http://www.zerohedge.com/fullrss2.xml/contributed/contributed/news/In%20three%20states%E2%80%94Arkansas%2C%20Nebraska%20and%20South%20Dakota%E2%80%94voters%20approved%20ballot%20measures%20in%20November%20to%20increase%20the%20minimum%20wage%2C%20effective%20Jan.%201%2C%20according%20to%20the%20National%20Conference%20of%20State%20Legislatures.%20%20Alaska%20voters%20passed%20an%20initiative%20raising%20the%20minimum%20wage%20in%20the%20state%20to%20begin%20Jan.%201.%20But%20the%20pay%20increase%20isn%E2%80%99t%20effective%20until%2090%20days%20after%20the%20election%20results%20are%20certified%2C%20Feb.%2024.%20%20Meanwhile%2C%20legislatures%20in%20seven%20states%E2%80%94Connecticut%2C%20Hawaii%2C%20Maryland%2C%20Massachusetts%2C%20Rhode%20Island%2C%20Vermont%20and%20West%20Virginia%E2%80%94approved%20laws%20boosting%20the%20minimum%20wage.%20Those%20laws%20go%20into%20effect%20today.%20%20Though%20Delaware%20and%20Minnesota%E2%80%99s%20state%20lawmakers%20voted%20to%20raise%20the%20minimum%20wage%2C%20those%20increases%20won%E2%80%99t%20begin%20until%20June%20and%20August%2C%20respectively.%20The%20District%20of%20Columbia%20will%20see%20a%20minimum%20wage%20hike%20beginning%20July%201. en Europe: Migrant Crisis Reaches Spain http://www.zerohedge.com/news/2017-08-16/europe-migrant-crisis-reaches-spain <p><a href="https://www.gatestoneinstitute.org/10840/spain-migrant-crisis"><em>Authored by Soeren Kern via The Gatestone Institute,</em></a></p> <ul> <li>&quot;The biggest migration movements are still ahead: Africa&#39;s population will double in the next decades. A country like Egypt will grow to 100 million people, Nigeria to 400 million. In our digital age with the internet and mobile phones, everyone knows about our prosperity and lifestyle.&quot; &mdash; German Development Minister Gerd Müller.</li> <li><em><strong>&quot;Young people all have cellphones and they can see what&#39;s happening in other parts of the world, and that acts as a magnet.&quot; </strong></em>&mdash; Michael Møller, Director of the United Nations office in Geneva.</li> <li>&quot;If we do not manage to solve the central problems in African countries, ten, 20 or even 30 million immigrants will arrive in the European Union within the next ten years.&quot; &mdash; Antonio Tajani, President of the European Parliament.</li> </ul> <p><strong>Spain is on track to overtake Greece as the second-biggest gateway for migrants entering Europe by sea.</strong> The sudden surge in migration to Spain comes amid a crackdown on human smuggling along the Libya-Italy sea route, currently the main migrant point of entry to Europe.</p> <p>The westward shift in migration routes from Greece and Italy implies that <strong>Spain, situated only ten miles from Africa by sea, may soon find itself at the center of Europe&#39;s migration crisis.</strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/08/14/20170816_migrant.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/08/14/20170816_migrant.png" style="width: 500px; height: 354px;" /></a></p> <p><strong>More than 8,300 illegal migrants have reached Spanish shores during the first seven months of 2017 &mdash; three times as many as in all of 2016, <a href="http://migration.iom.int/europe/" target="_blank">according</a> to the International Organization for Migration (IOM).</strong></p> <p><a href="https://www.statista.com/chart/10327/migrant-sea-arrivals-across-the-mediterranean/" title="Infographic: Refugee Arrivals in the Mediterranean in Perspective | Statista"><img alt="Infographic: Refugee Arrivals in the Mediterranean in Perspective | Statista" src="https://infographic.statista.com/normal/chartoftheday_10327_migrant_sea_arrivals_across_the_mediterranean_n.jpg" style="height: 356px; width: 500px;" /></a><strong> </strong></p> <p><em>You will find more statistics at <a href="https://www.statista.com/">Statista</a></em></p> <p>Thousands more migrants have entered Spain by land, primarily at the Spanish enclaves of Ceuta and Melilla on the north coast of Morocco, the European Union&#39;s only land borders with Africa. Once there, migrants are housed in temporary shelters and then moved to the Spanish mainland, from where many continue on to other parts of Europe.</p> <p>In all, some 12,000 migrants have <a href="http://migration.iom.int/europe/" target="_blank">arrived</a> in Spain so far this year, compared to 13,246 for all of 2016. By comparison, 14,156 migrants have arrived in Greece so far in 2017.</p> <p>Italy remains the main migrant gateway to Europe, with around 97,000 arrivals so far this year, compared to 181,436 for all of 2016. Italy has been the main point of entry to Europe since the EU-Turkey <a href="http://www.consilium.europa.eu/en/press/press-releases/2016/03/18-eu-turkey-statement/" target="_blank">migrant deal</a>, signed in March 2016, shut off the route from Turkey to Greece, at one time the preferred point of entry to Europe for migrants from Asia and the Middle East. Almost 600,000 migrants have arrived in Italy during the past four years.</p> <p><img src="https://www.gatestoneinstitute.org/pics/2703.jpg" style="border-width: 0px; border-style: solid; width: 499px; height: 333px;" /></p> <p><em>Migrants wait to be rescued by crewmembers from the Migrant Offshore Aid Station (MOAS) Phoenix vessel on June 10, 2017 off Lampedusa, Italy. (Photo by Chris McGrath/Getty Images)</em></p> <p>In May, Italy <a href="https://www.euractiv.com/section/justice-home-affairs/news/italy-inks-deal-with-libya-neighbours-to-stem-migrant-flow/" target="_blank">signed</a> a deal with Libya, Chad and Niger to stem the flow of migrants across the Mediterranean through improved border controls. In July, Italy also <a href="https://www.ft.com/content/b3022de6-5fe8-11e7-91a7-502f7ee26895" target="_blank">reached</a> a deal with France and Germany to tighten the regulation of charities operating boats in the Mediterranean and to increase funds to the Libyan coast guard.</p> <p><strong>Since then, the Libyan coast guard has prevented thousands of migrants from leaving the Libyan coast for Italy. </strong>The crackdown, however, has sent would-be migrants scrambling for an alternative route to cross the Mediterranean. This appears to explain the increase in migrants arriving in Spain.</p> <p>On August 14, Frontex, the European Union&#39;s border agency, <a href="http://frontex.europa.eu/news/migratory-flows-in-july-numbers-fall-in-italy-remain-high-in-spain-X4OFNn" target="_blank">reported</a> that the number of African migrants arriving in Italy from Libya had dropped by more than half in July compared to the month before. During this period, the number of migrants arriving in Spain rose sharply.</p> <p>Frontex <a href="http://frontex.europa.eu/news/migratory-flows-in-july-numbers-fall-in-italy-remain-high-in-spain-X4OFNn" target="_blank">said</a> that 10,160 migrants had arrived in Italy by sea in July &mdash; 57% fewer than in June and the lowest level of arrivals for a July since 2014. According to Frontex, 2,300 migrants made it to Spain in July, more than four times as many as the year before. Most of the migrants arriving in Italy and Spain are believed to be economic migrants seeking a better life in Europe, not refugees fleeing war zones.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>&quot;The vast majority of migrants crossing to Italy from Libya come from Senegal, Gambia, Guinea and other west African countries,&quot; <a href="https://www.ft.com/content/bf219f6e-7e90-11e7-ab01-a13271d1ee9c" target="_blank">said</a> Joel Millman, an IOM spokesman, in an interview with the <em>Financial Times</em>. &quot;Given the crackdown on migration from Libya, it seems natural that many would forsake the dangerous dessert [sic] crossing to Libya and choose to cross from Morocco.&quot;</strong></p> </blockquote> <p>Julio Andrade, a city councilor in Málaga, a port city in southern Spain, called it &quot;the balloon effect.&quot; In an interview with the <em>Irish Times</em>, he <a href="https://www.irishtimes.com/news/world/europe/spain-struggles-for-effective-migration-formula-1.3145499" target="_blank">said</a>: &quot;If you squeeze one area, the air goes elsewhere. If there is a lot of police pressure and arrests of mafias around the Mediterranean routes via Greece and Italy, for example, then the mafias will look for other routes.&quot;</p> <p><u><strong>Spanish authorities have reported that there is a surge in African migrants attempting to cross the land border at Ceuta by scaling fences that are up to six meters (20 feet) tall and topped by razor wire. </strong></u>Spanish Interior Minister Juan Ignacio Zoido <a href="https://politica.elpais.com/politica/2017/08/07/actualidad/1502084673_982194.html" target="_blank">said</a> there were 2,266 attempts to jump the perimeter at Ceuta during the first seven months of 2017, compared to a total of 3,472 attempts in all of 2016.