Trump

Brexit – Jonathan Pie does it again

Whether you’re a Remainer or Leaver, Jonathan Pie explains in his trademark profanity-laced way why the Brexit deal of UK PM Theresa May is such a dud. What is the point of having a referendum which garners the highest ever voter turn out only to throw it back in the faces of both sides? In what world would a collective constituency want their parliamentarians to vote for a deal that makes everyone worse off? Why did May fold to every EU demand? She should have channeled the leader across the pond as to how to negotiate with Brussels.

Last week the Bank of England (BoE) ditched its independence charter to aid-and-abet the PM by producing a document stating a “No Deal” Brexit would hit UK economic growth by 8%.  What a joke. Would the EU seriously try to stitch up the economy of the second largest car market for German auto makers? It is preposterous in the extreme. Obama threatened in 2016 that the 5th largest economy would be at the back the queue when it came to trade deals. Trump would happily move it to the front. Canada and Australia too…can the BoE honestly come up with credible reasons why the ROW would spurn the UK in unison to get to an 8% slump?

Why only now has the BoE discovered this potential economic apocalypse? After all, the scare stories leading into the referendum about how the UK would plunge into the abyss should “Leave” succeed have simply not manifested. None of it. Why believe it now when its forecasts have been so off reservation? After all it did not advise the HM Treasury not to dump all of its gold at the very bottom.

Yet the Brits aren’t so stupid to see the deal being offered is the only one going. They have heard Minister for European Parliament (MEP) Guy Verhofstadt demand that member states hand over more sovereign powers to the EU. They saw EC President Juncker stagger blind drunk across a NATO stage BEFORE the dinner. There was little doubt in their minds when they checked the ballot square as to what was at stake. A No Deal Brexit is the one that should be pursued. The EU has so many disaffected member states that it is the one that needs to play nice with the UK, not the other way around.

 

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Take this chart, which shows the level of apathy member states have to show up and vote at European Parliamentary elections. Were the Brits so gung-ho to stay in the EU, why have only one-third of Brits ever shown up to express their love and affection for federalism? Is it any surprise that Italy, Spain, France & Greece have shown similar disdain over time as the EU fails to deliver for them? Surely the trend since 1979 has shown the underlying mood of member state constituents about how they value EU membership.

Perhaps Verhofstadt put the Brexit discussion into perspective (from 6:20) – after member states ratified the May plan in 38 minutes (a sure sign it is a great deal for the EU) – when he stated the hope that in the not too distant future, “a new generation of British…decide to come back into the great political European family

Tells us all we need to know. This week will show beyond a doubt about whether the island nation will have the very democracy it has shed so much blood to defend will be protected.

As Baroness Margaret Thatcher said of Europe,

 “During my lifetime most of the problems the world has faced have come, in one fashion or other, from mainland Europe, and the solutions from outside it.”

Sir David’s 22,000 disciples won’t be able to sustain frequent flyer mile status

Yes Sir David Attenborough, we’re doomed if we look at history of the very people in place to save us. Not withstanding the 22,000 climate change disciples who have flown to Katowice, Poland to pay homage at the altar of the UNIPCC to cling on to each other hearing about their inevitable extinction. What a shame that instead of embracing technology and live-streaming COP24 to help us mitigate impending disaster, government funded frequent flyer mile status of climate apparatchiks takes precedence to saving us from all of these dangerous CO2 emissions.

Apart from the 100% certainty of me being screened for explosives at Sydney Airport (yet again today), the other is that the growth in air travel suggests that more and more people are happy to save the planet, provided that someone else offsets on their behalf. CM has long argued this position. Our consumption patterns dictate the “true” state of care of the environment. It hasn’t stopped SUV sales dead in their tracks and last year the IATA forecast that the number of airline passengers is set to DOUBLE by 2030.  Hardly the actions of those frightened by climate change.

Oh but you can offset your carbon footprint! In its 2017 Annual Report, Qantas boasts,

We have the world’s largest airline offset program and have now been carbon offsetting for over 10 years. In 2016/17, we reached three million tonnes offset.”

Carbon calculators tend to work on the assumption of 0.158kg CO2/passenger kilometre.

