When the Butterfly Flaps Its Wings
It remains to be seen what the impact will be from Mother Nature putting the nation’s fourth largest city out-of-business. And for how long? It’s possible that Houston will never entirely recover from Hurricane Harvey. The event may exceed the physical damage that Hurricane Katrina did to New Orleans. It may bankrupt large insurance companies and dramatically raise the risk of doing business anywhere along the Gulf and Atlantic coasts of the USA — or at least erase the perceived guarantee that losses are recoverable. It may even turn out to be the black swan that reveals the hyper-fragility of a US-driven financial system.
What The Buffett Indicator Is Really Predicting—Big Trouble Ahead
While investors insist the markets are currently NOT in a bubble, it would be wise to remember the same belief was held in 1999 and 2007. Throughout history, financial bubbles have only been recognized in hindsight when their existence becomes “apparently obvious” to everyone. Of course, by that point, it was far too late to be of any use to investors and the subsequent destruction of invested capital. This time will not be different. Only the catalyst, magnitude, and duration will be.
Why “Free Speech” Must Cover Offensive Speech
Although often lauded as America’s leading intellectual libertarian, he prefers to describe himself as a “classical liberal.” With the violence in Charlottesville, Va., still fresh in the mind, Mr. Epstein is concerned that the debate on free speech has taken an unwelcome turn. The American left, he says, is pushing hard for curbs on “offensive” speech, and “no good will ever come of that.”
Trump Derangement Syndrome and the American Left
That the American left is morally and intellectually bankrupt is hardly breaking news, at least to my longtime readers: I reported it way back in 1999, when “leftists” were cheering on the bombing of Serbia. I updated this critique when our vaunted “progressives” attacked Edward Snowden and Glenn Greenwald for exposing the depredations of the Surveillance State during the reign of Barack Obama. Of course, there have been – and continue to be – exceptions. Yet the old-style liberals, of the sort exemplified by, say, Alexander Cockburn, who never waffle when it comes to questions of war and civil liberties, are few and far between. With Cockburn’s death, in 2012, the species became as rare as an albino redwood – and, yet, not quite extinct.
The Coming Collapse of China’s Ponzi Scheme Economy
In my view human society is so dynamic that no command system can last long in charge of an economy. Attempts at this particular form of hubris inevitably end in either war or financial crisis. For the Soviet Union it was financial crisis. I think the same fate awaits Beijing. Consider crude steel production, a test-tube example of how command economies get it wrong. In the mainland this stood in June at an all time monthly record of 73 million tonnes, five times the total production in all of Europe…..Why is so much steel needed ? Simple. It is needed to build more steel mills so as to build more shipyards, ports, railways and bridges so that more ships can be built to carry more iron ore to more ports and thence along more rails and bridges to more steel mills so as to build more shipyards, ports, railways…
It’s Back: What’s Behind The Renewed Growth of US Shadow Banking?
In the wake of the 2007–10 financial crisis, there’s been sizeable growth of “shadow banking”— companies without banking charters entering lines of business traditionally associated with deposit-taking banks. Hedge funds that make direct loans to midsize businesses, online mortgage originators, peer-to-peer lending platforms, and payday lenders have all been on the rise. What’s behind this? According to Chicago Booth’s Gregor Matvos, Booth PhD candidate Greg Buchak, Columbia’s Tomasz Piskorski, and Stanford’s Amit Seru, much of the growth is due to regulations that have pushed banks out of traditional lending businesses. The researchers also attribute some growth to online technology that has lowered the barrier to entry in markets where lenders once needed networks of physical branches to have any hope of building business.
Operation CYA—–Afghanistan
So now he says his military’s renewed effort in Afghanistan will be directed at killing terrorists and eradicating evil. What else is new? The great disrupter of the establishment turns out to be – surprise, surprise – a man of the establishment. He craves its acceptance and adoration, but he’ll settle for the love of his base until the real thing comes along. “If you can’t be with the one you love, honey,” Stephen Stills wrote, “love the one you’re with.” The base may not like that he has put his “instincts” about Afghanistan on a shelf, but so be it.
Sears Revenues to Hit Zero in 3 Years. But Bankruptcy First
Zero is the inevitable result of a hedge-fund strategy of asset-stripping and cost-cutting at a retailer that had already been struggling before the takeover, and that now finds itself embroiled without effective online strategy in the American brick-and-mortar retail meltdown. But revenues won’t drop to zero. Sears won’t last that long. A bankruptcy filing in the near future is becoming inevitable as creditors and vendors are getting very edgy. Some vendors have now stopped supplying Sears, according to Reuters, fearing to be left holding the bag in a bankruptcy and unwilling to pay the high costs of insurance on their Sears receivables.
Why The Shale Miracle Won’t Last—-It’s Burning Capital
The bottom line is this: The US shale industry resembles a fraudulent Ponzi scheme much more so than it does any kind of “miracle”. How do I know that? Because, collectively, US shale companies have lost cash in every year of their existence. The burned through cash when oil was $100 — and again when it was $90, $80, $70, $60, $50, $40, and $30 a barrel. They burned through cash in 2008, 2009, 2010, 2011, 2012, 2013, 2014, 2015 and 2016. You don’t have to be a finance guru to appreciate or understand that any industry that persistently burns through cash is a bad deal. Especially one whose prime product – shale wells – principally deplete (-85%) in roughly three years. If you’ve been in business for 9 years drilling wells that mostly run out in 3 years, and you haven’t managed to produce positive cash flow at any point along the way, then it’s time to admit that your business model simply doesn’t work.
YouTube “Economically Censors” Ron Paul, Labels Videos “Not Suitable” For All Advertisers
Former US Congressman Ron Paul has joined a growing list of independent political journalists and commentators who’re being economically punished by YouTube despite producing videos that routinely receive hundreds of thousands of views. In a tweet published Saturday, Wikileaks founder Julian Assange tweeted a screenshot of Paul’s “Liberty Report” page showing that his videos had been labeled “not suitable” for all advertisers by YouTube’s content arbiters.
