en Armed Man With A Knife Rams Car Into Pedestrians In Heidelberg; Attacker Shot By Police <p>In what may be the second vehicle-based terrorist attack in Germany in as many months, moments ago the <a href="">German police reported </a>that a man rammed his car into a pedestrian area in a central square in the city of Heidelberg, injuring three people - one seriously - then fled armed with a knife, and was subsequently shot after being tracked down by officers. </p> <p>The incident occurred in Heidelberg’s central square at around 4PM local time when a car deliberately drove into a group of people standing in front of a local bakery, <a href=",-Auto-faehrt-auf-dem-Heidelberger-Bismarckplatz-in-Menschengruppe-Drei-Verletzte-_arid,257696.html">German media report</a>. </p> <p><img src="" width="500" height="259" /></p> <p>Police spokesperson Anne Baas said one of the three people hit was seriously injured. </p> <blockquote class="twitter-tweet"><p dir="ltr" lang="de">„Medien: Noch gibt es weder Alter oder Herkunft des <a href="">#Heidelberg</a>-Täters, aber schon vollständige Psychoanalysen.“ <a href=""></a></p> <p>— Hannes Kirmse ? (@HannesKirmse) <a href="">February 25, 2017</a></p></blockquote> <script src="//"></script><p>The suspect fled and was then found by a police patrol, and was shot by an officer following a short standoff. He was taken to a hospital. </p> <blockquote class="twitter-tweet"><p dir="ltr" lang="de"><a href="">#Heidelberg</a> <a href="">#Bismarckplatz</a><br />Mann fährt in Personengruppe, 3 Personen verletzt, Tatverdächtiger von Polizei gestellt und angeschossen. <a href=""></a></p> <p>— Polizei Mannheim (@PolizeiMannheim) <a href="">February 25, 2017</a></p></blockquote> <script src="//"></script><blockquote class="twitter-tweet"> <p dir="ltr" lang="de">18:30: <a href="">#Heidelberg</a> <a href="">#Bismarckplatz</a>: Die Kollegen ermitteln. <a href=""></a></p> <p>— Polizei Mannheim (@PolizeiMannheim) <a href="">February 25, 2017</a></p></blockquote> <script src="//"></script><p>There was no immediate word on the man’s possible motives, althought according to local <a href="">media reports</a>, the attacker was "mentally unstable patient."</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="de">"Psychatrisch labiler Einzeltäter..." fährt in <a href="">#heidelberg</a> <a href="">#amok</a> und in die Menschenmenge! Hat sicher wieder mit nichts zu tun! Kennt man!????</p> <p>— Andreas Patzwahl (@APatzwahl) <a href="">February 25, 2017</a></p></blockquote> <script src="//"></script><p>The following video shows the suspect being shot by the police moments after the attack.</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="de"><a href="">@APatzwahl</a> Video zum <a href="">#AmoklaufHeidelberg</a> <a href=""></a></p> <p>— Andreas Patzwahl (@APatzwahl) <a href="">February 25, 2017</a></p></blockquote> <script src="//"></script><p>If this is confirmed as a terrorist attack, it would be the second to take place precisely two months after a truck driver rammed into a Munich Christmas market, killing and injuring dozens of people.</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="311" alt="" src="" /> </div> </div> </div> Baden Baden-Württemberg Geography of Germany German police Germany Heidelberg Karlsruhe Law enforcement in Germany Mannheim Odenwald Polizei Twitter Twitter War Sat, 25 Feb 2017 17:49:38 +0000 Tyler Durden 588953 at French President Fires Back At Trump Over Paris Comments <p>One day after president Trump remarked in a speech at a conference that a friend thought<br /> "Paris is no longer Paris" after attacks by Islamist militants, French President Francois Hollande fired back at Donald Trump on Saturday. During a speech at the Conservative Political Action Conference on Friday, Trump repeated his criticism of Europe's handling of attacks by Islamist militants saying a friend "Jim" no longer wanted to take his family to Paris.</p> <p>Hollande said Trump should show support for U.S. allies. "There is terrorism and we must fight it together. I think that it is never good to show the smallest defiance toward an allied country. I wouldn't do it with the United States and I'm urging the U.S. president not to do it with France," Hollande said. </p> <p>"<strong>I won't make comparisons but here, people don't have access to guns. Here, you don't have people with guns opening fire on the crowd simply for the satisfaction of causing drama and tragedy," </strong>Hollande said, responding to questions during a visit at the Paris Agric fair.</p> <p>They may not have access to guns, but they have access to trucks which they then use to murder dozens of innocent bystanders in increasingly more frequent terrorist incidents, meanwhile the lack of guns prevents the local population from defending itself when one or more terrorists use weapons to attack and murder members of the defenseless French population.</p> <p>Oh yes, "here" the French people have also been living under what has effectively become a permanent state of emergency every since the November 2015 Bataclan mass murder.</p> <p>In fact, more than 230 people have died in a series of assaults in France since the beginning of 2015, and the country has been under a state of emergency rules since November the same year. Trump's comments also drew a rebuke from the mayor of Paris Anne Hidalgo.</p> <p>Meanwhile, another attack has taken place in the German town of Heidelberg, <a href="">where as reported moments ago </a>a knife-yielding man drove his car into a pedestrian area, injuring three, and was later shot by the local police.</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="644" height="428" alt="" src="" /> </div> </div> </div> American people of German descent Business Chivalry Climate change skepticism and denial Conservatism in the United States Donald Trump Donald Trump France François Hollande Political positions of Donald Trump Politics of the United States The Apprentice War WWE Hall of Fame Sat, 25 Feb 2017 17:47:45 +0000 Tyler Durden 588955 at It`s All About The 2018 Mid-Term Elections (Video) <p>By <a href=""><span style="text-decoration: underline;"><span style="color: #0066cc;">EconMatters</span></span></a> </p> <p><em><br /></em> </p> <div class="separator" style="clear: both; text-align: center;"><a title="Open in new window" class="external" href="" style="margin-left: 1em; margin-right: 1em;" target="_blank"><img src="" width="400" height="266" border="0" /></a></div> <p> We discuss the obstructionist strategy that both political parties utilize in the all out fight for more party power, and gaining additional seats at the Midterm Elections in this video. The Republicans will turn on Donald Trump at the drop of a hat!</p> <div class="separator" style="clear: both; text-align: center;"><iframe src="" width="320" height="266" frameborder="0"></iframe></div> <p> © <a href="" target="_blank"><span style="text-decoration: underline;"><span style="color: #0066cc;">EconMatters</span></span></a> All Rights Reserved | <a title="Open in new window" class="external" href="" target="_blank"><span style="text-decoration: underline;"><span style="color: #0066cc;">Facebook</span></span></a> | <a title="Open in new window" class="external" href="!/EconMatters" target="_blank"><span style="text-decoration: underline;"><span style="color: #0066cc;">Twitter</span></span></a> | <a title="Open in new window" class="external" href="" target="_blank"><span style="text-decoration: underline;"><span style="color: #0066cc;">YouTube</span></span></a> | <a title="Open in new window" class="external" href="" target="_blank"><span style="text-decoration: underline;"><span style="color: #0066cc;">Email Digest</span></span></a> | <a title="Open in new window" class="external" href=";node=80" target="_blank"><span style="text-decoration: underline;"><span style="color: #0066cc;">Kindle</span></span></a><strong>&nbsp;</strong><em>&nbsp;</em><span style="text-decoration: underline;">&nbsp;</span></p> American people of German descent American television Climate change skepticism and denial Donald Trump Donald Trump Donald Trump presidential campaign Politics Politics Politics of the United States Republican Party Right-wing politics Technology The Apprentice Twitter Twitter Sat, 25 Feb 2017 17:24:39 +0000 EconMatters 588954 at POWERFUL GOLD & SILVER COILED SPRINGS: Important Charts You Have To See <p><img src="" alt="SRSrocco" width="230" height="123" /></p> <p>By the <em><strong><a href="">SRSrocco Report</a></strong></em>,</p> <p>According to the fundamentals, gold and silver are severely compressed coiled springs looking for an opportunity to release their tremendous power.&nbsp; Yes, it is true, the precious metals still hold a great deal of power.&nbsp; Which is why their prices are constantly controlled by market intervention.</p> <p>Of course, the market intervention of gold and silver didn't start recently.&nbsp; Oh no, this has been going on for quite some time.&nbsp; Even though the Central Banks and Gadflies on the financial networks have been able to BAMBOOZLE the public into believing gold is a "Barbarous relic", fundamentals and the laws of nature can't be broken forever... as serious consequences normally follow.</p> <p>When I read comments from supposedly intelligent people who believe gold is nothing more than a "13th century Middle Ages relic", and "that digital currency is the new future", what in the hell happened to IQ levels recently???</p> <p>There seems to be this notion put forth by many in the Mainstream and Alternative media that "TECHNOLOGY" is going to save us all and be the new religion of the future.&nbsp; While I have nothing against technology per say, it will not be the solution to our extremely serious energy predicament we are about to face head on.</p> <p>For example, there are several voices out in the Alternative media suggesting that "Alien technology" will be finally released into the world, thus allowing our ADVANCED EMPIRE to continue indefinitely.&nbsp; This of course would be a great benefit for Americans as it would allow them to continue filling their homes and rental storage units with all sorts crappy consumer products.