ECONOMY | WHAT REALLY HAPPENED


ECONOMY

Dec 14 20:09

Why Your 401k Is A Bad Investment

Dec 14 14:46

Bank Tank Part II Could Start Here

Dec 14 14:43

Revealed: NZ, other Five Eyes partners met before Huawei arrest

Spy bosses from countries in the Five Eyes network held a secret meeting in Nova Scotia in July to discuss concerns about security concerns about China and Huawei, according to an AFR report.

Telcos' pending upgrades to 5G mobile networks were apparently a topic of particular concern as the agency heads supped on lobster bisque.

In the months that followed that July 17 dinner, an unprecedented campaign has been waged by those present – Australia, the US, Canada, New Zealand and the UK – to block Chinese tech giant Huawei from supplying equipment for their next-generation wireless networks, the paper says.

"All of the Five Eyes partners are coming into line," analyst Paul Buchanan tells the Herald. Buchan says security agencies are right to be suspicious of Huawei. The company denies wrongdoing.

Dec 14 12:50

Debt Worldwide Hits Record $184 Trillion, or $86,000 Per Person

Global debt hit a record $184 trillion last year, equivalent to more than $86,000 per person — more than double the average per-capita income.

Dec 14 12:08

Wheels Come Off The Leveraged Loan Market: Banks Unable To Offload Loans Amid Record Outflows

To think it was less than three months ago that we wrote that "leveraged loan demand is off the charts as dangers mount." Since then, a lot has happened in the credit market, with yields and spreads blowing out in credit in a much delayed response to said mounting dangers and turmoil in the equity market, eventually hitting the leveraged loan market too, where as we wrote last week, loan prices have fallen precipitously as loan funds suffered dramatic redemptions in recent days, most notably the Blackstone leverage-loan ETF, SRLN, which last week saw its largest ever one-day outflow since its inception.

Dec 14 12:07

Collapsing Dollar Liquidity Sends Dire Signal For Stocks

With the ECB today confirming that its bond purchase program will end in less than three weeks, it is worth reminding readers that the world is now crossing that critical threshold where the consolidated global central bank balance sheet is shifting from a source of liquidity to a drain on the global (and fungible) monetary system. And as the chart below shows, every single time the total change in net central bank assets has dipped into the red, it lasted only briefly before some financial crisis typically ensued, forcing central banks to resume liquidity injections to maintain market stability.

Dec 14 12:05

Gold - A Perfect Storm For 2019

This article is an overview of the principal factors likely to drive the gold price in 2019. It looks at the global factors that have developed in 2018 for both gold and the dollar, how geopolitics are likely to evolve, the economic outlook and how it is worsened for the dollar by President Trump’s tariff war against China, the availability and likely demand for bullion, and the technical position in paper markets. Taken together, the outlook is bullish for gold.

Dec 14 11:37

These Two Analogies Will Help You Explain Bitcoin to Anyone

By Kai Sedgwick

Explaining Bitcoin to someone who knows nothing about Bitcoin isn’t easy. In fact it’s fiendishly tricky. Describing concepts such as blockchain, decentralized networks, and permissionless ledgers to beginners is as tough as describing the color orange to a blind person or the taste of an orange to someone who’s never peeled one. Two new Bitcoin analogies surfaced this week, however, that should make that task easier...

Dec 14 11:35

Experts: China Pushing ‘New International Order’ Through Communism in Africa

China is using its economic clout in Africa to promote a “new international order” and encourage countries to adopt its communist ideology, experts told lawmakers on Wednesday.

While testifying before the Senate Armed Services Subcommittee on Emerging Threats and Capabilities, Judd Devermont, the director of the Africa program at the Center for Strategic and International Studies (CSIS) think-tank, acknowledged that not all Chinese activities in Africa are anti-ethical to U.S. goals, noting that “some are neutral or complementary to U.S. objectives and may actually benefit American interests.”

Nevertheless, some of the witnesses noted that communist China is actively pursuing a new Beijing-led order on the continent.

Dec 14 11:32

The Inequality Gap on a Planet Growing More Extreme

As we head into 2019, leaving the chaos of this year behind, a major question remains unanswered when it comes to the state of Main Street, not just here but across the planet.

If the global economy really is booming, as many politicians claim, why are leaders and their parties around the world continuing to get booted out of office in such a sweeping fashion?

Dec 14 11:31

"Trillion-Dollar" Amazon Execs Blasted By New York City Officials: "This Is Bad" For All Of Us

"We have a crumbling subway system, record homelessness, public housing that is in crisis, overcrowded schools, sick people without health insurance and an escalating affordable crisis," raged New York City Council Speaker Corey Johnson, a Democrat, as council members grilled Amazon executives about the company's plan to build a secondary headquarters in New York during a contentious hearing Wednesday that was interrupted several times by jeering protesters.

