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Peak Savings: Wall Street Faces 20 Years Of Retirement Withdrawals As Boomers Hit 70 1/2
via by Tyler Durden on Tue, 17 Jan 2017 00:40:00 GMT
The United States is a demographic time bomb, plain and simple. Over the next 30 years, the U.S. economy will face an unrelenting demographic transition as ~75 million baby boomers exit the highest wage earning years of their life and start to draw down what little retirement savings they've managed to tuck away while wreaking havoc to the public "safety net" ponzi schemes, like Social Security, that will almost certainly be insolvent in a decade.
Per the U.S. Census Bureau, over the 30 years, the number of people in the U.S. over the age of 65 is expected to double while those 85 and up will triple. Needless to day, the overall population growth of the United States is a fraction of that which means that millennials are about to get crushed by their parents....so it's probably a good thing they already live in mom and dad's basement.
In aggregate, per the Wall Street Journal, Boomers have saved $10 trillion in various tax-deferred saving accounts. While that sounds like an impressive figure, with 75 million Boomers, it equates to an average of $133,000 per person which, needless to say, is insufficient to fund ~20 years of retirement.
But while the Boomers, and by extension taxpayers, are facing a harsh future, Wall Street has made a killing in fees off of managing the ever growing balance of retirement accounts as Baby Boomers have come of age. But that all looks set to change as America's aging population is forced by IRS regulations to take retirement withdrawals once they hit 70 1/2 years of age.
As illustrated by the chart below, over the past 2 decades Americans have consistently contributed more than they've withdrawn from tax deferred accounts, excluding recessionary periods. But that all changed in 2013 and 2014 as the first wave of Boomers hit the magical age of 70.5 with a total of $25 billion of net withdrawals in 2014 alone.
Contributions to tax-deferred retirement plans outnumbered withdrawals through much of the 1990s and 2000s. That flow began to reverse as boomers entered their retirement years earlier this decade.
Investors pulled a net $9 billion from workplace retirement-savings plans in 2013, according to the Labor Department. In 2014 the withdrawals jumped to net $24.9 billion. Full-year information for 2015 from the Labor Department isn’t yet available, but large mutual-fund companies that manage the bulk of U.S. retirement assets say outflows continue to rise. Fidelity Investments expects 100,000 customers to take their first required distributions in 2017, up from 91,000 in 2016.
Still, distributions are expected to grow exponentially over the next two decades because of a 1986 change to federal law designed to prevent the loss of tax revenue. Congress said savers who turn 70 ½ have to start taking withdrawals from tax-deferred savings plans or face a penalty. Specifically, retirees who turn 70 ½ have until April of the following calendar year to pull roughly 3.65% from their IRA and 401(k) funds, subject to slight differences in the way the funds are treated by the Internal Revenue Service.
Moreover, mandatory withdrawals, as set by the IRS, grow exponentially as America's Boomers get older. While mandatory annual withdrawals are only ~3.5% of assets at age 70.5, that number grows to 8% by age 90. And even though it may not sound like a lot, 3.5% of $10 trillion is $350 billion worth of assets that would have otherwise been paying Wall Street a handsome annual management fee.
U.S. law requires anyone age 70 ½ or older to begin annual withdrawals from their tax-sheltered retirement accounts and pay
taxes on those distributions. The oldest of the nation’s 75 million baby boomers cross that threshold for the first time this month, according to a U.S. Census Bureau estimate of when that demographic group began.
The obligatory outflows from 401(k)s and IRAs are expected to ripple through the U.S. economy, the stock market and a money-management industry that relies heavily on fees from boomers’ tax-sheltered savings plans and assets.
Boomers hold roughly $10 trillion in tax-deferred savings accounts, according to an estimate by Edward Shane, a managing director at Bank of New York Mellon Corp. Over the next two decades, the number of people age 70 or older is expected to nearly double to 60 million—roughly the population of Italy.
Firms that manage 401(k) plans are trying to persuade clients to reinvest their withdrawals in other products rather than spending or donating the cash to charity. It’s another pain point for many traditional money
managers already struggling to keep some clients from shifting into lower-cost index-tracking mutual funds.
But don't worry Wall Street, the average millennial has a massive $1,000 nest egg saved up to help you fill those annual $350 billion gaps.
"What Will We Be Talking About This Time Next Year" - Here Is Jeff Gundlach's Answer
via by Tyler Durden on Tue, 17 Jan 2017 00:20:00 GMT
Over the weekend, Barron's published its annual roundtable in which prominent investors previewed what they expect out of 2017: "a year of seismic shifts for the markets and, quite possibly, the world. Or, as Goldman Sachs strategist Abby Joseph Cohen said at this year’s Barron’s Roundtable, “We are breaking a lot of trends.” As Barron's dubbed it, "this could be the year the movie runs backward: Inflation awakens. Bond yields reboot. Stocks stumble. Active management rules. And we haven’t even touched on the coming regime change in Washington, which will usher tax cutters and regulatory reformers back to power after an eight-year absence."
While there were many insightful observations by the group of participants - whose sentiment was decidedly more bearish than during last year's event - which included Scott Black, Felix Zulauf, Mario Gabelli, Meryl Witmer, Brian Rogers, Oscar Schafer, and Abby Cohen, we will focus on the predictions of Jeffrey Gundlach, if only due to his track record from the similar Barron's roundtable one year earlier, in which he turned out to be far more prescient than most of his peers, not least of all because he "made the greatest prediction at last year’s Roundtable—that Trump would win the presidency."
The first question posed to Gundlach was also the broadest one: what are you predicting now?
People have forgotten the mood regarding stocks and bonds in the middle of 2016. Investors embraced the idea that zero interest rates and negative rates would be with us for a very long time. People said on TV that you should buy stocks for income and bonds for capital gains. This is when 10-year Treasuries were yielding 1.32%. Someone actually said rates would never rise again. When you hear “never” in this business, that usually means what could “never” happen is about to happen. I told our asset-allocation team in early July that this was the worst setup I’d seen in my entire career for U.S. bonds. It occurred to me that the bond-market rally was probably very near an end, and fiscal stimulus would soon become the order of the day.
Based on a comparison in July of nominal Treasuries to Treasury Inflation-Protected Securities, or TIPS, the bond market was predicting an inflation rate of 1.5%, plus or minus, for the next 30 years. Now, that is implausible, and kind of proves the efficient-market hypothesis is wrong. More likely, the inflation rate would increase not in five or 10 years, but one year, because commodity prices had already bottomed. The Federal Reserve Bank of Atlanta’s wage-growth tracker is now up 4%, year over year. Oil prices have doubled since January 2016, to around $52 a barrel, which likely means that headline CPI [the consumer-price index] will be pushing 3% in April.
I expect the history books will say that interest rates bottomed in July 2012, and double-bottomed in July 2016. At some point, the backup in rates will create competition for stocks. Bonds could rally in the short term, but once the yield on the 10-year Treasury tops 3%, which could happen this year, the valuation argument for equities becomes problematic. When the long bond [the 30-year Treasury] was at 2%, bonds had a P/E of 50. Compared with that, a P/E of 20 on stocks didn’t look all that bad. But if the 10-year yield hits 3%, you could be talking about 4% on the 30-year, which implies a P/E of 25.
Something else happened in 2016: The Fed capitulated, as I predicted a year ago. The Fed gave up on its forecast for higher interest rates and lowered its dot projections for 2017, just when it might have been right. [The Fed’s so-called dot plot shows the interest-rate projections of the individual members of its policy-setting committee.] In December, the Fed had to reverse itself and raise rates.
Is an inflationary spike possible?
Fed Chair Janet Yellen suggested a few months ago that running a “hot” economy might not be such a bad idea. But when unemployment is low, wages are rising, and significant fiscal stimulus is likely, inflation could exceed consensus expectations. Jim Grant, the founder of Grant’s Interest Rate Observer, wrote a fantastic article a few years ago likening the current environment to the 1940s and ’50s. Short-term interest rates were at 3/8s in the late 1940s, and long rates were around 2%-2.5%. Inflation was running at 2%. Everyone had been predicting higher inflation rates, but after a long period of 2%, they gave up. Then inflation spiked to 8%. It came out of the blue.
