Jul 17

Today’s News 17th July 2016

  • Surging "Intercommunity Confrontations" In France Mean "Civil War Is Inevitable"

    Submitted by Yves Mamou via The Gatestone Institute,

    • For French President François Hollande, the enemy is an abstraction: "terrorism" or "fanatics".

    • Instead, the French president reaffirms his determination to military actions abroad: "We are going to reinforce our actions in Syria and Iraq," the president said after the Nice attack.

    • So confronted with this failure of our elite who were elected to guide the country across nationals and internationals dangers, how astonishing is it if paramilitary groups are organizing themselves to retaliate?

    • In France, the global elites made a choice. They decided that the "bad" voters in France were unreasonable people too stupid to see the beauties of a society open to people who often who do not want to assimilate, who want you to assimilate to them, and who threaten to kill you if you do not. The elite took the side against their own old and poor because those people did not want to vote for them any longer. They also made a choice not to fight Islamism because Muslims vote collectively for this global elite.

    "We are on the verge of a civil war." That quote did not come from a fanatic or a lunatic. No, it came from head of France's homeland security, the DGSI (Direction générale de la sécurité intérieure), Patrick Calvar. He has, in fact, spoken of the risk of a civil war many times. On July 12th, he warned a commission of members of parliament, in charge of a survey about the terrorist attacks of 2015, about it.

    French police shoot dead a Tunisian-born Islamist terrorist who murdered 84 people in Nice, France, July 14, 2016. (Image source: Sky News video screenshot)

    In May 2016, he delivered almost the same message to another commission of members of parliament, this time in charge of national defense. "Europe," he said, "is in danger. Extremism is on the rise everywhere, and we are now turning our attention to some far-right movements who are preparing a confrontation".

    What kind of confrontation? "Intercommunity confrontations," he said — polite for "a war against Muslims." "One or two more terrorist attacks," he added, "and we may well see a civil war."

    In February 2016, in front of a senate commission in charge of intelligence information, he said again: " We are looking now at far-right extremists who are just waiting for more terrorist attacks to engage in violent confrontation".

    No one knows if the truck terrorist, who plowed into the July 14th Bastille Day crowd in Nice and killed more than 80 people, will be the trigger for a French civil war, but it might help to look at what creates the risk of one in France and other countries, such as Germany or Sweden.

    The main reason is the failure of the state.

    1. France is at War but the Enemy is Never Named.

    France is the main target of repeated Islamist attacks; the more important Islamist terrorist bloodbaths took place at the magazine Charlie Hebdo and the Hypercacher supermarket of Vincennes (2015); the Bataclan Theater, its nearby restaurants and the Stade de France stadium, (2015); the failed attack on the Thalys train; the beheading of Hervé Cornara (2015); the assassination of two policemen in Magnanville in June (2016), and now the truck-ramming in Nice, on the day commemorating the French Revolution of 1789.

    Most of those attacks were committed by French Muslims: citizens on their way back from Syria (the Kouachi brothers at Charlie Hebdo), or by French Islamists (Larossi Abballa who killed a police family in Magnanville last June) who later claimed their allegiance to Islamic State (ISIS). The truck killer in Nice was Tunisian but married to a French woman, whith whom he had three children together, and lived quietly in Nice until he decided to murder more than 80 people and wound dozens more.

    After each of these tragic episodes President François Hollande refused to name the enemy, refused to name Islamism — and especially refused to name French Islamists — as the enemy of French citizens.

    For Hollande, the enemy is an abstraction: "terrorism" or "fanatics". Even when the president does dare to name "Islamism" the enemy, he refuses to say he will close all Salafist mosques, prohibit the Muslim Brotherhood and Salafist organizations in France, or ban veils for women in the street and at university. No, instead, the French president reaffirms his determination for military actions abroad: "We are going to reinforce our actions in Syria and Iraq," the president said after the Nice attack.

    For France's president, the deployment of soldiers in the homeland is for defensive actions only: a deterrent policy, not an offensive rearmament of the Republic against an internal enemy.

