UKIP Wants Nigel Farage Back Claiming May Has Betrayed BREXIT

Theresa May’ Florence speech is being seen by many as a betrayal of BREXIT. Instead of getting on with it, she has said that there will be a longer transition period even two years beyond 2019 into 2021. She said that Europeans will still be able to come and work in Britain into 2021 but under a ‘registration system’ that many fear will still allow terrorists to enter from Europe.
Prime Minister May said that the temporary transitional arrangements ‘will not go on for ever’and will end around two years after Britain leaves the European Union (EU) in 2019. She made it clear that ‘[d]uring the implementation period, people will continue to be able to come and live and work in the UK.’ She did also say that ‘[t]here will be a registration system, an essential preparation for the new regime.’

This post was published at Armstrong Economics on Sep 24, 2017.

Deutsche Bank: “The Fed’s ‘Transparency’ Killed Long-Term Investing”

Two weeks ago, one of our favorite derivatives strategists, BofA Barnaby Martin wrote something we have said for years: “QE has been the most effective way for CBs to ‘sell vol’”, arguing that accommodative monetary policies across the globe amid QE have “clearly supported a strong rebound in fixed income markets.” This should not be a surprise: as Martin calculated, there is now some $51 trillion at risk should rates vol spike, not to mention countless housing bubbles that have been created since the financial crisis where the bulk of middle class wealth has been parked, which in turn have trapped central banks, preventing them from undoing nearly a decade of unprecedented monetary largesse that has pumped over $15 trillion in central bank liquidity.

The BofA strategist showed that every time the Fed embarked on the different phases of its QE program, credit implied vols declined significantly, while during periods of no monetary easing or when the market started pricing the possibility of easing policy removal (tapering tantrum and the subsequent tapering phase) implied vols advanced.

This post was published at Zero Hedge on Sep 23, 2017.

Week in Review: September 23, 2017

Almost a decade later, the Federal Reserve this week announced it will begin reversing quantitative easing. Slowly. Very slowly. The balance sheet currently stands at $4.5 trillion and they will begin allowing $10 billion in assets to roll off their sheets next month. Given the unprecedented nature of QE, even this modest reduction has many market observers on edge. Of course, the fallout from the Fed’s actions are still being felt, while the Trump Treasury is making threats that it would have disastrous consequences if acted on.

This post was published at Ludwig von Mises Institute on September 23, 2017.

Trump Sports Feud Escalates: Demands NFL Chief “Tells Them To Stand”

Update 4: In the latest escalation in his feud with the NFL, Trump just (re)blasted Commission Roger Goodell in a tweet, saying he was trying to “justify” the actions of players who don’t stand for the National Anthem. His tweet was sent in response to a statement Goodell released earlier today criticizing Trump for “disrespecting” NFL owners by suggesting they fire players for protesting.
Roger Goodell of NFL just put out a statement trying to justify the total disrespect certain players show to our country. Tell them to stand!
— Donald J. Trump (@realDonaldTrump) September 23, 2017

Update 3: As the feud between the president Stephen Curry intensifies, on Saturday afternoon his team the Golden State Warriors, stood with him and announced they will not be attending the White House visit at all. In a statement, the Warriors said that “while we intended to meet as a team at the first opportunity we had this morning to collaboratively discuss a potential visit to the White House,” the statement read, “we accept President Trump has made it clear that we are not invited.”
It added that “we believe there is nothing more American than our citizens having the right to express themselves freely on matters important to them,” the statement continued. “We’re disappointed that we did not have an opportunity during this process to share our views or have an open dialogue on issues impacting our communities that we felt would be important to raise.
As a result, “in lieu of a visit to the White House” the Warriors will use their trip to D. C. to “celebrate equality, diversity and inclusion-the values that we embrace as an organization.”

This post was published at Zero Hedge on Sep 23, 2017.

Trump Sports Feud Escalates: Warriors Respond “The President Has Made It Clear We Are Not Invited”

Update 3: As the feud between the president and the Warriors escalates, moments ago the basketball team issued a statement release in which it said that ‘President Trump has made it clear that we are not invited’ and that “in lieu of a visit to the White House” the Warriors will use their trip to D. C. to “celebrate equality, diversity and inclusion-the values that we embrace as an organization.”

This post was published at Zero Hedge on Sep 23, 2017.