</p> <p>On August 7, more than 300 mostly sub-Saharan Africans ambushed Spanish and Moroccan security forces and <a href="https://politica.elpais.com/politica/2017/08/07/actualidad/1502084673_982194.html" target="_blank">stormed</a> the border crossing at El Tarajal; 186 migrants made it onto Spanish territory. On August 8, more than a thousand migrants armed with spears and rocks attempted to <a href="http://www.abc.es/espana/abci-inmigrantes-lanzan-piedras-y-palos-nuevo-intento-salto-masivo-frontera-ceuta-201708081007_noticia.html" target="_blank">breach</a> the same crossing. On August 9, Spanish authorities closed the border for a week. On August 10, around 700 migrants <a href="https://politica.elpais.com/politica/2017/08/10/actualidad/1502351104_147537.html" target="_blank">stormed</a> the border; 200 migrants were arrested.</p> <p>Meanwhile, on August 9, a video <a href="https://www.theguardian.com/world/video/2017/aug/10/migrant-boat-lands-on-spanish-beach-video" target="_blank">showed</a> a rubber boat carrying dozens of migrants arrive at a beach full of sunbathers in Cádiz. José Maraver, the head of a rescue center in nearby Tarifa, <a href="http://www.telegraph.co.uk/news/2017/08/10/spain-could-top-greece-migrant-sea-arrivals-2017/" target="_blank">told</a> the <em>Telegraph</em> that a second boat had landed on another beach in the area and that this scene was now a regular occurrence. &quot;Every day there are boats, every day there is migration,&quot; he said. &quot;The situation is getting very complicated.&quot;</p> <p><strong>Migrants are also using other means to reach Spain. </strong>On August 6, for example, four Moroccans <a href="https://politica.elpais.com/politica/2017/08/06/actualidad/1502036476_688084.html" target="_blank">reached</a> the coast of Málaga on jet skis. During July and August, police intercepted at least two dozen migrants using jet skis to cross over to Spain. On August 10, police using motion detectors and thermal imaging sensors <a href="http://www.lavanguardia.com/vida/20170810/43468730888/la-operacion-feriante-se-salda-con-la-detencion-de-53-inmigrantes-en-ceuta.html" target="_blank">found</a> 56 migrants, including 14 children, hiding inside trucks en route from Ceuta to the mainland ferry port in Algeciras.</p> <p>In an August 9 editorial, Spain&#39;s <em>El País</em> newspaper <a href="https://elpais.com/elpais/2017/08/09/opinion/1502296611_177861.html" target="_blank">said</a> that it was &quot;obvious that migratory pressure has moved to the western Mediterranean and there is no indication that this situation will change in the near future.&quot; It added:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&quot;The migratory pressure Spain has experienced during the past several weeks is an increase of such dimensions that it exceeds all measures of surveillance and control. The massive entry of sub-Saharan people across the border of Ceuta, whether by jumping the fence or crossing the El Tarajal border, reveals the enormous difficulties in stopping the entry of those fleeing war, famine or economic hardship....</p> <p>&nbsp;</p> <p>&quot;The management of migratory flows requires a strong European policy and sufficient economic resources. Spain cannot stand alone as the guardian of southern Europe.&quot;</p> </blockquote> <p>German Development Minister Gerd Müller recently <a href="http://www.bild.de/politik/inland/dr-gerd-mueller/erst-zehn-prozent-der-fluchtwelle-ist-bei-uns-angekommen-44081514.bild.html" target="_blank">warned</a> that Europe must prepare for the arrival of millions more migrants from Africa:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>&quot;The biggest migration movements are still ahead: Africa&#39;s population will double in the next decades. A country like Egypt will grow to 100 million people, Nigeria to 400 million. In our digital age with the internet and mobile phones, everyone knows about our prosperity and lifestyle.&quot;</strong></p> </blockquote> <p>The director of the United Nations Office in Geneva, Michael Møller, has <a href="http://www.theaustralian.com.au/news/world/the-times/millions-more-migrants-coming--deal-with-it-un-chief-tells-eu/news-story/7f6425e2d90294e886536cc249e0c283" target="_blank">echoed</a> those concerns:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>&quot;What we have been seeing is one of the biggest human migrations in history. And it&#39;s just going to accelerate. Young people all have cellphones and they can see what&#39;s happening in other parts of the world, and that acts as a magnet.&quot;</strong></p> </blockquote> <p>The President of the European Parliament, Antonio Tajani, <a href="https://www.welt.de/politik/ausland/article163215714/Dann-werden-30-Millionen-Einwanderer-in-die-EU-kommen.html" target="_blank">said</a> that in order to staunch the flow of migrants from Africa, the European Union would need to invest billions and develop a long-term strategy to stabilize the continent:<strong><em> &quot;If we do not manage to solve the central problems in African countries, ten, 20 or even 30 million immigrants will arrive in the European Union within the next ten years.&quot;</em></strong></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="506" height="358" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20170816_migrant.png?1502938884" /> </div> </div> </div> http://www.zerohedge.com/news/2017-08-16/europe-migrant-crisis-reaches-spain#comments African immigration to Europe Bird migration Demography Economic migrant European migrant crisis European Parliament European Union European Union France Frontex Gatestone Institute Geography of Africa Germany Greece Human migration Illegal immigration International Organization for Migration Italy Lampedusa Libya Mediterranean Middle East Middle East Migrant Offshore Aid Station mobile phones Newspaper Politics Social Issues Southern Europe southern Spain Turkey United Nations United Nations Office in Geneva western Mediterranean Thu, 17 Aug 2017 09:00:00 +0000 Tyler Durden 601825 at http://www.zerohedge.com Despite 'Growth Promise', Global Negative-Yielding Debt Surges To Highest Since October http://www.zerohedge.com/news/2017-08-16/despite-growth-promise-global-negative-yielding-debt-surges-highest-october <p>The market value of bonds yielding less than zero percent has<strong> jumped by a quarter over the past month to $8.68 trillion, the highest since October... </strong>which is odd given the mainstream narrative that everything is awesome and global growth is heading for escape velocity?</p> <p><em>&quot;probably nothing&quot;</em></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/08/14/20170815_EOD3.png"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/08/14/20170815_EOD3_0.png" style="width: 600px; height: 317px;" /></a></p> <p>&nbsp;</p> <p>As Bloomberg notes,<em><strong> slower-than-forecast&nbsp;inflation data&nbsp;and haven demand on&nbsp;geopolitical risk&nbsp;have revived bond bulls around the world</strong></em>.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/08/14/20170816_bonds.png"><img height="318" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/08/14/20170816_bonds_0.png" width="600" /></a></p> <p>With global borrowing costs already so low, <strong>central banks should be prepared to cut interest rates deep into&nbsp;negative territory&nbsp;in the next economic downturn,</strong> <a href="http://www.zerohedge.com/news/2017-08-15/orwell-or-kafka-ken-rogoffs-crusade-against-cash-continues">warn economists including Harvard professor&nbsp;Kenneth Rogoff.</a></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="1179" height="622" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20170815_EOD3.png?1502890496" /> </div> </div> </div> http://www.zerohedge.com/news/2017-08-16/despite-growth-promise-global-negative-yielding-debt-surges-highest-october#comments Bond Borrowing Costs Business Central Banks Economics Economy Harvard Inflation Kenneth Rogoff Thu, 17 Aug 2017 08:15:00 +0000 Tyler Durden 601771 at http://www.zerohedge.com European Junk: "The Good-Looking Ones Are Always Bad News" http://www.zerohedge.com/news/2017-08-16/european-junk-good-looking-ones-are-always-bad-news <p><em><a href="http://themacrotourist.com/macro/good-looking">Authored by Kevin Muir via The Macro Tourist blog,</a></em></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/08/14/20170816_trade1.png"><em><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/08/14/20170816_trade1_0.png" /></em></a></p> <p>Yesterday, <strong>a few different readers emailed to ask my opinion about the European Junk Bond versus US Treasury yield chart</strong> that <a href="https://theatlasinvestor.com/">Tiho Brkan from The Atlas Investor Blog</a> recently published.</p> <p><a href="http://themacrotourist.com/images/2017/08/EuroJunkAug1617.png"><img alt="http://themacrotourist.com/images/2017/08/EuroJunkAug1617.png" src="http://themacrotourist.com/images/2017/08/EuroJunkAug1617.png" style="height: 363px; width: 601px;" /></a></p> <p>Well, I have to give Tiho credit, his chart certainly <strong>stirred up a lot of primal urgings from investors eager to short European junk bonds.</strong> Although I am a huge Kodiak Grizzly of a bond bear, I think there are better ways to express this view than shorting European junk. Let me tell you why.</p> <p>I couldn&rsquo;t replicate Tiho&rsquo;s chart exactly as I don&rsquo;t pay for the Bank of America / Merrill Lynch bond indexes, but I found a Barclays/Bloomberg index that is close enough. So here is my version.