Liberals Love Trump’s Tax Plan (When Told It’s Bernie’s)

President Donald Trump’s proposal for comprehensive tax reform was almost immediately dismissed as heartless and impractical by his political opponents.
But Campus Reform wondered what would some of those opponents think if they were told the same plan was being proposed by someone they adore – Senator Bernie Sanders?
To find out, we headed to George Washington University to ask students their opinions on Trump’s new tax plan. WIthout much explanation, the students immediately made clear their distaste for the plan.
‘It’s not the most efficient, nor beneficial to the general populus,’ said one student when asked her opinion of Trump’s plan.
‘It’s better for the upper class than anyone else,’ added another.
After watching student after student express their disapproval of the plan, we then asked those same students what they thought of Senator Bernie Sanders’ new tax plan.
Immediately, they expressed excitement and support after hearing the details of the plan.
The only problem for them? There was no tax plan for Senator Sanders. The plan they loved was actually President Trump’s.
How did they react?
Enjoy…


This post was published at Zero Hedge on Oct 21, 2017.

In The Shadows Of Black Monday – “Volatility Isn’t Broken… The Market Is”

Authored by Christopher Cole via Artemis Capital Management,
A full version of the article is available on the Artemis website.
Volatility and the Alchemy of Risk
The Ouroboros, a Greek word meaning ‘tail devourer’, is the ancient symbol of a snake consuming its own body in perfect symmetry. The imagery of the Ouroboros evokes the infinite nature of creation from destruction. The sign appears across cultures and is an important icon in the esoteric tradition of Alchemy. Egyptian mystics first derived the symbol from a realphenomenon in nature. In extreme heat a snake, unable to self-regulateitsbody temperature, will experience an out-of-control spike in its metabolism. In a state of mania, the snake is unable to differentiate its own tail from its prey, and will attack itself, self-cannibalizing until it perishes. In nature and markets, when randomness self-organizes into too perfect symmetry, order becomes the source of chaos.
The Ouroboros is a metaphor for the financial alchemy driving the modern Bear Market in Fear. Volatility across asset classes is at multi-generational lows. A dangerous feedback loop now exists between ultra-low interest rates, debt expansion, asset volatility, and financial engineering that allocates risk based on that volatility. In this self-reflexive loop volatility can reinforce itself both lower and higher. In a market where stocks and bonds are both overvalued, financial alchemy is the only way to feed our global hunger for yield, until it kills the very system it is nourishing.
The Global Short Volatility trade now represents an estimated $2+ trillion in financial engineering strategies that simultaneously exert influence over, and are influenced by, stock market volatility. We broadly define the short volatility trade as any financial strategy that relies on the assumption of market stability to generate returns, while using volatility itself as an input for risk taking. Many popular institutional investment strategies, even if they are not explicitly shorting derivatives, generate excess returns from the same implicit risk factors as a portfolio of short optionality, and contain hidden fragility.

This post was published at Zero Hedge on Oct 21, 2017.

“It’s Very Common”: Baltimore Teacher Admits To Passing Students That Never Showed For A Single Day Of Class

Teaching can be a thankless job. Talk to almost any educator in the public school system and you’re bound to get a earful about grueling hours, disrespectful kids, infuriating bureaucracy and minimal pay. As such, it looks increasingly like the teachers in Baltimore’s public schools have decided to just stop teaching altogether and pass every student that walks through their doors.
In the latest installment of a growing scandal revealed by “Project Baltimore”, an investigative reporting initiative launched by Sinclair Broadcast group in March 2017 to examine Baltimore’s public school system, a teacher at Calverton Elementary/Middle in west Baltimore has come forward with proof that grade changing is not only common in his school district but explicitly encouraged by senior administrators.
According to Fox45, below is the end of year text message that Calverton teachers received their principal, Martia Cooper, instructing them to “please double check end of the year averages and make sure they are 60 and above.” The message went on to say that any “averages below 60” should be “corrected” so that failing students could be pushed through the system.
‘Good Morning people! (Secretary) is printing report cards so finally you can get cumes finished. Please double check end of year averages and make sure they are 60 and above, except our four retention candidates (2 elem and 2 grade 7). If you find any grade averages below 60, pkesss (sic) have (secretary) correct and give me a copy of those student names. Thanks!’

