Category Archives: Business

One Day Soon, The Sun Will Not Rise, by Chris Hamilton

The Econimica blog has a lot of great graphs, and it usually has a different perspective than everyone else. From Chris Hamilton at econimica.blogspot.com:

When the Q4 US resident population data is released, something that has not happened in the post WWII era will take place.   The population of adults aged 15-64 years old will decline.  This was not supposed to happen and will put an end to seven plus decades of continuous population growth which has meant a growing workforce, a growing consumer base, and growing tax base.  A growing core US population, something considered as sacrosanct as the sun rising, will not happen.  On a year over year basis, where there once were up to 3 million more homebuyers than the previous year, 3 million more car buyers than the year before, 3 million more potential customers…there will be likely be thousands fewer.

Many will assume this is a demographic issue of boomers exiting the working age population…but actually demographics is simply the early onset of a disease that will only progressively worsen.  This is truly a population growth issue, not simply a demographic distribution problem.

The economic system the US and world have adopted are dependent on perpetual growth on a quarter over quarter and year over year basis.  Two negative quarters (or even zero growth) and a recession is called and all the Federal Reserve’s and federal governments tools are employed.

Given the importance of growth, the most important factor in growing the economy is the rising demand represented by a growing population.  But the US fertility rate has been negative for 45 years (chart below) meaning the native population (plus immigrants) have continually failed to replace themselves.

This means US population growth has simply been a story of immigration.  And until 2000, N. America was the primary destination for the majority of the world’s immigrants.  However, since ’00 and particularly since ’05, the migration patterns have significantly changed.

To continue reading: One Day Soon, The Sun Will Not Rise

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Goolag Archipelago: Google Sends Powerful Migrant Crisis Video by Polish Government to ‘YouTube Jail’ by Virginia Hale

Even a government isn’t exempt from the Google agenda. From Virginia Hale at breitbart.com:

YouTube has ‘quarantined’ a hard-hitting video on Europe’s migrant crisis released by Poland’s conservative government, as part the platform’s crackdown on “hate speech and violent extremism”.

The Polish Ministry of Interior and Administration’s video has been placed in a controversial state designed by YouTube to limit access to videos it says contain “supremacist” or “extremist” content, but which don’t break any of the platform’s rules.

Opening with dramatic scenes of migrants swarming into Europe, the video highlights EU leaders’ insistence that the newcomers be spread throughout the continent, and forced even on unwilling nations through compulsory quotas.

But YouTube has now placed the powerful video in “limited state” — a condition designed to severely reduce the potential audience for “borderline” content. Videos placed under this system are unsearchable, impossible to embed on other sites, and removed from users’ recommended videos lists.

 The only way to reach ‘quarantined’ content is by clicking a direct link to the video in question, at which point viewers are warned that the “content is inappropriate or offensive”, asking them to click a button before they are allowed to proceed.YouTube has also shut down comments on videos which have been placed in this “limited state”, and removed view counts and up-votes and down-votes, making it impossible to see the reach of the video, or know how it has been received.

Google unveiled the policy in August among a raft of new measures which the video-sharing website said it will use to counter “extremism”. It announced a partnership with 15 “expert NGOs and institutions” — including the Council of Europe’s left-wing No Hate Speech Movement and George Soros-linked groups — who will direct them in identifying objectionable content.

To continue reading: Goolag Archipelago: Google Sends Powerful Migrant Crisis Video

How “Ghost Collateral” And “Yin-Yang” Property Deals Will Collapse China’s Credit Bubble, by Tyler Durden

SLL has long said that China may well be where the debt bubble implosion gets going in earnest. From Tyler Durden at zerohedge.com:

One lesson from the 2007-08 crisis was that the vast majority of financial market participants, never mind the general public, were unfamiliar with subprime mortgages until the crisis was underway. Even now, we doubt many have much understanding of repo, the divergence between LIBOR and Fed Funds from 9 August 2007 and Eurodollar liquidity. In a similar way, when China’s bubble bursts, we doubt the majority will be that familiar with “ghost collateral” and “yin-yang” property contracts either.
 
A second lesson from the 2007-08 crisis was that as the value of the collateral underpinning the vast amount of leverage declined, the surge in margin calls led to cascading waves of selling in a downward spiral.

A third lesson was that the practice of re-hypothecating the same subprime mortgage bonds more than once, meant collateral supporting the most vulnerable part of the credit bubble was non-existent. It only became apparent with the falling prices and margin calls. Few people realised the bull market was built on such flimsy foundations, as long as prices kept rising.