    So confronted with this failure by our elite — who were elected to guide the country through national and international dangers — how astonishing is it if paramilitary groups are organizing themselves to retaliate?

    As Mathieu Bock-Côté, a sociologist in France and Canada, says in Le Figaro:

    "Western elites, with a suicidal obstinacy, oppose naming the enemy. Confronted by attacks in Brussels or Paris, they prefer to imagine a philosophical fight between democracy and terrorism, between an open society and fanaticism, between civilization and barbarism".

    2. The Civil War Has Already Begun and Nobody Wants to Name It.

    The civil war began sixteen years ago, with the second Intifada. When Palestinians executed suicide attacks in Tel Aviv and Jerusalem, French Muslims began to terrorize Jews living peacefully in France. For sixteen years, Jews — in France — were slaughtered, attacked, tortured and stabbed by French Muslim citizens, supposedly to avenge Palestinian people in the West Bank.

    When a group of French citizens who are Muslims declares war on another group of French citizens who are Jews, what do you call it? For the French establishment, it is not a civil war, just a regrettable misunderstanding between two "ethnic" communities.

    Until now, no one wanted to establish a connection between these attacks and the murderous attack in Nice against people who were not necessarily Jews — and name it as it should be named: a civil war.

    For the very politically correct French establishment, the danger of a civil war will begin only if anyone retaliates against French Muslims; if everyone just submits to their demands, everything is all right. Until now, no one thought that the terrorist attacks against Jews by French Muslims; against Charlie Hebdo's journalists by French Muslims; against an entrepreneur who was beheaded a year ago by a French Muslim; against young Ilan Halimi by a group of Muslims; against schoolchildren in Toulouse by a French Muslim; against the passengers on the Thalys train by a French Muslim, against the innocent people in Nice by an almost French Muslim were the symptoms of a civil war. These bloodbaths remain seen, to this day, as something like a tragic misunderstanding.

    3. The French Establishment Considers the Enemy the Poor, the Old and the Disappointed

    In France, who most complains about Muslim immigration? Who most suffers from local Islamism? Who most likes to drink a glass of wine or eat a ham-and-butter sandwich? The poor and the old who live close to Muslim communities, because they do not have the money to move someplace else.

    Today, as a result, millions of the poor and the old in France are ready to elect Marine Le Pen, president of the righ-wing Front National, as the next president of the Republic, for the simple reason that the only party that wants to fight illegal immigration is the Front National.

    Because, however, these French old and poor want to vote for the Front National, they have become the enemy of the French establishment, right and left. What is the Front National saying to these people? "We are going to restore France as a nation of French people". And the poor and the old believe it — because they have no choice.

    Similarly, the poor and the old in Britain had no choice but to vote for Brexit. They took the first tool given them to express their disappointment at living in a society they did not like anymore. They did not vote to say, "Kill these Muslims who are transforming my country, stealing my job and soaking up my taxes". They were just protesting a society that a global elite had begun to transform without their consent.

    In France, the global elites made a choice. They decided that the "bad" voters in France were unreasonable people too stupid, too racist to see the beauties of a society open to people who often do not want to assimilate, who want you to assimilate to them, and who threaten to kill you if you do not.

    The global elites made another choice: they took the side against their own old and poor because those people did not want to vote for them any longer. The global elites also chose not to fight Islamism, because Muslims vote globally for the global elite. Muslims in Europe also offer a big "carrot" to the global elite: they vote collectively.

    In France, 93% of Muslims voted for the current president, François Hollande, in 2012. In Sweden, the Social Democrats reported that 75% of Swedish Muslims voted for them in the general election of 2006; and studies show that the "red-green" bloc gets 80-90% of the Muslim vote.

    4. Is the Civil War Inevitable? Yes!

    If the establishment does not want to see that civil war was already declared by extremist Muslims first — if they do not want to see that the enemy is not the Front National in France, the AfD in Germany, or the Sweden Democrats — but Islamism in France, in Belgium, in Great Britain, in Sweden — then a civil war will happen.

