The majority of millennials are living paycheck to paycheck.
A recent survey of millennials by HowMuch.net found that 51.8% of those aged 18-34 have less than $1,000 held between bank accounts and cash savings.
As Visual Capitalist's Jeff Desjardins notes, this echoes previous data we’ve seen – not just on millennials, but Americans in general. For example, we know that 14% of Americans have “negative” wealth. We also know that 62% of Americans don’t have emergency savings that could cover a $1,000 hospital visit or a $500 car repair.
Taking that into consideration, let’s dive deeper into this more recent millennial data...Courtesy of: Visual Capitalist
YOUNGER VS. OLDER MILLENNIALS
The broad survey data can be further divided into “younger” and “older” millennial segments: those aged 18-24, vs. those between 25-34.
Based on the survey question, an intuitive expectation would be that younger millennials are much more likely to have less than $1,000 in savings. After all, many of the people in this group would still be in school, and many are struggling withstudent debt.
However, the difference is far less than one may expect. While it is true that 57.6% of the younger demographic has less than $1,000 in savings, the older group is not much better off with almost half (47.1%) of them being in the same boat. This shows that many millennials in their late 20s and early 30s are still not able to generate substantial savings.MALE VS. FEMALE MILLENNIALS
There is also a significant divide between male and female millennials here, with 56.7% of females having less than $1,000 in savings. Compare this number to the male percentage of 46.5%, and it is clear there is a substantial divide between genders.
Lastly, males are also more likely to have a substantial amount stored away in their bank account. According to the survey, 21.5% of males have more than $20,000 of savings, while only 11.9% females can say the same.
I have been writing rather extensively about the ideology of globalism in recent months, primarily because the battle lines between sovereignty and global centralization have never been more defined than they are in 2016. In the past, globalists have often hidden the true motives of their cult; namely the goal of erasing national borders and all remaining vestiges of self governance. Normally, they would only pronounce the great advantages of globalization while dancing around the fact that millions of people will not accept it. Today, however, the globalists have come out in direct confrontation with supporters of sovereignty.
After the Brexit referendum, a new tone appears to have been set. The elites have now entered the mainstream media to state in essence that yes, they are globalists, they want total centralization and they are here to fight a philosophical and/or physical battle with those they call “populists” (also known as conservatives and sovereigns).
When they have discussed globalization in previous years, it has always been presented as some kind of natural progression of events rather than an agenda. The first secret of elitist propaganda is their constant assertion that globalism is “inevitable;” that it is foolish to fight against it because it is the unavoidable future evolution of mankind. The fact is that if globalism is so inevitable, the elites would not need to expend trillions in capital and decades of energy trying to fool the masses into accepting it. If globalism is inevitable, couldn’t the elites simply lay back in their pool-side cabanas, sip their dry martinis and just watch it all unfold on its own?
Instead, the elites have foisted globalism upon the shoulders of the public, and are by some indications preparing for outright war in order to force us “populists” into compliance.
The second secret of elitist propaganda is their strategy to disguise centralization as decentralization. For instance, the new globalist claim is that a shift away from a system in which the dollar is the world reserve currency into a system in which a basket of currencies becomes the world reserve is a move towards a “multi-polar world.” Nothing could be further from the truth.
In reality, the basket currency system the elites are pushing for falls under the umbrella of the IMF’s Special Drawing Rights. Meaning a switch away from the dollar into the SDR will result in even MORE centralized power for the elites. That is not a multi-polar world; it is a uni-polar one.
It is schemes like this that expose the great weakness of globalism as an ideal — the elites cannot accomplish it without using deception and force against innocents. Such a philosophy is a failure by default.
The third secret of globalist propaganda is that they present the system as if it is a “new” idea. This is yet another lie. Globalism is merely another expanded form of centralization (or collectivism), and centralization has been the prevailing tool of cultural control for ages. If anything, the freely elected governments and voluntary tribalism of constitutional Republics is the newest and most advanced social concept in all of human history. Such systems present the potential for lasting decentralization, as long as participants remain vigilant to co-option by globalists.
Sadly, the people of America and the rest of the West have NOT been vigilant for quite some time, and today our experiment in sovereignty is being twisted, eroded and overrun.
Some seem to find new hope in the rise of conservative activism like the U.K.’s Brexit movement. As I explained in my pre-referendum article 'Brexit — Global Trigger Event, Fake Out Or Something Else?', these movements are a step in the right direction, but they have a tendency to underestimate the globalist strategy.
I suspect according to the evidence outlined in the article linked above, as well as the behavior of elites ever since the U.K. referendum passed, that a plan is underway to ALLOW conservatives and sovereign activists marginal victories. Ultimately, in order for the elites to achieve the long-game of total centralization, they need to fully demonize and destroy their philosophical opponents. That is to say, they need to make conservatives and freedom fighters out to be historical monsters, and themselves out to be the heroes of the day. The ONLY way for the elites to win is to fool the masses into accepting and even demanding globalization while casting out conservative principles as dangerous or evil.
But how would they make this possible?
It’s simple, really. They have already set the stage for an international economic and political crisis of epic proportions. Why not let conservatives and sovereigns take over as captains of an already sinking ship, then blame them when there aren’t enough lifeboats to save the passengers?
Following this line of thinking was how I was able to correctly predict the success of the Brexit vote, it is the reason why I have consistently argued that the Fed will continue to raise interest rates in 2016 despite multiple signs of a recessionary downturn, and why I believe Donald Trump will be the next president.
Once instability has run its course, and once the damage is done and the “populists” are blamed, the elites plan to swoop in with globalism as the fix-all.
The question then arises, if this is the strategy being implemented by the globalists, what can be done about it?
As with most conundrums, the problem is often the source identifier of the solution. That is to say, if centralization and the elites behind it is the problem, then decentralization and the removal of those elites from power is the most effective solution. If forced globalization is leading to the ruination of man, then voluntary tribalism may be the cure.
The issue actually has more to do with individual psychology than geopolitics.
Human beings have two inherent psychological qualities that can work together, or they can conflict; the need for individual liberty, and the need for community.
We are social creatures. We can accomplish great feats by working together, but the ideas for these feats are always born in the imaginations of individual minds. Without the group, the success of the individual can be greatly hindered. Without individual minds, the success of any group is impossible.
The elites would have us believe that individual success and community success are mutually exclusive; that we cannot have both. This is simply not true.
Globalists assert that if the individual focuses on his own success, then he cannot focus on the success of the group. This “conceited” self interest, they claim, will sabotage society as a whole and lead to humanity’s destruction. Therefore, under globalism, the individual must sacrifice his freedom of choice and association; he must sacrifice his right to apply his labors how he wishes, so that the group can supposedly thrive.
I would assert the opposite. Because all ideological groups are abstractions and not cultural facts, they are completely dependent on the success of the individual in order to thrive. While the individual may need help from others, he must be allowed to CHOOSE who those people are. He also must be able to CHOOSE how his ideas and efforts are realized. Otherwise, the ideas have no steward, no protector. Under globalism/collectivism, ideas immediately become the property of the group if they are even acknowledged at all, and the group does not think; the group is not capable of thinking. The group only has merit as long as the individuals within it have merit. The group is not real. And so, under the control of a vaporous collective, good ideas usually die.
With globalism as the dominant ideology, individual accomplishment falls and thus, the system itself will eventually fall.
This does not mean that the solution is to end all group interaction or organization so that individuals can go off to to form their own one-man, mini-nation states. If that is what an individual wishes to do then that is all well and good, but failure is just as likely in that scenario as it would be under globalism. Instead, the answer may be a return to tribalism, of a voluntary variety.
Our inherent needs for individual freedom as well as community interaction can in fact work together. The group does not need to supplant the individual to succeed, each member of the group just needs to share the same goals and understand the merits of those goals.
