http://www.zerohedge.com/fullrss2.xml/article/article/The%20UK%27s%20oil%20industry%20is%20in%20%22crisis%22%20as%20prices%20drop%2C%20a%20senior%20industry%20leader%20has%20told%20the%20BBC.%20%20Oil%20companies%20and%20service%20providers%20are%20cutting%20 en France's Macron Covers For Saudi Aggression http://www.zerohedge.com/news/2017-11-20/frances-macron-covers-saudi-aggression <p><em><a href="https://www.strategic-culture.org/news/2017/11/20/france-macron-covers-for-saudi-aggression.html">Authored by Finian Cunningham via The Strategic Culture Foundation,</a></em></p> <p>France&rsquo;s&nbsp;<a href="http://www.france24.com/en/20171115-macron-invites-lebanon-ex-premier-resigned-saad-hariri-family-france" target="_blank">invitation</a>&nbsp;to beleaguered Lebanese premier Saad Hariri for him and his family to spend &ldquo;a few days in Paris&rdquo; has been <strong>viewed as French President Emmanuel Macron stepping in with deft soft power to resolve tensions between Saudi Arabia and Lebanon.</strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/19/20171120_macron.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/19/20171120_macron.jpg" style="width: 600px; height: 306px;" /></a></p> <p><strong>Less charitably, what Macron is really doing is giving cynical cover to the Saudi rulers for their extraordinary acts of aggression towards Lebanon and their violation of that country&rsquo;s sovereignty.</strong></p> <p>Two of Hariri&rsquo;s children were left in Saudi capital Riyadh while he visited France over the weekend. Were they being used as hostages by the Saudis to ensure that Hariri maintains the Saudi spin on events? Certainly, the arrangement raises suspicions, but the French president sought instead to affect a &ldquo;normal&rdquo; nothing-is-unusual appearance.</p> <p>Lebanese President Michel Aoun last week publicly&nbsp;<a href="http://www.presstv.com/Detail/2017/11/15/542274/Lebanon-Hariri-Saudi-Arabia" target="_blank">accused</a>&nbsp;Saudi Arabia of holding Hariri in Riyadh against his will. Aoun said the Saudi rulers were violating international law by detaining Hariri and forcing his resignation as prime minister of Lebanon. Such acts were tantamount to aggression, said President Aoun.</p> <p><strong>Yet Macron has said nothing about Saudi interference. He has instead turned reality on its head by censuring Iran for regional &ldquo;aggression&rdquo; and thereby backing Saudi claims that Iran is supplying ballistic missiles to Yemen. Iran swiftly condemned Macron for &ldquo;stoking regional tensions&rdquo;.</strong></p> <p>Credit goes to President Aoun for speaking out plainly, telling it like it is and expressing what many Lebanese citizens and many other observers around the world have concluded. The whole debacle is an outrageous affront to Lebanon and international law by the Saudi rulers, when it is taken into consideration Hariri&rsquo;s hasty summoning to Saudi capital Riyadh earlier this month, his subsequent televised resignation speech on Saudi TV, and his long-delayed sojourn in that country. What is even more despicable is that the Saudi interference in the sovereign affairs of Lebanon is threatening to re-ignite a civil war within the small Mediterranean country, and, possibly worse, a war across the region with Iran.</p> <p><strong>Hariri has claimed in a later media interview, held in Saudi Arabia, and in reported communications with family and friends who are back in Lebanon, that he was not under duress while staying in Saudi Arabia. That claim beggars belief given the bizarre circumstances of Hariri&rsquo;s sudden departure and his protracted nearly two-week stay in Saudi Arabia.</strong></p> <p>In any case, the president of Lebanon, Michel Aoun, has concluded that something is badly amiss in the saga, and he has explicitly accused Saudi rulers of violating his country&rsquo;s sovereignty.</p> <p>Therefore, if there were any principle or adherence to international law, <strong>the actions of Saudi Arabia should be condemned categorically by the international community, the UN, the European Union and France in particular owing to its historic relations with Lebanon as the former colonial power before independence in 1943.</strong></p> <p>But no. What we have instead are either shameful silence from Washington, or mealy-mouthed statements from the EU. The EU&rsquo;s foreign policy chief Federica Mogherini issued a vague statement warning against &ldquo;foreign interference&rdquo; in the affairs of Lebanon. What kind of cowardly circumlocution is that?</p> <p><em><u><strong>Lebanon&rsquo;s prime minister Saad Hariri was, in effect, detained by Saudi Arabia and forced to tender his resignation from public office as a matter of ultimatum.</strong></u></em> It has been reliably reported that the Wahhabi Saudi rulers were exasperated with the Shia group Hezbollah being part of the coalition government in Beirut. Hariri is a Saudi-sponsored Sunni politician who is antagonistic to Hezbollah and by extension, Iran. But apparently, he was not sufficiently hostile, in the view of his Saudi backers. Hence, Hariri was summoned to Riyadh and ordered to resign on November 4. (The defeat of the Saudi-sponsored covert terror war in Syria no doubt was a factor too in the timing.)</p> <p><strong>France&rsquo;s President Macron is playing a particularly slippery game of pandering and expedience towards the Saudi despots.</strong></p> <p>As the Washington Post&rsquo;s WorldView briefing reported last week: &ldquo;French President Emmanuel Macron told reporters that it was important to dispel the implication that Hariri was a Saudi prisoner.&rdquo;</p> <p>The newspaper goes on to quote Macron saying rather vacuously: &ldquo;We need to have leaders who are free to express themselves. It&rsquo;s important that [Hariri] is able to advance the political process in his country in the coming days and weeks.&rdquo;</p> <p>The question should be asked: <u><strong><em>why is it important for Macron to &ldquo;dispel the implication that Hariri was a Saudi prisoner&rdquo;?</em></strong></u></p> <p>From virtually all accounts, including that of Lebanese President Michel Aoun whose view should surely be paramount here, that is exactly what Hariri was made by the Saudis &ndash; a prisoner.</p> <p>Three days before his summoning to Riyadh and his scripted resignation speech on November 4 &ndash; in which Hariri claimed with incredible drama that he was in danger of an assassination plot by Hezbollah and its ally Iran &ndash; it was reported that Hariri was having dinner with the French culture minister in Beirut. During their meal, he received a phone call. His demeanor darkened, and immediately departed from the table for a flight to Riyadh. Without the company of aides, Hariri was met on his arrival by Saudi officials who took his mobile phone from him. He was not greeted by senior Saudi rulers like Crown Prince Mohammed bin Salman, which would have been customary diplomatic protocol.</p> <p><strong>Everything about the next two weeks of Hariri&rsquo;s stay in Saudi Arabia signals a de facto detention against his will.</strong> Admittedly, he made a brief flight to the United Arab Emirates during the time period, which was claimed by the Saudis to be proof of his free movement. The UAE rulers are closely aligned with the House of Saud, and besides Hariri was soon back in his Riyadh residence, from where he continued to tweet to friends that he was &ldquo;fine&rdquo;.</p> <p><u><strong>This is nothing but a sham. </strong></u>The stark facts are that Saudi Arabia has brazenly interfered in the internal affairs of Lebanon, trying to force its prime minister to step down. Furthermore, the Saudi rulers have accused Lebanon of &ldquo;acts of war&rdquo; by allegedly supporting Houthi rebels in Yemen; the Saudis have also ordered their nationals to leave Lebanon; and there are&nbsp;<a href="http://english.almanar.com.lb/387198" target="_blank">reports</a>&nbsp;emerging of the Saudis now pushing to suspend Beirut from the Arab League. This is reckless incendiary behavior by the Saudi rulers.</p> <p><strong>Should we be surprised though? Saudi Arabia has shown absolute criminal disregard for international law over its bombing and genocidal blockade of Yemen, where humanitarian aid groups have&nbsp;<a href="http://www.independent.co.uk/news/world/middle-east/yemen-war-saudi-arabia-children-deaths-famine-disease-latest-figures-a8057441.html?S2ref=696322" target="_blank">warned</a>&nbsp;that 50,000 children may die this year due to enforced deprivation from the nearly three-year American and British-backed Saudi war on Yemen.</strong></p> <p>The absolute Saudi monarchy has also gone on an internal rampage of arresting its own government ministers and other businessmen in an audacious power-grab under the guise of &ldquo;an anti-corruption drive&rdquo;. Moreover, Saudi rulers have been instrumental in organizing a legally dubious trade and diplomatic blockade of Qatar over trumped claims that the latter is a stooge for Iran and singularly supporting terrorists (this from the Saudis who have bankrolled terrorist proxies to overthrow the government in Syria.)</p> <p><strong>The criminality and rogue conduct of Saudi Arabia is legion and brazenly in your face.</strong></p> <p>That is why the so-called &ldquo;international community&rdquo;, the UN, Washington, the European Union, and France in particular are deserving of withering censure. Their mealy-mouthed muted statements on Saudi misconduct towards Lebanon are a disgrace. They are complicit in wanton lawlessness by their pandering to Saudi despots.</p> <p>But France&rsquo;s Emmanuel Macron has emerged as the prime disgrace. His invitation to Saad Hariri and his family to come to France is a cynical move to give cover to the Saudi despots. Tellingly, on the announcement of the invitation, Macron&nbsp;<a href="http://www.bbc.com/news/world-middle-east-42006206?ocid=global_bbccom_email_16112017_top+news+stories" target="_blank">said</a>&nbsp;that &ldquo;it was not an offer of exile&rdquo;. That&rsquo;s Macron making it all sugary nice as pie.</p> <p>On Friday, the day before Hariri arrived in Paris, Macron actually accused Iran of &ldquo;aggression&rdquo; and has called for sanctions on Iran&rsquo;s ballistic missile defense program. So, Macron, sneakily, is giving the Saudi narrative succor, and blaming Iran, instead of condemning Riyadh for its flagrant interference and aggression.</p> <p><strong>Again, by inviting Hariri to Paris, Macron is indulging the Saudi-Hariri charade that all is &ldquo;normal&rdquo; &ndash; when in reality the sordid shenanigans over the past two weeks amount to an outrageous and very grave violation of international law and of a neighboring country&rsquo;s sovereignty by the Saudis.</strong></p> <p>With this kind of cynical &ldquo;diplomacy&rdquo;, Macron is showing that France is far from capable of having any leadership role or moral authority in the Middle East or the world.</p> <p>Of course, France&rsquo;s vested economic interests with the Saudi despots, from arms sales to energy and infrastructure projects, are central to Macron&rsquo;s expedient calculations.</p> <p><strong>Macron&rsquo;s ambitions of engendering some kind of renaissance of France as a global power are futile and nothing but sheer vanity. The cowardice of the French president in the face of Saudi aggression towards Lebanon shows that Macron and his pretensions of &ldquo;global power&rdquo; are a puff of cheap cosmetic powder.