    France, like Germany and Sweden, has a military and police strong enough to fight against an internal Islamist enemy. But first, they have to name it and take measures against it. If they do not — if they leave their native citizens in despair, with no other means than to arm themselves and retaliate — yes, civil war is inevitable.

  • Friday Night Lights – Another Brexit moment for FX

    It seems that such events are always planned for the weekend.  News of the attempted Turkish coup reached FX investors just hours before the close.  

    Turkey’s currency is an exotic currency, commonly traded against USD, EUR, and JPY.  Near the close, a huge spike in USD/TRY:

    Just as FX traders were worried about not having another Brexit moment for a few more years, only weeks later here’s another.  But this time it happened just before Friday’s close at 5pm NYT so we’ll see how the market opens Sunday night.  

    EUR/USD sold off on the news as well, but only reached its channel lows.

    From CNBC: 

    The U.S. dollar gained as much as 5.5 percent against the Turkish lira after a group within Turkey’s military apparently attempted to overthrow the government on Friday.

    The dollar was last up 4.72 percent against the lira.

    It seems this FX event is a sign, that Europe is going to be full of “Brexit” moments in the coming years, and that FX is going to be the market defining this next epoch of investing.  

    For those who don’t understand Forex, the above chart represents the US Dollar against the Turkish Lira, that means when you see a spike UP, it means US Dollar going UP and Turkish Lira going DOWN.  

    So, here’s another boost to the good ol’ USD, who is now being accused of the coup itself.

    FX traders patiently wait for markets to open, 24 hours from now.

    To learn more about Forex, checkout Splitting Pennies – Understanding Forex the book. 

  • Erdogan's Arch-Enemy Accuses Turkish President Of Staging Coup, Compares Him To Hitler

    Long before Turkey’s president Recep Tayyip Erdogan accused Fethullah Gulen, a Turkish cleric who lives in self-imposed exile on 1857, Mt.Eaton Road in  Saylorsburg, Pennsylvania, last night and again today of being the “terrorist” mastermind behind Friday’s failed coup attempt and demanding – unofficially, on prime time TV but not via diplomatic channels – that the US extradite the 77 year old, he was doing precisely that. For years, Erdogan had used the cleric as a scapegoat punching bag, who had somehow managed to create an entire “parallel state” in Turkey which was just waiting for its opportunity to pounce and snatch Turkey from Erdogan. Hence the perpetual (fake) fear of coups. Hence the public displays of (fake) paranoia. Hence the relentless – and all too real – concentration of power.

    And as many expected, Erdogan once again accused Gulen of being responsible for the Friday coup, no matter how ridiculous such an allegation sounded. This time Turkey went so far as accusing the US of being “behind the coup” for harboring Gulen.  “Today, after this coup attempt, I’m once again calling on you, I’m saying: Extradite this man in Pennsylvania to Turkey now,” Erdogan said on Saturday in televised remarks from Istanbul in a personal appeal to President Barack Obama. Turkey’s secretary of labor, Suleyman Soylu, went one better and told TV channel Haberturk: “The US is behind this coup.”

    As for Gulen’s position, he had denied as recently as yesterday, the accusations and said Saturday morning in an emailed statement through a spokeswoman that he denounced the overnight coup attempt. In a video released by the New York Times, a man appearing to be a doctor measured Mr. Gulen’s blood pressure, possibly to point out the cleric’s ailing health. 

    “I don’t know if they are my followers, but because of all things that have taken place (in Turkey) they may have been sympathetic…But honestly, I don’t know any of them,” Mr. Gulen said in the video, shown apparently sitting on a couch in his Pennsylvania home.

    However, for the best explanation of Gulen’s position, one which incidentally also is accurate in describing what happened in Turkey on Friday night, we go to the FT, which was granted a rare interview from Gulen’s residence in rural Pennsylvania and where a “frail Mr Gulen” said accusations by Mr Erdogan that he had masterminded the uprising were absolutely groundless.

