Friday, August 12, 2016

The Titanic Risks Of The Retirement System

By Mohamed A. El-Erian
The Bloomberg View
August 12, 2016

Imagine an entire enterprise set on course for disaster, driven by the owner’s arrogant pursuit of profit. The members of the management team, from the CEO on down, know better but fail to resist or are ignored. The clients remain totally unaware of the risks until far too late, with catastrophic results -- particularly for the poorest among them.

This is the story line of the excellent "Titanic," a musical now playing at the Charing Cross Theatre in London. As I took in this powerful portrayal of the human failures that brought down a ship thought to be unsinkable, it occurred to me that if we're not careful, the tragic story could also end up describing the fate of the global retirement system.

With interest rates extremely low and the prices of stocks and bonds at historic highs, finding safe investments that can help guarantee a comfortable retirement has become increasingly difficult. This has put the managers of pension funds and other institutions that invest on behalf of future retirees in a difficult position, driving them to take ever greater risks in hopes of meeting their performance objectives -- targets that are unlikely to be met absent a major revamp of economic policies and corporate prospects. As a result, individuals are increasingly being exposed to the threat of losses that cannot be recouped quickly.

The degree of long-term financial security that can be assured depends on three elements: future returns, correlations among different asset classes and volatility. The outlook for all three is becoming more uncertain.

What returns can investors realistically expect? With the combination of central bank activism and less robust economic prospects pushing bond yields into negative territory (most recently in the U.K.), fixed income markets no longer generate any meaningful returns -- unless one takes on a lot more default risk by accumulating junk debt issued by corporations and emerging-market governments. In the stock market, high-quality dividend-yielding shares have reached unnerving valuations, leaving more volatile and risky options.

More sophisticated investors may be able to access investment vehicles that traffic in less crowded areas -- but selecting the right manager is not easy, especially in a “zero sum” world in which one manager’s positive “alpha” is another’s losses.

In principle, the right mix of investments can provide greater return for the same risk. But this works only if the investments don’t move in sync -- and correlations among asset classes have lately become unstable and less predictable. Sophisticated long-term investors realize that portfolio diversification, while still necessary, is no longer sufficient for proper risk mitigation. Yet the next operational step is not easy, and it typically involves giving up some potential return.

Then there's volatility, which increases the chances that an investment will fall in value precisely when a future retiree needs the money. In recent years, central banks have largely been willing and able to repress financial volatility. Now, though, this is changing. Some, such as the Bank of Japan, appear less able while others, such as the Federal Reserve, somewhat less willing.

The repercussions for investment managers depend on where they stand. Those who oversee severely underfunded corporate or public defined-benefit pension plans are in a particularly tough bind: They must achieve high returns to meet their targets, so they face the greatest pressure to take on risks that could be catastrophic if companies and the economy don’t perform well enough to justify existing asset prices. Even better-funded pension plans that have matched their assets to their liabilities will be challenged to maintain historical returns if they take on new entrants.

To avoid disaster, policy makers and investment managers should consider three fixes. First, be a lot more realistic about the returns that can be achieved within traditional risk tolerance parameters. Second, put in place policies to boost savings and income, so people -- particularly the most vulnerable -- will have more money available to put aside for retirement. Third, be transparent with retirees about the risks that are being taken on their behalf, also offering less risky options with explicitly lower expected returns.

Absent urgent change, the retirement system could end up following the example of the Titanic. Like the ship’s passengers, many individuals would face the risk of devastating consequences. And like the second- and third-class passengers who had a hard time getting on lifeboats, the middle- and low-income segments of the population would be most at risk.

Article Link To The Bloomberg View:

Once A Drug Den, Medellin Is On The Path To Prosperity

Business and political interests may thrive.

By Michael O'Hanlon and Elizabeth Pearce
The National Interest
August 12, 2016

Two stories tend to dominate news coming out of Colombia, Latin America's third most populous country. First, after decades of drug-related violence and insurgency, the nation has become much safer this century, under the leadership of presidents Alvaro Uribe and Juan Manuel Santos. To be sure, severe problems including massive narcotics trafficking continue. But the security situation has improved greatly over the last fifteen years. That trend has been reinforced by an improving economy, led by sectors such as flower and coffee production, oil drilling and mining. Second, all of the above have produced the conditions for a peace deal with the FARC, the nation's main insurgency. Colombians are already bracing for what is likely to be a highly contentious referendum on the expected deal, which some including Uribe consider too lenient towards the insurgents, come October.

Beyond these broad developments Colombia is experiencing a third and equally noteworthy change of late. Call it the Medellín miracle. Medellín, the country's second-largest city after the capital of Bogota, and former stronghold of the infamous Pablo Escobar, has turned into a thriving and most agreeable place to live—an urban area of 2.5 million, situated in a valley at 5,000 feet altitude with a splendid climate. Understanding the Medellín story shows how far Colombia writ larger still has to go—but also provides a remarkable model for how to take the country forward to the next level of prosperity and safety. Most of this it has done through Colombians' own labors and sacrifices. However, through a program known as Plan Colombia and more recently a free-trade deal, the U.S. role has been crucially important this century. That role must continue, even expand, in the years to come.

Since 1991, Medellín has cut its homicide rate twenty-fold. Back when Escobar and cronies ruled the streets with incredible brutality, Medellín and its 1.5 million inhabitants experienced some 6,000 homicides a year. That huge number is twice the estimated number of annual fatalities in contemporary Afghanistan (with 30 million people), according to UN figures. Or, for another point of comparison, it is almost twenty times the current rate in New York City. Today, Medellín with its 2.5 million people is still a violent place. But murders are down to 500 a year or less, comparable to some American cities, and 95 percent less per capita than a quarter century ago. Other crime statistics show similar progress.

What made this possible? Identifying the core causes is important for knowing how to sustain the Medellín miracle while also spreading the model to the rest of Colombia and the region.

Step one took place in the early 1990s, when U.S.-assisted operations tracked and killed Escobar, also taking down a few other key drug kingpins. This was based on good intelligence and commando operations.

Step two followed later in the decade and brought the homicide rate to about three thousand a year. It included some additional raids, plus temporary ceasefires with certain cartel leaders and other criminals. Step three was the Uribe revolution in the early 2000s. It had some roots in the work of Uribe's predecessor, President Andres Pastrana, who together with presidents Clinton and Bush created a U.S.-Colombia collaboration called "Plan Colombia." It brought far more resources to the counterinsurgency and countercrime fights, in the form of a larger and better trained military, key precision-strike technology and much higher tempo of operations and intensity. The nation's violence levels as a whole dropped in half, as did the FARC's estimated size and capacity; trends were even more pronounced in Medellín.

Step four is the largely untold story. It is how Medellín, under recent mayors like Anibal Gaviria and the incumbent, Federico Gutierrez, have worked with other local and national institutions to cut violence rates much further yet again during the decade of the 2010s. To be sure, progress has continued throughout Colombia, and the FARC has been brought to the negotiating table under President Santos. But in much of the nation, homicides have plateaued at rates that remain higher than the Latin American average and far above the world average. Kidnapping and robbery remain serious concerns as well. Americans still face travel advisories when voyaging to Colombia; diplomats there are not cleared to use most rural roads at night; insecurity discourages tourism and investment in many places.

Not so in Medellín. Yes, the city remains afflicted by serious crime. But the sense of progress and positive momentum is palpable—not only in the crime statistics but in urban renewal projects, new libraries, schools and community centers in the city's most difficult neighborhoods, impressive public transportation systems ranging from buses to a modest subway system to gondolas that range up and down the city's beautiful mountains, and booming business.

A few key initiatives have driven this recent progress:

1. Under Mayor Gaviria and former Minister of National Defense Juan Carlos Pinzon, some two thousand police officers were added to Medellín in recent years. Their presence made possible the city's data-driven "hot spots" strategy that focused resources on high-crime areas. The country as a whole still does not have enough police. For example, Bogota, a city of New York's population, has only half of Gotham's number of police officers. But after Gaviria and his associates developed a serious plan, Pinzon sensed an opportunity and deployed the big increase to Medellín (Colombia's police force is recruited, trained and led nationally under the Ministry of National Defense, which also controls the country's armed forces).

2. The increase in police personnel has been complemented by ongoing investments in technology, much of it funded locally. That includes new vehicle fleets for the police force, all equipped with GPS trackers in part to cut down on police misbehavior and corruption; closed-circuit TV cameras at numerous key public sites, increasingly empowered by facial-recognition technology; and smart phones for police, allowing for better dispatching and faster data searches. But they are complements to a well-trained and adequately sized security force, not substitutes. Those who would substitute high-tech gizmos for police or soldiers need to reassess; the empirical successes of recent years in places like Medellín do not support their beliefs. While encrypted smart-phone apps help the bad guys too, security officials we spoke with in Medellín believe that technology trends help them even more.

