- RT & Michael Flynn: Is That The Case Mueller Is Going To Make?
Authored by Alexander Mercouris via TheDuran.com,
With every other attempt to put together a convincing Russiagate case having failed – the indictments against Manafort, Gates and Papadopoulos make no allusion to the collusion allegations at the heart of it, and the FBI has now admitted to Congressional investigators that it cannot verify the Trump Dossier, the document which appears to have triggered the whole inquiry – it seems that the pressure is now increasingly on Michael Flynn.
Shortly after the indictments against Manafort, Gates and Papadopoulos I speculated that an indictment against Flynn might be pending. News that his lawyers have broken contact with the President’s lawyers hardens that suspicion. There are also rumours that Special Counsel Mueller may also be considering an indictment against his son.
The trouble is that nothing that is known about General Flynn’s activities during the 2016 election campaign give any reason to think that he was involved in any sort of illegal collusion with the Russians.
The only case that can convincingly be made against him is that he failed to register under FARA in connection with paid lobbying work he did for a foreign government. However the government in question is Turkey not Russia.
I wonder whether this may explain the otherwise highly oppressive and legally dubious decision to force RT to register under FARA as a foreign agent?
Flynn did appear on RT on a number of occasions, and did attend an RT dinner where he was famously photographed sitting at the same table as President Putin.
He also received payments from RT, though there were quibbles between him and RT over the amount.
Could it be that the intention is to claim that since RT is a foreign agent – an agent of the Russian government no less – Flynn is also in breach of FARA and/or his disclosure obligations to the Pentagon because he did not register or properly disclose his dealings with RT?
Whilst that would on the face of it be an attempt to use the FARA legislation retrospectively – a legally highly dubious practice, to put it mildly – it might make some sense of the otherwise legally highly questionable decision to force RT to register as a foreign agent.
There is a further possibility. Back in January when the 6th January 2017 ODNI report was published I speculated that the long seven page appendix about RT that was mysteriously attached to it might suggest that the US intelligence community has convinced itself that RT was in some way the intermediary the Russians used to provide the DNC and Podesta emails to Wikileaks.
After all Julian Assange has had a programme on RT and RT – along with many other stations – covered the story of the DNC and Podesta leaks heavily. It is not difficult to see how in the present hysterical atmosphere someone might have put all these facts together and come to some completely erroneous conclusions which are not supported by evidence.
I say the last because as I have pointed out previously, former FBI Director James Comey has in effect admitted that the FBI and therefore presumably Special Counsel Mueller’s investigators actually have no idea how the emails reached Wikileaks.
If this is indeed what is going on then it is legally and ethically highly dubious. However this has been the consistent pattern of the whole Russiagate investigation from the start.
It is now clear that it was used to place members of the Trump campaign under surveillance, and has since morphed into what looks like an increasingly desperate attempt to justify this conduct.
Given the high stakes, it is not difficult to see how concerns about the retrospective use of legislation might be brushed aside.
- Afghan War Intensifies: US Stealth Fighters Target Narcotics Production Facilities
16-years after the Bush administration began military operations in Afghanistan, President Trump has just launched a military campaign of his own using high-tech stealth fighters to bomb drug labs in the country.
The Pentagon’s playbook of nation building in the Middle East has stretched, now, to three Presidents making it the longest war in U.S. history. Ever since the U.S. started occupying the country in the early 2000s, opium production soared. Afghan President Ashraf Ghani said without drugs, the war in Afghanistan “would have been long over.”
In 2017, Afghanistan’s opium crop and production both hit a record high, despite the increased efforts by government to stop the drug trade. For the Taliban and other criminal elements in the region, opium is an important revenue source to fund operations.
On Monday, the Defense Department said it unleashed F-22 Raptor stealth fighters to bomb narcotic production facilities in southern Afghanistan targeting the revenue streams of the Taliban. The air operation started on Sunday and continued through Monday. The F-22s were accompanied by B-52 bombers and Afghan A-29 Super Tucanos for additional support to expand the strike mission.
According to the Washington Post,
This represents the first significant use of new legal authorities granted by the Trump administration in August that enable the Pentagon to target Taliban revenue streams, said Army Gen. John W. Nicholson Jr., the top U.S. commander in Afghanistan.
Previously, the U.S. military conducted strikes only when facing imminent threat or working directly with the Afghans.
Nicholson said, the F-22 “was used because of its ability to deliver precision munitions — in this case, a 250-pound bomb, small-diameter, that causes the minimal amount of collateral damage.” The objective for more precise munitions comes at a time where civilian deaths in U.S. airstrikes have been heavily scrutinized. Earlier this month, U.S. airstrikes in the region killed ‘at least 13 civilians’ in a bombing raid.
“This target was also a Taliban narcotics production facility in Musa Qala. So I want to draw your attention — as you look at this strike, you’re going to see that inside this compound are multiple structures, and we destroy only two of them, while leaving the third standing, which we do to avoid collateral damage,” Nicholson said.
