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Apollo Sells Yellow Term Loan To Citadel

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Apollo Sells Yellow Term Loan To Citadel

By Todd Maiden of FreightWaves

Apollo Global Management has sold the term loan it held for Yellow Corp. and has withdrawn its proposal for bankruptcy financing, according to Financial Times.

Miami-based hedge fund Citadel has acquired Yellow’s $485 million debt from Apollo and other lenders. A Tuesday Delaware bankruptcy court filing showed counsel representing Citadel Credit Master Fund would depose representatives from Yellow on Wednesday regarding post-petition financing.

Apollo’s debtor-in-possession (DIP) financing package was touted in bankruptcy filings as the only viable offer made to the less-than-truckload carrier in the days leading up to its Chapter 11 petition. The $142.5 million deal was expected to provide the company with the funds necessary to market and sell off its terminals and equipment.

The deal would have also provided the private equity firm with an improved lien position among secured creditors. It held first-lien position on the term loan as well as a better lien position than the U.S. Treasury, which is due $737 million from a 2020 COVID relief loan to the carrier.

However, representation for Yellow said last week that better offers came forward following the bankruptcy petition and that Apollo’s terms were too onerous. That deal carried a 17% interest rate, a $32 million closing fee and a 90-day window to liquidate the assets.

The frontrunners at the time included LTL carrier Estes Express Lines and Boston hedge fund MFN Partners, which acquired a 40% stake in Yellow’s stock in July. However, Yellow attorney Pat Nash said at a Friday hearing there had been “a number of inbounds from other parties” willing to provide new money in a junior position to existing creditors.

A Tuesday hearing, which could have potentially revealed the new DIP lender, was pushed backed to Thursday.

In recent days, company insiders have been selling restricted and other shares of Yellow ahead of the stock’s delisting on Wednesday.

Tyler Durden
Thu, 08/17/2023 – 06:30

Why Is There Such A Frenzy To Buy Up The Properties That Were Just Burned Down During The Fires In Hawaii?

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Why Is There Such A Frenzy To Buy Up The Properties That Were Just Burned Down During The Fires In Hawaii?

Authored by Michael Snyder via TheMostImportantNews.com,

Can you imagine calling up a family that has just seen their home burn to the ground and offering to buy their land for below market value?  This is apparently happening in Hawaii right now on a massive scale.  Grieving property owners are being bombarded with calls from very greedy people, and I think that says a lot about the current state of our society.  We literally worship material possessions and financial gain, and the sheer greed that we are witnessing at this moment is absolutely staggering.

Lahaina was hit harder than anywhere else by the fires, and it turns out that property owners in the area have been getting pressured to sell for a long time.

So now that disaster has struck, those that wish to get their hands on these prime properties are in a feeding frenzy.  One local resident made headlines all over the world after she posted a video about this…

Filming herself in the recent video, the Hawaii resident said: ‘I am so frustrated with investors and realtors calling the families who lost their home, offering to buy their land.

‘How dare you do that to our community right now. If you are a victim and they are calling you, please get their business name so we can put them on blast,’ she added.

She claims in the clip that she ‘personally’ knows ‘multiple families’ that were ‘offered money from investors and realtors’.

When 2020 began, the average home in Lahaina was worth about $600,000.

Today, the average home in Lahaina is worth about a million dollars.

Now there is a race to take advantage of those that have just had their homes burned down, and it has gotten so bad that even Hawaiian Governor Josh Green is speaking out against it

Hawaiian officials are warning residents that unscrupulous investors are trying to take advantage of the fire disaster on Maui to take over properties.

Gov. Josh Green reported that residents are being approached about selling fire-damaged home or land sites by people posing as real estate agents.

He said those people may have “ill intent” and issued a warning to scammers.

“You would be pretty poorly informed if you try to steal land from our people and then build here,” Green said in a press release Monday.

A lot of people applauded Green for taking a stand like that.

But does he have another motive?

Green has been captured on video saying that he is “already thinking of ways for the state to acquire that land”

The Hawaiian governor Josh Green revealed plans for the state to potentially purchase properties in the seaside town of Lahaina, which was devastated by the deadliest wildfire in modern U.S. history.

“I’m already thinking of ways for the state to acquire that land so that we can put it into workforce housing, to put it back into families, or make it open spaces in perpetuity as a memorial to the people who were lost,” Green commented amid the ruins.

