As President Trump’s “Infrastructure Week” comes to an ignominious end, NIRP Umbrella’s Alex Deluce reminds us that spending money on bridges to nowhere and cities of the future is anything but the stimulating panacea it is talked up to be… Is a Chinese credit bubble in the cards? Well, it will be interesting to see if China’s authorities can get through the unwind of US $3 trillion worth of excess credit and the distressed debt on banks’ balance sheets. From 2009 to 2016, more than 10 trillion of Chinese investment was thrown at infrastructure, ghost cities, and corruption thanks to a helping hand from the Chinese banks and foreign lenders eager to participate in the Chinese growth story. In fact, hundreds of new cities in China are essentially empty. The hope is that rural population someday move in. Roughly 40% of the 300 million Chinese expected to move into a town by 2030 will mostly be moving to smaller cities in the ‘chengzhenhua’ system. As OfTwoMinds’ Charles Hugh Smith recently explained, building bridges to nowhere isn’t just a waste of money in the present; it saddles the economy with productivity-draining costs for decades to come.
This post was published at Zero Hedge on Jun 10, 2017.
#SethRich was a hero#SethRich changed history#SethRich exposed the corrupt Here is my statement > — Kim Dotcom (@KimDotcom) May 23, 2017
As promised over the weekend, Kim Dotcom has delivered his official ‘statement’ on the Seth Rich murder. Unfortunately, it’s a bit light on the details and more of a teaser along with a promise to disclose full details of his relationship with Seth Rich to Special Counsel Mueller in return for safe passage to and from the United States. Here is the full statement as posted to Kim Dotcom’s website: I know that Seth Rich was involved in the DNC leak. I know this because in late 2014 a person contacted me about helping me to start a branch of the Internet Party in the United States. He called himself Panda. I now know that Panda was Seth Rich. Panda advised me that he was working on voter analytics tools and other technologies that the Internet Party may find helpful. I communicated with Panda on a number of topics including corruption and the influence of corporate money in politics. ‘He wanted to change that from the inside.’
This post was published at Zero Hedge on May 23, 2017.
In a move that will surely light the proverbial lightbulb over Donald Trump’s head, Brazilian President Michel Temer, having been officially dragged into Brazil’s massive corruption scandal after a record emerged in which he urged the payment of “hush money”, said on Saturday he would ask the Supreme Court to suspend its investigation into allegations he was also involved in the carwash corruption scheme, vowing to remain in power. Speaking during a televised address on Saturday afternoon, Brazil’s deeply unpopular president, who replaced a just as deeply unpopular president last year when Dilma Rouseff was impeached, claimed the recording that implicated him in the scandal was doctored and said he would file a petition with the Supreme Court to suspend the investigation until it could be verified, the WSJ reported. In the recording cited by Temer, which unleashed a historic crash of the Brazilian stock market and currency on Thursday when news of Temer’s involvement broke, the president can be heard chatting with Joesley Batista, chairman and heir of the beef-and-chicken JBS empire, apparently him his approval to pay the jailed former speaker of the House Eduardo Cunha – the man responsible for Dilma Rouseff’s ouster last year – to buy his silence. Batista, who made the recording and gave it to prosecutors in hopes for prosecutorial leniency against JBS, said the recording wasn’t edited.
This post was published at Zero Hedge on May 20, 2017.
Recall that behind the latest political scandal to grip Brazil, in which president Michel Temer was accused of paying hush money to the jailed former House speaker, Eduardo Cunha (who was responsible for the impeachment of Temer’s predecessor Dilma Rouseff) to keep him from dragging Temer down as well, and which yesterday led to historic losses for the the Bovespa, was a plea bargain by the top executives of Brazil’s meatpacking giant JBS, Joseley Batista and his brother Wesley, which among other things, included an alleged recording of a phone conversation in which Batista told Temer he was paying Cunha to remain silent, to which the president was recorded saying, “You need to keep that up, okay?”
This post was published at Zero Hedge on May 19, 2017.