In the last 10 years Qantas has flown around 1 trillion revenue passenger kilometres. While the literature in the annual report denotes one passenger offsets every 53 seconds, the mathematical reality is simple – 2% of miles are carbon offset. So that means that 98% of people couldn’t care less. Would dispensing with frequent flyer programs cut emissions? These loyalty programs by their very nature encourage more travel. The more you fly the more you can fly for free!  Surely the IPCC should scream for a ban here. Dispense with first, business and premium economy to maximise passenger loads each flight. Apologies for the preamble.

While the US is not a signatory to Paris, 19 of the G20 are. The irony is that the non-signatory nation has seen its total emissions fall while many of the others have not. What value the ink on a pledge? No sooner had President Macron thrown stones at America, that he’s backed down and postponed a fuel tax hike for 6 months to save his city from burning down. There it is in a nutshell. We’re told if we don’t act now we’re doomed. So 6 months is a long time in “immediate” speak. What we do know this is classic smoke and mirrors by Macron. In 6 months the fuel tax will be all but forgotten. Virtue signaling Exhibit A scrapped. Why doesn’t anyone in the media pick on China? It has promised to increase emissions out to 2030 and is a signatory.

Sir David should get cold chills lifting a rock on the recent saga surrounding the NATO signatories where we can learn how worthless pen strokes can be. In 2006, NATO Defence Ministers agreed to commit a minimum of 2% of their Gross Domestic Product (GDP) to defence spending. This guideline, according to NATO,  “principally serves as an indicator of a country’s political will to contribute to the Alliance’s common defence efforts.” In 2017, only 5 of the 28 members outside the US have met the 2% threshold – Greece, Estonia, UK, Romania & Poland in that order. Despite Greece’s economic problems elsewhere, it manages to honour the deal. NATO Secretary General Jens Stoltenberg said “the majority [not all] of allies now have plans to do so by 2024.” 3 more are expected to hit the target in 2018. So for all the good will in the world, is POTUS wrong to call the other 19 members slackers that ride off the US taxpayer when so many of them are only likely to hit the target 18 years after ‘committing’ to it?

Alas, who doesn’t want to breathe clean air? The question is once all of the hysteria of 100m sea rises, forest fires (sharply down from 70 years ago & 90% caused by arson or accidents), hurricanes (nothing extraordinary in the data to show increases in ferocity) or sinking islands (sorry 80% of Pacific atolls/islands are stable or rising) are properly analysed what is the most efficient way to get there? Even Turkey wants to be downgraded to a developing nation in order to benefit from wealth redistribution on climate.

What a masterstroke if signatories to Paris are prepared to take on America’s share of saving the planet. American taxpayers can feel happy in the knowledge that other nations are paying for their NATO commitments by rebating them with tax credits on climate, all the while ruining their domestic competitiveness along the way.  Why does Trump need to Make America Great Again, when the majority of nations are prepared to do it for him? Economist Paul Krugman shouldn’t be calling climate skeptics “sinners” but “saints”

Flames-Elysées

Oh the irony. The mainstream media’s pin-up poster boy of globalization and its merits has slumped to a 26% popularity rating and rules a capitol in flames. Yet another dud prediction from those know-it-all scribes!

While journalists rarely miss a chance to embrace French President Macron for eviscerating Trump (47% popularity rating (NB Obama was 46% at the same point in his presidency)) for his refusal to sign the Paris Climate Accord, where is the admission that large swathes of French natives seem to agree with the elder statesman?

Let’s not kid ourselves. Setting fire to priceless art galleries, torching police cars and destroying national monuments like the Arc de Triomphe are hardly petty crime issues to be left to a moustache twiddling local police officer on a stroll though the neighborhood twirling a baton.

The press gladly slams Trump as a fool for his stance on global warming. Yet doesn’t Macron look the stupid one if his constituents are lashing out like this over his poorly thought out green schemes?

