Today’s News July 11, 2015

• Pentagon Concludes America Not Safe Unless It Conquers The World

  Submitted by Paul Craig Roberts,

  The Pentagon has released its “National Military Strategy of the United States of America 2015,” June 2015.

  The document announces a shift in focus from terrorists to “state actors” that “are challenging international norms.” It is important to understand what these words mean. Governments that challenge international norms are sovereign countries that pursue policies independently of Washington’s policies. These “revisionist states” are threats, not because they plan to attack the US, which the Pentagon admits neither Russia nor China intend, but because they are independent. In other words, the norm is dependence on Washington.

  Be sure to grasp the point: The threat is the existence of sovereign states, whose independence of action makes them “revisionist states.” In other words, their independence is out of step with the neoconservative Uni-power doctrine that declares independence to be the right of Washington alone. Washington’s History-given hegemony precludes any other country being independent in its actions.

  The Pentagon’s report defines the foremost “revisionist states” as Russia, China, North Korea, and Iran. The focus is primarily on Russia. Washington hopes to co-op China, despite the “tension to the Asia-Pacific region” that China’s defense of its sphere of influence, a defense “inconsistent with international law” (this from Washington, the great violator of international law), by turning over what remains of the American consumer market to China. It is not yet certain that Iran has escaped the fate that Washington imposed on Iraq, Afghanistan, Libya, Syria, Somalia, Yemen, Pakistan, Ukraine, and by complicity Palestine.

  The Pentagon report is sufficiently audacious in its hypocrisy, as all statements from Washington are, to declare that Washington and its vassals “support the established institutions and processes dedicated to preventing conflict, respecting sovereignty, and furthering human rights.” This from the military of a government that has invaded, bombed, and overthrown 11 governments since the Clinton regime and is currently working to overthrow governments in Armenia, Kyrgyzstan, Ecuador, Venezuela, Bolivia, Brazil, and Argentina.

  In the Pentagon document, Russia is under fire for not acting “in accordance with international norms,” which means Russia is not following Washington’s leadership.

  In other words, this is a bullshit report written by neocons in order to foment war with Russia.

  Nothing else can be said about the Pentagon report, which justifies war and more war. Without war and conquests, Americans are not safe.

  Washington’s view toward Russia is the same as Cato the Elder’s view toward Carthage. Cato the Elder finished his every speech on any subject in the Roman Senate with the statement “Carthage must be destroyed.”

  This report tells us that war with Russia is our future unless Russia agrees to become a vassal state like every country in Europe, and Canada, Australia, Ukraine, and Japan. Otherwise, the neoconservatives have decided that it is impossible for Americans to tolerate living with a country that makes decisions independently of Washington. If America cannot be The Uni-Power dictating to the world, better that we are all dead. At least that will show the Russians.

  

  

  

  

  

• The Chart That Keeps Angela Merkel Up At Night

  There is one thing that keeps Angela Merkel awake at night. It’s not the cries of despair from Greek pensioners; it’s not the stomach rumbles of starving Portuguese; it’s not the penniless Cypriots… it’s the rise of the euroskeptic and the possibility that her empire will be forced to wage not financial war but another type of conflict…

   

  

   

  With elections looming, Merkel’s bullying tactics – that her creditor demands trump any sovereign growth ambitions another nation may have – mean if nations want more Europe, they really mean more Germany.

  

  

  

  

  

• Over To You Merkel: Greek Govt Approves Bill The Greek People Soundly Rejected

  The Greek parliament has approved the proposal Alexis Tsipras submitted to creditors on Thursday. The ball is now in Europe’s court with a Eurogroup meeting scheduled for Saturday. 

  • GREEK LAWMAKERS APPROVE GOVERNMENT’S BAILOUT PROPOSAL: TALLY

  

  As expected, Energy Minister and Left Platform leader Panagiotis Lafazanis voted against the proposal as did Parliament speaker Zoi Konstantopoulou and Deputy Minister of Social Security Dimitris Stratoulis.

  If new FinMin Euclid Tsakalotos can secure the support of his EU counterparts tomorrow, the path will be cleared for Greece to remain in the EU under a new program.

  • GREEK PM TSIPRAS SAYS GOVT AVERTING A POLITICAL GREXIT
  • GREEK PM TSIPRAS SAYS PEOPLE DIDN’T GIVE GOVT RUPTURE MANDATE
  • TSIPRAS: AGREEMENT WITH CREDITORS ISN’T CERTAIN, JUST POSSIBLE
  • CREDITORS MAKE POSITIVE EVALUATION OF GREEK DEBT PROPOSALS: AP
  • TSIPRAS: GREECE WILL MANAGE TO STAY IN EU, AS EQUAL PARTNER
  • GREECE BAILOUT TO BE 74B EUROS BASED ON CREDITORS’ EVAL: AFP

  It remains to be seen how Greeks will respond to the decision. Given the similarities between the “new” proposal and the proposal that 61% of Greeks voted against last Sunday, there may well be pushback from voters and a generalized sense of betrayal among Syriza’s core constituency. 

  Underscoring the contentious nature of the vote is the following from Bloomberg:

  Fifteen governing Syriza party lawmakers who voted “yes” in parliament vote on Greek govt’s bailout proposals to creditors say they oppose the plan, according to statement distributed to journalists.

   

  Lawmakers say proposal shouldn’t have been approved by Greek parliament; they backed it only because they didn’t want the govt’s parliamentary majority to be put into question.

   

   

  Lawmakers say their “yes” vote shouldn’t be interpreted as acceptance of implementation of austerity measures.

  

  

  

  

  

• The Financial Attack On Greece: Where Do We Go From Here?

  Submitted by Michael Hudson via CounterPunch,

  The major financial problem tearing economies apart over the past century has stemmed more from official inter-governmental debt than with private-sector debt. That is why the global economy today faces a similar breakdown to the Depression years of 1929-31, when it became apparent that the volume of official inter-government debts could not be paid. The Versailles Treaty had imposed impossibly high reparations demands on Germany, and the United States imposed equally destructive requirements on the Allies to use their reparations receipts to pay back World War I arms debts to the U.S. Government.

  Legal procedures are well established to cope with corporate and personal bankruptcy. Courts write down personal and business debts either under “debtor in control” procedures or foreclosure, and creditors take a loss on loans that go bad. Personal bankruptcy permits individuals to make a fresh start with a Clean Slate.

  It is much harder to write down debts owed to or guaranteed by governments. U.S. student loan debt cannot be written off, but remains a lingering burden to prevent graduates from earning enough take-home pay (after debt service and FICA Social Security tax withholding is taken out of their paychecks) to get married, start families and buy homes of their own. Only the banks get bailed out, now that they have become in effect the economy’s central planners.

  Most of all, there is no legal framework for writing down debts owed to the IMF, the European Central Bank (ECB), or to European and American creditor governments. Since the 1960s entire nations have been subjected to austerity and economic shrinkage that makes it less and less possible to extricate themselves from debt. Governments are unforgiving, and the IMF and ECB act on behalf of banks and bondholders – and are ideologically captured by anti-labor, anti-government financial warriors.

  The result is not the “free market economy” it pretends to be, nor is it the rule of economically rational law. A genuine market economy would recognize financial reality and write down debts in keeping with their ability to be paid. But inter-government debt overrides markets and refuses to acknowledge the need for a Clean Slate. Today’s guiding theory – backed by monetarist junk economics – is that debts of any size can be paid, simply by reducing labor’s wages and living standards, plus by selling off a nation’s public domain – its land, oil and gas reserves, minerals and water distribution, roads and transport systems, power plants and sewage systems, and public infrastructure of all forms.

  Imposed by the monopoly of inter-governmental financial institutions – the IMF, ECB, U.S. Treasury, and so forth – creditor financial leverage has become the 21^st century’s new mode of warfare. It is as devastating as military war in its effect on population: rising suicide rates, shorter lifespans, and emigration of the age-cohort that always have been the major casualties of war, young adults. Instead of being drafted into the army to fight foreign foes, they are driven from their homes to find work abroad. What used to be a rural exodus from the land to the cities from the 17^th century onward is now a “debtor exodus” from countries whose governments owe unpayably high sums to creditor governments and to the banks and bondholders on whose behalf they impose their policy.

  While pushing the world economy into a state of war internationally, high finance also is waging a class war against labor – and ultimately against governments and thus against democracy. The ECB’s policy has been brutal toward Greece this year: “If you do not re-elect a right-wing party or coalition, we will destroy your banking system. If you do not sell off your public domain to buyers we will make life even harder for you.”

  No wonder Greece’s former Finance Minister Janis Varoufakis called the Troika’s negotiating position “financial terrorism.” Their idea of “negotiation” is surrender. They are unyielding. Official creditor institutions threaten to isolate, sanction and destroy entire economies, including their industry as well as labor. It transforms the 19^th-century class war into a purely destructive meltdown.

  That is the great difference between today and 1929-31. Then, the world’s leading governments finally recognized that debts could not be paid and suspended German reparations and Inter-Ally debts. Today’s the unpayability of debts is used as leverage in class war.

  The immediate political aim of this financial warfare in Greece is to replace its elected government (supported by a remarkable July 5 referendum vote of 61 to 39) with foreign creditor control by “technocrats,” that is, bank lobbyists, factotums and former Goldman Sachs managers. The long-term aim is to impose a war against labor – in the form of austerity – and against the power of governments to determine their own tax policy, financial policy and public regulatory policy.

