http://www.zerohedge.com/fullrss2.xml/BoomBustBlog/BoomBustBlog/BoomBustBlog/BoomBustBlog/article/article/article/article/article/news/article/article/article/article/article/article/article/article/article/guest-post-migration-black-swans en Working-Age Depopulation Is Hugely Bullish For Assets... Bearish For Mankind http://www.zerohedge.com/news/2017-10-22/working-age-depopulation-hugely-bullish-assets-bearish-mankind <p dir="ltr"><em><a href="https://econimica.blogspot.com/2017/10/working-age-depopulation-is-hugely.html">Authored by Chris Hamilton via Econimica blog,</a></em></p> <p dir="ltr"><strong>Population growth is the primary, if not sole, contributor to growth in consumption and the resultant economic growth.</strong>&nbsp; But not simply any population, but it is the growing population of the working age or &quot;core&quot; population of 20 to 65 year olds (particularly among the wealthy or developing nations) that is hyper-critical.&nbsp; The chart below shows the average household income and expenditures by the age of the head of the household.&nbsp;<strong> Not surprisingly, the 35 to 64 year old age group makes and spends more than double the younger or older age groups.&nbsp;</strong> Although the dollar amounts vary, this principle is true worldwide.</p> <p dir="ltr"><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/22/20171022_depop1.png"><img height="292" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/22/20171022_depop1.png" width="500" /></a></p> <p dir="ltr"><strong>The rise, peak, and deceleration of core population growth among the nations with income, savings, and/or access to credit goes an awful long way in explaining the deceleration of economic growth.&nbsp; </strong>That decelerating growth explains the interest rate cuts, rise in debt, and now the rise in central bank monetization.&nbsp; This change in core growth (and the central banks reactions to it) explains the great and accelerating divergence of negative economic activity vs. positive asset valuations.&nbsp; The charts below show core population growth (which is determined through 2035, and estimates from there on all taken from the United Nations).</p> <p dir="ltr">The chart below details the change (per five year periods) in the &quot;core&quot; global working age population (20-65yr/olds, excluding Africa) and &quot;elderly&quot; (65+yr/olds, excluding Africa...why x-Africa explained below).&nbsp;</p> <ul dir="ltr"> <li>Core growth peaked in 2010 and growth will decelerate by 52% in the current period....in real numbers, the core population will grow 150 million fewer between 2015 and 2020 than it did between 2005 to 2010.</li> <li>Core growth will decelerate 80% by 2035...in real numbers, the core will grow by 230 million fewer from 2030 to 2035 than it did during the peak growth period.</li> <li>By 2040, the core is likely to begin outright declining.</li> </ul> <p dir="ltr"><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/22/20171022_depop2.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/22/20171022_depop2.png" style="width: 500px; height: 295px;" /></a></p> <h3><u><em>Global 20-65yr/old vs. 65+yr/old (x-Africa)</em></u></h3> <p>While working age population growth is decelerating, elderly population growth is accelerating and growth per period will more than double from 2010 through 2020.&nbsp; <strong>Surging elderly growth will likely surpass dwindling core growth by 2025.</strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/22/20171022_depop3.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/22/20171022_depop3.png" style="width: 500px; height: 298px;" /></a></p> <h3><em><u>Global 65-75 vs. 75+ (x-Africa)</u></em></h3> <p>If you looked at the first chart much, then <strong>the chart below will be cause for extreme alarm.&nbsp;</strong> 2015 through 2020 is the peak of growth among the 65 to 75yr/old group and from 2025 onward, the 75+yr/old will be the primary source of population growth.&nbsp; <strong>But since 75+yr/olds make and spend half as much...the economic impact should be really clear.&nbsp; </strong>A halving of income growth and spending (or a proportionate decline of economic growth should be the expectation).</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/22/20171022_depop4.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/22/20171022_depop4.png" style="width: 499px; height: 292px;" /></a></p> <p>I&#39;ll outline the regions by the wealthiest to poorest and most economically important to least...and you may notice depopulation among wealthy and growth among poor.</p> <h3><u><em>Europe</em></u></h3> <p><strong>European core growth peaked in 1985 and is now indefinitely declining, falling by 14 million during the current five year period...and on and on.&nbsp;</strong> Meanwhile, the quantity of elderly keeps adding up but by 2025, European elderly growth will peak and begin decelerating (chart below).</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/22/20171022_depop5.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/22/20171022_depop5.png" style="width: 499px; height: 292px;" /></a></p> <p>Breaking down the growth of the European elderly between 65-75 vs. 75+yr/olds...<strong>all growth is shifting to the eldest and lowest of earners, slightest of spenders </strong>(chart below).&nbsp; Economically, this portends things are going to get far worse Europe-wide.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/22/20171022_depop6.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/22/20171022_depop6.png" style="width: 496px; height: 290px;" /></a></p> <h3><u><em>N. America (Canada, US)</em></u></h3> <p>Core growth peaked in 2000 &amp; growth is down 75% since.&nbsp; Inversely, elderly growth is surging and will peak by 2025 (chart below).</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/22/20171022_depop7.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/22/20171022_depop7.png" style="width: 496px; height: 290px;" /></a></p> <p>The chart below highlights that while N. America&#39;s growth moves to the 65+ population...it will be shifting to the oldest of the old.&nbsp; <strong>Again, thinking of the income and spending of the elderly, the surge in growth among 75+yr/olds is a death knell economically.</strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/22/20171022_depop8.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/22/20171022_depop8.png" style="width: 496px; height: 290px;" /></a></p> <h3><u><em>Asia</em></u></h3> <p><strong>Asia represents about 3/5th&#39;s of the worlds population, so even small changes there are a big deal everywhere. </strong></p> <ul> <li>Asia adult core population growth has decelerated by 47% in the most recent five year period since the &#39;05 to &#39;10 period...in real numbers, growth has decelerated by 110 million.</li> <li>Asia adult core population growth will decelerate by nearly 80% by 2035 and turn outright negative somewhere between 2040 to 2050 (chart below).</li> </ul> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/22/20171022_depop9.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/22/20171022_depop9.png" style="width: 500px; height: 301px;" /></a></p> <h3><u><em>East Asia</em></u></h3> <p>China, Japan, N/S Korea, Taiwan, Mongolia</p> <ul> <li>Core population growth peaked in 1990 (adding over 100 million new adults from &#39;85 to &#39;90) but has turned outright negative during the current five year period, declining by 12 million.</li> <li>Accelerating core depopulation in China, Japan, Taiwan, S. Korea, etc. will be persistent for the remainder of most of the rest of our lives.&nbsp; This will be a phenomenon unlike the contemporary world has ever seen.</li> <li>All growth will solely be among the elderly (chart below).</li> </ul> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/22/20171022_depop10.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/22/20171022_depop10.png" style="width: 500px; height: 301px;" /></a></p> <p><strong>China, Japan, S. Korea, Taiwan will be home to the most 75+yr/olds in the world.&nbsp;</strong> The most elderly of elderly (that add the least possible to economic growth) are set to surge in unprecedented numbers (chart below).</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/22/20171022_depop11.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/22/20171022_depop11.png" style="width: 500px; height: 301px;" /></a></p> <h3><em><u>Middle East</u></em></h3> <p>West Asia is made up of Armenia, Azerbaijan, Bahrain, Cyprus, Georgia, Iraq, Israel, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, Palestine, Syria, Turkey, UAE, Yemen.</p> <ul> <li><strong>Core growth peaked in 2010 and is down 31% in 2020 </strong>(chart below).</li> </ul> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/22/20171022_depop12.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/22/20171022_depop12.png" style="width: 500px; height: 301px;" /></a></p> <h3><em><u>South America</u></em></h3> <ul> <li>Core growth peaked in &#39;05 and is down 28% vs. surging elderly growth.</li> <li>Elderly growth will surpass core growth by 2030 and core growth will likely be negative by 2040 (chart below).</li> </ul> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/22/20171022_depop13.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/22/20171022_depop13.png" style="width: 500px; height: 301px;" /></a></p> <h3><em><u>South Central Asia</u></em></h3> <p>The most populous region includes India, Kazakhstan, Kyrgzstan, Tajikistan, Turkmenistan, Uzbekistan, Afghanistan, Bangladesh, Iran, Pakistan, Nepal, Sri Lanka.