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Marathon Man Newz / The Road To Rudy's Ruin
« on: January 23, 2019, 01:27:27 PM »
I think Rudy's bizarre behavior as of late is a mixture of fear and loathing. Fear of going down the way of Michael Cohen...and loathing of the Donald, who has to be the worst horses ass to represent that a lawyer could ever have. He's between a rock and hard place, and the best thing he could hope for is to be fired by The Donald. Giuliani never seemed dumb when he was younger, but he sure seems out of his depth here.

“Trump Is Screaming. He’s So Mad at Rudy”: Giuliani’s Fate Is Uncertain After Botched Interviews
As Giuliani’s unforced errors pile up, former West Wing officials and 2016 campaign veterans are privately debating what’s gone wrong with Rudy.

    Gabriel Sherman

January 22, 2019 7:05 pm

Every time Rudy Giuliani opens his mouth in front of a reporter, something bad seems to happen. Donald Trump’s beleaguered lawyer has, over the past few weeks, given one disastrous interview after another. The latest fiasco came Monday, when Giuliani participated in a rambling Q&A with The New Yorker’s Isaac Chotiner. After telling Chotiner he only had a moment before he took a shower, Giuliani unspooled a series of bizarre responses, at one point in the conversation even admitting he worried that his legacy would be that “he lied for Trump.”

Trump is “furious” with Giuliani’s recent botched press appearances, two Republicans briefed on the president’s thinking told me. What makes the most recent interviews so frustrating to Trumpworld is that, on Friday, the president secured his biggest victory yet when Robert Mueller’s spokesman issued a rare public denial of BuzzFeed’s explosive report alleging Trump had directed Michael Cohen to lie to Congress about Trump Tower Moscow. “Before Rudy stepped in it, Mueller had basically called BuzzFeed ‘fake news,’” a Republican close to the White House said. According to sources, a debate is playing out inside the West Wing over Giuliani’s future. Trump is being encouraged by several people, including Ivanka Trump and Jared Kushner, to dump Giuliani before it’s too late, while outside advisers Corey Lewandowski and Dave Bossie are lobbying Trump to keep Giuliani. “Trump is screaming. He’s so mad at Rudy,” one of the sources said. (“No, he’s not pissed. He just wants it clarified,” Giuliani told CNN’s Dana Bash on Tuesday, when asked about the president’s response to the interviews.) The White House had not responded to a request for comment by press time.
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As Giuliani’s unforced errors pile up, former West Wing officials and 2016 campaign veterans are privately debating what’s gone wrong with Rudy. Why, they ask, is he making statements that so obviously damage his client? A former White House official speculated that maybe Giuliani “has lost his mind.” But there are other, more charitable ways of interpreting Giuliani’s interviews. As I’ve previously reported, the Trump-Giuliani relationship hasn’t been good for weeks. Giuliani has said privately that he “hates the job” and that Mueller’s final report will be “horrific” for Trump. Facing these challenges and pressures, it’s understandable he would make mistakes, the thinking goes. “Everyone who works for Trump screws up because there’s no way to please the guy,” an outside Trump adviser said.

But, frustrating as the job may be, Giuliani also may be addicted to it. Friends said the former New York mayor was embittered after being out of the limelight for years following his failed 2008 presidential campaign. He’s been exhilarated by the press attention that comes with being Trump’s lawyer. Sources said Giuliani often books his own interviews and frequently texts with television news anchors. “There’s a school of thought that it’s better to be famous and ridiculed than ignored,” a Giuliani friend told me. But the media environment has become vastly more complicated than it was a decade ago, the last time Giuliani was on the national stage, and he has struggled to adapt. “This has been a trial by fire for him,” the friend said. “He can’t just say whatever he wants, because he’s being fact-checked on Twitter. Every time he does anything he gets caught.”

Marathon Man Newz / Who Knows, Maybe The Goldbugs Are Right This Time
« on: January 23, 2019, 12:30:34 PM »
I'm not putting this up because I've suddenly changed my views on gold. It's old news anyway to people who follow Clive, because it came out before the New Year.  The real reason I wanted to post this is for what Clive is saying about bonds. I've been hearing the same thing from other sources. People who are known to be occasionally right about things.

Since forever, when stocks tank, the big money rushes into Treasuries. In this current correction we've been having though, the usual stampede seems to be noticeably less. Just last night I listened to an audio of Marty Armstrong, who was saying the same thing. He said that it was a reason that stocks are likely to go higher from here......and....all my cycle counting guys have also consistently said it doesn't look like stocks are making a true top like they did prior to the last real crash in 2008.

Clive and many others are looking for gold to spike, and it has looked bullish as of late. I didn't copy the charts here, but you can see them if you follow the link.  My views about gold have not changed. I sold mine and I'm about to sell the last of my silver too. Not because it's not going up, but because I see better opportunities right now in cryptos.

Almost nobody gets how cryptos are going to play in this. It's a cinch they'll do great unless they get legislated out of existence, which could still happen. Bob Loukas gets it. He's the only besides me who sees it coming. But gold, in a panic, certainly could outperform. It always can, if things get bad enough. My view is that we aren't quite there yet, but I don't know everything,

Gold Market Update

originally published Sunday, December 30, 2018

The last update was wrong. Gold was expected to drop with the stockmarket, but instead it rose. Being wrong in this business is not a crime, but it is vital to recognize the error as soon as possible and make a course correction, and if possible discern the reason or reasons for the error. Failure to do this through pride, obstinacy or stupidity can lead to modest losses becoming ruinous. So what happened?

