Trump’s Budget Brinkmanship Soured Sentiment

The same old tactic! Donald Trump again plays his budget brinkmanship, threatening a government shutdown if the Congress refuses to approve funding to build the border wall with Mexico. Market sentiment soured, just a day after it was lifted by comments from US Treasury Secretary Steven Mnuchin and Senate Majority Leader Mitch McConnell regarding the increase of the debt ceiling.

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Bezos Vs Putin – Who Will Be The First Trillionaire?

Authored by James Durso via TheHill.com,

Amazon founder Jeff Bezos is the one of the world’s richest men, and he may become the first trillionaire. But some think Russian President Vladimir Putin’s alleged $200 billion fortune surpasses Bezos’ paltry $90 billion. Who is really #1?

It depends how you count.

First, the numbers are dodgy.

Putin critic Bill Browder, once Russia’s largest foreign investor, says Putin has a $200 billion fortune (compared to Russia’s $1.6 trillion GDP). Browder was ejected from Russia in 2005 after being designated a "threat to national security" and said of his activism, “I was not going after his [Putin’s] enemies, I was going after his [Putin’s] own financial interests.”

He hasn’t produced any proof of the $200 billion other than his “belief,” but his humiliating ejection from Russia and the death in prison of hi­s lawyer, Sergei Magnitsky, might be related.

Second, no one manages $200 billion by themselves. If Putin “had” $200 billion he would demand it be managed well, and that means managed as a portfolio. A portfolio similar in size to Putin’s is Warren Buffet’s Berkshire Hathaway with a total equity of $283 billion. What do you do with $283 billion? You buy things like a railroad or large, visible positions in the airline sector. (And after all that, Buffet still has $100 billion in cash left over.) Managing all that money requires lawyers and financial specialists who are world-class at managing money and keeping their mouths shut. Forever.

The claim that Putin is richest man in the world rests on the assumption that he has front men managing his money. How easy is to do that and not be noticed? Well, for comparison, Prince Alwaleed Bin Talal Alsaud of Saudi Arabia is worth $17.8 billion. But according to The Economist, “his sums don’t add up,” in part because he could be fronting for others members of the Saudi royal family. We can infer from this that Putin would need a herd of billionaires to do his bidding as his alleged fortune is almost 12 times larger than Alwaleed’s, while he has managed to maintain more secrecy than any Saudi royal.

You have to go back in Russian history to know how Putin manages his assets.

Back one hundred years in fact, to the reign of Czar Nicholas II when the wealth of the Romanovs was estimated to be $45 billion (in 1917 dollars) and it was “impossible to separate Czar Nicholas II's wealth from the state's.” Putin probably has a few billion somewhere just to oil the wheels, but who needs bank accounts when the assets of the state are yours?

Like all politicians, Putin probably considers himself immortal. But he also probably remembers what happened to the families of Soviet officials who were purged: if they were lucky they survived their sentence to the Gulag. Which brings us to Putin’s friends and their children, the Kremlin juniors.

Putin’s closest friends from St. Petersburg, such as Gennady Timchenko and Yuri Kovalchuk, the largest shareholder in Bank Rossiya, are reputed to be some of the sources of Putin’s wealth. As such, they were sanctioned by the U.S. in the wake of Russia’s seizure of Crimea but will likely stand firm because they believe in Putin and they know what happened to those in the first generation of oligarchs who wavered.

Nikolai Shamalov is a Putin friend and co-founder with Putin and others of The Ozero (Lake) Cooperative, a development near St. Petersburg. (As Putin friends go, you don’t get closer than an Ozero owner.) His two sons, Yury and Kiril, went on to important positions in state-influenced companies, and Kiril married Putin’s daughter Katerina at a resort owned by Yuri Kovalchuk. The couple is reportedly worth $2 billion.

Russia’s first post-Soviet ruling class may expire peacefully with substantial assets in the hands of their children. Do they have more money than Bezos? It’s hard to tell, but it doesn’t matter if you have the power.

As he shuffles off this mortal coil, the unrepentant Chekist will smile knowing he beat them all.

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Watchdog Group Files FOIA Request For Mnuchin’s Flight Logs After Wife’s Instagram Spat

Steve Mnuchin's bombshell of a 'trophy wife', Scottish actress Louise Linton, is about to learn that there are consequences for snarky, condescending social media rants...well, for Republicans and their immediate family anyway. 

Apparently Linton's now-infamous Instagram post yesterday responding to a social media troll has sparked the interest of a watchdog group called Citizens for Ethics and Responsibility in Washington (CREW) who has now filed a FOIA request for all of Steve Mnuchin's travel records.  Among other things, CREW seems to be alleging that Mnuchin and Linton planned their usage of a government plane around this week's eclipse.

