Tag Archives: TPP

Jun 19 2017

Suicide Over European Banking Crisis


Armstrong Economics Blog/Banking Crisis

Re-Posted Jun 19, 2017 by Martin Armstrong

Greece-Pensioner-2

The European “bail-in” rules have been cheered claiming taxpayer money will be spared. However, many seniors bought bank bonds for their retirement. In the rescue of the small Banca Popolare d’Etruria, a retiree who had lost more than 100,000 euros worth of bonds lost everything and committed suicide. There have been many such events that do not always make the press. In Italy,  the death of a pensioner who also committed suicide after losing his life savings as a result of a controversial move by the government to rescue four banks. The 68-year-old hung himself at his home in Civitavecchia, a port town near Rome, after the so-called “save banks” plan wiped out €100,000 in savings held at Banca Etruria, one of the four lenders included in the government rescue deal announced on November 22nd, 2015. There was the 23-year old who committed suicide over £8000 in debts for student loans. A Greek pensioner who was 77-years old committed suicide in central Athens shooting himself with a handgun just several hundred meters from the Greek parliament building in apparent despair over his financial debts.

The government have made promises and socialism was all about protecting the people from the evil capitalists. But the politicians became the capitalists and now all the promises are being reversed or modified. The crisis we face ahead is so many people believed in what they told everyone. What happens when they discover it has been just a lie?

Jun 18 2017

Grenfell Tower Fires Exposes Government Corruption


Armstrong Economics Blog/Corruption

Re-Posted Jun 18, 2017 by Martin Armstrong

At least 58 people are feared to have died in the fire that engulfed Grenfell Tower this past week. Prime Minister Theresa May admitted that the government response was appalling. There is mounting anger growing that many are saying that people were told to stay in their apartments and died as a result. They are also exposing the fact that there were no sprinklers to combat the fire. On top of that, many see this as a plot to get them out of a rich neighborhood.

The building is a government property managed by Kensington and Chelsea Tenant Management Organisation (KCTMO) which was formed in 1996. KCTMO manages 9,459 properties for the council, according to its business plan, and is the largest tenant management organisation in England. It was refurbished last year but no sprinkler system was installed. The issue here is similar to the World Trade Center crisis. In both cases, we are looking at government owned properties. If such properties were privately owned, the management would be thrown in prison. Because we are looking at government ownership, no such outcome is likely. Government can avoid building codes to save money that no private construction company could possible get away with.

The people are turning this into a rich v poor issue rather than looking a bit deeper.

This is another example of just how corrupt government has become.

 

Jun 18 2017

Grenfell Protests – May Must Go


Armstrong Economics Blog/BRITAIN

Re-Posted Jun 18, 2017 by Martin Armstrong

 

The protests are rising and Theresa May failed to go talk to the people right away while Jeremy Corbyn was there on TV crying with the people. He had proposed refurbishing the government housing and sprinklers should be installed last year and it was knocked down. People are blaming austerity. They are demanding an inquest, not a public inquiry. People feel that a public inquiry behind closed doors will hide the truth once again.

The Fate of Britain

We just released our report on in Britain. The markets were showing a very bearish outlook ahead and this was strange if not irreconcilable with the bullish view of BREXIT. We put it all together and warned that the Conservatives may end up being replaced by Labour and we can see Britain turn very hard left toward Marxism. This is a very important report for it goes into the pound on the cross rates with the dollar, euro, Swiss and the yen. In addition, we covered the Long Gilts and the share market. The timing seems incredible given the events following the release of this report.

Tony Blair was a socialist and took Labour to the center right. He achieved concessions from unions no Conservative could have ever accomplished. But Corbyn wants a maximum wage and intends to take Labour back to the 1970s and its extreme Marxist positions. Installing a maximum wage to prevent high paying jobs seems insane. It’s all about punishing accomplishment rather than raising the living standard. The definition of the “rich” will drop from £145,000 to £80,000 and raising the corporation tax from 19% to 26%. He wants 50% tax on anyone who earns more than £123,000. Inheritance taxes will be lowered from £850,000 tax free to £425,000 and anything above that will be 40%. This will wipe out small businesses preventing them from continuing and that applies to farmers as well. Raising taxes to this magnitude will surely lead to the migration of top-end positions out of London.

