en Did Marco Rubio Just Say It's OK To Beat People For Their Thoughts? <p><a href=""><em>Authored by Shane Kastler via &quot;The Narrow Road&quot; blog,</em></a></p> <p><strong>In a truly &ldquo;free&rdquo; society, no one gets beaten up for their political views.</strong>&nbsp; Laws cannot be passed against thoughts or symbols.&nbsp; And mob violence is not allowed to rule the day.&nbsp; <strong>But Florida Senator Marco Rubio, like most establishment political hacks, is not interested in a free society.&nbsp; He&rsquo;s interested in seizing power in any way possible.&nbsp;</strong> And if that means excusing and encouraging mob violence, to achieve his political ends, then so be it.&nbsp; While Rubio may rail against dictators, his statements sound eerily like the late Fidel Castro, and other tyrants like him.</p> <p><a href=""><img height="246" src="" width="416" /></a></p> <p><strong>Rubio&rsquo;s statement came in the form of a <a href="">series of tweets he posted</a> in response to the Charlottesville circus.&nbsp;</strong> Here are his exact words:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><u><em><strong>&ldquo;When entire movement built on anger &amp; hatred towards people different than you, it justifies &amp; ultimately leads to violence against them.&rdquo;&nbsp; </strong></em></u></p> </blockquote> <p>While the trained seals who follow hucksters like Rubio will bark their approval for his &ldquo;brave words&rdquo;;<strong> those who love liberty will shudder at the true ramifications of what he is saying.&nbsp; </strong>But let&rsquo;s begin by trying to parse who exactly he is saying it about.&nbsp;</p> <p><strong>Like a good political opportunist, he speaks in vague terms.</strong>&nbsp; One might surmise that his reference to an &ldquo;entire movement&rdquo; is a shot at Donald Trump and his supporters.&nbsp; Myriads of establishment politicians have accused Trump of &ldquo;anger &amp; hatred&rdquo;; yet examples of this are never forthcoming, other than disagreements over something like immigration policy. &nbsp;So, is Rubio saying it&rsquo;s OK to physically attack any who belong to &ldquo;the movement&rdquo; that elected Trump?&nbsp; And if so, then is Rubio also saying it&rsquo;s OK to physically attack Trump? The supposed leader of this &ldquo;movement?&rdquo;&nbsp; The political vagaries allow Rubio to deny this, and perhaps say that he is talking about white supremacists, neo-Nazis, or the KKK.&nbsp; But even if he is talking about these groups&hellip;. Is he correct in saying it&rsquo;s &ldquo;justifiable&rdquo; to physically attack them for their views?&nbsp; If so, then he is no friend to freedom in general, nor to free speech in specific.</p> <p><strong>Most Americans, including me, abhor the ideologies of white supremacy, Nazism, and the KKK.&nbsp; But if a nation truly wants free speech, then even those we abhor must be allowed to speak their mind.&nbsp;</strong> There is no need to pass laws protecting polite speech.&nbsp; It is the very thoughts and words of those we vociferously disagree with that must be protected.&nbsp; Otherwise, there is no freedom at all.&nbsp; Only a rotating cycle of dictatorships, who suppress the people they conquer.&nbsp; And any U.S. Senator who encourages violence against anyone for their political views is a part of the problem and not the solution.&nbsp; While Rubio may rail against Castro, his views toward free speech are identical.&nbsp; He may rail against Adolph Hitter, but his views on free speech are no different.</p> <p><strong>Rubio is a political hound dog, who lifts his nose to try and sniff which way the popular winds are blowing.</strong>&nbsp; And then he (or one of his lackeys) issues a tweet to kiss-up to the mobs he wishes to appease.&nbsp; Rubio has always been a political robot, seemingly incapable of generating a unique thought.&nbsp; This was publicly displayed in that infamous, cringe-worthy presidential debate when Chris Christie tried to engage him in an actual exchange of ideas, and Rubio began sweating profusely and repeating his talking points.&nbsp; Over and over and over.&nbsp; The moment exposed him for the phony that he is and almost ruined his political career.&nbsp; But now, he smells an opportunity to rally the mob and save his career.&nbsp; His actions are truly deplorable.</p> <p><strong>Sadly, many in this country would side with Rubio and say violence and laws should be enacted to silence &ldquo;hate speech.&rdquo;&nbsp;</strong> One of the questions this leads to is, &ldquo;How do you define hate speech?&rdquo;&nbsp; People, with their selfish natures, typically define &ldquo;hate speech&rdquo; as anything uttered that they disagree with.&nbsp; This leads to a person&rsquo;s thoughts being criminalized.&nbsp; For example, if I think or speak in favor of Christianity, then non-Christians can deem this &ldquo;hate speech.&rdquo;&nbsp; Of course the same goes for any other viewpoint that might be expressed.&nbsp; Those in power use the power of intimidation and law to silence opposition.&nbsp; This is what Rubio declares &ldquo;justifiable.&rdquo;&nbsp; And the use of baseball bats and clubs are acceptable.</p> <p>As it pertains to &ldquo;symbols&rdquo; some say the mere presence of a Nazi flag, or a Confederate one, justifies violence.&nbsp; Many have shockingly said that showing a symbol is &ldquo;inciting a riot&rdquo; and inviting violence against the symbol-wavers, for their views.&nbsp; But this is a slippery slope that all freedom-loving people should avoid.&nbsp; This past week, a man of German origin told me that he had family members killed by the Nazis.&nbsp; Therefore, any violence carried out against those who wave a Nazi-flag is justified.&nbsp; While I have no sympathy toward Nazis, my argument back to him was that I had Southern family members killed by men carrying the American flag during the Civil War.&nbsp; Does this mean I can physically attack anyone who waves an American flag?&nbsp; Politicians like Rubio would never say this, because he&rsquo;s too busy wrapping himself in the flag as he tries to further his career.&nbsp; But what&rsquo;s good for the goose is good for the gander.&nbsp; If one group can physically attack another group over a symbol.&nbsp; Then what stops the attacked group from reciprocating?&nbsp; And using Rubio&rsquo;s incendiary words as justification?</p> <p><strong>If people really want a &ldquo;free country&rdquo; like they claim they do, then political thoughts, speech, and symbols cannot be outlawed.&nbsp; Nor can men as powerful as U.S. Senators justify violence against any group because of their views.&nbsp;</strong> It&rsquo;s become passé to call anyone who disagrees with you a Nazi.&nbsp; In some cases, those who disagree with you truly are Nazis.&nbsp; But in this case, Marco Rubio is displaying the philosophy of a Nazi.&nbsp; If Rubio&rsquo;s supporters truly want freedom, they will call him out for his incendiary comments.&nbsp; They will stand up to him and others like him and say free speech, truly means &ldquo;free speech.&rdquo;&nbsp; And they will look for ways to peacefully keep dictatorial men like him from seizing power.&nbsp; Rubio loves to talk about how his family fled the tyranny of Castro&rsquo;s Cuba to find freedom in America.&nbsp; But today, Rubio&rsquo;s political ambitions have caused him to revert back to the behavior that his ancestors fled.&nbsp; Or maybe this has been Rubio&rsquo;s mindset all along.&nbsp; Evil men desire power for themselves more than they desire freedom for all.&nbsp; And they will say and do whatever it takes to gain such power.&nbsp; Rubio&rsquo;s words expose him once again as what he truly is.&nbsp; If encouraging mob violence furthers his career, then he&rsquo;s all game.&nbsp; Maybe instead of calling him &ldquo;Little Marco&rdquo; people should start calling him &ldquo;Little Castro.&rdquo;&nbsp; A more fitting moniker could not be found.</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="416" height="246" alt="" src="" /> </div> </div> </div> BATS Behavior Censorship Donald Trump Florida Freedom of speech Hate speech Hatred Ku Klux Klan Marco Rubio Politics Psychology Structure Violence Sat, 19 Aug 2017 20:20:00 +0000 Tyler Durden 601963 at Next Week's Solar Eclipse Will Cost US Economy $700 Million <p>$700 million...</p> <p>That&rsquo;s the total projected cost to the American economy in lost productivity as workers head outside to watch next week&rsquo;s solar eclipse, according to Chicago executive-outplacement firm Challenger, Gray and Christmas.</p> <p>Here&#39;s <a href="">Reuters:</a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;<strong>American employers will see at least $694 million in missing output for the roughly 20 minutes</strong> that outplacement firm Challenger, Gray &amp; Christmas estimates workers will take out of their workday on Monday to stretch their legs, head outside the office and gaze <strong>at the nearly two-and-a-half minute eclipse.&rdquo;</strong></p> </blockquote> <p>According to Andy Challenger, the estimate for how much time workers will ultimately lose to the eclipse&nbsp; &ndash; approximately 20 minutes &ndash; is probably conservative. That&#39;s because some people might take additional time to set up their telescopes, or just linger outdoors on what&rsquo;s expected to be a beautiful summer day. <strong>To get to $700 million figure, Challenger took one-third of the latest reading for US workers&rsquo; average hourly wage and multiplied it by the number of all workers 16 and over.</strong> By this logic, the final figure might be too generous, because only about half of Americans say they plan on watching the eclipse, according to a <a href="">survey conducted earlier this month.</a> Though that figure rises to 60% for workers in the eclipse&rsquo;s narrow &ldquo;zone of totality.&rdquo;</p> <p>Here&rsquo;s a timeline of the eclipse from coast to coast, courtesy of <a href="">Accuweather. &nbsp;</a></p> <p><a href=""><img alt="" src="" style="width: 500px; height: 281px;" /></a></p> <p>In addition to the manpower wasted, the eclipse will also temporarily stop production of solar power along the 70-mile-wide path of totality. It will also reduce solar power output on the rest of the continent where the moon&rsquo;s shadow will cause a partial eclipse.