Tag: news

By EconMatters

The extra 22 Billion in USD terms is going to find its way to US based Risk Assets via carry trades from European stimulus Measures. 2060 is the next upside target for the S&P 500 Index, we will have pullbacks and retracements along the way, but we should be considerably higher over the next 6 weeks in Risk On Assets like equities. I anticipate ultimately putting in a new high sometime over the next 6 months conservatively in the S&P 500, i.e., think in terms of the 2150 area, with a more aggressive upside target of the nice round number of 2200 in the Election Year.

Don`t focus on Energy company earnings as they are going to be awful, keep in mind money has to be stored somewhere, and now an extra $22 Billion a Month needs to find a home in financial markets.

If you are short the market you need a likely catalyst that is new for your cause, your best case outside an unforeseen Geopolitical or Natural Disaster event would be a spike in wages that leads the Bond Market to bust through 2.40% and 2.65% Yield levels on the 10-Year US Treasury Bond, and ultimately blow through the 3% line in the sand where the Bond Market is susceptible to crash scenarios from a price standpoint.

If we are wrong in this analysis the likely reason is that we are stuck on the latest move in a “Trader`s Market” expecting continuation, and in fact we are one move behind, i.e., the shorts expecting more continuation to the downside at the lows of the year in Risk Assets. The shorts were one move behind, still stuck on the last move, and missed where the markets were going on the next move.

This doesn`t matter as we are Traders and will have forecast models from a theoretical standpoint, but ultimately the markets dictate from a price action standpoint where we should be aligned from a Capital allocation standpoint. However, Investors who are not as fast, flexible and become entrenched in directional bias could wish they sold this rally, if indeed this is the “last move” and we are headed lower into second quarter earning`s season.

 

 

via Zero Hedge http://ift.tt/1nG3UxE EconMatters

Submitted by James Alexander Webb via The Mises Institute,

On March 13 Americans will, in their tolerant nature, acquiesce once again to a government initiated (and hardly popular) loss of one hour, and the setting of clocks out of sync with our planet’s celestial rhythm.

After an earlier (unpopular) 1918 trial of Daylight Saving Time and its later repeal in 1919, it was re-enacted nationwide under Nixon under the “Emergency Daylight Saving Time Energy Conservation Act of 1973.” It’s now a relic of inappropriate interventions of the early seventies that included wage-price controls and the 55 mph speed limit. It represents what we don’t need. Consider some of the reasons for repeal:

Nature: It unbalances what is naturally harmonious. High noon should be when the sun reaches its apex, or as near as this can be, given the use of time zones.

 

Sleep Cycles: The (circadian) sleep cycle need not be disrupted twice a year, even if accomplished by a show of hands. In truth, the legislative process should be called out for its shortsighted habit of running roughshod over established peaceable social order. Here it smacks of social engineering with a disregard for workers, not to speak of an insensitivity to children losing sleep in the adjustment.

 

As reported at telegram.com “The Fatal Accident Reporting System found a 17 percent increase in traffic fatalities on the Monday after the shift.” This article cited findings in a University of Colorado at Boulder study of an increase in fatal motor vehicle accidents the first six days after the clocks spring ahead. This study suggests that the time change may even increase the risk of stroke.

 

Freedom: If those in a workplace agree to change their hours of work they are free to do so. Such “emergency” legislation imposed by the Federal government, on the other hand — however minor they seem — mandate conformity at the expense of basic freedoms.

 

Efficiency: Moreover, with the advent of LED-lights, the old cost-of-lighting argument has faded, especially because the start of the day has already been advanced about one hour as mentioned above. In fact, with more air-conditioning, the bias is for increased use of electric power under the time-shift, as people come home earlier in the hot season and turn up their air-conditioning.

 

Inconvenience: One has the annoyance of twice a year resetting clocks. This may take only 10 minutes, but over a 60-year span it’s 20 hours.

 

We all know what it feels like to arrive at work on time to find that everyone else had dutifully changed their clocks, so that we turn out to be one hour late.

 

There are real-world effects on major industries as well. Train and transport schedules cannot be easily adjusted. Amtrak, for instance, idles trains (and passengers) for one hour to keep on schedule in the fall and then tries to make up an hour in the spring by hurrying. More hourly work schedules need adjustment now that more businesses are open 24-7.

 

Affrontery: Perhaps worst of all is the fact is that there is no gain whatsoever in the number of minutes of sunlight in a day. It is hence presumptuous to maintain that the culture and habits of the people, as expressed by their arrangements and choices, were in error before the change. The benefit of the doubt should logically rest with conventional time.

 

Principle: Resetting clocks and watches not once but twice a year, is less a compromise of effort than of principle. It contributes to the habituation of interference by the state. We already prostrate ourselves filling out 1040 forms that tax the sale of our labor, including a required signature in disregard of the Fifth Amendment protection against self-incrimination. If we ever want to undo such an affront to freedom, annoying impositions such as time-shifting are a good place to start.

