Katy Perry, Gigi Hadid Banned From China As Victoria’s Secret Fashion Show Unravels

As we reported yesterday, this year’s Victoria’s Secret fashion show, which is slated to take place in Shanghai in just two weeks, is unraveling like a cheap lace thong thanks to Chinese authorities’ refusal to cooperate with its producers, and Communist Party’s decision to deny visas to some of the biggest stars who were slated to participate in the show.
The latest update on the deteriorating state of affairs comes via the New York Post, which has reported that US pop sensation Katy Perry – who was slated to perform at the show – and supermodel Gigi Hadid, who was supposed to walk in the show, have been indefinitely banned from China.
Sources told the Post’s infamous Page Six gossip section that the ‘Roar’ singer had tried applying for a visa to enter the Communist nation, but was denied by Chinese officials.
And while she was initially informed that she’d be able to gain access, the decision was apparently reversed after the government caught wind of a controversial incident from 2015, in which Perry donned a bright, glittery dress with sunflowers on it during a performance in Taipei, the capital of Taiwan.

This post was published at Zero Hedge on Nov 18, 2017.

We’re Living in the Age of Capital Consumption

When capital is mentioned in the present-day political debate, the term is usually subject to a rather one-dimensional interpretation: Whether capital saved by citizens, the question of capital reserves held by pension funds, the start-up capital of young entrepreneurs or capital gains taxes on investments are discussed – in all these cases capital is equivalent to ‘money.’ Yet capital is distinct from money, it is a largely irreversible, definite structure, composed of heterogeneous elements which can be (loosely) described as goods, knowledge, context, human beings, talents and experience. Money is ‘only’ the simplifying aid that enables us to record the incredibly complex heterogeneous capital structure in a uniform manner. It serves as a basis for assessing the value of these diverse forms of capital.
Modern economics textbooks usually refer to capital with the letter ‘C’. This conceptual approach blurs the important fact that capital is not merely a single magnitude, an economic variable representing a magically self-replicating homogenous blob but a heterogeneous structure. Among the various economic schools of thought it is first and foremost the Austrian School of Economics, which stresses the heterogeneity of capital. Furthermore, Austrians have correctly recognized, that capital does not automatically grow or perpetuate itself. Capital must be actively created and maintained, through production, saving, and sensible investment.

This post was published at Ludwig von Mises Institute on Nov 18, 2017.

18/11/17: North Korean Uncertainty and Market Impacts

S&P new post about the risks poised by North Korea is a neat summary of key actions and players involved (see the full note: And it is very interesting to those of us, who study the links between geopolitical risks and financial markets.
Two pieces of evidence are presented in the S&P note worth pondering: first, the rising frequency of the North Korea threat signals:

The above shows that starting with 2016, acceleration in the North Korea threat signals has been posing a departure from the previous trend. Structurally, this suggests that we are entering a new regime in terms of potential market spillovers from North Korean risks to global financial markets.

This post was published at True Economics on Saturday, November 18, 2017.

18/11/17: ECB Induces Double Error in the EU Policy Markets

In economics, two key market asymmetries/biases lead to the severe reduction in markets efficiency often marking the departure from theoretical levels of efficiency (speed, with which markets incorporate new relevant information into pricing decisions of markets agents) and the practical outcomes. These asymmetries or biases are: information asymmetry and agency problem.
For those, uninitiated into econospeak, information asymmetry (sometimes referred to as information failure), is a situation, in which one party to an economic transaction possesses greater knowledge of facts, material or relevant to the decision, than the other party. For example, a seller may know hidden information about a car on offer that is not revealed to the buyer. In more extreme example, a seller might actively conceal such information from a buyer. This can happen when a seller ‘prepares’ the car for sale by cleaning the engine, thus removing leaks and accumulations of oil and / or coolant that can indicate the areas where the problems might be.
The agency problem, also referred to as principal-agent problem, arises when an agent, acting on behalf of the principal, has distinct set of incentives from the principal. The resulting risk is that the agent will act in self-interest to undermine the goals and objectives of the principal. An example here would be a real estate agent contracted by the seller, while taking a commission kickback from the buyer. Or vice versa.

This post was published at True Economics on Saturday, November 18, 2017.

WTF Chart Of The Day: America’s Youngest Child Brides & Grooms

Between 2000 and 2015, at least 207,468 minors were married in the United States.
As Statista’s Martin Armstrong notes, despite an overall fall in child marriage since 2000 (25,583 to 9,247), there are still a shocking number of young children legally married in the country. Only 14 percent married other minors, meaning 86 percent wedded an adult.

This post was published at Zero Hedge on Nov 17, 2017.

