http://www.zerohedge.com/fullrss2.xml/wp-content/plugins/uBillboard/%252520%252520liker.profile_URL%252520%252520 en The Federal Reserve Is A Saboteur - And The "Experts" Are Oblivious http://www.zerohedge.com/news/2017-06-28/federal-reserve-saboteur-and-experts-are-oblivious <p><a href="http://www.alt-market.com/articles/3221-the-federal-reserve-is-a-saboteur-and-the-qexpertsq-are-oblivious"><em>Authored by Brandon Smith via Alt-Market.com,</em></a></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/06/22/20170628_alt.jpg"><img height="290" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/06/22/20170628_alt.jpg" width="488" /></a></p> <p><strong>I have written on the subject of the Federal Reserve&#39;s deliberate sabotage of the U.S. economy many times in the past. </strong>In fact, I even once referred to the Fed as an &quot;economic suicide bomber.&quot; I still believe the label fits perfectly, and<strong> the Fed&#39;s recent actions I think directly confirm my accusations.</strong></p> <p>Back in 2015, when I predicted that the central bankers would shift gears dramatically into <a href="http://www.alt-market.com/articles/2695-the-real-reasons-why-the-fed-will-hike-interest-rates">a program of consistent interest rate hikes</a> and that they would begin cutting off stimulus to the U.S. financial sector and more specifically stock markets, almost no one wanted to hear it. The crowd-think at that time was that the Fed would inevitably move to negative interest rates, and that raising rates was simply &quot;impossible.&quot;</p> <p>Many analysts, even in the liberty movement, quickly adopted this theory without question. Why? Because of <strong>a core assumption that is simply false; the assumption that the Federal Reserve&#39;s goal is to maintain the U.S. economy at all costs or at least maintain the illusion that the economy is stable</strong>. They assume that the U.S. economy is indispensable to the globalists and that the U.S. dollar is an unassailable tool in their arsenal. Therefore, the Fed would never deliberately undermine the American fiscal structure because without it &quot;they lose their golden goose.&quot;</p> <p><strong>This is, of course, foolish nonsense.</strong></p> <p><strong>Since its initial inception from 1913-1916, the Federal Reserve has been responsible for the loss of 98% of the dollar&#39;s buying power.</strong> Idiot analysts in the mainstream argue that this statistic is not as bad as it seems because &quot;people have been collecting interest&quot; on their cash while the <a href="http://src.boblivingstonletter.com/ego/0d110c3a-e898-4ab6-80ea-b6410864994f/402503264/317563" rel="noreferrer" target="_blank">dollar&#39;s value has been dropping</a>, and this somehow negates or outweighs any losses in purchasing power. These guys are so dumb they don&#39;t even realize the underlying black hole in their own argument.</p> <p>IF someone put their savings into an account or into treasury bonds and earned interest from the moment the Fed began quickly undermining dollar value way back in 1959, then yes, they MIGHT have offset the loss by collecting interest. However, this argument, insanely, forgets to take into account the many millions of people who were born long after the Fed began its devaluation program. What about the &quot;savers&quot; born in 1980, or 1990? They didn&#39;t have the opportunity to collect interest to offset the losses already created by the Fed. They were born into an economy where saving is inherently more difficult because a person must work much harder to save the same amount of capital that their parents saved, not to mention purchase the same items their parents enjoyed, such as a home or a car.</p> <p><strong>Over the decades, the Fed has made it nearly impossible for households with one wage earner to support a family.</strong> Today, men and women who should be in the prime of their careers and starting families are for the first time in 130 years more likely to be <a href="http://src.boblivingstonletter.com/ego/ef12bb0c-1c22-4f0f-877b-1de46a565fbc/402503264/317563" rel="noreferrer" target="_blank">living at home with their parents</a> than any other living arrangement.</p> <p>People are more likely to be living with their parents now than back during time periods in which young people actually wanted to stay close to their parents to take care of them. That is to say, most young people are stuck at home because they can&#39;t afford to do anything else, not because they necessarily want to be there.</p> <p><strong>This is almost entirely a symptom of central bank devaluation of the currency and its purchasing potential.</strong> The degradation of the American wage earner since the Fed fiat machine began killing the greenback is clear as day.</p> <p>The Fed is also responsible for almost every single major economic downturn since it was established. As I have noted in the past, <strong>Ben Bernanke openly admitted that the Fed was the root cause of the prolonged economic carnage during the Great Depression on Nov. 8, 2002</strong>, in a speech given at &quot;<a href="http://src.boblivingstonletter.com/ego/dc667ea9-acff-4a4a-8c82-68cd4d237126/402503264/317563" rel="noreferrer" target="_blank">A Conference to Honor Milton Friedman ... On the Occasion of His 90th Birthday</a>:&quot;</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>&quot;In short, according to Friedman and Schwartz, because of institutional changes and misguided doctrines, the banking panics of the Great Contraction were much more severe and widespread than would have normally occurred during a downturn.</strong></p> <p>&nbsp;</p> <p><strong>Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression. You&#39;re right, we did it. We&#39;re very sorry. But thanks to you, we won&#39;t do it again.&quot;</strong></p> </blockquote> <p>Bernanke is referring in part to the Fed&#39;s program of raising interest rates into an economic downturn, exacerbating the situation in the early 1930&#39;s and making the system highly unstable. He lies and says the Fed &quot;won&#39;t do it again;&quot; they are doing it RIGHT NOW.</p> <p><strong>The Fed was the core instigator behind the credit and derivatives bubble that led to the crash in 2008, a crash that has caused depression-like conditions in America that we are still to this day dealing with. </strong>Through artificially low interest rates and in partnership with sectors of government, poor lending standards were highly incentivised and a massive debt trap was created. Former Fed chairman <a href="http://src.boblivingstonletter.com/ego/4ab96854-1500-4dcc-955e-b2f822ac9351/402503264/317563" rel="noreferrer" target="_blank">Alan Greenspan</a> publicly admitted in an interview that the central bank KNEW an irrational bubble had formed, but claims they assumed the negative factors would &quot;wash out.&quot;</p> <p>Yet again, a Fed chairman admits that they either knew about or caused a major financial crisis. So we are left two possible conclusions &mdash; they were too stupid to speak up and intervene, or, they wanted these disasters to occur.</p> <p><strong>Today, we are faced with two more brewing bubble catastrophes engineered by the Fed: The stock market bubble and the dollar/treasury bond bubble.</strong></p> <p>The stock market bubble is rather obvious and openly admitted at this point. As the former head of the Federal Reserve Dallas branch, Richard Fisher, admitted in an interview with CNBC, the U.S. central bank in particular has made its business the manipulation of the stock market to the upside since 2009:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>&quot;What the Fed did &mdash; and I was part of that group &mdash; is we front-loaded a tremendous market rally, starting in 2009.</strong></p> <p>&nbsp;</p> <p><strong>It&#39;s sort of what I call the &quot;reverse Whimpy factor&quot; &mdash; give me two hamburgers today for one tomorrow.&quot;</strong></p> </blockquote> <p>Fisher went on to hint at his very reserved view of the impending danger:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>&quot;I was warning my colleagues, Don&#39;t go wobbly if we have a 10 to 20 percent correction at some point... Everybody you talk to... has been warning that these markets are heavily priced.&quot; [In reference to interest rate hikes]</strong></p> </blockquote> <p>The Fed &quot;front-loaded&quot; the incredible bull market rally through various methods, but one of the key tools was the use of near-zero interest rate overnight loans from the central bank, which corporations around the world have been exploiting since the 2008 crash to fund stock buybacks and pump up the value of stock markets. As noted by Edward Swanson, author of a study from Texas A&amp;M on stock buybacks used to offset poor fundamentals:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>&quot;We can&#39;t say for sure what would have happened without the repurchase, but it really looks like the stock would have kept going down because of the decline in fundamentals... these repurchases seem to hold up the stock price.&quot;</strong></p> </blockquote> <p>In the initial TARP audit, an audit that was limited and never again duplicated, it was revealed that corporations had absorbed trillions in overnight loans from the Fed. It was at this time that stock buybacks became the go-to method to artificially prop up equities values.</p> <p><strong>The problem is, just like they did at the start of the Great Depression, the central bank is once again raising interest rates into a declining economy. </strong>This means that all those no-cost loans used by corporations to buy back their own stocks are now going to have a price tag attached. An interest rate of 1% might not seem like much to someone who borrows $1000, but what about for someone who borrows $1 Trillion? Yes, borrowing at ANY interest rate becomes impossible when you need that much capital to prop up your stock. The loans have to be free, otherwise, there will be no loans.</p> <p>Thus, we have to ask ourselves another question; is the Fed really ignorant enough to NOT know that raising rates will kill stock markets? They openly admit that they knew what they were doing when they inflated stock markets, so it seems to me that they would know how to deflate stock markets. Therefore, if they deliberately engineered the market rally with low interest rates, it follows that they are deliberately engineering a crash in markets using higher interest rates.</p> <p><strong>Mainstream economists and investment &quot;experts&quot; appear rather bewildered by the Federal Reserve&#39;s exuberance on rate hikes.</strong>&nbsp; Many assumed that Janet Yellen would hint at a pullback from the hike schedule due to the considerable level of negative data on our fiscal structure released over the past six months.