His take on the strong dollar:
A strong dollar keeps inflation lower. It is helpful to the bond market. A weak dollar isn’t helpful to the bond market. However, I brought along a quote from President-elect Trump today because it makes me think. He said, “While there are certain benefits to a strong dollar, it sounds better to have a strong dollar than it actually is.” Is it really a given that Trump will bring us a strong dollar if he is supposed to be helping the forgotten middle class?
His view on market risk at this moment
People are underestimating the risk of loss right now.
On Germany being the big winner currently in Europe:
The German population doesn’t quite understand this. According to ,a poll by Pew Research Center, 38% of Germans disapprove of the EU’s handling of economic issues. In France and Italy, two-thirds-plus of the population are dissatisfied with the EU. In polling terms, that is enormous. Those countries have almost maxed out on dissatisfaction.
What worries, and excites, Gundlach about 2017:
The shift in sentiment to positive from negative, regarding the efficacy of Trump is one of the biggest I’ve seen in my career. I wonder if sentiment can swing just as quickly the other way. Many people who voted for him think something is going to change for them. They expect their wages to rise, and America to be “great again.” What will happen by July or August if nothing has changed? Put that together with the timing of an interest-rate rise, and we potentially could see a very different psychological environment.
Are bonds in a bubble:
People say bonds are in a bubble, that they are over-owned. I agree with that. But anything that is momentum-driven is in a bubble. This passive stuff is in a bubble.
On portfolio construction for the next 12 months, and what may be the "best trade" of the year:
Some things should be avoided in a major way because they have risk without rewards. One of the greatest trades of the year could be shorting German Bunds... Portfolios need to diversify away from deflation-oriented trades, which worked for a long time.
On the trajectory of the stock market over the course of the year.
Zulauf: Stocks could easily rise another 10% into the middle of the year. But after a soft period, bond yields will rise again, with the 10-year Treasury yield hitting 3% or going a little above it. That will trigger a big correction in equities, just when everyone is fully invested after buying into the Trump rally. I expect the S&P 500 to be slightly negative for the full year.
Gundlach: Did I give you my notes? That is almost exactly my view.
Where will the S&P close the year?
Gundlach: GDP growth has been unbelievably stable at 2% for the past six or seven years, despite quantitative easing and other nutty interest-rate policies. At last year’s Roundtable, I said the easiest forecast was that the Fed wouldn’t raise interest rates four times during the year. We are going to break out of the land of stability this year, and certainly by 2018, and there will be an inflation surprise. That isn’t going to be helpful for equity valuations.
I look for the stock market to make new highs in the first part of the year, but when rising interest rates bite, stocks will fall. I see a single-digit decline for the full year.
Finally, Gundlach was asked "what will we be talking about this time next year." His simple answer: "Trouble in the euro zone."
MLK's Niece Admits "I Voted For Trump"
via by Tyler Durden on Tue, 17 Jan 2017 00:00:00 GMT
Submitted by Matt C. Abbott via AmericanThinker.com,
The latest media-manufactured controversy surrounding President-elect Trump involves Congressman John Lewis, who won’t be attending the inauguration because he believes Mr. Trump will be an illegitimate president. (He reportedly believed the same about George W. Bush.)
American Thinker editor Thomas Lifson has written a very good piece about how the congressman shouldn’t be considered immune from criticism simply because of his background as a civil rights leader.
Lifson writes:
The American left created a claque around [Congressman Lewis], requiring any serious discussion of the man to include a disclaimer as to his heroic status and infallibility…. This made him the perfect voice to go where no elected representative should go following the operation of the constitutional machinery for picking a president.
As a Catholic commentator and pro-life advocate, I asked Evangelist Alveda C. King, niece of Dr. Martin Luther King Jr. and a pro-life leader (she serves as director of Civil Rights for the Unborn, the African-American outreach for Priests for Life and Gospel of Life Ministries), if she hopes Mr. Trump will be a pro-life president.
Evangelist King graciously responded as follows:
‘I pray that all polar opposites learn to Agape Love, live and work together as brothers and sisters—or perish as fools. While I voted for Mr. Trump, my confidence remains in God, for life, liberty and the pursuit of happiness. Prayers for President-elect Trump, Congressman Lewis, and everyone including leaders.’
Obviously Evangelist King believes Mr. Trump will be a legitimate president.
God bless her for the work she does and for not being afraid of the viciousness of the radical leftists who have co-opted the civil rights movement to further their anti-life, anti-family, libertine agenda.
Spotted In Davos: Anti-Drone Guns
via by Tyler Durden on Mon, 16 Jan 2017 23:30:00 GMT
By now we are used to images of snipers on hotel rooftops protecting the world's great-est-and-good-est from the evils of average-joe-ness...
But this year it appears there is a new foe - the drone - and a new weapon to tackle that foe...
h/t @alaashahine
While the shoulder-mounted anti-drone gun pictured above in Davos does not appear to be one we have seen before, as Engadget detailed previously, there are numerous systems built to take down wayward or dangerous drones, but they tend to have one big catch: you need to be relatively close to the drone, which could be scary if the robotic aircraft is packing explosives. DroneShield thinks it can help. It's introducing the DroneGun, a jammer that disables drone signals (including GPS and GLONASS positioning) from as far as 1.2 miles away. Like most rivals, it doesn't destroy the target drone -- it just forces the vehicle to land or return to its starting point. Anti-drone teams can not only disable threats from a safe distance, but potentially locate their pilots.
It's not the lightest machine at about 13 pounds, but it's portable enough to be usable by one person. You don't need technical training, either, so it's easy for security staff to use.
Whether or not you see the DroneGun in action is another matter. It's not FCC-certified as we write this, so you can't legally operate one in the US unless you're with the government. Provided it's approved, though, it could help take down drones at airports, protect soldiers against drone bombs and otherwise help in situations where it's simply not possible to get close.
Size Matters - No Country Should Be Bigger Than This
via by Tyler Durden on Mon, 16 Jan 2017 23:15:00 GMT
Submitted by Ryan McMaken via The Mises Institute,
From the perspective of the state, one of the benefits of growing larger geographically is that bigness makes it more difficult for residents to emigrate or cross over borders to escape taxes.
In his writings on the origins of the "European miracle" that led to the continent's economic success, Ralph Raico has noted the importance of small states in Europe and the ability to easily emigrate from one political jurisdiction to another. This free movement has been essential in forming a free and open economy and society. Raico contrasts Europe with Imperial China where the state was more easily able to monopolize both natural and human resources through its large size.
In an earlier article at mises.org, we also explored how the creation of a larger number of (necessarily smaller) states creates more options for residents of the existing states, and thus increases the potential for fruitful migration and escape from overweening state power.
Larger states, geographically speaking, work in the opposite direction of this, limiting options for relocation, and placing greater barriers in the way of residents who might be looking to change the the conditions under which they live.
In the case of the United States, for example, the sheer size of the United States requires a potential emigrant to move hundreds of miles from friends and family simply to live under a different national government. Even worse for the potential immigrant is that, in the case of the US, there are only two bordering states. This means, unless the emigrant can gain entry into one of those two neighboring states, he may potentially need to move thousands of miles from friends and family.
The magnitude of such a move means that an emigrant, in order to visit family members, or conduct business in his or her community of origin, must endure great expense in terms of travel costs and time.
On top of this, given that 80 percent of the world's native English-speakers live in the United States, any potential emigrant is also likely to need to learn a new language, which is no small affair.
This, of course, helps illustrate the absurdity of claims by nationalists that any critic of the local state should simply "love it or leave it" and move somewhere else. Even if that person can gain entry into another state — something that is by no means guaranteed — he would then need to separate himself from friends and family by hundreds or thousands of miles, learn a new language, and be prepared to potentially spend thousands of dollars and take time off from work simply to visit a sick relative.
Not surprisingly, then, virtually no one emigrates based on political views alone because the quality of daily human life depends largely on a countless number of connections to family, social networks, and business associations that tend to depend on physical proximity to others. Leaving these social and economic networks can come at a great personal cost, and the further one must move from them, the greater the cost may be.
Thus, the more a state can make cross-border travel expensive, tedious, or time consuming, the more that state can easily impose a wide variety of disincentives to emigration.
For these reasons, among others, advocates for greater freedom in the movement of goods, persons, and capital, should seek to limit and shrink the size of states. Given that states, by their very nature, rely on extending a monopoly on coercion over a specific area, one can say that smaller states are less state-like. Larger states, by contrast, act more like the quintessential state since they are able to effect greater consolidation of monopoly power.
