"Restore(s) a little sanity into current political debate" - Kenneth Minogue, TLS "Projects a more expansive and optimistic future for Americans than (the analysis of) Huntington" - James R. Kurth, National Interest "One of (the) most important books I have read in recent years" - Lexington Green
Chicago Boyz is an Amazon and B&H Photo affiliate and earns money when you make Amazon or B&H purchases after clicking on an Amazon or B&H link on this blog.
Chicago Boyz is also a BlogAds affiliate and may earn money from advertising placed on this blog through the BlogAds network.
Some Chicago Boyz advertisers may themselves be Amazon affiliates who earn money from any Amazon purchases you make after you click on an Amazon link on their ad on Chicago Boyz or on their own web sites.
Chicago Boyz occasionally accepts direct paid advertising for goods or services that in the opinion of Chicago Boyz management would benefit the readers of this blog. Please direct any inquires to
Chicago Boyz is a registered trademark of Chicago Boyz Media, LLC. All original content on the Chicago Boyz web site is copyright 2001-2016 by Chicago Boyz Media, LLC or the Chicago Boyz contributor who posted it. All rights reserved.
Posted by Kevin Villani on 28th January 2016 (All posts by Kevin Villani)
In promoting the Hollywood version of The Big Short by Michael Lewis, Paul Krugman (NYT, December 18) misrepresents the central point of this excellent book, previously made by Peter Wallison, who Krugman attacks for his Republican dissent to the 2010 Financial Crisis Inquiry Commission (FCIC) majority Report.
The Hollywood version reflects the Report’s fundamental conclusion that the root cause of the financial crisis was Wall Street greed: hardly newsworthy, disputable or dispositive. The Big Short is about the equally greedy speculators who were shorting the housing market: had they succeeded early on – as they do in less distorted markets – they would have prevented the bubble from inflating to systemic proportions.
Contrary to the “indifference” theorem (i.e., between debt and equity finance) of Nobel Laureates Franco Modigliani and Merton Miller, both household borrowers and mortgage lenders chose to finance almost entirely with debt, a strategy best described as “going for broke.” The first distortion – tax deductibility of debt – makes leverage desirable until discouraged by rising debt costs. The second distortion – federally backed mortgage funding as Depression era deposit insurance became virtually universal and the Fannie Mae “secondary market” facility morphed into a national housing bank – prevented these costs from rising. This highly leveraged strategy was guaranteed to fail systemically if bad loans entered the system. Read the rest of this entry »
Fifty years ago, if you were a company building automobiles or telecommunications equipment, you would have employed an assembly line full of workers. There also would have been people kitting parts, making inspections, doing tests, even running errands. If you operated a catalog company, you might have warehouse full of people loading and unloading goods, taking inventory, generating reports and packing and shipping goods. If you manufactured metal goods, you might employ several grades of craftsmen, from apprentice to master machinist, as well as cutters and welders, finish workers, inspectors, packers and shippers.
Much less so today. Automobiles and electronics and every other sort of manufactured good are increasingly made on robotic lines. From painting to welding to complex assembly, robots are replacing people. Warehouses can run almost autonomously, with goods stored in a 3D grid that is accessed, inventoried and replenished by increasingly intelligent networks of machines and computers. Jeff Bezos would like to robotize even the delivery of those goods via autonomous drones. That seems entirely doable, though the thought of computer controlled helicopters moving through the skies upsets some people.
Sixty six years ago, almost to the day, Isaac Asimov’s novel I, Robot was published. It was followed by four more novels over 30 years as well as 38 short stories in what became known as The Robot Series. In these books, Asimov explored all sorts of aspects of a robot populated world, including the dangers they might pose to people, problems with machines that think with digital logic, their inevitable evolution from simple mechanisms to organo-machines that were difficult to differentiate from human beings, except for their vastly superior intellectual capacity and increased lifespan, and some of the implications of that.
In a society relieved of all sorts of menial labor and drudgery, Asimov envisioned something of a Golden Age of Man. Material goods would be so cheaply and easily made that no one would lack for any basic goods, and most people would enjoy a standard of living and a degree of leisure time available now to only the extremely wealthy. That’s a view with some precedent in how other technologies have improved our lot, so it’s one possible future.