  Fortunately, there is an alternative. Here is what is needed. (I outlined my proposals in a presentation before the Brussels Parliament on July 3, following an earlier advocacy at The Delphi Initiative in Greece, convened by Left Syriza the preceding week.)

  A declaration reaffirming the rights of sovereign nations

  Sovereign nations have a right to put their own growth ahead of foreign creditors. No nation should be obliged to impose chronic depression and unemployment or polarize the distribution of wealth and income in order to pay debts.

  Every nation has the right to the basic criteria of nationhood: the right to issue its own money, to levy taxes, and to write its laws, including those governing relations between creditors and debtors, especially the terms of bankruptcy and debt forgiveness.

  Economic logic dictates what was recognized by the end of the 1920s: When debts reach the level that they disturb basic economic balance and derange society, they should be annulled. Another way of saying this is that the volume of debt – and its carrying charges – must be brought within the reasonable ability to pay.

  Rejecting the “hard money” (really a “hard creditor”) position of anti-German, anti-labor economists Bertil Ohlin and Jacques Rueff, Keynes argued that creditors had an obligation to explain to Germany just how they would enable it to pay its reparations. At that time, Keynes meant specifically that France, Britain and other recipients of reparations should specify just what German exports they would agree to buy. But today, creditors define a nation’s ability to pay not in terms of how it can earn the money to pay down the debt, but rather what public domain assets it can sell off in what is essentially a national bankruptcy proceeding. Debtor countries are compelled to let their public infrastructure be sold off to rent-extractors to create a neofeudal tollbooth economy.

  Under international law, no nation is legally obliged to do this. And under the moral definition of nationhood, they should not be forced to do so. Their right to resist this form of debt blackmail is what makes them sovereign, after all.

  It is true that the principle of the European Union was that individual nations would cede their rights to a larger entity. The union itself was to exercise the rights of nationhood, democratically on the basis of a pan-European constituency.

  But this is not what has happened. The EU has no common ability to tax and spend; those powers remain local. The one area where it does govern taxes is dysfunctional: EU ideologues insist on taxing consumers (via the Value Added Tax, VAT) and labor via pension set-asides.

  More fatally, the eurozone has no ability – or at least, no willingness – to create money to fund deficit spending. What it calls a “central bank” is only designed to provide money to domestic banks and, even worse, to lobby for the interest of private bankers against the principle of public central bank money creation.

  The EU does not even have a meaningful legal system empowered to fight fraud and financial crime, prosecute or clean up insider dealing and corrupt oligarchies. In the case of Greece, where the ECB at least insisted on the need to clean up such behavior, it was only to “free” more revenue for foreign investors from public agencies scheduled to be privatized to pay debts to the ECB and its crony institutions for the money they had paid private bondholders and banks in the face of economies shrinking from a combination of debt deflation and fiscal deflation.

  Taken together, these defects mean that the Eurozone and EU were malstructured from the start. Control was placed so firmly in the hands of bankers and anti-labor ideologues that it may not be reformable – in which case a new start must be made.

  In any event, here are the institutional reforms that are urgently needed. In view of the financial sector’s control of the main institutions, these reforms require entirely new institutions not governed by the pro-rentier logic that has deformed the eurozone. The most pressing needs are for the following institutions.

  An international forum to adjudicate the ability (or inability) to pay debts

  What is needed to put this basic principle into practice is creation of a new international forum to adjudicate how much debt can reasonably be paid – and how much should be annulled. In 1929 the Young Plan (which replaced the Dawes Plan to deal more rationally with German reparations) called for creation of such an institution – what became the Bank for International Settlements (BIS) in 1931 to stop the economic destruction of Germany by bringing its reparations back within the ability to pay.

  The BIS no longer can play such a role, because it has become the main meeting place for the world’s central banks, and as such has adopted the hardline “all debts must be paid” position that it originally was intended to oppose.

  Likewise the IMF no longer can play this position. It is hopelessly politicized. Despite its technical staff ruling in 2010-11 that Greece’s foreign debts could not be paid and hence needed to be written off, its heads – first Dominique Strauss-Kahn and then Christine Lagarde – acted in blatant conflict of interest to support the French bankers demands for payment in full, and U.S. demands by President Obama and Wall Street lobbyist Tim Geithner to insist that there be no writedown at all. That was the price for French bank support for Strauss-Kahn’s intended bid for the French presidency, and more recently backing for Lagarde’s rise to power at IMF. Given the U.S. veto power by Wall Street and the insistence that right-wing anti-labor ideologues (usually French) be appointed head of the IMF, a new organization representing the kind of economic logic outlined by Keynes, Harold Moulton and others in the 1920s is necessary.

  Creation of such an institution should be a leading plank of Euro-left politics.

  A Law of Fraudulent Conveyance, applicable to governments

  The private sector has long had laws that prevent money-lenders from lending a borrower more funds than the debtor can reasonably be expected to pay back in the normal course of business. If a lender advances, say, $10,000 as a mortgage loan against a house worth more (say, $100,000), and then insists that the debtor pay or lose his home, the courts may assume that the loan was made with this aim in mind, and annul the debt.

  Likewise, if a company is raided by borrowers who load it down with high-interest junk bonds, and then seize its pension funds and sell off assets to pay their debts, the company under attack can sue under fraudulent conveyance rules. They did so in the 1980s.

  This lend-to-foreclose ploy is the very game that the Troika have played with Greece. They lent its government money that the IMF economists explained quite clearly in 2010-11 (and reaffirmed this year just before the Greek referendum) could not be paid. But the ECB then swooped in and said: Sell off your infrastructure, sell your ports, your gas rights in the Aegean, and entire islands, to get the money to pay what the IMF and ECB have paid French, German and other bondholders on your behalf (while saving U.S. investment banks and hedge funds from losing their bets that Greek debts would indeed be paid).

  Application of this principle requires an international court to rule on the point at which debt service becomes intrusive, and write down debts accordingly.

  No such set of institutions exists today.

  Creation of Treasuries as national central banks to monetize deficit spending

  Central banks today only lend money to banks, for the purpose of loading economies down with debt. The irrational demand by bankers to prevent a public option from creating credit on its own computer keyboards (the same way that banks create loans and deposits) is designed simply to create a private monopoly to extract economic rent n the form of interest, fees, and finally to foreclose on defaulting creditors – all guaranteed by “taxpayers.”

  The European Central Bank is not suited for this duty. First of all, it is based on the ideology that public money creation is inflationary. The reality is that central bank money creation has just financed the greatest inflation of modern history – asset price inflation of the real estate market by junk mortgages, inflation of stock prices by junk bond issues, and central bank Quantitative Easing to create the fastest and largest bond market rally in history. The post-1980 experience with central banks has removed any moral or economic logic in their behavior as lobbyists for commercial banks, defenders of their special privileges, deregulator of financial crime, and extremist right-wing blockers of a public option in banking to bring basic services in line with actual costs. In short, if commercial banking systems in nearly every country have become de-industrialized and perverse, their enablers have been the central banks.

  The remedy is to replace these central banks with what preceded them: national Treasuries, whose proper function is to monetize government spending into the economy. The basic principle at work should be that any economy’s monetary and credit needs should be met by public spending and monetization, not by commercial banks creating interest-bearing credit to finance the transfer of assets (e.g., real estate mortgages, corporate buyouts and raids, arbitrage and casino-capitalist gambles).

  Summary

  Every nation has a right to defend itself against attack – financial attack just as overt military attack. That is an essential element in the principle of self-determination.

  Greece, Spain, Portugal, Italy and other debtor countries have been under the same mode of attack that was waged by the IMF and its austerity doctrine that bankrupted Latin America from the 1970s onward. International law needs to be updated to recognize that finance has become the modern-day mode of warfare. Its objectives are the same: acquisition of land, raw materials and monopolies.

  A byproduct of this warfare has been to make today’s financial network so dysfunctional that nations need a financial Clean Slate. The most successful one in modern times was Germany’s Economic Miracle – the post-World War II Allied Monetary Reform. All domestic German debts were annulled, except employer wage debts to their labor force, and basic working balances. Later, in 1953, its international debts were written down. The logic prompting both these acts needs to be re-applied today.

  With specific regard to Greece, Syriza’s leaders have said that they want to save Europe. First of all, from the eurozone’s destructive economic irrationality in not having a real central bank. This defect was deliberately built into the eurozone, to enforce a monopoly of commercial banks and bondholders powerful enough to gain control of governments, overruling democratic politics and referendums.

  Current eurozone rules – the Maastricht and Lisbon treaties – aim to block governments from running budget deficits in a way that spend money into the economy to revive employment. The new goal is only to rescue bondholders and banks from making bad loans and even fraudulent loans, bailing them out at public expense. Economies are obliged to turn to commercial banks for loans to obtain the money that any economy needs to grow. This principle needs to be rejected on grounds that it violates a basic sovereign right of governments and economic democracy.

  Once an economy is fiscally crippled by (1) not having a central bank to finance government spending, and (2) by limiting government budget deficits to just 3% of GDP, the economy must shrink. A shrinking economy will mean fewer tax revenues, and hence deeper government budget deficits and rising government debt.

  The ultimate killer is for the ECB, IMF and EC to demand that governments pay their debts by privatizing public infrastructure, natural resources, land and other assets in the public domain. To compound this demand, the Troika have blocked Greece from selling to the highest bidder, if that turns out to be Gazprom or another Russian company. Financial politics thus has become militarized as part of NATO’s New Cold War politics. Debtor economies are directed to sell to euro-kleptocrats – on terms financed by banks, so that interest charges on the deal absorb all the profits, leaving governments without much income tax.

