• Category Archives Politics
  • “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.


  • ‘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.


  • German Elections Void of Any Critical Discussion

    The German Bundestag election campaign has seen a total black-out of any discussion of the major crisis that is building in Europe. Nobody is mentioning that Euro crisis, ECB monetary policy, disintegration of the EU, refugee crisis, pension crisis, the municipalities on the brink of insolvency, or the drastic increases in taxation coming AFTER the election that will only lower disposable incomes and extend deflation.
    The politicians, and the press, are in full swing to hide the real trend at foot. The press is running stories why the Germans Love Merkel, yet she has never won even 40% of the popular vote. Even the press outside of Germany is in on the ‘selling’ of Merkel because she is the leader of Europe – good – bad – indifferent.
    Perhaps the monetary policy of the ECB has set the stage for a serious monetary crisis over the coming years that will seriously disrupt the German economy, in one way or another, depending upon the industry. Mario Draghi has experimented with negative rates which has kept the Eurozone governments on life-support – but they have not used the time to reform anything.

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


  • The Federal Reserve’s Unspoken Truth

    Originally posted at Briefing.com
    The Federal Reserve’s latest policy announcement has generated a lot of opinions about its implications for the capital markets. What it didn’t generate is a lot of movement in the stock market.
    The September Federal Open Market Committee (FOMC) meeting was a two-day affair that concluded on September 20 with the issuance of an updated policy directive, the release of updated economic and policy rate projections, an announcement that the Federal Reserve will start its balance sheet normalization process in October, and a press conference by Fed Chair Yellen to discuss it all.
    Check out Interview: Louise Yamada on Stocks, Tech, and Interest Rates
    There was a whole lot of information to digest. The key talking points from the Fed Day bonanza included the following:
    The target range for the fed funds rate was left unchanged at 1.00% to 1.25%. The vote was unanimous. The Federal Reserve said it will start its balance sheet normalization process in October in accord with the framework laid out in the June 2017 Addendum to the Committee’s Policy Normalization Principles and Plans

    This post was published at FinancialSense on 09/22/2017.


  • US Manufacturing “An Increasing Drag On The Economy” As PMI Drops For First Time Since March

    Following a stronger-than-expected Eurozone PMI print this morning, Markit reports a mixed bag for preliminary September US PMIs with Manufacturing limping higher but Services missing expectations and slipping notably. After 5 straight months of gains, the US Composite PMI dropped back below pre-election levels.
    As Markit notes, there were signs of underlying fragility in September, with new orders expanding at one of the slowest rates seen over the past year.
    Latest data also indicated that new export sales remain close to stagnation.
    Despite the ongoing collapse of ‘hard’ economic data, ‘soft’ surveys continue to remain hopeful…

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


  • “Russia Hoax Continues”: Trump Blasts Facebook Ad Frenzy; Hits “Fake News” For “Screaming” For Hillary

    Continuing his early morning tweetstorm, Donald Trump on Friday questioned the recent media focus on Facebook’s decision to overhaul how it handles political advertisements amid investigations into alleged Russian interference in U. S. elections, and called reports of Kremlin-linked groups buying Facebook ads to sway the 2016 election part of a “Russia hoax.”
    ‘The Russia hoax continues, now it’s ads on Facebook. What about the totally biased and dishonest Media coverage in favor of Crooked Hillary.”
    The Russia hoax continues, now it's ads on Facebook. What about the totally biased and dishonest Media coverage in favor of Crooked Hillary?
    — Donald J. Trump (@realDonaldTrump) September 22, 2017

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


  • 1 In 5 Students Endorse Violence To ‘Prevent’ Controversial Speakers

    A new survey published by The Brookings Institution finds that about one-in-five undergraduate students approve of using violence to shut down controversial speakers.
    A majority of undergraduate students at U. S. four-year colleges and universities also agreed with a hypothetical protest in which a group ‘opposed to the speaker disrupts the speech by loudly and repeatedly shouting so that the audience cannot hear the speaker.’
    According to the survey, 51 percent of students agreed that such a demonstration would be acceptable, while 49 percent disagreed. Not surprisingly, the response to the hypothetical scenario was also largely partisan, with 62 percent of Democrats approving of the protest, compared to just 39 percent of Republicans .

