- Peddling The Corruption Of Liberty
Submitted by Tibor Machan via Acting-Man.com,
Liberty’s Detractors
Ever since the idea of individual liberty has achieved some measure of credibility over the world, those who would be unseated by its limited triumph had to find some way to discredit it or trump it somehow. One way was to re-christen servitude, to make it appear like an even more important kind of liberty than what individual liberty, properly understood, amounts to.
Puppets and puppeteers…
When a human being is free in the most important, political sense, he or she is sovereign. This means he or she governs his or her own life—others must refrain from intruding on this life, plain and simple. That life may be fortunate or not, rich or not, beautiful or not, and many other things or not, but what matters is that that life is no one else’s to mess with. One gets to run it, no one else does.
Now this is a very uncomfortable idea for all those folks who see all kinds of benefits from running other people’s lives. But they cannot champion this now in so many words, what with individual liberty having gained solid standing, so the only way to remedy matters for them is to claim that their oppression brings even greater freedom to people than the respect and protection of individual liberty.
The Ruse of “Positive” Freedoms
So, we have the kind of “freedoms” propounded by Franklin D. Roosevelt, the freedoms now dubbed “positive.” These freedoms do not get rid of those who would use you, interfere with you, invade your life, rob, kill, or assault you but promise, to the contrary, to take good care of you without your having to do much by invading others, by violating their individual liberties.
These are the entitlement rights offered up by proponents of the welfare state, all those who claim that government is best when it is generous, when it becomes the Nanny State—meaning, when it enslaves Peter to serve Paul:
Franklin D. Roosevelt: made a nanny state out of a Republic. Benjamin Franklin once noted that the founders had given US citizens a Republic, “if you can keep it”. This afterthought turned out to be prophetic.
I am not sure about what exactly motivates this ruse—some of it is surely the thirst for power. When you want to enslave people, promise them a special kind of liberty. Castro managed to win over millions of Cubans this way, as did other Marxists in Eastern Europe and in Latin America, as well as some jihadists.
Maybe a few folks actually honestly believed that this kind of political alternative is best for us all, but it is difficult to imagine what would persuade them of such a fraudulent notion. Giving people this “positive” freedom must always involve depriving other people of their individual liberty, their “negative” freedom, which is to say, their sovereignty and their freedom from having others interfere with their lives, from depriving them of their resources and labor and regulating (nudging) them to the hilt.
Marxists and other ideologues of their ilk all have in common that they promise their supporters a better material life than they could achieve otherwise. Not only have they never named the price their subjects would have to pay, but their promises turned out to be false as well.
Clear Thinking and Eternal Vigilance Required
Now, there is little that can be done about this in the short run—when people put their minds to such deceptions, the only ultimate defense is clear thinking and vigilance, which is unfortunately always in short supply and needs to be slowly cultivated. Too many people are tempted by the promise of effortless living, of getting all their problems solved at the point of a gun turned on others who will be coerced to come up with the solutions.
This is such a sweet notion to those who are lazy, who feel left out, or who believe that they are entitled to everything all those who are better off already have going for them, so the power-hungry have a good marketing ploy here.
Envy, maybe, or the bogus political ideologies promoted by those who just must step in to govern the world as they see fit—as I say, I am not sure what kind of mental acrobatics manages to allow people to live with themselves in peace who perpetrate such fraud.
Despite the fact that there is little one can do in response, other than to keep spelling out just what a ruse it all is, perhaps now and then institutional barriers can also be built. Yet, since they too depend upon ideas, ideas that are so easily corrupted, the only real answer is the old one about eternal vigilance. I say, it’s worth it, so let’s go for it.
- The Richest Zip Codes In America In One Map
The Hamptons. Beverly Hills. Greenwich, CT. These places are the stomping grounds of the rich and famous. Today’s infographic, courtesy of Visual Capitalist, maps out all of the richest zip codes in America, leaving no country club or gated community unturned.
For each state, the richest three cities or neighborhoods are shown along with the associated number of tax returns. This is a more in-depth version of a similar graphic we posted months ago that showed the incredible wealth in counties surrounding Washington D.C.
Also included in today’s post is the 100 highest tax-paying zip codes throughout the United States.
- Peter Schiff: The Shot Not Heard Around The World
Submitted by Peter Schiff via Euro Pacific Capital,
China’s recent move to devalue the yuan has sent shock waves through the global financial markets and has convinced most observers that a new front in the global currency wars has begun. The move has caused many observes to envision a new round of competitive devaluations around the globe in which the race to the bottom will intensify. In this scenario they envision that the U.S. dollar will solidify its standing as the only strong currency. This misses the point entirely.In the past, most of the action in the "currency wars" had been focused on the efforts that many nations undertook to prevent their currencies from rising against the U.S. dollar, which itself was being weakened by a perpetually easy Federal Reserve and persistently negative U.S. trade and budget deficits. But with the dollar now strengthening significantly, the Chinese government has become concerned that the yuan, which has remained largely tethered to the dollar, had become too strong against other currencies, particularly its primary trading partners in Asia and the Pacific. To remain competitive locally, it decided to ease the tether to the dollar and instead let its currency float more freely. The purpose and implications of this significant pivot has largely escaped the U.S. media. In reality, the move raises the likelihood that the yuan will rise significantly when the dollar resumes its long-term bear market, not that it will remain weak forever.It is surprising how quickly market observers ascribed the recent losing streak on Wall Street to jitters over the 2% yuan devaluation. The development provided a convenient excuse for those who continue to deny that any economic weakness in the U.S. is chronic and self-generated. But why should America be so concerned with a small drop in the yuan? After all, we have supposedly done quite nicely for ourselves economically even while currencies like the yen and the euro, and all the other major currencies around the world, have fallen more than 20% against the dollar since May of last year.In truth, the U.S. markets had been selling off for days before any change in policy from Beijing became remotely clear. With U.S. economic data deteriorating, corporate earnings falling, and 95% of economists forecasting a rate hike in the next few months, a sharp sell-off of already wildly valued stocks could be considered a logical development that needs no overseas explanations. But given that this is a reality that no one prefers to acknowledge, the yuan devaluation comes at a convenient time.The last round of the currency wars began around 2010, when pronounced dollar weakness resulting from the Fed’s Quantitative easing experiment and the Federal government’s annual trillion dollar plus deficits had caused the dollar to fall sharply against most other major currencies except the yuan, which did not rise because the Chinese were enforcing a peg against the dollar. To affect the linkage, China had to accumulate trillions of U.S. dollar reserves, with the added benefit to America of keeping a lid on long-term interest rates and consumer prices, that would not have been there absent China’s help. As a result, many currencies gained value against the dollar and yuan simultaneously. Faced with such scary prospects, many countries devalued to keep things in equilibrium; hence the race toward the bottom.In contrast, I believe this time around Beijing was forced to act because the continuously surging dollar had been bringing the yuan along for an unwanted ride upward. This resulting movement against other currencies was not driven by fundamentals and put China at a disadvantage against its local trading partners.By letting their currency float more freely, their principle concern was not their exchange rate with the dollar, which had remained largely fixed, but their exchange rates with currencies like the Japanese yen, the Australian dollar, the euro, the Canadian dollar, and other emerging market currencies in Latin America and South East Asia. This shows where the Chinese are placing their priorities.While making its devaluation announcement, Beijing said that it wanted its currency “to reflect fundamentals” and to no longer simply mirror the movement of the dollar. It acknowledged the fact that its peg to the dollar was problematic and that it wanted a better, more natural mechanism. This is the key to understanding the announcement: The Chinese are preparing for a time in which the financial world does not spin in orbit around the dollar. Such a reality must make us think about the future.Perhaps the Chinese feel as I do that the current dollar rise has all the earmarks of a classic bubble. After all, a major part of the dollar rally over the past year has been the hollow beliefs that the U.S. economy has fully recovered and that the Fed, in 2015 and 2016, will be able to raise interest rates and shrink its balance sheet substantially even while the world’s other major central banks continue to deliver stimulus. If they see the fallacies that I do inherent in these naïve assumptions, they may be sparing a thought or two as to their best course of action if the dollar bear market resumes, as it surely must.What will happen if current trends continue and the U.S. economy slips back toward recession? Any sober reading of the current economic data, which shows anemic investment, minimal productivity growth, barely positive GDP growth, wage stagnation, and falling labor participation, should allow for the strong possibility that recession is looming in the U.S. If it occurs, or to prevent it from occurring in an election year, the Fed will be forced to immediately shelve its tightening plans (if it even has any) and instead deliver another round of QE. When that occurs the confidence that inspired the dollar’s rise will prove to have been misplaced, and the rally nothing more than another Fed-induced bubble.By decoupling from the dollar now, China is sending a message that it may be prepared to let it fall later. This means that when the dollar starts to fall in earnest, China may not be there to catch it. This will also mean that the biggest foreign buyer of Treasury bonds will likely be sitting on its hands when deteriorating U.S. finances force the Treasury to begin issuing trillions of new bonds annually. So when the U.S. needs China’s help the most, it will be unwilling to provide it.In the absence of a Chinese backstop that the U.S. has for too long taken for granted, when the dollar resumes its decline, the fall will be much more pronounced. This will also generate significant upward pressure on both U.S. consumer prices and interest rates that was absent five years ago, when Chinese buying provided a huge cushion to the U.S. economy. In fact, data indicates that China is already paring the amount of Treasuries held in reserve. That means a full blown dollar crisis may not have been averted, but merely postponed, with the dire warnings of U.S. hyperinflation potentially coming true after all.The move may also rekindle to the Chinese appreciation for gold as a safe haven asset as the yellow metal has surged in yuan terms over the past few weeks. Increased buying in China indicates that this may indeed be the case.
