02/9/17

HAS TRUMP UNLOCKED THE PROVERBIAL ANIMAL SPIRITS?

By: Kent Engelke | Capitol Securities
From: 1/30/17

For those who doubted President Trump’s campaign rhetoric, they are now surprised. His proposals are indeed tectonic, perhaps reshaping the geopolitical and socioeconomic landscape of the last fifty to sixty years. It is potentially generational setting.

Society is responding positively to Trump’s proposals for according to Gallup there is now 66% of Americans that think they will be better off one year from today. One year ago, only 44% thought they would be better off in one year.

This survey is consistent with the University of Michigan survey that showed the strongest sentiment among households in 13 years.

The Establishment has low expectations of a Trump presidency, a view not shared by society according to Gallup. Forty nine percent of Americans state they are better off today than one year ago, a ten year high. Most of this gain has occurred since the election.

Has Trump unlocked the proverbial Animal Spirits?

Preliminary estimates of fourth quarter GDP was released Friday. There was something to confirm one’s preconceived expectations and confirmation bias. Some will champion final sales to domestic purchases which strip out inventories and exports rose by 2.5% last quarter the fastest since 2015.

Others will focus on the headline number of the paltry increase of 1.9% versus expectations of 2.2%. This disappointing number was the result of trade that subtracted 1.7% from GDP, the most since 2Q10.

2016 capped the eleventh straight year of annual growth of less than 3%. Many are asking what will be the impact to GDP if Trump’s trade proposals come to fruition?

What I find of concern is that there is little narrative about the potential inflationary implications of the President’s trade proposals. It is because of trade that flat screen TVs are only $150, iPhones have dropped considerably in price and socks are now only $2. If tariffs are instated, will corporate America absorb any production cost increases resulting in lower margins, a huge issue for the largest capitalized momentum companies? Or will the increase in price be passed onto the consumer?

How will the environment unfold? Personally, I have disdain for people who shop at Wal-Mart that imports a majority of its products and then complains there are no jobs or salary increases. One can’t have both…cheap prices and high wages. Eventually, this unbalanced situation changes either by politics or by natural events.

Last night, the foreign markets were down. London was down 0.69%, Paris down 0.81% and Frankfurt down 0.70%. China was up 0.31%, Japan down 0.51% and Hang Sang down 0.06%.

The Dow should open moderately lower, mirroring losses in global markets, after Trump’s executive order halting some immigration to the country. Earning season accelerates this week as over 100 firms are set to post results in the next five days. To date, about a third of members have released results, of which seventy five percent beat profit estimates and about half topped sales forecasts.

The 10-year is unchanged at 2.48%.

04/5/16

The Panama Papers – In The Beginning There Was Putin

By: Terresa Monroe-Hamilton

Looks like Vlad got caught big time with his mitts in the cookie jar. In the largest financial data leak in history, we are getting to see just how corrupt Vladimir Putin and his inner circle of cronies are. It’s revealing to say the least. It’s a dirty dozen of world leaders who are using offshore tax havens to hidey hole their wealth. But as in all things secret, the light of day is shining into the buried coffers of power brokers. Good times.

And Putin is far from alone… a cadre of celebrities, sports stars, British politicians and the uber wealthy of the planet are all mired in this scandal. Welcome to the Panama Papers. This is a collection of 11 million files or so that contain data to kill for. It makes Edward Snowden look like a rank amateur by comparison. But this wasn’t a hack… it was a mass collection of documents and data.

The leak is originating from one of the world’s most secretive entities… the Panamanian law firm of Mossack Fonseca. In the dirt dug up, the firm is exposed for helping clients launder money, dodge sanctions and evade taxation. Among their clientele are megastars Jackie Chan and Lionel Messi who have invested their millions offshore. Chan is a big fan of communist China. The whole story is like a movie come to life… it’s also revealed that 26 million pounds that was stolen during the Brink’s Mat robbery in 1983 was possibly funneled into an offshore company set up by this firm.

Continue reading →

02/7/16

Financial Scandals Follow Socialist Millionaire Sanders

By: Cliff Kincaid | Accuracy in Media

Responding to one of Anderson Cooper’s softball questions, socialist Bernie Sanders (I-VT) told the CNN Town Hall on Wednesday night that he lives a frugal life and indicated that he doesn’t care about money or status. “I have a small Chevrolet,” he said. “It is one of the smallest Chevys that they make.” He said it was about five years old.