I find myself wondering, though. Suppose something like that were to come to pass. After all, we’re seeing signs of its development now. How does this future society actually work? How are people employed? What does one do to earn a living in a society where work is done by machines? We see this problem already, which tells us we’re farther along this road than maybe we realize. All the people that are not employed in Jeff Bezos’ warehouses or building electronics assemblies or automobiles, what do they do? In the past, when people were displaced from agriculture by machinery, they went to cities and were employed in large scale industrial and retail businesses. That is no longer the case. Not only have the manufacturing base dispersed across the globe chasing cheaper labor and fewer rules and regulations, even the human staffed retail store is increasingly in question as a viable model.
This is all creative destruction in action, I know. And we can wave our hands and say, Well, people will adapt, they always have! Yes they will. But to what? Everyone can’t be – and doesn’t want to be – a robotics designer or research chemist or test technician in a robotics factory. Will there simply be more people to do fewer jobs? Will the work week get reduced to 3 days on, 4 days off? I’m trying to imagine a world where the same or more people are available but less work needs to be done by them. And if the answer is more leisure time, is that necessarily a good thing? Do we get a Golden Age, or an Age of Sloth, where everyone gets crazier and more destructive in an attempt to amuse themselves. Who cares, eh? The robots will clean up the mess.
And is a robotic recursion process possible, where robots set about designing and building better robots? If we assume cookbook engineering can be encoded into a machine brain, millions of possible combinations may be scanned and modeled and simulated for each mechanism and each circuit, always searching for an optimal solution. And as everyone from Asimov to Clarke have asked, when is sentience reached and will we recognize it when it occurs? And then what? Our society is the early stages of major, ground shifting changes. There’s a lot on the horizon we haven’t even begun to think about to the level necessary. And how do we stay up with these changes if our political class is intent on bankrupting us and destroying our civilization?
When I was a young auditor I was on an airplane heading out to a utility client in Iowa. I sat next to a woman and her grade school aged child. I was making small talk with them and the kid asked me what I did. I said I worked with the electric utility. And he said
Are you the guy who comes over and turns off the power?
The child’s mom was embarrassed and the conversation was muted after that but I never forgot that exchange – the reality that, for the poor, electricity was a bill that had to be paid, and frequently it came ahead of other key necessities which then was brutally enforced by pulling the plug. Electricity is a big bill for the poor.
This discussion is completely relevant to what is occurring in Europe today, as these countries move to wind and solar renewable energy instead of economically efficient coal, natural gas and nuclear power. This great article from Forbes summarizes the current debacle:
To illustrate, Denmark and Germany are the proud wind capitals of Europe, but they also have the highest home electricity prices on Earth, 42 and 40 cents per kWh, respectively, against just 12.5 cents in the U.S…. Undeniably non-sensically, Germany has been paying over $26 billion per year for electricity that has a wholesale market value of just $5 billion
This sort of mass economic distortion (possibly suicide) has a real, human toll:
higher cost electricity (and energy) is horrible for our health. That’s because, since electricity is so indispensable, meaning that it “cannot not be used,” higher cost power drastically erodes our disposable income, which is the very basis of our health – while also disproportionately hurting the poor most. As a percentage of income, poor families pay 5-9 times more for electricity than rich families do. Predictably silently, higher cost electricity in Europe is killing tens of thousands of people a year, ”Excess Winter Deaths,” where older residents on fixed budgets in particular are forced to turn their heat down to avoid overly expensive utility bills. For example, there were 44,000 Excess Winter Deaths in England and Wales in 2014-2015
It is amazing that while Europe is able to penalize the poor and elderly on fixed income in the name of clean energy, their same economic champions, the car companies, ran elaborate schemes to defeat emissions limits on diesel cars in a massive scandal that we’ve all heard about. The cost of remediation and penalties will be in the billions.