&nbsp; <a href="https://www.bloomberg.com/news/articles/2017-06-27/yellen-keeps-fed-on-track-for-rate-hikes-amid-rich-asset-prices">Yellen has done the opposite</a>.&nbsp; In fact, Fed officials are now stating that equities and other assets appear to be &quot;overvalued&quot; and that markets have become complacent.&nbsp; This is a major reversal from the central bank&#39;s attitude just two years ago.&nbsp; <strong>The fundamental data has always been negative ever since the credit crisis began.&nbsp; <u><em>So what has really changed?</em></u></strong></p> <p><strong>Well, Donald Trump, the sacrificial scapegoat, is now in the White House, and, central bank stimulus has a shelf life.</strong>&nbsp; They can&#39;t prop up equities for much longer even if they wanted to.&nbsp; The fundamentals will always catch up with the fiat illusion.&nbsp; No nation in history has ever been able to print its way to prosperity or even recovery.&nbsp; The time is now for the Fed to pull the plug and lay blame in the lap of their mortal enemy - conservatives and sovereignty champions.&nbsp; They will ignore all financial reality and continue to hike.&nbsp; This is a guarantee.</p> <p>In the Liberty Movement the major misconception is that the Fed is attempting to &quot;catch up&quot; to the next crash by raising interest rates so that they will be ready to stimulate again.&nbsp; There is no catching up to this situation.&nbsp; The Fed has no interest in saving stock markets or the economy.&nbsp; Again, the fed has raised rates before into fiscal decline (during the Great Depression), and the result was a prolonged crisis.&nbsp; <strong>They know exactly what they are doing.</strong></p> <p>What does the Fed gain from this sabotage? Total centralization. For example, before the Great Depression there used to be thousands of smaller private and localized banks in America. After the Great Depression most of those banks were either destroyed or absorbed by elite banking conglomerates. Banking in the U.S. immediately became a fully centralized monopoly by the majors. In a decade, they were able to remove all local competition and redundancy, making communities utterly beholden to their credit system.</p> <p><strong>The 2008 crash allowed the banking elites to introduce vast stimulus measures requiring unaccountable fiat money creation. Rather than saving America from crisis, they have expanded the crisis to the point that it will soon threaten the world reserve status of our currency. </strong>The Fed in particular has set the U.S. up not just for a financial depression, but for a full spectrum calamity which will include a considerable devaluation (yet again) of our currency&#39;s value and resulting in extreme price inflation in necessities.</p> <p><strong>The next phase of this collapse will include the end of the dollar as we know it, making way for a new global currency system that uses the IMF&#39;s SDR basket as a foundation</strong>. This plan is openly admitted in the elitist run magazine &#39;The Economist&#39; in an article entitled &quot;<a href="http://src.boblivingstonletter.com/ego/7775273c-4c9b-4a77-a11e-1d8664c78063/402503264/317563" rel="noreferrer" target="_blank">Get Ready For A Global Currency By 2018.</a>&quot;</p> <p>It is important to understand what the Fed actually is <strong>- the Fed is a weapon</strong>. It is a weapon used by globalists to destroy the American system at a given point in time <strong>in order to clear the way for a new single world economy controlled by a single managerial entity</strong> (most likely the IMF or BIS). This is the Fed&#39;s purpose. <strong>The central bank is not here to save the U.S. from harm</strong>, it is here to make sure the U.S. falls in a particular manner &mdash; a controlled demolition of our fiscal structure.</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="488" height="290" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20170628_alt.jpg?1498689279" /> </div> </div> </div> http://www.zerohedge.com/news/2017-06-28/federal-reserve-saboteur-and-experts-are-oblivious#comments Alan Greenspan Alan Greenspan Ben Bernanke Ben Bernanke BIS Bond Business Central bank Credit Crisis Donald Trump Economic bubble Economics Economy Federal Reserve Federal Reserve System Finance Financial crises Fisher Golden Goose Great Depression Great Recession in the United States International Monetary Fund Janet Yellen Liberty Movement Milton Friedman Monetary policy Money Purchasing Power Reality recovery Richard Fisher Systemic risk TARP Texas A&M The Economist the U.S. central bank US Federal Reserve White House White House Thu, 29 Jun 2017 03:35:00 +0000 Tyler Durden 598875 at http://www.zerohedge.com "Fake Research": Seattle Mayor Knew Critical Min. Wage Study Was Coming, So He Called Berkeley 'Economists' http://www.zerohedge.com/news/2017-06-28/fake-research-seattle-mayor-knew-critical-min-wage-study-was-coming-so-he-called-ber <p>Earlier this week we wrote about a study published by the University of Washington which was fairly damning for Seattle's $15 minimum wage.&nbsp; To our total 'shock', the <strong>study found that higher minimum wages caused a 9.4% reduction to total hours worked by low-skilled workers</strong>, or roughly 14 million hours per year.&nbsp; Given that a full-time employee works 2,080 hours per year, that's <strong>the equal to just over 6,700 full-time equivalents who have lost their jobs,</strong> just in the city of Seattle, courtesy of moronic politicians who don't seem to grasp basic mathematical concepts (see the full note here: <a href="http://www.zerohedge.com/news/2017-06-26/shocking-study-finds-seattle-min-wage-hikes-has-cost-works-14mm-hours-year-6700-jobs">Seattle Min Wage Hikes Crushing The Poor: 6,700 Jobs Lost, Annual Wages Down $1,500 - UofW Study</a>).</p> <p>As it turns out, however, the <strong>bigger story might be why the Mayor of Seattle decided to waste taxpayer money commissioning a competing study from the University of California, Berkeley</strong>...especially in light of the fact that the University of Washington study was already paid for by taxpayers and researchers on the project were granted far greater access to data.&nbsp; </p> <p>Hmm, might it have something to do with the fact that Seattle's mayor knew that Berkeley's liberal economists would manipulate data in whatever way necessary to paint a rosy picture for higher minimum wages?&nbsp; That's a rhetorical question...</p> <p>As the<a href="http://www.seattleweekly.com/news/seattle-is-getting-an-object-lesson-in-weaponized-data/"> Seattle Weekly</a> noted, the controversy started when a <strong>Forbes blogger discovered a curious sentence in the minimum wage study released by <a href="http://irle.berkeley.edu/files/2017/Seattles-Minimum-Wage-Experiences-2015-16.pdf">Berkeley</a> a couple of weeks ago, days before the University of Washington study was published.</strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user230519/imageroot/2017/06/28/2017.06.28 - Seattle 1.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user230519/imageroot/2017/06/28/2017.06.28%20-%20Seattle%201_0.jpg" style="width: 600px; height: 156px;" /></a></p> <p>The sentence got him wondering why the "Office of the Mayor of Seattle" would commission a study when taxpayers of his city were already funding a study on the exact same thing?</p> <p>Could it be the fact that Berkeley's Michael Reich was well known to be the <strong>"go-to academic for proponents of a $15-an-hour minimum wage"</strong> who <strong>"has done at least six … studies on the minimum wage in California municipalities, all showing that a wage increase would be beneficial."</strong></p> <p>So the Forbes blogger reached out to the Mayor's office for clarification...</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Last week, <strong>I reached out to Benton Strong, the mayor’s spokesman, to ask why the city was requesting research already covered by the UW team</strong>.</p> <p>&nbsp;</p> <p>He responded to say that <strong>“the upcoming UW study is not part of the work funded by the City. Michael Reich is a well-known economist who had done extensive work on policies like the minimum wage and the City asked him to review early drafts of the UW report,</strong> specifically the methodology, and provide analysis. Yesterday, he also provided analysis of the impacts of the minimum wage in Seattle.”</p> <p>&nbsp;</p> <p>At the time, <strong>I wasn’t aware of what upcoming UW study</strong> he was talking about, and asked for clarification, to which <strong>Strong said: “There’s apparently one coming next week.”</strong></p> <p>&nbsp;</p> <p>And so there was.</p> <p>&nbsp;</p> <p>To review, the timeline seems to have gone like this: <strong>The UW shares with City Hall an early draft of its study showing the minimum wage law is hurting the workers it was meant to help</strong>; the mayor’s office shares the study with <strong>researchers known to be sympathetic toward minimum wage laws</strong>, asking for feedback; <strong>those researchers release a report that’s high on Seattle’s minimum wage law just a week before the negative report comes out.</strong></p> </blockquote> <p>In other words, the<strong> Mayor of Seattle used taxpayer funds to commission a duplicative, "fake study" from a clearly sympathetic, biased economist, at a liberal university, all in an effort to mislead voters about the real effects of his disastrous minimum wage policy.</strong></p> <p>Of course, we're sure <a href="http://www.zerohedge.com/news/2016-08-29/new-dnc-chair-says-outrage-over-clinton-foundation-pay-play-attempt-criminalize-norm">Donna Brazile</a> would classify this as just another attempt to "criminalize behavior that is normal"</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="530" height="380" alt="" src="http://www.zerohedge.com/sites/default/files/images/user230519/imageroot/Minimum%20Wage_10.JPG?1498663222" /> </div> </div> </div> http://www.zerohedge.com/news/2017-06-28/fake-research-seattle-mayor-knew-critical-min-wage-study-was-coming-so-he-called-ber#comments Berkeley Labor Center Business Economy Income distribution Labor Labour law Labour relations Law Living wage Mayor’s Office Michael Reich Minimum wage Minimum wage in the United States Politics Seattle Socialism Times Union United States labor law University of California University of California, Berkeley University of Washington University of Washington Wage Washington Policy Center Thu, 29 Jun 2017 03:10:00 +0000 Tyler Durden 598835 at http://www.zerohedge.com "Central Bankers Aren't As Clever (And We're Not As Dumb) As They Believe" http://www.zerohedge.com/news/2017-06-28/central-bankers-arent-clever-and-were-not-dumb-they-believe <p><a href="http://www.alhambrapartners.com/2017/06/27/maybe-deep-dissatisfaction-has-a-point/"><em>Authored by Jeffrey Snider via Alhambra Investment Partners,</em></a></p> <p><span style="color: #000000;"><strong>To complete a trifecta, maybe someone could interview Alan Greenspan about rational exuberance. </strong></span></p> <p><span style="color: #000000;">The last of the latest Fed Chairmen, Janet Yellen, purports this week that the <strong>next financial crisis will not be in &ldquo;our lifetimes.