The Drug Enforcement Administration estimates there are 400 to 500 narcotic production facilities across Afghanistan. In the latest strike about 10 of them were taken out. The concentration of strikes resided in the Helmand province, an area where Taliban hold strong control.
Opium cultivation change in Afghanistan 2015/2016 shown on the chart below indicates a rapid increase in the northern tier of the country.
More details of the operation per The Washington Post,
The strikes Sunday hit seven Taliban drug laboratories and a headquarters in three districts across northern Helmand. Three occurred in Kajaki district, four in Musa Qala and one in Sangin — all areas controlled by the U.S. military at the height of Obama’s troop surge there. The largest, carried out by a B-52, struck a opium-processing facility where 50 barrels of drugs were cooking at the time, Nicholson said. Video released by the Pentagon shows the building being consumed by a massive fireball.
The U.S. government has pursued various anti-drug strategies during its 16-year war in Afghanistan, but it has done little to hamper the steady resurgence of opium poppy cultivation and drug trafficking since the Taliban’s fall in 2001. While in power before the U.S. invasion, the Taliban banned poppy growing as un-Islamic and staged bonfires of confiscated opium and heroin.
Until now, though, those U.S. efforts have not directly involved the military. During the early post-Taliban years, the Pentagon focused exclusively on pursuing al-Qaeda and Taliban insurgents and expressly avoided diverting efforts toward curbing the drug trade. In some cases, this was because of U.S. alliances with warlords or regional strongmen who were involved in drugs.
Later, as both poppy production and drug trading rebounded, the U.S. launched several ambitious programs to counter them. One was a crop substitution campaign that encouraged and paid farmers to grow almonds, apricots, green vegetables and saffron instead of poppy. Another paid farmers cash to destroy their poppy fields and funded interdiction campaigns in which Afghan security forces burned fields under cultivation.
These efforts were fatally hampered by a mix of factors, including the enormous appeal of drug profits, the long-accepted tradition of poppy growing by small farmers, the involvement of powerful Afghans in the trade, local hostility to interdiction, and the hardiness that enabled poppy plants to thrive in harsh and dry conditions.
Meanwhile, the Taliban insurgents, apparently abandoning their previous religious scruples, became increasingly involved in both poppy cultivation and drug trafficking as a means of supporting the war, especially in Helmand province. At first they primarily demanded taxes from growers, but gradually the overlap between Taliban recruits and local agricultural labor became so pronounced that the insurgents essentially suspended military operations during poppy harvest seasons.
In the latest figures from the United Nations, “Afghanistan opium production jumps 87 per cent to record level”… Most of the increase has occurred under the United States occupation of the region.
It seems as Afghan President Ashraf Ghani is bullish on President Trump’s new campaign to bomb the nation’s narcotic facilities…
Last night, Afghan and US forces launched operations in Helmand to abolish opium processing labs. 8 labs were destroyed on day one. We're determined to tackle criminal economy and narcotics trafficking with full force. It's the main source of financing violence and terror.
— Ashraf Ghani (@ashrafghani) November 20, 2017
Perhaps in a preview of things to come, Sunday through Monday’s U.S airstrikes in Afghanistan signal the war is about to intensify.
Stealth fighters and other support aircraft only managed to knockout 10 narcotic facilities and as the report states there are about another 400-500 to go.
- Doug Casey On Why Race Will Break America Apart, Part II
Today, Doug and I continue our conversation on why the U.S. could dissolve over time. Doug says the problems are all bubbling to the surface…and when the U.S. eventually breaks apart “it will not be peaceful.” (If you missed Part I, you can catch up right here.)
Justin: What about political tensions? Because, as I’m sure you’ve seen, the far-left and far-right are becoming more and more antagonistic. In some cases, they’ve even become violent towards each other.
Could radical political ideologies cause the country to break apart?
Doug: Yes, I think so.
In the late ‘60s and the early ‘70s, hundreds of bombings took place at universities, banks, and all kinds of places. The National Guard was in cities like Detroit during the riots, and they were raking buildings with .50 caliber machine guns. It was wild.
I don’t think most remember this. At least, I don’t see it being brought up anywhere.
I lived in Washington DC then. It seemed like there was tear gas in the air half the time I went out on a date on a Friday or Saturday night.
But as wild and wooly as things were back then, what we have now is much more serious.
The racial element is still there, but the ideological element is even more pronounced.
In those days, people at least talked to each other. You could have a disagreement, and it was a simple difference of opinion.
It’s much worse now. Today, there’s a visceral hatred between the left and the right, between the people that live in the so-called red counties and blue counties.
You add that to the racial situation. Then throw in the fact that the rich are getting richer at an exponential rate while the middle class is disappearing.
And let’s not forget the large-scale subsidized migration of people from totally alien Third World hellholes. This is not what the U.S. was founded on. Before changes in the immigration law that were made in the ‘60s, immigrants were culturally compatible opportunity seekers that were coming to America to improve themselves.
