What"s The Best Company To Work For Where You Live?

With unemployment in the US purportedly reaching its lowest level in 17 years (that is, according to the Department of Labor"s flawed household survey) employees who once would"ve been too fearful to leave their jobs are now actively looking for opportunities. With that in mind, many have probably wondered what"s the best company to work for where they live?

Well, HowMuch.com gathered data compiled by Forbes into an infographic to try and map out the best and largest employers in every country.

Forbes recently released a ranking of the best companies in the world using a variety of different perks and benefits, like the quality of food served to employees, parental leave policies or whether companies allow their employees to nap while on the job.

HowMuch mapped these companies by paying attention to their market capitalization to get a feel for how large an organization needs to be to afford such high-quality benefits. One company therefore represents each country, color-coded by market cap. Red countries have an employer worth over $100 billion, and dark blue countries boast relatively small employers under $10 billion.

Several trends immediately pop out from our map:

• Red countries with huge companies predominantly originate in North America and Western Europe.


• Alphabet is the largest on our list by a landslide with a market cap of $579.5 billion, bigger than the entire GDP of Argentina.


• The three exceptions proving the rule are a tobacco company in India called ITC with a market cap of $51.6 billion, plus Hong Kong (CNOOC, $54.8 billion) and Taiwan (Han Hai Precision, $54.4 billion). All three of these places experienced long-term and unique economic and political relationships with the West.


• Africa only contributes a single company to Forbes’ list, namely Remgro from South Africa, a conglomerate made of many subsidiaries from different industries.


• The Middle East and Eastern Europe also have only a few companies that made the cut.

Here’s a simplified list of the countries with the best employers in the world, ranked in order of their total market cap:

• 1. United States - Alphabet: Computer Services - $579.5B and 72,053 employees


• 2. Switzerland - Nestle: Food Processing - $229.5B and 328,000 employees


• 3. Netherlands - Unilever: Household/Personal Care - $143.9B and 169,000 employees


• 4. Germany - Daimler: Auto & Truck Manufacturers - $76.1B and 282,488 employees


• 5. Hong Kong - CNOOC: Oil & Gas Operations - $54.8B and 19,718 employees


• 6. Taiwan - Hon Hai Precision: Electronics - $54.4B and 1,000,000 employees


• 7. Canada - Suncor Energy: Oil & Gas Operations – $51.7B and 12,837 employees


• 8. India - ITC: Tobacco - $51.6B and 25,564 employees


• 9. Italy - Enel: Electric Utilities - $47.5B and 62,080 employees


• 10. Australia - CSL: Biotechs - $43.9B and 16,000 employees

Coming in at No. 1 is, of course, Alphabet. It tops the list because of its size and market dominance.
 

Goldman: Automated Trucks To Cost 300k Jobs Per Year

Authored by Jon LeSage via OilPrice.com,

While Google’s Waymo company has taken center stage for bringing self-driving cars to roads, autonomous trucking may make it to the mainstream first. 

Silicon Valley startups, technologists, and venture capitalists see great potential in the technology - even more than most traditional trucking companies are supporting.

For months, Tesla CEO Elon Musk has put out teasers that the electric carmaker will soon reveal an electric semi-truck with autonomous capabilities. That announcement may take place this week, on November 16.

Embark, a Silicon Valley start-up, is scheduled to release details next week on its self-driving technology for trucking. The automated system has tested in partnership with truck-leasing company Ryder and Electrolux, an appliance manufacturer. Trial runs are exploring the potential of transporting trailers to Electrolux’s California warehouses with autonomous trucks.

CB Insight, which tracks venture capital, reports that companies will place about $1 billion in commercial truck autonomous systems this year, 10 times the level of spending three years ago.

The $700 billion trucking industry continues to be an integral part of the U.S. economy, and that of other economic giants and developing countries around the world. With more manufacturing happening overseas in places like China, trucking is part of making sure everything from automobiles to packaged food products make it to warehouses and end users on time.

Trucking companies and giants who invest heavily in logistics—like Amazon and Walmart—see great potential in cutting costs and speeding up delivery times. That will come via cutting labor costs when truck drivers no longer become necessary, and by extending the hours that commercial trucks can be kept in operation.

Companies also believe that traffic accidents will be reduced when autonomous vehicles become widely adopted for passenger and cargo transport.

Insurance premiums are expected to go down, along with collision repair costs. Autonomous driving is expected to be much safer than what’s delivered by human drivers.

Waymo and other tech companies and automakers currently testing out self-driving cars are preparing to play a part in developing cities around the world. Government officials, employers, and residents in these cities hope that self-driving cars will eventually reduce the number of cars on the streets and make them safer with less car crashes.

Self-driving cars face tougher challenges navigating through crowded, chaotic city streets—and face even tougher regulatory hurdles to cross. Cargo trucks spend most of their time traveling down broad, open highways with much less traffic.

There’s also the practicality of several trucks “platooning” together on highways that simplifying the equation over companies like Waymo dealing with crowded cities and higher risk for collisions.

Volvo Trucks sees great potential in utilizing platooning systems for cost savings and achieving more efficiency in freight hauling. One autonomous truck can lead a platoon with two or more trucks following close behind, taking advantage of the aerodynamic efficiency.

The company successfully demonstrated on-highway truck platooning in California during March 2017. An alliance was set up for the trial run with Partners for Advanced Transportation Technology (PATH) at the University of California, Berkeley, to test three Volvo VNL 670 model tractors hauling cargo containers at the Los Angeles Port complex and along Interstate 110.

