WTF Hillz?

While Bernie vols in Texas are making hundreds of thousands of calls (and this is confirmed from multiple sources) to voters in Texas, Hillary vols are making calls… to Maine and Delaware.

I don’t know what kind of delegate math you’re fucking using, but this is a fuckup like accidentally blowing up the sun. The campaign is making the same mistakes that were made in 2008 and you have someone running the western states whose last job was, what, working for a FL state rep?

Seriously, someone needs to get their shit together on field or this primary is going to look even worse than 08.

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I give you The Dumbest Thing You’ll Read In January On Wages

Andy Puzder, CEO of CKE Restaurants, wrote what has to be one of the worst counterarguments to increasing the minimum wage in the history of ever. Honestly CKE’s board should be looking to fire him with cause for

A) Being stupid
B) Putting it in writing (in the WSJ no less)
C) For then going on TV to defend his sloppy work

Let’s start here…

Generally, highly compensated employees contribute more to a company’s success than minimum-wage employees, who are often less experienced and entry-level workers.

Well, I’ve met everyone from entry level employees to CEOs at a variety of companies. There’s only one CEO who’s ever impressed me as exceptional and the rest have been underwhelming on a personal and intellectual level. Lower compensated employees usually don’t have a say in things so they CAN’T, by management’s design, contribute. When employees ARE able to contribute, it’s usually very productive since they understand the day to day operation of the business far better than, honestly, the CEO. I’ve never met Andy, but I have a feeling any member of middle management (or a damn line cook at any given CKE location) could do his job better, so let’s replace him and then use his salary to bump up the minimum wage paid out by CKE.

Then there’s his math issue…

At $12 an hour, the employee would make $7,410 more a year resulting in a loss per employee of $1,110, eliminating the employee’s entire contribution to the company’s success. At $15 an hour, the employee would make $12,090 more a year, resulting in a loss per employee of $5,790.

Yes, because prices would remain static. And if you believe that, I have this AMAZING insurance product to sell you! Seriously, research has already been done and the price increase to cover $15/hour is a little under 5% or 25 CENTS on a $5 burger, because the labor component of the price of fast food is REALLY low. That research didn’t really look into the cost savings realized from lower turnover and the productivity increases when someone isn’t constantly under stress about how they’re going to pay bills. It also doesn’t look at the broader impact of having tens of millions of workers with higher incomes and a history of spending those incomes, in the economy.

Now, I knew about the Purdue study and I have no investments in businesses directly affected by minimum wage increases… the big question is how the hell old dumb as a box of hair Andy missed it given that IT’S ABOUT HIS DAMN BUSINESS. I don’t know, but if I was a fancy fast food CEO like Andy, I would have a Google search set up for everything related to my industry from commodity futures to restaurant design trends. But I’m probably smarter than Andy so we’ll cut him some slack on that.

Finally, let’s address poor dumb Andy’s comments about Wal Mart. Wal Mart’s problem begins with a management culture that actually devalues hard work and decision making in employees. Now, I know management has been crowing about how much they’ve done to increase wages, but what they’re NOT saying is that they’re doing it to compete FOR EMPLOYEES. Apparently, paying the minimum wage left them understaffed and shelves untended. It’s poor operation which has already caused the loss of the middle market consumer, who are predisposed to thinking their stores sucked and that their food is sourced from China and filled with exotic poison. Wal Mart’s problems are DECADES in the making and you would need wholesale change within the management to overcome that. I shop at Costco, Tom Thumb and occasionally Central Market. I don’t step foot in a Wal Mart because I think of everything in it as Poisoned in China.

Change the culture and you’ll see profits rise even with higher wages. Until then, I would avoid Wal Mart stock like it’s an infectious disease.

Speaking of changes in culture, I think maybe it’s time to do the same thing at CKE. I know I won’t be eating a Chili Cheese Six as long as Dipshit Andy Pozner is the CEO… he could be sourcing melamine tainted produce from Wal Mart for all I know!

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What may be the best line I have ever written (to date)…

(Senator) Ted Cruz is smarmy, just like Dubya Bush, but without that ineffable ‘I want to have a beer with that fella’ quality. Cruz is actually most like Eddie Haskell and no one likes Eddie Haskell, except mothers who couldn’t get through lunch without a tab of mothers little helper. Eddie Haskell is the guy who ends up going to jail for selling used cars with turned odometers.

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Macro view on oil… it’s still the demand

Yardeni’s year end report on the oil macro picture is out, and on it’s face it should be encouraging for bulls short term. Long term, it’s clear that absent extraordinarily low prices, demand growth would have fallen in 2015. Producers have no pricing power and prices over $50/bbl would likely redepress demand.

