en Italian Officials Call For Investigation Of George Soros Supported NGO Migrant Fleet <p style="margin-top: 0px; margin-bottom: 28px; color: #1a1a1a; font-family: Merriweather, Georgia, serif; font-size: 16px;">Via <a href="" target="_blank">Disobedient Media</a></p> <p style="margin-top: 0px; margin-bottom: 28px; color: #1a1a1a; font-family: Merriweather, Georgia, serif; font-size: 16px;">Italian authorities are calling for monitoring of the funding of an NGO fleet bussing migrants into the EU from the North African coast after a report released the European Border and Coast Guard Agency&nbsp;has determined that&nbsp;the members of the fleet are acting as accomplices to people smugglers and directly contributing&nbsp;to the risk of death migrants face when attempting to enter the EU.</p> <p style="margin-top: 0px; margin-bottom: 28px; color: #1a1a1a; font-family: Merriweather, Georgia, serif; font-size: 16px;">The report from regulatory agency&nbsp;<a href="" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">Frontex</a>&nbsp;suggests that NGOs sponsoring &nbsp;ships in the fleet are now acting as veritable accomplices to people smugglers due to their service which, in effect, provides a reliable shuttle service for migrants from North Africa to Italy. The fleet lowers smugglers' costs, as it all but eliminates the need to procure seaworthy vessels capable making a full voyage across the Mediterranean to the European coastline. Traffickers are also able to operate with much less risk of arrest by European law enforcement officers. Frontex specifically noted that traffickers have intentionally sought to alter their strategy,&nbsp;sending&nbsp;their vessels to ships run by the NGO fleet rather than the Italian and EU military.</p> <p style="margin-top: 0px; margin-bottom: 28px; color: #1a1a1a; font-family: Merriweather, Georgia, serif; font-size: 16px;">On March 25th, 2017, Italian news source&nbsp;<a href="" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">Il Giornale</a>&nbsp;carried remarks from Carmelo Zuccaro, the&nbsp;chief prosecutor of Catania (Sicily) calling for monitoring of the funding behind the NGO groups engaged in operating the migrant fleet. He stated that "the facilitation of illegal immigration is a punishable offense regardless of the intention.” While it is not a crime to&nbsp;enter&nbsp;the waters of a foreign country and pick them migrants, NGOs are supposed to land them at the nearest port of call, which would have been somewhere along the North African coast instead of in Italy.&nbsp;The chief prosecutor also noted that Italy is investigating Islamic radicalization occurring in prisons and camps where immigrants are hired off the books.</p> <p style="margin-top: 0px; margin-bottom: 28px; color: #1a1a1a; font-family: Merriweather, Georgia, serif; font-size: 16px;">Italy has for some months been reeling under the pressure of massive numbers of migrants who have been moving from North Africa into the southern states of the European Union. In December 2016,&nbsp;<a href="" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">The Express</a>&nbsp;cited comments made by Virginia Raggi, the mayor of Vatican City, stating that Rome was on the verge of a "war" between migrants and poor Italians. The wave of migrants has also caused issues in southern Italy, where the&nbsp;<a href="" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">Sicilian Cosa Nostra</a>&nbsp;has declared a "war on migrants" last year amid reports that the Italian mafia had begun fighting with North African crime gangs who entered the EU among migrant populations.</p> <div class="mceTemp" style="color: #1a1a1a; font-family: Merriweather, Georgia, serif; font-size: 16px;"> <dl id="attachment_2132" class="wp-caption aligncenter" style="margin-right: auto; margin-bottom: 28px; margin-left: auto; max-width: 100%; clear: both; background-color: transparent; border-style: none; text-align: inherit; width: 634px;"> <dt class="wp-caption-dt" style="font-weight: bold;"><img src="" width="634" height="357" style="height: auto; max-width: 100%; vertical-align: middle; display: block;" class="wp-image-2132 size-full" /></dt> <dd class="wp-caption-dd" style="margin-bottom: 0px; margin-left: 0px; font-size: 13px; padding-top: 7px; color: #686868; font-style: italic; line-height: 1.6153846154;">CCTV footage showing an Italian gang leader, Emanuele Rubino, retrieve a handgun (circled) before shooting Gambian Yusapha Susso in a turf war last year</dd> </dl> </div> <p style="margin-top: 0px; margin-bottom: 28px; color: #1a1a1a; font-family: Merriweather, Georgia, serif; font-size: 16px;">In February 2016,&nbsp;<a href="" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">Disobedient Media</a>&nbsp;published research indicating that multiple ships operating in the fleet mentioned by Frontex are sponsored by NGO groups with financial ties to organizations run by George Soros and donors to Hillary Clinton.&nbsp;<a href="" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">Reports</a>&nbsp;have also emerged citing a study&nbsp;by counter-extremism group Quilliam which states that ISIS now controls the human trafficking scene in North Africa and is actively recruiting from the migrant population. In addition to acting as de facto accomplices of human traffickers, the NGO's criticized by Frontex may also be contributing to the&nbsp;<a href="" target="_blank" style="box-shadow: currentcolor 0px 1px 0px 0px; color: #007acc;">worsening terror situation</a>&nbsp;in Europe though their actions.</p> <div class="field field-type-filefield field-field-image-blog"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_blog" width="640" height="480" alt="" src="" /> </div> </div> </div> Cultural globalization Demography European Border and Coast Guard Agency European migrant crisis European Union European Union Frontex George Soros Government Human migration Illegal immigration Italy Mediterranean Non-governmental organization North Africa Politics Social Issues Southern Italy Sun, 26 Mar 2017 22:14:39 +0000 William Craddick 591782 at "Don't Say You Haven't Been Warned" <p><em><a href="">Authored by Jeffrey Miller via Miller&#39;s Market Musings,</a></em></p> <p><strong>So after a long period of basically no volatility, we finally got some - in a hurry.</strong>&nbsp; In case you were out, the S&amp;P 500 (SPX) finally had a down day of more than 1%.&nbsp; But that&rsquo;s not the real story.&nbsp; Look in bankland, where we have been cautious ever since the rip higher on the Trump Trade (lower taxes, higher rates, lower regulations).&nbsp; The KRX (KBW Regional Bank Index) fell over 5% on Tuesday - yes, the bank index took a dive of 5% in one day.&nbsp; And it didn&#39;t bounce.&nbsp; The SPY was up a bit on Wednesday, but marginally, while the dollar continued to weaken versus the Yen and Euro.&nbsp; The big questions being asked all revolve around whether the dip in the 10-year bond yield to under 2.40% is reflecting a weaker outlook for the Trump Trade, or, if it&#39;s just an unwind of a massive 10-year bond short after the Fed hike last week was perceived as dovish.&nbsp;&nbsp;?</p> <p><img alt="Picture" src="" style="height: 192px; width: 600px;" /></p> <p><em>All Calvin and Hobbes comics courtesy of Bill Watterson and Go Comics. Buy the books <a href="">here</a>.<br />&nbsp;</em><br /><strong>The mini-rally in the 10-year bond could be the proximate cause of the banks selling off, but that is a little too old school - that implies that what is driving these stocks right now is a focus on fundamentals.&nbsp;</strong> But as long-time readers know, fundamentals only matter in the very long term - in the short term, positioning, especially among the CTA/trend following/risk parity crowd, can become very important at inflection points.&nbsp; These funds all tend to been leaning in the same direction at the same time, in size, and are designed to pull down risk and then flip the other way quickly on a steep decline.&nbsp; In short, they are the embodiment of feedback loops that drove the big sell off in August 2015 and in early 2016.&nbsp; But...this time I think we could be in for a bigger shock.&nbsp;<strong> Just because the market didn&#39;t follow through to the downside after Tuesday doesn&#39;t mean we&#39;re done.