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If I live in Florida and call for the same plan, same quote, it’s a little more than half the mo premium I pay for on the west coast? — — — wtf?
Wait, lmfao. Fk this also........ if I move to a less richer zip code where home prices are cheaper in my own state, same fkn quote goes down as much as a 1/4 to 1/5......... again, wtf? Lmao.........
Hey fk this ! How about I go to Australia, where the corliolis effect keeps all that nuke chitttttttttttttt above the equator? Ohhhhhhhhhhhh lmfao...............
Bro, u got any ideas? I could be Canadian in no time, ehhh? Lmao......lmao.......
Dude, help me out! What does one do with 500k for income? Think global for me bro! Lol..... no chittttttt, I can speak espanol no problema....lmfao...... comprende? Lmao...... I just don’t wanna be fkd on by some cartel! Lmfao.......... dude, does Elon have room in his rocket ? Lmao........
That was a low quote 1500 mo premium, it’s as high as 1850!
Happy healthy 3 person family, just getting robbed fkn blind with healthcare bullchitttttttttttttttttttttttttttttt
Hedgebunny, >> health care premiums of 1500 monthly <<
Wow, that's a big number. I assume you're too young for Medicare, hence the big premiums. Working as much as possible for income, if you're able, is an obvious source of steady funds. For income from investments, there are fixed income like bonds/CDs, and high dividend stocks and REITS. Check out my Dividend Board for some ideas (link below). I'm pretty conservative, and heed Warren Buffett's advice to 'be more concerned with return of capital than return on capital' -
https://investorshub.advfn.com/Dividend-Stocks-28771/
Concerning gold and silver miners, I'm not that familiar with the individual companies, so I just stick to the vanilla ETFs like GDX (gold miners), GDXJ (small cap gold miners), and SIL (silver miners). The miners are one area that should prosper if/when the financial system comes unglued, so I see it as an insurance policy for a modest percentage of one's money, along with owning some of the physical metal. There was a time when the miners paid high dividends, but not these days, so it's more insurance.
Here are some ideas from my Metals + Mining Board -
https://investorshub.advfn.com/Metals-and-Mining-Sector-Ideas-25504/
How do u feel about silver mining foreign bonds? Are they worth checking out? For example, are their silver mining companies in CANADA selling bonds? I see other countries being a flight to safety obviously when ours goes belly up.......ideas? What countries would you consider investing bonds in? Areas you might choose, for example, mining silver in Argentina? Does their government have a silver mining bond? Or is it safer to invest in Canadian bonds because of their infrastructure and government?What Other countries you see paying bonds? Ideas? Thanks again for your input.
I understand what you are articulating very well..... completely in your corner, what would you do with 500k assuming you need income for paying health care premiums of 1500 monthly? Ideas?........ thanks for your time, think it’s way cool of you to help like this, your knowledge is appreciated, any ideas I understand are opinion, so please does hesitate with ideas? Thanks again for your time.....
Hedgebunny, >> ready to crash <<
That's a real possibility considering the aging 9 year bull market, the high US debt levels (over 100% of GDP), the likelihood of a shooting war with N. Korea next year, and probable Chinese mega devaluation of the yuan soon.
I've been following Jim Rickards, author of 'Currency Wars' and 'The Death of Money', and he's completely out of stocks except for the gold mining sector. He has 10% in physical gold with the rest in cash, short/mid Treasuries, plus land and fine art. He sees a SHTF coming that will be worse than 2008, where the IMF will have to bail out the US/world with their SDR/Special Drawing Rights, which will then become the new world reserve currency.
When/if this happens it obviously won't be pretty for the stock market, and there will be a lot of inflation in the US as the US dollar is dethroned as the world's reserve in favor of the SDR. So in general bonds would also be a bad place to be, other than for some short/mid term Treasuries.
Let's hope Rickards is wrong, but at 9 years the bull market is long in the tooth with a lot of big landmines out there, so no sense trying to eek out the last 5 or 10% imo..
Thanks! Informative and professional! I appreciate your time here! Thank you.
— — — so if I think wall st is about ready to crash or the government will default on bonds because of debt, should I hold off on buying bonds of any type in US? I pay attention to global economies but not professionally, all I see from my point of view in many parts of the world is getting richer, developing infrastructure better than US, AS WE struggle to even keep jobs, education, and global warming relative....other countries are going to develope faster. Therefore, you mentioned foreign bonds? What’s that like? Do other countries like Canada back their govt bonds with insured? What are some of the corporate foreign bonds that might do well if the American economy were to drop quick, like dropping 1000 points a day or more with curbs going into affect? Like if the Dow is going back to 10,000? Would I want to be in a Australia gold bond? I have no clue, just reaching for possibilities...
— — I feel better about owning foreign bonds because I fear the worst for the US.......AM I SCREWED? Lmao...
Am I stuck wondering like the rest of us? Lmao chitttttt ,
Any help u have, any ideas, most appreciated, thanks again for your valuable time, it is most informative, marked u for sure, and will be giving this message board out as a guide for people......I marked the board also! Thanks again!
>>> The 5 Best Bond Funds for 2017
The trick next year will be to avoid losing money.
November 28, 2016
http://www.kiplinger.com/article/investing/T031-C000-S000-deciding-to-invest-in-individual-securities-vs-mut.html
A funny thing has been happening in the bond market lately. Bond yields had been falling for three years—and, indeed, with ebbs and flows since 1981. The 10-year Treasury yield hit a record closing low of 1.37% on July 8.
But since then, bond prices, which move inversely from their yields, have been sliding—a fall that has gathered momentum since Election Day amid predictions of faster growth and rising inflation under a Trump administration and the growing likelihood that the Federal Reserve will raise short-term interest rates in December and perhaps several more times in 2017. On November 23, the 10-year Treasury yielded as much as 2.42%—its highest level since July 2015.
Is this the beginning of the end for the 35-year-old bond bull market or just a head fake? I don’t profess to know. But I do know this: Bond yields have been ridiculously low for years now. The bond market is in a dangerous bubble, and bubbles always end badly. What’s more, the extra yield that bond investors get today by buying intermediate- and long-term bonds is puny—and not nearly worth the risks of owning these bonds. The longer a bond’s maturity, the more it will fall in price when bond yields rise.
Don’t get me wrong: You should still own bonds—unless you fancy holding big slugs of cash-type investments, which still pay virtually nothing. Bonds lower your portfolio’s volatility—and almost always shine during stock sell-offs. But keep your bond durations short, really short. (Duration is a better measure of a bond or bond fund’s interest-rate sensitivity than maturity.)
With that in mind, here are my five favorite bond mutual funds for 2017, in order from safest to riskiest. My picks are primarily designed to limit losses in a rising-rate environment. Returns are through November 25.
You can’t find bond funds that are more cautious than Vanguard Short-Term Investment Grade Investor (symbol VFSTX). The fund’s duration is a mere 2.6 years. That suggests that if rates were to rise by one percentage point, the fund’s net asset value per share would dip just 2.6%. The fund’s current yield of 1.7% would offset most of that loss and would rise as rates rose. The maturities of the fund’s bonds are so short that, in a rising-rate environment, it would take little time for many of the fund’s low-yielding bonds to mature and be replaced by new, higher-yielding bonds.
Reflecting the high quality of the fund’s holdings, the average credit rating of its bonds is single-A, further underscoring its low risk. Just don’t count on it earning more than 1% or 2% next year. The fund benefits from a low annual expense ratio of 0.20%.
Vanguard Limited-Term Tax-Exempt Investor (VMLTX) invests in municipal bonds, but otherwise it is virtually a carbon copy of Vanguard Short-Term Investment Grade. The muni fund yields 1.2%, has a duration of 2.5 years, invests in municipal bonds with an average credit quality of double-A, and charges 0.20% annually. For an investor in the highest, 43.4% tax bracket, a 1.2% tax-free yield is the equivalent of 2.1% from a taxable bond fund.
Both this fund and the Short-Term corporate fund are actively managed but stick close to their benchmarks. In the low-yielding, short-maturity end of the bond market, Vanguard’s low fees are a big advantage. You can trim your fees even more, to 0.10% annually, if you pony up $50,000 to invest in the Admiral share-class versions of these funds (the Investor share class requires just $3,000 to start). The symbols for the Admiral share classes for the taxable and tax-free funds are VFSUX and VMLUX, respectively.
Metropolitan West Unconstrained Bond (MWCRX) yields 2.4% and has an average duration of 1.4 years, which means the fund will likely make money in a rising-rate environment (as long as rates don’t rise too much too fast). The average credit quality is triple-B. More than half of its assets are in asset-backed bonds, mainly nongovernment-backed residential and commercial mortgages. More than a few bond managers have done well in recent years by investing in private mortgages, which have rebounded sharply from the 2008 financial crisis but still carry a taint.
The quartet of managers who steer this $2.5 billion fund, which was launched in 2011, have proved their mettle running the older, more conventional Metropolitan West Total Return Fund (MWTRX), a member of the Kiplinger 25. Unconstrained Bond has returned an annualized 5.1% over the past five years. In short, this fund takes more credit risk than the two Vanguard funds, but it’s still unlikely to suffer big losses due to higher rates. Annual expenses are 1.04%.
Osterweis Strategic Income (OSTIX) earns its keep by outsmarting the bond-rating agencies. The fund, which mostly owns junk bonds, recently held 59% of its assets in bonds rated single-B or below, which is a treacherous neighborhood (double-B is the highest junk-bond rating). But diligent credit research by Carl Kaufman and his two comanagers has enabled the fund to sidestep most of the many pitfalls in this high-risk section of the bond market.
Aside from the managers’ smarts, Osterweis has a couple of other advantages over other junk funds. First, it’s not a pure junk fund; the managers are flexible and cautious. Currently, for instance, 22% of assets are in cash as the managers wait for better opportunities. Second, the fund’s duration is just 1.5 years. That means that most of the fund’s bonds are close to maturing, making it easier to tell which firms can afford to meet their obligations. Expenses are 0.82%. Over the past five years, the fund returned an annualized 5.2%. It yields 5.5%.
As its name suggests, Pimco Income Fund D (PONDX) focuses on producing income—a rarity at Pimco, where most funds aim to produce above-average total returns. Income yields 3.1%. Like the Metropolitan West fund, Pimco Income has an outsize position in nongovernment-backed mortgages, at last word 54% of assets. The fund ranges widely, investing in foreign bonds, including a big slug in emerging markets, as well as investment-grade corporates and junk bonds. The fund’s duration is 2.8 years. Over the past five years, Income returned an annualized 8.7%. I think the fund will do well, but future returns won’t be anywhere near that high. Annual fees are 0.79%.
As for how to use these funds in your portfolio, allocations will depend on your proximity to retirement and your tolerance for risk. The two Vanguard funds are least likely to post losses and should perform best during stock market sell-offs. That makes them best-suited for retirees who are drawing money from their investments. Investors who are younger and can tolerate big losses during stock bear markets should invest in the riskier funds.
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>>> AT&T Plans New Structure
WSJ
July 15 2017
By Drew FitzGerald
https://ih.advfn.com/p.php?pid=nmona&article=75243695
This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (July 15, 2017).
AT&T Inc. plans to split the management of its telecom operations and its media assets after clinching a takeover of Time Warner Inc., putting veteran AT&T executive John Stankey in charge of the Time Warner business, according to people familiar with the matter.
The reorganization would create two divisions. One would contain AT&T's wireless business and its DirecTV satellite television business, the other would comprise the Time Warner assets it plans to acquire, including HBO, Warner Bros. and the Turner cable unit that houses CNN, the people said. AT&T last year said it would take control of the entertainment company in a cash-and-stock deal worth about $85 billion.
The new structure would keep AT&T Chairman and Chief Executive Randall Stephenson atop the company with two top lieutenants, in an organization that would resemble Comcast Corp. Brian Roberts, Comcast's chairman and chief executive, has two segment chiefs: one in charge of the cable business and the other heading NBCUniversal.
The Justice Department is conducting an antitrust review of the transaction, although President Donald Trump's pick for antitrust chief, White House deputy counsel Makan Delrahim, is awaiting Senate confirmation. The Senate is locked in a broader political showdown over nominations, and it isn't clear when Mr. Delrahim might be confirmed.
Justice Department staffers have interviewed executives and collected information from the companies and rivals in the industry, but the process is in something of a holding pattern until Mr. Delrahim is in place, according to a person familiar with the matter.
Mr. Trump vowed to block the deal when he was still a candidate but hasn't commented on it since taking office. The combination of two distinct businesses -- video and the networks that distribute it -- is considered unlikely to face an outright government challenge. But authorities have imposed merger conditions on similar tie-ups, including Comcast's takeover of NBCUniversal.
The administration's ongoing feud with Time Warner subsidiary CNN adds another wrinkle to the process. White House officials have tangled with several national media outlets, but Mr. Trump has saved extra ire for the cable news network.
AT&T has said it would maintain CNN's independence post-merger and has no plans to spin off the network. The company still expects to complete the transaction later this year.
AT&T spokesman Larry Solomon said the company is still developing its integration plans and hasn't completed the new organizational chart.
Mr. Stankey, a 30-year AT&T veteran, is currently head of AT&T's entertainment business, which includes DirecTV and has offices near Los Angeles. He has previously served as the company's strategy chief and held various executive roles in its traditional telecom business.
He would sit atop the existing Time Warner business, but AT&T has indicated it would like to retain some top executives at Time Warner to take advantage of their expertise, according to a person familiar with the matter. Time Warner CEO Jeffrey Bewkes has said he will stay on for an interim period to help with the transition.
Under the new structure, DirecTV would be combined with the company's telecom operations, which are run out of AT&T's Dallas headquarters and include both the wireless and landline business, the people familiar with the matter said. That segment would be run by John Donovan, another AT&T veteran who is currently chief strategy officer, one of the people said.
News of planned executive changes were earlier reported by Bloomberg News.
AT&T has hinted it will be more than just a passive owner of Time Warner's news and entertainment assets. Mr. Stephenson in May floated some ideas for the combination that included shorter, smartphone-friendly HBO videos and specially targeted advertising.
How Time Warner, as part of AT&T, might negotiate with the carrier's competitors is another potential concern. Mr. Stephenson addressed some of those fears in May by repeating his pledge to keep its most popular content available to all distributors.
"You can't think about taking 'Game of Thrones' and you're only going to make it available to AT&T customers," he said at the time. "That's crazy."
AT&T has started toying with special entertainment offers ahead of the deal's close. In April, it offered subscribers of its premium unlimited data plans free access to HBO, which normally costs $15 a month.
Aside from the Justice Department, several state attorneys general are taking the routine step of reviewing the deal's antitrust implications. The states' probe deals with how AT&T's nearly 147 million wireless customers affect its bargaining position with other media companies, among other questions, according to a person familiar with the joint effort.
