http://www.zerohedge.com/fullrss2.xml/component/option%2Ccom_docman/Itemid%2C200023/gid%2C397/BoomBustBlog/BoomBustBlog/BoomBustBlog/BoomBustBlog/2009/2009/07/2009/2009/2009/07/2009/07/2009/2009/07/2009/2009/07/2009/2009/07/2009/2009/07/2009/2009/2009/07/2009/07/news/iran-releases-video-captured-us-drone en Jeffrey Gundlach Warns "The Goldilocks Era Is Over" http://www.zerohedge.com/news/2017-12-16/jeffrey-gundlach-warns-goldilocks-era-over <p><a href="https://www.advisorperspectives.com/articles/2017/12/06/gundlach-the-goldilocks-era-is-over"><em>Authored by Robert Huebscher via AdvisorPerspectives.com,</em></a></p> <p>Easy monetary policies during the post-crisis period have propelled equity prices higher and driven bond yields lower. <strong>But as central banks reverse their quantitative easing (QE) and raise rates, this &ldquo;Goldilocks era&rdquo; will come to an end, </strong>according to Jeffrey Gundlach.</p> <p><em>Gundlach is the founder and chief investment officer of Los Angeles-based DoubleLine Capital. He spoke via a webcast with investors on December 5. His talk was titled, &ldquo;So Far, So Good,&rdquo; and the focus was on his firm&rsquo;s flagship mutual fund, the DoubleLine Total Return Fund (DBLTX). The slides from his presentation are <a href="http://www.zerohedge.com/news/2017-12-05/live-jeff-gundlachs-latest-webcast-so-far-so-good">available here</a>.</em></p> <p><iframe frameborder="0" height="600" scrolling="no" src="https://www.scribd.com/embeds/366413139/content?start_page=1&amp;view_mode=scroll&amp;access_key=key-3MBxWDPYTv6ujYhLI3kC&amp;show_recommendations=true" width="600"></iframe></p> <p>Markets may give back some gains, but a recession is not imminent.<strong><em> &ldquo;We do not see anything that indicates a recession in the next six months,&rdquo;</em></strong> he said.</p> <p>The main theme in the bond market, Gundlach said, is central bank policies. The Fed is raising rates and quantitatively tightening, which it euphemistically calls &ldquo;normalization.&rdquo; But the European central bank (ECB) is still easing.</p> <p>I&rsquo;ll review what Gundlach said about central bank policies, global economic performance and the likely direction of interest rates.</p> <h3><u><strong>The global economic outlook</strong></u></h3> <p>A key issue, which Gundlach has explored in prior webcasts, is why the ECB is easing while the Fed is tightening. He said the ECB is still expanding its balance sheet by approximately a billion euros per month. <strong>Mario Draghi has said the ECB will not raise rates above zero until well past the end of its QE, despite the fact the global economy, according to Gundlach, is &ldquo;looking better than it has in recent years.&rdquo;</strong></p> <p>Gundlach presented data on the developed economies, showing which were contracting, expanding or accelerating. For the first time since the global financial crisis (GFC), he said, none are contracting and many more are accelerating than are expanding. Reported economic indicators, he said, are coming in better than expected, based on the Citibank &ldquo;surprise index.&rdquo;</p> <p>Even China is &ldquo;doing just fine,&rdquo; according to Gundlach. He said its GDP, which is usually a source of skepticism, has been growing at 6.8% to 7% for the last five years. But other data sources (e.g., electrical power usage and rail freight) corroborate and even suggest that those GDP growth rates may be understated.</p> <div class="ap-content-lazy-loader-page" id="page-2"> <p><em><strong>What is responsible for this growth? Gundlach said it is stimulative monetary policies, despite the fact that they don&rsquo;t make sense in Europe. Looking across global central banks, he said, in aggregate their balance sheets have being going up constantly since the GFC, except for small &ldquo;blips&rdquo; in 2009 and 2013. That growth has paralleled increases in equity prices.</strong></em></p> <h3><u><strong>The shrinking supply of bonds</strong></u></h3> <p>Gundlach discussed how a key driver of interest rates will be the supply of bonds.</p> <p>Japan has accelerated its QE, Gundlach said. He noted that 45% of Japanese government bonds are owned by banks (mostly for regulatory reasons) and 43% are owned by the Bank of Japan (BOJ). Only a few percent are owned by life insurance companies and a small portion by individuals.<strong> He asked rhetorically what would happen if the BOJ bought all the bonds and then &ldquo;forgot about it.&rdquo; &ldquo;We may find out,&rdquo; he said.</strong></p> <p>The Fed has reduced its balance sheet as per its plan, Gundlach said. QE has been highly correlated to low volatility and equity price gains. But that relationship will end by 2019, when the remaining central banks are expected to be in tightening mode, he said.</p> <p><strong>Below is what Gundlach called &ldquo;the chart of the webcast.&rdquo; </strong>It shows that total central-bank bond purchases and world equity-market performance (both measured as 12-month rates-of-change) have been highly correlated.</p> <p><a class="galleryImg" href="https://www.advisorperspectives.com/images/content_image/data/72/72a9b5d00ab86a9b73fd875a6682a2f2.png"><img class="wrap-center ap-lazy-image loaded" src="https://www.advisorperspectives.com/images/content_image/data/72/72a9b5d00ab86a9b73fd875a6682a2f2.png" style="width: 600px; height: 447px;" /></a></p> <p>QE has been &ldquo;clearly correlated&rdquo; with credit spreads, Gundlach said, but<strong> we are &ldquo;getting very near the end of the corporate credit cycle in terms of the outperformance versus Treasury bonds.&rdquo; </strong>He said the junk-bond spread to Treasury bonds has widened a little bit in the last month, &ldquo;but not nearly as much as it does prior to a recession,&rdquo; he said.</p> <p>Interest rates are &ldquo;absurdly low&rdquo; in Germany, Gundlach said. The German 10-year rate is approximately 40 basis points, partly because of a lack of supply. He said that from 2015-2017 there was a negative net-supply (the volume of issuance was less than maturities) for the &ldquo;G3&rdquo; (the U.S., Europe and Japan), but that will change in 2018. The gap between issuance and maturities will increase further in 2019, he said. &ldquo;A recession in the next two years would trigger a bigger surge in bond issuance,&rdquo; Gundlach added.</p> <p><em><strong>&ldquo;It will be interesting to see if the bond market can hang on with the coming supply,&rdquo; Gundlach said, &ldquo;in addition to the easing of monetary policy.&rdquo;</strong></em></p> </div> <div class="ap-content-lazy-loader-page" id="page-3"> <p>Gundlach cited an academic study showing that the Fed funds rate would have had to go to -300 basis points to produce the same effect (in term of GDP growth) as QE. Applying this analysis to the ECB&rsquo;s monetary policy, it shows that the U.S. is effectively tighter than the ECB by 700 basis points.<em><strong> &ldquo;Either Europe has to have substantially better economic performance,&rdquo; he said, &ldquo;or this theory is invalid.&rdquo;</strong></em></p> <p>But Europe&rsquo;s economy is doing as good as or better than the U.S. based on almost all indicators, Gundlach said, including manufacturing, retail sales and GDP growth.</p> <p>The ECB has never eased when the purchasing manager index (PMI) has been above 55, as it is now. &ldquo;If the PMI pushes higher it will be tough for Draghi to maintain his rhetoric,&rdquo; Gundlach said.</p> <p><strong><em>&ldquo;One of these days Draghi will acknowledge that the economy is better than when monetary stimulus started, which would trigger higher yields,&rdquo; Gundlach said.</em></strong></p> <h3><u><strong>The yield curve and the recession watch</strong></u></h3> <p>The yield curve has flattened and many analysts have tried to &ldquo;explain that away,&rdquo; Gundlach said, claiming that such a move doesn&rsquo;t matter as a recession indicator. But he said that the movement in the yield curve suggests that &ldquo;we are in the later stages of the credit cycle.&rdquo; The spread between yields on two- and 10-year Treasury bonds has decreased from 275 basis points in 2013 to 52 today.</p> <p><strong><em>&ldquo;It is relentlessly flattening and sending something of a signal,&rdquo; Gundlach said. &ldquo;If it goes to zero, it is a flashing yellow light that we are closer to a recession.&rdquo;</em></strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/15/20171215_cuirve1_1.jpg"><strong><em><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/15/20171215_cuirve1_1_0.jpg" style="width: 600px; height: 316px;" /></em></strong></a></p> <p>U.S. GDP growth for Q4 is at approximately 3.5%, according to Gundlach, which is stronger than Q3, when it was 3.2%. Nominal GDP growth is 4.5%-5%, which is a good &ldquo;starting point&rdquo; for predicting 10-year rates, according to Gundlach. &ldquo;Without manipulation by the Fed, that is where the 10-year yield could be,&rdquo; he said.</p> <p>The leading economic indicators (LEIs) in the U.S. are &ldquo;downright strong,&rdquo; he said, and near their best levels since 2010. At the level where the LEIs are, he said, it would take a year to get to recessionary level.</p> </div> <div class="ap-content-lazy-loader-page" id="page-4"> <p><strong>Manufacturing and service PMIs are strong, he said, and usually &ldquo;tank&rdquo; six months before a recession.</strong></p> <p>They are very highly correlated to nominal GDP growth. If anything the PMIs imply that nominal GDP could pick up, he said.</p> <p><em><strong>Junk-bond spreads widened about a year before the 2001 recession and about six months before the 2007 recession. They have moved in 2017, Gundlach said, but not enough to cause a recession alarm. &ldquo;It will take a bigger move than has happened this year.&rdquo;</strong></em></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/15/20171215_HY_1.jpg"><em><strong><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/15/20171215_HY_1_0.jpg" style="width: 600px; height: 313px;" /></strong></em></a></p> <p><a href="http://www.zerohedge.com/news/2017-12-13/gundlach-reveals-his-favorite-trade-2018">Commodity prices bottomed out in 2016 </a>and have been flat this year, he said.</p> <p>Commodity prices typically rise going into recessions, such as in 2001 and 2008. There hasn&rsquo;t been a recession without such a move. &ldquo;So far it is not enough to cause an alarm,&rdquo; he said.</p> <h3><u><strong>Predictions for inflation and interest rates</strong></u></h3> <p>Headline inflation in the U.S. has risen, Gundlach said. <em><strong>&ldquo;If this continues, the Fed would have ample reason to follow through on its indicated three rate hikes in 2018.&rdquo;</strong></em></p> <p>Gundlach discussed the historical performance of commodities relative to the S&amp;P. He said that stocks have &ldquo;massively outperformed&rdquo; commodities since the GFC. The historical pattern suggests that commodities are very cheap relative to stocks, according to Gundlach.</p> <p><em><strong>&ldquo;Commodities have bottomed out and are at a level where they are a good buy,&rdquo; Gundlach said. &ldquo;Maybe you should buy them now.&rdquo;</strong></em></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/12/13/equities vs commodities gundlach.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/12/13/equities%20vs%20commodities%20gundlach_0.jpg" style="width: 600px; height: 415px;" /></a></p> <p>He said he would own broad-based commodities over gold.