It is Time to Knock off the Bullshit About Surveillance for Terrorism

The worldwide collection of phone calls, emails, text messages and our total loss of privacy is all about taxes – NOT terrorism. With all this power and the demand that encryption be outlawed, not any of this surveillance has stopped one terrorist act. There was the Boston bombers, two kids using cell phones. They didn’t catch that either. Then there was the two guys dressing up as women who attacked the NSA itself. They didn’t know about that. Then Charlie Hebdo, that too was a surprise. Now we have an all out assault on civilians in Paris carried out by 3 suicide squads and again they were clueless. This surveillance does not work because they are really monitoring the people for taxes or they would not be storing everything forever.

This post was published at Armstrong Economics on November 15, 2015.

Investor Fears Spike as Noose Tightens Around Catalonia’s Economy

Dream of Independence Descends into Nightmare By Don Quijones, Spain & Mexico, editor at WOLF STREET.
Investor fears are on the rise south of the Pyrenees as Catalonia, Spain’s richest region (pound for pound), descends into political chaos and Spain’s central government threatens to cut off funding to the region. ‘This is a genuine economic tragedy’ that ‘could ruin Catalonia,’ laments Josep Bou, the president of Catalonia’s Business Association and unapologetic unionist. ‘There is a complete lack of governance’ and Catalan society is becoming increasingly ‘divided’ and ‘polarized.’
Junk Bond Status The rating agency Fitch heaped further pressure on Catalonia by downgradingits credit rating from BBB- to junk-bond status BB after the region’s parliament approved a resolution this week to begin the separation from Spain. The historic vote gives the regional assembly 30 days to legislate for two pillars of a putative new state – Catalan tax and social security authorities. The vote also opens the door to direct political disobedience of Spain’s Constitutional Tribunal, which this week unanimously agreed to suspend the Catalan independent process.

This post was published at Wolf Street by Don Quijones ‘ November 14, 2015.

Rethinking Money As The Greater Depression Deepens

Submitted by Doug Casey via,
We talk a lot in these pages about what to do with one’s money, but I question whether most subscribers (forget about the public at large) have an adequate grasp of the basics. Without it, much of what we say may seem capricious or outlandish, crazy ideas readers tolerate only because we’ve been so right about the big trends. But the basics in speculating and investing are like the basics in martial arts: Just remembering them isn’t enough; they need to be second nature. That means reviewing and practicing over and over.
It’s not an accident that we usually make good investment calls; the selections arise from a constant awareness of the basics. So I want to briefly review those fundamentals. Let’s start with gold. We’re very gold-oriented around here.
You undoubtedly have a good position in gold. Many of your friends are aware that you’re a gold bug, and more than a few of them question your wisdom. Are you able to give them a succinct and cogent explanation not just for why gold is cyclically a good speculation, but why it’s money? I’ll wager the answer in many cases is, ‘No.’
I say that because when I give a speech, I often offer a prize to the audience member who can tell me the five classical reasons gold is the best money. Quickly now; what are they? Can’t recall them? Read on, and this time, burn them into your memory.

This post was published at Zero Hedge on 11/14/2015 –.

The Gig Economy Is the New Normal

An already-confusing employment environment grew even more complicated this past week. Many readers responded to my ‘Crime in the Jobs Report’ letter with their own stories. Some confirmed what I wrote, while others disputed it. Some of the stories I read from readers who are stuck far from where they want to be in this job market were very moving. I think everyone agrees the labor outlook is uncertain. I sense a lot of nervousness, even from those who have secure jobs that pay well. In today’s letter, I’m going to respond to some of the observations and data that came in this week on employment.
As we will see, we have a right to be nervous. Big changes in the employment world are happening, and we don’t yet know how they will affect us individually. Analysts like me can say we’ll muddle through, but we must remember that not everyone will muddle at the same pace.
We will also take a look today at a growing new phenomenon: the gig economy. (I should note that today’s letter is a little shorter. I am trying to reduce the word length ofThoughts from the Frontline.)

This post was published at Mauldin Economics on NOVEMBER 14, 2015.

