en World's Largest Shipowners To Abandon Greece Ahead Of Major Tax Hike <p>Once again the reactions of desperate government policies looks like creating an even worse situation thanks to unintended (though entirely foreseeable) consequences. <strong>Amid the prospect of sharply higher shipping taxes in Greece</strong> - designed to increase revenues and &#39;fix&#39; the debt-ridden nation, <a href=""><em>WSJ reports</em></a> <strong>many of Greece&rsquo;s world-leading shipowners are actively exploring options to leave their home country</strong>. With Greece controlling 20% of the world&#39;s shipping fleet, the &#39;quadriga&#39; of Greek creditors&#39; demands to raise taxes (because debt restructuring is out of the question) on such an &#39;easy target&#39; as the world&#39;s largest shipping industry <strong>appears likely to backfire</strong> as an entire industry&#39;s revenues move out of reach of government taxers.</p> <p>&nbsp;</p> <p><a href=""><em>As The Wall Street Journal reports,</em></a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>Dominated by some 800 largely family-run companies that control almost a fifth of the global shipping fleet from their base at the main Greek port of Piraeus, the industry has long been a source of national pride.</strong></p> <p>&nbsp;</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 654px;" /></a></p> <p>&nbsp;</p> <p>But<strong> at the behest of Greece&rsquo;s international creditors, the newly re-elected Syriza-led government has reluctantly <a class="icon none" href="" target="_self">agreed to raise taxes</a></strong> on the long-protected sector.</p> </blockquote> <p>And the effect of this forced action...</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><u><strong>Many in the Greek shipping world say any increase in taxes on shipping operations would prompt a mass exodus of the country&rsquo;s shipowners. </strong></u>Relatively low-tax global shipping centers such as Cyprus, London, Singapore and Vancouver, Canada, are positioning themselves to benefit.</p> <p>&nbsp;</p> <p><u><em>&ldquo;With all these places from Cyprus to Vancouver coming to Greek owners and trying to get them to move, I hope that everyone realizes there is a real possibility that many people might leave if things are handled the wrong way,&rdquo;</em></u> said George Gratsos, president of the Hellenic Chamber of Shipping.</p> <p>&nbsp;</p> <p>...</p> <p>&nbsp;</p> <p><strong>shipping remains a bright spot in the reeling Greek economy, </strong>generating &euro;13 billion to &euro;19 billion, or $14.6 billion to $21.4 billion, in annual revenue and employing about 250,000 people.</p> <p>&nbsp;</p> <p>&ldquo;Shipping makes up 7% of Greek economic output, and<strong> logic dictates that the sector should enjoy a friendly business environment and a steady taxation system so it can grow and create more jobs, rather than moves to push it out,</strong>&rdquo; he said.</p> </blockquote> <p>*&nbsp; *&nbsp; *</p> <p>Senior Greek government officials, who asked not to be named, said the finance ministry is trying to find alternative sources of income to avoid saddling owners with more taxes, but one said that <u><em><strong>&ldquo;the exercise is proving very difficult.&rdquo;</strong></em></u></p> <p><strong>Final decisions on the matter are expected by the end of October.</strong></p> <p>*&nbsp; *&nbsp; *</p> <p>Maybe someone at quadriga should check on what Greece&#39;s debt-to-GDP looks like without its shipping industry. But there is a silver lining... Cyprus may be saved...</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>&ldquo;We&rsquo;re very highly relying on the second option that we have in Cyprus,&rdquo;</strong> Greek owner George Procopiou, who runs one of the world&rsquo;s largest fleets of tankers and liquefied-natural-gas carriers, told the Cyprus Maritime Conference in Limassol earlier this month.</p> <p>&nbsp;</p> <p><strong>&ldquo;The friendly environment that we see here in Cyprus for shipping is a great lesson, proving what the cooperation between private and governmental parties can bring.&rdquo;</strong></p> </blockquote> <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="777" height="847" alt="" src="" /> </div> </div> </div> Creditors Greece Wall Street Journal Sun, 04 Oct 2015 11:49:52 +0000 Tyler Durden 514326 at How Bad Can This Get, And How Fast? <p><em><a href="">Submitted by Raul Ilargi Meijer via The Automatic Earth</a>,</em></p> <p><strong>There&rsquo;s so much negative real bad economic and financial news out there that it&rsquo;s hard to choose a &lsquo;favorite&rsquo;, </strong>but I guess I&rsquo;m going to have to go with what underlies and &lsquo;structures&rsquo; it all, the IIF stating that for the first time since 1988 and the Reagan presidency, there&rsquo;s more money flowing out of emerging markets than there&rsquo;s flowing in. <strong><em>That is for sure a watershed moment.</em></strong></p> <p>And no, that trend is not going to be reversed either anytime soon. Emerging economies, even if they wouldn&rsquo;t include China -but they do-, have relied exclusively on selling &lsquo;stuff&rsquo; to the rich world which combined cheap commodities with cheap labor, and now they see their customer base shrink rapidly just as they were preparing to harvest the big loot.</p> <p>Now, I hope I can be forgiven for thinking from the get-go that this was always a really dumb model. That emerging nations would provide the cheap labor, and the west would kill of its manufacturing base and turn into a service economy.</p> <p><strong>This goes very predictably wrong if and when we figure out </strong>that A) economies that don&rsquo;t manufacture anything can&rsquo;t buy much of anything, and B) that we can sell those services our economies are &lsquo;producing&rsquo; only to ourselves, as long as the emerging nations maintain a low enough pay model to make their products worth our while to import.</p> <p><strong>It makes one wonder how many 6 year-olds would NOT be able to figure this out. </strong>In the same vein, how many of them would be hard put to understand that our economies, overwhelmed by, and drowning in, debt, cannot be rescued by more debt? Here&rsquo;s thinking the sole reason so many of us don&rsquo;t get it is that we&rsquo;ve been told it&rsquo;s terribly hard to grasp, and you need a 10-year university course to &lsquo;get it&rsquo;.</p> <p>I see a bad US jobs report coming in as we speak, and that&rsquo;s not really saying much of anything. The damage not only runs far deeper than those massaged reports, it&rsquo;s also already been done ages ago. Non-farm employment reports are Brooklyn Bridge-for-sale territory.</p> <p>We&rsquo;d all be much better off looking at the $11-13 trillion in &lsquo;value&rsquo; lost from global equity markets in Q3. Or, for that matter, at Goldman&rsquo;s statement that, and I&rsquo;m only slightly paraphrasing here, only companies buying up their own stocks could save the S&amp;P 500 for 2015.</p> <p>Think about it: <strong><em>we don&rsquo;t make much of anything anymore, and what we do make hardly anybody wants to buy, so we issue debt and buy it up ourselves.</em></strong> This may well be presented as a clever &lsquo;investment&rsquo; model, but I aks of you: how much closer to eating our own excrements are we comfortable getting?</p> <p><u><em><strong>Stock buybacks can have strategic advantages in specific circumstances in healthy economies, but massive buybacks on the back of too-cheap credit/debt is not one of those circumstances. It&rsquo;s desperation writ very large.</strong></em></u></p> <p>One other article that stuck out, because it brings into the bright shining limelight the longtime Automatic Earth assertion that we are headed for a disastrous &ldquo;multiple claims to underlying real wealth&rdquo;, is Paul Brodsky&rsquo;s piece served by Tyler Durden. It has far more value than any alleged jobs article, because it describes the real world, not some distorted fantasy:</p> <p style="margin-left: 20px;"><a href="" target="new"><span style="font-size: 13px; color: #ff2222; font-weight: bold;"> There Are Five Times More Claims On Dollars As Dollars In Existence </span></a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>[..] the data show plainly there are five times as many claims for US dollars as US dollars in existence. Does this matter to investors? Well, yes, it matters a lot. Not only is there not enough money to repay outstanding debt; the widening gap between credit and money is making it more difficult to service the debt and more difficult for nominal US GDP to grow through further credit extension and debt assumption. </em></p> <p>&nbsp;</p> <p><em>Remember, only a dollar can service and repay dollar-denominated debt. Principal and interest payments cannot be made with widgets or labor, only dollars. This means that future demand and output growth generated through more credit issuance and debt assumption is self-defeating. In fact, it adds to the problem. </em></p> <p>&nbsp;</p> <p><em>[..] the value of dollar-denominated assets is not supported by the money with which it is ostensibly valued. This has not been a problem historically because the proportion of un-reserved credit has been low relative to asset values and cash flow. As we are seeing today, however, it is becoming a significant problem because balance sheets are already highly levered and zero-bound interest rates chokes off the incentive to refinance asset prices higher.</em></p> <p>&nbsp;</p> <p><em>If the total value of US denominated assets is, say, $100 trillion, and the US dollar money stock is somewhere around $12 trillion, then the inescapable implication is that the market&rsquo;s expects either: a) $88 trillion more US dollars will be created in the future to fund the purchase of the gross asset pool at current valuations; b) there has to be a decline in the nominal value of aggregate assets, or; c) both.</em></p> </blockquote> <p><strong>The US is not going to &lsquo;create&rsquo; $88 trillion. More debt cannot solve this. </strong>And so the only option available is a huge decline in asset &lsquo;values&rsquo;. &lsquo;Values&rsquo; that have been grossly distorted for years now, and which we all could have known can&rsquo;t be kept from falling back to earth indefinitely.</p> <p><strong>Just Friday morning, we saw 3 other key indicators all point way down. </strong>That&rsquo;s not in itself peculiar or anything, what&rsquo;s peculiar is that it&rsquo;s taken so long for people to figure out which way the wind blows. And I betcha, most still won&rsquo;t get it. <u><strong>Because they&rsquo;re all exclusively looking for signs of a recovery.</strong></u></p> <p>They&rsquo;ve been looking for 8 years or so now, and there&rsquo;s always some piece of data that can be found to feed the blinders, but it&rsquo;s all been nonsense for 8 years running. <u><em><strong>Your economy, my economy, and the global economy, can and will not recover, and certainly not as long as more debt is injected in our already insanely overindebted financial systems.</strong></em></u></p> <p>You can&rsquo;t fight historically unequaled amounts of debt with even more debt. But yeah, well, that&rsquo;s the only trick our pony can think of. Those 3 key indicators -and there&rsquo;s more where they came from- are the Guardian Gauge: <a href="" target="new"> &lsquo;Destruction Of Wealth&rsquo; Warning Looms Over Stocks</a>, the Global Dow: <a href="" target="new"> Key Global Equity Index Has Fallen Off The Precipice</a> and the IIF&rsquo;s take on net capital flows for global emerging markets I started out with, <a href="" target="new"> Is This The Mother Of All Warnings On Emerging Markets?</a></p> <p>I don&rsquo;t want to make this another of those endless articles, but do click the links, and do read up on each of them. And then shiver. Have a stiff drink. Unless you&rsquo;re still looking for a recovery. And let&rsquo;s not forget, yes, it&rsquo;s true that massive stock buybacks in the US, Europe, perhaps even China, as well as more QE to infinity and beyond, may save a bunch of numbers and you might be sitting pretty yet under the yuletide tree.</p> <p><strong>But the simplest of principles stands no matter what: there&rsquo;s no way out of this that doesn&rsquo;t lead through the exact kind of massive debt deleveraging that all governments and central banks are ostensibly trying desperately to prevent. </strong>And which will make the debt deflation, certainly after 8 years of trying to push the 180&ordm; opposite way, epic and monumental.</p> <p>On the bright side: at least if you would have read the Automatic Earth through those past 8 years, you would have known and hopefully been prepared for that debt deflation. It&rsquo;s not as if it&rsquo;s something new or unexpected, not around here.</p> <p><strong>$13 trillion in market losses in just one quarter would be very hard to make up for even in very favorable circumstances. We have no such circumstances. </strong>We&rsquo;ve built our very lives on squeezing China et al for 27 years, and issuing more debt as if there&rsquo;s no tomorrow - sort of a self-fulfilling prophecy -, and now we&rsquo;ve belatedly realized that there&rsquo;s a time limit on that model.</p> <p>But hey, by all means, it&rsquo;s your money, and it&rsquo;s your life, <em><strong>so do keep on betting on that recovery, and the return to &lsquo;normal&rsquo;, whatever that once was.</strong></em> Put it all on red. Go crazy! You do risk becoming a lonely crowd though. Meanwhile, those of us down here with our feet planted in the real earth have just this one question: <strong><em>&ldquo;How bad can this get, and how fast?&rdquo;.</em></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="138" height="189" alt="" src="" /> </div> </div> </div> B+ Central Banks China Equity Markets Global Economy recovery Tyler Durden Sun, 04 Oct 2015 11:07:25 +0000 Tyler Durden 514325 at The Largest US Foreign Policy Blunder Since Vietnam Is Complete: Iran Readies Massive Syrian Ground Invasion <p>On Thursday, in “<a href="">Mid-East Coup: As Russia Pounds Militant Targets, Iran Readies Ground Invasions While Saudis Panic</a>”, we attempted to cut through all of the Western and Russian media propaganda on the way to describing what Moscow’s involvement in Syria actually portends for the global balance of power. Here are a few excerpts that summarize what’s taking shape in the Middle East:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em>Putin looks to have viewed this as the ultimate geopolitical win-win. That is, Russia gets to i) expand its influence in the Middle East in defiance of Washington and its allies, a move that also helps to protect Russian energy interests and preserves the Mediterranean port at Tartus, and ii) support its allies in Tehran and Damascus thus preserving the counterbalance to the US-Saudi-Qatar alliance.&nbsp;</em></p> <p>&nbsp;</p> <p><em>Meanwhile, Iran gets to enjoy the support of the Russian military juggernaut on the way to protecting the delicate regional nexus that is the source of Tehran’s Mid-East influence. It is absolutely critical for Iran to keep Assad in power, as the loss of Syria to the West would effectively cut the supply line between Iran and Hezbollah.</em></p> <p>&nbsp;</p> <p><strong><em>It would be difficult to overstate the significance of what appears to be going on here. This is nothing short of a Middle Eastern coup, as Iran looks to displace Saudi Arabia as the regional power broker and as Russia looks to supplant the US as the superpower puppet master.&nbsp;</em></strong></p> </blockquote> <p>In short, the Pentagon’s contention that Russia and Iran have formed a Mid-East “nexus” isn’t akin to the Bush administration’s hollow, largely bogus attempt to demonize America’s foreign policy critics in the eyes of the public by identifying an “axis of evil.” Rather, the Pentagon’s assessment was an attempt to come to grips with a very real effort on the part of Moscow and Tehran to tip the scales in the Mid-East away from Riyadh and Washington.</p> <p>Solidifying the Assad regime in Syria serves to shore up Hezbollah and presents Tehran with an opportunity to assert itself in the name of combatting terror. The latter point there is critical. The West has long contended that Iran is the world’s foremost state sponsor of terror, and the Pentagon has variously accused the Quds Force of orchestrating attacks on US soldiers in Iraq after cooperation between Washington and Tehran broke down in the wake of Bush’s “axis of evil” comment. </p> <p>Indeed, Iran was accused of masterminding a plot to kill the Saudi ambassador at a Washington DC restaurant in 2011. </p> <p>Now, the tables have turned.&nbsp;<span style="font-size: 1em; line-height: 1.3em;">It is the US, Saudi Arabia, and Qatar who stand accused of sponsoring Sunni extremists and it is Iran, and specifically the Revolutionary Guard, that gets to play hero.</span></p> <p>Of course this would be largely impossible without Moscow’s stamp of superpower approval. The optics around the P5+1 nuclear deal were making it difficult for Tehran to be too public in its efforts to bolster Assad. That doesn’t mean Tehran’s support for the regime in Syria hasn’t been well documented for years, it simply means that Iran needed to observe some semblance of caution, lest its role in Syria should end up torpedoing the nuclear negotiations. Now that Moscow is officially involved, that caution is no longer obligatory and Iran is now moving to support Russian airstrikes with an outright ground incursion (just as we’ve been <a href="">saying for weeks</a>). Here’s <a href="">WSJ</a>:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong><em>Iran is expanding its already sizable role in Syria’s multisided war in the wake of Russia’s airstrikes, despite the risk of antagonizing the U.S. and its Persian Gulf allies who want to push aside President Bashar al-Assad.</em></strong></p> <p>&nbsp;</p> <p><em>Politicians in the region close to Tehran as well as analysts who have been closely following its role in Syria say a decision has been made, in close coordination with the Russians and the Assad regime, to increase the number of fighters on the ground through Iran’s network of local and foreign proxies.</em></p> <p><em>The support also could involve more Iranian commanders, military advisers and expert fighters usually assigned to these units, these people said.</em></p> <p>&nbsp;</p> <p><strong><em>Wiam Wahhab, a former Lebanese minister allied to Iran and Mr. Assad, stressed that Iran wouldn’t be dispatching troops in the conventional sense. Instead, they were likely to be officers and advisers from the Islamic Revolutionary Guard Corps, or IRGC, he said.</em></strong></p> <p>&nbsp;</p> <p><em>“I know there is a major battle upon us and everything needed for this battle will be made available,” said Mr. Wahhab, who has some members from his own political party fighting in Syria alongside the regime. “There is a plan to carry out offensive operations in more than one spot.”</em></p> <p>&nbsp;</p> <p><em>Experts believe Iran has some 7,000 IRGC members and Iranian paramilitary volunteers operating in Syria already.</em></p> <p>&nbsp;</p> <p><em>Separate from the regular army, the IRGC was founded in the aftermath of the 1979 revolution as an ideological “people’s army” reporting directly to the supreme leader, Iran’s top decision maker.</em></p> <p>&nbsp;</p> <p><em>The more than 100,000-strong force controls a vast military, economic and security power structure in Iran and is in charge of proxies across the region. Its paramilitary organization, the Basij, was the lead force in the crackdown on pro-democracy demonstrators in 2009.</em></p> <p>&nbsp;</p> <p><em>Since late 2012 Iran has played a lead role in organizing, training and funding local pro-regime militias in Syria, many of them members of Mr. Assad’s Alawite minority, a branch of Shiite Islam. Experts believe they number between 150,000 and 190,000—possibly more than what remains of Syria’s conventional army.</em></p> <p>&nbsp;</p> <p><strong><em>What’s more, some experts estimate 20,000 Shiite foreign fighters are on the ground, backed by both Shiite Iran and its main proxy in the region, the Lebanese Shiite militia Hezbollah.</em></strong></p> <p>&nbsp;</p> <p><em><strong>About 5,000 of them are new arrivals from Iraq in July and August alone, said Phillip Smyth, a researcher at the University of Maryland. </strong>He said this figure was compiled through his own contacts with some of these fighters, flight data between Baghdad and Damascus as well as social media postings. <strong>“It looks like it was timed out to coincide with the Russian move,”</strong> Mr. Smyth said.</em></p> </blockquote> <p>Yes, it certainly does "look like" that, and it wasn't hard to see this coming. Here's another excerpt from our recent analysis:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em>Back in June, the commander of Iran’s Quds Force, Qasem Soleimaini, visited a town north of Latakia on the frontlines of Syria’s protracted civil war. Following that visit, he promised that Tehran and Damascus were set to unveil a new strategy that would “surprise the world.”&nbsp;</em></p> <p>&nbsp;</p> <p><em>Just a little over a month later, Soleimani - in violation of a UN travel ban - visited Russia and held meetings with The Kremlin.</em></p> </blockquote> <p>Make no mistake, this is shaping up to be the most spectacular US foreign policy debacle since Vietnam - and we don't think that's an exaggeration.&nbsp;</p> <p>The US, in conjunction with Saudi Arabia and Qatar, attempted to train and support Sunni extremists to overthrow the Assad regime. Some of those Sunni extremists ended up going crazy and declaring a Medeival caliphate putting the Pentagon and Langley in the hilarious position of being forced to classify al-Qaeda as "moderate." The situation spun out of control leading to hundreds of thousands of civilian deaths and when Washington finally decided to try and find real "moderates" to help contain the Frankenstein monster the CIA had created in ISIS (there were of course numerous other CIA efforts to arm and train anti-Assad fighters, see below for the fate of the most "successful" of those groups), the effort ended up being a complete embarrassment that culminated with the admission that only "<a href="">four or five</a>" remained and just days after that admission, those "four or five" <a href="">were car jacked</a> by al-Qaeda in what was perhaps the most under-reported piece of foreign policy comedy in history. </p> <p>Meanwhile, Iran sensed an epic opportunity to capitalize on Washington's incompetence. Tehran then sent its most powerful general to Russia where a pitch was made to upend the Mid-East balance of power. The Kremlin loved the idea because after all, Moscow is stinging from Western economic sanctions and Vladimir Putin is keen on showing the West that, in the wake of the controversy surrounding the annexation of Crimea and the conflict in eastern Ukraine, Russia isn't set to back down. Thanks to the fact that the US chose extremists as its weapon of choice in Syria, Russia gets to frame its involvement as a "war on terror" and thanks to Russia's involvement, Iran gets to safely broadcast its military support for Assad just weeks after the nuclear deal was struck. Now, Russian airstrikes have debilitated the only group of CIA-backed fighters that had actually proven to be somewhat effective and Iran and Hezbollah are preparing a massive ground invasion under cover of Russian air support. Worse still, the entire on-the-ground effort is being coordinated by the Iranian general who is public enemy number one in Western intelligence circles and he's effectively operating at the behest of Putin, the man that Western media paints as the most dangerous person on the planet.&nbsp;</p> <p>As incompetent as the US has proven to be throughout the entire debacle, it's still difficult to imagine that Washington, Riyadh, London, Doha, and Jerusalem are going to take this laying down and on that note, we close with our assessment from Thursday:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em>If Russia ends up bolstering Iran's position in Syria (by expanding Hezbollah's influence and capabilities) and if the Russian air force effectively takes control of Iraq thus allowing Iran to exert a greater influence over the government in Baghdad, the fragile balance of power that has existed in the region will be turned on its head and in the event this plays out,<strong> one should not expect Washington, Riyadh, Jerusalem, and London to simply go gentle into that good night.</strong></em></p> </blockquote> <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="581" height="343" alt="" src="" /> </div> </div> </div> Iran Iraq Middle East Saudi Arabia Ukraine Vladimir Putin Sun, 04 Oct 2015 11:04:26 +0000 Tyler Durden 514303 at The Media-Opoly: Cancelled, From Saturday Night, It's Conspiracy Theory Rock! <p>A day after we ran "<a href="">Meet Your "Independent" Media, America</a>", in which we showed how prime time entertainment like 60 Minutes is strategically and voluntarily "planted" with propaganda trolls and "concerns" thus crushing any "unbiased" credibility mainstream US media may have, we dug into the archives to bring you "Conspiracy Theory Rock."</p> <p>This cartoon created by SNL cartoonist Robert Smigel in 1998 ran once in a "<a href="">TV Funhouse</a>" segment, and has been since removed from all subsequent airings of the Saturday Night Live episodes. As a reminder, 90% of US media is currently controlled by 6 corporations: General Electric, News Corp., Disney, Viacom, Time Warner and CBS... </p> <p><a href=""><img src="" width="550" height="277" /></a></p> <p><a href=""><img src="" width="553" height="364" /></a></p> <p>... whose shareholders vastly overlap. </p> <p>Michaels claimed the edit was done because it "wasn’t funny." </p> <p>Well, it's funny now because for once the propaganda facade of the mainstream media cracked <em>from within</em>, and the result was this critique of corporate media ownership, including then NBC’s ownership by General Electric/Westinghouse, and how only the stuff the owners deem appropriate is distributed for general consumption. </p> <p>We doubt the current parent of NBC (and CNBC), Comcast, would play it either.</p> <p><iframe src="" width="550" height="413" frameborder="0"></iframe></p> Comcast General Electric NBC News Corp Time Warner Viacom Sun, 04 Oct 2015 01:27:53 +0000 Tyler Durden 514323 at Inside A Mid-East Coup: A Closer Look At The Russia-Iran Power Play <p>Earlier today, we <a href="">ventured to characterize</a> the breakdown of Washington’s strategy in Syria as the worst US foreign policy blunder since Vietnam.&nbsp;</p> <p>To be sure, that’s a bold claim, but it’s supported by the sheer number of missteps, bad outcomes, and outright absurdities that have developed in the Mid-East as a result of the effort to oust Bashar al-Assad.&nbsp;</p> <p><strong>At the most basic level, the support provided by Washington, Riyadh, and Doha for the various Sunni extremist groups battling for control of Syria has created a humanitarian crisis of epic proportions.</strong> Hundreds of thousands of people are dead and millions are displaced. As tragic as the situation already is, the conditions are ripe for it to get even worse if the move by Brussels to force recalcitrant EU countries into accepting a migrant quota system they are opposed to ends up triggering a dangerous bout of xenophobia in the Balkans.</p> <p><span style="font-size: 1em; line-height: 1.3em;">Washington’s move to train and arm the Syrian opposition has of course also led directly to the creation of a group of black flag-waving jihadists that have taken the term “extremists” to a whole new level on the way to producing a series of slickly-produced videos depicting the murder of Westerners. This same group is now stomping around between Syria and Iraq wreaking havoc on civilians and committing acts so heinous that even al-Qaeda has condemned them.</span></p> <p>Of course the outright chaos the West has managed to create in Syria has now come full circle, providing Iran and Russia with a unique opportunity to tip the scales and seize power in the Mid-East.&nbsp;</p> <p>What's important to understand here, is that this isn’t confined to Syria.</p> <p>That is, Iran isn't content to preserve its supply line with Hezbollah and Russia isn't content to play spoiler to the US by propping up Assad. There's something far more meaningful going on here and it can be readily observed in Iraq.</p> <p>For years, Iran exercised its influence in Iraq via various Shiite militias controlled by Quds commander Qasem Soleimani. Now, it looks as though the deal struck between Tehran and Moscow in July included a power play designed to gradually muscle the US out of the way in Baghdad. The first concrete evidence of this came late last month when Iraq announced an intelligence sharing agreement with Russia and Syria but the story goes far deeper than that. Consider the following from The <a href="">Washington Institute</a>:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em>On September 21, the Wall Street Journal reported that forces under the command of Iran, Russia, and Bashar al-Assad were coordinating efforts to secure the Syrian regime. <strong>As Moscow sends advanced aircraft, armored vehicles, and more, Iran's Iraqi Shiite proxies have simultaneously stepped up their recruitment and deployment for the Syria war.</strong> Since July, their Syria-focused online campaigns have jumped significantly (see chart), morphing from infrequent mentions in late 2014/early 2015 to a full-fledged recruitment program involving a number of newer Iranian-backed groups. These Shiite fighters are now spread across Syria, primarily in the western part of the country, launching operations from the suburbs of Damascus to Idlib.