Month: April 2017

Authored by Bryce Coward via Gavekal Capital blog,

As 1Q17 finishes with a gain in the books, the stock to bond performance ratio has also broken to a new cycle high, elevating to levels not seen since mid-2007.

Our measure of the stock to bond ratio measures the total return of the S&P 500 relative to that of the JPM 10 year treasury total return index. When the blue line rises, stocks are outperforming bonds, and vice versa.

While a rising stock to bond ratio isn’t all that surprising, especially in a bull market, the recent acceleration is not commonplace. Over the last two quarters stocks have outperformed bonds by 31%, which is highest level since 2011. Only in 1999 did stocks outperform bonds by a wider wide margin over a two quarter period.

So what does this simple chart tell us? Over short periods of time, the relative performance of stocks and bonds fluctuates around around a mean of about zero. When stocks outperform bonds by a large amount over a short period, that period of outperformance reverts back towards zero, either through time or performance. While we can’t possibly predict the performance of either stocks or bonds, what we can fairly confidently deduce is that further stock strength relative to bonds is unlikely over the coming months.

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A growing number of snowflake millennials are saying they can no longer stand to live in the preeminent American ‘safe space’ of San Francisco because the “rent is too damn high”, the traffic is too damn congested and, well, President Trump.  According to a new poll conducted by the Bay Area Council, 40% of all people living in San Francisco say they’re ready to ditch the city for greener pastures while the number is even higher among millennials at 46%.

A growing number of Bay Area residents, led by millennials (18-39), are looking to greener (or less expensive) pastures as the region’s housing and traffic crises combined with an astronomical cost of living take their toll, according to results of the 2017 Bay Area Council Poll released today. The poll found that 40 percent of respondents are considering leaving the Bay Area in the next few years, with millennials leading the way at 46 percent, along with those who spend the biggest share of their income on housing.

 

“Losing our youth is a very bad economic and social strategy,” said Jim Wunderman, President and CEO of the Bay Area Council. “But until we get serious about building the housing we need we’re going to continue seeing our region drained of the young and diverse talent that has helped make the Bay Area an economic powerhouse. We know what the solutions are – streamline local approval and reduce fees and regulatory costs – we just need the political will here and in Sacramento to make them happen. It can be done, it must be done and we’re working now to get it done.”

Meanwhile, the number of people saying they’re looking to ditch the city jumped 6 points versus 2016.

 

Of course, housing and traffic were the most cited reasons that people were looking leave San Fran.  But, in a rather surprising new addition to the list of complaints, President Trump also showed up as a key threat to life in the Bay Area.  Perhaps, the snowflakes of California’s northern shores aren’t aware that even if they move elsewhere in the country that President Trump would still be their president?

 

So it’s probably not at all surprising that a growing number of people think San Fran is on the “wrong track.”

Santa Clara County, home to Silicon Valley and some of the region’s most expensive housing, has the highest number of residents thinking of finding a new address outside the Bay Area, at 47 percent. Across the entire region, renters (50%) are also much more likely than homeowners (31%) to want to cast off, while those who have lived in the Bay Area the longest are far less likely to want to exit than those who have more recently arrived.

 

“We’ve pulled up the welcome mat,” Wunderman said. “A healthy, growing economy needs new blood, but resistance to new housing combined with the grind of traffic and an ever-lengthening commute are closing the door to new residents, to a new generation. The Council is addressing these problems by supporting new funding at a state level to fix roads and highways, advocating for federal funding to increase capacity on Caltrain, working to expand regional ferry service and urging employers to promote greater use of carpool and rideshare technologies. On the housing front, the Council last year sponsored the only significant housing bill to win approval, making it faster, easier and less expensive for homeowners to add affordable in-laws units. This year, we’re working with legislators on a number of bills to streamline housing approvals that represent our best
hope to address the state’s massive housing shortage.”

 

Seems like the flood of tech gurus swarming San Fran have just found out that their $200,000 salaries will buy them the same lifestyle as a $60,000 salary in any other ‘normal’ American town.

Here are the full survey results:

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With Donald Trump’s 100th day in office fast approaching and set to coincide with the April 28th deadline when the Continuing Resolution is set to expire, potentially resulting in a government shutdown, the FT sat down with the president for an interview that covers some of the more pertinent aspects of Trump’s presidency to date.

As the FT notes, halfway through the interview in the Oval Office, Trump is asked if he regrets any of his abrasive tweets about allies, political opponents and the state of the world. Trump pauses, momentarily, and responds: “I don’t regret anything, because there is nothing you can do about it. You know if you issue hundreds of tweets, and every once in a while you have a clinker, that’s not so bad.” To which the FT responds, “there are tentative signs that there is more method behind the madness than critics suspect.”

