Category: Politics (page 2 of 10)

What’s At Stake In The Upcoming November Election

On Tuesday, November 8, 2016, Americans across the country head to the polls to cast their ballots for a wide range of offices. Up for grabs is of course the U.S. Presidency, and also key seats in Congress. Needless to say, it’s a pivotal election cycle for our country’s two main political parties. The 2014 elections gave the Republicans control of the Senate, and subsequently control of both houses of Congress for the first time since the 109th Congress of 2005-2007. With 247 seats in the House of Representatives and 54 seats in the Senate, this Congress began with the largest Republican majority since the 71st Congress of 1929–1931. Below is an outline of what’s at stake this November and some of the possible outcomes that has the investment world in deep thought. The big risk doesn’t necessarily seem to be a Donald Trump victory, because it could come along with a surprise flip in power in the Senate. The real risk could be a complete controlled Democratic government. A Clinton victory could perhaps coincide with a flip in power of both the Senate and the House. It seems highly improbable at the moment, but who knows how many Democrats are going to show up at the polls as part of the “Stop Trump” campaign. Bottom-line, there’s a lot at stake in the upcoming election!, it’s not just about “Trump vs. Clinton”.

Senate: The Senate has 34 seats up for election in November. Many political pundits consider this to be the “big story” of this election cycle.

  • Democrats need to gain either four or five seats (four if Clinton wins, five if Trump wins) to gain back control of the Senate. 10 of the seats up for reelection are currently held by Democrats, while 24 are currently held by Republicans. Only 1 Democratic-held seat is considered to be “in play” (at risk), which is Nevada. Some analyst think Colorado could join that list eventually. Republicans on the other hand have 16 seats considered to be in play or possibly at risk. At least six are believed to be in significant danger – Wisconsin, Illinois, Pennsylvania, Florida, Ohio, and New Hampshire. Many political insiders say by it being a Presidential election year it actually favors the Democrats as it will spur more voter interest and make reelection for some Republican Senators more challenging. In other words, more Democratic voters actually go to the polls when the nation is voting for a President, rather than in years where no Presidential decision is being made. Keep in mind during the past decade, Democrats have picked up seats in both the Senate and House during all Presidential elections.

House: All 435 House seats are up for election this November.

  • Democratic Party would need to gain 30 seats to flip the political power inside the House. Most political insiders doubt they’ll be able to accomplish such a daunting task. However, they very well could reduce the majority Republicans hold, opening the door to possibly jumping ahead in mid-term elections in 2018. Again, increased voter interest and turnout due to the coinciding Presidential election could benefit Democrats, as has been the trend for the last decade. Ballotpedia predicts that only 25 of the 435 House races (5.7 percent) will be truly competitive in the general election. These include seats in Arizona, California, Colorado, Florida, Illinois, Iowa, Maine, Michigan, Minnesota, Nevada, New Hampshire, New York, Pennsylvania, Texas and Wisconsin.