Jun 17 2017

Amazon Purchases Whole Foods For $13.7 Billion (Cash)…


Re-Posted from The Conservative Tree House on June 17, 2017 by

The business world is buzzing over Amazon’s $13.7 billion purchase of Whole Foods. CTH has received requests for opinion. Amazon stockholders may not like the perspective.

(Via CNN Money) The online retail giant announced Friday that is buying organic grocery chain Whole Foods (WFM) for $13.7 billion in cash. The deal values Whole Foods at $42 a share, 27% higher than where the stock was trading Thursday.

Amazon (AMZN, Tech30) said Whole Foods stores will continue operating under that name as a separate unit of the company. Whole Foods CEO John Mackey will stay on to lead Whole Foods, which will keep its headquarters in Austin, Texas. (link)

Here’s my review. Firstly, Whole Foods was available for purchase because Whole Foods business model was limited; and like the progressively minded organization they are – they allowed their Birkenstocks to travel beyond their limits, which always leads to failure.

In the PC corporate world ‘pending failures’ are called “challenges“, or “opportunities” if you don’t want to get kicked out of the boardroom.

Whole Foods is a high-priced (nicknamed “Whole Paycheck” for a reason) grocery outfit specifically because they were/are generally a niche market operation.

The cost of organic products, in combination with their fundamental flaw (Achilles heel) that economies of scale (warehouse and distribution) are a prerequisite within the low margin industry for cost savings, kept their prices high.

As a regional business, inside specific markets with specific access to locally sourced product, Whole Foods would be ok.  It’s their core operations and reason for their initial success.

However, attempt to expand that operational model nationally (which they did), and you enter a dynamic of trying to sell products in markets that don’t appreciate or value the Vichy experience of dropping $300 for two Eco-friendly canvas bags of fruits, vegetables and oddly pronounced olive oils.

High prices are necessarily part of the Whole Foods overall business model. Expand operations beyond niche markets that can afford such prices and, well, failure (ie. their Birkenstocks traveled to far).  That position is exactly where they were.

♦ Enter Jeff Bezos, Amazon and a distribution network with a high-minded belief their distribution can/will enhance the logistic and efficiency challenges encumbering Whole Foods future success.

No doubt Bezo’s gender neutral Latte bean counters found some like-minded suave millennials, complete with man-buns and algae cakes, to deliver a fabulous Apple-powered presentation therein.  Business graveyards are filled with such enamored and well-meaning carcases.

Whole Foods operates approximately 460 stores.  [How many of them actually turn a profit, and hold up the loss leader footprint, is unknown.] Amazon reportedly paid $13.7 billion (yes that’s billion with a “B”) for the footprint.  Or approximately $29.8 million per retail unit.

$29.8 million per store is approximately $10 million more (per unit) than anyone with a modicum of practical common sense would normally pay.  Then again, Amazon is cash heavy, so what’s a few billion amid like-minded latte power-point-pals; and Mackay’s crew of fellow travelers know how to burn cash better than most.  (See Hillary Clinton’s 2016 boondoggle expenditure for reference.)

However, in Bezo’s world, amid the giddy financial generation, money seems to grow on trust-fund trees.  The bottom line of actual profit is transparently non-existent in this $13.7 billion expenditure.  Even with a modicum of success, it would take a generation of successful operations for all 460 units to pay back such an over inflated purchase price.  So, obviously this is not a decision based on bottom line profit generation for the parent company Amazon.

That brings us to the next set of points which lean more remarkably toward failure.

Technology, and more specifically technological mobility, is now creating individual efficiencies in consumer personalization to exceed any investment value that a retailer would necessarily place in infrastructure.

Does that sound like corporate gobbledyspeak?  Good, it was supposed to.

Plain english version – People are assuming Amazon will be looking to generate shop-at-home (direct delivery) value via a synergy of Whole Foods grocery operations and Amazon’s exhaustive distribution network.   [All of the highfaluting Brioni suit and disposable tailored white shirt crews are espousing that opinion.]  Amazon is anticipated to be able to deliver groceries through this acquisition.

In order for that to be a possible future outcome, layers of cost efficiency would need to be the driver of Whole Foods boardroom discussion very soon. Very unlikely.  Apparently unbeknownst to the algae-cake community, the overall industry, as a direct result of the technological mobility of the consumer, is now less invested in such an approach.

Why?

Simple.  Technology is also creating efficiency for consumerism.  It is entirely possible to go on-line for your grocery purchase, submit your grocery list to your local market, and then utilize Über transport as the pick-up and delivery method.  Über and Lyft won’t be just for taxi service anymore…. watch/wait for it.