In addition to the previously noted warning that the US is prepared to engage North Korea unilaterally should China fail to intervene (even though it already has to an extent), here are some of the highlights:

On whether Trump will bring up tariffs and “equalization” during his meeting with Xi:

I don’t want to talk about tariffs yet, perhaps the next time we meet. So I don’t want to talk about tariffs yet. But you used the word equalise. That is a very good word because they are not equalised. If you used a word other than tariff, it is not an equal. You know when you talk about, when you talk about currency manipulation, when you talk about devaluations, they are world champions. And our country hasn’t had a clue, they haven’t had a clue. The past administration hasn’t had and many administrations — I don’t want to say only Obama; this has gone on for many years — They haven’t had a clue. But I do.

Does Trump regret any of his tweets:

I don’t regret anything, because there is nothing you can do about it. You know if you issue hundreds of tweets, and every once in a while you have a clinker, that’s not so bad. Now my last tweet, you know the one that you are talking about perhaps, was the one about being in quotes wire tapped, meaning surveilled. Guess what, it is turning out to be true . . . I predicted Brexit.

On Trump’s use of “abrasive language”, and whether he is proud of that:

Well it hasn’t worked for our predecessors. Look where we are. We have an $800bn trade deficit. The Middle East is a mess. They shouldn’t have gone in. And I was totally opposed to the war in the Middle East which I think finally has been proven, people tried very hard to say I wasn’t but you’ve seen that it is now improving.

Does Trump want to change the postwar liberal order:

This isn’t an exercise. This is a very, very serious problem that we have in the world today. And we have more than one but this is no exercise. This is not just . . . talk. The United States has talked long enough and you see where it gets us, it gets us nowhere.

On “frightened” members of US alliances”

Alliances have not always worked out very well for us. But I do believe in alliances. I believe in relationships. And I believe in partnerships. But alliances have not always worked out very well for us. OK?

On what US Tax reform will look like and when it will take place, and also on the recent healthcare vote failure, which Trump is now saying he didn’t want in the first place:

Well, I don’t want to talk about when and I don’t want to talk about timing. We will have a very massive and very strong tax reform. But I am not going to talk about when . . . Right now I am working very much on the . . . You know that we didn’t take a vote but with healthcare . . .  I didn’t want to take a vote. It was my idea. I said why should I take a vote.

On potentially losing the healthcare vote:

 Yeah, I don’t lose. I don’t like to lose. But that wasn’t a definitive day. They are negotiating as we speak. I don’t know if you know. They are negotiating right now. There was no reason to take a vote. I said, ‘Don’t take a vote,’ and we will see what happens. But one way or the other, I promised the people great healthcare. We are going to have great healthcare in this country. Now, it will be in one form or another. It will be a repeal and replace of Obamacare which is the deal that is being negotiated now. And if we don’t get the . . . Freedom Caucus there that would be fine. They’re friends of mine. Many of them have already left, and many of them as you know have already given us their vote. But when you have zero Democrats, zero, you need close to 100 per cent of the Republicans.

On whether Europe falls apart and Marine Le Pen’s chances of winning:

I think Brexit is very good for the UK, it is going to be very good for UK. I would have thought when it happened that more would follow, but I really think the European Union is getting their act together. It could be a very good thing for both…. I don’t know what is going to happen [in France]. I know that some outside distractions have taken place which have changed that race. That’s going to be an interesting race. I really don’t know and I don’t know her. I have never met her.

On whether Trump still enjoys his job:

I am really liking it. I’ve enjoyed it. I’ve enjoyed it. We have done a lot . . . We’re doing great. The jobs: Ford just announced they are doing three major plants, three major expansions, thousands of jobs; General Motors, Fiat, [a] couple of them off the record because ‘Why do I need this for?’ But a couple of them were going to build in Mexico, now they are building in Michigan. Now they are building in Ohio. We got it going.

Much more in the full interview found after the jump.

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Authored by Giulio Meotti via The Gatestone Institute,

• British multiculturalists are feeding Islamic fundamentalism. Muslims do not need to become the majority in the UK; they just need gradually to Islamize the most important cities. The change is already taking place.
• British personalities keep opening the door to introducing Islamic sharia law. One of the leading British judges, Sir James Munby, said that Christianity no longer influences the courts and these must be multicultural, which means more Islamic. Rowan Williams, the former Archbishop of Canterbury, and Chief Justice Lord Phillips, also suggested that the English law should "incorporate" elements of sharia law.
• British universities are also advancing Islamic law. The academic guidelines, "External speakers in higher education institutions", provide that "orthodox religious groups" may separate men and women during events. At the Queen Mary University of London, women have had to use a separate entrance and were forced to sit in a room without being able to ask questions or raise their hands, just as in Riyadh or Tehran.

