After just a little over one month in office, President Donald Trump has successfully loosened the big pharma industry’s grip on exorbitant drug price increases. January is traditionally the month that sees the highest list price hikes from prescription drugmakers. But on Feb. 27, The Wall Street Journal reported that pharma companies did not raise prices for as many drugs as last year and imposed fewer boosts of 10% or greater. In fact, January saw the lowest increases of drug prices in three years, with hikes over 10% limited to just 5.5% – 15% fewer than in 2015. The reason for the pullback: Big pharma execs are hoping to stay out of the spotlight at a time when President Trump has called for stronger Medicare authority in negotiating prices and a ‘total overhaul’ of the healthcare system.
It didn’t take much for the Greek bank run jog to return: with Greece once again stuck between an IMF rock and a Schauble hard case, and whispers that another bailout may be on the horizon, the local population took advantage of whatever capital controls loopholes they could find, and withdrew money from the local banking sector, which to this day remains on ECB life support, almost two years after the 3rd Greek bailout in the summer of 2015. According to Greece central bank data, Greek private sector bank deposits declined in January for the second month in a row, driven by renewed concerns over the country’s neverending bailout. Business and household deposits fell by 1.63 billion, or 1.34% month-on-month to 119.75 billion ($126.8 billion), the lowest level since November 2001. The January outflow follows a “jog” of 3.4 billion in December, making the two-month drop the worst since the latest Greek bailout panic in July of 2015.
This post was published at Zero Hedge on Feb 28, 2017.
In many other countries, excluding the United States, corrupt bankers are often brought to task by their respective governments. The most recent example of a corrupt banker being held accountable comes out of Spain, in which the former head of the International Monetary Fund (IMF), Rodrigo Rato was sentenced to four years and six months behind bars. According to the AFP, Spain’s National Court, which deals with corruption and financial crime cases, said he had been found guilty of embezzlement when he headed up Caja Madrid and Bankia, at a time when both groups were having difficulties. Rato, who is tied to a slew of other allegations was convicted and sentenced for misusing 12m between 2003 and 2012 – sometimes splashing out at the height of Spain’s economic crisis, according to the AFP. The people of Spain were outraged over the scandal as it was discovered during the height of a severe financial crisis in which banks were receiving millions in taxpayer dollars. Bankia was eventually nationalized and given 22 billion in public money.
This post was published at Zero Hedge on Feb 27, 2017.
February in Romania has brought 27 consecutive days of protests against the current government, at a scale unmatched since the Revolution in 1989. In a record day, more than 600,000 people gathered in the capital’s Victory Square and around the country to overturn a decision by the current ruling party to decriminalize some acts of corruption and abuse of office. This decision was especially self-serving given the high number of party members already serving suspended sentences for similar graft offenses. News outlets around the world have covered the events using flattering words, describing the peaceful riots as a ‘poetry of international resistance’ and a ‘massive political awakening.’ The resilience – and moderate success – of protesters, in spite of the government digging its heels in and the temperatures dropping, has been undeniably impressive, and has demonstrated an energetic interest in pursuing justice, which, rightly employed, could become the driver of a much needed change in Romanian politics. Yet at the same time, amongst the shouting against totalitarian measures aimed at changing the penal and civil code, other voices emerged as well. Equally numerous, and sometimes belonging to the same people, they call for stronger ‘democratic’ processes and offer public displays of affection for the European Union. Unsurprisingly, there have also been no mass protests against another fairly recent economic policy which forces supermarkets to ensure at least 51% of their grocery offers are of Romanian provenance. In this regard, many protesters might decry the ‘thieving multinational corporations’, and ask for a government crackdown on tax evasions, in order to provide for socialized healthcare and education.
What we have is a bunch of sclerotic, dying institutions and systems resisting anything and everything that threatens to disrupt the status quo. One way to understand the rising sense of disintegration and discord around the globe is to realize that those systems that aren’t busy being born are busy dying–and virtually none of our primary systems are busy being born. The line is from Bob Dylan’s song It’s Alright, Ma (I’m Only Bleeding): “he not busy being born is busy dying.” What does busy being born mean? For both individuals and systems, it means adapting by advancing understanding, flexibility and capabilities. Systems that are dying are rigid, mal-adapted, resistant to change, obsessed with obscuring their failure and retaining their grip on cronyist privilege and power. Big Pharma: dying. Banking: dying. Governance, a.k.a. political processes: dying. Enforced consensus: dying.