But James O’Brien, a political consultant and former publisher ofCampaigns & Elections magazine, says the career politician, who has been a mayor, member of Congress and U.S. senator, has achieved the financial status of a millionaire.

O’Brien has analyzed the financial status of Sanders and his wife, including their financial disclosure report, and has concluded they have a net worth in the range of $1.2 to $1.5 million, not the $700,000 or less that is usually reported by the media.

Rather than “Feel the Bern,” the phrase associated with popular support for the self-declared “democratic socialist,” O’Brien says that Sanders is personally “Feelin’ the Wealth.”

Equally significant, his wife, Jane O’Meara Sanders, left her position as president of Burlington College under controversial circumstances and is now being accused of federal bank fraud. She left her position at the college and was given a severance package known as a “golden parachute” that also benefited Senator Sanders’ personal wealth.

Brady C. Toensing, a partner with the law firm of diGenova & Toensing, has filed alegal complaint with federal authorities requesting an investigation into apparent federal bank fraud committed by Ms. Sanders. His complaint was sent to Eric S. Miller, the U.S. Attorney for the District of Vermont, and Fred W. Gibson, Jr., Acting Inspector General with the Federal Deposit Insurance Corporation.

A Sanders spokesman told the Burlington Free Press that the complaint was an effort to throw mud at the presidential candidate.

O’Brien says that Sanders’ financial disclosure forms are incomplete. “For someone who doesn’t care about money, he goes a long way to cover up his true net worth,” he says. “Bernie does not disclose the value of real estate holdings. He can. He is not required to, but he could if he chose. It is known that he and/or his wife own at least two homes—one with rental income in Vermont and one near Capitol Hill where the median home value is $722,000.”

O’Brien bases his conclusions about Sanders’ millionaire status on what is known and can be estimated about his salary, the income of his wife, joint income, investments, pension, and value of his real estate properties.

On top of this, O’Brien notes that Sanders benefits from a multi-million dollar U.S. Senate staff and a multi-million dollar U.S. presidential campaign staff.

In addition to the questions about his real net worth, Jane Sanders’ exit from Burlington College continues to generate controversy, even scandal. She was president of the college from 2004 until 2011.

Federal officials have acknowledged the complaint about Jane Sanders from attorney Brady C. Toensing, but they won’t say whether they are going forward with an investigation.

Although Senator Sanders frequently complains about the “corporate media” that are supposed to have a bias against his candidacy, the necessary task of digging into the finances of his wife has been left to the conservative media and some local Vermont news organizations.

At the very least—as noted by Bruce Parker, a Vermont reporter for Watchdog.org—Senator Sanders should be asked to explain how his opposition to severance packages for corporation executives squares with his wife getting a cushy severance of $200,000.

In a story headlined, “Bernie Sanders’ Wife May Have Defrauded State Agency, Bank,” reporters Blake Neff and Peter Fricke of the conservative Daily Caller News Foundation reported the essential facts of the case, noting that she nearly bankrupted Burlington College when she took on $10 million in debt to finance the purchase of a new, far more expansive campus. “The move backfired massively, leading to Sanders’ departure from the college and the near-collapse of the institution,” Neff and Fricke report.

By any standard of fair and objective news reporting, a candidate who promises “free college” to America’s young people should be asked to address the issue of his wife’s financial shenanigans almost bankrupting an institution of higher learning. But it hasn’t been raised in the debates.

At one point it was reported that Burlington College was fighting for its very survival. “As a result of its financial woes, Burlington College is on academic probation from the New England Association of Schools and Colleges,” reportedVTDigger.org, a statewide news website, in 2014.

VT Digger confirmed the nefarious role played by Jane Sanders, noting that she “overstated donation amounts in a bank application for a $6.7 million loan that was used by the college to purchase a prime 33-acre property on Lake Champlain in 2010.” Jane Sanders “resigned under pressure from the Burlington College board of trustees nearly a year after obtaining the multi-million dollar loan,” the site reported. “After both sides lawyered up, the board gave Sanders the title of president emeritus and a $200,000 severance package.”

A Republican activist named Skip Vallee produced a 60-second television advertisement entitled, “Bernie’s Golden Parachute,” describing the nature of the $200,000 severance package and making the point that while Sanders was planning a presidential run “on a theme of railing against golden parachutes and excesses” on Wall Street, he took “his own golden parachute” through his wife’s curious dealings with the cash-strapped college.

The ad features the “S” in Sanders in the shape of a dollar sign and shows Sanders saying the rich in America “manipulate a rigged system” and benefit from “golden parachutes.”