</p> <p>According to the supposed history of Alien encounters on the earth, they have been toying with humans for quite some time.&nbsp; <span style="color: #800000;"><strong>So, the idea that they will allow us to use some of their technology to save a species that shows such a high degree of IGNORANCE, STUPIDITY, CRUELTY &amp; GREED, doesn't pass the smell test to me.</strong></span></p> <p>Hold on.. I can take that a step further,&nbsp; How many EMPIRES have come and gone in the past??&nbsp; Okay, we had the Egyptian, Persian, Roman and Mayan Empires to name a few.&nbsp; You would think if Aliens were going to start saving humans from being the POOR UNWORTHY SLOBS they have been for thousands of years, they would have done so already.&nbsp; Wouldn't they??</p> <p>But, maybe we finally passed the test for our species, and now the Aliens think we deserve a break.... just like a freshly opened bottle of Coke.&nbsp; Yes, that's it.&nbsp; We have passed the test of being WISE, PRUDENT, CARING and GENEROUS with one another, the plant and animals... and let's not forget the environment.</p> <p>On the other hand, logic suggests we are about to hit another <em><strong><a href="">SENECA CLIFF</a></strong></em> just like all the other prior empires that dried up and blew away.... and quite quickly, I may add.&nbsp; So, even though there may be more intelligent life forms roaming the galaxy, it doesn't seem quite likely they are going to waste much time on a species that has totally run AMUCK.</p> <p>Which means, we little people here on earth are going to have to take it upon ourselves to continue on-wards when the GREATEST FINANCIAL PONZI SCHEME finally pops.&nbsp; And pop it will.</p> <p><strong>The Gold &amp; Silver Coiled Springs... Storing Tremendous Power</strong></p> <p>Over the years, monetary power shifted away from the precious metals and over to the FIAT MONETARY REGIME (a debt-based worthless paper currency system).&nbsp; This stared long ago, but if we have to put a date on it, it would be 1969.&nbsp; I will get into the particulars in an upcoming article.&nbsp; However, the notion (again) that gold is a "13th century Barbarous relic" fails to consider that the world ran on a Gold-Backed U.S. Dollar system up until 1971.&nbsp; This wasn't that long ago.</p> <p>Moreover, we still used silver in our coinage up until 1965.&nbsp; While some silver coins, such as the Kennedy Half Dollar, were still minted for the general public up until 1969, silver was removed from U.S. coinage in 1965.</p> <p><span style="color: #800000;"><strong>The real reason that silver was finally removed from U.S. coinage in 1965, was that it was too valuable to be used as money.... LOL.</strong></span>&nbsp; I know that sounds silly, but that is the truth.&nbsp; Now, when I say "money", I mean what it has degraded to over the past 50 years.</p> <p>There just wasn't enough silver to go around to meet the insatiable demand coming from the expanding industrial and jewelry sectors.&nbsp; To use silver in coinage as well as supply future industrial and jewelry demand... there just wasn't enough of the shiny metal.</p> <p>This is exactly what <em><strong><a href="">President Lyndon Johnson stated</a></strong></em> during his comments after signing the 1965 Coinage Act:</p> <p style="padding-left: 30px;"><span style="color: #ff0000;"><strong>Now, all of you know these changes are necessary for a very simple reason--silver is a scarce material.</strong></span> Our uses of silver are growing as our population and our economy grows. The hard fact is that silver consumption is now more than double new silver production each year. S<strong>o, in the face of this worldwide shortage of silver, and our rapidly growing need for coins, the only really prudent course was to reduce our dependence upon silver for making our coins.</strong> </p> <p>Well, there you have it.&nbsp; While the grand conspiracy that silver was removed from currency to give more power to the elite may hold some truth, the REAL REASON was much more simple.&nbsp; There just wasn't enough silver to go around.</p> <p>Furthermore, I really don't believe the elite are really as smart and clever as some make them out to be.&nbsp; Again, if we go back in history and look at all the EMPIRES that have come and gone, you would think that the elite would have had a better plan than allow everything to go to hell in a hand-basket... time after time.</p> <p>We must remember, back in day when the world was using silver as money, life was a lot simpler.&nbsp; There were no cell phones, or I-pads.&nbsp; There were no electronics or solar panels that required silver.&nbsp; Rather, we basically spent most of our time walking around dressed in glorified burlap sack clothing, growing food or producing simple consumer goods, while enjoying a bath once a week.&nbsp; Gosh, how times have changed.</p> <p>Regardless, the days of the Fiat Monetary Regime are numbered.&nbsp; There's just too much debt and derivatives over-hanging the system to allow us to continue for much longer.&nbsp; Thus, in order to keep the Fiat Monetary Regime alive, the value of REAL MONEY, such as gold or silver, has to be kept in the DARK.</p> <p>If we look at the following two charts, we can plainly see that gold and silver are both standing at the doorway of a major inflection point:</p> <p style="text-align: center;"><img src="" alt="Gold Long Term chart" width="600" height="272" style="vertical-align: middle;" /></p> <p style="text-align: center;"><img src="" alt="Silver Long Term Chart" width="600" height="276" style="vertical-align: middle;" /></p> <p>Normally, I don't pay much attention to "Technical Analysis", but in this case, we are on the verge of a very critical technical breakout.&nbsp; Of course, this is more important for Hedge Funds, Institutions and large traders to follow, but in both charts, the gold and silver price remained above the 50 MA (50 month Moving Average) for a decade.</p> <p>However, when QE3 was announced at the end of 2012, Central Bank liquidity made its way into stocks, bonds and real estate.&nbsp; The precious metals were left out to dry.</p> <p><span style="color: #800000;"><strong>If we recall from the quote above when Lyndon Johnson stated that silver was a scarce material over 50 years ago, it's even more scarce today.&nbsp;</strong></span> The same with gold.&nbsp; When the gold and silver prices were knocking on the DOOR to reach new highs in 2012, this just could not stand.</p> <p>Which is precisely why both gold and silver's 50 MA level (RED LINE) and have fallen below and stayed there for the past four years.&nbsp; However, both precious metals are once again tapping up against that 50 MA.&nbsp; They first tapped up against the 50 MA in 2016... for good reason.</p> <p><span style="color: #800000;"><strong>When the Dow Jones Index was scaring the living hell out of the markets by rapidly falling in the beginning of 2016, investors were getting a HINT of PRECIOUS METALS RELIGION.</strong></span>&nbsp; Thus, investors flocked into gold and silver (gold and blue colored lines) in a big way, pushing their prices up as the Dow Jones Index fell nearly 1,000 points during five trading days in the beginning of February 2016:</p> <p style="text-align: center;"><img src="" alt="Dow Jones Chart" width="600" height="275" style="vertical-align: middle;" /></p> <p>This isn't rocket science.&nbsp; FEAR provides an excellent motivation for bringing people back to their senses.&nbsp; However, this was just for a short while as the Fed and Central Banks ramped up their stock and bond purchases.&nbsp; God only knows just how insane this amount must be.</p> <p>Thus, calm was brought back into the markets allowing investors to go back to being TOTALLY INSANE once again.&nbsp; Unfortunately, duct tape, baling wire and hot air cannot keep a market from succumbing to the fundamental laws of real economics.</p> <p>The Dow Jones Index is so inflated, it's overvalued by at least 60%.... for starters:</p> <p style="text-align: center;"><img src="" alt="Dow Jones Correction" width="600" height="274" style="vertical-align: middle;" /></p> <p><span style="color: #800000;"><strong>According to the economic contraction cycle that occurs about every six years, the Dow Jones Index is severely overdue for a good 'ole fashion beating.&nbsp;</strong></span> If we assume that a normal correction for the Dow Jones would be for it to fall to about 8,000 points, the index is overvalued by at least 60%.&nbsp;&nbsp; And that is just for starters.</p> <p>As I have mentioned in previous articles, where we are heading is nothing like anything we have experienced before.&nbsp; Well sure, we could go back and look at the remains of the Egyptian, Persian, Roman and Mayan Empires for clues, but this would not be a good topic to bring up at the next family gathering or office party.</p> <p>We must remember, most Americans are way too busy spending money they don't have on crap that they really don't need, to be bothered with the TRUTH that we are going to go head over the SENECA CLIFF, and there isn't anything to stop it.</p> <p>For all those who are new to the alternative media, the SENECA CLIFF came from the work of an ancient Roman philosopher, named Lucius Seneca.&nbsp; According to Lucius Seneca (<a href="">published on Ugo Bardi's blog</a>):</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p style="padding-left: 30px;"><em><strong>increases are of sluggish growth, but the way to ruin is rapid." Lucius Anneaus Seneca, Letters to Lucilius, n. 91</strong></em></p> </blockquote> <p style="text-align: center;"><img src="" alt="Seneca Cliff" width="450" height="277" style="vertical-align: middle;" /></p> <p>Like it or not, we will most certainly experience the ramifications of the SENECA CLIFF in the future.&nbsp; Unfortunately, technology will not save us from this fate.&nbsp; Rather, the more technology we use to try to solve our dire energy predicament, the worse the cliff dive will be.&nbsp; I discussed this in my article, <em><strong><a href="">CONTINENTAL RESOURCES: Example Of What Is Horribly Wrong With The U.S. Shale Oil Industry.