OECD demand growth did go positive during the year, but only fractionally. Demand in the OECD was actually up, but marginally from 32.5 million bbl/day to 32.9 million bbl/day. This breaks the trend as German demand flattened out, UK, Italy and the US all rose while Japan continued it’s decline.

The big news was demand growth in China and India which both appear to be strong. However, it’s unclear how much of this demand is the result of economic activity and how of this is the result of expanding petroleum reserves in a time of low prices.

Expect a cap on pricing between 46 and 49. Anything over should be looked at as an opportunity to sell as I don’t see anything other than demand loss.

As for this piece from the WSJ, don’t waste your time… it’s full of shit like this:

Some money managers disagree. Bullish investors believe that non-OPEC supply could fall sharply in 2016, spurring a rebound in prices by year-end. Large producers faced pressure to cut spending even before oil prices plunged, and the pace of spending cuts accelerated in 2015. Producers delayed or canceled about 13 million barrels a day worth of oil output in the past five years, equal to about 14% of current global production, including 5 million barrels a day that would have been produced by 2020 deferred due to low prices, according to energy-focused investment bank Tudor, Pickering, Holt & Co.

“Demand is growing and supply is reducing,” said Tim Guinness, chief investment officer of Guinness Atkinson Asset Management Inc., which manages $300 million in energy-equity investments. Mr. Guinness said he expects to see Brent oil prices at $75 a barrel by the end of 2016. “The world was out of balance. It’s now coming back into balance.”

Yes, it’ll fall but not sharply… At 50, producers are mostly profitable and they can now drill a lot cheaper. There will be supply growth at $50 and demand will start to drop. $75 for Brent is laughable. The sweet spot is around 43-45 which is where I think oil will average out over 2015 absent Iran going to war with Saudi Arabia or Samsung announcing they have a really good supercapacitor that would be perfect for transportation.

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Reality Check… Clinton V Sanders

Honestly, articles like this usually make me laugh…

In addition to the 14% of Democrats who won’t support Clinton, 27% would “support her with some reservations” and 11% would “only back her because she is the nominee.”

Based on the CBS News findings, around 52% of Democrats will either stay home or reluctantly drive to the polls. Not the recipe to beat a Republican, who if Clinton is the nominee, will have millions of new conservatives/independents doing everything possible in order to ensure Hillary Clinton doesn’t get elected.

Now, HA Goodman is a Clinton hating nut but this is just crap since his conclusion isn’t supported by the actual datan (Which is OLD AF anyway). 14% won’t show up for Clinton, the others will. That’s after months of a steady negative drumbeat led, ineffectually, by people like HA Goodman which has done nothing to pull Clinton’s numbers down or Sander’s numbers up. In fact, the only thing it’s done is harden a segment of of Bernie supporters into thinking Clinton would be WORSE than whichever racist, misogynist, dirtbag the Republicans nominate. That’s not foolish, it’s completely batshit crazy.

I know most of this will change… by June or early July, most of the ill feeling will be gone and people will wake up and realize there’s an election to win. Should not enough swing over, there’s still a win condition for Clinton… swing right and hippy punch. Independents and working class Republicans (which is, incidentally, what Trump is creating with his economic message and pulling them solidly out of their moralistic ideological slumber) LOVE hearing D’s assert independence from the liberals and the only ones who’ll not turn up to the polls are the ones already suffering from Clinton derangement syndrome.

That option isn’t open to Sanders.

So, go on and be a dick… don’t vote for Hillary if she’s the nominee. BE the petty little bitch we already knew you were. And we’ll win anyway.

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Cuban Peers Dispute Ted Cruz’s Father’s Story of Fighting for Castro – The New York Times

So, Ted Cruz​ learned how to lie from this ‘revolutionary/not so much a revolutionary’ father. Apparently, old Rafael is about as mendacious as you would expect someone running a scam church to be.

Source: Cuban Peers Dispute Ted Cruz’s Father’s Story of Fighting for Castro – The New York Times

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The Financial Crisis: Lessons for the Next One | Center on Budget and Policy Priorities

The massive and multifaceted policy responses to the financial crisis and Great Recession — ranging from traditional fiscal stimulus to tools that policymakers invented on the fly — dramatically reduced the severity and length of the meltdown that began in 2008.

Source: The Financial Crisis: Lessons for the Next One | Center on Budget and Policy Priorities

This is the first systemic analysis I’ve seen that shows how beneficial the actions taken in the wake of the 2007-2009 recession were. This is for those of you out there who rail against bailouts… without them, things would have been much worse for us all.

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Greenland Is Melting Away – The New York Times

Amazing article on research being done to determine the rate of melting in Greenland.

Source: Greenland Is Melting Away – The New York Times

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Ain’t No Such Thing As A Free Lunch . . . | The Big Picture

Deep down inside, you already know this: There ain’t no such thing as a free lunch, financially or otherwise. Yes, of course, you understand that.

