http://www.zerohedge.com/fullrss2.xml/article/article/index.php/homes/item/21-does-the-mainstream-media-assist-wall-street-in-hypocritical-hypothesis-for-fear-of-the-next-paradigm-shift en Lead Poisoning In "Dozens Of California Communities" Worse Than Flint, Michigan http://www.zerohedge.com/news/2017-03-22/lead-poisoning-dozens-california-communities-worse-flint-michigan <p><strong>California, a state infamous for its environmental protections, including a <a href="http://www.zerohedge.com/news/2016-07-25/delta-tunnels">$65 billion tunnel project</a> being pushed by Governor Jerry Brown so as not to disrupt the habitat of a tiny, non-native fish species, may be facing a lead poisoning crisis more severe than Flint, Michigan</strong>.&nbsp; </p> <p>According to blood test data obtained by <a href="http://www.reuters.com/article/us-usa-lead-california-exclusive-idUSKBN16T18Y?feedType=RSS&amp;feedName=topNews">Reuters</a>, rates of childhood lead poisoning in several California cities surpass those measured in Flint, Michigan, with one Fresno locale showing rates nearly three times higher.</p> <p>In fact, in Fresno’s downtown 93701 zip code, nearly 14% of children tested showed lead levels at or above 5 micrograms per deciliter of blood, the Centers for Disease Control and Prevention’s current threshold for an elevated reading.&nbsp; As the CDC noted, no level of lead exposure is safe, but children who test that high warrant an immediate public health response.</p> <p>In all, per the map below, Reuters found at least 29 California neighborhoods where children had elevated lead tests at rates at least as high as in Flint.&nbsp;<strong> “It’s a widespread problem and we have to get a better idea of where the sources of exposure are,”</strong> said California Assembly member Bill Quirk, who chairs the state legislature’s Committee on Environmental Safety and Toxic Materials.&nbsp; </p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user230519/imageroot/2017/03/22/2017.03.22%20-%20CA%20Lead.JPG"><img src="http://www.zerohedge.com/sites/default/files/images/user230519/imageroot/2017/03/22/2017.03.22%20-%20CA%20Lead_0.JPG" alt="California" width="600" height="491" /></a></p> <p>&nbsp;</p> <p>And while elevated lead levels in children was found to be a fairly widespread issue across California, the poorer regions of the Central Valley where the majority of California's crops are grown were found to be particularly at risk.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>In all, <strong>Fresno County had nine zip code areas where high lead levels among children tested were at least as common as in Flint. </strong>The Reuters article in December documented nearly 3,000 locales nationwide with poisoning rates double those found in the Michigan city along the Flint River.</p> <p>&nbsp;</p> <p>The city of <strong>Fresno battles high poverty rates and problems with substandard housing, both risk factors for lead exposure.</strong> Some locals are also concerned with drinking water, after unsafe levels of lead were detected in at least 120 Fresno homes last year.</p> <p>&nbsp;</p> <p>Fresno County’s lead poisoning prevention program conducts outreach across the city, and a program health educator, Leticia Berber, says exposure remains too common.</p> <p>&nbsp;</p> <p>Still, she expressed surprise at the area’s high rate. “We haven’t looked at it that way compared to Flint,” Berber said.</p> </blockquote> <p>Of course, California’s Public Health Department attempted to downplay the results saying that comparisons between the state’s blood lead testing results and those from other states aren’t warranted. It said California tests children deemed most at risk for lead exposure, such as those enrolled in Medicaid or living in older housing.&nbsp;<strong> “Testing of at-risk children, and not all children, skews California results to higher percentage of children tested showing lead exposure,” </strong>the state said.</p> <p><strong>But, as Reuters points out, testing that targets at-risk children is common across much of the country.&nbsp; </strong></p> <p>Blood tests can’t determine the cause of a child’s exposure, but potential <strong>sources include crumbling old paint, contaminated soil, tainted drinking water or other lead hazards.</strong></p> <p><img src="http://www.zerohedge.com/sites/default/files/images/user230519/imageroot/2017/03/22/2017.03.22%20-%20CA%20Lead%202_0.JPG" alt="CA" width="600" height="339" /></p> <p>&nbsp;</p> <p>Meanwhile, elevated exposure levels were also found to be a problem in larger neighborhoods surrounding San Francisco and Los Angeles as well.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Lead exposure is common in other East Bay areas, including large parts of Oakland, and nearby Emeryville and Fremont, the new data shows.</p> <p>&nbsp;</p> <p><strong>In January, Oakland city council members introduced a resolution that would require property owners to obtain lead inspections and safety certifications before renting or selling houses and apartments built before 1978</strong>, when lead paint was banned.</p> <p>&nbsp;</p> <p>Emeryville's city council this month proposed an ordinance to require proof that contractors will adhere to Environmental Protection Agency standards – including safe lead paint removal practices – before they renovate older housing.</p> <p>&nbsp;</p> <p>Emeryville Vice Mayor John Bauters said paint exposure isn’t the only risk. A long history of heavy industry in the East Bay also left contaminated soil in some areas.</p> <p>&nbsp;</p> <p><strong>In the Los Angeles area, the prevalence of high blood lead tests reached 5 percent or above in at least four zip codes during 2012.</strong></p> <p>&nbsp;</p> <p>Since August, a sampling of children tested from the Los Angeles neighborhoods of Westlake, Koreatown and Pico Union revealed about 5 percent with high lead results, said Jeff Sanchez, a public health specialist at Impact Assessment, which helps Los Angeles run its lead poisoning prevention program.</p> <p>&nbsp;</p> <p><strong>“The more you look,” Sanchez said, “the more you find.”</strong></p> </blockquote> <p>Perhaps it's time to divert some of those funds allocated to protect endangered fish and bees to actually help the taxpayers of your state, Governor Brown.</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="706" height="406" alt="" src="http://www.zerohedge.com/sites/default/files/images/user230519/imageroot/2017.03.22%20-%20CA%20Lead%20-%20Tease.JPG?1490202000" /> </div> </div> </div> http://www.zerohedge.com/news/2017-03-22/lead-poisoning-dozens-california-communities-worse-flint-michigan#comments Biology California Assembly California’s Public Health Department Centers for Disease Control and Prevention Committee on Environmental Safety and Toxic Materials Disaster Environment Environmental Protection Agency Flint water crisis Health Health Human impact on the environment Intellectual disability Lead Lead poisoning Matter Michigan Occupational safety and health Reuters RTT state legislature’s Committee Toxic heavy metal Westlake, Koreatown and Pico Union Wed, 22 Mar 2017 23:50:00 +0000 Tyler Durden 591433 at http://www.zerohedge.com Nunes Confirms There Was "Incidental Surveillance" Of Trump During Obama Administration, "Seems To Be Inappropriate" http://www.zerohedge.com/news/2017-03-22/nunes-trump-transition-members-and-possibly-trump-himself-were-under-surveillance-du <p><strong>Update</strong>: House Intel Chairman Nunes spoke to reporters when he left the briefing at The White House and had some more stunning things to say:</p> <ul> <li>*NUNES: BRIEFED PRESIDENT ON CONCERNS OVER INCIDENTAL COLLECTION</li> <li>*NUNES: `PRESIDENT NEEDS TO KNOW' THESE INTEL REPORTS EXIST</li> <li><strong>*NUNES: SOME OF WHAT I'VE SEEN SEEMS TO BE `INAPPROPRIATE'</strong></li> <li>*NUNES: TRUMP, OTHERS IN TRANSITION PUT INTO INTELLIGENCE REPORT</li> <li><strong>*NUNES: QUESTION IS IF TRUMP SHOULD BE IN THESE `NORMAL' REPORTS</strong></li> </ul> <p>And the punchline: there are "multiple FISA warrants outstanding against Trump" Nunes also told reporters:</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">Wow - Nunes just said there are "multiple FISA warrants out there" involving Trump.</p> <p>— Tom Watson (@tomwatson) <a href="https://twitter.com/tomwatson/status/844628015845904385">March 22, 2017</a></p></blockquote> <p>*&nbsp; *&nbsp; *</p> <p>As we detailed earlier, it appears Trump may have been right, again.</p> <p>Two days after FBI director Comey shot down Trump's allegation that Trump was being wiretapped by president Obama before the election, it appears that president Trump may have been on to something because moments ago, the House Intelligence Chairman, Devin Nunes, told reporters that the U.S. intelligence community incidentally collected information on members of President Trump's transition team, possibly including Trump himself, and the information was "widely disseminated" in intelligence reports.</p> <p><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/03/20/nunes_0.jpg" width="500" height="271" /></p> <p>As <a href="http://bigstory.ap.org/8f45d6141e4e4cce86024af85841a9f7?utm_campaign=SocialFlow&amp;utm_source=Twitter&amp;utm_medium=AP">AP adds</a>, Nunes said that President Donald Trump's communications <strong>may have been "monitored" </strong>during the transition period as part of an "incidental collection."</p> <p>Nunes told a news conference Wednesday that the communications appear to be picked up through "incidental collection" and do not appear to be related to the ongoing FBI investigation into Trump associates' contacts with Russia. <strong>He says he believes the intelligence collections were done legally</strong>, although in light of the dramatic change in the plotline it may be prudent to reserve judgment on how "incidental" it was.</p> <p>"I recently confirmed that on numerous occasions, the intelligence community collected information on U.S. individuals involved in the Trump transition," Nunes told reporters. </p> <p><strong>"Details about U.S. persons involved in the incoming administration with little or no apparent foreign intelligence value were widely disseminated in intelligence community reports." </strong></p> <p>The information was "legally brought to him by sources who thought we should know it," Nunes said, though he provided little detail on the source. </p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">BREAKING!!! Rep Devin Nunes (Intel Cmte Chmn):<br />There was "Incidental collection" of <a href="https://twitter.com/realDonaldTrump">@realDonaldTrump</a> thru IC surveillance &lt;- BOMBSHELL</p> <p>— Eric Bolling (@ericbolling) <a href="https://twitter.com/ericbolling/status/844603089915129856">March 22, 2017</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><p>Nunes also said that "additional names" of Trump transition officials had been unmasked in the intelligence reports. <strong>He indicated that Trump's communications may have been swept up.&nbsp; </strong></p> <p>The House Intel Chair said he had viewed <strong>dozens of documents showing that the information had been incidentally collected. </strong>He said that he believes the information was legally collected.&nbsp; Nunes said that <strong>the intelligence has nothing to do with Russia and that the collection occurred after the presidential election.</strong></p> <p>Nunes said he briefed House Speaker Paul Ryan (R-Wis.) on the revelation and will inform the White House later today.&nbsp; Nunes' statement comes after he and other congressional leaders pushed back on Trump's claims that former President Obama had his "wires tapped" in Trump Tower ahead of the election.</p> <p><strong>Nunes said Wednesday that it was unclear whether the information incidentally collected originated in Trump Tower. </strong></p> <p>The revelation comes in the wake of the committee's explosive hearing on Monday, at which FBI Director James Comey confirmed that the bureau has been investigating Russia’s election hacking since July, which includes probing possible coordination between members of Trump’s presidential campaign and Moscow.</p> <p>The meeting represented the panel’s first open hearing on its investigation into Russia’s election meddling and also featured testimony from NSA Director Adm. Mike Rogers. </p> <p>Nunes says the communications of Trump associates were also picked up, but he did not name those associates. He says the monitoring mostly occurred in November, December and January. He added that he learned of the collection through "sources" but did not specify those source</p> <p>Politico adds that Nunes is going to the White House later Wednesday to brief the Trump administration on what he has learned, which he said came from "sources."</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">Nunes says he is "bothered" by this. Won't say whether or not intel community spied on Trump et. al. But says he is "concerned."</p> <p>— David Corn (@DavidCornDC) <a href="https://twitter.com/DavidCornDC/status/844599302701940739">March 22, 2017</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><p>While there are no further details, we look forward to how the media narrative will change as a result of today's latest dramatic development. </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="1160" height="629" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/nunes_0.jpg?1490203989" /> </div> </div> </div> http://www.zerohedge.com/news/2017-03-22/nunes-trump-transition-members-and-possibly-trump-himself-were-under-surveillance-du#comments American people of German descent Climate change skepticism and denial Devin Nunes Donald Trump Donald Trump presidential campaign Draft:Timeline of the Trump-Russia Scandal FBI Federal Bureau of Investigation Federal Bureau of Investigation House Intelligence James Comey Mike Pence Obama Administration Obama administration Politics Politics of the United States President Obama Testimony The Apprentice Trump Administration Trump Tower U.S. intelligence United States White House White House WWE Hall of Fame Wed, 22 Mar 2017 23:35:28 +0000 Tyler Durden 591431 at http://www.zerohedge.com Wellesley College Says Controversial Speakers "Impose On The Liberty Of Students" By Making Them Think Too Much http://www.zerohedge.com/news/2017-03-22/wellesley-college-says-controversial-speakers-impose-liberty-students-making-them-th <p><a href="https://www.thefire.org/in-anti-intellectual-email-wellesley-profs-call-engaging-with-controversial-arguments-an-imposition-on-students/"><em>Authored by Alex Morey and Samantha Harris via TheFire.org,</em></a></p> <p><strong><em><span class="entry-header">In anti-intellectual email, Wellesley profs call engaging with controversial arguments an imposition on students</span></em></strong></p> <p><span style="font-weight: 400;">In </span><a href="https://www.thefire.org/subject-facstaffdiscuss-statement-cere-faculty-re-laura-kipnis-freedom-project-visit-aftermath/"><span style="font-weight: 400;">an email to fellow faculty</span></a><span style="font-weight: 400;"> yesterday afternoon, a committee of Wellesley College professors </span><span style="font-weight: 400;">made <strong>several startling recommendations</strong> about how they think future campus speakers should be chosen. If implemented, the proposals by the faculty </span><a href="https://www.wellesley.edu/about/president/connect/commission-on-ethnicity-race-and-equity#UA9qslYEQMUYmhvy.97"><span style="font-weight: 400;">Commission for Ethnicity, Race, and Equity</span></a><span style="font-weight: 400;"> would have a profound impact on the quality and quantity of voices Wellesley students would be permitted to hear.</span></p> <div class="entry-content"> <p class="selectionShareable"><em><span style="font-weight: 400;">FIRE has obtained the email, sent by one of the signatories to a faculty listserv, and republished it in full below.</span></em></p> <p class="selectionShareable"><span style="font-weight: 400;"><strong>While paying lip service to free speech, the email is remarkable in its contempt for free and open dialogue on campus. </strong>Asserting that <u><strong>controversial speakers &ldquo;impose on the liberty of students, staff, and faculty at Wellesley,&rdquo;</strong></u> the committee members lament the fact that such speakers negatively impact students by forcing them to &ldquo;invest time and energy in rebutting the speakers&rsquo; arguments.&rdquo; </span></p> <p class="selectionShareable"><span style="font-weight: 400;">And here we thought learning to effectively challenge views with which one disagreed was an important part of the educational process! </span></p> <p class="selectionShareable"><span style="font-weight: 400;">They point specifically to a </span><a href="http://www.wbur.org/edify/2017/03/10/wellelsey-free-speech-kipnis"><span style="font-weight: 400;">recent appearance</span></a><span style="font-weight: 400;"> by Northwestern University profes</span><span style="font-weight: 400;">sor </span><a href="https://www.thefire.org/fires-statement-on-northwesterns-lengthy-unwarranted-title-ix-investigation-of-laura-kipnis/"><span style="font-weight: 400;">Laura Kipnis</span></a><span style="font-weight: 400;">, </span><a href="https://www.thefire.org/in-her-own-words-laura-kipnis-title-ix-inquisition-at-northwestern-video/"><span style="font-weight: 400;">a self-described feminist</span></a><span style="font-weight: 400;"> who has criticized Title IX implementation and a &ldquo;culture of sexual paranoia&rdquo; on campuses.</span></p> <blockquote class="twitter-tweet" data-lang="en"><p dir="ltr" lang="en">Censorship Awareness Week brought <a href="https://twitter.com/jmlarkin">@jmlarkin</a> from <a href="https://twitter.com/wburEDify">@wburEDify</a> to cover <a href="https://twitter.com/laurakipnis">@laurakipnis</a> talk. Listen here: <a href="https://t.co/RY0lH9ENaz">https://t.co/RY0lH9ENaz</a></p> <p>&mdash; Freedom Project (@WellesleyFP) <a href="https://twitter.com/WellesleyFP/status/841022265269616644">March 12, 2017</a></p></blockquote> <script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script><blockquote class="twitter-tweet" data-lang="en"><p dir="ltr" lang="en">The idea of trauma, says provocative <a href="https://twitter.com/laurakipnis">@laurakipnis</a> at <a href="https://twitter.com/Wellesley">@wellesley</a>, isn&#39;t helping feminism &quot;if it turns its adherents into would-be censors.&quot; <a href="https://t.co/b3AWw557wO">pic.twitter.com/b3AWw557wO</a></p> <p>&mdash; Edify (@wburEDify) <a href="https://twitter.com/wburEDify/status/839600987346202624">March 8, 2017</a></p></blockquote> <p><script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script></p><p><em>(<a href="https://www.eventbrite.com/e/the-freedom-project-censorship-awareness-week-laura-kipnis-tickets-31938979347#">Kipnis&rsquo; visit</a>&nbsp;elicited <a href="https://vimeo.com/207491510">a video response</a> from Wellesley students who disagreed with her.)</em></p> <p><span style="font-weight: 400;">The committee recommends that those inviting any future speakers &ldquo;consider whether, in their zeal for promoting debate, they might, in fact, stifle productive debate by enabling the bullying of disempowered groups,&rdquo; adding that the committee would be &ldquo;happy to serve as a sounding board when hosts are considering inviting controversial speakers, to help sponsors think through the various implications of extending an invitation.&rdquo; They also argue that &ldquo;standards of respect and rigor must remain paramount when considering whether a speaker is actually qualified for the platform granted by an invitation to Wellesley.&rdquo;</span></p> <p class="selectionShareable"><span style="font-weight: 400;">But the implementation of such reforms would, in itself, establish a campus orthodoxy and a climate in which any speaking invitation might be subject to prior review by a select few faculty. </span></p> <p class="selectionShareable"><span style="font-weight: 400;">Kipnis, reached for comment by FIRE, disapproved.</span></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p class="selectionShareable"><strong><span style="font-weight: 400;">&ldquo;</span></strong><span style="font-weight: 400;"><strong>I find it absurd that six faculty members at Wellesley can call themselves defenders of free speech and also conflate my recent talk with bullying the disempowered,&rdquo;</strong> Kipnis told FIRE in an email. </span></p> <p>&nbsp;</p> <p><strong>&ldquo;What actually happened was that there was a lively back and forth after I spoke. The students were smart and articulate, including those who disagreed with me.&rdquo;</strong></p> <p class="selectionShareable">&nbsp;</p> <p class="selectionShareable"><span style="font-weight: 400;">&ldquo;I&rsquo;m going to go further and say &mdash; as someone who&rsquo;s been teaching for a long time, and wants to see my students able to function in the world post-graduation &mdash; that <strong>protecting students from the &lsquo;distress&rsquo; of someone&rsquo;s ideas isn&rsquo;t education, it&rsquo;s a $67,000 babysitting bill</strong>.&rdquo;</span></p> </blockquote> <p class="selectionShareable"><span style="font-weight: 400;">FIRE will be looking more into this development at Wellesley in the coming days.</span></p> </div> <p>*&nbsp; *&nbsp; *</p> <h3><u><strong>Full email below:</strong></u></h3> <p><em><strong>From: ?Michael P Jeffries? &lt;?<a href="mailto:mjeffrie@wellesley.edu" title="mjeffrie@wellesley.edu">mjeffrie@wellesley.edu</a>?&gt;</strong></em><br />Date: Mon, Mar 20, 2017 at 1:43 PM<br />Subject: [FacStaffDiscuss] <strong>Statement from CERE faculty re: Laura Kipnis Freedom Project visit and aftermath</strong><br />To: Faculty-Staff Discussion &lt;?<a href="mailto:facstaffdiscuss@wellesley.edu" title="facstaffdiscuss@wellesley.edu">facstaffdiscuss@wellesley.edu</a>?&gt;</p> <p>To: Wellesley Community<br />From: Faculty on Commission for Ethnicity, Race, and Equity (CERE)<br />Re: Laura Kipnis visit and aftermath<br />3/20/17</p> <p>Over the past few years, several guest speakers with controversial and objectionable beliefs have presented their ideas at Wellesley. <strong>We, the faculty in CERE, defend free speech and believe it is essential to a liberal arts education.