June 24, 2016 10:03 AM
Morning Reads for Friday, June 24th!
On this date in history, the United States Government released its Roswell Incident report, claiming that the aliens people claimed to have seen were merely life-sized dummies and former Italian Prime Minister Silvio Berlusconi is found guilty of abusing his power and having sex with an underage prostitute, and is sentenced to seven years in prison. Also, Georgia’s John Isner won the longest match in professional tennis history. It was also the first day of the Berlin Blockade, and thus eventual Airlift, pictured above.
Your Morning (just about) Reads!
- Inside Trump’s Most Valuable Tower: Felons, Dictators and Girl Scouts (Bloomberg)
- A Lottery Lawyer Explains What You Should Do if You Hit the Jackpot (Vice)
- TV Advertising’s Surprising Strength — And Inevitable Fall (Stratechery)
- Joker in the pack: Recent attacks give a glimpse of the sort of cyber-assault that could bring the world economy to a halt. Better defences are needed (the Economist)
- The media have reached a turning point in covering Donald Trump. He may not survive it. (Washington Post)
- Are Solar Panels Just for Rich People? (Priceonomics)
- Jimmy Johns ends non-compete enforcement (a professional victory for yours truly) (WSJ)
- Meet the Wall Street Titans Who Support — and Oppose — Trump (New York)
- To the bright and the rich of Silicon Valley, Trump is a loser (Financial Times); see also Silicon Valley vs. Trump (Financial Times)
- Survey: Are You Ready for Another Millennial Survey? (Bloomberg)
- Can Hillary Clinton Turn Red States Blue? (the Atlantic)
- The Clinton Campaign Seems To Think Pennsylvania Is In The Bag (FiveThirtyEight)
- New Ron Howard-directed Beatles documentary highlights the band’s formative years (LA Times)
- The interesting thing that happened when Kansas cut taxes and California hiked them (Washington Post)
- (I’m going to deep dive on that last one in a post for next week)
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Stefan
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Lot of topics on the Don is dead. If he can calm down, Clinton and Obama blunders may pull off a Brexit level surprise.
Brexit; Britain has concerns with hundreds of thousands of immigrants from poor EU countries, the EU bringing in more refugees from around the world to move freely within the EU and the EU HQ in Brussels with more financial demands.
Britain will have to redo all trade agreements. The largest importer of British goods, $60 billion, and most important ally is the U.S. Obama made a special trip in April to “warn” them that if they left the EU he would put them at the back of the line on redoing trade agreements. Looks like they pushed back.
If we hammer this sovereign nation, we will all loose and Putin will rejoice. Punishing Britain as promised, will upset the markets even more in a very rocky financial time.
The best thing our government could do to help calm the financial community is vow to be the first to support Britain and get a new trade deal done.
Do we buy stocks or gold today or just wait ?
Short term effect on markets is negative and is an overreaction. Meanwhile, other countries are looking at a similar exit.
Some good buying opportunities if you are long term.
Has not hit bottom, simple concept buy low sell high…..
As I said for years, the globalization which pits slave wages verse middle class, has created a demand problem. The west has tried to offset this with easy credit so people could buy things with credit, and no money to ever pay it back. Now 80 percent of people in the west have little cash in the west, with a mountain of debt. Now the politicians are wondering why people are pissed, A correction is coming, the only debate is how tough it will be. As Henry Ford warned the key to a stable economy is making sure, workers make enough money, to buy the products they make. Places like China have issues because how do you sell products to people making less than 2 bucks an hour. This is a mess…..
Neoliberalism: Oversold?
………Instead of delivering growth, some neoliberal policies have increased inequality, in turn jeopardizing durable expansion……..
http://www.imf.org/external/pubs/ft/fandd/2016/06/ostry.htm
Yes, John, neoliberalism oversold indeed. The EU’s open borders’ free range mobs were the last straw for folks in the UK. Too much, too fast, and most of all, not assimilating. Working class Brits said a loud “Enough already!”
+ 1 freaking billion!!! Unfortunately, too little, too late. Britain and France are lost to the invading hordes forever.
Andrew,
You make fun of people who had their jobs and wages outsourced? The IMF not admits they got screwed….you think it is funny? WOW…
Andrew,
Try walking in their shoes. Was Caesar Chavez and Ralph Abernathy Junior racist? Chavez ran the first minute man program at our boarders, and Abernathy helped him. Chavez testified before congress that immigration cannot be a tool to drive down wages.
…..Ironically, Chavez, the founder of the United Farm Workers union, was a foe of open borders and led a 1969 march on the California-Mexico border to oppose illegal immigration……
http://cnsnews.com/news/article/obama-establish-national-monument-cesar-chavez-foe-illegal-immigration
Andrew,
I agree the solutions have nothing to do with staying or leaving the EU, yet for the 75 to 80 percent with very little in the bank, and a mountain of debt, staying does not offer much….Not a straw-man argument, my point about Chavez,Abernathy, Mondale…is that they had the same opinion of the people you call racist about immigration being used a s a tool to drive down wages. When you screw with wages and jobs, you see the ugly side of people.
