Investors Should Be Worried

Global investors should be concerned about potential economic turmoil as the United States is embarking on a recession and the greenback continues to be unsound, says Jim Rogers, chairman of Rogers Holdings and bestselling author of “Hot Commodities.”

Rogers spoke with Bloomberg TV India on Tuesday and told the media outlet that the U.S. is “over-indebted” and maintains the largest amount of debt in the planet’s history.
He further explained that the U.S. dollar is not sound, and with potential turmoil on the horizon, investors believe that the U.S. dollar is a safe haven for them. This is wrong, says Rogers, who thinks the economic downturn will get worse and thus the dollar will grow and transform into a bubble. This is when he’ll sell the dollar and perhaps buy more gold or even the Chinese renminbi.

Read more

It’s Official: Over A Trillion Dollars A Year Will Be Added To The Debt During Obama’s Presidency

Michael Snyder

(RINF) – Under Barack Obama, the U.S. national debt has risen from $10,626,877,048,913.08 on January 20th, 2009 to $18,795,033,928,275.59 on December 21st, 2015.  That means that the debt that we are passing on to future generations has increased by 8.16 trillion dollars since Barack Obama was inaugurated.  There is still a little more than a year to go in Obama’s presidency, and it is already guaranteed that Obama will add more than a trillion dollars a year to the national debt during his presidency.  In fact, when you do the math, we are stealing more than 100 million dollars from future generations of Americans every single hour of every single day.  It is a crime of a magnitude that is almost unimaginable, and at this point it is mathematically impossible for the U.S. government to pay off all of this debt.  To say that we are in trouble would be a massive understatement.
And of course not all of the blame goes to Obama.  The Republicans have had control of the House of Representatives for all but two years while Obama has been in the White House, and they have gone along with all of this reckless spending.  Without the approval of the House, Obama could not spend a single penny, but the Republicans have consistently chosen not to stand up to him.  In fact, the Republicans in Congress just approved another massive 1.2 trillion dollar spending bill that essentially gave the Democrats every single thing that they wanted.  House Minority Leader Nancy Pelosi even admitted that the Republicans “were willing to concede so much” during the negotiations.
So why do we even have a Republican Party?  They always just go along with pretty much whatever the Democrats want anyway.  Why shouldn’t we just disband the Republican Party and let the Democrats completely run things?  How would Washington D.C. be any different if the Republicans didn’t even exist?
At this point, even Rush Limbaugh is completely disgusted with the Republican Party…

I have a headline here from the Washington Times:  “White House Declares Total Victory Over GOP in Budget Battle.” That headline’s a misnomer.  There was never a battle.  None of this was opposed.  The Republican Party didn’t stand up to any of it, and the die has been cast for a long time on this.  I know many of you are dispirited, depressed, angry, combination of all of that. But, folks, there was no other way this could go. Because two years ago when the Republican Party declared they would never do anything that would shut down the government and they would not impeach Obama, there were no obstacles in Obama’s way and there were no obstacles in the way of the Democrat Party.

Do you remember when Republican politicians were running around promising that they would defund Obamacare?
That didn’t happen.
Do you remember when Republican politicians were running around promising that they would defund Planned Parenthood?
That didn’t happen.
Do you remember when Republican politicians were running around promising that they would defund Obama’s refugee program?
That didn’t happen.
In this new spending deal, the Republicans got nothing.  It was a sham, a farce and a total insult to the American people.  Here is more from Rush Limbaugh…

It fully funds Planned Parenthood.  That, to me, is unforgivable, with everything now known about what goes on behind closed doors at Planned Parenthood, and that the federal government, led by a Republican Party, sees fit to pay for it.  It is beyond comprehension, and it is a total squandering of moral authority to fully fund the butchery at Planned Parenthood.  This spending bill fully pays for Obama’s refugee plans, fully.  This spending bill, this budget bill quadruples the number of visas Obama wants for foreign workers.  This is even a slap at American union workers.  Not the leaders.  The union leaders seem to be in favor of it, but blue-collar people, known as working people, have been sold down the river along with everybody else here.
This spending bill even fully pays for every dime asked for by Obama on all of this idiocy that’s tied up into climate change.  Everything Obama wanted, everything he asked for, he got.  You go down the list of things, it’s there.

Even after watching all of the undercover Planned Parenthood videos that came out over the past year, the Republicans in Congress still voted to fund the harvesting and sale of body parts from aborted babies.
And surveys have found that the American people support the continued funding of Planned Parenthood by about a 2 to 1 margin.  After everything that we have seen, the vast majority of Americans still want to continue giving those butchers hundreds of millions of taxpayer dollars a year.
No wonder so many people are comparing America to Nazi Germany these days.  We truly have become an exceedingly wicked nation.
We like to think that we are an “example” for the rest of the planet, but in reality the only example that we are is a bad one.  Our guilt has been put on display for all the world to see, and yet we just continue to race toward even more evil.
Not only did the Republicans not defund Planned Parenthood, the truth is that not a single pro-life amendment of any sort even got into the bill thanks to Paul Ryan.  The following comes from lifesitenews.com…

“The bill failed to include a single major pro-life policy rider, despite the requests of over 120 members of Congress and the disturbing revelations about Planned Parenthood brought to light this year,” said Congresswoman Diane Black, R-TN, who voted against the bill.
The House Freedom Caucus offered a series of amendments to the bill defunding Planned Parenthood, strengthening conscience protections for pro-life physicians and organizations, and ending all U.S. funding for the United Nations Population Fund (UNFPA). The House Rules Committee rejected these riders earlier this week, as Speaker Paul Ryan said he did not want conservative amendments added to the bill that would drive away his Democratic colleagues.
The committee also rejected an amendment to increase vetting of refugees who enter the United States from the terrorist hotbeds of Syria and Iraq, which had previously passed the House, with 47 Democrats adding strong bipartisan support.

