- CRuZ APPoiNTS SuBPRiMe DouCHe BaG To Be CHieF ECoNoMiC ADViSoR…
Connect the Shiti dots…
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- China Sends Fed A Warning: Devalues Yuan By Most In 2 Months
With the USD Index stretching to its longest winning streak of the year, jawboned by numerous Fed speakers explaining how April is ‘live’ (and everyone misunderstood the dovishness of Yellen), it appears that The PBOC wanted to send a message to The Fed – Raise rates and we will unleash turmoil on your ‘wealth creation’ plan. Large unexpected Yuan drops have rippled through markets in recent months spoiling the party for many and tonight, by devaluing the Yuan fix by the most since January 7th, China made it clear that it really does not want The Fed to hike rates and cause a liquidity suck-out again.
The last 4 days have seen nearly a 1% devaluation in the Yuan fix with today’s drop the biggest in over 2 months…
And while everyone is quietly commenting on how “stable” the Yuan has been this year, the truth is that is only the case against the USD, the Yuan basket has been consistently devaluing since PBOC admitted it was more focused on that than the USD only…
The last time they sent a message, The Fed rapidly acquiesced and decided a rate hike was inadvisable due to global market turmoil… we wonder what happens this time.
- The Reasons Why People Hate Cultural Marxists
Submitted by Brandon Smith via Alt-Market.com,
A common misconception in America today is that our nation is evenly divided between conservatives and liberals in an absolute sense. This is not necessarily true.
Though national elections always seem to progress along a 51 percent to 49 percent opposition, with red states barely beating our blue states or blue states barely beating out red states, this is not a practical representation of the legitimate ideological boundaries within the U.S. What you really have in America is a wide spectrum of beliefs of varying degrees in-between ultimate extremes. I am of course referring to the general public in this respect.
The top of the political pyramid is a different story entirely. For them there are no sides whatsoever. Top Republicans and top Democrats are essentially the same animal with the same goals. They may wear different masks and exploit diverging rhetoric, but at the end of the day for elitists, America is a one-party system.
For the rest of us there is a hazy drift, with many people holding some views that lean conservative and other views that lean liberal.
Unfortunately, “moderates” do very little to direct the future of nations. Nearly all great changes and great upheavals are initiated by the elites themselves (extremists in their own right) or by smaller groups on opposite ends of the spectrum (which are often manipulated by elitists). At the very far reaches of the void of the left and liberalism festers what I would call a sociopolitical theology; the cult of cultural Marxism.
If you are confused as to what cultural Marxism really is I highly suggest you research as much as possible into the Frankfurt School founded by Marxist professors and academics in Germany during the 1920s and the early 1930s. The basic foundation of the Frankfurt School was to take the collectivist philosophy of Karl Marx, which revolved primarily around economic class structure, and apply it in a more sociological manner utilizing Hegelian dynamics.
The Frankfurt School sought to explore “class oppression” not only between the rich and the poor, the workers and the aristocracy, but also in aspect to races, religions, families, genders, behavioral psychology, etc. That is to say, the Marxists of the Frankfurt School were looking for new methods to divide and conquer existing societies and nations beyond simple economic conflicts.
After the rise of fascism in Germany, numerous members of the Frankfurt School fled to the U.S., bringing their ideological framework with them and applying it in U.S. universities and academic circles.
One of the primary character traits or strategies of cultural Marxists today is that they rarely if ever actually self-identify as cultural Marxists. This strategy allows them to change their colors on a whim, like a chameleon, and it prevents opponents from pinning down their world view in order to present a solid argument against them. It also allows them to disassociate from past cultural Marxists with negative reputations while holding the same beliefs as those historical figures.
The cultural Marxist denies he is a cultural Marxist, then he goes on to argue an ideology which perfectly matches what cultural Marxists have historically believed.
This is only one of the many reasons why most people, conservatives and moderate liberals alike, distrust and even despise cultural Marxists. The pervasive weakness among cultural Marxists in America is that they tend to believe their own propaganda. They think that they are an actual social force in this country with the numbers and support to back their activities. They fell into this delusion because for a time they have been effective at infiltrating popular media and generating a false consensus, not to mention organizing public and online mobs to be used as a weapon against others. They seem to be everywhere, yet they are few.
Lately, though, the illusion of numbers is beginning to collapse for them. Masses of people, even those that identify with the “Left”, are beginning to disown what are often referred to as “social justice warriors” (cultural Marxists) and are speaking out. Here is a list of reasons why the public is shifting and the tide is turning against social justice and cultural Marxists.
Third Wave Feminism
Cultural Marxists are collectivists at their very core. This means that their ideological pursuit is the eradication of individualism, individual liberty, and groups based on voluntary participation in the name of the “greater good of the greater number.” Collectivists seek to centralize everything. This goal could not be more evident than in the efforts of third-wave feminists.
Third-wave feminists are best understood through the lens of what they refer to as “intersectionality,” a made up social justice term that whitewashes the new feminist strategy of co-opting ALL other social issues and forcing them under the umbrella of the feminist movement. Feminism is not simply about creating equal opportunity and equal rights for women, not anymore. Instead, third-wave feminism claims dominion over women’s rights, all gender related issues, race issues, gay rights issues, economic “inequality”, immigration issues, etc.
Of course, if you believe in working for equal rights of all people regardless of their individual and ethnic traits, you would be called an egalitarian by definition, not a feminist. But feminists attack this distinction and continue to demand that they are the sole proprietors of “equality” and claim all other methodologies are irrelevant.
This kind of totalitarianism has provoked a growing backlash against feminists, even from more left leaning subsections of the American population. People are beginning to realize that there really is no need for feminism anymore. Women already have equal protection under the law, and they already have equal opportunity.
In fact, in many sectors women are given considerable advantages over men. Women are given greater favor in college applications and grant applications which is why women today outnumber men in universities. Women are often given favor in job applications, even in professions which men are more inclined to succeed in (like firefighting, for example); this bias in favor of women by employers is often inspired by government incentives and by a fear of civil suits. Women have far more institutionalized advantages in divorce court, and, women are more likely to receive reduced sentences for the same crime as a man.
The most common lie used by feminists to argue for the existence of inequality is the “gender pay gap,” which has long been debunked. A woman who works the same exact job as a man with the same effort and diligence, for the same exact hours, and does not take maternity leave or extra vacations is paid the SAME as that man. And if for some reason there is something amiss in the accounting, there are laws in place to punish employers that do actually pay women less for the same work. There is no gender pay gap except what women create for themselves through their own life choices.
Since women have the same rights and protections as men today, feminists are forced to create oppression out of thin air to then fight against. The new battlefield for feminists and social justice warriors is about "feelings" rather than law. That is to say, feminists believe that personal feelings should be protected by law and that contrary or discriminatory thought must be criminalized. Of course, the definition of criminal discrimination is left rather broad. Ultimately, it is the feminists and their allies in government that arbitrarily decide what thoughts are "bad" and what thoughts are acceptable.
The feminist movement must co-opt and absorb other groups and other issues and it must create exponentially more divisions and imaginary oppression in order to justify its existence. They will never stop. There will never come a day when feminists are satisfied because their goal is not equality. Their goal is social power, and to maintain social power indefinitely.
Mob Shaming And Self Censorship
Cultural Marxists will use any tool at their disposal to shut down or silence dissent, but they prefer to use mob tactics and public shaming as their bread and butter. Get enough of your cohorts together in an organized attack and the illusion of consensus becomes powerful leverage.
There are numerous instances of accomplished people being railroaded out of their jobs in the past few years by cultural Marxist mobs, and numerous people harassed into self censorship for fear of being labeled a sexist, misogynist, racist, bigot, xenophobe, homophobe, etc. This tactic, though, has been so overused that it is now losing its effectiveness. There is a growing movement of people who no longer care what they are labeled by cultural Marxists and when the mob no longer has shaming as a tool, they can only move on to more “direct” actions.
Physical Interference With Freedom Of Speech
Now that the shaming techniques are becoming passé, cultural Marxists are attempting to physically disrupt discussion or silence opposing views. From the notorious social justice mob at the University of Missouri, which called for “some muscle over here,” to forcefully remove student journalists covering the protest, to feminist mobs shutting down conferences on men’s issues, to the professional agitators bused in to disrupt Trump rallies, cultural Marxists are beginning to physically impede the rights of other people to speak, or listen and participate.
How do they rationalize this anti-1st Amendment activity? Easy! They simply argue that it is THEIR 1st Amendment right to disrupt YOUR 1st Amendment rights, even if you are in a public space. This is the kind of circular insanity that leads directly to Stalinist or Maoist totalitarianism.
I’m sure that many people are also familiar with the heightened number of incidences in recent weeks of these same cultural Marxists being beaten up in response to their strategy. Expect this to continue and expect reactions to social justice mobs to become even more violent as we get closer to election time.
Reverse Racism
My favorite hypocritical claim from cultural Marxists is that there is no such thing as reverse racism. Meaning, a black or Hispanic or Asian person, etc., cannot be racist towards a white person. How is this possible? They assert that racism requires institutionalized “advantage” or “privilege.” Only white people can be racist because we have all the “privilege” and institutional protection.
Of course, bringing up the fact that the president of the United States is a black man does not seem to matter. The so called “patriarchy” reigns supreme, and the patriarchy is white.
If you think that reverse racism is not a real issue, then you might want to take a gander at this little debate at Harvard, in which the main argument by a Black Lives Matter activist was “white people do not have a right to life” (be sure to check out the links included with the video which affirm that this was not simply a debater “playing devil’s advocate”).