This post was published at Zero Hedge on Oct 21, 2017.

The $2.5 Trillion Paradox: “While The Short End Is Optimistic, The Long End Has Never Been More Pessimistic”

Last weekend, as Deutsche Bank’s derivatives strategist Aleksandar Kocic was looking at the spread between the short and long end of the curve, and while contemplating the lack of market volatility, he concluded that “given where long rates are, Fed appears as overly hawkish – it has only two more hikes to go and, for volatility and risk premia to reprice higher, the gap has to widen. As is appears unlikely that the Fed will be cutting rates any time soon, the gap could widen only if the Long rates sell off.”
In practical terms – if only for bond traders – this meant that “for anything to happen, 5Y5Y sector has to move higher”, however the $2.5 trillion question is whether this sell off in long rates will be violent or controlled. Kocic concluded that “This is the catalyst for everything.”
In other words, those lamenting the pervasive complacency and the ubiquitous lack of volatility in the market, may not have much more to wait: after just two more rate hikes, absent a parallel move wider across the rest of the curve, the Fed’s “breathing space” will collapse, and Yellen, or rather her successor, will lost control of both vol markets and long-dated yields, as the Fed effectively hikes into a self-made recession, where it itself inverts the yield curve. That would be a problem.

This post was published at Zero Hedge on Oct 21, 2017.

Low Interest Rates Subsidize Wealthy Households

When the economy begins to sink into recession, politicians, mainstream economists, policy wonks, and the Federal Reserve begin beating the economic stimulus drum.
Politicians, however, disagree over the type of stimulus to implement. The center-left party proposes greater expenditures on public assistance programs. The center-right party supports permanent tax rate reductions. The center-left party opposes tax cuts because they say it benefits the rich. The center-right party opposes raising government expenditures because it increases government debt. This discord generally results in a temporary compromise where government expenditures are boosted and tax rates are cut. This compromise is called ‘discretionary fiscal stimulus.’
While the debate over discretionary fiscal stimulus has to overcome Senate filibusters and heated House debates, the central bankers at the Fed quickly implement monetary stimulus. Boosting aggregate demand is the intended purpose of it and discretionary fiscal stimulus. In mainstream economic theory, greater aggregate demand lowers unemployment and raises GDP. In spite of grave warnings from Austrian-school economists, the Fed pursues these goals by lowering interest rates via an expansion credit.

This post was published at Ludwig von Mises Institute on October 22, 2017.

Key Charts: Gold is Cheap and US Recession May Be Closer Than Think

by Dominic Frisby of Money Week
Every year, Ronald-Peter Stoeferle and Mark J Valek of investment and asset management company Incrementum put together the report In Gold We Trust – 160-plus pages of charts and thoughts, mostly gold-related, on the state of the world’s finances.
There’s so much to look at and consider. It’s a sort of digital equivalent of a coffee-table book.
Yesterday I got an email from them, containing a ‘best of’ – a compendium of some of the best charts from this year’s report.
I thought in today’s Money Morning, we might flick through some of them…

This post was published at Gold Core on October 21, 2017.

20/10/17: Lancet Report on Impact of Pollution

A top-level, comprehensive report compiled by the Lancet Commission details estimates of economic and human costs of pollution worldwide. The full report is available here: Before I summarise some of its main findings, it is worth noting that such an undertaking is, by definition, a difficult one and the one that involves a lot of assumptions, models, estimates and uncertainty around its findings. There will be debates and there will be those who disagree with the report findings. However, two things are clear:
Pollution is costly in terms of health, life, quality of human capital (young age development, etc), and economically; Incidences of pollution impacts are bound to be concentrated in the areas where other factors (e.g. poverty, location of extraction industries, etc) are also at play.

This post was published at True Economics on Saturday, October 21, 2017.