</strong> However, as historian W. Jelani Cobb notes, <em>&ldquo;The freedom to offend the powerful is not equivalent to the freedom to bully the relatively disempowered. The enlightenment principles that undergird free speech also prescribed that the natural limits of one&rsquo;s liberty lie at the precise point at which it begins to impose upon the liberty of another.&rdquo;</em></p> <p>There is <strong>no doubt that the speakers in question impose on the liberty of students, staff, and faculty at Wellesley. </strong>We are especially concerned with the impact of speakers&rsquo; presentations on Wellesley students, who often <strong>feel the injury most acutely and invest time and energy in rebutting the speakers&rsquo; arguments</strong>. Students object in order to affirm their humanity. This work is not optional; students feel they would be unable to carry out their responsibilities as students without standing up for themselves. Furthermore, <strong>we object to the notion that onlookers who are part of the faculty or administration are qualified to adjudicate the harm described by students</strong>, especially when so many students have come forward. When dozens of students tell us they are in distress as a result of a speaker&rsquo;s words, we must take these complaints at face value.</p> <p>What is especially disturbing about this pattern of harm is that in many cases, the damage could have been avoided. The speakers who appeared on campus presented ideas that they had published, and those who hosted the speakers could certainly anticipate that these ideas would be painful to significant portions of the Wellesley community. Laura Kipnis&rsquo;s recent visit to Wellesley prompted students to respond to Kipnis&rsquo;s presentation with a video post on Facebook.</p> <p>Kipnis posted the video on her page, and professor Tom Cushman left a comment that publicly disparaged the students who produced the video. Professor Cushman apologized for his remarks, but in light of these developments, we recommend the following.</p> <p><strong>First, those who invite speakers to campus should consider whether, in their zeal for promoting debate, they might, in fact, stifle productive debate by enabling the bullying of disempowered groups.</strong> We in CERE are happy to serve as a sounding board when hosts are considering inviting controversial speakers, to help sponsors think through the various implications of extending an invitation.</p> <p><strong>Second, standards of respect and rigor must remain paramount when considering whether a speaker is actually qualified for the platform granted by an invitation to Wellesley. </strong>In the case of an academic speaker, we ask that the Wellesley host not only consider whether the speaker holds credentials, but whether the presenter has standing in his/her/their discipline. This is not a matter of ideological bias. Pseudoscience suggesting that men are more naturally equipped to excel in STEM fields than women, for example, has no place at Wellesley. Similar arguments pertaining to race, ethnicity, sexuality, religion, and other identity markers are equally inappropriate.</p> <p><strong>Third, faculty and administrators should step up in defense of themselves and all members of the Wellesley community.</strong> The responsibility to defend the disempowered does not rest solely with students, and the injuries suffered by students, faculty, and staff are not contained within the specific identity group in question; they ripple throughout our community and prevent Wellesley from living out its mission.</p> <p>In solidarity,</p> <p><em>Diego Arcineagas<br />Beth DeSombre<br />Brenna Greer<br />Soo Hong<br />Michael Jeffries<br />Layli Maparyan</em></p> <p><em>[emphasis added]</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="408" height="207" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20170322_welleesly.jpg?1490217261" /> </div> </div> </div> http://www.zerohedge.com/news/2017-03-22/wellesley-college-says-controversial-speakers-impose-liberty-students-making-them-th#comments Commission for Ethnicity, Race, and Equity Education Feminism Freedom of speech Geography of Massachusetts Laura Kipnis Literature Northwestern University Social Issues Speaker of the House of Commons Wellesley College Wellesley College Wellesley, Massachusetts Wed, 22 Mar 2017 23:25:00 +0000 Tyler Durden 591465 at http://www.zerohedge.com 'North Korean' Roulette http://www.zerohedge.com/news/2017-03-22/north-korean-roulette <p>North Korea has tested the patience of America for way too long, now that there is a new sheriff in town, President Trump, <strong><em>things may be different.</em></strong></p> <p>&nbsp;</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/21/20170322_NK.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/21/20170322_NK.jpg" width="597" height="424" /></a></p> <p><a href="http://comicallyincorrect.com/2017/03/21/head-games/"><em>Source: Branco via ComicallyDifferent.com</em></a></p> <p>Ron Paul has some views on this too... <em><strong>Is North Korea about to launch an attack? Is it capable of being an existential threat to the US? Or is it possible that the threat is only made worse by continued US meddling in the dispute?</strong><br /></em></p> <p><iframe src="https://www.youtube.com/embed/AHSKQDFz3pU" width="560" height="315" 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="597" height="424" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20170322_NK.jpg?1490200997" /> </div> </div> </div> http://www.zerohedge.com/news/2017-03-22/north-korean-roulette#comments American people of German descent Business Climate change skepticism and denial Donald Trump Donald Trump presidential campaign Global catastrophic risk Law North Korea Political positions of Donald Trump Politics Politics of the United States Ron Paul The Apprentice United States WWE Hall of Fame Wed, 22 Mar 2017 23:05:00 +0000 Tyler Durden 591426 at http://www.zerohedge.com Five People Killed, At Least 40 Injured After Terrorist In SUV "Mows Down" Pedestrians In London http://www.zerohedge.com/news/2017-03-22/gunfire-reported-outside-uk-parliament-two-people-have-been-shot-building-lockdown <p>Live feed from SkyNews:</p> <p><iframe src="https://www.youtube.com/embed/y60wDzZt8yg" width="500" height="281" frameborder="0"></iframe>&nbsp;</p> <p>&nbsp;</p> <p>The moment that shots rang out...</p> <blockquote class="twitter-video"><p dir="ltr" lang="en">Watch the terrifying moment police opened fire outside of <a href="https://twitter.com/hashtag/Parliament?src=hash">#Parliament</a> in this eyewitness video captured by Taiwanese tourist Aaron Tsang <a href="https://t.co/WrCVhWPrFK">pic.twitter.com/WrCVhWPrFK</a></p> <p>— Yahoo UK News (@YahooNewsUK) <a href="https://twitter.com/YahooNewsUK/status/844584318609620992">March 22, 2017</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><blockquote class="twitter-tweet"><p dir="ltr" lang="en">Images show aftermath of terror attack on Westminster Bridge, where a vehicle mowed down several people <a href="https://t.co/TxpDjWdaWr">pic.twitter.com/TxpDjWdaWr</a></p> <p>— Sky News (@SkyNews) <a href="https://twitter.com/SkyNews/status/844578842253545472">March 22, 2017</a></p></blockquote> <p><em>A summary of the latest development from today's London terrorist attack, <strong>which has taken place on the <span style="text-decoration: underline;">one year anniversary of the March 2016 Brussels Massacre</span>:</strong></em></p> <ul> <li>An SUV drove over Westminster Bridge knocking down pedestrians this afternoon <strong>killing at least five people in the process - including one policeman and the suspect - while injuring 40 others</strong> </li> <li>Victims were said to have been left scattered in the road, with some reportedly floating in the River Thames </li> <li><strong>A knifeman, described as 'middle-aged and Asian'&nbsp; then got into the grounds of Parliament where he reportedly stabbed a police officer</strong></li> <li>He as then shot by armed officers as the area was cleared by emergency services</li> <li>According to a Scotland yard conference, <strong>there are numerous casualties, including police officer</strong>s; </li> <li>The London police requests the public to avoid the area around parliament and nearby bridges.</li> <li>Parliament was suspended and the Prime Minister was rushed from the scene in an unmarked police car </li> <li>As SkyNews summarizes the chaotis sequence of events, <strong>the attacker drove into people on Westminster bridge, drove to Parliament Square, stabbed police officer and was shot by police</strong></li> </ul> <p>According to the <a href="http://www.mirror.co.uk/news/world-news/pictured-parliament-terror-attack-suspect-10077486">UK's Mirror</a>, the following is a photo of the moment the Parliament terror attack suspect is wheeled into an ambulance after being shot by police. The man, who was said to be "Asian, and middle-aged" in appearance, entered the grounds of the Houses of Parliament and stabbed a policeman just after 2.30pm this afternoon. </p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/03/20/terrorist%20suspect.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/03/20/terrorist%20suspect_0.jpg" width="500" height="333" /></a></p> <p>This is what is believed to be the series of events this afternoon where a knife attacker drove into pedestrians before he was shot&nbsp; </p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/03/20/3E87226600000578-4338998-image-a-76_1490197638301.jpg"><img src="http://i.dailymail.co.uk/i/pix/2017/03/22/15/3E87226600000578-4338998-image-a-76_1490197638301.jpg" alt="It is believed this was the series of events this afternoon where a knife attacker drove into pedestrians before he was shot" width="502" height="407" class="blkBorder img-share b-loaded" id="i-ff5ff23a002c90a4" /></a></p> <p class="mol-para-with-font">As the <a href="http://www.dailymail.co.uk/news/article-4338998/Police-open-fire-outside-House-Commons.html">Daily Mail</a> reports, a terror attacker brought carnage to central London today by mowing down pedestrians on Westminster Bridge and attacking police with a knife in the grounds of the Houses of Parliament. At least 20 people are said to have been hit by a car on the bridge after a vehicle<br /> described as a '4x4' drove into pedestrians and cyclists, with four people reportedly killed, including a police officer and the suspect.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/03/20/suv%20london.jpg"><img src="http://i.dailymail.co.uk/i/pix/2017/03/22/15/3E86A92900000578-4338998-Armed_Police_have_opened_fire_and_shot_a_person_outside_the_Hous-a-63_1490196071189.jpg" alt="Armed Police have opened fire and shot a person outside the Houses of Parliament. A vehicle was seen on social media to have crashed into the fence of the palace&nbsp;" width="499" height="333" class="blkBorder img-share b-loaded" id="i-d589cff4c2496e47" /></a></p> <p><em>The alleged vehicle that mowed down people</em></p> <p class="mol-para-with-font">An<br /> intruder, described by a witness as <strong>'middle-aged and Asian', </strong>then managed to break into the grounds of the Parliament and stabbed a police officer before he was shot. An hour after the attack, paramedics removed one person from the scene after extensive CPR. Another body appeared to have been left on the ground covered by a red blanket.</p> <p class="mol-para-with-font"><img src="http://i.dailymail.co.uk/i/pix/2017/03/22/16/3E87410F00000578-4338998-image-a-94_1490198694745.jpg" width="499" height="430" class="blkBorder img-share b-loaded" id="i-6a6cb18cc6213e76" /></p> <p class="mol-para-with-font"><em>A police officer was stabbed by the knifeman before he was shot by other officers. </em></p> <p class="mol-para-with-font">Prime Minister Theresa May is said to have been bundled into a car by a plain-clothes police officer and driven quickly from the scene.</p> <p id="ext-gen256" class="mol-para-with-font">Scotland Yard said the attack, which comes a year to the day after the terrorist<br /> atrocities in Brussels, is being treated 'as a terrorist incident until we know otherwise'.</p> <p><img src="http://i.dailymail.co.uk/i/pix/2017/03/22/15/3E86D26500000578-4338998-It_is_believed_a_police_officer_was_stabbed_by_the_knifeman_befo-a-65_1490196071372.jpg" alt="It is believed a police officer was stabbed by the knifeman before he was shot by officers" width="504" height="433" class="blkBorder img-share b-loaded" id="i-7114df8bdd1b8df8" /></p> <p><em>C</em>ommons Leader David Lidington told MPs a 'police officer has been stabbed' and the 'alleged assailant was shot by armed police' following a 'serious' incident within the parliamentary estate.&nbsp; </p> <p>Witness Jayne Wilkinson said: 'We were taking photos of Big Ben and we saw all the people running towards us, and then <strong>there was an Asian guy in about his 40s carrying a knife about seven or eight inches long. 'And then there were three shots fired, and then we crossed the road and looked over. The man was on the floor with blood.</strong>'</p> <p><img src="http://i.dailymail.co.uk/i/pix/2017/03/22/15/3E8703AC00000578-4338998-image-a-67_1490196692238.jpg" alt="There were disturbing scenes on Westminster Bridge where around a dozen pedestrians were knocked down by the car" width="505" height="311" class="blkBorder img-share b-loaded" id="i-c84b780d47015527" /></p> <p>He had a lightweight jacket on, dark trousers and a shirt. He was running through those gates, towards Parliament, and the police were chasing him.' </p> <p><img src="http://i.dailymail.co.uk/i/pix/2017/03/22/15/3E86A64300000578-4338998-Emergency_teams_were_seen_carrying_out_CPR_inside_the_palace_gro-a-64_1490196071251.jpg" alt="Emergency teams were seen carrying out CPR inside the palace grounds in New Palace Yard, the main thoroughfare in and out of Parliament&nbsp;" width="505" height="379" class="blkBorder img-share b-loaded" id="i-9239bdbbe9d45c37" /></p> <p><em>Emergency teams were seen carrying out CPR inside the palace grounds in New Palace Yard</em></p> <p>Her partner David Turner added: 'There was a stampede of people running out. You saw the people and you thought 'what the hell is going on'.' </p> <p>Steve Voake, 55, was walking across the Westminster Bridge and saw at least two bodies lying on the road and one in the water. </p> <p>'I saw a trainer lying in the road and when I looked more closely I saw that there were a couple of bodies the other side of the road,' he told the Press Association. 'And when I looked over the side there was another body lying in the water with blood all around it.' </p> <p><img src="http://i.dailymail.co.uk/i/pix/2017/03/22/15/3E871E6E00000578-4338998-image-m-81_1490197982894.jpg" alt="An injured victim walks from the scene on Westminster Bridge where more than 10 people were reported knocked down" width="505" height="368" class="blkBorder img-share b-loaded" id="i-76f39d51ce187ae" /></p> <p><em>An injured victim walks from the scene on Westminster Bridge where at least 10 people were reported knocked down&nbsp; </em></p> <p>Mail journalist Quentin Letts saw the incident out of the window of a Commons office. He told the BBC: 'We heard this sound that sounded like a car crash… 'Then we saw a thick set man in black clothes come through the gates where people would normally drive cars 'This man had something in his hand. It looked like a stick. He was challenged by two policemen. The policeman fell down. 'We could see the man in black movinghis arm in a way that suggested he was either striking or stabbing.' </p> <p>Kevin Schofield, the editor of PoliticsHome.com heard 'a very loud bang' from the press gallery inside the Houses of Parliament followed by lots of shouting and men running around. He initially thought it was a car crash but then he looked outside the window to a heavily-guarded area outside which is out of bounds to the public. </p> <p>He told Sky News: 'Someone rushed through, attacked a policeman, a policeman went down, another policeman came and he was rescued. 'The man who had assaulted him got up and he appeared to be carrying either a knife or a gun. Then we heard gunfire, lots of gunfire, maybe five or six rounds. 'All I remember seeing is the man approaching the police officer probably with a knife and then there was gunfire.'</p> <p>Eyewitness Rick Longley described the attack saying: 'We were just walking up to the station and there was a loud bang and a guy, someone, crashed a car and took some pedestrians out. 'They were just laying there and then the whole crowd just surged around the corner by the gates just opposite Big Ben. 'A guy came past my right shoulder with a big knife and just started plunging it into the policeman. I have never seen anything like that. I just can't believe what I just saw.'&nbsp; </p> <p>After the incident, Radoslaw Sikorski posted a video to Twitter purporting to show people lying injured in the road on Westminster Bridge. Mr Sikorski, a senior fellow at Harvard's Centre for European Studies, wrote: 'A car on Westminster Bridge has just mowed down at least 5 people.'&nbsp; </p> <p>People outside the palace could be seen running from the scene when the shots were heard. An eye witness said that a car was seen to mow down five people on Westminster Bridge. Police are then believed to have shot a man who tried to enter the Parliamentary Estate.&nbsp;&nbsp; The dramatic incident comes weeks after it was revealed that UK security services have foiled 13 potential attacks in less than four years, while counter-terrorism units are running more than 500 investigations at any time. </p> <p>The official threat level for international terrorism has stood at severe, meaning an attack is 'highly likely', for more than two years. Liberal Democrat transport spokeswoman Baroness Randerson said countries seem to have been 'singled out based on religious beliefs'.</p> <p>'Of course safety is paramount at all times and we all need to remain vigilant but this ban needs to be explained in detail,' she said. </p> <p>&nbsp;</p> <p>* * * <br /><em><span style="text-decoration: underline;">Earlier:</span></em></p> <p><em><br /></em></p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">MORE: At least a dozen armed officers inside British parliament - Reuters witness. Watch live: <a href="https://t.co/1s8hn5G3GS">https://t.co/1s8hn5G3GS</a> <a href="https://t.co/Il6uQM2qRb">pic.twitter.com/Il6uQM2qRb</a></p> <p>— Reuters World (@ReutersWorld) <a href="https://twitter.com/ReutersWorld/status/844566203611930627">March 22, 2017</a></p></blockquote> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">Scene outside UK Parliament where multiple people have been reportedly injured in attack. Watch live: <a href="https://t.co/kLOLp3IRd3">https://t.co/kLOLp3IRd3</a> <a href="https://t.co/Xd2v0dHtjO">pic.twitter.com/Xd2v0dHtjO</a></p> <p>— CBS News (@CBSNews) <a href="https://twitter.com/CBSNews/status/844574419645337602">March 22, 2017</a></p></blockquote> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">Injured people are seen on Westminster Bridge in London after a major incident. Keep up to date with our live blog: <a href="https://t.co/rqYw0ZjWh5">https://t.co/rqYw0ZjWh5</a> <a href="https://t.co/ZlPRlH8MF4">pic.twitter.com/ZlPRlH8MF4</a></p> <p>— David Sim (@davidsim) <a href="https://twitter.com/davidsim/status/844568653060358144">March 22, 2017</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><blockquote class="twitter-tweet"> <p dir="ltr" lang="en">"Firearms incident" near the British Parliament in London.<br /> <a href="https://t.co/e2CfyLeTU5">https://t.co/e2CfyLeTU5</a> <a href="https://t.co/8zzjhYwC0p">pic.twitter.com/8zzjhYwC0p</a><br />Wtf????</p> <p>— KerstinWhatEver ???? (@Kerstinitsso) <a href="https://twitter.com/Kerstinitsso/status/844566319739654144">March 22, 2017</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><blockquote class="twitter-tweet"> <p dir="ltr" lang="en">A car on Westminster Bridge has just mowed down at least 5 people. <a href="https://t.co/tdCR9I0NgJ">pic.twitter.com/tdCR9I0NgJ</a></p> <p>— Rados?aw Sikorski (@sikorskiradek) <a href="https://twitter.com/sikorskiradek/status/844561194207920130">March 22, 2017</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><p>&nbsp;</p> <p><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/03/20/58d29430c3618871648b4696_0.jpg" width="500" height="278" /></p> <p>A woman lies injured after a shooting incident on Westminster Bridge in London</p> <p><em><strong>Update 2: </strong></em></p> <ul> <li><strong>ALLEGED ASSAILANT WAS SHOT AT UK PARLIAMENT BY ARMED POLICE - LEADER OF THE HOUSE OF COMMONS</strong></li> <li><strong>POLICEMAN STABBED, MAN SHOT; REPORTS OF OTHER INCIDENTS. PARLIAMENT SITTING SUSPENDED UNTIL FURTHER NOTICE: MNI</strong></li> </ul> <p><strong><em>Update 1:</em></strong></p> <p>Two people have reportedly been shot outside the U.K. parliament building in London, in a developing incident that may have taken place on the adjacent Westminster Bridge. </p> <p>A parliamentary clerk told Reuters two people had been shot, but there was no official confirmation from the police. A Reuters photographer said he saw at least a dozen people injured on Westminster Bridge near the parliament building.</p> <p>Reports said that a man was seen waving a knife and police said they treating the situation as a firearm incident.</p> <p>* * * </p> <p><em>Eariler</em></p> <p>Shots have been reportedly fired outside UK parliament in London, where two people have been reportedly shot outside the gates to parliament, Reuters and Bloomberg report with iTV adding that explosions heard outside British Parliament, the building on lockdown.</p> <p>The Sun reports that a car mowed down a dozen pedestrians on Westminster Bridge.</p> <p>According to SkyNews, waves of people' have been seen running from Parliament amid reports of gunfire, while Reuters adds that around six people are injured on Westminster Bridgeg. </p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/03/20/C7h9AQQXQAEYx7D.