Taibbi: Konstantin Kilimnik, Russiagate"s Last Fall Guy, Speaks Out

Taibbi: Konstantin Kilimnik, Russiagate's Last Fall Guy, Speaks Out Authored by Matt Taibbi via TK News, On Real Time With Bill Maher two Fridays ago, I fumbled and deflected politely over a Russiagate question, instead of going full cage match. The segment went off the rails beginning with this exchange: MAHER: You compared it to WMDs. You said, the Russia connection with Trump is this generation’s WMD. I don’t think that’s an accurate analogy, because there were no WMDs. But there was collusion with Russia. TAIBBI: Really? Where? MAHER: Where? The Senate Intelligence Committee, run by Republicans, who are if anything slavish to Trump, their report said, “The Trump campaign’s interactions with Russian intelligence services during the 2016 presidential election posed a ‘grave’ counterintelligence threat.” First of all, that quote isn’t from the Senate Select Committee on Intelligence (SSCI) report from last August. It’s actually a paraphrase of the report from an Associated Press article, “Trump campaign’s Russia contacts ‘grave’ threat, Senate says,” which reads: WASHINGTON (AP) — The Trump campaign’s interactions with Russian intelligence services during the 2016 presidential election posed a “grave” counterintelligence threat, a Senate panel concluded Tuesday… The real SSCI quote is a little different: Taken as a whole, Manafort's high-level access and willingness to share information with individuals closely affiliated with the Russian intelligence services, particularly Kilimnik and associates of Oleg Deripaska, represented a grave counterintelligence threat. By all rights, Russiagate should be dead as a serious news story. But as the Real Time episode showed, “collusion” is still alive for some, and the bulk of the case essentially rests now upon the characterization of one person from the above passage as a Russian agent: a former aide to Paul Manafort named Konstantin Kilimnik. Kilimnik is a Ukrainian-American who’d served in the army and was hired to work as a translator at the American-funded International Republican Institute in Moscow beginning in the mid-nineties. In 2005, he left the IRI to go work for Paul Manafort, who was advising future president Viktor Yanukovich and the “Party of Regions” in Ukraine. As it happens, Kilimnik worked at the IRI in Moscow during the same time I lived in that city in the nineties and early 2000s. In fact, he was well-known enough in that small expatriate community that in the space of a day last week I was able to reach, through mutual acquaintances, five of Kilimnik’s former colleagues, including three from the IRI and one from the U.S. State Department, to whom he was a regular and valuable contact (the Senate investigators left that fact out). I also called Kilimnik and had two lengthy interviews with him. Why bring this up? Because in that little flurry of calls, I did more actual work on Konstantin Kilimnik than either the Special Counsel or SSCI researchers, who ostensibly spent thousands of man-hours investigating him. Kilimnik being a spy wouldn’t just mean that the Trump campaign had been penetrated. It would mean the same thing for the IRI, which was chaired by late Senator and leading proponent of the Russiagate theory John McCain at the time. More to the point, it would also be disastrous for the State Department, and particularly for the U.S. embassy in Ukraine, whose staffers placed great trust in “KK” as a regular source. The FBI’s own declassified reports show Kilimnik met with the head of the Kiev embassy’s political section “at least biweekly” during his time working with Manafort and Yanukovitch, adding that he “displayed good knowledge and seemed to know what was going on,” and came across as “less slanted” than other sources, among many other things. This fits with what I was told by multiple former colleagues of Kilimnik’s, that staffers in the Kiev embassy valued his analyses above those of some Americans in Yanukovitch’s orbit. (A third former co-worker was a little more blunt about what he heard, saying the Kiev embassy was “sucking his dick”). They also show the embassy was so intent on protecting Kilimnik’s identity as a State Department source that they pulled his name out of diplomatic cables sent home: Kilimnik says he “played a certain role in communication with the Western embassies in Kiev” both before and after the “Euromaidan” Revolution in 2014. “I tried to draw attention to facts about thugs attacking TV channels and opposition politicians, and things like [an arson attack against “InterTV” in 2016],” he says, adding that he “naively thought the West would stand for media freedom and protecting rules for fair play in politics, like it has for many years.” The only reason nobody’s asked the Senate Committee why Kilimnik’s alleged spy status doesn’t also represent a “grave” embarrassment to, say, the U.S. State Department is because our press corps is the most dogshit on earth (more on that in a moment). Special Counsel Robert Mueller claimed the FBI spoke to an IRI employee who said Kilimnik was “fired from his post because his links to Russian intelligence were too strong.” Though not all the IRI staffers I reached liked Kilimnik, each found the idea that he might be a spy alternately ridiculous and baffling. Multiple ex-colleagues said they believed he was fired for “moonlighting,” i.e. because he’d already started working for Manafort. “I was actually moonlighting. It was a funny story,” Kilimnik says (for a more complete explanation, see the Q&A below). As to the idea that it was known around the IRI office that Kilimnik had intelligence ties, one former senior IRI official said, “I think whoever said that, that’s someone trying to feel more important in retrospect,” adding that the idea that he was “some GRU plant from years gone by” was questionable because the Russians “didn’t know their right from their left back then, and the IRI could not described as a high-value target.” The official concluded: “I find the notion that Kilimnik is now this big figure remarkable.” None of former employees of the Moscow IRI office I spoke with had been contacted by any American investigator, including Mueller. Then there’s the matter of the suspect himself. Question to Kilimnik: how many times was he questioned by American authorities, with whom he was so familiar — remember he met with American officials “at least biweekly” at one point pre-Trump — during the entire Russiagate period? “Not a single person from the U.S. Government ever reached out to me,” Kilimnik says. Nobody from the Office of the Special Counsel, the FBI, or the Senate Intelligence Committee ever contacted him? “Not once,” Kilimnik says. “Nobody from Mueller’s team reached out to me, literally nobody.” In reaching Kilimnik last week I also became just the second American reporter, after Aaron Maté of RealClear Investigations and Grayzone, to call Kilimnik for comment on the Senate report. Virtually every American news organization or TV commentary program has in the last year repeated accusations against Kilimnik made by either the Senate Intelligence Committee or the U.S. Treasury Department, which earlier this year called him a “Russian Intelligence Services agent” in an announcement of sanctions against Russia. It was once normal practice in American media to give people a chance to respond to serious allegations, but no longer, apparently. “Zero. Zero,” says Kilimnik, when asked how many American media outlets called him after the release of the Senate report. Incidentally, Kilimnik isn’t hiding under a snow-covered trap door at a secret FSB installation outside Izhievsk. He’s in an apartment in Northwest Moscow, where anyone could find him. “Everybody knows my phone number. It was in Mueller’s reports,” he says. “But I got no questions. I mean, a lot of people know how to find me. I guess they just didn’t care.” Kilimnik was even on the list of 16 entities and 16 individuals the Treasury just this year said “attempted to influence the 2020 U.S. presidential election at the direction of the leadership of the Russian Government.” That’s the 2020 election, not the 2016 election, meaning the one that came after the Senate report. “The US actually sanctioned me for interference in 2020 elections,” Kilimnik says. “I would not be able to say why. I’d love to know. I’ve been sitting in fucking Moscow, in my backyard, and feeding squirrels. Must have been some sort of interference.” The aforementioned Maté published photos of Kilimnik’s passport that appear to show he entered the U.S. on a visa stamped in a regular Russian passport on October 28, 1997. This is the same date the Senate committee said he was entering the United States on a diplomatic passport. The Senate also said Kilimnik met with Manafort in Spain in 2017, which he denies. “I’ve never been to Spain,” Kilimnik laughs. “I haven’t been there. Let them prove I’ve been there.” Another thing that came up on Real Time was the idea that we shouldn’t dismiss the monetarily tiny Russian Facebook campaign — featuring classics that ironically read like Real Time bits, with images of Jesus pleading with American voters, “Struggling with addiction to masturbation? Reach out to me and we’ll beat it together” — because “9/11 didn’t cost much either”: I oversold things on the air, talking about how the Internet Research Agency only spent $100,000, as only $44,000 of that was before the campaign. More importantly, only a tiny percentage of ads qualified as coherent propaganda. I’d wager few Americans have actually read through all these ads, which have messages like, “Tell me once again that there’s no such thing as white privilege,” “Stop Trump and his bigoted agenda!”, and “Share the experience and the challenges of the black hair industry.” Overall, for 2016, they read like a creepy, overambitious parody of woke culture, with a tinge of Charlie Manson’s “Helter Skelter” plan thrown in. Whatever it is/was, it’s pretty far from 9/11: Kilimnik stands accused of helping Evil Von Putin aim this high-tech weapon. How? Senate investigators said, “Manafort briefed Kilimnik on sensitive Campaign polling data and the Campaign’s strategy for beating Hillary Clinton.” What was sensitive about it? “That’s bullshit. There was nothing that resembled ‘sensitive’ polling data,” Kilimnik says. “I would get two figures maybe once a month, not every day, not every week.” Two figures — meaning two pages? “Two digits,” he says. “Like, ‘Trump 40, Hillary 45.’ That’s all I would get, nothing more. So I don’t understand how this is sensitive data.” Kilimnik was getting his information from former Trump deputy campaign chief Rick Gates, who was directed to send the data to Kilimnik by Manafort. None other than Rachel Maddow once called Gates “Mueller’s star cooperating witness.” I called Gates last week and asked: what was he passing to Kilimnik? “Top-line data, and I want people to understand what that means,” he says. “It was like, ‘Ohio, Clinton 48, Trump 50,’ Or, ‘Wisconsin, Trump 50, Clinton 42.’ The sources were a combination of things like RealClear Politics and occasionally some numbers from [Republican pollster] Tony Fabrizio. But it was all just top-line stuff.” Gates’s story is that Manafort was passing this data back to people like his longtime sponsors, the Ukrainian barons Rinat Akhmetov and Sergei Lyvochkin, because “Paul was just trying to show that Trump was doing well,” as “Paul was just trying to do what he’s always done,” i.e. trying to show how valuable he could be. For those disinclined to believing the Gates or Kilimnik version of events, remember that neither Mueller nor the Senate Intelligence Committee could come up with a different one. Apart from adding “sensitive” to their description (Mueller just called it “internal polling data”), the Senate never offered evidence that Kilimnik was getting more than those few numbers. As to why Kilimnik was sent this information, this is what the Senate had to say: The Committee was unable to reliably determine why Manafort shared sensitive internal polling data or Campaign strategy with Kilimnik. Manafort and Gates both claimed that it was part of an effort to resolve past business disputes and obtain new work with their past Russian and Ukrainian clients by showcasing Manafort's success. Why “sensitive?” The Committee was “unable to reliably determine” why, having no idea what Kilimnik did with those numbers. But they were sure enough it was bad to conclude it represented a “grave counterintelligence threat.” Kilimnik is roughly the twentieth suspect in a long list of alleged secret conduits that across five years have already been tried out and discarded by pundits and investigators alike as “smoking gun” links between Trump and Putin. An abbreviated list: There was a Maltese professor named Josef Mifsud and a young Trump aide named George Papadopoulos, former Trump adviser Carter Page, an alleged “secret server” supposedly pinging between Trump and Alfa Bank, former Trump campaign foreign policy adviser J.D. Gordon, former Attorney General Jeff Sessions, former Trump lawyer Michael Cohen, the Russian lawyer Natalia Veselnitskaya, real estate developer Felix Sater, another Russian who approached Trump people claiming to have dirt on Hillary Clinton named Henry Oknyansky, a Russian firm called Concord Consulting, plus Michael Flynn, Roger Stone, and many others. The pattern with all of these “smoking gun” cases was the same. At first, there would be a great press hullaballoo, complete with front-page media profiles and heated straight-to-camera monologues at the tops of cable commentary shows over “Breaking News” chyrons: Freakouts would be long, but months or years later, narratives would collapse. Ambassador Sergei Kislyak was everyone’s favorite suspect in the summer of 2016 for having done everything from rig the Republican convention platform to turning Sessions into a spy, but then Mueller quietly said Kisylak’s interactions with Trump officials in those months were “brief, public, and non-substantive.” Reporters howled that Christopher Steele was right about Cohen meeting Russian hackers in Prague to help rig the 2016 race, and even claimed (see above) that Mueller was about to release evidence of it any minute, until Mueller said flatly, “Cohen… never traveled to Prague.” The saddest case involved Carter Page. Steele’s Dossier identified Page — not Vladimir Putin, Julian Assange, or even Donald Trump — as the mastermind of the Wikileaks leak: The aim of leaking the DNC e-mails to WikiLeaks during the Democratic Convention had been to swing supporters of Bernie SANDERS away from Hillary CLINTON and across to TRUMP… This objective had been conceived and promoted, inter alia, by TRUMP’s foreign policy adviser Carter PAGE… Steele also had Page negotiating a massive bribe via the oil company Rosneft in exchange for the dropping of sanctions, and acting as the personal intermediary between Paul Manafort and the Kremlin. Page, not knowing he was being spied upon, told an FBI informant that August that he had “literally never met” or “said one word to” Paul Manafort, even going so far as to complain that Manafort never answered his emails. The FBI sat on this information, and wrote up a secret surveillance warrant application that read: Sub-Source reported that the conspiracy was being managed by Candidate’s then campaign manager, who was using, among others, foreign policy advisor Carter Page as an intermediary… It wasn’t until the report by Inspector General Michael Horowitz came out in December of 2019 that the world found out that the FBI not only “did not have information corroborating the specific allegations against Carter Page,” but had covered up Page’s history as an informant for the CIA, very much like the Senate and the Treasury are now covering up Kilimnik’s status as a U.S. State Department source. Kilimnik is just the last person on the list, and he’s conveniently in Moscow, unlikely to ever come back here to defend himself. As such, he’s the perfect fall guy for the marooned-Japanese-soldier-type holdouts on Russiagate who think the collusion narrative is still viable. More from Kilimnik: TK: You were described by the Senate Intelligence Committee as a “Russian Intelligence Officer.” Are you one? Konstantin Kilimnik: I have not had any relationship with any intelligence agency. Not with U.S. intelligence, not the Ukrainian, Russian, Zimbabwean, whatever. I’m a consultant who has worked for many years running elections in Ukraine. I just haven’t had any relationship with any intelligence, and haven’t seen any facts proving otherwise. I think the investigation was so politically charged from the beginning, that they just needed to find a Russian body that they could just put as much dirt as possible on. Ultimately, nobody is going to care, because all the Russians are considered to be bad anyhow, they’re all spies. TK: The intelligence community in the U.S. seems unanimous in their conclusion that Russians interfered in the 2016 and 2020 elections. Did they not? Konstantin Kilimnik: I don’t think Russians interfered… I know that runs counter to all the conclusions of the intelligence community and all that country to all the intelligence and press and all that. And maybe there were other efforts, as well. But, I was not involved in any of that. There was a lot of misinformation, just because the public wanted someone, and I just happened to be that person thrown into the mix. If I had Hungarian citizenship or any other citizenship, of course, people would not have given my name. They just needed the Russian connection, and I happened to be that unfortunate Russian connection. TK: The Mueller report claims an IRI employee believed you were “fired from his post because his links to Russian intelligence were too strong.” Others say you were “moonlighting.” Why did you leave the IRI? Konstantin Kilimnik: I was actually moonlighting. It was a funny story. I was looking for ways to move on, because by 2005 I had been at IRI for 10 years. Some time in mid-2004 an old IRI pal, Phil Griffin, reemerged and proposed a well-paying job of going to Ukraine and writing analyses of what was going on during the Orange Revolution, for Manafort. So, I went there after not having been to Ukraine for over 10 years. I was ecstatic about Kiev and got seriously interested in what was going on politically… Manafort, Griffin and I (as a translator) went to Donetsk in, I think, November 2004 to meet some guy I had no previous knowledge of (who turned out to be Rinat Akhmetov’s closest confidant, Borys Kolesnikov). Manafort and he spoke for several days and got convinced that the “Donetsk guys” were not even close to being thugs they had been portrayed by the Western media to be. I went back a couple of times to translate for these meetings, which I thought were not in any conflict with my work at IRI Moscow. Then, the government in Ukraine changed. [Viktor] Yuschenko became the President, Manafort was in negotiations about the contract, and I almost forgot about my short translation jobs. In April 2005, we were at an IRI retreat, and my boss, director of Europe and Eurasia programs Steve Nix got a tip from the new President’s office that “Donetsk thugs” were looking to hire an American consultant, and that a guy who seemed to work at IRI was helping in the process. Steve, who was very pro-Yuschenko, completely freaked out, and accused me of working for criminals. I said that a) I was doing this in my free time, 2) this did not conflict in any way with my job at IRI Russia, and 3) maybe things are not so straightforward in Ukrainian politics, and there are no guys in black and white hats, but mostly gray hats. He disagreed and demanded I resign, which I did. TK: The Senate claims you met Manafort in Spain in 2017. Did you? Konstantin Kilimnik: I have never been to Spain. (laughter)...I have not been there. They can’t prove that. And yet they’ve inserted that. And yet, that’s central to what they’re saying. Europe is specific place in terms of passports and immigration. To cross the border, you have to give your fingerprints, and upon any re-entry too. If I went to Spain, I can guarantee that, first of all, Europe keeps a record of that. They would say that I have crossed the border at a certain time in a certain place. And that would be okay because, again, it’s all tied to the fingerprints. You cannot get into the EU without this. You can’t fake it. So let them prove it. TK: You’ve been accused of obtaining that “sensitive polling data” for Oleg Deripaska. Was that right? Konstantin Kilimnik: No, Deripaska was a Russian businessman. I actually didn’t have any contact with him. There were Ukrainian businessmen and Ukrainian politicians in 2016 who were in opposition, and who were actually under pressure from Petro Poroshenko’s government. Naturally, for them, any change, opening a channel into the U.S. Government, that for them would have been a great thing. So that’s why they were interested in the outcome of the elections. There was no Russian connection whatsoever. If there were, they would have a record of me talking to Deripaska or visiting him.TK: You never had any contact with Deripaska? Konstantin Kilimnik: No, I haven’t met him since, I’m afraid to be exact, but like 2006, I think was the last time I saw him. I was translating for Manafort. But after that, Manafort spoke to him himself, because Deripaska spoke the language by then. And there was no need for me. Part 2 of my interview with Konstantin Kilimnik is coming later this week. Tyler Durden Wed, 10/13/2021 - 21:25.....»»