Mises's View of State and Society
Ludwig von Mises believed that states, in theory, could be reduced in size to a single household. That is, he was theoretically an anarchist. However, Mises also recognized that, for practical reasons, individual political jurisdictions were likely to be larger than a single person or household. Writing in liberalism, Mises concludes:
If it were in any way possible to grant this right of self-determination [via secession] to every individual person, it would have to be done. This is impracticable only because of compelling technical considerations, which make it necessary that a region be governed as a single administrative unit and that the right of self-determination be restricted to the will of the majority of the inhabitants of areas large enough to count as territorial units in the administration of the country.
But what does Mises mean by "compelling technical considerations?"
To get insight into what Mises may mean here, we can extrapolate from Mises's view of how and why human civic institutions are formed in the first place.
For Mises, individuals associate with each other voluntarily in order to take advantage of the division of labor. Writing in Human Action, Mises notes:
Every step by which an individual substitutes concerted action for isolated action results in an immediate and recognizable improvement in his conditions. The advantages derived from peaceful cooperation and division of labor are universal. They immediately benefit every generation, and not only Iater descendants. For what the individual must sacrifice for the sake of society he is amply compensated by greater advantages. His sacrifice is only apparent and temporary; he foregoes a smaller gain in order to reap a greater one later.
Mises continues:
[H]uman action itself tends toward cooperation and association; man becomes a social being not in sacrificing his own concerns for the sake of a mythical Moloch, society, but in aiming at an improvement in his own welfare.
In Mises's view, these efforts to enhance trade and cooperation among human beings lead to the creation of cities and other population centers.
Moreover, for Mises, the state — properly limited to the function of protecting private property — can potentially assist in creating conditions that facilitate the cooperative behavior he envisioned. Thus, it is the cost of acting as an administrator of law that leads Mises to conclude that certain "compelling technical considerations" are are likely to keep states above a certain minimum size.
A problem arises, however, when we recognize that this vision of the state exists in tension with the fact that — as illustrated by Raico — the physical and geographical growth of states tends to facilitate the expansion of state power well beyond the role imagined by Mises.
When contained at a municipal or metropolitan level, state power is one thing. Relocation to a neighboring metropolitan area remains relatively easy. Once states begin to take control of sizable frontiers and multiple municipal areas, however, the situation becomes far different, and states begin to limit and regulate trade and free movement, rather than facilitate it.
Thus, even if we accept Mises's idea that there is some level at which economies of scale for state administration may be beneficial, those assumed benefits are increasingly threatened the larger a state becomes.
A Modest Proposal for States on a More-Human Scale
The answer lies in limiting state size to a human scale in which human beings can still associate, travel, and trade across jurisdictional boundaries without incurring a great cost. The standard for "great cost" is subjective, of course, and over time has changed substantially. The cost of traveling 50 miles in the 16th century, for example, is significantly different form the cost of traveling the same distance today.
There are ongoing attempts by geographers, however, to determine the "natural" size of a region that encompasses a population's economic, political, and social institutions. In a recent study, for example, Garret Dash Nelson and Alasdair Rae attempted to identify regions that "have been substantively tied together by the forces of urban development, telecommunications, the frictionless circulation of capital, and the consolidation of both public and private institutions."
Basing their standard of scale on tolerance for commute times, the geographers selected 50-mile commutes as an indicator of how closely tied together is a specific region. The end result was this:
Full methodology and explanation available here.
The authors then create a suggested map of political units based on the scale of megaregions:
What are the implications of this analysis?
Analysis of regions such as these are significant because, even if we accept many of the arguments claiming that states are necessary to facilitate basic infrastructure and services, this analysis suggests there is no need to have states any larger than the so-called megaregion. After all, if one takes the view that states are necessary to streamline legal relations within certain economic regions — as Mises suggested — then this can easily be accomplished at the level of the megaregion. There is no reason, for example, why a single megaregion could not fund its own infrastructure and welfare state through the usual redistributive means. I do not advocate for this sort of redistribution, but am merely recognizing that geographically expansive states are simply not necessary to provide the sorts of state interventions put forward by modern-date social democrats.
Indeed, many welfare states we find around the world to this day are scarcely more than singular megaregions themselves, as in the case of Finland or Norway. Both states are little more than small handfuls of metropolitan areas surrounded by sparsely populated frontiers.
Moreover, even military needs, as dictated by geopolitical realities need not require a geographically large state. Historically, these issues have been successfully addressed by membership-based confederations such as the Hanseatic League and the early United States (especially during the 1770s and 80s). In both cases, these groups composed of independent city states or small states successfully addressed outside military threats. In the case of the Hanseatic League, which had no central government at all, this continued for nearly two centuries.
To this day, of course, small independent states continue to enter into agreements for the purposes of defense and do not require consolidation of domestic power into a central state.
These realities, however, are unlikely to lead to any re-arrangement of the United States — or any other state — along the lines of smaller megaregions. Even if advocates for interventionism recognized that the "services" for which they advocate could be provided at a much smaller scale, they would be likely to recognize that state power would tend to be more limited by a large number of smaller states than in a world of fewer large states.
After all, when kept to a size such as that of the megaregions listed here (to use just one example), the persons who live within them could for more easily leave one jurisdiction to do business in another, even on a daily basis. Political jurisdictions seeking to raise taxes and regulatory burdens would be limited by the relative ease of moving one's business or family to a neighboring jurisdiction. Even worse — from the state's perspective — those expatriates would still be able to visit friends and family "back home" with relative ease. And, those jurisdictions that sought to engage in various types of prohibition such as those on marijuana, would find it far more difficult to prevent their citizens from easily traveling over jurisdictional lines to spend their money in neighboring areas — thus robbing the prohibitionist states of further tax revenue.
With States, Size Matters
Many advocates for limited government or even laissez-faire government continue to debate the proper extent of state power, or whether states should exist at all. What should be apparent, however, is that even for those who want states to provide certain amenities, many modern states are far, far greater in size and scope that what is even necessary to provide those amenities in the first place. Unfortunately, the primary effect of bigness in these states is to enhance the power of the state and limit the ability of citizens to escape the state's taxes and impoverishing regulations.
Liberal Logic - We are the Frog
via by Vince Lanci on Mon, 16 Jan 2017 23:03:32 GMT
Phase 1: The Data doesn't Fit a Central Banker, Liberal Diplomat, or IMF Official's Theory
Old joke describing when a person is married to their ideas
Phase 2: Cure the Frog's Deafness
Via Marketslant.com Our scientist immediately starts studying ways to help the frog hear better. Because clearly, if the frog was not deaf, it would jump. Otherwise the scientist has an outlier on his data. And his theory cant be wrong. It has been working for years.
Don't dare broach things like dynamic equilibrium, or marginal utility, conditional probabilities, or that economic ideas are possibly cyclical to this genius. No way! We must power through. And if we fail, clearly the subject is in denial or ignorant. This is what we are up against in our leaders today.
Past Performance Guarantees Future Results in La La Land
Such is the logic of a certain type of Supranational most commonly found in the: IMF, Central Banking, Academia, and relativist thinking. They can afford to think this way. They have no skin in the game. They live in La La land.
But the funnest group to observe is 2nd generation liberals (Gen X age) who dogmatically believe. That's not to say conservatives aren't immune. People are the problem, not politics.
But the fun starts when one asks a 2nd generation liberal why they are a Democrat and watch them squirm. Especially in light of the boomer generation abandoning its progressive ideals for their 401ks and elitist rationalizations. The boomer children, especially the Clinton acolytes, are lost liberals. At least the Sanders people are consistent.
Orphaned Liberals
It is fascinating that when some 2nd generation liberals are asked why they are Democrats can't talk about ideas, but rather cite the people whose ideas they adhere to. Once, when Obama was running in 2008 I volunteered to defend a liberal Dem friend in a debate he was losing. Before engaging his enemy in what could have been a Good-Will Hunting moment, I asked him why he was a Democrat. His answer was "Because my mother is." I surrendered to the enemy. P.S.- His mother was now a multi-millionaire and a long way from being progressive. My progressive liberal friend was a political orphan drinking mommy's stale kool-aid. Meanwhile mother had long since swapped out for Caymus Cabernet.
On Dogmatic Ritual
When the Tao is lost, there is goodness.
When goodness is lost, there is morality.
When morality is lost, there is ritual.