Government enforcers sometimes monitor a merged company to make sure two newly combined businesses don't gain an unfair edge over rivals.
"They could be anticipating that they're going to have to face some stiff enforcement proposals and they're preparing themselves," said Gene Kimmelman, chief executive of Public Knowledge, an interest group that opposes the deal.
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>>> These dividend stocks are down a lot, but there’s plenty of cash flow to raise payouts
By Philip van Doorn
June 23, 2017
http://www.marketwatch.com/story/these-dividend-stocks-are-down-a-lot-but-theres-plenty-of-cash-flow-to-raise-payouts-2017-06-21?siteid=bigcharts&dist=bigcharts
Here are some possible bargains for income-seeking investors willing to consider contrarian plays
Shares of Kohl’s are down 27% this year, but the stock has a dividend yield above 6% and plenty of excess free cash flow to support a higher payout.
The S&P 500 index is up 9% so far in 2017, but there are losers in any market. And that’s where you might find long-term bargains, along with the expected batch of companies facing painful secular declines.
Two groups of companies that are particularly out of favor are brick-and-mortar retailers and real estate investment trusts that own malls or shopping centers. The reason for these groups’ pain is obvious: Amazon.com Inc. AMZN, +0.24% continues to dominate the rapidly growing online retail industry and grab business from traditional retailers.
But some of these plays still have attractive dividend yields and plenty of free cash flow to support higher payouts. A company’s free cash flow is its remaining cash flow after planned capital expenditures. We can calculate a “free cash flow yield” by looking at the last 12 months’ free cash flow per share and dividing it by the current share price. If the free cash flow yield exceeds the dividend yield, a company has “headroom” to raise dividends, or buy back stock, or make acquisitions or other expansions of their businesses, all of which can boost stock prices over the long term.
For REITs, we used funds from operations (FFO) instead of free cash flow, because FFO is generally considered the best way to measure a REIT’s ability to pay dividends. FFO adds depreciation and amortization back to earnings, while subtracting gains from the sale of assets.
Among the S&P 500 SPX, +0.16% 76 stocks were down at least 10% this year through June 20. Among these 76, a dozen have dividend yields above 3.5% and free cash flow headroom.
Here’s the list, sorted by dividend yield:
Company Ticker Industry Dividend yield Free cash flow yield - past 12 reported months ‘Headroom’ Price change - 2017 through June 20
Macy’s Inc. M, +0.81% Department Stores 6.83% 21.63% 14.80% -38%
Kimco Realty Corp. KIM, +0.78% Real Estate Investment Trusts 6.14% 7.44% 1.31% -30%
Kohl’s Corp. KSS, +2.01% Department Stores 6.11% 20.24% 14.13% -27%
Oneok Inc. OKE, +2.93% Oil and Gas Pipellines 5.18% 8.85% 3.67% -17%
Macerich Co. MAC, +0.51% Real Estate Investment Trusts 4.93% 7.12% 2.19% -19%
Target Corp. TGT, +0.26% Discount Stores 4.87% 16.78% 11.91% -30%
L Brands Inc. LB, +1.15% Apparel/ Footwear Retail 4.58% 6.95% 2.37% -20%
Simon Property Group Inc. SPG, -0.14% Real Estate Investment Trusts 4.28% 6.67% 2.39% -11%
Qualcomm Inc. QCOM, +0.78% Telecom. Equipment 4.01% 6.60% 2.59% -13%
People’s United Financial Corp. PBCT, +0.06% Savings Banks 3.95% 6.05% 2.10% -10%
Western Union Co. WU, +2.08% Data Processing Services 3.69% 9.32% 5.62% -13%
Regency Centers Corp. REG, +1.31% Real Estate Investment Trusts 3.55% 5.66% 2.11% -13%
Source: FactSet
All four REITs on the list own shopping centers and/or malls.
You can click on the tickers for additional information, including news, price-to-earnings ratios, estimates and ratings.
As with any “first screen” of stocks, the list is meant to spur further discussion as you consider whether any of these companies might be worth considering as an investment, especially if you crave dividend income.
It’s obvious that many of these companies are out of favor, as they face major challenges to their business models. But that doesn’t mean none will survive or even thrive over the long term.
If you see any names of interest here, your next step, as always, should be to do your own research, preferably with the assistance of your broker or investment adviser, to form your own opinions about the companies’ long-term prospects.
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>>> Retail Meltdown Demolishes Mall Investors
by Wolf Richter
May 9, 2017
http://wolfstreet.com/2017/05/09/retail-meltdown-demolishes-mall-reit-investors/
Even the biggest.
The closure of thousands of retail chain stores last year and this year, with many more to come – from big anchor tenants such as Macy’s to smaller stores such as Payless Shoes – and the bankruptcies and debt restructurings ricocheting through the industry are having an impact on retail malls. And mall investors – that may include your retirement account – are getting crushed.
The commercial real estate industry has been claiming that these shuttered retail spaces are being converted into restaurants or fitness centers or smaller shops or whatever. And zombie malls are leasing out their parking lots to car dealers to store their excess new vehicle inventory, and that everything is going to be fine.
But investors in publicly traded Real Estate Investment Trusts that were for years among the stars in the S&P 500 are voting with their feet.
It’s not that these REITs are doing all that badly on an operational basis. They’re hanging in there. But many of the announced store closings and bankruptcies haven’t worked their way through the pipeline.
Shares of these REITs all peaked together at the very end of July 2016 and have since then plunged in unison.
Kimco Realty Corp (KIM) says it’s “one of North America’s largest publicly traded owners and operators of open-air shopping centers,” with “interests” in 517 shopping centers with 84 million square feet of retail space in 34 states and Puerto Rico. Shares fell 2.6% to $19.42 on Monday and 13% over the past month. They’re down 40% from the peak of $32.23 at the end of July 2016:
Macerich (MAC), with 54 million square feet of retail space at 48 regional shopping centers, calls itself “one of the country’s leading owners, operators and developers of major retail real estate.” It disclosed that revenues in Q1 fell 3.5% year-over-year, and that mall portfolio occupancy edged down to 94.3%, from 95.1% a year earlier.
It’s starting to feel the pain, but it’s not the end of the world. But its shares dropped 2.5% on Monday and 8.3% over the past month. They’re down 36% from the peak at the end of July, 2016:
Simon Property Group (SPG), “the world largest publicly traded real estate company,” as it says, fell 1% to $162.84 on Monday and 7% over the past month. It’s down 29% since the peak at the end of July. And this despite a massive share buyback program, that included buying back 870,692 shares in Q1:
GGP, formerly General Growth Properties, is also trying to use share buybacks to prop up its share price. In Q1, it bought back 2.57 million shares for $59.6 million. Nevertheless, shares fell 12% over the past month to $22.19 as of Monday and are down 30% from the peak at the end of July:
Federal Realty Investment Trust (FRT) has 98 malls with a total of 23 million square feet of retail space in “major coastal markets.” It also has over 1,800 apartments. So you gotta get creative during tough times. In its Q1 earnings report, it said:
March 28, 2017 – Federal Realty announced its exclusive partnership with Freight Farms, a Boston-based company that retrofits shipping containers with vertical farming technology capable of growing acres’ worth of produce in a fraction of the space of traditional farms. The partnership empowers anyone to use this technology while repurposing Federal Realty’s unused parking spaces as a place to locally and sustainably produce food that benefits the shopping centers’ tenants, customers, and community.
Its shares fell 1.8% on Monday and 3% over the past month. They’re down 24% from the peak at the end of July 2016:
Regency Centers Corp (REG), with 429 shopping centers totaling 57.2 million square feet of retail space, focuses on “grocery-anchored retail centers located in the most attractive U.S. markets.” Its shares fell 1.9% to $61.49 on Monday and 8% over the past month. They’re down 28% from the peak at the end of July:
This is how the brick-and-mortar pain is translating into pain for mall-REIT investors. But why have share prices gotten crushed when, operationally, the REITs are still hanging in there and are paying fat dividends? That can best be answered by a look at the meteoric rise of those shares over the years leading up to July 2016.
Some of the share prices more than doubled over those years, as part of the commercial property bubble that got so huge that the Fed keeps publicly fretting about it, naming it as one of the reasons for raising interest rates, precisely to tamp down on the valuations. The Fed is worried that an implosion of these inflated commercial property values can take down the banks.
Mall REITs were part of this inflated commercial property universe, and they soared with it. That entire universe is now peaking. But separately, mall REITs are also caught up in the relentless brick-and-mortar retail meltdown, as online shopping is taking over. This is a structural shift that will continue to progress. Mall owners are already trying to find a way to “repurpose” their malls. But this isn’t going to be smooth.
As so many times, Private Equity firms are in the thick of it. Read… I’m in Awe of How Fast Brick-and-Mortar Retail is Melting Down
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GEO Group, CoreCivic - >>> US prosecutors told to push for more, harsher punishments
By SADIE GURMAN
Associated Press
http://www.msn.com/en-us/news/politics/us-prosecutors-told-to-push-for-more-harsher-punishments/ar-BBB2Pgg?li=BBnb7Kz&ocid=mailsignout
FILE - In this April 28, 2017 file photo, Attorney General Jeff Sessions speaks in Central Islip, N.Y. Sessions has directed the nation’s federal prosecutors to pursue the most serious charges possible against the vast majority of suspects, a reversal of Obama-era policies that is sure to send more people to prison and for far longer terms. The move, announced in a policy memo sent to U.S. attorneys late on May 10, has been expected from Sessions. (AP Photo/Frank Franklin II, File)© The Associated Press FILE - In this April 28, 2017 file photo, Attorney General Jeff Sessions speaks in Central Islip, N.Y. Sessions has directed the nation’s federal prosecutors to pursue the most serious…
WASHINGTON — Attorney General Jeff Sessions is directing federal prosecutors to pursue the most serious charges possible against the vast majority of suspects, a reversal of Obama-era policies that is sure to send more people to prison and for much longer terms.
The move has long been expected from Sessions, a former federal prosecutor who cut his teeth during the height of the crack cocaine epidemic and who has promised to make combating violence and drugs the Justice Department's top priority.
"This policy affirms our responsibility to enforce the law, is moral and just, and produces consistency," Sessions wrote in a memo sent Thursday night to U.S. attorneys and made public early Friday.
The move amounts to an unmistakable undoing of Obama administration criminal justice policies that aimed to ease overcrowding in federal prisons and contributed to a national rethinking of how drug criminals were prosecuted and sentenced. Critics said the change will subject more lower-level offenders to unfairly harsh mandatory minimum sentences.
Sessions contends a spike in violence in some big cities and the nation's opioid epidemic show the need for a return to tougher tactics.
"The opioid and heroin epidemic is a contributor to the recent surge of violent crime in America," Sessions said in remarks prepared for a Thursday speech in Charleston, West Virginia. "Drug trafficking is an inherently violent business. If you want to collect a drug debt, you can't, and don't, file a lawsuit in court. You collect it by the barrel of a gun."
The policy memo says prosecutors should "charge and pursue the most serious, readily provable offense" — something more likely to trigger mandatory minimum sentences. Those rules limit a judge's discretion and are typically dictated, for example, by the quantity of drugs involved in a crime. The memo concedes there will be cases in which "good judgment" will warrant a prosecutor to veer from that rule. But any exceptions will need to be approved by top supervisors, and the reasons must be documented, allowing the Justice Department to track the handling of such cases by its 94 U.S. attorney's offices.
And even if they opt not to pursue the most serious charges, prosecutors are still required to provide judges with all the details of a case when defendants are sentenced, which could lengthen prison terms.
The requirements "place great confidence in our prosecutors and supervisors to apply them in a thoughtful and disciplined manner, with the goal of achieving just and consistent results in federal cases," the memo states.
The directive rescinds guidance by Sessions' Democratic predecessor, Eric Holder, who told prosecutors they could in some cases leave drug quantities out of charging documents so as not to trigger long sentences. Holder's 2013 initiative, known as "Smart on Crime," was aimed at encouraging shorter sentences for nonviolent drug offenders and preserving Justice Department resources for more serious and violent criminals.
Though Holder did say that prosecutors ordinarily should charge the most serious offense, he instructed them to do an "individualized assessment" of the defendant's conduct. And he outlined exceptions for not pursuing mandatory minimum sentences, including if a defendant's crime does not involve violence or if the person doesn't have a leadership role in a criminal organization.
The Obama policy shift coincided with U.S. Sentencing Commission changes that made tens of thousands of federal drug prisoners eligible for early release, and an Obama administration clemency initiative that freed convicts deemed deserving of a second chance. Combined, those changes led to a steep decline in a federal prison population that now stands at just under 190,000, down from nearly 220,000 in 2013. Nearly half of those inmates are in custody for drug crimes, records show.
Obama administration officials cited that decline and a drop in the overall number of drug prosecutions as evidence that policies were working as intended. They argued prosecutors were getting pickier about the cases they were bringing and were seeking mandatory minimum sentences less often.
Still, some prosecutors felt constrained by the Holder directive and expressed concern that they'd lose plea bargaining leverage — and a key inducement for cooperation — without the ability to more freely pursue harsher punishments.
Sessions and other Justice Department officials argue Holder's approach sidestepped federal laws that impose such sentences and created inconsistency across the country in the way defendants are punished. Even while in the Senate, Sessions repeatedly asserted that eliminating mandatory minimums weakened the ability of law enforcement to protect the public.
Advocates for the previous policy said the change will revive the worst aspects of the drug war.
"It looks like we're going to fill the prisons back up after finally getting the federal prison population down," said Kevin Ring, president of Families Against Mandatory Minimums. "But the social and human costs will be much higher."
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Pharma sector dividends -
J+J ----------- 2.8%
Merck --------- 2.8%
Bristol-Myers - 3.0%
AbbVie -------- 3.8%
Pfizer -------- 3.8%
Teva ---------- 4.0%
AstraZeneca --- 5.1%
Glaxo --------- 5.1%
>>> 7 Best Monthly Dividend Stocks for 2017
Kiplinger
http://www.kiplinger.com/slideshow/investing/T018-S015-the-7-best-monthly-dividend-stocks-for-2017/index.html?rid=SYN-yahoo&rpageid=15985
The second half of 2016 was not kind to income investors. As bond yields rose, the prices of virtually everything paying an income stream got slammed. Some of my favorite dividend stocks, REITs and closed-end funds fell by 20% or more … at a time when the broader stock market was rallying.
That’s frustrating, to say the least. But if you’re investing for retirement, short-term price moves really don’t matter all that much. Earning a regular stream of income is far more critical.
But even here, your dividend stocks are generally misaligned with your actual cash needs. Most dividend stocks pay quarterly, and most bonds pay semi-annually. Yet your regular expenses — everything from your mortgage to the mobile phone bill — tend to be monthly.