The Case Against Gold as a Central Bank Asset

What I’m about to write here, I have believed for close to 40 years. I wrote about it decades ago in Remnant Review. I’m not going to look through all of the published issues to find when I wrote it.
What good is gold in the vaults of any central bank? I understand why it’s a good idea to have bullion gold coins in your “vault.” I don’t understand why it’s a good idea for central bankers to put gold bullion bars in their vaults.
Central banks buy gold from the general public. They also buy gold from each other. Why do central bankers buy gold? They have to pay good money for it, meaning bad central bank fiat money.
They can buy any financial asset. Why do they buy gold bullion? They never intend to sell gold to the public. So, they don’t intend to make a profit on their holdings of gold. It just sits there.
Central bankers don’t own the assets that the banks hold. It doesn’t matter to them personally whether it’s gold or government bonds.
THE GOLD COIN STANDARD
In the era of the gold coin standard, when citizens could bring in paper money and demand gold coins from a local bank, this transferred tremendous authority into the hands of the general public. The public could participate in a run on a local bank’s gold. If this took place nationally, this would cause a run on the central bank’s gold. This would force the central bank to stop inflating through fiat money. That was the great advantage of the gold coin standard. It transferred power into the hands of the general public. The general public could veto central bank policies of monetary inflation.
This is why all the governments of Western Europe outlawed the gold coin standard soon after World War I began in August 1914. Commercial bank runs began almost immediately. So, central banks and governments allowed commercial banks to break their gold contracts with their depositors. Then the central banks confiscated the gold in the commercial banks. They wound up with the public’s gold. It was a gigantic act of theft. It was the end of the gold coin standard. There was a huge loss of liberty.

This post was published at Gary North on October 19, 2017.

Simply Unaffordable: These Cities Make USA Housing Look Dirt Cheap

As the late Robert Palmer crooned, housing is simply unaffordable in many cities. And most of those cities are outside the USA.
(Bloomberg) – As people around the world move into cities and look for housing, one thing is clear: Most will have a hard time paying for it.
Average monthly take-home pay won’t cover the cost of buying a 1,000-square-foot residence or renting a three-bedroom home in any of the 105 metropolitan areas ranked by the Bloomberg Global City Housing Affordability Index – based on a general rule of thumb among U. S. lenders that people should spend no more than 28 percent of net income on housing costs. Only 12 cities would be considered affordable if they spend 50 percent.

This post was published at Wall Street Examiner by Anthony B Sanders ‘ October 20, 2017.

Mapping What Every State In America Is Best At

Company towns used to be a defining feature of the American economy. Nowadays, as Raul at HowMuch.net notes, thanks to globalization and offshoring, it is much harder to find employers that exert such influence over a small town(with a few notable exceptions).
That being said, specific industries still tend to grow in clusters and can dominate the economy of a particular region. To understand this new reality, we mapped the most important industries by state according to the U. S. Bureau of Economic Analysis, which takes into account an industry’s collective output as a percentage of the overall GDP. For simplicity, we excluded government jobs and real estate.

This post was published at Zero Hedge on Oct 20, 2017.

Catalonia’s Political Crisis Snowballs into an Economic Crisis

Independence would be ‘horrific’ and amount to ‘financial suicide,’ said Spain’s Economy Minister. But financial suicide for whom? It’s not easy being a Catalan bank these days. In the last few weeks the region’s two biggest lenders, Caixabank and Sabadell, have lost 9 billion of deposits as panicked customers in Catalonia have moved their money elsewhere. Many customers in other parts of Spain have also yanked their savings out of Catalan banks, but less out of fear than out of anger at the banks’ Catalan roots.
Moving their official company address to other parts of Spain last week may have helped ease that resentment, allowing the two banks to recoup some 2 billion of deposits. But the move has angered the roughly 2.5 million pro-independence supporters in Catalonia, many of whom have accounts at one of the two banks. Today they expressed that anger by withdrawing cash en masse.
Many protesters made symbolic withdrawals of 155 – a reference to Article 155 of the Spanish constitution, which Madrid activated today to impose direct rule over the semi-autonomous region. Others opted for 1,714 in a nod to the year 1714, when Barcelona was captured by the troops of King Felipe V, who then proceeded to suppress the rights of rebellious regions.

This post was published at Wolf Street on Oct 21, 2017.