Per CREW's website, the FOIA request seeks the following:

CREW requests:

 

1.  copies of all records concerning authorization for and the costs of Treasury Secretary Steven Mnuchin’s use of a government plane to travel to Lexington, Kentucky on Monday, August 21, accompanied by his wife Louise Linton.

2.  copies of all records concerning authorization for and the costs of Secretary Mnuchin’s use of a government plane for any purpose since his appointment as Treasury Secretary.

 

On August 21, 2017, Secretary Mnuchin and his wife Louise Linton travelled to Lexington, Kentucky, purportedly for the Secretary to present remarks along with Senate Majority Leader Mitch McConnell at a luncheon sponsored by the Louisville chamber of commerce, Greater Louisville Inc. Afterward, Secretary Mnuchin and his wife “headed to Fort Know…to tour the bullion reserve at the Army post and view the eclipse.”

 

The requested records would shed light on the justification for Secretary Mnuchin’s use of a government plane, rather than a commercial flight, for a trip that seems to have been planned around the solar eclipse and to enable the Secretary to secure a viewpoint in the path of the eclipse’s totality. At a time of expected deep cuts to the federal budget, the taxpayers have a significant interest in learning the extent to which Secretary Mnuchin has used government planes for travel in lieu of commercial planes, and the justification for that use.

And here is the full FOIA request:

 

Sorry, Louise...snark and beauty may have their career benefits in Hollywood but in Washington D.C., particularly when you're a member of a Republican administration completely hated by the Deep State, they only serve to increase the size of the target on your back.

* * *

For those who missed it, below is our post from yesterday on Linton's Instagram rant...complete with our thorough 'research' on her career 'accomplishments.'

As was always likely, Treasury Secretary Mnuchin's wife Louise Linton has been forced to apologize for her Marie Antionette moment... A short and to the point statement read...

"I apologize for my post on social media yesterday as well as my response. It was inappropriate and highly insensitive."

We are sure that will satiate the twitter hordes that just got confirmation of everything they believed about 'the elites'.

*  *  *

As we detailed earlier, Treasury Secretary Steve Mnuchin's 36-year-old (he's 52 btw) trophy wife Louise Linton has landed herself in a bit of hot water this morning after an epic social media rant against a taxpayer who took issue with one of her Instagram posts.

Apparently @jennimiller29 didn't appreciate Linton hastagging her entire expensive wardrobe (including #rolandmouret, #tomford, #hermesscarf, and #valnetinorockstudheels) while traveling on a taxpayer funded private plane, during her husband's trip to "check" if the gold at Fort Knox is still there, which prompted the following snarky comment:

"Glad we could pay for your little getaway."

And while most folks have learned to simply ignore the social media trolls, Linton apparently has not...which is great news for everyone else because it prompted the following epic rant in reply:

“Cute! Aw!!! Did you think this was a personal trip?! Adorable! Do you think the US govt paid for our honeymoon or personal travel?! Lololol. Have you given more to the economy than me and my husband? Either as an individual earner in taxes OR in self sacrifice to your country? I’m pretty sure we paid more taxes toward our day ‘trip’ than you did. Pretty sure the amount we sacrifice per year is a lot more than you’d be willing to sacrifice if the choice was yours. You’re adorably out of touch. Thanks for the passive aggressive nasty comment. Your kids look very cute. Your life looks cute. I know you’re mad but deep down you’re really nice and so am I. Sending me passive aggressive Instagram comments isn’t going to make life feel better. Maybe a nice message [sic], one filled with wisdom and hunanity [sic] would get more traction. Have a pleasant evening. Go chill out and watch the new game of thrones. It’s fab!”

Others quickly chimed in: “Quite the populist hashtags on Louise Linton’s Instagram (Mnuchin’s wife), following her taxpayer-funded day trip to Kentucky,” joked Matt McDermott, a pollster and Associate Director at Whitman Insight Strategies.

“Curiously this Instagram post is no longer available. F–king hedge funders,” wrote one Twitter user. “Louise Linton is a hideous person, growing fat off of our tax dollars,” another said.

At one point during the evening, someone even went so far as to change Linton’s Wikipedia page to reflect her IG comment. “Never forget she posted this on Instagram,” the page read as of 10:30 p.m.

Alas, in the end, it seems that only the President is permitted to post outlandish social media rants as Linton's post has since been deleted and her account turned private.

Finally, since we know this is the only reason you clicked on this post anyway...here you go:

Linton

Link for Linton's Maxim photoshoot

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Paul Brodsky: “Sorry, It Had To Be Said”

Submitted by Paul Brodsky from Macro Allocation

Being Here

     “As long as the roots are not severed, all is well. And all will be well in the garden.”