</a></strong></em></p> <p>While I am being a broken record on this subject matter, I continue to receive new subscribers every day on the site.&nbsp; Furthermore, the more individuals look at this data and information, the more LIGHT BULBS go off.&nbsp; It takes time for this stuff to sink in.&nbsp; Heck, it has taken me years to come to this realization.</p> <p>Lastly, the value of gold and silver are going to skyrocket in the future.&nbsp; However, I have no idea how bad things are going to be when the PHAT DEBT LADY finally sings.&nbsp; But, at least physical precious metals will offer much better options in the future rather than 99% of the STOCK, BOND and REAL ESTATE liabilities out there which are masquerading as assets.</p> <p>Lastly, if you haven't checked out our new <a href="" target="_blank"><span style="color: #0000ff;"><strong><span style="text-decoration: underline;">PRECIOUS METALS INVESTING</span></strong></span></a> section or our new <a href="" target="_blank"><span style="color: #0000ff;"><strong><span style="text-decoration: underline;">LOWEST COST PRECIOUS METALS STORAGE</span></strong></span></a> page, I highly recommend you do.<strong></strong><em></em></p> <p>Check back for new articles and updates at the <em><strong><a href="">SRSrocco Report</a></strong></em>. </p> Bond cell phones Central Banks Coinage Act CRAP Currency Dow 30 Duct Tape Economic history of the United States Economy Gold standard Matter Metal Money Native element minerals Noble metals Precious Metals Precious metals Real estate Silver Silver as an investment Technical Analysis US Federal Reserve Sat, 25 Feb 2017 17:14:23 +0000 SRSrocco 588952 at Barclays Server Crash Leaves Customers Unble To Withdraw Cash, Use Debit Cards <p>Having managed to stem its recent earnings rout, reporting a Q4 rebound in income from continuing operations which rose to £380 million after reporting a loss of £2.24 billion a year ago, UK's Barclays is facing a more traditional problem: on Saturday Barclays customers have reported problems using their cards in shops and withdrawing money from some cash machines <a href=";ns_campaign=bbc_breaking&amp;ns_source=twitter&amp;ns_linkname=news_central">according to the BBC</a>. </p> <p>Barclays customers tweeted about problems using their cards when out shopping or trying to access online banking on Saturday afternoon. "Wondered why my card was declined when paying for lunch. Barclays servers have crashed. Brilliant," said one customer, James. Other echoed his sentiments.</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">Major problem with Barclays Bank as their server is down effecting all branches nationwide!</p> <p>— Jason Endress (@JasonEndress) <a href="">February 25, 2017</a></p></blockquote> <script src="//"></script><blockquote class="twitter-tweet"> <p dir="ltr" lang="en">Barclays are having a major server issue - all card transactions are being declined and you can't use ATM's either <a href="">#nightmare</a></p> <p>— Tammy Lei (@xtlhx) <a href="">February 25, 2017</a></p></blockquote> <script src="//"></script><p>According to the BBC, The bank said it was "working to fix" a problem and advised customers to use other banks' cash machines. It added that telephone banking and in-branch payments were also affected and apologised "for any inconvenience".</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">We’re still experiencing issues affecting Barclays Debit Card and ATM transactions. Our teams are working to get this restored.</p> <p>— Barclays UK (@BarclaysUK) <a href="">February 25, 2017</a></p></blockquote> <script src="//"></script><p>It is not yet known how many of Barclays' 15 million card customers have been affected by the problems. In a tweet, the bank said: "We're still experiencing issues affecting Barclays Debit Card and ATM transactions. Our teams are working to get this restored." Barclays added: "Technical issues are affecting some digital services. We're investigating this and apologise for any inconvenience."</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">Technical issues are affecting some digital services. We're investigating this and apologise for any inconvenience.</p> <p>— Barclays UK (@BarclaysUK) <a href="">February 25, 2017</a></p></blockquote> <script src="//"></script><p>This is the latest in a series of technical "glitches" to hit the bank recently. Today's problems come months after thousands of Barclays customers in the north of the UK had payments wrongly taken from their accounts. Last October, Barclays said customers were refunded after they had duplicate debit card payments taken.</p> <p>An amusing, if accurate comment following the news, highlights just how "safe" one's cash held in the bank is these days:</p> <blockquote class="twitter-tweet" data-partner="tweetdeck"><p lang="en" dir="ltr"><a href="">@zerohedge</a> seems like money these days is backed by the &#39;full faith and credit&#39; of an institutions IT dept</p> <p>&mdash; StockCats (@StockCats) <a href="">February 25, 2017</a></p></blockquote> <script async src="//" charset="utf-8"></script> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="300" height="168" alt="" src="" /> </div> </div> </div> ATM ATM card Barclays Barclays Barclays Pingit Business Cash machine Debit card Economy Embedded systems Financial services Payment systems Visa Debit Sat, 25 Feb 2017 16:50:31 +0000 Tyler Durden 588951 at CIA Funded Google and Facebook Shouldn't Persecute Alex Jones and <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>&nbsp;</p> <p>Via <a href="">The Daily Bell</a></p> <p>&nbsp;</p> <p><span style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Google isn't a state. It's not a service. It's a private company. They can censor whatever they want. Use a different company. If they want to cut off 1000's of people from their services, that's fine. They are free to do so&nbsp;... This is capitalism, Google isn't a right. Facebook and Twitter are not free speech. They are private companies. - 4Chan</span></p> </blockquote> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Google really isn't a private company. If it continues to attack alternative media like Alex Jones and, it may find lawsuits headed in its direction. The same may go&nbsp;for Facebook too.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">By portraying itself as a private company, Google can do as it chooses, when attacking companies that don't live up to its standards from an advertising point of view.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">It can help cut off companies that don't properly advertise according to the Google rule book. The rule book is general and vague. But Google is supposedly a private company so it really doesn't matter. Google can do pretty much as it wants. And so can Facebook.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">They have both cut or helped cut alternative new websites like those belonging to Alex Jones and</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Yet there is plenty to rebut this perspective. The best or most comprehensive article on Google along with the CIA and Pentagon is an Insurge Intelligence article entitled, How the CIA Made Google.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">It shows that one of the founders of Google, Sergey Brin virtually reported to the Pentagon/ CIA while developing the project that would eventually become Google. Interestingly, later in the article, people close to the CIA and Pentagon are quoted as denying a close relationship. So obviously there is a good deal of sensitivity around the topic.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">When it comes to Facebook, Mark Zuckerberg was funded indirectly by the CIA via&nbsp;Peter Thiel. Thiel is a cofounder of PayPal with Elon Musk of Tesla fame.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Thiel invested $500,000 into Facebook but supposedly this was a CIA investment. Thiel is very close to the CIA. His company Palanitir, supposedly worth some $20 billion, runs secret algorithms for the CIA and other intel agencies. It was just the subject of a Daily Mail story &nbsp;<strong><a href="" target="_blank">here.</a>&nbsp;</strong>Thiel is supposedly a libertarian but we don't see how he can be.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Later, Thiel invested 12.7 million into Facebook. Companies that owe their existence and direction to public intelligence agencies are not private. They ought not to be run as they were.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">There are even larger issues surrounding Facebook and Google. Like all large companies, they have taken advantage of intellectual property rights, corporate personhood,&nbsp;central banking and regulations - the more the better.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Regulations are helpful to large companies because large companies can follow them more closely than smaller ones. Over time, regulations can put smaller companies out of business. Meanwhile, Central bank fiat money is available in copious quantities to large companies like Facebook and Google.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Corporate personhood blames the company rather than the executive for problems. Thus in the case of any difficulties the company can receive a fine, but the corporate executive may escape untouched.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Intellectual property rights are the final and perhaps most important area when it comes to court decisions that have artificially expanded the might and size of corporations. Both Google and Facebook are built on intellectual property rights paid for by others.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Intellectual property rights expanded drastically post civil war. Before the war there were very few corporations but after the war, the Supreme Court handed down decisions that buttressed both corporate personhood and intellectual property rights.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">More recently the Court has attacked intellectual property rights, but the basics remain pretty much untouched. Inventors are given a right to "own" their products for a long fixed period of time. This is fundamental to the wealth creation of Google and Facebook.