Given the importance of gold to the typical Chinese investor, the yuan/gold exchange rate may become more important globally than the gold/dollar rate.
- Chinese Air Pollution Kills 4,000 People Each Day (And Why It Will Kill Many More)
Every quasi-mushroom cloud has a silver lining. That was our cynical conclusion yesterday when we noticed that as part of China’s tragic Tianjin mega-explosion, thousands of channel-stuffed cars parked at the Chinese port which likely would have quietly rusted away into the epic nothingness of China’s unprecedented excess capacity of pretty much everything, were destroyed, thereby one-time reducing at least some of the gargantuan slack in the Chinese economy.
Which got us thinking: if natural disasters, either accidental or man made, are a tangential blessing to the Chinese economy, why stop at the Tianjin explosion? What about the biggest bogeyman facing China today – its environmental catastrophe, demonstrated best by the impenetrable, carciongenic and toxic smog resulting from the accelerated industrialization of the country, and which the citizens of Beijing, Shanghai, and increasingly more cities, have to breathe in day after day?
It has hardly been a secret that the unprecedented level of pollutants in the Chinese air would impair life expectancy and lead to extensive health problems, but even we were surprised to find out the quantification of China’s air problem: according to one study, an average of 4,000 people a day are killed in China, as a result of the dense smog.
According to Bloomberg, “deaths related to the main pollutant, tiny particles known as PM2.5s that can trigger heart attacks, strokes, lung cancer and asthma, total 1.6 million a year, or 17 percent of China’s mortality level, according to the study by Berkeley Earth, an independent research group funded largely by educational grants. It was published Thursday in the online peer-reviewed journal PLOS One from the Public Library of Science.”
“When I was last in Beijing, pollution was at the hazardous level: Every hour of exposure reduced my life expectancy by 20 minutes,” Richard Muller, scientific director of Berkeley Earth and a co-author of the paper, said in an e-mail. “It’s as if every man, woman and child smoked 1.5 cigarettes each hour.”
To be sure, Chinese authorities have acknowledged the air pollution situation after heavy smog enveloped swathes of the nation including Beijing and Shanghai in recent years. As a result, they’ve adopted air quality standards, introduced monitoring stations and cleaner standards for transportation fuel while shutting coal plants and moving factories out of cities. So far, however, all the proactive measures seem to have little result.
“The PM2.5 concentrations far exceed standards, endangering people’s health, though air quality has improved in the first half in the 358 Chinese cities,” said Dong Liansai, climate and energy campaigner at Greenpeace East Asia.
As Bloomberg further reports, Muller and co-author Robert Rohde analyzed four months of hourly data for some 1,500 ground stations in China. They then employed a model used by the World Health Organization to calculate the disease burden.
They found that 92 percent of China’s population experienced at least 120 hours of unhealthy air during the April 5, 2014, to Aug. 5, 2015 study period. For 38 percent of the population, the average pollution level across the entire four-month period was deemed unhealthy.
Here one may wonder whether the US DOE funded Berkley researchers were pursuing some specific, anti-coal agenda, as confirmed by the following assessment:
“the Berkeley Earth researchers also examined where the pollutants were detected and concluded that the sources of PM2.5s matching those for sulfur dioxide suggests most of the pollution comes from burning coal.
“Sources of pollution are widespread but are particularly intense in a northeast corridor that extends from near Shanghai to north of Beijing,” the researchers wrote. “Extensive pollution is not surprising since particulate matter can remain airborne for days to weeks and travel thousands of kilometers.”
China gets about 64 percent of its primary energy from coal, according to National Energy Administration data. It’s closing the dirtiest plants while still planning new, cleaner ones. The country is expected to shut 60 gigawatts of plants from 2016 to 2020 though three times as many plants are scheduled to be built using newer technology, according to Sophie Lu, a Bloomberg New Energy finance analyst in Beijing.
To cut reliance on coal, the nation also wants to derive 20 percent of its energy from renewables and nuclear by 2030, almost double the current share.
But whether it is due to coal or not, is irrelevant: the truth is that China does have a problem with preserving its environment and keeping the quality of its air. Some examples shown previously:
Pollution from a factory in Yutian, 100km east of Beijing
Smog In Beijing
Fishermen clean up oil at an oil spill site near Dalian Port, Liaoning province
Heavily Polluted River In Jiaxing, Zhejiang
Journalist takes a sample of red polluted water in the Jianhe River in Luoyang
Heavily Polluted River
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Which got us thinking: if the Tianjin explosion unclogged the car channel stuffing problem, if only for a few days, then perhaps China pollution serves a different, more ulterior purpose.
Recall that the US social security trust fund is going broke faster by the day since Americans refuse to die at the age they were expected to die when social security was first conceived 80 years ago. As a result, because of progress one of the biggest entitlement systems in the US is on the verga of default.
When it comes to pension and retirement benefits, the US, with its 330 million people, is nothing compared to China with its 1.2 billion and rising. So what is the best way to “resolve” this problem? Perhaps by introducing an external agent, one that culls the population at a pace of 4000 (and rising rapidly) per day.
Because while the number of deaths resulting from China’s smog is astounding, something else very surprising is how little progress has been achieved in the battle to clean up China’s air in the past several years, especially since any long-lasting clean up would also lead to a permanent reduction in the industrial output of China’s manufacturing heartland and lead to, drumroll, a violent drop in GDP, a drop which as the current episode demonstrates, would lead to a collapse in the Chinese stock market, an even greater pop in the housing and credit bubble, and far more violent devaluation of the local currency with the attendant negative global economic impact. Not to mention lead to an extension in the longevity of China’s population, which the local actuaries have just one word for: crisis.
Which is why despite all the rhetoric, and all the “reform” don’t expect China’s pollution problem to get better. In fact, expect it to deteriorate substantially because in the immortal words of that other famous communist, “When there’s a person, there’s a problem. When there’s no person, there’s no problem” and China’s pollution is taking care of 4000 problem each and every day…
- Greeks Flock To Grassroots Alternative Currencies In Affront To Euro Debt Slavery
Submitted by Mike Krieger via Liberty Blitzkrieg blog,
When Christos Papaioannou noticed his car needed new tires, the Greek computer engineer bought them with euros—but used an alternative currency, called TEM, to pay his mechanic for the labor.
His country has avoided a catastrophic exit from the common currency, at least for now. But a small but growing number of cash-strapped Greeks, who are still grappling with strict money-withdrawal limits, have found another route in TEM and other unconventional payment systems like it.