 

Sunset Old Laws: Thomas Jefferson suggested an automatic sunset provision for legislation: “… every law, naturally expires at the end of nineteen years.” In an April 2016 Reason article by Veronique de Rugy: “What Government Can Learn from Moore’s Law,” is suggested a sunset provision (that could be retroactive) in all Federal statutes and regulations to require an updated renewal within two years. Even better, might be a required supermajority for renewal. In Jefferson’s day, by the way, clocks were known as “regulators,” but such regulation stemmed not from legislation, but from social convention that produced efficient governing without the state.

As with a plethora of interventions some may be minor inconveniences, but like time-shifting, they share in a disrespect for the principle of simply leaving people alone. Mandated time shifting affects everyone while standard time imposes on no one.

via Zero Hedge http://ift.tt/1U95xSs Tyler Durden

"The problem that many people have is that they think that 2008 was ‘the event’ and that it cleared the brush and we’re back to a sustainable path," but, as TTMYGH's Grant Williams explains to MacroVoices' Erik Townsend, "nothing could be further from the truth."

 What is more troublesome is that, as Williams exclaims, "the glue that binds all of this together, unfortunately for everybody, is faith in central bankers," and 'Laws of Nature' dictate that "this will end very badly, but end it will."

And most worryingly, for everyone, "wars are, unfortunately, a very convenient solution to a lot of the problems that governments face."

Erik and Grant's conversation is must-view as they discuss:

• The likelihood of a US recession
• The unsustainability of global credit growth
• The continuing erosion of faith in central bankers
• The response to negative interest rates in Japan
• The excesses promised by politicians to citizens of Western Democracies
• "The Consequences of Economic Peace"
• Big Cyles, Kondratieff Waves, The Laws of Nature
• The similarity between current times and the lead up to WWI
• Thinking about outcomes we'd rather not and assigning probabilities accordingly

Full discussion below (via MacroVoices.com):

 

Highlights include:

19:30 – “The problem that many people have is that they think that 2008 was ‘the event’ and that it cleared the brush and we’re back to a sustainable path, but nothing could be further from the truth.”
 
20:05 – “The glue that binds all of this together, unfortunately for everybody, is faith in central bankers.”
 
20:30 – “I think when you look at it and you look at the chances of these guys being able to fix this, they are very slim indeed.”
 
20:50 – “To have something as ephemeral as confidence in a group of academics holding the world financial system up is a terrifying prospect to me, because we don’t when when it will evaporate, or what might trigger it, but it could be tomorrow, it could be in three years…”
 
23:55 – “The Laws of Nature dictate that this will end very badly, but end it will. In the meantime you extend and pretend.”
 
26:45 – “At these points in time there is always a conflict somewhere between two global powers, and we’re seeing the embers of that.”
 
28:20 – “You cannot rule out the possibility of war… Sometimes the probability may be at fractions of a percent, but I think it’s more than that right now and it’s something people need to be very much aware of. And the more the economic pressure ratchets up on these governments…the more there is a need for a solution, and wars are, unfortunately, a very convenient solution to a lot of the problems that governments face.”
 
29:00 – “As the pressure increases, that level of probability (of war) increases significantly, and the possibility for a miscalculation ratchets up every single day.”

Finally, here is TTMYGH.com's Grant Williams' latest (and scariest) presentation – "Duck Test" – if it looks like a 'duck', quacks like a 'duck', and smells like a 'duck', it must be a… recession…

Grant Williams Duck Test

via Zero Hedge http://ift.tt/1P67k2Y Tyler Durden

Negative interest rates may or may not be a thing of the past (many thought that the ECB had learned its lesson, and then Vitor Constancio wrote a blog post showing that the ECB hasn't learned a damn thing), but the confusion about their significance remains. Here is Deutsche Bank's Dominic Konstam explaining how, among many other things including why Europe will need to "tax" cash before this final Keynesian experiment is finally over, negative rates are merely the logical failure of globalization.

Misconceptions about negative rates

Understanding how negative rates may or may not help economic growth is much more complex than most central bankers and investors probably appreciate. Ultimately the confusion resides around differences in view on the theory of money. In a classical world, money supply multiplied by a constant velocity of circulation equates to nominal growth. In a Keynesian world, velocity is not necessarily constant – specifically for Keynes, there is a money demand function (liquidity preference) and therefore a theory of interest that allows for a liquidity trap whereby increasing money supply does not lead to higher nominal growth as the increase in money is hoarded. The interest rate (or inverse of the price of bonds) becomes sticky because at low rates, for infinitesimal expectations of any further rise in bond prices and a further fall in interest rates, demand for money tends to infinity. In Gesell’s world money supply itself becomes inversely correlated with velocity of circulation due to money characteristics being superior to goods (or commodities). There are costs to storage that money does not have and so interest on money capital sets a bar to interest on real capital that produces goods. This is similar to Keynes’ concept of the marginal efficiency of capital schedule being separate from the interest rate. For Gesell the product of money and velocity is effective demand (nominal growth) but because of money capital’s superiority to real capital, if money supply expands it comes at the expense of velocity. The new money supply is hoarded because as interest rates fall, expected returns on capital also fall through oversupply – for economic agents goods remain unattractive to money. The demand for money thus rises as velocity slows. This is simply a deflation spiral, consumers delaying purchases of goods, hoarding money, expecting further falls in goods prices before they are willing to part with their money.