Like I said, the Republicans completely capitulated, just like they always do.
Now the U.S. national debt is nearly double the size that it was just before the last financial crisis struck, and our leaders continue to borrow and spend as if there is no tomorrow.
Perhaps they have convinced themselves that there will never be any consequences for acting so foolishly.
Perhaps they believe that in the end everything will turn out okay somehow.
Perhaps they are able to rationalize the theft of more than a hundred million dollars an hour from future generations of Americans.
But nothing can erase what they have done to us.  The promising future that our children and our grandchildren should have had has been completely wiped out, and the leading edge of the greatest economic crisis that any of us has ever known is now upon us.
If we had done things differently, things wouldn’t have had to turn out this way.  But now the die is cast, and we are all going to pay a very high price for the mistakes that have been made in Washington.

Visit Michael’s blog

Debt lesson not learned: Balance sheets will get more unbalanced in 2016.

View image on Twitter

Follow

Holger Zschaepitz @Schuldensuehner

Debt lesson not learned: Balance sheets will get more unbalanced in 2016. http://www.breakingviews.com/21230054.article?h=0fbd8a815090e706b871a083cc524890&s=2 …

8:38 PM - 28 Dec 2015

 

The lesson that too much debt is dangerous has sunk in. But for many companies, the corollary proposition, that too little cash is a killer, seemingly hasn’t. If there’s one thing investors ought to remember heading into the eighth year since the financial crisis, it’s that without healthy cashflows, balance sheets won’t stay balanced for long.
Trading house Glencore is a prime example. As commodity prices continued to plunge in 2015, its net debt of around $30 billion, which investors had previously tolerated, started to look scary. The shares went into freefall. As cashflows dwindled, so did the amount of debt investors would stomach, forcing boss Ivan Glasenberg to hack the dividend, sell assets, cut production and target reduced borrowings of $18 billion.
Weak commodities will wreak more havoc, but rising U.S. interest rates could make matters worse. That’s especially true for emerging markets, which have loaded up on U.S. dollar debt. A currency mismatch is one factor weighing on Brazilian oil major Petrobras. Borrowings in U.S. dollars by non-financial companies had reached $2.3 trillion in developing countries by the end of June, according to the Bank for International Settlements. Mexican, Indonesian and South African borrowers have all roughly doubled their dollar debts since 2009.

http://www.breakingviews.com/21230054.article?h=0fbd8a815090e706b871a083cc524890&s=2
 

What Are The Chances For Peace in 2016? — Ron Paul

Each year more than one trillion dollars goes up in smoke. More accurately, it is stolen from the middle and working classes and shipped off to the one percent. I am talking about the massive yearly bill to maintain the US empire. Washington’s warmongers have sold the lie that the military budget has been gutted under President Obama, but even when the “Sequester” was in effect military spending continued to increase. Only the pace of increase was reduced, not actual spending.

None of this trillion dollars taken from us is spent to keep us safe, despite what politicians say. In fact, this great rip-off actually makes us less safe and more vulnerable to a terrorist attack thanks to resentment overseas at our interventions and to the blowback it produces.

The money is spent to maintain existing conflicts and to create new areas of conflict overseas that in turn feeds the demands for more military spending. It is an endless cycle of theft and deceit.

Billions were spent not long ago overthrowing an elected government in Ukraine and provoking Russia. A new Cold War is a bonanza for the military industrial complex, the pro-war think tanks, and the politicians. NATO is on the move in eastern Europe, placing heavy weapons right on Russia’s border and then blaming the Russians when they complain about the rising militarism. NATO military exercises on Russia’s border have increased and become more confrontational.

In the Middle East, more billions have been spent attempting to overthrow the secular government of Syria over the past five years. The big winners in this grand scheme have been the Islamist extremists, who are funded directly and indirectly by the US and its allies. NATO is planning to go back into Libya, an admission that its 2011 “liberation” of that country has been a disaster.

In Asia, the US empire challenges and provokes China, sending military ships and aircraft into territory China claims in the South China Sea. How much will they continue to escalate before China gets fed up?

The more money sent to the Pentagon and other parts of the Washington war apparatus, the more danger we are in.

Meanwhile, almost all of the presidential candidates promise more military spending and more war if they are elected. Did no one tell them we are broke and making enemies fast with our interventions? Do they think Fed-created money will really continue to fuel the US empire indefinitely?

What are the prospects for a u-turn toward peace and prosperity in 2016? We must be realistic. Presently the numbers are not on our side. But the good news is we do not need a majority to succeed in our fight for peace and liberty. We need only a dedicated and uncompromising critical mass to make great headway.

What can we do to work for peace in 2016? First we must tune out the lying propaganda served up by the US mainstream media. We must educate ourselves so that we can help educate others. We can be sure to tune in and support alternative sources of news and analysis like the Ron Paul Liberty Report, LewRockwell.com, Antiwar.com, and many others. We can tell others about the wealth of truth available to those who seek and question. We must not compromise and never accept the lesser of two evils.

If the people demand peace, the politicians will follow. Let’s demand peace in 2016!

The Best of Ron Paul

Copyright © 2015 by RonPaul Institute. Permission to reprint in whole or in part is gladly granted, provided full credit and a live link are given.

Previous article by Ron Paul: Feeling Unsafe?

By Ron Paul

The Ron Paul Institute

Jim Rogers Urges Investors to be Worried About Financial Crisis When Fed Raises Rates For Third Time

Global investors should be concerned about potential economic turmoil as the United States is embarking on a recession and the greenback continues to be unsound, says Jim Rogers, chairman of Rogers Holdings and bestselling author of “Hot Commodities.”