Now Flying Below ‘Stall Speed’

Recession Watch: Looking at Retail Sales for Clues. By Larry Kummer, editor of the Fabius Maximus website: We watch the trend in retail sales because it shows how shocks in the US economy’s cyclical industries ripple outwards, first slowing sales growth – then pulling it down.
In April 2000 sales stalled; in March 2001 the recession began. There was no plateau before the Great Recession; sales peaked one month before the recession began. And now, according to the Commerce Department, October 2015 was the third month of flat retail sales; they’re down 1% (seasonally adjusted annual rate) since July excluding autos. Autos have been one of the strongest industries during the recovery. Excluding autos, retail sales are down year-over-year in real terms.

This post was published at Wolf Street by Larry Kummer ‘ November 13, 2015.

A Sense of Accomplishment

One of the phrases we hear today is this: “People have no pride in their work anymore.” There is a sense of loss in our era. The erosion of standards of craftsmanship represents an even greater moral erosion in our society.
Unquestionably, the free market system has produced remarkable examples of productivity. There is no way that we can even compare an inexpensive hand-held electronic calculator with the adding machines that were universal a decade ago. There is no way that we can compare a home entertainment center—stereo set, color television, TV games, etc.-with anything that existed prior to the 1920’s. Kings did not have anything like the gadgets that average American buyers consider to be normal. The high level of craftsmanship in a 1908 car, which in its day cost two or three times a typical family’s annual income, did not produce a car as reliable, comfortable, and inexpensive to operate as any Detroit assembly line can produce today. Mass production techniques have indeed produced miracles.
Nevertheless, there are serious problems with any system of production that men can devise, since the tasks of dominion are always costly, one way or another. The world in its fallen state resists our efforts to subdue it, and this includes ourselves. We are rebellious, too. We resent being subdued. We resent the organizational forms which call forth our labors. The problem with today’s production system, from a psychological and emotional point of view, is its impersonalization. This is as true in a socialist country as in a capitalist one. In fact, it is probably more true in a socialist country, since the deadening hand of bureaucracy has less competition under socialism.
There is a famous section in the early pages of Adam Smith’s Wealth of Nations (1776) which describes the amazing productivity of a then-modern pin-making operation. A single pin-maker could scarcely produce one pin a day without the modern division of labor, but a team of ten using specialized equipment could, in Smith’s day, produce close to 50,000 pins in one day, or about 5,000 per man per day. Obviously, this productivity is of great benefit to the consumer of pins. The average man can buy all that he can use.

This post was published at Gary North on Gary North – November 12, 2015.

Rise of the Stateless Nations

In the year 1800, the average wage was, adjusted for inflation, $3 per day.
Much has changed since then.
‘In the past 30 years,’ Professor Deirdre McCloskey said in a recent Learn Liberty video, ‘the percentage of people who are that badly off in the world has fallen by half. It’s been halved. Things are going well.’
Today, in America, the average person makes $130 a day. A substantial rise.
‘What a transformation!’ says Deirdre. ‘It’s just incredible. We had earned the $3 a day forever. If you want a short economic history, since the beginning of time, it was $3 a day going along like this…’

This post was published at Laissez Faire on Nov 13, 2015.

Senate Quietly Passes Bipartisan Bill To Allow Conquest Of Space

Submitted by Deirdre Fulton via,
In a bipartisan bid to encourage commercial exploitation of outer space, the U. S. Senate this week unanimously passed the Space Act of 2015, which grants U. S. citizens or corporations the right to legally claim non-living natural resources – including water and minerals – mined in the final frontier.
The legislation – described by IGN’s Jenna Pitcher as ‘a celestial ‘Finders Keepers’ law’ – could be a direct affront to an international treaty that bars nations from owning property in space. The bill will now be sent back to the House of Representatives, which is expected to approve the changes, and then on to President Barack Obama for his anticipated signature.
Pitcher continued:
The new Space Act allows ventures to keep and sell any natural resources mined on planets, asteroids and other celestial bodies. Commercial operations could reap trillions of dollars from mining precious metals like platinum, common metallic elements such as iron, and water, the ‘oil of space.’ The vote was celebrated by the Google-backed ‘asteroid mining company’ Planetary Resources, which lobbied hard for the legislation and says ‘the market in space is ripe to bloom.’

