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BarnacleBob

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BarnacleBob

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ErrosionOfAccord

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Did I forget to mention another coal company in the PRB is about to BK? CLD, the one that held strong through all the turmoil is trading between $.30 - .40 and looking for a buyer. I'm a little surprised there has been no hostile takeover at that price. My guess is that reclaim costs keep potential buyers scared. I thought about picking some up for shits n giggles but the reclaim issue told me... NO! I heard, though haven't seen it myself, that they lost access to one of their ports out west. One of their mines almost exclusively ships west because the BNSF goes down to one line (single lane traffic) west of Gillette and that particular mine is in Montana. Was thinking about it today, Cordero only has 9 million tons sold this year, that means there is a lot of untapped capacity. This could turn into some very low prices on the thermal coal spot.
 
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madhu

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If only the share holders are rewards at every turn and not the administrative management! There is no correlation between the company, its assets, valuation that is reasonable, a standard monetary unit that does not fluctuate then may be we can predict and pick the good ones. Till then it's fantasy casino valuation. Even casino the odds are better.
 

BarnacleBob

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BarnacleBob

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Sears plans to shutter after 126 years in business as Chairman Eddie Lampert's bid fails

*Eddie Lampert's $4.4 billion offer was the only bid that could keep the company going in its entirety.

*Sears, which also owns Kmart, filed for bankruptcy in October.

*ESL plans to contest Sears' decision, pointing to the money its spent on advisors.

https://www.cnbc.com/2019/01/06/sea...erts-bid-to-save-company-will-liquidate-.html
 

BarnacleBob

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Scorpio

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Volocopter is reinventing urban mobility

too funny,
can you imagine these dimwitted 2 leggahs in these?

yep, the kids will be able to handle it fine, the vid game generation,

just think of what .gov will require for safety features and child seats..............
 

madhu

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Monoclonal antibody is the new wonder drug that is making big pharma lots of money. Injectables are being given out like candy for ailments like migraine to multiple sclerosis. Any chronic ailments with immune related flare ups are fair game. Just keep watching the drugs that end with mab.
 

Uglytruth

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Volocopter is reinventing urban mobility
What they gunna buy them with? Reality video game points? They got no cash, jobs, skills or future. Or are they going to use debt & their wonderful attitudes?

I'm starting to think when the 30 year olds living in the basement turn 40 & the host / parents die off and the house needs repaired or taxes paid or any inheritance is spent and people have zero markatable skills and no one wants to work...... is when the shit hits the fan. Strangely I see that in about 10 years and that's when everything else collapses, pensions & ss.
 

BarnacleBob

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What they gunna buy them with? Reality video game points? They got no cash, jobs, skills or future. Or are they going to use debt & their wonderful attitudes?

I'm starting to think when the 30 year olds living in the basement turn 40 & the host / parents die off and the house needs repaired or taxes paid or any inheritance is spent and people have zero markatable skills and no one wants to work...... is when the shit hits the fan. Strangely I see that in about 10 years and that's when everything else collapses, pensions & ss.
Remember growing up in the sixties & seventies the older generation always talked about the "generation gap", the same as the generation before it and the one before that one ad infinitum.... the younger upcoming gen just cannot seem to get it right in the eyes of their parents generation... but yet the world continues long after the parents gen is long gone!

We are the older gen now... lighten up on the youngsters, in many ways they are much smarter than we were! It all works out! JMO
 

TAEZZAR

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Volocopter is reinventing urban mobility

too funny,
can you imagine these dimwitted 2 leggahs in these?

yep, the kids will be able to handle it fine, the vid game generation,

just think of what .gov will require for safety features and child seats..............
I've had this for many years. Just insert picture of the Volocopter.

osha. cowboy.jpg
 

BarnacleBob

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Uglytruth

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Remember growing up in the sixties & seventies the older generation always talked about the "generation gap", the same as the generation before it and the one before that one ad infinitum.... the younger upcoming gen just cannot seem to get it right in the eyes of their parents generation... but yet the world continues long after the parents gen is long gone!

We are the older gen now... lighten up on the youngsters, in many ways they are much smarter than we were! It all works out! JMO
BB I have nothing but respect for your posts. 100% agree but the sharp kids are outnumbered by the brain dead zombies.
The system was not as leveraged.
The expectations were not as high.
The work ethic was much better.
Expectations were more realistic.
Bankers were not banksters.
Pensions / security were the norm.
Family was the backbone of every community.
There was some truth & honesty in news, politicians, govt, institutions, neighbors had respect for each other, even the schools were better.
We all know the reasons why things are no longer like that.
Our culture has changed. How do you hold anything together when no one has anything to loose? Family, pension, security are the backbone of any society.

Drugs, welfare, food stamps, EBT cards, unwed mothers, poverty, disrespect everyone and everything (even we are guilty of that) but it's very design by tptb & the sheeple fell for it was to stop our culture. Our long term direction is clear and I shudder to even think where we would be now if she was the purple potus.
 