This is where monthly dividend stocks come in handy. Monthly dividend stocks align your income with your expenses, making it a lot easier to plan out your life. And after the general bloodletting we’ve had among defensive, dividend-paying names over the past few months, some of my favorite monthly dividend stocks are finally reasonably priced again. Most were prohibitively expensive as recently as late summer.
Some would dismiss a monthly payout as a gimmick designed to impress mom and pop investors, but I would disagree completely. To me, a monthly dividend is a sign of a management team that takes its investors seriously and makes a real effort to do what is best for them.
This is an eclectic list, covering everything from traditional brick-and-mortar REITs to leveraged closed-end bond funds. But all have one thing in common: They pay a reliable monthly dividend.
Realty Income
Symbol: O
Dividend yield: 4.4%
Type: Commercial REIT
You can’t have a list of monthly dividend stocks without “the Monthly Dividend Company” itself, conservative retail REIT Realty Income Corp. Realty Income has paid its dividend like clockwork for 556 consecutive months and counting. Importantly, it’s raised that dividend for 76 consecutive quarters and has shown no indication of slowing down. Since 1994, the company has raised its dividend at a 4.6% annual clip.
Realty Income is not a bond. It’s obviously a stock. But in terms of stability and safety, it’s about as close to a bond as you can realistically get in the stock market. The REIT owns a portfolio of high-traffic retail properties that are mostly recession proof, and importantly, internet proof.
With Amazon.com, Inc. (AMZN) and its peers quickly making physical stores irrelevant, you have to worry about the long-term viability of a lot of properties. But a typical Realty Income property would be your local pharmacy or convenience store, the sorts of properties that e-commerce won’t replace any time soon. And its base of over 4,700 properties is spread across 247 tenants in 49 states and Puerto Rico, with its largest tenant accounting for just 7.3% of total rent.
At current prices, Realty Income yields about 4.4%, which is nearly 2% higher than the yield on the 10-year Treasury. But unlike that Treasury coupon, which will never rise, Realty Income’s dividend will likely continue to rise every year.
LTC Properties Inc.
Symbol: LTC
Dividend yield: 5%
Type: Health care REIT
Another fantastic REIT in our list of monthly dividend stocks is health and senior living specialist LTC Properties Inc.
Lest there be any confusion as to what LTC does, take a look at its ticker symbol. “LTC” stands for “long-term care.” That’s a pretty good description of the REIT’s portfolio, which allocates 49.5% of its weighting to skilled nursing properties with another 45.5% in assisted living facilities. All in all, LTC has over 200 properties spanning 30 states.
Health and senior living might seem like boring niche markets, but LTC is actually a growth dynamo due to the aging of the baby boomers. Over 10,000 boomers turn 65 every single day, and as this generation ages, they will continue to need more and more healthcare. So suffice it to say that demographic trends are on LTC’s side.
At current price, LTC sports a dividend yield of 4.9%. That’s not mouthwateringly high, though it certainly isn’t bad. And LTC also has a good history of raising its dividend, having boosted its payout every year since 2010. Over the past five years, LTC has raised its dividend at 6% annual clip.
LTC isn’t wildly exciting. If fact, I’d argue it’s downright boring. But for a consistent income producer, that’s just fine. LTC is a consistent monthly dividend stock backed by strong demographic trends.
STAG Industrial
Symbol: STAG
Dividend yield: 6%
Type: Industrial REIT
Up next is a small-cap REIT that I’ve held for several years now, STAG Industrial Inc.. STAG is a young REIT, having gone public only in 2011, and like LTC, it operates in something of a niche market. “STAG” stands for “single tenant acquisition group,” and the REIT focuses on standalone, single-tenant properties in the light industrial space. A warehouse or manufacturing facility would be a typical property for STAG.
STAG has grown like a weed since its 2011 IPO, expanding its portfolio 344% to 300 properties in 37 states. And the beauty of its gritty industrial portfolio is that it doesn’t require a lot in terms of maintenance and expenses. There are generally no customers that need to be impressed.
Let’s talk dividends. At current prices, STAG yields just shy of 6%, making it a high-yielder these days. And over the past three years, STAG has grown that dividend at a 9% annual clip. That’s exceptionally high for a boring portfolio of gritty industrial properties.
My recommendation is to buy STAG, instruct your broker to reinvest the dividends, and then just let it ride. Five years from now, you’ll likely have a much larger share count … and a much fatter monthly dividend.
EPR Properties
Symbol: EPR
Dividend yield: 5.5%
Type: Commercial REIT
I’ll add one last REIT to our list of monthly dividend stocks, EPR Properties. It must be a “monthly dividend stock thing,” but like LTC and STAG, EPR is also an acronym, standing for “Entertainment Properties.”
EPR’s background is in non-traditional assets, and today the REIT owns an eclectic portfolio that includes movie theaters, golf driving ranges, ski parks, water parks and private schools, among other things. But this quirkiness is what makes EPR attractive.
To start, it requires specialized knowledge to invest in these sorts of properties profitably, and few real estate professionals have it. That gives EPR an advantage and allows it to grab higher yields than it might on a more traditional portfolio. But the non-conformity of the portfolio also tends to be somewhat off-putting to a lot of money managers accustomed to analyzing apartment or office REITs. That tends to depress the price, allowing for us to grab EPR shares at a more attractive price.
Today, EPR yields 5.5% in dividends. And over the past five years, the company has raised its dividend at a 7% clip. That’s not too shabby.
Apart from its attractive yield, EPR is interesting as a portfolio diversifier. The prices of ski parks or movie theaters are not tightly correlated to those of, say, office buildings. So in addition to a great income stream, you also get some real diversification.
Main Street Capital
Symbol: MAIN
Dividend yield: 7.5%*
Type: Business Development Company
Enough REITs, let’s move on to a different asset class that often includes monthly dividend stocks: business development companies (BDCs). BDCs make debt and equity investments in smaller, up-and-coming companies. Their niche tends to be middle-market companies that are too big to be served by a bank, but too small to access the stock and bond markets. You can think of them as publicly traded private equity companies.
BDCs are actually pretty similar to REITs in that both are special business structures created by Congress with tax advantages. BDCs, like REITs, are not required to pay corporate income taxes so long as they pay out the bulk of their earnings as dividends. As a result, both tend to pay above-market yields, and both tend to be very attractive to retired investors.
So, with that said, let’s take a look at Main Street Capital Corporation, which is based in Houston, Texas. MAIN makes both equity and debt investments in the companies it finances, and most of its investments are in the fast-growing sunbelt region of the country.
At current prices, MAIN pays about 6%. But that does not include MAIN’s semi-annual special dividends, which are tied to profitability. Adding in the past two special dividends gets the total annual yield to 7.5%.
So, you can think of MAIN as a monthly dividend stock with an extra bonus every six months to incentivize you to continue holding. But given that the regular monthly dividend has grown at a healthy 7.7% clip over the past five years, I’d say we already had reason enough!
Prospect Capital
Symbol: PSEC
Dividend yield: 12.1%
Type: Business development company
We’ll add one more BDC to the list, and one that I’ve held for a few years now: Prospect Capital Corporation. Prospect hasn’t had as good of a run in recent years as MAIN has. The company was forced to cut its dividend in early 2015, which upset a lot of investors. And because Prospect tends to have a more aggressive dividend payout policy (MAIN’s lower monthly dividend supplemented by the semi-annual quarterlies is a more conservative way to do things), it has less room for dividend growth.
But given the pricing we’re getting, I’m okay with that. At current prices, PSEC yields a fat 12%, and it trades for just 86% of book value. Now, book value is a moving target that changes each quarter based on the value of the investments in the portfolio, and PSEC has some degree of discretion as to how it values it’s portfolio. But even allowing for a modest amount of number fudging, you’re still getting PSEC at a discount to the value of its own portfolio. That means the company is cheap enough to be worth more dead than alive.
As an added sweetener, PSEC’s management team has also been aggressively buying the stock of late. Over the past two years, the management team has collectively purchased over $100 million in PSEC stock on the open market. While that doesn’t necessarily guarantee anything, it does at least tell us that management has skin in the game, and that’s something I like to see.
Eaton Vance Limited Duration Income Fund
Symbol: EVV
Dividend yield: 7.7%
Type: Closed-end fund
Another pocket of the market that tends to be ripe with monthly dividend stocks are closed-end funds (CEFs). CEFs are a type of mutual fund that trades on the New York Stock Exchange. But unlike ETFs, which are also actively traded, CEFs have no mechanism for creating or destroying shares. So you often get situations where the share price deviates wildly from the underlying value of the portfolio.
And that’s where CEF investing can get fun. If you can find that proverbial 90-cent dollar (and one that pays a nice monthly dividend), then why wouldn’t you take advantage of it.
This brings me to the Eaton Vance Limited Duration Income Fund, a CEF investing primarily in bank loans, though also investing in bonds, mortgage-backed securities and other income assets. The average duration of its investments is less than three years, so EVV has been relatively insulated by the surge in long-term bond yields that has roiled the fixed-income markets.
At current prices, EVV trades at a discount to net asset value of 9.2% and sports a dividend yield of 7.7%. That would make EVV a very solid addition to any monthly dividend stock portfolio.
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REITS - >>> Forget a Rate Hike, Here Are Reasons to Be Optimistic on REITs
Zacks Equity Research
February 02, 2017
http://finance.yahoo.com/news/forget-rate-hike-reasons-optimistic-214409168.html
Despite the looming Fed tightening and bond market pullback, there are enough reasons to be cautiously optimistic on REITs. Prominent among these are the industry’s inherent fundamental strength and sufficient scope to excel under the Trump presidency.
In fact, fiscal stimulus like tax reduction and infrastructure spending drive demand, fuel economic growth and push up inflation and amid all this, the fundamentals of the real estate industry also get a boost. But as not all asset categories are equally capable of thriving, it would be apt to find out those real estate areas that have favorable supply-demand dynamics and the opportunity to prosper. Further, the creation of the exclusive headline sector for real estate under the GICS raised expectations of drawing in billions and pushing up valuations over time.
So if investors can manage short-term hiccups in treasury yields and digest the rate hike issue, the strengthening of the REIT industry will likely ensure solid long-term gains. Also, these hiccups can offer you solid entry points.
Industrial REIT
In the industrial real estate market, demand for space has been high for several quarters. Per a study by the commercial real estate services’ firm CBRE Group Inc. (CBG), for the U.S. industrial market, availability fell for 26 straight quarters to 8.2% in fourth-quarter 2016.
Amid economic expansion, e-commerce boom and heightened urbanization, companies are shifting their strategy toward services like same-day delivery and other such options, propelling demand for warehouse distribution facilities. And with a larger customer base, they are opting for supply-chain consolidation, resulting in greater demand for logistics infrastructure and efficient distribution networks, thereby creating scope for industrial REITs to flourish. And with supply remaining considerably tight, growth in rent has been strong in most of the industrial markets in the nation in recent quarters.
Moreover, construction of mega industrial houses spanning 1 million square feet or more is rampant in large industrial markets, according to another report from CBRE Group. Around 90 million square feet of these mega facilities, which benefit from growing e-commerce business, have been accomplished since 2010 in the top 10 markets, while an additional 31.6 million square feet is under construction, with 60% pre-commitments, reflecting solid demand for such facilities.
Against such a favorable backdrop, the industrial sector has climbed great heights, logged in an impressive total return of 30.72% and emerged as the top performing Equity REIT market segment for the year.
Data Center REITs
Growth in cloud computing, Internet of Things and big data is not only helping tech companies, it is also driving demand for data center REITs. In fact, these REITs pulled in their capital and scored well on the return book, registering total returns of 26.41% in 2016.
Office REIT
Office REITs are experiencing decent demand in recent times. In fact, the overall office vacancy rate declined 10 basis points (bps) to 12.9% in fourth-quarter 2016, denoting the lowest level since first-quarter 2008. Also, in 2016, gross asking rent growth touched 6.0%, which denoted the fastest annual rate since 2007. Going forward, with economic improvement and recovery in the job market, demand for office space is expected to shoot higher.
Residential REIT
In apartment markets, supply has been a major concern in recent months, particularly in the high end and luxury apartment categories. However, market fundamentals are still steady in the mid-range markets. So companies having a portfolio that is diversified both in terms of geography and price points have the scope to enjoy relatively stable revenues.
On the other hand, the student housing market recorded solid rent growth in the fall 2016 leasing session, though leasing slowed to some extent, per a recent study by Axiometrics. Going by statistics, the effective rent levels for fall 2016 averaged $618 per bed nationally. This denotes a rise of 2.3% from the year-ago period, with the majority of properties averaging in the range of 2–4%.
Moreover, with a higher education earnings gap – millennials with high school diplomaare earning just 62% of what college graduates are making – college enrollment is set to increase and this would drive up demand of residential units that student REITs lease. Also, there is pent-up demand for new, purpose-built student housing properties that have better amenities than old, outdated housing.
Further, student housing REITs have decent opportunities to excel in the coming years as demand is emanating for on-campus developments from universities that are facing state budget cuts and low funds, and are incapable of developing or renovating their ageing housing properties. And on-campus housing usually enjoy full occupancy.
Retail REIT
For retail REITs, issues like decline in mall traffic and store closures amid the online sales boom will dominate the market going ahead. However, the way mall REITs like GGP Inc. (GGP) and Simon Property Group Inc. (SPG) came forward to acquire Aeropostale and save the apparel retailer from bankruptcy has set an example in the market. This could in fact be a way retail landlord address their tenants’ business troubles in the future.
Moreover, upbeat consumer confidence and increasing consumer spending amid an improving economy infuse optimism in the retail market. Further, amid rising competition from online retailers, retail REITs are focusing on the omni-channel retailing concept, transforming their boring shopping hubs into swanky entertainment zones and distribution centers as well as embracing the latest technologies to offer attractive services to tenants and mall visitors. Eventually, such measures are likely to help in increasing traffic.
Retail REITs also prefer expansion of small shops, which comprise service-based industries such as saloons and spas, personal fitness, and medical practices. Such properties enjoy frequent customer traffic, are Internet-resistant, and therefore drive a dependable traffic.
Also, mixed-use developments have gained popularity for their solid neighborhood character, greater housing variety and density. Such developments lower the distance between housing, workplaces, retail businesses, and other amenities and destinations. Hence, such development enable the companies to grab the attention of people, who prefer to live, work and play in the same area – a trend that drove development in several other cities in the U.S.
Therefore to explore these positives of mixed-use developments, REITs like AvalonBay Communities Inc. (AVB) and Regency Centers Corporation (REG) went for the Market Common Clarendon. Also, Mack-Cali Realty Corp. (CLI) is focused on transforming itself through waterfront and transit-based office holdings, and on luxury multi-family portfolio growth, which is encouraging.
