My Perihelion day morning train reads: • Earnings, Not Donald Trump, Are Stocks’ Best Friend in 2017; Corporate profit rebound, not DC policies, will drive stocks (Wall Street Journal) • How To Sell Finance Books Like Harry Dent (A Wealth of Common Sense) • Tornado Town, USA: Four devastating tornadoes hit Moore, Oklahoma, in 16 years. Was it…
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Submitted by Charles Hugh-Smith via OfTwoMinds blog,
An economy that only serves the prosperity of the protected top 5% is an economy doomed to rising inequality, stagnation and widespread social discontent.
If we seek a coherent context for the new year, we would do well to start with the foundations of widespread prosperity. While the economy is a vast, complex machine, the sources of widespread prosperity are not that complicated: abundant work and a low cost of living.
When work is abundant, there are opportunities for many skill levels, and employers must bid for the most productive, reliable workers. This supports wages and widespread employment.
When the cost of living is low, even low-wage households can not only get by but put a little aside if they are prudent and thrifty.
This may seem obvious, but the conditions required for work to be abundant and the cost of living to be low are not so obvious. For work to be abundant, it must be easy to start a business, easy to operate the new business, easy to make a profit so the business can survive the first few years and easy to hire employees.
All these factors require an environment of low-cost compliance with regulations, low tax rates, low costs of transactions, reasonable transport costs, reasonable cost of money (but not near-zero), reasonable availability of capital for small enterprises, local and national governments that actively seek to smooth the path of new enterprises and existing enterprises seeking to expand, and a transparent marketplace that isn't dominated by politically dominant cartels and subservient-to-cartels government agencies.
This matters because the number one cause of the high cost of living is artificial scarcity created and maintained by monopolies, cartels, and the government that serves their interests. Artificial scarcity imposed by cartels and a servile state is the primary cause of soaring costs in a variety of sectors.
There are many factors that generate artificial scarcity: regulatory capture/ regulatory moats designed to protect cartels and monopolies from competition, a lack of affordable capital available to small enterprises, thickets of regulations that don't really serve the public interest, educational institutions that don't teach the fundamentals of entrepreneurism and how to start and operate a small business, and so on.
Real-world limits also impose costs. Energy costs are rising for a variety of structural reasons; the easy-to-extract oil has been extracted, the full lifecycle costs of alternative energy sources remain substantial (maintenance is not free for the 20 year lifespan of the windmill/solar array, for example) and so on.
Land for new housing is scarce in many cities, and that imposes scarcity costs as various entities compete for the scarce resource (land).
If we look at eras of widespread prosperity, we find that work is abundant, private enterprises and trade are vibrant, the currency is stable, the cost of doing business is low, inflation and the cost of living are low, so even low-wage households can slowly improve their lot.
This doesn't just describe America in the 1950s and 1960s--it also describes the Tang Dynasty in 700 A.D. China and the Byzantine Empire in its heyday. These are the core dynamics of economies throughout history that generate and distribute widespread prosperity and opportunity.
Prosperity is limited to the few at the top when the cost of living soars. When wages for the bottom 95% stagnate while the cost of living (housing, healthcare, college, taxes, etc.) soars, the bottom 95% become poorer--though borrowing money masks this reality for a time.
Economies stagnate when the few at the top limit competition, not just for customers but for capital and political power. Economies designed to maintain an exploitive elite and its servile class of technocrat factotums become sclerotic and unproductive, as the unearned privileges of the few act as a crippling tax on the entire economy. (See Inequality and the Collapse of Privilege and Why Our Status Quo Failed and Is Beyond Reform for more on this.)
No wonder inequality is rising: the only possible output of an economy devoted to artificial scarcity and maintaining the privileges of the few at the expense of the many is rising inequality and stagnation.
We can do better, but only if we discern the systemic reasons why wages are stagnating, small business is in decline and the rich get richer while everyone else gets poorer.
An economy that only serves the prosperity of the protected top 5% is an economy doomed to rising inequality, stagnation and widespread social discontent:
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I receive requests for recommendations in this area fairly often. I don’t feel I am qualified to judge the outputs, but here are three that have come across my path as of late and seem to me very good:
Connor Boyack, illustrated by Elijah Stanfield, The Tuttle Twins and The Road to Surfdom. Recommended ages 5-11.
I.M. Lerner and Catherine L. Osornio, The Secret Under the Staircase, and The Hidden Entrance. Here the age range seems to be higher, maybe 10-12? I feel I could have read them younger than that, however.
Someone should write a bibliographic essay on the books in this category. What else can you recommend?
