by Zero Hedge - September 24th, 2016 5:54 pm
The latest confirmation that the US economy continues to deteriorate comes not from the Federal Government but from state-level data, where year-over-year growth in state tax revenues slowed in the first quarter to its lowest rate since the second quarter of 2014, according to the latest data published yesterday by the Rockefeller Institute of Government. Worse, preliminary data for the second quarter show an outright decline in state tax collections relative to the second quarter of last year.
As SMRA notes, state tax collections were up 1.6%, year-over-year, in the first quarter, the smallest increase since the second quarter of 2014. After adjustment for inflation, revenues were up 0.4%. Personal income tax collections, which account for roughly 36% of total state revenue, increased 1.8% in the first quarter, down from 5.1% in the fourth quarter. Sales tax collections – the second largest source of state revenue – increased 2.4% in the first quarter, up from 2.0% in the first quarter.
The trend deteriorated further in preliminary Q2 data with personal income tax tumbling nearly 5% Y/Y.
Corporate tax receipts, which account for less than 5% of state revenues, were down sharply for the second consecutive quarter, while motor fuel taxes, which also account for just under 5% of revenues, were up 2.0%, down from 3.5% increase in the fourth quarter.
According to preliminary estimates from Rockefeller, tax collections will be down 2.1% in the second quarter relative to last year, reflecting a decline of 3.3% in personal income taxes and a 9.2% plunge in corporate tax collections.
Sales tax revenue is estimated to have increased.
Rockefeller attributes the recent softness in personal income tax collections to a variety of factors, including weakness in the stock market, in both 2015 and the earlier part of this year, which has depressed tax collections related to investment income. Tax collections have been particularly weak in states with economies that are heavily reliant on oil or other natural resources. In the second quarter, growth in individual income taxes from withholding has slowed considerably.
The suddenly plunge in state income tax should not come as a surprise: the trend in individual income taxes at the state level in recent quarters tracks the sharp decline we have reported previously at the federal level.
by Zero Hedge - September 24th, 2016 5:30 pm
Secretary Clinton continues to hold the lead in public opinion polling at the national level and in the key states she will need to win in order to reach 270 votes in the Electoral College. However, in both cases the polls have tightened over the last few weeks, suggesting a competitive race for the White House. These are the ten biggest questions Goldman Sachs’ clients have with regard the election…
1. Who’s in the lead?
Secretary Clinton continues to appear to have an advantage, but the race has tightened considerably over the last few weeks. Despite this, the public continues to expect a Clinton White House in 2017, with prediction markets assigning around a 65% probability to that outcome (Exhibit 1).
Sec. Clinton continues to hold a lead in the average of national polls. As shown in the right panel of Exhibit 2, she leads national polling by around 2.5pp at the moment. This is a relatively thin margin, but it has been consistent; Mr. Trump has led in a few polls, but at no point yet this year has he led the national polls on average.
For the last several weeks, Sec. Clinton has held a slightly wider lead in the states that look likely to provide her with the marginal 270th electoral vote required to win in the Electoral College. She appears to hold a lead of 4 to 6 percentage points in New Hampshire, Pennsylvania, Virginia, and Wisconsin. However, state polls fluctuate just like national polls, and her earlier wide lead in Colorado and Minnesota, for example, has shrunk considerably in the few recent polls that have been published. In fact, if current polling averages are an accurate reflection of the state of the election, her 270th electoral vote might come from Colorado, which she leads by only 2.5% at the moment, based on an average of recent polls. In some cases, these shifts are much sharper than the change seen in the more frequent national polls, often driven by one or two outlier polls. While this suggests that the state-by-state analysis could once again tilt more heavily in Sec. Clinton’s
Charlotte Police Release Dashcam, Body-Cam Footage Of Keith Scott’s Death, Chief Says “Absolutely” Had A Gun
by Zero Hedge - September 24th, 2016 4:53 pm
Update: Charlotte police have just released the following bodycam footage of the event.
