and like it, I know that many other people don’t live particularly well. I do have a social consciousness. I’m setting up a foundation; I give a lot of money away and I think people respect that. The fact that I built this large company by myself–working people respect that; but the people who are at high levels don’t like it. They’d like it for themselves.

Do you see yourself as greedy?
I don’t think I’m greedy. If I were, I wouldn’t give to charities. I run the Wollman Skating Rink in New York City for nothing and I gave away the royalties from my book. I give millions for charity each year. If I were really greedy….

You mean like Leona Helmsley, the convicted hotel queen?
Yes, like Leona Helmsley. She is a vicious, horrible woman who systematically destroyed the Helmsley name. I know Leona better than anybody does but Harry [Helmsley]. If Harry had one fault, it was giving her too much leeway.

When I was twenty, Harry was the big guy in town. I once drove my car down the street in Manhattan, saw him at a corner, stopped and introduced myself and offered him a ride. When I pulled over on the left side of the street, with traffic on the right, he asked me to get out of the car so he could get out on the left side. I thought to myself, This is a highly conservative guy. He never would have evaded taxes on his own. But Leona pushed and pushed him. He needed that money like you need fifty-six cents in your pockets, I’m telling you.

Also, Leona was not a great business-woman but a very bad one. She sold me the St. Moritz Hotel and a few years later, I made more than a hundred million dollars on it. She ran that hotel badly. She set the women’s movement back fifty years. She is a living nightmare, and to be married to her must be like living in hell.

On the other hand, your wife, Ivana, is doing a great job running the Plaza, right?
Well, I have told Ivana, “Whatever Leona would do, do the opposite. [Laughs] Be nice to everybody.” And she is nice, anyway.

Was it simple greed with Leona?
Much more than greed. She’s out of her mind. Leona Helmsley is a truly evil human being. She treated employees worse than any human being I’ve ever witnessed and I’ve dealt with some of the toughest human beings alive

What do you do to stay in touch with your employees?
I inspect the Trump Tower atrium every morning. Walk into it … it’s perfect; everything shines. I go down and raise hell in a nice way all the time because I want everything to be absolutely immaculate. I’m totally hands-on. I get along great with porters and maids at the Plaza and the Grand Hyatt.

I’ve had bright people ask me why I talk to porters and maids. I can’t even believe that question. Those are the people who make it all work…. If they like me, they will work harder … and I pay well.

You lost some valued employees in a recent helicopter crash.
Yes. I lost not only brilliant, key players in my company but true friends–and I couldn’t believe it. At first, I was shocked, called their wives, just kept functioning…. My own sense of optimism and life was greatly diminished. I never realized how deaths outside the family could have such a profound effect on me.

What did you think when the shock wore off?
[Pauses] It’s a tragic waste. I was also angry in that it was an event that I didn’t want to happen. Here was this press conference, a very mediocre event announcing a minor boxing match. I told these guys that they didn’t need to go, but they wanted to be there…. They gave their lives for something so unimportant. It’s been a rough time. [Pauses]

What do you think of rich people in general?
Rich people are great survivors and, by nature, they fall into two categories–those who have inherited and those who’ve made it. Those who have inherited and chosen not to do anything are generally very timid, afraid of losing what they’ve got, and who can blame them? Others are great risk takers and produce a hell of a lot more or go bust.

As Merv Griffin did? After buying Resorts International from you, the company may be facing bankruptcy. What happened there?
Merv is a good guy who I have really just gotten to know; we were both judges on the Miss America Pageant after our deal. I don’t want to bug him, but prior to buying Resorts, he was telling everybody what a great deal he made and, by inference, what a bad deal Trump made.

But, in fact, you didn’t make such a bad deal.
Well, let’s just say he didn’t out-Trump Trump. He has a huge amount of debt. But he is very efficient and has very good PR people. Business Week wrote a story titled How Donald Taught Merv the Art of the Deal. I was angry. And equally angry when People and Time magazines, with no goddamned research and no knowledge, incompetently reported that Merv had bested Donald. Can you imagine? They didn’t do any research. They just listened to PR people. Well, now they know the truth and have asked about following up or correcting stories. I said, “Forget it–it doesn’t matter.”

What satisfaction, exactly, do you get out of doing a deal?
I love the creative process. I do what I do out of pure enjoyment. Hopefully, nobody does it better. There’s a beauty to making a great deal. It’s my canvas. And I like painting it.