      - Chauncey Gardner (Chance, the Gardner)

This piece takes a roundhouse swing at politics, real and imagined, and discusses critical economic issues that politicians should actually apply a little intelligence to, but are not. Capitalism will ultimately set things right, but it will have to overcome the political dimension’s best efforts to ignore real issues.

The Real Deal

An important character trait for wealth creation today seems to be incuriosity – find out what’s working, hop on board, enjoy the ride and don’t ask questions. Growth and value metrics seem to matter less than they used to, and so investors have turned their gaze to macroeconomics and, gulp, politics.

We think investment-related political discussions that handicap the likelihood of new pro-growth fiscal, tax, trade and regulatory policies in the US are off-base and have taken on too much importance. They do not promise sustainable support for the US economy or markets given a few twenty-first century realities:

  • Full value: the scale of financial markets has already become quite big relative to output.
  • Financial asset price appreciation now reflects a) short-term balance sheet management and b) price deflationary innovation, rather than growth in the sustainable capital stock.
  • There is no longer such a thing as a domestic economy, even if economic initiatives help shift domestic investment and consumption. Global goods and service prices, and trade responses from well-organized foreign economies, tend to quickly offset domestic stimulus programs.

Late cycle economic initiatives, such as those discussed by Mr. Trump, are ultimately derivative of waning animal spirits. They can be distorted for a time by credit policies and legislation, but they cannot be kept permanently in disequilibrium. Human incentives, along with innovation, productivity and balance sheet digestion, tend to overwhelm the best efforts of policy makers trying to extend trends. After a generation of pulling credit and revenues forward, culminating in rock-bottom borrowing costs; lower taxes, (deficit-funded) government investment and reduced regulatory oversight would be only marginally stimulative.

The combination of ubiquitous leverage, aging Western wealth holders, and deflationary globalization and innovation (including non-sovereign distributed ledgers that allow value to be transferred directly among willing counterparties anywhere across the world), pose the biggest threats to traditional domestic output and inflation models still embraced by global economic policymakers and most investors.

This sets up an epic global economic battle if Americans choose to keep US nation-state sovereignty, which of course they will. It is serious stuff that will require serious leadership and diplomatic skills from the President of the United States, which, as the global hegemon, has the most to lose.

Fake Politics

It should not surprise anyone that Western societies are becoming restless. Trump, Brexit, Charlottesville and, arguably, even radical Islamic terrorism are bi-products of global economic distortions largely created by the unwillingness of the Western political dimension to let the global factors of production naturally settle global prices and wages. (Sorry, it had to be said.)

Donald Trump is a sideshow. His ascension, or someone like him, was inevitable. He may have official authority to behave like the leader of the free world (even if he is unable to do so), but so far he has only shown that virtually anyone can become president. Indeed, one might say Mr. Trump represents a triumph of democracy. Behold the robustness of America: the most powerful nation on Earth is unafraid to elect a cross between P.T. Barnum and Chauncey Gardner!

This is not to say a US president cannot raise and emphasize truly meaningful economic goals and mobilize countries around the world to help achieve them; but it is to say that this President seems to not know or be interested in what those goals might be.

As discussed, the biggest challenges facing the US economy and US labor stem from a distorted global price and wage scale. Mr. Trump’s domestic fiscal, regulatory, tax and immigration goals seek only to raise US output and wages. This cannot be achieved without the participation of global commerce. There is no such thing anymore as a US business that makes US products sold only in the US without being influenced by global prices, wages and exchange rates. The romantic, patriotic “made in the USA” theme does not comport with the reality that the US also seeks to keep the dollar the world’s reserve currency and that maintaining America’s power requires the US to control the world’s shipping lanes. Mr. Trump and his base cannot have one without the other. (Do we really have to articulate this?)

Mr. Trump’s “Being There” presidency is reflecting an inconvenient truth back on a society that has, until maybe now, successfully deluded itself into believing government is functionally the glue holding society together. Though he does not mean to, Mr. Trump is single-handedly demonstrating to groups ranging from idealistic Washington elites to social media zombies to southern white supremacists that Madisonian government has become a dignified cover for the financial, commercial and national security interests that control it. We suspect those interests would rather the reach of their power be less visible.

For the more pragmatic among us, Mr. Trump’s bravado and apparent emotional instability have created the need for a public work-around. He remains tentatively safe to wealth holders because he hired Goldman Sachs to manage financial affairs, and acceptable to globalists because he is deferring foreign policy to the NSC (i.e., “the generals”). Mr. Trump may continue to speak in nationalistic terms, tweet IEDs, and confound media used to personalizing policy; but it seems highly unlikely he will be able to make high yielding unilateral policy decisions. He will likely settle into a pattern of lobbing increasingly ignored tape bombs and hosting elegant state dinners, as an insane king might. Or else, he will be out.