</em></p> <p>&nbsp;</p> <p><img src="" /></p> <p>&nbsp;</p> <p><em>Following the June 2014 seizure of Mosul and much of northern Iraq by the so-called Islamic State/ISIS, a group called Kataib al-Imam Ali (KIA) announced its creation. <strong>Formed by Iranian-controlled splinter elements from Muqtada al-Sadr's Mahdi Army, KIA is probably best known for its fierce battlefield reputation and particularly gory videos featuring severed heads and men being cooked above open flames.</strong></em></p> <p>&nbsp;</p> <p><em>When compared to other organizations, KIA's Syria-focused recruitment and propaganda campaign has been the largest. <strong>Using messages issued via its offices, billboards, and social media, the group has actively recruited new members, especially around Najaf, Iraq.</strong> These efforts began with online imagery connecting its fighters with Sayyeda Zainab, an important Shiite shrine near Damascus. Other posts have announced that Jaafar al-Bindawi, the militia's former head of training and logistics, would be leading the deployment in Syria, while Ali Nizam would serve as the new logistical director for Syrian affairs.</em></p> <p>&nbsp;</p> <p><em>While this effort marks the group's first publicized deployments to Syria, KIA is no newcomer to the war. Prior to its formal creation, and with Iranian assistance, elements of the militia were very active in Syria beginning in 2013. Alaa Hilayl, one of the group's heavily glorified "martyrs" and leader of its submilitia Kataib Malik al-Ashtar, was one of the first Shiite commanders to publicly announce combat operations in the Aleppo area in spring 2013.</em></p> <p>&nbsp;</p> <p><em><strong>Meanwhile, Harakat Hezbollah al-Nujaba (HHN, a.k.a. "The Hezbollah Movement of the Outstanding," or simply Harakat al-Nujaba) has been the other main Iraqi Shiite player in Syria recruitment, and its background is similar to KIA's.</strong> HHN emerged from Iranian-controlled Sadrist splinter group Asaib Ahl al-Haq (AAH) in 2013 and is led by that group's cofounder, Sheikh Akram Kaabi.</em></p> <p>&nbsp;</p> <p><strong><em>Internet-based propaganda and recruitment materials (mainly through social media) often serve as harbingers of larger moves by Iran's Iraqi Shiite proxies. This summer, these groups began to disseminate a collection of professionally produced imagery in a highly organized manner, all aimed at raising awareness of the Syria fight and calling for new recruits.</em></strong></p> <p>&nbsp;</p> <p><em>Previously, in fall 2014, the Iranian-backed Iraqi Shiite group Kataib Sayyid al-Shuhada (KSS) instituted a sporadic Internet recruitment program. The group's fighters were primarily deployed for a failed campaign on Syria's southern front that lasted into early 2015. Meanwhile, HHN initiated its own limited recruitment program from December to April. Both programs demonstrated that Iraqi Shiites would once again play a major role in Syria (see PolicyWatch 2430, "Iraqi Shiite Foreign Fighters on the Rise Again in Syria"). Yet these moves were only the tip of the iceberg.</em></p> <p>&nbsp;</p> <p><em>While May and June were relatively quiet on this front, Iraqi Shiite recruitment for Syria quickly began to rise in July and spiked in August. September saw slightly decreased recruitment and propaganda posts online, but the traffic was still sizable enough to be regarded as a continuation of the Syria program.</em></p> <p>&nbsp;</p> <p><em>According to fighters who promoted recruitment material or were sent to Syria in late July, training for the deployment often lasted around thirty days and took place in Lebanon or Iran. Considering that most training regimens for Shiite fighters heading to Syria have lasted between two and six weeks (depending on specialization), Iran likely timed the uptick in deployments to best demonstrate unity of arms with Russia and Assad. <strong>Specifically, the main spike in recruitment activity began in earnest on July 3, the first reports of experienced KIA fighters deploying to Syria emerged on July 20, and Qasem Soleimani -- commander of Iran's elite Qods Force -- met with Russian officials on July 24.</strong></em></p> </blockquote> <p>And here's a map <a href=";utm_campaign=Iraq+Situation+Report+July+28-30%2C+2015&amp;utm_medium=email">from ISW</a> which "depicts confirmed locations of Iranian Revolutionary Guard Corps (IRGC) commanders in Iraq between October 2014 and October 2015." ISW continues: "orange markers indicate where IRGC personnel were spotted in an area witnessing active military operations [and] asterisks indicate a Soleimani sighting":</p> <p><a href=""><img src="" width="600" height="650" /></a></p> <p>In short, what's happened here is that once Tehran secured the support of the Russian air force juggernaut, the IRGC diverted its Iraqi militias to Syria, where they will now join Hezbollah and ensure that Putin's airstrikes are bolstered when needed by effective ground support.&nbsp;</p> <p>The announcement this week by Baghdad that Iraq would welcome Russian airstrikes against ISIS indicates that once Moscow and Tehran have restored Assad and stabilized Syria, the joint air and ground campaign will move to Iraq, a strategic shift that will complete what we have characterized as <a href="">an outright Mid-East coup</a>.&nbsp;</p> <p>If this thesis materializes, it will mean that the West's attempt to destabilize the Assad regime has not only failed, but has in fact opened the door for Iran to seize control of the Mid-East and for Russia to reestablish itself as a global superpower capable of bringing its influence to bear on any nation at any time.&nbsp;</p> <p>It's your move Washington, and the stakes couldn't possibly be higher...</p> Iran Iraq Wall Street Journal Sun, 04 Oct 2015 00:29:29 +0000 Tyler Durden 514321 at Will The Failure Of Central Banking Lead To Global Bloodshed: The French Revolution Case Study <p><em>Submitted by Michael Lebowitz of <a href="">720 Global</a></em><a href=""></a></p> <p><strong>Shorting the Federal Reserve - Part Deux</strong></p> <p>The sequence of events leading up the French Revolution are likely unfamiliar to most. Yet money printing and a debauched French currency played no small part in those events. As a sequel to “<a href="">Shorting the Federal Reserve</a>”, 720 Global aims to provide an historical example of excessive money printing which lead to financial crisis, and ultimately the revolution of a major sovereign nation. More than a history lesson, this article effectively illustrates the road on which the U.S. and many other nations currently travel. The story relayed in this article is not a forecast for what may happen but a simple reminder of what has repeatedly happened in the past.</p> <p>As you read, notice the story lines the French politicians used to persuade the opposition and justify money printing. Note the similarities to the rationales used by central bankers and neo?Keynesians today. Then, as now, it is promoted as a cure for economic ills with manageable consequences and where failure to generate a sustainable recovery are thought to be a failure of not having acted boldly enough.</p> <p>Our gratitude to the late Andrew D. White, on whose work we relied heavily. The exquisite account of France circa the 1780?1790’s was well documented in his paper entitled “Fiat Money Inflation in France” published in?1896. Any unattributed quotes were taken from his paper. </p> <p><strong>Before The Presses Rolled</strong></p> <p>During the 1700’s France accumulated significant debts under the reigns of King Louis XV and King Louis XVI. The combination of wars, significant financial support of America in the Revolutionary War, and lavish government spending were key drivers of the deficit. Through the latter part of the century, numerous financial reforms were enacted to stem the problem, but none were successful. On a few occasions, politicians supporting fiscal austerity resigned or were fired because belt tightening was not popular and the King certainly didn’t want a revolution on his hands. For example, in 1776 newly anointed Finance Minister Jacques Necker believed France was much better off by taking large loans from other countries instead of increasing taxes as his recently fired predecessor argued. Necker was ultimately replaced 7 years later when it was discovered France had heavy debt loads, unsustainable deficits, and no means to pay it back.</p> <p>By the late 1780’s, the gravity of France’s fiscal deficit was becoming severe. Widespread concerns helped the General Assembly introduce spending cuts and tax increases. They were somewhat effective but the deficit was very slow to decrease. The problem, however, was the citizens were tired of the economic stagnation that resulted from belt tightening. The medicine of austerity was working but the leaders didn’t have the patience to rule over a stagnant economy for much longer. The following quote from White sums up the situation well:</p> <p><em>“Statesmanlike measures, careful watching and wise management would, doubtless, have ere long led to a return of confidence, a reappearance of money and a resumption of business; but these involved patience and self?denial, and, thus far in human history, these are the rarest products of political wisdom. Few nations have ever been able to exercise these virtues; and France was not then one of these few”.</em></p> <p>By 1789, commoners, politicians and royalty alike continuously voiced their impatience with the weak economy. This led to the notion that printing money could revive the economy. The idea gained popularity and was widely discussed in public meetings, informal clubs and even the National Assembly. In early 1790, detailed discussions within the Assembly on money printing became more frequent. Within a few short months, chatter and rumor of printing money snowballed into a plan. The quickly evolving proposal was to confiscate church land, which represented more than a quarter of France’s acreage to “back” newly printed Assignats (the word assignat is derived from the Latin word assignatum – something appointed or assigned).</p> <p>This was a stark departure from the silver and gold backed Livre, the currency of France at the time. Assembly debate was lively, with strong opinions on both sides of the issue. Those against it understood that printing fiat money failed miserably many times in the past. In fact, the John Law/Mississippi bubble crisis of 1720 was caused by an over issue of paper money. That crisis caused, in White’s words, “<em>the most frightful catastrophe France had then experienced</em>”. History was on the side of those opposed to the new plan.</p> <p>Those in favor looked beyond history and believed this time would be different. They believed the amount of money printed could be controlled and ultimately pulled back if necessary. It was also argued new money would encourage people to spend and economic activity would surely pick up. Another popular argument was France would benefit by selling the confiscated lands to its people and these funds would help pay off its debts. In addition, land ownership by the masses strengthened French patriotism.</p> <p>The debate was won by those in favor of printing. <strong>As we have seen many times before and after this event, hope and greed won out over logic, common sense and most importantly, history. Per White?</strong> “<em>But the current toward paper money had become irresistible. It was constantly urged, and with a great show of force, that if any nation could safely issue it, France was now that nation; that she was fully warned by her severe experience under John Law; that she was now a constitutional government, controlled by an enlightened, patriotic people,??not, as in the days of the former issues of paper money, an absolute monarchy controlled by politicians and adventurers; that she was able to secure every livre of her paper money by a virtual mortgage on a landed domain vastly greater in value than the entire issue; that, with men like Bailly, Mirabeau and Necker at her head, she could not commit the financial mistakes and crimes from which France had suffered under John Law, the Regent Duke of Orleans and Cardinal Dubois”.</em> <strong>This time was different in their collective minds!</strong></p> <p><strong>April 1790</strong></p> <p>The final decree was passed and 400 million Assignats, backed by confiscated church property, were issued. The notes were quickly put into circulation and “engraved in the best style of the art”, as shown below.</p> <p><a href=""><img src="" width="600" height="353" /></a></p> <p>As one might suspect the church decried the action, but the large majority of French were in favor. The press and assemblymen extolled the virtues of this new money. They spoke and wrote of future prosperity and an end to the economic oppression. They thought they found a cure for their economic ills.</p> <p>Upon the issuance of the new money, economic activity picked up almost immediately. As expected, the money allowed for a portion of the national debt to be paid off as well. Confidence and trade expanded. The summer of 1790 proved to be an economic boom time for France.</p> <p><strong>Fall 1790</strong></p> <p>The good times were limited. By October, economic activity was back in decline and with it came a renewed call for more money printing. Per White? “<em>The old remedy immediately and naturally recurred to the minds of men. Throughout the country began a cry for another issue of paper</em>”. The deliberations regarding money printing were rekindled with many of the same arguments on both sides of the debate re?hashed<strong>. A new argument for those in favor of printing was simply that the original 400 million Assignats was not enough.</strong></p> <p>While those favoring money printing acknowledged the dangers of their actions, they were also dismissive about them at the same time. These Assemblymen believed if a little medicine appeared to work with no side effects why not take more. Debate this time around was easier for the pro?printing consortium. Of note was a well?respected elder statesman of the Assembly and national hero named Gabriel Riqueti, Comte de Mirabeau (Mirabeau). During the first round of debates, Mirabeau was strongly against the issuance of the new currency. In fact he said the following:<em> “A nursery of tyranny, corruption and delusion; a veritable debauch of authority in delirium” in regards to paper money. He even called the issuance of money “a loan to an armed robber”.</em></p> <p>While Mirabeau clearly understood the effects of printing money, he was now swayed by the arguments of a stronger economy. He also appreciated the benefits of making a large class of landholders for the first time. Mirabeau reversed his opinion and joined the ranks of those believing France could control the inflationary side effects. He now argued for one more issue of Assignats. As a precautionary measure he insisted that as soon as paper became abundant, self?governing laws of economics would ensure the money was retired. <strong>Mirabeau went as far&nbsp; as recommending the new amount of printed money should be enough to pay down the entire debt of France ? 