Rogers spoke with Bloomberg TV India on Tuesday and told the media outlet that the U.S. is “over-indebted” and maintains the largest amount of debt in the planet’s history.

He further explained that the U.S. dollar is not sound, and with potential turmoil on the horizon, investors believe that the U.S. dollar is a safe haven for them. This is wrong, says Rogers, who thinks the economic downturn will get worse and thus the dollar will grow and transform into a bubble.

This is when he’ll sell the dollar and perhaps buy more gold or even the Chinese renminbi.

“I expect nearly all economies around the world to slow down. In America, we have had nearly six or seven years without a correction in the economy or the markets. It is long overdue. Normally, we have corrections every four to seven years in the United States. So we are overdue,” Rogers stated.

“The debt is going higher and higher. Many of our customers are slowing down — China is slowing down and Japan is in recession. Now, I certainly expect more slowdown to come worldwide.”

Rogers talked once again of the Federal Reserve’s 25 basis points move last week. He noted that he wasn’t impressed and thinks the various moves performed by the Fed lead to more harm than anything else for the U.S. economy.

“The Fed is just made up of bureaucrats and academics. They don’t know very much,” he said. Rogers added that the first rake doesn’t mean much. When the Fed raises rates for the third time then “you have to start worrying.” As part of the Federal Open Market Committee’s (FOMC) statement last week, the Fed expects to increase interest rates a couple of more times in 2016.

“If the Fed raises rates three or four times, then it is usually all over for the stock market. So just keep watching, be worried and be prepared,” he averred.

So just what is Rogers’s investment strategy? To hold gold and silver.

“I expect gold to go under $1,000 an ounce. What does that mean for silver — $12 or $10 an ounce — I haven’t figured it out. But certainly under a $1,000 for gold at which point I hope I am smart enough to take my hedges off and buy a lot of gold — whether its $950 or $900, I don’t know,” he concluded.

At the time of this writing, gold is trading at just under $1,070, while silver is around $14.25.

John McCain Blows Lid as US-Russian Sanctions Fall Apart – US Orders Russian Rockets for New NSA Spy Satellite

21st Century Wire says…
Back in October, 21WIRE reported one massive dilemma for Washington and the NSA.
Currently, the NSA’s new GPS III national security satellite is sitting in a United Launch Alliance (ULA), co-owned by Boeing and Lockheed Martin, hanger somewhere between Alabama and South Texas.
The NSA has two choices: wait three years for Jeff Bezos to develop his Blue Origins rocket engine for fellow tech mogul Elon Musk’s Space X (or through Musk’s own ‘Falcon Heavy’ project which is six years off), or get their new spy satellite up in the air now – with the help of the Russians and their RD-180 engine.
There is one one bigger problem in the background: Washington DC is meant to be leading sanctions against Russia – over the downing of MH17, which the Russians did not shoot down.
What is the common thread in all of this? Look no further the nest of an old hawk…
Interestingly, it is Senator John McCain (R-AZ) who is closely allied to rogue militants in Kiev who, according to all available evidence, are more likely to have shot down flight MH17 back in July 2014.

Despite protests to the contrary, the deal looks to be going through. Not surprisingly, McCain is going nuts (again).
Back in June, McCain unleashed a scathing rant against his fellow Republicans in Washington’s anti-Russian ‘alternative media’ megaphone website The Daily Beast, screaming at the time:
“Why in the world would anyone think we would want to continue dependency on Russian rocket engines, which traces up to the corrupt mafia that is around Vladimir Putin?” McCain said to The Daily Beast. “The American people should ask a question of these appropriators: Why are you taking care of Vladimir Putin’s cronies?”
Does McCain have some financial or strategic interest in ULA’s domestic competitors who are vying for this same deal to supply rockets?
Or is the geriatric dog of war simply upset because his own Cold War-style diplomatic house of cards is now starting to collapse?
Certainly, this latest breach will send ripples back across the Atlantic as European nations currently suffering under the US-led sanctions regime will be left wondering, “what’s the point?”
Regardless, this latest debacle has only exposed another fundamental flaw in Washington’s half-baked ‘Russian sanctions’ project…

RT.com
The US has ordered 20 additional RD-180 rocket engines from Russia, days after US Congress lifted the ban on the use of Russian engines to get American ships into space. However, the move has been lambasted by some politicians in Washington.
United Launch Alliance announced that it placed an order for more RD-180 rockets to be used by Atlas V launch vehicle, on top of 29 engines that the company has ordered before US sanctions against Russia were introduced over Crimea last year.
Under last year’s National Defense Authorization Act of 2015, the Department of Defense is prohibited from signing new or modifying existing contracts for launches using engines designed or manufactured in Russia.
READ MORE: ‘Why fund Putin’s cronies?’ McCain slams fellow Republicans for lobbying Russian space engines
The move brought a fierce response from Senator John McCain, who accused Washington of double standards, saying, “This is the height of hypocrisy.”
“How can our government tell European countries and governments that they need to hold the line on maintaining sanctions on Russia, which is far harder for them to do, when we are gutting our own policy in this way?” McCain said on Wednesday, as cited by the Washington Post.
“How can we tell our French allies in particular they shouldn’t sell Vladimir Putin amphibious assault ships as we have [told them], and then turn around and try to buy rocket engines from Putin’s cronies?”
The order placement to Russian company Energomash comes after Congress passed the fiscal 2016 budget, which includes a provision that allows the US to continue purchasing the Russian made engines. “ULA has ordered additional Atlas engines to serve our existing and potential civil and commercial launch customers until a new American-made engine can be developed and certified,” the company said in a press release. The new batch of engine deliveries would start once ULA received all of the previous order, according to ULA spokeswoman Jessica Rye who said that eight RD-180 engines were received by the company this year.
To break the dependency on Russian engines, last year ULA has partnered up with Blue Origin to develop the BE-4 LOX/methane engine to replace the RD-180. Dynetics and Aerojet Rocketdyne have also offered their AR-1 hydrocarbon-fueled rocket engine as replacement for the Russian counterpart.
However, the US has realized they are unable to continue their space program without Russian assistance, according to Aleksandr Stadnik, Russia’s trade representative to the US…

Gold As A Historical Store Of Financial Value, The Practical Impossibility Of Solving The Problems In Greece & Fiat Currency Withdrawals.