Drew, just wanted you to know that I’ll be sleeping better tonight knowing that I have been sharing various debates with a “pseudo-intellectual.” Who knew? I feel like I’ve gotten through to actually talk to Alan Colmes, Herman, Erick, Limbaugh or Hannity. So, thank you, Andrew, thank you!
……… The pensioners on fixed incomes who voted to leave now have even less in the bank due to the drop in value of the pound…….
The pensions are going backwards via falling wages. Less wages less money to put toward retirement. Less wages eventually stocks fall via lack of money to buy things ie less demand. Once again you offer no solutions….and call them stupid. If you were them, you would be ok with immigrants and trade deals killing your wages? You offer is, it could get worse?
Andrew,
You keep making this about Trump, and do not realize the Neo-liberal policies by both parties are killing the middle class. I debate from being an American, who could careless about tribal politics, verse you arguing from being part of a party, with blind loyalty. That is why you cannot defend your position, because deep down you know I am right. We have a demand problem with falling real wages for working middle class, and out of control personal debt. Both parties offer BS….More education/debt with no ROI on the education, spend less which drives demand further down and kills wages, stocks and jobs. BTW do not worry about more low wage workers in your country or out of your country driving wages in the toilet. You cannot understand why people are shouting BS?
Andrew,
This could be a wake up call to Neo-liberals that screwing labor is not working with flooding the market with cheap slave like labor. At the end, if you kill the middle class not enough people can but to support a functional economy.
I wrote this before the last collapse:
Economists, politicians, and executives from both parties have promised American families that “free” trade policies like NAFTA, CAFTA, and WTO/CHINA would accomplish three things:
• Increase wages
• Create trade surpluses (for the US)
• Reduce illegal immigration
Well, their trade policies have been in effect for about 15 years. Let’s review the results:
• Declining real wages for 80% of working Americans (while healthcare, education, and childcare costs skyrocket)
• A record-high 46 million Americans who don’t have health insurance (due in part to declining wages and benefits)
• Illegal immigration out of control
• Soaring trade deficits, much with countries that use slave and child labor
• Personal and national debt both out-of-control
• Global environments threatened by lax trade deal enforcement
Economists Keep Advocating Policies That Aren’t Working
Upon seeing incontrovertible evidence of these negative trade agreement results, economists continue with Pollyannish blather. Some say, “Cheer up! GDP is up and the stock market’s doing fine.” Others say, “Be patient. Stay the course. Free trade will raise all ships.”
Even those economists who acknowledge problems with trade agreements offer us only half-measures—adjusting exchange rates, improving safety nets, and providing better job retraining. None of these will close the wage gap in America—and economists know it.
Why Aren’t American Economists Shouting From Street Corners?
America needs trade deals that support American families and businesses in terms of wage, environmental, and intellectual property abuses. Why aren’t economists demanding renegotiation of our trade deals? There are three primary reasons:
• Economists are too beholden to corporations and special interests that provide them with research grants.
• Economists believe—but refuse to admit—that sacrificing the American middle class is necessary and appropriate to generate gains in third world economies.
• Economists refuse to admit they make mistakes.
Economic Ambulance Chasers
Now more than ever, Americans need their economists to speak truth and stand up to their big business clients. Instead, economists sound like lawyers caught chasing ambulances: they claim they’re “doing it for our benefit”.
Andrew,
Ironic you are making similar economic arguments defending slave labor trade deals.
…….Defenders of slavery argued that the sudden end to the slave economy would have had a profound and killing economic impact in the South where reliance on slave labor was the foundation of their economy. The cotton economy would collapse. The tobacco crop would dry in the fields. Rice would cease being profitable.
Defenders of slavery argued that if all the slaves were freed, there would be widespread unemployment and chaos. This would lead to uprisings, bloodshed, and anarchy. They pointed to the mob’s “rule of terror” during the French Revolution and argued for the continuation of the status quo, which was providing for affluence and stability for the slaveholding class and for all free people who enjoyed the bounty of the slave society………
http://www.ushistory.org/us/27f.asp
Andrew,
Spin it anyway you want, but the working conditions you support in places like China, India…are basically slave labor. Why have all seen the videos of the working conditions, and saw stories of people killing themselves via the working conditions. Bottom line your pro Neo-liberal policy has killed jobs and hurt wages. At the end, as the IMF warned it has created a massive spread between rich and poor creating a demand problem, which at the end will result in another correction.
……………But studies examining the impact of China’s entry to the World Trade Organization in late 2001 have made the case that between 1 million and more than 2 million of the 5 million American factory jobs lost since 2000 are traceable to low-cost imports.
“The ‘aha’ moment,” said Massachusetts Institute of Technology economist David Autor, “was when we traced through the industries in which China had surging exports to the local addresses of their U.S. competitors and saw the powerful correspondence between where China had surged and where U.S. manufacturing employment had collapsed.”………..
http://www.bloomberg.com/…/after-doubting-economists…
Andrew,
Help all us understand how this is not slave labor? You call this improvement?