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/15/20171216_gund1.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/15/20171216_gund1_0.jpg" style="width: 600px; height: 312px;" /></a></p> <p>Gundlach discussed how the Republican tax plan would affect interest rates. He said this is a &ldquo;strange environment&rdquo; to cut taxes, because we usually do that when the economy needs a boost. <strong>A tax cut will reduce revenue, grow the deficit, grow bond supply and boost economic growth, all of which will be &ldquo;bond unfriendly.&rdquo; </strong>He said he has seen some movement in the bond market over the last month that could be attributed to a reaction to the tax cut.</p> </div> <p>A huge share of federal revenue is from individuals and only 13% is from corporations. &ldquo;It is strange that there has been so much focus on this issue,&rdquo; Gundlach said.</p> <p>Concerns over the debt-to-GDP ratio have &ldquo;fallen off the radar&rdquo; since 2011, Gundlach said, when there was panic over the possibility of a ratings downgrade for Treasury securities. Now those concerns are returning, he said, because of the growth in entitlements and the tax plan.</p> <p>Gundlach has previously predicted that the yield on the 10-year Treasury bond would be 6% by the next presidential election (in 2020). On this point, he said, &ldquo;Why not? We could tack on 75 basis points per year for the next five years.&rdquo;</p> <p><em><strong>If the 30-year yield goes up another 50 basis points, Gundlach said, &ldquo;then the bond bull market is over and the 6% yield is more likely.&rdquo;</strong></em></p> <p>He said that bond investors should not be in an index fund with a duration of 6 (presumably referring to the AGG). Nor should they be in corporate bond funds, which have attracted a lot of money because they have done well. Investors should want lower duration bond funds, Gundlach said.</p> <p><em><strong>As a final warning, he said that there is &ldquo;plenty of leverage in the system,&rdquo; as markets have performed well with low volatility. But higher rates will &ldquo;hurt highly leveraged strategies.&rdquo;</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="369" height="190" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20171216_gund.jpg?1513445728" /> </div> </div> </div> http://www.zerohedge.com/news/2017-12-16/jeffrey-gundlach-warns-goldilocks-era-over#comments Bank of Japan Bank of Japan Bond Business Central Banks China Citibank Economic policy Economy European Central Bank European Central Bank Eurozone Finance Germany Global Economy Goldilocks Gundlach Inflation Insurance Companies Japan Japanese government Jeffrey Gundlach Leading Economic Indicators Monetary Policy Monetary policy Money Nominal GDP None Quantitative Easing Quantitative easing ratings Recession Recession S&P Stock market crashes Total Return Fund US Federal Reserve Volatility Yield Curve Yield curve Sat, 16 Dec 2017 18:45:00 +0000 Tyler Durden 609279 at http://www.zerohedge.com What's In The Final Republican Tax Bill: Goldman Explains http://www.zerohedge.com/news/2017-12-16/whats-final-republican-tax-bill-goldman-explains <p>While we <a href="http://www.zerohedge.com/news/2017-12-15/full-policy-highlights-tax-cuts-jobs-act-leaked">published both the full text</a>(1,097 pages) and the "explanatory" statement (only 570 pages) released by the House-Senate conference committee on the final Republican Tax Bill, also known as the Tax Cuts and Jobs Act (TCJA), we are confident not many readers - or anyone else for that matter - will read the full text. </p> <p>So, as we previewded yesterday, <a href="http://www.zerohedge.com/news/2017-12-14/here-what-republicans-final-tax-bill">here again </a>is the Cliff Notes version of what the GOP agreed on late on Friday, and which will be voted early to mid-next week by both the House and the Senate:</p> <ul> <li><strong>CORPORATE TAX RATE</strong>: Cuts corporate <strong>income tax rate to 21 percent from 35 percent</strong>, beginning Jan. 1, 2018.</li> <li><strong>PASS-THROUGHS: </strong>Creates a <strong>20 percent deduction for the first $315,000 </strong>of qualified business income for joint filers of pass-through businesses such as partnerships and sole proprietorships. For income above that threshold, the legislation phases in limits that produce an <strong>effective marginal tax rate of no more than 29.6 percent.</strong></li> <li><strong>CORPORATE MINIMUM TAX: </strong>Repeals the 20 percent federal corporate alternative minimum tax, which was set up to ensure that profitable corporations pay at least some tax.</li> <li><strong>TERRITORIAL SYSTEM: </strong>Exempts U.S. corporations from U.S. taxes on most of their future foreign profits, ending the present worldwide system of taxing profits of all U.S.-based businesses, no matter where the profits are earned.</li> <li><strong>REPATRIATION: </strong>Sets a one-time mandatory tax of 8 percent for illiquid assets and 15.5 percent for cash and cash equivalents on $2.6 trillion in U.S. business profits currently held overseas. That foreign cash pile was created by a rule that allowed foreign profits to be tax-deferred if they were not brought into the United States, or repatriated, a tax rule that would be rendered obsolete by the territorial system.</li> <li><strong>CAPITAL EXPENSING</strong>: Allows businesses to immediately write off, or expense, the full value of equipment for five years, then gradually eliminates 100 percent expensing over a three-year period beginning in year six.</li> <li><strong>CLEAN ENERGY: </strong>Leaves in place tax credits for producing electricity from wind, biomass, geothermal, solar, municipal waste and hydropower.</li> <li><strong>CARRIED INTEREST: </strong>Largely leaves in place the “carried interest” loophole that benefits private equity fund managers and some hedge fund managers, despite pledges by Republicans including Trump to close it. These financiers can now claim a lower capital gains rate on much of their income from investments held more than a year. The new legislation would extend that holding period to three years, putting the loophole out of reach for some fund managers, but preserving its availability for many.<br />INDIVIDUAL</li> <li><strong>BRACKETS: </strong>Sets seven tax brackets: For married couples filing jointly, 10 percent up to $19,050; 12 percent up to $77,400; 22 percent up to $165,000; 24 percent up to $315,000; 32 percent up to $400,000; 35 percent up to $600,000; and 37 percent over $600,000. For unmarried individuals and married couples filing separately, 10 percent up to $9,525; 12 percent up to $38,700; 22 percent up to $82,500; 24 percent up to $157,500; 32 percent up to $200,000; 35 percent up to $500,000; and 37 percent over $500,000. These brackets expire after 2025.</li> <li><strong>STANDARD DEDUCTION: </strong>Gives taxpayers a tax break without having to claim itemized deductions. For eight years beginning in 2018, the standard deduction increases to $12,700 from $6,350 for individuals and to $24,000 from $12,000 for married couples under the legislation.</li> <li><strong>CHILD TAX CREDIT</strong>: Doubles the child tax credit to $2,000 per dependent child under the age of 17, with a refundable portion of $1,400. The refundable portion allows families to lower their tax bills to zero and receive a refund for the remaining value.</li> <li><strong>PERSONAL EXEMPTION: </strong>Ends $4,050 individual personal exemption.</li> <li><strong>INHERITANCES: </strong>Increases the exemption for estate and gift taxes to $10 million from $5 million per person and indexes the new exemption level for inflation after 2011. That means even fewer Americans would pay the estate tax, but it would stay on the books.</li> <li><strong>MORTGAGES: </strong>For residences bought from Jan. 1, 2018, through Dec. 25, 2025, caps the deduction for mortgage interest at $750,000 in home loan value. After Dec. 31, 2025, the cap will revert to $1 million in loan value. Suspends the deduction for interest on home equity loans.</li> <li><strong>OBAMACARE MANDATE: </strong>Repeals a federal fine imposed on Americans under Obamacare for not obtaining health insurance coverage.</li> </ul> <p>* * * </p> <p>Naturally, without context the above bullets mean little, so here is a quick walkrhough from Goldman's chief political economist, Alec Philips, who writes that in the latest good news for the economy, <strong>the tax cuts in the final bill are larger in 2018 and 2019 than the Senate-passed version, though most of this is due to pulling forward the effective date for the 21% corporate tax rate to 2018 rather than 2019. </strong>Offsetting this, however, is that a preliminary read of the bill leads Goldman to believe that <strong>the effect on growth from the tax bill will not be substantially different than the minimal 0.3% boost in 2018 and 2019 the bank previously estimated</strong>.</p> <p>In other words, for all the talk - and Treasury promises - of a sharp economic rebound, and the tax plan paying for itself, Goldman is quite skeptical; so much so in fact that it barely see a material increase in GDP forecasts relative to baseline; to wit: "compared to policy as it stands today, the tax cut would equal 0.75% of GDP in 2018 and 1% of GDP in 2019. <strong>This is 0.6% of GDP greater in 2018 and 0.2% greater in 2019 than our assumption </strong>based on the Senate-passed bill. <strong>However, since most of the difference relates to the corporate tax cut taking effect in 2018 rather than 2019 as under the Senate bill, our preliminary take is that the growth effect should not be substantially different than the roughly 0.3% of GDP boost in 2018 and 2019 we previously estimated</strong>."</p> <p>Below are the main points from Goldman: </p> <ol> <li><strong>The tax cuts would be somewhat more front-loaded than Senate-passed plan and our own estimates</strong>. The revenue estimates of the conference agreement released by the Joint Committee on Taxation (JCT) suggest that, on a calendar year basis, the tax cut will be equal to 1% of GDP in 2018 and 1.3% of GDP in 2019 compared to a “current law” baseline that assumes several tax incentives expire on schedule (left panel of Exhibit 1). <strong>However, compared to policy as it stands today, the tax cut would equal 0.75% of GDP in 2018 and 1% of GDP in 2019</strong>. This is 0.6% of GDP greater in 2018 and 0.2% greater in 2019 than our assumption based on the Senate-passed bill. However, since most of the difference relates to the corporate tax cut taking effect in 2018 rather than 2019 as under the Senate bill, <strong>our preliminary take is that the growth effect should not be substantially different than the roughly 0.3% of GDP boost in 2018 and 2019 we previously estimated.</strong><br /><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/12/13/GS%20tax%20cuts%20final.png"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/12/13/GS%20tax%20cuts%20final_0.png" width="500" height="213" /></a></li> <li><strong>The corporate tax rate would be reduced to 21% starting in 2018</strong>. This increases the aggregate size of the tax in 2018 <span style="text-decoration: underline;"><strong>but does not create an incentive for businesses to pull forward capex and other deductible expenses as had appeared likely if the tax cut had taken effect with a delay starting in 2019</strong></span>. The corporate alternative minimum tax would be repealed, as expected.