Before then, Ms. Sotiropoulou said she was only aware of two such programs. No official record of the number of alternative currencies and local bartering systems appears to exist in Greece. But according to an Athens-based grass roots organization called Omikron Project, there are now more than 80 such programs, double the number in 2013. They vary in size, from dozens of members to thousands.
– From the Wall Street Journal article: Alternative Currencies Flourish in Greece as Euros Are Harder to Come by
Hundreds of millions of people throughout the Western world are being forced to admit an obvious, yet uncomfortable reality. Democracy is dead. Your vote and your voice doesn’t matter. Not at all.
No group of people understand this as intimately as the Greeks. They voted for one thing, got something else, and in the process were unceremoniously reminded of their political irrelevance. The Greeks are now in a position to show the rest of us how it’s done. Communities need to take matters into their own hands and tackle challenges at the grassroots level. Nowhere is this more impactful and necessary than in the monetary realm, and some Greeks are already leading the charge.
From the Wall Street Journal:
When Christos Papaioannou noticed his car needed new tires, the Greek computer engineer bought them with euros—but used an alternative currency, called TEM, to pay his mechanic for the labor.
His country has avoided a catastrophic exit from the common currency, at least for now. But a small but growing number of cash-strapped Greeks, who are still grappling with strict money-withdrawal limits, have found another route in TEM and other unconventional payment systems like it.
“Money is sparse right now, but people still have the same skills and knowledge they had before the crisis,” said Mr. Papaioannou, part of a cooperative that founded TEM in the port city of Volos and one of nearly 1,000 registered users of the alternate currency there.
“Money is sparse right now, but people still have the same skills and knowledge they had before the crisis.”
Read that line over and over and over again until you realize how simple, elegant and accurate it is.
TEM—a sophisticated form of barter whose name is the Greek acronym for Local Alternative Unit—was founded in 2010 in the early months of Greece’s debt crisis with less than a dozen members. Now it includes dozens of participating local businesses that use the system to sell goods and services, including prepared food, haircuts, doctor visits, or even for renting an apartment.
It is a localized version of what Greece might have to turn to if a tentative bailout agreement reached this week is derailed, or ultimately fails. Before his resignation last month, former Finance Minister Yanis Varoufakis floated the idea of setting up a parallel-currency system based on IOUs in the event that Greece could no longer stay afloat using euros. Without a rescue, the idea of using IOUs is seen as the country’s most likely alternative.
Before then, Ms. Sotiropoulou said she was only aware of two such programs. No official record of the number of alternative currencies and local bartering systems appears to exist in Greece. But according to an Athens-based grass roots organization called Omikron Project, there are now more than 80 such programs, double the number in 2013. They vary in size, from dozens of members to thousands.
“The problems that existed have only gotten worse, and the new deal is going to create problems of its own that will deepen the crisis in certain areas,” said Mehran Khalili, one of the founders of Omikron. “The logical response is to create groups to react to that and fill those gaps that are going to exist because of the unsustainable situation that Greece has found itself in.
Experts say TEM and other local currencies work best side-by-side with the euro, not as a replacement.
“Experts” say. Yeah, the same so-called “experts” who destroyed the world economy and turned the planet into a thieving oligarchy. I think I’ve had enough “expert” economic advice for one lifetime.
One notable example of alternative currencies used during a crisis was in the 1930s during the Great Depression, when the Austrian town of Wörgl decided to fight the economic downturn by printing its own money. Economists called the result a miracle: Employment boomed, while inflation remained subdued. During the economic depression that struck Argentina in 1998 and lasted till 2002, people formed barter networks and several provinces introduced their own currencies.
The alternate currencies have their limitations: The use of TEM, for example is restricted to those people and local businesses that choose to accept them, and won’t directly help people struggling to meet their monthly utility bills.
Maria McCarthy, a British woman who lives in Volos with her Greek husband and children, has earned and spent over 10,000 TEMs in four years by offering English and guitar lessons. She also sells secondhand clothes and other material goods in Volos’ biweekly marketplace, where almost everything besides euros are exchanged.
Mr. Papaioannou says he has paid for renovating parts of his home as well as food and clothing with the currency, and an increasingly larger share of his computer-repair work is done through transactions with TEM.
“You’re used to a method of doing things,” he said, “and suddenly, you realize there are other ways too.”
You’ve gotta love the Greek spirit. You can knock them down, you can embarrass them, but you can’t kill their spirit. Everyone else on the planet must recognize that what is being done to Greece will be done to us all in turn. We must show totally solidarity with them against the euro-fascists.
- Using Hollywood Movies To Call Market Tops
Previously we reported on Horseman Capital’s uncanny ability to generate market-beating returns (outperforming 98% of peers since 2012) despite having a net -50% short position offset by treasury longs. Now, we take a quick detour into one of the prop investment bets used by Horseman’s CIO, Russel Clark, namely Hollywood’s ability to pull a Dennis Gartman, and make a dramatic appearnace at all the key market inflection points.
From the July Horseman Letter:
I notice with interest, that Hollywood still retains its unmatched ability to call market tops. 2014 film, “Jack Ryan: Shadow Recruit” details a plan by Russia to crash the US dollar and destabilise the American financial system. At the time of the film’s release, 34 rubles bought 1 USD, while at time of writing you require 62 rubles to buy 1 USD. If anything, you could argue that sanctions, plus the US deal with Iran have been a plan hatched by the US to crash the ruble and destabilise the Russian financial system!
Another 2014 film was “Interstellar” a film I enjoyed so much that I think I have seen it three or four times. Curiously, the film begins in the future, but is never explicit in dates. A search on the internet has most people suggesting the film being set in 2060s or 2070s. The film implies that in the 2030 or 40s declining natural resources causes technological progress to reverse and humans to seek a new planet to call home. Curiously, since Interstellar’s release date sugar prices have fallen 35%, milk prices by 45%, and oil prices by 35%.
While I generally cite Hollywood for its reverse indicator power, the literature world can also work. 2014 release and Man Booker Prize nominated “Bone Clocks”, by David Mitchell of Cloud Atlas fame, also imagines a future where energy and technology becomes increasingly scarce, and that China is the dominant country globally. This comes in a story set in 2045, although we can assume that the crisis occurs in the 2030s.
The themes in Bone Clocks seem to match up quite closely with the 2012 film “Looper” which I discussed in my Hollywood note. The film was set in 2044 and depicted a future where the US had fallen apart. The protagonists in the film solely used gold, silver and Renminbi as currency, implying that the US dollar had continued to fall in value. We can see that the creative industry views on commodities have been proven wrong. However, the assumption in Bone Clocks and Looper that China will continue to be ascendant versus the US has not been disproved. From an economic and currency perspective, China has continued to be the one currency that has held its value versus the US dollar recently, and the economy has continued to grow at 7% a year.
There are signs of weakness emerging from the Chinese economic growth perspective and more and more companies report slowing growth. Furthermore, the People’s Bank of China has recently suggested widening of the trading band for the Renminbi to allow more flexibility. Perhaps a first step to devaluing? Your fund remains long bonds and short equities.
* * *
The above letter was written just a few days before China devalued its currency by the most on record.
- 10 Disturbing Facts Most Americans Are Too Fearful To Face
Submitted by Bernie Suarez via ActivistPost.com,
Sometimes you have to put out information in hopes that those who haven’t heard this will at least absorb a fraction of it. If you haven’t heard this and you absorb just one of these random points, I believe that may be enough to cause a major paradigm shift in your life or in the life of someone you know. Here are 10 random, mostly recent but some archival information that is factual and verifiable for anyone willing to look it up.
1. Genetically Modified Foods are illegal in many countries for health and medical reasons all the while the U.S. passes laws making GMO labeling illegal.
You may be thinking, say what? That’s right. U.S. citizens are being propagandized daily and are being practically forced to blindly consume GMOs while countries like Austria, Bulgaria, Germany, Greece, Hungary, Ireland, Japan, Luxembourg, Madeira, New Zealand, Peru, Australia, Russia, France and Switzerland all have booted Monsanto and their GMO crops from their countries. That’s like being booted out of a town for being a rapist and child molester only to have that same person settle into the next town over and become a grade school teacher or pastor. Now imagine the citizens of that other town having a law forced on them that says rapists and child molesters must be allowed to teach little kids and run churches. That’s what we’re talking about here.