</p> <p><a href="http://themacrotourist.com/images/2017/08/TwoChartsAug1617.png"><img alt="http://themacrotourist.com/images/2017/08/TwoChartsAug1617.png" src="http://themacrotourist.com/images/2017/08/TwoChartsAug1617.png" style="height: 444px; width: 600px;" /></a></p> <p>I also couldn&rsquo;t determine Tiho&rsquo;s term for the US Treasury yield in his chart, but it sure looks like the 10 year yield, so I am going with that.</p> <p>So when comparing these two series, let&rsquo;s start with the obvious. <em><strong>The current on-the-run US 10 year treasury note has a modified duration of a little less than 9 years. This compares to the European Junk bond index that comes in at under 4 years.</strong></em></p> <p>The sensitivity to changes in interest rates will therefore be much higher in the US treasury notes. Comparing these two assets with such different term lengths is a little misleading.</p> <p>But you might say, &ldquo;I don&rsquo;t care - look at past yield levels for European junk! I can afford to have less duration because the credit part will skate me onside.&rdquo;</p> <p><em><strong>And yes, if credit spreads blow out, then shorting junk is much better than sovereigns.</strong></em></p> <p><u><strong>What do I mean by that? </strong></u>When an investor buys junk bonds, they are typically rewarded with an extra yield to compensate for the increased risk. The amount of this extra yield is called the option-adjust-spread, and we can chart it.</p> <p><a href="http://themacrotourist.com/images/2017/08/OASAug1617.png"><img alt="http://themacrotourist.com/images/2017/08/OASAug1617.png" src="http://themacrotourist.com/images/2017/08/OASAug1617.png" style="height: 444px; width: 600px;" /></a></p> <p>Currently, European junk bonds only offer 2.67% over the equivalent sovereign yield. Wait! How can that be? The US year yield is 2.22% and the two series have recently converged, so that doesn&rsquo;t seem to make any sense. But you have to remember that 4 year German bunds are yielding negative 42 basis points, so that means European junk bonds are trading at roughly 2.25% (267 bps more than sovereigns).</p> <p><strong>As you can see from the OAS chart, these junk bonds have often yielded considerably more than sovereigns.</strong> During the Great Financial Crisis they spiked to 20% more, and even during the 2011 European credit crisis, they got as high as 10% over.</p> <p><u><em><strong>So yeah, I understand the attraction to shorting European junk. It&rsquo;s easy to look dreamily at this chart and imagine spreads doubling to 5% without batting an eye.</strong></em></u></p> <p><u><strong>But there are a couple of problems with this trade.</strong></u></p> <p>There are no easily traded derivatives on European junk bonds. <strong>So unless your friendly neighborhood GS salesperson lets you buy CDS protection on this index, it is kind of a non-starter.</strong> Yeah, you might find some ETF and leverage it up a bit, but with a 4 year duration, your returns are going to be mediocre, even if you nail the timing perfectly.</p> <p>Yet even if I worked in a big fixed income shop and could execute this trade seamlessly,<strong> I don&rsquo;t think I would bother with junk, and would instead focus on the sovereigns.</strong></p> <p><strong>Getting all hot and bothered about the juiciness of European junk is doing nothing more than repeating the US mistake made by all the hedge funds over the past few years. </strong>Remember Carl Icahn&rsquo;s <a href="https://www.youtube.com/watch?v=ZyKIvnied-o">&ldquo;Danger Ahead&rdquo;</a> video? It has now been two years since good &lsquo;ole Uncle Carl blessed you with his advice to put on all the same hedges that worked so fabulously in 2008. Go ahead and watch the video again. See how he recommends shorting credit? And no wonder. This trade worked so well in 2008, it is tough to not look at the tight spreads and think they offer a great asymmetrical risk reward profile (to use the buzzwords from all the hedge fund gurus). And I don&rsquo;t mean to pick on Carl, practically all these mavens have been positioned the same way. Everyone hedges for the last crisis - even legendary hedge fund managers.</p> <p><em><strong>For the last two years, these hedges in the US markets have been a disaster, and I suspect they are about to experience the same sort of pain in Europe.</strong></em></p> <p><u><strong>Don&rsquo;t mistake my lack of bearishness for European junk bonds as a belief they offer good value. Nope. Not a chance. I wouldn&rsquo;t buy an asset that offers so little upside, but with the potential for so much downside, in a million years.</strong></u></p> <p>Yet I do think shorting sovereigns is a much better trade than betting against European junk. What is going to cause European OAS spreads to blow out? Economic weakness. And what will be the result of more economic weakness? Yup - you got it - more quantitative easing. The ECB is already running out of sovereigns to buy, so what will happen the next time? They will venture even further out the risk curve.</p> <p><u><em><strong>I believe European junk bond yields are headed higher, but only on the back of higher sovereign yields. So if the only way junk bonds are going down is if sovereigns go down, why even bother contemplating shorting junk?</strong></em></u></p> <p>Why not just short the actual security that will cause the other security to decline?</p> <p>I guess I could sum it up by explaining that I am negative on European bonds, but neutral on option-adjusted-credit spreads.</p> <p><strong>Governments are going to keep spending and printing until we finally get the nominal growth they so desperately desire (note how I specified nominal growth - they will find it more difficult to generate real growth). If you accept this argument, then it makes way more sense to short sovereigns than junk.</strong></p> <p>I have argued that the European cycle is mirroring the US experience since the Great Financial Crisis, only a few years behind. If that is the case, then there will be plenty of time to short European junk bonds in the coming years.</p> <p>In the meantime, I am focusing on shorting the government bonds that are the true bubble. It is funny how so many look at junk and salivate over the possibility of shorting a security yielding 2.25%, yet quietly ignore government bonds yielding negative real rates of return with Central Banks intent on creating the very inflation that bond investors fear the most.</p> <p>I will leave you with these wise words from the Urban Camel:</p> <p><a href="http://themacrotourist.com/images/2017/08/UrbanCamelAug1617.png"><img alt="http://themacrotourist.com/images/2017/08/UrbanCamelAug1617.png" src="http://themacrotourist.com/images/2017/08/UrbanCamelAug1617.png" style="height: 186px; width: 601px;" /></a></p> <p><em><strong>Remember, those good looking trades that everyone wants to put on are usually trouble. Instead, look for the more reliable, underappreciated one that is often staring right at you.</strong></em></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="739" height="405" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20170816_trade2.png?1502938343" /> </div> </div> </div> http://www.zerohedge.com/news/2017-08-16/european-junk-good-looking-ones-are-always-bad-news#comments 10 Year Treasury Bank of America Bank of America Banking Barclays Bond Bond Business Carl Icahn CDS Central Banks Credit Crisis Economy European Central Bank Finance Financial markets fixed High-yield debt Junk Merrill Merrill Lynch Money Naval history of China Private equity Quantitative Easing Short Sovereigns U.S. Treasury United States housing bubble Thu, 17 Aug 2017 07:30:00 +0000 Tyler Durden 601824 at http://www.zerohedge.com Spanish Bond Yields Plunge To Record Lows As 'Economy Improves' (Just Don't Tell The Nation's Youth) http://www.zerohedge.com/news/2017-08-16/spanish-bond-yields-plunge-record-lows-economy-improves-just-dont-tell-nations-youth <p><strong>Spain&rsquo;s two-year bond yields have collapsed to a record low -35bps</strong> this week and <strong>Portugal</strong>&#39;s followed suit, plunging near record low levels as Draghi&#39;s &quot;whatever it takes&quot; has benefitted all those front-running bondholders but left <strong>youth unemployment hovering still near record-high levels</strong>.</p> <p><img height="316" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/08/14/20170816_spain_0.png" width="600" /></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/08/14/20170816_portugal.png"><img height="315" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/08/14/20170816_portugal_0.png" width="600" /></a></p> <p>As <strong>a strong euro weighs on the region&rsquo;s inflation outlook, it makes it harder for the European Central Bank to end quantitative easing and negative interest rates</strong>, said&nbsp;Peter Chatwell,&nbsp;head of European rates strategy at Mizuho International Plc in London, and sure enough today&#39;s reports that Draghi&#39;s Jackson Hole appearance will be a nothing burger has sparked more anticipation that QE isn&#39;t ending anytime soon, despite better-late-than-never complaints from the Germans.</p> <p>&quot;Whatever it takes&quot; to keep asset prices high!