Firm

Hold your ground Brexit supporters. Never dilute your leverage.

Strength is the only thing these government careerists understand. There's a new realism afoot and it has nothing in common with a new normal. Firm is as firm does.
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Angel Merkel has for the first time signalled that she is willing to compromise on the issue of freedom of movement in the wake of Britain’s Brexit vote.

In comments seen as a significant shift, the German Chancellor suggested that the European Union needs to “discuss further” the rules around freedom of movement.
It suggests for the first time that Britain may be able to gain full control of its borders while still retaining access to the single market, something that EU leaders including Jean-Claude Juncker have previously said would be impossible.

Until now, Mrs Merkel has always insisted that there would never be any movement on the issue of freedom of movement, which gives EU citizens the right to live and work in any country on the continent.

Theresa May has pledged that freedom of movement is her “red line” during Brexit negotiations and that she will insist on full control of the country’s borders. Mrs Merkel’s comments came just hours after Boris Johnson, the Foreign Secretary, said it is “nonsense” to suggest that freedom of movement is one of the “fundamental freedoms” of the EU.

 Brexit supporting MPs last night said Mrs Merkel’s comments signal “the beginning of a new realism in the EU” and Whitehall sources told the Telegraph it is “the first crack in the armour”.

 telegraph.co.uk/news/2016/11/15/angela-merkel-suggests-she-is-willing-to-compromise-on-free-move

They Didn't Care

Well, guess what, not everyone likes Obama Care.

And here's why. Regulators will never tell you about the paralysis their rules invoke because they frankly don't give a damn. They want what they want. And if it's in your face, so be it the say. This was a program they had to know and just didn't care that it would single out older Americans and force them out of the job market. They didn't care. And they never will.
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What the media never explained to people, as they never do about employers, were all the regulations that sent small businesses spinning into chaos who now had to buy expensive tracking software and monitor all their employees or face huge fines.
 
First, we had to deal with the 9.5% "affordability" penalty, whereby an employee could never be forced to pay more than 9.5% of his gross earnings to health care costs.  That was revised slightly higher to 9.6% this fiscal year.  What it did was force employers to track an employee's wage every month to see if his earnings exceeded that artificial benchmark.  It left us scrambling constantly, discussing rate increase with our brokers as well as allocated hours to make sure we didn't screw it up.  The vigilance of such regulations was hugely demanding of our time.
In addition, and even more perversely, we were forced to offer "affordable" coverage to any employee working over 30 hours per week.  This forced us to begin looking at employees differently.  They were now all potential liabilities to the company, land mines that could go off any time, triggering a penalty.  So since our staff always had variable hours (not fixed), we were forced to track the part-time (less than 30 hours) versus full-time every month, and if any went over that amount, we had to immediately investigate why with each manager – who had to, in turn, talk to the employee who violated that arrangement.  The time spent with these discussions were commonplace and took us away from actually running our business.

Soon, the twenty-niner club was born out of necessity, and we had more part-time staff than full.  It created less loyalty in the workforce, higher turnover, and poorer morale.  Part-time employees had to find another part-time job elsewhere to get more hours.  It was absolutely foul.  Even more pernicious was the potential for ageism, since elderly employees had a higher premium and thus a higher cost to the company.  There was a natural in-built incentive to avoid hiring older employees due to a higher cost associated with them. 

Finally, the amount of time and money spent tracking, talking, monitoring, paying fines, and new taxes; filling out 1095 forms; and truly now being more of a health care company (thanks, Obama) that just happened to be in retail on the side just goes to illustrate how out of touch and callous Obama was, with a complete disregard for both individuals as well as employers in living their own lives.  And all for what, in the end?  To help breed dependency within the small percentage of folks who went to the exchanges and onto a subsidy so he could ingrain patronage and mine new votes from an increasingly dependent class?  

We have lost so much – not just as a company.  Our nation has wasted eight years with this vain and costly experiment in statist coercion.  It has stalled our economy and been hostile to hiring in general since now all you're doing is taking on new liabilities.  

americanthinker.com/articles/2016/11/obamacare_the_destroyer_how_it_has_hurt_small_business.

The Voice of Monetary Irrelevance.

