http://www.zerohedge.com/fullrss2.xml/default en French Selection Ritual, Round Two: Slightly Premature Victory Laps http://www.zerohedge.com/news/2017-04-26/french-selection-ritual-round-two-slightly-premature-victory-laps <p><a href="http://www.acting-man.com/?p=49227"><em>Authored by Pater Tenebrarum via Acting-Man.com,</em></a></p> <h3><u><strong>Slightly Premature Victory Laps</strong></u></h3> <p>The <strong>nightmare of nightmares </strong>of the globalist elites and France&rsquo;s political establishment<strong> has been avoided</strong>: as the polls had indicated, Emmanuel Macron and Marine Le Pen are moving on to the run-off election; Jean-Luc&nbsp;Mélenchon&rsquo;s late surge in popularity did not suffice to make him a contender &ndash; it did however push the established Socialist Party deeper into the dustbin of history. That was very Trotskyist of him <em>(we can already picture a future Weekly World News headline: &ldquo;French socialists discover giant alien dust mites&rdquo;).</em></p> <p>&nbsp;</p> <p style="text-align: center;"><img class="aligncenter wp-image-49237" src="http://www.acting-man.com/blog/media/2017/04/marantonacron-still-life.jpg" style="width: 560px; height: 314px;" /></p> <p style="text-align: center;">Lateral entrants to the business of avenging the disinherited, leavened by strawberry cake.</p> <p><span id="more-49227">&nbsp;</span></p> <p><strong>Around three micro-seconds after the election results became known, the entire French and European political elite immediately announced its undying support of Emmanuel Macron, </strong>with only a handful of &ldquo;populist&rdquo; parties outside of France saying that they were rooting for Marine Le Pen.</p> <p>Just to clear this up beforehand, Ms. Le Pen may be the terror of the establishment, but she is just as statist as her competition was and is &ndash; in some respects probably more so. The run-off election is between two central planners (or at least &ldquo;third way&rdquo; proponents), each one of whom believes to be in possession of the &ldquo;better plan&rdquo;.</p> <p>&nbsp;</p> <p style="text-align: center;"><a href="http://www.acting-man.com/blog/media/2017/04/1-results.png" target="_blank"><img class="aligncenter wp-image-49228" src="http://www.acting-man.com/blog/media/2017/04/1-results-1024x673.png" style="width: 560px; height: 368px;" /></a></p> <p style="text-align: center;">First round election results: the distribution of support between Ms. Le Pen and Mr. Macron reminds us a bit of the <a href="http://www.acting-man.com/blog/media/2014/03/ukraine-2010-election.jpg">2010 election map of Ukraine</a>, which showed a similar East/ West split (see &ldquo;<a href="http://www.acting-man.com/?p=28941">Mapping the Conflict in Ukraine</a>&rdquo; for more details on this). Amazingly, Hamon didn&rsquo;t even win a single department &ndash; click to enlarge.</p> <p>&nbsp;</p> <p><strong>There is no political constituency for liberty or anything remotely resembling classical liberalism (= libertarianism) in France.</strong> Moreover, in view of Mr. Trump&rsquo;s recent magical transformation from putative swamp-draining rebel to slightly confused neo-con (who urgently <a href="https://www.thestar.com/news/world/2017/04/18/the-trump-admin-said-this-aircraft-carrier-was-on-her-way-to-north-korea-it-was-sailing-the-other-way.html">needs a compass</a>), it is clearly time to once again focus on the only thing that one can actually hope for in politicians, and that is <strong>entertainment value; luckily we have good news on that front.</strong></p> <p>Given unanimous establishment support for Macron, it was apparently concluded that the 2<sup>nd</sup> round voting ritual will be a mere formality, a kind of rubber-stamping exercise for the Brussels-approved candidate. Just to be safe, the French bureaucracy nevertheless mailed <a href="http://libertyunyielding.com/2017/04/15/tight-french-election-potential-significant-double-voting-problem-goes-unaddressed/">two ballot papers each instead of one</a> to several hundred thousand Frenchmen living abroad so they will be able to vote twice.</p> <p>That&nbsp; should produce a small haul of fraudulent votes for Macron, as it was decided to simply let the matter rest.<strong> Action will only be taken <em>if</em> fraudulent voting attempts are &ldquo;detected&rdquo; after the fact,</strong> which sounds like a difficult thing to do without Batman (in view of Le Pen&rsquo;s anti-EU stance, most Frenchmen living elsewhere in the EU are bound to vote against her for personal reasons).</p> <p>&nbsp;</p> <p style="text-align: center;"><a href="http://www.acting-man.com/blog/media/2017/04/2-second-round-projection.png" target="_blank"><img class="aligncenter wp-image-49229" src="http://www.acting-man.com/blog/media/2017/04/2-second-round-projection.png" style="width: 560px; height: 490px;" /></a></p> <p style="text-align: center;">Second-round voting intentions, from the department of reasonable assumptions: after Geert Wilders &ldquo;lost&rdquo; the election in the Netherlands by enlarging the presence of his party in parliament by 33%, the&nbsp; conviction that&nbsp; Mr. Macron will deliver a <a href="http://www.independent.co.uk/news/world/americas/sam-wang-princeton-election-consortium-poll-hillary-clinton-donald-trump-victory-a7399671.html">Hillary Clinton</a>-type <a href="http://www.msnbc.com/the-last-word/watch/scientist-predicts-99-chance-of-clinton-win-801634371744">landslide victory</a> has solidified (&ldquo;it doesn&rsquo;t matter if the probability is 91%, 95% or 99%&rdquo; &ndash; only climate science dazzles with more exactitude and prescience!). Admittedly, the recent French polls are probably more accurate than the US polls were, but we will still spend most of this post explaining why an upset could happen anyway &ndash; click to enlarge.</p> <p>&nbsp;</p> <p><strong>Confidence that the Brexit and Trump polling failures were non-repeatable one&mdash;off events seems indeed quite strong, judging from the party that was thrown in stock markets around the world. Even the sickly looking euro regained its footing.</strong></p> <p>To this we would point out the following: for a variety of unrelated reasons the euro was ripe for a rally <em>regardless</em> of the outcome of the first round election. Moreover, it simply doesn&rsquo;t matter what the candidates<em> say</em> they want to do about the euro &ndash; not one of them is likely to abandon it.</p> <p>Without a parliamentary majority it isn&rsquo;t even possible for a French president to call a referendum on EU membership or the euro, as it would touch on a constitutional issue. We bet that would be just fine with Ms. Le Pen, since going back to the French franc would entail headaches any politician will want to avoid &ndash; unless a major crisis forces his or her hand (note: the FN has currently just 2 out of 577 seats in the National Assembly and Macron&rsquo;s new party has so far not yet taken part in an election).</p> <p>Buying already overbought and overvalued stocks is a different kettle of fish though &ndash; although the relief rally was not really unexpected, it still looks like mindless herding behavior. It makes about as much sense as buying gold due to rising geopolitical tensions, i.e., not much.</p> <p>&nbsp;</p> <p style="text-align: center;"><a href="http://www.acting-man.com/blog/media/2017/04/3-CAC-40-euro.png" target="_blank"><img class="aligncenter wp-image-49230" src="http://www.acting-man.com/blog/media/2017/04/3-CAC-40-euro.png" style="width: 561px; height: 496px;" /></a></p> <p style="text-align: center;">French stocks take off, as does the euro. The latter makes sense, the former doesn&rsquo;t really &ndash; click to enlarge.</p> <p>&nbsp;</p> <p>Money supply growth rates are currently slowing in every major currency area except China. M1 growth was recently still fairly high in the euro zone in absolute terms, but the ECB is beginning to &ldquo;taper&rdquo; QE as of this month, so a further slowdown is quite likely.</p> <p style="text-align: center;">&nbsp;</p> <p style="text-align: center;"><a href="http://www.acting-man.com/blog/media/2017/04/4-M1.png" target="_blank"><img class="aligncenter wp-image-49231" src="http://www.acting-man.com/blog/media/2017/04/4-M1.png" style="width: 561px; height: 348px;" /></a></p> <p style="text-align: center;">Narrow euro area money supply aggregate M1 (~equivalent to TMS) &ndash; the y/y growth rate has slowed from a high of ~14.5% to ~8.5%, with a further slowdown likely. That is usually not the best time to buy stocks, especially if they have already rallied for a while. Obviously, a Macron victory isn&rsquo;t going to persuade the ECB to print more money &ndash; click to enlarge.</p> <p>&nbsp;</p> <h3><u><strong>Rise of the Deplorables</strong></u></h3> <p><strong>The default assumption should be that Macron will indeed win the second round, but he does have some problems that may be masked in the polls by the &ldquo;Bradley effect&rdquo;. </strong>One advantage of Ms. Le Pen that reminds us a bit of Donald Trump&rsquo;s campaign is that her voters seem more engaged and less likely to switch sides. The same cannot be said of Macron&rsquo;s supporters.</p> <p>&nbsp;</p> <p style="text-align: center;"><a href="http://www.acting-man.com/blog/media/2017/04/5-french-polls-2017-04-11a.png" target="_blank"><img class="aligncenter wp-image-49232" src="http://www.acting-man.com/blog/media/2017/04/5-french-polls-2017-04-11a-1024x362.png" style="width: 560px; height: 198px;" /></a></p> <p style="text-align: center;">Not only Macron&rsquo;s supporters are less sure of their choice than Le Pen&rsquo;s: note how fickle Hamon&rsquo;s voters are. How certain is it that only 3% of them will vote for Le Pen vs. 70% for Macron? What they are telling an interviewer may not really be indicative of where they will put their cross in the contemplative quietude of the voting booth &ndash; click to enlarge.</p> <p>&nbsp;</p> <p>In recent years security, immigration and terrorism have become increasingly important issues. <strong>It is fair to say that a great many French voters have by now&nbsp; migrated closer to Le Pen&rsquo;s views on these topics </strong>(so to speak), in spite of the fact that the population of France once was one of the most tolerant in Europe.</p> <p>&nbsp;</p> <p style="text-align: center;"><a href="http://www.acting-man.com/blog/media/2017/04/6-front-national-performance-in-french-elections-historical.png" target="_blank"><img class="aligncenter wp-image-49233" src="http://www.acting-man.com/blog/media/2017/04/6-front-national-performance-in-french-elections-historical.png" style="width: 560px; height: 560px;" /></a></p> <p style="text-align: center;">After its election results fell intermittently to a low point from 2006 to 2008, support for Marine Le Pen&rsquo;s Front National has grown noticeably. There seem to be more deplorables in France than previously suspected &ndash; click to enlarge.