Just what we need another radical.
Gatestone Institute @GatestoneInst
Why is the media establishment whitewashing Keith Ellison’s past? Maybe b/c it will upset PC sensibilities. http://buff.ly/2g5ktQ6
kommonsentsjane
Tag Archives: multicultural
LIMBAUGH: Much, Much More Going On Behind Trump’s Boeing Tweet
Rush always know the back story!
Burka must be banned in Germany ‘wherever legally possible’ – Merkel
Merkel to be making these statements now after what you have done to Germany and the EU means you care only about your personal power you did give a dam about the people!
Zumwalt: Obama Used ‘Fake News’ to Sell the Iran Nuclear Deal
Obama is the biggest lair to ever occupy the white house, no one has ever come close to the tall tales he tells.
Will Rand Paul Fight Fake News With a Filibuster?
No evidence for this theory has very been provided, so it seems to me this is coming from the US government as they do not like a Free Press!
Dallas Pension Showdown: Mayor Seeks To “Target Those Who Got Rich From System”
by Tyler Durden
Submitted by Michael Shedlock via MishTalk.com,
The Dallas Police and Fire Pension plan is severely underfunded. Not even a $1.1 billion taxpayer bailout the plan officials request will make the plan whole.
Discussion of a possible freeze in lump sum payments led to a run on withdrawals. The board still has not suspended lump sum payouts.
On Saturday, Dallas Mayor Mike Rawlings proposed targeting those who got rich from the system. This is sure to accelerate the run on assets via lump sum withdrawals.
As background to this story, please consider my October 16 article: Dallas Police Retiring in Droves, Taking Lump Sum Pensions, Fearing the Money Isn’t There (And It Isn’t).
Today, DallasNews reports City’s plan to save Dallas Police and Fire Pension Fund will target those who got rich from the system.
A City Council briefing posted online late Friday night provided the first glimpse into the city’s plan to save the Dallas Police and Fire Pension System from insolvency within the next decade or so. Rawlings and the City Council will discuss the plan Wednesday.
While the presentation is short on details, Rawlings said he can be clear about a few aspects. The city won’t pay the $1.1 billion bailout that pension officials want. Taxpayers will chip in, but he doesn’t want to issue debt to pay for it. Base benefits will be protected. And the city’s general philosophy is that those who profited from the overly generous benefits will have to take part in the banquet of consequences.
Mish Comment: The stance that Dallas will not pony up $1.1 billion is a good one but does not go far enough. Taxpayers should not pay an extra dime.
Pension Board Chairman Sam Friar said he was happy to work with the city but called the proposal a “non-starter.” And although he and Rawlings both say they want to work together, the city’s stance will almost certainly lead to a showdown at the state Legislature next year. Pension officials hope active police and firefighters will vote to support a package of benefit cuts that they believe will pass legal muster.
Friar believes it’s illegal to penalize members for benefits they’ve already received and accrued.
“This is the one issue that we’re just not going there,” Friar said. “We will not do it. The pension board — we will just not go there. … You cannot put toothpaste back into the tube.”
Mish Comment: You either put toothpaste back into the tube, or those standing in line to brush their teeth will discover there is no toothpaste. At the very least, stop squeezing the tube via lump sum payments.
Ultimately, the Legislature is the biggest unknown. The pension system is governed by state law, not city ordinance. The City Council has four of 12 seats on the board but otherwise has no real power over the fund even though taxpayers have been paying more than $110 million into the pension system each year.
Mish Comment: City taxpayers have paid enough, too much actually. Benefit cuts drastically needed.
City officials want the pension system to allow inflation to catch up to the unusually high 4 percent automatic annual cost-of-living increases that the system has awarded since 1989. That means many retirees wouldn’t see another cost-of-living increase for years.
The Deferred Retirement Option Plan, known as DROP, is the city’s biggest target. DROP gave officers and firefighters the right to essentially retire in the eyes of the system while they continued working. Meanwhile, their pension benefit checks were sent to a separate account, which guaranteed them at least 8 percent annual interest for years.