2,400 million!</strong></p> <p>The naysayers warned of the ills of the proposed second printing. Of note was Necker. If you recall he was partially responsible for the debt buildup that led to France’s problems. Necker “<em>predicted terrible evils” </em>and offered other means to accomplish economic growth. His opinions were not popular and Necker was “<em>spurned as a man of the past</em>” by the Assembly and ultimately left France forever. A powerful pamphlet, written by Du Pont de Nemours was popular amongst the nays and was read to the Assembly. It declared that doubling the money supply would “<em>simply increase prices, disturb values, alarm capital, diminish legitimate enterprise, and so decreases the demand for both products and for labor. The only persons to be helped by it are the rich who have large debts to pay”.</em></p> <p>The arguments of Neckar and Du Pont de Nemours fell on deaf ears. Those in favor rebutted with comments that printing more money was <em>“the only means to insure happiness, glory and liberty to the French nation</em>”. They took the prior debate a step further and now theorized that the gold and silver Livres would be undesirable as Assignats would be the only currency people demanded.</p> <p>On the 29th of September 1790, a bill authorizing the issuance of 800 million Assignats was passed. The bill also decreed that when Assignats were paid back to the government for land they should be burned. This added measure was thought of as a way to ensure the newly printed money was not inflationary.</p> <p>White commented: <em>“France was now fully committed to a policy of inflation; and, if there had been any question of this before, all doubts were removed” he went on discussing how “exceedingly difficult it is stopping a nation once in the full tide of a depreciating currency”. </em></p> <p>It turns out the money returned to the government wasn’t burned but was re?issued in smaller denominations. Within a short period 160 million was paid to the government for lands and was reissued “<em>under the pleas of necessity”.</em></p> <p><strong>June 1791</strong></p> <p>Nine months after the second issue of 800 million Assignats, and another cycle of good economic activity followed by bad, pressure grew for more money printing. With little fanfare or debate, a new issue of 600 million was issued. With it, once again came “solemn pledges to keep down the amount in circulation”.</p> <p>This experience, like the previous two, was followed by a brief period of optimism that quickly faded. With each successive printing came currency depreciation and higher prices. Despite the beliefs of those in favor of printing, hoarding of gold and silver backed coins was occurring. The French people were watching their paper money lose value and becoming more interested in preserving their wealth. The coins were in limited supply while paper money was being printed with increasing frequency. In their minds, gold and silver offered the stability that&nbsp; paper money was rapidly losing.</p> <p><em>“Still another troublesome fact began to now appear. Though paper money had increased in amount, prosperity had steadily diminished. In spite of all the paper issues, commercial activity grew more and more spasmodic. Enterprise was chilled and business became more and more&nbsp; stagnant”.</em></p> <p>With each new issue came increased trade and a stronger economy. The problem was the activity wasn’t based on anything but new money. As such, it had very little staying power and the positive benefits quickly eroded. Businesses were handcuffed. They found it hard to make any decisions in fear the currency would continue to drop in value. Prices continued to rise. Speculation and hoarding were becoming the primary drivers of the economy. “<em>Commerce was dead; betting took its place”. </em>With higher prices, employees were laid off as merchants struggled to cover increasing costs.</p> <p>The only ones truly benefiting were manufacturers producing goods for foreign countries and the stock brokers. The rapidly declining value of their currency attracted orders from other countries that were now able to purchase French goods very cheaply. Those businesses and consumers that relied on goods from outside the country were battered by higher prices. With the increased money supply and economic uncertainty the “ordinary motives for savings and care diminished”. Speculation increased significantly. While some stock investors in the urban regions were exploiting the condition, the onus fell on the working man. Inflation, weakening currency and lack of jobs was damaging to a large majority of Frenchmen.</p> <p>The economic conditions also brought on more crime and increased instances of bribery of government officials. Conditions were described by White as “the decay of a true sense of national pride”.</p> <p><strong>December 1791</strong></p> <p>A new issue of 300 million more Assignats was ordered to be printed. With that decree it was also ordered that a previous limit on the total amount to be printed be repudiated. By this point it was estimated the value of their currency was cut in half and inflation was rampant. </p> <p><strong>April?July 1792</strong></p> <p>Another 600 million Assignats were printed. The presses rolled on and after a few more printings it was estimated a total of 3,500 million Assignats now existed. The issuances continued through 1792 and 1793.</p> <p><em>“The consequences of these over issues now began to be more painfully evident to the people at large. Articles of common consumption became enormously dear and prices were constantly rising. Orators in the Legislative Assembly, clubs, local meetings and elsewhere now endeavored to enlighten people by assigning every reason for this depreciation save the true one. They declaimed against the corruption of the ministry, the want of patriotism among the Moderates, the intrigues of the emigrant nobles, the hard?heartedness of the rich, the monopolizing&nbsp; spirit of the merchants, the perversity of the shopkeepers, ???each and all of these as causes of the difficulty”.</em></p> <p><strong>French Revolution</strong></p> <p>Throughout 1792 and 1793 there were instances of mobs demanding basic necessities such as bread, sugar and coffee. Peaceful demonstrations turned violent and plundering of the local shops was commonplace. The French Revolution was born.</p> <p>Money printing was not the sole cause of the revolution, but it certainly helped light the fuse. In all fairness, the French people were demanding the same liberties they helped America fight for. The idea of a Monarchy was fading and those supporting democratic principles were leading the charge. In hindsight, money printing was a last ditch effort to create prosperity and keep the Revolution at bay. Poverty and despair spread through France. Malnutrition and hunger due to lost employment and inflation fed the Revolution. In 1792 a republic was proclaimed and in the following year King Louis XVI was sent to the guillotines.&nbsp; </p> <p><strong>Conclusion</strong></p> <p>The story retold in this article echoes that of other nations before and after it. The language, promises, and ultimately the excuses used by the politicians are a familiar refrain. There is nothing new with money printing or “quantitative easing” as modern day central bankers call it. Despite the passing of over 200 years and substantial development in the world, <strong>plus ça change </strong>(the more that changes, the more it is the same thing).</p> <p>As stressed in part 1 of this series “<a href="">Shorting the Federal Reserve</a>”, gold has a long history serving as a tool of wealth preservation. After numerous financial crises caused by the debasement of currencies have modern day economists and central bankers finally figured out how to print money with no consequences? <strong>Despite our wishes to the contrary, every action still has an equal and opposite reaction (consequence). The investment pundits who see nothing wrong with the actions of the world central banks regard holding gold as ridiculous. We consider an allocation to gold as a matter of prudence given what we have seen and expect to see from central bankers desperate to maintain status quo.</strong></p> <p>Hopefully after reading this and “<a href="">Shorting the Federal Reserve</a>” you will understand a little protection may go a long way in what may not be as clear cut an economic future as some would lead us to believe.</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="672" height="400" alt="" src="" /> </div> </div> </div> Central Banks Corruption Federal Reserve France Money Supply National Debt None recovery Sat, 03 Oct 2015 23:29:04 +0000 Tyler Durden 514316 at Global Dollar Funding Shortage Intesifies To Worst Level Since 2012 <p>The last time we observed one of our long-standing favorite topics (first <a href="">discussed in early 2009</a>), namely the global USD-shortage which manifests itself in times of stress when the USD surges against all foreign currencies and forces even the BIS and IMF to notice, <a href="">was in March of this year</a>, when we explained that "unlike the last time, when the global USD funding shortage was entirely the doing of commercial banks, this time it is the central banks' own actions that have led to this global currency funding mismatch - a mismatch that unlike 2008, and 2011, can not be simply resolved by further central bank intervention which happen to be precisely the reason for the mismatch in the first place."</p> <p>Furthermore JPM conveniently noted that "given the absence of a banking crisis currently, what is causing negative basis? The answer is monetary policy divergence. <strong>The ECB’s and BoJ’s QE coupled with a chorus of rate cuts across DM and EM central banks has created an imbalance between supply and demand across funding markets. </strong>Funding conditions have become a lot easier outside the US with QE-driven liquidity injections and rate cuts raising the supply of euro and other currency funding vs. dollar funding. This divergence manifested itself as one-sided order flow in cross currency swap markets causing a decline in the basis."</p> <p>To which we rhetorically added: "<strong>who would have ever thought that a stingy Fed could be sowing the seeds of the next financial crisis (don't answer that rhetorical question</strong>)." </p> <p>All this was happening when the market was relentlessly soaring to all time highs, completely oblivious of this dramatic dollar shortage, which just a few months later would manifest itself quite violently first in the Chinese devaluation and sale of Treasurys, and then in the unprecedented capital outflow from emerging markets as the great petrodollar trade - just as we warned in November of 2014 - went into reverse. In fact, there are very few now who <em><strong>do not </strong></em>admit the Fed is responsible for both the current cycle of soaring volatility, or what may be a market crash (<a href="">as DB just warned</a>) should the Fed not take measures to stimulate "inflation expectations" (read: more easing).</p> <p>In any event, since March we have received numerous requests for follow-up of where said funding shortage is now. So here are the latest observations on the current level of the global dollar funding shortage as measured by the Dollar fx basis, courtesy of JPM:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>The dollar fx basis declined further over the past two months. <strong>The 5-year dollar fx basis weighted across six DM currencies declined to a new&nbsp; low for the year and the lowest level since the summer of 2012 during the euro debt crisis</strong>.</p> </blockquote> <p>In other words: the USD funding shortage is even worse than it was when we looked at it in March, it still is a function of conflicting central bank liquidity flows, and while not as bad as it was at its all time worst levels in late 2011, it is slowly but surely getting there with every passing week that the Fed does not ease monetary conditions.&nbsp; </p> <p>A brief history of the three key periods of global USD-funding shortfalls:</p> <ul> <li><strong>The first episode immediately after the Lehman bankruptcy coincided with a US banking crisis that quickly became a global banking crisis via cross border linkages. </strong>Financial globalization meant that Japanese banks had accumulated a large amount of dollar assets during the 1980s and 1990s. Similarly European banks accumulating a large amount of dollar assets during 2000s created structural US dollar funding needs. The Lehman crisis made both European and Japanese banks less creditworthy in dollar funding markets and they had to pay a premium to convert euro or yen funding into dollar funding as they were unable to access dollar funding markets directly.</li> <li><strong>The second episode of very negative dollar basis took place during the Euro debt crisis. </strong>The sovereign crisis created a banking crisis making Euro area banks less worthy from a counterparty/credit risk point of view in dollar funding markets. As dollar funding markets including fx swap markets dried up, these funding needs took the form of an acute dollar shortage. European banks and companies that had dollar assets to fund had to pay a hefty premium in fx swap markets to convert their euro funding into dollar funding. Those European banks and companies that were unable to do so, were forced to liquidate dollar assets such as dollar denominated bonds and loans to reduce their need for dollar funding</li> <li><strong>The third phase of very negative dollar basis started at the end of last year. </strong>Monetary policy divergence has for sure played a role during the end of 2014 and the beginning of this year. The ECB’s and BoJ’s QE has created an imbalance between supply and demand across funding markets. Funding conditions have become a lot easier outside the US with QE-driven liquidity injections raising the supply of euro and yen funding vs. dollar funding. This divergence manifested itself as one-sided order flow in cross currency swap markets causing a decline in the basis. And we did see these funding imbalances in cross border corporate issuance. </li> </ul> <p>More from JPM: </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>Similar to the beginning of this year, the decline in the dollar fx basis is raising questions regarding shortage in dollar funding.