</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="1185" height="624" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20170816_spain.png?1502889474" /> </div> </div> </div> http://www.zerohedge.com/news/2017-08-16/spanish-bond-yields-plunge-record-lows-economy-improves-just-dont-tell-nations-youth#comments Bond Central bank Economic policy Economy European Central Bank European Central Bank Inflation Interest rate Macroeconomics Monetary policy Money Portugal Quantitative Easing Quantitative easing Unemployment Thu, 17 Aug 2017 06:45:00 +0000 Tyler Durden 601770 at http://www.zerohedge.com Tucker Carlson Obliterates Bill Kristol, Says He's 'Glued to Social Media Like a Slot Machine Junkie in Reno.' http://www.zerohedge.com/news/2017-08-17/tucker-carlson-obliterates-bill-kristol-says-hes-glued-social-media-slot-machine-jun <p><em>Content originally published at <a href="http://ibankcoin.com/">iBankCoin.com</a></em></p> <p>&nbsp;</p> <p>Last night Bill Kristol called out Tucker Carlson for discussing the very real issue of removing monuments of all American forefathers who once owned slaves, saying that Tucker was attempting to rationalize slavery and then later suggested he'd rationalize anti-semitism.</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">They started by rationalizing Trump. They ended by rationalizing slavery. <a href="https://t.co/1BYhLF9YQY">https://t.co/1BYhLF9YQY</a></p> <p>— Bill Kristol (@BillKristol) <a href="https://twitter.com/BillKristol/status/897648303348862977">August 16, 2017</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><blockquote class="twitter-tweet"> <p dir="ltr" lang="en">Next: Luther, Voltaire and Marx were anti-Jewish. So why's it a big deal that the marchers were chanting, "Jews will not replace us?" <a href="https://t.co/1BYhLF9YQY">https://t.co/1BYhLF9YQY</a></p> <p>— Bill Kristol (@BillKristol) <a href="https://twitter.com/BillKristol/status/897656679373967360">August 16, 2017</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><p>If you watched the segment, all Tucker did was pose a very serious question, which I duplicated here that drew the ire of several residents.</p> <p>Should we remove the monuments of anyone who once owned slaves?</p> <p>Tucker responded last night, calling out Kristol for being 'glued to social media like a slot machine junkie in Reno. He added that he had once worked for Kristol for 5 years and 'a generally smart guy' and a good boss, who was humane and intelligent.</p> <p>Tucker then asked, 'what happened?'</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>'Hysteria has supplanted rational debate, where the purpose of political argument is to no longer explain your beliefs, but to highlight what a morally upstanding person you are, what a virtuous guy you are, usually by contrast of your opponent, who is by definition, evil. It's childish, obviously -- but for many people it's pretty tempting. Even 64 year old men with Harvard degrees fall for it, apparently. </p></blockquote> <p>Tucker believes, 'part of the problem is also the medium.' He criticized the fact that Bill no longer thinks things through like he used to, when he was the editor at The Weekly Standard. </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>'Now he just goes on Twitter and he stays on Twitter, all day, every day -- dashing off little thoughts and impressions, scoring tiny little points against strangers in cyberspace -- keeping obsessive track of his likes and retweets. At an age where he could be spending his time with his grandchildren, Kristol is glued to social media like a slot machine junkie in Reno.'</p></blockquote> <p>Watch.</p> <p><iframe src="https://www.youtube.com/embed/mOzy2faqauI" width="560" height="315" frameborder="0"></iframe></p> <p>&nbsp;</p> http://www.zerohedge.com/news/2017-08-17/tucker-carlson-obliterates-bill-kristol-says-hes-glued-social-media-slot-machine-jun#comments Conservatism Conservatism in the United States Harvard Kristol Mass media Neoconservatism Social Issues Software Tucker Tucker Carlson Tucker: The Man and His Dream Twitter Twitter Twitter William Kristol Thu, 17 Aug 2017 06:31:13 +0000 The_Real_Fly 601826 at http://www.zerohedge.com China-India Conflict Is Far More Dangerous Than US-North Korea One http://www.zerohedge.com/news/2017-08-16/china-india-conflict-far-more-dangerous-us-north-korea-one <p><a href="https://orientalreview.org/2017/08/15/china-india-conflict-far-dangerous-us-north-korea-one/"><em>Authored by Adam Garrie via OrientalReview.org,</em></a></p> <p>While the international media <a href="https://www.theguardian.com/world/2017/aug/14/north-korean-missiles-probably-engines-sourced-from-russia-or-ukraine-icbm" rel="noopener" target="_blank">remains concerned</a> to the point of being fixated on the US-DPRK (North Korea) stand-off, <strong><em>in terms of sheer firepower, the much more pressing stand-off between China and India holds the potential to be far more destructive.</em></strong></p> <h3><u><strong>Indian Nuclear Weapons </strong></u></h3> <p>While the best intelligence about North Korea&rsquo;s weapons delivery capabilities indicates that North Korea is in possession of intermediate range ballistic missile systems which are incapable of hitting the US mainland, <strong>India&rsquo;s intermediate range systems are not only more advanced but due to India&rsquo;s proximity with China, these missiles could easily strike targets within China.</strong></p> <p>Of course, China has a vastly more equipped army and nuclear capacity, but any war between China and India that would involve the use of intercontinental ballistic missiles would be a world-changing event.</p> <p><strong>While many have focused on the possibility of a short land-based border war, similar to that <a href="https://www.thequint.com/india/2017/07/05/facts-about-1962-india-china-war" rel="noopener" target="_blank">which the two countries fought in 1962</a>, due to the rapid advance of both the Chinese and Indian militaries in the decades since 1962, there is every possibility that such a war could escalate quickly.</strong></p> <h3><u><strong>The Modi Factor </strong></u></h3> <p>Much is said in the western mainstream media about North Korea&rsquo;s leader Kim Jong-Un being unpredictable and flippant. This information is largely based on self-fulfilling propaganda rather than actual knowledge of Kim Jong-Un&rsquo;s thought process and leadership.</p> <p>While little is actually known about Kim Jong-Un&rsquo;s long term strategic thinking, <strong>India&rsquo;s Prime Minister Narendra Modi&rsquo;s modus operandi is all too clear.</strong></p> <p><em><strong>Modi&rsquo;s political programme has resulted in economic stagnation, worsening relations with its two most important neighbours, China and Pakistan and increasing incidents of violence, discrimination and intimidation against India&rsquo;s large Muslim minority.</strong></em></p> <p>With these major failures looming large (however much they are dismissed or rationalised by the ruling BJP), Modi has resorted to an entrenched militant nationalism which has resulted in galvanising the most extreme elements of Modi&rsquo;s Hindutva base domestically while provoking China by placing Indian troops in territory China claims as its sovereign soil.</p> <p>Against this background it could be fair to surmise that India&rsquo;s leadership is less stable than that of North Korea, even when accounting for the differences in India&rsquo;s size, wealth and global reach vis-à-vis North Korea.</p> <p><strong>If US leaders have been well known to provoke wars to get a poor domestic political performance or a scandal out of the headlines, one should not surmise that Modi will behave any differently.</strong> The fact that a conflict with China whether a military conflict, the ensuring trade conflict for which India is virtually entirely responsible or a combination of both, is manifestly to India&rsquo;s detriment, seems to be lost on a leadership which is obsessed with short term propaganda victories rather than genuine economic and diplomatic progress.</p> <h3><u><strong>Actual versus Perceived Chinese Interests </strong></u></h3> <p><strong>China&rsquo;s concerns about Indian violations of its sovereignty and moreover with the anti-cooperative attitude that Modi&rsquo;s government has taken, is a very serious matter for China. </strong>China has repeatedly warned that its patience is being tested and that China will not ultimately hesitate to militarily defend itself, even while stating that war is not China&rsquo;s preferred option.</p> <p><strong>By contrast, China&rsquo;s interest in both North and South Korea is one of stability and more importantly, one of peace.</strong> China, like Russia, does not want to see the Korean war reignite on its borders. This is why China has taken an even hand on the North Korean issue, one that has surprised those who overestimate China&rsquo;s relationship with the DPRK, one which throughout most of the second half of the 20<sup>th</sup> century, was less important than Pyongyang&rsquo;s relationship with the Soviet Union.</p> <p>North Korea is on occasion a source of a Chinese headache, but it is the United States which has a lingering geo-strategic ambition to unite Korea under the auspices of a pro-American government. China by contrast would be happy with the status-quo minus weapons tests and military drills on both sides of the 38<sup>th</sup> parallel.