‘Is Trump About to Cause Another Crisis?’: 2008 Could Be Eclipsed As Bank Restrictions Eliminated

Beware of what may be coming next. We already know the establishment has a plan to blame President Trump for the next financial crisis, and now there are moves being made that will support that narrative.
After the 2008 fiasco, a spotlight on Wall Street misbehavior and some weak, but better-than-nothing regulations were put on the industry in the hopes of preventing another string of bank failures and crippling economic disasters.
But as the system teeters on edge and prepares to endure the backlash of increased rates at the Fed, Trump is also taking off the shackles that have been put in place by the Dodd-Frank Act which instituted certain protections for consumers, including a requirement that pensioners don’t have their nest egg devoured, etc.
For the tens of millions of baby boomer retirees and aging pensioners, the social security net is all they’ve got to count on, apart from a few debt-saddled kids who have hardly been able to save a dime under eight years of Obama.

This post was published at shtfplan on February 3rd, 2017.

World Leaders “Stunned” By Trump’s Bluntness

As President Trump drops tape (and tweet) bombs left, right, and center; often saying exactly what he is thinking, it appears the world’s leaders (and establishmentarians) are “shocked” at his inconvenient truthiness. As Tim Bale, politics professor at Queen Mary University of London, said, reflecting on Brexit concerns,
“…our reliance on the United States, in normal times, wouldn’t worry too many people… But Donald Trump doesn’t seem to be a normal president.”

This post was published at Zero Hedge on Feb 3, 2017.

The Purpose of Decadence and the Pleasures of Coercion

I guess you’ve noticed by now that the center didn’t hold. Instead of a secure platform for political premises like tradition, precedent, rationality, and cultural norms, you see a fiery maw of sheer emotion between the camps of the so-called Left and the so-called Right.
I say so-called because the campus Left and the Trump Right have escaped the categorical corrals they formerly occupied. And they may have left their customary official parties stranded and dying too. It may be fatuous to say whether that is a good or bad thing; it just is, for the moment. They are two halves of a polity so broken and so far apart that it is also hard to see how they might ever come back together into a consensus about how a society might operate successfully.
Not having a consensus – some substantial overlap between circles of perspective – it’s not surprising that America can’t construct a coherent view of what is happening, or make a plan for what to do about it. Mainly what’s happening is the running down of fossil fuel based techno-industrial economies, and the main symptom is falling standards of living, with fading prospects for future happiness and security.

This post was published at Wall Street Examiner by James Howard Kunstler via February 3, 2017.

More on Complexity Economics

In last weekend’s Thoughts from the Frontline, I talked about how the economics profession in general and central bankers in particular have consistently failed with their economic projections, and I pointed to the need to deepen our understanding of complex systems behavior. I said that we need to marry complex systems theory and information theory in order to establish a new basis for analyzing the economy and creating economic policy.
I couldn’t have been happier, then, when the new issue of Michael Lewitt’s The Credit Strategist popped into my inbox this morning and I found him addressing the same issue. Michael leads off with a discussion of the views of William White, formerly with the Bank for International Settlements (BIS) and now chairman of the Economic and Development Review Committee at the OECD in Paris. (He also spoke at our Strategic Investment Conference last year.)
White, too, has argued that ‘the fundamental analytical mistake has been to model the economy as an understandable and controllable machine rather than as a complex, adaptive system,’ and Lewitt certainly concurs.
OK, so we all agree. But I have to confess, I wasn’t quite satisfied with my own attempt last week to point to a new path forward for economics. It’s one thing to say the economy is complex and nonlinear and another to translate that fundamental understanding into actionable analysis. And in today’s Outside the Box, I find both Lewitt and White struggling similarly.

This post was published at Mauldin Economics on FEBRUARY 3, 2017.

Despite Dismal Jobs Data, Dollar Jumps On Fed’s Williams Headlines

Disappointing earnings growth this morning seemed to convince traders that The Fed would likely be on hold through March (and The Fed’s statement earlier in the week did nothing to help_ but after tumbling all morning, the dollar is now jumping higher because The Fed’s John Williams says he “sees some arguments to raise rates in March.”

This post was published at Zero Hedge on Feb 3, 2017.

Leading Indicators Point to Improving Economy

Given the surge in leading economic data, those awaiting an imminent recession or economic downturn in the U. S. may have a while longer to wait, said Kurt Kallus, author of Exec Spec and a frequent guest on our FS Insider podcast.
Mid-Cycle Recovery Underway
Kallaus has made several correct calls, including his prediction in 2015 that the broad U. S. stock market averages, like the Dow Jones Industrial Average and the S&P 500, would still have 2 to 3 years left to run, which has turned out correct. Now that we’re coming in on that time, should investors think about changing course?
‘Economic trends are not reversed because of time, but because of excesses,’ he stated. ‘There’s not an expiration date on a recovery. You look for either overheating or overcooling, and neither extreme has been on the horizon for years.’
He continues to be optimistic that we’ll see growth over 2 percent, and that we’re probably in the mid-stage of the bull market based on leading indicators.