On top of this scandal, The Washington Free Beacon has reported that Senator Sanders used campaign money to benefit members of his family, and that Jane Sanders directed six-figure sums from Burlington College to her daughter and the son of a family friend.

“Getting money out of politics” is one of the planks in Sanders’ presidential campaign platform.

12/6/15

ACTION ALERT: Demand Congress Stop Funding Refugee Resettlement With Our Tax Dollars

In the wake of the horrific terror attacks in San Bernardino and Paris, the FBI said it lacks the funds to stay ahead of the escalating terror threats right here in America. So why would we want to divert any of our tax dollars, which should be directed to reinforcing our nation’s security and intelligence apparatus to protect our families and our nation, to opening the gates to refugees from terror-supporting nations whom we CAN NOT vet and whose ranks ISIS and other terror organizations target to infiltrate?

This Monday and Tuesday, we must flood the offices of our US Representatives and Senators with calls (US Capitol Switchboard: 202-224-3121) urging them to vigorously oppose Refugee Resettlement Funding contained in the Omnibus Spending Bill that will be voted on by 12-11-15!

Then make 4 more calls to insist the same:

Speaker Paul Ryan/Phone: 202.225.3031
Senate Majority Leader Mitch McConnell/Phone: 202.224.2541
Hal Rogers, Chair, Appropriations Committee/Phone: 202.225.4601
Thad Cochran, Chair, Senate Appropriations /Phone: 202.224.7257

Tell your Members of Congress IN NO UNCERTAIN TERMS THAT YOU WANT THEM TO SUSPEND REFUGEE RESETTLEMENT FUNDING IMMEDIATELY.

Read Sen. Jeff Sessions’ statement on this: www.sessions.senate.gov/public/index.cfm/2015/12/sessions-omnibus-expected-to-fund-obama-s-entire-immigration-agenda

US Rep. Candice Miller of MI, Vice Chair of the Homeland Security Committee, said:

“I support Governor Snyder’s decision to suspend efforts to relocate Syrian refugees to Michigan, and have cautioned against the Administration’s decision to increase the number being admitted into the U.S. …terrorist organizations like ISIS are looking for any and every opportunity to exploit a nation’s hospitality to carry out their barbaric attacks against the innocent. Anyone who says we can adequately and safely vet these refugees is wrong because there is no database in Syria and no way to identify who’s who.

THIS IS THE MOST IMPORTANT NATIONAL SECURITY ISSUE OF OUR TIME. If you don’t want unvettable refugees from terror-supporting countries in your neighborhood, you must raise your voices NOW. The immigration industry is a powerful lobby and private resettlement contractors have the authority to send refugees to any town, city, neighborhood or location without public notification and local consent.

http://www.refugeeresettlementmonitormichigan.org/

04/17/15

Stock Market Boom and Crash: Cause and Effect

By: Wim Grommen

This article explains, based on transition properties, why a stock market boom occurs during the acceleration phase of a transition, inevitably followed by a stock market crash in the stabilization phase of a transition.

Transitions

Every production phase, civilization or other human invention goes through a so called transformation process. Transitions are social transformation processes that cover at least one generation. In this article I will use one such transition to demonstrate the position of our present civilization and its possible effect on stock exchange rates.

A transition has the following properties:

it involves a structural change of civilization or a complex subsystem of our civilization
it shows technological, economical, ecological, socio cultural and institutional changes at different levels that influence and enhance each other
it is the result of slow changes (changes in supplies) and fast dynamics (flows)

A transition process is not fixed from the start because during the transition processes will adapt to the new situation. A transition is not formulaic.

Four transition phases

In general transitions can be seen to go through the S curve and we can distinguish four phases:

a pre development phase of a dynamic balance in which the present status does not visibly change
a take-off phase in which the process of change starts because the system starts to shift
an acceleration phase in which visible structural changes take place through an accumulation of socio cultural, economical, ecological and institutional changes influencing each other; in this phase we see collective learning processes, diffusion and processes of embedding
a stabilization phase in which the sociological change slows down and a new dynamic balance is gradually achieved

A product life cycle also goes through an S curve. In that case there is a fifth phase: the degeneration phase in which cost rises due to over capacity and in which the producer will finally withdraw from the market.