"London is more Islamic than many Muslim countries put together", according to Maulana Syed Raza Rizvi, one of the Islamic preachers who now lead "Londonistan", as the journalist Melanie Phillips has called the English capital. No, Rizvi is not a right-wing extremist. Wole Soyinka, a Nobel Laureate for Literature, was less generous; he called the UK "a cesspit for Islamists".

"Terrorists can not stand London multiculturalism", London's mayor Sadiq Khan said after the recent deadly terror attack at Westminster. The opposite is true: British multiculturalists are feeding Islamic fundamentalism. Above all, Londonistan, with its new 423 mosques, is built on the sad ruins of English Christianity.

The Hyatt United Church was bought by the Egyptian community to be converted to a mosque. St Peter's Church has been converted into the Madina Mosque. The Brick Lane Mosque was built on a former Methodist church. Not only buildings are converted, but also people. The number of converts to Islam has doubled; often they embrace radical Islam, as with Khalid Masood, the terrorist who struck Westminster.

The Daily Mail published photographs of a church and a mosque a few meters from each other in the heart of London. At the Church of San Giorgio, designed to accommodate 1,230 worshipers, only 12 people gathered to celebrate Mass. At the Church of Santa Maria, there were 20.

The nearby Brune Street Estate mosque has a different problem: overcrowding. Its small room and can contain only 100. On Friday, the faithful must pour into the street to pray. Given the current trends, Christianity in England is becoming a relic, while Islam will be the religion of the future.

In Birmingham, the second-largest British city, where many jihadists live and orchestrate their attacks, an Islamic minaret dominates the sky. There are petitions to allow British mosques to call the Islamic faithful to prayer on loudspeakers three times a day.

By 2020, estimates are that the number of Muslims attending prayers will reach at least 683,000, while the number of Christians attending weekly Mass will drop to 679,000. "The new cultural landscape of English cities has arrived; the homogenised, Christian landscape of state religion is in retreat", said Ceri Peach of Oxford University. While nearly half of British Muslims are under the age of 25, a quarter of Christians are over 65. "In another 20 years there are going to be more active Muslims than there are churchgoers," said Keith Porteous Wood, director of the National Secular Society.

Since 2001, 500 London churches of all denominations have been turned into private homes. During the same period, British mosques have been proliferating. Between 2012 and 2014, the proportion of Britons who identify themselves as Anglicans fell from 21% to 17%, a decrease of 1.7 million people, while, according to a survey conducted by the respected NatCen Social Research Institute, the number of Muslims has grown by almost a million. Churchgoers are declining at a rate that within a generation, their number will be three times lower than that of Muslims who go regularly to mosque on Friday.

Demographically, Britain has been acquiring an increasingly an Islamic face, in places such as Birmingham, Bradford, Derby, Dewsbury, Leeds, Leicester, Liverpool, Luton, Manchester, Sheffield, Waltham Forest and Tower Hamlets. In 2015, an analysis of the most common name in England showed it was Mohammed, including spelling variations such as Muhammad and Mohammad.

Most important cities have huge Muslim populations: Manchester (15.8%), Birmingham (21.8%) and Bradford (24.7%). In Birmingham, the police just dismantled a terrorist cell; there is also a greater probability that a child will be born into a Muslim family than into a Christian one. In Bradford and Leicester, half the children are Muslim. Muslims do not need to become the majority in the UK; they just need gradually to Islamize the most important cities. The change is already taking place. "Londonistan" is not a Muslim majority nightmare; it is a cultural, demographic and religious hybrid in which Christianity declines and Islam advances.

Thousands of Muslims participate in a public outdoor prayer service in Birmingham, England, on July 6, 2016. (Image source: Ruptly video screenshot)

According to Innes Bowen, writing in The Spectator, only two of the 1,700 mosques in Britain today follow the modernist interpretation of Islam, compared with 56% in the United States. The Wahhabis control six percent of mosques in the UK, while the fundamentalist Deobandi control up to 45%. According to a survey from the Knowledge Center, a third of UK Muslims do not feel "part of British culture."

London is also full of sharia courts. There are officially 100. The advent of this parallel judicial system has been made possible thanks to the British Arbitration Act and the system of Alternative Dispute Resolution. These new courts are based on the rejection of the inviolability of human rights: the values ??of freedom and equality that are the basis of English Common Law.

British personalities keep opening the door to introduce sharia. One of Britain's leading judges, Sir James Munby, said that Christianity no longer influences the courts and these must be multicultural — which means more Islamic. Rowan Williams, the former Archbishop of Canterbury, and Chief Justice Lord Phillips also suggested that British law should "incorporate" elements of sharia law. The British cultural establishment is rapidly capitulating to Islamic fundamentalists in accepting their demands.