</p> <p>However large the loss in productivity, it&rsquo;ll likely be a drop in the bucket compared to the amount of time American workers waste on social media every day. For the better part of a decade, anemic US productivity growth has puzzled economists who&rsquo;ve struggled to explain why advances in technology haven&rsquo;t translated into more efficient workers. But as<a href=""> we&rsquo;ve repeatedly suggested</a>, the slowdown isn&rsquo;t happening in spite of technology, but because of it, as mobile devices offer workers a virtual buffet of distractions that ultimately hinder efficiency. <strong>The chart below shows that US productivity growth in 2016 was the worst since 1982.</strong></p> <p><a href=""><img alt="" src="" style="width: 500px; height: 326px;" /></a></p> <p>Earlier this month, Facebook released user-engagement data for its popular Instagram photo-sharing app. The data showed that the average user below the age of 25 now spends more than 32 minutes a day on the app, while the average user aged 25 and older spends 24 minutes a day. The last time Facebook released this data, in October 2014, its users averaged 21 minutes a day on the app.</p> <p>Challenger also pointed out that the eclipse will have an outsize impact on smaller companies because &ldquo;when 3 or 4 people are missing from an office of 15, it&rsquo;s a lot more disruptive.&rdquo; But whatever the impact, it likely won&rsquo;t be large enough to register in macroeconomic data, Challenger said.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&quot;Compared to the amount of wages being paid to an employee over a course of a year, it is very small,&quot; Challenger said.</p> </blockquote> <p>As a result, employers worried about the money-losing impact of the eclipse would be better served by banning social media in the office. According to Bloomberg, the eclipse is due to start a little after 9 a.m. local time on the West Coast and peak about 10:15 a.m. The East Coast will see the biggest effect after 2:30 p.m. In the central U.S., the eclipse will peak at 1:18 p.m.&nbsp; Meanwhile Facebook remains accessible 24/7.</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="574" height="323" alt="" src="" /> </div> </div> </div> central U.S. Challenger, Gray & Christmas Computer programming Computing East Coast Eclipses Labor mobile devices Outplacement Reuters Science Software Solar eclipse Solar eclipse of August 21 Solar eclipse of July 22 West Coast Sat, 19 Aug 2017 19:50:00 +0000 Tyler Durden 601959 at Mike Krieger Fumes Over Bannon Firing: "This Is Now The Goldman Sachs Presidency" <p><a href=""><em>Authored by Mike Krieger via Liberty Blitzkrieg blog,</em></a></p> <p><strong>The firing of Steve Bannon is in my opinion the most significant event to happen during the Trump administration thus far. </strong>Moreover, it will have massive reverberations across the U.S. political spectrum for years and years to come. I wasn&rsquo;t planning on writing today, but this news is so incredibly significant I find myself with little choice.</p> <p><a href=""><img height="232" src="" width="496" /></a></p> <p>Taking a step back, part of the reason I was immediately able to see through the Trump con was due to my upbringing in New York City. The guy was constantly in the news my entire life, so I had a pretty decent understanding of where he was really coming from and what makes him tick. The mindset of your typical NYC-based billionaire real estate developer is filled with all sorts of perspectives and priorities, but thoughts of populism are not amongst them.</p> <p><strong>Trump used populism to get elected, and then as soon as he won, immediately appointed some of the most destructive oligarchs imaginable to run his administration.</strong> The reason I warned about this incessantly at the time, is because I learned the lesson from the Obama administration. People = policy, and the people Trump was elevating were almost unanimously awful. Irrespective&nbsp;of what you think of Bannon, him being out means Wall Street and the military-industrial complex is now 100% in control of the Trump administration. Prepare for an escalation of imperial war around the world and an expansion of brutal oligarchy.</p> <p><strong>The removal of Bannon is the end of even a facade of populism. This is now the Goldman Sachs Presidency with a thin-skinned, unthinking authoritarian as a figurehead.</strong> Meanwhile, guess who&rsquo;s still there in addition to the Goldman executives? Weed obsessed, civil asset forfeiture supporting Jefferson Sessions. The Trump administration just bacame ten times more dangerous than it was before. With the coup successful, Trump no longer needs to be impeached.</p> <blockquote class="twitter-tweet" data-lang="en"><p dir="ltr" lang="en">The media took Donald Trump, cut his balls off, and handed them to Goldman Sachs.</p> <p>Mission accomplished.</p> <p>&mdash; Michael Krieger (@LibertyBlitz) <a href="">August 18, 2017</a></p></blockquote> <script async src="//" charset="utf-8"></script><p>Here&rsquo;s another prediction. Watch the corporate media start to lay off Trump a bit more going forward. Rather than hysterically demonize him for every little thing, corporate media will increasingly give him more of the benefit of the doubt. After all, a Presidency run by Goldman Sachs and generals is exactly what they like. Trump finally came out of the closet as the anti-populist oligarch he is, and the results won&rsquo;t be pretty.</p> <p><strong>Corporate media got the scalp it wanted, so the hysterical criticisms of him will die down.</strong> This is not to say I think the media will become pro-Trump, it just means the obsessive and aggressive propaganda will be dialed back considerably. Trump is now inline, and he will be rewarded by the establishment for that. He will learn that the more he gets with the program, the easier his life will be and the more secure his power. He is merely being conditioned, and my forecast is that Trump will gladly embrace the worst parts of the establishment going forward. Why? Because&nbsp;Trump&rsquo;s true worldview fits in way more with Goldman Sachs and the military-industrial complex than with populism. It always has. The whole thing was just an act to get elected. Firing Bannon is just Trump coming home to who he always was. A ruthless oligarch.</p> <p>Now I&rsquo;m going to make a few predictions about the political environment going forward. <strong>First, I think right-populism or the &ldquo;new right,&rdquo; is deeply damaged and this presents a huge opportunity for left-leaning populists if they are smart about it.</strong> Let&rsquo;s begin by discussing why this is so problematic for the &ldquo;new right.&rdquo;</p> <p>At this point, something has become undeniable. <strong>Trump voters who supported him based on the idea that he would bring forth an agenda of economic populism got played.</strong> I understand that many other people just voted for him as a middle finger to the system, but for the true believers who thought he had their backs, it&rsquo;s now long past the time to pack up your bags. I don&rsquo;t say this out of pleasure, I genuinely hoped he would push forth an agenda of economic populism, but now we know for certain this is never going to happen. That much is pretty undeniable.</p> <p>Nevertheless, just because something is undeniable, doesn&rsquo;t mean it won&rsquo;t be denied. Too many people have invested way too much in Trump to admit they got played. Sure, there will be outrage for a few days and people will swear to be &ldquo;off the Trump train,&rdquo; but as soon as the next wedge social issue gets played up by the media, they&rsquo;ll be right back onboard. I expect excuses from &ldquo;new right&rdquo; leaders to come within a few days, or weeks at the most. Remember, many people built up their entire careers and public profiles by cheerleading Trump into office. Most of these people are egomaniacs. What does an egomaniac do when confronted with information that they got something wrong? Do they publicly admit their error and give credit to those who voiced skepticism, or will they figure out a way to change the subject in order to maintain their relevance and position amongst their fans? I think you know the answer.</p> <p>As such, right-populism is at a crossroads and this is what I expect to happen. The same people who so passionately convinced people to get on the &ldquo;Trump train&rdquo; will be far more concerned with maintaining as much of their social media status as possible, versus doing what&rsquo;s right for the country. There are enough unthinking fans out there to allow this to happen. That said, the movement will be harmed immensely because enough intelligent people will see that many of these new right pundits aren&rsquo;t who they say they are. The credibility gap will widen and widen, as it should. Trump was a fake and if you were so easily tricked by Trump, why should we trust you on any other subject?</p> <p><strong>Right-populism is now very much discredited, as its leader has been shown to be nothing more than a narcissistic con-man. This will not be an easy hole to dig out of, yet with some deep reflection, my hope is a new right populism can emerge that is more in tune with Rand Paul than Donald Trump. That&rsquo;d be nice, but I have my doubts.</strong></p> <p>As such, an enormous opportunity has opened up for left-leaning economic populism. I already predicted this wave in a piece a few weeks ago titled,<a href="" rel="bookmark noopener" target="_blank" title="Permanent Link to Politics of the Next 4 Years – Part 1 (Rise of the ‘Dirtbag Left’)">Politics of the Next 4 Years &ndash; Part 1 (Rise of the &lsquo;Dirtbag Left&rsquo;)</a>. Here&rsquo;s some of what I wrote:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong><em>This faction of leftism is waging war against Clinton neoliberal frauds and Trump&rsquo;s fake populism at the exact same time. Not an easy thing to do, but I think there&rsquo;s a huge and growing unsatisfied demand for such a perspective.