</strong>&nbsp; Instead, this may be a preview of coming attractions, as the KRX falling 5% in a day is a warning sign, not an all clear sign.&nbsp; Because these funds can be easily spooked &ndash; especially on a hike.&nbsp;&nbsp;?</p> <p><img alt="Picture" src="" style="height: 194px; width: 600px;" /></p> <p><strong>The issue isn&rsquo;t that there are funds that trend-surf.&nbsp; </strong>The issue is that there are <strong>now a lot of them, and there has been a recent push into using these funds to &ldquo;hedge&rdquo; risk.</strong>&nbsp; The idea is that any downturn will evolve slowly enough for these funds to sell into it &ndash; which has happened in the past.&nbsp; But that was when the group was a lot smaller.&nbsp; A recent <a href="">Financial Times article</a> detailed how pervasive this has become. According to the article, clients of Pension Consulting Alliance (PCA) typically allocate 10-20% of their assets to a &ldquo;CRO program.&rdquo; What is a CRO program?&nbsp; &ldquo;Crisis Risk Offset.&rdquo; PCA apparently coined the term.&nbsp; Now, full disclosure: I know a few people who work at PCA and they are all great folks (and neighbors).&nbsp; This isn&rsquo;t about them. It&rsquo;s about allocating to momentum strategies in a size that may be too big to execute properly. &nbsp;Portfolio insurance anyone?&nbsp; If you recall, that didn&rsquo;t work out well (see October 19th, 1987).&nbsp; Will that (down over 20% in a single day) happen again?&nbsp; Unlikely.&nbsp; But <strong>we could easily get a situation where a garden-variety 5% pullback in the SPX quickly morphs into a fast 10-15% decline, as funds de-lever their equity longs or flip short</strong>.&nbsp; See these charts of where we are in terms of equity exposure in various trend-following systems, and the size of these funds today.&nbsp;&nbsp;?</p> <div> <p><img alt="Picture" src="" style="height: 476px; width: 600px;" /></p> </div> <div> <p><img alt="Picture" src="" style="height: 265px; width: 600px;" /></p> </div> <p><u><strong>The problem with everyone leaning in one direction is that they scare easily.</strong></u>&nbsp; When realized volatility has been near all-time lows, as it has been in recent months, the simpler versions of these strategies view assets as less risky, so they lever them up.&nbsp; What the models fail to capture is the speed with which volatility can return.&nbsp; If volatility slowly creeps back up, then the models work fine.&nbsp; <u><strong>But if it suddenly spikes higher, the models fall apart, other investors quickly de-risk, and everyone is up all night looking for ghosts.&nbsp; Don&rsquo;t say you haven&rsquo;t been warned.&nbsp;?</strong></u></p> <div> <p><img alt="Picture" src="" style="height: 189px; width: 599px;" /></p> </div> <p><strong>This was one of the weirder weeks I&rsquo;ve seen in awhile.</strong> Various proxies for U.S. interest rates were bouncing around based on each tweet and missive from D.C. about whether or not the new healthcare bill would pass.&nbsp; When the bill was first pulled on Thursday, U.S. stocks fell, and rate proxies reacted as if all of the Trump agenda was in trouble (Trump policies are viewed as inflationary, so rates move up when he&rsquo;s doing well and down when he&rsquo;s not).&nbsp; <strong>Look at the Yen this week &ndash; every time the Trump agenda looked vulnerable, it rallied. </strong>&nbsp;And then that relationship quickly fell apart at the end of the day on Friday.&nbsp; When the healthcare bill got pulled for good Friday, it took about 5 minutes for the narrative to shift from Trump failed to now tax cuts can happen sooner rather than later, and so the Yen fell sharply.&nbsp; This is the world we live in today &ndash; traders are making up new and different reasons to scare themselves daily.&nbsp; Should we care?&nbsp; I&rsquo;d say no, except we&rsquo;re in unstable times (see the 5% selloff in the KRX on Tuesday for proof), and <strong>with lots of money in passive funds, ETFs and trend-following strategies, it won&rsquo;t take a lot to get the markets heading down fast.</strong></p> <div> <p><img alt="Picture" src="" style="height: 192px; width: 600px;" /></p> </div> <p><u><em><strong>So what will be the catalyst to cause more than a 1% sell-off in the SPX?&nbsp; While everyone is fixated with the non-bill in D.C., I think they are missing the big risk in the market, which is only getting bigger by the day.&nbsp;</strong></em></u> Long-time readers can guess where this is going.&nbsp; <u><strong>That&rsquo;s right &ndash; China</strong></u>.&nbsp; While we&rsquo;ve been distracted in the U.S., China has been raising its equivalent of the Fed Funds rate and trying to stem a credit bubble there from ballooning out of control, while at the same time trying to make sure that if they do succeed in popping the bubble, it deflates slowly.&nbsp; Good luck with that.&nbsp; I&rsquo;m not saying they won&rsquo;t be able to do it.&nbsp; I&rsquo;m just saying that no country has ever pulled it off before.&nbsp; The borrowing rates for their non-bank financial institutions (NBFIs) are rocketing higher (see the chart below) as they scramble for funds.&nbsp; Evidently, the popular thing for these NBFIs to do is lend very long-term into risky ventures in order to generate higher yields, but borrow very short-term (under a year) because the funding is cheaper.&nbsp; If this sounds just like our S&amp;L crisis, version 2.0, you&rsquo;d be correct.&nbsp; I would have thought there are some things the Chinese may have wanted to avoid copying from the U.S., but apparently they&rsquo;ll have to learn that lesson for themselves.<br />&nbsp;<br />Take a look at the charts below.&nbsp; <strong>You&rsquo;re actually seeing defaults in China occur, and at an increasing rate</strong> (albeit from zero, as extend and pretend is the national motto in China, where everything is always awesome &ndash; it is always awesome, right?).&nbsp; Remember, you&rsquo;re also seeing short-term repo rates spiking.&nbsp; A sign of renewed growth and inflation fears?&nbsp;&nbsp; Ah, no.&nbsp; It&rsquo;s a sign of stress in the funding markets and increasing counterparty risks.&nbsp; <u><strong>Put another way, credit is starting to fray in China right after the biggest increase in debt in the history of the world.&nbsp;&nbsp;?</strong></u></p> <div> <p><img alt="Picture" src="" style="height: 463px; width: 600px;" /></p> </div> <div> <p><img alt="Picture" src="" style="height: 443px; width: 600px;" /></p> </div> <p><u><strong>How will it end?</strong></u> I think Calvin has it pretty well figured out in the below comic strip.</p> <div> <p><img alt="Picture" src="" style="height: 193px; width: 599px;" /></p> </div> <p>?So to recap: <em><strong>the question investors need to ask themselves is what will happen if China&rsquo;s issues start to manifest themselves in global markets (remember August 2015?</strong></em>&nbsp; Me too.&nbsp; We&rsquo;re all in this together). The combination of large risk-parity funds and CTAs being quite long equities at the exact moment that China&rsquo;s credit bubble is starting to show signs of stress could end quite badly.&nbsp; The pension funds that have hired CTAs to sell into the next selloff will exacerbate what would have in the past been a normal correction.&nbsp; <em><strong>And when retail investors who have been relentlessly told to invest their money in long-only index funds or ETFs wake up to a market that is down 10%, 15%, or 20% fast, are they going to hold on, or even buy more, or are they going to realize that their ship is just a plank, and decide to swim for shore while they can?</strong></em> &nbsp;If history is a guide, we&rsquo;re going to see lots of investors making a swim for it.&nbsp;&nbsp;?</p> <div> <p><img alt="Picture" src="" style="height: 191px; width: 601px;" /></p> </div> <p>*&nbsp; *&nbsp; *</p> <p>This week&rsquo;s Trading Rules:</p> <ul> <li>Beware of consultants bearing models.&nbsp; They usually work until they don&rsquo;t.</li> <li>Credit leads equities. &nbsp;When credit weakens, play defense.</li> </ul> <p>At the end of our last letter, we wrote, &ldquo;The market is fully-valued and is priced for Trump to get what he wants.&nbsp; We&rsquo;re holding cash in case he, and the market, are disappointed.&rdquo;&nbsp; Now we&rsquo;re also fully hedged and short high yield bonds. &nbsp;Can markets continue to power higher?