Just as the virtuous Carter followed the vice-ridden Nixon and the strapping Clinton followed the crusty Bush 41, the vulgar Trump predictably followed the cool Obama. Donald Trump is a man-in-full (of himself), and so we would not be surprised if the next president is an empty suit. (We are unsure how literal that can be.) Given our view of the extraordinary structural changes about to impact US and global economies and societies, the most attractive feature for the next presidential could be a really intelligent person who says “I don’t know” fifty times every stump speech. We are ready to vote for a thirty five year-old woman who can code, if only because the president of the US must be at least 35.

The differences separating political platforms are beginning to matter less than they used to. The billions spent in election cycles and beyond accomplishes little except redistributing liquidity from sentimental or idealistic savers from both parties to media company executives and their shareholders. None of it reduces the leverage on the balance sheets of global governments, households and businesses, or starts a conversation about how to reconcile rising asset prices and falling wages in a digital global economy.

Manifestations

At the risk of oversimplifying, the tension between globalization and nationalism has the greatest influence on economic, social and political affairs today. We were reminded of this last week watching Donald Trump channel the misplaced angst and anger of hate groups, mostly displaced and disaffected white men who have been caught directly in the crossfire of efficient global resource distribution.

One need only observe life to understand the game-changing economic impact of globalization:

  • the opening of Chinese and Soviet-bloc economies in the 1990s;
  • trade treaties that created jobs and drove wages higher in developing economies and displaced jobs and drove real wages lower in developed economies;
  • innovation and technologies that reduced price inefficiencies and displaced workers;
  • ubiquitous real-time direct connectivity across the world;
  • an anachronistic, policy-driven global economic system, comprised and coordinated by sovereign politicians, trade representatives and central bankers, that talk domestic but act global.

The disconnection and underlying hypocrisy are obvious to anyone trying to understand increasing social unrest around the world. National and global economies meant to follow a mostly capitalist outline contrived and administered by policymakers, rather than one following free-market incentives, can last only until late-cycle policies become ineffectual and superfluous.

This is occurring now. Consider that wealth is no longer created from production, but rather from financial pricing models and credit creation, credit that must increase at a parabolic pace and can never be extinguished without substantial output contraction and rising unemployment. It cannot last indefinitely.

Central bank purchases and government investment have been fabricating output growth and asset gains. Central banks now hold about $19 trillion in assets on their balance sheets, up from almost zero in 2008, and are now 20 percent owners of global assets. There is also about $20 trillion in US federal debt, up from $9 trillion in 2008. (See debt growth trajectories in Graph 1, below.)

Stocks, bonds and real estate collateralize each other while output growth makes it possible to service debt. It is not a stretch to assume that output and asset prices would have fallen without government and central bank subsidies, and that they will fall in the future if/when global central banks withdraw support.

Print Money, Get Rich!

Hey passive investors, you’re not that smart…unless your calculus has been to front-run the insecurities of elected and appointed officials who would reliably be unable to sit on their hands while economies and markets correct, rather than bending economic and asset space/time continua to perpetuate positive trends (and their careers).

The reality is that real (inflation-adjusted) returns for long-term holders of financial assets cannot be calculated yet. Deflating nominal returns using coincident goods and service inflation measures (e.g. CPI, PCE) compares apples to oranges – asset price changes vs. consumer price changes. It works if you want to know if you could have cashed in your assets and bought a basket of goods and services, but not if you want to know if you will be able to cash them in and then save risk-free in the future (i.e., create wealth).

The problem is that there are too few dollars for each claim on dollars (credit). The credit that collateralizes equity cannot be repaid and, if output declines, cannot be serviced without more credit. Equity and credit prices will fall (deflate) in tandem as debt service and repayment declines, unless more dollars are created and floated to asset holders. This is the process of inflation, and the pace of this, not consumer inflation, is what should be used to deflate nominal asset returns.

The current imbalance separating credit (claims on money) from money itself suggests a doubling, tripling or even quadrupling of the money supply in float (yes, 100, 200 or 300 percent monetary inflation directed towards financial markets). This implies nominal asset prices could rise, but not nearly as much as the purchasing power value of the currency they are denominated in would fall.

We doubt all the new money could be distributed to the investor class and then reinvested back into financial markets, and so we think it is highly likely that nominal equity and debt prices will fall markedly in the future, though we cannot know from what level.