Volvo sees opportunities in achieving fuel savings, improving highway safety, and increasing the capacity of transportation systems.

Daimler AG’s truck division is following a similar path, announcing in September that it will test platooning technology on U.S. roads. The German company’s U.S. division gained approval from Oregon’s transportation regulatory agency after completing a successful trial run in the state.

US Xpress, one of the largest trucking companies in the U.S., added autonomous braking and collision-avoidance systems to its 7,000-plus truck fleet. Next, the company will add automated lane steering for deployment within the next three years.

The 7,000-plus trucks owned by US Xpress, one of the nation’s largest trucking companies, were updated with autonomous braking and collision-avoidance systems. Max Fuller, the company’s co-founder and executive chairman, plans to upgrade them to have automated lane steering in three years.

“I’m putting building blocks into my trucks that each year gets us closer and closer,” said Max Fuller, the company’s co-founder and executive chairman.

Another Silicon Valley company, Peloton Technology, is developing a platooning system that will make it easier for trucks to travel within a platoon. That means they’ll save large volumes of gasoline and diesel typically consumed by work trucks.

Peloton’s system uses cameras, sensors, and networking equipment for trucks to communicate with each other. It can avoid disasters such as a second truck ramming into the first after a sudden stop.

Goldman Sachs economists predicted that trucking will shed about 300,000 jobs per year starting in about 25 years. That may begin sooner than anticipated if automated trucking clears government hurdles and technology innovations—and becomes widely adopted by trucking companies.

Daimler One-Ups Elon Again; Reveals Electric Semi-Truck Weeks Before Tesla

Weeks before Tesla was supposed to shock the world by revealing their battery-powered semi-truck, Mercedes has once again one-upped the Silicon Valley darling by beating them to the punch.  As Bloomberg points out, earlier today Daimler revealed their E-Fuso Vision One prototype, an electric semi-truck that can carry 11 tons of cargo some 220 miles before having to recharge. 

Daimler AG is jumping the gun on Tesla Inc. by showing off a battery-powered heavy-duty truck weeks before the California electric-car maker’s own planned unveiling, in a sign of the growing rivalry between the companies.

 

The E-Fuso Vision One prototype can carry 11 tons of cargo as far as 350 kilometers (220 miles) before recharging, the world’s largest maker of commercial vehicles said Wednesday in a statement. The truck, which would be geared to shorter intra-city trips, could go on sale within four years in Europe, Japan and the U.S.

 

The truck is part of plans by Daimler’s Fuso brand to add electric and hybrid options across its range of trucks and buses. The announcement steals a march on Tesla, which plans to show off a concept truck on Nov. 16. Chief Executive Officer Elon Musk engaged in a Twitter tussle with Daimler, a former Tesla shareholder, about electric-vehicle spending last month. Daimler’s Mercedes-Benz is also ramping up a line of battery-powered luxury cars to challenge Tesla models.

Of course, this comes as Elon was recently forced to delay Tesla"s much anticipated reveal celebration due to his Model 3 "production hell."

Tesla Semi unveil now Nov 16. Diverting resources to fix Model 3 bottlenecks & increase battery production for Puerto Rico & other affected areas.

— Elon Musk (@elonmusk) October 6, 2017

As we recently pointed out (see: Porsche And Mercedes Plot Musk Offensive With "Anything Tesla Can Do, We Can Do Better" Strategy), Tesla, once the only real electric car game in town, is suddenly facing an onslaught of competition from major auto OEMs who have already figured out how to weld steel on an assembly line.

Daimler AG plans to spend $1 billion to start production of Mercedes-Benz electric vehicles at its Alabama factory, setting the world’s largest luxury-car maker up to battle with battery-car specialist Tesla Inc. on its home turf.

 

The German automaker will build its fifth battery plant globally and create more than 600 jobs in the region, the company said Thursday in a statement. The Alabama factory will assemble electric sport utility vehicles, taking on Tesla’s Model X and making Stuttgart-based Daimler the first European company to assemble plug-in autos in the U.S.

 

“We’re celebrating our 20th anniversary at our production facility in Tuscaloosa, Alabama, and we’re taking this as an opportunity to expand the operation and further fuel growth,” production chief Markus Schaefer said in a Bloomberg TV interview. “We’re very confident for future growth in the U.S. in the long-term. ”

 

Daimler’s investment shows the carmaker’s shift to electric vehicles is taking shape. The German manufacturer is also in talks to expand its Denza joint venture with BYD Co. in China with additional models, Chairman Wang Chuanfu told a group of reporters in the southern Chinese city on Thursday.

As Sanford Bernstein analyst Max Warburton recently noted, companies like Mercedes and BMW are pursuing an "anything Tesla can do, we can do better" strategy.

The company is pursuing an "anything Tesla can do, we can do better" strategy, Sanford Bernstein analyst Max Warburton said in a recent note to investors. "Mercedes is convinced it can match Tesla battery costs, beat its manufacturing and procurement costs, ramp up production faster and have better quality. It is also confident its cars will drive better."

Of course, the only question now is when will Tesla shareholders finally realize that their monopoly is slowly coming to an end?

Hedge Fund CIO: "Never In Human History Have So Many Things That Weigh Nothing Had So Much Value"

Returning to the world of investing and market commentary one week after surgery, One River"s CIO Eric Peters touches on some of the most topical issues, including his latest take on bitcoin and money in particular, and the definition of value (which is increasingly more weightless) in general, the deflationary impact of tech on prices and wages and what the Fed"s inflation target should be in this "new normal", recent trends in R&D spending, and, of course volatility.

