Flake’s Revenge – Senate Cancels Votes on 21 Federal Judges After Jeff Flake Blocks Committee…


Outgoing U.S. Senator Jeff Flake from Arizona has given the American electorate the big middle finger for Christmas.  Flake has followed-through on his vow to block more than 20 judicial nominees; forcing the Senate Judiciary Committee to abandon six federal circuit court nominees, and 15 federal district court nominees.

WASHINGTON – Sen. Chuck Grassley (R-Iowa) announced Wednesday that he is canceling votes on nearly two dozen of President Trump’s judicial nominees that were expected to come up in the Judiciary Committee this week.

The cancellation of the committee’s Thursday business meeting comes as Senate Republicans are in a standoff with outgoing Sen. Jeff Flake (R-Ariz.), who has vowed to oppose all court picks until he gets a vote on legislation protecting special counsel Robert Mueller.

The notification from the Judiciary Committee didn’t specify when, or if, the committee votes on the nominations would be rescheduled. Six circuit court nominees had been expected to get a vote, as well as 15 district court nominees.  (read more)

Melania Trump Liberty University Convocation and Town Hall Discussion on Opioid Crisis…


First Lady Melania Trump delivers a speech at the Liberty University convocation, and participates in a town hall discussion of America’s opioid crisis.

President Trump and First-Lady Melania National Christmas Tree Lighting…


President Trump and First Lady Melania participate in national tree lighting ceremony at The Ellipse.

Oh Dear – Stormy Daniels Says CPL Avenatti Went Rogue…


Funny stuff happens when a judge tells a plaintiff she has to pay $341,500 for the legal expenses of a lawsuit she lost.  All of a sudden Stormy Daniels is saying her CPL, Michael Avenatti, was acting against her wishes:

[Stormy Daniels] “For months I’ve asked Michael Avenatti to give me accounting information about the fund my supporters so generously donated to for my safety and legal defense. He has repeatedly ignored those requests. Days ago I demanded again, repeatedly, that he tell me how the money was being spent and how much was left. Instead of answering me, without my permission or even my knowledge Michael launched another crowdfunding campaign to raise money on my behalf. I learned about it on Twitter.”  (keep reading)

USMCA Consequences – BMW Chief Says Considering Additional Auto Plant Operations in U.S…


The issue is basic to the construct of the USMCA (NAFTA replacement).

BMW made a multi-billion-dollar investment in Mexico in anticipation of exploiting the NAFTA loophole.  President Trump has closed the loophole.  The new USMCA agreement requires 75% of automobile parts made in North America; and 45% must come from plants with minimum labor costs ($16/hr), or face tariffs upon export to the U.S.

As a result BMW is now considering opening those higher-wage component supply operations in the U.S.

LOS ANGELES (Reuters) – BMW (BMWG.DE) is considering a second U.S. manufacturing plant that could produce engines and transmissions, Chief Executive Harald Krueger said on Tuesday, shortly after a report that U.S. President Donald Trump would impose tariffs on imported cars from next week

[…] BMW is considering changes to U.S. operations as sales in the region grow, Krueger said. BMW has a U.S. vehicle assembly plant, in South Carolina, is planning to open a Mexico factory next year, and is considering changes to its current scheme of importing engines and transmissions.

“We’re at the range where you could think about a second location” in the United States, he said, adding that such a factory would provide a natural currency hedge. (more)

 

Oddly enough we predicted this likely move in August: […]  At the 30,000 ft level, the USMCA deal positions Mexico to retain their current multinational investments; and through a series of sector-by-sector standards on origination the deal simultaneously closes the fatal NAFTA loophole.  The agreement makes an economic manufacturing partnership between the U.S. and Mexico; and for assembly products third parties will have to produce parts and origination material within the U.S. and Mexico.

U.S.T.R. Lighthizer put some details forward:

♦The NAFTA Loophole closure is explained in Summary Form HERE; with emphasis on the Auto-Sector.  The key is a 75% part origination level for auto-assembly; and a 40-45% level for parts with a minimum $16/hr wage rate.  The source-origination rate (75%) is even higher than all previously forecast negotiation results.

Example of downstream consequences/benefits:  German auto-maker BMW recently built a $2 billion assembly plant in Mexico (almost complete).  Most of their core parts were coming from the EU (steel/aluminum casting components) and/or Asia (electronics).  Now the assembly plant will have to source 75% of the auto-parts from the U.S. and Mexico, with 45% of those parts from facilities paying $16/hr.  Result: BMW will need to modify their supply chain and build auto parts in the U.S. and Mexico.