Now, people from all kinds of alien places are being imported by the hundreds of thousands by NGOs; they then go on welfare in enclaves in different places around the country. This is unlikely to end well. The U.S. is no longer a country.
That said, I’m actually for open borders. But it’s only possible if, A, there is zero welfare to attract the wrong types. And, B, all property was privately owned, to help ensure everyone is self-supporting.
Justin: But Doug, aren’t you against large nation states? Would the Divided States of America be better?
Doug: Absolutely. In my ideal world, there would be approximately seven billion little nation states on the planet, all of them independent.
It would be excellent if the U.S. split into smaller entities, where the people that lived in these entities shared more in common with each other.
And let me go further. I think it was a mistake for the U.S. to have come together with the Constitution of 1789. The Articles of Confederation should have stayed in existence, with a few modifications. The Constitutional Convention of 1789 was actually a coup. A successful, non-violent coup. Most people didn’t really care because the government was such a trivial factor in their lives in those days.
I’m just afraid that when the U.S. breaks up, which inevitably it will, it may not be peaceful. The existence of the USA—which is now just one of 200 other nation states, no longer anything special—is not part of the cosmic firmament. The original founding ideas of America expressed in the Declaration of Independence have been lost, washed away. The absence of those principles is why I say it’s going to come to a bad end.
Justin: Do you think the United States will dissolve over time? Or will something set this in motion, possibly a financial or economic crisis?
Doug: An economic crisis always brings things to the fore.
When the standard of living is dropping, the government inevitably finds somebody or something to blame…anything other than itself.
Usually, they point the finger at foreigners. But if you get the wrong people in the government, they can point fingers at domestic enemies, the way the Germans did with the Jews in the ‘30s, or the way the Soviets did with the kulaks at the same time. Or the way the Chinese did with its enemies of the State under Mao. There are many, many other examples. Political power attracts the worst kind of people—and then brings out the worst in them.
Economic turmoil causes social turmoil and political turmoil. And one of the things that scares me most is that if things get spooky within the U.S., people in the government will try to find a foreign enemy in order to “unite” the country.
Incidentally, I don’t feel that uniting the country is necessarily a good idea. It all depends on which direction they’re united towards, and united against what. And do the people of the United States have enough in common anymore to even be united? I think not, in an age of multiculturalism.
There are a lot of problems, and they’re bubbling to the surface. When the economy gets bad, which it will, I think the pot will boil over.
* * *
As Doug says, America’s problems are coming to a head. Unfortunately, most investors aren’t prepared for what’s coming. That’s why Doug and his team just released this urgent video that explains everything you need to know about the crisis that’s about to make landfall…and why you need to take action today. Click here to watch it now.
- The Party's Over For Australia's $5.6 Trillion Housing Frenzy
Early this month, we discussed whether the world’s longest running bull market – 55 years – in Australian house prices had come to an end. This was UBS’s view following the October 2017 monthly report on Australian house prices from CoreLogic suggested that measures to tighten credit standards and dissuade overseas buyers (especially Chinese in Sydney and Melbourne) have finally begun to bite. As CoreLogic’s summary table shows, Sydney prices fell in October, for the second month running, and poised to lead national prices lower.
We followed up that discussion with “Why Australia’s Economy Is A House Of Cards” in which Matt Barrie and Craig Tindale described how Australia’s three decades long economic expansion had mostly been the result of “dumb luck”.
As a whole, the Australian economy has grown through a property bubble inflating on top of a mining bubble, built on top of a commodities bubble, driven by a China bubble.
Now Bloomberg has followed UBS in calling the end of the bull market, while showing some of the frankly scary metrics for Australian housing versus the country’s GDP.
The party is finally winding down for Australia’s housing market. How severe the hangover is will determine the economy’s fate for years to come. After five years of surging prices, the market value of the nation’s homes has ballooned to A$7.3 trillion ($5.6 trillion) — or more than four times gross domestic product. Not even the U.S. and U.K. markets achieved such heights at their peaks a decade ago before prices spiraled lower and dragged their economies with them.
Australia’s obsession with property is firmly entrenched in the nation’s economy and psyche, fueled by record-low interest rates, generous tax breaks, banks hooked on mortgage lending, and prime-time TV shows where home renovators are lauded like sporting heroes. For many, homes morphed into cash machines to finance loans for boats, cars and investment properties. The upshot: households are now twice as indebted as China’s.
One thing which should slow Australian property prices on the way down is that the Governor of the Reserve Bank of Australia (RBA), Philip Lowe, is still in no rush to raise rates. However, his hands are tied…and he knows it…as Australia’s New Daily reported.
“In striking the appropriate balance in our policy setting we have paid close attention to trends in household borrowing given the already high levels of debt.”
Over the past four years, household borrowing has increased at an average rate of 6.5 per cent while household income has increased at an average rate of just 3.5 per cent, he said. An area of particular concern for Dr Lowe is the slow growth in household incomes. Over the past four years, nominal average hourly earnings have grown at the slowest rate in “many decades”.