The irony is that total US emissions fell in 2017 and expected to be broadly flat for 2018. This despite not being tied to a global compact engineered by the biggest pack of self- serving, unelected demagogues on the planet – the U.N. Why are we listening to its environmental body, the IPCC, when it has been exposed numerous times for fraudulent misrepresentation of data and facts such that it has been forced to publicly retract such hysteria. Better to ask for forgiveness or hope the faithful will forget those hiccups, eh?

Why smash the US when those willing to be part of the Paris agreement – China and India – will crank up emissions to 2030 and beyond at much higher levels? The media stays deathly silent. Who are the real villains? Where is the outrage?

Embarrassing for Macron, even several of his first responders are also showing gross displeasure. A group of firefighters being honoured by a Macron official walked off parade in protest to the embarrassment of their captain. Some police removed riot helmets and lowered shields in front of the yellow vests. When a president loses control of state run security forces that is pretty grim.

When will the press admit they got Macron completely wrong? Popularity can only get one so far. Trudeau of Canada shows the same flaws. Utterly out of his depth. Virtue signaling works wonders for the press gallery but less for those that must bear the brunt of what bad policies ultimately create.

In summary, if the most hated political figure on the planet garners 90%+ negative news feeds, how is it a media darling can’t nudge much more than half his popularity? Who is the imbecile?

How many canaries in the coalmine do we need?

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CM has said for ages that President Trump risks being hoisted by his own petard if he continues to attribute the stock market to his leadership. It works both ways. Stock markets are suffering. Suck it up.

GM has announced it is pulling the plug on over 14,000 US workers (8,000 white collar, 3,300 blue-collar workers in Canada and another 2,600 in the US) and potentially closing  5 plants. Is this a surprise? The chart above shows the % year over year change of US car sales. It has been stepping down clearly since GFC. In September this year GM’s sales slumped 19% in before falling 5.5% in October. The brutal storm activity is unlikely to help November either.

This quote will live to haunt in the coming downturn – CEO Mary Barra said the company doesn’t predict an economic downturn any time soon and is making the cuts “to get in front of it while the company is strong and while the economy is strong,

50% of US corporations have a credit rating of BBB or less. We are at the sharp end of massive government sector recapitalization crowding out and companies with dodgy balance sheets (that have levered up to conduct massive buybacks to flatter EPS masking anemic earnings growth) won’t be given the same tight interest rate margin spreads come the next refinancing. Await the implosion.

Rising interest rates don’t help and credit markets wait like vultures over the likes of GE which is having a reality check over its $115bn of debt, negative equity and troubled restructuring. Credit rating downgrade have booted it from some funds so the stock is in the cross hairs. If it had any sense it would file for Chapter 11 to buy breathing space.

If you want to put some perspective on it, GE’s market cap in 2000 was $592bn and now is $65.8bn. Tesla is now worth $56bn.

GM is yet another canary in the coalmine

 

Liar, liar bush on fire?

As the old adage goes, there are lies, more lies and then there are statistics. Never a dull moment when a natural disaster and tragedy can be tied to Trump. While CM thought his comments the other week were highly inappropriate, it seems that the press now want to throw a ‘climate change’ angle as the main cause of the bushfires.

A study in the journal Science determined the global burnt area from fires, rather than growing, had declined by roughly 25% from 1999 to 2017. California wildfire data reviewed by the USFS  shows a trend that since the peak in 1980, there have been fewer and fewer wildfires in California. So no smoking gun (no pun intended) with climate change.

As pointed out last week, the budget of the US Department of Agriculture Forestry Service shows monies directed at wildland fire “preparedness” and “suppression” have risen 32% since he took office.

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So how are these fires being caused?

The Australian Institute for Criminology (AIC) noted over a 5 year study period that half of fires were deemed suspicious or deliberately lit. Another 35% were accidentally lit. So 85% were down to human factors, not climate. The statistics were based on data comprising on average 54,000 bush fires per annum. The US Department of the Interior (DOI) notes that 90% of wildland fires are caused by humans, 49% of that being deliberate.  So there is consistency in bushfire data across nations.

If CNN and others in the mainstream media did their homework they could have taken their other favourite form of social justice by pointing out the following facts. The AIC sees that while the data is somewhat sketchy that the most common profile of arsonists was “white male, mid-20s, patchy employment record, often above average intelligence, but poor academic achievement and poor social development skills…56% of convicted structural arsonists and 37% of bushfire arsonists in NSW had a prior conviction for a previous offence.