</li> <li>The limitation on business interest deductibility represents a compromise between the House and Senate. For the next four years, through 2021, <strong>businesses (corporations as well as passthroughs) may deduct interest up to 30% of earnings before interest, taxes, depreciation, and amortization (EBITDA</strong>). Starting in 2022, this limit would become more restrictive, at 30% of earnings before interest and taxes (EBIT).</li> <li><strong>The restriction on net operating losses (NOLs) became incrementally more restrictive than prior versions</strong>. Under the final agreement<strong>, NOLs could not be carried back, as expected, and while they could still be carried forward, <span style="text-decoration: underline;">they could be used to offset only 80% of a company’s income</span></strong>, rather than the 90% previously proposed.</li> <li>The international corporate provisions largely resemble the Senate’s provisions, as had appeared likely. The final bill includes a modified version of the Senate’s Base Erosion and Anti-Avoidance Tax (BEAT) as well as a modified version of the tax on global intangible low-tax income (GILTI<strong>). The minimum tax rate on such income would be set at an effective minimum tax of 13.125%. </strong>The agreement also imposes a slightly higher tax rate on accumulated untaxed foreign earnings (“deemed repatriation”) than the House or Senate bills; <strong>the final version would tax earnings held in liquid investments at 15.5%, other untaxed foreign earnings at 8%. </strong>Future foreign earnings (whether repatriated or not) would not be taxed by the US unless they are subject to the GILTI tax.</li> <li>On the individual side<strong>, the top marginal rate declines to 37%, as opposed to 38.5% under the Senate bill and 39.6% in the House bill</strong>. Additionally, <strong>it allows state and local tax deductibility – including property as well as income – up to $10k. The final agreement allows mortgage interest deductibility with mortgage principal capped at $750k </strong>(existing loans will be grandfathered), but it disallows home equity debt-related interest. <strong>The individual AMT remains in the conference agreement, but with increased exemption amounts and phaseout thresholds</strong>. </li> <li><strong>Pass-through provisions are similar to the Senate version, but the deduction rate is lowered to 20% (from 23%) of eligible income</strong>. Taxpayers with income over a threshold of $315k (down from $500k) face additional restrictions. This further deters high-income taxpayers from using the deduction for wage income. Qualified REIT dividends, cooperative dividends, and publicly traded partnership income is eligible for the 20% deduction.</li> <li><strong>We expect the House to vote on the plan Tuesday, Dec. 19, and the Senate to vote on Wednesday, Dec. 20. </strong>With public announcements from Sens. Corker (R-TN) and Rubio (R-FL) that they plan to vote for the bill, the probability of passage looks very high. That said, Sens. McCain (R-AZ) and Cochran (R-MS) have missed votes recently due to health issues and there has not yet been any formal announcements from Sens. Collins (R-ME), Flake (R-AZ), or McCain (R-AZ) on how they plan to vote. While there is still some uncertainty, all of these senators look more likely than not to support the final bill. The bill needs 50 senators to vote for the bill, assuming Vice President Pence breaks the tie, meaning that the bill can pass as long as no more than 2 of the 52 Senate Republicans votes against the bill or is absent. Prediction markets now put the odds of enactment before year end at around 90%.</li> </ol> <p>* * * </p> <p>Finally, a tangent from the WSJ, on the repatriated cash provision. Citing analyst calculations, the newspaper writes that while Republican lawmakers say their tax overhaul would spur companies to hire more employees and build factories in the U.S, <strong>one key provision, which could free up hundreds of billions of dollars for companies to spend, probably would benefit shareholders</strong>.</p> <p>The provision changes the tax rules on the profits that U.S.-based companies make overseas. Under current law, companies must pay a 35% tax on the earnings if they bring them to the U.S., though they can get credit for overseas taxes. To avoid the bill, companies have left $1.9 trillion abroad, according to Moody’s Investors Service. The GOP plan would eliminate the tax on ex-U.S. profits going forward, while requiring companies pay a levy on earnings <a href="https://www.wsj.com/livecoverage/tax-bill-2017/card/1513206054">currently offshore at a much-reduced rate.</a></p> <p>Based on analyses of past programs to repatriate overseas corporate earnings, Wall Street analysts and tax experts expect companies <strong>would use the money for purposes such as buying back shares and mergers. Instead of adding jobs, they say, companies might cut them if they use their cash to buy rivals and then take out costs</strong>.</p> <p>“There will be increased share repurchases, but limited impact on building new plants, real investment activity and employment,” said Dhammika Dharmapala, a University of Chicago law professor who has studied what U.S. companies have done with repatriated cash.</p> <p>What this means is that when Trump said this morning that:</p> <ul> <li><strong>TRUMP SAYS $4 TRLN TO BE REPATRIATED IN `GREATEST XMAS GIFT'</strong></li> </ul> <p>... he meant for shareholders. </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>“Shareholders will get the cash” </strong>from repatriation, said Kimberly Clausing, a Reed College economics professor and an expert in international tax policy. </p> <p>&nbsp;</p> <p>Executives at U.S.-based companies have complained for years that the country’s tax code makes it hard for them to compete with foreign rivals whose overseas earnings aren’t taxed by their home countries and who in some instances pay lower tax rates on their domestic profits.</p> </blockquote> <p>And now that the tax will be drastically smaller, instead of issuing domestic debt to fund buybacks, management teams will simply repatriate offshore cash in order to boost their stock price, augment their equity-linked comp and generally make the rich even richer. Some more details: </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>“<strong>We expect technology issuers will use repatriated off shore cash largely for shareholder returns</strong>,” Fitch Ratings said in a recent research note. </p> <p>&nbsp;</p> <p>Credit Suisse analyst Vamil Divan said he expects the drug companies he follows to use repatriated cash for share buybacks and acquisitions. “I think we’re going to see the consolidation in the industry we’ve been waiting for,” Dr. Divan said. </p> <p>&nbsp;</p> <p>Analysts predict Pfizer Inc., would use repatriated money to do a big deal. The company has about $22 billion in cash overseas, and Chief Financial Officer Frank D’Amelio has said its priorities for using any money brought to the U.S. following tax changes “are dividends, share buybacks, investing in the business and M&amp;A.”</p> </blockquote> <p>As for the rest of the economy, Goldman said it best: "<strong>we do not believe the effect on growth from the tax bill will be substantial.</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="600" height="366" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/trump%20tax%20teaser_11.jpg?1513448696" /> </div> </div> </div> http://www.zerohedge.com/news/2017-12-16/whats-final-republican-tax-bill-goldman-explains#comments Alternative minimum tax Business Corporate tax Credit Suisse Economy Estate tax in the United States Fitch Geothermal Home Equity Income tax Income tax in the United States International taxation Investors Service Joint Committee on Taxation Newspaper Obamacare Predicted effects of the FairTax Private Equity ratings Reed College Republican Party Senate Tax Tax Cuts and Jobs Act University of Chicago Value-added tax Sat, 16 Dec 2017 18:25:30 +0000 Tyler Durden 609282 at http://www.zerohedge.com The Big Con: The Truth Behind Net Neutrality and Why the Sky Is Not Falling http://www.zerohedge.com/news/2017-12-16/big-con-truth-behind-net-neutrality-and-why-sky-not-falling <p><a href="http://www.thedailybell.com/news-analysis/the-big-con-the-truth-behind-net-neutrality-and-why-the-sky-is-not-falling/">Via The Daily Bell</a></p> <p style="box-sizing: border-box; margin-top: 0px; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;"><span style="box-sizing: border-box;">December 14th marked the end of the internet. At least, that is what the media, social networks… and&nbsp;<em style="box-sizing: border-box; line-height: 24px; padding-bottom: 8px;">lobbyists</em>&nbsp;would have you believe.</span></p> <p style="box-sizing: border-box; margin-top: 0px; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;"><span style="box-sizing: border-box;">Net neutrality has dominated the media cycle lately.</span></p> <p style="box-sizing: border-box; margin-top: 0px; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;"><span style="box-sizing: border-box;">But why? Why would the repeal of a rather freshly formed regulation garner all this attention, and anger?</span></p> <p style="box-sizing: border-box; margin-top: 0px; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;"><span style="box-sizing: border-box;">Taking a step towards a freer marketplace should be celebrated. Right?</span></p> <p style="box-sizing: border-box; margin-top: 0px; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;"><span style="box-sizing: border-box;">But to hear internet activists and the millions taking to social media complain, this step is a death blow to the internet.</span></p> <p style="box-sizing: border-box; margin-top: 0px; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;"><span style="box-sizing: border-box;">Now, without the government&nbsp;</span><em style="box-sizing: border-box;">protecting&nbsp;</em><span style="box-sizing: border-box;">us from ISPs, we will be forced into paying for subpar services. We will be forced to deal with ISPs throttling our connections while watching small internet based businesses slowly bleed out of existence.</span></p> <p style="box-sizing: border-box; margin-top: 0px; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;"><span style="box-sizing: border-box;">Except, we won’t be forced to do any of those things. That’s not what last week’s repeal was about.</span></p> <p style="box-sizing: border-box; margin-top: 0px; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;"><span style="box-sizing: border-box;">Americans will not be forced to purchase services they don’t want. Instead, an Obama era regulation which attempted to police businesses was repealed, paving the way for the free market to run its course.</span></p> <p style="box-sizing: border-box; margin-top: 0px; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;"><span style="box-sizing: border-box; font-weight: bold;">So why the outcry?<br style="box-sizing: border-box;" /></span><span style="box-sizing: border-box;"><br style="box-sizing: border-box;" /></span><span style="box-sizing: border-box;">People misunderstand net neutrality and what it actually did. As usual, the mainstream media worked in a concerted effort to push a narrative while banking on decent people’s emotional reactions. They pushed a story with the full intention of manufacturing a specific response.