#protest now in #SoPaulo against #Brazil #Temer caught negotiating kickbacks & for direct elections in the country (photo: Dani Sampaio) pic.twitter.com/t4ojSzwyoe — ana cernov (@anacernov) May 18, 2017
The presidency of Brazil’s Michel Temer, who replaced disgraced and impeached predecessor Dilma Rouseff last summer, lasted about one year without a major corruption scandal. That changed tonight, when Brazil’s O Globo newspaper which was instrumental in exposing the Carwash scandal which ultimately led to Rouseff’s downfall and the arrest and incarceration of countless politicians, reported that the chairman of meatpacking giant JBS secretly recorded his discussion with Temer about “hush money” payments to jailed former House Speaker Eduardo Cunha in return for his silence. The allegations are the latest development in Operation Carwash, a sprawling corruption probe that has implicated many of Brazil’s business and political elite, including some in the president’s own party. Temer has repeatedly denied any wrongdoing. Readers may recall that in a delightfully ironic case study of political irony and power vacuum, Eduardo Cunha, the conservative Brazilian political leader who led the push in 2016 to oust Dilma Rousseff, was sentenced in March to more than 15 years in prison himself, when a Brazil judge found him guilty of corruption, money laundering and illegally sending money abroad, all in connection with the sprawling graft investigation involving the state-run oil company Petrobras, and which Cunha himself used as a pretext to dispose of Rouseff.
This post was published at Zero Hedge on May 18, 2017.
Debt is serfdom, capital in all its forms is freedom. If we accept that our financial system is nothing but a wealth-transfer mechanism from the productive elements of our economy to parasitic, neofeudal rentier-cartels and self-serving state fiefdoms, that raises a question: what do we do about it? The typical answer seems to be: deny it, ignore it, get distracted by carefully choreographed culture wars or shrug fatalistically and put one’s shoulder to the debt-serf grindstone. There is another response, one that very few pursue: fanatic frugality in service of financial-political independence. Debt-serfs and dependents of the state have no effective political power, as noted yesterday in It Isn’t What You Earn and Owe, It’s What You Own That Generates Income. There are only three ways to accumulate productive capital/assets: marry someone with money, inherit money or accumulate capital/savings and invest it in productive assets. (We’ll leave out lobbying the Federal government for a fat contract or tax break, selling derivatives designed to default and the rest of the criminal financial skims and scams used so effectively by the New Nobility financial elites.)
Paycheck to Paycheck GUALFIN, ARGENTINA – The Dow was down 118 points on Wednesday. It should have been down a lot more. Of course, markets know more than we do. And maybe this market knows something that makes sense of these high prices. What we see are reasons to sell, not reasons to buy. Nearly half of all American families live ‘paycheck to paycheck,’ say researchers. Without borrowing, 46% couldn’t raise $400 to cover an emergency. This is at least part of the reason why retail sales dropped for the second month in a row in March. Despite seven years of economic ‘recovery,’ millions of Americans don’t have much money. According to Census Bureau figures, 110 million Americans receive benefits from means-tested federal programs – food stamps, disability, and the like. And according to the Bureau of Labor Statistics, about 125 million Americans have full-time work (with another roughly 112 million without jobs). That means there are only 125 million people in full-time jobs supporting the whole kit and caboodle of the U. S. economy, with a total population of 323 million. At that rate, each full-time worker supports about 2.6 people… including almost one person receiving money from the feds. They are also supporting a government debt of $20 trillion and private debt of another $40 trillion or so. That puts the debt-to-full-time-worker ratio at $480,000. The average salary for a full-time worker is just $48,000. At a modest 5% interest, his share of the debt cost would set him back $24,000 each year. He’d have only the remaining $24,000 to support (1) his own family… and (2) all the malingerers, cronies, and zombies who are drawing government benefits. Obviously, those numbers don’t work. But they explain much of the weakness in the U. S. economy. The feds’ cheap credit keeps moving money (mostly in the form of asset price increases) to the wealthiest ZIP codes… while the average person’s budget gets tighter and tighter.
This post was published at Acting-Man on April 21, 2017.
Reporting from Lake Atitlan, Guatemala… Interpol helicopters swam through the darkness outside my room. Scattered booms of M-80s cracked and whipped the rushing winds in celebration of Semana Santa. Dogs roared. Other strange animals, of which your editor is not yet accustomed to, howled, hooted and growled in vain efforts, it seemed, to beat back the chaos. Saturday evening, as my driver, Ricardo, pulled into Panajachel (the ‘New York’ of Lake Atitlan), so did a swarm of Interpol officers. They came to capture the fugitive ex-governor of Veracruz, Javier Duarte de Ochoa. Coincidentally, those who conspired to help Duarte make his way to Lake Atitlan, according to authorities, did so from Mexico City… from where I just flew in. (For the record, I’ve never seen that man before in my life!) Six months ago, Duarte resigned from his position as governor of Veracruz to, according to him, ‘fight the corruption charges’ made against him. (Racketeering, theft, money laundering, bribery… you know, the usual) A few days later, he vanished without a trace.