“This means that borrowers haven’t been able to rely on rising incomes to reduce the real value of the debt repayments in the way they used to,” he said.
Here’s Bloomberg on the same theme.
Aussie households have racked up record private debts and aren’t getting the pay rises to help service them. That’s a core concern for the RBA and frequently cited as a deterrent for hiking interest rates. Macquarie Bank has said such debt levels mean any hikes will have triple the impact on consumers than tightening cycles in the mid-1990s. With retail sales looking grim and wage growth near record lows, debt will likely vex policy makers for years.
Of course, as Bloomberg notes, the RBA is pointing out the resilience of the Australian financial system should it be hit by any shocks…somewhat reminiscent of Ben Bernanke prior to the sub-prime crisis.
So far, the Reserve Bank of Australia has relied on banking regulators to apply the brakes with lending curbs. It reckons the financial system is well-placed to withstand any shocks, but isn’t so confident on consumers.
The banks didn’t fare so well in the 2008 crisis, nor will they in an Australian housing crisis. Bloomberg continues.
On one hand, the dizzy valuations reflect a desirable location and strong population growth. But they also reflect the massive liabilities that are now tied to these assets. “The risk is that it leaves the Australian economy extremely exposed, and a minor shock could become far more significant,” said Daniel Blake, an economist at Morgan Stanley in Sydney.
The increasing treatment of housing as a financial commodity has seen borrowers rush into a byzantine maze of mortgage-related products. That’s made banks very profitable, but very exposed. While the RBA is satisfied that lenders have adequate buffers to cope with any downturn, banks may find it harder to value their collateral in a falling market as investors look to consolidate their portfolios of multiple homes, said Blake.
Meantime, aside from tighter lending standards and fewer overseas buyers, the major Australian cities are poised to see a wave of new supply, especially apartments – as this chart shows.
As you’d expect, even that is not something that will change the rhetoric from the central bank, as Bloomberg notes.
While cranes dot the Sydney skyline for miles, the central bank remains confident that population growth will eventually fill all those new apartments. Its worries about a Melbourne glut have eased off recently, with the main concern in the Brisbane market, where peak completion is expected this year, capping a three-year period in which the number of apartments has increased by more than a third. Overseas buyers comprise up to 15 percent of new dwelling purchases nationwide, according to the RBA.
Having called the end of Australia’s housing boom, UBS notes.
“The cooling may be happening a bit more quickly than even we expected.”
- The End Of The Age Of Benevolence
Authored by Francis Marion of CanadianGunBlog.com, via Jim Quinn's Burning Platform blog,
The history of democracy, Marxism and feminism is the history of the snake, which, being hungry for more, stalks its own tail and consumes itself.
Some evenings I sit on the sofa in the family room with my teenage daughter and watch a TV program with her. I leave the choice of the show to her, it matters little to me, and when she finds something she likes she sits next to me, puts her head on my shoulder, and snuggles up for the hour it takes to watch whatever it is she’s chosen.
It’s our time.
Occasionally we’ll sneak in another twenty or thirty minutes to the objection of her mother but I like my time with her so I put up with the raised eyebrows and the, “She’s got school tomorrow,” scoldings. It’s important to me that she knows I love her, that I want to spend time with her and that she feels safe when she is with me. Someday, when she is a grown woman I want her to find a man that will take care of her and protect her like I do. I expect no less from a suitor and neither should she.
There will be women who read this who will object to my stance. They will say, “She doesn’t need a man to feel safe or validated or content,” but I would disagree. When she gets older she’ll need a good man, not just any man, and that’s as true today as much as it was ten years, twenty years, fifty years, one hundred years and even one thousand years ago. And it will become even more so as time goes on.
Indeed, we have reached peak denial in our civilization and whether we like it or not reality is about to make a come back.
The freedom that we have enjoyed in the west and the modern democracies that have sprung forth from our evolving and enlightened philosophies over the past few hundred years are not a given. Granted, they are preferable outcomes given our natural state but politically speaking they are an anomaly in the history of mankind and not the norm.
As such, democracy and the systems, social structures and institutions that have grown up around them are grossly misunderstood by the vast majority of the western world. Most of the people living in the west today have been raised to believe that democracy is a moral system of governance and that it is our gift to the rest of mankind. But democracy is not an inherently moral system nor is it a guarantor of linear, progressive political growth.
At its root democracy is quite simple. It is the exercise of political power by the majority over the minority. It is the power to choose in matters of politics. This, of course, begs the question: to choose what?
Since choices in general (and political ones are no exception) can be either good or bad, in this case, both for the individual and the body politic, then it follows that democracy is neither. It is nothing more than a tool for decision making where the majority holds the power to make decisions that affect everyone, either for better or for worse. Democracy is, therefore, a reflection of the character of the people who exercise it.
Additionally, democracy is also the use of soft force. That is, the minority bends to the will of the majority on political matters and the apparatus of the state is responsible for carrying out its demands. The minority consents, willingly or unwillingly not because violence is present but because, by the state’s presence, it is implied.