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/03/20/C7h9AQQXQAEYx7D_0.jpg" width="500" height="362" /></a></p> <p>&nbsp;</p> <p>As <a href="http://www.bbc.com/news/uk-39355940">BBC adds</a>, politicians and journalists have tweeted about hearing loud crashes outside the buildings, as witnesses said they saw people being treated for injuries. <strong>&nbsp;</strong></p> <p><strong>Witnesses have reported seeing a man with a knife within the palace grounds.</strong></p> <p>A police officer has also told a BBC's political editor that someone has been shot outside Portcullis House.</p> <ul> <li><strong>SHOTS FIRED OUTSIDE U.K. PARLIAMENT IN LONDON: BBG</strong></li> <li><strong>PEOPLE ON GROUND ARE WITHIN PRECINCTS OF PARLIAMENT IN LONDON</strong></li> <li><strong>HOUSE OF COMMONS SITTING HAS BEEN SUSPENDED</strong></li> <li><strong>REUTERS PHOTOGRAPHER SEES AROUND SIX PEOPLE INJURED ON WESTMINSTER BRIDGE OUTSIDE BRITISH PARLIAMENT</strong></li> <li><strong>AT LEAST ONE PERSON BEING TREATED, HELD AT GUNPOINT BY POLICE</strong></li> <li><strong>ARMED POLICE SEEN RUNNING TO EXIT FROM UK PARLIAMENT - REUTERS WITNESS</strong></li> <li><strong>REUTERS PHOTOGRAPHER SAYS SEES AT LEAST A DOZEN INJURED PEOPLE ON WESTMINSTER BRIDGE NEAR PARLIAMENT</strong></li> <li><strong>TRANSPORT FOR LONDON SAYS UNDERGROUND STATION AT WESTMINSTER HAS BEEN SHUT AT POLICE REQUEST</strong></li> </ul> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">Shots fired outside Parliament. Loud explosion then shooting. Man lying shot outside gates to Parliament. Gun shots outside, Frightening.</p> <p>— Christopher Hope (@christopherhope) <a href="https://twitter.com/christopherhope/status/844560087276572676">March 22, 2017</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><blockquote class="twitter-tweet"> <p dir="ltr" lang="en">Reuters: BREAKING: Two people shot outside UK parliament, building in lock down - parliamentary official <a href="https://t.co/77gW2yYYsz">pic.twitter.com/77gW2yYYsz</a></p> <p>— Ron Bourne (@Ron_Bourne) <a href="https://twitter.com/Ron_Bourne/status/844561361854173185">March 22, 2017</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><blockquote class="twitter-tweet"> <p dir="ltr" lang="en">BREAKING: A car has driven into the railings of parliament. MPs panicking in the underground. <a href="https://t.co/goQD2ctKce">pic.twitter.com/goQD2ctKce</a></p> <p>— Paul Brand (@PaulBrandITV) <a href="https://twitter.com/PaulBrandITV/status/844561249643978753">March 22, 2017</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><blockquote class="twitter-tweet"> <p dir="ltr" lang="en"><a href="https://twitter.com/hashtag/BREAKING?src=hash">#BREAKING</a>: Initial reports of two shot, explosions heard outside British Parliament, building on lockdown <a href="https://t.co/VQ7haGvz4Z">pic.twitter.com/VQ7haGvz4Z</a></p> <p>— i24NEWS English (@i24NEWS_EN) <a href="https://twitter.com/i24NEWS_EN/status/844561997077336065">March 22, 2017</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><blockquote class="twitter-tweet"> <p dir="ltr" lang="es">Disparos fuera del parlamento británico <a href="https://twitter.com/hashtag/UK?src=hash">#UK</a> <a href="https://twitter.com/hashtag/Parliament?src=hash">#Parliament</a> <a href="https://twitter.com/hashtag/BBC?src=hash">#BBC</a> <a href="https://t.co/o82oQ1VhvQ">pic.twitter.com/o82oQ1VhvQ</a></p> <p>— Alvaro (@varoc_) <a href="https://twitter.com/varoc_/status/844562393783062528">March 22, 2017</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><p><em>Developing</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="763" height="438" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/bridge%20casualty.jpg?1490201693" /> </div> </div> </div> http://www.zerohedge.com/news/2017-03-22/gunfire-reported-outside-uk-parliament-two-people-have-been-shot-building-lockdown#comments ARMED POLICE Berlin attack British parliament British Parliament in London Charlottenburg City of Westminster Harvard's Centre for European Studies House of Commons Iran–Saudi Arabia relations Islamic terrorism in Europe Israel Liberal Democrat London London boroughs LONDON HOUSE OF COMMONS London police Murder Palace of Westminster Palestinian territories Palestinian terrorism Parliament of Singapore Parliament of the United Kingdom Press Association Reuters Reuters Scotland Yard Twitter Twitter UK Parliament UK parliament in London Violence Westminster Bridge Wed, 22 Mar 2017 22:53:05 +0000 Tyler Durden 591399 at http://www.zerohedge.com This New Bubble Is Even Bigger Than The Subprime Fiasco http://www.zerohedge.com/news/2017-03-22/new-bubble-even-bigger-subprime-fiasco <p><a href="https://www.sovereignman.com/trends/this-new-bubble-is-even-bigger-than-the-subprime-fiasco-21199/"><em>Authored by Simon Black via SovereignMan.com,</em></a></p> <p><strong>In 1988, a bank called Guardian Savings and Loan made financial history by issuing the first ever &ldquo;subprime&rdquo; mortgage bond.</strong></p> <p>The idea was revolutionary.</p> <p>The bank essentially took all the mortgages they had loaned to borrowers with bad credit, and pooled everything together into a giant bond that they could then sell to other banks and investors.</p> <p><strong>The idea caught on, and pretty soon, everyone was doing it.</strong></p> <p>As Bethany McLean and Joe Nocera describe in their excellent history of the financial crisis (<em>All the Devils are Here</em>), the first subprime bubble hit in the 1990s.</p> <p>Early subprime lenders like First Alliance Mortgage Company (FAMCO) had spent years making aggressive loans to people with bad credit, and eventually the consequences caught up with them.</p> <p>FAMCO declared bankruptcy in 2000, and many of its competitors went bust as well.</p> <p>Wall Street claimed that it had learned its lesson, and the government gave them all a slap on the wrist.</p> <p>But it didn&rsquo;t take very long for the madness to start again.</p> <p>By 2002, banks were already loaning money to high-risk borrowers. And by 2005, all conservative lending standards had been abandoned.</p> <p>Borrowers with pitiful credit and no job could borrow vast sums of money to buy a house without putting down a single penny.</p> <p>It was madness.</p> <p><u><strong>By 2007, the total value of these subprime loans hit a whopping $1.3 trillion. Remember that number.</strong></u></p> <p>And of course, we know what happened the next year: the entire financial system came crashing down.</p> <p>Duh.<em> It turned out that making $1.3 trillion worth of idiotic loans wasn&rsquo;t such a good idea.</em></p> <p>By 2009, 50% of those subprime mortgages were &ldquo;underwater&rdquo;, meaning that borrowers owed more money on the mortgage than the home was worth.</p> <p>In fact, delinquency rates for ALL mortgages across the country peaked at 11.5% in 2010, which only extended the crisis.</p> <p><u><strong>But hey, at least that&rsquo;s never going to happen again.</strong></u></p> <p>Except&hellip; I was looking at some data the other day in a slightly different market: student loans.</p> <p><strong>Over the last decade or so, there&rsquo;s been an absolute explosion in student loans, growing from $260 billion in 2004 to $1.31 trillion last year.</strong></p> <p><u><strong>So, the total value of student loans in America today is LARGER than the total value of subprime loans at the peak of the financial bubble.</strong></u></p> <p>And just like the subprime mortgages, many student loans are in default.</p> <p>According to the Fed&rsquo;s most recent <a href="https://www.newyorkfed.org/medialibrary/interactives/householdcredit/data/pdf/HHDC_2016Q4.pdf" target="_blank">Household Debt and Credit Report</a>, <u><strong>the student loan default rate is 11.2%, almost the same as the peak mortgage default rate in 2010.</strong></u></p> <p>This is particularly interesting because <strong>student loans essentially have no collateral.</strong></p> <p>Lenders make loans to students&hellip; but it&rsquo;s not like the students have to pony up their iPhones as security.</p> <p><strong>That&rsquo;s what made the subprime debacle so dangerous.</strong></p> <p>Millions of homes were underwater, so when borrowers didn&rsquo;t pay, lenders didn&rsquo;t have sufficient collateral to cover their loan exposure.</p> <p>With student loans, there is no collateral. Lenders have no security to recoup their loans.</p> <p><em><strong>So when students don&rsquo;t pay, someone is going to take a hit.</strong></em></p> <p><em><strong>That &lsquo;someone&rsquo; will likely be you.</strong></em></p> <p>That&rsquo;s because hundreds of billions of dollars of these student loans are either owned or guaranteed by the United States government.</p> <p>So as borrowers stop making payments, it&rsquo;s the taxpayer who will suffer yet another massive loss.</p> <p><u><strong>Let&rsquo;s be honest, though, there&rsquo;s something seriously screwed up with this system.</strong></u></p> <p><strong><em>Young people are pushed into this system by a society that places an irrationally high value on university degrees.</em></strong></p> <p><strong><em>Kids are told for their entire lives that if they study hard to get into a good school, there will be a great career waiting for them.</em></strong></p> <p><strong><em>For many young people this turned out to be a total lie.</em></strong></p> <p>In fact, Federal Reserve data once again show that, <u><strong>for at least 25% of college graduates, salaries are no higher than for people with just a high school diploma.</strong></u></p> <p>Racking up so much debt hardly seems worth it.</p> <p>It seems bizarre to begin with that an 18-year old will know what s/he wants to do in life, to the point that they should take on $50,000 in debt for a piece of paper that might not even make them marketable.</p> <p>What did any of us really know at age 18? And how many of us could have accurately predicted our life&rsquo;s path?</p> <p>Very few.</p> <p>And yet there&rsquo;s an absurd amount of pressure to force young people into this system that heaps debt upon them.</p> <p>If you&rsquo;re a young person about to go down this path of debt, I&rsquo;d suggest two alternatives:</p> <p>1) <strong>Look overseas.</strong></p> <p>There&rsquo;s a multitude of top-ranked universities around the world that you can attend for a fraction of what you might pay at home. See <a href="https://www.sovereignman.com/lifestyle-design/get-a-world-class-degree-for-less-than-the-cost-of-a-bus-pass-17329/" target="_blank">here</a>, and <a href="https://www.sovereignman.com/lifestyle-design/the-best-way-to-stay-out-of-student-loan-debt-and-boost-your-resume-4865/" target="_blank">here</a>.</p> <p>2) <strong>Seek mentorship.</strong></p> <p>The master-apprentice relationship worked well for thousands of years. And it&rsquo;s so simple.</p> <p>If you want to be successful, learn from successful people.</p> <p>If you want to be great at something, find someone who&rsquo;s already great at it and learn from them.</p> <p>And if you&rsquo;re not sure, find someone who you respect admire&hellip; someone whose activities and values excite you&hellip; and make yourself indispensable to that person</p> <p><a href="https://www.sovereignman.com/trends/this-new-bubble-is-even-bigger-than-the-subprime-fiasco-21199/"><u><em><strong>Do <span class="underline_text">you</span> have a Plan B?</strong></em></u></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="600" height="313" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20170322_student.jpg?1490206254" /> </div> </div> </div> http://www.zerohedge.com/news/2017-03-22/new-bubble-even-bigger-subprime-fiasco#comments B+ Bond Business default Default Rate Economy Federal Reserve Finance Financial crisis of 2007–2008 Loans Money Mortgage Mortgage loan Personal finance PITI Savings And Loan Student Loans Subprime lending Subprime mortgage crisis Subprime Mortgages United States government United States housing bubble US Federal Reserve Wed, 22 Mar 2017 22:45:00 +0000 Tyler Durden 591439 at http://www.zerohedge.com How Solid are Canada’s Big Banks? http://www.zerohedge.com/news/2017-03-22/how-solid-are-canada%E2%80%99s-big-banks <p><!--[if gte mso 9]><xml> <o:OfficeDocumentSettings> <o:RelyOnVML /> <o:AllowPNG /> </o:OfficeDocumentSettings> </xml><![endif]--><!--[if gte mso 9]><xml> <o:OfficeDocumentSettings> <o:RelyOnVML /> <o:AllowPNG /> </o:OfficeDocumentSettings> </xml><![endif]--></p> <p><!--[if gte mso 9]><xml> <w:WordDocument> <w:View>Normal</w:View> <w:Zoom>0</w:Zoom> <w:TrackMoves /> <w:TrackFormatting /> <w:PunctuationKerning /> <w:ValidateAgainstSchemas /> <w:SaveIfXMLInvalid>false</w:SaveIfXMLInvalid> <w:IgnoreMixedContent>false</w:IgnoreMixedContent> <w:AlwaysShowPlaceholderText>false</w:AlwaysShowPlaceholderText> <w:DoNotPromoteQF /> <w:LidThemeOther>EN-CA</w:LidThemeOther> <w:LidThemeAsian>X-NONE</w:LidThemeAsian> <w:LidThemeComplexScript>X-NONE</w:LidThemeComplexScript> <w:Compatibility> <w:BreakWrappedTables /> <w:SnapToGridInCell /> <w:WrapTextWithPunct /> <w:UseAsianBreakRules /> <w:DontGrowAutofit /> <w:SplitPgBreakAndParaMark /> <w:EnableOpenTypeKerning /> <w:DontFlipMirrorIndents /> <w:OverrideTableStyleHps /> </w:Compatibility> <m:mathPr> <m:mathFont m:val="Cambria Math" /> <m:brkBin m:val="before" /> <m:brkBinSub m:val="&#45;-" /> <m:smallFrac m:val="off" /> <m:dispDef /> <m:lMargin m:val="0" /> <m:rMargin m:val="0" /> <m:defJc m:val="centerGroup" /> <m:wrapIndent m:val="1440" /> <m:intLim m:val="subSup" /> <m:naryLim m:val="undOvr" /> </m:mathPr></w:WordDocument> </xml><![endif]--><!--[if gte mso 9]><xml> <w:WordDocument> <w:View>Normal</w:View> <w:Zoom>0</w:Zoom> <w:TrackMoves /> <w:TrackFormatting /> <w:PunctuationKerning /> <w:ValidateAgainstSchemas /> <w:SaveIfXMLInvalid>false</w:SaveIfXMLInvalid> <w:IgnoreMixedContent>false</w:IgnoreMixedContent> <w:AlwaysShowPlaceholderText>false</w:AlwaysShowPlaceholderText> <w:DoNotPromoteQF /> <w:LidThemeOther>EN-CA</w:LidThemeOther> <w:LidThemeAsian>X-NONE</w:LidThemeAsian> <w:LidThemeComplexScript>X-NONE</w:LidThemeComplexScript> <w:Compatibility> <w:BreakWrappedTables /> <w:SnapToGridInCell /> <w:WrapTextWithPunct /> <w:UseAsianBreakRules /> <w:DontGrowAutofit /> <w:SplitPgBreakAndParaMark /> <w:EnableOpenTypeKerning /> <w:DontFlipMirrorIndents /> <w:OverrideTableStyleHps /> </w:Compatibility> <m:mathPr> <m:mathFont m:val="Cambria Math" /> <m:brkBin m:val="before" /> <m:brkBinSub m:val="&#45;-" /> <m:smallFrac m:val="off" /> <m:dispDef /> <m:lMargin m:val="0" /> <m:rMargin m:val="0" /> <m:defJc m:val="centerGroup" /> <m:wrapIndent m:val="1440" /> <m:intLim m:val="subSup" /> <m:naryLim m:val="undOvr" /> </m:mathPr></w:WordDocument> </xml><![endif]--><!--[if gte mso 9]><xml> <w:LatentStyles DefLockedState="false" DefUnhideWhenUsed="false" DefSemiHidden="false" DefQFormat="false" DefPriority="99" LatentStyleCount="374"> <w:LsdException Locked="false" Priority="0" QFormat="true" Name="Normal" /> <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 1" /> <w:LsdException Locked="false" Priority="9" SemiHidden="true" UnhideWhenUsed="true" QFormat="true" Name="heading 2" /> <w:LsdException Locked="false" Priority="9" SemiHidden="true" UnhideWhenUsed="true" QFormat="true" Name="heading 3" /> <w:LsdException Locked="false" Priority="9" SemiHidden="true" UnhideWhenUsed="true" QFormat="true" Name="heading 4" /> <w:LsdException Locked="false" Priority="9" SemiHidden="true" UnhideWhenUsed="true" QFormat="true" Name="heading 5" /> <w:LsdException Locked="false" Priority="9" SemiHidden="true" UnhideWhenUsed="true" QFormat="true" Name="heading 6" /> <w:LsdException Locked="false" Priority="9" SemiHidden="true" UnhideWhenUsed="true" QFormat="true" Name="heading 7" /> <w:LsdException Locked="false" Priority="9" SemiHidden="true" UnhideWhenUsed="true" QFormat="true" Name="heading 8" /> <w:LsdException Locked="false" Priority="9" SemiHidden="true" UnhideWhenUsed="true" QFormat="true" Name="heading 9" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="index 1" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="index 2" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="index 3" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="index 4" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="index 5" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="index 6" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="index 7" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="index 8" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="index 9" /> <w:LsdException Locked="false" Priority="39" SemiHidden="true" UnhideWhenUsed="true" Name="toc 1" /> <w:LsdException Locked="false" Priority="39" SemiHidden="true" UnhideWhenUsed="true" Name="toc 2" /> <w:LsdException Locked="false" Priority="39" SemiHidden="true" UnhideWhenUsed="true" Name="toc 3" /> <w:LsdException Locked="false" Priority="39" SemiHidden="true" UnhideWhenUsed="true" Name="toc 4" /> <w:LsdException Locked="false" Priority="39" SemiHidden="true" UnhideWhenUsed="true" Name="toc 5" /> <w:LsdException Locked="false" Priority="39" SemiHidden="true" UnhideWhenUsed="true" Name="toc 6" /> <w:LsdException Locked="false" Priority="39" SemiHidden="true" UnhideWhenUsed="true" Name="toc 7" /> <w:LsdException Locked="false" Priority="39" SemiHidden="true" UnhideWhenUsed="true" Name="toc 8" /> <w:LsdException Locked="false" Priority="39" SemiHidden="true" UnhideWhenUsed="true" Name="toc 9" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Normal Indent" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="footnote text" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="annotation text" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="header" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="footer" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="index heading" /> <w:LsdException Locked="false" Priority="35" SemiHidden="true" UnhideWhenUsed="true" QFormat="true" Name="caption" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="table of figures" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="envelope address" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="envelope return" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="footnote reference" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="annotation reference" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="line number" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="page number" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="endnote reference" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="endnote text" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="table of authorities" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="macro" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="toa heading" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="List" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="List Bullet" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="List Number" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="List 2" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="List 3" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="List 4" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="List 5" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="List Bullet 2" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="List Bullet 3" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="List Bullet 4" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="List Bullet 5" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="List Number 2" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="List Number 3" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="List Number 4" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="List Number 5" /> <w:LsdException Locked="false" Priority="10" QFormat="true" Name="Title" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Closing" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Signature" /> <w:LsdException Locked="false" Priority="1" SemiHidden="true" UnhideWhenUsed="true" Name="Default Paragraph Font" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Body Text" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Body Text Indent" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="List Continue" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="List Continue 2" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="List Continue 3" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="List Continue 4" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="List Continue 5" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Message Header" /> <w:LsdException Locked="false" Priority="11" QFormat="true" Name="Subtitle" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Salutation" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Date" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Body Text First Indent" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Body Text First Indent 2" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Note Heading" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Body Text 2" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Body Text 3" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Body Text Indent 2" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Body Text Indent 3" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Block Text" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Hyperlink" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="FollowedHyperlink" /> <w:LsdException Locked="false" Priority="22" QFormat="true" Name="Strong" /> <w:LsdException Locked="false" Priority="20" QFormat="true" Name="Emphasis" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Document Map" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Plain Text" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="E-mail Signature" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="HTML Top of Form" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="HTML Bottom of Form" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Normal (Web)" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="HTML Acronym" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="HTML Address" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="HTML Cite" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="HTML Code" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="HTML Definition" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="HTML Keyboard" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="HTML Preformatted" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="HTML Sample" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="HTML Typewriter" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="HTML Variable" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Normal Table" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="annotation subject" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="No List" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Outline List 1" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Outline List 2" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Outline List 3" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Simple 1" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Simple 2" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Simple 3" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Classic 1" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Classic 2" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Classic 3" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Classic 4" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Colorful 1" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Colorful 2" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Colorful 3" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Columns 1" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Columns 2" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Columns 3" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Columns 4" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Columns 5" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Grid 1" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Grid 2" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Grid 3" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Grid 4" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Grid 5" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Grid 6" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Grid 7" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Grid 8" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table List 1" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table List 2" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table List 3" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table List 4" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table List 5" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table List 6" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table List 7" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table List 8" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table 3D effects 1" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table 3D effects 2" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table 3D effects 3" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Contemporary" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Elegant" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Professional" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Subtle 1" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Subtle 2" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Web 1" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Web 2" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Web 3" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Balloon Text" /> <w:LsdException Locked="false" Priority="39" Name="Table Grid" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Theme" /> <w:LsdException Locked="false" SemiHidden="true" Name="Placeholder Text" /> <w:LsdException Locked="false" Priority="1" QFormat="true" Name="No Spacing" /> <w:LsdException Locked="false" Priority="60" Name="Light Shading" /> <w:LsdException Locked="false" Priority="61" Name="Light List" /> <w:LsdException Locked="false" Priority="62" Name="Light Grid" /> <w:LsdException Locked="false" Priority="63" Name="Medium Shading 1" /> <w:LsdException Locked="false" Priority="64" Name="Medium Shading 2" /> <w:LsdException Locked="false" Priority="65" Name="Medium List 1" /> <w:LsdException Locked="false" Priority="66" Name="Medium List 2" /> <w:LsdException Locked="false" Priority="67" Name="Medium Grid 1" /> <w:LsdException Locked="false" Priority="68" Name="Medium Grid 2" /> <w:LsdException Locked="false" Priority="69" Name="Medium Grid 3" /> <w:LsdException Locked="false" Priority="70" Name="Dark List" /> <w:LsdException Locked="false" Priority="71" Name="Colorful Shading" /> <w:LsdException Locked="false" Priority="72" Name="Colorful List" /> <w:LsdException Locked="false" Priority="73" Name="Colorful Grid" /> <w:LsdException Locked="false" Priority="60" Name="Light Shading Accent 1" /> <w:LsdException Locked="false" Priority="61" Name="Light List Accent 1" /> <w:LsdException Locked="false" Priority="62" Name="Light Grid Accent 1" /> <w:LsdException Locked="false" Priority="63" Name="Medium Shading 1 Accent 1" /> <w:LsdException Locked="false" Priority="64" Name="Medium Shading 2 Accent 1" /> <w:LsdException Locked="false" Priority="65" Name="Medium List 1 Accent 1" /> <w:LsdException Locked="false" SemiHidden="true" Name="Revision" /> <w:LsdException Locked="false" Priority="34" QFormat="true" Name="List Paragraph" /> <w:LsdException Locked="false" Priority="29" QFormat="true" Name="Quote" /> <w:LsdException Locked="false" Priority="30" QFormat="true" Name="Intense Quote" /> <w:LsdException Locked="false" Priority="66" Name="Medium List 2 Accent 1" /> <w:LsdException Locked="false" Priority="67" Name="Medium Grid 1 Accent 1" /> <w:LsdException Locked="false" Priority="68" Name="Medium Grid 2 Accent 1" /> <w:LsdException Locked="false" Priority="69" Name="Medium Grid 3 Accent 1" /> <w:LsdException Locked="false" Priority="70" Name="Dark List Accent 1" /> <w:LsdException Locked="false" Priority="71" Name="Colorful Shading Accent 1" /> <w:LsdException Locked="false" Priority="72" Name="Colorful List Accent 1" /> <w:LsdException Locked="false" Priority="73" Name="Colorful Grid Accent 1" /> <w:LsdException Locked="false" Priority="60" Name="Light Shading Accent 2" /> <w:LsdException Locked="false" Priority="61" Name="Light List Accent 2" /> <w:LsdException Locked="false" Priority="62" Name="Light Grid Accent 2" /> <w:LsdException Locked="false" Priority="63" Name="Medium Shading 1 Accent 2" /> <w:LsdException Locked="false" Priority="64" Name="Medium Shading 2 Accent 2" /> <w:LsdException Locked="false" Priority="65" Name="Medium List 1 Accent 2" /> <w:LsdException Locked="false" Priority="66" Name="Medium List 2 Accent 2" /> <w:LsdException Locked="false" Priority="67" Name="Medium Grid 1 Accent 2" /> <w:LsdException Locked="false" Priority="68" Name="Medium Grid 2 Accent 2" /> <w:LsdException Locked="false" Priority="69" Name="Medium Grid 3 Accent 2" /> <w:LsdException Locked="false" Priority="70" Name="Dark List Accent 2" /> <w:LsdException Locked="false" Priority="71" Name="Colorful Shading Accent 2" /> <w:LsdException Locked="false" Priority="72" Name="Colorful List Accent 2" /> <w:LsdException Locked="false" Priority="73" Name="Colorful Grid Accent 2" /> <w:LsdException Locked="false" Priority="60" Name="Light Shading Accent 3" /> <w:LsdException Locked="false" Priority="61" Name="Light List Accent 3" /> <w:LsdException Locked="false" Priority="62" Name="Light Grid Accent 3" /> <w:LsdException Locked="false" Priority="63" Name="Medium Shading 1 Accent 3" /> <w:LsdException Locked="false" Priority="64" Name="Medium Shading 2 Accent 3" /> <w:LsdException Locked="false" Priority="65" Name="Medium List 1 Accent 3" /> <w:LsdException Locked="false" Priority="66" Name="Medium List 2 Accent 3" /> <w:LsdException Locked="false" Priority="67" Name="Medium Grid 1 Accent 3" /> <w:LsdException Locked="false" Priority="68" Name="Medium Grid 2 Accent 3" /> <w:LsdException Locked="false" Priority="69" Name="Medium Grid 3 Accent 3" /> <w:LsdException Locked="false" Priority="70" Name="Dark List Accent 3" /> <w:LsdException Locked="false" Priority="71" Name="Colorful Shading Accent 3" /> <w:LsdException Locked="false" Priority="72" Name="Colorful List Accent 3" /> <w:LsdException Locked="false" Priority="73" Name="Colorful Grid Accent 3" /> <w:LsdException Locked="false" Priority="60" Name="Light Shading Accent 4" /> <w:LsdException Locked="false" Priority="61" Name="Light List Accent 4" /> <w:LsdException Locked="false" Priority="62" Name="Light Grid Accent 4" /> <w:LsdException Locked="false" Priority="63" Name="Medium Shading 1 Accent 4" /> <w:LsdException Locked="false" Priority="64" Name="Medium Shading 2 Accent 4" /> <w:LsdException Locked="false" Priority="65" Name="Medium List 1 Accent 4" /> <w:LsdException Locked="false" Priority="66" Name="Medium List 2 Accent 4" /> <w:LsdException Locked="false" Priority="67" Name="Medium Grid 1 Accent 4" /> <w:LsdException Locked="false" Priority="68" Name="Medium Grid 2 Accent 4" /> <w:LsdException Locked="false" Priority="69" Name="Medium Grid 3 Accent 4" /> <w:LsdException Locked="false" Priority="70" Name="Dark List Accent 4" /> <w:LsdException Locked="false" Priority="71" Name="Colorful Shading Accent 4" /> <w:LsdException Locked="false" Priority="72" Name="Colorful List Accent 4" /> <w:LsdException Locked="false" Priority="73" Name="Colorful Grid Accent 4" /> <w:LsdException Locked="false" Priority="60" Name="Light Shading Accent 5" /> <w:LsdException Locked="false" Priority="61" Name="Light List Accent 5" /> <w:LsdException Locked="false" Priority="62" Name="Light Grid Accent 5" /> <w:LsdException Locked="false" Priority="63" Name="Medium Shading 1 Accent 5" /> <w:LsdException Locked="false" Priority="64" Name="Medium Shading 2 Accent 5" /> <w:LsdException Locked="false" Priority="65" Name="Medium List 1 Accent 5" /> <w:LsdException Locked="false" Priority="66" Name="Medium List 2 Accent 5" /> <w:LsdException Locked="false" Priority="67" Name="Medium Grid 1 Accent 5" /> <w:LsdException Locked="false" Priority="68" Name="Medium Grid 2 Accent 5" /> <w:LsdException Locked="false" Priority="69" Name="Medium Grid 3 Accent 5" /> <w:LsdException Locked="false" Priority="70" Name="Dark List Accent 5" /> <w:LsdException Locked="false" Priority="71" Name="Colorful Shading Accent 5" /> <w:LsdException Locked="false" Priority="72" Name="Colorful List Accent 5" /> <w:LsdException Locked="false" Priority="73" Name="Colorful Grid Accent 5" /> <w:LsdException Locked="false" Priority="60" Name="Light Shading Accent 6" /> <w:LsdException Locked="false" Priority="61" Name="Light List Accent 6" /> <w:LsdException Locked="false" Priority="62" Name="Light Grid Accent 6" /> <w:LsdException Locked="false" Priority="63" Name="Medium Shading 1 Accent 6" /> <w:LsdException Locked="false" Priority="64" Name="Medium Shading 2 Accent 6" /> <w:LsdException Locked="false" Priority="65" Name="Medium List 1 Accent 6" /> <w:LsdException Locked="false" Priority="66" Name="Medium List 2 Accent 6" /> <w:LsdException Locked="false" Priority="67" Name="Medium Grid 1 Accent 6" /> <w:LsdException Locked="false" Priority="68" Name="Medium Grid 2 Accent 6" /> <w:LsdException Locked="false" Priority="69" Name="Medium Grid 3 Accent 6" /> <w:LsdException Locked="false" Priority="70" Name="Dark List Accent 6" /> <w:LsdException Locked="false" Priority="71" Name="Colorful Shading Accent 6" /> <w:LsdException Locked="false" Priority="72" Name="Colorful List Accent 6" /> <w:LsdException Locked="false" Priority="73" Name="Colorful Grid Accent 6" /> <w:LsdException Locked="false" Priority="19" QFormat="true" Name="Subtle Emphasis" /> <w:LsdException Locked="false" Priority="21" QFormat="true" Name="Intense Emphasis" /> <w:LsdException Locked="false" Priority="31" QFormat="true" Name="Subtle Reference" /> <w:LsdException Locked="false" Priority="32" QFormat="true" Name="Intense Reference" /> <w:LsdException Locked="false" Priority="33" QFormat="true" Name="Book Title" /> <w:LsdException Locked="false" Priority="37" SemiHidden="true" UnhideWhenUsed="true" Name="Bibliography" /> <w:LsdException Locked="false" Priority="39" SemiHidden="true" UnhideWhenUsed="true" QFormat="true" Name="TOC Heading" /> <w:LsdException Locked="false" Priority="41" Name="Plain Table 1" /> <w:LsdException Locked="false" Priority="42" Name="Plain Table 2" /> <w:LsdException Locked="false" Priority="43" Name="Plain Table 3" /> <w:LsdException Locked="false" Priority="44" Name="Plain Table 4" /> <w:LsdException Locked="false" Priority="45" Name="Plain Table 5" /> <w:LsdException Locked="false" Priority="40" Name="Grid Table Light" /> <w:LsdException Locked="false" Priority="46" Name="Grid Table 1 Light" /> <w:LsdException Locked="false" Priority="47" Name="Grid Table 2" /> <w:LsdException Locked="false" Priority="48" Name="Grid Table 3" /> <w:LsdException Locked="false" Priority="49" Name="Grid Table 4" /> <w:LsdException Locked="false" Priority="50" Name="Grid Table 5 Dark" /> <w:LsdException Locked="false" Priority="51" Name="Grid Table 6 Colorful" /> <w:LsdException Locked="false" Priority="52" Name="Grid Table 7 Colorful" /> <w:LsdException Locked="false" Priority="46" Name="Grid Table 1 Light Accent 1" /> <w:LsdException Locked="false" Priority="47" Name="Grid Table 2 Accent 1" /> <w:LsdException Locked="false" Priority="48" Name="Grid Table 3 Accent 1" /> <w:LsdException Locked="false" Priority="49" Name="Grid Table 4 Accent 1" /> <w:LsdException Locked="false" Priority="50" Name="Grid Table 5 Dark Accent 1" /> <w:LsdException Locked="false" Priority="51" Name="Grid Table 6 Colorful Accent 1" /> <w:LsdException Locked="false" Priority="52" Name="Grid Table 7 Colorful Accent 1" /> <w:LsdException Locked="false" Priority="46" Name="Grid Table 1 Light Accent 2" /> <w:LsdException Locked="false" Priority="47" Name="Grid Table 2 Accent 2" /> <w:LsdException Locked="false" Priority="48" Name="Grid Table 3 Accent 2" /> <w:LsdException Locked="false" Priority="49" Name="Grid Table 4 Accent 2" /> <w:LsdException Locked="false" Priority="50" Name="Grid Table 5 Dark Accent 2" /> <w:LsdException Locked="false" Priority="51" Name="Grid Table 6 Colorful Accent 2" /> <w:LsdException Locked="false" Priority="52" Name="Grid Table 7 Colorful Accent 2" /> <w:LsdException Locked="false" Priority="46" Name="Grid Table 1 Light Accent 3" /> <w:LsdException Locked="false" Priority="47" Name="Grid Table 2 Accent 3" /> <w:LsdException Locked="false" Priority="48" Name="Grid Table 3 Accent 3" /> <w:LsdException Locked="false" Priority="49" Name="Grid Table 4 Accent 3" /> <w:LsdException Locked="false" Priority="50" Name="Grid Table 5 Dark Accent 3" /> <w:LsdException Locked="false" Priority="51" Name="Grid Table 6 Colorful Accent 3" /> <w:LsdException Locked="false" Priority="52" Name="Grid Table 7 Colorful Accent 3" /> <w:LsdException Locked="false" Priority="46" Name="Grid Table 1 Light Accent 4" /> <w:LsdException Locked="false" Priority="47" Name="Grid Table 2 Accent 4" /> <w:LsdException Locked="false" Priority="48" Name="Grid Table 3 Accent 4" /> <w:LsdException Locked="false" Priority="49" Name="Grid Table 4 Accent 4" /> <w:LsdException Locked="false" Priority="50" Name="Grid Table 5 Dark Accent 4" /> <w:LsdException Locked="false" Priority="51" Name="Grid Table 6 Colorful Accent 4" /> <w:LsdException Locked="false" Priority="52" Name="Grid Table 7 Colorful Accent 4" /> <w:LsdException Locked="false" Priority="46" Name="Grid Table 1 Light Accent 5" /> <w:LsdException Locked="false" Priority="47" Name="Grid Table 2 Accent 5" /> <w:LsdException Locked="false" Priority="48" Name="Grid Table 3 Accent 5" /> <w:LsdException Locked="false" Priority="49" Name="Grid Table 4 Accent 5" /> <w:LsdException Locked="false" Priority="50" Name="Grid Table 5 Dark Accent 5" /> <w:LsdException Locked="false" Priority="51" Name="Grid Table 6 Colorful Accent 5" /> <w:LsdException Locked="false" Priority="52" Name="Grid Table 7 Colorful Accent 5" /> <w:LsdException Locked="false" Priority="46" Name="Grid Table 1 Light Accent 6" /> <w:LsdException Locked="false" Priority="47" Name="Grid Table 2 Accent 6" /> <w:LsdException Locked="false" Priority="48" Name="Grid Table 3 Accent 6" /> <w:LsdException Locked="false" Priority="49" Name="Grid Table 4 Accent 6" /> <w:LsdException Locked="false" Priority="50" Name="Grid Table 5 Dark Accent 6" /> <w:LsdException Locked="false" Priority="51" Name="Grid Table 6 Colorful Accent 6" /> <w:LsdException Locked="false" Priority="52" Name="Grid Table 7 Colorful Accent 6" /> <w:LsdException Locked="false" Priority="46" Name="List Table 1 Light" /> <w:LsdException Locked="false" Priority="47" Name="List Table 2" /> <w:LsdException Locked="false" Priority="48" Name="List Table 3" /> <w:LsdException Locked="false" Priority="49" Name="List Table 4" /> <w:LsdException Locked="false" Priority="50" Name="List Table 5 Dark" /> <w:LsdException Locked="false" Priority="51" Name="List Table 6 Colorful" /> <w:LsdException Locked="false" Priority="52" Name="List Table 7 Colorful" /> <w:LsdException Locked="false" Priority="46" Name="List Table 1 Light Accent 1" /> <w:LsdException Locked="false" Priority="47" Name="List Table 2 Accent 1" /> <w:LsdException Locked="false" Priority="48" Name="List Table 3 Accent 1" /> <w:LsdException Locked="false" Priority="49" Name="List Table 4 Accent 1" /> <w:LsdException Locked="false" Priority="50" Name="List Table 5 Dark Accent 1" /> <w:LsdException Locked="false" Priority="51" Name="List Table 6 Colorful Accent 1" /> <w:LsdException Locked="false" Priority="52" Name="List Table 7 Colorful Accent 1" /> <w:LsdException Locked="false" Priority="46" Name="List Table 1 Light Accent 2" /> <w:LsdException Locked="false" Priority="47" Name="List Table 2 Accent 2" /> <w:LsdException Locked="false" Priority="48" Name="List Table 3 Accent 2" /> <w:LsdException Locked="false" Priority="49" Name="List Table 4 Accent 2" /> <w:LsdException Locked="false" Priority="50" Name="List Table 5 Dark Accent 2" /> <w:LsdException Locked="false" Priority="51" Name="List Table 6 Colorful Accent 2" /> <w:LsdException Locked="false" Priority="52" Name="List Table 7 Colorful Accent 2" /> <w:LsdException Locked="false" Priority="46" Name="List Table 1 Light Accent 3" /> <w:LsdException Locked="false" Priority="47" Name="List Table 2 Accent 3" /> <w:LsdException Locked="false" Priority="48" Name="List Table 3 Accent 3" /> <w:LsdException Locked="false" Priority="49" Name="List Table 4 Accent 3" /> <w:LsdException Locked="false" Priority="50" Name="List Table 5 Dark Accent 3" /> <w:LsdException Locked="false" Priority="51" Name="List Table 6 Colorful Accent 3" /> <w:LsdException Locked="false" Priority="52" Name="List Table 7 Colorful Accent 3" /> <w:LsdException Locked="false" Priority="46" Name="List Table 1 Light Accent 4" /> <w:LsdException Locked="false" Priority="47" Name="List Table 2 Accent 4" /> <w:LsdException Locked="false" Priority="48" Name="List Table 3 Accent 4" /> <w:LsdException Locked="false" Priority="49" Name="List Table 4 Accent 4" /> <w:LsdException Locked="false" Priority="50" Name="List Table 5 Dark Accent 4" /> <w:LsdException Locked="false" Priority="51" Name="List Table 6 Colorful Accent 4" /> <w:LsdException Locked="false" Priority="52" Name="List Table 7 Colorful Accent 4" /> <w:LsdException Locked="false" Priority="46" Name="List Table 1 Light Accent 5" /> <w:LsdException Locked="false" Priority="47" Name="List Table 2 Accent 5" /> <w:LsdException Locked="false" Priority="48" Name="List Table 3 Accent 5" /> <w:LsdException Locked="false" Priority="49" Name="List Table 4 Accent 5" /> <w:LsdException Locked="false" Priority="50" Name="List Table 5 Dark Accent 5" /> <w:LsdException Locked="false" Priority="51" Name="List Table 6 Colorful Accent 5" /> <w:LsdException Locked="false" Priority="52" Name="List Table 7 Colorful Accent 5" /> <w:LsdException Locked="false" Priority="46" Name="List Table 1 Light Accent 6" /> <w:LsdException Locked="false" Priority="47" Name="List Table 2 Accent 6" /> <w:LsdException Locked="false" Priority="48" Name="List Table 3 Accent 6" /> <w:LsdException Locked="false" Priority="49" Name="List Table 4 Accent 6" /> <w:LsdException Locked="false" Priority="50" Name="List Table 5 Dark Accent 6" /> <w:LsdException Locked="false" Priority="51" Name="List Table 6 Colorful Accent 6" /> <w:LsdException Locked="false" Priority="52" Name="List Table 7 Colorful Accent 6" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Mention" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Smart Hyperlink" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Hashtag" /> </w:LatentStyles> </xml><![endif]--><!