Had the simplest of research been done, rather than tie bogus claims that contradict pet activist causes, they could switch to identity politics instead.

Above all the political wrangling, spare a thought for those that have died, lost property and those  first responders dealing with the problem.

Does the data show Donald in the dumpster?

Midterm

This is a simple schematic of first term presidents and the results at the ballot box of their first mid term. Since 1910, the incumbent parties have invariably lost ground. More interestingly, Democrats had control of either/both House of Reps and Senate during Nixon, Ford, Reagan and Bush Sr – all Republicans. Republican Presidents Taft, Harding, Hoover, Eisenhower and Trump lost the House at the midterms. Truman, Clinton and Obama suffered the same fate for the Democrats.

Trump achieved the highest number of Senate seats taken by a first term Republican president for over 100 years. George W Bush achieved rising numbers for HoR/Senate  post 9/11 but only Democrats have achieved the feat – Woodrow Wilson, FDR and JFK. Perhaps the irrelevance of the outcomes in the mid-terms is that despite the floggings Wilson, Truman, Ike, Reagan, Clinton, Bush Jr and Obama all were comfortably reelected for a second term.

Given the headwinds Trump was facing from the mainstream media, his unorthodox outbursts, twitter tirades and so forth, the electorate didn’t grant the Democrats a huge gift  they were expecting. Even worse they gave Trump a bigger authority to appoint SC justices should an opportunity arise by bumping his numbers in the Senate. Not surprising given the shocking gutter level political theatre over Justice Kavanaugh, vindicated by  victims confessing they had lied.

The Democrats should still be concerned that the $70mn spent on Beto O’Rourke came to nothing.  Beyonce also endorsed Beto. Oprah endorsed Abrams in Georgia – who is likely to lose. Taylor Swift endorsed Bredesen – who also lost. All four candidates openly supported by Obama lost. So much for celebrity power swaying electorates. It probably had a counter effect.

Even worse, in Nevada a brothel owner and reality TV star won his race despite dying last month. It is hard to work out what is the bigger tragedy. Voting for someone dead or being the competing Democrat to lose to a dead person. A Republican is to be appointed to the seat by county officials.

We shouldn’t forget that the Republicans had the highest number of sitting member retirements at a first midterm in the House of Representatives for 88 years. 25 seats had a new face. Republicans won re-election as governors in New Hampshire, Vermont, Massachusetts and Maryland – three of them deep blue states. Where was the mainstream media on that?

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Turnout was good (for a mid term). 48.1% voted in 2018. In the last 100 years the average has been 41%. Only in 1966, did the first midterm of LBJ exceed this level at 48.7%. So much for either party causing a red or blue wave. Less than half of eligible voters showed up on November 6th 2018. More cared, but not enough.

Felons make for an interesting outlier subset. While it is hard to know their exact voting intentions, for the Gubernatorial in Georgia, would 219,431 felons have made a difference for Abrams? She trails Kemp by just under 100,000 votes. So if 55% of felons (the Georgia midterm turnout ratio) voted, 120,687 votes were up for grabs. Were it legal for Georgian state felons to vote, she would have been wise to campaign there.

Felons

Now that the Democrats have the lower house, one wonders why they have put Nancy Pelosi in charge of the House? This is possibly to be contested. Up to fifty Democrat congressmen might oppose her for Speaker. Trump couldn’t wish for a better adversary as her litany of gaffes will undoubtedly embarrass her party. Pelosi represents pretty much everything Americans have come to despise about the Democrats.

More worryingly, Maxine Waters is being put in charge of the Financial Services Committee. At a point in the cycle where financial acumen is probably most required, this is an embarrassment, made worse by her open calls for payback.

The Democrats need fresh faces. Ones that will look for bipartisan support. If the Democrats embark upon a cocktail of revenge politics and look to push for investigation after investigation in order to impeach Trump but end up with nothing they will be seen for what they are – a party completely self-absorbed with petty vendettas. The toxic Senate debacle should have given them warning enough that voters won’t tolerate more political roadkill like that going forward.  Yet Pelosi will likely use her subpoena powers to drag everything through the gutter instead of working to improve things for Americans. Failure here will only lead the electorate to conclude they wasted two years and gift wrap 2020 for Trump.