Finally, in perhaps the bitterest pill, moving to expensive and unreliable energy sources means that the reliable blood-money energy available from Putin and Russia becomes even more important to maintaining their grid. While Western Europe has been making a (relatively feeble) effort to punish Putin for his atrocities in the skies and in Ukraine, they ignore the obvious morality issues linked to filling his coffers so that he can buy weapons and pay his soldiers that are used for repression and dictatorship in the east. It is amazing that there will be sit-ins for climate change and animal rights but the rights of Ukrainians and fellow European citizens apparently count for nothing if it enables their energy fantasies to be supported.
The Europeans are breathtaking in their ability to unilaterally punish the poor and the elderly and increase their payments to Putin while cheating on emissions testing and pursuing their odd goals of “clean” power. These issues apparently do not keep them up at night despite their real-world effects.
Posted by Michael Hiteshew on 15th December 2015 (All posts by Michael Hiteshew)
Nicolas Maduro threatened Venezuelans before the recent elections. Asked how he would respond to an opposition victory in Parliament, he responded,
“Venezuela would go through the most shady and poignant times of its political history, and we would defend the revolution, we wouldn’t surrender and the revolution would move into a new stage. Whoever has ears to hear, let them understand. Whoever has eyes to see, let them see the history clearly. The revolution will never surrender.”
“You should start praying, oligarch from the right, because the revolution will win on Dec 6th. Start Praying from now. For peace and tranquility, so you have no responsibility. And if not, we will take to the streets, and in the streets we are very dangerous, ok? It’s better if we stay here governing for the people. Everybody happy.”
The first thing that strikes me about all this is how much his rhetoric, albeit a little more plainly stated, resembles the rhetoric and riots of the American left. Give us what we want or there will be violence.
I wrote an article at Trust Funds for Kids about using hedged vs. unhedged ETFs for investing. If you are interested it is below the fold. The impact of currencies on investing is very large and linked closely with interest rate and Central bank activities.
Without adopting stringent policies such as the Kyoto treaty or cap-and-trade, the United States, the largest economy in the world, has the distinction of being the only country in the world to significantly reduce its greenhouse gas emissions. That’s why, in his address to world leaders at COP21, President Obama was able to tout that the “advances we’ve made have helped drive our economic output to all-time highs, and drive our carbon pollution to its lowest levels in nearly two decades.”
The free market, that Obama and his minions are working to destroy, again bails him out politically.
Nowadays, when I find myself feeling too good about things I read fund manager John Hussman’s weekly column and it brings me back to Earth. He may be off on the timing but it’s difficult to dispute his main argument that we’re in the late stages of a massive speculative bubble fueled by easy credit and other unwise govt policies.
There’s fraying at the edges in junk bonds and much nervous volatility in stocks, where successive sectors have inflated and then deflated since early 2015. Everyone knows we are due for a market debacle but no one knows when. It could happen in two days or two years. Meanwhile everyone stays invested because what else can you do with your money (answer: keep it in cash, but that’s hard to do until it’s too late) and maybe you can make some profits before the bottom falls out…
Over the past several years, yield-seeking investors, starved for any “pickup” in yield over Treasury securities, have piled into the junk debt and leveraged loan markets. Just as equity valuations have been driven to the second most extreme point in history (and the single most extreme point in history for the median stock, where valuations are well-beyond 2000 levels), risk premiums on speculative debt were compressed to razor-thin levels. By 2014, the spread between junk bond yields and Treasury yields had fallen to less than 2.4%. Since then, years of expected “risk-premiums” have been erased by capital losses, and defaults haven’t even spiked yet (they do so with a lag).
From an economic standpoint, the unfortunate fact is that the proceeds from aggressive issuance of junk debt and leveraged loans in the past few years were channeled into speculation. Excess capacity in energy production was expanded at the cyclical peak in oil prices, and heavy stock buybacks were executed at obscene equity valuations. The end result will be unintended wealth transfers and deadweight losses for the economy. Since the late-1990’s, the Federal Reserve has actively encouraged the channeling of trillions of dollars of savings into speculation. Recurring cycles of malinvestment and crisis have progressively weakened the resilience and long-term growth prospects of the U.S. economy.
[. . .]