While humanity in other countries wakes up fully to the dangers of GMO foods, Monsanto and other GMO food producers are having a feast in the U.S. buying out politicians, distorting news, research and evidence that proves GMO foods are directly linked to cancer. Like a scene from a bad movie, only it’s not a movie. Actually it’s YOUR life if you are in the United States dealing with this nightmare.
As bizarre as it seems, only in the U.S. do criminal corporations like Monsanto enjoy the benefits of the support of the political and legal system. A bird’s eye view of the situation clearly shows how corrupt and evil the control system in the United States really is. Sadly, most Americans have no idea that they are being lied to every day and lured into eating dangerous cancer-causing and health-destroying food just so that someone can profit from your disease later on.
2. As a result of “Act of 1871″ by the 41st Congress, the United States “Corporation” was created to trample the original Republic.
Shockingly, this fraudulent synthetic corporate government entity is the only “United States” most people in America know today. And this non-governmental corporate entity covering a 10-square-mile grid in Washington D.C. parades as a sovereign legitimate government and has been doing so for over 100 years.
Of all the things that need to be repaired and reversed in the United States, this single issue is one of the most important root issues for people to wrap their heads around.
Imagine the impact of getting a real grassroots movement of people to push awareness of the truth of the current District of Columbia U.S. Corporate Government and the corresponding imitation Constitution OF the United States (instead of “For” the United States as stated in the original organic document).
This is one of those issues that most people don’t know where to start, how to apply this idea, and how to lead this idea in a meaningful way so they simply give up. The fact is that people are afraid to face this mega-sized issue with overwhelming implications for the average person.
3. “7 countries in 5 years.”
This wide open confession came straight out of the mouth of U.S. General Wesley Clark years after the illegal invasion of Iraq. The General openly spilled the beans on the U.S. military’s plan to illegally invade 7 countries in the Middle East under the lie of the war on terror. Shockingly, to this day no war crimes trials have taken place. No one has been executed, convicted or imprisoned for these massive crimes against humanity. Shockingly, the criminals even still make TV appearances and prance around the country offering their opinions and enjoying a comfortable life appearing at events and speaking.
In fact, General Wesley Clark himself ended up being promoted to lead NATO units in the Middle East. He has even made recent propaganda appearances on TV playing into the Jade Helm “master the human domain” psyop teasing freedom lovers with Hitler-like rhetoric about caging anyone who doesn’t agree with the U.S. government!
4. The U.S. military and its defense contractors have over 150+ live and legitimate patents for spraying the sky with nano-particles, all the while the masses are told it’s a “conspiracy.”
Those still unaware of this may be shocked to know these patents are not even hidden from the public. You can read them all for yourself. Despite this open knowledge these programs roll on comfortably as we have observed their spraying techniques change from various forms of chemtrails to aerosolized plumes/injections or chembombs to a mixture of both.
Astoundingly, we are now living at a time when we are surrounded by a generation of young Americans that think tic-tac-toe is normal in the sky. They think that crazy lines in the sky are part of nature. They see advertisements with lines in the sky and think nothing of it. They have no idea that not long ago there was a time when there were no lines in the sky at all. They have no concept of blue skies and clear starry nights. Shockingly and sadly an integral part of this lack of knowledge is the fear of knowing. More than any other topic, probably the spraying of our skies is cloaked in fear and anxiety of what to do if it is true. Many people would rather not know.
5. As briefly mentioned in #3, the United States Military is currently conducting an admitted A.I. psychological operation on the human domain as people carry on as usual.
It’s called Jade Helm and right now learning more about Jade Helm for many Americans means putting down that remote control, turning off that ballgame, pausing the video game or missing their favorite TV show. It takes work to research this and, more importantly, the insecurity that comes with knowing that our own military is studying you the individual to control you is again too profound to really understand for some. They might ask, why would the military do this? Not knowing that the new world order has been planned for over 100 years now.
This is another issue that is too overwhelming for the average person to understand or, more importantly, face head-on. SOCOM documents exposed by researchers are clear about the intention of Jade Helm Jade 2 software and no matter how much you ignore it, it’s still here, it’s very real and it’s in motion as we speak.
6. The entire debt-based fiat worthless paper money circulating in the U.S. is supplied and controlled by a private corporation with no legal authority to do so.
We call them the Federal Reserve. It’s the illegal private banking system created officially in 1913 under the Federal Reserve Act which Congress gave a green light to. This single act essentially handed the United States of America to a gang of private bankers with no accountability to the people. Along with the Act of 1871, this Federal Reserve Act is also one of the most significant and horrific turning points in the history of America. An act that accounts for many of the problems and sufferings in America for now over 100 years.
If enough people could finally wrap their heads around this single reality, that a private illegal mob of banksters have psyched out and enslaved Americans, fooling them into accepting their fake fiat currency while ensuring their perpetual enslavement, the full-on revolution would start today.
7. Throughout the history of humanity people do things by planning it out; this simple act of organizing is considered bizarre, unlikely and improbable by a generation of brainwashed people controlled by one hypnotic phrase – “conspiracy”!
That’s right. You may be reading this and thinking this refers to you. The simple phrase “conspiracy” or “conspiracy theory” has singlehandedly mind-controlled millions of Americans like no other word or phrase has. Unfortunately, there is no way around it. “Conspiracy” is a substitute word for an otherwise ordinary act of planning or coordinating. Something all people do, especially groups like corporations and governments. You MUST plan, organize, or “conspire” to do things. That’s how things get done!
8. The U.S. has been caught numerous times militarily defending, arming, supplying and training ISIS fighters.
Here we are at the one-year anniversary of the ISIS super psyop American TV marketing campaign, and today the ISIS psyop has been blown wide open more often than the amount of times the global warming movement has been exposed as lies. These reports trapping U.S. and Israeli (NATO) governments in baldfaced staged lies and capturing solid evidence of their support for ISIS have gone completely ignored and censored by U.S. mainstream media to keep the ISIS psyop narrative going in the minds of Americans.
The situation is so controlled and so propagandized that even if every member of ISIS went on TV tomorrow exclusively expressing their partnership with the CIA and Mossad, the very next day U.S. mainstream media will present another ISIS story telling you how much they are the enemy and need to be defeated. Make no mistake, this control system is completely immune and entirely unfazed by truth, hard evidence and hard facts.
9. Turning back the clock – 5 Israeli men were caught, arrested, fingerprinted and detained on September 11th 2001.
After they were celebrating the destruction of the world trade center seconds after the buildings were destroyed, while the buildings burned AND while the rest of America watched in shock and tears. These men were later mysteriously released back to Israel where they bragged on camera about being in New York City to “document the event”. The history of Israeli entities’ involvement in the 9/11 attacks are particularly concrete, yet the frightening reality is that today’s U.S. mainstream media acts like none of this ever happened.
For this reason it’s always good to remind everyone that this is very real. The individuals names are Sivan Kurzberg, Paul Kurzberg, Yaron Shonvel, Oded Ellner and Omer Gavriel Marmari and they were given a clean pass back to Israel by then Chief of Justice Department Michael Chertoff. Of course Chertoff would later become Director of George Bush’s Homeland Security and play a significant role in writing the Patriot Act. Plainly put, one of the head masterminds of 9/11 essentially singlehandedly released a handful of key 9/11 suspects and allowed them to fly peacefully and freely back to their Israel homeland to brag about what they did.
10. In the U.S, like it was with Hitler’s Germany, propaganda is perfectly legal.
Most Americans have no idea this is the case. They don’t realize that the U.S. corporate fraudulent government can legally lie to you every single day to get you to believe whatever they want you to believe and then turn around behind closed doors and laugh at you for believing their legal lies. Try telling that to most Americans and see how they look at you.