Wow.

There it is.

Apparently Green has his own plans for these properties.

We will just have to wait and see what those plans are.

Meanwhile, it is being reported that the police chief on Maui just happens to be the exact same guy that was “the incident commander” during the horrific mass shooting in Las Vegas in 2017…

Maui Police Chief John Pelletier is no stranger to responding to mass tragedy. Nearly six years before disaster struck in the form of wildfires that ripped through parts of the island and killed at least 99 people, he was on the ground in the aftermath of the deadliest mass shooting in modern U.S. history.

Pelletier was named chief of the the Maui Police Department in 2021 after more than two decades working in Las Vegas. On Oct. 1, 2017, Pelletier was the incident commander covering the Strip when a gunman unleashed a hail of bullets on a country music festival, killing 58 people and injuring hundreds more.

That is one heck of a coincidence.

And it is also being reported that Pelletier “earned a certificate in criminal justice from the FBI academy in 2019”.

So he has ties to the feds.

Just when you think that this story cannot possibly get any stranger, somehow it does.

After being greatly criticized for lounging on a beach while the tragedy in Hawaii was unfolding, we are being told that Joe Biden is now “considering” a trip to see the devastation.

Amid growing evidence of the devastation wildfires have wrought in Maui, the White House Tuesday gave the first public indication that President Biden will visit Hawaii.

White House Principal Deputy Press Secretary Olivia Dalton confirmed that officials were considering an in-person trip, after Biden took heat for his terse ‘no comment’ on Hawaii even while the scope of the tragedy was coming into view.

The president was staying at his Delaware beach house at the time.

Come on man.

I know that Biden doesn’t like to make trips like this, but this is what the American people expect.

It is part of the job.

The Biden administration also angered a lot of people when it was announced that households that have been affected by the fires would only be getting a one time emergency aid payment of $700

President Joe Biden is facing renewed criticism for his response to the devastating wildfires on the Hawaiian island of Maui after offering victims $700 per household in emergency aid.

Political opponents and commentators described the sum as “insulting” and compared it with the more than $113 billion-worth of aid the U.S. has sent to Ukraine as it defends itself against an ongoing Russian invasion.

Seriously?

After all that we have done for Ukraine, that is the best that we can do for people that have lost everything?

Of course somehow there is always more than enough money for Ukraine.  In fact, we are about to send them a gigantic military aid package for the 44th time since the war began

For the 44th time, the ruling class of the United States has decided to continue to prolong the war and send military equipment to Ukraine. The Pentagon has announced a $200 million weapons package for Kiev.

This newest round of equipment will include artillery rounds, dozens of tactical vehicles, and mine-clearing gear.

We are at such a critical turning point, and we desperately need solid leadership in the White House.

But instead we have Joe Biden and his minions.

Biden is literally the worst president in the entire history of the United States, and that is saying a lot because we have had some real whoppers in modern times.

Now that there has been so much public pressure, I think that Biden will feel compelled to go visit Lahaina.

Unfortunately, Biden will need to make many more trips like this, because a lot more major disasters are on the way.

*  *  *

Michael’s new book entitled “End Times” is now available in paperback and for the Kindle on Amazon.com, and you can check out his new Substack newsletter right here.

Tyler Durden
Thu, 08/17/2023 – 06:11

Storm Hilary Churns In Pacific Forecasted To Hit Southern California

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Storm Hilary Churns In Pacific Forecasted To Hit Southern California

Tropical Storm Hilary formed earlier Wednesday off Mexico’s coast in the Eastern Pacific Ocean. It’s forecasted to bring heavy rainfall and strong winds to parts of Southern California and the US Southwest at the end of the weekend or early next week. 

Hillary has sustained winds of 40 miles per hour, with higher gusts, according to the National Hurricane Center. The storm is moving west-northwest toward Baja California — and is 470 miles from Manzanillo, Mexico, around 1100 ET. 

Here’s the five-day forecast track for the storm:

“It appears that a corridor will open up between a sharp dip in the jet stream along the West Coast and the super-strong heat dome over the central US,” FOX Weather hurricane specialist Bryan Norcross said.

Norcross continued, “Tropical moisture from likely-Hilary has a good chance of spreading north in that river of air into the highly populated areas west of the Southern California mountains and the desert areas to the east.”

