ECONOMY | WHAT REALLY HAPPENED


ECONOMY

May 10 09:10

"Cashless" Sweden Suddenly Warns Citizens: Hoard Banknotes & Coins In Case Of Cyber-Attack Or War

Many of Sweden’s bank branches had stopped handling cash altogether.

Figures from the Royal Institute of Technology in Stockholm show that only 18% of all payments made today in Sweden are in cash – a 15% drop from the previous year. Meanwhile figures from the Swedish Trade Federation show that most Swedish retailers say that 80% of their commerce is from card payments. A number that probably will be 90% by 2020. Such is the appetite for digital commerce in Sweden that many predicted it could become the world’s first cashless society.

But, now, as The Daily Mail reports, The Swedish Civil Contingencies Agency, an arm of the government, has sent guidance to every home telling residents to squirrel away “cash in small denominations” in case of emergencies ranging from power cuts or technology glitches to terrorism, cyber-attacks by a rogue government or war.

May 10 09:10

Trump Deletes, Then Retweets Tweet Saying "No Need To Rush" China Trade Talks

In what appears to be the third round of revisions to his increasingly disjointed thread of trade-deal related tweets, Trump has now retweeted the deleted tweet saying talks were proceeding in a "congenial" manner and that there was no need to rush.

May 10 09:09

Luongo: Will Trump's Vanity Destroy The Global Economy?

Last year I asked the question “Will Trump torch the global economy on the bonfire of his vanity?”

A year later we have the answer. It’s a resounding, “Yes.”

May 10 09:08

£14m pay deal for boss of 'unaffordable' cystic fibrosis drug

The chief executive of a company making a potentially life-saving cystic fibrosis drug that the NHS says is unaffordable was paid $18.8m (£14.4m) in cash and shares last year, the Guardian can reveal.

A circular to shareholders ahead of the company’s upcoming annual meeting showed that Jeff Leiden’s deal was 81 times more than the median Vertex employee was paid and an increase on last year’s $17.2m deal. Separate stock market announcements show that he has also sold more than $70m of company stock over the past two years, some or all of it handed to him as part of his pay deals.

His personal remuneration in 2018 is enough to fund a one-year course of its cystic fibrosis drug Orkambi for 137 patients. Vertex is asking £105,000 per patient per year for the drug, which the NHS insists is not value for money. There are 10,400 children and young adults with cystic fibrosis in the UK, 40% of whom could benefit from Orkambi.

May 10 09:06

China 'Fully Prepared' for Any US Actions Related to Tariffs

China is totally prepared for any US actions related to trade tariffs and duties, a spokesman for the Chinese Commerce Ministry, Gao Feng said on Thursday.

US President Donald Trump announced on May 5 that Washington would raise tariffs on Friday to 25 percent from 10 percent on $200 billion of Chinese goods, while on May 6 he said that the United States had been losing billions of dollars to China on trade, pledging to reverse the situation.

May 10 09:05

US Ambassador Warns Germany Not to Do Business With Iran

The statement comes a few days after the US slapped a new round of sanctions on Iran’s steel, iron, aluminium and copper sectors following Tehran’s move to suspend some of its obligations under the nuclear deal in light of Washington’s decision to intensify restrictive measures.

Speaking to Bild newspaper, US Ambassador to Germany Richard Grenell warned that companies involved in business with Iran could be blocked from the US market.

“You can do as much business as you want in Iran, but we have a say with regards to your visa. Because if you do something, we’re not going to agree to let you enter our country”, he warned.

May 10 08:50

Here’s a Lesson From the 108,000 Millionaires Who Left Their Home Countries Last Year

By Simon Black, Sovereign Man

According to a recent report from Bloomberg, more than 108,000 millionaires left their home countries last year in search of greener pastures.

Most emigrated from countries like China and Russia… no surprise there.

India also saw a large outflow of millionaires as tax authorities tightened their grip. And Turkey continues to see an exodus, in the wake of strong-man President Erdogan.