&nbsp; Of course.&nbsp; But with hedging costs still very low, valuations extremely stretched, credit weakening in China (and in the U.S. in auto loans), at the same time the market structure is particularly fragile, not hedging would be irresponsible.&nbsp; <u><strong>Do the right thing.&nbsp; Get some hedges on. </strong></u></p> <p>SPY Trading Levels: &nbsp;<em><strong>&nbsp;Volatility remains low, but is moving higher.&nbsp; Be careful out there.</strong></em></p> <p>This week&rsquo;s levels:</p> <ul> <li><strong>Resistance</strong>: This little selloff has created some resistance just above the current price, with a lot more at 236 and then 238.&nbsp;</li> <li><strong>Support</strong>: 228/229 is the first level.&nbsp; Then a drop little at 221/222, then 218/219, then a lot at 213/215.&nbsp; After that it&rsquo;s 209. &nbsp;That said, on a move of more than 2%, expect selling to accelerate.</li> </ul> <p>Positions: Net neutral stocks (both long and short stocks). Short SPY, HYG and other ETFs. Long put options on SPY and other market ETFs.</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="130" height="124" alt="" src="" /> </div> </div> </div> Bank Index Bond Business China Economy Fail Finance Financial history of the Dutch Republic Financial services High Yield High-yield debt Investment Mathematical finance Money Non-bank financial institution S&P 500 SPY Technical analysis Trading Rules Trend following US Federal Reserve Volatility Volatility Yen Sun, 26 Mar 2017 22:10:00 +0000 Tyler Durden 591773 at Mnuchin "Not Worried" About Robotization Of America's Workforce Despite Shocking New Report <p>Treasury Secretary Steven<strong> Mnuchin said Friday that he wasn&#39;t worried</strong> about artificial intelligence taking over American jobs. However, on the same day, a <a href="">new report by PwC </a>showed that <strong>more than a third of U.S. jobs could be at &quot;high risk&quot; of automation</strong> by the early 2030s, a percentage that&rsquo;s greater than in Britain, Germany and Japan.</p> <p>It said that<strong> in the U.S., 38% of jobs could be at risk of automation,</strong> compared with 30% in Britain, 35% in Germany and 21% in Japan.</p> <p><a href=""><img height="318" src="" width="600" /></a></p> <p><a href="">As The LA Times reports,</a> the analysis emphasized that its estimates are based on the anticipated capabilities of robotics and artificial intelligence, and that the <strong>pace and direction of technological progress are &quot;uncertain.&quot;</strong></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>The main reason is not that the U.S. has more jobs in sectors that are universally ripe for automation, the report says; rather, it&rsquo;s that<strong> more U.S. jobs in certain sectors are potentially vulnerable than, say, British jobs in the same sectors.</strong></p> <p>&nbsp;</p> <p>For example, the report says the financial and insurance sector has much higher possibility of automation in the U.S. than in Britain. That&rsquo;s <strong>because, it says, American finance workers are less educated than British ones.</strong></p> <p>&nbsp;</p> <p>While London finance employees work in international markets, their U.S. counterparts focus more on the domestic retail market, and workers &ldquo;do not need to have the same educational levels,&rdquo; the report said. <strong>Jobs that require less education are at higher potential risk of automation</strong>, according to the report.</p> <p>Other industries that could be at <strong>high risk include hospitality and food service and transportation and storage.</strong></p> </blockquote> <p>Still the report does have a small silver lining, noting that<strong> robots won&rsquo;t necessarily replace so many human workers.</strong> The report highlights several economic, legal and regulatory hurdles that could prevent automation, even in jobs where it would be technologically feasible. Automation could end up creating some jobs, the PwC report said. Greater robotic productivity could boost the incomes of those behind the new technology, which Hawksworth said could flow into the larger economy. And that appears to be the same perspective that Treasury Secretary Steven Mnuchin has as he said on Friday that he wasn&rsquo;t worried about artificial intelligence taking over American jobs.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>&ldquo;I think we&rsquo;re so far away from that that it&rsquo;s not even on my radar screen,&rdquo; </strong>he told Axios Media. &ldquo;I think it&rsquo;s 50 or 100 more years.&rdquo;</p> <p>&nbsp;</p> <p>Mnuchin also said automation would enable human workers to do more productive jobs at higher wages.</p> <p>&nbsp;</p> <p>&ldquo;It&rsquo;s taken jobs that are low-paying,&rdquo; he said. <strong>&ldquo;We need to make sure we are investing in education and training for the American worker.&quot;</strong></p> </blockquote> <p>Which is what PwC concludes, noting that there is a strong case for increased investment in lifelong vocational education and training to help people adapt to increased automation, warning that <strong>universal basic income schemes may also be considered, but suffer from potential problems in terms of affordability and adverse effects on work incentives</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="946" height="501" alt="" src="" /> </div> </div> </div> artificial intelligence Automation Business Economy of the United States Germany Japan Labor Mnuchin PricewaterhouseCoopers Robot Steven Mnuchin Technology Sun, 26 Mar 2017 21:45:00 +0000 Tyler Durden 591772 at Your Pension Will Be At The Center Of America's Next Financial Crisis <p dir="ltr"><em><a href="">Authored by Jeff Reeves via The Hill</a></em></p> <p>I’m not a fan of the “greed is good” mentality of Wall Street investment firms. <strong>But the next financial crisis that rocks America won’t be driven by bankers behaving badly. It will in fact be driven by pension funds that cannot pay out what they promised to retirees.</strong> According to one pension advocacy organization, nearly <a href="">1 million working and retired Americans</a> are covered by pension plans at the risk of collapse.</p> <p dir="ltr">The looming pension crisis is not limited by geography or economic focus. These including former public employees, such as members of South Carolina’s government pension plan, which covers roughly <a href="">550,000 people</a> — one out of nine state residents — and is a staggering <a href="">$24.1 billion in the red</a>. These include former blue collar workers such as roughly <a href="">100,000 coal miners</a> who face serious cuts in pension payments and health coverage thanks to a nearly <a href="">$6 billion shortfall</a> in the plan for the United Mine Workers of America. <strong>And when the bill comes due, we will all be in very big trouble.</strong></p> <p dir="ltr">It’s bad enough to consider the philosophical fallout here, with reneging on the promise of a pension and thus causing even more distrust of bankers and retirement planners. But I’m speaking about a cold, numbers-based perspective that causes a drag on many parts of the American economy. Consider the following.</p> <p dir="ltr"><strong>Pensioners have no flexibility</strong></p> <p dir="ltr">According to a Bureau of Labor Statistics <a href="">report from 2015</a>, <strong>the average household income of someone older than age 75 is $34,097 and their average expenses exceed that slightly, at $34,382.</strong> It is not an exaggeration, then, to say that even a modest reduction in retirement income makes the typical budget of a 75-year-old unsustainable — even when the average budget is far from luxurious at current levels. This inflexibility is a hard financial reality of someone who is no longer able to work and is reliant on means other than labor to make ends meet.</p> <p dir="ltr"><strong>Social Security is in a tight spot</strong></p> <p dir="ltr">So who will step up to support these former pensioners? Perhaps the government, via Social Security, except that program itself is in crisis and will see its trust fund go to zero just 17 years from now, in 2034, based on the <a href="">current structure of the program.