Category: blogSource: zerohedgeOct 13th, 2021

Rep. Adam Schiff dismissed Matt Gaetz as a "congressbro" and said it was like "spring break in there" when Gaetz and other Republicans stormed a secure facility

Schiff wrote that once they were "bored and stuffed with pizza," after the disruption, "Gaetz and his confederates left the bunker to vote." Rep. Matt Gaetz, R-Fla., speaks during the House Armed Services Committee hearing on the conclusion of military operations in Afghanistan, Wednesday, Sept. 29, 2021, on Capitol Hill in Washington Olivier Douliery/Pool via AP Rep. Adam Schiff called Rep. Matt Gaetz a "congressbro" over his crashing a deposition in 2019. Gaetz and a group of other Republicans stormed a secure facility being used to depose a witness. Eventually, after ordering pizza, Schiff wrote, "Gaetz and his confederates left the bunker." Rep. Adam Schiff called GOP Rep. Gaetz a '"congressbro" and said "it was like spring break in there" when Gaetz and a group of his Republican colleagues stormed a secure bunker used to handle classified information in the fall of 2019. The congressman recounts the incident in his new memoir "Midnight in Washington."In October 2019, a group of about 30 Republicans, reportedly with former President Donald Trump's blessing, caused a scene deep in the bowels of the Capitol by storming in and occupying the Sensitive Compartmented Information Facility (SCIF). Schiff, the chairman of the powerful House Intelligence Committee, was using the facility to depose Laura Cooper, a deputy assistant secretary at the Department of Defense, as part of its impeachment probe investigating Trump and his dealings with Ukraine. It followed a separate incident earlier where Gaetz had crashed the closed-door deposition of National Security Council official Fiona Hill, arguing that he should be let in due to his membership on the House Judiciary Committee. Schiff issued a stern warning to Gaetz to "please, absent yourself," saying, "you're going to remove yourself" when Gaetz asked if he would be removed. Gaetz's office did not immediately respond to Insider's request for comment on Schiff's characterization of events in the book. "Interestingly," Schiff wrote, "some of the crashers were members of the three committees, but they didn't seem to be aware that they didn't need to crash the proceedings - they could have simply walked through the door. But I could tell they were interested in a brawl, in making a circus of the proceedings, and I wouldn't let them." The GOP lawmakers brought their cell phones into the room to live-tweet and livestream the stampede on social media, a serious breach of SCOF protocol that posed major national security and cybersecurity risks. They also ordered food to the room. "It was like spring break in there, and the rebels soon ordered pizza, but the violation of the security of the space where we keep some of the nation's most closely guarded secrets was no joke," Schiff wrote. The then-House sergeant at arms had to get involved over the security breaches and following the incursion, Capitol Police had to sweep the room for electronic devices.Instead of calling in the Capitol Police to forcibly remove the deposition crashers or canceling it altogether, which Schiff thought would give in to what they wanted, the congressman went back to his office in the hopes that they would tire themselves out. Freedom Caucus leader and then-Rep. Mark Meadows approached Schiff in his office to register his complaints with the process and try to come to a resolution, which went off the rails when Meadows called the intelligence committee's general counsel Maher Bitar "a smart-ass," Schiff said. "Embarrassed, Meadows apologized to Bitar, and the fight went out of him," Schiff wrote. At that point, Schiff and his staff had the idea to ask House Speaker Nancy Pelosi to schedule votes on the floor to get the group, which had by then delayed the deposition by several hours, out of the basement. "Not long thereafter, bored and stuffed with pizza, Gaetz and his confederates left the bunker to vote and never bothered to come back," Schiff wrote.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderOct 12th, 2021

The Saudi royal family gave Jared Kushner gifts worth over $47,000 including 2 swords and a dagger, report says

Kushner eventually paid the US government for the expensive items out of his own pocket after leaving the White House, The New York Times reports. In this May 18, 2018 photo, White House adviser Jared Kushner speaks in the East Room of the White House in Washington Susan Walsh/AP The Saudi royal family gave Jared Kushner nearly $48,000 worth of gifts, the NYT reports. Kushner ended up paying for the value of the gifts, which included two swords and a dagger. The Times uncovered the previously undisclosed presents for an investigation published Monday. The Saudi royal family gave Jared Kushner nearly $48,000 worth of gifts including two swords and a dagger, The New York Times reported Monday. Kushner ended up paying the US government the full $47,920 value that the gifts were worth after he left the White House, The Times said. The value of the items far exceeds the maximum of $415 worth of gifts that US officials are allowed to accept and keep from foreign entities and governments under the Foreign Gifts and Decorations Act. The swords and dagger were among over 80 presents and tokens the Saudis lavished on Trump and his delegation upon their first visit to the country in 2017, which The Times uncovered as part of a broader investigation into the Trump administration's practices of accepting and disclosing gifts from foreign governments. The Times also found that the gifts from the Saudi royals included robes which appeared to made from real white tiger and cheetah fur, sparking a warning from the White House counsel's office that keeping them could violate the Endangered Species Act. The existence of the robes, which the White House didn't disclose until Trump's last day in office, were eventually taken in for inspection by the US Fish and Wildlife Service in summer of 2021, and found to be dyed to look like real cheetah and tiger fur, the Interior Department confirmed to The Times.Men in Saudi Arabia and Yemen have traditionally worn daggers at their waist. Known as jambiya, the daggers carried in belts typically have a curved blade and a decorated hilt, and are often passed down to young men by older male relatives.Kushner, former President Donald Trump's son-in-law and a senior White House advisor, took the lead on shaping and executing the White House's Middle East policy with a particular focus on Israel-Palestine relations. The Trump administration took a decidedly more friendly approach towards Saudi Arabia than its predecessors under former President Barack Obama. Saudi officials devoted significant resources to courting Kushner, given his focus on the Middle East, as an ally to promote their strategic interests and get the White House on their side in disputes in the region. Kushner himself developed a close relationship with the powerful and ambitious Crown Prince Mohammed bin Salman, also known as MBS. Kushner got on a first name basis with the Prince Mohammed, with the two frequently messaging and calling eachother on WhatsApp in direct interactions that concerned US national security officials, The Times reported in 2018. In one fall 2017 trip that Kushner took to Saudi Arabia, the Washington Post's David Ignatius wrote that "the two princes are said to have stayed up until nearly 4 a.m. several nights, swapping stories and planning strategy." The Intercept subsequently reported that Prince Mohammed bragged to the Crown Prince of the United Arab Emirates that he had Kushner "in his pocket." Kushner maintained the relationship and was one of Crown Prince's most powerful defenders after US intelligence concluded he directly ordered the 2018 assassination of exiled Saudi journalist and Washington Post writer Jamal Khashoggi in Turkey. In a 2020 interview with Newsweek, Kushner said the Prince had made "a couple of missteps" but was still a "very good ally." Read the original article on Business Insider.....»»

Category: topSource: businessinsiderOct 11th, 2021

County GOP calls for an audit of the 2020 election results in Florida, a state that Trump won

Last fall, former President Trump defeated now-President Biden in Florida by a 51.2% to 47.9% margin - an advantage of more than 371,000 votes. Former President Donald Trump speaks at a rally at the Sarasota Fairgrounds in Sarasota, Fla., on July 3, 2021. Paul Hennessy/Anadolu Agency via Getty Images The Lake County, Fla., GOP is pressuring state Republicans to conduct an audit of the 2020 election. Republican Gov. Ron DeSantis has reaffirmed the integrity of the state's voting systems. However, Lake County Republicans, including state Rep. Anthony Sabatini, want an electoral review. Republican Gov. Ron DeSantis of Florida and top conservative lawmakers in Tallahassee are being pushed by members of their own party to audit the 2020 presidential election results, despite former President Donald Trump's relatively comfortable win in the state last year.DeSantis, an ally of Trump and a potential 2024 GOP presidential contender, said that Florida "did it right" in administering the 2020 presidential election, but still signed off on restrictive voting measures passed by the conservative-dominated legislature in May.In late September, the Lake County Republican Party, based in a fast-growing and GOP-leaning jurisdiction near Orlando, unanimously approved five resolutions to send to every Florida state lawmaker in calling for a full audit of the election results.Last fall, Trump defeated now-President Joe Biden in Florida by a 51.2% to 47.9% margin - the former president won the state with 5,668,731 votes, while the current president secured 5,297,045 votes, an advantage of more than 371,000 votes.Biden made inroads in populous localities like Duval County, which contains Jacksonville, and Orange County, which is anchored by Orlando, but Trump overperformed with Latino voters in crucial Miami-Dade County, a longtime Democratic stronghold that the party must dominate to counter GOP advantages in the Panhandle and Southwest Florida.The push comes as GOP state Rep. Anthony Sabatini, who represents part of the county in the Florida House, filed House Bill 99 last month, which would allow an "independent" third party to conduct a "forensic" audit of the results.In its current form, Sabatini's bill calls for audits in counties with populations over 250,000 - meaning the proposal would affect many Democratic and minority-heavy jurisdictions like Orange, Broward, Palm Beach, and Hillsborough counties - as well as some GOP-leaning locales like Lake, Brevard, Lee, and Polk counties."It's not about margin of victory," Sabatini recently told Politico. "The fact is that people want total verification of the election results. They want an independent review of the votes."The push comes as GOP legislators, encouraged by Trump, have sought a review of the results in pivotal swing states including Arizona, Pennsylvania, and Wisconsin.Last month, a report from the group Cyber Ninjas, which for conducted a monthslong forensic audit of the results from Arizona's populous Maricopa County, showed that Biden won the state.The former president has pressed GOP lawmakers for similar reviews in Pennsylvania and Wisconsin, states that he won in 2016 but lost in 2020.For months, Trump has alleged, without verifiable evidence, that the election was stolen from him, which has set off a cascade of GOP-led voting restrictions at the state level that have frustrated Washington Democrats who wrote their own federal election reform bills that have so far languished in Congress.GOP Gov. Greg Abbott of Texas has come under fire for defending the push for an audit in the Lone Star State, which the former president won by nearly 6% against Biden. None of the audits conducted so far have uncovered any instances of large-scale voting fraud.In Florida, GOP Secretary of State Laurel Lee said that a "forensic audit" wasn't necessary because county election officials tested machines before the election and conducted random reviews after the presidential contest."Florida's election in 2020 was accurate, transparent, and conducted in compliance with Florida law," she said in a statement about Sabatini's bill. "Florida has already conducted both pre- and post-elections audits, and we are confident in the security and integrity of our 2020 election results."Read the original article on Business Insider.....»»

Category: worldSource: nytOct 9th, 2021

Hidden Bankruptcy: The Reality Behind Uncle Sam"s Inflated Bar Tab

Hidden Bankruptcy: The Reality Behind Uncle Sam's Inflated Bar Tab Authored by Matthew Piepenburg via, Below, we look at The hidden bankruptcy of the US in the wake of even more inflationary forces confirmed by cost-of-living-adjustments, Uncle Sam’s interest expenses, objectively unloved Treasuries and a roaring as well as convenient COVID narrative. Math vs. Double-Speak Given the fact that just about everything coming out of the mouths of debt-cornered policy makers requires a lie-detector and “double-speak” translator, we’ve been arguing since the moment the Fed began peddling the “transitory inflation” meme/myth to think differently. In short: It’s our view that inflation is a snowball growing, not melting. Toward this end, we’ve written and spoken at length as often as we can as to the many converging forces pointing toward rising inflation—from increased governmental guarantees (controls) over commercial bank loans, commodity super cycles to just plain economic realism, as inflation (and hence currency debasement) is the only tool left (beyond bankruptcy, taxation and “growth”) to service otherwise unsustainable debt levels: A hidden bankruptcy. But let us not stop there, as other inflationary storm clouds are on the horizon yet ignored (not surprisingly) by an increasingly clueless financial media. Another Glaringly-Ignored Inflation Indicator—COLA 2.2022 In particular, we are thinking about the U.S. Cost of Living Adjustment (“COLA”) for 2022 which could easily reach 6%, the highest of its kind since 1982. It would seem that the U.S. Social Security Administration, unlike Powell, is aware of inflation, and therefore preparing (i.e., “adjusting”) for the same. As the price for entitlement obligations rises, so too will the level of money printing to pay for the same, a veritable vicious circle for rising inflation. Then there’s simple math. We’ve talked about the Realpolitik of negative real rates as the final and desperate way for debt-soaked sovereigns to service their debt. The signs of this are literally everywhere. If we take, for example, a 1.4% Treasury Yield and subtract a potential 6% COLA increase for Social Security, we get -4.6% real rates, which will be a boon for alternative stores of value like gold and silver or “currencies” like BTC (as well as farmland and high-end real estate, which is continuing to enjoy a debt-jubilee of negative 3% real (i.e., “free” mortgages). The necessary evil of negative real rates also speaks to the ongoing taper debate… Giving Clarity to the Taper Debate As tweets by twits pour across the electronic universe, it’s often important to notice what is not being “tweeted,” such as the interest expense on Uncle Sam’s national bar tab. As the financial world hangs on the edge of its seat to see if the Fed will taper its QE (i.e., money printing) program and send bonds (and stocks) to the floor and rates toward the sky, they’ve ignored some basic math and a key chart. Specifically, we are referring to the chart below representing the true interest expense on the debt bar-tab of a now fully debt-intoxicated Uncle Sam: With central-bank “accommodated” asset bubbles (from stocks to real estate to art) now at historically unprecedented levels, tax receipts flowing into the U.S. coffers from the ever-growing millionaire-to-billionaire class have been rising. This may seem good for that punch-drunk Uncle Sam, but what no one is talking about is that despite even those “capital gain” receipts, the interest expense (i.e., “bar tab”) in D.C. is now an astronomical 111% of those same tax receipts. In other words, U.S. tax income doesn’t come close to even paying interest (let alone that archaic concept known as “principal”) on growing U.S. debt obligations. Can anyone say, “Uh-oh?” Given the stark but ignored reality of unpayable U.S. debt, the implications going forward are fairly clear. First, the Fed will not be able to “taper,” as less QE will mean an even higher interest rate, and thus higher interest expense on debt it still can’t pay at today’s artificially low rates. Stated otherwise, a “taper” would only add helicopters of gasoline to a debt fire that is already burning the Divided States of America. Given the dangers of such a taper, it likely won’t happen because it can’t happen, and this means more money printing and hence more negative real rates creating a hidden bankruptcy ahead, a weaker USD and rising precious metal prices, among others. But What If the Fed Tapers? Alternatively, should the Fed somehow turn hawkish and taper its QE support in the face of a debt forest fire, Treasuries will sell off dramatically, rates will rise, markets will tank, and the USD will surge—not good for Gold, BTC or just about anything else. Does it Matter? But as we’ve also tried to make crystal clear, there is no way the Fed will taper QE liquidity before it sets up a back-channel for even more liquidity from the Standing Repo Facility, Reverse Repo Facility and FIMA swap lines, which are all just “QE” by other names. In simple speak, therefore, the “taper debate” is no debate, as the Fed has many liquidity tricks up its greasy sleeves. In addition to liquidity tricks, the Fed has some ugly bonds to buy. Embarrassing Treasuries As we’ve said so many times, the biggest issue today is unsustainable and embarrassing debt levels requiring inflation (hidden bankruptcy), compliments of policy makers rather than a viral pandemic narrative out of all proportion to its confused scientific truths. COVID has been an all-too timely and convenient pretext for blaming global debt ($300T) or U.S. public debt ($28.5T) on a flu rather than a sordid history of grotesque mismanagement from politico’s and bankers that was in play long before the first headlines out of Wuhan. Furthermore, COVID monetary and fiscal policy measures effectively became a (hidden) pretext for a second market bailout greater in scope (yet better in optics) than the post-Lehman bailout of those otherwise Too Big to Fail banks. In short, the façade (and branding) of a humanitarian crisis allowed a market-saving liquidity rescue (Bailout 2.0) to an otherwise Dead-on-Arrival bond market in late 2019. In case this sounds too controversial to consider, please follow the Treasury market rather than our bemused nouns and adjectives, not to mention our total lack of scientific/medical credentials. Bad IOUs Just like friends don’t accept IOUs from drug addicts, global investors heading into 2020 stopped buying Uncle Sam’s Treasuries. In simple-speak, Uncle Sam just seemed too debt-drunk to trust. As a result, his Treasury bonds, once seen as “safe havens,” were finally seen as “bad jokes”—akin to the paper coming out of equally discredited zip codes like Greece, Italy or Spain. For this reason, foreigners in a nervous 2020 (unlike a broken 2009) had not only stopped buying U.S. Treasuries, they were selling them. Yep. Months ago, smart voices from the Street, including Stan Druckenmiller, were warning about the implications of such a shift in financial consciousness/trust. Druckenmiller’s Astonishment Specifically, Druckenmiller spoke of something he’d never seen in over 40 years as a market veteran. That is, as stocks were tanking in the spring of 2020, he also saw the bond market lose 18 points in one day. This correlated fall in stocks and bonds was not, as everyone “tweeted,” a reaction to the fiscal profligacy of the CARES Act, but more sadly a very new trend by foreigners to get rid of increasingly discredited U.S. IOUs. Folks, this is a critical shift. For over two decades (including during the Great Financial Crisis of 2009), U.S. Treasuries (and the USD) were once seen as “safe” landing places for foreign money rather than a risky bet. Now, instead of seeing an annual average $500B inflow into U.S. bonds, we are seeing annual outflows of $500B… When you tack on a $700B current account deficit in D.C. to a net loss of $1 trillion in Treasury support, whose left to “fill the gap” and buy those unwanted IOU’s? You guessed it: The Fed. And how will they come up the money to cover these purchases? You guessed it again: They’ll mouse-click that “money” out of thin air to create a stealthy, hidden bankruptcy. Needless to say, such realism (i.e., objective math) puts a lot of pressure on the U.S. Dollar as the Fed is forced to create even more money at a record pace to buy otherwise unwanted Treasuries. But what kept the USD from falling in favor by end of 2020, if no one was buying our bonds but the Fed? Well, the short answer is that all that foreign money (from sovereign wealth funds and foreign central banks) once ear-marked for our once-credible U.S. Treasury bonds went instead into those massive U.S. digital transformation companies who benefited most from a locked-down new mad world, namely GOOG, ZOOM and MSFT etc. And how did Druckenmiller describe this shift? Simple. He called it a “raging new mania.” From Mania to Desperate Foreign money once reserved for “safe haven” bonds was (and is) pouring into an already over-sized equity bubble. By July, the USD had peaked, but after a peak comes, well…a fall for the Greenback—all very good for commodities, real estate, growth tech stocks and, of course, precious metals. Back to the “What If” of a Naked Taper But (and this is a very big “but”), what if the Fed were insane enough to taper QE without any back-door liquidity from foreign swap lines and the repo programs? Again, ugly Treasuries would get even uglier, tank in price, sending rates and the USD higher and gold lower, along with a sharp sell-off in risk assets—i.e., corporate stocks and bonds. But again, we don’t think this will happen, because as desperate as central bankers are, they are equally predictable. Predictable Behavior? That is, they know that such a naked taper (i.e., a taper without a back door repo or swap-induced liquidity) would cause rates to spike, and hence Uncle Sam’s bar-tab to default. As the Fed’s Vice Chair intimated last year, US Treasuries (Uncle Sam’s bar tab) are simply too big to fail. This means we can expect more liquidity (QE or repo/swap) and hence more, not less inflation. The Fed is stuck in a self-inflicted dilemma–between letting inflation rip (to partially service America’s bar tab and “declaring” a hidden bankruptcy) or watching markets sink to the bottom of time. For now, which choice do you think these banking, pro-market cabal thinkers will make? The Realpolitik of COVID Meanwhile, and regardless of one’s views on the vaccine mandates, case fatality rates vs. infection rates, or mask wearing vs. mask annoyance, no one needs our amateur medical advice. But looking at COVID as a policy tool rather than as controversial health issue, it’s also fairly clear that the powers that be will be milking this fear-porn-to-policy trick for all its worth for as long as its worth. Why? Again, COVID is a wonderful narrative to justify more debt and more instant liquidity (i.e., fiat monetary expansion) and hence more inflation to inflate away the debt of debt-drunk nations already fatally in debt pre-COVID. Rightly or wrongly, there are already scientists out of the UK (namely Oxford vaccine creator Sarah Gilbert) with more IQ-power and credibility than Fauci or Fergusson (admittedly not a high bar), who are already signaling that COVID will resemble little more than a common cold by next year. This, if true (and no one really knows anyway), would be good for the world—but would the policy makers like this? A post-COVID normal would be a boon to commerce and economic activity, and hence a boon to the velocity of money, which would kick inflation into ultra-high-gear. High inflation will mean higher rates, which scare debt-soaked politicians and central bankers, unless inflation rises higher than those rates and negative real yields become the norm, which, again, we think is the realistic (i.e., only option) for these financial magicians running our governments, lives and central banks. In such a scenario, gold will smile upon the inflation to come. In short, and however we look at it, inflation is the new norm, and negative real rates are no less so, regardless of how the taper or COVID debate plays out. As the future unfolds, gold, whose price is waiting for confirmation of such inflation, will only grow stronger as the “transitory” meme gets weaker by the day. Tyler Durden Tue, 10/05/2021 - 21:25.....»»