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In the center of Boston rises the small neighborhood of Fort Hill, on top of which sits Highland Park, designed in the 1700s by Frederick Olmsted. Patriots stored gunpowder here during the Revolutionary War, and a tower fit for Repunzel commemorates their efforts. The abolitionist writer William Lloyd Garrison fought against slavery from a house on this hill. And now the battle for urban housing affordability rages on these streets. It’s a microcosm of the battle playing out on a neighborhood level in every growing city in America: a battle between those who want to keep property values high, and those who want the chance to live in the cities that have the best economic prospects.
If cities want to retain a middle class, experts say, they will have to make it happen on their own.
The casualties in this war are mostly the middle class. In 2016, rents continued their years-long rise, incomes stratified further, and the average price to buy a home in major US cities rose. The strain pushed the middle class out of cities like Boston, San Francisco, Los Angeles, New York, Austin—the so-called “hot cities.” Some families move to the suburbs. Others flee for less expensive cities. But across the US, the trend holds: cities are increasingly home to high-rollers who can pay the high rents or down payments and lower income people who qualify for subsidized housing.
Macroeconomists say this a good problem to have. These cities are growing. People want to live in them. Stagnating economies in the Rust Belt might envy this kind of trouble. From the perspective of the overall wealth of cities, the middle class being pushed out doesn’t matter. But it matters on the human level, the neighborhood level. In Fort Hill, it means that a teacher at the local elementary school cannot afford to live in the neighborhood where she works. The effects on inequality, mobility, and the demographic composition of cities are very real, their causes multifold, and the solutions difficult.
Experts reading into president-elect Donald Trump’s proposed tax and housing policies—including his appointment of Ben Carson to lead the Department of Housing and Urban Development—see little hope that the federal government will help reverse this course next year. If cities want to retain a middle class, experts say, they will have to make it happen on their own.
The affordability crisis in US cities is not just about buying homes. Rents, too, have been rising since the Great Recession. In the coastal and hot cities like Denver and Austin, those increases have put even rentals out of reach for many in the middle class–defined as those making between $50 to $125,000 depending on household size. In 2016, the capital required to sign a lease on the average-priced $3,500-a-month apartment in San Francisco often topped $12,000, thanks owing to requirements for first and last months rent plus security deposits and a broker fee.
The savings that used to be associated with the middle class has dried up in the past few years, as interest rates stayed low and wage growth stagnated. Not only does this make it harder for people to stay in the middle class, but it makes coming up with high sums to rent or buy city apartments impossible.
“It’s very hard to get people to understand that the affordable housing crisis is not for the very poor,” says lawyer Mechele Dickerson of the University of Texas, an expert in housing and the middle class. It’s for people with good jobs who are not poor enough to qualify for subsidized housing, nor rich enough to pay the rising housing prices. “A family that makes $100,000 can’t afford to buy a house in most US cities,” Dickerson says.
The intractability of the middle class’ affordable housing problem stems largely from strict zoning laws that restrict building new housing, and the not-in-my-backyard mindsets of homeowners who oppose affordable housing initiatives.
“Housing issues are a product of economic growth in the city bumping up against strict zoning constraints, that’s what leads to the unaffordability problem,” says David Shulman, Senior Economist at UCLA’s Anderson School of Management. “You don’t want to stop economic growth.”
The opposition to change drives the price of the existing housing supply up—which homeowners love—and ripples into the rental market. Landlords are able to charge more, and long-time rental residents get displaced when they can’t afford the new prices. That’s what’s happening in Fort Hill, a traditionally African American neighborhood that is whitening every year as black residents who’ve rented there for decades are replaced by high-turnover college students willing to pay the ever-higher market rates for apartments.
“As a landlord, if you can turn it over, you’re always at the market, and you want to turn it over faster,” says Lee Lin, economist and cofounder of the rental site Rent Hop.
‘As soon as you call it affordable housing, the existing residents shift into NIMBY.’
This high-turnover rate is even more of a problem when you factor in what economists call “the AirBnB effect,” where homeowners are able to charge exorbitantly high rates for short-term rentals. Lin says 2016 actually saw the first signs of a crackdown against this trend, starting in New York City, which passed strict regulation to make it harder for homeowners to make money on short-term rentals.
In Fort Hill in 2016, meanwhile, initiatives to build new affordable housing to keep those long-time residents in the neighborhood were met with resistance by some homeowners fearing an influx of low-cost housing would negatively affect their home values.
Dickerson says part of the problem is that when homeowners hear the phrase “affordable housing,” they think of public assistance and housing projects like those that went up in cities in the 1970s. “As soon as you call it affordable housing, the existing residents shift into NIMBY,” Dickerson says.
