Ignore Day To Day Market Spikes: Are Stocks Being Accumulated Or Distributed?

While on any given day, stocks may tumble or surge as marginal buyers send increasingly illiquid indices lower or higher on ever lower volume, a more important question is what is taking place below the surface: are large holders looking to offload large exposure (by selling), or vice versa.

For the answer we go to Bank of America, which has models to measure precisely this.

The first one, the Volume Intensity Model (VIM), measures short-term accumulation (up volume or buying) vs. distribution (down volume or selling). According to BofA, VIM remains negative across the board since distribution crossed above accumulation in mid-Nov. Accumulation remains low and has reflected a “buyers’ strike”.

Of all indices, the selling is most pronounced among tech-heavy names, with distribution in the NASDAQ highest since Sept. 2011; NYSE distribution is highest since Oct. 2014 with similar extremes on the S&P 500 and Russell 2000.

As BofA’s Stephen Suttemeir notes, this is tactical oversold reading similar to the Williams %R and VXV/VIX ratio. However, he adds that “any near-term oversold bounce as a “sell strength” rally as bullish “mean-reverters” take temporary control from more bearish “trend followers”. He concludes that “weight of the evidence supports the trend followers.”

 

For the response on longer-term accumulation (up volume or buying) relative to distribution (down volume or selling), we refer to BofA’s VIGOR model. A rising VIGOR shows net accumulation, which is bullish. A falling VIGOR shows net distribution, which is bearish. VIGOR broke below the October 2015 and October 2014 lows on S&P 500 to complete a top. Meanwhile, VIGOR has held the breakdowns on Russell 2000 and NYSE and continues to weaken. The risk is that NASDAQ Comp will follow with a sustained move below the Oct. 2015 low to complete a top as well. Weak VIGOR suggests a sell strength environment.

 

So while it is clear that as of this moment distribution is clearly overpowering accumulation, one final follow up is which sectors are seeing the biggest in and outflows. One way to gauge the sector rotation is to use relative strength and relative momentum, which is tracked by the relative rotation graph (RRG). The weekly RRG shows Telecom, Utilities and Staples as leadership; Tech, Industrials and Discretionary as weakening; and Financials, Materials and Energy as lagging. Health Care is improving and closing in on the leadership quadrant. The RRG reflects a defensive or risk off market. Tech and Discretionary have been big leadership groups (think FANG), but are only weakening and have not yet shifted to lagging sectors.


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Bernie Sanders Seeks to Repeal Gun Law He Once Voted for

Presidential candidate and Senator Bernie Sanders will soon be co-sponsoring the repeal of a law that shields gun manufacturers from lawsuits that involve their guns—the law he voted for in 2005.

For years Sanders had defended the Protection of Lawful Commerce in Arms Act (PLCAA) on the assertion that weapon providers have no control over how consumers use their products and therefore lack liability. Hillary Clinton has vowed to repeal the law if elected and routinely attacked Sanders’ over his 2005 vote.

Gun control was our third worst moment from the first Democratic presidential debate. Check out our favorite highlights from the October debate below.

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The Islamization Of America In 2015, Part 2

Submitted by Soeren Kern via The Gatestone Institute,

  • More than half (51%) of Muslims in America believe they should "have the choice of being governed according to Sharia." Only 39% of those polled said that Muslims in the U.S. should be subject to American courts. Nearly a quarter believed that, "It is legitimate to use violence to punish those who give offense to Islam by, for example, portraying the prophet Mohammed." Nearly one-fifth of Muslim respondents said that the use of violence in the U.S. is justified in order to make Sharia the law of the land in this country. – Poll commissioned by the Center for Security Policy, Washington, D.C.

  • "Ramadan is a special prayer time, a time for religion. We double-park here every Friday and they [allow it], but today they gave us all tickets, almost 100 cabs. This has never happened before. I can't help but to think they are being prejudiced. They don't understand. We have to be here." – Mohammad Zaman, New York City cab driver.

  • "We have no way … to know who these people are … we don't have databases on these individuals so we can't properly vet them, to know where they came from, to know what threat they pose." – Michael McCaul, Chairman of the House Committee on Homeland Security, commenting on the Obama administration plan to resettle Syrian refugees in the U.S.

  • ISIS is operating training camps just a few miles from El Paso, Texas. – Judicial Watch, citing Mexican law enforcement and intelligence sources.

  • Officials at Mason High School in Mason, Ohio, canceled "hijab day" after parents expressed opposition. Female students were asked to wear a headscarf, or hijab, for an entire school day, followed by a time for reflection and discussion.

The following is a chronological survey of some of the main stories about Islam and Islamism in America during the second quarter of 2015. Part 1 of this series can be found here.

Left: In June 2015, the New York Police Department issued parking tickets to more than 100 Muslim cab drivers parked illegally outside a mosque on the Upper West Side during Ramadan. Right: In January 2015, after complaints from Muslim students at the University of Minnesota, the university ordered that posters depicting a caricature of Mohammed be taken down. The ban was later rescinded.

APRIL 2015

April 1. Ahlam Ahmed, an 18-year-old year-old from Queens, said she wanted to become the first female Muslim firefighter in New York City. Ahmed stands five feet tall and weighs just 105 pounds. In an interview with the Village Voice, Ahmed expressed more concern over the dress code than the physical requirements for the job. "I have to be covered," she said. "I love wearing the scarf. It's for protection." FDNY press officer Elisheva Zakheim said: "We try to accommodate religious practices, but safety is our first concern, be it male or female. We approach a lot of these questions on a case-by-case basis."

April 2. A study by the Washington, DC-based Pew Research Center forecast that, if current trends continue, there will be more Muslims in North America than Jews by 2035. The study, "The Future of World Religions: Population Growth Projections, 2010-2050," states that in the United States, Muslims will comprise 2.1% of the population in 2050, up from 0.9% in 2010. Jews, meanwhile, will fall to 1.4% of the U.S. population from 1.8% in 2010.

April 2. A newsletter distributed by the Republican Central Committee in Bonneville County, Idaho, included an article, "Islam in Idaho," which warned that Muslims are "infiltrating" the state, and that Muslims have been taught to "be ready to rise up and kill" non-Muslims. The article called on readers to "demand that our lawmakers and law enforcers pay attention and ascertain whether or not there is a potential threat."

April 7. U.S. President Barack Obama, speaking at an Easter prayer breakfast at the White House, criticized "less-than-loving" Christians. His remarks came just days after he sanitized any reference to Islam after jihadists slaughtered 148 Christians at a college in Garissa, Kenya. Bill Donohue, president of the Catholic League, said Obama's comments at the prayer breakfast were "very disturbing." He added:

"This comes right on the heels of Muslim madmen singling out Christians, calling them out by name, knowing which ones they wanted to execute, in Kenya. We have a president who never mentions the word 'Christians' except when he wants to denigrate them."

He doesn't want to offend Muslims. But he obviously doesn't mind offending Christians. Somehow it's okay to speak about Christians disappointing him, because they don't always act with love. Well, that's true. But what a grand opportunity to make a statement about what happened last week in Kenya. And once again, he's silent with Christians when it comes to us being the victims of genocide."

April 7. A scheduled screening of "American Sniper" at the University of Michigan was abruptly cancelled after school officials received complaints that the film perpetuates "negative and misleading stereotypes" against Muslims. A statement said: "While our intent was to show a film, the impact of the content was harmful, and made students feel unsafe and unwelcomed at our program." On April 16, the university reversed its decision.

April 8. Writing in a magazine called Index on Censorship, the organizers of a women's conference at the University of South Dakota recounted attempts by Muslim groups to ban a screening of Honor Diaries, a documentary film about the worldwide problem of honor killings and other violence against women.

April 8. The Council on American-Islamic Relations (CAIR) demanded that a high school teacher in Richmond, Texas, be disciplined for distributing "virulently anti-Muslim" material to students. The 8-page handout, distributed in a senior economics class at Richmond's Foster High School, said that "Islam is more of an ideology than a religion. It is also an ideology of war." The document also said that Muslims believe all governments except Islamic ones should be overthrown. "Only a strong response to this attempt at student indoctrination will send a message that our schools must never be incubators of hate," said CAIR.