So, here is where cultural Marxism always goes wrong, or right, depending on who is benefiting. Communist movements like cultural Marxism, have a fantastic knack for eliciting fascist responses and driving otherwise even-handed people into the arms of fascist governments. It happened in Germany, Spain and Italy before World War II, and it could very well happen again in America today.
The debaters argue against the right to life of an entire ethnic group (white people), because they claim that white people have abused their privileges to exploit or oppress other groups.
First, like all collectivists, they have completely disregarded individual liberty and inherent conscience. All white people are presented as a singular group (which they are not), and all white people are presented as guilty for crimes which can be attributed to any other ethnic group at any other point in history as well. All white people are accused of having “privileges” beyond that of other ethnic groups, but no proof of this privilege is ever presented; it is just treated as a given fact.
Second, these cultural Marxists foolishly do not take into account that if they want to promote the extreme side of communism to support their views others could just as easily take the opposing extreme in response. What would a fascist say to the Harvard debater’s arguments?
A fascist might argue the other side of the coin — that all other ethnic groups suffer oppression because they are “inferior,” “weak” or “intellectually inadequate.” A fascist would probably assert that the weak survive only by the good graces of the strong, and that only the strong have a “right to life.” A fascist would argue that all groups that are so easily oppressed should be exterminated to make room for the strong.
This argument is just as absurd as the argument presented at Harvard because it completely overlooks the fact that individuals have a right to life, period. Being part of an ethnic group is not a crime in itself, but cultural Marxists would like white people in particular to ignore their individualism and believe they are defined only by their color and that they should feel guilty by association. This is the epitome of racism.
Black Lives Matter
Yes, black lives do matter, just as all lives matter. But as the Harvard debater above argues, certain ethnic groups matter “more” because they are supposedly more oppressed.
The classic tactic of cultural Marxists is to create new divisions or to exacerbate existing divisions in order to destabilize a society. Once a society is broken, it can then be rebuilt according the vision of a select few. One of the best methods of causing division is to exploit cultural differences based on obvious separations.
People do tend to separate more according to skin color and ethnicity. This is a tale as old as time. Is it wrong? Not necessarily. Ethnic groups develop their own belief systems, their own values and principles, and though many human beings share archetypal similarities and inherent conscience regardless of the time and place they were born, they still have anthropological discourse.
It is very easy to pit one ethnic group against another if the right pressure is applied. Black lives matter is nothing more than an effort by cultural Marxists to capitalize on race tensions and make them far worse through agitation.
Forced Multiculturalism
As stated above, different ethnic groups can have different priorities. The concept of freedom is inherent in the human psyche from birth, but numerous cultures are structured around suppressing that human desire and need. These cultures cannot be reconciled with cultures that do respect individual liberty. There are many other important differences that cause clashes between cultures, but freedom vs. collectivism is the most explosive.
Cultural Marxists certainly have no respect for freedom. Their only concern is artificial “equality,” because forced equality makes collectivism possible. This often means grinding down the best the world has to offer to match it with the worst the world has to offer.
Multiculturalism is really just a mechanism by which failed and unstable cultures are aggressively injected into more stable societies in order to disrupt and then homogenize them. Europe is now experiencing this in unprecedented fashion, and the U.S. has been dealing with it incrementally for decades.
Multiculturalism is of course a nice way of describing the Cloward-Piven Strategy, a strategy designed by cultural Marxists to deliberately undermine economic and social systems. The use of Islamic refugees as a battering ram against Western society is a perfect summation of this strategy.
Islamic culture abiding by Sharia Law and unfamiliar with Western traditions and beliefs is completely incompatible with European and American civilization. It is one thing for Islamic culture to exist with respect to Western values, it is another thing for Islamic culture to supplant Western values.
The process of forced multiculturalism is driving large portions of the EU and America to become violently opposed to cultural Marxists. I fear that this is leading to irreconcilable division to the point of war, just as what took place during the last Great Depression. And, as I pointed out at the beginning of this article, cultural Marxists are a tiny minority, a paper tiger posing as the real thing. If they do not stop with their incessant subversion and cultism they will end up being the first to pay the price. The rest of us will pay later.
- Why Oil Prices Are About To Plunge Again: 31 Million Barrels In Floating Storage Are Coming On Shore
One week ago, we wrote that as a result of the collapsing crude contango, oil tankers (such as the fully loaded Distya Akula which has been on anchor in the Suez Canal for one month unable to find a buyer for its cargo so it continues to wait) “will soon have to unload their cargo”, in the process flooding the already oversupplied market with millions of barrels of crude oil, thus pushing the price of oil far lower. But how many millions of barrels, and how much lower will the price of oil go?
For the answer we go to Deutsche Bank’s Michael Huseh, who has done the calculations to get the answer.
What he finds is that since the start of 2014, global floating storage inventory has ranged between 80 and 180 million barrels (Figure 1). According to estimates of the global VLCC fleet at the end of 2014, the potential storage capacity is implied to be 1169 million barrels. Adding Suezmax vessels would add 528 million barrels of capacity.
After touching 186 million barrels in early March, inventories have begun to decline once more. Since the start of 2015, one can identify both periods when builds in floating storage have been associated with rising Brent prices, and also periods when draws in floating storage have been associated with falling Brent prices (Figure 2). Since the Arabian Gulf has represented much of the variability in floating storage inventory, one can also measure the incentives to add or withdraw from storage using Arabian Gulf tanker rates.
South East Asia would be another valid candidate to measure economics, as floating storage inventories in that region have moved in a very similar fashion (Figure 3).
As we discussed recently, as a result of a recent surge in hedging activity in the front-end of the strip, absent a dramatic collapse in spot prices, the contango is now so low as to make offshore storage no longer economical. Specifically, based on the all-in cost of operating tanker storage (dirty VLCC tanker day rates, financing, transit and transfer loss, insurance and bunkers, Figure 5), the current storage cost is too high relative to the steepness of the Brent forward curve. This means that prices do not justify inventory build, but rather gradual inventory drawdown as existing storage trades are unwound.
What is the current prevalent duration of booked offshore storage? A comparison of the historical profitability of storage trades of varying lengths indicates that even at the most extreme instances of contango in the last two years, the Brent forward curve is only steep enough over the first 2 to 6 months to justify the floating storage trade. Comparing the trade economics over a one-month horizon (Figure 4) and over a six-month horizon (Figure 6) shows the relative unattractiveness of the six-month trade. We use the second month Brent contract owing to discontinuities in the pricing of the rolling first month contract. Thus we would expect that floating storage trades begun in late January or early February would be unwound by July or August.
As DB calculated, comparing the current level of floating storage (157.3 million barrels) versus that in early February (126.6 million barrels), there may be an additional 31 million barrels of inventory to be drawn down between now and the next inventory trough over the next several months. Depending on the duration of drawdown (three months or six months) this could mean anywhere from 165-330 kb/d of incremental supply.
So how, according to DB, should one trade this imminent surge in incremental supply?
A tactical short position in Brent may benefit from the contango roll yield which over the first six months of the curve is an annualized 14%. Over the first year of the Brent curve, the roll yield is 11.9% p.a., and to provide an extreme comparison, the roll yield over the first six years of the curve is only 5.3% p.a. In other words, in a flat oil price scenario the contango roll yield for a short position would still provide positive returns if the curve structure remains static. In an upside oil-price scenario, the six-month forward contract should rise slower than the spot price.
Long WTI-Brent may be a viable alternative: because positioning in Brent is more clearly extended than NYMEX positioning in WTI, and also because US refineries returning from maintenance may add an incremental 717 kb/d of refinery crude demand between now and June, we believe WTI may be better supported than Brent. Brent net long non commercial positions rose to 164 thousand contracts in the week ending 15March, which is just below the 2015 high of 166 thousand contracts, although still some way below the 2014 high of 195 thousand contracts.
In WTI positioning on NYMEX however, net long non commercial positions stand at 331 thousand contracts, only 69% of the record high of 480 thousand contracts in June 2014. Therefore an alternative to selling Brent outright may be a long position on the WTI-Brent spread.
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Of course, if DB’s calculations are correct, and if over the next three months 20% of the total 157 million barrels in offshore inventory are set to come onshore, not only will underlying prices slide, but higher beta assets, such as energy equities but mostly junk bonds due to their record high correlation with energy prices as we showed before…
… the best trade may be to either sell cash bonds or, if one can find them in this illiquid market in which even the ECB is now actively involved in bond purchases, simply buy junk bond CDS.
Because between the surge in recent hedging, the collapsing contango, the failure of supply to decline, the failure of demand to increase, there is only one thing the price of crude oil can do: tumble, no matter how many flashing red “OPEC meeting” headlines Bloomberg blasts at idiot headline-scanning algos.
- Is It Government Or Oligarchs?
Submitted by Martin Armstrong via ArmstrongEconomics.com,
QUESTION:
I am a capitalist and what we have today is the least efficient form of capitalism. Actually it is quite a destructive and dangerous form of capitalism when the concentration of power reaches this level. I think that in all these years that I thought we were talking about different things, maybe we were not. You call big government what I call plutocrats controlling government. You were blaming governments, I was blaming plutocrats that we let become soo big and powerful that can buy any government…
Yet maybe we are not that far off.
…In any case… one question that I would love to ask you… how do you think we are going to fix the problem with the power structure? What I call the power structure is not the legitimate power structure, but the mix of oligarchs and corrupt government working as one cancerogenous entity. I do not see any reasonable way to fix it…?
ANSWER:
I think what you have to understand is that our structure of government being a republic rather than a democracy invites oligarchy.
There has never been a single republic that has ever proven to work. The mixture of money and power always becomes lethal. This is why I blame government, not the oligarchs. They could not buy politicians if they were not (1) career lifetime politicians, and (2) all-powerful law creators.