3. As noted, Gaviria and Gutierrez, like their predecessors, avoided classic Latin American political debates about whether security should take precedence over fighting poverty and social inequality. They have gone after both issues at once. Colombia, with its modest per capita annual income levels of around $10,000 and its recently slowing economy (due largely to falling oil prices), does not have the ability just to throw money at every problem. It still has a long ways to go in expanding education and employment opportunities while fighting homelessness, drug addiction and domestic violence in addition to reforming the justice system. But recognizing some crime problems cannot be solved by the police, city leaders have invested in long term solutions aimed at the roots of the criminality. Targeted programs like those focused on developing high quality infrastructure and improving public transit in high-crime neighborhoods of the city have created a greater trust between authorities and the populations they seek to protect. Growing trust, plus some innovations like anonymous tip hotlines, then lead communities to cooperate more with government institutions in providing information and other assistance in the ongoing effort to make Medellín safer.

All of this is very good news. But similar things are not happening as fast in most of the rest of the nation. Progress could also be imperiled, ironically, by a successful peace process with the FARC. If the nation and its political leaders declare victory against violence too quickly, and go too far in redirecting resources from security towards other admittedly important national priorities, favorable security trends could plateau or even be reversed. Instead, Colombia will need to continue to prioritize security, perhaps gradually shifting some resources from the armed forces to the police. The country will need to rebalance from fighting big drug kingpins and major insurgencies to providing what officials call "citizen security" for all. This should include a national plan that offers alternatives to violence to former guerillas, youth and other vulnerable populations so patterns of criminal behavior are interrupted and redirected to nonviolent, legal activities. A growing economy, but also targeted job programs and other activities, are crucial in this regard.

The implications of where all this winds up are very important—not only for Colombia but also for the United States. Latin America remains the most violent continent on Earth in terms of crime and urban insecurity. Colombia's successes to date are already inspiring other nations in the Andes, Central America and beyond in their struggles against drug cartels and insurgencies. Now, Medellín is showing how to attack gangs and criminal street violence as well. The United States should strongly support this process, including with possible increases in funding for Plan Colombia. Doing so need not be onerous. Plan Colombia has dropped in scale from its billion-dollar annual levels to something in the 300 million range. As Colombia reaches a crossroads, Washington should conditionally offer an increase in this fund, provided that Colombia writ large follows what Medellín has done and focuses its own resources on programs proven to work in addressing the urban security challenge. The benefits can be huge—not only for a country that is possibly America's closest friend in the region, but for Latin America as a whole, and thus the United States as well.

Article Link To The National Interest:

After St. Petersburg, What’s Next For Turkish-Russian Relations?

While the meeting between Turkish President Recep Erdoğan and Russian President Vladimir Putin on Aug 9 produced concrete results in restoring economic ties, the two countries remained divided on the question of Syria. However, they agreed to regularly meet and discuss their respective positions on Syria to reach compromise and solutions acceptable for both sides. The first such meeting is already underway in Moscow.

By Altay Atli
The Asia Times
August 12, 2016

More than eight months after the Russian jet downing incident, it seems clear now that the consequent standoff between Turkey and Russia has benefited no one.

In fact economic sanctions have cost both sides dearly, albeit in an asymmetric way, and the political impasse has not only undermined the bilateral relationship, but also served to further complicate the already spiraling situation in Syria.

This is why Mikhail Gorbachev, the last leader of the Soviet Union, said in an interview before this week’s meeting in St. Petersburg between Recep Tayyip Erdoğan and Vladimir Putin, that by talking to each other, the two presidents were doing the right thing as “efforts to rebuild dialogue and cooperation will be beneficial not only for Turkey and Russia but also to the world politics.”

While it is too early to tell to what extent the St. Petersburg summit will live up to Gorbachev’s expectations, particularly as far as world politics is concerned, one can safely assert that the event marked an important step forward in the normalization between the two countries that has started in June through mutual gestures, letters, phone calls and apologies.

This week, Erdoğan and Putin’s meeting in St. Petersburg showed that while there is consensus on the need to return economic and trade relations back to pre-crisis levels, political progress, especially with respect to regional issues, will be gradual, arduous, and beset with issues that defy simple solutions.

In terms of restoring economic ties, the St. Petersburg summit has produced, as expected, a number of concrete results. The two key energy projects are back on track: The 20-billion-dollar Akkuyu nuclear plant constructed by the Russian company Atomstroyexport near Mersin on Turkey’s eastern Mediterranean coast was declared “strategic investment” by the Turkish government, which means that the Russian company will enjoy a number of tax breaks, other exemptions and subsidies. The Turkish Stream pipeline project, which will carry Russian gas to Turkey, is also to go ahead and the two sides have agreed to finance the project on an equal basis.

In the meantime, as Putin and Erdoğan have announced, there will be a phased lifting of sanctions: restrictions on Turkish companies working in Russia will be gradually lifted, charter flights to Turkey will resume operation, limitations on trade of foodstuff and agricultural products will be eliminated and a joint investment fund will be established.

It appears that both sides are satisfied with these arrangements in the economic field. Russian and Turkish traders in Istanbul’s Laleli district, heart of the informal commerce between the two countries, joyfully claim that while 2016 is a lost year, things will be much better in 2017; tourism agencies in both Russia and Turkey are happy about being back in business; influential Turkish construction companies are looking forward to returning to their projects that were taken on hold. The crisis was a lose-lose situation for both sides; normalization will bring back the win-win state.

In the political realm, however, there is a different picture. Putin’s support for Turkey’s elected government in the aftermath of the failed coup attempt of July 15, which stood in stark contrast with what was perceived as the Western leaders’ lack of empathy, is appreciated and valued by Turks, and it is widely regarded, together with the growing economic ties between the two countries, as a factor pulling Turkey and Russia closer together.

With respect to regional issues, and particularly to the ongoing civil war in Syria, positions of the two sides are hardly reconcilable. While nobody expected a simple and straight solution to emerge from St. Petersburg, everybody wondered what in terms of concrete proposal would emerge from the Erdoğan-Putin meeting.

In an interview with the Russian news agency Tass, Erdoğan said “Russia is fundamentally the key and most important player in establishing peace in Syria. I believe it is necessary to solve this crisis with the help of mutual action by Russia and Turkey.”

These words indicated, on Turkey’s behalf, a willingness to cooperate with Russia in Syria. What came out from Erdoğan’s meeting Putting was the decision to “establish a joint military, intelligence and diplomacy mechanism” meaning that the two sides are to have special delegations with representatives from armed forces, diplomacy and intelligence services that will regularly meet and discuss the developments and their respective positions in Syria in order to reach compromise and solutions that would be acceptable for both sides. At the time of writing, the first of these meetings was already underway in Moscow.

Turkey’s foreign minister Mevlüt Çavuşoğlu, who was present during the St. Petersburg meetings, stated that the two governments agreed on introducing a ceasefire, providing humanitarian aid and finding a political solution. In other words, on a subject where they have long used to agree to disagree, Turkey and Russia have taken now one step forward and can agree on what needs to be achieved. The most difficult part, however, remains what is not agreed: how to achieve what needs to be achieved.

Russia would certainly love to have Turkey on board in Syria, and Turkey also makes the case for a participatory solution, as mentioned by Erdoğan in his interview with Tass: “If necessary, we’ll also involve Iran in the effort. We can invite Qatar, Saudi Arabia and America. In this regard, we can form a wide circle of participants.”

Such kinds of coalitions and alliances are likely to have an impact, but they also require a certain level of confidence among the participants. The dialogue mechanism that Russia and Turkey have launched in St. Petersburg aims to re-build and nourish precisely this kind of confidence.

In the following months, while economic ties between Turkey and Russia continue to gain steam toward pre-crisis levels, one can expect more meetings to be held between Turks and Russians through the military-diplomacy-intelligence mechanism brought to life in St. Petersburg, and Erdoğan is likely to meet with Putin more often as well.

Their job will be difficult as the differences between Turkey and Russia over Syria are profound; however, minimizing these differences through well designed mechanisms is perfectly possible, especially as long as the currently positive mood between the two sides prevails.

Article Link To The Asia Times:

The Cold War Spy Plane Fighting ISIS

Two years ago, the U.S. Air Force had hoped to retire the iconic U-2, first flown in 1955. But in the war on ISIS, it’s all spy planes on deck—and those plans for retirement have been put on hold.

By David Axe
The Daily Beast
August 12, 2016

The U.S. Air Force has quietly offered a rare glimpse of one of the more secretive warplanes involved in the war on ISIS.

On Aug. 6, Air Forces Central Command—the flying branch’s headquarters overseeing operations in the Middle East—released a video of a black-painted U-2 spy plane taking off and landing at what the command described as an “undisclosed location” on July 14.

The iconic spy plane’s mission, according to command, was to “support of Operation Inherent Resolve,” America’s campaign against ISIS militants in Iraq and Syria.

That undisclosed location is almost certainly Al Dhafra air base in the United Arab Emirates, where since at least 2002 the U.S. Air Force has stationed some of its most powerful aircraft for missions over Afghanistan and the Middle East. Commercial satellite imagery has confirmed the U-2’s presence at Al Dhafra. In 2005, a U-2 crashed at the sprawling Emirati base while landing after a spy flight over Afghanistan. Tragically, the pilot died.

Confirmation of the U-2’s role in the war on ISIS underscores the U.S. military’s challenge in finding and identifying militant forces across the roughly 26,000 square miles of mostly desolate terrain that the terror group controls in Iraq and Syria.