April 10. A HuffPost/YouGov poll found that more than half (55%) of Americans say they have unfavorable views of Islam, and six in 10 either are not interested or do not know whether they want to learn more about the faith. Just 7% said they had a very favorable view of the religion, and 14% said they saw it somewhat favorably.

April 13. Writing in Time magazine, Muslim feminist Asra Nomani described how Muslim groups pressed Duke University to cancel a speech she was invited to give to argue for a progressive, feminist interpretation of Islam in the world. The president of the Duke chapter of the Muslim Students Association sent an email to Muslim students about Nomani's "views" and alleging that she was in a nefarious "alliance" with "Islamophobic speakers." After she asked for evidence against her, Duke University re-invited her. Nomani wrote:

"This experience goes beyond feminism to a broader debate over how too many Muslims are responding to critical conversations on Islam with snubs, boycotts, and calls for censorship, exploiting feelings of conflict avoidance and political correctness to stifle debate. As a journalist for 30 years, I believe we must stand up for America's principles of free speech and have critical conversations, especially if they make people feel uncomfortable.

 

"By standing on stage, I was standing up to the forces in our Muslim communities that are increasingly using tactics of intimidation and smears such as "Islamophobe," "House Muslim," "Uncle Tom," "native informant," "racist" and "bigot" to cancel events with which they disagree.

 

"These dynamics of silencing are often used against women such as Ayaan Hirsi Ali, a Somali-born activist and author of a new book, Heretic. Brandeis University uninvited her from speaking after protests from the Council on American-Islamic Relations and the Muslim Students Association last year, and the Muslim Students Association at Yale University protested her speech at the university last fall."

April 13. Nearly 300 Muslim delegates from more than 20 states met with elected officials and congressional staffers on Capitol Hill during the first-ever National Muslim Advocacy Day. The event was sponsored by the US Council of Muslim Organizations (USCMO), a coalition of American Muslim groups, some of which are linked to the Muslim Brotherhood. Former FBI counterterrorism agent John Guandolo said the event was a "cunning bid by radical Islam to gain political power in the United States."

April 14. Judicial Watch, citing Mexican law enforcement and intelligence sources, reported that ISIS is operating training camps just a few miles from El Paso, Texas:

"The exact location where the terrorist group has established its base is around eight miles from the U.S. border in an area known as "Anapra" situated just west of Ciudad Juárez. Another ISIS cell to the west of Ciudad Juárez, targets New Mexico towns for easy access to the United States.

 

"During the course of a joint operation last week, Mexican Army and federal law enforcement officials discovered documents in Arabic and Urdu, as well as "plans" of Fort Bliss. Muslim prayer rugs were recovered with the documents during the operation.

 

"According to these same sources, "coyotes" engaged in human smuggling — and working for Juárez Cartel — help move ISIS terrorists through the desert and across the border. These specific areas were targeted for exploitation by ISIS because of their understaffed municipal and county police forces, and the relative safe-havens the areas provide for the unchecked large-scale drug smuggling that was already ongoing.

 

"Mexican intelligence sources report that ISIS intends to exploit the railways and airport facilities in the vicinity. The sources also say that ISIS has "spotters" to assist with terrorist border crossing operations. ISIS is conducting reconnaissance of regional universities; the White Sands Missile Range; government facilities in Alamogordo, NM; Ft. Bliss; and the electrical power facilities near Anapra and Chaparral, NM."

April 14. Students at Union Grove High School in Wisconsin were asked to "pretend you're a Muslim" and "give three examples of what you do daily for your religion and any struggles you face." WISN talk radio host Vicki McKenna posted the writing assignment on Twitter. "I feel that the purpose of the assignment is to show prejudices towards Muslims in America or to invent them or exaggerate them," said one parent.

April 14. The Justice Department said U.S. citizens and residents can now find out whether they are on the "no-fly" list and possibly receive a summary of the reasons for their placement in the secret database. Around 47,000 people are on the no-fly list, 800 of whom are Americans. They are barred from boarding a U.S. carrier, a U.S.-bound flight or entering U.S. airspace.

April 16. A legislative committee in Augusta, Maine, voted 8-2 to reject a bill that attempted to codify the state and U.S. constitutions as the law of the land. The legislation, LD 330, was modeled after a law passed in Tennessee aimed at preventing the use of Muslim Sharia law in state courts there.

April 17. Officials at Mason High School in Mason, Ohio, canceled "hijab day" after parents expressed opposition. Female students were asked to wear a headscarf, or hijab, for an entire school day, followed by a time for reflection and discussion. Principal Mindy McCarty-Stewart said the "Covered Girl Challenge," sponsored by MHS' Muslim Students Association, was meant to combat stereotypes Muslim women may face when wearing head coverings. Former school board candidate Sharon Poe said: "My belief is wearing these hijabs represents the oppression of women and Sharia law. I do not recall ever getting an email announcing a Christian Cross Wearing day or a booth for information about the Christian persecution from Islamic terrorists. What happened to the argument of the separation of church and state?"

April 20. The US Council of Muslim Organizations (USCMO), a coalition of groups, defended Turkey ahead of Armenian Genocide Remembrance Day on April 24. The USCMO published a statement opposing any recognition of the genocide of Armenian Christians in 1915 by the Ottoman Turks. The group claims there has not been a "proper investigation of these events by independent historians."

April 20. Turkish media reported that U.S. President Barack Obama had agreed to accompany Turkish President Recep Tayyip Erdogan at the inauguration ceremony of a $100 million mega-mosque in Lanham, Maryland.

April 22. Amir from Seattle, Washington, sought advice on his student loans from financial guru Steve Rhode:

"I recently called to ask if I could get a lower pay-off amount as the original loans were 32K and now they are up to about 64K because of deferment and interest. They said no. My conditions have changed. I was born into Islam, however, never knew much about my religion. Since 2012, I have been learning more about my faith and it is strictly forbidden in my faith to have dealings with interest. I am offering to pay off the original amount I owe. However, due to religious reasons, I would like them to recognize that my awareness and conditions have changed from the time of originally accepting the loan. Can I get the interest wiped out and close this account and case with just paying the original amount borrowed?"

April 22. Mohamed S. Abdullahi, 30, of Phoenix, Arizona, was arrested after physically and sexually assaulting a woman after their arranged marriage. Police said the victim's parents had married her to Abdullahi without her knowledge. After she learned of the marriage, she fled the state, but returned two weeks later to finish high school. The victim's family members reportedly took her to Abdullahi's residence against her will on April 20. Police said Abdullahi punched, bit and strangled her before sexually assaulting her.

April 23. In a letter, U.S. Representatives Keith Ellison (D-MN) and André Carson (D-IN) asked the Obama administration to ban Dutch lawmaker Geert Wilders from visiting the United States because of his anti-Islam views: "We respectfully request that the U.S. government deny Mr. Wilders entry due to his participation in inciting anti-Muslim aggression and violence. Mr. Wilders' policy agenda is centered on the principle that Christian culture is superior to other cultures."

April 24. The U.S. Justice Department said it would "monitor" an Arkansas gun range that declared itself a "Muslim-free zone." The Council on American-Islamic Relations (CAIR) complained about statements by Jan Morgan, the owner of Gun Cave Shooting Range in Hot Springs. In a letter addressed to Attorney General Eric Holder, CAIR said the range was "systematically banning Muslims from a place of business" and that doing so was "a violation of federal laws prohibiting racial and religious discrimination."

April 24. The University of Maryland (UMD) postponed a screening of the film, American Sniper, after the UMD's Muslim Students Association complained that the film "only serves to fuel hatred, promote Islamophobia, and discriminate against Muslim individuals." One of UMD's most famous graduates, retired American football quarterback and current sports commentator Boomer Esiason, tweeted he was "never donating another dime" to the school. "As a 9/11/01 victim I'm deeply saddened and insulted. #ChrisKyle is a hero!" Pastor Franklin Graham wrote:

"Can you believe that the University of Maryland canceled a screening of the movie American Sniper after Muslim students complained? Shame on the University of Maryland for listening to these voices! If these Muslim students can't support the military members who do their job to protect us, let them leave America and go to a Muslim country. God bless America and our heroes!"