In San Francisco, which has some of the strictest zoning laws in the nation—precluding high-rise buildings in most neighborhoods—this has resulted in the nearly complete white-washing of the Fillmore a formerly robust black neighborhood. The last predominantly African American neighborhood in the city—Bayview-Hunter’s Point—saw rents rise to an average of $2,715 for a one-bedroom in 2016, with increasing gentrification pushing residents across the bay to Oakland as hip restaurants and condos remake the area in tech-obsessed SOMA’s image.
The incoming administration has given experts no reason to expect it will prioritize fixing the affordability crises for the middle class. “In terms of the federal government, I see no hope,” Dickerson says. But as with immigration reform and climate change, housing affordability is something that states and cities can tackle on their own. In 2017, this trend toward decentralized power will continue—that is, if cities make retaining middle class residents a priority. That means relaxing the zoning laws to permit more housing stock to enter the market. This is the single most helpful thing the city of San Francisco could do, for example, to counter the tech money forcing prices on the limited housing stock up, says Shulman.
They could also adopt initiatives to require that all new housing developments include a certain amount of below-market-rate affordable units—a program that cities like New York City and Boston already do, Lin says.
Dickerson says cities could go a step further than that by requiring developers to set aside housing for people who actually work in the city in exchange for tax breaks. This would also, she thinks, be less controversial to NIMBY-minded residents.
Lin, meanwhile, predicts more cities will follow New York City’s lead in fighting back against the AirBnB effect in 2017, which would also help ease the pressure on housing supply.
Middle class would-be residents can also look to a few bright spots. Thanks to the Great Recession, many millennials delayed marriage and children until they were more financially stable, and Shulman says they may now be reaching the age where they are ready for those big life milestones. He notes that in 2016, many millennials began to buy homes in the suburbs, seeking better school systems and more space.
Additionally, interest rates are expected to rise and the economic outlook in response to Trump’s presidency is so far relatively optimistic, as evidenced by the surging stock market in December. This bodes well for wage growth, which Shulman and his colleagues at UCLA expect to see over the next two years. All of this could help the middle class grow their savings. But for now, they’ll be doing it from the suburbs.
Go Back to Top. Skip To: Start of Article.Lame-cuck President Obama has decided to stuff his legacy into a Brazen Bull in a china shop and light a blazing fire underneath it. Just a week after fucking over Israel, the Obama administration and the FBI cobbled together an embarrassingly empty handed, heavily disclaimered, B-game hacking report. It's been utterly shredded by experts. Also, John Podesta's password was p@ssword. Coinciding with it's release, Barry "Choom Gang" Obama expelled 35 Russian diplomats and revoked access to their retreat, right before their New Year's Eve celebration. Oh my god...
Russian President Vladimir Putin (and quite frankly the rest of the world) is laughing at us. The Russian Embassy is trolling Obama with playground tweets. Social Media is on fire. Putin's response has been, in a nutshell, "We'll talk in 3 weeks when adults are in the room - in the meantime, US Diplomats and their families are welcome to the Kremlin for New Year's Eve."
Mic Dropsky. The below is an actual tweet from Russia, inviting the children of US diplomats to come party at the Kremlin.
Obama's actions over the last week have been nothing short of a massive temper tantrum and an embarrassment to the country. That hacking report was a complete joke, only to be outdone by any retards it fooled. My guess is that the "USA Today" demographic, as "compliant and unaware" as they are, ate it up. Paul Ryan and Nancy Pelosi's constituency, for example.
President-Elect Trump applauded Putin's mature response:
Nigel Farage, #Brexit avenger also chimed in:
Maria Zakharova, Russia's Director of Information and Press, said this (Translated):
Aaaand, of course the pundits reacted in kind:
January 20th can't come soon enough.
2016 was a generally successful year for stock market investors. US markets surged, and most domestic indices hit new all-time highs. The S&P 500 topped 2,200, and the Dow almost tagged 20,000.
But there were some serious sector rotations during the year. This wasn't like, for example, 2013, where the vast majority of stocks traded sharply higher. 2016 had plenty of falling knives, some of which are continuing to plunge yet deeper.
Which, if any, of these will turn it around in 2017? Here's the five biggest large-cap losers on the year (market cap of $10 billion or greater today).
#5 Royal Bank of Scotland (NYSE:RBS)
RBS started the year in swift decline. Shares stabilized, but proceeded to plunge newly following Brexit. RBS stock dropped close to 50% in two weeks. It has reduced its losses slightly over the past month, but still finds itself down 38% on the year.