First flown in 1955, the U-2 has spied on America’s enemies in nearly every major U.S. conflict. In the ’50s and ’60s, U-2s operated by the CIA flew over the Soviet Union, photographing Soviet nuclear sites. In 1960, the Soviets shot down a U-2 over their territory and captured the pilot, Gary Powers. U-2s spied on Cuba during the 1962 missile crisis and later deployed to Vietnam. In the 1990s, the U-2s’ attention turned to the Middle East. After 9/11, the black jets went looking for terrorists and insurgents in Iraq and Afghanistan.

There’s no other plane quite like a U-2. Glider-like, with a single engine, the U-2’s straight, 103-feet-long wing helps it to fly for 12 hours or more at altitudes higher than 70,000 feet, giving its huge, high-tech cameras a wide view of the ground below. A U-2 could take detailed photographs of ISIS’s entire territory on just one mission.

The catch is, it’s hard to fly. The pilot must wear a special, pressurized flight suit not unlike an astronaut’s space suit. Visibility in the cramped cockpit is poor. That plus the U-2’s unique aerodynamics make the plane hard to land. Whenever a U-2 comes in for a landing, an off-duty pilot hops in a government-issue sports car and escorts the descending plane along the runway, radioing guidance to the on-board pilot—as evident in the new video.

Upgraded with better engines, sensors, and communications, the U-2s are still on the cutting edge of technology more than 60 years after entering service. “The U-2 gives you the ability to carry heavy sensors that produce high-fidelity images and intelligence to the decision-maker, and is incredibly responsive,” Col. Douglas Lee, commander of the 9th Reconnaissance Wing at Beale Air Force Base in northern California, told Air Force, a trade publication. The 9th Reconnaissance Wing maintains the U-2s and deploys them to overseas bases such as Al Dhafra.

But as recently as two years ago, the Air Force had hoped to quickly retire all 33 of the U-2s. The plan at the time was to replace the U-2s with new Global Hawk spy drones. The Global Hawk can’t carry all the sensors that the U-2 does, but with no human aboard needing to eat or sleep, it can stay aloft far longer than the manned plane can. The Air Force was willing to trade the U-2’s power and flexibility for the Global Hawk’s endurance and hoped to save money by shrinking the overall spy-plane fleet.

But then came ISIS. With militants hiding out in tens of thousands of square miles of desert and blending in with local populations, the demand for intelligence skyrocketed. ISIS’s rise compelled the Air Force to reverse its plans to partially stand down its fleet of roughly 300 Predator and Reaper drones in order to allow their operators to rest and train.

Likewise, and with a little encouragement from Congress, the Air Force decided to keep the U-2 and the Global Hawk in the inventory until at least 2019. Not coincidentally, Air Forces Central Command released video of a Global Hawk—apparently also at Al Dhafra—the same day it released the U-2 video.

But as ISIS swept through Iraq and Syria and later gained a toehold in Libya, even that larger spy force proved inadequate. “If there’s one piece that I know that the Combined Joint Task Force and the ground component ask for is more ISR,” Air Force Lt. Gen. Charles Brown told reporters in May, using the military acronym for “intelligence, surveillance and reconnaissance.”

“What it helps me to do is develop targets so we can strike at the same time as we develop those targets,” Brown added. “The more ISR I have, I can minimize the risk to civilian casualties and continue the precision air campaign that we have.”

The push for more intelligence on ISIS has compelled the Pentagon to deploy to the Middle East pretty much every spy plane it can muster. Operating without official acknowledgement and often in disguise, the aircraft aren’t always obvious to casual observers. Indeed, the presence in Iraq of one incognito U.S. Army spy plane became evident only after it crashed in Kurdish territory in March.

The U-2s have operated under their own veil of secrecy. The Air Force’s recent video release lifts that veil, just a little.

Article Link To The Daily Beast:

Bernie Sanders’s Plan For Perpetual Revolution

The senator has launched a new organization, Our Revolution. If he takes out Debbie Wasserman Schultz in the Aug. 30 primary, he has muscle. But what if his guy loses?

By Barrett Holmes Pitner 
The Daily Beast
August 12, 2016

Now that Bernie Sanders can no longer become the Democratic presidential nominee, his campaign has shifted focus to his new project Our Revolution. The pretensions to the presidency are gone, but instead of going quietly into the night or vociferously campaigning for Hillary Clinton, he has doubled down on his revolution, which increasingly resembles a political insurgency.

Phase one of Sanders’s new Our Revolution appears to be rehashing a drama from his unsuccessful presidential bid and stoking divisions within America’s political left. This is not a welcome development.

In a fundraising email sent out to supporters, Sanders stressed the need to support progressive candidate Tim Canova and defeat former Democratic National Committee chair Debbie Wasserman Schultz in the Democratic primary for Florida’s 23rd congressional district held on August 30. Sanders is not content with her resignation as the chair of the DNC, and now he wants to use his national fundraising network of supporters to help remove her from Congress as a statement of his newfound political clout.

The rhetoric Sanders uses to describe Canova’s campaign runs parallel to his own. Both men are supposed to be the true progressives in the race, started out as blips on the political radar, and now thanks to small donations and passionate supporters they can topple the political establishment that seeks to supposedly suppress their voices. Sanders famously requested $27 to support his campaign; for Canova he’s asking only $3.

And of course, Sanders is using the leaked DNC emails to present Wasserman Schultz as untrustworthy. Likewise, Canova has followed suit by filing an FEC complaint against her saying that she has “used her position with the DNC and the resources of the DNC to improperly benefit her congressional campaign.”

Since Canova is backed by Sanders and this election is being positioned as a pivotal moment in the future of the Democratic party, Wasserman Schultz has brought out her big guns too, and on Tuesday Clinton detoured her campaign to Florida’s 23rd to endorse Wasserman Schultz.

Wasserman Schultz is certainly an embattled politician, and Sanders can definitely smell blood as he attempts to put another progressive flag on the map. But this is more than just a vendetta against Wasserman Schultz. Sanders is attempting to remake the Democratic Party in his own image, and over the next 18 days, he intends to challenge Wasserman Schultz, Clinton and the DNC for political supremacy.

But this may be a battle that he cannot win. According to a poll commissioned by Canova following the Democratic convention, he trails Wasserman Schultz by 8 points. Clinton also won both Broward and Palm Beach County, which make up the district, with over 70 percent of the vote. It is unlikely that Canova will win this election, just like it was unlikely that Sanders would win the Democratic nomination.

If Sanders and Canova miraculously defeat Wasserman Schultz in the primary, the Democratic Party will have to take greater notice of his movement. But is that a political development anyone actually needs during this election cycle?

Considering the stakes of this election—a Trump presidency, and congressional elections where the Democrats could reclaim the Senate and close in on the Republican majority in the House—squabbling over Florida’s 23rd is an unnecessary distraction that encourages political division and polarization.

When I first heard of Sanders’s Our Revolution, I hoped that it intended to coalesce his supporters around a new, viable third party that could make a coalition with and aim to push the Democratic Party further to the left. Sanders has spent decades in government caucusing and collaborating with Democrats, so I hoped his new revolution embodied this Sanders, and not this latter-day version, who appears increasingly combative. This revolution would be thinking long term and beyond 2016. It could see that a liberal administration that is open to his progressive ideals combined with his network of supporters from across the nation would give him the opportunity to build the third political party that many Americans, including his supporters, are yearning for.

However, thus far, his intentions are far too reminiscent of the myopic, shortsighted Tea Party movement that intended to remake the Republican Party from the inside out. This revolution was also an insurgency, and its willingness to shun compromise in an attempt to hopefully find a truer form of conservatism has only created chaos, instability and a fractured GOP.

Donald Trump has been the beneficiary of this conservative disarray, and in his ascendency he has only stoked the fear and division that has consumed the GOP since the Tea Party’s revolution. Most liberals understand how imperative defeating Trump in November remains, but Sanders instead has opted for ousting Wasserman Schultz.

I get it, Sanders wants to take down the big bad Wasserman Schultz, and if Canova wins other Democrats will know that they should not mess with Sanders and his movement. But who are these other Democrats that are supposedly hell bent on suppressing progressive change? Sure, Sanders and other Democrats disagree on some policies—TPP is one of the biggest—but the Democratic convention was a veritable Sanders love fest, and the DNC compromised with Sanders and made progressive changes to the party platform. Sanders might not have gotten everything he wanted, but he got more than most expected.

Removing Wasserman Schultz from Congress won’t help Democrats and progressives defeat Trump or reclaim the Senate or House. And if Sanders/Canova lose on August 30 Our Revolution will lose momentum before it even got started. A true revolution should not hinge on something this miniscule.

Article Link To The Daily Beast:

Craft Beer’s Looming Crisis

Find out if your favorite local or national craft brand is in danger of disappearing.

By Lew Bryson
The Daily Beast
August 12, 2016

You may want to grab a barstool before you hear this: Craft beer has some very serious issues.

While things certainly seem bubbly on the surface for the category—years of double-digit sales growth have led to a large increase in brands and an overwhelming selection of IPAs, stouts, saisons and just about every other conceivable type of beer on store shelves—growth is slowing, putting pressure on the industry. What makes matters worse is that breweries are still opening at a rapid pace around the country and unfortunately, many of those bottles on the shelves are old or have gone bad.

And there is also the fact that fruit beers are flooding the market, which is truly a sign of the apocalypse. (Mango IPA, anyone?) This will not end well.