If you have suspected that it has been too easy to get rich by simply being here and investing passively in popular markets, you are right in our humble opinion. To realize gains, most investors will have to cash out their assets and then exchange that cash for money that will not be diluted. It is a mathematical impossibility because: 1) the money does not exist, and 2) by definition, most investors cannot time the market. We doubt any of this will be discussed or debated on the campaign stump…or at Jackson Hole.

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“Bitcoin Saved My Life…”

Authored by Joe Withrow via InternationalMan.com,

Eli’s mother was dying from cancer.

Eli is 33 years old. He owns a shoe store in Caracas, Venezuela. His mother has bone cancer.

Venezuela’s currency is the bolivar. It lost 62% of its purchasing power in February. (It lost 67% the month before that.)

That means prices for everything (food, water, and utilities) increased 62% over a month.

Eli couldn’t afford his mom’s medication. So he turned to bitcoin.

You see, Venezuela has capital controls on traditional safe havens like the U.S. dollar (more on that in a moment). That makes it hard for Eli to buy them.

So he buys bitcoins and sells them to a friend in Colombia - who won’t accept bolivars. The friend then buys cancer treatment and medical supplies for Eli.

Said Eli…

Treating my mother’s cancer would have been very difficult without using bitcoins because my business is going bankrupt and I have a lot of debts, so bitcoins enabled me to stay afloat while our currency is collapsing.

Eli’s not the only Venezuelan using bitcoin to survive.

Arley is from the Táchira state on the border with Colombia. He said he buys drugs in Colombia with bitcoins… then resells them after legally importing them to Venezuela.

Things have gotten so bad that authorities are investigating the theft of zoo animals in the Venezuelan state of Zulia. Police believe people are stealing the animals and eating them. It’s another sign of hunger in a country struggling with chronic food shortages.

As you probably know, Venezuela is on the verge of collapse.

President Nicolás Maduro’s socialist government has eroded 99% of the bolivar’s value. That has created a humanitarian crisis.

Today, I want to show you how Venezuelans are fighting back—using bitcoin.

A Worthless Currency

Venezuela has the highest inflation rate in the world at 741%. The Venezuelan bolivar is basically worthless. You can’t even buy a loaf of bread with a wheelbarrow full of them.

So it’s no surprise that Venezuelans are looking for alternative currencies. And the U.S. dollar is one of their favorites.

But the government has tight controls on currency exchanges. It restricts the number of dollars people can buy… and what they can do with them.

The government-controlled exchanges have created a black market for U.S. dollars.

In 2014, you needed 6.25 bolivars to get $1 on the black market. Today, using the black-market rate, you need 16,000 bolivars to get that same $1.

The rising cost of black-market dollars—and tight government controls on their purchase—has pushed Venezuelans into bitcoin.

Bitcoin volume has surged to record highs in Venezuela since the crisis deepened…

Venezuelans are using bitcoins to buy Amazon gift cards. They need to buy the gift cards so they can order goods and food from the online store in the U.S. and other countries. The goods are delivered by courier to Venezuela.

One Caracas-based bitcoin trader said, “Bitcoin is a way of rebelling against the system.”

Protection Against Chaos

We love bitcoin at the Palm Beach Research Group. Personally, I’ve been mining bitcoin since it was trading at $450 over a year ago.

Bitcoin is up 856% since we recommended it in April 2016. Despite those gains, we still believe it’s a strong investment.

But bitcoin is much more than that. It’s quickly becoming the world’s premier chaos hedge.

That’s why Venezuelans are turning to bitcoin. And they’re not the only ones.

In 2013, Cypriots hoarded bitcoin after the Cyprus government closed banks for a month… and confiscated 6–10% of account holders’ money to “bail in” the system.

And during Greece’s 2015 economic crisis, the government shut down banks for a month.

In both cases, Cypriots and Greeks turned to bitcoin. Bitcoin volume in Europe shot up 286% after the Cyprus bank closures. And bitcoin trades in Greece increased 79%.

As you can see, bitcoin has become a functional currency in real-world situations. That’s why it’s rising in value… and will keep rising.

I recommend buying a small amount of bitcoin every month. Remember, you don’t need to buy a full bitcoin… Just a fraction will do.

One day, you’ll be glad you did… I promise.

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Japanese Bond Market Volume Collapses To Record Low

With volatility at record lows...

The Japanese bond market remains paralyzed with trading volumes hitting record lows as private bondholders no longer dare to even breathe without instructions from the central bank.

Gross purchases of JGBs by investors dropped 22% to 12.6t yen ($115.1b) in July, the least since May 2016, according to the latest data from Japan Securities Dealers Association Monday. On a rolling 12-month average basis, the volume was at an all-time low.

 

As far back as 2014, traders were warning that Japan's bond market is dead... and so is its stock and FX markets...

