US Retail Companies Have a Massive Bill to Pay Come 2018

Right now, retail stores are closing at a pace that we haven’t seen since the 2008-2009 financial crisis. Some are calling it a ‘retail apocalypse’ as a number of major headwinds approach, including increasing pressure from Amazon and the sad fact that most brick-and-mortar retailers simply built way too many stores and borrowed too much money to do so.
Though many are likely aware of the above, what isn’t so well known is how much debt is coming due starting next year. That’s really the heart of the issue, which is why America’s ‘Retail Apocalypse’ Is Just Getting Started, Bloomberg’s Matt Townsend explained to Financial Sense Newshour on today’s podcast.
Debt Is the Main Challenge Retailers Face
Though online retailers are definitely a threat and many traditional retail businesses are overstored, what’s really going to drive the shakeout of legacy retailers is debt.
‘What really drives a company out of business is, if they have a lot of debt and their business is deteriorating, that will force them into bankruptcy and potentially liquidation,’ Townsend said.
And the fact is, a lot of this debt is starting to come due next year, Townsend stated, and many retailers may not to be able to pay it off or refinance it.

This post was published at FinancialSense on 11/29/2017.

High-End Real Estate Starting to Enter Crash Mode

The high-end market in Connecticut is starting to decline. The hedge fund manager Stanley Druckenmiller bought his estate in 2004 for $23 million. He had it on the market for $31.5 million. The best offer he got was $25 million. He took the money and ran. Smart move! With a real estate tax of about $154,000 annually, looks like a break-even deal after 13 years.

This post was published at Armstrong Economics on Nov 30, 2017.

‘The money is just sitting there…doing nothing for society’

Of all the disturbing side-effects of modern monetary policy, the worst might be the way artificially-low interest rates encourage small savers to take outsize risks. Now governments are starting to insist:
How Denmark Is Trying to Get Savers to Invest in Risky Assets
(Bloomberg) – In the country with the longest history of negative interest rates, an experiment is under way. The minister in charge of Denmark’s finance industry wants savers to shift some of the billions of kroner now in bank deposits over to riskier assets.
Danes have about 840 billion kroner ($135 billion) in bank deposits, the latest central bank figures show. Nykredit, the biggest Danish mortgage bank, estimates that number will continue to grow through the end of 2017, marking a record.
But those bank deposits pay no interest. Add the effect of inflation, and savers are actually losing money. For corporate clients, banks charge a fee to hold their deposits, making the loss even bigger.

This post was published at DollarCollapse on NOVEMBER 29, 2017.

US Gross National Debt Jumps $723 billion in 12 Weeks, Yellen ‘Very Worried about Sustainability of US Debt Trajectory’

But only a few lost souls in Congress care. Even as lawmakers are trying to cobble together a tax-cut bill that would cut revenues by $1.5 trillion over ten years, the gross national debt has spiked $723 billion over the past 12 weeks since Congress suspended the ‘debt ceiling.’ It just hit $20.57 trillion, or 105% of GDP.
Over the past six years, since November 2011, the gross national debt has surged nearly 40%, or by $5.8 trillion. Back in 2011, gross national debt amounted to 95% of GDP. Before the Financial Crisis, it was at 63% of GDP. There are no signs that the relentless rise in the debt is slowing down. On the contrary – the tax cuts are going to steepen the curve:
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In the chart above, note the last three debt-ceiling fights – the flat lines in 2013, 2015, and 2017, followed each time by an enormous spike when the debt ceiling was lifted or suspended, and when the ‘extraordinary measures’ with which the Treasury keeps the government afloat were reversed.

This post was published at Wolf Street on Nov 30, 2017.

The US Aristocracy’s Smear-Russia Campaign: Big Brother At Work

Authored by Eric Zuesse via The Strategic Culture Foundation,
Billionaires, both liberal and conservative ones, own, and their corporations advertise in and their ‘charities’ donate to, America’s mainstream (and also many ‘alternative news’) media.
They do this not so as to profit directly from the national ‘news’media (a money-losing business, in itself), but so as to control the ‘news’ that the voting public (right and left) are exposed to and thus will accept as being ‘mainstream’ and will reject all else as being ‘fringe’ or even ‘fake news’, even if what’s actually fake is, in fact, the billionaires’ own mainstream ‘news’, such as their ‘news’media had most famously ‘reported’ about ‘Saddam’s WMD’ (but the’news’media never changed after that scandal – even after having pumped uncritically that blatant lie to the public).