</a> If millions of pensions go bust and retirees have no other savings to fall back on, it will be nigh impossible to cut benefits or reduce the drag on this program. But won’t a pension collapse mean we desperately need Social Security, even in an imperfect form, well beyond 2034?</p> <p dir="ltr"><img src="" alt="Pensions" width="600" height="428" /></p> <p dir="ltr">&nbsp;</p> <p dir="ltr"><strong>The guaranty is no solution</strong></p> <p dir="ltr">There is an organization, the Pension Benefit Guaranty Corporation (PBGC), which is meant to insure pensions against failure. However, it was created in 1974 as part of a host of financial reforms and is far from a perfect solution, primarily because it is funded by premiums from defined-benefit plan sponsors and assets seized from former plan sponsors that have entered bankruptcy.</p> <p dir="ltr">What happens when a handful of troubled pension funds turns into dozens or hundreds? <strong>Remember, the PBGC guarantees a certain amount that is decidedly lower than your full pension — as members of the Road Carriers 707 pension fund learned when the group “protected” their pensions by helping to pay benefits, which had been reduced from $1,313 per month to $570.</strong> That’s better than zero, but hardly encouraging.</p> <p dir="ltr">This is not about helping Baby Boomers fund an annual cruise to the Caribbean. Older, low-income pensioners are not saving their money. Instead, they’re spending it on necessities such as food, housing, healthcare and transportation. That means every penny you reduce from their budget means a penny in spending that is removed from the U.S. economy.</p> <p dir="ltr">Anyone who has taken Econ 101 knows about the “multiplier effect” where $1 in extra spending can produce a much larger amount of economic activity as that dollar circulates around businesses, consumers and banks … or in this case, how $1 less in spending causes a an equally powerful cascade of negative consequences.</p> <p dir="ltr">By helping ward against a pension crisis, America will be protecting its economy for everyone — plain and simple. But that requires some tough decisions on all sides. <strong>For instance, the U.S. Treasury denied a cut to New York Teamsters’ pension plan that was proposed last year. But now the fund is on the brink of collapse, and its recipients are facing benefits that are in some cases one-third what they were <a href="">15 years ago</a>.</strong></p> <p dir="ltr"><strong>Like Social Security, current workers can’t contribute enough to offset the big obligations owed to retirees. </strong>And as with the flagship entitlement program, it’s up to regulators and legislators to step in — even when it may not be easy — in order to keep the system from collapsing. Let’s hope they make both pension reform and Social Security reform a priority in the near future.</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="998" height="522" alt="" src="" /> </div> </div> </div> Bradley Belt Bureau of Labor Statistics Business Caribbean Charles E.F. Millard Economy Employee Retirement Income Security Act Finance Financial services Labor Money Pension Pension Benefit Guaranty Corporation Pension Crisis Pensions Reality Retirement Social Issues Social Security South Carolina’s government U.S. Treasury Sun, 26 Mar 2017 21:20:00 +0000 Tyler Durden 591725 at GOP Healthcare Bill Rebranding Begins <p>Presented with no comment...</p> <p>&nbsp;</p> <p><a href=""><img src="" width="600" height="456" /></a></p> <p><a href=""><em>Source:</em></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="684" height="520" alt="" src="" /> </div> </div> </div> Comment Computing Conservatism in the United States Entertainment Politics of the United States Technology The Heritage Foundation Townhall Sun, 26 Mar 2017 21:00:00 +0000 Tyler Durden 591702 at Trump = Obama = Bush = Clinton On 4 Core Issues <p><em>On a <a href="" title="superficial level">superficial level</a>, Trump and Bush couldn&rsquo;t be more different from Clinton and Obama.&nbsp; Indeed, pollsters say that many people voted for Trump <a href="" target="_blank" title="because">because</a> they <a href="" title="wanted change">wanted change</a> &hellip; Just like they voted for Obama because he promised &ldquo;hope and change&rdquo; from Bush-era policies.</em></p> <p><em>But beneath the surface, Trump, Obama, Bush and Clinton are all very similar on 4 <strong>core</strong> issues.</em></p> <h3 style="color: #000099;">Moar War</h3> <p>Bush <a href="" title="intentionally lied">intentionally lied</a> us into the Iraq war &hellip; a war which had <a href="" title="no relation">no relation</a> with U.S. security or defense.</p> <p>Clinton and Obama <a href="" title="intentionally lied ">intentionally lied </a>us into various &ldquo;humanitarian wars&rdquo; &hellip; which had nothing to do with our security or defense.</p> <p>And the same idiots who lied us into the Iraq war are now trying to lie us into a cold (or maybe even hot) war <a href="" title="with Russia">with Russia</a>.</p> <p>And what about Trump?</p> <p>He campaigned on peace and non-interventionism &hellip;</p> <p>But he&rsquo;s already <a href="" title="ramped up">ramped up</a> the war in Syria.</p> <p>And the <a href="" target="_blank" title="war in Yemen">war in Yemen</a>. &hellip; where the U.S. and Saudi Arabia are committing <a href="" target="_blank" title="committing repeated war crimes">war crimes</a>.</p> <p>And he&rsquo;s already increased drone strikes by <a href="" target="_blank" title="432%">432%</a>.</p> <p>And Trump&rsquo;s top advisor is predicting <a href="" target="_blank" title="war with China and Russia">war with China and Russia</a>. He <a href="" target="_blank" title="said">said</a>:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>We&rsquo;re going to war in the South China Sea &hellip; no doubt</p> </blockquote> <p>So it doesn&rsquo;t look like peace is going to break out any time soon.</p> <p>And sadly, top experts say the geopolitical policies pursued by Trump &ndash; which are very similar to those pursued by Obama, Bush and Clinton &ndash; will lead to <a href="" title="more terrorism">more terrorism</a>.</p> <h3 style="color: #000099;">Lap Dogs for Wall Street &hellip; Making the Rich Richer</h3> <p>Obama, Bush and Clinton all pushed economic policies which made the rich richer, and the poor poorer.</p> <p>Bush and Obama <a href="" title="bailed out the big banks, threw fistfuls of money at the banksters, and otherwise rewarded Wall Street and penalized Main Street">bailed out the big banks, threw fistfuls of money at the banksters, and otherwise rewarded Wall Street and penalized Main Street</a>.</p> <p>Clinton <a href="" target="_blank" title="repealed">repealed</a> the Depression-era law which separated regular deposit banking and speculation (Glass-Steagall), <a href="" target="_blank" title="allowed">allowed</a> the giant banks to grow into mega-banks, and acted as a <a href="" target="_blank" title="cheerleader">cheerleader</a> for unregulated derivatives. And Clinton &ndash; like Bush and Obama &ndash; decided that white collar financial fraud <a href="" title="didn’t exist">didn&rsquo;t exist</a>, or at least <a href="" title="shouldn’t be prosecuted">shouldn&rsquo;t be prosecuted</a>.</p> <p>What&rsquo;s the effect of these policies?</p> <p>Rick Baum <a href="" target="_blank" title="notes">notes</a>, using official U.S. governments statistics, that inequality steadily increased under all 3 presidents:</p> <p><a href=""><img alt="Inequality Clinton Bush Obama" class="aligncenter size-full wp-image-66279" height="410.083832336" src="" width="780" /></a></p> <p>Real wages <a href="" title="plummeted">plummeted</a> through the Clinton, Bush and Obama administrations.</p> <p>What about Trump?</p> <p>He&rsquo;s appointed the <a href="" title="same">same</a> <a href="" target="_blank" title="old">old</a> bankster cronies.&nbsp; Nothing will change. (And unfortunately, it&rsquo;s <a href="" title="not too early"><em>not</em> too early</a> to criticize a new president.)</p> <h3 style="color: #000099;">Spying On Americans</h3> <p>The NSA&rsquo;s mass surveillance on Americans started by <a href="" title="1999 or earlier">1999 or earlier</a> &hellip; under the Clinton administration.</p> <p>3 months before 9/11, the head of the NSA admitted that the NSA was collecting so much information from spying that it was <a href="" title="drowning in too much data">drowning in too much data</a>.