Ritual is the husk of true faith,
the beginning of chaos.Tao Te Ching, 44
Hating Intolerant People
It is especially ironic that when one challenges a dogmatic (multicultural, globalist, self-proclaimed progressive, etc) liberal, they cling to their ideas like a redneck clings to his bible. They wear their ideas like armor. Nothing can penetrate that armor. Consequently nothing new can get in either. They are more interested in conserving their position than progressing in their thought process. Tolerance is the mantra screamed at the top of their lungs. However, tolerance of an intolerant person's opinion is non-existent. Even if that person is doing no harm except voicing their (ignorant) opinion.
Liberalism is 100% Right in its Ideals- So What?
Let's say for debate that the ideals of liberalism are 100% correct. Does that mean those ideals should be forced upon people not ready to understand them? Ever try to convert someone from their religion against their will? Ever give your car keys to a 5 year old and try to teach him to drive? Ever scream at a frog that just wouldn't listen? So much of these peoples' identity is wrapped up in their ideas it would be unbearable to accept they might be wrong. This "We know what's best" mentality pervades the Fed, IMF, US Foreign Policy, and entertainment industry. There is no room for other people's opinions. Most are adept at redirecting or obfuscating truth in service to their own denial. Thankfully, Rosie O'Donnell exists to give us a peek at the intolerance of the left.
Caps Lock: Removing Doubt of Insanity Since 1993
@ElennaV @therealjcarroll ANYONE BUT HIM - LITERALLY - PUT A GOP SENATOR AS INTERIM PRESIDENT - DECLARE STATE OF EMERGENCY
— ROSIE (@Rosie) January 16, 2017
Zombie Rosie O'Donnell- Honest, But in Denial
Hers is not unlike the behavior of a cult member. The symptoms of people like Rosie O'Donnell are similar to victims of brainwashing. Worse in Rosie, because she has a stake as leader of the brainwashed. These types know better than you. And that may be true. But do not try to tell Rosie that a person is just not ready for the holy spirit of liberalism to descend upon them. If all else fails scream at them. Or if you are in a position to do so, bomb the crap out of them.
Carpetbagger Ken Rogoff - Academic Lackey
See my WSJ weekend section article on THE CURSE OF CASH https://t.co/3PXamcaUrz
— Kenneth S Rogoff (@krogoff) August 25, 2016
Such foresight on Ken's part to publish his article 3 days before a major work was presented to the Fed. One that was an answer key for abolishing cash. Pic below from Jackson Hole Fed meeting on Aug 28th, By Marvin Goodfriend.
H/t @RudyHavenstein
- charge more for ATM use than if you use their app for electronic wiring.- Goodfriend
- Actually let cash trade at a discount to e-cash (which is what ATM fees are doing anyway)- Goodfriend
- Remove that pesky "This note legal tender" from our currency
- Discontinue the $100 bill- Rogoff
- Try it in India- You don't think the Fed is taking notes?
Rogoff is interviewing for a job in the new administration. He represents to me the worst kind of Supranational. The carpetbagger who gets behind an idea for his own gain, and after others have done the real academic work. The man actually wormed his way on the front of the WGC to sell books. Rogoff pro Gold? Sure as long as its been cusiped and converted into e-Gold we bet.
pic title edited by author
Final Note- Did Rachel Maddow Actually Cry?
One of the keystones of liberalism is relativism. A concept that implies we cannot know what is absolute good or evil. Admittedly important in learning to suspend judgment of others and fixing our own faults. I subscribe to that. Only Jesus, Buddha, Moses, Vishnu, the Tao and the Force can know absolute truth. What I don't subscribe to is perverting that concept as a tool to muddy the waters of truth. We can't know the definition of IS in absolute terms, therefore Bill Clinton was not guilty.
No, absolute truth exists. And just because we cannot know it does not mean we stop trying to. The world isn't black and white as some conservatives would have you believe. But using the gray for rationalizing unethical behavior is worse. And that is what a lot of Supranationals do.
On the other end we have Rachel Maddow who was so enamored with her candidate that she cried. Nothing relativistic there. This is a person who believes in her heart she has a monopoly on what is right for you. She has absolute knowledge apparently.
Good Luck
Vince contributes on commodities, market manipulation, and global markets
Pound Slides After Theresa May's Speech Leaks: UK PM Lays Out "Clean EU Break" In 12-Point Plan
via by Tyler Durden on Mon, 16 Jan 2017 22:56:21 GMT
While hardly coming as much of a a surprise following the weekend's news that Theresa May would call for a "clean and hard Brexit", confirmation received moments ago from both the Telegraph, FT and Bloomberg that on Tuesday May will indeed declare that Britain is making a "clean break" from the EU and will not seek a deal that leaves the country “half in and half out”, has send the sterling lower by some 25 pips, because even though the news is not incremental, as Bloomberg notes quoting a trader, "Algos Trade Off Keyword Flagged in Speech."
According to The Telegraph, which has likely seen an advance copy of her speech tomorrow, the UK Prime Minister will set out a 12-point plan for Brexit as she vows that the UK will not have “partial” membership of the EU “that leaves us half-in, half-out”. Mrs May will make her most significant speech since becoming Prime Minister in July last year and confirm that Britain will leave the single market and customs union after Brexit.
Some more details of her upcoming speech, courtesy of the Telegraph:
- In remarks that will delight Conservative Eurosceptics, May will pledge that Britain outside the European Union will be a “great, global trading nation” that is “respected around the world and strong, confident and united at home”.
- The Prime Minister will make regaining control of Britain’s borders one of the central themes of her Brexit strategy and will also make clear that the rights of UK expats will be protected.
- She will make clear for the first time that Britain will not seek a watered down version of Brexit, something that Remain campaigners are still pushing for.
- The Prime Minister will say that Britain is quitting the single market and although she will be less explicit on the issue of the customs union, her remarks will make clear that after Brexit the UK will no longer be a member.
- She will say that the Government has “12 objectives that amount to one big goal: a new, positive and constructive partnership between Britain and the European Union”.
The 12 objectives are understood to include gaining control of Britain’s borders, taking the UK out of the jurisdiction of the European courts, preserving the Union, maintaining workers’ rights and signing major free trade deals.
“And as we negotiate that partnership, we will be driven by some simple principles: we will provide as much certainty and clarity as we can at every stage,” Mrs May will add. “And we will take this opportunity to make Britain stronger, to make Britain fairer, and to build a more Global Britain too.”
Her remarks will be seen as a direct rebuke to European leaders who have repeatedly claimed that Britain will have to compromise on freedom of movement if it wants membership of the single market or customs union. “We seek a new and equal partnership – between an independent, self-governing, Global Britain and our friends and allies in the EU,” the Prime Minister will say in the speech in Lancaster House in London.
“Not partial membership of the European Union, associate membership of the European Union, or anything that leaves us half-in, half-out. We do not seek to adopt a model already enjoyed by other countries. We do not seek to hold on to bits of membership as we leave.
“The United Kingdom is leaving the European Union. My job is to get the right deal for Britain as we do.”
She will also use the speech to directly counter claims by her critics that she has no plan for Brexit.
Mrs May has pledged to trigger Article 50, which triggers formal Brexit negotiations with Brussels, by the end of March. The four principles guiding the negotiation with Brussels will be “certainty and clarity”, “a stronger Britain”, “a fairer Britain” and “a truly Global Britain”, Mrs May will say.
Ultimately, May will concede that the “road ahead will be uncertain at times”, but will make clear that Brexit will lead to a “brighter future” for voters’ children and grandchildren.
“A little over six months ago the British people voted for change,” Mrs May will say. “They voted to shape a brighter future for our country. They voted to leave the European Union and embrace the world.
“And they did so with their eyes open: accepting that the road ahead will be uncertain at times, but believing that it leads towards a brighter future for their children – and their grandchildren too.
“And it is the job of this Government to deliver it. That means more than negotiating our new relationship with the EU. It means taking the opportunity of this great moment of national change to step back and ask ourselves what kind of country we want to be.”
Mrs May's speech comes after Donald Trump, the President-Elect of the United States, said that Britain and America will get a new trade deal "done quickly and done properly".
* * *
The Telegraph adds that Eurosceptics and senior Leave campaigners will welcome Mrs May’s commitment that Britain will quit the single market.
On the customs union, Mrs May will suggest that there could be scope for negotiating access for some sectors – such as the automotive industry – after Brexit.
However, it will be clear from her words that while the Brexit negotiation may include discussions about some form of access, Britain is leaving the customs union.