This post was published at Zero Hedge on Nov 30, 2017.

Frankfurt: 20 New Residential Skyscrapers Are Being Built To Meet Brexit Demand

Last month, we discussed how Frankfurt was emerging as the clear winner. When UBS staff were asked to rank which city they would prefer to be relocated to, their options were Frankfurt, Amsterdam and Madrid. Our top picks would have been Paris and Dublin, which didn’t even make the short list. On 19 October 2017, Goldman’s Chairman, Lloyd Blankfein, garnered lots of media attention after he tweeted.
“Just left Frankfurt. Great meetings, great weather, really enjoyed it. Good, because I’ll be spending a lot more time there. #Brexit.”
If Lloyds is thinking about buying himself a smart pied-a-terre in Frankfurt, he’s going to have plenty of options as a Brexit-driven construction boom is taking place in the city. The sharp rise in residential property prices is justifying the construction of ‘skyscrapers’, as Bloomberg explains.
The prices for new condominiums in Frankfurt have now reached such a high level that it pays off for project developers to build high-rise residential buildings and more and more such towers are being built in the German financial capital. This emerges from an assessment by consulting company Bulwiengesa AG.
In 2017 alone, asking prices rose by 15 percent compared to the previous year. A total of eight residential high-rise buildings have been completed since 2014 in the city. 20 more could be added by 2022. Five are currently under construction and another 15 are planned. These are key findings of the study.

This post was published at Zero Hedge on Nov 30, 2017.

29/11/17: Four Omens of an Incoming Markets Blowout

Forget Bitcoin (for a second) and look at the real markets.
Per Goldman Sachs research, current markets valuation for bonds and stocks are out of touch with historical bubbles reality: As it says on the tin,
‘A portfolio of 60 percent S&P 500 Index stocks and 40 percent 10-year U. S. Treasuries generated a 7.1 percent inflation-adjusted return since 1985, Goldman calculated — compared with 4.8 percent over the last century. The tech-bubble implosion and global financial crisis were the two taints to the record.’
Check point 1.
Now, Check point 2: The markets are already in a complacency stage: ‘The exceptionally low volatility found in the stock market — with the VIX index near the record low it reached in September — could continue. History has featured periods when low volatility lasted more than three years. The current one began in mid-2016.’

This post was published at True Economics on Nov 29, 2017.

Is The Left Self-Destructing, Or Is Something Else Going On?

The temptation to revel in the implosion of the extreme political Left is high, and it’s understandable. I could go through a long list of insane offenses by the cultural Marxist cult of the church of “social justice,” but I think this latest example summarizes the problem nicely. In this video, teaching assistant Lindsay Shepard at Wilfred Laurier University in Canada is reprimanded and brow beaten by two professors for daring to commit the heresy of showing her students BOTH sides of the debate over transgenderism and pronoun politics.
The zealotry on display here by these professors is indicative of a deep-rooted cancer within the Left. Shepard was not attempting to troll her class with misinformation or subtly manipulate them with propaganda, in fact she wasn’t seeking to pressure them to support either viewpoint. She was not violating anyone’s private property rights to assail them with her arguments, either. Her only goal was to show people in a public space that there are in fact at least two opposing viewpoints on the issue in question. But in a cult it is unacceptable to acknowledge that there are different ways of thinking from the prevailing doctrine. Other beliefs and evidence must be filtered out completely, otherwise, the devout members of the cult might be faced with uncertainty.
If an ideological system is so fragile that it cannot tolerate the slightest hint of legitimate counter-evidence, then something is very wrong with that system. If that system is incapable of arguing its merits using facts and instead relies on the argument of “How dare you!,” the only things that could possibly keep it alive are threats of force and terror.

This post was published at Alt-Market on Thursday, 30 November 2017.

