Paradise for Oligarchs: Poverty, Inequality Soar as Wealth Rises

Welcome to the Mexican Paradox.
Mexico is nothing if not a land of bewildering contrasts. Economically speaking, the country is a regional powerhouse. On the one hand, it boasts one of the richest ‘official’ billionaires on the planet; on the other, some of the worst income inequality rates in the Western hemisphere. It places 20th on the list of countries with the most millionaires but it’s also home to the 15th largest population of poor people on the planet.
A new study released this week reveals that the wealthiest Mexicans, equivalent to 1% of the population, own roughly the same amount of wealth as 95% of the people further down the wealth scale.
The study, titled ‘The Distribution and Inequality of Financial and Non-Financial Assets in Mexico’ and published by Miguel ngel del Castillo Negrete of the Autonomous Technological Institute of Mexico, documents how after two-and-a-half decades of rampant financial and trade liberalization in Mexico, the lion’s share of the economic benefits have flowed to a tiny minority.
‘Few countries have embraced economic liberalization, deregulation, and privatization as enthusiastically as Mexico,’ Ricardo Fuentes-Nieva, director of Oxfam Mexico, told BBC World Service. ‘But some groups benefited disproportionately and they are now the richest.’

This post was published at Wolf Street by Don Quijones ‘ Aug 18, 2017.

Elon Musk Doubles Down On AI Scare: “Artificial Intelligence Vastly More Risk Than North Korea”

With the world’s attention focused on the Korean Peninsula and the growing threat of global thermonuclear war, Tesla CEO Elon Musk has bigger things to worry about. In a series of ‘alarming’ tweets on Friday, Musk warned the world should be more worried about the dangers of artificial intelligence than North Korea.
Having unveiled his apocalytpic vision of the world a few weeks ago…
‘Until people see robots going down the street killing people, they don’t know how to react because it seems so ethereal,’ he said.
‘AI is a rare case where I think we need to be proactive in regulation instead of reactive. Because I think by the time we are reactive in AI regulation, it’s too late.’
‘Normally the way regulations are set up is a while bunch of bad things happen, there’s a public outcry, and after many years a regulatory agency is set up to regulate that industry,’ he continued.
‘It takes forever. That, in the past, has been bad but not something which represented a fundamental risk to the existence of civilization. AI is a fundamental risk to the existence of human civilization.’

This post was published at Zero Hedge on Aug 12, 2017.

Unlicensed Pet Sitters: The Latest Victim of New York’s Regulatory State

The New York City Health Department wants to ensure that pet sitters are licensed, and has warned a popular internet-based pet sitter service that its users are in violation of the law.
Following outrage, the Health Department clarified and somewhat softened the regulations, stating that ‘individual families’ would not be targeted, but that commercial pet sitters in private homes would be.
It’s worth discussing how a regulation like this will apparently be enforced, as it explains a lot about how state agencies think about us.
First off, we get the usual justification from the Health Department about why these rules are necessary to protect us:
Health Department spokesman Julien Martinez said the ban is justified by public health concerns.
‘To ensure the health and safety of pets and reduce risks to public health, the NYC Health Code requires certain businesses to obtain a Health Department permit and comply with necessary regulations – this includes animal boarding facilities and kennels,’ he said. ‘We also conduct inspections of these facilities to make sure animals would be secure and safe.’
Note the keywords, ‘health’ and ‘safety’ at the beginning, as well as ‘public health’ – who can be against ‘health,’ ‘safety,’ and ‘public health’?
One rare article that tried to defend the regulation is very enlightening. We learn that, for some reason, the Health Department will not issue the licenses to private homes that house or board pets. But, not to worry, hiring someone to come to your home to care for your pet, or perform walking services, remains legal. And, if someone simply watches your pets while you are gone, and no money changes hands, that’s acceptable (according to the city), too.

This post was published at Ludwig von Mises Institute on August 12, 2017.

RED FLAGS AND THE TRUTH BEHIND THE GOVERNMENT’S CLIMATE CHANGE STUDY

The US government (the leader of fake news) and the place where the biggest liars and frauds in human history have gathered) has put together a study that validates themselves. Hold your surprise that a government funded study done by the government that demands strict regulations and taxes in the name of climate change validated every single thing they’ve been saying about climate change for years.
If you believe that climate change can be solved by taxation and regulation, I have a Phoenix beach house to sell you. The truth is, the government is the largest perpetrator of fake news, and a growing number of Americans believe that the US government is untrustworthy. Unless the savior, that same US government, writes a study validating climate change, an issue which hugely benefits the government only, then it should be taken as gospel, freedom smashed, money stolen, and lives ruined all for the government’s agenda.