Taxes and regulations become the incentive for the oligarchs to buy government. If we eliminate taxes and career politicians, we will solve most of the problem.
We then must eliminate socialism, which at its core is predicated upon the foundation of Marxism that advocates government possessing power by insisting it could alter society by regulation. This serves as a fundamental pillar for taxation. It has also transformed government into the adversary of the people stemming from PUNISHMENT rather than from the concept of cooperation and respect for the people.
Philadelphia is trying to introduce a 3 cent tax per ounce of soda. The excuse is that sugar is bad for you, and they have only the best interests in mind for society. They expect to get almost $100 million annually from this tax. Why outlaw something that will make them money? So if it’s bad for you, go ahead, but pay them for that privilege. Philadelphia is dead broke and has a 22.5% tax on parking and 8.5% tax on hotels. They have chased everyone out. They want income tax for money earned in the city even if you just hold a conference there. This latest soda tax means a 2-liter bottle of soda that typically costs $1.50 would amount to $2.04 with taxes, which is more than the cost of the actual bottle. The cost of a 12-pack of soda would nearly double to more than $8. This is the same thing with all this global warming.
Governments use this as the excuse to tax you for your own good. The money does nothing but line the pockets of politicians. In the case of Philadelphia, citizens will shop in the suburbs to avoid the tax. To appease the oligarchs, the Feds created carbon credits that can then be sold to others who do pollute. It’s all about the money.
We simply have to admit that regulation does not work when used in such a manner that has covert revenue agendas. Other types of regulation such as outlawing prostitution are pointless when all they do is create a tax-free underground industry that leads to exploitation and kidnapping. Making drugs illegal funds crime just as prohibition funded the Mafia. Passing a law against murder does not prevent murder. There are things that are simply inherent within human nature that you cannot make a law and rationally expect it to stop.
There have been crazy people throughout history. Putting in background checks to sell guns is a deterrent, but it will not stop a crazy person from being crazy. If they wanted to kill someone, a knife will suffice. Outlawing gay marriage will not stop the same sex from living together. The whole problem was simply that we imposed all sorts of regulations to marriage such as preventing someone from inheriting property if not married or having permission to be at the bedside of a dying person unless they are family. At the border for taxes, they do not care if you are married. If you travel with someone else, the $10,000 limit applies to the both of you, because if you have $15,000 and give half to the other person they look at you as a couple regardless of sex or marriage status. This all becomes a convoluted regulation that is hell-bent on collecting money, which then disturbs the religious viewpoint of others. Yet, if we detach the regulations to marriage then it really does not matter. It always comes down to money and power.
So what we have to understand is that eliminating career politicians will eliminate much of the corruption. Eliminate the power to regulate pretended circumstances and you eliminate the need to buy government in some shape or manner. It has long been said that God created the Ten Commandments, and man has created 1 billion laws trying to say the same thing. Murder is murder, regardless if it is a policeman killing a citizen by shooting them in the back as they are running. The Roman Emperor Julian II (360-363 AD) may have been one of the most honorable men in history. He declared that no one was above the law, including himself. Any law enacted had to apply to everyone including the emperor. They killed him rather quickly and the assassin was never caught.
- Peak Hypocrisy: Rockefeller Fund Divests Fossil Fuels, Says Exxon Is "Morally Reprehensible"
The winner of today’s “peak irony”, or rather hypocrisy, award is easy: it goes to the Rockefeller Family Fund, a charity which exists only thanks to John D. Rockefeller’s creation of the Standard Oil carbon-spewing behemoth (a predecessor to today’s ExxonMobil) which over the past century has created billions in profits for the Rockefeller family and billions in tons of CO2 emissions, “proudly announcing” this morning that it intends to sell all fossil fuel exposure, and that it would “eliminate holdings” of ExxonMobil because the oil company associated with the family fortune has “worked since the 1980s to confuse the public about climate change.“
The U.S.-based charity will also divest its coal and Canadian oil sands holdings.
This striking move is the result of the Fund’s “green” metamorphosis. According to the charity, given the threat posed to the survival of human and natural ecosystems, “there is no sane rationale for companies to continue to explore for new sources of hydrocarbons.”
Oh, now they tell us.
In response to the divestment movement, many oil industry leaders have argued that millions of people in the developing world would be condemned to darkness and poverty if society halted the burning of fossil fuels anytime in the next several decades, before there is an ample supply of cleaner energy sources. And considering the price of oil is so cheap currently that the research and development of so-called alternative, or clean sources of energy is completely uneconomical, it means that the kind, liberal folks over at the Rockefeller foundation would rather see Africa in the dark than suffer the immoral indignity of even a few more grams of CO2 emissions.
Today’s move follows the launch last November by New York State Attorney General Eric Schneiderman of an investigation into whether Exxon misled the public and shareholders about the risks of climate change. At the time, the company said it has included information about the business risk of climate change for many years in its quarterly filings, corporate citizenship report and in other reports to shareholders.
Exxon Chief Executive Officer Rex Tillerson has openly talked about the reality of climate change. The company has said it has constructively contributed to climate research for years.
As early as 2008, members of the Rockefeller family called on Exxon to make governance changes and increase spending on alternative fuels. And then, in late 2014, another fund associated with the family, the Rockefeller Brothers Fund (RBF), and several other philanthropies and non-governmental organizations said they would divest from fossil fuel-related investments.
Here is the best part: this whole “divestment” is nothing more than theater. This specific endowment runs a tiny $130 million in total assets. As for Exxon, its shares were down 0.4% on the day, less than the drop of the broader market.
So here is the real question: will the Rockefellers divest of their full energy holdings, kept in blind, family, and various other (offshore of course – nobody wants to pay taxes, not even green liberals) unknown trusts, due to their disgust with the “morally reprehensible” company created by their ancestor? The answer: of course not.
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Here is the full Rockefeller Family Fund statement:
The Rockefeller Family Fund is proud to announce its intent to divest from fossil fuels. The process will be completed as quickly as possible, as we work around the complications of modern finance, which is increasingly dominated by alternative investments and hedge funds.
While the global community works to eliminate the use of fossil fuels, it makes little sense—financially or ethically—to continue holding investments in these companies. There is no sane rationale for companies to continue to explore for new sources of hydrocarbons. The science and intent enunciated by the Paris agreement cannot be more clear: far from finding additional sources of fossil fuels, we must keep most of the already discovered reserves in the ground if there is any hope for human and natural ecosystems to survive and thrive in the decades ahead.
We would be remiss if we failed to focus on what we believe to be the morally reprehensible conduct on the part of ExxonMobil. Evidence appears to suggest that the company worked since the 1980s to confuse the public about climate change’s march, while simultaneously spending millions to fortify its own infrastructure against climate change’s destructive consequences and track new exploration opportunities as the Arctic’s ice receded. Appropriate authorities will determine if the company violated any laws, but as a matter of good governance, we cannot be associated with a company exhibiting such apparent contempt for the public interest.
To operationalize this decision, the Board has instructed its advisors, effective immediately, to eliminate holdings of ExxonMobil, and all coal, and tar sands-based companies outside the portions of the portfolio managed by third parties, and to keep exposures for these three categories of investment below 1 percent across the entire portfolio. The Family Fund’s Finance Committee will soon be entering the second phase of its divestment work, which will entail seeking suitable alternatives to certain commingled funds now held. The field of Socially Responsible Investing is dynamic and growing and we are confident that a variety of options will soon emerge for mid-sized endowments such as ours.
Needless to say, the Rockefeller family has had a long and profitable history investing in the oil industry, including ExxonMobil. These are not decisions, therefore, that have been taken lightly or without much consideration of their import. But history moves on, as it must. Indeed, it is past time for all people of good will to do everything in their collective power to make our new path one that recognizes the deep interdependence between humanity’s future and the health of our natural systems.
- 7 Strange Questions About The Brussels Terror Attacks That The Mainstream Media Is Not Asking
Submitted by Michael Snyder via The Economic Collapse blog,
The horrific terror attacks in Brussels, Belgium on March 22, 2016 are going to reverberate in our memories for years to come, and perhaps that was the intention. Terror attacks are designed to create fear and to get attention, and these attacks have definitely done both. On Tuesday morning, two huge explosions ripped through Zaventem Airport in Brussels as travelers were getting ready to board their morning flights. You can view some raw footage of one of the bomb blasts right here. Just a short while later, another huge explosion was reported at a metro station just yards away from the European Commission headquarters. At this point, CNN says that at least 30 people have died and about 230 people are wounded as a result of these bombings. But what was the real motive for these attacks? The following are 7 strange questions about the Brussels terror attacks that the mainstream media is not asking…
#1 Why would Brussels be such a prime target for terror attacks?
Most Americans don’t understand how important the city of Brussels is. For one thing, it is the headquarters of the NATO alliance, and defense ministers from 49 different nations met there last month to discuss a potential ground invasion of Syria.
Secondly, it is also the unofficial capital of the European Union. The following comes from Wikipedia…
“The European Union has no official capital, and no plans to declare one, but Brussels hosts the official seats of the European Commission, Council of the European Union, and European Council, as well as a seat (officially the second seat but de facto the most important one) of the European Parliament.”
Over the years Brussels has become a key symbol for European integration, so if you wanted to conduct an attack that the entire European Union would feel, Brussels would be a good choice. And many European leaders are already coming out and declaring that the attack on Brussels was an attack on Europe as a whole…
French President Francois Hollande said Tuesday’s attacks in Brussels that killed at least 26 people struck at “the whole of Europe”.
“Through the attacks in Brussels, the whole of Europe has been hit,” Hollande said in a statement, urging the continent to take “vital steps in the face of the seriousness of the threat”.