But Western countries like France and England also lost boat loads (or planes full) of millionaires. Excessive taxation is the most obvious reason...

May 09 16:08

Market Cap per Employee...

May 09 15:53

Nestle to cut 4,000 US jobs...

May 09 12:58

Why The US Has No High-Speed Rail

May 09 11:46

Trump Winning? US Trade Gap With China Tumbles To 5-Year Low

Overall exports increased 1% to $212 billion, boosted by a 39% jump in soybean shipments. Imports climbed 1.1% to $262 billion on gains in oil, food, vehicles and pharmaceuticals. The overall merchandise-trade deficit widened 0.7% to $72.4 billion.

However, likely of more interest to President Trump, the trade gap with China shrank to $20.75 billion in March - the lowest since March 2014, offering the administration a chance to claim his tariff war is yielding the desired results just as negotiations reach a critical stage.

May 09 11:45

Dow Drops Over 1000 Points From Highs As Yield Curve Inverts

The Dow is down over 1100 points from its highs in April...

For the first time since Jan 23rd, the S&P 500 has broken back below its key 50-day moving-average to six-week lows as trade deal anxiety takes hold...

May 09 11:43

New Rule Could Allow Debt Collectors To Spam 49 Million Americans With Emails And Texts 

The Consumer Financial Protection Bureau (CFPB) under the Trump administration, has published a Notice of Proposed Rulemaking (NPRM) to amend the Fair Debt Collection Practices Act (FDCPA). The CFPB's proposal would change Regulation F to direct Federal rules overseeing the activities of debt collectors. The CFPB's new proposal would allow debt collectors to call consumers as frequently as seven times per week and be permitted to start sending emails and texts.

May 09 11:42

Economic Might As A Foreign Policy Tool

The news is full of President Trump’s, supposedly confidential, tax filings (from 25+ years ago). The only relevant current news I found was it seems that despite the losses on his tax returns, Trump’s lifestyle didn’t change because the losses were largely suffered on projects where the President was not utilizing his own money. Presumptively, that means that Trump the developer, put together deals in which he had an interest in the partnership, but contributed no actual money. Thus, when the loses from the partnership were apportioned for tax purposes, the future President Trump was able to claim that loss against taxable income that h earned on other projects. The bottom line appears to be that Developer Trump negotiated multiple deals in which he personally benefitted financially whether or not the project was ultimately successful. That no lose proposition appears to be exactly where the president finds himself in the current China trade negotiations.

May 09 11:29

Economic Warfare Man Strikes Again

May 09 11:06

The US is terrible at building high-speed rail — here's why

China has the world's fastest and largest high-speed rail network — more than 19,000 miles, the vast majority of which was built in the past decade.

Japan's bullet trains can reach nearly 200 miles per hour and date to the 1960s. They have moved more than 9 billion people without a single passenger casualty.

France began service of the high-speed TGV train in 1981 and the rest of Europe quickly followed.

But the U.S. has no true high-speed trains, aside from sections of Amtrak's Acela line in the Northeast Corridor. The Acela can reach 150 mph for only 34 miles of its 457-mile span. Its average speed between New York and Boston is about 65 mph.

Webmaster's Commentary: 

Last night I watched a documentary on China's commercial maglev train. 300 MPH!

May 09 10:49

‘China has chosen to retreat’ — the U.S. view as negotiations reach critical juncture

The document released Wednesday outlining a planned increase in tariffs on China makes clear the U.S. fury at a perceived backtracking on key positions.

“In the most recent negotiations, China has chosen to retreat from specific commitments agreed to in earlier rounds,” a Federal Register notice reads. “In light of the lack of progress in discussions with China, the President has directed the Trade Representative to increase the rate of additional duty to 25 percent.”

Those tariff increases, from 10% on roughly $200 billion of Chinese goods, are set to be implemented on Friday.