Vice Chairman Stanley Fischer, one of the head honchos at the Eccles building in Washington, gave another speech today, this one "Post-Crisis."

What crisis, sir? The one you and your central banking buddies around the globe caused? Someone posted this question: "Why is he still taking?" You have nothing to say, sir. People have heard your meaningless economic babble before. Your opinion is about as relevant as a baby gnat on the ass of a huge adult male elephant. The problem, in case you don't get it, is you're getting paid big bucks with taxpayer money to deliver this gibberish. The kind word for that is waste. The more accurate one, BS.

In case you have not noticed there's a huge amount of debt floating around the globe these days.

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Vice Chairman Stanley Fischer is speaking at the Brookings Institution in Washington, on the topic of "Do We Have a Liquidity Problem Post-Crisis?"

Not surprisingly, Fischer's answer is that "liquidity is adequate by most measures, in most markets, and most of the time" and adds that it is “certainly too soon to declare that a broad reduction in market liquidity has occurred." Perhaps he should speak to actual market participants to get a true sense of what has happened to broad market liquidity.

He adds that there is no “convincing evidence” that liquidity has declined in equity, UST, corporate bond markets and adds that transaction costs seem to suggest liquidity has improved; however, measures of aggregate costs in corporate bond market may underestimate embedded liquidity costs. 
Fischer says that because trading volume is high, it shows no obvious signs of liquidity problem. Nonetheless, there is the potential for liquidity to evaporate in times of stress “deserves careful scrutiny,” along with broader risks to financial stability. While the potential for fire sales in bond markets is one area of concern, leverage at largest intermediaries is lower than before crisis due to recent regulation and supervisory changes; vulnerabilities from potential fire sale risks “are less significant.”

Fischer notes that it is possible that regulations have altered business model of dealer firms and liquidity; however, regulatory changes likely have enhanced financial stability and appear to be having positive effect, and believes that benefits may outweigh potential costs of possible reduction in liquidity.

zerohedge.com/news/2016-11-15/do-we-have-liquidity-problem-post-criris-fed-vice-chair-fischer-answers-live-feed 

Abolish

It's spelled ABOLISH!

No, that's not a cheer at some weekend Fall football game. It's an action that devoutly needs to be done.

Here you have another academic economist-bureaucrat flapping his forked tongue with scare tactics. That's what these people do best when their private reserves get scrutinized, try to scare people into continuing what is a failed process and in this case miserably failed institution. We say forked tongue because he tells us it's good for us. It isn't. It's good for the elites and their gaggle of academic, useful shills.

The truth is the central bank could disappear tomorrow and except for the initial shock any change usually begets, nothing terrible would happen. In fact, we just might see the return of real, sound money that the Federal Reserve and it apologists have so horribly destroyed over the years.They controlled inflation so well this time that the  people who got screwed by these central bank  bureaucrats paid dearly with a huge drop in their standard of existence. We say existence because for these people that's all it's been. And these geniuses knew that going in. 

Narayana Kocherlakota is a Bloomberg View columnist. He is a professor of economics at the University of Rochester and was president of the Federal Reserve Bank of Minneapolis from 2009 to 2015. He's a Bloomberg columnist. Do yo need to know any more? Independence is a misnomer. Abolishing is a far better option.
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Research has documented that central banks around the world have been better able to control inflation if they enjoy independence from elected officials. The election of Donald Trump seems like a good time to remind ourselves that, historically, the executive branch has presented the greatest threat to the independence of the U.S. Federal Reserve.

Since its founding in 1913, the Fed has experienced two big failures of independence. The first occurred during World War II and its aftermath, when the central bank held long-term interest rates down to allow the government to borrow cheaply. Inflation soared to nearly 10 percent during the early days of the Korean War, until the arrangement ended with the so-called Fed-Treasury accord in 1951.

The second failure occurred in the latter half of the 1960s and the 1970s. Presidents Lyndon Johnson and Richard Nixon put (largely covert) pressure on Fed chairs William McChesney Martin and Arthur Burns to provide monetary stimulus to keep unemployment low and generate more popular support for their administrations.  This led, in part, to the so-called Great Inflation of the 1960s and 1970s.

bloomberg.com/view/contributors/APvwpZqjDaA/narayana-kocherlakota

Who Caused It?