More importantly, though, democracy is a luxury that is preceded by benevolence but does not necessarily guarantee its continuance or creation if forgotten.
Societies in a state of internal turmoil, or where competing factions vie for political power, often through the use of overt physical violence, will forgo democracy because the primary component for its exercise, order, is absent.
Democracy in the western world has always followed ‘order’. ‘Order’ is a byproduct of force and, like democracy varies in severity on the scale of good and bad, its moral leanings by and large being dependent on the type of people who impose it from the top down. It can be fatherly and benevolent or it can be violent and oppressive. It is never universally both.
Thus democracy usually occurs where ‘order’ has been established and the apparatus of the state is at least somewhat benevolent.
In a political world ruled by strength, order and benevolence are precursors to suffrage. Without either suffrage would not exist, choices would be limited and brute strength would still be the order of the day.
Whether feminists are willing to admit it or not, brute, physical strength is at the root of all political power, thus feminism came into being because those who held that strength chose to exercise benevolence and reason over strength and subjugation. Their suffrage was dependent first and foremost on the benevolence of those who held political power. And like it or not, those who held political power at the time it was introduced were men.
As time progressed, at least in the West, democracy, and universal suffrage gave way to both physical and intellectual freedom for women. In the West during the twentieth century, its political structure (and the intellectual values it embodied) and the industrial revolution it spawned ushered in a new era for women, giving them choices they had not previously had, by and large, since the beginning of recorded history.
Women were finally free to choose between family, career or both. Rather than playing the role of the weaker, subservient sex women found their place beside men in society as intellectual equals. Physical strength was no longer a factor in the social structure of our civilization. An intellectual meritocracy came to be valued over a system based simply on brute force. This structure was the product of order created from benevolent strength.
But the rise of Marxism and feminism, particularly the rise of third-wave feminism has put ‘order’ at risk.
Without order, an intellectual meritocracy will once again become subservient to strength. It’s a hard pill for women and progressive liberals in general to swallow but it’s a fact.
Marxism and modern feminism work continuously towards a perfect world but ignore reality in the process. They forget an important lesson, born true repeatedly throughout history:
There is no utopia.
The best we can hope for in any civilization is for a society to be built and based on fundamental individual rights and freedoms. If we refuse this then we return to what we were before. This means rule by brute force which means the end of political and legal equality for women and the death of democracy itself.
The irony in the dilemma which the West now faces is that our demise, the continual erosion of a democratic, intellectual meritocracy, is by and large spurred on by the very people that our system was created to protect.
Feminists, both female and male, cry daily for more of the same poison which infects us.
More illegal and unscreened immigration. More tolerance of philosophies which are intolerant themselves. More invitations for an enemy created by a corrupt and immoral government to ignore our borders and live among us.
More cries for moral nihilism, the repression of speech (one of the cornerstones of their own suffrage) and the denial of fundamental biological reality.
More cries for the denial of basic math and the continuance of government-sponsored bread and circuses. More of everything which our civilization cannot sustain. More of everything which rots us from the core.
Subsequently, modern feminists decry the men of their own civilization as misogynists, racists, and intolerant while forgetting it was their own men who recognized that a society built on equal political rights for all was preferable to a society built on spoils taken by the strong.
They forget that it was the men they live among who valued justice over greed and force so much that they shed the old ways and took their place beside their women instead of in front of them. They do all of this while cheering on the invasion of their own countries by foreign men who view them as nothing more than chattel property. In doing so they have unwittingly invited the destruction of their own freedom.
While I sit next to my daughter I wonder what the future will hold for her. I have no desire to see her disenfranchised but the reality is that many of her own kind have chosen a future where reason has been rejected and instead, traded for thirty pieces of silver and whatever makes them feel good. Unfortunately, a world without reason is a world without order which is a world without choice. A world without choice is a world of brute force. And that’s a man’s world.
Ironic.
Benevolence and democracy should have ushered in an era of truth and reason but instead, they ushered in an era of denial and wishful thinking. Thus, democracy’s beginning will also be its end. What came from force will return to it.
For those of you paying attention and who can see the contradictions and the resultant decay, pray. Pray that what comes afterward will once again be benevolent.
- "This Is A Paralyzed Market": Hedge Fund Turnover Drops To All Time Low
Back in July, Canaccord analyst Brian Reynolds put out a contrarian piece which broke with numerous conventional wisdom norms about the state of the market, key among which was that traders are not complacent, but rather – in light of collapsing trading volumes, something which has plagued bank income statements in the past 2 quarters – simply paralyzed, as they no longer have a grasp of financial “logic” when it is all superceded by central bank liquidity injections, and as such most trades feel fake, forced and just part of the FOMO charade to avoid losing one’s job.