More Key Concerns

  • Supreme Court: Assuming the Senate continues to deny President Obama’s Supreme Court nominee, the new President and Senate will have the task of replacing the late Supreme Court Justice Antonin Scalia. Confirmation of a new Justice requires 60 votes in the Senate. If control of the Senate goes to the party opposite the one in the White House, it is bound to be a contentious fight. Keep in mind that some of the current Justices are getting up there in years – the oldest, Ruth Bader Ginsburg will be 83 this year; Anthony Kennedy turns 80;and Stephen Breyer will be 78. It seems highly probable that one or more may retire over the four year term of the next President.
  • Immigration: This is one of the more divisive issues in America right now and a new President could do a lot to shape policy. Donald Trump and fellow Republicans mostly lean toward tighter levels of enforcement, including removal of undocumented residents and temporarily blocking Muslim immigrants. Democrats lean more toward Obama’s plan, recently kicked by the Supreme Court, to shield undocumented immigrants from deportation and allow them to work in the U.S. legally. Once the case moves back through the lower court, it could very well be brought back before the Supreme Court. Remember, it was only sent back to the appeals court because the Supreme Court ruling was tied, as they are short one Justice.
  • Health Care: Although the Affordable Care Act – or Obamacare as it’s known – was signed into law in 2010 and survived a major Supreme Court challenge in 2012, it continues to be a hotly contested and divisive issue in this election. The fundamental disagreement rests on whether the government can or should legally require its citizens to have health insurance. Republicans continue to vow to overturn the law, but their attempts have never been able to make it past a Presidential veto. That could change if Republicans manage to sweep all the elections. On the other hand, Affordable Care Act legislation is likely to be enhanced under more Democratic leadership. It’s also likely that the longer the program is in place, it will be that much more difficult to dismantle.
  • Gun Control: Several gun control measures have been introduced in Congress, though none of them have yet gotten a vote. Proposals include blocking the sale of guns to people on the government’s terrorist watch list, strengthening background checks and putting limits on semi-automatic weapons. The divisions on the issue fall largely along party lines, with Democrats supporting stronger legislation and Republicans opposing it. Complete control in Washington by one party or the other could mean a huge swing in direction for gun laws.
  • Abortion: This is another flashpoint in American politics and one that could well up in front of the Supreme Court again. Issues include prohibitive restrictions to abortion access to abortions in some states, funding for Planned Parenthood and allowing businesses to opt out of providing health care services that include contraception and abortion.

Why “Cheese” May Be The Nail In TTIP’s Coffin

Trade deals have gotten a lot of bad press lately thanks in part to the current U.S. election cycle. One very large international trade deal the U.S. has been working on for years is the Transatlantic Trade and Investment Partnership (TTIP). To refresh your memory, the TTIP is a proposed trade deal between the U.S. and EU. Not to be confused with TPP, the Trans-Pacific Partnership which is between the U.S. and Pacific Rim countries. The two trade agreements are actually viewed as companion treaties as the proposal in both are similar, yet covercheese(350 two different parts of the globe. You may recall that the TTP has already been signed by the U.S. but still needs to be approved by Congress, which most analysts think will happen at some point this year – likely after the Presidential election. As for the TTIP, negotiations began back in the summer of 2013. The United States and European Union together represent 60% of global GDP, 33% of world trade in goods and 42% of world trade in services, so it’s a significant pact. As it stands right now, most experts don’t see see a deal being finalized for another 3 or 4 years. That’s assuming negotiations continue at all, as there are a couple of points of contention that it’s hard to imagine the two sides will be able to overcome. A huge issue is GMOs. The EU has a system for determining whether a company can sell any given GMO in EU countries. Any food (including processed food) or feed containing greater than 0.9% of approved GMO ingredients must be labelled. Additionally, EU countries are allowed to determine individually whether they will allow the cultivation of GMOs. If TTIP negotiators feel compelled to include loser GMO regulations in the pact, it is likely to be a nonstarter for strictly anti-GMO countries like France and Germany. As big a deal as GMOs are though, the real nail in the coffin for this treaty may just be the use of Parmesan and other “geographical indications.” Protections for geographical indications (GI) are a huge deal in Europe as they are used on an thousands upon thousands of products to indicate the specific geographical location they derive from. Products from various locations are assumed to possess specific qualities and carry a degree of reputation, all due their origin. For instance, Parma ham is a type of dry-cured pork, aka prosciutto. However, the process developed in the Parma region of Italy is unique from all others. So to be labeled as Parma, the production must adhere to very strict rules, which in turn ensures a certain level of consistent quality. The whole system is designed to protect the integrity of the product, the product name as well as the consumer. We have similar regulations in place in the U.S. – Kentucky Bourbon, Florida Oranges. Yet, there are all kinds of U.S.-made products that carry EU-derived GI names, like parmesan cheese for instance. And here is where the biggest impasse to the trade deal seems to lie – the U.S. doesn’t want to change the name of these products and the EU insists they the do just that. Both sides have said the issue is non-negotiable, so you have to wonder how much further the proposed plans will travel.