April 28. A middle school teacher in Georgia was fired after she criticized President Barack Obama and his supporters in front of students. Nancy Perry allegedly told students at Dublin Middle School that Obama is Muslim and Christians should not support him.

April 29. The board of the Metropolitan Transportation Authority (MTA) voted 9-2 to ban political and religious ads on all subways and buses in New York City. The move came a week after Manhattan federal Judge John Koeltl ordered the MTA to run an ad from the American Freedom Defense Initiative, a free speech advocacy group. The ad featured a Muslim man with his face covered and the Hamas quote: "Killing Jews is worship that draws us close to Allah."

April 29. An internal investigation found that the College of Liberal Arts at the University of Minnesota did not violate university policies on discrimination when it published a flyer depicting a caricature of Mohammed. Controversy erupted in January, when several professors organized a panel discussion about the Charlie Hebdo massacre. The panel was promoted with a flyer which recreated a Charlie Hebdo cover, with a red "CENSORED" stamp on top of it. After Muslim students complained, the university ordered that the posters be taken down, but then reversed the ban, saying it was a mistake. "There is no question in my mind that this poster was protected speech," said Jane Kirtley, a professor of media ethics and law. Professor Bruno Chaouat, who helped to organize the event, said the university's decision to launch an investigation was part of a worrisome trend: "I think what's going on is a global problem … of self-censorship."

MAY 2015

May 1. The Islamic Society of Milwaukee, Wisconsin, purchased a former Lutheran church across from the University of Wisconsin-Milwaukee Union and will convert it into a mosque for a growing east side Muslim community. The Islamic Society purchased property — including a 3,150-square-foot worship space and adjacent triplex — for $700,000. In March, the Islamic Society opened a new $3 million mosque in Brookfield — a first for Waukesha County.

May 3. Elton Simpson, 30, and Nadir Hamid Soofi, 34, were killed by police after they opened fire outside the Muhammad Art Exhibit and Cartoon Contest in Garland, Texas. ISIS claimed responsibility for the shooting, believed to have been the first ISIS-inspired attack on U.S. soil. Simpson, a convert to Islam with a long history of extremism, had been prosecuted in 2010 for lying to the FBI after he spoke of joining Al Shabaab, a terrorist group in Somalia.

May 3. A contract employee at Syracuse Hancock International Airport in Syracuse, New York, was charged with making a terrorist threat after he said he would bring a gun to work and "shoot everybody." Mohammad Salak, a 33-year-old employee of the company Envoy, hired by United Airlines to handle ground services, became the focus of an investigation after fellow employees accused Salak of saying:

"They don't know where I'm from. I've been in wars. I've killed people and killing somebody is nothing to me. I'll leave here and go get my mask and my gun and come and kill everybody."

Police later determined the threats were directed at fellow employees, not travelers or members of the public passing through the airport. The Onondaga County District Attorney's Office significantly reduced the initial charge against Salak from the felony of making a terroristic threat, to misdemeanor menacing, then to disorderly conduct.

May 4. A new instruction manual issued by the Islamic State advises its supporters in the United States and Europe on ways to disguise themselves and their motives when trying to plan and carrying out "lone wolf" attacks. The guide notes:

"Don't make it too obvious you have become a practicing Muslim. For example: If you haven't grown a beard, don't grow it now, because you will bring unwanted attention onto yourself. Mujahideen in Muslim lands remove their beards for deceptive purposes."

 

"When a Muslim goes out in public, he wants to fit into society to make himself look as normal as possible. Remember this isn't because he fears his Islamic identity, but he is doing this so he is not suspected of being an outsider enemy."

 

"Making yourself look more friendly and open minded to the Western public. For example: Muslims who call themselves by a Western nickname gain more acceptances by their non-Muslim colleagues."

 

"People with Islamic names get less jobs than those with Islamic names. This alias might be important if you need an important position in a specific job, i.e. Mujahideen send people to work in power plants or enemy governmental positions to spy on and leak reports to the Islamic State leadership (as double agents)."

May 6. Carmen Harlan, an anchorwoman for WDIV, NBC TV's local affiliate in Detroit, Michigan, angered local Muslims with comments she made about the ISIS threat in Michigan: "Given the fact that we have the largest Arab population outside the Middle East, I guess this [a higher risk of ISIS threats] should not come as a real surprise."

The American-Arab Anti-Discrimination Committee (ADC) called for an apology, saying that Harlon was guilty of making "blanket generalizations about an entire group, unfairly exposing Muslim-Americans and Arab-Americans to contempt and ridicule while subjecting them to marginalization in their schools, places of employment, and other spheres of society."

May 7. Noelle Velentzas, 27, and Asia Siddiqui, 31, both of Queens, New York, pleaded not guilty to charges of planning to build an explosive device for ISIS-inspired attacks in New York City. The two were arrested on April 2. Police searching their homes found gas tanks, a pressure cooker, fertilizer, handwritten notes on recipes for bomb making and jihadist literature. Velentzas told an informant that she could not understand why American citizens were traveling overseas to wage jihad when they could simply "make history" at home, according to court papers.

May 8. Police in San Jose, California, arrested Mohammad Khaliqi, 31, for attempting to rape a 13-year-old girl as she returned home from school. The girl told investigators that Khaliqi had forced his way through the front door of her home as she went inside. She fought him off and he fled before police arrived. The girl then locked the door after he left, hid in a closet and texted her father: "DADDY COME HOME NOW. SOME GUY TRIED TO RAPE ME."

May 13. The planning commissioner of El Monte, a city in Los County, California, faced pressure to resign after he wrote that a ban on Islam "sounds good" on his Facebook page. Art Barrios shared a news article on Facebook with the headline "China makes major moves to ban Islam." He added a comment: "Sounds good maybe the rest of the world should do the same." The Council on American-Islamic Relations (CAIR) called for his resignation. Barrios said his Facebook post was in reference to Islamic extremists "that are going out and killing other people." He said:

"I thought it was about time that we stop kowtowing to the Islam that's doing the racist things and doing the things that are bad for any religion. I'm an American citizen. I have the right to think anything I want to think … I have the right to do what I want to do."

Haroon Manjlai, the public affairs coordinator for CAIR-LA said:

"Neither the article nor Mr. Barrios' comment on the article give any indication that he was talking about Muslim extremists. It sounded like he was talking about the religion as a whole and that is extremely insensitive and un-American."

May 14. Lawmakers in South Carolina indefinitely postponed a vote on legislation that would prohibit the use of any foreign laws, including Islamic Sharia law, which violate the U.S. Constitution.

May 15. The New York Times published an opinion article that called for an infusion of 50,000 migrants from Syria to revitalize Detroit:

"Detroit, a once great city, has become an urban vacuum. Its population has fallen to around 700,000 from nearly 1.9 million in 1950. The city is estimated to have more than 70,000 abandoned buildings and 90,000 vacant lots. Meanwhile, desperate Syrians, victims of an unfathomable civil war, are fleeing to neighboring countries, with some 1.8 million in Turkey and 600,000 in Jordan. Suppose these two social and humanitarian disasters were conjoined to produce something positive."

May 15. The Sheen Center for Thought and Culture, a performance center in downtown Manhattan, canceled an event featuring a new play by Neil LaBute on the grounds that it was offensive to Muslims. The event, "Playwrights for a Cause," featuring four new short plays about censorship in the arts, was set to take place on June 14. The Sheen Center said it "will not be a forum that mocks or satirizes another faith group." LaBute responded:

"This event was meant to shine another light on censorship and it was unexpected to have the plug pulled, quite literally, by an organization that touts the phrase 'for thought and culture' on their very website. Both in life and in the arts, this is not a time to hide or be afraid? recent events have begged for artists and citizens to stand and be counted."