</em></strong></p> <p>&nbsp;</p> <p><strong><em>A lot of you will discount the appeal of this movement because many of its most high-profile members are unabashed socialists. This is a big mistake. Remember, Donald Trump won the Presidency not because he was especially great or loved, but because his opponent was terrible, he talked in populist terms, and people just wanted to give a middle finger to the political establishment and corporate media. If that&rsquo;s right, what&rsquo;s to stop a movement from winning power if it promises to flip the bird to both Trump and Clinton while also making you laugh? Not much.</em></strong></p> <p>&nbsp;</p> <p><strong><em>I think the &ldquo;DirtBag Left&rdquo; will catch the Trump team completely&nbsp;off guard over the next few years. The reason Trump&rsquo;s prospects look pretty good right now for a second term is because there&rsquo;s no real organized opposition to him. By real organized opposition, I mean a movement driven by actual ideas and passion that is also working on a plan to run a competitive candidate in 2020. The current &ldquo;resistance&rdquo; consists of Hillary donors, neocons, the corporate media and elements of the deep state. While Trump complains about this opposition constantly, he doesn&rsquo;t realize how good he has it. The American public hates those factions more than they hate Trump, and nobody wants to vote for that discredited garbage in 2020.</em></strong></p> </blockquote> <p>If the genuine left is smart, it will take a step back and see this for the gigantic opening it is. Lots of Trump voters are now up for grabs, and if they can come up with a genuine message of economic populism that avoids the typical leftist pitfalls &mdash; such as supporting misguided young people dressing up like ninjas, carrying flags and hurling rocks at people trying to give a talk &mdash; the opportunity to create a populist movement of immense national significance is there. People across the country are craving it, but they want nothing to do with antifa, political correctness, or aggression against free speech. Noam Chomsky gets it, and I hope others heed his words.</p> <p><a href=""><img class="alignnone size-large wp-image-46924" src="" style="width: 496px; height: 76px;" /></a></p> <p>As such, here&rsquo;s what I would recommend to any burgeoning populist movement wanting to unite the country against oligarchy, as opposed to just becoming a leftist echo chamber. It is the exact same thing I suggested to Trump, but he obviously didn&rsquo;t listen.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>Election 2016 has been extremely&nbsp;bittersweet for me. On the positive side, through both the Bernie Sanders and Donald Trump grassroots movements, we have seen clear proof that a huge number of Americans accurately understand that the current system is totally rigged and simply not working for them. These people didn&rsquo;t migrate toward these two candidates for some tweaks to the system here and there, their supporters want full scale paradigm level change.</em></p> <p>&nbsp;</p> <p><em>As such, rather than dwelling on the differences between these two populist movements, let&rsquo;s consider some of the areas where they overlap.</em></p> <p>&nbsp;</p> <p><em>1. <strong>Trade</strong>&nbsp;&mdash; Opposition to NAFTA and current &ldquo;trade&rdquo; deals such as TPP, TTIP, and TISA have been central&nbsp;to both the Sanders and Trump campaigns.</em></p> <p>&nbsp;</p> <p><em>2. <strong>War and militarism</strong> &mdash; Whether you believe Trump is sincere or not, opposition to Obama/Clinton interventionist overseas wars were key talking points for both Trump and Sanders.</em></p> <p>&nbsp;</p> <p><em>3. <strong>The system is rigged</strong> &mdash; The painful&nbsp;acknowledgment&nbsp;that the U.S. economic system is a rigged scam that&nbsp;fails to reward hard work, and is more akin to a parasitic, predatory oligarchy with very limited social mobility,&nbsp;has been a key campaign theme for both Trump and Sanders. The economy is increasingly dominated by near-monoploy giants who relentlessly push for more power and more profits irrespective of the cost to society, whether that cost be war, poverty or social unrest.</em></p> <p>&nbsp;</p> <p><em>4. <strong>Money in politics</strong> &mdash; The rigged economic system described above aggregates wealth into an increasingly small number of hands. Those hands then buy off politicians and rig the political process. A rigged economy and rigged political system perpetually feeds itself and endlessly grows at the expense of the public like a terminal cancer. Both Trump and Sanders emphasized this problem.</em></p> <p>&nbsp;</p> <p><em>5. <strong>Rule of law is dead</strong> &mdash; Sanders focused on Wall Street bankers, while&nbsp;Trump focused on Hillary and her inner circle of cronies, but the overall point is the same. Rich and powerful oligarchs are above the law. We all know this, but Washington D.C. refuses to do anything about.</em></p> </blockquote> <p><em><strong>Populism isn&rsquo;t dead in America, but right populism as it exists today is. I just hope the next iteration is a lot more genuine, and a lot more sane.</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="496" height="232" alt="" src="" /> </div> </div> </div> Alt-right American people of German descent Bernie Sanders Climate change skepticism and denial Donald Trump Donald Trump Donald Trump presidential campaign goldman sachs Goldman Sachs Neocons New York City Obama Administration Obama administration Political positions of Donald Trump Real estate Steve Bannon The Apprentice Trump Administration United States Washington D.C. Sat, 19 Aug 2017 19:20:00 +0000 Tyler Durden 601962 at "The Dreaded Phase 4": What Happens When Credit Spreads Finally Rise <p>With investors, traders, analysts and pundits focused on the chaos in the White House, and the daily barrage of escalating geopolitical and social news, whether terrorist attacks in Europe or clashes in inner America, the market is finally starting to notice as Friday's last hour sell-off demonstrated. And yet, according to one of the best minds on Wall Street today, Citi's Matt King, what traders should be far more concerned about, is not who is in the Oval Office or how bombastic the war of words between the US and North Korea may be on any given day, but rather what central banks are preparing to unleash in the coming months. To underscore this, two weeks ago, King <a href="">made a stark warning</a> when he summarized that we are now <strong>more reliant on central banks banks holding markets together than ever before</strong>: </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>"with asset prices displaying a high degree of correlation with central bank liquidity additions in recent years, that feedback loop makes the economy, upon which both corporate profitability and bank net interest margins depend, <strong>more reliant on central banks holding markets together than almost ever before. </strong>That delicate balance may well be sustained for the time being. But with central banks beginning to move, however gingerly, towards an exit, is it really worth chasing the last few bp of spread from here?"</p> </blockquote> <p>One week later, he followed up with what was arguably his <a href="">magnum opus on why the market is far too complacent </a>about the threat to risk assets from the upcoming rounds of balance sheet normalization, summarized best in the following charts, showing the correlation between central bank asset purchases and the returns across global stock markets. The unspoken, if all too familiar, message was that riskier financial assets, such as credit and equities, have been artificially boosted by central bank actions, actions which are soon coming to an end whether voluntarily in the case of the Fed, or because the central bank is simply running out of eligible bonds to monetize, in the case of the ECB and BOJ.</p> <p><img src="" width="500" height="228" /></p> <p>In short, King is worried the global market is about to enter another tantrum. </p> <p><strong>Is he right? </strong></p> <p>To answer that question, another Citi strategist, Robert Buckland, admitting that "we are (always) worried", takes a look at where we currently stand in the business cycle as represented by <strong>Citi's Credit/Equity clock</strong> popularized also by Matt King in previous years.</p> <p><a href=""><img src="" width="500" height="381" /></a></p> <p>For those unfamiliar, here is a summary of the various phases of the business cycle clock:</p> <ul> <li><strong>Phase 1: Debt Reduction – Buy Credit, Sell Equities</strong></li> </ul> <p>Our clock starts as the credit bear market ends. Spreads turn down as companies repair balance sheets, often through deeply discounted share issues. This dilution, along with continued pressure on profits, keeps equity prices falling. For the present cycle, this phase began in December 2008 and ended in March 2009. Global equities fell another 21% even as US spreads tightened.</p> <ul> <li><strong>Phase 2: Profits Grow Faster Than Debt – Buy Credit, Buy Equities</strong></li> </ul> <p>The equity bull market begins as economic indicators stabilise and profits recover. The credit bull market continues as improving cashflows strengthen company balance sheets. <strong>It’s all-round risk-on. This is usually the longest phase of the cycle. This began in March 2009, and according to most Wall Street analysts, is the phase we find ourselves in right now</strong>. Equity and credit investors both do well in this phase.</p> <ul> <li><strong>Phase 3: Debt Grows Faster Than Profits – Sell Credit, Buy Equities</strong></li> </ul> <p>This is when credit and equities decouple again. <strong>Spreads turn upwards as fixed income investors become increasingly worried about deteriorating balance sheets</strong>. But equity markets keep rallying as EPS rise. Share prices are also boosted by the effects of higher corporate leverage, often in the form of share buybacks or M&amp;A. This is the time to favour equities over credit.