&nbsp;</span><em style="box-sizing: border-box;">Nothing new there</em><span style="box-sizing: border-box;">.</span></p> <p style="box-sizing: border-box; margin-top: 0px; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;"><span style="box-sizing: border-box;">That response was anger directed at the FCC’s decision to scale back a set of regulations. That response included&nbsp;</span><a href="http://dailysignal.com/2017/11/28/dumping-net-neutrality-is-opposite-of-authoritarianism-fcc-chief-says-amid-physical-threats/" style="box-sizing: border-box; background: 0px 0px; color: #0c5b3c;"><span style="box-sizing: border-box;">threats against the Commissioner</span></a><span style="box-sizing: border-box;">&nbsp;and&nbsp;</span><a href="http://www.washingtonexaminer.com/fcc-evacuates-meeting-room-due-to-security-threat-just-before-net-neutrality-vote/article/2643513" style="box-sizing: border-box; background: 0px 0px; color: #0c5b3c;"><span style="box-sizing: border-box;">a bomb threat against the FCC</span></a><span style="box-sizing: border-box;">.</span></p> <p style="box-sizing: border-box; margin-top: 0px; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;"><span style="box-sizing: border-box;">But that curated anger did nothing in terms of fixing the real problem facing our ability to connect to the world around us. And this is a problem that extends much further than cat memes and the trolling online.</span></p> <p style="box-sizing: border-box; margin-top: 0px; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;"><span style="box-sizing: border-box; font-weight: bold;"><em style="box-sizing: border-box;">An attempt to clear the smoke while ignoring the fire…</em></span></p> <p style="box-sizing: border-box; margin-top: 0px; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;"><span style="box-sizing: border-box;">The net neutrality regulations were typical restrictions</span><span style="box-sizing: border-box;">. They were an attempt for the US government to control various aspects of the telecom industry.</span></p> <p style="box-sizing: border-box; margin-top: 0px; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;"><span style="box-sizing: border-box;">Net neutrality made the internet regulated like a public utility. You know, like “the water company” and “the electric company”. It’s no wonder the few choices we have seem all too often like, “the internet company.”</span></p> <p style="box-sizing: border-box; margin-top: 0px; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;">Now, telecommunications companies have more freedom to offer different services at different prices. And yes, this includes the possibility that they throttle internet to certain sites and users.</p> <p style="box-sizing: border-box; margin-top: 0px; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;"><span style="box-sizing: border-box;">Net neutrality was the government’s&nbsp;response to an actual problem. As usual, their response ignored the problem completely.</span></p> <p style="box-sizing: border-box; margin-top: 0px; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;"><span style="box-sizing: border-box;">The problem wasn’t the way in which ISPs conducted business. The problem was the consolidation of power among ISPs. They influence legislation and regulation so that the government protects ISPs from competition.</span></p> <p style="box-sizing: border-box; margin-top: 0px; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;"><span style="box-sizing: border-box;">How did ISPs gain that ability? Through politicians’ favorite personal path to riches, lobbying.</span></p> <p style="box-sizing: border-box; margin-top: 0px; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;"><span style="box-sizing: border-box;">In fact, the FCC Chairman who presided over the implementation of net neutrality was Tom Wheeler.&nbsp;</span><a href="http://www.nationalreview.com/article/375116/how-comcast-bought-democratic-party-matthew-continetti" style="box-sizing: border-box; background: 0px 0px; color: #0c5b3c;"><span style="box-sizing: border-box;">He was a lobbyist for the telcom industry</span></a><span style="box-sizing: border-box;">&nbsp;who raised about a million dollars for Obama during the 2008 and 2012 elections. Obama nominated him in 2013.</span></p> <p style="box-sizing: border-box; margin-top: 0px; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;"><span style="box-sizing: border-box;">Lobbying, as it exists today, is nothing more than glorified bribery. Those with money cozy up to those with influence and engage in quid pro quo deals. From those deals, businesses and industries purchase the ability to sway laws.</span></p> <p style="box-sizing: border-box; margin-top: 0px; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;"><span style="box-sizing: border-box;">Wouldn’t you know, Obama was golf buddies with Comcast CEO Brian L. Roberts. Comcast owns NBC and MSNBC. These mainstream media outlets&nbsp;<a href="https://www.nbcnews.com/tech/tech-news/it-s-decision-day-future-internet-n829336" style="box-sizing: border-box; background: 0px 0px; color: #0c5b3c;">protest net neutrality</a>by claiming it will give their parent company too much power. Hmm…</span></p> <p style="box-sizing: border-box; margin-top: 0px; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;"><span style="box-sizing: border-box;">The power the telecom industry gained through lobbying was used to build small scale monopolies across the entire country.</span></p> <p style="box-sizing: border-box; margin-top: 0px; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;"><span style="box-sizing: border-box;">They purchased influence which created&nbsp;</span><a href="https://motherboard.vice.com/en_us/article/gvyjkm/the-path-to-community-broadband-runs-through-an-army-of-telecom-lawyers" style="box-sizing: border-box; background: 0px 0px; color: #0c5b3c;"><span style="box-sizing: border-box;">laws that prevented individuals from creating private networks.</span></a><span style="box-sizing: border-box;">&nbsp;They prohibited local governments from breaking up regional monopolies. They even&nbsp;</span><a href="https://www.techdirt.com/articles/20090423/1415514627.shtml" style="box-sizing: border-box; background: 0px 0px; color: #0c5b3c;"><span style="box-sizing: border-box;">allowed telecom representatives to author a North Carolina bill without politicians</span></a><span style="box-sizing: border-box;">. This became apparent when politicians turned to telecom lawyers to explain their bill because they didn’t understand it themselves!</span></p> <p style="box-sizing: border-box; margin-top: 0px; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;"><a href="http://cjspeaks.com/wp/wp-content/uploads/2015/01/Snapshot-1-15.pdf" style="box-sizing: border-box; background: 0px 0px; color: #0c5b3c;"><span style="box-sizing: border-box;">The telecom industry has lobbied 21 states to enact legislation aimed at reducing competition within the industry</span></a><span style="box-sizing: border-box;">. Not every piece of legislation outright banned competition within the market. But they all created a legal maze that effectively shut out new businesses. If you don’t have an army of lawyers, forget about competing in the industry.</span></p> <p style="box-sizing: border-box; margin-top: 0px; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;"><span style="box-sizing: border-box;">This led to the creation of regional monopolies across the country, creating a problem net neutrality did nothing to solve.</span></p> <p style="box-sizing: border-box; margin-top: 0px; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;"><span style="box-sizing: border-box; font-weight: bold;"><em style="box-sizing: border-box;">FCC Repeal is Rare Move Against Lobbyists…</em></span></p> <p style="box-sizing: border-box; margin-top: 0px; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;">Lobbyists wine, dine, and buy politician’s influence. They sway laws in their favor.</p> <p style="box-sizing: border-box; margin-top: 0px; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;"><span style="box-sizing: border-box;">So where is the outcry to stop this legal form of bribery? Why are social media activists not taking to Instagram to post memes about the stifling effects lobbying has on healthy competition within a market? Where are the celebrities tweeting about how lobbying diminishes the ability of the individual to shape policy?</span></p> <p style="box-sizing: border-box; margin-top: 0px; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;">When we allow the government to dictate how a business can be run, lobbyists for the biggest businesses inevitably have their way. Regulation they claim will prevent monopolies always creates them.</p> <p style="box-sizing: border-box; margin-top: 0px; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;"><span style="box-sizing: border-box;">So perhaps instead of trying to fight for the government’s ability to regulate private industries, people should focus on setting their sights on the bigger problem.</span></p> <p style="box-sizing: border-box; margin-top: 0px; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;"><span style="box-sizing: border-box;">In the meantime you have to admit that the phrase:&nbsp;<em style="box-sizing: border-box; line-height: 24px; padding-bottom: 8px;">“Hold your politicians accountable for accepting large scale bribery while selling away our country to the powerful few and destroying a competitive marketplace,”</em>&nbsp;is not quite as catchy as:&nbsp;<em style="box-sizing: border-box; line-height: 24px; padding-bottom: 8px;">“Save the Net.”</em></span></p> http://www.zerohedge.com/news/2017-12-16/big-con-truth-behind-net-neutrality-and-why-sky-not-falling#comments Comcast Comcast Draft:Net Neutrality Economy of the United States Federal Communications Commission Federal Communications Commission Government Internet access Internet service provider Lobbying in the United States MSNBC NBC Net neutrality Net neutrality in the United States Tom Wheeler United States US government Sat, 16 Dec 2017 18:22:32 +0000 TDB 609280 at http://www.zerohedge.com Stop Treating Bitcoin Like A Stock http://www.zerohedge.com/news/2017-12-16/stop-treating-bitcoin-stock <p><a href="https://hackernoon.com/stop-treating-bitcoin-like-stock-86f39f094091"><em>Authored by Jordan Stephens via Hackernoon.com,</em></a></p> <h4 class="graf graf--h4 graf-after--figure" id="8599"><u>It&rsquo;s not.</u></h4> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/15/20171216_hodl.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/15/20171216_hodl.jpg" style="width: 328px; height: 182px;" /></a></p> <p class="graf graf--p graf-after--h4" id="836d">I don&rsquo;t know about you, but I&rsquo;ve never felt so compelled to drink in my life than the past week watching Bitcoin. It&rsquo;s like watching a paper airplane bounce in the wind that could either nosedive any moment or catch another swift gust upward.</p> <p class="graf graf--p graf-after--p" id="a4ea"><strong><em>I get it. It looks like a really volatile stock ripe for quick profit or financial demise at the roll of some dice, and if we keep treating it this way, that&rsquo;s exactly how it will remain.