You’re Likely A Lot Less Prepared For Crisis Than You Realize

It seems as if Mother Nature is waking up. Either she’s trying to send humans an important warning, or perhaps she’s just out to kill us all.
Massive storms across the globe, earthquakes, and collapsing ecosystems all combine to remind us that we are indeed intimately connected to our planet’s natural systems. And that our well-being rests on staying on Mother Nature’s good side.
Well, Mother Nature has seemed pretty pissed at us of late. Her recent punishments should be taken as a disciplinary wake-up call: It’s time.
It’s time to prepare, everyone. Way past time.
And it’s time to recognize that there are multiplying failure points across the many systems we depend on for our way of life — both natural and man-made. For example:
The wealth gap between the rich and the poor is now grossly obscene and yet still growing wider. Our industrially-farmed soils are being depleted of their nutrients. Species are going extinct every single day. Global oil consumption ticks higher every year. Stock price overvaluation is about the highest it’s ever been. Bonds have never been more expensive (i.e. yields have never been lower) in all of recorded history. Debt levels have never been higher (both globally and, in most cases, locally). The planet’s population continues to explode (7.5 billion today, 10 billion by 2050) while key resources deplete at accelerating rates. Only the foolish, or the seriously self-deluded, would think that these observations and trends will be consequence-free.

This post was published at PeakProsperity on Friday, September 22, 2017,.

“Thousands Could Die” – Puerto Rico Scrambles To Evacuate River Valley As Dam Fails

Days after Hurricane Maria passed over the island and made its way west toward the Dominican Republican, Puerto Rico is still struggling with the initial response to the storm – rescuing people stranded in remote villages, and moving thousands into government shelters. Meanwhile the island’s first responders are making due without electricity, gas or cell phone service after the storm dealt a knockout blow to its infrastructure.
In what was perhaps the most destructive blow to the island’s aging infrastructure, the NWS warned Friday that the Guajataca Dam in northwest Puerto Rico would soon fail, prompting the agency to issue a flash flood emergency warning for Isabela and Quebradillas municipalities. Now, authorities are scrambling to evacuate the residents of the river valley below the dam before their communities are entirely submurged. If the authorities don’t act quickly, “thousands could die” one official in charge of the rescue response said.
According to federal reservoir data, the lake behind the dam, Lago de Guajataca, rose more than three feet between Tuesday and Wednesday, when the storm was still directly over the island. More recent data were unavailable. With floodwaters gushing into the Guajataca river valley, Reuters reports that emergency officials were scrambling Friday and Saturday to evacuate its nearly 70,000 residents before their villages have been completely submerged.
Video published by CBS shows waters gushing over the top of the 90-year-old dam, sending a wall of water racing into the valley below.


This post was published at Zero Hedge on Sep 23, 2017.

Build Your Economic Storm Shelter Now

If you’re idly conversing with someone you don’t know well, the weather is usually a safe topic. It affects everyone in some way, so it’s a shared experience – but there’s something else, too. The weather is no one’s fault. It is what it is, so you need not worry that the other person will blame you for it. None of us can control the weather. And lately, the weather has been interesting, unless you had to live through its more extreme manifestations. Then it’s been hell. Before this week, I would’ve said that Harvey and Irma wrought devastation in Texas and Florida. But then Maria thrashed Puerto Rico and took devastation to a whole new level. I have a lot of friends who live in Puerto Rico, and I’m not sure how things are going to go for them over the next few months.
We can prepare for storms when we know they’re coming, but we can’t stop them in their tracks or change their path. That’s true for both hurricanes and the public pension problem I wrote about last week. Where pensions are concerned, we have the financial equivalents of weather satellites and hurricane hunter aircraft feeding us detailed data. We know the barometer is dropping fast. The eyewall is forming. But we can’t do much about the growing storm, except get out of the way.

This post was published at Mauldin Economics on SEPTEMBER 23, 2017.