(USMCA LINK to Article 32 pdf)

Prior to the USMCA both Canada and Mexico structured key parts of their independent trade agreements to take advantage of their unique access to the U.S. market.  Mexico and Canada generate billions in economic activity through exploiting the NAFTA loophole.  China, Asia (writ large), and the EU enter into trade agreements with Mexico and Canada as back-doors into the U.S. market.  So long as corporations can avoid U.S. tariffs by going through Canada and Mexico they would continue to exploit this approach.

The NAFTA loophole was/is a zero-sum issue: Either Can/Mex agree to give veto authority to the U.S. –OR– President Trump had no option to exit NAFTA completely. Well, Canada and Mexico agreed to the former, so there was no need for the latter.

 

Secretary of State Mike Pompeo Briefs Media Following Senate Briefing…


Secretary of State Mike Pompeo delivers remarks to the media following a briefing of senators on Capitol Hill.  The media was primarily focused on the issues surrounding the murder of Kashoggi; and the opportunity to create a wedge issue for the Trump administration.

Many Decepticon senators, benefactors from Qatari (Muslim Brotherhood) financing against the policy of Saudi Arabia, are aligned with left-wing opposition to the President on this issue. Instability in the middle-east is a very lucrative business model for personal financial gain.

Italy’s Certified Email System has been Hacked


There was an interesting major hacking event in Italy which gained access to thousands of Italian certified email accounts, including those of magistrates and security officials. These certified emails guarantee the validity of a sender’s identity, as well as the date and time of sending and receiving the email, giving them a clear legal status. This is a major hack and very important for it undermines the legal status of government emails. The repercussions can be extremely significant. This calls into question ALL legal emails from the government regarding taxes.

James Comey Files Motion to Avoid Congressional Testimony….


Former FBI Director James Comey filed a motion today to avoid a congressional subpoena requiring testimony on December 5th to a joint House committee. James Comey is attempting to limit his legal risk exposure by controlling the venue for testimony.

(Tweet LinkDocument Link)

In an open or public hearing classified information cannot be discussed. The primary issues surrounding his involvement in the 2015, 2016, 2017 intelligence operation against President Trump known as “spygate” surround classified information. Additionally, the structure of a 40 member open hearing limits the usefulness of that venue.

The ever conniving Comey understands how to manipulate the structure to his benefit and is attempting to avoid a closed and more purposeful hearing.  (full pdf below)  If Comey can drag things out to the next, Dem-controlled, congressional session, he’s home free.

https://www.scribd.com/embeds/394493585/content?start_page=1&view_mode=&access_key=key-XcDwHYRuO5Nt4eDvekpl

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Why Has Farmland Exploded in Price? The Accidental Trend Correlation


 

Most people have little idea WHY big money was targeting buying farmland in Canada, USA, and Australia. It was more than just Chinese investment. With interest rates down to negative, capital has been looking for returns. They were buying farmland and then renting it out generally for 5%. This created what many call the farmland bubble which has now begun to burst in some Corn Belt states, such as Iowa, as interest rates begin to rise. In 2015, the average increase of 2.4% percent on the low end and up to 8% in some states where the crop yields were best. This has not been a small investor or spec market. This was driven by the big boys seeking yield thanks to particularly the European Central Bank (ECB).

 

The nominal high came in 1982 and the commodity boom peaked in 1980 and interest rates peaked in 1981. The rising dollar caused the correction in nominal terms declining into its low in 1987. The market began to recover while the days of inflation and goldbugs faded forging the final low in gold during 1999. As is often the case, people just never look at assets in terms of international value. The surge in prices of latter that domestic analysts have called a “bubble” truly reveal more of a Phase Transition type rally more than doubling in price when plotted in Euros. The key to any market lies hidden within the depths of international capital flows which are driven foremost by currency values.

The lack of individual investors infiltrating this market leaving the big agricultural bets being placed not on expectations of global food demand will increase over time, but looking simply for yield, has led most analysis astray. Institutions, like the pension fund TIAA-CREF, have been the big buyers throughout 2017. They have been looking for bargains as farm real estate values have started to decline. Small farmers are finding it difficult to borrow from the banks for a crop season which can involve loans into several millions of dollars. If crops are wiped out, then they have a real problem.