I like the challenge and tell the story of the coal miner’s son. The coal miner gets black-lung disease, his son gets it, then his son . If I had been the son of a coal miner, I would have left the damn mines. But most people don’t have the imagination–or whatever–to leave their mine. They don’t have “it.”

Which is?
“It” is an ability to become an entrepreneur, a great athlete, a great writer. You’re either born with it or you’re not. Ability can be honed, perfected or neglected. The day Jack Nicklaus came into this world, he had more innate ability to play golf than anybody else.

You obviously have a lot of self-confidence. How do you use that in a business deal?
I believe in positive thinking, but I also believe in the power of negative thinking. You should prepare for the worst. If I’m doing a deal, I want to know how bad it’s going to be if everything doesn’t work rather than how good it’s going to be. I have a positive outlook, but I’m unfortunately also quite cynical. So if all the negatives happened, what would my strategy be? Would I want to be in that position? If I don’t, I don’t do the deal. My attitude is to focus on the down side because the up side will always take care of itself. If a deal is going to be great, it’s just a question of, How much am I going to make?

How far are you willing to push adversaries? I will demand anything I can get. When you’re doing business, you take people to the brink of breaking them without having them break, to the maximum point their heads can handle–without breaking them. That’s the sign of a good businessman: Somebody else would take them fifteen steps beyond their breaking point.

What if your pushing results in losing the deal?
Then I pushed him too far. I would have made a mistake. But I don’t. I push to the maximum of what he can stand and I get a better deal than he gets.

Another aspect of your deal making is how you handle the media. You managed to suppress an unflattering TV documentary about you funded by your archnemesis, [New York businessman and publisher] Leonard Stern. Do you also claim victory over him?
Total victory, yes. But I don’t want to dwell on triumph or defeat.

That may sound magnanimous, but, in fact, you’re known to exact revenge on people you think have tried to pull something on you.
I think I’m fair, not tough, in business. But if somebody is trying to do an injustice to me, I fight back harder than anybody I know. When somebody tries to harm you or your family, you have an absolute right to fight back.

Do you hate Stern?
No. Stern is a nonentity to me. He obviously dislikes me enough to spend close to a million dollars trying to make a negative documentary

You have a lot of enemies in New York City, among them a group that opposes your building a huge Trump City on the Hudson that will include the world’s tallest building–on the theory that it will ruin the West Side and cause unbearable congestion. What do you say to them?
Point one: There were more people living on the West Side of New York in the Forties than there are today. Very few people understand that. Point two: Trump City is going to be an architectural masterpiece. Point three: The city desperately needs the taxes, the housing and the shopping that will produce billions of dollars in revenue. Yet that community group [West Pride] fights every job.

Those people fight for the sake of fighting. I honestly believe that if I proposed an eighty-acre park, they would come out and fight me. Selfishly, they like what they have and don’t want to give it to anybody else. We need another Rockefeller Center–especially now that Mitsubishi has bought most of the one we had.

Among other things, West Pride claims the largest building in the world would cast a mammoth shadow across the West Side, blocking out light and wrecking the ambience of the neighborhood.
[Angrily] Every building casts a shadow, for God’s sake! I want this job to be dramatic. I strive for that. I don’t want it to be contextual, blending into everything else. It shouldn’t be like getting a haircut and telling the barber I don’t want anyone to know I’ve gotten one. I am competing here with the state of New Jersey, which is sucking the life-blood out of New York City. They’re beating us up. Trump City would take the play away from the development of the New Jersey waterfront. There will be nothing in New York to compete with Trump City!

So you’re going to build it, come what may?
I’ll build it, though it may not be now. I’ll wait until things get bad in the city, because every city in every nation has its ups and downs. If I had tried to get the zoning for Trump City in 1975, I would have gotten everything I wanted, because the city was absolutely at a low point. I may now wait for construction to stop, for interest rates to go up–then the city will desperately need Trump City.

You often say that the key to your success is being a good deal maker and a good manager. Why?
I’ve seen great deal makers go down the tubes because they haven’t known how to manage what they’ve had. Take [Saudi financier indicted for a felony] Adnan Khashoggi: He was a great deal maker but a bad businessman. Time will tell if Merv is a good manager. He is going to have to be.

When you were growing up in Queens, your father was supposedly a harsh taskmaster. It has been theorized that your father instilled in you a great sense of inadequacy. True?
That’s one hundred percent wrong. I was always very much accepted by my father. He adored Donald Trump and I’ve always known that. But I did want to prove to my father and other people that I had the ability to be successful on my own.