</p> <p><strong>In respect of India however, China has a deeply specific set of interests which are summarised as follows:</strong></p> <ol> <li><strong>No threats made to China&rsquo;s territorial integrity</strong></li> <li><strong>A resentment towards dealing with an Indian government that from the Chinese perspective is needlessly hostile</strong></li> <li><strong>A long term goal of cooperation with India in respect of One Belt&mdash;One Road</strong></li> <li><strong>A more intrinsic desire not to see India fall too deeply into the US rather than what Chinese media calls the &lsquo;Asian&rsquo; sphere of influence.</strong></li> </ol> <p>Modi would appear to understand China&rsquo;s perspective which is perversely why his government is doing precisely the opposite of what China wants. India currently has soldiers on Chinese territory in the disputed Doklam/Donglang region. India is attempting to shut China out of Indian markets in such a manner that seeks to paint India as a competitor to China rather than a country whose economic potential is complimentary to that of China. In an all-out trade war with China, India will lose, the only question remains how badly. Thus far Modi&rsquo;s attitude does not bode well for an honourable second place.</p> <p><strong>Finally, India&rsquo;s recent purchase of American weapons that are vastly overpriced via-a-vis their Russia or Chinese equitant is an example of Modi being penny wise and pound foolish. </strong>Modi&rsquo;s relationship with the United States is one where Modi is squandering Indian treasure in order to make an expensive point. Donald Trump himself joked at a <a href="https://www.youtube.com/watch?v=pEUvbUCjwwU&amp;t=1s" rel="noopener" target="_blank">press conference</a> with Modi that the American side will try and get the final price higher before India commits to a final sale of weapons.</p> <h3><u><strong>Conclusion: </strong></u></h3> <p>India would stand to benefit greatly from doing what Pakistan has been going for years, namely understanding that the old alignments of the Cold War, including the idea of being non-aligned means something very different in 2017 than it did in 1970. The China-Pakistan Economic Corridor, Pakistan&rsquo;s historically good relations with Russia and its refusal to follow US ally Saudi Arabia into an unnecessary conflict with Qatar and by extrapolation with Iran, demonstrates a far-sighted geo-strategic maturity that will ultimately benefit Pakistan greatly.</p> <p><em><strong>India has every ability to do with China what Pakistan has done with Russia while not losing its old Cold War friend. Until India realises this, it is fair to say that the flash-points of conflict between Beijing and New Deli are far more worrying and could be far more damaging in the long term than the war of words between Washington and Pyongyang, frightening though it may at times sound.</strong></em></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="226" height="149" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20170816_russia1.png?1502931151" /> </div> </div> </div> http://www.zerohedge.com/news/2017-08-16/china-india-conflict-far-more-dangerous-us-north-korea-one#comments Asian foreign policy of the Narendra Modi government China China–Pakistan Economic Corridor China–Pakistan relations Donald Trump Economy flash Foreign policy of the Narendra Modi government Foreign relations of India headlines India Indian government Infrastructure Iran KIM Kim Jong-un Modi’s government Nationalism North Korea North Korea Politics pro-American government Saudi Arabia South Korea Trade War Thu, 17 Aug 2017 06:00:00 +0000 Tyler Durden 601822 at http://www.zerohedge.com The Costs Of Ignoring Russia http://www.zerohedge.com/news/2017-08-16/costs-ignoring-russia <p><em><a href="https://www.strategic-culture.org/news/2017/08/15/the-costs-ignoring-russia.html">Authored by Dmitri Simes via The Strategic Culture Foundation,</a></em></p> <p><em><strong>Current mutual hostility threatens an explosive confrontation</strong></em></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/08/14/20170816_russia.png"><img height="266" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/08/14/20170816_russia_0.png" width="500" /></a></p> <p><strong>Improving the dangerously unstable U.S.-Russia relationship will be very difficult, but it is important for U.S. national security. </strong>Current mutual hostility threatens an explosive confrontation that could destroy American (and Russian) civilization as we know it. Short of that, Russia can do much more than it is today to damage U.S. interests and values without taking extreme risks. Accordingly, the United States should explore normalizing its interaction with Russia. Washington should do so without illusions, and from a position of strength.</p> <div id="ld-7032-4043"><strong>Today, America and Russia are adversaries with different approaches to key international issues, different systems of government and, in many respects, different values.</strong> Each confronts domestic obstacles to efforts to establish better relations. These obstacles are particularly challenging in the United States, where Congress, the mainstream media and much of the American public view Vladimir Putin&rsquo;s Russia as a vicious enemy akin to Saddam Hussein&rsquo;s Iraq, if not Hitler&rsquo;s Germany. Unlike China, Russia has only limited economic interaction with America&mdash;and therefore few Americans see a practical positive side to contacts with Russia.</div> <p>President Putin has much greater latitude in shaping his country&rsquo;s foreign policy, including exploring a new beginning with Washington. Yet in a period of economic difficulty before Russia&rsquo;s 2018 presidential election, Putin is loath to appear weak under foreign pressure.</p> <p>At the same time, <strong>Washington and Moscow continually calculate how their relationship affects their close partners. </strong>Thus, for example, Russia cannot disregard how China and Iran might react if they perceive Russia as accommodating the United States on North Korea, Syria or other issues&mdash;especially if Moscow&rsquo;s flexibility compromises their interests.</p> <p><u><strong>Yet failing to arrest the downward spiral in U.S.-Russia relations poses real dangers.</strong></u> The most dramatic, if least likely, is a direct military confrontation leading to uncontrollable escalation and potentially a global catastrophe. Many dismiss this risk, arguing that neither the United States nor Russia wants to commit suicide and would show restraint; however, the same assumption that the other side would pull back at the last moment contributed to World War I. The truth is that no one knows what might happen if U.S. and Russian warplanes started shooting at each another or if American cruise missiles hit Russian bases in Syria. Russia could retaliate asymmetrically, perhaps in eastern Ukraine, and fighting could escalate and spread in ways that trigger NATO&rsquo;s Article Five guarantees. While the Obama administration may have considered nuclear weapons so terrible as to have little practical utility, Russian military doctrine explicitly describes tactical nuclear weapons as a viable option if Russia is under serious attack. Where would that lead?</p> <p><strong>Setting aside nuclear apocalypse, forswearing diplomacy with Moscow because it legitimizes an unsavory government and rewards bad behavior could prompt Russian officials to conclude that they have little left to lose and must weaken and confront what they would view as an unremittingly hostile America. </strong>Interfering in the 2016 election could pale by comparison to serious and sustained attacks on infrastructure, financial systems and other foundations of American society, all of which are highly vulnerable to cyberattack. Devastating U.S. retaliation would do little to help millions of affected Americans or to reassure those who escaped harm the first time. There is, likewise, a difference between failing to help the United States prevent proliferation in North Korea or elsewhere, as is the case today, and working actively to assist Pyongyang and other American foes to develop these capabilities. Moscow could arm and support Hezbollah, Hamas and the Taliban too. If Russian leaders feel pushed into a corner, they could even consider a deal with ISIS or others whom they oppose today.</p> <p><strong>Finally, Russia could double down on its emerging alignment with China.</strong> Russia and China maintain strong mutual suspicions, and China is a much stronger country by most measures. Although both are interested in normal relations with the United States, and would be reluctant to go too far in ways that could lead to a serious conflict, they are fearful of and, indeed, irritated with Washington. They are drawing closer economically and militarily, and are increasingly coordinating their foreign policies. Moscow and Beijing are concerned over American-led encirclement and, specifically, expanding U.S. antimissile systems that threaten their retaliatory capabilities. At a minimum, the worse the U.S.