Aug 042015

Another weekend of glad-handing and Sunday talk-shows and still The Donald dominates the GOP Presidential nominee race. With all eyes firmly glued on this week’s debate, Trump had a few choice words for those who attended the Koch brothers’ biannual conference (which he was not invited to), tweeting “I wish good luck to all the Republican candidates that traveled to California to beg for money etc. from the Koch Brothers… Puppets?” As WSJ reports, Mr. Trump poses a more delicate short-term challenge for the GOP, thanks to high name recognition, celebrity appeal and a populist message that taps a powerful anti-Washington vein.  “I don’t think you should underestimate how frustrated people are,” Florida Sen. Marco Rubio said Sunday during a lunch at the Koch gathering. “Mr. Trump has tapped into some of that.”


Still ahead…


As The Wall Street Journal reports,

Mr. Trump’s unanticipated ascent coincided with the arrival of five other Republican presidential candidates at a luxury resort here over the weekend to audition for hundreds of wealthy donors convened by billionaire industrialists Charles and  David Koch. It’s a gathering that exposes both the promise and the limits of a new campaign financing system for the GOP. More money is flowing into the race, but the party and the candidates have less control over how those dollars are spent. The contenders also risk appearing beholden to deep-pocketed backers.


The biannual Koch conference set the stage for the busiest week yet in the nominating contest, with a candidate forum Monday in New Hampshire and the first candidates’ debate on Thursday in Cleveland.


The Koch conference is an unrivaled convergence of roughly 450 conservatives who have pledged at least $100,000 a year to various political and ideological endeavors. Many are also financing individual presidential candidates and the so-called super PACs that support them.


Outside donors are taking on roles once solely performed by candidates and the party, from television ads to voter outreach. The Koch network plans to spend about $900 million in the run-up to the 2016 election, with about a third of that total devoted to influencing elections outcomes. Yet, these donors don’t always see eye-to-eye with GOP leaders in Washington and could prove nettlesome for a Republican president.


The Koch network, for example, sparred with the Republican National Committee over who controls the vast repository of voter data that GOP candidates at every level of the ballot will need to turn out supporters next fall. The two sides recently reached a deal to share information, but the pact gives an entity backed by the Kochs a central role overseeing the party’s data-collection efforts for the foreseeable future. Candidates also rely increasingly on Koch-financed groups to organize their grassroots events.

*  *  *
It seems Jimmy Carter was right after all,

“It violates the essence of what made America a great country in its political system. Now it’s just an oligarchy with unlimited political bribery being the essence of getting the nominations for President or being elected President. And the same thing applies to governors, and U.S. Senators and congress members. So, now we’ve just seen a subversion of our political system as a payoff to major contributors, who want and expect, and sometimes get, favors for themselves after the election is over. …


At the present time the incumbents, Democrats and Republicans, look upon this unlimited money as a great benefit to themselves. Somebody that is already in Congress has a great deal more to sell.”

*  *  *

Mr Trump did not seem too worried…

I wish good luck to all of the Republican candidates that traveled to California to beg for money etc. from the Koch Brothers. Puppets?

— Donald J. Trump (@realDonaldTrump) August 2, 2015

It’s going to be a busy week…


Aug 042015

Submitted by Christopher Westley via The Mises Institute,

Those possessing the anti-capitalist mentality — so ascendant in our culture today — often critique market actors as being solely motivated by “greed.” Surely economic systems based on nobler motivations, they say, would better promote the long-run interests of the planet.

The Voluntary Marketplace Uses Greed as Motivation to Serve Others

This is an issue I deal with in detail in my Principles of Economics classes. The fascinating point about the market system isn’t that it is based on greed, but rather that it forces those motivated by greed to act in ways that promote the social interest. If you want to get rich, say by x amount, then you better improve the lives of consumers, through voluntary transactions, by some amount greater than x.

Such are the economic means of acquiring wealth, explained in more detail in 1922 by the German sociologist Franz Oppenheimer, writing at a time before his discipline transmogrified into an enterprise predicated on supporting greater state intervention.

However, problems arise when those motivated by greed find ways to acquire wealth through coercion. Oppenheimer called these the political means (as opposed to the voluntary means of the marketplace), and we witness them today when (1) firms benefit from their relationships to the state as opposed to the consumer, and (2) the state itself uses its legal monopoly on violence to acquire wealth.

A New Death Tax in Connecticut

These ideas ran through my head when I read about the new probate court “fees” approved by the Connecticut legislature this month, reinforcing its status as being among the worst states in which to die. Whereas the maximum fee for settling estates there was $12,500, it can now go as high as $100,000, and in some cases, well over $1 million. These “fees” are in addition to estate taxes that range between 7.2 to 12 percent on estates greater than $2 million.