&rdquo;</strong> The issue, however, isn&rsquo;t even crisis so much as <strong>credibility</strong>. Given that she and the rest of them had no idea about the last one until it was <a href="http://www.alhambrapartners.com/2014/04/11/friday-fomc-memories-bent-straight-lines/">almost over</a>, we might be forgiven for rejecting her thesis outright &ndash; and it having nothing at all to do with the current or expected future state of finance. She is nearly the last person that should be speaking on that topic.</span></p> <p><span style="color: #000000;"><strong>The very last opinion that should be solicited would be from her immediate predecessor, Ben Bernanke.</strong> He was busy just yesterday doing what he does, meaning polishing up as best he can his legacy. Speaking on invitation to an ECB conference in Sintra, Portugal, the same where Mario Draghi caused <a href="http://www.alhambrapartners.com/2017/06/27/its-not-the-downside-wheres-the-upside/">his &ldquo;reflation&rdquo; stir</a>, the former Federal Reserve head <a href="https://www.brookings.edu/wp-content/uploads/2017/06/es_20170626_whengrowthisnotenough.pdf">gave a speech</a> he modestly titled <em>When Growth Is Not Enough</em>.</span></p> <p><span style="color: #000000;">It is typical Bernanke, who has taken to these kinds of tricks in order to justify the apex of his career. For him it was a top; for the rest of the world not at all. The last thing anyone associates with Bernanke is growth. His speech would have more appropriately been called <em>When Not Enough Growth</em>.</span></p> <p><span style="color: #000000;"><strong>During his tenure he was clearly bipartisan, or at least largely free of partisanship. </strong>In 2017, he is not. His general purpose in appearing was to acknowledge, like many economists are being forced to, the great dissatisfaction around the world with the results of largely his exertions. <strong>Before last year, economists could plausibly claim things were OK if not great, but after Brexit and especially Trump it is no longer possible to live that deep in denial.</strong></span></p> <p><span style="color: #000000;">It is to the current President that Bernanke clearly feels his reputation most threatened, describing yesterday the stunning political revolt as,<strong><em> &ldquo;last November Americans elected president a candidate with a dystopian view of the economy.&rdquo;</em></strong> In doing so, he betrays his own true motivations. Ben Bernanke&rsquo;s legacy, even more so than Barack Obama&rsquo;s, is Donald Trump.</span></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><span style="color: #000000;">In particular, Americans generally have little confidence in the ability of government, especially the federal government, to fairly represent their interests, let alone solve their problems. In a recent poll, only 20 percent of Americans said they trusted the government in Washington to do what is right &ldquo;just about always&rdquo; or &ldquo;most of the time&rdquo;. <em><strong>The failure to prevent the global financial crisis did not help this situation of course</strong></em>, but these attitudes are long-standing, going back at least to the 1970s. [emphasis added]</span></p> </blockquote> <p><span style="color: #000000;">The highlighted portion wasn&rsquo;t some trivial footnote, a small matter among larger ones. It was everything, especially for the Federal Reserve who before the crisis declared that what Janet Yellen says right now. For an institution claiming to be the height of economic competence and authority, the Panic of 2008 was all that mattered.</span></p> <p><span style="color: #000000;"><strong>But if that was the only fault with the so-called establishment elite, it would still be enough to register as it finally has with the public. </strong>The tragic comedy did not end there, however, and Bernanke knows it well. He asserts again in this latest speech something he referred to in <a href="https://www.brookings.edu/blog/ben-bernanke/2016/10/19/are-americans-better-off-than-they-were-a-decade-or-two-ago/">a little-noticed blog post</a> (for Brookings) from last October.</span></p> <p><span style="color: #000000;">Economists Charles Jones and Peter Klenow had at that time published a paper the former Fed Chair immediately seized upon. They proposed that things like GDP or nation income figures weren&rsquo;t comprehensive measures of social advance. Jones and Klenow created an &ldquo;economic welfare&rdquo; statistic that incorporated intangibles like vacation time, life expectancy, and inequality.</span></p> <p><span style="color: #000000;"><strong>Bernanke is a very smart guy, but he isn&rsquo;t as clever as he may think of himself.</strong> If you claim to be running an economy and it doesn&rsquo;t produce in all the traditional ways of output and income, then suddenly saying those aren&rsquo;t the appropriate standards is as transparent as it gets. It&rsquo;s not quite convincing given his own public history to in 2017 try to say &ldquo;it wasn&rsquo;t all bad.&rdquo; Methinks the money printer doth protest too much.</span></p> <p><span style="color: #000000;"><u><strong>And that is really the point.</strong></u> </span></p> <p><span style="color: #000000;">Quantitative easing was designed and sold to the public as the <em>right</em> amount of the <em>right</em> program to get the economy back going again after what was a catastrophic error. <strong><em>To long after its conclusion suggest that maybe GDP or national income estimates aren&rsquo;t good enough standards for measuring and then appropriately crafting a response is to totally undercut that thesis</em></strong>; it was the correlation with GDP that led to the Q part of QE. Moving the goalpost only proves that QE wasn&rsquo;t what you thought it was.</span></p> <p><span style="color: #000000;"><strong>If you have to refashion standards to suggest why you maybe could have possibly not performed so badly, then maybe you really did and maybe most people by now know it.</strong> And to further think along just those lines, perhaps the election of Trump isn&rsquo;t so extreme as it might first seem to the delicate orthodox sensibilities of the perpetually slow and ignorant. <u><strong>Maybe it doesn&rsquo;t leave us in economic dystopia, but that is at least the direction we might have been traveling all this time you called it a recovery.</strong></u></span></p> <p><img class="aligncenter size-full wp-image-44622" src="http://www.alhambrapartners.com/wp-content/uploads/2017/04/ABOOK-April-2017-GDP-Baseline-Costs.png" style="width: 600px; height: 348px;" /></p> <p><img class="aligncenter size-full wp-image-45268" src="http://www.alhambrapartners.com/wp-content/uploads/2017/06/ABOOK-June-2017-Payrolls-Unempl-Rate-Part-Rate.png" style="width: 600px; height: 367px;" /></p> <p><img class="aligncenter size-full wp-image-45542" src="http://www.alhambrapartners.com/wp-content/uploads/2017/06/ABOOK-June-2017-Retail-Sales-Stagnation.png" style="width: 600px; height: 351px;" /></p> <p><span style="color: #000000;"><strong>What&rsquo;s even more illuminating is the lack of mention of the Great &ldquo;Moderation.&rdquo; It has been almost excised from official history. </strong></span></p> <p><span style="color: #000000;">The period where central bankers created forever new plateaus of prosperity, winning monetary policymakers especially undying admiration and too frequently cultish status has been <strong>completely transformed into outright <em>mistrust</em>; so deep it has infected, as Bernanke&rsquo;s speech concedes, all levels of government and establishment. </strong>Yellen is left nearly the undisputed anti-maestro. Only now do people like Bernanke admit there might be reasons.</span></p> <p><img class="aligncenter size-full wp-image-44412" src="http://www.alhambrapartners.com/wp-content/uploads/2017/04/ABOOK-April-2017-TIC-US-Banks-CLaims-On-Total.png" style="width: 599px; height: 375px;" /></p> <p><span style="color: #000000;"><strong>Bernanke once said (2004) that the Great &ldquo;Moderation&rdquo; was indeed <a href="http://www.realclearmarkets.com/articles/2017/03/17/did_central_banks_engineer_the_great_moderation__102593.html">the work of monetary policy</a>, so its years later omission is all the more telling. </strong>At least then economic pronouncements matched outward economic conditions. No one was compelled to challenge the unemployment rate, or recognize the mainstream clinging to it was out of clear and growing desperation rather than scientific analysis. They really didn&rsquo;t know what they were doing, and now they worry too many people might have figured that out.</span></p> <p><span style="color: #000000;">It is another small (emphasis on small) step in the right direction. <strong>Economists like Bernanke are feeling very uncomfortable, as they should. </strong>They have much to answer for and for the first time in ten years are feeling enough pressure to start doing so. That the first round leads them to different but still nonsense is to be expected. <u><strong>As I wrote above, they aren&rsquo;t as clever as they might think, and you not as dumb as they believe &ndash; or used to.</strong></u></span></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="610" height="354" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20170628_bernanke.jpg?1498684755" /> </div> </div> </div> http://www.zerohedge.com/news/2017-06-28/central-bankers-arent-clever-and-were-not-dumb-they-believe#comments Alan Greenspan American people of German descent Barack Obama Ben Bernanke Ben Bernanke Ben Bernanke Business Donald Trump Donald Trump Economy European Central Bank federal government Federal Reserve Federal Reserve Fellows of the Econometric Society Group of Thirty Guggenheim Fellows Janet Yellen Janet Yellen Mario Draghi Monetary Policy Portugal Quantitative Easing recovery Unemployment US Federal Reserve Thu, 29 Jun 2017 02:45:00 +0000 Tyler Durden 598866 at http://www.zerohedge.com Rolls Royce Now Sells More Of Its Cars To "New Money" Tech Millionaires http://www.zerohedge.com/news/2017-06-28/rolls-royce-now-sells-more-its-cars-new-money-tech-millionaires <p>Auto manufacturers have been bracing for a slump in car sales in the coming years as ownership rates for younger generations are expected to slump. Their reasoning? Millennials and their ilk tend to favor experiences over luxury goods, while also tending to cluster in urban settings where public transportation is easily accessible.