BarnacleBob

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Look out below, Credit Markets "may" be getting ready to take a dump.... This is big news! A rerun of 2007 GFC ???

U.S. Federal Reserve may need to backstop repo market: BAML

NEW YORK (Reuters) - Extreme volatility in a key funding market for banks as 2018 came to a close should serve as evidence that the U.S. Federal Reserve ought to be prepared to serve as a backstop to prevent the market from seizing up, Bank of America Merrill Lynch analysts said on Friday.

The $2.2 trillion repurchase agreement (repo) market enables banks and Wall Street to raise short-term cash to finance their trades and loans by using Treasuries and other securities as collateral.

On Dec. 31, the Secured Overnight Financing Rate (SOFR), a gauge on overnight repo rates, jumped to 3.15 percent, which was 75 basis points above the interest on excess reserves (IOER), or what the Fed pays banks on the excess reserves they leave at the central bank. Prior to the year-end spike, SOFR was running one basis point to six basis points above IOER.

If repo rates, some of which jumped above 5 percent that day, were to experience such sharp spikes more frequently, they could disrupt financial markets and cause other money rates to break above the top end of the Fed’s target range.

“Treasury (repo) volatility has raised questions as to how and when the Fed steps into money markets to intervene in order to cap or smooth volatile repo markets,” strategists Mark Cabana and Olivia Lima wrote in a research note released on Friday.

Repo rates often rise at year-end as banks and dealers pare their lending activity to conserve their cash to meet regulatory requirements. Still the most recent jump in repo rates was unusually large, according to Cabana and Lima.

This suggests the repo market “has become increasingly fragile and sensitive to shifting behavior of key market participants, especially banks and dealers,” the strategists wrote.

he Fed adjusted the IOER rates twice in 2018 in a bid to encourage banks to lend their reserves in the repo and federal funds market rather than to leave them at the central bank.

“We believe the Fed will ultimately need to be the repo backstop of last resort after the banking system exhausts it willingness to swap reserves for (Treasury) repo,” Cabana and Lima said.

They said the Fed will need to introduce a new program to keep a lid on repo rates.

In the minutes of their Dec. 18-19 policy meeting, Fed policymakers expressed an interest in learning about possible more “ceiling tools” to strengthen their control of the policy rate.


https://www.reuters.com/article/us-...ed-to-backstop-repo-market-baml-idUSKCN1P5273
 

the_shootist

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BB I have nothing but respect for your posts. 100% agree but the sharp kids are outnumbered by the brain dead zombies.
The system was not as leveraged.
The expectations were not as high.
The work ethic was much better.
Expectations were more realistic.
Bankers were not banksters.
Pensions / security were the norm.
Family was the backbone of every community.
There was some truth & honesty in news, politicians, govt, institutions, neighbors had respect for each other, even the schools were better.
We all know the reasons why things are no longer like that.
Our culture has changed. How do you hold anything together when no one has anything to loose? Family, pension, security are the backbone of any society.

Drugs, welfare, food stamps, EBT cards, unwed mothers, poverty, disrespect everyone and everything (even we are guilty of that) but it's very design by tptb & the sheeple fell for it was to stop our culture. Our long term direction is clear and I shudder to even think where we would be now if she was the purple potus.
Couldn't agree more. This is uncharted territory! We're under attack!
 

madhu

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https://publicintegrity.org/accountability/the-looting-of-russia/

How gold, diamonds, precious metals, art work was looted from the treasury of former Soviet Union and sold on the streets of sanfrancisco, Antwerp!. How politicians, security and intelligence agencies, mayors are all connected to criminal mafiosa. very interesting read. Nothing like the Russia that CNN fake news can ever air
 

BarnacleBob

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More tech: Self riding autonomous motorcycle.

 

Scorpio

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No Doc Mortgage: What’s Available Now



Lee Nelson The Mortgage Reports contributor

June 15, 2017 - 3 min read

The Return Of “Alternative” Mortgage Products
Before the housing collapse of 2008, NINJA loans were a popular alternative to the traditional mortgage. The NINJA mortgage — No Income, Job or Asset verification — was also called a “no doc mortgage.” That sounds pretty crazy, doesn’t it?
Well, maybe not if you’re a specialty lender who is comfortable with alternative documentation practices.
Similar products are now back in the market. It could be a good time to see if you qualify.
Verify your mortgage eligibility (Jan 23rd, 2019) What Is A No Doc Mortgage?
In its purest form, a no doc mortgage only requires a mortgage application and a signature. No pay stubs, bank statements or tax returns are needed. The original purpose of the loan was to make qualifying easier for applicants whose income and / or assets were difficult to verify in the traditional way.
Read: Get A Mortgage When You’re Self-Employed
They were not supposed to be the “liar’s loans” they turned into. When you sign a loan application, you’re certifying that everything on it is factual, whether backed up by documents or not. However, many people used the NINJA to get loans they could not afford.
This is no longer allowed.