Taxpayers are forced to cover much of the costs of defense attorneys for highly-paid federal managers facing termination or criminal charges, thanks to a cozy deal engineered in part by a law firm whose lobbyists helped draft and gain passage of legislation requiring it, The Daily Caller News Foundation’s Investigative Group (TheDCNF) has found. Lobbyists for the Washington, D. C., law firm Shaw, Bransford & Roth (Roth) – which earns its money representing federal employees who are being disciplined – ‘proposed’ and secured passage of the obscure bill Congress passed in 1996, according to the website of a group connected to the firm. That bill requires taxpayers to pay for legal insurance for management-level employees. Roth lawyer Anthony Vergnetti then left the firm to launch the Federal Employee Defense Services (FEDS), just such a legal insurance business that, Vergnetti acknowledges, primarily steers clients to Roth when they have insurance claims, and profits off their premiums when they don’t. Roth got its legislative sway by operating through the Senior Executives Association (SEA), which is ostensibly an organic group representing managers, but which is actually founded and run by the law firm’s partners and employees, as TheDCNF showed last year. SEA collects dues from members and pays lobbyists from Roth to conduct legislative advocacy, according to lobbying disclosures.
Investment Research Dynamics is pleased to present another guest post by Stewart Dougherty. I wanted to preface Stewart’s formal essay with some thoughts he shared with me in our email exchanges leading up to his latest essay: I haven’t shared with you one of the most important tenets of Inferential Analytics … namely, that the universal human condition is addiction. Addiction comes in hundreds of forms. Two of the most powerful are to money and power. HRC is addicted to both. She simply cannot let go of her presidential ambition, or her greed. I must admit, when I saw her interviewed the other day regarding Syria, she looked terrible. Her legs looked as if they were about explode out of her pants, which were stretched to snapping. She looked like a human sausage. I thought her doctors would have been reversing her obesity by now, but apparently not. Among her other addictions, she is addicted to food, and is a glutton [IRD: she’s also an alcoholic]. Mentally, she is a complete mess. So I could be wrong … if she cannot get her gluttony under control, she cannot get to 2020. She simply will not have the required stamina, and could croak at any time. My assumption is that when she smells Trump’s blood in the water, she will become so galvanized that she will get the gluttony under control, even if it’s only to get through the election. They will make Obama her running mate, if that’s what’s required to get her across the finish line. Then he can effectively have a third term, while she vegetates in a food coma.
There is a certain nagging annoyance that one gets when they see something in print that they know is just wrong, and write response to it, with documentation, in order to correct it. And then for whatever cause including fat-fingered error, the comment is moderated into oblivion. If it was an opinion piece then fine. Opinions are not worth all that much. But if it is a straight up factual correction, that is a bit annoying when the original in the media was designated to reinforce some point that one feels is a bit unjust. So here are two recent example of things that were just wrong that appeared without correction in the mainstream media. From Jeri-Lynn Scofield over at Naked Capitalism who picked up this piece in the NY post: Snooki inspires legislation to limit state university speaker fees NY Post. Moi: Speaking as a born and bred Jersey girl, I applaud the state legislature’s action. Nice to see the state of my birth lead the way in something other than corruption or toxic waste. And about time – $32K to hear Snooki speak at the Rutgers commencement? Are the administrators nuts? And the proposed $10k cap is too high. Why should any speaker receive more than expenses and a modest honorarium, e.g., $1K – which incidentally, anyone with any class would immediately donate back to the university. I don’t normally read the Post, except perhaps for financial pieces by John Crudele, so I was glad to see this at a site where I do read on occasion. This is no knock on Jeri=Lynn whose major point remains intact, that commencement fees may be far too generous. And as an old fogey, it seems to me to be a correct sentiment about paying far too much money and attention to these reality tv stars, our current President notwithstanding.
An investigative reporting coalition recently released a report alleging a multi-billion dollar money laundering operation that has affected hundreds of banks and companies in 96 countries including the repeat offender, HSBC. In 2012, HSBC, one of the world’s largest banks, settled with the U. S. Government, avoiding criminal prosecution of its executives, for helping to launder money for Mexican drug cartels as well as Al Qaeda. According to the US Senate’s report, which investigated the matter, HSBC provided a ‘gateway for terrorists to gain access to U. S. dollars and the U. S. financial system.’ Loretta Lynch, while serving as the U. S. District Attorney in NY, said HSBC engaged in a ‘sustained and systemic failure to guard against the corruption of our financial system by drug traffickers and other criminals and for evading U. S. sanctions law.’ As a result of the criminal charges for money laundering and admitted guilt in four counts against the global banking firm – the megabank was let off with a slap on the wrist. ‘HSBC has agreed to forfeit 1.256 billion dollars, the largest forfeiture amount ever by a financial institution for a compliance failure,’ Lynch stated.