While May will not set out her plans for Britain’s post-Brexit immigration system, she will favour a work permit system, meaning EU migrants will only be able to come to the UK to live or work if they have a firm job offer.
“My answer is clear,” Mrs May will add. “I want this United Kingdom to emerge from this period of change stronger, fairer, more united and more outward-looking than ever before. I want us to be secure, prosperous, tolerant country – a magnet for international talent and a home to the pioneers and innovators who will shape the world ahead.
“I want us to be a truly Global Britain – the best friend and neighbour to our European partners, but a country that reaches beyond the borders of Europe too. A country that gets out into the world to build relationships with old friends and new allies alike.”
* * *
The good news, if only for the market, is that with her speech fully leaked at this point, there will be no further surprise, and if anything, it is possible that the sterling's next move is higher, especally as an adverse Supreme Court ruling on Article 50, which could come at any point, could unleash a violent short squeeze in cable.
Facebook Launches 'Fake News' Filtering Service Ahead Of German Elections
via by Tyler Durden on Mon, 16 Jan 2017 22:30:00 GMT
Because the rise in popularity of alternative and populist candidates in Germany and elsewhere around the world can't possibly by a legitimate rejection of politicians who simply skewed policies too far to the left over the past decade, Germany and Facebook have announced an accelerated effort to crack down on "Fake News" (i.e. anything that is deemed critical of Angela Merkel) ahead the country's elections in September. Just like in the U.S., Facebook's crackdown in Germany will enlist the support of 3rd-party "fact checkers" who will flag stories as "disputed" if they're found to include "fake" or "misleading" content. The Financial Times:
German users of the social network will now be able to report a story as fake and it will be sent to Correctiv, a third-party fact checker. If the fact checker discovers it is fake, the story will be flagged as “disputed”, with an explanation. Disputed stories will not be prioritised by the news feed algorithm and people will receive a warning if they decide to share it.
Facebook said it had been in discussions with German media and publishing groups and was working to get more partners on board. “Our focus is on Germany right now but we’re certainly thinking through what countries will unveil next,” he said.
Of course, as we pointed out a few weeks ago, similar efforts to enlist the help a third-party, "independent" fact checker in the U.S., Poynter, drew some scrutiny after a quick google search revealed that they are funded by none other than George Soros' Open Society Foundation, which can be accused of many things, but political impartiality is not one of them. From our previous post:
A quick review of Poynter's website reveals that the organization is funded by the who's who of leftist billionaires including George Soros' Open Society Foundations, the Bill & Melinda Gates Foundation, Google, and Ebay founder Pierre Omidyar's Omidyar Network. Well that seem fairly bipartisan, right?
As we pointed out a couple of weeks ago, Germany is actively considering a number of laws that could impose fines of up to €500,000 and 5 years in jail for the distribution of "fake news" with justice minister Heiko Maas saying that "social networks have a duty" to censor "lies and hate campaigns."
The German government announced last month it was planning a law that would impose fines of up to €500,000 on Facebook for distributing fake news. Angela Merkel, chancellor, has warned there are signs that online attacks and misinformation coming from Russia could “play a role in the election campaign”.
In an interview with Welt Am Sonntag on Sunday, Heiko Maas, Germany’s justice minister, warned that fake news posed a “danger to our culture of debate”, and added that, in extreme cases, those responsible could face up to five years in jail.
“But social networks also have a duty,” he said. “It can’t be in Facebook’s interest that its platform is misused in order to spread lies and hate campaigns. Criminal content should be deleted immediately once it has been reported. And it must be easier for users to report fake news.”
Germany’s Justice Ministry will draft a bill that will include a “catalog of fines” for violations, Volker Kauder, Merkel’s top lieutenant in parliament, told reporters Saturday. Thomas Oppermann, his counterpart in the Social Democratic Party, Merkel’s coalition partner, last month told Der Spiegel that the penalties could reach 500,000 euros ($532,000), and that sites like Facebook should also be required to publish corrections after removing criminal posts.
The fines “have to hurt, otherwise they won’t work,” Kauder said.
And while many would say this is yet another unprecedented attempt of the left to collude with the mainstream media in an effort to censor their political opposition, Merkel's CDU party would like for you to rest assured that their "fake news" crusade is simply intended to "protect Germany’s democratic process against manipulation."
“Social networks take too long to remove insults before they spiral out of control,” said Stephan Harbarth, a senior lawmaker of Merkel’s CDU party. “There are clear limits to freedom of speech in the real world that aren’t yet applied online and that needs to change. This is about hate posts as well as fake news.”
Harbarth said he would like to see the law enacted before this year’s national election, expected to be held in September. He insists it’s not intended to boost the CDU’s chances in the ballot, but rather to protect Germany’s democratic process against manipulation.
But, if the last year has taught us anything, it's that Putin and his army of hackers will not be stopped. If they can single-handedly topple the Clinton dynasty then Merkel doesn't stand a chance.
Germany ignored anti-terror tips, had intelligence agencies infiltrated by ISIS in 2016
via by William Craddick on Mon, 16 Jan 2017 22:14:37 GMT
Abstract
A troubling series of revelations about German failures to prevent Islamic State operations within the country raise questions about their ability and willingness to effectively combat terror. The string of intelligence fiascos in 2016 comes as documents from Wikileaks show that Germany's Federal Office for Migration and Refugees had a policy of admitting migrants who were a known terror risk with the intention of recruiting them as informants over a decade and a half ago.
I. Germany failed to heed multiple warnings about Berlin truck attacker Anis Amri
In the aftermath of the recent December 2016 Berlin truck attack, reports have emerged that German intelligence received prior warnings about the likelihood that an incident was due to occur but failed to take action. On December 22nd, 2016, Moroccan World News revealed that Morocco had warned German intelligence officials in September 2016 that Berlin truck attacker Anis Amri had jihadist tendencies and was known to have sworn allegiance to the Islamic State. On October 11th, they gave German intelligence a second tip that Amri had been residing in Germany illegally for 14 months and that he was regularly meeting with two known members of ISIS who were described as "dangerous." German officials do no appear to have acted on either tip from their Moroccan counterparts.
The article further explained that Spanish and French authorities have successfully dismantled terror cells based on information passed to them by Moroccan intelligence in the past. Why Germany failed to heed a tip from an intelligence source which had a proven track record of assisting anti-terror operations in other European states is unknown.
II. ISIS was able to successfully infiltrate German intelligence organizations in 2016
This series of failures to properly investigate Anis Amri and prevent the Berlin truck attack came on the heels of November 2016 reports that an intelligence officer working for Germany's internal intelligence agency, the Bundesverfassungsschutz (BfV) was arrested for taking part in a plot to bomb the BfV's headquarters in Cologne, Germany. This news was given little to no attention by U.S. media.
German news source Der Spiegel reported that the 51 year-old intelligence officer made a "partial confession" to his role in plotting the attack following his arrest.
These failures to properly respond to warnings about the Berlin truck attack and the infiltration of intelligence organizations by ISIS operatives seem to indicate either a troubling level of incompetence or complicity within German intelligence and anti-terror bureaus.
III. Wikileaks' BND Inquiry Exhibit reveals German willingness to admit at risk migrants to use as informants
In Wikileaks’ recent BND-NSA Inquiry Exhibit, there is a cache of files from the Bundesamt für Migration und Flüchtlinge (BAMF) or Federal Office for Migration and Refugees. The document reveals criteria for tips that the BAMF was giving in the early 2000's to German intelligence agencies looking to recruit informants from among refugee populations:
https://wikileaks.org/bnd-inquiry/docs/BAMF/MAT%20A%20BAMF-1a.pdf
The significant portions of this document are as follows:
On page 14:
We're looking for accomplices or candidates involved in terrorist activities that have not yet become perpetrators
They were specifically looking for Taliban defectors from Tajikistan, Turkmenistan, Uzbekistan as well as civilians born in Afghanistan and Egypt as well as a few other Middle Eastern countries.
On pages 15-16 they list tiers of individuals they are looking to recruit from:
Tier 1: Males with the following personal features: Aged 18-45, single, lower-middle-class to poor background, lived in refugee camps for a while, poor occupational and societal prospects, sketchy CV, Muslim belief, doesn't support UMMA (collective community of Islamic peoples).