-Russia relationship, the more a rising China can count on Russian support in any disagreement with the United States. Emboldening China in this fashion cannot be in the U.S. national interest.</p> <p><strong>To avoid these costs, any responsible U.S. government should want to normalize the relationship with Moscow. </strong>The objective should not be to become allies or friends, neither of which is possible or advisable. Instead, Washington should seek a narrow dialogue to avoid an unintended military confrontation, manage differences more effectively and, at times, work together where interests and priorities overlap.</p> <p>Pursuing such an approach requires a clear explanation of the U.S. national interests at stake that Congress and the public can understand. It will also require sustained and disciplined attention from the president and a concerted effort to appoint and retain officials both committed to this approach and capable of executing it. Good chemistry between the two presidents is important, but it should be a tool, rather than a basis, of American policy.</p> <p><strong>The obstacles to seeking a new approach to Russia are so numerous and momentous that many may feel that even trying is not a good use of President Trump&rsquo;s time, energy and limited political capital</strong>. Yet if it goes badly wrong, the U.S.-Russia relationship could end in nuclear conflict. It would be a travesty for America to do so much to avoid an imaginary mushroom cloud in Iraq and then to ignore far greater looming dangers in a collapsing relationship with Russia.</p> <p><strong>The first and most important task for any U.S. administration is to protect the survival and security of the American people. </strong>That is why no responsible administration could refuse to pursue a more stable relationship with Russia. It is why every new administration since the end of the Cold War has tried to do just that. No matter how futile these efforts may seem, the United States cannot afford to dismiss diplomacy with Moscow out of hand. <strong><em>Failing to try risks fueling a highly destructive self-fulfilling prophecy that could undermine U.S. national security, as well as America&rsquo;s foreign-policy objectives around the globe.</em></strong></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="608" height="324" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20170816_russia.png?1502930744" /> </div> </div> </div> http://www.zerohedge.com/news/2017-08-16/costs-ignoring-russia#comments Asia China Congress eastern Ukraine Europe Foreign policy of Vladimir Putin Foreign relations of Russia Germany Hamas Hizballah International relations Iran Iraq national security North Atlantic Treaty Organization North Korea Nuclear proliferation Obama Administration Obama administration Politics Politics of Russia Russia Russian interference in the 2016 United States elections Russia–United States relations Strategic Culture Foundation Taliban Ukraine US Administration US government Vladimir Putin Vladimir Putin Thu, 17 Aug 2017 03:35:00 +0000 Tyler Durden 601821 at http://www.zerohedge.com Which College Offers The "Best Bang" For Your Tuition Buck? http://www.zerohedge.com/news/2017-08-16/which-college-offers-best-bang-your-tuition-buck <p><strong><em>Is making the investment in a college education still worth it? How much debt can you expect to have after you graduate, and how much money will you make in your career?</em></strong></p> <p><a href="https://howmuch.net/articles/student-debt-future-earnings-gap">As HowMuch.net</a> details, <a href="https://www.nitrocollege.com/student-debt-and-future-earnings" target="_blank">Nitrocollege.com</a>&nbsp;crunched the numbers from the top twenty public and top twenty private schools in the country and created a visualization to find out. The data was extracted from the&nbsp;<a href="https://www.ed.gov/" target="_blank">U.S. Department of Education</a>&nbsp;and&nbsp;<a href="https://www.usnews.com/" target="_blank">U.S. News &amp; World Report</a>.&nbsp;</p> <p><strong>We ranked each school according to the median salary someone can expect to earn ten years after enrolling.</strong> We then looked at the <strong>median student debt graduates typically carry</strong>. Focusing on median debt and median earnings makes a lot of sense - half of all students fall above these numbers, and half fall below. We then color-coded each school in a floating bar chart, making the private schools blue and the public schools yellow.</p> <p dir="ltr"><u><strong>Several things immediately jump out of this visualization.</strong></u></p> <p dir="ltr">First off, private schools dominate the top half of the list while public schools by and large fall to the bottom. <strong><em>Graduates from private universities simply earn more money, which suggests that attending a private school pays off in the long run.</em></strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/08/14/20170816_debt.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/08/14/20170816_debt_0.png" /></a></p> <p dir="ltr"><em>Source: <a href="https://howmuch.net/articles/student-debt-future-earnings-gap">HowMuch.net</a></em></p> <h3><u>Top Five Universities by Median Salary 10 Years after Enrollment</u></h3> <ul> <li>Harvard - $95,500</li> <li>MIT - $89,200</li> <li>Stanford - $86,000</li> <li>University of Pennsylvania - $$79,700</li> <li>Princeton - $77,900</li> </ul> <p dir="ltr"><strong>Something else stands out about our visualization: Harvard students take on significantly less debt compared to their peers from Ohio State.</strong> Nobody thinks Harvard is cheaper than Ohio State, right? More to the point, Harvard grads make more than twice as much money. From a financial perspective, it is by far and away the best school. In fact, the 11 universities with the lowest debt loads are all private. This suggests that many students come from wealthy families who can afford to pay the tuition without taking out loans. Perhaps this also affects their career outcomes.</p> <p dir="ltr">Consider another way to look at the data. <strong>Suppose you want to find the best bang for your buck - <u>you want the highest earning potential with the lowest possible debt, but you also want to avoid paying private school tuition</u>. Where should you go?</strong></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p dir="ltr"><u><strong>The University of California, Berkeley offers the best opportunity.</strong></u> Graduates have the highest earning potential of all public schools at $60,800 with the lowest debt burden of $14,200.</p> </blockquote> <p dir="ltr">There&rsquo;s a lot that goes into picking the right school. You have to decide how much debt you are comfortable carrying, and ask yourself if the future earning potential is worth it. The most important factor you should consider, however, is how much you are willing to pay for the life-defining experiences that come with a college degree.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="1037" height="121" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20170816_debt2.png?1502922620" /> </div> </div> </div> http://www.zerohedge.com/news/2017-08-16/which-college-offers-best-bang-your-tuition-buck#comments Debt Education Education Emergence Harvard MIT Ohio Private school Stanford Structure Student debt U.S. Department of Education University of California University of California, Berkeley University of Pennsylvania Thu, 17 Aug 2017 03:10:00 +0000 Tyler Durden 601814 at http://www.zerohedge.com Korean War Part II: Why It's Probably Going To Happen http://www.zerohedge.com/news/2017-08-16/korean-war-part-ii-why-its-probably-going-happen <p><a href="http://www.alt-market.com/articles/3254-korean-war-part-ii-why-its-probably-going-to-happen"><em>Authored by Brandon Smith via Alt-Market.com,</em></a></p> <p>Though a lot of people in my line of work (alternative economic and geopolitical analysis) tend to be accused of &quot;doom mongering,&quot; I have to say personally I am not a big believer in &quot;doom.&quot; At least, not in the way that the accusation insinuates. I don&#39;t believe in apocalypse, Armageddon or the end of the world, nor do I even believe, according to the evidence, that a global nuclear conflict is upon us. In fact, it annoys me that so many people seem desperate to imagine those conclusions whenever a crisis event takes shape.</p> <p>I think the concept of &quot;apocalypse&quot; is rather lazy - unless we are talking about a fantastical movie scenario, like a meteor the size of Kentucky or Michelle Obama&#39;s Adam&#39;s apple hurtling towards the Earth. Human civilization is more likely to change in the face of crisis rather than end completely.</p> <p><strong><em>I do believe in massive sea-changes in societies and political dynamics. I believe in the fall of nations and empires. I believe in this because I have seen it perpetually through history. What I see constant evidence of is that many of these sea changes are engineered by establishment elitists in government and finance. What I see is evidence of organized psychopathy and an agenda for total centralization of power. When I stumble upon the potential for economic disaster or war, I always ask myself &quot;what is the narrative being sold to the public, what truth is it distracting us from and who REALLY benefits from the calamity.