</p> <ul> <li><strong>Phase 4: Recession – Sell Credit, Sell Equities</strong></li> </ul> <p>In this phase, equities recouple with credit in a classic bear market. It is associated with a global recession, collapsing EPS and worsening balance sheets. Insolvency fears plague the credit market, profit warnings plague the equity market. It’s all-round risk-off. Cash and government bonds are usually the best-performing asset classes.</p> <p>* * * </p> <p>The reason why Citi is concerned where exactly in the business cycle the US economy and capital markets are to be found at this very moment, is that as <a href="">Goldman showed recently</a>, corporate leverage has never been higher...</p> <p><a href=""><img src="" width="500" height="358" /></a></p> <p>... and yet, corporate spreads remain at or near all time lows. Behind this paradox is - once again - the active intervention of central banks, and explicitly the ECB, which starting in March of 2016 announced its plans to start purchasing corporate bonds, sending corporate spreads to record lows, and in some cases, <a href="">pushing junk bonds yields below matched US Treasurys</a>.</p> <p><a href=""><img src="" width="500" height="348" /></a></p> <p>Or, as Citi puts it, "<strong>Central banks hold back the clock</strong>"</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Citi credit strategists suspect that <strong>this central bank intervention decoupled credit spreads from the underlying company balance sheets</strong>. As corporates lift leverage, <strong>we would normally expect the credit clock to enter Phase 3. </strong>Spreads should widen to reflect higher Net debt/EBITDA ratios. But that hasn’t happened in this cycle. In the last 18 months, corporate leverage has risen but credit spreads have fallen. </p> </blockquote> <p><a href=""><img src="" width="500" height="402" /></a></p> <p>Buckland's summary is an echo of what we posted nearly a month ago in <a href="">The ECB's Impact On The Bond Market In One Chart </a>: "<strong>It seems that the corporate leverage clock has marched on to Phase 3, but the central banks have managed to hold the credit spread clock back in Phase 2.</strong>"</p> <p>Whatever the reason for the break in the business cycle, where we are currently located is critical as it could mean the difference between BTD across all assets, or, focusing on just a specific subset. In fact, it's all about credit spreads: as Citi explains, the credit market has turned up (spreads start falling) before the equity market early in the cycle and turned down before the equity market (spreads start rising) later in the cycle. This is also shown in the next two charts below which show the progression of high yield spreads and global equity markets across the 4 phases of the cycle:</p> <p><a href=""><img src="" width="500" height="227" /></a></p> <p>Going back to the original trhust of the article, if indeed credit spreads are finally starting to rise due to excess leverage/central bank concerns, in other words <strong>if we are finally shifting from Phase 2 to Phase 3</strong>, what are the implications? </p> <p>Key among them, is the as spreads rise, volatility follows, and market dips become bigger and more frequent, jeopardizing the profitability of the BTFD "strategy." Buckland explains:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>If credit spreads do start to widen as central banks taper later this year, <strong>then we could finally move into Phase 3 of the credit/equity clock</strong>. What are the characteristics of this phase? And what are the investment implications for global equity investors? </p> <p>&nbsp;</p> <p><strong>Equities Up, But More Volatile </strong></p> <p>&nbsp;</p> <p>The credit/equity clock suggests that, despite widening spreads, equities can still generate decent returns in Phase 3. However, those returns are usually accompanied by higher volatility. This reflects the traditionally close relationship between credit spreads and volatility. <strong>As spreads rise, observed volatility (and the VIX) tend to follow (Figure 8). Investors should continue to buy the equity market dips, but these dips may get bigger and more frequent. </strong>While the headline equity market returns in Phase 3 are similar to Phase 2 (Figure 9), the risk-adjusted returns (Sharpe ratio) tend to be lower. <strong>The high return/low vol phase of the market cycle is over.</strong></p> <p><a href=""><img src="" width="500" height="208" /></a></p> </blockquote> <p>More importantly, this is the phase when bubbles emerge in full view, and in this case, the most obvious candidates for a bubble <strong>are global Growth stocks and US IT in particular.</strong></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>It’s Bubble Time:</strong> Bubbles are common in these ageing equity bull markets. Indeed, <strong>all the great bubbles of the last 30 years have occurred in Phase 3 of the equity/credit clock (Figure 10). </strong>The late 1980s Phase 3 was dominated by Japanese equities, which rose to 44% of global market cap (now 8%). The late 1990s Phase 3 saw global Growth stock indices rising to unprecedented levels. The last cycle saw a sharp rerating of EM equities. All of these bubbles inflated even as credit spreads were rising. The bursting of these bubbles was a key driver of the subsequent bear markets. </p> <p>&nbsp;</p> <p><a href=""><img src="" width="500" height="204" /></a></p> </blockquote> <p>Citi also issues a warning to value investors, whose "natural inclination to fight bubbles can get them into serious trouble at this point in the market cycle. The most obvious candidates for a bubble this time round are US Growth stocks and US IT in particular (Figure 10). We recently suggested that Growth stocks everywhere are looking expensive, but they are not yet in a bubble comparable to the late 1990s."</p> <p>But the most critical aspect of timing Phase 3 is because the "<strong>dreaded" </strong>Phase 4 follows right after. Citi explains: "<strong>The strategies that work in Phase 3 get smashed in Phase 4. This is when a global recession pushes both equities and credit into a bear market. Bubbles collapse.</strong>"</p> <p>The problem with the advent of Phase 4, however, is that Phase 3 is inbetween, and even if the party is nearly over for corporate bonds (and spreads), it can continue for equities according to Buckland. </p> <p><span style="text-decoration: underline;"><strong>But how long does Phase 3 continue? </strong></span></p> <p>That's the question that everyone will soon be asking, and here is Citi's attempt at an answer:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>Investing in Phase 3 is a dangerous game. </strong>Equity markets are moving into overshoot mode. This is nice while it lasts, but the <span style="text-decoration: underline;"><strong>dreaded Phase 4</strong></span> may not be too far away. <strong>The late 1980s Phase 3 lasted 16 months. The late 1990s lasted 32 months. But in 2007 it only lasted 4 months.</strong></p> </blockquote> <p>Adding to the complexities of timing the transition from Phase 3 to Phase 4 is that - as observed twice already in this cycle - credit markets can give head fakes, <strong>especially if central banks step in to stop the sell-off.</strong> This is why when Buckland cross checks against the rest of Citi's Bear Market Checklist, he is comforted because even as "credit spreads are important factors in our checklist but they are not the only factors. The others help to reduce the head-fakes. For example, our bear market checklist helped us hold our nerve during the early 2016 sell-off even as credit spreads were signaling imminent doom."</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Right now, only 2.5 factors out of 18 are worrying (Figure 14). If credit spreads widen significantly, we may turn them amber/red. <strong>But, everything else being equal, 4.5/18 red flags would still suggest that it is too early to call the move into Phase 4. </strong>However, we will continue to watch closely.</p> </blockquote> <p><a href=""><img src="" width="500" height="540" /></a></p> <p>* * * </p> <p>So as Citi refuses to sound an alarm, despite its increasingly more concerned research reports, and warnings about credit spreads, especially in the junk bond space, <strong><em>in theory</em>, </strong>some of the biggest names in finance are quietly moving for the exits <strong><em>in practice</em>, </strong>and as <a href="">Bloomberg reported this week</a>, <strong>"investors overseeing about $1.1 trillion have been cutting exposure to the world’s riskiest corporate debt as rates grind too low to compensate for potential risks.</strong>"</p> <p>These professional investors are worried for all the reasons voiced by Citi above: leverage is at record highs, yet even with the recent market turmoil stemming from North Korea and US political tensions, the Bloomberg Barclays index of junk bonds is yielding just above all time lows, or 5.3%, 100 bps below its 5 year average.</p> <p><a href=""><img src="" width="500" height="281" /></a></p> <p>How much longer will it stay here, and how much longer will the market assume that we are still in Phase 2 instead of Phase 3? Some of the world's biggest money managers aren't waiting to find out, to wit:</p> <p><strong>JPMorgan Asset Management, AUM: $17 billion (for Absolute Return &amp; Opportunistic Fixed-Income team)</strong></p> <ul> <li>In early July told Bloomberg they have cut holdings of junk debt to about 40 percent from more than half.</li> <li>“We are more likely to decrease risk rather than increase risk due to valuations,” New York-based portfolio manager Daniel Goldberg said.</li> </ul> <p><strong>DoubleLine Capital LP, AUM: about $110 billion</strong></p> <ul> <li>Jeffrey Gundlach, co-founder and chief executive officer, said in an interview published Aug. 8 he’s reducing holdings in junk bonds and emerging-market debt and investing more in higher-quality credits with less sensitivity to rising interest rates.</li> <li>European high-yield bonds have hit “wack-o season,” Gundlach said in a tweet last week.</li> </ul> <p><strong>Allianz Global Investors, AUM: $586 billion</strong></p> <ul> <li>David Newman, head of global high yield, said in an interview his fund has begun trimming its euro high-yield exposure because record valuations make the notes particularly vulnerable in a wider selloff.