</p> <ul> <li>Core growth peaked in 2010 &amp; will be down 8% in the current five year period.</li> <li>Core growth will be down 32% by 2035...and continuing to fall fast from there.</li> </ul> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/22/20171022_depop14.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/22/20171022_depop14.png" style="width: 500px; height: 301px;" /></a></p> <h3><u><em>Central America &amp; Caribbean</em></u></h3> <p>Core growth peaked in 2010 and will consistently decelerate until turning negative around mid century.&nbsp; Of course, growth among the elderly will do the inverse.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/22/20171022_depop15.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/22/20171022_depop15.png" style="width: 500px; height: 301px;" /></a></p> <h3><em><u>Africa</u></em></h3> <p>While the population growth in Africa is in the right places of core vs. elderly, it unfortunately will add up to almost nothing as outlined <a href="https://econimica.blogspot.com/2016/11/what-world-looks-like-x-africa.html" target="_blank">HERE</a>.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/22/20171022_depop16.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/22/20171022_depop16.png" style="width: 499px; height: 292px;" /></a></p> <h3><u><em>Conclusion</em></u></h3> <p><strong>I submit that these changes, unlike anything experienced by contemporary humankind, explain why central banks have taken over.&nbsp; Global free markets have ceased to exist and asset prices are now centrally determined rather than freely set between buyers and sellers.&nbsp; </strong>This is only the beginning and I haven&#39;t a clue how this ends but how central banks will respond is absolutely clear...they will monetize.&nbsp; The fast rising combined Federal Reserve, Bank of Japan, &amp; European Central Bank balance sheets are charted below vs. decelerating core population growth.&nbsp; <em><strong>Asset prices will soar due to extreme weakness coupled with extreme monetization until this ludicrous monstrosity falls apart.</strong></em></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/22/20171022_depop17.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/22/20171022_depop17.png" style="width: 500px; height: 301px;" /></a></p> <p><strong>Of even greater concern or consequence than the economic or financial impacts, the very viability of democratic republics are at stake.&nbsp;</strong> In a world where the pies that matter are either seeing decelerating growth or outright shrinking indefinitely, the public will be left with a choice.&nbsp; Vote for the candidate suggesting cuts or the candidate suggesting we need never cut...because We can run ever larger deficits funded by greater central bank monetization (an unconstitutional body for this very reason that it allows the Congress to avoid its sole purpose of finding a balanced compromise of infinite wants vs. limited revenues...de Tocqueville&#39;s fear come to fruition).&nbsp; Unfortunately the only &quot;viable&quot; choices to lead us through the options will be liars and the public will select the liar who tells the lies they most want to be told and prefer to believe.&nbsp; This is how a noble idea dies.&nbsp; But what is born is not clear.</p> <p><u><em><strong>Economic decline masked with financial trickery leading to political farce and ultimately likely culminating in social breakdown (aka war).</strong></em></u>&nbsp; But, of course, never have we gone to war with such horrific capability.&nbsp; I believe we have the capacity to avoid the worst of outcomes...but if We can&#39;t even begin to discuss the problems We face (let alone potential solutions), then history seems sadly likely to repeat itself.</p> <pre> </pre> <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="482" height="290" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20171022_depop17.png?1508700324" /> </div> </div> </div> http://www.zerohedge.com/news/2017-10-22/working-age-depopulation-hugely-bullish-assets-bearish-mankind#comments Afghanistan Ageing Bank of Japan Bank of Japan Business Caribbean Central America Central Asia Central Banks China Congress Demography East Asia Economic growth ETC European Central Bank European Central Bank Extreme poverty Federal Reserve Federal Reserve Bank Human overpopulation India Iran Iraq Israel Japan Kazakhstan Kuwait Middle East Monetization Population Population decline Population ecology Population growth Saudi Arabia South Central Asia Turkey Turkmenistan United Nations US Federal Reserve Uzbekistan West Asia Sun, 22 Oct 2017 21:15:00 +0000 Tyler Durden 605776 at http://www.zerohedge.com "They Called Him 'The Pig'" - Driver Speaks Out About Harvey Weinstein's Disgraceful Behavior http://www.zerohedge.com/news/2017-10-22/they-called-him-pig-driver-speaks-out-about-harvey-weinsteins-disgraceful-behavior <p>Just as disgraced Hollywood studio head Harvey Weinstein is finishing up his two week stint in a $2,000-a-night Arizona rehab, the former producer&rsquo;s driver has apparently struck a (probably lucrative) deal with British tabloid <a href="https://www.thesun.co.uk/news/4738211/harvey-weinsteins-driver-sex-claims/">the Sun</a> to share sickening details about Weinstein&rsquo;s reprehensible behavior.</p> <p>In one repugnant anecdote, Weinstein - who has been accused of harassment or assault by more than 50 women - had sex with a woman in the back of his car as she pleaded with him not to hurt her. Weinstein then took her to a hotel room for another session while his pregnant wife slept nearby.</p> <p><strong>Driver Mickael Chemloul, 56, said behavior like this earned Weinstein the nickname&nbsp; &ldquo;le porc&rdquo; (&ldquo;the pig&rdquo;) by locals in the South of France, where he frequently stayed. </strong></p> <p>Chemloul, who lives in Cannes France and worked for Weinstein when he was in the country, said the sleazy film-maker also kept an emergency&nbsp; stash of condoms and Viagra in his Mercedes&rsquo; glove compartment. Chemloul worked for Weinstein from 2008 to 2013.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>&ldquo;Weinstein was a terrible man to work for.&nbsp; Everyone knew him as le porc because of his size and because he sweated so much. When he came to Cannes we all knew what to expect.&quot;</strong></p> </blockquote> <p><a href="http://www.zerohedge.com/sites/default/files/images/user245717/imageroot/2017/10/18/2017.10.23driver.JPG"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user245717/imageroot/2017/10/18/2017.10.23driver_0.JPG" style="width: 500px; height: 288px;" /></a></p> <p>After picking up a drunk woman at a billionaire&rsquo;s yacht party, Weinstein forced her to perform sex acts in the back of his limo while pregnant wife Georgina Chapman stayed behind at the Hotel du Cap-Eden-Roc.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;She was a good-looking girl, around 25 to 30, who had clearly had a few drinks. This was a fairly familiar sight for me, but even I was shocked when I heard her say, &lsquo;Don&rsquo;t hurt me&rsquo; in the car.</p> <p>&nbsp;</p> <p><strong>&ldquo;I turned and saw her with her head in his lap and him pulling her hair.&nbsp; I knew Georgina decided to stay in her room and miss the party because she was feeling tired. </strong></p> </blockquote> <p>Weinstein&rsquo;s wife, who is seeking a separation, later called Chemloul to ask where Weinstein was.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>&ldquo;The worst of it was that Georgina phoned me at 4.30 while I was trying to catch some sleep in the car and asked me where Harvey was.</strong></p> <p>&nbsp;</p> <p>&ldquo;I was in an awkward spot. All I could think of was he had gone for a meeting with some business friends. I felt forced to lie.</p> <p>&nbsp;</p> <p>&ldquo;I remember a night porter saying to me, &lsquo;What is he doing coming in with a hooker when his wife is asleep upstairs?&rsquo;</p> <p>&nbsp;</p> <p><strong>&ldquo;When Harvey finally turned up he looked in a right state, sweating like a pig with his shirt out. &lsquo;What did you tell my wife?&rsquo; he blurted. To be honest, he sickened me.&quot;</strong></p> </blockquote> <p>Once Weinstein came within minutes of dying after his lap band burst, requiring emergency surgery. The accident took place at Naomi Campbell&rsquo;s birthday party at the Hotel du Cap-Eden-Roc. He said: &ldquo;People ran out to say Harvey was flat out on the floor and could hardly breathe.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;Luckily for Harvey someone found a surgeon who lived nearby on the Cap D&rsquo;Antibes.&quot;</p> <p>&nbsp;</p> <p><strong>&ldquo;It appeared he had eaten so much from the buffet that it was too much for the sort of gastric band he had fitted.</strong></p> </blockquote> <p>Mickael said Weinstein fuelled himself on sugar before heading to orgies. He recalled:&nbsp; &ldquo;He would have Viagra, chewing gum, Coca-Cola and loads of M&amp;M&rsquo;s sweet packs in the car. It gave him the energy to carry on the way he did.&quot;</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>&ldquo;Harvey turned to me and said, &lsquo;Tell them who I am and that I am a film producer&rsquo;. It is hard to believe but he was shaking.&nbsp;</strong> As he followed them in, he was gently groping them.&nbsp; A day without sex for Harvey is like a summer day without sun. The glove box always contained contraceptives for when he had a pressing need, along with Viagra and all the medicinal pills and tablets he had for his health&quot;</p> <p>&nbsp;</p> <p><strong>&ldquo;I have seen him attend three dinners in one night and still go later to the villas well known for their orgies with police outside to protect the guests.