</p> <p>Mass surveillance expanded under Bush &hellip; and then <a href="" title="even more under Obama">even more under Obama</a>.</p> <p>It&rsquo;s gotten to the point that the government is <a href="" title="spying on virtually all of our electronic communications and transactions">spying on virtually all of our electronic communications and transactions</a>.</p> <p>And Trump?</p> <p>Given that he&rsquo;s called for whistleblowers like Snowden and Assange to be executed for treason, and <a href="" target="_blank" title="quickly implemented gag orders">quickly implemented gag orders</a> as soon as he took office, he is almost certain to continue the expansion of mass surveillance on the American people.</p> <p>In other words, a president who severely punishes anyone trying to reveal the extent of spying on Americans probably has no intention of reigning it in.</p> <h3 style="color: #000099;">Supporting Dictators Who Support Terrorism</h3> <p>Saudi Arabia is the <a href="" title="world’s largest sponsor">world&rsquo;s largest sponsor</a> of radical Islamic terrorists. The Saudis have <a href="" title="backed ISIS">backed ISIS</a> and many other brutal terrorist groups. And the most pro-ISIS tweets allegedly <a href="" target="_blank" title="come from Saudi Arabia">come from Saudi Arabia</a>.</p> <p>According to sworn declarations from a 9/11 Commissioner and the Co-Chair of the Congressional Inquiry Into 9/11, the Saudi government <a href="" title="backed the 9/11 hijackers">backed the 9/11 hijackers</a> (see section VII for details). And declassified documents only <a href="" title="amplify those connections">amplify those connections</a>. And the new Saudi king has <a href="" title="ties">ties</a> to Al Qaeda, Bin Laden and Islamic terrorism.</p> <p>Saudi Arabia is the hotbed of the most radical Muslim terrorists in the world: the <a href="" title="Salafis, who are heavily concentrated in Saudi Arabia">Salafis</a> (both <a href="" target="_blank" title="ISIS and Al Qaeda are Salafis">ISIS and Al Qaeda are Salafis</a>).</p> <p>And the <a href="" title="Saudis – with U.S. support – back">Saudis &ndash; with U.S. support &ndash; back</a> the radical &ldquo;madrassas&rdquo; in which Islamic radicalism was spread.</p> <p>And yet the U.S. has been supporting the Saudis militarily, with <a href="" title="NSA intelligence">NSA intelligence</a> and in every other way possible through the Clinton, Bush and Obama administrations.</p> <p>Trump?</p> <p>He&rsquo;s selling them <a href="" title="massive amounts of arms">massive amounts of arms</a>, <a href="" title="kept them off of the lis">keeping them off of the lis</a>t of restricted countries for immigration, and supporting Saudi <a href="" target="_blank" title="committing repeated war crimes">war crimes</a> in Yemen.</p> <p>It appears that the voters have been played &hellip; again.</p> <p><em>Postscript:&nbsp; If you think that the presidents are more different than we&rsquo;re giving them credit for, then you must conclude that they have been overridden by other forces. In that case, you may wish to consider consider whether the Deep State and <a href="" title="big banks">big banks</a> have more power than democratically-elected officials.</em></p> al-Qaeda American people of German descent Anti-Americanism Barack Obama China Clinton administration Donald Trump George W. Bush Iraq Iraq War ISIS Main Street Military history Military history by country Osama bin Laden Politics Saudi Arabia Saudi Arabia Saudi government South China United States War War on Terror Sun, 26 Mar 2017 20:53:04 +0000 George Washington 591780 at Doubt Rises As Market Liquidity Collapses <p>As the GOP&#39;s healthcare reform bill was pulled on Friday, the major stock indices rebounded in a fit of confusion, helped by<strong> the collapse in market liquidity to the lowest levels of 2017</strong>...</p> <p><a href=""><img height="629" src="" width="600" /></a></p> <p>However, <a href="">as NorthmanTrader&#39;s Sven Henrich writes,</a> nothing has been solved (or even addressed). Our country, whether people are willing to admit it or not, has deep structural problems that require deep thinking and broad support to solve them.</p> <p>For decades both parties have presided over the emergence of these structural problems and their only solution has always been to throw more debt at it. I said it before the election and I say it again: Neither&nbsp;candidate and neither party has shown any willingness or capability to address any of the structural problems we face.</p> <p><strong>They market solutions to fight the symptoms, but not the root causes and in the end accomplish little.</strong></p> <p>Under Republicans and Bush we ended up with a doubling of the debt and the financial crisis in 2008.&nbsp;Then Democrats presided over another $10B in debt accumulation and $4 trillion in central bank balance sheet expansion&nbsp;with a meager rise in real wages and consumers taking on record debt while all income and wealth benefits went to the top 1% resulting in&nbsp;vast further increases in wealth inequality. Yes things looked better on measures such as unemployment but it was paid for with massive accumulation of debt and artificially low&nbsp;rates. The election of Donald Trump under the banner of populism serves as evidence of the underlying discontentment.</p> <p>So now Republicans are back in charge and are claiming competence and a willingness to &ldquo;fix&rdquo; things. Really? &nbsp;Are they really?</p> <p>Take health care as an example.<strong> The promises given were outlandish,&nbsp;everyone will have coverage, premiums will go down, taxes will go down, Medicare will not get cut and it will be a &ldquo;beautiful picture&rdquo;. Sorry folks, but that&nbsp;was&nbsp;all nonsense. Aways has been and if you fell for it you got suckered again.</strong></p> <p>There is no magic bullet, there is no magic plan, there is only structural reality. And this structural reality says our demographic wave along with our for profit oriented health care system demand certain&nbsp;compromises.</p> <p>The health care industry is interested in profits first, everything else is secondary. Health care is the field they are in, but they are in the business of profit. Hence, while the developed world has national health care systems with coverage for everyone the US does not. Never had and while Obamacare was a meager attempt at creating one it was fought in every way possible by industry lobbying groups who wanted to protect their profit margins. I get it. Covering people who are a net loss for the industry is counter to quarterly profits. Ultimately Obamacare ended up being a very flawed compromise, but it managed to get millions of uninsured to have insurance.</p> <p><strong>Indeed&nbsp;while the cost of health care is rising dramatically everywhere in the world it is the US were the costs of medications and treatments are more expensive than anywhere else in the world:</strong></p> <p><a href=""><img class="alignnone wp-image-29405" src=";h=266" style="width: 600px; height: 316px;" /></a></p> <p>There are many reasons for this, but I can tell you one contributing factor <span style="color: #ff0000;"><a href="" style="color: #ff0000;"><em><strong>is this:</strong></em></a></span></p> <p><a href=""><img class="alignnone wp-image-29406" src=";h=173" style="width: 601px; height: 205px;" /></a></p> <p><strong>Big time pig time</strong>. It used to be people entered the medical field&nbsp;because they actually wanted to help people in need. Some still do of course, but it&rsquo;s all about the mighty buck, especially for insurance companies. What is insurance at its root? It&rsquo;s to provide a coverage pool so people who are faced with an emergency don&rsquo;t end up getting ruined. Now it&rsquo;s about squeezing the most bucks out of people by avoiding paying out when possible and to not cover people who are at most risk. Basically making the most money while&nbsp;avoiding providing the services you advertise as much as possible. Swell.</p> <p><strong>The medical industry is difficult and problematic everywhere, but with its ballooned costs Americans pay much more than people with national health insurance systems and often enough can&rsquo;t claim they get a lot more&nbsp;as a result. </strong>Americans are faced wth an obesity and drug abuse crisis&nbsp;(legal and illegal) and life expectancies for certain age groups are actually regressing.