British universities are also advancing Islamic law. The official guidelines of the university, "External speakers in higher education institutions", published by Universities UK, provide that "orthodox religious groups" may separate men and women during events. At Queen Mary University of London, women had to use a separate entrance and were forced to sit in a room without being able to ask questions or raise their hands — as in Riyadh or Tehran. The Islamic Society at the London School of Economics held a gala, in which women and men were separated by a seven-meter panel.

After the attack on the French satirical magazine Charlie Hebdo, the head of MI6, Sir John Sawers, recommended self-censorship and "some restraint" in discussing Islam. The British ambassador in Saudi Arabia, Simon Collis, converted to Islam and completed the pilgrimage to Mecca, the hajj. He now calls himself Haji Collis.

What will be next?

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A topic that has been beaten to death both on these pages and virtually in every other financial website, has been the remarkable complacency in markets manifested, among other things, by near record low realized and implied equity vol, coupled with a recent plunge (if subsequent rebound) in cross-asset correaltions. Furthermore, as a result of habituation to both central bank and HFT dominance, and the relegation of human-driven, “actively managed” strategies, the “buy the dip” period has collapsed to a record short period of time, as every drop in risk is now simply an opportunity to “BTD.”

 

While all of this is well-documented in the land of equities, less has been said about the extension of recent vol effects across other asset classes, such as rates and fixed income, and in general to the broader, cross-asset market topology.

For one relevant discussion of how volatility is impacting the rates market, where until recently we had witnessed record shorts around the 10Y tenor, we present the latest note from DB’s Dominic Konstam, whose latest report is summarized as follows: “market dynamics during the last month indicate a change in investor perceptions of the relative pace of Fed tightening and the delivery of fiscal stimulus. We believe that despite considerable local stability, the market is vulnerable to a risk off trade. We see an asymmetric risk between rally and sell off. In our view, a bull flattening rally below 2.25% could cause substantial short covering activity, adding a tail wind to a rally below these levels.“

And while Konstam’s team explains why the accumulation of “one-sided stability” in the market is becoming increasingly ominous the longer the market goes without a “flushing” event, what is just as notable is his explanation for why this is happening, something all those who have been unable to explain recent VIX, and other implied vol, prints. This is how Konstam explained the feedback loop of collapsing volatility:

What we have experienced so far is a typical sequence of events seen in the situations when the market is in a search of a new “equilibrium” – the initial phase is marked by repositioning in delta risk, followed by the carry play and activity in the options markets. Most recently carry has been the dominant theme which resulted ultimately in ironing out of any residual dislocations between first and second order risks. In rates, this has seen the convergence of curve carry and levels of vol. The same thing happened in equities.  

 

As investors gravitated toward short gamma positions for yield enhancement, the street became longer gamma and their hedging attenuated rates or equity shocks, reducing realized volatility further and creating the potential for a circular dynamic whereby the stable range, itself a product of dealer long gamma positions, attracted new capital to short gamma strategies.

For much more context, we present the full DB note below with our highlights:

* * *

View With a Skew

Market dynamics during the last month indicate a change in investor perceptions of the relative pace of Fed tightening and the delivery of fiscal stimulus. The initial bear steepening post elections was indicative of the market’s expectation of a swift arrival of fiscal stimulus accompanied by a slow Fed. As of early December, the market was pricing a very dovish Fed, while carried by the forcefulness of the political rhetoric of the new administration, it priced an imminent and fast pace of political action. These expectations were the main driver behind the significant bear steepening of the curve and general risk on trade. This lead-lag arrangement underwent a reversal in the last month as it became clear that the new administration’s legislative agenda would face serious political headwinds, while at the same time, the Fed showed a resolve to hike independently of these political developments.

What we have experienced so far is a typical sequence of events seen in the situations when the market is in a search of a new “equilibrium” – the initial phase is marked by repositioning in delta risk, followed by the carry play and activity in the options markets. Most recently carry has been the dominant theme which resulted ultimately in ironing out of any residual dislocations between first and second order risks. In rates, this has seen the convergence of curve carry and levels of vol. The same thing happened in equities.  

As investors gravitated toward short gamma positions for yield enhancement, the street became longer gamma and their hedging attenuated rates or equity shocks, reducing realized volatility further and creating the potential for a circular dynamic whereby the stable range, itself a product of dealer long gamma positions, attracted new capital to short gamma strategies.

There is evidence of a locally long gamma aggregate dealer position in the correlation of rate changes and spread changes. When the dealer community is long gamma, desks pay fixed rates in market rallies, and receive fixed rates in market sell-offs. This manifests itself in a negative delivered correlation between rate changes and spread changes. When dealers are short gamma, they received fixed in rallies and pay fixed in sell-offs, which produces a positive correlation between rate and spread changes. The classic example of the latter is market behavior during the taper tantrum of 2013, when vol  increased and spreads widened as rates rose, creating an abrupt and significant change in sign of the rates/vol correlation. Note that this correlation was also positive during the postelection sell-off, but has now returned to modestly negative territory.