This post was published at The Daily Sheeple on AUGUST 8, 2017.

Kelly Loses Control As “Vacationing” Trump Unleashes Angriest Tweetstorm Yet

Just days after the Wall Street Journal and others reported that Trump’s new Chief of Staff, General John Kelly, had taken steps to “control” the flow of information on the President’s twitter feed, America will wake up this morning to one of his longest tweet storms yet. Not surprisingly, this latest rant started off by ripping into the “Failing NYTimes” and other “24/7 Fake News” outlets…
The failing @nytimes, which has made every wrong prediction about me including my big election win (apologized), is totally inept!
The Trump base is far bigger & stronger than ever before (despite some phony Fake News polling). Look at rallies in Penn, Iowa, Ohio and West Virginia. The fact is the Fake News Russian collusion story, record Stock Market, border security, military strength, jobs, Supreme Court pick, economic enthusiasm, deregulation & so much more have driven the Trump base even closer together. Will never change!
Hard to believe that with 24/7 #Fake News on CNN, ABC, NBC, CBS, NYTIMES & WAPO, the Trump base is getting stronger!

This post was published at Zero Hedge on Aug 7, 2017.

Mega-Banks Blow 100% of Earnings on Share-Buybacks & Dividends, Crimp Lending, Constrain Economy

‘The real economy has little to gain, and much to lose.’
When tighter regulations were imposed on the banks after the Financial Crisis, the largest among them, the very ones that threatened to bring down the financial system, began squealing. Those voices are now being heard by Congress, which is considering deregulating the banks again. In particular, they claim that current capital requirements force banks to curtail their lending to businesses and consumers, and thus hurt the economy.
Nonsense! That’s in essence what FDIC Vice Chairman Thomas Hoenig told Senate Banking Committee Chairman Mike Crapo and the committee’s senior Democrat, Sherrod Brown, in a letter dated Tuesday, according to Reuters. The senators are trying to find a compromise on bank deregulation.
If banks wanted to increase lending, they could easily do so without lower capital requirements, Hoenig pointed out.
Rather than blowing their income on share-buybacks or paying it out in form of dividends, banks could retain more of their income, thus adding it to regulatory capital. Capital absorbs the losses from bad loans. Higher capital levels make a bank more resilient during the next crisis. If there isn’t enough capital, the bank collapses and gets bailed out. But banks that increase their capital levels through retained earnings are stronger and can lend more.

This post was published at Wolf Street on Aug 2, 2017.

Biometric entry/exit tracking of US citizens

We were invited to a briefing session today at U. S. Customs and Border Protection (CBP) headquarters: ‘an information sharing session and open dialog … with external privacy stakeholders’ to discuss ‘recent enhancements to CBP’s biometric exit initiatives’ and ‘CBP’s implementation plans for a biometric exit system’.
Although we weren’t able to make it to Washington for today’s meeting, we have many questions about CBP’s ongoing (and illegal, as discussed below) photographing of the faces of US citizens entering the US, and the agency’s plans to expand the current (also illegal) trials of exit photography to include most or all US citizens leaving the country.
We look forward to another chance to quiz CBP officials about these programs and their (lack of) legal basis. More importantly, we hope that members of Congress and the public will ask hard questions about these programs if regulations or legislation are proposed that would purport to authorize them.
We share the general concerns raised by others about the use of biometric information such as facial photos (mug shots) for suspicionless dragnet surveillance of any travelers. The right to leave any country is explicitly guaranteed by international treaty (Article 12 of the ICCPR) as a human right independent of citizenship.

This post was published at Papers Please on August 1, 2017.