You might be tempted to dismiss these warning signs and order yourself another pint of your favorite cask-conditioned session brew. Don’t. This is not a prediction, it’s a replay. These events, commonly referred to by people in the business as “The Shakeout,” happened before, in 1996. Some of the bigger brewers went out of business, others were bought by competitors, and sales of craft beer—the term that was then just beginning to replace the word “microbrew”—went flat for five years.

There is increasing speculation (and worry) that the bubble will burst again.

The main concern is that despite the hype around craft beer, its rapid growth may have peaked. Thanks to an explosive decade, where the category went from representing under 4 percent of total beer volume in the U.S. to more than 12 percent in 2015, sales during the first half of 2016 were considerably slower.

At the same time, expansion continues unchecked: Roughly three new breweries a week opened in 2015 alone. The Brewers Association, the category’s official organization, has called for increased quality control, with director Paul Gatza citing beers that “were not good.”

And then there are all those fruit beers. “The signs you point out are humorous, but also serious,” admits Bill Covaleski, co-founder of Victory Brewing in Downingtown, Pennsylvania, which he opened in early 1996 as things started shaking the first time. He remains bullish as long as “everyone spends their money wisely, on quality control and assurance.”

But will everyone spend money wisely? Will young brewers, who may have been in grade school in 1996, learn the lessons of the last correction?

I hope so. Fortunately, the industry has always had a strong tradition of cooperative competition, sharing information and experience among brands. Plus, the Brewers Association has invested in setting up quality assurance standards. “If [new brewers] aren’t paying attention to them, they’re foolish,” says Covaleski.

New brewers may actually have an advantage, the same one their predecessors had over the mainstream brewers: fresh ideas paired with a quick decision cycle. And as consumers become increasingly interested in locally-made products, there has been a rise in beer bought in brewery tasting rooms, which is much more profitable for a brand considering it cuts out several middlemen from the transaction.

So much beer is purchased there, in fact, that some people think category sales are significantly under-reported by retail sales-tracking services like IRI or Nielsen, which rely on register data from large store chains. Industry consultant David “Bump” Williams, who once ran IRI’s beer data division, thinks the amount is significant. He estimates that 20 percent or more of total craft beer sales go unreported. (He also points out that for some small breweries, meaning those that produce less than 20,000 barrels a year, direct sales are the only way their brews are available.) It’s a rapidly growing phenomenon, and one that could very well account for a percentage of the disappearing growth rate.

But even if one figures in direct brewery sales, the recent meteoric rise of craft beers can’t go on forever. If sales of the category continued at 2015’s rate of 12.8 percent, the entire U.S. beer market would be, well, completely craft in 17 years. That’s simply not going to happen.

At some point, things must slow down. When that will happen is anybody’s guess, but it will probably be between six months and three years from now. The magnitude of the downturn, however, is harder to predict. Some of the businesses are in good shape, but too many are undercapitalized or overextended. There is a lot of money flowing into the industry, but not all of it is backed with due diligence.

“I feel that it’s not going to be widespread, but there’s going to be some bloodletting,” says Covaleski. “It was personal back [in 1996], because there were so few of us. We knew each other. This time around, there will be more people affected.”

But, as it was 20 years ago, the change will be a correction, and the surviving brewers will have the opportunity to grow into large national brands. Unfortunately, we could lose as many as 500 breweries in the process, though eventually the industry will emerge even healthier—just like it did the first time around.

How can you tell if your local or favorite brewer is in trouble? It won’t be easy. Some of those that fell the hardest in the Shakeout were riding high. Some crashed because of bad management, some because of bad business models and some simply failed to respond to changes in taste, like a sudden shift away from sweet raspberry-flavored beers.

Brewers that will survive will have some common traits. The winners will be deeply enmeshed in their local markets and locked in with their communities. Equally important, their bottled or canned beers will still taste great at least three months after packaging. They won’t discount. When they come out with new beers, they will be leaders, not followers, with innovative, original ideas.

And just maybe there will be less fruit beer, but that remains to be seen.

Article Link To The Daily Beast:

Friday, August 12, Morning Global Market Roundup: Asia Rises On Wall Street's Record Highs, China Data Misses Forecasts

By Nichola Saminather and Shinichi Saoshiro
August 12, 2016

Asian stocks inched up on Friday, after a surge in oil prices helped propel Wall Street to record highs overnight, while Chinese economic indicators that missed expectations did not dent gains in mainland shares.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS nudged up 0.2 percent. It was on track to gain 1.9 percent for the week.

Both China's CSI300 index .CSI300 and the Shanghai Composite .SSEC rose about 0.5 percent after fixed asset investment, retail sales and industrial output all rose but were below expectations. Both indexes were headed for gains of about 1.4 percent for the week.

Fixed asset investment from January to July increased by 8.1 percent from a year earlier, the slowest rate in more than 16 years, compared with expectations for 8.8 percent.

July retail sales increased 10.2 percent, versus 10.6 percent the previous month and a forecast 10.5 percent. Industrial output rose 6.0 percent from a year earlier, slowing from June's 6.2 percent and just missing forecasts of 6.1 percent.

Hong Kong shares .HSI rose 0.7 percent and were at their highest in more than eight months.

Japan's Nikkei .N225 rose 0.7 percent on a slightly weaker yen, and is poised to end the week 3.7 percent higher.

South Korea's Kospi .KS11, which touched the highest level since July 2015, was little changed. Australian stocks gained 0.3 percent.

The S&P 500 .SPX, the Dow .DJI and Nasdaq .IXIC all closed at historic highs on Thursday for the first time since 1999 on higher crude oil and upbeat corporate results. [.N]

The pan-European FTSEurofirst 300 stock index .FTEU3 also jumped, climbing 0.85 percent to its highest close since late May.

MSCI's 46-country All World index .MIWD00000PUS held close to a one-year high touched overnight.

Supporting investor appetite for risk, oil prices climbed more than 4 percent overnight after a Saudi oil minister hinted at possible action to stabilize prices and triggered a round of buying. [O/R]

They retained that momentum on Friday, with U.S. crude futures up 0.5 percent at $43.72 a barrel CLc1, on track to gain 4.5 percent on the week.

Global benchmark Brent crude LCOc1 climbed 0.3 percent to $46.18, set to end the week 4.6 percent higher.

"Asia Pacific markets are set to finish the week on a high following strong leads from European and U.S. investors," wrote Michael McCarthy, chief market strategist at CMC Markets.

"Industrial commodities rose, led by oil, and overnight trading displayed 'risk on' characteristics despite the lack of an obvious trigger. Important data from China may change the course of the trading day."

Global markets will also sift through the string of U.S. data, notably retail sales, due later in the session for latest cues about the world's largest economy and whether it is robust enough to withstand further monetary tightening.

U.S. retail sales are expected to show a 0.4 percent monthly increase in July, according to the median estimate of 64 economists polled by Reuters. ECONUS

In currencies, the dollar rose after San Francisco Fed President John Williams told the Washington Post that the U.S. central bank should raise rates this year because of improving labor market conditions and the likelihood that inflation is heading higher.

The greenback inched up 0.1 percent to 102.035 yen JPY= after gaining 0.7 percent on Thursday, and is heading for a 0.25 percent weekly rise. The euro was steady at $1.11375EUR= after losing 0.3 percent overnight.

The dollar index, which tracks the greenback against a basket of six major peers, rose 0.1 percent to 95.924, but was on track for a loss of 0.3 percent for the week.

The New Zealand dollar slipped 0.1 percent to $0.7202 NZD=D4 after surging on Thursday to $0.7351, its highest in more than a year after the Reserve Bank of New Zealand cut rates by 25 basis points to 2.0 percent, a smaller cut than some investors had expected.

The Australian dollar dipped 0.3 percent to $0.7678 AUD=D4.

Article Link To Reuters:

Oil Prices Rise On Talk Of Possible Exporter Moves To Prop Up Market

By Henning Gloystein
August 12, 2016

Oil prices rose by around 1 percent on Friday, extending gains from the previous session on expectations that exporters could talk at an upcoming meeting about ways to prop up a market that continues to be dogged by a supply overhang.

International Brent crude oil futures were trading at $46.40 per barrel at 0536 GMT, up 36 cents, or 0.8 percent, and earlier hitting a three-week high at $46.66.

U.S. West Texas Intermediate (WTI) crude futures were at $43.98 a barrel, up 49 cents, or 1.1 percent, and touching their highest since July 25 at $44.17.

Both price benchmarks rose more than 4 percent on Thursday.

Markets were pushed up as Saudi Arabia's energy minister Khalid al-Falih said in a statement late on Thursday that oil producers would discuss potential action to stabilize oil prices during a meeting next month in Algeria.

"Talk of production cuts in the oil market saw prices surge overnight," ANZ bank said on Friday.

An outlook published by the International Energy Agency (IEA) that said it expected the supply and demand balance to tighten towards year-end also supported prices.

Traders said an 8.1 percent drop in China's oil output in July to a five-year low of 16.72 million tonnes also lifted prices because it would mean Asia's biggest economy has to import more crude.

Oil prices, however, are still some 12 percent below their last peak in June as brimming storage tanks and production that exceeds consumption weighs on markets.

In physical oil markets, Iran set its September official selling price for light crude to Asia at a discount of $0.85 per barrel versus benchmark Oman/Dubai prices.