&quot;</em></strong></p> <p>The saying &quot;all wars are banker wars&quot; is not an unfair generalization &mdash; it is a safe bet.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/08/14/20170816_nk1.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/08/14/20170816_nk1.png" style="width: 487px; height: 272px;" /></a></p> <p><u><strong>First, let&#39;s clear up some misconceptions about public attitudes towards the North Korean situation.</strong></u></p> <p>According to &quot;<a href="http://src.boblivingstonletter.com/ego/59d2357a-eadb-4ba3-ab46-6a275b5c7b81/402503264/318274" rel="noreferrer" target="_blank">polls</a>&quot; (I&#39;ll remind readers my ample distrust of polls), a majority of Americans now actually support U.S. troop deployment to North Korea, but only on the condition that North Korea attacks first.</p> <p>I want you to remember that exception - North Korea must attack first. It will be important for later in this analysis.</p> <p>Despite a wide assumption that the mainstream media is <a href="http://src.boblivingstonletter.com/ego/83efdfe0-0a8a-4a37-a7ef-ac1265462f07/402503264/318274" rel="noreferrer" target="_blank">beating the war drums</a> on this issue, I find it is in most cases doing the opposite. <strong>The mainstream media has instead been going out of its way to downplay any chance that the current inflamed rhetoric on both sides of the Pacific is anything other than bluster</strong> that will <a href="http://src.boblivingstonletter.com/ego/4406d2dc-5ab5-4324-bf24-6cd7fd62fadd/402503264/318274" rel="noreferrer" target="_blank">end with a whimper rather than bomb blasts</a>. This is one of the reasons why I think war is imminent; the media is a notorious contrarian indicator. Whatever they predict is usually the opposite of what comes true (just look at Brexit and the election of Donald Trump, for starters).&nbsp; Another generalization that is a sure bet is that the mainstream media usually lies, or at the very least, they are mostly wrong.</p> <p>That said, if we are to believe the latest polls, unfortunately, one thing is clear:<strong><em> The American people, on both sides of the political spectrum, are becoming more galvanized around supporting a potential conflict with North Korea.</em></strong> For the establishment, <strong>war is a winning sell, at least for now.</strong></p> <p>Of course, I am aware that we have heard all this before. Back in 2013 tensions were relatively high with North Korea just like they are today. North Korea threatened a <a href="http://src.boblivingstonletter.com/ego/0823bbad-81e2-432f-a978-ff510bd2dd18/402503264/318274" rel="noreferrer" target="_blank">preemptive nuclear strike on the U.S.</a> back then, too, and in the end it was all hot air. However, besides wider public support than ever before in terms of troop deployment to North Korea, something else is very different from 2013. Primarily, China&#39;s stance on the issue of regime change.</p> <p>In the past, China has been consistent in supporting UN sanctions against North Korea&#39;s nuclear program while remaining immovable on war and regime change in the region. In 2013, it was clear that China was hostile to the notion of a U.S. invasion.</p> <p><strong>In 2017, though, something has changed</strong>. <a href="http://src.boblivingstonletter.com/ego/71936d9a-876f-4d5b-be5a-d37f1147e5b5/402503264/318274" rel="noreferrer" target="_blank">China&#39;s deep ties to the global banking establishment</a>, their open statements on their affection for the IMF, and their recent induction as the flagship nation for the <a href="http://src.boblivingstonletter.com/ego/a1054c05-2d85-4c0c-b455-575c8855cc80/402503264/318274" rel="noreferrer" target="_blank">IMF&#39;s Special Drawing Rights</a> system make it clear that they are working for the globalist agenda, not against it. This is not necessarily a new thing behind the curtain; China has done the bidding of globalist institutions for decades. Today though, the relationship is displayed far more publicly.</p> <p><strong>In 2015, it was China, not the U.S., that <a href="http://src.boblivingstonletter.com/ego/fd6c9159-ea53-4a02-854f-8386a97259ad/402503264/318274" rel="noreferrer" target="_blank">sounded the alarm over North Korea&#39;s nuclear program</a>,</strong> indicating that Pyongyang might have technology well beyond American estimates. It was this warning that triggered the slow buildup to today&#39;s fear over a fully capable intercontinental ballistic missile package in the hands of North Korea. It seems obvious to me that China plays the role of North Korea&#39;s friend as long as it serves the interests of the globalist agenda, and then China turns on North Korea when the narrative calls for a shift in the script. It is China that opens and closes the door to war with North Korea; a China that is very cooperative with the IMF and the push towards total globalization.</p> <p><u><strong>In 2013, China presented the narrative of stalwart opposition to U.S. invasion. In 2017, China has left the door wide open.</strong></u></p> <p>Both alternative and mainstream media outlets latched onto recent statements made by Beijing proclaiming that China &quot;<a href="http://src.boblivingstonletter.com/ego/f2e691e6-7c52-4846-9b03-ba9230c79070/402503264/318274" rel="noreferrer" target="_blank">would not allow regime change in North Korea</a>.&quot; What many of them forgot to mention or buried in their own articles, though, was that this was NOT China&#39;s entire statement. China also asserted that they would REMAIN NEUTRAL<em> </em>if North Korea attacked first. I cannot find any previous instance in the past when China has made such a statement; a statement that amounts to a note of permission.</p> <p><em><strong>Both the American public and the Chinese government have given support for regime change in North Korea given the stipulation that there is an attack on the U.S. or U.S. interests and allies. <u>So, I ask you, what is most likely to happen here?</u></strong></em></p> <p>Much of the world and most importantly the U.S. is on the verge of a new phase of severe economic decline according to all fundamental data trends.<strong> The U.S. is set to enter into yet another debate on the debt ceiling issue with many on the conservative side demanding that Trump and Republicans not roll over this time. </strong>And, as I discussed in my article <a href="http://www.alt-market.com/articles/3243-geopolitical-tensions-are-designed-to-distract-the-public-from-economic-decline">&#39;Geopolitical Tensions Are Designed To Distract The Public From Economic Decline&#39;</a><a href="http://src.boblivingstonletter.com/ego/8b16949a-593c-4842-ac82-6b2090c78483/402503264/318274" rel="noreferrer" target="_blank">,</a> a North Korean conflict stands as the best possible distraction.</p> <p><u><strong>How does the establishment rationalize a contested debt ceiling increase while also diverting blame away from themselves on the continued decline in U.S. and global fiscal data? War! </strong></u>Not necessarily a &quot;world war&quot; as so many are quick to imagine, but a regional war; a quagmire war that will put the final nail in the U.S. debt coffin and act as the perfect scapegoat for the inevitable implosion of the current stock market bubble. The international banks have much to gain and little to lose in a war scenario with North Korea.</p> <p><strong>I predict that there will be an attack blamed on North Korea.</strong> Either North Korea will be prodded into a violent reaction, or, a false flag event will be engineered and tied to Pyongyang. Remember, for the first time ever, China has essentially backed off of its opposition to invasion of North Korea as long as North Korea &quot;attacks preemptively.&quot; Why? Why didn&#39;t they make this exception back in 2013? Because now the international banks want a distraction and China is giving them the opening they require.</p> <p>Will this war culminate in global nuclear conflagration? No. The establishment has spent decades and untold trillions building it&#39;s biometric control grids and staging the new global monetary framework under the SDR system. They are not going to vaporize all of this in an instant through a nuclear exchange. What they will do, though, is launch regional wars and also economic wars. Those people expecting apocalypse in the Hollywood sense are going to find something different, but in my opinion much worse &mdash; a steady but slower decline into economic ruin and global centralization.</p> <p>Eventually, China and the U.S. will enter hostilities, but<strong> these hostilities will lean more towards the financial than the kinetic.</strong> The establishment cabal works in stages, not in absolute events. Another Korean war would be a disaster for America, just not in the way many people think.</p> <p><strong><u>Will there be a nuclear event? Yes.</u> If war takes place in North Korea then it is likely they will use a nuclear device somewhere in retaliation. We may even see a nuclear event as a false flag catalyst for starting the war in the first place. This will not be a global threat, but a mushroom cloud over any American city or outpost is enough to scare the hell out of most people. It is all that will be needed.