Here is the dashcam footage…
— Christina Watkins (@CWatkinsTV) September 24, 2016
And additionally, the Charlotte Police released evidence images…
— Steven Romo (@stevenromo) September 24, 2016
* * *
As we detailed earlier, having exclaimed “drop the gun” 11 times in the video of the fatal shooting of Keith Scott provided by his mother, Charlotte police have just stated in a press cobnference that they have agreed to release the body-cam video of the event. Despite earlier saying that it wouldn’t release police video for fear of compromising its review, the State Bureau of Investigation has succumbed to public pressure despite a lack of “absolute, definitive, visual evidence” that Scott brandished a weapon at the officers.
Keith Scott’s mother’s view of the event…
OFFICER: Hands up!
RAKEYIA SCOTT: Don’t shoot him. Don’t shoot him. He has no weapon. He has no weapon. Don’t shoot him.
OFFICER: Don’t shoot. Drop the gun. Drop the fucking gun.
RAKEYIA SCOTT: Don’t shoot him. Don’t shoot him.
OFFICER: Drop the gun.
RAKEYIA SCOTT: He didn’t do anything.
OFFICER: Drop the gun. Drop the gun.
RAKEYIA SCOTT: He doesn’t have a gun. He has a T.B.I. (Traumatic Brain Injury).
OFFICER: Drop the gun.
RAKEYIA SCOTT: He is not going to do anything to you guys.
RAKEYIA SCOTT: He just took his medicine.
OFFICER: Drop the gun. Let me get a fucking baton over here. [muffled]
RAKEYIA SCOTT: Keith, don’t let them break the windows. Come on out the car.
OFFICER:Drop the gun.
RAKEYIA SCOTT: Keith! Don’t you do it.
OFFICER: Drop the gun.
RAKEYIA SCOTT: Keith, get out the car. Keith! Keith! Don’t you do it! Don’t you do it! Keith!
OFFICER: Drop the gun.
RAKEYIA SCOTT:Keith! Keith! Keith! Don’t you do it! [SHOTS]
RAKEYIA SCOTT: Fuck. Did you shoot him? Did you shoot him? Did you shoot him? He better not be fucking dead. He better not be
by Zero Hedge - September 24th, 2016 4:49 pm
In the first legal action brought by fired employees of America's largest mortgage lender and Warren Buffett's favorite bank – about whose criminal activity he was vowed not to say a word until after the election to avoid bringing attention to Hillary's hypocrisy of slamming Wells' illegal tactics even as she accepts support and money from Wells' biggest shareholder – two former Wells Fargo employees filed a class action in California seeking $2.6 billion from managers who fueled the creation of fake accounts on behalf of workers who tried to meet aggressive sales quotas without engaging in fraud, and were then demoted, forced to resign or fired.
The lawsuit (Polonsky v. Wells Fargo Bank & Co., BC634475, California Superior Court, Los Angeles County) filed on Thursday, alleged that "Wells Fargo fired or demoted employees who failed to meet unrealistic quotas while at the same time providing promotions to employees who met these quotas by opening fraudulent accounts."
The lawsuit on behalf of people who worked for Wells Fargo in California over the past 10 years, including current employees, focuses on those who followed the rules and were penalized for not meeting sales quotas. It accuses Wells Fargo of wrongful termination, unlawful business practices and failure to pay wages, overtime, and penalties under California law.
It also offers details of how low-level bankers were allegedly pushed to create at least 10 new accounts a day in a sales initiative that has blown up into a scandal and prompted U.S. lawmakers to call for Chief Executive Officer John Stumpf’s resignation. Bankers were “coached” to secretly open fee-generating accounts and often resorted to using false customer contact information like NoName@WellsFargo.com on accounts so they couldn’t be traced back, according to the complaint.