May 21. The Texas Senate passed a measure that would prevent any 'international law' from being used in Texas civil courts. The bill does not specifically mention Islamic Sharia law, but guarantees that no laws from 'foreign courts' will be adopted by Texas civil court judges. "It's just to provide some belt and suspenders to make sure that, with judicial discretion, we don't trump Texas law, American law, with a foreign law regarding family law," said State Senator Donna Campbell. Muslim groups said the bill is a "solution looking for problem."

May 21. The Chairman of the House Committee on Homeland Security, Michael McCaul, said that a plan by the Obama administration to resettle Syrian refugees in the U.S. is a "serious mistake" and should be stopped until safeguards are in place:

"We have no way … to know who these people are … we don't have databases on these individuals so we can't properly vet them, to know where they came from, to know what threat they pose, because we don't have the data to cross-reference them with. While there are a lot of mothers and kids, there are also a lot of males of the age that could conduct terrorist operations."

A group of Senate Democrats urged the Obama administration to allow at least 65,000 Syrian refugees to settle inside the United States.

May 26. Public school officials in Nashville, Tennessee, announced that six schools in South Nashville, home to a burgeoning Muslim community, would begin offering Arabic language classes. Each of the schools has students who speak Arabic as their primary language. Political commentator Allen West said:

"So the schools were chosen because there's a high number of native Arabic speakers in the neighborhood. Why exactly do they need Arabic lessons? Wouldn't English be more appropriate? And why is it the public school's role to help keep students "connected to their native culture?" I thought that was their parents' role. I thought the purpose of the American public school system was to keep Americans connected to their American culture."

May 28. The governing board of the Washington, DC Metro system banned "issue-oriented" advertising on its trains and buses. The move came after the American Freedom Defense Initiative, a free speech advocacy group, sought to place ads featuring a cartoon of Mohammed. A top Metro official said:

"My view is, you put that ad up on the side of a bus, you turn that bus into a terrorism target. I think it's a very bad outcome for everybody. But it's a risk we don't want to put our passengers under."

AFDI's president, Pamela Geller, responded:

"These cowards may claim that they are making people safer, but I submit to you the opposite. They are making it far more dangerous for Americans everywhere. Rewarding terror with submission is defeat. Absolute and complete defeat."

Also in May, a study released by research corporation Westat, and commissioned by the US Department of Justice, estimated that 23-27 honor killings occur in the United States every year. The study, "Honor Violence Measurement Methods," noted that 91% of victims in North America are murdered for being "too Westernized," and in incidents involving daughters 18 years or younger, a father is almost always involved.

The report — which identified four types of honor violence: forced marriage, honor-based domestic violence, honor killing and female genital mutilation — also estimated that 1,500 forced marriages occur in the United States every year.

A separate study by the Population Reference Bureau estimated that 507,000 women and girls in the United States are at risk or have already undergone female genital mutilation (FGM), more than twice the number estimated in 2000.

JUNE 2015

June 1. The U.S. Supreme Court ruled in favor of Samantha Elauf, an American Muslim woman who was denied a job at Abercrombie & Fitch because she wears a hijab headscarf. Elauf claimed the company did not offer her a job because her religious identity violates Abercrombie's "look policy." The company said the scarf clashed with its dress code, which calls for a "classic East Coast collegiate style." Justice Antonin Scalia wrote: "An employer may not make an applicant's religious practice, confirmed or otherwise, a factor in employment decisions."

June 3. United Airlines apologized after a flight attendant's refusal to give an unopened can of soda to a Muslim passenger led to a social media firestorm. Tahera Ahmad, 31, a Muslim chaplain at Northwestern University, was traveling from Chicago to Washington, DC, on May 29 when she said she asked for an unopened can of Diet Coke. Ahmad said the flight attendant told her she was "unauthorized to give unopened cans to people because they may use it as a weapon on the plane." Ahmad wrote on her Facebook page that she was in "tears of humiliation from discrimination."

Other passengers on the flight later contradicted Ahmad's account. They said she became irate after the flight attendant handed her an unopened can of Diet Coke rather than a Coke Zero, as she had requested. The flight attendant returned with a Coke Zero, but said Ahmad could not have the entire can because there was not enough to go around for other passengers. Ahmad then went into a rage: "What, do you think I will use this as a weapon? Why can't I have the whole can? I think you are discriminating against me. I need your name." According to passengers seated near Ahmad, she kept repeating, "I need your name. I am being discriminated against." Ahmad then got on her phone and "started spinning this story on social media and she was never in tears."

One observer noted:

"What's really remarkable about this story is, near as I can tell, at no point … did any of these major media outlets try and independently verify the details of Ahmad's story. I would like to note that what's happened with this story is a complete and total perversion of journalism. Whether it's simply for clicks or because folks are anxious enough to promote any account of injustice that reinforces the media's center-left world view, it is inexcusable to turn someone's one-sided Facebook post into a national news story without making an effort to verify the details."

June 4. A Department of Homeland Security Inspector General report found that the Transportation Security Administration (TSA) had failed to identify 73 airport workers with links to terrorism. The revelation came just days after an internal investigation of the TSA found security failures at dozens of the nation's busiest airports, where undercover investigators were able to smuggle mock explosives or banned weapons through checkpoints in 95% of tests.

June 5. Michael Wolfe, 24, of Austin, Texas, was sentenced to almost seven years in federal prison and five years of supervised release for attempting to engage in violent jihad in Syria. According to the Justice Department, Wolfe admitted that he planned to travel to the Middle East to provide his services to ISIS. Wolfe also admitted to participating in physical fitness training, acquiring a U.S. passport, and trying to conceal his communications about foreign travel to join ISIS. Wolfe purchased plane tickets to Europe so he could meet with an undercover FBI agent, who he believed would help him travel to Syria through Turkey. Wolfe was arrested on June 17, 2014 in Houston as he attempted to board a flight to Canada.

June 7. Munther Omar Saleh, 20, a college student in Queens, New York, was arrested and charged with trying to learn how to build a pressure cooker bomb for an attack in New York City on behalf of the Islamic State.

June 9. The owners of the Empire State Building reached a confidential settlement with a Muslim family booted from the building's observation deck because they were praying. Fahad and Amina Tirmizi, of Long Island, New York, said in their federal lawsuit that they and their two young children had begun silently reciting their evening prayers in a quiet spot on the 86th-floor deck at about 11 p.m. July 2, 2013, when two security guards "forcibly escorted" them down to the lobby and out of the of the building. The couple was seeking $5 million in damages in the suit, filed in March 2014 in Manhattan federal court.

June 9. The New York Police Department said it was working to recruit more Muslims. There currently are about 800 Muslim uniformed police officers out of about 35,000, according to the NYPD Muslim Officers Society. "The more Muslims who work in the NYPD the better," said Ibrahim Hooper, a spokesman for the Council on American-Islamic Relations (CAIR). "This is a way to break down the mistrust and create bridges in the community."

June 12. Four Muslims who accused the FBI of putting them on a no-fly list because they refused to become informants said they would seek damages, even though the travel ban has been lifted. Plaintiff lawyer Robert Shwartz told U.S. District Judge Ronnie Abrams that "various FBI agents punished the men and put them on [the list] because they refused to become informants at their mosques." As a result, they suffered the "stigma of being treated as threats to aviation security." Shwartz added: "Money relief is really the only relief."

June 12. Khalifa Said Derenkai, of Salt Lake City, Utah, filed a lawsuit against Pan Am International Flight Academy, based in Las Vegas, Nevada, for refusing to let him use a flight simulator. Derenkai says he was scheduled for flight simulator training, but Pan Am school manager Phil Spessard looked up his LinkedIn profile and denied him access to a flight simulator. Derenkai, originally from Eritrea, said Spessard reported him to the FBI's Terrorism Taskforce because he "looked suspicious" because of his African origins. Derenkai said he was seeking $400,000 in compensatory damages and punitive damages for discrimination.

June 18. Samuel Rahamin Topaz, 21, of Fort Lee, New Jersey, was charged with planning to travel overseas to support the Islamic State. Topaz was arrested one day after federal prosecutors charged Fareed Mumini, 21, of Staten Island, New York, with trying to stab an FBI agent who was executing a search warrant at his home. A criminal complaint alleged that Mumini had pledged allegiance to the Islamic State, and that if he failed to join the group overseas, he planned to attack law enforcement in the United States.