    This post was published at Zero Hedge on Sep 21, 2017.


  • Is Identity Politics Brewing a Holocaust?

    Signs of American collapse are everywhere. Apparently no one notices. The world continues to vote with the US in the UN. When even Russia and China serve as handmaidens to US foreign policy by voting with Washington against North Korea, it appears that the image of America as the exceptional and indispensable country is a propaganda success even among Washington’s most threatened enemies. When Russia and China follow Washington’s lead, it shows the world that there is no alternative to Washington’s leadership.
    A country with a $20 trillion public debt, an even larger private debt, a work force drowning in debt and employed in third world lowly paid domestic services, a stock market pumped up beyond all reason by Federal Reserve liquidity and companies using their profits to repurchase their own stock, a military that’s been tied down for 16 years by a few lightly armed Muslims, a propaganda ministry instead of a media with public ignorance the consequence, and with a total collapse of morality in public and private institutions along with the disappearance of courage, is nevertheless able to make the entire world dance to its tune. Washington is the Wizard of Oz.
    Washington in the past 16 years has destroyed in whole or part seven countries, murdering, maiming, orphaning, widowing, and displacing millions of peoples. Yet Washington still presents itself as the great defender of human rights, democracy, and all that is good. The American people have voiced few words of protest against the massive crimes against humanity committed by ‘their’ government.

    This post was published at Paul Craig Roberts on September 20, 2017.


  • Catalonia Independence Vote October 1st

    The Spanish government refuses to listen to anything from Catalonia and announced it would intervene in Catalonia’s finances to ensure that ‘not one euro’ of public money was used to fund the ‘illegal’ vote. Meanwhile, the Spanish police arrested 13 people in the region of Catalonia and Madrid for their alleged involvement in planning a vote to secede from Spain. This is clearly demonstrating that the Spanish government is reverting to its old fascist ways for it is the boldest move yet by Spanish authorities to stop the separatist movement.
    It was 1931 when the nations defaulted on their debts that saw Estat Catal and other parties began to form Esquerra Republicana de Catalunya (Republican Left of Catalonia)(ERC). The ERC won a dramatic victory in the municipal elections that year and this is when we must regard the first major step in the separatics movement.

    This post was published at Armstrong Economics on Sep 21, 2017.


  • Loving Our Debt-Serfdom: Our Neofeudal Status Quo

    Democracy (i.e. political influence) and ownership of productive assets are the exclusive domains of the New Aristocracy. I have often used the words neoliberal, neocolonial and neofeudal to describe our socio-economic-political status quo. Here are my shorthand descriptions of each term: 1. Neoliberal: the commoditization / financialization of every asset, input (such as labor) and output of the economy; the privatization of the public commons, and the maximizing of private profits while costs and losses are socialized, i.e. transferred to the taxpayers. 2. Neocolonial: the exploitation of the domestic populace using the same debt-servitude model used to subjugate, control and extract profits from overseas populations. 3. Neofeudal: the indenturing of the workforce via debt and financial repression to a new Aristocracy; the disempowerment of the workforce into powerless debt-serfs. Neofeudalism is a subtle control structure that is invisible to those who buy into the Mainstream Media portrayal of our society and economy. This portrayal includes an apparent contradiction: America is a meritocracy–the best and brightest rise to the top, if they have pluck and work hard– and America is all about identity politics: whomever doesn’t make it is a victim of bias.

    This post was published at Charles Hugh Smith on WEDNESDAY, SEPTEMBER 20, 2017.


  • Yet Again?