The Ability To Repay (ATR) Rule
Under the Ability-to-Repay rule, all new mortgages must comply with basic requirements that protect consumers from taking on loans they can’t afford. Lenders must determine that an applicant can repay a loan before they can approve it.
Lenders don’t have to verify income the same way Fannie Mae does to comply with this rule. But they do have to make sure the loan is affordable.
Read: Credit Score Kill Your Loan Approval? Raise It With Rapid Re-score Now
This means they might determine your income by analyzing your bank statements and averaging your deposits, or getting a letter from your accountant or tax attorney. There are many ways to look at income that don’t require tax returns and a DNA sample.
Alt Doc Loans
“There are hundreds of scenarios in which people truly make enough money for a mortgage, but documentation doesn’t fit squarely into a peg,” says Steve Schnall, CEO at Quontic Bank in Queens, N.Y. His bank offers these loans, which are called “alt doc” or “lite doc” mortgages.
“If you have 35 to 40 percent to put for the down payment, and you have perfect credit, instead of collecting your tax return we check credentials from your CPA,” he says.
Read: Crazy Mortgage Programs That Really Exist
For well-off borrowers with complicated finances, alt-doc mortgages can be a lifesaver. They needn’t supply every statement and supporting piece of paper for their personal, partnership and corporate tax returns, and the piles of paperwork generated by their investments.
How To Qualify With Alt Doc
“We’ve been very successful with our borrower population. We haven’t had any delinquencies since starting this in early 2016,” Schnall says. “And we don’t plan on having any.”
Alt or Lite doc loans are not the crazy products from years ago — with no verification of any kind, no down payment, and no minimum FICO score. Schnall explains that his bank requires:
  • 35-40 percent down payment – significantly more than needed for a traditional mortgage
  • 700 minimum FICO
  • Savings of at least 12 months of principal, interest, taxes and insurance after closing
Read: Mortgage Options For A 640 Credit Score
Schnall’s bank is designated as a community development financial institution (CDFI) through a small U.S. Treasury program which funds economic revitalization in low-income communities.
“We have to originate the loans ourselves, “Schnall explains. “So, we get to know our customers. We lend in our community that we serve.”
Where To Find Alt Doc Mortgages
Mortgages with alternative methods for determining income are widely available, but they are harder to find than plain vanilla loans.
Smaller lenders, local lenders and specialty lenders are more likely to carry these products. Groups of investors are increasingly putting money into this part of the mortgage market, which yields larger profits than traditional financing.
What Do Alt Doc Mortgages Cost?
Lenders view loans with less documentation as riskier than traditional mortgages. In addition, the demand for alt doc home loans is high.
Read: How To Get A Mortgage For Rental Or Investment Property
Both of the above factors cause alt doc loans to be more expensive than standard conforming or government-backed mortgages. Expect your interest rate to be about two percent higher than you’d pay for a standard loan.
What Are Today’s Mortgage Rates?
Current mortgage rates are so low that even alt doc loans are affordable. Your alt doc rate depends on the size of your down payment, your credit score and the lender’s policy.
It may be harder to get several quotes from alt doc lenders, because they are harder to find. However, it’s even more important, because pricing varies more among lenders that don’t sell their loans to Fannie Mae and Freddie Mac.
Show Me Today's Rates (Jan 23rd, 2019)


https://themortgagereports.com/29273/no-doc-mortgage-whats-available-now
 

Uglytruth

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The Return Of “Alternative” Mortgage Products
What ya really mean is they are stacking the deck for more bailouts & more QE to make the banksters even richer than they are now and inflict even more pain on the few remaining soul's that have anything left?
 

the_shootist

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What ya really mean is they are stacking the deck for more bailouts & more QE to make the banksters even richer than they are now and inflict even more pain on the few remaining soul's that have anything left?
They'll keep squeezing until the teat runs dry, then they'll blow up the dollar and blow up the American economy then, set up shop in another country to be able to continue building globalism from there. They've been destroying countries and cultures for centuries. I believe that, sadly, they've finally won. We were all alive to witness the final turning point in the battle of good versus evil, first in Europe then finally, in America.
As Ronald Reagan once said:
1548384323343.png


We're all out of nickels so we have no more plays. Look around....the commies have won! We trusted the wrong people and listened to too many lies and were defeated from within. We let in too many crazies into the system and stood by as they stomped on the law and wangled themselves into more tax revenue while passing more laws and grabbing more control. We, the conservative people wanted to be patriotic, we always wanted to do the right thing...to live and let live. How did that work out for us? The have taken and taken and taken. The more they get the more they demand. The left will never stop. They will never go away nor ever be satisfied.
 
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madhu

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A coordinated global bailouts of all stock markets at the expense of all fiat currencies, starting with Japanese and European Central Bank followed by China and then the us. Don't think it can work as previous QE have not worked. Add to this the possibility that the Chinese may have cooked the books and have given rosy GDP numbers. Indian banks have non performing assets galore, official figure 10%. Real number double it. Failure to pay the debt on infrastructure projects such as new airports etc.
 

