Solar Vortex? US PMI Misses For 5th Month, Slides To Lowest Since July

But, but, but the US is the cleanest dirty short that has decoupled from the rest of the world and is the engine of global growth… right? Well with residential investment having plunged, and now manufacturing PMI slumping, we are going to need a better meme. US Manufacturing PMI printed 55.9 final for October, missing expectations fo 56.2 (for 5th month in a row), sliding to its lowest since July. Markit gingerly admits, “the latest figures indicate that the recovery has lost some intensity at the start of the fourth quarter.”  

 

 

Markit additionally notes,

“Latest data highlighted a sharp moderation in input cost inflation, which some firms linked to lower commodity prices on world markets. Meanwhile, factory gate charges rose at the slowest rate for four months in October.

 

Output growth moderated to a seven-month low in October, but was still stronger than the post-crisis trend. Weaker new business gains also contributed to the slowest increase in backlogs of work across the manufacturing sector since January.”

*  *  *

So, in summary, the US is decoupling from the rest of the world and
US GDP is decoupling from both domestic housing and manufacturing?




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The Secret ‘Isolationist’ Majority That’s Lurking Until After the Election

Sen. Rand PaulIn a piece that confusingly
suggests that politicians skeptical of permament war are hiding
their true colors until after the midterm election even as he
concedes that non-interventionism is an increasingly popular
position among Americans, Nicholas Wapshott frets for Politico that
after
election day, the isolationists will be back
.”

When we wake up Wednesday morning, a lot of us will be
isolationists again. All the tough election-season rhetoric about
supporting U.S. troops abroad will have disappeared overnight, and
many Americans can be expected to revert back to what has been a
rising and unmistakable trend: For the first time in nearly
three-quarters of a century – since the months before Dec. 7,
1941—many people are forthrightly embracing isolationism as an
election issue. And the feeling isn’t likely to go away any time
soon, despite some recent polls suggesting that more and
more Americans outraged by the videotaped beheadings of two
journalists have supported military action against ISIL, also known
as the Islamic State. With the war against ISIL expected to last
many years, the pivotal issue of the 2016 election might turn out
to be not the economy or health care but whether the United States
should continue as the world’s policeman, as it has since the end
of World War II, or should finally come home for good.

“Isolationism” is Wapshott’s preferred term throughout; he
castigates as a “weasel word” any attempt to distinguish
isolationists who didn’t want to engage the world at all from
non-interventionists who support free trade and peaceful
interaction with the world, but object to the D.C. fetish for
dropping American bombs and bodies into every knife fight on the
planet.

Wapshott acknowledges that “isolationism” as well as opposition
to NSA surveillance unites Americans, “bringing together the far
left of the Democratic Party with libertarian Republicans in a show
of solidarity rarely seen in Washington.”

It’s also popular among Americans who vote for those
politicians, he concedes, with support for limited action against
ISIS acting as an
exception to public opposition to greater military
intervention
, according to Pew. Reason-Rupe polling finds
almost identical results, with
support for air strikes against ISIS balanced against opposition to
the use of ground forces
.

That skepticism about intervention
extends elsewhere, according to Reason-Rupe polling
. Only 28
percent of Americans want to increase the U.S. military presence
around the world, while 36 percent want to decrease America’s
global military presence.

This skepticism of permanent war is so popular
that…non-interventionists send “dog-whistle signals” to reassure
the faithful without letting hawks catch on, according to Wapshott.
But “as soon as the midterms are out of the way, dovish Democrats
and libertarian Republicans will feel free once again to express
their reluctance to continue to support military action
abroad.”

But the polling…Never mind. Wapshott is convinced that this is
an underground movement—of the majority.

His spin aside, Wapshott is likely right. Non-interventionism—or
“isolationism,” if he insists—is on the rise, with limited
exceptions made for special horrors like ISIS. Wapshott clearly
doesn’t like that development, but those of us who care about
American lives might find it encouraging.