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">It shouldn't be this way. Just because you have invented something doesn't mean you own it for 20 or 30 years. Or if you do own it, you should protect it with your own money, not with taxpayer dollars.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Additionally, if something is not produced but is an idea, that idea is shared immediately on publication. That's our perspective anyway. There's no reason why the Supreme Court should protect an idea. If someone else uses the idea, he has not directly damaged you. The idea has been made available.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;">Without various investments and relationships, and most importantly without intellectual property rights, corporate personhood, central banking and regulations, both Google and Facebook would be a shadow of what they are now. There would be many more such companies and a good deal more progress would have been made as well.</p> <p style="color: #333333; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; font-size: 16px;"><strong>Conclusion:</strong>&nbsp;Corporations are fictitious entities created basically by Supreme Court decisions. They shouldn't exist as they do, and one day perhaps they won't.</p> <p style="box-sizing: border-box; margin-top: 0.25em; margin-bottom: 0.75em; font-style: inherit; font-variant: inherit; font-weight: inherit; font-stretch: inherit; font-size: 16px; line-height: 1.3; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; color: #333333;"><span style="box-sizing: border-box; font-style: inherit; font-variant: inherit; font-weight: inherit; font-stretch: inherit; font-size: 24px; line-height: inherit; font-family: Roboto, sans-serif; color: #303030;"><a href="" style="box-sizing: border-box; font-style: inherit; font-variant: inherit; font-weight: inherit; font-stretch: inherit; font-size: inherit; line-height: 1.2; font-family: inherit; word-wrap: break-word; color: #222222; outline-style: none; outline-width: 0px;">‘The World Needs Globalization, It Needs Trade’</a>&nbsp;</span></p> <p style="box-sizing: border-box; margin-top: 0.25em; margin-bottom: 0.75em; font-style: inherit; font-variant: inherit; font-weight: inherit; font-stretch: inherit; font-size: 16px; line-height: 1.3; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; color: #333333;"><span style="box-sizing: border-box; font-style: inherit; font-variant: inherit; font-weight: inherit; font-stretch: inherit; font-size: 24px; line-height: inherit; font-family: Roboto, sans-serif; color: #303030;"><a href="" style="box-sizing: border-box; font-style: inherit; font-variant: inherit; font-weight: inherit; font-stretch: inherit; font-size: inherit; line-height: 1.2; font-family: inherit; word-wrap: break-word; color: #1e439a; outline-style: none; outline-width: 0px;">Republicans Reeling in Fed?</a></span></p> <div class="top-article-title" style="box-sizing: border-box; font-style: inherit; font-variant: inherit; font-weight: inherit; font-stretch: inherit; font-size: 24px; line-height: 26px; font-family: Roboto, sans-serif; color: #303030; text-shadow: rgba(255, 255, 255, 0.247059) 0px 1px 0px;"><a href="" style="box-sizing: border-box; font-style: inherit; font-variant: inherit; font-weight: inherit; font-stretch: inherit; font-size: inherit; line-height: 1.2; font-family: inherit; word-wrap: break-word; color: #1e439a; outline-style: none; outline-width: 0px;">Trump’s Complications in Draining the Swamp<br style="box-sizing: border-box;" />&nbsp;</a></div> <div class="top-article-title" style="box-sizing: border-box; font-style: inherit; font-variant: inherit; font-weight: inherit; font-stretch: inherit; font-size: 24px; line-height: 26px; font-family: Roboto, sans-serif; color: #303030; text-shadow: rgba(255, 255, 255, 0.247059) 0px 1px 0px;"><em style="box-sizing: border-box; font-variant: inherit; font-weight: inherit; font-stretch: inherit; font-size: inherit; line-height: inherit; font-family: inherit;">and many more, just a click away ...</em></div> Alphabet Inc. Blog hosting services Business Business Central Intelligence Agency Computing Corporate personhood Facebook fixed Google Google Insurge Intelligence Life extensionists Pentagon Peter Thiel Photo sharing Social information processing Social media Software Supreme Court Technology Transhumanists Twitter Twitter US Federal Reserve Sat, 25 Feb 2017 16:34:47 +0000 TDB 588950 at Trump Administration Unveils First Step In Building Border Wall <p>In the first tangible step toward delivering on Trump's campaign promise to halt unauthorized immigration from Mexico, the U.S. Customs and Border Protection on Friday released plans for picking vendors for President Donald Trump's proposed border wall, issuing a preliminary request for proposals saying it plans to release a formal solicitation around March 6 “for the design and build of several prototype wall structures in the vicinity of the United States border with Mexico.”&nbsp; </p> <p><a href=""><img src="" width="500" height="275" /></a></p> <p>In a document on the federal government's website for business opportunities, the CPB said it would release a request on or about March 6 asking companies for prototype ideas for a wall to be built near the U.S.-Mexican border. Vendors were asked to submit prototype concepts by March 10. After reviewing the ideas submitted by vendors, the agency will evaluate and select the best designs by March 20, then issue a request for proposals by March 24 in which vendors would be asked to price out the cost of building the proposed wall.</p> <p>A spokesman for U.S. Customs and Border Protection <a href="">told Reuters </a>the solicitation published on Friday had "everything to do" with the wall that Trump has proposed. The spokesman said the initial request for information was to give industry the opportunity to tell the Department of Homeland Security, which oversees CBP, what is possible in constructing a border wall. "Once we get feedback from the vendors, we'll look at the ones that are most feasible," the spokesman said. That would be followed by the request for proposals to firm up exactly how much constructing the wall would cost.</p> <p>The document says multiple awards for the barrier are expected by mid-April as part of the process, an aggressive schedule for a government construction project. "It's going to start soon. Way ahead of schedule, way ahead of schedule," Trump told the Conservative Political Action Conference on Friday. </p> <p>A U.S. Department of Homeland Security internal report seen by Reuters this month indicated the border wall would be a series of fences and walls that would cost as much as $21.6 billion to build and take more than three years to complete. The report’s estimated price tag is much higher than a $12 billion figure cited by Trump in his campaign and estimates as high as $15 billion from Republican House of Representatives Speaker Paul Ryan and Senate Majority Leader Mitch McConnell. The plan laid out what it would take to seal the border in three phases of construction of fences and walls covering just over 1,250 miles (2,000 km) by the end of 2020. With 654 miles (1,046 km) of the border already fortified, the new construction would extend almost the length of the entire border.</p> <p>Last month, Trump signed an executive order to begin preliminary steps toward building the wall. No cost estimates were included, and Homeland Security Secretary John Kelly has said his plan is to “secure our southern border with effective physical barriers, advanced technology, and strategic deployment of law enforcement personnel.” </p> <p>According to <a href="">Bloomberg</a>, Konstantin Kakaes, an international security fellow with the New America Foundation, has <a href="">estimated </a>the cost of a 1,000-mile concrete wall 50 feet high, with 10 feet below ground, at $38 billion. </p> <p>Bloomberg also notes that construction companies that have done work for the federal government and may respond to the preliminary request for proposals include: Bechtel Group Inc., which builds airports and nuclear power plants and has done almost $3 billion in work for the U.S. since the beginning of fiscal 2013; BL Harbert International Inc. ($2 billion); and Caddell Construction Co. ($1.9 billion).</p> <p>Ironically, one of the biggest beneficiaries of Trump’s wall may be Mexico’s Cemex SAB, the largest cement maker in the Americas, <a href="">Bloomberg News reported Jan. 25</a>. It would be one of the best-positioned companies to profit because it has operations on both sides of the border.</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="702" height="386" alt="" src="" /> </div> </div> </div> Alt-right Bloomberg News Border barrier Business Climate change skepticism and denial Conservatism in the United States Department of Homeland Security Donald Trump federal government House of Representatives Mexico New America Foundation Nuclear Power Political positions of Donald Trump Politics Politics of the United States Reuters The Apprentice United States WWE Hall of Fame Sat, 25 Feb 2017 16:02:50 +0000 Tyler Durden 588945 at Berkshire Letter Highlights: Buffett Slams Hedge Funds, Likes Immigrants And The US Outlook <p>In its <a href="">latest annual letter, released at 8am on Saturday</a>, Warren Buffett’s Berkshire Hathaway said Q4 profit rose 15% as net income increased to $6.29 billion, or $3,823 a share, from $5.48 billion, or $3,333 the previous year, while operating earnings, which exclude some investment results, were $2,665 a share, a slight miss to the $2,717 consensus estimate.</p> <p><a href=""><img src="" width="500" height="147" /></a></p> <p>In 2016, the 86-year-old billionaire added new companies to his assorted conglomerate portfolio, and completed the purchases of battery giant Duracell and aerospace supplier Precision Castparts, which helped to boost profit in his company’s manufacturing segment.