&nbsp;Americans have not gotten healthier over the past few decades&nbsp;yet they spend more for health care and one could certainly make the case that these trends are intertwined.</p> <p>I use costs&nbsp;as an example and certainly the European health care system has its own issues. Demographics make it a big time challenge everywhere as it is.</p> <p>But the larger point is this: The US health care insurance system is a complex mess,&nbsp;it&rsquo;s pricey and the US being a country with a child poverty rate in excess of 20% has major issues in ensuring health care access to its citizens while professionals in the industry are enriching themselves in&nbsp;degrees many Europeans equivalents can only dream of. And let&rsquo;s be very clear: Access does not equate coverage. In fact, the system is so skewed economically&nbsp;that medical reasons&nbsp;are the number 1 cause of bankruptcy in the Unites States. Getting ill or falling victim to a disease can financially ruin you. A horrid&nbsp;reality about the US health care system. And sadly, many people are perfectly ok for others to suffer that fate.</p> <p>And with baby boomers retiring and getting old there is an avalanche of millions of older people requiring treatment and care for years&nbsp;to come further straining a system that is already vastly underfunded.</p> <p>And so, in context, what the new administration actually proposed was actually quite revealing in its intent. What was the intent? Well, precisely the opposite of the promises made. Premiums would go up big time for older people especially, Medicare would get cut by $880B, up to 24 million could&nbsp;lose insurance altogether and the notion of tax credits to use for people who have hardly any income is an intellectual insult. If you make only $20-25K a year (if that) you wouldn&rsquo;t&nbsp;even have enough taxable income to make use of the tax credit. It&rsquo;s all BS. That&rsquo;s the clear message. <strong>There are many articles on all this and the CBO&nbsp;analyzed&nbsp;the consequences of the&nbsp;bill proposal, but the gap between the promises made and the details offered instead is<a href=""><span style="color: #ff0000;"><em>&nbsp;pretty glaringly wide</em></span></a>.</strong></p> <p>Was what was proposed better than what existed before? I took a shot at the answer <a href=""><span style="color: #ff0000;"><em><strong>here.</strong></em></span></a></p> <p>Who would have benefitted? The insurance industry&nbsp;and of course the 1% who will see the most tax benefits from the reversion of Obamacare related taxes. Populism at its finest. Yet even this was not enough for certain forces in the Republican party.</p> <p><strong>And so this&nbsp;first attempt at major legislation by the new administration failed miserably. But this failure&nbsp;highlighted some important realities:</strong></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Republicans were not going to make it better for you, the citizen. And Americans realized&nbsp;this and hence they rejected it and&nbsp;consequently&nbsp;it created a big divide among Republicans.&nbsp;See, despite all the hate you see on the internet Americans are not stupid and they saw this health care bill was going to shaft them and they made their discontentment heard.</p> </blockquote> <p>And now the pressure to produce results will grow exponentially. After all the mid terms are coming next year and the survival instinct will start taking over.</p> <p><strong>Health care was the first big promise and it produced nothing and it was not going to structurally improve anything. If anything it would&rsquo;ve widened&nbsp;the wealth gap furthering its current form.</strong></p> <p>Now you&rsquo;ll hear a lot about tax cuts to come. It&rsquo;s the new QE carrot that&rsquo;s dangled in front of everybody.</p> <p>I have no idea how this will turn out, but know that before tax cuts can even be agreed upon there&rsquo;s this little issue about the debt ceiling and an actual budget with revenue projections and actual cuts that need to be hashed out.</p> <p>Currently the Treasury department keeps spending cash to keep the debt ceiling flat, but the Treasury department will run out of cash and Treasury Secretary Mnuchin is already on the record saying that it needs to be increased.</p> <p>His boss had some things to say about that very topic just a few years ago:</p> <p><a href=""><img class="alignnone size-medium wp-image-29251" src=";h=300" style="width: 600px; height: 659px;" /></a></p> <p><strong>If you haven&rsquo;t noticed by now there is an ever widening gap between rhetoric and reality.</strong> It&rsquo;s easy to make promises:</p> <blockquote class="twitter-tweet" data-lang="en"><p dir="ltr" lang="en">Do tax cut &amp; infrastructure related tweets carry the same currency? <a href=""></a></p> <p>&mdash; Sven Henrich (@NorthmanTrader) <a href="">March 24, 2017</a></p></blockquote> <script async src="//" charset="utf-8"></script><p>It&rsquo;s much harder to keep them, and the tweet above went after the core question raised in this post: Doubt.</p> <p>I&nbsp;don&rsquo;t know when and how people will realize that the promises where indeed <a href=""><em><strong><span style="color: #ff0000;">empty</span></strong></em></a>, but everything so far, from health care, tax cuts, etc. is all geared to even further widen the wealth gap that already exists and continues to widen. <em><u><strong>People have piled a lot of money into expensive stocks based on certain promises made&nbsp;including 4% GDP growth and &ldquo;massive&rdquo; tax cuts.&nbsp;I continue to believe that once reality sinks in people may develop second thoughts and doubt and there will be a lot of money trapped at very high P/E levels that will seek to get out.</strong></u></em></p> <p>I repeat: <strong>Neither party has shown&nbsp;a willingness or capability to address the big structural realities we face as a country.</strong> And to be fair the problems may only be solvable via massive realignment. But&nbsp;as long as low interest rates, courtesy of the Fed, are permitted to sustain artificial high debt loads both parties are&nbsp;able to get away with accomplishing&nbsp;little on the structural front.</p> <p>Ultimately the math will force their hands. And doubt, while not yet clearly present in equity markets, is already very much present in the polling:</p> <p><a href=""><img class="alignnone wp-image-29864" src=";h=265" style="width: 600px; height: 387px;" /></a></p> <p>My premise: <strong>You can&rsquo;t pass any broad based legislation benefitting the top 1% with this lack of broad based support.</strong> If anything, you need to be bold and reach across the isle in a big way to create policies that benefit the many and not the few.</p> <p>Yet I see zero evidence in&nbsp;the current political climate for any of this&nbsp;to happen or ever happening.</p> <p><strong>Instead all we see is drama of some sort every single day.</strong> I don&rsquo;t need to point it out, you know what I am talking about. But drama can serve a purpose. As long as everyone is engaged in talking about drama there is no time or need to talk about substance and real solutions. And hence drama becomes method. And ever more drama is needed to keep folks distracted from non&nbsp;existent&nbsp;substance. So I fully expect more of it to come.a</p> <p>In the <a href=""><span style="color: #ff0000;"><em><strong>Final Wave</strong></em></span></a> I described the latest charting evidence for why we believe we are in the final phase of the bull market.&nbsp;As I said at the beginning: Our country has&nbsp;deep structural problems that require deep thinking. Does anybody see evidence of deep thinking anywhere? Or even a debate on how to address them? Can a country solve its structural problems without an objective debate and&nbsp;well&nbsp;designed solutions to solve&nbsp;them?</p> <p>I doubt it.