As Reynolds explained, “Investors are not complacent. Their stances range from extremely aggressive to bearish” and added that these “opposing forces have led to a compression of volatility. When stocks have rallied strongly, they have then been met with investor selling. When stocks sell off, the buybacks have picked up after the selling runs its course. That has been the case for more than eight years. Those forces have led to an equity bull market that moves higher in fits and starts, with some brief pullbacks from time to time. Given the positioning of equity investors and continued flows into credit, we do not see that pattern changing for some time.” Meanwhile, sandwiched inbetween these two trends, investors – both retail and institutional – find themselves in trade limbo, and the outcome is a gradual decline in trading volumes “which is more reflective of paralysis than complacency among equity investors.”
And while one can posit theories explaining this bizarre market until one is blue in the face, the most vivid confirmation of Reyonld’s “paralysis” thesis emerged in the latest batch of hedge fund 13Fs, which was analyzed by Goldman earlier this week, and noted here in “These Are The Top 50 Hedge Fund Long And Short Positions.”
In the report, Goldman highlighted various notable outliers, such as the latest record high in hedge fund leverage…
… coupled with the recent plunge in short interest (which as a share of S&P 500 market cap sits just below 2.0%, matching January of this year as the lowest level since 2012)…
… even as hedge fund “crowding” in a handful of top names hits an all time high:
But the most interesting to us, and the hedge fund community, we believe is the following chart, which shows that hedge fund portfolio turnover continued its downward trend and reached a new record low in the third quarter Across all portfolio positions, turnover registered 26% in 3Q. Turnover of the largest quartile of positions, which make up the vast majority of fund portfolios, fell to just 13%.
This means that once hedge funds have established positions, they no longer trade in and out, but simply lean back and let it ride. And why not: with the most popular hedge fund positions this year being also the best performing ones, namely Facebook, Amazon, Alibaba, Alphabet and Microsoft, why ever both selling. Indeed, as the next chart shows, the bulk of the collapsing turnover is largely due to tech stocks:
Of course, this strategy of loading up on winner and letting them ride is a two-edged sword. while it is the best strategy on the way up, it also becomes a quasi private equity strategy, in which the price formation is created on the margin with increasingly less volume. And, since such tech holdings are becoming ever more illiquid, the threat is what happens once the narrative shifts and instead of buying, hedge funds start to sell these most concentrated of growth names. One could say that a tech selloff is emerging as one of the more concerning black – or at least gray – swans in the market. In fact, we are did say just that…
Facebook, Amazon, Alibaba, Google, Microsoft are the 5 most widely held HF stocks. Tech selloff = black swan pic.twitter.com/XXJ6PRbwUP
— zerohedge (@zerohedge) November 22, 2017
https://platform.twitter.com/widgets.js
- As America Gave Thanks, Homelessness Set New Records In Major Cities All Over The Nation
Authored by Michael Snyder via The Economic Collapse blog,
If the economy is doing just fine, then why is homelessness at levels not seen “since the Great Depression” in major cities all over the country?
If the U.S. economy was actually in good shape, we would expect that the number of people that are homeless would be going down or at least stabilizing. Instead, we have a growing national crisis on our hands. In fact, within the past two years “at least 10 cities or municipal regions in California, Oregon and Washington” have declared a state of emergency because the number of homeless is growing so rapidly.
Things are particularly bad in southern California, and this year the Midnight Mission will literally be feeding a small army of people that have nowhere to sleep at night…
Thanksgiving meals will be served to thousands of homeless and near-homeless individuals today on Skid Row and in Pasadena and Canoga Park amid calls for donations and volunteers for the rest of the year.
The Midnight Mission will serve Thanksgiving brunch to nearly 2,500 homeless and near-homeless men, women and children, according to Georgia Berkovich, its director of public affairs.
Overall, the Midnight Mission serves more than a million meals a year, and Berkovich says that homelessness hasn’t been this bad in southern California “since the Great Depression”…
Berkovich said the group has been serving nearly 1 million meals a year each year since 2013.
“We haven’t seen numbers like this since the Great Depression,” she said.
And of course the official numbers confirm what Berkovich is claiming. According to an article published earlier this year, the number of homeless people living in Los Angeles County has never been higher…
The number of homeless people in Los Angeles has jumped to a new record, as city officials grapple with a humanitarian crisis of proportions remarkable for a modern American metropolis.
Municipal leaders said that a recent count over several nights found 55,188 homeless people living in a survey region comprising most of Los Angeles County, up more than 25% from last year.
If the California economy is truly doing well, then why is this happening?
We see the same thing happening when we look at the east coast. Just check out these numbers from New York City…
In recent years the number of homeless people has grown. Whereas rents increased by 18% between 2005 and 2015, incomes rose by 5%. When Rudy Giuliani entered City Hall in 1994, 24,000 people lived in shelters. About 31,000 lived in them when Mike Bloomberg became mayor in 2002. When Bill de Blasio entered City Hall in 2014, 51,500 did. The number of homeless people now in shelters is around 63,000.
For New York, this is the highest that the homeless population has been since the Great Depression, and city leaders are trying to come up with a solution.