This post was published at FinancialSense on 02/03/2017.

Don’t Blame Trump When the World Ends

Alien Economics
There was, indeed, a time when clear thinking and lucid communication via the written word were held in high regard. As far as we can tell, this wonderful epoch concluded in 1936. Everything since has been tortured with varying degrees of gobbledygook.
One should probably not be overly surprised that the abominable statist rag Time Magazine is fulsomely praising Keynes’ nigh unreadable tome. We too suspect that this book has actually lowered the planet-wide IQ – in fact, similar to Marx’ Das Kapital, it has done permanent damage. We have to admit that we have read it ourselves (and what a slog it was!) – contrary to Keynes himself, who once published a scathing critique of Mises’ Theory of Money and Credit without reading even one word of it, we prefer to actually read what those we criticize have published. In the first German edition of the book, Keynes freely admitted that his policy recommendations were probably more useful for a totalitarian State than a free society (i.e., it would be easier to implement them, because of their coercive nature). The biggest problem is though that most of the book is a rehash of hoary inflationist ideas that were already long refuted by the time of its publication. The handful of original ideas Keynes contributed didn’t constitute good economic theory either. Moreover, the book is riddled with contradictions and is an extremely tedious read to boot. At best we can recommend it as symptomatic treatment for insomnia. However, it did provide the State with a pseudo-scientific fig leaf for central planning and interventionism, which in turn provides thousands of mediocre economists with an income. This is the reason why it was and continues to be praised to the rafters by assorted etatistes. It is at this point that we are often reminded by people (who usually haven’t read it) that ‘not all the ideas in the book are bad’. Well, you don’t have to take our word for it. If you don’t want to go through the painful effort of reading it, you might want to look at Henry Hazlitt’s detailed critique instead, which is available for free here: The Failure of the ‘New’ Economics (pdf). It the only way to have fun reading Keynes’ book. Hazlitt is taking it apart mercilessly with impeccable logic. In addition, he provides the reader with a few enlightening excursions, such as e.g. a disquisition on mathematical economics that is one of the best take-downs of this barren, physics envy – driven pseudo – intellectual wanking we have ever seen.
The fall from grace was triggered by the 1936 publication of John Maynard Keynes’ The General Theory of Employment, Interest and Money. The book is rigorously indecipherable. What’s more, it has the ill-effect of making those who read it dumber [ed note: not all of them we hope! If you possess the required intellectual armor, you may emerge baffled, but still sane and without IQ losses. PT].
Nonetheless, politicians and establishment economists remain enamored with Keynes’ gibberish. For it offers an academic rationale for governments to do what they love to do most – borrow money and spend it on inane programs.

This post was published at Acting-Man on February 4, 2017.

There’s a Lot More at Stake in this IPO than Just Toxic Financials

Silicon Valley hubris seeks third-class vote-less stockholder. Snap Inc., the parent company of SnapChat, filed for an IPO on Thursday. The filing revealed just how toxic this deal is going to be, not just from a financial point of view – a risk IPO investors are willing to take in order to grab the next Google or Facebook – but from a corporate governance and shareholder-rights point of view.
This has implications far beyond Snap: If Snap’s current owners can pull it off and get away with it, other companies will start doing the same thing, and it will forever change what it means to be a screwed stockholder.
Voting rights have already been diluted as our Silicon Valley heroes, such as Google and Facebook, have made a joke out of their common stockholders, but they still get to vote, even if in ludicrously diluted form.

This post was published at Wolf Street on Feb 3, 2017.

A-D Line New High

When the NYSE’s A-D Line hits a new high, it conveys a clear message that liquidity is plentiful. The market might encounter other types of problems, such as investors’ emotions suddenly swinging, or a big news event rocking the market. But if liquidity is strong, the market can more easily recover from such problems.
Interview Tom McClellan: Positive Market Outlook Long-Term
The DJIA has been in a concerted uptrend since making a final corrective low in February 2016. The DJIA’s upward progress has been in fits and starts, while the NYSE’s A-D Line has made a more steady uptrend. At several times, there were disagreements between the A-D Line making higher highs while the DJIA made lower highs, and in each case, the A-D Line turned out to be right about where both were going.
Trouble has historically come when there is a bearish divergence between the A-D Line and the DJIA. Here are some notable examples:

This post was published at FinancialSense on 02/03/2017.

Utah Bill Sets Stage For State Gold Depository, Further Encourages Use Of Metals As Money

A bill introduced in the Utah legislature would build on the state’s Legal Tender Act, creating a foundation for further action to encourage the use of gold and silver as money, and take another step toward breaking the Federal Reserve’s monopoly on money.
Rep. Ken Ivory (R-West Jordan) introduced House Bill 224 (HB224) on Jan. 27. The legislation would add several provisions to state law designed to encourage the use of gold and silver as legal tender. Passage would set the stage for expansion of gold repositories in the state and authorize further study on several sound money policies.
Specifically, HB224 would authorize the investment of public funds in specie legal tender held in a commercial specie repository. Under existing code, ‘specie legal tender’ means gold or silver coin and bullion. ‘Commercial specie repository’ means an institution that holds or receives deposits of specie legal tender that is located within the state. Practically speaking, passage would give the state the option to hold funds in gold and silver instead of Federal Reserve notes.
The legislation would also direct the State Money Management Council to make rules governing quality criteria for a commercial specie repository, in consultation with the state auditor.