"Is anyone asking if we should be giving nearly $3 billion in public money to the world's richest company, valued at $1 trillion?"

As Fox5NY reports, the council members, who have no vote on the project and no apparent path to block it, demanded to know why the city and New York state were offering Amazon up to $2.8 billion in tax breaks and grants to build the new headquarters in the Long Island City neighborhood of Queens.

Dec 14 11:31

How the New Silk Roads are merging into Greater Eurasia

The concept of Greater Eurasia has been discussed at the highest levels of Russian academia and policy-making for some time. This week the policy was presented at the Council of Ministers and looks set to be enshrined, without fanfare, as the main guideline of Russian foreign policy for the foreseeable future.

President Putin is unconditionally engaged to make it a success. Already at the St Petersburg International Economic Forum in 2016, Putin referred to an emerging “Eurasian partnership”.

Dec 14 11:30

Sam McElroy – Job Slow Down Ahead?

Dec 14 10:51

The Brewing European Debt Crisis

Dec 14 10:38

JP Morgan faces potential class action lawsuit after guilty pleas by a former metals trader

Traders from across the U.S. are banding together to accuse J. P. Morgan Chase of manipulating precious metals markets for years.

At least six lawsuits, all making similar allegations against the nation's largest bank, have been filed in New York federal court in the past month, since federal prosecutors in Connecticut unveiled a plea agreement with a former J. P. Morgan Chase metals trader.

The cases could potentially include thousands of people who traded in the precious metals market. The White Plains, N.Y., law firm Lowey Dannenberg is asking the court to combine the cases and name it as the lead.

The law firm's commodities group is led by Vincent Briganti, the attorney who filed the first lawsuit on behalf of Dominick Cognata, a New York resident who alleges he suffered losses due to J. P. Morgan's trading conduct in the silver and gold futures and options markets.

Dec 14 10:38

Verizon cuts 10,000 jobs and admits its Yahoo/AOL division is a failure

Verizon is parting ways with 10,400 employees in "a voluntary separation program," despite the Trump administration providing a tax cut and various deregulatory changes that were supposed to increase investment in jobs and broadband networks. The cuts represent nearly seven percent of Verizon's workforce and were announced along with a $4.6 billion charge related to struggles in Verizon's Yahoo/AOL business division.

Dec 14 10:25

RESOURCE WARS: TRUMP’S NEW AFRICA STRATEGY TAKES SHARP AIM AT CHINA, RUSSIA

THE TRUMP ADMINISTRATION ON THURSDAY ANNOUNCED A SHARP REFOCUS OF ITS AFRICA STRATEGY TO COUNTER WHAT IT CALLED THE “PREDATORY” PRACTICES OF CHINA AND RUSSIA, WHICH ARE “DELIBERATELY AND AGGRESSIVELY TARGETING THEIR INVESTMENTS IN THE REGION TO GAIN A COMPETITIVE ADVANTAGE.”

National security adviser John Bolton laid out the new strategy in remarks at the Heritage Foundation, saying the U.S. will now choose its African partners more carefully. He took special aim at China, accusing it of wielding “bribes, opaque agreements, and the strategic use of debt to hold states in Africa captive to Beijing’s wishes and demands.”

Webmaster's Commentary: 

When Karl Marx made the observation that "all wars are economic in their nature", the guy was absolutely correct.

The US government is just mad that it appears like China and Russia are trying to take an economic "bite" out of Africa before it can.

Pot...kettle.... black.

Dec 14 10:20

NY SUES 3 COMPANIES OVER LEAD LEVELS IN KIDS’ JEWELRY KITS

Two of the nation’s largest retailers and a third company are named in a New York lawsuit claiming the companies imported and sold children’s toys with lead levels up to 10 times higher than federal limits.

New York Attorney General Barbara Underwood said in the lawsuit filed in an Albany court Thursday that Walmart, Target and Randolph, New Jersey-based LaRose Industries, importer of the “Cra-Z-Jewelz” jewelry-making kits, “committed thousands of violations” of state laws regulating the safety of children’s toys sold in New York.

Underwood, a Democrat, said tests the attorney general’s office conducted on kits purchased across the state in 2015 and ’16 found that wristbands sold with the items contained lead at levels of 120 to 980 parts per million. The federal Consumer Product Safety Act for children’s products set the limit at 100 parts per million.

LaRose recalled the toys in 2016 after additional testing corroborated the New York tests.