</p> <p>But there might be some hope &ndash; at least in the high-end market,&nbsp; which is increasingly catering to a newly-minted cohort of millionaires who made their money in tech and finance. To wit, <strong>Rolls Royce has revealed that the average age of its customer base is declining, having fallen to 45, compared with 56 seven years ago.</strong></p> <p>That&rsquo;s lower than the average range for new-car buyers overall, which hovers around 52, and younger than the average age of luxury car buyers, too, which is 50, according to data provided to <a href="https://www.bloomberg.com/news/articles/2017-06-28/rolls-royce-drivers-are-a-lot-younger-than-you-think">Bloomberg by Kelley Blue Book.</a></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user245717/imageroot/2017/06/10/RollsRoyce.JPG"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user245717/imageroot/2017/06/10/RollsRoyce_0.JPG" style="width: 500px; height: 309px;" /></a></p> <p><em>The Wraith coupe</em></p> <p>The average age of Rolls Royce owners is below Buick, Cadillac, Mercedes-Benz and BMW.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;Buick, for instance, has an average new-buyer age of 59. At Cadillac it&rsquo;s 52, at Mercedes-Benz it&rsquo;s 51, and at BMW it&rsquo;s 50, according to KBB. Land Rover&rsquo;s average customer is 45, the youngest of any included in the data. (Rolls-Royce was not among the brands reviewed in that report&mdash;its numbers are internal.) Bentley, a closer competitor to Rolls-Royce, reported an average buyer age of 56.2 years in 2014, though that number is likely younger now.&rdquo;</p> </blockquote> <p>Indeed, it appears the 111-year-old brand, which is known for its stuffy old-money aesthetic, is attracting a new generation of customers among the next generation of tech and finance elites. The company&rsquo;s CEO Torsten Müller-Ötvös, has touted the decline as a sign that the luxury carmaker is succeeding in its push to attract younger drivers with newer, more modern-looking cars.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user245717/imageroot/2017/06/10/RollsRoycetwo.JPG"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user245717/imageroot/2017/06/10/RollsRoycetwo_0.JPG" style="width: 500px; height: 331px;" /></a></p> <p><em>The Phantom</em></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;We are now catering all to the different kinds of set groups when it comes to customers,&rdquo; Müller-Ötvös said. &ldquo;These are customers who for the first time said, &lsquo;Oh, guess what. I like this Wraith, and I put it in addition to my Ferraris into my garage, because Ferraris can be stressful from time to time.&rsquo; &rdquo;</p> </blockquote> <p>As is the case with all luxury items, remaining &quot;cool&quot; is essential to a brands survival - hence why Royce felt the need to shout news that it&#39;s selling to younger buyers from the mountaintops.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>&ldquo;Why does attracting a young(ish) buyer pool matter? For one thing, it prevents against the hypothetical eventuality that your customers eventually die off. Older buyers tend to be loyal buyers, but as they age, their numbers naturally dwindle.</strong></p> <p>&nbsp;</p> <p>More immediately, it has to do with brand image. If pensioners are the ones driving your cars, the rest of the world inevitably associates the brand with their age set. That doesn&rsquo;t exactly foster future buying excitement.&rdquo;</p> </blockquote> <p>In another interesting shift, the new buyers that Rolls Royce is courting have a somewhat different profile.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user245717/imageroot/2017/06/10/RollsRoycethree.JPG"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user245717/imageroot/2017/06/10/RollsRoycethree_0.JPG" style="width: 500px; height: 372px;" /></a></p> <p><em>CEO Torsten Müller-Ötvös</em></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>The reason for the relative youth of Rolls buyers has to do with how they&rsquo;re amassing their wealth, Müller-Ötvös said. Rather than in previous decades when acquiring it from Daddy was a viable, and respectable, option, he&rsquo;s noticing the people turning up at his dealerships are self-made.</p> <p>&nbsp;</p> <p><strong>&ldquo;It&#39;s not any longer inherited money,&rdquo; he said. &ldquo;The majority is all self-generated money in very young people who are already making fortunes, be it real estate, be it engineering, be it IT, be it Western entertainment, whatever.&rdquo;</strong></p> </blockquote> <p>As <a href="https://www.bloomberg.com/news/articles/2017-06-28/rolls-royce-drivers-are-a-lot-younger-than-you-think">Bloomberg explains,</a> the declining average age of Rolls Royce buyers seems to cut against the conventional wisdom &ndash; but not the masses of data that show young people still buy cars at rates comparable to older cohorts of the population.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Experts have warily anticipated in recent years an expected slump in car sales as millennials begin to overtake baby boomers in the marketplace as the world&rsquo;s biggest spenders. The theory was that they cared less about owning things&mdash;houses, property, cars&mdash;than in just being able to access them at any given time. The success of shared-access businesses Uber, Airbnb, and Rent the Runway, plus the rise in the development of self-driving cars and other forms of urban transportation in any number of various pods, seemed to support that idea.</p> <p>&nbsp;</p> <p><strong>But further studies have indicated the contrary. According to J.D. Power &amp; Associates, millennials&rsquo; share of new vehicle purchases in the U.S. hit 27 percent in 2014, up from 18 percent in 2010. They&rsquo;ll comprise 40 percent of the U.S. car market by 2020. </strong>(The report classified millennials as those born between 1977 and 1994.)</p> </blockquote> <p>The age of luxury-car owners is declining in China, too, despite a crackdown on corruption initiated by Chinese President Xi Jinping that included measures to curb the acceptance of luxury gifts &ndash; which sometimes included fancy cars &ndash; by public officials.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;In China, the average age of new-car buyers hovers around 34. Thirty-eight percent of all new luxury car buyers there are under 40. Last year, Cadillac boasted widely about its 34-year-old average buyers in China.&rdquo;</p> </blockquote> <p>Despite the crackdown, the unprecedented debt-enhanced creation of wealth in the world&#39;s second-largest economy appears to ensure that Rolls Royce&#39;s future is in the east.<br />&nbsp;</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="1223" height="755" alt="" src="http://www.zerohedge.com/sites/default/files/images/user245717/imageroot/RollsRoyce.JPG?1498661065" /> </div> </div> </div> http://www.zerohedge.com/news/2017-06-28/rolls-royce-now-sells-more-its-cars-new-money-tech-millionaires#comments Automotive industry Bentley British brands Business Car classifications China Classification Corruption Limousines Luxury vehicle Mercedes-Benz Private transport Real estate Rolls-Royce Rolls-Royce Motor Cars Transport Volkswagen Group Thu, 29 Jun 2017 02:20:00 +0000 Tyler Durden 598831 at http://www.zerohedge.com Is America Really Coming Apart? (Spoiler Alert, Yes!) http://www.zerohedge.com/news/2017-06-28/america-really-coming-apart-spoiler-alert-yes <p><a href="https://mises.org/blog/america-really-coming-apart-charles-murray-suggests"><em>Authored by Jeff Deist via The Mises Institute,</em></a></p> <p><strong>A new&nbsp;<a href="http://www.rasmussenreports.com/public_content/politics/general_politics/june_2017/most_think_america_is_more_divided_since_trump" target="_blank">Rasmussen poll</a>&nbsp;reports that a majority of voters think so, and it certainly feels that way. </strong> Since Donald Trump&rsquo;s election in November, the pace and intensity of deeply divisive rhetoric has accelerated. Antifa and the Alt-Right are literally fighting in the streets. Combative talking heads on cable news, vicious social media exchanges, riots at universities, a bitter special election in Georgia, and even the shooting of a congressman have both sides rethinking the entire political process and talking about abandoning the &ldquo;rule of law.&rdquo;</p> <p><strong>It is an uneasy time, a time for hard questions.</strong> Can politics really provide a solution to our problems, or is it the cause? Should we still abide by democratic processes when a significant portion of the country is enraged by the outcome? What if voting and elections simply weren&rsquo;t anymore? These are the questions we need to ask and answer honestly.</p> <p><strong>Progressives, including Hillary Clinton, now openly label themselves the &ldquo;resistance&rdquo; and call for Trump to be removed from office.</strong> Anti-Brexit forces in the UK call for Theresa May simply to repudiate the referendum. Democratic elections, a cornerstone of neoliberalism, are not so sacrosanct when the wrong guy wins. Progressives&rsquo; sense of inevitability has been deeply shaken by Trump and the rise of nationalist movements in Europe. Has it been shaken enough to consider real alternatives to social democracy?</p> <p><strong>Conservatives too have radically changed their talking points. </strong>Bill Kristol tweets that he prefers a Deep State silent coup to living under the Trump state. David Frum calls Trump a liar and an autocrat. George Will claims the president has a &ldquo;disability.&rdquo;</p> <p><u><strong>But one conservative offers a workable answer to our unsettling situation. </strong></u>Angelo Codevilla, retired professor of the Claremont Institute recently wrote a remarkable article titled &ldquo;<a href="http://www.claremont.org/crb/article/the-cold-civil-war/" target="_blank">The Cold Civil War.</a>&rdquo;&nbsp;The piece is remarkable not only because he worries about that civil war turning hot, or because he agrees &mdash;from the Right &mdash; with the idea of sanctuary cities or states that defy Washington. <strong><em>Why, Codevilla asks, could red states not employ some &ldquo;Irish democracy&rdquo; when it comes to hyper-politicized social issues like abortion, sexuality, and guns?</em></strong></p> <p><em><strong>And why shouldn&rsquo;t blue states do the same?</strong></em> This is already happening, as prominent mayors like Bill de Blasio have announced their opposition to the Trump agenda on issues like global warming. <strong><em>Could blue state nullification of federal edicts extend to healthcare, gun laws, and taxes?</em></strong></p> <p>The sheer scope of progressive victories in the culture wars compels&nbsp;Codevilla to offer a prescription for truly radical decentralization.