Below we present select highlights from Peters" latest letter:

Overall

“Imagine 3,500 elephants,” said Andrew Jones, Exchequer Secretary to the Treasury. “Or consider 900 double decker buses.” And at least one bored American did.  “That is the rough weight of the 1.2bln coins the UK public has handed in over the past six months.” You see the British have introduced a new twelve-sided pound coin, replacing the little round bloke they’ve had since 1983 (no longer legal tender effective today). This reminds us that money is whatever we all agree it is, or what we’re told it is.

Naturally, the people who print our money tell us it is something real, tangible, weighty. Like an elephant, a bus, or even gold. But it’s not. Money is an illusion, swirling in the ether. Imagine 290k Bitcoin ($5,856 record high this week), or consider 4.7mm Ethereum. They’re both worth 1.2bln pound coins, but weigh less than 3,500 elephants. They weigh nothing.  

In fact, never in human history have so many things that weigh nothing had so much value, fueled such vast fortunes. Data weighs nothing. Knowledge weighs nothing. Software weighs nothing. Algorithms weigh nothing. And as the singularity approaches - that point when artificial intelligence surpasses all human intelligence - we struggle to fathom its infinite weight, uncertainty.

As humanity transitions from weight to weightlessness, it seems the gravity that once tethered asset prices to earth is losing its grasp. Perhaps the profound power of weightlessness will accrue in extraordinary commercial ways (and profits) to the companies with the infrastructure to harness it - maybe this is what we are beginning to see. Or perhaps, it is simply that after a decade of unprecedented monetary meddling, our bankers have broken the bond of fiat, shattering the illusion.

And the conditions prompting people to exchange their round blokes for block chains are the same conditions leading people out of money into stocks.

* * *

Destiny: Asia now accounts for 42% of global R&D (public plus private), North America 29% and Europe 21%. 25yrs ago, the US invested roughly 2.5% of GDP on research and development. Today we devote 2.7%, equal to $475bln/yr. China invested 0.7%/GDP in R&D in 1992, but tripled that to 2.1% today, equal to $410bln in PPP dollars. The EU invests 2.0% today, $388bln. Japan invests 3.6% today, $180bln. Germany 2.9%, $110bln. South Korea 4.3%, $91bln. France 2.3%, $60bln. UK 1.7%, $45bln. Russia 1.2%, $43bln. Brazil 1.2%, $35bln. Taiwan 3.0%, $33bln. Italy 1.3%, $27bln. Canada 1.6%, $26bln. Australia 2.1%, $23bln. Turkey 1.0%, $15bln. Sweden 3.2%, $14bln. Switzerland 3.0%, $13bln. Israel 4.0% (global leader), $13bln. Mexico 0.9%, $9bln. South Africa 0.7%, $5bln. Indonesia 0.1%, $2bln. Saudi Arabia 0.3%, $2bln. Vietnam 0.2%, $0.8bln. and Iran 0.7%, $0.7bln.

Destiny II: Corporate R&D stats are hard to pin down but Amazon led the world in R&D last year with roughly $16.1bln spent. Google $13.9bln, Volkswagen $13.6, Intel $12.7bln, Samsung $12.5bln, Microsoft $12.3bln, Roche $11.4bln, Merck $10.1bln, Apple $10bln, Novartis $9.0bln, Johnson & Johnson $9bln, Huawei $8.4bln, General Motors $8.1bln, Toyota $8.0, Pfizer $7.8bln, Ford $7.1bln, Daimler $6.5bln, Oracle $6.2bln, Facebook $5.9bln, Cisco $5.7bln, Honda $5.5bln, IBM $5.4bln, Eli Lilly $5.2bln, Qualcomm $5.1bln, General Electric $4.8bln, Boeing $4.6bln, Celgene $4.5bln, Bristol-Meyers $4.6bln. Tesla spent just $2.8bln in cumulative R&D in the past 7yrs, turning the auto industry on its head. And Alibaba just announced a $15bln 3yr R&D budget.

* * *

Anecdote: “Every single trading decision leads to another,” said Roadrunner. “And when you get offsides in a market, it’s difficult to get back in sync,” explained the biggest market maker in equity volatility. “So I spend my quiet hours going back in time, revisiting the series of events and decisions that led me to the present.” The world rushed past us, a never-ending flow, and I recalled a point far upstream when we first met. A decade ago, early in his journey, with his stake, ambition. “I have lots of traders now, who often get themselves tangled in things. I see so much. I try to help, but often with very little information, without the context, the history.”

Having survived 2008 with capital intact and hubris diminished, he embraced exchange traded volatility products. “When my traders struggle, I get drawn into their markets, their books, the chain of events that led them to their present. I help them see things within, and learn things myself.”

VIX futures traded 4k contracts per day in 2008. Today they trade 300k. The VXX (VIX ETF) didn’t exist in 2008, and now trades 100mm shares on a busy day, as much as the SPY (S&P 500 ETF).

“The source of my success is in reliving the past, then applying that to the future. And I’ve learned that markets turn two weeks from my point of greatest pain; I’m always max long volatility two weeks before it bottoms.”

We laughed, because of course, if you’ve learned to know when you’re too early then you should never be too early. “You can’t fully escape yourself, but you can learn to manage the consequent losses better because you see them approaching. And then when the turn comes, you understand it, you know it, you’re ready. You’ve seen the future unfold in the past.”

Crisis Meet China - China Meet Crisis

By Chris at www.CapitalistExploits.at

Earlier this week, Kyle Bass spoke on Bloomberg about the reckless expansion of the credit system in the Middle Kingdom.