Meanwhile, things are so bad in Seattle that “400 unauthorized tent camps” have popped up…
Housing prices are soaring here thanks to the tech industry, but the boom comes with a consequence: A surge in homelessness marked by 400 unauthorized tent camps in parks, under bridges, on freeway medians and along busy sidewalks. The liberal city is trying to figure out what to do.
Are you noticing a theme?
Homelessness is at epidemic levels all over the U.S., and this crisis is getting worse with each passing day. Some communities are trying to care for their growing homeless populations, but others are simply trying to force them to go somewhere else. They are doing this by essentially making it illegal to be homeless. In some cities it is now a crime to engage in “public camping”, to “block a walkway” or to create any sort of “temporary structure for human habitation”. These laws specifically target the homeless, and they are very cruel.
Many of us tend to picture the homeless as mostly lazy older men that don’t want to work and that instead want to drink or do drugs all day.
But the truth is that women and children make up a significant percentage of the homeless.
In fact, the number of homeless children in our country has increased by about 60 percent since the end of the last recession.
And there are thousands upon thousands of military veterans that are homeless. For example, a 34-year-old man named Johnny that served in the Marine Corps recently used his last 20 dollars to buy fuel for a woman that had run out of gas and was stranded along I-95 in Miami…
Pulled over on the side of I-95, McClure, 27, was approached by a homeless man named Johnny. She was apprehensive at first, but Johnny told her to get back into her car and to lock the doors while he walked to get her help. He went to a nearby gas station, used his last $20 fill a can and brought it back to fill up her car.
Grateful, but without a dollar to repay him, McClure promised she would come back with something.
In the weeks since, she’s returned to the spot along I-95 where Johnny stays with cash, snacks and Wawa gift cards. Each time she’s stopped by with her boyfriend, Mark D’Amico, they’ve learned a bit more about Johnny’s story, and become humbled by his gratitude.
Deciding that they wanted to do even more for Johnny, they started a GoFundMe page for him and have since raised approximately $250,000.
So it looks like there is going to be a happy ending to Johnny’s story, but the truth is that more people are falling into homelessness with each passing day.
If things are this bad now, how much worse will they become as the economy really starts slowing down? Already, we have shattered the all-time yearly record for retail store closings, and we still have more than a month to go. The following is from a CNN article entitled “Is This The Last Black Friday?”…
A record number of store closures – 6,735 – have already been announced this year. That’s more than triple the tally for 2016, according to Fung Global Retail and Technology, a retail think tank.
And there have been 620 bankruptcies in the sector so far this year, according to BankruptcyData.com, up 31% from the same period last year. Prominent names such as Toys R Us, Gymboree, Payless Shoes and RadioShack have all filed this year, and Sears Holdings (SHLD), which owns both the iconic Sears and Kmart chains, has warned there is “substantial doubt” it can remain in business.
Sadly, analysts are projecting that the number of store closings could be as high as 9,000 next year.
Yes, there are some areas of the country that are doing well right now, but there are many others that are not.
Let us always remember to have compassion on those that are struggling, because someday we may be the ones that end up needing some help.
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Michael Snyder is a Republican candidate for Congress in Idaho’s First Congressional District, and you can learn how you can get involved in the campaign on his official website. His new book entitled “Living A Life That Really Matters” is available in paperback and for the Kindle on Amazon.com.
- Automation Nation: America's Largest Employer 'Secretly' Tests Self-Driving Floor-Scrubbers
Dark and difficult times lie ahead. Soon, America’s middle class must come to the realization that the country’s largest employer–Walmart is quietly testing an army of robots that soon will replace their jobs. The latest installment is an autonomous floor scrubber being tested at five store locations near the company’s headquarters in Bentonville, Arkansas.
The autonomous cleaning robot dubbed Emma, an A.I. navigated system capable of operating floor care equipment on nightshifts, is able to clean the entire store front without human interaction. San Diego-based startup Brain Corp., works with the Defense Advanced Research Projects Agency (DARPA) to develop novel machine learning algorithms that focus on taking jobs from middle class Americans. BrainOS is the company’s flagship product that enables robots to “perceive their environments, control motion, and navigate using visual cues and landmarks, while seeing and avoiding people and obstacles”.
A Walmart spokesperson, Kory Lundberg, confirmed to Chip Cutter, Managing editor at LinkedIn, that Walmart was indeed testing the robotic scrubbers, but said it is still in a “proof of concept” phase.
“We’re always testing new ideas and new technology,” Lundberg said. “We still have a lot more to learn about how this technology will work best for our different retail locations.”
According to LinkedIn, here are more details documenting the ‘secret tests’ of robotic scrubbers at various Supercenters..
Multiple employees who work at the retailer’s 24-hour Supercenter in Pineville, Mo., about 20 minutes north of Walmart’s home office, confirmed the use of the device to me this week, saying it had been tested in their store for about a month this fall.
In a private Facebook group earlier this month, someone who claims to be a worker at the Pineville store shared a photo of the greyish vehicle making a turn near a display for $78 deer feeders. No one is seated in the driver’s seat, and two “caution, cleaning in progress” banners are shown on both sides of the device. An ICE logo is also affixed; Holland, Mich.-based International Cleaning Equipment, a Brain Corp. partner, manufactures the scrubbing equipment itself.