</em></strong></p> <p class="graf graf--p graf-after--p" id="8c90">Investing in stock drives the production of better goods and services, but currency isn&rsquo;t a commodity which will depreciate due to the nature of its own decay. It&rsquo;s not a service which could lose its public appeal in a few years. Intellectual property is a closer metaphor, but a dollar will still never hold intrinsic value, ironically, unless it is one day viewed as an antique.</p> <blockquote class="graf graf--pullquote graf-after--p" id="c3ad"><p><em><strong>The true beauty of currency is that it doesn&rsquo;t exist corporeally nor have any intrinsic value at&nbsp;all.</strong></em></p></blockquote> <p class="graf graf--p graf-after--pullquote" id="a488">Cryptocurrency, by its very nature, cannot accurately represent value if it is perceived as being valuable itself, and as soon as we stop treating it as a means to redistribute wealth in another currency, it can get back to doing its real job?&mdash;?facilitating fair and reliably accountable exchange. If that&rsquo;s not your endgame for participating in it, then you should get out of it entirely because you&rsquo;re defeating the purpose.</p> <p class="graf graf--p graf-after--p" id="88a5"><u><em><strong><span class="markup--quote markup--p-quote is-other">What we&rsquo;re witnessing in arguably the grandest display in recent history is dissatisfaction with the status quo, and each dollar exchanged is an act of rebellion, a protest, and middle finger to every bank who is &ldquo;too big to fail.&rdquo;</span> </strong></em></u>As the price of bitcoin grows, so does a collective wager that the people can manage our own transactions more reliably than isolated centralized systems with national borders. Its volatile gesticulation is a global negotiation and argument how best to handle our transactions.</p> <p class="graf graf--p graf-after--p"><strong>Putting money into any cryptocurrency isn&rsquo;t an investment. It&rsquo;s a vote.</strong></p> <h4 class="graf graf--h4 graf-after--p" id="552b"><u>Will Bitcoin&nbsp;win?</u></h4> <p class="graf graf--p graf-after--h4" id="1b6e">Who knows? It&rsquo;s literally up to us. <strong>If any currency including the dollar crumbles, it&rsquo;s because consumers lost faith in it, not because it couldn&rsquo;t sustainably meet some demand.</strong> So if you take away one thing from me, let it be this:</p> <blockquote class="graf graf--pullquote graf-after--p" id="4304"><p><em><strong>Calling Bitcoin a bubble is a self-fulfilling prophecy.</strong></em></p></blockquote> <p class="graf graf--p graf-after--pullquote" id="57a2">Got a lot of money in it and want to see it grow? Then leave it. If we could all agree on this notion, Bitcoin could be the new global reserve tomorrow, and you&rsquo;d be doing your shopping not with all the money you&rsquo;ve made <em class="markup--em markup--p-em">from</em> Bitcoin, but <em class="markup--em markup--p-em">with</em> Bitcoin. Instead of questioning how much of our dollars to exchange, we&rsquo;d be scrambling to get the rest of it in there. This is the one question you should ask yourself when exchanging fiat value for cryptocurrency: Is this how I&rsquo;d rather spend my money? If Bitcoin is not your answer to that, don&rsquo;t buy it.</p> <p class="graf graf--p graf-after--p" id="e890"><strong>Bitcoin isn&rsquo;t the first of its kind, and it&rsquo;s demonstrably not the last; it&rsquo;s just the most successful right now, and since popularity is really at the heart of any mass system of exchange, success, in the long run, will be what matters. </strong>So since this thing is just getting started, should we trade around? Sure, go for it. Something will inevitably come out on top or else we&rsquo;ll all be stuck in some purgatorial economic limbo for a long time. This will probably occur when the public is satisfied with the fiat efficiency of managing transactions and the current distribution of wealth, but until then, put your money where your faith is. That way, we wind up with a system we actually want.</p> <p class="graf graf--p graf-after--p graf--trailing" id="c8d4"><strong>If you&rsquo;re satisfied with dollars, keep your dollars. </strong>After all, you already have the advantage of participating in the fiat system. And if you&rsquo;re looking to make more of them, buy stock generated by dollars, not cryptocurrency because <strong>if fiat profit is what you&rsquo;re after, the mainstream financial analysts are right</strong>?&mdash;?it&rsquo;s a terrible and risky investment to take your desired currency out of its participatory system.</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="328" height="182" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20171216_hodl.jpg?1513443885" /> </div> </div> </div> http://www.zerohedge.com/news/2017-12-16/stop-treating-bitcoin-stock#comments Alternative currencies Bitcoin Bitcoin Blockchains Cryptocurrencies Currency Digital currencies Economics of bitcoin Fail Finance Legality of bitcoin by country or territory Money SWIFT Too Big To Fail Sat, 16 Dec 2017 17:45:50 +0000 Tyler Durden 609277 at http://www.zerohedge.com Ex-FBI Assistant Director: Strzok Fabricated Information And "Belongs In Leavenworth" http://www.zerohedge.com/news/2017-12-16/ex-fbi-assistant-director-strzok-fabricated-information-and-belongs-leavenworth <p>Former FBI Assistant Director James Kallstrom called disgraced FBI agent Peter Strzok a "total moron" who belongs in Leavenworth federal prison, during a TV appearance on Thursday.&nbsp;</p> <p><em><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/12/13/kallstrom.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/12/13/kallstrom_0.jpg" width="500" height="281" /></a><br />James Kallstrom<br /></em></p> <p>Kallstrom, a former Marine captain and Vietnam veteran, told FBN host Liz MacDonald that if an FBI agent wanted to stop someone from becoming President, "I think he can do what [Strzok] tried to do," adding "<strong>He can fabricate things, he can make stuff up, he can lie, he can be a total moron</strong>."&nbsp;</p> <p><strong>"You know, he belongs in Leavenworth this guy, in my personal view."&nbsp;</strong></p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">Former FBI Assistant Director James Kallstrom on the Peter Strzok anti-Trump texts: "He belongs in Leavenworth. He belongs behind bars. These things cannot happen in a democracy." <a href="https://twitter.com/FoxBusiness?ref_src=twsrc%5Etfw">@FoxBusiness</a> <a href="https://twitter.com/LizMacDonaldFOX?ref_src=twsrc%5Etfw">@LizMacDonaldFOX</a> <a href="https://t.co/tMkX7wBoA9">pic.twitter.com/tMkX7wBoA9</a></p> <p>— Risk &amp; Reward (@RiskRewardFBN) <a href="https://twitter.com/RiskRewardFBN/status/941440139548659718?ref_src=twsrc%5Etfw">December 14, 2017</a></p></blockquote> <script src="https://platform.twitter.com/widgets.js"></script><p>Kallstrom's comments come after two weeks of stunning revelations about the FBI's top brass actively engaging in an effort to help then-candidate Hillary Clinton by "decriminalizing" her actions in the email case, while pursuing a case against then-candidate Donald Trump - using a discredited 34-page 'Trump-Russia' dossier to launch an investigation, according to several GOP members of Congress.&nbsp;</p> <p>When a subset of 10,000 text messages sent between Peter Strzok - lead investigator in the Trump-Russia case, and his FBI-Attorney mistress Lisa Page emerged,<strong> <a href="http://www.zerohedge.com/news/2017-12-15/fbi-edits-clinton-exoneration-go-far-beyond-what-was-previously-known-comey-mccabe-s" target="_blank">GOP lawmakers honed in</a> on a specific exchange in which Strzok references an "insurance policy" in the "unlikely event" Trump was elected President.&nbsp;</strong></p> <p>Now, <strong>it appears, that "insurance policy" may have been the entire Russia investigation, cooked up using the Trump-Russia dossier provided by DNC-Clinton funded opposition research firm, Fusion GPS. </strong>Fusion has been linked to several attempts to undermine Trump - <a href="http://www.zerohedge.com/news/2017-12-14/court-filing-confirms-fusion-gps-hired-doj-officials-cia-wife-dig-dirt-trump" target="_blank">including hiring Nellie Ohr</a> - the CIA wife of DOJ official Bruce Ohr, who was demoted for obfuscating his meetings with Fusion GPS founder Glenn Simpson.&nbsp;</p> <p><strong>Last week, Kallstrom said he believes there is a "Fifth Column conspiracy" </strong>within the FBI designed to "<strong>destroy President Donald Trump</strong>" - and the agency may have committed a "serious felony" in doing so. In an interview last Sunday with radio host John Catsimatidis on <em>970 AM </em>in New York, Kallstrom said:&nbsp;</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>“Ninety-nine percent of the people in the FBI are doing a fantastic job... It’s a small cabal of people running the FBI, the James Comey sycophants.”</p> </blockquote> <p><strong>“I’m coming more and more to the conclusion that this is a conspiratorial cabal among the fifth column to basically take away the presidency of the United States</strong>,” Kallstrom said, adding&nbsp;“This whole thing with Russia is just a farce.<strong> If we find out that that phony [Russian dossier] was brought to the U.S. Foreign Intelligence Surveillance Court in the form of an affidavit for a judge’s authority, and if we find out that the people signing that affidavit in the bureau knew that that was phony information</strong>, <strong>that is a serious serious felony.</strong>”</p> <p><em>Listen here:&nbsp;</em></p> <p><iframe src="https://omny.fm/shows/cats-interviews/12-10-17-james-kallstrom/embed" width="100%" height="180px" frameborder="0"></iframe></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="640" height="360" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/kallstrom.jpg?1513442066" /> </div> </div> </div> http://www.zerohedge.com/news/2017-12-16/ex-fbi-assistant-director-strzok-fabricated-information-and-belongs-leavenworth#comments Central Intelligence Agency Congress DOJ Donald Trump Donald Trump Donald Trump–Russia dossier FBI Federal Bureau of Investigation Federal Bureau of Investigation Fusion GPS James Comey James Kallstrom Republican Party Russian interference in the 2016 United States elections Trump campaign–Russian meetings Twitter Twitter United States US Foreign Intelligence Surveillance Court Sat, 16 Dec 2017 17:14:53 +0000 Tyler Durden 609275 at http://www.zerohedge.com Net Neutrality – The End Of Google's Biggest Subsidy http://www.zerohedge.com/news/2017-12-16/net-neutrality-%E2%80%93-end-googles-biggest-subsidy <p><a href="https://tomluongo.me/2017/12/16/net-neutrality-the-end-of-googles-biggest-subsidy/"><em>Authored by Tom Luongo,</em></a></p> <p><strong><em>Net Neutrality is gone.&nbsp; Good riddance.</em></strong></p> <p><strong><em><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/15/20171216_net.jpg"><img height="313" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/12/15/20171216_net_0.jpg" width="600" /></a></em></strong></p> <p>Lost in all of the theoretical debate about how evil ISPs will create a <strong>have/have-not divide</strong> in Internet access, is the reality that<strong> it already exists along with massive subsidies to the biggest bandwidth pigs on the planet &ndash; Facebook, Google, Twitter, Netflix and the porn industry.