According to Fox Weather, Southern California is expected to receive between 2-3 inches of rain, with some areas getting 3-5 inches.

While the Eastern Pacific hurricane season has been active, over in the Atlantic, it’s been quiet: “Historical Lull”: Global Major Hurricane Activity Hits Four Decade Low.

 

 

 

Tyler Durden
Thu, 08/17/2023 – 04:15

Award-Winning Comedy Writer Has Edinburgh Show Cancelled Because Of Views On Gender

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Award-Winning Comedy Writer Has Edinburgh Show Cancelled Because Of Views On Gender

Authored by Steve Watson via Summit News,

A sold out comedy show scheduled to take place at the Edinburgh Fringe Festival has been cancelled by a venue which cites complaints about one of the comedian’s previous statements on transgender self-identification as the reason.

It has been widely reported that the show at the world’s most renowned comedy event, which would have featured award winning comedy writer Graham Linehan, was pulled by the Leith Arches venue when it realised the production did “not align with our overall values”.

The venue admitted that it had no idea about the show until a mob of ‘activists’ started complaining to them about it.

The show was organised by Comedy Unleashed, an organisation run by GB News host Andrew Doyle and comic writer Andy Shaw, which specifically caters for comedians who “leave their self censorship button at the door”.

Shaw commented “We’re very much against this cancel culture because we think it’s killing the arts and it’s treating the audience like children who need mollycoddling.”

He continued, “Andrew Doyle and I set Comedy Unleashed up because we’re sick of this. We want the extroverts, we want all the crazy stuff, we want people to be free and treat the audience like they’re adults.”

He added “If there’s any venue out there who wants an audience of 150 people – we’re sold out – we will bring our audience and our pre-packaged act to your venue.”

Linehan has made his views on the trans issue and cancel culture abundantly clear in the past, which even led to him being suspended from Twitter in 2020 for posting ‘hateful content’.

Linehan responded to the latest cancelation, noting “It sure sounds like discrimination on the grounds of my legally protected beliefs.”

The writer also defended himself against the mob, including other British ‘comedians’ who weighed in:

The venue claimed it is “inclusive”:

Meanwhile, this show is going ahead without complaint:

*  *  *

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Tyler Durden
Thu, 08/17/2023 – 03:30

Saudi Aramco Remains The World’s Most-Profitable Company… By A Mile

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Saudi Aramco Remains The World’s Most-Profitable Company… By A Mile

According to the Forbes Global 2000, Saudi state oil enterprise Saudi Aramco is once again the world’s most profitable company – this time with a big lead over second-placed Apple as oil and gas prices skyrocketed as part of the global energy crisis in the aftermath of the Russian invasion of Ukraine.

As Statista’s Katharina Buchholz reports, there are now three oil and gas giants among the top 8 most profitable companies in the world – up from just one in 2019.

Infographic: The Most Profitable Companies in the World | Statista

You will find more infographics at Statista

Saudi Aramco had already been touted as the most profitable company in the world before going public in late 2019.

Previously, Apple had been the world’s most profitable business endeavor, but was relegated to rank 3 that year by runner-up Berkshire Hathaway.

Apple and Microsoft rose again into ranks 2 and 3 in 2020, as the companies benefited majorly from people working and socializing online during the early stages of the pandemic – where they remain in 2022.

Since profits are known only for publicly listed companies or those planning to become listed on a stock exchange, the earnings of a large number of companies around the world, especially state companies, remain unknown and are not included on the list.

Tyler Durden
Thu, 08/17/2023 – 02:45

NATO Suggests For First Time Ukraine Could Cede Territory

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NATO Suggests For First Time Ukraine Could Cede Territory

Authored by Dave DeCamp via AntiWar.com,

A NATO official has suggested Ukraine could cede some territory to Russia in exchange for joining the Western military alliance.

The comments were made on Tuesday by Stian Jenssen, chief of staff for NATO Secretary-General Jens Stoltenberg, and reported by the Norwegian newspaper VG. “I think that a solution could be for Ukraine to give up territory, and get NATO membership in return,” he said, adding that it should be up to Ukraine when and on what terms to negotiate.

Stian Jenssen (right), chief of staff for NATO Secretary-General Jens Stoltenberg.