This made the Iranian light grade $1.30 a barrel cheaper than in the previous month, the latest sign that exporters are willing to accept discounts in return for market share.

AB Bernstein said global oil production increased by almost 0.8 million barrels per day (bpd) in July, compared to the previous month, to 97.01 million bpd, while commercial inventories increased by 5.7 million barrels to 3.09 billion barrels in June.

Despite relatively cheap crude feedstocks prices, analysts said refinery margins, known as cracks, were poor as refiners continued to make more fuel than the market can absorb, resulting in brimming storage tanks around the world.

For July, Bernstein put Brent cracking margins at $3.02 per barrel (down $1.83 a barrel from June); U.S. Gulf Coast cracking margins at $5.06 a barrel (down $0.03); and Singapore cracking margins at $4.74 per barrel (down $1.03).

Article Link To Reuters:

Clinton Cashes In On Trump's Bad Week

By Alexis Simendinger
Real Clear Politics
August 12, 2016

Hillary Clinton’s presidential bid got a boost from Donald Trump this week, an assessment widely shared even among Republicans, including some who recently hopped aboard the vote-Clinton bandwagon.

With Trump’s national poll numbers slipping behind Clinton, and the GOP nominee compelled to explain his most recent eyebrow-raising assertions that Clinton is a “co-founder” of the ISIS terror group, the Democratic nominee skipped past her own vulnerabilities and turned up the heat on her adversary.

Trump sparked a multi-day political firestorm over his veiled remark at a rally that to some listeners suggested he invited Second Amendment supporters to stop Clinton from appointing liberal justices to the Supreme Court, perhaps through violence. Trump later said he meant that gun-rights supporters wield political clout.

During a Detroit speech Thursday that compared Trump’s economic proposals to her own, Clinton sought to be the antithesis of flashy with her familiar embrace of better national roads and bridges (and the construction jobs created), along with what she called her “serious, steady leadership.”

While Trump was busy digging himself out of rhetorical ditches, Clinton was presenting herself to independent and moderate GOP voters as a sort of hard-hat problem solver intent on filling America’s proverbial potholes.

“I just don’t think bullying and insults are going to get things done,” Clinton said Thursday while rebutting Trump’s own Detroit economic speech, which he delivered Monday.

The Republican nominee’s tax-cutting proposals and “outlandish Trumpian ideas” would benefit the Trump family, Clinton argued (albeit ignoring her own millionaire-beneficiary status).

“He wants America to work for him and his friends,” she said.

From this week until Election Day, Clinton hopes to hammer home contrasts between her temperament and proposals to benefit working families, as measured against Trump’s unpredictable behavior and proposals that would bolster the rich.

Clinton plans to release her most recent tax return, while suggesting that Trump ducks behind what he says is an IRS audit, about which no official corroboration has been publicly disclosed, despite repeated media inquiries. She and running mate Sen. Tim Kaine tell audiences the self-proclaimed billionaire is hiding something, perhaps that he is not as wealthy as he claims, pays no federal taxes, or is stingy with his charitable giving.

Clinton’s campaign strategy is not to kick back and count on the real estate mogul to implode, Democrats said, but rather to press a multi-faceted and reinforcing narrative that Trump is a loose-lipped, self-involved hazard to the economy and national security, including among potential GOP skeptics who never imagined casting a presidential ballot for a Democrat, a woman or a Clinton.

The array of Republican elected officials, former candidates and national security experts who now say they will vote for Clinton gives undecided GOP voters persuasive cover to follow suit.

Trump sent shivers through the Republican National Committee Thursday when he said he is prepared to lose the election.

"I'm a truth teller. All I do is tell the truth. And if at the end of 90 days, I've fallen short because I'm somewhat politically incorrect, even though I'm supposed to be the smart one and even though I'm supposed to have a lot of good ideas, it's OK. I go back to a very good way of life," Trump said during a CNBC telephone interview.

The former secretary of state and Kaine, her Virginia vice presidential pick, are maintaining brisk August travel schedules that cycle through battleground states to court voters, and to raise money, including from contributors in red states. On Monday, Clinton will stump with help from Vice President Joe Biden in his hometown of Scranton, Pa., which was where her late grandfather once worked.

Clinton is touting her economic plan and skewering Trump via $13.6 million in television ads broadcast during the Olympics. The investment aims to locate American viewers of all ages as they watch the popular summer games. Trump has not spent a dime on TV ads.

Online, Clinton’s team this week pursued small-dollar donations by repeating Trump’s “Second Amendment” remarks to Democratic supporters. “It doesn’t matter what he later says he meant,” wrote Clinton Campaign Manager Robby Mook. “Donald Trump must lose this election.”

The GOP candidate’s penchant for attracting media attention, not all of it planned or positive, favored Clinton this week by overshadowing damaging reports describing email evidence of a Clinton Foundation donor request posed to then-State Department aides. The campaign and the donor referenced in the email communications denied any favors or special access involving Clinton or any State Department officials.

CNN, citing one unnamed source, reported that unidentified FBI field agents approached the Justice Department with a request in early 2015 to investigate Clinton Foundation ties to the State Department, but were turned down because a previous probe produced insufficient evidence.

“There might not have been a positive headline about Hillary Clinton since the end of the Democratic convention, but it doesn’t matter,” said Dan Schnur, director of the Jesse M. Unruh Institute of Politics at the University of Southern California and a veteran adviser during four GOP presidential campaigns.

“Clinton has not done a particularly great job for herself, but the good news for her is that Trump has been doing a particularly effective job of that all on his own,” he told RealClearPolitics.

Article Link To Real Clear Politics:

Has The GOP Lost A Generation?

By Noah Rothman
August 12, 2016

You’re about to hear quite a lot—again—about the Republican National Committee’s “Growth and Opportunity Project.” That was the official name of he party’s “autopsy” on the 2012 election. In the wake of Mitt Romney’s defeat, Republicans focused extensively on the party’s inability to appeal to the core of Barack Obama’s coalition: minority voters and women. It also noted the party’s problem with young voters. In 2016, Donald Trump and the party he now leads set fire to the “autopsy” and disregarded its recommendations. The problems the party faces with these demographics have only been exacerbated by Trump’s campaign. That is particularly true for the youngest elements of the electorate. Given the drubbing the GOP appears set to endure in the fall, the question the party must ask itself is whether it has alienated an entire generation for good.

Research suggests that an individual’s first vote, particularly their first presidential vote, is a powerful determinative force that shapes his political perceptions and self-identification for most of his adult life.

“The clearest pattern is that younger voters who turned 18 during the presidencies of Clinton, Bush or Obama –the younger members of Gen X and the Millennial generation – have typically voted much more Democratic than the average,” read Pew Research Center’s report on political affiliation across generations, citing data spanning nearly 20 years. Their conclusion, that the national political environment and electoral events that occur when a voter reaches 18 are formative, is supported by the findings of the New York Times’ “Upshot” team. They found that political events and the sitting president’s approval ratings “at age 18 are about three times as powerful as those at age 40” when gauging effects on political identity.

This isn’t to say that these voters cannot be wooed by the party with which they do not identify later in their adult life, but that first impressions are by far the most important.

Trump’s performance among young voters is among his worst.

A national Marist University survey released last week showed Trump drawing the support of 17 percent of young voters, well behind Hillary Clinton’s 53 percent and “neither,” which garnered 26 percent of the youth vote. Trump fares no better in surveys that include all the options on the ballot in November, including Libertarian candidate Gary Johnson and Green Party nominee Jill Stein. A YouGov/Economist poll found 22 percent of voters “under 30” backing Trump. Fox News’ latest poll found Clinton winning 50 percent of voters “under 35” backing Clinton with 23 percent supporting Trump to 19 percent backing Johnson—well within that sub-sample’s margin of error. Investors Business Daily’s latest survey showed the youngest eligible voters are the most repelled by their choices in 2016. That survey found Trump in fourth place with the backing of just 12 percent of the Millennial vote.

Now, young voters are notoriously unlikely voters, and they appear unenthusiastic about their choices in November. It is therefore reasonable to assume that young voters will make up a smaller portion of the electorate this year than they had in past presidential cycles (in 2012, voters aged 18 – 24 made up 11 percent of the electorate, down from the high watermark of 2008, when young voters made up 18 percent of the vote).

Cold comfort for Republicans. This year, Millennials surpassed Baby Boomers as the largest living generation in America. They will grow up, and their turnout rates will increase as they age. They voted enthusiastically for Barack Obama, a president who will likely leave office with a majority of Americans approving of the job he did as president. The Republican brand to which they’ve become accustomed is represented by a man they find unambiguously racist, bigoted, and backward-looking. An entire generation’s formative period will be one in which identifying with Republicans is socially unacceptable.

Hillary Clinton is by no means the draw for young voters that Obama was, and Republicans have a deep stable of young officeholders to whom they can look next year for youth appeal. But Republicans are likely to lose a lot of their talent at the state and federal level if Trump proves to be a drag on the ticket. The GOP cannot simply wait until young voters become homeowners and start paying income taxes. That is a recipe for permanent minority status. It will likely take the utter repudiation of the approach that the party took in 2016 to focus Republican voters on the prescription the party’s leaders acknowledged was necessary in 2012. In November, the Republican Party may actually benefit from the kind of thrashing it needs to get back on course.