French Prime Minister Manuel Valls said: “We are at war. Over the past few months in Europe, we have endured several acts of war.”
#2 Was Donald Trump right about Brussels?
During an interview with Fox Business Network anchor Maria Bartiromo earlier this year, Donald Trump specifically pointed to Brussels as an example of what he wanted to avoid in this country…
The Republican presidential front-runner said Brussels, the capital of Belgium, had been particularly transformed. Belgium has been home to a number of recent terror plots, and was linked to the November attack on Paris, France, that left 130 people dead.
“You go to Brussels — I was in Brussels a long time ago, 20 years ago, so beautiful, everything is so beautiful — it’s like living in a hellhole right now,” Trump continued. “You go to these different places. There is something going on.”
#3 Why are there some Islamic ghettos in Brussels that are considered to be “off-limits” for non-Muslims?
Of course this is not just true in Brussels. All over Europe there are sections of major cities that have been completely and totally taken over by radical Muslims. In Belgium, the rapid growth of the Islamic community has some politicians dreaming of turning that nation into a Sharia-compliant country within just a couple of decades. The following comes from Infowars…
These ghettos, which are in fact large areas of Brussels, are considered off-limits to Europeans and radical Muslims will likely comprise the majority of the population within 20 years.
“I think we have to sensitize people, make them understand the advantages to having Islamic people and Islamic laws, and then it will be completely natural to have Islamic laws and we will become an Islamic state,” a Muslim politician from Brussels, Redouane Ahrouch, said to a reporter in 2012. “In Belgium, of course!”
“I am for the Sharia. Islamic law, I am for it. It is a long-term struggle that will take decades or a century, but the movement has been launched.”
#4 Does 3/22 have special occult significance?
There are some people out there that are suggesting that it was no accident that these attacks happened on 3/22. And without a doubt, we have seen other events of this nature fall on dates that have special significance for the occult. I do not know exactly what to make of all of this, but we do know that 322 is extremely significant to the Skull and Bones Society at Yale University (of which George W. Bush and John Kerry are members)…
#5 Why did Barack Obama spend less than a minute talking about the terror attacks in Brussels during his speech down in Cuba?
You would think that something this historic would deserve more than 51 seconds, but this is precisely the kind of behavior that we have come to expect from Obama over the years.
#6 Is it odd that the mainstream media so quickly reported that ISIS took full responsibility for these attacks?
It is entirely possible that ISIS was behind these attacks. But it is also entirely possible that these attacks are being blamed on ISIS by other parties with ulterior motives.
What we do know is that a “bulletin” supposedly from the Islamic State was posted on Tuesday which took full responsibility for the bombings. The following comes from WND…
“Islamic State fighters carried out a series of bombings with explosive belts and devices on Tuesday, targeting an airport and a central metro station in the center of the Belgian capital, Brussels, a country participating in the coalition against the Islamic State,” the bulletin said. “Islamic State fighters opened fire inside the Zaventem airport, before several of them detonated their explosive belts, as a martyrdom bomber detonated his explosive belt in the Maelbeek metro station.”
#7 Will the terror attacks in Brussels be used to justify a ground invasion of Syria?
These attacks have produced a tremendous amount of outrage in the western world, and already many prominent voices are calling for a U.S.-led invasion of Syria in order to finally put a permanent end to ISIS.
In fact, a former top adviser to Hillary Clinton started calling for a Syrian invasion within just hours of the attacks…
A former adviser to Hillary Clinton on Syria, Frederic C. Hof, now a Resident Senior Fellow at the Atlantic Council’s Rafik Hariri Center for the Middle East, has called for invading Syria in the wake of the deadly attacks in Brussels.
“For the better part of a year, one clear recommendation has been on the table: assemble an American-led, coalition-of-the-willing, professional ground component—one top-heavy in regional and European forces—to enter eastern Syria to close with and kill ISIS. Engaging the Syrian opposition at all levels, consistent with an executable civil-military stabilization plan, can produce an administrative structure for an ISIS-free eastern Syria. Killing ISIS in Syria can ease the migration crisis and hasten the demise of this murderous band in Iraq.
And it can demonstrate to the credulously stupid that linking up with losers will be a one-way trip to self-destruction,” Hof writes.
Last month, I received quite a bit of criticism for suggesting that we could be on the verge of World War 3. But the truth is that Saudi Arabia and Turkey remain absolutely committed to the removal of the Assad regime, and now these Brussels terror attacks have conveniently shifted sentiment in Europe and in the United States in favor of a ground operation in Syria.
The current ceasefire in Syria is on the verge of completely falling apart, and if an American-led coalition does invade, that could very easily spark a major regional war. The Russians, the Iranians and Hezbollah are not just going to sit back and watch as the U.S., Saudi Arabia, Turkey and their allies march to Damascus and remove Assad.
I keep trying to warn people that 2016 is the year when everything changes, and I have a feeling that these terror attacks in Belgium are going to turn out to be exceedingly significant.
Our world is becoming more unstable with each passing day, and sometimes all it takes is a little shove to set us on a path that we never intended to go down.
I don’t have all the answers, but unlike the mainstream media, at least I am not afraid to ask the hard questions…
- Japan Goes Full Krugman: Plans Un-Depositable, Non-Cash "Gift-Certificate" Money Drop To Young People
The Swiss, the Finns, and the Ontarians may get their 'Universal Basic Income' but the Japanese are about to turn the Spinal Tap amplifier of extreme monetary experimentation to 11. Sankei reports, with no sourcing, that the Japanese government plans to unleash "vouchers" or "gift certificates" to low-income young people to stimulate the "conspicuous decline" in consumption among young people. The handouts may not be deposited, thus combining helicopter money (inflationary) and fully electronic currency (implicit capital controls and tracking of spending).
Since Ben Bernanke reminded the world of the existence of government printing-presses, echoed Milton Friedman's "helicopter drop" solution to fighting deflation, and decried Japan for not being as insane as it could be… it has only been a matter of time before some global central bank decided that the dropping of cash onto the populace was the key to economic recovery. Having blown their wad on QQE (and been left with a quintuple-dip recession) and unleashed NIRP, it appears Japan has reached that limit.
As Bloomberg reports,
The Japanese government plans to include gift certificates for low-income young people in its fiscal 2016 supplementary budget, Sankei reports, without saying who provided the information.
Recipients would be able to use them for daily necessities.
The government sees gift certificates as more effective in stimulating consumption than cash handouts, which may be deposited.
As Sankei reports (via Google Translate),
The government 23 days, as the centerpiece of the 2016 fiscal year supplementary budget to organize because of the economic stimulus, cemented the policy to include the low-income measures for young people. To examine the distribution of vouchers to be devoted to the purchase of such daily necessities. Although the 2015 supplementary budget, which was established in January was the extraordinary benefits pillars of the elderly, because the conspicuous decline in consumption among young people, hopes to work to shore up at the pin point. Low-income measures of the past on the grounds such as "benefit is Oyobi difficult wage hike" (Chief Cabinet Secretary Yoshihide Suga) is for the elderly was the main.
However, in January of Family Income and Expenditure Survey (two or more people households), consumption expenditure of 34-year-old following of young people in a significant negative same month of the previous year of 11, 7% decrease, compared to the total household average of 3.1% year on year decline was noticeable even. Government in order to raise the level of personal consumption to be sluggish, the determination and consumption stimulus measures of young people is essential. Rather than the benefits that potentially turn into savings is pointed out, we are considering the distribution of gift certificates. Details, such as low-income earners of interest and business scale is filled from April.
According to the Cabinet Office survey, for which the straight-line benefits that were distributed in 2009, many of proportion to turn to the consumer from the elderly entitlements is more of the child-rearing households than the household, this time of the measures expected a certain effect on the consumption raise That's it. Per capita 3 27 fiscal distribute the yen supplementary budget of extraordinary benefits to the elderly of the low-income, objection such as "Why do you favor only the elderly" was out of the ruling and opposition parties. Ahead of the House of Councillors election, there is also aim to appeal to the support measures for young people.
And so while some might liken it to EBT cards in the US… it appears this is simply a hidden way to directly hand out free money to those that spend (lower income) and force consumption (non-depositable or savable) and thus… increase inflation… So no need for firms to raise wages after all!??! Well played Abe.
One wonders how much these "gift certificates" will trade for on the black market… as we are sure some 'spending' will be disallowed and require the use of cash – no sugary drinks… no Fugu (google it)… no Sumo tournaments… and no BMW X6
And finally here is Charles Hugh-Smith to destroy the idea that this works…
In sum, the psychology of punishing the productive and rewarding non-contributors is destructive to everyone. Have proponents forgotten that humans are prone to emotions such as resentment? Resentment goes both ways; the recipients of Basic Income will be getting by, but they won't be able to build capital or better their financial stake. They are in effect Basic Income Serfs.
Proponents also believe that the loss of work will free everyone getting a basic income to become an artist, composer, musician, etc. As I noted in "Super-Welfare" Guaranteed Income For All Isn't a Solution–It's Just the New Serfdom, Since meaningful work is the source of positive social roles, Hell is a lack of meaningful work.
In the myopic view of the Basic Income proponents, humans are nothing but consumer-bots who chew through the Earth's resources in their limitless quest for more of everything– what the Keynesian Cargo Cult worships as "demand."
Tragically, this blindness to humanity's need for meaning and the elevation of spiritually empty consumerism to a Secular Religion leaves the basic Income crowd incapable of understanding this timeless truth: the only possible result of robbing people of their livelihood is despair.
Once meaningful work vanishes, so do positive social roles.