</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="620" height="316" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20171120_macron.jpg?1511236698" /> </div> </div> </div> http://www.zerohedge.com/news/2017-11-20/frances-macron-covers-saudi-aggression#comments Aid groups Arab League cellular telephone customary diplomatic protocol European Union European Union France Hizballah Iran Lebanese Sunni Muslims Lebanon Mediterranean Member states of the Arab League Member states of the Organisation of Islamic Cooperation Member states of the United Nations Michel Aoun Middle East Middle East Middle East Middle Eastern countries Newspaper Politics Politics of Lebanon Reality Renaissance Saad Hariri Saudi Arabia Saudi Arabia Strategic Culture Foundation United Nations War Western Asia Tue, 21 Nov 2017 08:10:00 +0000 Tyler Durden 607641 at http://www.zerohedge.com New Gold-Backed Debit Card Launched In Partnership With Lloyds Bank & MasterCard http://www.zerohedge.com/news/2017-11-20/new-gold-backed-debit-card-launched-partnership-lloyds-bank-mastercard <p><strong>In recent years, there has been a major debate about the respective merits of gold versus Bitcoin, even though many, not all, gold bulls are also supporters of the latter. </strong>Gold advocates generally view favourably Bitcoin&rsquo;s inherent characteristics of decentralisation, finite supply and ability to operate (so far) outside of the usual interference by western central banks. Having said that, the launch of Bitcoin futures on the CME in the coming weeks could lead to naked shorting of &ldquo;paper Bitcoin&rdquo; by any parties, including central banks and large commercial banks, who deem capping of the Bitcoin price necessary. As we discussed last week in <a href="http://www.zerohedge.com/news/2017-11-17/financial-times-sell-bitcoin-because-market-about-become-civilised">&quot;Financial Times: Sell Bitcoin Because The Market Is About To Become &quot;Civilized&quot;</a>, this could align Bitcoin with one of the major issues which has held the gold market hostage for years, time will tell.</p> <p>While many gold investors remain entrenched in the view that gold will (eventually) prove to be the better store of value, one thing many would acknowledge is that Bitcoin is likely to evolve into a superior means of payment. <strong>However, that could be in the process of changing.</strong></p> <p><strong>A fintech start up is partnering with some financial heavyweights to create a payments system backed by physical &ndash; not paper &ndash; gold. </strong>According to the <a href="https://www.ft.com/content/cb177256-cd1b-11e7-9dbb-291a884dd8c6">Financial Times</a>.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>The world&rsquo;s oldest currency is being brought into the digital age with the launch of a debit card and app that will allow people to pay for goods in gold. </strong></p> <p>&nbsp;</p> <p>Fintech group Glint has teamed up with Lloyds Banking Group in the UK and MasterCard to create <strong>an app that enables people to load credit in various currencies, which can then be used to buy a portion of a physical gold bar.</strong> Customers use the app at the checkout to select whether to pay in a currency or gold, before transacting with their MasterCard.</p> </blockquote> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>The development marks the first time people in the UK and overseas can own just a portion of a gold bar through an app, which can then be used in mobile and debit card-based payments.<strong> The app also allows people to send gold to peers in the form of a digital payment.</strong> Jason Cozens, Glint&rsquo;s chief executive and co-founder, said: &ldquo;Everyone is familiar with gold as one of society&rsquo;s oldest means of exchange, its universal acceptance, its reliability, its history as a store of wealth and as a means of underpinning the value of &lsquo;paper&rsquo; currencies. &ldquo;Unlike paper currencies, gold can&rsquo;t be wiped out, devalued or corrupted.&rdquo;</p> </blockquote> <p><a href="http://www.zerohedge.com/sites/default/files/images/user235761/imageroot/2017/11/04/glint2_0.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user235761/imageroot/2017/11/04/glint2_0_0.png" style="width: 500px; height: 264px;" /></a></p> <p>If you&rsquo;ve been watching carefully Glint (website is glintpay.com) has been working towards this moment for some time. <a href="https://techcrunch.com/2017/08/10/glint/">The Crunch</a> reported a capital raising in August this year, noting the impressive list of backers.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>Glint, a stealthy London fintech startup that promises a new &ldquo;global currency,&rdquo; has raised &pound;3.1 million from a plethora of individual backers in the financial services and asset management space, alongside early-stage investor Bray Capital.</strong></p> </blockquote> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>They comprise Haruko Fukuda, former CEO of the World Gold Council and NED of Investec Bank; Oliver Bolitho, formerly Chairman of Goldman Sachs Asset Management Asia; Hugh Sloane, co-founder of asset manager Sloane Robinson; and Lord Flight Of Worcester, formerly of Guinness Flight Global Asset Management.</p> </blockquote> <p>Other supporters of the new app include the Tokyo Commodity Exchange, and NEC Capital Solutions, a technology integration company. The co-founder and COO of Glint, Ben Davies (right in the photo below), is well known to us for his media appearances - often lambasting manipulation of the gold price &ndash; and for running the precious metals investment fund, Hinde Capital. The CEO and co-founder, Jason Cozens, also has gold market experience, <strong>having set up &ldquo;GoldMadeSimple.com, a website that allows investors to buy and store physical gold. </strong>Additionally, he set up two ecommerce and online marketing businesses.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user235761/imageroot/2017/11/04/glint.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user235761/imageroot/2017/11/04/glint_0.jpg" style="width: 500px; height: 322px;" /></a></p> <p>In terms of how the service works, the FT reports.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>Glint is working with Lloyds in the UK as the deposit holder for customers storing money on their app. When a customer decides to buy gold through the app, this is used to purchase part of a gold bar that is physically allocated in vaults in Switzerland. The app will initially be available in the UK and Europe from Monday before being rolled out in Asia and the US next year.</strong></p> </blockquote> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Mr Davies said the app <strong>helps to &ldquo;democratise&rdquo; gold by opening access to people who might not be able to afford to buy a whole bar, rather than the commodity being the &ldquo;preserve of the wealthy&rdquo;.</strong> He added: &ldquo;The advent of electronic wallets and faster payments through technology means we&rsquo;re able to use gold in the electronic payment system.</p> <p>&nbsp;</p> <p><strong>&ldquo;We believe over next few decades people will need the ability to protect their money by owning gold and have the ability to spend it.</strong></p> </blockquote> <p>We doubt that we&rsquo;ll have to wait two decades before the vast majority of people will need to protect the value of their money. It could be a matter of months, so Glint&rsquo;s new service might prove timely. Here are some further thoughts from Davies in the FT article.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Glint&rsquo;s new service is riding the wave of alternative payments, such as bitcoin, as more people seek payment methods that can store value in a way that differs from traditional currencies. Ben Davies, a co-founder of Glint, said: &ldquo;We want to create a fairer form of money whereby we give you choice and control over how you protect your money in an era where central banks issue more currency, and so the value of your currency is falling.&rdquo;</p> </blockquote> <p><strong><em>So, is the question gold, Bitcoin or both?</em></strong><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="259" height="194" alt="" src="http://www.zerohedge.com/sites/default/files/images/user235761/imageroot/gold.jpg?1511180379" /> </div> </div> </div> http://www.zerohedge.com/news/2017-11-20/new-gold-backed-debit-card-launched-partnership-lloyds-bank-mastercard#comments Alternative currencies Bitcoin Bitcoin Business Central Banks Cryptocurrencies Currency Digital currency E-commerce Economics of bitcoin Finance Financial cryptography Financial technology goldman sachs Goldman Sachs Goldman Sachs Asset Management Lloyds Money NED Online wallet Precious Metals Switzerland World Gold Council World Gold Council Tue, 21 Nov 2017 07:35:00 +0000 Tyler Durden 607573 at http://www.zerohedge.com Britain's Gravest Economic Challenge Isn't Brexit http://www.zerohedge.com/news/2017-11-20/britains-gravest-economic-challenge-isnt-brexit <p><a href="https://www.reuters.com/article/us-wallace-productivity-commentary/commentary-britains-gravest-economic-challenge-isnt-brexit-idUSKBN1DK05N"><em>Authored by Paul Wallace, op-ed via Reuters.com,</em></a></p> <p><strong>Few British budgets have mattered as much as the one that Philip Hammond will deliver to the House of Commons on Nov. 22.</strong></p> <p>The chancellor of the exchequer must shore up Theresa May&rsquo;s perilously shaky government ahead of a vital Brexit summit of European leaders in mid-December. At the same time Hammond has to keep a grip on the public finances.</p> <p><strong>But the gravest challenge he faces is economic: Britain&rsquo;s persistent productivity blight.</strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/19/20171120_brit.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/19/20171120_brit_0.jpg" style="width: 600px; height: 337px;" /></a></p> <p><strong>Productivity &ndash; output per hour worked &ndash; is the mainspring of economic growth. </strong></p> <p>In the decade before the financial crisis of 2007-08 productivity was increasing in Britain by just over 2 percent a year, <a href="https://www.ons.gov.uk/economy/economicoutputandproductivity/productivitymeasures/datasets/internationalcomparisonsofproductivityfirstestimates">outpacing the average</a> for the other economies of the G7. But since the crisis British performance has been dismal. Although productivity <a href="https://www.ons.gov.uk/economy/economicoutputandproductivity/productivitymeasures/articles/gdpandthelabourmarket/julytoseptember2017">jumped in the third quarter</a> of 2017, prolonged weakness means that it is barely higher than its pre-crisis peak a decade ago. The recovery in GDP has been driven overwhelmingly by more labor input, a source of growth that is running dry &ndash; not least since the vote to leave the European Union delivered a message to curb immigration.</p> <p><strong>Other advanced economies have <a href="https://www.imf.org/en/News/Articles/2017/04/03/sp040317-reinvigorating-productivity-growth">also experienced setbacks</a> to productivity growth following the financial crisis. Where Britain stands out is in the severity of its reverse.</strong> The shortfall in productivity is the main reason <a href="https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/articles/supplementaryanalysisofaverageweeklyearnings/latest">real wages</a> are now 4 percent lower than 10 years ago, a potent reason why the leave campaign prevailed in the Brexit referendum.</p> <p>Productivity is so central to prosperity and to macroeconomic management &ndash; by determining how fast the economy can sustainably grow &ndash; that a gaggle of economic researchers have been busy in their labs trying to diagnose the now decade-long disease. Early detective work highlighted the impact of the financial crisis itself, which was especially severe in Britain. This <a href="http://www.bankofengland.co.uk/archive/Documents/historicpubs/speeches/2012/speech599.pdf">held back productivity</a> by throttling bank credit to new potentially fast-growing ventures and by jamming up the usual way in which capital moves from declining to advancing sectors.&nbsp;</p> <p>But as the crisis has receded and British banks have become better capitalized this explanation is less convincing.<strong> Longer-term forces appear to be in play in Britain and elsewhere. Firms at the technological frontier continue to forge ahead in raising productivity. However, the diffusion of their <a href="https://www.brookings.edu/wp-content/uploads/2016/09/wp24_andrews-et-al_final.pdf">best practices within economies</a> has slowed. An aging workforce is now acting as a drag. And the contribution to productivity from improved educational attainment <a href="https://www.imf.org/en/Publications/Staff-Discussion-Notes/Issues/2017/04/03/Gone-with-the-Headwinds-Global-Productivity-44758">is falling.