This post was published at Zero Hedge on 11/14/2015.

Retail Sales Are Crashing – Housing Sales Are Next

Flippers are getting stuck with houses they can’t flip for a profit. Hedge funds have stopped buying and have begun selling. Anyone dumb enough to have been lured into this market in the last few years will be underwater in no time. The foreclosure train will be leaving the station shortly. We’ve been here before. It was ten years ago. Some people never learn. – The Burning Platform
Last week in the stock market featured several ‘cliff-dive’ drops in retail stocks: Macy’s, Nordstroms, Advance Auto Parts. The middle class (yes, ‘middle class’ includes the wannabees living beyond their means in million-dollar ‘mcmansions’) is tapped out of disposable income and has run up against is ability to take on more debt. The Nordstrom’s report is what has really freaked out economic analysts: LINK.
The housing market will show the affects of a rapidly deteriorating economy next. I noticed something had changed in the housing market in mid-summer based on all of the available data I analyze. Interestingly, the CEO of Redfin agrees with me: Something We’ve Seen In The Last Month Should Make You Worried About The Housing Market.
I noticed that the number of listings all around Denver began to increase rapidly. The NAR’s manipulated ‘months supply’ metric is lagged by a few months and does not pick up big increases in listings right away. I noticed this especially in the higher-end areas all around Denver. My observations have been confirmed in San Francisco: LINK and in New York: LINK and NYC/Washington DC: LINK.

This post was published at Investment Research Dynamics on November 14, 2015.

The March Of The Cry-Bullies

Submitted by Ben Garrison via,
I like the fact that college students are angry enough to revolt against the massive debt being piled on their backs just because they want to get a college degree and a good job. They should be protesting because the expenses involved have gotten ridiculous. Then, if they do graduate, a great many of them can’t find employment. Too many are forced to remain living with their parents without a chance at the American Dream, which has now become just that – a dream.
Unfortunately, too many of these young people are also upset about ridiculous things. They are part of a hypersensitive, hyper-politically correct group known as ‘Social Justice Warriors.’

This post was published at Zero Hedge on 11/14/2015.

2008 Flashback: The Risk Of Redefining Recession

Submitted by Lakshman Achuthan via The Economic Cycle Research Institute,
Ignorance about recessions has taken hold because of a simplistic idea that a recession is two successive quarterly declines in GDP or, more broadly, a situation where we see some, but not all, of the typical markers of recession.
Recession? Or just a slowdown? Some will tell you it doesn’t much matter – that it’s a distinction without a difference. Nothing could be further from the truth – or as dangerous a delusion.
Ignorance about recessions has taken hold because of a simplistic idea that a recession is two successive quarterly declines in growth domestic product, a measure of the nation’s output.
The idea originated in a 1974 New York Times article by Julius Shiskin, who provided a laundry list of recession-spotting rules of thumb, including two down quarters of GDP. Over the years the rest of his rules somehow dropped away, leaving behind only “two down quarters of GDP.”
Like most rules of thumb, it’s far from perfect. It failed in the 2001 recession, for example. At the time and until July 2002, data showed just one down quarter of GDP, leading policy makers to claim there had been no recession. Yet, later that month, revisions showed GDP down for three straight quarters. Complicating matters further, with the benefit of time, we now know that GDP actually zigzagged between negative and positive readings, never showing two negative quarters in a row.
The far more important issue in 2001 was the loss of 2.7 million jobs – more than in any postwar recession. Even taking into account labor force growth, those job losses were greater than in most recessions over the past 50 years.

This post was published at Zero Hedge on 11/14/2015 –.