    In fact, as the FT reports, Gulen “has tried to turn the accusation against his political rival by suggesting that Mr Erdogan’s ruling AKP party had staged the uprising.“

    “I don’t believe that the world takes the accusations made by president Erdogan [against me] seriously,” the moderate Islamic preacher said from a room inside his home at the Golden Generation Worship and Retreat Center, nestled in the rolling hills of the Pocono Mountains..

    An aerial view of Gulen’s Golden Generation Worship and Retreat Center in rural PA.

    “There is a possibility that it could be a staged coup [by Mr Erdogan’s AKP] and it could be meant for further accusations” against Gulenists and the military, he said.

    Considering just how poorly executed the coup was, and how much Erdogan stood to gain by crushing it with the help of a Skyped conversation as he “heroically” flew back to Istanbul, to be followed shortly thereafter by the arrest of nearly 3000 judges and prosecutors, we have a feeling Gulen is spot on in which assessment.

    Gulen then said that he was not worried about being deported from America despite Turkey putting further pressure on the US government to extradite him in the aftermath of Friday’s coup attempt. He said Erdogan’s calls for his extradition were just his latest bluff, as he compared the Turkish president’s political tactics to those of Adolf Hitler’s Nazis in 1940s Germany.“

    It is very clear that there is intolerance among the leadership of the ruling party and the president,” Mr Gulen said, speaking in Turkish and communicating with reporters through a translator.

    “They have confiscated properties and media organisations, broken doors and harassed people in a fashion similar to Hitler’s SS forces,” Mr Gulen said, as he described how his followers in Turkey had been mistreated over recent years by Mr Erdogan’s party.

    Come to think of it…

    Then again, maybe Erdogan will get his witch after all.

    The FT adds that in a sign of the rising tension around Mr Gulen, about a dozen people started assembling outside his compound around noon on Saturday, shattering the rural calm that usually surrounds the residence. “The US should stop protecting him,” screamed a woman wearing a headscarf and waving a Turkish flag in her right hand and a flag portraying Mr Erdogan in the other. “Gulen is a criminal,” she shouted as protesters gathered outside the Imam’s residence.

    Meanwhile, Pennsylvania state troopers and a small group of armed private security forces hired by Mr Gulen’s centre were keeping the protests at bay. Gulen told reporters that he had not received any communications from the US government about a potential extradition.

    Here Alp Aslandogan, a media adviser to Mr Gulen, repeated precisely what we said earlier today: Erdogan wants “the best of both worlds, accusing him of being a puppet for the US and also asking the US to extradite him,” Mr Aslandogan said.

    Gulen, who is aged 77, was visibly weak. He suffers from diabetes and heart disease, according to his doctor. The preacher, who has been living in self imposed exile in Pennsylvania since 1999, lives in modest conditions despite the vast expanse of the complex. The FT was able to access his bedroom and praying areas, which were ornately decorated with Islamic art and several Turkish flags.

    Despite accusing Mr Erdogan’s ruling party of having put democracy at risk in Turkey, Gulen said that he was against all kinds of military coups, as he had been a victim of such uprises in the past.

    * * *

    Meanwhile, Erdogan lives in a brand new palace which cost more than $600 million to build, with 1.6 million square feet of floorspace, 1,000 – yes, really – rooms, features thousands of trees imported from Italy at a cost of up to $10,000 each; the taxpayer-footed electricity bill from the palace will run $313K/month.

  • 'Black Lives Matter' Organizer "Triggered" By White People, Demands Money For Being A "Fat, Black Bitch"

    Authored by Paul Joseph Watson, originally posted at InfoWars.com,

    According to ‘Black Lives Matter’ organizer Ashleigh Shackelford, white people aren’t welcome at Black Lives Matter rallies and instead should just hand over “reparations” to black people so that they can purchase new cellphones and laptops.

    In an article for ‘Wear Your Voice’, an “intersectional feminist media” outlet, Shackelford says that she finds the presence of white people at Black Lives Matter rallies “triggering,” and that black people are “frightened” by whites, adding that their roles should be confined to acting as human “buffers against the police”.