</p> <p>&nbsp;</p> <p>That has changed significantly after the big surge in terror attacks over the past year (here is a list of <a href="https://mishgea.files.wordpress.com/2017/02/french-election-issues.png">French voter priorities</a> posted by Mish in February; security and terrorism are sharing third place with purchasing power, right after jobs and government handouts). It should be no surprise that the Front National has become a bit of a fan favorite in recent years.</p> <p>Last week&rsquo;s terror attack in Paris elicited a comment by Macron that was faintly reminiscent of Marie Antoinette&rsquo;s idea about people lacking bread. In an editorial for the Guardian he essentially told people to &ldquo;get used to it&rdquo;. That may simply have been a realistic assessment, or a less than ideal way of putting it. Still, when emotions are sufficiently stirred up, it may be taken as a sign that he won&rsquo;t do much about it. That is quite different from Le Pen&rsquo;s activist attitude.</p> <p>&nbsp;</p> <p style="text-align: center;"><img class="aligncenter wp-image-49238" src="http://www.acting-man.com/blog/media/2017/04/Philosophical-Congruence.jpg" style="width: 561px; height: 385px;" /></p> <p style="text-align: center;">Le Pen doesn&rsquo;t seem to consider the problem &ldquo;imponderable&rdquo; &ndash; she would simply close the borders to immigrants from Isistan. Once upon a time this stance was widely decried as racist, but France has been on the receiving end of numerous terror attacks and many people&rsquo;s attitudes have changed accordingly.</p> <p>&nbsp;</p> <p style="text-align: center;"><img class="aligncenter wp-image-49235" src="http://www.acting-man.com/blog/media/2017/04/get-used-to-it-1024x424.jpg" style="width: 560px; height: 232px;" /></p> <p style="text-align: center;">This doesn&rsquo;t look like something one would want to get used to.</p> <p>&nbsp;</p> <h3><u><strong>Macron: Hidden Entertainment Value</strong></u></h3> <p><strong>It may in this case be to Macron&rsquo;s advantage that he frequently dispenses fascinating outbursts of verbiage that seem deserving of&nbsp; being entered into an incomprehensibility competition.</strong> He sounds at times as if he has a built-in postmodernism generator, or as if his speech hasn&rsquo;t been decrypted just yet. People may therefore not be worried too much about what he says, since it is always possible that he has switched to philosophical bon-mot mode, and that stuff is generally beyond the ken of mere mortals.</p> <p>It is incidentally also the good news we alluded to above, in the sense of entertainment to look forward to. We were previously fairly certain that only Marine Le Pen and perhaps the French Hugo Chavez would be able to deliver a satisfactory performance entertainment-wise. It turns out they have company.</p> <p>After taking a closer look at Macron&rsquo;s antics, we realized we had overlooked an incredibly gifted <em>artiste</em>. Because of this exciting discovery we can now look forward to the election with complete equanimity &ndash;&nbsp; any outcome will do. Here are a few remarks by other observers and critics commenting on his rare talent:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>François Baroin: &ldquo;<em>He says nothing about nothing, and probably doesn&rsquo;t think much more than that about it either</em>.&rdquo;</p> <p>&nbsp;</p> <p>Unknown (to us, anyway) observer: <em>&ldquo;That is to say, a little elusive&hellip; it sounded hollow, in my opinion&rdquo;</em></p> <p>&nbsp;</p> <p>Another unknown observer (faintly reminiscent of Sherlock Holmes): &ldquo;<em>It is the most brilliant encryption system in history</em>.&rdquo;</p> <p>&nbsp;</p> <p>Desperate woman standing in a fog bank: <em>&ldquo;I don&rsquo;t understand&hellip; I don&rsquo;t understand a word.&rdquo;</em></p> <p>&nbsp;</p> <p>Yet another anonymous observer: &ldquo;<em>This surpasses everything I could imagine.&rdquo;</em></p> <p>&nbsp;</p> <p>Marine Le Pen, speaking to Macron in a debate: <em>&ldquo;You have an insane talent, you end up speaking for seven minutes, I cannot even summarize your train of thought, you have said nothing, it is like the absolute void between the stars.&rdquo;</em></p> </blockquote> <p>What is it that so excites and at times perplexes his fans? We give you a few examples below (and will provide proof that he really said those things):</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Macron at a feminism conference: <em>&ldquo;The identity is &ldquo;A&rdquo; equals &ldquo;A&rdquo;. There exist at least &ldquo;A&rsquo;s&rdquo; and &ldquo;B&rsquo;s&rdquo;. I didn&rsquo;t want that &ldquo;A&rdquo; equals &ldquo;B&rdquo;.&rdquo;</em></p> <p>&nbsp;</p> <p>Macron during an interview: <em>&ldquo;You don&rsquo;t want to live in a box, do you? I don&rsquo;t. And so, our life always happens &ldquo;at the same time&rdquo;, it is more complex than what we want to reduce it to.&rdquo;</em></p> <p>&nbsp;</p> <p>Macron writing in &ldquo;Le Journal du Dimanche&rdquo;: <em>&ldquo;I have always accepted the vertical dimension, the transcendence, but at the same time, it has to be fully anchored in the immanent, in the material.&rdquo;</em></p> <p>&nbsp;</p> <p>Macron delivering a speech:<em> &ldquo;I, my life, my memories, they are made of childhood memories of my grandmother and that professor of philosophy, whom I have never seen&hellip;&nbsp; and yet, I have the feeling I know his face.&rdquo;</em></p> <p>&nbsp;</p> <p>Another Macron interview: &ldquo;<em>What constitutes the French spirit is a constant aspiration to the universal, that is, this tension between what has been and the part of identity&hellip; this strict ipseity, and the aspiration to a universal, that is to say, that which escapes us.&rdquo; </em>[ed. note: &ldquo;ipseity&rdquo; = &ldquo;selfhood&rdquo; &ndash; a term to be found &ndash; no kidding &ndash; in the &ldquo;Dictionary of&nbsp; Untranslatables&rdquo;;&nbsp; apparently French deconstructionist philosopher Jaques Derrida used the term &lsquo;<em>ipséité&rsquo;</em> frequently in his writings. We incidentally also have to thank Derrida for books like &ldquo;<em>Specters of Marx</em>&rdquo; and sayings like &ldquo;<em>T</em><em>o pretend, I actually do the thing: I have therefore only pretended to pretend. </em>And lastly, from another interview comes what we would at this stage call Macron&rsquo;s <em>piece de r</em><em>é</em><em>sistance&hellip; </em>something for true connoisseurs, the high point &ndash; so to speak the Mount Everest of his pseudo-philosophizing and improbable reasoning. Just a few sentences of oddly poetic nonsense, declaimed with such moving sincerity one sits spellbound as the&nbsp; magniloquent imagery unfolds &ndash; until either the last sentence, or&hellip; We made the terrible mistake of watching the facial expression of the TV presenter, who listened to it live when it premiered and managed to preserve a deadpan, slightly bemused expression throughout, with a degree of self-control worthy of a Shaolin warrior monk. We probably sprained something in the process (the <em>septum transversum</em>? If Macron were in the US, we could sue him now).&nbsp; So here goes, Macron has the word:</p> <p>&nbsp;</p> <p><em>&ldquo;</em><em>We all have our roots. And because we are all deeply rooted, there are trees next to us&hellip; there are rivers, there are fish&hellip; There are brothers and sisters&hellip;&rdquo; </em></p> </blockquote> <p><strong>Stunning. We have in the meantime found out there is <em>more</em>&hellip; the man is a veritable fount of memorable quotes.</strong> Here is a video that shows him actually saying all of the above (in French, which somehow makes it even funnier):</p> <p style="text-align: center;"><iframe allowfullscreen="" frameborder="0" height="315" src="https://www.youtube.com/embed/446Am7O5yCc" width="560"></iframe></p> <p style="text-align: center;">The reincarnation of Socrates&hellip; or someone like him. Sort of.</p> <p>&nbsp;</p> <h3><u><strong>What If?</strong></u></h3> <p>We have to briefly consider what happens if the <em>bête&nbsp;noire </em>Marine Le Pen &ndash; unlikely as it seems &ndash; manages to pull a Trumpian upset. When Donald Trump won, the big surprise was that risk assets only went down for about an hour and immediately commenced to rally, a state they have been in every since. We don&rsquo;t believe&nbsp; situation in France is going to be similar, if a surprise victory is achieved by the apparently greatly feared populist candidate.</p> <p>The reason is mainly that market participants have decided to celebrate <em>already</em>. Prior to the US election, a mild undercurrent of &ldquo;he <em>might</em> just pull it off&rdquo; was always detectable. Also, the markets were a bit nervous, with volatility premiums high until D-day and the market weakening somewhat into election day.</p> <p>This more recent flipping of the switch from semi-sobriety to full-on party mode is almost disrespectful by comparison. Anyway, it also tells us that the election outcome is widely regarded as predetermined and anything else is therefore going to upset the markets to varying degrees (in the short term).</p> <p>&nbsp;</p> <p style="text-align: center;"><img class="aligncenter wp-image-49236" src="http://www.acting-man.com/blog/media/2017/04/Le-Pen-in-Flight-1-1024x680.png" style="width: 560px; height: 372px;" /></p> <p style="text-align: center;">She looks like she&rsquo;s about to take off&hellip; can she actually fly? Her first round result was the best the FN has achieved in its history (see insert). Oh, and she&rsquo;s wagging two fingers at once, for extra-emphasis. Finger-wagging by politicians is usually not a good sign, since it is most often employed when talk turns to perfectly harmless voluntary activities that the speaker wants to make illegal or regulate into near-death type catatonic compliance.</p> <p>&nbsp;</p> <h3><u><strong>Conclusion</strong></u></h3> <p>This is probably the last time we will write about the French election, unless the unlikely happens somehow. As we said though, that is a possibility that shouldn&rsquo;t be dismissed. Other than that, we just hope that Macron continues with his creative impromptu wordsmith career.</p> <p>*&nbsp; *&nbsp; *</p> <h3><u><em><strong>Bonus Chart: Long Term Approval Bear Market</strong></em></u></h3> <p>French presidents seem to have impressed their subjects less and less as time has gone on. Mr. Hollande saw his approval rating tumble to levels so low they were&nbsp; previously unimaginable; he didn&rsquo;t even try for a second term as a result. To add insult to injury, at the time his approval rating hit its low it amounted exactly to 100 minus Putin&rsquo;s approval rating. Wining the French presidency is evidently easier and more fun than actually governing.</p> <p>As a final aside: five of seven post WW2 French presidents of France were &ldquo;conservatives&rdquo; &ndash; and yet, France is by many measures one of the most socialistic countries in the EU today, with government spending amounting to a breath-taking 58% of GDP (no wonder they are liked less and less).