Stocks to Add to Your Portfolio
Specific REITs that we prefer include EPR Properties (EPR), The GEO Group, Inc. (GEO), Urban Edge Properties (UE) and Piedmont Office Realty Trust, Inc. (PDM).
EPR Properties is specialty REIT that invests in three primary segments: Entertainment, Recreation and Education. EPR has a long-term growth rate of 8.3%, ahead of the industry average of 5.5%. It has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The GEO Group, Inc. is a REIT that specializes in the design, development, financing and operation of correctional, detention and community reentry facilities. It is a steady performer, having surpassed the Zacks Consensus Estimate in the trailing four quarters, with an average surprise of 13.3%. It has a Zacks Rank #2. Also, its estimates for 2017 are moving north over the past three months.
Urban Edge Properties acquires, develops, owns, manages and improves shopping centers in urban communities. For Urban Edge Properties, the projected growth rate is 38.7% for 2016 and 5.4% for 2017.
Piedmont Office Realty Trust is engaged in the ownership, management, development, and operation of high-quality, Class A office properties situated in select sub-markets of major U.S. cities. It has a Zacks Rank #2 and its estimates for 2017 have moved north over the past two months.
Check out our latest REIT Industry Outlook here for more on the current state of affairs in this market from an earnings perspective.
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>>> Prison Stocks Are on a Rampage Thanks to President Trump
Emily Stewart
Jan 22, 2017
https://www.thestreet.com/story/13960295/2/prison-stocks-have-gone-on-a-rampage-ahead-of-donald-trump-s-inauguration.html
Private prison stocks have soared in light of recent American political developments, and they may be poised to climb even higher now that Donald Trump is in the White House.
Trump's election and his subsequent announcement of plans to nominate Alabama Senator Jeff Sessions as Attorney General have sent investors rushing to private prison stocks in recent months. Since Election Day, shares of The GEO Group (GEO) have climbed more than 60%, and shares of CoreCivic (CXW) have surged over 95%. The cause of the rally is two-fold, said Michael Kodesch, analyst at research firm Canaccord Genuity -- Trump won, and Hillary Clinton lost
"It's not necessarily all about what Trump's policies are but also about what Clinton's policies would have been," he said.
The Democratic nominee, who was widely expected to win the election, had called for an end to private prisons and the closure of family detention and private immigration detention centers. A single tweet from the former Secretary of State caused shares of Geo and CoreCivic to plunge in September.
The Obama administration had also taken a critical stance on private prisons. Shares plummeted in August when the Department of Justice issued a memo to the Bureau of Prisons announcing plans to phase out their use.
"Once Trump was elected, all of that went away," Kodesh said.
Trump is likely to be more private prison-friendly. He expressed his support for such entities in an interview with MSNBC's Chris Matthews in March, and his policies -- specifically those related to immigration -- bode well for the industry.
At an October campaign speech in Gettysburg, Pennsylvania, Trump proposed a two-year mandatory minimum prison sentence for illegal immigrants reentering the U.S. after deportation and a mandatory five-year minimum for illegal criminal immigrants reentering. Such a measure would likely result in the detention of more illegal immigrants by U.S. Immigration and Customs Enforcement (ICE), and from that perspective, private prisons are a massive player.
About two-thirds of immigrant detainees are kept in private facilities (as opposed to about 15% of federal inmates). According to data from the Austin, Texas-based organization Grassroots Leadership, the private prison industry is expected to acquire 80% of any future immigrant detention beds.
GEO CEO George Zoley said the private sector is the "really the only logical solution for organizations that can move quickly and meet the detention standards" ICE needs for residential centers in a November conference call.
"That's probably the biggest opportunity from a Trump administration coming in," Kodesh said.
For now, prison stocks have been set free
The August DOJ memo to the BOP still stands, but if confirmed, Sessions is likely to reverse course. Regardless, facilities run by both GEO and CoreCivic have received contract renewals since then, albeit with smaller bed allotments.
To be sure, not all is working in the private prison industry's favor.
The U.S. prison population shrunk to its smallest in a decade in 2015, falling by 2% to 1.5 million prisoners at the end of that year. GEO recently ended a contract with the Vermont Department of Corrections for a prison that was at about 15% capacity.
California voters in November voted in favor of Prop 57, a proposal for increasing parole and good behavior opportunities for felons convicted of nonviolent crimes. According to the Associated Press, the measure makes about 7,000 inmates immediately eligible. At the start of 2016, there were about 25,000 nonviolent California felons who could seek early release and parole under the measure.
California voters approved similar measure, Prop 47, in 2014, which reduced nonviolent, non-serious crimes to misdemeanors and improved the chances of parole consideration for more inmates.
The measure "picked a lot of the low-hanging fruit," Kosech said, and it took several months to make a notable impact on prison populations. Something similar could happen with Prop 57.
"We're probably not going to see anything happen at first until these prisoners go through its process," he said.
CoreCivic has more exposure to California sentencing reform than GEO.
There are a number of political forces in play at well.
In August, Department of Homeland Security Secretary Jeh Johnson asked the Homeland Security Advisory Council to examine whether the agency should pull back from the use of private facilities. The resulting report sent mixed signals.
The six-person subcommittee that prepared the report determined fiscal and capacity issues made it necessary for DHS to use private for-profit entities. However, one of the members, Marshall Fitz, dissented, and more than two-thirds of the council members objected to its conclusion and instead recommended Fitz's dissent to the DHS.
It will ultimately be Johnson's successor who will decide what to do. Trump has tapped retired General John Kelly to head the department.
Lobbying activity may have an effect as well. According to data from the Center for Responsive Politics, GEO spent $580,000 on lobbying efforts in 2016 and CoreCivic, formerly Corrections Corp of America, $890,000. GEO also gave $125,000 to a pro-Trump super PAC during the presidential campaign.
"We look forward to strengthening our partnership at the Federal level as we have for the last 30 years under both Republican and Democratic administrations and believe we are uniquely positioned to provide high quality services in safe, secure and humane residential environments while maximizing cost savings for taxpayers," said GEO spokesman Pablo Paez in a statement.
CoreCivic representatives did not return request for comment.
"Despite the recent run-up, we could see more upside on both stocks," wrote Kosech and fellow Canaccord Genuity analyst Ryan Meliker in a recent analyst note.
In other words, it might not be too late for investors to hop on board.
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>>> Collectors Universe Inc. provides third-party authentication, grading, and related services for rare and high-value collectibles consisting of coins, trading cards, sports memorabilia, and autographs. The company operates through three segments: Coins; Trading Cards and Autographs; and Other High-End Collectibles. It offers independent coin authentication and grading services under the Professional Coin Grading Service brand; independent sports and trading cards authentication and grading service under the Professional Sports Authenticator brand; and independent authentication and grading service for vintage autographs and memorabilia under the PSA/DNA Authentication brand. The company also operates certified coin exchange, a subscription-based business-to-business Internet bid-ask market Website, certifiedcoinexchange.com that includes approximately 100,000 bid and ask prices for certified coins; and collectors corner, a business-to-consumer Website, collectorscorner.com, which consists of approximately 108,000 collectibles for sale. In addition, it publishes magazines that provide market prices and information for certain collectibles and high-value assets, which are accessible on its Websites; and authoritative price guides, rarity reports, and other collectibles data to provide collectors with information. Further, the company sells advertising and click-through commissions on its Collectors.com Website, as well as in the magazines; and manages and operates collectibles trade shows and conventions. Collectors Universe Inc. was founded in 1986 and is headquartered in Santa Ana, California. <<<
>>> Donald Trump's Israel ambassador is hardline pro-settler lawyer
(Not too thrilled about this guy, but at least Trump won't have to worry about getting knocked off by the Mossad)
David Friedman opposes two-state solution, backs undivided Jerusalem as capital and has acted for Trump’s failing hotels
Peter Beaumont in Jerusalem and Julian Borger in Washington
16 December 2016
https://www.theguardian.com/us-news/2016/dec/15/trump-israel-ambassador-david-friedman
Donald Trump has named as his ambassador to Israel a pro-settler lawyer who has described some US Jews as worse than concentration camp prisoner-guards.
David Friedman, a bankruptcy lawyer who represented the president-elect over his failing hotels in Atlantic City, served Trump’s advisory team on the Middle East. He has set out a number of hardline positions on Israeli-Palestinian relations, including fervent opposition to the two-state solution and strong support for an undivided Jerusalem as Israel’s capital.
He has called President Barack Obama an antisemite and suggested that US Jews who oppose the Israeli occupation of the West Bank are worse than kapos, Nazi-era prisoners who served as concentration camp guards.
Donald Trump still set on relocating US embassy in Israel, adviser says
Liberal Jewish groups in the US denounced the appointment as “reckless” and described Friedman – a man with no experience of foreign service – as the “least experienced pick” ever for a US ambassador to Israel.
Yossi Dagan, a prominent Israeli settler leader and friend of Friedman, welcomed the news, describing him as “a true friend and partner of the state of Israel and the settlements”. Morton Klein, the president of the Zionist Organization of America, said Friedman had “the potential to be the greatest US ambassador to Israel ever”.
An indication of how Friedman views Israel came in a 16-point action plan he issued with another Trump adviser in November. It included “ensur[ing] that Israel receives maximum military, strategic and tactical cooperation from the United States” and a declaration of war on the Boycott, Divestment and Sanctions (BDS) movement and pro-Palestinian campus activism.
Friedman, 57, has worked with Trump for more than 15 years and advised the president-elect on the Middle East during his election campaign. He represented Trump after the umbrella company for his three Atlantic City casinos, Trump Entertainment Resorts, went into bankruptcy in 2009.
He said he was looking forward to taking up his post in “the US embassy in Israel’s eternal capital, Jerusalem”, indicating Trump’s determination to overturn years of US policy and move the embassy from Tel Aviv. The change would be a potentially explosive gesture in the Middle East, as the status of Jerusalem is one of the issues in the long-stalled Israeli-Palestinian negotiations.
Also controversial is Friedman’s presidency of the American Friends of Bet El Institutions, an organisation that supports a large illegal West Bank settlement just outside Ramallah.
His links with Bet El, along with recent revelations that the family charity of Jared Kushner, Trump’s son-in-law, gave money to one of the West Bank’s most hard-line ideological settlements, suggests the settler movement will have an unprecedented number of advocates in the heart of Washington.
Announcing the appointment in a statement, Trump said: “[Friedman] has been a long-time friend and trusted adviser to me. His strong relationships in Israel will form the foundation of his diplomatic mission and be a tremendous asset to our country as we strengthen the ties with our allies and strive for peace in the Middle East.”
The announcement appears to have caught Israeli analysts by surprise. The Haaretz columnist Chemi Shalev said Friedman made Israel’s rightwing prime minister, Benjamin Netanyahu, “seem like a leftwing defeatist”.
“From where Friedman stands,” he said, “most Israelis, never mind most American Jews, are more or less traitors.”
Friedman disagrees with the general international consensus that the settlements are illegal and he opposes a ban on settlement construction on the West Bank and in East Jerusalem.
He wrote in the Jerusalem Post during the US election campaign that Israel would feel “no pressure” under a Trump administration. “America and Israel will enjoy unprecedented military and strategic cooperation, and there will be no daylight between the two countries,” he said.
In a column for the Israel National News website, he compared the liberal Jewish US lobby group J Street to concentration camp prisoner-guards and described its supporters as “smug advocates of Israel’s destruction delivered from the comfort of their secure American sofas – it’s hard to imagine anyone worse”.
He went further at the Saban forum earlier this month, saying J Street’s supporters were “not Jewish, and they’re not pro-Israel”.
The J Street president, Jeremy Ben Ami, said in a statement on Thursday: “J Street is vehemently opposed to the nomination of David Friedman. This nomination is reckless, putting America’s reputation in the region and credibility around the world at risk.”
The National Jewish Democratic Council tweeted: “Trump must stand for a strong US-Israel relationship and take it seriously. [There] hasn’t ever been a less experienced pick for US ambassador to Israel.”
Lara Friedman, of Americans for Peace Now, tweeted: “I don’t know about the Palestinians, but I know Jews who truly care about Israel’s security, democracy & place in the world are outraged.”
Like Trump, Friedman is an admirer of Vladimir Putin, and has portrayed the Russian president as fighting Islamic State in Syria despite little of the Russian war effort being focused on Isis.
“Vladimir Putin gets it,” Friedman wrote in November last year. “He may be a ‘thug,’ as he was recently described by Senator [Marco] Rubio, but he knows how to identify a national objective, execute a military plan, and ultimately prevail.”
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>>> Donald Trump's Companies Filed for Bankruptcy 4 Times
By AMY BINGHAM
April 21, 2011
http://abcnews.go.com/Politics/donald-trump-filed-bankruptcy-times/story?id=13419250
Donald Trump -- or companies that bear his name - have declared bankruptcy four times.
Trump has built an American empire from Las Vegas to New York with towering hotels and sparkling casinos. Forbes estimates he's worth $2.7 billion. But not all of Trump's business ventures have been constant money-makers. In 1991, 1992, 2004, and again in 2009, Trump branded companies or properties have sought Chapter 11 protection.
"I've used the laws of this country to pare debt. ... We'll have the company. We'll throw it into a chapter. We'll negotiate with the banks. We'll make a fantastic deal. You know, it's like on 'The Apprentice.' It's not personal. It's just business," Trump told ABC's George Stephanopoulos last Thursday.
A business declaring bankruptcy is nothing new in corporate America, where bankruptcy is often sugar-coated as "restructuring debt." But it might seem alarming to everyday Americans who can't get a bank to restructure their home loans. If you want to get Donald Trump hot under the collar, accuse him of declaring bankruptcy.
Doug Heller, the executive director of Consumer Watchdog, said Trump is the "most egregious, almost comical example" of the disparity between what the average American faces when going through bankruptcy and the "ease with which the very rich can move in and out of bankruptcy."
"Under the American bankruptcy laws, if you end up in bankruptcy because you're struggling with divorce or medical payments or a sudden change of income, it's a disaster. If you fail miserably with huge dollars involved then you just need some accountants to rework your books," Heller said.
The multi-billionaire touts his huge net worth and big business experience as qualifications for his possible presidential run. Trump recently bragged that he has "a much bigger net worth" than Mitt Romney, who he said is "basically a small business guy."
"I'm a much bigger businessman. … I mean, my net worth is many, many, many times Mitt Romney's," Trump said.
The big business man has wrangled with big debt in the past 20 years. Trump's first visit to bankruptcy court was in 1991, when his Atlantic City casino, the Taj Mahal, was buried under a mountain of debt. The Taj carried a $1 billion price tag and was financed by junk bonds carrying a staggering 14 percent interest rate. As construction completed, the economy slumped, as did the Atlantic City gambling scene, soon plunging Trump into $3.4 billion of debt.