‘Never Let A Good Crisis Go To Waste’ – And Short AMZN

The ‘crisis’ quote above originated with Winston Churchill. Several U. S. politicians have referenced it since then (most recently Rahm Emanuel when he was Obama’s Chief of Staff). I’m sure the Wall Street snake-oil salesmen and economic propagandists are more than happy to attribute the deteriorating economic numbers to the hurricanes that hit Houston and southwestern Florida.
Retail sales for August were released a week ago Friday and showed a 0.2% decline from July. This is even worse than that headline number implies because July’s nonsensical 0.6% increase was revised lower by 50% to 0.3% (and it’s still an over-estimate).
Before you attribute the drop in August retail sales to Hurricane Harvey, consider two things: 1) Wall St was looking for a 0.1% increase and that consensus estimate would have taken into account any affects on sales in the Houston area in late August; 2) Building materials and supplies should have increased from July as Houston and Florida residents purchased supplies to reinforce residences and businesses. As it turns out, building supplies and material sales declined from July to August, at least according to the Census Bureau’s assessment. Furthermore, online spending dropped 1.1%. Finally, the number vs. July was boosted by gasoline sales, which were said to have risen 2.5%. But this is a nominal number (not adjusted by inflation) and higher gasoline prices, i.e. inflation, caused by Harvey are the reason gasoline sales were 2.5% higher in August than July.

This post was published at Investment Research Dynamics on September 23, 2017.

Japan’s Lonely Single Men Are Settling For Virtual Reality “Wives Of The Future”

In a country where over 70% of unmarried men between 18 and 34, and 60% of women, have no relationship with a member of the opposite sex, and where birthrates are among the lowest in the world after Japanese women gave birth to fewer than one million babies in 2016 for the first time since the government began tracking birth rates, Bloomberg reports on an industry that’s profiting off the reluctance of young Japanese men and women to find a human partner.
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What Bloomberg calls the ‘virtual love industry’ in Japan has blossomed into a multi-million-dollar concern as unmarried men and women increasingly turn to simulated digital offerings for companionship. Inventors create applications that essentially allow users to build a ‘virtual wife’ or ‘virtual husband’. While we imagine virtual companions bring badly needed comfort to millions of lonely Japanese, as Bloomberg notes, the industry does have a dark side: Some virtual-reality offerings promote unrealistic and even damaging portrayals of women as submissive. And men as domineering and menacing.

This post was published at Zero Hedge on Sep 22, 2017.

LeBron Calls Trump “Bum” For Withdrawing Steph Curry’s White House Invite

Update: As one might have imagined, the responses to Trump’s comments have been far-ranging and explosive but perhaps the best known and most stunning was from LeBron James who called the president a “bum” for rescinding Curry’s invite (after Curry had he wouldn’t go)…
U bum @StephenCurry30 already said he ain't going! So therefore ain't no invite. Going to White House was a great honor until you showed up!
— LeBron James (@KingJames) September 23, 2017

This post was published at Zero Hedge on Sep 23, 2017.

Blowback? – Mizzou Enrollment Tumbles To Lowest Since 2008

Amid ongoing fallout from the negative media attention and student (and faculty) protests that rocked campus in 2015, the University of Missouri recently welcomed its smallest student body since 2008.
As Campus Reform has repeatedly reported, the embattled university has taken hit after hit, starting with a $32 million budget shortfall and a five-percent budget cut, followed by a seven-percent drop in freshmen enrollment heading into last school year.
As some may remember Mizzou hit the headlines after Melissa Click, a journalism professor, won infamy nationwide for her behavior during race-related protests at MU in November 2015.

This post was published at Zero Hedge on Sep 22, 2017.

Commerzbank to Merge with French BNP

According to a the latest spin, the German federal government’s withdrawal from the Commerzbank has left the favored shotgun wedding merger. Commerzbank is the Frankfurt money house which will be merged with the French BNP Paribas. This is being presented as if it were a strong German-French merger which is suggesting that there is a deeper European banking union unfolding. Additionally, they are also going to merge a troubled Italian bank into BNP.
Behind the curtain, the concern is that Commerzbank could not be merged with Deutsche bank because they have the same portfolios that are in trouble. BNP Paribas is about 10 times the size of Commerzbank. Therefore, the real world view is this is just a shotgun wedding rather than a new German-French merger.

This post was published at Armstrong Economics on Sep 23, 2017.