</p> <p>&nbsp;</p> <p style="text-align: center;"><a href="http://www.acting-man.com/blog/media/2017/04/7-approval.png" target="_blank"><img class="aligncenter wp-image-49234" src="http://www.acting-man.com/blog/media/2017/04/7-approval-1024x532.png" style="width: 560px; height: 291px;" /></a></p> <p style="text-align: center;">The people increasingly disapprove&hellip; &ndash; click to enlarge.</p> <p>&nbsp;</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="638" height="321" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/macron.jpg?1493254435" /> </div> </div> </div> http://www.zerohedge.com/news/2017-04-26/french-selection-ritual-round-two-slightly-premature-victory-laps#comments 8.5% B+ Bear Market China default Donald Trump Emmanuel Macron encryption system Euro Europe European Central Bank European Union Euroscepticism France Front National Jean-Luc Mélenchon Le Pen family M1 Macron Marine Le Pen Money Supply National Assembly National Front Netherlands Politics of France Purchasing Power Runoff voting Socialist Party Two-round system Ukraine Volatility Thu, 27 Apr 2017 09:00:00 +0000 Tyler Durden 594449 at http://www.zerohedge.com Coffee Carnage Crushes Hedge Funds Amid Record Bullish Positioning http://www.zerohedge.com/news/2017-04-26/coffee-carnage-crushes-hedge-funds-amid-record-bullish-positioning <p>The &#39;smart money&#39; was <strong>disastrously wrong</strong>... Having <strong>piled herd-like into near record-high bullish positions</strong> in Robusta futures (used in instant coffee) over the last year...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/04/21/20170426_coffee.jpg"><img height="314" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/04/21/20170426_coffee_0.jpg" width="600" /></a></p> <p>&nbsp;</p> <p>Hedge funds face coffee carnage this week as the price for the commodity<strong> collapsed over 13% in the last 6 days...</strong></p> <p><img height="314" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/04/21/20170426_coffee2_0.jpg" width="600" /></p> <p>&nbsp;</p> <p>The biggest bloodbath since July 2011...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/04/21/20170426_coffee1.jpg"><img height="305" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/04/21/20170426_coffee1_0.jpg" width="600" /></a></p> <p>&nbsp;</p> <p><a href="https://www.bloomberg.com/news/articles/2017-04-25/robusta-coffee-extends-plunge-that-caught-hedge-funds-unaware"><em>As Bloomberg reports, </em></a>while the market is facing a third annual shortage, more supply from key growers has eased concerns about short-term tightness and cut price gains in the past year to 22 percent. The slump over the past week pushed prices below both the 100-day and 200-day moving averages, levels often used by traders to predict future moves. Robusta&rsquo;s 14-day relative-strength index has fallen to about 19, signaling prices may have dropped too fast.</p> <p><em><strong>&ldquo;The robusta bull market could be over for the rest of the year,&rdquo; </strong></em>Carlos Mera Arzeno, a commodities analyst with Rabobank International in London, said by email. <strong><em>&ldquo;The price is falling due to a combination of fundamental and technical reasons. You have large non-farmer stocks in Vietnam and Indonesia, and also funds selling, regardless of the fundamentals.&rdquo;</em></strong></p> <p><em><strong>&ldquo;Funds that are still long will be hit, and those funds tend to be fundamentals based,&rdquo;</strong></em> Arzeno said.</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="966" height="505" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20170426_coffee.jpg?1493222687" /> </div> </div> </div> http://www.zerohedge.com/news/2017-04-26/coffee-carnage-crushes-hedge-funds-amid-record-bullish-positioning#comments Arab culture Coffee Crops Finance Food and drink Futures contract Hedge fund Money Moving Averages Robusta Smart Money Thu, 27 Apr 2017 08:15:00 +0000 Tyler Durden 594390 at http://www.zerohedge.com Which U.S. States Depend The Most On Foreign Trade? http://www.zerohedge.com/news/2017-04-26/which-us-states-depend-most-foreign-trade <p>In the past several years, nationalistic rhetoric and support for protectionist trade policies have risen sharply across the world. The election of President Donald Trump signaled that Americans are dissatisfied with the economy, including foreign trade. But others point out that the United States often benefits from trade.</p> <p><a href="https://howmuch.net/"><em>HowMuch.net </em></a>has created the infographic below to<strong> show the U.S. states most reliant on foreign trade</strong>.</p> <p><a href="https://howmuch.net/articles/how-important-is-international-trade-to-the-economy-of-each-state#img0"><img src="//cdn.howmuch.net/content/images/how-important-is-trade-to-each-state-bec9.png" style="height: 386px; width: 600px;" title="source: howmuch.net" /></a></p> <p><a href="https://howmuch.net/articles/how-important-is-international-trade-to-the-economy-of-each-state"><em>Source: HowMuch.net</em></a></p> <p><strong>The chart above shows each state by Gross Domestic Product (GDP) and trade shares as a percentage of GDP.</strong> Each state is represented by a circle. Inside each state&rsquo;s circle is a <strong>smaller, pink circle that shows each state&rsquo;s proportional reliance on foreign trade, as a share of GDP.</strong> Trade shares as a percentage of GDP is measured by adding the value of both the state&rsquo;s imports and exports and dividing by the state&rsquo;s GDP. The&nbsp;<a href="https://www.bea.gov/newsreleases/regional/gdp_state/2017/qgsp0217.htm" target="_blank">data</a>&nbsp;were collected from the Bureau of Economic Analysis in conjunction with the&nbsp;<a href="https://www.census.gov/" target="_blank">Census Bureau</a>.</p> <h3><u>The Five States Most Reliant on Trade, by Trade Shares of GDP</u></h3> <ul> <li> <p dir="ltr">Michigan &ndash; 38%</p> </li> <li> <p dir="ltr">Louisiana &ndash; 35.1%</p> </li> <li> <p dir="ltr">South Carolina &ndash; 34.8%</p> </li> <li> <p dir="ltr">Tennessee &ndash; 34.7%</p> </li> <li> <p dir="ltr">Kentucky &ndash; 34.3%</p> </li> </ul> <h3>The Five Sates Least Reliant on Trade, by Trade Shares of GDP</h3> <ul> <li> <p dir="ltr">South Dakota &ndash; 5.3%</p> </li> <li> <p dir="ltr">Wyoming &ndash; 5.8%</p> </li> <li> <p dir="ltr">New Mexico &ndash; 6.5%</p> </li> <li> <p dir="ltr">Colorado &ndash; 6.8%</p> </li> <li> <p dir="ltr">Hawaii &ndash; 7.0%</p> </li> </ul> <p dir="ltr"><strong>From the chart, it is easy to see how much the U.S. economy relies on foreign trade.</strong></p> <p dir="ltr">But some states rely on international trade more than others.&nbsp;<strong>Michigan is that state that relies on foreign trade the most, proportional to its GDP. This is most likely due to the fact that nearly all of America&rsquo;s largest car companies are located in Michigan.</strong> Much of Michigan&rsquo;s large international trade sheet is due to the North American Free Trade Agreement (NAFTA), which facilitates trade between the United States, Mexico and Canada. In fact,&nbsp;<a href="http://www.businessinsider.com/state-and-country-trade-maps-2015-7" target="_blank">many states list Canada and/or Mexico as their top trading partner</a>. Second on the list of states that are the most reliant on foreign trade is Louisiana. Contrary to most other states, Louisiana does not list Mexico or Canada as a top trading partner. Because of Louisiana&rsquo;s rail connections and access to the Gulf of Mexico, which has an abundance of energy resources, the state&rsquo;s top import partner is Saudi Arabia. Louisiana&rsquo;s top export partner is China, who swallows up much of the state&rsquo;s energy products.</p> <p dir="ltr"><strong>At the bottom of the list of states reliant on foreign trade, there are states with low populations. </strong>Wyoming has the lowest population of all states. Hawaii, New Mexico and South Dakota all have populations below 2.1 million people. Colorado has a population of around 5.4 million people. States with a low population rely less on international trade because there are less major trade hubs and major corporations in low population states. In fact, most of the states that rely on foreign trade have major trade hubs. Michigan and Tennessee are home to many auto manufacturing plants, both domestic and international. South Carolina and Washington are both home to the major business operations of Boeing, the world&rsquo;s largest aerospace company.&nbsp;<a href="https://www.aei.org/publication/how-important-is-trade-to-each-us-states-economy-important-enough-that-protectionism-would-weaken-most-states/" target="_blank">Boeing is the largest manufacturing exporter in the United States</a>.</p> <p dir="ltr">From the chart,<strong> it is clear that the U.S. economy is at least partially reliant on foreign trade. </strong>This is especially true for states with major trade hubs and multinational corporations. At the same time,<strong> low population states without major trade hubs are not very reliant on international trade.</strong> If President Trump does raise tariffs or changes existing trade agreement in a major way, he should do so carefully and diligently. Even a minor change to the international supply chain of the United States could disrupt business and harm the labor market.</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="1400" height="900" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20170425_states.png?1493253756" /> </div> </div> </div> http://www.zerohedge.com/news/2017-04-26/which-us-states-depend-most-foreign-trade#comments Americas Boeing Bureau of Economic Analysis Bureau of the Census Business Census Bureau China Donald Trump Economy Economy of the United States G20 nations Gross Domestic Product Gross domestic product Gulf of Mexico Liberal democracies Member states of the United Nations Mexico Mexico Michigan North American Free Trade Agreement Saudi Arabia South Carolina United States World Thu, 27 Apr 2017 07:30:00 +0000 Tyler Durden 594448 at http://www.zerohedge.com French Bond Investors Skeptical That Election Risk Is Over http://www.zerohedge.com/news/2017-04-26/french-bond-investors-skeptical-election-risk-over <p>Bond investors are <strong>far from convinced that the risks surrounding the French election are over</strong> despite the broader market exuberance following the outcome of the first round.</p> <p><strong>French 2Y yields have only corrected about half of the risk premium over German 2Y yields since the election</strong> (and in fact are widening out today)</p> <p><img height="312" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/04/21/20170426_france1_0.jpg" width="600" /></p> <p>&nbsp;</p> <p>Furthermore, as Bloomberg details, <strong>open interest, a measure of the number of contracts outstanding, has dropped only 10 percent so far this week </strong>even as French government bond futures surged after the race for presidency narrowed to Emmanuel Macron&nbsp;and&nbsp;Marine Le Pen.