For an economy that suffers from deficient demand, lowering interest rates doesn’t work if it simply lowers expected returns on real capital through oversupply. The shale boom in the US is blamed on cheap money. As Gesell also argued, where Marx was wrong but Proudhon was right, is that to destroy capitalism you don’t need workers to strike and close the capitalists’ factories; instead the workers should organize and build another factory next to the capitalists. The means of the production are nothing more than capitalized labor. Oversupply destroys capitalism in a natural way. In this way the demise of positive interest rates may be nothing more than the global economy reacting to a chronic oversupply of goods through the impact of globalization including the opening up of formerly closed economies as well as ongoing technological progress.

Of course raising rates isn’t a solution. If effective demand is deficient due to money hoarding of new money supply and a decline in velocity when goods supply is expanding, in a rising rate environment, demand is deficient with money supply itself falling regardless of any change in velocity. Interest on real capital may rise, even with goods prices stable eventually recovering but at the cost of huge unemployment and social distress. The difference can be thought of as the aggregate demand curve shifting inwards relative to supply and supply still exceeding demand when monetary conditions are too tight versus a falling interest environment whereby the aggregate supply curve moves out relative to demand such that the curves don’t intersect at prices above zero – the latter reflecting an implied rising real money interest rate.

In a Keynesian world of deficient demand, the burden is on fiscal policy to restore demand. Monetary policy simply won’t work if there is a liquidity trap and demand for cash is infinite. Interest rates cannot be reduced any further to stimulate demand. (In Gesell’s terminology the product of velocity and money supply i.e. effective demand keeps falling). In Gesell’s world money itself needs to be taxed to prevent hoarding and to equalize the worth of money to goods. If cash is taxed (and he suggested at the annual tax rate might be 5.2 percent, according to Keynes) then velocity is stabilized, demand for money falls and goods demand recovers. The tendency to oversupply however in an economy unfettered by “privilege” effectively implies that interest rates in equilibrium may converge to zero. Taxing of money specifically is to deal with an ex ante effective demand deficiency.

Europe’s long time obsession with negative rates, to quote our present day Fischer, is fair but misleading in the context of how negative interest rates are being applied. The combination of penalty rates on banks’ excess reserves and QE is designed at one level to expand private sector credit. This if anything will promote supply of goods. If supply creates its own demand and/or if Keynesian investment accelerator models are valid, then they may well be successful in restoring a Keynesian deficient demand problem.

This is essentially the same as saying there is no liquidity trap. (If we think of the inverse bond price on the vertical axis as being a private sector asset price, then a large price rise can be achieved for a relatively small amount of money expansion). But it presupposes that there is deficient loan demand due to high money capital interest rates rather than due to too low real capital expected returns. The risk is that QE itself is simply new money being hoarded on the demand side so that money velocity falls and effective demand remains weak. Falling interest rates may well promote new loan demand and increase supply but only in a deflationary spiral of further falls in expected capital returns and the perceived need for still lower money interest rates. If Gesell is correct, it is essential to tax money itself which means not just retail deposits but cash in circulation. Then velocity would stabilize with effective demand as households would be willing to own goods rather than money. It is conceivable that the Europeans are heading in this direction and maybe it will be worse before it gets better. Or maybe there is still time for the Keynesian mechanism to prove that we are not in a liquidity trap.

* * *

Here is our far simpler explanation of what Konstam just said, and why DB would much prefer more QE over NIRP: QE takes away the liquidity preference choice out of the hands of the consumers, and puts it into the hands of central bankers, who through asset purchases push up asset prices even if it does so by explicitly devaluing the currency of price measurement; it also means that the failure of NIRP is – by definition – a failure of central banking, and if and when the central bank backstop of any (make that all) asset class – i.e., Q.E., is pulled away, that asset (make that all) will crash. The only asset that does not have a central bank backstop (in fact, central banks are actively pushing it lower)? Gold.

via Zero Hedge http://ift.tt/21oJE0C Tyler Durden

Submitted by Mike Krieger via Liberty Blitzkrieg blog,

Earlier today we came across a fantastic article published at Naked Capitalism by a writer known as Gaius Publius.

Yves Smith introduces the piece with the following poignant passage:

Let us not forget that the “things are going to get worse for you” story also conveniently diverts attention from the degree of rent extraction and looting that is taking place. US corporate profit share of GDP has been at record levels, depending on how you compute if, of 10% of 12% of GDP, when no less than Warren Buffett deemed a profit share of over 6% of GDP as unsustainably high as of the early 2000s. That higher profit share is the direct result of workers getting a far lower share of GDP growth than in any post-war expansion. So the increased hardships that ordinary people face is not inevitable, but is to a significant degree due to the ruling classes taking vastly more than their historical share out of greed and short-sightedness.