He warned about the ballooning asset-liability mismatch in the shady $4-trillion wealth management products (WMPs) market.

And went on to say "this is the beginning of the Chinese credit crisis" while admitting it could take some time for things to really start unraveling.

A fair call...

How many of us have figured the trend out, only to allocate too much capital to a trade and even lose on a trade which finally works... eventually? I know I have. I"m pretty sure Kyle"s position sized pretty well. After all, this is far from his first rodeo.

In the interview Kyle referenced an SCMP article from a few weeks ago that went largely unnoticed by most. It was on the Chinese government coming up with more and more creative ways to stem the capital outflow underway since mid-2014:

"China"s foreign exchange regulator, SAFE, has asked for cooperation from multinationals, including Sony, BMW, Daimler, Shell, Pfizer, IBM and Visa, to manage and control the flow of capital out the country."

This all feels a bit deja vu-ish.

Long-time readers will know we"ve been bearish on China and the renminbi for well over 2 years now. Back in October 2014 we said that:

"I don’t know exactly how a breakdown in the renminbi will play out. However, it is a sure bet that all those markets that prospered over the last 15 years or so on the back of a China will do badly. Where things become shady is the collateral damage to other markets that have had nothing to do with the Chinese economic miracle."

A few months later, we took a closer look at the cracks appearing in China"s interbank lending market, indeed feeling (correctly in hindsight - lucky us) that timing had arrived to short the currency cross via the options market:

"The interbank lending market is an integral part of any country’s banking system as it is where banks maintain their short-term liquidity requirements. Often a bank will have a mismatch between between short-term assets and obligations and as such they will have to enter the interbank lending market to maintain optimal liquidity. If a bank has excess short-term reserves they may want to lend these out to other banks who have a shortfall in short-term reserves. The opposite also occurs where a bank, with a short-term funding deficit, will enter the market to borrow funds to match short-term liabilities.

The behavior of the interbank lending market can provide one with a good appreciation for the liquidity of the banking system as a whole. If there is a lot of liquidity in the system (more short term assets than liabilities) the interbank rate will fall, if there is scarcity of short term assets relative to liabilities then rates will rise. So a rising interbank rate is generally associated with contracting liquidity conditions. Rapid rises in interbank lending rates are often associated with banking or credit crisis. This happened in the lead up to the GFC. What happened was that as banks began to fear the ability of other banks, who are their counter-parties, to make good on their obligations they demanded higher rates especially from banks already facing liquidity problems which only compounded their original the situation.

A rapid rise in a country’s interbank lending market is also a good predictor of the direction of a country’s currency, or at worst a confirming indicator. Let’s have a look at the interbank lending market of a few emerging nations over the last 12-18 months and then look at what is happening with the renminbi. I think it is instructive for what we have been positioning for in our funds."

In truth, it was an easy bet to make.

Volatility was around 2%! NOT buying put options would have been like having Scarlett Johansson invite you into her bed and then falling promptly asleep. You just couldn"t do that. And so you had to buy.

Taking a look at the Chinese interbank lending today:

Not yet getting critical but worth watching.

And pricing of the options:

So a 6.6% move to make 100%. Seems reasonable but nowhere near as good as it looked in late 2014 - unfortunately.

The problem - if there is one - is that 12 months is a long time to date an ugly girl, work for a nasty boss, or drive a Lada. But it isn"t a particularly long timeframe to hold an option for.

And yet that"s the best the option market gives us.

Sure, you can throw your towel into the ring in the futures markets but if, like me, you dislike leverage and margin calls (because you WILL get it wrong at some point), then you"re going to have to figure some better way to ride this pony.

The answer, I think, is this.

- Chris

"What you see when the liquidity dries up is people start going down... and this is the beginning of the Chinese credit crisis." — Kyle Bass

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The Deep History Of US, Britain's Never-Ending Cold War On Russia

Authored by Finian Cunningham via The Strategic Culture Foundation,

After decades of delaying, the United Nations finally released archives from the Second World War-era war crimes commission investigating the Nazi Holocaust. The source of those archives on Nazi war crimes were Western governments, including those in exile at the time of the war, such as the Belgian, Polish and Czechoslovakian. The time period covered is 1943-1949. Washington and London had long sought to halt the release. Why?

Notably, the landmark publication of the files last month was given scant Western media coverage. Surprisingly, perhaps, because the story that can be gleaned from the documents tells of a hidden history of the Second World War, namely the systematic collusion between the American and British governments and the Nazi Third Reich.

As a report in Deutsche Welle remarked on the released archives:

«The files make clear that [Western] Allied forces knew more about the Nazi concentration camp system before the end of the war than has generally been thought».

This revelation points to more than just «knowledge» among the Western allies of Nazi-era crimes; it points more damningly to state collusion. This would also explain why Washington and London have been reluctant to make the UN war crimes files publicly available.

There has long been a controversial debate among Western nations about why the US and Britain in particular did not do more to bomb the Nazi infrastructure of death camps and railroads. Washington and London have often made the claim that they did know the full extent of the horror being perpetrated by the Nazis until the very end of the war when extermination centers such as at Auschwitz and Treblinka were liberated – by the Soviet Red Army, it should be noted too.

However, what the latest release of UN Holocaust files shows is that Washington and London were indeed well aware of the Nazi Final Solution in which millions of European Jews and Slavic people were being systematically worked to death or exterminated in gas chambers. So the question again is: why did the US and Britain not direct more of their aerial bombing campaign to destroy the Nazi infrastructure?