Our outlook remains decidedly negative at present. I’ll emphasize again that market internals are the hinge that distinguishes a valuation bubble that expands from one that collapses, so an improvement in market internals would reduce the immediacy of our downside concerns, and would also tend to reduce our concerns about oncoming recession. In the absence of clear improvement in market internals – and last week was categorically opposite to that – I view the stock market as being in the late-phase of an extremely overvalued top formation that will likely be followed by profound losses over the completion of this market cycle, and the U.S. economy as being on the cusp of a new recession.
Hillary Clinton, if elected president, would likely do for gender relations what Barack Obama has done for race relations.
Speaking of Hillary, anyone remember her response when the harmful impact of her proposed healthcare plan on small businesses was questioned? Her response was: “I can’t be responsible for every undercapitalized small business in America.”
No one was asking her to “be responsible” for them, of course, only to refrain from wantonly devastating them. Should Hillary become the Democratic nominee, Republicans need to ensure that this quote, and other similar ones, are brought to the attention of every small business owner in America.
There are a lot of small business that are run by women, and an effective attack on the Democratic hostility toward small business should help to reduce Hillary’s advantage among the female demographic. Part of such attack should consist of hammering on the cultural factor–the truth is, Hillary feels contempt for you, Ms small businessperson–and part of it should consist of a very specific and tangible critique of particularly obnoxious regulatory and tax policies. (I recently ran across a message board on which Etsy sellers, really micro-manufacturers, almost all female, were discussing the pain suffered while trying to comply with IRS inventory accounting rules.)
Marco Rubio’s comment statement that “we need more welders and less philosophers” was unfortunate. His overall point is entirely correct–we need to stop stigmatizing vocational education and assuming that College is and should be the only path to a really good job–but he could have said it better. (See discussion at Ricochet, led by an actual philosopher.) Republicans need to be careful not to project contempt toward anyone who thinks of himself as an intellectual, in the way that Obama projected contempt for a wide swath of working people with his snide comment about “clinging to guns or religion”…which comment certainly cost him votes and would have cost him a lot more had Republicans been able to use it more effectively.
In that same debate, when the subject of whether large banks should be bailed out in crisis situations came up, neither Cruz nor Kasich mentioned the existence of the FDIC. I don’t care about Kasich, but Cruz should have responded that ‘we have the FDIC to protect the vast majority of depositors–although we need to ensure that it is adequately funded by fees to the banks–so the real question about a bailout has to do with protecting the bank shareholders and bondholders–and no, we shouldn’t do that.’
Dan and I go back and forth on the relatively arcane topic of municipal debt. As we all know, the state of Illinois is awash in debt. The situation is so bad that:
1. The State of Illinois is operating without a budget
2. The city of Chicago is proposing a massive property tax increase
3. Cook County just raised our sales tax (one of the highest rates in the country, already) and is proposing additional fees
4. Chicago Public Schools face a major deficit and without some sort of massive state tax relief is likely going to face significant layoffs and a likely teachers strike
5. Note that we are one of the few states and cities to be in such dire straits that we issue TAXABLE debt instead of MUNICIPAL debt which is generally exempt from Federal taxes and some state taxes. This is due to the fact that you generally cannot issue muni bonds to pay off operating expenses (like payroll and legal settlements)
The long term most indebted players have been Detroit, Puerto Rico, and the State of Illinois / City of Chicago. We saw how the Detroit bankruptcy occurred, with bondholders generally taking it on the chin and unsecured pension holders in fact emerging in a relatively better situation.
Now Puerto Rico is up to bat. They have massive, unpayable debts of many varieties (some secured by full faith and credit, some secured with revenues, some bank loans, etc…) and their governor basically said so out loud. All of this is inevitable as their island’s best talent has fled to the mainland USA and the remaining population is more and more reliant on government aid to survive. They also have failed to modernize their power infrastructure and / or build new industries outside of tourism which erodes their ability to compete against the mainland USA that in turn has much higher productivity.
The real issue – long term – is whether or not the Federal government will back up the states. This is essentially the “long game” of the State of Illinois and the city of Chicago – waiting to see whether or not the Federal government is really going to stand by and let us go bankrupt or not. If the government is ultimately going to pick up our debts, it is “business as usual”, and the corruption, back-scratching, and non-competitive behavior can just continue indefinitely, with taxpayers across the nation picking up the debris rather than forcing the citizens of Illinois to clean up our act.