Notably, this is a far larger loss than, say, Barclays PLC (NYSE:BCS), which is down less than 20% on the year. RBS' ongoing litigation problems are a big part of the reason. Investors don't like the uncertainty of not knowing how large the eventual legal bills will be.
On top of that, RBS managed to fail its stress test, in contrast with most other UK banks.
Sure, you can point to the bank's attractive sub 0.6x price/book ratio. But with its poor profitability ratios, there's a good reason for the sizable book value discount. Given the numerous issues facing the UK, I'd rather stick to stronger banks there, even if the discount isn't as large.
#4 Vertex Pharmaceuticals (NASDAQ:VRTX)
It wasn't a great year for biotechs. And Vertex, being in the rare disease space, was under particular pressure, as pricing pressures weighed on investor sentiment throughout the year.
Vertex put in generally strong earnings results over the course of the year, but lowered guidance going forward. As a company reliant on its blockbuster drug Orkambi, investors are probably going to remain nervous until they're more certain of its forward prospects.
The stock certainly came down a lot in 2016, but this is more due to where it started. It still doesn't look cheap even at today's price. When we talked of biotech bubbles in 2015, it was this sort of thing we had in mind. One plus, as shares continue to drop, odds of a buyout rise.
#3 Perrigo Company (NASDAQ:PRGO)
Shares of Perrigo are down 60% since early 2015 - this year's 43% decline isn't the full extent of the damage. The specialty pharma firm has had all sorts of problems. Having its CEO depart to run cratering Valeant (NYSE:VRX) certainly put the wrong sort of connection in investors' minds.
The company successfully (perhaps the wrong word) avoided a takeover offer from Mylan (NASDAQ:MYL) last year, but has greatly disappointed investors since then. The plunge in the share price has attracted numerous activist investors, who seek to restructure the company to try to unlock value.
However, not all the investors are satisfied. David Einhorn, for example, sold out of the company entirely this past quarter.
There may be value in some of these battered specialty pharma plays. I'm not ready to commit money to the sector yet - let's see how the healthcare landscape shifts after January 20th. But if you've got a strong stomach, you can make a case for this one.
#2 Teva Pharmaceutical (NASDAQ:TEVA)
Generic drugmaker Teva has seen shares plunge 44% on the year. And they're still dropping following an unexpected management team transition. Teva is now trading at levels not seen in a decade; even during the financial crisis, it didn't trade down this low.
Numerous problems are dragging down the stock. An investigation into price-fixing among generic drug makers is a big threat.
And the company's acquisitions have left it seemingly overleveraged. The $30 billion debt load now runs at more than 5x EBITDA. Teva has great free cash flow generation ability, however, so fears about a debt wipeout are probably overblown.
Teva stock could keep dropping. It faces a messy situation at the moment. However, we're probably closer to the bottom than the top for the stock, and it pays a nice dividend while you wait. Of the five biggest large-cap losers of the year, this is my favorite at today's price.
#1 Liberty LiLAC (NASDAQ:LILA)
Even after the recent rally, LILA stock is down 46% for the year. It takes the crown for 2016's biggest large-cap loser.
Liberty LiLAC is one part of John Malone's sprawling empire. Unfortunately for investors, this appears to be a weak link. LiLAC was already having a bad year. But things turned markedly worse in early November when shares dumped more than 20% following a bad earnings report.
The Caribbean/South American telco was slowed down by a hurricane and continuing lackluster economic performance across Latin America.
Many analysts cut their targets significantly for the company, admitting that they'd been way too optimistic on the firm immediately after it was spun out. It seems LiLAC overpaid for its CWC acquisition. While Malone is one of the best investors of our time, even the best can make mistakes.
Given that many people seemed to own this primarily due to Malone's involvement, it could still be a while before shares rebound, particularly if 2017 is as rough for Latin America as it appears it will be.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
3-Step Framework for Evaluating Your Performance in Hockey
Picture this…
You just finished up your hockey game and are on your way home when you get a text from your friend.
“How’d the game go?“
It went well, you tell him. Your team won!
“That’s great! How’d you play?“
This one’s a little harder to answer…
If you’re like most players, you’ll answer “I got a goal” or “I got an assist.“
But how would you answer that question if you didn’t get a goal? If you didn’t get any points?
Is ‘not getting on the score-sheet‘ considered a bad game?
I’m here to tell you there’s a lot more to it than that…
And unfortunately, too many players gauge their individual performance on results (like goals, points, saves, etc.), when in reality they need to be evaluating their performance at a much deeper level!
If you’re fed up with inconsistency, mediocre performances and just not knowing if you’re improving as a hockey player, then you’ll find this 3 step framework I’m about to share with you extremely helpful.
