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Authored by Tom Luongo via Gold, Goats, ‘n’ Guns blog,

Now that I’ve had a week to process it, the attack on the Saudi Abqaiq oil processing facility was more than a brilliant operation, it was a trap.

And, unfortunately, President Trump just fell in it.

My initial reaction to this was that it could have easily been a false flag to gin up a war with Iran on the eve of Israeli elections. The initial spate of questions hadn’t been answered adequately.

As the week went along, however, it became clear that the responses from all concerned to this attack that the those that took responsibility for it, the Houthis in North Yemen backed by Iranian technology, were the ones that did it.

And it all comes down to the same thing, the Saudi Aramco IPO.

This is a $400 billion deal that is vitally necessary for Crown Prince Mohammed bin Salman to pull off. His plans to modernize the Saudi economy rest completely on this deal and keeping the price of oil from collapsing into the $50’s or even $40’s worldwide.

So while Saudi Arabia and Israel had incentives to stage a ‘false flag,’ Iran and its allies had even more incentive to cripple Saudi oil infrastructure to try and scuttle the Aramco IPO by bringing into question the kingdom’s ability to control not only its borders but also its future production.

The threat to Saudi Arabia goes far beyond the Aramco IPO, however. The future of the country is at stake. Iran knows this, that’s why it happened.

And every reaction so far to this story supports the latter theory than the former. So, as much as some would like to blame Israel in this life for everything bad that happens, I don’t see it this time.

Look at it this way:

• Iran has been smirking behind their beards at the U.S. and Saudi Arabia.

• The Saudis have provided accusations with zero proof.

• Saudi Oil Minister Abdulazziz bin Salman has been running around assuring the markets everything is fine. (Read this puff piece from CNN).

• Trump refused to go to war over this incident.

• Trump instead added sanctions on Iran.

• The Fed cut interest rates and opened up a daily $75 billion repo facility due to dollar illiquidity.

• The Israelis hit the Al-Bukamai border crossing between Iraq and Syria on Sept. 17th and 18th.

Because if the Aramco IPO fails this time around the Saudis have a very limited time frame for solvency without drastically overhauling their financial system and monetary policy.

That’s why there was the mad scramble to send Secretary of State Mike Pompeo over to Jeddah.

What do I mean by President Trump walking into a trap? He announced he’s moving troops into Saudi Arabia, specifically citing economic concerns.

Saudi Arabia requested what the secretary described as “extra defensive support,” he said, and it will “send a clear message that the United States supports our partners in the region.” The move was also made with commerce in mind, as the attack included as a target the world’s largest oil processing facility.

The extra troops would help “ensure the support free flow or resources necessary to support the global economy,” Esper explained.

This is a clear move to shore up the Saudis against Iran-backed aggression and assure investors that Aramco has friends and your returns are guaranteed.

I’m sure Tulsi Gabbard is overjoyed at her ‘brothers and sisters’ being sold to the highest bidder.

This is a $400 billion deal that Wall St. punters have choked on for three years trying to drum up support for. Now that they finally have it lined up, after Trump subordinating U.S. foreign policy to it and Israel for his entire term in office, a few well-placed drones threatens to bring the entire thing crumbling down.

But this is a trap. Iran had to see this as a potential outcome of the attack and committing U.S. troops looks like a ‘check’ move to Iran’s pushing the pawn.

But it’s not. Because the U.S. can’t actually engage here without enmeshing Trump in a quagmire that is deeply unpopular back home and likely more damaging to the markets than if Trump didn’t move troops in.

Because now, with troops on the peninsula, there’s greater potential for conflict.

Moreover, the Houthis have made their point, they can hit the Saudis anywhere. And on the heels of my last article, we have reports now that they have made an incursion north into the province of Jizan.

First, attack far to the east with drones. Second, get the U.S. to commit troops to protect the oil fields and then pressure the Saudis on the ground where they aren’t looking and where American troops can’t be lest some of them come home in body bags.

As Patton would say, “This is where we hold ’em by the nose and kick ’em in the ass.”

What are the U.S. troops going to do, actually? In the end, we’re now using them as human shields to protect a country which invaded their neighbor, is on the brink of financial breakdown, and can’t effectively fight the chaos it’s unleashed.

Let’s take this one step further.

With Benjamin Netanyahu losing the election on Tuesday and likely on the outside of Israeli policy, if not civil society, the Trump administration’s plans for a deal between Israel and the Palestinians is in jeopardy.

A year ago Trump told the Saudis they would have to fend for themselves. Today he’s sending troops to protect Aramco.

What was the point of producing all this oil domestically if we’re going to spend what little money it produces in free cash flow to shore up the Saudi government?

The Kushner deal between Israel and the Palestinians been on hold for most of this year since Egpyt’s President al-Sisi rejected Trump’s overture to join Trump’s Arab NATO alliance to secure Israel’s southern border.

Events since then have conspired to keep its proposal delayed officially.

So, imagine my shock that this weekend I woke up to a headline that there are street level protests against al-Sisi’s government that sprang up ‘suddenly’ and without warning.

Say no to Mafia Don’s foreign policy goals? Be regime changed.

How much further is Trump going to go to stitch together this deal? So far he hasn’t been willing to engage in direct confrontation but that’s where this response heads him towards. It leaves U.S. troops vulnerable not only to an actual attack but also to a false flag involving the deaths of American soldiers.