Article Link To Commentary:

Saying Farewell To A-Rod: It’s A Well-Timed Breakup

By Post Editorial Board
The New York Post
August 12, 2016

Friday marks Alex Rodriguez’s last day in Yankee pinstripes, in a well-timed breakup that ends 12 years of ups and downs.

With the Yanks firmly in rebuilding mode, and A-Rod plainly far from his peak, early retirement (to a gig as special adviser to owner Hal Steinbrenner) is best for both sides — as is the whole low-drama character of the star’s last week.

“No athlete ever ends his or her career the way you want to. We all want to play forever. But it doesn’t work that way,” Rodriguez noted. “Accepting the end gracefully is part of being a professional athlete. Saying goodbye may be the hardest part of the job, but that’s what I’m doing today.”

It was a remarkable career: The three-time MVP and 14-time All-Star ends his 22-year career with more than 3,100 hits and nearly 700 homers, putting him at fourth place on the all-time home-run list behind Barry Bonds, Hank Aaron and Babe Ruth.

Plus, yes, the use of performance-enhancing drugs, the suspensions for same, the lawsuits over the suspensions . . . and the off-field antics that landed him so often on Page Six.

Now it’ll all be done with. Perhaps the happy memories will dominate: The nine post-seasons, the 2009 World Series title, the records smashed, the genuine grace on the field.

“I love this game, and I love this team,” Rodriguez said as he announced his exit. And sometimes love means letting go.

Here’s to a graceful exit, and a brighter future for the team — and for the man who wore No. 13.

Article Link To The New York Post:

Americans Aren’t Eating Burgers Anymore

By Claire Atkinson
The New York Post
August 12, 2016

A new chapter in the burger wars is starting to sizzle — but don’t expect dollar meals at any of these joints.

The latest burger battle is being waged in the $3 billion better burger segment — where Five Guys, Shake Shack, Smashburger and at least 30 others serve up $8-plus burgers made with fresh beef and no preservatives.

The sector was red hot a decade ago — and attracted lots of new entrants, many with a plan to blanket the country with stores.

But business began to fall several years ago — and with many chains still pursuing aggressive expansion plans, some are predicting a shakeout is coming.

For starters, Americans are eating less beef than they used to — about 1.2 fewer pounds per person per year since 2012, according government data.

Tastes are shifting to chicken, USDA data show.

The shift — and the crowded nature of the sector — was in full view on Wednesday when Wall Street darling Shake Shack reported same-store sales gains slowed more than analysts had forecast.

The Danny Meyer chain saw sales gain at its existing stores slow to 4.5 percent — compared with 12.9 percent a year ago and 9.9 percent just a quarter ago.

“It seems like the mid-scale burger market, for a $10 or $12 burger, is only so big and there have been too many stores that have popped up, outstripping demand,” said John Gordon, principal of Pacific Management Consulting Group.

Privately held Five Guys, with some 1,000 stores, is the largest player in the better burger field — and it’s hit some speed bumps, say industry experts who point to struggling franchisees the company bought to avoid closing the stores.

“Five Guys has dramatically slowed down,” said Bob Goldin, vice chairman of Technomic, which tracks the restaurant industry.

Five Guys did not return a call for comment.

Smashburger, with 372 stores, is the second-largest in the sector. It has also bought back some of its restaurants from franchisees, in Las Vegas, San Diego, New Jersey, Dallas and Phoenix.

The buybacks are not a sign of weakness for the 9-year-old privately held company, said co-founder Tom Ryan.

Smashburger, which serves Angus beef, salads and sides like veggie frites and about eight different chicken sandwiches, is opening 50 to 60 restaurants a year and has signed the franchise rights for 200 stores in 2016, Ryan said.

Enter West Palm Springs, Fla.-based BurgerFi, the fastest-growing of the better burger joints, with 89 eateries and another 11 set to open this year.

There are 175 in the pipeline, according to Chief Executive Corey Winograd.

With so-called $10 CEO Burgers, $7 VegeFi burgers and sales of $1.2 million per store on average, BurgerFi hopes to muscle its way through the crowded sector.

It hopes to go public.

But unlike Shake Shack, which is targeting premium sites in major cities, BurgerFi has its sweet spot in bedroom communities like Silver Spring, Md., Winograd said.

BurgerFi is also making a big bet on a non-beef item.

It wants to take its veggie burger, made from quinoa and lentils, into retail stores.

“We think our VegeFi is a game changer,” Winograd said.

Article Link To The New York Post:

What The Polls Are Missing About Trump

By Jonathan Bernstein
The Bloomberg View
August 12, 2016

Donald Trump “needs a miracle” to win, says Stuart Rothenberg, an old-style political analyst. On the other hand, political scientist Drew Linzer estimates Trump’s odds at about 1 in 4, or as he puts it: “Flip a coin twice: if you get two heads, that’s President Trump.” Nate Silver’s “polls-plus” model has Trump with a 25 percent chance, too.

Linzer’s and Silver's estimates are somewhat generous to Trump compared with those of some other forecasters, but none of them is in the "needs a miracle" range.

Here's how to read what polling forecasters say -- and why their estimates can't fully explain how difficult a Trump comeback might be.

Predictions such as those at FiveThirtyEight basically do two things. First, they construct averages from all the polls to estimate where the contest is right now. Then they adjust for how things normally change given the time remaining before the election.

These predictions could go wrong if the polls themselves are systematically wrong for some reason. This can happen, although they are unlikely to be off by more than a percentage point or two, and that can be in either direction.

The predictions can be wrong in a different way, even if the polls give an accurate snapshot of current voting intentions. They might not be able to account for factors that aren't usually present between now until Election Day.

Here are three ways in which Trump is different, all of which would appear to work against him: 

1. His inability to control his mouth. Normally, a candidate's gaffes turn out to be unimportant; they may dominate the news for a day or two, but then go away. Trump has proved that he can't stop himself from making wild and controversial statements, and then he litigates them on cable news and at his rallies for days after. Some effects from this are already reflected in current polls and partially account for his abysmal favorable-unfavorable numbers. Normally we could expect some voters to return to him after the short-term fallout fades. Not so with Trump so far in the general-election campaign.

2. His lack of a proper campaign. This hurdle is already incorporated in the models since part of Hillary Clinton’s lead is presumably due to Trump's lack of response to her ads against him. Other consequences could include the impact of Clinton’s professional get-out-the-vote operation compared with Trump’s failure to launch one (he’s relying on formal party organizations to do it for him). This could cost Trump a percentage point or two that may never show up in the polls before Election Day.

3. His failure to unify the party. It guarantees that leading Republicans will condemn whatever outrageous things he says, thus sending mixed messages to Republican voters.

It’s impossible to estimate the magnitude of these three effects. But if current poll-based predictions give Clinton a 75 percent to 85 percent chance of winning, then adding in the rest of what we know probably pushes Trump up to the “needs a miracle” mark.

Article Link To The Bloomberg View:

Abenomics Won't Work. And That's OK.

By Chen Zhao
The Bloomberg View
August 12, 2016

Japanese Prime Minister Shinzo Abe recently announced plans for yet another round of aggressive economic stimulus. But it's doubtful that this new initiative will make much difference. The problem is that the policy objectives of so-called Abenomics are ill-conceived to begin with -- and given demographic reality, they'll never work.

The stated goal of Abenomics -- an ambitious combination of fiscal stimulus, monetary easing and structural reforms -- is to end chronic deflation and revive Japan's stagnant growth. Judging by these two objectives, the program has clearly failed. Growth in real gross domestic product has hovered between 0 percent and 0.5 percent since 2009. So far this year, it's back to 0 percent. There was a brief surge in inflation on the back of a falling yen in 2014, but with the currency having rebounded, prices have resumed falling.

That's because Japan's "economic problems" are almost entirely rooted in its demographics. Its labor force has shrunk 0.17 percent a year since 2000. Last year, its population declined for the first time in almost a century, with significantly more Japanese dying than being born. More than a quarter of its citizens are over age 65.

It's entirely possible that near-zero growth is the natural state for a mature economy in such circumstances. In other words, there's nothing wrong with Japan: Increasing productivity growth, as reflected by rising per-capita GDP, means that the standard of living for most Japanese continues to improve, even as the economy has almost stopped growing because there are fewer people producing goods and services each year.

How about mild deflation? Isn't that a worrisome ailment? Not really. In fact, modestly declining prices could also be natural for an economy with rising productivity but a shrinking labor force. On one hand, a shrinking population tends to shrink demand. On the other, sustained productivity growth means an ever-increasing aggregate supply. In combination, these factors imply that aggregate demand has become chronically deficient. The general price level falls as a result.

When you accept these premises, the conceptual flaws in Abenomics become obvious. The underlying growth rate for Japan's economy can only be increased if there's a significant technological shock driving up productivity, or if policy makers are willing to accept immigration on a large scale to reverse the shrinking labor force. Since Abenomics can't influence technology, and doesn't address immigration policy, it will continue to fail, no matter how hard the government tries.

The result is that Japan's economy, known as "the rising sun" when it dominated the world some three decades ago, will keep shrinking in relative size. And Japan will return to its rightful place as a prosperous island with high accumulative wealth and an affluent population, but with little impact on the world economy.

