It was hard to imagine many people would support secession. Forget the fact that the cautionary lesson of the Civil War is top of mind for many people as we commemorate its 150th anniversary; just in terms of dollars and cents, who in their right minds would give up all the money they’ve already paid into the Social Security and Medicare systems? Besides, most states get more back from the federal government than they put in.
Then the results came in. You can see them for yourself here, and you can filter them any way you want—by age, region, income, party affiliation, etc. Any way you slice it, the data are startlingly clear: Almost a quarter (23.9 percent) of those surveyed said they were strongly or provisionally inclined to leave the United States, and take their states with them. Given the polling sample — about 9,000 people so far—the online survey’s credibility interval (which is digital for “margin of error”) was only 1.2 percentage points, so there is no question that that is what they said.
via One in four Americans want their state to secede from the U.S., but why? | Jim Gaines.
the proposed changes would lower the wealth tax threshold to $380,000 from $500,000. Those with assets of $500,000 to $1.5m would pay a 0.4 per cent annual rate; thos with $1.5m to $2.5m would pay 1.1 per cent; those with $2.5m to $4m would pay 2 per cent, and those with fortunes greater than $4m would pay 2.25 per cent. Those with capital of less than $380,000 will pay nothing.
via Colombia and the Piketty tax – beyondbrics – Blogs – FT.com.
China and Japan are heading towards military conflict, according to a majority of Chinese surveyed on ties between the Asian powers in a Sino-Japanese poll.The Genron/China Daily survey found that 53 per cent of Chinese respondents – and 29 per cent of the Japanese polled – expect their nations to go to war. The poll was released ahead of the second anniversary of Japan’s move to nationalise some of the contested Senkaku Islands in the East China Sea.
Relations between Japan and China have soured since Japan bought three of the tiny islands – which China claims and calls the Diaoyu – in 2012. Japan defended the move as an effort to thwart a plan by the anti-China governor of Tokyo to buy them, but China accused it of breaching an unwritten deal to keep the status quo.
According to the poll, 38 per cent of Japanese think war will be avoided, but that marked a nine point drop from 2013. It also found that a record 93 per cent of Japanese have an unfavourable view of their Chinese neighbours, while the number of Chinese who view Japanese unfavourably fell 6 points to 87 per cent.
via Majority in China expect war with Japan – FT.com.
A quick word from Lindau, where half the world’s Nobel economists are gathered on a beautiful island with cobbled streets on Lake Constance, looking out across the Alps. It is a Wittlesbach jewel. Christopher Sims – a monetary expert, who now thinks money indicators have been rendered “essentially obsolete” by modern finance – says it may be impossible to reverse deflation in the Western economies by any normal means, in which case we are in trouble.
He argues that the public (including investors) are convinced that there will have to be some sort of payback for all the debts accumulated during the great era of leverage and excess. They have “internalised” the prospect of future tax rises and spending that will make them feel poorer. Some 60pc of people in the US say they doubt there will be any government benefits for them when they retire, and 60pc of those already retired think their benefits will be reduced,” he said. This has powerful implications. Many of these people are retrenching pre-emptively, en masse, in most of the mature industrial economies. They are discounting a “future stream of primary surpluses”.
By the same token businesses are putting off investment and hoarding cash in anticipation of a hit to come. We may be deluding ourselves in thinking that companies will soon be confident enough to let rip with a fresh burst of spending and investment. They may just sit on their money for year after year.
If this is broadly true, it means that any use of fiscal stimulus will be neutralised by the countervailing actions of taxpayers, and may even be a net negative. Deficits become “deflationary”, contrary to standard textbook theory or populist assumptions, and threaten a self-fulfilling effect that becomes almost impossible to stop over time.
Prof Sims, who won the Nobel Prize in 2011 for studying “cause and effect in the macroeconomy”, says monetary policy cannot do the trick either once interest rates have dropped to zero. He dismisses the monetary effects of quantitative easing as trivial. At best, he says, QE is a bluff intended to show resolve and change psychology.
We may be caught in a trap. Demographics lie at the root of this malaise. The collective mind knows that the pension/welfare structure is untenable. The implicit promises made can never be upheld in societies with ballooning numbers of pensioners, depending on a static or shrinking work force. This will catch China too before long.
via Nobel guru fears it may be nigh impossible to stop deflation – Telegraph Blogs.