Any attempt to hedge against this growing complacency was punished by negative carry, which contributed to flattening of the implied volatility skew. The dislocation is reflected with low vol and flat skew. Normally, low vol makes skew steeper. This was especially visible in the sectors where options markets are sufficiently large that dealer’s hedging activities affected the underlying, including both rates and equities.

In the markets where options activity is relatively smaller compared to the underlying, like credit and VIX options, this was not the case. In these markets, standard stylized facts – low vol and steep skew – remained in place.

The only exception to this generalization was the currency market, where underlying political risks, expected to be transmitted through FX, kept the skew reactive.

With time, the existing local stability is likely to be more problematic due to its self-reinforcement – the longer it persists, the higher the risks will become. As these yield enhancement strategies have been profitable for some time, they would have to face a significant drawdown in order to trigger an actual capitulation. This means that there has to be a considerable force, currently not anticipated by the market, which would be capable of undermining this stability.

The one-sided positioning that accumulated since the election now threatens to evolve into a latent condition that makes markets vulnerable to event shocks and further political complications. So, although subjective probabilities have been developing fatter tails, the pricing probabilities were unable to adjust due to persistent flows into yield enhancement strategies. The market is not adjusting despite political bottlenecks, but is taking a pause at this configuration, waiting for further resolution.

We believe that despite considerable local stability, the market is vulnerable to a risk off trade. We see an asymmetric risk between rally and sell off. The year started with a vicious repricing in the belly as the Fed’s reaction function remained the biggest unknown in the context of the interplay between politics and policy. As that uncertainty was gradually resolving, the sellers of vol, especially high strike payers, in this sector dominated, increasing the street’s overweight in this sector.

* * *

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In an interview with the Financial Times coming less than a week ahead of his meeting with China’s president Xi Jinping in Mar A Lago (Xi, however, will not be staying at Trump’s “Winter palace” as the SCMP reports) Donald Trump has warned the US “will take unilateral action to eliminate the nuclear threat from North Korea unless China increases pressure on the regime in Pyongyang.”

Among the key topics for discussion with Xi Jinping, the US president said he would focus on the growing threat from Kim Jong Un’s nuclear program when he hosts the Chinese president at his Florida resort this week in their first meeting.

“China has great influence over North Korea. And China will either decide to help us with North Korea, or they won’t,” Mr Trump said in the Oval Office. “If they do, that will be very good for China, and if they don’t, it won’t be good for anyone.”

But he made clear that he would deal with North Korea with or without China’s help. Asked if he would consider a “grand bargain” — where China pressures Pyongyang in exchange for a guarantee that the US would later remove troops from the Korean peninsula — Mr Trump said:

“Well if China is not going to solve North Korea, we will. That is all I am telling you.”

As a reminder, shortly after the latest North Korean ballistic missile test, China banned all coal imports from North Korea, effectively imposing a major economic blockade (coal accounts for up to 40% of North Korean exports, virtually all of its to China); that appears to be insufficient for Trump.

As the FT notes, the White House views North Korea as the most imminent threat to the US after Barack Obama warned his successor about the progress Pyongyang had made developing long-range missiles and nuclear weapons. In a separate interview, KT McFarland, the deputy White House national security adviser, told the FT that “there is a real possibility that North Korea will be able to hit the US with a nuclear-armed missile by the end of the first Trump term.”

The National Security Council has completed a review of options on North Korea that Mr Trump ordered after his inauguration, according to two people familiar with the review. One of those people said the review had been accelerated to have the options ready for the Trump-Xi summit.

Trump told the FT it was “totally” possible for the US to tackle North Korea without China. Asked if that meant dealing with Pyongyang one on one, he said: “I don’t have to say any more. Totally.”

“What President Trump is trying to do here is to press the Chinese hard by warning them what comes next if they don’t help or join with the US to deal with this problem,” said Dennis Wilder, a former CIA China analyst who later served as the top White House Asia aide to George W Bush.

Barring a pre-emptive strike on North Korea — which the administration will not rule out since all options are on the table — many experts believe the US needs Chinese help as Beijing has the most sway over Pyongyang. But Washington could consider alternatives, ranging from more effective sanctions to various kinds of more controversial covert action.

Ahead of the US-China summit, Trump raised hopes that he would reach some kind of deal with Xi, despite heavy criticism about China’s trade surplus and exchange rate policy. “I have great respect for him. I have great respect for China. I would not be at all surprised if we did something that would be very dramatic and good for both countries and I hope so.”

As a reminder, the topic of North Korea was among the key issues discussed by US Secretary of State, Rex Tillerson, the, during his first visit to Asia, when he warned that the previous US “policy of strategic patience has ended.”