Published on Dec 13, 2015

Stefan Molyneux and G. Edward Griffin look at the central banking scam, the crisis in Greece, the inevitability of economic collapse, the possible collapse of the Euro, widespread panic in the Eurozone, Gold as a historical store of financial value, the practical impossibility of solving the problems in Greece and fiat currency withdrawals.

To purchase “The Creature from Jekyll Island” go to: http://www.fdrurl.com/JekyllIsland
Freedomain Radio is 100% funded by viewers like you. Please support the show by signing up for a monthly subscription or making a one time donation at: http://www.fdrurl.com/donate
Get more from Stefan Molyneux and Freedomain Radio including books, podcasts and other info at: http://www.freedomainradio.com

Am Ex Card Holders Stumble Across Points

Some American Express customers found themselves on the receiving end of many more Membership Rewards points than expected.
The company declined to specify how many customers got extra points or how many additional points landed in some accounts. “An extremely small percentage of our membership awards accounts were affected,” said Backs, who advised account holders with questions to call the number on the back of their cards.
AmEx, which values the points at 2.5 cents a piece, could charge customers for using points erroneously placed in their accounts, said Leff, who advises those in that situation to wait and see what AmEx does.

Read more at CBS money watch

Image credit Republica

Austerity has caused 8-yr homelessness peak, says Corbyn

Labour Party leader Jeremy Corbyn has called the UK’s “soaring homelessness” a “disgrace,” blaming the Conservative government’s austerity drive for the magnitude of the problem, after homelessness figures hit an 8-year peak.

“It’s a disgrace that young and often vulnerable people are among the hardest-hit from the government’s cuts to welfare – cuts that make it far harder for people facing homelessness to get back on their feet,” he said.
“We must all fight for a society that is more decent, secure and fair, and where no one facing homelessness is cast aside.”

 
This piece was reprinted by RINF Alternative News with permission or license.
Via RT.

DuPont To Lay Off 25% Of Delaware Workforce

The cuts keep coming, and this one is going to hurt as DuPont lays off  25% of their Delaware workforce according to this dinosaur media report.

DuPont will eliminate about 1,700 jobs in Delaware by early 2016.
CEO Ed Breen announced the layoffs in a memo sent to DuPont’s roughly 6,100 Delaware employees on Tuesday – just four days after Christmas.
Several hundred of those DuPont employees will receive notice in January that their jobs, while others were notified earlier this month. DuPont officials declined to say how many workers still have yet to be notified their job is being eliminated.
All 1,700 workers are expected to be let go by the end of March.
Breen said he chose to announce the full scope of the job cuts now – even before many employees have received a pink slip – because DuPont is required to detail the layoffs in a state filing due by Dec. 31. That notice is required under the federal Worker Adjustment and Retraining Notification Act, which demands that employers give 30-days notice of a mass layoff that do not result from a plant closing.
“Especially given that we are in the middle of the holidays, we would have preferred to wait until individual notifications were complete before reporting the full local impact,” Breen wrote in the memo. “… I wanted you to hear the difficult news – directly from me …”
Although DuPont will eliminate more than 1 in 4 of its remaining positions in Delaware, the company is not expected to shutter any of its local properties, company officials said. Those facilities include DuPont’s Chestnut Run Plaza headquarters, where about 3,000 employees now work, the Experimental Station in Alapocas with about 2,500 workers or the Stine Haskell Research Center, near Newark, which has about 600 employees.
DuPont officials declined Tuesday to say how many jobs would be cut from those specific facilities.
Each Delaware worker laid off by DuPont will receive a separation package, career placement services and training allowances based on years of services, company officials said.
The impeding job cuts are part of DuPont’s $700 million global cost savings and restructuring plan announced Dec. 11. That restructuring already has resulted in jobs cuts, consolidated divisions and and halted projects.
DuPont ultimately hopes to eliminate 5,000 positions worldwide, 10 percent of its global workforce, in an effort to slash $1.6 billion from its budget by 2017. The company has approximately 54,000 employees worldwide.
Most of those layoffs are expected to occur ahead of DuPont’s proposed merger with Dow Chemical Co., slated for completion sometime in 2016. Under the merger, Dow and DuPont would form DowDuPont, a $130-billion behemoth, and then separate into three independent companies: agriculture and chemicals, material sciences and specialty products.
“DuPont’s announcement today is deeply disappointing, especially to the thousands of Delawareans who helped this company grow and succeed for generations,” Gov. Jack Markell said in a statement. “DuPont’s number one asset is its people, and the innovations that the company has produced during its storied history are a testament to the quality of those people. For those affected by today’s announcement, they should know that the State will do all that it can in the coming months to assist them as they evaluate new opportunities.”
DuPont on Tuesday also announced plans to locate its post-merger specialty products business in Delaware, although an exact location has not yet been determined. That business will include several current DuPont business units, such as nutrition and health, industrial biosciences, safety and protection, and electronics and communications, along with Dow’s electronic materials business.
“I am pleased that DuPont has committed to basing its Specialty Products business here,” Markell said. “We look forward to doing all that we can to promote the success of that business and will continue to urge DuPont and Dow to see the value of locating other businesses here in Delaware where they have grown and succeeded in the past.”
Continue reading