Former employees Alexander Polonsky and Brian Zaghi, who brought the lawsuit, allege Wells Fargo managers pressed workers to meet quotas of 10 accounts per day, required progress reports several times daily and reprimanded workers who fell short. Polonsky and Zaghi filed applications matching customer requests and were counseled, demoted and later terminated, the lawsuit said.
Furthermore, the lawsuit alleges that while while executives at the top benefited from the activity, they blamed
by Zero Hedge - September 24th, 2016 4:08 pm
Trump’s corporate tax cut is supply-side stimulus I could agree with if done right, even though it primarily helps the rich. Trump wants to cut the top corporate tax rate from its current 35% to 15% (which is currently the bottom bracket in US corporate income tax structure). That makes the Trump corporate tax cut the largest of its kind in the history the United States.
That could provide significant economic stimulus on the supply side but only if we learn from past mistakes. Unfortunately, I see no evidence in the Trump plan that we’ve learned anything from our supply-side mistakes; and I wish I could because I want to see Trump prove to be a strong anti-establishment candidate as much as I know readers on my blog do.
As I’ve said in recent articles, I don’t have to like the arrogant man to hope that his arrogance will, at least, give him the courage to stand against the tide; but I’m afraid that kind of courage doesn’t have any endurance and ultimately tends to go with the flow.
I do myself no good at all by writing against a candidate that I am sure a majority of my readers are investing their hope solely because they need something to hope for, and that hope certainly isn’t going to be found in Hillary. (I spend less time writing about her only because everyone knows she is totally sold out to the wealthy establishment. Trump is more of a mystery rich man that appears to be for the common man.) My blog is a strongly anti-establishment when it comes to economics, so I’m fairly sure my readers lean heavily toward the only anti-establishment candidate left in the race.
I wrote in my previous article that Trump’s income-tax and capital-gains-tax strategies are the biggest gift ever offered to the one-percenters in the US economy. I don’t like having to say that, but it is sadly the truth. With these corporate tax cuts, Trump hits the ball out of the park for the third time on behalf of the Wall Street team. The trio of tax cuts
by Zero Hedge - September 24th, 2016 3:20 pm
Just a few weeks after getting lambasted by just about everyone outside of the Clinton campaign for dumping investigation notes on the media the Friday before Labor Day weekend, in an obvious attempt to “bury the story”, last night the Federal Bureau of Immunity did it again dropping nearly 200 pages of new, redacted interview notes.
Perhaps one of the most interesting discoveries in the new notes comes from yet another “Undisclosed PRN Staff Member.” Apparently, after receiving a request from Cheryl Mills and Heather Samuelson (both of whom we no know were granted immunity deals by the DOJ) back in December 2014 to change Hillary’s email retention policy to 60 days, this “Undisclosed PRN Staff Member” wrote a work ticket that referred to the request as “the Hillary coverup operation.” Per the FBI notes:
But don’t worry folks, according to the FBI’s notes on the interview conducted on February 18, 2016, this “Undisclosed PRN Staff Member” assured the FBI that the comment was just “a joke.” Apparently that explanation was good enough for the FBI so we should probably just take it at face value as well.
Though the Trump campaign doesn’t seem to be buying the “it was just a joke” defense as Senior Communications Advisor, Jason Miller, released the following statement last night on the situation:
“The fact an IT staffer maintaining Clinton’s secret server called a new retention policy designed to delete emails after 60 days a “Hillary coverup operation” suggests there was a concerted effort to systematically destroy potentially incriminating information. It’s no wonder that at least five individuals tied to the email scandal, including Clinton’s top State Department aide and attorney Cheryl Mills, secured immunity deals from the Obama Justice Department to avoid prosecution.”
Recall that we previously wrote in detail about the events leading up to the point that Cheryl Mills and Heather Samuelson requested the change to Hillary’s “email retention policy.”
Now this brings us all the way up to December 2014 when Clinton sent the 55,000 pages to the State Department. Recall, as Politico previously reported, Hillary brought in a former campaign staffer, Heather Samuelson (34 years old), to help determine which emails
by Zero Hedge - September 24th, 2016 3:17 pm
Submitted by Mish Shedlock of MishTalk
The €42 trillion (notional) derivatives mess known as Deutsche Bank remains under severe pressure. Its market cap is $17 billion. It has no earnings and pays no dividend.
On April 23, Deutsche Bank was Fined $2.5 Billion over LIBOR rate rigging. Twenty-one people face criminal charges following a seven-year investigation.
On September 16, the US Department of Justice Fined Deutsche Bank $14B for mortgage securities fraud leading up to the 2007-2009 global meltdown.
Today, German Chancellor Angela Merkel Ruled Out Assistance for Deutsche Bank.
Chancellor Angela Merkel has ruled out any state assistance for Deutsche Bank AG in the year heading into the national election in September 2017, Focus magazine reported, citing unidentified government officials.
The German leader also declined to step into the Frankfurt-based bank’s legal imbroglio with the U.S. Justice Department, which may seek as much as $14 billion in sanctions against Deutsche Bank’s mortgage-backed securities business, the magazine said. A German government spokesman declined to comment on the report Saturday. A Deutsche Bank spokeswoman also wouldn’t comment.
Understanding the Fine
The Guardian reports $14bn Deutsche Bank Fine – All You Need to Know.
The prospect of a $14bn penalty from the US Department of Justice has rattled investor confidence in Deutsche. The penalty aims to settle allegations, dating back to 2005, about the way the bank selected mortgages, packaged them into bonds and sold on to investors. These bonds are known as residential mortgage-backed securities (RMBS).
Can Deutsche Afford the Bill?
Deutsche Bank has been quick to describe the fine as an “opening position” from Washington. It is easy to see why. It would be one of the largest ever fines levied by the US. It could also strain the bank’s finances. For 2015, the bank reported its first annual loss since 2008 and could be heading for another loss this year regardless of the threatened justice department fine. According to Tomas Kinmonth, an analyst at Dutch bank ABN Amro, a settlement on that scale could impede Deutsche’s ability to pay coupons – or regular interest payments to investors – on a special type of bond. The bonds are known
by Zero Hedge - September 24th, 2016 2:40 pm
Chicago suffered through its worst summer of violence in decades. In August, over 400 people were shot and 80 killed.
Activists and public unions blame income inequality. Income inequality is rising, but very few understand who is to blame. And the tax hikes and pay hikes that unions seek exacerbate the problems and cause white flight.
Many claim education is the answer, but the Chicago public school system is not only financially bankrupt, it is morally bankrupt.
Bloody Chicago Summer
In Chicago, activists confront longstanding issues of inequality and poverty following a long Bloody Summer.
There has been little peace this summer in Chicago — where President Barack Obama began his political career. Last month alone more than 400 people were shot and nearly 80 killed, the most violent month in two decades in the city’s metropolitan area, according to the Chicago Police Department. This violence occurred exactly 50 years after Dr Martin Luther King Jr marched through the city’s south side demanding civil rights for African Americans.
Community leaders cite a vicious circle of poverty when discussing violence in the poorest African American and Hispanic neighborhoods. It is driven by inequality, poor access to good schools and food and has led to an evaporation of hope that they say perpetuates this crisis. This is particularly pertinent in Chicago, which remains one of America’s most racially segregated cities.
Research from the University of Illinois at Chicago’s Great Cities Institute published this year showed that 40 per cent of African Americans aged between 20 and 24 were either out of work or out of school, compared with 18 per cent for the Latino population and 6.3 per cent for whites in 2014. The rate was higher in Chicago then elsewhere in the US, where the average for blacks was 28 per cent.
Those Who Can, Leave
The most recent US census data show a 3.1 per cent decline in the population between 2000 and 2014 to 842,674. Even African American families are beginning to leave the city.