Doug Noland: Arms Race in Bubbles

This is a syndicated repost courtesy of Credit Bubble Bulletin . To view original, click here. Reposted with permission.
The week left me with an uneasy feeling. There were a number of articles noting the 30-year anniversary of the 1987 stock market crash. I spent ‘Black Monday’ staring at a Telerate monitor as a treasury analyst at Toyota’s US headquarters in Southern California. If I wasn’t completely in love with the markets and macro analysis by that morning, there was no doubt about it by bedtime. Enthralling.
As writers noted this week, there were post-’87 crash economic depression worries. In hindsight, those fears were misplaced. Excesses had not progressed over years to the point of causing deep financial and economic structural maladjustment. Looking back today, 1987 was much more the beginning of a secular financial boom rather than the end. The crash offered a signal – a warning that went unheeded. Disregarding warnings has been in a stable trend now for three decades.
Alan Greenspan’s assurances of ample liquidity – and the Fed and global central bankers’ crisis-prevention efforts for some time following the crash – ensured fledgling financial excesses bounced right back and various Bubbles hardly missed a beat. Importantly, financial innovation and speculation accelerated momentously. Wall Street had been emboldened – and would be repeatedly.

This post was published at Wall Street Examiner on October 21, 2017.

MARKETS… WE GOT TROUBLE: Debt & Brain-Dead Retail Investors Prop Up Stocks

As the Dow Jones Index hits another all-time high today, smart money is rushing to the exits. You see, smart money knows when something is too good to be true. Unfortunately for the retail investor who is suffering from acute BRAIN DAMAGE, they are doing quite the opposite. As institutions sellout on each new market price rise, retail investors are happily buying… hand over fist.
And why shouldn’t they? These are good times. Well, maybe not for Americans living in Houston, parts of Florida, California or in Puerto Rico. Whatever happened to the news on the massive flooding and hurricane damage in Houston, Florida and Puerto Rico? I remember seeing videos of Miami Beach High-Rise Condos with seawater 5-8 feet surrounding the entire area. Does anyone have an idea of what happens to electrical systems when salt water floods buildings? It’s not good.
Regardless… the amount of destruction major U. S. cities have experienced in the past three months is like nothing we have witnessed before. Regrettably, a lot of these homes and businesses will never be rebuilt. Not only don’t we have the money to do it, more importantly, we also don’t have the available energy. While the massive destruction by hurricanes, flooding and fire have not impacted the stock market currently, they will.

This post was published at SRSrocco Report on OCTOBER 20, 2017.

Pat Buchanan Asks: “Is Liberalism A Dying Faith?”

Asked to name the defining attributes of the America we wish to become, many liberals would answer that we must realize our manifest destiny since 1776, by becoming more equal, more diverse and more democratic – and the model for mankind’s future.
Equality, diversity, democracy – this is the holy trinity of the post-Christian secular state at whose altars Liberal Man worships.
But the congregation worshiping these gods is shrinking.
And even Europe seems to be rejecting what America has on offer.
In a retreat from diversity, Catalonia just voted to separate from Spain. The Basque and Galician peoples of Spain are following the Catalan secession crisis with great interest.
The right-wing People’s Party and far-right Freedom Party just swept 60 percent of Austria’s vote, delivering the nation to 31-year-old Sebastian Kurz, whose anti-immigrant platform was plagiarized from the Freedom Party. Summarized it is: Austria for the Austrians!

This post was published at Zero Hedge on Oct 20, 2017.

Moody’s: Hartford Default Likely on Yearly Deficits Seen to 2036 (Connecticut Already Has 2nd Worst Public Pension Underfunding Requiring $22,745 Person To Fix)

As we watch the alleged Federal government shutdown by politicians who crave spending more and more of YOUR money (without cutting spending), we see the same in various states and cities like Chicago, Illinois. Now Hartford CT is in on the overspending act.
(Bloomberg) – Moody’s says the city of Hartford is likely to default on its debt as early as November without additional concessions from Connecticut.
Moody’s sees Hartford’s operating deficits of $60 million to $80 million through 2036
Hartford will look to bondholders to restructure roughly $604 million in general obligation and lease debt, Moody’s says.
Moody’s sees additional grant revenue or amount equal to PILOT payments cutting view of operating deficits by over half.

This post was published at Wall Street Examiner by Anthony B Sanders, repost courtesy of Snake Hole Lounge. ‘ October 19, 2017.