Now here are some excerpts from the Gaius Publicis piece:

If you think of the country as in decline, as most people do, and you think the cause is the predatory behavior of the big-money elites, as most people do, then you must know you have only two choices — acceptance and resistance.

 

Why do neo-liberal Democrats, like the Clinton campaign, not want you to have big ideas, like single-payer health care? Because having big ideas is resistance to the bipartisan consensus that runs the country, and they want to stave off that resistance.

 

But that’s a negative goal, and there’s more. They not only have to stave off your resistance. They have to manage your acceptance of their managed decline in the nation’s wealth and good fortune.

 

Again: The goal of the neo-liberal consensus is to manage the decline, and manage your acceptance of it.

Corey Robin says when Clinton tells the truth, believe her:

 

“Amid all the accusations that Hillary Clinton is not an honest or authentic politician, that she’s an endless shape-shifter who says whatever works to get her to the next primary, it’s important not to lose sight of the one truth she’s been telling, and will continue to tell, the voters: things will not get better. Ever. At first, I thought this was just an electoral ploy against Sanders: don’t listen to the guy promising the moon. No such thing as a free lunch and all that. But it goes deeper. The American ruling class has been trying to figure out for years, if not decades, how to manage decline, how to get Americans to get used to diminished expectations, how to adapt to the notion that life for the next generation will be worse than for the previous generation, and now, how to accept (as Alex Gourevitch reminded me tonight) low to zero growth rates as the new economic normal. Clinton’s campaign message isn’t just for Bernie voters; it’s for everyone. Expect little, deserve less, ask for nothing. When the leading candidate of the more left of the two parties is saying that – and getting the majority of its voters to embrace that message – the work of the American ruling class is done.”

 

In Germany after WWI, austerity imposed by outsiders created the conditions for fascism to grow. We knew this. We were even taught this in school. And we certainly know just how good that is for women and minorities.

 

But in America (and Britain), that austerity is being imposed by our own leaders, and most effectively by leaders of the Democratic Party (and Labour Party) — the supposed “left” party, the party that was understood to support working people.

 

Clinton, like all of the DLC, talks like this “new economy” of decline is something that just happened, like it’s a natural force. They do not admit that it was a political decision to break the power of ordinary working people and put it back into the hands of the aristocracy. They pat us on the head and tell us they will try not to make it as bad as the Republicans will, but it will happen and there is nothing to be done about it.

 

And they actively divide us by making personal and tribal differences into the main show of the public political arena (only 7% of Americans claim never to have used birth control, so how is it a “Democrat” thing?) while behaving like the really big decisions that are wrecking our lives are none of our business. (Bank bailouts that were opposed 200-1 in calls to the White House from the public! Stopping the prosecutions of fraudulent banksters! HAMP instead of real home-owner relief! Secret TPP talks, for godssakes!)

 

As a woman and person of funny-color, I know who is being callous and insensitive toward me, and it isn’t Bernie Sanders.

Perfectly put.

Indeed, the American public has two clear choices: Fight back, or accept serfdom.

What’s it gonna be?

via Zero Hedge http://ift.tt/1Re86lV Tyler Durden

For the past month, the price of oil has soared by a 50% on no fundamental catalyst; in fact, the “fundamental” situation has gotten progressively worse with the record oil inventory glut increasing by the day even as US crude oil production posted a modest rebound in the past week after two months of declines, while the much touted OPEC/non-OPEC oil production freeze has yet to be discussed, let alone implemented.

With or without a valid catalyst, however, the short squeeze price action has drastically changed not only investor psychology, but that of the IEA as well, which on Friday announced that oil may have bottomed (if the agency’s predictive track record is any indication, oil is about to crash).

But while traders, algos and CNBC guest “commodity experts” may be certain that oil will never drop to $27 again, someone else is not at all convinced that oil prices will not drop again: oil producers themselves.

We first noted this earlier this week,since January, the spread between Brent for delivery on the 2020 end of the curve and crude for prompt supply has dropped by nearly $8 to around $10.71 a barrel. “Brent’s flattening contango since January comes as many producers want to cash in immediately on recent price rises. They’ve been heavily selling 2017/2018 and beyond, and it shows that they don’t quite trust the higher spot prices yet,” said one crude futures trader.

 

“This means that even the producers don’t really expect a strong price rally until well into 2017 or later,” he said. The companies that explore for oil and pump it out of the ground have been locking in price gains by selling off future output as a financial hedge, pulling down prices for those contracts, said sources with some of the producers and traders who had been counterparty to deals.

And now, courtesy of Credit Suisse James Wicklund’s wonderful “Things We’ve Learned This Week” summary of key events in the oil space in the last 7 days, is an explanation of just this:

Locking It In. Since January, the spread between spot Brent prices and 2020 Brent prices has dropped nearly $8.00 to $10.71 per barrel, indicating selling in 2017, 2018, and 2019 futures contracts. According to Reuters, the majority of selling has come from E&Ps looking to lock in prices to hedge against a repeat of last year’s second half commodity price route. At the same time, the hedges indicate a lack of confidence that the current commodity rally will continue.