</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="248" height="148" alt="" src="" /> </div> </div> </div> 111th United States Congress Debt Ceiling Demographics Donald Trump Equity Markets ETC Health Health care in the United States Health care reform Health insurance Insurance Companies Internal Revenue Code Internal Revenue Service Medicare Medicare Medicare national health care Obamacare Omnibus legislation Patient Protection and Affordable Care Act Presidency of Barack Obama Reality Republican Party Social Issues Statutory law Treasury Department Twitter Twitter Unemployment US Federal Reserve Sun, 26 Mar 2017 20:35:24 +0000 Tyler Durden 591770 at This Is The Nightmare Scenario For The GOP: A $2 Trillion Funding "Hole" <p>When one strips away the partisan rhetoric and posturing, the practical impact of Friday's GOP failure to repeal Obamacare has a specific monetary impact: <strong>approximately $1 trillion. </strong></p> <p>Since the ObamaCare repeal bill would have eliminated most of the 2010 health law’s taxes, this would have lowered by a similar amount the revenue baseline for tax reform. Essentially, with the ObamaCare taxes gone, it would have been easier to pay for lowering tax rates. Now, if Republicans want to eliminate the ObamaCare taxes as part of tax reform and ensure the bill does not add to the deficit - which they need to do to assure Trump's reform process continues under Reconciliation, avoiding the need for 60 votes in the Senate - they will have to raise almost $1 trillion in revenue. </p> <p>In other words that - all else equal - is how much less tax cuts Trumps and the republicans will be able to pursue unless of course they somehow find a source of $1 trillion in tax revenue (or otherwise simply add to the budget deficit) to offset the Obamacare overhang.</p> <p>Considering Paul Ryan's statement on Friday, it appears that at least for the time being, Republicans would leave the ObamaCare taxes in place.&nbsp; “That just means the ObamaCare taxes stay with ObamaCare,” he said. “We’re going to go fix the rest of the tax code.” </p> <p>Ryan also pushed back on the idea that the setback on healthcare previews difficulties with other items on the legislative agenda&nbsp; “I don’t think this is prologue to other future things, because members realize there are other parts of our agenda that people have even more agreement on what to achieve,” he said. “We have even more agreement on the need and the nature of tax reform, on funding the government, on rebuilding the military, on securing the border.” </p> <p>While the failure to pass the healthcare bill makes tax reform harder, “it does not in any way make it impossible,” Ryan said. “We will proceed with tax reform, we will continue with tax reform." Earlier in the week, Treasury Secretary Steven Mnuchin said that the administration has been working on tax reform for two months and plans to release a plan in the near future. House Ways and Means Committee Chairman Kevin Brady added in a statement that Republicans on his panel “are moving full speed ahead with President Trump on the first pro-growth tax reform in a generation.” </p> <p>Still, quick action on legislation is unlikely; in fact while the market narrative changed on a dime last Friday, with traders now convincing themselves the delay of Obamacare means tax reform passes quicker, this is not the case. As Larry Lindsey, a former economic adviser for George W. Bush, told <a href="">CNBC's "Power Lunch" last Friday</a>, <strong>one of the "silliest" things he's heard from people is that the health-care proposal not passing will be good for Trump's tax reform. "Absolutely not," he added</strong>. </p> <p>A replacement for Obamacare "was necessary for budgetary reasons, for tax reform, because it was a revenue gainer," said Lindsey. Trump's goals for economic growth should also be questioned now, he warned.</p> <p>"They might move on to [tax reform] next, but when you have a president who can't deliver his own caucus, then the president's position will be weakened on all issues," Lindsey said. "<strong>If you're in Congress and you don't like something, you now have an example of how you can 'roll' the president."</strong></p> <p><strong>* * * <br /></strong></p> <p>But wait, there's more<strong>.</strong></p> <p>While the GOP will be hard pressed to find $1 trilion in offsetting savings or revenues, their headaches could be doubled if the proposed border adjustment tax fails to pass next. As a reminder, <strong>BAT is <a href="">expected to generate as much as $1.18 trillion</a> in offsetting revenues;</strong> should BAT no be DOA, that's another $1.2 trillion in potential government revenues that is gone.&nbsp; <strong></strong></p> <p><a href=""><img src="" width="500" height="230" /></a></p> <p>According to James Pethokoukis of the American Enterprise Institute of Economic Policy, the fact that the Republicans failed to pass a health-care reform bill <strong>makes the odds that they will pass a border adjustment provision much smaller, </strong>and "the odds of getting a bigger stimulus plan will drop, too", he told CNBC on Friday. Investors "won't get to see cuts to a 15 to 20 percent tax rate" in corporate and marginal tax rates such as those Trump has proposed, Pethokoukis added. Instead, it will likely be closer to what Obama worked toward — something closer to a 30 percent tax rate, he said. It raised the specter of more discontent among Trump's longtime supporters, considering he campaigned on that specific promise. </p> <p>Echoing this sentiment, Jared Bernstein, a senior fellow from the Center on Budget and Policy Priorities, said in an interview that tax reform and the health-care proposal were "intimately connected for precise reasons. Trump once suggested achieving growth of 2 to 4 percent, but this might look more like 1 to 2 percent now because of budgetary constraints, he added. Now, the government has less money available to hit "high revenue targets," Bernstein said.</p> <p>Summarizing the above, as a result of Friday's failure, <strong>the tax revenue "hole" Republicans have to fill now is at least $1 trillion bigger, and perhaps as large as $2.2 trillion. </strong></p> <p>* * * </p> <p>But wait, there's even more.</p> <p>As the <a href="">WSJ writes overnight</a>, in theory rewriting the tax code could be easier than revamping the whole health-care industry. Republicans pride themselves on ideological unity in favor of lower tax rates. And the stakes appear lower for Americans -- paperwork and money are far different than matters of life and death. "Tax reform is less visceral," said Rep. David Schweikert (R., Ariz.) "I can pull up a calculator and say 'it's this or this''s hard legislating to anecdotes and stories." </p> <p><strong>But scratch deeper, and the GOP quest for a full overhaul of the tax code is fraught with squabbles, procedural hurdles and difficult trade-offs. </strong>The party's failure on health care - after having seven years to prepare - shows how hard it is for Republicans to write complex legislation that attracts support from their moderate and conservative wings. "It's just a reminder of how incredibly hard transformational legislation is," said John Gimigliano, a former GOP congressional tax aide now at KPMG LLP.</p> <p>As the WSJ adds, to succeed, Republicans need to bridge at least three big gaps.</p> <ul> <li><strong>First, they need to balance competing desires to cut tax rates sharply and to slow the rise of national debt</strong>. Republican leaders in Congress say they want a revenue-neutral plan - one that brings in about as much money as today's tax system. Faster economic growth might help, but it doesn't fully bridge the divide. To accomplish revenue neutrality while sharply lowering rates, they will attempt to whack popular tax breaks, such as business deductions of interest on debt and individual state and local tax deductions. They will meet resistance from groups that want to protect those breaks.</li> <li><strong>Second, they have to reconcile alternate visions of what they are setting out to accomplish and who will benefit. </strong>Mr. Trump has said his priority is middle-class tax cuts for individuals. "Not the top 1%," said Mr. Mnuchin. House Speaker Paul Ryan (R., Wis.) and Ways and Means Chairman Kevin Brady (R., Texas) want an overhaul primarily focused on promoting economic growth, even if that means tax cuts that favor the very top of the income scale. </li> <li><strong>The plans they all campaigned on are tilted to the top, according to independent analyses. </strong>Third, the party is at odds over the Ryan-Brady plan for border adjustment - taxing imports and exempting exports. The Trump administration has been ambivalent and sometimes critical of the idea. Senate Republicans are outright cold to it. Messrs. Ryan and Brady say it's crucial because it provides about $1 trillion to offset corporate-tax-rate cuts and it discourages companies from shifting profits abroad.