May 09 10:47

Luongo: 'Economic-Warfare-Man' Strikes Again

It’s getting tiresome watching Donald Trump’s bipolar presidency. It seems he can’t let a day go by without making some massive announcement to raise tariffs, threaten sanctions or overthrow a government.

Every 24 hours is another exercise in chasing the Trump Reality Show around. Every lull in the perpetual news cycle has to be seized upon to create more chaos so he can validate his insanity.

Trump has so many plates spinning there’s no way he’s actually thinking anything through. Take the latest fiasco, Chinese trade talks.

One day “Talks are going well,” the next “We’re raising tariffs to 25%.”

May 09 08:11

Money printing always works

May 09 07:39

John Rubino – Follow the Debt

May 09 04:31

How to Survive a Personal Economic Collapse

May 09 03:58

Chick-Fil-A Sales Soar Above The Competition

May 09 03:20

"'Trade War' In May... And Go Away"

May 08 15:34

7 Laws of Investing

May 08 11:49

Behind The Recent Crypto Surge? Chinese Banks Are Quietly Running Out Of Dollars

The catalyst has remained unclear - anticipation of an ETF? Growing institutional interest? Short-squeeze? Manipulation? Or, just plain old safe-haven flows as various nations around the world collapse into totalitarianism?

We may have found one, rather large, answer - from China, where, as SCMP reports, authorities have quietly begun 'soft' capital controls on foreign currency withdrawals

Chinese banks have increased their scrutiny of foreign-currency withdrawals and quietly reduced the amount of US dollars people are allowed to withdraw, tightening the country’s capital controls as the nearly year-long US-China trade war bites.

The issue was thrust into the spotlight on Friday when a viral video clip showed a bank cashier unable to answer a furious customer demanding to know why she was not allowed to withdraw US$200 from her dollar-denominated account, even though she was within her quota.

May 08 11:47

Gundlach Warns Bear Market Just Getting Started, "Better Than 50% Chance" Trade Talks Collapse

Never one to stray off message, DoubleLine Capital's Jeff Gundlach sat down for a mid-day interview with CNBC's Scott Wapner on Tuesday, where he elaborated on many of his talking points from his headlining appearance at Sohn.

As one of the few speakers at Sohn whose pitches have actually generated alpha for anybody willing to heed his advice (at last year's conference, Gundlach recommended traders short Facebook and buy oil companies), the audience and the financial press listened attentively on Monday as he recommended shorting the lowest polling Democratic contenders (presumably on PredictIt or some other online betting platform), and touched on a familiar topic: The risks posed by the surging US debt interest.

May 08 11:32

INFURIATING DEMOCRATS, TRUMP PLANS TO REDEFINE POVERTY, CUTTING AMERICANS FROM WELFARE

The Trump Administration is looking into altering how it determines the national poverty level, which may put some Americans at risk of losing access to welfare programs, according to Bloomberg. The move might occur from changing how inflation is calculated in the “official poverty measure” according to a regulatory filing by White House Office of Management and Budget. That formula has been used for decades to try and determine where the poverty line is and what people qualify for social programs and federal benefits.

The measure is calculated at three times the cost of a minimum food diet and adjusted every year as prices rise. It was first set in the 1960s and, in 2018, a family of four making no more than $25,900 was considered under the poverty line. This figure determines eligibility for federal, state and nonprofit programs like Medicaid and food stamps.

May 08 10:43

A Synchronized Global Downturn Intensifies As JPM Global Manufacturing PMI Plunges

Last month, we reported that CPB Netherlands Bureau for Economic Policy Analysis' world trade volume fell 1.8% in the three months to January compared to the preceding three months as a synchronized global downturn gained momentum.

Four months later, and the performance of the global manufacturing sector remained depressed in April. This is the month where global trade data should trough, in preparation for a 2H rebound. However, that is not the case - as a synchronized global downturn intensifies.

May 08 09:52

AN UNFINISHED LEGACY: PRESIDENT REAGAN AND THE SOCRATES PROJECT

In the closing days of his administration, President Reagan had an executive order drafted to create a new government agency — the first new federal agency since the creation of NASA in the 1950s. Why would a president who built his reputation on reducing the size of the government want to create more government?