</a></strong></p> <p>One reason the productivity setback has been particularly severe in Britain is that its apparently robust performance before the crisis was overstated and unsustainable. Banking activities ballooned on the basis of what turned out to be economically and socially harmful practices such as risky securitizations. Despite making up less than a tenth of the economy, the financial sector <a href="http://www.bankofengland.co.uk/publications/Documents/speeches/2017/speech968.pdf">has been responsible</a> for nearly a third of the productivity slowdown. <strong>Longstanding weaknesses in qualifications and skills have also become more damaging as business becomes more knowledge-based.</strong> Over a quarter of British working-age adults <a href="http://www.keepeek.com/Digital-Asset-Management/oecd/education/oecd-skills-outlook-2017_9789264273351-en#page34">perform poorly</a> in numeracy or literacy or both.</p> <p><strong>Investment is inadequate, too.</strong> Although firms have stepped up their capital spending after it collapsed during the recession, they have done much less so than in previous recoveries. Business investment is only 5 percent above its pre-crisis high a decade ago. <a href="http://budgetresponsibility.org.uk/docs/dlm_uploads/Executive-Summary-1.pdf">At a similar stage</a> in the recoveries following recessions at the start of 1980s and of the 1990s it was 63 percent and 30 percent higher than the respective previous peaks.</p> <p>The reluctance to invest in turn is rooted in a financial and business culture that is especially and perniciously short-termist in Britain. <strong><a href="http://www.lse.ac.uk/researchAndExpertise/units/growthCommission/documents/pdf/2017LSEGCReport.pdf">Firms under pressure</a> from the markets are reluctant to make the strategic investments needed to keep productivity moving ahead. And too many British managers are simply not good enough.</strong></p> <p>Although a definitive diagnosis of the British productivity disease remains elusive there is a surprising degree of consensus about the treatment needed to resuscitate the patient. The chancellor&rsquo;s to-do list should include steps to tackle congested roads and overcrowded trains, to support the sciences, to foster R&amp;D in the private sector, and to upgrade Britain&rsquo;s poor skills. Since competition spurs higher productivity as new and smarter firms drive out older and less productive businesses, Hammond needs Britain to be as open an economy as possible.</p> <p>The remedies make good sense but they will not rescue the chancellor, who has in any case already announced more spending on infrastructure. <strong><em>First, they will take time to be effective. Second, finding more money for austerity-hit public services such as policing and health will add to the pressures on the public finances. And third, Brexit is now contributing to the productivity malaise as businesses respond to corrosive uncertainties by curbing their investment plans and as Britain becomes <a href="http://www.bankofengland.co.uk/publications/Documents/speeches/2017/speech996.pdf">less open to trade</a> by leaving the EU. Raising taxes is always an option for a cash-strapped chancellor, but it would be highly unpopular &minus; not least in the bitterly divided Conservative party.</em></strong></p> <p>When he presents his budget, Hammond can be expected to put a brave face on things. He will point to the <a href="https://www.ons.gov.uk/economy/governmentpublicsectorandtaxes/publicsectorfinance/bulletins/publicsectorfinances/september2017">fall in the budget deficit</a> from a peak of almost 10 percent of GDP after the financial crisis to 2.3 percent of GDP in the financial year ending in March 2017. But what matters now is the future path of the public finances. Britain&rsquo;s poor productivity prospects will box the chancellor in because GDP is the tax base and future revenues will be smaller to the extent that output per hour worked continues to stall.&nbsp; &nbsp;</p> <p><u><strong>The harsh reality is that Brexit will blight the public finances by hurting productivity. </strong></u>While Prime Minister May might see Britain&rsquo;s overriding priority as ensuring that next month&rsquo;s summit enables the Brexit talks to move on to trade, she&rsquo;ll have to broaden her focus if she hopes to stay in office long enough to secure a deal that minimizes the damage Brexit is inflicting on the economy.</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="768" height="431" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20171120_brit.jpg?1511236365" /> </div> </div> </div> http://www.zerohedge.com/news/2017-11-20/britains-gravest-economic-challenge-isnt-brexit#comments Brexit Budget Deficit Business Capital intensity conservative party Economic growth Economy Economy of the United Kingdom European Union European Union Financial crisis of 2007–2008 G7 House of Commons Manufacturing Mint Productivity Reality Recession recovery Reuters Stock market crashes Tue, 21 Nov 2017 07:00:00 +0000 Tyler Durden 607640 at http://www.zerohedge.com Entire Baltimore Neighborhood Under Lockdown: "Police Declared Martial Law" http://www.zerohedge.com/news/2017-11-20/entire-baltimore-neighborhood-under-lockdown-police-declared-martial-law <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/11/18/Screen-Shot-2017-11-20-at-9.01.29-AM-1024x842.png"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/11/18/Screen-Shot-2017-11-20-at-9.01.29-AM-1024x842_0.png" width="500" height="411" /></a></p> <p>Five days ago, Det. Sean Suiter, a married father of five and an 18-year veteran with the Baltimore Police, was patrolling the streets of West Baltimore around 5pm last Wednesday when he saw suspicious activity. Suiter approached a man and was shot point blank in the head, in a summary execution. He was rushed to the hospital in critical condition where he later died of his injuries.</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">Rest In Peace Detective Sean Suiter <a href="https://t.co/NiKIdmzbAD">https://t.co/NiKIdmzbAD</a> <a href="https://t.co/l7vkrOKjMv">pic.twitter.com/l7vkrOKjMv</a></p> <p>— Baltimore Police (@BaltimorePolice) <a href="https://twitter.com/BaltimorePolice/status/931264853184012288?ref_src=twsrc%5Etfw">November 16, 2017</a></p></blockquote> <script src="https://platform.twitter.com/widgets.js"></script><p>In response, Baltimore Police reacted with ‘fire and fury’ turning the neighborhood where Suiter was shot into an “open-air prison”, shutting down city streets and enabling checkpoints for citizens while officers in tactical gear went door to door, according to <a href="https://baltimorebrew.com/2017/11/19/neighborhood-lockdown-after-officers-shooting-is-troubling-civil-liberties-lawyers-say/">Baltimore Brew</a>. Residents were prohibited from entering their own neighborhood unless they showed proper identification, these extreme measures have been in place for 4-5 days.</p> <p>“They’ve been to my house three times asking, ‘Did you hear anything? Do you know anything,’” said Edward Stanley, a local resident, who had to show a yellow slip before entering the neighborhood.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/11/18/2017-11-20_08-34-57_0.png"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/11/18/2017-11-20_08-34-57_0_0.png" width="500" height="327" /></a></p> <p>Baltimore Brew said, the neighborhood was tuned into “open-air prison”, as the complete lockdown was in attempt to collect evidence and search for the shooter.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Police initially said they needed to cordon off the area to try to capture the shooter. Police have said Suiter was in the 900 block of Bennett Place, investigating a previous homicide, when he was shot on Wednesday. So far, no arrests have been announced in the case. This morning, homicide detective Mike Newton told The Brew that the lockdown was necessary to collect evidence.</p> </blockquote> <p>One community group took pictures of a checkpoint in West Baltimore.</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="und"><a href="https://twitter.com/hashtag/FreeWestBaltimore?src=hash&amp;ref_src=twsrc%5Etfw">#FreeWestBaltimore</a> <a href="https://t.co/P61qoDLHnq">pic.twitter.com/P61qoDLHnq</a></p> <p>— Baltimore BLOC (@BmoreBloc) <a href="https://twitter.com/BmoreBloc/status/932371715086258181?ref_src=twsrc%5Etfw">November 19, 2017</a></p></blockquote> <script src="https://platform.twitter.com/widgets.js"></script><blockquote class="twitter-tweet"> <p dir="ltr" lang="en">15 <a href="https://twitter.com/BaltimorePolice?ref_src=twsrc%5Etfw">@BaltimorePolice</a> vehicles on Schroeder alone and dozens more on surrounding blocks. All the officers are just sitting in their cars. <a href="https://t.co/M9zCCltdzK">pic.twitter.com/M9zCCltdzK</a></p> <p>— Baltimore BLOC (@BmoreBloc) <a href="https://twitter.com/BmoreBloc/status/932371926793818112?ref_src=twsrc%5Etfw">November 19, 2017</a></p></blockquote> <script src="https://platform.twitter.com/widgets.js"></script><p>Another twitter account describes how ‘the police declared marital law’, as one police officer with an assault rifle guards a corner. </p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">And apparently police been standing on corners like this the last two days <a href="https://t.co/y9Qrd2TSRe">pic.twitter.com/y9Qrd2TSRe</a></p> <p>— Pulla (@KINGDACEO) <a href="https://twitter.com/KINGDACEO/status/931635222898270214?ref_src=twsrc%5Etfw">November 17, 2017</a></p></blockquote> <script src="https://platform.twitter.com/widgets.js"></script><p> Citizens describe how their day lives have been disrupted as West Baltimore remains under police control, as per Baltimore Brew:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Two women walking down Franklin Street to get to their cars, parked blocks away because of the lockdown, complained that they had been harassed by officers. </p> <p>&nbsp;</p> <p>“They know I live here. They’ve seen me come and go. But this one had to pat me down. He [the officer] went like this to my jacket, grabbing it,” said Shelly, 25, who asked that her last name not be used. </p> <p>&nbsp;</p> <p>“They wanted to know where I had been. Why do I have to tell him that? It’s just me in my flip-flops trying to go to my own home.” </p> <p>&nbsp;</p> <p>“We haven’t been able to get our mail for four days,” said the woman with her, Samantha, 50, who also asked not be identified. “Is the city going to pay the late fees on my bills?” </p> <p>&nbsp;</p> <p>“It’s so sad what happened to the officer and I hope they catch whoever did it,” another woman said. “But this is really overboard. I’ve never seen anything like it.”</p> </blockquote> <p>The ACLU of Maryland released a statement yesterday, who are “troubled by reports that some persons entering or leaving the area have been subject to pat down searches, and that non-residents have been barred from entering the area”.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>“While the search for a killer is, of course, a high priority for the police, the limits on lawful police behavior do not disappear even when engaged in that pursuit.&nbsp; And at least one federal appellate court has said that a similar police cordon and checkpoint system was unconstitutional. </p> <p>&nbsp;</p> <p>“The residents of Baltimore, and, in particular, the residents of the affected community, deserve a clear explanation from the City as to why this unprecedented action has been taken, what rules are being enforced, and why it is lawful.&nbsp; The need to secure a crime scene from contamination to preserve evidence does not, on its face, explain the wide area to which access has been restricted for days after the incident.”