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/04/21/20170426_france2_1.jpg"><img height="287" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/04/21/20170426_france2_1_0.jpg" width="600" /></a></p> <p>A decline in open interest amid a rally in an asset typically <strong>suggests short-covering rather than new positions being added</strong>... but the modest size of the drop suggests few investors are relieved enough to pile back into &#39;still cheap&#39; OATs.</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="968" height="504" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20170426_france1.jpg?1493214763" /> </div> </div> </div> http://www.zerohedge.com/news/2017-04-26/french-bond-investors-skeptical-election-risk-over#comments Bond Bond Business Emmanuel Macron French government Futures contract Risk Premium Thu, 27 Apr 2017 06:45:00 +0000 Tyler Durden 594371 at http://www.zerohedge.com Will Your Savings Get Caught In Government Shutdown Crossfire? http://www.zerohedge.com/news/2017-04-26/will-your-savings-get-caught-government-shutdown-crossfire <p><a href="http://www.birchgold.com/news/savings-caught-in-government-crossfire"><em>Via Birch Gold Group,</em></a></p> <p>Donald Trump and the GOP face a major hurdle as their first budget test looms next week, along with several problematic issues that could prevent an agreement and trigger a government shutdown.</p> <p class="CSSBody">The potential shutdown would put a hiccup in federal bureaucracy for a few weeks, but that&rsquo;s not the real reason Americans should be worried. <em><strong>Turns out, there may be an unseen economic danger that could affect you and your savings.</strong></em></p> <p class="CSSTopic"><span style="text-decoration: underline;"><strong>Shutdown Dejavu?</strong></span></p> <p class="CSSBody">We&rsquo;ve been down this road before, haven&rsquo;t we?</p> <p class="CSSBody">Back in 2013, federal legislators failed to reach an agreement on funding appropriation, and there were some serious consequences. This time the fallout could be just as bad, or even worse.</p> <p class="CSSBody">The political mechanics of <em>why</em> are a little confusing, so let&rsquo;s break it down piece-by-piece.</p> <p class="CSSBody">There&rsquo;s a sensitive relationship between the <strong>debt ceiling</strong> and the <strong>federal budget</strong>. Both require congressional approval, and big problems arise if either gets blocked.</p> <p class="CSSBody">Here&rsquo;s where things get complicated&hellip;</p> <p class="CSSBody">In negotiations of the federal budget, the majority party (in this case, Republicans), can hold the debt ceiling &ldquo;hostage,&rdquo; so to speak as a way to influence the president &mdash; plus legislators from the opposing party.</p> <p class="CSSBody">Republicans have to be careful not to overplay their hand, though. If they do, it could result in a shutdown, which <em><strong>nobody </strong></em>wants - each group for their own reasons.</p> <p class="CSSBody"><em><strong>That said, why should Americans care? What are the risks? And why could this shutdown be worse than the last?</strong></em></p> <p class="CSSTopic"><span style="text-decoration: underline;"><strong>Why the Stakes Are So High</strong></span></p> <p class="CSSBody">On March 15, the <a href="http://www.birchgold.com/news/trump-to-break-through-debt-ceiling" rel="noopener noreferrer" target="_blank">debt ceiling expired</a>, and the Treasury (acting on behalf of the president) was forced to start using &ldquo;extraordinary measures&rdquo; to keep the U.S. from defaulting on its debt.</p> <p class="CSSBody">If Congress doesn&rsquo;t act briskly, we could see another credit downgrade or worse. And a government shutdown caused by budgetary squabbles would dramatically increase the chances of that happening.</p> <p class="CSSBody">However, there&rsquo;s one thing that makes this shutdown particularly special, not to mention uniquely risky.</p> <p class="CSSBody">According to data from LPL Financial, analyzed and reported on by Ryan Vlastelica at <a href="http://www.marketwatch.com/story/should-wall-street-fear-a-government-shutdown-heres-how-stocks-fared-during-past-closures-2017-04-21" rel="noopener noreferrer" target="_blank">MarketWatch</a>, there have only been a handful of government shutdowns under one party&rsquo;s control. But those few shutdowns have historically been the most economically damaging.</p> <p class="CSSBody">Vlastelica writes (emphasis added):</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p class="CSSRed">&ldquo;<strong>A shutdown during a united government could underline the difficulty of major legislation getting passed, something investors are particularly attuned to right now</strong>. The rally that was sparked by Trump&rsquo;s election started to unravel when a health-care reform bill was pulled because it didn&rsquo;t have the votes to pass. <strong>The post-election rally largely occurred because investors viewed Trump&rsquo;s economic agenda on taxes, infrastructure and regulation to be positive for growth. The prospect of those initiatives not coming to fruition has raised questions that the market&rsquo;s robust move was unwarranted.</strong>&rdquo;</p> </blockquote> <p class="CSSBody"><em><strong>So not only could this potential shutdown put the U.S.&rsquo;s creditworthiness at risk of taking another hit (and causing a repeat of all the negative economic consequences Americans were forced to suffer last time), but it could be a big downward trading signal for equities markets as well.</strong></em></p> <p class="CSSBody">But in the meantime, your savings could easily get caught in the crossfire while federal politicians duke it out.</p> <p class="CSSTopic"><span style="text-decoration: underline;"><strong>How to Keep Another Shutdown from Touching Your Wealth</strong></span></p> <p class="CSSBody">The last time there was a government shutdown, then-President Obama acted like a petulant child by shutting down national parks and even fencing off national monuments and posting armed guards to keep people out. This was intentionally designed to cause conflict so that Congress would raise the debt ceiling faster &mdash; illustrating how desperately the president needs Congress to act on it.</p> <p class="CSSBody">This time the president is facing off against his own party, and throwing up roadblocks to the negotiation like border wall funding.</p> <p class="CSSBody">Trump is calling Republicans&rsquo; bluff, most likely because the all-important 100-day mark of his presidency is quickly approaching. Fearing scorn from media and the public for compromising his plans, Trump is increasing the chances of another shutdown (and consequently another debt ceiling crisis) to avoid losing face.</p> <p class="CSSBody">Obviously, it&rsquo;s not the end of the world if certain non-essential functions of government don&rsquo;t have money to operate for a week or two&hellip; <strong>so what&rsquo;s there to worry about?</strong></p> <p class="CSSBody">Well, the biggest risk is another downgrade to the U.S. credit rating, which could crash both bonds and stocks&hellip;</p> <p class="CSSBody"><strong>On top of that, a shutdown under single-party rule sends a message to market makers that Trump&rsquo;s many proposed policies for the economy &mdash; the ones responsible for the rally in stocks we&rsquo;ve seen over previous months &mdash; aren&rsquo;t as likely to come true as previously hoped, which could send markets down even further.</strong></p> <p class="CSSBody">However, such a scenario would cause an equal and opposite reaction in another type of investment that Americans could take advantage of. Essentially, it would send investors flocking to safe haven investments like gold and silver, which would drive metal prices through the roof.</p> <p class="CSSBody"><em><strong>This shutdown could send a huge ripple effect throughout the global economy, affecting financial markets across world. Securing your wealth yet with gold could be a crucial step toward ensuring your safety.</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="492" height="293" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20170426_debt.jpg?1493253379" /> </div> </div> </div> http://www.zerohedge.com/news/2017-04-26/will-your-savings-get-caught-government-shutdown-crossfire#comments Congress Debt Ceiling Donald Trump Donald Trump Global Economy Government shutdowns in the United States Minnesota state government shutdown Politics Republican Party United States United States debt ceiling United States federal government shutdown Thu, 27 Apr 2017 06:00:00 +0000 Tyler Durden 594447 at http://www.zerohedge.com Tiny Trump Hands Deliver Teeny Tiny Tax Plan, US Stocks Collapse in Despair http://www.zerohedge.com/news/2017-04-26/tiny-trump-hands-deliver-teeny-tiny-tax-plan-us-stocks-collapse-despair <h1 class="post_title" style="font-family: Arial, 'Helvetica Neue', Helvetica, sans-serif, sans-serif; font-size: 25px; line-height: 1.4em; margin-top: 0px; margin-bottom: 0px; letter-spacing: -0.9px; color: #40271c !important;"><span style="font-size: 16px; font-weight: normal; letter-spacing: normal; background-color: #f8f8f8;">The following article by&nbsp;</span><strong style="font-size: 16px; letter-spacing: normal;"><a href="http://thegreatrecession.info/blog/about-the-great-recession-blog-author-david-haggith/">David Haggith</a></strong><span style="font-size: 16px; font-weight: normal; letter-spacing: normal; background-color: #f8f8f8;">&nbsp;was published on&nbsp;</span><em style="font-size: 16px; font-weight: normal; letter-spacing: normal;"><strong><a href="http://thegreatrecession.info/blog/tiny-trump-hands-deliver-teeny-tiny-tax-plan-us-stocks-collapse-despair/">The Great Recession Blog</a></strong></em><span style="font-size: 16px; font-weight: normal; letter-spacing: normal; background-color: #f8f8f8;">:</span></h1> <div class="singlepost entry" style="border-bottom-left-radius: 5px; background-color: #f8f8f8; border-top-width: 1px; border-top-style: solid; border-top-color: #610906; font-family: Arial, 'Helvetica Neue', Helvetica, sans-serif, sans-serif; line-height: 1.5em; margin-top: 4px; padding: 2px 4px 1px; width: 657.671875px; font-size: 16px; color: #40271c;"><img src="http://thegreatrecession.info/blog/wp-content/uploads/TrumpTaxPlan-500x667.jpg" width="500" height="667" style="float: left; margin-right: 6px; margin-left: 6px; border-top-left-radius: 3px; border-top-right-radius: 3px; border-bottom-right-radius: 3px; border-bottom-left-radius: 3px; padding: 4px; box-shadow: none !important; border-style: none !important; opacity: 1 !important;" class="attachment-single-post-thumbnail size-single-post-thumbnail wp-post-image" /><br /> <p style="margin: 5px 5px 10px;">The big announcement of the really, really big Trump Tax Plan with the “biggest tax cuts in history” came out bigly on&nbsp;Wednesday, as Trump promised. Treasury Secretary Steven Mnuchin and National Economic Council Director Gary Cohn, Trump’s latest tax team, beamed proudly as they presented their baby. The&nbsp;stock&nbsp;market took a deep breath, then&nbsp;<span id="more-69852">&nbsp;</span>looked at their brainchild and completely petered out.