  

  

  

  

  

• Free Willy: FCA Drops Case Against London Whale

  Once upon a time, at JP Morgan’s London-based internal hedge fund CIO unit, a legend was born. 

  Bruno Iksil — better known as “The London Whale” or “Voldemort” or “He Who Must Not Be Named” — carved out his place in the annals of CDX trading history when a tail hedge gone wrong effectively forced him to sell massive amounts of protection on IG.9 back in Q1 of 2012.

  Long story (and it is a very long story) short, Iksil’s footprint in the market became so large that he was eventually picked off (or perhaps “harpooned” is more appropriate) by Boaz Weinstein (a legend in his own right) among others. One epic Jamie Dimon public relations blunder and several billion dollars later, and the world had learned a valuable lesson about what it means when a bulge bracket bank says it is “investing” excess deposits. 

  Needless to say, some people were curious to know who knew what and when (and who might have tried to cover up the mounting losses) in London and the legal proceedings with various former members of the team are ongoing, but given what we know about the generalized reluctance to prosecute white collar crime mistakes, it shouldn’t come as any surprise that Iksil, who is already off the hook in the US after going to UBS route, has been cleared in the UK. FT has the story:

  The UK financial watchdog has dropped its investigation of Bruno Iksil, the former JPMorgan trader known as the “London Whale” whose trades led to $6.2bn in losses, clearing him in the three-year probe.

   

  The Financial Conduct Authority’s enforcement division sought to bring a civil action against Mr Iksil for failing to prevent or detect mismarking within JPMorgan’s chief investment office.

   

  But its internal panel of independent experts, the Regulatory Decisions Committee, ruled that the watchdog did not have a strong enough case to proceed.

   

  “We can confirm that the FCA will not be taking any further action,” the authority said.

   

  Mr Iksil, who lives in France, has already avoided criminal charges in the US by striking an immunity deal with prosecutors there in exchange for his co-operation.

   

  His lawyer, Michael Potts, at Byrne and Partners, said: ??“It is rare for the RDC to dismiss an FCA enforcement case at this very initial stage of the disciplinary process. Mr Iksil has fully co-operated throughout the FCA investigation and will continue to co-operate as a witness in the ongoing criminal and civil proceedings in the USA.”?

   

  Julien Grout, a junior derivatives trader on the desk, and Mr Iksil’s former boss, Javier Martin-Artajo, who was a managing director at the bank, are both being prosecuted in the US for their roles in the affair. They deny wrongdoing. The FCA is not seeking to bring a case against either man.

   

  The only person still being investigated by UK authorities in connection with the 2011 losses is Achilles Macris, who ran the London office of the bank’s chief investment office and oversaw its synthetic credit portfolio team. It was in that division where trades in credit derivatives ultimately led to the trading losses in 2012.

   

  London-based executives in the CIO “deliberately misled” regulators examining the derivatives positions, “deliberately reassuring” officials that they were “simply” adjusting a hedging position while internally admitting to being “in crisis mode” over mounting losses, the regulators found.

  And so, another episode of Wall Street’s Costliest Gambles ends with the following familiar disclaimer: “No human traders were jailed or otherwise harmed in the making of this program.“

  But before you get angry just remember, it’s only a “tempest in a teapot”…

   

  

  

  

  

  

  

• Peter Schiff On The Big Picture: The Party's Ending

  Submitted by Peter Schiff via Euro Pacific Capital,

  The past four years or so have been extremely frustrating for investors like me who have structured their portfolios around the belief that the current experiments in central bank stimulus, the anti-business drift in Washington, and America's  mediocre economy and unresolved debt issues would push down the value of the dollar, push up commodity prices, and favor assets in economies with relatively low debt levels and higher GDP growth. But since the beginning of 2011, the Dow Jones Industrial Average has rallied 67% while the rest of the world has been largely stuck in the mud. This dominance is reminiscent of the four years from the end of 1996 to the end of 2000, when the Dow rallied 54% while overseas markets languished. Although past performance is no guarantee of future results, a casual look back at how the U.S. out-performance trend played out the last time it had occurred should give investors much to think about.

   

  The late 1990s was the original "Goldilocks" era of U.S. economic history, one in which all the inputs seemed to offer investors the best of all possible worlds. The Clinton Administration and the first Republican-controlled Congress in a generation had implemented policies that lowered taxes, eased business conditions, and encouraged business investment. But, more importantly, the Federal Reserve was led by Alan Greenspan, whose efforts to orchestrate smooth sailing on Wall Street led many to dub Mr. Greenspan "The Maestro."

   

  Towards the end of the 1990's, Greenspan worked hard to insulate the markets from some of the more negative developments in global finance. These included the Asian Debt Crisis of 1997 and the Russian debt default of 1998. But the most telling policy move of the Greenspan Fed in the late 1990's was its response to the rapid demise of hedge fund Long term Capital Management (LTCM), whose strategy of heavily leveraged arbitrage backfired spectacularly in 1998. Greenspan engineered a $3.6 billion bailout and forced sale of LTCM to a consortium of Wall Street firms. The intervention was an enormous relief to LTCM shareholders but, more importantly, it provided a precedent that the Fed had Wall Street's back.

   

  Not surprisingly, the 1990s became one of the longest sustained bull markets on record. But in the latter part of the decade the markets really started to climb in an unprecedented trajectory.  As the bubble began inflating in earnest Greenspan was reluctant to follow the dictum that the Fed's job was to remove the punch bowl before the party got out of hand. Instead he argued that the Fed shouldn't prevent bubbles from forming, but simply to clean up the mess after they burst.

   

  But while U.S. markets were taking off, the rest of the world was languishing, or worse:

   

  

  Created by EPC using data from Bloomberg

  All returns are currency-adjusted

   

  But then a very funny thing happened. In March 2000, the music stopped and the dotcom bubble finally burst, sending the Nasdaq down nearly 50% by the end of the year, and a staggering 70% by September 2001.  When investors got back into the market their values had changed. They now favored low valuations, real revenue growth, understandable business models, high dividends, and low debt. They came to find those features in the non-dollar investments that they had been avoiding.

   

  Over the seven years that began at the end of 2000 and lasted until the end of 2007 the S&P 500 inched upwards by just 11%, for an average annual return of only 1.6%. But over that time frame the world index (which includes everything except the U.S.) was up 72%. The emerging markets, which had suffered the most during the four prior years, were up a staggering 273%. See table below:

   

  

  Created by EPC using data from Bloomberg

  All returns are currency-adjusted

   

  Not surprisingly, the markets and asset classes that had been decimated by the Asian debt and currency crises, delivered stunning results. South Korea, which was only up 10% in the four years prior, was up 312% from 2001-2007. Brazil, which had fallen by 4%, notched a 407% return, and Indonesia, which had fallen by 50%, skyrocketed by 745%.

   

  The period was also a great time for gold and gold stocks. The earlier four years had offered nothing but misery for investors like me who had been convinced that the Greenspan policies would undermine the dollar, shake confidence in fiat currency, and drive investors into gold. Instead, gold fell 26% (to a 20-year low), and shares of gold mining companies fell a stunning 65%.

   

  But when the gold market turned in 2001, it turned hard. From 2001 – 2007, the dollar retreated by nearly 18% (FRED, FRB St. Louis), while gold shot up by 206%, and shares of gold miners surged 512%. As it turned out, we weren't wrong about the impact of the Fed's easy money, just too early.

   

  2010 – 2014

                                       

  In recent years, investors who have looked to avoid the dollar and the high-debt developed economies have encountered many of the same frustrations that they encountered in the late 1990s. Foreign markets, energy, commodities and gold have gone nowhere while the dollar and U.S. markets have surged as they did in 1997-2000.

   

  

  Created by EPC using data from Bloomberg

  All returns are currency-adjusted

   

  It is said history may not repeat, but it often rhymes. If so, there may be a financial sonnet brewing. There are reasons to believe that relative returns globally will turn around now much as they did back in 2000. Perhaps even more decisively.

   

  Just as they had back in the late 1990's, investors appear to be ignoring flashing red flags. In its Business and Finance Outlook 2015, the Organization for Economic Cooperation and Development (OECD), a body that could not be characterized as a harbinger of doom, highlighted some of the issues that should be concerning the markets. Reuters provides this summary of the report's conclusions:

  • Encouraged by years of central bank easing, investors are plowing too much cash into unproductive and increasingly speculative investments while shunning businesses building economic growth.

  • There is a growing divergence between investors rushing into ever riskier assets while companies remain too risk-averse to make investments.

  • Investors are rewarding corporate managers focused on share-buybacks, dividends, mergers and acquisitions rather than those CEOS betting on long-term investment in research and development.

  While these trends have been occurring around the world, they have become most pronounced in the U.S., making valuations disproportionately high relative to other markets. As we mentioned in a prior newsletter, looking at current valuations through a long term lens provides needed perspective. One of the best ways to do that is with the Cyclically-Adjusted-Price-to-Earnings (CAPE) ratio, which is also known as the Shiller Ratio (named after its developer, the Nobel prize-winning economist Robert Shiller).Using 2014 year-end CAPE ratios that average earnings over a trailing 10-year period, the global valuation imbalances become evident:

   

  

   

  As of the end of 2014, the S&P 500 had a CAPE ratio of well over 27, at least 75% higher than the MSCI World Index of around 15. (High valuations are also on evidence in Japan, where similar monetary stimulus programs are underway). On a country by country basis, the U.S. has a CAPE that is at least 40% higher than Canada, 58% higher than Germany, 68% higher than Australia, 90% higher than New Zealand, Finland and Singapore, and well over 100% higher than South Korea and Norway. Yet these markets, despite the strong domestic economic fundamentals that we feel exist, are rarely mentioned as priority investment targets by the mainstream asset management firms. 