One possible answer is that these Western allies had a callous disregard for the Nazi victims. Washington and London establishments were themselves accused of harboring antisemitic prejudices, as can be seen from the scandals when both these governments spurned thousands of European Jewish refugees during the Second World War, in effect sending many of them to their deaths under the Nazi regime.

Not excluding the above factor of Western racist insouciance, there is a second more disturbing factor. That the Western governments, or at least powerful sections, were loath to hamper the Nazi war effort against the Soviet Union. Notwithstanding that the Soviet Union was a nominal «ally» of the West for the defeat of Nazi Germany.

This perspective harks to a radically different conception of the Second World War in contrast to that narrated in official Western versions. In this alternative historical account, the rise of the Nazi Third Reich was deliberately fomented by American and British rulers as a bulwark in Europe against the spread of communism. Adolf Hitler’s rabid anti-Semitism was matched only by his detest of Marxism and the Slavic people of the Soviet Union. In the Nazi ideology, they were all «Untermenschen» (subhumans) to be exterminated in a «Final Solution».

So, when Nazi Germany was attacking the Soviet Union and carrying out its Final Solution from June 1941 until late 1944, little wonder then that the US and Britain showed a curious reluctance to commit their military forces fully to open up a Western Front. The Western allies were evidently content to see the Nazi war machine doing what it was originally intended to do: to destroy the primary enemy to Western capitalism as represented by the Soviet Union. This is not to say that all American and British political leaders shared or were even aware of this tacit strategic vision. Leaders like President Franklin Roosevelt and Prime Minister Winston Churchill appeared to be genuinely committed to defeating Nazi Germany. Nevertheless, their individual views must be set against a background of systematic collusion between powerful Western corporate interests and Nazi Germany.

As American author David Talbot documented in his book, The Devil’s Chessboard: Allen Dulles, the CIA and the Rise of America’s Secret Government (2015), there were massive financial links between Wall Street and the Third Reich, going back several years before the outbreak of the Second World War.

Allen Dulles, who worked for the Wall Street law firm Sullivan and Cromwell and who later headed up the American Central Intelligence Agency, was a key player in the linkage between US capital and German industry. American industrial giants, such as Ford, GM, ITT and Du Pont were invested heavily in German industrial counterparts like IG Farben (manufacturer of Zyklon B, the poisonous gas used in the Holocaust), Krupp Steel and Daimler. American capital, as well as British, was thus integrated into the Nazi war machine and the latter’s dependence on the system of slave labor as provided by the Final Solution.

This would explain why the Western allies did so little to disrupt the Nazi infrastructure with their undoubted formidable aerial bombing capacity. Far more damning than mere inertia or indifference owing to racist prejudice towards the Nazi victims, what emerges is that the Americans and British capitalist elite were invested in the Third Reich. Mainly for the purpose of eliminating the Soviet Union and any kind of genuinely socialist global movement. Bombing Nazi infrastructure would have been tantamount to deleting Western assets.

To this end, as the war was drawing to a close and the Soviet Union looked poised to roll up the Third Reich singlehandedly, the Americans and British belatedly stepped up their war efforts from western and southern Europe. The goal was one of salvaging Western assets remaining in the Nazi regime. Allen Dulles, the director of the-soon-to-be-formed American Central Intelligence Agency, extricated top Nazis and their gold looted from Europe in secret surrender deals known as Operation Sunrise. Britain’s military intelligence MI6 was also involved in the clandestine American effort to salvage Nazi assets via ratlines. The bad faith on display to the Soviet «allies» heralded the chill of the ensuing Cold War that immediately followed the Second World War.

Significant and damning testimony of what was going down was given recently in a BBC interview by Ben Ferencz, the most senior surviving US prosecutor from the Nuremberg trials. At age 98, Ferencz was still able to lucidly recall how scores of Nazi war criminals were let off the hook by the American and British authorities. Ferencz cited US General George Patton who remarked just before the final surrender of the Third Reich in early May 1945, as saying: «We’re fighting the wrong enemy». Patton’s candid expression of deeper animosity towards the Soviet Union than towards Nazi Germany was consistent with how the US and British ruling class had been colluding with Hitler’s Third Reich in a geo-strategic war against the Soviet Union and worker-led socialist movements arising across Europe and America.

In other words, the Cold War which the US and Britain embarked on after 1945 was but a continuation of hostile policy towards Moscow that was already underway well before the Second World War erupted in 1939 in the form of a build up of Nazi Germany. For various reasons, it became expedient for the Western powers to liquidate the Nazi war machine, along with the Soviet Union. But as can be seen, the Western assets residing in the Nazi machine were recycled into American and British Cold War posture against the Soviet Union. It is a truly damning legacy that American and British military intelligence agencies were consolidated and financed by Nazi crimes.

The recent release of UN Holocaust files – in spite of American and British prevarication over many years – add more evidence to the historical analysis that these Western powers were deeply complicit in the monumental crimes of the Nazi Third Reich. They knew about these crimes because they had helped facilitate them. And the complicity stemmed from Western hostility towards Russia as a perceived geopolitical rival.

This is not a mere historical academic exercise. Western complicity with Nazi Germany also finds a corollary in the present-day ongoing hostility from Washington, Britain and their NATO allies towards Moscow. The relentless build up of NATO offensive forces around Russia’s borders, the endless Russophobia in Western propagandistic news media, the economic blockade in the form of sanctions based on tenuous claims, are all deeply rooted in history.