Share-Buybacks & Dividends Eat 100% of Bank Earnings, Crimp Lending, Constrain Economy: FDIC’s Hoenig to Senate

‘The real economy has little to gain, and much to lose.’
When tighter regulations were imposed on the banks after the Financial Crisis, the largest among them, the very ones that threatened to bring down the financial system, began squealing. Those voices are now being heard by Congress, which is considering deregulating the banks again. In particular, they claim that current capital requirements force banks to curtail their lending to businesses and consumers, and thus hurt the economy.
Nonsense! That’s in essence what FDIC Vice Chairman Thomas Hoenig told Senate Banking Committee Chairman Mike Crapo and the committee’s senior Democrat, Sherrod Brown, in a letter dated Tuesday, according to Reuters. The senators are trying to find a compromise on bank deregulation.
If banks wanted to increase lending, they could easily do so without lower capital requirements, Hoenig pointed out.
Rather than blowing their income on share-buybacks or paying it out in form of dividends, banks could retain more of their income, thus adding it to regulatory capital. Capital absorbs the losses from bad loans. Higher capital levels make a bank more resilient during the next crisis. If there isn’t enough capital, the bank collapses and gets bailed out. But banks that increase their capital levels through retained earnings are stronger and can lend more.

This post was published at Wolf Street on Aug 2, 2017.

Could You Please Explain How This Differs….

…. from Payola, which the government went after in spades in years gone by?
(Under U. S. law and FCC regulations, Payola is illegal on radio, but those laws do not apply to digital streaming platforms.) According to a 2015 Billboard article, a major-label marketing executive confirmed that pay-for-play is (or was) definitely happening.’According to a source, the price can range from $2,000 for a playlist with tens of thousands of fans to $10,000 for the more well-followed playlists.’ And many are already calling the platform’s new ‘Sponsored Songs’ endeavor a 2017 incarnation of payola.

This post was published at Market-Ticker on 2017-07-30.

The Feds Are Terrified Of Cryptocurrencies… But They’re Powerless To Stop Them

The federal government is no match for innovation. This is something lawmakers have always known, and it is the reason state and federal regulations exist. But innovation, by its very nature, will always find a way around those regulations, resulting in the implementation of more regulations for creative minds to learn to evade – which they will. This results in the over-regulation we see in America today.
Nothing scares the government more than something it can’t control, and the Securities and Exchange Commission (SEC) revealed this week that it is terrified of cryptocurrencies – as well it should be. See, all those lawmakers and bureaucrats sitting around regulating everything depend on taxpayer money to pay their salaries so they can keep writing regulations. Since cryptocurrencies allow people to keep all of their money, this is a big problem for the lawmakers. Soon, people may even start to realize they can buy, sell, and trade freely without any government intervention. The horror.

This post was published at Zero Hedge on Jul 30, 2017.

Spot The Conflict(s): This Strip-Club Operator Pays Sidoti $40,000 A Year To Cover Its Stock

We’ve spent a lot of time of late discussing Europe’s new MiFID II regulations that will go into effect in January 2018 and require investment banks to charge institutional clients separately for trading commissions and research. As we’ve noted (here and here), initial offer prices are coming in relatively high at around $450,000 per bank…all of which led us to the following conclusions:
Of course, the logical takeaway from these exorbitant offering prices, if they hold, is that institutional clients will ultimately be forced to consolidate their vendors…translation, so long to the small independent research shops. Meanwhile, investment banks will be forced to control costs by trying to focus on writing reports that people actually read (vs. the 1% hit rate they have today). All of which means that those shrinking analysts pools are about to completely collapse. Alas, it seems that we may have been a bit premature in our prediction of an early demise for independent research shops, at least if Sidoti and Rick’s Caberet has anything to say about it. In light of the new regulations that will undoubtedly disadvantage his research firm, Peter Sidoti has embraced a whole new, fundamental-transformed research business model that he hopes will save his business…charging the companies he covers for research about themselves. More from Bloomberg:
With the future of equity research looking shakier than ever, one boutique U. S. firm is betting its turnaround on getting paid by a different customer: the company being covered.

This post was published at Zero Hedge on Jul 28, 2017.

eCONomy of SCAM

It’s often said that there is an economy of scale to larger operations, and this forms the basis on which people think that mergers often lead to efficiency improvements and thus benefit consumers and the economy in general.
But those who have run a business have seen a far less-pleasant side — one that is never talked about on Tout TV, irrespective of the particular channel you might be on.
It’s simply this: In a nation where the law is routinely ignored by executives and others size simply means you get to rip people off through illegal acts that a smaller competitor wouldn’t dream of attempting.
When I ran MCSNet I saw this sort of crap on occasion with certain suppliers and others with whom I did business. A few times I was able to stick my boot up someone’s ass and neuter the impact that it was going to have on my firm but doing so required my inner ******* to be prominently displayed. But there were other times that the entity doing it simply didn’t give a damn; they had bought off the right people or were simply smug in their seats, knowing that nobody was going to go to jail in their outfit and thus the outcome was a middle finger in my face, laws and regulations be damned.