</p> <p style="margin: 5px 5px 10px;">First, let me say, I&nbsp;clearly have&nbsp;<em>nothing</em>&nbsp;to recant from&nbsp;<a href="http://thegreatrecession.info/blog/trump-tax-plan-overtaxing-trump/" style="text-decoration: underline; color: #c43a18;">my earlier predictions</a>&nbsp;about Trump’s tax plan. The plan that came out looks almost exactly as I thought it would — the only difference being that it is far more pathetic.</p> <p style="margin: 5px 5px 10px;">Some news organizations, getting a little ahead of themselves, talked about the US stock market taking off because of the Trump tax plan when the market first got wind that the plan had been released and heard some of the key points:</p> <p style="margin: 5px 5px 10px;">&nbsp;</p> <blockquote style="margin: 15px 0px; padding-left: 40px;"><p style="margin: 5px 5px 10px; display: inline;">Once again, investors appear to be placing the bet that Good Donald Trump will be great for the market and that Bad Trump won’t be all that horrible.&nbsp;That was on display on Tuesday.&nbsp;<em><strong>The Dow Jones Industrial Average soared more than 230 points after it was reported that the White House’s tax plan, whose broad outlines will be announced on Wednesday, will propose cutting corporate tax rates to 15 percent, a Trump campaign pledge that many thought the president was backing away from</strong></em>. (<a href="http://www.newsmax.com/Finance/StreetTalk/Stock-Investors-Embrace-Good/2017/04/26/id/786546/" style="text-decoration: underline; color: #c43a18;"><em>Newsmax</em></a>)</p> </blockquote> <p style="margin: 5px 5px 10px;">&nbsp;</p> <p style="margin: 5px 5px 10px;">Ah, but that was this afternoon, and now it is the evening&nbsp;after&nbsp;the market plunged&nbsp;as steeply&nbsp;as it soared&nbsp;(and twice as far) to finish the day with the Dow slightly down from its pre-tax open — a sign of a mercurial market that was, for an instant pleased, until it started to feel a little indigestion from consuming its dinner too quickly. At that point, it barfed up all its gains for the day and went to bed sour.</p> <p style="margin: 5px 5px 10px;">What the White House billed in its release as “the biggest tax cut in history” rapidly turned into digestive gas. As I speculated earlier in the day, no real plan was released. Just gas. Once again the Trumpet blew his horn loudly (probably from his back side) as he released the big plan, and then his team turned out a summary statement, devoid of any details or calculations.</p> <p style="margin: 5px 5px 10px;">&nbsp;</p> <h3 style="font-size: 1.4em; line-height: 1.6em; margin-top: 5px; margin-bottom: 3px;">Here is my own summary of the Greatly Trumped-up Tax Plan:</h3> <p style="margin: 5px 5px 10px;">&nbsp;</p> <ul style="margin-top: 0px; margin-bottom: 0px; margin-left: 0px; padding-left: 35px;"> <li>The plan will&nbsp;<strong>eliminate estate taxes</strong>, which only the wealthiest Americans now play, helping Trump and family considerably in the future, but most of you not one iota. (This is a cut 100% for the rich, but it makes things equitable.)</li> <li>The White House&nbsp;compensates for this by saying&nbsp;some&nbsp;<strong>other tax breaks</strong>&nbsp;that help the rich&nbsp;will&nbsp;be&nbsp;<strong>eliminated</strong>&nbsp;so that&nbsp;the plan would largely help the middle class; only, as usual, it doesn’t specify what those “other” current tax breaks are that will be eliminated. (So, read that as, “Just trust us on this one.”)</li> <li>The new, new New Trump Tax Plan contains&nbsp;<strong>no math</strong>&nbsp;to show how much of a deficit the new plan will create, but co-creator Cohn offers assurances that the tax cuts “will pay for themselves” through economic growth and that the president knows we have to “be good stewards.” (“Just trust us on that one.”)</li> <li>The plan comes with&nbsp;<strong>Cohn’s personal assurance</strong>&nbsp;that the president “will get this done for the American people.” (I feel better knowing that assurance is still being offered as it was in past months. I do note, though, that&nbsp;missing their stated and revised schedules during those months now leaves them simply&nbsp;assuring us it will still get down, but without anymore undoable deadlines.)</li> <li><strong>Corporate taxes</strong>&nbsp;will fall from 36.9% to 15%. (That will include closely held businesses&nbsp;and limited partnerships, like legal firms, construction companies in the oil industry, and … real-estate companies, where business&nbsp;income largely passes through to the owners (sometimes the family) so the business does not pay the tax but the owner does when the money passes through. (In other words, the bulk of Trump’s income tax — and his children’s — will drop from 35% to 15%,&nbsp;<em>except</em>&nbsp;that the plan comes with a footnote that this will be done&nbsp;<em>in such a way</em>&nbsp;as to insure that wealthy Americans do not exploit the change. So, we’re good!)</li> <li>The plan reduces the number of<strong>&nbsp;tax brackets</strong>&nbsp;to three simple levels (10, 25, and 35 percent), and states the tax rate of each bracket. (Unfortunately, it&nbsp;omits stating what income levels will apply to each bracket.)</li> <li>The plan comes with a note that&nbsp;<strong>details will be hashed out</strong>&nbsp;with the House of Representatives and the Senate in coming weeks. (Maybe months? Like the Obamacare repeal details got hashed out … of existence?)</li> <li>“We know this is&nbsp;<strong>difficult</strong>,” Cohn said. “We know what we’re asking for is a big bite.” (That’s a plus because with Obamacare, “who could have thought it would be this difficult?” At least, now they’ve learned it is difficult. They have learned something on the job, so we can feel good about having a smarter team.)</li> <li>It does help some of the middle-class by doubling the&nbsp;<strong>standard deduction</strong>&nbsp;for married couples, and it maintains the allowance for&nbsp;<strong>charitable deductions,</strong>&nbsp;and it says it will allow tax relief for&nbsp;<strong>childcare expenses</strong>&nbsp;(though, again, without any details).</li> <li>The plan promises to alienate anyone who lives in a state with high&nbsp;<strong>state income tax</strong>by making state income tax no longer deductible. (No help if you’re not in such a state, and a bite in the butt if you are; but the plan softens this news by noting that this effects higher income people the most — well, yeah, the ones&nbsp;<em>unlike</em>&nbsp;Romney and Trump who have been known to&nbsp;pay no&nbsp;state&nbsp;income tax.)</li> <li>The plan&nbsp;<strong>simplifies tax code</strong>&nbsp;(albeit it doesn’t tell us&nbsp;<em>how</em>, just that it&nbsp;<em>WILL</em>). This will presumably happens when congress actually sits down to create the plan with laws under Trump’s instruction that the laws be more simple. (Trust us on that one, even though everything we’ve simplified so far has been ruled unconstitutional in a court of law or died in debate.)</li> <li><strong>Repatriated corporate profits</strong>&nbsp;will get a one-time major tax reduction, but all profits made overseas after that will be completely tax free for years to come! (That’s a glory-hallelujah! Well, except for the detail that the tax rate for repatriation is omitted. But, hey, at least they’re thinking about it! And they’re gonna do something! Those cuts will be the “biggest in history!” We just don’t get to know how big until they figure that out. Details.)</li> <li>One thing that is NOT mentioned in the Trumped-up&nbsp;Tax Plan is&nbsp;<strong>capital gains tax</strong>. If the lack of mention means there will no longer be a special capital-gains tax rate, the elimination of that gift, which goes largely to rich stock and real-estate speculators who can pay to play in that realm, is something I will like. (But the plan doesn’t say one way or another, and you can be sure Republicans will insist on putting that objectionable trickle-down part in as details are “hashed out.”)</li> </ul> <p style="margin: 5px 5px 10px;">&nbsp;</p> <h3 style="font-size: 1.4em; line-height: 1.6em; margin-top: 5px; margin-bottom: 3px;">Fine print: “details to be determined.”</h3> <p style="margin: 5px 5px 10px;">&nbsp;</p> <p style="margin: 5px 5px 10px;">Wouldn’t you know it? The one part where the devil always rests is still cloaked&nbsp;under a sheet&nbsp;to be revealed at some vague later date.</p> <p style="margin: 5px 5px 10px;">Written on all of&nbsp;<em>one side of one page,</em>&nbsp;the newly Trumped-up&nbsp;Tax Plan&nbsp;looks like a scheme&nbsp;worked out by a couple of guys in a paneled club room, smoking cigars over whisky on the rocks and deciding what sounds “great.” That’s clearly why the US stock market plunged once the cigar smoke cleared so investors could actually&nbsp;<em>see</em>&nbsp;the Trumped-up&nbsp;Tax Plan … and the napkin it was written on. How pathetic is that&nbsp;plan when it gives the “biggest tax cuts in history” all aimed at pumping up the stock market, and all its coming-out&nbsp;accomplishes&nbsp;is to cause the stock market to slump in disappointment? Talk about an anti-climax.</p> <p style="margin: 5px 5px 10px;">I think Trump announced, “We’re going to present our tax plan on Wednesday,” and his two tax boys said, “Yikes, we better get the plan laid out. Let’s meet tonight after work for drinks and draw something up, and then we’ll give it one of our secretaries to make it look nice.”</p> <p style="margin: 5px 5px 10px;">Where we&nbsp;got Trumped on this plan was in thinking a&nbsp;<strong><em>plan</em></strong>&nbsp;might actually be coming out today!</p> <p style="margin: 5px 5px 10px;">Hah! Silly us! It’s more of a promissory&nbsp;<em>note</em>, really. I’ve seen footnotes larger than this plan. What we got today was, again, nothing more than just talk! Talk about what Team Trump&nbsp;WILL do … whenever it is that it finally does it. They’ve managed to finish a one-page outline. I think the market rose when it heard general statements about the plan, then plunged all the way to closing when it saw that it was written&nbsp;with lots of white space and NO detail&nbsp;on one page. What the market first thought were summary statements introducing the plan, actually&nbsp;<em>are</em>&nbsp;the plan.&nbsp;Great&nbsp;work for your first hundred days, Boys!</p> <p style="margin: 5px 5px 10px;">Read my last article, “<a href="http://thegreatrecession.info/blog/trump-tax-plan-overtaxing-trump/" style="text-decoration: underline; color: #c43a18;">You Got Trumped! Trump tax plan taxing for the maestro of negotiation</a>?” and you’ll see I sure called this&nbsp;one.&nbsp;If there is anything that has gotten to be predictable about Trump, it’s that he’s all talk all the time. He’s appropriately named after&nbsp;his loud&nbsp;and brassy mouth. Now, if he can just get his band of merry boys to orchestrate&nbsp;a tune. Trump promised the plan would be beautiful, and it is that; it’s written on a lovely piece of paper — very high quality like the menu&nbsp;at Mar-A-Lago — in an attractive font. It’s a thing of beauty. You should see it. Really, you should see it. I think it even has a picture of chocolate cake on it!