</li> </ul> <p><strong>Deutsche Asset Management, AUM: 100 billion euro ($117 billion) in multi-asset portfolios</strong></p> <ul> <li>Said earlier this month it has reduced holdings of European junk bonds.<br />The funds are shifting focus to equities, where there is more potential upside and higher yields from dividends, according to Christian Hille, the Frankfurt-based global head of multi asset. </li> </ul> <p><strong>Guggenheim Partners, AUM: &gt;$209 billion</strong></p> <ul> <li>Reduced allocation to high-yield corporate bonds across core and multi-credit strategies to the lowest level since its inception, according to a third-quarter outlook published on Thursday.</li> </ul> <ul> <li>Junk bonds are “particularly at risk due to their relatively rich pricing,” portfolio managers including James Michal say in outlook report.</li> </ul> <p><strong>Brandywine Global Investment Management, AUM: $72 billion</strong></p> <ul> <li>Fund has cut euro junk-bond allocations to a seven-year low because of valuation concerns, Regina Borromeo, head of international high yield, said in an interview this month</li> </ul> <p>* * * </p> <p>Of course, the final complication, and what Citi did not mention, is that virtually all of the "safe" indicators in Citi's "<em>recession/Phase 4 checklist"</em> above are a function of funding pressures (or lack thereof) and thus, credit spreads. By the time there is a blow out in spreads - and yields - <strong>it will be too late to time the phase shift appropriately as the economy is likely already in a recession at that point. </strong>Which is why we find the Citi's spread guidance most useful:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>What might tell us that the shift into Phase 4 is imminent? We find that US HY credit spreads (currently 400bp) of around 600bps are high enough to indicate an oncoming recession. The equivalent level for US IG spreads (currently 110bp) is around 175bp. Historically, equities have been able to handle spreads rising up to these levels, but anything higher gets dangerous.</p> </blockquote> <p>Ultimately, the catalyst that finally sends the market (and economy) hurtling out of Phase 2 <em>and </em>Phase 3 and into the "Dreaded" Phase 4, will likely be the simplest, and oldest one in the book: more sellers than buyers... and as the list above shows, the sellers have arrived.</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="270" height="164" alt="" src="" /> </div> </div> </div> Bank of Japan Barclays Bear Market Bloomberg Barclays Bond Bond Business Capital Markets Central Banks Citigroup Corporate bond Corporate Leverage Economy Equity Markets European Central Bank Finance Financial crises fixed Global Systemically Important Banks Gundlach High Yield High-yield debt inner America Money North Korea Primary dealers Recession Subprime mortgage crisis United States housing bubble US Federal Reserve Volatility White House White House Sat, 19 Aug 2017 18:48:31 +0000 Tyler Durden 601968 at Hugh Smith: "We Need A Social Revolution" <p><a href=""><em>Authored by Charles Hugh Smith via,</em></a></p> <div class="content clearfix"> <p><strong>In the conventional view, there are two kinds of revolutions: political and technological. </strong>Political revolutions may be peaceful or violent, and technological revolutions may transform civilizations gradually or rather abruptly - for example, revolutionary advances in the technology of warfare.</p> <p>In this view, the engines of revolution are the state&mdash;government in all its layers and manifestations&mdash;and the corporate economy.</p> <p>In a political revolution, a new political party or faction gains converts to its narrative, and this new force replaces the existing political order, either via peaceful means or violent revolution.</p> <p>Technological revolutions arise from many sources but end up being managed by the state and private sector, which each influence and control the other in varying degrees.</p> <p><strong>Conventional history focuses on top-down political revolutions of the violent &ldquo;regime change&rdquo; variety: the American Revolution (1776), the French Revolution (1789), the Russian Revolution (1917), the Chinese Revolution (1949), and so on.</strong></p> <p>Technology has its own revolutionary hierarchy; the advances of the Industrial Revolutions I, II, III and now IV, have typically originated with inventors and proto-industrialists who relied on private capital and banking to fund large-scale buildouts of new industries: rail, steel manufacturing, shipbuilding, the Internet, etc.</p> <p>The state may direct and fund technological revolutions as politically motivated projects, for example the Manhattan project to develop nuclear weapons and the Space race to the Moon in the 1960s.</p> <p>These revolutions share a similar structure: a small cadre leads a large-scale project based on a strict hierarchy in which the revolution is pushed down the social pyramid by the few at the top to the many below.&nbsp; <strong>Even when political and industrial advances are accepted voluntarily by the masses, the leadership and structure of the controlling mechanisms are hierarchical: political power, elected or not, is concentrated in the hands of a few at the top.</strong> Corporations are commercial autocracies; leadership is highly concentrated and orders are imposed on the bottom 99% of employees with military-like authority.</p> <h2><u>Social Revolutions Are Not Top-Down</u></h2> <p><strong>But there is another class of revolution that does not share this hierarchical structure, nor does it manifest in the large-scale, top-down power-pyramids of the state and private corporations: <em>social revolutions</em> are bottoms-up affairs, lacking centralized leadership and hierarchical control mechanisms.</strong></p> <p>Social revolutions eventually influence the state and private sector, but they do not require the permission, funding or leadership of these hierarchies; as a rule, social revolutions drag the state and corporate sectors forward, kicking and screaming, as the social fabric and values of the populace change and the state and corporate sector cling to the status quo.</p> <p>Examples of recent social revolutions include the civil rights movement of the 1950s and 60s, the Counterculture of the 1960s, and the gay rights movement. &nbsp;The leadership of the state resisted each revolution, and was essentially forced to adapt to the new social order as it became mainstream.</p> <p>Once corporations figured out ways to profit from the transformed social order, they quickly introduced new products and fresh marketing: all-Caucasian advertising, for example, gave way to targeted ethnic advertising and mixed-race national advert campaigns.</p> <p><strong>When social revolutions are suppressed by the state, they may spark a political revolution as the socially oppressed come to see the overthrow of the autocratic political order as a necessary step towards liberation.&nbsp;</strong></p> <p>In other cases, social revolutions may have little immediate impact on the political stage. Faith-based social secular movements--for example, the Second Great Awakening in the early 19<sup>th</sup> century-- were not overtly political; their eventual political impact (temperance, woman&rsquo;s rights and support for the abolition of slavery) may manifest decades later.</p> <p>In summary: <strong><em>social revolutions may generate political waves, but they need not be overtly political to do so, nor do they rely on political, financial or technological hierarchies to transform society.</em></strong></p> <h2><u>The Decline of Social Groups and the Erosion of the Social Order</u></h2> <p>Robert Putman&rsquo;s 2000 book <a href=";camp=1789&amp;creative=9325&amp;creativeASIN=0743203046&amp;linkCode=as2&amp;tag=charleshughsm-20&amp;linkId=c682d9f5482215ae566eb693063565ac" target="_blank"><em>Bowling Alone: The Collapse and Revival of American Community</em></a>, documented the decline of social connections and what we might calling <em>belonging</em> in American society with reams of data. <strong>This erosion of social bonds is not limited to social groups such as bowling leagues; it is secular, spanning every social type of connection from family picnics to community and neighborhood groups.</strong></p> <p>If we extend Putnam&rsquo;s findings to the core human bonds of family and friendships, <strong>we find the same fraying of social ties; people have fewer close friends, are more isolated and lonely, and family relationships are increasingly superficial or characterized by alienation.</strong></p> <p>The factors feeding this broad-based decline of connectedness and social capital are many: the nation&rsquo;s economic <em>mode of production</em> has changed, requiring two incomes where one once sufficed, and globalization has increased both the demands on those with jobs and the number of adults who have fallen out of the work force.</p> <p><strong>This <em>winner-takes-most</em> economy has been accompanied by the rise of political divisiveness, a brand of politics that fosters <em>us-versus-them</em> disunity and the erosion of common ground in favor of demonized opponents and <em>all-or-nothing</em> loyalty to one party or cause.</strong></p> <p>The technological revolutions of broadcast television and radio homogenized the mainstream media even as they provided superficial substitutes for social engagement. The technologies of social media, mobile telephony and narrowcast echo-chambers of uniform opinion have created even more addictive forms of distraction that are not just shredding social connectedness&mdash;they&rsquo;re destroying our ability to form and nurture social bonds, even within the family.</p> <p>This dynamic was explored in a recent essay in <em>The Atlantic</em>, <a href="" target="_blank"><strong>Have Smartphones Destroyed a Generation?</strong></a></p> <p><strong>Any careful observer of present-day family life would add that the addictive draw of mobile telephony has also damaged the parents&rsquo; generation and the family unit itself.</strong></p> <h2><u>Cui Bono: To Whose Benefit?