en Crushing The "Oil's Just A Supply Issue" Meme In 1 Painful Chart <p>Day after day we are told that the plunge in oil prices (just like the collapse in The Baltic Dry freight index) is a "supply" issue... it's transitory and global demand is doing fine thank you very much. Sadly, as everyone really knows deep down inside their Keynesian hearts, this is utter crap and as Barclays shows the<strong> shocking 18% YoY crash in distillates "demand" - something that has never happened outside of a recession</strong> - blows the one-sided argument of the energy complex out of the water.</p> <p>&nbsp;</p> <p><a href=""><img src="" width="600" height="461" /></a></p> <p>&nbsp;</p> <p>Still gonna claim "it's a supply issue?"</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="827" height="635" alt="" src="" /> </div> </div> </div> Baltic Dry Barclays CRAP Distillates Recession Fri, 12 Feb 2016 02:10:00 +0000 Tyler Durden 523432 at Abewrongics - 16 Months Of Japanese Money-Printing For Nothing <p><strong>Neither USDJPY nor Japanese stocks can hold a bid in the early going in Asia markets</strong> which has dragged both into the red post-QQE2. Since Kuroda took over from The Fed by doubling down on his cunning plan in October 2014, Japanese stocks are down 11.4%, USDJPY is unchanged, and only Japanese bonds have made any gains (up 3.7%). </p> <p><img src="" width="600" height="313" /></p> <p>&nbsp;</p> <p>So what we want to know is - <strong><em>how will Abe et al. explain to the Japanese people how they lost so much of their retirement funds by forcing GPIF to allocate so much to stocks?</em></strong></p> <p><strong><em><span style="text-decoration: underline;">Worst still - Japanese real household earnings have tumbled!</span><br /></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="959" height="501" alt="" src="" /> </div> </div> </div> Fri, 12 Feb 2016 02:03:09 +0000 Tyler Durden 523483 at HSBC Cancels Pay Freeze After Two Weeks Following "Staff Revolt" <p dir="ltr">Late last month, HSBC Holdings CEO Stuart Gulliver announced a global freeze on hiring and compensation in a move designed to help the bank cut some $5 billion in costs by the end of next year.</p> <p dir="ltr">To be sure, HSBC isn’t alone in seeking to roll back costs amid bouts of global market turmoil. As <a href="">Bloomberg notes</a>, “UBS froze investment bank salaries this week and Barclays Plc extended a freeze on hiring new staff indefinitely in December, while Credit Suisse Group AG and Deutsche Bank AG are cutting thousands of jobs.”</p> <p dir="ltr">“<strong>It would be inappropriate vis-à-vis society to post €5.2bn in legal provisions in one year and not reflect that in compensation, particularly when the share price has fallen, and shareholders have suffered</strong>,” Deutsche’s John Cryan said, <a href="">on the heels of</a> what analysts described as “horrible,” “grim” annual and quarterly results. “By and large, I think we are underpaying against our international peer group this year and I hope that many staff understand why.”</p> <p dir="ltr">In short, this isn’t the best time to work at a systemically important bank if job security is your thing. </p> <p dir="ltr">The likes of Credit Suisse, Deutsche Bank, and SocGen have reported horrendous results over the last several weeks and there’s every reason to believe things are about to get a whole lot worse, which is why the “DB is fixed” enthusiasm (triggered by a supposed plan by the bank to repurchase its debt) was <a href="">immediately faded</a>.</p> <p dir="ltr"><a href="" style="font-family: 'Lucida Grande', Verdana, sans-serif; font-size: 13.3333px; line-height: 17.3333px;"><img src="" width="600" height="294" style="max-width: 100%; height: auto;" /></a></p> <p dir="ltr">But while cutting compensation may indeed be the right move for many of the world’s largest and most nefarious financial institutions, <strong>it turns out employees aren’t really big on getting paid less -</strong>&nbsp;even if it’s “appropriate vis-à-vis society," to quote Cryan.</p> <p dir="ltr">That’s why after a veritable insurrection, <strong>HSBC has decided to cancel the global pay freeze</strong>. </p> <p dir="ltr">“HSBC staff have been complaining to managers since the pay freeze was announced, which would have cancelled increases already recommended as part of the bank’s 2015 pay review,” Bloomberg reports, citing unnamed sources.</p> <p dir="ltr">“<strong>We have listened to feedback and as a result decided to change the way these cost savings are to be achieved</strong>,” Gulliver said in a memo sent to staff on Thursday, which was confirmed by an HSBC spokeswoman. “We will proceed with the pay rises as originally proposed by managers as part of the 2015 pay review, noting that, consistent with prior years, not all staff will receive a pay rise.” And why shouldn't they "proceed with the pay rises?" Things are going so well:</p> <p dir="ltr"><a href=""><img src="" width="600" height="315" /></a></p> <p>One wonders why Gulliver even bothered with the pay freeze in the first place. </p> <p>After all, it’s a bit difficult to imagine what the counterfactual would have been here: did someone actually think employees were going to be happy about getting <em>less</em> money?</p> <p>Meanwhile, the families of multiple US citizens murdered by Mexican drug cartels <a href="">are suing</a> the bank for providing drug lords with "material support." "Without the ability to place, layer and integrate their illicit proceeds into the global financial network, the cartels’ ability to corrupt law enforcement and public officials, and acquire personnel, weapons and ammunition, vehicles, planes, communication devices, raw materials for drug production and all other instrumentalities essential to their operations would be substantially impeded,”&nbsp;a complaint filed in a federal court in Texas reads.</p> <p>In short, plaintiffs say the bank's employees are largely responsible for financing a multi-billion dollar global "terrorist" drug organzation. That, we suppose, is why Gulliver pays them the big bucks.</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="846" height="506" alt="" src="" /> </div> </div> </div> Barclays Credit Suisse Deutsche Bank SocGen Fri, 12 Feb 2016 01:45:21 +0000 Tyler Durden 523476 at Oil Fears Spook Investors (Again) <p style="color: #333333; font-family: Georgia, 'Times New Roman', 'Bitstream Charter', Times, serif; line-height: 24px;"><a href="" rel="attachment wp-att-9029194"><img src="" alt="oil-696579_640" width="250" height="166" style="height: auto; max-width: 100%; float: right; margin: 0.5em 0px 0.5em 1em;" class="alignright wp-image-9029194" /></a><span style="font-size: 1em;">From</span><span style="font-size: 1em;">&nbsp;</span><a href="" target="_blank" style="font-size: 1em;">Phil Davis's Monday article at Phil's Stock World</a></p> <div class="entry" style="color: #333333; font-family: Georgia, 'Times New Roman', 'Bitstream Charter', Times, serif; line-height: 24px;"> <p><em>"<a href="" target="_blank">We should all fear Oilmageddon!</a>"&nbsp;</em></p> <p>That's the word from CitiBank, which&nbsp;is&nbsp;SUPPOSED to be the voice of reason in these markets. When Banksters tell us to get out of something – it's usually time to get in.