    “Why are you going to a protest when you’re the oppressor?” asks Shackelford, adding, “WHITE PEOPLE ARE KILLING US. So when I see white people show up to rally excited and smiling, ready to march like it’s a hobby — I’m disgusted and absolutely fucking livid….I’m ready to fight.”

     

    Decrying the fact that white people are promoting a message of love and unity in the spirit of Martin Luther King, Shackelford complains that, “White people are 400 years too fucking late for a round of applause for a damn tweet with a hashtag, or for showing up to a damn rally.”

    She then pushes the demented dogma that white people living today owe blacks “reparations” for slavery (only 1.4 percent of white Americans owned black slaves at the height of slavery).

    “Nothing you have is yours. Let me be clear: Nothing you have is yours. Also, Let me be see through: Reparations are not donations, because we are not your charity, tax write off, or good deed for the day. You are living off of stolen resources, stolen land, exploited labor, appropriated culture and the murder of our people. Nothing you have is yours,” writes Shackelford.

    “Y’all spent hundreds of years selling, mutilating, raping and beating our bodies and labor but you think money doesn’t matter to our freedom and liberation? Cute. Write me a check for this shade because it comes with 400 years of trauma,” she adds.

    Shackelford wants white people to give blacks money so that they can buy cellphones, laptops and land, asserting, “Be ready to write checks and give up your car keys.”

    She then includes a link to her personal Paypal account at the end of the article asking people to send money to support her “emotional and intellectual labor.”

    “Whiteness operates in a way that means that using your privilege “for good” often requires Black folks to still be a position to be “saved” or “in need.” We don’t need white saviorism. We don’t need white people to speak for us. We don’t even really need white people to show up to rallies. We need our reparations, we need intentional disruption that involves high risk and we need y’all to stop playing,” concludes Shackelford, while also straying into extremist rhetoric by asking whites, “Are you willing to kill for us?”

    Shackelford describes herself as a “queer, nonbinary Black fat femme writer, artist, and cultural producer,” because of course she does.

    In some of her other articles, she chastises black men for dating white women, whines about the “backlash” she gets for being “fat and visible” and complains about the “body positivity” movement being too “white”.

    In an article entitled Fuck You, Pay Me: Reparations for Fat Black Bitches and Everything We Provide, Shackelford demands that she should be paid money for being a ‘fat black bitch’.

    “FUCK YOU. PAY ME. Pay me a check, pay me consistently, provide me safe housing, offer me a job with benefits, run me those Beyonce tickets, finance my clothes and wigs and aesthetics, cultivate accessibility to spaces and provide seats that fit me, see and validate my humanity,” she demands.

    Shackleford’s role as a ‘Black Lives Matter’ organizer comes as no surprise whatsoever given how divisive the group has become, even to the point of pushing segregation by banning white people from BLM events and rallies.

    Instead of promoting a message of unity and understanding, BLM is appealing to extremist, fringe elements of the far-left and has been completely taken over by social justice warriors like Shackleford, whose absurd and irrational drivel will thankfully ensure the entire movement’s eventual disappearance into obscurity.

  • "This Is Going To Get Very Ugly" – Former Top CIA Officer Says "Obama Has Lost Control Of The Middle East"

    With Thursday’s tragic mass killing by a resclusive, truck-driving Tunisian maniac in Nice having been violently drowned out by the frentic late Friday news of a failed (and perhaps staged) coup in Turkey, the news cycle has once again shifted its attention away from a far greater threat to the global economy than whether Erdogan can concentrate even more power in his grasp. Namely, both lone-wolf and organized terrorism in Europe (and elsewhere). And according to at least one CIA field commander, Gary Bernsten, it is all Obama’s fault.

    As the Hill reports, the decorated former CIA career officer who served in the Directorate of Operations between October 1982 and June 2005, said on Friday that Obama has lost control of the Middle East following attacks in France that left at least 84 dead.  “This is going to get very, very ugly,” Gary Bernsten said on Fox & Friends Friday.