</strong> This is because the fx basis reflects the relative supply and demand for dollar vs. foreign currency funds and an even more negative basis currently points to more intense shortage of USD funding relative to the beginning of the year. </p> <p>&nbsp;</p> <p>Figure 5 shows that the current negativity of the dollar fx basis represents the third major episode since the Lehman crisis. Before the Lehman crisis the fx basis was remarkably stable hovering around zero as funding markets were well balanced. After the Lehman crisis, funding markets experienced persistent imbalances with an almost structural shortage of dollar funding.</p> </blockquote> <p>The conclusion:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>In all, continued monetary policy divergence between the US and the rest of the world as well as retrenchment of EM corporates from dollar funding markets are sustaining an imbalance in funding markets making it likely that the current episode of dollar funding shortage will persist.</strong></p> </blockquote> <p>What does this mean in simple terms? Think back to <a href="">what David Tepper said several weeks </a>ago on CNBC when, contrary to popular opinion, he admitted he was bearish on risk assets mostly as a result of the "reserve streams" going in two different ways. This is precisely what the dollar shortage as quantified by the negative dollar basis is telling us: the policy divergence between the "tight" Fed and the ultra loose ECB and BOJ is starting to reach extreme levels, and will likely continue until the basis blows out to its theoretical limit of -50bps as set by the Fed-ECB swap line. </p> <p>At that point either the Fed will be forced to admit it was beaten by the market, and either cut rates (to negative) while perhaps unleashing even more QE to offset the monetary imbalance with the rest of the world, or it will once again engage in even more swap lines with foreign central banks as the dollar funding shortage moves beyond simply synthetic and into an actual shortage of USD "bills" all in electronic credit format of course, because as we further explained last week, it is simply impossible to satisfy all <a href="">global USD-denominated claims</a>.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="703" height="614" alt="" src="" /> </div> </div> </div> BIS Central Banks Foreign Central Banks Funding Mismatch Lehman Market Crash Monetary Policy Volatility Yen Sat, 03 Oct 2015 22:31:32 +0000 Tyler Durden 514318 at Manifesto - The Values of Value Investing <p style="margin: 0px 0px 15px; padding: 0px; border: 0px; font-stretch: inherit; font-size: 13px; line-height: 22px; font-family: verdana; vertical-align: baseline; color: #222222;"><img src="" width="311" height="162" style="display: block; margin-left: auto; margin-right: auto;" /></p> <p style="margin: 0px 0px 15px; padding: 0px; border: 0px; font-stretch: inherit; font-size: 13px; line-height: 22px; font-family: verdana; vertical-align: baseline; color: #222222;">I rarely share letters we write to IMA’s clients, but I decided to share this “Value Investor’s Manifesto” I wrote for our clients in July. It should be a helpful tool to frame recent volatility in an appropriate perspective. It’s just eight pages long, but it’s probably one of the most important pieces of writing I have done in a long, long time. Here is the first part, the introduction.</p> <h1 style="margin-bottom: 15px; padding: 0px; border: 0px; font-weight: normal; font-stretch: inherit; font-size: 32px; line-height: 1.2; font-family: 'PT Sans', Helvetica, Arial, sans-serif; vertical-align: baseline; color: #111111; text-align: center;">Manifesto</h1> <p style="margin: 0px 0px 15px; padding: 0px; border: 0px; font-stretch: inherit; font-size: 13px; line-height: 22px; font-family: verdana; vertical-align: baseline; color: #222222; text-align: center;">By Vitaliy Katsenelson, CFA</p> <h4 style="margin-bottom: 15px; padding: 0px; border: 0px; font-weight: normal; font-stretch: inherit; font-size: 20px; line-height: 1.2; font-family: 'PT Sans', Helvetica, Arial, sans-serif; vertical-align: baseline; color: #111111; text-align: center;"><span style="margin: 0px; padding: 0px; border: 0px; font-style: inherit; font-variant: inherit; font-weight: inherit; font-stretch: inherit; font-size: inherit; line-height: inherit; font-family: inherit; vertical-align: baseline; color: #003366;">Part One: Introduction</span></h4> <p style="margin: 0px 0px 15px; padding: 0px; border: 0px; font-stretch: inherit; font-size: 13px; line-height: 22px; font-family: verdana; vertical-align: baseline; color: #222222;">The relationship between a client and a money manager is like a marriage: even if you’re married to the right person, it’s just a matter of time before your relationship will hit hard times that test the strength of your marriage. After all, life is not linear, it’s full of ups and downs. The downs will ultimately test a couple’s commitment to one another.</p> <p style="margin: 0px 0px 15px; padding: 0px; border: 0px; font-stretch: inherit; font-size: 13px; line-height: 22px; font-family: verdana; vertical-align: baseline; color: #222222;">Just like life, stock returns are anything but linear. Over the last one hundred-plus years, stocks returned about 11% a year on average. But if you were to look at stock market returns on an annual basis, they were usually anything but 11%. This 11% average is the culmination of a very combustible mixture of numbers that individually bear very little resemblance to the average they result in.</p> <p style="margin: 0px 0px 15px; padding: 0px; border: 0px; font-stretch: inherit; font-size: 13px; line-height: 22px; font-family: verdana; vertical-align: baseline; color: #222222;">Side effects of nonlinearity of stock behavior clearly show up in investor returns. The financial services market research firm DALBAR studied historical returns of mutual funds and actual (realized) returns of investors who invested in those mutual funds. DALBAR’s findings were stunning. For decades fund investors had significantly underperformed the mutual funds they invested in, not by a percent or two but by a mile, capturing only a small fraction of the returns of those mutual funds.</p> <p style="margin: 0px 0px 15px; padding: 0px; border: 0px; font-stretch: inherit; font-size: 13px; line-height: 22px; font-family: verdana; vertical-align: baseline; color: #222222;">For a civilian (nonprofessional) investor, understanding the investment process of a fund manager is usually difficult. Often, performance is the only thing investors can judge objectively, so recent performance overshadows all other metrics. Investors compare the most recent returns of their favorite new mutual fund versus the returns of the one they’re holding. If the new mutual fund has done better recently, they’ll sell the old one and buy the new one. This often results in buying high and selling low.</p> <p style="margin: 0px 0px 15px; padding: 0px; border: 0px; font-stretch: inherit; font-size: 13px; line-height: 22px; font-family: verdana; vertical-align: baseline; color: #222222;">Any money manager, whether he is managing separate accounts or a mutual fund, will go through stretches where he looks smarter or dumber than he really is, though his IQ hasn’t actually changed.</p> <p style="margin: 0px 0px 15px; padding: 0px; border: 0px; font-stretch: inherit; font-size: 13px; line-height: 22px; font-family: verdana; vertical-align: baseline; color: #222222;">When we look smarter than we are, we’re not worried about what clients think of us (though we try to temper their expectations of our future brilliance). At that point our biggest concern is our own self-perception: we don’t want success to go to our heads and result in overconfidence.</p> <p style="margin: 0px 0px 15px; padding: 0px; border: 0px; font-stretch: inherit; font-size: 13px; line-height: 22px; font-family: verdana; vertical-align: baseline; color: #222222;">On the flip side, it’s just a matter of time before we look dumber than we are, and that’s when our relationship with a client gets tested. Especially if it’s a very new relationship and the client hasn’t had a chance to experience our brilliance.</p> <p style="margin: 0px 0px 15px; padding: 0px; border: 0px; font-stretch: inherit; font-size: 13px; line-height: 22px; font-family: verdana; vertical-align: baseline; color: #222222;">Historically, value investing (owning undervalued companies) has done significantly better than other strategies. Paradoxically, the reason it has done well in the long run is because it did not work consistently in the short run. If something works consistently (key word), everybody piles into it and it stops working.</p> <p style="margin: 0px 0px 15px; padding: 0px; border: 0px; font-stretch: inherit; font-size: 13px; line-height: 22px; font-family: verdana; vertical-align: baseline; color: #222222;">These aforementioned cycles of temporary brilliance and dumbness are not just common to us mere mortals. Even Warren Buffett’s Berkshire Hathaway goes through them. As just one example, in 1999, when the stock market went up 21% Berkshire Hathawaystock declined 19%. In 1999 the financial press was writing obituaries for Buffett’s investment prowess.</p> <p style="margin: 0px 0px 15px; padding: 0px; border: 0px; font-stretch: inherit; font-size: 13px; line-height: 22px; font-family: verdana; vertical-align: baseline; color: #222222;">Suddenly, in 1999 Buffett’s IQ was lagging the market by 40%. At the time investors were infatuated with internet stocks that were not making money but that were supposed to have a bright future. Investors were selling unsexy “old economy” stocks that Buffett owned to buy the “new economy” ones.</p> <p style="margin: 0px 0px 15px; padding: 0px; border: 0px; font-stretch: inherit; font-size: 13px; line-height: 22px; font-family: verdana; vertical-align: baseline; color: #222222;">If at the end of 1999, you were to sell Berkshire Hathaway and buy the S&amp;P 500 instead, you would have done the easy thing, but it would have been a large (though very common) mistake. Over the next three years Berkshire Hathaway gained over 30% while the S&amp;P declined over 40%. During the year 1999 Buffett’s IQ did not change much; in fact the (book) value of businesses Berkshire Hathaway owned went up by 0.5% that year. But in 1999 the market’s attention was somewhere else and it chose to price Berkshire Hathaway 19% lower.</p> <p style="margin: 0px 0px 15px; padding: 0px; border: 0px; font-stretch: inherit; font-size: 13px; line-height: 22px; font-family: verdana; vertical-align: baseline; color: #222222;">Where are we going with this? We look at the relationship with our clients as a partnership. For this partnership to work we need to communicate on the same wavelength. In this letter we would like to establish this common wavelength.</p> <h3 style="margin-bottom: 15px; padding: 0px; border: 0px; font-weight: normal; font-stretch: inherit; font-size: 24px; line-height: 1.2; font-family: 'PT Sans', Helvetica, Arial, sans-serif; vertical-align: baseline; color: #111111; text-align: center;"><span style="margin: 0px; padding: 0px; border: 0px; font-style: inherit; font-variant: inherit; font-weight: inherit; font-stretch: inherit; font-size: inherit; line-height: inherit; font-family: inherit; vertical-align: baseline; color: #003366;">Part Two: The Values of Value Investing&nbsp;</span></h3> <p style="margin: 0px 0px 15px; padding: 0px; border: 0px; font-stretch: inherit; font-size: 13px; line-height: 22px; font-family: verdana; vertical-align: baseline; color: #222222;">To read part TWO of this manifesto, titled the “Values of Value Investing” follow this&nbsp;<a href="" style="margin: 0px; padding: 0px; border: 0px; font-style: inherit; font-variant: inherit; font-weight: inherit; font-stretch: inherit; font-size: inherit; line-height: inherit; font-family: inherit; vertical-align: baseline; color: #409bd4; outline: 0px; transition: all 0.2s linear;">link&nbsp;</a>or this&nbsp;<a href="" style="margin: 0px; padding: 0px; border: 0px; font-style: inherit; font-variant: inherit; font-weight: inherit; font-stretch: inherit; font-size: inherit; line-height: inherit; font-family: inherit; vertical-align: baseline; color: #409bd4; outline: 0px; transition: all 0.2s linear;">http://ima?</a></p> <p style="font-family: 'Lucida Grande', Verdana, sans-serif; font-size: 13.3333px; line-height: 17.3333px;"><em>Vitaliy N. Katsenelson, CFA, is Chief Investment Officer at&nbsp;<a href="" target="_blank">Investment Management Associates</a>&nbsp;in Denver, Colo. He is the author of&nbsp;Active Value Investing&nbsp;(Wiley 2007) and&nbsp;The Little Book of Sideways Markets&nbsp;(Wiley, 2010). &nbsp;His&nbsp;<a href="" target="_blank">books</a>&nbsp;have been translated into eight languages. &nbsp;Forbes called him - the new Benjamin Graham. &nbsp;&nbsp;</em></p> <p style="font-family: 'Lucida Grande', Verdana, sans-serif; font-size: 13.3333px; line-height: 17.3333px;"><strong><span style="color: #ff6600;"><em>To receive Vitaliy’s future articles by email &nbsp;<a href="" target="_blank">click here</a>.</em></span></strong></p> Berkshire Hathaway Book Value Value Investing Volatility Sat, 03 Oct 2015 22:26:08 +0000 Vitaliy Katsenelson 514319 at Who Owns Your Presidential Candidate? <p><em>By Jake Anderson of <a href="">Antimedia</a></em></p> <p><span style="font-weight: 400;">It&rsquo;s a new era of American politics. With regard to campaign finance, the </span><a href="" target="_blank"><span style="font-weight: 400;">Citizens United</span></a><span style="font-weight: 400;"> Supreme Court ruling </span><span style="font-weight: 400;">&mdash; and the arguably worse </span><a href="" target="_blank"><span style="font-weight: 400;">McCutcheon v. FEC</span></a><span style="font-weight: 400;"> ruling </span><span style="font-weight: 400;">&mdash;</span><span style="font-weight: 400;"> opened the doors to unrestricted corporate funding of our national elections.</span></p> <p><span style="font-weight: 400;">The primary mechanism in place facilitating this flood of private money is the super PAC. You&rsquo;ve probably heard of super PACs and how they&rsquo;ve essentially taken over the role traditionally filled by individual campaign donors in Political Action Committees (PACs). But super PACs aren&rsquo;t the end of it. There are puppet political non-profits, business associations, and now, single-candidate &ldquo;dark money&rdquo; outfits that, as of September 21, have already raised $25.1 million &mdash; &nbsp;</span><a href="" target="_blank"><span style="font-weight: 400;">five times the amount</span></a><span style="font-weight: 400;"> spent by this time in the 2012 election cycle.