The “fees” were justified on an expected budget shortfall of $32 million that the legislature wanted to fill, but I wondered: Where was the outcry from the greed-police? One can imagine the reaction if, due to poor fiscal management, Costco or Best Buy announced they were going to double or triple prices on their popular items to account for losses. Yet, governments do this all the time, and somehow, it is never considered greed when political means are used to acquire wealth.

Adding to the irony is the fact that resources are more likely to be squandered when forced out of private hands and into the public sector, where incentives to waste today promote bigger budgets tomorrow, and where crony capitalism is fed. Resources that might have been saved and directed to productive uses are instead directed to various interest groups and well-connected firms.

Capital Arises from Thriftiness, Not Greed

Those who would encourage greater transfers of wealth to the public sector forget that

[c]apital is not a free gift of God or of nature. It is the outcome of a provident restriction of consumption on the part of man. It is created and increased by saving and maintained by the abstention from dissaving. Neither have capital or capital goods in themselves the power to raise the productivity of natural resources and of human labor. Only if the fruits of saving are wisely employed or invested, do they increase the output per unit of the input of natural resources and of labor. If this is not the case, they are dissipated or wasted.


The accumulation of new capital, the maintenance of previously accumulated capital and the utilization of capital for raising the productivity of human effort are the fruits of purposive human action. They are the outcome of the conduct of thrifty people who save and abstain from dissaving, viz., the capitalists who earn interest; and of people who succeed in utilizing the capital available for the best possible satisfaction of the needs of the consumers, viz., the entrepreneurs who earn profit. [Mises, The Anti-Capitalist Mentality, pp. 84–85]

Capital is actually a gift of the thrifty, and it is not free. There’s no surprise that states with no death taxes whatsoever attract capital from places like Connecticut. Its pols are between a rock and a hard place, with the rock being the need to finance the current level of redistribution (and to never, ever reduce it), and the hard place being the increasing willingness of the pilfered to engage in tax avoidance. Its legislature must be the trust attorney’s best friend.

Sick minds deemed the supply of death perfectly inelastic and therefore worthy of tax. But it’s not just people who die in Connecticut. Wealth does too, illustrating what happens when greed is unconstrained by market forces. Some writers might consider Connecticut’s economy something of a model worth emulating, but the fact is that Connecticut — like every other tax jurisdiction — grows its public sector at the expense of its private, and that when capital predictably flows elsewhere, economic opportunity diminishes.

Aug 042015

Chinese stocks are opening flat to marginally higher – still lower from Friday’s close – despite the government unleashing yet more ‘measures’ in the name of stability. Having banned 5 accounts – reportedly including Fed-favorite Citadel – China is blaming excess market volatility on short-term short-sellers and has put in place curbs on short-selling that force traders to hold for at least one day. On the bright side, margin traders reduced exposure for the seventh day in a row, reducing outstanding balances to 5-month lows.. which leaves the median China stock trading at a remarkable 61x reported earnings (compared with 12x in Hong Kong).


As Bloomberg details,

Investors who borrow shares must now wait one day to pay back the loans, according to statements from the Shanghai and Shenzhen stock exchanges issued after the close of trading on Monday. This prevents investors from selling and buying back stocks on the same day, a practice that may “increase abnormal fluctuations in stock prices and affect market stability,” the Shenzhen exchange said.


The short-selling curbs are the latest measures the government is taking to prop up share prices and prevent market manipulation after an almost $4 trillion selloff. Regulators are probing “malicious” short selling and have examined the futures trading accounts of foreign investors. They’ve also banned stock sales by major shareholders, suspended initial public offerings and compelled state-run institutions to support the market with equity purchases.

As Reuters adds,

“This is apparently aimed at increasing the cost of shorting and easing selling pressure on the market,” said Samuel Chien, a partner of Shanghai-based hedge fund manager BoomTrend Investment Management Co.


He added, though, that short-selling was already difficult, referring to other efforts to limit the practice. These include a move by Chinese brokerages to limit short-selling business.

*  *  *

But for now it is having only modest impact…


The more measures they apply, the higher the price of pork goes and the more squeezed by inflationary pressures – no matter how bad the economy – the PBOC is to not cut RRR.


In other words, a 21% surge in pork prices – a major component of China CPI – forces the PBOC toapply piecemeal measures and not apply broad based  cuts to stimulate the economy. So while some talking heads pray for more bad data in China, they are missing the crucial panic factor – soaring food prices will mean more social unrest than plunging stock prices.


Charts: Bloomberg

Aug 042015

Submitted by Mike Krieger via Liberty Blitzkrieg blog,

There’s nothing quite like a grotesquely lopsided “economic recovery” in which a handful of cities boom, while the rest of the nation stagnates. Even worse, millennials living in such chosen cities face one of two options. Either live in mom and dad’s basement, or face a standard of living far more similar to 19th tenement standards than the late 1990’s tech boom.