<strong> Let the federal government control a few key functions like defense, but leave the rest to the states.</strong></p> <p><u><em><strong>Let California be California, and let Texas be Texas. To Codevilla, our intractable political, social, and cultural differences are simply not worth fighting over anymore. They&rsquo;re certainly not worth shooting each other.</strong></em></u></p> <p>Mr. Codevilla&rsquo;s is asking himself, and us, nothing less than whether the current political arrangement should continue.</p> <p>Ludwig von Mises, the great economist who experienced combat in World War I, famously stated that <strong><em>&ldquo;having to belong to a state to which one does not wish to belong is no less onerous if it is the result of an election than if one must endure it as the consequence of a military conquest.&rdquo;</em></strong></p> <p>This bold statement rings as true today as 1927, when Mises wrote it in a book titled&nbsp;<em>Liberalism</em>. Certainly most Hillary Clinton voters view the Trump administration as a hostile and illegitimate occupier with no legal or moral authority to govern. And undoubtedly Trump supporters would feel equally aggrieved under a Clinton regime.</p> <p><strong>A government big and powerful enough to cause widespread psychosis after presidential elections is a government without much legitimacy.</strong> People become irrational about politics precisely because government depressingly controls so much of our lives. It chooses winners and losers. It is the superstar player in American society, rather than the referee.</p> <p>The obvious and&nbsp;<a href="https://mises.org/library/secession-reasonable-option-everyone-resists">reasonable option</a>&nbsp;staring us all in the face is to go our separate ways.<strong> Let us consider political secession, radical decentralization, nullification, and localism as the realistic alternatives to a much more unpleasant conflict.</strong> Let us reconsider living as a loose confederation of states. 320 million vastly diverse people, from Anchorage to San Francisco to Topeka to Miami, cannot be governed by a top-down central authority in Washington.</p> <p><em><strong>Surely divorce, in whole or in part, is better than an abusive marriage.</strong></em></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="234" height="151" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20170628_dividee.jpg?1498684852" /> </div> </div> </div> http://www.zerohedge.com/news/2017-06-28/america-really-coming-apart-spoiler-alert-yes#comments American people of German descent Angelo Codevilla Business Claremont Institute Climate change skepticism and denial Donald Trump Donald Trump Donald Trump presidential campaign federal government Global Warming Ludwig von Mises Mises Institute Mises Institute Politics Social Issues The Apprentice Trump Administration United States WWE Hall of Fame Thu, 29 Jun 2017 01:55:00 +0000 Tyler Durden 598867 at http://www.zerohedge.com FBI Director McCabe Subject Of Three Separate Federal Inquiries Into Alleged Misconduct: Report http://www.zerohedge.com/news/2017-06-28/fbi-director-mccabe-subject-three-separate-federal-inquiries-alleged-misconduct-repo <p>A couple of days ago we noted that, according to a report from <a href="http://circa.com/politics/accountability/did-the-fbi-retaliate-against-michael-flynn-by-launching-russia-probe">Circa</a>, Acting FBI Director Andrew McCabe may have made a serious error by refusing to recuse himself from the Michael Flynn investigation.&nbsp; As it turns out, per court documents reviewed by Circa, <strong>McCabe may have harbored a personal vendetta against Flynn</strong> after he intervening on behalf of an FBI<br /> Special Agent, Robyn Gritz, who had <strong>accused McCabe and other top FBI officials of sexual discrimination</strong>.&nbsp; Apparently the lack of inter-agency camaraderie didn't sit well with McCabe as other FBI agents subsequently confirmed that his complete disdain for Fylnn was readily apparent.</p> <p>But, according to the U.S. Office of Special Counsel (OSC), McCabe's apparent conflict of interest in the Flynn investigation may not be his only issue these days as he's also the subject of an ongoing investigation for an alleged violation of the Hatch Act for illegally campaigning in his wife's Virginia Senate race.&nbsp; Per <a href="http://circa.com/politics/fbi-chief-andrew-mccabe-faces-three-separate-federal-inquiries-into-his-behavior">Circa</a>: &nbsp; </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Gritz also filed a complaint against McCabe with the main federal whistleblower agency in April, <strong>alleging social media photos she found show he campaigned for his wife’s Virginia state senate race in violation of the Hatch Act.</strong></p> <p>&nbsp;</p> <p>FBI employees are held to a higher standard than other federal workers <strong>under the Hatch Act and may not “endorse or oppose a candidate for partisan political office or a candidate for political party office</strong> in a political advertisement, broadcast, campaign literature, or similar material if such endorsement or opposition is done in concert with a candidate, political party, or partisan political group.”</p> <p>&nbsp;</p> <p><strong>The OSC told Circa&nbsp; that complaint is still being actively investigated.</strong></p> </blockquote> <p><img src="http://www.zerohedge.com/sites/default/files/images/user230519/imageroot/2017/06/28/2017.06.28%20-%20McCabe2_0.JPG" alt="McCabe" width="450" height="267" /></p> <p>&nbsp;</p> <p>For those who aren't familiar, this is the same Senate race in which McCabe's wife, <strong>Jill McCabe, took nearly $500,000 from Virginia Governor Terry McAuliffe to fund her campaign</strong>.&nbsp; Of course, <strong>Terry McAuliffe is a long-time confidant of the Clinton family </strong>and was rumored as a potential running mate for Hillary.&nbsp; All of which was apparently overlooked when former FBI Director James Comey allowed McCabe to participate in the investigation of Hillary's email scandal.</p> <p>And just when you thought McCabe's issues couldn't get much worse, Circa notes that the Justice Department Inspector General is also investigating allegations from Senate Judiciary Committee Chairman Charles Grassley that McCabe may not have properly disclosed campaign payments to his wife on his ethics report.</p> <p>Perhaps exploiting your position and power to pursue a personal vendetta isn't the best idea when you're hiding a whole collection of skeletons in your closet?&nbsp; <strong>You may be good but you're no Clinton, Mr. McCabe.</strong></p> <p>* * * </p> <p>For those who missed it, here is our original note on McCabe's sexual discrimination case:</p> <p>Andrew McCabe has long been a controversial figure at the FBI.&nbsp; His position as Deputy Director of the FBI came under intense scrutiny during the Clinton email investigation after it came to light that <strong>his wife, Jill McCabe, took nearly $500,000 from Virginia Governor Terry McAuliffe to fund her Senate campaign</strong>.&nbsp; Of course, <strong>Terry McAuliffe is a long-time confidant of the Clinton family </strong>and was rumored as a potential running mate for Hillary.&nbsp; But sure, no reason to be wary the McCabe was put in charge of supervising that particular investigation.</p> <p>But now, at least according to a new report from <a href="http://circa.com/politics/accountability/did-the-fbi-retaliate-against-michael-flynn-by-launching-russia-probe">Circa</a>, <strong>McCabe may have other conflicts, including a personal vendetta against former National Security Advisor Michael Flynn, that have not yet been disclosed.</strong>&nbsp; According to Circa, <strong>Flynn apparently enraged McCabe a few years back after he intervened on behalf of an FBI Special Agent, Robyn Gritz, who had accused McCabe and other top FBI officials of sexual discrimination.</strong></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>The FBI launched a criminal probe against former Trump National Security Adviser Michael Flynn two years after the retired Army general roiled the bureau’s leadership by intervening on behalf of a decorated counterterrorism agent who accused now-Deputy FBI Director Andrew McCabe and other top officials of sexual discrimination, according to documents and interviews.</p> <p>&nbsp;</p> <p><strong>Flynn’s intervention on behalf of Supervisory Special Agent Robyn Gritz was highly unusual, and included a letter in 2014 on his official Pentagon stationary, a public interview in 2015 supporting Gritz’s case and an offer to testify on her behalf. </strong>His offer put him as a hostile witness in a case against McCabe, who was soaring through the bureau’s leadership ranks.</p> <p>&nbsp;</p> <p>The FBI sought to block Flynn’s support for the agent, asking a federal administrative law judge in May 2014 to keep Flynn and others from becoming a witness in her Equal Employment Opportunity Commission (EEOC) case, memos obtained by Circa show. Two years later, the FBI opened its inquiry of Flynn.</p> <p>&nbsp;</p> <p><strong>The EEOC case, which is still pending, was serious enough to require McCabe to submit to a sworn statement to investigators,</strong> the documents show.</p> </blockquote> <p>According to anonymous sources within the FBI (and you know how we feel about those...so take these comments with a heaping mound of salt), Circa notes that several field agents had witnessed McCabe make disparaging remarks about Flynn and one agent even became uncomfortable enough to consult an attorney after the Flynn investigation ramped up.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Three FBI employees told Circa they <strong>personally witnessed McCabe make disparaging remarks about Flynn before and during the time the retired Army general emerged as a figure in the Russia case.</strong></p> <p>&nbsp;</p> <p>The bureau employees, who spoke only on condition of anonymity for fear of retribution, said they did not know the reason for <strong>McCabe’s displeasure with Flynn, but that it made them uncomfortable as the Russia probe began to unfold and pressure built to investigate Flynn.</strong> One employee even consulted a private lawyer.</p> <p>&nbsp;</p> <p>“As far as the troops in the field, the vast-majority were disgusted with the Russia decision, but that was McCabe driving the result that eventually led [former FBI Director James] Comey to make the decision,” said a senior federal law enforcement official, with direct knowledge of the investigation.