I, Pencil

As I sat contemplating the miraculous make-up of an ordinary lead pencil, the thought flashed in mind: I’ll bet there isn’t a person on earth who knows how to make even so simple a thing as a pencil.
If this could be demonstrated, it would dramatically portray the miracle of the market and would help to make clear that all manufactured things are but manifestations of creative-energy exchanges, that these are, in fact, spiritual phenomena. The lessons in political economy this could teach!
There followed that not-to-be-forgotten day at the pencil factory, beginning at the receiving dock, covering every phase of countless transformations, and concluding in an interview with the chemist.
Had you seen what I saw, you, also, might have struck up a warm friendship with that amazing character, I, PENCIL.1
Being a writer in his own right, let I, PENCIL speak for himself:
I am a lead pencil – the ordinary wooden pencil familiar to all boys and girls and adults who can read and write.
Writing is both my vocation and my avocation; that’s all I do.

This post was published at Ludwig von Mises Institute on Nov 18, 2017.

“Beyond Resistance” – Soros, Pelosi Headline Left’s Biggest Dark Money Conference

A secretive three-day conference where big money liberal donors are plotting the next steps of the “resistance” will be headlined by Friday speeches by billionaire George Soros and Democratic House Minority Leader Nancy Pelosi, according to internal documents obtained by the Washington Free Beacon.
The Democracy Alliance, a donor club of deep-pocketed liberal donors that each pledge to direct hundreds of thousands of dollars in funding to approved left-wing groups, descended on California’s posh La Costa Resort on Wednesday morning for its fall donor summit. The group continued its tradition of secrecy, promising all members and guests of the summit their participation would “remain confidential.”
The first page of the conference agenda, which was obtained by the Washington Free Beacon and can be viewed in its entirety below, lays out “participation guidelines,” explaining that the Democracy Alliance is a “safe place” for donors and activists to meet.
Guests are instructed not to share members’ names with the press and not to post to any social media sites, to contact Democracy Alliance if “the media or a blogger” contacts them, and to “refrain from leaving sensitive materials out where others may find them.”
This latter directive was ignored.

This post was published at Zero Hedge by Brent Scher and Joe Schoffstall via FreeBeacon.com, Nov 17, 2017.

Spain’s Pension System Hits Crisis Point (and Everyone Ignores it)

But how did things get this bad?
By most measures sun-blessed Spain is an idyllic place to grow old in. Life expectancy is among the highest in the world, and the national pension fund’s payout ratio (pension as percent of final salary) is the second highest in Europe after Greece. But if current trends are any indication, that may soon be about to change.
The country’s Social Security Reserve Fund, which was meant to serve as a nationwide nest egg to guarantee future pension payouts, given Spain’s burgeoning ranks of pensioners, has been bled virtually dry by the government. This started ever so quietly in 2012 when the government began withdrawing cash from the fund. Some of it was used to fill part of the government’s own fiscal gaps while billions more were tapped to cover the Social Security system’s growing deficits. As a result the pension pot has shrunk from over 66 billion in 2011 to just 15 billion in 2016.
To avoid wiping out the fund altogether this year, the Spanish government extended a 10.1 billion interest-free loan to Spain’s social security system, which enabled it to pay out the two extra pension payments due in June and December. That way, only 7-7.5 billion will be tapped from Spain’s public pension nest egg. Emptying the pot altogether this year would have been politically unpalatable, says El Pas. Instead, it will be emptied next year as the social security system racks up yet another massive annual shortfall.

This post was published at Wolf Street on Nov 18, 2017.

The Hunt for Taxes Destroying Healthcare in Britain

The Hunt for Taxes is now creating a crisis in healthcare in Britain. The UK government is gearing up for a massive tax clampdown targeting private sector contractors. The UK Treasury estimates in its budget that this taxing of private contractors in healthcare will create 185m in new taxes for the year 2017/18. This is known as the IR35 regime, which will apply to hundreds of thousands of freelancers outside the public sector.
At the core of this is the issue where someone who is incorporated pays less tax and national insurance than an employee on the same income working freelance under contract. Many suspects that this is just a test run and the government will extend the tax increases to the private sector in a year.

This post was published at Armstrong Economics on Nov 18, 2017.

Weekend Reading: You Have Been Warned

Investors aren’t paying attention.
There is an important picture that is currently developing which, if it continues, will impact earnings and ultimately the stock market. Let’s take a look at some interesting economic numbers out this past week.
On Tuesday, we saw the release of the Producer Price Index (PPI) which ROSE 0.4% for the month following a similar rise of 0.4% last month. This surge in prices was NOT surprising given the recent devastation from 3-hurricanes and massive wildfires in California which led to a temporary surge in demand for products and services.
Then on Wednesday, the Consumer Price Index (CPI) was released which showed only a small 0.1% increase falling sharply from the 0.5% increase last month.

This post was published at Zero Hedge on Nov 17, 2017.

Canadians Paying Dearly for Their Housing

Another housing study has come to familiar conclusions: Canada boasts the least affordable housing in North America. With a median family income of just under $65,000 a year, it would take 7.5 years for a family to pay off the median-priced home valued at 485K. That’s if they were able to live on air and direct every single dime of income to pay off just their home for 7.5 years.
According to the latest International Housing Affordability Survey, a multiple of 3x income and under is considered affordable, and multiples over 5.1 are considered severely unaffordable. In Vancouver, this multiple is now 17.3 and in the greater Toronto area 7.5x. You can look up comparables on other NA cities at this link.