This post was published at Market-Ticker on 2017-07-28.

Barclays Seeks $455,000 For ‘Gold’ Equity Research Package; Includes ‘Field Trips’ And ‘Occasional’ 1×1’s

Literally no one knows the true ‘value’ of equity research, not even the investment banks that are selling it. Up until now, equity research has been treated as a ‘freebie’ given away to institutional clients in return for trading commissions but that is all about to change thanks to the European Union’s MiFID II regulations, which require asset managers to separate trading commissions from investment-research payments.
Unfortunately, at least for the Investment Banks of the world, while the cost of generating equity research may be substantial, it turns out that the true ‘value’, as defined by institutional clients’ maximum willingness to pay for reports, may be much less. Which is shocking given the creativity required to constantly generate new variations of daily reports politely suggesting that you “Buy The Fucking Dip.”
Be that as it may, with deadlines right around the corner, 2018 offer prices for equity research in Europe are starting to roll in and we suspect there may be a little sticker shock among institutional clients who are used to having unlimited access to all research in return for placing a few trades each year. Just a few weeks ago we noted that Credit Agricole offered their ‘Premium Research Package’ for the bargain basement price of 400,000 Euros. Nomura, on the other hand, played the volume game by giving away their “BTFD” reports for just $134,000 a year.

This post was published at Zero Hedge on Jul 27, 2017.

How the ‘Wild West’ of the Internet Will Be Won

National defense is one of a government’s core responsibilities. The pursuit traditionally has played out on land, over water and, since the 20th century, in air and space. But today, cyberspace is emerging as the latest theater of national defense as governments around the world take more of their critical functions and day-to-day operations online. And the internet is such a recent phenomenon that, unlike the other theaters of defense, it lacks international agreements and institutions to govern it.
At least for now. To address the pitfalls in the current regulatory system (or lack thereof) New York State’s Department of Financial Services will begin enforcing a new set of cybersecurity regulations Aug. 28. Financial services firms in New York by that time will have had 180 days to bring their operations into compliance with the new measures, which first took effect in March. The regulations are broad, requiring companies to have a cybersecurity program with policies on protecting data, restricting access, maintaining awareness of attacks and responding to them – all things that require a chief information security officer to oversee their implementation. By adopting the new rules, the State of New York has joined a growing movement among governmental entities to start holding companies and private citizens more accountable for their own cybersecurity. The wave of regulation promises to usher in a new era in the internet’s development – and in the age-old debate over how far the government should go to advance national security interests.

This post was published at FinancialSense on 07/26/2017.

See, It’s All A Scam

It is illegal under FTC regulations to display a “suggested retail price” that never, in fact, was a price you sold at, or which exceeds the actual “suggested retail price” the manufacturer provides.
Not only is this illegal at a federal level it is a rank violation of state consumer protection statutes, which bar deceptive practices.
Now it appears Amazon got caught doing exactly that on “Prime Day”, and screwed you in the ass if you bought products during their so-called “annual sale”:
Jason Jacobs, founder of Remodeez, a small company that specializes in non-toxic foot deodorizers and other odor stoppers, says he had an agreement with Amazon since 2015 on a suggested retail price of $9.99 for his products and was shocked after the tech giant almost doubled that on Prime Day to make it look like people were getting a discount, when they were actually paying full price.
‘They showed the product at $15.42 and then exed it out to put ‘$9.99 for Amazon Prime Day.’ And on the final day, the price was like $18.44. So, we put a support ticket in right away and I rallied some friends through social media to go to their complaint board and complain,’ Jacobs tells FOX Business.

This post was published at Market-Ticker on 2017-07-25.

MAN BUILDS PARK STAIRS FOR $550 AFTER CITY GIVES $65,000 ESTIMATE

Toronto – City officials in Toronto are upset over the fact that a resident took it upon himself to fix a problem the government was slow to deal with – and he did it for a fraction of the cost. From Canada’s CTV News:
‘A Toronto man who spent $550 building a set of stairs in his community park says he has no regrets, despite the city’s insistence that he should have waited for a $65,000 city project to handle the problem. The city is now threatening to tear down the stairs because they were not built to regulation standards.’
Adi Astl, a retired mechanic, says he was tired of watching his neighbors take spills down the steep path that leads to the community garden, so he bought the materials and set out to do it himself. With the help of a homeless man he hired, Astl completed the job in a matter of hours.

