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Daily Digest 11/21 - Massive Asset Deflation Ahead, What Next If Obamacare Is Repealed?

Monday, November 21, 2016, 8:03 AM

Economy

Let’s Say Obamacare Is Repealed. What Then? (jdargis)

Now, I know that a budget reconciliation dismantling of the law is not a full repeal, because according to the rules it can only touch budget-related provisions. This excludes things like requiring insurers to take all comers for premiums that vary only by age and smoking status or preventing them from imposing coverage caps and lifetime limits, among other measures.

Trump and Our Greatest Mistake (Aaron M.)

Through this essay, my aim is to show that there are two Americas – rural and urban – one that has been in a recession if not depression for nearly a decade, and one that has not. The establishment has been ineffective in addressing the urgent needs of those in Rural America, and as such this establishment has been rejected by a geographic majority of the country. I submit that the economy is the driving force behind Trump’s ascendancy, that Trump is but a symptom of a larger disease, that the “Trump Phenomenon” is not limited to just the United States, and that the true Mistake that is Trump is not the man himself per se, but our inability to proactively solve deep problems that, if left long enough, will fix themselves through violent dislocation. Finally, I will provide my predictions on what happens from here.

The Peak & Decline Of International Reserves Warns Of Massive Asset Deflation Ahead (reflector)

International Reserves stood at about $10 Trillion in 2011, but the rate of growth slacked off; the weekly increases in Reserves (which Bloomberg used to publish every Friday) stalled and became smaller, week by week. As mid-2014 came around, the increases were quite small. It was clear that the trend was for ever-smaller increases, and that could only mean that finally there would be no increase, which would be immediately followed by decreases in the total of International Reserves held by Central Banks. That is exactly what took place.

Political Divide Splits Relationships — and Thanksgiving, Too (jdargis)

Democrats have dug in their heels, and in some cases are refusing to sit across the table from relatives who voted for President-elect Donald J. Trump, a man they say stands for things they abhor. Many who voted for Mr. Trump say it is the liberals who are to blame for discord, unfairly tarring them with the odious label of “racist” just because they voted for someone else.

It’s time to get rid of the Facebook “news feed,” because it’s not news (jdargis)

Mark Zuckerberg has protested since the election that it's preposterous to believe that Facebook could change anyone's minds based on their news feed—yet the company behaves as if it does. Given that Facebook's main goal is to serve you ads and get you to buy things, their number-one priority is keeping you glued to your feed. If you see a bunch of things you hate in your feed, you're going to stop looking at it and take your clicks elsewhere. Common sense dictates that Facebook should avoid showing you news that will upset you or make you angry.

Will We Ever See $100 Oil Again? (Josh O.)

In a chilling statement for oil companies, the report concluded that there is no longer a ‘ceiling’ of $100 barrels of oil that there used to be, before prices started to slide in the second half of 2014.

Research and development is also an area that has been badly hit, with oilfield service companies spending less, a significant trend as they spend more as a percentage of sales compared to the major oil companies.

It's official: NASA's peer-reviewed EM Drive paper has finally been published (Arthur Robey)

According to the law, for a system to produce thrust, it has to push something out the other way. The EM Drive doesn't do this.

Yet in test after test it continues to work. Last year, NASA's Eagleworks Laboratory team got their hands on an EM Drive to try to figure out once and for all what was going on.

Electric Cars Provide Little Threat To Oil Demand (Josh O.)

To be sure, the IEA sees brisk growth from the current low base going forward, estimating the total EV stock around the globe will expand by about 50 percent annually, hitting 10 million in 2020 and then 30 million by 2025. Still, while the 150 million units in 2040 may seem like a lot, it pales in comparison to the total car market – it will represent only about 8 percent of all passenger vehicles on the roads in 2040.

Gold & Silver

Click to read the PM Daily Market Commentary: 11/19/16

Provided daily by the Peak Prosperity Gold & Silver Group

Article suggestions for the Daily Digest can be sent to [email protected]. All suggestions are filtered by the Daily Digest team and preference is given to those that are in alignment with the message of the Crash Course and the "3 Es."

12 Comments

saxplayer00o1's picture
saxplayer00o1
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Dallas Stares Down a Texas-Size Threat of Bankruptcy

Yuan Falls to Eight-Year Low as Central Bank Cuts Reference Rate

Bloomberg-10 hours ago
The yuan dropped to its lowest level in more than eight years as the central bank weakened the reference rate. The currency fell 0.12 percent to 6.8963 per ...