</p> <p><a href="" target="_blank">Nattering Naybob had a very good summary of the weeks events</a>, reminding us of&nbsp;<a href="" target="_blank">my Wednesday warning that we were simply in a "dead cat bounce</a>" and likely to fall even further this morning. I wrote,</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Some are connecting the dots so the 1859 to 1940 SP500 rally, could be the dead cat bounce we alluded to as the overall trend reasserts itself.&nbsp;I said ES could test 1930 and to wake me up when it got there, where it was rejected in a big way. I have a funny feeling this Super Bowl, Monday, and week could all be ugly.</p> </blockquote> <p>And ugly it is this morning but I'll be on <a href="" target="_blank">Money Talk on BNN Wednesday night</a>, explaining why the collapse of oil does NOT mean the Global Economy is collapsing and I'll write it down here so you can get ahead of the game and, as Buffett advises: "Be greedy while others are fearful."</p> <p>The big problem is that most "analysts" don't know anything more than they knew in college – especially the ones who wrote books and who, even if they know better, almost never contradict what they have published – no matter how much evidence to the contrary has piled up against them. &nbsp;Those who aren't slaves to the status quo are often paid by the-powers-that-be to steer&nbsp;<a href="" target="_blank">the sheeple</a>&nbsp;in and out of positions as needs dictate, and even the honest media loves a conflict – and they'll present both sides of an argument as valid – even when one side is clearly idiotic.</p> <p>So, getting back to oil – many people think oil pricing is a function of supply and demand. Long-term it is. But short-term it's a function of sentiment and manipulation. We take full advantage of that at PSW and I could give you a dozen examples from our 10 years in circulation but suffice it to say it's not that hard to spot those patterns.&nbsp;One great pattern we observe is the&nbsp;<a href="" target="_blank">fake, Fake, FAKE!!</a>! trading of oil contracts over at the NYMEX.</p> <p><img src="" width="596" height="308" style="height: auto; max-width: 100%;" /></p> <p>&nbsp;</p> <p>As you can see from the 5-month strip at the NYMEX, there are 515,000 open contracts for March delivery and that's very high, which puts downward pressure on the price because the contracts close on Feb. 22&nbsp;(10 trading days, we're closed next Monday) and, not only are the storage facilities at Cushing, OK (the point of delivery) full to the brim with unwanted oil, but Cushing can only handle about 40M actual barrels of oil per month so there is NO WAY ON EARTH that 515,000 contracts, representing 515 MILLION barrels of oil, can possibly be delivered.</p> <p>Of course the traders know this and they pull this scam off every month in order to create a false sense of demand for oil and, every month, they whittle their fake orders down to 15-25M actual barrels worth of contacts (15-25,000) and the rests are fake, Fake, FAKE!!! – ALL of the time.</p> <p>Yes, trading on the NYMEX is a complete and utter fraud but knowing it's a fraud helps our trading… This month, over 3M contracts will change hands at the NYMEX, representing 600M barrels of oil – all so just 20M can actually be delivered to the US consumers.&nbsp;The rest of the nonsense (99%) is just a game to move the prices around with the US consumers picking up the tab for all the fees that monthly churning generates.</p> <p>There are 515,000 contracts worth of open orders for March delivery and, since only 25M barrels are likely to be delivered, they have 10 days to cancel or roll 490M barrels worth of crude orders to longer months. &nbsp;Since most of those contracts are trading at a loss, and since hope springs eternal, and since humans and their corporate masters have a huge aversion to taking losses – we can expect those contracts to be rolled to longer months – only perpetuating the problem.</p> <p>In addition, we know that "THEY" have trouble rolling more than 40,000 contracts in a single day – usually that causes downward price pressure and they have 10 days to roll 490,000 contracts – so oil will remain under pressure until 2/22, when we should get a nice pop into the end of that week. Meanwhile, rumors are accelerating regarding a possible OPEC production cutback and that's keeping oil off the $25 line – for now. As I said – we're playing for a bounce off $30 (with tight stops below)&nbsp;because we expect more rumors to lift oil into Wednesday's inventory report.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>There are over 1 BILLION barrels worth of FAKE!!! orders for oil deliver at the NYMEX in the front 4 months – soon to be the front 3 months in 10 trading days. &nbsp;The US currently imports just 5.7M barrels per day or 171M barrels per month (but not all to Cushing, of course) so the deliveries FALSELY&nbsp;scheduled for Cushing alone, in March, represent a 3-month supply for the entire US!</p> </blockquote> <p>There's problem number one – energy trading is a complete and utter scam (as if Enron didn't make that plainly obvious 15 years ago) and don't get me started about the ICE (see:&nbsp;<a href=";rct=j&amp;q=&amp;esrc=s&amp;source=web&amp;cd=1&amp;ved=0ahUKEwjTl7bloujKAhWFPj4KHYu-ArsQFggcMAA&amp;;usg=AFQjCNHQeM9zTToK9_Z-2aj0SBzVoTkHBg&amp;sig2=eiKhOzQ1dQQj1LjJiwJ1iw&amp;bvm=bv.113370389,d.cWw">Goldman's Global Oil Scam Passes the 50 Madoff Mark</a>). &nbsp;Oil is not racing back to $50 because $50 is not the mid-point on oil – it's a top and oil should NEVER have been anywhere close to $100 per barrel and that bubble has long since burst.</p> <p>Again we have to think about the rigid and limited mind-set of the average analyst who thinks that low oil prices mean a bad economy because, clearly, demand must be off. &nbsp;That was a very solid assumption since the birth of the internal combustion engine but now that we have electric cars and solar and wind power – it's no longer such a direct correlation. &nbsp;While we do have an oversupply of oil, to be sure – it's wrong to blame it on a slow economy.</p> <p>One solid example of this is auto demand. &nbsp;You are probably aware that auto sales hit records in 2015, with 50M cares delivered globally. &nbsp;While this somewhat represents&nbsp;a bump in demand, it's mainly about replacement cars. What kind of cars are we replacing? &nbsp;The average age of the US fleet is 11.5 years and we can safely assume that most cars being replaced fall on the longer end of the scale. &nbsp;Well, the average car in 2005 got just 22 miles per gallon and we're replacing them with cars that get 35 miles per gallon&nbsp;(new car fleet average)&nbsp;thanks to Obama's CAFE standard rules. &nbsp;And it's not just the US – the whole world is getting more efficient:</p> <p>&nbsp;</p> <p><img src="" style="height: auto; max-width: 100%;" /></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>&nbsp;</p> <p>A car being driven 15,000 miles a year (average) that used to use 750 gallons at 20 miles per gallon is replaced by a car driven the same 15,000 miles a year that now gets 35 miles per gallon and used 428 gallons. &nbsp;That's 42% LESS fuel than the previous car! &nbsp;An oil barrel is 42 gallons and it's not all refined to gasoline but let's just say that each new car sold requires 10 less barrels per year than it's predecessor. &nbsp;At 50M cars a year that's 500M less barrels per year required for our auto fleet – a 1.5Mb/day demand cut that becomes 3Mb/day in year 2 and 4.5Mb/day in year 3 and THAT is where our demand is going and it's NOT coming back!