&quot; </strong></p> </blockquote> <p>Mickael quit working for Weinstein after he allegedly attacked him in 2013 when he failed to track down two East European hookers.</p> <p>Weinstein was at a launch party at VIP hangout Club 55 in Saint-Tropez &mdash; and afterwards handed Mickael a note with two phone numbers.</p> <p>He then barked: <em><strong>&ldquo;Find out where these girls live.&rdquo; </strong></em>Mickael went on: &ldquo;The arrangement had already been made and Harvey only wanted the address. That was so he could pick them up and enter the hotel with the girls as his guests.</p> <p><em>&ldquo;Trouble is they were not there. They had misunderstood and caught a taxi to the hotel where staff wouldn&rsquo;t let them in.&quot;</em></p> <p>Mickael said furious&nbsp; Weinstein then&nbsp; hit him while he was driving and crushed his &euro;1800 shades in his fist.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>&ldquo;The Mafia will find you and put you in the boot, you will disappear and no one will know what&rsquo;s happened to you. </strong></p> <p>&nbsp;</p> <p>&ldquo;He then dragged his index finger across his throat as if to indicate I would be guillotined.&quot;</p> </blockquote> <p>Even more absurd,<a href="https://www.thesun.co.uk/news/4738211/harvey-weinsteins-driver-sex-claims/"> the Sun </a>on Sunday said it had seen the complaint Mickael filed to Cannes police about the incident, which left him with a broken finger, bruised ribs and facial injuries from Weinstein&rsquo;s assault.</p> <p>Talk about a horrible boss.</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="606" height="349" alt="" src="http://www.zerohedge.com/sites/default/files/images/user245717/imageroot/2017.10.23driver.JPG?1508688703" /> </div> </div> </div> http://www.zerohedge.com/news/2017-10-22/they-called-him-pig-driver-speaks-out-about-harvey-weinsteins-disgraceful-behavior#comments Cannes police English-language films Films France Harvey Weinstein Hoodwinked! Weinstein Weinstein Sun, 22 Oct 2017 20:45:00 +0000 Tyler Durden 605765 at http://www.zerohedge.com Turkish Lira Tumbles As Erdogan Re-Escalates US Tensions http://www.zerohedge.com/news/2017-10-22/turkish-lira-tumbles-erdogan-re-escalates-us-tensions <p>In early trading, the Turkish Lira is slumping (having tagged pre-US-Visa highs) as President Tayyip<strong> Erdogan showed no retreat from a diplomatic row with the United States</strong>, castigating Washington for what he called an "undemocratic" indictment against his security detail.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/22/20171022_try1.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/22/20171022_try1.jpg" width="600" height="374" /></a></p> <p><a href="https://ca.news.yahoo.com/ramping-rhetoric-turkeys-erdogan-chastises-u-over-democracy-162322216.html"><em>As Reuters reports,</em></a> his comments may further dash hopes of a quick resolution to an on-going diplomatic crisis between the NATO allies. Both Ankara and Washington have cut back issuing visas to each other's citizens as ties have worsened.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em><strong>"They say the United States is the cradle of democracy. This can't be true. This can't be democracy," </strong></em>Erdogan said in a speech in Istanbul.</p> <p>&nbsp;</p> <p><em><strong>"If arrest warrants are issued against my bodyguards in absentia ... in the United States, where I went upon invitation, excuse me but I will not say this is a civilized country."</strong></em></p> </blockquote> <p>And the reaction (in admittedly thin markets) is clear...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/22/20171022_try_1.gif"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/22/20171022_try_1_0.gif" width="600" height="318" /></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="950" height="503" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20171022_try.jpg?1508703863" /> </div> </div> </div> http://www.zerohedge.com/news/2017-10-22/turkish-lira-tumbles-erdogan-re-escalates-us-tensions#comments Authoritarianism North Atlantic Treaty Organization Politics Politics of Turkey Recep Tayyip Erdo?an Reuters Turkey Turkish people Sun, 22 Oct 2017 20:27:05 +0000 Tyler Durden 605779 at http://www.zerohedge.com Low Interest Rates Subsidize Wealthy Households http://www.zerohedge.com/news/2017-10-22/low-interest-rates-subsidize-wealthy-households <p><a href="https://mises.org/blog/low-interest-rates-subsidize-wealthy-households"><em>Authored by Hal Snarr via The Mises Institute,</em></a></p> <div class="body-content body-content embedded-media clearfix"> <p>When the economy begins to sink into recession, politicians, mainstream economists, policy wonks, and the Federal Reserve begin<strong> beating the economic stimulus drum.</strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/22/20171022_fed3.gif"><strong><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/22/20171022_fed3.gif" style="width: 500px; height: 302px;" /></strong></a></p> <p><strong>Politicians, however, disagree over the type of stimulus to implement. </strong>The center-left party proposes greater expenditures on public assistance programs. The center-right party supports permanent tax rate reductions. The center-left party opposes tax cuts because they say it benefits the rich. The center-right party opposes raising government expenditures because it increases government debt. This discord generally results in a temporary compromise where government expenditures are boosted <em>and</em> tax rates are cut. <strong>This compromise is called &ldquo;discretionary fiscal stimulus.&rdquo;</strong></p> <p>While the debate over discretionary fiscal stimulus has to overcome Senate filibusters and heated House debates,<strong> the central bankers at the Fed quickly implement monetary stimulus.</strong> Boosting aggregate demand is the intended purpose of it and discretionary fiscal stimulus. In mainstream economic theory, greater aggregate demand lowers unemployment and raises GDP. <em><strong>In spite of grave warnings from&nbsp;<a href="https://mises.org/library/why-mainstream-fails-understand-recessions">Austrian-school economists</a>, the Fed pursues these goals by lowering interest rates via an expansion credit.</strong></em></p> <p><strong>Although the political parties disagree over the type of fiscal stimulus to implement, both support the Fed&rsquo;s monetary stimulus.</strong> Perhaps they do so because lower interest rates lower the cost of the budget deficits their discretionary fiscal stimulus produces. The lower interest rates also reduce the interest Americans pay on their debts.</p> <p><strong>The total of this debt is unevenly distributed across the richest 1 percent, the next 9 percent, and the bottom 90 percent of Americans</strong> (as ranked by wealth), according to the following table.</p> <div class="ds-1col file file-image file-image-png view-mode-wide_player clearfix"> <div class="img img-responsive"><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/22/20171022_fed1.gif"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/22/20171022_fed1.gif" style="width: 499px; height: 157px;" /></a></div> </div> <p>Total household debt averaged $11.295 trillion dollars over the four quarters in 2013, according to the Federal Reserve Bank of New York. <em><strong>Multiplying this value by the percentages in the above table indicates that the richest 1 percent, the next 9 percent, and the bottom 90 percent have aggregate debts of $610 billion, $2.383 trillion, and $8.302 trillion, respectively.</strong></em> These values are listed in the Total Debt column below.</p> <div class="ds-1col file file-image file-image-png view-mode-wide_player clearfix"> <div class="img img-responsive"><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/22/20171022_fed2.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/22/20171022_fed2.png" style="width: 498px; height: 63px;" /></a></div> </div> <p>The table above summarizes a thought experiment that measures the reduction in annual interest paid by each group at two different interest rates, 5% and 1%. The richest 1 percent, the next 9 percent, and the bottom 10 percent pay $30 billion, $119 billion, and $415 billion in annual interest payments, respectively, at a 5% rate of interest. At 1% interest, the corresponding annual interest payments decline to $6 billion, $24 billion, and $83 billion.</p> <p>The last column reports the decline in total interest paid by each group that results from the interest rate declining from 5% to 1%. <strong>The bottom 90 percent, as a group, receive the lion&rsquo;s share of the savings.</strong> After the interest rate is lowered, the group&rsquo;s aggregate annual interest payment declines by $332 billion. The savings to the richest 1 percent is only $24 billion.</p> <p><em><strong>The above results suggest that the bottom 90 percent benefit mightily from a decline in interest rates. However, this is misleading because there are 98.9% more people in the bottom 90 percent than there are in the top 1 percent.</strong></em></p> <p>According to the&nbsp;<a href="https://www.census.gov/quickfacts/fact/table/US#viewtop" target="_blank">U.S. Census</a>, <strong>there were 117 million households in the US between 2011 and 2015.</strong> This means there were about 1.17 million households in the richest 1 percent, 10.5 million in the next 9 percent, and 105.3 million in the bottom 90 percent. Dividing the values in the above table&rsquo;s final column by the number of households in each group gives the reduction in annual interest payments for each household in each group, assuming the households in each group are equally wealthy.