This is another example of a hard-to-handle lie that is pushed on Americans every day; and the average working American has no time to truly wrap their heads around this stunning fact so they bury their heads in the sand instead, unwilling to look at the issue because they fear they won’t know what to do with the information.
It’s no wonder that today’s TV shows and comedic rants are often shaped to put a positive slant on lying. To trivialize the seriousness and the consequences of lying. They even make lying seem like an evil necessity or even a cool trend. Most people are completely unaware of these subliminal messages that endorse the control of a government whose survival is dependent on continuous lies and deceit.
Solutions
Let’s keep sharing the information and forcing people to look at this information. These are just 10 random issues I felt are important, but there could be another 10 here just as easily. Information is spreading and people are getting this. Sometimes it takes hitting rock bottom before people take action and start to think differently. Whatever drives someone you can always be sure that pushing the information will help accelerate this process. Let’s keep doing that and if you agree share this information with someone and give them something to think about.
- This Alarming Indicator Is Back At A Level Last Seen 10 Days Before The Bear Stearns Collapse
One of the most disturbing and recurring themes highlighted on this site over the past year has been the ever greater disconnect between the worlds of equity and fixed income, whether in terms of implied volatility, or actual underlying risk.
It turns out there is an even more acute, and far more concerning divergence, which was conveniently pointed out overnight by Bank of America’s Yuriy Shchuchinov, one which again looks at the spread between credit and equity. Specifically, BofA notes that in just the past two weeks, credit spreads from our HG corporate bond index have widened another 9bps to 164bps while equity volatility is down another percentage point (although technically BofA uses the 3rd VIX futures as its measure of equity volatility rather than VIX itself to get a smoother series that is less affected by the daily noises and seasonalities).
This is how the resulting dramatic divergence looks like:
Why is this notable?
In BofA’s own words: “this spread currently translates into 10.26 bps of credit spread per point of equity vol, the level reached on March 6, 2008 – ten days before Bear Stearns was forced to sell itself to JP Morgan for $2/sh. Recall that – unlike the credit market – the equity market well into 2008 was very complacent about the subprime crisis that led to a full blown financial crisis.”
In other words: unprecedented equity complacency matched by a state of near bond market panic.
BofA is quick to note that it is “not predicting another financial crisis” but believes “it is important to keep highlighting to investors across asset classes that conditions in the high grade credit market are currently very unusual.”
BofA’s conclusion:
The key reason for this weakness is that our market has transitioned from “too much money chasing too few bonds” to “too many bonds chasing too little money”. That shift is motivated by the impending Fed rate hiking cycle as issuance, M&A and other shareholder friendly activity has been accelerated while at the same time demand has declined. Again, we are not trying to predict a crisis – only to point out that the upcoming rate hiking cycle appears to concern issuers and investors so much that they have been taking real actions that have repriced our market lower relative to equities to an extent that we have only seen during the financial crisis.
And, of course, there is the whole deflationary commodity collapse-slash-China crash/devaluation/bursting credit/housing/market bubble, which also is a screaming read flag, but which stocks have also decided to ignore because, well, “central banks got their back.” Until they don’t.
In the meantime, we can’t wait to find if this is the first time in the history of capital markets when it is stocks that are right, and bonds wrong. Because if not, we are confident that nobody, certainly no equity traders, is positioned in a way that another Bear Stearns-type blow up will be merely chalked away to the ever growing list of things that one should simply ignore and focus on an S&P which remains just a few percentage points below its all time record high.
- One-In-A-Billion "Hiccups" Are Happening All The Time, Citi Warns Something Is Wrong
Earlier this year JP Morgan’s letter to shareholders, Jamie Dimon let it slip that there are some very disturbing things going on in today’s capital markets. Prices can gap in illiquid markets, Dimon explained, and that has the very real potential to spark a panic, causing illiquidity to spread to previously liquid markets. Dimon warned that one should not be fooled by relatively tight bid-asks; it’s market depth tells the true story, and as JP Morgan’s Nikolaos Panigirtzoglou will tell you, some markets (the Treasury market for instance) are getting quite thin indeed.
The dangers associated with a widespread lack of market depth are of course exacerbated by the presence of HFTs. This was on full display during last October’s Treasury flash crash. Here’s what Dimon had to say on the subject: “..then on one day, October 15, 2014, Treasury securities moved 40 basis points, statistically 7 to 8 standard deviations– an unprecedented move – an event that is supposed to happen only once in every 3 billion years or so.” “Some currencies recently have had similar large moves,” Dimon added, referencing the carnage that accompanied the SNB’s abandonment of the euro peg in January (as well as countless other flash crashes and rips) and presaging precisely what we’ve seen this week on the heels of China’s move to devalue the yuan.
The takeaway from all of this is not, as Dimon concluded, that statistics can’t be trusted, but rather that when things that are supposed to happen once every 3 billion years start happening once every three months, or every three weeks, then something is definitively broken.
Here, courtesy of Citi’s Matt King, is a look at some of the major one in a billion year events that have taken place over the last four years:
As King notes, either there’s a “widespread case of the hiccups”, or something else is very, very wrong.
- US Military Uses IMF & World Bank To Launder 85% Of Its Black Budget
Submitted by Jake Anderson via TheAntiMedia.org,
Though transparency was a cause he championed when campaigning for the presidency, President Obama has largely avoided making certain defense costs known to the public. However, when it comes to military appropriations for government spy agencies, we know from Freedom of Information Act requests that the so-called “black budget” is an increasingly massive expenditure subsidized by American taxpayers. The CIA and and NSA alone garnered $52.6 billion in funding in 2013 while the Department of Defense black ops budget for secret military projects exceeds this number. It is estimated to be $58.7 billion for the fiscal year 2015.
What is the black budget? Officially, it is the military’s appropriations for “spy satellites, stealth bombers, next-missile-spotting radars, next-gen drones, and ultra-powerful eavesdropping gear.”
However, of greater interest to some may be the clandestine nature and full scope of the black budget, which, according to analyst Catherine Austin Fitts, goes far beyond classified appropriations. Based on her research, some of which can be found in her piece “What’s Up With the Black Budget?,” Fitts concludes that the during the last decade, global financial elites have configured an elaborate system that makes most of the military budget unauditable. This is because the real black budget includes money acquired by intelligence groups via narcotics trafficking, predatory lending, and various kinds of other financial fraud.
The result of this vast, geopolitically-sanctioned money laundering scheme is that Housing and Urban Devopment and other agencies are used for drug trafficking and securities fraud. According to Fitts, the scheme allows for at least 85 percent of the U.S. federal budget to remain unaudited.
Fitts has been researching this issue since 2001, when she began to believe that a financial coup d’etat was underway. Specifically, she suspected that the banks, corporations, and investors acting in each global region were part of a “global heist,” whereby capital was being sucked out of each country. She was right.
As Fitts asserts,
“[She] served as Assistant Secretary of Housing at the US Department of Housing and Urban Development (HUD) in the United States where I oversaw billions of government investment in US communities…..I later found out that the government contractor leading the War on Drugs strategy for U.S. aid to Peru, Colombia and Bolivia was the same contractor in charge of knowledge management for HUD enforcement. This Washington-Wall Street game was a global game. The peasant women of Latin America were up against the same financial pirates and business model as the people in South Central Los Angeles, West Philadelphia, Baltimore and the South Bronx.”
This is part of an even larger financial scheme. It is fairly well-established by now that international financial institutions like the World Trade Organization, the World Bank, and the International Monetary Fund operate primarily as instruments of corporate power and nation-controlling infrastructure investment mechanisms. For example, the primary purpose of the World Bank is to bully developing countries into borrowing money for infrastructure investments that will fleece trillions of dollars while permanently indebting these “debtor” nations to West. But how exactly does the World Bank go about doing this?
John Perkins wrote about this paradigm in his book, Confessions of an Economic Hitman. During the 1970s, Perkins worked for the international engineering consulting firm, Chas T. Main, as an “economic hitman.” He says the operations of the World Bank are nothing less than “pure economic colonization on behalf of powerful corporations and banks that use the United States government as their tool.”