Malaysia asks foreign banks to stop ringgit trading

Financial Times - ‎10 hours ago‎
The Malaysian central bank's moves to curb what it describes as “speculative and damaging” offshore trading in the ringgit are causing disquiet among investors and raising concerns about the regulator's handling of the markets.

India central bank eases bad loan rules for small borrowers after ...

Reuters-4 hours ago
A man sits in a queue to deposit or exchange his old high denomination banknotes outside a bank in Ahmedabad, India November 21, 2016. REUTERS/Amit ...

Banks Have Received $80 Billion In 500, 1000 Rupee Notes, Says ...

NDTV-2 hours ago

The central bank has also made a series of announcements today, in one, allowing banks to give borrowers an additional 60 days for repayment of housing, car, ..

Cash purge gives welcome boost to Indian banks

Reuters-11 hours ago
There have been new bank deposits, totalling 4 trillion rupees ($58 billion), as of November 17, according to a treasurer at a public sector bank. The government ...

Dallas Stares Down a Texas-Size Threat of Bankruptcy

New York Times-11 hours ago
... Fire Pension System has asked the city for a one-time infusion of $1.1 billion, ... Moody's reported that Dallas was struggling with more pension debt, relative to ...

State says literacy not a right in Detroit

The Detroit News-10 hours ago
A $617 million aid package approved by lawmakers this summer relieved the district of nearly a half-billion dollar debt and provided $150 million in startup ...

Brazil Economists Lower 2017 GDP Call for Fifth Straight Week

Bloomberg-2 hours ago
Brazil economists trimmed their forecast for economic growth next year to its lowest since July, as the market expects the central bank to be less aggressive ...

Asian Corporate Debt Plans Run Into 'Trump Effect'

Wall Street Journal-1 hour ago
The sudden stalling in debt markets could threaten a model of growth that has ... Asian companies have already raised $1.1 trillion in bonds so far this year, ...

Nigerian recession deepens, oil output falls worsen dollar shorta...

Reuters-1 hour ago
... analysts expect the central bank to hold benchmark rates at 14 percent, amid ... exacerbated by currency restrictions imposed by the central bank last year in ...

 

Uncletommy's picture
Uncletommy
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Keep your eyes on India

The Reuters article is an excellent example of how a governments actions can thwart the need to artificially create liquidity. It appears to me that the Modi government has decided to work with what it has (domestic wealth) and encourage investment, locally, in "nuts and bolts" rather than "financials" as we see in the big capital markets. IMHO, speculators chase yields while entrepreneurs chase productive profits. As long as we all sit on our 'asse(t)s' expecting an undeserved entitlement of "prestidigitated" liquidity, we can only expect indebtedness to increase. Factor in the "three E's", and, again, we are faced with the inevitable conclusions of PP.  For me, data always Trump's opinion. (Italics, mine)

 OECD Compendium of Productivity Indicators 2016, GDP per hour worked

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Some riot here

Ummm....  I'd say the police at the Dakota protest are doing anything they can to raise hatred of themselves. 

Looking at this "riot", that is, people huddled under tarps... 

https://www.washingtonpost.com/news/morning-mix/wp/2016/11/21/police-citing-ongoing-riot-use-water-cannons-on-dakota-access-protesters-in-freezing-weather/

 

...  I wonder why this definition of riot applies, and not "not our president" in which people are being shot... not St. Louis...  not in Chicago, where motorists are hauled out of their cars, beaten...

... why is THIS a riot? 

Can somebody explain?  My dictionary is wilting.

 

sand_puppy's picture
sand_puppy
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I hear you Michael

People standing around in the dark getting blasted by a water cannon for something that they believe in.

So where will this lead? 

Acknowledging that "Predictions can be very difficult.  Especially about the future....."