Another Trump nominee for a critical government role has decided to withdraw. After two prior Trump nominees, Army Secretary choice Vincent Viola and Labor nominee Andy Puzder, both removed themselves from consideration for their appointed role in recent weeks citing insurmountable opposition or conflicts, moments ago financier Philip Bilden, a senior advisor at HarbourVest Asia and President Trump’s pick to lead the Navy, was said to become the third Trump appointee to withdraw his nomination. “Philip Bilden has informed me that he has come to the difficult decision to withdraw from consideration to be secretary of the Navy,” Defense Secretary Jim Mattis said in a statement Sunday evening. He added that “this was a personal decision driven by privacy concerns and significant challenges he faced in separating himself from his business interests.” Bilden’s vast financial holdings, many of which he earned in Hong Kong, would have made it difficult for him to survive the scrutiny of the Office of Government Ethics, USNI News reported. Bilden, who built his career in Hong Kong with the investment firm HarbourVest, was a surprise pick for the Navy post but had been Mattis’ preferred candidate. Yet like billionaire investment banker Vincent Viola, who withdrew his nomination to be secretary of the Army earlier this month, Bilden ran into too many challenges during a review by the Office of Government Ethics to avoid potential conflicts of interest, the sources said.
This post was published at Zero Hedge on Feb 26, 2017.
A close look at the ’86 tax reform shows why tax reform may not get done this year. As BofAML’s Ethan Harris notes, “we are skeptical.” Significant tax reform creates winners and losers, which may make it hard to find a “coalition of the willing.” Via BofAML, Is it a done deal? By some accounts, tax reform is more or less a done deal. After all, Republicans control both the executive and legislative branches of government so reform could pass without one Democrat vote. In particular, Republicans can use the ‘reconciliation’ process to avoid a filibuster and pass a plan with just 51 votes in the Senate. House Republicans already have a specific plan and the President has already suggested a less fleshed out alternative. The leadership in the House is planning to focus first on repealing the Affordable Care Act (ACA), then writing the tax reform bill after the spring budget passes and enacting the plan by the August recess. We are skeptical: even with the Republican sweep last fall, tax reform could prove taxing. Any reform requires that some groups give up hard won tax breaks in exchange for lower rates. This creates a complex web of winners and losers, causing splits both across parties and within parties. Here, we draw nine history lessons from the 1986 tax reform. Nine reasons tax reform is tough #1 A proclivity for Swiss cheese: The US political system, with the strong influence of lobbyists, seems to have a natural tendency to add complications to the tax code. Loopholes had been steadily added to the tax system in the run-up to 1986 reform, and loopholes have been creeping back into the tax code ever since the reform. Also recall that the ’86 reform put the top rate at 28%, but it has since climbed back to 39.6%. Turning our ‘Swiss cheese’ tax system into ‘American cheese’ will likely be difficult.
This post was published at Zero Hedge on Feb 24, 2017.
The biggest banks on Wall Street, both foreign and domestic, have been repeatedly charged with rigging and colluding in markets from New York to London to Japan. Thus, it is natural to ask, have the big banks formed a cartel to rig the prices of their own stocks? This time last year, Wall Street banks were in a slow, endless bleed. The Federal Reserve had raised interest rates for the first time since the 2008 financial crisis on December 16, 2015 with strong hints that more rate hikes would be coming in 2016. Bank stocks never do well in a rising interest rate environment because their dividend yield has to compete with rising yields on bonds. Money gravitates out of dividend paying stocks into bonds and/or into hard assets like real estate based on the view that it will appreciate from inflationary forces. This is classic market thinking 101. Bizarrely, to explain the current run up in bank stock prices, market pundits are shoving their way onto business news shows to explain to the gullible public that bank stocks like rising interest rates because the banks will be able to charge more on loans. That rationale pales in comparison to the negative impact of outflows from stocks into bonds (if and when interest rates actually do materially rise) and the negative impact of banks taking higher reserves for loan losses because their already shaky loan clients can’t pay loans on time because of rising rates. That is also classic market thinking 101. Big bank stocks also like calm and certainty – as does the stock market in general. At the risk of understatement, since Donald Trump took the Oath of Office on January 20, those qualities don’t readily come to mind in describing the state of the union. Prior to the cravenly corrupt market rigging that led to the epic financial crash in 2008 (we’re talking about the rating agencies being paid by Wall Street to deliver triple-A ratings to junk mortgage securitizations and banks knowingly issuing mortgage pools in which they had inside knowledge that they would fail) the previous episode of that level of corruption occurred in the late 1920s and also led to an epic financial crash in 1929. The U. S. only avoided a Great Depression following 2008 because the Federal Reserve, on its own, secretly funneled $16 trillion in almost zero interest rate loans to Wall Street banks and their foreign cousins. (Because the Fed did this without the knowledge of Congress or the public, this was effectively another form of market rigging. Had the rest of us known this was happening, we also could have made easy bets on the direction of the stock market.)