--[if gte mso 9]><xml> <w:LatentStyles DefLockedState="false" DefUnhideWhenUsed="false" DefSemiHidden="false" DefQFormat="false" DefPriority="99" LatentStyleCount="374"> <w:LsdException Locked="false" Priority="0" QFormat="true" Name="Normal" /> <w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 1" /> <w:LsdException Locked="false" Priority="9" SemiHidden="true" UnhideWhenUsed="true" QFormat="true" Name="heading 2" /> <w:LsdException Locked="false" Priority="9" SemiHidden="true" UnhideWhenUsed="true" QFormat="true" Name="heading 3" /> <w:LsdException Locked="false" Priority="9" SemiHidden="true" UnhideWhenUsed="true" QFormat="true" Name="heading 4" /> <w:LsdException Locked="false" Priority="9" SemiHidden="true" UnhideWhenUsed="true" QFormat="true" Name="heading 5" /> <w:LsdException Locked="false" Priority="9" SemiHidden="true" UnhideWhenUsed="true" QFormat="true" Name="heading 6" /> <w:LsdException Locked="false" Priority="9" SemiHidden="true" UnhideWhenUsed="true" QFormat="true" Name="heading 7" /> <w:LsdException Locked="false" Priority="9" SemiHidden="true" UnhideWhenUsed="true" QFormat="true" Name="heading 8" /> <w:LsdException Locked="false" Priority="9" SemiHidden="true" UnhideWhenUsed="true" QFormat="true" Name="heading 9" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="index 1" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="index 2" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="index 3" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="index 4" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="index 5" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="index 6" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="index 7" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="index 8" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="index 9" /> <w:LsdException Locked="false" Priority="39" SemiHidden="true" UnhideWhenUsed="true" Name="toc 1" /> <w:LsdException Locked="false" Priority="39" SemiHidden="true" UnhideWhenUsed="true" Name="toc 2" /> <w:LsdException Locked="false" Priority="39" SemiHidden="true" UnhideWhenUsed="true" Name="toc 3" /> <w:LsdException Locked="false" Priority="39" SemiHidden="true" UnhideWhenUsed="true" Name="toc 4" /> <w:LsdException Locked="false" Priority="39" SemiHidden="true" UnhideWhenUsed="true" Name="toc 5" /> <w:LsdException Locked="false" Priority="39" SemiHidden="true" UnhideWhenUsed="true" Name="toc 6" /> <w:LsdException Locked="false" Priority="39" SemiHidden="true" UnhideWhenUsed="true" Name="toc 7" /> <w:LsdException Locked="false" Priority="39" SemiHidden="true" UnhideWhenUsed="true" Name="toc 8" /> <w:LsdException Locked="false" Priority="39" SemiHidden="true" UnhideWhenUsed="true" Name="toc 9" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Normal Indent" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="footnote text" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="annotation text" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="header" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="footer" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="index heading" /> <w:LsdException Locked="false" Priority="35" SemiHidden="true" UnhideWhenUsed="true" QFormat="true" Name="caption" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="table of figures" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="envelope address" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="envelope return" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="footnote reference" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="annotation reference" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="line number" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="page number" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="endnote reference" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="endnote text" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="table of authorities" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="macro" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="toa heading" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="List" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="List Bullet" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="List Number" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="List 2" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="List 3" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="List 4" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="List 5" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="List Bullet 2" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="List Bullet 3" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="List Bullet 4" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="List Bullet 5" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="List Number 2" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="List Number 3" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="List Number 4" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="List Number 5" /> <w:LsdException Locked="false" Priority="10" QFormat="true" Name="Title" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Closing" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Signature" /> <w:LsdException Locked="false" Priority="1" SemiHidden="true" UnhideWhenUsed="true" Name="Default Paragraph Font" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Body Text" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Body Text Indent" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="List Continue" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="List Continue 2" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="List Continue 3" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="List Continue 4" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="List Continue 5" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Message Header" /> <w:LsdException Locked="false" Priority="11" QFormat="true" Name="Subtitle" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Salutation" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Date" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Body Text First Indent" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Body Text First Indent 2" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Note Heading" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Body Text 2" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Body Text 3" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Body Text Indent 2" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Body Text Indent 3" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Block Text" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Hyperlink" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="FollowedHyperlink" /> <w:LsdException Locked="false" Priority="22" QFormat="true" Name="Strong" /> <w:LsdException Locked="false" Priority="20" QFormat="true" Name="Emphasis" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Document Map" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Plain Text" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="E-mail Signature" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="HTML Top of Form" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="HTML Bottom of Form" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Normal (Web)" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="HTML Acronym" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="HTML Address" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="HTML Cite" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="HTML Code" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="HTML Definition" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="HTML Keyboard" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="HTML Preformatted" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="HTML Sample" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="HTML Typewriter" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="HTML Variable" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Normal Table" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="annotation subject" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="No List" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Outline List 1" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Outline List 2" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Outline List 3" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Simple 1" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Simple 2" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Simple 3" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Classic 1" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Classic 2" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Classic 3" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Classic 4" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Colorful 1" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Colorful 2" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Colorful 3" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Columns 1" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Columns 2" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Columns 3" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Columns 4" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Columns 5" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Grid 1" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Grid 2" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Grid 3" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Grid 4" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Grid 5" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Grid 6" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Grid 7" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Grid 8" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table List 1" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table List 2" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table List 3" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table List 4" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table List 5" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table List 6" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table List 7" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table List 8" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table 3D effects 1" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table 3D effects 2" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table 3D effects 3" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Contemporary" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Elegant" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Professional" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Subtle 1" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Subtle 2" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Web 1" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Web 2" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Web 3" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Balloon Text" /> <w:LsdException Locked="false" Priority="39" Name="Table Grid" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Table Theme" /> <w:LsdException Locked="false" SemiHidden="true" Name="Placeholder Text" /> <w:LsdException Locked="false" Priority="1" QFormat="true" Name="No Spacing" /> <w:LsdException Locked="false" Priority="60" Name="Light Shading" /> <w:LsdException Locked="false" Priority="61" Name="Light List" /> <w:LsdException Locked="false" Priority="62" Name="Light Grid" /> <w:LsdException Locked="false" Priority="63" Name="Medium Shading 1" /> <w:LsdException Locked="false" Priority="64" Name="Medium Shading 2" /> <w:LsdException Locked="false" Priority="65" Name="Medium List 1" /> <w:LsdException Locked="false" Priority="66" Name="Medium List 2" /> <w:LsdException Locked="false" Priority="67" Name="Medium Grid 1" /> <w:LsdException Locked="false" Priority="68" Name="Medium Grid 2" /> <w:LsdException Locked="false" Priority="69" Name="Medium Grid 3" /> <w:LsdException Locked="false" Priority="70" Name="Dark List" /> <w:LsdException Locked="false" Priority="71" Name="Colorful Shading" /> <w:LsdException Locked="false" Priority="72" Name="Colorful List" /> <w:LsdException Locked="false" Priority="73" Name="Colorful Grid" /> <w:LsdException Locked="false" Priority="60" Name="Light Shading Accent 1" /> <w:LsdException Locked="false" Priority="61" Name="Light List Accent 1" /> <w:LsdException Locked="false" Priority="62" Name="Light Grid Accent 1" /> <w:LsdException Locked="false" Priority="63" Name="Medium Shading 1 Accent 1" /> <w:LsdException Locked="false" Priority="64" Name="Medium Shading 2 Accent 1" /> <w:LsdException Locked="false" Priority="65" Name="Medium List 1 Accent 1" /> <w:LsdException Locked="false" SemiHidden="true" Name="Revision" /> <w:LsdException Locked="false" Priority="34" QFormat="true" Name="List Paragraph" /> <w:LsdException Locked="false" Priority="29" QFormat="true" Name="Quote" /> <w:LsdException Locked="false" Priority="30" QFormat="true" Name="Intense Quote" /> <w:LsdException Locked="false" Priority="66" Name="Medium List 2 Accent 1" /> <w:LsdException Locked="false" Priority="67" Name="Medium Grid 1 Accent 1" /> <w:LsdException Locked="false" Priority="68" Name="Medium Grid 2 Accent 1" /> <w:LsdException Locked="false" Priority="69" Name="Medium Grid 3 Accent 1" /> <w:LsdException Locked="false" Priority="70" Name="Dark List Accent 1" /> <w:LsdException Locked="false" Priority="71" Name="Colorful Shading Accent 1" /> <w:LsdException Locked="false" Priority="72" Name="Colorful List Accent 1" /> <w:LsdException Locked="false" Priority="73" Name="Colorful Grid Accent 1" /> <w:LsdException Locked="false" Priority="60" Name="Light Shading Accent 2" /> <w:LsdException Locked="false" Priority="61" Name="Light List Accent 2" /> <w:LsdException Locked="false" Priority="62" Name="Light Grid Accent 2" /> <w:LsdException Locked="false" Priority="63" Name="Medium Shading 1 Accent 2" /> <w:LsdException Locked="false" Priority="64" Name="Medium Shading 2 Accent 2" /> <w:LsdException Locked="false" Priority="65" Name="Medium List 1 Accent 2" /> <w:LsdException Locked="false" Priority="66" Name="Medium List 2 Accent 2" /> <w:LsdException Locked="false" Priority="67" Name="Medium Grid 1 Accent 2" /> <w:LsdException Locked="false" Priority="68" Name="Medium Grid 2 Accent 2" /> <w:LsdException Locked="false" Priority="69" Name="Medium Grid 3 Accent 2" /> <w:LsdException Locked="false" Priority="70" Name="Dark List Accent 2" /> <w:LsdException Locked="false" Priority="71" Name="Colorful Shading Accent 2" /> <w:LsdException Locked="false" Priority="72" Name="Colorful List Accent 2" /> <w:LsdException Locked="false" Priority="73" Name="Colorful Grid Accent 2" /> <w:LsdException Locked="false" Priority="60" Name="Light Shading Accent 3" /> <w:LsdException Locked="false" Priority="61" Name="Light List Accent 3" /> <w:LsdException Locked="false" Priority="62" Name="Light Grid Accent 3" /> <w:LsdException Locked="false" Priority="63" Name="Medium Shading 1 Accent 3" /> <w:LsdException Locked="false" Priority="64" Name="Medium Shading 2 Accent 3" /> <w:LsdException Locked="false" Priority="65" Name="Medium List 1 Accent 3" /> <w:LsdException Locked="false" Priority="66" Name="Medium List 2 Accent 3" /> <w:LsdException Locked="false" Priority="67" Name="Medium Grid 1 Accent 3" /> <w:LsdException Locked="false" Priority="68" Name="Medium Grid 2 Accent 3" /> <w:LsdException Locked="false" Priority="69" Name="Medium Grid 3 Accent 3" /> <w:LsdException Locked="false" Priority="70" Name="Dark List Accent 3" /> <w:LsdException Locked="false" Priority="71" Name="Colorful Shading Accent 3" /> <w:LsdException Locked="false" Priority="72" Name="Colorful List Accent 3" /> <w:LsdException Locked="false" Priority="73" Name="Colorful Grid Accent 3" /> <w:LsdException Locked="false" Priority="60" Name="Light Shading Accent 4" /> <w:LsdException Locked="false" Priority="61" Name="Light List Accent 4" /> <w:LsdException Locked="false" Priority="62" Name="Light Grid Accent 4" /> <w:LsdException Locked="false" Priority="63" Name="Medium Shading 1 Accent 4" /> <w:LsdException Locked="false" Priority="64" Name="Medium Shading 2 Accent 4" /> <w:LsdException Locked="false" Priority="65" Name="Medium List 1 Accent 4" /> <w:LsdException Locked="false" Priority="66" Name="Medium List 2 Accent 4" /> <w:LsdException Locked="false" Priority="67" Name="Medium Grid 1 Accent 4" /> <w:LsdException Locked="false" Priority="68" Name="Medium Grid 2 Accent 4" /> <w:LsdException Locked="false" Priority="69" Name="Medium Grid 3 Accent 4" /> <w:LsdException Locked="false" Priority="70" Name="Dark List Accent 4" /> <w:LsdException Locked="false" Priority="71" Name="Colorful Shading Accent 4" /> <w:LsdException Locked="false" Priority="72" Name="Colorful List Accent 4" /> <w:LsdException Locked="false" Priority="73" Name="Colorful Grid Accent 4" /> <w:LsdException Locked="false" Priority="60" Name="Light Shading Accent 5" /> <w:LsdException Locked="false" Priority="61" Name="Light List Accent 5" /> <w:LsdException Locked="false" Priority="62" Name="Light Grid Accent 5" /> <w:LsdException Locked="false" Priority="63" Name="Medium Shading 1 Accent 5" /> <w:LsdException Locked="false" Priority="64" Name="Medium Shading 2 Accent 5" /> <w:LsdException Locked="false" Priority="65" Name="Medium List 1 Accent 5" /> <w:LsdException Locked="false" Priority="66" Name="Medium List 2 Accent 5" /> <w:LsdException Locked="false" Priority="67" Name="Medium Grid 1 Accent 5" /> <w:LsdException Locked="false" Priority="68" Name="Medium Grid 2 Accent 5" /> <w:LsdException Locked="false" Priority="69" Name="Medium Grid 3 Accent 5" /> <w:LsdException Locked="false" Priority="70" Name="Dark List Accent 5" /> <w:LsdException Locked="false" Priority="71" Name="Colorful Shading Accent 5" /> <w:LsdException Locked="false" Priority="72" Name="Colorful List Accent 5" /> <w:LsdException Locked="false" Priority="73" Name="Colorful Grid Accent 5" /> <w:LsdException Locked="false" Priority="60" Name="Light Shading Accent 6" /> <w:LsdException Locked="false" Priority="61" Name="Light List Accent 6" /> <w:LsdException Locked="false" Priority="62" Name="Light Grid Accent 6" /> <w:LsdException Locked="false" Priority="63" Name="Medium Shading 1 Accent 6" /> <w:LsdException Locked="false" Priority="64" Name="Medium Shading 2 Accent 6" /> <w:LsdException Locked="false" Priority="65" Name="Medium List 1 Accent 6" /> <w:LsdException Locked="false" Priority="66" Name="Medium List 2 Accent 6" /> <w:LsdException Locked="false" Priority="67" Name="Medium Grid 1 Accent 6" /> <w:LsdException Locked="false" Priority="68" Name="Medium Grid 2 Accent 6" /> <w:LsdException Locked="false" Priority="69" Name="Medium Grid 3 Accent 6" /> <w:LsdException Locked="false" Priority="70" Name="Dark List Accent 6" /> <w:LsdException Locked="false" Priority="71" Name="Colorful Shading Accent 6" /> <w:LsdException Locked="false" Priority="72" Name="Colorful List Accent 6" /> <w:LsdException Locked="false" Priority="73" Name="Colorful Grid Accent 6" /> <w:LsdException Locked="false" Priority="19" QFormat="true" Name="Subtle Emphasis" /> <w:LsdException Locked="false" Priority="21" QFormat="true" Name="Intense Emphasis" /> <w:LsdException Locked="false" Priority="31" QFormat="true" Name="Subtle Reference" /> <w:LsdException Locked="false" Priority="32" QFormat="true" Name="Intense Reference" /> <w:LsdException Locked="false" Priority="33" QFormat="true" Name="Book Title" /> <w:LsdException Locked="false" Priority="37" SemiHidden="true" UnhideWhenUsed="true" Name="Bibliography" /> <w:LsdException Locked="false" Priority="39" SemiHidden="true" UnhideWhenUsed="true" QFormat="true" Name="TOC Heading" /> <w:LsdException Locked="false" Priority="41" Name="Plain Table 1" /> <w:LsdException Locked="false" Priority="42" Name="Plain Table 2" /> <w:LsdException Locked="false" Priority="43" Name="Plain Table 3" /> <w:LsdException Locked="false" Priority="44" Name="Plain Table 4" /> <w:LsdException Locked="false" Priority="45" Name="Plain Table 5" /> <w:LsdException Locked="false" Priority="40" Name="Grid Table Light" /> <w:LsdException Locked="false" Priority="46" Name="Grid Table 1 Light" /> <w:LsdException Locked="false" Priority="47" Name="Grid Table 2" /> <w:LsdException Locked="false" Priority="48" Name="Grid Table 3" /> <w:LsdException Locked="false" Priority="49" Name="Grid Table 4" /> <w:LsdException Locked="false" Priority="50" Name="Grid Table 5 Dark" /> <w:LsdException Locked="false" Priority="51" Name="Grid Table 6 Colorful" /> <w:LsdException Locked="false" Priority="52" Name="Grid Table 7 Colorful" /> <w:LsdException Locked="false" Priority="46" Name="Grid Table 1 Light Accent 1" /> <w:LsdException Locked="false" Priority="47" Name="Grid Table 2 Accent 1" /> <w:LsdException Locked="false" Priority="48" Name="Grid Table 3 Accent 1" /> <w:LsdException Locked="false" Priority="49" Name="Grid Table 4 Accent 1" /> <w:LsdException Locked="false" Priority="50" Name="Grid Table 5 Dark Accent 1" /> <w:LsdException Locked="false" Priority="51" Name="Grid Table 6 Colorful Accent 1" /> <w:LsdException Locked="false" Priority="52" Name="Grid Table 7 Colorful Accent 1" /> <w:LsdException Locked="false" Priority="46" Name="Grid Table 1 Light Accent 2" /> <w:LsdException Locked="false" Priority="47" Name="Grid Table 2 Accent 2" /> <w:LsdException Locked="false" Priority="48" Name="Grid Table 3 Accent 2" /> <w:LsdException Locked="false" Priority="49" Name="Grid Table 4 Accent 2" /> <w:LsdException Locked="false" Priority="50" Name="Grid Table 5 Dark Accent 2" /> <w:LsdException Locked="false" Priority="51" Name="Grid Table 6 Colorful Accent 2" /> <w:LsdException Locked="false" Priority="52" Name="Grid Table 7 Colorful Accent 2" /> <w:LsdException Locked="false" Priority="46" Name="Grid Table 1 Light Accent 3" /> <w:LsdException Locked="false" Priority="47" Name="Grid Table 2 Accent 3" /> <w:LsdException Locked="false" Priority="48" Name="Grid Table 3 Accent 3" /> <w:LsdException Locked="false" Priority="49" Name="Grid Table 4 Accent 3" /> <w:LsdException Locked="false" Priority="50" Name="Grid Table 5 Dark Accent 3" /> <w:LsdException Locked="false" Priority="51" Name="Grid Table 6 Colorful Accent 3" /> <w:LsdException Locked="false" Priority="52" Name="Grid Table 7 Colorful Accent 3" /> <w:LsdException Locked="false" Priority="46" Name="Grid Table 1 Light Accent 4" /> <w:LsdException Locked="false" Priority="47" Name="Grid Table 2 Accent 4" /> <w:LsdException Locked="false" Priority="48" Name="Grid Table 3 Accent 4" /> <w:LsdException Locked="false" Priority="49" Name="Grid Table 4 Accent 4" /> <w:LsdException Locked="false" Priority="50" Name="Grid Table 5 Dark Accent 4" /> <w:LsdException Locked="false" Priority="51" Name="Grid Table 6 Colorful Accent 4" /> <w:LsdException Locked="false" Priority="52" Name="Grid Table 7 Colorful Accent 4" /> <w:LsdException Locked="false" Priority="46" Name="Grid Table 1 Light Accent 5" /> <w:LsdException Locked="false" Priority="47" Name="Grid Table 2 Accent 5" /> <w:LsdException Locked="false" Priority="48" Name="Grid Table 3 Accent 5" /> <w:LsdException Locked="false" Priority="49" Name="Grid Table 4 Accent 5" /> <w:LsdException