</u></h2> <p><strong>Longtime readers know I often begin an inquiry with the time-tested question: <em>cui bono</em>, to whose benefit? Who has benefited from the erosion of the social fabric and social capital, from the politics of divisiveness and the mass addiction to the technologies of superficial connectedness?</strong></p> <p>While we can take note of soaring corporate profits, and draw a causal connection between these profits and the modern-day &ldquo;always connected to work&rdquo; lifestyle of high-productivity corporate employees, it&rsquo;s difficult to argue that corporations have benefited directly from the loss of social capital that characterizes American life.&nbsp;</p> <p class="rtecenter"><img src="" style="height: 432px; width: 601px;" /></p> <p><strong>Rather, it seems that the corporation&rsquo;s relentless pursuit of narrowly defined self-interest, i.e. <em>maximizing profits by whatever means are available</em>, has laid waste to boundaries between work and home life as <em>collateral damage</em>.</strong></p> <p>In a similar fashion, purveyors of smartphones and the software and content that render them so addictive don&rsquo;t necessarily benefit directly from the destruction of intimate, authentic social bonds, but they certainly have prospered from the feeding of the smartphone addiction. Once again, the loss of authentic social connectedness is <em>collateral damage</em>.</p> <p>While it seems quite clear that political groups have fueled divisiveness to their own benefit, does the state (government in all its forms) benefit from the fraying of the social order? It&rsquo;s difficult to discern a direct benefit to the state, though it might be argued that a fractured populace is easier to control.</p> <p><strong>But the erosion of the social order has gone beyond fracture into <em>disintegration</em>, and it&rsquo;s hard to see how class wars and social disunity benefit the state, which ultimately relies on some measure of social unity for its authority, which flows from the <em>consent of the governed</em>.</strong></p> <h2><u><strong>It&#39;s Time To Take Our Future Back</strong></u></h2> <p>In <a href="" target="_blank">Part 2: Rescuing Our Future</a>, <strong>we focus on the self-evident truth that governments and corporations cannot restore social connectedness and balance to our lives.&nbsp; Only a social revolution that is self-organizing from the bottom-up can do that. </strong>And we detail out the specific steps each of us can and should take to develop the values and skills required to form and maintain authentic social wealth&mdash;the wealth of friendship, of social gatherings, of belonging. It takes courage and independence to swim against the toxic tides of our economy and society. The good news is that true wealth is within reach of everyone. The steps we each need take are clear; it&#39;s just a matter of having the will to invest the time and effort. Do you have it?</p> <p><a href="" target="_blank">Click here to read the report</a>&nbsp;<em>(free executive summary,&nbsp;<a href="" target="_blank">enrollment</a>&nbsp;required for full access)</em></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="280" height="161" alt="" src="" /> </div> </div> </div> Business Civilization Cultural geography Cultural studies Culture ETC mobile telephony Putnam Revolution smartphone smartphones Social capital Social media Social networks Social revolution Structure Technological revolution technology of warfare Trotskyism Sat, 19 Aug 2017 18:22:13 +0000 Tyler Durden 601957 at "Colossal Fraud": Lawsuit Accuses Poland Spring Of Selling Groundwater <p>Ever wonder if that bottled mineral water you just spent several dollars on is really <em>mineral water? </em>According to a bombshell new lawsuit filed this week, at least in the case of one company <em>it isn't. </em></p> <p> A group of bottled water drinkers has brought a class action lawsuit against Nestle, the company which owns Poland Spring, alleging that the Maine business has long deceived consumers by mislabeling common groundwater. The lawsuit was filed on Tuesday in a Connecticut federal court and accuses Nestle Waters North America Inc. of a “<strong>colossal fraud perpetrated against American consumers</strong>” the Bangor Daily News reports. </p> <p>The plaintiffs claim that falsely labeling its "groundwater" product as pure spring water allowed Nestle to sell Poland Spring water at a premium; as a result <strong>the consumers who brought the legal action are seeking at least $5 million in monetary damages for a national class and several state subclasses</strong>. They requested a jury trial. The civil suit was brought by 11 people from the Northeast <strong>who collectively spent thousands of dollars on Poland Spring brand water in recent years</strong>. It seeks millions of dollars in damages for a nationwide class and hinges on whether the sources of Poland Spring water meet the Food and Drug Administration’s definition of a spring. </p> <p>The 325-page lawsuit, which was filed by lawyers from four firms, <strong>claims that none of the company’s Maine water sources meets the federal definition for spring water and that the company has “politically compromised” state regulators. </strong>Rather than spring water, <strong>Nestle Waters is actually purifying and bottling groundwater, some of which comes from sites near waste and garbage dumps, the suit claims. </strong>The legal challenge comes as Nestle is looking to expand its operations in Maine.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>For instance, the suit claims that the company’s wells in Poland, Maine, have never been scientifically proven to be connected to a spring and draw in surface water, which cannot legally be called spring water.<strong> It further alleges that the company has put water from some of these wells through a purification process that disqualifies it as spring water under federal regulations.</strong> </p> <p>&nbsp;</p> <p>The suit makes similar claims about Poland Spring water sources in Hollis, Fryeburg, Denmark, Dallas Plantation, Pierce Pond Township and Kingfield.</p> </blockquote> <p>Poland Spring has gotten away with this deception for years, the suit claims, by co-opting state regulators and interweaving its interests with those of state government. <strong>Since 1998 the company has generated millions of dollars for Maine through licensing agreements, and since 2003 it has had an executive on the governor-appointed body that oversees the state drinking-water regulation enforcement agency, </strong>the suit states.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>The court complaint further says that the Maine Drinking Water Program scientist who approved many of the company’s spring water permits spent a decade working with this executive at a private engineering firm and that the agency failed to get independent proof of the springs’ existence.</p> </blockquote> <p>In response to the lawsuit, a Nestle Waters spokesperson said that its water meets all relevant federal and state regulations on the classification and collection of spring water and that the suit is “an obvious attempt to manipulate the legal system for personal gain.” </p> <p>“The claims made in the lawsuit are without merit. Poland Spring is 100 [percent] spring water.”</p> <p>This is not the first time that Nestle Waters has faced such allegations. In 2003, it settled a class action lawsuit alleging that Poland Spring water doesn’t come from a spring. In that case, the company did not admit the allegation but agreed to pay about $10 million in discounts to consumers and charity contributions. In other words, pulling a page from Wall Street, it neither admitted, nor denied guilt. </p> <p><em>The full lawsuit is below</em></p> <p><iframe src=";view_mode=scroll&amp;access_key=key-SbtvDR1SyEpJVaN9rCtY&amp;show_recommendations=true" 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="600" height="328" alt="" src="" /> </div> </div> </div> Bottled water Drinking water Food and drink Food and Drug Administration Groundwater Hydrology Law Mineral water Natural resources Nestlé Nestlé Waters None Poland Poland Spring Spring state drinking-water regulation enforcement agency UN Court Water Sat, 19 Aug 2017 17:53:15 +0000 Tyler Durden 601953 at Bitcoin Cash Explodes To Record Highs Over $900 - Here's Why <p>After meandering around $300 for the last two weeks,<strong> Bitcoin Cash has rocketed higher in the last few days - now trading at record highs over $900.</strong> As Bitcoin Cash has surged, Bitcoin has been falling (now back below $4000) as <strong>Bitcoin Cash mining profitability becomes more appealing to miners</strong>.</p> <p>Bitcoin Cash has surged to a new record high in the last few days, now triple the market cap of Ripple and over half the market cap of Ethereum...</p> <p><a href=""><img height="317" src="" width="600" /></a></p> <p>&nbsp;</p> <p>And Bitcoin has been sliding...</p> <p><a href=""><img height="314" src="" width="600" /></a></p> <p>&nbsp;</p> <p><u><strong>So just what is going on with BCH? </strong></u><a href="">Coinivore explains</a>... As blocks continue to process, <strong>BCH edges its way closer to the legacy Bitcoin&rsquo;s network mining profitability.</strong></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>&nbsp;It&rsquo;s what could be known as the &ldquo;flippening,&rdquo; and block 479808 is the block to watch if it&rsquo;s going to happen (this weekend),</strong> Coindesk&nbsp;<a href="">reported</a>.</p> <p>&nbsp;</p> <p>Block 479,808 (set for this weekend) will likely <strong>trigger a difficulty adjustment downwards 50%, and if the prices of bitcoin and bitcoin cash stay the same, this means miners will make almost double on bitcoin cash what they would on bitcoin</strong>.</p> <p>&nbsp;</p> <p>As BCH mining profitability becomes more appealing to miners, the chance of other mining pools using hash power for BCH is greater, especially if the new kid on block Bitcoin Cash&rsquo;s markets continue to rise.</p> <p>&nbsp;</p> <p><strong>Now, why would miners abandon the legacy Bitcoin? Because BCH chain&rsquo;s difficulty has also&nbsp;<a href="">dropped</a>, and at the same time the price has risen over 75% in the last two days. As such, Bitcoin cash mining (BCH) is now currently 2% percent more profitable to mine than the legacy Bitcoin (BTC).