Category: worldSource: nytOct 5th, 2021

Transcript: Jack Schwager

     The transcript from this week’s, MiB: Jack Schwager on Trading Wizards, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ RITHOLTZ: This week on the… Read More The post Transcript: Jack Schwager appeared first on The Big Picture.      The transcript from this week’s, MiB: Jack Schwager on Trading Wizards, is below. You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Google, Bloomberg, and Acast. All of our earlier podcasts on your favorite pod hosts can be found here. ~~~ RITHOLTZ: This week on the podcast I get to welcome back the person who was really part of the inspiration for Masters in Business in the first place. Jack Schwager is the author of a new book, “Unknown Market Wizards: The best traders you’ve never heard of,” but this is the fifth or maybe — even if I include the little book — the sixth book of Market Wizards he’s put out. And when I was a — a young stud on a trading desk back in the 1890’s (sic), Schwager’s book, “Market Wizards,” was — was one of the first books I picked up to learn a little bit about the idea of — of markets. And I found the book to be tremendously formative to me not so much because it said, “buy this, sell that,” but it was very revealing about discipline, and risk management, and mental models, and containing your emotions. And that book really was one of the early books that sent me scampering off to learn more about behavioral economics and — and behavioral finance, not so much because he was channeling Tversky and — and Kahneman or Thaler or any of those folks, but it was pretty clear from the successful traders he was interviewing that consensus was problematic, that examining your motivations was really important, that being aware of — of not only your own emotions, but your own biases, and some of your own cognitive deficits in blind spots was really, really important to individual traders. And, you know, I wouldn’t call “Market Wizards” a behavioral finance book, but it certainly touches on so many of the same issues. I find these books to be absolutely fascinating as he’s put them out over the years. The — the first book really was just a pure interview book, and — and it’s evolved over all these decades. I think the first book was ’86 or ’89, and the most recent book was 2020. He not only gives you a summation at the end of each chapter, each trading wizard of — of their rules and — and what guidelines you can pick up from them, but at the end, he summarizes it with something like 46 trading rules that you can learn from these people. And really, he’s made it easier and easier to consume the information I know what he’s trying to do, he wants to educate people. For me, as a young guy on a trading desk, I found it really helpful to sort of — that journey of — of learning what I was doing wrong and why in order to get better was — was really helpful. But I don’t think people have the patience for that these days. I found the book to be really intriguing, and I think you will also. And if you haven’t read the first one or the second or third or fourth, but go back and read that first trading wizards book. It’s really quite astonishing and has held up over time. You could read it today and it looks like it came out last month. So, with no further ado, my conversation with Jack Schwager. VOICE-OVER: This is Masters in Business with Barry Ritholtz on Bloomberg Radio. RITHOLTZ: My special guest this week is Jack Schwager. He has written five books on Market Wizards. And, in fact, I found his first book — I think it was the 1989 “Market Wizards” book to be enormously useful in my first job as a trader on Wall Street. He is also the founder of FundSeeder, a platform designed to matched undiscovered trading talent with capital worldwide. His most recent book is “Unknown Market Wizards: The best traders you’ve never heard of.” Jack Schwager, welcome back to Bloomberg. SCHWAGER: Hey, good to speak with you again, Barry. RITHOLTZ: Same, same. It’s — it’s been too long. Let’s — let’s start out talking about your first “Market Wizards” book, which I’ve told you before not only was it enormously influential to me when I was a trader, but it was part of the motivation for this Masters in Business format of talking to people who achieved a level of accomplishment and excellence, which leads me just to my first question, what — what made you decide to write that first “Market Wizards” book? SCHWAGER: Yeah, so I had the idea actually for several years. At the time, I was a future — Director of Futures Research Department, which is kind of a full-time job on its own. To do a book, you really have to do like commit to nights, weekends. I had — I had done a — a book before the, you know, “A Complete Guide to the Futures Market,” which was like a 750-page tome. And I didn’t want to do that — anything that — like that again. But I want you to have this idea that, gee, wouldn’t it be fun to go — and I knew some great traders. I said, “Wouldn’t it be fun to just kind of do that as the theme of the book?” But it was just a matter of time, and then I got invited by a — to a lunch by some other publisher who had — who (inaudible) the — get that analytical book I wrote, “Hey, you want to do a bunch of analytical books?” And I said, “No, no interest.” But, you know, I’ve been thinking of this and I said, “OK, why don’t you that?” And so, that was the catalyst. And I — I guess I just need a little push to — to get going because I thought it was a good idea. RITHOLTZ: So — so this is now over three decades that you’ve been sitting down with traders, talking to them about their process, their methodology, and where they’ve gone wrong, and where they’ve achieved success. I can’t help, but notice that the world of the 2020’s, at least the trading world, is so very different than the trading world of the 1980’s. How does that impact the — the sort of conversations you have? And how does that affect the methodologies of these different types of traders? SCHWAGER: Yeah. So, you know, that’s a good point. You’re absolutely right. I mean, there’s been — yeah, enormous, you know, really enormous changes. As — as you well know, you’ve been in the business a while as well. But, you know, from the time I did the ritual “Market Wizards” book, which was the late 80’s and talking to people at that point about their careers really going back to late 60’s, 70’s and into the 80’s, but that — you know, their — you know, their — their trading history, you know, is pre –, you know, pre-PCs. You know, of course, we had the futures and we’re basically dealing with bits now, electronic trading. But the — the big changes is this computerization element. And we went from a world where there — where we didn’t have PCs to where not only everybody has a P.C., which is quite powerful and — and has tremendous amounts of data, but you’re also dealing now — well, actually for decades where you have firms, you have taken quantification to the extreme, might have 100 PhDs in math and physics and so forth, you know, trying to — to work in the markets, you know, from — from — from that angle. So — so the — that’s been, I think, the — the really big change plus the electronic trading — the switch from — from bits to electronic trading. So, you know, how does that change? You know, are they enough? For instance, I end up interviewing mostly discretionary traders. We could talk why that’s true. He has a separate engine if you want, but that tends to be the reality. I mean, they are sub-systematic, but they’re mostly discretionary. It turns out that, for the most part, a lot of the approaches really do fall into the — to the same categories, and there’s still a place for the individual discretionary trader. And I — I would say the biggest surprise I had to do this — this last book on “Market Wizards” was I didn’t expect to find people with track records who like those in the first book, somebody, you know, people like the Kovners and the Jones and so forth. And to my amazement, I — I found people — you know, because — and — and I say that because of this great quantification and all this competition, you know, that now exists. And to my surprise, I — I found people whose records were every bit as good, if not maybe as good as any other they found. So that was my surprise, and it basically speaks as evidence that somehow, despite these enormous changes, it’s still possible for the individual creator to — to — who has talent and has a specific methodology to do his works to do enormously well. RITHOLTZ: Yeah, we’re going to talk about some of the specific traders and some of the eye-popping track records that they’ve amassed later. But you — you mentioned Jones — Paul Tudor Jones. Of all the people I recall from the first book or — or one of the early books, he seems to be the lone standout who continues to be active, who continues to trade, and continues to make money. I mean, he was very early to bitcoin and — and I believe he’s still a holder, you know, 20,000 percent later. What makes Jones standout and be so different from his peers? He’s — he’s much more open-minded than — I don’t know, you — you can — you can compare him to Druckenmiller or Dalio or — he seems to be a 30-something, not a 60-something. SCHWAGER: Well, the thing that that struck me about Jones that was different, I guess, is, you know — and I want to say — yeah, I was about to say less cerebral, but that’s not really fair. I mean, I’m sure he’s quite (inaudible), but he is — he was much more sort of active and — yeah, somebody like a — like a Druckenmiller, I didn’t see him trade. I spent a day with him, but, you know, I kind of picture him, you know, more thoughtfully going through in designing and trades of what he traded. But — but, you know, Paul, I remember sitting in his office that he, you know, screamed, you know, while we’re doing the interview, he’s screaming orders left and right. This is a day where there were, you know, phones down for the bits and, you know, so he’s — he’s — he’s doing these orders. He’s going through the screens. He — he was just very — almost manic in the way he trades. So, I had that — that almost physical image of him, you know, trading more so than anybody I — I guess, that I ever interviewed. There’s one difference. And there are certain things I still remember at that interview. He’s — he’s kind of insistence that, you know, every day he’s — he — he stalks for blank slate. So just because he has the position doesn’t mean that that position is still something to be held. So, you know, he talked about wanting to evaluate every position while I have this. Would I — would I still want — do I still want it today? You know, that type of thing, so this — this — this constant renewing of his analysis and assessment of the market. And I think particularly very much attuned, I think, to — to market action — and I’ve been very aggressive all the way. So, I guess those are some of the ways I — at least from my memory of that interview that I — that he struck me as being a bit different. RITHOLTZ: So — so let’s stick with that first book. I mean, the — the list of people you got to sit down with you for a day is pretty impressive. You mentioned Bruce Kovner. We’re talking to Paul Tudor Jones, Richard Dennis, Ed Seykota, Marty Schwartz, Tom Baldwin, Michael Steinhardt, Druckenmiller, I mean, that’s some … SCHWAGER: Yeah. RITHOLTZ: … murderous row of — of fund managers and traders. SCHWAGER: Yeah, and I — it was. And I was lucky to — I guess I didn’t realize how lucky I was because just about everybody I asked agreed. Now, I had some edge there because I knew some traders personally like Michael — well, Michael Marcus who’s — who’s actually in Chapter 1 in that book is not somebody who would have been known weren’t not for the book, but he — he is one of the greats. And he — you know, so I know him personally. You know, we were friends. I actually took his — my first job on Wall Street was vacated by Michael. He was cleaning out his desk when I came in my first day. We talked a little bit. He was going, in quotes, “off to become a trader and, yeah, leaving his analyst job. And I took his analyst job, but he was in New York for two years before you went out to — to Malibu and, you know — and, you know, well, moved permanently there. But while he was in New York, we used to get together for (inaudible) just every couple of weeks, so we had a relationship. So, he — he agreed to do it. We have — not easily, he’s a shy guy, so it took a bit of convincing, and I had a mutual friend who kind of pushed a little bit. But, you know, then he felt satisfied with — with our interview after I spent a day or two there at this — that was the one — that I did actually while he’s out — out in California. And said, “You know, you should” then he — you know, he said, “You should interview Seykota, and I never heard Seykota, but (inaudible) Seykota was his mentor and somebody who he considered the best trader and he knew. And so, he set that up, and then I flew out to — to Seykota. Kovner I knew because Michael had hired Kovner and so I met him through Michael, and I had actually worked because of Michael. He hired me to be an analyst from — you know, remotely why (inaudible) or commodities are going making all that money. And — and so, you know, I — so there were these — I had a bit of a jump because I do some and trade some. And then some of them recommend other traders, yeah. RITHOLTZ: Interesting, really interesting. (COMMERCIAL BREAK) So — so last question — on — on the early book, some — some of these guys have been trading for decades, and the risks that you run into relates to what one of my colleagues described as the — the paradox of experts. People who are experts have their expertise in the way the world used to be in an earlier version of the world that doesn’t exist. When you look around at — at these traders who’ve been at it for a long time, do they have a difficulty in adapting to the new world? I noticed most of the guys you interviewed for the newest book are fairly young. SCHWAGER: Yeah. So — well, of course, you know, if you go back to the original book, you know, a lot — well, most of them, you know, one of these ones I know continued — continued on for — for decades, you know, like the Kovners and — and the Druckenmillers, and so forth, and did — you know, did quite well, and Joe (inaudible). In the case — you know, but I can’t think of an exception, somebody like — like Richard Dennis who was — who had won in the most incredible stories ever, you know, turning literally a sub $1,000 stake. When he was trading in the MidAm Exchange, he’s (inaudible) contract and, at some point, amassing a couple hundred million dollars that got to be one of the great multiplication pitch (ph) of all time. But — but in — subsequently, years after our interview, had — had — had some — some — had problems and — and never continue — besides not continuing, I think had — had losses probably. So not everybody — you know, not everybody necessarily continued forever, but — but I think the majority, you know, continued — continued to adapt the markets. And — and in Dennis’ case, I think it may be an issue of — of the markets, I think, did change. Trend following back, you know, in Dennis’ hay day, which I would say late 60’s through late 80’s, those were kind of glory days for — for trend following. You — you had — had a couple of things working together first because it was before technical analysis became so popular. RITHOLTZ: Right. SCHWAGER: It was before — most of that period was before a lot of the computerization. So, people who were early on — on trend following kind of didn’t have a lot of competition. And also, you have the inflationary 70’s, the U.S. on the giant trends and futures, currencies, and so forth. So, you know, times were very good. When the times became more difficult or — and many more people, yeah, it was just (inaudible) amount of — (inaudible) increase in the number of people using these — those type of approaches, the approach naturally degraded. So, I think it — that was the issue there and — and could explain why somebody like Dennis didn’t continue the way he did, while some of these more discretionary traders like Kovner and Jones did. RITHOLTZ: My big takeaway from the — the early Dennis chapter was all about training traders the way they raised turtles on farms in Singapore. That — that concept that, hey, you could teach anybody how to trade if they’re disciplined and we’ll follow these sets of rules. I was — I was really impressed with that, and that was — I don’t know 25 years ago. Do you think someone like a — a modern version of Richard Dennis could still train traders the way he did? SCHWAGER: I — I have some skepticism there, and — and that’s developed over the years. I kind of — trouble is you — you train somebody — the person you’re training has to be kind of adoptable and amenable, and be a good fit for whatever the methodology you’re training. And, well, my perspective is that to be successful, the method you use is not (inaudible) being trained by somebody, you have to — has to be a method that’s compatible with who you are and how you’re thinking, what’s comfortable? So, if you are — you know, you’re somebody who, let’s say, doesn’t feel comfortable delegating decisions to a systematic approach, somebody can teach you a system, but it’s going to be very difficult for you to follow because you’re always going to want to be second guessing it or — or jumping the gun or not taking signal. So, it has to be compatible with — with — with what’s — what works for you. And — and I think that’s the problem. I don’t think you necessarily can train everybody. Now, at that time that Dennis did it, you have trend following being a — a very effective methodology. So, if people follow the rules, they could be successful, but I think that’s more the exception than the rule. So, you can’t — you surely can learn from a mentor if the mentor is compatible with — with the methodology that fits who you are. RITHOLTZ: Makes a lot of sense. Jack, I was kind of struck by this book, and I’m curious how did you go about it. Was it — was it different versus your prior wizard books? Did — did your methodology change or did you interview process change? Or was it — you know, you have a — a process and you stuck to it? SCHWAGER: Yeah. No, I’ve had — I’ve had the same methodology from the — from the first “Market Wizards” books, so — and it works, so there’s no — if something works, you know, nobody is going to change it. So, my process — but first of all, the actual — as far as the actual, you know, interviews and — and turning into text, when I do the interview — and this is kind of important — is any — I’m sure you could relate to this very well, Barry. I — I try — I — I do what you do really, which I — which I sense you do is have a conversation. So, I don’t go in with a list of questions. And, you know, I’ve been interviewed by people, and that you can tell they have a list of questions. And no matter what you answer (inaudible), you know, there’s no follow-through and it goes … RITHOLTZ: Right. SCHWAGER: … to the next question, right? And it sells very stiff in board, and it is. So, what I try to do in these things is really just literally have a conversation. And there are times there have been interviews where I literally — it could be two hours before I get the first thing that’s of any value. You don’t have that luxury, but I do. There’s a book, not a live interview. RITHOLTZ: Right. SCHWAGER: But — but that’s — that’s — so that’s very important. And — and I — I do have like a list of questions that I know I want to make sure I hit those topics. And after I spend any number of hours, which could be — which could be as little as a few hours in — in a short interview to — to as much as a day or more, then I’ll just check the list and see if I missed anything. But — so that’s one important thing. And the other part of the process that doesn’t change is just the way the interviews are transformed into text. And there — you know, obviously, I’m doing so much so many hours. You know, you couldn’t — any — a lot of these interviews could be a book-long by themselves. But besides that, if I used everything, it would be deadly boring. So, you — you really — what I’m really trying to do is basically extract out everything that it has — is one of two things. One, as something meaningful to say about trading or two, it’s interesting. You know, so it’s one of those things. So — and that’s the material that — that forms the chapter. And then — and then you do a fixing up of, you know, people. The way people speak doesn’t translate well into … RITHOLTZ: Right. SCHWAGER: … into written text as you — as you well know, I’m sure. And you may talk about the same topic in eight different places, and that’s fine if you’re talking, but it’s not fine if you’re eating. RITHOLTZ: Right. SCHWAGER: So, you know, that’s — that’s the basic process. The difference in this book though was the focus. And in prior books, I guess, they’ve been more — more heavy in well-known professional traders, although not necessarily all the time. There’s always been individual traders as well. And the — the most recent wizard book before this one back in, I guess 2012 or so, was “Hedge Fund Market Wizards,” which you can tell by the name is, you know, obviously not individual traders, right? They’re — they’re traders and organizations. So, this — this one was the exact — was — tended to be the exact opposite. It was literally to try to find those people who are trading in a home office, doing extraordinarily well and nobody knows they exist, nobody knows who they are. And — and so that was a difference in this book. RITHOLTZ: So, one of the differences I suspected when I went into reading this book is all of the subjects of your prior books, all the various traders, you know, you could do a search on them. You could — you could read about them. There’s newspaper articles in the days before Google and certainly since search engine has been around, you can find a ton of stuff on each of the people that you interview. I got the sense from each of the chapters in this book that you had a bunch of — of arrows in your quiver, but you didn’t know, which ones you’re going to use because you’re kind of going in a little — a little in the dark. Is that a fair assessment or am I — am I projecting too much? SCHWAGER: You’re projecting too much because, especially since I was doing these individual traders and, you know, it sounds like there’s a public fund out there or something like that … RITHOLTZ: Right. SCHWAGER: … so I — I had to really, really be careful this time about, well, I (inaudible). But I — I had to get the track records. And — and so I knew — you know, I knew what their track records were before I went in. RITHOLTZ: Right. SCHWAGER: And, you know, I — like I’ll give you one example. One of these traders, I got an email. This is about a year before I did the book, you know, saying something like, you know, “Hey, I’m — you know, this is my name and so — you know, and I turned a few thousand dollars into $50 million, whatever,” you know. So yeah, your initial reaction would be, “Sure,” right? But I’m always — I — I think that — you know, people made claims, they now they even — even don’t have to prove it. So anyway, so look, I’m not planning another book at the time I wasn’t planning to do this book. And I said, “But your story sounds very interesting. And if you can confirm it, you know — you know, it would be sounds like it would be a really good fit. And if I do another book, I’ll get back in touch.” It turns out that nine months later, I do decide to do — to do another book and I get back to them. And — and so, you know, a guy, he started trading back, I think, around 2006 and literally got every monthly stakes (ph) improving 2006 forward. So — so I knew — while the story sounds unbelievable, I knew it was — and I — and I — actually, they were — in this particular case, there were — there are Ameritrade accounts, and I have an Ameritrade account. I — even though with the — with the account, you know, (inaudible) look like. So, there was no — there was no surprise there. I — I kind of knew what I — I knew what his track was. I didn’t know what it’d be like or what he’d have to say or anything like that. That’s always the case, but I knew the track record is real. RITHOLTZ: So — so let’s jump into some of the details of — of various traders starting with the first chapter and pretty much the only person you interviewed who has a — has been trading for — for decades, and that would be someone I follow on Twitter who I’ve always been intrigued by named Peter Brandt. What — what drew you to him as a trader? And what makes him so unique? SCHWAGER: Yeah. So, as you said, Peter has a long career. He actually has — his career is broken into two segments. He — and each one is — I — I forget the exact number is, but that’s … RITHOLTZ: Eleven years apart … SCHWAGER: … (inaudible). Yeah, 11 years apart, but each one — each of the segments is, let’s say, 16, 17 years. So, he’s got over 30 years of trading experience. He went co (ph). He stopped trading totally for 11 years in between because, at the end of the first period (inaudible) and gone out of it, and he just — he just decided didn’t want to do it anymore. And then out of the blue, 11 years later, he decided to do and had a — had a second phase rated very well. So — so again it’s over three decades of, you know, of experience and — and so forth. OK. That’s — that’s part, that’s — that’s beginning. The thing that Peter — and — and I should — I should — I should say that — that Peter actually is a friend. Well, I — I knew him personally. One thing that always struck me about Peter was he just had a lot of what I thought valuable things to say about the markets and trading. And I remember him being on — on a — on another podcast and listening to it. And the questions will be asked and I would mentally answer him, and it was striking how similar his answers were. But it’s not just bad, you know, it’s just — I just really relate it to the way he — he looked at — at markets and risk, and had so many — so much good advice and just — just wisdom that — that — that I felt I wanted to capture. Now, Peter is — you know, in his early 70’s. And I — I literally — and he was kind of a catalyst to do the book. At the time, he was in Colorado as I am, and I (inaudible) thought, well, I’ll say to myself, you know, I knew — I knew if I didn’t have a “Market Wizards” book, I wanted that Peter in it. So, he was going — he was going to be moving. I think, well, I might have say to myself (inaudible). I might as well do his chapter. Now, it turns out (inaudible) that around to — to doing it. He had moved and then I — so I end up flying out, you know, to Arizona anyway. But the — the thing about Peter just — just to capture, I wanted to capture his — his market wisdom, the posterity. It’s probably the most straightforward way I can put it. RITHOLTZ: And it’s notable that several other wizards in the new book reference Brandt’s approach to risk management. Forget stock selection, they are just completely impressed with how disciplined he is and how he manages risk, first and foremost. “The — the stocks — the trades that are working out, we’ll take care of themselves,” he says. It’s ones that don’t work out that — that require all your attention. Somebody else said something that really intrigued me. The — the chapter on Jason Shapiro, the contrarian, I love this quote. “There aren’t good traders you can make money on by doing what they’re doing, but there are terrible traders you can make money on by doing the exact opposite of what they do.” Tell us a little about Jason Shapiro. SCHWAGER: Yeah. So yeah, Jason is the — the contrarian in the book, and that’s his nature. I mean, he — if you beat him, he’s just — he has to be, I would say, he has to be argumentative, but he always has to be on the upside. And he admits freely like he — he goes to a party and — and it’s mostly liberal, so he’ll argue the conservative side. It was mostly conservatives, he’ll argue the liberal side. He’s fine doing that. And his — his premise is that because just no absolute black and white, there’s truth on — on some truth on both sides, and — and people who insist everything is, you know, one side of the other (inaudible) is arguing with. But that his nature is always to be arguing and to be counter, so it’d be natural that he evolves into trading methodology that — that — that’s contrarian. And that’s what .....»»