The Dark Side Of A Record $5 Trillion In Mergers: Hundreds Of Thousands Of Imminent Layoffs

Yesterday afternoon, Dealogic announced the for the first time in history, global announced M&A volume in 2015 would surpass $5 trillion. This record eclipses by 9% the previous all time high of $4.6 trillion set during the previous market bubble year of 2007.
The report adds that there were 10 $50 billion M&A transactions announced in 2015 worth a combined $798.9bn. That's five deals more than the previous record high activity set in 1998, 1999, and 2014. US targeted M&A ($2.5tr) accounts for half of 2015 volume and seven of the top 10 transactions.
Breaking down by total by sector, Healthcare ($723.7bn) and Technology ($713.1bn) were the leading sectors. The biggest deals announced in 2015 were Pfizer and Allergan's pending $160bn merger, followed by Anheuser-Busch InBev's $117.4bn bid for SABMiller, two of only eight $100bn+ transactions announced on record.
Below we show the table of the Top 10 deals is below, as well as a simplified chart:



Many have debated what has unleashed this unprecedented merger frenzy, even if the answer is simple: record low costs of debt have been used by management teams not only as a source of funding for record buybacks (pushing the acquiror's stock as a merger "currency" to all time highs), but also to fund ever greater portions of the merger consideration. The result are M&A EV/EBITDA multiples in the high teens, 20s, and even 30s (or higher) as hundreds of billions of investment grade debt have been issued to fund "financial engineering", be it buybacks or M&A, just not prefunding future revenue growth via spending on CapEx.
As the following chart from BofA shows, just over the next few months there is at least half a trillion in in deals that have to be funded with investment grade debt: for the sake of these management teams, they better pray that the IG market does not suffer a comparable shut down as what happened to the junk bond market over the past two months.


Funding needs notwithstanding, the immediate result of this epic merger scramble has been a year of declining corporate revenues as well as a profit and earnings recession. The not so immediate result has been a silent layoff wave (focused initially in the energy sector) as increasingly more well-paying careers are lost and replaced with minimum wage food service and retail, often times part-time, jobs.
However, none of that accounts for the layoff shock that is about to be unleashed as hundreds of billions of M&A deals go from announced to closed over the coming months, as the "pro-forma"management (and shareholders) demand to see cost-savings and bottom line results.
Where are "results" going to come from? Why "synergies" of course, Wall Street's favorite word for mass layoffs.
To be sure nobody knows just how many workers will be fired, however in a recent white paper by the Ivey Business Journal titled "Merger Synergies Through Workforce Reductions", we read, not surprisingly, that "the greater the workforce consolidation, the more attractive the economic results. For example, with a 30-per-cent workforce reduction in Option 3, economic measures such as the payback period and annual operating savings are far more prominent than in Option 1. Most notably, with a 30-per-cent versus a 10-per-cent staff reduction, the EBITDA margin improves by 500 basis points."
Taking another look at the top 10 M&A deals of 2015, we can quickly calculate that at just these 10 combined companies, the number of pre-synergy workers will be a massive 1.14 million employees. We used pre-synergies because over the coming year, the full extent of the layoffs synergies, will be revealed. Taking the conservative estimate from the Ivey "synergy" paper and extrapolating "only" of total employees will be laid off as management teams scramble to boost payback periods and operational savings, this means that between these 10 companies alone, there will be over 110,000 soon to be laid off workers.


These are 110,000 (or more) well-paying jobs, which in the current economy will not be easily duplicated and which will leads to even more minimum wage "job gain" in the coming year.
Putting this in perspective, this accounts for only ten of the deals, amounting for a little over 10% of the total M&A deal volume of 2015.
There is a silver lining: for every million in lost jobs, Wall Street bankers will make about a billion in M&A fees, which after all is what really matters.
Finally, perhaps cementing the irony of all of the above, is a forecast we made several weeks ago when looking at the 5th largest deal on the list above: the merger of Dow Chemical and DuPont. This is what we said:
Moments ago 10% of our prediction was validated with the following news:

DuPont Co. plans to cut 1,700 jobs in its home state of Delaware as the agriculture-and-chemical giant pursues $700 million in cost savings ahead of its planned merger with Dow Chemical Co.

In a letter to DuPont staff on Tuesday, Chief Executive Ed Breen also sought to soften the holiday blow, announcing that Wilmington, its hometown of 213 years, will be the headquarters of one of three planned spinoffs following the Dow tie-up.

The layoffs, which represent nearly a quarter of DuPont's roughly 7,000 employees in Delaware, come as DuPont consolidates some of its scientific research operations and moves corporate functions to other locations that are closer to its customers, Mr. Breen said.

“The effect in Delaware will be significant, reflecting the urgent need to restructure our cost base and, as part of that effort, reduce our corporate overhead costs so that we can remain competitive,” he wrote. Delaware state law required DuPont to file a notice of the layoff plans by Dec. 31, forcing the company to outline it publicly before all affected individual employees were told the news, Mr. Breen wrote.

At least the company was kind enough to wait until after Christmas before handing out the first of many rounds of pink slips.

A Crisis Worse than ISIS? Bail-Ins Begin

Source: Ellen Brown

While the mainstream media focus on ISIS extremists, a threat that has gone virtually unreported is that your life savings could be wiped out in a massive derivatives collapse. Bank bail-ins have begun in Europe, and the infrastructure is in place in the US.  Poverty also kills.