DROP also had few limits on withdrawals. Retirees were also allowed to remain in DROP and continue to accrue interest.
The result was that hundreds of police officers and firefighters became millionaires while insulated from the whims and risks of the markets. Currently, 517 DROP accounts total in excess of $1 million, according to the city’s presentation.
The pension plan guaranteed 8% returns plus a 4% annual inflation benefit. It’s no wonder the system is broke.
The lack of withdrawal restrictions led to a run on the bank once retirees caught wind of the pension system’s proposed benefit cuts, which include new limits on DROP. Since Aug. 11, the fund paid out nearly $500 million in lump sums.
A liquidity crisis remains a risk. If money continues to flow out at that pace, the pension system will have to sell its assets to pay out the withdrawals. That will mean the fund goes insolvent even sooner.
Mish Comment: This is not a liquidity crisis. This is a solvency crisis that one could have easily foreseen more than a decade ago. Some people did see it of course, me included. But nothing ever happens until a crisis hits. Guess what? The crisis hit.
The city’s plan would essentially negate those guaranteed-interest gains by stopping or reducing payments on future monthly benefit checks for DROP recipients for a while.
Rawlings said he knows the plan will face political and legal hurdles. Some officers and firefighters sued the pension system after members voted in 2014 to gradually lower DROP’s guaranteed interest rate.
Mish Comment: The idea that reducing DROP payments or lowering interest for “a while” will fix anything is pie-in-the-sky hope.
Bankruptcy the Only Solution
Unions would be wise to come up with a plan that preserves the most benefits for the most people. But they won’t.
A fair restructuring would cut the most at the top. Million dollar payouts are beyond affordable.
The city of Central Falls, Rhode Island shows what can happen if things end up inside bankruptcy court: “The city’s 133 retirees had their pensions cut by up to 55 percent, with pensioners now getting an average of $16,626 a year. The state allocated $2.6 million to soften the blow for the next five years.”
Having a pension cut from $200,000 to $100,000 is quite different than a cut from $25,000 to $12,500.
However, steep across-the-board cuts are where things are headed because unions never negotiate cuts.
Related Articles
- November 22, 2016: Dallas on Verge of Bankruptcy Due to Pensions; Just a Matter of Time (For Dallas, Houston, LA, Oakland, Chicago, etc)
- May 25, 2016: Detroit, Fresh Out of Bankruptcy, Discovers $195M Pension Shortfall
- May 20, 2016: Rejected: Central States Fund Proposes 60% Pension Cuts, Treasury Dept Says “Not Enough”; 407,000 Affected
- May 19, 2016: Chicago Pension Liabilities Jump 168%, Understated by $11.5 Billion
- January 22, 2016: Former Hasbro CEO Says “Providence Should Consider Bankruptcy”; An Option Chicago Needs
Dallas is headed for bankruptcy court. The sooner it gets there the better off the city will be.