The all encompassing process of ‘field-to-fork’ within the food industry is poised to break down into various competing sub-sets and sub business units, external to the food retailer.  Again, efficiency of scale and specialization is essentially the driver (no pun intended).

On the upside of angled considerations for Amazon, they are also looking into entry in the retail store market, and with that in mind actual foot traffic is a prime factor.  No industry drives a higher measure of consistent foot traffic than your local supermarket.  So there can be a reasonable expectation that Amazon stores will have some connective tissue to the locale of Whole Foods. [Somewhat guessing here]

However, in the direct-to-home market for grocery operations, specifically because of the aforementioned mobile distribution specialization, the synergy of Whole Foods and Amazon shouldn’t be predicated on a belief such a new market will necessarily emerge.

Yes, the upper-east side, and those of similar refinement, may welcome Amazon delivery of Whole Foods products.  But that doesn’t change the issues of regional limits for such consumer evaluations.  The baseline Achilles heel of Whole Foods still exists, albeit with a possible delivery service.

Tear it all apart and Amazon just paid about $30 million per store for a business enterprise worth about 30% less than that.  There is no reasonable way, from a profit perspective, for Amazon to ever recapture such an expenditure.  Then again, as stated, it doesn’t look like profit is their motive.

That said, as history customarily shows, sooner or later the value of a common stock will not support the best intentions of well worn Birkenstocks.

Jun 17 2017

French Parliament Elections Tomorrow June 18th


Armsrong Economics Blog/France

Re-Posted Jun 17, 2017 by Martin Armstrong

Macron was hoping to have a super majority that his new party would sweep the election to give him ultimate power. However, the latest poll taken by BFMTV showed a stunning 61% of French voters did not want the 39-year-old’s party to take the National Assembly. The majority of French voters have said they will vote against Macron’s party to prevent a “crushing” majority in parliament. Most have responded that they would vote for a rival party in the second round in a bid to “rectify” the the decision.

It is looking more and more that the vote for Macron was not in support of him handing sovereignty to Brussels. The election point overlooked by everyone is the fact that Le Pen beat ALL mainstream parties. There is no mandate for the surrender of rights in France to a new Federalized Europe. The election is this Sunday, June 18th. We will see the results soon.

Jun 17 2017

Even Switzerland has Gone Stalinistic


Armstrong Economics Blog/Uncategorized

Re-Posted Jun 17, 2017 by Martin Armstrong

 

The Swiss voted to allow a new oversight of the Federal Intelligence Service to spy domestically for security, of course. There were promises that this would be subject to an independent control to ensure it was not abused and become a Stalinistic power. Well, it turns out that the “independent” supervision is just an internal department subject to the same boss. The new powers are to allow the government to intercept all phone calls, read e-mails and SMS messages, as well as to hack into personal computers. It does not matter what government we look at. The entire world has gone mad. Stalin must be smiling from above for his paranoia worrying about what people were thinking is the new standard of intelligence operations in the West.

Jun 16 2017

Minority Report Becomes Reality in Japan – Prosecution Before You Commit a Crime


Armstrong Economics Blog/Uncategorized

Re-Posted Jun 16, 2017 by Martin Armstrong

The plot of the movie Minority Report was a SciFi flick that in the future they used physics to monitor the world and report if someone was going to commit a crime. Now Japan is doing that but without the physics – just bureaucrats. Japanese Prime Minister Shinzo Abe’s government passed the most outrages legislation perhaps in the world. This empowers prosecutors to monitor and arrest people in the planning stages of crimes. That is perhaps the most anti-Human rights act you can possibly imagine. Effectively, an enemy can bribe some bureaucrat to arrest you and imprison you for life claiming you were planning to commit a crime, but took no action.

The government of course is calling this as necessary as a counter-terrorism act ahead of the 2020 Tokyo Olympics. You simply cannot trust government to EVER wield such power. Abe has also been looking to revise the constitution and remove the restraints imposed upon Japan at the end of World War II that confined its forced to 200 miles from its shores. Abe wants that removed by 2020 as well. The Olympics are being used to wipe away human rights in Japan and hand more authoritarian power to government.

