Today’s News October 8, 2015

• Syrian Crisis: What Will Happen Next?

  Submitted by Brandon Smith via Alt-Market.com,

  The Syrian crisis and the confluence of clashing interests there was entirely predictable. In fact, I wrote an article on my former website in 2010 outlining the potential for Syria as a high value catalyst for global conflict titled “Will Globalists Trigger Yet Another World War?”

  In it, I summarized the dubious history of wars initiated over the past century, including the nature of false flags and false paradigms created by globalists designed to divide nations and peoples and turn them against each other. This strategy of engineered war (along with engineered economic collapse) has been used time and time again by the elites to artificially generate chaos and then consolidate and centralize power while the masses are blinded by confusion.

  Even back then, the problem with Syria seemed obvious:

  "…We have a nuclear armed Israel itching to attack Iran. We have Iran engaged in a defense pact with Syria against Israel. We have Syria with Russian navy bases and weapons on its soil, and we have the U.S. rampaging through the Middle East encroaching on the borders of Pakistan and Yemen, essentially pissing off everyone. What we have is a Globalist made recipe for disaster, using the same ingredients they have used for the last several major wars…"

  Only a year after I published the piece the civil uprising in Syria began, starting with the “Daraa protest movement”, aided by covert intelligence agencies including the CIA.

  In 2012, I decided to reexamine my original theory on Syria as a global catalyst in my article “Syria And Iran Dominoes Lead To World War.”

  In that article, I felt it was necessary to summarize trends in the region, where they might lead, and how globalists might exploit each scenario to achieve a false conflict between East and West. I predicted that the entire Syrian insurgency was conjured out of the ether by NATO interests, due to the suspicious nature of the Council On Foreign Relations and their public statements suddenly SUPPORTING Al-Qaida in Syria. U.S. involvement in the funding and training of the organization we now know as ISIS (or al-Qaida 2.0) has been proven.

  I predicted that U.S. ground troops would enter Syria. This has happened, though the U.S. government maintains that their role and numbers will be “limited.”

  I suggested that once U.S. troops were deployed in any capacity in the region, Iran would join forces with the Syrian government under their already existing mutual defense pact. Today, Iranian troops are entering Syria en masse for combat operations.

  I also predicted that U.S. involvement in Syria would eventually elicit a military response from Russia and a financial response from China. Though China has not yet used the conflict as an excuse to accelerate the dumping of U.S. treasuries, Russia is now fully committed to airstrikes and is preparing a ground invasion, possibly exceeding 150,000 troops.

  Some developments I suggested in my previous articles have not yet surfaced, though I believe there is more than enough momentum for them to be triggered. For instance, I believe Israel is still the ultimate wild card in the Syrian crisis. A military response from Israel is more than possible, particularly against Iran in retaliation for flooding into the region. Further U.S. involvement, including the greater commitment of major naval assets, is likely. And if the U.S. or Israel escalate, I believe Iran will shut down the Strait of Hormuz, perhaps even with the aid of Russia.

  Russian President Vladimir Putin has hinted that Israeli activity in Syrian airspace will be obstructed, and reports of some “near misses” between Russian and Israeli fighters have surfaced.

  Currently, U.S. “relations” with Russia are at lows not seen since the Cold War. In the meantime, the globalists have created a perfect storm of conflicting interests that could very well lead to outright world war. That said, there are different brands of warfare. And, as I pointed out five years ago, the elites do not necessarily need the threat of nuclear war to open the door to collapse.

  Economic warfare would be just as devastating to many parts of the globe and the U.S. in particular, causing massive population reduction through starvation in the span of a few months while leaving large areas of infrastructure intact. Economic warfare is also a perfect distraction of the public eye away from the crimes of international financiers. Our fiscal structure is already in the middle of an implosion set in motion by deliberately destructive central banking policies. But in the midst of economic warfare, such monetary atrocities can simply be blamed on “the treachery of the East.”  The Syrian debacle makes an economic battle scenario between East and West "believable" for many people around the world.

  Still, wider regional warfare of the shooting variety is certainly guaranteed in the near future.

  Saudi Arabia has denounced Russian and Iranian involvement in Syria and has increased support to “moderate rebels.” Of course, as we have seen repeatedly in the past couple of years, there are in fact NO moderates in Syria as rebel groups continue to obtain Western money and weapons and then join the ranks of ISIS.

  The Saudis have made it clear that they will never accept a situation in which the Assad regime continues to hold power in Syria. They have threatened a military response in the event that Assad gains superiority over the insurgency. Keep in mind that the Saudis have already committed forces to Yemen.

  Tensions are also increasing between Saudi Arabia and Iran over Syrian involvement, despite recent Saudi support for the U.S./Iran nuclear deal. The European Council On Foreign Relations has warned that there are now no “mediators for deescalation” in the region. Of course, this is exactly the way they prefer it.

  Turkey is also now a factor, with Turkish officials claiming airspace violations by Russia, and Turkish forces operating in at least a limited capacity in Syria and Iraq.  Syria is a gasoline soaked mess and there are too many potential sparks to keep track of.  The globalists have conjured an environment in which a disastrous domino effect is almost guaranteed.

  Another rather unexpected consequence of the Syrian crisis is the now active effort by the elites to initiate a Cloward-Piven strategy using so-called Syrian "refugees" to destabilize the EU and perhaps even the U.S.  Already, the suggested immigration count for such refugees, many of whom are not even from Syria, has risen from 10,000 bound for the U.S. to 100,000.  I believe as the crisis continues to grow this number will be increased to 1 million refugees or more bound for the U.S.  Expect many extremist elements to be shipped into our borders along with them.

  It is absolutely imperative to remember regardless of what happens next, almost every element of this crisis has been staged. War and economic despair are the ultimate expedient world-changing tools. They wipe the slate nearly clean, as it were, and mold public perception through fear. That which you thought impossible today becomes rather reasonable tomorrow after crisis takes hold; and this includes the final deconstruction of constitutional values, the militarization of our society, the loss of financial prosperity, the extreme degradation of living standards and the ultimate centralization of everything.

  It is also important to realize that there are no sides in this conflict. The East/West paradigm is a sham of epic proportions and always has been. False sides are meant to distract and bewilder the public. They are designed to create counterfeit cross-sections of blame. They are an anathema to truth.

  For further and deeper analysis on possible future developments on a global scale please read my articles “The Economic End Game Explained” and “Has America Been Set Up As History’s Ultimate Bumbling Villain?”

  The question today is merely one of timing. How long before a negative trigger is introduced? How long before Israeli planes come into contact with Russian or Iranian fighters? How long before U.S. troops come into contact with Russian troops? How long before Israel or Saudi Arabia strike Iran? And if the U.S. backs out completely, how long before the entire dynamic of the Middle East is flipped and America loses petro-status for the dollar? With the speed of events forming a fiscal-political riptide, it is hard to imagine we will be waiting very long to find out.

  

  

  

  

  

• St. Louis Prepares For "Catastrophic Event" As Underground Fire Nears Nuclear Waste Cache

  Beneath the surface of a St. Louis-area landfill lurk two things that should never meet: a slow-burning fire and a cache of Cold War-era nuclear waste, separated by no more than 1,200 feet.

  As AP reports,

  Government officials have quietly adopted an emergency plan in case the smoldering embers ever reach the waste, a potentially “catastrophic event” that could send up a plume of radioactive smoke over a densely populated area near the city’s main airport.

   

  Although the fire at Bridgeton Landfill has been burning since at least 2010, the plan for a worst-case scenario was developed only a year ago and never publicized until this week, when St. Louis radio station KMOX first obtained a copy.

  But don't panic, as officials say it is "contained"…

  County Executive Steve Stenger cautioned that the plan “is not an indication of any imminent danger.”

   

  “It is county government’s responsibility to protect the health, safety and well-being of all St. Louis County residents,” he said in a statement.

   

  Landfill operator Republic Services downplayed any risk. Interceptor wells — underground structures that capture below-surface gasses — and other safeguards are in place to keep the fire and the nuclear waste separate.

   

  “County officials and emergency managers have an obligation to plan for various scenarios, even very remote ones,” landfill spokesman Russ Knocke said in a statement. The landfill “is safe and intensively monitored.”

  The cause of the fire is unknown. For years, the most immediate concern has been an odor created by the smoldering. Republic Services is spending millions of dollars to ease or eliminate the smell by removing concrete pipes that allowed the odor to escape and installing plastic caps over parts of the landfill.

  Directly next to Bridgeton Landfill is West Lake Landfill, also owned by Republic Services. The West Lake facility was contaminated with radioactive waste from uranium processing by a St. Louis company known as Mallinckrodt Chemical. The waste was illegally dumped in 1973 and includes material that dates back to the Manhattan Project, which created the first atomic bomb in the 1940s.

  The Environmental Protection Agency is still deciding how to clean up the waste. The landfill was designated a Superfund site in 1990.

  The proximity of the two environmental hazards is what worries residents and environmentalists. At the closest point, they are 1,000 to 1,200 feet apart.

  If the underground fire reaches the waste, “there is a potential for radioactive fallout to be released in the smoke plume and spread throughout the region,” according to the disaster plan.

  The plan calls for evacuations and development of emergency shelters, both in St. Louis County and neighboring St. Charles County. Private and volunteer groups, and perhaps the federal government, would be called upon to help, depending on the severity of the emergency.

  No reports of illness have been linked to the nuclear waste. But the smell caused by the underground burning is often so foul that Missouri Attorney General Chris Koster sued Republic Services in 2013, alleging negligent management and violation of state environmental laws. The case is scheduled to go to trial in March.

  Last month, Koster said he was troubled by new reports about the site. One found radiological contamination in trees outside the landfill’s perimeter. Another showed evidence that the fire has moved past two rows of interceptor wells and closer to the nuclear waste.

   

  Koster said the reports were evidence that Republic Services “does not have this site under control.” Republic Services responded by accusing the state of intentionally exacerbating “public angst and confusion.”

   

  Ed Smith of the Missouri Coalition for the Environment said he would like to see the county become even more involved “to ensure that businesses, schools, hospitals and individuals know how to respond in a possible disaster at the landfill, just like preparing for an earthquake or tornado.”

  Underground smoldering is not unheard of, especially in abandoned coal mines. Common causes include lightning strikes, forest fires and illegal burning of waste.

  At least 98 underground mine fires in nine states were burning in 2013, according to the Office of Surface Mining Reclamation and Enforcement.

  Few underground fires can match one in Centralia, Pennsylvania. In 1962, a huge pile of trash in the town dump, near a coal mine, was set on fire, and it has burned beneath the town for more than half a century.

  

  

  

  

  

• Caught On Tape: Russian Warships Launch 26 Cruise Missiles At ISIS Targets

  On Monday evening, we detailed the Russian hardware being used in Moscow’s campaign to rout anti-regime forces and restore the government of Bashar al-Assad in Syria. 

  As we noted in our preface to that feature, “watching Russia effectively humiliate the West by bragging day in and day out is nothing if it’s not amusing, and indeed the leaked diplomatic cable from 2006 which outlines Washington’s intent to effectively start a civil war in Syria leaves one completely uninclined to be at all sympathetic to the ridiculous situation the US and its allies have found themselves in.”

  That, along with the fact that Western nations like France are not only unwiling to admit that the West’s participation in Syria has been an outright disaster, but are now set to “correct” a refugee crisis by bombing the very place from which the refugees are fleeing leaves us inclined to highlight the following video (out today from the Russian Defense Ministry) that shows what happens when a military superpower decides that because an existing aerial campaign has become akin to shooting fish in a barrel, it might be time to do some sea-based target practice on a few Nike-wearing, black flag-waving jihadists…

  From RT:

  Russia’s Defense Ministry has published a video of its warships firing cruise missiles from the Caspian Sea to hit the positions of Islamic State militants in Syria.

   

  “[Last] night the ship strike group of the Russian Navy, consisting of the Dagestan missile ship, the small-sized missile ships Grad Sviyazhsk, Uglich and Veliky Ustyug launched cruise missiles against ISIS infrastructural facilities in Syria from the assigned district of the Caspian Sea,” the ministry said in a comment under the video.

   

  According to the ministry, the Russian military attack was conducted “by high-precision ship missile systems Kalibr NK, the cruise missiles of which engaged all the assigned targets successfully and with high accuracy.”

   

  On September 30, Russia launched its military operation against Islamic State at the request of the Syrian government. Since the start of the operation the Russian military have destroyed at least 112 objects, including commanding pints, ammunition depots and armored vehicles belonging to jihadists.

  

  

  

  

• Time To End Monetary Central Planning

  Submitted by Richard Ebeling via EpicTimes.com,

  There is no way to describe current Federal Reserve policy other than as monetary confusion and misdirection. In a nutshell, Janet Yellen and the other members of the Fed’s Board of Governors have no idea what to do. Do they raise certain interest rates over which they have some direct influence? Do they keep them at their current rock bottom levels, as they have for the last six years?

  On the one hand, government measured unemployment levels have fallen from their high of over 10 percent at the depth of the recent recession to 5.1 percent in September 2015.

  However, there is an alternative measure of unemployment also calculated by the U.S. Bureau of Labor Statistics. It includes not only those currently unemployed and looking for work during the previous four weeks, but also “discourage workers” who have stopped looking for jobs who would be interested in working if they found a suitable employment; and those who are part-time who would prefer to be employed full-time. If these two additional groups are included, the U.S. unemployment rate is 10 percent, double the headline “official” level of unemployment the administration touts as a “positive” sign of the economy’s recovery.

  On the other hand, price inflation as measured by the Consumer Price Index seems to be barely rising. According to the Bureau of Labor Statistics, price inflation in August 2015 was .02 percent higher than twelve months earlier.

  Again, however, when food and energy prices are subtracted out of the Consumer Price Index to leave what the government statisticians call “core” inflation, prices in August were 1.8 percent higher than a year ago. Certainly not a “galloping” inflation, but not the nearly zero price inflation rate the highline number suggests, particularly since food prices were up 1.6 percent over the year; the “drag” on measured price inflation was all due to a 15 percent decline in energy prices compared to twelve months earlier.

  No Trade-Offs Between Employment and Inflation

  If we look at that alternative unemployment rate of 10 percent in conjunction with the “core” price inflation rate of 1.8 percent, what we see is a moderate form of what in the 1970s was called “stagflation”: high unemployment with rising price inflation.

  The Federal Reserve could try to nudge up the key interest rates it most directly has influence over, especially the Federal Funds rate at which banks lend to each other overnight, but with the risk of threatening the investment and home mortgage borrowing that it has attempted to “stimulate” through near zero interest rates.

  Or the Federal Reserve could continue to keep those interest rates low through a continuation of their moderated “quantitative easing” monetary policy, but with the risk that price inflation (however measured) may start to rise faster than it has, creating the danger of price inflation above their declared target level of two percent a year.

  (It should be kept in mind that even the Federal Reserve’s “modest” target rate of two percent annual price inflation would still result in a near 50 percent decrease in the value of every the dollar in our pockets in around 20 years.)

  Either way, the old Keynesian notion that you can lower unemployment by accepting a higher rate of price inflation, and vice versa, shows itself to be as illusionary as when it was first touted back in the 1960s as the mechanical macroeconomic policy trade-off between unemployment and price inflation known as the Phillips Curve.

  The European Central Bank, by the way, is in its own dilemma. European Union-wide official unemployment continues to hover above 10 percent with a modest price deflation as most recently measured, in spite of that central bank’s own version of “quantitative easing” of nearly $70 billion of new paper money-creation per month since the beginning of 2015.

  

  The Fed Causes Booms and Busts

  The only result of these years of monetary expansion and interest rate manipulation is economic instability and distortion. The financial market indices significantly gyrate up and down seemingly every day based on attempted nuanced readings of the latest public statements by any of the Federal Reserve Governors concerning interest rate policy changes.

  The house of cards constructed on years of artificially low or zero interest rates in terms of investments undertaken with trillions of dollars of cheap money, as well as home mortgages at manipulated interest costs, hang in the balance again as in previous boom-bust cycles.

  Every time the booms turn into busts, the central bankers insist that they have had nothing to do with it. It has been due to “irrational exuberance” in financial markets, or huckster bankers who duped people into taking out loans they could not really afford, or international events beyond a national central bank’s control, or just, well, “bad luck” with things happening in unpredictable ways even under the watchful eyes of the central bank “experts.”

  The fact is, the boom-bust cycles that have plagued modern industrial societies for well over a century, including the Great Depression of the 1930s and this most recent “Great Recession,” as it has been dubbed, have not “just happened” or been the result of inherent and inescapable weaknesses in a market economy or capitalist financial markets.

  The booms and busts of the business cycle are the result of the very central bank system that government policy-makers and central bankers insist they are there to either prevent or mitigate in its amplitude and duration.

  As I explain in my new, recently released book, Monetary Central Planning and the State, published by the Future of Freedom Foundation, central banking suffers from the same political and economic shortcomings as all other forms of central planning.

  Monetary Printing Press Plunder

  First, placing the control of the monetary system in the hands of the government or a government-created agency such as the U.S. Federal Reserve System opens the door to the temptation of political abuse in many forms. On the one hand, the temptation exists to use the monetary printing press to create the money that covers the expenses of a government’s deficit spending and provides the artificially low interest rates to manipulate the costs of funding the government’s accumulated debt.

  On the other hand, a central bank can also be used to “stimulate” employment and production in the service of politicians leading up to an election, to make it seem that those in political power have the magic wand to “create jobs” and better standards of living – what is sometimes referred to as the “political business cycle.”

  It also enables pandering to special interest groups wanting sources of below-market rates of interest for loans, as well as the banking institutions themselves that have access to the created credit supplied by the central bank with which they earn interest income that otherwise might not have been there.

  Government full or near monopoly control of any resource, asset or institution (such as a central bank) historically has always brought in its wake plunder and privilege for some at others’ expense that would not have been possible in a more open, competitive market setting.

  Monetary Central Planning and the Business Cycle

  However, even if those who oversee and manage central banks were as “pure” and benevolent as angels only wishing to do good for mankind with no ulterior self-interested motives or temptations, the monetary and banking system would still constantly run the risk of suffering from the same boom-bust cycles that we see in our world today.

  That is because central banking is a form of central planning, and as such, manifests the same weaknesses and impossibilities as all centrally planned economic systems. Interest rates are market-generated prices that are meant to coordinate the decisions of savers with those of potential investors, by bringing the two sides of the loan market into balance.

  Income-earners make a decision to spend a portion of their earned income on desired consumer goods and to save a portion of that income for planned and possible demands and uses in the future. The real resources that saved portion of their money incomes represent in terms of buying power in the market is transferred to interested and able borrowers; they use that saved portion of other people’s money income to enter the market and demand and purchase resources, raw materials, capital goods (machines, tools, equipment) and labor services to undertake future-oriented and time-consuming investment projects of various types and lengths that will bring forth goods to be bought and sold in the future.

  Interest rates, in other words, serve as the balancing rod to keep in coordinated order the use of scarce resources in society between the production of consumer goods closer to the present and the investments that will bring forth consumer goods further in the future. It is the balancing of resource uses and goods production across time.

  

  Central Banker Hubris vs. Competitive Markets

  There is no way to know what are the “correct” coordinating interest rates for different types of loans with differing periods of investment time in relation to people’s decisions to consume and save parts of their income other than to allow free, competitive financial markets to discover through the interactions of supply and demand what the “equilibrium” or market-balancing interest rates should be.

  This is, of course, no different than in the case of any other good or service that can be offered on the market. No central planner can replace the competitive market and its free pricing system for integrating and coordinating all the complex knowledge and circumstances of multitudes of millions of suppliers and demanders in an ever-changing world.

  And, likewise, it is shear arrogance and naïve hubris for central planners to believe that they do or ever can have the knowledge, wisdom and ability to correctly determine what the quantity of money should be in the economy, what money’s value or purchase power should be over goods and services in the marketplace, or what interest rates would assure that coordinated balance between savings and investments.

  Monetary Freedom and Private Competitive Banking

  That is why in is time to rethink and challenge the presumption of a need for and superior outcome from the institution of central banking, whether in the United States or anywhere else in the world.

  In the twentieth century a group of economists known as members of or sympathizers with the “Austrian School of Economics” challenged the reasoning and rationale behind central banking. Among these leading Austrian economists were Ludwig von Mises and F. A. Hayek.

  Though Austrian economists have differed sometimes in their emphases and arguments about the practical workings of a private, competitive free banking system, there is one underlying premise shared by all of them: a completely market-based monetary and banking system would be far superior to historical and current institutional forms of central banking.

  Money is, perhaps, the most central and essential, economic good in the market, since it is the generally used medium of exchange to facilitate all transactions entered into by buyers and sellers. It makes smoother and more effective the exchange of goods and services throughout the economy.

  Money and Banking is Too Important to Leave to Central Banks

  But precisely because of its central role and significance in a complex and ever-changing market economy the supply and control of money is too important to leave in the hands of politicians or their central bank appointees.

  They are either too open to the temptations of short-run political purposes in their control of the monetary printing press; or they suffer from what Hayek called a “pretense of knowledge” in presuming that they can ever know more or better than the cumulative knowledge of all the participants of the competitive market as manifested in the prices and interest rates that emerge through the interaction of supply and demand.

  Historically, markets – which means all of us in our roles as consumers and productions – determined which commodities were most useful as media of exchange for different types and sizes of transactions. Money was not and need not be a creation or creature of the state, and has most often been commodities such as gold and silver.

  Banking as the institutional procedure and process to facilitate and coordinate the decisions of savers and investors emerged out of the market discovery of profitable opportunities in providing intermediary services to minimize the costs of lenders and borrowers directly searching out trading partners for the exchanging of resources and goods across time.

  

  Money Creation as a Tool of Plunder

  Governments and their central bank creations usurped market-based monetary and banking systems to serve the plundering purposes of kings, princes, parliaments, and special interest groups who all wanted to hold the magical hand of the monetary printing press.

  Print up money (or its digital substitutes and surrogates in more modern times) and you can have access to all the hard work of others who have invested in manufacturing and bringing to market all the goods and services you desire without having to undertake the reciprocal effort and work to make and trade an actual good or service to earn the money so as to honestly buy what you want from them. Some are so impolite as to refer to such monetary mischief as “fraud” and “theft.”

  Added to this more “base” purpose of government monopolization of the monetary printing press, has been, over the last one hundred years, the arrogance and hubris of social engineers, bureaucratic elites of “experts” and “socially-oriented” policy-makers who presume to know how to micro-manage and macro-manage society better than leaving people to manage their own lives through peaceful interaction with others in the competitive marketplace.

  Their century-long legacy in the arena of money and banking has been the booms and busts of the business cycle. The monetary social engineers have worn different hats at different times – calling themselves Keynesians, Monetarists, New Classical or Rational Expectations theories, or Post- and New Keynesians – but they remain variations on the same conceptual and ideological theme: monetary central planners imposing their notions of desired market outcomes by co-opting the functioning of a real and functioning market-based competitive system of free banking using market-chosen media of exchange.

  The time has come to end the tragic and disruptive reign of monetary central planning.

  

  

  

  

  

• China Opens Weaker Than Expected After Goldman Downgrade And "Mirage Of A New Dawn" Warnings

  After a "no change" statement from The BoJ, today's dismal Japanese data was terrible enough to be great news in the new normal as August machine orders drop the most in at least a decade and stocks, USDJPY dipped and ripped. However, it was the China open that investors waited for (after China shares rising 10% in US trading, and CNH strengthening on lower than expected reported outflows) as Goldman slashed its 12m target for Chinese stocks, and Bocom's chief strategist (who called the boom and the bust) says "rally is mirage of new dawn, volume is dying, sell the rallies." PBOC fixed the Yuan at its strongest in 2 months and while Chinese stocks opened up notably it was less than US ADRs suggested (CSI +4% vs ASHR +9.5%).

   

  Global stocks are up 7 days in a row (since Chinese markets shut) – the longest win streak since April… the biggest 7-day rip since Dec 2011…

  

   

  But we start with Japan…. After a "no change" statement from The BoJ, today's dismal Japanese data is terrible enough to be great news as Machine Orders collapse 3.5% YoY (against expectations of a 3.5% rise) dropping for the 3rd month in a row. This is the biggest MoM drop (-5.7%) for August in at least a decade…

  

   

  In addition Japanese investors sold the most foreign bonds in 4 months and bought a near-record amount of foreign stocks…

  • *JAPAN PORTFOLIO INVESTMENTS IN INDONESIA RISE TO RECORD IN AUG.

  

   

  This – notably – sparked weakness in USDJPY and Nikkei 225… but Kuroda and his merry men quickly stepped in to fix that…

  

  *  *  *

  But global investors were waiting with baited breath for the China open (after being told "don't worry" earlier by The PBOC)…

  Before it opened, we noted that Offshore Yuan and US equities had decoupled…

  

   

  And if last year was anything to go by, it could get ugly…

  

  As China returns from a week-long holiday to the following news:

  • Factory PMIs, both official and Caixin, came in slightly above forecast for Sept.
  • Govt eased down-payment rules for first-time homebuyers to support housing;
  • FX reserves fell less than est., easing fears about extreme selling pressure on yuan

  Chinese stocks in U.S. rose almost 10% during the break… but while Chinese Stocks open higher (but less than US ADRs suggested)…

  • *FTSE CHINA A50 STOCK-INDEX FUTURES RISE 7.7% AT OPEN

  And then weakened more…

  • *CHINA'S CSI 300 STOCK-INDEX FUTURES RISE 4% TO 3,251.2
  • *CHINA SHANGHAI COMPOSITE SET TO OPEN UP 3.4% TO 3,156.07
  • *CHINA'S CSI 300 INDEX SET TO OPEN UP 3.8% TO 3,324.98
  • *HANG SENG CHINA ENTERPRISES INDEX EXTENDS DROP TO 1.1%

  

  So The PBOC strengthened the Yuan fix to its highest in 2 months…

  

   

  And injects more liquidity…

  • *PBOC TO INJECT 120B YUAN WITH 7-DAY REVERSE REPOS: TRADER

  And this…

  #CHINA CENTRAL BANK LAUNCHES #YUAN CROSS-BORDER INTERBANK PAYMENT SYSTEM ON OCT 8

  — Amanda Lee (@Lee_AHY) October 8, 2015

  •   *PBOC SAYS CIPS OFFERS YUAN CLEARING, SETTLEMENT SERVICE
  • *PBOC SAYS 19 BANKS PARTICIPANT CIPS  

  *  *  *

  Goldman has downgraded China…

  • *CSI300 INDEX 12-MO. TARGET CUT TO 4,000 VS 5,000 AT GOLDMAN

  ‘Reform’ and ‘liquidity’ continue to buttress our constructive strategic market view. Our refreshed 12m CSI300 target is 4,000 (from 5,000), 25% upside, comprising 10% EPS accrual and a liquidity-based target P/E of 12.7X (-0.4 s.d.), but a harsher growth backdrop could see another 8% downside from current levels. Implementation of SOE and other structural reforms, and the 13th Five Year Plan (FYP) are the key issues to watch.

  

   

  But added…

  • “Harsher” growth backdrop could see another 8% downside from current level
  • Govt may need to buy another 200b to 300b yuan worth of equities to keep SHCOMP at 3,100

  However, on the other hand, the man who called China's boom and bust warns to sell rallies…

  “I still think it’s better to sell into highs rather than buying dips," Hong, the chief China strategist at Bocom in Hong Kong, said in an e-mail interview. “The government has succeeded in curbing market volatility. But volume is dying, too."

   

  "The government won’t intervene actively as long as the Shanghai Composite is at or above current level, i.e. around 3,000," said So, who has a year-end target of 3,200 for the index. "There is limited room to re-leverage. Demand for margin lending would be low anyway, as it takes time to mend investors’ broken hearts."

   

  "There will be oversold technical reprieves,” Hong said. Such rallies “can give people a mirage of a new dawn — until they give up hopes of bottom fishing.”

  *  *  *

  Finally there is this…

  • *VIETNAM TO ALLOW SHORT SELLING TO BOOST TRADING OF STOCKS: NEWS

  Just do not tell China.

   

  Charts: Bloomberg

  

  

  

  

  

• Marc Faber Fears Sudden 1987-Like Crash Or Longer-Term "Sliding Slope Of Hope"

  Sometimes less is more (less good data is moar good for stocks) and in the case of Marc Faber's recent appearance on Bloomberg's "What'd You Miss", 66 seconds of honesty was all that the hosts could take.

   

  The Gloom, Boom & Doom report editor notes "we have had a meaningful decline in many stocks already," and warns it is far from over as market face two possibilities of "longer-term unattractiveness": "a 1987-style collapse," or a 1973-74-style slow "sliding slope of hope."

  

   

  In the full interview, Faber goes into more detail on the world's deflationary pressures amid "colossal financial asset inflation."

   
  

  

  

  

  

  

• No More "Free Trade" Treaties: It's Time for Genuine Free Trade

  Submitted by Ferghane Azihari via The Mises Institute,

  It is erroneous to believe that free traders have been historically in favor of free trade agreements between governments. Paradoxically, the opposite is true. Curiously, many laissez-faire advocates fall into the government-made trap by supporting “free-trade” treaties. However, as Vilfredo Pareto stated in the article “Traités de commerce of the Nouveau Dictionnaire d’Economie Politique” (1901):

  If we accept free trade, treatises of commerce have no reason to exist as a goal. There is no need to have them since what they are meant to fix does not exist anymore, each nation letting come and go freely any commodity at its borders. This was the doctrine of J.B. Say and of all the French economic school until Michel Chevalier. It is the exact model Léon Say recently adopted. It was also the doctrine of the English economic school until Cobden. Cobden, by taking the responsibility of the 1860 treaty between France and England, moved closer to the revival of the odious policy of the treaties of reciprocity, and came close to forgetting the doctrine of political economy for which he had been, in the first part of his life, the intransigent advocate.

  In 1859, the French liberal economist Michel Chevalier went to see Richard Cobden to propose a free trade treaty between France and England. For sure, this treaty, enacted in 1860, was a temporary success for free traders. What is less known however, is that at first, Cobden, in accordance with the free trade doctrine, refused to negotiate or sign any “free trade” treaty. His argument was that free trade should be unilateral, that it consists not in treaties but in complete freedom in international trade, regardless of where products come from.

  Chevalier eventually succeeded in obtaining Cobden’s support. But Cobden was puzzled by the complete secrecy surrounding the negotiations and, in a letter to Lord Palmerston, he attributed this secrecy to the “lack of courage” of the French government. Similarly, today, the lack of transparency concerning free-trade negotiations is problematic and it is often hard to know what the content of a treaty will be.

  Today, while some of these treaties are currently being negotiated, there are already examples of similar agreements enforced. One could refer to the General Agreement on Tariffs and Trade (GATT), the General Agreement on Trade in Services (GATS), the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) or more regional agreements like the North American Free Trade Agreement (NAFTA) or the European Economic Area (EEA).

  But why would protectionist governments who spend their time hampering markets by giving monopolies and other kinds of privileges at national level, open markets at the international level? The very fact that governments are negotiating in the name of free trade should be suspicious for any libertarian or true advocate of free trade.

  Intergovernmental Agreements Enhance Government Power

  Murray Rothbard opposed NAFTA and showed that what the Orwellians were calling a “free trade” agreement was in reality a means to cartelize and increase government control over the economy. Several clues lead us to the conclusion that protectionist policies often hide behind free trade agreements, for as Rothbard said, “genuine free trade doesn’t require a treaty.”

  The first clue is the intergovernmental and top down approach. Intergovernmentalism is nothing more than a process governments use to mutualize their respective sovereignties in order to complete tasks they are not able to accomplish alone. Nation-states are entities which rarely give up power. When they finalize agreements, it is to strengthen their power, not to weaken it. On the contrary, free trade requires a decline of governments’ regulatory power.

  Also, free trade does not require interstate cooperation. On the contrary, free trade can be and has to be done unilaterally. As freedom of speech does not need international cooperation, freedom to trade with foreigners does not need governments and treaties. Similarly, our government should not rob their population with corporatist and protectionist policies just because others do. Anyone who believes in free trade does not fear unilateralism. The simple fact that bureaucrats and politicians do not conceive of the international economy outside of a legal frame settled by intergovernmental agreements is sufficient to show the mistrust they express toward individual freedom. This reinforces the conviction that these agreements are driven by mercantilist preoccupations rather than genuine free trade goals.

  Extending Regulatory Control Beyond Your Own Borders

  The second clue concerns the intense conflicts between governments on these agreements characterized by a high degree of technicality. History shows that multilateralism leads toward deadlock. The failure of the Doha Round is the cause of the proliferation of bilateral and regional initiatives. The contentious relations between governments come from the will of some states to dictate their norms to other countries’ producers through an international harmonization process. But this is the exact opposite of free trade. As economic theory shows us, exchange and the division of labor is not based on equality and harmonization but rather on differences and inequality. Furthermore, the technicality and secrecy surrounding free-trade agreements favor mercantilism and protectionism to the extent that technical regulations are used to favor producers who are politically well connected.

  The Trans Pacific Partnership (TPP) is a good illustration of this balance of power. It was at first an agreement between four countries (Brunei, New-Zealand, Singapore, and Chile.) which tried to resist some neighbors’ commercial influence, especially China. Then the United States came and convinced more countries (Australia, Malaysia, Peru, Vietnam, Canada, Mexico, and Japan) to join the negotiations. Let’s also notice that most of the countries invited are already bound by regional or bilateral agreements with the United States. China remains excluded from the process. This governmental drive toward regulatory hegemony is obviously the complete opposite of free trade. Indeed, free trade supposes letting consumers peacefully choose what products they want to promote rather than determining what is available through bureaucratic coercion.

  Consolidation of Monopolies

  The third clue concerns the vigor with which governments have tried over several decades to impose at the international level a more constraining legal framework for so-called “intellectual property.” The first initiatives appear in 1883 and 1886 with the Paris Convention for the Protection of Industrial Property and the Bern Convention for the Protection of Literary and Artistic Works. Amended several times during the twentieth century, the initiatives embrace, respectively, 176 and 168 states. These conventions are placed under the auspices of the World Intellectual Property Organization (WIPO), an international bureaucracy which joined the United Nations system in 1974. A turning point came in 1994 with the signature of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) administrated by the World Trade Organization (WTO). It is now incorporated as an essential part of the administration of international commerce and benefits from the WTO’s sanction mechanisms.

  In 2012 we endured a fresh attempt by our governments to reduce our freedom to create and share intellectual works with the Anti-Counterfeiting Trade Agreement (ACTA). And, if we look at the negotiations mandates of these trade agreements, we can see they all include a chapter on the reinforcement of “intellectual property” rights. Intellectual property has become a key concept of the international economy. But this must not hide its illegitimacy.

  As Vilfredo Pareto remarked, “From the point of view of the protectionist, treaties of commerce are … what is most important for a country’s economic future.” Each time a new “free trade” treaty is enacted, what is seen is the attenuation of tariff barriers, but what is not seen is the sneaky proliferation and harmonization of non-tariff barriers impeding free enterprise and creating monopolies at an international scale at the expense of the consumer. It’s time for genuine free trade.

  

  

  

  

  

• "I Would Say Don't Worry" Says Chinese Central Banker As Indian Central Banker Says "World Economy Is Looking Grim"

  Earlier today, the IMF with its usual several year delay, discovered what pretty much everyone else had known for years: that emerging markets have massively overborrowed, according to the IMF to the tune of $3 trillion, most notably in China.

  Of course, this is one of the many things we have been cautioning about for the past 6 years, perhaps nowhere more vividly than in this November 2013 infographic showing “How In Five Short Years, China Humiliated The World’s Central Banks.”

  

   

  So now that the IMF has finally caught up with what our readers knew two years ago, here are some more of its “profound” observations:

  This dangerous over-leveraging now threatens to unleash a wave of defaults that will imperil an already weak global economy, said stark findings from the IMF’s twice yearly report.

   

  The Fund warned there was no margin for error for policymakers navigating these hazardous risks.

   

  “Policy missteps and adverse shocks could result in prolonged global market turmoil that would ultimately stall the economic recovery,” said Jose Viñals, financial counsellor at the IMF.

  And just when one thinks there is hope yet for the IMF, and it is almost on the same page as the BIS (the same BIS whose board of directors is comprised of all modern central bankers of course), the IMF goes and says what its policy recommendation is: engage in the same policies that have not only failed, but led the world to the brink, but not just one where the market can plunge 20%, 40%, or more percent, but where the entire neo-Keynesian/fiat/fractional reserve system is ultimately left discredited in the garbage heap of history, where it belongs.

  The world’s major central banks should ensure policy remains “accommodative” for fear of setting off a new wave of instability that would see bond prices rise and asset prices collapse, said the IMF.

  In fact, just do more QE. Best of all, just paradrop money right; after all that $200 trillion in global debt (and a few quadrillion in derivatives) won’t inflate itself away, right?

  Whoever wishes to, can waste their team reading the full report here.

  One person who didn’t read it, but had no choice but to engage in damage control was China’s deputy PBOC governor Yi Gang, who had the following absolutely comical retort to the IMF:

  “I would say, don’t worry,” said Yi Gang, deputy governor of the People’s Bank of China, after the International Monetary Fund warned of risks in China’s economic challenges.

   

  “China will still have pretty much middle-to-high growth in the near future,” said Mr Yi, speaking in Lima, where the IMF-World Bank annual meetings were beginning.

   

  “A lot of people are considering a slowdown of the Chinese economy,” he said, referring to how the downturn has helped send global commodity prices plummeting, hurting the economies of exporters. But he insisted that Chinese imports of raw materials for its industrial economy will grow steadily in the future.

  We won’t even dignify this utter gibberish with a comment, but instead will give the word to a far more credible and serious policy maker, former IMF chief economist and current India central bank governor Raghuram Rajan, perhaps the only sane central banker anywhere these days, who realizes it is now too late for “macroprudential policy”, and certainly far too late “not to worry.”

  Instead he called for a “global safety net” backed by the IMF to provide support to economies “that might experience liquidity crises in the future, especially given that such problems might be triggered by the reversal of years of highly accommodative, post-crisis monetary policy in advanced economies such as the US.”

  Look what he did there, IMF? He did not call for more QE/NIRP/ZIRP or money paradrops: instead he realizes when the game is over, and when it is time to move on to the next, far less pleasant stage in the global lifecycle.

  What is this safety net Rajan proposes?

  Without such a safety net, governments were reluctant to approach the IMF because of the stigma attached to such a plea and the implication that they were undergoing a full-blown solvency crisis rather than a temporary shortage of liquidity as billions of dollars of capital rushed for the exit.

   

  Mr Rajan said one possibility was a multilateral swap arrangement among central banks — of the sort that already exists between the emerging Brics economies and in the $50bn Japanese credit line for India, for example — guaranteed by the IMF. “I think a lot of emerging markets would like to see something like this,” he said, but admitted there was no appetite for the idea among advanced economies.

  Of course there isn’t: it would mean reducing the equity return for the shareholders of DM central banks. And that must be avoided at all costs, even if the currency said shareholder plans to liquidity asset holdings into will not exist for much longer.

  Finally, Rajan’s summary of the state of the global economy was far less cheerful and far more credible than that of Yi Gang:

  The world economy, he said, was “looking grim.”

  So then, worry?

  

  

  

  

  

• The World Map Of Debt

  What if we were to redraw the world map based on the sustainability of national debt levels?

   

  

  Original graphic by: HowMuch.net

  Countries that are smaller in size, but that have big debt loads, would stand out more. If we used debt-to-GDP as scaling criteria, Japan would become the largest country on our new map. Japan holds 19.99% of all global debt despite only having about 6% of the world’s economic production. The country’s debt-to-GDP ratio is 230%.

  Greece and Italy, two medium-sized European countries, would be bigger than North America as a whole. That said, the United States does hold an extreme amount of debt itself, equal to an astounding 29.05% of global debt. It is just masked more because of the country’s significant GDP. We have also looked at the United States another way in the past, and by the measure of debt-to-revenue, the US has the 2nd largest debt burden in the world.

  On the opposite side of the question, there are large countries that have less debt – they disappear from the map almost completely. Australia, a giant land mass, is reduced to a tiny island with its load of 29% debt-to-GDP. Nigeria shrinks to a tiny speck on the map with an 11% ratio.

  Source: Visual Capitalist

  

  

  

  

  

• Edward Snowden: "They've Said They Won't Torture Me…"

  Submitted by Simon Black via SovereignMan.com,

  Just in case anyone still foolishly believes that there’s a shred of decency left in the ‘justice’ system in the Land of the Free, I would humbly present exhibit A: Edward Snowden.

  In a recent interview with the BBC, Edward Snowden disclosed that he has offered numerous times to the US government to return to the United States, face trial, and if necessary, spend time in prison.

  [full interview below]

  It hasn’t mattered that hundreds of thousands of people have signed petitions asking President Obama to pardon Mr. Snowden.

  Those petitions have been totally ignored.

  So Snowden is preparing to return and face trial, negotiating terms with Uncle Sam to ensure that he’s treated fairly.

  As he told the BBC, “So far they’ve said they won’t torture me. Which is a start, I think. But we haven’t gotten further than that.”

  It’s a sad reflection on the values of a country that someone who blows the whistle on the government committing egregious crimes and violating its own constitution has to flee to Russia in order to escape oppression.

  It’s even worse that the government in the Land of the Free rescinded his passport.

  But it’s utterly shocking that any negotiation about his return has to start by taking TORTURE off the table.

  The fact that torture even has to be mentioned is utterly pathetic. And it pretty much tells you everything you need to know about justice in America… and what happens if you dare cross the government.

  

  

  

  

  

• Someone In Chicago Is Shot Every 2.8 Hours (Despite Major Gun Control)

  Having pointed out the surge in gun sales that has accompanied many of the largest mass shootings in America (and the government's instant knee-jerk reaction to tighten gun control, perhaps ignoring the mental problems many Americans face), and earlier noted that 'mass shootings' are now running at a pace of more than 1 per day in America, we thought DailyCaller.com's Mike Piccione's intriguing report detailing the supposed "gun-free-zone" of Chicago provided some crucial color that few seem willing to listen to…

  Someone in Chicago has been shot every 2.84 hours this year for a total of 2,349 shootings during the period of January 1, 2015 to October 6, 2015, according to crime stats published by the Chicago Tribune.

   

  This year, Chicago is expected to eclipse the previous milestone of a shooting every 3.38 hours in 2014 with a total victim count of 2,587.

  But – Chicago ranks as one of the most regulated cities in the nation for gun control.

  Concealed carry is almost nonexistent. To purchase a gun or ammunition requires a Firearm Owners Identification card in the entire state of Illinois, and additionally, a Chicago Firearm Permit – which is required to possess a firearm in Chicago.

   

  Not only are the people heavily regulated in Chicago, but guns are also heavily regulated. Any long gun with a grip protruding from the stock or a firearm with a telescoping stock is prohibited and classified as an “assault weapon.”

   

  Magazines are limited to a 12-round capacity.

   

  Even a spring-powered pellet gun with a muzzle velocity of 700 feet-per-second is classified as a “firearm,” although it does not use gun powder, the component that puts the “fire” in “firearm.”

   

  A stun-gun — a non-lethal device with no projectile — is considered a deadly weapon and cannot be carried for self-defense.

   

  Chicago, for all intents and purposes, is a “gun-free zone.”

   

  But all the state and city regulations associated with firearms in Chicago have failed to produce a safe city, and these are the policies that President Obama and Secretary Clinton wish to extend to the rest of the country.

   

  While saying that “criminals go out-of-state to places where it is easier to obtain guns” is often used to push gun control, it illustrates that criminals ignore gun laws in every state and that onerous access to Second Amendment rights on law abiding citizens doesn’t stop crime.

   

  Clinton’s campaign platform includes a call for federal legislation mandating background checks on all private firearms transfers and sales. Clinton also wants to repeal the “Protection of Lawful Commerce in Arms Act.” That law protects firearm manufacturers from lawsuits for negligent use of firearms.

   

  President Obama, through is spokesman Josh Earnest, has announced, “The president has frequently pushed his team to consider a range of executive actions that could more effectively keep guns out of the hands of criminals and others who shouldn’t have access to them. That’s something that is ongoing here.”

   

  Per the president’s policy, Chicago has taken every action “that could more effectively keep guns out of the hands of criminals and others who shouldn’t have access to them.”

  *  *  *

  Yet the shootings continue to rise…

  

  

  

  

  

• Presenting SocGen's "China Syndrome": "The Vicious Cycle Of Lower Demand, Prices And Commodity Currencies"

  To be sure, there have been no shortage of narratives that we’ve been keen on presenting, perpetuating, and explaining this year as the series of global ponzi schemes that have been built in the seven years since the crisis continue to unravel. 

  Of course what’s important to understand here is that contrary to what our mainstream media critics – some of whom are now effectively jobless – will tell you, we aren’t in the business of spinning the narrative. 

  We’re in the business of helping to explain how things actually work on the Street as well as helping readers get to the bottom of what can sometimes be an impossibly complex geopolitical news cacophony designed to make you believe what the world’s most powerful governments want you to believe. So when we run headlines like this one: “Bloomberg’s Commodity Index Just Hit 21st Century Low”, it’s important to understand that we’re not using hyperbole for the sake of using hyperbole. We’re simply alerting those who frequent these pages to a very serious dynamic that in fact is now one of the driving forces behind global economic outcomes.  

  In short, the global commodities rout that’s unfolded in the wake of the death of the petrodollar and the demise of the Chinese growth machine has served to wreak havoc on EM commodity currencies and now threatens to plunge the world into crisis and forever delay “liftoff” in the US.

  Through it all, one thing that readers and (some) analysts have noted is that even as it becomes clearer and clearer that central banks and the paper they print are on their way to having zero credibility with anyone, commodities (so, the things people actually use and the things that actually have intrinsic value) have literally collapsed when priced in terms of worthless fiat paper.

  SocGen calls this the “China Syndrome” and we present the following analysis for readers to consider on the way to determining if the rout in the prices for materials that the world actually needs is justified, or whether perhaps it is just a casualty of another nefarious feedback loop gone awry…

  

  

  

  

  

  

• Is a Ban on Physical Cash Coming Soon?

  The Central Banks hate physical cash. So much so they there will likely try to ban it in the near future.

   

  You see, almost all of the “wealth” in the financial system is digital in nature.

   

  1)   The total currency (actual cash in the form of bills and coins) in the US financial system is a little over $1.36 trillion.

   

  2)   When you include digital money sitting in short-term accounts and long-term accounts then you’re talking about roughly $10 trillion in “money” in the financial system.

  3)   In contrast, the money in the US stock market (equity shares in publicly traded companies) is over $20 trillion in size.

   

  4)   The US bond market  (money that has been lent to corporations, municipal Governments, State Governments, and the Federal Government) is almost twice this at $38 trillion.

   

  5)   Total Credit Market Instruments (mortgages, collateralized debt obligations, junk bonds, commercial paper and other digitally-based “money” that is based on debt) is even larger $58.7 trillion.

   

  6)   Unregulated over the counter derivatives traded between the big banks and corporations is north of $220 trillion.

   

  When looking over these data points, the first thing that jumps out at the viewer is that the vast bulk of “money” in the system is in the form of digital loans or credit (non-physical debt).

   

  Put another way, actual physical money or cash (as in bills or coins you can hold in your hand) comprises less than 1% of the “money” in the financial system.

   

  As far as the Central Banks are concerned, this is a good thing because if investors/depositors were ever to try and convert even a small portion of this “wealth” into actual physical bills, the system would implode (there simply is not enough actual cash).

   

  Remember, the current financial system is based on debt. The benchmark for “risk free” money in this system is not actual cash but US Treasuries.

   

  In this scenario, when the 2008 Crisis hit, one of the biggest problems for the Central Banks was to stop investors from fleeing digital wealth for the comfort of physical cash. Indeed, the actual “thing” that almost caused the financial system to collapse was when depositors attempted to pull $500 billion out of money market funds.

   

  A money market fund takes investors’ cash and plunks it into short-term highly liquid debt and credit securities. These funds are meant to offer investors a return on their cash, while being extremely liquid (meaning investors can pull their money at any time).

   

  This works great in theory… but when $500 billion in money was being pulled (roughly 24% of the entire market) in the span of four weeks, the truth of the financial system was quickly laid bare: that digital money is not in fact safe.

   

  To use a metaphor, when the money market fund and commercial paper markets collapsed, the oil that kept the financial system working dried up. Almost immediately, the gears of the system began to grind to a halt.

   

  When all of this happened, the global Central Banks realized that their worst nightmare could in fact become a reality: that if a significant percentage of investors/ depositors ever tried to convert their “wealth” into cash (particularly physical cash) the whole system would implode.

   

  As a result of this, virtually every monetary action taken by the Fed since this time has been devoted to forcing investors away from cash and into risk assets. The most obvious move was to cut interest rates to 0.25%, rendering the return on cash to almost nothing.

   

  However, in their own ways, the various QE programs and Operation Twist have all had similar aims: to force investors away from cash, particularly physical cash.

   

  After all, if cash returns next to nothing, anyone who doesn’t want to lose their purchasing power is forced to seek higher yields in bonds or stocks.

   

  The Fed’s economic models predicted that by doing this, the US economy would come roaring back. The only problem is that it hasn’t. In fact, by most metrics, the US economy has flat-lined for several years now, despite the Fed having held ZIRP for 5-6 years and engaged in three rounds of QE.

   

  As a result of this… mainstream economists at CitiGroup, the German Council of Economic Experts, and bond managers at M&G have suggested doing away with cash entirely.

   

  If you think this sounds like some kind of conspiracy theory, consider that France just banned any transaction over €1,000 Euros from using physical cash. Spain has already banned transactions over €2,500. Uruguay has banned transactions over $5,000. And on and on.

   

  This is just the beginning. Indeed… we've uncovered a secret document outlining how the US Federal Reserve plans to incinerate savings.

   

  We detail this paper and outline three investment strategies you can implement

  right now to protect your capital from the Fed's sinister plan in our Special Report

  Survive the Fed's War on Cash.

   

  We are making 1,000 copies available for FREE the general public.

   

  To pick up yours, swing by….

  http://www.phoenixcapitalmarketing.com/cash.html

   

  Best Regards

  Phoenix Capital Research

   

   

  

  

  

  

• Recovery? Student Homelessness Has Doubled Since Before The Recession

  Submitted by Mike Krieger via Liberty Blitzkrieg blog,

  How’s that recovery going for you? That’s what I thought.

  Here’s the latest data point from the ongoing oligarch crime spree shamelessly marketed to the masses as an “economic recovery.”

  From Five-Thirty-Eight:

  The number of homeless students in the country’s classrooms has more than doubled since before the recession, according to recently released federal data. That’s an alarming trend, but a new report offers some hope: At least part of the increase, the authors say, is not because more students have become homeless, but because states have gotten better at identifying homeless students.

  Here’s a visual representation of America’s Banana Republic neo-feualism for those of you so inclined:

   

  

  Bull market in serfdom. If this is what a recovery looks like, I don’t want to see a recession.

  There were about 1.4 million homeless students nationwide in the 2013-14 school year, according to the Department of Education, twice as many as there were in the 2006-07 school year, when roughly 680,000 students were homeless.

   

  The rankings are based on an array of indicators that range from the concrete, like the number of available rental units that are affordable for extremely low-income families, to the less so, like the number of policies that reduce homeless families’ barriers to accessing child care. Matthew Adams, the institute’s principal policy analyst, said that rather than try to measure the effectiveness of policies in each state, which can be hard to quantify, the goal of the report is to identify and compare the efforts being made by each state.

  Don’t forget to send thank you notes to America’s #1 criminal at large. Return address optional:

  

  

  

  

  

  

• "They're Converging To Dire Levels!": SocGen's Edwards Delivers Critical Warning On Inflation Expectations

  At a certain point, one has to wonder if there will ever be a time when developed market policy makers throw in the towel. 

  When both Japan and Europe slid back into deflation lately, it served notice that trillions upon trillions in central bank asset purchases are definitely not working to restore confidence in the global economic recovery and/or reinvigorate inflation expectations. 

  However, you cannot simply print trillions in paper liabilities in order to purchase your own other paper liabilities (and no, that is not a typo, that’s just simply what’s happening here) without creating distortions across capital markets and that’s exactly what’s happened across the globe as the Fed and its DM brethren have “accidentally” engineered an epic case of capital misallocation that, far from promoting an increase in global demand and trade, has actually contributed to a global deflationary supply glut. 

  That is actually not nearly as complicated as it sounds. Put simply: if you keep uneconomic businesses in business, you also keep their supply online, which means that at the end of the day, if the fiat money you’re injecting doesn’t end up trickling down and stimulating aggregate demand because the NIM margins of the banks you’re giving it to are so low thanks to ZIRP as to discourage them from sharing the wealth, well then, all you’ve actually done is create a scenario where the idea of inflation expectations is essentially meaningless right up until everyone wakes up to what’s going on, and then it’s Weimar time. 

  So consider all of that, and then consider the following from SocGen’s Albert Edwards who has some characteristically introspective commentary regarding the interplay between central banks and inflation expectations and generally does a nice job of explaining what we’ve been at pains to point out for months (if not years): namely that central bankers are largely hapless when it comes to achieving their stated goal of rescuing their respective economies from the deflationay doldrums.

  *  *  *

  From SocGen

  Two things caught my eye this week. The first was more soggy Japanese economic data which suggests that the BoJ may soon hit the QE button even harder. That would trigger a renewed slide in the yen and another round of Asian currency turmoil – plus c?a change! But, secondly and perhaps more important is increasing evidence of a loss of confidence that the Fed is actually in control. Ignore for a moment the stock market’s celebration of weaker than expected payrolls. Instead investors should focus on the rapid decline in US inflation expectations since the Fed meeting – even now converging to dire eurozone levels!

  Expectations of the first Fed rate hike were kicked into March next year in the wake of the weaker than expected payroll release. We?ve been here before and it?s becoming tedious. But at least the equity market?s euphoric reaction was entirely predictable.

  Far more interesting is the continuing slide in US break-even inflation expectations. The measure for 5y expectations, in 5 years time, has now decisively fallen below the January low (see chart below) and the spread verses the eurozone has now fallen to only 20bp against 60bp last October. Bond investors are signalling to us that they don?t believe the Fed is in control anymore. The Fed by contrast is brushing aside the market?s deflation concerns. It all feels very much like Japan circa 1995 in the wake of the yen?s then surge.

  

  Talking about Japan, we are at a crucial crossroads. Most observers, except perhaps the BoJ and the Abe government, believe the economic data has been disturbingly weak. Most therefore expect the BoJ to crank up QE, or QQE as it is known in Japan ? having added a wishful qualitative to their quantitative easing. You know my view. All this money printing will ultimately end in tears. Despite being a fully paid up member to the school of thought that believes that Japan has no option other than to monetise its public sector deficit because the government is insolvent, that is also the same reason why I remain bullish on the Nikkei. Japan?s massive QQE (many times that of the Fed and ECB) is the steroids that mean Japan should outsprint all other runners in this currency race to the bottom. And when the yen renews its slide, expect round two of Asian emerging currency weakness to begin and US and eurozone inflation expectations to head lower still.

  *  *  *

  There are two takeaways here, the first is from Edwards and the second from us.

  From SocGen:

  The collapse in inflation expectations tells us that the market believes the central banks, despite their monetary profligacy, are failing to prevent the western economies from turning Japanese, and thus at risk of repeating their devastating slide into outright deflation in the 1990s. 

  And from “The Unwind Of QE Means The “S&P Should Be Trading At Half Of Its Value”, Deutsche Bank Warns“:

  In his latest weekly note, DB’s derivatives analyst Alekandar Kocic focuses on the interplay between US inflation expectations and US equities, and points out something curious, and very much spot on:

  Policy response to the crisis post-2008 consisted of unprecedented injection of liquidity, transfer of risk from private to public balance sheet, and reduction of volatility from its toxic levels. The net result was near-zero rate levels and collapse of volatility across the board, while different market sectors developed high degrees of coordination. The last effect has been an indirect result of the central banks’ flows and the distortions they introduced in the bond market. In this environment other markets acted as a complement to rates (through which monetary policy was transmitted) and crowding out there pushed investors to articulate their views elsewhere. Their participation was a function of amount of liquidity injection. As a consequence everything was trading off of US inflation expectations as the main expression of the QE effects.

  That was the case for the first 5 years of “unconventional policy” until some time in 2013. Then something snapped. Kocic continues:

  With deflation as the main risk tackled by monetary policy, its success or failure was gauged by the ability to reflate the economy. Inflation expectations and breakevens were therefore signals for risk-on or risk-off trade. In fact, most market sectors, from FX to EM equities, were trading in high coordination with breakevens. Taper tantrum was the end of these correlations and a beginning of dispersion across different assets. In effect, it was the unwind of the “QE” trade, its first phase. While most other assets, like credit spreads, EM equities or different currencies, do not have a logical connection with US breakevens, US equities do. The dispersion between these assets and breakevens was an expected consequence of policy unwind. However, for US equities this unwind distorted their “natural” correlation with inflation. Persistence of these dislocations is just a manifestation of to what extent QE has been an important driver of post-2008 markets.

  Which brings us to the punchline:

  Since 2013, stocks rallied while disinflationary pressures were reinforced by a strong USD, low commodity prices and a decline in global demand. If pre-2013 coordination between the two is taken as a reference, then based on current stock prices breakevens should trade about 1.5% wider. This means the Fed should be hiking because inflation is above target. Alternatively, given the current level of inflation, S&P should be trading at half of its value.

  Wait, the S&P should be trading at 900… or even less? Yes, according to the following Deutsche Bank chart:

  

  Only one question remains: which breaks first – do inflation expectations surge higher, soaring by some 150 bps to justify equity valuations, or do equities crash?

  Is reconciliation likely – and, if so, in which direction? Are we returning to the pre-crisis world, or we are in a completely new regime?

  The answer will come from none other than the Fed and by now, even Janet Yellen knows that one word out of place, one signal to the market that the QE-inflation trade will converge with stocks crashing instead of inflation rising (which, unless the Fed launched QE4, NIRP of even helicopter money now appears inevitable), and some $10 trillion in market cap could evaporate overnight.

  Is it any wonder that Yellen is exhibiting “health issues” during her speeches: the realization that the fate of the biggest stock market bubble lies on your shoulders would make anyone “dehydrated.”

  In retrospect, Ben Bernanke knew exactly what he was doing when he got out of Dodge just as the endgame was set to begin.

   

  

  

  

  

  

• Lawmaker Calls For Study On Links Between Pharmaceuticals And Mass Killers

  Submitted by Barry Donegan via TheAntiMedia.org,

  Following recent media reports of high-profile mass shootings, a Republican assemblywoman from Nevada is calling for an investigation into whether psychiatric pharmaceuticals commonly taken by mass murderers can cause side effects that may contribute to their mental health decline.

  According to KSNV Las Vegas, GOP Assemblywoman Michele Fiore says that, rather than blaming mass shootings on the guns used by the perpetrators, studies should be done on the drugs that many of them have a history of having taken to treat mental health disorders.

  “We have to look into what is being prescribed and what is in these meds just like clinical studies. Why don’t we do studies on the medication all of these shooters were taking and take that medication off the market? Obviously, medications can alter your mind just as alcohol can alter the mind,” said Fiore.

  Though it is not yet known whether the perpetrator in last week’s tragic shooting at Umpqua Community College in Roseburg, Oregon was on psychiatric medication, early reports from The Oregonian note that he identified himself by the social media screen name “lithium love,” he mentioned anger and depression in a note that was found in connection with the attack, and he had a long history of behavioral problems in school.

  He had also been discharged by the U.S. Army midway through basic training in 2008 and graduated from a school that The Oregonian described as “geared for special education students with a range of issues from learning disabilities, health problems and autism or Asperger’s Disorder.”

  In August of this year, a CBS46 Atlanta Reality Check report by Ben Swann raised questions about the possibility of a connection between mass murderers and pharmaceutical drugs used to treat mental health disorders, noting that 26 high-profile perpetrators had been taking psychiatric medication.

  Watch the Reality Check below.

  

  

  

  

  

• As A Shocking $100 Billion In Glencore Debt Emerges, The Next Lehman Has Arrived

  One week ago, in a valiant attempt to defend the stock price of struggling commodity trading titan Glencore, one of the company's biggest cheerleaders, Sanford Bernstein's analyst Paul Gait (who has a GLEN price target of 450p) appeared on CNBC in what promptly devolved into a great example of just how confused equity analysts are when it comes to analyzing highly complex debt-laden balance sheets.

  In the clip below, starting about 2:30 in, CNBC's Brian Sullivan gets into a heated spat with Gait over precisely how much debt Glencore really has, with one saying $45 billion the other claiming it is a whopping $100 billion.

  The reason for Gait's confusion is that he simplistically looked at the net debt reported on Glencore's books… just as Ivan Glasenberg intended.

  However, since Glencore – like Lehman – is first and foremost a trading operation, one also has to add in all the stated derivative exposure (something we did ten days ago), in addition to all the unfunded liabilities, off balance sheet debt, bank commitments and so forth, to get a true representation of just how big, or rather massive, Glencore's true risk is to its countless counterparties.

  Conveniently for the likes of equity analysts such as Gait and countless others who still have GLEN stock at a "buy" rating, Bank of America has done an extensive analysis breaking down Glencore's true gross exposure. Here is the punchline:

  We consider different approaches to Glencore’s debt. Credit agencies, such as S&P, start with “normal” net debt, i.e. gross debt less cash and then deduct some share (80% in the case of S&P of “RMIs” – Readily Marketable Inventories. These are considered to be “cash like” inventories (working capital) in the marketing business. At the last results, RMIs were about US$17.7 bn. Giving full credit for RMIs plus a pro-forma for the equity raise and interim dividend we derive a “Glencore Adjusted Net Debt” of c. US$28 bn.

   

  On the other hand, from discussions with our banks team, we believe the banks industry (and ultimately regulators) may look at the number i.e. gross lines available (even if undrawn) + letters of credit with no credit for inventories held. On this basis, we estimate gross exposure (bonds, revolver, secured lending, letters of credit) at c. $100 bn. With bonds at around $36 bn, this would still leave $64 bn to the banks’ account (assuming they don’t own bonds).

  Charted, here is why Sullivan and his $100 billion number was spot on, and why Glencore's banks suddenly realize the company has more gross exposure than its has total assets!

  

  BofA lays out the stunning, if only for equity analysts, details:

  Over US$100bn in estimated gross exposures to Glencore

   

  We estimate the financial system's exposure to Glencore at over US$100bn, and believe a significant majority is unsecured. The group's strong reputation meant that the buildup of these exposures went largely without comment. However, the recent widening in GLEN debt spreads indicates the exposure is now coming into investor focus.

   

  Debt broadly spread

   

  GLEN debt breaks down as US$35bn in bonds, US$9bn in bank borrowings, US$8bn in available drawings and US$1bn in  secured borrowing. We then estimate that the group has US$50bn in committed lines against which it can draw letters of credit with which to finance its trading inventories. Based on public filings, we believe that the banks may have limited capacity to reduce even the undrawn portion of these lines until 2017. GLEN have publicly stated its financing is largely locked in – but we believe that this may not provide comfort to risk-averse bank shareholders and supervisors.

   

  Concentration and convexity: potential stress testing ahead

   

  GLEN had an unencumbered asset base of over US$90bn in property, plant, equipment and inventories at the half year. However, for bank investors and regulators, after the crisis, gross nominal exposure is a key metric – including committed facilities. We believe many banks may now be more carefully reviewing their exposure to the commodities complex. Glencore’s banks span the globe, with 60 in a recent financing. Glencore has stated it has locked its financing in for an extended period, but a desire to hedge would be powerful at the banks, as likely that regulators will include commodity and energy exposures in the next stress tests as it is a stated area of focus. These stress tests typically take gross exposures and assume elevated loss-given-default – a potential 5x capital uplift. A system positioned one-way on a credit has historically tended to keep spreads high; implying rising debt costs which are likely to put pressure on credit quality: convexity is alive and well.

  Furthermore, as we reported last night, while banks have so far been willing to throw good money after bad, this is about to change:

  Bond market spreads imply a non-investment grade rating

  The group's bond spreads imply a rating in the single-B range and a rollover cost of funding >200bp above the cost of debt outstanding. We believe banks’ gross margins on their exposures are below the Glencore group’s average funding cost, with drawn financing at spreads around 50bps and undrawn lines materially below this. The cost of hedging exposure is currently over 600bps. Thus, the P&L dynamics for banks are difficult; this implies to us that banks may increase challenge the business model of commodity traders; this implies to us that banks may increase the cost of and reduce the availability of credit to commodity traders, thus challenging their business model.

   

  Bank shareholder pressure on disclosure and exposure

   

  We believe bank shareholders may pressure managements to reduce exposures, if not because of potential loss then at least because of likely capital consumption under stress. In our view, current disclosures by the banks are inadequate to provide clarity. It is not possible to estimate unsecured exposures, nor to understand if individual short term loans may be a part of a long-term irrevocable commitment as in the case of Glencore, based on publicly available disclosure..

  Worse, since it is not just Glencore that the banks are exposed to but very likely the rest of the commodity trading space, their gross exposure blows up to a simply stunning number:

  For the banks, of course, Glencore may not be their only exposure in the commodity trading space. We consider that other vehicles such as Trafigura, Vitol and Gunvor may feature on bank balance sheets as well ($100 bn x 4?)

  Call it half a trillion dollars in very highly levered exposure to commodities: an asset class that has been crushed in the past year. Which explains BofA's next point:

  According to our Credit analyst, Navann Ty, GLEN’s 5y CDS tightened by 85bp yesterday to c. 640 bps. GLENLN CDS is 70bp wider to MTNA (ArcelorMittal), which is rated Ba1/BB. Trying to extrapolate to an implied credit rating is difficult as we don’t think that there are many IG-rated credits trading at the same level. Bottom line – there appears to be a lot of demand for default protection.

  

   

  All of the above should be well-known to our readers. However, the below exchange between the BofA equity analyst and the company's bank analyst is a must read to gain some further insight on Glencore which is increasingly – and belatedly – seen as the fulcrum entity in what may be the watershed event for any wholesale commodity-trading indudstry collapse, and why the company is, as we first called it, in danger of becoming the commodity sector' "Lehman", a name we first gave Glencore two weeks ago and which appears to have stuck.

  What are the similarities that you observe between GLEN and your experience/analysis of other financial companies during the 2008 Global Financial Crisis (GFC)? What is the roadmap for a situation like this to unwind?

   

  Alistair Ryan (AR): One key similarity I see is the financial structure of the company in time and space. Glencore’s highly leveraged financial structure has not been stress tested in its current form through a full cycle. Ultimately it appears that there is a time mismatch between the duration of its funding (short) and the time to realize the value of (some) of its assets (e.g. the industrial assets). The large notional size of its outstanding debts (US$50 bn+) is also unusual. We observed similarly mismatched capital structures during the GFC in consumer finance companies (e.g. Countrywide, Household) & public broker dealers (e.g. LEH).

   

  Can you give some examples of situations that ended well/less badly? What were the actions taken by company managements?

   

  If we look at Banks as a counterpoint through the GFC, they were, in general much more financially resilient. The institutions which came under pressure and/or failed during the GFC had large nominal amounts of short term debt. Take HSBC. HSBC bought “Household”, the largest consumer finance company. We believe because of HSBC’s relatively low leverage, and the fact that they undertook a $17 bn rights issue, they were able to absorb the losses resulting from their ownership of Household.

   

  As an interesting aside, and again speaking to the financing duration mismatch issue, while HSBC took US$22 bn in write-downs related to mark to market losses onstructured credit (sub-prime), in subsequent years, the company has written back around $21 bn of these losses. We might think about a parallel here with the duration mismatch of short term debt funding and some of GLEN’s more marginal industrial/mining assets which might be “out of the money” today but where value could be realized if the assets are held for the longer term.

   

  Can you give some examples of situations that ended badly? What were the pitfalls?

   

  If we consider the example of UBS, during the GFC found itself in the unfortunate situation of needing to do 4 share issuances support its balance sheet and ultimately sold down the assets that were causing the problems. While this combination did fix the problem at that time, it meant that the company didn’t benefit when the value of the distressed assets recovered. (As an aside, we note GLEN’s 9.99% issue may be of concern due to the fact this is the maximum permissible size that can be undertaken without shareholder approval or a prospectus). During the GFC we came to see similarly sized issues as not always adequate.

   

  A key problem then is the combination of short term funding and market moves in the price of assets which could impact the ability to raise funds either through equity raises and / or asset sales.

   

  Speaking in general terms, we think that some management teams may have been overly confident in terms of their ongoing access to funding. They may also have underestimated the severity of market moves and the extent to which these market moves might make their funding structures unsustainable in less liquid environments. Financial companies tended to have few covenants meaning there wasn’t an actionable indication of a problem under the debt terms until it was time to refinance. At Enron, by contrast, the company used funding structures which were dependent on its investment grade rating so that, effectively, 2 days after the company was downgraded to junk, it was “done”.

   

  We do note the dependence of some business models on the feedback loop of market confidence into the cost of debt which can then ultimately impact the viability of the business. For example, if the cost of debt doubled at a commodity trading company, to what extent is the business model impacted?

   

  We also find it interesting that other commodity trading houses such as ADM & Bunge use relatively lower levels of financial leverage.

   

  What are the problems for GLEN with a potential downgrade to ratings 1 notch (BBB-). What about a two notch downgrade to Junk?

   

  As a rough rule of thumb, we’d think about a 1 notch change in rating being equivalent to a 50% change in a bank’s appetite for exposure to a company. With the pressure we’ve seen on Glencore’s yields & CDS we’d expect that some banks could be looking to reduce their exposure to Glencore and would be looking to hedge existing exposures (for example through the CDS market). This would include undrawn lines. With Glencore presently financing at about Libor + 40 bps but the CDS at 800 bps, having a line out to Glencore has significant “negative carry” implications.

   

  Size matters when it comes to the size of debt issuance. Glencore is a large absolute issuer with >$50 bn in outstanding debt in various forms. What this means, in our view, is that the credit may be quite large in many banks’ portfolios already. As such, the ability of some banks/investors to take additional exposure to Glencore may be limited. We consider the example of RBS vs. HSBC. RBS “maxed out” many credit counterparties including in the short-term wholesale market during the GFC.

  We also consider the relative size of the markets for investment grade and high yield debt in Europe. Investment grade is about $1.6 trillion. High yield is about US$330 bn. These markets are anticipatory, of course, but to the extent that a large issuer were to be downgraded from IG to junk, we’d expect to see some indigestion as markets adjust to new balances.

   

  What is the feedback loop into the banking system from financial stress at Glencore? What does our experiences of 2008 tell us?

   

  The key feature of financial markets in early 2008 was that it had been a long time since something bad had happened. As such “tail risks” were underpriced and we saw an extended period of “easy money”. More and more leverage came into the financial system at different levels. The layers of leverage meant that once the market turned (and the key one here was the US housing market), and recovery proved difficult.

   

  We also note that, as financial institutions came under pressure in 2008, 2009, several companies released quite general statements reaffirming the strong state of affairs in the business. While these statements may have been true in terms of operations, they didn’t reflect the sea-change in the financing environment and the potential negative marks to which the companies were exposed. As such, we read Glencore’s statement of 29th September 2015 with interest and caution: “Glencore has taken proactive steps to position our company to withstand current commodity market conditions. Our business remains operationally and financially robust – we have positive cash flow, good liquidity and absolutely no solvency issues. …”

   

  How might stress tests evolve to include exposure to commodity traders? What is the likely outcome of this?

   

  Bank stress tests are inevitably “topical” i.e. focused on the issues of the day. Take the concept of RMI (“readily marketable inventories”). It hasn’t been tested through an economic cycle. To the extent that we saw a dislocation in commodity markets (say caused by falling commodity prices), this might cause several financial institutions to reexamine commodities / contracts that initially appeared to be cash-like. Then, recovery assumptions might be called into question with the realization value for those commodities as key. To the extent that we saw systemic distress in the GFC with several financial institutions as forced liquidators in a distressed market, liquidity became a real issue and losses were greater than financial models might have suggested. As such, based on our experience, we could hypothesize that a stress test might require an approximate 30/40% haircut on assumed commodity prices.

   

  UK, US & Swiss bank regulators are likely to be focused on this issue in the next round of stress tests (starting in January). In the US we are starting to see the fall-out from the US energy junk-bond situation. In the UK, HSBC and Standard Chartered have big exposures to emerging markets, particularly China. In Switzerland, we believe that both UBS & CS would have exposures to most of the commodity trading houses so Glencore, but also the privately held commodity trading companies such as Trafigura & Gunvor.

   

  How should we think about bank exposure to Glencore and commodity traders in general? Overall, what do you think about this situation?

   

  I’m concerned. The company has cash on hand of around $3 bn at its last results. Yes liquidity is $10 bn including credit lines [JF: latest from company is c. $13 bn post the rights issue]. However, to the extent the company chooses to fully draw those credit lines, a scenario that could emerge is that of this being a stepping stone to lines potentially not being renewed.

   

  If we look at the risks on counterparties, we think that UBS might not be in a position to “take” a $1 bn loss on funds outstanding to Glencore, if such losses were required. CS might not be in a position to “take” a $1 bn loss on funds outstanding to Glencore, if such losses were required. If we think about it from a game theory point of view, there is the danger of a “rush for the exit” in terms of bank exposure to GLEN. As such, credit departments must, we believe, be thinking about how others in the market will consider the risk.

   

  Bottom line, given that CDS in the range of 600-800 and yields on some bonds are now 7% plus, we believe it seems unlikely that a financial institution would look to actively increase its exposure to Glencore, and potentially, to the wider commodity trading space. This scenario would suggest that, while a liquidity squeeze for the wider space may not be imminent, it cannot be ruled out over the next 12-18 months. Again, we are thinking about how risk officers will be planning for the next round of stress tests. To us, part of the latter may mean reducing exposure to commodity traders. We acknowledge that some relationship banks would likely continue to “back” the relationship but whether this will be the norm for the c. 70 banks with whom Glencore has a relationship is uncertain.

  Finally, here is BofA's punchline:

  1. Comparisons are being made with some financially leveraged companies during the 2008 Global Financial Crisis (GFC).
  2. If credit is downgraded, banks could lower their exposure to Glencore both in terms of RCFs & LCs.
  3. The high yield market is small and, our credit strategist thinks we might initially see temporary dislocations in a scenario in which GLEN were downgraded to junk.
  4. Bank stress tests could start to include commodity trader distress. This could lead to less availability and more expensive bank funding of traders.

  And just like that not only is Glencore confirmed to be systemically important (something we knew when we exposed an "academic" hack's paid report to guarantee that commodity traders were not a systemic risk, confirming they are preicsely that) but suddenly – now that this warning is "out there" and even the most clueless credit, and equity, analyst who is stuck holding billions in losses to GLEN will have no excuse to say they "had no idea" – the negative convexity of bank exposure means that all those very banks which have $100 billion in exposure to the giant commodity trading company will quietly do their best to hedge their exposure, ostensbilty by buying default protection adding even more stress to Glencore's "shadow" funding channels, in the process unleashing the very same chain of events that ultimately led to Lehman's downfall.

  *  *  *

  It appears the credit markets are well aware of the systemic risks that Glencore poses…

  

  

  

  

  

  

• Stock-Buying-Frenzy Continues Amid Longest VIX "Losing" Streak Since 2011

  Today in stocks, summarized…

   

  Before we start, this is perhaps the most important chart that no one is talking about…

  

   

  As The longest VIX Losing Streak Since 2011 lifts stocks…

  

   

  Markets ramped overnight (as shown by futures), stumbled a bit on weak EU data, then rallied on weak EU data (lol) then dumped on crude's invbentory build only to be ramped on VIX smash…

  

   

  The bounce occurred as S&P and Dow touched unchanged on the day…

  

   

  Post-Payrolls, Small Caps remain the big winner and Nasdaq the laggard (but they are all up notably)…

  TS CASH WEEK

   

  VIX was smashed to the lows of the day after Europe closed to send stocks back ramping towards the day's highs…

  

   

  S&P 500 briefly broke its 50-day moving average and traded as high as 1999.31 before fading back…

  

   

  Biotechs gained around 1-2% today as the slumping sector triggered a 'death cross'

  

   

  Spot The Difference…

  

   

  But financial credit markets remain notably more worried…

  

   

  GoPro NoMo… Looks like Camera-On-A-Stick will not be The Next Big Thing after all.. but but but social media.. content…

  

   

  YUM Yuck… biggest drop since Oct 2002… as Death Cross strikes…

  

   

  As Digicell pulled its IPO yesterday, Pure Storage (the biggest VC-backed IPO of 2015) was ugly…

  

   

  Treasury yields rose 3-5bps, pushing everything 2Y yields back above pre-payrolls levels...the european selling, US/Asia buying pattern remains in place

  

   

  USD drifted sideways all day (still weaker post payrolls) as AUD strength continues to stun…

  

   

  Commodities drifted higher early on but gold & silver were slammed going into the open and crude dumped after DOE inventory data…

  

   

  Crude's exuberant ramp is routed…

  

   

  Why did Oil drop? Well apart from the production surge and inventory build, this is why…

  In his 30 years of trading, commodities king Dennis Gartman has seen all types of markets. And now he says he's the most bullish he's ever been on crude oil.

  "If you watch the term structure in the futures, you've seen the contango narrow. Crude is no longer aggressively bidding for storage as it was it was six or seven weeks ago," said the Gartman Letter Editor Tuesday on CNBC's " Fast Money ." "I think you've seen the lows."

  Oil and energy stocks decoupled this afternoon..

  

   

  Silver remains the biggest winner post-Payrolls…

  

   

  This is silver's best 4-day run since August 2013 – with a break back above the 200-day moving-average…

  

   

  Charts: Bloomberg

  

  

  

  

• Hillary Flip-Flops On TPP – Shuns Obama's Trade Plan After Publicly Supporting It 45 Times

  In what seems like a nervous populist move amid Bernie Sanders' gains, Hillary Clinton has flip-flopped rather stunningly to oppose President Obama's Trans-Pacific Partnership. Despite supporting the bill at least 45 times, as CNN's Jake Tapper points out, Clinton told PBS' Judy Woodruff Wednesday in Iowa that, "As of today, I am not in favor of what I have learned about it." It's also a departure from the Clinton legacy, as CNN notes, it was President Bill Clinton who, two decades ago, signed the first mega-regional pact: the North American Free Trade Agreement.

   

  As CNN reports, Hillary Clinton came out against the Trans Pacific Partnership in an interview Wednesday, breaking with President Barack Obama and his administration, which has forcefully promoted the deal.

  Clinton told PBS' Judy Woodruff Wednesday in Iowa that, "As of today, I am not in favor of what I have learned about it."

   

  The former secretary of state cited the "high bar" she set earlier in the year as the reason she was giving the deal a thumbs down.

   

  "I have said from the very beginning that we had to have a trade agreement that would create good American jobs, raise wages and advance our national security and I still believe that is the high bar we have to meet" Clinton said, adding later, "I don't believe it's going to meet the high bar I have set."

   

  Clinton's position on the massive 12-nation trade deal that is a staple of the Obama administration's foreign policy in the region has been a festering question ever since the former secretary of state launched her bid for the White House.

   

  Clinton told reporters earlier this year that she did not want to comment on the trade deal until it was finalized, something that happened earlier this month.

  As secretary of state, Clinton actively advocated for the TPP. In fact, she did so 45 times between 2010 and 2013…

  as members of the Obama administration can attest, Clinton was one of the leading drivers of the TPP when Secretary of State. Here are 45 instances when she approvingly invoked the trade bill about which she is now expressing concerns:

  1. January 31, 2013: Remarks on American Leadership at the Council on Foreign Relations

  "First and foremost, this so-called pivot has been about creative diplomacy:Like signing a little-noted treaty of amity and cooperation with ASEAN that opened the door to permanent representation and ultimately elevated a forum for engaging on high-stakes issues like the South China Sea. We've encouraged India's "Look East" policy as a way to weave another big democracy into the fabric of the Asia Pacific. We've used trade negotiations over the Trans-Pacific Partnership to find common ground with a former adversary in Vietnam. And the list goes on."

  2. January 18, 2013: Remarks With Japanese Foreign Minister Fumio Kishida

  "We also discussed the Trans-Pacific Partnership and we shared perspectives on Japan's possible participation, because we think this holds out great economic opportunities to all participating nations."

  3. November 29, 2012: Remarks at the Foreign Policy Group's "Transformational Trends 2013 Forum"

  "…let me offer five big-ticket agenda items that we absolutely have to get right as well. This starts with following through on what is often called our pivot to the Asia Pacific, the most dynamic region in our rapidly changing world. Much of the attention so far has been on America's increasing military engagement. But it's important that we also emphasize the other elements of our strategy. In a speech in Singapore last week, I laid out America's expanding economic leadership in the region, from new trade agreements like the Trans-Pacific Partnership to stepped-up efforts on behalf of American businesses."

  "…We are welcoming more of our neighbors, including Canada and Mexico, into the Trans-Pacific Partnership process. And we think it's imperative that we continue to build an economic relationship that covers the entire hemisphere for the future."

  4. November 17, 2012: Delivering on the Promise of Economic Statecraft

  "And with Singapore and a growing list of other countries on both sides of the Pacific, we are making progress toward finalizing a far-reaching new trade agreement called the Trans-Pacific Partnership. The so-called TPP will lower barriers, raise standards, and drive long-term growth across the region. It will cover 40 percent of the world's total trade and establish strong protections for workers and the environment. Better jobs with higher wages and safer working conditions, including for women, migrant workers and others too often in the past excluded from the formal economy will help build Asia's middle class and rebalance the global economy. Canada and Mexico have already joined the original TPP partners. We continue to consult with Japan. And we are offering to assist with capacity building, so that every country in ASEAN can eventually join. We welcome the interest of any nation willing to meet 21st century standards as embodied in the TPP, including China."

  5. November 15, 2012: Remarks at Techport Australia

  "…we need to keep upping our game both bilaterally and with partners across the region through agreements like the Trans-Pacific Partnership or TPP. Australia is a critical partner. This TPP sets the gold standard in trade agreements to open free, transparent, fair trade, the kind of environment that has the rule of law and a level playing field. And when negotiated, this agreement will cover 40 percent of the world's total trade and build in strong protections for workers and the environment."

  6. November 14, 2012: Remarks With Australian Foreign Minister Robert Carr, Australian Defense Minister Stephen Smith, and Secretary of Defense Leon Panetta

  "Our diplomats work side by side at regional organizations to address shared security challenges and hammer out new economic agreements, and we congratulate Australia upon becoming a new nonpermanent member of the Security Council. Our growing trade across the region, including our work together to finalize the Trans-Pacific Partnership, binds our countries together, increases stability, and promotes security."

  7. November 14, 2012: Remarks at the Opening of the AUSMIN Ministerial

  "That means finalizing the Trans-Pacific Partnership, which will lower trade barriers, raise labor and environmental standards, and drive growth across the region. And it includes, of course, working closely together at the upcoming East Asia Summit to advance a shared agenda."

  8. September 8, 2012: Remarks at APEC CEO Summit

  "That means pushing governments to support high-standard trade agreements like the Trans-Pacific Partnership, to drop harmful protectionist policies. It means playing by the rules, respecting workers, and opening doors qualified women. And most of all, it means doing what you do best: build, hire, and grow."

  9. August 31, 2012: Remarks With New Zealand Prime Minister Key

  PRIME MINISTER KEY: "Secretary Clinton and I discussed the broad range of issues in the Asia Pacific region as we look towards the APEC summit in Russia in around 10 days time. New Zealand warmly supports the United States rebalancing towards the Asia-Pacific and we welcome the opportunities to cooperate further. In that context, we discussed our ongoing efforts to negotiate, alongside a number of other countries, a Trans-Pacific Partnership agreement."

  …

  SECRETARY CLINTON: "I'm also very committed to expanding investment and trade in the region, in pursuit of sustainable economic growth. Later today, I'll meet with local pearl vendors from here in the Cook Islands who are running their businesses while also protecting marine resources."

  10. July 13, 2012: Remarks to the Lower Mekong Initiative Women's Gender Equality and Empowerment Dialogue

  "We've also made workers rights a centerpiece of a new far-reaching trade agreement called the Trans-Pacific Partnership. We are working with Vietnam, Malaysia, Australia, Canada, Mexico, and others in these negotiations."

  11. July 10, 2012: Remarks With Foreign Minister Pham Binh Minh After Their Meeting

  "So we're working on expanding it through a far-reaching, new regional trade agreement called the Trans-Pacific Partnership, which would lower trade barriers while raising standards on everything from labor conditions to environmental protection to intellectual property. Both of our countries will benefit. And in fact, economists expect that Vietnam would be among the countries under the Trans-Pacific Partnership to benefit the most. And we hope to finalize this agreement by the end of the year."

  12. July 10, 2012: Remarks at American Chamber of Commerce Reception and Commercial Signings

  "Domestic and international businesses alike continue to face rules that restrict their activities, and that, in turn, deters investment and slows growth. So we are encouraging the Government of Vietnam to keep on the path of economic and administrative reform to open its markets to greater private investment. And through the Trans-Pacific Partnership, we're working with Vietnam and seven other nations to lower trade barriers throughout the region, as we ensure the highest standards for labor, environmental, and intellectual property protections. Vietnam was an early entrant to the TPP, and we're hoping we can finalize the agreement this year. And the economic analysis is that of all the countries that will be participating — Australia, Canada, Mexico, others — of all the countries participating in the TPP, Vietnam stands to benefit the most. So we're hoping to really see this agreement finalized and then watch it take off."

  13. July 8, 2012: Remarks With Foreign Minister Koichiro Gemba

  "We also discussed the opportunity to strengthen our economic relationship, and the United States welcomes Japan's interest in the Trans-Pacific Partnership, which we think will connect economies throughout the region, making trade and investment easier, spurring exports, creating jobs. The TPP is just one element of our increased focus on the Asia Pacific, but it is important that we recognize that the Japanese-American relationship is really at the cornerstone of everything we are doing in the Asia Pacific. We are not only treaty allies; we are friends and partners with common interests and shared values."

  14. April 30, 2012: Remarks With Secretary of Defense Leon Panetta, Philippines Foreign Secretary Albert del Rosario, and Philippines Defense Secretary Voltaire Gazmin After Their Meeting

  "Finally, we discussed the maturing economic relationship between our countries as well as our shared commitment to enhanced development, trade, and investment. We would like to see the Philippines join the Trans-Pacific Partnership trade community. The foreign secretary raised the Philippines' interest in seeking passage of the Save our Industries Act, and we have conveyed that message to the United States Congress."

  15. April 12, 2012: Remarks at the White House Conference on Connecting the Americas

  "Now President Obama and I have said many times that this will be America's Pacific century, and we are focused on the broader Pacific. But remember, the Pacific runs from the Indian Ocean to the western shores of Latin America. We see this as one large area for our strategic focus. That's why we're working with APEC; that's why we're creating the Trans-Pacific Partnership. We recognize the mutual benefits of engagement between the Americas and the rest of the Pacific."

  16. April 10, 2012: Forrestal Lecture at the Naval Academy

  "As part of that same trip last November, the President built momentum for a new far-reaching trade agreement called the Trans-Pacific Partnership that we are negotiating with eight other countries in the Asia-Pacific region. This agreement is not just about eliminating barriers to trade, although that is crucial for boosting U.S. exports and creating jobs here at home. It's also about agreeing on the rules of the road for an integrated Pacific economy that is open, free, transparent, and fair. It will put in place strong protections for workers, the environment, intellectual property, and innovation — all key American values. And it will cover emerging issues such as the connectivity of regional supply chains, the competitive impact of state-owned enterprises, and create trade opportunities for more small-and-medium-sized businesses."

  17. April 21, 2012: Keynote Address At Global Business Conference

  "Big or small, we're standing up for an economic system that benefits everyone, like when our Embassy in Manila worked with Filipino authorities on new intellectual property protections or when our negotiators ensure that the new Trans-Pacific Partnership requires that state-owned enterprises compete under the same rules as private companies."

  18. February 1, 2012: Remarks With Singaporean Foreign Minister and Minister for Law K. Shanmugam

  "This is a very consequential relationship. The multidimensional growth of our relationship with Singapore is an example of the importance that the United States sets on strengthening our engagement in the Asia Pacific. We are working together on a full range of issues, including moving forward on a high-quality trade agreement through the Trans-Pacific Partnership process."

  19. December 19, 2011: Remarks With Japanese Foreign Minister Koichiro Gemba After Their Meeting

  "The minister and I also discussed a number of bilateral and regional issues and reviewed the close and ongoing collaboration between Japan and the United States in the aftermath of last March's earthquake, tsunami, and nuclear crisis. We discussed Japan's recent move to pursue consultations on joining the Trans-Pacific Partnership negotiations to resolve longstanding trade concerns in order to deepen the economic ties to the benefit of both our countries. I also urged that Japan take decisive steps so that it accedes to The Hague Convention on International Parental Child Abduction and address outstanding cases."

  20. November 18, 2011: Remarks at ASEAN Business and Investment Summit

  "Now let me describe briefly four ways that we want to work with you: first, by lowering trade barriers; second, by strengthening the investment climate; third, by pursuing commercial diplomacy; and fourth, by supporting entrepreneurs. We're excited about the innovative trade agreement called the Trans-Pacific Partnership, or TPP. That would bring economies from across the Pacific, developed and developing alike, into a single trading community, not only to create more growth, but better growth."

  21. November 16, 2011: Presentation of the Order of Lakandula, Signing of the Partnership for Growth And Joint Press Availability With Philippines Foreign Secretary Albert Del Rosario

  "Together we hope to deliver an array of benefits to the people, including more foreign investment to create new jobs, a more streamlined court system that can deliver justice and protect local businesses, better services, and more resources to fight poverty. Over time, these steps will better position the Philippines to join the Trans-Pacific Partnership, which we hope will dramatically increase trade and investment among the peoples of the Pacific."

  22. November 10, 2011: America's Pacific Century

  "There is new momentum in our trade agenda with the recent passage of the U.S.-Korea Free Trade Agreement and our ongoing work on a binding, high-quality Trans-Pacific Partnership, the so-called TPP. The TPP will bring together economies from across the Pacific, developed and developing alike, into a single 21st century trading community. A rules-based order will also be critical to meeting APEC's goal of eventually creating a free trade area of the Asia Pacific."

  23. October 14, 2011: Economic Statecraft

  One of America's great successes of the past century was to build a strong network of relationships and institutions across the Atlantic — an investment that continues to pay off today. One of our great projects in this century will be to do the same across the Pacific. Our Free Trade Agreement with South Korea, our commitment to the Trans-Pacific Partnership, are clear demonstrations that we are not only a resident military and diplomatic power in Asia, we are a resident economic power and we are there to stay."

  24. September 15, 2011: Celebrating 60 years of the U.S.-Australia Alliance

  "We are working to encourage trade through the Trans-Pacific Partnership and through APEC, whose leaders the President will be hosting this fall in Hawaii. Together, we are strengthening regional institutions like the East Asia Summit and ASEAN. And as Secretary Panetta will explain, our military relationship is deepening and becoming even more consequential."

  25. July 25, 2011: Remarks on Principles for Prosperity in the Asia-Pacific

  "That is the spirit behind the Trans-Pacific Partnership, the so-called TPP, which we hope to outline by the time of APEC in November, because this agreement will bring together economies from across the Pacific—developed and developing alike—into a single trading community."

  26. July 20, 2011: Remarks on India and the United States: A Vision for the 21st Century

  "The United States is pushing forward on comprehensive trade deals like the Trans-Pacific Partnership and our free trade agreement with South Korea. We are also stepping up our commercial diplomacy and pursuing a robust economic agenda at APEC. India, for its part, has concluded or will soon conclude new bilateral economic partnerships with Singapore, Malaysia, Japan, South Korea, and others. The more our countries trade and invest with each other and with other partners, the more central the Asia Pacific region becomes to global commerce and prosperity, and the more interest we both have in maintaining stability and security. As the stakes grow higher, we should use our shared commitment to make sure that we have maritime security and freedom of navigation. We need to combat piracy together. We have immediate tasks that we must get about determining."

  27. May 17, 2011: Secretary Clinton's Remarks With New Zealand Foreign Minister Murray McCully

  "We looked ahead to the East Asia summit where President Obama will participate for the first time, and the United States will send our largest, most senior delegation ever to the Pacific Island Forum in New Zealand later this year. We talked about developments in Fiji, and both New Zealand and the United States agree that the military junta must take steps to return Fiji to democracy. And we agree on the importance of pursuing negotiations on the Trans-Pacific Partnership, which will provide a free trade agreement for nine countries across the region, including both of ours. We're making steady progress on this. We hope to be able to have the negotiations complete by the time we all meet in Hawaii for APEC toward the end of this year."

  28. May 2, 2011: Remarks With Australian Foreign Minister Kevin Rudd After Their Meeting

  "And both of us understand the benefits of deeper economic integration and fair trade. Minister Rudd was very influential in helping us to work toward a greater, more relevant involvement in the Pacific-Asian institutions, such as joining the East Asian Summit. The Trans-Pacific Partnership, which is exploring ways to expand opportunity, is critical, and APEC and ASEAN are two other organizations where we work together."

  29. April 17, 2011: Remarks at the American Chamber of Commerce Breakfast

  "We will be hosting the 2011 APEC summit in Hawaii later this year. We are pushing to advance economic integration, remove trade barriers, and make sure that our national regulations line up in a way that encourages trade. We are also working hard on the trans-Pacific partnership, a cutting edge regional free trade agreement that would eventually cover an area responsible for over 40 percent of global trade."

  30. March 18, 2011: Remarks at the Center for Strategic and International Studies (CSIS) on Latin America

  "As countries step up on the global stage, they will make essential contributions to helping all of us meet some of those most important challenges. Mexico, for example, made a crucial contribution to the fight against climate change through its remarkable leadership in Cancun last year. Brazil, Mexico, and Argentina in the G-20; Chile and Mexico in the OECD; Chile and Peru in the Trans-Pacific Partnership; and along with Mexico in APEC, these are all helping to build a foundation for balanced global growth, a transparent global economy, and broad-based opportunity. "

  31. March 9, 2011: Remarks at the First Senior Officials Meeting (SOM) for the Asia Pacific Economic Cooperation (APEC) Forum

   

  "The United States is also making important progress on the Trans-Pacific Partnership, which will bring together nine APEC economies in a cutting-edge, next generation trade deal, one that aims to eliminate all trade tariffs by 2015 while improving supply change, saving energy, enhancing business practices both through information technology and green technologies. To date, the TPP includes Brunei, Chile, New Zealand, Singapore, Australia, Malaysia, Peru, Vietnam and the United States."

  32. January 14, 2011: Inaugural Richard C. Holbrooke Lecture on a Broad Vision of U.S.-China Relations in the 21st Century

  "We are taking steps to ensure that our defense posture reflects the complex and evolving strategic environment in the region and we are working to ratify a free trade agreement with South Korea and pursuing a regional agreement through the Trans-Pacific Partnership to help create new opportunities for American companies and support new jobs here at home. Those goals will be front and center when we host the Asia-Pacific Economic Cooperation Forum in Hawaii later this year."

  33: November 7, 2010: Remarks at U.S. Trade Promotion Event

  "Now, we've seen how bilateral trade benefits both sides. Our challenge now is to broaden those benefits. That means we have to look for even more opportunities to increase trade and investment between us. And it means that we work harder to broaden the benefits of trade even beyond our two countries. Australia is an important partner in negotiating the ambitious new multilateral trade deal called the Trans Pacific Partnership. Over time, we hope to deliver a groundbreaking agreement that connects countries as diverse as Peru and Vietnam with America and Australia to create a new free trade zone that can galvanize commerce, competition, and growth across the entire Pacific region."

  34. November 7, 2010: Speech and Townterview with Australian Broadcasting Company

   

  "To continue this progress, we are both pressing ahead on something called the Trans-Pacific Partnership. It's an ambitious multilateral free trade agreement that would bring together many more nations of the Pacific Rim. Australia and the United States are helping to lead those negotiations and we're also working through APEC, which the United States will host in Hawaii in 2011. We see that as a pivotal year to drive progress on internal economic changes that will open more markets and make sure that any growth is more sustainable and inclusive. And finally, we believe that the United States and Australia have been at the forefront of organize the entire region for the future."

  35. November 5, 2010: Christchurch Trade Reception Hosted by the American Chamber of Commerce

  "We are looking for ways to broaden and deepen our economic ties and build on the strong foundation we already have. And we think that the Trans-Pacific Partnership is a very exciting opportunity. This multilateral free trade agreement would bring together nine countries located in the Asia Pacific region — New Zealand and the United States, Australia, Chile, Singapore, Brunei, Peru, Vietnam, and Malaysia. By eliminating most tariffs and other trade barriers, and embracing productive policies on competition, intellectual property, and government procurement, we can spur greater trade and integration not only among the participating countries, but as a spur to the entire region."

  36. November 4, 2010: Remarks With New Zealand Prime Minister John Phillip Key and New Zealand Foreign Minister Murray Stuart McCully

  " Well, let me say that we discussed at some length, both the foreign minister and I and then the prime minister and I, the way forward on trade. We are very committed to the Trans-Pacific Partnership, and New Zealand, again, is playing a leading role. And we want to expedite the negotiations as much as possible. So we are exploring ways that we can try to drive this agenda. I am absolutely convinced that opening up markets in Asia amongst all of us and doing so in a way that creates win-win situations so that people feel that trade is in their interests."

  37. November 3, 2010: Remarks at the Pratt & Whitney Trade Event

  "That is why the United States is very pleased by Malaysia's decision to join the negotiations for the Trans Pacific Strategic Economic Partnership. This regional trade agreement will promote shared success by expanding markets and building a level playing field for workers in every country that participates."

  38. November 2, 2010: Remarks with Malaysian Foreign Minister Anifah Aman

  "Finally, we are pleased that Malaysia joined last month's negotiations for the Trans-Pacific Partnership. That is a pact that would expand markets and create a level playing field for people in every country that does participate. I know there are tough issues to work out, as there always are with these agreements, but Malaysia's leadership in this region for greater economic growth is absolutely essential."

  39. November 2, 2010: Secretary Clinton's Meeting with Kuala Lumpur Embassy Staff and Their Families

  "And I think we have tremendous opportunities here. But I know when I leave tomorrow, the work to make those opportunities into realities falls to all of you. So I know a lot is expected of you, but we're going to be doing even more in Malaysia. We have a lot of plans for educational exchanges. We have some very exciting work on the Trans-Pacific Partnership, enhancing trade and investment (inaudible) that will promote closer cooperation."

  40. November 2, 2010: Townterview Hosted by Media Prima in Malaysia

  "So in our meetings with your government officials and even in my conversation with the prime minister earlier today, we of course talked about our bilateral relationship but we also talked about the role that Malaysia is playing in the Trans-Pacific Partnership, a new free trade agreement that will enhance market access, but also working to support Afghanistan and the people there with training and medical services."

  41. October 30, 2010:Remarks With Vietnamese Foreign Minister Pham Gia Khiem

  "I n trade, our two countries have already made great progress. Fifteen years ago, our bilateral trade was about $450 million. Last year it was more than $15 billion. And the foreign minister and the prime minister and I talked about how to expand this trade relationship, including through the Trans-Pacific Partnership. The United States, Vietnam, and seven other countries finished a third round of negotiations on the TPP this month and we hope that Vietnam can conclude it in internal process and announce its status as a full member of the partnership soon."

  42. October 28, 2010: America's Engagement in the Asia-Pacific

  "We are also pressing ahead with negotiations for the Trans-Pacific Partnership, an innovative, ambitious multilateral free trade agreement that would bring together nine Pacific Rim countries, including four new free trade partners for the United States, and potentially others in the future. 2011 will be a pivotal year for this agenda. Starting with the Korea Free Trade Agreement, continuing with the negotiation of the Trans-Pacific Partnership, working together for financial rebalancing at the G-20, and culminating at the APEC Leaders Summit in Hawaii, we have a historic chance to create broad, sustained, and balanced growth across the Asia Pacific and we intend to seize that."

  43. September 8, 2010: Remarks on United States Foreign Policy

  "On the economic front, we've expanded our relationship with APEC, which includes four of America's top trading partners and receives 60 percent of our exports. We want to realize the benefits from greater economic integration. In order to do that, we have to be willing to play. To this end, we are working to ratify a free trade agreement with South Korea, we're pursuing a regional agreement with the nations of the Trans-Pacific Partnership, and we know that that will help create new jobs and opportunities here at home."

  44. July 22, 2010: Remarks With Vietnam Deputy Prime Minister And Foreign Minister Pham Gia Khiem

  "And I am very much supportive of Vietnam's participation as a full member in the Trans-Pacific Partnership. As Vietnam embarks on labor and other reforms, the American businesses that are investing in Vietnam can provide expertise that will aid Vietnam's economic and infrastructure development."

  45. January 12, 2010: Remarks on Regional Architecture in Asia: Principles and Priorities

  "In addition, the United States is engaging in the Trans-Pacific Partnership trade negotiations as a mechanism for improving linkages among many of the major Asia-Pacific economies. And to build on political progress, we must support efforts to protect human rights and promote open societies."

  *  *  *

  We leave it to NBC News' Chuck Todd to perfectly syum it all up…

   

  Coming out against TPP has all the trappings of Clinton trying to placate labor and keep them from endorsing Sanders

  — Chuck Todd (@chucktodd) October 7, 2015

  

  

  

  

  

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