When we look back into the past we see three transitions, also called industrial revolutions, taking place with far-reaching effect:

The first industrial revolution (1780 until circa 1850); the steam engine
The second industrial revolution (1870 until circa 1930); electricity, oil and the car
The third industrial revolution (1950 until ….); computer and microprocessor

The emergence of a stock market boom

In the development and take-off phases of the industrial revolution many new companies emerged. All these companies went through more or less the same cycle simulataneously. During the second industrial revolution these new companies emerged in the steel, oil, automotive and electrical industries, and during the third industrial revolution the new companies emerged in the hardware, software, consulting and communications industries. During the acceleration phase of a new industrial revolution many of these businesses tend to be in the acceleration phase of their life cycle, more or less in parallel (Figure 1).

Figure 1. Typical course of market development: Introduction, Growth, Flourishing and Decline

There is an enormous increase in expected value of the shares of companies in the acceleration phase of their existence. This is the reason why shares become very expensive in the acceleration phase of a revolution.

There was also an enourmous increase in price-earnings ratio of shares between 1920 – 1930, the acceleration phase of the second revolution, and between 1990 – 2000, the acceleration phase of the third revolution.
The increase in the price-earnings ratio is amplified because many companies decide to split their shares during the acceleration phase of their existence. A stock split is required if the market value of a share has grown too large, rendering the marketability insufficient. A split increases the value of the shares because there are more potential investors when they are cheaper. Between 1920 – 1930 and 1990 – 2000 there have been huge amount of stock splits that impacted the price-earnings ratio positively.

In the acceleration phase of a revolution there will always be a stock market boom.

Figure 2. Two industrial revolutions: Shiller PE Ratio (price / income)

The consequence of a stock market boom is a market crash

The third industrial revolution is clearly in its saturation and degeneration phase. This phase is characterized by the saturation of the market and the increasing competition. Only the strongest companies can compete, or take on the competition (like for example the take-overs by Oracle and Microsoft Corporation (NASDAQ:MSFT) in the past few years). This puts many of the newly created companies in the stabilization phase or decline phase of their life cycle, decreasing their growth potential and the expected value of their shares. This means that the price-earnings ratio of shares will go down. This trend started in 1930 during the first industrial revolution and has started repeating itself from 2000 on.

Depending on the behavior of the central banks, the future will tell whether and at what rate the price-earnings ratio of shares will continue to drop. Aristotle’s law of cause and effect also applies to a stock market boom and a stock market crash.

03/14/15

China! Will America Win the Trade War? | Bill Whittle

03/12/15

Central Banks Buying 100% of Sovereign Debt

Hat Tip: BB

02/15/15

Are We Seeing History Repeat Itself?

By: Alan Caruba
Warning Signs

“Those who do not remember the past are condemned to repeat it” is the famed quote of George Santayana, a Spanish philosopher (1863-1952). I am beginning to think that the world is making its way toward a future that repeats the horrors of the last century’s wars and earlier times when Europeans battled Islam to free Jerusalem, to protect their homelands in Europe, and to eject Muslims from Spain.

In his book, “Jihad in the West: Muslim Conquests from the 7^th to the 21^st Centuries” historian Paul Fregosi documented the history of Islam and its attacks on European nations, characterizing jihad as “essentially a permanent state of hostility that Islam maintains against the rest of the world.” It is a Muslim sacrament, a duty they must perform.

Occurring at the same time is the agenda of the global environmental movement and on February 4 Christina Figueres, the executive secretary of the United Nations Framework Convention on Climate Change, said “This is probably the most difficult task we have ever given ourselves; which is to intentionally transform the economic development model, for the first time in human history.”

“This is the first time in the history of mankind that we are setting ourselves the task of intentionally, within a defined period of time, to change the economic development model that has been reigning for the, at least, 150 years, since the industrial revolution.” (Italics added)

Figueres was wrong. The objective of the 1917 Communist revolution that began in Russia and Mao’s “Great Leap Forward” (1958-1961) was the same that is now being openly embraced by the United Nations in 2015. The result of both was the death of millions.

Humanity is under attack from an Islam that intends to impose its barbaric seventh century Sharia law and from the environmental movement’s intention to end capitalism and replace it with the income distribution central to Communism.

Both spell a terrible future for the people of the world.

The President of the United States is devoted to pursuing both of these goals as the defender of Islam and the opponent of “income inequality.” We have twenty-two months to survive Barack Obama’s remaining time in office.

Obama was first elected on the promise to end the U.S. engagement in conflicts in Iraq and Afghanistan. After many years Americans welcomed the prospect of ceasing the loss of lives and billions those wars represented. With the rise of the Islamic State (ISIS) they are now seeing the true price of that policy. Just because we don’t want to fight a war doesn’t mean our enemy will cease to pursue it.

