Chief Welfare Queen Frets Over ExImBank

The democratic welfare queen is a single white mom, with a kid.  The republican welfare queen is a millioniare.  Boehner frets for the latter:

"There are thousands of jobs on the line that would disappear pretty quickly if the Ex-Im Bank were to disappear. So I told the chairman he needs to come up with a plan," Boehner told reporters. "Because the risk is that if he does nothing, the Senate is likely to act. And then what?"

Well, Johnnie, that is the idea.  Thousands of non-market based jobs, once that crowded-out market based taxpaying jobs, those non-market based jobs would disappear, and market based jobs would replace those welfare queen jobs.  The economy begins to recover on a natural, organic basis.

Other jobs that disappear are yours and countless other hacks who are financed by welfare queens who have billions transferred to themselves by your ExImBank.

We all know it will not end, but it is important to back the kickback artists sweat when you need more money in an election year, which if not used, you can keep.

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Supervising Markets

After each market crash, the regulators reward themselves in two ways:

1. We did not see it coming.

2. We need new regulations (more power).

We need no regulators, for we have bloggers.  Free speech is all that is necessary, and it is sufficient, to have effective regulation.

Tyler Durden is easily providing all necessary supervision for USA markets at no cost to taxpayers:

And while we are delighted that yet one more alleged case of gold manipulation is now confirmed, we are curious if the CME, CFTC and DOJ will also prosecute instances of gold manipulation when the ultimate outcome is the price of gold going lower instead of higher, such as the one documented in “Vicious Gold Slamdown Breaks Gold Market For 20 Seconds“, “Stop Logic” Gold Slam Was So Furious It Shut Down CME Trading Again” and on countless other occasions most of which have been duly documented on this website.

Deregulate something.  Anything.  Feel free to forward this by email to three of your friends.

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Your Food Export Business Development

If your interest runs to exporting food,  after a little over a year of teaching this exporting food course, time to advance the project.  A cohort of enough people who have LCL MOQ FOB up to do so.

Specifically, there is the discipline of marketing the LCL MOQ FOB.  Since it takes no more than an hour of market research, plus about $3.00 in costs to engage a customer, I will be emphasizing the necessity to keep firing away with the sales letters.  As customers no one knew are discovered, these necessarily being ones who test new products, then a database of innovative and reliable buyers who welcome lcl moq fob offers may be formed.  

Along with this I am negotiating another trade show event in which exhibitors might "sublet' booth space, several independent companies in one booth.  Of course Ideal is to have your products in an importers booth overseas, but we start where we can.  In this case, the show is expressly chill food & logistics, a show devoted to the toughest problem in food trade!  (And naturally, it is held in Hong Kong.)

Regarding trade shows, feel free to email me for a .pdf on a "decision tree" of under what conditions and what capacity to join a trade show.  

As a follow-up to the course, I also offer a complimentary google hangout for cohort cross-encouragement.

Please encourage anyone you know who should take the course to sign up here...

http://seattleteacherscollege.net/exfoassmbu.html

I have a new session coming up May 19.

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Hostess Twinkies and Your Pension

Forbes has the "untold story" of how Hostess Twinkie was resurrected:

Twinkie's Miracle Comeback: The Untold, Inside Story of a $2 Billion Feast

Really?  Exactly what would happen was widely predicted, even I got it right.  And your pension is at risk the same way if circumstances are similar. Today:

But the liquidation had washed away everything. Yes, the company was gone, but so were the pension costs, the union contracts and the debt. It also unbundled the brands, allowing investors to carve out the best businesses. “We didn’t have to take on the factories or the routes,” says Metropoulos. “We didn’t have to take all the historical drags on the company.”

Yes, We all saw that coming.  Bust the unions, repudiate the unfunded pension liabilities, pawn off the unemployed to the welfare rolls, socialize the loss, pocket $2 billion. The earlier vulture funds bought Hostess to loot it, and when when the company was bankrupt, another set came in to "save" the company.

Moreover, the new business plan called for the same output using a fraction of the labor. The old Hostess dessert division required 9,000 employees and 14 factories to pump out just under $1 billion worth of cakes a year. The new plan called for 1,000 people and five plants (that number was soon cut to three as one was sold, another shuttered). William Toler, a veteran of Metropoulos turnarounds, was brought in as CEO.

8000 on the public dole, at least for a while.  Industrial bakers, replaced by robots. As long as usury is legally enforced, then all of this is absolutely legit.  Hostess would probably not exist except for usury, so the out-of-work employees ought not complain, but without usury we'd have a different allocation and investment pattern, one more stable.

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Craft Whisky & Rye & Traceability

On one hand you have fakers who refill bottles of Lafitte Rothschild with plonk and sell it for a ransom.  Then you have people calling factory distilled Whisky "craft" and ruining the business for everyone.