Jenssen said the issue of Ukraine’s status after the war is being discussed within the alliance and that some countries have raised the possibility of Kyiv ceding some territory. The comments come as the Ukrainian counteroffensive is stalling, and Western officials are admitting it’s very unlikely to succeed.

The comments mark the first time that a high-level NATO official suggested Ukraine might have to cede territory to Russia.

The US and NATO have backed Ukraine’s demands for peace, which include Russia withdrawing from all the territory it has captured since invading, as well as giving up Crimea, which has been Russian-controlled since 2014.

Jenssen’s suggestion drew a sharp rebuke from Ukraine:

“Trading territory for a NATO umbrella? It is ridiculous,” Mykhailo Podolyak, an aide to Ukrainian President Volodymyr Zelensky, wrote on X. “That means deliberately choosing the defeat of democracy, encouraging a global criminal, preserving the Russian regime, destroying international law, and passing the war on to other generations.”

Podolyak said the war could only end if Russian President Vladimir Putin is defeated. “Obviously, if Putin does not suffer a crushing defeat, the political regime in Russia does not change, and war criminals are not punished, the war will definitely return with Russia’s appetite for more,” he said.

Russia would likely not go for any post-war settlement that involves Ukraine joining NATO as long as it can keep fueling the war since one of its main motives for invading was Kyiv’s alignment with NATO.

Tyler Durden
Thu, 08/17/2023 – 02:00

Escobar: From Bukhara To BRICS, Searching For Light In The Darkness Of Insanity

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Escobar: From Bukhara To BRICS, Searching For Light In The Darkness Of Insanity

Authored by Pepe Escobar,

On the SCO, Russia, China, India, Iran and Pakistan sit at the same table…

Bukhara The Noble, the “Dome of Islam”, with a history stretching back 2.500 years, bears too many marvels to mention: from the two-millennia-old Ark, a fortress around which the city developed, to the 48-meter high Kalon minaret, built in 1127, which so impressed Genghis Khan that he ordered it not to be razed.

The elegant, single turquoise band near the top of the minaret is the earliest example of glazed tilework all across the Heartland.

According to the Shanameh, the Persian epic, the hero Siyavush founded the city after marrying the daughter of neighboring Afrasiab. Even before the Ancient Silk Roads were in business, Bukhara thrived as a caravan crossroads – its city gates pointing to Merv (in today’s Turkmenistan), Herat (in western Afghanistan), Khiva and Samarkand.

Bukhara’s apex was in the 9th-10th centuries under the Samanid dynasty, as it turned into a Mecca of Persian culture and science. That was the time of al-Biruni, the poet Rudaki and of course Avicenna: they all had access to the legendary Treasure of Wisdom, a library that in the Islamic world would only be rivalled by the House of Wisdom in Baghdad.

Bukhara was largely razed by Genghis Khan and the Mongols in 1220 (yes: only the minaret was spared). When the great Moroccan traveler Ibn Battuta visited in 1333, most of the city was still in ruins.

But then, in 1318, someone very special had been born in Kasri Orifon, a village outside of Bukhara. At first he was simply known as Muhammad, after his father and grandfather, whose origins reached Hazrat Ali. But History ruled that Muhammad would eventually become famous all over the lands of Islam as the Sufi saint Bahauddin Naqshbandi.

What’s in a name? Everything. Bahauddin means “the light of religion” and Naqshbandi means “chaser”. His upbringing was enriched by several pirs (“saints”) and sheikhs living in and around Bukhara. He spent almost all his life in these oases, very poor and always relying on his own manual labor, with no slaves or servants.

Bahauddin Naqshbandi ended up founding a highly influential tariqa – Islamic school – based on a very simple concept: “Occupy your heart with Allah and your hands with work”. The concept was developed in other 11 rules, or rashas (“drops”).

What’s coming out of those “five fingers”

A visit to the Bahauddin Naqshbandi complex outside of Bukhara, centered around the tomb of the 14th century Sufi saint who is in fact the city’s spiritual protector, is an illuminating experience: such a peaceful atmosphere enveloping an appeasing network of holy stones, “wishing trees” and the odd sacrificial offering.

This is the essence of what could be defined as a parallel Islam infusing so many latitudes across the Heartland, combining an animist past with formal Islamic teachings.

At the complex, we meet scores of lovely, colorfully dressed Uzbek women from all regions and pilgrims from all over Central Asia but also from West and South Asia. Uzbek President Mirzoyoyev, extremely popular, was here late last week, and he came straight from the nearby, brand new, airport.