</p> <p>&nbsp;</p> <p>On-the-ground information is scarce to those outside the cordon because access to residents, including by the media, has also been restricted. For that reason, we encourage anyone who has this kind of information to contact us at <a href="mailto:curtis@aclu-md.org" title="curtis@aclu-md.org">curtis@aclu-md.org</a>. </p> </blockquote> <p>WBALTV11 visited one checkpoint in West Baltimore:</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">West Franklin Street is back open to traffic. </p> <p>Police plan to release the West Baltimore crime scene Monday morning <a href="https://twitter.com/hashtag/WBAL?src=hash&amp;ref_src=twsrc%5Etfw">#WBAL</a> <a href="https://t.co/AgyDlqjWQH">pic.twitter.com/AgyDlqjWQH</a></p> <p>— Vanessa Herring (@VanessaWBAL) <a href="https://twitter.com/VanessaWBAL/status/932453662370263040?ref_src=twsrc%5Etfw">November 20, 2017</a></p></blockquote> <script src="https://platform.twitter.com/widgets.js"></script><p>According to one citizen, ‘this is the 3rd time in less than 3 years that West Baltimore has been occupied by police’…</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">This is the 3rd time in less than 3 years that West Baltimore has been occupied by police:</p> <p>1) April 27 - May 1 in 2015 after the funeral of Freddie Gray<br />2) June 27, 2016 at a street celebration of the life of rapper Lor Scoota<br />3) Nov. 16-???? in 2017 after Det. Suiter was killed <a href="https://t.co/C85qSSl6Br">pic.twitter.com/C85qSSl6Br</a></p> <p>— T'Challa ??Ra ???? (@BmoreDoc) <a href="https://twitter.com/BmoreDoc/status/932014201178124288?ref_src=twsrc%5Etfw">November 18, 2017</a></p></blockquote> <script src="https://platform.twitter.com/widgets.js"></script><p>Baltimore Brew concludes by saying the Baltimore Police will “clear the crime scene” on Monday, so in a few hours. </p> <p>Perhaps in a preview of things to come, the 4-5 day siege of West Baltimore by Police has been described by one resident as ‘Martial Law’. Readers concerned about social tensions in the US are urged to monitor events in Baltimore, which better than Chicago or Detroit now demonstrates just how the United States is marching straight into a new, Orwellian era.</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="512" height="235" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017-11-20%20%281%29.jpg?1511190335" /> </div> </div> </div> http://www.zerohedge.com/news/2017-11-20/entire-baltimore-neighborhood-under-lockdown-police-declared-martial-law#comments Baltimore Baltimore police Baltimore Police Department Death of Freddie Gray Detroit East Coast of the United States Geography of the United States Homicide: Life on the Street Law Martial Law Maryland Twitter Twitter Tue, 21 Nov 2017 06:27:34 +0000 Tyler Durden 607591 at http://www.zerohedge.com Zimbabwe Military Says Mugabe Impeachment Process Has Begun http://www.zerohedge.com/news/2017-11-20/zimbabwe-military-says-mugabe-impeachment-process-has-begun <p>Zimbabwe President Robert Mugabe baffled his country and the world last night when, instead of publicly announcing his resignation, he reaffirmed his intention to stay on as the head of state in Zimbabwe, and admonished members of his ruling ZANU PF party for their &ldquo;arbitrary decision making&rdquo; and &ldquo;victimization.&rdquo;</p> <p>Mugabe&rsquo;s defiance immediately spurred conspiracy theories, including one where military commanders who flanked Mugabe during his speech smuggled him an alternate version following the review of his initial draft.</p> <p>&nbsp;</p> <blockquote class="twitter-tweet" data-lang="en"><p dir="ltr" lang="en">Y&rsquo;all need to watch closely. They legit switched <a href="https://twitter.com/hashtag/RobertMugabe?src=hash&amp;ref_src=twsrc%5Etfw">#RobertMugabe</a> &lsquo;s speech or did something hella fishy. Smh. <a href="https://twitter.com/hashtag/mugabe?src=hash&amp;ref_src=twsrc%5Etfw">#mugabe</a> <a href="https://twitter.com/hashtag/Zimbabawe?src=hash&amp;ref_src=twsrc%5Etfw">#Zimbabawe</a> <a href="https://twitter.com/hashtag/kmt?src=hash&amp;ref_src=twsrc%5Etfw">#kmt</a> <a href="https://t.co/twdrfMUZtt">pic.twitter.com/twdrfMUZtt</a></p> <p>&mdash; Loye Olatunbosun (@loyeloves) <a href="https://twitter.com/loyeloves/status/932341184848187400?ref_src=twsrc%5Etfw">November 19, 2017</a></p></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script><p>&nbsp;</p> <p>Rumors circulated that some ZANU PF lawmakers had fled the country to avoid participating in an impeachment vote, though they were later debunked, according to local media reports. Still, the military&rsquo;s deadline for Mugabe&rsquo;s resignation &ndash; initially set at noon local time on Monday &ndash; has come and gone, and Mugabe remains the nominal leader of Zimbabwe, even if he&rsquo;s still under house arrest, according to <a href="http://www.bbc.com/news/world-africa-42055726">BBC</a>.</p> <p>However, ZANU PF appears to be reaching the end of its patience with its long-time leader. In a media briefing, party member Paul Mangawana said Zimbabwe&rsquo;s lawmakers will move to formally impeach Mugabe tomorrow, and that he could be formally removed from office as soon as Wednesday.</p> <p>Discussions about the impeachment proceedings began Monday, Reuters added.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user245717/imageroot/2017/11/20/2017.11.20mugabe.JPG"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user245717/imageroot/2017/11/20/2017.11.20mugabe_0.JPG" style="width: 500px; height: 252px;" /></a></p> <p><a href="https://www.reuters.com/article/us-zimbabwe-politics/zimbabwes-zanu-pf-sets-mugabe-impeachment-ball-rolling-idUSKBN1DK0H1">Reuters </a>added that impeachment would represent an ignominious end to the career of the &ldquo;Grand Old Man&rdquo; of African politics, who was once lauded across the continent as an anti-colonial hero. Chief whip Lovemore Matuke told Reuters ZANU-PF members of parliament would meet at 1230 GMT to start mapping out Mugabe&rsquo;s impeachment.</p> <p>In the draft motion, the party accused Mugabe of being a &ldquo;source of instability&rdquo;, flouting the rule of law and presiding over an &ldquo;unprecedented economic tailspin&rdquo; in the last 15 years.</p> <p>It also said he had abrogated his constitutional mandate by trying to position his unpopular wife, Grace, as his successor.</p> <p>While the process of impeaching Mugabe looks complex on paper and involves a joint sitting of the Senate and National Assembly, then a nine-member committee of senators, then another joint sitting to confirm his dismissal with a two-thirds majority. However, constitutional experts said ZANU-PF had the numbers and could push it through in as little as 24 hours.</p> <p>&ldquo;They can fast-track it. It can be done in a matter of a day,&rdquo; said John Makamure, executive director of the Southern African Parliamentary Support Trust, an NGO that works with the parliament in Harare.</p> <p>A statement released Monday evening (local time) by Gen Chiwanga reaffirmed the military&rsquo;s commitment to ensuring a peaceful transition of power.</p> <p>&nbsp;</p> <blockquote class="twitter-tweet" data-lang="en"><p dir="ltr" lang="en">A statement just released tonight by Gen. Chiwenga <a href="https://t.co/UeVM9kh5U4">pic.twitter.com/UeVM9kh5U4</a></p> <p>&mdash; Zim Media Review (@ZimMediaReview) <a href="https://twitter.com/ZimMediaReview/status/932676402943549441?ref_src=twsrc%5Etfw">November 20, 2017</a></p></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script><p>&nbsp;</p> <p>One Zimbabwe lawmaker said there will be another caucus meeting for ZANU PF members beginning at 10 am local time Tuesday. It also noted that the President has called for a cabinet meeting. The MDCT, another party, will also be in caucus, while the president meets with his cabinet.</p> <p>&nbsp;</p> <blockquote class="twitter-tweet" data-lang="en"><p dir="ltr" lang="en">Tomorrow there will be another caucus meeting for ZANU PF at 10am, while at the same time the President has called for a cabinet meeting. The MDCT will be in caucus and I assure Zimbabwe that all MPs will put Zimbabwe First</p> <p>&mdash; Hon. Temba P. Mliswa (@TembaMliswa) <a href="https://twitter.com/TembaMliswa/status/932673602411024387?ref_src=twsrc%5Etfw">November 20, 2017</a></p></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script><p>&nbsp;</p> <p>However, ZANU PF&#39;s chief whip said that if Mugabe calls a cabinet meeting, no ministers will attend.</p> <p>&nbsp;</p> <blockquote class="twitter-tweet" data-lang="en"><p dir="ltr" lang="en">President Robert Gabriel Mugabe &amp; Vice President Grace Mugabe arrived at Robert Gabriel Mugabe International Airport, awaiting flight on Robert Gabriel Mugabe Airways after an afternoon capping graduands at Robert Gabriel Mugabe University situated along Robert Gabriel Mugabe Way</p> <p>&mdash; Lance Guma (@LanceGuma) <a href="https://twitter.com/LanceGuma/status/928597556040556544?ref_src=twsrc%5Etfw">November 9, 2017</a></p></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script><p>&nbsp;</p> <p>Despite the political upheaval &ndash; and the marches that occurred over the weekend &ndash; <a href="https://www.iol.co.za/news/special-features/zimbabwe/all-quiet-in-zimbabwe-as-mdc-starts-mugabe-impeachment-process-12079306">local media</a> reported that people were going on with their lives, on their way to work, children were in class, vendors were on the streets and taxis were meandering through the streets of Harare.</p> <p>However, while the demonstrations were peaceful, tanks were strategically positioned at Mugabe&#39;s office and other key government institutions, a clear indication that the standoff is far from over.<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="501" height="200" alt="" src="http://www.zerohedge.com/sites/default/files/images/user245717/imageroot/2017.11.20mugabetease.JPG?1511208489" /> </div> </div> </div> http://www.zerohedge.com/news/2017-11-20/zimbabwe-military-says-mugabe-impeachment-process-has-begun#comments 2008–09 Zimbabwean political negotiations Africa Grace Mugabe National Assembly PF PF party Politics Politics of Zimbabwe Robert Gabriel Mugabe University Robert Mugabe Second round of voting in the 2008 Zimbabwean presidential election Senate Twitter Twitter ZANU–PF Zimbabwe Zimbabwean general election Tue, 21 Nov 2017 06:00:00 +0000 Tyler Durden 607616 at http://www.zerohedge.com BofA's Apocalyptic Forecast: Stocks Flash Crash, Bond Bubble Bursts In H1 2018, War May Follow http://www.zerohedge.com/news/2017-11-20/bofas-apocalyptic-forecast-stocks-flash-crash-bond-bubble-bursts-h1-2018 <p>Having predicted back in July that the "<a href="http://www.zerohedge.com/news/2017-07-13/bofa-most-dangerous-moment-markets-will-come-3-or-4-months">most dangerous moment for markets will come in 3 or 4 months</a>", i.e., now, BofA's Michael Hartnett was - in retrospect - wrong (unless of course the S&amp;P plunges in the next few days). However, having stuck to his underlying logic - which was as sound then as it is now - Hartnett has not given up on his "bad cop" forecast (not to be mistaken with the S&amp;P target to be unveiled shortly by BofA's equity team and which will probably be around 2,800), and in a note released overnight, the Chief Investment Strategist not only once again dares to time his market peak forecast, which he now thinks will take place in the first half of 2018, <strong>but goes so far as to predict that there will be a flash crash <em>"a la 1987/1994/1998</em>" in just a few months</strong>.</p> <p>Contrasting his preview of 2018 with the almost concluded 2017, Hartnett sets the sour mood with his very first words, stating that he believes <strong>"2018 risk asset catalysts are much less bullish than in 2017" </strong>for the simple reason that the bearish positioning going into 2017 has been completely flipped: "positioning now long, not short; profit expectations high, not low; policy close to max stimulus; peak positioning, peak profits, peak policy stimulus means peak asset returns in 2018."&nbsp; He also goes on to point out that the historical omens are poor:</p> <ul> <li>Bull market in S&amp;P500 would become the longest ever on August 22, 2018 (and the second biggest ever at 2863 on S&amp;P500).</li> <li>Equities have only outperformed bonds for seven consecutive years on three occasions in the past 220 years (the last time was 1928 - Chart 1).</li> </ul> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/11/18/hart%201.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/11/18/hart%201_0.jpg" width="500" height="278" /></a></p> <p>Having read Hartnett for many years, we can sense an almost tangible undertone of anger and frustration at central banks for making his bearish forecasts for 2 years in a row go up in a puff of smoke. Which probably explains why one of BofA's best strategists has decided to double down, and raise the stakes beyond a simple market crash, and to a flash crash, if only for dramatic impact. </p> <p>But before we get there, here is Hartnett's explanation why the market will peak in the first half of 2018:</p> <p><strong>The Big H1 Top</strong></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>We forecast a H1 top in risk assets as the last vestiges of QE, the passage of US tax reform and robust early year EPS revisions incite full investor capitulation into risk assets. Potential targets are SPX 2863, CCMP 8000, with US government bond yields moving &gt;2.75%. </p> <p>&nbsp;</p> <p>We start 2018 with a pro-risk asset allocation of equities&gt;bonds, EAFE&gt;US, gold&gt;oil, bullish US dollar. </p> <p>&nbsp;</p> <p>We believe the air in risk assets is getting thinner and thinner, but the Big Top in price is still ahead of us. We will downgrade risk aggressively once we see excess positioning, profits and policy. </p> <p>&nbsp;</p> <p>Peak positioning would be signaled by…</p> <ul> <li>BofAML Bull &amp; Bear Indicator exceeds “sell signal” of 8 (Chart 2);</li> <li>Active mutual equity funds start to see inflows;</li> <li>BofAML GWIM equity allocation exceeds 63%, an all-time high (currently 61%).