You’ve often said that your father made you work as a teenager and taught you the value of the buck.
My father never made me work. I liked to work during summers. I don’t understand these teenagers who sit home watching television all day. Where’s their appetite for competition? Working was in my genes.

Still, your father was one tough son of a bitch, wasn’t he?
He was a strong, strict father, a no-nonsense kind of guy, but he didn’t hit me. It wasn’t what he’d ever say to us, either. He ruled by demeanor, not the sword. And he never scared or intimidated me.

Your older brother, Fred, who died from heart failure brought on by acute alcoholism, had a more difficult time with him, didn’t he?
Take one environment and it will work completely differently on different children. Our family environment, the competitiveness, was a negative for Fred. It wasn’t easy for him being cast in a very tough environment, and I think it played havoc on him.

I was very close to him and it was very sad when he died … toughest situation I’ve had….

What did you learn from his experience?
[Pauses] Nobody has ever asked me that. But his death affected everything that has come after it…. I think constantly that I never really gave him thanks for it. He was the first Trump boy out there, and I subconsciously watched his moves.

And the lesson?
I saw people really taking advantage of Fred and the lesson I learned was always to keep up my guard one hundred percent, whereas he didn’t. He didn’t feel that there was really reason for that, which is a fatal mistake in life. People are too trusting. I’m a very untrusting guy. I study people all the time, automatically; it’s my way of life, for better or worse.

Why?
I am very skeptical about people; that’s self-preservation at work. I believe that, unfortunately, people are out for themselves. At this point, it’s to many people’s advantage to like me. Would the phone stop ringing, would these people kissing ass disappear if things were not going well?

I enjoy testing friendship…. Everything in life to me is a psychological game, a series of challenges you either meet or don’t. I am always testing people who work for me.

How?
I will send people around to my buyers to test their honesty by offering them trips and other things. I’ve been surprised that some people least likely to accept a trip from a contractor did and some of the most likely did not. You can never tell until you test; the human species is interesting in that way. So to me, friendship can be really tested only in bad times.

I instinctively mistrust many people. It is not a negative in my life but a positive. Playboy wouldn’t be talking to me today if I weren’t a cynic. So I learned that from Fred, and I owe him a lot…. He could have ultimately been a happy guy, but things just went the unhappy way.

How large a role does pure ego play in your deal making and enjoyment of publicity?
Every successful person has a very large ego.

Every successful person? Mother Teresa? Jesus Christ?
Far greater egos than you will ever understand.

And the Pope?
Absolutely. Nothing wrong with ego. People need ego, whole nations need ego. I think our country needs more ego, because it is being ripped off so badly by our so-called allies; i.e., Japan, West Germany, Saudi Arabia, South Korea, etc. They have literally outegotized this country, because they rule the greatest money machine ever assembled and it’s sitting on our backs. Their products are better because they have so much subsidy.

We Americans are laughed at around the world for losing a hundred and fifty billion dollars year after year, for defending wealthy nations for nothing, nations that would be wiped off the face of the earth in about fifteen minutes if it weren’t for us. Our “allies” are making billions screwing us.

How do you feel about Japan’s economic pre-eminence?
Japan gets almost seventy percent of its oil from the Persian Gulf, relies on ships led back home by our destroyers, battleships, helicopters, frog men. Then the Japanese sail home, where they give the oil to fuel their factories so that they can knock the hell out of General Motors, Chrysler and Ford. Their openly screwing us is a disgrace. Why aren’t they paying us? The Japanese cajole us, they bow to us, they tell us how great we are and then they pick our pockets. We’re losing hundreds of billions of dollars a year while they laugh at our stupidity.

The Japanese have their great scientists making cars and VCRs and we have our great scientists making missiles so we can defend Japan. Why aren’t we being reimbursed for our costs? The Japanese double-screw the U.S., a real trick: First they take all our money with their consumer goods, then they put it back in buying all of Manhattan. So either way, we lose.

You’re opposed to Japanese buying real estate in the U.S.?
I have great respect for the Japanese people and list many of them as great friends. But, hey, if you want to open up a business in Japan, good luck. It’s virtually impossible. But the Japanese can buy our buildings, our Wall Street firms, and there’s virtually nothing to stop them. In fact, bidding on a building in New York is an act of futility, because the Japanese will pay more than it’s worth just to screw us. They want to own Manhattan.