</li> </ul> <p>None of those divisions inside the GOP have been resolved yet, and dozens more are lurking, including debates over tax breaks for renewable energy, credits that aid low-income households, and the treatment of carried interest income for private-equity managers.</p> <p>"The notion that tax is easier than health is not borne out by the facts, " a Senate GOP aide told the WSJ. "Having discussed health care for seven years, Republicans were 75% in agreement on the policy. On tax, none of the foundational questions have been answered."</p> <p>In short, the market is about to be significantly - perhaps "<em>tremendously</em>" - disappointed once again, and quite soon. </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="1280" height="711" alt="" src="" /> </div> </div> </div> 111th United States Congress American Enterprise Institute of Economic Policy Budget Deficit Business Center on Budget and Policy Priorities Congress Donald Trump Economic policy of Donald Trump Internal Revenue Code Internal Revenue Service Kevin Brady National Debt None Obamacare Omnibus legislation Patient Protection and Affordable Care Act Political debates about the United States federal budget Politics Presidency of Barack Obama Republican Party Senate Social Issues Tax Tax reform Tax Revenue Trump Administration United States Ways and Means Committee Sun, 26 Mar 2017 19:49:09 +0000 Tyler Durden 591774 at Fresh Off an Apology to Comet Ping Pong, Alex Jones Promises 'Biggest Pizzagate Revelations' Yet <p>I suppose he was using <a href="">the public apology</a> as a honeypot to lure normies into this realm, only to later redpill them on John Podesta's affinity for walnut sauce. </p> <p>Jone is promising to bring the fire at 4:00ct. Or, he's just meming around -- attention whoring -- in order to sell some water filters to the masses.</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">I will release the biggest <a href="">#pizzagate</a> revelations ever at 4:00 CT <a href=""></a></p> <p>— Alex Jones (@RealAlexJones) <a href="">March 26, 2017</a></p></blockquote> <script src="//"></script><p>Either way, IT'S HAPPENING.</p> <p><strong>Content originally generated at <a href=""></a></strong></p> <p>&nbsp;</p> Alt-right Gene Happening Health Honeypot I Suppose Oral literature Personal life Pizzagate conspiracy theory Satsivi Sun, 26 Mar 2017 19:44:43 +0000 The_Real_Fly 591775 at "If They Want To Blow It Up, They Can" - How Republicans Can Hobble Healthcare Without Repeal <p>Following President Trump&#39;s clarifying tweet yesterday that &quot;Obamacare will explode&quot; on its own...</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">ObamaCare will explode and we will all get together and piece together a great healthcare plan for THE PEOPLE. Do not worry!</p> <p>&mdash; Donald J. Trump (@realDonaldTrump) <a href="">March 25, 2017</a></p></blockquote> <script src="//"></script><p>It is becoming increasingly clear that, even without the &#39;repeal&#39;, <strong>the Trump administration has already begun using its regulatory authority to water down less prominent aspects of Obamacare</strong>.</p> <p><a href=""><img alt="" src="" style="width: 459px; height: 346px;" /></a></p> <p>The Republicans&#39; failure to repeal Obamacare, at least for now, means it remains federal law. <a href="">But as Reuters reports, </a>newly confirmed Health and Human Services Secretary Tom <strong>Price&#39;s power resides in how to interpret that law, and which programs to emphasize and fund</strong>. Earlier this week, Price stalled the rollout of mandatory Medicare payment reform programs for heart attack treatment, bypass surgery and joint replacements finalized by the Obama administration in December.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Hospitals and physician groups have been counting on support from Medicare - the federal insurance program for the elderly and disabled - to continue driving payment reform policies built into Obamacare that reward doctors and hospitals for providing high quality care at a lower cost. The Obama Administration had committed to shifting half of all Medicare payments to these alternative payment models by 2018. Although he has voiced general support for innovative payment programs, Price has been a loud critic of mandatory federal programs that dictate how doctors should deliver healthcare.</p> <p>&nbsp;</p> <p><strong>Without the backing of Medicare, the biggest payer in the U.S. healthcare system which Price now oversees, the nascent payment reform movement could lose momentum,</strong> sidelining a transformation many experts believe is vital to reining in runaway U.S. healthcare spending. Price &quot;can&#39;t change the legislation, but of course he&#39;s supposed to implement it. He could impact it,&quot; said John Rother, chief executive of the National Coalition on Health Care, a broad alliance of healthcare stakeholders that has been lobbying the new administration for support of value-based care.</p> <p>&nbsp;</p> <p>The move Friday to pull the Republican bill only <strong>reinforces the risk to the existing law</strong>.</p> </blockquote> <p><em><strong>&quot;It seems that the Trump Administration now faces a choice whether to actively undermine the ACA or reshape it administratively,&quot; </strong></em>Larry Levitt, senior vice president at Kaiser Family Foundation, wrote on Twitter.</p> <p>As a painful reminder, the<strong> United States spends $3 trillion a year on healthcare</strong> - more by far than 10 other wealthy countries - yet has the<strong> lowest life expectancy and the highest infant mortality rate,</strong> according to a 2013 Commonwealth Fund report.</p> <p><a href=""><img height="214" src="" width="600" /></a></p> <p><strong>Health costs have soared thanks in part to the traditional way doctors and hospitals get paid, </strong>namely by receiving a fee for each service they provide. So the more advanced imaging tests a doctor orders or pricey procedures they perform, the more money he or she makes, regardless of whether the patient&#39;s health improves.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>&quot;We have a completely broken economy in healthcare,&quot;</strong> said Blair Childs, senior vice president at hospital purchasing group Premier Inc. &quot;Literally, all of the incentives in fee-for-service are for higher cost.&quot;</p> </blockquote> <p><a href=""><em>As Reuters concludes,</em></a> <strong>President Trump has already signed an executive order directing the HHS to begin unraveling Obamacare</strong>. In the early hours of his presidency, Trump directed government agencies to freeze regulations and take steps to weaken the healthcare law. The order directed departments to <strong>&quot;waive, defer, grant exemptions from, or delay the implementation&quot; of provisions that imposed fiscal burdens on states, companies or individuals. </strong>These moves were meant to minimize the costs and regulatory burdens imposed on states, private entities and individuals.</p> <p>David Cutler, the Harvard health economist who helped the Obama Administration shape the ACA, said Price could do all sorts of things to undermine the law.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong><em>&quot;If he wants to blow it up, he can,&quot; Cutler said in an email. But if they do, he added, &quot;they alone will own the failure.&quot;</em></strong></p> </blockquote> <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="459" height="346" alt="" src="" /> </div> </div> </div> American Presbyterians Commonwealth Fund Donald Trump Federal assistance in the United States Harvard Health Health care in the United States Healthcare reform in the United States Internal Revenue Code Medicare Medicare Medicare National Coalition on Health Care Obama Administration Obama administration Obamacare Patient Protection and Affordable Care Act Presidency of Lyndon B. Johnson Reuters Social Issues Statutory law Tom Price Trump Administration Twitter Twitter United States Sun, 26 Mar 2017 19:15:59 +0000 Tyler Durden 591767 at