</p> <p>&nbsp;</p> </blockquote> <p><img src="" style="height: auto; max-width: 100%;" /></p> <p>&nbsp;</p> <p>In fact, we also are getting more efficient trucks and more efficient planes and more efficient machines in our factories and a lot of equipment is using wave, wind and solar energy for power and not using any oil at all to run. &nbsp;So our economy could be off to the races and oil consumption would still be going downhill and, ironically, the better our economy does the faster the old gas-guzzling machines get replaced and the faster the demand for oil declines but that's a GOOD THING, not a reason to panic.</p> <p>Yes, there will be disruptions as we move into a post-oil economy – especially for economies that depend on oil. &nbsp;Saudi Arabia alone has enough oil in the ground to supply the World for 40 years and, sadly, it's not likely they'll even use half of it before oil is a fuel of the past and THAT is why no one wants to cut production – despite this persistent glut that is without end – because they know they are playing a game of musical chairs with oil barrels and they are all going to be stuck with a worthless fuel of the past with a rapidly declining inventory value.</p> <p>This is also bad news for companies like Exxon (XOM), Chevron (CVX)&nbsp;which&nbsp;are, unfortunately, Dow Components. &nbsp;It's bad news for the energy sector and the banks that lent them money so there WILL be disruption – but it's the good and healthy kind as our society moves on from using oil and it's NOT a sign of a slowing global economy – that's why we flipped long this morning!</p> <p>&nbsp;</p> <p><em>Try Phil's Stock World Daily Report, free,&nbsp;<a href=";coupon_or_referrer=ilene" target="_blank">by signing up here.</a></em></p> </div> Auto Sales Citibank Crude Enron Exxon Global Economy Musical Chairs NYMEX OPEC Saudi Arabia Fri, 12 Feb 2016 01:36:33 +0000 ilene 523481 at The War On Cash - The Central Banks' Survival Campaign <p><a href=""><em>Submitted by Paul Rosenberg via Free-Man&#39;s Perspective blog,</em></a></p> <p>Over the last few months a stream of articles have crossed my screen, all proclaiming the need of governments and banks to eliminate cash. I&rsquo;m sure you&rsquo;ve noticed them too.</p> <p><strong>It is terrorists and other assorted madmen, we are told, who use cash. </strong>And so, to protect us from being blown up and dismembered on our very own street corners, governments will have to ban it.</p> <p><strong>It would actually take some effort to imagine a more obvious, naked attempt at fearmongering.</strong> Cash &ndash; <em>in daily use for centuries if not millennia</em> &ndash; is now, suddenly, the agent of spring-loaded, instant death? And we&rsquo;re supposed to just accept that line?</p> <p><strong>But there are good reasons why the insiders are promoting these stories now. </strong>The first of them, perhaps, is simply that they can: After 9/11, a massive wave of compliance surged through the West. It may not last forever, but it&rsquo;s still rolling, and if the entertainment corporations can pump enough fear into minds that want to believe, they may just get them to buy it.</p> <p>The second reason, however, is the real driver:</p> <p><span style="text-decoration: underline;"><strong>Negative Interest Rates</strong></span></p> <p><strong>The urgency of their move to ban one of the longest-lasting pillars of daily life means that the backroom elites think it will be necessary soon. </strong>It would appear that the central banks, the IMF, the World Bank, the BIS, and all their backers, see <a href="">the elimination of cash as a central survival strategy</a>.</p> <p>The reason is simple: cash would allow people to escape from the one thing that could save their larcenous currency system: <em>negative interest rates</em>.</p> <p>To make this clear, I like to paraphrase a famous (and good) quote from Alan Greenspan, back from 1966, during his Ayn Randian days: <strong><u><em>The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.</em></u></strong></p> <p>That was a true statement, and with a slight modification, it succinctly explains the new war on cash:</p> <p style="margin-left: 30px;"><u><strong>The preservation of an insolvent currency system requires that the owners of currency have no way to protect it.</strong></u></p> <p>Cash is currency that you hold in your own hands, that stands more or less alone. It is primarily <em>external</em> to bank control. Electronic money &ndash; bank balances, credit, etc. &ndash; remains <em>inside</em> the banking system and fully subject to bank control.</p> <p>A combination of no cash and negative interest rates would be a quiet, permanent version of what was done in Cyprus, where <a href="">the government simply shut down everything</a>, allowed only the smallest deductions via ATMs, and then stole money from thousands of bank accounts at once.</p> <p><strong>The Cypriot spectacle was fairly large, however, and that tends to undermine the legitimacy of rulership.</strong> So, it is much better to have no ATMs and no cash at all. There would be no lines of angry people talking to each other, only isolated losers with no recourse, licking their wounds while the talking heads on television tell them to stay calm and watch the flashing images.</p> <p><strong>Negative interest rates would give the banks 100% control over your purchases.</strong> They could, even in the worst pinch, allow you to purchase food while freezing the rest of your money. The average person would have no recourse and would simply be robbed&hellip; but very smoothly and with no human face to blame on.</p> <p><strong>Negative interest rates mean that your bank account shrinks day by day, automatically.</strong> Your $1000 in January becomes $950 by December. And where does that money go? To the banks, of course, and to the government. They syphon your money away, drip by drip, and there&rsquo;s nothing you can do about it. This accomplishes several things for them at once:</p> <ul> <li> <p>It finances government, limitlessly and automatically. Forget tax filings; they can just take as they please.</p> </li> <li> <p>It pays off the bad debt of the big banks. (And there are oceans of debt.)</p> </li> <li> <p>It forces you to spend everything you&rsquo;ve got, as soon as you get it. (Otherwise it will shrink.)</p> </li> <li> <p>It gives the system full control over your financial life. Everything is monitored, everything is tracked, and every single transaction <em>must</em> be approved by them (or not). If they decide they don&rsquo;t like you, you&rsquo;re instantly reduced to begging.</p> </li> </ul> <p><span style="text-decoration: underline;"><strong>In short, this is <a href="">a direct return to serfdom</a>.