</p> <p><u><strong>The per household annual windfalls for each group are $20,852 for the richest 1 percent and just $3,154 for the bottom 90 percent.</strong></u></p> <p><strong>Investment compounding makes the disparate benefits from the decline in interest rates even more disparate. </strong>For most households in the bottom 90 percent that <a href="https://www.cnbc.com/2017/08/24/most-americans-live-paycheck-to-paycheck.html" target="_blank">live paycheck to paycheck</a>, their $3,154 windfalls are likely being used to repair their cars, cloth and feed their kids, or purchase consumer goods. Members of the top 1 percent who reinvest their $20,852 windfalls can grow this stream of payments to just over a quarter of a million dollars in 10 years at an annual rate of just 4%.</p> <p>The above thought experiment illustrates that central bank interest rate cuts are essentially tax cuts for the rich.<strong> To be consistent, those who oppose tax cuts for the rich should also stand against monetary policy that disproportionately benefits the richest households as well.</strong></p> </div> <p>&nbsp;</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="290" height="175" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20171022_fed3.gif?1508696317" /> </div> </div> </div> http://www.zerohedge.com/news/2017-10-22/low-interest-rates-subsidize-wealthy-households#comments Bank of New York Business Debt Economy Federal Reserve Federal Reserve Bank Federal Reserve Bank of New York Federal Reserve Bank of New York Finance Household debt Mises Institute Mises Institute Monetary Policy Political debates about the United States federal budget Presidency of Barack Obama Recession Senate Unemployment United States United States fiscal cliff US Federal Reserve Sun, 22 Oct 2017 20:15:00 +0000 Tyler Durden 605773 at http://www.zerohedge.com 93-Year-Old President Carter: Russians Didn't Alter Election, Obama Didn't Deliver, We Didn't Vote For Hillary http://www.zerohedge.com/news/2017-10-22/93-year-old-president-carter-russians-didnt-alter-election-obama-didnt-deliver-we-di <p>Spot the odd one out...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/20/20171022_od.gif"><img height="329" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/20/20171022_od_0.gif" width="600" /></a></p> <p>One of these six people says that Russians did not alter the election outcome, or vote for Hillary.</p> <p>In a<a href="https://www.nytimes.com/2017/10/21/opinion/sunday/jimmy-carter-lusts-trump-posting.html"> lengthy interview with The New York Times recently</a>, 93-year-old former President Jimmy Carter cut loose on some painful establishment &#39;facts&#39;.</p> <p><strong><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/20/20171022_od1.gif"><img height="367" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/20/20171022_od1_0.gif" width="600" /></a></strong></p> <p><a href="http://www.dailywire.com/news/22585/jimmy-carter-unleashed-russians-didnt-alter-joseph-curl">As DailyWire.com&#39;s Joseph Curl reports, </a>The Times decided to play up the fact that Carter would love to go over to North Korea as an envoy. But the Times is steadily proving how out of touch it is -- and how it no longer seems to actually &quot;get&quot; what real news is.</p> <p>Here are some major highlights from the interview:</p> <p><u><strong>1. The Russians didn&#39;t steal the 2016 election.</strong></u></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Carter was asked &quot;Did the Russians purloin the election from Hillary?&quot;</p> <p>&nbsp;</p> <p><em><strong>&quot;I don&rsquo;t think there&rsquo;s any evidence that what the Russians did changed enough votes &mdash; or any votes,&quot; </strong></em>Carter said.</p> <p>&nbsp;</p> <p>So the hard-left former president doesn&#39;t think the Russians stole the election? Take note, Capitol Hill Democrats.</p> </blockquote> <p><u><strong>2. We didn&#39;t vote for Hillary.</strong></u></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Carter and his wife, Roselyn, disagreed on the Russia question. In the interview, she &quot;looked over archly [and said] &#39;They obviously did&#39;&quot; purloin the election.</p> <p>&nbsp;</p> <p>&ldquo;Rosie and I have a difference of opinion on that,&rdquo; Carter said.</p> <p>&nbsp;</p> <p>Rosalynn then said, &ldquo;The drip-drip-drip about Hillary.&rdquo;</p> <p>&nbsp;</p> <p>Which prompted Carter to note that during the primary, they didn&#39;t vote for Hillary Clinton.<em><strong> &quot;We voted for Sanders.&rdquo;</strong></em></p> </blockquote> <p><u><strong>3. Obama fell far short of his promises.</strong></u></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Barack Obama whooshed into office on pledges of delivering &quot;hope and change&quot; to the country, spilt by partisan politics.</p> <p>&nbsp;</p> <p>He didn&#39;t. In fact, <em><strong>he made it worse.</strong></em></p> <p>&nbsp;</p> <p><em><strong>&quot;He made some very wonderful statements, in my opinion, when he first got in office, and then he reneged on that,&quot;</strong> </em>he said about Obama&#39;s action on the Middle East.</p> </blockquote> <p><u><strong>4. Media &quot;harder on Trump than any president.&quot;</strong></u></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>A recent Harvard study showed that 93% of new coverage about President Trump is negative.</p> <p>&nbsp;</p> <p>But here&#39;s another shocker: Carter defended Trump.</p> <p>&nbsp;</p> <p><em><strong>&quot;I think the media have been harder on Trump than any other president certainly that I&#39;ve known about,&quot;</strong></em> Carter said.<strong><em> &quot;I think they feel free to claim that Trump is mentally deranged and everything else without hesitation.&quot;</em></strong></p> </blockquote> <p><strong>5. NFL players should &quot;stand during the American anthem.&quot;</strong></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Carter, who joined the other four living ex-presidents on Saturday for a hurricane fundraiser, put his hand on his heart when the national anthem played &mdash; and he has a strong opinion about what NFL players should do, too.</p> <p>&nbsp;</p> <p><em><strong>&quot;I think they ought to find a different way to object, to demonstrate,&quot; he said. &quot; I would rather see all the players stand during the American anthem.&quot;</strong></em></p> </blockquote> <p>Not exactly the narrative The Times was painting.</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="1319" height="723" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20171022_od.gif?1508693422" /> </div> </div> </div> http://www.zerohedge.com/news/2017-10-22/93-year-old-president-carter-russians-didnt-alter-election-obama-didnt-deliver-we-di#comments Barack Obama Harvard Hillary Clinton Iran hostage crisis Jimmy Carter Middle East Middle East National Football League Nationality New York Times North Korea Phi Kappa Phi Politics Submariners United States Sun, 22 Oct 2017 20:15:00 +0000 Tyler Durden 605771 at http://www.zerohedge.com Here Is The IMF's Global Financial Crash Scenario http://www.zerohedge.com/news/2017-10-22/here-imfs-global-financial-crash-scenario <p>Hidden almost all the way in the end of the first chapter of the IMF's <a href="https://www.imf.org/en/Publications/GFSR/Issues/2017/09/27/global-financial-stability-report-october-2017">latest Financial Stability Report</a>, is a surprisingly candid discussion on the topic of whether "Rising Medium-Term Vulnerabilities Could Derail the Global Recovery", which is a politically correct way of saying is the financial system on the verge of crashing. </p> <p>In the section also called "<strong>Global Financial Dislocation Scenario</strong>" because "<em><strong>crash" </strong></em>sounds just a little too pedestrian, the IMF uses a DSGE model to project the current global financial sitution, and ominously admits that "<strong>concerns about a continuing buildup in debt loads and overstretched asset valuations could have global economic repercussions" </strong>and - in modeling out the next <span style="text-decoration: line-through;">crash</span>, pardon "dislocation" - the IMF conducts a "scenario analysis" to illustrate how a repricing of risks could "lead to a rise in credit spreads and a fall in capital market and housing prices, derailing the economic recovery and undermining financial stability." </p> <p>* * * </p> <p><em>From the <a href="https://www.imf.org/en/Publications/GFSR/Issues/2017/09/27/global-financial-stability-report-october-2017#Chapter One">IMF's Financial Statbility Report</a>: </em></p> <p><em>"<strong>Could Rising Medium-Term Vulnerabilities Derail the Global Recovery</strong>?"</em></p> <p>This section illustrates how shocks to individual credit and financial markets well within historical norms can propagate and lead to larger global impacts because of knock-on effects, a dearth of policy buffers, and extreme starting points in debt levels and asset valuations. <strong>A sudden uncoiling of compressed risk premiums, declines in asset prices, and rises in volatility would lead to a global financial downturn. </strong>With monetary policy in several advanced economies at or close to the effective lower bound, the economic consequences would be magnified by the limited scope for monetary stimulus. <strong>Indeed, monetary policy normalization would be stalled in its tracks and reversed in some cases.