Some of those selling MGP-made whiskies, such as High West’s David Perkins, would like to see a new transparency in the business. John Bernasconi of New Mexico’s KGB Spirits says, “I would welcome more disclosure and honesty in the spirits industry.”
A good idea, since there’s no reason to expect the ocean of Indiana whiskey to dry up anytime soon. Finding itself at the heart of the craft whiskey craze, MGP has cranked up its production, including a growing slate of new whiskey recipes offering customers greater variety.

So what is the solution?  We all pay taxes to have new regulations promulgated and then pay taxes to hire enforcers?

Or how about people just put QR codes on their products that trace the product two ways:

1. Inbound - QR clicks tell the source of your click.  Are the patterns of clicks from the source consistent with distribution?  What does the information from the source tell you about customers?

2. Outbound - QR clicks tell these unknown end-users the story that cannot fit on the package, plus they verify whether the package in hand of that consumer then and there is legit.  The end-user gets instant verification. They call up your best advertisement.  You are able to engage the end-user.  Your product is picked up by other potential distributors, who contact you.

We can do all of that without regulations and enforcers and taxes.  And here is where anarchy comes in:  even after they promulgate the rules, hire the enforcers, tax us stupid, you overlook all that and do the QR strategy anyway.  Those who depends on the "enforcers" are at a disadvantage to you.

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The War On Cash Escalates

In deflation, the smart thing to do is to withdraw your cash from the bank and put it in a safety deposit box.  A no brainer.  Last week we heard Chase is forbidding cash in safety deposit boxes in some markets.  Now come the Swiss who are forbidding the withdrawal of cash to do so.

Indeed, although we all know that fractionally reserved banks literally don’t have the money their customers hold in demand deposits, the contract states clearly that customers may withdraw their funds at any time on demand. The maturity of sight deposits is precisely zero.So how come the unnamed “large bank” (they should have named it, just to see what happens…) is so bold as to break the law by refusing to pay out funds in a demand deposit? Note here that it is indeed breaking the law, as there is nothing in Swiss legislation that states that banks are allowed to refuse or delay servicing withdrawals from demand deposits upon request.

The writers have this wrong.  Yes, they are demand deposits, and yes they are fractional reserve which is fraud, but when you make a deposit to a bank, you lose title to the money.  You are giving them money to lend out, and the bank owns it.    You are as last-in-line unsecured creditor.   That is why banks have deposit insurance: there is nothing there, you can lose your stake, and you can sue, with all of the power of a unsecured creditor.

We have the rule of law, but people are betting their financial futures on an utterly delusional understanding of the law.

O well.  What goes around comes around.

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Euro Bonds at Negative Interest Up to $2 Trillion

Negative interest rates are spreading fast:

Here’s an astonishing statistic; more than 30pc of all government debt in the eurozone – around €2 trillion of securities in total – is trading on a negative interest rate.
With the advent of European Central Bank quantitative easing, what began four months ago when 10-year Swiss yields turned negative for the first time has snowballed into a veritable avalanche of negative rates across European government bond markets. In the hunt for apparently “safe assets”, investors have thrown caution to the wind, and collectively determined to pay governments for the privilege of lending to them.
On a country by country basis, the statistics are even more startling. According to investment bank Jefferies, some 70pc of all German bunds now trade on a negative yield. In France, it's 50pc, and even in Spain, which was widely thought insolvent only a few years ago, it's 17pc.

Your pensions are hammered two ways, the bonds are negative and the equities are in a massive bubble....  screeeech goes the ice alongside the Titanic.

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Remember Argentina's Debt?

Argentina has plenty of problems, but non-payment of vulture fund debt is not one of them.  She ahs been the object of blackmail and the smearbund, but she is unfazed:

"These papers they wrote were blown away by the wind and by reality. The truth is a few days ago Argentina returned to the capital markets, at reasonable rates, because we have honoured our debt, and we will continue honouring it. What we will never honour is international usury and scam,” she asserted on a nationwide broadcasted speech.
She went on to complain that back in 2014, "they pecked at Argentines’ heads and at Argentines’ economic expectations” with rumours that if the government didn’t reach a deal with vultures, “everything would fall down.”

note that...  we've been told over and over if anyone repudiates debt it is the end of the world.  Nonsense.  A few contributors to politicians would be wiped out, and others would clamor to take that place.

So it will be in time when hegemon repudiates what it owes to its devotees.  And the devotees who give tribute to hegemon will simply be replaced by others, one more flush.