Of course, I shouldn’t even be complaining about it, because I’m one of the big beneficiaries of it. If I ever wanted to sell any of my properties, I’d have a field day. But it’s an embarrassment, I give great credit to the Japanese and their leaders, because they have made our leaders look totally second rate.

A group of Japanese visitors to New York was recently asked if there were anything in the U.S. they would like to buy. The answer: towels.
That’s fair trade: They’ll take the towels and we’ll buy their cars. It doesn’t sound like a good deal to me. They have totally outsmarted the American politician; they have no respect for us, because they’re getting a free ride. Of course, it’s not just the Japanese or the Europeans–the Saudis, the Kuwaitis walk all over us.

The Arabs also spend plenty of money in your casinos, don’t they?
They lose a million, two million at the tables and they’re so happy because they had such a great weekend. If you lost a million dollars, you’d be sick for the rest of your life, maybe. They write me letters telling me what a wonderful time they had.

You have taken out full-page ads in several major newspapers that not only concern U.S. foreign trade but call for the death penalty, too. Why?
Because I hate seeing this country go to hell. We’re laughed at by the rest of the world. In order to bring law and order back into our cities, we need the death penalty and authority given back to the police. I got fifteen thousand positive letters on the death-penalty ad. I got ten negative or slightly negative ones.

You believe in an eye for an eye?
When a man or woman cold-bloodedly murders, he or she should pay. It sets an example. Nobody can make the argument that the death penalty isn’t a deterrent. Either it will be brought back swiftly or our society will rot away. It is rotting away.

For a man so concerned about our crumbling cities, some would say you’ve done little for crumbling Atlantic City besides pull fifty million dollars a week out of tourists’ pockets.
Elected officials have that responsibility. I would hate to think that people blame me for the problems of the world. Yet people come to me and say, “Why do you allow homelessness in the cities?” as if I control the situation. I am not somebody seeking office.

What about using your influence in Atlantic City to help the disadvantaged?
Everybody has influence, but it is a Governmental problem. I take out those ads to wake up the Government about how Japan and others are ripping our country apart—

Wait. Doesn’t it seem that with all your influence in Atlantic City you could do more to combat crime and corruption and put something back into the community?
Well, crime and prostitution go up, and Atlantic City administrations are into very deep trouble with the law, and there are lots of problems there, no question about it. But there is a tremendous amount of money going to housing from the profits of the casinos.

As somebody who runs hotels, all I can do, when you get right down to it, is run the best places, bring in as much money as possible, which in turn goes out for taxes. I contribute millions a year to various charities. Finally, by law, I’m not allowed to have Governmental influence; but if they passed legislation that allowed me to get more involved, I’d be very happy to do it. In the meantime, I have the most incredible hotels in the world in Atlantic City. The Taj Mahal will be beyond belief. And if I can awaken the government of Atlantic City, I have performed a great service.

We’ve talked about building low-income housing; what have you done about that in other locations?
I did that during the years I worked with my father; I did build both low-income housing and housing for the elderly. And now I’m going to be building more of it. The problem is, that stuff never gets written about.

On the other hand, you were invited to consider building a luxury hotel in Moscow a few years ago. What was your trip to Moscow like?
It was not long after the Korean plane was shot down over Russia. There I am up in my plane when my pilot announces, “We are now flying over the Soviet Union,” and I’m thinking to myself, What the hell am I doing here?

Then I look out the window and see two Russian fighter planes … I later found out, guiding us in. I had insisted on having two Russian colonels flying with me–I felt safer, and my pilot doesn’t speak great Russian, which is putting it mildly, and I didn’t want problems in radio communications.

Once you got to Moscow, how did the negotiations go?
I told them, “Guys, you have a basic problem. Far as real estate is concerned, it’s impossible to get title to Russian land, since the government owns it all. What kind of financing are you gonna get on a building where the land is owned by the goddamned motherland?”

They said, “No problem, Mr. Trump. We will work out lease arrangements.”

I said, “I want ownership, not leases.”

They came up with a solution: “Mr. Trump, we form a committee with ten people, of which seven are Russian and three are your representatives, and all disputes will be resolved in this manner.”

I thought to myself, Shit, seven to three–are we dealing in the world of the make-believe here or what?

What were your other impressions of the Soviet Union?
I was very unimpressed. Their system is a disaster. What you will see there soon is a revolution; the signs are all there with the demonstrations and picketing. Russia is out of control and the leadership knows it. That’s my problem with Gorbachev. Not a firm enough hand.