Whilst recognizing that there are big differences between now and 2008 it still looked likely that gold would get dragged down with the stockmarket when it dropped hard due to a flight into cash driving the dollar up but so far at least, this has not happened. Also it was thought that a Head-and-Shoulders bottom was forming in the dollar, but on further consideration, the pattern looks too tilted to be valid, and it now looks instead like it is starting to break down from a bearish Rising Wedge whose point of origin was back in March - April of this year (see dollar index chart lower down the page).

The biggest difference between now and 2008 is that back then money flooded into the dollar in order to buy Treasuries, but this time round that does not appear to be happening, and it is not hard to see why. The last 10 years since that financial crisis can fairly be likened to a wild party aboard the Titanic, with the global economy stumbling forward in a zombiefied state, powered by QE and ZIRP, which incidentally provided the opportunity for the elites to drain the wealth of the lower and middle classes into their coffers. The result of all this is that US debt has now expanded further to frightening and ruinous levels and the combination of this and the blatant attempt by the US to control the entire world via its dollar reserve currency system through a combination of sanctions, crude military threats and now tariffs is causing attitudes to harden so that other countries are less and less prepared to pony up and support the US by swapping goods and services for piles of intrinsically worthless paper in the form of dollars electronically created and then recycled into Treasuries. Those who have been paying attention will know that other major powers like China and Russia have been preparing to dump the dollar for a long time now, by buying gold as fast as the West will sell it to them, devising their own payments systems to replace the SWIFT system and making bi-lateral trade agreements etc. They also know that unless they have the military power to defend themselves, they would at some point be subject to military aggression by the US if they try to cease using the dollar, hence their major effort to beef up their defensive capabilities.

Thus, what we are seeing is an intensifying buyers strike with respect to Treasuries that will continue to hike interest rates until the economy implodes, a process which has already started. When this happens, and it doesn't look far off, they will reach for their drug of choice, QE, which will then collapse the dollar leading quickly to hyperinflation. The extent to which the US economy has been looted and plundered by the ruling elites for decades now is not fully understood by the American masses – if they did understand they would be marching on Washington. They have siphoned off countless trillions into the military-industrial complex, waged costly and destructive wars and invasions across the world, poured money into Israel, sickened and weakened the general population with food adulterated with countless additives and genetically modified food, and then made even more money out of them by peddling them overpriced drugs and medical care, destroyed the public transport system and created sprawling suburbs to increase the profits of oil companies as you have to drive 2 or 3 times as far to get anywhere as in Europe, killing town center communities and replacing them with shopping malls, bled families white to pay for useless production line college degrees etc – it’s no wonder there are so many crazies around – and that’s before the economy caves in. All of this has racked up towering debts of astronomic proportions which they expect foreign jackasses to support by adhering to the dollar reserve currency system and accumulating intrinsically worthless IOU’s in the form of Treasuries. The trouble is that foreigners have been starting to wake up to the fact that they have had a sign hanging round their necks for decades saying “Idiot” and one on their backs saying “Kick me”, and have been actively planning to extricate themselves from this situation for some years now, by taking the steps set out in the paragraph above, which include building up gold reserves. So they are steadily withdrawing from supporting the Treasury market, which is going to leave the US with a massive problem as the economy contracts, interest rates rise, the debt towers even higher, and the foreigners who have always been relied upon to support the whole mess fail to step up to the plate. So it’s not hard to see why the dollar is set to plummet before too much longer, even if it gets some temporary relief from the stockmarket crashing and the chaotic Eurozone imploding.

Thus, the fact that the dollar failed to rally either on the severe drop in the stockmarket of recent weeks or on the latest rate hike is viewed as an ominous development, both for the dollar itself and for the economy. This is what gold is picking up on and is the reason why it is has started to move ahead over the past couple of weeks.

Now we will quickly review the charts, starting with the 6-month chart for gold, on which we see that gold's advance over the past couple of weeks, although modest and measured, is certainly impressive given how the stockmarket has plunged during this period.

Just how impressive this move by gold has been is made plain by the chart for gold for the same time period plotted against the US S&P500 index. This shows an undeniably impressive performance by gold and reveals its newly acquired intrinsic strength. Notice how this ratio goes up when the stockmarket drops, and when the stockmarket rebounded the other day, it dropped. This is exactly what investors in the PM sector want to see and is the exact opposite of what happened in 2008.

Note that the latest COTs are not included in this update because they have been delayed by the Christmas holidays, and will become available early this coming week.

The key factor in all this is the dollar. Gold dropped in 2008 mainly because the dollar rallied sharply, but as we have witnessed in recent weeks this doesn't seem to be happening this time, for reasons that we have just considered. In the last update we looked at a bullish scenario for the dollar, which now seems to be off the table, and we later looked at a bearish scenario for the dollar on the site, which we will now review on the year-to-date chart for the dollar index below. This chart shows that the dollar is struggling here and on the point of breaking down from a bearish Rising Wedge. If this happens it is going to drop hard, in which case gold and silver are going advance strongly. Gold's rally of the past couple of weeks seems to be anticipating this and last week silver threw its hat into the ring, breaking out from a Double Bottom base and confirming gold's recent strength.