The Bank of Japan’s unprecedented asset purchase program has released a creeping paralysis that is freezing government bond trading, constricting the yen to the tightest range on record and braking stock-market activity.

 

...

 

“All the markets have been quiet,” said Daisuke Uno, the Tokyo-based chief strategist at Sumitomo Mitsui Banking Corp. “We’ve already seen the BOJ dominance of JGBs since last year, but recently participants in currency and stock markets are also decreasing as those assets have traded in narrow ranges.”

 

...

 

The flows on both the buying side and selling side continue to fall,” said Takehito Yoshino, the chief fund manager at Mizuho Trust & Banking Co., a unit of Japan’s third-biggest financial group by market value. “Falling volatility is a very serious problem for traders and dealers who are unable to get capital gains.”

And now, as more market participants throw in the towel on a rigged, centrally planned market, the result will - no could - be a further loss of market function, and a guaranteed crash once the BOJ and other central banks pull out (which is why they can't). As the Nikkei politely concludes,

"if the bond and money markets lose their ability to price credit based on future interest rate expectations and supply and demand, the risk of sudden rate volatility from external shocks like a global financial crisis will rise."

Translation: in a world where only central banks trade, everyone else is destined to forget forget what trading, and certainly selling, means.

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Russian Ambassador To Sudan Found Dead, Drowned In Own Pool

Eight months after the Russian ambassador to Turkey, Andrei Karlov, was shot dead in broad daylight, on Wednesday yet another Russian ambassador has died. According to Russian news agency RIA Novosti, the Ambassador of the Russian Federation to the Republic of Sudan, Mirgayas M. Shirinskiy, was found dead in his home in Khartoum Wednesday.

Al Arabiya adds that the ambassador was found drowned in the swimming pool at his home.

Employees of the embassy discovered Shirinsky at his residence around 6pm local time, the press secretary of the Sudan mission, Sergey Konyashin, according to RT. The diplomat, who was 62 years old, appeared to have symptoms consistent with a serious heart seizure, Konyashin said, adding that doctors were immediately called to the scene, but were unable to save his life.


Russian embassy in Khartoum

According to Sputnik, before taking his post in Sudan, Shirinskiy served at the Russian embassies in Egypt, Yemen, Saudi Arabia and Rwanda. The diplomat’s body was taken to a morgue in a Khartoum hospital, the spokesman said, adding that procedures are now in place to arrange for its return to Russia.

The Russian Foreign Ministry confirmed the death:

"We inform you with regret that Russian Ambassador to Sudan Mirgayas Shirinsky died in Khartoum on August 23," the Russian ministry said. "Immediately after receiving detailed information from employees at the Russian embassy in Khartoum, we will inform you about the circumstances of our colleague's death," the ministry said.

The Sudanese Ministry of Foreign Affairs also praised Shirinskiy's "friendly and sincere efforts to develop relations between the two countries and their peoples in various fields."

The death of Shirinskiy marks the 9th Russian diplomat who has died in the past year. Here is a list of the more prominent recently deceased Russian diplomats:

  1. Sergei Krivov, 63, a Russian diplomat at the Russian Consulate in New York was found dead on November 8. Krivov served as duty commander involved with security affairs, according to Russian news reports 
  2. Russia's Ambassador to Turkey, Andrei Karlov — assassinated by a police officer at a photo exhibit in Ankara on December 19.
  3. On the same day, another diplomat, Peter Polshikov, was shot dead in his Moscow apartment. The gun was found under the bathroom sink but the circumstances of the death were under investigation. Polshikov served as a senior figure in the Latin American department of the Foreign Ministry.
  4. Russia's Ambassador to the United Nations, Vitaly Churkin, died in New York in May. Churkin was rushed to the hospital from his office at Russia's UN mission. Initial reports said he suffered a heart attack, and the medical examiner is investigating the death, according to CBS.
  5. Russia's Ambassador to India, Alexander Kadakin, died after a "brief illness January 27, which The Hindu said he had been suffering from for a few weeks.
  6. Russia's Consul in Athens, Greece, Andrei Malanin, was found dead in his apartment January 9. A Greek police official said there was "no evidence of a break-in." But Malanin lived on a heavily guarded street. The cause of death needed further investigation, per an AFP report. Malanin served during a time of easing relations between Greece and Russia when Greece was increasingly critiqued by the EU and NATO.
  7. Ex-KGB chief Oleg Erovinkin, who was suspected of helping draft the Trump dossier, was found dead in the back of his car December 26, according to The Telegraph. Erovinkin also was an aide to former deputy prime minister Igor Sechin, who now heads up state-owned Rosneft.
  8. The top official of Russia's space agency, 56-year-old Vladimir Evdokimov, was found dead in his prison cell (where he was being questioned on charges of embezzlement). Investigators found two stab wounds on Evdokimov's body, but no determination had been made of whether they were self-inflicted.