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Usury in Canada

Here comes a Canadian who rejects the baking system, with an excellent explication of how things work worldwide:

It is important to realize that fiat currencies such as the Canadian dollar are not backed by anything tangible like gold. Rather, they are created out of thin air whenever a loan is made. As admitted by the Bank of England in March of 2014, "Commercial banks create money, in the form of bank deposits, by making new loans. When a bank makes a loan, for example to someone taking out a mortgage to buy a house, it does not typically do so by giving them thousands of pounds of banknotes. Instead, it credits their bank account with a bank deposit of the size of the mortgage. At that moment, new money is created."
Give yourself a moment to let this sink in. Banks do not need to attract deposits first in order to make loans. When you are borrowing money from the bank, you are not borrowing money deposited by someone else. Instead, it is your own borrowing that is creating the money that is being lent and which you will be expected to pay back (with interest).

I don't think having the state do what private banks do is much better, but to realize what the private banks do is wrong is a start.

We need to deregulate banking, so the force and fraud today is no longer protected by the state.  Then banks would be private and have to behave themselves.  We need a separation of bank and state.

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Arresting Bankers

We don't arrest bankers.  I agree.  But we do need truth commissions.

After several more years of legal travails with the German authorities, Schacht was finally cleared of all charges. He started a lucrative second career as an investment adviser to countries in the developing world and set up his own bank, Schacht & Co. Schacht even visited Israel, albeit inadvertently when his airplane stopped briefly at Lydda airport in 1951. Schacht and his second wife, Manci, wanted to stay on board but were taken to the airport cafeteria to have breakfast. The Schachts handed their passports to the Israeli police and were photographed by reporters. His wife was too nervous to eat, so Schacht ate her breakfast as well. A waiter asked in German how “Herr President” had enjoyed his breakfast, using Schacht’s Reichsbank honorific. The waiter told Schacht that he was from Frankfurt and missed his hometown. He asked for Schacht’s autograph, which Schacht provided. The Schachts left Israel with no problems, although a furor erupted in the Knesset, the Israeli parliament, when the news broke that Hitler’s banker had passed through the Jewish state without being arrested.

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ExImBank Follies

As the clock ticks down on reauthorizing the Export-Import Bank, an Australian satellite company facing bankruptcy provides 300 million reasons why the bank's taxpayer-enabled corporate welfare should end on June 30.

That's the sum in U.S. dollars of Export-Import Bank loans to NewSat, which has filed for Chapter 15 bankruptcy, thereby allowing the foreign borrower access to U.S. courts. The bank's board had unanimously approved NewSat's financing in 2012 and 2013. The loans were awarded for purchases from Lockheed Martin.

But in January, the private satellite company defaulted on a $21 million payment to Lockheed, The New American reports. And that “triggered an avalanche of defaults.”

But there have been other mixed signals from the satellite company.

An outside analysis of NewSat revealed lavish dinners and “out of control” travel and marketing costs, plus a fat salary and bonuses for CEO Adrian Ballintine even before bank financing had been completed, The New American reports. So much for due diligence.

Then there's reportedly about $400,000 in payments to a yacht company — so-called “marketing expenses” — that happens to be owned by Mr. Ballintine.

This is how the Export-Import Bank does business — by taking risks with public money that any private lender would reject? That's precisely why this bank should be put out of business.

Read more: http://triblive.com/opinion/editorials/8208235-74/bank-export-import#ixzz3YYQp9PtQ 


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Do You Believe $70,000 Minimum Wage?

You heard this story - 

Dan Price, founder and CEO of Gravity Payments, shocked everyone last Monday, including his 120 employees, when he announced that he would raise the minimum wage at his credit card processing firm to $70,000 a year

And here is his reasoning...

In 2010, he read a study published by two Princeton researchers declaring the happiness tipping point to be roughly $75,000; the authors said anyone making much less would be prone to emotional pain and general dissatisfaction."That had a big impact on me," Price says. So much so that he started crunching numbers, hoping to figure out a solution for his own employees.

Price is smart guy.  He knows one study is not science.  When was the last time you reorganized your life over a magazine article?  So he cut his salary from $930,000 and raised his lowliest worker to $70,000.

Price, the New York Times reports, drives a 12-year-old-Audi and isn't much for extravagances. He told them he will slash his own salary from nearly seven figures to $70,000 in order to actualize his new definition of minimum wage. He also told the Times he plans to direct a large chunk of his company's estimated $2.2 million in profit this year towards salaries.

Gravity is a credit card processing company, so he is an accessory to the banking industry.  He won "Entrepreneur of the Year" (what is that?) award last year, which celebrated him mightily, so he has a tremendous PR machine.

Remember: property, paycheck, pension and portfolio are all forfeit in credit deflation.  To cut his salary from $930,000 to whatever, and to distribute the estimated $2.2 million in profits is just to keep it from Uncle Sam.

The devil is in the details.  What happens if competition not paying $70,000 a head beats him on proce in a commodity service business?

Watch insider transactions closely.  He has mentioned he picked up new clients for this news, and perhaps he is primping for some untold move.