</p> <p>For the full year, Berkshire earned $24.07 billion, unchanged from the previous year, despite a 6% increase in total revenue to $223.6 billion. Unlike 2015, which saw a bumper rebound in the amount of revenues from investment and derivative gains which rose by more than 150% to $10.3 billion, in 2016 this number was more modest at $8.3 billion.</p> <p><a href=""><img src="" width="500" height="352" /></a></p> <p> Among other notable operational highlights, Berkshire said it had booked a $1.2 billion gain from converting its preferred stake in Dow Chemical to common stock, and that it had sold all of the Dow common it converted by Dec. 31. Berkshire also revealed that its massive holdings of Apple stock, which as of December 31, had risen to 61.2 million shares making <a href="">Berkshire one of the Top 10 holders of Apple</a>, was acquired last year for $6.747 billion, or an average of roughly $110 per share. The stake was valued at more than $8.3 billion as of Friday’s $136.66 closing price, leading to a $1.6 billion unbooked gain. In addition to apple, Berkshire's other Top 15 investments are laid out below:</p> <p><a href=""><img src="" width="500" height="304" /></a></p> <p>Ironically, even though Berkshire - along with Goldman and JPM - has been among the biggest beneficiaries of the "Trump rally", with Berkshire Class A shares climibg 15% since Nov. 8, bringing the company’s market capitalization above $400 billion for the first time, beating the S&amp;P's 11% increase, there were no explicit mentions of Donald Trump's name anywhere in the letter. There were, however, various veiled references to the new president. </p> <p>Speaking of performance, Buffett has advised investors to focus on the earnings from his operating businesses, rather than one-time gains or losses on Berkshire’s securities portfolio as these can fluctuate widely on investments and derivatives contracts that he entered years ago. Furthermore, whereas the Berkshire chairman used to compare Berkshire’s book value to the return on the S&amp;P 500, in the past few years he’s also added Berkshire’s stock price. Buffett argues here that book value–a measure of assets minus liabilities–now lags so significantly behind Berkshire's stock because Berkshire has shifted its business model over the past few decades away from largely investing in just insurance companies and publicly traded stocks. Book value doesn't rise when the value of a wholly-owned company does in the same way it rises when a stock goes up. </p> <p>Now, Buffett writes, “the company’s 52-year market-price gain – shown on the facing page – materially exceeds its book-value gain," and lays out his case for why book value is a less important metric than it used to be using language similar to last year's letter. As the WSJ chart below show, in the past year, Berkshire book value rose 10.7%, while its shares rose 23.4%. The S&amp;P 500 returned 12% with dividends. That’s why Berkshire in recent years has said it would buy back shares if the stock ever fell as low as 120% of book value.</p> <p><a href=""><img src="" width="500" height="362" /></a></p> <p>* * * </p> <p>Berkshire's performance and operations aside, it is the actual contents of the letter that is of fascination to the millions of "value investing" Buffett faithful every year. Here, while Buffett does not engage Trump directly, he almost immediately touches on one of the key policies of the new White House namely immigration, as part of his big picture political comments. </p> <p><strong>On immigration and the future of the US economy:</strong></p> <p>On page five Buffett writes that "Americans have combined human ingenuity, a market system, a tide of talented and ambitious immigrants, and the rule of law to deliver abundance beyond any dreams of our forefathers." </p> <p>As the WSJ notes, "that's about as political as he appears to get in his annual section on what makes America great" although he does make the case that immigrants are a core explanation of how "America’s economic dynamism" has played a role in boosting Berkshire over the years. As such, you can count Buffett among those whose faith in America remains unshaken. As he writes: "Early Americans, we should emphasize, were neither smarter nor more hard working than those people who toiled century after century before them. But those venturesome pioneers crafted a system that unleashed human potential, and their successors built upon it. This economic creation will deliver increasing wealth to our progeny far into the future."</p> <p>"Early Americans, we should emphasize, were neither smarter nor more hard working than those people who toiled century after century before them. But those venturesome pioneers crafted a system that&nbsp; unleashed human potential, and their successors built upon it." </p> <p>* * * </p> <p><strong>On the US market:<br /></strong></p> <p>Buffett said the market system that has propelled U.S. economic growth for more than two centuries will continue unabated, echoing his optimism about the country where he amassed a fortune. “The build-up of wealth will be interrupted for short periods from time to time,” Buffett, 86, wrote in his annual letter to Berkshire Hathaway Inc. shareholders, which was posted online Saturday. “It will not, however, be stopped. I’ll repeat what I’ve both said in the past and expect to say in future years: Babies born in America today are the luckiest crop in history.”</p> <p>"American business – and consequently a basket of stocks – is virtually certain to be worth far more in the years ahead. Innovation, productivity gains, entrepreneurial spirit and an abundance of capital will see to that. <em>Ever-present naysayers may prosper by marketing their gloomy forecasts. But heaven help them if they act on the nonsense they peddle</em>." </p> <p>Of course, the noted naysayers may respond quite simply to Buffett by saying "heaven help you" if the government does not bail out your flailing investments during a financial crash, as happened in 2008.</p> <p><strong>On entitlements:</strong></p> <p>Buffett has a favorable perspective on entitlements, writing that "America has, for example, decided that those citizens in their productive years should help both the old and the young. Such forms of aid – sometimes enshrined as “entitlements” – are generally thought of as applying to the aged. But don’t forget that four million American babies are born each year with an entitlement to a public education. That societal commitment, largely financed at the local level, costs about $150,000 per baby. The annual cost totals more than $600 billion, which is about 31?2% of GDP."</p> <p>* * * </p> <p><strong>On fear as an investor's friend:</strong></p> <p>Having covered his optimism in the future of the country, and his faith in the average American, Buffett then quickly moves on to discuss why "widespread fear" is an investor's friend: "Every decade or so, dark<br />clouds will fill the economic skies, and they will briefly rain gold. When downpours of that sort occur, it’s imperative that we rush outdoors carrying washtubs, not teaspoons. And that we will do." However, shortly after, he offers more general investment advice, saying that it's important to "never forget two things." </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>"First, widespread fear is your friend as an investor, because it serves up bargain purchases," he writes. Second, personal fear is your enemy. It will also be unwarranted. Investors who avoid high and unnecessary costs and simply sit for an extended period with a collection of large, conservatively-financed American businesses will almost certainly do well."</p> </blockquote> <p>* * * </p> <p><strong>On Passive vs Active investing, and why Buffett is not a fan of Hedge Funds</strong></p> <p>Buffett writes that "in Berkshire’s 2005 annual report, I argued that active investment management by professionals – in aggregate – would over a period of years underperform the returns achieved by rank amateurs who simply sat still. I explained that the massive fees levied by a variety of “helpers” would leave their clients – again in aggregate – worse off than if the amateurs simply invested in an unmanaged low-cost index fund. "</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Subsequently, I publicly offered to wager $500,000 that no investment pro could select a set of at least five hedge funds – wildly-popular and high-fee investing vehicles – that would over an extended period match the performance of an unmanaged S&amp;P-500 index fund charging only token fees. I suggested a ten-year bet and named a low-cost Vanguard S&amp;P fund as my contender. I then sat back and waited expectantly for a parade of fund managers – who could include their own fund as one of the five – to come forth and defend their occupation. After all, these managers urged others to bet billions on their abilities. Why should they fear putting a little of their own money on the line? </p> <p>&nbsp;</p> <p>What followed was the sound of silence. Though there are thousands of professional investment managers who have amassed staggering fortunes by touting their stock-selecting prowess, only one man – Ted Seides –stepped up to my challenge. Ted was a co-manager of Protégé Partners, an asset manager that had raised money from limited partners to form a fund-of-funds – in other words, a fund that invests in multiple hedge funds. I hadn’t known Ted before our wager, but I like him and admire his willingness to put his money where his mouth was. He has been both straight-forward with me and meticulous in supplying all the data that both he and I have needed to monitor the bet. </p> <p>&nbsp;</p> <p>Ted picked five funds-of-funds whose results were to be averaged and compared against my Vanguard S&amp;P index fund. The five he selected had invested their money in more than 100 hedge funds, which meant that the overall performance of the funds-of-funds would not be distorted by the good or poor results of a single manager. Each fund-of-funds, of course, operated with a layer of fees that sat above the fees charged by the hedge funds in which it had invested. In this doubling-up arrangement, the larger fees were levied by the underlying hedge funds; each of the fund-of-funds imposed an additional fee for its presumed skills in selecting hedge-fund managers.