Today Puerto Rico and the treasury announced that they are working to backstop the Puerto Rican debt with some sort of Federal umbrella per this article.
Puerto Rico and U.S. officials are discussing the issuance of a “superbond” administered by the U.S. Treasury Department that would help restructure the commonwealth’s $72 billion of debt, people familiar with the plan said.
And what a great name! A “superbond” means that all the US citizens will pick up the “super” obligations of our corrupt, crony-laden, inefficient city and state. That’s super!
This is the path out for Illinois and the city of Chicago. Play brinksmanship with Federal government and receive a backstop. Puerto Rico leads the way!
Today, October 2, is Manufacturing Day…”a celebration of modern manufacturing meant to inspire the next generation of manufacturers.” There are opportunities for plant visits all over the country, many open to the public and some limited to school tours, etc.
There’s a lot more manufacturing going on in the US than most people seem to realize, but not as much as there should be.
The 100-year threshold is also a statistical guess based on data on past storms and assessments of whether they’ll occur in the future. That means the models change every time a new hurricane strikes. The numbers being used as guidelines for construction are changing as time passes.
The standard also does not mean—can’t possibly mean—that a 100-year storm will occur only once per century. It means that such a storm has a 1 percent chance of happening in any given year. So for example, it’s technically possible for several 100-year floods to occur in just a few years, although it’s highly unlikely.
One way to look at it is that the engineers need to estimate how high a wall New Orleans needs to protect itself against a reasonably unlikely flood — say, a 1-in-1000-year event. This is the line of discussion pursued in the CNBC article.
Another way to look at it is to observe that the odds of another Katrina, or worse, within a specified period are highly uncertain. In this case a radical course of action might be called for. You do something like: take the best estimate for the wall height needed to protect against a 1000-year flood and then double it. Building such a levee would probably be extremely expensive but at least the costs would be out in the open. Or you might decide that it’s not the best idea to have a coastal city that’s below sea level, and so you would discourage people from moving back to New Orleans, rather than encourage them by subsidizing a new and stronger system of walls.
In this kind of situation the political incentives are usually going to encourage public decisionmakers to ignore radical solutions with high obvious costs, in favor of the minimum acceptable incremental solution with hidden costs: probably subsidies to rebuild the levees to, or perhaps a bit beyond, the standard needed to protect the city in the event of another Katrina. And it’s unlikely that any local pol is going to advise residents to move out and depopulate his constituency. Thus, eventually, a worst case will probably happen again.
A Ponzi scheme is a fraudulent investment operation where the operator, an individual or organization, pays returns to its investors from new capital paid to the operators by new investors, rather than from profit earned by the operator.
The sense of security more frequently springs from habit than from conviction, and for this reason it often subsists after such a change in the conditions as might have been expected to suggest alarm. The lapse of time during which a given event has not happened is, in this logic of habit, constantly alleged as a reason why the event should never happen, even when the lapse of time is precisely the added condition which makes the event imminent.
It is simple really: When the “Great Leader” builds a new stadium, everyone sees the construction. Nobody sees the more worthwhile projects that didn’t get done instead because the capital was diverted, through taxation, from less visible but possibly more worthwhile ventures — a thousand tailor shops, bakeries or physician offices.
At the same time, markets deliver the bad news whether you want to hear it or not, but delivering the bad news is not a sign of failure, it is a characteristic of systems that work. When you stub your toe, the neurons in between your foot and your head don’t try to figure out ways not to send the news to your brain. If they did, you’d trip a lot more often. Likewise, in a market, bad decisions show up pretty rapidly: Build a car that nobody wants, and you’re stuck with a bunch of expensive unsold cars; invest in new technologies that don’t work, and you lose a lot of money and have nothing to show for it. These painful consequences mean that people are pretty careful in their investments, at least so long as they’re investing their own money. Bureaucrats in government do the opposite, trying to keep their bosses from discovering their mistakes.