Source: Ain’t No Such Thing As A Free Lunch . . . | The Big Picture


Couldn’t resist sharing this… I’d like to make my own addition, that lottery tickets are NOT a retirement plan.

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What I heard at the #DemDebate

As a Democrat who works in financial services, I’m used to people looking at me like I’m crazy, especially those in both respective groups. From my perspective, it makes complete sense as Democrats are the most likely to advance common sense regulation (which creates a level and stable playing field for all competitors) and set tax policy that reduces income and wealth inequality, increasing the middle class and increasing the market of consumers to which I have access.

In short, I do better when EVERYONE in this country does better and when my competitors have to play by the same rules.

Over the last few years, I’ve grown increasingly uncomfortable because the ultra left and the ultra right are matched up perfectly in their complete demonization of everyone in financial services and of the industry. During the debate, I watched two candidates say that all of Wall Street was built on fraud and nothing could be further from the truth… it’s painting everyone in the industry with a broad brush that, quite frankly, isn’t deserved.

So, let’s go over a few things…

1) Leading up to the collapse in 2008, some of the banks and traders committed what would be called fraud by constructing and selling securities they knew were bad.
2) Some of the larger investment banks borrowed FAR in excess of their capacity. Some of them went bankrupt or were sold for less than book value, while others who had collateral received loans. Lehman Brothers, for example, had a balance sheet composed of roughly $26 billion in equity floating $689 billion in assets. As a general rule, you would want at least 10% of assets as equity, or $68.9 billion which means LEH was SEVERELY undercapitalized.
3) Federal programs to assist banks with capital infusions WERE repaid. Taxpayers are not out any money on capital assistance, they did lose on assistance to homeowners which was part of TARP.
4) There were a number of federal and commercial programs designed to help homeowners. Some of these still exist and allow homeowners to refinance at loan to value ratios far in excess of what a company would be able to do.
5) Glass Steagall’s repeal DID NOT cause the financial crisis, nor did it meaningfully make it worse… those risky investments were all rated TRIPLE A and banks were trading those before the repeal of G-S.
6) The Great Depression would not have been prevented by Glass-Steagall. The collapse of the stock market hurt, but not enough to collapse the economy as a whole. What did that was the Fed’s decision NOT to increase liquidity in the banking system which caused runs, which in turn led to the collapse of large numbers of banks, and completely froze credit in the United States. Without that credit, companies couldn’t finance operations and consumers couldn’t buy.
7) The economy is dependent on the financial system… think of it as the circulatory system of the economy. Through it’s arteries and veins flow the credit and cash to keep the economy growing.

These are written as statements of fact because they are true. It’s ridiculous to debate them, and I seriously doubt either Mr. O’Malley or Sen. Sanders would. Even Senator Warren would not
debate point five

Warren, meanwhile, confessed to New York Times reporter Andrew Ross Sorkin that Glass-Steagall would probably not have stopped the financial crisis, but that she was pushing to reinstate it because, in Sorkin’s words, “it is an easy issue for the public to understand and ‘you can build public attention behind.’”

The simple truth is that Glass didn’t keep us safe, what kept us safe was an active Fed, a post-World War 2 boom, and tax policy that incented investment over speculation. When President Carter kicked off deregulation of the S&Ls with DIDMCA and President Reagan effectively ended oversight, it was all within the Glass framework. In short, G-S existed almost 20 years after deregulation started and it did nothing to stop, for example, the S&L meltdown or any of the other problems we had between 1980 and 1999 in financial services.

As further evidence of the ridiculous idea that simply separating investment and commercial banking will eliminate risk, keep in mind that we’re the only ones that did it. In the rest of the world, such separation is rare.

So, if not the restoration of Glass, what then can we do? Well, the two primary factors in the collapse were

1) Securities that were rated far higher than they should have been and were shoddily constructed (sometimes intentionally).
2) Leverage was far in excess of any sane measure, though this was primarily in the investment banks.

Cure for these things and we can prevent future collapses or, at a minimum and more likely, make the next collapse far smaller and less systemic. Implementing point one, especially by creating a fiduciary duty between salesman and customer, would allow us to send people to jail. Add in what already exists, a prohibition on the use of insured deposits to speculate, and you have a regulatory framework that’s not only flexible but lasting.

Please bear in mind I work in the industry and have been through recessions and expansions, under various regulatory mechanisms, and have always made money. Whatever happens with regulation after January, 2017, I will still make money. My point in writing that is to show that my best interest won’t be effected by what ends up happening after January, 2017. I do care about the overall health of the US economy and feel it necessary to tell everyone who is invested in the restoration of Glass that it won’t do what you need it to do. It’s time to wake up and focus on pragmatic solutions that will give us a solid financial system rather than boilerplate nonsense and false security.

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