While we were wrong in the last update, the good news is that we haven't actually missed all that much, for as we can see on gold's latest 10-year chart, this party hasn't even started yet, and it won't, officially speaking, until gold breaks above the clear line of heavy resistance at $1400 that marks the upper boundary of its giant potential multiple Head-and-Shoulders bottom. While that level is still some way above the current price, it could get there PDQ (pretty damn quick) if the dollar breaks down from its Rising Wedge and drops hard soon, as is looking increasingly likely, and follow through with a breakout into a vigorous bullmarket that will dwarf the one of the 2000's into 2011.

Likewise, the rally so far in the Precious Metals sector has been miniscule compared to what's coming if gold breaks out above $1400, as we can on the 10-year chart for the GDX, where we can see a sort of rough-hewn Head-and-Shoulders bottom. If this is what it turns out to be then we still have great prices for most stocks in the sector, as it is still very close to what should turn out to be the Right Shoulder low of a giant Head-and-Shoulders bottom.

The 6-month chart for GDX is interesting as it shows that a pitched battle between bulls and bears is occurring in the vicinity of its still falling 200-day moving average and at the upper boundary of the channel shown. While the larger dark candles and higher volume suggest that the bears will temporarily win the day and force a reaction, this would accord with gold backing off a bit as the stockmarket advances a little further before reversing, and any such reaction should present a good buying opportunity. Another significant upleg will soon result in a bullish cross of the moving averages.

The impressive outperformance by Precious Metals stocks relative to general stocks during the past few weeks is amply illustrated by the 6-month ratio chart for the GDX relative to the S&P500 index. This ratio eased back in recent days due to the stockmarket’s snapback rally.

We are going to wind up by looking at two charts that ought to turn even the dourest of skeptics into Precious Metals sector bulls, unless that is, he (or she) is stupid, in which case they are beyond help. First, the chart for the gold to silver ratio, which shows that it is at levels that have only been reached on 3 occasions in the past 20-years. The 1st occasion was in 2002, when the great 2000’s sector bullmarket was in its early stages. The 2nd was at the depths of the 2008 crash, which also dragged down the PM sector due to the dollar spiking, which doesn’t look it is going to happen this time round, or if it does it is likely to be much more muted. The 3rd occasion was at the trough of the sector depression late in 2015 and early in 2016, when PM stocks were crazy cheap. The ratio exceeded all this levels in the recent past, which is a reliable sign that a major new bullmarket is not far away.

Next and last we will take a look at the 20-year chart for the ratio of the HUI goldbugs index to the S&P500 index. This ratio chart provides a technical explanation for why the sector was so weak over the past 2 and a half years – it wanted to make a nice neat Double Bottom with its lows of late 2015, and now that it has done so and is starting to rise up again, it would appear that it is satisfied. This is a chart that bodes very well indeed for the sector, especially as the rise off the 2nd low of the Double Bottom occurred as the broad stockmarket was falling heavily.

This update started out by me admitting I was wrong by being too bearish on gold and silver in the last update, but in fairness to myself, I was right about a lot of things. Like the stockmarket caving in, in particular the FAANG stocks. Thus, we made a lot of money out of Apple Puts, and by buying a range of broad market inverse ETFs, which we sold for a nice profit before and after Christmas.

Let’s end on a positive note by saying that if you thought 2018 was bad, wait until you see what a terrible year 2019 will turn out to be. By “positive note” we mean that although most investors will end up losing a lot of money in 2019, it won’t include us and doesn’t have to include you. On a general level, if you buy the Precious Metals sector here or soon, and dump most everything else, you should come out on top by the end of the next year, and handsomely so in many cases. Of course, on the site we try to be rather more specific than that and will detail the various large cap, mid cap and small cap mining stocks and also ETFs that can be used to this end.

So Happy New Year to you all, and as for 2019 – bring it on!!

End of update.

Marathon Man Newz / Pope Calls Migration Fears Irrational
« on: January 23, 2019, 10:41:22 AM »
If there is one really, really good place to lay blame for the unending stream of indigent, illiterate would-be refugees from Central America, the Catholic Church richly deserves the booby prize for that one.

But here we have the fine socialist Pope of the People explaining why people in this country should just open their arms to solve the huge overpopulation problem his religious organization willingly embraced in order to grow the flock. Trump tries to scare people with his lies about terrorists sneaking across the border. Maybe little old ladies buy that one, but not me. On the other hand, I think taxing the Mother Church to pay for the care and feeding of the faithful would be an excellent idea.

Oh, churches are tax exempt, you say?

Why is that?

Pope Francis On Border Wall: Irrational Fear Of Migration Drives People ‘Crazy’

The pope, who is visiting Central America this week, has made speaking up for migrants and refugees one of his top priorities.

VATICAN CITY (AP) — Pope Francis said Wednesday that fear of migration is “making us crazy” as he began a trip to Central America amid a standoff over President Donald Trump’s promised wall at the U.S.-Mexico border and a new caravan of migrants heading north.

Francis was asked by reporters about the proposed border wall Wednesday on the way to Panama, where he is looking to leave the sex abuse scandals buffeting his papacy behind. Francis responded: “It is the fear that makes us crazy.”