Tier 2: Individuals with knowledge about suspected terrorist organizations
Tier 3: Individuals that resided in or have knowledge about Al-Azher University, Cairo, or the El-Haramein Institute of Culture which is founded by Saudi Arabia and used to promote Wahabbism, the Islamic sect that most jihadist groups draw upon for their ideology.
This is highly alarming, because it proves that German intelligence has in the past been aware of the fact that there are individuals among the refugee population that have knowledge of terror organizations, are “defectors” from them or have been exposed to radical Islamic ideologies at certain educational institutions. Why have they not simply been arresting these people and preventing them from 1) committing attacks and 2) radicalizing even more males from the refugee population? Does the BAMF continue to have a similar policy towards migrants today? A basic assumption is that German intelligence would not admit any migrants they felt they could not maintain control over. Given their string of failures to tackle extremists that confidence can no longer be extended to them.
The apparent willingness of German officials to admit at risk migrants is certainly very strange. Unless of course, one views it from the perspective that they might want incidents to occur as a result of neglecting to crack down on known and potential extremists.
This article was originally posted at www.disobedientmedia.com
The One Thing Millennials Need to Know About Investing
via Motley Fool Headlines by on Mon, 16 Jan 2017 22:05:00 GMT
Martin Armstrong Rages: "Al Sharpton Is Brainwashing These People"
via by Tyler Durden on Mon, 16 Jan 2017 22:00:00 GMT
Submitted by Martin Armstring via ArmstrongEconomics.com,
Al Sharpton seems to be doing whatever he can to mislead minorities in a very dangerous way. He has been organizing civil rights activists vowing to defend what they say are hard-fought gains in voting rights and criminal justice prior to the presidency of Donald Trump.
Sharpton is not stupid. He knows what he is doing. Why did he not do this against Obama who kept defending police? Why now?
It was the Clintons who signed in the Mandatory Miniumum sentences. Since the Clintons signed that act, the prison population has more than doubled. It use to be a prosecutor did not care if you went to prison as long as he won the conviction. Then it all changed. Prosecutors get no credit for their career UNLESS someone goes to prison.
I was running the legal library having to give advice to people in prison based upon the law. The unit manager came to me and gave me an old Chinese guy they just put in prison and said “Here – he’s yours!” I asked what do you mean? He said “You speak that stuff!” The prisoner did not speak English and was probably in his eighties. I responded: “I do not speak Mandarin. I know Japanese. “Oh its all the same. He’s yours!” It turned out he drove on federal property with an expired drivers license and was sentenced to 30 days in prison. There was another guy we had to laugh about. He was in prison for shooting a moose on federal property. It got to the point we would ask – What are you in for? Farting in a federal building?
Al Sharpton had more than 20 years to lead a protest about the injustice of the criminal system put in by the Clintons. Of course, they are Democrats. Can’t do that. OMG, people might find out the truth! Sharpton is brainwashing these people as if Trump is somehow going to make this worse? Where has he been for the past 25 years?
Trump is not a racist nor has he EVER said anything about rolling back civil rights since they really do not exist right now anyhow. This is all about stirring people to protest about things they do not even know what they are yelling about or are they yelling about the wrong people. This is just nuts.
Istanbul Nightclub Attacker Who Killed 39 On New Year's Day Has Been Captured
via by Tyler Durden on Mon, 16 Jan 2017 21:48:22 GMT
The Raina nightclub attacker, Abdulgadir Masharipov, who killed 39 people
in a nightclub attack in Istanbul on New Year's Eve, was captured by
Turkish security forces late Monday according to Turkey's Hurryiet and Daily Sabah.
The Uzbek attacker was caught in his friend's house in the Esenyurt district of Istanbul. The terrorist, who according to the Turkish press is a member of the Islamic State, is now being transferred to Istanbul Police Headquarters.
#SONDAK?KA 39 ki?inin katili Reina sald?rgan?, sa? ele geçirildi https://t.co/fZHRxtpGg6 pic.twitter.com/yvmG0f5UHB
— Posta Gazetesi (@postacomtr) January 16, 2017
More from the Turkish source:
Police have been after the terrorist since January 1. Security forces have previously raided a house in Istanbul's Maltepe district and detained Masharipov's wife, whose identity has been kept hidden. Previous reports stated that his wife and his family members had been detained by police after the attack.
"I learned about the attack from TV. I didn't know that my husband was a Daesh terrorist, let alone a sympathizer," media reports had quoted his wife as saying. After staging the attack on the nightclub, the terrorist went to a house in Zeytinburnu, where his wife and children were brought to. Masharipov then took his 4-year-old son and went missing.
"We said goodbye to each other and he left the house," Masharipov's wife told anti-terror police during her interrogation.
Previous reports have said that after attacking Reina, Masharipov went to Zeytinburnu with a taxi and asked workers at a local Uighur restaurant to give money to the driver. Uighurs were among those detained after the attack, while the owner of the restaurant, identified as Semsettin Dursun, has denied any connection to the attack.
The Islamic State has claimed responsibility for the attack, saying it was revenge for Turkish military involvement in Syria.
What Vice Costs - The World's Cheapest (& Most Expensive) Countries For Drugs, Booze, & Cigarettes
via by Tyler Durden on Mon, 16 Jan 2017 21:35:00 GMT
Indulging in a weekly habit of drugs, booze and cigarettes can cost you as little as $41.40 in Laos and a whopping $1,441.50 in Japan, according to the Bloomberg Vice Index.
Bloomberg compared the price of a basket of goods — tobacco, alcohol, amphetamine, cannabis, cocaine and opioids — in more than 100 countries relative to the U.S., where your fix of the vices adds up to almost $400, or about a third of the weekly income.
Here is the full basket of vice that Bloomberg is comparing: a pack of cigarettes, most popular and premium brands; a bottle of alcoholic beverages, including beer, wine and spirits; a gram of amphetamine-type stimulants, including amphetamine, methamphetamine and/or ecstasy; a gram of cannabis, including marijuana herb, hashish resin and/or cannabis oil; a gram of cocaine, regardless of salts, paste or base forms; a gram of opioids, including heroin and/or opium.
However, looking at the basket of vices relative to income unveils a few surprises.
Under that criteria, high-income nations such as Luxembourg and Switzerland offer the best value.
In Venezuela, however, rampant inflation means locals would have to spend 17 times their weekly wages for a bottle of beer, a packet of smokes and a gram of cocaine.
Yet another reason to leave Venezuela (if you can).
Three People Shot Following MLK Parade In Miami
via by Tyler Durden on Mon, 16 Jan 2017 21:34:02 GMT
Police and fire rescue crews are on the scene after at least three people were shot at Martin Luther King Jr. Memorial Park on Martin Luther King Jr. Day. According to Miami-Dade Police, three people sustained gunshot wounds at the park, located at 6011 N.W. 32nd Avenue, in Northwest Miami-Dade, Monday afternoon. Two other people were hurt, but how they were injured and the extent is unknown.
MLK parade and festival in NW Miami Dade turns into shooting scene. @wsvn pic.twitter.com/eG0lznurPN
— Ann Keil (@ann_keil) January 16, 2017
All three victims have been transported to Ryder Trauma Center at Jackson Memorial Hospital. One of the victims was transported as a trauma alert according to WSVN Miami.
.@MiamiPD officers carry a woman that appeared to have been shot at the MLK Jr. Memorial Park. pic.twitter.com/qtwHFiaTYi
— WSVN 7 News (@wsvn) January 16, 2017
7News reporter Ann Keil and photographers were about 100 feet away from the scene of the shooting, along Northwest 32nd Avenue and Northwest 62nd Street. They heard between four and six shots.
shooting at festival after Miami MLK parade. multiple shots heard 1,000 feet from us. @wsvn pic.twitter.com/bdvVmAGZ75
— Ann Keil (@ann_keil) January 16, 2017
Moments later, the news crew saw displaced children crying after losing their parents when a stampede of attendees ran away from the scene in search of safety.
first police officers on scene clearing NW 32nd Avenue after the shooting. @wsvn pic.twitter.com/rvZcSVN9dm
— Ann Keil (@ann_keil) January 16, 2017
Around 4 p.m., several law enforcement agencies and fire rescue vehicles were seen flooding the area.
They have since cleared the entire area and have ordered everyone, including vendors, to flee the area.
According to Keil, at least two women looked like they had been shot in the leg. Moments later, a man was seen on the floor in handcuffs.
It is unknown whether a suspect or suspects have been detained at this time. A number of fire rescue vehicles were seen driving throughout the neighborhood.