Reagan recognized that America’s future depended on remaining an economic superpower. He also recognized that America’s competitiveness on the world stage was declining and that countries like China and India posed a significant threat because of their ability to use technology-based planning to gain a long-term competitive advantage.

May 08 09:29

Scott Adams: China, Iran, NK, Trump Taxes, Socialism, Coffee, and Guns

Comments at: https://twitter.com/ScottAdamsSays/status/1126125111462047745

Gun control proposal: Make it illegal for Democrats to own guns
Why would Dems object? Solves half the problem
Another Proposal: ALL gun owners REQUIRED to join NRA
They promote gun safety, responsible use, important stuff
NRA membership is essentially gun control and safety
Jerry Nadler and Congressional Oversight
Manufacturing crimes and stalking President Trump
People are being manipulated into committing crimes…
…without even realizing they’re committing a crime
NYT legally obtained some…illegally obtained, Presidential tax info
If you understand business and taxes, smart, legal tax stuff
If you understand finance, nothing unusual in his taxes
China is smart, nobody says they aren’t
They’re stalling for time, wearing down the other side

May 08 07:52

What if Government Suddenly Disappeared?

By Peter C. Earle

If the strange and little-known case of the condominium of Moresnet — a wedge of disputed territory in Northwestern Europe, and arguably Europe’s counterpart to America’s so-called Wild West — acts as our guide, we must conclude that there is an inverse relationship between the size and scope of government and the potential for both peace and prosperity.

The remarkable experiment that was Moresnet was an indirect consequence of the Napoleonic Wars (1803–15), which, like all wars, empowered the governments of participating states at the expense of their populations: nationalism grew more fervent, many nations suspended specie payments indefinitely, and a new crop of destitute amputees appeared in streets all across Europe...

May 07 18:38

Charter squeezes more money out of Internet users with new cancellation policy

Charter is making it more expensive to cancel its Spectrum Internet service, as it will begin charging customers for the full month after they cancel instead of providing a prorated final bill.

Charter broke the news to customers in the fine print of their latest billing statements. Stop the Cap reported the change yesterday, and we were able to confirm it on the May billing statement received by an Ars staffer in Texas who subscribes to a triple-play package with Spectrum TV, phone, and Internet service.

May 07 12:57

Facts and Figures on Washington's Immense Defense Lobbying Industry

I haven't posted on this specific subject for some time and, given the upcoming midterm elections and the meeting between the leaders of Russia and the United States, I thought it was time to revisit one of the most powerful groups in the United States, the defence industry. Thanks to Open Secrets, we have ready access to how much the defence sector has contributed to politicians and how much it spends on lobbying. This is particularly pertinent given the hundreds of billions of dollars that are transferred from American taxpayers to a handful of companies every year.

Let's start by looking at the defence industry's contributions to those who are supposed to represent Americans in Washington. Here is a graphic showing the sector's long-term political contributions:

May 07 11:43

Markets Re-Plunge As Lighthizer Confirms Tariff-Hikes After China Reneges On Promises

While a Chinese delegation is still scheduled to visit Washington as planned this week, with talks to take place Thursday and Friday, U.S. Trade Representative Robert Lighthizer told reporters Monday that the Trump administration plans to increase duties on Chinese imports at 12:01 a.m. on Friday, accusing Beijing of backpedaling on commitments it made during negotiations.

U.S. and China had been making substantial progress on a trade deal, but in the past week China has reneged on some of its promises:

“We felt we were on track to get somewhere. Over the course of last week we have seen an erosion of commitments by China,” Lighthizer said, adding that significant issues remain unresolved, including whether tariffs will remain in place.

The result, more than half of the intraday gains have been erased already...