Andrew, the pseudo-intellect way of opening up a can of hoity-toity insults to working class people just doesn’t get it in the real world. Reality is that Britain has been contributing the second highest amount of jingle to the EU, behind Germany. They have been paying in three times as much as they get in total for all the things you mentioned. So this move means they will have three times as much funding available for all that stuff, plus have money to shore up their state security.
The Brits got sick of dumping their hard-earned dollars into a kitty to support people who refuse to work even a 30-hour week in countries like Greece. They got sick of wading through mobs of illegal foreigners to reach the tube on their way to work. The masses of Britain who keep the engine running delivered a butt-whupping to the upper crusty “all we need is love” sort in the UK.
To paraphrase, it was Thomas Jefferson who said he knew that our Union would at some point go sideways (as presently doing), but he had faith that Americans would wake up and vote to set our ship of state straight again. Trump is not a cultured, life-long public speaker such as Hillary and the political class in this country. He is a regular speaking person who has worked in the real world all his life, like most of the folks who have turned out to vote for him. His rough edges make him appealing to the common man and woman, who are tired of pretty words and want someone to act boldly in their behalf. He personifies what Jefferson alluded to in the formative days of our nation. And he gives US voters a chance to make a resounding statement like the Brits just did. November is going to be interesting indeed.
Here’s the numbers: In 2015 the UK government paid £13 billion to the EU budget, and EU spending on the UK was £4.5 billion. So the UK’s ‘net contribution’ was estimated at about £8.5 billion. Thirteen is roughly three times four and a half. Lots of details: https://fullfact.org/europe/our-eu-membership-fee-55-million/
Don’t be disingenuous — you know I was not referring to EU citizens. Have you been to England lately? It’s pretty sad, definitely not good for tourism.
And Trump always speaks so kindly of you. 🙂 I will give you this: the world truly is way more complicated than it was in 632 A.D.
Britain’s exports to us are close or more than their’s to Germany and France combined. It gets really ugly if Obama makes good on his threat. Stick it to the colonialists, Soros goes short, Putin rejoices……yes it will be tough when the EU demands they take some refugees and the displaced in poor EU countries,
Rather we support this major sovereign nation that make up 5% of the world GDP but it looks like Obama might want to restore trade with Cuba or Viet Nam first.
We should lead the nations in getting trade talks moving, they will follow.
Andrew,
How does any of your solutions, help solve the declining real wages? You are not getting why the workers are pissed.
The “immigration” issue is just symptom of the problem. Real wages are falling for the middle class, and now the workers are finger pointing, at each other, rather than focusing on the real problem.
Andrew,
If your job and or wages were outsourced to paces like China and or immigrants with limited legal rights, you would be very angry as well, As far as old people like me I agree, we have sold off the future, for short term, not very well though out strategy. Plenty of blame for both parties……
Andrew,
Your view of no grey, just isolationism or globalization with slave labor/policemen of the world foreign policy is illogical at best. Live is about balance….obviously we have a problem,
What England will likely try to achieve is something akin to the original EC. Bilateral agreements with 15 nations that will somewhat achieve the four freedoms.
California is loosing people and growing its income gap. The middle is fleeing due to high housing costs including high rent and higher taxes.
https://www.manhattan-institute.org/html/great-california-exodus-closer-look-5853.html
P.S. Georgia’s issue is not being overtaxed but a very poor direction on revenue use, selective breaks and unbalanced, mismanaged distribution.
California isn’t a great comparison for Georgia, but there are some lessons we can take from each. We’ve reached the point where economic extremists have risen to positions where they can make decisions about the direction of the economy and we are seeing the effects.
Cameron, though not an extremist himself, gave in to the elements in his party who were. If UK does enter a recession, history will not be kind.
Much of the 2015 campaign concerned EU issues which is why the BREXIT vote was held. Cameron did not favor BREXIT but he did agree to hold the referendum. I would hardly call the 52% that voted for BREXIT “extremists.”
My bad for assuming you were going to use them as a shining example – I certainly agree with your direction, but suspect your path ? Regulate everything or regulate nothing ends in misery.
Achieve: Pay me now or pay me later. The U.S. Can do a lot to soften the landing or bluster around until the divorce gets ugly.
Irony? The Free State of Jones in Mississippi – was filmed in Louisana because of the tax breaks.
Did an overnight in a hammock near Clayton last night to get on the river early this morning so I’m just reading the news. Does polling not work in Great Britain? Is there really an investment exploit in a divorce between countries? In regular divorces the only ones who profit are the lawyers, will this be similar?
No exit polling is done. Polling as of 72 hours was to remain.
Paywall reads is more like it!
Regarding Isner, although the match was five years ago, I I don’t think he’s ever gotten his legs back. 70-68 in the 5th is brutal!