'Keep the Donald Afloat'
"[The banks] could have simply taken everything he had right then, but they wanted his cooperation," said Lynn LoPucki, a bankruptcy expert and professor at UCLA Law School. "There's that old saying, 'If you owe your banks a little, you're at their mercy. If you owe the banks a lot, the banks are at your mercy. They saw the best way for him to repay the money was to keep the Donald afloat."
The Donald struck a deal with the banks to hand over half his ownership, and half of the equity, in the casino in exchange for a lower interest rate and more time to pay off his debt. He sold off his beloved Trump Princess yacht and the Trump Shuttle airplane to make his payments, and his creditors put him on a budget, putting a cap on his personal spending.
"The first one was a really big hit for him. They had him personally, and he ended up taking substantial losses in that bankruptcy. He also had the humiliation of having some bankers deciding how much money he could spend -- the numbers are just astonishing -- the amount of his monthly budget," LoPucki said.
John Pottow, a bankruptcy expert and law professor at the University of Michigan, said banks would often agree to lose millions in reorganizations like Trump's to prevent the massive losses they would incur if they foreclosed on the property.
"Banks will take considerable haircuts," Pottow said. "It's sort of like you have a sick patient so you cut off a couple toes to stop the gangrene. Now he's missing a few toes, but he's still alive."
Trump Hotels and Casino Resorts
Just one year after the Taj Mahal deal was struck. Trump was back in court, again "restructuring" his debt. This time the Trump Plaza Hotel in Atlantic City was in the lenders' crosshairs. Trump owed $550 million on the hotel and agreed to give up 49 percent of the hotel to Citibank and five other lenders. In return, Donald Trump was given a similar deal as before, with more lenient conditions to repay the debt. The Donald stayed on as chief executive, but his salary was taken away.
"Here's a guy who's failed so miserably so many times and it's not as though he had to claw his way back after seven years in credit hell. He just said. 'OK, this isn't my problem anymore.' For him, it's just been a platform to the next money-making scheme," said Dough Heller, the executive director of Consumer Watchdog.
In 2004 Trump Hotels and Casino Resorts Inc. filed for voluntary bankruptcy after accumulating $1.8 billion in debt. The Donald agreed to reduce his share in the company from 47 percent to 25 percent, meaning he no longer had control over the company. The deal also included lower interest rates and a $500 million loan to make improvements.
"In 2004 is where he lost control of his name. One rule when you have a name like Trump is you never let anyone own it and control it. He got into such a bad spot here that he ended up with others owning and controlling his name. They can do what they want once they own it," LoPucki said.
Shortly after the proceedings, Trump told CNN's Geri Willis that his personal fortune would not be affected. "This is a very small portion of my net worth. It's less than 2 percent," he said.
When the economy turned downward in 2008, so too did Trump's real estate holdings. Trump Entertainment and his affiliated companies had $2.06 billion in assets and was $1.74 billion in debt. In December 2008 his company missed a $53.1 million bond interest payment, propelling Trump Entertainment Resorts into bankruptcy court and plunging its stock price from $4 per share to a mere 23 cents.
This time, Trump fought with his board of directors over the restructuring and ended up resigning as chairman of the board. He emerged from a messy, months-long process with a 10 percent share of the company.
LoPucki said it was very unusual for anyone to have that many large businesses go through bankruptcy. Most of the debt Trump incurred was through bonds that were sold to the public.
"People knew who Donald Trump was and for that reason were willing to trust the bonds, and they got burned," LoPucki said. "The people who invested with him or based on his name lost money, but he himself came out pretty well."
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Understanding Trump -
Psychologists call Trump 'remarkably narcissistic' and 'textbook narcissistic personality disorder'. They say that narcissism is an 'extreme defense against one's own unconscious feelings of worthlessness. A man who feels the need to forever trumpet his superiority might feel an entirely different way underneath.'
Later in this video is a good example of Trump's enormous ego potentially getting him into a heap of trouble. He has his exhausted pilot do a low altitude 'flyover' over Trump's new golf course in Scotland.
This is of course pure Trump, and his egotistical need for self aggrandizement. Extremely egotistical people who require constant reinforcement of their status and prowess are trying to make up for a deep seated insecurity complex -
4) Trump's thin skin and long memory -
I should have added this as #4. Trump isn't alone in having this trait (Nixon and Hillary come to mind), but Trump reportedly will carry a grudge forever and has already assembled a political 'enemies list'.
In politics you have to be able to build coalitions with rivals and enemies, be pragmatic, and have a thick skin. Does Trump have the required temperment, or will his need for revenge sabotage his presidency ala Nixon? Trump already has most of the media hating him. He needs to cultivate Reagan's 'teflon' abilities and just let things roll off.
Trump actually does have some of that 'teflon' ability, but usually via the use of sharp counterattacks, compared to Reagan's less aggressive approach. The next 4 years could be a real nightmare if Trump isn't able to get the Left media chilled down. I lived thru the Watergate era and have no desire to see that again.
Trump has had several large business failures over the years, and with the benefit of hindsight there are some contributing factors that stand out -
1) Ego driven overreach, hubris. This has been a personality trait throughout Trump's life.
2) Getting into businesses that were outside his expertise. Manhattan real estate is Trump's forte and that's what he was always most interested in. When he got into the Atlantic City casino business (and the airline business), he was entering areas outside of his expertise and he didn't have a strong innate interest in them, and didn't fully understand the dynamics.
3) Loss of key advisors - in 1989, 3 of Trump's closest business advisors were killed in a helicopter crash, and he wasn't able to adequately replace them.
These are 3 key areas which will likely determine whether or not Trump's presidency is a success - his ego, his lack of expertise and possible lack of interest, and the quality of his advisors.
Let's hope there's more to Trump than the veneer, and he gets good advisors around him. I think Gingrich would be a good guy to have around - he knows how the government works and is smart enough to get quickly up to speed on the current foreign policy realm. Gingrich may have some baggage as a Washington insider, but you have to have an experienced guy in there somewhere, and he would also be reassuring to the Deep State. Gingrich is usually the smartest guy in the room, and could help keep the Donald out of trouble, and Trump is clearly going to need the help
Donald Trump's Private Air Force One Plane Documentary 2016 -
repub are babes when it comes to "getting the narative" straight before speaking, then sending out their dozens, or more, minions, to float or sell new positions.
knewt was out saying how media does not know how to say thank you for 1100 jobs kept here while bo did nothing close in 8 years, while the alaska ex gov is attacking them for it at same time.....they will learn, or they will keep democracy not semetrical, as it was meant to be, messy, imo.
80% of media heads are exploding.
trump sued in mi saying that recount laws were never meant to give low level 1% of vote getter, out of the running, candidates, the right to commander the recount process as they have NO CHANCE of winning. reb aj supported so looks like going to mi supream court this weekend, trumps people also said hand recount could not possibly be done by dec 13th, the cut off date.
funny, depending on which party controlled the recount process the estimates of the cost:
wi = 3.9 million (3.5 was charged incorrectly)
pa = < 1 million
mi = 5 million
just a little different, much more than stein ever raised during run, i agree that recount laws were not intended for candidates that can't win, 1-2% of vote, or why not rich guy who wrote his own name in, just to get some pub, and were meant for close races, by whoever came in second, or a close third.
>>> For Secretary of State: John Bolton
Cal Thomas
Dec 01, 2016
http://townhall.com/columnists/calthomas/2016/12/01/for-secretary-of-state-john-bolton-n2252869
President-elect Donald Trump is reportedly considering seriously at least two men for the critical position of secretary of state. One, former presidential candidate Mitt Romney, has divided the Trump team between those who think it is a good idea and those who think Romney's severe criticism of Trump during the campaign disqualifies him.
The other is retired general and former CIA Director David Petraeus. A major problem for Petraeus is his mishandling of classified documents, which he reportedly leaked to his biographer-mistress, Paula Broadwell. After Trump hammered Hillary Clinton for her "extremely careless" handling of classified material when she was secretary of state, it would be hypocritical of Trump to name Petraeus.
Though also in the running, former New York mayor, Rudy Giuliani is thought to be running a distant third, if the number of visits in and out of Trump Tower are any indication.
So, of the top two contenders, who? How about someone with experience as a diplomat, including within the State Department and as a former U.N. ambassador?
John Bolton, now a senior fellow at the American Enterprise Institute and a regular commentator on cable news, does not engage in wishful thinking, or project American morals on those who don't share them in the vain hope they might be contagious. Here is Bolton on the threat of radical Islamic terrorism: "When you have a regime that would be happier in the afterlife than in this life, this is not a regime that is subject to classic theories of deterrence."?
In his book "Surrendering is Not an Option: Defending America at the United Nations," Bolton is unrelenting in his criticism of the toothless UN and of many U.S. policies that have not produced results in America's best interests -- precisely the attitude of President-elect Trump, who wants to look out for America and its interests first. In this pursuit he is not unlike one of his predecessors, Ambassador Jeane Kirkpatrick, who said, "What takes place in the Security Council more closely resembles a mugging than either a political debate or an effort at problem-solving." It is a mugging, and too often it is the United States and Israel who get mugged.
Here's another Bolton quote: "Negotiation is not a policy. It's a technique. It's something you use when it's to your advantage, and something that you don't use when it's not to your advantage." That is the opposite of wishful thinking.
In a July 2015 column for the Dallas Morning News, Bolton wrote that it is a fiction to believe Iran won't violate terms of the nuclear weapons deal it made with the Obama administration. He argues that "snapback" sanctions won't work because sanctions failed before. He thinks the only option for keeping nuclear weapons out of the hands of the ayatollahs is Israel.
"However, Iran may well retaliate," Bolton acknowledges. "At that point, Washington must be ready to immediately resupply Israel for losses incurred by its armed forces in the initial attack, so that Israel will still be able to effectively counter Tehran's proxies, Hamas and Hezbollah, which will be its vehicles for retaliation. The United States must also provide muscular political support, explaining that Israel legitimately exercised its inherent right of self-defense. Whatever Obama's view, public and congressional support for Israel will be overwhelming."
Who is to blame for this situation? Bolton writes: "American weakness has brought us to this difficult moment. While we obsessed about its economic discomfort, Iran wore its duress with pride. It was never an even match. We now have to rely on a tiny ally to do the job for us. But unless we are ready to accept a nuclear Iran (and, in relatively short order, several other nuclear Middle Eastern states), get ready. The easy ways out disappeared long ago."
This is sober reality and precisely the worldview that is needed at the Department of State.
<<<
so, did you read how the ceo of reddit, i assume is a little like twitter maybe, logged into his personal, secret account over thanksgiving holiday, to CHANGE TRUMP POSTERS POSTS TO MAKE IT LOOK LIKE THEY WERE ATTACKING TRUMP rather than, i assume, the dems. (never been member of either site)
f'ing manipulated their posts, barely admitted to "making mistake" and now is just deleting, or getting rid of trump accounts, to silence those thoughts that might not agree with his. talk about missing the boat, f'ing elitist thinking nothing wrong with their thinking, as long as you agree with it.
hope ag opens freedom of speech on public sites, even if they are privately held, not sure if reddit is private, public, or bernie type only supported. bo would find a lawsuit and retraining in there somewhere if what was something he didn't believe in....
ugg..
SC, I'm thinking the Deep State now prefers Trump, so the machinations by the pro-Hillary forces will likely be in vain. Just look what happened to G Sachs and the banking sector since the election, up over 25%.
Trump has Mnuchen (ex G Sachs) as Sec of Treasury and will reportedly be deregulating the financial sector to some extent (bad idea imo, but the banksters love it). Trump will be cutting corporate tax rates big time (35% down to 15%), and the tax cuts and infrastructure spending will finally produce the inflation the Fed has been wanting and enable them to 'normalize' interest rates and the Fed balance sheet.
None of this would be happening under Hillary. Politically, Hillary wouldn't be able to cut the corporate tax rate or deregulate the banks. She might have been able to push for infrastructure spending, but she didn't stress that at all during the campaign, and Obama did very little on infrastructure despite his early promises.
So my working assumption now is that the Fed/Deep State want Trump. The remaining question is whether Trump will interfere with the Deep State's foreign policy agenda, and if Trump nominates either Romney or someone like John Bolton, the Deep State should be happy.
Of course there are competing factions within the Deep State over foreign policy (Neocons, and the more traditional Trilaterals), but I think their strategy against Syria and Russia has converged over the past several years, not so much by choice but by events. So Trump's desire for 'friendly relations with Russia' will unfortunately be reversed, but hopefully there can still be enough diplomacy to avoid stumbling into WW III.
not sure how reliable the source was as i think it was yahoo, about 12x in the tank for dems, but 19 yo, wtf?????
>> Mnuchin <<
I was actually impressed listening to Mnuchin and the Commerce Secretary pick Wilber Ross (link below). These guys sound like they know exactly what they want to do.
Based on what Rickards has said, Trump's domestic plan of tax cuts and infrastructure spending is in direct alignment with what the Fed now wants, since it is virtually guaranteed to boost the economy and create enough inflation to finally allow the Fed to 'normalize' rates and reverse their bloated balance sheet.
The impression one gets from Rickards is that the Fedsters don't really care about boosting the economy to help the US population, they only care about generating enough inflation to allow them to 'normalize', which will give them ammo to deal with future financial crises.
The way things are now, with interest rates near zero and the Fed's balance sheet at 4-5 trillion range, the Fed has no tools left to deal with even a modest financial crisis.
So domestically (tax cuts, infrastructure), Trump seems to be on solid ground and will have full support of the Fed/Deep State. Foreign policy-wise could be a different story however, but we'll see who he picks for Sec of State -
SC, >> count now at 7 turncoats <<
Wow, I hadn't heard that. That make these recounts a lot more important. If they reverse PA and Mich, then Hillary wins if she also gets the 7 elector reversals -
232 + 20 + 16 + 7 = 275
===and Trump is clearly going to need the help.=====
as would anyone who never held public office, unreal it starts at the top, must have been a complete, non likable, person he beat.
can't read most of media, still coming unglued he won, latest 19 year old elector for washington state not voting in line with electorial college. how did a 19 yo get that kind of responsibility??????
she said she is joining hamilton's xxxxxxxx(something)
count now at 7 turncoats, as of yesterday's read.
with recounts going on, the mainstream media is 10x to 1 in coverage of anything negative he's doing to positive with him, dec 19th can't get here fast enough imo.
what i am wondering is how the incoming heads of departments, like state, irs, defense, national security, ect., how do they clear the dems out that are entrenched as i thought it was nearly impossible to get rid of a fed employee once hired......demoted maybe???
'Winging it'
Trump has had several large business failures over the years, and with the benefit of hindsight there are some contributing factors that stand out -
1) Ego driven overreach, hubris. This has been a personality trait throughout Trump's life.