</strong></p> <p>Under Net Neutrality these platforms flourished along with the rise of the mobile internet, which is now arguably more important than the &lsquo;desktop&rsquo; one in your home and office.&nbsp;</p> <p><u><em><strong>Google and Apple control the on-ramps to the mobile web in a way that Net Neutrality proponents can only dream the bandwidth providers like Comcast and AT&amp;T could.</strong></em></u></p> <p><strong>Because, in truth, they can&rsquo;t.&nbsp; </strong>Consumers are ultimately the ones who decide how much bandwidth costs, not the ISPs.&nbsp; <em><strong>We decide how much we can afford these creature comforts like streaming Netflix while riding the bus or doing self-indulgent Instagram videos of our standing in line at the movies (if that&rsquo;s even a thing anymore).</strong></em></p> <h2><span style="text-decoration: underline;">Non-Neutrality Pricing</span></h2> <p><strong>Net Neutrality took pricing of bandwidth out of the hands of consumers.&nbsp; </strong>It handed the profits from it to Google, Facebook and all the crappy advertisers spamming video ads, malware, scams, and the like everywhere.</p> <p>By mandating &lsquo;equal access&rsquo; and equal fee structures the advertisers behind Google and Facebook would spend their budgets without much thought or care.&nbsp;<strong> Google and Facebook ad revenue soared under Net Neutrality because advertisers&rsquo; needs are not aligned with Google&rsquo;s bottom line, but with consumers&rsquo;.</strong></p> <p>And, because of that, the price paid to deliver the ad, i.e. Google&rsquo;s cost of goods sold (COGS), thanks to Net Neutrality, was held artificially low.&nbsp; And Google, Facebook and the Porn Industry pocketed the difference.</p> <p>They grew uncontrollably. &nbsp;In the case of Google and Facebook, uncontrollably powerful.</p> <p><strong>That difference was never passed onto the ISP who could then, in turn, pass it on to the consumer.</strong></p> <p>All thanks to Net Neutrality.</p> <h2><u>Undercapitalized Growth</u></h2> <p><em><strong>With the rise of the mobile web bandwidth should have been getting cheaper and easier to acquire at a much faster rate than it has.&nbsp; But, it couldn&rsquo;t because of Net Neutrality.&nbsp; It kept rates of return on new bandwidth projects and new technology suppressed.</strong></em></p> <p>Money the ISP&rsquo;s should have been spending laying more fiber, putting up more cell towers, building better radios went to Google to fritter away on endless projects that never see the light of day.</p> <p><strong>The ISP&rsquo;s actually suffered under Net Neutrality and so did the consumers.</strong></p> <p>And therefore, Net Neutrality guaranteed that the infrastructure for new high-speed bandwidth would grow at the slowest possible rate, still governed by the maximum the consumer was willing to pay for bandwidth, rather than what the consumer actually demanded.</p> <p>And, once obtained that power was then used to punish anyone who held different opinions from the leadership in Silicon Valley.</p> <p><strong>Think it through, Net Neutrality not only subsidized intrusive advertising, phishing scams and on-demand porn but also the very censorship these powerful companies now feel is their sacred duty to enforce because the government is now controlled by the bad guys.</strong></p> <p>Getting rid of Net Neutrality will put the costs of delivering all of this worthless content back onto the people serving it.&nbsp; YouTube will become more expensive for Google and all of the other content delivery networks.&nbsp; Facebook video will eat into its bottom line.</p> <p><strong>The ISP&rsquo;s can and should throttle them until they &lsquo;pay their fair share,&rsquo; which they plainly have not been.</strong></p> <p>The Net effect of Net Neutrality is that your ISP may charge you more in the short run for Netflix or Hulu.&nbsp; Or, more appropriately, Netflix and Hulu will have to charge you more and we&rsquo;ll find out what the real cost of delivering 4k streaming content to your iPhone actually costs.</p> <p>But, those costs will then go to the ISP&rsquo;s such that they can respond to demand for more bandwidth.&nbsp; Will they try and overcharge us?&nbsp; Of course.&nbsp; AT&amp;T is just as bad as Google and/or Facebook.</p> <p><strong><em>But, we have the right to say no.&nbsp; To stop using the services the way Net Neutrality encouraged us to through mispricing of service.&nbsp; If the ISP&rsquo;s want more customers then they&rsquo;ll have to bring wire out to the hinterlands.</em></strong></p> <h2><u>Inflated Costs, Poor Service</u></h2> <p><strong>Net Neutrality proponents kept telling us this was the way to help keep the internet available to the poor and the rural.&nbsp; Nonsense.&nbsp; It kept the internet from expanding properly into the hinterlands.</strong></p> <p>I live just over the county line in rural North Florida.&nbsp; To the south is a town with cable and DSL. &nbsp;&nbsp;Between cable franchise monopolies retarding expansion across county lines and Net Neutrality keeping margins thin, my home was 10 years behind everyone else getting decent bandwidth to keep up with the needs of the modern Internet.</p> <p>Bandwidth needs artificially inflated, I might add, by the misaligned cost structure engendered by Net Neutrality in the first place.</p> <p>It took forever for my phone provider to upgrade the bandwidth across the county line.&nbsp; I begged them for a second line for internet service, they wouldn&rsquo;t even talk to me.&nbsp; Why?&nbsp; The return on that new line wasn&rsquo;t high enough for them.</p> <p><strong>If Google was passing some of the profits from Adwords onto the ISPs I&rsquo;d have multiple choices for high-speed internet versus just one DSL provider.</strong></p> <p>As always, whenever the political left tries to protect the poor they wind up making things worse for them.</p> <h2><u>The Ways Forward</u></h2> <p><u><strong>The news is good for a variety of reasons. With Net Neutrality gone a major barrier to entry for content delivery networks is gone.</strong></u></p> <p>Blockchain companies are building systems which cut the middle man out completely, allowing content creators to be directly tipped for their work versus being supported by advertising no one watches, wants or is swayed by.</p> <p>Services like <a href="https://www.steemit.com/">Steemit</a> and the distributed application already built and to be built on it point the way to social media cost models which are sustainable and align the incentives properly between producers of content and consumers.</p> <p>Steem internalizes the bandwidth costs of using the network and pays itself a part of its token reward pool to cover those costs.&nbsp; So, all that&rsquo;s left is content producer and their fans.&nbsp; Advertisers are simply not needed to maintain the network.</p> <p><strong>Net Neutrality was a trojan horse designed to replicate the old shout-based advertising model of the golden age of print and TV advertising.&nbsp; It was a way to control the megaphone and promote a particular point of view.</strong></p> <p>Look no further than the main proponents of it.&nbsp; George Soros and the Ford Foundation are two of the biggest lobbyists for Net Neutrality.&nbsp; Only the political left and its Marxian fantasies of evil middle men creating monopolies fell for the lies, as they were supposed to.</p> <p>The rest of us were like, &ldquo;Really?&nbsp; This is not a problem.&rdquo;&nbsp; And it wasn&rsquo;t until you looked under the hood and realized all they stood to gain by it.</p> <p><strong>Now, with Net Neutrality gone the underlying problem can be addressed; franchise monopolies of cable and phone companies in geographic areas.&nbsp; These laws are still in effect.&nbsp; They still hang like a spectre over the entire industry.&nbsp; Like Net Neutrality, these laws concentrate capital into the hands of the few providers big enough to keep out the competition.</strong></p> <p>So, instead of championing the end of franchise monopolies, which county governments love because they get a sizable cut of the revenue to fund non-essential programs, the Left made things worse by championing Net Neutrality.</p> <p>That also needs to end.&nbsp; Even if you believe that franchise monopolies were, at one point, necessary.&nbsp; They are not now.&nbsp; IP-based communication is now fundamentally different than copper wire for discrete services like phone and cable.&nbsp; Let people run all the copper and fiber they want.&nbsp; There&rsquo;s plenty of room in the conduit running under our sidewalks and streets.</p> <p><u><em><strong>Let a thousand flowers bloom, as the great Lew Rockwell once told me.</strong></em></u></p> <p>Then and only then will the Internet be free.</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="1061" height="554" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20171216_net.jpg?1513442088" /> </div> </div> </div> http://www.zerohedge.com/news/2017-12-16/net-neutrality-%E2%80%93-end-googles-biggest-subsidy#comments Apple Broadband Comcast Computer law Computing Copper DSL Florida Ford Ford Foundation George Soros Google high-speed internet Internet access Internet service provider ISP Law Net bias Net neutrality Net neutrality in the United States North Florida Reality Technology Technology Twitter Twitter Sat, 16 Dec 2017 16:42:26 +0000 Tyler Durden 609276 at http://www.zerohedge.com $19,000: Bitcoin Hits New All Time High After Burst Of Asian Buying; Bigger Than Wells, Wal-Mart http://www.zerohedge.com/news/2017-12-16/bitcoin-hits-new-all-time-high-after-burst-asian-buying-market-cap-soars-above-300-b <p>Having traded in a relatively narrow - for bitcoin - range of $16,500-$17,500 over the past week, the world's most popular cryptocurrency jumped to new all time highs following the latest (unexplained) burst of buying out of Asia, with another Saturday surge in volumes emerging out of Japan and Korea. </p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/12/13/BTCUSD%2012.16.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/12/13/BTCUSD%2012.16_0.jpg" width="500" height="278" /></a></p> <p>Bitcoin is now up over $1,200, or 7%, in the past 24 hours, <strong>last trading at a new all time high of $19,000 on the coinbase exchange.</strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/12/13/bitcoin%2019%2C000.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/12/13/bitcoin%2019%2C000_0.jpg" width="500" height="238" /></a></p> <p>As a result of the latest push higher, <strong>the market cap of bitcoin is now over $318 Billion; </strong>to fund the bitcoin spree, Ethereum, Litcoin and various other cryptos have seen some modest liquidation, and have not enjoyed Bitcoin's latest dramatic ascent. </p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/12/13/bitcoin%20heatmap.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/12/13/bitcoin%20heatmap_0.jpg" width="500" height="266" /></a></p> <p>As of Saturday morning, <strong>the total crypto space market cap surpassed half a trillion, and was above $560 billion at last check. </strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/12/13/bitcoin%20mkt%20cap%2012.16.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/12/13/bitcoin%20mkt%20cap%2012.16_0.jpg" width="500" height="401" /></a></p> <p>Following Saturday's surge, Bitcoin's YTD return is approaching 20x, while ethereum remains the best performing major crypto, up more than 70-fold YTD.