   

  In addition, U.S. stocks currently offer some of the lowest dividend yields to compensate investors for the higher valuations (see chart above). The current estimated 1.87% annual dividend yield for the S&P 500 is far below the current annual dividend yields of Australia, New Zealand, Finland and Norway.

   

  If a dramatic shock occurs as it did in 2000, will investors again turn away from high leverage and high valuations to seek more modestly valued investments? Then, as now, we believe those types of assets can more readily be found in non-dollar markets.

   

  Another similarity between then and now is the propensity to confuse an asset bubble for genuine economic growth. The dotcom craze of the 1990s painted a false picture of prosperity that was doomed to end badly once market forces corrected for the mal-investments. When that did occur, and stock prices fell sharply, the Fed responded by blowing up an even bigger bubble in real estate. When that larger bubble burst in 2008, the result was not just recession, but the largest financial crisis since the Great Depression.

   

  But once again investors have mistaken a bubble for a recovery, only this time the bubble is much larger and the "recovery" much smaller. The middling 2% GDP growth we are currently experiencing is approximately half of what we saw in the late 1990s. In reality, the Fed has prevented market forces from solving acute structural problems while producing the mother of all bubbles in stocks, bonds, and real estate. A return to monetary normalcy is impossible without pricking those bubbles. Soon the markets will be faced with the unpleasant reality that the U.S. economy may now be so addicted to monetary heroine that another round of quantitative easing will be necessary to keep the bubble from deflating.

   

  The current rally in U.S. stocks has gone on for nearly four full years without a 10% correction. Given that high asset prices are one of the pillars that support this weak economy, it is likely that the Fed will unleash another round of QE as soon as the market starts to fall in earnest. The realization that the markets are dependent on Fed life support should seal the dollar's fate. Once the dollar turns, a process that in my opinion began in April of this year, so too should the fortunes of U.S. markets relative to foreign markets. If I am right, we may be about to embark on what could become the single most substantial period of out-performance of foreign verses domestic markets.

   

  While the party in the 1990s ended badly, the festivities currently underway may end in outright disaster. The party-goers may not just awaken with hangovers, but with missing teeth, no memories, and Mike Tyson's tiger in their hotel room.

   

  

  

  

  

  

• How The World Works – The Santelligram

  Rick Santelli recently unleashed his own brand of truthiness on an unsuspecting CNBC audience, that, just like in China, “the central planners are in control” in Japan, Europe, and most of all America. As part of the 3 minutes of lack-of-free-market despair, Santelli drew what we called “the chart of the year.” By popular request, it is reproduced below…

   

  The world has change through time…

  

  Source: @Not_Jim_Cramer

  As one bright trader (@Chart_Gazer) noted:

  1. Capitalism

   

  2. Socialism

   

  3. Communism

  So the next time someone throws the “free-market capitalism” bull$hit around, show them this chart and ask them how the US (and European, and Japanese, and Chinese) markets are any different from (3).

  

  

  

  

  

• Violent Crime Is Surging In Major U.S. Cities And The Economy Is Not Even Crashing Yet

  Submitted by Michael Snyder via The End of The American Dream blog,

  Don’t let anyone tell you that crime is going down in America.  All over the United States, rates of violent crime in our major cities are increasing by double digit percentages.  Murders are way up, shootings are way up and rapes are way up.  So what is behind this sudden spike in crime?  In Baltimore, authorities are pointing to the racial tensions that were stirred up by the riots that erupted in protest to the death of Freddie Gray.  But what about the rest of the country?  From coast to coast, we are witnessing a dramatic increase in violent crime, and the economy is not even crashing yet.  So what is going to happen when the next great economic crisis hits us, unemployment skyrockets, and people really start hurting?

  When I was surveying the news today, I was very surprised to learn that the murder rate in Milwaukee, Wisconsin has more than doubled so far this year…

  Milwaukee, which had one of its lowest annual homicide totals in city history last year, has recorded 84 murders so far this year, more than double the 41 it tallied at the same point last year.

  And of course Milwaukee is far from alone.  All over the U.S., violent crime is jumping dramatically.  Here is more from USA Today…

  Baltimore, New Orleans and St. Louis have also seen the number of murders jump 33% or more in 2015. Meanwhile, Chicago, the nation’s third-largest city, has seen the homicide toll climb by 19% and the number of shooting incidents increase in the city by 21% during the first half of the year.

   

  In all the cities, the increased violence is disproportionately impacting poor and predominantly African-American and Latino neighborhoods. In parts of Milwaukee, the sound of gunfire has become so expected that about 80% of gunfire detected by ShotSpotter sensors aren’t even called into police by residents, Flynn said.

  The crimes seem to be getting more brutal as well.  Just the other day, I was stunned by one particular incident that happened in Baltimore…

  Gunmen got out of two vans and began firing at a group gathered on a corner Tuesday night, fatally shooting three people, police said.

   

  The two gunmen shot a total of four people — one who was in stable condition — a few blocks from the urban campus of the University of Maryland, Baltimore, according to police.

   

  The three deaths bring the homicide total for Baltimore for the year to at least 154, according to police news releases. That’s an increase of more than 40 percent compared with the same time last year. Shootings have increased more than 80 percent. The city has seen a spike in violence since the April death of Freddie Gray after his arrest. The incident received widespread national attention and sparked unrest across Baltimore.

  To me, that almost sounds like a scene out of some really violent mobster movie.

  What would cause people to behave like that?

  Things are also getting crazy out on the west coast.  According to Los Angeles Mayor Eric Garcetti, overall crime in the city is up by more than 12 percent so far in 2015…

  For the first time in more than a decade, overall crime is up in Los Angeles through the first six months of the year, rising by more than 12%, according to figures released Wednesday.

   

  The increase has continued despite the city’s efforts to stem the crime surge, which followed consecutive declines since 2003.

   

  “This is bad news,” Mayor Eric Garcetti told reporters Wednesday. “Let me be clear: Any uptick in crime is unacceptable.”

  And some of the crimes that are being committed out there absolutely defy explanation.  For instance, just the other day someone walked up to a 30-year-old white woman as she was strolling with her boyfriend and fired a shotgun into the back of her head for apparently no good reason whatsoever…

  Sunday night in Los Angeles as a 30 year-old white woman walked with her boyfriend near Sunset Boulevard in Hollywood, a mysterious black man walked up behind the couple and without saying a word fired a shotgun blast to the back of the woman’s head, according to police.

   

  The killer was seen carrying the shotgun as he ran to a car and drove away.

   

  The search for the killer continues.

  But it isn’t just murder rates that are surging.  Sex crime rates are also on the rise all over America.  The following is an excerpt from a recent New York Post article entitled “Sex crimes are soaring in NYC“…

  Sex crimes are soaring in the city, with an especially frightening spike taking place during the past few weeks, The Post has learned.

   

  Misdemeanor sexual assaults as of Sunday night this year increased by 20 percent over the same period in 2014, from 1,003 to 1,203.

   

  But they shot up 75 percent for the week ending Sunday compared to the same week last year — from 45 to 79.

  I believe that we have reached a turning point.

  I believe that we have entered a period of time when violent crime in the United States is going to start skyrocketing – especially once the next major economic downturn arrives.

  Meanwhile, budget cuts are forcing police forces to cut back all over the nation.  For example, the number of patrol officers in the city of Detroit has been reduced by 37 percent in the last three years alone…

  There are currently fewer officers patrolling the city than at any time since the 1920s. At one point, the Detroit police force was over 5,000. Today, the force is just 1,590 officers strong — and not all of those are on the street.

   

  The city has lost nearly half its patrol officers since 2000 and ranks have shrunk by 37 percent in the past three years alone, according to the Detroit News. It’s so bad that precincts are reportedly left with only one squad car at times.

  But at least the police in the area have still maintained their sense of humor.  Just recently, someone stole 28,000 pounds of packaged nuts from a location in suburban Detroit…

  Police in suburban Detroit are having a little fun while asking for help from the public in figuring out who swiped roughly 28,000 pounds of packaged nuts.

   

  The Shelby Township Police Department says a truck and trailer packed with 18 pallets of walnuts and other snack nuts were taken the weekend of June 27. Police say the truck and trailer were found July 1 in Detroit, but the nuts worth more than $128,000 were gone.

  This is the photo of the suspect that was actually released by the police…

  

  Do you know this suspect?  If so, please contact the authorities right away.

  

  

  

  

  

• Mapping The World's "Grey Swans"

  As H2 2015 begins, Goldman looks at so-called “grey swans” – known market risks that could prove particularly disruptive. From China credit risks to Russia and from rate volatility to Russia with Middle East tensions, cyber threats, and illiquidity-induced ‘flash-crashes’, the known-but-not-priced-in risks are rising… because – simply put – central bank omnipotence remains the narrative (for now).

  Russia is fading as a risk quickly (much to Washington’s chagrin) as China risk accelerates rapidly…

  

   

  And over time…

  

   

  And so while Janet keeps trying to talk down any rate hikes as ‘priced-in’ or not an issue, the market (and Goldman) clearly thinks differently as sees interest rate volatility as the biggest “grey swan” currently… and when the costs of capital vary dramatically, CFOs will tamp down their debt-financed buybacks…

   

  Source: Goldman Sachs

  

  

  

  

  

• Organized Plunder, a.k.a. The State

  Authored by Bill Bonner via Bonner & Partners (annotated by Acting-Man.com's Pater Tenebrarum),

  Whose Side Are You On?