This is why guaranteed income for all is just a new version of Socioeconomic Hell. Being paid to do nothing does not provide meaningful work or positive social roles, which are the sources of positive identity, pride, purpose, community and meaning.
The petit-bourgeois fantasy of every individual flowering as an artist, musician and creator once freed of work is an abstraction, one born of the expansion of academic enclaves and private wealth-funded dilettantes fluttering from one salon to the next. (Ever notice how many trust-funders have therapists? Would they all need therapists if being freed from work automatically generated happiness and fulfillment?)
These are precisely what basic income for all doesn't provide. To the degree that serfdom is political powerlessness and near-zero access to the processes of accumulating productive capital, guaranteed income for all is simply serfdom institutionalized into a Hell devoid of purpose, pride, meaning, community and positive social roles.
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As we previously detailed, support is growing around the world for such spending to be funded by “People’s QE.” The idea behind “People’s QE” is that central banks would directly fund government spending… and even inject money directly into household bank accounts, if need be. And the idea is catching on.
Already the European Central Bank is buying bonds of the European Investment Bank, an E.U. institution that finances infrastructure projects. And the new leader of Britain’s Labor Party, Jeremy Corbyn, is backing a British version of this scheme.
That’s the monster coming to towns and villages near you! Call it “overt monetary financing.” Call it “money from helicopters.” Call it “insane.”
But it won’t be unpopular. Who will protest when the feds begin handing our money to “mid- and low-income households”?
Simply put, The Keynesian Endgame is here… as the only way to avoid secular stagnation (which, for the uninitiated, is just another complicated-sounding, economist buzzword for the more colloquial “everything grinds to a halt”) is for central bankers to call in the Krugman Kraken and go full-Keynes.
Rather than buying assets, central banks drop money on the street. Or even better, in a more modern and civilised fashion, credit our bank accounts! That, after all, may be more effective than buying assets, and would not imply the same transfer of wealth as previous or current forms of QE. Indeed, ‘helicopter money’ can be seen as permanent QE, where the central bank commits to making the increase in the monetary base permanent.
Again, crediting accounts does not guarantee that money will be spent – in contrast to monetary financing where the newly created cash can be used for fiscal spending. And in many cases, such policy would actually imply fiscal policy, as most central banks cannot conduct helicopter money operations on their own.
…
So again, the thing to realize here is that this has moved well beyond the theoretical and it's not entirely clear that most people understand how completely absurd this has become (and this isn't necessarily a specific critique of SocGen by the way, it's just an honest look at what's going on). At the risk of violating every semblance of capital market analysis decorum, allow us to just say that this is pure, unadulterated insanity. There's not even any humor in it anymore.
You cannot simply print a piece of paper, sell it to yourself, and then use the virtual pieces of paper you just printed to buy your piece of paper to stimulate the economy. There's no credibility in that whatsoever, and we don't mean that in the somewhat academic language that everyone is now employing on the way to criticizing the Fed, the ECB, and the BoJ.
The monetizing of state debt by the central bank is the engine of helicopter money. When the central state issues $1 trillion in bonds and drops the money into household bank accounts, the central bank buys the new bonds and promptly buries them in the bank's balance sheet as an asset.
The Japanese model is to lower interest rates to the point that the cost of issuing new sovereign debt is reduced to near-zero. Until, of course, the sovereign debt piles up into a mountain so vast that servicing the interest absorbs 40+% of all tax revenues.
But the downsides of helicopter money are never mentioned, of course. Like QE (i.e. monetary stimulus), fiscal stimulus (helicopter money) will be sold as a temporary measure that quickly become permanent, as the economy will crater the moment it is withdrawn.
The temporary relief turns out to be, well, heroin, and the Cold Turkey withdrawal, full-blown depression.
- Explosive Accusation: Belgium Had "Advance And Precise" Warning About Terrorist Attacks, Did Nothing
In what, if true, is the most incendiary allegation of the day, Israel’s Haaretz newspaper reports that Belgian security services and other Western intelligence agencies had “advance and precise intelligence warnings” regarding Tuesday’s bombings. According to the paper, “the security services knew, with a high degree of certainty, that attacks were planned in the very near future for the airport and, apparently, for the underground railway as well.”
Here is the full Haaretz report:
The Belgian security services, as well as other Western intelligence agencies, had advance and precise intelligence warnings regarding the terrorist attacks in Belgium on Tuesday, Haaretz has learned.
The security services knew, with a high degree of certainty, that attacks were planned in the very near future for the airport and, apparently, for the subway as well.
Despite the advance warning, the intelligence and security preparedness in Brussels, where most of the European Union agencies are located, was limited in its scope and insufficient for the severity and immediacy of the alert.
As far as is known, the attacks were planned by the headquarters of the Islamic State (ISIS) in Raqqa, Syria, which it has pronounced as the capital of its Islamic caliphate.
The terror cell responsible for the attacks in Brussels on Tuesday was closely associated with the network behind the series of attacks in Paris last November. At this stage, it appears that both were part of the same terrorist infrastructure, connected at the top by the terrorist Salah Abdeslam, who was involved in both the preparation for the Paris attacks and its implementation.
Abdeslam escaped from Paris after the November attacks, hid out in Brussels and was arrested last week by the Belgian authorities.
Abdeslam’s arrest was apparently the trigger for Tuesday’s attacks, due to the concern in ISIS that he might give information about the planned attacks under interrogation, particularly in the light of reports that he was cooperating with his captors.
The testimony of the detained terrorist, alongside other intelligence information, part of which concerned ISIS operations in Syria, should have resulted in much more stringent security preparedness in crowded public places in Brussels, along with a heightened search for the cell.
If this report is accurate, it leads to many unpleasant and frankly disturbing questions for both local as well as international authorities, like why in the aftermath of the Salah Abdeslam capture did Belgium not at least issue a heightened state of alert, as it did in November in the aftermath of the Paris bombings, when overnight Brussels looked like an army ghost town; at least it was safe.
Recall from our November report of how Brussels looks like a warzone after the Paris terrorist attack:
This time, however, the local police did nothing and the result was over 30 deaths and hundreds of injuries.
What’s worse as of this moment the third suspect remain at large: as Haaretz reminds us, “the search is focused on the terrorist Najim Laachraoui, who created the explosive vests used by the bombers and escaped from the airport at the last moment.”
There is concern, however, that other cells connected to ISIS in Western Europe will attempt to carry out additional attacks in the near future, either in Belgium or in other countries involved in the war against the terror organization in Syria and Iraq.
How Europe will handle the ongoing deadly fallout from the bursting of this one terrorist cell, will be closely watched, and should Tuesday’s event recur when local authorities had been warned about an upcoming terrorist attack leading to no specific action, perhaps some will finally ask if the local governments were at least partially complicit in the deaths of dozens of innocent people, for motives first hinted at in that infamous 2008 AIG Banque presentation which has so far predicted with absolute accuracy the future of the Eurozone.
- The Sleeping Giant Awakens
- Yellen, Draghi, Kuroda: Deranged Lab Rats
Submitted by Jim Quinn via The Burning Platform blog,
The stock market has regained all of its loses year to date as economic indicators continue to flash red, corporate profits continue to plunge, consumers continue to spend less at retailers, real wages continue to fall, and housing sales continue to decline. The entire dead cat bounce has been generated through corporate stock buybacks, Wall Street lemmings trying to make up for their terrible year to date investing performance, and central bankers who will stop at nothing to verbally manipulate markets higher – since their monetary machinations over the last seven years have been a miserable failure in reviving the real economy.
As John Hussman points out, the market is poised to deliver nothing over the next decade, with a 40% to 55% “dip” in the foreseeable future. I wonder how many barely sentient, iGadget addicted, non-questioning, normalcy bias dependent zombies are prepared for a third Federal Reserve generated market collapse in the last 15 years?
From a long-term investment standpoint, the stock market remains obscenely overvalued, with the most historically-reliable measures we identify presently consistent with zero 10-12 year S&P 500 nominal total returns, and negative expected real returns on both horizons. From a cyclical standpoint, I continue to expect that the completion of the current market cycle will likely take the S&P 500 down by about 40-55% from present levels; an outcome that would not be an outlier or worst-case scenario, but instead a rather run-of-the-mill cycle completion from present valuations.
The only people who can’t see the recession in front of their noses are central bankers who are paid to lie, obfuscate, and mislead; corrupt politicians trying to get elected or re-elected; and media pundits whose job is to keep the sheep sedated with positive propaganda and a never ending stream of trivialities and drivel. The average person has been experiencing a recession for the last eight years, with stagnant wages, rising living costs, no return on their savings, and rising taxes. Now, even the manipulated government economic statistics can no longer hide the true deterioration, as Hussman describes.
From an economic standpoint, recall that economic deterioration typically follows a well-defined sequence, with weakness in what I call the “order surplus” (new orders + backlogs – inventories) followed by deterioration in industrial production (which retreated again last month) and by real retail sales (which have declined for two consecutive months), then real personal income (which is the next measure to watch here), and typically followed only then by weakness in employment indicators. Nothing in recent weeks has changed our assessment of an imminent likelihood of recession, though as I’ve regularly noted, the immediacy of that expectation would be deferred if our measures of market internals improve significantly. Though employment is a lagging indicator, we would still watch for an increase in weekly unemployment claims above roughly 330,000, a decline in aggregate weekly hours over a 3-month period, and an increase in the unemployment rate to about 5.3% or higher to confirm the actual start of a recession.
The central banker action plan of monetary easing, negative interest rates, printing trillions of new fiat, currency debasement, and buying the bad debt of the criminal banking cabal, has not improved the lives of average people living in the real world. They have improved the net worth of the .01% who rule the world. They have succeeded in making the ultra-rich ultra-richer.