This post was published at The Daily Sheeple on JULY 21, 2017.

Democrats Urge Antitrust Action Against Amazon Over Whole Foods Deal

In the wake of their embarrassing electoral defeat in November, Congressional Democrats are turning against the wealthy tech benefactors who bankroll their campaigns. To wit, a group of 12 Democratic Congressman have signed a letter urging the Department of Justice and the Federal Trade Commission to conduct a more in-depth review of e-commerce giant Amazon.com Inc.’s plan to buy grocer Whole Foods Market Inc., according to Reuters.
Rumblings that Amazon is engaging in monopolistic business practices resurfaced last week when the top Democrat on the House antitrust subcommittee, David Civilline, voiced concerns about Amazon’s $13.7 billion plan to buy Whole Foods Market and urged the House Judiciary Committee to hold a hearing to examine the deal’s potential impact on consumers.
Making matters worse for the retailer, Reuters reported earlier this week that the FTC is investigating the company for allegedly misleading customers about its pricing discounts, citing a source close to the probe. The letter is at least third troubling sign that lawmakers are turning against Amazon, even as President Donald Trump has promised to roll back regulations, presumably making it easier for megamergers like the AMZN-WFM tieup to proceed.

This post was published at Zero Hedge on Jul 22, 2017.

Fact-checking the FAQs on ID to fly

In May and June of 2017, several new FAQs about ‘requirements’ for travel on common-carrier airlines were posted on TSA.gov and DHS.gov:
‘Identification’ (TSA.gov) ‘Frequently Asked Questions: REAL ID’ (TSA.gov) ‘REAL ID Frequently Asked Questions for the Public’ (DHS.gov) Statements about current and future ID ‘requirements’ similar to those on these websites have also appeared on official signs in some airports.
It should go without saying that neither government websites nor informational signs in airports create legal rights or obligations or can be relied on as authoritative statements of the law.
Federal law is contained in the US Constitution, international treaties duly ratified by the US in accordance with the US Constitution, the US Code, and US Public Laws. Federal regulations are contained in the Code of Federal Regulations. The Freedom of Information Act requires that binding Federal agency rules, regulations, and orders of general applicability be published in the Federal Register.
If you want to know what the law says, you need to read the law, not press releases from government agencies or anyone else (including us!).

This post was published at Papers Please on July 20th, 2017.

New Healthcare Bill Will Include Cruz-Lee Amendment And $45 Billion To Fight Opioid Epidemic

While no one has seen the Senate’s revised healthcare bill as of yet, early indications suggest that it will include a version of a controversial amendment from Senators Ted Cruz (R-TX) and Mike Lee (R-UT) that has become a sticking point in the negotiations. Among other things, the amendment would allow insurers to sell plans that do not meet ObamaCare regulations if they also sell a plan that does meet those rules.
Called the “Consumer Freedom Amendment,” we highlighted the main points of the Cruz/Lee proposal last month:
The “Consumer Freedom Amendment” would leave existing ObamaCare plans on the individual market, while also allowing insurers to sell plans that don’t comply with requirements of the Affordable Care Act.
“What that does – it leaves existing plans on the market but it gives new options so that people can purchase far more affordable health insurance. It will enable a lot more people to be able to afford buying health insurance,” Cruz told The Hill on Thursday afternoon.

This post was published at Zero Hedge on Jul 13, 2017.

Wall Street: It’s More Corrupt Than You Can Imagine

If you rely on a Wall Street salesman to help you make your investment decisions, then you are a total idiot and you deserve what you get if you lose your shirt – from the interview below
SilverFarm.org invited me on to his podcast show to talk about what it was like to be a trader on a Wall Street institutional bond desk in the 1990’s. Back then corporate ‘social/political correctness’ was in an infancy but the compliance and risk management departments were still enforcing rules, regulations and risk standards. Today, if you offend someone with a remark, certain behavior, or even look at them the wrong way, you lose your job; if you violate securities laws, you get a bigger bonus – if you violate securities laws, compliance looks the other way.

This post was published at Investment Research Dynamics on July 13, 2017.