This post was published at FinancialSense on 11/17/2017.

A Plurality Of Voters Want Special Counsel To Investigate Clinton And Trump

Despite Jeff Sessions’ surprising insistence during his testimony before the House Judiciary Committee earlier this week that there’s ‘no factual basis’ to appoint a special counsel to investigate actions by Clinton and former FBI Director James Comey, a plurality of voters believe special prosecutors should be investigating both the Clinton and Trump campaigns, according to a recent study that was shared with the Hill.
The latest Harvard CAPS/Harris survey found that 44 percent of voters surveyed said a special counsel is needed to investigate both campaigns, meanwhile twenty-seven percent said only Trump needs to be investigated, while 21 percent said only Clinton needs to be investigated and nine percent said neither should be investigated.
The poll’s findings also showed that the number of voters who believe Special Counsel Mueller has found hard evidence of collusion is a paltry 38 percent, while 36 percent say there is no hard evidence yet and 27 percent saying they don’t know.
Unsurprisingly, the survey concluded that the public believes the Mueller investigation is hurting American democracy more than it is helping by implying that powerful, politically-connected Democrats who have the implicit support of the FBI and Deep State intelligence apparatus are immune to prosecution, while an outsider like Trump is not.

This post was published at Zero Hedge on Nov 17, 2017.

How Uncle Sam Inflates Away Your Life

‘Inflation is always and everywhere a monetary phenomenon,’ once remarked economist and Nobel Prize recipient Milton Friedman. He likely meant that inflation is the more rapid increase in the supply of money relative to the output of goods and services which money is traded for.
As more and more money is issued relative to the output of goods and services in an economy, the money’s watered down and loses value.
By this account, price inflation is not in itself rising prices. Rather, it’s the loss of purchasing power resulting from an inflating money supply.
Indeed, Friedman offered a shrewd insight. However, he also accompanied it with an opportunist mindset. Friedman saw promise in the phenomenon of monetary inflation. Moreover, he saw it as a means to improve human productivity and economic growth.
You see, a stable money supply was not good enough for Friedman. He advocated for moderate levels of monetary growth, and inflation, to perpetually stimulate the economy. By hardwiring consumers with the expectation of higher prices, policy makers could compel a relentless consumer demand.
This desire to harness and control the inflation phenomenon has infected practically every government economist’s brain since the early 1970s.

This post was published at Zero Hedge on Nov 17, 2017.

THE BIGGEST WEALTH TRANSFER IN HISTORY

What will happen between now and 2025? Nobody knows of course but I will later in this article have a little peek into the next 4-8 years.
The concentration of wealth in the world has now reached dangerous proportions. The three richest people in the world have a greater wealth than the bottom 50%. The top 1% have a wealth of $33 trillion whilst the bottom 1% have a debt $196 billion.
The interesting point is not just that the rich are getting richer and the poor poorer. More interesting is to understand: How did we get there? and what will be the consequences?
PANAMA & PARADISE PAPERS – SENSATIONALISM
As the socialist dominated media dig into the Panama Papers and now recently the Paradise Papers to attack the rich and tell governments to tackle the unacceptable face of capitalism, nobody understands the real reasons for this enormous concentration of wealth. Sadly no journalist does any serious analysis of any issue, whether it is fake economic figures or the state of the world economy.
Instead, all news is accepted as the truth while in fact a lot of news is fake or propaganda. The media is revelling in all the disclosures of offshore trusts and companies. The British Queen is being accused of having ‘hidden’ funds. The fact that offshore entities have been used legally for centuries for privacy, wealth preservation and creditor protection purposes is never mentioned. The media sell more much news by being sensational rather than factual.

This post was published at GoldSwitzerland on November 17, 2017.

“This Just Feels Like Death”: Analysts Flee Research Positions Amid MiFID II Changes

For the past couple of months, we’ve frequently shared our views that Europe’s MiFID II regulations, which force investment banks to charge for equity research instead of “giving it away” in return for trading commissions, could be a wake up call for 1,000’s of highly paid research analysts who were about to have their true ‘value add’ subjected to a market bidding test. Here are just a couple of examples:
Deutsche Bank Forced To Slash Fixed-Income Research Price By Half On Lackluster Demand New European Regulations Set To Crush Equity Research Budgets By $300 Million Macquarie Identifies The Winners And Losers Of MiFID II Sticker Shock: Small Hedge Funds Seen Ditching I-Banking Research Under MiFID Now, per a note from Reuters, it seems that a growing number of equity research analysts are finally waking up to the fact that hedge funds don’t really have a burning desire to drop $400,000 per year on reports drafted by a 23-year-old recent college grad that do little more than summarize free SEC filings. Who could have known?

This post was published at Zero Hedge on Nov 17, 2017.