The Roman Catholic Church’s first Latin American pope and the son of Italian immigrants to Argentina, Francis has made the plight of migrants and refugees a cornerstone of his papacy. He is also expected to offer words of encouragement to young people gathered in Panama for World Youth Day, the church’s once-every-three-year pep rally that aims to invigorate the next generation of Catholics in their faith.

Panama Archbishop Jose Domingo Ulloa said Francis’ message is likely to resonate with young Central Americans who see their only future free of violence and poverty in migrating to the U.S. — “young people who often fall into the hands of drug traffickers and so many other realities that our young people face.”

The pope is expected to urge young people to create their own opportunities, while calling on governments do their share as well.
Pope Francis speaks during a news conference aboard a plane headed to Panama, January 23, 2019. Vatican Media via REUTERS THI
Vatican Media / Reuters

The visit is taking place as the U.S. government remains partly shut down in a standoff between the Trump administration and Democrats over funding for Trump’s promised border wall.

Francis famously has called for “bridges, not walls.” After celebrating Mass in 2016 on the Mexican side of the U.S. border, he denounced anyone who wants to build a wall to keep out migrants as “not Christian.”

Crowds are expected to be smaller than usual for this World Youth Day — only about 150,000 people had registered as of last week — but thousands more will certainly throng Francis’ main events, which include a vigil and a final Mass on Sunday. The Vatican conceded that the January date doesn’t suit school vacations in Europe or North America, both of which typically send huge numbers of pilgrims to World Youth Day gatherings.

Francis’ trip, the first in a year packed with foreign travel, comes at a critical moment in the papacy as the Catholic hierarchy globally is facing a crisis in credibility for covering up decades of cases of priests molesting young people.

Priests celebrate mass during the opening ceremony of World Youth Day Panama 2019, in Panama City, Tuesday, Jan. 22, 2019. Pope Francis will visit Panama on Jan. 23-27.

The pope is expected to soon rule on the fate of former Cardinal Theodore McCarrick, the high-powered U.S. archbishop accused of molesting minors and adults. And he is hosting church leaders at the Vatican next month on trying to chart a way forward for the global church.

Vatican spokesman Alessandro Gisotti said there were no plans for Francis to meet with abuse survivors in Panama. Central America hasn’t yet seen the explosion of sex abuse cases that have shattered trust in the Catholic hierarchy in Chile, the U.S. and other parts of the world.

This is the first papal visit to Panama since St. John Paul II was there during a 1983 regional tour that famously included an unscheduled stop at the tomb of Archbishop Oscar Romero in El Salvador. Romero had been gunned down by right-wing death squads three years earlier, at the start of El Salvador’s civil war, for having spoken out on behalf of the poor.

Salvadoran bishops had hoped Francis would follow suit and make a stop in El Salvador this time to pay his respects at Romero’s tomb since Francis canonized him in October. But the Vatican said a Salvador leg was never really in the cards.

Nevertheless, Gisotti said Romero would likely loom large at the Panama gathering, given he is such a point of reference for young Central American Catholics who grew up learning about his defense of the poor.

The Panama visit is also the first by a pope since the Vatican embassy played a crucial role during the 1989 U.S. invasion of Panama, when dictator Manuel Noriega took refuge there and requested asylum on Christmas Eve after four days on the run trying to escape U.S. troops.

Noriega eventually surrendered, bringing to an end one of the more unusual U.S. military operations: It involved U.S. troops blasting heavy metal and rock music — including Van Halen’s “Panama” — at the embassy to try to force Noriega out.

Noriega, a onetime U.S. ally, eventually served a 17-year drug sentence in the United States. He died in 2017 after his final years were spent in a Panamanian prison for the murder of political opponents during his 1983-89 regime.

Pope Francis confirmed to reporters aboard the papal plane that he plans to go to Japan in November. The pope also said he wants to visit Iraq, but that local church leaders have told him that the security situation is not yet right.

This year, the pontiff has already scheduled trips to United Arab Emirates, Morocco and Bulgaria and Macedonia, and a trip to Madagascar is rumored.

Surly Newz / Re: The Surlynewz Channel
« on: January 23, 2019, 09:06:25 AM »
All life on earth is a Great Culling. All the social engineering modern man can imagine cannot change that. If you think it can, you are quite delusional.

Perhaps the trajectory of the whole universe is some larger fractal of that.

Until the New Deal, being poor in America was an accepted fact of life by most people. My people were so poor the Great Depression didn't do much to make their agrarian subsistence living any different. It was the war that changed everything...that and what came after.

The idea that governments and rich elites can socially engineer our way out of our current overpopulation problem.....which is the result of mass ignorance and misguided religion.....and that our late-stage planet plundering could possibly be reversed in a way that solves our current predicament and gives 9 or 10 billion (and more on the way, don't blink) people a nice life...maybe give everybodythat's been laid off because of technology a living so they can pursue a career in poetry and literature?

It simply cannot and will not happen.

Sorry that I'm most interested in what happens to me and my kids, and not so much in every Tom,Dick and Harry. But I didn't drink the Kool-Aid you drank, and I know your well-intended but poorly informed ideas are nothing but rainbows and unicorns.

Marathon Man Newz / Re: Potfolio - Cannabis Elite invited to Davos !
« on: January 23, 2019, 06:22:58 AM »

The global elite are on their way to the Swiss alpine town of Davos for the World Economic Forum’s annual gathering, but this year a new group is joining the party: the cannabis elite.