 We've been saying for a while now, central banks have failed.

Central bankers bailed out the big banks based on a meme they use about every generation or so, the financial system is on the brink. It's one of their favorite big lies. So they deliberately chose to screw the COLA crowd not to mention others, many still employed, with their crazy monetary nonsense.

But even if it were on the brink, there's another more important question here: Who caused it, you? What role did the elites and the politicians who take money from the elites to do their dirty work? No matter how you slice it, it's a pure straight forward question and it deserves the same pure, straight forward answer:Who caused the financial turmoil, them or you?

It's important to remember that this was a deliberate, premeditated choice by these central bank bureaucrats. Their aim was obvious, save the elites. Feet and flames often go together and need to. The huge orchestrated Trump blacklash is an attempt to negate that.
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Central bankers lowered interest rates to near zero or below to try to revive their gasping economies. In the process, though, they have put in jeopardy the pensions of more than 100 million government workers and retirees around the globe.

In Costa Mesa, Calif., Mayor Stephen Mensinger is worried retirement payments will soon eat up all the city’s cash. In Amsterdam, language teacher Frans van Leeuwen is angry his pension now will be less than what his father received, despite 30 years of contributions. In Tokyo, ex-government worker Tadakazu Kobayashi no longer has enough income from pension checks to buy new clothes.

Managers handling trillions of dollars in government-run pension funds never expected rates to stay this low for so long. Now, the world is starved for the safe, profitable bonds that pension funds have long needed to survive. That has pulled down investment returns and made it difficult for funds to meet mounting obligations to workers and retirees who are drawing government pensions.

As low interest rates suppress investment gains in the pension plans, it generally means one thing: Standards of living for workers and retirees are decreasing, not increasing.
“Unless ordinary people have money in their pockets, they don’t spend,” the 70-year-old Mr. Kobayashi said during a recent protest of benefit cuts in downtown Tokyo. “Higher interest rates would mean there’d be more money at our disposal, even if slightly.”

The low rates exacerbate cash problems already bedeviling the world’s pension funds. Decades of underfunding, benefit overpromises, government austerity measures and two recessions have left many retirement systems with deep funding holes. A wave of retirees world-wide is leaving fewer active workers left to contribute. The 60-and-older demographic is expected to roughly double between now and 2050, according to the United Nations.

wsj.com/articles/era-of-low-interest-rates-hammers-millions-of-pensions-around-world

Overnight

The Nikkei dropped 0.3 percent to 17,625.48 after opening higher as Asian shares were mixed Tuesday and Asian currencies and bonds continued to sell lower despite what some viewed as more positive economic data in an area hoping for such. Rate hikes are still in the air as is expectations for more fiscal stimulation.

The yen fell ti its lowest level in five months against the U.S. dollar,trading down 0.8% at 107.49. Much of the yen downturn followed the election results and the dollar's increased strength against several currencies. Monday, the yield on 30-year Treasurys rose above 3% in Asian trading hours for the first time since January. Investors are reasoning that Mr. Trump’s plans to spend more on areas such as infrastructure could spark higher inflation, leading the Fed to raise interest rates sooner than expected.

As U.S. bonds have become more attractive, money that had flowed into emerging markets this year has gone into reverse, pushing up the dollar’s value and raising yields on Asian government debt. Bond yields rise as their prices fall.

For now, rising U.S. bond yields are outweighing investors’ positive thoughts about Asian economies. Beside Monday’s strong GDP numbers from Japan, Malaysia last week reported better-than-expected third-quarter growth, rising to 4.3% from 4% in the previous quarter.
The selloff “appears to have been driven by a general rise in investor risk aversion,the Wall Street Journal reported. In other markets, the ASX 200 was off -0.36%; the Shanghai Composite dropped slightly, -0.15%; the Kospi -0.0-8% while the Hang Send was up 0.46%.