</span></p> <p><span style="font-weight: 400;">Small, private donors still exist, of course. Their campaign contributions are still </span><a href="" target="_blank"><span style="font-weight: 400;">capped at about $5,000</span></a><span style="font-weight: 400;"> per individual, making them the tip of the iceberg in political campaign spending. Enter super PACs and single-candidate committees, who, because of the aforementioned SCOTUS rulings, have the ability to slither in between campaign finance laws and flood our elections with unlimited corporate money. The &ldquo;dark money&rdquo; </span><a href="" target="_blank"><span style="font-weight: 400;">501(c) groups</span></a><span style="font-weight: 400;">, sometimes known as &ldquo;social welfare&rdquo; organizations, are particularly insidious because, unlike super PACs, they are not required to disclose their donors to the public. Since they are legally viewed as a type of business, they don&rsquo;t have to disclose disbursements until the IRS requires it. This means there is essentially a network of politically advantageous winks and nods, whereby candidates receive unlimited parallel spending from an interconnected syndicate of super PACs, non-profits, and business associations.</span></p> <p><span style="font-weight: 400;">Of the 20 biggest spenders, </span><a href="" target="_blank"><span style="font-weight: 400;">only one</span></a><span style="font-weight: 400;"> is openly committed to a liberal viewpoint, which gives conservatives an advantage. That said, while Democrats have questioned the legality of &ldquo;dark money&rdquo; groups, they have not discounted the possibility of utilizing this tactic in addition to super PACs, which must legally disclose the source of their funds within a few weeks (though </span><a href="" target="_blank"><span style="font-weight: 400;">several groups</span></a><span style="font-weight: 400;"> have found loopholes allowing them to wait up to 7 weeks). &nbsp;</span></p> <p>Needless to say, this is an election in which most of the candidates are seeking support from wealthy donors instead of the citizens they are supposed to be representing.</p> <p><span style="font-weight: 400;">Despite the arguably undemocratic, obfuscating nature of our nation&rsquo;s campaign finance laws and the blatant corporatist agenda mandated by the Supreme Court, let&rsquo;s attempt to break down the major sources of political spending so far in the 2016 presidential election. You may be surprised to find out who is donating money to your candidate </span><span style="font-weight: 400;">&mdash; and how that contribution may affect future policy positions.</span></p> <h3><strong>JEB BUSH</strong></h3> <p><span style="font-weight: 400;">The one-time prospective GOP front-runner has taken a beating in </span><a href="" target="_blank"><span style="font-weight: 400;">recent polls</span></a><span style="font-weight: 400;">, with many politicos saying extreme factions of the conservative party aren&rsquo;t happy with his more centrist attitudes toward gay marriage, immigration, and abortion rights. But the big establishment money still has his back.</span></p> <p><em><span style="font-weight: 400;">Corporate and other Special Interest donors (</span></em><a href=";id=N00037006&amp;type=f" target="_blank"><em><span style="font-weight: 400;">top 5</span></em></a><em><span style="font-weight: 400;">):</span></em></p> <ul> <li style="font-weight: 400;"><span style="font-weight: 400;">Goldman Sachs ($161,100)</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">Neuberger Berman LLC ($65,800)</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">Bank of America ($43,750</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">Citigroup Inc ($41,500)</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">Tenet Healthcare ($35,900)</span></li> </ul> <p><em><span style="font-weight: 400;">Super PAC/&ldquo;Dark Money&rdquo;:</span></em></p> <p><em><span style="font-weight: 400;">The Right to Rise</span></em><span style="font-weight: 400;"> super PAC supports Jeb Bush and has raised </span><a href="" target="_blank"><span style="font-weight: 400;">over $100 million</span></a><span style="font-weight: 400;">. As of mid-September, the group planned to spend $24 million on television ads in Iowa, New Hampshire, and South Carolina. According to the </span><a href="" target="_blank"><span style="font-weight: 400;">Florida Center for Investigative Reporting</span></a><span style="font-weight: 400;">, the </span><a href="" target="_blank"><span style="font-weight: 400;">primary donor list</span></a><span style="font-weight: 400;"> for Jeb Bush&rsquo;s super PAC includes various spheres of influence:</span></p> <p><em><span style="font-weight: 400;">&ldquo;Texas oil men, New York investment bankers, Miami healthcare company owners, and three former ambassadors &mdash; two of whom served under Bush&rsquo;s brother, former President George W. Bush &mdash; gave 25 contributions of $1 million each. Mike Fernandez, the Cuban-American billionaire founder of Coral Gables-based MBF Healthcare Partners, gave $3 million, the largest contribution to Right to Rise.&rdquo;</span></em></p> <p>Other wealthy members of the PAC include:</p> <ul> <li style="font-weight: 400;"><em><span style="font-weight: 400;">&ldquo;</span><a href=";ticker=NOV" target="_blank"><em><span style="font-weight: 400;">Hushang Ansary</span></em></a><em><span style="font-weight: 400;">, Iran&rsquo;s ambassador to the United States from 1967 to 1969. He serves as a trustee of the George W. Bush Library. Ansary and his wife Shahla became U.S. citizens in the 1980s.</span></em></em></li> </ul> <ul> <li style="font-weight: 400;"><a href="" target="_blank"><em><span style="font-weight: 400;">Richard Kinder</span></em></a><em><span style="font-weight: 400;">, chairman and chief executive of oil and gas pipeline company Kinder Morgan. His net worth is $10 billion. Kinder&rsquo;s wife Nancy also contributed $1 million to Right to Rise.</span></em></li> </ul> <ul> <li style="font-weight: 400;"><a href="" target="_blank"><em><span style="font-weight: 400;">Alfred Hoffman</span></em></a><em><span style="font-weight: 400;">, U.S. ambassador to Portugal from 2005 to 2007. He founded Florida-based real estate company WCI Communities.</span></em></li> </ul> <ul> <li style="font-weight: 400;"><a href="" target="_blank"><em><span style="font-weight: 400;">Nextera Energy</span></em></a><em><span style="font-weight: 400;">, the publicly traded parent company of Florida Power &amp; Light, which provides electrical service to nearly half of the state. Last year, Nextera reported more than $15 billion in revenue.</span></em></li> </ul> <ul> <li style="font-weight: 400;"><a href="" target="_blank"><em><span style="font-weight: 400;">Julian Robertson Jr.</span></em></a><em><span style="font-weight: 400;">, New York hedge fund manager whose net worth is $3.4 billion. He made his fortune investing in golf resorts and vineyards in New Zealand.&rdquo;</span></em></li> </ul> <p><strong>Jeb Bush, total raised so far: over $114 million</strong></p> <h3><strong>HILLARY CLINTON &nbsp;</strong></h3> <p><span style="font-weight: 400;">In her career as a politician, </span><a href=";cid=N00000019" target="_blank"><span style="font-weight: 400;">Hillary Clinton&rsquo;s top donors</span></a><span style="font-weight: 400;"> have been Citigroup Inc., Goldman Sachs, DLA Piper, JPMorgan Chase &amp; Co, and Morgan Stanley. Many say such alliances irrevocably endear her to said institutions, rendering her incapable of reigning in financial corruption on Wall Street.</span></p> <p><span style="font-weight: 400;">Her 2016 donors are slightly different, but really very much the same.</span></p> <p><em><span style="font-weight: 400;">Corporate and other Special Interest donors (</span></em><a href=";id=N00000019&amp;type=f" target="_blank"><em><span style="font-weight: 400;">top 5</span></em></a><em><span style="font-weight: 400;">):</span></em></p> <ul> <li style="font-weight: 400;"><span style="font-weight: 400;">Morgan &amp; Morgan ($274,767)</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">Sullivan &amp; Cromwell ($148,100)</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">Akin, Gump et al ($125,598)</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">Yale University ($95,434)</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">Latham &amp; Watkins ($94,580)</span></li> </ul> <p><span style="font-weight: 400;">Note: Morgan Stanley, Time Warner, JPMorgan Chase &amp; Co and others are high on the list as well.</span></p> <p><span style="font-weight: 400;">It is also important to point out that the lobbying and law firm Akin, Gump, Strauss, Hauer &amp; Feld, which employees many of Hillary&rsquo;s lobbying &ldquo;bundlers,&rdquo; took donations from two of the biggest </span><a href="" target="_blank"><span style="font-weight: 400;">private prison contractors</span></a><span style="font-weight: 400;">, Corrections Corporation of America and Geo Group, with fees totaling almost $300,000.</span></p> <p><em><span style="font-weight: 400;">Super PAC/&rdquo;Dark Money&rdquo;:</span></em></p> <p><em><span style="font-weight: 400;">Priorities USA Action</span></em><span style="font-weight: 400;"> is the super PAC supporting Hillary Clinton in the 2016 election. So far, the group has raised </span><a href="" target="_blank"><span style="font-weight: 400;">$25 million</span></a><span style="font-weight: 400;"> in only three months. Predictably, hardline progressives stringently object to Clinton using the wealthy billionaires of </span><em><span style="font-weight: 400;">Priorities</span></em><span style="font-weight: 400;"> to raise money, but supporters say there is really no choice if she is to compete with the Republicans in a general election.</span></p> <p><span style="font-weight: 400;">The most </span><a href=";cmte=C00495861" target="_blank"><span style="font-weight: 400;">notable Priorities super PAC donors</span></a><span style="font-weight: 400;"> are George Soros and Steven Spielberg, but the list includes 31 individual donors who contributed over $200k each.</span></p> <p><span style="font-weight: 400;">It&rsquo;s fair to point out that Hillary Clinton recently made headlines by embracing a tactic to publically reveal big corporate donors. Whether this is political posturing or not, I will leave to the reader. According to the </span><a href="" target="_blank"><span style="font-weight: 400;">Los Angeles Times</span></a><span style="font-weight: 400;">:</span></p> <p><em><span style="font-weight: 400;">&ldquo;Companies like Google Inc. &mdash; and even Shell Oil &mdash; touting environmental awareness have been exposed supporting shadowy organizations skeptical of climate change.&rdquo;</span></em></p> <p><strong>Hillary Clinton, total raised so far: over </strong><strong><a href="" target="_blank">$45 million</a></strong></p> <h3><strong>CHRIS CHRISTIE</strong></h3> <p><span style="font-weight: 400;">Chris Christie, the two-term governor of New Jersey, is currently </span><a href="" target="_blank"><span style="font-weight: 400;">polling at 1%</span></a><span style="font-weight: 400;">, but that has not stopped him from garnering the support of super PAC </span><em><span style="font-weight: 400;">America Leads</span></em><span style="font-weight: 400;">, which has raised </span><a href="" target="_blank"><span style="font-weight: 400;">$11 million</span></a><span style="font-weight: 400;"> with the support of 137 contributors, several of them billionaires. The PAC recently released its donor list. </span><a href="" target="_blank"><span style="font-weight: 400;">Politico</span></a><span style="font-weight: 400;"> describes what is perhaps the most noteworthy entry:</span></p> <p><em><span style="font-weight: 400;">&ldquo;Winecup-Gamble Inc., a Nevada ranch owned by former Reebok CEO Paul Fireman, gave the group $1 million. Fireman, who lives outside Boston, plans a massive, $4.6 billion casino in Jersey City if state voters approve a constitutional amendment to allow gambling outside of Atlantic City.&rdquo;</span></em></p> <p><span style="font-weight: 400;">Other </span><em><span style="font-weight: 400;">America Leads</span></em> <a href="" target="_blank"><span style="font-weight: 400;">donors include</span></a><span style="font-weight: 400;">:</span></p> <ul> <li style="font-weight: 400;"><span style="font-weight: 400;">Las Vegas casino mogul Stephen Wynn</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">Hedge fund manager Steve Cohen and his wife Alexandra, who contributed a combined $2 million</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">Quicken Loans chairman Daniel Gilbert gave $750,000.</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">Home Depot founder Ken Langone gave $250,000</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">Anheuser-Busch heir August Busch ponied up $100,000.</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">Hewlett-Packard CEO Meg Whitman donated $100,000. </span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">Wrestling mogul Linda McMahon gave $250,000.</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">George Harms Construction gave $25,000 (and it&rsquo;s worth noting this company acquired more than </span><a href="" target="_blank"><span style="font-weight: 400;">$100 million</span></a><span style="font-weight: 400;"> in New Jersey state agency contracts in 2014)</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">Ferreira Construction gave $100,000 (also worth pointing out the </span><a href="" target="_blank"><span style="font-weight: 400;">$34 million</span></a><span style="font-weight: 400;"> this company received from the New Jersey Turnpike Authority, also in 2014)</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">Public Service Enterprise Group gave $250,000.</span></li> </ul> <p><strong>Chris Christie, total raised so far: over $11 million</strong></p> <h3><strong>BERNIE SANDERS</strong></h3> <p><span style="font-weight: 400;">Bernie Sanders entered the race as a democratic socialist dark horse but has quickly earned the feverish admiration of a wide spectrum of both progressive leftists and centrists, many of whom applaud his stated goal of taking on big banks and crony capitalism to fight for the middle class. Others see him as the unfortunate sequel to Obama, someone with grandiose reformist ideas who lacks the mettle and fearlessness truly necessary to stand up to the military-industrial complex and machinations of the </span><a href="" target="_blank"><span style="font-weight: 400;">Deep State</span></a><span style="font-weight: 400;">.