A bevy of company executives and former politicians — all of whom are now involved in the burgeoning legal cannabis industry — are expected to attend what is being billed as the first ever “Cannabis Conclave,” a three-hour lunch at an alpine restaurant only accessible by cable car.

Attendees of the event at Restaurant Höhenweg will be able to “listen to insights by leading cannabis executives and investors while enjoying a three-course Swiss lunch” consisting of Swiss cheese pasta, meat fondue and “kaiserschmarrn” or fried pancakes.

The people with the good pot are always invited to the party.


I have often speculated about the wisdom of trees....and their sapience.

Surly Newz / Re: The Surlynewz Channel
« on: January 23, 2019, 04:29:21 AM »
What AJ said.

The tax structure could use some changes, no doubt. But with out current system of government by political donor, the burden is not about to fall on the really big money, so it falls on the higher income working professionals instead. That's my story and its a true story, and I'm sticking with it. No amount of cut and paste can change reality, and I'll take my chances in a non-communist country.

Economics / Re: 🤑 Wealth Maldistribution
« on: January 23, 2019, 04:24:18 AM »
Oxfam's methodologies are highly questionable. Their little yearly media bombs are fairly misleading, if you read for comprehension. Let it suffice to say that Oxfam is an organization devoted to globalism and all that means.

Here's a fair critique.

Are 26 billionaires worth more than half the planet? The debate, explained.
It’s complicated!

By Dylan  Jan 22, 2019, 3:00pm EST

Here’s a wild statistic: The 26 richest people on earth in 2018 had the same net worth as the poorest half of the world’s population, some 3.8 billion people.

That statistic, which comes from the charity group Oxfam, is a bit of an annual tradition. Every year, to mark the World Economic Forum in Davos, Switzerland — that yearly convocation of the world’s richest and most self-important plutocrats — Oxfam puts out a statement that “the top [X] people have the same amount of wealth as the bottom” half, as the Center for Global Development’s Maya Forstater and Vijaya Ramachandran once generalized it. In 2018, X was equal to 26, and as it does every year, the stat went viral.

This year, Oxfam’s report added another shocking stat. The report also claims that 2,200 billionaires worldwide saw their wealth grow by 12 percent (which is eminently believable), even as the poorest half saw its wealth fall by 11 percent (which is a bit harder to believe at a time when global poverty is consistently falling).

Oxfam’s “the top X people have the same wealth as the bottom half” claim has received plenty of scrutiny in the past from folks like Forstater and Ramachandran, Felix Salmon, Chris Giles, and Vox’s Ezra Klein. Critics note that the Oxfam data includes heavily indebted people in the rich world (like a medical resident with med school debt) as among the poorest people on Earth, which distorts the results. Oxfam for its part has responded forcefully to the criticism. But the claim that the poorest people in the world have seen their wealth fall has gotten less scrutiny.

In both cases, it’s worth understanding a little better what the Oxfam data does and does not say, as well as reviewing other data on the state of global inequality. Oxfam is absolutely right that the rich are getting much richer — but the world’s poorest people are getting richer too.

The “rich ultra-poor” problem
Wealth inequality is harder to measure than income inequality for a simple reason: A lot of people have negative wealth. In rich countries, it’s fairly common for people to have negative net worth when their student loans, credit card debt, underwater mortgages, and the like are taken into account. (Income can be negative too, of course — businesses that post losses have negative income, for instance — but it’s not as common.)

So in the Credit Suisse Global Wealth Report — which Oxfam uses as its primary data source on the bottom half’s wealth — one observes a strange phenomenon: The bottom 10 percent of the global wealth distribution contains a bunch of North Americans and Europeans, whereas the next 10 percent contains barely any:

 Global wealth report 2018
Compare the share of the 10th decile (on the left-most end of the chart) in North America and Europe to the 20th decile directly to the right. Credit Suisse
That’s because Americans with massive medical school debt, or tens of thousands in credit card debt, or (to use the president as an example) tons of debt from failed hotel, casino, and airline businesses wind up in the bottom decile. Some of those people — like the person in credit card debt — might be legitimately struggling. But Donald Trump was not, in any sense relevant to living standards, one of the poorest people on earth when his net worth went negative in the 1990s. You have to be very rich to get that poor.

And sure enough, in 2015, Oxfam’s Nick Galasso conceded that the database they use included 158 million Americans and Europeans in the bottom decile that year.

Galasso offered two defenses for using the data in this way:

While there are high-debt but objectively pretty well-off Americans and Europeans in the bottom decile, they’re only 23 percent of that group; most of it is comprises people in poor countries who are struggling.
If you remove the bottom decile entirely from the bottom half of the distribution, you get a similar picture. As he wrote in January 2015, in 2014 “[t]he 2.8 billion people making up deciles 2-5 … collectively own a mere one percent of global wealth, about $2.6 trillion. That’s about the same amount of wealth owned by the richest 147 billionaires in the world.” 147 is a bigger number than Oxfam’s usual X amount, because all that negative net worth in the bottom decile has been excised, but it’s still a startlingly small number.
Those are both fair defenses, I think. It’s not true that the bottom decile is just fake-poor people in the rich world, and it’s true that global wealth inequality is massive.