</p> </blockquote> <p><img src="http://www.zerohedge.com/sites/default/files/images/user230519/imageroot/2017/06/26/McCabe%202_0.JPG" alt="Mccabe" width="600" height="353" /></p> <p>&nbsp;</p> <p><strong>“The Flynn leaks were nothing short of political,”</strong> one FBI employee said, noting the specific contents of the conversation were known by only a handful of government officials when they leaked. <strong>“The leaks appeared to be targeted to take Flynn out.” </strong></p> <p><strong>But would McCabe really launch an investigation out of retaliation?&nbsp;</strong> Well, it seems that his own testimony in the sexual discrimination lawsuit would suggest he did just that against Gritz.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>But McCabe’s sworn statement offered evidence that actually supported Gritz’s claim of retaliation and discrimination, recounting a conversation on June 19, 2012 in which he authorized the OPR investigation of Gritz after one of his deputies told him Gritz was about to file an EEO complaint, his sworn statement shows.</p> <p>&nbsp;</p> <p><strong>“I first learned of the issues that led to Ms. Gritz’s current OPR investigation during a telephone call with Deputy Assistant Director (DAD) Jennifer Ley on June 19, 2012,”</strong> McCabe testified.</p> <p>&nbsp;</p> <p>“I recalled that during the course of our conversation DAD Ley mentioned to me that Ms. Gritz had filed or intended to file an EEO complaint against her immediate supervisor.”</p> <p>&nbsp;</p> <p><strong>The very next day, the FBI initiated the OPR investigation of Gritz, according to evidence in the FBI’s official personnel files. </strong>FBI records support McCabe’s version of events, showing Gritz had contacted FBI EEO officials in mid-June before the OPR probe was initiated, then filed her formal complaint a few weeks later. The FBI ‘s official report of investigation on Gritz’s EEO complaint, which absolved the FBI of any discrimination, omitted any mention that McCabe had been aware of the EEO complaint before the bureau filed its OPR action against Gritz.</p> </blockquote> <p>Clearly McCabe's reputation was on the line, so it's not terribly surprising that he would take offense to Flynn providing the following supportive comments in favor of Gritz:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>“SSA Gritz was well-known, liked and respected in the military counter-terrorism community for her energy, commitment and professional capacity, and over the years worked in several interagency groups on counter-terrorism targeting initiatives,”</strong> Flynn wrote May 9, 2014.</p> <p>&nbsp;</p> <p>At the time, Flynn was an Army lieutenant general and the chief of the Defense Intelligence Agency, and he put his letter on official agency stationary to be submitted in Gritz’s case.</p> <p>&nbsp;</p> <p>As soon as Gritz revealed to the FBI that Flynn and other top federal figures had written letters to support her case and likely would be called as witnesses, the bureau dispatched a lawyer to try to block the evidence from being included in the EEO case, documents show.</p> </blockquote> <p>In a brief interview this weekend, Gritz said she was mortified to think that her request to Flynn to help with her EEOC case in any way affected his relationship with the FBI or his current status as someone under investigation in the Russia case.</p> <p><strong>“Flynn was the first leader to defend me,”</strong> said Gritz. <strong>“He forwarded a letter to the FBI and I personally think that Comey did not receive it. McCabe knew Flynn and I were friends. I felt that from the beginning it was an issue.”</strong></p> <p>So what say you?&nbsp; More fake news or is another recusal in order on the "Russian collusion" investigation?<strong><br /></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="634" height="408" alt="" src="http://www.zerohedge.com/sites/default/files/images/user230519/imageroot/2017.06.28%20-%20McCabe.JPG?1498685171" /> </div> </div> </div> http://www.zerohedge.com/news/2017-06-28/fbi-director-mccabe-subject-three-separate-federal-inquiries-alleged-misconduct-repo#comments Andrew McCabe Defense Intelligence Agency Department of Justice Equal Employment Opportunity Commission FBI Federal Bureau of Investigation Federal Bureau of Investigation James Comey Judiciary Committee Law McCabe Michael Flynn national security Pentagon Politics Russian interference in the 2016 United States elections Senate Terry McAuliffe Testimony U.S. Office United States United States intelligence agencies Virginia Senate Thu, 29 Jun 2017 01:30:00 +0000 Tyler Durden 598874 at http://www.zerohedge.com The Power Grid Is Far More Vulnerable To Cyber Attacks Than Most People Realize http://www.zerohedge.com/news/2017-06-28/power-grid-far-more-vulnerable-cyber-attacks-most-people-realize <p><a href="http://readynutrition.com/resources/the-power-grid-is-far-more-vulnerable-to-cyber-attacks-than-most-people-realize_18062017/"><em>Authored by Joshua Krause at ReadyNutrition.com,</em></a></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/06/22/20170628_griud.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/06/22/20170628_griud_0.jpg" style="width: 600px; height: 318px;" /></a></p> <p><strong>In December of 2015, <a href="https://www.wired.com/2016/03/inside-cunning-unprecedented-hack-ukraines-power-grid/" rel="noopener noreferrer" target="_blank">230,000 people in Western Ukraine lost power after 30 substations were mysteriously shut off</a>. </strong>Contrary to what most people assumed at the time, this wasn&rsquo;t an innocuous power outage. The authorities would later admit that the loss of power was caused by a cyber attack, which marked the <strong>first time that malware was successfully used to attack a power grid. </strong>A similar, albeit more sophisticated cyber attack, occurred one year later just outside of Kiev. Given the current tensions between Russia and Ukraine, it&rsquo;s widely believed that the Russian government was responsible for these incidents.</p> <p>However, there&rsquo;s more to this story than meets the eye. <strong>A computer security company has been investigating these attacks, and has discovered the malware that was used to take down the grid. They&rsquo;ve found that it&rsquo;s <a href="http://www.msn.com/en-us/news/technology/malware-discovered-that-could-threaten-electrical-grid/ar-BBCBimK" rel="noopener noreferrer" target="_blank">far more dangerous and easier to use</a> than anyone realized before.</strong></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>The danger of the malware is that it can automatically trip the breakers within a power system that keep the electrical lines from being overloaded. If one breaker is tripped, the load is shipped to another portion of the power grid. If enough are tripped, in the right places, it&rsquo;s possible to create a cascading effect that will eventually overload the entire system, said Weatherford, who was formerly the chief security&nbsp;officer&nbsp;at the North American Electric&nbsp;Reliability&nbsp;Corporation, the&nbsp;regulatory authority for North American utilities.</em></p> <p>&nbsp;</p> <p><em>&ldquo;In some cases, it could then take days to restart all the plants,&rdquo; he said.</em></p> <p>&nbsp;</p> <p><em>Two things stand out about the malware, dubbed &ldquo;Industroyer&rdquo; by the researchers&nbsp;&mdash; it&rsquo;s an order of magnitude easier to use than previous programs and&nbsp;it wasn&rsquo;t actually deployed to do any real damage,&nbsp;meaning whoever&rsquo;s behind the December attack&nbsp;might simply have been&nbsp;testing the waters.&nbsp;</em></p> </blockquote> <p><strong>In other words, this malware can induce what&rsquo;s often referred to as a <a href="https://en.wikipedia.org/wiki/Cascading_failure" rel="noopener noreferrer" target="_blank">cascading failure</a>. </strong>This is what caused the massive blackout that occurred in the Northeastern US and Canada back in 2003. An overgrown tree branch in Ohio touched a power line, which caused that section of the grid to overload and shut down. The electricity had to be transferred to other power lines, which in turn also became overloaded. <strong>This chain reaction continued until 55 million people were without power.</strong></p> <p><strong>Cascading failure is the perfect example of just how fragile our power grid can be. </strong></p> <p>Because our grid is so interconnected, <strong>something really small can have a huge effect on the wider system.</strong> Though the power grid in the US isn&rsquo;t as vulnerable to humble tree branches as it used to be, it&rsquo;s still quite vulnerable to the type of malware that was used to shut down parts of the grid in Ukraine.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>Industrial control networks of the type used in power systems use communications protocols that are much less secure than the kinds of computer networks used by banks, retailers and businesses.</em></p> <p>&nbsp;</p> <p><em>&ldquo;They were developed years ago, without security in mind. They weren&rsquo;t designed for smart grids or interconnectedness,&rdquo; said&nbsp;Robert Lipovsky, a senior malware researcher with ESET&hellip;</em></p> <p>&nbsp;</p> <p><em>&hellip;Industroyer&rsquo;s&nbsp;ease-of-use is so disturbing because industrial systems are&nbsp;still playing security catch-up, said Raheem Beyah&nbsp;at the Georgia Institute of Technology in Atlanta.</em></p> <p>&nbsp;</p> <p><em>&ldquo;I knew we were going in this direction but I didn&rsquo;t think it would be this soon,&rdquo; said Beyah,&nbsp;who teaches a course on infrastructure hacking and protection for graduate computer science students.</em></p> <p>&nbsp;</p> <p><em>Bayah says the software needed to take down an electrical grid no longer requires the resources of a nation to create. Adding a module to the malware is now &ldquo;something that a strong computer science graduate student could do,&rdquo; he said.</em></p> </blockquote> <p><strong>This &ldquo;Industroyer&rdquo; malware represents a new threat that people need to accept and prepare for.</strong> The power grid, which is the linchpin of our standard of living, is now vulnerable to software that is relatively easy to use. Though it seems likely that the Russian government was responsible for developing it, it could have just as easily been made and deployed by non-state actors on a shoe string budget.</p> <p><strong>This is a dangerous new reality that we live in. </strong>Now, someone with a modest education and a small budget can inflict billions of dollars in damages, and leave us all in the dark. Obviously, that makes widespread&nbsp;blackouts far more likely in the future.</p> <p>And that potential is probably just the tip of the iceberg. It&rsquo;s very possible that multiple cyber-attacks could keep us in the dark for weeks rather than just days.<strong> That would be more than long enough to cause society to disintegrate.