At the end of November, an Italian pensioner hanged himself after his entire €100,000 savings were confiscated in a bank “rescue” scheme. He left a suicide note blaming the bank, where he had been a customer for 50 years and had invested in bank-issued bonds. But he might better have blamed the EU and the G20’s Financial Stability Board, which have imposed an “Orderly Resolution” regime that keeps insolvent banks afloat by confiscating the savings of investors and depositors. Some 130,000 shareholders and junior bond holders suffered losses in the “rescue.”
The pensioner’s bank was one of four small regional banks that had been put under special administration over the past two years. The €3.6 billion ($3.83 billion) rescue plan launched by the Italian government uses a newly-formed National Resolution Fund, which is fed by the country’s healthy banks. But before the fund can be tapped, losses must be imposed on investors; and in January, EU rules will require that they also be imposed on depositors. According to a December 10th article on BBC.com:

The rescue was a “bail-in” – meaning bondholders suffered losses – unlike the hugely unpopular bank bailouts during the 2008 financial crisis, which cost ordinary EU taxpayers tens of billions of euros.
Correspondents say [Italian Prime Minister] Renzi acted quickly because in January, the EU is tightening the rules on bank rescues – they will force losses on depositors holding more than €100,000, as well as bank shareholders and bondholders.
. . . [L]etting the four banks fail under those new EU rules next year would have meant “sacrificing the money of one million savers and the jobs of nearly 6,000 people”.

That is what is predicted for 2016: massive sacrifice of savings and jobs to prop up a “systemically risky” global banking scheme.
Bail-in Under Dodd-Frank
That is all happening in the EU. Is there reason for concern in the US?
According to former hedge fund manager Shah Gilani, writing for Money Morning, there is. In a November 30^th article titled “Why I’m Closing My Bank Accounts While I Still Can,” he writes:

[It is] entirely possible in the next banking crisis that depositors in giant too-big-to-fail failing banks could have their money confiscated and turned into equity shares. . . .
If your too-big-to-fail (TBTF) bank is failing because they can’t pay off derivative bets they made, and the government refuses to bail them out, under a mandate titled “Adequacy of Loss-Absorbing Capacity of Global Systemically Important Banks in Resolution,” approved on Nov. 16, 2014, by the G20’s Financial Stability Board, they can take your deposited money and turn it into shares of equity capital to try and keep your TBTF bank from failing.

Once your money is deposited in the bank, it legally becomes the property of the bank. Gilani explains:

Your deposited cash is an unsecured debt obligation of your bank. It owes you that money back.
If you bank with one of the country’s biggest banks, who collectively have trillions of dollars of derivatives they hold “off balance sheet” (meaning those debts aren’t recorded on banks’ GAAP balance sheets), those debt bets have a superior legal standing to your deposits and get paid back before you get any of your cash.
. . . Big banks got that language inserted into the 2010 Dodd-Frank law meant to rein in dangerous bank behavior.

The banks inserted the language and the legislators signed it, without necessarily understanding it or even reading it. At over 2,300 pages and still growing, the Dodd Frank Act is currently the longest and most complicated bill ever passed by the US legislature.
Propping Up the Derivatives Scheme
Dodd-Frank states in its preamble that it will “protect the American taxpayer by ending bailouts.” But it does this under Title II by imposing the losses of insolvent financial companies on their common and preferred stockholders, debtholders, and other unsecured creditors. That includes depositors, the largest class of unsecured creditor of any bank.
Title II is aimed at “ensuring that payout to claimants is at least as much as the claimants would have received under bankruptcy liquidation.” But here’s the catch: under both the Dodd Frank Act and the 2005 Bankruptcy Act, derivative claims have super-priority over all other claims, secured and unsecured, insured and uninsured.
The over-the-counter (OTC) derivative market (the largest market for derivatives) is made up of banks and other highly sophisticated players such as hedge funds. OTC derivatives are the bets of these financial players against each other. Derivative claims are considered “secured” because collateral is posted by the parties.
For some inexplicable reason, the hard-earned money you deposit in the bank is not considered “security” or “collateral.” It is just a loan to the bank, and you must stand in line along with the other creditors in hopes of getting it back. State and local governments must also stand in line, although their deposits are considered “secured,” since they remain junior to the derivative claims with “super-priority.”
Turning Bankruptcy on Its Head
 Under the old liquidation rules, an insolvent bank was actually “liquidated” – its assets were sold off to repay depositors and creditors. Under an “orderly resolution,” the accounts of depositors and creditors are emptied to keep the insolvent bank in business. The point of an “orderly resolution” is not to make depositors and creditors whole but to prevent another system-wide “disorderly resolution” of the sort that followed the collapse of Lehman Brothers in 2008. The concern is that pulling a few of the dominoes from the fragile edifice that is our derivatives-laden global banking system will collapse the entire scheme. The sufferings of depositors and investors are just the sacrifices to be borne to maintain this highly lucrative edifice.
In a May 2013 article in Forbes titled “The Cyprus Bank ‘Bail-In’ Is Another Crony Bankster Scam,” Nathan Lewis explained the scheme like this:

At first glance, the “bail-in” resembles the normal capitalist process of liabilities restructuring that should occur when a bank becomes insolvent. . . .
The difference with the “bail-in” is that the order of creditor seniority is changed. In the end, it amounts to the cronies (other banks and government) and non-cronies. The cronies get 100% or more; the non-cronies, including non-interest-bearing depositors who should be super-senior, get a kick in the guts instead. . . .
In principle, depositors are the most senior creditors in a bank. However, that was changed in the 2005 bankruptcy law, which made derivatives liabilities most senior. Considering the extreme levels of derivatives liabilities that many large banks have, and the opportunity to stuff any bank with derivatives liabilities in the last moment, other creditors could easily find there is nothing left for them at all.