But as the Center for Global Development’s Forstater and Ramachandran noted, Oxfam’s defense smuggles in something interesting: The richest 147 billionaires in the world control about 1 percent of global wealth. That’s way, way more than the 0.000002 percent of the world’s population they represent, but it’s not the case that a small handful of billionaires control most of the world’s wealth.

What does appear to be true is that a small (in global perspective) number of millionaires control a shocking share of the world’s wealth, as this graphic from the Credit Suisse report illustrates:

 Global wealth pyramid according to Credit Suisse
Credit Suisse
42 million people, or 0.8 percent of the world’s population, have net worths in excess of $1 million. That group — roughly the global 1 percent — controls 44.8 percent of the world’s wealth. So it really is true that a pretty small number of people control nearly half the world’s wealth. It’s just a bigger small number of people than Oxfam’s reports tend to emphasize.

The falling wealth of the bottom half
The more shocking part of the latest Oxfam report, to me, was the contention that the bottom half’s wealth fell by 11 percent, whereas a few thousand billionaires saw their wealth increase by 12 percent.

The latter isn’t too surprising — billionaire net worths tend to be bound up in individual companies’ stocks and are thus incredibly volatile; Jeff Bezos alone gained $24 billion in 2018 — but the idea that the bottom half’s wealth fell by 11 percent seemed odd to me. It seemed curious to some development economists on Twitter, too:

Noah Smith

 · Jan 21, 2019
 This tweet may have 1000s of retweets, but it's not really the case that "the few are monopolizing progress".

No, we don't really know how to measure the wealth of the global poor. And the benefits of economic growth are definitely still flowing to poor people in poor countries.

Jonah Rexer
Half the world’s population getting 11% poorer in a single year (2018, as claimed) would imply a global economic catastrophe the likes of which we’ve basically never seen. People need to think about reasonable magnitudes before repeating made up stats

11:28 AM - Jan 21, 2019
Twitter Ads info and privacy
See Jonah Rexer's other Tweets
Laura Rusu, Oxfam’s policy and campaign media manager in DC, told me that the group isn’t sure why they observed such a large fall in the bottom half’s net worth. “We don’t have an explanation,” she says. “We’ve been grappling with that. We have hypotheses.”

I’m not entirely sure either, but I have an alternative hypothesis. The Credit Suisse report, upon which Oxfam relies, relies not on purchasing power parity (PPP) — a statistical tool that economists use in comparing currencies when what matters is how much stuff the currency can actually buy — but on exchange rates, which fluctuate often on a global market. The latest Credit Suisse report also does some calculations using smoothed exchange rates, which reduces volatility, but nonetheless prefers exchange rates to PPP throughout.

When the Financial Times’s Chris Giles looked into a similar claim Oxfam made in 2016, he concluded that this exchange rate methodology accounted for the claimed fall in wealth of the bottom half of the distribution. When the US dollar becomes more valuable relative to domestic currencies, this shows up as a wealth decline even when there hasn’t been a decline in living standards.

And sure enough, in 2018 the US dollar appreciated against the Nigerian naira, against the South African rand, and against the Indian rupee; given how populous those countries alone are, and how poor their populations are, it seems very possible that currency appreciation accounts for much or all of the decline. That’s especially true given that the Credit Suisse report came out in October, before the dollar hit a bunch of setbacks.

I’ve reached out to Credit Suisse’s research team to see how much the bottom half’s wealth would have changed absent any currency fluctuations; I’ll update when I hear back.

Oxfam’s Rusu defended the use of exchange rate data rather than PPP, noting, “In the vast majority of countries, but especially in developing and emerging countries, a large proportion of personal wealth is in the hands of the wealthiest among the wealthy; that is, in households located in the first percentiles of the distribution. These individuals tend to have great international mobility and tend to move their assets across borders frequently.” In that context, what matters is their international purchasing power, and measuring that in actual dollar values makes sense.

But this defense doesn’t really hold when analyzing the bottom half of the wealth distribution, or considering why the bottom half’s wealth might have fallen according to the Credit Suisse data.

The bigger picture
It’s worth stepping back from the specifics of the Oxfam numbers to try to answer the bigger claim that the Oxfam statistics gesture toward: Are the rich getting richer as the poor get poorer?

The short answer is that the rich are definitely getting way richer — and it’s a problem — but it’s nonetheless also true that the world’s poorest people are getting less poor. You can see the latter phenomenon in a variety of statistics, not least the World Bank’s estimates of how many people live on less than $1.90 a day. This data is based on household surveys, which take years to collect, so it’s out of date at any given time, but economic growth in India, China, and even sub-Saharan African suggests that the progress continued through to the present day:

 Share of population living in extreme poverty, by world region, 1987 to present
Our World in Data
You also see this happening in the so-called “Loch Ness” graph produced early last year by a team of economists — led by Facundo Alvaredo, Lucas Chancel, and the famous inequality research trio Thomas Piketty, Emmanuel Saez, and Gabriel Zucman:

 The new elephant graph, using latest 2018 data
World Inequality Report 2018
The chart shows how each percentile of the global income distribution saw its incomes increase from 1980 to 2016. There’s a bulge at the left, with people in poor emerging market economies seeing their incomes rise by 100 to 125 percent over those 36 years, modest income growth in the middle (including the poor and middle class in the US and Western Europe), and then skyrocketing growth for the global 1 percent, and especially the global 0.001 percent and global 0.0001 percent.