If a person does not understand or respect the goals of that group, then he can easily leave, or refuse to join. As long as it is unacceptable for any group to use force to compel an individual to participate, then there can be no loss of individual liberty. Under this model, we could see the rise of numerous tribes, and tribes within tribes. Some of them fleeting, some of them long lasting. Of course certain universal truths would have to be respected.
The most common argument against tribalism, whether voluntary or not, is the argument that it will lead to so many conflicting interests that chaos and violence is inevitable. Wars over resources and property will erupt, some claim, or society will falter into a dog-eat-dog survival of the strongest Mad Max scenario.
First, I would like to point out that globalization and centralization have not solved any of these problems. Globalism only seems to lead to more efficient war and death, rather than less war and death, and the sides are less defined. Under the global elites, people are constantly pitted against each other over false narratives and false flags. We become pawns that are sacrificed to further their objectives. I hardly see how this is a superior system. The only wars ever worth fighting are against centralizing tyrants.
Second, while tribal conflict is surely possible due to philosophical differences, the promotion of individual freedom, rather than the collective, as the essential element of society makes violent opposition far less likely.
Freedom is a universal inborn psychological construct. Almost all people have a sense of it and its usefulness. In fact, most fundamental moral principles including freedom are shared by people regardless of their cultural backgrounds. The only places in which freedom is not respected are places in which centralizing elites have propagandized and threatened the citizenry. Look at almost any totalitarian system and you will find under scrutiny that globalists helped give birth to these monsters from behind the scenes. When those elites and their influence are removed for a time, there is usually a natural wellspring resurgence of respect for liberty within that society.
Men and women will organize and rally around freedom without being lied to or threatened. There are not many ideologies that can make the same claim. Globalism certainly can’t.
Third, the next objection from skeptics will be that a handful of controllers under globalism would be preferable to tens of thousands of tyrants lording over thousands of fiefdoms. Again, these people just don’t seem to grasp the notion of voluntary community or the effectiveness of individual rebellion.
I would rather face a thousand minor tyrants with minor armies than a tiny cabal of tyrants with a global army. The difference being that it is far easier to erase a tyrant with a hundred men in my way than it is to erase a global tyrant with hundreds-of-thousands of men and a massive surveillance apparatus in my way. In a world where individual liberty is paramount and the people are armed, minor tyrants would be so terrified to pursue power they would likely be dissuaded altogether. The minimal protection they might muster would never be enough to stop every single bullet flying in their direction.
The idea of voluntary community is so foreign to the public today that it would probably need a catastrophe before such a system is ever adopted. But, since the global elites have already taken it upon themselves to create the catalysts for an economic and political crisis, we might as well take advantage and rebuild from the ashes with voluntary community in mind.
The elites never let a good crisis go to waste, maybe we should use the same strategy.
This, of course, requires that the liberty minded not only survive the catastrophe, but also fight back and remove the elites from the picture. There can be no voluntary tribes with the globalists in control of the mechanisms of power. They are themselves, in effect, a bastardization of a tribe that has been allowed through lack of vigilance to subversively and systematically destroy all other tribes. They have convinced much of the world through chicanery that their tribe is the ONLY tribe with merit.
The propaganda only works to a point, however. During any breakdown in normal social order, people invariably create their own social order, and they usually do this by forming small tribes. Families come together, neighborhoods come together, towns come together and so on, and they do this voluntarily, without being aggressively compelled by others. The natural default of human beings is freedom and tribalism; two things which do not necessarily have to conflict. Our natural default has never been to pursue globalism or utter collectivism at the expense of the individual; those kinds of machines are products of the treachery of a power-mad minority.
In the end, globalism is doomed to crash in a ball of flames, but not before the globalists attempt to take everyone else down with them. It would behoove us to start constructing our tribes now, rather than after the situation has become grim in the absolute. Through localized production, alternative trade models, local organization for mutual aid and defense, and the principles of liberty, America could become a network of tribes within a tribe; a self reliant system built around redundancy rather than interdependency.
The globalists? Well, they will try to stop us. But at least at that point the sides will be drawn more clearly. I cannot think of a better war to fight than a war to stop the barbaric trespasses of the global elites. And when it is all over, I look forward to a more complex and “chaotic” society where collectivist streamlining is abandoned for a wild west of voluntary associations. A land where tribes roam free.
Over the years, China has valiantly struggled to convince the international public it will end its debt addiction any minute now, with the Politburo vowing year after year that it would if not delever in the immediate future, then surely limit the issuance of household loans. So far, every such attempt has been a failure, for one simple reason: as goes China's debt, so goes the most important asset in China's economy, its housing stock.
So while there are ample reasons to be skeptical, overnight China's Banking Regulatory Commission unveiled its latest attempt to halt the country's relentless debt load when it imposed limits on lending by peer-to-peer platforms to individuals and companies in an effort to curb risks in one part of the loosely-regulated shadow-banking sector. An individual can borrow as much as 1 million yuan ($150,000) from P2P sites, including a maximum of 200,000 yuan from any one site, the CBRC said in Beijing on Wednesday. Corporate borrowers are capped at five times those levels.
The regulator added, in what we doubt was an attempt to reassure industry watchers, that China had found problems in 1,778 online lending platforms, accounting for 43.1% of total.
China’s authorities are rightfully concerned about defaults and fraud among the nation’s 2,349 online lenders. In December, the country’s biggest Ponzi scheme was exposed after Ezubo, which until then had been China's largest P2P lender, defrauded more than 900,000 people out of the equivalent of $7.6 billion and promptly folded (the response was hardly enthusiastic, as we revealed in a clip from February.)
The measures will probably leave about 200-300 P2P platforms by this time next year, said James Zheng, chief financial officer of Lufax, the top lending platform in China. "That's okay because they're cracking down on all the bad guys," he said at a conference in Hong Kong. "What doesn't kill will make you stronger. That's the case for us." Good luck.
Under the new rules, P2P lenders are barred from taking public deposits or selling wealth-management products and must appoint qualified banks as custodians and improve information disclosure.
“The P2P business is not very strictly regulated yet, but you can see the regulator is taking a step forward,” said Xu Hongwei, chief executive officer of Shanghai-based Yingcan Group, which tracks the industry. Products offered by P2P platforms in China can include anything from loans for weddings, guaranteed against the cash gifts that couples expect to receive, to high-yield lending for risky property or mining projects.
As Bloomberg notes, China’s P2P industry brokered 982 billion yuan of loans in 2015, almost quadruple the amount in 2014 and an approximately 10-fold increase from 2013, according to Yingcan. P2P firms attracted more than 3.4 million investors and 1.15 million borrowers in July, with loans extended at an average interest rate of 10.3 percent, according to Yingcan. Still, despite its torrid growth, P2P lending is still a tiny fraction of the overall loan market, and certainly of the broadest Total Social Financing universe, which infamously saw $1 trillion dollar in aggregate new loans created in the first quarter of 2016, providing a global credit impulse, which has since faded.
In any case, it appears that in this particular case, China is eager to halt this problem before it becomes too big. In April, China’s cabinet launched a campaign to clean up illicit activities in Internet finance, focusing on areas such as third-party payments, peer-to-peer lending, crowdfunding and online insurance. It suspended the registration of all new companies with finance-related names.
And we have our doubts that this latest "debt cap" will last, because earlier today, Peer 2 Peer lender Yirendai, the company which Bloomberg has dubbed "China's answer to LendingClub" plunged 22%, the most on record since its December 2015 IPO, on massive volume, following yesterday's imposed P2P limits. For a sense of scale, YRD created some $680 million in loans in Q2, up 118% Y/Y, with net revenue more than doubling to $110 million, or 140% Y/Y.
Needless to say, the company acts, and is priced like, a growth stock. The problem, as the chart below shows, is that the growth suddenly stopped.
Furthermore, if the company is indeed China's answer to the recently devastated LendingClub, this is just the beginning, as the bubble has now popped with a little help from the government.