The Week in Review: November 14, 2015

At our Dallas-Ft. Worth Mises Circle, we discussed the dangers ofauthoritarian PC culture and the infantilization of American universities. This past week, this issue was driven to the forefront of national conversation. Cheered on by their absurdly leftist professors, we have watched a movement sparked by claims of racial intolerance devolve into petulant demands for more free stuff and explicit attacks on free speech. If there is a silver lining, hopefully these campus demonstrations will awaken more people to the importance of eliminating the state from education altogether.

This post was published at Ludwig von Mises Institute on NOVEMBER 14, 2015.

The Cost Of China’s “Manipulated Market Stability” May Be Too High, BofAML Warns

In August, we learned that even spending CNY1 trillion in plunge protection to prop up an equity market reeling from the unwind of a bevy of backdoor margin lending channels was woefully insufficient. The reason (or one of the reasons): the millions of semi-literate retail investors, housewives, and farmers that had poured money into the market and had previously been inclined to buy every last dip were suddenly selling every last rip in a desperate attempt to recoup their savings which had just been vaporized before their very eyes.
Ultimately, once Beijing had tried halting three quarters of the market and then throwing more than a trillion yuan at the ‘problem’, Chinese authorities just started arresting people. First short-sellers, then brokers, then journalists, and finally, just plain old sellers.
True, that’s not good for China’s international reputation from a kind of human rights/freedom of speech perspective, but when it comes to showing the world that you’re committed to liberalizing capital markets, it sure beats effectively nationalizing a whole collection of equities and halting 75% of trading. Not to mention the fact that when you’re trying to execute a ‘controlled’ currency deval on your own terms and there’s already quite a bit of downward pressure, it’s not entirely clear that you want to be printing too many more trillions of yuan.
Of course even though China may have succeeded in ‘arresting’ some of the pressure with its ‘kill the chicken to scare the monkey’ witch hunt and thereby might possibly have avoided having to dump still more money into buying shares, to a certain extent the reputational damage was done from June-July when CSRC bought some CNY900 billion in shares. As we’ve put it before, that falls outside the bounds of manipulated market decorum even in a world that’s used to central banks providing plunge protection.

This post was published at Zero Hedge on 11/14/2015 –.

IMF’s Lagarde Anoints Chinese Yuan. Will it Now Demolish the ‘Dollar Hegemony?’

IMF boss Christine Lagarde is gung-ho about it. IMF staff is too. The Executive Board will consider it on November 30 and in all likelihood approve it. It will take effect in October 2016. Then it’s a done deal: the Chinese yuan will be added to the IMF’s currency basket, the Special Drawing Rights (SDR). A step toward becoming a major global reserve currency.
IMF staff had determined that the yuan meets the requirements of being a ‘freely usable’ currency, Lagarde said in a statement, so a currency that is ”widely used’ for international transactions and ‘widely traded’ in the principal foreign exchange markets.’
China also overcame other hurdles the IMF had put before it, after numerous reforms to liberalize its currency and credit markets and offer more transparency. The IMF’s Executive Board has the final say, but Lagarde will chair the meeting. And the rubber stamps are lined up on the conference room table.
Some countries, including France and Britain, have already expressed support for the change. According to Reuters, a Treasury spokesperson said the US government has always backed the yuan’s inclusion if it met the IMF’s criteria, and would ‘review the IMF’s paper in that light.’

This post was published at Wolf Street by Wolf Richter ‘ November 14, 2015.

14/11/15: My Comment on Portuguese Political Crisis

Two comments from myself on the topic of Portugal’s political crisis effect on country macroeconomic and fiscal positioning: Full comment in English:
Do you think the financial markets and the debt agencies will move its focus from Greece to Portugal now and later on for Spain near or after theDecember 20 elections?
The latest euro area ‘periphery’ political crisis – the collapse of the Centre-Right Government in Portugal – sets the stage for a potential replay of the logistics of the Greek crisis of Summer 2015 scenario.

This post was published at True Economics on Saturday, November 14, 2015.

Who Owns the Fed?