</strong></p> <p>&nbsp;</p> <p>Another reason is the<strong> legacy Bitcoin blockchain charges higher fees on transactions, </strong>so miners must take into account the extra 1.5 BTC per block on Bitcoin (about $6,000 USD) while Bitcoin Cash offers very low fees under $50 USD.</p> </blockquote> <p><strong>All around BCH just seems like the more attractive opportunity for miners</strong>.</p> <blockquote class="twitter-tweet" data-lang="en"><p dir="ltr" lang="en">The original economic code that led to Bitcoin&#39;s great success is alive and well in the form of <a href="">#BitcoinCash</a>. Watch what happens next: <a href=""></a></p> <p>&mdash; Roger Ver (@rogerkver) <a href="">August 18, 2017</a></p></blockquote> <script async src="//" charset="utf-8"></script><p>Additionally, <a href="">Coindesk notes</a> that <strong>new exchange volume is also helping drive BCH higher</strong>...</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>While both bitcoin and bitcoin cash share a transaction history, there&#39;s at least one major differential that changes their markets &ndash; bitcoin cash didn&#39;t inherent bitcoin&#39;s expansive global exchange network.</p> <p>&nbsp;</p> <p>This means while bitcoin is widely available for trading across continents, only a few major players stepped up early to add&nbsp;Bitcoin Cash.</p> <p>&nbsp;</p> <p>Still, signs suggest more exchanges could soon see a value in doing so. Case in point, the trade volume in bitcoin cash observed during the recent run was largely denominated in the South Korean won today.</p> <p>&nbsp;</p> <p>Yesterday, about $1.2 billion of the $2 billion in total bitcoin cash trade volume, or around 56%, appeared to be transacted in won on just three South Korean exchanges &nbsp;&ndash;&nbsp;Bithumb, Coinone and Korbit&nbsp;&ndash; according to data from CoinMarketCap.</p> <p>&nbsp;</p> <p>Such a strong regional showing could indicate pent up demand &ndash; but whether it&#39;s from sellers seeking to sell, or buyers looking to buy, that remains unclear.</p> <p>&nbsp;</p> <p>Prior to the increase, though, bitcoin cash trading volume was&nbsp;relatively light earlier this week, and it increased roughly tenfold today.</p> </blockquote> <p>Finally, we note that<strong> Faster processing times</strong> may be appealing, as CNBC reports that Bitcoin Cash faster processing is what likely caused&nbsp;<a href="" rel="nofollow" target="_blank">40 percent of investors</a>&nbsp;increasing their bet on it.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="902" height="476" alt="" src="" /> </div> </div> </div> Alternative currencies Bitcoin Bitcoin Bitcoin scalability problem Blockchains Business CoinDesk Cryptocurrencies Currency Economics of bitcoin Exonumia Twitter Twitter Sat, 19 Aug 2017 17:49:19 +0000 Tyler Durden 601956 at David Stockman Warns "Don't Forget About The Red Swan" <p><em><a href="">Authored by David Stockman via The Daily Reckoning, </a></em></p> <p>Given the anti-Trump feeding frenzy, we continue to believe that a Swan is on its way bearing Orange. But if that&rsquo;s not enough to dissuade the dip buyers,<strong> perhaps the impending arrival of the Red Swan will at least give them pause.</strong></p> <p>The chart below comprises a picture worth thousands of words. <strong>It puts the lie to the latest Wall Street belief that the global economy is accelerating and that surging corporate profits justify the market&rsquo;s latest manic rip.</strong></p> <p><strong>What is actually going on is a short-lived global credit/growth impulse emanating from China. </strong>Beijing panicked early last year and opened up the capital expenditure (CapEx) spigots at the state-owned enterprises (SOEs) out of fear that China&rsquo;s great machine was heading for stall speed at exactly the wrong time.</p> <p>The 19th national communist party Congress scheduled for late fall of 2017. This every five year event is the single most important happening in the Red Ponzi. This time the event is slated to be the coronation of Xi Jinping as the second coming of Mao.</p> <p><strong>Beijing was not about to risk an economy fizzling toward a flat line before the Congress. </strong>Yet that threat was clearly on the horizon as evident from the dark green line in the chart below which represents total fixed asset investment.</p> <p>The latter is the spring-wheel of China&rsquo;s booming economy, but it had dropped from 22% per annum growth rate when Mr. Xi took the helm in 2012 to 10% by early 2016.</p> <p><strong>There was an eruption as dramatized in the chart. CapEx growth suddenly more than doubled in the one-third of China&rsquo;s economy that is already saturated in excess capacity. &nbsp;The state owned enterprises (SOE) in steel, aluminum, autos, shipbuilding, chemicals, building equipment and supplies, railway and highway construction etc boomed.</strong></p> <p>It was as if a switch had been flicked on by Mr. Xi himself, SOE CapEx soared back toward the 25% year-over-year rate by mid-2016, keeping total CapEx hugging the 10% growth line.</p> <p><strong>However, you cannot grow an economy indefinitely by building pyramids or any other kind of low-return/no return investment &ndash; even if the initial growth spurt lasts for years as China&rsquo;s had.</strong></p> <p>Ultimately, the illusion of Keynesian spending gets exposed and the deadweight costs of malinvestments and excess capacity exact a heavy toll.</p> <p>If the investment boom that was financed with reckless credit expansion is not enough, as was the case in China where debt grew from $1 trillion in 1995 to $35 trillion today, <strong>the morning-after toll is especially severe and disruptive</strong>. <u><strong>&nbsp;This used to be called a &ldquo;depression.&rdquo;</strong></u></p> <p><img alt="China Fixed Asset Investment" src="" style="height: 330px; width: 600px;" /></p> <p><strong>China&rsquo;s propagated spurt in global trade and commodities was artificial and short-term. It was done to flatter China&rsquo;s rulers at the 19th party congress.</strong></p> <p>Now that a favorable GDP glide path has been assured, China&rsquo;s planners and bureaucracy are already back at it trying to find some way to reel in its runaway credit growth and bloated economy before it collapses.</p> <h2><u>Downside Surprises in China Are Virtually Baked In</u></h2> <p>The sell-by date has expired on this latest China credit impulse, as evident in the chart below. During the first quarter of this year, total social financing (bank credit plus shadow banking loans) reached the incredible rate of $4 trillion per annum. That&rsquo;s nearly one-third of China&rsquo;s entire GDP.</p> <p>The figure scared the daylights out of leadership in Beijing, who have now moved forcefully to reel in China&rsquo;s debt machine.</p> <p><strong>What is coming down the pike is the great China Debt Retrenchment. &nbsp;Expect a global braking motion that will get underway once Mr. Xi dramatically consolidates his power at the 19th party congress.</strong></p> <p><img alt="China Total Social Financing" src="" style="height: 378px; width: 600px;" /></p> <p>This has the potential to drastically weaken the global economy &ndash; and the impact on corporate profits should not be underestimated.</p> <h2><u>The Red Swan Has Now Gone Berserk</u></h2> <p><strong>Half of the world&rsquo;s GDP growth since the 2008 crisis has been in China, and that, in turn, was purchased by the greatest credit eruption in recorded history.</strong></p> <p>As China&rsquo;s nominal GDP was more than doubling from $4.6 trillion in 2008 to $11.2 trillion in 2016, its national leverage ratio soared from 175% of GDP to 300% in less than a decade.</p> <p><strong>There&rsquo;s reason to seriously doubt that Beijing can bring the Red Ponzi to a soft landing. &nbsp;It cannot and will not permit the nation&rsquo;s debt load to quadruple again during the next eight years, meaning that China&rsquo;s days as the world&rsquo;s ultimate stimulus machine are over.</strong></p> <p><img alt="China Red Ponzi Debt to GDP Ratio 2017" src="" style="height: 400px; width: 600px;" /></p> <p><strong>The fading of the most recent China growth impulse will soon reveal that most countries, to adapt Warren Buffet&rsquo;s famous metaphor, have been swimming naked from a fiscal perspective. </strong>It has left the world vulnerable to a renewed wave of funding crises as the ECB and other central banks attempt to launch monetary normalization.</p> <p>In sum, during the last 19 months the Red Ponzi propagated a false upturn in the global economy that is already decisively reversing. This comes at the same time that central banks of the major developed world economies are finally bringing their printing presses to a halt.</p> <p>The major central bankers have finally recognized that at $22 trillion on central bank balance sheets have become egregiously extended. &nbsp;<strong>China is the epicenter of the world&rsquo;s two decade plunge into central bank monetary fraud and credit explosion.</strong> &nbsp;They have deformed and destabilized the very warp and woof of the global economy.</p> <p><em><strong>So, yes, even as the Orange Swan stumbles toward the Donald&rsquo;s White House, there is a Red Swan following closely behind.</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="793" height="387" alt="" src="" /> </div> </div> </div> Sat, 19 Aug 2017 17:20:38 +0000 Tyler Durden 601955 at Bannon: "The Trump Presidency That We Fought For Is Over" <p>In his first interview shortly after the White House announced that it was parting ways with Trump's chief strategist, Steve Bannon told the <a href="">Weekly Standard </a>on Friday afternoon that "<strong>the Trump presidency that we fought for, and won, is over</strong>." After confirming his departure Bannon said that “we still have a huge movement, and we will make something of this Trump presidency. But that presidency is over. It’ll be something else. And there’ll be all kinds of fights, and there’ll be good days and bad days, <strong>but that presidency is over.”