Chicago Mayor Rahm Emanuel’s solution to Chicago’s plight has been a massive series of tax hikes, not “for the kids” but rather to support pension promises of teachers who cannot teach and police who
by Zero Hedge - September 24th, 2016 2:00 pm
Ironically, as you may recall, this is exactly the reason Hillary supposedly elected to not visit Louisiana after severe flooding back in August saying that she would visit when the “presence of a political campaign will not disrupt the response” of emergency responders.
Roberts request for Hillary to cancel her Charlotte trip came via an interview with Erin Burnett on CNN.
“We appreciate the support of the candidates. We appreciate that they are concerned about Charlotte. At this point, we do have very stretched resources for security and they are working around the clock. If there would be a way to delay those visits in terms of giving us a chance to get our city back to order and back to more of a state of normalcy, that would probably be ideal.”
Shortly after the interview, the Hillary campaign announced plans to delay their trip to Charlotte in an effort to “not impact the City’s resources.”
— Alex Romano (@alexromano) September 24, 2016
The embarrassing cancellation came just one day after Hillary posted the following tweet calling on Charlotte police to release video of the Keith Scott shooting “without delay.“
Charlotte should release police video of the Keith Lamont Scott shooting without delay. We must ensure justice & work to bridge divides. -H
— Hillary Clinton (@HillaryClinton) September 23, 2016
Ironically, Hillary’s efforts to visit Charlotte offer a perfect contradiction to the reasoning she offered up for not visiting Louisiana back in August after devastating floods left 1,000′s of people homeless. Back on August 22nd, Hillary released the following tweet saying that she would visit Louisiana “at a time when the presence of a political campaign will not disrupt the response” of emergency responders.
“The best way to help Louisianans affected by these terrible floods is to make sure they have the resources they need today. I am committed to visiting communities affected by these floods, at a time when the presence of a political campaign will not disrupt the response, to discuss how we can and will rebuild together.”
The best way to help Louisianans affected by terrible flooding is
by Zero Hedge - September 24th, 2016 1:20 pm
“Overall shipment volumes are persistently weak.”
When FedEx announced its quarterly earnings today, it included some telling tidbits. In its largest segment, FedEx Express, domestic shipping volume edged up merely 1%. In its smaller FedEx Ground Segment, shipping volume jumped 10%, “driven by e-commerce and commercial package growth.”
Sales by e-commerce retailers jumped 15.8% year-over-year in the second quarter, according to the Census Bureau, and companies involved in getting the packages to consumers and businesses have seen growth in those segments. For the rest, not so much – as the goods-based economy is getting bogged down.
And this has been showing up in broader shipping data. The Cass Freight Index for August, released today, fell 1.1% from a year ago, to 1.115, the worst August since 2010! The 18th month in a row of year-over-year declines!
“Overall shipment volumes (and pricing) are persistently weak, with increased levels of volatility as all levels of the supply chain (manufacturing, wholesale, retail) continue to try and work down inventory levels,” Donald Broughton, Chief Market Strategist at Avondale Partners, wrote in the report.
The Cass Freight Index is based on “more than $26 billion” in annual freight transactions by “hundreds of large shippers,” according to Cass Transportation. It does not cover bulk commodities, such as oil and coal but is focused on consumer packaged goods, food, automotive, chemical, OEM, and heavy equipment.
It’s not seasonally adjusted, so it shows strong seasonal patterns. In the chart below, the red line with black markers is for 2016. The multi-color spaghetti above it represents the years 2011 through 2015. So here’s how dismal the “economic recovery” has looked in 2016 so far:
The report pointed out the growth in e-commerce – the one aspects of the goods-producing economy that is hopping. But it also said that the transit modes servicing the auto and the housing/construction sectors were weak. Both sectors are crucial to the US economy.
And rail, as has been the case recently, caught the brunt of it. According to the Association of American Railroads carload traffic – which includes commodities such as oil