So will the CBRC relent, and lift the caps? It depends on just one thing, the only thing that the politburo is more worried about than asset bubbles - social unrest.
If enough people protest, get angry or downright violent as a result of the collapse in P2P stocks, and eventually, the entire industry, or simply are unable to obtain loans elsewhere should the industry falter, then Beijing will promptly undo what it has done. Until then, however, keep an eye on risk levels in China, where suddenly the most permissive marginal source of lending - and this risk asset upside - was just advised ordered to go into a state of near hibernation.
In a refreshing and stark contrast to other universities that have seemingly tripped over themselves to accommodate every silly request from America's pampered Millennials in their never ending quest for "safe spaces," the University of Chicago has sent the incoming class of 2020 a letter making very clear that they will find no "safe spaces" in their intellectual journey at Chicago. The full letter is presented below but here are a couple of the best comments for your reading pleasure:
You will find that we expect members of our community to be engaged in rigorous debate, discussion, and even disagreement. At times this may challenge you and even cause discomfort.
Our commitment to academic freedom means that we do not support so-called “trigger warnings,” we do not cancel invited speakers because their topics might prove controversial, and we do not condone the creation of intellectual “safe spaces” where individuals can retreat from ideas and perspectives at odds with their own.
Just when we thought all hope had been lost, an establishment of higher learning finally steps up to interject some rational thoughts into the public discourse surrounding freedom of expression.
.@UChicago does not:
???? "support so-called 'trigger warnings'"
???? "cancel invited speakers"
???? condone "safe spaces" pic.twitter.com/DH7IVfYZ4U
— Justice Don Willett (@JusticeWillett) August 25, 2016
The letter also directs students to a note it had previously written on freedom of expression...
The full letter can be reviewed in its entirety at the end of this post, but below are a couple of the gems that we particularly liked:
“Education should not be intended to make people comfortable, it is meant to make them think. Universities should be expected to provide the conditions within which hard thought, and therefore strong disagreement, independent judgment, and the questioning of stubborn assumptions, can flourish in an environment of the greatest freedom.”
Of course, the ideas of different members of the University community will often and quite naturally conflict. But it is not the proper role of the University to attempt to shield individuals from ideas and opinions they find unwelcome, disagreeable, or even deeply offensive.
In a word, the University’s fundamental commitment is to the principle that debate or deliberation may not be suppressed because the ideas put forth are thought by some or even by most members of the University community to be offensive, unwise, immoral, or wrong-headed.
For Millennials getting ready start at University of Chicago might we suggest some reading material (here) that we shared a few months back that might help you cope in the absence of "safe spaces" at your new home...
No matter where you go in life, someone will be there to offend you. Maybe it’s a joke you overheard on vacation, a spat at the office, or a difference of opinion with someone in line at the grocery store. Inevitably, someone will offend you and your values. If you cannot handle that without losing control of your emotions and reverting back to your “safe space” away from the harmful words of others, then you’re best to just stay put at home. Remember, though: if people in the outside world scare you, people on the internet will downright terrify you. It’s probably best to just accept these harsh realities of life and go out into the world prepared to confront them wherever they may be waiting.
91% of all US home buying is done by those aged 20-69yrs/old, according to NAR data. In 2015, Millennials (20-35yrs/old) made up 35% of home purchases, Gen X (36-50yr/olds) bought 26%, Boomers (51-70yr/olds) 31%, and the Silent Generation (70+yrs/old) 9%. I'm no great fan of the NAR, but this makes basic sense as most homebuyers need an income to be homebuyers and most 70+yr/olds are retired and have the lowest average incomes of all the above groups.
Here's the very big problem for residential real estate... the chart below shows that over 70% of all the population growth among potential home buyers (20+yrs/old) from 2017-->2030 will be among the 70+yr/olds (chart shows average annual growth for the two groups from 2000-->2016 (left) and 2017-->2030 (right)). This is simply unprecedented in US history.
To put it in a broader context, the chart below shows annual growth in the 20-69yr/old population (red line) vs. annual growth in the 70+yr/old population (blue line) since 1980. That unprecedented, impending crossover in the lines means everything for real estate and the economy in general.
The impending nosedive in the growth of potential buyers vs. surge in elderly (those more likely to downsize or out-right sell than buy) should be quite disconcerting considering:
Home prices are at or near '07/'08 bubble peaks meaning any new investments require far more cash down to achieve a positive cash flow
Mortgage rates can effectively go no lower and a marginal increase is probable (unless the Fed reinitiates QE and implements NIRP)
Present lending standards are far more stringent than during the '07/'08 fog-a-mirror NINJA free for all
The dollar is likely to continue appreciating making foreign buying continually more expensive...and less likely (unless the Fed reinitiates QE and implements NIRP)
Rents and rent to income ratios are off the charts to new records well above '08...maintaining the pace of rent appreciation is highly unlikely and rent declines may be the more probable course.
Plus, add in the pace of new housing creation continues ramping up (still only half way to '08 levels but still far more than can ultimately be absorbed with the changing dynamics). With so few new buyers, a growing quantity of new homes, and so many likely sellers...a very simple question must be asked, who will buy all those houses and at what price?
Nations are just as likely to unravel after periods of prosperity as afte periods of depression
Have you ever met an Ottoman? Or a Habsburg? Neither have I.
Like a chopped-up Magritte painting, all that is left of the Habsburgs is a homburg hat. Yet in the 1800s, the Ottoman and Habsburg Empires controlled a huge chunk of the modern world. One in 10 Americans can trace his or her heritage to Habsburg lands, which spanned most of middle Europe from Poland down to Dracula’s castle in Transylvania.
Many people have written about poor countries that have fallen apart. But rich nations fall apart, too. In fact, nations are just as likely to unravel after periods of prosperity as after periods of depression. The 2016 presidential campaign appears so bitter precisely because so many Americans worry that the “other” party’s candidate will annihilate the nation.
I have found five forces that undermine nations after they achieve economic success - and they are biting down on the U.S. today. We have little time to spare to renew the nation. Whichever candidate wins in November better come up with tough and effective solutions.Falling birthrates
As countries grow rich, people have fewer babies. (The average American women now gives birth to just 1.89 children.) To keep up their lofty standard of living, citizens need new workers to serve them, whether as neurosurgeons in hospitals or as manicurists. This requires immigrants. But immigrants can splinter the dominant culture. So countries face either declining relative wealth or a fraying cultural fabric. Great empires of the past, from the Roman to the Venetian to the British, have faced this challenge — and failed to surmount it.
Nations cannot grow and stay rich without trading. Countries that fold themselves into a self-contained bubble grow fetid, like a badly aerated terrarium. Or a dank prison, which pretty much describes North Korea. South Koreans, who believe in trade, are 17 times richer, live 10 years longer, and stand several inches taller than their neighbors. South Korea produces super-sharp Samsung flat screens, fine Hyundai cars and charismatic K-pop singers.
But there’s a downside to trade. It shakes the customs and character of the nation. Donald Trump has skillfully tapped into this anxiety and is right to ask whether trade deals like the Trans-Pacific Partnership are vigorously negotiated to boost the incomes of typical Americans, or simply to boost the ego of the president.
Rising debt loads
As countries grow richer, they build bigger bureaucracies and inflate their debts. Here’s a puzzle I call “The Paradox of Theft:” As a family grows wealthier, it is less likely to fall into deep debt, default and bankruptcy. But the opposite is true of individual countries — wealthier nations may pile up proportionately more debt than poorer nations.
Amid the Great Recession of 2010, developing countries like Mexico and Russia had smaller debt burdens than Japan, the U.S. and the eurozone. Why do we borrow more? Because we can! And because today’s politicians aren't held responsible for the debts they leave for our children and grandchildren.