Locked="false" Priority="50" Name="Grid Table 5 Dark Accent 5" /> <w:LsdException Locked="false" Priority="51" Name="Grid Table 6 Colorful Accent 5" /> <w:LsdException Locked="false" Priority="52" Name="Grid Table 7 Colorful Accent 5" /> <w:LsdException Locked="false" Priority="46" Name="Grid Table 1 Light Accent 6" /> <w:LsdException Locked="false" Priority="47" Name="Grid Table 2 Accent 6" /> <w:LsdException Locked="false" Priority="48" Name="Grid Table 3 Accent 6" /> <w:LsdException Locked="false" Priority="49" Name="Grid Table 4 Accent 6" /> <w:LsdException Locked="false" Priority="50" Name="Grid Table 5 Dark Accent 6" /> <w:LsdException Locked="false" Priority="51" Name="Grid Table 6 Colorful Accent 6" /> <w:LsdException Locked="false" Priority="52" Name="Grid Table 7 Colorful Accent 6" /> <w:LsdException Locked="false" Priority="46" Name="List Table 1 Light" /> <w:LsdException Locked="false" Priority="47" Name="List Table 2" /> <w:LsdException Locked="false" Priority="48" Name="List Table 3" /> <w:LsdException Locked="false" Priority="49" Name="List Table 4" /> <w:LsdException Locked="false" Priority="50" Name="List Table 5 Dark" /> <w:LsdException Locked="false" Priority="51" Name="List Table 6 Colorful" /> <w:LsdException Locked="false" Priority="52" Name="List Table 7 Colorful" /> <w:LsdException Locked="false" Priority="46" Name="List Table 1 Light Accent 1" /> <w:LsdException Locked="false" Priority="47" Name="List Table 2 Accent 1" /> <w:LsdException Locked="false" Priority="48" Name="List Table 3 Accent 1" /> <w:LsdException Locked="false" Priority="49" Name="List Table 4 Accent 1" /> <w:LsdException Locked="false" Priority="50" Name="List Table 5 Dark Accent 1" /> <w:LsdException Locked="false" Priority="51" Name="List Table 6 Colorful Accent 1" /> <w:LsdException Locked="false" Priority="52" Name="List Table 7 Colorful Accent 1" /> <w:LsdException Locked="false" Priority="46" Name="List Table 1 Light Accent 2" /> <w:LsdException Locked="false" Priority="47" Name="List Table 2 Accent 2" /> <w:LsdException Locked="false" Priority="48" Name="List Table 3 Accent 2" /> <w:LsdException Locked="false" Priority="49" Name="List Table 4 Accent 2" /> <w:LsdException Locked="false" Priority="50" Name="List Table 5 Dark Accent 2" /> <w:LsdException Locked="false" Priority="51" Name="List Table 6 Colorful Accent 2" /> <w:LsdException Locked="false" Priority="52" Name="List Table 7 Colorful Accent 2" /> <w:LsdException Locked="false" Priority="46" Name="List Table 1 Light Accent 3" /> <w:LsdException Locked="false" Priority="47" Name="List Table 2 Accent 3" /> <w:LsdException Locked="false" Priority="48" Name="List Table 3 Accent 3" /> <w:LsdException Locked="false" Priority="49" Name="List Table 4 Accent 3" /> <w:LsdException Locked="false" Priority="50" Name="List Table 5 Dark Accent 3" /> <w:LsdException Locked="false" Priority="51" Name="List Table 6 Colorful Accent 3" /> <w:LsdException Locked="false" Priority="52" Name="List Table 7 Colorful Accent 3" /> <w:LsdException Locked="false" Priority="46" Name="List Table 1 Light Accent 4" /> <w:LsdException Locked="false" Priority="47" Name="List Table 2 Accent 4" /> <w:LsdException Locked="false" Priority="48" Name="List Table 3 Accent 4" /> <w:LsdException Locked="false" Priority="49" Name="List Table 4 Accent 4" /> <w:LsdException Locked="false" Priority="50" Name="List Table 5 Dark Accent 4" /> <w:LsdException Locked="false" Priority="51" Name="List Table 6 Colorful Accent 4" /> <w:LsdException Locked="false" Priority="52" Name="List Table 7 Colorful Accent 4" /> <w:LsdException Locked="false" Priority="46" Name="List Table 1 Light Accent 5" /> <w:LsdException Locked="false" Priority="47" Name="List Table 2 Accent 5" /> <w:LsdException Locked="false" Priority="48" Name="List Table 3 Accent 5" /> <w:LsdException Locked="false" Priority="49" Name="List Table 4 Accent 5" /> <w:LsdException Locked="false" Priority="50" Name="List Table 5 Dark Accent 5" /> <w:LsdException Locked="false" Priority="51" Name="List Table 6 Colorful Accent 5" /> <w:LsdException Locked="false" Priority="52" Name="List Table 7 Colorful Accent 5" /> <w:LsdException Locked="false" Priority="46" Name="List Table 1 Light Accent 6" /> <w:LsdException Locked="false" Priority="47" Name="List Table 2 Accent 6" /> <w:LsdException Locked="false" Priority="48" Name="List Table 3 Accent 6" /> <w:LsdException Locked="false" Priority="49" Name="List Table 4 Accent 6" /> <w:LsdException Locked="false" Priority="50" Name="List Table 5 Dark Accent 6" /> <w:LsdException Locked="false" Priority="51" Name="List Table 6 Colorful Accent 6" /> <w:LsdException Locked="false" Priority="52" Name="List Table 7 Colorful Accent 6" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Mention" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Smart Hyperlink" /> <w:LsdException Locked="false" SemiHidden="true" UnhideWhenUsed="true" Name="Hashtag" /> </w:LatentStyles> </xml><![endif]--><!--[if gte mso 10]> <mce:style><! /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin-top:0in; mso-para-margin-right:0in; mso-para-margin-bottom:8.0pt; mso-para-margin-left:0in; line-height:107%; mso-pagination:widow-orphan; font-size:11.0pt; font-family:"Calibri",sans-serif; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin; mso-bidi-font-family:"Times New Roman"; mso-bidi-theme-font:minor-bidi; mso-fareast-language:EN-US;} --><!--[if gte mso 10]> <mce:style><! /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin-top:0in; mso-para-margin-right:0in; mso-para-margin-bottom:8.0pt; mso-para-margin-left:0in; line-height:107%; mso-pagination:widow-orphan; font-size:11.0pt; font-family:"Calibri",sans-serif; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin; mso-bidi-font-family:"Times New Roman"; mso-bidi-theme-font:minor-bidi; mso-fareast-language:EN-US;} --><!--[endif] --><!--[endif] --></p> <div class="mp-blog-head fix-me"> <h1><a href="https://www.sprottmoney.com/Blog/how-solid-are-canadas-big-banks-peter-diekmeyer.html">How Solid are Canada’s Big Banks? - Peter Diekmeyer</a></h1> <p><a href="https://www.sprottmoney.com/Blog/how-solid-are-canadas-big-banks-peter-diekmeyer.html"></a></p> <p> </p></div> <p class="MsoNormal" style="mso-margin-top-alt: auto; margin-right: 148.5pt; mso-margin-bottom-alt: auto; line-height: normal;"><a href="https://www.sprottmoney.com/Blog/how-solid-are-canadas-big-banks-peter-diekmeyer.html">CONTRIBUTED BY SPROTT MONEY NEWS</a></p> <p class="MsoNormal" style="mso-margin-top-alt: auto; margin-right: 148.5pt; mso-margin-bottom-alt: auto; line-height: normal;"><a href="https://www.sprottmoney.com/Blog/how-solid-are-canadas-big-banks-peter-diekmeyer.html">(for original click here)</a></p> <div class="WordSection1"> <div class="thumbnail-container"> <div class="post-thumbnail"> <a href="https://www.sprottmoney.com/Blog/how-solid-are-canadas-big-banks-peter-diekmeyer.html" title="How Solid are Canada’s Big Banks? - Peter Diekmeyer"> <p> <img src="https://sprottmoney.com/media/magpleasure/mpblog/list_thumbnail_file/b/c/cache/1/ece9a24a761836a70934a998c163f8c8/bcc0f411a5292befc5cb3a698832eb3c.jpg" alt="How Solid are Canada’s Big Banks? - Peter Diekmeyer" width="331" height="223" class="thumbnail" /><br /> </p></a> </div> </div> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif; mso-ansi-language: EN-CA; mso-fareast-language: EN-CA; mso-no-proof: yes;">&nbsp;</span><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">The World Economic Forum consistently ranks Canada’s banks among the world’s safest<a name="_ftnref1" style="mso-footnote-id: ftn1;"><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><span class="MsoFootnoteReference"><span style="font-size: 12.0pt; line-height: 107%; font-family: &quot;Times New Roman&quot;,serif; mso-fareast-font-family: Calibri; mso-fareast-theme-font: minor-latin; mso-ansi-language: EN-US; mso-fareast-language: EN-US; mso-bidi-language: AR-SA;" lang="EN-US">[1]</span></span></span></span></a>. Competent regulators have overseen stress tests, tightened lending standards and delinquency rates are low. Demographics are good and the country’s diversified economy is backed by a treasure of oil, wood, gold and other natural resources. </span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">So the experts say.</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">Institutional investors, relying on the work of Jeremy Rudin, Canada’s chief bank regulator, agree. In fact Canadian financials accounted for 35.5% of the market capitalization of the benchmark exchange (NBF February). </span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">However this façade hides major uncertainties. Key concerns stand out, which if unaddressed, could spark solvency and liquidity issues in one or more of Canada’s Big Six banks. </span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">The fragilities can be seen in an IMF report<a name="_ftnref2" style="mso-footnote-id: ftn2;"><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><span class="MsoFootnoteReference"><span style="font-size: 12.0pt; line-height: 107%; font-family: &quot;Times New Roman&quot;,serif; mso-fareast-font-family: Calibri; mso-fareast-theme-font: minor-latin; mso-ansi-language: EN-US; mso-fareast-language: EN-US; mso-bidi-language: AR-SA;" lang="EN-US">[2]</span></span></span></span></a>, which calculated that Canada’s financial sector accounted for a stunning 500% of GDP in 2012. Today, the assets of the Big Six banks alone are more than double the size of the country’s economy.</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">Each (RBC, CIBC, Scotiabank, BMO, TD and National Bank) have been designated “systemically important,” which in turn, due to sheer size and interconnectedness, suggests that they are almost certainly “too big to fail.” That means the collapse of any one Big Bank, would threaten to trigger systemic implosion. </span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">More ominously, if Canada’s financial system, arguably the world’s best, is riddled with pores, what does that say about the US, the UK, and Japan? Let alone Italy and Spain?</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">Yet signs of fragility are everywhere. Consider:</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><strong style="mso-bidi-font-weight: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">Complacency following “secret” $114 billion bailout</span></strong></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">A quick review of key metrics suggests Canada’s banking sector, which, on the surface, largely escaped the 2008 financial crisis, has thus learned little from it. </span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">As David Macdonald, demonstrated, in a paper<a name="_ftnref3" style="mso-footnote-id: ftn3;"><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><span class="MsoFootnoteReference"><span style="font-size: 12.0pt; line-height: 107%; font-family: &quot;Times New Roman&quot;,serif; mso-fareast-font-family: Calibri; mso-fareast-theme-font: minor-latin; mso-ansi-language: EN-US; mso-fareast-language: EN-US; mso-bidi-language: AR-SA;" lang="EN-US">[3]</span></span></span></span></a> for the Canadian Center for Policy Alternatives, Canada’s Big Banks benefitted from nearly $114 billion in cash, liquidity and other bailout help, from both local and US sources following the financial crisis. </span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">“Three of Canada’s banks – CIBC, BMO, and Scotiabank – were at some point under water,” Macdonald writes. “With government support exceeding the value of the company.”</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">Sadly, details were largely kept secret Macdonald says, hidden in footnotes and legalese, where even the term “bailout” was shunned. Reforms that could have strengthened the system were thus avoided and the Canadian public remains largely unaware of the dangers.</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">(A Canadian Bankers Association spokesperson denied that any Canadian bank was bailed out or was in danger of failing, but conceded that the Canada Mortgage Housing Corporation (“Canada’s Fannie Mae”) bought up $69 billion worth of assets and that the Bank of Canada advanced additional liquidity funding). </span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><strong style="mso-bidi-font-weight: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">“Canada’s Fannie Mae” piles on risk amidst residential real estate bubble </span></strong></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">In March, the Economist magazine calculated<a name="_ftnref4" style="mso-footnote-id: ftn4;"><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><span class="MsoFootnoteReference"><span style="font-size: 12.0pt; line-height: 107%; font-family: &quot;Times New Roman&quot;,serif; mso-fareast-font-family: Calibri; mso-fareast-theme-font: minor-latin; mso-ansi-language: EN-US; mso-fareast-language: EN-US; mso-bidi-language: AR-SA;" lang="EN-US">[4]</span></span></span></span></a> that Canadian residential housing is 112% overvalued relative to rents and 46% overvalued relative to incomes. Even Canadian bank economists, enablers of previous excesses, now describe average Toronto prices, which surged 23% last year to CAD<a name="_ftnref5" style="mso-footnote-id: ftn5;"><span class="MsoFootnoteReference"><span style="mso-special-character: footnote;"><span class="MsoFootnoteReference"><span style="font-size: 12.0pt; line-height: 107%; font-family: &quot;Times New Roman&quot;,serif; mso-fareast-font-family: Calibri; mso-fareast-theme-font: minor-latin; mso-ansi-language: EN-US; mso-fareast-language: EN-US; mso-bidi-language: AR-SA;" lang="EN-US">[5]</span></span></span></span></a> $727,000, as a bubble. </span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">Canadian banks have lent into much of the excesses and “Canada’s Fannie Mae” (the CMHC) has guaranteed more than $500 billion in mortgages; almost as much as the US GSEs did relative to GDP, prior to the 2008 crisis.</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><strong style="mso-bidi-font-weight: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">Canadian banks have never seen a major real estate implosion</span></strong></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">Because Canadian real estate prices never collapsed during the 2008 financial crisis to the degree they did in the US and the UK (let alone Japan), regulators, investors and analysts are totally unprepared for any such eventuality. </span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">As noted above, there are no indications that any Canadian regulatory body such as OSFI or any financial institution has had a Japan style scenario gamed out by independent risk experts. This even though some Canadian demographic trends, particularly with regards to workforce aging and retirements for the coming decade are roughly similar to what Japan’s were, at the peak of its bubble. </span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><strong style="mso-bidi-font-weight: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">Canadians are in record debt</span></strong></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">Worse, Canadians are in debt up to their eyeballs. According to Statistics Canada the ratio of household credit market debt (this excludes government, financial and business debts) reached a record 166.9% of disposable income in the third quarter of 2016. That was up from 166.4% in the second quarter. </span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">Inflated asset prices currently keep those debts under the rug. However asset price levels are temporary; debts linger.<span style="mso-spacerun: yes;">&nbsp; </span></span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><strong style="mso-bidi-font-weight: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">Wolves are in charge of the henhouse</span></strong></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">Another dangerous sign stems from the fact that all key stakeholders that facilitated the 2008 bubbles and ensuing crisis, escaped unnoticed. That means the wolves remain in charge of the henhouse.</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">For example as Macdonald notes in his paper, Gordon Nixon, CEO of RBC, Canada’s largest bank during the crisis, took in CAD $9.6 million in compensation in 2008, and $12.1 million in 2009.</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">Canadian bank CEOs and directors now figure that they’ll be bailed out and collect their bonuses, no matter what risks they take.</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">Bank CEOs aren’t alone in escaping blame for running the system into the ground in 2008. Most Canadians wouldn’t recognize David Dodge either, though as governor of the Bank of Canada, he fostered the easy-money policies which facilitated the debt and asset bubbles that led to the ensuing troubles.</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><strong style="mso-bidi-font-weight: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">OSFI: financial sector “group think” stress tests</span></strong></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">Another key threat to Canada’s financial system relates to the “group think” that pervades top officials, which leads them to err simultaneously. </span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">This is evident in the stress tests that various regulators (the IMF, OSFI, the BOC) have conducted or overseen on the big banks, which remain riddled with holes. </span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">Shorn of business cycle theorists, the stress tests only considered scenarios based on Canada’s history dating back to the 1980s. This despite the fact that eight years of unconventional monetary policy suggests that there are high risks that Western economics are in the midst of a 1930s-style liquidity trap. </span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">As if that were not enough, the stress tests only considered Canadian economic performance. But the first question a doctor will ask is what ailments there are in your family history. Canada’s family (the G-7) includes Japan. An obvious stress test scenario would have looked at Japanese metrics during the past two decades.</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">Worse, regulators allowed the banks themselves, to conduct the key bottom-up stress testing, rather than outsourcing the job to independent consultants. That’s like asking a drunk to check the inventory list in the wine closet, to make sure everything is still there. Finally, the stress tests appear to have omitted any probability of freezing up of key counterparties, as occurred with AIG during the 2008 crisis. What would happen if there was a 1% default in the notional value of the $1 quadrillion global derivatives market?<span class="MsoFootnoteReference"> <a name="_ftnref6" style="mso-footnote-id: ftn6;"><span style="mso-special-character: footnote;"><span class="MsoFootnoteReference"><span style="font-size: 12.0pt; line-height: 107%; font-family: &quot;Times New Roman&quot;,serif; mso-fareast-font-family: Calibri; mso-fareast-theme-font: minor-latin; mso-ansi-language: EN-US; mso-fareast-language: EN-US; mso-bidi-language: AR-SA;" lang="EN-US">[6]</span></span></span></a></span> (a $10 trillion loss) We don’t know.</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">***** </span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">The fact that bureaucrats who looked away during the buildup to the 2008 financial crisis, weren’t reprimanded, will have major implications going forward. That’s because Jeremy Rudin, head of OSFI, the organization most closely charged with overseeing Big Bank stability, was one of those bureaucrats.</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">Rudin’s story is instructive, because it mirrors that of almost all key Canadian financial sector regulatory officials.</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">Rudin (according to his official biography) spent the pre-2008 crisis years, in increasing positions of responsibility in Canada’s finance ministry, which culminated in an assistant deputy minister posting. As insiders know, ADM is a crucial position, which gave Rudin, if he did his job well, better access to information and contacts than even his bosses had. </span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">Yet during his years at the heart of the action, Rubin either saw no unusual risks building up, or he reported none.</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">(This on its own is stunning as there were clear warnings, well in advance, to anyone who was paying attention, from a slew of prognosticators (ranging from Robert Prechter, to Ian Gordon, Peter Schiff, Douglas Noland, Henry Liu and many others) of severe impending risks). </span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">In either case, the chances that Mr. Rudin would identify systemic risks in Canada’s financial system if they existed today, or would forcefully report them to the public in a way they understood, are slim.</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">Worse, OSFI junior officials likely would not either. </span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">In fact no Canadian regulatory official is allowed to speak to the press, without prior approval from the top. The career of any insider who forcefully publicly expressed doubts about sector solvency, liquidity or risk concerns, would essentially be over.</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">(OSFI spokesperson declined to comment on Mr. Rudin’s record prior to joining the organization).