JayDubya

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The Major Risk That Oil Markets Are Underestimating
Nick Cunningham

http://www.silverbearcafe.com/private/01.19/majorrisk.html

The U.S. campaign for regime change in Venezuela could drive up oil prices.

The oil markets barely budged last week when the Trump administration first recognized Juan Gauidó as President of Venezuela, and prices hardly moved even after follow-up reportingshowed that the U.S.’ effort to topple Nicolas Maduro was a lot more coordinated than it may have seemed at first glance. Oil prices also largely shrugged when American sanctions on PDVSA were announced earlier this week.

However, by Tuesday, oil traders finally woke up to the fact that the U.S. campaign to topple Maduro by essentially issuing an embargo on Venezuelan oil exports could lead to major disruptions in the market. WTI and Brent both rose sharply.

Even as U.S. sanctions simply bar American entities from doing business with PDVSA, the measures could wreak havoc on Venezuelan oil exports. U.S. refiners import around 500,000 bpd of Venezuelan oil. American sanctions also dictate that any revenues from oil sales would be put into an escrow to be managed by the government of Juan Gauidó. Maduro would obviously not want to fund his opposition, so oil exports to the U.S. will essentially cease going forward.

Those shipments can be rerouted to other buyers around the world, but PDVSA will have to endure a heavy discount. Even then, there are only so many refiners capable of processing Venezuela’s heavy oil.

Moreover, Venezuela’s heavy crude must be blended with diluent in order for it to be an exportable product. To date, PDVSA has been importing diluent from the U.S. That will no longer be allowed, so it is unclear how Venezuela will manage this disruption. “If Venezuela fails to find a substitute, oil production will have to be scaled back,” Commerzbank wrote in a note.

On top of that, Venezuela’s shipments to the U.S. were the only ones that earned the country hard currency. The bulk of its shipments elsewhere – mainly to China and Russia – are sent as repayment for past loans. In other words, PDVSA does not take in cash for its oil shipments to those countries. Presumably, additional shipments to China, Russia or India in lieu of the lost market in the U.S. Gulf Coast could be sold for cash, but Maduro’s government is without leverage, which means the discounts will be painful.

There is also a power struggle underway to take control of PDVSA. Maduro still has control, but the jockeying for control of both the operations and the bank accounts may throw up unexpected disruptions. The company is already in serious disrepair.

Looking out over the medium-term, some of the analysis around the crisis in Venezuela has been described as bearish for oil prices, since a new government could end the mismanagement of PDVSA and revive oil production in relatively short order. But that is magical thinking. “Even in the event of a peaceful transition of government, we would not expect rapid growth in the output of Venezuelan crude in the near term; it is likely to take years to stabilize output, let alone reverse declines,” Standard Chartered analysts led by Paul Horsnell wrote in a note.

For U.S. refiners, the disruption could be significant. As Standard Chartered points out, the importance of Venezuelan oil comes down to the quality and proximity of the heavy crude, rather than the volume. Venezuelan oil has some of “the lowest degree of potential substitutability by other crude oils,” the investment bank wrote.

Canada offers one of the few alternatives, but is constrained by a lack of pipelines. Canada itself has had to incur production shut-ins because of a shortage of pipeline space. In any event, Canadian oil largely flows to the Midwest, and as such, cannot really replace missing barrels on the Gulf Coast.

But the crisis has implications for the broader oil market. “Production in Venezuela is likely to decrease by more than the shortfall in exports to the US of approx. 500,000 barrels per day,” Commerzbank wrote in a note. U.S. Treasury Secretary Steven Mnuchin did not appeared worried about the potential outages in Venezuela, noting that “many of our friends in the Middle East will be happy to make up the supply.”

His confidence could be misplaced. The U.S. burned some bridges last year with its “friends in the Middle East,” by demanding that they increase oil production in the wake of sanctions on Iran, only to issue a bunch of waivers, leading to a crash in oil prices. Riyadh probably won’t be as trusting this time around.

Indeed, Saudi oil minister Khalid al-Falih said this week that Saudi Arabia would lower its oil production to 10.1 million barrels per day (mb/d) in February and keep it at that level for the duration of the six-month OPEC+ deal. So far, there are no signs that the Saudis have a desire to help out Washington again.

The result could be significant upward pressure on oil prices. “The expected decline in Venezuelan oil production and the problems in Libya will make it easier for OPEC – albeit inadvertently – to rebalance the oil market by cutting production,” Commerzbank concluded.
 

JayDubya

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Everything You Know About Global Order Is Wrong

https://foreignpolicy.com/2019/01/30/everything-you-know-about-global-order-is-wrong/

If Western elites understood how the postwar liberal system was created, they’d think twice about asking for its renewal.

Klaus Schwab, impresario of the World Economic Forum, released a manifesto in the run-up to this year’s annual meeting at Davos, Switzerland, in which he called for a contemporary equivalent to the postwar conferences that established the liberal international order. “After the Second World War, leaders from across the globe came together to design a new set of institutional structures to enable the post-war world to collaborate towards building a shared future,” he wrote. “The world has changed, and as a matter of urgency, we must undertake this process again.” Schwab went on to call for a new moment of collective design for globalization’s alleged fourth iteration (creatively labeled Globalization 4.0).