Category: blogSource: TheBigPictureOct 4th, 2021

El Salvador Is Betting on Bitcoin to Rebrand the Country — and Strengthen the President’s Grip

Will the country's adoption of the digital currency help its people, or just its president? When Roman Martinez was growing up in El Zonte, a small coastal village in El Salvador, the American Dream loomed large. Beyond the local fishing industry, which Martinez’s parents worked in, there weren’t a lot of opportunities. “Young people just wanted to leave, to go to the U.S.,” he says. “But now we have a Salvadoran dream.” It’s a dream about Bitcoin. Two years ago an anonymous American donor sent more than $100,000 in the decentralized digital currency, or cryptocurrency, to an NGO that Martinez works for in El Zonte to pay for social programs. As the team began encouraging families and businesses to use Bitcoin, many of the town’s residents, most of whom had never had a bank account, began saving their money in the currency, making gains as its value surged. Curious tourists flooded into the town and foreign businesses set up shop. The project gave El Zonte the nickname “Bitcoin beach,” simultaneously a philanthropic endeavour and one of the world’s largest experiments in cryptocurrency. [time-brightcove not-tgx=”true”] “People with little income, who didn’t have access to a financial system, with $5 worth of Bitcoin they can start building something that can be the legacy they leave to their children,” Martinez says, over video call, wearing a black T-shirt emblazoned with Bitcoin’s orange logo. It was partly El Zonte’s experiment that inspired El Salvador last month to become the first country in the world to adopt Bitcoin as legal tender—alongside the U.S. dollar, which El Salvador has used as its currency since 2001. The Bitcoin law, which came into force on Sept. 7, makes taxes payable in Bitcoin, obliges all businesses to accept it, and paves the way for the government to disburse subsidies in it. The government has built a network of 200 Bitcoin ATMs and a digital Bitcoin wallet app, called Chivo, through which it has distributed $30 worth of Bitcoin to every Salvadoran citizen in a bid to kickstart the Bitcoin economy. Salvadoran President Nayib Bukele claims 2.1 million Salvadorans have used Chivo so far, in a country of 6 million people. Bukele is touting Bitcoin as a way for Salvadorans to reduce the fees they pay to send and receive remittances—which make up 22% of El Salvador’s GDP, mostly from the U.S.—and as a way for the 70% of Salvadorans who are unbanked to access financial services. He’s not alone in advocating for cryptocurrencies as a way for developing economies to bypass a global financial system in which access to services and investment are geared towards the world’s richer countries and individuals. Crypto has achieved its highest penetration mostly in countries where banking systems are costly and complicated to use, or where local economies and currencies are unstable. But critics say making Bitcoin—notoriously volatile and not subject to controls by any central bank—into legal tender is an unjustifiable gamble for El Salvador’s already ailing economy. The $200 million of taxpayer money congress has devoted to the project equates to 2.7% of the government’s total budget for 2021, or almost three times the agriculture ministry’s budget for the year. The uncertainty introduced by the Bitcoin policy has sent the price of government bonds tumbling, and halted negotiations for a deal with the International Monetary Fund (IMF) that the country is seeking to plug a $1.5 billion hole in its public finances. ‘The coolest dictator in the world’ For the President, a 40 year-old with the casual wardrobe and cheeky communication style of a tech entrepreneur, Bitcoin is about more than its immediate economic impact, though. It’s a chance to rebrand El Salvador, from a country known primarily for gang violence and a sluggish economy that drives emigration to the U.S., to an independent, modern crypto pioneer. For young Salvadorans like Martinez, that means creating a Salvadoran dream. For the international community, it’s a rebuke to a world order that casts El Salvador as the backyard to the U.S.—which Bukele has increasingly railed against since taking power in 2019. Instead, he casts El Salvador as an independent hub of innovation, aligned with the anti-establishment crypto community, members of which have flooded and celebrated the country in recent months and will return for a large crypto conference in November. Envisioning the transformation he witnessed in El Zonte taking place across the country, Martinez is excited—despite doubts among the wider population. “We’re used to new things happening in the U.S. or Canada or Europe,” Martinez says. “Now we’ve changed the narrative about El Salvador and started moving forward. Michael Nagle—Bloomberg/Getty ImagesNayib Bukele, El Salvador’s president, speaks in a prerecorded video during the United Nations General Assembly via live stream in New York on Sept. 23, 2021. But there’s another narrative unfolding in El Salvador. Since Bukele’s party, New Ideas, won a landslide victory at parliamentary elections in February, he has moved rapidly to undermine the structures of El Salvador’s democracy. In May, parliament voted to replace opposition-linked judges on the supreme court with Bukele allies, bringing all levers of power under his control. In September—a few days before the Bitcoin launch—the same court ruled that Bukele can run for a second term in 2024, in defiance of El Salvador’s constitution, triggering sanctions from the U.S. He has also stepped up attacks on the media, including launching criminal investigations into news organizations and kicking critical journalists out of the country. Analysts say the Bitcoin experiment is part of Bukele’s proto-strongman trajectory. “He’s fallen in love with his own power and wants to nurture this cool millennial President image through this adventure into the Bitcoin world,” says Tiziano Breda, a Central America analyst at the International Crisis Group, a think tank. It’s working for him, largely. The Bitcoin law has sparked the first major protests of his presidency, with 8,000 people marching in San Salvador on Sept. 15— a significant number of people in a country where street protest is unusual. But the President’s approval ratings still stand above 85%. With that backing, Bukele is deeply dismissive of global concern about his leadership. On Sept 18, he changed his bio on Twitter to “Dictator of El Salvador,” clearly trolling the international press. Then, a couple of days later he changed it again, to “The coolest dictator in the world.” El Salvador’s rapid transformation On the night that Bitcoin launched in El Salvador, Nelson Rauda, a reporter for independent newspaper El Faro, went to a party. At a sleek hotel bar next to an infinity pool overlooking the pacific ocean in the department of La Libertad, crypto enthusiasts and internet celebrities from the U.S., including YouTuber Logan Paul, danced and let off fireworks to celebrate a major moment for the cryptocurrency. Some wore headdresses and carried orange signs featuring Bitcoin’s white B logo. Almost everyone was speaking English. ”The scenery, and the location was a beach in El Salvador, but it could have been anywhere else in the world,” Rauda says. “[The crypto community] want to portray themselves as bringing a future and development to El Salvador through Bitcoin— a kind of white saviorism in that sense. But most of them are not interested in the country, just business.” Bukele’s government welcomes their business. The President claims that if 1% of the world’s Bitcoin were invested in El Salvador, it would raise GDP by 25%. He has offered permanent residency to anyone who spends three Bitcoin (currently around $125,000). He has also highlighted the fact that, since Bitcoin is legal tender, rather than an investment asset, foreigners who move to El Salvador will not have to pay capital gains tax in the country on any profits made if the cryptocurrency’s value increases. To that he adds, in English, “Great weather, world class surfing beaches, beach front properties for sale” as reasons that crypto entrepreneurs should move to El Salvador. This pragmatic, salesman-like tone is something that Salvadorans appear to appreciate from their President. Though he served as mayor of the capital, San Salvador until 2018, Bukele ran for the presidency in 2019 as a political outsider. He used his direct link with millions of followers on social media to pit himself against the right and leftwing parties that had ruled the country since its civil war in the 1980s. That conflict, in which the U.S. played a decisive role by funding opponents of leftist rebels, sowed the seeds of many of El Salvador’s current problems: chronically low economic growth, weak institutions vulnerable to corruption, the world’s worst rates of gang violence and one of the lowest rates of direct foreign investment in Central America. Bukele argued, convincingly, that the postwar governments had failed to meaningfully address those woes over three decades. Since taking office, Bukele has projected an image of ruthless efficiency. In February 2020, he and a group of armed soldiers stormed into parliament in order to pressure lawmakers to pass his budget plan. He has slashed rates of gang violence, with the country’s homicide rate falling from 51 per 100,000 in 2018 to 19 per 100,000 in 2020 (Experts debate whether this is a result of Bukele’s security policy, gang trends independent of him, or a secretive quid pro quo deal he may have struck with gang leaders). He adopted a hardline response to COVID-19, ordering one of the world’s most stringent lockdowns and giving security forces the right to put any rule-breakers in detention centers, a move human rights watchdogs say led to violent repression. The unprecedented popularity Bukele has enjoyed has allowed him to move faster than Latin America observers expected to take anti-democratic steps, such as intervening in the judiciary, Breda says. “For many other sort of authoritarian governments in the region, it took [many] years to do the things that Bukele has done in such a sweeping way. The pace is definitely surprising.” Marvin Recinos—AFP/Getty ImagesIlluminated drones form figures inspired by the Bitcoin logo in El Sunzal Beach, El Salvador, on Sept. 7, 2021. ‘Bitcoin is costing the country dearly’ Those who are most sceptical of Bukele—conservative economists—see his Bitcoin law as new packaging for an old move for populist authoritarian leaders in Latin America. The policy was labelled a “Bitcoin scam” in a Wall Street Journal op-ed. “They’re always trying to pull a rabbit out of a hat,” says Steve Hanke, professor of applied economics at the John Hopkins University and director of the Troubled Currencies Project at the libertarian think tank, the Cato Institute. “They say: ‘We’ve had all these financial problems because of all these irresponsible leaders we’ve had in the past. And now here I am riding a white horse and I’ve got some new gimmick that’s going to solve it all. It’s called Bitcoin.’” Hanke helped advise the Salvadoran government on the country’s dollarization, when it adopted the U.S. dollar as its sole currency in 2001. From 1993 the Salvadoran colón had been pegged to the U.S. dollar on a fixed exchange rate, in a successful effort to keep previously rampant inflation under control. After eight years, the government opted to fully replace the colón with the dollar. That made the economy more stable and lowered the cost of borrowing, but limited Salvadoran governments’ freedom to spend money, particularly in times of financial crisis. Hanke and others have speculated that the Bitcoin move is a first step towards scrapping dollarization altogether and issuing a national digital currency. That would both enable looser public spending, and reduce the impact of U.S. sanctions. But for local economists, the immediate concern is how Bitcoin could complicate El Salvador’s path out of a deep pandemic recession. “Public finances in El Salvador are on a knife edge. Public debt stands at close to 90% of GDP and the government needs to find almost $1.5 billion to close the year and pay its obligations,” says Alvaro Trigueros Arguello, director of economic studies at FUSADES, a San Salvador-based development thinktank. Though El Salvador’s economy is growing—with the Central Bank saying Sept. 29 that GDP is on course to surge by 9% this year—Trigueros Arguello says this is mostly due to a temporary factors, including the reopening of businesses after COVID-19 restrictions and a surge in remittances after the disbursement of pandemic aid packages in the U.S. The Bitcoin rollout has complicated El Salvador’s relationship with the IMF, from which it is seeking a $1 billion assistance package. In June the fund denied a request by El Salvador to assist in its Bitcoin rollout. It cited the lack of transparency in cryptocurrencies, arguing that the difficulty of tracing who makes Bitcoin transactions has facilitated criminal activity elsewhere, as well as environmental concerns about widening the use of Btcoin, which requires vasts amount of energy to produce. Fears over the cryptocurrency’s impact on El Salvador’s macroeconomic stability have stalled negotiations between El Salvador and the IMF, Trigueros Arguello says. “The government needs international credit and because of Bitcoin, it’s not getting it,” Trigueros Arguello says. “Bitcoin is costing the country dearly.” Camilo Freedman—Bloomberg/Getty ImagesDemonstrators hold signs during a protest against President Bukele and Bitcoin in San Salvador on Sept. 15, 2021. The backdrop to El Salvador’s experiment hasn’t undermined the excitement for those who want crypto currencies to be more widely used. Bitcoin Twitter has filled with tweets celebrating how easy it is for Salvadorans to use the currency in places like Starbucks, and praising Bukele’s foresight. “I’m totally excited about what’s happening in El Salvador. [Particularly] the fact that it’s happening in Latin America,” says Cristóbal Pereira, CEO of Blockchain Summit LatAm, a regional conference covering the blockchain technology that underlies Bitcoin, which will host events at El Salvador’s own Bitcoin conference in November. “If people end up using it widely, there’s a good chance other countries and people will end up using it more too.” It’s too early to tell if the buzz will be matched by the significant investments Bukele is hoping for. Analysts say businesses will likely wait and see how the bitcoin rollout affects El Salvador’s economic stability before striking any major deals. Mike Petersen, an American who moved to El Zonte in 2005 and helped found the Bitcoin beach, says he’s received a “a huge flood of [enquiries from] businesses that want to set up shop here, because, for the first time they are realizing, hey, Salvador is a forward looking country.” Those include companies in the Bitcoin space, such as exchanges and ATM networks, but also real estate developers, manufacturing companies and “some lighting and architectural companies that are now outsourcing, hiring architectural students here to do design and and put together bids for them. Because they can pay them in Bitcoin.” Peterson says he doubts that concern about the political situation in El Salvador will have any impact on investors. “Elite media circles are the ones that are more focused on that. I think, in the business climate, people are more pragmatic and practical about things. And they see that Bukele is extremely popular.” What’s not necessarily popular, so far, is Bitcoin. Bukele claims that a third of Salvadorans are actively using Chivo, but it is unclear how many are only using the app to access the initial $30 gift from the government. Media outlets in El Salvador reported long queues for the ATMs, where most people were converting their Bitcoin to take dollars home with them. In the first week of the rollout, one of the country’s largest banks told The Financial Times that the cryptocurrency accounted for fewer than 0.0001 % of its daily transactions. Rauda, the El Faro reporter, says he knows “no one” who’s using Bitcoin on a regular basis. Teething troubles The government gave itself just three months after parliament approved its Bitcoin law in June to introduce the currency, leading to a series of technical issues with the Chivo wallet app. Crypto bloggers reported cash taking days to show up in their Chivo accounts after being transferred by other users, bugs making the app unusable, and an initial inability to transfer any sum below $5. Bukele, who took to Twitter throughout the launch to offer emoji-laden tech support messages, claimed most of the technical problems were resolved within a few days. The bumpy rollout helped trigger a 10% fall in the value of Bitcoin against the day it became legal tender, and further falls since. On Sept. 20 Bukele said his government had “bought the dip” and acquired 150 more coins, bringing the country’s total holding to 700 (around $22 million). Chaotic rollouts of new government programs are not unique to El Salvador. But some in the Bitcoin community have concerns about the structure of the country’s experiment, beyond the initial hiccups. Marc Falzon, a New Jersey-based Bitcoin YouTuber who visited San Salvador to document the rollout, says he became concerned about Salvadoran taxpayers footing the bill despite opposition to the policy, and about Article 6 of the Bitcoin law, which says that all economic actors in the country must accept Bitcoin if they have the technical capacity to do so. “Forcing people to accept a decentralized currency from a centralized authority ebbs away at the legitimacy of not just Bitcoin, but cryptocurrency in general,” he says. Supporters of the project point out that Salvadorans don’t have to keep their money in Bitcoin if they don’t want to, with the government guaranteeing their ability to transfer them into U.S. dollars via its national development bank and a range of services allowing businesses to make that transfer automatically. But Falzon says that the positive image of EL Salvador’s rollout generated by Bitcoin influencers on Instagram and Twitter didn’t reflect what he saw. In a health store near his hotel, for example, the shopkeeper said she couldn’t afford to restock because so many Bitcoin payments made by customers had simply never shown up in her Chivo app account. “For people in the Bitcoin and crypto community, El Salvador is a ‘told you so moment,’ proof that this isn’t just a fad. And I think that in that enthusiasm, we can lose sight of both the bigger picture—in how future countries may start to follow suit—and also of the individual experiences of the people that are in these countries.” Some individuals are happy though. Martinez, the community activist who grew up in El Zonte, says the town’s experience suggests hesitancy to use Bitcoin—and opposition to the Bitcoin law—will fade as Salvadorans become more used to the technology, and become widespread within a few years. He’s not concerned, he says, by how Bitcoin may play into Bukele’s larger political project. “As an NGO, we’re apolitical. We support anything that can make a better El Salvador. And I think we’re walking towards a better future.”.....»»