    This week’s Outside the Box is from one of my favorite writers and analysts. Howard Marks of Oaktree Capital is simply an investing legend. He writes several ‘memos’ a year on the world of investing, and I put quotes around the word memos because they are typically longer than what you would think of as a memo. This week’s selection is reduced from the full memo, which you can see here.
    (And for those who are wondering what I omitted, Howard did a long section on Bitcoin that I had to edit out. If you’re interested, click on the link above, go down about halfway, and you’ll find that section.)
    Oaktree Capital, which is a $100 billion hedge fund, runs the largest distressed debt fund in the world, according to its wiki. Distressed-debt hedge funds are among my favorite investment styles. Where others see risk, great distressed investors simply say let’s lower the valuation of the asset until we take out the risk. It’s all about the market finding its own level. And the really good funds can offer some quite pleasurable investments noncorrelated to market returns. The problem is getting access to them. Oh well. More from the wiki:

    This post was published at Mauldin Economics on SEPTEMBER 20, 2017.


  • SEPT 20/BANKERS SET UP ANOTHER GOLD AND SILVER RAID ON THE CLOWNS FOMC BALANCE RUNOF/YIELD CURVE FLATTENS WITH THE FOMC ANNOUNCEMENT INDICATING FED FAILING POLICY/DEVASTATION IN BOTH MEXICO AND P…

    GOLD: $1312.75 UP $5.25
    Silver: $17.29 UP 5 CENT(S)
    Closing access prices:
    Gold $1300.00
    silver: $17.15
    SHANGHAI GOLD FIX: FIRST FIX 10 15 PM EST (2:15 SHANGHAI LOCAL TIME)
    SECOND FIX: 2:15 AM EST (6:15 SHANGHAI LOCAL TIME)
    SHANGHAI FIRST GOLD FIX: $1316.24 DOLLARS PER OZ
    NY PRICE OF GOLD AT EXACT SAME TIME: $1312.70
    PREMIUM FIRST FIX: $3.54
    xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
    SECOND SHANGHAI GOLD FIX: $1318.43
    NY GOLD PRICE AT THE EXACT SAME TIME: $1313.85
    Premium of Shanghai 2nd fix/NY:$4.58
    xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
    LONDON FIRST GOLD FIX: 5:30 am est $1314.90
    NY PRICING AT THE EXACT SAME TIME: $1315.20
    LONDON SECOND GOLD FIX 10 AM: $1311.30
    NY PRICING AT THE EXACT SAME TIME. 1311.80
    For comex gold:
    SEPTEMBER/
    NOTICES FILINGS TODAY FOR SEPT CONTRACT MONTH: 0 NOTICE(S) FOR nil OZ.
    TOTAL NOTICES SO FAR: 54 FOR 5400 OZ (0.1679 TONNES)
    For silver:
    SEPTEMBER
    71 NOTICES FILED TODAY FOR
    355,000 OZ/
    Total number of notices filed so far this month: 5,881 for 29,405,000 oz

    This post was published at Harvey Organ Blog on September 20, 2017.


  • This Fed is on a Mission

    QE Unwind starts Oct. 1. Rate hike in Dec. Low inflation, no problem. The two-day meeting of the FOMC ended on Wednesday with a momentous announcement that has been telegraphed for months: the QE unwind begins October 1. It marks the end of an era.
    The unwind will proceed at the pace and via the mechanisms announced at its June 14 meeting. The purpose is to shrink its balance sheet and undo what QE has done, thus reversing the purpose of QE.
    Countless people, worried about their portfolios and real estate investments, have stated with relentless persistence that the Fed would never unwind QE – that it in fact cannot afford to unwind QE.
    The vote was unanimous. Even no-rate-hike-ever and cannot-spot-housing-bubbles Neel Kashkari voted for it.
    The Fed also telegraphed that it could raise its target range for the federal funds rate a third time this year, from the current range of 1.0% to 1.25%. There is only one policy meeting with a press conference left this year: December 13, when the two-day meeting ends, remains the top candidate for the next rate hike.
    This has been the routine since the rate hike last December: The FOMC decides to change its monetary policy at every meeting with a press conference: December, March, June, today, and December.

    This post was published at Wolf Street by Wolf Richter ‘ Sep 20, 2017.


  • ‘Never Let A Good Crisis Go To Waste’

    The ‘crisis’ quote above originated with Winston Churchill. Several U. S. politicians have referenced it since thenm (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 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 20, 2017.


  • Illinois Unpaid Vendor Backlog Hits A New Record At Over $16 Billion

    Back in July, the state of Illinois narrowly avoided a junk bond rating with a last minute budget deal that included a 32% in hike in income taxes. Republican Governor Bruce Rauner vetoed the budget and called it a “disaster,” but both houses of the state legislature voted to override his veto. Meanwhile, S&P and Moody’s were apparently both convinced that the budget deal was sufficient for the state to remain an investment grade credit and all lived happily ever after, if just for a few months. Per CNN:
    Illinois narrowly avoided becoming the first U. S. state ever slapped with a “junk” credit rating from S&P Global Ratings after it passed its first budget in more than two years.
    The ratings firm removed the threat of an imminent downgrade for the fifth most populous state in the country on Wednesday, ruling that the Illinois budget deal has lowered the risk of a “liquidity crisis.” Now the state is rated one-notch above “junk” territory, and S&P said the odds of a downgrade within the next year have “substantially diminished.”

    This post was published at Zero Hedge on Sep 19, 2017.


  • Stocks and Precious Metals Charts – On the Daedalian Wings of Paper Money and Corrupted Power

    “The conventional wisdom seems to be that the problems of the euro zone are, as economist Martin Feldstein once put it, ‘the inevitable consequence of imposing a single currency on a very heterogeneous group of countries.’
    What this commentary gets wrong, however, is that single currencies are never the product of debates about optimal economic solutions. Instead, currencies like the U. S. dollar itself are the result of political battles, where motivated actors try to centralize power.
    This has most often occurred ‘through iron and blood,’ as Otto van Bismarck, the unifier of Germany put it, as a result of catastrophic wars. Smaller geographic units were brought together to build the modern nation state, with a unified fiscal system, a common national language that was often imposed by force, a unified legal system, and, a single currency. Put differently, war makes the state, and the state makes the currency….
    European leaders weren’t stupid or self indulgent when they decided to move ahead with the euro, without fiscal union or strong Europe-level democracy. They just cared more about politics and international security than economics. They wanted to build a Europe that had transcended the divisions of the Cold War, and bind together Germany, which was reunited and much more powerful, with the rest of Europe.”
    Kathleen McNamara, This is what economists don’t understand about the euro crisis – or the U. S. dollar
    “Another cause of today’s instability is that we now have a society in America, Europe and much of the world which is totally dominated by the two elements of sovereignty that are not included in the state structure: control of credit and banking, and the corporation.

    This post was published at Jesses Crossroads Cafe on 18 SEPTEMBER 2017.


  • Toys ‘R’ Us Bankruptcy: Another Wall Street Debt Slave Falls

    The year 2017 is likely to be remembered for devastating hurricanes and storm surges, waves of retail bankruptcies amidst record-setting household debt and a stock market that carelessly sailed through these dangerous waters to record highs.
    Toys ‘R’ Us was the latest in a growing string of retail bankruptcies to hit the mat last evening. Its bonds have been telegraphing trouble for some time, with one bond due next year careening from 97 cents on the dollar to 22 cents in a little more than two weeks. On September 6, Wolf Richter at WolfStreet.com provided the short narrative of how Toys ‘R’ Us found itself driving toward the ditch. Citing its leveraged buyout in 2005 by private equity firms Bain Capital, KKR & Co. and real estate firm Vornado Realty Trust, Richter wrote:
    ‘So here’s what the three PE firms did to Toys R Us: they stripped out cash and loaded the company up with debt. And these are the results: At the end of its fiscal year 2004, the last full year before the buyout, Toys R Us had $2.2 billion in cash, cash equivalents, and short-term investments. By Q1 2017, this had collapsed to just $301 million. Over the same period, long-term debt has surged 126%, from $2.3 billion to $5.2 billion… It takes a lot of expertise and Wall Street connivance to pull this off.’
    If the name, Bain Capital, sounds familiar to you, it’s because it’s the private equity firm that was co-founded by Mitt Romney in 1984 and overseen by him in the 80s and 90s. In his book, Turnaround, Romney writes that he owned 100 percent of the shares of Bain Capital. Romney went on to become the Republican Party’s nominee for President in 2012 and his varnished version of just what Bain Capital did for a living came under close scrutiny.