    “The president of the United States, as Newt Gingrich has stated, has failed in his responsibilities to defend the United States. He has lost control of the Middle East. It is in flames, and that is what he will leave when he leaves office.”  One can also make the argument that it is not so much Obama, as his first secretary of state, the person who in less than 4 months may be America’s next president.

    We wonder what Bernsten would add after last night’s even more disturbing events in Turkey. As we just witnessed over the past 24 hours, the Middle East is indeed in flames, and what’s worse, the US has zero control. As Ali Watkins reported overnight,  US officials were caught completely off guard by Friday’s attempted Turkish coup.

    The State Department scrambled to alert citizens in Turkey, urging them to shelter in place and check in with family members in the U.S. The White House said President Obama had spoken with Secretary of State John Kerry, and both urged “all parties” in Turkey to support the democratically elected government of President Recep Tayyip Erdogan and “avoid violence or bloodshed,” but the statement avoided using the word “coup.” 

     

    Across Washington, it was clear that responses were purely reactionary — it took more than two hours after first reports emerged of the violence for the White House to make any public statement. In the hours immediately following the attempted overthrow, officials across the White House, State Department and Pentagon simply said they were monitoring as the situation unfolded. If the U.S. was indeed blindsided by the attempted overthrow Friday afternoon, it will have to take a long, hard look at why such a consequential event — with a NATO ally, no less— took them by such surprise.

     

    As of Friday night, the attempted coup had “no impact” on the U.S.’s military operations in the country, a U.S. official told BuzzFeed News. “[U.S.] air ops have continued from Incirlik. Literally birds in the sky.”

    As of Saturday morning, however, things are very different.

    Ironically, this time Obama lucked out on a major change in the geopolitical arena (perhaps because the entire coup attempt was staged or simply because it was very disorganized); but what happens when this – or another-  key US ally and NATO member undergoes a military coup. Will the US once again have no response? As of this moment, the CIA officer’s assessment is absolutely spot on.

    He had some parting thoughts about “eliminating” the ISIS threat: “We can take care of these ISIS thugs in about a month.” One still wonders why that hasn’t happened…

  • C.I.A. – Controlling It All

    Via The Daily Bell,

    How the CIA Hoodwinked Hollywood… Since its inception, the agency has wooed filmmakers, producers, and actors in order to present a rosy portrait of its operations to the American public.

     

    –Atlantic

    This is a good article by the Atlantic, a neo-con publication that aspires to be a “thought publication.”

    This article rehashes the history of the CIA in Hollywood and, in fact, is fairly comprehensive and touches on a number of compelling points.

    More;

    The CIA has a long history of “spooking the news,” dating back to its earliest days when the legendary spymaster Allen Dulles and his top staff drank and dined regularly with the press elite of New York and Washington, and the agency boasted hundreds of U.S. and foreign journalists as paid and unpaid assets.

     

    In 1977, after this systematic media manipulation was publicly exposed by congressional investigations, the CIA created an Office of Public Affairs that was tasked with guiding press coverage of intelligence matters in a more transparent fashion.

     

    The agency insists that it no longer maintains a stable of friendly American journalists, and that its efforts to influence the press are much more above board. But, in truth, the intelligence empire’s efforts to manufacture the truth and mold public opinion are more vast and varied than ever before. One of its foremost assets? Hollywood.

    This is an honest appraisal so far as it goes. As is the article’s conclusion:

    With few exceptions, Hollywood has long functioned as a propaganda factory, churning out jingoistic revenge-fantasy films in which American audiences are allowed to exorcise their post-9/11 demons by watching the satisfying slaughter of countless onscreen jihadis.

     

    This never-ending parade of square-jawed secret agents and bearded, pumped-up commandos pitted against swarthy Muslim madmen straight out of central casting has been aided and abetted by a newly emboldened CIA all too happy to offer its “services” to Hollywood.

    The article, thousands of words long, still managed to miss some important points, however.

    It doesn’t provide us with much in the way of a frame of reference. The control that the CIA exercises over Hollywood is multiplied many times by the control the CIA exercises over the communications industry generally.

    At the top of the CIA, executives are responsive to the City of London. Intelligences agencies were manufactured by banking families initially.