A fourth lesson was that in order for the bubble to reach truly epic proportions, key financial institutions, especially banks, needed to conduct themselves in a negligent fashion and totally ignore increasing risks.

Each of these warning signs from the 2007-08 crisis exists in China’s property market now – and other parts of its financial system – bar one…falling prices leading to cascading waves of selling. However, as we’ll explain, we think it’s only a matter of months away now.

 We should note that our thesis that China’s bubble would eventually be undermined by a “black hole” of insufficient collateral is one that we have been developing for several years. What we came to realise is that insufficient collateral is nothing more than normal business practice in the Chinese economy. It doesn’t matter whether it’s related to commodity-backed loans, property speculation or managing redemptions in the Wealth Management Products (WMPs) sector.

 

US Demand for Electricity Falls Further: What Does it Mean? by Wolf Richter

One way people track the actual economy in China, versus the one the government reports, is by tracking electricity generation. It seems fairly straightforward: an expanding economy uses more electricity, a contracting economy use less. In the US there are some complicating factors that make things a little trickier, but electricity generation is less than it was in 2010, and significantly less than it was in 2007. From Wolf Richter at wolfstreet.com:

Layoffs at GE Power, for example.

The weekend started Friday night with layoff news from GE’s power division, in two locations.

First, there was Greenville County, South Carolina, where GE Power is one of the largest employers with 3,400 workers.

“Based on the current challenges in the power industry and a significant decline in orders, GE Power continues to transform our new, combined business to better meet the needs of our customers,” GE’s statement said in flawless corporate speak: “As we have said, we are working to reduce costs and simplify our structure to better align our product solutions, and these steps will include layoffs.”

GE Power has not disclosed the number of workers that are part of this layoff. The facilities make large gas turbines and turbine generator sets used by power plants. The plant also makes 1.5-megawatt wind turbines.

Then there was GE Power’s facility in Schenectady, New York, which announced the layoff of an undisclosed number of employees, blaming “a significant decline in orders.”

GE Power has a problem: Electricity consumption in the US peaked in 2007 and has declined since, despite population growth of about 24 million people over the 10 years and despite economic growth.

The chart below, based on data from the Department of Energy’s EIA, shows annual electricity generation from 2001 through 2016. Note the growth in generation through 2007, the plunge during the Financial Crisis, the recovery, and the uneven decline since:

This trend continues in 2017. On Friday, the EIA released its Electric Power Monthly, with power generation data through September 2017. Over these nine months, electricity generation has fallen by 2.6% compared to the same period a year ago. Part of the year-over-year drop in August and September was due to the damaged electric grid in the areas affected by Hurricanes Harvey and Irma.

To continue reading: US Demand for Electricity Falls Further: What Does it Mean?

Why Are the Homes of the Elite So Ugly? by Bill Bonner

Some things just can’t be bought, like class and taste. From Bill Bonner at bonnerandpartners.com:

BALTIMORE – Yesterday, we saw the soul of America.

We drove by a house so imposing… so monstrously ugly… so laughably pretentious that we almost drove off the road staring at it.

On a suburban lot, it was as though it had fallen off the delivery truck and rolled into place, with no thought as to its surroundings.

It was a fake mansion!

Yes, dear reader, it is all fake – our money, our economy, our markets, our government… even our mansions.

Bitcoin Bonanza

On Tuesday, we made another 10% gain on our bitcoin “investment”… at a rate of about $4,000 per hour.

That’s more money in one day than we made during our first 10 years of work – combined.

Our coins, formerly worth nothing, are now worth more and more.

At this rate – a 10% rise versus the dollar each day – if you make a $10,000 investment, before Christmas, you will have $100,000 or more. Or less.

Possibly much less…

We toiled not, neither did we spin. We invented not. We earned not. Not a single morning did we get up at the crack of dawn to earn that money… nor a single night did we stay up late studying to make it happen.

Instead, it was as though we had walked through a casino and randomly yanked on one of the one-armed bandits. Ka-ching!

Nor did we learn anything… except that it’s a mad, mad, mad, mad, mad world – which we already knew! And if Civilization author Clive Bell is right, this is the best kind of money. We didn’t distract ourselves from “thinking and feeling.” We have no coal dust under our fingernails… and no hands calloused by years of hard work.

 

To continue reading: Why Are the Homes of the Elite So Ugly?