However, as long as the momentum-cashing algos are bidding oil up, the majors will be delighted to hedge at ever higher prices; which incidentally means that Saudi Arabia’s plan to put as many marginal producers out of business in the fastest possible time, has just been delayed by another 9-12 months. Whether this means that Saudi plans for a production “freeze” have also just been swept away, remains to be seen as soon as that so overhyped OPEC meeting takes place, if ever.

* * *

As a bonus, here are several of Wicklund’s other key event highlights from the past week:

• Near Record. Despite significantly reduced activity in North America, 2015 was the second-largest year in terms of total proppant volumes supplied as frac sand, ceramic proppant, and resin-coated proppant producers supplied 55mm tons to the oil and gas industry. Frac sand accounted for over 92% of the 2015 market, whereas ceramic proppant and resin-coated proppant volumes fell to their lowest levels since 2010. The resilience of proppant volumes was the result of increased proppant intensity per well. Unfortunately for proppant producers, prices fell off a cliff in 2015 due to excess market supply.
• Talking Politics. During Sunday’s Democratic Presidential debate, fracking was a hot topic between Sen. Bernie Sanders and Sec. Hillary Clinton. Clinton has, in general, historically supported fracking. Clinton changed her stance noting, “[b]y the time we get through all of my conditions, I do not think there will be many places in America where fracking will continue to take place.” Sanders took a more adamant stance, calling for an all-out ban against fracking on federal lands.
• North Sea Production Holding Firm. North Sea crude supply is expected to average 2.22mm boe/d during April, up from March’s 2.17 mm boe/d and its highest level in four years. If April’s estimate is met, crude oil supply out of the North Sea will have exceeded 2 mm boe/d for 8 consecutive months.
• Flood Gates Opening? In late 2015, the National Iranian Oil Company (NIOC) unveiled 49 development projects to be offered to local and foreign investors under the new Iran Petroleum Contract (IPC). The 29 oil and 20 gas projects offer a wide array of development opportunities, ranging from brownfield projects on mature onshore and offshore fields, recently developed fields, to very large greenfield projects. Government officials project that the removal of sanctions on Iran may trigger at least $50B a year in foreign investment to finance a rebound in an economy hit by the oil slump.
• Infusion. We have been paying close attention to E&P equity raises over the past few weeks, looking specifically at the size and proceeds of the deals. So far in 2016, NAM E&Ps have raised $9.3B in equity, down from $16.0B for full-year 2015. Proceeds are similar to 2015 as E&Ps proceeds are going to pay down debt and, in some cases, fund capex.

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

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

Feeding Like Leeches

The poor Republicans! A Washington Post story wonders if the party could “break in two.” Party stalwarts are threatening to desert to Hillary. And a Texas newspaper worries that the GOP could be “on the verge of extinction.”

 

Aaaaaaand… it’s gone!

 

Not much to report from Wall Street lately. The Dow is still teetering on the 17,000 level… like a school bus on the edge of a bridge. Several readers wrote in to complain about our fact-ish item: that $176,000 was the cost of “salaries” for the typical third-grade classroom.

The figure came from Conspiracies of the Ruling Class, a new book by Lawrence Lindsey, the director the National Economic Council during the G.W. Bush administration. The title was so provocative, we picked it up.

The idea of a “conspiracy” at the top of U.S. politics… and a “ruling class” in what is supposed to be a republic… suggested that the author, a Republican insider, had lost his party membership… or his mind. We opened it eagerly… hoping it was the former, not the latter.

Perhaps Lindsey – anticipating the neocons who are abandoning the GOP banner for the Deep State favorite, Hillary Clinton – had stolen a march on them… and gone over to the Democrats. Lindsey’s point, insofar as the education numbers are concerned, was that the typical third-grade teacher doesn’t get a salary of $176,000. Nowhere close.

Instead, the money goes into salaries for administrators, “educators,” and all the assorted zombies now feeding like leeches on the public school system.

 

Lawrence Lindsey, former director of the National Economic Council, comes rolling by.

 

Rigged and Rotten

You could look at the entire system in the same way. You’d find zombies hiding in every corner and crevice – from the National Labor Relations Board… to the Federal Bureau of Prisons… to Pentagon procurement… to the Food and Drug Administration… to the Securities and Exchange Commission.

The whole shebang is rigged and rotten – including the financial system. The typical voter doesn’t understand why or how. Who does? But he feels it. Something is wrong; he knows it. And more and more, he wants to say so.

So far, the most effective voices for this discontent are Donald Trump and Bernie Sanders – neither of whom has much truck with the GOP’s traditional principles.  Consider a report yesterday in Investor’s Business Daily.

“Small Businesses Are Hitting the Brakes on Wages and Benefits,” reads the headline. The article that follows gives the results of a poll of small business owners. Generally, they are not feeling their oats. Instead, they are putting a “chill” on hiring and capital expansion projects.

 

The NFIB small business optimism index is once again rolling over after having barely recovered from the demise of the housing bubble. Few charts illustrate better how the centrally planned fiat money-based cronyism of modern regulatory “democracy” is becoming an unbearable burden on what little is left of free market capitalism. Its assorted rackets are siphoning more and more real wealth away from genuine wealth creators into the pockets of cronies and zombies – click to enlarge.