Schwab is not the first to make this kind of appeal. Since the financial crisis, there have been repeated calls for a “new Bretton Woods”—the conference in 1944 at which, in Schwab’s words, “leaders from across the globe came together to design” a financial system for the postwar era, establishing the International Monetary Fund (IMF) and the World Bank in the process. It was the moment at which U.S. hegemony proved its most comprehensive and enlightened by empowering economist-statesmen, foremost among them John Maynard Keynes, to lead the world out of the postwar ruins and the preceding decades of crisis. Under Washington’s wise leadership, even rancorous Europe moved toward peaceful and prosperous integration.

This is a story with wide support in places like Davos. It’s also one that deserves far more scrutiny. Its history of the founding of the postwar order is wrong; more important, its implicit theory about how international order emerges—through a collective design effort by world leaders coming together to reconcile their interests—is fundamentally mistaken. What history actually suggests is that order tends to emerge not from cooperation and deliberation but from a cruder calculus of power and material constraints.

Bretton Woods may have been a conference of experts and officials, but it was first and foremost a gathering of a wartime alliance engaged in the massive mobilization effort of total war. The conference met in July 1944 in the weeks following D-Day and the final Soviet breakthrough on the Eastern Front. As a wartime rather than a postwar meeting, disagreements were minimized. Though the conference was about the future order of the international economy and though the aim of the talks was to link national economies back together, the building blocks were centralized, state-controlled war economies. The Bretton Woods negotiators were government officials, not businessmen or bankers. As they had done since the collapse of the global financial system in the early 1930s, central bankers played second fiddle to treasury officials. The Americans who were bankrolling the Allied war effort called the shots.

The basic monetary vision of Bretton Woods was to create order by establishing fully convertible currencies at fixed exchange rates, with the dollar pegged to gold. But the tough conditions of the Bretton Woods monetary architecture set by the United States proved far too demanding for war-weakened European economies. When Britain, the least damaged economy in Europe, tried to implement free convertibility of pounds into dollars, its attempt collapsed at the first hurdle in 1947; the social democratic Labour Party government in London quickly moved to stop the subsequent drain of precious dollars by reimposing exchange controls and tightening import quotas. Meanwhile, the grand design for a free trade order embodied by the Havana Charter and the International Trade Organization fell afoul of the U.S. Congress and was thus stopped in its tracks. The General Agreement on Tariffs and Trade (GATT) was its cumbersome and slow-moving replacement.

The talk of a connection between the present and the Bretton Woods moment is legitimated perhaps above all by the claimed continuity of the IMF and the World Bank, which were duly set up in December 1945. But beyond institutional titles, this supposed continuity is largely false. Within a year of the founding of its key institutions, almost the entire global agenda of Bretton Woods was put on ice. Already in 1946 the Soviet Union absented itself from the formation of the IMF and the World Bank.

With the Cold War paralyzing the U.N. institutions that had originally been intended to frame Bretton Woods, what emerged under U.S. hegemony was a far narrower postwar order centered on the North Atlantic. The Marshall Plan of 1948 was not so much a complement to Bretton Woods as an acknowledgement of its failure. For true liberals in both the United States and Europe, who hankered after the golden age of globalization in the late 19th century, the resulting Cold War economic order was a profound disappointment. The U.S. Treasury and the first generation of neoliberals in Europe fretted against the U.S. State Department and its interventionist economic tendencies. Mavericks such as the young Milton Friedman—true advocates of free markets in the way we take for granted today—demanded a bonfire of all regulations. They insisted that rather than exchange rates being fixed, currencies should be allowed to float with their value defined by competitive markets. In the 1950s, Friedman could be dismissed as eccentric.

The reality of the liberal order that supposedly came into existence in the postwar moment was the more or less haphazard continuation of wartime controls. It would take until 1958 before the Bretton Woods vision was finally implemented. Even then it was not a “liberal” order by the standard of the gilded age of the 19th century or in the sense that Davos understands it today. International mobility of capital for anything other than long-term investment was strictly limited. Liberalization of trade also made slow progress. The gradual abolition of exchange controls went hand in hand with the lifting of trade quotas. Only when these more elementary limitations on foreign trade were removed did tariff negotiations become relevant. GATT’s lumbering deliberations did not begin making major inroads until the Kennedy round of the 1960s, 20 years after the end of the war. And rising global trade was a mixed blessing. Huge German and Japanese trade surpluses put pressure on the Bretton Woods exchange rate system. This was compounded in the 1960s by the connivance of U.S. Treasury and U.K. authorities in enabling Wall Street to sidestep financial repression and launch the unregulated eurodollar market, based in bank accounts in London.