</strong></p> <p><u><strong>Does this mean &quot;doom&quot; for the American people? It depends on how we react. </strong></u>Will we continue to hold the banking establishment responsible for all of their sabotage previous to a high profile war in the pacific? Or, will we get caught up in the tides of war fever? Will we question the source of future attacks on the U.S., or will we immediately point fingers at whoever the media or government tells us is the enemy? Our response really is the greatest determining factor in whether or not the American ideal of liberty stands or falls. This time, I do not see bluster, but a dark fog very common in the moments preceding conflict. This time, I believe we are indeed facing war, but war is always a means to an end. War is an establishment tool for social engineering on a massive scale.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="487" height="272" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20170816_nk1.png?1502921386" /> </div> </div> </div> http://www.zerohedge.com/news/2017-08-16/korean-war-part-ii-why-its-probably-going-happen#comments Adam Aftermath of the Korean War Apple China Chinese government Debt Ceiling Donald Trump Foreign relations of Korea Foreign relations of North Korea International Monetary Fund International relations Korean conflict Korean War Member states of the United Nations Military history by country North Korea North Korea North Korea–South Korea relations Politics Republics South Korea United Nations Thu, 17 Aug 2017 02:45:00 +0000 Tyler Durden 601813 at http://www.zerohedge.com Study Finds Higher Min. Wages Bring Crushing Job Losses For Female And Minority Workers http://www.zerohedge.com/news/2017-08-16/new-study-finds-higher-minimum-wages-bring-job-losses-crush-female-and-minority-work <p>Anyone who has a basic understanding of elementary-level arithmetic and some common sense can easily explain why raising the minimum wage is bad for employment levels.&nbsp; In a nutshell, higher labor costs simply improve the payback profile of capital investments in technology thus accelerating job losses. </p> <p>We recently shared the following example regarding California's minimum wage hike from $10 per hour to $15.&nbsp; At $10 per hour and a 10-year payback, employers may be reluctant to invest in new technology.&nbsp; But, at $15 per hour and a 6-years payback, that investment become a no-brainer.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user230519/imageroot/2016/07/26/Payback%20Example.png"><img src="http://www.zerohedge.com/sites/default/files/images/user230519/imageroot/2016/07/26/Payback%20Example_0.png" alt="Payback Example" width="600" height="227" /></a>&nbsp; </p> <p>Unfortunately, while these concepts are somewhat simplistic for most us, they have confounded left-leaning economists and politicians pretty much since the beginning of time. </p> <p>And <strong>while no amount of empirical evidence will change their minds</strong>, here is yet <a href="http://www.nber.org/papers/w23667?utm_campaign=ntw&amp;utm_medium=email&amp;utm_source=ntw">another study</a>, this time from Grace Lordan of the London School of Economics and David Neumark of UC Irvine, <strong>offering up evidence that raising minimum wages only serves to increase unemployment</strong> and disproportionately crushes female and minority low-income workers.</p> <p>Entitled "<a href="http://www.nber.org/papers/w23667?utm_campaign=ntw&amp;utm_medium=email&amp;utm_source=ntw">People Versus Machines: The Impact of Minimum Wages on Automatable Jobs</a>," the study found that each $1 increase in the minimum wage decreased the "share of lowskilled automatable jobs by 0.43 percentage point."&nbsp; Here's a summary of Lordan's findings:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Overall, we find that increasing the minimum wage decreases significantly the share of automatable employment held by low-skilled workers.<strong> Our estimates suggest that an increase of the minimum wage by $1 (based on 2015 dollars) decreases the share of lowskilled automatable jobs by 0.43 percentage point (an elasticity of ?0.11). </strong>However, these average effects mask significant heterogeneity by industry and by demographic group. In particular, there are large effects on the shares of <strong>automatable employment in manufacturing, where we estimate that a $1 increase in the minimum wage decreases the share of automatable employment among low-skilled workers by 0.99 percentage point (elasticity of ?0.17).</strong> Within manufacturing, the share of older workers in automatable employment declines most sharply, and the share of workers in automatable employment also declines sharply for women and blacks.</p> </blockquote> <p><a href="http://www.zerohedge.com/sites/default/files/images/user230519/imageroot/2017/08/16/2017.08.16%20-%20Min%20Wage%202.JPG"><img src="http://www.zerohedge.com/sites/default/files/images/user230519/imageroot/2017/08/16/2017.08.16%20-%20Min%20Wage%202_0.JPG" alt="Min Wage" width="600" height="133" /></a></p> <p>&nbsp;</p> <p>Meanwhile,<strong> the results are even worse for workers over 40, females and minorities...</strong></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>For example, a higher minimum wage significantly reduces the shares of both younger (? 25) and older (&gt; 40) workers in jobs that are automatable, by a larger magnitude compared to those aged 26-39. For the younger and older groups, the estimates imply that a $1 increase in the minimum wage reduces the shares in automatable work by 0.94 and 0.72 percentage points respectively (the corresponding elasticities are ?0.20 and ?0.17. <strong>Looking by both age and industry, for older workers (? 40 years old) the negative effect mainly arises in the manufacturing and public administration sectors (a decrease of 1.68 and 3.50 percentage points for a $1 minimum wage increase respectively), while for younger workers (&lt; 25 years old) the effects are large in many sectors but the estimate is close to zero for manufacturing.</strong> The middle age group, also, exhibits a decline in the share of workers in automatable jobs in manufacturing when the minimum wage increases – a 1.21 percentage point decline for a $1 increase. Thus, older workers appear more vulnerable to substitution away from automatable jobs when the minimum wage increases.</p> <p>&nbsp;</p> <p>On average,<strong> females are affected more adversely than males</strong>: in the aggregate estimates in column (1), the negative estimate is significant only for females, and is almost ten times larger, indicating that, for females<strong>, a minimum wage increase of $1 causes a decrease of 1.01 percentage points in the share of automatable jobs (the elasticity is ?0.14).</strong> Across industries, these negative effects for females are concentrated in manufacturing, services, and public administration; for example, a $1 minimum wage increase reduces the share of automatable jobs in public administration by 3.67 percentage points – an elasticity of ?0.41). For males, only the estimate for manufacturing is statistically significant; the estimated effect implies that a $1 increase in the minimum wage causes a decrease of 0.62 percentage point (an elasticity of ?0.13).</p> <p>&nbsp;</p> <p>Table 3 also points to <strong>similar overall effects by race, with a $1 increase in the minimum wage reducing the share in automatable jobs by 0.57 percentage point for whites and 0.72 percentage point for blacks.</strong> However, the effects are heterogeneous across industries. There are large estimated effects in manufacturing (1.19 percentage points) and public administration (1.53 percentage points) for whites, although only the first estimate is statistically significant. For blacks, there are large and statistically significant decreases in automatable shares in manufacturing and transport (declines of about 4.5 percentage point in both).</p> </blockquote> <p><a href="http://www.zerohedge.com/sites/default/files/images/user230519/imageroot/2017/08/16/2017.08.16%20-%20Min%20Wage.JPG"><img src="http://www.zerohedge.com/sites/default/files/images/user230519/imageroot/2017/08/16/2017.08.16%20-%20Min%20Wage_0.JPG" alt="Min Wage" width="600" height="362" /></a></p> <p>&nbsp;</p> <p>But, as usual, we're sure this extra data will have no impact on Bernie's "Fight for $15."&nbsp; Amazing how some politicians will embrace math and science when arguing climate change but completely reject it when discussing minimum wage...wonder why?</p> <p><img src="http://www.zerohedge.com/sites/default/files/images/user230519/imageroot/2017/08/16/Fight%20for%2015_0.JPG" alt="$15" width="600" height="397" /></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="530" height="380" alt="" src="http://www.zerohedge.com/sites/default/files/images/user230519/imageroot/Minimum%20Wage_11.JPG?1502888507" /> </div> </div> </div> http://www.zerohedge.com/news/2017-08-16/new-study-finds-higher-minimum-wages-bring-job-losses-crush-female-and-minority-work#comments Economy Income distribution Labor Labour economics Labour law London School of Economics Minimum wage Social Issues Socialism Unemployment Unemployment Wage Thu, 17 Aug 2017 02:20:00 +0000 Tyler Durden 601772 at http://www.zerohedge.com