Eroding work ethic
When a rich nation shatters, people don’t go hungry. They just stop waking up early. The proportion of adults who want to work has been sliding over the last 17 years. In West Virginia, only half of working-age adults have a job. Between 2000 and 2013, disability claims across the country surged 43%. Even though jobs have grown less dangerous, the chances of a judge approving a disability claim has jumped 50% since 1980.
We are seeing a structural shift: Millions have decided they just don’t care much for the idea of showing up for work in the morning and staying on the job until the end of the day.
To prod the unemployed back to work, I propose they receive a signing bonus if they accept a new job before their unemployment compensation payments run out.
The challenge of patriotism in a multicultural country
Unless rich nations discover and embrace their national characters, they won't survive. In many schools, the Pledge of Allegiance and “My Country ’Tis of Thee” have been pushed aside in favor of self-esteem chants. Characters like Columbus, the Pilgrims and George Washington have been disdained as pillagers, rather than as symbols of exploration, religious freedom and courage.
To help ensure that all learn America’s story and values, all immigrants and any U.S. student applying for a federal loan be required to get their passports stamped at no fewer than five historical monuments or museums around the country.Is it too late?
Should the U.S. and European nations simply hold a “going out of business sale” while the wealthiest individuals sneak off to private islands or to New Zealand? The odds are against us, as the Spartans, Romans, Ottomans, and Habsburgs would attest — if they were still around.
But as Bill Murray said in Stripes: “We’re not Watusi. We’re not Spartans. We’re Americans, with a capital ‘A”…that means that our forefathers were kicked out of every decent country in the world. We are the wretched refuse. We’re the underdog. We’re the mutts.”
And we can win again.
Two weeks ago we reported that as part of its proactive effort to tackle future terrorist attacks, the French government announced that starting in September, French 14-year-olds would receive lessons how to survive a terrorist attack on their schools, following a spate of Islamist killings in recent months. It appears that was not enough, because earlier today the France interior minister Bernard Cazeneuve announced France would deploy about 3,000 reserve troops, train school authorities and ramp up school anti-terror drills in case of attacks, its education and security ministers announced on Wednesday, a week before the start of a new academic year.
"The threat is high, it is real," Education Minister Najat Vallaud-Belkacem, said during a joint news conference in Paris alongside Cazeneuve. "This is not about ceding to panic or paranoia," she added quoted by Reuters.
About 12 million students are expected to head back to school across France from on Sept. 1. All students aged 13-14 will be adding basic life-saving measures to their portfolio of skills, in case they need to provide assistance to classmates in a worse-case scenario. Right now, only 30% of students are trained, the Education Minister said in a Wednesday press conference, according to AP.
Around 500 school administrators will be trained every year at the national gendarme training center to manage crisis centers and act as liaisons with security officials, while some 1.2 million students in the fourth year of secondary school are expected to be trained in first aid. In addition to training students and staff stepping up to the plate, security forces have been ordered to be particularly vigilant around schools, and some 3,000 gendarme reservists will be deployed to provide reinforcement for local authorities, including police, Reuters reported.
"Throughout the year, particular attention will be put around schools. Active surveillance around schools, high-schools and universities will be reinforced by roving patrols," Cazeneuve said. RT adds that the government has decided to provide 50 million euros ($56.2 million) to local councils to help them pay for security equipment such as video door phones and new alarm systems.
As previously reported, anti-terror drills in schools will also be increased to three per academic year, up from the current requirement of two drills per year. During those drills, students will be taught how to hide or escape. At least one drill will include a mock assailant entering the premises. Children aged two to six should not be told of any attacks or dangers during the drills, but will be taught to hide and keep quiet through games.
The French announcement comes at the same time as Germany is deciding whether to put "troops on the streets" to protect the population from terrorism. While a formal decision has yet to be announced, Europe's distinct creep toward increasing militarization of society continues.
Despite the exuberant rebound in the price of oil - and the hope that this means something other than an over-financialized commodity being short-squeezed by rumors - all is not well across the oil producers of the world. Having noted the record surge in default protection for Saudi Arabia (ahead of its looming debt deal)...
We note that National Commercial Bank's stock price has collapsed to record lows.
This is Saudi Arabia's largest bank, and is often used as a proxy for the royal family's wealth.
Interestingly,just as we were surprised to see Saudi CDS "stabilizing" amid record demand for protection, NCB CDS has tightened dramatically in the last few weeks - as the stock has crashed...
If we were the tin-foil-hat-wearing types, we might suggest that every effort is being made to put lipstick on Saudi's credit pig before the looming debt deal is done.
he State University of New York (SUNY) at Binghamton is now offering a course called “#StopWhitePeople2K16” as part of routine training for residential assistants.
The university’s residential assistant training schedule lists “#StopWhitePeople2016” on its roster, with the mission of giving RA’s an “overview of disabilities in Higher Education.”
The presenters of the course, Ciaran Slattery, Nicholas Pulakos, and Urenna Nwogwugwu, are all RAs at the state-funded college, which describes itself as New York’s highest-ranking public college. They state their purpose is to “help others take the next step in understanding diversity, privilege, and the society we function within,” presumably the “white” society they plan to "stop" at the event.
The three RAs claim they will give “#StopWhitePeople2K16” course attendees the “tools” to respond to “uneducated people” with “‘good’ arguments.” You know, the people who preach mutual respect, equality under God, and constitutional freedoms. Those people.
They also state they will help other RAs at the state-funded college “hopefully expand upon what they may already know”: that white people are cancer, of course?
College RAs hold important roles in college residential and dormitory life, serving as mentors, counselors, and peers to the student residents they oversee.
“These people should be sensitive to the issues of their residents, and to be prejudiced against someone on the basis of his or her skin color would seem, just like the hashtag itself, petty,” student Howard Hecht noted.
Binghamton Review, the university’s conservative student paper, publicized the course schedule, noting the university “seems to endorse it as a proper part of a RA training.” It was added:
At a public, state funded university, to potentially see racism endorsed is a frightening prospect for the future of higher education.
Pentagon Admits "Lapses In Accountability" Led To Loss Of Hundreds Of Thousands Of US Guns In Afghanistan And Iraq
Back in April 2016, the New York Times published an article highlighting a number of Facebook pages in the Middle East being used to sell U.S. military equipment.
A terrorist hoping to buy an antiaircraft weapon in recent years needed to look no further than Facebook, which has been hosting sprawling online arms bazaars, offering weapons ranging from handguns and grenades to heavy machine guns and guided missiles.
The Facebook posts suggest evidence of large-scale efforts to sell military weapons coveted by terrorists and militants. The weapons include many distributed by the United States to security forces and their proxies in the Middle East. These online bazaars, which violate Facebook’s recent ban on the private sales of weapons, have been appearing in regions where the Islamic State has its strongest presence.
Many of the Facebook pages have subsequently been shut down, as selling stolen U.S. military equipment to terrorist organizations technically violates Facebook's user policies. But the remnants remain...like the Facebook post below showing a row of kids shooting increasingly lower caliber weapons culminating with a young man shooting a sling-shot...adorable!
At the same time the New York Times was reporting on the Facebook sales of U.S. military weapons, a lobbying group in London known as Action on Armed Violence (AOAV), was scouring through Department of Defense records to ascertain exactly how many weapons had been given to Iraqi and Afghani troops by the U.S. military. With a string of Freedom of Information Act requests that began last year, researchers at AOAV pooled 14 years’ worth of Pentagon contract information related to rifles, pistols, machine guns and their associated attachments and ammunition, both for American troops and for their partners and proxies.