You mean firm hand as in China?
When the students poured into Tiananmen Square, the Chinese government almost blew it. Then they were vicious, they were horrible, but they put it down with strength. That shows you the power of strength. Our country is right now perceived as weak … as being spit on by the rest of the world—

Why is Gorbachev not firm enough?
I predict he will be overthrown, because he has shown extraordinary weakness. Suddenly, for the first time ever, there are coal-miner strikes and brush fires everywhere–which will all ultimately lead to a violent revolution. Yet Gorbachev is getting credit for being a wonderful leader–and we should continue giving him credit, because he’s destroying the Soviet Union. But his giving an inch is going to end up costing him and all his friends what they most cherish–their jobs.

Besides the real-estate deal, you’ve met with top-level Soviet officials to negotiate potential business deals with them; how did they strike you?
Generally, these guys are much tougher and smarter than our representatives. We have people in this country just as smart, but unfortunately, they’re not elected officials. We’re still suffering from a loss of respect that goes back to the Carter Administration, when helicopters were crashing into one another in Iran.

That was Carter’s emblem. There he was, being carried off from a race, needing oxygen. I don’t want my President to be carried off a race course. I don’t want my President landing on Austrian soil and falling down the stairs of his airplane. Some of our Presidents have been incredible jerk-offs. We need to be tough.

A favorite word of yours, tough. How do you define it?
Tough is being mentally capable of winning battles against an opponent and doing it with a smile. Tough is winning systematically.

Sometimes you sound like a Presidential candidate stirring up the voters.
I don’t want the Presidency. I’m going to help a lot of people with my foundation–and for me, the grass isn’t always greener.

But if the grass ever did look greener, which political party do you think you’d be more comfortable with?
Well, if I ever ran for office, I’d do better as a Democrat than as a Republican–and that’s not because I’d be more liberal, because I’m conservative. But the working guy would elect me. He likes me. When I walk down the street, those cabbies start yelling out their windows.

Another game: What’s the first thing President Trump would do upon entering the Oval Office?
Many things. A toughness of attitude would prevail. I’d throw a tax on every Mercedes-Benz rolling into this country and on all Japanese products, and we’d have wonderful allies again.

Would you rescue our remaining hostages in Lebanon?
Number one, in almost all cases, the hostages were told by our Government not to be there. If a man decides to become a professor at Beirut University, when he was told not to be there, and that person is captured—

He deserves it?
You feel very bad for him, but you cannot base foreign policy on his capture. With that being said, when they killed our Colonel Higgins, I would have retaliated militarily immediately. I would have hit something vital to them. And hit it hard. In any other case, I would let the takers of hostages know that they’d have one week to return that hostage. And after that week, all bets would be off. You would not have any more hostages taken, believe me. Weakness always causes problems.

Do you think George Bush is soft?
I like George Bush very much and support him and always will. But I disagree with him when he talks of a kinder, gentler America. I think if this country gets any kinder or gentler, it’s literally going to cease to exist. I think if we had people from the business community–the Carl Icahns, the Ross Perots–negotiating some of our foreign policy, we’d have respect around the world.

What would President Trump’s position on crime be?

I see the values of this country in the way crime is tolerated, where people are virtually afraid to say “I want the death penalty.” Well, I want it. Where has this country gone when you’re not supposed to put in a grave the son of a bitch who robbed, beat, murdered and threw a ninety-year-old woman off the building? Where has this country gone?

What would be some of President Trump’s longer-term views of the future?
I think of the future, but I refuse to paint it. Anything can happen. But I often think of nuclear war.

Nuclear war?
I’ve always thought about the issue of nuclear war; it’s a very important element in my thought process. It’s the ultimate, the ultimate catastrophe, the biggest problem this world has, and nobody’s focusing on the nuts and bolts of it. It’s a little like sickness. People don’t believe they’re going to get sick until they do. Nobody wants to talk about it. I believe the greatest of all stupidities is people’s believing it will never happen, because everybody knows how destructive it will be, so nobody uses weapons. What bullshit.

Does any of that fuzzy thinking exist around the Trump office?
On a much lower level, I would never hire anybody who thinks that way, because he has absolutely no common sense. He’s living in a world of make-believe. It’s like thinking the Titantic can’t sink. Too many countries have nuclear weapons; nobody knows where they’re all pointed, what button it takes to launch them.