It looks like we should eliminate the Olympics to preserve our rights

Jun 16 2017

France Police Hunting Tourists To Shake Them Down


Armstrong Economics Blog/The Hunt for Taxes

Re-Posted Jun 16, 2017 by Martin Armstrong

COMMENT: Mr. Armstrong; I had the wonderful experience of flying to France to see my son going to school there. Upon my arrival, I was immediately commandeered by the French police asking me how much money I had. I didn’t even get out of the Paris airport. I was not dressed elegantly; just jeans. I wanted to send you this not because reading what you write and experiencing it are two different things.

Thank you for what you do

GK

ANSWER: Yes. France is going nuts. They are stopping trains that pass through France and searching people’s bags for cash. And this is where they want the financial markets moved to from London? I would not have any account there. They cannot be trusted

Jun 16 2017

The Rising Movement Against Soros


Armstrong Economics Blog/Politics

Re-Posted Jun 16, 2017 by Martin Armstrong


In Hungary, NGOs (non-governmental organizations) will have to be registered in court and their foreign donors will be disclosed. The Hungarian Parliament adopted what many are calling the most controversial laws of recent years. Prime Minister Viktor Orban, advocated the so-called NGO Law that obligates non-governmental organizations with more than 24,000 euros per year from outside the country to declare their most important foreign donors annually and to declare themselves as “an organization benefiting from foreign financing”. If they do not comply with this obligation, they will be closed in Hungary. The so called blueprint for the law comes from Russia, where foreign-funded institutions are branded as “enemy agents”. NGOs in Hungary have to register themselves from now on, and on their website they will be able to use the term “foreign-funded organization”.

There are a lot of people up in arms over this. But there is a serious problem of organization such as that of George Soros trying to fund revolutions and government subversion movements. There have been foreign fundings of civil unrest in the United States against Trump. Obama funded activists in Canada to overthrow the conservatives. Clinton help Tony Blair and the Labour Party beat John Major, and we certainly cannot forget all the screaming about Russian interference in the 2016 election that defeated Hillary.

Macedonia 3-26-2017

The EU Commission and the United Nations have both strongly criticized the bill. They actually say it is designed against Orban’s intimate enemies, namely the Hungarian-American billionaire George Soros. The foundations of Soros claim to support numerous human rights organizations and environmental protection groups in Hungary, but it also funds anti-government movements. Orban had just said recently that Soros “and his agencies” were an opaque component in the public life of Hungary. It was Soros supporting more refugees moving into Hungary.

The EU had complained that the “NGO Transparency Act” was far beyond the goal of securing financial transparency. This would also limit the legitimate political activities of groups that are exposed to a constant, hostile campaign by the Orban government. The government made some concessions to Brussels whereas donations under €1700 would no longer need to be reported separately. The rule is that all “groups financed abroad” will not be eligible for state funding in Hungary.

We are seeing these laws in other places as well. Trump has banned American politicians from lobbying for foreign government for up to five years after leaving office. Human rights groups and activists in Egypt are accusing the government of President Abdel Fattah al-Sisi for effecting a law that regulates the work of non-governmental organizations. Clearly, there is a huge difference between helping people and creating political unrest. The Egyptian measure restricts NGO activity to developmental and social work and introduces jail terms of up to five years for non-compliance. The law also gives the government power over deciding who can establish an NGO and for what purpose. Similar laws were installed in Russia as well.

After all the yelling by the Democrats in the USA that Putin interfered in the US election, NGOs are clearly something that is a grey area, which has been exploited for political purposes using the cover of humanity.

Jun 15 2017

Merkel Wants G20 Global Taxation of Internet


Armstrong Economics Blog/The Hunt for Taxes

Re-Posted Jun 15, 2017 by Martin Armstrong

Markel is calling upon the G20 to regulate the internet. While she if pretending to be concerned about cyberattacks, which no regulator can prevent, you have to look into the finer details. Chancellor Angela Merkel called for a global regulation sayying: “Industry 4.0 will have to go through the process that we have already gone through at the World Trade Organization (WTO) with real trading operations that we have gone through in the G20 process with financial market regulation.” 

She noted that the “concerns” include “cyberattacks, the responsibility of social platforms to tax issues in international trade, and growing concern in the world Of policy. “

In other words, she wants to tax all sales on the internet. So anyone from Germany buying anything anywhere would have to pay VAT and every online merchant would have to comply with global regulation. Additionally, governments are increasingly becoming concerned about blockchain technology and the avoidance of taxes.

As always, government pretend to be concerned about security, but it is always about the money. She also wants to shut down anyone who talks against government in the social media.