They, without a doubt, have made the lives of senior citizens far worse, the lives of middle income working class families ghastlier, and the lives of millennials just entering the workforce debt saturated and hopeless. Their deranged machinations have set in motion a global collapse which will make 2008 look like stroll in the park on a warm spring day.
Consider central bankers. For the past several years, global central banks have pursued increasingly deranged monetary policies, creating massive distortions in financial markets. It’s easy to point to these effects on the financial markets, as Bernanke, Kuroda, Draghi and other central bankers have emphasized, as evidence that central bank policy is “working.” What we, and others, have found, is that all of this deranged monetary policy has raised the level of GDP, industrial production, and employment by barely 1% from what would have been expected in the absence of these interventions.
It appears the sole purpose of these psychopathic central bankers is to talk up financial markets. Nothing else matters in this warped world of the financial elite. Dick Fisher, former Dallas Fed President, in a moment of truth revealed the Fed purposely injected the stock market with heroine and cocaine in order to stimulate gains. Now they’ve created an addict. They need ever increasing doses to be satisfied.
The ruling lords of the plantation reap the short term high, while the lowly slave peasants reap all of the pain, withdrawal symptoms, and ultimately death. As Hussman points out, even the vaporous benefits have a shorter and shorter high, as the markets are so ridiculously overvalued, the savvy insiders sell into every false rally. Meanwhile, Goldman and their fellow Wall Street co-conspirators sell to their muppet clients, just like 2008.
On January 29, a week after insisting that a move to negative rates was not under consideration, Bank of Japan Governor Harohiko Kuroda announced a rate cut to -0.1%. On February 18 he reiterated that the BOJ was prepared to ease further. He wavered on that stance at the end of February, but shifted again last week, saying that a move to even deeper negative rates was possible. Meanwhile, facing economic erosion in Europe, Mario Draghi came out on February 15 saying “we will not hesitate to act.” He followed on March 10 with his “bazooka” including a rate cut to -0.4%, an increase in the pace of QE, and a broadening of ECB purchases to include investment-grade, non-bank corporate bonds. On Wednesday, Janet Yellen announced that the expected pace of Fed rate hikes this year was likely to be slower than expected, as a result of weak global economic conditions and widening credit spreads.
Aside from a one or two-day knee-jerk response, these moves have had very little sustained impact on the equity markets. Japan’s Nikkei index is down about 5% since the day after Kuroda’s rate-cut announcement. The Dow Jones EuroStoxx Index is also down since the day after Draghi’s bazooka. One suspects that the response of the S&P 500 to Yellen’s dovishness will be similarly short-lived, though we need not rely on that. Given the continued sequence of erosion in economic measures, central bankers continue to point to the financial markets as evidence that their policies are “working.” Now even those effects have become unreliable.
When global markets logically got off to a horrendous start this year, based upon plunging corporate profits, consumers no longer able to support consumption based economies, governments collapsing under the weight of immense levels of bad debt, war raging in the Middle East, plunging oil prices due to a global recession, currency devaluation wars, and civil chaos spreading around the globe, the central banker alarm was sounded by the global ruling elite. Save us!!!
The imminent 50% plunge in global stock markets would put a crimp in the lifestyles of the rich and famous. They needed time to unload their holdings on the dumb money and go short before letting the house of cards crash down again. You can smell the desperation of the deranged central banker lab rats, as they frantically push the bar for more stock market gain pellets. But, the number of pellets is dwindling rapidly. Time is running out.
This sudden escalation of dovish pronouncements by central bankers isn’t sound monetary policy, being conducted based on demonstrated cause-and-effect relationships between policy tools and the real economy. No, this is an extinction burst. Central bankers are behaving like lab rats frantically pressing a bar in hope that more food pellets will come out of the chute. They ain’t comin’.
These deranged lab rats have failed to positively impact their economies in any way. Every sentient critical thinking person in this world knows you grow an economy through savings and investing those savings in productive capital. When deranged central bankers penalize savers with negative interest rates they destroy the economy. It’s really that simple. The Fed and their other central banker cronies are the reason productivity, investment and real wages have stagnated for the last 30 years. A world based on debt financed consumption will ultimately collapse under the weight of the debt.
Look, there’s one thing we know for certain in economics. The amount of saving in an economy must be precisely equal to the amount of real investment in the economy (factories, buildings, equipment, capital goods, and inventory). That’s not a theory. It’s an accounting identity. The problem with punishing saving in order to encourage more consumption is that it’s ineffective, and also leaves the economy with nothing to show for it. The wealth of a nation consists of its stock of real private investment (e.g. housing, capital goods, factories), real public investment (e.g. infrastructure), intangible intellectual capital (e.g. education, inventions, organizational knowledge and systems), and its endowment of basic resources such as land, energy, water, and the environment.
The central bankers and their Wall Street controllers have already guaranteed the third bubble bursting collapse in the last fifteen years. This time we have stock, bond, commercial real estate, and housing bubbles all poised to collapse simultaneously. Their easy money, QE, ZIRP, and accounting fraud schemes have guaranteed a catastrophic financial collapse. The longer they persist on flogging academic theory Keynesian solutions which have proven to be the exact opposite of what should have been done, the more likely we will experience a worldwide economic disaster.
Monetary authorities have now become little more than lab rats on a frantic extinction burst. If there are no adults in the room among our policy-makers who are willing to pursue the appropriate substitute behavior – expanding productive investment through fiscal means – we’re going to have a deeper and more concerted global economic downturn than is already likely. I remain convinced that monetary authorities have already ensured a financial collapse in the coming years that is baked-in-the-cake as a result of obscene valuations. That outcome will unfold nearly regardless of economic prospects.
By encouraging acute financial distortions, enabling massive issuance of speculative-grade securities and stock buybacks at near-record valuations, and repeatedly diverting national savings toward speculative malinvestment, the concerted behavior of central banks is increasingly pushing the global economy toward financial crisis and depressed long-term growth. There is no hope for long-term economic prosperity if we place our faith in the monetary policies of deranged bankers and ivory tower college professors. All they can do is to buy interest-earning bonds and replace them with zero-interest paper. How ignorant must we be to believe that financial bubbles will carry us to prosperity without consequences, and how many collapses must we endure before we focus on strengthening our own legs?
It’s sad that “we the people” continue to allow deranged captured academics, under the complete command of the banking cabal, to control the destiny of our country. They have failed for 103 years, but we continue to bow down to these central bankers as if they knew what they were doing. They do know how to debase the currency, obfuscate true inflation, prop up financial markets through monetary manipulation, and generate prodigious amounts of propaganda and misinformation to coverup their true purposes. The people will sit idly by until these deranged rats destroy the world. By then it will be too late to take the path laid out by John Hussman. We are destined to be eaten by these deranged lab rats and their deranged monetary policies.
The irony of economics is that when we pursue policies that encourage speculative malinvestment and make productive investment scarce, the pie gets smaller but a larger share of it goes to the owners of existing capital. The “rents” are always highest for those resources that are most scarce. If we really want more jobs, higher labor productivity, stronger growth, better real wages, a balanced income distribution, and a return to long-term economic prosperity, only an expansion of real productive investment – at every level of the economy – will do the job. Ever more deranged monetary policy will not.
“It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.”– Henry Ford
- When "Mother's Milk" Runs Dry
For the third time in six months, US equity markets have exuberantly decoupled from earnings expectations thanks, in large part, to jawboning and coordination from Central Banks. With stocks near record highs despite the earnings “mother’s milk” expectations tumbling, one can’t help but wonder, as CNBC’s Bob Pisani did this morning, given the comments from Evans, Lockhart, and Bullard, “It’s possible the Fed has seen the market reaction and become alarmed by the complacency.”
Mother’s Milk no longer needed it seems…
And just in case you think earnings don’t matter, here is the technical side of things – The S&P 500 is over 6% above its 50-day moving-average, the most since 2012 and at a level that has historically indicated a notable and tradable pull back…
It appears the analog continues to play out…
Charts: Bloomberg
- Why Crispin Odey's $11 Billion Fund Has 5% Daily Swings: "It's No Longer A Market But A Battlefield"
In February, Cripsin Odey’s quite bearish $11 billion Odey Asset Management had a tumultuous month: it was down -10.6% as the overall market levitated relentlessly on low volume hopes of central bank stimulus and intervention ever since the February 11 lows, leading to the biggest short squeeze in history and the most overbought market ever.
However, as Crispin himself would go on to admit, February’s 11% drop was just an appetizer. Because what happened in March, when Crispin went on to not only fight the Fed but declare war on every single central bank, was unprecedented. In his own words “by mid-March the fund was rising and falling by over 5% per day. At which point this was no longer an investment market but a battlefield.”
Does he regret it? Not at all – Odey is convinced these desperate central bank interventions are just a confirmation that they have run out of ammo, and for the most part, he is absolutely spot on:
Central banks can ignore the CDS market, but they cannot imagine away the losses coming through the system. They cannot save the banks now, without creating a recession, with all the consequences that has for bad loans and falls in GNP. The fall in productivity is already encouraging companies to eschew capital spending in favour of buy backs, which compounds the problem of credit growing faster than the economy. Profit margins are naturally falling as wages rise faster than prices and overcapacity rules out pricing power. No wonder that central banks feel that they are nearly out of ammunition. There is not a good choice to be made.
For now their choice has been to save preserve the markets, as the next crash in stocks may well be the last before the Fed and its central planning peers have no choice but to unleash the helicopter money.
In the meantime, we eagerly look forward to observing Odey’s valiant daily fight with Yellen et al, armed with the following top 10 positions…
… resulting in a net exposure of just about -110% net.