Turns out, about 1.5mm weapons of various types, costing a total of $2.2BN, were supplied to Iraqi and Afghani troops by the U.S. military in the aftermath of 9/11. The full results of the AOAV study can be found here. In summary, below is a list of what the AOAV found to be shipped to Iraqi and Afghani soldiers:
- 692,439 were listed as assault rifles – not including AK47s (491,474 for Iraq, 200,965 for Afghanistan)
- 285,981 were listed as AK47s (95,981 for Afghanistan and 190,000 for Iraq)
- 266,272 were listed as pistols (176,983 for Iraq, 89,289 for Afghanistan)
- 111,844 were listed as machine guns (54,099 for Iraq, 57,745 for Afghanistan)
- 13,604 were listed as shotguns (346 for Iraq, 13,258 for Afghanistan)
- 11,475 were listed as sniper rifles (2,248 for Iraq, 9,227 for Afghanistan)
- For Afghanistan there were also 36,575 unspecified rifles listed and 288 unspecified non-standard small arms listed; for Iraq there were 34,432 unspecified rifles listed.
After presenting their findings, the AOAV offered the DoD the opportunity to respond with its own data. After 5 months, the DoD finally responded with the two charts below that only account for 48% of the guns the AOAV was able to track down just by looking through "open source government reports."
This is a stunning admission by the DoD of the lack of accountability in tracking assets that could ultimately be used by terrorists to fight our own troops. As the NYT pointed out in a article today, many of these arms fell into the hands of honorable Iraqi and Afghani allies, but many did not.
Many of the recipients of these weapons became brave and important battlefield allies. But many more did not. Taken together, the weapons were part of a vast and sometimes minimally supervised flow of arms from a superpower to armies and militias often compromised by poor training, desertion, corruption and patterns of human rights abuses. Knowing what we know about many of these forces, it would have been remarkable for them to retain custody of many of their weapons. It is not surprising that they did not.
As an illustration of how haphazard the supervision of this arms distribution often was, last week, five months after being asked by The New York Times for its own tally of small arms issued to partner forces in Afghanistan and Iraq, the Pentagon said it has records for fewer than half the number of firearms in the researchers’ count — about 700,000 in all. This is an amount, Overton noted, that “only accounts for 48 percent of the total small arms supplied by the U.S. government that can be found in open-source government reports.”
This gap between the tallies, the Pentagon said, is partly because at first the United States military was trying to stand up to two governments that were busily fighting wars. “Speed was essential in getting those nations’ security forces armed, equipped and trained to meet these extreme challenges,” Mark Wright, a Pentagon spokesman, wrote in an email. “As a result, lapses in accountability of some of the weapons transferred occurred.” Wright also said that the Pentagon’s current practices have improved, and that to ensure “that equipment is only used for authorized purposes,” its representatives “inventory each weapon as it arrives in country and record the distribution of the weapon to the foreign partner nation.”
While we may never know the exact number of weapons supplied to Iraqi and Afghani soldiers one thing is quite clear, a lot of those weapons have "vanished". Per the NYT:
One point is inarguable: Many of these weapons did not remain long in government possession after arriving in their respective countries. In one of many examples, a 2007 Government Accountability Office report found that 110,000 Kalashnikov assault rifles and 80,000 pistols bought by the United States for Iraq’s security forces could not be accounted for.
These spectacular losses were on top of the more gradual drain that many veterans of the wars watched firsthand — including such scams as Afghan National Army recruits showing up for training and disappearing after rifles were issued. They were leaving, soldiers suspected, to sell their weapons.
Given the number of Facebook "online weapon bazaars" that had to be taken down earlier this year, we're pretty sure we know where the missing weapons went.
This post Hillary Clinton: Class President of a Failed Generation appeared first on Daily Reckoning.
Hillary Clinton has always been at the head of her class. That includes being among the leading edge of the 80-million strong baby boom generation that first started arriving in 1946–47.
She did everything they did: Got out for Barry Goldwater in high school; got upwardly mobile to Wellesley and social liberation during college; got “Clean for Gene” and manned the anti-war barricades in the late 1960s; got to Washington to uplift the world in the 1970s; got down to the pursuit of power and position in the 1980s; joined the ruling class in the 1990s; and has helped make a stupendous mess of things ever since.
The baby boom generation which started with so much promise when it came of age in the 1960s has ended up a colossal failure. It has turned America into a bloody imperial hegemon aboard and a bankrupt Spy State at home where financialization and the 1% thrive, half the population lives off the state and real main street prosperity has virtually disappeared from the land.
Quite a deplorable legacy, that. And all the while Hillary has been our class president. God help the world if she becomes our nation’s President. She has betrayed all that was right about the baby boomers in the 1960s. And has embraced all the wrong they did during their subsequent years in power.
It starts during our defining moment when peace finally had a chance in the spring of 1968. We drove a sitting President from office, and, one whose megalomaniacal will-to-power was terrifying.
We called bull on the cold war hysteria that had once put us under our desks at school and now claimed that peasants in far off rice paddies threatened our security. We stopped the Vietnam War cold, dented the Cold War deep and put the whole Warfare State apparatus on the run — the Pentagon, CIA, the generals and admirals, the military-industrial complex. Within a few years the warfare state budget was down by 40% in constant dollars.
So it was a rare chance to break the deadly cycle of war that had started a half-century earlier in the bloody trenches of northern France during the Great War. Then the vengeful folly of Versailles led to WWII. And finally we had the nightmare of the Cold War.
True enough, the defeat and retreat of the American Imperium by the idealism and defiance of the baby boomers was interrupted by the Reagan defense and Cold War revival. But that historical error is what makes the Clintons all the more culpable…
It was their job as the first baby boom co-Presidents to finish the work of 1968, and by the time they entered the White House it was a lay-up. The Soviet Union was no more and China’s Mr. Deng had just declared that to get rich is glorious.
The Clintons’ job in 1993 was to have at least the vision of Warren G. Harding.
After all, Harding demobilize the U.S. war machine completely, eschewed the imperial pretensions of Woodrow Wilson and actually launched a disarmament movement which resulted in the melting down of the world’s navies and the Kellogg-Briand treaty to outlaw war.
Yet the opportunity at the Cold War’s end was even more compelling. There was absolutely no military threat to American security anywhere in the world. The Clintons could have drastically reduced the defense budget by mothballing much of the navy and air force and demobilizing the army.
They should have cancelled all new weapons programs and dismantled the military-industrial complex. They could have declared “mission accomplished” with respect to NATO and made good on Bush’s pledge to Gorbachev to not expand it “by an inch” by actually disbanding it. And they were positioned to lead a global disarmament movement and to end the arms export trade once and for all.
That was their job — the unfinished business of peace. But they blew it in the name of political opportunism and failure to recognize that the American public was ready to end the century of war, too.
And you can’t let Hillary off the hook on the grounds that she had the health care file and Bill the bombs and planes. On becoming Senator she did not miss a stride betraying the opening for peace that had first broken through in 1968.
She embraced Bush’s “shock and awe” campaign in Iraq and was thereby complicit in destroying the artificial nation created by Sykes-Picot in 1916. So doing, Clinton helped unleash the furies of Islamic sectarian conflict that eventually led to the mayhem and brutality of the Shiite militias and the rise of the ISIS butchers.
Tellingly, Hillary Clinton made a beeline for the Senate Armed Services Committee, the domain of the Jackson war democrats, not the Foreign Affairs Committee, where Frank Church had exposed the folly of Vietnam and the treacherous deeds of the CIA. Undoubtedly, this was to burnish her commander-in-chief credentials, but it spoke volumes.
By the time Hillary got to the seat of power, the idealism and defiance of the warfare state that had animated her and the baby boomers of 1968 had dissipated entirety. For her and most of them, it was now all and only about getting and keeping power. In that respect, Hillary’s term at the State Department was a downright betrayal.
Whether by accident or not, Obama had actually been elected as the “peace candidate” by echoing the rhetoric of 1968 that he had apparently read in a book but had been too young to actually hear. What this untutored and inexperienced idealist needed to hear from his Secretary of State was a way forward for peace and the dismantlement of a war machine that had rained havoc on the world, left behind 4 million damaged and disabled veterans who had sacrificed for no good reason and a multitrillion-dollar war tab that had bloated the national debt.