Indeed, this is an important point, and one that is too rarely understood. Rose Wilder Lane, the author and political thinker, offered the example of British versus French and Spanish approaches to colonial management:
The Governments gave them (in the case of the French and Spanish colonies–ed) carefully detailed instructions for clearing and fencing the land, caring for the fence and the gate, and plowing and planting, cultivating, harvesting, and dividing the crops…The English Kings were never so efficient. They gave the land to traders. A few gentlemen, who had political pull enough to get a grant, organized a trading company; their agents collected a ship-load or two of settlers and made an agreement with them which was usually broken on both sides…To the scandalized French, the people in the English colonies seemed like undisciplined children, wild, rude, wretched subjects of bad rulers.
Yet the English colonies, economically-speaking, were generally much more successful.
RWL also explained the way in which central planning demands the categorization of people:
Nobody can plan the actions of even a thousand living persons, separately. Anyone attempting to control millions must divide them into classes, and make a plan applying to these classes. But these classes do not exist. No two persons are alike. No two are in the same circumstances; no two have the same abilities; beyond getting the barest necessities of life, no two have the same desires.Therefore the men who try to enforce, in real life, a planned economy that is their theory, come up against the infinite diversity of human beings. The most slavish multitude of men that was ever called “demos” or “labor” or “capital” or”agriculture” or “the masses,” actually are men; they are not sheep. Naturally, by their human nature, they escape in all directions from regulations applying to non-existent classes. It is necessary to increase the number of men who supervise their actions. Then (for officials are human, too) it is necessary that more men supervise the supervisors.
And the planner will always demand more power:
If he wants to do good (as he sees good) to the citizens, he needs more power. If he wants to be re-elected, he needs more power to use for his party. If he wants money, he needs more power; he can always sell it to some eager buyer. If he wants publicity, flattery, more self-importance, he needs more power, to satisfy clamoring reformers who can give him flattering publicity.
Dan and I follow municipal bonds, which is a bit more exciting than it sounds. The State of Illinois, the City of Chicago, Cook County, and many other entities in which I am a semi-unwitting participant will likely soon be on the front pages of newspapers as it sinks in that we can never repay these debts.
Back in late 2008, during the height of that financial crisis, the State of Illinois issued debt. In this post I basically asked the question “Who is buying this crap?” and the answer was JP Morgan, showing its solidarity (in a way) with the state of Illinois by buying the ENTIRE issue.
Puerto Rico is the new problem child of debt failure, and as Dan calls it, a “gapers block” over the entire municipal debt market. There were a lot of good reasons to buy Puerto Rico municipal bonds for many years – it was tax exempt, it had high yields, some of it was insured and / or tied to revenue streams like power or water, and historically there had been few or no failures of large-scale municipal bond issuers. It was great to own this debt and collect the high interest rates, as long as you watched it and got out before it collapsed. In a way this is “momentum investing” of sorts – get in and enjoy the ride up, but make sure you clear the exit before everyone else runs out of the movie theater screaming “fire”.
But the question in the back of my mind was always “Who is buying that crap”. Not sophisticated investors who knew how to ride the wave up and get out before it collapsed, but people who honestly believed that a set of statements by politicians and / or laws as they were currently constructed would magically allow a tiny and impoverished island to pay inordinate debts while their economy imploded around them.
To Lev Steinberg, it seemed like a good place to park his nest egg. Puerto Rico bonds offered high returns and tax-free income. And there was little chance, his broker assured him, that the government would default on its debt. So Mr. Steinberg went all in, investing more than 85 percent of his retirement savings in funds with large concentrations of Puerto Rico bonds.“They told me this was safe,” said Mr. Steinberg, a 64-year-old mathematics professor at the University of Puerto Rico, “that the legal protections to repay the bonds were strong.”
The NY Times article describes how local brokers and banks created products that leveraged up these bonds with borrowed money and then they were sold to Puerto Rico citizens (they were illegal on the mainland). The article said that 20% of Puerto Rican debt is owed to local citizens, and they bought many of the most “toxic” issuances (those with the least protections, like pension obligation bonds).