</p> <p style="margin: 5px 5px 10px;">&nbsp;</p> <h3 style="font-size: 1.4em; line-height: 1.6em; margin-top: 5px; margin-bottom: 3px;">Here is the actual plan if you want to read something truly pathetic after&nbsp;months of waiting:</h3> <p style="margin: 5px 5px 10px;">&nbsp;</p> <p style="margin: 5px 5px 10px;">It’s so full of vague platitudes or catch phrases that it’s practically a tax cliché.</p> <p style="margin: 5px 5px 10px;">&nbsp;</p> <p style="margin: 5px 5px 10px; padding-left: 30px;"><strong>Goals for Tax Reform</strong></p> <p style="margin: 5px 5px 10px; padding-left: 30px;">? Grow the economy and create millions of jobs</p> <p style="margin: 5px 5px 10px; padding-left: 30px;">? Simplify our burdensome tax code</p> <p style="margin: 5px 5px 10px; padding-left: 30px;">? Provide tax relief to American families—especially middle-income families</p> <p style="margin: 5px 5px 10px; padding-left: 30px;">? Lower the business tax rate from one of the highest in the world to one of the lowest</p> <p style="margin: 5px 5px 10px; padding-left: 30px;"><strong>Individual Reform</strong></p> <p style="margin: 5px 5px 10px; padding-left: 30px;">? Tax relief for American families, especially middle-income families:</p> <p style="margin: 5px 5px 10px; padding-left: 30px;">• Reducing the 7 tax brackets to 3 tax brackets of 10%, 25% and 35%</p> <p style="margin: 5px 5px 10px; padding-left: 30px;">• Doubling the standard deduction</p> <p style="margin: 5px 5px 10px; padding-left: 30px;">• Providing tax relief for families with child and dependent care expenses</p> <p style="margin: 5px 5px 10px; padding-left: 30px;">? Simplification:</p> <p style="margin: 5px 5px 10px; padding-left: 30px;">• Eliminate targeted tax breaks that mainly benefit the wealthiest taxpayers</p> <p style="margin: 5px 5px 10px; padding-left: 30px;">• Protect the home ownership and charitable gift tax deductions</p> <p style="margin: 5px 5px 10px; padding-left: 30px;">• Repeal the Alternative Minimum Tax</p> <p style="margin: 5px 5px 10px; padding-left: 30px;">• Repeal the death tax</p> <p style="margin: 5px 5px 10px; padding-left: 30px;">? Repeal the 3.8% Obamacare tax that hits small businesses and investment income</p> <p style="margin: 5px 5px 10px; padding-left: 30px;"><strong>Business Reform</strong></p> <p style="margin: 5px 5px 10px; padding-left: 30px;">? 15% business tax rate</p> <p style="margin: 5px 5px 10px; padding-left: 30px;">? Territorial tax system to level the playing field for American companies</p> <p style="margin: 5px 5px 10px; padding-left: 30px;">? One-time tax on trillions of dollars held overseas</p> <p style="margin: 5px 5px 10px; padding-left: 30px;">? Eliminate tax breaks for special interests</p> <p style="margin: 5px 5px 10px; padding-left: 30px;"><strong>Process</strong></p> <p style="margin: 5px 5px 10px; padding-left: 30px;">Throughout the month of May, the Trump Administration will hold listening sessions with stakeholders to receive their input and will continue working with the House and Senate&nbsp;<strong><em>to develop the details of a plan that provides massive tax relief, creates jobs, and makes America more competitive—and can pass both chambers.</em></strong>”</p> <p style="margin: 5px 5px 10px;">&nbsp;</p> <p style="margin: 5px 5px 10px;">&nbsp;</p> <div id="attachment_50912" class="wp-caption alignright" style="float: right; margin-right: 6px; margin-bottom: 15px; margin-left: 6px; border-top-left-radius: 3px; border-top-right-radius: 3px; border-bottom-right-radius: 3px; border-bottom-left-radius: 3px; background-color: #f7f7f7; border: 1px solid #444444; padding: 3px; text-align: center; max-width: 95%; height: auto; position: relative; width: 273px;"><a href="http://thegreatrecession.info/blog/trump-economic-stimulus-plan/donald_trump_thumbs_up_2016/" style="color: #c43a18;" rel="attachment wp-att-50912"><img src="http://thegreatrecession.info/blog/wp-content/uploads/Donald_Trump_Thumbs_up_2016-263x300.jpg" alt="If you voted for Donald Trump, you got trumped" width="263" height="300" style="border-top-left-radius: 3px; border-top-right-radius: 3px; border-bottom-right-radius: 3px; border-bottom-left-radius: 3px; padding: 4px; max-width: 97%; height: auto; border-style: none !important; box-shadow: none !important; opacity: 1 !important;" class="size-medium wp-image-50912" /></a><br /> <p class="wp-caption-text" style="margin: 5px 5px 10px; line-height: 1.1em;">Trumped you!</p> </div> <p style="margin: 5px 5px 10px;">&nbsp;</p> <p style="margin: 5px 5px 10px;"><em><strong>In other words, it is a plan to start creating a plan!</strong></em></p> <p style="margin: 5px 5px 10px;">And you thought I was just joking about how vague and utterly deplete of details this so-called plan is! After six months of poring&nbsp;over the details and laboring late into the nights, this fourth rendition of Trump’s plan is not that different from what he presented during the campaign, and it’s equal in depth of thought and detail to the kind of outline you come up with after a day of brainstorming and sorting out the the most-liked ideas.</p> <p style="margin: 5px 5px 10px;">Now that Team Trump has done all the heavy lifting, it falls to congress to turn this masterplan into months of argument and volumes of law.</p> <p style="margin: 5px 5px 10px;">I knew it was going to be pathetic; I didn’t know it was going to be&nbsp;<em>deplorable</em>.</p> </div> http://www.zerohedge.com/news/2017-04-26/tiny-trump-hands-deliver-teeny-tiny-tax-plan-us-stocks-collapse-despair#comments Alt-right American people of German descent Business Capital gains tax Climate change skepticism and denial Donald Trump Donald Trump Dow 30 Dow Jones Industrial Average Economy Estate tax in the United States Government House of Representatives Income tax in the United States National Economic Council Obamacare Recession Senate Tax The Apprentice White House White House WWE Hall of Fame Thu, 27 Apr 2017 03:32:26 +0000 Knave Dave 594464 at http://www.zerohedge.com Paul Craig Roberts Warns "Trump Now A Captive Of The Deep State" http://www.zerohedge.com/news/2017-04-26/paul-craig-roberts-warns-trump-now-captive-deep-state <p><em><a href="http://www.paulcraigroberts.org/2017/04/26/trump-now-captive-deep-state/">Authored by Paul Craig Roberts,</a></em></p> <p>When the <strong>gullible and insouciant American public and the presstitutes who participate in the deceptions permitted the Deep State </strong>to get away with the fairy tale that a few Saudi Arabians under the direction of Osama bin Laden, but without the support of any government or intelligence agency, were able to outwit the entirety of the Western Alliance and Israel&rsquo;s Mossad and deliver the greatest humiliation in history to &ldquo;the world&rsquo;s only superpower&rdquo; by making the entirety of the US government dysfunctional on September 11, 2001, Washington learned that it could get away with anything, any illegal and treasonous act, any lie. The gullible Western populations would believe anything that they were told.</p> <p>Not only insouciant Americans, but <strong>much of the world accepts any statement out of Washington as the truth despite the evidence.</strong> If Washington said it, Washington&rsquo;s vassals in Germany, France, UK, Canada, Australia, New Zealand, Netherlands, Belgium, and Japan assent to the obvious lie as if it were the obvious truth. So do the CIA purchased media of these vassal states, a collection of whores who prefer CIA subsidies to truth.</p> <p>When <strong>Obama inherited the Deep State&rsquo;s agenda from George W. Bush, he set up Syria&rsquo;s Assad for regime change</strong> by repeating for many months that if Assad used chemical weapons in the &ldquo;civil war&rdquo; that Washington had sent ISIS to conduct, Assad would have crossed the<strong><em> &ldquo;Red Line&rdquo;</em></strong> that Obama had drawn and would, as the consequence, face an invasion by the US military, just as Iraq had been invaded based on Washington&rsquo;s lie about &ldquo;weapons of mass destruction.&rdquo;</p> <p><strong>Having burnt this idea into the feeble minds of the Western populations, Obama then arranged for a chemical weapon to be exploded in Syria and blamed it on Assad. </strong>Thus, the Red Line had been crossed, the insouciant West was told, and America would now invade.</p> <p>The UK prime minister, the usual piece of Washington-owned garbage, rushed to the support of the American invasion, promising British support. But the British Parliament voted NO. The MPs said that the UK was not going to support another American war crime justified by obvious lies. Only in Britain does democracy still have any teeth, as we saw a second time with the Brexit vote. All the rest of the West lives in vassalage and slavery.</p> <p><strong>The Russian government also took a firm stand, admitting that Russia stupidly trusted America in Libya, but no more. </strong>We, said the Russians, will ourselves remove any and all chemical weapons from Syria and turn them over to Western &ldquo;civilization&rdquo; to be destroyed, which the Russians did.</p> <p><em><strong>What did Western &ldquo;civilization&rdquo; do with the weapons? They gave some of them to ISIS</strong></em>. This gave Washington a second chance to accuse Assad of using chemical weapons &ldquo;against his own people.&rdquo;</p> <p>And so Washington has rolled out this hoax a second time. During a Syrian air force attack on an ISIS position, a chemical weapon exploded, or so it is alleged. Instantly Washington said that Assad had used &ldquo;Sarin gas against his own people.&rdquo; Trump was shown photos of dead babies and stupidly ordered a US military strike against Syria.</p> <p><strong><em>This was the first time that Washington had engaged in an unambigious war crime without any cover. </em> </strong>Trump had no UN resolution, not even one that could be stood on its head as in Libya. Trump had no NATO participation, no George W. Bush &ldquo;coalition of the willing&rdquo; to give cover to the war crime with the support of other governments.</p> <p>There are no skirts for Trump to hide behind. He stupidly let himself be pushed into commiting an unambigious war crime.</p> <p><strong>Now all his opponents&mdash;the Deep State, the military/security complex, the CIA, the Hillary Democrats, the warmonger Republicans&mdash;have the New White House Fool under their control. If Trump doesn&rsquo;t do as they want, they will impeach him for his war crime.</strong></p> <p>Meanwhile the risk of war with the Russian/Chinese/Iranian/Syrian alliance grows closer. The US shows every intention of provoking this war. Washington has imposed sanctions on 271 employees of Syria&rsquo;s Scientific Studies and Research Center for, in Washington&rsquo;s lying words, responsibility &ldquo;for developing and producing non-conventional weapons and the means to deliver them.&rdquo;</p> <p><u><strong>In order to make this false charge stick, Washington prevented any investigation whatsoever into the facts of the alleged chemical weapon associated by Western propaganda, not by any known fact, with a Syrian air attack on ISIS.