2) Getting into businesses that were outside his expertise. Manhattan real estate is Trump's forte and that's what he was always most interested in. When he got into the Atlantic City casino business (and the airline business), he was entering areas outside of his expertise and he didn't have a strong innate interest in them, and didn't fully understand the dynamics.
3) Loss of key advisors - in 1989, 3 of Trump's closest business advisors were killed in a helicopter crash, and he wasn't able to adequately replace them.
These are 3 key areas which will likely determine whether or not Trump's presidency is a success - his ego, his lack of expertise and possible lack of interest, and the quality of his advisors.
Let's hope there's more to Trump than the veneer, and he gets good advisors around him. I think Gingrich would be a good guy to have around - he knows how the government works and is smart enough to get quickly up to speed on the current foreign policy realm. Gingrich may have some baggage as a Washington insider, but you have to have an experienced guy in there somewhere, and he would also be reassuring to the Deep State. Gingrich is usually the smartest guy in the room, and could help keep the Donald out of trouble, and Trump is clearly going to need the help.
>>> Trump Chooses an Outspoken Ex-Marine to Lead Defense
The New York Times
By MICHAEL R. GORDON, ERIC SCHMITT and MAGGIE HABERMAN
http://www.msn.com/en-us/news/politics/trump-chooses-an-outspoken-ex-marine-to-lead-defense/ar-AAl2169?li=BBnbcA1&OCID=HPDHP
WASHINGTON — President-elect Donald J. Trump said on Thursday he had chosen James N. Mattis, a hard-charging retired general who led a Marine division to Baghdad during the 2003 invasion of Iraq, to serve as his secretary of defense.
Mr. Trump made the announcement at a rally in Cincinnati, calling General Mattis “the closest thing we have to Gen. George Patton of our time.”
General Mattis, 66, led the United States Central Command, which oversees military operations in the Middle East and Southwest Asia, from 2010 to 2013. His tour there was cut short by the Obama administration, which believed that he was too hawkish on Iran.
But his insistence that Iran is the greatest threat to peace in the Middle East, as well as his acerbic criticism of the Obama administration’s initial efforts to combat the Islamic State in Iraq and Syria, made him an attractive choice for the incoming president, whom he met for the first time after Mr. Trump’s election.
After retiring from the military, General Mattis told Congress that the administration’s “policy of disengagement in the Middle East” had contributed to the rise of extremism in the region. The United States, he told lawmakers in 2015, needs to “come out from our reactive crouch and take a firm, strategic stance in defense of our values.”
But in some important policy areas, General Mattis differs from Mr. Trump, who last week began filling the top ranks of his national security team with hard-liners. General Mattis believes, for instance, that Mr. Trump’s conciliatory statements toward Russia are ill informed. General Mattis views with alarm Moscow’s expansionist or bellicose policies in Syria, Ukraine and the Baltics. And he has told the president-elect that torture does not work.
Despite his tough stance on Iran, General Mattis also thinks that tearing up the Iran nuclear deal would hurt the United States, and he favors working closely with allies to strictly enforce its terms.
James N. Mattis, a retired Marine general, leaving a meeting with President-elect Donald J. Trump in Bedminster, N.J., last month.© Hilary Swift for The New York Times James N. Mattis, a retired Marine general, leaving a meeting with President-elect Donald J. Trump in Bedminster, N.J., last month. General Mattis, whose radio call sign during the invasion of Iraq was Chaos — reflecting the havoc he sought to rain on adversaries — has been involved in some of the United States’ best-known operations. As a one-star general, he led the first Marine force into Afghanistan a month after the Sept. 11, 2001, terrorist attacks and established Forward Operating Base Rhino near Kandahar.
At times, General Mattis’s salty language has gotten him into trouble. “You go into Afghanistan, you got guys that slap women around for five years because they didn’t wear a veil,” he said in 2005. “So it’s a hell of a lot of fun to shoot them.”
But the retired general, a lifelong bachelor who has said that he does not own a television and has often been referred to as a “warrior monk,” is also famous for his extensive collection of books on military history. “Thanks to my reading, I have never been caught flat-footed by any situation,” he wrote a colleague in 2003. “It doesn’t give me all the answers, but it lights what is often a dark path ahead.”
General Mattis would be the first former ranking general to assume the post of defense secretary since George Marshall in 1950-51. He would need a special congressional waiver to serve as defense secretary. He retired from the Marines in 2013, and federal law stipulates that the Pentagon chief be out of uniform for seven years.
But General Mattis has strong support in Congress, especially on the part of John McCain, the Arizona Republican who is chairman of the Senate Armed Services Committee. In a recent phone call, Mr. McCain urged Mr. Trump to consider appointing General Mattis or Gen. Jack Keane, a retired Army vice chief of staff, as defense secretary. But General Keane has decided against returning to government in a full-time capacity.
The selection of General Mattis is a boost for the Marines. If confirmed by the Senate, he would be working with Joseph F. Dunford, the four-star Marine general who serves as the chairman of the Joint Chiefs of Staff. It would also create an unusual situation at the Pentagon because the new defense secretary would be General Dunford’s former commanding officer. During the Iraq invasion, General Dunford was a colonel who led a Marine regiment that reported to General Mattis.
General Mattis appearing before the Senate Armed Services Committee as a general in 2010.© Brendan Smialowski for The New York Times General Mattis appearing before the Senate Armed Services Committee as a general in 2010. General Mattis led the First Marine Division during the 2003 invasion to topple Saddam Hussein. He later commanded American troops during the hard-fought battle to retake Falluja from Sunni insurgents in 2004. As head of the Central Command, General Mattis was heavily involved in plans to counter Iran’s military and protect the sea lanes in the Persian Gulf.
William Kristol, editor of the conservative magazine The Weekly Standard and a staunch opponent of Mr. Trump’s, sought to persuade General Mattis to mount an independent presidential bid. And he was courted by both the campaigns of Mr. Trump and Hillary Clinton to speak at the political conventions, but declined.
In a new book, “Warriors and Citizens,” which General Mattis edited with Kori Schake, a Hoover Institution fellow who served in the George W. Bush administration, he complained that politicians had relied too much on military commanders to make the case for their policies.
“President Bush left to Gen. David Petraeus the task of overcoming congressional opposition to the 2006 Iraq surge,” General Mattis and Ms. Schake wrote. “President Obama has been mostly silent on the war in Afghanistan since 2009; the case for continuing American troop presence has been made entirely by the military.”
Military commanders, they wrote, have a responsibility to carry out and advocate the president’s policies. “This does not remove elected officials from the responsibility to win political arguments instead of depending on the military to do so,” they added.
<<<
>>> Trump’s Breezy Calls to World Leaders Leave Diplomats Aghast
The New York Times
By MARK LANDLER
http://www.msn.com/en-us/news/world/trump%e2%80%99s-breezy-calls-to-world-leaders-leave-diplomats-aghast/ar-AAl1LJr?li=BBnb7Kz&OCID=HPDHP
WASHINGTON — President-elect Donald J. Trump inherited a complicated world when he won the election last month. And that was before a series of freewheeling phone calls with foreign leaders that has unnerved diplomats at home and abroad.
In the calls, he voiced admiration for one of the world’s most durable despots, the president of Kazakhstan, and said he hoped to visit a country, Pakistan, that President Obama has steered clear of during nearly eight years in office.
Mr. Trump told the British prime minister, Theresa May, “If you travel to the U.S., you should let me know,” an offhand invitation that came only after he spoke to nine other leaders. He later compounded it by saying on Twitter that Britain should name the anti-immigrant leader Nigel Farage its ambassador to Washington, a startling break with diplomatic protocol.
Mr. Trump’s unfiltered exchanges have drawn international attention since the election, most notably when he met Prime Minister Shinzo Abe of Japan with only one other American in the room, his daughter Ivanka Trump — dispensing with the usual practice of using State Department-approved talking points.
On Thursday, the White House weighed in with an offer of professional help. The press secretary, Josh Earnest, urged the president-elect to make use of the State Department’s policy makers and diplomats in planning and conducting his encounters with foreign leaders.
“President Obama benefited enormously from the advice and expertise that’s been shared by those who serve at the State Department,” Mr. Earnest said. “I’m confident that as President-elect Trump takes office, those same State Department employees will stand ready to offer him advice as he conducts the business of the United States overseas.”
“Hopefully he’ll take it,” he added.
A spokesman for the State Department, John Kirby, said the department was “helping facilitate and support calls as requested.” But he declined to give details, and it was not clear to what extent Mr. Trump was availing himself of the nation’s diplomats.
Mr. Trump’s conversation with Prime Minister Nawaz Sharif of Pakistan has generated the most angst, because, as Mr. Earnest put it, the relationship between Mr. Sharif’s country and the United States is “quite complicated,” with disputes over issues ranging from counterterrorism to nuclear proliferation.
In a remarkably candid readout of the phone call, the Pakistani government said Mr. Trump had told Mr. Sharif that he was “a terrific guy” who made him feel as though “I’m talking to a person I have known for long.” He described Pakistanis as “one of the most intelligent people.” When Mr. Sharif invited him to visit Pakistan, the president-elect replied that he would “love to come to a fantastic country, fantastic place of fantastic people.”
The Trump transition office, in its more circumspect readout, said only that Mr. Trump and Mr. Sharif “had a productive conversation about how the United States and Pakistan will have a strong working relationship in the future.” It did not confirm or deny the Pakistani account of Mr. Trump’s remarks.
President Nursultan A. Nazarbayev of Kazakhstan in Tokyo in November. The Kazakh government said Mr. Trump had lavished praise on Mr. Nazarbayev in a recent phone call.© Franck Robichon/European Pressphoto Agency President Nursultan A. Nazarbayev of Kazakhstan in Tokyo in November. The Kazakh government said Mr. Trump had lavished praise on Mr. Nazarbayev in a… The breezy tone of the readout left diplomats in Washington slack-jawed, with some initially assuming it was a parody. In particular, they zeroed in on Mr. Trump’s offer to Mr. Sharif “to play any role you want me to play to address and find solutions to the country’s problems.”
That was interpreted by some in India as an offer by the United States to mediate Pakistan’s border dispute with India in Kashmir, something that the Pakistanis have long sought and that India has long resisted.
“By taking such a cavalier attitude to these calls, he’s encouraging people not to take him seriously,” said Daniel F. Feldman, a former special representative to Afghanistan and Pakistan. “He’s made himself not only a bull in a china shop, but a bull in a nuclear china shop.”
Husain Haqqani, a former Pakistani ambassador to Washington, said his government’s decision to release a rough transcript of Mr. Trump’s remarks was a breach of protocol that demonstrated how easily Pakistani leaders misread signals from their American counterparts.
“Pakistan is one country where knowing history and details matters most,” Mr. Haqqani said, “and where the U.S. cannot afford to give wrong signals, given the history of misunderstandings.”
At one level, Mr. Trump’s warm sentiments were surprising, given that during the campaign, he called for temporarily barring Muslims from entering the United States to avoid importing would-be terrorists.
His conversation with Mr. Sharif also came a day after an attack at Ohio State University in which a Somali-born student, Abdul Razak Ali Artan, rammed a car into a group of pedestrians and slashed several people with a knife before being shot and killed by the police. Law enforcement officials said Mr. Artan, whom the Islamic State has claimed as a “soldier,” had lived in Pakistan for seven years before coming to the United States in 2014.
Mr. Obama never visited Pakistan as president, even though he had a circle of Pakistani friends in college and spoke fondly of the country. The White House weighed a visit at various times but always decided against it, according to officials, because of security concerns or because it would be perceived as rewarding Pakistani leaders for what many American officials said was their lack of help in fighting terrorism.
“It sends a powerful message to the people of a country when the president of the United States goes to visit,” Mr. Earnest said. “That’s true whether it’s some of our closest allies, or that’s also true if it’s a country like Pakistan, with whom our relationship is somewhat more complicated.”
Mr. Trump’s call with President Nursultan A. Nazarbayev of Kazakhstan raised similar questions.
Mr. Nazarbayev has ruled his country with an iron hand since 1989, first as head of the Communist Party and later as president after Kazakhstan won its independence from the Soviet Union. In April 2015, he won a fifth term, winning 97.7 percent of the vote and raising suspicions of fraud. “I apologize if these numbers are unacceptable for the super-democratic countries, but there was nothing I could do,” he said after the results were announced.
The Kazakh government, in its account of Mr. Trump’s conversation, said he had lavished praise on the president for his leadership of the country over the last 25 years. “D. Trump stressed that under the leadership of Nursultan Nazarbayev, our country over the years of independence had achieved fantastic success that can be called a ‘miracle,’” it said.
The statement went on to say that Mr. Trump had shown solidarity with the Kazakh government over its decision to voluntarily surrender the nuclear arsenal it inherited from the Soviets. “There is no more important issue than the nuclear disarmament and nonproliferation, which must be addressed in a global context,” it quoted Mr. Trump as saying.
Mr. Trump’s statement said that Mr. Nazarbayev had congratulated him on his victory, and that Mr. Trump had reciprocated by congratulating him on the 25th anniversary of his country. Beyond that, it said only that the two leaders had “addressed the importance of strengthening regional partnerships.”
<<<
>> Donald Trump : Things you didn't know - Full New Documentary <<
Trump's decision on Sec of State will be interesting. So far it looks like either Romney, Ghouliani, or Petreaus (Neocon Dave).
Not sure what happened to Newt Gingrich, but he seems like a better choice than Romney, who isn't the brainiest guy in the world. With US-Russian tensions this high and US-Russian military forces eyeball to eyeball in Syria, Trump can't afford to get this decision wrong.
The current game of chicken over Syria has put us on the brink. Gingrich is at least smart enough to not bumble into WW III. In a complex high stakes chess match, I'd have to pick Gingrich over Romney.
>>> Trump and the Coming of Helicopter Money
By James Rickards
November 10, 2016
https://dailyreckoning.com/trump-coming-helicopter-money/
Trump and the Coming of Helicopter Money
One of the great mysteries of the past eight years is why there has not been more consumer price inflation despite the fact that the Federal Reserve has printed over $3 trillion in new money.
Many economists hypothesizes that such money printing must prove inflationary, and many consumers assumed the same. The answer is that money printing by itself is not inflationary — it has to be combined with velocity (that’s the turnover, or rapid use, of money) in order to produce inflation.
Most of the money printed by the Fed was simply deposited with the Fed by the big banks in the form of excess reserves. That money was never borrowed or spent. Therefore, it never had the kind of velocity needed to produce price increases.
Another answer is that inflation occurred not in consumer prices but in asset and commodity prices. Bubbles in stocks, real estate and some commodities over the past eight years are a kind of “inflation” all by themselves.
Yet we may have reached a turning point where consumer price inflation is kicking in.