This post was published at Zero Hedge on Feb 3, 2017.

Snap IPO: A Lot More at Stake than Just Toxic Financials

Silicon Valley hubris seeks third-class vote-less stockholder.
Snap Inc., the parent company of SnapChat, filed for an IPO on Thursday. The filing revealed just how toxic this deal is going to be, not just from a financial point of view – a risk IPO investors are willing to take in order to grab the next Google or Facebook – but from a corporate governance and shareholder-rights point of view.
This has implications far beyond Snap: If Snap’s current owners can pull it off and get away with it, other companies will start doing the same thing, and it will forever change what it means to be a screwed stockholder.
Voting rights have already been diluted as our Silicon Valley heroes, such as Google and Facebook, have made a joke out their common shareholders, but they still get to vote, even if in ludicrously diluted form.
But Snap will take it to the ultimate level: new shareholders will get no voting rights at all. Zilch. That’s a first in the history of US IPOs. These will be the three classes of Snap shares:
Owners of Class C common stock, which include co-founders Evan Spiegel and Robert Murphy, will get 10 votes per share.

This post was published at Wolf Street on Feb 3, 2017.

Utah Getting Ready To Dump The Fed Dollar & Make Gold & Silver Legal Tender – Episode 1195a

The following video was published by X22Report on Feb 3, 2017
Job numbers are out and they are just as manipulated as before, not much has changed. Unemployment rises to 4.8%.”Not In The Labor Force” Plunge By A Record 736,000. Employment stalls. Deutsche Bank is getting to layoff thousands of workers. Factory orders are at the same levels as 2006 which puts the trend in recession levels. Trump signs executive order rolling back Dodd-Frank legislation. Is Trump working for the banks? Utah pushes bill that will allow gold and silver to become legal tender bypassing the Fed Dollar

Price of Gold Today Dips but Will Rise 15% Thanks to Donald Trump

Despite the price of gold today (Friday, Feb. 3) falling 0.1% to $1,218 this morning, the metal is about to cap off a big weekly gain thanks to the recent craziness in the White House.
In the second week with Donald Trump in the oval office, there’s been no shortage of political events bringing instability and volatility to the markets.
And this is likely just the beginning.
The new president has already signed no less than 19 executive orders, impacting many aspects of Americans’ and non-Americans’ lives.
Perhaps the most controversial is the temporary ban on people entering the United States from one of seven majority-Muslim nations. This led to large protests, scores of people unexpectedly stuck in foreign and U. S. airports, and the firing of the acting attorney general for defying the travel ban.
Layered on top this were executive orders to build the Mexican border wall, rebuild the military, and reorganize the National and Homeland Security Councils.

This post was published at Wall Street Examiner on February 3, 2017.

A New Problem For Mexico: Consumer Confidence Crashes To Record Low

While the biggest threat facing Mexico, and its unpopular president Enrique Pena Nieto, in the past month has been President Trump’s insistence on building a “Massive Wall”, which Mexico would pay for, as well as Trump’s threats of renegotiating NAFTA, today we got a fresh reminder that America’s neighbor to the south has another looming problem: a rapidly deteriorating economy coupled with surging inflation on the back of the recent 20% price hike for gasoline, which culminated in a record crash in Mexican consumer confidence.
While the whisper number was 84.9, and the survey said 83.5 the actual print came in at an unprecedented 68.5 (69.3 seasonally adjusted) the lowest print on record. Consumer confidence posted a broad based and extraordinarily large 17.9% mom decline in January (-25.7% yoy), and has now declined in 7 of the past 8 months. The aggregate consumer confidence is at the weakest level since the series began to be reported in April 2011.

This post was published at Zero Hedge on Feb 3, 2017.

Payrolls in U.S. Increase 227,000 While Wage Growth Weakens To Below Level At End Of Great Recession

This is a syndicated repost courtesy of Confounded Interest. To view original, click here. Reposted with permission.
The January 2017 jobs report is out from the Bureau of Labor Statistics (BLS).

The highlights?
* Total nonfarm payroll employment rose by 227,000 in January. Employment increased in retail trade, construction, and financial activities.
* Retail trade employment increased by 46,000 over the month and by 229,000 over the year. Three industries added jobs in January – clothing and clothing accessories stores ( 18,000), electronics and appliance stores ( 8,000), and furniture and home furnishings stores ( 6,000).

This post was published at Wall Street Examiner by Anthony B. Sanders ‘ February 3, 2017.