With that out of the way, I want to introduce you to what a $1,000 per month rental in the San Francisco Bay area looks like. Shipping containers:

Screen Shot 2015-08-03 at 10.41.45 AM

Don’t worry, there’s a lovely garden out back:


Screen Shot 2015-08-03 at 10.41.59 AM

We learn more from Bloomberg:

Luke Iseman has figured out how to afford the San Francisco Bay area. He lives in a shipping container.


The Wharton School graduate’s 160-square-foot box has a camp stove and a shower made of old boat hulls. It’s one of 11 miniature residences inside a warehouse he leases across the Bay Bridge from the city, where his tenants share communal toilets and a sense of adventure. Legal? No, but he’s eluded code enforcers who rousted what he calls cargotopia from two other sites. If all goes according to plan, he’ll get a startup out of his response to the most expensive U.S. housing market.


“It’s not making us much money yet, but it allows us to live in the Bay Area, which is a feat,” said Iseman, 31, who’s developing a container-house business. “We have an opportunity here to create a new model for urban development that’s more sustainable, more affordable and more enjoyable.”


As many as 60,000 San Franciscans live in illegal housing, according to the Department of Building Inspection.


Iseman collects $1,000 a month for each of the 11 structures parked in the 17,000-square-foot warehouse he rents for $9,100. Tenants include a Facebook Inc. engineer, a SolarCity Corp. programmer and a bicycle messenger.

It’s not even San Francisco proper either, this is in Oakland. You could probably catch $2k per month for a cargo box in the Mission.

Iseman used to pay $4,200 a month in San Francisco’s Mission District for a two-bedroom apartment with a slanted floor and mosquito-breeding puddles.

He bought his metal box for $2,300, delivery included, then cut out windows with a plasma torch and installed a loft bed, shower and bamboo flooring. He estimates his all-in cost at $12,000, and plans to sell refashioned containers for about $20,000 through his company, Boxouse.


“What we’re doing is converting industrial waste into a house in a couple of weeks,” said Iseman, who also founded a pedicab fleet. Meanwhile, he doesn’t plan on seeking city approval for cargotopia, whose location he asked not be identified. “I’d rather ask forgiveness than ask permission.”

I want to be clear that I’m not knocking Mr. Iseman for starting this project. He seems to be a well-meaning, entrepreneurial guy trying to make the best out of a bad situation and solve a very real problem on his own. What I am knocking is the criminally corrupt American oligarchy, which left this legacy to our youth due to their unfathomable greed, cronyism and nearsightedness.

Of course, I’ve covered this trend several times over the past several years…

NYC Residents Will Pay $2-3k a Month for “Micro-Apartments” as Luxury Car Sales Outpace Regular Car Sales

Coming to San Francisco…Tenement Sized Apartments!

Back to 19th Century Living in NYC: Bloomberg Proposes “Tenement Sized” Apartments for $2K a Month

Aug 042015

Earlier today, when we reported that based on Hillary Clinton’s latest tax disclosure, she and her husband had made $139 million in gross income since 2007 most of its from private speaking fees, the one aspect that readers founds most fascinating was the breakdown of all the bribes better known as speeches given by the two Clintons (who in Hillary’s words came out of the White House “dead broke”) in 2013 as well as the going rate.

So due to popular demand, we appended to the 2013 speech detail first released last week the full breakdown of Hillary’s and Bill’s 2014 and 2015 speeches which had been provided previously as part of her mandatory disclosure in May of this year.

As Politico cautions, the disclosure omits an unknown number of speeches that the Clintons delivered while directing the payment or honoraria to the Clinton Foundation, despite instructions on the and guidance from the U.S. Office of Government Ethics, saying that honoraria directed to a charity should be reported.

Still, as readers will note, even the “modest” data that Hillary chose to share is quite stunning.

We hope it will surprise nobody that the bulk of speeches were bought and paid for by Wall Street and affiliated “financial entities” because that’s what hollow populist pandering is all about – pretending to be an “everyday American” while getting paid tens of millions by Wall Street and America’s biggest corporations.

How many millions?

Since 2013 Bill Clinton has been paid $26.6 million for 94 speeches; Hillary’s grand total is slightly less: $21.7 million for 92 private appearances.

Below we present the full breakdown of every publicly disclosed speech event by Hillary Clinton, together with the associated fee.

And likewise for Bill Clinton:

And a visual way of showing the above data.




Source: Hillaryclinton.con and Politco

Bonus footage: sometime in addition to hundreds of thousands of dollars for speeking for 50 minutes, Hillary would also get a shoe as an added bonus: