Today’s News June 13, 2015

• Round 1 Goes to We the People

  Fast track authority for TPP – which would have assured the passage of a horrible treaty – was voted down today.

  But Obama, Ryan and the powers-that-be are forcing Round 2 on Tuesday.

  Conservatives and liberals BOTH hate the TPP. It's literally We The People versus the oligarchy.

  Keep the pressure on … TPP will pass unless we raise hell.

  

  
  
  

  

• The Biggest Crooks In America Are Now The Cops

  Submitted by Bill Bonner via Bonner & Partners,

  The TSA Is a Complete Waste of Time

  Today, we continue our series “The Good, the Bad and the Ugly.” As you’ll recall, our premise is that in a world where everyone is a lawbreaker, it’s hard to spot the real criminals.

  Below, we turn to the bad …

  Last week came a report proving that the TSA has been wasting our time and shamelessly bullying us all for years. There was always a surreal and even cruel quality to airport security checks.

  We recall how we stood in line, as the TSA agents forced a frail, old lady, well into her 90s, to get up from her wheelchair… painfully shuffle into the body scanner… stand with her hands over her head… and totter out the other side.

   

  

  An image from the curiously aptly named “Rapiscan” full body scanner employed by the TSA. University researchers set out to prove that the scanners are completely worthless – and prove it they did. What you can obviously not see above is that the man undergoing the scan is actually concealing a gun. In fact, one can get “anything” through these scanners undetected.

  Image credit: USENIX / Keaton Mowery, University of California

   

   

  She could barely stand… but the scan proved inconclusive. We looked on in disbelief as the TSA agent forced her to repeat the exercise. Did anyone believe the frail woman posed a threat to airline safety? The TSA agents? The people lined up, waiting to go through the same routine? Of course not…

  But no one objected – not even her son, your editor. We have all been trained to keep our mouths shut, even when we are subjected to senseless inconveniences and indignities. To what end?

  A study done by the TSA found travelers were easily able to smuggle mock weapons and fake explosives past the screeners. In 67 out of 70 cases, TSA agents missed the banned items and let the passenger go by. If they had been real terrorists, Washington might be a smoking ruin by now. Two questions arise: Why bother? And why haven’t there been more terrorist attacks?

   

  Scaring, Bullying, and Stealing

  The first is easily answered: The security checks could be stopped immediately with no appreciable loss in real safety. The second question is easily answered, too: There aren’t any terrorists. Or there are so few, it is not worth worrying about them.

  Yes, the Department of Homeland Security is just an excuse to scare people, boss them around, and take their money. Wait, you might say… If we send the TSA packing, terrorists may take it as a green light to go on the offense. But what difference would it make?

  Nine out of ten of them would glide through the checkpoints anyway. Also in the news is the Export-Import Bank. It helps American companies sell their products overseas by financing and subsidizing the purchases for foreign buyers.

  This costs U.S. taxpayers money – about $2 billion over the next 10 years. But it boosts the profits of the companies involved. It is nothing but legalized larceny. It takes money from some people against their will and gives it to others. Most favored is Boeing.

  A small group in Congress has been trying to get rid of the Export-Import Bank for decades. But it is an uphill battle. Naturally, the cronies want to keep this zombie institution alive. And the U.S. Chamber of Commerce – a nest of cronyism – has launched a $1-million campaign to save it.

  The Chamber of Commerce had an ad campaign a few years ago called “Save Free Enterprise.” But who wants to save free enterprise? Not the Chamber of Commerce – it wants to save free money, not free enterprise.

   

  A giant crony capitalist corporate welfare scam: the Import-Export Bank. See this nauseating example presented by Dan Mitchell of how this corrupt cronyism institution works.

  Image via missoulian.com

   

  When the Crooks Are the Cops

  Here’s another candidate for the “bad” category: DEA agents and local police deserve a good whack with a hard stick. Thanks to the Department of Justice’s “civil asset forfeiture” program, they’ve been helping themselves to other people’s money by pretending the money has done something wrong.

  Normally, a civil – as opposed to a criminal – procedure involves a dispute between two private citizens. But in the case of civil asset forfeiture, the dispute is between the cops and a thing – cash … gold … a house … or a nice new yacht – they suspect has been involved in a crime.

  No due process is needed. The owners of the disputed items are guilty until proven innocent. Often, of course, the supposedly “ill-gotten gains” are not ill-gotten at all – until the cops get their hands on them. All over the country – and in Canada, too – police are turning into crooks… taking money that doesn’t belong to them.

  In one recent instance, a young man called Joseph Rivers was taking the train from Detroit to California, hoping to start a new music video company. He took with him his life savings – $16,000, in cash.

  But the lucre was just too filthy for the DEA to resist. After boarding Rivers’ train at the Albuquerque Amtrak station, searching its passengers, and discovering the cash in his bag, they simply took it from him.

  The Washington Post covered the story:

  “The agents found nothing in Rivers’ belongings that indicated that he was involved with the drug trade: no drugs, no guns. They didn’t arrest him or charge him with a crime. But they took his cash anyway, every last cent, under the authority of the Justice Department’s civil asset forfeiture program.”

   

  

  Joseph Rivers had his life saving confiscated on a train, as far as we could ascertain mainly for the crime of being black and because the opportunity presented itself. That the people doing the confiscating work for something called “the department of justice” is more proof that we have well and truly arrived in Orwell’s dystopia.

  Photo credit: Mandel Ngan / AFP / Getty Images

   

  Guilty Until Proven Innocent

  Once the cops have seized your property, the burden of proof falls on you to get it back – even if the cops never charge you with a crime. “We don’t have to prove that the person is guilty,” an Albuquerque DEA agent told the Washington Post.

  In another case, a couple had $118,000 seized from their bank account. Their crime? None. They were merely the targets of money-hungry agents from the U.S. Secret Service because their small business required them to make many cash transactions.

  The agents took the money under the civil asset forfeiture rules, which empower government employees to take first and ask questions later. The couple spent years battling to get their money back. By the time the courts finally ordered the feds to hand back the cash, the couple had spent $25,000 on lawyers – money the feds refused to reimburse.

  Want more bad guys? The woods are full of them. How about the bums at the Federal Reserve? How about the entire “security” industry? How about the zombies on the government dole? How about the drug industry? Or take Congress… Please.

  Up next … the ugly. Stay tuned.

   

  

  Tom and Marla Bednar of North Carolina, small shop owners who had their money seized although they committed no crime. There are many heart-breaking stories of small business owners getting shafted by assorted government minions abusing civil forfeiture laws. These laws were originally introduced to better combat drug dealers, but have in the meantime mutated into grotesque shake-downs of law-abiding citizens.

  

  

  
  
  

  

• You're Fired – Now Train Your Much Cheaper Foreign Replacement

  Submitted by Michael Snyder via The Economic Collapse blog,

  If you were laid off from your job, would you be willing to train your replacement if your company threatened to take away your severance pay if you didn’t do it?  And how would you feel if your replacement came from India, and the only reason your company was replacing you was because the foreign worker was a lot less expensive? 

  Sadly, this is happening all over America – especially in the information technology field.  Huge corporations such as Disney and Southern California Edison are coldly firing existing tech workers and filling those jobs with much cheaper foreign replacements.  They are doing this by blatantly abusing the H-1B temporary worker visa program.  Workers that had been doing a solid job for decades are being replaced without any hesitation just because it will save those firms a little bit of money. 

  There is very, very little loyalty left in corporate America today.  Even if you have poured your heart and your soul into your company for years, that ultimately means very little.  The moment that your usefulness is over, most firms will replace you in a heartbeat these days.

  When I learned that Disney was doing this, I was absolutely outraged.  Talk about a company that is going down the toilet.  The following comes from the New York Times…

  While families rode the Seven Dwarfs Mine Train and searched for Nemo on clamobiles in the theme parks, these workers monitored computers in industrial buildings nearby, making sure millions of Walt Disney World ticket sales, store purchases and hotel reservations went through without a hitch. Some were performing so well that they thought they had been called in for bonuses.

   

  Instead, about 250 Disney employees were told in late October that they would be laid off. Many of their jobs were transferred to immigrants on temporary visas for highly skilled technical workers, who were brought in by an outsourcing firm based in India. Over the next three months, some Disney employees were required to train their replacements to do the jobs they had lost.

   

  “I just couldn’t believe they could fly people in to sit at our desks and take over our jobs exactly,” said one former worker, an American in his 40s who remains unemployed since his last day at Disney on Jan. 30. “It was so humiliating to train somebody else to take over your job. I still can’t grasp it.”

  Honestly, I don’t think that I could do it.

  I don’t think that I could train my much cheaper foreign replacement.

  But if you are the average American that is just barely scraping by from paycheck to paycheck, I guess complete and total humiliation is better than losing your home to foreclosure.

  Out on the west coast, Southern California Edison did the exact same thing that Disney did.  The following is an excerpt from a Fox News report…

  Anonymous workers who were displaced by the visa holders also submitted written testimonials to lawmakers detailing their firings. Several claimed they were forced to train their replacements, and threatened with losing their severance if they did not.

   

  “We had no choice in this,” one anonymous worker who claimed to have been one of those let go from Southern California Edison, said in a letter. The worker described how when the two vendors were picked – Infosys and TCS, both major Indian companies – SCE employees were told to “sit with, video chat or do whatever was needed to teach them our systems.”

   

  If they did not cooperate, according to the testimonial, “we would be fired and not receive a severance package.”

  That is wrong on so many levels.  But this is what corporate America has become today – a cold, heartless place that has absolutely no empathy for the average worker.

  These workers at Southern California Edison were even told that the firm “could replace one of us with three, four, or five Indian personnel” and still save money on the deal…

  “They told us they could replace one of us with three, four, or five Indian personnel and still save money,” one laid-off Edison worker told me, recounting a group meeting with supervisors last year. “They said, ‘We can get four Indian guys for cheaper than the price of you.’ You could hear a pin drop in the room.”

  The original intent of the H-1B temporary worker visa program was to allow U.S. companies to import foreign workers to do jobs that they were unable to fill with American workers.

  But that is not what is happening.

  Instead, the H-1B temporary worker visa program is being used to replace thousands upon thousands of well paid American workers.

  It is a disgusting practice and it needs to stop.  There has been so much outrage over this that it has even gotten the attention of the U.S. Senate.  The following is from a letter that a bipartisan group of U.S. Senators sent to the Attorney General…

  A number of U.S. employers, including some large, well-known, publicly-traded corporations, have reportedly laid off thousands of American workers and replaced them with H-1B visa holders.  To add insult to injury, many of the replaced American employees report that they have been forced to train the foreign workers who are taking their jobs. This troubling practice seems to be particularly concentrated in the information technology (IT) sector, which is not surprising given that sixty five percent of H-1B petitions approved in FY 2014 were for workers in computer-related occupations.  Though such reports of H-1B-driven layoffs have been circulating for years, their frequency seems to have increased dramatically in the past year alone.

  So has anything been done about this?

  Of course not.

  Instead, Barack Obama is working on an extremely secretive global economic treaty which will reportedly allow far more foreign workers to come into this country and which will result in millions more good paying jobs being shipped overseas.  It is called “The Trans-Pacific Partnership”, and it is basically NAFTA on steroids.

  Why is it that Barack Obama has to be on the wrong side of every single issue?

  The U.S. middle class is being systematically ripped to shreds, and most Americans are showing very little alarm about this.

  How much damage has to be done before people will finally start waking up?

  

  

  
  
  

  

• Geopolitical Risks Are Climbing: Interstate Conflict Is Highest Risk In 2015

  Every year, the World Economic Forum publishes an annual report on global risks that covers the factors and underlying drivers that could most likely disrupt global economic activity. Most of the time over the last decade, the survey of 900 global experts finds the top risks to revolve between potential economic events such as collapsing asset prices and underemployment, or potential environmental challenges such as flooding or water supply crises.

  

  However, this year geopolitical risks have made a staggering jump to the forefront, reflecting the instability in the Middle East and North Africa, the ongoing conflict in Ukraine, the rise of terrorist groups such as ISIS and Boko Haram, and even tension in the South China Sea.

  

   

  The above graph shows the change over the course of the last year. Risks such as state collapse or crisis, interstate conflict, terrorist attacks, and weapons of mass destruction have all soared. In fact, within the overall scope of all potential risks, interstate conflict is now ranked as the #1 risk in terms of likelihood, and #4 in terms of impact.

  “Twenty-five years after the fall of the Berlin Wall, the world again faces the risk of major conflict between states,” said Margareta Drzeniek-Hanouz, lead economist at the World Economic Forum.

  

   

  “However, today the means to wage such conflict, whether through cyberattack, competition for resources or sanctions and other economic tools, is broader than ever. Addressing all these possible triggers and seeking to return the world to a path of partnership, rather than competition, should be a priority for leaders as we enter 2015.”

   

  Source: VisualCapitalist.com

  

  
  
  

  

• American Dreaming – From G1 To Bilderberg

  Submitted by Pepe Escobar,

  What’s the connection between the G7 summit in Germany, President Putin’s visit to Italy, the Bilderberg club meeting in Austria, and the TTIP – the US-EU free trade deal – negotiations in Washington?

  We start at the G7 in the Bavarian Alps – rather G1 with an added bunch of “junior partners” – as US President Barack Obama gloated about his neo-con induced feat; regiment the EU to soon extend sanctions on Russia even as the austerity-ravaged EU is arguably hurting even more than Russia.

  Predictably, German Chancellor Angela Merkel and French President Francois Hollande caved in – even after being forced by realpolitik to talk to Russia and jointly carve the Minsk-2 agreement.

  The hypocrisy-meter in the Bavarian Alps had already exploded with a bang right at the pre-dinner speech by EU Council President Donald Tusk, former Prime Minister of Poland and certified Russophobe/warmonger: “All of us would have preferred to have Russia round the G7 table. But our group is not only a group (that shares) political or economic interests, but first of all this is a community of values. And that is why Russia is not among us.”

  So this was all about civilized “values” against “Russian aggression.”

  The “civilized” G1 + junior partners could not possibly argue whether they would collectively risk a nuclear war on European soil over a Kiev-installed ‘Banderastan’, sorry, “Russian aggression.”

  Instead, the real fun was happening behind the scenes. Washington factions were blaming Germany for making the West lose Russia to China, while adult minds in the EU – away from the Bavarian Alps – blamed Washington.

  Even juicier is a contrarian view circulating among powerful Masters of the Universe in the US corporate world, not politics. They fear that in the next two to three years France will eventually re-ally with Russia (plenty of historical precedents). And they – once again – identify Germany as the key problem, as in Berlin forcing Washington to get involved in a Prussian ‘Mitteleuropa’ Americans fought two wars to prevent.

   

  As for the Russians – from President Putin and Foreign Minister Lavrov downwards – a consensus has emerged; it’s pointless to discuss anything substantial considering the pitiful intellectual pedigree – or downright neo-con stupidity – of the self-described “Don’t Do Stupid Stuff” Obama administration policy makers and advisers. As for the “junior partners” – mostly EU minions – they are irrelevant, mere Washington vassals.

  It would be wishful thinking to expect the civilized “values” gang to propose alternatives for the overwhelming majority of citizens of G7 nations getting anything other than Mac-jobs, or barely surviving as hostages of finance-junkie turbo-capitalism which only benefits the one percent.Rather easier to designate the proverbial scapegoat – Russia – and proceed with NATO-infused fear/warmongering rhetoric.

  Iron Lady Merkel also found time to pontificate on climate change – instilling all and sundry to invest in a “low-carbon global economy.” Few noticed that the alleged deadline for full “decarbonization” was set for the end of the 21st century, when this planet will be in deep, deep trouble.

  

   

  Achtung! Bilderberg!

  Obama’s neocon-induced newspeak continues to rule that Russia dreams of recreating the Soviet empire. Now compare it to what President Putin is telling Europe.

  Last week, Putin found time to give an interview to the Milan-based Corriere della Sera at 2 am; the interview was published as the Bavarian Alps show went on, and ahead of Putin’s June 10 visit to Italy. Russia’s geopolitical interests and US- Russia relations are depicted in excruciating detail.

  So Putin was a persona non grata at the G1 plus junior partners? Well, in Italy he visited the Milan Expo; met Prime Minister Renzi and Pope Francis; reminded everyone about the “privileged economic and political ties” between Italy and Russia; and stressed the 400 Italian companies active in Russia and the million Russian tourists who visit Italy every year.

  Crucially, he also evoked that consensus; Russia had represented an alternative view as a member of the G8, but now “other powers” felt they no longer needed it. The bottom line: it’s impossible to have an adult conversation with Obama and friends.

  And right on cue, from Berlin –where he was displaying his sterling foreign policy credentials, Jeb Bush, brother of destroyer of Iraq Dubya Bush, fully scripted by his neocon advisers, declared Putin a bully and rallied Europe to fight, what else, “Russian aggression.”

  The rhetorical haze over what was really discussed in the Bavarian Alps only began to dissipate at the first chords of the real sound of music; the Bilderberg Group meeting starting this Thursday at the Interalpen-Hotel Tyrol in Austria, only three days after the G1 plus junior partners.

  Possible conspiracies aside, Bilderberg may be defined as an ultra-select bunch of elite lobbyists – politicians, US corporate honchos, EU officials, captains of industry, heads of intelligence agencies, European royals – organized annually in a sort of informal think tank/policy-forming format, to advance globalization and all crucial matters related to the overall Atlanticist agenda. Call it the prime Atlanticist Masters of the Universe talkfest.

  To make things clear – not that they are big fans of transparency – the composition of the steering committee is here. And this is what they will be discussing in Austria.

  Naturally they will be talking about “Russian aggression” (as in who cares about failed Ukraine; what we need is to prevent Russia from doing business with Europe).

  Naturally they will be talking about Syria (as in the partition of the country, with the Caliphate already a fact of post-Sykes-Picot life).

  Naturally they will be talking about Iran (as in let’s do business, buy their energy and bribe them into joining our club).

  But the real deal is really the Transatlantic Trade and Investment Partnership (TTIP) – the alleged “free trade” deal between the US and the EU. Virtually all major business/finance lobbyists for the TTIP will be under the same Austrian roof.

  And not by accident Bilderberg starts one day before “fast track” presidential authority is to be debated at the US Congress.

  

   

  WikiLeaks and a ton of BRICS

  Enter WikiLeaks, with what in a fairer world would be a crucial spanner in the works.

  The fast track authority would extend US presidential powers for no less than six years; that includes the next White House tenant, which might well be ‘The Hillarator’ or Jeb “Putin is a bully” Bush.

  This presidential authority to negotiate dodgy deals includes not only the TTIP but also the Trans-Pacific Partnership (TPP) and the Trade in Services Agreement (TiSA).

  WikiLeaks, just in time, published the Healthcare Annex to the secret draft “Transparency” chapter of the TPP, along with each country’s negotiating position. No wonder this draft is secret. And there’s nothing “transparent” about it; it’s an undisguised hold-up of national healthcare authorities by Big Pharma.

  The bottom line is that these three mega-deals – TTP, TTIP and TiSA – are the ultimate template of what could be politely described as global corporate governance, a Bilderberg wet dream. The losers: nation-states, and the very concept of Western democracy. The winners: mega-corporations.

  Julian Assange, in a statement, succinctly nailed it “It is a mistake to think of the TPP as a single treaty. In reality there are three conjoined mega-agreements, the TiSA, the TPP and the TTIP, all of which strategically assemble into a grand unified treaty, partitioning the world into the West versus the rest. This 'Great Treaty' is described by the Pentagon as the economic core to the US military's 'Asia Pivot.' The architects are aiming no lower than the arc of history. The Great Treaty is taking shape in complete secrecy, because along with its undebated geostrategic ambitions it locks into place an aggressive new form of transnational corporatism for which there is little public support."

   

  So this is the real Atlanticist agenda – the final touches being applied in the arc spanning the G1 + added junior partners to Bilderberg (expect a lot of crucial phone calls from Austria to Washington this Friday). NATO on trade. Pivoting to Asia excluding Russia and China. The West vs. the rest.

  Now for the counterpunch. As the show in the Bavarian Alps unrolled, the first BRICS Parliamentarian Forum was taking place in Moscow – ahead of the BRICS summit in Ufa next month.

  Neocons – with Obama in tow – knock themselves out dreaming that Russia has become “isolated” from the rest of the world because of their sanctions. Since then Moscow has signed major economic/strategic contracts with at least twenty nations. Next month, Russia will host the BRICS summit – 45 percent of the world’s population, a GDP equivalent to the EU, and soon bigger than the current G7 – as well as the Shanghai Cooperation Organization (SCO) summit, when India and Pakistan, currently observers, will be accepted as full members.

  G1 plus junior partners? Bilderberg? Get a job; you’re not the only show in town, any town.

   

   

  

  

  
  
  

  

• How Companies Mask Runaway Inflation

  Do you feel like you’re running out of pepper more often these days?

  Or maybe you recently realized that no, you are not in fact sweating more, the deodorant sticks you’ve been buying for years have simply gotten smaller lately.

  Or worst of all, have you noticed that Slim Jims have gotten shorter? 

  If any of the above applies, rest assured it is not your imagination, it is simply a symptom of corporate America attempting to hide runaway inflation — you know, that runaway inflation which the Fed has certainly not created by running the printing presses at full tilt for five years.  

  Known as “weight out” in the corporate world and “slack fill” in litigation, it’s a simple strategy that’s been readily apparent in bags of potato chips for years and although it can, in some instances, get companies sued, that’s nonetheless preferable to eating the cost of higher input prices.

  WSJ has more:

  When spice maker McCormick & Co. started shipping 25% less pepper earlier this year in the same packaging at about the same price, it was engaging in an age-old means of getting frugal consumers to pay more for less.

   

  

   

  Consumer-products makers have used similar tactics as a way of pushing through effective price increases for everything from laundry detergent and tissues to yogurt and candy bars. In the food industry, it’s called “weight-out,” or putting less cereal or potato chips into a package. In toilet paper, the term is “de-sheeting,” when the number of tissues in a box or sheets on a toilet-paper roll are reduced.

   

  The regulatory term of art for putting less in a package than meets the eye is “nonfunctional slack fill.” That probably isn’t the term that came to mind for anyone who’s ever opened a bag of chips to find barely a handful inside. But with companies squeezed between thrifty shoppers and—in some cases—rising costs, it’s one that could become more familiar.

   

  Earlier this year, McCormick reduced the amount of pepper in its signature red-and-white aluminum tins. What once had eight ounces of pepper now has six. A medium container with four ounces has only three, and a two-ounce tin contains 1.5 ounces. The revised volumes were marked in the “net quantity of contents” label as mandated by federal regulation on the front of the tins.

   

  Chief Executive Alan Wilson said in January that pepper costs had risen sharply over the past five years and that the company had little room to raise prices any further..

   

  But too much extra room can get a manufacturer into trouble.

   

  ConAgra Foods Inc.’s Slim Jim was the target of a purported class-action suit filed in February for violating slack-fill rules. Procter & Gamble Co.’s Old Spice and UnileverPLC’s Axe deodorants faced similar complaints in suits filed in September. 

   

  

  (How much deodorant is actually in that stick? Image courtesy of WSJ and Predator)

   

  Companies have wide leeway to add more empty space in packaging. Some states, like California, allow for even more “safe harbors” that manufacturers can use to justify bigger packaging, according to Angel Garganta, an attorney at Venable LLP that specializes in false advertising and consumer-protection law.

  One way companies deflect blame (if not criticism) is by simply disclosing the actual new weight of the product on the side of containers.

  One common-sense safeguard to deflect accusations of deception is to print the correct amount of product on the outside, legal experts say. “Consumers are mistaken, but the critical thing is that they in fact told the truth, said Thomas J. Maronick, a marketing professor at Towson University and former Federal Trade Commission official.

  Of course nobody reads the side of their pepper tins, and unless anyone believes consumers are able to feel the difference between eight ounces of ground pepper and six ounces of ground pepper, these types of “weight out” strategies can be executed with very little in the way of pushback from consumers and even if, as is the case for McCormick, competitors decide to litigate, the gains that accrue from employing “slack fill” could easily outstrip the penalties:

  Slack-fill violations can result in penalties. Last year, CVS Health Corp. agreed to pay a $225,000 fine in California for excessive packaging of nearly a dozen products under its own brand like Accelerated Wrinkle Repair Moisturizer and Frizz-Defy Hair Serum.

  We’ll close with what we said earlier today as it seems particularly appropriate here:

  While the Fed may continue to claim inflation is non-existent, except for those “few” Americans who can’t afford a house and thus have to rent (incidentally, in New York the average rent just hit a record), inflation is all too present for those other Americans who still enjoy occasionally eating beef as opposed to its sawdust-inspired substitute found in various fast-food venues across the US.

   

  
  

  

  

  
  
  

  

• Why Do We Celebrate Rising Home Prices?

  Submitted by Ryan McMaken via The Mises Institute,

  In recent years, home price indices have seemed to proliferate. Case-Shiller, of course, has been around for a long time, but over the past decade, additional measures have been marketed aggressively by Trulia, CoreLogic, and Zillow, just to name a few.

  Measuring home prices has taken on an urgency beyond the real estate industry because for many, home price growth has become something of an indicator of the economy as a whole. If home prices are going up, it is assumed, “the economy” must be doing well. Indeed, we are encouraged to relax when home prices are increasing or holding steady, and we’re supposed to become concerned if home prices are going down.

  This is a rather odd way of looking at the price of a basic necessity. If the price of food were going upward at the rate of 7 or 8 percent each year (as has been the case with houses in many markets in recent years) would we all be patting ourselves on the back and telling ourselves how wonderful economic conditions are? Or would we be rightly concerned if incomes were not also going up at a similar rate? Would we do the same with shoes and clothing? How about with education?

  With housing, though, increases in prices are to be lauded, we are told, even if they outpace wage growth.

  We’re Told to Want High Home Prices

  But in today’s economy, if home prices are outpacing wage growth, then housing is becoming less affordable. This is grudgingly admitted even by the supporters of ginning up home prices, but the affordability of housing takes a back seat to the insistence that home prices be preserved at all costs.

  Behind all of this is the philosophy that even if the home-price/household-income relationship gets out of whack, most problems will nevertheless be solved if we can just get people into a house. Once someone becomes a homeowner, the theory goes, he’ll be sitting on a huge asset that (almost) always goes up in price, meaning that any homeowner will increase in net worth as the equity in his home increases.

  Then, the homeowner can use that equity to buy furniture, appliances, and a host of other consumer goods. With all that consumer spending, the economy takes off and we all win. Rising home prices are just a bump in the road, we are told, because if we can just get everyone into a home, the overall benefit to the economy will be immense.

  Making Homes Affordable with More Cheap Debt

  Not surprisingly, we find a sort of crude Keynesianism behind this philosophy. In this way of thinking, the point of homeownership is not to have shelter, but to acquire something that will encourage more consumer spending. In other words, the purpose of homeownership is to increase aggregate demand. The fact that you can live in the house is just a fringe benefit. This macro-obsession is part of the reason why the government has pushed homeownership so aggressively in recent decades.

  The fly in the ointment, of course, is if home prices keep going up faster than wages — ceteris paribus — fewer people will be able to save enough money to come up with either the full amount or even a sizable down payment on a loan.

  Not to worry, the experts tell us. We’ll just make it easier, with the help of inflationary fiat money, to get an enormous loan that will allow you to buy a house. Thus, rock-bottom interest rates and low down payments have been the name of the game since the late 1980s.

  We started to see the end game at work during the last housing bubble when Fannie Mae introduced the 40-year mortgage in 2005, which just emphasized that when it comes to being a homeowner, the idea is not to pay off the mortgage, but to “buy” a house and just pay the monthly payment until one moves to another house and gets a new thirty- or forty-year loan.

  It Pays To Be in Debt

  On the surface of it, it’s hard to see how this scenario is fundamentally different from just paying rent every month. If the homeowner stops paying the monthly payment, he’s out on the street, and the bank keeps the house, which is very similar to the scenario in which a renter stops paying a landlord. There’s (at least) one big difference here, however. It makes sense for the homeowner to get a home loan rather than rent an apartment because — if it’s a fixed-rate loan — price inflation ensures the real monthly payment will go down every month. Residential rents, on the other hand, tend to keep up with inflation.

  But why would any lending institution make these sorts of long-term loans if the payment in real terms keeps getting smaller? After all, thirty years is a long time for something to go wrong.

  Lenders are willing and able to do this because the loans are subsidized and underwritten through government creations like Fannie Mae (which buys up these loans on the secondary market), through bailouts, and through a myriad of other federal programs such as FHA. Naturally, in an unhampered market, a loan of such a long term would require high interest rates to cover the risk. But, Congress and the Fed have come to the rescue with promises of bailouts and easy money, meaning cheap thirty-year loans continue to live on.

  So, what we end up with is a complex system of subsidies and favoritism on the part of lenders, homeowners, government agencies, and the Fed. The price of homes keeps going up, increasing the net worth of homeowners, and banks can make long-term loans on fairly risky terms because they know bailouts of various sorts will come if things go wrong.

  But problems begin to arise when increases in home prices begin to outpace access to easy money and cheap loans. Indeed, we’re now seeing that homeownership rates are going down in spite of low interest rates, and vacancy rates in rental housing are at a twenty-year low. Meanwhile, new production in housing units is at 1992 levels, offering little relief from rising prices and rents. Obviously, something isn’t going according to plan.

  Who Loses?

  The old debt-based tricks that once kept homeownership climbing and accessible in the face of rising home prices are no longer working.

  From a free market’s perspective, renting a home is neither good nor bad, but American policymakers long ago decided to favor homeowners over renters. Consequently, we’re faced with an economic system that pushes renters toward homeownership — price inflation and the tax code punishes renters more than owners — while simultaneously pushing home prices higher and higher.

  During the last housing bubble, however, as homeownership levels climbed, few noticed or cared about this. So many renters became homeowners that rental vacancies climbed to record highs from 2004 to 2009. But in our current economy, one cannot avoid rising rents or hedge against inflation by easily leaving rental housing behind.

  This time around, the cost of purchasing housing is going up by 6 to 10 percent per year, but few renters can join the ranks of the homeowners to enjoy the windfall. Instead, they just face record-high rent increases and a record-low inventory in for-sale houses.

  There once was a time when rising home prices and rising homeownership rates could happen at the same time; it was possible for the government to stick to its unofficial policy of propping up home prices while also claiming to be pushing homeownership. We no longer live in such a time.

  

  

  
  
  

  

• Food Banks In New York Are Running Out Of Food

  Welcome to the Recovery! Food banks across the US state of New York are running out of food (37% of food pantries say they have had to turn away needy people because they ran out of food), amid falling funds and rising demand from people that have trouble affording food. About 2.6 million people have trouble affording food across New York with about 1.4 million New York City residents relying on food pantries to feed themselves, according to the Food Bank For New York City. But as PressTV reports, contrary to the belief that people visiting food pantries are homeless and jobless, most customers are employed, but are not paid enough money to put food on the table without help.

  Michael Berg, the director of an organization that runs three food pantries in New York, told The Associated Press that demand for food there has risen by about 20 percent each year for the last few years.

   

  

   

  Food banks across the US have seen increased demand from hungry Americans since 2013, ever since Congress cut funding for the Supplemental Nutrition Assistance Program, formerly known as the food stamp program, by an average of $18 per person a month.

   

  About 40 percent of those receiving food stamp benefits then turned to emergency food services, leading to an increase in demand, according to The New York Times.

   

  Despite the state doing “relatively well” at feeding its hungry compared to the rest of the country, New Yorkers now miss about 100 million meals each year, and 37 percent of food pantries say they have had to turn away needy people because they ran out of food, The Times reported.

  As Joshua Krause via The Daily Sheeple notes,

  Despite the media’s claims that we’re no longer in a recession, millions of Americans are still struggling to make ends meet. It seems that America has developed a permanent underclass of citizens that just can’t quite rise above their poverty. No matter how high home prices rise or how far the stock market soars, the profits never seem to trickle down to this segment of society.

   

  If you’re looking for proof that this permanent underclass exists, look no further than the massive number of people who still rely on food stamps and food pantries to survive. In fact, their ranks may be growing, which is starting to cause some food pantries to run out of resources on a regular basis. In New York City, 1.4 million residents eat at food pantries (out of a total population of 8.5 million), a number which is currently growing 20% every year.

   

  The largest influx of food bank users occurred in 2013, when Congress cut the Supplemental Nutrition Assistance Program by $18 per person. Since that time, 40% of food stamp users have had to turn to food banks to sustain themselves, and 37% of food banks in New York City have admitted that they have turned away hungry residents in recent years, after running out of food.

  *  *  *

  

  Welcome to the Oligarch Recovery Serfs!

  

  

  
  
  

  

• 7 Key Events That Are Going To Happen By The End Of September

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

  Is something really big about to happen?  For months, people have been pointing to the second half of this year for various reasons.  For some, the major concern is Jade Helm and the unprecedented movement of military vehicles and equipment that we have been witnessing all over the nation.  For others, the upcoming fourth blood moon and the end of the Shemitah cycle are extremely significant events.  Yet others are most concerned about political developments in Washington D.C. and at the United Nations. 

  To me, it does seem rather remarkable that we are seeing such a confluence of economic, political and spiritual events coming together during the second half of 2015.  So is all of this leading up to something?  Is our world about to change in a fundamental way?  Only time will tell.  The following are 7 key events that are going to happen by the end of September…

  Late June/Early July – It is expected that this is when the U.S. Supreme Court will reveal their gay marriage decision.  Most believe that the court will rule that gay marriage is a constitutional right in all 50 states.  There are some that believe that this will be a major turning point for our nation.

  July 15th to September 15th – A “realistic military training exercise” known as “Jade Helm” will be conducted by the U.S. Army.  More than 1,000 members of the U.S. military will take part in this exercise.  The list of states slated to be involved in these drills includes Texas, Colorado, New Mexico, Arizona, Nevada, Utah, California, Mississippi and Florida.

  July 28th – On May 28th, Reuters reported that countries in the European Union were being given a two month deadline to enact “bail-in” legislation.  Any nation that does not have “bail-in” legislation in place by that time will face legal action from the European Commission.  So why is the European Union in such a rush to get this done?  Are the top dogs in the EU anticipating that another great financial crisis is about to erupt?

  September 13th – This is Elul 29 on the Biblical calendar – the last day of the Shemitah year.  Many are concerned about this date because we have seen giant stock market crashes on the last day of the previous two Shemitah cycles.

  On September 17th, 2001 (which was Elul 29 on the Biblical calendar), we witnessed the greatest one day stock market crash in U.S. history up until that time.  The Dow plummeted 684 points, and it was a record that held for exactly seven years until the end of the next Shemitah cycle.

  On September 29th, 2008 (which was also Elul 29 on the Biblical calendar), the Dow fell by an astounding 777 points, which still today remains the greatest one day stock market crash of all time.

  Now we are approaching the end of another Shemitah year.  So will the stock market crash on September 13th, 2015?  Well, no, because that day is a Sunday.  So I guarantee that the stock market will not crash on that particular day.  But as Jonathan Cahn has pointed out in his book on the Shemitah, sometimes stock market crashes happen just before the end of the Shemitah year and sometimes they happen within just a few weeks after the end of the Shemitah.  So we are not just looking at one particular date.

  September 15th – The 70th session of the UN General Assembly begins on this date.  It is being reported that France plans to introduce a resolution which would give formal UN Security Council recognition to a Palestinian state.  Up until now, the United States has always been the one blocking such a resolution, but Barack Obama is indicating that things may be much different this time around.

  September 25th to September 27th – The United Nations is going to launch a brand new sustainable development agenda for the entire planet.  Some have called this “Agenda 21 on steroids”.  But this new agenda is not just about the environment.  It also includes provisions regarding economics, agriculture, education and gender equality.  On September 25th, the Pope will travel to New York to give a major speech kicking off the UN conference where this new agenda will be unveiled.

  September 28th – This is the date for the last of the four blood moons that fall on Biblical festival dates during 2014 and 2015.  This blood moon falls on the very first day of the Feast of Tabernacles, it will be a “supermoon”, and it will actually be visible in the city of Jerusalem.  There are many that dismiss the blood moon phenomenon, but we have seen similar patterns before.  For example, a similar pattern of eclipses happened just before and just after the destruction of the Jewish temple by the Romans in 70 AD.

  Perhaps none of this alarms you.  But when you add everything above to the fact that the elite definitely appear to be feverishly preparing for something, a very alarming picture emerges.

  For example, due to fears that a “natural disaster” could interrupt their operations in New York, the New York Fed has been working hard to build up a satellite office in Chicago.

  What kind of “natural disaster” could possibly be so bad that it would cause the entire New York Fed to shut down?

  And NORAD has decided to move back into the base deep inside Cheyenne Mountain after all these years.  The threat of an electromagnetic pulse was the reason given for this decision.

  By themselves, perhaps those moves would not be that big of a deal.  But let’s add all of the weird movements of military vehicles and equipment that we have been witnessing lately to this discussion.  I included this list from Intellihub in a previous article, but I believe that it bears repeating…

  • On March 13th, Intellihub founder Shepard Ambellas detailed photos and documentation of nearly 40 U.S. Army soldiers, wielding training rifles and dressed in full combat gear, participating in an urban warfare style training drill just outside the Texarkana Regional Airport perimeter.
  • In the middle of April, a report out of Big Springs, Texas revealed that a train full of military equipment and over a dozen helicopters had arrived in the town ahead of Jade Helm 2015.
  • Photographs taken in Corona, California a few days later added to the Jade Helm speculation after they showed a MRAP full of what looked to be U.S. Marines driving down the 1-15 freeway. “In broad daylight with not a care in the world”
  • On April 24th a shocking report on Intellihub News detailed armed troops seen confronting angry protesters in a “professional news package”of riot control training released by the military
  • “A massive buildup, a lot of movement and its undeniable at this point,” read the headline on April 25th after a convoy was seen in Oroville, California that stretched as far as the eye could see.
  • Moving into May, photographs taken in Indiana showed a massive military convoy heading down the freeway. The photos, taken by a concerned citizen, show the convoy heading west on I-70 for reasons unknown.
  • Two days later, video footage, this time out of Texarkana, Arkansas, highlighted a convoy of Humvees driving down the highway as well as a trainload of military vehicles that was seen shortly after.
  • In mid May, Intellihub reporter Alex Thomas published a detailed report that confirmed that the military was indeed training to take on the American people, this time in the form of domestic house to house raids.
  • The next day a new report, also by Alex Thomas, proved that Marines were actually practicing for the internment of American citizens.
  • On May 18th, a train full of hundreds of military Humvees was spotted, further revealing the increased military buildup across the country leading into Jade Helm 2015. The train was heading towards Cleveland for unknown reasons although a possible connection to planned upcoming protests had been mentioned.
  • This past week a massive military war game simulation called Raider Focus was announced. The war game will include the largest military convoy seen on the roads of Colorado since World War II.
  • On may 23th, Intellihub News reported on pictures sent to ANP that show a 1/4 mile long military train convoy near the Colorado Wyoming border.
  • Finally, a report published this week detailed a stunning propaganda move by the military involving a New Jersey school and the worship of the military on the streets of America. “As parents, teachers, and students looked on with joy, Marines from the Special-Purpose Marine Air Ground Task Force landed helicopters on the baseball diamond of a New Jersey school.”

  What does all of this mean?

  It is hard to say.  We have imperfect information, so it is difficult to come up with perfect conclusions.

  But what I will say is that I believe that the second half of 2015 is going to be extremely significant.  I believe that events are about to start accelerating greatly, and I believe that life in America is about to change dramatically.

  

  

  
  
  

  

• The Question Is Not Is Deutsche Bank the Next Lehman, It's "Is Lehman the Face of Banking in the Future

  So,Tyler just ran an interesting piece titled “Is Deutsche Bank The Next Lehman?” There is one correction that needs to be made where Tyler says “Probably the first public indication that things were heading downhill for Lehman wasn’t until June 9th, 2008,  when Fitch Ratings cut Lehman’s rating to AA-minus, outlook negative“. Well, I gave ample warning about Lehman (and Bear Stearns) way before that – to wit:

  The warning of Lehman Brothers before anyone had a clue!!! (February through May 2008): Is Lehman really a lemming in disguise? Thursday, February 21st, 2008 | Web chatter on Lehman Brothers Sunday, March 16th, 2008 (It would appear that Lehman’s hedges are paying off for them. The have the most CMBS and RMBS as a percent of tangible equity on the street following BSC. The question is, “Can they monetize those hedges?”. I’m curious to see how the options on Lehman will be priced tomorrow. I really don’t have enough. Goes to show you how stingy I am. I bought them before Lehman was on anybody’s radar and I was still to cheap to gorge. Now, all of the alarms have sounded and I’ll have to pay up to participate or go in short. There is too much attention focused on Lehman right now.) | I just got this email on Lehman from my clearing desk Monday, March 17th, 2008 by Reggie Middleton | Lehman stock, rumors and anti-rumors that support the rumors Friday, March 28th, 2008 | It appears that I should have dug deeper into Lehman! May 2008

  The concerns regarding Deustche are quite possiblywell founded, and like Lehman, I doubt very seriously if DB is in the shit can by itself. Reference my article “EU Area Residents’ Step-by-Step Guide to Escaping the Upcoming Bank Bail-ins & Capital Controls“:

  The Impossible Trinity or “The Trilemma”, in which three policy positions are possible. If a nation were to adopt positiona, for example, then it would maintain a fixed exchange rate and allow free capital flows, the consequence of which would be loss of monetary sovereignty.

  

  Put plainly, either balance sheets get burned trying to buy and sell currencies, capital controls are implemented, or QE (sovereign monetary policy) fails. Trying all three simultaneously has NEVER, EVER worked! Of course, according to the ECB, it’s different this time…

   

  Guess what? Balance sheets are burned.

  Realize why the ECB is doing this QE thing to the level that it is. Their banks are still in trouble, material trouble. Reference “Ovebanked, Underfunded, and Overly Optimistic: The New Face of Sovereign Europe” from 5 years ago and tell me if you think its gotten better (Hint: pay very close attention to the countries these banks are domiciled in, capital controls data soon to follow several paragraphs below)…

  Sovereign Risk Alpha: The Banks Are Bigger Than Many of the Sovereigns

  

   Well, it’s all relative. The banks are smaller, leverage is down – and that’s after 6 years of global QE, ZIRP and now NIRP, yet each and every bank is STILL big enough to collapse the country that it’s domicled in…

   

  With this in mind, let’s review the The Anatomy of a European Bank Run!

  Below is a chart excerpted from our work showing the asset/liability funding mismatch of a French bank. The actual name of the bank is not at issue here. What is at issue is what situation this bank has found itself in and why it is in said situation. Both Lehman and Bear Stearns collapsed from the EXACT SAME PROBLEM! That problem is asset/Liabitlity mismatch.

  

  What many bank depositors who believe their bank deposits are actually cash don’t realize is that they are creditors to the bank – short term lenders. You bank accounts, time deposit accounts, CDs, checking and savings accounts are short term, UNSECURED loans to bank that uses said loans to engaged in significantly and materially more risky endeavors to generate profits. What sort of endeavors, you may ask? Well, as was the case with many French, Cypriot, Italian, Spanish and German banks, making real estate, corporate and government loans of a longer term to profligate nations such as Greece, for one. It’s good work of you an get it. Borrow from mom and pop savers at 25 basis points and lend to Greece at 23%. Good money, dude!

  

  That is, until it becomes apparent that the money you lent Greece isn’t going to come back.

  

  Even that, in and of itself is not a problem since the fractional reserve banking system doesn’t really require you to have the money that you borrowed from mom and pop on hand to pay them all back. It works, until it doesn’t. When mom and pop figure out what you’ve done with their money by reading and article such as this, that’s when the stinky brown stuff hits the fan blades. You get a run on the bank as everyone tries to get those overnight, and 1 and 2 month deposits out – at the same time.

  This is what happened to Bear Stearns and Lehman, literally overnight – although the signs were available months beforehand if you paid attention. I predicted both of these collapses at least 60 days before they occurred:

  1. The collapse of Bear Stearns in January 2008 (2 months before Bear Stearns fell, while trading in the $100s and still had buy ratings and investment grade AA or better from the ratings agencies): Is this the Breaking of the Bear?

  

  
  
  

  

• Murder Rates Soar In Baltimore As Dejected Police Look The Other Way

  Over the past several months, two competing theories have emerged regarding what effect a year of deteriorating race relations has had on law enforcement’s approach to policing America’s cities. 

  One theory, dubbed the “Ferguson effect”, suggests that police are now less engaged because they fear public scrutiny, prosecution, and, in the worst case scenario, being blamed for inciting the type of social upheaval that led to the riots which left parts of Baltimore in ashes less than two months ago. 

  A second theory says that if anything, police have become more aggressive, especially as it relates to the use of lethal force. A Washington Post investigation found that police are killing suspects at twice the previous rate in 2015 and The Guardian has now embarked on an ambitious, crowdsourced effort to put a face and a name to every person killed by police in America over the course of this year. 

  Assessing which theory is correct is difficult, although we would be remiss if we didn’t mention that the so-called ‘Ferguson effect’ relies on anecdotal evidence while the idea that police are killing more people than ever before is simply a matter of statistics. Having said that, The New York Times is out with a new piece which appears to support the notion that, at least in Baltimore, police are scaling back patrols and avoiding high crime areas. Here’s more:

  A month and a half after six officers were charged in Mr. Gray’s death, policing has dwindled in some of Baltimore’s most dangerous neighborhoods, and murders have risen to levels not seen in four decades. The totals include a 29-year-old man fatally shot on this drug corner last month. Police union officials say that officers are still coming to work, but that some feel a newfound reluctance and are stepping back, questioning whether they will be prosecuted for actions they take on the job..

   

  At least 55 people, the highest pace since the early 1970s, have been murdered in Baltimore since May 1, when the state’s attorney for the city, Marilyn J. Mosby, announced the criminal charges against the officers. Victims of shootings have included people involved in criminal activity and young children who were simply in the wrong place..

   

  At the time of her announcement, Ms. Mosby’s charges were seen as calming the city. But they enraged the police rank and file, who pulled back. The number of arrests plunged, and the murder rate doubled. The reduced police presence gave criminals space to operate, according to community leaders and some law enforcement officials.

   

  
  

   

  The soaring violence has made Baltimore a battleground for political arguments about whether a backlash against police tactics has led to more killings in big cities like New York, St. Louis and Chicago, and whether “de-policing,” as academics call it, can cause crime to rise..

   

  Still, the speed and severity of the police pullback here appear unlike anything that has happened in other major cities. And rather than a clear test case, Baltimore is a reminder of how complicated policing issues are and how hard it can be to draw solid conclusions from a month or two of crime and police response.

  The Times does go on to note that, at least in the case of Baltimore, it’s difficult to determine whether the dramatic increase in violence is attributable to less policing or stems from the fact that thanks to the looting that took place during the riots, there are now nearly 160,000 doses of perscription opiates available for sale on the street which could very well be contributing to a spike in violent crime. 

  For example, police commanders here attribute the spike in violence in large part to a unique factor: a flood of black-market opiates stolen from 27 pharmacies during looting in April, enough for 175,000 doses now illegally available for sale.

   

  They say drug gangs are now oversupplied with inventory from the looting, resulting in a violent battle for market share from a finite base of potential customers. Gangs sell a single OxyContin dose for $30, twice what they get for a dose of heroin, said Gary Tuggle, a former Baltimore police officer who was the head of the city’s Drug Enforcement Administration office until this month.

  For better or worse, one is certainly inclined to believe that law enforcement in America has entered a new era in which every traffic stop, arrest, and detention will be scrutinized and picked apart for evidence of racial profiling, excessive force, or any other perceived betrayal of the public trust. 

  What that means for public safety remains to be seen. If advocates of the ‘Ferguson effect’ are correct, crime rates could rise as police disengage and scale back their disretionary use of force. On the other hand, some suggest that hightened scrutiny will save innocent lives, increase accountability, and ultimately lead to better policing which will not only decrease crime rates, but help to establish trust between authorities and the public. 

  In the final analysis, it could be that the entire debate misses the point. As long as the social conditions that plague high crime communities are not addressed, no amount of ‘good’ or ‘bad’ policing can save the country.

  

  

  
  
  

  

• "New Silk Road" Part 3: Challenges, Rivalries, & Prospects For Success

  Submitted by Robert Berke via OilPrice.com,

  Part 3: Challenges, Rivalries, Prospects for Success, and Investment Implications.

  In Part 1 of “The New Silk Road,” we examined the China’s plan for rebuilding the silk road, stretching from Europe to Asia.

  In Part 2, we looked at currently proposed projects, and what could stall and hamper progress.

  In Part 3, we examine the geopolitical rivalries, prospects for success, and investment implications.

  Progress on the Silk Road

  If the rush by nations to join the Chinese sponsored Asian International Infrastructure Bank (AIIB) is any indication, the world is becoming ever more engaged with China’s New Silk Road.

  To westerners used to lengthy, multi-decade delays in giant government projects, progress on the Silk Road project is taking place at an astonishing pace. Hardly a day goes by without an announcement of some new project that is set to soon break ground.

  On May 7th, President Xi met with his counterpart in Kazakhstan, to sign major agreements to develop high speed rail lines between Kazakhstan, Russia, and ultimately China. The China side of the rail line to Kazakhstan is already completed.

  Following hot upon that deal, the next day, on Moscow’s Victory Day Celebration, the Chinese President Xi met with President Putin in closed door meetings, where hundred billion dollar deals were sealed in just a few hours, including the high-speed train from Moscow to Beijing.

  On May 13th, China Railway Group won a $390 million contract to build the railroad, along with two Russian railway companies, with regional development plans set to take place in 2015.

  On May 10th, Xi’s three day visit to Belarus culminated in another major agreement, with Belarus becoming a new partner in the high speed rail extension. It almost seems as if the Chinese President Xi has multi-billion deals falling out of his pocket everywhere he goes, and he goes everywhere.

  

  Geopolitics

  There are many who say that the New Silk Road is the first shot in a competition for dominance in Eurasia. Others claim the start of a new cold war. George Soros is among those who go even further with alarming claims of an imminent nuclear war between the US and China. Why the sudden alarms for an obscure area of the world? Here's an indication of the global significance some experts have traditionally claimed for the region.

  "If China succeeds in linking its rising industries to the vast natural resources of the Eurasian heartland, then quite possibly, as Sir Halford Mackinder predicted… in1904, ‘the empire of the world would be in sight,” wrote Alfred W. McCoy, a history professor at University of Wisconsin-Madison, on June 8.

  Although no one has a crystal ball in matters of war and peace, history clearly shows that since the onset of the cold war, the great powers have become adept at avoiding direct conflict with each other.

  US Secretary of State John Kerry met Putin in May, and the message was not about the end of strife between their two countries, but the need to avoid mistakes that could lead to direct conflict. The only agreement announced at the meeting, was the establishment of early warning systems and a hot line, as the first steps in avoiding accident that could lead to further conflict. In that sense, better and earlier communications, keeps people from getting jumpy and pushing the wrong buttons.

  As to the Asian pivot, it’s expected that the US will also push for early warning and improved communication systems with China, for the same reason, to avoid accidental conflicts emerging into something more serious.

  No doubt, the bellicose rhetoric from both sides will continue, partly as the regular saber rattling we’ve all become accustomed to and partly for home consumption (see recent example below).

  “There should be no mistake: The United States will fly, sail, and operate wherever international law allows, as we do all around the world,” US Secretary of Defense Ash Carter said in response to China’s recent arms buildup in the South China Sea. He also added that the United States intended to remain “the principal security power in the Asia-Pacific for decades to come.”

  Without mentioning China, Carter also makes his view clear that the US takes a dim view of Beijing's strategy in the region, and his statement was intended to make clear that the US has no intention of backing down.

  "We already see countries in the region trying to carve up these markets…forging many separate trade agreements in recent years, some based on pressure and special arrangements…. Agreements that…..leave us on the sidelines. That risks America’s access to these growing markets. We must all decide if we are going to let that happen. If we’re going to help boost our exports and our economy…and cement our influence and leadership in the fastest-growing region in the world; or if, instead, we’re going to take ourselves out of the game,” Carter said in a speech to the McCain Institute at Arizona State University in April.

  It is not impossible but far from likely that the US and EU would level war or sanctions against one of their largest trading partners, upon whom, much of their economies depend.

  Iran is good indicator of the response to new Eurasian opportunities, where global business is lining up, eagerly awaiting the easing of sanctions in order to jump in. A similar response is likely to take place on a much larger scale with the launching of the Silk Road, where the global business community is eager to join.

  It’s important to note that it won’t just be Europe and America competing in the race, but so too will emerging new and very wealthy competitors from Asia and the Middle East. It’s hardly a coincidence that the Kuwaiti Sovereign Funds, one of the biggest in the world, has opened offices in Beijing a few years ago, with an eye on financing energy deals. Others from the global oil clan will not be far behind.

  Reportedly, China has held open an invitation to the US to join its sponsored Asian Bank, as a founding and governing board member. China also hold open an invitation to Japan to become a founding member. But the US has not been so welcoming. The US sponsored Trans Pacific Partnership pointedly leaves out China and Russia. In response to questions about future membership, an unnamed US State Dept. representative reportedly responded: “Anyone but China.”

  “The United States …has mixed feelings toward China's rising international status. It remains ambivalent concerning China-proposed initiatives such as the land and maritime Silk Road Initiatives and the Asian Infrastructure Investment Bank. …however, … there is a wide belief among the American think tanks that no convincing reasons exist for the United States not to support or participate in these initiatives,” wrote Fu Ying, China’s Vice Minister for Foreign Affairs, on June 9.

  There is no legal barrier to America becoming a major governing partner with China in Eurasian trade, while also continuing to oppose China's recent aggressiveness. Despite the rising tensions, the US remains one of China's largest trading partners. As a governing partner in the Asian Infrastructure Investment Bank, the US would enhance its leadership in the region, enable western business to take advantage of newly offered opportunities, while helping to underwrite Eurasia's much needed development. It would also avoid the embarrassment of western business rushing to join the project, as seems likely, despite their government's disapproval. The sticking point, as Secretary Carter made clear, is who will lead.

  Yet, as we learned from the Godfather, it might be wise to: "Keep your friends close; keep your enemies even closer."

  Project Feasibility

  Any large, complex economic development project like the ‘Road’ comes with a high degree of risk and delays associated with projects that cross multiple international boundaries, face a myriad of conflicting laws and regulations, and are based upon long term payoffs in a highly uncertain future.

  Like many economic development projects, the underlying assumption is that the project will result in increasing demand. But China’s new empty cities are a testament to the idea that “if you build it, they might not come.”

  No doubt, development financing is needed in Eurasia. A new high speed rail system across the region will likely help boost European trade with Eurasia and the Far East. It’s also likely that a number of cities and regions along the route will see growing economic activities. But what will succeed is far from certain.

  Investment Implications

  The backbone of the system will be an interconnected network of high speed railways set to open up the territories to transport, migration, agriculture, commerce, and industries.

  As the American west was opened to development by new railway systems built through sparsely populated regions, one of the first industries to benefit was mining that spawned the famous gold rush fever. This time around the rush will likely be led by global mining giants in search of much more than gold and precious metals.

  In terms of energy, Eurasia is home to many large oil and gas producers, including Russia, Iran, Azerbaijan, Kazakhstan, and Turkmenistan. Our top prospect here would be global engineering giant, Schlumberger (NYSE: SLB), which recently acquired the largest drilling and exploration company in the region.

  The area is also home to huge mineral reserves, including precious and industrial metals, uranium, and coal. An example is Mongolia with its recent discoveries of some of the world's largest copper and coal mines. Global mining giants are likely to be big winners, like BHP Billiton (NYSE: BHP) and Rio Tinto (NYSE: RIO).

  For a number of reasons, I strongly favor the builders and suppliers, the pick and shovel approach to investments, as far less risky than the long term and more speculative bets on economic growth prospects. From that perspective, that Russian/Chinese agreement offers evidence of some of the best investment prospects, for both short and long term returns.

  The agreement for the Russian/Chinese high speed railway between the two countries calls for China to supply the project with: 20 percent of financing, and 60 percent of engineers, labor, technical assistance, and equipment. The first contract agreed to involved China's government-controlled China National Railway Ltd, a $360 million contract to develop the railway between Moscow and Kazan, with plans to extend to Beijing.

  China, the world's leading developer of high speed train networks, recently announced the merger of its two largest train builders, China CNR Corp. and CSR Corp., intended to boost exports of rail technology. Following the announcement of the merger, the companies’ stock rose by twenty percent before trading was halted. The newly formed company (CRRC Corporation Ltd), with a market cap of $26 billion, will be listed on the Shanghai exchange in place of CNR and CSR, that will both be delisted.

  CSR recently announced a bid for Canada's Bombardier Co. (TSE: BBD.B), one of the world's leading manufacturer of high speed locomotives, trains, and airplanes. At around $5+ per, share, the newly listed company, CRRC, with a market cap of $25 billion, is a top prospect.

  For years, the Kremlin has been lobbying Europe about a planned economic corridor that would extend from Vladivostok to Berlin, and with that plan now incorporated as part of the Silk Road project, Russian Railways becomes another hot prospect.

  Other top prospects include Siemens (FRA:SIE), Germany' giant manufacturer of automated switching systems, an essential component in high speed rail systems, and already a partner with Russian railways.

  Conclusion

  As to the importance of Asian trade to the US, we'll leave the last words to Secretary Carter. In his speech at the McCain Institute, he laid out the administration’s official policy.

  …(The) ” Asia-Pacific…is the defining region for our nation’s future”… “Half of humanity will live there by 2050″ and that “more than half of the global middle class and its accompanying consumption will come from that region.”….”There are already more than 525 million middle class consumers in Asia, and we expect there to be 3.2 billion in the region by 2030…President Obama and I want to ensure that… businesses can successfully compete for all these potential customers. ….Over the next century, no region will matter more… for American prosperity."

  

  

  
  
  

  

• Greenspan Dashes Recovery Hopes: "Housing Stagnation Is Here To Stay"

  Ten years ago this week, Alan Greenspan made his infamous comment about signs of ‘froth’ in the housing market. A decade later, CNNMoney’s Cristina Alesci sat down with the Former Federal Reserve Chairman and got his perspective on real estate. It’s stuck in a rut, or as he puts it, “we haven’t come out of the bottom [of the housing collapse], we are in a secular stagnation.”

   

  

  

  
  
  

  

• Is Deutsche Bank The Next Lehman?

  Submitted by NotQuant.com

  Looking back at the Lehman Brothers collapse of 2008, it’s amazing how quickly it all happened.  In hindsight there were a few early-warning signs,  but the true scale of the disaster publicly unfolded only in the final moments before it became apparent that Lehman was doomed.

  

  First, for purposes of drawing a parallel, let’s re-cap the events of 2007-2008:

  There were few early indicators of Lehman’s plight.   Insiders however, were well aware:   In late 2007, Goldman Sachs placed a massive proprietary bet against Lehman which would be known internally as the “Big Short”.  (It’s a bet that would later profit from during the crisis).

  In the summer 2007 subprime loans were beginning to perform poorly in the marketplace.  By August of 2007, the commercial paper market saw liquidity evaporating quickly and funding for all types of asset-backed security was drying up.

  But still — even in late 2007,  there was little public indication that Lehman was circling the drain.

  Probably the first public indication that things were heading downhill for Lehman wasn’t until June 9th, 2008,  when Fitch Ratings cut Lehman’s rating to AA-minus, outlook negative.   (ironically, 7 years to the day before S&P would cut DB)

  The “negative outlook” indicates that another further downgrade is likely.   In this particular case, it was the understatement of all time.

  A mere 3 months later, in the course of just one week,  Lehman would announce a major loss and file for bankruptcy.

  

  And the rest is history.

   

  Could this happen to Deutsche Bank?

  First, we must state the obvious:  If Deutsche Bank is the next Lehman, we will not know until events are moving at an uncontrollable and accelerating speed.   The nature of all fractional-reserve banks — who are by definition bankrupt at all times – is to project an aura of stability until that illusion has already begun to implode.

  By the time we are aware of a crisis – if one is in the offing — it will already be a roaring blaze by the time it is known publicly.   It is by now well-established that truth is the first casualty of all banking crises.  There will be little in the way of early warnings.   To that end, we begin connecting the dots:

  Here’s a re-cap of what’s happened at Deutsche Bank over the past 15 months:

  • In April of 2014,  Deutsche Bank was forced to raise an additional 1.5 Billion of Tier 1 capital to support it’s capital structure.  Why?
  • 1 month later in May of 2014, the scramble for liquidity continued as DB announced the selling of 8 billion euros worth of stock – at up to a 30% discount.   Why again?  It was a move which raised eyebrows across the financial media.  The calm outward image of Deutsche Bank did not seem to reflect their rushed efforts to raise liquidity.  Something was decidedly rotten behind the curtain.
  • Fast forwarding to March of this year:   Deutsche Bank fails the banking industry’s “stress tests” and is given a stern warning to shore up it’s capital structure.
  • In April,  Deutsche Bank confirms it’s agreement to a joint settlement with the US and UK regarding the manipulation of LIBOR.   The bank is saddled with a massive $2.1 billion payment to the DOJ.  (Still, a small fraction of their winnings from the crime). 
  • In May,  one of Deutsche Bank’s CEOs, Anshu Jain is given an enormous amount of new authority by the board of directors.  We guess that this is a “crisis move”.  In times of crisis the power of the executive is often increased.
  • June 5:  Greece misses it’s payment to the IMF.   The risk of default across all of it’s debt is now considered acute.   This has massive implications for Deutsche Bank.
  • June 6/7:  (A Saturday/Sunday, and immediately following Greece’s missed payment to the IMF) Deutsche Bank’s two CEO’s announce their surprise departure from the company.  (Just one month after Jain is given his new expanded powers).   Anshu Jain will step down first at the end of June.  Jürgen Fitschen will step down next May.
  • June 9: S&P lowers the rating of Deutsche Bank to BBB+  Just three notches above “junk”.  (Incidentally,  BBB+ is even lower than Lehman’s downgrade – which preceded it’s collapse by just 3 months)

  And that’s where we are now.  How bad is it?  We don’t know because we won’t be permitted to know.  But these are not the moves of a healthy company.

  

  Jürgen Fitschen will step down May 2016. Jain will step down at the end of this month.

   

  How exposed is Deutsche Bank?

  The trouble for Deutsche Bank is that it’s conventional retail banking operations are not a significant profit center.  To maintain margins, Deutsche Bank has been forced into riskier asset classes than it’s peers.

  Deutsche Bank is sitting on more than $75 Trillion in derivatives bets — an amount that is twenty times greater than German GDP.    Their derivatives exposure dwarfs even JP Morgan’s exposure – by a staggering $5 trillion.

  With that kind of exposure, relatively small moves can precipitate catastrophic losses.   Again, we must note that Greece just missed it’s payment to the IMF – and further defaults are most certainly not beyond the realm of possibility.

   

  

  Not good.

  And if the dominos were not adequately stacked already, there is one final domino which perfects the setup.

  Meet Tom Humphrey.  He heads up Deutsche Bank’s Investment Banking operations on Wall Street.

  He was also head of fixed income at Lehman.

  

  Prior history.

  History never repeats.   But it does rhyme.    In market terms, it tends to rhyme just about every 7 years.

  * * *

  For more read the Zero Hedge piece from April 2014: The Elephant In The Room: Deutsche Bank's $75 Trillion In Derivatives Is 20 Times Greater Than German GDP

  

  

  
  
  

  

• House Kills Fast-Track Of Obamatrade After Pelosi-Led Democrat Rebellion

  And just like that, President Obama’s fast track of his “great job creation” bill is defeated in a 126-302 procedural vote which stumbled over what is known as the Trade Adjustment Assistance.

  

  Following Pelosi’s comments that “its defeat is the only way we will be able to slow down fast track,” and “people would rather have a job than assistance”, the defeat of a measure to provide aid to workers displaced by trade deals means the fast-tracking of the TPP is done (for now).

  • *HOUSE HAS ENOUGH VOTES TO DEFEAT TRADE BILL
    

  And with a whopping 302 votes against, House democrats just stunned the democrat president by ending the “fast-track” of the TPP and forcing it back to the drawing room table. As the NYT puts it:

  House Democrats rebuffed a dramatic personal appeal from President Obama on Friday, torpedoing his ambitious push to expand his trade negotiating power — and, quite likely, his chance to secure a legacy-defining trade accord spanning the Pacific Ocean.

  Of course this can all go back for another markup and another amendment but for now. TPP needs the passage of the TAA to send the bill back to Obama for his signature, which means we are back to square one.

   

  

  As The NY Times reports,

  In a remarkable rejection of a president they have resolutely backed, House Democrats voted to kill assistance to workers displaced by global trade, a program their party created and has stood by for four decades. By doing so, they brought down legislation granting the president trade promotion authority — the power to negotiate trade deals that cannot be amended or filibustered by Congress — before it could even come to a final vote.

   

  “We want a better deal for America’s workers,” said Representative Nancy Pelosi of California, the House minority leader who has guided the president’s agenda for two terms and was personally lobbied by Mr. Obama until the last minute.

   

  Republican leaders tried to muster support from their own party for trade adjustment assistance, a program they have long derided as an ineffective waste of money and sop to organized labor. But not enough Republicans were willing to save the program.

  Republican leaders could still try to pass a stand-alone trade promotion bill, but that would force the Senate to take up a trade bill all over again. And without trade adjustment assistance alongside it, passing trade promotion authority in the Senate would be highly doubtful.

  The vote was an extraordinary blow to Mr. Obama, who went to the Capitol on Friday morning to plead personally with Democrats to “play it straight” — to oppose trade promotion if they must but not to kill trade assistance, a move he cast as cynical. On Thursday night, he had made an unscheduled trip to the annual congressional baseball game to try to persuade Representative Nancy Pelosi of California, the minority leader.

  And, as expected, shortly after the failure to pass TAA the House passed the TPA…

  • U.S. HOUSE VOTES FOR OBAMA’S FAST-TRACK TRADE NEGOTIATING BILL

  … But it did not matter because:

  • VOTE IS SYMBOLIC; TRADE BILL CAN’T GO TO OBAMA

  Did the US public finally give big corporations, who have successfully purchased the US president long ago, the middle finger?

  

  

  
  
  

  

• US Government Admits 2nd "Chinese" Cyberhack Exposed Military Intel

  In what Rep Mike Rogers called “the mother of all spear-phishing attacks,” AP reports a second cyberattack linked to China appears to have gained access to the sensitive background information submitted by intelligence and military personnel for security clearances, according to several U.S. officials. Coming on the same day as the US Senate failed to pass a cyber-security shield bill and China’s urhging US to reduce military activities in The South China Sea, ‘anonymous’ official sources noted this second cyberbreach of federal records could dramatically compound the potential damage.

   

  First China this morning warned US to reduce military activities in South China Sea…

  China urges U.S. not to take a position on South China Sea issue, reduce military activities in the area to keep peace and stability, Fan Changlong, vice chairman of China’s Central Military Commission, told U.S. Defense Secretary Ashton Carter during a meeting in U.S., according to a statement on the defense ministry says.

   

  The two countries should focus more on major intl and regional issues: Fan

   

  China urges U.S. to stick to “One China” principle and not to send wrong signals to Taiwan pro-independence groups

  And then, the Senate failed to pass a cybersecurity bill…

  • *U.S. SENATE FAILS TO ADVANCE CYBERSECURITY AMENDMENT

  And now, as AP reports, hackers linked to China appear to have gained access to the sensitive background information submitted by intelligence and military personnel for security clearances, several U.S. officials said Friday, describing a second cyberbreach of federal records that could dramatically compound the potential damage.

  The forms authorities believed to have been accessed, known as Standard Form 86, require applicants to fill out deeply personal information about mental illnesses, drug and alcohol use, past arrests and bankruptcies. They also require the listing of contacts and relatives, potentially exposing any foreign relatives of U.S. intelligence employees to coercion. Both the applicant’s Social Security number and that of his or her cohabitant is required.

   

  The officials spoke on condition of anonymity because the security clearance material is classified.

   

  The security-clearance records provide “a very complete overview of a person,” said Evan Lesser, managing director of ClearanceJobs.com, a website that matches security-clearance holders to available slots. “You don’t need these records to blackmail or exploit someone, but it would sure make the job easier.”

   

  The Office of Personnel Management, which was the target of the hack, has not officially notified military or intelligence personnel whose security clearance data was breached, but news of the second hack was starting to circulate in both the Pentagon and the CIA.

   

  The officials said they believe the hack into the security clearance database was separate from the breach of federal personnel data announced last week — a breach that is itself appearing far worse than first believed. It could not be learned whether the security database breach happened when an OPM contractor was hacked in 2013, an attack that was discovered last year. Members of Congress received classified briefings about that breach in September, but there was no mention of security clearance information being exposed.

   

  The OPM had no immediate comment Friday.

  *  *  *

  The question now is twofold: a) is this war? and b) how does US respond?

  Please, please, please – Give Us Back Our NSA – make us safe!!

  

  

  
  
  

  

• The "Rodney Dangerfield" President

  Presented with no comment…

   

  
  

  Source: Investors.com

  

  

  
  
  

  

• 5 Things To Ponder: The "Howard Marks" Problem

  Submitted by Lance Roberts via STA Wealth Management,

  Howard Marks once stated that being a "contrarian" is tough, lonely and generally right. To wit:

  "Resisting – and thereby achieving success as a contrarian – isn't easy. Things combine to make it difficult; including natural herd tendencies and the pain imposed by being out of step, since momentum invariably makes pro-cyclical actions look correct for a while. (That's why it's essential to remember that 'being too far ahead of your time is indistinguishable from being wrong.')

   

  Given the uncertain nature of the future, and thus the difficulty of being confident your position is the right one – especially as price moves against you – it's challenging to be a lonely contrarian."

  The problem with being a contrarian is the determination of where in market cycle the "herd mentality" is operating. The collective wisdom of market participants is generally "right" during the middle of a market advance but "wrong" at market peaks and troughs.

  This is why technical analysis, which is nothing more than the study of "herd psychology," can be useful at deteriming the point in the market cycle where betting against the "crowd" can be effective. As Howard Marks stated, being early is the same as being wrong.

  As I penned yesterday:

  

   

  "As of the end of May, all internal measures of the market are throwing off warning signals that have only been seen at previous major market peaks.

   

  These "warning" signals suggest the risk of a market correction is on the rise. However, all price trends remain within the confines of a bullish advance. Therefore, portfolios should remain tilted toward equity exposure "currently."

   

  The mistake that most investors make is trying to "guess" at what the market will do next. Yes, the technicals above do suggest that investors should "theoretically" hold more cash. However, as we should all be quite aware of by now, the markets can "irrational" far longer than "logic" would suggest. Trying to "guess" at the next correction has left many far behind the curve over the last few years."

  This is the "Howard Mark's" problem defined. There are plenty of warning signals that suggest that investors should be getting more cautious with portfolio allocations. However, the "herd" is still supporting asset prices at current levels based primarily on the "fear" of missing out on further advances. Becoming too cautious, too soon leads to "emotionally" based decision making which generally turns out compounding the problem.

  Furthermore, at TRUE market peaks, there are generally very few "bears" in existence. Currently, as this weekend's reading list shows, there are probably too many "bearish" opinions on the market currently. As a Mr. Marks suggests, being a "contrarian" is supposed to be a tough and lonely existence.

  ---

  1) Prechter Warns Of Sharp Collapse In Stocks by Tomi Kilgore via MarketWatch

  "Based on Prechter's analysis of where the stock market is positioned within its wave structure, he believes the bull market is in a "precarious position."

   

  For one, he said the sentiment indicators he follows have reflected extreme optimism for over two years. That is often viewed as a contrarian signal, because it suggests those looking to buy have already done so, leaving fewer buyers to step in if the market starts slipping.

   

  In addition, Prechter said a number of momentum indicators have been revealing a "dramatic lessening" in the number of stocks and indexes that have participated in the rally in recent months."

  

  Read Also: 103 Years Later, Nothing Has Changed by Tyler Durden via ZeroHedge

   

  2) Stocks On The Wrong Side Of Rate Hike History by Lu Wang & Jennifer Kaplan via BloombergBusiness

  "Never before has a rally in the U.S. stock market gone on this long without a Federal Reserve interest-rate increase. Expecting valuations to keep rising once one comes is asking too much, if history is any guide."

  

  Read Also: Fear & Loathing In The Financial Media by Ben Carlson via Wealth Of Common Sense

   

  3) The Bears Wake Up by Cam Hui via Humble Student Of The Market

  "When the FOMC begins to raise short-term interest rates, this will occur in a very different environment than in the past. Reserves in the banking system are very plentiful, reflecting the large increase in the Federal Reserve's balance sheet over the past few years. But this circumstance should not adversely affect our ability to push the federal funds rate into a higher target range. We have the appropriate tools to push up short-term interest rates. However, lift-off may not go so smoothly in terms of the impact on financial asset prices. After all, lift-off will represent a regime shift after more than six years at the zero lower bound."

  

  Read Also: I Can't Find Anything To Buy by David Merkel via Aleph Blog

   

  4) Stocks Defy The Trend In Fund Flows by Bryce Coward via GaveKal Capital Blog

  "The trend in mutual fund flows is starting to get ugly. In the chart below we show the one year moving sum of flows into equity mutual funds (red line, left axis) and then overlay the S&P 500 price (blue line, right axis). By this measure, flows into equity funds peaked out in early 2014 and net inflows have turned to net outflows."

  

  Read Also: The S&P 500 Is Approaching The "Zone Of Death" by T. Erik Conley via MarketWatch

   

  5) The Average Stocks Is Already Falling by Michael Kahn via Barron's

  "But the S&P 500 tracks big stocks, and is capitalization weighted. The bigger the stock the more it counts, and that can mask small stock weakness. Tech behemoths such as Apple (ticker: AAPL ) and banking giants such as JP Morgan Chase ( JPM ) are indeed doing a lot of the heavy lifting. To combat this problem, I like to look at the New York Stock Exchange composite index as the champion of the average stock. True, it still does favor larger stocks, and it includes non-domestic stocks such as bond funds and foreign shares, but the sheer number of issues contained dilutes their effects.

  Warts and all, the NYSE composite gives me another angle on market breadth. And right now, it has moved below short-term trendlines drawn from the October 2014 closing low."

  

  Read:  This Is Inflation by Jeffrey P Snider via Alhambra Investment Partners

  ---

  BONUS READS & STUFF

  Stocks Are Not Cheap Relative To Bonds by John Hussman via Hussman Funds

  Peter Schiff Warns On Market Bubble by Peter Schiff via Euro Pacific Capital

  How To Measure Risk by Howard Marks via Barrons

  CHART OF THE DAY

  

  ---

  "Don't Think, Feel" – Bruce Lee

  "Don't Feel, Think" – Ayn Rand

  "Don't Think, Look" – Jim Dines

  Have a great weekend.

  

  

  
  
  

  

• Grexit Anxiety Sparks Bond Bid As Stocks Skid To Worst Streak Since Jan

  Summing up the week (in Washington and NYC)…

   

  A hope-strewn squeeze at the open was dominated by the Grexit contagion spreading across the pond..

  

   

  On the week. the S&P just managed a gain with the Nasdaq on a 3-week losing streak – its worst since January…

  

   

  But Futures show the real volatile swings in the markets this week…

  

   

  On the week, Energy stocks were the biggest losers (despite Crude's gains) and Homebuilder led (WTF!?)

  

   

  Bonds & Stocks decoupled…

  

   

  And SMART money flow is notably  divergent…

  

   

  And then there's TWTR…

  

   

  And Axon – the biggest Pharma fraud IPO ever…

  

   

  Treaury yields ended the week lower… after all that hand-wringing about bonds collapse

  

   

  The dollar ended lower for the 2nd week in a row…NOTICE THE PATTERN?

  

   

  Gold and Crude made gains on the week as Copper and Silver slipped…

  

   

  Crude ended higher but gavce back all its post inventory draw gains as Saudi threats and record production did not help…

  

   

  Charts: Bloomberg

  Bonus Chart: Credit Suisse warns that this level of extreme non-volatility (the smallest range on record) implies investors are like a deer in headlights – stuck in place and too overwhelmed to act.

  

   

  Bonus Bonus Chart: The S&P 500 is 2% off all-time record highs and investors' Fear is getting extreme…

  

  

  
  
  

  

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