As of September 2014, US derivatives had a notional value of nearly $280 trillion. A study involving the cost to taxpayers of the Dodd-Frank rollback slipped by Citibank into the “cromnibus” spending bill last December found that the rule reversal allowed banks to keep $10 trillion in swaps trades on their books. This is money that taxpayers could be on the hook for in another bailout; and since Dodd-Frank replaces bailouts with bail-ins, it is money that creditors and depositors could now be on the hook for. Citibank is particularly vulnerable to swaps on the price of oil. Brent crude dropped from a high of $114 per barrel in June 2014 to a low of $36 in December 2015.
What about FDIC insurance? It covers deposits up to $250,000, but the FDIC fund had only $67.6 billion in it as of June 30, 2015, insuring about $6.35 trillion in deposits. The FDIC has a credit line with the Treasury, but even that only goes to $500 billion; and who would pay that massive loan back? The FDIC fund, too, must stand in line behind the bottomless black hole of derivatives liabilities. As Yves Smith observed in a March 2013 post:

In the US, depositors have actually been put in a worse position than Cyprus deposit-holders, at least if they are at the big banks that play in the derivatives casino. The regulators have turned a blind eye as banks use their depositors to fund derivatives exposures. . . . The deposits are now subject to being wiped out by a major derivatives loss.

Even in the worst of the Great Depression bank bankruptcies, noted Nathan Lewis, creditors eventually recovered nearly all of their money. He concluded:

When super-senior depositors have huge losses of 50% or more, after a “bail-in” restructuring, you know that a crime was committed.

Exiting While We Can
How can you avoid this criminal theft and keep your money safe? It may be too late to pull your savings out of the bank and stuff them under a mattress, as Shah Gilani found when he tried to withdraw a few thousand dollars from his bank. Large withdrawals are now criminally suspect.
You can move your money into one of the credit unions with their own deposit insurance protection; but credit unions and their insurance plans are also under attack. So writes Frances Coppola in a December 18th article titled “Co-operative Banking Under Attack in Europe,” discussing an insolvent Spanish credit union that was the subject of a bail-in in July 2015. When the member-investors were subsequently made whole by the credit union’s private insurance group, there were complaints that the rescue “undermined the principle of creditor bail-in” – this although the insurance fund was privately financed. Critics argued that “this still looks like a circuitous way to do what was initially planned, i.e. to avoid placing losses on private creditors.”
In short, the goal of the bail-in scheme is to place losses on private creditors. Alternatives that allow them to escape could soon be blocked.
We need to lean on our legislators to change the rules before it is too late. The Dodd Frank Act and the Bankruptcy Reform Act both need a radical overhaul, and the Glass-Steagall Act (which put a fire wall between risky investments and bank deposits) needs to be reinstated.
Meanwhile, local legislators would do well to set up some publicly-owned banks on the model of the state-owned Bank of North Dakota – banks that do not gamble in derivatives and are safe places to store our public and private funds.
_____________________
Ellen Brown is an attorney, founder of the Public Banking Institute, and author of twelve books including the best-selling Web of Debt. Her latest book, The Public Bank Solution, explores successful public banking models historically and globally. Her 300+ blog articles are at EllenBrown.com. Listen to “It’s Our Money with Ellen Brown” on PRN.FM.

Silver Depleted Within 20 years? | Bix Weir

China Moving Forward As West Flounders: First Domestically Manufactured Magnetic Levitation Train Begins Trial Run

A trial run of China’s first domestically designed and manufactured magnetic levitation line in Changsha, Hunan Province, began on Saturday.

In Latest Blow To Apple, Taiwan Makers Cut iPhone Shipments Up To 10%

 

The lowered factory shipments are in line with the latest forecasts of iPhone shipments in the consumer-end market, said the sources, adding that most market research firms have lowered overall iPhone device shipment estimates for the fourth quarter of 2015 to 72-75 million units, compared to 76-78 million units predicted earlier, indicated the sources.

 

Furthermore, overall iPhone shipments for the first quarter of 2016 have also been lowered to 52-56 million units from the previous estimate of 58-60 million units. The revised figures also represent a decline of 12-15% as compared to a year earlier.

 

Bloomberg Sponsored Content

Facing declining demand, some makers in the iPhone supply chain have reduced overtime shifts since November and could move the Lunar New Year holidays ahead of schedule, indicated the sources.

 

Foxconn Electronics' iPhone manufacturing plant in Zhengzhou, China has been indicated as one of the plants which are likely to shift their Lunar New Year holiday schedule, said the sources.

 

However, Foxconn said that operations at its Zhengzhou plant remain normal and it will implement the holiday schedule in accordance with related regulations as well as the willingness of its workers.

For now, traders seem willingly oblivious to the news...


Of course this is not the first knock for Apple in recenet weeks:

Apple "Faces Risk Of Inventory Correction": Three Channel Checks Confirm Deteriorating iPhone Sales

JPM Takes The Axe To iPhone Sales Estimates, Says Consensus Is 10% Too High

Apple Cuts Latest iPhone Prices By 16% In India As AAPL Stock Re-Enters Bear Market

The rich will get richer while two million more children slide into poverty, 2030 economic forecast suggests

Children will be disproportionately affected by a distribution of wealth favouring the rich Getty Images

A joint study by Landman Economics and the Fabian Society says policies introduced since the election will increase long-term poverty

Another two million UK children will be living in poverty in 15 years time if the Government continues its current policies, a new analysis has said.
The calculations by Landman Economics and the Fabian Society however suggest that the incomes of the richest will increase significantly over the same period.
The study of policies introduced since the 2015 general election and their impact over the long-term if left unchanged found that the proceeds of any growth will overwhelmingly be distributed to the country’s richest, the report’s authors say.
They point out that cuts to in-work benefits scheduled to come in with the new Universal Credit system will reduce the income of the poorest workers, and that the National Living Wage will do little to offset these cuts.