* * *

And in a separate topic, one just as important for US-China relations, namely trade, Trump told the FT that he will not push the Chinese president and discuss tariffs with Xi at the coming meeting, “maybe the next time we meet.”

Are you going to equalise tariffs?

 

Trump: I don’t want to talk about tariffs yet, perhaps the next time we meet. So I don’t want to talk about tariffs yet. But you used the word equalise. That is a very good word because they are not equalised. If you used a word other than tariff, it is not an equal. You know when you talk about, when you talk about currency manipulation, when you talk about devaluations, they are world champions. And our country hasn’t had a clue, they haven’t had a clue. The past administration hasn’t had and many administrations — I don’t want to say only Obama; this has gone on for many years — They haven’t had a clue. But I do.

More here.

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Authored by Ben Norton via TheAntiMedia.org,

If you read the headlines of major corporate media outlets, you’d think hundreds of Iraqi civilians in Mosul coincidentally died in the same location that just so happened to be hit by a US airstrike.

A March 17 US attack in the city of Mosul resulted in a massacre of civilians. The monitoring group Airwars estimated that between 130 and 230 Iraqis were killed in the incident. Iraqi media reported similar figures.

Civilian victims of the US-led bombing campaign to oust ISIS from the major northern Iraqi city, which has been terrorized by the extremist group for three years, have received little media coverage.

The Washington Post (3/28/17) noted, nevertheless, that the recent airstrike “was potentially one of the worst US-led civilian bombings in 25 years.”

Yet just a few days before the Post published this stark fact, leading news networks went out of their way to craft some of the most euphemistic headlines imaginable.

ABC News (3/25/17) took the cake, giving its report the disjointed title “US Reviewing Airstrike That Corresponds to Site Where 200 Iraqi Civilians Allegedly Died.” (This story was also syndicated by Yahoo News—3/25/17.)

Note that the Iraqis simply died; they weren’t killed. The airstrike was a mere temporal and geographic coincidence.

The Los Angeles Times (3/25/17‎) used similarly obfuscatory language, with the headline “US Acknowledges Airstrike in Mosul, Where More Than 200 Iraqi Civilians Died.” This article, which was republished by the Chicago Tribune (3/25/17), made it sound like 200 Iraqis have been killed in all of Mosul.

The day before, however, the LA Times (3/24/17‎) had printed another report that provided much more context: “More Than 200 Civilians Killed in Suspected US Airstrike in Iraq.”

In a slight improvement, the Washington Post (3/25/17) at least used the word “killed”—or, rather, “Allegedly Killed”—for its story: “US Military Acknowledges Strike on Mosul Site Where More Than 100 Were Allegedly Killed.”

But it was not just American outlets that used such watered-down language. France 24 (3/25/17) wrote, underwhelmingly, “US-Led Coalition Confirms Strike on Mosul Site Where Civilians Died.”

Headlines are the most important part of news articles; they greatly influence what the public thinks about political issues. In fact, studies show that most Americans don’t read beyond headlines.

These latest whitewashed titles are remarkably reminiscent of those composed to cover (up) a previous high-profile US massacre of civilians: the October 2015 US bombing of a Doctors Without Borders–operated hospital in Kunduz, Afghanistan (FAIR.org, 10/5/17). The New York Times published a masterpiece of propaganda with the headline “US Is Blamed After Bombs Hit Afghan Hospital.” Ambiguous language, heavy use of the passive voice and awkward wording abounded.

Some ostensible news outlets even contradicted themselves in reporting on the recent Mosul attack. Right-wing website the Daily Caller (3/27/17) published an article misleadingly headlined “Iraq: ISIS, Not US, Responsible For Killing 200 Civilians.”  Author Saagar Enjeti tried to exculpate the US for the atrocity, instead blaming ISIS. Yet in his piece, Enjeti was compelled to acknowledge that the details were murky, and that an Iraqi officer had said “the blast was caused by an airstrike called on ISIS snipers on the roof of a building.”

Later, when the commander of the US-led task force fighting ISIS tepidly admitted, “My initial assessment is that we probably had a role in these casualties [in Mosul],” slightly more direct reports slowly came trickling out. But even after the dust settled and the facts became clearer, media continued to downplay their severity.

In one of the more eyebrow-raising headlines, the New York Times ran a story on the front page on March 29 with the paltry headline “US Concedes It Played a Role in Iraqi Deaths.” (It appeared online on March 28 with the “US ‘Probably Had a Role’ in Mosul Deaths, Commander Says.”)

What was that role, exactly? Well, carrying out the airstrike that killed them. But let’s not split hairs.

While major corporate media largely echoed the US government line, independent left-wing news outlets, on the other hand, were immediately much more straightforward in their reporting. “With 200+ Iraqi Civilians Feared Dead, Carnage Surging Under Trump,” wrote Common Dreams (3/26/17‎), for instance.