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Here are his latest monthly thoughts:
Bull markets do not die of old age. They are murdered by central banks. How far away we are from that old adage. The last six weeks have seen yet again central banks responding to further weakness in the world economy, by lowering or at least not raising interest rates and continuing to subsidise the weakest. Wherever they see any sign of distress as with the CDS market in Europe, their response is to believe that risk premiums are unfairly rising and immediately to take action to cancel the effect.
However, several years of watching central banks responding to ever falling productivity numbers by reducing interest rates have shown that they can effect asset prices with their actions, but that not only do they have almost no effect on economic activity, but they positively damage it.
The reason is simple. Banks work, like everyone else, off profit margins and the lower and longer interest rates remain close to zero, the more that net interest margins shrink and the less inclined, because profits are falling, are they to countenance new lending.
Without credit expansion there can be no strong nominal growth of GNP globally. Strangely even where there is strong credit growth, nominal incomes have responded sluggishly. For this is the good news. Over the last twelve months there have been 20% more dollars created in relation to GNP in the USA than a year ago. In China there have been over 30% more renminbi created. This should have resulted in blow out growth of nominal incomes, but in fact GNP in the USA has grown by 4.5% and in China by just under 7%. In both instances private indebtedness has grown by multiples of that. That a 20% increase in dollars has only resulted in inflation of 2.1%, reveals that strange things are happening. It has not just been worrying us here, but also seems to have unnerved the Fed. On all our numbers such credit growth would have resulted in over 5 or 6 interest rate hikes by this time in the cycle.
What frightens them and should frighten us all is that the overcapacity built up post 2008/9 in so many industries linked with China is now coming through in a severe credit down cycle. An unwillingness to countenance closure of capacity, even as new capacity was still being added, in the face of prices that were far below fair value, have ensured these industries have ongoing losses which are still not abating. And this is where it gets interesting, because these losses are undermining the loans that these industries have. As bonds due for redemption trade below par, companies are drawing down credit lines, which would usually be the signal that bankruptcies would follow. However, because of the very weak profitability of the banking sector, these banks are not able to absorb these losses. As they wait, their loan becomes the cash to pay back the bonds and their losses expand. Banks now need rights issues but the central banks’ attention remains on trying to lower rates to reflect falling productivity. There is thus no story to attach to a rights issue for a bank. The only way that the banks would be a buy is if interest rates were to go up, repricing assets relative to deposits, but that can never be because down that route lies recession. And strangely recessions are no longer permitted. However, negative productivity rates are already telling the central banks that any growth in nominal GNP is the equivalent of eating your capital.
Central banks can ignore the CDS market, but they cannot imagine away the losses coming through the system. They cannot save the banks now, without creating a recession, with all the consequences that has for bad loans and falls in GNP. The fall in productivity is already encouraging companies to eschew capital spending in favour of buy backs, which compounds the problem of credit growing faster than the economy. Profit margins are naturally falling as wages rise faster than prices and overcapacity rules out pricing power. No wonder that central banks feel that they are nearly out of ammunition. There is not a good choice to be made.
Markets need equilibrium to prosper. When the authorities have a problem, markets have a problem. We have been hurt by this rally in China-related companies, and indeed we reduced the gross and net positioning of the fund significantly in mid-March, to help reduce the short term volatility of the fund, but we remain convinced that China is in many ways in an even greater bind over policy than the developed world. By mid-March the fund was rising and falling by over 5% per day. At which point this was no longer an investment market but a battlefield. On the day that Draghi came out with his massive market support operation, the stock markets rose 2.5% and then closed down 1.5% on their lows. Imagine how painful it was to see the markets bounce the next day and celebrate his success. At that point I reduced the short book by a third and the long book by 10%.
Despite this strong rally, there is, aside from a pickup in government spending in China, little to support growth in the world economy. Everything from rising default rates in the booming auto financing industry to new lows in LNG, dry bulk shipping prices, points to slowdown everywhere.
For equity markets, a world without credit is for now a deflationary world. The underperformance of the banking, insurance and asset management industry warn that this is when equities can de-rate as the Japanese stock market did between ’96 and ’98.
- Fewer People Wiping More Bottoms: Minimum Wage Hikes Explained
More money for everyone. That sounds like a great idea.
Much like free healthcare for everyone.
And free college tuition.
And just “free shit” in general.
Unfortunately, “there’s no such thing as a free lunch” is one old adage that generally turns out to be true in almost all cases.
Be that as it may, advocates of a sharply higher minimum wage don’t seem to understand that most corporations exist to maximize profits. Reduced to the basics, profits come from selling something (or a lot of somethings) for more than your fixed and variable costs. When your costs (like say, labor) rise, you have three basic choices as a company: 1) accept less profit (lower margins), 2) raise prices to offset higher costs, 3) keep prices the same and look for other ways to offset higher costs, like making your operation more efficient.
Nowhere is this dynamic more apparent than WalMart, where an ill-fated attempt to pay the retailer’s meagerly compensated hourly workers a few extra pennies led directly to fights with suppliers, reduced hours, layoffs at the home office in Bentonville, a kitchen sink guidance cut, and finally, a wave of job cuts and store closures. And all so someone who was poor on $9/hour last year could be still poor on $10/hour this year and poor some more on $11/hour next year. And that’s if they’re lucky to keep their job in the first place.
Below, find excerpts from “Proof Perfect That The Minimum Wage Costs Jobs From New York,” by Tim Worstall as originally published on Forbes.
* * *
From “Proof Perfect That The Minimum Wage Costs Jobs From New York”
It’s long been one of those little puzzlers, why people simply cannot understand that demand curves slope downwards. And since they do that a rise in the minimum wage is going to cost jobs. It’s entirely true that a small rise in the minimum wage will have a small effect on employment and or unemployment. That’s been shown again and again in the various studies: we get either an effect too small to see or we get mildly bad effects. But a rise to $15 an hour isn’t a small rise: it’s larger in both dollar and percentage terms than any that the US has ever tried before. And even campaigning groupuscules like the EPI, who are entirely in favour of a modest rise in the minimum, are on record as thinking that $15 is too much. The ill effects will be larger than the benefits.
Today’s little proof that there will indeed be job losses comes from the discussion of New York’s mooted rise:
A coalition of health care providers — which includes the Home Care Association of New York State, LeadingAge New York, Healthcare Association of New York State, New York State Health Facilities Association — issued a statement Monday stressing how important it is that an increase in the minimum wage include a funding stream.
“Our industries are different from fast food establishments and we cannot just pass the costs along to consumers,” the groups said. “The services we provide are a public good, to large degree supported by reimbursement from public programs that have long provided a safety net for low-income and elderly New Yorkers.
“Without adequate state support for any wage increase, many organizations will close, worker hours will be reduced or eliminated, access to care will be imperiled, and some of our communities will suffer the loss of quality healthcare services,” they added.
Their money comes from taxation: the legislators (and also Cuomo himself, the proponent of the wage rise) aren’t minded to increase taxation to give them any more money. So, thus and therefore, there will be the same budget for wages but each hour of labour will cost more. And so, inevitably, there will be fewer people employed doing this work. As some seem not to have grasped:
There are, however, those who support raising the wage.
Allison Krause, a spokeswoman for 1199SEIU United Healthcare Workers East, a union representing health care workers, said that many nursing home and hospital workers they represent make less than $15 an hour and are struggling to make ends meet. After many years of service, the workers often earn only $10 to $12 an hour, she said.
Ms. Krause is obviously in for a shock when some of her members lose their jobs and have incomes of $0 as a result.
Increased labour efficiency, greater worker productivity, is using less labour. That’s the definition of it. Think about it: home care help. So, before the wage rise we need 10 people to wipe 100 bottoms a day. After the wage increase we have to increase labour productivity. We now, to pay for a 50% pay rise, use one third less labour. We now have to have 7 people wiping 100 bottoms in a day. That is using increased labour productivity in order to pay for that minimum wage rise. That’s just what it means. And note what is happening here: for every 100 bottoms wiped we are using the labour of three fewer people.
- One Of The Most Accurate Forecasters Of 2016: "S&P Is The Most Overbought Since 2009: Sell!"
Lately being a bear has meant sharing quite a crowded field. First it was JPMorgan, which not only said to sell any rallies, but three weeks ago said it had gone “underweight stocks for the first time since the financial crisis“; then technicians such as Evercore ISI summarized their sentiment as follows “I’m out; my bullish tactical call is over“, and then on Monday, even Goldman jumped on the bandwagon urging clients “to go to cash” ahead of “expected elevated volatility” and that the “current relief rally” is almost over.
Today, it’s the turn of UBS’ technicians, Michael Riesner and Marc Muller, best known for calling both of the last two market selloffs in advance (and the concurrent jump in gold), as well as timing the Feb.11 market bottom with uncanny accuracy, when they joined the bearish chorus with one simple plea: “SPX Reaching 2050 Target … Take Profit/Sell!”
This is their call in a nutshell:
Last week, we saw the suggested overshooting into expiration and the SPX reached the upper end of our projected late Q1/early Q2 target at 2050, which leaves the short-term picture in the US unchanged as to what we highlighted last week. With the rally of the last few weeks and looking at our daily trend work, the SPX has reached its most overbought position since 2009!! Together with significant non-confirmations in our medium-term momentum work, and trading in the time window of our late Q1/early Q2 top projection, we see the market vulnerable for a significant reversal this week, which we would see as the beginning of a tactical top building process and subsequent correction into deeper Q2. We reiterate our last week’s comment and would not chase the market on current elevated levels.