    Only later on, were their functions laid off onto governments. Now the cash flow comes from tax dollars, but the agencies themselves are still controlled out of the City.

    This goes for other countries as well, including Israel, which was created by the City, which still runs it.

    It is probably not too much of an exaggeration to say that its spooks run both Facebook and Google – especially given that the CIA invested in both companies when they were just beginning.

    Basically, the Atlantic article makes it sound as if the CIA’s control over Hollywood is evolutionary and even voluntary. This is to misstate the way the CIA works.

    Surreptitious intel operations have doubtless been in charge of Hollywood since its inception. If anyone doubts that, simply take a look at the movies Hollywood produced in the 1930s and especially in the 1940s.

    These days, Hollywood movies have staked their main franchise on superhero movies.

    These superheroes fly high in the sky fighting “bad guys” and determining whether or not the world will be safe and function properly.

    They are above the law and gratitude is always due to them for their exploits.

    The resemblance to the coming implementation of technocracy is undeniable.

    In the world, as it is to be, technocrats running vast corporations will make decisions affecting millions. In fact, they already do.

    Conclusion: This sort of organization and its privileges will not seem unusual to those regarding them. The parallels to today’s movies will already have desensitized people to what is occurring. This is the fundamental paradigm of modern Hollywood, the basic assertion of control.

  • Saturday Humor: Ten Years Later

    Presented with no comment, since we could not have said it any better…

     

    Source: @KirkDBorne

  • "Janet Yellen Sounds Like A Fumbling Idiot No Matter What She Does"

    Via FinancialRepressionAuthority.com,

    FRA Co-Founder Gordon T.Long and Jeffrey Snider, Head of Global Investment Research at Alhambra Investment Partners discuss earnings, the Chinese Yuan, Japanese Yen and the falling credibility of central banks.

     

    EARNINGS

    “It is no doubt that earnings have been under-performing.”

    What’s even more concerning is that not even is the top line falling off, but the cash flow is falling dramatically and this impacts credit along with everything else. With no earnings and no cash flow it puts us in a high risk environment. The only thing that has been holding up the market has been excessive corporate buybacks which has come out of cash flow, and to a lesser degree, borrowing. But to borrow is tough when you don’t have the cash flow to justify the credit ratings.

    “How long can buybacks continue to support a market which is standing on a fundamentally flawed premise?”

     

    We have had 4 to 5 quarters of falling revenue but the US market seems to ignore it. At some point reality has got to set in. But it is also important to note that trade problems are a systemic factor to the decline in earnings. China’s imports are down 17% year over year, but these imports are coming from basically the emerging markets and commodity markets. They have also borrowed upwards of 9 trillion USD in the last 7 years that has suddenly gotten very expensive for them, I think there is more pain to come.

    CHINESE YUAN

    “The health of the Yuan is tied into the global economy and the fact that the global economy is stumbling.”

    Less growth in China combined with less growth around the world again increases financial risk which fuels more reluctance to funnel dollars into China; it has become a vicious cycle. The Chinese have no choice but to continue going in one direction, they are in a rock in a hard place. As the Chinese Yuan has been falling, the Yen has been rising in strength. This has become a huge issue for Japan to add to their already lost list of issues to deal with. A fracture is likely around the corner, China and Japan cannot go long without devaluing the Yen.

    The markets are reassessing what central banks can actually do. And what markets found was that central banks aren’t actually as powerful as everyone believes them to be and Japan is a perfect example of that. No matter what the BOJ does that Yen continues to move on up. It fits into the paradigm of the economy, the financial risk, everyone reevaluating what central banks are capable of etc. The markets are reevaluating central banks because they see that a tight money environment despite efforts from central banks to fuel stimulation.

    “Some major European bank stocks are indicative of an incoming banking crisis. We see already low interest rates around the world getting lower with each passing day; this is indicative of tight money conditions. Low rates are not stimulating.”

    TROUBLING MATTERS OF DEBATE

    “Most troubling thing to me currently is that there are not many answers available.”