In other words, what you think is happening is happening: The rich really are getting preposterously rich. And there’s a real argument to be made — the political argument that Oxfam’s statistic is meant to make — that making taxes more progressive and directing the funds to, say, cash payments to poor households would lead to faster poverty reduction than has occurred under the current system. One analysis suggests that up to 50 percent of global extreme poverty could be ended if developing countries adopted higher top tax rates.

But the rich getting richer doesn’t preclude the poor getting richer too, and while the middle classes in the US and Europe have seen less income growth than either the poorest people in developing countries or the richest people on earth, the world’s progress against extreme poverty is real and notable. It’s also, I’d argued, unhelpfully obscured by stats like Oxfam’s.

Here's a critique by a less nuanced critic.

Oxfam's Misleading Inequality Numbers
They pull this PR stunt every year
Monday, January 18, 2016

 Ryan Bourne 

The media is running with Oxfam’s annual "shocking" statistic on wealth. This year "the richest 62 people have the same wealth as poorest 3.6 bn."

But all is not what it seems:

1) The methodology Oxfam used implies there are more poor people in North America than in China.

Sounds counterintuitive, right? The Oxfam claim is made using Credit Suisse’s net wealth figures — which add up people’s assets and then subtract debts. So, some of the poorest people in the world would be those unfortunate souls who graduate from Harvard with law degrees and big loans to repay.

This may be true in a strict statistical sense where poverty is measured materially by net wealth — but is certainly not the understanding of poverty most sane people have. Oxfam’s own chart, for example, shows that over 10 per of those in the bottom global wealth decile live in North America.

2) This methodology almost by construction creates big scary statistics.

The above point speaks to a broader truth. It doesn’t take an advanced mathematician to work out that adding up lots of negatives and zeros (after all there are lots of us, especially my generation, with little in the way of assets) in the lower parts of the distribution exaggerates any comparison with those with big net positive wealth at the top — hence the scary statistic.

Oxfam counters this by calculating the proportions excluding debts, and say that it does not change their results much. But we are still left with the issue that people like me, with few assets but in rich countries, would be considered among the poorest in the world. This shows that what really matters to our understanding of material poverty is incomes — and global income inequality (which Oxfam barely mentions) has fallen over the past three decades.

3) The median age of the global population is between 35 and 39.

Oxfam likes to cite another statistic, which is that the top 1 per cent has a higher net wealth than the bottom half of the distribution. But we know from the lifecycle of asset and debt accumulation owing to demographics that people tend to have little in the way of asset accumulation until well into their working lives. We also know that many of the oldest will live in the very rich countries and be very rich. It is not surprising then that the global net wealth distribution is so skewed — demographics alone is vastly important.

4) Oxfam is inconsistent in how it uses these statistics.

At a global level, Oxfam highlights the level of net wealth inequality. Whenever they use the very same Credit Suisse data to look at the UK, they discuss the trends — i.e. the changes in the levels.

Why are they not consistent and talk about the level of net wealth inequality in the UK? Might it be because the same data shows that most countries have higher net wealth inequality than the UK (on Gini coefficient, top 10% share and top 1% share), which would not fit with Oxfam’s domestic narrative? Might it expose that some of the countries which have bigger welfare states and more redistribution have higher wealth inequality because there is little incentive for the poor to save and accumulate assets?

5) Oxfam — a development charity — is now obsessed with the rich rather than the poor.

One would think that Oxfam as an anti-poverty charity would focus its energies on the vast literature showing the conditions necessary for poverty eradication and the role markets and capitalistic institutions can play in doing so.

Instead Oxfam is obsessed with the global rich — almost implying that the wealth of the rich causes the poverty of the poor. It can do, in some cases — where cronyism is rife. But there is scant evidence this is the important driver of current distributions. And Oxfam implying that it is, whilst perpetuating the fixed pie fallacy, is appalling for a supposed development organization.

6) At home and abroad, Oxfam is now like a one-club golfer: more government is always the answer.

This new report advocates for living wages, curbs on executive pay and many other "progressive" policies. Previously Oxfam has advocated for financial transactions taxes and wealth taxes. These are repeated, with no nuance to show the economic challenges facing different developing countries around the world. Perhaps Oxfam would like to highlight all the successful countries where this sort of agenda has alleviated the absolute living conditions of the poor consistently?

Geopolitics / Re: Election Errata
« on: January 22, 2019, 03:27:06 PM »
I'm not happy to see my taxes going to a 70% marginal rate, and I guaran-damn-tee you you wouldn't be happy about that either, if it was  aimed at you.

And the truth is that it won't help. You can't spend endlessly. That's the problem here. Our taxes should be low and we should have decent social programs too.....but instead we get Stealth Bombers and nukes and drones and 1.2 million warm bodies in uniform. Until that's fixed, a 100% marginal tax rate won't help dig us out the hole, because it's just going to get deeper.

Geopolitics / Re: Election Errata
« on: January 22, 2019, 03:21:07 PM »
Right now the Kamala Harrises and the Occasio-Cortez's of the world are like the green shoots of Free Shit Spring. I expect their initial efforts to fail miserably, outvoted by vested interests. Which suits me, at the moment. When it does get bad enough, I will fold my tent. No problem.