We are at a critical moment in time because it is evident that Obama wants to provide Iran the opportunity to build its own nuclear weapons arsenal. It is a time as well when the military capability of the U.S. has been diminished to what existed before the beginning of World War II. All of Europe and much of Asia would have fallen under the control of Nazi Germany and the Empire of Japan if the U.S. had not stepped up to the task of defeating them.

Relentlessly, Obama has done everything he can to reduce the size of our military fighting force and the ships, planes and other weapons needed to protect our security or support that of our allies. He has withdrawn the U.S. from its position of global leadership and left behind allies that no longer trust us and enemies who no longer fear us.

Raymond Ibrahim of the Middle East Forum wrote on February 5 that “approximately 100 million Christians around the world are experiencing the persecution by Muslims of all races, nationalities, and socio-political circumstances.”

At the same time, we are witnessing a new exodus of Jews from Europe, mindful of the Holocaust in the 1940s. According to the Pew Research Center, as of 2013 the Jewish population worldwide was approximately 14 million. Just over 6 million reside in Israel, another 6 million are U.S. citizens, and the rest are in Europe and elsewhere around the world. What has not changed from the last century, however, is the level of anti-Semitism and it appears to be on the rise.

What we are witnessing is a full-scale attack on the West—Christianity and Judaism—and upon Western values of morality, democracy, and freedom.

Whether it will erupt in a new world war is unknown, but if history is a guide, we are moving in that direction.

02/14/15

Sessions: Executive Amnesty Increases Competition For Jobs, Reduces Wages

“At a time of this high unemployment, we are also going to be legalizing 5 million people to take jobs. Income is down $4,000 since 2007 for middle-class working families. The median income is down $4,000 since 2007. So how is this good for lawful immigrants, permanent residents, American citizens? How is it good to bring in even more workers at a time when we have the smallest percentage of Americans in the workforce in 40 years?”

BACKGROUND:

The Economic Policy Institute recently documented that the number of unemployed persons in virtually every U.S. industry exceeds the number of job openings in those industries—for instance, in construction, there are six unemployed persons for each one job opening. Again, these are unemployed jobseekers—a much smaller group than those outside the labor force entirely. The below findings must be kept front and center when considering Senate Democrats determination to block DHS funding in order to help companies hire illegal immigrants. The 5 million illegal immigrants of to whom Democrats are conferring work permits will be added to the pool of jobseekers in all of these industries, displacing millions of Americans by filling jobs at lower wages. Recall that, due to high immigration rates—9 million immigrants arrived since 2007—all jobs went to foreign workers since the recession began.

02/13/15

Sessions Rebuts Durbin: Your Border-Erasing Amnesty Is Putting Whole Nation At Risk

BACKGROUND:

Sessions read excerpts from statements issued by Kenneth Palinkas, president of the United States Citizenship and Immigration Service officers’ council, which represents 12,000 USCIS personnel:

“Unfortunately—and perilously overlooked in Washington—our caseworkers are denied the urgent professional resources, enforcement tools, and mission support we need to keep out those who are bent on doing us harm.” (9/18/14)

“The 9/11 hijackers got into the U.S. on visas and now, 13 years later, we have around 5 million immigrants in the United States who overstayed their visas—many from high-risk regions in the Middle East. Making matters more dangerous, the Obama Administration’s executive amnesty, like S. 744 that he unsuccessfully lobbied for, would legalize visa overstays and cause millions additionally to overstay—raising the threat level to America even higher.” (9/18/14)

“If you care about your immigration security and your neighborhood security, you must act now to ensure that Congress stops this unilateral amnesty. Let your voice be heard and spread the word to your neighbors. We who serve in our nation’s immigration agencies are pleading for your help—don’t let this happen. Express your concern to your Senators and Congressmen before it is too late.” (10/28/14)

“The President’s executive amnesty order for 5 million illegal immigrants places the mission of USCIS in grave peril. Instead of meeting our lawful function to protect the Homeland and keep out those who pose a threat to US security, health, or finances, our officers will be assigned to process amnesty for individuals residing illegally inside our nation’s borders.” (1/22/15)

“The Administration’s skewed priorities mean that the Crystal City amnesty processing center will likely have superior worksite conditions for personnel relative to our normal processing centers. Additionally, the security protocols at place in this facility will be insufficient to engage in any basic screening precautions, ensuring and rewarding massive amounts of fraud.” (1/22/15)