I can imagine the story line where a respected and much loved protester gets knocked out, get a serious concussion, and intracranial bleed and a broken jaw and must be taken to OR for emergency craniotomy, then to the ICU where she lies in a coma, prognosis uncertain.  A buddy snaps.  He gets his deer hunting rifle and heads back to the protest site.  He shoots the guy manning the water cannon and the one on the turret gun of the BearCat.   The security contractors are frightened and angry (and itching for a fight, being that they are the only ones armed and it can be fun to kick a$$) and open up on the crowd.  Dozens die.  Hundreds wounded.  All is video recorded but electronic jamming delays sharing by 12 hours.  But it gets our.  Suddenly lots of people with deer hunting rifles "appear out of nowhere" and head out to vent decades of rage against "the machine."

The trouble is, that nobody knows quite who should actually be blamed.  Years of information distortion leave the common people with little objective information about how this crisis evolved.  TV newscasters explain how things are to everyone.

A has successfully set B & C against each other.  B fights for freedom and to throw off oppression and will not be ruled by conservatives.  C fights to preserve civilization ruled by law and against anarchy and terrorism and hippie-dippy-liberals.

B and C shoot each other and scare the living daylights out of each other and everyone else with the eruption of rage, pain. betrayal of their own values.

A civil war erupts and lots of pain ensues. .....  Several chapters of the story are left out .....

Fortunately, when requested, A is able to help, and reluctantly agrees to restore order with a centralized control network.  People now appreciate checkpoints, their implanted identification chips, biometric databases and are thankful that the very nice big brother types (A) are watching over all of us with TV cameras and the big computer, Hal, who knows where everyone is, all the time.

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Standing Rock and Being Played

Michael, the article you posted is a perfect example of 'being played.'

Not you, per se, but the average person, I mean.

The WaPo just leads with the official description of 'a riot' 

Really?  A "riot?"

The definition of 'a riot' is "a violent disturbance of the peace by a crowd."

The only people being violent here was the police.  They injured 167 people, many of them old, and all of them peaceful.

How can any newspaper possibly justify using the word riot to describe the actions involved?

Here's what I wrote on Facebook this morning:

Standing Rock is a statement on the current use of power in the US to enforce corporate rights over human rights and it tells a very sad tale. Which is why I am very confused as to why some people are so distraught over the potential for a future increase in racism and violence when there is an active, horrible and obvious violent and racial situation playing out *right now* at Standing Rock.

Is it because the idea of something is worse than the reality? Is it because this is state sanctioned racial violence, and that somehow makes it different, or OK? Would some (many?) people be reacting differently if it were Trump instead of Obama as the seated president being completely silent on this matter? I am seriously asking these questions.

I am stumped by the apparent hypocrisy on display...my theory on why my Twitter and Facebook feeds are nearly silent on Standing Rock (but aflame with single acts of random violence and/or offense from elsewhere) was spelled out in my last piece. Most people seem not to care because they haven't been told to care by the media. That's how I see it.

They are being played, and because nobody told them to become outraged by the raw display of petty, abusive, inhumane power being seen at Standing Rock, they are neither engaged nor concerned. In my tiny world, moral outrage cannot be relative. You either have a moral position or you have something else. Something is either a wrong worth righting, or it's merely a foil to advance your particular belief system(s). With an intact system of morality none of us need to be told what is right and what is wrong.

We just know it when we see it. I see vast wrongs being committed at Standing Rock. If you think that such actions will remain confined to a remote area with indigenous people, you have not been paying attention. This will be coming to your city/town/neighborhood in the future when you and your friends are protesting the shuttering of your local bank during a bail-in, or when the municipal pension is declared insolvent and current and future retirees are forced to accept 30 cents on the dollar.

Standing Rock is a statement on the current use of power in the US to enforce corporate rights over human rights and it tells a very sad tale.

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A,B,C...
sand_puppy wrote:

A has successfully set B & C against each other.  B fights for freedom and to throw off oppression and will not be ruled by conservatives.  C fights to preserve civilization ruled by law and against anarchy and terrorism and hippie-dippy-liberals.

These guys must be the D's:

A Message to the Angry Leftists from an American Infantryman (Gruntworks)

reflector's picture
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how so?
Uncletommy wrote:

It appears to me that the Modi government has decided to work with what it has (domestic wealth) and encourage investment, locally, in "nuts and bolts" rather than "financials" as we see in the big capital markets. IMHO, speculators chase yields while entrepreneurs chase productive profits.