The bomb Harry Truman dropped on Hiroshima was a toy next to today’s. We have thousands of weapons pointed at us and nobody even knows if they’re going to go in the right direction. They’ve never really been tested. These jerks in charge don’t know how to paint a wall, and we’re relying on them to shoot nuclear missiles to Moscow. What happens if they don’t go there? What happens if our computer systems aren’t working? Nobody knows if this equipment works, and I’ve seen numerous reports lately stating that the probability is they don’t work. It’s a total mess.

And how would President Trump handle it?
He would believe very strongly in extreme military strength. He wouldn’t trust anyone. He wouldn’t trust the Russians; he wouldn’t trust our allies; he’d have a huge military arsenal, perfect it, understand it. Part of the problem is that we’re defending some of the wealthiest countries in the world for nothing…. We’re being laughed at around the world, defending Japan—

Wait. If you believe that the public shares these views, and that you could do the job, why not consider running for President?
I’d do the job as well as or better than anyone else. It’s my hope that George Bush can do a great job.

You categorically don’t want to be President?
I don’t want to be President. I’m one hundred percent sure. I’d change my mind only if I saw this country continue to go down the tubes.

More locally, one of your least favorite political figures was Mayor Ed Koch of New York. You two had a great time going after each other: He called you “piggy, piggy, piggy” and you called him “a moron.” Why do you suppose he lost the election?
He lost his touch for the people. He became arrogant. He not only discarded his friends but was a fool for brutally criticizing them. The corruption was merely a symptom of what had happened to him: He had become extremely nasty, mean-spirited and very vicious, an extremely disloyal human being.

When his friends like Bess Myerson and others were in trouble, he seemed to automatically abandon them, almost before finding out what they’d done wrong. He could think only about his own ass–not the city’s. That was dumb: The only one who didn’t know his administration was crumbling around him was him. Power corrupts.

You probably have more power than Koch did as mayor. And you’re getting more of it all the time. How about power’s corrupting you?
I think power sometimes corrupts–“sometimes” has to be added.

Also on the local scene, there’s a report that you wanted to be an owner of a New York–area baseball team in a proposed new baseball league–despite your bad experience as owner of the New Jersey Generals in the short-lived United States Football League.
That’s not true anymore. It’s not a passion of mine. The sports business is a lousy business. If a player gets hurt or doesn’t perform, he wants to get his money anyway; if he performs better than expected, he wants to renegotiate his contract. I like boxing better.

A clean, forthright sport. As one of Mike Tyson’s promoters, what can you tell us about him?
I know Mike better than anybody and have strong opinions, pro and con. But it’s too early for me to say. I understand his obsessions, everything. And no, I don’t begrudge Don King if he’s able to get Mike Tyson to sign a contract to the benefit of Don King.

You got to know him during his marriage to Robin Givens, didn’t you?
Yeah; I loved it when Robin said she didn’t want any money and then sued him. He won the case against her. She was killed when she started in with the law, when she filed for divorce. Historically, this has been the case with champions. The champ can do no wrong.

How is your marriage?
Just fine. Ivana is a very kind and good woman. I also think she has the instincts and drive of a good manager. She’s focused and she’s a perfectionist.

And as a wife, not a manager?
I never comment on romance…. She’s a great mother, a good woman who does a good job.

How did you feel when José Torres wrote his book, excerpted in Playboy, about Tyson’s sex life–the charges that he beat up women and had wild sexual escapades?
It’s unfortunate for one of the great fighters in history to have all this crap hanging over his head. Or for politicians, for that matter. We’re living in an age when there are no boundaries left, which is unfortunate for our country. The problem is, we’re going to lose good talent because somebody likes looking at pretty women or pretty men.

Somebody’s sex life may mean absolutely nothing to the job at hand, but when the written word gels out, we lose somebody good and the country goes to hell. I know politicians who love women who don’t even want to be known for that–because they might lose the gay vote. OK? If this is the kind of extreme we’re heading toward, we’re really in trouble.

What is marriage to you? Is it monogamous?
I don’t have to answer that. I never speak about my wife–which is one of the advantages of not being a politician. My marriage is and should be a personal thing.

But you do enjoy flirtations?
I think any man enjoys flirtations, and if he said he didn’t, he’d be lying or he’d be a politician trying to get the extra four votes. I think everybody likes knowing he’s well responded to. Especially as you get into certain strata where there is an ego involved and a high level of success, it’s important. People really like the idea that other people respond well to them.

You and your wife are often a subject of very biting satire for magazines such as Spy, which calls you a “short-fingered vulgarian” and recently published a horrendous close-up photograph of your wife on its cover. How do you feel about that?
Ten years ago, bad publicity was much harder for me to take than it is now. It is almost irrelevant.