The total number of people in poverty is expected to rise by 3.6 million with 1.9 of that increase being children.
This amounts to 22 per cent of all people living in poverty, up from 20 per cent.
The incomes of the bottom 10 per cent in society are expected to rise by only £90 by 2030 – while the incomes of the top 10 per cent per cent are expected to be  £14,500 higher.
Previous analyses and official figures have shown some Government policies having a detrimental effect on the welfare of the poorest.
Rough sleeping rose by 55 per cent under the Coalition government, according to official figures. David Cameron said during the election campaign it was down, however.
Food bank use also grew dramatically during Mr Cameron’s first five years, with a million people now reliant on the charitable orgnaisations. The Government says this is because it is signposting more people to the services, including at Jobcentres.
The Government has met its child poverty targets but Work and Pensions Secretary Iain Duncan Smith has moved to scrap the current measure. Ministers claim the current target does not accurately reflect material poverty.
Andrew Harrop, the general secretary of the Fabian Society, said the distribution of wealth was a political choice the the Government made.
“If decisions made this year go unchanged, more British children will be hungry at Christmas 2030 than today,” he said.
“We will live in a country where food banks are an entrenched part of everyday life, not a response to short-term crisis. Is that the gift we want to leave the next generation?
“In the 15 years up to 2009 the incomes of rich and poor increased in proportion to each other because the Labour government chose to share the proceeds of growth.

“In contrast, the current government has chosen to cut taxes for people near the top of the income distribution and cut social security for people at the middle and bottom.”
The Chancellor George Osborne has delayed the introduction of its cuts to in work benefits by cancelling cuts to tax credits laid out in the summer budget.
However, similar cuts are scheduled to apply to Universal Credit – a new benefits system the Government wants all claimants to eventually use.
Alan Milburn, who chairs the Social Mobility and Child Poverty Commission, on Sunday warned that the current policy on in-work benefits would “merely defer the pain” for low-income families.
“As the economy strengthens, the Government should look to reverse cuts to universal credit so that this key welfare reform can improve work incentives. It should take the opportunity in 2016 to set out a timetable for doing so,” he said.

Inflation hits 44pc in Ukraine amid economic collapse

War-torn economy sees prices soar as it plans to ease capital controls following IMF bail-out 

 

Inflation will soar this year as authorities fight back economic collapse 

By Mehreen Khan

Inflation will hit 44pc in Ukraine this year, as the embattled economy has seen prices soar amid economic collapse.

Consumer prices have hit eye-watering levels in 2015, according to the country's central bank governor. Inflation averaged 24.9pc in 2014.

Valeria Gontareva, of the National Bank of Ukraine, said authorities were aiming to get inflation to around 5pc by 2019.

The war-torn economy, which has been plunged into crisis following conflict with neighbouring giant Russia, will also start to gradually lift capital controls as it begins to receive disbursements of bail-out cash from international lenders, said Ms Gontareva.

Ukraine is set to receive around $9bn in rescue cash in 2016, including $4.5bn from the International Monetary Fund, $1.5bn from the EU, and $1bn loan guarantee from the United States, which will be released in the first quarter of next year.
• Kremlin on collision course with Ukraine over debt haircut
The economy has also lumbered under capital controls which limit the purchasing of foreign exchange in a bid to protect the collapsing value of the hryvnia.

Bail-out cash will also help boost Ukraine's dwindling foreign exchange reserves, which have steadily grown over the last months to stand at $13.3bn in December.
Ukraine has been locked in a stalemate with Moscow over the repayment of a $3bn bond. Kiev defaulted on the debt earlier this month after Russian authorities refused to take part in a private sector debt haircut.
The issue has also stoked tensions with the IMF in Washington, which changed its lending rules to continue providing aid to governments who fall into arrears.
But Ukraine's central bank chief said there was now no "hindrance" to the release of IMF aid to the country in 2016.
"The IMF mission has agreed everything, they don't need to come to Kiev anymore."
  Photo: MINDAUGAS KULBIS/AP

Oil bears bet on $25, $20 and even $15 a Barrel in 2016.

View image on Twitter

Follow

Holger Zschaepitz @Schuldensuehner

#Oil bears bet on $25, $20 and even $15 a Barrel in 2016. http://bloom.bg/1QVRehp 

Oil speculators are buying options contracts that will only pay out if crude drops to as low as $15 a barrel next year, the latest sign some investors expect an even deeper slump in energy prices.
The bearish wagers come as OPEC’s effective scrapping of output limits, Iran’s anticipated return to the market and the resilience of production from countries such as Russia raise the prospect of a prolonged global oil glut.
“We view the oversupply as continuing well into next year,” Jeffrey Currie, head of commodities research at Goldman Sachs Group Inc., wrote in a note on Tuesday, adding there’s a risk oil prices would fall to $20 a barrel to force production shutdowns if mild weather continues to damp demand.
The bearish outlook has prompted investors to buy put options — which give them the right to sell at a predetermined price and time — at strike prices of $30, $25, $20 and even $15 a barrel, according to data from the New York Mercantile Exchange and the U.S. Depository Trust & Clearing Corp. West Texas Intermediate, the U.S. benchmark, is currently trading at about $36 a barrel.
The data, which only cover options deals that have been put through the U.S. exchange or cleared, is viewed as a proxy for the overall market and volumes have increased this week as oil plunged. Investors can buy options contracts in the bilateral, over-the-counter market too.
http://www.bloomberg.com/news/articles/2015-12-22/extreme-oil-bears-bet-on-25-20-and-even-15-a-barrel-in-2016