Thank you, NY Times, for helping to answer the timeless question “who is buying that crap”. The answer is gullible citizens, who believed in their government’s promises, and also thought that years and years of high returns could be manufactured endlessly out of thin air without corresponding risk.
Now that Vermont has a mandate to get 75 percent of its electricity from renewable energy sources by 2032, residents will have to ditch automobiles and embrace a whole new way of life, the state’s top renewable energy CEO says.
“We’re probably going to have to abandon the car,” David Blittersdorf, president of All Earth Renewables, told Addison County Democrats in a recent presentation titled “Vermont’s Renewable Energy Future.
“The idea that we’re going to be flying around in airplanes — it’s one of the worst consumers of energy and emitting carbon. … I tell my kids … if you’re going to travel, travel now. Don’t wait 50 years. It’s going to cost you 10 times as much for every one of those flights.”
President Obama will unveil on Monday a set of environmental regulations devised to sharply cut planet-warming greenhouse gas emissions from the nation’s power plants and ultimately transform America’s electricity industry. The rules are the final, tougher versions of proposed regulations that the Environmental Protection Agency announced in 2012 and 2014. If they withstand the expected legal challenges, the regulations will set in motion sweeping policy changes that could shut down hundreds of coal-fired power plants, freeze construction of new coal plants and create a boom in the production of wind and solar power and other renewable energy sources.
What is interesting is that the EPA recently had their ever-expanding mandate struck down by the Supreme court just a few short weeks ago, when their attempt to kill off coal through regulation of mercury and other pollutants was invalidated for not sufficiently weighing the cost of the proposed initiative.
“There is an economic war here and this company, Polar, is at the heart of it. They hide products from the population, and inflate their prices!”
The government had first notified the landlord of plans to expropriate the industrial park in 2013, Nestle spokesman Andres Alegrett said by telephone from Caracas on Thursday. Nestle used the facility to dispatch about 10 percent of its products in the country, supplying sweets and drinks to the western side of Greater Caracas, he said.
About ten years ago I went on a junket to Switzerland and attended a talk with the CEO of Nestlé. Listening to him, it became very clear to me that he had little to no interest in free markets or capitalism properly understood. He saw his corporation as a “partner” with governments, NGOs, the U.N., and other massive multinationals. The profit motive was good for efficiency and rewarding talent, but beyond that, he wanted order and predictability and as much planning as he could get. I think that mindset informs the entire class of transnational progressives, the shock troops of what H. G. Wells hoped would lead to his liberal-fascist “world brain.”
Yes, Nestle has a history of cooperation with various do-gooder initiatives although it has kept its eye on profits.
Chanting, “What side are you on, my people, what side are you on?” and “Black lives matter,” the demonstrators moved to the front of the ballroom about 20 minutes into the event as Mr. O’Malley discussed proposed changes to Social Security. They remained there, heckling the candidates and posing questions, until organizers shut down the event, one of the centerpieces of the annual Netroots Nation conference.
The Democrats are going to have serious problems with the black activist movement.
Connecticut state Democrats voted Wednesday to remove the names of former presidents Thomas Jefferson and Andrew Jackson from their annual fundraising dinner, reportedly because of their ties to slavery.
According to the Hartford Courant, it only took two minutes for the Connecticut Democrat State Central Committee to unanimously pass a resolution stripping both names from the title of the Jefferson-Jackson-Bailey Dinner.
Party Chairman Nick Balletto proposed the change. He told the Daily Caller the decision, which apparently came under pressure from the NAACP, was about party identity.
Quote of the day, from Jeff Carter’s Points and Figures blog, a post entitled “Disrupting Government”:
Tech initially toppled major corporations. Motorola and Kodak are shells of themselves. Now, technology has the opportunity to eliminate wide swaths of government and all the cronies, cartels, employees and economic imbalances that come with them. As a society, we shouldn’t fight that. We should embrace it. Automation of government will make things cheaper for taxpayers. Elimination of old fashioned out of step government will make things better for society.
And the “Disrupting Government” post is a very “America 3.0” view of the future, which I heartily share and endorse.