<span style="mso-spacerun: yes;">&nbsp; </span></span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><strong style="mso-bidi-font-weight: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">Canadian bank accounting structures are lax, complex and opaque</span></strong></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">Almost unnoticed during the 2008 financial crisis, was that Big Four audit firms all happily signed the financial statements of global big banks, including those in Canada, which only months later proved to be insolvent. </span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">Nothing was said, because most Canadians, even seasoned investors and analysts, have little knowledge of the technical accounting standards, that govern the banks. That’s not surprising, because Chartered Professional Accountants of Canada, the body that regulates the profession, keeps key information about those standards and how their audits are conducted behind a paywall. This makes it particularly difficult for the public to monitor its performance. </span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">(A CPA Canada spokesperson declined to comment regarding the cost of a hard copy of one of its handbooks, referring questions to its online store, but said that to maintain regular, timely access to the changes would cost $145 a year ($1,450 for ten years + tax)).</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><strong style="mso-bidi-font-weight: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">Auditors can’t be sued for incompetence.</span></strong><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">Furthermore, as Al Rosen of Accountability Research tirelessly points out, Canadian auditors essentially can’t be sued for incompetence. Their focus is thus naturally on maximizing audit fees and drumming up ancillary revenues from their clients; while presumably doing as little actual verification work as possible. </span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">As such, there is a strong temptation to overlook fraud, error or incompetence.</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><strong style="mso-bidi-font-weight: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">New IFRS 9 standards may be worse than previous rules</span></strong></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">New IFRS 9 accounting standards, which are currently being implemented throughout the Canadian financial sector, to address deficiencies identified in the wake of the 2008 financial crisis, appear to be more of the same. </span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">In fact in some key areas, notably the flexibility the new rules give managers to value loan impairments, the regulations are dangerous. Because these days accountants often use flexibility to make things look better than they really are.</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">Worse, because IFRS 9 rules give the appearance of addressing the issue of misstatements, while not actually doing so, they will almost certainly do more harm than good.</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">The reasonable investor can draw only one conclusion: bank financial statements are highly unreliable at best. And if they were wrong, no one would tell you.</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><strong style="mso-bidi-font-weight: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">Regulatory silos, amidst complexity and opacity</span></strong></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">The biggest and most worrying challenge is that Canadian financial sector stakeholders have erected a variety of complex regulatory and information bodies; but none has clear overall authority and power to maintain system stability. </span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">All have evolved into solid silos, which have little clue what the other organizations are doing. For example it is unclear whether economists at the Bank of Canada have internal access to the skills needed to comprehend a 200-page bank financial statement or to analyze a derivatives book. </span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">The upshot is that likely not one Canadian financial regulator in a 100 can provide a decent global-macro assessment of system stability. Obvious steps, proposed by outsiders have been ignored, or deemed superfluous.<span style="mso-spacerun: yes;">&nbsp; </span></span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">(Eg. A Glass-Steagall style break-up of the big banks, cleaning up Canada’s auditing industry, running regular stress tests conducted by independent consultants, using Japan-style scenarios, banning derivatives trading or tightening system credit). <span style="mso-spacerun: yes;">&nbsp;</span></span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><strong style="mso-bidi-font-weight: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">Regulatory rentiers </span></strong></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">One way to understand why regulatory safeguards are so faulty, is to assess bank auditors and regulators the same way they look at banks: as interest groups, whose main goal is to extract rents, fees, jobs and promotions from the system. </span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">The key interest of the regulators in such a scenario, would be to foster maximum growth among the financial institutions they feed on. Surprisingly, judging from the aftermath of the previous financial crisis, regulators might well benefit from a recurrence, particularly if the institutions were once again bailed out with taxpayer funds.</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">OSFI, CMHC, the BOC, ratings agencies and the CPA Canada, are perennially engaged in power grabs, for more staff, budgets and bigger salaries. </span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">A new financial crisis, would enable them to point the finger at each other, and to demand more laws, regulations and bigger budgets, to set things right. They’d likely get much of what they ask for.</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">In short, none have any interest in rocking the boat. </span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">To a man, their risk experts missed the boat during the 2008 financial crisis. </span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">None, based on research done for this article, will sound the whistle, before the next one occurs.</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">*****</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">That said, the seasoned investor faces challenges. Just because a crisis is inevitable by no means implies that it is imminent.</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">The overwhelming support that Canada’s big banks get from regulators, auditors, rating agencies and analysts (including those outside the country), suggests that an investor’s base case scenario would give them the benefit of the doubt, and to set aside a blogger’s meanderings.</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">Maybe Canadian banks are among the world’s best.</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">Maybe the financial system would remain stable if one went under. </span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">Nevertheless, there is plenty of room for doubt.</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">Furthermore, the evident risks in the Canadian financial system, suggest that a decent review of those in other G-7 nations is clearly in order.</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">It also suggests that there a good case for hedging one’s investment bets … and preparing for the worst.</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span lang="EN-US"><a href="mailto:Peter@peterdiekmeyer.com"><em style="mso-bidi-font-style: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;">Peter (at) peterdiekmeyer (dot) com</span></em></a></span><em style="mso-bidi-font-style: normal;">&nbsp;</em></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">-30-</span></p> <p class="MsoNormal" style="margin-top: 0in; margin-right: 139.5pt; margin-bottom: .0001pt; margin-left: 0in; line-height: normal;"><span style="font-size: 12.0pt; font-family: &quot;Times New Roman&quot;,serif;" lang="EN-US">&nbsp;</span></p> </div> <div style="mso-element: footnote-list;"> <hr width="33%" size="1" /> <div id="ftn1" style="mso-element: footnote;"> <p class="MsoFootnoteText"><a name="_ftn1" style="mso-footnote-id: ftn1;"><span class="MsoFootnoteReference"><span lang="EN-US"><span style="mso-special-character: footnote;"><span class="MsoFootnoteReference"><span style="font-size: 10.0pt; line-height: 107%; font-family: &quot;Calibri&quot;,sans-serif; mso-ascii-theme-font: minor-latin; mso-fareast-font-family: Calibri; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin; mso-bidi-font-family: &quot;Times New Roman&quot;; mso-bidi-theme-font: minor-bidi; mso-ansi-language: EN-US; mso-fareast-language: EN-US; mso-bidi-language: AR-SA;" lang="EN-US">[1]</span></span></span></span></span></a><span lang="EN-US"> <a href="http://reports.weforum.org/global-competitiveness-index/competitiveness-rankings/#series=EOSQ087">http://reports.weforum.org/global-competitiveness-index/competitiveness-rankings/#series=EOSQ087</a></span></p> </div> <div id="ftn2" style="mso-element: footnote;"> <p class="MsoFootnoteText" style="margin-right: 134.85pt;"><a name="_ftn2" style="mso-footnote-id: ftn2;"><span class="MsoFootnoteReference"><span lang="EN-US"><span style="mso-special-character: footnote;"><span class="MsoFootnoteReference"><span style="font-size: 10.0pt; line-height: 107%; font-family: &quot;Calibri&quot;,sans-serif; mso-ascii-theme-font: minor-latin; mso-fareast-font-family: Calibri; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin; mso-bidi-font-family: &quot;Times New Roman&quot;; mso-bidi-theme-font: minor-bidi; mso-ansi-language: EN-US; mso-fareast-language: EN-US; mso-bidi-language: AR-SA;" lang="EN-US">[2]</span></span></span></span></span></a><span lang="EN-US"> <a href="https://www.imf.org/external/pubs/ft/scr/2014/cr1429.pdf" title="https://www.imf.org/external/pubs/ft/scr/2014/cr1429.pdf">https://www.imf.org/external/pubs/ft/scr/2014/cr1429.pdf</a></span></p> </div> <div id="ftn3" style="mso-element: footnote;"> <p class="MsoFootnoteText" style="margin-right: 134.85pt;"><a name="_ftn3" style="mso-footnote-id: ftn3;"><span class="MsoFootnoteReference"><span lang="EN-US"><span style="mso-special-character: footnote;"><span class="MsoFootnoteReference"><span style="font-size: 10.0pt; line-height: 107%; font-family: &quot;Calibri&quot;,sans-serif; mso-ascii-theme-font: minor-latin; mso-fareast-font-family: Calibri; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin; mso-bidi-font-family: &quot;Times New Roman&quot;; mso-bidi-theme-font: minor-bidi; mso-ansi-language: EN-US; mso-fareast-language: EN-US; mso-bidi-language: AR-SA;" lang="EN-US">[3]</span></span></span></span></span></a><span lang="EN-US"><a href="https://www.policyalternatives.ca/sites/default/files/uploads/publications/National%20Office/2012/04/Big%20Banks%20Big%20Secret.pdf" title="https://www.policyalternatives.ca/sites/default/files/uploads/publications/National%20Office/2012/04/Big%20Banks%20Big%20Secret.pdf">https://www.policyalternatives.ca/sites/default/files/uploads/publicatio...</a></span></p> </div> <div id="ftn4" style="mso-element: footnote;"> <p class="MsoFootnoteText" style="margin-right: 170.3pt;"><a name="_ftn4" style="mso-footnote-id: ftn4;"><span class="MsoFootnoteReference"><span lang="EN-US"><span style="mso-special-character: footnote;"><span class="MsoFootnoteReference"><span style="font-size: 10.0pt; line-height: 107%; font-family: &quot;Calibri&quot;,sans-serif; mso-ascii-theme-font: minor-latin; mso-fareast-font-family: Calibri; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin; mso-bidi-font-family: &quot;Times New Roman&quot;; mso-bidi-theme-font: minor-bidi; mso-ansi-language: EN-US; mso-fareast-language: EN-US; mso-bidi-language: AR-SA;" lang="EN-US">[4]</span></span></span></span></span></a><span lang="EN-US"> <a href="http://www.economist.com/news/finance-and-economics/21718511-bolthole-money-welcome-comes-unintended-consequences-foreign-buyers">http://www.economist.com/news/finance-and-economics/21718511-bolthole-money-welcome-comes-unintended-consequences-foreign-buyers</a></span></p> </div> <div id="ftn5" style="mso-element: footnote;"> <p class="MsoFootnoteText" style="margin-right: 170.3pt;"><a name="_ftn5" style="mso-footnote-id: ftn5;"><span class="MsoFootnoteReference"><span lang="EN-US"><span style="mso-special-character: footnote;"><span class="MsoFootnoteReference"><span style="font-size: 10.0pt; line-height: 107%; font-family: &quot;Calibri&quot;,sans-serif; mso-ascii-theme-font: minor-latin; mso-fareast-font-family: Calibri; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin; mso-bidi-font-family: &quot;Times New Roman&quot;; mso-bidi-theme-font: minor-bidi; mso-ansi-language: EN-US; mso-fareast-language: EN-US; mso-bidi-language: AR-SA;" lang="EN-US">[5]</span></span></span></span></span></a><span lang="EN-US"> </span><span style="mso-ansi-language: EN-CA;">All data is in Canadian dollars.</span></p> </div> <div id="ftn6" style="mso-element: footnote;"> <p class="MsoFootnoteText" style="margin-right: 141.95pt;"><a name="_ftn6" style="mso-footnote-id: ftn6;"><span class="MsoFootnoteReference"><span lang="EN-US"><span style="mso-special-character: footnote;"><span class="MsoFootnoteReference"><span style="font-size: 10.0pt; line-height: 107%; font-family: &quot;Calibri&quot;,sans-serif; mso-ascii-theme-font: minor-latin; mso-fareast-font-family: Calibri; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin; mso-bidi-font-family: &quot;Times New Roman&quot;; mso-bidi-theme-font: minor-bidi; mso-ansi-language: EN-US; mso-fareast-language: EN-US; mso-bidi-language: AR-SA;" lang="EN-US">[6]</span></span></span></span></span></a><span lang="EN-US"> The $1 quadrillion estimate, is a guess of the roughest sort. </span><span style="mso-ansi-language: EN-CA;">The true size of the global derivatives market is hard to estimate. This in turn dramatically highlights the risks it encompasses. The BIS put the notional derivative OTC value at $544 billion at the end of 2016. </span><span lang="EN-US"><a href="http://www.bis.org/statistics/d5_1.pdf"><span style="mso-ansi-language: EN-CA;" lang="EN-CA">http://www.bis.org/statistics/d5_1.pdf</span></a></span><span style="mso-ansi-language: EN-CA;">. However much of the trading is done outside the exchanges. </span></p> <p class="MsoFootnoteText"><span style="mso-ansi-language: EN-CA;">&nbsp;</span></p> </div> </div> <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="710" height="484" alt="" src="http://www.zerohedge.com/sites/default/files/images/user236978/imageroot/67ced79f34b2da0211ec270ccca30fd0.jpg?1490221373" /> </div> </div> </div> http://www.zerohedge.com/news/2017-03-22/how-solid-are-canada%E2%80%99s-big-banks#comments AIG Bailout Bank Bank of Canada Bank of Canada Banking Banking in Canada BIS Business CAD Canadian Bankers Association Canadian Center for Policy Alternatives Counterparties default Demographics Economic bubbles Economy Fail Finance Financial crises Financial crisis of 2007–2008 G-7 Great Recession Institutional Investors International Monetary Fund Italy Japan Monetary Policy Money Mortgage industry of the United States None notional value OTC Peter Schiff Rating Agencies ratings Ratings Agencies Real estate Robert Prechter Stress Test Subprime mortgage crisis Systemic risk The Economist Too big to fail World Economic Forum Wed, 22 Mar 2017 22:27:22 +0000 peterdiekmeyercontributor 591474 at http://www.zerohedge.com Only 1 In 6 Americans Hold 'Favorable' View Of FBI Director Comey http://www.zerohedge.com/news/2017-03-22/only-1-6-americans-hold-favorable-view-fbi-director-comey <p>The Director of The FBI has managed to do what many have failed to do - <strong>bring a desperately divided nation together</strong>. James Comey is <strong>unpopular across the political spectrum</strong>, according to a new poll that finds <strong>voters have a negative opinion of Comey by a more than two-to-one margin</strong>.</p> <p><iframe frameborder="0" height="315" src="http://players.brightcove.net/1077863425/ryWOznDex_default/index.html?videoId=5368360871001" width="560"></iframe></p> <p><a href="http://thehill.com/business-a-lobbying/325109-poll-by-2-to-1-margin-registered-voters-reject-comey"><em>As The Hill reports,</em></a> according to data from a <a href="http://harvardharrispoll.com/">Harvard-Harris Poll survey </a>of registered voters provided exclusively to The Hill, <strong>only 17 percent have a favorable view of Comey,</strong>&nbsp; compared to 35 percent who have a negative view of him.</p> <p><strong>Forty-one percent of Democrats have an unfavorable view of Comey</strong>, with only 12 percent saying they view him positively.</p> <p>Comey is almost at break-even <strong>among Republicans, with 26 percent viewing him positively</strong> and 27 percent viewing him negatively.</p> <p><strong>Among independents, Comey has an overall negative rating, with 17 percent holding a positive view </strong>compared to 36 percent with a negative view of the FBI director.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/21/20170322_comey.jpg"><img height="349" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/21/20170322_comey.jpg" width="560" /></a></p> <p>Harvard-Harris Poll co-director Mark Penn said, <em><strong>&quot;Comey&rsquo;s ratings, which are two-to-one negative, suggest a crisis of confidence in his leadership as top law enforcement officer.&quot;</strong></em></p> <p><strong>That could change for the worse</strong>, as the<a href="http://harvardharrispoll.com/"> Harvard-Harris Poll survey</a> was conducted prior Comey&rsquo;s testimony on Monday before the House Intelligence Committee that frustrated many Republicans. Chairman Devin Nunes (R-Calif.) lamented that Comey had cast &ldquo;a big, gray cloud&rdquo; over the Trump administration.</p> <p>Finally we note that a plurality of voters - <strong>40 percent - say Congress is spending too much time on Russia and Trump&rsquo;s wiretapping claims.</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="578" height="360" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20170322_comey.jpg?1490204996" /> </div> </div> </div> http://www.zerohedge.com/news/2017-03-22/only-1-6-americans-hold-favorable-view-fbi-director-comey#comments American people of German descent Business Comey Congress Dismissal of United States Attorneys controversy Donald Trump FBI Federal Bureau of Investigation Federal Bureau of Investigation Harvard House Intelligence Committee James Comey National security of the United States Politics Presidency of Donald Trump ratings Testimony Trump Administration United States United States Department of Justice United States intelligence agencies Wed, 22 Mar 2017 22:25:00 +0000 Tyler Durden 591432 at http://www.zerohedge.com Pelosi, Schiff Slam "White House Surrogate" Nunes' "Act Of Diversion & Desperation" http://www.zerohedge.com/news/2017-03-22/pelosi-schiff-slam-white-house-surrogate-nunes-act-diversion-desperation <p>It seems Devin Nunes has struck a chord given the level of rhetoric roaring out of Democrat HQ tonight. After <a href="http://www.zerohedge.com/news/2017-03-22/nunes-trump-transition-members-and-possibly-trump-himself-were-under-surveillance-du">briefing The White House on the fact that Trump was<strong><em> &quot;incidentally surveilled&quot; </em></strong>along with his team</a> - somewhat vindicating the President&#39;s tweets - the top Democrat on the House Intelligence Committee said Wednesday that <strong>he has &quot;grave concerns&quot; over Nunes &#39;impartiality&quot; </strong>and Democratic leader <strong>Pelosi exclaimed his comments were an &quot;act of desperation and diversion&quot;</strong> in a statement.</p> <blockquote class="twitter-tweet" data-lang="en"><p dir="ltr" lang="en">Trump says he feels &ldquo;somewhat&rdquo; vindicated by Nunes: &ldquo;I very much appreciated the fact that they found what they found&rdquo;. <a href="https://t.co/PwuEaICG2q">pic.twitter.com/PwuEaICG2q</a></p> <p>&mdash; Bradd Jaffy (@BraddJaffy) <a href="https://twitter.com/BraddJaffy/status/844631030040596481">March 22, 2017</a></p></blockquote> <script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script><p><a href="http://thehill.com/homenews/administration/325298-schiff-i-have-grave-concerns-over-nunes-surveillance-claims"><em>As The Hill reports,</em></a> Rep. Adam <strong>Schiff (D-Calif.) criticized Nunes for his surprise announcement earlier in the day</strong> that he had seen intelligence intercepts that showed authorities had incidentally gathered information on members of the Trump transition team during investigations that the chairman said were not related to Russia.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>&quot;If accurate, this information should have been shared with members of the committee, but it has not been,&quot; </strong>Schiff said in a statement that criticized Nunes for a <strong>&quot;profound irregularity&quot; </strong>in how he had handled the situation.</p> <p>&nbsp;</p> <p>&quot;The Chairman also shared this information with the White House before providing it to the committee, another profound irregularity, given that the matter is currently under investigation. I have expressed my grave concerns with the Chairman that a credible investigation cannot be conducted this way,&quot; he said.</p> </blockquote> <p>Of course MSNB was more than happy to host Schiff to explain how Nunes is a &quot;White House surrogate&quot;...</p> <blockquote class="twitter-video"><p dir="ltr" lang="en">Schiff: Nunes has to decide if he&#39;s an independent investigation chair or a White House surrogate; Trump&#39;s claims as baseless today as y&#39;day <a href="https://t.co/h7NuIQeM59">pic.twitter.com/h7NuIQeM59</a></p> <p>&mdash; Bradd Jaffy (@BraddJaffy) <a href="https://twitter.com/BraddJaffy/status/844657083421245440">March 22, 2017</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><p>And to raise doubts about his <strong>independence</strong>...