It’s no secret that there is a concerted effort underway to do everything possible to remove President Donald Trump from office. From Russian ties to business conflicts of interests, both Democrats and Republicans are actively working to find chinks in the President’s armor. But for those with hope of change in their hearts, Democrat Senator Diane Feinstein says there is a possibility that Trump will eventually remove himself from office by filing his own resignation. Speaking to a crowd during a town hall-style Questions and Answers session, Feinstein was asked how Congress is going to deal with Trump’s alleged illegal activities: Journalist: We don’t know what’s happening but we know that he is breaking laws every day, he’s making money at Mar-a-lago, he’s getting copyrights in China, he has obvious dealings with Russia, the Dakota pipeline… there’s some many things that he’s doing that are unconstitutional… how are we going to get him out? Feinstein: We have a lot of people looking at this… Technical people… I think he’s going to get himself out… I think sending sons to another country to make a financial deal for his company and then have that covered with government expenses… I think those government expenses should not be allowed.. we are working on a bill that will deal with conflict of interest… it’s difficult…
This post was published at shtfplan on March 18th, 2017.
Literally no one knows the true ‘value’ of equity research, not even the investment banks that are selling it. Up until now, equity research has been treated as a ‘freebie’ given away to institutional clients in return for trading commissions but that is all about to change thanks to the European Union’s MiFID II regulations, which require asset managers to separate trading commissions from investment-research payments. Unfortunately, at least for the Investment Banks of the world, while the cost of generating equity research may be substantial, it turns out that the true ‘value’, as defined by institutional clients’ maximum willingness to pay for reports, may be much less. Which is shocking given the creativity required to constantly generate new variations of daily reports politely suggesting that you “Buy The Fucking Dip.” As Bloomberg notes today, the regulatory change slated to take effect next January could cost the I-banks $300 million in fees. Asset-managers in Europe and the U. S. will probably cut more than $300 million from research budgets in anticipation of regulations aimed at rooting out conflicts of interest in the market for investment information. That’s according to a survey of 99 fund managers and traders conducted by consulting firm Greenwich Associates, which assessed the shake-up coming to the multi billion-dollar market for investment research over the next year. The European Union’s MiFID II regulations, which require asset managers to separate trading commissions from investment-research payments, will have a ‘clearly negative’ impact on the amount of commission money that is spent on research and advisory services, according to the Stamford, Connecticut-based firm’s findings released Tuesday. While the budget cuts will be ‘relatively modest’ at individual asset-managers, research providers across the board fear the new law will prompt ‘a substantial decrease’ in buy-side spending.
This post was published at Zero Hedge on Mar 15, 2017.
New revelations from Wikileaks’ ‘Vault 7′ leak shed a disturbing light on the safeguarding of privacy. Something already known and largely suspected has now become documented by Wikileaks. It seems evident that the CIA is now a state within a state, an entity out of control that has even arrived at the point of creating its own hacking network in order to avoid the scrutiny of the NSA and other agencies. Reading the revelations contained in the documents released by WikiLeaks and adding them to those already presented in recent years by Snowden, it now seems evident that the technological aspect regarding espionage is a specialty in which the CIA, as far as we know, excels. Hardware and software vendors that are complicit – most of which are American, British or Israeli – give the CIA the opportunity to achieve informational full-spectrum dominance, relegating privacy to extinction. Such a convergence of power, money and technology entails major conflicts of interest, as can be seen in the case of Amazon AWS (Amazon’s Cloud Service), cloud provider for the CIA, whose owner, Jeff Bezos, is also the owner of The Washington Post. It is a clear overlap of private interests that conflicts with the theoretical need to declare uncomfortable truths without the need to consider orders numbering in the millions of dollars from clients like the CIA. While it is just one example, there are thousands more out there. The perverse interplay between media, spy agencies and politicians has compromised the very meaning of the much vaunted democracy of the land of the Stars and Stripes. The constant scandals that are beamed onto our screens now serve the sole purpose of advancing the deep interest of the Washington establishment. In geopolitical terms, it is now more than obvious that the deep state has committed all available means toward sabotaging any dialogue and dtente between the United States and Russia. In terms of news, the Wikileaks revelations shed light on the methods used by US intelligence agencies like the CIA to place blame on the Kremlin, or networks associated with it, for the hacking that occurred during the American elections.