What he got was Hillary The Hawk.
When Obama took Bush’s already bloated $650 billion war budget (2005$) to a level that was almost 2X the level Eisenhower thought adequate at the peak of the cold war and upon his parting speech warning of the military-industrial complex, Hillary was completely on board.
When Obama was bamboozled into a “surge” of forces in the god forsaken expanse of the Hindu Kush, Hillary busied herself rounding up NATO support.
When her neocon and R2P (responsibility to protect) advisers and Administration compatriots urged making peace by starting wars in Syria, Libya and the Ukraine, Hillary lead the charge. All of them have been disasters for their citizens and a stain on America’s standing in the world.
When the Deep State began lining up the next enemy, Hillary joined the gumming brigade, warning about the China threat. My god, were the red capitalists of Beijing to actually bomb 4,000 Wal-Marts in America their system would collapse in six months and their heads would be hung from the rafters in the nearest empty Foxcon/Apple factory.
Here’s the thing. Hillary Clinton’s sell-out to the Warfare State is not just about war and peace — even as it fosters the former and precludes the latter. It’s also about the nation’s busted fiscal accounts, its languishing main street economy and the runaway gambling den that has taken over Wall Street.
After all this time, however, Hillary doesn’t get any of this. She thinks war is peace; deficits don’t matter; the baby boom is entitled to the social insurance they didn’t earn; and that the Fed’s serial bubble machine is leading the nation back to prosperity.
Actually, it’s leading to the greatest financial bubble in human history. After 90 months of ZIRP and a decade of Wall Street coddling and subsidization by the Fed, the windfalls to the 1% have become unspeakable in their magnitude and illegitimacy.
Soon 10,000 people will own a preponderant share of the wealth; 10 million people will live grandly off the droppings; 150 million will live off the state; and the rest of America will be left high and dry waiting for the house of cards to collapse.
Hillary rose to fame delivering an idealistic commencement address at Wellesley at the beginning of her career. But like the generation she represents, she has betrayed those grand ideals over a lifetime of compromise, expediency, self-promotion and complacent acquisition of power, wealth and fame.
She doesn’t deserve another stint at the podium — let alone the bully pulpit.
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The post Hillary Clinton: Class President of a Failed Generation appeared first on Daily Reckoning.
This post “I’m Standing in the Lobby of the Biggest Tech Company in the World” appeared first on Daily Reckoning.
Like I mentioned Monday, I spent most of last week tooling around Silicon Valley and the rest of the San Francisco Bay Area.
I visited several tech and biotech innovators, looking for new, actionable trends you can take advantage of.
If there’s one place where tech innovation hits the ground first, it’s in Silicon Valley.
But all eyes right now are on the darling of Silicon Valley tech giants…
We’re just days away from the unveiling of Apple’s newest iteration of the iPhone.
This enormously successful product has helped make Apple one of the great American companies of all time.
Throughout its history, Apple has invented, or greatly improved, emerging categories of consumer electronics. It has done so repeatedly.
That’s a rarity. Many businesses, once they have come out with a very popular and profitable new product, tend to sit back on their haunches.
Eventually, a scrappy new upstart makes them obsolete. Even though the original company may have had the resources to continue innovating, fear of displacing profitable existing lines of business discourages this further innovation.
That hasn’t been the story at Apple — so far. This has been a special sort of technology company.
But that doesn’t mean things will stay the same forever.
The consumer electronics space is ferociously competitive, and no one can rest on his or her laurels.
New iPhone versions haven’t really wowed people like early ones did. Apple knows this. It also knows it needs to come up with something very special to stay ahead of the competition and keep commanding a premium price for its products.
Which is why there’s good reason to believe a bold new technology is intriguing Apple right now…Wireless charging.
Being able to charge an iPhone over a distance of 15 feet wirelessly would be a key differentiator in the smartphone market.
After all, who likes to be tethered to a (ridiculously short) charging cord while clinging to your nearly-dead iPhone?
Apple is notoriously secretive about what it’s working on.
We don’t usually find out until a product is almost released. But there are clues.
I used my time in Silicon Valley to do some ground zero research in the industry…
What I found indicates one thing: we are on the verge of an explosion in devices that will be greatly improved by wireless power.
I saw it with my own eyes, right there in the lobby of the Apple headquarters.
But while consumers line the street outside their local Apple store to grab the latest iPhone version, Apple isn’t where investors are going to make their money.
If you really want to get into this market, you have to look much deeper. Apple is just the tip of the iceberg.
This is a story the public has NOT heard about… but it could be the secret to unlocking Silicon Valley’s next huge growth sector.
With billions in profit potentially at stake, I hope you won’t miss out.
Rumors are swirling around this new technology. It could be set off by a huge announcement in a matter of days.
But my research on this industry is too big for this space.
Continue reading my controversial remarks straight from the lobby of Apple headquarters.
I’ll be keeping an eye on this exciting sector…stay tuned for further updates!
To a bright future,
The post “I’m Standing in the Lobby of the Biggest Tech Company in the World” appeared first on Daily Reckoning.
Imagine for a moment some congressman in a bad suit pitching the next exciting stimulus program…
He proposes paying for Wall Street’s repeated failed bets off the backs of working class retirees.
That’s right, he wants to transfer hundreds of billions from the bank accounts of retirees directly to Wall Street’s balance sheets each year for the next seven years.
What would happen to that politician if he made such a proposal?
Tarred and feathered? Tied to a chair and forced to listen to an endless loop of Hillary Clinton cackling?
Most would say that plan is so outrageous that no one would have the balls or stupidity to ever propose it.
So why the hell have we let the Fed get away with implementing it for the past seven years?The Fed’s Despicable Trap
Someone who’s done everything in his power to stop this massive wealth transfer by the Fed is David Stockman.
He’s a former congressman, director of the Office of Management and Budget under President Reagan, and 20-year Wall Street veteran.
For years, Stockman has been railing against the Federal Reserve’s zero interest rate policy because it’s transferred trillions of dollars from Main Street to Wall Street.
Stockman refers to it as as “a jihad against savers and retirees.” And it’s a topic he spoke about in detail as a guest on my Trend Following Radio program.
Basically, it all boils down to this…
We now have an entire generation of retirees who tried to do the right thing during their working lives. They scrimped and saved to accumulate a nice nest egg so their golden years would be a little more golden.
Historically, these folks could park their savings in FDIC-insured CDs or low-risk bonds and get their 5% income return each year. But the Fed has screwed them by setting and keeping rates at zero.
Mom and pop investors have been stripped of tens of thousands of dollars of income each and every year that they’ve relied on to pay for necessities like food, gas and housing.
And it’s come at the hands of an out-of-control Fed, which, according to Stockman, has gone way beyond its statutory authority of setting monetary policy:
We’ve allowed the Fed to basically run a gigantic fiscal policy. Namely, that zero interest rates are generating a $250 billion annual transfer of income from savers and deposit holders to the banks to repair their profitability and their balance sheets. Well, that is one utterly inappropriate and I would say even despicable way to fix the banking system.
Through its policies, the Fed now has retirees trapped in a box…
With zero rates, Yellen and Co. have stolen their traditional source of income to pay for the big banks’ reckless behavior.
Retirees are now forced to spend down their principle to survive. Or they can take their chances in a nosebleed stock market in a desperate search for yield.
Why are stocks at such risky heights? You can thank Fed manipulation again. Here’s Stockman…
The gamblers are buying stocks and funding their positions with the Fed’s zero cost money. It has turned Wall Street into a gambling casino. It’s distorting pricing and what I call price discovery. Honest price discovery based on the real world, not the artificial world created by the Fed.
This is the same Wall Street casino that’s seen two massive Fed-induced crashes in the last 15 years. It’s no wonder why retirees don’t trust the stock market.
But the Fed has given them no other option. They must choose between eating cat food and spinning the roulette wheel with their retirement savings.The Retiree Revolt of 2016?
Where’s the outrage? Why haven’t tens of millions of retirees taken to the streets with pitchforks to demand a change in this destructive Fed policy?
That’s easy. Stocks are at all-time highs. Retirees think the Fed is in control. Yellen has given them a bull market to offset their devastating loss in interest income.
It’s a bribe that essentially goes like this, “Shut up and trust us.”
But things will get really interesting when the bargain falls apart during the next crash… when retirees are left with no retirement income and 50% losses in their stock portfolios.
Stockman believes that kind of market reset is right around the corner:
The Fed can generate massive bubbles and it can delude people into thinking it knows what it’s doing… Well, the problem with that is it seems to work for two, three, four, five years running, maybe even in seven-year cycles. That’s what happened from 1994 to 2000 and then the whole dotcom thing burst. Then we had another seven-year run and another huge markdown [in 2008]. And we’re about ready to have another reset.
My question is, when that reset happens, will people finally take to the streets?
Is 2016 the year of the retiree revolt? Forget Occupy Wall Street, this will be Occupy the Fed.
And if it is, Stockman and I will be cheering them on.
Please send me your comments to firstname.lastname@example.org. Let me know how that you think about today’s issue.
I do not believe that Brexit means that the European Union is going to break up. Or that it spells the end of the euro as a currency. I’ve been very bullish on Europe and the Euro in the past. Even if the currency fluctuates, all these currencies are fluctuating, and the Euro did trade down from around the 140 level in late 2013, all the way down to 105 in January 2015, and people said, “Oh, it’s going to parity.” I said, “No, it’s not going to parity,” and it didn’t. It bounced back to 105 a couple times, back up around 110 today, $1.10.
Now the important thing to understand is the European Union is not primarily an economic project. Does it have a lot of economic problems? Absolutely, from Greece to Portugal, now Italian banks, et cetera, but it is a political project.
The way to think about the European Union, ask yourself, “Does the political will exist to keep it together?” Clearly, in the U.K., it didn’t. They left, but I could write a separate book on why the U.K. was never a good fit with the E.U. to begin with. Look, if the Brexit had been the Netherlands or Italy or Spain or someone like that, I would have a much more pessimistic or dire outlook for Europe, but it wasn’t. It was the U.K., and the U.K. has always been different.The U.K. Was The Exception
First of all, they never joined the Euro. The U.K. is Europe’s biggest economy by far, and it did not to join the Euro. The other countries in line who have not joined the Euro are either on the periphery or they’re trying to join but haven’t met the criteria yet. There are some special circumstances.
The U.K. was the exception. They were the big country and the E.U. member that did not join, and they were the only one that kind of fit that. That’s because the U.K. was never a good fit with Europe to begin with. I would go back to the difference culturally and in terms of legal systems, not just geographically, although geography plays a role of course, but on the continent the legal was different.
Obviously, Germany, France, Spain,Netherlands, Italy and others large countries have a legal system goes all the way back to the end of the Roman Empire, or to code of Justinian, Charlemagne, through to the Napoleonic code in the late 18th, early 19th century. It’s what’s called a code-based system of law.
Contrast that with the U.K., which has the common law, and the common law is what was exported to the United States, Australia, Canada, New Zealand and sort of the English-speaking world. Common law and code law are completely different. It’s not just that the rules are different, it’s the mindset is different.
In a code system, which is what you have in the E.U., the idea is if you have a problem, write a rule. If the rule doesn’t fix it, write another rule. If that doesn’t fix it, write another rule and keep going. Keep writing as many rules as you need until you fix the problem, and if it’s not fixed, write another rule. That’s the view of the E.U.
Common law is different. Yes, there are laws, rules and regulations in common law. We probably have too many, but judges have equitable powers, and common law has a lot more scope for an ad hoc decision-making designed to achieve justice.
You can have a case where under the strict law of contract, somebody should lose. A judge will look at it and say, “You know, that’s not really fair. Yeah, I know what the law says, but that’s not the right result. That’s really unjust, unconscionable.” Judges have scope to kind of make things up to get the right result.
In Europe, you would never do that. In Europe, you would write another rule. You’d say, “If something bad happens, let’s write a rule.” This is actually a good way to understand the ECB, because when Janet Yellen talks about the dual mandate of the fed, employment and price stability, it’s lip service. They’ve got their own agenda, their own economic goals, et cetera.
When Mario Draghi talks about his mandate, it’s not lip service. He takes it literally. He’s a legalist, and they will stick to it, and they will not do certain things, because they’re not permitted under the charter. That divide between the common law and equity and discretion on the one hand, and rules, on the other, is a big deal. It runs right down the middle of the English Channel, and it’s one of the reasons that the U.K. subjects rebelled against the European Union; too many rules.
Immigration was a big part of it. The immigration issue in the U.K. was not about Syrian refugees. It was about Poles. It was about people from Poland taking jobs as nannies, shopkeepers, domestic help and landscapers or a lot of other things, and at entry-level positions. That was the immigration issue. It wasn’t Syrians, it was Poles. That comes from a European rules-based culture.
Europe is solid. The U.K. leaving is a big deal economically. It’s a big deal for the U.K., and it will cause aftershocks, which we’re watching. One of the aftershocks will not be the breakup of the European Union. It will not be the end of the Euro. In fact, I expect the Euro to get stronger from here, again going back to the Shanghai Accord.
If you’re asking if there will be crises, yes, there will be crises. Go back to Greece. With Greece in 2011 and 2012, Krugman, Stiglitz, Roubini, Zero Hedge, what were they all saying? “Europe’s breaking up. Spain’s leaving. Greece is getting kicked out. Germany is going their own way.” I said, “Nonsense, none of that is going to happen,” and it didn’t happen.
London hates the Euro. The Brits don’t understand the Europeans much better than the Americans do, for the reasons I mentioned. You really have to go to Germany, to Italy, to Spain, to the Netherlands and talk to those people. Talk to the people on the ground, talk to elites and others, and read the local papers, see if you can get them in translation, or if you read the languages, and that’s how you learn about Europe.
My forecast for Europe; there will be crises. There will absolutely be crises, coming in the Italian banking system, probably Deutsche Bank. We’re probably going to be hearing more about Portugal. We’re probably going to be hearing about Greece again, because Greece never goes away. I’m not denying any of that. That will come, that will cause volatility. When somebody looks at that and says, “A-ha, Europe’s falling apart,” don’t believe it.
I have been asked, “If a bailout of the Italian banking system would truncate any crisis, or if you see spillover possibilities going out of control, beyond anybody in Europe’s control to truncate?”
The answer is yes, there is that, there’s always that possibility. I guess the way I would explain that, what will happen is conditional or contingent. This is important to understand in terms of the best way to do forecasting, and how we do forecasting at our publications.
It’s not as if the outcome is set in stone, and we just don’t know it. A lot of people think, there’s a certain outcome out there, and your job as an analyst is to work really, really hard to figure out what the outcome is. That is not the correct way to think about it, and it’s not how we do things. What we say is, there’s a range of possible outcomes.
One is that everything comes in for a soft landing, it’s all good. It gets ugly and there’s some bad headlines, but they’re able to truncate it. The next is they try and it’s too little too late, and it just spins out of control and all of a sudden, we’re back to 2008.
I would say that all three possibilities are in play, all three of them. The way you do analysis, and this is what we do in my premium research services Currency Wars Alert in particular, it’s called indications and warnings. The way you do analysis is to wake up every day, or in my case sometimes I’m up until 3 in the morning, and keep looking at data points to help you figure out which path you’re on, and recognizing that you could have these phase transitions where you pass from one path to the other very quickly.
The simple way to explain it, I happen to be in Connecticut, and I happen to know that all the roadside restaurants to Boston are all McDonald’s, and all the restaurants to Philadelphia are all Burger Kings. I don’t know why that is, but it’s true. If you blindfold me and take me in a car and let me peek, and I see a McDonald’s, I know I’m going to Boston. I know I’m not going to Philadelphia.
The point is, if you know what the Burger King/McDonald’s situation is, you don’t have to get to Philly or Boston to know where you’re going. You can figure it out along the way. To answer the reader’ question, does this have the potential to spin completely out of control and end up like 2008? The answer is yes. That’s not my forecast right now and I’m not forecasting that. I’m saying that’s on the table. That’s the reason to get fully allocated to ten percent gold, have more cash than usual, and pay close attention to what’s going on.
The expected case would be that this gets worse, there’s more headlines, there’s more ugliness, between the Italian prime minister and the German chancellor. It’s not going to get quite as bad as Greece, but it’s going to kind of look that way, and accusations are going to fly back and forth.
Remember, a lot of these accusations are just for show. They’re just for the newspapers, because you’ve got a local political constituency. The Italian prime minister can’t look like a doormat for the German chancellor, and the German chancellor can’t look like she’s not taking a hard line. When they get behind closed doors or meet in the hall or whatever, they work things out as we saw in the case of Greece.
I would expect some ugly headlines, and some more volatility, and some more danger signs coming out of the Italian banking crisis. At the end of the day, I would expect that they will truncate this … “Truncate” is a very good word. Truncation, that’s the difference between an avalanche and a financial crisis. I’ve said the dynamics are the same and the math is the same, which they are. Analytically, you can look at the start of one. It’s exactly the same systems dynamic.You Can’t Stop A Natural Disaster
The difference is that in natural systems, it just goes. You can’t stop it. In a tsunami or an earthquake; nobody runs out in the middle of an earthquake and says, “I’m going to stop this thing.” You run for your life. You try to get to safety, but nobody runs out and tries to stop an earthquake in the middle. You can’t stop an avalanche. I’ve been close enough to them, you don’t want to be standing there on a mountain saying, “Hold on, stop.”
You can’t stop a natural disaster. You can truncate a man-made disaster, meaning something capital markets, something in the stock markets, et cetera, a banking crisis. The question is, do you act too late? Do you see it coming? Do you have the right policy? Do you act in time, or do you act too late? Those are the variables, but you can snuff a systemic crisis in the financial world, if you have enough power, or if it’s not bigger than your balance sheet.
Part of my thesis about the next really major global financial crisis is something bigger than 2008, and that’s not what I’m forecasting right this minute, but I do see it out there, is that it actually would be bigger than the central banks. It wasn’t bigger than the central banks in 2008. They did truncate it with 10 trillion dollars of guarantees, money printing and currency swaps. The next one will be bigger than that, but we’re not there yet.
Short answer; does the Italian banking crisis have the potential to spin completely out of control, worse than 2018? The answer is yes. I’m watching that, but I don’t expect that. I expect that they will be able to truncate it, meaning bail in, bail out. It probably is a mix, but the absolute biggest banks will probably get bailed out, and some small sacrificial lambs will probably get bailed in. We’ll see how that plays out.
Merkel’s going to have to give to the Italian prime minister, because she can’t defend Deutsche Bank. You can’t tell the Italians they have to bail in, if you’re standing by to bail out Deutsche Bank. The Italians are going to say, “If you bail out your biggest bank, we’re going to bail out our biggest bank, so don’t tell us we can’t do that.”
I would expect volatility, nasty headlines, but at the end of the day, they’ll bring it in for a soft landing.Brexit Is Not The End Of Europe Or The Euro
It will not be the end of Europe or the Euro, but it will mean volatility, and it could mean a draw-down in U.S. stocks. It could look ugly, like August 2015, or go back to 2011, for that matter, when the Greek thing first popped up. It’s what I call non-directional volatility, or NDV, where you have, it goes down, the stock market goes down seven or eight percent, then it rallies back ten percent. It’s not really going anywhere. It’s like being on a roller coaster. Your stomach’s in your throat practically, but you end up back where you started. That’s kind of how the stock markets will look.
I don’t think this will spin out of control, but it absolutely has the potential. It’s like quantum mechanics, thinking of everything in conditional space, where you’ve got two or three outcomes, and you don’t really know which it is until you take more observations.
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This post Back from the Dead: Another Forgotten Tech Trend Blasts Higher appeared first on Daily Reckoning.
A popular emerging technology trend is about deliver spectacular gains.
The clues are hidden in plain sight between the lines of a “dying” corporation’s earnings report…
It all begins at your local electronics warehouse.
With all the talk of empty malls and failing big box retailers, you would think the entire world was doing 100% of its shopping online.
Of course, the media has greatly the exaggerated demise of traditional retailers. Make no mistake—many of these stores aren’t spectacular long-term investments. But they aren’t folding without a fight.
Take electronics giant Best Buy (NYSE:BBY). The company surprised the Street on Tuesday with an earnings beat that sent shares soaring double-digits to new 2016 highs. For the past couple of years, Best Buy has come under some tough scrutiny due to its failure to keep up with Amazon. But with strong sales coming in this quarter, Best Buy is silencing these critics—at least for now.
You shouldn’t chase Best Buy shares here (I still don’t like the stock). But if you dig deeper, you’ll find a hidden clue about a major trend in Best Buy’s earnings report:
From a merchandising perspective, comparable sales growth in health & wearables, home theater, major appliances and computing was partially offset by declines in mobile phones and gaming.
There it is in black and white: wearables. These gadgets come in many shapes and sizes. And they’re driving sales growth at physical electronics stores and across the web.
Wearables haven’t exactly been an easy nut to crack. While some smaller companies have managed to carve out a nice niche in the industry with various fitness trackers, cameras, and other gadgets, some major corporations have already thrown in the towel…
“Many may have forgotten Nike used to have their own branded Nike Fuel bands designed compete with Fitbit and others,” Forbes reminds us. “Nike’s efforts ultimately failed, and the company shut down the entire project.”
High profile failures like these kept most investors away from wearables after the initial hype wore off. You probably remember camera maker GoPro (NASDAQ:GPRO) and its fall from grace after the company’s 2014 initial public offering. The stock posted a breathtaking fall from a high of $98 in October 2014 to a low near $9 earlier this year.
But GPRO finally set up for a potentially lucrative trade on the long side earlier this month. The stock is up five weeks in a row and continues to make progress toward getting back some of its market cap that was lost over the past two years.
Today, we have our sights on another trade to capitalize on the wearable trend. It’s a stock that’s almost a household name—yet few investors are willing to bet on its recovery just yet.
But that’s all about to change…
We discussed how the Fitbit (NYSE:FIT) chart was beginning to shape up last week. At the time, the stock was down almost 40% year-to-date. But the stock was starting to bottom out. After a retest of support, we’re seeing some bullish springboard action.
Like GoPro, investors wanted nothing to do with this stock earlier this year. The market’s January swoon swallowed FIT shares whole. By February, FIT was posting new lows.
A quick retest in July helped set up the red-hot rally off its lows. Now FIT shares are looking to smash higher—and reward savvy traders who see the writing on the wall.
Fitbit stock still has a ton of work left to do before it can even come close to sniffing its January highs. But we don’t need the stock to jet all the way back to $30 to profit from this trade. If FIT only closed its May earnings gap, you would pocket gains close to 15%.
If FIT can recapture just a fraction of its IPO magic from last summer, we could see an even bigger move before the year is finished. It’s the perfect compliment to your growing list of comeback plays.
The post Back from the Dead: Another Forgotten Tech Trend Blasts Higher appeared first on Daily Reckoning.
Despite a new 15% tax on foreign property buyers in Vancouver, Canada will continue to attract Chinese investment, especially in agribusiness and tourism. On August 2nd, the provincial government of British Columbia introduced...