</li> </ul> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/11/18/bull%20bear%20bofa.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/11/18/bull%20bear%20bofa_0.jpg" width="500" height="228" /></a></p> </blockquote> <p><strong>How to know if/when peak profits arrived?</strong></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>US ISM dips below 55: needs to end 2018 &gt;55 to beat consensus global EPS estimate of 10.5% (Chart 3); <strong>Inverted yield curve, which in seven out of seven occasions in the last 50 years has been the prelude to recession. </strong></p> <p>&nbsp;</p> <p><strong>&nbsp;</strong><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/11/18/EPS%20number%202018.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/11/18/EPS%20number%202018_0.jpg" width="500" height="269" /></a></p> </blockquote> <p><strong>More to the point, how to know that peak central bank policy has arrived?</strong></p> <ul> <li>Q2 peak in G4 central bank liquidity of $15.3tn: net central bank buying of financial assets drops from $1.5tn in 2016 and $2.0tn in 2017 to nearly zero in 2018;</li> <li>US tax reform passed, after which investors must discount tighter, not earlier economic policies.</li> </ul> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/11/18/fed%20BS%20peak.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/11/18/fed%20BS%20peak_0.jpg" width="500" height="276" /></a></p> <p>Which brings us to Bank of America's "big long" trade: volatility, and the stark prediction that in just a few months, a 1987-type flash crash which will wipe out trillions in market cap, is imminent.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>The Big Long: volatility </strong></p> <p>&nbsp;</p> <p>Second, we believe that peak positioning, profits, and policy in 2018 will engender peak asset price returns and trough volatility. In 2017, stock market volatility fell to 50-year lows, bond volatility fell to 30-year lows, ETFs accounted for 70% of daily average global equity volume, the AUM of quant hedge funds is now $432bn (up $271bn since 2009). </p> <p>&nbsp;</p> <p><span style="text-decoration: underline;"><strong>A flash crash (à la ’87/’94/’98) in H1 2018 seems quite likely, in our view, as the major sedative of volatility, the central banks, start to withdraw liquidity. </strong></span></p> </blockquote> <p>According to Hartnett, the right way to to trade the upcoming flash cash and the "Big Long is throguh a combination of&nbsp;<strong> long 2yr/short 10yr Treasuries, long TIPS steepener vs flattener in OATei, long SPX put ratio calendar, long Russian equities.</strong></p> <p>As an added "bonus", in addition to a <strong>"big long", </strong>the BofA strategist also has a "<strong>big short" </strong>trade, which perhaps not surprisingly, is in credit.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>The Big Short: credit </strong></p> <p>&nbsp;</p> <p>Third, we believe that higher inflation, higher corporate debt levels, higher bond volatility and the end of the QE era will be most damaging for corporate bonds. </p> <p>&nbsp;</p> <p>The big 3 consensus assumptions are: Goldilocks, no Fear of Fed/ECB, and no Mean Reversion. The game-changer is wage inflation, which on our forecasts is likely to become more visible. Wage inflation would shatter consensus via higher credit spreads. 3½% US wage growth, 2½% US CPI, and 2% Eurozone CPI are all inflation levels likely to increase volatility and credit spreads.</p> </blockquote> <p>For those looking to trade in advance of the bursting of the credit bubble, BofA's advice: <strong>go long CDX HY &amp; iTraxx XOVER.</strong></p> <p>* * * </p> <p>Finally, if that wasn't bad enough, in addition to the combined bursting of the short-vol and long credit bubbles, BofA has one final prophecy: <strong>"the biggest risk of all is that the structural “Deflationary D’s” (excess Debt, aging Demographics, tech Disruption) cause wage inflation to again surprise to the downside.</strong>" Here's why: </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>The Big Risk: tech bubble </strong></p> <p>&nbsp;</p> <p>Finally, we believe the biggest risk of all is that the structural “Deflationary D’s” (excess Debt, aging Demographics, tech Disruption) cause wage inflation to again surprise to the downside. The era of excess liquidity, bond yields fall, and the Nasdaq goes exponential. 2018 calls for the big top, big volatility long, big credit short, all once again prove to be way too early. <strong>An “Icarus unleashed” bubble nonetheless could end in 2019 with a bear market on hostile Fed hiking, Occupy Silicon Valley and War on Inequality politics.</strong></p> </blockquote> <p>Translation: <strong>the Fed - having created the record wealth, income and class divide that resulted in Brexit, Trump and a wave of nationalism across Europe - is unable to stop, and unleashes civil, and perhaps world war as its final act. </strong></p> <p>How to hedge against "the biggest risk of all"? Hartnett has two words of advice: <strong>buy gold.</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="290" height="139" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/yellen%20laughter.jpg?1511211917" /> </div> </div> </div> http://www.zerohedge.com/news/2017-11-20/bofas-apocalyptic-forecast-stocks-flash-crash-bond-bubble-bursts-h1-2018#comments Bear Market Bond Bond Bond Volatility Business Central Banks CPI Deflation Demographics Economic bubble Economy European Central Bank Eurozone Finance Financial risk flash Flattener Futures contract Goldilocks Hedge fund Macroeconomics Market Crash Mathematical finance Mean Reversion Money NASDAQ Nationalism Recession Technical analysis US Federal Reserve US government Volatility Volatility Yield Curve Tue, 21 Nov 2017 05:15:38 +0000 Tyler Durden 607618 at http://www.zerohedge.com Is A Saudi-Israeli Friendship Driving The Rest Of The Middle East Together? http://www.zerohedge.com/news/2017-11-20/saudi-israeli-friendship-driving-rest-middle-east-together <p><em><a href="https://www.strategic-culture.org/news/2017/11/20/saudi-israeli-friendship-driving-rest-middle-east-together.html">Authored by Federico Pieraccini via The Strategic Culture Foundation,</a></em></p> <p><em><strong>Through its top official, Prince Mohammad bin Salman (MBS), Saudi Arabia continues a wave of internal arrests, having seized nearly $800 billion in assets and bank accounts. </strong>A few days later, MBS attempted to demonstrate his authority by summoning Lebanese Prime Minister Saad Hariri to Saudi Arabia, where he was forced to resign on Saudi state TV. Trump tweeted support for Bin Salman&#39;s accusations against Iran and Hezbollah, and the future Saudi king even obtained Israel&#39;s secret support. Iran, meanwhile, denies any involvement in Lebanon&#39;s domestic affairs or involvement with the ballistic missile launched by Houthi rebels towards Riyadh&rsquo;s King Khalid International Airport a few days ago. <strong>Meanwhile, Trump, Putin and Xi met recently and seem to have decided the fate of the region in an exercise of realism and pragmatism.</strong></em></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/19/20171120_saud.jpg"><img height="334" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/19/20171120_saud.jpg" width="600" /></a></p> <p><strong>News that upends the course of events has now become commonplace over the last few months. However, even by Middle East standards, this story is something new.</strong> The<a href="http://edition.cnn.com/2017/11/04/middleeast/lebanese-prime-minister-saad-hariri-resigns/index.html">&nbsp;affair</a>&nbsp;surrounding Lebanon&rsquo;s Prime Minister Hariri generated quite a bit of commotion. Hariri had apparently been obliged to announce his resignation on Saudi Arabia&#39;s Al Arabiya news channel while being<a href="http://www.reuters.com/article/us-lebanon-politics-hariri-exclusive/exclusive-how-saudi-arabia-turned-on-lebanons-hariri-idUSKBN1DB0QL?il=0">&nbsp;detained</a>&nbsp;in Riyadh. His<a href="https://www.washingtonpost.com/national/tv-interview-with-lebanon-pm-full-of-odd-moments/2017/11/12/bbebbe4a-c7fd-11e7-b506-8a10ed11ecf5_story.html?utm_term=.e1876aafae6e">&nbsp;most recent interview</a>&nbsp;seemed to betray some nervousness and fatigue, as one would expect from a person under enormous stress from forced imprisonment. In his televised resignation statement, Hariri specified that he was unable to return to Lebanon due to some sort of a threat to his person and his family by operatives in Lebanon of Iran and Hezbollah. The Lebanese security authorities, however, have stated that they are not aware of any&nbsp;<a href="http://www.caribflame.com/2017/11/saudi-whistle-blower-saad-al-hariri-forced-to-resign/">danger</a>&nbsp;faced by Hariri.</p> <p><strong>In an endless attempt to regain influence in the Middle East, Saudi Arabia has once again brought about results directly opposite to those intended. </strong>Immediately after receiving confirmation that the resignation had taken place in Saudi Arabia, the entire Lebanese political class demanded that Hariri return home to clarify his position, meet with the president and submit his resignation in person. Saudi actions have served to consolidate a united front of opposition factions and paved the way for the collapse of Saudi influence in the country, leaving a vacuum to be conveniently filled by Iran. <strong>Once again, as with Yemen and in Syria, the intentions of the Saudis have dramatically backfired.</strong></p> <p>This Saudi interference in the domestic affairs of a sovereign country has stirred up unpredictable scenarios in the Middle East, just at the time that tensions were cooling in Syria.</p> <p><strong>Hariri&#39;s detention comes from far away and is inextricably linked to what has been happening over the past few months in Saudi Arabia.</strong> Mohammed bin Salman, son of King Salman, began his internal purge of the Kingdom&rsquo;s elite by removing from the line of succession&nbsp;<a href="https://www.theguardian.com/world/2017/jun/29/deposed-saudi-crown-prince-mohammed-bin-nayef-confined-to-palace">Bin Nayef</a>, a<a href="http://csweb.brookings.edu/content/research/essays/2015/the-prince-of-counterterrorism.html" target="_blank">&nbsp;great friend of the US intelligence</a>&nbsp;establishment (<a href="https://www.emptywheel.net/2014/07/25/nsa-got-into-bed-with-the-saudis-just-before-our-technical-cooperation-agreement-expanded/" target="_blank">Brennan and Clapper</a>). Bin Nayef was a firm partner of the US deep state. Saudi Arabia has for&nbsp;<a href="http://news.bbc.co.uk/2/hi/middle_east/1670089.stm" target="_blank">years</a>&nbsp;worked for the CIA, advancing US strategic goals in the region and beyond. Thanks to the cooperation between Bandar bin Sultan Al Saud, Bin Nayef, and US intelligence agencies, Washington has for years given the impression of fighting against Islamist terrorist while actually weaponizing jihadism since the 1980s by deploying it against rival countries like the Soviet Union in Afghanistan, the Iraqi government in 2014, the Syrian state in 2012, and Libya&rsquo;s Gaddafi in 2011.