Speaking on CNN's State of the Union in May during the peak of the Trump Russian witchhunt, Former Director of National Intelligence and Trump's arch-nemesis, James Clapper, discussed the "pattern" of dead Russians:

"Well, this obviously has been a curious pattern... We have had difficulty, though, in actually generating an evidentiary trail that could equate convincingly and compellingly in a court of law a direct connection between certain figures that have been eliminated who apparently ran afoul of Putin." Clapper said it is an “interesting pattern. I will put it that way."

 

The wife of one of Putin’s most prominent critics, activist and journalist Vladimir Kara-Murza, said her husband had been poisoned again, after experiencing kidney failure and being put in a medically induced coma in February. She reportedly said the doctors diagnosed him with an “acute poisoning by an unidentified substance."

Perhaps the former head of US intelligence was merely projecting US tactics onto the Russians.

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CNN Gets Steamrolled By Their Own Charlottesville Panel: “The Media Is Not Being Honest”

CNN's Alisyn Camerota got steamrolled by a panel of 6 people brought on to discuss Trump's reaction to the Charlottesville tragedy.  You could tell the panel segment wasn't going to play out the way Camerota envisioned it from the very start when she asked who was "troubled" by the President's response to the violence in Charlottesville and precisely no one raised their hand. Meanwhile one panelist gave this response regarding Trump's controversial "blame on both sides" comment:

“I didn’t see anything wrong with it. I mean he addressed the problem. Let’s face reality, there are problems on both sides."

 

“I think it’s ridiculous to have me choose between Hitler and Stalin which is what I consider both groups are."

 

"The Antifa group to me is totally a very Stalin-ish kind of group.  If you’re willing to set fires and burn places to the ground, that doesn’t seem like a very peaceful group to me.”

Asked to comment on whether there were "very fine people" protesting in Charlottesville, Camerota once again got a surprising response from panelist Daphne Goggins:

"It hasn't been investigated so we don't really know who was out there.  But I'm telling you, I've seen videos of other people who were out there who were not neo-Nazis."

Finally, panelist Robert McCarthy commented on the media's blatant unwillingness to cover the Antifa counter-protests in which people showed up with "helmets, body armor and clubs...ready to do battle."

"That's the night before the clash happened.  The Antifa people didn't show up Friday night, they showed up Saturday.  They came there to do battle.  They showed up with helmets, body armor, clubs... They showed up with ballons filled with urine."

 

"The media is not covering it.  They're only focused on making neo-Nazis and white supremacists out to be Trump supporters."

 

"He said there was trouble on both sides.  Was there not trouble on both sides?  I saw bats on both sides."

Here is a video of the segment courtesy of the Daily Caller:

Why do we suspect that whoever screens the panelists at CNN is about to find himself unemployed?  How is CNN supposed to advance the "Trump's base is turning on him" narrative if panels are being filled with people like this?

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They’re Using Bernie Madoff Math To Hide A Crisis

Authored by Nick Giambruno via InternationalMan.com,

Politicians are always generous with other people’s money… until it runs out.

Near the peak of the late-’90s tech bubble, California’s legislature passed the largest pension increase in its history.

Today, with as much as $750 billion in unfunded public pension debt, California has one of the worst pension situations in the country. But it’s far from alone.

Illinois has a staggering $250 billion in unfunded pension obligations. State pension plans in Connecticut, Pennsylvania, New Jersey, and many other states are taking on water, too.

Unfunded public pension liabilities in the US have surpassed $5 trillion.

Taxpayers Are Stuck With the Bill

There used to be a simple formula for a secure retirement. American workers would work for a big company for decades. Then, at a certain age, they were eligible for a monthly pension check… for life.

Once common, pensions have virtually disappeared from the private sector. Today, less than 4% of companies offer them. It’s another vector in the devalued standard of living of the average American.

Essentially, only government employees get pensions now.

The government isn’t subject to the same constraints as the private sector. So it has no problem promising benefits it can’t afford to pay.

That’s because government revenue doesn’t come from the voluntary exchange of goods or services. It comes from taxes, which it extracts via coercion.

Politicians only care about the next election. So there’s no way to hold them accountable in the long term.

They automatically do the most expedient thing in the short term, like promising extravagant pension benefits. In the long term, their successors have to deal with the consequences.

Naturally, not one of the politicians who voted for California’s record pension increase is still in office.

It’s bad enough that politicians give themselves and other state employees extravagant retirement benefits and stick the taxpayers with the bill.

But the story gets worse…

Government pension plans use all sorts of accounting wizardry that would land someone in the private sector in prison.