By the late 1960s, barely more than 10 years old, Bretton Woods was already in terminal trouble. And when confronted with demands for deflation, U.S. President Richard Nixon reverted to economic nationalism. Between 1971 and 1973, he unhitched the dollar from gold and abandoned any effort to defend the exchange rate, sending the dollar plunging and helping to restore something closer to trade balance. If our own world has a historic birthplace, it was not in 1945 but in the early 1970s with the advent of fiat money and floating exchange rates. The unpalatable truth is that our world was born not out of wise collective agreement but out of chaos, unleashed by America’s unilateral refusal any longer to underwrite the global monetary order.

As the tensions built up in the 1960s exploded, foreign exchange instability contributed to a historically unprecedented surge in inflation across the Western world. We now know that this era of inflationary instability would be concluded by the market revolution and what Ben Bernanke dubbed the “great moderation.” But once again hindsight should not blind us to the depth of the crisis and uncertainty prevailing at the time. The first attempts to restore order were not by way of the market revolution but by the means of corporatism—direct negotiations among governments, trade unions, and employers with a view of limiting the vicious spiral of prices and wages. This promised a direct control of inflation by way of price setting. But its effect was to stoke an ever-greater politicization of the economy. With left-wing social theorists diagnosing a crisis of capitalist democracy, the trilateral commission warned of democratic ungovernability.

What broke the deadlock was not some inclusive conference of stakeholders. The stakeholders in the 1970s were obstreperous trade unions, and that kind of consultation was precisely the bad habit that the neoliberal revolutionaries set out to break. The solution, as U.S. Federal Reserve chair Paul Volcker’s recent memoirs make embarrassingly clear, was blunt force wielded by the Fed. Volcker’s unilateral interest rate hike, the sharp revaluation of the dollar, deindustrialization, and the crash of surging unemployment dealt a death blow to organized labor and tamed inflationary pressure. The Volcker shock established so-called independent central bankers as the true arbiters of the new dispensation.

They put paid to what Margaret Thatcher referred to as the “enemy within.” But the global victory of the liberal order required a more far-reaching struggle. The world of the market revolution of the 1980s was still divided between communism and capitalism, between first, second, and third worlds. The overcoming of those divisions was a matter of power politics first and foremost, negotiation second. The United States and its allies in Europe raised the pressure on the Soviet Union, and after a period of spectacularly heightened tension, Mikhail Gorbachev chose to de-escalate, unwittingly precipitating the union’s collapse.

The truth is that the postwar moment that the Davos crowd truly hankers after is not that of 1945 but the aftermath of the Cold War, the moment of Western triumph. It was finally in 1995 that the Bretton Woods vision of a comprehensive world trade organization was realized. A sanitized version of this moment would describe it as a third triumph of enlightened technocracy. After Bretton Woods and the defeat of inflation, this was the age of the Washington Consensus. But as in those previous moments, its underpinnings were power politics: at home the humbling of organized labor, abroad the collapse of Soviet challenge and the decision by the Beijing regime to embark on the incorporation of China into the world economy.

Since 2008, that new order has come under threat from its own internal dysfunction, oppositional domestic politics, and the geopolitical power shift engendered by truly widespread convergent growth. The crisis goes deep. It is not surprising that there should be calls for a new institutional design. But we should be careful what we wish for. If history is anything to go by, that new order will not emerge from an enlightened act of collective leadership. Ideas and leadership matter. But to think that they by themselves found international order is to put the cart before the horse. What will resolve the current tension is a power grab by a new stakeholder determined to have its way. And the central question of the current moment is whether the West is ready for that. If not, we should get comfortable with the new disorder.
 

madhu

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More lies to masquerade the truth. Eventually the extraction of resources and capital reaches maximum and then diminishing returns. Breton woods 1944 was written to favor the victors. Not a equitable free trade? Eventually failed 1970. Revised and failed again. It's amazing that it ran for 66 years, Economic hit man, Keynes is probably the worst currency manipulator by creating unbridled debt and letting the western world hang itself in that debt trap. Someone has to step up and bail this system or else this utopia turns into a living night,mare for everyone. But Keynes was only concerned about his lifetime. Kicking the can down the road.

Government officials not businessmen or bankers were involved in creation and negotiation of the Bretton wood system. Bankers and businessmen are smart to get their job done through govt intermediaries. Ultimately follow the money and you end up funneling all the gains to the bankers and the bussiness cartels. Havana charter, GATT, etc were institutional ways of enriching congress and despots, criminals around the world as to where industrial activity would occur and who would get the spoils.

By 1960, the fiat dollar and its cousin the pound were causing havoc inflation worldwide leading to bankruptcies of the banks and creating nationalism. This was the time of nationalization of banks in India AKA confiscation of private property. To quell workers unrest over stalled wages and rising inflation, union leaders and mob boss were created. The rise of the federal banking and the era of interest rate manipulation to save the fiat dollar, at the expense of the working poor becomes the norm. Central planners now decide who will be the business winners/losers. Capitalism has deceived the western world into being extremely greedy and arrogant at the expense of the working poor the world over. Now that working poor had enough of that in the western world, you see yellow vest movements, strikes etc.