The details:
After being aggressively oversold, we saw the February 11th risk bottom as the basis for a multi-week bear market rally in global equities into the late March/early April timeframe with a price target 2000/2050 in the SPX before starting a new significant tactical down leg into deeper summer. Last week, we said that a final overshooting into expiration is still likely, but particularly in the week after triple witching we very often see important tactical trend reversals in the market.
With last week’s extension, the SPX has reached the upper end of our suggested 2000/2050 late March/early April target range, and with this move the technical in the US has obviously not changed. The February/March rebound was nearly vertical, which is not sustainable. On the indicator side we now have exactly the same setup as in early February but just the other way around. Looking at our daily trend work, we highlighted the US market siting in the most aggressively oversold position since its 2008 panic low and it was one of our key arguments for anticipating a significant and longer lasting rally. With last week’s extension our daily trend work has reached its most overbought position since 2009. Together with our weekly momentum reaching overbought extremes we have a relatively high likelihood of seeing the market move into an important medium-term top followed by a significant setback. Even if our big picture market view (US and global equity markets are in a cyclical bear market that we expect to continue into Q1 2017) proves to be too bearish, with such an indicator setup we should see the US market minimum ahead of a multi-week consolidation pattern, where we should see higher volatility and therefore a significant pullback.
Conclusion: The US market is extremely overbought, and from a cyclical standpoint the SPX is trading in the time window of our late March/early April top projection. In this context, we see the US market vulnerable for a significant reversal this week, which we would see as the beginning of a tactical top building process and subsequent correction into deeper/later Q2. On the upside, the SPX has resistance at 2050 and in case of further overshooting we can see 2075/2080. A re-break below 2024 would be initially negative. A break of 2005 would imply that a more important tactical top is forming. From a cyclical aspect we see an initial pullback into first week April where we expect the SPX to test 2000/1970. We reiterate our last week’s call and would use strength to sell instead of chasing the market on the upside.
Will the Riesner-Muller duo make it 4 out of 4 in recent market calls? Keep an eye on the S&P: if we take out the 2034 support level which pushes the market back to red for the year, the answer will be a resounding yes.
- The New "Middle Class" – Making $250,000 A Year In Palo Alto Qualifies For Housing Subsidies
Submitted by Mike Krieger via Liberty Blitzkrieg blog,
Luke Iseman has figured out how to afford the San Francisco Bay area. He lives in a shipping container.
The Wharton School graduate’s 160-square-foot box has a camp stove and a shower made of old boat hulls. It’s one of 11 miniature residences inside a warehouse he leases across the Bay Bridge from the city, where his tenants share communal toilets and a sense of adventure. Legal? No, but he’s eluded code enforcers who rousted what he calls cargotopia from two other sites. If all goes according to plan, he’ll get a startup out of his response to the most expensive U.S. housing market.
Iseman collects $1,000 a month for each of the 11 structures parked in the 17,000-square-foot warehouse he rents for $9,100. Tenants include a Facebook Inc. engineer, a SolarCity Corp. programmer and a bicycle messenger.
– From last year’s post: The Rent is Too Damn High – San Fran Residents Pay $1,000 a Month to Live in Shipping Containers
Welcome to the new normal, where in bubble communities, $250,000 per year is now a middle class income.
Nothing to see here.
From CBS News:
PALO ALTO (CBS SF) — Palo Alto is seeking housing solutions for residents who are not among the region’s super-rich, but who also earn more than the threshhold to qualify for affordable housing programs.
The city council has unanimously passed a housing plan that would essentially subsidize new housing for what qualifies as middle-class nowadays, families making from $150,000 to $250,000 a year.
Sky-rocketing housing prices in Palo Alto have left some in limbo; with teachers, firefighters and other government workers not earning enough to afford cost of living.
Randy Bean says while she still loves her Palo Alto neighborhood, she can’t help but notice the changes that are making it unrecognizable.
Some of the small two-bedroom, one-bath homes on her block are worth between $1.5 and $2 million – as teardowns. That’s just what the dirt is worth.
“Prices have just gone through the roof, making it unaffordable for middle-class people, your firefighters, your teachers, and, frankly, some of your doctors,” Palo Alto Vice Mayor Greg Scharff said.
“We have people struggling to make it at a quarter-million dollars a year,” Bean said. “That’s a terrible thing.”
For related articles, see:
The Rent is Too Damn High – San Fran Residents Pay $1,000 a Month to Live in Shipping Containers
Doing God’s Work – San Francisco Church Sprays Homeless People with Water to Keep Them Away
Political Activists May be Banned from San Francisco’s Public Transportation System
- "Sorry For Brussels"
Presented without comment other than to say that the boy pictured below is among thousands of Mid-East refugees stranded in the Idomeni camps near the Macedonian border that have been described as “a modern Dachau.”
- Stocks Stand On "Tremulous Grounds"
For those that have been following this chart for a awhile you can just skip down to the chart and following commentary. And as always: If someone says they “know” precisely what will happen next. My only advice would be to run – don’t walk. And the quicker, the better.
For those who are new: whenever the markets have either rallied or fallen in dramatic fashion is when I’m asked the most, “What do you think of the latest moves?” So, in response to this I began sharing the following chart and commentaries at precisely times like these. I make these commentaries in real-time. Where they go from here is anyone’s guess. That said, the chart speaks for itself as the consequential moves at these defining points as I said, are made in real-time, before they happen, just like I’m doing now. I state my observation, and thoughts, and let the chips fall where they may. To wit:
Below is that chart as of the close tonight (being Tuesday). As you can see where I had marked “here” and “or here” with grey ovals we did in fact land squarely there where I postulated once, and if, the level directly above was breached. Then the following price action took us directly back up to about that same level and cascaded once again back down, again, to that all important “Bullard Bottom” level.
Then, as I iterated, if that level didn’t break with conviction (conviction implying a break and close well below) we would more than likely return to it again, and where it went from there was anyone’s guess. Would we go up? Or, would we go down? Which is represented by, “#8 You are here.”
(click image for large legible version)
SPX as of the close Tuesday 3/21/16
However, this level (in my opinion) is not just some arbitrary level. In a technical view I marked it with those two-line precisely because it represents a price gap as you can see. When I insinuated that first “here,” we had not touched that level and were well above it. Yet, I argued “If we get through to “here” then returning to the “Bullard Bottom” is near a certainty. Which as we now can see in retrospect, we did just that represented by “#7 And here we are.”
After piercing but not following through with a conviction styled closed we bounced precisely back up to this area (area being #8) only to return in much the same manner, and once again repeating that very same process in an almost mirror fashion as can be seen by the marks I placed with the smaller side-by-side ovals marked by “#9 It is still all about….”
Had that once again return back to that level marked by “#8” held? And had we returned in that subsequent fashion to once again test that “Bullard Bottom?” I am of the mindset the markets would have been dealt a serious shaking of confidence and the previous selloff in August of last year would have looked more like a warm up as compared to what I felt might be forthcoming if retraced and convincingly breached. But we didn’t – we went up and over not looking back.
So what does that mean as of today? Well, here is where I think we actually could be at a far more important level, as well as, turning point, with far more repercussions to the markets, as well as the economy in general, if things were to go awry here. And here’s my reasoning…
As you can see we are currently where I marked “#10” which is right back to where we were nearly 15 months ago in November of 2014 when QE 3 was shelved, and then, just a year later, in December of last year just 3 short months ago, this precise same level is the same when the Fed. actually did raise rates. Even if ever so slightly. What happened next?
The resulting market response is that gap of two lines directly beneath the “#10” and even more important – directly below as in “within spitting distance” of where we stand currently. In other words just a mere 10 points.
I am of the opinion: the only reason why we made it up here above that demarcation line marked by the “#8” was a direct result of a first trading day of the month fund manager buy-ins that ran the stops at that level, popping it up, and enabling it to close with conviction well above that level, which opened the door for more pile on and front running by both the HFT’s and others as to crush any remaining short positions as the market screamed higher into an OPEX (e.g. options expiry) cycle close of where we ended on Friday. Which is precisely where we still are here on Tuesday.
There are many things (too many to list actually) so for the sake of brevity I’ll just state the following:
First – we know via underlying measurements and market breath that the quality of this rally (i.e., the strength or conviction of buyers) has been nothing more than short covering fueled window dressing.
Second – much of that “fuel” was lit by either the Fed. punting once again on interest rate hikes. Or, a Fed. official jawboning what the market wanted to hear (or the algo’s want to read) in one form or another.
And Third – You now have terror on the “markets” mind in two forms. First: that of the serious and horrendous kind as witnessed in Europe today. And secondly – the terror that earnings season in not only once again right on the horizon – GDP is once again to be reiterated on Friday.
If for any reason the markets take the news as a signal for “It’s time to get outta Dodge!” (and no one knows if good is good, bad, or indifferent any longer) And we break back below that gap of where we are with conviction? I am of the opinion that the subsequent rally we have been on over the last few weeks or so will be retraced and not only violate that “Bullard Bottom” but will do so with conviction and spike down to levels not seen in years. Again let me iterate – and quickly! Why?
Because this latest rise has been on very, very, very, (did I say very?) tremulous grounds with outright weak demand. Therefore, if it falls apart, it will fall apart like a house of cards. We may get a “pause” in-between selloffs should it present itself. However, if it does turn I believe it will resemble when I first put the label of “#2 Level you are here….” For those who have followed this chart and my iterations you’ll remember what happened next. For those who are new…
Five days later we were at #4.
As always, it’s anyone’s guess. But that’s how I’m currently viewing these “markets” as of today. Make of it what you may.
- EIA Inventory Report Analysis 3 23 2016 (Video)
By EconMatters
Imports this past week was the main culprit for the large inventory build in oil.
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