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Fossil Fuels Must Be Phased Out by 2100, Says UN Intergovernmental Panel on Climate Change Synthesis Report

Global Warming MeltOn
Sunday, the United Nations Intergovernmental Panel on Climate
Change (IPCC) released its Synthesis Report that summarizes the
findings of its three earlier reports on the physical science of
man-made global warming, and the analyses of how to mitigate and
adapt to future climate change.  The report declares:

Warming of the climate system is unequivocal, and since the
1950s, many of the observed changes are unprecedented over decades
to millennia. The atmosphere and ocean have warmed, the amounts of
snow and ice have diminished, and sea level has risen.

It is extremely likely that more than half of the
observed increase in global average surface temperature from 1951
to 2010 was caused by the anthropogenic increase in greenhouse gas
concentrations and other anthropogenic forcings together.

Each of the last three decades has been successively warmer at
the Earth’s surface than any preceding decade since 1850. The
period from 1983 to 2012 was likely the warmest 30-year
period of the last 1400 years in the Northern Hemisphere, where
such assessment is possible (medium confidence). The
globally averaged combined land and ocean surface temperature data
as calculated by a linear trend, show a warming of 0.85°C [0.65 to
1.06°C] over the period 1880 to 2012, when multiple independently
produced datasets exist.

The report blames the ongoing 15-year pause in global warming on
“natural variability,” noting:

Due to this natural variability, trends based on short records
are very sensitive to the beginning and end dates and do not in
general reflect long-term climate trends. As one example, the rate
of warming over the past 15 years (1998–2012; 0.05 [–0.05 to 0.15]
°C per decade), which begins with a strong El Niño, is smaller than
the rate calculated since 1951 (1951–2012; 0.12 [0.08 to 0.14] °C
per decade).

The authors of the report evidently expect that the pause should
soon end. As a consequence the report projects:

The global mean surface temperature change for the period
2016-2035 relative to 1986-2005 is similar for the four RCPs
[modeled warming scenarios] and will likely be in the
range 0.3°C- 0.7°C (medium confidence).

That implies that warming could increase by as much as 0.35
degrees per decade, which is nearly triple the rate the IPCC
reports for period after 1951, and 7-times higher than the rate of
increase it reports for the last 15 years.

The report lays out a global carbon budget with the goal of
keeping temperatures beneath the 2°C threshold relative to the
1861-1880 baseline set at the UN’s Copenhagen climate change
conference in 2009. Humanity has already pumped the equivalent of
about 1900 gigatons of carbon dioxide into the atmosphere and can
only emit 1000 gigatons more if there is to be a 66 percent chance
of keeping future temperature increases below 2°C. Humanity is
currently emitting about 50 gigatons per year now, which implies
that the remaining carbon budget would be used up in about 20
years. The Synthesis Report notes:

 Scenarios that are likely to maintain warming at
below 2 C are characterized by a 40% to 70% reduction in GHG
emissions by 2050, relative to 2010 levels, and emissions level
near zero or below in 2100.

So no fossil fuels by 2100. How much would cutting greenhouse
gas emissions cost? The report suggests that it would reduce annual
economic growth over the remainder of the century by between 0.04
to 0.14 percent (median 0.06 percent). Interestingly, the Synthesis
Report observes that estimates for global annual economic losses
for temperature increases of ~2.5 °C above pre-industrial levels
are between 0.2 and 2.0% of income. The report adds:

These impact estimates are incomplete and depend on a large
number of assumptions, many of which are disputable…. As a result,
mitigation cost and climate damage estimates at any given
temperature level cannot be compared to evaluate the costs and
benefits of mitigation.

Well, let’s do a back of the envelope benefit-cost comparison
estimate anyway. The current world GDP is around $70 trillion.
Assuming a baseline growth rate of 2.5 percent for the next 85
years, world GDP would be $612 trillion in 2100. So cutting
greenhouse gas emissions is estimated to reduce GDP between $591
and $545 trillion by 2100. In other words, global GDP will be
between 3.5 and 11 percent lower than if there was no need to
mitigate future climate change. One way to think of this is that
people today making an average global per capita income of just
under $10,000 per year are being asked to sacrifice economic growth
and development for people whose incomes will likely be over
$61,000 per year in 2100.

With due humility the Synthesis Report observes…

…it is outside the scope of science to identify a single best
climate change target and climate policy.