    What I see is an unstable global currency regime which we are completely unprepared for. There is no solution that has been presented that would allow for a stable currency to take over Euro dollars which clearly doesn’t work. Generally the central banks can fix liquidity problems, but they cannot fix solvency problems. We see that the credit cycle has turned from non-performing loans so on and so forth.

    The idea behind QE for Japan, America and Europe was to kick start a robust recovery. Now that central banks has lost credibility as well as support.  Then you have all the unintended consequences that come with almost zero money. We have nearly zero price discoveries and risk is greatly mispriced.

    “Policy makers and economists have simply run out of ideas.”

    Desperation is a big role of why markets are reevaluating central banks. If we go back 20 years where Alan Greenspan was a genius and he didn’t even do anything, all he did was talk and he made a career out of not talking. No matter what he did he was taken as a genius. Whereas 20 years later, Janet Yellen sounds like a fumbling idiot no matter what she does. All her actions come across as desperate because the credibility has been blown away. The Fed has been forced into action and by being forced into action it has only highlighted what the Fed can’t do.

    “Resource allocation is the main benefit of price discovery; it is the life blood of the economy. The more we damage price discovery the more fatal situations will become.”

    We need to look at this as an opportunity in the long run. Now that the power of central banks has come to surface and credibility has been shot, it in turn opens the door to credible solutions. The fact of the matter is that the economy is nothing like what it should be and people know that something is wrong and change is needed.

  • How A Google April Fools' Joke Unleashed The Zombie Apocalypse

    Remember the “Google Maps Pokemon Challenge”? Probably not. It was a one time event that took place on April Fools day in 2014.

    This is how Google explained it.

    Dozens of wild Pokémon have taken up residence on streets, amidst forests and atop mountains throughout Google Maps.

     

    To catch ’em all, grab your Poké Ball and the newest version of Google Maps for iPhone or Android. Then tap the search bar, “press start,” and begin your quest.

     

    And, follow Google Maps on Google+, Facebook or Twitter for hints and tips for the most dedicated trainers.

    The ad in question:

     

    Many laughed and quickly brushed it aside… but not Niantic Labs, a software development company founded in 2010 incidentally as one of Google’s own internal startups. Niantic – which all the way back in 2012 was developing location-based mobile games – was spun off as an independent entity in September 2015 and less than a year later released Pokemon Go together with Ninentdo (quickly resulting in Nintendo becoming the most-traded stock in Japanese history).

    And while we are delighted that Niantic CEO John Hanke has been unquestionably successful with his adaptation of an “April Fools” joke in the form of Pokemon Go, we are a little concerned that he has also unleashed the Zombie Apocalypse.

    Dont believe us? This is what USA Today wrote today, when the sighting of a rare Pokemon made hundreds of New Yorkers into Central Park-stomping zombies.

    On the one hand, this might be video evidence of people officially going insane. But, on the other hand, it’s also a Vaporeon, which are super rare Pokemon.

     

    First, some quick Pokemon background: Eevees are cute little fox-type Pokemon that, unlike other Pokemon, can evolve in eight different directions. They only evolve once, and after they do, they can’t evolve any more.

     

    What that means is that if you want to catch all the Pokemon, you have to either catch eight different Eevees and evolve them all in different ways — which is really tough to do — or you have to catch the other, rare evolutions when they do appear.

     

    And, well, one appeared in Central Park late on Saturday night. A Vaporeon. Here’s what that one looks like…

    And here’s what it looks like when a bunch of Pokemon addicts actually see one.

     

    It’s not just the Vaporeon. This is what happened when something called a Charizard appeared.

    In retrospect, if ISIS had really wanted to destroy western civilization it should have skipped all the suicide bombers and “made in the San Fernando Valley” decapitation videos, and just hired a few good programmers…

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1 comment

    • M.D. Shaw on 17th July 2016 at 8:23 am
    • #

    Pokemon? If it wasn’t so sad, I’d be laughing . . . I wish people were that into chess, or some other mind exercising game . . . just sad . . . even just reading books . . . or nature walks . . . help the less fortunate even!

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