</p> </blockquote> <p>The results aren't pretty for active managers. The S&amp;P 500 index fund has climbed 85.4% to date. Only one hedge fund of hedge funds came remotely close with a 62.8% return. The others are well below with gains of 8.7% 28.3% 2.9% 7.5%.&nbsp; In annualized returns, the S&amp;P 500 index fund returned 7.1%, while the five hedge fund of funds delivered through 2016 an average of just 2.2%.</p> <p><a href=""><img src="" width="500" height="195" /></a></p> <p>&nbsp;</p> <p>Just to hammer the point in, Buffett also says "<strong>in my opinion, the disappointing results for hedge-fund investors that this bet exposed are almost certain to recur in the future</strong>."</p> <p>* * * </p> <p><strong>On others' buyback strategies<br /></strong></p> <p>Continuing his surprising cognitive dissonance demonstrated in recent years, Buffett, a champion of "investing for the long term" has once again ridden to the defence of a corporate practice that is sometimes condemned as the height of short-termism: share buybacks. In his latest annual letter, the chief executive of Berkshire Hathaway, urged everyone in what he called the “heated” debate over buybacks to “take a deep breath”.&nbsp; </p> <p>“Some people have come close to calling them un-American - characterizing them as corporate misdeeds that divert funds needed for productive endeavors. That simply isn’t the case.”</p> <p>Buffett looks at the lesser-discussed question of what price the company is buying its shares back at, noting that repurchases only make sense for long-term shareholders if they're done at a level below the company's intrinsic value.&nbsp; In that sense, Mr. Buffett says more companies should disclose the maximum price at which they would buy back shares, noting: </p> <p>"It is puzzling, therefore, that corporate repurchase announcements almost never refer to a price above which repurchases will be eschewed. That certainly wouldn’t be the case if a management was buying an outside business. There, price would always factor into a buy-or-pass decision."</p> <p>Buffett also dismisses arguments that buybacks are diverting funds from more worthwhile expenditures. Some have argued that the money spent to repurchase shares in recent years could be spent on expanding operations, but "that simply isn't the case," he writes. "Both American corporations and private investors are today awash in funds looking to be sensibly deployed. I’m not aware of any enticing project that in recent years has died for lack of capital." </p> <p>Which, of course, is the whole point: its not the lack of capital, it's the lack of IRR-worthy projects presented to corporate CFOs and Treasurers, who instead of investing in long-term growth focus on the immediate gratification for shareholders and management at the expense of newly incurred debt.</p> <p>* * * </p> <p><strong>On Berkshire's buyback strategy</strong></p> <p>Giving a thumbs up to others' buybacks, Buffett then reminds readers about Berkshire's own buyback policy. Berkshire has said publicly, and repeatedly, that it will buy back shares if they ever fall to within 120% of book value.&nbsp; "Our Board has concluded that purchases at that level clearly bring an instant and material benefit to continuing shareholders," he writes. "By our estimate, a 120%-of-book price is a significant discount to Berkshire’s intrinsic value."&nbsp; </p> <p>But even then, Mr. Buffett doesn't promise to rush in and buy up every available share. "If that level is reached," he writes, "we will instead attempt to blend a desire to make meaningful purchases at a value-creating price with a related goal of not over-influencing the market." Berkshire has rarely actually repurchased its stock, in part because Mr. Buffett has signaled so clearly that 120% of book value is a level where he considers the stock to be a screaming buy.&nbsp; </p> <p>And that, he writes, is fine by him: "Charlie and I prefer to see Berkshire shares sell in a fairly narrow range around intrinsic value, neither wishing them to sell at an unwarranted high price – it’s no fun having owners who are disappointed with their purchases – nor one too low."</p> <p>* * * </p> <p><strong>Buffett again slams of hedge funds</strong></p> <p>And the hits just keep on coming for the "two and twenty" industry which Buffett is clearly not a fan on.&nbsp; He writes that management fees invariably eat into returns, and especially the famous "two and twenty" fee structure. "Under this lopsided arrangement, a hedge-fund operator’s ability to simply pile up assets under management has made many of these managers extraordinarily rich, even as their investments have performed poorly.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>"I estimate that over the nine-year period roughly 60% – gulp! – of all gains achieved by the five funds-of-funds were diverted to the two levels of managers. That was their misbegotten reward for accomplishing something far short of what their many hundreds of limited partners could have effortlessly – and with virtually no cost – achieved on their own."</p> </blockquote> <p>He then generalizes his observation as follows: </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>So that was my argument – and now let me put it into a simple equation. If Group A (active investors) and Group B (do-nothing investors) comprise the total investing universe, and B is destined to achieve&nbsp; average results before costs, so, too, must A. Whichever group has the lower costs will win. (The academic in me requires me to mention that there is a very minor point – not worth detailing – that slightly modifies this formulation.) And if Group A has exorbitant costs, its shortfall will be substantial.</p> </blockquote> <p>Not everyone is a terrible manager: "There are, of course, some skilled individuals who are highly likely to out-perform the S&amp;P over long stretches. In my lifetime, though, I’ve identified – early on – only ten or so professionals that I expected&nbsp; would accomplish this feat. There are no doubt many hundreds of people – perhaps thousands – whom I have never met and whose abilities would equal those of the people I’ve identified. The job, after all, is not impossible. <strong>The problem simply is that the great majority of managers who attempt to over-perform will fail. The probability is also very high that the person soliciting your funds will not be the exception who does well</strong>. Bill Ruane – a truly wonderful human being and a man whom I identified 60 years ago as almost certain to deliver superior investment returns over the long haul – said it well: “In investment management, the progression is from the innovators to the imitators to the swarming incompetents.”</p> <p>That said, perhaps Buffett can ask Sequoia, which the late Bill Ruane founded via Euane, Cuniniff and Goldfarb, how its investment in Valeant has done in the past few years.&nbsp; A fund that was until recently the best-performing large-cap growth mutual fund tracked by Morningstar over the previous 15 years, Sequoia was recently slammed by the spectacular tumble of Valeant shares: Valeant was Sequoia's largest position by far at the time of its fall. There's more irony in the story: Sequoia used profits made by selling shares of Berkshire Hathaway to first buy Valeant in 2010.</p> <p>Buffett continues, comparing hedge fund managers to lucky monkeys: </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Further complicating the search for the rare high-fee manager who is worth his or her pay is the fact that some investment professionals, just as some amateurs, will be lucky over short periods. If 1,000 managers make a market prediction at the beginning of a year, it’s very likely that the calls of at least one will be correct for nine consecutive years. Of course<strong>, 1,000 monkeys would be just as likely to produce a seemingly all-wise prophet.</strong> But there would remain a difference: <strong>The lucky monkey would not find people standing in line to invest with him.</strong></p> </blockquote> <p>Finally, Buffett writes, "there are three connected realities that cause investing success to breed failure. <strong>First, a good record quickly attracts a torrent of money. </strong>Second, huge sums invariably act as an anchor on investment performance: What is easy with millions, struggles with billions (sob!). <strong>Third, most managers will nevertheless seek new money because of their personal equation – namely, the more funds they have under management, the more their fees."</strong></p> <p>He is not wrong in that observation, and continues: "these three points are hardly new ground for me: In January 1966, when I was managing $44 million, I wrote my limited partners: “I feel substantially greater size is more likely to harm future results than to help them. This might not be true for my own personal results, but it is likely to be true for your results. <strong>Therefore, . . . I intend to admit no additional partners to BPL. I have notified Susie that if we have any more children, it is up to her to find some other partnership for them</strong>.”</p> <p>His bottom line:&nbsp; "<em>When trillions of dollars are managed by Wall Streeters charging high fees, <strong>it will usually be the managers who reap outsized profits, not the clients. Both large and small investors should stick with low-cost index funds</strong></em>."</p> <p>Judging by the collapse in the hedge fund industry, this observation is starting to take hold.