Rather than bemoan the inevitable failure of centralized “fixes,” let’s turn our attention and efforts to the real solutions: decentralized, networked, localized. Those looking for centralized solutions to healthcare, jobs and other “macro-problems” will suffer inevitable disappointment. The era in which further centralization provided the “solution” has passed: additional centralization (Medicare for All, No Child Left Behind, federal job training, Universal Basic Income, central banking “free money for financiers”, etc.) have all entered Diminishing Returns. The systemic costs of centralization–corruption, cronyism, soaring prices, declining quality, over-reach, insider rackets, regulatory capture by corporations and oligarchs– are soaring as the benefits of centralization plummet. ObamaCare was the penultimate flowering of centralization: every self-serving healthcare cartel and racket had a say in the centralized sausage-making, and the results were entirely predictable: highly profitable to the healthcare cartels and rackets, and soaring costs that rendered the program unaffordable.
It is barely seven weeks since Donald Trump became the 45th President of the United States. Perhaps too early to figure out the details of America’s foreign policy during his presidency. However, some broad contours of his policies are taking shape, which may provide pointers to what he is likely to do in the next four years. These pointers are based partly on what Trump said during his election campaign and partly on what has happened since he became President. Actually, quite a lot has happened in the last seven weeks or so, including considerable turbulence in US domestic and foreign policy. Before proceeding further, it may be useful to recall that Trump’s victory in the Nov. 2016 elections was unexpected. Most opinion polls and the mainstream media (MSM) predicted victory for Hillary Clinton, who was the candidate of the US Establishment and the ‘Deep State’ (DS), which includes the military-industrial complex, the intelligence agencies, the MSM, Wall Street, and the Jewish Lobby. The DS is a permanent, unelected, group of institutions, lobbies, and individuals which wields enormous power from behind the scenes and continues to do so irrespective of who is the President and which party controls the US Congress. It is driven by the quest for money and power, among other things. The present DS began taking shape almost thirty-five years ago when Jimmy Carter was President. There was a DS before that too, going back to the 1950s, which came into existence after the Second World War. However, it was much less powerful and entrenched than the present one. John F. Kennedy tried to defy it but did not succeed. Some believe he paid for it with his life.
Since 2002, the Republic of Turkey has been ruled by the Justice and Development Party (or AKP), founded Recep Tayyip Erdoan and other prominent figures hailing from Necmettin Erbakan’s Welfare Party (or Refah Partisi, better known under the acronym RP) that had made Islamist politics mainstream in 1990′s Turkey. At first, Erdoan and his henchmen appeared to respect the rule of law and the political traditions established by Mustafa Kemal Atatrk (1881-1938) and his followers (colloquially known as Kemalists, adhering to the ideology of Kemalism). The economic boom of the early AKP years and the concomitant political clout have allowed AKP-led Turkey to go down a post-Kemalist path into distinctly Muslim waters where authoritarianism and Ottoman nostalgia have managed to seduce the bulk of the Turkish population. In reality, the economic boom overseen by the AKP was nothing but a mirage, after all, largely financed by borrowed money and extreme privatization – ‘a flood of near zero-interest foreign capital.’ At present, the Turkish economy appears to be in the doldrums, with unemployment currently at 11.8%, the highest level reached since March 2010 according to the Turkish Statistical Institute (or TK in acronymized Turkish). The well-respected Turkish economist Taner Berksoy, for example, opines that the Turkish economy will experience a major downturn this year, in spite of the government’s encouragement packages, citing internal political instability as well as geopolitical risks, including Syria’s not-so civil war next door, and a general slowing down of the global economy.
The Sales Managers Index (SMI) is one of the earliest monthly indicators of Indian economic activity. February’s data shows the catastrophic after-effects of the December demonetization policy which was intended to crack down on corruption and ‘black money’. The February Headline SMI has fallen to an index level of 60.2 in unadjusted terms, the lowest level in over 3 years. *** Managers are reporting a big drop in monthly sales for both the consumer and industrial sectors, with small to medium size businesses that predominantly deal with cash transactions, being hardest hit.
This post was published at Zero Hedge on Mar 3, 2017.
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.