 

This attitude is now being blamed for the surprisingly weak wage data that came out earlier this week. More people are working – according to the official reports – but doing less overtime and earning less money.   The survey also revealed the following detail:

“Another factor for weaker wages: In addition to weaker sales, a net 4% reported lower selling prices, the worst in more than five years.”

Lower prices leave businesses with lower margins. And less desire to hire. This is part of the dreary picture that faces young people today… and it’s why they, too, may be turning against the GOP and its “establishment” candidates.

 

Generation Stagnation

From Red Alert Politics, an online publication for conservatives, comes the following report:

“A 30-year-old millennial earns roughly the same as what a 30-year-old earned 30 years ago, according to a new study from the Center for American Progress. The wage stagnation is demoralizing when the differences are vast. Millennials today “are 50% more likely to have finished college and that they work in an economy that is 70% more productive,” but a weak recovery and a shift in the labor market has kept starting salaries low, the report notes. The median compensation for 30-year-old workers in 1984 was $18.99 per hour. By 2004, it had moved up to $20.63 hourly, but declined to $19.32 hourly by 2014.”

 

Stagnation nation: median real household incomes by age bracket. People in 15-35 year age group have made zero progress in almost half a century – click to enlarge.

 

The Atlantic added further detail:

“In retail, wholesale, leisure, and hospitality – which together employ more than one quarter of this age group [between 25 and 34] – real wages have fallen more than 10% since 2007. To be clear, this doesn’t mean that most of this cohort are seeing their pay slashed, year after year. Instead it suggests that wage growth is failing to keep up with inflation, and that, as twenty-somethings pass into their thirties, they are earning less than their older peers did before the recession.”

Count on a progressive think tank like the Center for American Progress to provide claptrap “solutions” – including increasing “private sector unionism.” Bernie’s got answers, too – raising taxes on the rich and providing free education and free health care.

But the poor GOP – and its leading man, Trump – has no answers at all, not even crackpot ones. Mr. Trump is a deal maker. A negotiator par excellence. But who are you going to negotiate with to get the economy moving in the right direction?

We saw him on TV last night. The more we see him, the more we like him… and the surer we are that Americans are doomed. “The world is ripping us off,” he said; who “the world” is and how it rips us off is unclear.

 

Successful nightmare dispensers

 

Part of the Problem

Old-school Republicans would have had answers. But you’d have to go back a long time to find them.

“Try some real money for a change,” they would have said. “And, oh yes, balance the budget, too.”

But today’s Republicans are usually part of the problem, not the solution. They have been bought by the Deep State. Now, they offer much the same nonsense as the Democrats: tax, spend, borrow, regulate, bomb, imprison. In that regard, the last Bush administration was probably the worst in modern U.S. history.

The GOP is in disarray. It doesn’t believe its own core ideas. Neither does its standard bearer, Trump, or the voters.   When we picked up Lindsey’s book, we hoped he might put some light on the subject. Or at least a kick in the derriere to the Republican leadership.

“They lost the plot,” he might have said. “They set up the Deep State to take over. No wonder their candidates aren’t winning!” Instead, he loses the plot himself. It’s all the fault of the liberals, Obama, the Clintons… and even Franklin Roosevelt, he suggests. In such a target-rich environment, it is a shame to waste the ammunition on the dead.

 

Here is an “old school” Republican – a species that has all but died out: Senator Robert A. Taft of Ohio, here depicted in 1952 during his bid for the nomination. He was the ideological opposite of today’s neo-”conservatives”. In favor of a sane foreign and domestic policy, often denounced as an “isolationist” because he didn’t want the country to wage costly and unnecessary wars of aggression.

via Zero Hedge http://ift.tt/1RGz8N3 Tyler Durden

Courtesy of Point2Homes

When the average home price in San Francisco went over the $1 million threshold in the first half of 2015, it was pretty obvious for most people that the Bay city secured the top position as the most expensive housing market in the U.S. This is exactly what happened. According to records released at the end of last year, San Francisco is the superstar housing market not only in the U.S., but for the entire North America as well.

But what may really surprise some people when looking at the top 15 list of the most expensive housing markets in North America is seeing Vancouver — the third most expensive city in the world — down in the 6th position, behind a less expected entry … Brooklyn, N.Y.! The reason for this is the same one which pushed Toronto out of the top 10 list and to #11: a weaker Canadian dollar. And guess who comes right after Toronto? Well, it’s Queens, N.Y.

 

#1. San Francisco, CA

Median home sale price (Dec. 2015): $1,085,000 USD

With sky-high home prices becoming the norm in San Francisco, many are wondering how long people are going to be able to afford buying a home here, especially since the condo market is not significantly cheaper than the detached-home segment.

 

#2. Manhattan, NY

Median home sale price (Dec. 2015): $1,059,000 USD

According to real estate data powerhouse PropertyShark, at the end of 2015, the median home sale price in Manhattan went over $1 million for the first time. And if you take into account that in 3 Manhattan neighborhoods prices jumped over $3 million as well, then this news is expected.

