Looks Like the New Pope is All About the Poor or Something
Boom! Pope Francis is laying the smack down on the exclusive golf clubs and caviar communities of Manhattan and Silicon Valley in his latest “Apostolic Exhortation.” “Today everything comes under the laws of competition and the survival of the fittest, where the powerful feed upon the powerless. As a consequence, masses of people find themselves excluded and marginalized…considered consumer goods to be used and then discarded.” Ouch. And look, it isn’t just the Pope getting angry with inequality: “simmering class tension in San Francisco hit a new level yesterday when protesters stopped a bus that Google hired to transport its workers from the city to Google’s headquarters in Mountain View.” Apparently these Google buses have become symbols of wealth inequality for the San Francisco area, and some are even suggesting that Google should pay $1 billion to the city for its use of “public infrastructure” but, Hey! Isn’t that what taxes are for? Google pays taxes, right? Oh, no? OK. Stop the buses. And stop the America’s Cup apparently. According to the San Francisco Chronicle, the America’s Cup (“a prohibitively expensive, out-of-touch event solely for billionaires”) is going to cost taxpayers $5.5mn. The event may have generated $364mn in revenue, however this is well below the original $902mn projection. Speaking of all that inequality stuff: don’t expect economic inequality to go away in countries rich with resources. The McKinsey Global Institute foresees a near doubling in total global investment in oil, gas, minerals etc. and that “almost half of the world’s countries could depend on their resource endowments for growth” by 2030. Brace yourself for this next one: “The trouble is that political will and integrity is often the first casualty once the minerals start flowing out and the spoils come pouring in.”
Christmas Comes Early: Budget Deal in Washington, D.C., Banking Union Progress in EU
Sen. Patty Murray (D., Wash.) and Rep. Paul Ryan (R., Wis.) are the leaders behind a rare bipartisan budget deal announced yesterday. The budget should avert both a government shutdown in January as well as sequester cuts to spending. As for the debt ceiling? Meh. “While the agreement calls for a $63 billion increase in spending in 2014 and 2015, it is coupled with $85 billion in deficit reductions over the next 10 years, for a net deficit reduction of $22.5 billion.” The deal includes higher fees for passengers traveling on airlines, higher premiums for employers guaranteeing pensions, reduced benefit increases for military retirees and larger pension contributions required from federal employees. While some in the media see this as a new era of cooperation, others remain skeptical over government efficiency. Commenting on her unlikely ally, Sen. Murray says, “We cheer for a different football team. We catch different fish.” Meanwhile, on the other side of the pond, finance ministers in the EU have made some progress (Alt) towards establishing a banking union for the Eurozone. As the Germans are mostly in control of this thing, they “gave ground to accept the eventual establishment of a €55bn single resolution fund in a decade’s time, paid for by an industry levy” and not by a line of credit from the €500bn European Stability Mechanism rescue fund. Under the proposed voting arrangement, Germany, the Netherlands and Finland together represent a minority group capable of blocking the release of funds for bank rescues. Also, the proposal proposes a minimum bail-in of 8 percent of total bank liabilities before public rescue funds are used. “Total bank liabilities” presumably includes both senior bondholders and uninsured deposits. Surprisingly, some countries seem to be OK with that.
Match Made in Chinese Hippie Heaven
China has said that it would like 5 million alternative-energy cars on the road by 2020. Last year, Chinese consumers bought 11,000. Enter Leonardo DiCaprio: “The American actor announced earlier this week that he is forming his own team to participate in a new electric-car racing circuit that will kick off its inaugural season in Beijing next September.” Environmentalists are hoping that the glitzy glamorous trifecta of Leonardo DiCaprio, Formula One and electric batteries will all merge into one giant, green, sexy electric-car shopping fest. Kinda makes you wonder what’s going on in the world of Tesla…(quick Google search): “Man Buys $103K Tesla Model S With Bitcoin.” Forget I asked…
“Like Bitcoin, JPMorgan’s proposed system would allow people to make anonymous, electronic payments over the internet, without having to reveal their name or account numbers or pay a fee.” So, just to be clear: $13 billion fines somehow haven’t convinced JPMorgan that the Government just doesn’t really feel like helping them out these days, much less patent a money laundering scheme.