 

i have no idea how you came to such a conclusion - care to explain?

the modi goverment stabbed the indian people in the back.

the 500 and 1000 rupee notes that people held, backed by the "full faith and credit" of the indian government, were suddenly declared worthless. it was a complete breach of trust by the government.

if you were an indian who worked hard for the last month, was paid for in cash (as most indians are, especially outside the big cities), your savings have suddenly disappeared, stolen by declaration by the arch-criminal narendra modi.

but, that's what governments do, they stab the people in the back, and steal their wealth.

the indian economy is largely cash-based, and suddenly removing 500 and 1000 rupee notes from being usable, had a devastating effect on the economy, from the few reports i've heard.

this move by modi had a crippling effect on the economy and especially small business, rather than encouraging entrepreneurship and small business. but it may have helped large businesses (modi backers) that are already "in the banking system", by hurting their competitors.

now, i'm no expert on india, maybe i'm missing something, and if so, please enlighten me, but it seems that this move crippled smaller local businesses and favored large ones.

Uncletommy's picture
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To Reflector: Am I defending the move?

. . . but, that's what governments do, they stab the people in the back, and steal their wealth.

That's a sentiment that's hard to ignore in a time with huge wealth disparities and people looking for work. Think Cyprus! Think Greece. No government is going to leave money on the table(or off shore or in the hands of millions of people living outside India) or write off huge amounts of Bundes marks because they feel sorry for the populace that finds themselves in financial hard times through government mismanagement.  To think Modi’s main focus is looking out for the poor and indignant of India is a bit misplaced and naïve. He knows, as well as most of the mainstream populace of India, is that Black money was becoming a new currency on the Indian sub-continent. Think back to the video “Rules for Rulers”on PP. Any government, dictatorship or democracy, runs a country by controlling the currency of that country. Amschel Mayer Rothschild made that observation over a century ago and it still holds today.

If you were running a country, who would you want in your corner? Money launderers, drug dealers, international profiteers or the BANKS!

SINGAPORE, Nov 21 (IFR) - India's demonetisation drive is likely to cause short-term pain for the economy, but banks are expected to benefit from the move in the long run.

Indian banks are enjoying a rush of new liquidity as people line up to deposit 500 rupee and 1,000 rupee notes, which ceased to be legal tender under a surprise government crackdown on November 8.

There have been new bank deposits, totalling 4 trillion rupees ($58 billion), as of November 17, according to a treasurer at a public sector bank. The government expects the deposits to reach 10 trillion-12 trillion rupees, out of an estimated 17 trillion rupees in undeclared black money in circulation.

"In five to six days, we have collected 400 billion rupees in deposits, which (normally) takes nearly a year to collect," said Usha Ananthasubramanian, managing director of Punjab National Bank.

The wave of liquidity is lowering the banks' cost of funds, with borrowers likely to benefit.

The rest of the article goes on to explain more of the upside of this move. If we have learned anything from the Trump victory in the US, it may be that keeping the little guy on your side can put you into a majority position.  Are the Indians getting played?  Perhaps; but more elections are coming up in India and it may be interesting to see how things shape up. There are more than a few people who were surprised by the Brexit results, Trump win or Merkel coming in third place in Mecklenburg-west Pomerania. As Bob Dylan has mused, "Times, they are a changin". 

 

newsbuoy's picture
newsbuoy
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No Justice No Mustard

Here, in the city of shiny new glass boxes of money, we're still trying to get the Ham Sandwich (Wachtler was famously quoted by Tom Wolfe in the 1987 novel The Bonfire of the Vanities that "a grand jury would 'indict a ham sandwich,' if that's what you wanted."[13][14]) ) out of jail.

"Breaking Through To Power" -- R. Nader is required reading. If you dear reader can get to a meeting with your friends and/or neighbors to learn or teach each other about the political landscape then we are making progress. And, if I may be so bold, report back to us here. I will do the same. There are no spectators, this is not a rehearsal, there is no heaven or hell. Just us.