 

#3. San Jose, CA

Median home sale price (Dec. 2015): $700,000 USD

The state of California has another strong representative in list of the top most expensive housing markets in North America. And not just on this continent. With $700,000 the median home sale price, San Jose also ranks very high on the list of most unaffordable cities in the world, according to Demographia’s housing index.

 

#4. Brooklyn, NY

Median home sale price (Dec. 2015): $620,000 USD

Said to be following in Manhattan’s footsteps, Brooklyn has seen home prices break all previous records in 2015. It’s a surprising entry into our list and its high median price reflects a peaking luxury market which has attracted a growing number of foreign investors.

 

#5. Los Angeles, CA

Median home sale price (Dec. 2015): $565,000 USD

In the second and third quarters of 2015, Los Angeles saw home prices soar to levels last seen before the onset of the financial crisis. The fourth quarter, however, remained flat, leaving real estate experts looking ahead to the warm months for sales to pick up again.

On the other hand, rentals in Los Angeles haven’t slowed down. They continue to climb all over town.

 

#6. Vancouver, B.C. (Canada)

Median home sale price (Dec. 2015): $549,783 USD / $760,900 CAD

The main culprit of Vancouver’s low position in our list is the Canadian dollar. The fact that it lost strength against the US dollar made the Canadian real estate properties a much more affordable asset for American home buyers. Now an average home in Vancouver (including condos) will cost Americans just a little over $500,000 USD, which is half of what they pay now for a home in San Francisco. However, the benchmark for a single-family home was, at the end of 2015, at record-levels — $1,226,300 CAD, which still means a jaw-breaking $911,240 USD.

 

#7. Seattle, WA

Median home sale price (Dec. 2015): $538,500

The tech boom Seattle has been seeing in the last years has taken its toll on home prices, which have been following a rising trend. Although the year-over-year growth is somewhere around 13%, real estate professionals expect the city to be the next Silicon Valley or New York in the next 5 years.

 

#8. Washington, D.C.

Median home sale price (Dec. 2015): $510,838 USD

Home prices grew exponentially in Washington D.C. especially between 2012 and 2014, when other cities were registering decreases. Although the pressure has eased a bit in certain markets, central neighborhoods continue to see prices sky-rocket.

 

#9. San Diego, CA

Median home sale price (Dec. 2015): $510,000 USD

Almost tieing with Washington D.C., San Diego is still more affordable than other counties in California, most notably Orange County and LA County. Home prices have been rising in the past years, leaving some experts wondering if the city hasn’t reached a bubble.

 

#10. Boston, MA

Median home sale price (Dec. 2015): $451,250 USD

Boston had several things to show off for 2015:  4 of its neighborhoods were included on the list of the hottest neighborhoods in the nation, plus the number of sales and the median home price continued to register increases compared to 2014.

 

#11. Toronto, ON (Canada)

Median home sale price (Dec. 2015): $443,064 USD/ $613,200 CAD

Despite its low position in our list this year, the Toronto housing market is still the second hottest in Canada, after Vancouver, and one of the most active markets in the world. The recent boom in condo development placed Toronto ahead of any other city in the world in terms of numbers of new recorded building permits.

via Zero Hedge http://ift.tt/1QUB98O Tyler Durden

Submitted by Mike Krieger via Liberty Blitzkrieg blog,

In time of actual war, great discretionary powers are constantly given to the Executive Magistrate. Constant apprehension of War, has the same tendency to render the head too large for the body. A standing military force, with an overgrown Executive will not long be safe companions to liberty. The means of defence against foreign danger, have been always the instruments of tyranny at home. Among the Romans it was a standing maxim to excite a war, whenever a revolt was apprehended. Throughout all Europe, the armies kept up under the pretext of defending, have enslaved the people.

 

– James Madison, Founding Father and 4th President of these United States

Our founding fathers studied power structures over the millennia and knew exactly what they were doing when solidifying the Bill of Rights into the U.S. Constitution. All it took was a couple hundred years, an extraordinarily ignorant and apathetic American public, and a major terror attack to roll back this multi-generational gift.

For many years, I and countless others have been screaming from the rooftops that a society should never trade civil liberties for security. Life on earth has always been dangerous for us humans, and what has historically separated free and noble civilizations from stunted tyrannies is a willingness to acknowledge such a precarious existence while at the same time demanding and defending one’s dignity and liberty. In the aftermath of the attacks of 9/11 (seemingly carried out by U.S. ally Saudi Arabia), the American public has demonstrated no such strength of character or historical maturity, thus allowing a corrupt, deceptive and lawless government to run roughshod over freedom with very little resistance.

Well now the chickens are coming home to roost. The tyrannical powers granted to government in order to stop foreign terrorists are rapidly being turned inward against an ever servile and apathetic American public.