Canadian Finance Minister Admits Selling Stock but Denies It Was Because He Knew Tax Hikes were Bearish

The Canadian Finance Minister Bill Morneau is refusing to say whether he sold millions of dollars worth of company stock just days before introducing tax changes that may have caused share prices to drop. This type of insider-trading is what politicians always manage to get away with no matter what the country. This dispute is rather interesting. Here the opposition is accusing him of selling the stock because he knew that raising taxes would cause the stock to drop. This is showing that the politicians were well aware of raising taxes would be bearish for the Canadian economy. That’s just OK as long as they get theirs.

This post was published at Armstrong Economics on Nov 30, 2017.

WaPo Reporter Caught On Hidden Camera Being A Bit Too Honest; Admits “No Evidence” Of Trump-Russia Collusion

After exposing the shocking, yet predictable, political bias of journalists at CNN and New York Times, Project Veritas has now set their sights on the Washington Post. In a candid conversation with an undercover Project Veritas journalist, the Post’s National Security Director, Adam Entous, put himself in danger of being a bit too honest, at least by his employer’s standards, by admitting that “there’s no evidence of [Trump-Russia collusion] that I’ve seen so far.” Entous goes on to admit that “it’s a fucking crap shoot” and that he has no idea how Mueller’s investigation might turn out.
Entous: “Our reporting has not taken us to a plcae where I would be able to say with any confidence that the result of it is going to be the president being guilty of being in cahoots with the Russians. There’s no evidence of that that I’ve seen so far.”
PV Journalist: “There has to be something, right?”
Entous: “Maybe, maybe not. It could just be lower-level people being manipulated or manipulating, but it’s very hard to, it’s really…It’s a fucking black box.”
“We’ve seen a lot of flirtation, if you will, between them but nothing that, in my opinion, would rank as actual collusion. Now that doesn’t mean that it doesn’t exist, it just means we haven’t found it yet. Or maybe it doesn’t exist.”
“I mean it’s a fucking crap shoot. I literally have no prediction whatsoever as to what would happen, and I do all the stuff for the Post on this so…”

This post was published at Zero Hedge on Nov 29, 2017.

Eliminating the State and Local Tax Deduction Is a Terrible Idea

The tax “reform” currently being discussed in Washington is mostly a political exercise for politicians who can use the process to extract more campaign contributions from supporters, and punish non-supporters. The actual tax burden imposed on Americans overall will change little.
The proposed elimination of the deduction for state and local taxes (SALT) is an excellent illustration of how the tax reform is really about playing political games. Forever in pursuit of “revenue neutral” tax reform, the GOP is simply turning to the elimination of the SALT deduction so it can raise federal revenues, and this allows for a tax cut for some other well-heeled special interest group. Using bizarre “logic,” supporters of the deduction’s elimination claim that an increase in the federal tax burden will somehow lower state and local taxes – some day. Why? They imagine that if they raise federal taxes for people in states with high taxes (i.e., California, New York) then the majority of voters in those states will then be clamoring for a cut in state and local taxes. The GOP also relies on the tired claim that that a tax deduction (e.g., the home mortgage interest deduction) “subsidizes” those who claim the exemption. But only in the Orwellian world of Washington doublespeak is a tax break a “subsidy.”

This post was published at Ludwig von Mises Institute on 11/29/2017.

Millennials Saved Thanksgiving Weekend

While online spending surged, the overall picture for Thanksgiving weekend spending was more mixed as the traditional ‘bricks and mortar’ retailers continued to struggle. Nevertheless, overall spending was about 4% higher. The National Retail Foundation (NRF) estimated that 174 million Americans shopped online or in stores over the period (Thursday to Monday), versus 164 million the previous year, although the latter excluded Cyber Monday. According to Bloomberg.
‘The big takeaway here is: Gone are the days you could measure the success of this weekend by looking at a single metric,’ NRF Chief Executive Officer Matthew Shay said on a conference call.
It’s also difficult to tell from the NRF data how e-commerce sales compared with brick-and-mortar shopping. But other surveys have indicated that physical chains saw smaller crowds this year. The research firm ShopperTrak found that shopper visits declined 1.6 percent combined on Thanksgiving and Black Friday.
Overall spending in the holiday season is expected to rise as much as 4 percent from last year, helped by low unemployment and rising home values. The purchases will amount to about $680 billion in November and December, the Washington-based NRF has estimated.

This post was published at Zero Hedge on Nov 29, 2017.