</p> <p>Also, for those keeping track, <strong>Bitcoin's market cap is now greater than Bank of America at $302 billion, as well as Wells Fargo ($295BN), Wal-Mart ($288BN), and Visa ($257BN). It is rapidly approaching Exxon at $352BN, but the real target is JPMorgan, whose $368BN market cap is now less than $50BN away. </strong></p> <p>While bitcoin has added more 30% to its value in the past week, trading has been slightly calmer than the wild price swings the market has seen in recent weeks, with volatility lower since the launch of bitcoin futures from Cboe Global Markets on Sunday. Market-watchers said bitcoin’s price was being lifted by the launch of rival CME Group’s bitcoin futures contracts on Sunday. </p> <p>“The hope (is) that futures signal the unlocking of institutional money into the digital arena and (that there will be) a rapid demand increase and ratification of the technology and its principles,” said Charles Hayter, founder of industry website Cryptocompare.</p> <p>Still, outside of the crypto market, worries continue to grow about the amount of money piling into the space with the most vocal critics being those who have so far missed the entire move. Chief among them is A study by Anglia Ruskin University, Trinity College Dublin and Dublin City University released on Friday said bitcoin could pose a threat to the financial stability of traditional currencies and markets, something which Janet Yellen denied earlier this week. </p> <p>“Our evidence finds that the price of Bitcoin has been artificially inflated by speculative investment, putting it in a bubble,” said Larisa Yarovaya, one of the report’s authors and a lecturer at Anglia Ruskin University. “Although bitcoin is not regulated by governments, it could still have a knock-on effect on traditional markets due to the interconnectedness of cryptocurrency markets with other financial assets.”</p> <p>Well, of course bitcoin is a bubble: as we first showed last week, <a href="http://www.zerohedge.com/news/2017-12-12/its-official-bitcoin-surpasses-tulip-mania-now-biggest-bubble-world-history">it's now officially the biggest bubble in history</a>, surpassing the "Tulip Mania" of the 17th century:<strong></strong> </p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/11/30/bitcoin%20bubble%20biggest%20ever.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/11/30/bitcoin%20bubble%20biggest%20ever_0.jpg" width="500" height="330" /></a></p> <p>The problem is that everything else is also a bubble. And as Stanely Druckenmiller said last week, until the "everything bubble" bursts, bitcoin is safe. The problem is that if and when the "everything bubble" does burst, it would most likely result in war as trillions in artificial "wealth effect" are wiped out; in this context what happens to bitcoin would be irrelevant. </p> <p>Meanwhile, for those who missed it, <a href="http://www.zerohedge.com/news/2017-12-14/one-bank-believes-it-found-identity-who-propping-bitcoin-market">last week Deutsche Bank </a>laid out who it believes is behind the relentless and dramatic surge in bitcoin: </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>An 11 December Nikkei report stated that 40% of cryptocurrency trading in Oct-Nov was yen-denominated. Japanese traders have reportedly come to account for nearly half of cryptocurrency trading since China started to shut down cryptocurrency exchanges, and this is said to be widely known among industry insiders (various estimates exist). <strong>Japanese men in their 30s and 40s who are engaged in leveraged FX trading (or who used to trade but have stopped) are driving the cryptocurrency market.</strong></p> </blockquote> <p>So is "<strong>Mr. Watanabe'</strong> proving more powerful than all the world's central and commercial banks, and most of the world's establishment economists, all soo desperate to shut down the "bitcoin bubble" to preserve faith in fiat currencies and traditional equity investments? Juding by the now daily record highs in the cryptocurrency, the answer - for now - is a resounding yes, which is clearly a benefit for all those who are still long the crypto such as these guy...</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">This may be the most San Francisco thing I have ever seen. <a href="https://t.co/rU4RYNuTVg">pic.twitter.com/rU4RYNuTVg</a></p> <p>— ??Michelle Tandler???? (@michelletandler) <a href="https://twitter.com/michelletandler/status/941829323241136128?ref_src=twsrc%5Etfw">December 16, 2017</a></p></blockquote> <script src="https://platform.twitter.com/widgets.js"></script><blockquote class="twitter-tweet"> <p dir="ltr" lang="en">San Diego has one too ???? <a href="https://t.co/ZmAlRECF2w">pic.twitter.com/ZmAlRECF2w</a></p> <p>— Cody Barbo (@codybarbo) <a href="https://twitter.com/codybarbo/status/941855171453206529?ref_src=twsrc%5Etfw">December 16, 2017</a></p></blockquote> <script src="https://platform.twitter.com/widgets.js"></script><blockquote class="twitter-tweet"> <p dir="ltr" lang="und"> <a href="https://t.co/ceuz4WKKMY">pic.twitter.com/ceuz4WKKMY</a></p> <p>— [??]?itcoin (@SatoshMe) <a href="https://twitter.com/SatoshMe/status/941864571697901568?ref_src=twsrc%5Etfw">December 16, 2017</a></p></blockquote> <script src="https://platform.twitter.com/widgets.js"></script> <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="344" height="199" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/blockchain%20teaser%202.jpg?1513440643" /> </div> </div> </div> http://www.zerohedge.com/news/2017-12-16/bitcoin-hits-new-all-time-high-after-burst-asian-buying-market-cap-soars-above-300-b#comments Alternative currencies Anglia Ruskin University Bank of America Bank of America Bitcoin Bitcoin Bitcoin Cash Business CBOE China Coinbase Cryptocurrencies Cryptography Currency Deutsche Bank Dublin City University Economics of bitcoin Exxon Finance Financial technology Janet Yellen Japan Legality of bitcoin by country or territory Money Nikkei Trinity College Dublin Twitter Twitter Volatility Wells Fargo Sat, 16 Dec 2017 16:06:47 +0000 Tyler Durden 609274 at http://www.zerohedge.com Canadian Billionaire, Wife, Found Dead In "Suspicious" Suicide http://www.zerohedge.com/news/2017-12-16/canadian-billionaire-wife-found-dead-suspicious-suicide <p>The billionaire founder of Canadian generic drug Apotex Inc, Barry Sherman, and his wife Honey, were found dead in their Toronto home on Friday under what police described as "suspicious" circumstances.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/12/13/suspicious%20death.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/12/13/suspicious%20death_0.jpg" width="500" height="279" /></a><br /><em>Honey and Barry Sherman</em></p> <p>Police said they were investigating the mysterious deaths after responding to a midday medical call at the Sherman’s home in an affluent section of northeast Toronto. <strong>Two bodies covered in blankets were removed from the home and loaded into an unmarked van on Friday evening.</strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/12/13/apotex%20death1.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/12/13/apotex%20death1_0.jpg" width="500" height="295" /></a></p> <p><strong>“The circumstances of their death appear suspicious and we are treating it that way,” </strong>said Constable David Hopkinson. Homicide detectives later told reporters gathered outside the home that there were no signs of forced entry, and no suspects were being sought as of this moment. </p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">Const. David Hopkinson if Toronto Police said they are calling deaths of Honey and Barry Sherman suspicious <a href="https://t.co/MJ577PeIdq">pic.twitter.com/MJ577PeIdq</a></p> <p>— Joe Warmington (@joe_warmington) <a href="https://twitter.com/joe_warmington/status/941790238745202689?ref_src=twsrc%5Etfw">December 15, 2017</a></p></blockquote> <script src="https://platform.twitter.com/widgets.js"></script><p>The Shermans recently listed their home for sale for nearly C$7 million ($5.4 million). A real estate agent discovered the bodies in the basement while preparing for an open house, the Toronto Globe and Mail reported, citing a relative.</p> <p>Their neighbors, who <a href="https://www.reuters.com/article/us-canada-death-apotex/canadian-police-probe-suspicious-deaths-of-billionaire-couple-idUSKBN1E92ZC">according to Reuters </a>include business associates and some of Canada’s most powerful politicians said they were saddened by the deaths.</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">Deeply shocked to learn of the deaths of Honey and Barry Sherman, such remarkable people. Grappling with this terrible news.</p> <p>— Bob Rae (@BobRae48) <a href="https://twitter.com/BobRae48/status/941793480325718016?ref_src=twsrc%5Etfw">December 15, 2017</a></p></blockquote> <script src="https://platform.twitter.com/widgets.js"></script><p>“Our condolences to their family &amp; friends, and to everyone touched by their vision &amp; spirit,” Prime Minister Justin Trudeau wrote on Twitter.</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">Sophie and I are saddened by news of the sudden passing of Barry and Honey Sherman. Our condolences to their family &amp; friends, and to everyone touched by their vision &amp; spirit.</p> <p>— Justin Trudeau (@JustinTrudeau) <a href="https://twitter.com/JustinTrudeau/status/941863953256235008?ref_src=twsrc%5Etfw">December 16, 2017</a></p></blockquote> <script src="https://platform.twitter.com/widgets.js"></script><p>Linda Frum, a member of the Canadian Senate, said she was "gutted by the loss" of the couple, two weeks after presenting a Senate medal "to one of the kindest and most beloved members of Canada's Jewish community." </p> <p>Ontario's health minister, Eric Hoskins, described the couple in a tweet as "wonderful human beings, incredible philanthropists, great leaders in healthcare."</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">I am beyond words right now. My dear friends Barry and Honey Sherman have been found dead. Wonderful human beings, incredible philanthropists, great leaders in health care. A very, very sad day. Barry, Honey, rest in peace.</p> <p>— Dr. Eric Hoskins (@DrEricHoskins) <a href="https://twitter.com/DrEricHoskins/status/941767410473930753?ref_src=twsrc%5Etfw">December 15, 2017</a></p></blockquote> <script src="https://platform.twitter.com/widgets.js"></script><p>Toronto Mayor John Tory said in statement he was “shocked and heartbroken” to learn of the deaths, noting that the couple had made extensive contributions to the city. </p> <p>“Toronto Police are investigating, and I hope that investigation will be able to provide answers for all of us who are mourning this tremendous loss,” Tory said.</p> <p>Sherman, 75, founded privately-held Apotex in 1974, growing it into the world's 7th largest drugmaker and the largest Canadian-owned pharmaceutical firm, with annual sales of more than C$2 billion and over 11,000 employees, by introducing large numbers of low-cost generic drugs that took market share from branded pharmaceuticals. He stepped down as chief executive in 2012 but remained executive chairman. </p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/12/13/apotex%20drug.