Category: topSource: timeOct 1st, 2021

Pope Francis is attending, but Greta Thunberg might boycott. Here"s everything you need to know about COP26 - the most important global event this fall

COP26 convenes global government and business leaders to talk about the impact of climate change, and to agree a path forward. FILE PHOTO: David Attenborough speaks during a conference about the UK-hosted COP26 UN Climate Summit, at the Science Museum in London Reuters The United Nations Climate Change Conference, known as COP26, is convening in November in Glasgow, Scotland. The summit is where countries around the world will put forward new climate change commitments. Key talking points will include carbon markets regulation and net-zero financial responsibilities. See more stories on Insider's business page. Dubbed a "turning point for humanity," COP26 is the upcoming climate summit set to pave the way for our path to net-zero.From November 1-12 in Glasgow, Scotland, world leaders - and famous faces from David Attenborough to Pope Francis - will come together to negotiate how countries around the globe can tackle the challenges posed by global warming. What is COP26?COP stands for Conference of the Parties, and this year marks the 26th global gathering - hence, COP26. Since 1995, national governments from across the globe have come together at COP to negotiate deals that will provide a worldwide strategy for combatting climate change.What makes COP different from other climate summits? "Unlike other environmental summits, COP is both global and inclusive," explains Chris Venables, head of politics at environmental think-tank Green Alliance. The system is "one country, one vote," meaning everyone has their say, creating space for an equitable conversation.Overseen by the United Nations Framework Convention on Climate Change (UNFCCC), it brings together delegates from around the world, including heads of state, policymakers, and climate scientists. COP also engages with the public via businesses, youth and faith groups, academics, and civil society. Who else will be there?Some 20,000 accredited delegates will visit Glasgow, as well as leaders of all signatories, including US President Joe Biden. Though the UK government has pledged vaccines for all delegates, it is unclear exactly who is going to make it there in November. "Making the event accessible is crucial as it ensures delegates from developing countries, and especially climate-vulnerable countries, will have their voices heard," says Venables. Because of vaccine inequality between wealthy and poor nations, some people, such as Greta Thunberg, are considering boycotting.What does COP aim to do?Put simply, reduce carbon emissions. The world aligns at COP to determine goals for combating climate change in a timeframe that allows ecosystems to adapt naturally."The aim is to stabilize greenhouse gas concentrations in the atmosphere to prevent dangerous levels of global average temperature rise," says Venables. "COP is a critical opportunity to take stock of global progress and finalize rules that haven't yet been agreed by governments," adds Shyla Raghav, vice president of climate change at Conservation International, who has been following the proceedings closely. She says reaching a consensus is crucial if we want to combat climate change. Why is this year's COP so important?The Paris Agreement was signed at COP in 2015. As a result of that agreement, each country attending this year will put forward a Nationally Determined Contribution (NDC) outlining their commitment to reducing emissions. "At COP26, countries have to upgrade their national climate plans for the first time since presenting them in Paris," explains Venables.These NDCs may prove contentious as different countries push for targets that suit their own agendas, and could make or break our chances of limiting global warming to between 1.5 to 2 degrees Celsius above pre-industrial levels (the number agreed upon in Paris).We're coming up against a global stock take, explains Raghav. "We will add up these contributions and assess their fairness." In 2023, a subsequent report will indicate whether we are on track to reduce emissions in time.What should I look out for at COP26?From nature-based solutions to COVID-related setbacks and how to mitigate our way to net-zero, there's a lot on the COP26 agenda.Article 6, the last section of the Paris Agreement to be finalized, will be a big one to watch. It includes a common framework for regulating international carbon markets that could bring additional public and private finance to emission reduction efforts. This would make mitigating the effects of climate change more cost effective.Coal will also make a big appearance in negotiations. But global commitments on phasing it out will prove contentious to countries dependent on it, such as China, India, and Russia, according to Venables.Countries will also discuss who should bear the greater financial burden in future efforts.Not only may developing countries, economically overburdened by the pandemic, ask for help financing their NDC requirements, but many countries feel the cost of addressing climate change should weigh heaviest on industrialized countries who are historically most responsible."Developing nations will ask for a flow of financing and tech to help meet their commitments," explains Raghav.With 36 days until the event kicks off, activists say the best- and worst-case scenarios hinge upon two things: delivering $100 billion in climate finance for developing countries and securing meaningful upgrades to countries' national emissions reductions plans. Without that, the prospects look bleak.Read the original article on Business Insider.....»»

Category: smallbizSource: nytSep 30th, 2021

Incentives Pivot From Greed To Fear

Dear fellow investors, Q2 2021 hedge fund letters, conferences and more Bond Investors’ Pivot From Greed To Fear The talk of inflation today looks much like housing did in 2007. Evidence is mounting everywhere that this is a real long-term problem that is only getting worse. You can read this in the media, but yet […] Dear fellow investors, .first{clear:both;margin-left:0}.one-third{width:31.034482758621%;float:left;margin-left:3.448275862069%}.two-thirds{width:65.51724137931%;float:left}form.ebook-styles .af-element input{border:0;border-radius:0;padding:8px}form.ebook-styles .af-element{width:220px;float:left}form.ebook-styles .af-element.buttonContainer{width:115px;float:left;margin-left: 6px;}form.ebook-styles .af-element.buttonContainer input.submit{width:115px;padding:10px 6px 8px;text-transform:uppercase;border-radius:0;border:0;font-size:15px}form.ebook-styles input.submit{width:115px}form.ebook-styles .af-element.privacyPolicy{width:100%;font-size:12px;margin:10px auto 0}form.ebook-styles .af-element.privacyPolicy p{font-size:11px;margin-bottom:0}form.ebook-styles .af-body input.text{height:40px;padding:2px 10px !important} form.ebook-styles .error, form.ebook-styles #error { color:#d00; } form.ebook-styles .formfields h1, form.ebook-styles .formfields #mg-logo, form.ebook-styles .formfields #mg-footer { display: none; } form.ebook-styles .formfields { font-size: 12px; } form.ebook-styles .formfields p { margin: 4px 0; } Get The Full Ray Dalio Series in PDF Get the entire 10-part series on Ray Dalio in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues (function($) {window.fnames = new Array(); window.ftypes = new Array();fnames[0]='EMAIL';ftypes[0]='email';}(jQuery));var $mcj = jQuery.noConflict(true); Q2 2021 hedge fund letters, conferences and more Bond Investors’ Pivot From Greed To Fear The talk of inflation today looks much like housing did in 2007. Evidence is mounting everywhere that this is a real long-term problem that is only getting worse. You can read this in the media, but yet security prices don’t reflect how damaging this may be. Bond investors’ pivot from greed to fear could crush seemingly safe investments. Equity investors could be hurt by the stock market failure of an elongated equity euphoria that finally got the dumbest investors on board (millennials). This would be damaging to net worth for individuals and institutions alike. It just goes to show how powerful incentives are. What we will learn is how swiftly they can change. When we think of the power of these incentives, we are reminded of a talk Charlie Munger gave at Harvard in the 1990’s. Over the years, Munger has captivated investors with his plain-speaking common sense. He would explain it as his determination to practice ignorance avoidance. Charlie pointed out in his Harvard talk that incentives increase good or bad behaviors, based on the incentive structure. One of my favorite cases about the power of incentives is the Federal Express case. The heart and soul of the integrity of the system is that all the packages have to be shifted rapidly in one central location each night. And the system has no integrity if the whole shift can’t be done fast. And Federal Express had one hell of a time getting the thing to work. And they tried moral suasion, they tried everything in the world, and finally, somebody got the happy thought that they were paying the night shift by the hour and that maybe if they paid them by the shift, the system would work better. And lo and behold, that solution worked. The Value Of Incentives Understanding incentives is hugely valuable for investors. When interests align, it can cause powerful change in a business, an industry, investment returns or in life. At Smead Capital Management, one of our criteria speaks to this directly: strong insider ownership. We think this criterion aligns our interests with the people that run a company. We admittedly know that you can’t always get this in every business you own. For example, the bigger the company and the older it is, the less likely you are to find it. All things equal, you’d want to see strong insider ownership, so that you know the risk to your net worth is the same for the people running their businesses. In the modern era of handing stock compensation out like candy to executives in the name of incentive and alignment, understanding the executive ownership and its genesis continues to be a growing field of study for us and our investors. One of the most common questions we receive from our current and prospective investors is around inflation. As investors at Smead, we believe we are staring at an era of price increases. Why isn’t the bond market pricing any of this in? Further, looking at Treasury TIPS (Treasury Inflation-Protected Securities) or breakeven rates, why are there no implied problems with inflation? Lastly, why isn’t inflation being priced into equity markets if this is truly coming down the pike? We believe all of these questions should be pondered deeply. Now let’s flesh out the incentives for the participants. Is it in the best interest of the investors or the issuers in the bond market to recognize higher inflation? No. Investors would lose money as bond prices would likely decline and the issuers don’t have an interest in paying higher rates. Does the stock market, both its investors and its issuers, have an interest in recognizing higher inflation? No. Investors would wake up with a situation where fewer new investors may be interested in paying today’s valuation for stocks with today’s news of inflation causing a change in what someone may pay. Further, companies would be valued lower based on this, in aggregate, leaving the stock compensation schemes of the U.S. stock market needing adjustments as executives wake up to less personal incentives from lower stock prices. Many people can understand this incentive structure, but what investors really want to know is, “when?” You can know whether. You can’t know when. However, we know that investors can, for periods of time, look beyond the facts of the situation to come up with erroneous prices under incentive structures that don’t align with correct prices. To get a hint of why timing is so hard, especially at extremes like today, we would direct investors to an excerpt from Michael Lewis’s book, The Big Short. Michael Burry and his lawyer, Steve Druskin, were buying insurance on CDOs to profit from their default. These were synthetic securities that would make money if mortgages began to fall behind on their payments and default. The odd thing to them was the news of hedge funds failing, that owned mortgage paper, and homeowners in trouble were already being written about in the media. “One of the oldest adages in investing is that if you’re reading about it in the paper, it’s too late,” he said. “Not this time.” Steve Druskin was becoming more involved in the market—and couldn’t believe how controlled it was…It was as if Wall Street had decided to allow everyone to gamble on the punctuality of commercial airlines. The likelihood of United Flight 001 arriving on time obviously shifted—with the weather, mechanical issues, pilot quality, and so on. But shifting probabilities could be ignored, until the plane did or did not arrive” This was an extreme in the belief of the housing market never going down. We know all these stories from Mr. Lewis’s book and the movie that followed. Why did the incentives eventually change, despite the evidence that could be seen long before? Incentives did broadly change. Bank CEOs went from wondering how much money they were making, to whether or not they would survive. Investors went from being as long real estate as they had ever been on borrowed money, to walking away from homes at record levels and sending housing into a depression. To put into the words of a contrarian investor, incentives pivoted from greed to fear. Fear stock market failure, Cole Smead, CFA The information contained in this missive represents Smead Capital Management’s opinions, and should not be construed as personalized or individualized investment advice and are subject to change. Past performance is no guarantee of future results. Cole Smead, CFA, President and Portfolio Manager, wrote this article. It should not be assumed that investing in any securities mentioned above will or will not be profitable. Portfolio composition is subject to change at any time and references to specific securities, industries and sectors in this letter are not recommendations to purchase or sell any particular security. Current and future portfolio holdings are subject to risk. In preparing this document, SCM has relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources. A list of all recommendations made by Smead Capital Management within the past twelve-month period is available upon request. ©2021 Smead Capital Management, Inc. All rights reserved. This Missive and others are available at Updated on Sep 29, 2021, 9:58 pm (function() { var sc = document.createElement("script"); sc.type = "text/javascript"; sc.async = true;sc.src = "//"; sc.charset = "utf-8";var s = document.getElementsByTagName("script")[0]; s.parentNode.insertBefore(sc, s); }()); window._F20 = window._F20 || []; _F20.push({container: 'F20WidgetContainer', placement: '', count: 3}); _F20.push({finish: true});.....»»