The Federal Reserve is not owned by foreign banks, the Queen of England, the Rothschilds, or whomever. The shareholders are American banks. However, the Fed does pay 6% dividends to the private banks that own the shares. The Political Research Associates is a far more reliable source than the people who use bogus books with an agenda. We could transfer the shareholding to the Treasury, but that would only tempt the Executive who would raise or lower rates for political purposes. We could float the Fed and make their share public on the NYSE, which would require full disclosure. That is one possible solution.
Right now, a 6% fixed dividend is a great investment. It is way out of line with negative rates today.
Here is a list of the shareholders in the New York Federal Reserve:
Chase Manhatten Bank Citibank Morgan Guaranty Trust Company Fleet Bank Bankers Trust Bank of New York Marine Midland Bank, and Summit Bank SOURCE

This post was published at Armstrong Economics on November 14, 2015.

Russian Track And Field Athletes Banned From International Competition

Earlier this week, the ‘independent’ anti-doping commission WADA found that Russia engaged in state-sponsored doping and more importantly, recommended that Russia’s track and field athletes be suspended from Olympic competition in 2016. Apparently, the corruption was ‘on a whole different scale’ that involved extorting athletes and ultimately ended up “significantly changing the actual results and final standings of international athletics competitions.”
The report includes allegations that Russian security services interfered with the Moscow doping lab ahead of the Sochi Winter Olympics as part of a conspiracy that involved all levels of Russian sport. During the Sochi Games, Russia pulled off a stunning turnaround from its performance in Vancouver in 2010, where it won 3 gold medals and 15 overall. In 2014 Russia won 13 gold medals and 33 overall, an unprecedented level of improvement.
As we noted on Monday, ‘in the event that IAAF were to adopt the commission’s recommendation, Russia could be excluded from major competitions including the Olympics.’
Well, as it turns out, that’s exactly what happened because as WSJ reports, ‘track and field’s world governing body provisionally suspended Russia’s athletes from international competition indefinitely,’ late on Friday evening. Here’s more:
The suspension, which was expected, was approved by a vote of 22 to 1 by the international federation’s ruling council and takes effect immediately. It will prevent Russian track-and-field athletes from participating in all international events, including – as of now – the 2016 Rio Olympics in August.
While condemning the Russians, Sebastian Coe, the newly elected president of the IAAF, said the federation had to work to fix a broken system.
‘We discussed and agreed that the whole system has failed the athletes, not just in Russia, but around the world,’ Mr. Coe’s statement read. ‘This has been a shameful wake-up call and we are clear that cheating at any level will not be tolerated.’

This post was published at Zero Hedge on 11/14/2015.

Gold And Silver – Sellers Remain In Control

This week, we are ending our commentary portion, probably until January due to a pressing time commitment for the next several weeks. Starting from next week, we will post charts and chart comments only on this site. If you are not a subscriber and still want to read the chart comments, you will have to subscribe in order to follow the updates.
This is not an effort to increase subscribers, rather, it is the only viable way because the sites to which our articles are submitted prefer some accompanying commentary, in addition to the charts. We do not use subscriber e-mails for any purpose other than submitting our commentaries directly to them. Subscriber privacy is respected. Besides, from our point of view, the charts tell the most compelling story.
The continuing PM down trend is obvious, but sometimes adding a simple line to connect the swing highs and lows can alter what the eye sees. As a consequence, we were able to focus on reaction rallies 1, 2, and 3 for a comparison and assessment, as explained on the chart.
Typically, when a trend ends, there is often some form of dramatic price/volume activity that stands out. An example would be seen in the activity on the left portion of the chart. Price declined sharply into the June lows and had the look of a potential end to the trend. What is missing and explains why this was not an end to the down trend were two factors: lack of heavy volume at/near the lows, your typical sign of change from weak hands into strong hands, and the initial reaction rally off of the low was not that strong.
What you are seeing in gold is a steady decline with no apparent panicking to form the basis for a bottom. The very small range of last week is the antithesis of a panic. It shows that buyers were keeping sellers in check after a sharp decline. Sellers lost control, at least for the week. This opens the door for buyers to begin a reaction rally, and that remains to be seen.

This post was published at Edge Trader Plus on November 14, 2015.