Goldman’s former President and COO, who was recently picked to be Trump’s chief economic advisor as head of the National Economic Council, will recuse himself from any matters directly involving his former employer, the White House told the Financial Times. The topic emerged when the FT learned that the former “#2” at Goldman was spearheading Goldman’s lobbying at the US derivatives regulator on rules prompted by the role swaps contracts played in the 2008 financial crisis. As president of Goldman Sachs, Cohn attended four meetings in 2015 and 2016 with top officials at the CFTC to discuss the swaps rules mandated by the sweeping Dodd-Frank reforms, according to meeting records. As the FT adds, Cohn’s most recent CFTC meeting as a Goldman representative was on February 19 2016, according to the records. On the same day Trump was campaigning in South Carolina, where he mocked Ted Cruz and Hillary Clinton by saying Goldman Sachs had ‘total control’ over them. He ended his campaign by airing an anti-Wall Street ad that displayed an image of Goldman chief executive Lloyd Blankfein as Mr Trump talked of ‘a global power structure that is responsible for the economic decisions that have robbed our working class’.
This post was published at Zero Hedge on Feb 23, 2017.
President Trump’s nominee to head the Securities and Exchange Commission, Walter J. (Jay) Clayton, a law partner at Sullivan & Cromwell, has represented 8 of the 10 largest Wall Street banks as recently as within the last three years. Clayton’s current resume at his law firm is somewhat misleading. It lists under ‘Representative Engagements’ in ‘Capital Markets/Leveraged Finance’ the following: Initial public offering of $25 billion by Alibaba Group Holding Limited; Initial public offering of $190 million by Moelis & Company; Initial public offering of $2.375 billion by Ally Financial. All three of the above IPOs occurred in 2014 – less than three years ago. A quick check of the prospectuses for the IPOs that were filed with the Securities and Exchange Commission shows that Clayton, as a law partner at Sullivan & Cromwell, was representing the underwriters in the offering, which include the largest Wall Street banks. Put the three deals together and you have 8 of the 10 largest banks on Wall Street being represented by the SEC nominee within the past three years. These are the same banks that are serially charged by the SEC for increasingly creative means of fleecing the public. If that’s not enough to conflict Clayton out of consideration to Chair the SEC post, then conflicts of interest have lost all meaning within the legal lexicon of the United States.
The 2016 Summer Olympics in Brazil cost Brazilian taxpayers $4.6 billion, conservative estimates show. But once related expenses covered by the Brazilian government are factored in, the overall costs hit the $12 billion mark, which equates to about 0.72 percent of Brazil’s national budget. Prior to the Olympics, however, the Brazilian government had already spent BR$39.5 billion on infrastructure, or about $12 billion. Stadiums and urban projects designed to ensure the country was ready for the sports event were built, but aside from the events scheduled for 2014 and 2016, there seemed to be little to no demand for such public investments, which prompted the country to wonder whether the expenses were worth the trouble. Now, as these same structures are left to rot, the documented decay becomes a symbol of government waste, not only because the investments weren’t meant to stand the test of time, but also because the Brazilian government’s lack of concern for the taxpayer is not the main story. It is, in fact, just a footnote. Like many others, the government ignored the economic realities of the country, betting on inflation and cronyism in order to throw an unforgettable party.
This post was published at Zero Hedge on Feb 22, 2017.