June 19. Justin Nojan Sullivan, 19, of Burke County, North Carolina, was arrested on charges of planning terrorist attacks in the United States on behalf of ISIS. The criminal complaint alleges that the FBI became aware of Sullivan's plans to obtain a semi-automatic AR-15 rifle, which he planned to use to kill a large number of U.S. citizens. An undercover FBI agent made contact with Sullivan beginning on or about June 6, 2015. Sullivan described himself to the agent as "a mujahid," and as a Muslim convert living in the eastern United States. Sullivan also told the agent that "the war is here," and gave the agent the opportunity to join what he called the Islamic State of North America, whose "doctrine is guerilla warfare in and out."

June 23. A judge in St. Louis, Missouri, ruled that Raja Naeem, a Pakistani taxi driver, has a right to wear religious attire while working. Naeem had been battling the Metropolitan Taxicab Commission, which licenses drivers in the St. Louis area, for years regarding his clothing. The commission requires drivers to wear black pants and a white, button-down shirt. The commission said the dress code makes it easier for the public to identify licensed drivers. After a court ruling in 2013, the commission offered a compromise: a kurta, the loose-fitting clothing worn on the torso. Naeem said his freedom of religious expression was still being violated. Judge Robert Dierker ruled: "Mr Naeem's right to express his religious beliefs by his mode of dress is directly infringed by the Commission's dress code. The Missouri Constitution clearly prohibits such infringement."

June 23. A poll commissioned by the Washington, DC-based Center for Security Policy found that more than half (51%) of Muslims in America believe they should "have the choice of being governed according to Sharia." Only 39% of those polled said that Muslims in the U.S. should be subject to American courts. Nearly a quarter of the Muslims polled believed that, "It is legitimate to use violence to punish those who give offense to Islam by, for example, portraying the prophet Mohammed." Nearly one-fifth of Muslim respondents said that the use of violence in the United States is justified in order to make Sharia the law of the land in this country.

June 23. During an Iftar dinner to celebrate the Muslim holiday of Ramadan, U.S. President Barack Obama lamented the "distorted impression" that many Americans have of Muslims: "Here in America, many people personally don't know someone who is Muslim. They mostly hear about Muslims in the news — and that can obviously lead to a very distorted impression."

June 26. The New York Police Department issued parking tickets to more than 100 Muslim cab drivers parked illegally outside a mosque on the Upper West Side during Ramadan. Cabby Mohammad Zaman, who was slapped with a $115 ticket for double parking, said:

"This is a special prayer time, a time for religion. We double-park here every Friday and they [allow it], but today they gave us all tickets, almost 100 cabs. This has never happened before. I can't help but to think they are being prejudiced. They don't understand. We have to be here."

June 29. Walmart apologized after the bakery at a store in Slidell, Louisiana refused a man's request for a Confederate flag cake, but accepted a design with the ISIS flag. Chuck Netzhammer said he ordered the image of the Confederate flag on a cake with the words, "Heritage Not Hate," but the bakery said no. "I went back yesterday and managed to get an ISIS battle flag printed. ISIS happens to be somebody who we're fighting against right now who are killing our men and boys overseas and are beheading Christians," Netzhammer said. "That's an ISIS battle flag cake that anybody can go buy at Walmart. But you can't buy a Confederate flag toy, with like, say, a 'Dukes of Hazzard's' car."


via Zero Hedge http://ift.tt/1PM0RkG Tyler Durden

A Bullish Blast From The Past

The first time the S&P 500 was at the current levels was early June 2014… i.e. your equity market investment has returned nothing for 19 months.

 

In the interests of “fair and balanced” reporting we offer the following “Sincere” headline from 2014… making it clear just what to do next.

h/t @StockCats

So you know what to do. Or does the phrase “permanently high plateau” ring any bells for anyone?


via Zero Hedge http://ift.tt/1UxZ8x8 Tyler Durden

Another Nail In The US Empire Coffin: Collapse Of Shale Gas Production Has Begun

Via SRSroccoReport.com,

The U.S. Empire is in serious trouble as the collapse of its domestic shale gas production has begun.  This is just another nail in a series of nails that have been driven into the U.S. Empire coffin.

Unfortunately, most investors don’t pay attention to what is taking place in the U.S. Energy Industry.  Without energy, the U.S. economy would grind to a halt.  All the trillions of Dollars in financial assets mean nothing without oil, natural gas or coal.  Energy drives the economy and finance steers it.  As I stated several times before, the financial industry is driving us over the cliff.

The Great U.S. Shale Gas Boom Is Likely Over For Good

Very few Americans noticed that the top four shale gas fields combined production peaked back in July 2015.  Total shale gas production from the Barnett, Eagle Ford, Haynesville and Marcellus peaked at 27.9 billion cubic feet per day (Bcf/d) in July and fell to 26.7 Bcf/d by December 2015:

Top-U.S.-Shale-Gas-Fields-Production

As we can see from the chart, the Barnett and Haynesville peaked four years ago at the end of 2011.  Here are the production profiles for each shale gas field:

Barnett-Shale-Gas-Field

According to the U.S. Energy Information Agency (EIA), the Barnett shale gas production peaked on November 2011 and is down 32% from its high.  The Barnett produced a record 5 Bcf/d of shale gas in 2011 and is currently producing only 3.4 Bcf/d.  Furthermore, the drilling rig count in the Barnett is down a stunning 84% in over the past year.

Haynesville-Shale-Gas-Field

The Haynesville was the second to peak on Jan 2012 at 7.2 Bcf/d per day and is currently producing 3.6 Bcf/d.  This was a huge 50% decline from its peak.  Not only is the drilling rig count in the Haynesville down 57% in a year, it fell another five rigs this past week.  There are only 18 drilling rigs currently working in the Haynesville.

Eagle-Ford-Shale-Gas-Field

The EIA reports that shale gas production from the Eagle ford peaked in July 2015 at 5 Bcf/d and is now down 6% at 4.7 Bcf/d.   As we can see, total drilling rigs at the Eagle Ford declined the most at 117 since last year.  The reason the falling drilling rig count is so high is due to the fact that the Eagle Ford is the largest shale oil-producing field in the United States.

Marcellus-Shale-Gas-Field

Lastly, the Mighty Marcellus also peaked in July 2015 at a staggering 15.5 Bcf/d and is now down 3% producing 15.0 Bcf/d currently.  The Marcellus is producing more gas (15 Bcf/d) than the other top three shale gas fields combined (12.1 Bcf/d).

I have posted the Haynesville shale gas production chart below to discuss why U.S. Shale Gas production will likely collapse going forward:

Haynesville-Shale-Gas-Field

What is interesting about the Haynesville shale gas field, located in Louisiana and Texas, is the steep decline of production from its peak.  On the other hand, the Barnett (chart above in red) had a much different profile as its production peak was more rounded and slow.  Not so with the Haynesville.  The decline of shale gas production at the Haynesville was more rapid and sudden.  I believe the Eagle Ford and Marcellus shale gas production declines will resemble what took place in the Haynesville.

All you have to do is look at how the Eagle Ford and Marcellus ramped up production.  Their production profiles are more similar to the Haynesville than the Barnett.  Thus, the declines will likely behave in the same fashion.  Furthermore drilling and extracting shale gas from the Haynesville was a “Commercial Failure” as stated by energy analyst Art Berman in his Forbes article on Nov 22 2015:

The Haynesville Shale play needs $6.50 gas prices to break even. With natural gas prices just above $2/Mcf (thousand cubic feet), we question the shale gas business model that has 31 rigs drilling wells in that play that cost $8-10 million apiece to sell gas at a loss into a over-supplied market.

 

Haynesville-Shale-EUR-Map-Berman

 

At $6 gas prices, only 17% of Haynesville wells break even (Table 3) and approximately 115,000 acres are commercial (Figure 2) out the approximately 3.8 million acres that comprise the drilled area of the play.