The West’s Cold War towards Moscow preceded the Second World War, continued after the defeat of Nazi Germany and persists to this day regardless of the fact that the Soviet Union no longer exists. Why? Because Russia is a perceived rival to Anglo-American capitalist hegemony, as is China or any other emerging power that undermines that desired unipolar hegemony.

American-British collusion with Nazi Germany finds its modern-day manifestation in NATO collusion with the neo-Nazi regime in Ukraine and jihadist terror groups dispatched in proxy wars against Russian interests in Syria and elsewhere. The players may change over time, but the root pathology is American-British capitalism and its hegemonic addiction.

The never-ending Cold War will only end when Anglo-American capitalism is finally defeated and replaced by a genuinely more democratic system.

In First Week Of ECB "Taper", Draghi Ramps Up Purchases Of Corporate Bonds

In previewing today"s newsflows, Deutsche Bank"s Jim Reid this morning said that "perhaps the most interesting stat today will be the ECB CSPP number which will include 3 days worth (out of 5) of settled secondary purchases under the new tapering regime. A big debate has been as to whether they taper CSPP in line with the PSPP or leave it running at a similar pace. Obviously the latter would be very good for credit technicals."

Reid said that "for choice I think they do taper CSPP" and added that "we won"t know for sure today but we"ll perhaps get some clues in the size of the purchases. The last two weeks have seen daily numbers of EU335m and 308m respectively down from the average of 365m since the program started so there"s a little clue here that they have been scaling back a touch. We also have to adjust for the slightly below 20% of primary in the number which due to longer settlement periods won"t be under the new regime in today"s number. So an interesting release to follow this afternoon."

Moments ago the ECB disclosed its "anticipated" first stub week of bond purchases under the tapered regime, when it disclosed that it as of April 7 it held €77.87BN in corporate bonds.

So it may come as a surprise to Jim, and other ECB watchers, that contrary to expectations, not only did the ECB not trim its corporate purchases for the week, but appears to have ramped bond buys, as its holdings rose from €75.46 to €77.87, a €2.41BN increase, or about €482MM per day, roughly a 40% increase from the recent "scaled back" run-rate of €308MM, and also above the daily CSPP program average of €365MM.  To be sure, as Reid also noted, the number has to be adjusted for the slightly below 20% of primary in the number which due to longer settlement periods won"t be under the new regime in today"s number, although even revising for that, it appears that the ECB has aggressively ramped up its purchases in the first week of the tapered program.

As a reminder, the ECB has provided a strong bid for Euro credit since its announcement of CSPP in Mar-16. iBoxx EUR IG and HY corporate credit spreads have tightened by 40bps and 197bps respectively since announcement. Corporate purchases began on 08- Jun-16, with a weekly average purchase of ~€1.8bn and total corporate bond holdings to date of €75.45bn (as of 31-Mar-17), or roughly €7.8bn a month. The ECB purchases aggregated a total return of -0.46% in Mar"17 vs 1.06% in Feb"17. Bonds purchased under CSPP have performed worse than the broad index (iBoxx EUR IG Non-fin Senior index) which returned -0.30% in March. Utilities sector with highest exposure by amount outstanding returned -0.06%.

So what did the ECB buy in the latest week? According to a Bloomberg the ECB purchased at least 11 corporate bonds under the CSPP program, which lifts the number of securities held to 894.

• As of Friday, the ECB now holds €77.87 Billion, or ~12.39%  ofthe €628.34 billion in European corporate bonds outstanding.


• The ECB bought bonds issued by BMW Finance, Daimler, DIA, EDF, Engie, HeidelbergCement, Italgas, Kering, Suez and Telecom Italia;


• Of note: 148, or 16.6% of the 894 securities are negative yielding. Utilities remain the largest industry group with 237 securities.

Finally, since the first week of the month may have some "noise" in the ECB"s purchases, we suggest waiting until next Monday for the definitive answer if the ECB has ignored tapering when it comes to corporate bonds, before rushing to buy even more Euopean corporates in hopes of frontrunning the ECB.

Used Car Prices Crash Most Since 2008

Authored by Mike Shedlock via MishTalk.com,

According to NADA Used Car Guide, wholesale prices on used vehicles are getting crushed. Let’s take a look at the details.

Used Car Prices Since 1995

Used Car Prices by Type of Vehicle

Used Market Update

In a reversal of what typically occurs in February, wholesale prices of used vehicles up to eight years old fell substantially last month, dropping 1.6% compared to January. The drop was counter to the 1% increase expected for the month and marked just the second time in the past 20 years prices fell in February (last years’ scant 0.2% being the other instance).

NADA Used Car Guide’s seasonally adjusted used vehicle price index fell for the eighth straight month, declining 3.8% from January to 110.1. The drop was by far the worst recorded for any month since November 2008 as the result of a recession-related 5.6% tumble. February’s index figure was also 8% below February 2016’s 119.4 result and marked the index’s lowest level since September 2010.

Incentives Jump by 18.1%

Automakers grew incentive spending once again in February, making it the 23rd month in a row where spending was increased. On average, spending reached $3,594 per unit versus $3,043 per unit in February 2016 according to Autodata.

Among the U.S. Big Three, GM raised incentives by 27.4% in February to an average of $5,125 per unit. Spending at Ford Motor Company rose by 20.9% to $4,012 per unit, while FCA increased incentives by 10.6% to $4,365.

As for Import automakers, Toyota Motor Sales raised incentives by 7.9% in February, reaching an average of $2,267 per unit. American Honda grew incentives by 26.6% to $1,886, while Nissan North America increased spending by 20.1% to $4,080 for the month.

Inventory Falls to 74 Days

Compared to January, days’ supply fell by 11 days in February, landing at 74 days for the period. Looking back, February 2016 saw a supply of only 69 days according to Wards Auto.

GM’s supply reached 91 days over the month, due largely to Buick’s industry high 167-day inventory. Ford Motor Company’s supply fell to 78 days, while FCA’s inventory dropped to 83 days.

Toyota Motor Sales’ supply decreased to a lean 67 days, matching Nissan’s figure for 67 days for the month. Meanwhile, inventory for Honda fell to 74 days. Subaru’s 38 days of supply remained lowest in the industry.

As for luxury automakers, BMW’s inventory fell to 46 days, while Daimler inventory remained unchanged versus January at 44 days’ supply. Cadillac’s inventory of 107 days was the highest in the luxury sector, while Tesla’s two days was the lowest.

Desutche Bank is gravely concerned...

We’ve grown increasingly concerned about U.S. Used Vehicle Pricing down 7.7% yoy during February, per NADA. A decline in used prices has been widely anticipated given a significant increase in used vehicle supply (off-lease vehicles). But the magnitude of the recent drop was nonetheless surprising (February’s drop was largest recorded for any month since Nov. 2008). NADA cited a number of factors contributing to the drop, including an increase in late model auction supply from rental fleets, and delayed tax refunds. Used prices have a significant impact on New Vehicle demand/pricing through their effect on affordability (most new car purchases involve a trade-in).

New/Used Vehicle Pricing & Demand Relationship. Some consumers shift from New to Used when Used Vehicle prices become relatively more attractive, negatively impacting New Vehicle demand. Used price deterioration also has an impact on credit, as lenders watch loan loss severity (and frequency), and tighten when this stat. weakens (potentially creating a negative feedback loop). At a more macro level, used vehicle price weakness is also seen as an indicator of aggregate vehicle supply/demand imbalance in the economy–caused by new vehicles entering the parc significantly faster than the rate of scrappage and net new licensed driver growth. This situation should ultimately self-correct as new car sales come under pressure. That said, the biggest fear for investors is that Auto OEMs become incrementally more price aggressive to support New Vehicle sales. Historically, every 1% decline in Used Vehicle prices has corresponded with a 0.2% decline in New Vehicle prices.

Fundamentally Speaking

NADA partially blames late tax refunds for some of the declines in March.

While it’s true the IRS slowed claims for the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit (ACTC) to combat fraud, late refunds in 2017 cannot possibly explain an eight-month trend.

Yet, based on tax refunds, NADA expects a rebound in used car prices in March.

With massive incentives on new vehicles, I say, let’s see. Regardless, it’s pretty clear that car sales are slowing, and it takes bigger and bigger incentives to push them out the door.

Recall that on March 7, GDPNow 1st Quarter Forecast Plunges to 1.3% Following Vehicle Sales and Factory Orders Reports.

Also recall that the FRBNY Nowcast did not take auto sales into consideration.

On March 15, I reported GDPNow Forecast Dips to 0.9%: Divergence with Nowcast Hits 2.3 Percentage Points – Why?

Is this all related to slow tax refunds? We will soon find out.

Angry Germany Slams Trump Criticism: Urges US To "Build Better Cars", Accuses Washington Of Causing Refugee Crisis

An angry Berlin has responded with a staunch defense of its policies after President-elect Donald Trump criticized German Chancellor Angela Merkel in two separate Sunday interviews, one with Germany"s Bild and one with the Sunday Times, for her stance during the refugee crisis while threatening a 35% tariff on BMW cars imported into the US.

Germany’s deputy chancellor and minister for the economy, Sigmar Gabriel, said on Monday morning that a tax on German imports would lead to a “bad awakening” among US carmakers since they were reliant on transatlantic supply chains. “I believe BMW’s biggest factory is already in the US, in Spartanburg [South Carolina],” Gabriel, leader of the centre-left Social Democratic party, told the Bild newspaper in a video interview.

“The US car industry would have a bad awakening if all the supply parts that aren’t being built in the US were to suddenly come with a 35% tariff. I believe it would make the US car industry weaker, worse and above all more expensive." Playing Trump"s threat off Congress, Gabriel added that he "would wait and see what the Congress has to say about that, which is mostly full of people who want the opposite of Trump" as quoted by The Guardian.

In his interviews with Bild and the Times, the US president-elect had indicated that he would aim to realign the “out of balance” car trade between Germany and the US. “If you go down Fifth Avenue everyone has a Mercedes Benz in front of his house, isn’t that the case?” he said. “How many Chevrolets do you see in Germany? Not very many, maybe none at all … it’s a one-way street.”

So, when asked what Trump could do to make sure German customers bought more American cars, Gabriel had a simple suggestion: “Build better cars.”

Asked what Trump could do to make sure German customers bought
more American cars, Sigmar Gabriel said: ‘Build better cars.

Trump"s interview had an adverse impact shares in carmakers BMW, Daimler and Volkswagen, which fell on Monday morning following the President-elect"s comments. BMW shares were down 0.85%, shares in Daimler were 1.54% lower and Volkswagen shares were trading 1.07% down in early trading in Frankfurt. The reason for Trump"s latest outburst at Germany"s car giants is that all three carmakers have invested heavily in factories in Mexico, where production costs are lower than the US, with an eye to exporting smaller vehicles to the American market, a move which Trump vocally disapproves.

Meanwhile, a BMW spokeswoman said a BMW Group plant in the central Mexican city of San Luis Potosi would build the BMW 3 Series starting from 2019, with the output intended for the world market. The plant in Mexico would be an addition to existing 3 Series production facilities in Germany and China.

* * *

Responding to Trump’s comments that Merkel had made an “utterly catastrophic mistake by letting all these illegals into the country”, Gabriel said the increase in the number of people fleeing the Middle East to seek asylum in Europe had partially been a result of US-led wars destabilising the region.

Slamming US foreign policy - and thus the Obama regime, not to mention Angela Merkel"s close friend Hillary Clinton - as a culprit for the European refugee crisis, Gabriel said that “there is a link between America’s flawed interventionist policy, especially the Iraq war, and the refugee crisis, that’s why my advice would be that we shouldn’t tell each other what we have done right or wrong, but that we look into establishing peace in that region and do everything to make sure people can find a home there again,” Gabriel said.

“In that area Germany and Europe are already making enormous achievements – and that’s why I also thought it wasn’t right to talk about defence spending, where Mr Trump says we are spending too little to finance Nato. We are making gigantic financial contributions to refugee shelters in the region, and these are also the results of US interventionist policy.”

Gabriel, who will likely run as the centre-left candidate against Merkel in Germany’s federal elections in September, said Trump’s election should encourage Europeans to stand up for themselves.

“On the one hand, Trump is an elected president. When he is in office, we will have to work with him and his government – respect for a democratic election alone demands that,” Gabriel said. “On the other hand, you need to have enough self-confidence. This isn’t about making ourselves submissive. What he says about trade issues, how he might treat German carmakers, the question about Nato, his view on the European Union – all these require a self-confident position, not just on behalf of us Germans but all Europeans. We are not inferior to him, we have something to bring to the table too.

“Especially in this phase in which Europe is rather weak, we will have to pull ourselves together and act with self-confidence and stand up for our own interests.”

While Merkel has yet to provide a direct response to Trump"s statements and refused to comment on the interview during a news conference with New Zealand Prime Minister Bill English, saying she would wait until after Trump"s inauguration and then planned to work with him at all levels of government, her spokesman, Steffen Seibert, said the chancellor had read the Trump interview “with interest”, but declined to comment in more detail until the president-elect had been sworn in.

“We are now waiting for President Trump to start his term and will then work closely with the new government,” he said, adding that "It’s a clear statement of the positions of the new American president, but the positions of the chancellor on many of these issues are equally clear."

Martin Schäfer, a spokesman for the German foreign ministry, rejected Trump’s labelling of the EU as a “vehicle for Germany”. He said: “For the German government, Europe has never been a means to an end, but a community of fate which, in times of collapsing old orders, is more important than ever.”

The foreign ministry also rejected Trump’s criticism that creating “security zones” in Syria would have been considerably cheaper than accepting refugees fleeing the war-torn country. “What exactly such a security zone is meant to be is beyond my comprehension and would have to be explained,” said Schäfer, adding that there had not been enough willingness among the international community to lend military support to create a no-fly zone in Syria.

* * *

Germany was not the only nation unhappy with Trump"s statement: Pierre Moscovici, European economic affairs commissioner, also found fault with Trump’s assertion that other European countries would follow in Britain’s footsteps and leave the EU.

“I’m not worried, I think this idea that Brexit is going to be contagious is a fantasy, a bad fantasy,” Moscovici told reporters in Paris. “Brexit is not a great thing,” he said, warning Trump that comments advocating a break-up of the EU would not get the trans-Atlantic relationship off to the best start.

* * *

Yet while Germany and Brussels were unhappy with Trump"s criticism, Moscow was delighted, and sure enough Trump’s remarks on Nato were met more favourably in Moscow, where Dmitry Peskov, spokesman for the Russian president, Vladimir Putin, agreed with the US president-elect that the alliance was “obsolete”.

“Since Nato is tailored toward confrontation, all its structures are dedicated to the ideals of confrontation, you can’t really call it a modern organisation meeting the ideas of stability, steady growth and security,” he said.

But Trump’s suggestion that the US could lift its sanctions on Russia in exchange for an agreement to reduce the countries’ nuclear arsenals elicited a cooler response. Peskov said Russia had not been conducting talks with the US about nuclear arsenal reduction and said cancelling sanctions was not a political goal in Russia. "Russia wasn’t the initiator in introducing these restrictions, and Russia, as the president of Russia has underlined, doesn’t intend to raise the issue of these sanctions in its foreign contacts,” he said.

Last month, echoing similar comments by Trump, Putin said Russia needed to strengthen its strategic nuclear forces. Leonid Slutsky, a Russian MP, said he “wouldn’t connect these two issues and make the cancellation of sanctions a negotiating point in such a delicate area as nuclear security”. Konstantin Kosachyov, head of the foreign affairs committee in the Russian senate, said the cancellation of sanctions was “definitely not an end in and of itself for Russia”.

“It’s not even a strategic goal for which something needs to be sacrificed, especially in the security sphere,” he told state news agency RIA Novosti. “We think [sanctions] are a bad legacy of the departing White House team that need to be sent after it into history.”

* * *

And yet, perhaps Trump"s bluster was merely the latest ruse to get everyone on the negotiating table. It may be working already: as Reuters reports, Chancellor Merkel is working to set a date this spring for a meeting with Donald Trump, who will be sworn in as U.S. president on Friday, German government sources said on Monday. Merkel had offered to meet Trump in the United States in her capacity as chairman of the Group of 20 leading economies, the sources said.

The chancellor has spoken with Trump only once, shortly after his election to succeed U.S. President Barack Obama. Following Trump"s latest "stunning" public statements, she now appears to be in a hurry to not only speak with him again, but also meet face to face.