In his book, Perkins discusses Joseph Stiglitz, the Chief Economist for the World Bank from 1997-2000, at length. Stiglitz described the four-step plan for bamboozling developing countries into becoming debtor nations:
Step One, according to Stiglitz, is to convince a nation to privatize its state industries.
Step Two utilizes “capital market liberalization,” which refers to the sudden influx of speculative investment money that depletes national reserves and property values while triggering a large interest bump by the IMF.
Step Three, Stiglitz says, is “Market-Based Pricing,” which means raising the prices on food, water and cooking gas. This leads to “Step Three and a Half: The IMF Riot.” Examples of this can be seen in Indonesia, Bolivia, Ecuador and many other countries where the IMF’s actions have caused financial turmoil and social strife.
Step Four, of course, is “free trade,” where all barriers to the exploitation of local produce are eliminated.
There is a connection between the U.S. black budget and the trillion dollar international investment fraud scheme. Our government and the banking cartels and corporatocracy running it have configured a complex screen to block our ability to audit their budget and the funds they use for various black op projects. However, they can not block our ability to uncover their actions and raise awareness.
- ISIS Unleashed Mustard Gas Attack In Iraq, US Officials Claim
A long time ago, in a proxy war far, far away, some YouTube videos (around 100 of them apparently) “proved” that Bashar al-Assad’s regime had unleashed a horrific chemical attack on its own people.
In a lengthy report subtly titled “Syrian Government’s Use of Chemical Weapons on August 21, 2013,” US officials laid out their reasoning for trusting the veracity of the clips, and while you can read the entire report here, the punchline is this: “We have identified one hundred videos attributed to the attack, many of which show large numbers of bodies exhibiting physical signs consistent with, but not unique to, nerve agent exposure. We assess the Syrian opposition does not have the capability to fabricate all of the videos.”
That’s right, the US very nearly started World War 3 based on Washington’s assessment of the Syrian opposition’s video editing capabilities.
Fast forward to March when, almost two years after the first round of YouTube chemical attack videos nearly led to US strikes on Damascus, Washington still hadn’t managed to stir up enough public support for an invasion (which may have something to do with the fact that most Americans couldn’t even identify Syria on a map let alone tell you anything about its four-year old civil war) and lo and behold Reuters reported that “a group monitoring the Syrian civil war said government forces carried out a poison gas attack that killed six people in the northwest, and medics posted videos of children suffering what they said was suffocation.”
That prompted the John Kerry to send the following message to the Syrian regime: “Assad must be held accountable for atrocious behavior [and] military pressure may be needed to oust [him]”
Well, five months later and the American public still doesn’t care about Syria or Assad (after all, there are more pressing issues to worry about, like Cecil), but one thing it does care about is ISIS which is why now, the West will try to tie Islamic State to chemical weapons and see if that’s effective at bolstering support for boots on the ground. Here’s CNN:
The U.S. is investigating what it believes are “credible” reports that ISIS fighters used mustard agent in an attack against Kurdish Peshmerga this week, causing several of them to fall ill, U.S. officials working in at least three separate parts of the Obama administration said Thursday.
All of them strongly emphasized more intelligence is being gathered on exactly what may have happened near the town of Makhmour in northern Iraq.
And here’s WSJ explaining that ISIS most likely obtained the mustard gas in Syria or maybe in Iraq where stockpiles belonging to Assad and Saddam Hussein, respectively, were supposed to have been destroyed but weren’t:
Islamic State militants likely used mustard agent against Kurdish forces in Iraq this week, senior U.S. officials said Thursday, in the first indication the militant group has obtained banned chemicals.
The officials said Islamic State could have obtained the mustard agent in Syria, whose government admitted to having large quantities in 2013 when it agreed to give up its chemical-weapons arsenal.
The possibility that Islamic State obtained the agent in Syria “makes the most sense,” said one senior U.S. official. It is also possible that Islamic State obtained the mustard agent in Iraq, officials said, possibly from old stockpiles that belonged to Saddam Hussein and weren’t destroyed.
U.S. intelligence agencies are still investigating the source and how it could have been delivered this week on the battlefield, officials said.
Islamic State has taken control of territory in Syria close to where President Bashar al-Assad’s forces stored chemical weapons, including mustard agent. The regime said in 2013 that all of its mustard stockpiles had been destroyed, either by Syrian forces themselves or by international inspectors.
Inspectors, however, have subsequently said they weren’t able to verify claims by the Syrian government that it had burned hundreds of tons of mustard agent in earthen pits. U.S. intelligence agencies now say they believe Damascus hid some caches of deadly chemicals from the West, possibly including mustard.
WSJ goes on the say that as of now, it’s “unclear how much mustard Islamic State might have obtained,” and the German ministry says we won’t know for sure whether any mustard was spread until a team of German experts (who are “on their way to the scene”) have had a chance to assess the situation. “What it was exactly we don’t know,” a spokesman said.
But that’s ok because the US does know courtesy of multiple “independent reports.” And if that’s not good enough for you, just ask Congressman Adam Schiff, a ranking member of the House Permanent Select Committee on Intelligence:
“Did ISIS find some mustard? We think they did. We think they have used it.”
And John McCain agrees, as is clear from the following tweet, in which the Senator encourages you to read a completely unbiased WSJ Opinion piece called “Islamic State Gets Mustard Gas: Assad’s stockpiles weren’t destroyed, and the jihadists have them”.
“Foreign policy failures have a way of compounding…” – Must-read @WSJopinion on #ISIS getting chemical weapons: http://t.co/7yUjIJGzlH
— John McCain (@SenJohnMcCain) August 14, 2015
McCain – who, you’re reminded, is the poster child for foreign policy failures in Syria and Ukraine – seems to have completely missed the irony in his retweeting an article in which the very first line reads: “foreign-policy failures have a way of compounding.”
In any event, we suspect it won’t be long before John Kerry tells the nation that it might be necessary to use further “military pressure” to hold ISIS accountable for their “atrocious behavior” which is now in direct contravention of another international warfare “norm”. As for seeing “proof” that Islamic State did indeed “find and use some mustard,” don’t hold your breath (unless there’s mustard gas around):
While there have been accounts posted in social media about the incident, the officials said they have independent information that strongly led them to assess there was a use of chemical weapons. The officials would not tell CNN what evidence led them to this belief.
- Did David Tepper Just Call The Market Top… And Is The Appaloosa Billionaire Losing His Touch
Once upon a time, when hedge funds did not make daily TV and media appearances in hopes of finding buyers for whatever they were selling (i.e., were “bullish” on) and vice versa for shorts, 13F filings were the holy grail of alpha chasers and piggybackers everywhere. However, in recent years, hedge funds have become as media friendly as some of the biggest monopoly money talking heads to grace CNBC daily, and as a result hedge fund holdings are known far in advance of the mandatory 45 day 13F reporting date after the end of the quarter. Not only that, but with central banks dominating capital markets, what hedge fund XYZ does is hardly as exciting any more.
Still, one name that many enjoy tracking is Appaloosa billionaire David Tepper due to his contagious bullishness for a bigger part of the centrally-planned ramp since 2009, which has also resulted in massive paydays for Tepper: he has consistently been among the top 5 best paid hedge fund managers this decade. Which is great: after all, the Fed’s wealth effect is precisely there to benefit the likes of David and his hedge fund peers. For everyone else, well, as Janet Yellen says “get some assets.
So how did Tepper do in Q2? In a word: lousy. In another word: the man who recently was on CNBC pitching a 20x P/E multiple as the new normal, may have just called the market top.
First, a quick flip through the names in his most recent 13F reveals that in the second quarter Tepper took notable new positions in AAPL and BABA. It is not exactly a secret that since the second quarter when AAPL stock was trading near its all time highs, both names have gone straight down, with AAPL recently entering a correction, while BABA has met obstacle after legal obstacle, and as recently as this week tumbled to all time post-IPO lows. If only it were singles week every week…
Worse, while Tepper was building his AAPL and BABA stake, he was liquidating his exposure in GOOG (via some $190 million in Class C shares as well as GOOG calls), just before GOOG exploded to the upside.