</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="794" height="421" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20170628_griud.jpg?1498683434" /> </div> </div> </div> http://www.zerohedge.com/news/2017-06-28/power-grid-far-more-vulnerable-cyber-attacks-most-people-realize#comments Cascading failure Computer security Cybercrime Cyberwarfare E-commerce Georgia Institute of Technology in Atlanta Malware National security Northeastern US Ohio power systems use communications protocols Reality Russian government Security Security engineering Smart grid Technology Ukraine Western Ukraine Thu, 29 Jun 2017 01:05:00 +0000 Tyler Durden 598864 at http://www.zerohedge.com Dopey Playboy WH Correspondent Milks Spotlight By Verbally Attacking Mike Cernovich On Camera http://www.zerohedge.com/news/2017-06-28/dopey-playboy-wh-correspondent-milks-spotlight-verbally-attacking-mike-cernovich-cam <p><span style="margin: 0px; padding: 0px; border: 0px currentColor; border-image: none; color: #000000; text-transform: none; line-height: inherit; text-indent: 0px; letter-spacing: normal; font-family: lucida_granderegular, Verdana, sans-serif; font-size: 13px; font-style: normal; font-weight: normal; word-spacing: 0px; vertical-align: baseline; white-space: normal; box-sizing: border-box; orphans: 2; widows: 2; font-stretch: inherit; background-color: #ffffff; font-variant-ligatures: normal; font-variant-caps: normal; font-variant-numeric: inherit; text-decoration-style: initial; text-decoration-color: initial;">Content originally published at&nbsp;</span><a style="margin: 0px; padding: 0px; border: 0px currentColor; border-image: none; color: #1e439a; text-transform: none; line-height: 1.2; text-indent: 0px; letter-spacing: normal; font-family: lucida_granderegular, Verdana, sans-serif; font-size: 13px; font-style: normal; font-weight: normal; text-decoration: none; word-spacing: 0px; vertical-align: baseline; white-space: normal; box-sizing: border-box; orphans: 2; widows: 2; font-stretch: inherit; background-color: #ffffff; font-variant-ligatures: normal; font-variant-caps: normal; font-variant-numeric: inherit;" href="http://ibankcoin.com/"><span style="font: inherit; margin: 0px; padding: 0px; border: 0px currentColor; border-image: none; text-decoration: underline; vertical-align: baseline; box-sizing: border-box; font-stretch: inherit;">iBankCoin.com</span></a></p> <p><em>Playboy Magazine</em> White House correspondent Brian Karem<em>&nbsp;</em>has risen to recent notoriety as the MSM's&nbsp;White House Press Corps defender-in-chief. After Deputy Press Secretary Sarah Huckabee Sanders <a href="https://youtu.be/cCepLvPmktM" target="_blank" rel="noopener noreferrer"><span style="text-decoration: underline;"><span style="color: #0066cc;">addressed the topic of MSM bias</span></span></a> on Tuesday -&nbsp;referencing&nbsp;an undercover video released by&nbsp;<em>Project Veritas</em>&nbsp;featuring a CNN Producer effectively admitting that the network is Fake News, the <em>Playboy </em>White House correspondent decided enough was enough.</p> <p>Perhaps sensing&nbsp;an opportunity to make some&nbsp;big boy friends in the MSM snake-pit,<em>&nbsp;</em>Karem shot up and issued a whiny condemnation of Sanders for "inflaming everybody right here." Karem's impassioned diatribe was immediately shot down by&nbsp;Press Secretary Sanders, and&nbsp;was&nbsp;criticized as a lame attempt to seek relevancy by many -&nbsp;including&nbsp;<a href="http://ibankcoin.com/zeropointnow/2017/06/28/pornstar-jenna-jameson-slams-wh-playboy-reporter-for-sassing-sarah-huckabee-sanders/" target="_blank" rel="noopener noreferrer"><span style="text-decoration: underline;"><span style="color: #0066cc;">porn star Jenna Jameson</span></span></a>.</p> <p><strong>One Day Later</strong></p> <p>Outside of the White House,&nbsp;<em>Playboy's</em> Fake Crusader&nbsp;stormed up to&nbsp;alt-right journalist Mike Cernovich in an expletive-laden faux rage - accusing Cernovich of having an opinion.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>"You don't understand journalism. You don't understand what we're really here for... You're like every other god-damned guy who comes in here with a fu*kin' opinion, and instead of listening, <strong>you wanna grandstand at the end of a god-damned meeting</strong>"</p> </blockquote> <p>Says the guy who was grandstanding at the end of a meeting...</p> <p style="text-align: center;"><a href="https://ibankcoin.com/zeropointnow/files/2017/06/granda.png"><img width="513" class="aligncenter wp-image-9450" src="https://ibankcoin.com/zeropointnow/files/2017/06/granda.png" height="267" /></a></p> <p>Cernovich&nbsp;replied he wanted to hold the left accountable for their actions, which Karem rebuked. After patiently waiting for his turn to talk, Cernovich then disarmed Karem - asking him what he thought about Obama prosecuting more journalists under the Espionage Act than any other president. The exasperated Karem then said "Don't get me started, that pisses me off too!"</p> <p>To top it off, after Karem began his diatribe criticizing Cernovich's right to free speech&nbsp;for being like "every other god-damned guy who comes in here with a fu*kin' opinion," the <em>Playboy</em> correspondent then offers up a cliché "I disagree with what you have to say, but&nbsp;will defend to the death your right to say it."</p> <p>At the end of the exchange, we see Brian Karem 'come out of character' as Cernovich offers him a handshake...</p> <p>Watch this guy school himself into irrelevancy...</p> <blockquote class="twitter-video"><p lang="en" dir="ltr">That goof who went off during press briefing yesterday stalked me and tried hitting me, totally unstable. <a href="https://t.co/zBoW2aVbzs">pic.twitter.com/zBoW2aVbzs</a></p> <p>— Mike Cernovich (@Cernovich) <a href="https://twitter.com/Cernovich/status/880147342061522945">June 28, 2017</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><p style="text-align: center;"><span class="wpview-end" style="margin: 0px; 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font-style: normal; font-weight: bold; word-spacing: 0px; vertical-align: baseline; white-space: normal; box-sizing: border-box; orphans: 2; widows: 2; font-stretch: inherit; background-color: #ffffff; font-variant-ligatures: normal; font-variant-caps: normal; font-variant-numeric: inherit; text-decoration-style: initial; text-decoration-color: initial;"><a style="margin: 0px; padding: 0px; border: 0px currentColor; border-image: none; color: #1e439a; line-height: 1.2; font-family: inherit; font-size: inherit; font-style: inherit; font-variant: inherit; font-weight: inherit; text-decoration: none; vertical-align: baseline; box-sizing: border-box; font-stretch: inherit;" href="https://www.youtube.com/subscription_center?add_user=ibankcoin" target="_blank"><span style="font: inherit; margin: 0px; padding: 0px; border: 0px currentColor; border-image: none; text-decoration: underline; vertical-align: baseline; box-sizing: border-box; font-stretch: inherit;">YouTube channel</span></a></strong></p> http://www.zerohedge.com/news/2017-06-28/dopey-playboy-wh-correspondent-milks-spotlight-verbally-attacking-mike-cernovich-cam#comments American literature Entertainment Karem Mike Cernovich MSM's White House Press Corps Twitter Twitter United States White House White House White House press corps Thu, 29 Jun 2017 00:53:41 +0000 ZeroPointNow 598882 at http://www.zerohedge.com Moody's Warns That Private-Label Credit Card Issuers Will Be Crushed By Retail Implosion http://www.zerohedge.com/news/2017-06-28/moodys-warns-private-label-credit-card-issuers-will-be-crushed-retail-implosion <p>We've spent a lot of time of late talking about the retail implosion currently underway in the United States courtesy of a massive oversupply of retail square footage and a simultaneous shift in demand toward more online purchases.&nbsp; In fact, <a href="http://www.zerohedge.com/news/2017-04-22/retail-bubble-has-now-burst-record-8640-stores-are-closing-2017">we recently highlighted</a> a report from Credit Suisse which suggested that nearly 9,000 retail locations could permanently close their doors in 2017, the most since at least 2000.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>According to the Swiss bank's calculations, <strong>on a unit basis, approximately 2,880 store closings were announced YTD, more than twice as many closings as the 1,153 announced during the same period last year. </strong>Historically, roughly 60% of store closure announcements occur in the first five months of the year. By extrapolating the year-to-date announcements, <strong>CS estimates that there could be more than 8,640 store closings this year, which will be higher than the historical 2008 peak of approximately 6,200 store closings, </strong>which suggests that for brick-and-mortar stores stores the current transition period is far worse than the depth of the credit crisis depression.</p> </blockquote> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/04/19/CS%20retail%20stores.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/04/19/CS%20retail%20stores_0.jpg" width="500" height="336" /></a></p> <p>&nbsp;</p> <p>And here were those closings broken down by retailer:</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/04/19/store%20closings%20announced_1.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/04/19/store%20closings%20announced_1_0.jpg" width="500" height="337" /></a></p> <p>&nbsp;</p> <p>Of course, the store closures are only part of the story as the broader economic impact of the coming retail apocalypse will be felt through a whole host of industries.&nbsp; As <a href="https://www.moodys.com/research/Moodys-US-retailer-closures-negatively-affecting-some-credit-cards-banks--PR_368767">Moody's</a> points out today, one such space that will be hit particularly hard is the <strong>"private-label" credit card issuers with just 5 companies accounting for nearly 80% of all credit balances outstanding. &nbsp;</strong></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>A small number of banks dominate US private-label card issuance, with the <strong>top five accounting for 79% of balances as of early last year.</strong> The largest issuers are: Synchrony Financial Inc. (unrated); Citigroup Inc. (Baa1, stable); Alliance Data Systems Corporation (unrated) via its Comenity Bank (unrated) subsidiary, which was formerly known as World Financial Network National Bank; Capital One Financial Corporation (Baa1, stable); Wells Fargo &amp; Company (A2, stable) and TD Group US Holdings LLC (A2, stable).</p> <p>&nbsp;</p> <p>"As retailers close stores in an effort to improve profitability over the coming years, the <strong>trend will put upward pressure on private label charge-offs,</strong> owing to the fact that some cardholders will lose access to geographically convenient stores, even as a portion of those cardholders shift at least a portion of their spending to online channels," Jody Shenn, a Moody's Vice President says.