 

The Haynesville Shale play is a commercial failure. Encana exited the play in late August. Chesapeake and Exco, the two leading producers in the play, both announced significant write-downs in the 3rd quarter of 2015.

Basically, the overwhelming majority of the shale gas extracted at the Haynesville was done so at a complete loss.  So, why do they continue drilling and producing gas in the Haynesville?

The reason Art Berman states is this:

What we see in the Haynesville Shale play are companies that blindly seek production volumes rather than value, and that care nothing for the interests of their shareholders. The business model is broken. It is time for investors to finally start asking serious questions.

Chesapeake is one of the larger shale gas producers in the Haynesville as well as in the United States.  According to its recent financial reports, Chesapeake received $1.05 billion in operating cash in the first three-quarters of 2015, but spent $3.2 on capital expenditures to continue drilling.  Thus, its free cash flow was a negative $2.1 billion in the first nine months of 2015.  And this doesn’t include what it paid out in dividends.

The same phenomenon is taking place in other companies drilling for shale gas in the other fields in the U.S.  This insanity has Berman perplexed as he states this in another article from his site:

This has puzzled me because the shale gas plays are not commercial at less than about $6/mmBtu except in small parts of the Marcellus core areas where $4 prices break even. Natural gas prices have averaged less than $3/mmBtu for the first quarter of 2015 and are currently at their lowest levels in more than 2 years.

The reason these companies continue to produce shale gas at a loss is to keep generating revenue and cash flow to service their debt.  If they cut back significantly on drilling activity, their production would plummet.  This would cause cash flow to drop like a rock, including their stock price, and they would go bankrupt as they couldn’t continue servicing their debt.

Basically, the U.S. Shale Gas Industry is nothing more than a Ponzi Scheme.

The Collapse Of U.S. Shale Gas Production Even At Higher Prices

I believe the collapse of U.S. shale gas production will occur even at higher prices  Why?  Because the price of natural gas increased from $2.75 mmBtu in 2012 to $4.37 mmBtu in 2014, but the drilling rig count continued to fall:

U.S.-Gas-Drilling-Rigs-vs-Spot-Price

As the price of natural gas increased from 2012 to 2014, gas drilling rigs fell 40% from 556 to 333.  Furthermore, drilling rigs continued to decline and now are at a record low of 127.  Just as Art Berman stated, the average break-even for most shale gas plays are $6 mmBtu, while only a small percentage of the Marcellus is profitable at $4 mmBtu.

Looking at the chart again, we can see that the price of natural gas never got close to $6 mmtu.. the highest was $4.37 mmBtu.  Thus, the U.S. Shale Gas Industry has been a commercial failure.

Now that the major shale gas producers are saddled with debt and many of the sweet spots in these shale gas fields have already been drilled, I believe U.S. shale gas production will collapse going forward.  If we look at the Haynesville Shale Gas Field production profile, a 50% decline in 4 years represents a collapse in my book.

The Two Nails In The U.S. Empire Coffin

As I stated in several articles and interviews, ENERGY DRIVES THE ECONOMY, not finance.  So, energy is the key to economic activity.  Which means, energy output and the control of energy are the keys to economic prosperity.

While the collapse of U.S. shale gas production is one nail in the U.S. Empire Coffin, the other is Shale Oil.  U.S. shale oil production peaked before shale gas production:

Top-4-Shale-Oil-Fields-Production

This chart is a few months out of date, but according to the EIA’s Productivity Reports, domestic oil production from the top four shale oil fields peaked in April of 2015… three months before the major shale gas fields (July 2015).

Unfortunately for the United States, it was never going to become energy independent.  The notion of U.S. energy independence was built on hype, hope and cow excrement.  Instead, we are now going to witness the collapse of U.S. shale oil and gas production.

The collapse of U.S. shale oil and gas production are two nails in the U.S. Empire coffin.  Why?  Because U.S. will have to rely on growing oil and gas imports in the future as the strength and faith of the Dollar weakens.  I see a time when oil exporting countries will no longer take Dollars or U.S. Treasuries for oil.  Which means… we are going to have to actually trade something of real value other than paper promises.

I believe U.S. oil production will decline 30-40% from its peak (9.6 million barrels per day July 2015) by 2020 and 60-75% by 2025.  The U.S. Empire is a suburban sprawl economy that needs a lot of oil to keep trains, trucks and cars moving.  A collapse in oil production will also mean a collapse of economic activity.

Thus, a collapse of economic activity means skyrocketing debt defaults, massive bankruptcies and plunging tax revenue.  This will be a disaster for the U.S. Empire.


via Zero Hedge http://ift.tt/20e3Y9L Tyler Durden

Tempers Flare Anew As Turkey Accuses Russia Of Violating Airspace

Back in November, Turkey very nearly started a world war when Ankara decided it would be a good idea to shoot down a Russian warplane near the Syrian border.

Only one of the two Su-24 pilots survived after the plane was ambushed by two Turkish F-16s.

The other pilot was killed by the Syrian resistance and in a brazen move, the FSA destroyed a Russian search and rescue helicopter with a US-supplied TOW hours after the plane was downed.

That incident triggered a rather heated war of words between Ankara and Moscow, with The Kremlin launching a PR campaign that accused Turkey of aiding and abetting Islamic State by, among other things, facilitating the group’s illicit oil trafficking business.

Since then, Russia has also deployed S-400 advanced missile defense systems to Latakia which effectively means that Turkish F-16s are no longer allowed in the skies above Syria.

Well, just when you thought the tensions between Erdogan and Putin were calming down, Turkey has summoned the Russian ambassador over what Ankara claims was another violation of Turkish airspace by Russian jets.

Turkey said Saturday that a Russian warplane breached its airspace, accusing Moscow of seeking to escalate tensions and warning of consequences two months after Turkish F-16s downed a Russian jet for violating its territory from Syria,” WSJ reports. “A Russian Su-34 entered Turkey’s airspace at 11:46 a.m. local time on Friday, despite repeated warnings from Turkish radar operators in Russian and English, the Foreign Ministry in Ankara said in an emailed statement Saturday.”

We are issuing an explicit and clear call to the Russian Federation to act responsibly in the matter of not violating the Turkish airspace, and therefore NATO airspace,” Turkey said, as though Russia had somehow forgotten that Turkey was a NATO member.

For their part, the Russians took to Microsoft Paint to provide “proof” that the allegations are without merit.

We hope cooler heads will prevail in Ankara this time around because if Erdogan shoots down another Russian plane, they’ll be long range bombers over Erdogan’s $615 million palace.

In any event, we’re sure Erdogan will write this off as a misunderstanding.

After all, it was the Turkish President himself who in 2012 said “a short-term border violation can never be a pretext for an attack.”


via Zero Hedge http://ift.tt/1PLQUUm Tyler Durden

Japan Just Lit the Fuse on a $9 Trillion Debt Bomb

On Friday the Bank of Japan implemented Negative Interest Rate Policy, or NIRP.

 

It is the second Central Bank to do so. The European Central Bank or ECB first went to NIRP in June 2014.

 

Thus, between Japan and Europe, over 20% of the world’s GDP is being managed by a Central Bank with NIRP.

 

More importantly, TWO major currencies in the world are now at NIRP while the US Dollar is at 0.5%.

 

Why does this matter?

 

Because hundreds of billions of Dollars in capital will be fleeing Japan to come to the US.

The US Dollar has been in a bull market since mid-2014. It is not coincidence that it started when the Euro first went to NIRP: the minute the EBC implemented NIRP money began fleeing the Euro and moving into the US Dollar.

To put this into perspective, this move was larger in scope than the “flight to safety” that occurred in 2008 when everyone thought the world was ending.

 

The reason this is problematic?

 

There are over $9 trillion in BORROWED US Dollars sloshing around the financial system.

And much of it is parked in assets that are denominated in emerging market currencies (the very currencies that have imploded as the US Dollar rallied).

 

This is the US Dollar carry trade… and it is larger in scope that the economies of Germany and Japan… combined.

ALL of this DEBT is at risk of blowing up when the US Dollar began to rally. And now that both Europe AND Japan are implementing NIRP, the US Dollar bull market is only going to get worse.

How bad?

The US Dollar has broken out of the single BIGGEST falling wedge pattern in history. You are looking at a 40 year chart pattern that has been broken.

This tells us that something absolutely MASSIVE is happening in the financial system right now. That "something" is the beginning of a $9 trillion debt implosion.

Another Crisis is coming. Smart investors are preparing now.

We just published a 21-page investment report titled Stock Market Crash Survival Guide.

 

In it, we outline precisely how the crash will unfold as well as which investments will perform best during a stock market crash.

 

We are giving away just 1,000 copies for FREE to the public.

 

To pick up yours, swing by:

http://ift.tt/1HW1LSz

 

Best Regards

 

Graham Summers

Chief Market Strategist

Phoenix Capital Research

 

 

 

 


via Zero Hedge http://ift.tt/1PpbQye Phoenix Capital Research

200 Swedes Storm Occupied Stockholm Train Station, Beat Migrant Children

Sweden is losing its patience with refugees.

In the wake of the sexual assaults allegedly perpetrated by men of “Arab origin” in Cologne, Germany on New Year’s Eve, the Swedish press revealed what certainly appeared to be a coverup related to a wave of similar incidents that apparently occurred at a youth festival and concert in central Stockholm’s Kungsträdgården last August.

That ruffled the feathers of quite a few Swedes and then, earlier this week, we learned that a 22-year-old asylum center worker was murdered in a knife attack carried out by a 15-year-old Somali migrant named Youssaf Khalif Nuur, shown below.

Alexandra Mezher (the victim) had been working at the shelter in Molndal for “a few months” when she was killed while working a night shift.

And speaking of unaccompanied refugees, Stockholm’s central train station has apparently been overrun by Moroccan migrant children who, according to reports, spend their days drinking, stealing, and accosting women.

On Thursday, Interior Minister Anders Ygeman said the country is set to deport some 80,000 of the 163,000 people who entered the country seeking shelter last year, but that wasn’t good enough for the “football hooligan scene”, who on Friday night “went on a rampage” at the train station in Stockholm where “hundreds” of masked men beat migrant children. 

“A mob of black-clad masked men went on a rampage in and around Stockholm’s main train station last night beating up refugees and anyone who did not look like they were ethnically Swedish,” The Daily Mail reports. “Before the attack, the group of 200 people handed out xenophobic leaflets with the message ‘Enough now’.”

The “thugs” were “allegedly linked to Sweden’s football hooligan scene” – whatever that is.

“I was passing by and saw a masked group dressed in black … start hitting foreigners,” one witness said. “I saw three people molested.”

Here are the visuals:

And here’s the text of the flyer the “football hooligans” distributed ahead of the assault to wrest control of the train station from the iron grip of preteen Moroccan migrant children:

All over the country, reports are pouring in that the police can no longer cope with preventing and investigating the crimes which strike the Swedish people.’

 

‘In some cases, for example, in the latest murder of a woman employed at a home for so called ‘unaccompanied minor refugees’ in Molndal, it goes as far as the National Police Commissioner choosing to show more sympathy for the perpetrator than the victim,’ it continues.

 

‘But we refuse to accept the repeated assaults and harrassment against Swedish women.’

 

‘We refuse to accept the destruction of our once to safe society. When our political leadership and police show more sympathy for murderers than for their victims, there are no longer any excuses to let it happen without protest.’

 

‘When Swedish streets are no longer safe to walk on for normal Swedes, it is our DUTY to fix the problem,’ the leaflet reads.

 

‘This is why, today, 200 Swedish men gathered to take a stand against the north African ‘street children’ who are running rampage in and around the capital’s central station.’

 

‘Police have clearly showed that they lack the means to stop their progress and we se no other way than to hand down the punishment they deserve ourselves.’

 

‘The justice system has walked out and the contract of society is therefore broken – it is now every Swedish man’s duty to defend out public spaced against the imported criminality.’

 

‘Those who gathered today are neither your politician, your journalist or your policeman. We are your father, your brother, your husband, your colleague, your friend and your neighbour.

You’ll recall what we said in the wake of Mezher’s murder: “Yes PM Löfven, we believe that you are correct to say that ‘there are quite many people in Sweden who feel a lot of concern’ and make no mistake, if European politicans do not find an effective way to get the situation under control, the public will remove them – either with the ballot or with the torches and pitchforks.”

The text of the leaflet distributed ahead of the train station “rampage” is proof positive that at least some Swedes are prepared to stage an open revolt against a government they now view as standing in violation of the social contract. 

When social contract theory breaks down, you’re left with a Hobbesian state of nature and as you can see from the video shown above, it is indeed “nasty and brutish” and may well end up being quite “short” for the hundreds of unaccompanied North African migrants who fled their countries for the “safety” of Sweden.

There was no word on whether the “football hooligan” crowd managed to retake the station or whether the Moroccan migrant children remain dug in.


via Zero Hedge http://ift.tt/1JPvVgQ Tyler Durden

Apple, FANGs, & Monetary Fools

Submitted by David Stockman via Contra Corner blog,

This week the great tree of Apple finally stopped growing toward the sky. During its latest quarter, in fact, i-Pad sales were down 25%, Mac volume came in 4% lower and even the i-Phone barely breached the flat line.

In all, Apple’s mighty machine of double digit growth posted a revenue gain of just 1.7% over prior year, while its net income was essentially flat. The real news, however, was that management is now projecting an actual 11% y/y decline in sales during the current quarter.

Don’t get me wrong. Apple has been the most awesome fount of product invention, global production and supply chain proficiency, logistics and marketing innovation and consumer brand value creation in modern history—-perhaps ever.

Its products—especially the smart phone—did fundamentally transform the daily life of the world. Apple’s installed base of one billion devices is a living testimonial to its fanatical focus on bringing to the consumer a truly transformative digital age experience.

Yet it all happened in well less than 10 years. Indeed, while the tech world was booming in the 1990s, APPL was struggling. Between 1990 and 2004, revenue grew at only 4% per annum and earnings did not increase by one thin dime.

That’s right. Apple’s net income stalled out at $500 million per year for a decade and one half—-or at a level equal to two days profits during the quarter just reported.

That wasn’t much to write home about under any circumstance, but was especially wimpy compared to Microsoft, where sales and net income grew at a 27% CAGR during that period; or Cisco, where sales and earnings soared by 50% annually for 15 years running.

And that brings us to the lunatic valuation of the FANGS, which was also on display again this week, and why 100X+ PE multiples are always and everywhere a deformed artifact of central bank driven Bubble Finance, not the emission of an honest capital market.

The fact is, the greatest technology-based businesses of modern times accomplished its dramatic growth spurt in just over 20 quarters between 2011 and 2015. That was after the i-Phone incepted and the i-Pad worked up a serious head of steam.

Now Apple is pancaking or worse, and it is hard to believe that gimmick products like Apple Watch or Oculus can fill the hole from the fast fading i-Pad and the stalling i-Phone. No harm done, of course, and its entirely possible the APPL will have another modest growth run.

But here’s the thing. Apple essentially proves you can’t capitalize anything at 100X except in extremely rare cases because of the terminal growth rate barrier. That is, after a few years of red hot growth almost every large company’s organic growth rate bends toward the single digit path of GDP.

 

In this respect, Microsoft and Cisco surely prove the rule. After their blistering 1990’s growth, the were valued at 75X and 230X reported earnings, respectively, at the tech bubble peak in 2000. But the terminal year growth rates implied in those towering multiples were not to be——even for two of the most inventive companies of the digital age.

During the last fifteen years, Microsoft’s net income has grown at a 5.9% annual rate and Cisco’s at 7.8%. Technology shifts, competition and global macroeconomic trends together conspired to bend their red hot growth trajectories toward the flat line.

As a consequence, they have spent the entirety of this century shedding market cap and enduring PE multiple compression.
MSFT Market Cap Chart

MSFT Market Cap data by YCharts

As can be seen above, between December 1999 and the end of 2014, Microsoft’s market cap declined from $600 billion to $380 billion, meaning it shed $220 billion of valuation, as its PE contracted from 75X to 18X (its market cap currently is slightly higher at $420 billion).