</p> <blockquote class="twitter-video"><p dir="ltr" lang="en">Schiff says what Nunes did throws the committee into doubt; says this makes a profound case for an independent commission <a href="https://t.co/wnSuwJOhzB">pic.twitter.com/wnSuwJOhzB</a></p> <p>&mdash; Bradd Jaffy (@BraddJaffy) <a href="https://twitter.com/BraddJaffy/status/844658249869770754">March 22, 2017</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><p>And even better, to deny Clapper, Comey, and everyone else&#39;s admissins that there is no evidence of Trump-Russia collusion and claim that he has <strong>new evidence - &quot;I can&#39;t go into the particulars, but there is more than circumstantial evidence now&quot;</strong>...</p> <blockquote class="twitter-video"><p dir="ltr" lang="en">NEWS: Schiff tells <a href="https://twitter.com/chucktodd">@ChuckTodd</a>: &ldquo;there is more than circumstantial evidence now&hellip;there is evidence that is not circumstantial&rdquo; &mdash;<a href="https://twitter.com/MeetThePress">@MeetThePress</a> <a href="https://t.co/s6ETKA1hyT">pic.twitter.com/s6ETKA1hyT</a></p> <p>&mdash; Bradd Jaffy (@BraddJaffy) <a href="https://twitter.com/BraddJaffy/status/844668559926145025">March 22, 2017</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><p>Schiff <a href="http://thehill.com/homenews/administration/325298-schiff-i-have-grave-concerns-over-nunes-surveillance-claims">maintained </a>that if Trump and his aides ended up in a lawfully compiled intelligence report, they were likely not the subjects of surveillance. <a href="https://twitter.com/RepAdamSchiff/status/844649549696286724/photo/1">Then Schiff issued a statement for good effect</a>:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&quot;<strong>This afternoon, Chairman Devin Nunes announced he had some form of intercepts revealing that lawfully gathered intelligence on foreign officials included information on U.S. Persons, potentially including those associated with President Trump or the President himself.</strong> If accurate, this information should have been shared with members of the committee, but it has not been. Indeed, it appears that committee members only learned about this when the Chairman discussed the matter this afternoon with the press. The Chairman also shared this information with the White House before providing it to the committee, another profound irregularity, given that the matter is currently under investigation. I have expressed my grave concerns with the Chairman that a credible investigation cannot be conducted this way.</p> <p>&nbsp;</p> <p>&quot;As to the substance of what the Chairman has alleged, if the information was lawfully gathered intelligence on foreign officials, that would mean that U.S. persons would not have been the subject of surveillance. I<strong>n my conversation late this afternoon, the Chairman informed me that most of the names in the intercepted communications were in fact masked, but that he could still figure outthe probable identity of the parties.</strong> Again, this does not indicate that there wasany flaw in the procedures followed by the intelligence agencies. Moreover, the the probable identity of the parties. Again, this does not indicate that there wasany flaw in the procedures followed by the intelligence agencies. Moreover, the any flaw in the procedures followed by the intelligence agencies. Moreover, the unmasking of a U.S. Person&#39;s name is fully appropriate when it is necessary to understand the context of collected foreign intelligence information.</p> <p>&nbsp;</p> <p><strong>&quot;Because the committee has still not been provided the intercepts in the possession of the Chairman, it is impossible to evaluate the Chairman&#39;s claims.</strong></p> <p>&nbsp;</p> <p><u><strong>It certainly does not suggest -- in any way -- that the President was wiretapped by certainly does not suggest -- in any way -- that the President was wiretapped by his predecessor.</strong></u>&quot;</p> </blockquote> <p>Then Democratic Party leader Nancy Pelosi chimed in with the following statement:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><u><strong>Pelosi Statement on Intelligence Chairman Nunes&#39; Meeting with President Trump</strong></u></p> <p>&nbsp;</p> <p>Washington, D.C. &mdash; Democratic Leader Nancy Pelosi released this statement after Chairman Nunes&#39; comments to the press following his meeting with President Trump at the White House:</p> <p>&nbsp;</p> <p>&quot;<strong>The unprecedented comments of Chairman Nunes are an act of diversion and desperation.</strong> The Chairman&#39;s highly irregular conduct with the White House raises serious questions about his impartiality, especially given his history as part of the Trump Transition team. Abandoning any pretense of bipartisanship, Chairman Nunes raced to the White House and to the press to perpetuate the Trump Administration&#39;s misinformation campaign.</p> <p>&nbsp;</p> <p>&quot;The unmasking of legally intercepted intelligence is often appropriate and necessary to understand the context of foreign intelligence information. Chairman Nunes&#39; actions are disrespectful of Ranking Member Schiff and the bipartisan membership of the Intel Committee. Republicans are grasping at straws because the FBI Director confirmed that President Obama did not wiretap President Trump, and affirmed an investigation of coordination between the Russians and individuals affiliated with the Trump campaign in the election.</p> <p>&nbsp;</p> <p>&quot;<strong>Chairman Nunes is deeply compromised, and he cannot possibly lead an honest investigation. </strong>Congress must create a comprehensive, independent, bipartisan commission to expose the full truth of the Trump-Russia connection.&quot;</p> </blockquote> <p>And finally, a Democratic member of the House Intelligence Committee on <a href="http://thehill.com/policy/national-security/325295-house-intel-dem-nunes-surveillance-revelations-seem-trumped-up">Wednesday pushed back </a>on revelations from the panel&#39;s Chairman Devin Nunes (R-Calif.), saying his claims of incidental U.S. surveillance of members of President Trump&#39;s transition team were &quot;trumped up.&quot;</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>&quot;If, in fact, this took place, it was incidental and it was done through what is legally allowed by the CIA when they are surveilling foreign persons,&quot; </strong>Rep. Jackie Speier (D-Calif.) said during an appearance on MSNBC.</p> <p>&nbsp;</p> <p><strong>&quot;This could be a lot of theater &ndash; it looks very trumped up to me</strong> &ndash; but we&#39;ll have to wait and see,&quot; she added.</p> </blockquote> <p>Seems like Mr. Nunes - who we are sure will be discovered to have had contact with some Russian official or other very soon - has hit a nerve, smashing yet another leg out from under the 1-legged stool of the Democrat narrative.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/21/20170322_pelosi1.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/21/20170322_pelosi1.jpg" style="width: 502px; height: 157px;" /></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="502" height="157" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20170322_pelosi1.jpg?1490220803" /> </div> </div> </div> http://www.zerohedge.com/news/2017-03-22/pelosi-schiff-slam-white-house-surrogate-nunes-act-diversion-desperation#comments Adam Schiff Central Intelligence Agency Devin Nunes Donald Trump Donald Trump presidential campaign Donald Trump wiretapping claim FBI House Intelligence Committee Mike Pence MSNBC Nancy Pelosi Nancy Pelosi Politics of the United States Presidency of Donald Trump President Obama Russian interference in the 2016 United States elections Trump Administration Twitter Twitter United States House of Representatives United States House Permanent Select Committee on Intelligence Washington D.C. White House Wed, 22 Mar 2017 22:14:30 +0000 Tyler Durden 591473 at http://www.zerohedge.com Axel Merk On What's Next For The Dollar, Gold, & Stocks? http://www.zerohedge.com/news/2017-03-22/axel-merk-whats-next-dollar-gold-stocks <p style="text-align: left;"><em><a href="http://www.merkinvestments.com/insights/2017/2017-03-22.php">Authored by Axel Merk via Merk Investments,</a></em></p> <p style="text-align: left;"><strong>Two rate hikes since last year have weakened the dollar.</strong> Why is that, and what&rsquo;s ahead for dollar, currencies &amp; gold? And while we are at it, we&rsquo;ll chime in on what may be in store for the stock market...</p> <p style="text-align: left;"><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/21/20170322_merk.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/03/21/20170322_merk_0.jpg" style="width: 600px; height: 379px;" /></a></p> <h3 style="text-align: left;">Stocks...</h3> <p style="text-align: left;">The chart above shows the S&amp;P 500, the price of gold and the U.S. dollar index since the beginning of 2016. The year 2016 started with a rout in the equity markets which was soon forgotten, allowing the multi-year bull market to continue. After last November&rsquo;s election we have had the onset of what some refer to as the Trump rally. Volatility in the stock market has come down to what may be historic lows. Of late, many trading days appear to start on a down note, although late day rallies (possibly due to retail money flowing into index funds) are quite common.</p> <p style="text-align: left;">Where do stocks go from here? Of late, we have heard outspoken money manager Jeff Gundlach suggests that bear markets only happen if the economy turns down; and that his indicators suggest that there&rsquo;s no recession in sight. We agree that bear markets are more commonly associated with recessions, but with due respect to Mr. Gundlach, the October 1987 crash is a notable exception. <em><strong>The 1987 crash was an environment that suffered mostly from valuations that had gotten too high; an environment where nothing could possibly go wrong: the concept of &ldquo;portfolio insurance&rdquo; was en vogue at the time. Without going into detail of how portfolio insurance worked, let it be said that it relied on market liquidity. The market took a serious nosedive when the linkage between the S&amp;P futures markets and their underlying stocks broke down.</strong></em></p> <p style="text-align: left;">Imention these as I see many parallels to 1987, including what I would call an outsized reliance on market liquidity ensuring that this bull market continues its rise without being disrupted by a flash crash or some a type of crash awaiting to get a label. Mind you, it&rsquo;s extraordinarily difficult to get the timing right on a crash; that doesn&rsquo;t mean one shouldn&rsquo;t prepare for the risk.</p> <h3 style="text-align: left;">Bonds...</h3> <p style="text-align: left;">If I don&rsquo;t like stocks, what about bonds. While short-term rates have been moving higher, longer-term rates have been trading in a narrow trading range for quite some time, frustrating both bulls and bears. Bonds are often said to perform well when stock prices plunge, but don&rsquo;t count on it: first, even the historic correlation is not stable. But more importantly, when we talk with investors, many of them have been reaching for yield. We see sophisticated investors, including institutional investors, provide direct lending services to a variety of groups. What they all have in common is that yields are higher than what you would get in a traditional bond investment. While the pitches for those investments are compelling, it doesn&rsquo;t change the fact that high yield investments, in our analysis, tend to be more correlated with risk assets, i.e. with equities, especially in an equity bear market. Differently said:<strong> don&rsquo;t call yourself diversified if your portfolio consists of stocks and high yielding junk bonds.</strong> I gather that readers investing in such bonds think it doesn&rsquo;t affect them; let me try to caution them that some master-limited partnership investments in the oil sector didn&rsquo;t work out so well, either.</p> <h3 style="text-align: left;">Gold...</h3> <p style="text-align: left;">I have argued for some time that the main competitor to the price of gold is cash that pays a high real rate of return. That is, if investors get compensated for holding cash, they may not have the need for a brick that has no income and costs a bit to hold.</p> <p style="text-align: left;">After the election, we believe the price of gold came down as the market priced in higher real interest rates in anticipation of lower regulations. We indicated that this euphoria will cede to realism, meaning that regulations might not be cut quite as much. We also suggested that any fiscal stimulus on the backdrop of low employment may be inflationary. That is, expectations of higher real rates might be replaced with expectations of higher nominal rates; <strong>net, bonds might not change all that much, but the price of gold may well rise in that environment.</strong></p> <p style="text-align: left;">Add the Fed to the picture, having raised rates twice now since the election. We have argued that the Fed is and continues to be &#39;behind the curve,&#39; i.e. is raising rates more slowly than inflationary pressures are building. <strong>We believe the Fed is petrified that they might have to go down back to QE when the next recession comes and, as a result, has been very slow in raising rates. Indeed, we believe the Fed will only raise rates if the market delivers a rate hike on a silver platter, i.e. the markets are &ldquo;behaving&rdquo; (no taper tantrum). </strong>As such, let me make this prediction: if the S&amp;P 500 is up 20% from current levels this October, odds are we will get more rate hikes than are currently priced in; conversely, if the S&amp;P 500 is down 20% from current levels this October, odds are we will get fewer rate hikes than are currently priced in. If you are rolling your eyes that this isn&rsquo;t too ingenious, I would like to remind readers that this isn&rsquo;t supposed to be the yard stick the Fed should be using. We believe the Fed is a hostage of the market. Paraphrasing a former Fed official who shall remain unnamed, he indicated to me that the Fed wouldn&rsquo;t care how the S&amp;P reacts to an FOMC decision, unless, they created a bubble.</p> <h3 style="text-align: left;">The Dollar...</h3> <p style="text-align: left;">What about the greenback? The dollar index (DXY) was up four years in a row. Year-to-date, however, the index is down despite the recent rate hikes. It shows that everything is relative to what is priced in already. A key reason we believe the dollar may have seen its peak is because of the Fed&rsquo;s unwillingness to get &lsquo;ahead of the curve&rsquo;. Not with Janet Yellen, at least. Her term as Chair is running out next January; we wouldn&rsquo;t be surprised if she is replaced with Kevin Warsh. He was a Fed governor during the financial crisis; he has since published a variety of OpEds, criticizing the Fed. He has also been on one of President Trump&rsquo;s economic round tables. If he indeed succeeds Yellen (there are other names being mentioned; we just happen to think that at this stage, he best fits the profile of what Trump may be looking for), he has indicated that the reason why Fed officials are appointed for many years is so they don&rsquo;t have to worry how markets react to policy decisions. That&rsquo;s a stoic attitude, but reality (called &ldquo;deteriorating financial conditions&rdquo;) may well change his mind should he become Fed Chair and try to raise rates more aggressively.</p> <p style="text-align: left;"><strong>Aside from real interest rates, when it comes to the dollar, it is worth paying attention to trade policy.</strong> So-called experts had predicted a 20% surge in the dollar based on the &ldquo;border adjustment tax&rdquo; in the GOP House tax plan. Except that surge hasn&rsquo;t happened. Maybe the plan is dead. Maybe the plan&rsquo;s market impact will be different. Our take is: if you introduce barriers to trade, we believe currencies of countries with current account deficits tend to suffer. The greenback qualifies, and the recent decline coincides with more protectionist talk coming from the Trump administration.</p> <h3 style="text-align: left;">The Sterling...</h3> <p style="text-align: left;">Talking about the greenback, there&rsquo;s always another currency at the other side of the trade. The sterling is one of those currencies that has suffered as trade barriers have been raised (a &ldquo;Brexit&rdquo; is akin to increasing trade barriers); the Brits also have a current account deficit. And we think those trade barriers will become ever more apparent as the odds of the UK and the EU coming to a prudent trade agreement appear rather dim. We come to that assessment because of the EU&rsquo;s institutional setup requiring unanimity for new trade deals on the one hand, but a hard deadline on the other hand to leave the EU once Article 50 (the &lsquo;exit&rsquo; article) is triggered.</p> <p style="text-align: left;"><strong>What gets us really negative about the sterling, though, is their fiscal situation. </strong>Sure, there may well be a short squeeze at some point because others don&rsquo;t like the currency but medium to long-term, we believe the Brits may well go down what we call the &ldquo;Italian road.&rdquo; That is, we believe they&rsquo;ll finance substantial deficits with monetary policy that&rsquo;s too loose, leading to a currency that will cascade lower over time. That&rsquo;s because we don&rsquo;t see how the Brits can finance their budgets. When the Brits had their austerity budgets, their finances had moved from what we would call horrible to bad. Now they may well drift back to horrible as government spending increases to cushion the blow from Brexit.</p> <h3 style="text-align: left;">The Euro...</h3> <p style="text-align: left;">What about the currency investors love to hate? Let me remind readers that everything is relative to what is being priced in. <strong>The euro has done well year to date because, we believe investors are increasingly realizing that the lows in rates may have been reached.</strong> The dollar started to surge at the first talk of tapering, even as the first actual rate hike was far, far, off. Similarly, the euro may well start appreciating well before rates will actually go up again in the Eurozone.</p> <p style="text-align: left;">Recently, European Central Bank (ECB) head Draghi gave an upbeat presentation at a press conference,<strong> suggesting (and I&rsquo;m putting words into his mouth here) we shouldn&rsquo;t be overly worried about the various upcoming risk events</strong> (Dutch election at the time; the French election, etc.), as there isn&rsquo;t much as we can do about them anyway; and if something bad were to happen, well, he&rsquo;ll do whatever it takes. Then the Dutch rejected populism. Then the rumor came up that the ECB may hike rates before ending the purchases of securities; this rumor was given credence as the Austrian ECB member of the governing counsel suggested that there are many different rates and, yes, some could be raised before the bond purchases are done.</p> <p style="text-align: left;"><strong>Separately, we believe the euro has increasingly become a so-called funding currency</strong>. Amongst others because rates are so low, speculators are borrowing in euros to buy higher yielding assets. If we have a risk off event, e.g. a sharper decline in stocks, those speculators might have to reduce their bets and, as part of that, buy back the euro. Short covering may not lead to sustainable rallies in the euro, but it&rsquo;s a piece of the puzzle worth watching.</p> <h3 style="text-align: left;">EM currencies...</h3> <p style="text-align: left;">Emerging market (EM) currencies tend to be proxies for risk assets, i.e. they tend to do just fine when times are good, but in the case of severe selloffs, our analysis shows they also tend to suffer. <strong>We don&#39;t think they are as vulnerable as they have been at other times when investors have been chasing yield</strong> (remember, in EM markets, higher yielding bonds tend to be available), but any investors exposed to them should keep those risks in mind in the context of an overall portfolio allocation.</p> <h3 style="text-align: left;">Make your portfolio great again...</h3> <p style="text-align: left;"><strong>Before you contemplate how to rebalance your portfolio, think about how institutional investors might be rebalancing their portfolio.</strong> U.S. markets have been outperforming, the dollar has been rising. As such, we would think institutional investors might shift assets overseas to rebalance their portfolios, thereby favoring international equities and putting downward pressure on the dollar.</p> <p style="text-align: left;">As you might have gathered,<strong> I believe most investors are over-exposed to US equities. </strong>Equities have performed so well that it&rsquo;s difficult to get anyone to listen to this concern. And that&rsquo;s exactly the type of environment that is a fertile ground for bubbles.</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="1667" height="1054" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20170322_merk.jpg?1490198598" /> </div> </div> </div> http://www.zerohedge.com/news/2017-03-22/axel-merk-whats-next-dollar-gold-stocks#comments Bear Market Bond Bond Business Currency Economic bubble Economic history of the Dutch Republic Economy Equity Markets ETC Euro European Central Bank European Central Bank European Union Eurozone Finance Financial crises Financial history of the Dutch Republic flash Foreign exchange market GOP House Gundlach High Yield Institutional Investors Interest rate Janet Yellen Jeff Gundlach Monetary Policy Money Real interest rate Real Interest Rates Reality Recession S&P S&P 500 Stock market Trump Administration US Federal Reserve Volatility Warsh Wed, 22 Mar 2017 22:05:00 +0000 Tyler Durden 591419 at http://www.zerohedge.com