It’s short, to the point, and doesn’t take more than 5 minutes to implement. All you have to do is follow the instructions I lay out in this blog post and you’ll have a much better idea of your performance—as well as progression—as a hockey player.
If you’re a hockey player looking to get better, start following this framework for immediate results.
If you’re a coach, teach this simple framework to your kids and get them to evaluate their own performances based on how they played (the process) rather than the outcome (the results).
Let’s dive in!
But first…
The definition of progress is:
“Forward or onward movement to a destination.”
Simple statement right?
Nothing complicated here.
Yet so many people have trouble when it comes to monitoring progress.
That’s usually due to one of two things:
That first one is straightforward. Evaluating performance & progress should NEVER be based on results. Results can help benchmark your performance & progress, but should never dictate them outright.
No concept of where they’re at or where they’re going.
This one is the key!
In fact, it’s the underlying concept of the 3-step framework for evaluating your performance and fostering continuous progression & improvement as a hockey player.
Now, I won’t leave you hanging…
Here’s how to actually implement it yourself to start improving your game.
Before we start, I want you to understand that this isn’t some novel idea…
Business consultants, mentors and life coaches have been using this simple framework for decades to help their clients succeed—many of them make a very good living doing so.
Why?
Because many business owners & entrepreneurs put their head down and work until their eyes bleed, without paying much attention to anything else.
The ‘wise consultant‘ simply comes in and offers help by forcing them to take a step back and analyze where they’re at, where they want to be, and what it’ll take to get there.
Boom. Easy peasy.
Hockey players are just as guilty…
As hockey players, we too tend to put our head down and work hard. We focus on things like our skating speed, our hockey sense and our overall abilities, without thinking of much else.
What we rarely do is assess our progression—where we’re at, where we want to be, andwhat it’ll take to get there.
That’s the key to continuous progression.
But how do we leverage this concept?
Simple.
Be your own consultant and ask yourself the following 3 questions after each game in order to properly evaluate your performance and ensure you’re constantly getting better:
After every game, instead of looking at the score sheet to see if the referee gave you that assist on the 2nd goal, ask yourself what you did well.
Forget statistics. What did you do well?
Think of the question on a mental, technical, physical and tactical level.
*Shout out to The Champion’s Mind (affiliate link) for this one—great book and one I highly recommend for becoming a mentally strong player*
Really ask yourself these kinds of questions. Keep a log book or journal if you have to.
In fact, I did this for most of my career and it helped me tremendously.
Over time and after evaluating a few of your performances, you’ll have a good grasp on what you’re good at.
Now it’s time for the bad.
What are you struggling with time and time again? What facet of your game needs to get better in order for you to grow as a hockey player?
Again, consider the 4 criteria I mentioned above:
You’ll see that over a few games, many of the same things will pop up over and over again—these are red flags that need fixing.
Once you’re done, it’s onto the last step of the framework…
This is where you map out the details of your progression.
You’ve identified what you’re good at. You’ve identified what needs work.
Now you have to list the actions you must take in order to improve.
Confused? Let’s look at an example.
I want you to meet Tim—he’s a Builtforhockey subscriber just like you (wait, you’re not a subscriber? Get my free hockey IQ quiz and a bunch of other goodies by signing up here!)
Over the past few months, I’ve learned quite a bit about Tim as a hockey player via email. Among other things, he let me know what he’s currently comfortable with and struggling with in regards to his on-ice performance.
Long story short, Tim struggles with face-offs.
If Tim really wants to improve his face-off taking ability, here’s how he’d do it with the 3-step framework for continuous progression…
After Tim’s post game evaluation, he’d have something along these lines:
Then, the 3rd step in the framework—what do I need to do in order to become my best—might look something like this in Tim’s case:
See how powerful this is?
Tim has identified what he’s already good at—winning puck battles down low. This lets him know he can focus his time elsewhere, at least for now.
Tim also identified what he’s struggling with—winning face-offs. This lets him know where the bulk of his time should be spent next time he’s out on the ice.
By turning his findings into actionable tasks on his quest to become his best, progression becomes inevitable!
As hockey players, we need to do the same thing the business consultant does for his clients—establish a road-map to go from where you are to where you want to be.
It’s time hockey players take progression and development into their own hands.
It’s time hockey players start identifying what it takes to improve.
It’s time hockey players become their own consultants and map their way to success with this proven 3-step framework!
How do you gauge your on-ice performance?
Leave a comment below because I’d love to hear your thoughts on player development.
The post Built for Hockey – How to Know if You’ve Played a Good Game appeared first on TheCoachesSite.com.