Likewise, Cisco’s market cap plunged from $530 billion to $140 billion. Thus, despite 15 years of respectable growth it was forced to shed $410 billion of market cap, while its PE multiple ended up resembling Ross Perot’s famous sucking sound to the south, plunging from 230X at the tech bubble peak to 19X at the end of 2014.

Since these two companies are among the best long term performers and profit generators of all time, they speak powerfully to the terminal year growth barrier. In effect, when “investors” capitalize a growth company’s hot years at a triple digit PE they are drastically overvaluing its terminal year potential.  And virtually without exception, they spend the post growth streak years in PE compression and market cap shrinkage.

At best, these high flyers turn out to be 10-20% long term growers, or at worst shooting stars like Lucent or Dell where 80-100% of the peak market cap gets wiped out by the passage of time and events.

Consider the 25-year growth rate of five important and surviving growth icons of modern times. Apples’ quarter-century net income CAGR ending in the year just reported is 20%. That for Cisco is 18%, Microsoft 17.5%, Intel 15% and Berkshire Hathaway 15%.

Yet today every one of these companies trade at market caps well below their boom year peaks—–even after giving consideration to the balance sheet deterioration resulting from debt-financed stock buybacks. Specifically, relative to its peak market cap, Cisco is current down by 80%, Intel by 68%, Microsoft by 32%, Apple by 26% and  Berkshire Hathaway by 15%.

So there’s the skunk in the woodpile. What is going on under the heading of “growth” company valuation is just pure speculation in the casino. There is absolutely nothing rational or economically efficient about the 100X PEs. The latter get attached to the casino’s trading sardines of the month or year which get temporarily designated as “growth”  stars.

History virtually proves that you can’t go wrong selling the high flyers if you have the patience and capital depth to wait out the serial bubble cycles of the world’s out-of-control central banks. In that respect, this week brought another raft of just that kind of opportunity.

Yes, Amazon disappointed the absurdly precise and ultra aggressive “growth” targets of Wall Street analysts and traders. But so what?

Its PE ratio was marked down from 900X to 475X, meaning it’s still a screaming sale. Back up the trucks!

After all, when you spend 25 years creating a monstrous machine that is resolutely and  maniacally focussed on spending every dime of revenue on global empire building, it will never generate a measureable profit or return on capital. Well, at least not more than the anemic 3.3% pre-tax return it posted for 2015.

Thus, it is only a matter of time before unforeseen external events, such as an ordinary business cycle downturn, to say nothing of the impending global deflation, trigger a drastic re-rating and PE compression. Then the fast money and robo machines will dump the stock hand over fist as usual—–and long before the inattentive home gamers wake up to find themselves the victim of another epic slaughter.

Likewise, Facebook purportedly “surprised” to the upside, and is now trading at close to 90X. But here’s the thing. If you wish to believe that FB really has 1.6 billion carbon unit-based monthly users, you might also want to check into some Florida swampland.

Otherwise recognize that the social media sphere is crawling with silicon-based fake users and mercenary bots, and that their contamination of Facebook’s preposterous user stats is undoubtedly beyond reckoning. Yes, FB occasionally purges the worst incursions, but surely Justin Beiber’s 3.5 million fake fans was only a drop in the bucket.

Besides that, it doesn’t really matter what the mix of carbon vs. silicon based units is in FBs massive user stats. At the end of the day, Facebook is essentially a digital billboard. It’s a place where mostly millennials idle their time in or out of their parents’ basement. Whether they grow tired of Facebook or not remains to be seen, but one thing is certain.

Namely, advertising is slaved to GDP growth and always takes a hit when the business cycle turns south. Indeed, the pool of advertising dollars is relatively fixed at about $175 billion in the U.S. and $575 billion worldwide and grows in the low single digit zip code after you take account of the severe cyclical fluctuations which always slam the ad spend. For instance, during the Great Recession, the U.S. advertising spend declined by 15% and the worldwide spend dropped by 11%.

And therein lies another skunk in the woodpile. Due to its sharp cyclicality, the ad spend is a distinctly low-growth pool of money. And that pool of money is fiercely competed for by the various media venues. Thus, the U.S. ad spend of $177 billion in 2015 was only $5 billion greater than the $172 billion spend way back in 2008.

So when you average out the cyclical fluctuations, the trend growth in U.S. ad spending has been about 0.5% per annum. Likewise, the global ad spend increased from about $490 billion in 2008 to $575 billion in 2015, reflecting a growth rate of 2.3% annually.

Yes, there has been a rapid migration of dollars from TV, newspapers and other traditional media to the digital space in recent years. But the big shift there is already over.

The digital share of the U.S. ad pool, in fact, rose from 13.5% in 2008 to an estimated 32.5% last year. But even industry optimists do not expect the digital share to gain more than a point or so per year going forward. After all, television, newspapers, magazines and radio and highway billboards are not going to disappear entirely.

Moreover, roughly half of the digital share comes in the form of search advertising. FB does not even participate in that sector, where Google has upward of a 55% market share.

Consequently, there are not remotely enough advertising dollars in the world to permit the endless gaggle of social media space entrants to earn revenue and profits commensurate with their towering valuations and the sell side’s hockey stick growth projections.

So once again we have the delusion that the 52% revenue growth that FB booked in its most recent quarter can be continued indefinitely, when it will, in fact, by pulled-down to the GDP growth line in only a matter of time.

Accordingly, now would be an excellent time to sell the stock, and back up the trucks. You can’t  capitalize a one-time share shift in the quasi-static ad spending pie as if it represents a permanent rate of growth. Indeed, most especially not in a world heading into an extended period of deflation and static or even shrinking nominal GDP.

And do believe that this third and greatest central bank driven bubble of this century is well past its sell-by date. The central bankers are getting downright deranged, as Kuroda-san demonstrated on Friday.

Japan is an old age colony sinking into the Pacific. The very last thing it needs is more inflation to erode the purchasing power of its massive and growing retired population, and then to tax their bank accounts with a negative interest rate to boot.

After what amounts to 20 years of ZIRP and QE,  the grand Keynesian monetary experiment of the present era has been proven an utter failure in Japan, which is now sliding into its 5th recession in seven years.

Why do they keep resorting to madcap expansion of central bank balance sheets, and thereby the systematic falsification of financial asset prices? Ostensibly, the aim is to reverse a deadly run of consumer price deflation.

But here’s Japan’s CPI over the last 35 years. That is not deflation!

Japan Consumer Price Index (CPI)

In fact, the 2% mantra has no basis in economic logic or proof in financial history. It’s just a giant cover story that the world’s fraternity of central bankers have invented to justify there massive and constant monetary intrusion.

But here is the real reason why Japan went to NIRP. The Nikkei was down 24% from its June peak. The desperate fools who run the BOJ panicked and voted 5-4 to stop the hissy-fit. That’s all there was to it.
^N225 Chart

^N225 data by YCharts

The BOJ’s NIRP gambit may provide a few days of relief at best, but then the implosion of the world’s monumental financial bubble will continue, and even gather pace.

Why? Because the central banks have shot their wad. Two decades of madcap credit expansion have brought Japan and most of the rest of the world to a condition of peak debt, which means that the central banks are now simply pushing on a credit string.

For the better part of seven years that foolish endeavor has generated massive unsustainable inflation of financial asset values.  It has fueled the lunacy of 100X growth company bubbles.

But as the global economy sinks into the deflationary recession that is inherent in a crack-up boom, it will become increasingly evident that they are powerless to alter the course of the real economy.

Eventually the prospect of recession that can’t be cured by the central bank printing presses will ignite sheer panic in the casino. Then the monetary fools running them will be reviled to the ends of the earth. But not before the lunatic 100X valuations of the FANGs implode like those of all the high flyers which have gone before.

For the third time this century it is time to sell the bubble. Yes, do back up the trucks!


via Zero Hedge http://ift.tt/1nEN0jW Tyler Durden