Webmaster's Commentary: 

Very few people give a damn about the damage toys like this can potentially do to kids.

What I would like to see here, would be a trial by jury, where the manufacturers and distributors of these products, would be tried, if the evidence mounts that they knew, but did nothing, were convicted, and doing "hard time" in a Federal jail.

Dec 14 10:17

Recession risk leaves EU acutely vulnerable to a British Brexit walk-out

The balance of economic terror over Brexit has shifted over the last year.

The eurozone is more vulnerable to the shock of no-deal rupture on punitive Macronesque terms than it was at the point of peak hubris in December 2017, when EU negotiators set the trap of the Irish backstop.

Europe’s QE boomlet has since deflated. The underlying pathologies of monetary union are again in evidence. The bloc is stuck with a North-South chasm in competitiveness that has left a string of countries in near permanent malaise, starved of public investment and left with no way out other than internal devaluations. This has led to the Gilets Jaunes in France, and Lega-Five Star revolt in Italy.

Dec 14 10:15

POLICING FOR PROFIT: HOW CIVIL ASSET FORFEITURE FUNDS LAW ENFORCEMENT

Picture this: You’re driving home from the casino and you've absolutely cleaned up – to the tune of $50,000. You see a police car pull up behind you, but you can’t figure out why. Not only have you not broken any laws, you’re not even speeding. But the police officer doesn’t appear to be interested in charging you with a crime. Instead, he takes your gambling winnings, warns you not to say anything to anyone unless you want to be charged as a drug kingpin, then drives off into the sunset.

Dec 14 10:15

SMACK IN MIDDLE OF TRADE WAR, BOEING OPENS ITS FIRST 737 PLANT IN CHINA

The Chicago-based planemaker will inaugurate its completion and delivery center in Zhoushan, 90 miles southeast of Shanghai, on Saturday, after more than a year of construction. The facility marks a rare industrial foray outside of the U.S. for Boeing and a joint venture with state-owned plane maker Commercial Aircraft Corp. of China Ltd.

While the plant was sent in motion before U.S. President Donald Trump was elected, the ribbon-cutting risks being overshadowed by his tit-for-tat on duties with China on products ranging from cars, machinery to pork and soybeans.

About one of every four jets that Boeing builds is bound for China, while the country’s airlines are the biggest buyers of the 737, the manufacturer’s largest source of profit. China is expected to need about 7,700 commercial planes over the next two decades to connect an increasingly mobile middle class. That represents a $1 trillion market opportunity for Boeing, Airbus SE and homegrown rivals like Comac.

Dec 14 10:13

Nezavisimaya Gazeta: Washington’s anti-OPEC bill may throw oil market in chaos

The US Congress is working on a bill aimed at destroying OPEC. According to media reports, this is what made Qatar withdraw from the organization. If the Trump administration choses to wage a legal war against OPEC, the oil market may plunge into chaos, Nezavisimaya Gazeta wrote. In May 2018, a new version of the NOPEC (No Oil Producing and Exporting Cartels Act) bill was submitted to the House of Representatives and was approved by the Legal Committee in June. No other steps followed, yet discussions intensified in the wake of the OPEC+ agreement to cut oil output. Experts do not rule out that US authorities may succeed in pushing the NOPEC bill through Congress under the current circumstances. "First, the US is now less dependent on Saudi oil supplies, moreover, it has become a net oil exporter. Second, internal contradictions have weakened OPEC like never before, even driving some members to pull out of the organization.

Dec 14 08:49

Visualizing How Much Countries Spend on R&D

Dec 14 08:37

What Should Investors Expect In 2019

Dec 13 17:44

THE BEAR IS HERE: Is Your Exit Blocked?

Dec 13 17:44

‘Astonishing fraud: Pentagon stashes away unspent money & then uses it without any accountability’

RT spoke to David Lindorff, investigative journalist, and columnist for the Nation, who said that US military budget is now “larger than all the US debt in the history of the country.”

“Pentagon budget is $750 billion dollars at this point. And each year it has been lower than that before. And yet their accounting shows that they have $21 trillion additionally in the budget, the one they submit to Congress each year. One budget year it was $6.5 trillion budget just for the army – which that year really only had 122 billion,“ he continued.

He explained that Pentagon accountant service is “making up numbers and plugging them in …to make the financial documents that they submit to Congress each year for showing what they have spent the prior year and year before completely incomprehensible and unauditable.”

He called it an “astonishing fraud”.

Dec 13 15:40

The US economy is slowing but how quickly?

Dec 13 15:13

Swing Kids - The Gathering Storm

Dec 13 15:05

No signs of a problem?