  On one side: the Fed… the NSA… the CIA… Fannie Mae… Freddie Mac… the trade unions… Wall Street… the dollar… Obamacare… New York’s taxi system… QE… the wars on terror, poverty, illiteracy, and drugs… Dodd-Frank… the TSA… the ATF… millions of retirees and disability scammers… General Motors… Hillary Clinton… and many, many others…

   

   

  

  A widely held and quite erroneous belief …

  On the other: Airbnb… Uber… cryptocurrencies… “Main Street”… businesses… families… gold… young people… savers… Freemasons… Ron Paul… truck drivers… the Episcopal Church… Elks… entrepreneurs… free markets… and millions of honest people who make their livings and live their lives as best they can without holding a gun to anyone else’s head.

  Yes, dear reader, maybe it was too much alcohol or too little food. But in the night, a vision came to us. It revealed the big picture in a way we hadn’t seen it. Zombies, you’ll recall, are people and institutions that live at the expense of others. How?

  Some are freelance criminals. But most depend on government to get the flesh they need. People don’t give up their own blood readily. They run. They hide. They try to protect themselves. But government maintains a territorial monopoly on the one thing that does the trick – violence.

  So today, we stoop to admire the institution of government. What a beautiful racket! It typically takes 20% to 50% of an economy’s output. It makes the rules. It sets the pace. And woe to anybody or anything that gets in its way…

  

  Murray Rothbard’s concise definition of the State

   

  Everybody Is a Customer

  You can divide an economy into three estates: households, businesses, and government. Of the three, government is in the best position by far. Everybody is a customer of the government, whether he wants to be or not. And when you have control of the government, you set the terms of the deals with the other estates. And you can change the terms whenever you want.

  That’s why there is so much money in politics – because you can get so much money from politics! A person can go into government with nothing; he comes out with a fortune.

  Dick Cheney, for example, huffed and puffed almost his entire career in politics, except for a brief stint with a crony defense contractor. Now, he’s said to be worth $80 million.

   

  

  Dick Cheney – from nada to $80 million – a political career can be quite remunerative.

  Photo via politicususa.com

   

  Or Hillary Clinton. She has never had a job in the productive economy. She is said to be worth $21 million. Successful politicians get the best parking places… the best offices… and other perks and privileges that no one else gets

   

  

  Hillary Clinton: never produced anything consumers would voluntarily acquire, and yet, is said to be worth $21 million.

  Photo credit: Pablo Martinez Monsivais / Associated Press

   

  Members of Congress also routinely exclude themselves from the rules and regulations they’ve made for others. For example, it is illegal for U.S. companies to misstate their financial positions; for government it is business as usual. In the private sector, fraud is a crime; in government it is “just politics.”

  As to the business community, government has a mixed relationship. Every business is a source of funds. In addition to the money it gets from taxation, confiscations, and other predations, government also gets bribes in various forms.

  A retired Congressman, for example, can look forward to a career as a lobbyist for the industries he promoted while in office. Or he can make money by giving dull speeches to industry groups. He may choose to do a little consulting, too, or haunt the board of directors.

   

  

  “Where we are right now”, a public service message sent by Bastiat

   

  Businesses usually begin as productive enterprises. But almost all have zombie tendencies. Once they reach a certain size, they recognize that the best investment they can make is in politics. They hire lobbyists. They pay crony politicians.

  In return, government enacts rules and regulations to stifle competition. But as with so many of its activities, government succeeds when it fails. As a new industry arises, the money still flows from the cronies, while the feds get a piece of action from the new enterprises, too.

  And households? They grouse and groan. But the masses usually love government. They think business people are greedy SOBs. But they often hold the fellows who run the government racket in the same exalted category as saints, TV stars, and sports heroes. Don’t believe it?

  At a recent reception in Baltimore, we noticed people gathered around a familiar face. It wasn’t Baltimore Ravens owner Art Modell; it was former senator Paul Sarbanes. Just look around Washington… or any major city for that matter. Do you find statues of Henry Ford? Where is the marble bust of Alexander Fleming, discoverer of penicillin? Where is the pile honoring Sam Walton?

  Instead, you find plenty of granite spent to honor scalawags and scoundrels – Lincoln, Wilson, and FDR, to name just a few. And who’s next?

   

  

  A collection of past scoundrels and scalawags hewn in granite and cast in bronze …

   

  Hillary Is a Terrible Candidate – but is Brain-fog any Better?

  In politics, as in markets, nobody knows anything. But we were seated at dinner last night next to a seasoned political analyst…

  “Hillary won’t win the White House,” he confided. “She might not even win the nomination.”

  We recall that much of what he said was off record, but we can’t remember which parts. So, we will leave his name out of the Diary; he may have spoken more candidly than he had wished.

  “The trouble with Hillary is that she’s a Clinton without Bill’s charm. And she’s yesterday’s news. She couldn’t even beat Obama. And he’s a terrible politician.

  “Obama only got elected because of a unique set of circumstances – Hillary and George W. Bush. People were sick of Bush. Hillary is a weak candidate.

  “So now we’re seeing other candidates come out. Bernie Sanders is showing us how vulnerable she is. Others will be encouraged. One of them will probably get some traction.

  “Jim Webb is not getting any money from the establishment. But he has real appeal to the voters.

  “As for the Republicans… Hard to say. I’ve met them all. Rand Paul is smart. But he doesn’t have the funding. Or the political network. He’s too much of an outsider and a maverick to be acceptable.

  “The trouble with Ted Cruz is that he is inflexible. He’s very smart and right about a lot of things. But you have to be fairly flexible to get elected president.

  “The one I really like is Rick Perry. I know, he sounds like an idiot. But he’s not. They just caught him at a bad moment, when he was on painkillers from dental surgery, or something.

  “You remember – he couldn’t recall which department he would abolish if he were elected. It was just a case of brain fog. But it happens to everyone.

  “He’s actually very smart… and a good campaigner.”

  We’ve never met Rick Perry, so we can’t say either way…

   

  

  Modern Zombies: Ms. “Hard Choices” and Mr. Brain-fog… we actually think we would be quite happy with never hearing about either of them again for the rest of our life…

  

  

  

  

  

• Greek Businesses Accept Lira, Lev As Grexit Looms

  With the Greek drama headed into its final act and Alexis Tsipras stuck between an obstinate Germany and a recalcitrant Left Platform, many wonder if the introduction of an alternative currency in Greece is now a foregone conclusion.

  Even if Athens and Brussels manage to strike a deal over the weekend, the country still faces an acute cash shortage and a severe credit crunch that threatens to create a scarcity of critical imported goods. 

  Amid the chaos, the Greek Drachma has made two mysterious appearances this week (see here and here), suggesting that the EU is on the verge of forcing the Greek economy into the adoption of a parallel currency and while this week’s Drachma “sightings” might properly be called anecdotal, a report from Kathimerini and comments from deposed FinMin Yanis Varoufakis suggest redenomination rumors are not entirely unfounded. 

  Now, with the ECB set to cut Greek banks off from the ELA lifeline on Monday morning in the absence of a deal, some businesses are mitigating the liquidity shortage by accepting foreign currency. FT has more:

  Like many Bulgarians, Kostadin Dobrev, is a regular visitor to the beaches and bars of northern Greece. But this week, the holidaying firefighter immediately noticed things were different. First, the shops were half-empty. Then, even more surprising, he found Greek hotels and restaurants were happy to accept the Bulgarian lev.

   

  As Europe’s politicians prepare for a weekend summit to decide whether Greece can stay in the eurozone, Mr Dobrev’s experience highlights how the old certainties are collapsing. By early next week Greeks could be preparing for life outside the euro and a possible return to the drachma.

   

  Many Greeks in the retail and leisure industry say it makes increasing sense to accept Bulgarian and Turkish money at a time when tourism, the country’s economic lifeblood, is under threat. The tourism confederation said last-minute bookings plummeted 30-40 per cent, compared with the same period in 2014, after Greece imposed capital controls last week.

   

  Athanasos Kritsinis, who runs the Krita chain of supermarkets, said Bulgarians visiting his shops in the northern cities of Xanthi and Komotini were paying in leva.

   

  “There is nothing bad in accepting Bulgarian leva because it is stable and pegged to the euro so why not accept to do business with it? It is legal. There is no reason not to accept,” he said. 

  Yes, “no reason not to accept.” There are however, quite a few reasons for Germany “not to accept” Tsipras’ latest proposal and for Greeks “not to accept” a deal that flies in the face of a referendum outcome that’s not even a week old. 

  And so as we kick off yet another weekend where all eyes turn nervously to Brussels on Saturday and to Athens on Sunday, the million dollar question seems to be this: what will the preferred payment method be in Greece this time next week? Lira, lev, drachma, or euro?

  

  

  

  

  

• 5 Things To Ponder: "China Rising" Or Not?

  Submitted by Lance Roberts via STA Wealth Management,

  Things have certainly changed since I was a child. When I was growing up my father would come outside to give the traditional "dinner whistle." As was often the case, the common response was "Can we play for five more minutes? Please?"

  Times have certainly changed. Today, my "dinner whistle" is often met with:

  "Coming, just let me get to save point."

  My kids are huge fans of the Electronic Arts "Battlefield" series of multiplayer military warfare games. The other night, one of the downloadable content (DLC) maps on which they were playing caught my attention. It was entitled "China Rising."