Frontrunning: December 6
by Tyler Durden
- Trump heads back out on road for ‘thank you’ tour (AP)
- For Europe’s Unity, 2017 Will Be a Year of Reckoning (WSJ)
- Oil dips as OPEC, Russian output rises ahead of production cut (Reuters)
- The Pessimist’s Guide to 2017 (BBG)
- Donald Trump’s Message Sparks Anger in China (WSJ)
- Brazil’s Reform Plan in Disarray After Senate Chief Removed (BBG)
- China urges U.S. to block transit by Taiwan president (Reuters)
- Wooed by Trump, Taiwan Trembles (WSJ)
- SoftBank’s Son Said to Plan Meeting With Trump in New York (BBG)
- Syrian government, ally Russia warn rebels in city of Aleppo (AP)
- Blackstone Going Public on $10 Billion Foreclosures Bet (WSJ)
- A Cheat Sheet on the Deglobalization of the Financial World (BBG)
- One Historic Lens Says Trump Stock Market Lovefest Just Starting (BBG)
- U.S. ‘Disappointed’ by Japan’s Plan to Cut Drug Costs (WSJ)
- Family’s $29 Billion Fortune Claim Denied Amid India’s Tax Hunt (BBG)
- Orban allies tighten media grip ahead of Hungary election (Reuters)
- U.S. seeks to reassure Beijing after Trump call with Taiwan leader (Reuters)
- Theranos Foresaw Huge Growth in Revenue and Profits (WSJ)
- Rouhani says Iran will not let Trump rip up nuclear deal (Reuters)
- Danish police arrest suspect after policeman shot in head (Reuters)
Overnight Media Digest
WSJ
– The verbal confrontation between President-elect Donald Trump and the Chinese government escalated on Monday, as China responded harshly to attacks by Trump on its economic and security positions. http://on.wsj.com/2ge4jXO
– Amazon.com Inc unveiled Monday its first small-format grocery store, Amazon Go, one of at least three brick-and-mortar formats the online retail giant is exploring as it makes a play for an area of shopping that remains stubbornly in-store. http://on.wsj.com/2haHTIQ
– The euro rallied from early losses following Italian voters’ rejection of government-backed constitutional changes, but the volatile day raises concerns about how the currency survives an era of populist politicians and diverging economies. http://on.wsj.com/2h1qv8W
– A day after the Obama administration put the brakes on a Midwest oil pipeline by denying a permit needed to finish the route, a spokesman for President-elect Donald Trump said the incoming administration supports completing the project. http://on.wsj.com/2gZxrRe
– President-elect Donald Trump said he will nominate retired neurosurgeon Ben Carson as secretary of the U.S. Department of Housing and Urban Development, a move that would place a former political adversary with little housing-policy expertise in a key administration post. http://on.wsj.com/2h9PXt5
– Investor materials show Theranos projected revenue of nearly $2 billion and net income of about $505 million this year. http://on.wsj.com/2h1bCmU
– Euroskeptic parties vary in their prescriptions but are putting pressure on mainstream politicians to address perceived flaws in the EU and common currency. Elections next year in several European nations will go far to determine the fate of continental integration. http://on.wsj.com/2h9SPSS
– New Zealand is facing a leadership contest following the surprise resignation of Prime Minister John Key that will pit his deputy, a former party leader, against at least two other prominent members. http://on.wsj.com/2gXlCe2
– The U.S. Senate Monday cleared the final hurdle to passage of broad legislation aimed at boosting federal funds for biomedical research and speeding up government approval of drug and medical-devices, a goal pursued by the pharmaceutical industry over the objections of some consumer advocates. http://on.wsj.com/2gXkjMl
FT
Britain’s government is listening closely to the financial services sector’s Brexit concerns, said finance minister Philip Hammond and the minister in charge of the process for the country’s exit from the European Union, David Davis.
British Transport Minister Chris Grayling will say in a speech on Tuesday that he wants Network Rail to share responsibility for running railway tracks with other operators.
Euro zone finance ministers agreed on Monday on some debt relief for Greece, but were divided on reforms it must undertake to reach fiscal targets, leaving it unclear if the International Monetary Fund will join the Greek bailout programme.
Britain is beginning to prepare its new World Trade Organisation membership terms ahead of its exit from the European Union and will seek to closely replicate the existing EU ones, Trade Minister Liam Fox said on Monday.
Web giants YouTube, Facebook, Twitter and Microsoft will step up efforts to remove extremist content from their websites by creating a common database.