There have been stocks issued seeking to capitalize on the boom. Farmland Partners (FPI, NYSE) has been down about 20% since it was floated in 2014. It is a REIT which is a company that owns, operates or finances income-producing real estate. REITs were modeled after mutual funds to gather investors to collectively own valuable real estate and provide the opportunity to access dividend-based income and total returns. On its website, it states: “Farmland Partners Inc. is an internally managed, publicly traded (NYSE: FPI) real estate company that owns and seeks to acquire high-quality farmland throughout North America addressing the global demand for food, feed, fiber and fuel.” However, the play has NOT been the boom in commodities, but the yield from renting out the land.

Investors should be very careful with REITs because they tend to be illiquid and volatile.

 

 

When we look at the Array, we see turning points lining up for 2020/2021 and 2024 followed by 2026 and then 2028. The commodity cycle appears to be pointing to 2024. That is when we should see farmland values peak in real terms but keep in mind that it will all depend upon the particular region. The weather is going to kick in and that will reduce crop yields. Keep in mind that most of these REITs have entered this sector of the market for the wrong reason. It was not truly a commodity boom expectation as it was simply to get a 5% yield when interest rates were below that level. As interest rates rise above that 5% threshold, we will begin to see the big players bailout and begin to dump farmland at losses. Anyone looking to borrow against their land should use FIXED RATES only. If you decide to sell your land to the big boys while rates are still below 5%, the include a right of first refusal to buy it back at a reduced price when they decide to cut and run – which they will inevitably always do at the precise wrong time.

Global Cooling – not Global Warming, that we should Fear the Most.


It is incredibly important to understand that as the weather turns bitterly cold in the north, people will begin to migrate south. This not merely cause the Greeks to become the Sea Peoples, but during the Year without a Summer in 1816 even in the States when six inches of snow fell in June and every month of the year had a hard frost, people began to migrate. The temperatures had dropped to as low as 40 degrees in July and August in New York City during 1816. People also called it ‘Eighteen Hundred and Froze to Death’ and the ‘Poverty Year.’ This is what I keep pointing out that cold is what kills society and creates poverty – not warming.

The Year without a Summer sent people fleeing from New England states in search of warmer weather and fertile soils both south and west. It was the weather that began to cause migration in the United States outside of the 13 original states. Thousands of New England families gave up their farms, packed their belongings into wagons and joined the throngs traipsing over rivers and mountains to Pennsylvania and the Ohio River Valley, which includes Ohio, West Virginia, Indiana, Illinois, and Kentucky.

Indeed, between 1810 and 1820, Maine lost as many as 15,000 people. Sixty Vermont towns lost population during that decade as well. The population of 60 more Vermont towns stayed the same while the U.S. population grew 32%. When we examine Massachusetts, we can see that this state gained only 50,000 people from 1810-20, while Ohio gained five times as many. The Massachusetts Legislature tried to hold on to its citizens by passing a homestead act that gave settlers 100 acres of land for $5.

Even during the American Revolution, when John Adams set out to travel to Philadelphia, it was bitterly cold and there was a foot or more of snow covered the landscape which had blanketed Massachusetts from one end of the province to the other. Beneath the snow, after weeks of severe cold, the ground was frozen solid to a depth of two feet. Packed ice in the road made the journey very hazardous. In a letter to his wife, John Adams wrote:

“Indeed I feel not a little out of Humour, from Indisposition of Body. You know, I cannot pass a Spring, or fall, without an ill Turn — and I have had one these four or five Weeks — a Cold, as usual. Warm Weather, and a little Exercise, with a little Medicine, I suppose will cure me as usual. … Posterity! You will never know, how much it cost the present Generation, to preserve your Freedom! I hope you will make a good Use of it. If you do not, I shall repent in Heaven, that I ever took half the Pains to preserve it.”

On September 8th, 1816, Jefferson described the weather during the Year without a Summer in a letter to Albert Gallitan:

We have had the most extraordinary year of drought and cold ever known in the history of America. In June, instead of 3¾ inches, our average of rain for that month, we had only 1/3 of an inch; in August, instead of 9 1/6 inches our average, we had only 8/10 of an inch; and it still continues. The summer too has been as cold as a moderate winter. In every state North of this there has been frost in every month of the year; in this state we had none in June and July but those of August killed much corn over the mountains. The crop of corn through the Atlantic states will probably be less than 1/3 of an ordinary one, that of tobacco still less, and of mean quality.

It is Global Cooling – not Global Warming, that we should fear the most. While 1816 was the year we had a major volanic eruption, it also came during the Little Ice Age with Solar Minimum