Time To Lay Low

Even though we’ve tried to warn and prepare, none of that makes the inevitable Spec wash-and-rinse any easier to watch.
At the end of the day, it just is what it is. The year 2017 has unfolded almost precisely as we initially forecast back in January with two steps back following every three steps higher. We had carried a target of new highs for 2017, near $1320, through this most recent rally that began on July 10. That we instead reached $1360 was just a bonus, I guess.
From here and with Bank NET short positions hitting extremes over the past two weeks, we must expect further downside as Specs continue to be washed out and USDJPY/CDG reacts negatively to any hint of positive economic news that serves to reinforce Mother’s hogwash of yesterday. As we discussed in yesterday’s podcast, this period of frustration could very well last all the way through the next BLSBS two weeks from tomorrow. Once that’s behind us…and hopefully haven’t fallen too far from here…the stage will be set for the final three-steps-forward part of this year’s pattern.

This post was published at TF Metals Report on Thursday, September 21, 2017.

Earthquake Detected Near North Korea Nuclear Test Site; China “Suspects Explosion”

In what may be the latest major escalation involving North Korea – and potentially the nation’s 7th nuclear test – China’s earthquake administration said it detected a magnitude 3.5 earthquake in North Korea, which it suspects “was caused by an explosion”, raising fears that the rogue state has tested another nuclear bomb. The Chinese administration said in a statement on its website that the quake was recorded at a depth of zero kilometers, while Xinhua said the epicenter was in roughly the same place as a similar shallow earthquake on 3 September, which turned out to be caused by North Korea’s sixth and largest nuclear test.
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However, in analyzing the same earthquake, South Korea came to a different conclusion, and said it was likely to be natural or man-made such as a nuclear test. South Korea’s weather agency assessed the seismic activity as a natural event.
“The quake is presumed to have occurred naturally,” an agency official said, according to South Korea’s Yonhap news agency. “A sound wave, which is usually generated in the event of an artificial earthquake, was not detected.”

This post was published at Zero Hedge on Sep 23, 2017.

Weekend Reading: Yellen Takes Away The Punchbowl

September 20th, 2017 will likely be a day that goes down in market history.
It will either be remembered as one of the greatest achievements in the history of monetary policy experiments, or the beginning of the next bear market or worse.
Given the Fed’s inability to spark either inflation or economic growth, as witnessed by their dismal forecasting record shown below, I would lean towards the latter.
The media is very interesting. Despite the fact there is clear evidence that unbridled Central Bank interventions supported the market on the way up, there is now a consensus that believes the ‘unwinding’ will have ‘no effect’ on the market.

This post was published at Zero Hedge on Sep 22, 2017.

Chapter 3: Purpose Precedes Planning

Christian Economics: Teacher’s Edition
Then God said, ‘Let us make man in our image, after our likeness. And let them have dominion over the fish of the sea and over the birds of the heavens and over the livestock and over all the earth and over every creeping thing that creeps on the earth.’ So God created man in his own image, in the image of God he created him; male and female he created them. And God blessed them. And God said to them, ‘Be fruitful and multiply and fill the earth and subdue it, and have dominion over the fish of the sea and over the birds of the heavens and over every living thing that moves on the earth’ (Genesis 1:26 – 28). For God knows that when you eat of it your eyes will be opened, and you will be like God, knowing good and evil’ (Genesis 3:5).
But seek first the kingdom of God and his righteousness, and all these things will be added to you (Matthew 6:33).
AnalysisThe economic principle of purpose before planning is an implication of point one of the biblical covenant: God’s transcendence, yet also His presence. It has to do with sovereignty. Sovereignty is a legal classification. In economics, it refers to ownership. God was the Creator. He created the world out of nothing. He did not purchase or rent the ‘stuff’ of creation. Rather, He spoke it into existence. So, He is the cosmic Owner. The owner possesses sovereign control over his property. In God’s case, He possesses absolute control.
The New Testament teaches the doctrine of the Trinity. This means three persons, yet one God. Paul identified Jesus, as the second person of the Trinity, as the creator.
He is the image of the invisible God, the firstborn of all creation. For by him all things were created, in heaven and on earth, visible and invisible, whether thrones or dominions or rulers or authorities – all things were created through him and for him. And he is before all things, and in him all things hold together. And he is the head of the body, the church. He is the beginning, the firstborn from the dead, that in everything he might be preeminent. For in him all the fullness of God was pleased to dwell, and through him to reconcile to himself all things, whether on earth or in heaven, making peace by the blood of his cross (Colossians 1:15 – 20).

This post was published at Gary North on September 20, 2017.