Science may not be able to tell us what to do about man-made
warming, but diplomats at United Nations climate change conferences
this December in Lima, Peru and next December in Paris, France aim
to do just that.

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Not Again! US Trained Syrian “Moderates” Surrender To Jihadists – Hand Over Heavy Weapons

Despite the Obama Administration continuing to insist that its strategy in Syria is "working," The Telegraph reports that two of the main rebel groups receiving weapons from the US to fight both the regime and jihadist groups in Syria have surrendered to al-Qaeda. Rather stunningly, the Syrian Revolutionary Front, one of the largest "vetted, moderate" US-backed rebel forces, has been effectively wiped out; and has handed over all their weapons and bases including US-provided anti-tank missiles and GRAD rockets. Simply out, "as a movement, the SRF is effectively finished," but apart from that US foreign policy is 'nailing it'. As The Telegraph concludes, for the US, the weapons they supplied falling into the hands of al-Qaeda is a realisation of a nightmare.

 

 

As The Telegraph reports (via Contra Corner),

Two of the main rebel groups receiving weapons from the United States to fight both the regime and jihadist groups in Syria have surrendered to al-Qaeda.

 

The US and its allies were relying on Harakat Hazm and the Syrian Revolutionary Front to become part of a ground force that would attack the Islamic State of Iraq and the Levant (Isil).

 

For the last six months the Hazm movement, and the SRF through them, had been receiving heavy weapons from the US-led coalition, including GRAD rockets and TOW anti-tank missiles.

 

But on Saturday night Harakat Hazm surrendered military bases and weapons supplies to Jabhat al-Nusra, when the al-Qaeda affiliate in Syria stormed villages they controlled in northern Idlib province.

 

The development came a day after Jabhat al-Nusra dealt a final blow to the SRF, storming and capturing Deir Sinbal, home town of the group’s leader Jamal Marouf.

 

The attack caused the group, which had already lost its territory in Hama to al-Qaeda, to surrender.

 

"As a movement, the SRF is effectively finished,” said Aymen al-Tammimi, a Syria analyst. “Nusra has driven them out of their strongholds of Idlib and Hama.”

 

The collapse of the SRF and attacks on Harakat Hazm have dramatically weakened the presence of moderate rebel fighting groups in Syria, which, after almost four years of conflict is increasingly becoming a battle ground between the Syrian regime and jihadist organisations.

 

For the United States, the weapons they supplied falling into the hands of al-Qaeda is a realisation of a nightmare.

And Anti-War's Jason Dietz sums up perfectly…

The Obama Administration continues to insist that its strategy in Syria is “working,” but the setbacks on the ground are growing more dramatic by the day, and the Syrian Revolutionary Front, one of the largest “vetted, moderate” US-backed rebel forces, has been effectively wiped out.

 

 

The Revolutionary Front was routed by both ISIS and al-Qaeda’s Jabhat al-Nusra in recent days, and has now surrendered outright after the fall of Deir Sinbal, agreeing to hand over all their weapons and bases to Nusra.

 

Those weapons, it should be made clear, include US-provided anti-tank missiles and GRAD rockets, and adds to the sizable cache of American weapons now in the hands of US enemies in Syria.

 

Nusra and ISIS had been at odds for most of the year going into the US war, but the administration’s decision to attack the both of them has driven them into a growing coordination, and turned the already massive ISIS into an even bigger group with even more international contacts.

 

The US had been backing groups like the Revolutionary Front with an eye toward eventually installing them as the new Syrian government, but even with US and GCC bankrolling, they never grew beyond comparatively small factions within the overall, Islamist-dominated rebellion.

 

That didn’t stop the US from throwing larger amounts of more advanced weaponry at them, despite it being fairly obvious that either ISIS or Nusra could take them out at any time.

 

There wasn’t much need for ISIS or Nusra to do so until the US expanded its war into Syria in September, and that made US allies on the ground huge targets for enemies they were not able to defeat.

 

The administration will no doubt downplay the defeat of the Revolutionary Front, having distanced themselves from the existing moderate factions with an eye toward eventually creating their own rebel group.