Category: blogSource: valuewalkSep 29th, 2021

Sen. Joe Manchin seeks to slow down $3.5 trillion infrastructure bill as Democrats move forward with the legislation in critical phase

"What's the need? There is no timeline. I want to understand it," Manchin said of the urgency of a reconciliation bill in an interview with Politico. Sen. Joe Manchin of West Virginia. AP Photo/J. Scott Applewhite Sen. Manchin told Politico that "there is no timeline" for the $3.5 trillion infrastructure bill. The senator's position is at odds with Democratic leaders, who want to see both infrastructure bills signed into law this year. Manchin has expressed reservations about the cost of the reconciliation bill, which would be passed on a party-line vote. See more stories on Insider's business page. Democratic Sen. Joe Manchin of West Virginia on Thursday insisted that "there is no timeline" for the $3.5 trillion infrastructure bill, a stance that threatens the momentum that President Joe Biden and party leaders have sought to build as they push for votes on the legislation next week.Biden and Democratic leaders, angling for passage of the gargantuan reconciliation package that would provide critical investments in healthcare, childcare, and climate initiatives, have pleaded with moderate holdouts to identify a figure that could possibly attract their support for the bill.While many of Manchin's colleagues are hoping that the influential senator will point out what he'd like to see cut from the bill, he is in no rush to take such action, as he feels that funding for spending programs is sufficient to last through the end of the year."What's the need? There is no timeline. I want to understand it," Manchin expressed in an interview with Politico. "I don't think anything runs out. Right now, we've got good nutrition for children, a lot of things are covered right now clear [into] next year."The senator's statement makes it extraordinarily difficult to foresee a reconciliation deal being put together ahead of a House vote on the $1.2 trillion bipartisan infrastructure package, which could come as soon as Sept. 27, a self-imposed deadline that was set last month after the successful passage of the bipartisan bill that easily passed in the Senate.In the evenly-divided Senate, Democrats need every member to be on board for the reconciliation package to pass, and Manchin - along with fellow moderate Kyrsten Sinema of Arizona - wield incredible influence over the bill, which is slated to include tax increases on the wealthy and tuition-free community college, among many other items.Manchin does not have the same sense of urgency as House Speaker Nancy Pelosi, who must contend with unrest about the larger reconciliation package from moderates who want to pass the $1.2 trillion bipartisan bill regardless of the larger bill's fate and progressives who feel that the larger bill should be passed in tandem with the bipartisan bill.However, the senator has signaled a willingness to compromise on the reconciliation bill, versus outright opposition to the sweeping legislation.Democratic Sen. Jon Tester of Montana, a fellow moderate, said as much to Politico."I don't think Joe is unworkable, I think, look he's fiscally conservative, OK? So, $3.5 trillion is a lot of money, it shakes into his soul," he said to the publication. "We can get to a point where we're all happy. Maybe not tickled, but happy."Independent Sen. Bernie Sanders of Vermont, the chairman of the Budget Committee, who has insisted that the $3.5 trillion reconciliation package should remain at that level, said earlier this week on CBS's "Face the Nation" that he expects the party "to come together again and do what has to be done."Manchin, in admitting that his "strategic pause" of the $3.5 trillion framework is largely at odds with the rest of the Democratic caucus, said that he wanted to further "understand" the pacing of the bill."I've always said pause. I thought because this is such a big thing. Right now I can tell they're not moving for a pause and looking for a pause," the senator said. "I don't know what the time frame is, but I want to understand it right now before I do anything." Democratic Sen. Joe Manchin of West Virginia speaks during a news conference with a group of bipartisan lawmakers to unveil a proposal for a COVID-19 relief bill. Caroline Brehman/CQ-Roll Call, Inc via Getty Images 'Everybody knows me pretty well'As is the case with many substantive pieces of legislation, Manchin has been heavily courted by his colleagues in the Senate caucus, along with Biden, who has met him twice in recent days.However, according to Politico, Senate Majority Whip Dick Durbin of Illinois isn't "actively whipping" Manchin, while Senate Majority Leader Chuck Schumer of New York continues to speak highly of the West Virginian."Everybody knows me pretty well. My mind is my mind, not theirs," Manchin told the publication. "I wouldn't think I could do anything to change their minds. I think Bernie [Sanders] is sincere, he has a very social mindset and he is who he is to the core. I hope he'll respect me. I'm not anywhere near that."GOP Sen. John Cornyn of Texas was skeptical that Manchin will broker a deal to allow the reconciliation bill to pass in the coming weeks."I'd be surprised if he cut a deal that allowed him to do it this fall," he said. "He's been consistent."Senate Republicans, led by Minority Leader Mitch McConnell of Kentucky, are vehemently opposed to the Democratic reconciliation package - and are also refusing to support a short-term government funding bill, which Democrats have paired with an increase in the federal debt ceiling.While Sinema has also balked at the cost of the reconciliation bill, she has signaled support for climate provisions that Manchin has opposed.A Democratic senator who spoke anonymously to Politico said that Manchin and Sinema are taking different approaches in tackling the bill."Kyrsten recognizes there's a timeline, there's got to be a process," the senator told the publication, while Manchin is "coming at it from a values perspective first and saying 'I am happy to support this or this or this but not in this way or not at this time.'"Despite Manchin's continued skepticism of the reconciliation bill, Democrats are confident that he will join them in passing the legislation, as he did with the $1.9 trillion COVID-19 relief package that passed along party lines in March."None of us like artificial deadlines and he doesn't make a decision before he needs to," Sen. Tim Kaine of Virginia told Politico. "When we need him, he's there. And I would be surprised if that were any different this time."Read the original article on Business Insider.....»»

Category: smallbizSource: nytSep 25th, 2021

President Biden nominates 2 top campaign bundlers for ambassadorships to Sweden and Belgium

Erik Ramanathan and Michael Adler "bundled" at least $100,000 each for Biden's campaign, and have now been nominated to top diplomatic posts. President Joe Biden speaks at the White House on August 16, 2021. Anna Moneymaker/Getty Images Biden tapped 2 more top "bundlers" who contributed at least $100,000 to his campaign for ambassadorships. Biden chose Erik Ramanathan for Ambassador to Sweden and Michael Adler for Ambassador to Belgium. Presidents often political allies for key diplomatic posts, a practice increasingly under fire. See more stories on Insider's business page. The White House announced on Wednesday that President Joe Biden is nominating two top campaign contributors for ambassadorships in Europe, continuing a long-running practice of presidents appointing political allies to diplomatic posts.Biden nominated Erik Ramanathan, Chairman of the Board of Directors of Heluna Health, to be US Ambassador to Sweden. The president also announced the nomination of Michael Adler, a Florida real estate developer, to be US Ambassador to Belgium.Both men make the list of Biden's top campaign "bundlers" - individuals who raised more than $100,000 for the campaign and it's affiliated political committees during the 2020 campaign.Along with the two top campaign contributors, Biden also announced the nomination of Calvin Smyre, the longest-serving member of the Georgia state legislature and an early ally of Biden's, to be ambassador to the Dominican Republic.Adler, who also served as national finance chair for Biden's 2008 campaign, told Forward in January that he wanted to be Biden's ambassador to Israel, though that post eventually went to Thomas Nides. "I'm not interested in grabbing power because I can grab it. I'm interested in serving this nation and this president," he said at the time.Ramanathan was one of several top Democratic bundlers who tried to draft Biden to run for President in the fall of 2015, as eventual 2016 Democratic nominee Hillary Clinton's campaign was already underway. "I want to see this play out. I want Biden in the race," he told the Wall Street Journal that year.Neither nominee has any formal diplomatic experience.The practice of nominating big donors and political allies to ambassadorships, while not new, has come under recent scrutiny. Under President Trump, the number of donors appointed to plum ambassadorships soared, with 43.5% of Trump's ambassador picks being political appointees according to the American Foreign Service Association.In 2020, Elizabeth Warren made eliminating the practice a central part of her plan to "rebuild the State Department.""As a principle, I strongly disagree with the idea that, if you give money during the campaign, you'll be rewarded with a job later," Michael McFaul, a former US ambassador to Russia, told POLITICO last year. "Most certainly at this moment in time, when morale has been incredibly eroded in the foreign service, it doesn't send the right signal."Read the original article on Business Insider.....»»

Category: topSource: businessinsiderSep 23rd, 2021

How Gavin Newsom beat back the California gubernatorial recall effort

Newsom last week survived the biggest test of his political career, but with nearly all of the votes in, the results reveal some intriguing dynamics. Gov. Gavin Newsom speaks to the press while visiting Melrose Leadership Academy in Oakland, Calif., on September 15, 2021. Jane Tyska/Digital First Media/East Bay Times via Getty Images Democratic Gov. Gavin Newsom of California last Tuesday survived the biggest test of his leadership by rallying voters against a gubernatorial recall election fueled by grievances over COVID-19 restrictions, housing affordability, uneven economic opportunities, and homelessness.While the eventual recall was a blowout in the governor's favor, there were underlying issues that seriously threatened his standing earlier in the summer - the lack of urgency among Democratic voters, minimal engagement with the state's growing Latino population, and the conservative buzz surrounding radio talk show host and first-time political candidate Larry Elder, who was able to channel the frustrations of millions of state residents.As California continues to count its remaining ballots, a fuller picture is emerging of Newsom's win.With 92% of the vote in, voters rejected the recall effort by a 63% to 37% margin, nearly identical to the 2018 gubernatorial election results, when Newsom defeated Republican businessman John Cox by a 62% to 38% spread.But the huge victory also exposed Newsom's vulnerability in not connecting with more voters on a personal level.Dan Schnur, who teaches political communication at the University of Southern California and the University of California-Berkeley, pointed out that Newsom was able to win despite his fairly average standing among many Democratic voters."The final results obscure the fact that he's never been particularly well-loved, even by the base of his own party," he said.This account, based on interviews with California political observers and the recount data, focuses on the governor's broad victory and what it says about the future of Golden State politics. President Joe Biden speaks during a rally in support of California Gov. Gavin Newsom at Long Beach City College on September 13, 2021. David McNew/Getty Images Newsom overcame complacency and turned out Democrats California has become such a Democratic stronghold at the presidential level that now-President Joe Biden's win over former President Donald Trump (63.5% to 34%) last fall was a foregone conclusion.While Biden received over 11 million votes - a record for a presidential candidate in the state - Trump received over 6 million votes, which was the highest number of votes for any Republican candidate in state history.Democrats currently make up 46.5% of all registered voters in California, while Republicans make up 24% and independents comprise of 23%, according to the Public Policy Institute of California - which by the numbers would indicate a huge advantage for Newsom.However, voter turnout is key, and tepid party support, combined with Republican enthusiasm about Elder's candidacy, threatened to derail Newsom, especially as he struggled to connect with some of the very same voters who sent him to the Governor's Mansion nearly three years ago.In a Berkeley-IGS survey that was released in July, registered Democrats, by a nearly 30% margin, were less likely than Republicans to demonstrate a high level of engagement in the recall election - one of many polls that caused consternation among Democratic leaders.Conservatives, incensed by what they felt were heavy-handed COVID-19 restrictions that hurt small businesses and stifled the economy, were animated over potentially recalling Newsom, a former San Francisco mayor and lieutenant governor. The July Berkeley survey showed that 33% of the voters who were likely to vote in the recall would be Republicans - a troubling sign for the governor.After recalibrating and partaking in a rigorous campaign schedule, including rallies with President Joe Biden and Vice President Kamala Harris, Newsom was able to to change the dynamics of the race by emphasizing Elder's opposition to key issues including abortion rights and COVID-19 vaccine mandates. California gubernatorial recall election candidate Larry Elder speaks at his election night party in Costa Mesa on September 14, 2021. ROBYN BECK/AFP via Getty Images Larry Elder was not an appealing candidate to non-RepublicansIn the previous California gubernatorial recall election in 2003, then-Democratic Gov. Gray Davis was booted from office and replaced with Republican Arnold Schwarzenegger.Schwarzenegger - a Hollywood leading man famous for action movies like "The Terminator" represented a moderate wing of Republicanism that was still influential in the state at the time - won over his party and peeled off independents and even some Democrats. This year, Democrats overwhelmingly opposed against the recall on the first ballot question and largely abandoned picking another candidate to become governor if the recall was successful.Elder, a fierce advocate of small government who opposed the minimum wage, dismissed gender wage gaps, balked at gun-control measures, and supported charter schools and school choice, was unable to garner much support beyond the Republican base, which comprised of roughly 25% of the electorate in the recall election.According to exit polling conducted for CNN and other outlets by Edison Research, 94% of Democrats opposed the recall, while 89% of Republicans supported it, with independents narrowly rejecting the effort by a 52%-48% margin.While Elder currently sits at 47.8% of the vote, having earned over 3.1 million votes on the ballot question designating a gubernatorial successor, the rejection of the recall effort at the top of the ballot kept Newsom in office.Schnur told Insider that Elder's positions allowed Newsom to effectively use Trumpism as a political foil."Newsom was originally having some trouble framing this as a campaign against Donald Trump, primarily because Trump wasn't on the ballot or in the White House," he said. "Elder gave Newsom a way of framing the anti-Trump argument in the present tense. Instead of talking about the former president, he was able to talk about something that voters were facing now, and that helped him immeasurably." A sign at the Modoc National Forest. Bernard Friel/Education Images/Universal Images Group via Getty Images California has 'shades of blue in many communities of red'The modern image of California is largely shaped by its glittering Los Angeles skyline and the tech corridors of the San Francisco Bay Area, but the state is much more conservative in its interior stretches, where the election results of many counties largely mirrored the 2020 election.In rural northern California, counties like Lassen (84%), Modoc (78%), Tehama (69%), and Shasta (67%), voted overwhelmingly in favor of the recall - and subsequently these counties strongly backed Elder as their top choice in the second ballot question.While Elder's strong conservative views, including his opposition to broad COVID-19 restrictions, appealed to many in these counties, as well as a significant number of residents in the state's exurban communities, it wasn't enough to appeal to a wider audience - which has been the dilemma of the California GOP for years.The state party, which launched the careers of former Presidents Richard Nixon and Ronald Reagan, has not won a gubernatorial race since Schwarzenegger's reelection bid in 2006.Mindy Romero, the founder and director of the Center for Inclusive Democracy at the University of Southern California, told Insider that while the state's political ideology is more multifaceted than its reputation suggests, the GOP in recent years has continued to elevate candidates that lack appeal on a statewide level."The problem for the Republican Party is that politics is local," she said. "I actually say that we're not deep blue. I say that we're shades of blue in many communities of red. In those red communities, we have a lot of elected officials, including members of Congress, who are Republicans. Some of the messaging that they use that works in those communities is antithetical to many Democrats. But at a local level, the messaging works and helps them politically."She added: "It's hard for Republicans to make ground, because locally, they're going to put forth candidates that are going to be more to the right." Gov. Gavin Newsom greets volunteers who were working the phone banks to help campaign against the gubernatorial recall at Hecho en Mexico restaurant in East Los Angeles on August 14, 2021. Los Angeles City Councilman Kevin de León, California state Sen. Maria Elena Durazo, California Assemblyman Miguel Santiago, and other Latino dignitaries were on hand to support the governor. Genaro Molina / Los Angeles Times via Getty Images Latino voters, a growing slice of the electorate, backed NewsomLatino residents now make up 39% of California's population and are the largest ethnic group in the state - according to the exit polling conducted by Edison Research, they made up 24% of the electorate in the recall election.For much of the summer, Democrats fretted that they weren't doing enough to appeal to this critical slice of the electorate, especially as Elder campaigned hard for Latino, Black, and Asian votes.However, in representing nearly a quarter of the vote in the recall election, the Latino vote was key in the eventual outcome.According to the Edison exit polling, Latino voters rejected the recall effort by a 60%-40% margin.But there were signs of concern for Democrats, even with the broad victory.Newsom actually lost ground with Latinos, albeit slightly, from his 2018 gubernatorial victory, when he carried the group with 64% of the vote, according to NBC exit polling.For Democrats, the question remains: How can the party engage with this diverse slice of the electorate in a meaningful way?Romero told Insider that both parties have a chance to improve their relationship with Latinos, but said that Democrats, who count on the group as part of their base, should have done more outreach this year."Both parties have a chance with the Latino vote because it's not monolithic," she said. "Newsom's campaign did not reach out to Latinos as it could have. There was lot of work by community organizations and by unions that it looks like helped bring out a lot of Latinos, but in terms of the party-driven work, it was either late or it didn't happen in the way that you would expect."She added: "Democrats will have to work on addressing Latino issues and having better relationships with Latino organizations, and essentially not taking the Latino vote for granted."Read the original article on Business Insider.....»»