On October 13th of last year, in Gettysburg, Pennsylvania, Donald Trump gave a desperate speech at a desperate moment. A week after the surfacing of the infamous “grab them by the pussy” video, Trump presented himself as the common man’s only defense against a vast conspiracy of global financial interests: “There is nothing the political establishment will not do,” he said, “and no lie they will not tell, to hold on to their prestige and power at your expense.” Including running Donald Trump as an anti-corruption candidate! He went on: “For those who control the levers of power in Washington, and for the global special interests they partner with, our campaign represents an existential threat,” Trump said. “It’s a global power structure that is responsible for the economic decisions that have robbed our working class … and put that money into the pockets of a handful of large corporations and political entities.” In conjunction with this speech, which was sold as the “crossroads of history” address (and triggered a new hashtag, #TrumpTheEstablishment), Trump released a 100-day “action plan” that supposedly targeted “special interest corruption.”
The following video was published by The Daily Sheeple on Feb 20, 2017 No conflicts of interest to see here… Jeff Bezos, the owner of Amazon, and the sole owner of the Washington Post has a $600 mil contract with the CIA to provide cloud services to the ‘deep state’. This shouldn’t be surprising to anyone, but is just more evidence to show how rigged the game really is.
The idea of playing by the rules is a tough concept to grasp for some politicians, particularly those with ties to the ever-corrupt city of Chicago. So when David Plouffe, Obama’s former campaign manager and then Chief Policy Advisor for Uber, sent an email to Chicago’s Mayor Rahm Emmanuel seeking assistance in fighting rules that would block Uber from picking up passengers at Chicago’s airports, he probably thought his illegal lobbying efforts would go unnoticed. That said, Chicago’s ethics board had a slightly different opinion on the issue and has decided to slap Plouffe with a $90,000 fine and levied another $2,000 fine on Uber. Apparently Plouffe wasn’t registered with the city as a lobbyist for Uber, a requirement he was undoubtedly familiar with, when he sent the following email to Mayor Rahm Emmanuel: “Assume both of us thought the airport issue was settled and we would never have to discuss again, but unfortunately two significant new hurdles were introduced. Coming to you because of their severity that would prevent us from operating. We were all set to announce Monday we were beginning pickups.”
This post was published at Zero Hedge on Feb 17, 2017.
However, once one-off costs have been stripped out, the company’s underlying profit was better than many experts had predicted. Rolls-Royce agreed to pay 671m to settle corruption cases with U.K. and U.S. authorities and it has written off 4.4bn from currency related contracts. Like many international businesses, Rolls-Royce usually “hedges” its bets to protect itself from fluctuating currency markets, as most international aerospace contracts are priced in dollars, but, as a U.K. company, much of Rolls-Royce’s costs are in pounds. While it underlines the complicated nature of Rolls-Royce’s business – it has a 30bn currency hedging book, designed, ironically, to flatten out volatility, and has unkindly been described as a hedge fund with an engine maker attached.
One of the world’s largest, public hedge funds, Och Ziff, gave active managers around the globel more reasons for concern this morning, when it reported results today which showed distributable earnings of $7.5 million, or one cent a share, in the quarter compared to a loss of $36.1 million, or 7 cents, a year earlier. For the full year, the company reported a loss of $121.3 million from a profit of $251.9 million in 2015. Revenue tumbled from $342.8mm to $281.3mm. However, the flashing red headline is just how much AUM the recent underperformance and legal problems by Daniel Och’s investment vehicle have cost him. As Bloomberg reports, Och Ziff suffered withdrawals of about $13 billion over the last 13 months as the company settled a five-year bribery probe and saw its founder Dan Och singled out by regulators for ignoring red flags and corruption risks.
This post was published at Zero Hedge on Feb 15, 2017.