Footage from a live helicopter camera showed a black man being arrested and taken away inside a police cruiser.
This remains an active scene.
#BREAKING
MANY PEOPLE SHOT-MIAMI DADE AREA
PD/FIRE/SWAT/NEWS MEDIA ABOVE
WATCH(https://t.co/HBVUl4ugyw)
MLK DAY EVENT— INLAND PURSUITS (@IEPURSUITS) January 16, 2017
2 Stocks That Pay You Each Month
via Motley Fool Headlines by on Mon, 16 Jan 2017 21:55:00 GMT
Why Vera Bradley, Inc. Stock Fell 25.9% in 2016
via Motley Fool Headlines by on Mon, 16 Jan 2017 21:42:00 GMT
The Clinton Global Initiative is closing due to the 2016 revelations of multiple related international scandals
via by William Craddick on Mon, 16 Jan 2017 21:30:26 GMT
Abstract:
The Clinton Global Initiative's closure comes as several international scandals emerge linking government corruption in various states to the Clinton Global Initiative and its parent organization the Clinton Foundation.
I. New Zealand
Reports began to emerge in November 2016 that New Zealand Prime Minister John Key had given over $7.7 million in taxpayers' money to the Clinton Global Initiative. This donation was part of a 2013 pledge to ultimately give $13.7 million to the CGI. The revelations created a political scandal which was an influencing factor in John Key's announcement that he would resign from his position. The New Zealand Herald has since criticized government support for the Clinton Global Initiative, highlighting other reports of controversy and scandal which have dogged the Clinton Foundation in recent years.
II. Norway
In July 2016, Norwegian paper Dagbladet reported that from 2007 to 2015, the governments of Jens Stoltenberg and Erna Solberg of Norway sent the Clinton Foundation and its various initiatives over $584 million. Jens Stoltenberg went on from his position as Prime Minister of Norway to become the current Secretary General of NATO.
Norway also was rocked by a child abuse scandal which came to light in November 2016. On November 20, the Associated Press reported that 20 individuals had been arrested and 31 more were being sought as part of an investigation known as "Dark Room" which began in 2015. Many of the suspects were described as being highly educated and the arrestees included lawyers and politicians. Investigator Hilde Reikrås told the Norwegian press that further arrests beyond those currently charged were expected.
American media outlets such as the New York Times, ABC News, and The Washington Post initially ran reports on the arrests. However, within a few weeks of the news breaking, these news corporations removed any mention of the Norway child abuse ring from their webpages. Listed below are archives of the links, showing that they no longer direct to a valid news article:
New York Times Archive taken on December 9, 2016
ABC News Archive taken on January 16, 2017 showing a redirect from the former article to the website's home page
Washington Post Archive taken on January 16, 2017
The reason for the sudden redaction of these stories by the above news corporations is currently unknown. The proximity of the revelation of both financial and abuse scandals, both of which involved members of the Norwegian government raises the question of whether or not the two might have been related in any possible way.
III. Germany
Reports have also emerged that Germany donated over £4 million in taxpayer funds to various Clinton Foundation initiatives. The funds appear to have been funneled primarily through Germany's Bundesministerium für Umwelt, Naturschutz, Bau und Reaktorsicherheit (BMUB) or Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety.
Angela Merkel has a history of seemingly changing her stances on political issues after meetings with Clinton Foundation representatives. In 2015, when Germany was mulling over a third round of austerity measures for Greece, CNN reported that Merkel was inclined to refuse a new stimulus for the struggling nation.
On the same day as CNN's article ran however, an email from Wikileaks revealed that foreign policy advisors to Bill Clinton and John Podesta disapproved of Merkel's decision to refuse further austerity to Greece. The decision was made to have Clinton call Merkel by phone and express his desire that she move ahead with the Greek stimulus.
Within nine days of the date that the above email was sent on, the BBC was reporting that Merkel was "flip flopping" and would now consider a third round of austerity measures for Greece. When austerity was actually given to Greece it was criticized as being far too generous and not in Germany's economic interests.
This article was originally posted at www.disobedientmedia.com
The Real Value Of Cash
via by Tyler Durden on Mon, 16 Jan 2017 21:15:00 GMT
Submitted by Lance Roberts via RealInvestmentAdvice.com,
It’s the Fed’s fault.
Over the past several years, the Federal Reserve has forced interest rates lower in an all-out assault on “cash.”
The theory was simple. Make returns on “cash” so low it is forced out of savings account and into risk assets.
It worked.
But here is the problem.
While the ongoing interventions by the Federal Reserve have certainly boosted asset prices higher, the only real accomplishment has been a widening of the wealth gap between the top 10% of individuals that have dollars invested in the financial markets and everyone else. This was shown by the Fed’s most recent consumer survey.
With the average American still living well beyond their means, the reality is that economic growth will remain mired at lower levels as savings continue to be diverted from productive investment into debt service. This skew in wealth, between the top 10% and bottom 90%, has distorted much of the economic data which suggests savings rates and incomes are rising across the broad spectrum of the economy. The reality, as shown by repeated studies and surveys, is an inability for many individuals to meet even small emergencies, must less being anywhere close to having sufficient assets to support a healthy retirement. To wit:
Take a look at that graphic carefully.
- 33% of Americans have $0 saved for retirement.
- 56% only have $0-$10,000
- 66% have less than one-year of median income saved.
- 74% have less than $100,000 saved for retirement.
With 3/4th’s of America dependent upon an already overburdened social security system in retirement, the “consumption function,” on which roughly 70% of the economy is dependent, is being grossly overestimated.
The Risk Of Holding Cash
As I noted in this past weekend’s missive, the level of cash being held by individual investors currently is near record lows.
Of course, Wall Street, analysts and the media have been all complicit in the “war on cash.”
The argument against holding cash is simply this:
“Since there is “no yield on cash,” you MUST invest in the stock market otherwise you are losing money due to inflation and opportunity costs.”
This is a true statement ONLY IF you hold cash for an EXTREMELY long period. However, holding cash as a “hedge” against market volatility during periods of elevated uncertainty is a different matter entirely.
It is relatively unimportant the markets are making new highs. The reality is that new highs only represent about 5% of the market’s action while the other 95% of the advance was making up previous losses. “Getting back to even” is not a long-term investing strategy.
In a market environment that is extremely overvalued, the projection of long-term forward returns is exceedingly low. I have discussed this previously, but this cannot be overstated enough. This, of course, does not mean that markets just trade sideways, but in rather large swings between exhilarating rises and spirit-crushing declines. This is an extremely important concept in understanding the “real value of cash.”
The chart below shows the inflation-adjusted return of $100 invested in the S&P 500 (capital appreciation only using data provided by Dr. Robert Shiller). The chart also shows Dr. Shiller’s CAPE ratio. However, I have capped the CAPE ratio at 23x earnings which has historically been the peak of secular bull markets in the past. Lastly, I calculated a simple cash/stock switching model which buys stocks at a CAPE ratio of 6x or less and moves back to cash at a ratio of 23x.
I have adjusted the value of holding cash for the annual inflation rate which is why during the sharp rise in inflation in the 1970’s there is a downward slope in the value of cash. However, while the value of cash is adjusted for purchasing power in terms of acquiring goods or services in the future, the impact of inflation on cash as an asset with respect to reinvestment may be different since asset prices are negatively impacted by spiking inflation. In such an event, cash gains purchasing power parity in the future if assets prices fall more than inflation rises.
While no individual could effectively manage money this way, the importance of “cash” as an asset class is revealed. While cash did lose relative purchasing power, due to inflation, the benefits of having capital to invest at lower valuations produced substantial outperformance over waiting for previously destroyed investment capital to recover.
While we can debate over methodologies, allocations, etc., the point here is that “time frames” are crucial in the discussion of cash as an asset class. If an individual is “literally” burying cash in their backyard, then the discussion of the loss of purchasing power is appropriate.
However, if cash is a “tactical” holding to avoid short-term destruction of capital, then the protection afforded outweighs the loss of purchasing power in the distant future.
Much of the mainstream media will quickly disagree with the concept of holding cash and tout long-term returns as the reason to just remain invested in both good times and bad. The problem is it is YOUR money at risk. Furthermore, most individuals lack the “time” necessary to truly capture 30 to 60-year return averages.