  Had it not been for the recent headlines of the Shanghai index, it would have likely gone unnoticed. However, given the collapse in the index of nearly 30% over the last month, and the potential implications for domestic economy and markets, I thought it was most apropos.

  China Rising? Well, it was. And this last week, we saw what the perils of a leveraged market can be when things go "inevitably wrong."

  "The perils of margin debt should not be readily dismissed. For a real time example of financial market leverage and consequences, one needs to look no further than the Shangai Index in China. That market is in a complete collapse as plunging prices are forcing investors to sell shares. While the Chinese government has injected liquidity, suspended trading in almost half of the listed equities and encouraged pension funds to buy securities, these actions have done little to stem the decline as investors "panic sell" in a rush to safety. That collapse, if history is any guide, is likely not done as shown in the chart below."

  

  "Also, notice the correlation between peaks in the Shanghai Index and the S&P 500. According to a recent Bloomberg article, margin debt in China reached $264 Billion in April of this year. After adjusting for the size of the two markets, is about double that of the roughly $500 billion in margin debt in the U.S.

   

  This difference in relative size was given as a prime example about how margin debt is not a problem for the U.S. However, the relative size of margin debt in the past has not been a "safety net" that investors should rely on. As shown, the level of real (inflation adjusted) margin debt as a percentage of real GDP has reached levels only witnessed at the peaks of the last two financial bubble peaks in the U.S."

  

  "While no single indicator should be relied upon as a measure to manage a portfolio, it should be well understood by now that leverage is a "double-edged sword." While rising margin debt levels provide the additional liquidity to drive stock prices higher on the way up, it also cuts deeply as prices fall."

  This weekend's reading list is a collection of analysis as to the potential impact of the deflating of the Chinese bubble. Will the interventions by the Chinese government stem the tide of selling or only postpone it? More importantly, is history set to repeat itself. "China Rising" may have been the sound of the "sound of the bell" being rung for the bull market that begin in 2009. While it is too early to know for certain, at least things are getting a bit more interesting. Let's just try and get to a "save point" first.

  ---

  1) The Greek Crisis Is Nothing Compared To China by Paul La Monica via CNN Money

  "Why does this matter to people outside of China? A rapidly sinking stock market is often a sign of an economy in turmoil. Remember 2008? And 2000?

   

  Since China is the second largest trading partner for both Europe and the United States, it goes without saying that a healthy Chinese economy is good news for the developed world. All that talk about the possibility of Greek contagion if it is forced to drop the euro and bring back the drachma? That seems overdone too.

   

  Economists at the Royal Bank of Scotland tweeted out a chart last week that showed that U.S. banks have nearly ten times as much exposure to China than Greece."

  

  Read Also: Goldman Sachs Says There's No China Stock Bubble by Cindy Wang via Bloomberg Business

  2) Why Beijing Cannot Let Its Bull Market Die by Craig Stephen via MarketWatch

  "So this takes us to the current point where controlling the market has been elevated to a test of strength for Beijing and its state-led model.

   

  In China, it shouldn't be too much of a stretch to believe that the government has the ability to control stock prices through force of will. Beijing has a long history of being able to bend market forces to meet its ends — from interest rates, currency values and the movement of capital in its captive financial system.

   

  But as shares continue to slide regardless of government action, investors are increasingly not buying the government line and, more ominously for President Xi Jinping, they are less willing to believe that he and the party are indeed all-powerful.

   

  To get a sense of what the wider fallout from a correction could be, it helps to compare China now to its previous equity boom-and-bust in 2007."

  Read Also: Why This Chinese Bubble Is Different by John Authers via FT

  Read Also: 5 Reasons Why China Really Matters by Mohammed El-Erian via Bloomberg

  3) China's Big Misquided Gamble On Its Stock Market by Minxin Pei via Fortune

  "In real market economies, stock crashes of such magnitude may cause heartburn but unlikely precipitate frenzied government efforts to prop up equity prices. But China is, as we know, not exactly a market economy and has a government that acts differently. In response to the latest crash, instead of allowing market forces to self-correct, Beijing is rolling out aggressive measures to keep the bubble from popping completely.

   

  Beijing should be building social safety nets and recapitalizing its banks, not betting the house on a stock market bubble."

  Read Also: China And The Delusion Of Control by David Keohane via FT

  

  4) China Or Grexit? What's Driving Markets by Bryce Coward via GaveKal Capital

  "While some of the post Greferendum moves in financial markets could have been and were predicted by the financial punditry – lower euro, lower stocks, lower US bond yields, higher gold – the real moves have appeared elsewhere. Indeed, as of this writing the euro is only lower against the USD by less than .5%, the MSCI World Index is barely off by 1%, bonds are bid, but not emphatically, and gold is only marginally higher.

   

  The real moves have been in oil (WTI down 6.3% and Brent down 5%) and copper (down 3.9%). While at first glance this may strike one as odd, there could be something larger at work. Perhaps the more important catalyst for asset price changes of late is Chinese economic slowing rather than fears of Grexit?"

  

  Read Also: US Stocks: Last Man Standing by Meb Faber via Faber Research

  5) China's Stock Market Crash Is Just Beginning by Howard Gold via MarketWatch

  "As I've written many times, China, Brazil, Russia and other emerging markets are suffering through secular bear markets that will last years. Since Chinese stocks represent more than 20% of some emerging-markets ETFs, the pain will likely continue well into this decade.

   

  Secular bear markets feature sudden, violent rallies and mini–bull markets that fool people into thinking they're the genuine article. In real bull markets, indexes repeatedly top their previous highs; in bear markets, they never do."

  Read Also:  Chinese Stocks: What's Behind The Great Market Tumble? by Knowledge@Wharton

  ---

  Other Interesting Reads

  Why Momentum Investing Works by Ben Carlson via Wealth Of Common Sense

  Cyclical Bull, Structural Bear Still by Eric Bush via GaveKal Capital

  Old Economic Thinking Is The Problem, Says BIS by Yves Smith via Naked Capitalism

  ---

  "????(nan dé hú tu) – Where ignorance is bliss, it's folly to be wise." – old Chinese proverb.

  Have a great weekend.

  

  

  

  

  

• Varoufakis' Stunning Accusation: Schauble Wants A Grexit "To Put The Fear Of God" Into The French

  Earlier we reported that Yanis Varoufakis, seemingly detained by “family reasons” would be unable to join his fellow parliamentarians and personally vote in what is likely the most important vote of Syriza’s administration: the one in which he and his party capitulate to the Troika and vote “Yes” to the proposal he and Tsipras urged everyone to reject just one week ago.

  Subsequently, it was made clear what these family reasons are:

  The self-described “erratic Marxist” will be on the nearby holiday island of … Aegina. In fact, he Tweeted that he reason for his absence is “family reasons”. Nevertheless, two hours before his Tweet was posted, the once obscure academic was spotted on the ferry boat “Phivos”, headed for Aegina, where his wife owns a stylish vacation home.

   

  The author of the “global Minotaur” nevertheless sent a letter to the Parliament president saying he would vote “yes” for the proposal, although the letter will not be counted, given that Parliament regulations stipulate that only deputies on official Parliament business are allowed to cast votes via correspondence.

   

  

  Judgment aside about his decision to take a holiday from a vote that his strategy guided Greece into, it was clear that he has Wifi on the ferry because this afternoon, While V-Fak may well have been in transit, the Guardian released an Op-Ed penned by Varoufakis titled “Germany won’t spare Greek pain – it has an interest in breaking us.” Readers can read it in its entirety here but here is the punchline:

  This weekend brings the climax of the talks as Euclid Tsakalotos, my successor, strives, again, to put the horse before the cart – to convince a hostile Eurogroup that debt restructuring is a prerequisite of success for reforming Greece, not an ex-post reward for it. Why is this so hard to get across? I see three reasons.

   

  One is that institutional inertia is hard to beat. A second, that unsustainable debt gives creditors immense power over debtors – and power, as we know, corrupts even the finest. But it is the third which seems to me more pertinent and, indeed, more interesting.

   

  The euro is a hybrid of a fixed exchange-rate regime, like the 1980s ERM, or the 1930s gold standard, and a state currency. The former relies on the fear of expulsion to hold together, while state money involves mechanisms for recycling surpluses between member states (for instance, a federal budget, common bonds). The eurozone falls between these stools – it is more than an exchange-rate regime and less than a state.

   

  And there’s the rub. After the crisis of 2008/9, Europe didn’t know how to respond. Should it prepare the ground for at least one expulsion (that is, Grexit) to strengthen discipline? Or move to a federation? So far it has done neither, its existentialist angst forever rising. Schäuble is convinced that as things stand, he needs a Grexit to clear the air, one way or another. Suddenly, a permanently unsustainable Greek public debt, without which the risk of Grexit would fade, has acquired a new usefulness for Schauble.

   

  What do I mean by that? Based on months of negotiation, my conviction is that the German finance minister wants Greece to be pushed out of the single currency to put the fear of God into the French and have them accept his model of a disciplinarian eurozone.

  He does have a point: Recall “Forget Grexit, “Madame Frexit” Says France Is Next: French Presidential Frontrunner Wants Out Of “Failed” Euro.” So perhaps making an example of the social collapse that would result from a Eurozone exit, would be seen a good lesson for French voters ahead of the 2017 French presidential elections in Schauble’s mind

  But is Varoufakis right? Perhaps … but also recall this from the FT in 2014 recalling Europe’s first formulation of Plan Z:

  To the astonishment of almost everyone in the room, Angela Merkel began to cry.