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/12/13/apotex%20drug_0.jpg" width="500" height="638" /></a></p> <p>"All of us at Apotex are deeply shocked and saddened by this news and our thoughts and prayers are with the family at this time," the company said in a statement. </p> <p>Barry Sherman was ranked 363 on Forbes richest people in the world list; the publication put his net worth at $3.7 billion. He ranked just above eBay billionaire Jeffrey Skoll, and was believed to be the 5th richest person in Canada. The couple was known for their philanthropy, giving tens of millions of dollars to hospitals, universities and Jewish organizations, CBC reported. “They were extremely successful in business, but also very, very giving people,” former Ontario Premier Bob Rae told CBC. “It’s going to be a very, very big loss.”</p> <p>While there is no additional information on whether the suicide was foul play , in February the Globe and Mail reported that Lobbying Commissioner Karen Shepherd was investigating a complaint about a 2015 political fundraiser that Trudeau had attended.</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="505" height="282" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/suspicious%20death.jpg?1513434988" /> </div> </div> </div> http://www.zerohedge.com/news/2017-12-16/canadian-billionaire-wife-found-dead-suspicious-suicide#comments Apotex Barry Barry Sherman Police Bob Rae Canada Canadian Senate Justin Trudeau Market Share Ontario Pierre Trudeau Real estate Reuters Senate Toronto police Twitter Twitter University of Toronto Sat, 16 Dec 2017 15:18:46 +0000 Tyler Durden 609272 at http://www.zerohedge.com DOJ, AT&T Head To Court As Settlement Talks Collapse http://www.zerohedge.com/news/2017-12-16/doj-att-head-court-settlement-talks-collapse <p>It looks like AT&amp;T is going to fight the Department of Justice&#39;s injunction to stop the wireless provider from acquiring Time Warner in court, now that settlement talks between the two parties have failed, according to a court document filed Friday that was obtained by <a href="https://www.reuters.com/article/us-time-warner-m-a-at-t/u-s-justice-department-att-settlement-talks-failed-court-filing-idUSKBN1E92RS?il=0">Reuters</a>.</p> <p>Last month, the <a href="http://www.zerohedge.com/news/2017-11-02/time-warner-shares-plunge-doj-considering-suit-block-att-merger">DOJ revealed that it planned to sue</a> to stop AT&amp;T, owner of DirecTV and the No. 2 U.S. wireless company, from buying Time Warner for $85 billion, ostensibly because of concerns that it could raise prices for rivals and pay-TV subscribers and hamper the development of online video. According to several leaks in the press, the DOJ&#39;s aim was to push AT&amp;T and TW to agree to spin off CNN and the rest of the Turner Broadcasting Network properties. That, of course, sounds suspiciously similar to a threat issued by President Donald Trump during the campaign, when he threatened to stop the merger between the two parties.</p> <p>&ldquo;All parties have engaged in good-faith settlement negotiations, but despite their efforts, have not been able to settle the matter,&rdquo; the filing said.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user245717/imageroot/2017/12/04/2017.12.16ATT.JPG"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user245717/imageroot/2017/12/04/2017.12.16ATT_0.JPG" style="width: 500px; height: 268px;" /></a></p> <p>Accoding to Reuters, AT&amp;T and Time Warner last month offered to agree to terms that would forbid Turner from &ldquo;going dark&rdquo; on any distributor for seven years after the deal closes if they were to reach an impasse in negotiations with the DOJ. In preparation for the trial, final fact witness lists will be exchanged by Feb. 2 and all pretrial motions should be filed by March 12, according to the court filing.</p> <p>As we explained last month, there&#39;s little doubt that AT&amp;T - with its inferior network and dependence on copper telephone lines - badly needs the Time Warner deal.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>There is no doubt that AT&amp;T needs the Time Warner deal...badly. Their land-based distribution network, which is dependent on old copper telephone lines, is far inferior to their cable competitors which have since installed coaxial or fiber lines that supply far faster internet speeds to data-hungry homes and businesses.</p> <p>&nbsp;</p> <p>Of course, just a few years ago, AT&amp;T attempted to &#39;solve&#39; their copper network problem by ignoring the value of land-based networks altogether and instead buying a satellite TV business, DirecTV, for $67 billion.&nbsp; Predictably, that decision has been a total disaster as DirecTV has done nothing but shed hundreds of thousands of subscribers ever since...something AT&amp;T management should have been able to predict if they didn&#39;t discredit the growing value of streaming services...a necessary oversight for a company with an inferior network.</p> <p>&nbsp;</p> <p>Now, rather than ignore the value of distribution, AT&amp;T has apparently decided to pursue mergers that allow them to control content...content which the DOJ feels could be held hostage to make their inferior network somewhat more attractive to customers thus stemming the tide of subscriber losses for AT&amp;T.</p> </blockquote> <p>Of course, if the DOJ prevails, the precedent may kill any and all hopes of future mega media deals between distribution companies and content providers, and have a chilling effect on future M&amp;A.</p> <p><strong>A trial to decide the matter is set to begin on March 19, and run about 15 days, according to the filing</strong>. The two sides noted in the filing, which set out an agreed schedule leading up to the March trial, that there had been unsuccessful settlement discussions between the two.</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="624" height="335" alt="" src="http://www.zerohedge.com/sites/default/files/images/user245717/imageroot/2017.12.16ATT.JPG?1513436288" /> </div> </div> </div> http://www.zerohedge.com/news/2017-12-16/doj-att-head-court-settlement-talks-collapse#comments AT&T Attempted purchase of Time Warner Cable by Comcast Business Copper Department of Justice Department of Justice Deutsche Telekom DirecTV Donald Trump Economy Economy of the United States High-definition television Mergers and acquisitions Reuters satellite TV Time Warner Time Warner UN Court Sat, 16 Dec 2017 14:58:57 +0000 Tyler Durden 609273 at http://www.zerohedge.com Facebook Really Is Bad For You, Researchers Say http://www.zerohedge.com/news/2017-12-16/facebook-really-bad-you-researchers-say <p>Apparently, <a href="http://www.zerohedge.com/news/2017-12-11/i-feel-tremendous-guilt-former-facebook-exec-says-company-ripping-apart-social-fabri">Chamath Palihapitiya</a> was on to something when he revealed earlier this week that he felt &ldquo;tremendous guilt&rdquo; for the role that he played in Facebook&rsquo;s success as a social-media company.</p> <p>To wit, Facebook&#39;s director of research David Ginsberg and research scientist Moira Burke published a <a href="https://newsroom.fb.com/news/2017/12/hard-questions-is-spending-time-on-social-media-bad-for-us/">blog post </a>this week explaining that, in some instances, the social network can have a deleterious impact on an individual&rsquo;s overall mood and health.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&quot;University of Michigan students randomly assigned to read Facebook for 10 minutes were in a worse mood at the end of the day than students assigned to post or talk to friends on Facebook,&quot; the blog post said. &quot;A study from UC San Diego and Yale found that people who clicked on about four times as many links as the average person, or who liked twice as many posts, reported worse mental health than average in a survey.&quot;</p> </blockquote> <p>In other words, using Facebook to mindlessly browse through your feed or click posts can leave you in a foul mood after.</p> <p>However, the research wasn&rsquo;t exclusively negative. Facebook also worked with Carnegie Mellon University and found that &quot;people who sent or received more messages, comments and timeline posts reported improvements in social support, depression and loneliness.&quot; Likewise, Facebook said students at Cornell who used Facebook for 5 minutes while viewing their own profiles saw &quot;boosts in self-affirmation,&quot; while folks who looked at other profiles did not.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user245717/imageroot/2017/12/13/2017.12.15chamath.JPG"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user245717/imageroot/2017/12/13/2017.12.15chamath_0.JPG" style="width: 500px; height: 254px;" /></a></p> <p><em>Chamath Palihapitiya</em></p> <p>In other words, using Facebook to interact with people - as opposed to just &quot;browsing&quot; as the University of Michigan study analyzed - seemed to have a positive effect on people</p> <p>Facebook says it&#39;s going to take this data and work to encourage more social interaction among users&nbsp; to try and cut down on those who spend it to waste time and, ultimately, feel worse after.</p> <p>Meanwhile, Facebook&rsquo;s research showed that social support can help prevent suicide.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Facebook is in a unique position to connect people in distress with resources that can help. We work with people and organizations around the world to develop support options for people posting about suicide on Facebook, including reaching out to a friend, contacting help lines and reading tips about things they can do in that moment.</p> </blockquote> <p>Toward the end of its post, Facebook acknowledged that it hadn&rsquo;t yet had time to discover &ldquo;all the answers&rdquo; &ndash; though the company recently pledged $1 million toward research to better understand the relationship between media technologies, youth development and well-being to determine how Facebook has affected the attention spans of its users.</p> <p>While Palihapitiya later walked back his assertion that Facebook is &ldquo;ripping apart the fabric of how society works&rdquo; after being brutally <a href="http://www.businessinsider.com/former-facebook-exec-adds-context-to-social-media-criticism-2017-12">flamed on Twitter for his purported hypocrisy,</a> the notion that Facebook is making its users sick and miserable is certainly nothing new.</p> <p>As we pointed out in August, even though post-Millennials are safer, physically, than adolescents have ever been. <a href="http://www.zerohedge.com/news/2017-08-06/more-lonely-less-sex-fewer-friends-have-smartphones-destroyed-generation">Social media has pushed them to the brink of a mental health crisis.</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="573" height="291" alt="" src="http://www.zerohedge.com/sites/default/files/images/user245717/imageroot/2017.12.15chamath.JPG?1513429995" /> </div> </div> </div> http://www.zerohedge.com/news/2017-12-16/facebook-really-bad-you-researchers-say#comments Carnegie Mellon University Chamath Palihapitiya Computing Cornell Criticism of Facebook Digital media Facebook Facebook Beacon media technologies Michigan Social information processing Social media Social networking services Social software Software Technology Twitter Twitter University Of Michigan University of Michigan Yale Sat, 16 Dec 2017 14:56:13 +0000 Tyler Durden 609270 at http://www.zerohedge.com