Dec 13 13:57

One Chicken? That will be 14 million Bolivars… or .03 Dash

Kentucky Fried Chicken was rumored to be the latest fast-food restaurant in Venezuela to accept Dash cryptocurrency for payment.

(Actually, KFC denies these claims, but then Church’s Chicken stepped up to the plate and announced it will accept the tokens.)

Why Dash? Because the cost of a chicken now exceeds $14 million bolivars, the Venezuelan currency.

Hyperinflation in the socialist country has caused the currency to lose about 99% of its value since last year… And even then it had already been through years of hyperinflation.

Officially, the exchange rate is $1 USD for 248,000 bolivars. In reality, the exchange rate on the black market is $1 USD for over 6.6 million bolivars.

Dec 13 11:14

Trump’s Dilemma And Refuting The Gold/Yuan Peg Theory

The dollar index has been rising since Trump began his war on trade. But right now it’s at the same 97 index level as when Trump was elected. Recall that Trump’s administration pushed down starting in 2017 to stimulate exports and attempt to cut the trade deficit. The dollar fell from 97 to 88. Gold ran from $1125 to as high as $1360 – a key technical breakout level – by late April 2018. Something had to be done to keep gold from moving higher…Trump started his Trade War in March, which pushed the dollar higher. Gold began tank. Ironically, the trade deficit one again began to balloon.

If Trump wants to “win” the trade war, he needs to push the dollar a lot lower. This in turn will send the price of gold soaring. This means that the western Central Banks/BIS will have to live with a rising price gold, something I’m not sure they’re prepared to do. This could set up an interesting behind-the-scenes clash between Trump and the western banking elitists.

Dec 13 11:10

Are We at the Peak of Employment and Wages?

Dec 13 11:02

Saudi Arabia Under Fire From All Sides

Saudi Arabia bet that it could defy the U.S. when it pushed for oil production cuts at the OPEC+ meeting, gambling that President Trump would not lash out in retaliation despite some heavy-handed pressure from his twitter feed ahead of the summit in Vienna. This week, the bet seems to have paid off.

To be sure, Saudi Arabia’s decision to push for oil production cuts was a bit of a no brainer. The extreme budgetary pressure facing Riyadh from low oil prices is vastly more concerning than any legal or political action from the U.S. Congress or White House. And absent a deal in Vienna, oil prices could have fallen further.

Dec 13 10:59

Why America is the new Middle East in terms of oil production: World’s largest reserves just discovered under Texas

For the first time since 1973, the United States now leads the world in terms of oil production. And according to reports, we have the ground underneath Western Texas and Eastern New Mexico to thank.

Dec 13 10:48

Homelessness on the rise in some U.S. cities

Homelessness has declined across most of the U.S. over the last decade as the economy has crawled back from the housing crash. In some cities, however, the problem is getting worse, with researchers pointing to a one culprit in particular: rising rents.

A new analysis from Zillow found that the incidence of homelessness is growing faster in the least affordable rental housing markets, including Los Angeles, New York, San Francisco and Washington, D.C.

"It's undoubtedly good news that the overall level of homelessness has fallen nationwide, even as housing costs have increased. But that zoomed-out view obscures some very real, local tensions between housing affordability and homelessness, and ignores the reality that success in tackling homelessness in one community doesn't necessarily have the same effect in another," said Skylar Olsen, director of economic research and outreach at Zillow, a provider of real estate data, in a statement.

Dec 13 10:46

Harvard's $39B Endowment Is Secretly Acquiring California's Water Supply

Harvard University's endowment (valued at $39 billion as of 2018) is the largest academic endowment in the world. The private investment company has been quietly snapping up farmland and related water rights to properties located in the California region.

Instead of purchasing the land in Harvard Management Company, Inc.'s own name, asset managers secretly formed a wholly owned subsidiary - called Brodiaea, which was the vehicle to purchase more than a dozen investments in California vineyards over the last six years.

Harvard formed Brodiaea in 2012, and by 2015 the company had already acquired 10,000 acres in Santa Barbara and San Luis Obispo counties for roughly $60 million, according to Reuters.

Dec 13 10:45

House Passes $867 Billion Farm Bill Which Rejects Curbs On Food Stamps

President Trump still does not have a new chief of staff, but at least he now has a green light to hand out bailouts and subsidies to America's farmers.

On Wednesday, the House passed an $867 billion farm bill to help those workers in the agricultural industry, sending the legislation to President Trump for a signature. The measure easily passed with a 369-47 vote. The legislation, which previously passed the Senate in an 87-13 vote on Tuesday, expands farm subsidies and according to The Hill, includes language legalizing hemp production.