</p> <p>* * * </p> <p><strong>On his "hero", passive investing's patron saint, Vanguard's Jack Bogle</strong></p> <p>If Buffett hates hedge funds, and active investing, it is only&nbsp; logical that he would praise passive investors and their god, Vanguard's Jack Bogle. And sure enough, after four pages blasting what he believes to be overcompensated hedge fund managers, Buffett sets aside space to honor indexing champion and Vanguard Group founder, Jack Bogle: </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>"<strong><em>If a statue is ever erected to honor the person who has done the most for American investors, the hands-down choice should be Jack Bogle</em></strong>. For decades, Jack has urged investors to invest in ultra-low-cost index funds. In his crusade, he amassed only a tiny percentage of the wealth that has typically flowed to managers who have promised their investors large rewards while delivering them nothing – or, as in our bet, less than nothing – of added value. In his early years, Jack was frequently mocked by the investment-management industry. Today, however, he has the satisfaction of knowing that he helped millions of investors realize far better returns on their savings than they otherwise would have earned. <em><strong>He is a hero to them and to me.</strong></em></p> </blockquote> <p>And as for Bogle's hero? Activist Central Banks, who now intervene directly in capital markets any time there is even a tiny dip in the S&amp;P, making hedging unnecessary, and shorting suicidal. </p> <p>* * *</p> <p><strong>On his investment in Bank of America </strong></p> <p>Going back to the topic of buybacks, Buffett applauds Bank of America, which he believes has been undervalued, for buying back its shares.&nbsp; "Many of our investees, including Bank of America, have been repurchasing shares, some quite aggressively," he writes. <em>"We very much like this behavior because we believe the repurchased shares have in most cases been underpriced.</em>" </p> <p>As the WSJ points out, this comment comes after he adds an interesting nugget to his paragraphs on holdings of Bank of America warrants and preferred shares starting on page 19. In short, Berkshire has warrants to buy 700 million shares of Bank of America at $7.14 apiece. The stock closed Friday at $24.23, so Mr. Buffett is looking at a paper gain of about $12 billion. In the past, Berkshire has said it would probably only exercise the warrants just before they expired, in September 2021. But now, <em>Buffett says he would consider doing it if Bank of America raises its dividend, and would exchange its Bank of America preferred shares to fund the transaction. </em>Right now, the bank pays a 30 cent-per-share dividend annually, <strong>but it it hits 44 cents, it would make the swap, he writes</strong>.</p> <p>Why 44 cents? He doesn't spell it out here, but that works out to just over $300 million in annual dividend proceeds. The preferred stock Berkshire now owns pays a chunky 6% annual dividend that also works out to $300 million a year. The preferreds have little downside, so long as Bank of America stays solvent, but they have no upside either. Mr. Buffett is saying he'd rather enjoy the upside on the common stock, about as clear a buy signal as you'll get from the famed stockpicker. Bank of America raised its dividend to 30 cents annually from 20 cents last year. </p> <p>* * * </p> <p><strong>On the non-GAAP Charade</strong></p> <p>Having skewered hedge funds, Buffett then turns to another recurring peeve of his: adjusted earnings and begins with an old story: "During the accounting nonsense that flourished during the 1960s, the story was told of a CEO who, as his company revved up to go public, asked prospective auditors, 'What is two plus two?' The answer that won the assignment, of course, was, 'What number do you have in mind?'"</p> <p>To be sure, Buffett has railed against non-GAAP earnings in the past and this year is no different, as he hones in on two specific items often excluded from adjusted earnings measures. </p> <p>First, is "restructuring" costs. As he puts it: "Berkshire, I would say, has been restructuring from the first day we took over in 1965," though the firm has never singled out those costs and said to ignore them. </p> <p>Second, is "stock-based compensation." The top executives at many companies typically get at least 20% of their compensation this way, making it hard to claim it's not an expense. As Mr. Buffett puts it: "CEOs who go down that road are, in effect, saying to shareholders, “If you pay me a bundle in options or restricted stock, don’t worry about its effect on earnings. I’ll ‘adjust’ it away.”</p> <p>* * * </p> <p><strong>"Major Slowing" in railcar demand</strong></p> <p>As the WSJ notes, "Berkshire is such a large conglomerate that other conglomerates are tucked inside it." One is Marmon, acquired from the Pritzker family in 2008. Marmon alone employs more than 18,000 people and recorded pre-tax earnings of more than $750 million last year. It consists of more than 170 manufacturing and servicing businesses that operate withing 15 business sectors, with the main one being a major railcar leasing business called UTLX.&nbsp; </p> <p><strong>Railcar leasing is cyclical, and Mr. Buffett says the business experience "a major slowdown in demand last year, which will cause earnings to decline in 2017</strong>. Fleet utilization was 91% in December, down from 97% a year earlier." Still, Mr. Buffett says he remains a fan of the operation. "Big swings in railcar demand have occurred in the past and they will continue," he writes. "Nevertheless, we very much like this business and expect decent returns on equity capital over the years."</p> <p>* * * </p> <p><strong>Declining Coal Use</strong></p> <p>Linked to the slowdown in railcar demand, the Berkshire annual report notes that BNSF railroad's earnings fell 16% in 2016 to $3.6 billion without an explanation. Since BNSF is one of Berkshire's biggest units, this drop had a notable impact on the company's full-year results. The annual report gives a few more details: <strong>"In 2016, we experienced declining demand, especially in our coal and crude oil categories. Coal had the largest decline, driven by structural changes in that business as well as competition from low natural gas prices."</strong> </p> <p>BNSF's freight revenues from coal fell 27% in 2016. But freight revenues also fell in other segments including consumer products and industrial products, suggesting the economic slowdown was much broader than expected. That, as the <a href="">WSJ notes</a>, might explain why Mr. Buffett didn't mention BNSF's top executives by name, as he has in past letters. Mr. Buffett tends to only name managers when he's praising them.</p> <p>* * * </p> <p><em>There is much more in the full letter below (<a href="">link</a>)</em></p> <p> <iframe src=";view_mode=scroll&amp;access_key=key-CNbaXhjP1N1zBs6j3XpW&amp;show_recommendations=false" width="100%" height="600" frameborder="0" scrolling="no"></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="1400" height="782" alt="" src="" /> </div> </div> </div> Apple B+ Bank of America Bank of America Berkshire Hathaway Berkshire Hathaway Book Value Business Capital Markets Central Banks Cognitive Dissonance Crude Crude Oil Dow 30 Economy Equity securities Fail Finance Financial services Fund of Funds Hedge fund Institutional investors Insurance Companies Investment Money Morningstar Mutual fund Natural Gas Restricted Stock S&P S&P 500 Stock market Valuation Value Investing Value investing Warren Buffett White House White House Sat, 25 Feb 2017 15:12:38 +0000 Tyler Durden 588944 at In Latest Intel Mutiny Against Trump, DHS Analysts Say White House Travel Ban Is Wrong <p>Another day, another symbolic 'mutiny' has broken out against president Trump in the US intel community, this time involving the Department of Homeland Security. </p> <p>Overnight, analysts at DHS Office of Intelligence and Analysis found "insufficient evidence" that citizens of seven Muslim-majority countries included in President Donald Trump's travel ban pose a terror threat to the United States. According to a draft document obtained by <a href="">The Associated Press</a>, citizenship is an "unlikely indicator" of terrorism threats to the United States and that few people from the countries Trump listed in his travel ban have carried out attacks or been involved in terrorism-related activities in the U.S. since Syria's civil war started in 2011. The DHS report said its staff “assesses that country of citizenship is unlikely to be a reliable indicator of potential terrorist activity.” </p> <p><strong>The White House on Friday dismissed it as politically motivated and poorly researched. </strong>Trump has previously cited terrorism concerns as the primary reason he signed the sweeping temporary travel ban in late January, which also halted the U.S. refugee program.</p> <p>The DHS report was prepared in response to the White House request for intelligence assessments of terrorist threats posed by migration. Current and former officials with direct knowledge of the Homeland Security report said it was compiled on short notice, but that it relied on information that analysts routinely collect and examine in order to guide counterterrorism policies. The report was shared with agencies outside DHS.</p> <p>The three-page report challenges Trump's core claims. It said that of 82 people the government determined were inspired by a foreign terrorist group to carry out or try to carry out an attack in the United States, just over half were U.S. citizens born in the United States. The others were from 26 countries, led by Pakistan, Somalia, Bangladesh, Cuba, Ethiopia, Iraq and Uzbekistan. Of these, only Somalia and Iraq were among the seven nations included in the ban. Of the other five nations, one person each from Iran, Sudan and Yemen was also involved in those terrorism cases, but none from Syria. It did not say if any were Libyan. </p> <p>The report also found that terrorist organizations in Iran, Libya, Somalia and Sudan are regionally focused, while groups in Iraq, Syria and Yemen do pose a threat to the U.S. The seven countries were included in a law President Barack Obama signed in 2015 that updated visa requirements for foreigners who had traveled to those countries.</p> <p>Homeland Security spokeswoman Gillian Christensen on Friday did not dispute the report's authenticity, but said it was not a final comprehensive review of the government's intelligence. "While DHS was asked to draft a comprehensive report on this issue, the document you're referencing was commentary from a single intelligence source versus an official, robust document with thorough interagency sourcing," Christensen said. "The ... report does not include data from other intelligence community sources. It is incomplete."