</strong></span></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="274" height="187" alt="" src="" /> </div> </div> </div> Alan Greenspan BIS Central Banks ETC Rosenberg World Bank Fri, 12 Feb 2016 01:20:00 +0000 Tyler Durden 523462 at The Best And Worst Performing Assets Since The End Of QE3 <p>Since The Fed stopped its money-printing extravaganza things have <strong>changed </strong>a little for the status-quo "believers"...</p> <p>&nbsp;</p> <p><a href=""><img src="" width="600" height="469" /></a></p> <p>&nbsp;</p> <p>So, after all this time, we were right - <em><strong>"It's The Fed, Stupid"</strong></em></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="1326" height="1036" alt="" src="" /> </div> </div> </div> Fri, 12 Feb 2016 00:55:00 +0000 Tyler Durden 523434 at Russian Prime Minister Warns There Will Be A "Permanent World War" If Saudis Invade Syria <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p dir="ltr"><em>"It’s a joke. We couldn't wish [for] more than that. If they can do it, then let them do it — but talking militarily, this is not easy for a country already facing defeat in another war, in Yemen, where after almost one year they have failed in achieving any real victory.”</em></p> </blockquote> <p dir="ltr">That’s what one source in the Iranian military <a href="">had to say</a> about reports that Saudi Arabia is preparing to send ground troops into Syria. </p> <p dir="ltr">If you frequent these pages you know why Riyadh (and Ankara for that matter) is considering the ground option. The effort to oust Bashar al-Assad and the Alawite government was going reasonably well right up until September. Sure, the conflict was dragging into its fifth year, but Assad’s army was on the ropes and absent a miracle, it seemed likely that his government would fall. </p> <p dir="ltr">As it turns out, Assad did indeed get a miracle from above although instead of divine intervention it was Russian airstrikes which commenced from Latakia starting on September 30. Contrary to The White House’s prediction that Putin would find himself in a “quagmire,” Russia and Hezbollah have rolled up the opposition and are preparing to recapture Aleppo, the country’s largest city and a major commercial hub. <strong>If that happens, the rebellion is over.</strong></p> <p dir="ltr"><strong><img src="" width="600" height="587" /><br /></strong></p> <p dir="ltr">That would be a disaster to the rebels’ Sunni benefactors as it would mean Iran will preserve the Shiite crescent and its supply lines to Hezbollah. <strong>It would also give Tehran bragging rights in the bitter ideological war with Riyadh.</strong>&nbsp;Simply put, that's unacceptable for the Saudis and so, it’s time to call upon the ground troops. </p> <p dir="ltr">But this isn’t Yemen where the Iranians are fighting via proxies. If the Saudis start shooting at the IRGC or at Hezbollah in Syria it’s just as likely as not that the two countries will go to war and just like that, you’d have the beginning of World War III.</p> <p dir="ltr">Don’t believe us? Just ask Russian PM Dmitry Medvedev. </p> <p dir="ltr">“<strong>If Arab forces entered the Syrian war they could spark a new world war</strong>," Medvedev warned on Thursday. “Ground offensives usually lead to wars becoming permanent". Here’s what else <a href=";_ylt=AwrBT8m107xWn3YAVONXNyoA;_ylu=X3oDMTByMjB0aG5zBGNvbG8DYmYxBHBvcwMxBHZ0aWQDBHNlYwNzYw--">he told Handelsblatt</a>:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p dir="ltr"><em>"The Americans and our Arabic partners must think hard about this: do they want a permanent war?” </em></p> <p dir="ltr">&nbsp;</p> <p dir="ltr"><em>"Do they really think they would win such a war very quickly? That's impossible, especially in the Arabic world. There everyone is fighting against everyone... everything is far more complicated. <strong>It could take years or decades</strong>."</em></p> <p>&nbsp;</p> <p><em>"Why is that necessary? <strong>All sides must be forced to the negotiating table instead of sparking a new world war."</strong></em></p> </blockquote> <p>Yes, "all sides must come to the negotiating table." Of course that's easy for Medvedev to say. After all, it's a lot easier to sit at the table when you've already won and are negotiating from a position of strength.&nbsp;</p> <p>That is, there won't be anything left to negotiate in a couple of weeks if things keep going like they're going. What Moscow pretty clearly wants to do is crush the opposition in Aleppo and then discuss how to proceed with some kind of political "agreement" that will prevent whatever remains of the rebels from launching a prolonged war of attrition involving periodic attacks on government forces.</p> <p>In any event, don't say Russia didn't warn everyone when the Saudis and the Turks end up setting the world on the road to a global conflict. Below, find excerpts from <a href="">an interview The Atlantic conducted</a> with&nbsp;Andrew Tabler of the Washington Institute for Near East Policy.</p> <p><strong>Kathy Gilsinan:&nbsp;</strong>I wanted to start with what the significance of Aleppo has been to the Syrian uprising up to this point.</p> <p><strong>Andrew Tabler:</strong>&nbsp;Aleppo is Syria’s largest city. It’s the commercial hub. It is extremely important, particularly to the opposition, because Aleppo, along with the other northwestern cities, have been some of the strongest opponents to the Assad regime historically. I think the decision in 2012 to take [the city] was one of the first real major offensives of the armed opposition in Syria. And they hoped that by denying the regime Aleppo, it would set up an alternative capital and allow for a process where the Assad regime’s power was whittled away. Since that time, it has instead been one of the most bombed, barrel-bombed, and decimated parts of Syria, and now is much more like Dresden than anything else.</p> <p><strong>Gilsinan:</strong>&nbsp;If Aleppo falls, walk me through what happens next. First, how would it change the balance of power, within the civil war, between the rebels and the regime?</p> <p><strong>Tabler:</strong>&nbsp;I think it would cement the regime’s hold on “essential Syria”—western Syria, perhaps with the exception of Idlib province [to] the south [of Aleppo]. But basically you would have the regime presence from Aleppo the whole way down to Hama, Homs, and Damascus, and that’s the spine of the country, and that’s what concerns the regime and the Iranians in particular. It would then allow them to free up forces, potentially, to go on the offensive elsewhere, directly into Idlib province, most likely, and then eventually into the south. Then after that they could turn their attention finally to ISIS.</p> <p><img src="" width="600" height="634" /></p> <p><strong>Gilsinan:</strong>&nbsp;And then what happens to the regional balance of power within that war?</p> <p><strong>Tabler:</strong>&nbsp;It would be a tremendous loss for the U.S. and its traditional allies: Turkey, Saudi Arabia, Qatar, and Jordan. It’s already been extremely costly for most of those allies, but it would be a defeat [in the face of] the Russian-Iranian intervention in Syria. This would also be a huge loss for the United States vis-à-vis Russia in its Middle East policy, certainly. And because of the flow of refugees as a result of this, if they go northward to Europe, then you would see a migrant crisis in Europe that could lead to far-right governments coming to power which are much more friendly to Russia than they are to the United States. I think that is likely to happen.