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newsbuoy
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We call it Watson and gee! it's IBM counting people, again

Yes, (A) will take care of the Communists, Anarchists, Gypsys, Homosexuals, and of course any other basket of deplorableness one can name. As Herr Spencer has pointed out recently, "they will be invited to go home" [sic]. The Homeland will be secured for its owners. Unless we can find our Napoleon to save the republic. (please don't anyone start with the British propaganda about what you think you know about Napoleon)

Sicherheitsdienst des Reichsführers-SS (English: Security Service of the Reichsführer-SS), or SD, was the intelligence agency of the SS and the Nazi Party in Nazi Germany. The organization was the first Nazi Party intelligence organization to be established and was considered a sister organization with the Gestapo, which the SS had infiltrated heavily after 1934. Between 1933 and 1939, the SD was administered as an independent SS office, after which it was transferred to the authority of the Reich Main Security Office(Reichssicherheitshauptamt; RSHA), as one of its seven departments/offices.[2]Its first director, Reinhard Heydrich, intended for the SD to bring every single individual within the Third Reich's reach under "continuous supervision."[3]

reflector's picture
reflector
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Uncletommy,

Uncletommy,

no, friend, i wasn't suggesting that you were supporting modi's actions.

just wondering how you came to interpret the move as encouraging investment in small local nuts and bolts businesses as you put it, while i saw it as being destructive of small business while supporting large ones.

i think the upcoming election may well have something to do with it like you suggested, and squeezing the finances of modi's political opponents may indeed be the motive.

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NASA's peer-reviewed EM Drive paper has finally been published
This summary  and the conclusions are misleading.  The statement "According to the law, for a system to produce thrust, it has to push something out the other way. The EM Drive doesn't do this" is misleading because it completely avoids the essential problem of generating energy.
I read the paper of the EM drive and the other comments from the inventors and have two observations:.
 
1. The thrust per energy consumed is miniscule and will not get people to Mars in 70 days etc.  The thrust efficiency per energy consumed is at least about 1000 times less than a regular rocket or airplane, which give about 1-4 newtons of thrust per kw expended, depending on how you measure (have to measure at given speed, etc. conditions)  The paper  lauds the EM drive as being more than 100 times  efficient than photon based solar sails: "1.2  mN/kW1.2  mN/kW performance parameter is over two orders of magnitude higher than other forms of “zero-propellant” propulsion, such as light sails,"  Whoopie do.  This will not give anywhere near thrust PERFORMANCE That is advertised. On the other hand if efficiency can be improved at least 100 fold, this MIGHT work well IF the spaceship had literally tons of solar cells to create many kilowatts of electricity (or a good sized nuke plant) for the thrust needed,  even IF the thing were 100-1000 times more efficient.
 
2.  "According to the law......(etc) [t]he EM Drive doesnt do this."  
Nonsense.  The EM Drive is a device that converts electricity (such as from solar cells) into force from photon momentum (from bouncing off a surface).  In a solor sail, a photon hits the surface once.  In the EM Drive a photon hits UNEQUAL shaped/arranged walls many times due to resonance (high Q) in a confined space, so one photon has an effect that is multiplied by so many more bounces of that photon.  The EM Drive site states in this regard: "The EmDrive does not violate any known law of physics.....[T]he electromagnetic wave momentum is built up in the resonating cavity, and is transferred to the end walls upon reflection.....(and) the law of conservation of momentum is satisfied."  

Maybe an elegant engineering contraption, but No mystery, no new science, OK?

3. Everyone breathlessly promoting this new potential  application of solar electric is ignoring the most important part of all: where does the energy come from?  This is merely a device that CONVERTS energy (typically from solar panels) into thrust.  Wonderful, so you dont need to carry rocket propellent as expendable fuel to Mars but you do need a heavy device with massive solar panels (think of football field sized areas) to get anywhere near a  usable thrust.  So lets make the rocket ship a lot bigger and a lot heavier to generate enormous amounts of electricity and also make the rocket ship a lot bigger and a lot heavier to convert anywhere near a usable level of thrust.  

I think that this solar electric energy application has an important role in the future somewhere (we need  many more inventions  before this thing gets off  the ground), but the main points 1. (1000 times less efficiency than present rocket thrusters NOT even including the problem of having to lug up and use an energy source needed to drive it) and 2. requires a bigger than football field sized solar array or nuclear power plant addition to the (rocket ship to Mars) for the electricity).  
I observe that most new golly gee whiz breathless explanations of new transportation systems conveniently leave out the most important part: a source of energy to drive the thing.  We saw a lot of this kind of naked emperor "golly this technology will  save us!" in the Bush years when we learned to not worry about the end of oil because with "new technology!!!!!" will provide  hydrogen fuels, (which to this day are mostly made from oil).

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