</p> </blockquote> <p>Meanwhile, the hardest hit names will likely be <strong>Synchrony </strong>and <strong>Alliance Data </strong>as they rely almost entirely on private-label credit cards.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Additionally, sales challenges could create incentives for retailers to push for looser underwriting standards by their card issuing partners, which would weaken the credit quality of these accounts, especially new accounts.</p> <p>&nbsp;</p> <p><strong>"Among the largest private-label card issuers, only Synchrony and Alliance Data rely heavily on the business,"</strong> Warren Kornfeld, a Moody's Senior Vice President, says. "Private-label and cobranded cards account for almost the entire loan books of both, each with heavy retail card concentrations."</p> <p>&nbsp;</p> <p>Citi and Capital One rely on private-label and co-branded card loans for a high single-digit percentage of their earnings, also with heavy retail concentrations. Wells Fargo and TD Bank have very modest retail private-label and co-branded credit card exposures relative to their overall loan portfolios.</p> </blockquote> <p>While showing up on the right-hand side of this chart was probably sold to investors as a 'yugely' positive thing over the past couple of years, we suspect the messaging in future presentations will have to be "tweaked" (chart per <a href="file:///C:/Users/brand/Downloads/Q1%202017%20Investor%20Roadshow%20Presentation.pdf">Alliance Data investor presentation</a>).</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user230519/imageroot/2017/06/28/2017.06.28%20-%20Credit%20Cards%20Space.JPG"><img src="http://www.zerohedge.com/sites/default/files/images/user230519/imageroot/2017/06/28/2017.06.28%20-%20Credit%20Cards%20Space_0.JPG" alt="Credit card" width="600" height="433" /></a></p> <p>&nbsp;</p> <p>Meanwhile, it seems that both Alliance Data...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user230519/imageroot/2017/06/28/2017.06.28 - Credit Cards 1.JPG"><img src="http://www.zerohedge.com/sites/default/files/images/user230519/imageroot/2017/06/28/2017.06.28%20-%20Credit%20Cards%201_0.JPG" style="width: 600px; height: 380px;" /></a></p> <p>&nbsp;</p> <p>...and <a href="http://investors.synchronyfinancial.com/~/media/Files/S/Synchrony-Financial-IR/reports-and-presentations/q1-17-earnings-presentation.pdf">Synchrony</a> are already starting to show some signs of stress.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user230519/imageroot/2017/06/28/2017.06.28 - Credit Cards Space 2.JPG"><img src="http://www.zerohedge.com/sites/default/files/images/user230519/imageroot/2017/06/28/2017.06.28%20-%20Credit%20Cards%20Space%202_0.JPG" style="width: 600px; height: 370px;" /></a></p> <p>&nbsp;</p> <p>But we're sure it's no big deal.</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="650" height="365" alt="" src="http://www.zerohedge.com/sites/default/files/images/user230519/imageroot/American%20Apparel_2.jpg?1498678225" /> </div> </div> </div> http://www.zerohedge.com/news/2017-06-28/moodys-warns-private-label-credit-card-issuers-will-be-crushed-retail-implosion#comments Alliance Data Business Capital One Citigroup Credit cards Credit Crisis Credit Suisse Economy Finance Money Payment systems Synchrony Financial Wells Fargo Wells Fargo Thu, 29 Jun 2017 00:40:00 +0000 Tyler Durden 598862 at http://www.zerohedge.com Demolishing The Myths Behind The War On Cash http://www.zerohedge.com/news/2017-06-28/demolishing-myths-behind-war-cash <p><a href="https://mises.org/library/myths-behind-war-cash"><em>Authored by Ronald-Peter Stoferle via The Mises Institute,</em></a></p> <div class="body-content"> <p><strong>The attacks on physical cash from a phalanx of economists, central bankers, commercial banks, and politicians have not diminished in recent years.</strong> On the contrary, in the face of the worldwide increase in terror attacks, particularly in Europe, and ongoing pressure on public budgets, the cash ban issue is increasingly dragged into the spotlight.</p> <p>In a highly-recommended study entitled &ldquo;<a href="https://www.dbresearch.com/PROD/DBR_INTERNET_EN-PROD/PROD0000000000427044/Cash%2C_freedom_and_crime%3A_Use_and_impact_of_cash_in.pdf" target="_blank">Cash, Freedom and Crime. Use and Impact of Cash in a World Going Digital</a>,&rdquo; <strong>Deutsche Bank Research demolishes numerous popular myths surrounding cash, inter alia in the context of crime and terrorism.</strong></p> <p>Without cash there are no longer bank robberies at gun point, instead there are now electronic bank robberies. Fraud involving credit cards and ATM cards is massively increasing in Sweden, the country considered the pioneer of the cashless society.</p> <p>The argument that adopting a cashless payment system would facilitate the fight against terrorism doesn&#39;t hold water either:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>As regards terrorism in Europe, an analysis of 40 jihadist attacks in the past 20 years shows that most funding came from delinquents&rsquo; own funds and 75% of the attacks cost in total less than USD 10,000 to carry out &mdash; sums that will hardly raise suspicions even if paid by card.</strong></p> </blockquote> <p>Moreover, many terrorists, particularly if they are prepared to risk their own death, won&#39;t be deterred by prohibitions, just as stricter gun laws have no impact on people who must use unregistered weapons for their crimes. Often, they are unable to get hold of a weapon by legal means anyway if they have a criminal record. Planned terror attacks are as a rule characterized by a meticulous and careful approach. <strong>At best a cash ban might make financing of terrorism more difficult (even that is doubtful),</strong> but at the price of subjecting the law-abiding peaceful population at large to even more intrusive surveillance.</p> <p><strong>Legislators have passed additional regulations in the past 12 months which at least restrict the use of cash;</strong> bans of high-denomination banknotes (e.g., the 500 euro note) and (lower) thresholds for legal cash payments. There are however also technological developments that are significantly reducing the transaction costs of cashless payments and are therefore making cash comparatively unattractive.</p> <p><strong>In Sweden, an app called &ldquo;Swish&rdquo;&nbsp; introduced by the country&#39;s leading banks has revolutionized cashless payments. </strong>To this point, the app has been downloaded 5.5 million times. In the Scandinavian country only 2% of all payments are settled in cash these days.</p> <p>Sweden&#39;s central bank expects that this percentage will decline by another three-quarters to 0.5% by the end of the decade. 900 of the 1,600 bank branch offices in the country no longer have any cash in store.</p> <p><strong>The academic debate continues unabated.</strong> A paper that has recently triggered intense debate is the IMF working paper &ldquo;<a href="https://www.imf.org/en/Publications/WP/Issues/2017/03/27/The-Macroeconomics-of-De-Cashing-44768" target="_blank">The Macroeconomics of De-Cashing</a>,&rdquo; which was published in March 2017.&nbsp; Its author Alexei Kireyev examines the possible macroeconomic consequences of abolishing cash. His central conclusions are:</p> <ul> <li>A cashless payment system would make the monetary policy transmission mechanism more efficient, as there would be very little or no cash available anymore. In particular, it would become possible to implement negative interest rates on a broad front, in order to boost consumption.</li> <li>Since a decline in cash holdings would go hand in hand with an increase in demand deposits at banks, the banking sector would be able to extend more loans. That would lower the level of interest rates and boost economic growth.</li> <li>A sudden increase in the demand for cash is a sign of an imminently impending financial crisis. Shortly before the collapse of Lehman Brothers in September 2008, demand for cash currency increased significantly. That was a sign that bank customers increasingly lost confidence in the solvency and liquidity of commercial banks. This warning signal would no longer be available if cash were abolished.</li> <li>A cashless economy makes tax collection easier, as the example of Sweden illustrates.</li> </ul> <p><strong>Regardless of a superficially balanced approach in large parts of the text, the article clearly evinces an underlying bias toward supporting the abolition of cash. </strong>Several arguments in the paper are fallacious and represent little more than intellectual kowtowing to the prevailing zeitgeist. Thus a cashless economy is supposedly going to improve &ldquo;financial inclusiveness&rdquo; &mdash; as every citizen and economic actor would be forced to open a bank account; it would reduce illegal immigration &mdash; as employment of illegal immigrants would become more difficult; and it would help protect the environment &mdash; because the production of paper or polymers for banknotes has a greater impact on the environment than electronic money.</p> <p>Whether <strong>the given objective of fighting crime and black markets can be realized by banning cash remains a highly controversial issue.</strong> Thus, Professor Friedrich Schneider, one of the most renowned experts in the areas shadow economy and tax evasion, shows that a cash ban would reduce illicit employment be a mere 10% and organized crime by less than 5%.&nbsp;</p> <p><strong>The paper&#39;s conclusions ultimately read like a political manual for the abolition of cash by means of salami tactics.</strong></p> <p>In other words, <u><strong>to prevent the population from getting alarmed, it is to be weaned off cash in tolerable doses through a piecemeal approach</strong></u>. Economic incentives for cashless payments are to be put in place, i.e., specifically, fees for cash payments are supposed to be introduced or raised. In our assessment, the most important point though concerns the notion that &ldquo;de-cashing&rdquo; would be &ldquo;critical for the efficiency&rdquo; of a negative interest rate policy.</p> </div> <p>&nbsp;</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="295" height="153" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20170628_cash.jpg?1498675838" /> </div> </div> </div> http://www.zerohedge.com/news/2017-06-28/demolishing-myths-behind-war-cash#comments ATM ATM card Bank Banking Banknote Business Cash Cashless society Deutsche Bank Digital currency Economy Financial services International finance International Monetary Fund Lehman Lehman Brothers Mises Institute Mises Institute Monetary Policy Money Payment systems Sweden's central bank Thu, 29 Jun 2017 00:15:00 +0000 Tyler Durden 598851 at http://www.zerohedge.com