 

Yet the same problems loom large if and when that new group is created, as it will presumably be made up of recruits from the same feckless fighting forces, and awash in the same US armaments that didn’t work this time.

 

The US policy of throwing weapons and funds at such factions has not only failed, it has failed spectacularly, giving ISIS and Nusra a steady stream of advanced weapons to loot from smaller forces.

 

Not only has the administration clearly not learned that lesson, but the plan to create a new rebel force seems destined to repeat it, on an even larger scale.

*  *  *

 

Do nothing stupid…




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US Stocks Play Vertical Catch Up To USDJPY’s Overnight Surge

Just as we ‘predicted’ this morning… on no news whatsoever… as once again the meme of underperforming hedge funds (HFRX Global Hedge Fund Index down by ~0.5% YTD versus S&P 500 up 9.2%) needing to chase performance is trotted out as an excuse to front-run the highest beta idiot-maker stocks into the open…

What we said…

Of course, by now everyone knows that the traditional pattern is weakness at the US open, ramping into Europe close, then ramping some orem to preserve faith in central planning. Today should be no different.

JPY went first (dragging NKY to 17250) and now S&P is catching up too…

 

Normal…

 

Of course US stocks have a long way to go to catch up with Nikkei since Friday




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Russia Conducts Full “Nuclear Triad” Drill, Launches Topol-M ICBM

While east Ukraine, aka the Donetsk Republic, was voting over the weekend in what the west pre-emptively classified as another sham vote as its outcome would merely push east Ukraine even closer to the Kremlin, Russia was busy conducting its most comprehensive Nuclear preparedness drill in recent history, one involving the entire “nuclear triad” consisting of strategic bombers; submarines and an the ICBM shown below on Saturday morning.

As reported earlier by the Barents Observer, the silo-based Topol-M intercontinental ballistic missile was launched from Plesetsk in Arkhangelsk Oblast. A few minutes later, the dummy nuclear warhead hits its target on the Kamchatka Peninsula in Russia’s far eastern corner, the Ministry of Defense reports.

The Ministry, conveniently, adds that the Topol-M missile has an “extremely high accuracy of target destruction.”

This took place after a close encounter on Friday, when Norwegian F-16s were scrambled from Bodø airbase for the second time this week as a group of four Tu-95 strategic bombers were approaching from the northeast, Norway’s TV2 reports. The bombers, flying out over the Barents Sea from Russia’s Kola Peninsula, were accompanied by four Il-78 tankers.

On Wednesday, a similar group of four strategic bombers and four tanker aircrafts were flying southbound along Norway’s northern coast. Six of the aircrafts turned around and flew north again over the Norwegian- and Barents Seas before heading home to Russia. The two last flew all the way south to outside Portuguese airspace before heading north again.

After scrambling fighter jets from Norway and Great Britian, NATO said in a statement that the Russian bombers pose a risk to civilian air traffic.

“The bomber and tanker aircraft from Russia did not file flight plans or maintain radio contact with civilian air traffic control authorities and they were not using on-board transponders. This poses a potential risk to civil aviation as civilian air traffic control cannot detect these aircraft or ensure there is no interference with civilian air traffic,” NATO said.

Tu-95 is a turboprop aircraft built during the Cold War to carry nuclear weapons and is because of its long range included in the strategic nuclear forces.

And then there were the nuclear subs (of which one was supposedly lost somewhere near Stockholm only for the rumor to be quietly vaporized).

The third arm of Russia’s nuclear triad, the submarine based ballistic missiles (SLBM), were tested on Wednesday, when “Yury Dolgorukylaunhced a Bulava missile from submerged position in the Barents Sea. 

This was the first operational test launch of Bulava in line with the program of combat training. All previous launches were part of development testing of the new weapon.

It is also the first time a Borey-class submarine had a full set of missiles on board when the launch was conducted. The Borey-class submarines carries 16 missiles that each may hold as many as 10 nuclear warheads. “Yury Dolgoruky” got her full set of Bulava missiles in June this year.




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Audio Recordings Reveal That Ferguson Flight Ban Was to Keep Media Out

When clashes
between protestors and police in Ferguson, Missouri grew heated
this summer after the police shooting of Michael Brown, local
 law enforcement requested a ban on low-flying aircraft over
the scene.