Category: smallbizSource: nytSep 22nd, 2021

From fear-mongering about asylum seekers at the border to preemptively accusing Afghan refugees of terrorism, the GOP"s rhetoric on people coming to America puts lives at risk

GOP politicians are stoking fears about refugees and immigrants. Instead of debating policy, their language fuels dangerous conspiracy theories. An immigrant father and daughter embrace after crossing the border from Mexico on August 13, 2021 in Roma, Texas. John Moore/Getty Images Texas Gov. Abbott has repeatedly referred to the situation at the Southern border as an "invasion." This language pulls from a white supremacist conspiracy theory that has led to numerous killings. As we welcome Afghan refugees, fear-mongering language instead of policy debate only causes harm. Jack Herrera is an independent reporter writing about immigration, race, and human rights. He is a contributing opinion writer for Insider. This is an opinion column. The thoughts expressed are those of the author. See more stories on Insider's business page. More and more, it feels like one of the defining features of reporting on refugees and asylum-seekers is tackling misinformation - confronting the untruths, misconceptions, and lies that exist about refugees, asylum-seekers, and immigrants. When I'm on the Mexican border embedded with families fleeing violence, I read tweets accusing them of being gang members; when I talk with mothers in ICE detention, I get emails ranting about MS-13. I tend to keep an unhappy peace with this misinformation and fear-mongering - "things I can't change" and all that - but this last month I've struggled to contain my anger and my fear. The way powerful people talk, loudly and openly, about refugees isn't just untrue or cynical; it's putting lives in danger - from Afghan refugees to asylum-seekers on the border - in a very real way. At the Southern borderIn early August, I went to a church in San Francisco's Mission District, a Latino capital, to spend time with my thoughts. It was the second anniversary of the massacre in El Paso, where a white gunman went to kill people like me in an act of terrorism motivated by, in his words, "the Hispanic invasion of Texas." When I left the church, my phone began buzzing: A friend was asking about news reports of police and National Guard from red states being sent to the Texas border. In June, Texas Governor Greg Abbott and Arizona Governor Doug Doucey sent a letter to all 48 other states requesting they send armed personnel to the border "in defense of our sovereignty and territorial integrity." During a press conference announcing the request, Abbott claimed "homes are being invaded," and his Lieutenant Governor Dan Patrick went even further saying, "We are being invaded." Hearing Texan elected officials opine against immigration isn't anything new, and it's not something I begrudge them. Abbott and Patrick were elected by a largely anti-immigration electorate in their party, and they're representing them well. A politician can argue against immigration without putting anyone in active danger. But both of these leaders should know the dangers of using language like "invasion" - especially Abbott. After meeting with El Paso community members after citizens of his state were slaughtered in 2019, Abbott issued a rare admission of guilt. Just the day before the El Paso massacre, Abbott's campaign sent out a fundraising email calling on Texan citizens to "DEFEND" the border and claiming that Democrats were trying to "transform" Texas "through illegal immigration." Abbott's call to action was echoed, eerily and disturbingly, in the El Paso shooter's manifesto, which ranted about the "great replacement" - a white supremacist conspiracy theory that elites in Europe and the US are trying to "replace" white people with immigrants of color. After talking with El Paso community leaders about the threats posed by "dangerous rhetoric," Abbott admitted that "mistakes were made," and said that he and his campaign would correct the course. But Abbott is facing re-election this year, and his commitment to do better seems to have been replaced with his desire for re-election. While there is a real problem on the Texas border - a large number of people have begun arriving in a very specific area, in the Rio Grande Valley, stressing local resources - Abbott should know he has a serious and solemn responsibility when he speaks publicly on the issue. He can't hyperbolize or exaggerate. He can't use the language of invasion, or any of its synonyms. Even when used as a metaphor, that language is a call to arms, a call to action. It's the same twisted belief that Texas is facing an "invasion" that sent a gunman to murder people in a Walmart. We need to be clear: This is not a national security crisis, it's a humanitarian crisis. The same language harms Afghans fleeing the Taliban There's a through-line that exists from "invasion" rhetoric targeting Latin Americans to the currency hysteria over Afghan refugees and potential terrorism. The El Paso shooter's manifesto was not a one-off; it exists within a loosely associated group of white supremacists, united by online conspiracy theories and alarmist rhetoric. The El Paso shooter was himself directly inspired by the Christchurch, New Zealand terrorist, who shot 51 predominantly Muslim people to death in two mosques. Just as the El Paso shooter feared that Latin American immigrants were "invading" the US, the Christchurch murderer found motivation in virulent Islamophobia and the deranged fear that Muslims were seeking to replace the white majority in New Zealand. His manifesto's title - "The Great Replacement" - is itself a reference to a theory developed by the French extremist thinker Renauld Camus, who coined the term in 2012. Today, that same set of "great replacement" theories - explicitly in white supremacist spaces, and implicitly in anti-immigrant politicians' offices - are driving opposition to Afghan refugees resettling in the US and those still trying to make it here after fleeing the fall of Afghanistan to the Taliban. Former senior advisor to Donald Trump, Stephen Miller, offered a reliably anti-refugee take during the effort to evacuate Afghans who had aided the US during the war effort. Miller posted a long Twitter thread claiming the US didn't owe anything to Afghans, arguing against an "immigration policy that has brought the threat of jihadism inside our shores." "Some arrivals don't assimilate. Others hold more extreme beliefs. Some blame the host country for what happened to their home. Sometimes 2nd or 3rd generation becomes radicalized," Miller wrote. (To date, there has not been a single fatal terrorist attack committed by a refugee in the United States. Researchers at the Cato Institute estimate that an American's chance of dying in an attack committed by a refugee on any given year is 1 in 3.86 billion.)GOP Senator Tom Cotton, after accusing Biden of failing to evacuate Afghans, suddenly changed his tone once Afghans began arriving in the US, worrying out loud that refugees would not "accept our way of life here in terms of constitutional government."Politicians should certainly be talking about how to best help Afghans resettle. Last week, I spoke with an Afghan father in California who is struggling to find housing for himself and his young children. More attention must be paid to how best to help these new arrivals make a home here. However, Cotton's useless dithering about assimilation is dangerous. His language connects with strong, coherent sentiments already in the air in the US, which pushed extremists to murder Muslims multiple times in recent years. In 2019 alone, there were more than 500 attacks on Muslims in the US - arsonists targeted multiple mosques, and a man in California plowed his car into a group of people he assumed were Muslim, putting an middle school girl into a coma. Since 2010, there have been three different bombings or at temped bombings targeting Muslims. Anti-Muslim attacks have also claimed Indian, Sikh, and Orthodox Jewish victims, when attackers mistakenly assumed they were Muslims. If leaders like Cotton are going to discuss the integration of refugees, they have to take responsibility for their words and speak with sensitivity to the extraordinary violence refugees and Muslims of all backgrounds can face in this country. If conservatives are serious about preventing terrorism on US soil, they should consider that white supremacist violence has taken far more lives in recent years than any terrorism associated with Islam. Likewise, when it comes to the border, politicians like Abbott have a right to argue in favor of decreased immigration and increased border enforcement. But they can do that without issuing a call to arms to white supremacists.Read the original article on Business Insider.....»»

Category: personnelSource: nytSep 21st, 2021

"Netanyahu owes his career to Hamas" - "The Human Factor" director Dror Moreh talks about the rise and fall of the Israel and Palestine peace process

Dror Moreh speaks with Insider .....»»

Category: topSource: businessinsiderMay 23rd, 2021

WTI oil futures fall closer to session lows as Trump speaks at UN

This is a Real-time headline. These are breaking news, delivered the minute it happens, delivered ticker-tape style. Visit or the quote page for more information about this breaking news......»»

Category: topSource: marketwatchSep 24th, 2019

David Hogg Rebuked Again, Youth Gun Sports Leagues See "Record-Setting" Participation

David Hogg Rebuked Again, Youth Gun Sports Leagues See "Record-Setting" Participation Op-Ed via The Machine Gun Nest (TMGN).  Gun Control activist David Hogg can't seem to catch a break. His viewpoint that younger people are more anti-gun appears to be continuously rebuked by new reports from this post-COVID world.  Most recently, the NRA reported that the USA Clay Target League (USACTL) had its biggest year yet for student-athletes. Almost 40,000 will be participating in programs in the fall. Both male and female students compete on the same team, meaning that not just young males are represented here.  "Despite constant challenges both last year and this year, we are pleased to have our largest fall registration numbers ever," said John Nelson, president of the USACTL. "The record-setting participation this fall is the result of the incredible efforts of coaches and families to overcome ongoing issues with the pandemic and ammunition shortages." In this post-COVID world, not only are people connecting more with the outdoors, but they're also starting to connect with shooting sports as well. The popularity of shooting sports has grown exponentially since 2020. We can speak to that here at TMGN as many of new customers have become increasingly interested in competitive shooting, especially our millennial customers.  This is a big sign, as we wrote about before and continued to highlight that David Hogg's assertations that this large crowd of young anti-gun voters chomping at the bit to saw AR15s in half is a fantasy at best. The interesting thing about people who get into competitive shooting as opposed to someone who bought a gun during the panic buy is, while those who bought during the panic buy are likely to change their minds on gun ownership, they may not continue to engage heavily with those in firearms culture or have conversations that advance their views. On the other hand, those who compete are exposed to more ideas and have more informed opinions on firearms, typically leading them to be more pro-gun.  The reality of the situation is that millennials and Gen Z are becoming more conservative and have positive attitudes towards guns. According to Forbes, "Gen Z is more individualistic, more conservative both social and fiscally…" naturally, this idea lends itself to firearms. It's no wonder Gen Z is more pro-gun, raised with access to the internet, first-person shooting games, and action movies. Not to mention watching the debt crisis and student loans spiral out of control. Their views seem to align more with Libertarians or moderate republicans. Researching each of their ideas independently through the internet has allowed them to come to a logical conclusion instead of an emotionally influenced one. Only time will tell, but it seems like more and more data is showing that David Hogg is wrong as his anti-gun campaign fades into the darkness.  Tyler Durden Sat, 10/16/2021 - 23:30.....»»

Category: blogSource: zerohedge3 hr. 9 min. ago

US Coal "Roars Back" Under Biden Unlike Trump 

US Coal "Roars Back" Under Biden Unlike Trump  One of the biggest ironies to start this decade is the transition from fossil fuel generation to green energy has created a global energy crisis that is forcing the U.S., among many other countries, to restart coal-fired power plants monumentally ahead of the winter season in the Northern Hemisphere to prevent electricity shortages. The virtue-signaling assault by the green lobby spearheaded by hapless puppet Greta Thunberg must beside herself as U.S. power plants are on course to burn 23% more coal this year, the first increase since 2013, despite President Biden's ambitious plan for a national grid to run on 100% clean energy by 2035.  A global energy crunch is rippling through the world amid a huge rebound for power. Natural gas has soared to record highs as supplies remain tight, and countries are finding out that renewable energy sources aren't as reliable as previously thought. This has created a massive worldwide scramble by power companies for fossil fuels, especially coal.  U.S. utilities are transitioning to coal because soaring natural gas prices make it uneconomic to produce electricity. At the moment, 25% of all U.S. electricity produced is derived from coal-fired plants, up ten percentage points since the beginning of COVID.  "The markets have spoken," Rich Nolan, the National Mining Association chief executive officer, told Bloomberg. "We're seeing the essential nature of coal come roaring back." The Energy Information Administration forecasts U.S. utilities are estimated to burn 536.9 million short tons of thermal coal, up from 436.5 million in 2020.  Ernie Thrasher, CEO of Xcoal Energy & Resources, the largest U.S. exporter of fuel, said demand for coal will remain robust well into 2022. Last week, he warned about domestic supply constraints and power companies already "discussing possible grid blackouts this winter."  He said, "They don't see where the fuel is coming from to meet demand," adding that 23% of utilities are switching away from gas this fall/winter to burn more coal. There are not enough coal miners to rapidly increase mining output.   Kevin Book, managing director of research firm ClearView Energy Partners, said the decarbonization communication from Western governments would undoubtedly be challenged due to the energy crisis it has sparked.  "The goal of policy, if you listen to what's being said in Western countries in the context of climate discussions, is not only to stop building new coal but to eliminate the existing capacity to burn coal," Book said. "This is a moment in time when that idea is going to be challenged." One thing Greta and the wealthy elite that likely fund her campaign to reeducate younger generations into believing the green energy transition will be seamless is that it won't and may take decades. A pure-play coal company that is already benefiting from the demand surge and rising prices is Peabody Energy Corporation. As cooler weather fast approaches, the company may see increased demand for its thermal coal that utility companies use to produce electricity. On a technical basis, a so-called bullish "golden cross" was just triggered.  "Make Coal Great Again," former President Trump used to tell crowds a few years back at rallies in West Virginia. We're sure it's boom times in the Appalachia hills.  Tyler Durden Sat, 10/16/2021 - 20:00.....»»

Category: blogSource: zerohedge8 hr. 9 min. ago

Just How Big Is China"s Property Sector, And Two Key Questions On Policy And Tail Risks