May 07 11:42

America's $1.6 Trillion Student Debt Crisis Triggers Suicidal Thoughts: Survey

There are currently 44 million student loan borrowers who owe approximately $1.6 trillion in student debt. Student loan borrowers are feeling the pressure of insurmountable debts as the economy slows, wages stagnate, and borrowing costs rise. As a result of taking out too much debt, new evidence shows an undeniable impact on borrowers' mental health.

Student Loan Planner surveyed 829 people, which revealed shocking data about debt load, student loan depression, and suicide.

As debt loads increase, so does the borrower's likelihood of suicidal thoughts, the study stated.

Researchers found 1 in 9 borrowers who owe $80,000 to $150,000 contemplated suicide because of their debt.

"The feeling of hopelessness gets you into a place where you feel like you can't recover," said Motlagh, a clinical psychologist with $300,000 in student loans.

May 07 11:35

Bannon: We're In An Economic War With China. It's Futile To Compromise

Getting tough with China to bring manufacturing jobs back to the United States was the linchpin of President Trump’s electoral march through the Rust Belt during his 2016 victory. Today, the goal of the radical cadre running China — the Chinese Communist Party (CCP) — is to be the global hegemonic power. The president’s threatened tariffs on Sunday demonstrate the severity of this threat. But as Washington and Beijing wrap up months of negotiations on a trade deal this month, whatever emerges won’t be a trade deal. It will be a temporary truce in a years-long economic and strategic war with China.

These are six “understandings” that highlight why it is futile to compromise with this regime.

May 07 11:29

Sorry Bernie and AOC! New Poll Shows Only 10 Percent of Americans Want Socialism

Between Alexandria Ocasio-Cortez’s “Green New Deal” and Bernie Sanders‘ “Medicare-for-All,” we hear a lot about the supposed newfound popularity of socialism in the United States today. But a new poll released Monday shows that only a very small minority of Americans favor such a system.

May 07 11:24

Has The Fed Done It? No More Recessions?

May 07 11:16

Pompeo says Canadian claim to Northwest Passage is 'illegitimate'

Canada's claim over the Northwest Passage is "illegitimate," U.S. Secretary of State Mike Pompeo said Monday in a major speech to the Arctic Council that Canadian experts called both provocative and frequently inaccurate.

Pompeo offered his characterization during a wide-ranging speech in Finland in which he also warned against China's increased Arctic presence, saying it threatens North American security and could be harmful to the environment.

May 07 11:14

Is Turkey The Snowflake That Unleashes The European Banking System Avalance?

Turkey’s debt problem, coupled with the plummeting lira, is arguably the most important risk factor for the nation’s economy.

To make matters worse, far from it posing a threat just to Turkey itself, it also has the potential to inflict significant damage elsewhere too, starting with key economies in the Eurozone.

At first glance, the situation in Turkey might resemble many past similar scenarios of a heavily indebted nation with a plummeting currency that descends into a severe recession and eventually gets bailed out, like Greece.

May 07 10:46

Curse of the London Gold Fix strikes again as SocGen abandons ship

News last week from the LBMA that French bank Societe Generale (SocGen) has resigned as a market maker for gold and silver continues an exodus from the London bullion markets that has included such former heavyweight bullion banks as Barclays, Deutsche Bank, Mitsui and Credit Suisse.

Indeed, SocGen, Deutsche Bank and Barclays were three of the five members of the infamous London Gold Fix which was hurriedly buried by the LBMA in 2015, so now an incredible 60% of that gold fixing clique have stepped back from the shadowy world of the London paper gold and paper silver markets.

May 07 10:35

Universal Basic Income Is a Pandora’s Box

By Paul Boyce

The case for a Universal Basic Income (UBI) is a strong one, in some ways. A UBI would stimulate aggregate demand, help those affected by technological change, and create a basic income for the poor. Its effectiveness and impact, however, depend on how much is given out. The benefits and consequences of a $100 UBI will be very different than one of $1,000. Therefore, for the purpose of this analysis, I will look at the case for a $1,000 per month UBI—as suggested by presidential candidate Andrew Yang...

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