NYT
– Amazon has created a small grocery store in Seattle that will allow customers to take drinks, prepared meals and other items off shelves and walk out without having to wait in a checkout line. It planned to open the store to the public early next year and that it would offer chef-made meal kits with ingredients for quickly preparing dinners at home. http://nyti.ms/2gx5Wxx
– Facebook, Google, Twitter and Microsoft said they have teamed up to fight the spread of terrorist content over the web by sharing technology and information to reduce the flow of terrorist propaganda across their services. The group plans to create a kind of shared digital database, “fingerprinting” all of the terrorist content that is flagged. By collectively tracking that information, the companies said they could make sure a video posted on Twitter, for instance, did not appear later on Facebook. http://nyti.ms/2gxbzvv
– The international oil industry agreed to pay billions of dollars to the Mexican government for rights to drill in the country’s portions of the Gulf of Mexico. The companies made a big bet that oil and natural gas prices would eventually rebound enough to make additional exploration and drilling profitable. The sale was a validation of Mexico’s decision to open its former government-monopoly energy business to foreign investment and expertise. http://nyti.ms/2gxajIO
– Uber acquired artificial intelligence start-up Geometric Intelligence. The new research arm will be called Uber’s A.I. Labs and all 15 people from the start-up will be absorbed by Uber. Uber said it hoped that through the acquisition, the new team could harness the wealth of data it collects from the millions of daily Uber rides. http://nyti.ms/2gxdTTf
Britain
The Times
Tata Steel Ltd says it has made significant commitments to more than 4,000 workers at the Port Talbot steelworks in south Wales, which has spent the past eight months under threat of closure. Rather than close one of the two blast furnaces at the steelworks, which many believe Tata has been considering as part of a merger of its European operations with ThyssenKrupp, of Germany, it is believed that the Indian-owned industrial group plans to keep staff employed into the next decade. http://bit.ly/2gZTM14
Shareholders at Independent News & Media Plc have voted overwhelmingly in support of restructuring measures despite protests from current and former staff whose pensions will be cut as a result. http://bit.ly/2gZSAL6
The Guardian
Amazon.com Inc has opened a corner store where customers can pick up their groceries and just walk out without having to queue up and pay at the checkout. The company said shoppers at its Amazon Go store will have the cost of their purchases automatically billed to their Amazon Prime account. Sensors will track customers as they go about the store and record items they pick up. http://bit.ly/2gvgI7u
A top U.S. investment bank resigned as a key adviser to Mike Ashley’s Sports Direct International Plc because of concerns that the retail company had manipulated its share price, according to claims made in a high court document. Bank of America Merrill Lynch had concerns about Sport Direct’s corporate governance and the “propriety” of share transactions in 2012 around its employee bonus scheme, according to allegations in legal filings by Jeff Blue, previously one of Ashley’s key allies. http://bit.ly/2gJPRaC
The Telegraph
GW Pharmaceuticals Plc plans to expand manufacturing in the United Kingdom and boost cultivation of the cannabis plants it uses to make a treatment for severe epilepsy, its chief executive has said. http://bit.ly/2hbxM6u
Blackcurrant drinks should be exempt from the government’s sugar tax, drinks makers including Ribena have suggested, as Treasury documents reveal a number have asked for special treatment by the Treasury. http://bit.ly/2gWyy46
Sky News
An executive who left BG Group months before a takeover approach from Royal Dutch Shell is being lined up to take the helm of Genel Energy Plc , the oil company founded by former BP boss Tony Hayward. Chris Finlayson is the leading candidate to replace Hayward as Genel’s chairman. http://bit.ly/2g3mkEU
A planned 24-hour strike by London Underground drivers has been suspended, the RMT union has said. Drivers on the Piccadilly and Hammersmith and City lines were due to walk out from 9.30 pm on Tuesday, amid claims of a breakdown in industrial relations, breaches of procedures and bullying and harassment of staff. http://bit.ly/2gvyuaD
Euro, BTPs Hit On Local Reports Italy May Hold Early Elections
by Tyler Durden
Update: it appears that early elections are indeed coming to Italy, which could be another major calendar event for Italy, and one which would have far more significant consequences for the political make up of the country should M5S win as many expect. From Reuters:
ITALY INTERIOR MINISTER, SPEAKING AFTER CONVERSATION WITH RENZI, SEES NEW ELECTIONS LIKELY IN FEBRUARY – CORRIERE DELLA SERA
* * *
The Euro has been hit this morning, losing some 50 pips following reports in both La Repubblica and Corriere, that Matteo Renzi may stay in power for several weeks before potential early elections in January-February of 2017. According to La Repubblica, Renzi may ask that early elections are held in near future in return for staying in power until then. As previously reported, the next Italian general election must be held no later than 23rd May 2018.