Who is going to bail this too big to fail enterprise? Do you really fault the would be lenders to save this system for imposing draconian conditions.
 

JayDubya

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Central Bank Gold Purchases Hit A Record In 2018

Official gold purchases reached a new record in 2018 as central banks continued to diversify away from the U.S. Dollar. Not only was 2018 a banner year for central bank gold purchases, but it was also the highest amount for more than five decades. Central banks haven’t bought this much gold in one year since Nixon ended the convertibility of the U.S. Dollar into gold in 1971.

According to the World Gold Council 2018 Yearend Gold Demand Trends, Russia funded most of the 274 metric tons (mt) of its official gold purchases with sales of its U.S. Treasury holdings. Furthermore, the next two countries with the largest increase in gold acquisitions in 2018 were Turkey with 51.5 mt and Kazakhstan at 50.6 mt.

These three central banks accounted for 58% of the total gold purchases last year. However, the World Gold Council stated in their yearend update that several European central banks were also increasing their gold reserves, such as Hungary and Poland.

The total central bank net gold purchases in 2018 were 651.5 mt, up nearly 75% from the year before. Thus, official gold purchases increased by a stunning 276 mt from the 375 mt in 2017:




Since 2010, the first year of official net gold purchases, central banks have acquired a remarkable 4,330 mt of gold (139 million oz). What a difference in central bank gold demand since the 2008 financial crisis. Again, according to the World Gold Council, central banks were net sellers of gold for the previous two decades. (1989-2009). From 1999-2009, central banks sold 4,921 mt (158 million oz) of gold into the market.

Now, since the 2008 global financial crisis, these eight central banks were the largest purchasers of gold:



From 2007 to 2018, Russia and China’s official gold purchases of 2,984 mt accounted for 75% of the group’s total (3,997 mt). As we can see, Kazakhstan was the third largest acquirer of gold reserves at 283 mt, followed by India (241 mt), Saudi Arabia (180 mt), Turkey (137 mt), South Korea (101 mt) and Thailand (70 mt).

I believe central banks will continue to be net buyers of gold because it is one of the only assets that is not backed by debt. However, that is not the case with most assets like stocks, bonds, and real estate which are backed by hundreds of trillions in debt. A physical gold bar paid in full contains stored economic energy, while the majority of assets are “ENERGY IOU’S.” When the world finally reaches peak oil, you do not want to be holding energy IOU’s.
 

JayDubya

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From Simon Black:

World’s largest pension fund loses $136 billion

February 7, 2019
Santiago, Chile

Things keep getting worse for pensions…

If you’ve read Notes recently, you know the pension fund crisis is one of our major themes. Simply put, these giant pools of capital responsible for paying out retirement benefits to workers are BROKE.

According to the World Economic Forum, pension funds around the world are short around $70 TRILLION. State, federal and local pensions in the US are $7 trillion short… and a recent report by Boston College estimates 25% of private US pensions will go broke in the next decade.

This is all happening because investment returns have been too low.

Pension funds need to earn about 8% per year to meet their obligations. And they traditionally do that with a conservative mix of bonds and stocks.

But with interest rates near the lowest levels ever, it’s impossible for pension funds to achieve that 8% with their usual tools (over the past year, they’ve only been earning around 5.5%).

So they’re getting desperate…

Illinois, one of the brokest states in the US, actually wants to issue billions of dollars in bonds to plug the hole in its pensions.

And, across the board, pensions are taking on WAY more risk in hopes of breaking even…

Since 2008, public pensions have increased their allocation to risky assets by 10%.

10% may not sound like much, but it’s a huge move by these conservative funds.

It translates into TRILLIONS more invested in exotic speculative investments.

So while the teachers and firefighters of the world are counting on pensions to conservatively invest their retirement savings, they’re trying to flip speculative real estate to juice returns (that strategy has actually increased sixfold).

Pensions are broke. They know that they will not earn enough money to pay their obligations. So they’re swinging for the fences. They don’t have another choice.

Sure, piling into risk assets has juiced returns for the past decade. But we’re now 10 years into the longest bull market in history. And basically everything is expensive today (particularly stocks and real estate).

So pensions can’t count on the same kind of returns into the future…

Ray Dalio, manager of the world’s largest hedge fund Bridgewater Associates, expects 10-year returns for a conservative US portfolio of stocks and bonds to be around 3% per year. Or in his own words, “low returns for a long time.”

(Dalio also warns of higher taxes, something we’ve talked about before).

And GMO, a world-class asset manager with a stellar track record, expects -2% per year... a far stretch from the 8% expected returns pension plans need.

Now, I’m not saying that the markets are going to crash tomorrow, or next week - or even this year - but at this stage of the cycle, taking on substantially more risk is ridiculous.

By the way, the same is true for individual investors.

In fact, about 18 months ago I started recommending our readers consider accumulating cash.

Sitting on cash when the markets hit bottom is a once-in-a-decade opportunity to get really rich.