That’s all you can say about Spy?
It’s a piece of garbage.

We assume you take Forbes magazine more seriously; it claims you’re worth one point five billion dollars. But you say three point seven billion dollars. What’s the right figure?
I don’t say anything. Business Week and Fortune have numbers much higher than Forbes’s. I know many people on the Forbes list who shouldn’t be there. It’s a very inaccurate survey. Malcolm Forbes seems to keep me low. Business Week and Fortune don’t have boats and they couldn’t care less.

Speaking of Malcolm Forbes, why didn’t you accept his invitation to the Morocco bash?
I wish I could have gone, but I couldn’t because of a schedule conflict.

Would you spend three million dollars on a party for yourself?
It was a great investment for Malcolm. He got fifty million dollars’ worth of free publicity. I think he should do it every day of his life. That’s like people who can’t understand why I’m building an even more spectacular boat than the Trump Princess. It’s going to be world class, beyond belief.

Let’s talk about your main interest–buildings. Architecture critic Paul Goldberger of The New York Times hasn’t been kind to Trump buildings, panning them as garish and egotistical.
Paul Goldberger has extraordinarily bad taste. He reviews buildings that are failures and loves them. Paul suffers from one malady that I don’t believe is curable. As an architecture critic, you can’t afford the luxury of having bad taste.

The fact that he works for the Times, unfortunately, makes his taste important. And that’s why you see some monster buildings going up. If Paul left the Times or the Times left him, you would find that his opinion meant nothing.

But it’s not just the architecture critics who criticize you for stamping your name on everything you own. Are you going to continue doing that forever?
No. I own the Grand Hyatt Hotel; I don’t call it the Trump Hotel. I own the Plaza Hotel, not the Trump Plaza. But I will say that from a marketing point of view, putting my name on buildings is a plus. I’m now building Trump Palace and if I called it something else, I would get hundreds of dollars less per square foot. On the Trump Shuttle, I’ve owned it for six months and we are already taking over fifty percent of the market in Washington, Boston and New York. If I called it anything but the Trump Shuttle, it wouldn’t be nearly so successful. The Tour de Trump was actually going to be called the Tour de Jersey. We had four hundred and seventy-three reporters at a news conference for a damn bicycle race; how many would have been there for the Tour de Jersey? We would have gotten nowhere.

You’re involved in so many activities, deals, promotions–in the deep of the night, after the reporters all leave your conferences, are you ever satisfied with what you’ve accomplished?
I’m too superstitious to be satisfied. I don’t dwell on the past. People who do that go right down the tubes. I’m never self-satisfied. Life is what you do while you’re waiting to die. You know, it is all a rather sad situation.

Life? Or death?
Both. We’re here and we live our sixty, seventy or eighty years and we’re gone. You win, you win, and in the end, it doesn’t mean a hell of a lot. But it is something to do–to keep you interested.

Do you agree with the T-shirt that says, WHOEVER HAS THE MOST TOYS WINS?
Depends on your definition of winning. Some of my friends are unbelievably successful and miserable people. I truly believe that someone successful is never really happy, because dissatisfaction is what drives him. I’ve never met a successful person who wasn’t neurotic. It’s not a terrible thing … it’s controlled neuroses.

What do you mean?
Controlled neuroses means having a tremendous energy level, an abundance of discontent that often isn’t visible. It’s also not oversleeping. I don’t sleep more than four hours a night. I have friends who need twelve hours a night and I tell them they’re at a major disadvantage in terms of playing the game.

And when you’re up at night, you’re totally alone?
Yeah, yeah, because it’s a little tough to find anyone up at four in the morning.

You mentioned that you have to be born with “it.” Do you suppose your children inherited “it” from you?
Statistically, my children have a very bad shot. Children of successful people are generally very, very troubled, not successful. They don’t have the right shtick. You never know until they’re tested. But I do well with my children.

Do you think they will have to make it?
I would love them to be in business with me, but ninety-five percent of those children fail in a sophisticated big business. It takes confidence, intelligence, shtick. If any one of these traits is missing, you’re not going to make it.