Gold traded up 0.45 percent at $1,225.45 an ounce. In the U.S. on Monday, gold prices fell to a five-month low of $1,211.08 an ounce, pressured by a stronger dollar and expectations that the Federal Reserve would raise interest rates in December. Oil prices gained ground during Asian trade; U.S. crude futures added 2.03 percent, at $44.20 after settling at $43.32 a barrel, while Brent futures at $45.21, up 1.76 percent from its settlement price at $44.43. Tuesday the Reserve Bank of Australia
held rates steady as she goes at their all-time low of 1.5%. It was some decreed a bet  that inflation was on its way back.

Tax Payer Supported Crap

Taxpayers are supporting all this crap. Money coming from those who oppose such silliness. Have it if you want though not on their tax dime. In states were this is happening, taxpayers should consider demanding this tax season refunds from state coffers or tax deductions on their returns if they resent any of their tax dollars being spent on play dough, coloring books and cry-ins.

It might even be reasonable to bring legal action against taxpayer-funded universities and the states they operate in to get the refunds.
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One of the more amusing bits of fallout from last week’s election has been the safe-space response of many colleges and universities to the election of the “wrong” candidate. But on closer examination, this response isn’t really amusing. In fact, it’s downright mean.

Donald Trump’s substantial victory, when most progressives expected a Hillary Clinton landslide, came as a shock to many. That shock seems to have been multiplied in academe, where few people seem to know any Trump supporters — or, at least, any Trump supporters who’ll admit to it.
The response to the shock has been to turn campuses into kindergarten. The University of Michigan Law School announced a ”post-election self-care” event with “food" and "play,” including “coloring sheets, play dough (sic), positive card-making, Legos and bubbles with your fellow law students.” (Embarrassed by the attention, UM Law scrubbed the announcement from its website, perhaps concerned that people would wonder whether its graduates would require Legos and bubbles in the event of stressful litigation.)

Stanford emailed its students and faculty that psychological counseling was available for those experiencing “uncertainty, anger, anxiety and/or fear” following the election. So did the University of Michigan’s Flint campus.

Meanwhile, even the Ivy League wasn’t immune, with the University of Pennsylvania (Trump’s alma mater) creating a post-election safe space with puppies and coloring books:

usatoday.com/story/opinion/2016/11/14/trump-liberal-college-campuses-michigan-yale-glenn-reynolds-column

Failed Central Banks

Before the Trump victory people given the PC world many have been forced to live in were smart enough not to come right out and say whom they would vote for, one of the reasons the polls despite all of MSM's attempts to rig things were so far off base.

Trump's victory has changed all that for the good, not just here but globally. Mario Draghi and his fellow Brussel's  monetary bedroom partners have failed. Central banks with all their Goldman Sachs connections have failed, not the system, but more important--the people.
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zerohedge.com/news/2016-11-13/italeave-looms-italian-crisis-indicator-spikes-record-high-after-trump-win

"The US election will help all those who have not had the courage to come out and say 'I will vote No'," proclaimed one of Italian PM Renzi's opponents as The FT reports the centre-left prime minister’s referendum on change is threatened by the global populist wave. Even before the US election, he faced a struggle to secure victory in the referendum, with most polls tilting in favor of voting 'No', albeit with many undecided voters, but opponents claim "many undecided voters in the polling booth will say ‘No No No’, just like Trump voters."
As The FT reports, Mr Renzi has said he will resign if his flagship changes to Italy’s political system are rejected in a referendum on December 4, making him a casualty of the populist insurgency sweeping western democracies and increasing investor concern for the eurozone’s third-largest economy.
That fear is most evident in Italian sovereign bonds which have collapsed dramatically in the last weeks (accelerating in the last few days) with 10Y BTP yields above 2.00% for the first time since July 2015 and the spread to Bunds at its highest in 2 years (despite collossal buying from the ECB)...

Going To Spread?

Don't look now but it's going to spread.

It's the elites' worse nightmare as more and more question the phony benefits belonging to the European Union. The globalists are on the run.
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At the beginning of 2016, certain outcomes seemed inconceivable. Like Leicester City becoming premier champions. Or Ireland beating the All Blacks in rugby.

On a slightly more profound level, very few people predicted Britain would go storming out of the EU. And, oh, the same goes for Donald J Trump becoming the 45th president of the world’s most powerful democracy.