This is dangerous because it feeds on itself. Once inflation starts, individuals expect more. They start to change their behavior by borrowing and accelerating purchases. As expectations switch from deflation to inflation, it is difficult to switch them back again.
We are not yet at the stage of 1970s-style runaway inflation, but some early warnings are in the air. This is a trend I’ll be watching carefully.
We may soon be entering a new period of fiscal domination by the Treasury. The Fed could subordinate its policy independence to fiscal stimulus coordinated by the White House and the Treasury.
Mainstream economists have traditionally been the greatest champions of independence for the Federal Reserve Board. The view was that if politicians were in charge, there would be continual pressure for lower interest rates and higher inflation.
It was deemed necessary to ensure Fed independence so that the governors (mostly Ph.D. economists themselves) could take hard decisions and raise rates if necessary. But now Harvard Professor Larry Summers, a former U.S. secretary of the Treasury, is calling for less independence for the Fed.
He would like the Fed to work more closely with the Congress and White House to implement “helicopter money.” Helicopter money results when governments run larger deficits and central banks print the money to cover the deficits.
Central banks have been printing money since 2008. The problem is banks won’t lend it and people won’t spend it. Helicopter money cuts out the middleman. Governments just borrow and spend the money directly without waiting for the banking system to do the job. Central banks pick up the tab.
This is all in contrast with the Fed’s stated policies of trying to raise interest rates by 3% over the next three years so they have some dry powder for the next recession. Summers is unlikely to be alone in his approach; he’s probably a stalking horse for others in the economics profession.
Look at what the elites themselves are telling us:
Adair Turner is a bona fide member of the global monetary elite. His title is Baron Turner of Ecchinswell, and he’s the former head of the U.K. Financial Services Authority. Today, he’s the head of a George Soros front organization called the Institute for New Economic Thinking.
Turner wrote an article on May 9, 2016, called “Helicopters on a Leash,” in which he discusses debt monetization (that’s the technical name for helicopter money). Here’s an excerpt:
The technical case for monetary finance is indisputable. It is the one policy that will always stimulate nominal demand, even when other policies — such as debt-financed fiscal deficits or negative interest rates — are ineffective… A small amount will produce a potentially useful stimulus to either output or the price level.
Even if the Summers plan is not adopted, its mere existence is designed to push the Fed toward a more accommodative policy.
The U.S. economy has grown about 2% per year since 2009. This rate is below the economy’s potential growth of 3%, and well below the pace of past recoveries.
Following the recessions of 1980 and 1981, the U.S. economy grew at about 5% for several years before settling back to trend. The U.S. economy had record peacetime expansions in the 1980s and 1990s. That kind of growth is like a distant memory now.
For everyday investors, these trends boil down to one thing — higher inflation, sooner rather than later. It’s time to diversity into hard assets, if you have not already, before the Summers plan becomes reality.
No one has to be a victim of the Summers plan. You just have to see it coming. You preserve wealth by getting out of the way of certain developments. You increase wealth by getting out in front of other developments.
As always, timing is critical. It’s important to stay focused and be nimble.
Many of the short-run trends are the exact opposite of the long-run forces. Stocks may perform well in the short run as central banks maintain their easy money stance. Once inflation takes off, that tends to be a disastrous environment for stocks because inflation hurts capital formation and new investment.
Cash is another good short-term asset because it fights deflation, reduces volatility, and gives you optionality to pivot into other asset classes when the timing of the elite plan becomes more clear. Yet cash will be a bad long-term choice because it suffers the most in inflation. In extreme cases, cash can become worthless.
Bonds are just a more volatile form of cash, with a higher yield. Again, bonds are a good short-term play (because of deflation fears) and a bad long-term bet (because inflation is just a matter of time).
Some of the best opportunities will be in private equity and technology startups. These have to be carefully selected because the failure rate in startups is high. But good ideas can prosper in any environment.
We’ve seen how Google, Amazon and Apple came through the tech crash of 2000 and the financial crisis of 2008, just fine. Finding these companies is easier said than done, but they’re out there.
Gold is the ultimate all-weather play. Gold does well in inflation and in deflation (because government itself will bid up the price).
The problem with gold is that it just may not be available when you want it the most. This could be due to simple supply and demand, or governments may try to regulate sales or buy the floating supply for their own reserve positions.
The time to get your physical gold is now.
Regards,
Jim Rickards
for The Daily Reckoning
<<<
>>> Comparing Trump to Reagan
By James Rickards
November 22, 2016
https://dailyreckoning.com/comparing-trump-reagan/
Comparing Trump to Reagan
The election of Donald Trump can be compared in some ways to the election of Ronald Reagan in 1980. There are similarities, but some important differences, which you’ll see in a moment.
First, the main similarity: Ronald Reagan was considered a buffoon, a dope, an actor unfit for the presidency. Many feared he’d also push the nuclear button and start World War III. So many of the things you’ve heard about Trump are exactly what they said about Reagan at the time.
But Reagan came in with a team of advisors and did a lot of things right. He had a lot of help from Paul Volcker, who headed the Fed at the time. That’s something important to bear in mind. It wasn’t just Reagan. It was Reagan and the Fed working together to turn the U.S. economy around. Reagan entered office when the economy was sunk in one of the worst recessions since World War II.
Reagan had his recession in 1981 going into 1982. I always thought it was genius of Ronald Reagan to his recession over early. Most presidents do not make it through their terms without a recession. If they succeed in delaying it initially, they usually end up having it late in their terms at the worst possible time. Once Reagan’s early recession was over, the economy grew for seven straight years.
For over three years, from 1983 to 1986, growth in the United States was 16%. That’s real growth, not nominal growth. There wasn’t any inflation to dilute that number. In contrast, average annual growth in the United States has been barely 2% since 2009. That’s almost eight years. Yet for three years in the early stage of the Reagan administration, growth averaged over 5%.
2% versus 5% might not sound dramatic. But over time it is a dramatic difference of orders of magnitude. An economy growing at 5%, or even 4%, if compounded, will be twice as rich in 20 years as the economy growing at 2%. It’s a major difference.
Now, let’s step back and talk a little bit about something you’re not going to hear anywhere else. They speak to some important differences between the economy of Ronald Reagan and the economy Donald Trump will inherit.
When Ronald Reagan was sworn in, interest rates were 20%. They were as high as they could possibly be. They had nowhere to go but down. They weren’t going to go to 30%. The country would have gone belly up and declared bankruptcy.
Now, as we prepare for 2017, Trump will be entering the White House under very different circumstances. Interest rates are close to zero. They have nowhere to go but up.
Reagan had a major tailwind in the form of potentially lower interest rates. Trump is going to have a major headwind in terms of potentially higher interest rates. The inflation picture is also quite different.
When Reagan entered office, inflation was running at 13%. By 1984, Volcker had reduced it to around 4%. That was a massive disinflation
Stocks and bonds both went up. Stocks were going up because of real growth. Bonds were going up because interest rates were coming down and inflation was coming down. Now, Trump could have the opposite situation. Trump could have a collapsing bond market and stocks could run out of steam.
The other major difference between then and now, and this is one that I haven’t heard anyone mention, is that when Reagan was sworn in, the U.S. debt-to-GDP ratio was 35%, close to the lowest it had been since the end of World War II. At the end of World War II, the U.S. debt-to-GDP ratio was 100%. By the ‘70s, it had come down to around 30%. It had gone up slightly to 34% when Reagan was sworn in.
Reagan therefore had enormous fiscal space. He had enormous headroom to increase the debt-to-GDP ratio without threatening the financial solvency of the United States, which he took advantage of. When Reagan left office, the debt-to-GDP ratio was 50%. So he added 15 percentage points to the debt-to-GDP ratio. If you take 15, divide it by 35, you can see that he increased the debt-to-GDP ratio by 40%.
Now, what did Reagan spend the money on? Winning the Cold War. Reagan basically outspent the Russians because they couldn’t match us. By the end of the decade, the Cold War was over. Reagan also instituted massive tax cuts. That was the other contributor to deficits. Paul Krugman and others to this day criticize Reagan for running up the debt.
Now, here’s the problem:
The debt-to-GDP ratio today is 100%, back to where we were at the end of World War II. When Obama entered office, the national debt was about 10 trillion. Today, it’s about 20 trillion, and growing. Obama piled 10 trillion of new debt on top of the old, so the debt-to-GDP ratio is back up to 100%.
What is Trump going to do? He wants to be a big spender. He wants tax cuts, more spending on defense, spending on the wall, infrastructure spending, airports, roads, bridges, tunnels, railroads, et cetera, and less regulation. He wants to be Ronald Reagan. But unfortunately for Trump, Obama has tied his hands.
Trump will not have the fiscal space Reagan had. The U.S. is getting uncomfortably close to where Italy, Spain, and Greece, and Japan and some of these other potentially bankrupt countries are. The point being that Trump faces enormous constraints that Ronald Reagan did not have.
Trump won’t have falling interest rates like Reagan had. He’s going to face increasing interest rates instead. Inflation won’t be falling dramatically. He’s facing the possibility of increasing inflation, which means higher food prices and higher prices at the pump. He doesn’t have a low debt-to-GDP ratio like the 34% Reagan inherited. He’s actually inheriting a high debt-to-GDP ratio of 100%.
Trump is going to try to run the Reagan playbook in a non-Reagan environment. That plan could immediately hit a wall. It could result in something like stagflation, where we get the inflation from spending and deficits, but you don’t get the growth. That’s because after eight years and $10 trillion, we’re facing the reality of diminishing marginal returns. That’s when each new dollar of stimulus fails to produce as much growth as the dollar before. Basically, the first dollar you spend in an expansion is a lot more powerful than the ten-trillionth dollar you spend.
The low-hanging fruit is gone. Now, it’s like a giraffe trying to climb a tree. By the way, I think tax cuts are a good thing. I’m not saying that Trump’s policies are bad. I think a lot of them are positive, but I don’t believe they’re going to work out the way his advisors expect. Someone may have to sit him down and say, “Mr. President, you may want to do all this, but honestly, we’re out of room. We’re out of headroom. We don’t have the ability to expand the debt.”
There is a good chance that cutting taxes right now will help the economy, but not enough to produce the growth required to make up the difference. That means larger deficits. Add all that new spending on top of it and the debt-to-GDP ratio is going to increase.
Where are we going to get the borrowing capacity unless the Fed accommodates it?
If the Fed accommodates it, it’ll produce inflation. If the Fed doesn’t accommodate it, we’re going to hit the wall and enter recession. That’s two possible outcomes, recession or inflation. Neither one is good. We can even get the worst of both worlds, and that’s the stagflation I mentioned. We’ll be writing and speaking a lot more about this.
The Reagan/Trump analogies are interesting. But there are major differences that people are not focusing on and a lot of reason to be concerned.
Right now, I would say that if things get really bad and we have a financial crisis, you’re going to want gold. If the economy grows, but we get inflation, you’re going to want gold.
All signs point to gold as a safe haven asset in this environment.
Regards,
Jim Rickards
for The Daily Reckoning
<<<
>>> Resolving Trump’s Contradictions
by James Rickards
November 26, 2016
https://dailyreckoning.com/resolving-trumps-contradictions/
Resolving Trump’s Contradictions
Markets are holding their breath waiting for clarity from the Trump economic team. Right now there is something for everyone.
The current stock market rally is clearly attributable to the Trump mix of lower taxes, less regulation and more government spending. Post-election bond markets have indicated inflation expectations. And the drawdown in gold is clearly attributable to the expectation of higher interest rates.
Higher rates from the Fed drive the dollar higher. A low dollar price for gold is just the inverse of the strong dollar; it comes as no surprise. That much is clear.
What is not clear is how the contradictions in the Trump camp will be resolved…
The Trump loyalists from the “Make America Great Again” camp are pushing for huge infrastructure spending. Steve Bannon, for example, has spending plans that point to much higher deficits. But some advisers, such as David Malpass, favor fiscal discipline. Other advisers, such as Larry Kudlow and Art Laffer, favor tax cuts. Still other advisors such as Judy Shelton want to take a look at a gold standard which implies higher gold prices.
Higher spending and tax cuts will lead to much higher deficits. Laffer employs his “Laffer curve” to say the tax cuts will be self-financing. Tax cuts may help growth, but there’s little evidence to show that they are self-financing.
The contradiction between the fiscal discipline of Malpass and the fiscal stimulus of Bannon are not the only contradictions. Kudlow and Mike Pence favor free trade, while Malpass and Bannon agree on the need to renegotiate trade deals. And so on.
These contradictions will take months to sort out.
The Trump team overall seems to favor a strong dollar and higher interest rates. But the strong dollar is deflationary and pushes the Fed away from its inflation target. Fed rate hikes will do the same thing.
On the other hand, if the Fed is slow to raise rates while spending takes off, inflation could surge out of control. The truth is that Trump economic policy has not been set, and both inflationary and deflationary outcomes are in play.
Sitting on the sidelines and watching is the Fed. If the Fed accommodates big spending and higher deficits, then inflation is on the way, like I said. That’s great for gold.
But if the Fed raises rates to lean against inflation, they may cause a recession. That’s bad for gold in the short run but sets up a global recession and major debt default by emerging markets. That will lead straight to a global liquidity panic, which will put gold on an upward path again as part of a flight to quality.
We’ll have to await further information, such as the names of Trump’s appointees to the Fed board of governors and the results of the Dec. 14 Fed meeting, before reaching more definitive conclusions about the shape of things to come.
My early estimate is that Yellen will lean against inflation with preemptive rate hikes starting in December and continuing in 2017. Yet, this rate hike path could throw the U.S. into a recession.
On balance, markets look stretched. Stocks ran too high, too fast. Gold, bonds and the euro are probably oversold.
Faced with this uncertainty, it’s a good time to increase your cash allocation until we can get better visibility on the Trump plan.
Right now, both cash and gold have a place in your portfolio as insurance against the uncertainty coming from the Trump camp. As this uncertainty gets resolved, I’ll be watching and updating my scenarios with greater visibility. Gold wins either way (inflation or deflation), but the ride is bumpier and more volatile on the deflation road.
In either case, now is the time to buy gold and gold miners.
Regards,
Jim Rickards
for The Daily Reckoning
<<<
>>> Could President Trump Use Reagan's Playbook?
By James Rickards
November 28, 2016
https://dailyreckoning.com/could-president-trump-use-reagans-playbook/
Could President Trump Use Reagan's Playbook?
Let’s apply the Ronald Reagan administration as a frame of reference to examine and compare president-elect Trump. Doing so we can see what expectations might be for the economy going forward.
Ronald Reagan came in, in 1980, and he got a lot of the Trump treatment seen today. He was considered a buffoon, a dope. What did he know? He was a Hollywood guy, how could he be President? Many said that he was unstable. That he was going to start pushing the nuclear button and start World War III. A lot of the things you’ve heard about Trump are exactly what they said about Reagan at the time.