</span></p> <p><span style="font-weight: 400;">One point concerning Bernie Sanders can&rsquo;t be denied: his campaign financing is leagues above the others in terms of ethical sourcing. Sanders has </span><a href="" target="_blank"><span style="font-weight: 400;">refused super PAC money</span></a><span style="font-weight: 400;"> and continues to reiterate he will not use a super PAC or any shady billionaire money for the 2016 election. His full list of of regular PAC and individual donors, most of which is labor union money, is listed below, courtesy of </span><a href=";cid=N00000528" target="_blank"><span style="font-weight: 400;"></span></a><span style="font-weight: 400;">:</span></p> <table style="height: 602px;" width="531"> <tbody> <tr> <td><span style="font-weight: 400;">Machinists/Aerospace Workers Union</span></td> <td><span style="font-weight: 400;">$105,000</span></td> </tr> <tr> <td><span style="font-weight: 400;">Teamsters Union</span></td> <td><span style="font-weight: 400;">$93,700</span></td> </tr> <tr> <td><span style="font-weight: 400;">National Education Assn</span></td> <td><span style="font-weight: 400;">$89,242</span></td> </tr> <tr> <td><span style="font-weight: 400;">United Auto Workers</span></td> <td><span style="font-weight: 400;">$79,750</span></td> </tr> <tr> <td><span style="font-weight: 400;">United Food &amp; Commercial Workers Union</span></td> <td><span style="font-weight: 400;">$72,500</span></td> </tr> <tr> <td><span style="font-weight: 400;">Communications Workers of America</span></td> <td><span style="font-weight: 400;">$68,000</span></td> </tr> <tr> <td><span style="font-weight: 400;">Laborers Union</span></td> <td><span style="font-weight: 400;">$64,000</span></td> </tr> <tr> <td><span style="font-weight: 400;">Carpenters &amp; Joiners Union</span></td> <td><span style="font-weight: 400;">$62,000</span></td> </tr> <tr> <td><span style="font-weight: 400;">National Assn of Letter Carriers</span></td> <td><span style="font-weight: 400;">$61,000</span></td> </tr> <tr> <td><span style="font-weight: 400;">American Assn for Justice</span></td> <td><span style="font-weight: 400;">$60,500</span></td> </tr> <tr> <td><span style="font-weight: 400;">American Fedn of St/Cnty/Munic Employees</span></td> <td><span style="font-weight: 400;">$58,198</span></td> </tr> <tr> <td><span style="font-weight: 400;">Intl Brotherhood of Electrical Workers</span></td> <td><span style="font-weight: 400;">$53,100</span></td> </tr> <tr> <td><span style="font-weight: 400;">United Transportation Union</span></td> <td><span style="font-weight: 400;">$48,500</span></td> </tr> <tr> <td><span style="font-weight: 400;">Sheet Metal Workers Union</span></td> <td><span style="font-weight: 400;">$47,000</span></td> </tr> <tr> <td><span style="font-weight: 400;">Operating Engineers Union</span></td> <td><span style="font-weight: 400;">$46,100</span></td> </tr> <tr> <td><span style="font-weight: 400;">Service Employees International Union</span></td> <td><span style="font-weight: 400;">$44,014</span></td> </tr> <tr> <td><span style="font-weight: 400;">UNITE HERE</span></td> <td><span style="font-weight: 400;">$42,875</span></td> </tr> <tr> <td><span style="font-weight: 400;">United Steelworkers</span></td> <td><span style="font-weight: 400;">$41,750</span></td> </tr> <tr> <td><span style="font-weight: 400;">American Postal Workers Union</span></td> <td><span style="font-weight: 400;">$37,700</span></td> </tr> <tr> <td><span style="font-weight: 400;">American Federation of Teachers</span></td> <td><span style="font-weight: 400;">$36,112</span></td> </tr> </tbody> </table> <p><span style="font-weight: 400;">A </span><a href=";utm_medium=social&amp;utm_campaign=npr&amp;utm_term=nprnews&amp;utm_content=202501" target="_blank"><span style="font-weight: 400;">report from October 1st</span></a><span style="font-weight: 400;"> shows that Bernie Sanders has nearly matched Hillary Clinton&rsquo;s 3rd quarter campaign donations without using a super PAC.</span></p> <p><strong>Bernie Sanders, total funds raised so far: $26 million</strong></p> <h3><strong>JOHN KASICH</strong></h3> <p><span style="font-weight: 400;">In a normal election cycle, John Kasich, the Governor of Ohio, might be polling higher than 5%. He is more of a centrist candidate that appeals to the base and has actual experience governing. Rumors persist that he may be tapped for VP on the eventual GOP nominee&rsquo;s ticket, but so far </span><a href="" target="_blank"><span style="font-weight: 400;">Kasich maintains he isn&rsquo;t interested</span></a><span style="font-weight: 400;"> in that.</span></p> <p><em><span style="font-weight: 400;">Corporate and other Special Interest donors:</span></em></p> <p><span style="font-weight: 400;">His </span><a href="" target="_blank"><span style="font-weight: 400;">donor list</span></a><span style="font-weight: 400;"> has been called a </span><em><span style="font-weight: 400;">&ldquo;who&rsquo;s who of prominent Ohio political donors.&rdquo; </span></em><span style="font-weight: 400;">This list includes:</span></p> <p><span style="font-weight: 400;">&ldquo;</span><em><span style="font-weight: 400;">Abigail Wexner, philanthropist and wife to Les Wexner, founder of The Limited; John P. McConnell, the chief executive officer of Worthington Industries and majority owner of the Columbus Blue Jackets; and John and Ann Wolfe, former owner of The Dispatch.&rdquo;</span></em></p> <p><span style="font-weight: 400;">Another interesting Kasich PAC donor is a Montana company called MMWP12 LLC. This company contributed $500,000 and is connected to Mark Kvamme, who spearheaded JobsOhio, the private, non-profit group whose goal was to create jobs in the Kasich-run state of Ohio.</span></p> <p><em><span style="font-weight: 400;">Super PAC/&rdquo;Dark Money&rdquo;:</span></em></p> <p><span style="font-weight: 400;">John Kasich&rsquo;s super PAC is called </span><em><span style="font-weight: 400;">New Day For America</span></em><span style="font-weight: 400;">. The group has drawn contributions from 166 donors, totaling $11 million so far, over half of which is from Ohio.</span></p> <p><span style="font-weight: 400;">According to </span><a href="" target="_blank"><span style="font-weight: 400;">Politico</span></a><span style="font-weight: 400;">, the major names on this list include:</span></p> <ul> <li style="font-weight: 400;"><em><em><span style="font-weight: 400;">&ldquo;Wendt Family Trust, Schottenstein Management Company and Tom Rastin, an Ohio-based Republican donor who donated to then-Pennsylvania governor Tom Corbett&rsquo;s re-election campaign in the 2014 cycle.</span></em></em></li> </ul> <ul> <li style="font-weight: 400;"><em><span style="font-weight: 400;">Floyd Kvamme (Mark Kvamme&rsquo;s father), the retired venture capitalist, who donated $100,000</span></em></li> </ul> <ul> <li style="font-weight: 400;"><em><span style="font-weight: 400;">Philip Geier Jr. of the Geier Group, who donated $500,000 and is a member of New Day for America&rsquo;s board</span></em></li> </ul> <ul> <li style="font-weight: 400;"><em><span style="font-weight: 400;">Jim Dicke, a big player in the Ohio Republican Party and the chairman emeritus of the Crown Equipment Corp. Dicke donated $250,000.&rdquo;</span></em></li> </ul> <p><span style="font-weight: 400;">Kasich also has a separate PAC called New Day For America Independent.</span></p> <p><strong>John Kasich, total funds raised: over $11,730,730</strong></p> <h3><strong>CARLY FIORINA</strong></h3> <p><span style="font-weight: 400;">Former Hewlett-Packard CEO Carly Fiorina&rsquo;s unexpected ascension as a viable GOP candidate was buoyed by three primary factors: her neoconservative war hawk ideology; her vociferous stance against Planned Parenthood, which appeals to the GOP&rsquo;s dominant right wing base; and her secretary-to-CEO personal life story.</span></p> <p><em><span style="font-weight: 400;">Corporate and other Special Interest donors (</span></em><a href=";id=N00031348&amp;type=f" target="_blank"><em><span style="font-weight: 400;">top 5</span></em></a><em><span style="font-weight: 400;">):</span></em></p> <ul> <li style="font-weight: 400;"><span style="font-weight: 400;">LISI Inc &ndash; $12,400</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">Renaissance Technologies &ndash; $10,800</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">Western Care Construction &ndash; $10,800</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">Echo Pacific Construction &ndash; $10,400</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">Wilson, Sonsini et al &ndash; $8,100</span></li> </ul> <p><em><span style="font-weight: 400;">Super PAC/&rdquo;Dark Money&rdquo;:</span></em></p> <p><span style="font-weight: 400;">Perhaps as a result of her history as an executive of HP, Carly Fiorina&rsquo;s super PAC</span><em><span style="font-weight: 400;">, Carly For America, </span></em><span style="font-weight: 400;">is full of deep-pocketed Silicon Valley donors. </span><a href="" target="_blank"><span style="font-weight: 400;">This includes</span></a><span style="font-weight: 400;">:</span></p> <ul> <li style="font-weight: 400;"><span style="font-weight: 400;">Venture capitalist Tom Perkins &ndash; $25,000</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">Former Intel CEO Paul Otellini &ndash; $5,000</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">Former CEO of Univision, Jerry Perenchio, who donated a whopping </span><strong>$1.6 million</strong></li> <li style="font-weight: 400;"><span style="font-weight: 400;">Former head of World Wrestling Entertainment and Connecticut Senate candidate Linda McMahon &ndash; $10,000</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">Palo Alto-based physicist Charles Munger &ndash; $100,000</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">Robert Day, who founded the Los Angeles asset management firm TCW &ndash; $100,000</span></li> </ul> <p><span style="font-weight: 400;">The most mysterious donation, one that is actually being </span><a href="" target="_blank"><span style="font-weight: 400;">investigated by the FEC</span></a><span style="font-weight: 400;">, concerns a $500,000 contribution from one of Ted Cruz&rsquo;s super PACs, </span><em><span style="font-weight: 400;">Keep the Promise 1</span></em><span style="font-weight: 400;">. It is currently unknown why this donation was made.</span></p> <p><strong>Carly Fiorina, total funds raised so far: over $1.6 million</strong></p> <h3><strong>MARCO RUBIO</strong></h3> <p><span style="font-weight: 400;">Marco Rubio, the junior United States senator from Florida, is another potential dark horse in this race because he appeals to the right wing of the Republican base while still striking Reaganesque tones during the debates. In fact, many pundits have noted the eerie similarities between Rubio and 2000 GOP candidate George W. Bush. Others have pointed out that Rubio&rsquo;s Cuban American ethnicity could help Republicans win much-needed Latino votes.</span></p> <p><em><span style="font-weight: 400;">Corporate and other Special Interest donors (</span></em><a href=";" target="_blank"><em><span style="font-weight: 400;">top 5</span></em></a><em><span style="font-weight: 400;">):</span></em></p> <ul> <li style="font-weight: 400;"><span style="font-weight: 400;">Goldman Sachs &ndash; $65,830</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">Steward Health Care &ndash; $49,400</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">Titan Farms &ndash; $23,200</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">Florida Crystals &ndash; $21,700</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">Oracle Corp &ndash; $21,600</span></li> </ul> <p><em><span style="font-weight: 400;">Super PAC/&rdquo;Dark Money&rdquo;:</span></em></p> <p><span style="font-weight: 400;">According to the latest filings, the Marco Rubio super PAC, </span><em><span style="font-weight: 400;">Conservative Solutions PAC,</span></em><span style="font-weight: 400;"> has drawn in $16 million, doubling the funds earned from his private donors. Over 75% of this money came from just </span><a href="" target="_blank"><span style="font-weight: 400;">four donors</span></a><span style="font-weight: 400;">:</span></p> <ul> <li style="font-weight: 400;"><a href="" target="_blank"><span style="font-weight: 400;">Norman Braman</span></a><span style="font-weight: 400;">, a longtime friend of Rubio who happens to be a billionaire auto dealer and former owner of the Philadelphia Eagles. Braman has been called Rubio&rsquo;s &ldquo;secret weapon&rdquo; because he despises Jeb Bush and says he will spend anywhere from $10 to $25 million on Rubio&rsquo;s campaign</span></li> <li style="font-weight: 400;"><a href=",-ellison/682" target="_blank"><span style="font-weight: 400;">Lawrence J. Ellison</span></a><span style="font-weight: 400;">, the chairman of </span><a href=";symbol=ORCL" target="_blank"><span style="font-weight: 400;">Oracle</span></a><span style="font-weight: 400;"> Corp who has donated $3 million</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">Philanthropist Laura Perlmutter (wife to Isaac Perlmutter, the billionaire CEO of Marvel Entertainment) donated $2 million</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">Besilu Stables, a horse racing company in Miami, donated $2.5 million</span></li> </ul> <p><span style="font-weight: 400;">The Rubio campaign is also the beneficiary of a considerable amount of &ldquo;dark money.&rdquo; The source is a </span><a href="" target="_blank"><span style="font-weight: 400;">501(c)(4) nonprofit</span></a><span style="font-weight: 400;"> called </span><em><span style="font-weight: 400;">Conservative Solutions Project</span></em><span style="font-weight: 400;">, which has raised an additional $15.8 million. The nonprofit, which, of course, is not required to disclose its donors, launched a massive ad campaign attacking President Obama&rsquo;s Iran deal.</span></p> <p><strong>Marco Rubio, total funds raised so far: over $31.9 million</strong></p> <h3><strong>DONALD TRUMP</strong></h3> <p>Donald Trump has stated repeatedly that he will self-finance his campaign and will not accept any special interest donations. His net worth is heavily contested, but Forbes estimates it is approximately $4.5 billion. Trump claims he will spend up to $100 million of his own money on the 2016 presidential election.</p> <p><span style="font-weight: 400;">While the legacy of Trump as a self-made financial titan has catapulted him to an iconic status, </span><a href="" target="_blank"><span style="font-weight: 400;"></span></a><span style="font-weight: 400;"> posted an article debunking much of this fictitious fanfare. The article traces the roots of a $40-$200 million inheritance Trump received from his father, money that was bilked from governmental financing programs during the Great Depression; Trump parlayed that money into a series of businesses that went bankrupt, skirting SEC regulations and taking advantage of every tax loophole available in order to build his empire.</span></p> <p><strong>Donald Trump, total funds raised so far: $100 million</strong><span style="font-weight: 400;"> (amount he pledged to his own campaign)</span></p> <h3><strong>TED CRUZ</strong></h3> <p><span style="font-weight: 400;">Ted Cruz is the junior U.S. Senator from Texas who made a name for himself by reading </span><a href="" target="_blank"><em><span style="font-weight: 400;">Green Eggs and Ham</span></em></a><span style="font-weight: 400;"> on the Senate floor as part of a symbolic filibuster of Obama&rsquo;s Affordable Healthcare Act. He was also one of the </span><a href="" target="_blank"><span style="font-weight: 400;">47 signatories</span></a><span style="font-weight: 400;"> of a letter sent to Iran stating that President Obama lacked the authority to negotiate with </span><span style="font-weight: 400;">Ayatollah Khomenei.