Bernie Madoff Math

The single most important number for a pension plan is its assumed rate of return. This is the rate the plan’s investments are expected to make.

As in other areas of life, the government takes special privileges here. It uses accounting practices that the private sector can’t—not legally, anyway.

Essentially, government pension plans choose whatever rate of return they’d like.

Lawrence McQuillan—a senior fellow at the Independent Institute—says that government pension plans “work on the assumption that they’re going to generate returns 25% higher than Warren Buffett every single year into perpetuity.”

These assumptions are totally disconnected from reality.

Government pension plans overestimate investment returns using unrealistically high rates of return. They routinely pull numbers out of thin air.

The results they come up with are insane.

In effect, this artificially shrinks a pension fund’s liabilities, making it look more solvent than it really is.

In other words, the government is using Bernie Madoff math.

This lets politicians contribute less money than the fund needs to be truly solvent. That, in turn, frees up money to bribe constituents for votes, or do whatever else the politicians want.

On average, government pension plans assume about a 7–8% rate of return (even after years of underperformance).

False Assumptions

 

A recent study found that the average 2016 return for a public pension was an awful 0.6%, compared to an average assumed return of 7.6%.At those assumed rates, a dollar invested today would double in around nine years. This rosy assumption allows a pension plan to say, for example, that $25,000 in the fund today will cover a $50,000 obligation in 2026.

California’s public employee pension plan is the largest pension plan in the US. It recently voted to reduce its assumed rate of return from 7.5 to 7% over three years.

The move—which doesn’t go nearly far enough—generated enormous political controversy.

Lowering the rate of return to a more realistic number, if even slightly, means politicians would need to contribute more to a pension fund. That means drastic spending cuts or higher taxes elsewhere.

This is why, in most cases, it’s politically impossible for a government pension plan to stick with anything close to realistic assumptions.

The Biggest Financial Bubble in World History… and Pensions Are Still Broke

In the ’50s and ’60s, government pension funds were, on average, over 90% invested in bonds and cash.

Most importantly, they were structured so that assets matched future liabilities. It was conservative, and it made sense.

That’s not how public pensions look today.

Matching liabilities with safe fixed income investments has become impractical, thanks to the Federal Reserve and the historic bubble it’s created in the bond market.

The economy has been on life support since the 2008 financial crisis. The Fed has pumped it up with unprecedented amounts of “stimulus.” This has created enormous distortions and misallocations of capital, especially in the bond market.

Think of the trillions of dollars in money printing programs—euphemistically called quantitative easing (QE) 1, 2, and 3. In short, the Fed created trillions of dollars out of thin air and used them to buy up bonds, creating an epic bubble.

Meanwhile, with zero and even negative interest rates in many countries, rates are the lowest they’ve been in 5,000 years of recorded human history.

What’s happening in the bond market could not happen in a free market. It’s only possible in the current “Alice in Wonderland” economy created by central bankers.

This is not hyperbole. We’re really in uncharted territory. (Interest rates were never lower than 6% in ancient Greece and ranged from 4 to over 12% in ancient Rome.)

Allegedly, the Fed has done all of this to save the economy.

In truth, it’s warped the economy and turned the bond market into the largest financial bubble in human history.

This, of course, affects pensions.

First, today’s artificially low interest rates make it very difficult to match future liabilities with income from bonds at a reasonable cost. So pensions have had to turn to riskier assets like stocks, real estate, and alternative investments.

With interest rates near all-time lows, bond prices are at an all-time high. That benefits pension plans because it pumps up asset values and makes the funds look more solvent.

But, even with the bond market in a historic bubble…

Even with the stock market at all-time highs and more overvalued than almost ever…

And even with the Bernie Madoff math…

Public pensions are still insolvent.

Despite the eye-watering returns in the bond and stock markets over the past 10 years, pension liabilities have still gone up.

According to Moody’s:

The optimistic "best case" of cumulative 25% investment return would reduce net pension liabilities by just 1% through 2019 year-end because of past bad investment returns and weak contributions. Meanwhile, the "base case" scenario of 19% returns would see net pension liabilities rise by 15%.

This is an unsolvable problem.

Many public pensions are hopelessly insolvent. It will all be apparent in the next market downturn, which probably isn’t far off.

I think we’re headed into an enormous crisis.

Unfortunately, most people have no idea how to prepare.

I think everyone should own some physical gold. Gold is the ultimate form of wealth insurance. It’s preserved wealth through every kind of crisis imaginable. It will preserve wealth during the next crisis, too.

But if you want to be truly “crisis-proof,” there's more to do…

How will you protect yourself when this crisis explodes? New York Times best-selling author Doug Casey and I just released a PDF guide that will show you exactly how. Click here to download it now.

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