</strong></p> <p>In his interview with the conservative publication, Bannon predicted that in the wake of his departure, Trump's administration would "be much more conventional" as his absence from the White House would make it “much harder” for Trump to pave a way forward on issues like “economic nationalism and immigration.” He also predicted that republicans would "moderate" Trump:</p> <p>“I think they’re going to try to moderate him,” he says. “I think he’ll sign a clean debt ceiling, I think you’ll see all this stuff. His natural tendency—and I think you saw it this week on Charlottesville—his actual default position is the position of his base, the position that got him elected. I think you’re going to see a lot of constraints on that. I think it’ll be much more conventional.”</p> <p>In Bannon’s view, <strong>his departure is not a defeat for him personally but for the ideology he’d urged upon the president, </strong>as reflected in Trump’s provocative inaugural address in which he spoke of self-dealing Washington politicians, and their policies that led to the shuttered factories and broken lives of what he called “American carnage.” Bannon co-authored that speech (and privately complained that it had been toned down by West Wing moderates like Ivanka and Jared).</p> <p>“Now, it’s gonna be Trump,” Bannon said. “<strong>The path forward on things like economic nationalism and immigration, and his ability to kind of move freely . . . I just think his ability to get anything done—particularly the bigger things, like the wall, the bigger, broader things that we fought for, it’s just gonna be that much harder</strong>.”</p> <p>He also warned that things are about to get worse for Trump as even more people depart his side, warning of a 'jailbreak' of moderate Republicans. </p> <p>“There’s about to be a jailbreak of these moderate guys on the Hill”—a stream of Republican dissent, which could become a flood. Bannon also said that he once confidently believed in the prospect of success for that version of the Trump presidency he now says is over. </p> <p>Asked what the turning point was, he says, “It’s the Republican establishment. The Republican establishment has no interest in Trump’s success on this. They’re not populists, they’re not nationalists, they had no interest in his program. Zero. It was a half-hearted attempt at Obamacare reform, it was no interest really on the infrastructure, they’ll do a very standard Republican version of taxes.</p> <p>"What Trump ran on- border wall, where is the funding for the border wall, one of his central tenets, where have they been? Have they rallied around the Perdue-Cotton immigration bill? On what element of Trump's program, besides tax cuts-which is going to be the standard marginal tax cut-where have they rallied to Trump's cause? They haven't."</p> <p>As for what happens next, as reported late on Friday, Bannon said that he is eager to get back to Breitbart and lead the opposition from there. </p> <p><strong>"Now I’m free. I’ve got my hands back on my weapons,</strong>" he said. "<strong>Someone said, ‘it’s Bannon the Barbarian.’ I am definitely going to crush the opposition. There’s no doubt. I built a f-cking machine at Breitbart. And now I’m about to go back, knowing what I know, and we’re about to rev that machine up. And rev it up we will do</strong>.” </p> <p>Specifically, <strong>the target of his attacks will be the 'globalists' and liberals he believes have taken over the White House. </strong>They include National Security Adviser H. R. McMaster, advisor Gary Cohn, Trump's daughter Ivanka and son-in-law Jared Kushner.</p> <p>* * *</p> <p>With Bannon's departure conceding control of Trump's inner circle to the so-called "Goldman globalists", the question is how Trump's message will evolve in the coming days with the "nationalist" element purged. With Trump having been granted the option of sounding like a more centrist President, will he continue with his usual rhetoric. Bloomberg is convinced that the answer is "<a href="">more of the same</a>" especially since Trump won't risk losing his core base, although that may no longer be in his control, especially if Bannon is about to unleash a stinging attack on Trump's inner circle. </p> <p>For the clearest sign of what Trump's post-Bannon posture - and administration - will look like, look no further than the coming debt ceiling negotiation (and/or crisis): on Friday, <a href="">Goldman raised its odds of a government shutdown to 50</a>%, a fact which also spooked the market sending the S&amp;P to session lows at the close. If Trump is unable to build some political goodwill in the coming days on the back of the Bannon departure, those odds will steadily grow to 100% over the next few weeks. </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="433" alt="" src="" /> </div> </div> </div> Alt-right American people of German descent Debt Ceiling default Donald Trump Donald Trump presidential campaign First 100 days of Donald Trump's presidency Jared Kushner national security Nationalism Obamacare Politics S&P Steve Bannon Trump's administration United States White House White House Sat, 19 Aug 2017 16:51:40 +0000 Tyler Durden 601958 at CalExit 3.0: New Petition Calls For Cali Secession...3rd Time's A Charm? <p>A new group of CalExit activists are hoping they can secede (see what we did there?) where two predecessor groups failed in efforts to force California's independence from the United States of America.&nbsp; Ironically, you would think that removing California from the union would be something that Republicans and Democrats could actually agree we remained perplexed as to why this process is proving so difficult.</p> <p>So, what's their plan?&nbsp; Well, rather than pursue a ballot measure, which requires 585,407 signatures, the CalExit 3.0 group has <a href="">petitioned California's Attorney General</a> to call for a Constitutional Convention of the States so they can, among other things, <strong>amend the U.S. Constitution to allow for a "clear and reasonable path for individual States to become independent, so that CA can secede, if they so choose."</strong></p> <p>But, secession isn't all they're after...the CalExit 3.0 group enumerated a litany of Leftist grievances which they would like to address with constitutional's just a couple of our favorites (spelling mistakes below are not ours):<strong><br /></strong></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>1. Given that "California is - and must always be - a refuge of justice and opportunity for people of all ages, backgrounds and aspirations - regardless of how you look, where you live, what language you speak, or who you love;" </p> <p>&nbsp;</p> <p>2. <strong>Given that the world has changed dramatically since 1787,</strong> and over the next Century California will continue to invent the future, be it in Entertainment, IT, Medical discoveries, Environmental Protection, Global Climate Disaster Mitigation, or Civil Rights &amp; Liberties;</p> <p>&nbsp;</p> <p>3. <strong>Given that a Californian's vote has one seventieth the weight of a citizen of Wyoming in the US Senate and has become functionally irrelevant in presidential elections;</strong></p> <p>&nbsp;</p> <p>5. Given that the US federal govermnent has seen increasing gridlock and citizens across the country feel poorly represented by the federal government; </p> <p>&nbsp;</p> <p>6. Given that California's government and people increasingly want to chart their own path on issues ranging from - but not limited to - immigration, civil representation and environmental protection and, given the US Constitution expressly designates states as sovereign entities;</p> <p>&nbsp;</p> <p>20. Given that <strong>Californian's believe in the equality and inherent dignity of all persons;</strong></p> <p>&nbsp;</p> <p>22. <strong>Given that California was seized undemocratically and annexed by the US in 1846 in an act of naked imperial aggression;</strong></p> </blockquote> <p><img src="" alt="CalExit" width="462" height="339" /></p> <p>&nbsp;</p> <p>Not surprisingly, t<strong>he petition also calls for a whole bunch of very expensive entitlements</strong>...</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>8. Provide free, reliable and safe Universal healthcare for all citizens, regardless of medical history.</p> <p>&nbsp;</p> <p>9. Provide free, high quality, Universal education.</p> </blockquote> <p>...<strong>but then also calls for Federal taxes to be abolished</strong>...</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Modify Federal tax law to render Federal taxes negotiable:</p> <p>&nbsp;</p> <p>1. State tax becomes primary.</p> <p>&nbsp;</p> <p>2. Federal tax secondary and negotiable, based on the needs of each State - to be determined by each State and the voters.</p> <p>&nbsp;</p> <p>3. State govermnent negotiates Federal Taxes on its voters, and their respective communities, behalf to fairly and equally represent voters' values and needs, and those of their respective natural environments.</p> </blockquote> <p><strong>...which we presume means that they're planning to rely on the entitlement fairy?</strong></p> <!-- .mcclatchy-embed{position:relative;padding:40px 0 56.25%;height:0;overflow:hidden;max-width:100%}.mcclatchy-embed iframe{position:absolute;top:0;left:0;} --><!-- .mcclatchy-embed{position:relative;padding:40px 0 56.25%;height:0;overflow:hidden;max-width:100%}.mcclatchy-embed iframe{position:absolute;top:0;left:0;} --><div class="mcclatchy-embed"><iframe src="" width="600" height="337" frameborder="0"></iframe></div> <p>&nbsp;</p> <p><em><strong>Here is the <a href="">full petition filed with the Attonery General's office</a>:</strong></em></p> <p><iframe src=";view_mode=scroll&amp;access_key=key-bJ2w2Tnd6jglOvWHiwIm&amp;show_recommendations=true" 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="1275" height="900" alt="" src="" /> </div> </div> </div> CalExit California California's government federal government Federal Tax Partition and secession in California Politics Politics of California Tax Taxation in the United States United States United States Senate Yes California Sat, 19 Aug 2017 16:06:14 +0000 Tyler Durden 601946 at