</p> <p><strong>Gilsinan:</strong>&nbsp;So it changes the entire orientation, not just of the Middle East, but of Europe as well.</p> <p><strong>Tabler:</strong>&nbsp;It will soften up American power in Europe, yeah. And put into jeopardy a lot of the advances in the NATO-accession countries, which are adjacent to Russia, as well.</p> <p>* &nbsp;* &nbsp;*</p> <p>Or, summed up:</p> <p><img src="" width="600" height="342" /></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="546" height="311" alt="" src="" /> </div> </div> </div> Iran Middle East Saudi Arabia Turkey Fri, 12 Feb 2016 00:31:03 +0000 Tyler Durden 523477 at America's National Debt Bomb Caused By The Welfare State <p><a href=""><em>Submitted by Richard Ebeling via,</em></a></p> <p><a href=""><img height="407" src="" width="600" /></a></p> <p>The news is filled with the everyday zigzags of those competing against each other for the Democrat and Republican Party nominations to run for the presidency of the United States. But one of the most important issues receiving little or no attention in this circus of political power lusting is the<strong> long-term danger from the huge and rising Federal government debt.</strong></p> <p>The Federal debt has now crossed the $19 trillion mark. When George W. Bush entered the White House in 2001, Uncle Sam&rsquo;s debt stood at $5 trillion. When President Bush left office in January of 2009, it had increased to $10 trillion. Now into seven years of Barack Obama&rsquo;s presidency, the Federal debt has almost doubled again.</p> <p>And it is going to get much worse, according to the Congressional Budget Office. On January 26, 2016, the CBO released it latest &ldquo;Budget and Economic Outlook&rdquo; analysis for the next ten years, from 2016 to 2026.</p> <p><u><strong>Continuing Deficits and Growing National Debt</strong></u></p> <p>The economists at the CBO estimate that the Federal budget deficit for the fiscal year, 2016, will be $544 billion, or $105 billions more than Uncle Sam&rsquo;s budget deficit in fiscal year 2015. And each year&rsquo;s budget deficit will continue to be larger than the previous year from here on. Indeed, the CBO estimates the Federal government&rsquo;s annual deficits will once more be over $1 trillion starting in 2022 and thereafter.</p> <p>Between 2016 and 2026, the Federal debt, as a result, is projected to increase by a cumulative amount of almost $9.5 trillion, for a total national debt of around $30 trillion just ten years from now.</p> <p>The reason for the continuing ocean of Federal red ink is the fact that while government revenues are projected to be around 49.5 percent higher in fiscal year 2026 ($5,035 trillion) than in fiscal year 2016 ($3.376 trillion), government spending will be over 63 percent more in fiscal year 2016 ($6,401 trillion) than in fiscal year 2016 ($3,919 trillion).</p> <p><u><strong>Understanding the Fiscal History of America</strong></u></p> <p>The famous Austrian-born economist, Joseph A. Schumpeter (1883-1950), once wrote an article on, &ldquo;The Crisis of the Tax State&rdquo; (1918). He said the following about a country&rsquo;s fiscal history:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>&ldquo;[A country&rsquo;s] budget is the skeleton of the state stripped of all misleading ideologies &ndash; a collection of hard facts . . . The fiscal history of a people is above all an essential part of its general history. An enormous influence on the fate of nations emanates from the economic bleeding which the needs of the state necessitates, and from the use to which its results are put . . . The view of the state, of its nature, its forms, its fate [are] seen form the fiscal side . . .</em></p> <p>&nbsp;</p> <p><em>&ldquo;The spirit of a people, its cultural level, its social structure, the deeds its policy may prepare &ndash; all this and more is written in its fiscal history, stripped of all phrases. He who know how to listen to its message here discerns the thunder of world history more clearly than anywhere else . . . The public finances are one of the best starting points for an investigation of society, especially though not exclusively of its political life.&rdquo;</em></p> </blockquote> <p>A hundred years ago, around 1913, before the beginning of the First World War, all levels of government in the United States &ndash; Federal, State, and local &ndash; taxed and spent less than 8 percent of national income, with the Federal government absorbing less than half of this amount.</p> <p>By 1966, Federal outlays alone took 17.2 percent of Gross Domestic Product and are projected to rise to 21.2 percent in 2016 and will to 23.1 percent of GDP by 2026. Over the fifty years between 1966 and 2016, government outlays as a percentage of GDP increased by nearly 24 percent, and will be growing more over the next decade.</p> <p><u><strong>The Welfare State Drives the Deficits and the Debt</strong></u></p> <p>What can America&rsquo;s fiscal history, as Schumpeter suggested, tell us about the direction and drift of government over the last half-century and looking to the future? Perhaps not too surprisingly for both supporters and critiques of the welfare state, it has been and is being driven by the continuing expansion of the &ldquo;mandatory spending&rdquo; of the redistributive &ldquo;entitlement&rdquo; programs.</p> <p>In 1966, the intergenerational redistribution program known as Social Security absorbed 2.6 percent of GDP; in 2016, it will suck up 4.9 percent, for a nearly 90 percent increase. And by 2026, Social Security spending will represent 5.9 percent of GDP, for a 20 percent increase over the coming decade. (See my article, <a href="">&ldquo;There is No Social Security Santa Claus.&rdquo;</a>)</p> <p>Major Federal-funded health care programs (Medicare, Medicaid and related programs) siphoned off a mere 0.1 percent of GDP in 1966; in 2016 this will have increased to 5.6 percent of GDP, a more than 500 percent increase over fifty years. By 2026, the CBO estimates, these Federal health care programs (now including ObamaCare) will take 6.6 percent of GDP, for a nearly 18 percent increase in the next ten years. (See my article, <a href="">&ldquo;For Healthcare the Best Government Plan is No Plan.&rdquo;</a>)</p> <p>Summing over all of these and related mandatory entitlement spending programs, in 1966 the redistributive welfare state absorbed 4.5 percent of the nation&rsquo;s Gross Domestic Product; in 2016 this will be 13.3 percent of GDP, and 15 percent of GDP in 2026. Or a 317 percent increase over the fifty years between 1966 and 2016, and an additional 13 percent increase between 2016 and 2026.</p> <p>Due to all of the deficit spending to finance this redistributive largess over what the government collects in tax revenues to fund it, interest on the Federal debt will increase from 1. 4 percent of GDP in 2016 to 3.0 percent of GDP in 2026, or more than a 100 percent increase in the interest cost on the national debt over the next ten years as a percentage of GDP.</p> <p>Welfare state spending plus mandatory interest payments on the Federal debt now absorbs around 60 percent of everything Uncle Sam spends.</p> <p>For a point of comparison in this tilted direction of government spending, all non-entitlement spending represented 11. 5 percent of GDP in 1966, and will be down to 6.5 percent of GDP in 2016 and is projected to be 5.2 percent of GDP in 2026. This represents a decrease as a percentage of GDP in non-entitlement spending of 45 percent over the last fifty years, and another 20 percent decline as a percentage of GDP over the coming decade.</p> <p>Now in absolute terms all government spending has grown over the last fifty years. But what America&rsquo;s fiscal history highlights, looking over the half-century that is behind us, is that it is the dynamics of a growing domestic welfare state that is fundamentally driving the country&rsquo;s financial ruin.</p> <p><u><strong>The Force of Collectivist Ideology and Political Privilege</strong></u></p> <p>This has been coming about due to two fundamental and interconnected factors at work: First, the ideology of a right to other people&rsquo;s wealth and income, and, second, the democratization of political privilege.</p> <p>For more than a century, now, the older American political tradition of classical liberalism, with its belief in individual liberty, economic freedom and constitutionally limited government, has been slowly but surely eroded by the &ldquo;progressive&rdquo; ideal of political, social and economic collectivism.</p> <p>These dangers were already present in the late nineteenth century with the rise of the socialist movement, and its then appearance on this side of the Atlantic. &ldquo;The workers,&rdquo; however, were not the vanguard of socialism in either Europe or America. It was mostly intellectuals and political philosophers who arrogantly dreamed dreams of new and &ldquo;better worlds&rdquo; designed and planned according to what they considered a more moral and &ldquo;socially just&rdquo; society. (See my article,<a href="">&ldquo;American Progressives are Bismarck&rsquo;s Grandchildren.&rdquo;</a>)</p> <p><u><strong>Its Not Your Fault and Others Owe You</strong></u></p> <p>Over the decades, for a century now, the socialist criticisms of capitalist society have eaten away, little by little, the understanding, belief in, and desire for a truly free market society. Your pay seems to be too low in comparison to what you think or have been told you deserve? It must be due to the exploitation and unfairness of profit-making businessmen.</p> <p>You&rsquo;re afraid that you might not have the health care you want or the retirement money you think you&rsquo;ll need, surely it must because &ldquo;the rich&rdquo; have squandered their unearned wealth on things other than what &ldquo;the people&rdquo; really need. Your child cannot go to the topnotch college or university you would want them to attend for your offspring&rsquo;s future? That can be cured along with those other injustices by taxing or regulating those who have more than you, and who don&rsquo;t deserve it.</p> <p>The social game is rigged; nothing is your fault, it is all due to those who have more than you, and who don&rsquo;t pay their &ldquo;fair share&rdquo; to fund what &ldquo;working people&rdquo; like you need and have a &ldquo;right&rdquo; to.</p> <p>When such thinking is repeated enough, time-after-time over years and, now, generations, a large number of people in our society implicitly take it all to be true. If only government has sufficient taxing and regulating authority, the world can be made better for &ldquo;the many&rdquo; against the greed and social disregard of the few (the &ldquo;one percent.&rdquo;)</p> <p><u><strong>Losing the Spirit and Practice of Individualism</strong></u></p> <p>The dangers in all this was warned about long ago, for instance, by J. Laurence Laughlin, an economist who was the founder of the economics department at the University of Chicago. In his 1887 book, <em>The Elements of Political Economy</em> Laughlin said:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>&ldquo;Socialism, or the reliance on the state for help, stands in antagonism to self-help, or the activity of the individual. That body of people certainly is the strongest and the happiest in which each person is thinking for himself, is independent, self-respecting, self-confident, self-controlled and self-mastered. Whenever a man does a thing for himself he values it infinitely more than if it is done for him, and he is better for having done it . . .</em></p> <p>&nbsp;</p> <p><em>&ldquo;If, on the other hand, men constantly hear it said that they are oppressed and downtrodden, deprived of their own, ground down by the rich, and that the state will set all things right for them in time, what other effect can that teaching have on the character and energy of the ignorant than the complete destruction of all self-help?</em></p> <p>&nbsp;</p> <p><em>&ldquo;They begin to think that they can have commodities which they have not helped to produce. They begin to believe that two and two make five. It is for this reason that socialistic teaching strikes at the root of individuality and independent character, and lowers the self-respect of men who ought to be taught self-reliance . . .</em></p> <p>&nbsp;</p> <p><em>&ldquo;The right policy is a matter of supreme importance, and we should not like to see in our country the system of interference as exhibited in the paternal theory of government existing in France and Germany.&rdquo;</em></p> </blockquote> <p>What Professor Laughlin feared and warned about nearly 130 years ago has increasingly come to pass with the social attitudes and political desires and demands of too many of our fellow countrymen. European collectivism invaded and continues to conquer America&rsquo;s original spirit and politics of individualism.</p> <p><u><strong>The Rise of Democratized Privilege</strong></u></p> <p>The other force at work in bringing about our growing fiscal socialism is what I would suggest calling <em>democratized privilege</em>. Before the rise of democratic governments in the nineteenth century, the State was seen as a political force for exploitation and abuse. Under monarchy, kings and princes used their taxing and policing powers to plunder their subjects for their own gain as while as for the benefit of the aristocrats and noblemen who gave allegiance, obedience and support to the monarch. Power, privilege and plunder were for the political few at the expense of the many in society.</p> <p>At first the call for democratic government was to place limits on the powers of kings and their lords-of-the-manor supporters, so to restrain political abuses that threatened or violated individuals&rsquo; rights in their lives, liberty and private property.</p> <p>But with the rise of socialist and welfare-statist ideas as the nineteenth century progressed, there emerged a new ideal: a welfare-providing government for &ldquo;the masses.&rdquo; The view came to be that government was no longer a fearful master needed restraint and limits. No, democratically-elected government was now conceived as &ldquo;the people&rsquo;s&rdquo; servant to do its bidding and to provide it with benefits.