The Federal Aviation Administration (FAA) complied, and
eventually
renewed
the ban, again at police request. The initial FAA order
came after reports that shots had been fired at a police
helicopter, and both orders indicated that they were intended “to
provide a safe environment for law enforcement
activities.” 

But the real reason for the tiny, domestic no-fly zone was to
keep the news media out.


The Associated Press obtained audio recordings

showing
“that local authorities privately acknowledged the
purpose was to keep away news helicopters during violent street
protests.” Indeed, it’s not even entirely clear that the helicopter
shooting incident ever happened. 

The AP reports that the FAA actually struggled to design a
flight ban that would restrict media flyovers but not interfere
with normal commercial flight, which wasn’t viewed as a problem.
After a while, the audio recordings reveal, they gave up and
admitted the real reason they wanted the restrictions: 

“They finally admitted it really was to keep the media out,”
said one FAA manager about the St. Louis County Police in a series
of recorded telephone conversations obtained by The Associated
Press. “But they were a little concerned of, obviously, anything
else that could be going on.

At another point, a manager at the FAA’s Kansas City center said
police “did not care if you ran commercial traffic through this TFR
(temporary flight restriction) all day long. They didn’t want media
in there.”

Police repeatedly claimed that the ban was due to the shots they
said were fired at a law enforcement helicopter. There’s little
evidence that this actually happened. Back to the AP: 

Police officials confirmed there was no damage to their
helicopter and were unable to provide an incident report on the
shooting. On the tapes, an FAA manager described the helicopter
shooting as unconfirmed “rumors.”

As I
said at the time
, the “police safety” justification was always
a stretch. Was a news helicopter really going to create a dangerous
environment for the police? If anything, helicopters would be far
less obtrusive than mass of trucks and reporters who clogged the
scene in August. But news helicopters also would have shown a
clearer, more comprehensive view of what was happening—the size and
movements of the protests, the relative size and formations of
police forces, the side-street incidents that, on many nights, were
reported but hard to verify.

Regardless of the outcome of the investigation into the shooting
that started this all, the police behavior during the aftermath is
hard to justify. It’s plain that the local law enforcement didn’t
want the public to know or see what was happening. Throughout the
protests, they treated the media with contempt, illegally demanding
that they stop filming, making violent threats, and arresting
journalists on the scene. 

And now we know that they had airspace blocked off
specifically to keep the media from the space where the view of the
scene would have been clearest, and then pretended that the real
justification was something other than what it was. This wasn’t
about police safety so much as it was about public scrutiny. That’s
what the police were really trying to protect themselves
from. 

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No Warrant, No Problem: Students’ Lockers Searched at Random By Drug Dogs

DogStudents
at various public schools in West Michigan are subjected to random
searches performed by a specialty canine unit that uncovers
dangerous contraband in kids’ lockers. Really scary stuff, like
hunting gear, pocketknives, fire crackers, prescription medication.
Maybe a
gun-shaped Pop-Tart
or two.

According to
mlive.com
:

The dogs, which are trained to find drugs, alcohol, gun
powder-based products, tobacco and medications, also are used
locally in Grandville, Forest Hills, East Kentwood and Byron Center
schools among 46 districts across the state. East Grand Rapids uses
the city’s public safety department to conduct regular searches on
its high school campus.

Records obtained by MLive and the Grand Rapids Press under the
Freedom of Information Act show the findings by dogs at area
schools are relatively low compared to overall student population,
but educators believe the more vigilant they are, the better for
students.

The public records request showed the discovery of more than 86
prohibited substances or items at the area schools that have used
Interquest since 2011. Alcohol, tobacco and marijuana or drug
paraphernalia were the most common finds, but dogs also alerted to
fireworks and a toy cap gun among other items banned from school
property.

The searches are performed at random, meaning that no single
student is ever the target. Administrators hold this up as good and
fair—we are trampling your rights, but it’s not
personal!
—but the ACLU is skeptical:

“It turns students into suspects in a place where we should be
nurturing them and focusing on their learning,” said Marc Allen, of
the ACLU of Michigan. “There are ways to do a search that are more
narrow and don’t implicate people’s privacy rights.”