In October, Walmart said it’s rolling out self-scanning robots in more than 50 U.S. stores to replenish inventory on shelves. The company is determined to automate the daily tasks of its workers, but said the bots would not lead to a drop in headcount.
With the retail apocalypse in full-swing, “retailers are looking for opportunities to automate processes and stop paying people,” said Richard A. Feinberg, a professor of consumer sciences and retailing at Purdue University, who forecasts automation could save retailers such as Walmart.
He also noted, “it changes the nature of the jobs; it may not mean fewer jobs, it may mean they can retrain the people to do things that are more useful for them, business wise,” he said. “It wouldn’t surprise me if it reduces headcount, but I don’t know.”
More importantly, a Walmart spokesperson said “the maintenance team is actually quite ‘excited’ to work with new technology.” What they don’t know is that their jobs will be obsolete in a few years after the 50 state rollout commences. All fun in games today until someone gets a pink slip.
As Fox News reports, Walmart is not the only company testing this technology..
According to Phil Duffy, VP of Innovation & Marketing for Brain Corporation, the company is currently working with approximately 50 malls and big box retailers across the U.S.
“We are also in airports, educational campuses, corporate campuses and industrial sites. In addition, we will be launching in Japan, through our partner, SoftBank Robotics, by summer 2018,” Duffy said.
In a preview of what’s to come, Brain Corp., funded by DARPA is leading the charge through Walmart, America’s largest employer to automate low skill jobs. The middle class or what is left of them have many dark and difficult days ahead, as we expect this trend to gain momentum in the coming years.
- More Evidence BoJ Desperate To Steepen Yield Curve
Two days ago, we highlighted how Bank of Japan officials have been briefing Reuters about reducing its monetary stimulus earlier than markets had been expecting – around 1Q 2018 rather than later in the year. In particular, the yield curve control (YCC) is likely to be eased from the current target of zero percent for 10-year JGB yields. It seems the BoJ became frustrated that markets had failed to respond to his hints about the “reversal rate”, i.e. that central banks can lower rates too far and damage financial institutions and the provision of credit in the economy. The one (former) BoJ official who was prepared to go on the record explained.
“Reversal rate is a pretty shocking word to come out of the mouth of a BOJ governor. It’s unthinkable the BOJ would insert it in Kuroda’s speech without any policy intention,” said Takahide Kiuchi, who was a BOJ board member until July.
The BOJ may allow long-term rates to rise more by shifting its long-term rate target to five-year yields from 10-year yields around the first quarter of next year, Kiuchi said. “The BOJ could put a positive spin on the move by saying it can more effectively reflate growth by keeping short-term borrowing costs low while allowing longer yields to rise.”
We might assume that the BoJ is becoming obsessed with steepening the yield curve and we got confirmation of this overnight. A story which flashed up on Bloomberg about the BoJ tapering bond purchases at the super long end.
BOJ Bond Cut Shows Desire to Steepen Yield Curve: Merrill Lynch
Bank of Japan’s slight cut in buying of bonds maturing in more than 25 years suggests its desire to steepen the yield curve, says Shuichi Obsaki, chief rates strategist for Japan at Bank of America Merrill Lynch.
Yield curve has been flattening of late and the BOJ is probably sending a message that it wants the super-long yield curve to steepen.
In terms of the mechanics, the BoJ today cut its purchases of bonds maturing in more than 25 years to 90 billion Yen from 100 billion yen at the previous offer on 17 November 2017. This was the first cut since March. JGB yields rose on the news in Friday trading, as Bloomberg reports.
JGB yields rose across the curve after the BOJ trimmed outright debt purchase in the super long sector.
BOJ reduced purchases of bonds with maturity of more than 25 years by 10b yen to 90b yen; it was the bank’s first cut in the sector since March.
Purchase volume for the 10-to-25-year zone was unchanged at 200b
JGB futures closed regular day down 0.13 at 151.02; key futures suffered the biggest intraday loss since Oct. 2, losing as much as 0.21
10-year cash bond yield rises 0.5bp to 0.025%; 20-year yield gains 1bp to 0.57%; 30-year climbs 2.5bps to 0.830%
Falls in JGB futures were exaggerated by sharp rise on Wednesday
It appears that the BoJ had become panicked by the yield curve flattening after reports that the government might reduce the issuance of super-long bonds in the next fiscal year, i.e. to March 2019. On Wednesday, there was a meeting between officials from Japan’s Ministry of Finance and primary dealers to discuss the plans for issuance in the next fiscal year.
While inflation is remains far below its 2% target, the BoJ is being forced into a policy reversal due to the damage its NIRP/ZIRP policy is doing to the financial sector. However, it’s portraying its defeat as a victory via the supposed reflationary signalling of steepening yield curve. It’s utter nonsense and a shameful reflection on the depths which central bankers will stoop to.
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