</p> <p>MBS has even detained numerous family-related princes, continuing to consolidate power around himself. Even&nbsp;<a href="https://www.vanityfair.com/news/2017/11/alwaleed-bin-talal-arrested-saudi-arabia-corruption-purge">Alwaleed bin Talal</a>, one of the richest men in the world, ended up caught in MBS&rsquo;s net, rightly accused of being one of the most corrupt people in the Kingdom. It is speculated that family members and billionaires are detained at the&nbsp;<a href="https://www.theguardian.com/world/2017/nov/06/how-saudi-elite-became-five-star-prisoners-at-the-riyadh-ritz-carlton" target="_blank">Ritz Carlton</a>&nbsp;in Riyadh, with guests and tourists promptly ejected days before the arrests began. Mohammed bin Salman&rsquo;s actions are not slowing down, even after seizing&nbsp;<a href="https://www.globalresearch.ca/real-motive-behind-saudi-purge-emerges-800-billion-in-confiscated-assets/5617466" target="_blank">$800 billion</a>&nbsp;in accounts, properties and assets.</p> <p>MBS is intensifying his efforts to end the conflict in Yemen, which is a drain on Saudi finances, lifting the naval&nbsp;<a href="https://theduran.com/breaking-saudi-arabia-ends-blockade-yemens-port-aden/" target="_blank">blockade</a>&nbsp;of the Port of Aden. <strong>Not only that, the two main Syrian opposition leaders, Ahmad Jarba and Riyadh Hijab, have&nbsp;<a href="https://www.syrianperspective.com/2017/11/analysis-whats-going-on-with-the-kooks-of-arabia-syrian-army-about-to-liberate-al-bu-kamaal.html" target="_blank">been arrested</a>&nbsp;by Riyadh in an effort to demonstrate to Putin the good will of MBS in seeking to resolve the Syrian conflict. </strong>Not surprisingly, King Salman, in a frantic search for a solution to the two conflicts that have lashed his reputation as well as the wealth and alliances of the Saudi kingdom,&nbsp;<a href="https://www.strategic-culture.org/news/2017/10/18/making-history-china-russia-transforming-enemies-into-friends.html" target="_blank">flew to Moscow to seek mediation</a>&nbsp;with Putin, the new&nbsp;<a href="https://www.bloomberg.com/news/articles/2017-10-03/putin-is-now-mr-middle-east-a-job-no-one-ever-succeeds-at" target="_blank">master</a>&nbsp;of the Middle East.</p> <p><strong>MBS has undertaken an anti-corruption campaign for international as well as domestic purposes. </strong>At the national level, the collapse of oil prices, coupled with huge military spending, forced the royal family to seek alternatives for the future of the Kingdom in terms of sustainability, earnings and profits. MBS&rsquo;s&nbsp;<a href="http://vision2030.gov.sa/en">Vision 2030</a>&nbsp;aims to diversify revenue in order to free Saudi Arabia from its dependence on oil. This is a huge ask for a nation that has been thriving for seventy years from an abundance of resources simply found under its ground. This delicate balance of power between the royal family and its subjects is maintained by the subsidies granted to the local population that has allowed the Kingdom to flourish in relative peace, even during the most delicate periods of the Arab Spring in 2011. There is an underlying understanding in Saudi Arabia that so long as the welfare of the population is guaranteed, there should be no threat to the stability of the royal family. It is no wonder that after losing two wars, and with oil prices at their lowest, MBS has started to worry about his future, seeking to purge the elites opposed to him.</p> <p><u><em><strong>The Kingdom&rsquo;s reality is quickly changing under MBS, the next Saudi king, who is trying to anticipate harder times by consolidating power around himself and correcting his errors brought on by incompetence and his excessive confidence in the Saudi military as well as in American backing.</strong></em></u> The&nbsp;<a href="http://www.aljazeera.com/news/2017/11/yemen-houthi-fire-missile-saudi-arabia-riyadh-171104180946302.html" target="_blank">ballistic missile</a>&nbsp;that hit Riyadh was launched by the Houthis in Yemen after 30 months of indiscriminate bombing by the Saudi air force. This act has shown how vulnerable the Kingdom is to external attack, even at the hand of the poorest Arab country in the world.</p> <p>In this context, Donald Trump seems to be capitalizing on Saudi weakness, fear, and the need to tighten the anti-Iranian alliance. <strong>What the American president wants in return for support of MBS is as simple as it comes: huge investments in the US economy together with the purchase of US arms. </strong>MBS obliged a few months ago, investing into the US economy to the tune of more than&nbsp;<a href="http://www.independent.co.uk/news/world/americas/donald-trump-arms-deal-saudi-arabia-110-billion-911-terrorism-international-law-war-crimes-a7747076.html" target="_top">$380 billion over ten years</a>. Trump&#39;s goal is to create new jobs at home, increase GDP, and boost the economy, crucial elements for his re-election in 2020. Rich allies like Saudi Arabia, finding themselves in a tight fix, are a perfect means of achieving this end.</p> <p><strong>Another important aspect of MBS&rsquo;s strategy involves the listing of&nbsp;<a href="https://www.reuters.com/article/us-usa-trump-aramco/trump-backs-new-york-in-bourses-battle-for-saudi-aramco-listing-idUSKBN1D40IL" target="_blank">Aramco on the NYSE</a>&nbsp;together with the switch to&nbsp;<a href="https://www.strategic-culture.org/news/2017/10/04/challenging-dollar-china-russia-plan-from-petroyuan-gold.html" target="_blank">selling oil for yuan</a>&nbsp;payments. </strong>Both decisions are fundamental to the United States and China, and both bring with them a lot of friction. MBS is at this moment weak and needs all the allies and support he can get. For this reason, a decision on Aramco or the petroyuan would probably create big problems with Beijing and Washington respectively. The reason why MBS is willing to sell a small stock of Aramco relates to his efforts to gin up some money. For this reason, thanks to the raids on the accounts and assets of the people arrested by MBS, Saudi Arabia has raised over&nbsp;<a href="http://fortune.com/2017/11/08/saudi-arabia-prince-mohammed-asset-seizure-corruption/" target="_blank">$800 billion</a>, certainly a higher figure than any sale of Aramco shares would have brought.</p> <p>This move allows MBS to postpone a decision on listing Aramco on the NYSE as well as on whether to start accepting yuan for payment of oil.<strong> Holding back on the petroyuan and Aramco&rsquo;s initial public offering is a way of holding off both Beijing and Washington but without at the same time favouring one over the other.</strong> Economically, Riyadh cannot choose between selling oil for dollars on the one hand and accepting payment in another currency on the other. <strong>It is a nightmare scenario; but some day down the road, the Saudi royals will have to make a choice.</strong></p> <p><u><strong>The third party to this situation is Israel in the figure of Netanyahu,</strong></u> Donald Trump&#39;s&nbsp;<a href="https://www.timesofisrael.com/netanyahu-hails-trump-as-a-true-friend-of-israel/" target="_blank">great friend</a>&nbsp;and supporter right from the beginning of his electoral campaign. Trump&#39;s victory brought positive returns to the investment the Israeli leader had made in him. Ever since Trump won the election, the US has employed harsh words against Iran, turning away from the positive approach adopted by Obama that managed to achieve the Iran nuclear deal framework. Nevertheless, the Israeli prime minister has had to deal with numerous problems at home, with a narrow parliamentary majority and several members of his government&nbsp;<a href="https://translate.google.com/translate?hl=en&amp;prev=_t&amp;sl=it&amp;tl=en&amp;u=https://www.theguardian.com/world/2017/nov/09/israeli-police-question-benjamin-netanyahu-in-corruption-inquiry" target="_blank">under investigation for corruption.</a></p> <p>Donald Trump pursued a very aggressive policy against Tehran during the election campaign, then went on to&nbsp;<a href="https://www.strategic-culture.org/news/2017/10/24/sabotaging-iran-deal-trump-certifies-us-irrelevance.html" target="_blank">annul</a>&nbsp;the Iran nuclear deal a few weeks ago. The decision is now for Congress to certify, with a difficult mediation between European allies (other than China and Russia), who are opposed to ending the deal, and the Israelis, who can count on the support of many senators thanks to their lobbying efforts. Israel, for its part, sees in Saudi Arabia and MBS the missing link between Saudi Wahhabism and Israeli Zionism. Various&nbsp;<a href="http://news.nana10.co.il/Article/?ArticleID=1272790&amp;sid=126" target="_blank">private cablegrams</a>&nbsp;leaked to the press have shown how Israeli diplomats around the world were instructed to support Saudi &nbsp;accusations of Iran interfering in Lebanon&#39;s internal affairs.</p> <p><strong>The interests of MBS and Netanyahu seem to dovetail quite nicely in Syria and Yemen as well as with regard to Iran and Hezbollah.</strong> The two countries have a common destiny by virtue of the fact that neither alone can deal decisively with Hezbollah in Syria or Lebanon, let alone Iran. Rouhani himself has said that Iran fears American strength and power alone, knowing that Saudi Arabia and Israel are incapable of defeating Tehran.</p> <p>Trump&#39;s approval of the arrests carried out by MBS is based on a number of factors. The first involves the investments in the economy that will be coming America&rsquo;s way. The other, certainly less known, concerns the subterranean battle that has been occurring between the Western elites for months. Many of&nbsp;<a href="https://www.clintonfoundation.org/contributors?category=%24100%2C001%20to%20%24250%2C000&amp;;page=7" target="_blank">Clinton&rsquo;s top money sources</a>&nbsp;are billionaires arrested by MBS, with stock options in various major banks, insurance companies, publishing groups, and American television groups, all openly anti-Trump. In this sense, the continuation of Trump&#39;s fight with a portion of the elite can be seen with the halting of the<a href="http://beta.latimes.com/business/hiltzik/la-fi-hiltzik-att-cnn-20171113-story.html">&nbsp;merger of AT&amp;T and Time Warner involving CNN.</a></p> <p><strong>Trump seems to be accompanying Saudi and Israeli urgings for war with multiple intentions, potentially having a plan for a broader, regional and global agreement between the parties.</strong></p> <p>At a regional level, Trump first supported the Saudi&nbsp;<a href="https://www.strategic-culture.org/news/2017/06/13/multipolar-world-order-big-picture-qatar-saudi-fracture.html" target="_blank">crusade against Qatar</a>, resolved with Riyadh not getting Qatar to accede to any of its&nbsp;<a href="http://www.aljazeera.com/news/2017/06/arab-states-issue-list-demands-qatar-crisis-170623022133024.html" target="_blank">advanced demands</a>. During the crisis, Doha approached&nbsp;<a href="https://www.nbcnews.com/news/world/iran-sees-opening-saudi-qatar-feud-offers-food-airspace-qatar-n768891" target="_blank">Tehran</a>&nbsp;and&nbsp;<a href="https://twitter.com/dimsmirnov175/status/873485403478790144/video/1" target="_blank">Moscow</a>, who immediately took advantage of the situation to establish trade relations and commence negotiations with Qatar to tame its terrorist influence in the region, especially in the Syrian conflict. Turkey and Qatar have practically announced a&nbsp;<a href="http://www.aljazeera.com/news/2017/10/turkey-qatar-strategic-alliance-171024133518768.html" target="_blank">military alliance</a>, cementing a new front that includes China, Russia, Iran, Turkey, Syria, Lebanon, Iraq, and Qatar, now potentially all on the same side of the barricades, opposed to Saudi dictates and Israel&rsquo;s efforts to foment war with Iran.</p> <p><strong>With the US withdrawal from the region, as is increasingly evident from Trump&#39;s reluctance to embark on a Middle East conflict, Israel and Saudi Arabia are increasing their desperate cries against Iran, observing how the gains of the resistance axis have led Tehran to dominate the region with its allies. </strong>The visit of King Salman to Russia, and the&nbsp;<a href="https://www.haaretz.com/israel-news/1.810605" target="_blank">four meetings</a>&nbsp;between Putin and Netanyahu, give the idea of which capital is in charge in the region. This all represents an epochal change that further isolates Riyadh and Tel Aviv, two countries that represent the heart of chaos and terror.</p> <p>The Saudi attempt to isolate Qatar has failed miserably, and the continuous effort to paint Iran as the main cause of tension in the region seems to have reached a point of no return, with the latest stunt involving Hariri. Sunnis, Christians and Shiites agree on one point only: that the premier must return home.