I can think of no better way to prepare children to accept the
police state with open arms than to begin subjecting them to
completely undeserved searches in their formative years. These
searches teach them that they have no privacy—there is no place the
authorities can’t touch. They have no right to question or resist.
They need not have done anything wrong. Dubious safety
concerns—seize
the fishing knives!
—will always trump common sense.

It’s true that some students bring prohibited substances onto
school property. Of course, so do the dogs’ handlers:

On this day, “Murphy” is led by Kim Heys, who owns the Michigan
Interquest franchise. The 5-year-old canine rolled through the
halls with his nose to the ground until he picked up a suspicious
scent inside a locker and sat down next to it. Heys rewarded him
with a toy and a school security officer opened the door.

Heys pulled out a small container labeled “pseudo heroin” and
sealed it in a plastic bag. The imitation narcotic was one
of several substances she and the other handlers had planted prior
to the search to be sure the canines are performing
.

Safety first, kids.

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Ferguson No-Fly Zone Aimed to Stop Media, Brittany Maynard Commits Suicide, GOP Senate Candidates Pull Ahead: A.M. Links

  • Brittany Maynard, a 29-year-old woman suffering from terminal
    cancer, committed
    assisted suicide
     this weekend in Oregon with a lethal dose
    of prescription drugs.
  • Audio recordings reveal that the Federal Aviation
    Administration’s 12-day ban on flights over Ferguson, Missouri, was
    intended—at least by local authorities—to
    keep news helicopters
     from witnessing and covering events
    there.
  • It will all be over soon, but one more time for kicks: Weekend

    polling numbers show Republican
    candidates with a slight lead
    over Democrats in several of the more contested U.S. Senate
    races. 
  • J/K!, it never ends: Runoff elections are
    looking likely
    in Georgia and Louisiana, which means “Who will
    control the Senate?” might not actually be answerable until
    2015.
  • Meanwhile, in eastern Ukraine, Pro-Russian separatist
    Alexander Zakharchenko has been elected
    “head of the Donetsk
    People’s Republic”—a vote Ukrainian President Petro Poroshenko
    denounced as a “farce”. 
  • The U.S. Supreme Court hears arguments today
    concerning the passports
    of American citizens born in
    Jerusalem. 
  • Canada has officially
    joined in on bombing
    ISIS. 
  • Meet Texas’
    wacky roster
    of third-party gubernatorial candidates.
     

Follow Reason and Reason 24/7 on
Twitter, and like us on Facebook. You
can also get the top stories mailed to you—sign up
here
.

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Gartman “Astonished” By How Wrong Investors Have Been, Himself Included

“Wrong” again. Just two days ago we mentioned how world-renowned wrongness appears to be a pre-requisite for selling investing newsletters as Dennis Gartman unleashed his Nikkei 25,000 prediction on the world. Crucially though, it appears the great Gartman has taken the first step on the path to rejuvenation by ‘admitting’ his wrongness (though appears to have fallen short of making amends) as he told CNBC this morning, “I went neutral on stocks and I actually turned quite bearish for a couple of days – clearly that was wrong.”

But the ever-present-on-TV pundit then explained – in ubiquitously contradictory terms that it was “astonishing” that so many investors had failed to realize this and remained on the “absolute wrong side”. Just like him? What is clear – just as was proved by no lesser investing dynamo than Whitney Tilson – investing prowess is inversely proportional to the frequency of appearance on financial media… trade accordingly.

 

 

Step 1: Admitting you have a ‘forecasting’ problem

Wrong…

“Whether I like to say it or not, it’s still a bull market… I was wrong.”

 

Gartman said it was “astonishing” that so many investors had failed to realize this and remained on the “absolute wrong side”.

 

They missed the fact that everyone else is picking up the weaponry of the ECB (European Central Bank). Japan has truly picked it up, and the ECB is going to have no choice but to pick it up,” he added.

*  *  *
We assume when he says “they” he means “I”… or are we back to Denial?

*  *  *

Here is a quick stroll down memory lane courtesy of @TMFHousel




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