With his Liberal Democratic Party having won two-thirds of the seats in Japan's legislature, Abe is likely to get his way on more forceful fiscal policy. Although fiscal stimulus will probably be more effective than monetary policy in generating aggregate demand, such an effort must be sustained: The lack of demand in Japan is chronic, and a one-off fiscal stimulus won't jolt its economy into a lasting expansion. In the meantime, the Bank of Japan must be ready to take additional easing action to prevent any additional rise in the yen.

With Japan's budget already severely constrained by accumulated deficits and debt, there's no chance that the government will sustain fiscal stimulus on the necessary scale. And it's unlikely that the Bank of Japan will augment its bond-buying efforts. We can be almost certain, in short, that the second round of Abenomics is dead before arrival.

Article Link To The Bloomberg View:

Why Donald Trump Is Dangerous For Eastern Europe

Trump’s meandering opinions are on par with the manipulations that allowed Russian forces to slip so easily into Ukraine.

Politico EU
August 12, 2016

The escalating situation in Crimea and the U.S. presidential campaign have more than a few things in common, but two of them are Russian President Vladimir Putin and a dearth of facts.

It remains unclear exactly what happened on the occupied peninsula to trigger such a strident response from Russia, which accuses Ukraine of supporting terrorist attacks aimed at destabilizing its hold over Crimea. The confusion is by design.

“It looks like the people who have seized power in Kiev and continue to hold on to it, instead of looking for the compromises that we have talked about…instead of looking for ways to reconcile peacefully, they have resorted to terrorist practices,” Putin said.

Russia’s Federal Security Service (FSB) said in a statement that it had successfully “eliminated an intelligence network” of the Ukrainian Ministry of Intelligence after several alleged attempted “terrorist” attacks, resulting in the death of one FSB officer. Ukraine denies the allegations, and there seems to be little evidence that the events occurred as the FSB claims. As the journalist Leonid Bershidsky points out, the whole operation could be a false flag designed to give Russia an excuse to make further incursions into Ukraine.

Russia devised similar excuses to justify the 2014 annexation of the peninsula and the subsequent campaign in eastern Ukraine, which the Kremlin successfully painted as a “civil war” through its propaganda outlets in much of the world. Having seen how easy it is to fabricate its way through territorial expansion, it makes sense that the Kremlin might want to push a little farther into its southern neighbor.

* * *

Hannah Arendt warned that rewriting history, recasting the attackers and the attacked, is not a difficult proposition. In her 1967 essay “Truth and Politics,” Arendt tells the story of how French statesman George Clemenceau, in the final years of his life, was asked by a Weimar Republic representative what he thought future historians would make of World War I. “This I don’t know. But I know for certain that they will not say Belgium invaded Germany,” Clemenceau replied.

“A factual statement — Germany invaded Belgium in August 1914 — acquires political implications only by being put in an interpretative context,” Arendt writes. “But the opposite proposition, which Clemenceau, still unacquainted with the art of rewriting history, thought absurd, needs no context to be of political significance. It is clearly an attempt to change the record, and as such, it is a form of action.”

"Trump has proven himself uniquely impervious to facts."

In Crimea, and in this year’s U.S. presidential campaign, all facts are interpretative. The Republican nominee, Donald Trump, seems to compulsively fabricate matters of national security, taking a leaf out of the Kremlin’s playbook.

At the start of this beguiling season, many journalists and politicians thought that a bit of fact-checking would jog Trump’s memory and make him a “normal” candidate. But Trump has proven himself uniquely impervious to facts. We have already seen his revisions to reality turned into action.

Nowhere is more vulnerable to Trump’s revisions than Eastern Europe, a region whose history has been repeatedly and aggressively revised over the past century.

Trump’s meandering opinions and obfuscations on the subject are on par with the manipulations that allowed Russian forces to slip so easily into Ukraine the first time, and those that fuel the perception of the Baltics as a border region that will inevitably change hands every couple of decades. The developments in Crimea are worrying signs that the impact of his fabrications are not confined to the network news.

“OK, well, he’s there in a certain way,” Trump told ABC’s George Stephanopoulos regarding Putin’s meddling in Ukraine. “But I’m not there. You have Obama there. And frankly, that whole part of the world is a mess under Obama with all the strength that you’re talking about and all of the power of NATO and all of this. In the meantime, he’s going away. He take — takes Crimea.”

His remarks on Eastern Europe are as messy as he says the region is. The swathe of land from Estonia to Crimea is already a great unknown for many Americans, full of “places that Americans don’t think about all that often,” as the New York Times’ David E. Sanger remarked in an interview with Trump. And the geographical and cultural expanse separating NATO’s centers of power from its eastern flanks further invites misunderstanding, making Trump’s remarks on the “mess” of Eastern Europe all the more dangerous.

“Just to be clear, the U.S. does not recognize Russia’s forcible takeover of Crimea just as we did not in the Baltic States in 1940,” the House Committee on Foreign Affairs felt obliged to tweet in response to the Republican candidate’s claims.

“Do facts, independent of opinion and interpretation, exist at all?” Arendt asks in her 1967 essay. She answers in the negative: “factual truth is no more self-evident than opinion, and this may be among the reasons that opinion-holders find it relatively easy to discredit factual truth as just another opinion. Factual evidence, moreover, is established through testimony by eyewitnesses – notoriously unreliable – and by records, documents, and monuments, all of which can be suspected as forgeries.”

* * *

Trump is a master of erasing, or making up, the evidence.
Trump habitually bans journalists from his rallies, his supporters chanting “lock her up,” “get ‘em out,” “build that wall.” As the official nominee, he has access to verified facts in the form of classified national security briefings, but has sometimes chosen to eschew them.

He claims not to understand why this U.S. can’t use its nuclear weapons. “If we have them, why can’t we use them?” he reportedly asked one of his foreign policy advisers, multiple times. Generous observers might give him credit for reigniting a philosophical dispute about the state of the nuclear arsenals. Others might reasonably worry that he has forgotten that there is a very good reason why.

Over the past few weeks in particular, Trump has demonstrated he has forgotten — or simply does not know — a lot of things. The topics that escape him happen to be of particular import to America’s European allies, such as why the United States would be compelled to defend the Baltic states in the event of a Russian invasion, or why the U.S. cannot recognize the Russian annexation of Crimea.

“The people of Crimea, from what I’ve heard, would rather be with Russia than where they were,” Trump recently told ABC, in a complete reversal from his earlier remarks on the subject.

Rhetoric is a form of action. Trump’s remarks and a spate of other convenient circumstances have greased Russia’s path toward pushing forward in Ukraine.

“Organized lying always tends to destroy whatever it has decided to negate, although only totalitarian governments have consciously adopted lying as the first step to murder,” Arendt writes.

Trump has already negated the freedom of Eastern Europe. Let’s hope he does not get a chance to destroy it.

Article Link To Politico EU:

The Clinton Plan’s Growth Deficit

Hillary’s agenda is long on economic platitudes. How is more money for roads—$50 billion a year—going to kick-start growth?

By John. H. Cochrane
The Wall Street Journal
August 12, 2016

Hillary Clinton’s big speech on Thursday laying out her economic proposals included much of what you’d expect—calls for higher taxes on “Wall Street, corporations, and the super-rich.” The centerpiece was her call for “the biggest investment in new, good-paying jobs since World War II.” Reading the speech, and detail on the campaign website, I’m not encouraged.

America’s foremost economic problem is sclerotic growth. If the economy continues to expand at only 1% to 2% a year, instead of the historical 3% to 4%, then current economic and political problems will become crises. Almost everything depends on growth: progress for the middle class, hope for the unfortunate, solvency for social programs, environmental protection, defense.

This is not a contentious or partisan statement. Larry Summers,Democratic economic adviser extraordinaire, wrote recently in the Washington Post that growth is “the single most important determinant of almost every aspect of economic performance,” and that trying to boost it “has been discredited in the minds of too many progressives.”

So, how does Mrs. Clinton diagnose and suggest to cure the country’s stagnation? Her central pro-growth proposal is “infrastructure” spending, $275 billion over five years, financed in part by some sharply higher taxes.

Sure, America’s roads and bridges could use patching. But how does this fix the growth problem? Nobody thinks that stagnant growth is centrally the fault of bad roads and bridges. No, the economic argument behind Mrs. Clinton’s proposal is simply the endless drumbeat of fiscal stimulus: Spend taxed or borrowed money on anything, and the “multiplier” will increase “demand.”

We’ve been at this since 2008. But the caution that stimulus should be “timely, targeted, and temporary” has now been forgotten. Japan’s massive “infrastructure” spending and weak growth to show for it are forgotten. And if U.S. growth hasn’t been kick-started by the trillions of stimulus so far—the government has accumulated $8 trillion of debt since the recession began—how will another $50 billion a year help?

Further, why are roads and bridges still a problem? President Obama has been after “infrastructure” stimulus since 2009. If you ask that question, and listen to answers, they are pretty clear. It’s nearly impossible to build infrastructure these days. Endless regulatory reviews and legal challenges bog down builders. The Davis-Bacon Act, which mandates prevailing wages, and other contracting restrictions balloon costs. Politicians and agencies pick terrible projects—high-speed trains to nowhere. Even those can’t get built. President Obama discovered how few projects are “shovel-ready.” Opposition to throwing money down a rathole is not pigheaded.