</strong></p> <p>The Global Macrofinancial Model documented in Vitek 2017 is used to assess the consequences of a <strong>continued buildup in debt and an extended rise in risky asset prices, from already elevated levels in some cases</strong>. This dynamic stochastic general equilibrium model covers 40 economies and features extensive macro-financial linkages—with both bank- and capital-market-based financial intermediation—as well as diverse spillover channels.</p> <p>This scenario has two phases. The first phase features a continuation of low volatility and compressed spreads. Equity and housing prices continue to climb in overheated markets. As collateral values rise, bank lending conditions adjust to maintain steady loan-to-value ratios, facilitating favorable bank lending rates and more credit growth. As discussed, leverage in the nonfinancial private sector has already increased over the past decade across major advanced and emerging market economies. In the scenario, a further loosening in lending conditions, combined with low default rates and low volatility, leads investors to drift beyond their traditional risk limits as the search for yield intensifies despite increases in policy rates.</p> <p>As presented earlier, market and credit risk premiums are close to decade-low levels—leaving markets exposed to a decompression of risk premiums. Thus, the second phase begins with a rapid decompression of credit spreads and declines of up to 15 and 9 percent in equity and house prices, respectively, starting at the beginning of 2020. This shift reflects debt levels breaching critical thresholds, prompting markets to grow concerned about debt sustainability, while risk premiums jump, aggravating deleveraging pressures. </p> <p>As risk premiums rise, debt servicing pressures are revealed as high debt-to-income ratios make borrowers more vulnerable to shocks. The asset repricing is moderate in magnitude, but is broad-based across jurisdictions and leads to a tightening of financial conditions. Flight to quality flows reduce long-term bond yields in safe havens and raise them in the rest of the world. Segments with higher leverage and extended valuations are hit particularly hard, leading to higher funding costs and debt servicing strains.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/10/21/IMF%20crash%201.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/10/21/IMF%20crash%201_0.jpg" width="600" height="651" /></a></p> <p>Underlying vulnerabilities are exposed, and the global recovery is interrupted. Figure 1.30 summarizes the main impacts and spillovers:</p> <ul> <li><strong>The global economic impact of this scenario is broad-based and significant, about one-third as severe as the global financial crisis</strong>. The level of global output falls by 1.7 percent by 2022 relative to the WEO baseline, with varying cross-country impacts.</li> <li>The severity of the economic impact on the United States is cushioned by stronger bank buffers, milder house price declines, and more monetary policy space compared with other advanced economies, despite relatively high equity valuations. The Federal Reserve reverses interest rate hikes during the second phase of the scenario, cutting the policy rate by 150 basis points to 1.75 percent by 2022.</li> <li>The euro area suffers a larger output loss because the policy rate is at the effective lower bound and—as a result of renewed financial fragmentation—term premiums rise in high-spread euro area economies. Government debt ratios climb because nominal output is lower and debt service costs are higher for these economies.</li> <li>Emerging market economies are disproportionately affected by the correction in global risk assets. The flight to quality prompts outflows from their equity and bond markets, putting pressure on currencies and challenging countries with large external financing needs.</li> <li>Corporate and household defaults rise on the back of higher interest costs, lower earnings, and weaker growth. Default rates do not breach global financial crisis levels but return to levels consistent with prior cyclical peaks. Firms in some euro area countries and China with excessive debt overhangs are more sensitive to the increase in credit costs. Household leverage and high house prices in Australia and Canada make these economies more&nbsp; susceptible to risk premium shocks.</li> <li>Higher credit and trading losses, in turn, reduce bank capital ratios to varying degrees worldwide. Banking systems in advanced economies are healthier compared with the precrisis period, while leverage is less of a potential amplifier. Chinese banks suffer outsize declines in capital, but strong policy buffers could be used to mitigate the financial and economic impacts.</li> </ul> <p><strong>Emerging Markets Would Suffer a Retrenchment in Foreign Capital Inflows</strong></p> <p>Drawing on the above scenario, the potential for emerging market stress due to pressures on portfolio inflows is examined in more detail, including by taking into account the likely reduction in these flows from Federal Reserve balance sheet normalization (as discussed earlier).</p> <ul> <li>During the first phase of the scenario, portfolio flows to emerging market economies are supported by rising investor risk appetite. This partially offsets the drag on portfolio inflows from US monetary policy normalization observed during 2017–19. As a result, there is a (net) reduction in portfolio inflows to emerging market economies of about $25 billion a year, compared with $35 billion under the baseline (Figure 1.31, panel 1).</li> <li>During the second phase of the scenario, the asset market correction triggers a more rapid retrenchment in capital inflows to emerging market economies of about $65 billion over the first four quarters, in addition to the projected reduction of $35 billion in inflows associated with continued Federal Reserve balance sheet normalization. The combined effect results in a reduction of portfolio inflows of some $100 billion during the first four quarters of the correction (and about $65 billion during the subsequent four quarters).</li> <li>At the country level, the associated portfolio inflow reduction during the first two years of the shock to global risk premiums ranges from 1.6 to 2.3 percent of GDP for the most affected countries (Figure 1.31, panel 2). Such a reduction is likely to lead to an outright reversal of portfolio flows, at least during some quarters, considering that the decompression of risk premiums is likely to be more rapid in some periods than in others (rather than unfolding at a steady pace as depicted in this exercise). </li> </ul> <p>The buildup in external financing pressures could be particularly challenging for countries with large and rising projected current account deficits. For example, Colombia, South Africa, and Turkey have projected current account deficits in the range of 3 to 4½ percent of GDP in 2019 (Figure 1.31, panel 3). Moreover, <strong>emerging market currencies would come under pressure, limiting space for monetary policy to ease. In turn, higher domestic interest rates would affect firms’ debt servicing capacity, hitting those with still high levels of corporate leverage and increasing risks to weaker banking systems</strong>.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/10/21/imf%20crash%202.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/10/21/imf%20crash%202_0_0.jpg" width="600" height="555" /></a></p> <p>Emerging Market Policies In emerging market economies, policymakers should take advantage of current favorable external conditions to further enhance their resilience, including by continuing to strengthen external positions where needed and reduce corporate leverage where it is high. Deploying policy buffers and exchange rate flexibility would help buffer external shocks, while improving corporate debt-restructuring mechanisms and monitoring firms’ foreign exchange exposures would lower corporate vulnerabilities. Advances in these areas would leave these economies better placed to cushion any reduction in capital inflows that may occur from monetary policy normalization in advanced economies.</p> <p>However, capital outflow pressures could become more significant if there is a severe retrenchment in global risk appetite, as in the scenario described earlier. Such pressures should usually be handled primarily with macroeconomic, structural, and financial policies, although the appropriate response will differ across countries depending on available policy space (see IMF 2012, 2015, 2016a). Where appropriate, exchange rate flexibility should be a key shock absorber, but in countries with sufficient international reserves, foreign exchange intervention can be useful to prevent disorderly market conditions. In periods of stress, liquidity provision may also be needed to support the orderly functioning of financial markets. Capital flow management measures should be implemented only in crisis situations, or when a crisis is considered imminent, and should not substitute for any&nbsp; needed macroeconomic adjustment. When circumstances warrant the use of such measures on outflows, they should be transparent, temporary, and nondiscriminatory and should be lifted once crisis conditions abate.</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="551" height="311" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/IMF%20crash%20scenario%201.jpg?1508701388" /> </div> </div> </div> http://www.zerohedge.com/news/2017-10-22/here-imfs-global-financial-crash-scenario#comments Australia Bond Business Business cycle China Corporate Leverage default Deleveraging Economic bubbles Economic crises Economy Emerging markets Federal Reserve Finance Financial crisis of 2007–2008 Global financial system Great Recession Housing Prices International Monetary Fund Market Conditions Monetary Policy Money recovery Risk Premium Systemic risk Turkey US Federal Reserve Volatility Sun, 22 Oct 2017 19:43:50 +0000 Tyler Durden 605777 at http://www.zerohedge.com One River CIO "We’re Willing Participants In Our Own Demise" http://www.zerohedge.com/news/2017-10-22/one-river-cio-we%E2%80%99re-willing-participants-our-own-demise <p>With the world's focus falling on Beijing this week, where president Xi Jinping give a glowing account of China's future during the 19th Party Congress, boasting that “the banner of scientific socialism with Chinese characteristics is now flying high and proud for all to see," not all are impressed by China's vision of the world in which China sees itself as increasingly taking over from the US as the world's superpower. And it's not just stories about China's neverending behind the scenes bailouts of anything that may telegraph a hard landing for the economy (as decribed in "<a href="http://www.zerohedge.com/news/2017-10-21/unprecedented-housing-bailout-revealed-china-property-sales-drop-first-time-30-month">China's Government Is Expected To Buy 24% Of All Residential Real Estate For Sale In 2017</a>"); it's the country's entire financial system, which Kyle Bass has been shorting for nearly two years now but which he has failed to recognize now holds the entire world hostage: if it goes, so does the global financial system, unleashing a worldwide depression the likes of which have not been seen. </p> <p>Here is Eric Peters, CIO of One River Asset Mgmt, explaining why everyone is wrong about the $35 trillion Chinese financial system, and yet how Beijing has figured out a way to become a parasite on the global financial system, resulting in an outcome in which "<strong>we’re willing participants in our own demise.</strong>"</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/10/21/china%20debt%20img.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/10/21/china%20debt%20img_0.jpg" width="600" height="226" /></a></p> <p><em>Excerpted from One River's latest Weekend Notes:</em></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>“China’s financial system is a hermetically sealed snow globe,” he said. “They’ve built a system to resemble ours on the surface, but scratch it and you discover something altogether foreign.” </p> <p>&nbsp;</p> <p>China has banks. They lend money. <strong>But pierce the patina and you find a vast subsidy machine, with no cold-blooded allocation of capital. There are no defaults to speak of; just bailouts, no reckonings. </strong></p> <p>&nbsp;</p> <p><strong>“The appearance of a modern financial system allows western financiers to pretend one exists. We are willing dupes in this charade.” </strong></p> <p>&nbsp;</p> <p>Throughout history failing nations have turned to printing presses to arrest their decline. It has led to ruin. Always.&nbsp; <strong>&nbsp;</strong></p> <p>&nbsp;</p> <p><strong>But never has an emerging superpower used the printing press to turbo charge growth, dominate industries. </strong>The Chinese have reimagined the vast power of fiat. And they’re wielding it to build a 21st century nation atop the history’s greatest credit boom. </p> <p>&nbsp;</p> <p>The fate of this debt is uncertain, but the extraordinary infrastructure is not. </p> <p>&nbsp;</p> <p><strong>“Ask any portfolio manager if they invest their personal wealth in Chinese debt? Not one will answer ‘Yes.’ </strong>But before long, we’ll all own Beijing’s bonds in our 401k.” </p> <p>&nbsp;</p> <p>The Chinese understand the agency problem in western asset management. <strong>We invest other people’s money, not our own. </strong>So they’re muscling their way into global indexes. Where passive flows will race to hit Chinese benchmarks, without anyone making a decision at all. </p> <p>&nbsp;</p> <p><span style="text-decoration: underline;"><strong>We’re willing participants in our own demise.</strong></span><strong> </strong></p> <p>&nbsp;</p> <p>First, they exploited the west’s corporate fixation on short term profits, granting market access in exchange for local design/production, usurping our intellectual property. Next, they’ll exploit our financial system deficiencies to fund their unprecedented credit excess. </p> <p>&nbsp;</p> <p>“We continue to think of banking and finance though our own narrow lens. But the Chinese see an entirely different system. <strong>And they know that Rome was not built by bankers. It was built by force.” </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="625" height="341" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/china%20xi_0.jpg?1508698663" /> </div> </div> </div> http://www.zerohedge.com/news/2017-10-22/one-river-cio-we%E2%80%99re-willing-participants-our-own-demise#comments Bailout Business China China Chinese financial system Congress Economic bubble Economy Finance Financial crises Futurology Kyle Bass Kyle Bass Military terminology Money Potential superpowers Real estate Sun, 22 Oct 2017 19:01:29 +0000 Tyler Durden 605775 at http://www.zerohedge.com Publicly Examine Trump's Intelligence To Inform Our Nation http://www.zerohedge.com/news/2017-10-22/publicly-examine-trumps-intelligence-inform-our-nation <p>Hey, sign my PETITION!</p> <p>Der Trumpenfuhrer likes to make a big deal about being the superlativest at everything, including his intelligence.&nbsp; He claims it's very high and even <a href="https://www.washingtonpost.com/news/politics/wp/2017/10/10/a-brief-history-of-trump-challenging-people-to-iq-tests/?utm_term=.388f14420641">challenges people to compare IQ tests</a>.&nbsp; I think it's time the American people found how, just how intelligent is the Cheeto Messiah, really?&nbsp; To that end, I present this PETITION:</p> <p>Publicly Examine Trump's Intelligence To Inform Our Nation</p> <p><a href="https://petitions.whitehouse.gov/petition/publicly-examine-trumps-intelligence-inform-our-nation" title="https://petitions.whitehouse.gov/petition/publicly-examine-trumps-intelligence-inform-our-nation">https://petitions.whitehouse.gov/petition/publicly-examine-trumps-intell...</a></p> <p>I am Chumbawamba.</p> http://www.zerohedge.com/news/2017-10-22/publicly-examine-trumps-intelligence-inform-our-nation#comments Business Donald Trump Economy of the United States G factor Intelligence Intelligence quotient Psychology Psychometrics Sun, 22 Oct 2017 18:44:42 +0000 chumbawamba 605774 at http://www.zerohedge.com 7 Thoughts On Blockchain, Cryptocurrency, & Decentralization After Another Three Months Down The Rabbit Hole http://www.zerohedge.com/news/2017-10-22/7-thoughts-blockchain-cryptocurrency-decentralization-after-another-three-months-dow <p><em><a href="https://hackernoon.com/8-thoughts-on-blockchain-cryptocurrency-decentralization-after-another-three-months-down-the-448b916138b8">Authored by Lou Kerner via HackerNoon.com,</a></em></p> <p><strong>Everyone&rsquo;s ADD, including me. I get attracted by shiny objects. I first noticed Bitcoin as a shiny object in mid-2013. I went down the rabbit hole far enough for The Wall Street Journal to call me &ldquo;Wall Street&rsquo;s Bitcoin expert&rdquo; </strong>while they live blogged <a href="https://goo.gl/7v36ce" rel="noopener" target="_blank">a Bitcoin conference call I hosted</a>. I invested in <a href="https://goo.gl/GqmM5w" rel="noopener" target="_blank">ChangeTip</a>. I bought and sold <a href="https://goo.gl/KU95cp" rel="noopener" target="_blank">BitcoinWallet.com</a>. Unfortunately, by late-2014, nine months in to a severe Bitcoin price decline, my focus wandered to new shiny objects.</p> <p><strong>Fast forward to 2017, and my mind wandered to a new shiny object, ICOs.</strong> Once again, I got the four smartest people I could find on the topic, <a href="https://goo.gl/bJSviq" rel="noopener" target="_blank">and held a conference call</a> on June 29th during which I had my crypto epiphany.</p> <p><strong>Crypto is now so shiny, so luminous, I can&rsquo;t divert my eyes. I&rsquo;m living and breathing crypto 24/7.</strong> Reading every thoughtful post I can find. Meeting anyone thoughtful on the topic. Holding more <a href="https://goo.gl/xKp4X6" rel="noopener" target="_blank">crypto conference calls.</a> And writing and writing on crypto, because that&rsquo;s the best way to learn.</p> <p><strong>After 3 months going down the rabbit hole a second time, here&rsquo;s what I learned...</strong></p> <h2><u>1. I&rsquo;m A One Eyed Man In The Land of Other One Eyed People</u></h2> <p><strong>We&rsquo;re still so early, that much about what people are saying and writing about crypto is more theory than fact.</strong> Lots of people (including me) compare the <a href="https://goo.gl/oBTknh" rel="noopener" target="_blank">the crypto bubble to the Internet bubble</a>. But the parallels between the development of crypto and the development Internet are everywhere I look. Take this snippet from Wikipedia&rsquo;s &ldquo;<a href="https://en.wikipedia.org/wiki/History_of_the_Internet" rel="noopener" target="_blank">History of the Internet</a>&rsquo;&rsquo;:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;With so many different network methods, something was needed to unify them. <a href="https://en.wikipedia.org/wiki/Robert_E._Kahn" rel="noopener" target="_blank" title="Robert E. Kahn">Robert E. Kahn</a> of <a href="https://en.wikipedia.org/wiki/DARPA" rel="noopener" target="_blank" title="DARPA">DARPA</a> and <a href="https://en.wikipedia.org/wiki/ARPANET" rel="noopener" target="_blank" title="ARPANET">ARPANET</a> recruited <a href="https://en.wikipedia.org/wiki/Vinton_Cerf" rel="noopener" target="_blank" title="Vinton Cerf">Vinton Cerf</a> of Stanford to work with him on the problem. By 1973, they had worked out a fundamental reformulation, where the differences between network protocols were hidden by using a common <a href="https://en.wikipedia.org/wiki/Internetwork_protocol" rel="noopener" target="_blank" title="Internetwork protocol">internetwork protocol</a>&hellip;..&rdquo;</p> </blockquote> <p>As a non-techie, that sounds exactly like a paragraph I read yesterday on Medium. But an important difference about the evolution of crypto and the evolution of the internet is how public crypto&rsquo;s early evolution is. There were maybe a few thousand people who cared about what Cerf was doing in the early days of the Internet. So it was done out of the public&rsquo;s eye. It wasn&rsquo;t until 1994, 21 years after Cerf&rsquo;s 1973 solution, that Netscape introduced it&rsquo;s browser, and most people learned about the internet.</p> <p><strong>Crypto is evolving in its early days in a public way, so it&rsquo;s messy, and theoretical, and dense. So if you feel like you don&rsquo;t really understand crypto, join the crowd. Neither of us would have understood much if we sat in the room with Vint Cerf in 1973.</strong></p> <div> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/20/20171022_crytpo1.gif"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/20/20171022_crytpo1.gif" style="width: 560px; height: 249px;" /></a></p> </div> <p>&nbsp;</p> <p>Another sign that it&rsquo;s early is that foundational parts of crypto theory like <a href="http://www.usv.com/blog/fat-protocols" rel="noopener" target="_blank">Joel Manegro&rsquo;s Fat Protocol post</a> , which has been repeated ad infinitum, is being questioned and rethought by <a href="https://blog.zeppelin.solutions/thin-protocols-cc872258379f" rel="noopener" target="_blank">Teemu Paivinen</a>, <a href="https://twitter.com/jbrukh/status/916187748104589312" rel="noopener" target="_blank">Jake Brukhman</a> and others (h/t <a href="https://medium.com/@yanroux" target="_blank">Yannick Roux</a>).</p> <h2><u>2. Bitcoin Is A Confidence Game, Utility Tokens Are Awesome But Legally Challenging, Security Tokens Are Going To Be Huge</u></h2> <p>The chart below provides a simple way to think about the three types of cryptocurrencies.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/20/20171022_crytpo2.gif"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/20/20171022_crytpo2_0.gif" style="width: 500px; height: 193px;" /></a></p> <p>On the currency side, while Bitcoin is a crypto leader in payments, it&rsquo;s rise in it&rsquo;s value has little to do with the currency applications of Bitcoin, and all to do with it being a store of value. Therefore, Bitcoin is simply <a href="https://www.merriam-webster.com/dictionary/confidence%20game" rel="noopener" target="_blank">a confidence game </a>as are ALL store of values. As with other assets, the higher Bitcoin&rsquo;s value goes, the more confident investors become, which is another factor driving bubbles. After being used as a store of value for thousands of years, it&rsquo;s easier to believe in gold as a store of value (hence the rocks have a total market cap/are storing over $7 trillion in value vs. $75 billion for Bitcoin today). I believe Bitcoin will continue to gain share of value storage. I&rsquo;m a HODLer.</p> <p>Utility Tokens like <a href="https://goo.gl/y6oJmZ" rel="noopener" target="_blank">Civic</a> which provide a digital good in return for the token (in Civic&rsquo;s case they provide businesses and individuals the tools to control and protect identities) are an exciting new way to fuel ecosystems. However, in the <a href="https://saftproject.com/" rel="noopener" target="_blank">SAFT White Paper </a>published by Cooley and Protocol Labs last week, a whole section is titled &ldquo;Pre-functional Utility Token Sales Are More Likely to Pass the Howey Test&rdquo;, which is another way of saying the SEC is likely to deem them a security. Hence they propose the SAFT as an instrument to address this risk.</p> <p>The third type of token are Security Tokens, which are similar to shares, as they convey ownership interests. The cool thing about Security Tokens is that they&rsquo;re liquid (assuming there&rsquo;s someone who wants to buy them and security laws are addressed), and companies can access a global investor base when raising capital/doing an ICO. While most of the ICOs to date have been Utility Tokens, because of the massive advantages that Security Tokens have over traditional capital raising, I think the total market cap of all security tokens will be much larger than the total market cap of all utility tokens.</p> <h2><u>3. Blockchain Technology Is Going To Be A Disruptive Force Across Industries</u></h2> <p><a href="https://goo.gl/RaqCKX" rel="noopener" target="_blank">This post</a> in Blockchain Hub gives a great detailed overview of the three types of blockchains? - ?<strong>public blockchains (like Bitcoin and Ethereum), federated blockchains (like <a href="https://www.r3.com/" rel="noopener" target="_blank">R3</a> and <a href="http://energyweb.org/" rel="noopener" target="_blank">EWF</a>), and private blockchains (e.g. platforms like <a href="https://www.multichain.com/" rel="noopener" target="_blank">Multichain</a>).</strong></p> <p><a href="https://goo.gl/Q5CxaR" rel="noopener" target="_blank">This post </a>by <a href="https://medium.com/@CBinsights" target="_blank">CB Insights</a> highlights 30 industries that blockchain could transform, and the companies leading the disruption.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/20/20171022_crypto3.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/20/20171022_crypto3_0.jpg" style="width: 561px; height: 175px;" /></a></p> <p><a href="https://goo.gl/oyWBXp" rel="noopener" target="_blank">This TED Talk</a> is the best explanation of why Blockchain is going to change the world (spoiler alert&hellip; it&rsquo;s about trust).</p> <p><iframe allowfullscreen="" frameborder="0" height="315" src="https://www.youtube.com/embed/RplnSVTzvnU" width="560"></iframe></p> <h2><u>4. DECENTRALIZATION Is Potentially The Most Disruptive Force</u></h2> <p><strong>Blockchains, cryptocurrencies, together with other smart contracts are enabling Decentralization, which is the REALLY disruptive thing.&nbsp; </strong>The chart below is widely known in crypto. It&rsquo;s often disparaged as too simplistic to be meaningful, but I find it helpful.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/20/20171022_cyrpto5.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/20/20171022_cyrpto5_0.png" style="width: 560px; height: 360px;" /></a></p> <p><strong>Governments and businesses have largely functioned via centralization.</strong> Someone or some organization sits in the middle, making the rules, and taking a toll (either taxes or fees) for providing a function. We can now leverage technology, take out the middleman, and enable highly functional decentralized entities (like bitcoin).</p> <p>Take life insurance. I believe, in the future, through <a href="https://goo.gl/czZYyc" rel="noopener" target="_blank">smart contracts</a> and the blockchain, decentralized structures will provide life insurance, saving buyers of life insurance the $10&rsquo;s of billions of tolls (sales commissions, profits, &hellip;) that insurance companies takes for sitting in the middle.</p> <p>ICOs are funding a growing list of real-world decentralized companies. <a href="https://augur.net/" rel="noopener" target="_blank">Augur</a> is building a decentralized prediction market. <a href="https://goo.gl/FSLLQH" rel="noopener" target="_blank">PROPS</a> is a decentralized economy for digital video. <a href="https://www.openbazaar.org/" rel="noopener" target="_blank">OpenBazaar</a> is a decentralized peer-to-peer marketplace. <a href="https://aragon.one/" rel="noopener" target="_blank">Aragon</a> is a decentralized provider of tools to enable more efficient decentralized companies.</p> <p><strong>Decentralization is the lens through which I now look at everything. It&rsquo;s the most important thing I&rsquo;ve learned about over the last three months.</strong></p> <p>It seems to make sense that, all else being equal, <u><strong>the industries most at risk for disruption from decentralization are where the middlemen charge the highest tolls</strong></u>. Below is <a href="https://goo.gl/NJReRz" rel="noopener" target="_blank">a list from Forbes </a>of the 10 industries with the highest net margins in 2016:</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/20/20171022_cyrpto6.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/20/20171022_cyrpto6.png" style="width: 560px; height: 632px;" /></a></p> <p>Even though investment managers are getting disrupted by ETFs and robo -advisors, they&rsquo;re still churning out nice margins. Certainly my own industry (venture capital) is at risk:</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/20/20171022_cyrpto7.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/20/20171022_cyrpto7.png" style="width: 560px; height: 337px;" /></a></p> <p><strong>But I don&rsquo;t think VCs aren&rsquo;t going away anytime soon, particularly VCs that focus on crypto and invest in ICOs.</strong> In addition, ICO investors see name VCs as a positive signal (e.g. Filecoin). So VCs may be diminished, but the good ones will adapt and innovate.