One of the most favored propaganda tactics of establishment elites and the useful idiots they employ in Marxist and cultural-Marxist circles is to relabel or redefine an opponent before they can solidly define themselves. In other words, elites and Marxists will seek to ‘brand’ you (just as corporations use branding) in the minds of the masses so that they can take away your ability to define yourself as anything else. Think of it this way: Say you want to launch an organization called ‘Movement Blue,’ and you and others have gone through great struggle to grow this organization from the ground up. However, just as your movement is about to achieve widespread recognition, someone else comes along, someone with extensive capital and media influence, and they saturate every outlet with the narrative that your movement is actually more like ‘Movement Red,’ and that Movement Red is a terrible, no-good, bad idea. They do such a good job, in fact, that millions and millions of people start calling you ‘Movement Red’ without even knowing why, and they begin to believe all the negative associations that this label entails. Through the art of negative branding, your enemy has stolen your most precious asset – the ability to present yourself to the public as you really are. Negative branding is a form of psychological inoculation. It is designed to close people’s minds to particular ideas before they actually hear those ideas presented by a true proponent of the ideas. But beyond that, negative branding can also be used to trick groups and movements into abandoning their original identity. For example, the concept of economic freedom for individuals – the freedom from overt government interference or government favoritism for certain people over others, the freedom to compete with ideas and ingenuity to build a better business and a better product, the freedom to retain the fruits of one’s labor – used to be widely referred to as ‘free markets’, as defined by Adam Smith. The very basis of free market philosophy was to remove obstruction and economic oppression from the common man in order to inspire a renaissance in innovation and prosperity. The problem is, you rarely hear anyone but libertarians talk about traditional “free markets” anymore. Though Karl Marx did not coin the term ‘capitalism,’ he and his followers (and editors) are indeed guilty of the pejorative version now used. It has always been Marxist propagandists who have sought to redefine the idea of ‘free markets’ in a negative way, and the use of the term capitalism is how they did it. They have been so effective in their efforts that today even some free market proponents instead refer to themselves as ‘capitalists.’
This post was published at Alt-Market on 15 February 2017.
A very inconvenient connection. Brazil is in the middle of a political and corruption crisis blooming on the verdant pastures of an economic and fiscal crisis that has now produced a second year of recession in a row, with the financial curse of the Olympics still hanging over the country for years to come. Nearly 12 million people were counted as unemployed in December. The number of employed fell to 90.4 million, from 92.1 million a year earlier. The unemployment rate has steadily climbed to reach 12% in December, up from 6.5% in December two years earlier (via Trading Economics):
This post was published at Wolf Street by Wolf Richter ‘ Feb 14, 2017.
Reminder to media: this is 2nd time Flynn's shenanigans have compromised the credibility of @VP. Won't be a 3rd.— Philippe Reines (@PhilippeReines) February 13, 2017
Is it sweet revenge, or just desserts? Gen. Michael Flynn resigned suddenly from Trump’s cabinet after it came to light that the National Security Advisor had not told the Vice President or President about his conversations with Russia regarding sanctions. A scandal has since unfolded, and will continue in the media; Gen. Flynn has fallen on his sword. Via the Guardian: General Michael Flynn has resigned as Donald Trump’s national security adviser after weeks of speculation over his links to Russia turned into days of reporting on the contents of his calls with the Russian ambassador and a day of intense pressure over whether the president could continue to back his pick. But is there more to the inner-workings and behind stage schemes that led to his demise? The reaction from one of Hillary Clinton’s closest advisors, and a retweet from the would-be queen herself, suggests that there may have been some Machiavellian intrigue at work.
This post was published at shtfplan on February 14th, 2017.
In the hint that members of Trump’s administration may be “compromised” by conflicts of interest, the WSJ reports that Trump’s pick for Commerce Secretary, Wilbur Ross Jr, plans to keep millions of dollars invested in offshore entities “whose values could be affected by policies that he implements as commerce secretary.” Ross, the 79-year-old private-equity billionaire has said that if he is confirmed, he will sell at least 80 business assets and investment funds over the next several months. But he plans to hold on to investments in an oil-tanker company and 10 other entities that invest in shipping and real-estate financing, according to federal financial-disclosure and ethics filings. It isn’t clear why Mr. Ross is retaining these 11 assets. One particular assets which will raise eyebrows is a co-investment with the Chinese government’s sovereign- wealth fund in Diamond S Shipping Group Inc., one of the world’s largest owners and operators of medium-range oil tankers, according to its website. Ross’s private-equity firm in 2011 led a group of investors, including state-owned China Investment Corp., which injected a total of about $1 billion into the company. The Chinese fund was still a co-investor in 2014, according to a filing for an intended public offering that was later canceled. Diamond S Shipping Group, which is registered offshore but based in Greenwich, Conn., is private and doesn’t publicly list all its shareholders. The company, which has 33 tankers, didn’t respond to requests for comment.
This post was published at Zero Hedge on Feb 13, 2017.