The move has pressured other Italian assets, with BTP futures retreating from highs and the Italian bank index paring gains as investors focus on potential for Italian elections to be held early next year.
However, there has been some confusion about the date of the snap elections, because President Mattarella reportedly doesn’t see elections in February technically feasible because changes are needed to the country’s election law known as Italicum.
There is another consideration: should snap elections be hald soon, they would likely lead to a victory for Italy’s anti-establishment Five Star Movement, which as noted on Sunday has already called for immediate elections after the outgoing prime minister Matteo Renzi’s defeat in a constitutional referendum, saying it was prepared to put forward a new government that could immediately assume power.
While it appears unlikely that Beppe Grillo, a former comedian and co-founder of the populist party, will get his general election wish, the bold demand showed his Movimento Cinque Stelle (M5S) now has its sights on an even greater electoral victory: one that would eventually land it in the prime minster’s residence in Palazzo Chigi.
As the Guardian reported, many analysts pointed out that M5S still faces considerable obstacles, including probable reforms of electoral law that will make it difficult for the party to get a majority. “But even if such manoeuvres keep it at bay temporarily, one thing is clear: the party is now the second most powerful force in Italy behind Renzi’s diminished Democratic party.”
Vincenzo Scarpetta, a senior policy analyst at the thinktank Open Europe, said M5S would have a fair chance of winning the next general election under current electoral rules, but those rules are likely to change in coming months under the current Democratic-controlled parliament, which may be the impetus behind delaying elections as much as possible, and why today’s report of early snap elections has led to Euro weakness.
The decision to call immediate elections ultimately falls with Italy’s president, Sergio Mattarella.
Austrian Elections – Still the Anti-Socialist Vote
Armstrong Economics Blog
Re-Posted Dec 6, 2016 by Martin Armstrong
QUESTION: Marty, at the cocktail party you said you did not see the far-right in Austria winning for it was not the same. Then you got pulled off. Just wondering what was different in Austria?
Thank you for the conference. Don’y know where you get the energy from.
RP
ANSWER: Cyclically, Austria was not ready for the extreme far-right. They, nonetheless, threw out the socialists. Norbert Hofer is extreme far-right. He often carries a Glock pistol. Austria was where the Great Depression banking crisis really began. Hofer hoped to capitalize on the anti-establishment wave credited with delivering BREXIT and Donald Trump. Alexander Van der Bellen won for the nominally independent Green Party. Van der Bellen finished second out of six in the first round of elections before winning the second round against Hofer who was the Freedom Party candidate.
The current president if Heinz Fischer, who was of the Socialist Democratic Party. So the election was still against the Socialists. Hofer was too far-right at this point in time. So the change from socialists is still underway. We do not need to go extreme far-right in the political wave of change.
Parallels in History
Armstrong Economics Blog
Re-Posted Dec 6, 2016 by Martin Armstrong
QUESTION: Hi Martin
Since you have a detailed grasp of world history. Can you provide any insight to any parallels with Trump’s election to any period in the past.
PS- Thanks for the great insights on gold and the DOW.
ANSWER: There are countless parallels, far too many to list. Many are partial and others are very similar. There are many parallels to Ronald Reagan insofar as Trump gathered the fiscal conservatives who voted for Reagan and were marginalized by everyone else ever since. Reagan was also an outsider and the rumors were he was a “hawk” and would start World War III. The Washington crowd hated Reagan and feared he would disrupt their corruption. Even if you look to the Venetian Empire, when the Dodge died, his estate was seized and investigated for any corruption he engaged in before his heirs would receive anything. Nobody is seizing Hillary’s estate, but the pervasive corruption she engaged in has had many such parallels throughout history.
Even in Roman History there are parallels from Julian II and Diocletian. Both faced massive political instability and corruption. The assassinated Julian II but allowed Diocletian to become the first Roman Emperor to retire.
Centinel2012 