Little Media Attention

Given the extreme brutality of ISIS, a genocidal Salafi jihadist group that has slaughtered civilians from religious and ethnic minority groups in Iraq and Syria, it is perhaps understandable that much of the media attention is on its crimes.

But the atrocities committed by the forces fighting it cannot be ignored. Such an approach is a recipe for disaster, as the so-called Islamic State has demonstrated a tendency to exploit Western atrocities for propaganda and recruitment.

Little ink has been spilled in the US media for those victims, nonetheless. According to the monitoring group Airwars, as many as 1,000 civilians were killed by US-led coalition actions in Iraq and Syria just in the month of March (Democracy Now!, 3/27/17).

Many more civilians have been killed in the past two years (Intercept, 8/3/15), yet their deaths have received little attention by major corporate news networks, even when they may help fuel the very extremist group whose monstrousness was used to justify them.

In fact, the US dropped more than 12,000 bombs on Iraq (and another 12,000 on Syria) in 2016 alone, with little media scrutiny.

There was no real public discussion, let alone political debate, about whether or not US bombing ISIS would be a good idea, not to mention whether or not Western airstrikes can actually defeat a guerilla extremist group like ISIS (Extra!, 11/14). After all, it was the illegal US-led invasion and subsequent decade-long military occupation of Iraq, in addition to intervention in the war in Syria, that led to the rise of the hyper-sectarian Islamic State in the first place.

To its credit, the Washington Post (3/24/17) published another article, amid the widespread media whitewashing of the Mosul airstrike, titled “Airstrike Monitoring Group Overwhelmed by Claims of US-Caused Civilian Casualties.” The newspaper acknowledged:

“In the last week, three mass casualty incidents have been attributed to US-led forces in Iraq and Syria, making March one of the most lethal months for civilians in the the two-year-old war against the Islamic State.”

Defenders of corporate media might argue that news outlets had to craft carefully worded headlines as the US government was still investigating the attack. But again, this simply reflects media’s deference to power. If the government says something, there are countless journalists waiting in line to obediently echo it. Corporate media have a long, tried-and-true history of acting as stenographers to power.

The Art of Euphemism and Inconstant Skepticism

A quick look at other instances in which media employ this kind of euphemistic language is instructive. These whitewashing tools are reserved almost exclusively for reports on the crimes of those in power.

Police frequently benefit from this linguistic sleight-of-hand. When cops shoot and kill unarmed civilians, the deaths are referred to as “officer-involved shootings” (FAIR, 7/11/16).

A crutch is made out of the passive voice. Cops don’t fire their guns and shoot people; their guns are magically “discharged,” as if of their own accord.

“Alleged” is ubiquitous and abused: Police “allegedly” shot someone, media insist, even when there is video of the cops shooting them.

These tricks are employed even more frequently, and egregiously, in reports on atrocities committed by the US and its allies. And while media outlets invariably give the US the benefit of the doubt, Western enemies are not afforded the same luxury.

In Syria, for instance, civilian casualty estimates after airstrikes carried out by the Syrian government and Russia are reported exclusively based on the accounts of rebels and “activists,” some of whom have received extensive support from foreign countries committed to overthrowing the Syrian government (AP, 11/29/15, 4/28/16, 11/19/16; Reuters, 1/11/16; CNN, 9/26/16).

The incredulity exhibited in the reports on the US attack in Mosul starkly contrasts with the dogmatic certitude reflected in the incessant barrage of thinly sourced stories on Syria, Russia, North Korea, Iran, Cuba, Venezuela, China and beyond.

This is how US media operate: Staunch skepticism is reserved for reports on the crimes of the US and its allies, whereas rumors and myths are reported as facts when they shine negatively on enemy governments.

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Before you begin to mention the grandiose gains in the stock market since Obama took office, bear in mind a few things.

1. The Federal Reserve lowered interest rates to zero percent, making bonds and interest bearing accounts untenable for retirees, effectively forcing people into stocks. Also, the Fed’s balance sheet went from ~$750b to $4.5t over that time frame — rigging both equity, currency, and bond markets over Obama’s entire 8 year term.

2. Due to the financial crisis, drastic measures were taken to transfer the risk from the banks onto the national balance sheet. Moreso, in order to prevent the economy from slipping back into recession, the Obama administration underwent a methodical process of deficit spending that kept the economy artificially afloat. The side effect of this reckless spending was an additional $9t in debt added to America’s balance sheet.

Fun fact: Obama accumulated more debt in his 8 years as President than all previous President’s combined.