It sure looks like it is. It all comes down to interest rate differentials in my view. The US, out of the big three, the Euro Zone and Japan, is the only economy where we are even talking about higher interest rates. The other two are not there yet as growth is stagnant at best in those economies. Please do not misunderstand what I am saying here – I am not saying that interest rates here are going to rise anytime soon. I am saying however that if and when rates finally do begin to rise, traders are convinced that they will do so FIRST here in the US.
Today’s Construction data reminded currency traders of that fact.
Yesterday I mentioned that stubborn band of overhead chart resistance that has served to keep the Dollar’s upward progress in check. Today it finally blew right through that!
The ramifications for the commodity complex in general are all too well known by anyone who has been watching the markets over the last few years. Higher Dollar tends to equal Lower Commodity prices overall.
We are seeing that in the Goldman Sachs Commodity Index which continues to get pummeled lower. It just missed setting a fresh TWO YEAR LOW in today’s session especially with crude oil being obliterated. Crude has not been at these levels this year since the third week of January!
I think it bears repeating – were it not for geopolitical tensions in Ukraine, it is highly doubtful gold would be able to withstand this outside pressure. Gold needs an environment in which REAL rates are either flat or negative as there is very little opportunity cost to hold the metal under such circumstances. However, in an environment in which interest rates are likely to rise, and rise at a clip that will keep them above any incipient rate of inflation, gold is going to experience obstacles to a rise in its price level. Investors/traders are not going to lock up precious capital in an asset that throws off no yield and one that many do not see as necessary given the current lack of inflationary pressures.
Gold bulls will need to be cautious therefore and alert to any signs that geopolitical tensions surrounding Ukraine might be lessening. So far we are not seeing any drastic outflows from the GLD, ( not that its current levels of holdings are anything to be the least bit excited about ) but if we do begin to see such an occurrence, it will not augur well for a stronger gold price moving forward.
Based on the current data that we have, gold demand has been dropping off somewhat from last year’s torrid pace. If investors begin to more largely embrace the higher interest rate scenario, that is not going to help it.
via Trader Dan’s Market Views: Is the Dollar King Once More?.
excerpt from Warren Buffett’s 2011 interview in India. A member of the audience asks: “As we all know, you are an extremely intelligent person. At the same time, you are very disciplined with your investing approach. What makes Warren Buffett a great investor? Is it the intelligence or the discipline?”
Here is Warren’s response.
Warren: The good news I can tell you is that to be a great investor you don’t have to have a terrific IQ.
If you’ve got 160 IQ, sell 30 points to somebody else because you won’t need it in investing. What you do need is the right temperament. You need to be able to detach yourself from the views of others or the opinions of others.
You need to be able to look at the facts about a business, about an industry, and evaluate a business unaffected by what other people think. That is very difficult for most people.
Most people have, sometimes, a herd mentality which can, under certain circumstances, develop into delusional behavior. You saw that in the Internet craze and so on. I’m sure everybody in this room has the intelligence to do extremely well in investments.
Moderator: They’re all 160 IQs.
Warren: They don’t need it. I’m disappointed they haven’t sold off some already. The 160s won’t beat the 130s at all necessarily. They may, but they do not have a big edge. The ones that have the edge are the ones who really have the temperament to look at a business, look at an industry and not care what the person next to them thinks about it, not care what they read about it in the newspaper, not care what they hear about it on the television, not listen to people who say, “This is going to happen,” or, “That’s going to happen.”
You have to come to your own conclusions, and you have to do it based on facts that are available. If you don’t have enough facts to reach a conclusion, you forget it. You go on to the next one. You have to also have the willingness to walk away from things that other people think are very simple.
A lot of people don’t have that. I don’t know why it is. I’ve been asked a lot of times whether that was something that you’re born with or something you learn. I’m not sure I know the answer. Temperament’s important.
Moderator: That’s very good advice, to be detached from all the noise. You shouldn’t go with the herd.
Warren: If you don’t know the answer yourself don’t expect somebody else to tell you. If you don’t know the answer yourself and somebody else says they know the answer, don’t let that fact push you into coming to a conclusion about something that you don’t know enough to come to a conclusion on.
via What makes Warren Buffett a great investor? Is it the intelligence or the discipline? | Farnam Street.
is there any job that is “safe”?
via Humans Need Not Apply – YouTube.