You’ve always said that you earned, not inherited, your empire, that adversity and uphill struggles made you stronger. What kind of adversity can your children experience?
I’m a strong believer in genes, that my kids can be brought up without adversity and respond well if they have the genes. I have a friend who is extraordinarily smart. But he never became successful, because he couldn’t take pressure. He was buying a home and it was literally killing him–a man of forty with an I.Q. of probably a hundred and ninety. He called me one day for the umpteenth time, worrying about his mortgage and I was sitting in my chair, thinking to myself, Here I am, buying the shuttle, the Plaza Hotel, and I don’t lose an ounce of sleep over any of it. That’s lucky genes.

Even with good genes, how can your kids ever feel they’ve lived up to what you’ve accomplished?
I don’t know that they’ll have to. I would be happier if they were able to preserve rather than build. I’m not looking to have a great deal maker as a son, though I’d certainly like everything to run beautifully when I’m not around. I’d be happier if my son became a great manager rather than a great entrepreneur.

My kids are extremely well adjusted. But I wonder what they think when they walk into Mar-a-Lago and see ceilings that rise to heights that nobody’s ever seen before. And when my daughter’s date picks her up at Trump Tower in a few years and sees the living room, how will he feel when he takes her out and tries to impress her with a studio apartment?

Knowing all this, are you taking any precautions?
It’s somewhat late. And I don’t think a paper route would work. But my son works on the boat.

When you think about role models from history, what figures particularly inspired you?
I could say Winston Churchill, but … I’ve always thought that Louis B. Mayer led the ultimate life, that Flo Ziegfeld led the ultimate life, that men like Darryl Zanuck and Harry Cohn did some creative and beautiful things. The ultimate job for me would have been running MGM in the Thirties and Forties–pre-television.

There was incredible glamour and style in those days that’s gone now. And that’s when you could control situations. In those days, when your great actor was an alcoholic, and nobody ever found out–that was having tremendous control over things, which would be impossible today.

You talk about glamour and style being gone–but isn’t that what you tried to bring back to New York?
Yes, but not in show business, in my business. The Plaza Hotel is far more valuable than any movie I could make. If I put together a string of movies that were all hits, I couldn’t have made anywhere near what I made in real estate. I believe I’ve added show business to the real-estate business, and that’s been a positive for my properties and in my life.

So building that second huge yacht isn’t an act of gaudy excess but another act in the show?
Well, it draws people. It will be the eighth wonder of the world and will create an aura that seems to work. It will cost me two hundred million dollars. But I don’t need it! I could be very happy living in a one-bedroom apartment. I used to live that life. In the early Seventies, I lived in a studio apartment overlooking a water tank.

If you were starting over again, in what business would you choose to make your fortune?
Good question…. There’s something about mother earth that’s awfully good, and mother earth is still real estate. With the right financing, you’ve essentially invested no money. Publishing, movies, broadcasting are tougher, and there aren’t too many Rupert Murdochs, Si Newhouses, Robert Maxwells and Punch Sulzbergers. I’ll stick to real estate.

What about the stock market?
It’s a crap shoot. Real estate is something solid. It’s brick, mortar.

Do you regret your statements to the press after the October 1987 crash, when you seemed to gloat about getting out in time when others were wiped out?
No. I didn’t gloat. Somebody reported that I was out of the market and I confirmed it. I don’t know if that’s talent or luck or instinct. I then went back into the market after the crash. I think the cash market is the great one right now–cash is king, and that’s one of the beauties of the casino business.

You seem very pleasant and charming during interviews, yet you talk constantly about toughness. Do you put on an act for us?
I think everybody has to have some kind of filtering system. I’m very fair and I have had the same people working for me for years. Rarely does anybody leave me. But when somebody tries to sucker-punch me, when they’re after my ass, I push back a hell of a lot harder than I was pushed in the first place. If somebody tries to push me around, he’s going to pay a price. Those people don’t come back for seconds. I don’t like being pushed around or taken advantage of. And that’s one of the problems with our country today. This country is being pushed around by everyone—

About your own toughness….
Well, as I said, I study people and in every negotiation, I weigh how tough I should appear. I can be a killer and a nice guy. You have to be everything. You have to be strong. You have to be sweet. You have to be ruthless. And I don’t think any of it can be learned. Either you have it or you don’t. And that is why most kids can get straight A’s in school but fail in life.

Is there a master plan to your deal making or is it all improvisational?
It’s much more improvisational than people might think.

As you continue to make more deals, as you accumulate more and more, there’s a central question that arises about Donald Trump: How much is enough?
As long as I enjoy what I’m doing without getting bored or tired … the sky’s the limit.

via Zero Hedge http://ift.tt/1PM2nMQ Tyler Durden