Dec 13 10:43

Albert Edwards: Trump's Tariffs Have Launched A Chinese "Death Wobble"

Two months ago, Albert Edwards first suggested that investors are focusing on the wrong catalyst for the next crash, which according to the grumpy SocGen strategist would emerge out of China, contending that as Trump exerts mounting pressure on the Chinese economy via tariffs, "the worry is that a Chinese policy response will send the global markets into a tailspin, just as the August 2015 devaluation did."

Today, in his latest note, Edwards doubles down on his assertion that a China hard-landing may be "the grey rhino that investors are ignoring" even as he once again admits that "naysayers, such as I, have consistently been proved wrong about the ability of China’s policymakers to successfully navigate choppy waters without capsizing the economic ship. And it is wholly natural that investors, having been proved overly bearish about the economy in the past, have given up worrying about a Chinese hard landing – but now that ship looks to be taking on water once again."

Dec 13 10:42

In First Major Purchase Since "Trade War Truce", China Buy 500,000 Tonnes Of US Soybeans

Despite numerous pitfalls and occasional arrests, the truce between Trump and Xi appears to be bearing fruit, or rather vegetables.

According to Reuters, Chinese state-owned companies bought at least 500,000 tonnes of U.S. soybeans on Wednesday in the first major purchases since Trump and Xi met in early December and cobbled together a ceasefire in the trade war between the US and China.

Citing one trader, Reuters said that at least nine cargoes traded and "there were probably more."

A second trader with direct knowledge of the deals said Chinese state-owned firms bought at least 12 cargoes for shipment between January and March. "China was buying right out of the gate this morning. It looks like we're back in business now," the source said.

The soybeans are expected to be shipped from grain terminals in the U.S. Pacific Northwest, the most direct route to Asia, the traders said.

Dec 13 10:42

America Won't be Able to Stop Iraq From Importing Iranian Gas - U.S. Expert

The United States will not be able to force Iraq to stop importing gas from Iran, says an academic, adding that Baghdad will continue to procure its energy requirements rather than going along with the U.S. anti-Iran sanctions.

“Definitely in the context of Iraq, it is not looking good for the hawks in Washington because they are basically not going to be able to remove the waivers that enable Iraq to continue to purchase energy from Iran," David Yaghoubian, professor of History at CSU San Bernardino told Press TV in an interview on Wednesday.

According to the terms of an agreement struck between Tehran and Baghdad, Iran is to supply 35 million cubic meters of natural gas on a daily basis to the Iraqi capital city of Baghdad [gradually in three phases], while up to 25 million cubic meters of gas per day is supposed to be exported to the southern city of Basra.

Dec 13 10:08

Goodyear Shutters Venezuela Plant, Gives Out Tires As Severance

Venezuela's economic depression has claimed yet another victim, as Goodyear Tire announced it would shutter its Venezuela operations and lay off its entire local workforce, the latest foreign corporation to close shop in the crisis-torn county. On Monday, employees arrived at the company’s lone plant in the industrial city of Valencia to find it closed with a letter posted on the door. “Goodyear Venezuela has been forced to cease operations,” according to a copy seen by Bloomberg.

Dec 13 10:07

Walmart Testing Flippy The Job-Stealing Robot Cook

Walmart is testing out a new kitchen robot assistant named "Flippy" at its Bentonville, Arkansas headquarters in order to see if it might make for a valuable team member in its in-store delis, according to Yahoo! Finance.

While Flippy had somewhat of a rocky start at a Pasadena, California burger joint - having to be taken offline after its human co-workers couldn't prepare patties fast enough, the robot has had more recent success flipping 17,000 pounds of chicken tenders and tater tots at Dodger Stadium in Los Angeles.

Dec 13 10:07

Chinese Auto Sales Accelerate Historic Collapse, Set For First Annual Decline In 30 Years

Progress in the United States/China trade war seems to be happening at just the right time.

The automobile industry in China has been crippled, partly as a result of this trade war, partly due to the ongoing domestic economic slowdown in the mainland, and absent major subsidies - which don't appear to be coming - the outlook for the rest of 2018 and 2019 is not promising. The collapse has been historic and according to new data, continued through November.

November data confirmed a continuation of the ugly trends that we discussed last month. For instance, passenger vehicle wholesales were down 16.1% on the year, according to the China Association of Automobile Manufacturers. This data includes sedans, SUVs and crossover utility vehicles.

Dec 13 09:15

European MPs who oppose Nord Stream-2 possibly pin hopes on firewood, says Moscow

"Opposing energy cooperation and its diversification and measures to adjust it to modern trends is madness for Europe," Russian Foreign Ministry spokeswoman Maria Zakharova said

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