</p> <p>Still, as the <a href="">WSJ notes</a>, the report is the latest volley in a struggle between intelligence officials and the Trump administration that has rippled across several agencies. Some officials have critiqued administration policies, while the president and senior members of his staff have accused officials of leaking information to undermine his administration and the legitimacy of his election.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>The compilation and disclosure of an intelligence report so directly at odds with top White House priorities marks an unusually sharp rupture between the administration and career public servants. It also underscores the difficulty President Donald Trump has had in converting his confrontational and bombastic campaign rhetoric into public policy.</p> </blockquote> <p>Coming the same day as Trump's bashing of the FBI, an agency he accused of being unable to find leakers, the administration was disappointed the report's leaked findings. Trump administration officials said the assessment ignored available information that supports the immigration ban and the report they requested has yet to be presented. They were quick to preempt speculation that this is just the latest mutiny against Trump.</p> <p>“The president asked for an intelligence assessment. This is not the intelligence assessment the president asked for,” a senior administration official said cited by the WSJ. The official said intelligence is already available on the countries included in Mr. Trump’s ban and just needs to be compiled. </p> <p><strong>“The intelligence community is combining resources to put together a comprehensive report using all available sources which is driven by data and intelligence and not politics," </strong>said White House spokesman Michael Short.</p> <p>A spokesperson for the Department of Homeland Security also took issue with the quality of the report, describing it as “commentary” based on public sources rather than “an official, robust document with thorough interagency sourcing.” </p> <p>“It is clear on its face that it is an incomplete product that fails to find evidence of terrorism by simply refusing to look at all the available evidence,” said Gillian M. Christensen, the department’s acting press secretary. “Any suggestion by opponents of the president’s policies that senior [homeland security] intelligence officials would politicize this process or a report’s final conclusions is absurd and not factually accurate. <strong>The dispute with this product was over sources and quality, not politics</strong>,” Ms. Christensen said.</p> <p>* * * </p> <p>It was not the first time this week that DHS officials were at odds with White House policies and statements. On Thursday, DHS Secretary John Kelly, on a trip to Mexico, assured officials there that the U.S. would not undertake “mass deportations” of illegal immigrants and that the U.S. military would not play a role in immigration enforcement. The reassurance on military involvement apparently contradicted a statement by Trump earlier that day, in which he described enforcement as a “military operation.” White House officials later clarified that Trump was referring to “military precision,” not actual military actions. </p> <p>The new DHS report, which is not classified, states that its findings are based on public statistics and reports from the Department of Justice and the State Department as well as an annual report on global threats produced by U.S. intelligence agencies. CNN reported Thursday that the intelligence office had compiled a report that was at odds with the administration’s views. Trump has defended the immigration ban, noting that the seven countries were identified by the Obama administration as “sources of terror,” and that two of them, Iraq and Syria, are home bases to members of the self-proclaimed Islamic State, who conceivably could enter the U.S. posing as immigrants or refugees.</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="460" height="268" alt="" src="" /> </div> </div> </div> Barack Obama Business Climate change skepticism and denial Conservatism in the United States Department of Justice Department of Justice Department of State DHS Office Donald Trump Donald Trump FBI Federal Bureau of Investigation Government Iran Iraq Mexico None Obama Administration Obama administration Political positions of Donald Trump Politics Somalia The Apprentice Trump Administration U.S. intelligence United States United States Department of Homeland Security United States intelligence agencies US military Uzbekistan War White House White House WWE Hall of Fame Sat, 25 Feb 2017 14:01:42 +0000 Tyler Durden 588943 at Starbucks' 'Brand Perception' Takes A Massive Hit After Announcing Plans To Hire 10,000 Refugees <p>About a month ago, <strong>Starbucks CEO Howard Schultz decided to 'take a stand' in defiance of Trump's immigration executive order</strong> and penned a message to the world vowing, among other things, to <strong>hire 10,000 refugees over the next 5 years and "build bridges, not walls, with Mexico"</strong>.&nbsp; Here are some excerpts from the <a href="">politically charged message</a> drafted by Schultz with <strong>"deep concern and a heavy heart"</strong>:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>I write to you today with deep concern, a heavy heart and a resolute promise. Let me begin with the news that is immediately in front of us: <strong>we have all been witness to the confusion, surprise and opposition to the Executive Order that President Trump issued on Friday, effectively banning people from several predominantly Muslim countries from entering the United States, including refugees fleeing wars</strong>. I can assure you that our Partner Resources team has been in direct contact with the partners who are impacted by this immigration ban, and we are doing everything possible to support and help them to navigate through this confusing period.</p> <p>&nbsp;</p> <p><strong>Hiring Refugees</strong>: We have a long history of hiring young people looking for opportunities and a pathway to a new life around the world. This is why we are <strong>doubling down</strong> on this commitment by working with our equity market employees as well as joint venture and licensed market partners in a <strong>concerted effort to welcome and seek opportunities for those fleeing war, violence, persecution and discrimination</strong>.&nbsp; There are more than 65 million citizens of the world recognized as refugees by the United Nations, and we are <strong>developing plans to hire 10,000 of them over five years</strong> in the 75 countries around the world where Starbucks does business.</p> <p>&nbsp;</p> <p><strong>Building Bridges, Not Walls, With Mexico:</strong> We have been open for business in Mexico since 2002, and have since opened almost 600 stores in 60 cities across the country, which together employ over 7,000 Mexican partners who proudly wear the green apron. Coffee is what unites our common heritage, and as I told Alberto Torrado, the leader of our partnership with Alsea in Mexico, we stand ready to help and support our Mexican customers, partners and their families as they navigate what impact proposed trade sanctions, immigration restrictions and taxes might have on their business and their trust of Americans.</p> </blockquote> <p>Unfortunately, Schultz quickly found out the hard way that while most adult-aged Americans can agree that they like coffee, <strong>roughly 50% disagree with his leftist political opinions</strong>.&nbsp; Which, according to <a href="">Yahoo Finance</a>, has sent the company's "brand perception" into a downward spiral since January 29th.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>The coffee giant's <strong>consumer perception levels have fallen by two-thirds since late January, according to YouGov BrandIndex.</strong></p> <p>&nbsp;</p> <p>The perception tracker measures if respondents have "heard anything about the brand in the last two weeks, through advertising, news or word of mouth, was it positive or negative." <strong>In Starbucks' case, perception is still overall positive, but significantly lower than it was prior to CEO Howard Schultz published a public letter outlining the company's plans to give refugees jobs.</strong></p> <p>&nbsp;</p> <p><strong>YouGov says that there's reason to believe backlash will impact the chain's bottom line. </strong>Two days before Starbucks' announcement, 30% of consumers said they'd consider buying from Starbucks the next time they were craving coffee, the highest proportion in nearly a year. Now, the percentage is down to 24%, according to YouGov. </p> </blockquote> <p><a href=""><img src="" alt="SBUX" width="600" height="369" /></a></p> <p>&nbsp;</p> <p>Of course, this isn't the only time Starbucks has alienated customers by publicly pursuing a controversial political agenda.&nbsp; As we <a href="">noted back in March 2015</a>, the Company was forced to abandon its <strong>"Race Together" </strong>campaign that was intended<strong> "to be a catalyst for a larger conversation on race"</strong> relations in the United States but really just served to piss off a bunch of anxious people eager to grab their cup of coffee and be on their way.</p> <p><img src="" alt="SBUX" width="550" height="370" /></p> <p>&nbsp;</p> <p>Apparently nothing will ever convince some of America's leftist billionaires that, no matter how rich they become, they will never be able to force their political opinions on Americans who see through their propaganda...just ask all the rich people that just lost a fortune trying to elect Hillary.</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="514" height="301" alt="" src="" /> </div> </div> </div> Coffee Coffee in Seattle Food and drink Howard Schultz Illegal immigration Mexico Seattle Social Issues Starbucks United Nations Sat, 25 Feb 2017 12:05:00 +0000 Tyler Durden 588918 at