In return for more spending, Mrs. Clinton could have offered serious structural reforms: repeal of Davis-Bacon, time limits on environmental reviews, serious cost-benefit analysis, and so forth. Such a package would have been irresistible.

Instead her plan simply asserts that Mrs. Clinton will “break through Washington gridlock” and “cut red tape”—promises made and forgotten by every presidential candidate in living memory. If the Sierra Club sues to block her worthy commitment to “upgrade our dams and levees,” will she really short-circuit the legal process, and how?

The rest of Mrs. Clinton’s economic agenda is a thousand-course smorgasbord of government expansions, with the same deficiencies. A random sample: Higher taxes on capital gains and corporations. New taxes on financial transactions. A corporate exit tax. Paid leave. Free college. A higher minimum wage. More federal training programs. Tax credits for apprenticeships and profit-sharing programs. A “new markets” credit. Rural business investment cooperatives. The Paycheck Fairness Act. “Make it in America Partnerships.” And on and on.

Moreover, much of it is merely aspiration, without (yet) concrete action: “Restore collective bargaining rights.” “Strengthen overtime rules.” “Make quality affordable childcare a reality.” “Ensure that the jobs of the future in caregiving and services are good-paying jobs.” “Break down barriers to make affordable housing and homeownership possible for hard working families.” And on and on and on.

The “plan” offers neither a strategy for enactment, nor thought about why these are problems in the first place. Yes, it’s hard to find quality affordable childcare. Why? Could licensing, zoning, teachers unions, minimum wages, ObamaCare mandates, employee time rules, taxes, immigration restrictions and the like have something to do with it? Apparently, every problem in America occurs because the president did not “fight” hard enough for new programs and against the dark forces that oppose progress. Like a hyperactive overachiever approaching a mock-U.N. debate, Mrs. Clinton seems to trust that the opposition will wilt from the sheer volume, detail and righteousness of her proposals.

Her speech Thursday at least identifies the problem: “Powerful special interests and the tendency to put ideology ahead of political progress have led to gridlock in Congress.” To counter this, she offers “hard but respectful bargaining,” and “leadership that rises above personal attacks.”

For a candidate with such vaunted political experience, that plan seems surprisingly naive. It invites obvious jokes: Yes, you and your party also know something about “special interests,” “ideology,” “gridlock” and “personal attacks,” don’t you—as in the rest of this speech. Why should voters expect that to change?

If Mrs. Clinton is elected president, this plan will lead to a chaotic first year. Her administration will unleash a flurry of proposals. Congress will block most. Executive orders and administrative rules will follow, many of which will end up in court. Economic growth will continue to sputter.

Mrs. Clinton: Please don’t do it. Find a few simple governing principles. Listen to your opponents. Fix the structure of government. Ask why things are broken, despite good people’s best efforts. Spend a little time cleaning up old programs too.

This mild criticism does not imply an endorsement of Mr. Trump’s economic musings. The coherent alternative vision lies in Paul Ryan’s agenda, “A Better Way,” and the plans of the Libertarian candidate, Gary Johnson. After a likely landslide loss for Mr. Trump, and Trumpism, their ideas will define the opposition. Through better policy and better governance under the rule of law, those ideas do promise a surge in prosperity for all Americans.

Article Link To The Wall Street Journal:

Noonan: How Global Elites Forsake Their Countrymen

Those in power see people at the bottom as aliens whose bizarre emotions they must try to manage.

By Peggy Noonan
The Wall Street Journal
August 12, 2016

This is about distance, and detachment, and a kind of historic decoupling between the top and the bottom in the West that did not, in more moderate recent times, exist.

Recently I spoke with an acquaintance of Angela Merkel, the German chancellor, and the conversation quickly turned, as conversations about Ms. Merkel now always do, to her decisions on immigration. Last summer when Europe was engulfed with increasing waves of migrants and refugees from Muslim countries, Ms. Merkel, moving unilaterally, announced that Germany would take in an astounding 800,000. Naturally this was taken as an invitation, and more than a million came. The result has been widespread public furor over crime, cultural dissimilation and fears of terrorism. From such a sturdy, grounded character as Ms. Merkel the decision was puzzling—uncharacteristically romantic about people, how they live their lives, and history itself, which is more charnel house than settlement house.

Ms. Merkel’s acquaintance sighed and agreed. It’s one thing to be overwhelmed by an unexpected force, quite another to invite your invaders in! But, the acquaintance said, he believed the chancellor was operating in pursuit of ideals. As the daughter of a Lutheran minister, someone who grew up in East Germany, Ms. Merkel would have natural sympathy for those who feel marginalized and displaced. Moreover she is attempting to provide a kind of counter-statement, in the 21st century, to Germany’s great sin of the 20th. The historical stain of Nazism, the murder and abuse of the minority, will be followed by the moral triumph of open arms toward the dispossessed. That’s what’s driving it, said the acquaintance.

It was as good an explanation as I’d heard. But there was a fundamental problem with the decision that you can see rippling now throughout the West. Ms. Merkel had put the entire burden of a huge cultural change not on herself and those like her but on regular people who live closer to the edge, who do not have the resources to meet the burden, who have no particular protection or money or connections. Ms. Merkel, her cabinet and government, the media and cultural apparatus that lauded her decision were not in the least affected by it and likely never would be.

Nothing in their lives will get worse. The challenge of integrating different cultures, negotiating daily tensions, dealing with crime and extremism and fearfulness on the street—that was put on those with comparatively little, whom I’ve called the unprotected. They were left to struggle, not gradually and over the years but suddenly and in an air of ongoing crisis that shows no signs of ending—because nobody cares about them enough to stop it.

The powerful show no particular sign of worrying about any of this. When the working and middle class pushed back in shocked indignation, the people on top called them “xenophobic,” “narrow-minded,” “racist.” The detached, who made the decisions and bore none of the costs, got to be called “humanist,” “compassionate,” and “hero of human rights.”

And so the great separating incident at Cologne last New Year’s, and the hundreds of sexual assaults by mostly young migrant men who were brought up in societies where women are veiled—who think they should be veiled—and who chose to see women in short skirts and high heels as asking for it.

Cologne of course was followed by other crimes.

The journalist Chris Caldwell reports in the Weekly Standard on Ms. Merkel’s statement a few weeks ago, in which she told Germans that history was asking them to “master the flip side, the shadow side, of all the positive effects of globalization.”

Caldwell: “This was the chancellor’s...way of acknowledging that various newcomers to the national household had begun to attack and kill her voters at an alarming rate.” Soon after her remarks, more horrific crimes followed, including in Munich (nine killed in a McDonald’s) Reutlingen (a knife attack) and Ansbach (a suicide bomber).


The larger point is that this is something we are seeing all over, the top detaching itself from the bottom, feeling little loyalty to it or affiliation with it. It is a theme I see working its way throughout the West’s power centers. At its heart it is not only a detachment from, but a lack of interest in, the lives of your countrymen, of those who are not at the table, and who understand that they’ve been abandoned by their leaders’ selfishness and mad virtue-signalling.

On Wall Street, where they used to make statesmen, they now barely make citizens. CEOs are consumed with short-term thinking, stock prices, quarterly profits. They don’t really believe that they have to be involved with “America” now; they see their job as thinking globally and meeting shareholder expectations.

In Silicon Valley the idea of “the national interest” is not much discussed. They adhere to higher, more abstract, more global values. They’re not about America, they’re about...well, I suppose they’d say the future.

In Hollywood the wealthy protect their own children from cultural decay, from the sick images they create for all the screens, but they don’t mind if poor, unparented children from broken-up families get those messages and, in the way of things, act on them down the road.

From what I’ve seen of those in power throughout business and politics now, the people of your country are not your countrymen, they’re aliens whose bizarre emotions you must attempt occasionally to anticipate and manage.

In Manhattan, my little island off the continent, I see the children of the global business elite marry each other and settle in London or New York or Mumbai. They send their children to the same schools and are alert to all class markers. And those elites, of Mumbai and Manhattan, do not often identify with, or see a connection to or an obligation toward, the rough, struggling people who live at the bottom in their countries. In fact, they fear them, and often devise ways, when home, of not having their wealth and worldly success fully noticed.

Affluence detaches, power adds distance to experience. I don’t have it fully right in my mind but something big is happening here with this division between the leaders and the led. It is very much a feature of our age. But it is odd that our elites have abandoned or are abandoning the idea that they belong to a country, that they have ties that bring responsibilities, that they should feel loyalty to their people or, at the very least, a grounded respect.

I close with a story that I haven’t seen in the mainstream press. This week the Daily Caller’s Peter Hasson reported that recent Syrian refugees being resettled in Virginia, were sent to the state’s poorest communities. Data from the State Department showed that almost all Virginia’s refugees since October “have been placed in towns with lower incomes and higher poverty rates, hours away from the wealthy suburbs outside of Washington, D.C.” Of 121 refugees, 112 were placed in communities at least 100 miles from the nation’s capital. The suburban counties of Fairfax, Loudoun and Arlington—among the wealthiest in the nation, and home to high concentrations of those who create, and populate, government and the media—have received only nine refugees.

Some of the detachment isn’t unconscious. Some of it is sheer and clever self-protection. At least on some level they can take care of their own.

Article Link To The Wall Street Journal: