How A “Typo” Resulted In A $7 Billion Corporate Welfare Program In Texas

Throughout the 90s, Texas was frequently listed as a finalist in Site Selection magazine’s annual Governor’s Cup competition which served as a proxy for how “business friendly” a state was. According to the magazine, the ranking was based upon the “Conway Project Database” and tracked the number of projects started in a state each year that met certain financial thresholds.
The Governors Cups reflect yearly project totals as tracked by the Conway Projects Database. Qualifying projects must meet one or more of these criteria for inclusion in the database: a minimum capital investment of $1 million, 20 or more new jobs created, and 20,000 or more square feet of new space.
Unfortunately, everything went awry in 2000 when, according to the Observer, the Lonestar State dipped from the top of the annual ranking to 37th in the country.

This post was published at Zero Hedge on Dec 5, 2016.

Get Used to Lousy Growth AND Rising Rates: Fed Dove Dudley

The bond market is already doing the math.
For the year 2016, economic growth is expected to be a miserably slow 1.6%, according to a survey of ‘professional forecasters,’ released today by the National Association for Business Economics (NABE).
For next year, the forecasters are more optimistic, but it’s the same lousy optimism that would have been considered rampant pessimism before the Financial Crisis. They lowered their forecasts to 2.2% growth for next year. And as they nearly always do as they get closer to reality, they’ll likely lower that forecast again and again.
So forget ‘escape velocity.’ That concept was officially defenestrated a while ago. The report explained:
[T]he slow pace of growth in recent years may be the ‘new normal,’ as more than 80% of survey panelists estimate that the potential rate of economic growth will be 2.5% or lower over the next five years.
They expect inflation to rise to 2.3% in 2017, despite the lousy economic growth.
And they expect the Fed to hike rates in December – by now, everyone is taking that one for granted – plus two more times next year to bring the midpoint of the target range to 1.125%. That’s the expectation.

This post was published at Wolf Street on December 5, 2016.

Our “Gaslight” Financial System

Perhaps the ultimate gaslighting in human history is our current fiat money creation system that benefits the few at the expense of the many.
Generally speaking, gaslighting has been used in the context of personal relationships to describe a manipulative person’s attempts to undermine and control their romantic partner. The terms gaslight and gaslighting are entering the political media lexicon, with partisans of both parties accusing the other side’s candidate of gaslighting in the presidential election. The terms refers to the 1944 film Gaslight in which Charles Boyer subtly manipulates the environment to cause Ingrid Bergman to question her memory and sanity.
As I understand it, gaslighting refers to a specific set of manipulative techniques:
1. Questioning, belittling, discounting and undermining our experience of places and events.
2. Overwriting our memory of events with false memories, again by undermining, questioning and belittling our memories.
3. Discrediting and marginalizing our definitions of self and identity, in favor of the manipulator’s definition of our identity and place in the world.

This post was published at Charles Hugh Smith on DECEMBER 05, 2016.

Ivory Tower Economist Tries To School Dilbert’s Scott Adams On Trade… Fails

Today Donald J. Boudreaux, who is Professor of Economics and Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center at George Mason University, wrote an open letter to Dilbert creator Scott Adams. The letter was a rebuttal to Scott disagreeing with Michigan Rep Justin Amash about Trump’s trade policy.
Justin Amash had tweeted out that tariffs will hurt the consumer in higher prices. Scott retorted that the tariffs will not be applied because the threat of applying a tariff on firms who chase cheap foreign labor but then sell that production back to the US consumer they just laid off will disincentivize the firms from leaving in the first place. It was then that Mr. Boudreaux jumped in, stating unequivocally that Scott is wrong and Justin is right.
Boudreaux argues that while he agrees the tariff would actually not be applied it would stifle competition and thus consumers would pay a higher price. Boudreaux seems to imply that low consumer prices are a top priority of trade policy. Below is the main argument within Boudreaux’s open letter to Scott Adams.

This post was published at Zero Hedge on Dec 5, 2016.

The Tide Is Turning Against the Oligarchs – Paul Craig Roberts

The Tide Is Turning Against the Oligarchs
‘The further a society drifts from the truth, the more it will hate those that speak it.’ George Orwell
Dear Friends, This is my quarterly request for donations. As you know, this is your site. It will stay up as long as you support it.
The ruling oligarchy and their presstitute media have become desperate now that they are losing control over explanations and Americans’ minds. Thus, they charge independent Internet journalists such as myself with being Russian agents peddling fake news. Recent legislation in the House of Representatives, the list of 200 alleged Russian agents, and the attacks on president-elect Trump from within the US intelligence community make it clear that pressures on truthtellers are increasing. Internet sites that have comment sections make it easy for trolls to earn their blood money by slandering and misrepresenting truthtellers, thus aiding the oligarchs in their attack on truth.
I have certainly got the oligarchs attention. I am sure that you are as proud as I am that http://www.paulcraigroberts.org is on the oligarchy’s list of enemies. If I had to bet, I would bet that the 200 list of the oligarchy’s enemies was prepared with money from the CIA (US tax dollars or drug money), the National Endowment for Democracy (US tax dollars), and George Soros (money stolen from the British people in currency manipulation).

This post was published at Paul Craig Roberts on December 5, 2016.

Gold Daily and Silver Weekly Charts – And in Their Triumph, Die

“These violent delights have violent ends,
And in their triumph die, like fire and powder…”
William Shakespeare, Romeo and Juliet
The dollar went lower, as did the metals after the initial spike on the Italian vote last night.
The markets are casting aside their doubts for even more risk.
I have little hope for any meaningful reform from this new administration and the current breed of financiers.
They are the gods of money, who have been nurtured by a system of their own.

This post was published at Jesses Crossroads Cafe on 05 DECEMBER 2016.

Here’s Why the Stock Market is Driving You Crazy Right Now

The market’s ripping higher…
But the strongest stocks aren’t the names most investors were watching just a few short weeks ago.
Financials are higher. So are industrial metals. Energy stocks found some momentum last week. The Dow is also pushing to new highs.
On the other hand, tech stocks and biotechs are weak. Popular mega-caps like Facebook are well off their highs. Amazon shares finished lower every single day last week. And it’s holiday shopping season, for cryin’ out loud!
Stock market rotations like these can be downright frustrating for most investors. That’s why it’s important to maintain a list of trading rules. Your list of rules should serve two important purposes: Your rules need to help you book profitable trades. And they need to keep you out of trouble.
Today, I’m going to break down five trading rules written by one of the most successful traders who has ever lived: Jesse Livermore. These were some of the rules Livermore used throughout his career to help him book millions in profits.
If you follow them closely, they will lead you to consistent profits. Of course, you don’t have to take my word for it. Ask any successful trader and they’ll tell you they’ve concocted a set of rules that have helped them succeed.
Let’s dive right in…

This post was published at Wall Street Examiner on December 5, 2016.

DEC 5/RENZI LOSES REFERENDUM AND THROWS ITALIAN BANKS INTO CHAOS/YELLEN AND DRAGHI SEND IN THE CAVALRY TO RESCUE MARKETS TODAY/SHANGHAI GOLD FIX PREMIUM RISES TO OVER 25 DOLLARS PER OZ/GERMANY’S …

Gold at (1:30 am est) $1174.10 down $1.10
silver at $16.82: up 7 cents
Access market prices:
Gold: 1170.25
Silver: 16.75
Another raid by our banker friends in gold and silver as they try desperately to keep a lid on the turmoil in the world. Last night, Italy voted ‘No’ to reforms and as promised Renzi quit as PM. Italy has a huge problem with its banks. They have 360 billion euros of non performing loans on their books with little equity left. Most of the ownership of Italian bank bonds are owned by Italians (especially senior citizens and that is their entire wealth tied up with these bonds). If they bail in on the banks, then these guys suffer and that is exactly what Renzi tried to avoid. Now will the ECB bail in and create havoc in Italy..stay tuned
THE DAILY GOLD FIX REPORT FROM SHANGHAI AND LONDON
The Shanghai fix is at 10:15 pm est last night and 2:15 am est early this morning
The fix for London is at 5:30 am est (first fix) and 10 am est (second fix)
Thus Shanghai’s second fix corresponds to 195 minutes before London’s first fix.
And now the fix recordings:
MONDAY gold fix Shanghai
Shanghai morning fix Dec 5 (10:15 pm est last night): $ 1195.92
NY ACCESS PRICE: $1175.00 (AT THE EXACT SAME TIME)/premium $20.92
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
Shanghai afternoon fix: 2: 15 am est (second fix/early morning):$ 1198.11
NY ACCESS PRICE: 1173.00 (AT THE EXACT SAME TIME/2:15 am)
HUGE SPREAD 2ND FIX TODAY!!: $25.11
China rejects NY pricing of gold as a fraud

This post was published at Harvey Organ Blog on December 5, 2016.

The problem is a single central bank, not a single currency

The euro-zone appears to be on target for another banking crisis during 2017. Also, the stage is set for political upheaval in some European countries, a general worsening of economic conditions throughout Europe and widening of the already-large gaps between the performances of the relatively-strong and relatively-weak European economies. It’s a virtual certainty that as was the case in reaction to earlier crises/recessions, blame for the bad situation will wrongly be heaped on Europe’s experiment with a common currency.
The idea that economically and/or politically disparate countries can’t use a common currency without sowing the seeds for major problems is just plain silly. It is loosely based on the fallacy that economic problems can be solved by currency depreciation. According to this line of thinking, countries such as Italy and Greece could recover if only they were using a currency that they could devalue at will. (Note: The destructiveness of the currency devaluation ‘solution’ was covered in a previous blog post.)
The fact is that economically and politically disparate countries throughout the world successfully used a common currency for centuries up to quite recently (in the grand scheme of things). The currency was called gold.

This post was published at GoldSeek on 5 December 2016.

Buffett Wins Again: Berkshire To Get $29 Billion Boost Under Trump Tax Plan

Something curious happened as Trump was “draining the swamp” – the man who by some accounts owns the swamp, Hillary Clinton’s billionaire backer Warren Buffett, may be about to get some $29 billion richer, if only on paper, thanks to Trump’s tax-rate cut policies which would boost the book value of Berkshire by as much as $29 billion.
According to an analysis by Barclays, Berkshire may soon enjoy a $29 billion boost to its book value under Trump’s proposed tax reform. ‘We would view this magnitude of increase as favorable for Berkshire shares since it is generally valued on price to book value,’ Barclays analysts led by Jay Gelb said in a note to investors Monday first reported by Bloomberg. Berkshire’s book value was more than $270 billion as of Sept. 30; it would surpass $300 billion should Trump’s proposal for a 15% corporate tax rate be enacted.
Joining in the overall market frenzy, Berkshire has jumped about 8% in New York trading since Trump won the November 8 election, helped by the increasing value of Buffett’sholdings in bank stocks as interest rates climbed, however it appears the prospect of sharply lower taxes has helped.

This post was published at Zero Hedge on Dec 5, 2016.

Trump, The Fed and Systemic Risk

The most decisive factor in the implementation of the Trump economic plan is the reaction of the Federal Reserve. While a Fed rate hike in December is a certainty, the path of rates in 2017 following the December hike will be dispositive with regard to the success or failure of Trump’s plans.
The Role of the Federal Reserve
The Fed can choose to be highly accommodative in the face of Trump’s larger deficits. In effect, the Fed will not anticipate inflation, but will wait until it actually emerges. Actual inflation is still well below the Fed’s target inflation rate of 2%. Since the Fed is targeting average inflation of 2%, it could allow inflation to run above 2% for a while, which would be consistent with 2% average inflation, given today’s lower level.
The Fed also seeks negative real rates as a kind of stimulus measure. Negative real rates exist when the rate of inflation is higher than the nominal interest rate. This condition can exist at any level of nominal rates. For example, inflation of 3% with nominal rates of 2.5% produces a negative real rate of 0.5%.
Likewise, inflation of 4% with nominal rates of 3.5% produces the same negative real rate of 0.5%. No doubt the Fed does not want inflation of 3.5%. However, they can achieve negative real rates at any level by using financial repression to put a lid on nominal interest rates.

This post was published at Wall Street Examiner on December 5, 2016.

Can Italy Be Saved?

On Sunday, Italian voters rejected by a wide margin a constitutional reform put forward by Prime Minister Matteo Renzi. The result plunges Italy into a likely period of extended uncertainty and seriously threatens financial stability. While the vote was on a reform of the constitution that would streamline parliament by changing the makeup and role of the upper house (the Senate), the underlying issues were more profound, with far-reaching ramifications: confidence in Prime Minister Renzi; the prospects for needed economic reform, including addressing the crisis in the banking system; and even Italy’s continuing membership in the European Union are all in question. The prime minister had taken the unnecessary step of staking his government’s future on the vote, and he announced last night that he will resign today.
The opposition was led by populist, anti-establishment parties. As the December 2 Financial Times argued, following a Renzi defeat, ‘Italy will at best be left with technocratic but unambitious governments.’ We would emphasize ‘at best,’ for there is a real threat now of a populist government’s emerging during the next several years. Leaders across Europe must be shuddering.
For investors, the greatest concerns relate to the threat to financial stability in the eurozone’s third-largest economy, after Germany and France. Italy is also the globe’s eighth-largest economy, with a government that has issued the third-largest amount of sovereign bonds. There is no comparison between the threat that the small economy of Greece presented to the European or global markets and the threat that an Italian financial crisis will pose. Of course, there is nothing new about Italy’s being in an ungovernable political mess. The country has averaged about one government per year since World War II. Its economic decline relative to its eurozone partners, particularly those to the North, is more recent, dating from 1999 when Italy adopted the euro and lost its ability to revalue its currency.

This post was published at FinancialSense on 12/05/2016.

Is The Market Flashing The Hindenburg Omen Warning? – Episode 1144a

The following video was published by X22Report on Dec 5, 2016
Gold was slammed by using 3.5 million of notional gold in the futures market. Retail jobs are offset by holiday hiring, reminder these jobs are temporary. The Fed labor market contracts for the 5th consecutive time, signalling a recession /depression warning. New study shows that government regulations, licensing is a job killer. The market is flashing the Hindenburg Omen warning which means when all criteria is met the market will crash. The Italian government voted ‘NO’ and Renzi will resign, maybe. The push for a cashless society is now on, the central bankers prepare the electronic payment system to be instantaneous. Turkey asking its people to drop the dollar, use the lira and gold instead.

The Next Big Silver Opportunity – Gregory Crowe of Silver One Resources

The following video was published by FutureMoneyTrends on Dec 5, 2016
This interview is a much needed introduction to a fantastic opportunity in the mining space. Silver One is a comapny that came about through 3 property acquisitions from First Mining Finance. Gregory Crowe, the CEO who we’re interviewing today was literally pulled out of retirement to lead this company and we expect him to do extremely well with his over 30 years experience in the space. Greg explains what the market sentiment is, the cause of the recent correction and what Trump in Office means for Commodities in general.

Jim Rogers on Trump Win: We Need to Return to Free Markets

The following video was published by VictoryIndependence on Dec 5, 2016
Legendary investor Jim Rogers is here with us; his analysis shows how deserving he is of his incredible internet fame. Today we discuss his thoughts on the Trump presidency’s effect on US & World markets, China tensions, the Federal Reserve rate hike which he guarantees for December and more. You definitely won’t get bored in this internet nor will you be disappointed by one of the most experienced and honest investors of our day.

Meet the 2017 FOMC

Out with the old and in with the new. It happens every year with the Federal Open Market Committee (FOMC) and the regional bank presidents who have a vote on that committee. The turnover occurs January 1, and it’s important to know who the new voters will be since their policy views will go a long way toward shaping the outlook for the global economy and the capital markets.
A Little Background
When it is at full capacity, there are twelve voting members on the FOMC: the seven members of the Board of Governors and five of the twelve Federal Reserve Bank presidents.
The president of the Federal Reserve Bank of New York has a permanent vote on the committee, so the remaining four presidents with a vote rotate annually. They serve one-year terms beginning on January 1 each year. Other Federal Reserve bank presidents attend the FOMC meetings and contribute to the discussions, but they do not cast a vote for setting policy.
The members of the Board of Governors are nominated by the President of the United States and are confirmed by the Senate. There are currently two vacancies on the Board of Governors. Consequently, there are only ten voting members on the FOMC at the moment.
As an aside, President Obama nominated Allan Landon and Kathryn Dominguez to fill the two vacancies on the Board of Governors, yet neither had a confirmation hearing. Neither will be having a confirmation hearing either considering there will be a Republican president in 2017 who will be making his own nominations for those open seats. Those confirmation hearings are certain to be held, too, by the GOP-controlled Senate, so the Federal Open Market Committee will be operating again at full strength in due time.

This post was published at FinancialSense on 12/05/2016.

A Look At This Week’s “Other” Big Event

With the Italian referendum now in the rearview mirror, the market’s attention focuses on this Thursday’s second most important event, the ECB meeting on Thursday. Here the biggest question is whether, alongside the now widely expected extension of the ECB’s QE which is set to mature in March 2017, and which most analysts believe will be prolonged until at least September 2017, Mario Draghi will also announce some form of tightening or tapering of QE purchases or an eventual formal ending of its asset purchases, as Reuters hinted in a trial balloon report last week.
As readers will recall, on December 1 Reuters reported that in advance of its March 2017 meeting, the ECB was considering sending a “formal signal after its policy meeting next Thursday that the program will eventually end.” It added that skeptics of more stimulus on the bank’s Governing Council “have accepted that an extension beyond the current expiry date of March is inevitable given weak underlying inflation and heightened political risk.”
The question remains how to structure that extension. According to report, much of the preparatory staff work had focused on a six-month extension at a steady pace of 80 billion euros per month, an option favored by many as growth is sluggish, inflation lacks momentum and political risk from key elections keeps the chances of market volatility high, three sources said. But some have indicated they would favor an extension at lower volumes, for example nine months at 60 billion euros a month, fearing that a straight extension could make the program appear open-ended, two of the sources said.

This post was published at Zero Hedge on Dec 5, 2016.

Forget Italy, Turkey Is The Main Course

While investors are focused on Italy, Bloomberg’s Mark Cudmore warns that another Mediterranean country is poised to grab their attention very soon. A currency crisis in Turkey is rapidly deteriorating, setting the stage for dramatic and unscheduled central bank action.
The lira has weakened by more than 11% in the last six weeks against an equally weighted dollar-euro basket. This devaluation is exacerbating the situation rather than providing a relief valve.

This post was published at Zero Hedge on Dec 5, 2016.