</p> <p>People hoping to gain favors and privileges from new democratic governments formed themselves into groups of common economic interests. In this way, they aimed to pool the costs of the lobbying and politicking that was required to obtain what they increasingly came to view as their &ldquo;right,&rdquo; that is, to those things to which they were told and demanded they were &ldquo;entitled.&rdquo;</p> <p>No longer were redistributive privileges to be limited to the few, as under the old system of monarchy. Now privileges and favors were to be available to all, heralding a new age, an <em>Age of Democratized Privilege</em>. More and more people are dependent upon government spending of one form or another for significant portions of their income. And what the government does not redistribute directly, it furnishes indirectly through industrial regulations price and production controls, and occupational licensing procedures.</p> <p><u><strong>Government Dependency and Resistance to Repeal</strong></u></p> <p><strong>As dependency upon the State has expanded, the incentives to resist any diminution in either governmental spending or intervention have increased.</strong> All cuts in government spending and repeal of interventions threaten an immediate and often significant reduction in the incomes of the affected, privileged groups.</p> <p>And since many of the benefits that accrue to society as a whole from greater market competition and more self-responsibility are not immediate but rather are spread out over a period of time, there are few present-day advocates of a comprehensive reversal of all that makes up the modern welfare state, and most certainly not in an election year.</p> <p>While it may not be the center of political discussion and debate in this election year, <u><em><strong>the dilemma of ever-worsening government deficits and expanding national debt is not going to go away.</strong></em></u></p> <p>It will have to be, eventually, faced and confronted. But as Joseph Schumpeter pointed out to us, the fiscal history of a country tells us the underlying ideological and cultural currents at work that pull a nation in a particular direction.</p> <p>The real dilemma is not whether this or that government program can be cut or reduced in terms of how fast it is growing at present and future taxpayers&rsquo; expense. The real challenge is to reverse the political and cultural trends toward more and growing fiscal redistributive socialism.</p> <p><strong>This will require a strong and articulate revival of a culture and a politics of individualism. It is, ultimately, a battle of ideas, not budgetary line items.</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="936" height="635" alt="" src="" /> </div> </div> </div> Barack Obama Budget Deficit Congressional Budget Office Deficit Spending France Germany Gross Domestic Product Medicare National Debt Obamacare White House Fri, 12 Feb 2016 00:05:00 +0000 Tyler Durden 523457 at Here Is The Real Reason Why Authorities Want To Ban High Denomination Bank Notes <p>Over the past month, one of the more alarming developments in Europe has been the move to eliminate high denomination bank notes like the €500 bill. </p> <p>Indeed, as Bank of America reports, having changed its mind on the matter over the past few years, the ECB is now considering abolishing the €500 note. In a recent interview, Executive Board member Benoit Coeure said that "<strong>the ECB is assessing the fate of the €500 euro banknote, as concerns about its use in money laundering and crime grow and its usefulness for large payments comes into question</strong>" adding that "<strong>competent authorities increasingly suspect that they are being used for illegal purposes, an argument that we can no longer ignore</strong>." (like all other ECB matters, there appears to be infighting on this issue too, and subsequently another ECB member Yves Mersch <a href="">stated </a>that the he would like to see "proof that high-denomination notes are used by criminals").</p> <p>So what, big deal, eliminate it. The people will still have 5, 10, 20, 50, 100 and 200 euro bills right.</p> <p>Well, here's the thing: the €500 note is the second highest currency denomination in G10, after the CHF1,000 note. More importantly, the total value of €500 notes in circulation amounts to €306.8bn and has been rising. </p> <p><a href=""><img src="" width="500" height="242" /></a></p> <p>As a share of the value of total euros in circulation, the €500 note is the second-highest, after the €50 note. </p> <p><a href=""><img src="" width="500" height="237" /></a></p> <p>In other words, <span style="text-decoration: underline;"><strong>if overnight the €307 billion worth of €500 bills were eliminated, the notional value of the entire amount of European physical currency in circulation would decline by 30% to €700 billion! </strong></span></p> <p>And there you have it: while it may not be banning all European cash outright, we are confident the ECB would be delighted if one third of it was to start, while pretending to be fighting financial crime, terrorism, corruption and dryg dealers.<strong>&nbsp;</strong></p> <p>Of course, what Europe would be truly doing is setting the scene for ever more aggressive NIRP, and by removing the highest denomination bank notes, it would make evading negative that much more difficult and costly (albeit would certainly favor gold).<strong><br /></strong></p> <p>Here Bank of America points out that while abolishing the €500 note may even end up weakening the EUR currency. This is what it said: </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>"<strong>we would expect that abolishing a note that represents almost 30% of the total Euros in circulation would be negative for the currency, keeping everything else constant. </strong>The share of the €500 note in the total value of Euros in circulation has been falling since 2009 and this has coincided with a weakening Euro in real effective terms. This is not evidence of causality, but we should not ignore it.</p> <p>&nbsp;</p> <p><strong>If we are right, the Euro will weaken, primarily against the USD and the CHF</strong>. The USD is the most liquid currency and we would expect it to capture a large share of the drop in the demand for the Euro as a store of value. However, the CHF could also benefit, having the largest note denomination in G10 economies. Indeed, the CHF1000 note is already very popular, representing more than 60% of the CHF&nbsp; notes in circulation, unless the SNB follows the example of the ECB and also abolishes the CHF1000 note.</p> </blockquote> <p>Maybe not: the EUR would certainly not weaken against the Dollar if at the same time as Europe is eliminating its highest denomination bill, the US were to likewise to eliminate its own "high denomination" bills. This is the push by current Harvard School of Government senior fellow Peter Sands who recently was booted from beleaguered British bank Standard Chartered (whose exposure to China is among the highest in Europe).</p> <p>Sands appeared on CNBC earlier today to double down on his "modest proposal" that the US should eliminate its highest denominated bill, aka the Benjamins, because doing so would "<strong>deter tax evasion, financial crime, terrorism and corruption</strong>."