   

  “Das ist nicht fair.” That is not fair, the German chancellor said angrily, tears welling in her eyes. “Ich bringe mich nicht selbst um.” I am not going to commit suicide.

   

  For those who witnessed the breakdown in a small conference room in the French seaside resort of Cannes, it was shocking enough to watch Europe’s most powerful and emotionally controlled leader brought to tears.

   

  But the scene was even more remarkable, those present said, for the two objects of her ire: the man sitting next to her, French President Nicolas Sarkozy, and the other across the table, US President Barack Obama.

   

  Greece was imploding politically; Italy, a country too big to bail out, appeared just days away from being cut off from global financial markets; and Ms Merkel, try as Mr Sarkozy and Mr Obama might, could not be convinced to increase German contributions to the eurozone’s “firewall” – the “big bazooka” or “wall of money” they believed had to grow dramatically to fend off attacks by panicking bond traders.

   

  Instead, a cornered Ms Merkel threw the French and American criticism back in their faces. If Mr Sarkozy or Mr Obama did not like the way her government ran, they had only themselves to blame. After all, it was their allied militaries that had “imposed” the German constitution on a defeated wartime foe six decades earlier.

   

  “It was the point where clearly the eurozone as we know it could have exploded,” said a member of the French delegation at Cannes. “It was the feeling [that with] the contagion, at this point, you were on the brink of explosion.”

  Will this time Merkel risk the explosion of the Eurozone with her own actions: her biggest historic legacy? Probably not, and while Schauble has much sway, it is still Merkel’s word over his.

  No, Varoufakis may be right about Greece being made an example of (unless he is merely trying to deflect blame from himself for putting Greece in this position and for conspicuously avoiding voting for a plan he himself derided untilt the end), but the one person who will decide the future of Greece in the Eurozone is neither Schauble nor Merkel but Mario Draghi, also known as Goldman Sachs. Because if Goldman wants more Q€, it will get more Q€.

  

  

  

  

  

• Dramamine Required: Stocks End Week Unchanged Despite Nausea-Inducing Wild Ride

  Despite the rampacious surge in stocks, some context on the week… Nasdaq & S&P 500 End Red, Small Caps and Trannies squeezed to death…

  

   

  Seems to be summed up thus…

   

  Perhaps the week in futures shows the violence of the swings more impressively…

  

   

  A Double Squeeze…

  

   

  From last night's cash close, stocks never looked back as they saw the Tsipras proposal as a done-deal…

  

   

  Cash gapped open at the open… (Note, before it slipped, this was the biggest day for the Nasdaq since January!!), and never went anywhere from the initial squeeze..

  

   

  Before we move on – it is worth noting that The S&P 500 is still below 2,100, The Dow is still below 18,000, and The Nasdaq is still below 5,000.

  Quite a week in China A-Shares ETF…

  

   

  VIX was crushed today…

  

   

  There was only one thing keeping the dream alive in stocks… The BoJ!!

  

   

  Some context across assets – Since "OXI!" Vote…

  

   

  And Since "Greferendum" announcement…

  

   

  Treasuries were smacked with an ugly stick in the last 2 days, dragging yields positive for the week…

  

   

  This is the worst 2 day rip in yields since the Taper Tantrum over 2 years ago…

  

   

  The USDollar dropped early on EUR strength then rallied as US opened…

  

   

  But the real story of the day was JPY (and in particular EURJPY) – the biggest jump in EURJPY since April 2013 – even more than the day QE3 died and QQE2 was unleashed…

  

   

  Commodities were mixed today, crude fell on further rig count increases, copper slipped and PMs were flat…

  

   

  This is WTI's worst 2 week run since Dec 2014…

  

   

  Gold has been peculiarly quiet the last 2 days…Since China took control – someone wanted gold under control…

  

  Charts: Bloomberg

  Bonus Chart: "Yes, we are all different!"

   

  @RudyHavenstein maybe you can think of a punchline for this pic? …. pic.twitter.com/zTa0CVz9I9

  — London Analyst (@LondonAnalyst) July 9, 2015

  

  

  

  

• The One Common Feature In Every Financial Crisis

  Submitted by Simon Black via Sovereign Man blog,

  Spontaneous combustion.

  Alien invasion.

  Zombie apocalypse.

  What do these have in common? Their likelihood is next to impossible. So why worry?

  This is how people tend to think about the financial system.

  Mentioning even the possibility, for example, that the US could default on its debt is met with so much scorn and contempt it would be safer to stand on the street corner warning about an alien invasion.

  The same goes for the imposition of capital controls. Or a collapse in the banking system. Or a currency crisis.

  No one, from the average guy on the street to a Nobel Prize-winning economist, wants to acknowledge that these possibilities exist.

  And yet the most casual glance at the headlines proves that these events not only can happen, they do happen.

  The Greek government is broke. This didn’t happen overnight. It’s not like Greece has always been a picture of financial health and just recently fell on tough times.

  Greece has been broke for ages. As has the Greek banking system– overstuffed with government IOUs and bad loans that have no hope of being repaid.

  And that’s why we’re seeing everything unfold in the headlines. Bank runs. Capital controls. Default.

  It all starts with debt. Whenever a country gets too deep into debt, it’s going to get into trouble. History is very clear on this point.

  Debt almost always leads to negative consequences, most notably default.

  They’ll either default on their private creditors, i.e. the poor souls who loaned them money to begin with.

  Or they’ll default on foreign governments, creating destructive trade wars and currency crises.

  Mostly, though, they’ll default on their obligations to their citizens– suspending pension payments, imposing capital controls, raising taxes, destroying the value of the currency, and bailing in the banks with customer deposits.

  Debt kills. And sooner or later, if history is any guide, nearly every heavily indebted nation will resort to this very limited playbook.

  Just look at Greece: the government has established tight restrictions over bank withdrawals and is even preventing people from accessing safety deposit boxes.

  This highlights yet again that banks are merely an extension of their governments– stooges that will turn against you in a heartbeat and comply with every order their bankrupt master gives them.

  It’s foolish to hold one’s life savings within the banking system of a heavily-indebted nation.

  And doing something about it need not be complicated.

  It’s 2015. You can move savings to an offshore bank account (i.e. a stable foreign bank with very strong fundamentals) without having to leave town.

  Or in some cases, without leaving your living room.

  It’s also easy to hold real assets like gold and silver in a fully insured, non-bank safety deposit box overseas.

  This is sound advice for anyone living in a heavily-indebted nation.

  It’s not some wild assertion or conspiracy theory to acknowledge that there’s risk in the system. The publicly-available data is very clear: almost every western nation is insolvent and far past the point of no return.

  These are real risks not to be assumed away. They’re uncomfortable and unpopular to think about. But they are not negligible.

  And in the face of such clear data, rational, thinking people ought to have a Plan B.

  

  

  

  

  

• Someone Pull The Plug Or This Will End In War

  Submitted by Raul Ilargi Meijer via The Automatic Earth blog,

  I was going to write up on the uselessness of Angela Merkel, given that she said on this week that “giving in to Greece could ‘blow apart’ the euro”, and it’s the 180º other way around; it’s the consistent refusal to allow any leniency towards the Greeks that is blowing the currency union to smithereens.

  Merkel’s been such an abject failure, the fullblown lack of leadership, the addiction to her right wing backbenchers, no opinion that seems to be remotely her own. But I don’t think the topic by itself makes much sense anymore for an article. It’s high time to take a step back and oversee the entire failing euro and EU system.

  Greece is stuck in Germany’s own internal squabbles, and that more than anything illustrates how broken the system is. It was never supposed to be like that. No European leader in their right mind would ever have signed up for that.

  Reading up on daily events, and perhaps on the verge of an actual Greece deal, increasingly I’m thinking this has got to stop, guys, there is no basis for this. It makes no sense and it is no use. The mold is broken. The EU as a concept, as a model, has failed and is already a thing of the past.

  It’s over. And anything that’s done from here on in will only serve to make things worse. We should learn to recognize such transitions, and act on them. Instead of clinging on to what we think might have been long after it no longer is.

  Whatever anyone does now, it’ll all come back again. That’s guaranteed. So just don’t do it. Or rather, do the one thing that still makes any sense: Call a halt to the whole charade.

  As for Greece: Just stop playing the game. It’s the only way for you not to lose it.

  There’s no reason why European countries couldn’t live together, work together, but the EU structure makes it impossible for them to do just that, to do the very thing it was supposed to be designed for.

  Germany runs insane surpluses with the rest of the EU, and it sees that as a sign of how great a country it is. But in the present structure, if one country runs such surpluses, others will need to run equally insane deficits.

  Cue Greece. And Italy, Spain et al. William Hague for once was right about something when he said this week that the euro could only possibly have ended up as a burning building with no exits. This is going to lead to war.

  Simple as that. It may take a while, and the present ‘leadership’ may be gone by then, but it will. Unless more people wake up than just the OXI voters here in Greece.

  And the only reason for it to happen is if the present flock of petty little minds in Berlin, Paris, London and Brussels try to make it last as long as they can, and call for even more integration and centralization and all that stuff. The leaders are useless, the structure is painfully faulty, and the outcome is fully predictable.

  Europe has no leadership, it has a varied but eerily similar bunch of people who crave the power they’ve been given, but lack the moral sturctures to deal with that power. Sociopaths. That’s what Brussels selects for.

  And Brussels is by no means the only place in Europe that does that. What about people like Schäuble and Dijsselbloem, who see the misery in Greece and loudly bang the drum for more misery? What does that say about a man? And what does it say about the structure that allows them to do it? At times I feel like the Grapes of Wrath is being replayed here.