South America Whips Up A Whirlwind Of Uncertainty For Soybeans

Soybeans bulls believe the geopolitical shifts and changes currently taking place in Brazil may have much longer-term implications. If Rousseff is actually convicted and removed definitively from office, Vice-President Temer would take over the position until the elections in 2018. However, it’s possible Temer could be investigated over possible campaign kickbacks from Petrobras in 2014, as his name has come up in testimonies tied to the case. He’s already been found guilty and fined for violating campaign laws. Anti-impeachment protesters have been blocking roads in Sao Paulo, and many other major cities. The labor unions have already started calling for large nationwide strikes. The investment world is obviously nervous about the social-unrest and how it all plays out. One way to protect and cross-hedge their exposure is to be long the soybean market, of which Brazil has recently become the world’s leading supplier. If Brazil comes to a screeching halt in the wake of mass protests and union strikes, soybeans and other Brazilian exports might find it much more difficult making their way  out of the country.  Bottom-line, there are simply a ton of moving parts in South America right now. Not only do we have major political uncertainty circulating inside Brazil with potential major fallout and widespread implications across their banking and labor sectors, but we also have a lot of uncertainty about the size of the crop in both Brazil and Argentina. There are reports circulating that CONAB may have missed an area where additional reductions were needed, hence the Brazilian crop could get even smaller in their next update. In addition there continues to be major uncertainty surrounding Argentine production. Not only how much of the crop will be left unharvested, but perhaps more importantly how much “quality” damage has been done to the beans that are currently and still need to be harvested? Remember, the world has become highly dependent on meal being supplied by Argentina.  Moral of the story, as long as there’s this much uncertainty in South America and a U.S. crop just in the process of being planted, I have to imagine prices stay fairly well elevated as traders sit on the edge of their seats. As a producer I’m focused on the NOV17 contract, thinking another leg higher could provide us another opportunity to lock in profits and reduce some longer-term risk. As a spec I continue to like the thought of buying the breaks, at least for the next 30-45 days.

Soybean Markets Have More Questions Than Answers

Soybean traders continue to debate several interesting dynamics: How bad is the crop in Argentina? Will there be some “quality” concerns since they’ve had so much moisture? How big of a reduction are we going to see in the Brazilian crop? If the Brazilian crop does shrink, how big of a reduction will we see in their export capacity? Despite shrinking crush margins is China going to keep buying in record quantity? If Argentina and Brazil run out of beans for export by late-July or mid-August how big of a dent will it put in U.S. ending stocks? Bottom-line, the run up in price and production hiccups in South American have created more questions than answers as of late. There’s still a wide-range of South American production estimates floating around, but no one seems absolutely certain about how all the pieces of the puzzle will fit together. From a technical perspective it seems the air might be getting a little thin every time new-crop NOV16 trades north of $10.20 per bushel. As a producer, the name of the game remains managing risk. As a spec I still remain on the sideline. I would like to play the long-side, believing there’s still more headlines and fireworks to come from both Argentina and Brazil, but it would take an -80 cents to -$1.00 break in price to get me on the bandwagon. For me to get more serious about an outright short position it will take the front-month contract trading up to between$10.60 and $10.80 per bushel for me to get more serious. As an investor, I just don’t see the soybean market as an easy layup. Calling the next 30 to 50 cents feels more like a shot from half-court.

This is just an excerpt of the full 5/4/2016 Van Trump Report. To find out what you’re missing every morning, sign up for a free 30-day trial!


What You Need To Know About The Panama Papers

By now you’ve probably heard about the Panama Papers, a massive 2.6 terabytes of data that’s being called the biggest whistleblower leak in history. The more than 11-million documents come from the Panama-based law firm Mossack Fonseca, which seems to have specialized in setting up offshore shell companies for some of the world’s most rich and powerful, which ultimately could have helped them to launder money, dodge sanctions and avoid paying taxes. The leak includes over 4 million emails, 3 million database files and 2.1 million PDFs, according to Wired. It’s thought to be pretty much every document generated by the law firm going back to 1977, which contains details of 214,000 entities, including 12 current or former world leaders, as well as 128 other politicians and public officials. Keep in mind that the activity revealed isn’t necessarily illegal, but they do shine a light on some things that might be viewed as ethically questionable, as well as help facilitate illegal activities. No one knows who leaked the information, but we do know it was given to the German paper Süddeutsche Zeitung, which shared the huge trove with the International Consortium of Investigative Journalists (ICIJ) about a year ago. They in turn began publishing the information this week. From what the ICIJ says, what’s been released so far is just the tip of the iceberg – they promise to release a full list of companies and people linked to them in “early May.” The depth and scope of the information made available so far is mind boggling, and there is no way to cover everything. Below I have tried to provide brief summary of some of the highlights, in so much as they pertain to people in positions of great power and these revelations could be very damaging, if not completely destructive. Already, Iceland’s Prime Minister has resigned over the revelations that he has millions of dollars hidden in and offshore shell company that had holding’s in Iceland’s collapsed banks. The ICIJ’s full report is available HERE.