</p> <p><img src="" width="600" height="358" /></p> <p>&nbsp;</p> <p>Ok fine, remove the $100 bill: surely it won't affect much right. </p> <p>Wrong. As the latest <a href="">Treasury data shows</a>, <strong>$1.08 trillion of the total $1.38 trillion in physical US currency exist in the form of $100 bills.</strong></p> <p>&nbsp;</p> <p><img src="" alt="Chart of value of currency in circulation, excluding denominations larger than the $100 note. Details are in the Data table above." style="height: 409px; width: 600px;" /></p> <p>&nbsp;</p> <p>In other words, there is now an all too explicit "trial balloon" push to ban the one banknote that accounts for a whopping 78% of all US currency in circulation.</p> <p>So there you have the real reason why suddenly high denomination bank notes are the target: it is not because "drug dealers" and tax-evaders use them, but because between banning Europe's €500 bill and the US $100 bill, <strong>over 56% of all physical currency currently in circulation in Europe and the US would disappear.</strong> </p> <p>And all in the name of "fighting crime", when the real reason is to set the stage for NIRP and to progressively move down the chain and ban increasingly smaller denominations.</p> <p>Will this drive to start the elimination of physical cash succeed? We don't know, but for once the Greeks are far ahead of the curve. As <a href="">Kathimerini reports</a>, "<strong>citizens who keep cash outside the banking system are running in droves to bank branches to ask for details and clarifications on reports that the European Central Bank is planning to withdraw 500-euro notes</strong>."</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>With the country already in a seven-year crisis, many people have opted to hide their money at home, in vaults, mattresses and other places. <strong>Banking sources say that many people have chosen 500-euro notes because they are more practical for carrying and hiding – after all, just 20 such notes come to 10,000 euros. </strong></p> <p>&nbsp;</p> <p>In 2015 alone deposits in Greece declined by 40 billion euros, with banks estimating that at least 20 billion of that went into safe deposits and mattresses. </p> <p>&nbsp;</p> <p>Following the publication that European authorities were questioning whether it makes sense to have 500-euro notes in circulation, many in Greece – especially older people – rushed to deposit the money in their accounts. ECB governing council member Benoit Coeure spoke yesterday in favor of the withdrawal of the largest notes, stressing that the ECB will make a decision to that effect soon. </p> <p>&nbsp;</p> <p>A new Morgan Stanley survey on Greece showed that <strong>80 percent of people who withdrew their deposits from the banking system in recent months have not returned them, with 93 percent being determined not to do so</strong>. The survey also found that confidence in the Greek banking system remains low, as 62 percent of people are uncomfortable about placing money in a bank account.</p> </blockquote> <p>Naturally, by removing the highest denomination bank note, all Europe would do is make it that much more difficult to find alternatives to holding large amounts of money in physical form and thus outside the banking system, where money is about to be taxed with negative rates. </p> <p>There is the question whether this no to clever ploy will backfire, and instead of forcing people out of cash, instead lead to a run on bank cash, which will then be converted into physical precious markets. The Greeks have already figured it out; we wonder how long until the US population follows suit.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="620" height="344" alt="" src="" /> </div> </div> </div> Bank of America Bank of America China Corruption European Central Bank Greece Morgan Stanley notional value Standard Chartered Thu, 11 Feb 2016 23:57:22 +0000 Tyler Durden 523473 at Millennials Now Prefer Socialism To Capitalism <p dir="ltr">On Tuesday, Bernie Sanders swept to victory in the New Hampshire primary over rival Hillary Clinton.</p> <p dir="ltr">To be sure, Sanders was expected to win. Handily.</p> <p dir="ltr">Still, <strong>there’s something surreal about the fact that America is edging ever closer to a situation that will see an avowed socialist square off against one of the country’s quintessential capitalists for the keys to The White House</strong>.</p> <p dir="ltr">As we and others have documented, the American electorate is fed up with politics as usual in Washington. Many voters have no hope that the system can be changed as long as both parties continually field mainstream, establishment candidates all of whom are connected to powerful lobbyists, Wall Street, and corporate America.</p> <p dir="ltr">So disgruntled are Americans that the candidates with the most buzz around their campaigns are Donald Trump and Bernie Sanders. </p> <p dir="ltr">The capitalist and the socialist. </p> <p><span style="font-size: 1em; line-height: 1.3em;">Against that backdrop we present the following interesting chart from a recent YouGov survey and brief color from WaPo. As you can see, </span><strong><span style="font-size: 1em; line-height: 1.3em;">respondents younger than 30 now rate socialism </span><span style="font-size: 1em; line-height: 1.3em;">more </span></strong><span style="font-size: 1em; line-height: 1.3em;"><strong>favorably than capitalism</strong>. We suppose it’s all that good will towards Wall Street.</span></p> <p><span style="font-size: 1em; line-height: 1.3em;"><img src="" width="600" height="380" /></span></p> <p><span style="font-size: 1em; line-height: 1.3em;">From <a href=";tid=ss_tw">WaPo's Catherine Rampell</a>:&nbsp;</span></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em>In my&nbsp;<a href="">column</a>&nbsp;today, I mentioned&nbsp;that <strong>one reason millennials prefer Bernie Sanders to Hillary Clinton is that&nbsp;they’re not just willing to look past Sanders’s socialism — they actually&nbsp;like&nbsp;his socialism. </strong>It’s a feature, not a bug.</em></p> <p>&nbsp;</p> <p><em>Here are some of the data I was referring to.</em></p> <p>&nbsp;</p> <p><em>In a recent&nbsp;<a href="">YouGov survey</a>, respondents were asked whether they had a “favorable or unfavorable opinion” of socialism and of capitalism. Below are the results of their answers, broken down by various demographic groups.</em></p> <p>&nbsp;</p> <p><em>Democrats rated&nbsp;socialism and capitalism equally positively&nbsp;(both at 42 percent favorability). <strong>And respondents younger than 30 were the only group that rated socialism&nbsp;morefavorably than capitalism</strong> (43 percent vs.&nbsp;32 percent, respectively).</em></p> </blockquote> <p>* &nbsp;* &nbsp;*</p> <p>"Feel the Bern"...</p> <p><img src="" width="600" height="330" /></p> <p><span style="font-size: 1em; line-height: 1.3em;"><br /></span></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="813" height="515" alt="" src="" /> </div> </div> </div> Bernie Sanders Corporate America Donald Trump White House Thu, 11 Feb 2016 23:05:21 +0000 Tyler Durden 523460 at