</strong></u> If Washington is so certain that Syria is responsible, why does Washington block an investigation? If Washington is right, an investigation would prove Washington&rsquo;s case. But as Washington is again lying through its teeth, an investigation would prove the contrary. And that is what Washington fears and is the reason Washington blocked an investigation.</p> <p>Why do Western peoples believe the US government, a well proven liar, who blocks an investigation and asserts that everyone must believe Washington or else be put on a list of Russian agents?</p> <p><strong>Here is the lie, the raw propaganda, that the US government has no qualms about issuing</strong>: <a href="https://www.treasury.gov/press-center/press-releases/Pages/sm0056.aspx" target="_blank">https://www.treasury.gov/press-center/press-releases/Pages/sm0056.aspx </a> It comes from the US Department of the Treasury in which I once served honorably. But honor no longer exists in the US Treasury.</p> <p><em><strong>Are Western populations intelligent enough to understand that the only reason for Washington to block an investigation of the alleged use by Syria of a chemical weapon is that the facts clearly do not support Washington&rsquo;s lie? No, they are not.</strong></em></p> <p>Theodore Postol, a scientist at MIT, has concluded from his investigation that the chemical weapon was not dropped from the air but was set off on the ground and that it was not Sarin gas as Sarin lingers and the alleged aid workers who were immediately on the scene were unprotected by gloves or masks or by anything. If the gas were Sarin, they would be dead also.</p> <p>The Russian explanation is that the Syrian air force attack hit a storage facility, conveniently arranged by Washington, that contained chemical weapons. I have seen reports that Washington, or Washington&rsquo;s vassals such as Saudi Arabia, have provided ISIS with chemical weapons. President Putin of Russia says the reason Washington has delivered chemical weapons to ISIS is that there can be more orchestrated instances of their use that can be blamed on Assad.</p> <p>I think I can say in complete confidence that this is what is happening: <strong><em>Washington intends to wear Russia down with orchestrated chemical attack after chemical attack, portraying Russia as an inhuman defender of Assad&rsquo;s alleged chemical attacks, in order to more thoroughly isolate Russia and in order to provoke opposition to Putin&rsquo;s government, especially among the US and German financed NGOs that Russia stupidly permits to operate in Russia and in the Russian media. Washington&rsquo;s goal is to force by the weight of world opinion Putin to abandon Assad to Washington.</em></strong></p> <p>US Secretary of State Tillerson, another gigantic disappointment to those who hoped for peaceful relations between the US and Russia/China/Iran/Syria, has said that the US still intends regime change in Syria. Tillerson has advised Russia to get out of Washington&rsquo;s way and to &ldquo;consider carefully their support for Bashar al-Assad.&rdquo;</p> <p><strong>Russia cannot abandon Assad, because if Syria falls to Washington, Iran will be next, and then the Washington-financed jihadists will be set upon the Muslim populations of the Russian Federation and China.</strong></p> <p>This is Washington&rsquo;s game plan. I am certain Putin is aware of it, and I think the Chinese are, despite their inordinate focus on making money.</p> <p><strong>The questions before us could not be any clearer:</strong> Will Russia and China break and give in to Washington? If not, will Washington become a good world citizen for the first time in America&rsquo;s history, or will Washington issue more threats, thereby convincing Russia and China that their alternative is to wait for Washington&rsquo;s preemptive nuclear strike or deliver one themselves?</p> <p>This is the only question that the world faces that is worth our attention. <strong>I spent a quarter century in Washington.</strong> The evil that is in control there at the present time is unprecedented. I have never seen anything like it.</p> <p><em><strong>Can the world survive the evil that is concentrated in Washington, evil that has the support of the governments of the Western world?</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="272" height="148" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20170426_PCR.jpg?1493251637" /> </div> </div> </div> http://www.zerohedge.com/news/2017-04-26/paul-craig-roberts-warns-trump-now-captive-deep-state#comments Assad family Australia Bashar al-Assad Belgium British parliament Central Intelligence Agency Chemical warfare China Department of the Treasury France Germany International relations Iran Iraq Israel Japan Khan Shaykhun chemical attack MIT Mossad Netherlands New Zealand North Atlantic Treaty Organization Politics Politics of Syria Putin’s government Rex Tillerson Russian government Saudi Arabia Syria Syrian Air Force Syrian Civil War Syria’s Scientific Studies and Research Center Turkish involvement in the Syrian Civil War U.S. Department of the Treasury U.S. Treasury United Nations US government US military War Western Alliance White House White House Thu, 27 Apr 2017 02:40:00 +0000 Tyler Durden 594445 at http://www.zerohedge.com Massive Explosion Reported Near Damascus International Airport In Syria http://www.zerohedge.com/news/2017-04-26/massive-explosion-reported-near-damascus-international-airport-syria <p>In what is believed, but has not been confirmed, to be an Israeli air strike, moments ago the area around the Damascus International Airport in Syria was rocked by at least one massive explosion. </p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">Explosion around <a href="https://twitter.com/hashtag/Damascus?src=hash">#Damascus</a> airport now <a href="https://t.co/ZNsZs0BY3L">pic.twitter.com/ZNsZs0BY3L</a></p> <p>— Armies And Weapons (@ArmiesWeapons) <a href="https://twitter.com/ArmiesWeapons/status/857403793549344774">April 27, 2017</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><blockquote class="twitter-tweet"> <p dir="ltr" lang="en">Video showing the explosion in <a href="https://twitter.com/hashtag/syria?src=hash">#syria</a> <a href="https://twitter.com/hashtag/Damscus?src=hash">#Damscus</a> international airport <a href="https://t.co/Y4R22MyT3Q">pic.twitter.com/Y4R22MyT3Q</a></p> <p>— Armies And Weapons (@ArmiesWeapons) <a href="https://twitter.com/ArmiesWeapons/status/857419236171558912">April 27, 2017</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><blockquote class="twitter-tweet"> <p dir="ltr" lang="en"><a href="https://twitter.com/hashtag/BREAKING?src=hash">#BREAKING</a>: Huge explosion reported near Damascus International Airport in Syria <a href="https://t.co/FrND1p1WFd">pic.twitter.com/FrND1p1WFd</a></p> <p>— People's Daily,China (@PDChina) <a href="https://twitter.com/PDChina/status/857416010445410304">April 27, 2017</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><blockquote class="twitter-tweet"> <p dir="ltr" lang="en"><a href="https://twitter.com/hashtag/Syria?src=hash">#Syria</a> <a href="https://twitter.com/hashtag/Damascus?src=hash">#Damascus</a> Bunch of <a href="https://twitter.com/hashtag/Syrian?src=hash">#Syrian</a> Activist Saying a Huge Explosion from the countryside Shaked <a href="https://twitter.com/hashtag/Damascus?src=hash">#Damascus</a>. &amp; No Info on what it was yet</p> <p>— Ivan Sidorenko (@IvanSidorenko1) <a href="https://twitter.com/IvanSidorenko1/status/857394732141600768">April 27, 2017</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><blockquote class="twitter-tweet"> <p dir="ltr" lang="en"><a href="https://twitter.com/hashtag/Syria?src=hash">#Syria</a> <a href="https://twitter.com/hashtag/Damascus?src=hash">#Damascus</a> A <a href="https://twitter.com/hashtag/Syrian?src=hash">#Syrian</a> Reporter is now Saying the Sound of HUGE EXPLOSION came from Vicinity of Damascus International Airport. <a href="https://t.co/K9iLZcmful">pic.twitter.com/K9iLZcmful</a></p> <p>— Ivan Sidorenko (@IvanSidorenko1) <a href="https://twitter.com/IvanSidorenko1/status/857398363737780224">April 27, 2017</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><p>If confirmed, it would be the second Israeli attack on Syria in the past week: on Sunday, Israeli forces bombed a camp for pro-government forces killed three fighters near the Golan Heights on Sunday <a href="http://www.sbs.com.au/news/article/2017/04/23/israeli-attack-syrian-military-camp-kills-three">according to AFP</a>. Two fighters were also wounded in the attack on the Al-Fawwar camp near Quneitra in southwestern Syria, adding that it was unclear whether the damage was inflicted by an air strike or shelling. </p> <p>Israel's army declined to comment Sunday on the attack. On Friday the army said it targeted positions inside Syria in retaliation for mortar fire that hit the northern part of the Golan Heights. </p> <p>Syria's official news agency SANA said Israel had struck a Syrian army position in the province of Quneitra on the Golan plateau, "causing damage". The Syrian government labels rebel groups and jihadists fighting the regime as "terrorists" and accuses Israel of backing them.</p> <p>One thing is certain: the party behind today's attack on Syria was not the US - otherwise CNN would be blasting it in real time - although with Russia <a href="http://www.zerohedge.com/news/2017-04-26/russia-has-withdrawn-half-its-fighter-jet-group-syria">having withdrawn half of its warplanes </a>and with the Syrian army eager to avoid further airborne confronations, it is easy to imagine why the IDF can now enter the sovereign territory unopposed and without fear of reprisals. </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="1200" height="664" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/damascus%20explosion.jpg?1493259909" /> </div> </div> </div> http://www.zerohedge.com/news/2017-04-26/massive-explosion-reported-near-damascus-international-airport-syria#comments #Syrian army Asia China Eastern Mediterranean Geography of Asia Golan Heights Golan Heights IDF Israel Israel's army Israel–Syria border Levant Politics Quneitra Quneitra Governorate clashes southwestern Syria Syria Syrian army Syrian Civil War Syrian government Twitter Twitter Thu, 27 Apr 2017 02:29:23 +0000 Tyler Durden 594458 at http://www.zerohedge.com Visualizing Exter's Liquidity Pyramid (In Physical $100 Bills) http://www.zerohedge.com/news/2017-04-26/visualizing-exters-liquidity-pyramid-physical-100-bills <p><span style="text-decoration: underline;"><strong>All the money and all the assets in the world, shown in physical cash form, in one graphic.