Charles Keating was notorious for paying his secretaries up to $250,000 a year (in todays dollars.)  So yes, this may sound cynical, but sometimes you have to behave very cynically to do the right thing.  Price may see the game is over, and is throwing out some crumbs (for how long does he actually need to cut checks in this amount to achieve his goals?)  but this strikes me as yet another  example of the smart escaping into anarchy from the chaos of hegemon.

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An Edifying Anarchist Essay

Ricardo sends shares this link:

Similarly, a freed society and freed market don’t guarantee that nothing bad would ever occur. Non-libertarians often ask libertarians what would happen with neglected and abused children or mistreated animals—the list of possible abhorrent acts is endless. Our interlocutors are unfazed by the fact that all societies have such problems, even those with the most activist governments. It’s always possible for unfortunate people to fall into the cracks, so it is no blemish on the libertarian philosophy that it can’t offer an ironclad guarantee against such things. All it can assure is that wrongdoing won’t be paid for by taxpayers (because no one will be a taxpayer). We anarchists can also assure that, for obvious reasons, no abuse will be committed by government officials.

Sounds like me I am told, and Reason magazine is fairly mainstream.  Good tos ee ideas making it forward.

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Would Capitalism Ever Allow A Hong Kong To Thrive?

Here is a fine success story from a territory the USA needs to emulate:

On paper, Lai’s early life would seem unlikely to produce a “real hero.” He was born in China the year before it fell under Mao Zedong’s dictatorial rule. Lai was smuggled out of the country and into Hong Kong at age 12. In the absence of child-labor laws, which would have ensured his deprivation there, too, Lai went to work in a garment factory for $8 a month. Fifteen years later, he bought his own garment factory and built it into the giant known as Giordano, now a leading international retailer. Lai’s boundless entrepreneurial zeal, free to operate within Hong Kong’s laissez-faire business environment, yielded jobs for thousands and consumer goods for millions.

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Is Communism is More Reliable for Business than Capitalism?

Comes HSBC, a Scottish company, with the news:

A Conservative spokesman declined to comment on HSBC's announcement, but said Britain's future membership of the EU was a decision for the British people.Labour's plans to raise taxes on banks if it comes to power may also influence HSBC. The bank is already expected to pay $1.5 billion under a UK bank levy this year, or about 7 percent of expected profits because it is taxed on its global balance sheet. That charge is up from $1.1 billion last year.

It takes 15 years to recover your money form a high rise.  In 1982 bets had to be made on whether Chinese Communists would leave Hong Kong along or not after the handover in 1997.  Jardine Mathison bet not, and move to the Caribbean.  Bad call. Hong Kong & Shanghai Bank (a Scottish company), (HSBC) bet yes, with a hedge.

HSBC announced in 1982 it was building a fantastic, futuristic new headquarters in prime real estate in Hong Kong Central. Very pleasing vote of confidence in Chinese stability after the handover.

Within a few years the building was constructed, and an odd thing it is.  It looks rather like a Erector Set Toy, like it could be taken down easier than it went up.  Well, it could.  The whole thing is drop in, bolt on, plug and play building.  Plus, HSBC bought a platform in Australia, which if need be, and HSBC took down this new building, shipped it to Australia and rebuilt it, they could.

So they bet, with a hedge.  If things went band, HSBC could pack up their building and take it away.

Another reason I like that bank so much.

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Central banks Now Buying Negative Yield Bonds

When the central bank bets on bonds that guarantee to lose money, should you notice?

The European Central Bank started buying covered bonds with negative yields as its asset-purchase program reduces the supply of the highly rated debt, according to two people familiar with the matter.
...
“The ECB has caused this situation by being a big buyer and has exacerbated the already negative net supply of covered bonds,” said Joost Beaumont, a fixed-income strategist at ABN Amro in Amsterdam. “If the ECB buys more, yields will go still lower and that’s going to affect the ECB itself.”
...

The ECB, which is also buying government bonds and asset-backed debt, has said it will buy negative-yielding securities up to its cash deposit rate of minus 0.2 percent.
...
“Supply in positive yields is getting scarce and the ECB may have no other choice to fulfill its targeted purchase volume than to buy negative-yielding bonds,” said Tobias Meyer, an analyst at Norddeutsche Landesbank in Hanover, Germany.

So deflation is a monetary event in which currency is destroyed, and herefore prices fall.  Credit deflation is a monetary event in which credit iss dtroyed and prices of things denomited in credit fall.   Seciurities are real estagte are largel denominated in credit.

Bu prices are rising in bot right now.  Yes, but at a negative interst rate, the tide has turned.  Negative .02 % interest is not an anomaly, it is just the start.  Not a warning signal for the bankers to adjust, the warning signal the bankers cannot adjust.

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