American’s – From what I understand the passports of at least 200 Americans have already shown up in the documents. The law firm had over 400 direct American clients so I suspect more names will start to surface. Also in the database, about 3,500 shareholders of offshore companies who list U.S. addresses. And almost 3,100 companies are tied to offshore professionals based in Miami, New York, and other parts of the United States. There’s speculation that a lot of American’s who used companies to set up “off-shore accounts” may indirectly get drug into the mix because the companies they used had ties or direct dealings with the Panama-based law firm Mossack Fonseca.

Russia – The files reveal a suspected billion-dollar money laundering ring that has clear connections to Russia’s President, Vladimir Putin. While Putin was not directly linked to any of the secret accounts, those involved are some of his closest associates, including childhood friends and his oldest daughter’s godfather. A spokesman for the Kremlin, Dmitri Peskov, called the Panama Papers a case of “Putinophobia” and a plot to destabilize the country. Putin has said the ICIJ includes ex-CIA agents that are intent on destroying Russia.

China – Family members of China’s President Xi Jinping obtained offshore companies through Mossack Fonesca. The documents also indicate offshore holdings of the families of at least seven other members of China’s elite Politburo Standing Committee.

Argentina – Maricio Macri, the newly elected President of Argentina who ran on a platform of ending corruption, has an offshore shell company that was set up with his father and brother. Macri has never disclosed the company, which a spokesman says is because the President has no capital in the firm.

Ukraine – Documents indicate Petro O. Poroshenko, the president of Ukraine since 2014, lied about divesting his assets before the election which resulted from the ouster of “corrupt” former president Viktor Yanukovych. Poroshenko, a tycoon with assets in television and a chocolatier before his entrance into politics, pledged to divest himself of his holdings but instead moved the assets into an offshore company in the British Virgin Islands, according to the consortium’s reporting.

Syria – Rami Makhlouf, a cousin of Syrian President Bashar al-Assad, was implicated in the papers. While al-Assad is not specifically mentioned, the documents reveal “any foreign company seeking to do business in Syria had to be cleared by Rami.” According to the Guardian’s analysis, Mossack Fonesca helped the Makhlouf family register its Syrian companies in the British Virgin Islands, and kept him as a client despite sanctions imposed against him by the United States and his involvement in the Syrian civil war.

Chile – The president of the country’s branch of Transparency International, an anti-corruption group, quit on Monday, after the Panama Papers linked him to at least five offshore companies.

FIFA – Documents show Juan Pedro Damiani, a member of the FIFA ethics committee, had business dealings with at least three men implicated in the FIFA scandal last summer. FIFA’s ethics panel has since launched an investigation.

Banks – More than 500 banks, their subsidiaries and branches registered nearly 15,600 shell companies with Mossack Fonseca, analysis of the records shows. The majority of them were created since the 1990s. Banking giant HSBC and its subsidiaries account for more than 2300 of the companies, and UBS accounts for more than 1100. Other big banks doing business with Mossack Fonseca included Societe Generale (979 companies), the Royal Bank of Canada (378), Commerzbank (92), and Credit Suisse (1105).

Sanctions – ICIJ says the leaked files indicate that the law firm has worked with at least 33 people or companies who are subject to US sanctions. It adds, though, that Mossack Fonseca had stopped working for some of these clients before the US Treasury added them to its sanctions list. Among the reported customers for the law firm’s shell companies were Latin American and eastern European drug bosses; war criminals and funders of terrorism in the Middle East; traders of arms to Africa and of nuclear material in Iran and North Korea.

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