  It’s nice and all to claim you’re right about something, but if your being right produces utter misery for millions of others, you’re still wrong.

  Greece is not an abstract exercise in some textbook, and it’s not a computer game either. Greece is about real people getting hurt. And if you refuse to act to alleviate that hurt, that defines you as a sociopath.

  Germany now, and it took ‘only’ 5 months, says Greece needs debt relief but it also says, through Schäuble: “There cannot be a haircut because it would infringe the system of the European Union.” That’s exactly my point. That’s silly. And looking around me here in Athens for the past few weeks, it’s criminally silly. You acknowledge what needs to be done, and at the same time you acknowledge the system doesn’t allow for what needs to be done. Time to change that system then. Or blow it up.

  I don’t care what people like Merkel and Schäuble think or say, once people in a union go hungry and have no healthcare, you have to change the system, not hammer it down their throats even more. If you refuse to stand together, you can be sure you’ll fall apart.

  Get a life. Greece should just default on the whole thing, and let Merkel and Hollande figure out the alleged Greek debt with their own domestic banking sectors. They’re the ones who received all the money that Greece is now trying to figure out a payback schedule for.

  Problem with that is of course that very banking sector. They call the shots. The vested interests have far too much power on all levels. That’s the crux. But that’s also the purpose for which a shoddy construct like the EU exists in the first place. The more centralized politics are, the easier the whole thing is to manipulate and control. The more loopholes and cracks in the system, the more power there is for vested interests.

  Steve Keen just sent a link to an article at Australia’s MacroBusiness, that goes through the entire list of new proposals from the Syriza government, and ends like this:

  Tsipras Has Just Destroyed Greece

  This is basically the same proposal as that was just rejected by the Greek people in the referendum. There are some headlines floating around about proposed debt restructuring as well but I can’t find them. This makes absolutely no sense. The Tsipras Government has just:

  • renegotiated itself into the same position it was in two months ago;
  • set massively false expectations with the Greek public;
  • destroyed the Greek banking system, and
  • destroyed what was left of Greek political capital in EU.

   

  If this deal gets through the Greek Parliament, and it could given everyone other than the ruling party and Golden Dawn are in favour of austerity, then Greece has just destroyed itself to no purpose. Markets are drawing comfort from the roll over but how Tsipras can return home without being lynched by a mob is beyond me. And that raises the prospect of any deal being held immediately hostage to violence.

  Yes, it’s still entirely possible that Tsipras submitted this last set of proposals knowing full well they won’t be accepted. But he’s already gone way too far in his concessions. This is an exercise in futility.

  It’s time to acknowledge this is a road to nowhere. From where I’m sitting, Yanis Varoufakis has been the sole sane voice in this whole 5 month long B-movie. I think Yanis also conceded that it was no use trying to negotiate anything with the troika, and that that’s to a large extent why he left.

  Yanis will be badly, badly needed for Greece going forward. They need someone to figure out where to go from here.

  Just like Europe needs someone to figure out how to deconstruct Brussels without the use of heavy explosives. Because there are just two options here: either the EU will -more or less- peacefully fall apart, or it will violently blow apart.

  

  

  

  

  

• China's Margin Debt Is "Easily The Highest In The History Of Global Equity Markets"

  Back in March, when not many outside of China had actually noticed the ridiculous Chinese asset bubble, and when the PBOC had yet to announce the arrest of malicious stock buyers (come to think of it, it still hasn’t), we posted “That Ain’t No Margin Debt: THIS Is Margin Debt” in which showed the catalyst behind China’s unprecedented stock market move higher: a gargantuan increase in margin debt (a reorientation of shadow banking whose conventional conduits were closed since late-2014) which allowed every local illiterate tom, dick, farmer and grandma to participate in the great wealth transfer from the lower and middle classes to corporations and insider sellers.

  

  But so what: the NYSE margin debt at half a trillion is greater, some say and indeed, in isolation China’s stock market leverage was not a very useful indicator. So here it is in some truly sensation context thanks by Goldman Sachs:

  The explosion in margin financing behind the recent astonishing run-up in Chinese A shares is a new twist on China credit concerns, a long-standing grey swan for Chinese and global growth. As of the beginning of June, the balance of margin financing outstanding was RMB2.2tn, an estimated 12% of the free float market cap of marginable stocks and 3.5% of GDP—easily the highest in the history of global equity markets. And these estimates do not take into account “hidden” leverage from other types of borrowing (i.e., consumer loans and trust products) where proceeds were used to invest in stocks, which we estimate at RMB 1tn to RMB 1.5tn, assuming effective system-wide leverage of 2.2x.

   

  We estimate that a significant portion of the hidden leverage has now been unwound and the reported official margin balance has dropped to RMB1.5tn. This unwinding has contributed to a dramatic correction in Chinese equity markets, erasing a sizable portion—though not all—of the stock gains this year. While a range of market-supporting policies (banning of selling from large stakeholders for a period of six months, suspending IPOs, relaxing the forced selling requirement of underwater margin positions, among others) finally halted the sell-off on July 9, questions remain about whether the equity market turmoil could threaten other Chinese assets, economic growth and broader financial market stability.

  And here it is visually:

  

   

  In other words, there is a lot more margin debt unwinding yet to come which also explains the unprecedented panic by Chinese authorities to step in and prevent the ongoing market crash at all costs…

  

   

  … even if it means filling up China’s prisons with malicious sellers who refuse to see how this epic, Frankenstein experiment in central-planning ends and, daring to break the law, sell.

  

  

  

  

  

• How The SEC Engineered Every Stock Market Bubble Since 1982

  Submitted by Daniel Drew via Dark-Bid.com,

  Many Americans have discovered that those entrusted to protect us often become the most dangerous threats. Whether it's corrupt cops, bogus journalists, or even Ponzi-scheming church elders, it's not difficult to understand why trusting authorities has seemed like a risky proposition. Now, another institution deserves extra scrutiny. A closer look at the Securities and Exchange Commission reveals a single moment in time when the future of the country was transferred from the middle class to the uber-rich.

  The story of the SEC begins with power and corruption. Joseph Kennedy became the first chairman of the SEC in 1934. Before joining the SEC, he was a manager at Hayden, Stone and Company. Kennedy left the company to trade his own account and made his fortune by manipulating the stock market. After becoming SEC chairman, he outlawed the manipulative tactics that made him rich.

  

  In 1981, President Ronald Reagan appointed John Shad chairman of the SEC. He was the first Wall Street executive to lead the SEC since Joseph Kennedy. Previously, he was vice chairman at E. F. Hutton & Company.

  

  John Shad was the father of stock buybacks. William Lazonick, a professor of economics at the University of Massachusetts, explained this pivotal moment in financial history,

  Shad, like the Chicago economists who influenced him, believed that a deregulated stock market was good for the economy. In November 1982 the very government agency that is supposed to regulate the stock market adopted Rule 10b-18, which instead encourages corporations to manipulate stock prices through open-market repurchases.

  Instead of reinvesting profits in their businesses, management uses stock buybacks to inflate their earnings per share so they can reap windfalls with their stock options. Rather than invest in real innovation, they choose to loot the company for their own benefit, underpay their workers, and deprive consumers of true value. Recently, buybacks even exceeded operating income, which means CEOs are pillaging reserves to pay themselves. This is pirate capitalism at its finest.

  We previously discussed how the stock market is disappearing in one giant leveraged buyout, but many readers were skeptical. How could the entire stock market disappear? Mathematically, it is possible, especially at the current rate of stock repurchases. In Economics 101, we are all taught that the stock market is a capital-fundraising mechanism for businesses. We assume this to be true, even in the absence of evidence. However, this hasn't been true since the SEC rigged the market in 1982.

  Lazonick explains,

  Since the mid-1980s, in aggregate, corporations have funded the stock market rather than vice versa (as is conventionally assumed). Over the decade 2005-2014 net equity issues of nonfinancial corporations averaged minus $399 billion per year.

  

  

  One glance at the S&P 500 Buyback Index shows how manipulated the market really is. The index contains 100 stocks in the S&P 500 that have the highest buyback ratios, which is buybacks divided by the market capitalization. The Buyback Index, which is accessible via ETF, trounced the S&P 500.

  

  Since 1982, the entire market has been nothing but one massive slow-motion leveraged buyout. This places the SEC right up there with the Federal Reserve in market manipulation credentials.

  Lazonick said buybacks are a disaster for the economy,

  Buybacks bear a considerable part of the responsibility for a damaged U.S. economy. This mode of resource allocation serves to concentrate income and wealth at the top of the distribution and comes at the expense of investment in the types of stable, remunerative career employment opportunities that support a broad-based middle class. When the most profitable corporations are in a downsize-and-distribute mode, sustainable prosperity in the U.S. economy becomes an impossible goal.

  As the market goes higher in the manipulated buyback frenzy, workers continue to be left in the dust.

  

  And you can always count on the manipulators to bail out at the last minute. After igniting a buyback-fueled bubble, John Shad left the SEC just four months before the 1987 stock market crash to become Ambassador to the Netherlands. Two years later, the Justice Department asked him to become chairman of Drexel Burnham Lambert. The revolving door is open for business.

  

  

  

  

  

• Bitcoin Soars By 10%: Does Someone Know Something?

  Despite the exuberance in US and European equity markets, it appears Bitcoin is sending a different (avoid the looming capital controls) message… Does someone know something?

   

  Bitcoin is soaring on heavy volume...

  

   

  This is the highest level in 4 months…

   

  Source: Bitcoinwisdom

  

  

  

  

  

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