He entered office with a team of advisors and did a lot of things right. He wasn’t alone. He had a lot of help from Paul Volcker, who was at the Fed at the time. It was Reagan and the Fed working together, in sync to turn the US economy around. As soon as Reagan came into office though, the US sunk in a really bad recession, one of the worst since World War II.
I’ve always thought it was part of the genius of Ronald Reagan that he got his recession over early. Most presidents do not make it through their terms in office without a recession. It may catch up to a President Trump, but you pull all the strings and try to avoid recession – or at least put it off as long as possible.
Some presidents have ended up having a recession late in their term and at the worst possible time. It’s exactly what happened to George Bush. We all know what happened in 2007-2008. President George W. Bush rode a six-year bubble and then it blew up literally in the last year of his administration. Clinton had a recession at the end of his term. George H.W. Bush, had a recession in 1990, at the end of his term that cost him reelection in 1992.
Reagan got his recession over at the beginning. He had a recession in 1981 going into 1982. Once that was done, the economy grew for seven straight years. It was one of the longest peacetime expansions in American history.
President Reagan had a great team. For over three years, from 1983 to 1986, growth in the United States was 16%. That was real growth. That’s not nominal growth. There is no inflation in that number, 16% over 5% a year. Now, keep in mind, since 2009 and Obama being sworn in, that for the last almost eight years, average annual growth in the United States has been barely 2%.
Taking this back to today, the Republicans will have the White House. They will also have the Senate and the House of Representatives.
The last time that was true was 1928. A lot of people might say, “Well, didn’t Reagan have that?” No, Reagan took the Senate and had the White House and the Senate in 1980, but he did not have the House of Representatives. The Republicans did not get the House of Representatives until 1994.
Building from that understanding, it is important to highlight what’s different.
Currently, the stock market is up and reaching all-time highs. Why is the stock market going up? Trump is a big spender. He said so.
Pharmaceuticals are going up because Trump has signaled he wants to repeal and replace Obamacare while taking some of the fetters off the pharmaceutical and the medical industry.
Banking stocks are going up because the incoming administration has talked about repealing Dodd-Frank.
Construction stocks are going up at companies like Caterpillar and John Deere because they’re anticipating the need for a lot of construction equipment to build all these roads.
Transportation stocks are going up because an expectation for improved railroads, ports, airports. Even defense stocks are going up with the anticipation to build four class-A aircraft carriers, more J-35 fighter’s, etc.
With all of that, why is the bond market going down and why is gold going down? It means trillions of dollars in spending and tax cuts. It means a bigger deficit. It means that the deficit will be funded, likely, by issuing treasury bonds.
A lot of people would project inflation coming out of this. The reason for that is pretty simple. What causes inflation? Well, a lot of people think money printing causes inflation. That’s actually not true or, at least it’s not completely true. Money printing is only one half of what you need to get inflation. The Fed has printed $3.2 trillion of new money in the past seven years and other central banks in the world have printed even more.
The People’s Bank of China has printed even more than that. When you throw in the European Central Bank, the Bank of England, the Bank of Japan, and look around the world, you’re looking at $15 trillion of new money printing in the last seven years. Where is the inflation? Well, the answer is money printing alone doesn’t produce inflation if people don’t spend it, they don’t borrow it, they don’t invest it and they don’t put it to work. This is called the velocity of money or the turnover of money.
I’ve used the example. If I go out tonight and have dinner at a restaurant, and tip the waiter and the waiter takes my tip and takes a taxicab home and tips the taxi driver, and the taxi driver takes the tip and puts gas in her car, that money has velocity of three. My $1 produced a restaurant tip, a taxi tip, and a gallon of gas, a velocity of three. If I stay home and watch the television because I don’t feel like going out and leave my money in the bank, it has velocity of zero.
Well, $4 trillion times zero is zero, meaning if you don’t have velocity, you don’t have an economy. Your economy goes to zero. Velocity has been sinking like a stone, not for eight years, since the crisis, but for almost 20 years since 1998. That’s nearly 18 years that velocity has been going down. All this money printing has not produced inflation because we don’t have the turnover.
When you average it all out, there hasn’t be too much inflation even with all this money printing. John Maynard Keynes had a name for this, a name for what I just described where either “I go out, I’m a big spender” or “I stay home and keep my money.” He called it “animal spirits.” Animal spirits is enthusiasm. It’s optimism versus pessimism. It’s a sentiment where we feel confident enough to borrow, buy, invest or use credit and spend money.
If we do, maybe someone else gets a job because the money we spend goes to some other business and that guy hires somebody and then that person feels better and they spend money. While this is a bit of an amorphous concept, it’s not something that can be put into equations. It should be understood as a branch of behavioral psychology, or animal spirits. We haven’t had them for eight years, and truly it has been longer than that.
Is Trump enough to get the animal spirits moving again? He might be. I think we have to think hard about that. That’s one of the biggest questions we’ve got. I don’t want to jump to that conclusion, but he might be. Ronald Reagan certainly did. I’ve been drawing this analogy between Trump and Reagan. Ronald Reagan absolutely got the animal spirits moving again.
Now to examine the important differences that exist between a president Reagan and president Trump.
When Ronald Reagan was sworn in, interest rates were 20%. That was the overnight rate. That’s not the long-term rate. The Fed funds rate was 20%. Interest rates had nowhere to go but down. They weren’t going to go to 30. The country would have just rolled up in a ball and declared bankruptcy. They were as high as they could possibly be. They had nowhere to go but down. Trump is coming in and interest rates are close to zero. They have nowhere to go but up.
Reagan had a major tailwind in the form of potentially lower interest rates. Trump is going to have a major headwind in terms of higher interest rates, the same thing with inflation. When Reagan came in, inflation was at 13%. By 1984, Volcker had got it down to around 4%. That was a massive disinflation.
In the 1980s, remember the US had a bull stock market and a bull bear market. Stocks and bonds were both going up. Stocks were going up because of real growth and bonds were going up because interest rates were coming down and inflation was coming down. Trump could have the opposite. Trump could have a collapsing bond market and see stocks run out of steam.
The other big difference is that when Reagan was sworn in the US debt-to-GDP ratio was 35%. This was close to the lowest it had been since the end of World War II. At the end of World War II, the US debt-to-GDP ratio was 100%. By the ‘70s, it had come down to around 30%. It had went up a bit at the beginning of Reagan’s administration, but was around 34% when Reagan was sworn in.
Reagan had enormous fiscal space. He had enormous headroom to increase the debt-to-GDP ratio without threatening the financial solvency of the United States. When Reagan left office, the debt-to-GDP ratio was 50%. He added 15 percentage points to the debt-to-GDP ratio. He took it from 35 to 50.
The problem that is exists now is the debt-to-GDP ratio today is 100%. We’re back to where we levels seen at the end of World War II. Today, it’s about $20 trillion. What is Trump going to do? Trump wants to be a big spender.
He does not have the fiscal space. The US is getting uncomfortably close to where Italy, Spain, and Greece, and Japan and some of these other potentially bankrupt countries are.
He’s going to have interest rates going up. He doesn’t have inflation coming down. He’s going to have inflation going up. He doesn’t have a low debt-to-GDP ratio. He has a high debt-to-GDP ratio.
If the Fed accommodates it, you’re going to get inflation. If they don’t accommodate it, we’re going to hit the wall and go into a recession.
We now have two outcomes here, recession or inflation. Neither one of them are good.
It may have different origins, but the instability of the system and the potential for the collapse has not changed one bit because this is the snowflake avalanche. The snow on the mountainside is still there.
Maybe with Trump, it’s not snowing as hard, but the unstable mountainside is still there and it still only takes one snowflake.
Regards,
Jim Rickards
for The Daily Reckoning
<<<
Rickards - >>> The Trump Election: Myths vs Realities
By James Rickards
November 30, 2016
https://dailyreckoning.com/trump-election-myths-realities/
The Trump Election: Myths vs Realities
Election Myths
Before a clear-eyed analysis of Trump can be pursued, it’s necessary to sweep away a lot of the election nonsense that was portrayed.
Campaigning is tough and candidates of both parties always stretch the truth and throw mud at their opposition. It’s not news that most journalists have a strong liberal bias. That has been true for decades.
But, there’s a difference between bias and venom. This time really was different. In this election, journalists abandoned any pretense of ethical behavior and went all-in for Clinton.
The Washington Post told its younger reporters to work day and night to destroy Trump by any means possible. The New York Times went further. They asked their reporters to imagine they lived in Germany in December 1932 one month before elections that handed the government to the National Socialist Workers Party, the Nazis, and made Adolph Hitler Chancellor of Germany.
What would they tell their children and grandchildren they as reporters did to stop the rise of Hitler? In the editor’s eyes, Trump was a new Hitler, and reporters were duty-bound to stop him by any means fair or foul.
Harvard economist Larry Summers openly compared Trump to Italian fascist dictator Benito Mussolini. The television networks, NBC, ABC, CBS and CNN were no better. Leaked emails from Clinton campaign chairman John Podesta showed reporters from CNBC and Politico submitting their articles to Podesta in advance for approval in order not to offend the Clintons.
You get the point. This was not biased reporting, this was a concerted effort to destroy one man – Donald Trump. Nevertheless, Trump won the election.
Why dwell on the past? Why not just move on? The reason is that the after-effects of this media mission to destroy Trump have lingered in the minds of many Americans and people around the world.
For millions of engaged voters, what happened in the election is not just the normal disappointment that goes with any electoral defeat. There’s a sense of cognitive dissonance, and of complete denial and incredulity.
Simply put, Democrats, some Republicans, the media, global elites, and many everyday citizens around the world still can’t process a Trump presidency.
Trump is impulsive and his behavior at times is vulgar. He’s a smart businessman, but not particularly well-versed in the long-standing policy debates that obsess the Washington elites. He’s a successful CEO, not an economic guru.
But, he’s not racist, misogynist, or anti-Semitic. That’s all nonsense ginned up as part of the media operation to take Trump down. Those who can’t get past the crude labels pinned on Trump will not be able to understand the real Trump at work.
When Trump calls for 45% tariffs on Chinese imported goods, the geeks in Washington get out their spreadsheets and economic models. They begin calculating the drag on growth and impact on jobs from a tariff increase on a static quantity of imports. What they don’t understand is that for Trump, the 45% tariff is just the starting place for a negotiation.
It’s an invitation to the Chinese to make some concession in areas such as direct foreign investment by U.S. firms, and theft of intellectual property. Once some concessions are forthcoming, Trump can lower the proposed tariff from 45% to 25% and then ask for more concessions. It’s all part of the “art of the deal.”
Ironically, the Chinese seem to understand this better than the American media. China recently said that if Trump imposes tariffs, they will switch their aircraft orders from Boeing to Europe’s Airbus, and ban Apple’s iPhones from China. That’s the Chinese art of the deal.
Now that the two sides have announced their opening bids, let the negotiations begin! That’s how every deal works in the real world. Only in Washington and the media is this negotiation posturing not understood.
Similar misconceptions apply to a range of Trump policies, including tax cuts and spending plans. Trump has a grandiose vision, but he’s also showing a deft hand when it comes to reaching out to former critics such as Paul Ryan and Mitt Romney. This is not the action of a political novice, but a seasoned operator who knows that cooperation beats confrontation every time.
Opponents of Trump made a crucial mistake. They believed their own propaganda. When you bend rules of ethics and objective reporting to achieve a certain result, that is propaganda pure and simple.
But, the great propagandists such as real fascists, Communists, Peronists in Argentina, and African dictators are always careful not to believe what they tell their own people. U.S. media fell into the trap of believing the distorted image of Trump that they created. This left them totally unprepared for the election result and leaves them unable to interpret the situation today.
This is important to bear in mind when reading ongoing coverage about Trump’s economic policies. You will be getting distorted analysis on everything from so-called “free trade” to tax policy, fiscal policy, regulatory policy and much more.
Election Realities
Once you have put aside the myths about Trump, one needs to internalize the realities. This was not a typical victory; it was a complete rout of the Democrats. The magnitude of the Republican victory is still sinking in, but it’s so significant that it’s fair to say change has come to Washington at last.
This is a boon if you like Trump’s policies, but it’s also an analytical challenge. Many of the old political models of stalemate and confrontation no longer apply.
Republicans did not just win the White House, they kept control of the Senate and House of Representatives also. Republicans did have control of the White House, and both houses of Congress from 2002–2006, but those years were consumed by the response to 9/11, the Global War on Terror, and the War in Iraq.
War spending left little scope for infrastructure spending of the kind Trump proposes. Prior to 2002, the last time Republicans held the White House and both houses of Congress at the same time was 1928.
There are significant differences between Republican control in 2017 and Republican control in 2002. The Senate operates under a cloture rule that requires 60 votes to end debate on any measure.
Protracted debate, the so-called “filibuster,” is a Senate tradition not in the Constitution, but typically honored under Senate rules. The small majorities held by Republicans in 2002-2006 were generally not enough to overcome the 60-vote rule. Minority leaders Tom Daschle and Harry Reid used this to shut down Republican policy initiatives.
But during the period of Democratic control of the Senate from 2006 to 2014, the leadership made important rule changes. Obamacare was passed in its final form as a “budget reconciliation” that required only 51 votes, not 60. Given that structure, Obamacare could be effectively repealed today by changing its budget-related provisions with the same 51-vote process.
More importantly, Harry Reid changed the filibuster cloture rule on judicial appointments (other than the Supreme Court) and executive branch nominees. By applying the new rule, Republicans can reshape the federal courts, especially the important Circuit Court for Washington, DC.
They can also staff the senior ranks of the executive branch, including cabinet officials, with no Democratic resistance. In effect, Republicans can add prospective control of the judiciary to their control of the Congress and White House in their trifecta of power.
As icing on the cake, Republicans control 32 of 50 state legislatures and 33 of 50 state governorships. Control at the state level is important when it comes to directing infrastructure spending, creating enterprise zones, and working with the federal government to implement Trump’s policies.
In short, Republican power over the U.S. policy process is stronger now than it has been at any time since the Reconstruction period (1866–1876) following the Civil War.
Neither the Republicans nor the Democrats have yet fully grasped the magnitude of this historical change. What it means in practice is that if Republicans can agree on a policy mix, they are in the strongest position to actually implement it in 150 years.
The Democrats were in a similarly powerful position after the Lyndon Johnson landslide election in 1964. They used that power to pass Medicare and other Great Society programs. But, hubris also led to the tragedy of the War in Vietnam.
Democratic power was in retreat just four years later with the election of Richard Nixon in 1968.
It remains to be seen if Trump will consolidate one-party power, as was done by Lincoln and FDR, or will waste it like LBJ.
Regards,
Jim Rickards
for The Daily Reckoning
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