Most troubling, however, is that while in recent quarters Tepper had consistently carried over a levered upside bet in the market, in the form of SPY and QQQ calls (which as of March 31 were a massive $1.3 billion in share equivalents), in Q2 he unwound his entire call exposure. And not just in single name stocks, but in the two key ETFs noted above. Since the market went sideways during the second quarter, these positions certainly did not generate alpha, and if used as a hedge, they lost money vs the other revealed long equities positions (13Fs do not reveal shorts or credit positions, either cash or CDS).
Which begs the question: having unwound his two largest positions, which at face value are nothing more than levered bullish bets on the S&P500 and Nasdaq, did Tepper, in addition to apparently losing his touch, also call the top in the market?
Full Appaloosa 13-F breakdown.
Source: 13F
- Weekend Reading: Chinese Food (For Thought)
Submitted by Lance Roberts via STA Wealth Management,
Another week of market volatility with no real ground gained. Interestingly, that is just how I started last Friday's missive.
As I said then, the recent market volatility has been enough to give you indigestion and this week has been much of the same due to China's recent currency moves. But, despite the back and forth action this past week, the markets have held longer-term bullish trend support which keeps the bulls in charge for now.
However, this certainly does not suggest that investors remain complacent. The ongoing deterioration in fundamentals, economics and technicals suggest that risk currently outweighs the potential reward for now. With respect to the technical front, the ongoing deterioration in relative strength, momentum, and breadth, combined with a compression of price action, have only been witnessed at more important market peaks in the past.
"Bull markets" do not die on their own. Their death is generally dictated by the onset of an unexpected catalyst that creates enough "panic selling" to spark a liquidation cycle. Does the current situation in China rise to such a level? Maybe. It is an issue I began discussing this past June, and there may be a danger in dismissing the issue too quickly.
There are many questions that remain to be answered. What does China's devaluation really say about their economy? Could this be the start of a bigger issue with the worlds 2nd largest economy? Does China pose a bigger threat to the US economy than currently believed? Does the uncertainly in the markets due to China keep the Federal Reserve rate hikes on hold in September?
These are the questions we will try and answer this weekend. For now, "Keep Calm and Eat Chinese Food."
1) Is The Global Economy Sinking Into Recession by Ed Yardeni via Dr. Ed's Blog
"China's July trade figures remained on the soft side. On a seasonally adjusted basis, imports fell 2.1% m/m and 8.1% y/y. Some of that weakness reflected the drop in oil prices. However, imports excluding petroleum still fell 3.4% y/y during June, suggesting weak domestic demand. Exports declined 4.9% m/m last month and 8.3% y/y, suggesting weak global demand.
Exports have been essentially flat now since early 2013."
Read Also: Yuan And You, How China's Currency Affects US Consumers by Kim Hjelmgaard via USA Today
2) Making Sense Of China's Currency Move by Mohamed El-Erian via Bloomberg
"With this move, China explicitly joins other nations trying to capture economic activity outside their borders, and it is doing so as the global economy is struggling to generate sufficient growth. The decision therefore provides many signals about what ails China and the global economy, and has implications for financial markets.
But by heeding this advice now, China has done more than devalue its currency by almost 2 percent, the largest single-day move in two decades. By choosing this particular moment to alter its currency system, it is also attempting to respond — via foreign-exchange policy — to one of the biggest challenges facing the global economy, that of generating growth."
Read Also: China Can't Risk Global Chaos Of Currency Devaluation by Ambrose Evans-Pritchard via The Telegraph
3) 5-Things You Need To Know About China's Move by Carlos Tejada via WSJ
"Here are the 5-things you need to know
- What did they do?
- Why did they do it?
- What does this mean for the rest of the world?
- What does this mean for the markets?
- What's next?"
Read Also: China's Currency Move Could Spark A Wave Of Deflation by Heather Stewart via The Guardian
4) Currency War? How China Devaluation May Impact Fed by Matthew Belvedere via CNBC
Read Also: China Devaluation Brings Stocks To A Death Cross by Anthony Mirhaydari via The Fiscal Times
5) China's Troubling Lurch Back To Socialism by Weifeng Zhong via Real Clear Markets
"China reminds us of what Hayek calls "The Fatal Conceit," the belief that the government is better than markets in setting prices, that it can manage a form of "Capitalism Light." But interventions such as these will surely be counterproductive, and will rightly concern both domestic and international investors who rely heavily on economic freedoms. This means that the economic damage from the Chinese government's piecemeal attempts to be more responsive to its citizenry will be significant. We should be glad that the Chinese people are enjoying greater freedom to express their views and influence public policy. However, piecemeal pacification is no substitute for genuine political freedom, and it is in clear conflict with China's transition to a market economy. Hayek would have predicted that the process can only end in two ways: either socialism with totalitarianism, or capitalism with democracy. From today's vantage point, that means we can expect far more turmoil in the Chinese economy in the coming months."
Read Also: Until It Makes Reforms, China's Markets Will Struggle by Doug Elliott via Real Clear Markets
Fortune Cookies
The Warren Buffett Way To Avoid Major Bear Markets by Jesse Felder via The Felder Report
The New TVA – New Thoughts About Old Ideas by Dr. Ben Hunt via Epsilon Theory
Drop In Withholding Tax Receipts Suggests Something Amiss With Employment by Lee Adler via David Stockman's ContraCorner
Even The Fed Admits Recession Looms: Q3 GDP Slashed To 0.7% by Tyler Durden via ZeroHedge
"In the midst of chaos, there is also opportunity" – Sun Tzu
Have a great weekend.
- Chinado Sparks Bullion's Best Week In 3 Months; US Stocks, Bonds Shrug
This seemed appropriate…
China's stock markets had their best week since the crash began…
As Yuan had its biggest weekly drop since 1994…
Which meant massive EURCNH carry unwinds.. leading to European stocks 2nd worst week since December…
Prior to today, the S&P has closed lower on 10 of the last 12 Fridays – this has not happened since 2007…But today – thanks to old news on AAPL and old news on Europe's bailout… we melted up…
Trannies outperformed on the week, as today's panic-buying meltup saved the week
In case you wondered what triggered the late-day meltup – it was AAPL, surging on news that they are further ahead with a car…WTF!?
- *APPLE CAR PROJECT MAY BE FURTHER ALONG THAN EXPECTED: GUARDIAN
Biotechs took it on the china again, down 7 days in a row and 4 weeks in a row (which follows the weakest inflows in 11 weeks)… this is the worst 4-week slide since April 2014…
But energy stocks were SOMEHOW the week's best performers… After 14 straight weeks lower… this was Energy's best week in over 6 months!!
Although reality is setting in the last 2 days…
VIX smashed back down to a 12 handle…
Treasury markets roundtripped to practically unchanged on the week – having rallied 15-20bps Monday thru Wednesday…
Credit markets dumped this week.. and stocks retraced to them 3 times before the last 2 days meltups…
FX marksts saw some volatility early in the week before China backed off.. leaving the USD lower against the majors (driven by EUR strength from CNH carry unwinds)… USD Index biggest weekly drop in 2 months
But The USDollar had its strongest week against Asian currencies since Lehman…
PMs outperformed industrial commodities this week…
Gold and Silver's best week in 3 months – even after the clubbing today…
Front-month WTI Crude has now fallen 9 weeks in a row…
Charts: Bloomberg
- Tianjin: Before & After
The two explosions that ripped through an industrial area in the coastal city of Tianjin, China, on Wednesday night created huge fireballs, knocked down doors and shattered windows up to several miles away. As NY Times reports, at least 50 people were killed and more than 500 injured. Here is the aftermath…
Hundreds of nearby cars were incinerated and two Public Security Bureau buildings were destroyed.
There were injuries and broken windows in several apartment buildings close to the blast site.
Finally, this dreadful video… wrong place, wrong time…
Or perhaps how 1000s of carry traders felt this week….
- The Economissed Track Record: In January 75% Of Experts Said The Fed Would Have Hiked By Now
If PhD economists were serious about getting things right, they would have a tough job. That goes double for PhD economists charged with making policy decisions based on their conclusions.