This oasis of peace and meditation offers not only a sharp contrast to the toxic turbulence of the times but also inspires us to search for sanity among the madness. After all, one of Naqshbandi’s rashas states, “our way is conversation, good deeds are found only in mutual communication, but not in seclusion.”

So let’s apply Sufi wisdom to the upcoming, possibly ground-breaking moment that should solidify the path of the Global Majority towards a more equitable, less deranged pattern of international relations: the 15th BRICS summit in South Africa next week.

Chinese Foreign Minister Wang Yi has coined a concise definition that embodies a fascinating mix of Confucianism and Sufism:

“The BRICS countries are like five fingers: short and long if extended, but a powerful fist if clenched together.”

How to clench these fingers into a powerful fist has been the work of quite a few sherpas in preparation for the summit.

But soon this will not be a matter related to a fist, but to fists, arms, legs and in fact, a whole body. That’s where BRICS+ comes in.

Among the network of new multilateral organizations involved in preparing and acting out a new system of international relations, BRICS is now seen as the premier Global South, or Global Majority, or “Global Globe” (copyright Lukashenko) platform.

We are still far away from the transition towards a new “world system” – to quote Wallerstein – but without BRICS even baby steps would be impossible.

South Africa will seal the first coordinates for the BRICS+ expansion – which may go on indefinitely. After all, large swathes of the “Global Globe” already have stated, formally (23 nations) and informally (countless “expressions of interest”, according to the South African Foreign Ministry) they want in.

The official list – subject to change – of those nations who want to be part of BRICS+ as soon as possible is a Global South’s who’s who: 

Algeria, Argentina, Bahrain, Bangladesh, Belarus, Bolivia, Cuba, EgyptEthiopia, Honduras, Indonesia, Iran, Kazakhstan, Kuwait, MoroccoNigeria, the State of Palestine, Saudi Arabia, Senegal, Thailand, UAE, Venezuela and Vietnam.

Then there’s Africa: the “five fingers”, via South African President Cyril Ramaphosa, invited no less than 67 leaders from Africa and the Global South to follow the BRICS-Africa Outreach and BRICS+ Dialogues.

This all spells out what would be the key BRICS rasha, to evoke Naqshbandi: total Africa and Global South inclusion – all nations engaged in profitable conversations and equally respected in affirming their sovereignty.

The Persians strike back

A case can be made that Iran is in a privileged position to become one of the first BRICS+ members. It helps that Tehran already enjoys strategic partnership status with both Russia and China and also is a key partner of India in the International North South Transportation Corridor (INSTC).

Iranian Foreign Minister Hossein Amir-Abdollahian has already stated, on the record that, “the partnership between Iran and BRICS has in fact already started in some areas. In the field of transport, the North-South transport corridor connecting India to Russia via Iran is actually part of BRICS’ transport project.”

In parallel to breakthroughs on BRICS+, the “five fingers” will be relatively cautious on the de-dollarization front. Sherpas have already confirmed, off the record, there will be no official announcement of a new currency, but of more bilateral trade and multilateral trade using the members’ own currencies: for the moment the notorious R5 (renminbi, ruble, real, rupee and rand).

Belarussian leader Lukashenko, who coined “Global Globe” as a motto as strong, if not even more seductive than Global South, was the first to evoke a crucial policy coup that may take place further on down the road, with BRICS+ in effect: the merger of BRICS and the Shanghai Cooperation Organization (SCO).

Now Lukashenko is being echoed in public by former South African ambassador Kingsley Makhubela – as well as scores of “Global Globe” diplomats and analysts off the record: “In the future, BRICS and the SCO would match to form one entity (…) Because having the BRICS and the SCO running in parallel with the same members would not make sense.”

No question about that. The key BRICS drivers are Russia and China, with India slightly less influential for a number of complex reasons. On the SCO, Russia, China, India, Iran and Pakistan sit at the same table. The Eurasia focus of the SCO can easily be transplanted into BRICS+. Both organizations are “Global Globe”-centered; driving towards multipolarity; and most of all, committed to de-dollarization on all fronts.