It’s been that kind of year, so much so that other ideas that seemed fanciful are now beginning to flash up on the radar. 

And among them is another portmanteau word: Eirexit. Until very recently, the very notion of Ireland leaving the EU was so outlandish and marginal that it did not feature in any public discourse in a meaningful way.

http://linkis.com/www.irishtimes.com/n/zO3Qw

Until very recently, the very notion of Ireland leaving the EU was so outlandish and marginal that it did not feature in any public discourse in a meaningful way.
But it has now been thrust more into the limelight by a combination of Brexit, the Apple case, fears of an EU stealth attack on Ireland’s most sacred cow, corporation tax; and now, the election of Trump.

Certainly, Eirexit has gained some momentum of late. There is a small but growing band of public figures questioning the basis of Irish EU membership. Some are opposed to any notion of a federal Europe or EU superstate.

Others think Eirexit might turn out to be inevitable if circumstances change. And the public might be with them on this one more than politicians think. Over the course of 55 years, one person has been almost a voice in the wilderness in his consistent opposition to the EU.

In October 1961, Anthony Coughlan returned to Ireland to lecture at Trinity College Dublin.
A month later he was one of seven people – along with Noël Browne and future Labour TD Barry Desmond – who signed a letter to The Irish Times opposing Ireland’s application to join the European Economic Community. The idea was being mooted in political circles at the time.
“Our supreme folly is having joined the eurozone without the UK doing it,” he said. “It was lunacy for us to join. I cannot see us staying in the EU if the UK leaves,” says Couglan.

 mishtalk.com/2016/11/13/eirexit-coming-up

Your Own Peril

Francis Fukuyama in his Financial Times weekend piece, "Us against the world?" gets few things right in his assessment of what a Trump presidency means.

One of them is this: "Trump received a huge number of votes from better-educated and more well-off voters as well, who were not victims of globalization but still felt their country was being taken from them. Needless to say, this dynamic underlay the Brexit vote as well."

They had and still have that feeling, sir, because it is more than a feeling. It's a PC agenda-driven fact. As you yourself note "...many ordinary American citizens began to wonder why their communities were filling up with immigrants, and who had authorized a system of politically correct language which one could not even complain about the problem."

They found part of their answer in a most unsuspected place, sir, the Internet. But it is far more complicated and sinister than that. The phony democracy you keep referring to and lamenting its alleged passing turned deceitful and corrupt as the executive and judicial branches began usurping more and more power, circumventing not just the will but the opinions of the people. This is the essence of elitist power and raw contempt. Referendums and elections were held only to wind up languishing for years in the courts because the losers disliked the results. Tightening the border in California was one them.

So you can jawbone about the faux democracy all you want. That's what academics do, flap their tongues. Your definition of democracy is a curious one. You write a Trump presidency will "signal he end of an era in which the US symbolised democracy." It was always and still is a tainted democracy characterized by periodic crumb tossing by the elites who secretly believed--and clearly still  do-- the masses were too dense to ever see through the BS.

It's almost impossible to read an opinion piece today where some trite academic is bellyaching that  Trump needs to surround  himself with those who have some idea how Washington works. No sir, that's putting the cart in front of the horse. Washington is there to serve the people, not the way it's been. It's Washington's job now--as it was always intended to be-- to figure out how to best serve the people. To figure out what the people want, not what a handful of overpaid, under worked public servants want. And if they can't figure that out in a reasonable time, then another, bigger question surfaces: Maybe there's no need for a centralized Washington? Maybe it's an idea that's outlived its usefulness and time? See Western Europe.

Maybe the individual states need to do what those elitist SV tech heads are threatening because things didn't go the way they wanted. If the elites can consider it as they build their underground cities to escape the coming chaos in places like Texas and so forth, in a true democracy the masses would be afforded the same rights. Nor is this a time for so-called healing. The masses recognize political cant when they see it. They have had to live with that BS for decades. If you think not just view the wall of red in that post-election map of the U.S.

There's a crystal clear message here. Not a threat, just a fact. A cold, stone hard fact for the elites and the academics of the world. Under estimate the masses at your own  peril.