Flash News Brief

The flash news briefing are complied for my son who is still at Marine Corps Boot Camp at MCRD San Diego, let me know if you enjoy them. Otherwise, once he leaves Boot Camp they will likely stop. 

WSJ

Foreign college students are significantly more likely to cheat than are domestic, and Chinese students are the most likely to cheat. China must innovate its way into the future if it will remain where it is economically. The great Chinese rise to power was based solely on emulation, not innovation. The large numbers of Chinese students cheating reflect this problem. China, and its US students are a peoples who steal their ideas, not create their ideas. 

Who would have guessed, but the federal governments involvement in higher education, especially college loans, and grants has resulted in wide spread debt slavery, and lack of opportunity for millions. Seven million people are in default on their college loans, and millions more will be soon. This was driven by the federal governments cargo cult belief that because college graduates in the past did well financially, bought homes, raised families, and were valuable members of the community, the way to obtain more such people was to have more people go to college. Cargo cults get the causation wrong. This particular mistake is destroying the financial lives of millions of young people. 

The Brexit fight is slowly favoring the "leave" camp. Fear mongering by the "stay" camp has backfired badly, the immigration issue ripping through Europe is also skewing Brits towards the "leave" camp. I am expecting the "leave" camp to strengthen primarily because the large number of undecideds are already leaning towards Brexit, and the movement over the past week or so has been quite strongly towards Brexit with polls shifting decisively in that direction. This will be a horse race!

The latest hot buy in the financial world is municipal bonds, meaning that the lesson that US municipalities are bankrupt has not yet sunk in. Entire states and territories are bankrupt, large numbers of cities are so pressured by malspending, and the pension overhang that it is unclear how anyone could think the path to wealth goes through municipalities fraught with bankruptcy risk. This will have its correction, and likely soon. 

Saudi has cut the cost of oil imports to Europe, signaling stiffening competition, and excess supply problems. So much for the recent oil bull oil run. The bulls remain optimistic that oil will soon return to its high flying heyday, but there is little evidence for this. As I have said so often, this is due to the Islamic proxy war between Saudi, and Iran. Iran is less dependent on oil, and has an integrated economy which will only grow. Saudi is totally dependent on oil and has no experience creating or growing an economy independent of oil. This kind of thing cannot happen over night especially for a nation which lives in relative wealth.

The Swiss have voted against a $2,500 per month guarantee income for all adults. Only 23% of Swiss voted for the proposition. If they are voting against this I can't see any other country going for it at present, well perhaps Norway, but not until the European economy strengthens. I think this is a dead letter.

Financial Times

Clinton is calling on Sanders to fall in line once she clinches the nomination, but that looks unlikely. This will go to the convention, and Sanders is insisting that there will be a contested convention. Perhaps we will be treated to a redux of Chicago 1968? Who knows?

Russia's involvement in East Ukraine continues to cause problems. I proposed back when this started that the US or Europe should have brokered a deal whereby Russia obtained the Crimea, and a land bridge, to access their military bases, in exchange for debt forgiveness, a trade deal, and possibly additional oil/energy sales. Instead the region got a good dose of low grade Russian warfare. Russia is not yet a failed state but it appears to be headed to failure. Aligning with Russia would seem to be a very bad idea, but . . . 

Britain seems consumed by the Trump/Clinton Presidential battle, and they are also discussion Brexit. What in the world causes foreign countries to become fixated on US politics? Even when they have something as debatable as Brexit, US policy, US presidential elections trump national issues. Unbelievable.