It is indeed possible to have a Sufi reading of all these geopolitical and geoeconomic tectonic plates in motion. As much as the promoters of Divide and Rule as well as assorted dogs of war would be clueless visiting the Naqshbandi complex outside of Bukhara, the “Global Globe” may find all the answers it seeks as it engages in a process of conversation and mutual respect.

Bless these global souls – and may they find knowledge as if they were revisiting the Treasure of Wisdom of 10th century Bukhara.

Tyler Durden
Wed, 08/16/2023 – 23:40

Americans More Likely To Turn To Religion For Meaning

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Americans More Likely To Turn To Religion For Meaning

“What makes life meaningful?”

This is an open-ended question asked in a 2021 survey by Pew Research Center to 17 advanced economies. Analysts found that while many people find meaning in their surroundings, both in terms of society and nature, some also mentioned religion.

As Statista’s Anna Fleck shows in the following graphic, religion and spirituality was mentioned more frequently among US adults, compared to those living in other advanced economies

Pew analysts also ranked the most frequently mentioned topics, finding that in the US religion came up as the fifth most highly mentioned topic. 

By contrast, only one percent of French respondents mentioned spirituality, faith and religion when describing what gives them meaning in life. 

Even for this one percent, the topic was less front of mind than it was for their US counterparts, ranking in 15th place.

Infographic: U.S. Adults More Likely to Turn to Religion for Meaning | Statista

You will find more infographics at Statista

These figures may seem low due to the open-ended nature of the question, which increases the range of different possible responses. Respondents who answered with reference to God or to religious communities, church attendance and general mention of spirituality or a higher power were counted for these results.

According to the Pew Research Center, mention of religion was fairly similar across age, income, education or gender categories. 

That is, apart from in the US, where older adults and Republicans or Republican-leaning independents were more likely to mention the topic than Democrats.

Tyler Durden
Wed, 08/16/2023 – 23:20

Argentina’s Leading Presidential Candidate Vows To Shut Down “Thieving” Central Bank

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Argentina’s Leading Presidential Candidate Vows To Shut Down “Thieving” Central Bank

After sending local capital markets into a tailspin and triggering a currency devaluation with his shock win in Sunday’s country’s presidential primary, Argentina’s leading presidential candidate Javier Milei – a self-described anarcho-capitalist – added to the shock factor on Wednesday when he pledged to close the nation’s central bank while saying he would make every effort to avoid a default on the country’s sovereign debt if he wins the October vote.

Milei, a radical libertarian, told Bloomberg News his bold fiscal adjustment would boost Argentina’s reputation and credit profile, making a default unnecessary.

His plan includes slashing spending by at least 13% of GDP before mid-2025 by dramatically downsizing public works, reducing the number of ministries, removing subsidies and capital restrictions that would allow businesses to transact in US dollars. More drastically, he also plans to shutter the central bank which he said has “no reason to exist”, and dollarize the $640 billion economy.

“I will make every effort to avoid a default, obviously,” Milei said in a two-hour-long interview in Buenos Aires Wednesday. “If you do the fiscal adjustment that’s needed, the financing will be there.”

Milei triggered a market shock when the presidential candidate – largely viewed as an outsider without serious chances for the position until now – came out ahead in the primary, seen as a barometer for presidential elections in a country where polls are notoriously unreliable. The slump forced the government to devalue its tightly controlled official exchange rate by 18% when markets opened Monday.

In the first interview to foreign media after his unexpected win, Milei spoke to Bloomberg and detailed his plan to scrap the Argentine peso for the US dollar as a way to bring down inflation that’s running at 113%, and upped his criticism of the central bank, which he called “the worst garbage that exists on this Earth.”

“Central banks are divided in four categories: the bad ones, like the Federal Reserve, the very bad ones, like the ones in Latin America, the horribly bad ones, and the Central Bank of Argentina,” he said.

If Milei wins the presidency, he plans to hand over the keys to the central bank to economist Emilio Ocampo, his informal adviser on the dollarization program, so that he can shut it down. Ocampo will also help in negotiations with the International Monetary Fund, which has a $44 billion program with the South American nation. The candidate says he has no plans to ask the IMF for more money.

“A fiscal deficit is immoral,” Milei said.

“If you live continually with a fiscal deficit, you’re going to be insolvent.”

Just don’t tell that to the US which has had like four annual surpluses in the past 50 years.