</strong></span></p> <p><em>(click image for huge legible version)</em></p> <p><span style="text-decoration: underline;"><strong><a href="http://demonocracy.info/infographics/world/lqp/liquidity_pyramid.html"><img height="3000" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/04/21/20170426_exter.jpg" width="363" /></a></strong></span></p> <p><em><a href="http://demonocracy.info/infographics/world/lqp/liquidity_pyramid.html">Source: Demonocracy</a></em></p> <p><strong>The Liquidity Pyramid was created for visualizing the organization of asset classes in terms of risk and size. </strong><a href="http://demonocracy.info/infographics/world/lqp/liquidity_pyramid.html">As Demonocracy explains,</a> the Liquidity Pyramid was created during the time in United States, when each dollar was backed by Gold. Gold forms the small base of most reliable value, and asset classes on progressively higher levels are more risky. The larger size of asset classes at higher levels is representative of the higher total worldwide notional value of those assets. <strong>While Exter&#39;s original pyramid placed Third World debt at the top, today derivatives hold this dubious honor. </strong></p> <p><strong>As financial risk increases, money tends to move from the more risky assets (Derivatives), to the least risky assets (to physical cash and then gold). </strong>Nothing is without risk, but risk is relative.&nbsp; The issue is that there is very little physical cash and even less Gold compared to the more risky assets, this makes for a crowded trade in times of high risk when everyone wants to jump into cash and gold, pushing up the price.</p> <p>The little yellow rectangle on the left front is <strong>all the gold in the world in physical form.</strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/04/21/20170426_exter1.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/04/21/20170426_exter1_0.jpg" style="width: 600px; height: 445px;" /></a></p> <p><em><a href="http://demonocracy.info/infographics/world/lqp/liquidity_pyramid.html">Source: Demonocracy</a></em></p> <p>All the gold in the world is NOT all in &quot;financial investment grade&quot; form. World Trade Center, Empire State &amp; bunch of too-big-to-fail Bank HQ buildings are in the background to help illustrate the size. <strong>You are eye-level to the WTC top floors.</strong> The $1 Quadrillion Derivatives cash wall fades into the distance, because $1 Quadrillion is an estimation by the best analysts and truth is no one really knows the true size of the Derivatives Market.</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="954" height="661" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20170426_exter2.jpg?1493251249" /> </div> </div> </div> http://www.zerohedge.com/news/2017-04-26/visualizing-exters-liquidity-pyramid-physical-100-bills#comments Bank Banking Business Derivative Economy Finance Financial risk Investment Grade Market liquidity Money notional value Systemic risk Wagering World Trade Thu, 27 Apr 2017 01:50:00 +0000 Tyler Durden 594443 at http://www.zerohedge.com Prepare To Be Put To Sleep By Draghi: Full ECB Preview http://www.zerohedge.com/news/2017-04-26/prepare-be-put-sleep-draghi-full-ecb-preview <p>With the ECB set to announce its latest monetary policy decision in less than 12 hours, one can summarize in one word what the market expects: nothing. Sure, there are some nuances - the central bank may wax philosophical about Europe's better growth prospects, and maybe even set the stage for a small signal as early as June about an eventual reduction of stimulus, but don't count on it. After all, there is a reason - or rather two - why markets are where they are today, and it has to do with <a href="http://www.zerohedge.com/news/2017-04-21/why-nothing-matters-central-banks-have-bought-record-1-trillion-assets-2017">central banks creating a record $1 trillion in new money out of thin air</a>. The ECB has been responsible for half and Mario Draghi knows it.</p> <p>Which is why the former Goldmanite will to point to still-weak inflation, muted wage growth and an uncertain outlook to argue that easing off the accelerator now could unravel years of work that have consumed much of the ECB's firepower, a <a href="http://uk.reuters.com/article/uk-ecb-policy-idUKKBN17S324">Reuters poll </a>showed. That won't stop him however from acknowledging the euro zone's "solid growth momentum", surging consumer and business confidence, and receding political risk after the first round of France's presidential vote put a pro-euro centrist in pole position. After all, Jean-Claude Trichet dud just that in 2011 when he, too, mistook a burst of exported Chinese inflation for "recovery." We all know what happened after: first he hiked by 25 bps, and a few months later the Fed had to bail out Europe with unlimited swap lines.</p> <p>In any case, for those who need a more erudite assessment of why Draghi will say nothing at all of consequences tomorrow, here is BofA's Gilles Moec who says that "we do not expect hard decisions or communication changes from the ECB this week" howver "policy debate may get fierce from June." What happens then: "we expect very slow QE tapering in 2018 and no policy rate hike before well into next<br />year, if at all." As for the market, rates traders will focus on any mention of bond scarcity and exit sequencing.</p> <p><em>From Moec's full note "No Need to Rush":</em></p> <p><strong>No need to rock the boat yet</strong></p> <p>Given the recent focus on political developments, we think it is easy to forget the ECB's Governing Council is due to meet on Thursday. <strong>Our sentiment is that there is a consensus at the Governing Council to leave the current stance and communication largely unchanged for now, even if we think this consensus does not extend on which decisions to make, when the time comes</strong>. This means that while we do not expect any hard decision or any significant communication surprise this week, <strong>we also believe the policy conversation could be quite fierce from June</strong>.</p> <p>We continue to think that in the face of a still subdued inflation outlook, prudence will prevail and the ECB will opt for small changes to forward guidance in June, slow tapering in 2018 and no policy rate hike before well into next year. Still, the hawks – and some centrists – <strong>at the ECB appear to be tired of extraordinary measures, meaning the market could price a more aggressive stance in the second half of this year.</strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/04/19/moec%20chart.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/04/19/moec%20chart_0.jpg" width="500" height="346" /></a></p> <p><strong>Peace in our (short) time</strong></p> <p>In our opinion, <strong>most Governing Council members in March were not expecting their tiny move on forward guidance to trigger such an impressive market reaction</strong>. After engaging in concerted damage mitigation in the two weeks before the Easter break, we think they will be looking for some peace and quiet at the April meeting. We note in particular that even some hawkish hardliners, such as Governing Council Hansson, have recently stated that the ECB is "looking at the data," <strong>which suggests that even this block of the Council is not after an immediate policy discussion</strong>. At the same time, Board member Coeure was keen to say the ECB was "very, very serious about forward guidance," which did not sound like having another go at this essential part of their communication was on their wish list.</p> <p>We think there are several reasons behind this truce. </p> <ul> <li>First, <strong>the data provides fodder for hawks</strong>, who will focus on strong surveys pointing to swift output gap reduction, <strong>and doves</strong>, who continue to worry about weak core inflation and hard data, which do not fully live up to the surveys' promise. </li> <li>Second, <strong>the March episode, with the market hastily pricing depo rate hikes, will remind Council members that moving market expectations is more art than science, </strong>with significant risks of overreaction. </li> <li><strong>Third, the political context–the ECB meets between the two rounds of the French presidential elections– goes against making big moves.</strong></li> </ul> <p><strong>Fire beneath the ice</strong></p> <p>Still, the debate is going on underground. We think Benoit Coeure – who in his role of "market man" at the board is probably quite sensitive to the need to provide investors with sufficient visibility – is trying to gently move the communication toward a very slow "Exit strategy". This week he stated that the balance of risks to growth is now neutral: the council statement kept it "tilted to the downside" last month. He has been very candid on the direction of travel for the ECB since December, e.g., in his speech at the end of last year about the need for governments to prepare for higher interest rates, so he is probably keen to prepare the market for a gradual removal of QE.</p> <p>Peter Praet–the chief economist, i.e., more focused on macro developments–for his part continues to insist on the weakness in inflation and last week stuck to the negative balance of risks.</p> <p>More profoundly–those are limited divergences we think–hawks are probably still ready to argue for a swift decommissioning of the ECB's unconventional arsenal as soon as the political situation allows it.</p> <p><strong>Baseline and risks </strong></p> <p>In our baseline, the statement does not change this week. In June, the assessment of the balance of risks would move to neutral, while the most dovish part of the forward guidance–the notion that rates could fall further–would be removed (a cheap bone to throw to the hawks, in our opinion).</p> <p>Then in September the Council would start preparing the market to slow tapering in 2018 (eg, going first at EUR40bn for six months before gradually moving to zero by the end of 2018) while the forward guidance on rates would be more thoroughly changed; dropping the notion that there would be a long delay before the end of QE and the first hikes, while opening the door to some "technical tweaks" to the depo rate, which would not materialize before well into next year. In our baseline, the ECB would still be a net purchaser of securities at the end of 2018 (to be clear, would stop by December 2018).</p> <p> It seems to us the market tends to focus on a hawkish alternative to this, with fast tapering and quicker rates. We agree that is what the noises from the hawks and centrists suggest. But we also continue to believe core inflation will disappoint the ECB. That is what motivates our belief in a very, very slow and considered exit.</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="1200" height="833" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/Draghi%20Satan_38.jpg?1493258593" /> </div> </div> </div> http://www.zerohedge.com/news/2017-04-26/prepare-be-put-sleep-draghi-full-ecb-preview#comments Benoît Cœuré Bond Business Central bankers Central Banks ECB's Governing Council Economy Euro Eurogroup European Central Bank European Union Eurozone Financial services Governing Council Group of Thirty Mario Draghi Monetary Policy Monetary policy Open market operation Output Gap recovery Reuters SWIFT Trichet US Federal Reserve Thu, 27 Apr 2017 01:48:52 +0000 Tyler Durden 594457 at http://www.zerohedge.com