<strong> Riyadh hopes to light the fuse of a new civil war in the region, with Israel hoping to take advantage of the chaos brought about by an attack on Hezbollah.</strong> This is not going to happen, and the disappointment of the House of Saud and the Israeli prime minister will not change anything. Without a green light from Washington and a promise from Uncle Sam to intervene alongside his Middle East allies, the Israelis and Saudis are aware that they have neither the means nor strength to attack Iran or Hezbollah.</p> <p><strong>Trump is playing a dangerous game; </strong>but there seems to be some degree of coordination with the other giants on the international scene. <strong>The main point is it is impossible for Washington to be an active part in any conflict in the region, or to change the course of events in a meaningful way. </strong>The &quot;End of history&quot; ended years ago. US influence is on the decline, and Xi Jinping and Putin have shown great interest in the future of the region. In recent months, the Russian and Iranian militaries, together with the Chinese economic grip on the region, have shown a collective intention to replace years of war, death and chaos with peace, prosperity and wealth.</p> <p>MBS and Netanyahu are having a hard time dealing with this new environment that will inevitably proclaim Iran the hegemon in the region. Time is running out for Israel and Saudi Arabia, and both countries are faced with enormous internal problems while being unable to change the course of events in the region without the full intervention of their American ally, something practically impossible nowadays.</p> <p><strong>The new course of the multipolar world, together with Trump&rsquo;s America First policy, seems to have hit hardest those countries that placed all their bets on the continuing economic and military dominance of the United States in the region. </strong>Other countries like Qatar, Lebanon and Turkey have started to understand the historical change that is going on, and have slowly been making the switch, realizing in the process the benefits of a multipolar world order, which is more conducive to mutually beneficial cooperation between countries. <em><strong>The more Saudi Arabia and Israel push for war against Iran, the more they will isolate themselves. This will serve to push their own existence to the brink of extinction.</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="613" height="341" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20171120_saud.jpg?1511235555" /> </div> </div> </div> http://www.zerohedge.com/news/2017-11-20/saudi-israeli-friendship-driving-rest-middle-east-together#comments Afghanistan Central Intelligence Agency China Congress Corruption Donald Trump Government Heirs apparent Hizballah House of Saud Insurance Companies International relations Iran Iran–Saudi Arabia proxy conflict Iraq Iraqi government Israel Kings of Saudi Arabia Middle East Middle East Middle East Mohammad Mohammad bin Salman Politics Reality Saudi Air Force Saudi Arabia Saudi Arabia Saudi Arabia–United States relations Saudi military Shia–Sunni relations Soviet Union in Afghanistan Strategic Culture Foundation Time Warner Turkey U.S. intelligence Yuan Tue, 21 Nov 2017 04:50:00 +0000 Tyler Durden 607639 at http://www.zerohedge.com Doomsday Preppers Are Switching Allegiance From Gold To Bitcoin http://www.zerohedge.com/news/2017-11-20/doomsday-preppers-are-switching-allegiance-gold-bitcoin <p><strong>The gold versus Bitcoin debate is complex, nuanced and still in its embryonic stages when put into the perspective of gold&rsquo;s known 2,700-year use as money versus Bitcoin&rsquo;s very modest eight-year track record. </strong></p> <p>From a pure investment perspective, as the following Bloomberg chart shows, Bitcoin has obviously &ldquo;wiped the floor&rdquo; with its esteemed rival and, no doubt, has absorbed a considerable volume of funds that otherwise might have found their way into gold investments.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user235761/imageroot/2017/11/04/Bitcoin.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user235761/imageroot/2017/11/04/Bitcoin_0.png" style="width: 600px; height: 355px;" /></a></p> <p>One subset of gold investors, which is both over-stated and over-ridiculed in the mainstream media, is the &ldquo;preppers&rdquo;, or those preparing for a catastrophic disaster to occur in the future by stockpiling food, ammunition and &ldquo;durable&rdquo; methods of storing their wealth, etc. We clarify the term &quot;preppers&quot; because it is not common parlance in many European countries. <strong>While some allocation in gold was basically &ldquo;de rigeur&rdquo; some years ago, the prepping community is increasingly turning to Bitcoin,</strong> as <a href="https://www.bloomberg.com/news/articles/2017-11-20/can-bitcoin-survive-an-apocalypse">Bloomberg</a> reports.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Wendy McElroy is ready for most doomsday scenarios: a one-year supply of nonperishable food is stacked in a cellar at her farm in rural Ontario. Her blueprint for survival also depends upon working internet: part of her money, assuming she needs some after civilization collapses, is in bitcoin. Across the North American countryside, preppers like McElroy are storing more and more of their wealth in invisible wallets in cyberspace instead of stockpiling gold bars and coins in their bunkers and basement safes. They won&rsquo;t be able to access their virtual cash the moment a catastrophe knocks out the power grid or the web, but that hasn&rsquo;t dissuaded them. Even staunch survivalists are convinced bitcoin will endure economic collapse, global pandemic, climate change catastrophes and nuclear war.</p> <p>&nbsp;</p> <p><strong>&ldquo;I consider bitcoin to be a currency on the same level as gold,&rdquo;</strong> McElroy, who lives on the farm with her husband, said by email. <strong>&ldquo;It allows individuals to become self-bankers. When I fully understood the concepts and their significance, bitcoin became a fascination.&rdquo;</strong></p> </blockquote> <p>Wendy McElroy&#39;s profile, for what it&rsquo;s worth, is not exactly that of a &ldquo;whacko&rdquo; prepper. A former journalist with FOX News, McElroy might be described as an &ldquo;anarcho-capitalist&rdquo;. She has authored a dozen books and numerous articles on subjects such as voluntarism (all forms of human association should be voluntary), feminism, how pornography can benefit women, capitalism and defending Wikileaks. In an article <a href="https://news.bitcoin.com/bitcoin-function-societal-collapse/">&ldquo;Would Bitcoin &lsquo;Function&rsquo; in a Societal Collapse?&rdquo;</a> on bitcoin.com, McElroy cited the growth in Bitcoin adoption in the midst of the collapse of Venezuela&rsquo;s economy and its currency.</p> <p>Bloomberg continues by noting the seeming <strong>contradiction </strong>for preppers, like McElroy, since a collapse in the grid would take the internet down. However, <strong>it&rsquo;s the ability of Bitcoin to operate beyond the control of central bankers (so far) which is a key attraction.</strong></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>At first glance, it seems counter-intuitive that some of bitcoin&rsquo;s most ardent proponents are people motivated by the belief that public infrastructure will collapse in times of social and political distress. Bitcoin isn&rsquo;t yet widely accepted as a method of payment and steep transaction costs make it inconvenient to use at vendors that do take it. Preppers, as it happens, have a different perspective on what they see as the money of the future, which has surged 10-fold in the past 12 months as supporters lauded it as a digital alternative to rival the dollar, euro or yen. Used to send and receive payments online, bitcoin is similar to payment networks like PayPal or Mastercard, the difference being that it runs on a decentralized network&mdash;blockchain&mdash;that&rsquo;s beyond the control of central banks and regulators.<strong> It was born out of an anti-establishment vision of a government-free society, a key attraction for those seeking unhindered access to their capital in case a massive shock shuts down the banking system.</strong></p> </blockquote> <p>Even if the grid went down temporarily, preppers are attracted by the blockchain&rsquo;s record of Bitcoin holdings and transaction.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>&quot;Not too long ago, people in the prepper community were actively warning against crypto, and now they&rsquo;re all investing in it,&rdquo; </strong>said Tom Martin, a truck driver from Washington who runs a social-media website for people interested in learning skills to survive disaster.</p> <p>&nbsp;</p> <p><strong>&ldquo;As long as the grid stays up, people will keep using bitcoin.&rdquo;</strong></p> <p>&nbsp;</p> <p>In addition to gold, silver and stocks, Martin invests in bitcoin and peers litecoin and steem because they&rsquo;re easier to travel with, harder to steal and offer better protection in the event of the kind of societal breakdown that would unfold if a fiat currency like the dollar collapsed. He&rsquo;s among those confident that bitcoin can withstand even a complete blackout through the strength of the underlying blockchain, the anonymous public bookkeeping technology that records every single bitcoin transaction.</p> </blockquote> <p>In the bitcoin.com article, Wendy McElroy noted the increasing dependence on blockchain and the internet, the revival of which would be a priority after a disaster.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Yes. Electricity and the internet may be less reliable or more expensive but they would be available. An increasing dependence on the blockchain would make it a top economic priority. It would also be a top military priority.<strong> In October 2016, the Pentagon revealed it was actively exploring blockchain technology &ldquo;to create tamper-proof military computer systems, including those used to control America&rsquo;s nuclear weapons.&rdquo;</strong> Other nations are undoubtedly doing the same.</p> </blockquote> <p>Bloomberg acknowledges this view.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Preppers, though, stock enough food and supplies to sustain them for months, if not years, and they expect whatever governing structure emerges post-calamity will prioritize getting the web back up and running.</p> <p>&nbsp;</p> <p><strong>&ldquo;It may be difficult, if not impossible to access for a while, but once things start returning to some level of normality, then the blockchain will return as it was before the disaster,&rdquo;</strong> said Rob Harvey, a bitcoin investor who prepares for natural and nuclear catastrophes by learning and teaching survival skills, like making a fire. &ldquo;The blockchain does not need a specific place or a specific person to survive&mdash;that&rsquo;s a strong survival tactic&rdquo;.</p> </blockquote> <p>Bloomberg notes how Bitcoin has increasingly become a topic of debate on prepper forums, where participants were previously gold devotees.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Discussions on the pros and cons of investing in crypto have popped up on survivalist forums like mysurvivalforum.com and survivalistboards.com this year as bitcoin rallied above $7,000. <strong>&ldquo;Buy bitcoin&rdquo; is now a more popular search phrase than &ldquo;buy gold&rdquo; on Google. </strong></p> <p>&nbsp;</p> <p>The buzz is starting to impinge on gold&rsquo;s role as a store of value especially since, like the precious metal, there&rsquo;s a finite supply of bitcoin, which proponents say gives it anti-inflationary qualities. Sales of gold coins from the U.S. Mint slid to a decade low in the first three quarters months of 2017.</p> <p>&nbsp;</p> <p><strong>&ldquo;It&rsquo;s definitely had some impact on the market,&rdquo;</strong> Philip Newman, who does research on precious-metal coin sales and is one of the founders of research firm Metals Focus, said by phone from Washington. <strong>&ldquo;People see bitcoin prices going to the moon. No one thinks gold is going to the moon.&rdquo;</strong></p> </blockquote> <p>While gold&rsquo;s lack of &ldquo;portability&rdquo; is considered a negative.