Milei said he’s already developed a plan to dollarize the economy, a move he vows would be among his first in case he wins the Oct. 22 election. Argentina would follow El Salvador’s model, allowing people voluntarily choose between currencies.

Once two-thirds of the monetary base is converted, the economy would become fully dollarized, he said.

“If nobody wants to have pesos in Argentina, the question is how much are pesos worth in real terms? Nobody wants them, we’re not talking about water in the middle of the desert. We’re talking about something nobody wants,” Milei said.

Manuel Garcia Gojon writes, at The Mises Institute, that Milei’s full plan – which he laid out in some detail on August 2nd, is nothing if not pragmatic from an anarchist point of view.

 

The first measure consists of an organizational reform of the government, going from 18 to 8 ministries. The ministries to be included are interior, foreign relations, defense, economy, justice, security, infrastructure, and human capital. No career bureaucrats are to be fired initially, but they will be reassigned. The political appointees will not be renewed and will be kept to a minimum. All government employee privileges, such as bodyguards and drivers, will be eliminated, except in the cases in which they are absolutely necessary for security reasons. This measure also includes initiating the privatization or closure process of all state-owned companies.

The second measure consists of a significant reduction in public spending. For the first budget, they seek to eliminate expenditure items amounting to 15 percent of GDP, taking it from a deficit to a surplus. On the revenue side, they seek to eliminate 90 percent of taxes, which only raise an amount equal to 2 percent of GDP but have a distortive effect. There is also an intention of lowering the taxes that remain.

The third measure consists of a flexibilization of labor regulations. Firing an employee is currently very costly in Argentina between litigation and compensation. This measure is geared toward reducing those costs by making it easier for companies to fire new employees. The balancing side of this measure is the implementation of a private unemployment insurance scheme. With this measure they seek to take formal employment in the private sector from 6 million positions to 14 million positions.

The fourth measure consists of a liberalization of trade. The goal of this measure is unilateral free trade in the style of Chile. This includes the elimination of all import and export tariffs and the reduction of regulatory restrictions.

The fifth measure consists of a monetary reform. This measure includes allowing the use of any commodity or foreign currency as legal tender and the liquidation of the central bank, which would result in the elimination of the Argentine Peso. There are alternative plans for the implementation of this measure, but the leading one is the one developed by Emilio Ocampo and Nicolas Cachanosky. In terms of timing, it would take between nine and 24 months. The conversion would be made at the market exchange rate. Once two thirds of the monetary base has been converted, a countdown for the last date to convert would be triggered.

An additional challenge for this measure is that the central bank has remunerated liabilities three times the size of the monetary base. These are like the Federal Reserve’s program of paying interest on reserves in order to sterilize increases in the quantity of money. The central bank does have some commodities and foreign currencies in reserves but most of the assets consist of government bonds that currently trade at a third of their face value. To access the necessary liquidity to liquidate the central bank, the bonds would be transferred to a fund which would acquire the necessary line of credit using the bonds as collateral. The line of credit has already been confidentially agreed upon. The bonds are guaranteed to increase in price if the budget deficit is eliminated as specified in the second measure.

The sixth measure consists of an energy reform. This measure intends to eliminate all subsidies to energy providers through a recalibration of the financial equilibrium to lower costs to keep the companies profitable and minimize the impact on the cost to the consumers. This measure opens a door to subsidies on the demand side for vulnerable households. They also seek to improve the energy infrastructure through a scheme of public interest declarations for projects which would be financed and executed by the private sector, but for which the government might provide a minimum revenue guarantee.

The seventh measure consists of fostering investment. This will be done through a special legal arrangement for long term investment with a focus on mining, fossil fuels, renewable energy, forestry, and other sectors. In order to foster investment, they will also aim to eliminate foreign exchange restrictions and export fees.

The eighth measure consists of an agrarian reform. This includes the elimination of the foreign exchange spread between the official exchange rate and the market exchange rate through the liquidation of the central bank, the elimination of all export fees and retentions, the elimination of the gross revenue tax, the elimination of all restrictions to foreign trade including quotas and the need for authorization, the promulgation of a new seeds law, and the improvement to road infrastructure through private enterprise.

The ninth measure consists of a judicial reform. This measure includes the designation of a Minister of Justice with the consensus of the judicial branch, as well as the appointment of a Supreme Court Justice without political affiliations to fill the present vacancy, prohibiting members of the judicial branch from engaging in partisan politics, and promoting the budgetary independence of the judicial branch. Furthermore, they will seek to implement jury trials and oral proceedings throughout the country.