    This post was published at Wall Street On Parade on September 19, 2017.


  • To Hell In A Bucket

    No-one Cares… ‘No one really cares about the U. S. federal debt,’ remarked a colleague and Economic Prism reader earlier in the week. ‘You keep writing about it as if anyone gives a lick.’
    We could tell he was just warming up. So, we settled back into our chair and made ourselves comfortable.
    ***
    ‘The voters certainly don’t care about the federal debt,’ he continued. ‘They keep electing the same spendthrifts to office. And the politicians know the voters don’t care. They also know that making more and more promises is the formula for getting reelected.
    ‘Deep down, the aging masses know they need massive amounts of government debt to pay their social security, medicare, and disability checks. On top of that, many of the so-called gainfully employed are really on corporate welfare; they hang their hats on government contracts to fund their paychecks.
    ‘You know as well I do how this crazy debt based fiat money system works. The debt must perpetually increase or the whole financial system breaks down. The best we can hope for is that the ongoing currency debasement merely leads to a subtle erosion of living standards. That’s the best-case scenario.
    ‘But, again, no one except maybe a handful of your readers’ gives a rip about the federal debt. Plus, if you’re gonna keep writing about it you need to use better terminology. The federal debt has grown at such a rapid rate that standard dollar units no longer capture what’s going on. The debt numbers are so large it is difficult to distinguish between hundreds of billions and tens of trillions of dollars.

    This post was published at Acting-Man on September 19, 2017.


  • Gold Tumbles Most Since July (As Bitcoin Bounces)

    Gold is down over 1% this morning, extending recent weakness to 3-week lows on the basis that the world didn’t end (and the debt ceiling was extended) we presume. Notably, both USDJPY and Bitcoin are mirroring the precious metal’s move…
    It seems gold’s stop-run over the election night highs prompted the reversal…

    This post was published at Zero Hedge on Sep 18, 2017.


  • US Fires Latest Shot In China Trade War: Warns Beijing Is “Threat To World’s Trading System”

    It’s been at least a few weeks since the topic of trade war with China dominated the news flow, so moments ago U. S. Trade Representative Robert Lighthizer decided to poke that particular wound, in during a speech in Washington said that “China’s coordinated effort to create national champions and distort markets is a threat to the world’s trading system.”
    Some headlines from his speech, via Reuters:
    USTR LIGHTHIZER SAYS THERE IS A GROWING FEELING AMONG VOTERS THAT GLOBAL TRADING SYSTEM NOT FAIR TO U. S. WORKERS USTR LIGHTHIZER SAYS “WE WILL HAVE CHANGE IN TRADE POLICY” USTR LIGHTHIZER SAYS U. S. CAN COMPETE IF CONDITIONS ARE FAIR USTR LIGHTHIZER SAYS HE AND TRUMP BELIEVE U. S. SHOULD BE MORE PROACTIVE IN TRADE POLICY, DEMAND RECIPROCITY USTR LIGHTHIZER SAYS HE AND TRUMP BELIEVE THAT TRADE DEFICITS MATTER USTR LIGHTHIZER SAYS SCALE OF CHINA’S EFFORT TO SUBSIDIZE INDUSTRIES IS A THREAT TO WORLD TRADING SYSTEM USTR LIGHTHIZER SAYS 301 PROBE INTO CHINA’S INTELLECTUAL PROPERTY PRACTICES COULD LEAD TO WTO CASES

    This post was published at Zero Hedge on Sep 18, 2017.