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/20/20171022_crytpo4.gif"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/20/20171022_crytpo4_0.gif" style="width: 560px; height: 178px;" /></a></p> <p>To learn more about decentralization, read Vitalik&rsquo;s <a href="https://medium.com/@VitalikButerin/the-meaning-of-decentralization-a0c92b76a274" target="_blank">&ldquo;The Meaning of Decentralization&rdquo;</a> which goes in to the the three different dimensions of decentralization:</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/20/20171022_cyrpto8.png"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/10/20/20171022_cyrpto8_0.png" style="width: 560px; height: 257px;" /></a></p> <h2><u>5. It&rsquo;s A Bubble&hellip;.So What</u></h2> <p>The biggest sign that it&rsquo;s not a bubble, is that almost everyone says it&rsquo;s a bubble. By way of background, I&rsquo;m a VC and former Wall Street equity analyst, and I think it&rsquo;s a bubble because I see ICOs trading at 50X-100X+ what I think they would be valued at if they were funded by VCs or traded publicly. And history says it&rsquo;s not different this time. <a href="https://goo.gl/1FDa38" rel="noopener" target="_blank">Here&rsquo;s a great book</a> on the last 800 years of people saying &ldquo;it&rsquo;s different&rdquo; this time to justify lofty valuations.</p> <p>I say &ldquo;so what&rdquo; because I believe in <a href="https://goo.gl/76rSFZ" rel="noopener" target="_blank">Amara&rsquo;s Law</a>:<em><strong> We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run. </strong></em>This is part of the reason we get bubbles. We get overexcited about a new technology and we drive up prices beyond any reasonable valuation. Bubble&rsquo;s go on for years. The internet bubble lasted 5+ years.</p> <p>But the more important part of Amara&rsquo;s law is that <strong>we underestimate the effect of a technology in the long run. </strong>The internet is more impactful, and a greater wealth creator than anyone imagined. The internet brought us $3 trillion of wealth just in <a href="https://goo.gl/nZ9qKC" rel="noopener" target="_blank">FAMGA</a>. What&rsquo;s the value to be created from crypto, blockchain, and decentralization? Today, the cryptocurrency market cap is around $150 billion. Could that figure go down 78% like the NASDAQ did in the 30 months after it peaked on March 10th, 2000? Sure. And that would be painful. But I&rsquo;m playing the long game. It was a good strategy with the internet, and it should be a good strategy today with crypto.</p> <h2><u>6. Governance Is The Biggest Risk To Bitcoin</u></h2> <p><strong>Regulatory risk is obviously significant on a country-by-country basis, or within the U.S. on a state-by-state basis re all cryptocurrency.</strong> We&rsquo;ve seen what happened in China. Korea and other countries are also clamping down. In the U.S. the <a href="https://goo.gl/LHsVPT" rel="noopener" target="_blank">SEC DAO Report</a> was a big step forward for ICOs given the incredible amount of detail and guidance the SEC gave in the report, without it being an enforcement action. Crypto&rsquo;s next on <a href="https://goo.gl/RE6CeU" rel="noopener" target="_blank">the SEC agenda on October 12th.</a> But at the end of the day, governments are going to do what&rsquo;s in their best interests.</p> <p>While there is significant regulatory risk, I believe governance is the greatest risk to Bitcoin and other decentralized entities. Bitcoin is essentially governed by exit (h/t <a href="https://medium.com/@AriDavidPaul" target="_blank">Ari Paul</a>). While there&rsquo;s a consensus mechanism, if people don&rsquo;t like the consensus, they have three choices. They can 1)suck it up, 2) they can sell their bitcoins and leave, or 3) they can take the open source code and fork it. Forking comes with both technical risk and community risk.<strong> The Segwit2X debate, which could result in a hard fork November 18, is just the latest example of Bitcoin&rsquo;s risk from governance by exit. The Balkanization of Bitcoin won&rsquo;t be a good thing for the community.</strong></p> <h2><u>7. Don&rsquo;t Hate The Haters. Love The <a href="https://goo.gl/A8S1Wf" rel="noopener" target="_blank">HODL&rsquo;ers</a></u></h2> <p>After Jamie Dimon said &ldquo;<a href="https://goo.gl/ZpQ64M" rel="noopener" target="_blank">Bitcoin is a fraud</a>&rdquo;, my Twitter stream was filled with Dimon haters. I read what he said, which brought nothing new to the conversation other than his opinion, and moved on. Maybe Dimon doesn&rsquo;t even believe what he&rsquo;s saying. Maybe he&rsquo;s just <a href="https://goo.gl/MDU4ho" rel="noopener" target="_blank">talking up his own book</a>.<strong><em> I don&rsquo;t know, I don&rsquo;t care, and I won&rsquo;t spend time defending the industry from haters or dissecting the reasons the haters hate (unless they&rsquo;re bringing something new to the conversation).</em></strong></p> <p>I want to spend my time preaching to the choir. I want to spend my time learning from, helping, and investing in the believers. As an industry, we have a lot of work ahead of us to achieve the massive world-changing potential of blockchain, cryptocurrency, and decentralization. I&rsquo;m getting to it.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="564" height="359" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20171022_crytpo5.gif?1508695939" /> </div> </div> </div> http://www.zerohedge.com/news/2017-10-22/7-thoughts-blockchain-cryptocurrency-decentralization-after-another-three-months-dow#comments Alternative currencies Bitcoin Bitcoin Blockchains China Cryptocurrencies DARPA Decentralization Digital currency digital video E-commerce Ethereum Finance Insurance Companies Jamie Dimon Money NASDAQ NASDAQ 100 network protocols peer-to-peer Smart contract Stanford Twitter Twitter U.S. Securities and Exchange Commission Wall Street Journal Æternity Sun, 22 Oct 2017 18:25:00 +0000 Tyler Durden 605772 at http://www.zerohedge.com California Attorney General Dodges Question About 'Calexit' Referendum http://www.zerohedge.com/news/2017-10-22/california-attorney-general-dodges-question-about-calexit-referendum <p>Two days after former White House chief strategist Stephen<strong> Bannon warned that California may attempt to secede from the US over the next decade if Republicans failed to reassume control of the state</strong>, the state&rsquo;s attorney general played down speculation that the state would make a credible attempt at leaving the US in the coming years.</p> <p>During an interview on &quot;Fox News Sunday,&quot; Becerra evaded a question about whether he would allow a &#39;Calexit&#39; referendum on the ballot even though it&#39;s unconstitutional, saying only that the state would do everything it can to be the &quot;leading force&quot; in this country, rather than becoming an independent state.</p> <p><strong>Becerra said there are people in California who are frustrated with the Trump administration &quot;constantly taking digs and hurting California&rdquo;</strong> - but despite these frustrations, California needs the US as much as the US needs California.</p> <p><iframe allowfullscreen="" frameborder="0" height="315" src="https://www.youtube.com/embed/Tz0rat20m88" width="560"></iframe></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>&quot;California is the economic engine of the United States of America, we on our own, as a state could be the sixth economic power in the world,&quot; he said.</strong></p> <p>&nbsp;</p> <p>&quot;We all get to express ourselves and there are people in california that are frustarted with the trump administration constantly taking digs but ill tell you this...the US needs California as much as California needs the US.&quot;</p> <p>&nbsp;</p> <p><strong>&quot;I think we can continue to be the leader in it,&quot;</strong> he said.</p> </blockquote> <p>Becerra&rsquo;s remarks come after California Gov. Jerry Brown earlier this month signed the sanctuary state bill, controversially ordering local law enforcement not to cooperate with federal immigration authorities - a law that has drawn threats of a federal crackdown. The state has also sued to continue federal cost sharing subsidies to insurance companies that were recently canceled by President Trump - one of many lawsuits against the Trump administration.</p> <p>Of course, while secession for California remains a distant possibility, groups supporting this cause have seen their membership multiply in the year that has passed since the election. SInce 2014, the number of Californians supporting &#39;Calexit&#39; has grown from 20% to more than a third.</p> <p><strong>After several pushes to get a &ldquo;Calexit&rdquo; referendum question on the ballot for 2018, a CalExit 3.0 group is petitioning Becerra to call for a Constitutional Convention of the States so they can, among other things, amend the U.S. Constitution to allow for a &quot;clear and reasonable path for individual States to become independent, so that CA can secede, if they so choose.&quot;</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="814" height="440" alt="" src="http://www.zerohedge.com/sites/default/files/images/user245717/imageroot/2017.10.22becerra.JPG?1508689623" /> </div> </div> </div> http://www.zerohedge.com/news/2017-10-22/california-attorney-general-dodges-question-about-calexit-referendum#comments Donald Trump Donald Trump presidential campaign Fox News Insurance Companies Partition and secession in California Politics Politics of the United States Presidency of Donald Trump Steve Bannon Trump Administration United States White House White House Yes California Sun, 22 Oct 2017 18:00:00 +0000 Tyler Durden 605767 at http://www.zerohedge.com