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Along the fringe, the 20,000 libertarians expected to converge on New Hampshire as part of the Free State Project are also switching from precious metals. They like bitcoin because it isn&rsquo;t created by a government, unlike conventional currency.</p> <p>&nbsp;</p> <p><strong>&ldquo;You can use bitcoin for economic transactions in a way that gold was never designed to do because it&rsquo;s a physical thing&mdash;it&rsquo;s heavy,&rdquo;</strong> Matt Philips, the project&rsquo;s president, said by phone. &ldquo;A lot of people don&rsquo;t know what the heck to do with gold if you give it to them in exchange for a cup of coffee.&rdquo;</p> </blockquote> <p>Wendy McElroy&rsquo;s support for Bitcoin is drawn straight from the philosophy of Ayn Rand in Atlas Shrugged.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Whatever doom-and-gloom scenario unfolds, McElroy, from Canada, has faith in bitcoin. She&rsquo;s writing a book called Satoshi Revolution, inspired by the pseudonym of the person or people who created bitcoin in 2009 as an answer to the financial turmoil wrought by the global financial crisis. She says the digital currency breaks society&rsquo;s dependence on a state that uses its monopoly over the issuance of money to dominate the economy, making it a natural hedge against disaster. <strong>&ldquo;It is a people&rsquo;s currency,&rdquo; </strong>she writes in the book&rsquo;s introduction.<strong> &ldquo;Bitcoins move seamlessly through a world without states or borders, obeying only the command of individuals who choose to deal with each other. Immune to currency manipulation and inflation, they do not serve the powerful elites at the expense of average people.&rdquo;</strong></p> </blockquote> <p><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user235761/imageroot/2017/11/04/The_Satoshi_Revolution_A_Revolution_0.jpg" style="width: 500px; height: 750px;" /></p> <p><strong>When it boils down to it, the rationale and investment cases for gold and Bitcoin are similar enough that common sense suggests that the prepper community would, to some extent, adopt both.</strong></p> <p>With Bitcoin&rsquo;s performance smashing gold to bits (intended), it&rsquo;s hardly surprising that preppers are shifting their allegiance towards the digital currency.<strong> They are just &ldquo;following the money&rdquo;.</strong> As with all these things, however, we suspect that a point will come when too many people will be standing on the same side of the boat and there will be a sharp reversal in relative performance. The all-important question is whether that&rsquo;s when Bitcoin is 10,000, 13,000 or 50,000?</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="744" height="417" alt="" src="http://www.zerohedge.com/sites/default/files/images/user235761/imageroot/prepper.jpg?1511202117" /> </div> </div> </div> http://www.zerohedge.com/news/2017-11-20/doomsday-preppers-are-switching-allegiance-gold-bitcoin#comments Alternative currencies anonymous public bookkeeping technology Bitcoin Bitcoin Blockchains Central Banks Cryptocurrencies Currency Digital currency Economics of bitcoin ETC Finance Financial cryptography Fox News Google Legality of bitcoin by country or territory Money Pentagon Precious Metals Yen Tue, 21 Nov 2017 04:30:00 +0000 Tyler Durden 607610 at http://www.zerohedge.com The Economist Went There - Shockingly Un-PC Study Shows Whites Work Hardest, Longest http://www.zerohedge.com/news/2017-11-20/economist-went-there-shockingly-un-pc-study-shows-whites-work-hardest-longest <p><em>A trio of labor economists suggest that <strong>effort at work is correlated with race...</strong></em></p> <p><a href="https://www.economist.com/news/united-states/21715998-establishing-cause-remains-hazardous-new-research-suggests-effort-work"><em>As The Economist writes,</em></a> given the long history of making racial slurs about the efforts of some workers,<strong> any study casting black and Hispanic men as lazier than whites and Asians is sure to court controversy</strong>.</p> <p>But, a <a href="http://www.nber.org/papers/w23096">provocative working paper by economists Daniel Hamermesh, Katie Genadek and Michael Burda</a> sticks a tentative toe into these murky waters.</p> <p>They suggest that<strong> America&rsquo;s well-documented racial wage gap is overstated by 10% because minorities, especially men, spend larger portions of their workdays not actually working</strong>.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/19/20171120_econ.jpg"><img height="572" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/19/20171120_econ_0.jpg" width="600" /></a></p> <p>Uncomfortable though the topic may be, the <strong>authors have attempted a rigorous analysis. </strong></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>The study&rsquo;s method is straightforward. <strong>The data come from nearly 36,000 &ldquo;daily diaries&rdquo;, self-reporting on how Americans spent their working hours, collected from 2003 to 2012.</strong></p> <p>&nbsp;</p> <p>Relying on the assumption that workers are equally honest in admitting sloth, the authors calculate the fraction of time spent not working while on the job - spent relaxing or eating, say - and find that it varies by race to a small but statistically significant degree.</p> <p>&nbsp;</p> <p>The gap remains, albeit in weaker form, even with the addition of extensive controls for geography, industry and union status, among others. Non-white male workers spend an additional 1.1% of the day not working while on the job, or an extra five minutes per day.</p> <p>&nbsp;</p> <p><strong>Assuming their controls are adequate, that would still leave 90% of the wage difference between white workers and ethnic minorities, which was recently estimated to be 14%, unexplained.</strong></p> </blockquote> <p>After rejecting a number of plausible explanations for why this might be, <strong>the authors finally attribute the discrepancy to unexplained &ldquo;cultural differences&rdquo;</strong>.</p> <p>Acutely aware of the sensitivity of these findings, the professors delayed publication until after the presidential election, releasing their report in January.</p> <p><em><strong>&ldquo;I knew full well that Trump and his minions would use it as a propaganda piece,&rdquo; </strong></em>says Mr Hamermesh, a colourful and respected labour economist. The paper may yet be seized on by those who are keen to root out &ldquo;political correctness&rdquo; and are perennially unhappy with current anti-discrimination laws.</p> <p>When asked what motivated the study of such a sensitive topic, <a href="https://qz.com/899533/the-story-behind-one-of-the-most-controversial-economics-papers-youll-read-in-a-while/">QZ&#39;s Allison Schrager notes</a> that <strong>Hamermesh, typical of economists driven by pure intellectual curiosity, said it hadn&rsquo;t occurred to him that it might be so controversial.</strong></p> <p>But, denunciations came quickly, however. Within hours of publication, Mr Hamermesh received vitriolic messages and was labelled a racist in an online forum popular among economists. Mr Hamermesh, an avowed progressive, who refers to Donald Trump only by amusing nicknames and resigned from a post at the University of Texas over a state law permitting the open carrying of firearms, finds this unfair.</p> <p><strong>He notes that Americans work too much. His preferred solution would not be for some groups to work more, but for others to work less.</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="627" height="320" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20171120_econ1.jpg?1511235202" /> </div> </div> </div> http://www.zerohedge.com/news/2017-11-20/economist-went-there-shockingly-un-pc-study-shows-whites-work-hardest-longest#comments Daniel S. Hamermesh Donald Trump Fellows of the Econometric Society Social Issues The Economist University of Texas Tue, 21 Nov 2017 04:10:00 +0000 Tyler Durden 607638 at http://www.zerohedge.com Walmart Nation: Mapping The Largest Employers In America http://www.zerohedge.com/news/2017-11-19/walmart-nation-mapping-largest-employers-america <p><strong>In an era where Amazon steals most of the headlines,</strong> it&rsquo;s easy to forget about brick-and-mortar retailers like Walmart.</p> <p>But, even though the market values the Bezos e-commerce juggernaut at about twice the sum of Walmart, <a href="http://www.visualcapitalist.com/walmart-nation-mapping-largest-employers-u-s/">Visual Capitalist&#39;s Jeff Desjardins notes</a> that <strong>the blue big-box store is very formidable in other ways.</strong> For example, revenue and earnings are two areas where Walmart still reigns supreme, and the stock just hit&nbsp;<a href="https://www.cnbc.com/2017/11/16/wmt-q3-earnings-2017.html">all-time highs</a>&nbsp;yesterday on an earnings beat.</p> <p>That&rsquo;s not all, though. As today&rsquo;s map shows, Walmart is dominant in one other notable way:<strong><em> the company is the biggest private employer in America in a whopping 22 states</em></strong>.</p> <p style="clear: both;"><a href="http://www.visualcapitalist.com/walmart-nation-mapping-largest-employers-u-s/"><img src="http://2oqz471sa19h3vbwa53m33yj.wpengine.netdna-cdn.com/wp-content/uploads/2017/11/walmart-nation.jpg" style="border-width: 0px; border-style: solid; height: 456px; width: 600px;" /></a></p> <p><em>Courtesy of: <a href="http://www.visualcapitalist.com">Visual Capitalist</a></em></p> <h2><u>WALLY WORLD</u></h2> <p>Using data from&nbsp;<a href="http://247wallst.com/special-report/2017/03/17/largest-employer-in-every-state/">24/7 Wall Street</a>, we mapped out the largest employer (excluding public administrative bodies, such as state governments) in each state.</p> <p>Here are the top ten states where Walmart took the title:</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/19/20171119_walmart.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/11/19/20171119_walmart_0.jpg" style="width: 600px; height: 367px;" /></a></p> <p><strong>The company has 1.5 million employees in the U.S. &ndash; and about 950,000 of them are in the states above.</strong></p> <h2><u>A SOUTHERN INSTITUTION</u></h2> <p>In Walmart&rsquo;s home state of Arkansas, the company employees 53,310 people, or about 4% of the non-farm work force. That includes about 18,600 jobs at the HQ in Bentonville, AR.</p> <p><strong>Despite the company&rsquo;s obvious influence in the state where it was founded, Walmart is also the largest employer across the South in general. </strong>Whether it is Texas (171,531 employees) or Virginia (44,621), there are Walmarts aplenty in the states surrounding Arkansas.</p> <p>One notable exception to this rule? North Carolina, where the University of North Carolina University system employs 74,079 people. However, that doesn&rsquo;t mean that Walmart has zero presence in the Tar Heel State &ndash; it actually has 218 retail stores and 58,525 employees in North Carolina, according to its&nbsp;<a href="https://corporate.walmart.com/our-story/locations/united-states/north-carolina">website</a>.</p> <h2><u>YOUR TURN, AMAZON</u></h2> <p><strong>In case you may be wondering, Amazon is not the largest employer in any state &ndash; even in the company&rsquo;s home state of Washington, where it still lags behind Boeing.</strong></p> <p>However, Amazon&rsquo;s epic ramp-up is quickly taking over Seattle, and the company now has as much office space there as the city&rsquo;s&nbsp;<a href="https://www.seattletimes.com/business/amazon/thanks-to-amazon-seattle-is-now-americas-biggest-company-town/">next 40 biggest employers</a>&nbsp;combined.</p> <p>And who knows, with over&nbsp;<a href="http://money.cnn.com/2017/10/23/technology/amazon-hq2-proposals-update/index.html">238 bids</a>&nbsp;for Amazon&rsquo;s new HQ2, it&rsquo;s possible that the company could be adding up to 50,000 new jobs in another state very soon.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="1065" height="579" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20171119_walmart1.jpg?1511129082" /> </div> </div> </div> http://www.zerohedge.com/news/2017-11-19/walmart-nation-mapping-largest-employers-america#comments Amazon Bentonville, Arkansas Big-box store Boeing Business Business Criticism of Walmart E-commerce Economy of the United States headlines HQ2 Labor University of North Carolina University Walmart Tue, 21 Nov 2017 03:50:00 +0000 Tyler Durden 607556 at http://www.zerohedge.com