Bitcoin, Terence McKenna and the Future of the Internet, by Michael Krieger

Michael Krieger thinks it’s early days on the internet, cryptocurrencies, and a host of other innovations we don’t know about yet, because they haven’t been invented. He’s bullish on the future. From Krieger at libertyblitzkrieg.com:

We have millions of people who are warehoused in almost a larval state in their apartments, watching tv, paying for their medical plans, and glued to this mindless opera of cultural decay that’s recited day after day in front of them. I mean, it’s horrible to imagine — and this is a creation to some degree of the world corporate state, that probably has to be addressed. 

– Terence McKenna, The Internet is the Cure for TV (1994)

I know the title of this post seems strange in light of several factors. First, it’s been nearly twenty years since the dot-com bubble burst and it’s estimated that 3-4 billion people globally, or roughly 50% of the world’s population, already surf the web. Second, it’s become increasingly trendy in 2017 to highlight all the bad things about the internet, with social media typically singled out for the most intense and visceral criticism. Although I acknowledge some very real downsides of social media such as unhealthy obsession and addiction, most of the outrage we’ve seen this year has been focused on “fake news” and “Russia meddling.” In other words, most of the hysteria’s been political in nature, and would barely be registering anywhere near its current decibel level had Hillary Clinton won the election.

All of a sudden, there’s this insistence that social media is especially dangerous because it fosters the creation of echo chambers rife with tribal confirmation bias. Spaces where people with the same views simply talk to one another, and whoever’s willing to be the loudest and most aggressive at signaling to their tribe becomes the most popular. I don’t deny that this phenomenon exists, but like with anything else, you have to accept the bad with the good, and in the long-run the good far outweighs the bad. The main reason so many are having a panic attack right now is because the internet and social media allowed the public to talk to one another directly without being force-fed corporate media narratives and they decided to reject the chosen one, Hillary Clinton.

As such, the “very smart people” and “experts” have concluded the problem is with the voter, as opposed to the terrible candidates on offer or the corrupt system itself. This is the real reason for the current obsession with “fake news” and dangerous social media echo chambers. The elites are simply frustrated that their methods of propaganda no longer work as more and more people talk to each other online.

To continue reading: Bitcoin, Terence McKenna and the Future of the Internet

FCC Chairman Ajit Pai Calls Out Twitter, Facebook, YouTube and Silicon Valley for Censorship and Internet Content Manipulation… by sundance

SLL argued against so-called net neutrality when it was instituted over two years ago (see “The Net Neutered“). Current FCC Chairman Ajit Pai makes a strong case for rescinding the Obama era net neutrality regulations. From sundance at theconservativetreehouse.com:

The chairman of the Federal Communications Commission, Ajit Pai, fired a direct shot across the bow of the technocrats who control social media platforms today.

Chairman Pai righteously called out Twitter, Facebook, YouTube, and other platform control agents for being ideologically biased, and using their platforms to target their ideological opposition.

Defending his plan to roll back Obama’s one-sided internet rules, the Chairman outlined how he intended to ensure a free, fair and open internet.  [Full Speech Transcript below]

“The Internet is the greatest free-market innovation in history. It’s allowed us to live, play, work, learn, and speak in ways that were inconceivable a generation ago. But it didn’t have to be that way. Its success is due in part to regulatory restraint. Democrats and Republicans decided in the 1990s that this new digital world wouldn’t be centrally planned like a slow-moving utility. Instead, they chose Internet freedom. The results speak for themselves.

Now, much has been said and written over the course of the last week about the plan to restore Internet freedom. But much of the discussion has brought more heat than light. So this afternoon, I’d like to cut through the hysteria and hot air and speak with you in plain terms about the plan. First, I’ll explain what it will do. Second, I’ll discuss why I’m advancing it. And third, I’ll respond to the main criticisms that have been leveled against it.

First: what will the plan do?

When you cut through the legal terms and technical jargon, it’s very simple. The plan to restore Internet freedom will bring back the same legal framework that was governing the Internet three years ago today and that has governed the Internet for most of its existence.

Let me repeat this point. The plan will bring back the same framework that governed the Internet for most of its existence. If you’ve been reading some of the media coverage about the plan, this might be news to you.  After all, returning to the legal framework for Internet regulation that was in place three years ago today doesn’t sound like “destroying the Internet” or “ending the Internet as we know it.” And it certainly isn’t good clickbait. But facts are stubborn things.

To continue reading: FCC Chairman Ajit Pai Calls Out Twitter, Facebook, YouTube and Silicon Valley for Censorship and Internet Content Manipulation…