The tenth measure consists of a welfare reform. Current welfare benefits will be initially maintained. They aim to move in the long term towards a private system in which users pay for the health and education services they consume. In the short term they aim to provide income protection programs to mitigate extreme poverty, nutritional programs, parental educational programs about cognitive stimulation, greater coverage for preschool, incentives for graduation, programs for the integration of people with disabilities, the promotion of access to private credit, and the elimination of all middlemen in the provision of welfare.

The eleventh measure consists of an educational reform. They aim to move towards a greater degree of freedom to choose the curricula, methods, and educators. The measure also includes launching a school voucher pilot program. They will also establish an evaluation criterion for schools so that they may compete for incentives.

The twelfth measure consists of a health reform. They aim to transfer the subsidization of healthcare from supply to demand to allow for greater freedom of choice and competition. This measure includes providing the existing healthcare benefits as vouchers so that there is no restriction to a specific provider.

The thirteenth measure consists of a security reform. This measure includes reforms to the homeland security, national defense, and intelligence laws, as well as a reform to the penitentiary system to incorporate public private hybrids and intensifying the prosecution of drug trafficking.

The one-time congressman obtained more votes than the pro business coalition led by Patricia Bullrich and the ruling Peronist bloc of Economy Minister Sergio Massa, surprising pollsters who expected him to come in third.

Investors are now worried the country is headed for its fourth debt workout in the past two decades.

Among chief concerns for markets is that Milei, a political outsider, wouldn’t be able to get backing for his plans.

The 52 year-old, who doesn’t shy away from criticizing politicians he says have been robbing Argentines for decades, said he would call referendums if he can’t get legislative consensus to approve his measures.

“If I lower the currency risk, and I lower the credit risk, that means country risk will plummet. It means that bonds are literally going to fly,” he said.

“The truth is its a pretty simple trade. Or, if you buy and hold, for example, returns in a year would be above 200%.”

In the wide-ranging Bloomberg interview, Milei also criticized China and Latin America leftist leaders he considers “socialists,” said he would seek to leave the Mercosur trade bloc and would quickly move to deregulate commodity markets.

Tyler Durden
Wed, 08/16/2023 – 23:00

Over 40% Of Japanese Women May Never Have Kids

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Over 40% Of Japanese Women May Never Have Kids

Some 42% of adult Japanese women may never reproduce, according to a report by Nikkei, citing a not-yet published estimate by a government research group.

An unusually high percentage of Japanese women choosing not to have children could hurt the financial health of the nation’s social security program.    © Reuters

According to Japan’s National Institute of Population and Social Security Research, the medium scenario projects that 33.4% of women born in 2005 will go through their childbearing years without having children, while the most optimistic case is that 24.6% won’t reproduce.

The percentage is even higher for men – with as many as half of 18-year-old males projected to never have children.

Mysteries abound…

It’s not just Japan, either:

The share of people without children is rising in such other developed economies as the U.S. and Europe. This has been attributed to a shift in values as more people focus on self-fulfillment rather than having kids.

In these countries, around 10% to 20% of women born in 1970 never had children. The share in Japan is significantly higher at 27% and could end up at more than double Western levels if American and European rates stay around their current levels. –Nikkei

That said, the number of childless adults has begun to drop in the US, UK and Germany, as efforts to encourage people to balance work with raising a family have encouraged many to have at least one child.

Japan, meanwhile, has begun efforts to create a better environment for prospective parents with similar work-style reforms.

You can lead a horse to water…

Despite attempts at government ‘stimulation’ to reproduce, many young people are simply less interested in marriage and children right now, with stagnant wages and uncertainty about the future are cited as reasons.

The Japanese institute’s 2021 National Fertility Survey found a surge in the number of unmarried young people who are fine with the concept of remaining single for life.

There needs to be an urgent discussion on building a social safety net in every area — including pensions, medical care, nursing care and living assistance — that does not disadvantage people without family, along with funding,” said social security expert Takashi Oshio, a professor at Hitotsubashi University’s Institute of Economic Research.

China and South Korea have also seen plunging birthrates over the past several years – which began years later than Japan’s.

What’s going on?

Tyler Durden
Wed, 08/16/2023 – 22:40