GDP growth, post WW2
Johnson (1964-68), 5.3 percent
Kennedy (1961-63), 4.3 percent
Clinton (1993-2000), 3.9 percent
Reagan (1981-88), 3.5 percent
Carter (1977-80), 3.3 percent
Eisenhower (1953-60), 3 percent
Nixon (1969-74), 2.8 percent
Ford (1975-76), 2.6 percent
G.H.W. Bush (1989-92), 2.3 percent
G.W. Bush (2001-08), 2.1 percent
Truman (1946-52), 1.7 percent
Obama (2009-16), 1.6 percent

Typically, coming off wretched economic growth, as we endured under Bush, the economy would snap back fiercely and register some impressive numbers. But that never happened under Obama, for a variety of reasons — namely because his administration opted for a Frankenstonian approach to economics that resuscitated and kept it artificially afloat, in order to progress an aggressive socialist agenda wrought with public entitlements and high taxes.

The net result, as the numbers show, was extreme failure — judged solely by ROI. As a nation, we stimulated the economy with more than $13 trillion in debt and Federal Reserve market interference, and yet the Obama years will forever be remembered as the only administration since Hoover to not grow the economy by more than 3% during his entire 8 year term.

Hey, at least we got an awesome healthcare plan out of it, yes?
Content originally generated at iBankCoin.com

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After a virtual rollercoaster over the last few weeks, Bitcoin is back above $1100 today as traders anticipate demand with Japan recognizing bitcoin as a legal method of payment starting yesterday.

A weak dollar has helped the bounce back from SEC's ETF decision and fears about the fork but demand from Japanese consumers has sparked the most recent push back up to $1100…

As Coindesk reports, the country's legislature passed a law, following months of debate, that brought bitcoin exchanges under anti-money laundering/know-your-customer rules, while also categorizing bitcoin as a kind of prepaid payment instrument. It's a debate that began in the wake of the collapse of Mt Gox, the now-defunct bitcoin exchange that shuttered after months of growing complications and, in the end, revelations of insolvency and alleged fraud.

According to Japan’s Financial Services Agency, that law went into effect on 1st April, putting in place capital requirements for exchanges as well as cybersecurity and operational stipulations. In addition, those exchanges will also be required to conduct employee training programs and submit to annual audits.

Yet there may be more work to come in this area.

For example, Nomura Research Institute's Yasutake Okano indicated in a May 2016 report that other Japanese laws may need to change to account for the tech, including the Banking Act and Financial Instruments and Exchange Act. Reports indicate that other groups in Japan are moving to plug some of those gaps as well. According to a report from Nikkei, the Accounting Standards Board of Japan decided earlier this week to begin developing standards for digital currencies like bitcoin. Its work mirrors other efforts being undertaken elsewhere, including Australia, which began pushing for such standards late last year.

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Via Dana Lyons' Tumblr,

The percentage of respondents in UM’s survey of consumers who view a stock rally over the next 12 months as a “sure thing” is near record levels.

Most folks are familiar with the University of Michigan’s monthly consumer confidence survey. What they may not know is that the survey respondents are asked a whole host of questions. One of these questions pertains to their outlook on the stock market. Specifically, they are asked to guess as to the “Probability of Increase in Stock Market in Next Year”. Respondents’ answers are broken down into ranges of probability percentages, e.g., “1%-24%”, “25%-49%”, etc. One of the answer options is “100%” probability of a stock market increase over the next year. We like to track this statistic as a measure of public sentiment towards stocks. And based on the most recent survey, as of February, the public is relatively quite certain about the prospects of a stock market rally.

We say this because the percentage of survey respondents in the “100% probability of a stock market rally” category came in at 11%. For context, since the inception of the survey question in June 2002, there has been just one month which saw a tally exceeding 11% and just 3 others equaling that high of a number.

 

Here are the prior such months and the tally of respondents indicating 100% probability of a stock market rally.

• February 2004 (12%)
• November 2007 (11%)
• January 2015 (11%)
• June 2015 (11%)

With most sentiment-related statistics, extreme readings are contrary in nature. That is, the market typically moves contrary to the consensus opinion. That dynamic generally holds true here. Here are the 12-month returns in the S&P 500 following the above readings:

• February 2004 (+5.12%)
• November 2007 (-39.49%)
• January 2015 (-2.74%)
• June 2015 (+1.73%)

While 2 of the 4 precedents saw positive 12-month returns, they still paled in comparison to the median (+10.35%) and average (+8.02%) 12-month returns over the sample period. Plus the 2004 incident saw negative returns out to 8 months, and the June 2015 incident out to 9 months. So, in all 4 cases, the longer-term performance of the stock market was sub-par, at best.

Here is the takeaway for us. Gathering bullishness is great for stocks and the prospects for a rally. Once that bullishness hits an extreme, however. the prospects change. Based on the UM Survey Of Consumers, sentiment towards stocks has reached an extreme. And based on that alone, expectations for the next 12 months should be tempered.

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