That’s because economics (like sociology and political science and astrology) isn’t a real science. It’s a pseudo-science. And as is the case with other pseudo-sciences, it’s flat out impossible to discover laws and immutable truths, no matter what anyone told you in your undergrad economics course.
Of course PhD economists aren’t really serious about getting things right, which means that in reality, their jobs are remarkably easy. Here’s the job description: make predictions that are almost never right and then make up any reason you want to explain away the fact that you were wrong. These explanations run the gamut from intentional obfuscation via opaque statistical tinkering (“residual seasonality”) to comically absurd attempts to turn common sense into an excuse for poor outcomes (“snow in the winter”).
And while economists by the very nature of their jobs are already predisposed to getting it wrong almost all the time, that tendency is amplified when economists try to predict what other economists are going to do. We might call this “stupidity squared”, and it’s readily observable in its natural habitat when economists attempt to predict when the Fed will raise rates.
When “forecasters” are surveyed on the timing of a Fed hike (or cut) what you get is one group of economists trying to guess at what another group of economists mistakenly thinks about the direction of the economy, and as you can see from the graph shown below, this is definitely not a case where two wrongs make a right.
Some color from WSJ:
An overwhelming majority of private forecasters polled think the Federal Reserve will begin raising short-term interest rates next month, capping a historic era of unprecedented monetary stimulus.
About 82% of economists surveyed Friday through Tuesday by The Wall Street Journal said the Fed’s first rate increase will come in September, versus 13% who said the central bank will wait until December.
“I don’t think there’s unanimity, by any means, on the [rate-setting Federal Open Market] Committee,” said Joel Naroff, president of Naroff Economic
Advisors, who said he expects a liftoff in September. But, he said, “I think there’s a general consensus that they need to go as soon as possible.”
Last month, 82% of economists predicted a September liftoff and 15% said the U.S. central bank would wait until December.
In June, 72% said the first rate increase would come in September versus 9% who expected a first move in December.
Summing up everything discussed above is WSJ’s Ben Leubsdorf:
Back in January, 75% of economists thought the Fed would have raised rates by now http://t.co/ED29B2vv2n pic.twitter.com/WQ5B3xdo5w
— Ben Leubsdorf (@BenLeubsdorf) August 13, 2015
And finally, a video representation of economists responding to poor “forecasting”… “I make the weather…”:
- America (In 1 Cartoon)
- China Says Plunge Protection Team Will Prop Up Stocks "For Years To Come" If It Has To
Perhaps it’s a case of something getting lost in translation (so to speak), but Chinese authorities have a remarkable propensity for saying absurd things in a very straightforward way as though there were nothing at all odd or amusing about them.
For example, here’s what the CSRC said on Friday about the future for China Securities Finance (aka the plunge protection team):
“For a number of years to come, the China Securities Finance Corp. will not exit (the market).”
For anyone who hasn’t followed the story, Beijing transformed CSF into a trillion-yuan state-controlled margin lender after a harrowing unwind in the half dozen or so backdoor leverage channels that helped inflate Chinese equities earlier this year caused stocks to plunge 30% in the space of just three weeks.
CSF has since become something of an international joke, as the vehicle, along with an absurd effort to halt trading in nearly three quarters of the country’s stocks, came to symbolize the epitome of market manipulation – and that’s saying something in a world where everyone is used to rigged markets.
And because Beijing wanted to get the most manipulative bang for their plunge protection buck (err… yuan) the PBoC went on to count loans made to CSF by banks towards total loan growth in July. In other words, China acted as is if forced lending to a state-run stock buying entity represented real, organic growth in demand for credit.
Now, apparently, the practice of using CSF to “stabilize” stocks and artificially prop up loan “demand” will become standard procedure. Here’s more from AFP:
China’s market regulator on Friday vowed to stabilise the volatile stock market for a “number of years”, saying a state-backed company tasked with buying shares will have an enduring role.
“For a number of years to come, the China Securities Finance Corp. will not exit (the market). Its function to stabilise the market will not change,” the China Securities Regulatory Commission (CSRC) said in a statement on its official microblog.
The China Securities Finance Corp. (CSF) has played a crucial role in Beijing’s stock market rescue, which was launched after Shanghai’s benchmark crashed 30 percent in three weeks from mid-June.
The regulator’s comments were the first time it has given any indication of how long it would intervene to support equities.
Authorities gave the CSF huge funding to buy shares and subsequent speculation the government was preparing to withdraw from the stock market has spooked investors.
The statement added the CSF will only enter the market during times of volatility.
”When the market drastically fluctuates and may trigger systemic risk, it will continue to play a role to stabilise the market in many ways,” said the statement, which quoted CSRC spokesman Deng Ge.
So essentially, the PBoC will now do precisely what the BoJ does on nearly every single day that sentiment on the Nikkei looks to be slipping. The only difference is that the BoJ doesn’t necessarily try to hide the fact that it’s amassing a $100 billion portfolio of equities whereas Beijing is keen on maintaining that because CSF’s balance sheet is technically separate from the PBoC’s, there’s “no such thing as Chinese QE.” This claim may be getting harder to justify however, because as Bloomberg noted just moments ago, the balance sheet is expanding.
People’s Bank of China’s balance sheet showed that its “claims on other financial corporations” increased 200b yuan in July, signaling lending to China Securities Finance, Shanghai Securities News reports.
“Claims on other financial corporations” consist mainly of loans the central bank extended to financial cos., the report says, citing book written earlier by officials at PBOC’s statistics department.
In any event, plunge protection is here to stay in China, and that’s probably not a good thing when it comes to supporting the country’s bid for MSCI index inclusion, which means the CSRC is caught between making sure investors don’t get the “wrong” message about the government’s willingness to prop up stocks and making sure the rest of the world gets the “right” message about market liberalization.
Fortunately, this impossible balancing act is sure to lead to an endless flow of amusing contradictory rheotoric and with that in mind, we’ll close with the following quote, which you’ll be sure to note comes from the very same people who made the comments cited above, on the very same day.
“With market fluctuations gradually shifting to normal, from wild and abnormal, we should let the market exercise its function of self-adjustment.”
- Guest Post: A Trump "Morning In America"
Submitted by starfcker via The Burning Platform blog,
This week marks a seminal shift in the presidential campaign of Donald Trump. This is the week the establishment rolled over and began to accept that he is their front runner. The wild attacks and blatant put downs will be muted from here on out as the establishment struggles to come to grips with their new reality. Trump has proven to be an immensely popular and muscularly resilient candidate. He has survived fire that would have killed any ordinary candidate.
His reward will be to watch a batch of the so-called serious candidates be exiled to the sidelines. The Rick Perrys of the world, the Lindsay Grahams of the world, were valuable to the establishment at 5% support. They have no value at 0%. 5%, 10 times could have allowed an unpopular Jeb Bush to win a lot of primaries with a surprisingly low percentage of the vote, as long as the minor candidates siphoned off some of the rest. With a half of dozen of them at 0%, that strategy is toast.
Republican kingmakers are nothing if not pragmatic, they want results for their money. They aren’t getting it. They are unhappy. They are angry. But like a chameleon changing colors, they want to be on the winning side. They all know Trump, they also know they can deal with Trump, so they will. The Blitzkrieg is over. Trump survived. The establishment sacrificed many of their finest media plants this past weekend. Every one of them ended up looking like exactly what they are, cheap desperate prostitutes, willing to say whatever was required of them, as long as their paychecks kept coming .
Media brands that took a dozen years to build, are now damaged goods. Where will Trump take this, who knows? But the man knows how to make a deal, the man knows how to win, and the man knows how to set a mark so people don’t screw with him in the future. It must suck to be Megyn Kelly, Chris Wallace, and Bret Baier, and know that you are shut out from the Trump circus for the indefinite future. May their shows suffer damage as a result? They might, and it’s certainly a fate no one else is going to risk. Lots of bazookas got laid down at their feet by the mercenary media this week. They took their best coordinated shot at him, and failed. CNN doesn’t have the ratings muscle to go after him in the next debate the way Fox did. Look for a totally different and much less confrontational take on Donald Trump starting now.
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TrumpZilla strikes…
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