</span></p> <p><span style="font-weight: 400;">More recently, he has led a weak coalition of congressmen aiming to shut down the federal government for the second time in as many years. His objective </span><em><span style="font-weight: 400;">&mdash; </span></em><span style="font-weight: 400;">and one of his major campaign platforms, in addition to repealing Obamacare and the Iran Deal </span><em><span style="font-weight: 400;">&mdash; </span></em><span style="font-weight: 400;">is to defund Planned Parenthood.</span></p> <p><em><span style="font-weight: 400;">Corporate and other Special Interest donors (</span></em><a href=";cycle=2016&amp;type=f" target="_blank"><em><span style="font-weight: 400;">top 5</span></em></a><em><span style="font-weight: 400;">):</span></em></p> <table> <tbody> <tr> <td><span style="font-weight: 400;">Woodforest National Bank</span></td> <td><span style="font-weight: 400;">$75,200</span></td> </tr> <tr> <td><span style="font-weight: 400;">Morgan Lewis LLP</span></td> <td><span style="font-weight: 400;">$68,850</span></td> </tr> <tr> <td><span style="font-weight: 400;">Gibson, Dunn &amp; Crutcher</span></td> <td><span style="font-weight: 400;">$52,950</span></td> </tr> <tr> <td><span style="font-weight: 400;">Pachulski, Stang et al</span></td> <td><span style="font-weight: 400;">$41,000</span></td> </tr> <tr> <td><span style="font-weight: 400;">Jennmar Corp</span></td> <td><span style="font-weight: 400;">$40,850</span></td> </tr> </tbody> </table> <p><em><span style="font-weight: 400;">Super PAC/&rdquo;Dark Money&rdquo;:</span></em></p> <p><span style="font-weight: 400;">Ted Cruz&rsquo;s campaign actually has </span><a href="" target="_blank"><span style="font-weight: 400;">four super PACs</span></a><span style="font-weight: 400;">, all funded by </span><span style="font-weight: 400;">Robert Mercer, a Long Island hedge fund magnate and </span><a href="" target="_blank"><span style="font-weight: 400;">climate change denier</span></a><span style="font-weight: 400;">. Combined, they raised $31 million in the first four weeks of his campaign. Contributors to these super PACs include:</span></p> <ul> <li style="font-weight: 400;"><a href="" target="_blank"><span style="font-weight: 400;">Koch brothers&rsquo; political network</span></a><span style="font-weight: 400;">, 97% of which came from a single contribution from Robert Mercer himself</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">Billionaires Farris and Dan Wilks, who generated most of their wealth from the </span><a href="" target="_blank"><span style="font-weight: 400;">West Texas fracking boom</span></a><span style="font-weight: 400;"> &ndash; &nbsp;donated $15 million</span></li> </ul> <p><strong>Ted Cruz, total funds raised so far: over $31 million</strong></p> <h3><strong>BEN CARSON</strong></h3> <p><span style="font-weight: 400;">Ben Carson, the retired John Hopkins neurosurgeon, was dead in the water a few weeks ago, but his numbers saw an unlikely bounce after the second debate. While Carson put his foot in his mouth when he suggested the U.S. marines were unprepared for combat, he startled many by suggesting that had George W. Bush sworn off petroleum in the wake of 9/11, taking bold diplomatic action over military strikes, the nation may have averted the incredibly costly war on terror. With his </span><a href="" target="_blank"><span style="font-weight: 400;">poll numbers rising</span></a><span style="font-weight: 400;">, many pundits now wonder whether he could be tapped as VP.</span></p> <p><em><span style="font-weight: 400;">Corporate and other Special Interest donors (</span></em><a href=";id=N00036973&amp;type=f" target="_blank"><em><span style="font-weight: 400;">top 5</span></em></a><em><span style="font-weight: 400;">):</span></em></p> <table> <tbody> <tr> <td><em><span style="font-weight: 400;">Coca-Cola Co</span></em></td> <td><em><span style="font-weight: 400;">$21,850</span></em></td> </tr> <tr> <td><em><span style="font-weight: 400;">West Coast Venture Capital</span></em></td> <td><em><span style="font-weight: 400;">$21,600</span></em></td> </tr> <tr> <td><em><span style="font-weight: 400;">Trailiner Corp</span></em></td> <td><em><span style="font-weight: 400;">$10,800</span></em></td> </tr> <tr> <td><em><span style="font-weight: 400;">Ankom Technology</span></em></td> <td><em><span style="font-weight: 400;">$10,400</span></em></td> </tr> <tr> <td><em><span style="font-weight: 400;">Jea Senior Living</span></em></td> <td><em><span style="font-weight: 400;">$10,000</span></em></td> </tr> </tbody> </table> <p><em><span style="font-weight: 400;">Super PAC/&rdquo;Dark Money&rdquo;:</span></em></p> <p><span style="font-weight: 400;">Like Ted Cruz, Ben Carson has </span><a href="" target="_blank"><span style="font-weight: 400;">more than one super PAC</span></a><span style="font-weight: 400;">. </span><em><span style="font-weight: 400;">One Vote</span></em><span style="font-weight: 400;">, a super PAC led by Republican strategist Andy Yates, and Run Ben Run. Even before Carson decided to run, </span><span style="font-weight: 400;">the </span><a href=";strID=C00548420" target="_blank"><span style="font-weight: 400;">National Draft Ben Carson for President Committee</span></a><span style="font-weight: 400;"> raised $13.5 million.</span> <span style="font-weight: 400;">Reports have surfaced that there is tumult and discord between the two primary super PACs, but as long as the money keeps pouring in, Carson doesn&rsquo;t seem to be phased. Recently, he doubled down on </span><a href="" target="_blank"><span style="font-weight: 400;">anti-Muslim rhetoric</span></a><span style="font-weight: 400;">, which seems to have bumped his fundraising figures even higher, bringing him to </span><a href="" target="_blank"><span style="font-weight: 400;">$20 million</span></a><span style="font-weight: 400;"> this quarter.</span></p> <p><span style="font-weight: 400;">Very little information has been released about the bigger disbursements stemming from Carson&rsquo;s super PACs. But interestingly, despite the big money pouring in, Carson has flourished with small donors. In fact, </span><em><span style="font-weight: 400;">&ldquo;</span></em><a href="" target="_blank"><em><span style="font-weight: 400;">eighty-four percent</span></em></a><em><span style="font-weight: 400;"> [of Carson&rsquo;s donors] wrote checks for less than $500.&rdquo;</span></em></p> <p><strong>Ben Carson, total funds raised so far: over $20 million</strong></p> <h3><strong>MIKE HUCKABEE</strong></h3> <p><span style="font-weight: 400;">The former governor of Arkansas&rsquo; private donors are relatively small and unremarkable. His super PAC, Pursuing America&rsquo;s Greatness, has received only two primary donations. In fact, almost all the money contributed to the super PAC came from one man: </span><a href="" target="_blank"><span style="font-weight: 400;">Ronald Cameron of Little Rock, Arkansas</span></a><span style="font-weight: 400;">, the poultry magnate who donated $3 million. Notably, Cameron, who runs</span> <span style="font-weight: 400;">agribusiness giant Mountaire Corporation, which earned $1.22 billion in 2009, has been listed as a </span><a href="" target="_blank"><span style="font-weight: 400;">major contributor</span></a><span style="font-weight: 400;"> to the Koch Brothers political network.</span></p> <p><span style="font-weight: 400;">Other contributions include $500,000 from </span><span style="font-weight: 400;">Sharon Herschend of Herschend Family Entertainment and $50,000 each from real estate investor Jon K. Gibson and Cary Maguire, president of Maguire Oil.</span></p> <p><strong>Mike Huckabee, total funds raised so far: over $3 million</strong></p> <h3><strong>RAND PAUL</strong></h3> <p><span style="font-weight: 400;">According to one insider, libertarian-leaning, low-polling Rand Paul could soon be </span><a href="" target="_blank"><span style="font-weight: 400;">dropping out of the race</span></a><span style="font-weight: 400;">. Paul&rsquo;s super PAC </span><em><span style="font-weight: 400;">America&rsquo;s Liberty PAC</span></em><span style="font-weight: 400;"> has received most of its money from only </span><a href="" target="_blank"><span style="font-weight: 400;">two donors</span></a><span style="font-weight: 400;">:</span></p> <ul> <li style="font-weight: 400;"><span style="font-weight: 400;">George Macricostas, CEO of RagingWire, a data center operator &ndash; $1.1 million</span></li> <li style="font-weight: 400;"><span style="font-weight: 400;">Libertarian donor Jeffrey Yass, leader of trading firm Susquehanna International Group &ndash; $1 million</span></li> </ul> <p><strong>Rand Paul, total funds raised so far: $3.1 million</strong></p> <p><span style="font-weight: 400;">As you can see, the 2016 presidential election is, for the most part, an all-out corporate donor war. It&rsquo;s important to remember that many of these totals are likely not current, as campaigns strategically withhold donation amounts. We also don&rsquo;t know the full extent of &ldquo;dark money&rdquo; stemming from nonprofits and business associations. What we do know is that this will be the most expensive election in history. The Koch brothers alone have a budget of </span><a href="" target="_blank"><span style="font-weight: 400;">$889 million</span></a><span style="font-weight: 400;">. When added to the spending expected from the Democrats and Republicans, we&rsquo;re looking at a possible price tag of </span><a href="" target="_blank"><span style="font-weight: 400;">$5 billion</span></a><span style="font-weight: 400;">.</span></p> <p><span style="font-weight: 400;">If you have information on any significant campaign funds not included in this article, please email us or leave a comment.</span></p> Akin Gump Bank of America Bank of America Bernie Sanders Citigroup Cohen Corruption Donald Trump Florida Gambling George Soros goldman sachs Goldman Sachs Google Great Depression headlines Iran JPMorgan Chase Julian Robertson Las Vegas Morgan Stanley New Zealand Obamacare Ohio Portugal President Obama Real estate SCOTUS South Carolina Steve Cohen Time Warner Univision Sat, 03 Oct 2015 21:44:08 +0000 Tyler Durden 514310 at The Unwind Of QE Means The "S&P Should Be Trading At Half Of Its Value", Deutsche Bank Warns <p>In his latest weekly note, DB's derivatives analyst Alekandar Kocic focuses on the interplay between US inflation expectations and US equities, and points out something curious, and very much spot on:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Policy response to the crisis post-2008 consisted of unprecedented injection of liquidity, transfer of risk from private to public balance sheet, and reduction of volatility from its toxic levels. The net result was near-zero rate levels and collapse of volatility across the board, while different market sectors developed high degrees of coordination. The last effect has been an indirect result of the central banks’ flows and the distortions they introduced in the bond market. In this environment other markets acted as a complement to rates (through which monetary policy was transmitted) and crowding out there pushed investors to articulate their views elsewhere. <strong>Their participation was a function of amount of liquidity injection. As a consequence everything was trading off of US inflation expectations as the main expression of the QE effects</strong>.</p> </blockquote> <p>That was the case for the first 5 years of "unconventional policy" until some time in 2013. Then something snapped. Kocic continues:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>With deflation as the main risk tackled by monetary policy, its success or failure was gauged by the ability to reflate the economy. <strong>Inflation expectations and breakevens were therefore signals for risk-on or risk-off trade. </strong>In fact, most market sectors, from FX to EM equities, were trading in high coordination with breakevens. Taper tantrum was the end of these correlations and a beginning of dispersion across different assets. <strong>In effect<span style="text-decoration: underline;">, it was the unwind of the “QE” trade, its first phase</span>. </strong>While most other assets, like credit spreads, EM equities or different currencies, do not have a logical connection with US breakevens, US equities do. The dispersion between these assets and breakevens was an expected consequence of policy unwind. <strong>However, for US equities this unwind distorted their “natural” correlation with inflation</strong>. Persistence of these dislocations is just a manifestation of to what extent QE has been an important driver of post-2008 markets.</p> </blockquote> <p>Which brings us to the punchline:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Since 2013, stocks rallied while disinflationary pressures were reinforced by a strong USD, low commodity prices and a decline in global demand. If pre-2013 coordination between the two is taken as a reference, then based on current stock prices breakevens should trade about 1.5% wider. This means the Fed should be hiking because inflation is above target. <strong>Alternatively, given the current level of inflation, </strong><span style="text-decoration: underline;"><strong>S&amp;P should be trading at half of its value.</strong></span></p> </blockquote> <p>Wait, the S&amp;P should be trading at 900... or even less? Yes, according to the following Deutsche Bank chart:</p> <p><a href=""><img src="" width="600" height="448" /></a></p> <p>Only one question remains: which breaks first - do inflation expectations surge higher, soaring by some 150 bps to justify equity valuations, or do equities crash? </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Is reconciliation likely – and, if so, in which direction? <strong>Are we returning to the pre-crisis world, or we are in a completely new regime?</strong></p> </blockquote> <p>The answer will come from none other than the Fed and by now, even Janet Yellen knows that one word out of place, one signal to the market that the QE-inflation trade will converge with stocks crashing instead of inflation rising (which, unless the Fed launched QE4, NIRP of even helicopter money now appears inevitable), and some $10 trillion in market cap could evaporate overnight.</p> <p>Is it any wonder that Yellen is exhibiting "health issues" during her speeches: the realization that the fate of the biggest stock market bubble lies on your shoulders would make anyone "dehydrated."</p> <p>In retrospect, Ben Bernanke knew <strong>exactly </strong>what he was doing when he got out of Dodge just as the endgame was set to begin.</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="740" height="552" alt="" src="" /> </div> </div> </div> Ben Bernanke Ben Bernanke Bond Deutsche Bank Janet Yellen Monetary Policy None Volatility Sat, 03 Oct 2015 21:09:27 +0000 Tyler Durden 514317 at