Just How Big Is China's Property Sector, And Two Key Questions On Policy And Tail Risks While the broader US stock market was giddily melting up in the past week, things in China were going from bad to worse with Evergrande set to officially be in default on Oct 23 when the grace period on its first nonpayment ends, and with contagion rocking the local property market - which as we explained last week just saw the most "catastrophic" property sales numbers since the global financial crisis - sending dollar-denominated Chinese junk bonds to all time high yields. So even though it is now conventional wisdom that China's property crisis is contained (just as its concurrent energy crisis is also somehow contained), we beg to differ, and suggest that the crisis hitting the world's largest asset class is only just starting and is about to drag China into a "hard landing", with the world set to follow. And yes, with a total asset value of $62 trillion representing 62% of household wealth, the Chinese real estate sector is not only 30 times bigger than the market cap of all cryptos and also bigger than both the US bond and stock market, but is the key "asset" that backstops China's entire financial system whose deposits at last check were more than double those of the US. In other words, if China's property sector wobbles, the world is facing a guaranteed depression. So given the escalating weakness in China’s property sector, which has been in focus given intense regulatory pressure on developers’ leverage and banks’ mortgage exposure, and consequent contraction in sales and construction activity, it is natural to ask how significant a hit this could pose to both China's and the global economy. To help people get a sense of scale, below we excerpts some of the key findings from a recent note from Goldman showing just how big China's property sector is. A wide range of estimates for the scale of China’s property sector — up to about 30% of GDP — have been reported in the media and by other analysts. Different definitions of the scope of the sector largely account for the disparity. The most important distinctions are what types of building are included (residential, nonresidential, or all construction including infrastructure), what economic activity is included (only the construction itself, or all the value-added embedded in the finished residence e.g. domestically produced materials), and whether related real estate services are also included. A narrow definition of “residential construction activity as a share of GDP” could be as low as 3.6% of GDP. Expanding this to include all related domestic activities - e.g. materials like metals, wood, and stone produced domestically and used in housing construction, as well as services like financial activities and business services used directly or indirectly by the housing sector - would account for 12.4% of GDP. Adding nonresidential building construction and its associated activity would take it to 17.7%. Finally, including real estate services—which show a high correlation with broader property trends—would take the number to 23.3%. (All these numbers are based on detailed 2018 data, and exclude infrastructure spending not directly related to residential and nonresidential buildings.) The property sector’s share of the Chinese economy has grown fairly steadily over the past decade, after surging in the stimulus-fueled recovery just after the 2008 financial crisis. Digging into the definition of the “property sector”, there are three main questions that need to be kept in mind: 1. What types of construction? One important difference is in what types of construction activities are included. Construction broadly consists of three categories: residential housing, nonresidential buildings, and infrastructure-related construction. In China, residential construction appears to be about half of total construction—the rest is either non-residential building construction or civil engineering works, plus a small amount of installation/decoration activity. Specifically, residential and nonresidential buildings represent around 70% of total construction, and residential floor space under construction is typically about 70% of total floor space under construction. Note that this ~50% share for residential share of total construction is not unusual in international perspective. For example, the residential share is similar in the United States—though it reached into the 60-70% range during the peak years of the housing bubble—and has been about 40-50% in South Korea for some time. 2. What types of economic activity (only construction, or everything necessary to complete the finished building)? An even more important distinction is what types of activities one counts. Strictly speaking, the construction industry itself represents about 7% of China’s GDP. This represents wages, profits, and taxes from the construction sector (regardless of what type of construction or what end users). This is the value added of the construction sector itself, or the narrowly defined activity of building things. However, the construction industry uses a lot of output from other sectors – both materials (cement, wood, steel, etc.) and services (transportation of materials, financial services) to create finished buildings. Put another way, there are a lot of “backward linkages” from the construction sector: a home purchase requires not just the value added from construction industry, but also the value added from the “upstream” industries that provided the materials and were otherwise involved in the completion of the finished product. To gain some intuition for this, in the chart below, Goldman shows how much of each industry’s domestic value added ultimately goes into “final demand” of the construction industry (purchases of property by consumers or investment in property by businesses). For example, about one-third of value added in “wood products” goes into construction, about one-half of basic metals value added goes into construction, and essentially all of construction’s value added goes into construction final demand. (Note that this includes direct and indirect requirements—for example, basic metal output that is sold to firms in the metal fabrication industry that then sell to the construction sector would be counted as part of final demand for construction.) The next chart shows what fraction of the final demand for construction is provided by each sector. Roughly speaking, if we think about this as “the total domestic value added embedded in an apartment”, almost 30% of this is provided by construction activity, 8% from nonmetallic mineral products, etc. From the perspective of total domestic value added from all industries embedded in the final demand of the construction industry, the overall construction industry’s final demand accounts for roughly one-quarter of China’s GDP. This estimate is based on China’s most recent (2018) “input-output” table—which indicates the final output of each industry, as well as how much input is used from every other. 3. Should real estate services be included. Some analysts focus on property construction only, while others add the “real estate services” sector e.g. the leasing and maintenance of buildings when estimating the impact of the housing sector of the economy. These activities contribute roughly 6-7% of GDP in China. In many countries, real estate services are somewhat less volatile than housing construction. The likely reason is that real estate services relate in part to the stock of existing buildings than the flow of new building construction. Even if there were a housing crash and building construction stopped, most real estate services could theoretically continue.  As evidence of this, in the US housing crash, construction sector GDP fell by ~30% peak to trough but real estate services never declined. That said, in China the “real estate services” sector has been significantly more volatile, almost as volatile as the construction sector itself. Contributions by type of demand and activity Taking these three factors into consideration, Goldman next shows estimated shares of China’s activity in the next chart, and breaks down construction into its main components while showing the share attributable to real estate services. The “sector activity” column shows the share of GDP accounted for directly by activities of that sector. In other words, companies and workers engaged in all types of construction activity accounted for 7.1% of China’s GDP in 2018. The “final demand” column shows the share of GDP accounted for by all the domestic economic activities embodied in final demand for that sector. In other words, the demand for buildings and other construction also generates demand for materials and other types of services — and adding the value added in construction and all of these “upstream” sectors together gives the numbers in the right column Putting the above together, the size of China’s property sector therefore depends on the question we want to answer: What share of Chinese economic activity do workers/companies involved in residential construction represent? Here, one should look at domestic value-added (the left column). This is 7.1% for overall construction and just 3.6% for residential construction only. How much economic activity is driven by demand for residential property construction? Residential property demand drives 12.4% of GDP (right column, second row in table), because in addition to the construction activity it creates demand for all the materials and other services involved in building construction. What about the impact of total demand for property construction? Including non-residental buildings as well as residential, and the total upstream requirements of both, we want to look at the “domestic value added in final demand” of construction of residential + nonresidential buildings. This is 17.7% of GDP (12.4%+5.3%). How much of the economy is at risk from a property downturn? Here, we could potentially add end demand for real estate services to the above calculation. This would be another 5.6% of GDP, suggesting 23.3% of the economy—nearly a quarter—would be affected. Finally, if one adds all construction and all real estate and all their associated activities, we get just over 30% of the economy (24.5%+5.6%), although it is worth caveating that this may be an overly broad definition for the property sector, as it includes infrastructure-related activity, which if anything is likely to be ramped up by policymakers in the event of severe property sector weakness. * * * Yet even a nice big, round 30% estimate for how much China's property sector contributes to GDP, does not encompass all the potential spillovers from a construction sector downturn. There are at least three others: Second-round effects. A shock to construction (or any other sector) implies a drop in wages and company profits in that sector. This in turn implies lower income for the household and business sectors — and incrementally lower consumption and investment respectively. Such “second-round” or “multiplier” effects aren’t included in the estimates above. Fiscal spillovers. Land sales represent an important part of local government revenues in China (roughly 1/3 in gross revenue terms). Governments acquire land usage rights from rural occupants and sell them at a premium via auctions to developers. If land sales revenues fall because of a housing downturn (through some combination of fewer successful auctions and/or lower land prices), budgets will be squeezed, which could limit local governments’ spending and investment. Spillovers abroad via imports. As the world’s largest trading nation, China does not get all of its construction materials and other intermediate inputs domestically. In addition to the estimates above, which focus on domestic value-added, about 11% of the total value added embedded in China’s construction final demand is from foreign sources. (This is about 3% of China’s GDP, although it makes more sense to look at each trading partner’s exposure relative to the size of its own economy.) So, if we wanted to look at the total size of China’s construction sector in terms of driving economic activity, regardless of where that economic activity occurs (perhaps to compare China’s construction sector to other countries with different levels of import intensity) the figure in the top right cell in Exhibit 3 would be 3% larger. Putting it all together, and China's property sector emerges as the mother of all ticking financial time bombs. * * * Which brings us to what is Beijing's latest policy action (if any) to prevent this potential financial nuke from going off, and what are any additional tail risks to be considered. Well, as noted above, China's property sector began the week with sharp price falls across the board, with China's junk bonds cratering to near all time lows and with signs that the concerns are spilling over to the broader China credit market with spreads widening across the board. Some key updates: Recent news suggest China property stresses are building up. A number of China property HY developers have made announcements over recent weeks regarding their upcoming bond maturities. On 11 Oct, Modern Land launched a consent solicitation to extend the maturity on its USD 250mn bond due on 25 Oct by 3 months Xinyuan Real Estate announced on 14 Oct that the majority of holders of its USD 229mn bond due on 15 Oct have agreed to an exchange offer. Note that Fitch considers both transactions to be distressed exchanges. Furthermore, Sinic announced on 11 Oct that they are not expecting to make the principal and interest payments on its USD 250mn bond due on 18 Oct. These indicate that stresses amongst developers are building. Meanwhile, the grace period on Evergrande's missed coupon payments is ending soon. Evergrande missed coupon payments of USD 148MM on 11 Oct. This came after missing an earlier coupon payment on 23 Sep. The earlier missed coupon has a 30-day grace period, which ends on 23 Oct, and should that not be remedied in the coming week, the company will be in default on this bond. With Evergrande USD bonds priced at around 20, a potential default is unlikely to have large market impact, though if the company is able to remedy the earlier default, this could provide a positive surprise for the market. Despite these mounting risks, the market staged a sharp rebound at the end of the week, with news emerging that policymakers are seeking to speed up mortgage approvals (if not followed by much more aggressive easing, this step will do nothing but delay the inevitable by a few days). And while Goldman's China credit strateigst Kenneth Ho writes overnight that valuation is cheap across the lower rated segments within China property HY, market direction hinges on whether they will be able to refinance and avoid defaults. In particular, he notes that with $6.2bn of China property HY bonds maturing in Jan 2022, policy direction in the coming two months will be key. And since Goldman remains in the dark as to what Beijing will do next, as it remains "difficult to foresee how policy developments will play out in the coming weeks", Goldman prefers to wait for clearer signs of policy turn before shifting lower down the credit spectrum. * * * This brings us to what Goldman calls two key questions on China property - policy and tail risks, which will dictate the direction of the China property HY market. As discussed in depth in recent days, Beijing's tight regulatory stance is increasingly affecting a broader set of developers, as slowing activity levels are adding to worries across China property HY. For the period from early August to the first week of October, the volume of land transactions cratered by 42.5% compared with the same period last year, and for property transaction volume, this fell by 27.0%. Difficult credit conditions and weak presales add pressure to developers’ cash flows, and these factors are what led to the pick up in defaults and stresses in China property HY. Therefore, unless there are clear signs of an easing in policy direction, Goldman warns that tail risks concerns are unlikely to subside, and these will dictate the direction of China property HY market. As noted by Goldman's China economics team, credit supply holds the key to China’s housing outlook in the near term, emphasizing the need for policy adjustments in order to stabilize the housing market. Incidentally, the latest monthly Chinese credit creation numbers showed a modest miss to expectations, as total TSF flows came in at 2.928TN, just below the 3.050TN consensus, and up 10.1% Y/Y, lower than the 10.3% in August (the silver lining is that M2 rose 8.3%, up from 8.2% in August and above the 8.2% consensus). That said, given the sharp slowdown in residential property activity levels over the past two months, policy stance appears to have relaxed over the past two weeks if somewhat more slowly than most had expected. The table below summarizes a number of policy announcements and news reports that suggest some easing of policies are taking place. That said, the announcements and policymakers’ statements do not signal a large shift in overall policy direction yet. For example, the more concrete measures such as home buyer subsidies and the reduction in home loan interest rates are conducted at a city, and not national, level. And whilst Bloomberg reported that the financial regulators have informed a number of major banks to accelerate mortgage approvals, the precise details are lacking. The recent actions are therefore mostly in line with the overall policy stance. On one hand, policymakers remain focused on the medium term goal of deleveraging, and will want to avoid over-stimulating and reflating the property sector; on the other hand, policymakers have stated that they want a stable property market and to avoid systemic risks from emerging, suggesting that they would seek to avoid over-tightening. The problem is that they can't have both, and one will eventually have to crack. Goldman is somewhat more optimistic and writes that finding a balance will take time, adding that "given the need to balance the competing policy objectives, further measures could continue to emerge piecemeal, and visibility on the timing and the type of policy actions are limited." Furthermore, there may need to be further downside risk towards the property sector before we see a more decisive change in direction in the policy stance. This means that tail risks concerns are unlikely to subside, despite signs that policy direction is gradually shifting. * * * Assuming help does not come on time, the next key question is how fat is the tail as large amounts of bonds trading at stressed levels. Currently, the China property market is pricing in elevated levels of stress. Their price distribution is shown below indicating that 38% of bonds (by notional outstanding and excluding defaulted bonds) are trading at a price below 70, and 49% of bonds are below a price of 80. Are market prices overly bearish on tail risk, or are they accurately reflecting the stresses amongst property developers? With policymakers likely to maintain their medium term goal to delever the property sector, it is unlikely that tail risk concerns for higher levered developers will not subside. However, how “fat” the tail is will depend on the policy stance over the next two months. A big challenge going forward is that there are sizeable bond maturities in the next year, which will heavily influence tail risk. As noted above, a number of developers have conducted or are seeking to complete distressed buybacks, and defaults rates amongst China property HY companies are soaring. As such, the policy stance in the next two months will be critical. As shown in Exhibit 2, China property HY bond maturities are relatively light for the remainder of 2021, but pick up substantially in 2022, with USD 6.3bn of bonds maturing in January alone! A full list of bond maturities from now to February 2022, is shown below. It goes without saying, that should policy easing over the next two months be insufficient to ease the financial conditions amongst developers, there could potentially be a meaningful pick up in credit stresses at the start of 2022 just as the Fed launches its taper and just as a cold winter sends energy costs to unprecedented levels. Finally, for any investors seeking some exposure to China's HY market assuming that the worst is now over, Goldman agrees that while valuation is cheap across the lower rated segments within China property HY, the key determinant on market direction won't be valuation, but rather hinges on whether developers will be able to refinance and avoid defaults - i.e., can the Ponzi scheme continue. Tyler Durden Sat, 10/16/2021 - 18:00.....»»

Category: blogSource: zerohedge10 hr. 9 min. ago

Morgan Freeman Spurns "Defunding Police"; Says "Most Of Them Are Guys That Are Doing Their Job"

Morgan Freeman Spurns "Defunding Police"; Says "Most Of Them Are Guys That Are Doing Their Job" Authored by Louise Bevan via The Epoch Times, Legendary American actor Morgan Freeman, while talking about his upcoming movie “The Killing Of Kenneth Chamberlain,” took the opportunity to express that he rejects the notion of “defunding the police.” While talking to Black Enterprise magazine’s Selena Hill in early October, the 84-year-old actor clarified, “I’m not the least bit for defunding the police. Police work is, aside from all the negativity around it, it is very necessary for us to have them, and most of them are guys that are doing their job. “They’re going about their day-to-day jobs,” he said. “I know some policemen who would never even pull their guns, except on a range.” Morgan Freeman speaks at the 26th Annual Critics Choice Awards on March 07, 2021. (Getty Images) Freeman’s latest film, “The Killing Of Kenneth Chamberlain,” is about the real fatal police shooting of an elderly black Marine vet with bipolar disorder in his home in White Plains, New York. Co-star Frankie Faison, playing Chamberlain, aligned with Freeman’s stance on police defunding while pointing out a discrepancy. “We as entertainment, people in the arts, we’re treated a little differently by law enforcement than people who are just ordinary walks of life,” he told Hill. “I would like for that to stop; I want us all to be treated equally.” In an Instagram post, Hill stated her contrary position as an “avid supporter of defunding the police,” but concurred with the actors that violence against African-Americans at the hand of police should end. While rejecting defunding, Freeman put his money where his mouth is to promote police reform, a movement he supports. In June, alongside University of Mississippi criminal justice professor Linda Keena, the actor donated $1 million to the university’s School of Applied Sciences for a research and specialized training center: the Center for Evidence-Based Policing and Reform. Freeman and Linda Keena attend the 2017 Breakthrough Prize at NASA Ames Research Center in Mountain View, California, on Dec. 4, 2016. (Kimberly White/Getty Images) “Look at the past year in our country, that sums it up,” Freeman said. “It’s time we are equipping police officers with training, and ensuring ‘law enforcement’ is not defined only as a gun and a stick. “I often talk to police officers when I see them out and ask how they would do their work if they didn’t have guns,” he added. “Support of this center is about finding ways to help officers, and arrive at solutions.” Keena agreed, “The goal should be to give officers as many tools as possible to do their jobs more effectively.” Tyler Durden Sat, 10/16/2021 - 18:30.....»»

Category: blogSource: zerohedge10 hr. 9 min. ago

Germany"s "Traffic Light" Coalition Agrees To 12-Page Policy Framework, Hopes To Form Government By Christmas

Germany's "Traffic Light" Coalition Agrees To 12-Page Policy Framework, Hopes To Form Government By Christmas The "traffic light" framework agreement struck Friday between the Social Democrats, Greens and the Free Democratic Party - the three parties that will form Germany's first post-Angela Merkel government - has come together more quickly than many Germans probably expected. After just a week of talks, the three parties unveiled the 12-page framework during a Friday press briefing. While it's certainly progress, the framework is still very thin and negotiators from all three parties will likely take months to fill in the gaps. By announcing the deal, German Finance Minister Olaf Scholz took another step toward succeeding Angela Merkel as Germany's next chancellor. During all of Germany's post-WWII history, a coalition deal has never collapsed after reaching this stage. Scholz, the SPD leader and likely the next Chancellor, has insisted that his vision for a "progressive" Germany can be realized even if the Greens and the FDP aren't exactly ideological bedfellows. The framework focuses on issues like climate change, taxes (namely, a commitment not to increase them), simplifying immigration processes as well as a new agreement on the minimum wage, among other commitments. The three parties have been holding talks since Scholz’s center-left SPD took home a plurality of the vote during Germany's federal election. Now, over the next two months, the three parties policy experts must fill in the many gaps left in the 12-page deal. The full coalition deal between Angela Merkel's conservatives and the SPD ran to 175 pages and included specific commitments on legislation to be enacted in the Bundestag. Scholz said Friday that he hoped to have the whole policy framework finished and the government formed by Christmas. While most Germans probably remember the collapse of Merkel-led three-way talks back in 2017 (which collapsed before a framework was even close to being agreed to), modern Germany hasn't seen a coalition fall apart after the parties agreed on a framework. If talks did collapse, President Frank-Walter Steinmeier would have to step in, but this would be uncharted territory. Like in Italy, Germany has a president whose role is more akin to that of a caretaker when coalition talks fail. Speaking to reporters, Scholz said Friday that the preliminary agreement "clearly shows that a government that aims to ensure we achieve progress can be formed in Germany." "This is a very good result," he added. "It makes clear that Germany can form a government that can achieve progress, progress that’s possible and necessary in many, many areas." Scholz also claimed the parties managed to bridge their differences to put Germany on the path to its biggest industrial renewal in a century. Already, there appear to be areas where conflict could possibly arise. While the framework has included a commitment not to raise taxes, both the Greens and SPD have sketched out spending commitments as part of their promise to create a more egalitarian society. As it stands, the deal promises a "decade of investments in the future" while leaving in place Germany's infamous debt brake enshrined in the German constitution. As for relations with the EU, views among the three coalition partners differ substantially. The FDP still opposes the EU debt union that many in the Greens and the SPD are keen on. The Greens also favor a common EU fiscal policy to support investment in the environment, research, infrastructure and education. Of course, this would be anathema to Europe's far-right, as any indication of a unified fiscal policy framework to compliment the supranational ECB would infuriate many on the right. On China, Biden (or, potentially, Trump should he return to office) might find an ally in the new German government, since the Greens and the FDP are more wary of China than the SPD or Merkel's conservatives. The framework includes an agreement that Chinese firms should have no part in the construction of Germany's next-generation telecoms networks to keep them secure. Notably, the Greens abandoned their push to impose a new speed limit on the Autobahn When it comes to energy, the deal requires Germany to search for more alternatives to fossil fuels. The Greens have been pushing to scrap the Nord Stream 2 pipeline, which will transport Russian gas to western Europe and increase Germany's reliance on Moscow for energy, and on the fossil fuels that the Greens claim are more damaging to the environment. Oddly, this is one situation where environmentalists will find themselves allied with Sen. Ted Cruz who has also warned against the pipeline. Certain commitments are more vague than others. When it comes to defense spending, the Greens are the only party that opposes increasing it to the 2% of GDP that all NATO members have promised. The framework included some vague language about abiding by its commitments, but it's not clear how all this will pan out. The only thing that looks certain at this point is that Merkel's longstanding conservative coalition, the CDU-CSU, is heading for the opposition benches after the CDU's worst electoral performance in decades. Tyler Durden Sat, 10/16/2021 - 09:55.....»»

Category: blogSource: zerohedge17 hr. 25 min. ago

Donald Trump supporters baffled and divided over his claim that Republicans won"t vote in 2022 or 2024

Donald Trump said his supporters would not vote in future elections unless the GOP backed his baseless election fraud claims. Former President Donald Trump speaks at a rally at the Lorain County Fairgrounds in Wellington, Ohio on June 26, 2021. AP Photo/Tony Dejak Donald Trump said his supporters would not vote in future elections unless the GOP backed election fraud claims. On social media, his supporters are divided over whether to follow his advice. "Donald Trump is doing everything he can to hurt Republican chances in 2022," one wrote. Former President Donald Trump's supporters are divided over his comments that Republicans will not vote in the 2022 or 2024 elections unless the Republican Party backs his election fraud claims."If we don't solve the Presidential Election Fraud of 2020 (which we have thoroughly and conclusively documented), Republicans will not be voting in '22 or '24," Trump said in a statement emailed to his supporters on Wednesday."It is the single most important thing for Republicans to do," he said.Since leaving office in January, Trump has continued to hype the baselessly claim that the 2020 election was rigged in Joe Biden's favor.In several pro-Trump and QAnon Telegram channels, MAGA supporters have been arguing over whether to follow his advice."Donald Trump is doing everything he can to hurt Republican chances in 2022," an account called Trump Supporters wrote on Telegram."Donald Trump is, ostensibly, a Republican. But he has shown time and again -- both in the White House and now out of it -- that he cares little about helping the party and its other candidates," they said.According to Newsweek, another Telegram user wrote, "But what happens if we don't vote? Does the evil cabal remain in power forever? Do they just appoint more of the same?? What???""Not voting is not just what Marxists want, It's also stupid no matter how rigged the system is," another user wrote, according to the outlet.However, other users rushed to his defense, agreeing with Trump's stance to put pressure on the Republican Party."We shouldn't vote until the election process is run correctly. Just be wasting our time for another farce!" one user wrote."Why waste the effort for something that is against us. Shake the RNC at its core, voters will not cast votes for them," another Telegram user said.Others disagreed. "If we don't show up and vote, it's just like surrendering. Everyone must go to the poles (sic) in person," one user said.Cas Mudde, a professor of international affairs at the University of Georgia recently told Insider that Trump's threat is "mostly a power play.""He wants to remain at the center of GOP politics and prevent the party from moving on without him," Mudde said.Read the original article on Business Insider.....»»

Category: worldSource: nyt18 hr. 41 min. ago