I’m personally sitting on more cash than I ever have in my life...(and it turns out cash was the best-performing asset of 2018).

But pension plans are doing the exact opposite. They’re going all in on risk assets at the top… because they have no other choice.

And they are completely unprepared for what’s coming.

Pension plans themselves expect to earn 7.4% per year for the foreseeable future (already a full 60 basis points below what they require).

Their worst-case scenario return is 5.4% a year… I don’t know what their worst case looks like. But considering the potential for trade wars, a global slowdown, political infighting, nuclear war… 5.4% seems outright rosy.

There’s a high probability we see stocks plunge 40-60% this year or next. But pensions are living in some parallel universe where they’ll continue to earn 5% a year.

Of course, gambling the savings of regular working people at market highs will only lead to one thing… catastrophic losses.

If you want proof of that, look at what happened in Japan last week, home to the world’s largest pension fund. Its Government Pension Investment Fund lost $136 billion dollars in just 3 months.

The reason? A massive drop in the value of stocks and other “risky assets” (sounds familiar…?).

That’s the worst rate of decline the fund has ever experienced.

Now, it would be naive not to expect to see similar scenarios in other parts of the world over the next years, because the problems are the same...

Pension fund managers are oblivious to reality... and this is how they gamble the savings of generations of workers.

The authors of the Boston College report conclude that these ludicrous estimates “could yield required contributions that are ultimately inadequate to meet benefit obligations and, thus, threaten the financial stability of public plans.”

The contributions workers pay into the system are based on these unrealistic, overly optimistic numbers that have no way in the world of ever happening.

Which means millions of workers counting on that money for retirement will never be paid.

It’s clear as day: pensions are broke. The money they promised simply won’t be there.

That’s why we think it’s critical you take things into your own hands.

As an individual investor, you have options big pension funds don’t have - like investing in loans backed by assets (like wine, gold or real estate).

Or you can simply sit on cash and earn 2% while you wait for the correction to go bargain shopping.

And where things are today, we think these options make a lot of sense.

To your freedom,



Simon Black,
 

Scorpio

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hey guys,

maybe some have been watching, maybe not

while gold and silver have been on a nice run through the seasonal as we spoke of quite some time ago,
it has all been done with flat to up dollar activity, or a headwind

if the dollar continues to hold serve, this will eventually end the seasonal rally.

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Airbus scraps production of A380 superjumbo

European aviation giant Airbus says it will stop making its superjumbo A380 in 2021 after struggling to sell the world's biggest passenger jet. However, the company still announced a significant rise in profits for 2018.

European aircraft manufacturer Airbus on Thursday announced it will end production of the A380 double-decker passenger jet in 2021.

The Franco-German company had hoped the superjumbo would challenge Boeing's 747 and revolutionize air travel in the 21st century.

What's behind the move?

* The decision came after Emirates reduced its order of the model from 162 to 123 aircraft.
* The company said it had "no substantial A380 backlog and hence no basis to sustain production."
* Airbus had warned in January that it would stop making the plane if no new orders came in.

https://www.dw.com/en/airbus-scraps-production-of-a380-superjumbo/a-47511026
 

BarnacleBob

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Joe King

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Days Until spring 2019

31 days 4 hours 57 minutes 16 seconds
Yep, gonna be here quick.

Wanna know something else that's gonna be here quick?

Twentytwenty
 

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ErrosionOfAccord

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My personal debt is much more manageable than that. That's the only debt I concern myself with.
I agree. There's not a GD thing I can do about hyperinflation or what .gov does with the FRN. For a lot of years we, here at GIM, pissed and moaned about the consequences of fiat. Ron Paul was really the last hope for sensible monetary reform. I kind of like the idea weatherman has been putting up, exchange FRN's for real money then print useless FRN's to the moon in order to pay off the useless debt, shitcan the marshal plan and to hell with policing the world.

Once I paid off the house I figured I'd never go into debt again. I kind of lied to myself and took a $15,000 loan on 0% interest for a second car. If something came to pass and I couldn't make the note it doesn't matter. If I became destitute, I don't need a second car anyway. The bitch of buying a new car is any car being promoted at 0% means the interest is built right into the sticker hence, the astronomical price of new cars. The beauty of my cop bait sports sedan is that it was fairly cheap and it was not promoted at 0%. With my good credit and a large down payment I was able to demand 0% and the bank along with the dealership obliged. Sure, I already have $15,000 cash in the thing but I can live without the securitized car. Barring a major economic calamity I can sell it for more than I owe.

In short, for the first time in my life a car dealership, a bank and myself have a symbiotic relationship. Undoubtedly a rare thing to behold. It gets around the traffic on the miner 500 far better than a Tundra ever could.

“They call it the coal miner 500 haha! Because once them coal miners are going to work and coming to work, that used to be the main problem. But now its the oil field. So mix the oil field with the coal miners and you’ve got nothing but a ….race way. A dangerous one.”
http://insideenergy.org/2014/11/17/a-tiny-wyoming-town-stuck-in-boom-traffic/

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