Ain't it something when the eight-figure guys start bleating about the Free Shit Army? Predictable as sunrise.

Llpoh, your table is waiting.

Not Llpoh, but not stupid either. If I didn't like you so much, I might have you killed for calling me that.

AOC is a cute girl, but she is not too smart. Doesn't get math. Neither does Kamala Harris.

Poor Llpoh.  Moved to Australia, to escape the US. I guess he doesn't believe in climate change?  What a jerk. My feelings are hurt you'd compare me to that asshole.

Geopolitics / Re: Election Errata
« on: January 22, 2019, 11:07:13 AM »
But the thing is, chief, there is no new guy in the middle class that is going to take my place.

That is a good thing.  Your class is a wealth drain of extraoridnary proportions.  The sooenr it is eradicated, the better.


Tell that to the people who work for me. What will their GS pay grade be in your perfect world where the government pays everybody fairly and nothing gets wasted.

( Excuse me while I laugh my ass off).

People like me sign the paychecks of the people you claim to speak for.... and we support things like amateur gymnastics, soccer, other words, our money pays people like you.  Or like you WERE, back when you actually worked.


Geopolitics / Re: Election Errata
« on: January 22, 2019, 09:46:55 AM »
The "tax the rich" plan sounds good to you, unless you happen to be a working professional who already pays hundreds of thousands of dollars in which case it it makes you want to quit and let the next generation pay for tax credits for the unproductive.

Go ahead and quit then.  The fact is, if you need money, you gotta go to the people who actually HAVE the money.  This is not the poor people.  You need to hit on the Upper Middle Class to the Moderately Rich.  Namely, YOU.

Robin Hood rides again.


You can't fix problems you don't even fully comprehend. Taxation is already high on everybody, with the exception of the real Uber Rich. No amount of higher taxes will fix this. It'll just get worse.

I will quit, when it's time to quit. Right now the Kamala Harrises and the Occasio-Cortez's of the world are like the green shoots of Free Shit Spring. I expect their initial efforts to fail miserably, outvoted by vested interests. Which suits me, at the moment. When it does get bad enough, I will fold my tent. No problem.

But the thing is, chief, there is no new guy in the middle class that is going to take my place. There will only be more debt and no one left to pick up the slack. You will simply run out of other people's money to spend. The real rich will continue to manage to insulate the biggest part of their wealth from taxes, until long after both of us are worm food.

Geopolitics / Re: Election Errata
« on: January 22, 2019, 07:55:52 AM »
Just spent some time reading AOC's twitter feed. She is more forthright and truthful than 95% of those pols in DC. She gets the whole Climate Change/Extinction around the corner way we are going. She correctly states that if we are to avoid human extinction we should be approaching this like its WW2. PLUS she has energy (way more than old people like me) and enthusiasm to change the BAU world.

She's in a district that has been a Dem stronghold pretty much forever. Carolyn Maloney owned it until she went over to the 12th district, where she now is the incumbent.  It's 48% hispanic and 24% white and 18% Asian, and the median age is 30-39 years old. Not surprising she won.

She has not yet been corrupted. In general the system deals with youthful exuberance by corrupting it with money. Too early to know much.....except she's a candidate of the people, meaning she wants to spend money on all kinds of things and make the mean old rich people pay for it.
A product of her indoctrination in the Yorktown public schools, where she once won 2nd place for her science project.

Surly Newz / Re: The Surlynewz Channel
« on: January 22, 2019, 07:07:37 AM »
Is a ten percent tax on every bodies income fair?

That's the kind of thing people like Bloomberg want, except it would have to be higher than 10% to pay the freight on our debt. Maybe 20% would get it, if we could spend sensibly (which is not really in the cards).

That's the so-called "flat tax".

It's regressive, because it requires the poor to pay taxes. Right now a large group of people with lower incomes pay NO net federal income tax...meaning they get back as much or more than they pay in.

So a flat tax would not truly be fair to the people at the bottom. They already pay sales tax on everything but food, which is where the tax man hits them the hardest, compared to wealthy people.

The real bottom line is that you can't tax your way out of unlimited deficit spending. The money system, unfortunately, allows the government to borrow unlimited money with no plan to pay it back. The Congress and the Fed collude to make this happen. This is the real problem.

The current conservative Republican approach is to gut spending for social programs...but the real problem is elsewhere, in the military budget. For a brief, instant in the early 90's we were on  the verge of doing things right. Then the USMIC found us some new enemies to waste money killing. It's a joke, unless you're the one being bombed.

The military is the biggest conduit scheme ever devised, and the people largely support it, thinking it's necessary, and failing to get how it makes us all poorer than we should be.

So, to make taxes fair to all, we do have to cut spending. But we need to cut it on the military. Most of our taxes go to two totally unproductive and wasteful things. Paying debt interest  (8.3% of this years collected federal income tax).........and buying bombs and paying soldiers (24% of taxes).

Only 9% of the tax collected comes from corporate can argue that corporations should be taxed higher. There are also some fairly reasonable arguments against that.

One thing is for sure. Taxes could be a lot lower, and services for regular people could be much higher. If we had to balance the budget, and if we could cut the insane military spending..

None of the right things will happen, but most of the wrong things don't look for things to improve in any material way, not even under the new socialists, who are apt to themselves be profligate spenders.

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