8-Reasons To Hold Cash
I’ve been managing money in some form coming up on 30-years. I learned a long time ago that while a “rising tide lifts all boats,” eventually the “tide recedes.” I made one simple adjustment to my portfolio management over the years which has served me well. When risks begin to outweigh the potential for reward, I raise cash.
The great thing about holding extra cash is that if I’m wrong, simply make the proper adjustments to increase the risk in my portfolios. However, if I am right, I protect investment capital from destruction and spend far less time “getting back to even” and spend more time working towards my long-term investment goals.
Here are my reasons having cash is important.
1) We are not investors, we are speculators. We are buying pieces of paper at one price with an endeavor to eventually sell them at a higher price. This is speculation at its purest form. Therefore, when probabilities outweigh the possibilities, I raise cash.
2) 80% of stocks move in the direction of the market. In other words, if the market is moving in a downtrend, it doesn’t matter how good the company is as most likely it will decline with the overall market.
3) The best traders understand the value of cash. From Jesse Livermore to Gerald Loeb they all believed one thing – “Buy low and Sell High.” If you “Sell High” then you have raised cash. According to Harvard Business Review, since 1886, the US economy has been in a recession or depression 61% of the time. I realize that the stock market does not equal the economy, but they are somewhat related.
4) Roughly 90% of what we’re taught about the stock market is flat out wrong: dollar-cost averaging, buy and hold, buy cheap stocks, always be in the market. The last point has certainly been proven wrong because we have seen two declines of over -50%…just in the past two decades! Keep in mind, it takes a +100% gain to recover a -50% decline.
5) 80% of individual traders lose money over ANY 10-year period. Why? Investor psychology, emotional biases, lack of capital, etc. Repeated studies by Dalbar prove this over and over again.
6) Raising cash is often a better hedge than shorting. While shorting the market, or a position, to hedge risk in a portfolio is reasonable, it also simply transfers the “risk of being wrong” from one side of the ledge to the other. Cash protects capital. Period. When a new trend, either bullish or bearish, is evident then appropriate investments can be made. In a “bull trend” you should only be neutral or long and in a “bear trend” only neutral or short. When the trend is not evident – cash is the best solution.
7) You can’t “buy low” if you don’t have anything to “buy with.” While the media chastises individuals for holding cash, it should be somewhat evident that by not “selling rich” you do not have the capital with which to “buy cheap.”
8) Cash protects against forced liquidations. One of the biggest problems for Americans currently, according to repeated surveys, is a lack of cash to meet emergencies. Having a cash cushion allows for working with life’s nasty little curves it throws at us from time to time without being forced to liquidate investments at the most inopportune times. Layoffs, employment changes, etc. which are economically driven tend to occur with downturns which coincide with market losses. Having cash allows you to weather the storms.
Importantly, I am not talking about being 100% in cash. I am suggesting that holding higher levels of cash during periods of uncertainty provides both stability and opportunity.
With the fundamental and economic backdrop becoming much more hostile toward investors in the intermediate term, understanding the value of cash as a “hedge” against loss becomes much more important.
As John Hussman noted in one of his past missives:
“The overall economic and financial landscape, then, is one where obscene valuations imply zero or negative S&P 500 total returns for more than a decade — an outcome that is largely baked-in-the-cake regardless of shorter term economic or speculative factors. Presently, market internals remain unfavorable as well. Coming off of recent overvalued, overbought, overbullish extremes, this has historically opened a clear vulnerability of the market to air-pockets, free-falls and crashes.”
As stated above, near zero returns do not imply that each year will have a zero rate of return. However, as a quick review of the past 15 years shows, markets can trade in very wide ranges leaving those who “rode it out” little to show for their emotional wear.
Given the length of the current market advance, deteriorating internals, high valuations, and weak economic backdrop; reviewing cash as an asset class in your allocation may make some sense. Chasing yield at any cost has typically not ended well for most.
Of course, since Wall Street does not make fees on investors holding cash, maybe there is another reason they are so adamant that you remain invested all the time.
John Lewis Lied: History Reveals He Did Not Attend George Bush's 2000 Inauguration
via by The_Real_Fly on Mon, 16 Jan 2017 21:08:03 GMT
Once a civil rights icon, now a democratic shill working energetically towards dividing America, Congressman John Lewis lied during a 'groundbreaking' Meet the Press interview on Sunday. He announced to a 'shocked' and dramatic Chuck Todd that he could not, in good conscience, attend the Trump inauguration because he felt MUH RUSSIANS did it and the election results were illegitimate. Moreover, John Lewis announced that this would be the first time ever, in his congressional career, that he'd miss a Presidential inauguration.
Top Congressional Shill, John Lewis, says Trump Presidency Illegitimate. pic.twitter.com/a4fiM0A1o6
— The_Real_Fly (@The_Real_Fly) January 14, 2017
Earth shattering.
The only problem with this forlorn tale of protest patriotism is that it's all fake -- just like the newspapers delivered to his house every morning. He didn't attend Bush's inauguration either...because MUH ILLEGITIMATE.
After skipping Bush's inauguration in '01, @Trish_Regan says there's a pattern of John Lewis's attempts to de-legitimize Presidents! pic.twitter.com/4XZrnNnU62
— Trish Regan Intel (@TrishIntel) January 16, 2017
MLK didn't represent the sordid brand of partisan politics that is practiced by John Lewis. By pulling this stunt, Lewis is encouraging millions to follow in his stead. Shameful.
Content originally generated at iBankCoin.com
'Bikers For Trump' Vow To Form A "Wall Of Meat" To Protect Inauguration From Protesters
via by Tyler Durden on Mon, 16 Jan 2017 21:07:00 GMT
In 2001, disaffected, Gore-supporting snowflakes shut down various parts of the Bush inauguration after increasingly violent crowds pelted his motorcade with eggs during his procession down Pennsylvania Avenue. And while many have predicted a similar fate for the Trump administration this Friday with protesters already descending upon D.C. amid vows to "paralyze the city", Trump has one advantage that Bush did not, namely 5,000 "Bikers for Trump" who have said they will form a "wall of meat" to guard against any protesters looking to disrupt the festivities.
Chris Cox, the founder of the pro-Trump group, has said that roughly 5,000 of the club's 200,000 members will ride to Washington, D.C., and attend President-elect Donald Trump’s inauguration on Friday. Appearing on Fox Friends, Cox said that attendees will be prepared to "form a wall of meat" and go "toe-to-toe with anyone that is going to break through any police barriers."
"The bikers are certainly used to being outnumbered and we are prepared to form a wall of meat. We're anticipating a celebration here. We don't anticipate any problems. We have a strict code of conduct where we don't condone violence. But again in the event that we're needed, you can certainly count on the Bikers for Trump."
"We'll be shoulder-to-shoulder with our brothers and we'll be toe-to-toe with anyone that is going to break through any police barriers, that's going to be assaulting women, spitting on them, throwing things at them. We are anticipating a peaceful transition of power."
"The backbone of the biker community is the veteran. So these are guys that aren't really used to backing down. You certainly won't see bikers out there screaming, calling for destruction of private property or the death of police officers."
As we pointed out last week, Trump's inauguration is expected to attract up to 750,000 protesters, some of whom have vowed to "paralyze the city", from anti-Trump groups including DisruptJ20 and RefuseFacism.org.
Several protest groups planning large-scale demonstrations have permits in place and have already held organizational meetings, among them the collaborative DisruptJ20.
“We’re planning a series of massive, direct actions that will shut down the inauguration ceremonies and any related celebrations,” the group says. “We’re also planning to paralyze the city.”
Organizers say they are targeting everything from the parade to the balls and plan to use blockades and protesters to stop traffic, public transit and parties.
The group RefuseFacism.org is planning a small-scale protest Saturday in the city’s McPherson Square, just blocks from the White House, that organizers hope will grow into larger inauguration-weekend protests.
The group burned U.S. flags this summer at the Democratic and Republican national conventions and this week tried to disrupt the Senate confirmation hearing for Alabama GOP Sen. Jeff Sessions to become Trump’s attorney general.
“I wouldn’t want to meet with [Trump], but I would say to him, ‘You’re a fascist. Your regime is illegitimate.’ And it must not be allowed to take power,” the group’s Carl Dix told Fox on Wednesday on Capitol Hill. Dix acknowledged the group doesn’t have a federal or city permit to protest but still intends to “stop the regime.”
We wish all the protesters the best of luck, we're sure your efforts will truly make a positive difference in the world.