As Radley Balko at the Washington Post notes:

A while back, we noted a report showing that the “sneak-and-peek” provision of the Patriot Act that was alleged to be used only in national security and terrorism investigations has overwhelmingly been used in narcotics cases. Now the New York Times reports that National Security Agency data will be shared with other intelligence agencies like the FBI without first applying any screens for privacy. The ACLU of Massachusetts blog Privacy SOS explains why this is important:

 

What does this rule change mean for you? In short, domestic law enforcement officials now have access to huge troves of American communications, obtained without warrants, that they can use to put people in cages. FBI agents don’t need to have any “national security” related reason to plug your name, email address, phone number, or other “selector” into the NSA’s gargantuan data trove. They can simply poke around in your private information in the course of totally routine investigations. And if they find something that suggests, say, involvement in illegal drug activity, they can send that information to local or state police. That means information the NSA collects for purposes of so-called “national security” will be used by police to lock up ordinary Americans for routine crimes. And we don’t have to guess who’s going to suffer this unconstitutional indignity the most brutally. It’ll be Black, Brown, poor, immigrant, Muslim, and dissident Americans: the same people who are always targeted by law enforcement for extra “special” attention.

 

This basically formalizes what was already happening under the radar. We’ve known for a couple of years now that the Drug Enforcement Administration and the IRS were getting information from the NSA. Because that information was obtained without a warrant, the agencies were instructed to engage in “parallel construction” when explaining to courts and defense attorneys how the information had been obtained. If you think parallel construction just sounds like a bureaucratically sterilized way of saying big stinking lie, well, you wouldn’t be alone. And it certainly isn’t the only time that that national security apparatus has let law enforcement agencies benefit from policies that are supposed to be reserved for terrorism investigations in order to get around the Fourth Amendment, then instructed those law enforcement agencies to misdirect, fudge and outright lie about how they obtained incriminating information — see the Stingray debacle. This isn’t just a few rogue agents. The lying has been a matter of policy. We’re now learning that the feds had these agreements with police agencies all over the country, affecting thousands of cases.

This parallel construction concept is extraordinarily important, and most people are completely unaware of its meaning and usage. To get up to speed, see last year’s post:

How the DEA Uses “Parallel Construction” to Hide Unconstitutional Investigations

Of course, this is just one example of how the “war on terror” is slowly but surely transitioning into a “war on the citizenry.” A war that will only intensify as the public mood toward the status quo deteriorates further.

For example, we recently learned a little bit about how military drones are being used on U.S. soil for domestic non-terrorism related purposes. USA Today reports:

The Pentagon has deployed drones to spy over U.S. territory for non-military missions over the past decade, but the flights have been rare and lawful, according to a new report.

 

The Pentagon has publicly posted at least a partial list of the drone missions that have flown in non-military airspace over the United States and explains the use of the aircraft. The site lists nine missions flown between 2011 and 2016, largely to assist with search and rescue, floods, fires or National Guard exercises.

 

But the policy said that any use of military drones for civil authorities had to be approved by the Secretary of Defense or someone delegated by the secretary. The report found that defense secretaries have never delegated that responsibility.

While use thus far apparently has been measured, this is always how it starts. The following paragraphs should make it clear where it’s headed.

The report quoted a military law review article that said “the appetite to use them (spy drones) in the domestic environment to collect airborne imagery continues to grow, as does Congressional and media interest in their deployment.”

 

Military units that operate drones told the inspector general they would like more opportunities to fly them on domestic missions if for no other reason than to give pilots more experience to improve their skills, the report said. “Multiple units told us that as forces using the UAS capabilities continue to draw down overseas, opportunities for UAS realistic training and use have decreased,” the report said.

Unless there’s significant pushback to the use of military drones domestically, the practice is likely to expand and expand and expand until you can’t go out for a coffee without a camera dangling above your head.

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

On March 11, the National Archives announced its first opening of Financial Crisis Inquiry Commission (FCIC) records, along with a detailed 1,400-page online finding aid (yes, just the index is 1,400 pages). The records which are available via DropBox, seek to identify the causes of the 2008 financial crisis.

Among the numerous materials are interviews with key players in Washington and on Wall Street, from Warren Buffett to Alan Greenspan. The documents also include minutes of commission meetings and internal deliberations concerning the causes of the financial crisis.

While we admit we have yet to read the several hundred thousand pages released yesterday, here is what has so far emerged as of the better punchlines within the data dump, and it comes courtesy of the man who many believe is responsible not only for the second global great depression (which needs trillions in central bank liquidity to be swept under the rug every day), but for the “bubble-bust-bigger bubble” cycle that was unleashed with Greenspan’s Great Moderation.

Here is Allan Greenspan meeting with Dixie Noonan et al on March 31, 2010:

This is a reason why the Board is getting an unfair rap on this stuff. We didn’t forecast better than anyone else; we regulated banks that got in trouble like anyone else. Could we have done better? Yes, if we could forecast better. But we can’t. This is why I’m very uncomfortable with the idea of a systemic regulator, because they can’t forecast better.

This comes from the person in charge of the most powerful central bank in the world; a world which now is reliant exclusively on central bankers for its day to day pretend existence.

Good luck to all.

via Zero Hedge http://ift.tt/22bWv8F Tyler Durden