But that is not the only reason I like his stuff. Jeff is a former floor trader, angel investor involved in the start-up scene in Chicago, and all around astute, sensible and articulate observer of politics, business and the economy.
Recently I went to Oregon for the first time. In my past work as a consultant and during vacations I’d been to 48 states – but not Oregon or Hawaii. We started out in Portland and traveled around most of the state and it was a good time, with a lot of odd insights.
The architecture in Portland was spectacular. I am a fan of the “Dwell” type house; a modern look with lots of glass. Portland had many older houses (Victorians) along with a lot of great new construction, especially in the downtown area.
Oregon in general had many older cars, often in pristine condition. I saw a lot of older pickup trucks off the main roads, still working hard for their owners. Not sure why but generally it must be that they don’t salt their roads.
Posted by Grurray on 8th July 2015 (All posts by Grurray)
Shoeshine boy trading club, China chapter
There’s an old Wall Street legend about Joseph Kennedy, bootlegger and head of America’s original soap opera political family. At the height of the stock market mania in the ’20s, he received a stock tip from a shoeshine boy. It goes something like this:
But the boy was not of the timid kind. “Oh yeah,” he yelled back at Kennedy, “well, I got a tip for you too: buy Hindenburg!” Intrigued, Kennedy turned around and walked back. “What did you say?” – “Buy Hindenburg, they are a fine company,” said the boy. “How do you know that?” –- “A guy before you said he was gonna buy a bunch of their stocks, that’s how.” – “I see,” said Kennedy. “That’s a fine tip. I suppose, I was a little harsh on you earlier,” he said, pulling off a glove and reaching in his side pocket for some change. “Here, you’ve earned it.”
Little did the boy know that Kennedy, a cunning investor, thought to himself: “You know it’s time to sell when shoeshine boys give you stock tips. This bull market is over.”
This is supposedly how Joe avoided the financial ruin of the crash. He was probably too busy stockpiling whiskey to really care very much, but it does make for a good story.
We’re reminded of this old saw today with some distant rumblings in the markets. Last week I was wondering what might cause our stock market to break out of its summer doldrums. Over the past few days we may have gotten the answer. While everyone was looking at the Greek crisis, China’s stock market has been crashing.
Investors with stakes exceeding 5 percent must maintain their positions, the China Securities Regulatory Commission said in a statement. The rule is intended to guard capital-market stability amid an “unreasonable plunge” in share prices, the CSRC said.
This rule sounds like it’s meant to ban bigwigs and fatcats from bailing out on the economy. However, like Kennedy in the ’20s, all the big money already exited and left regular citizens holding the bag. The Chinese always had a high rate of savings, but recently they have been putting more of it into their stock market using margin to to double down on already precarious positions.
Chinese brokers have extended 2.1 trillion yuan ($339 billion) of margin finance to investors, double the amount at the start of the year. But this often-cited figure is only part of the mountain of debt taken out to finance share purchases. Another 1.7 trillion yuan may have flowed into stock market investment from wealth management products, online lending sites and other sources, according to a Bloomberg survey of analysts.
This was a good old fashioned bubble, and now it looks like it’s bursting. This will have repercussions all over the world. As of this morning, US stock markets are down over 1%. With the reliance of our industrial and financial industries on the hyper-interconnected global markets, this one probably won’t go down quietly.
A while back I was talking to a friend of mine and he said
A package from Amazon shows up at my doorstep every day of the week
At the time I thought my friend was exaggerating, or perhaps a little bit crazy. But now it has moved to the point where I usually receive 1-2 packages each week from Amazon and now the yellow “minion” boxes abound in my condo.
What happened? I started to realize that with free shipping and the fact that my iPhone is usually nearby, whenever I am “out” of something around the house or need something that is unavailable, I just pick up my phone, type in a description in the App, and buy it immediately. Then I typically forget about whatever it is that I bought until I open up one of the regularly arriving Amazon boxes and go
Oh, that’s what I needed
You can buy pretty much everything that isn’t immediately perishable on Amazon, except for a few things like liquor. Thankfully I live near an enormous liquor store (but unfortunately not a high end grocery store, River North lacks a Whole Foods or Mariano’s) so that’s covered.