This mid-term election was anything but a slam dunk. Put aside personal hatred of Trump, look at the data and see that Americans did not write him off as many pundits predicted. It should be more scary to realise that he is probably more Teflon-Don than he was in 2016. Second biggest mid-term turnout in history, highest net gain of seats in the Senate in 100 years for a first term GOP president, record dollars thrown at Democrat candidates backed by Trump-hating billionaires. At the end of the day folks, this is just the data talking.

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How well do Americans know their Defense budget?

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The US spends more than the next 9 countries combined when it comes to defence. What is probably lost on many Americans is the spiraling cost of funding the veterans who served. The US is forecast in 2020 to spend almost as much on the Dept of Veterans Affairs (VA) as China does on military spending. The direct cost of wars in Iraq and Afghanistan has driven the indirect costs of treating those who served almost 5-fold since the war began. US politicians have passed increase after increase.  Have these increases been thought of in context of the trend? Or do annual increases just get signed off as a reflex action?

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If we put the VA budget next to the defence budget, the former has grown from 14.8% of the latter to around 29% between 2000 and 2020. The number of veterans receiving disability compensation has grown 2 million in 2000 to 4.3 million in 2016. A total of 7.2 million veterans are actively seeking services or payments from the VA, up from 5.5 million in 2000.

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Spending per veteran by priority group also reveals sharply higher costs. This is not an exhaustive list of priorities, but the main 7.

Priority 1

• Veterans with VA-rated service-connected disabilities 50% or more disabling
• Veterans determined by VA to be unemployable due to service-connected conditions.

Priority 2

• Veterans with VA-rated service-connected disabilities 30% or 40% disabling

Priority 3

• Veterans who are Former Prisoners of War (POWs)
• Veterans awarded a Purple Heart medal
• Veterans whose discharge was for a disability that was incurred or aggravated in the line of duty
• Veterans with VA-rated service-connected disabilities 10% or 20% disabling
• Veterans awarded special eligibility classification under Title 38, U.S.C., § 1151, “benefits for individuals disabled by treatment or vocational rehabilitation
• Veterans awarded the Medal Of Honor (MOH)

Priority 4

• Veterans who are receiving aid and attendance or housebound benefits from VA
• Veterans who have been determined by VA to be catastrophically disabled

Priority 5

• Non service-connected Veterans and non-compensable service-connected Veterans rated 0% disabled by VA with annual income below the VA’s and geographically (based on your resident zip code) adjusted income limits
• Veterans receiving VA pension benefits
• Veterans eligible for Medicaid programs

Priority 6

• Compensable 0% service-connected Veterans.
• Veterans exposed to ionizing radiation during atmospheric testing or during the occupation of Hiroshima and Nagasaki.
• Project 112/SHAD participants.
• Veterans who served in the Republic of Vietnam between January 9, 1962, and May 7, 1975.
• Veterans of the Persian Gulf War who served between August 2, 1990, and November 11, 1998.
• Veterans who served on active duty at Camp Lejeune for at least 30 days between August 1, 1953, and December 31, 1987.
• Currently enrolled Veterans and new enrollees who served in a theater of combat operations after November 11, 1998 and those who were discharged from active duty on or after January 28, 2003, are eligible for the enhanced benefits for five years post discharge.

Priority 7

• Veterans with gross household income below the geographically-adjusted income limits for their resident location and who agree to pay copays.

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Countries have an obligation to look after the troops that sustain injury, physical, mental or otherwise. The question is whether politicians are cottoning on to the mounting relative increase in healing the veteran community to the spending on weapons of war?

There are 19.6 million veterans in the US. By 2045 this is expected to dip below 12 million. With 2.1 million serving active duty military personnel and reserves, the overall costs of healing may not come down anytime soon.

What it does say is that there is a massive need to work out how to reduce the costs to the VA without impeding improving healthcare and benefits for veterans.