The President had a choice and he chose poorly.

*  *  *

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Just one month after the San Fran Fed remarkably flipflopped on the topic of negative rates, and after praising NIRP as recently as February published a letter, titled “Negative Interest Rates and Inflation Expectations in Japan” which reached the diametrically opposite conclusion: that contrary to economist expectations – and we highlight “economist”, because this conclusion would have been obvious to anyone with a semi-functioning frontal cortex – Japan’s negative rate experience “resulted in decreased, rather than increased, immediate and medium-term expected inflation.“

In other words, NIRP actually compounded the problem it was meant to address, and hardly the panacea that the San Fran Fed said back in February is what would have helped quicken the recovery.

Here is the summary from the paper:

After Japan introduced a negative policy interest rate in 2016, market expectations for inflation over the medium term fell immediately. This can be seen by assessing how prices for Japanese bonds with embedded deflation protection responded to the policy announcement. The reaction stresses the uncertainty surrounding the effectiveness of negative policy rates as expansionary tools when inflation expectations are anchored at low levels. Japan’s experience also illustrates the desirability of taking preemptive steps to avoid the zero interest rate bound.

But… but… the San Francisco Fed in February said precisely the opposite.

Things indeed move fast when one is a modern day voodoo charlatan, also known as “economist.”

Why do we bring it up? Because earlier today, the same San Francisco Fed, which now occupies at least 3 honorary squares in the Hall of “Researchers” who “Research” the Patently Obvious To Anyone Who Is Not An Idiot, published a note in which it was shocked to find that the market is not only openly mocking the Fed’s own trivial – and traditionally worthless – exercise in forecasting, sometimes known as the “dot plot”, but expects the Fed’s rosy outlook on the economy over the next two years to be dead wrong.

Interest rate derivatives—financial investments whose value depends on interest rates—provide useful information about the risk of short-term rates falling again to the zero lower bound. According to new market-based estimates, the probability of a return to the lower bound by the end of 2021 is about 24%. This is roughly in line with other survey-based and model-based estimates of zero lower bound risk. In recent months, the market-based measure of lower bound risk has increased markedly.

As a reminder, when it comes to the future of the Fed Funds rate, rarely has the market disagreed as profoundly with the Fed as it does now. To wit, as shown in the chart below, when it comes to 2021, whereas the average Fed “dot” expect a rate of 2.125%, or one hike from the current level, the market implied rate is about 100bps lower, or 1.16 according to Fed Fund Futures.

What is fascinating about the above chart, is not what it shows – it has been long known that the divergence between the Fed’s and the market’s forecasts has never been greater- but that the Fed only now appears to be figuring this out.

As San Fran Fed economists Michael D. Bauer and Thomas M. Mertens write in “Zero Lower Bound Risk according to Option Prices“, “accurately assessing and quantifying downside risks are of paramount importance to investors, policymakers, and professional forecasters” and go on to note that “this Economic Letter introduces and evaluates a new risk measure based on option prices in financial markets. Specifically, we use prices of Eurodollar options to estimate the probability that future short-term interest rates will return to levels near the zero lower bound (ZLB). The market’s view of this probability provides a useful model-free measure to assess both the current level of ZLB risk across different future horizons and the changes in risk perceptions over the past year.”

Yes, the career economists at the San Fran Fed which a year ahead of the biggest housing crisis (under Janet Yellen) failed to spot even a trace of the upcoming 2007/2008 housing bubble bursting – and we now know why – have finally discovered Eurodollar futures.

Bravo.

But it’s what they discover once they start digging into the details of the ED future that leaves them shocked: according to the market, there is now a 24% probability that the Fed Funds rate will hit the dreaded zero bound by 2021, to wit:

Figure 2 shows our current estimates of ZLB risk. Since Eurodollar options are available for a range of different expiration dates, we can calculate our risk measure for various future horizons. The resulting probabilities across horizons are what we call the term structure of ZLB risk, which Figure 2 plots for quarterly horizons from December 2019 to December 2021. The downside risk is small for the December 2019 horizon; this is not surprising, since LIBOR is currently around 2% and a drop to below 0.75% over the next few months is highly unlikely. The risk then increases significantly, reaching 16% by the end of 2020 and rising further to 24% by the end of 2021.

Another way to show the above is in the chart below, which plots daily estimates of ZLB probabilities for a constant three-year future horizon, from January 2, 2018, to September 17, 2019 (blue line). It also shows the 3M10Y spread, a widely accepted indicator of imminent recession.

Of course, if the San Fran Fed had been reading Zerohedge, it would know that not only is the 0% odds rising by the day, but that – as we reported on Sept 4 – the probability of dreaded negative rates by 2021 is now a solid 4% and rising.

The San Fran Fed will eventually get there: we can’t expect too much from its employees – after all they are economists. So going back to the paper, which appears to have discovered interest rate derivatives as a source of “useful information about the economic outlook” (no really, they say that), here is the conclusion:

Current estimates suggest about a one-in-four chance of short-term rates dropping back to the ZLB within three years. While this implies the more likely outcome by a solid margin is that short-term rates will not return to the ZLB, the market’s view of this risk has increased substantially over the past year. Recent increases in our estimated ZLB probabilities have coincided with negative macroeconomic data and escalating international trade tensions. They also are in line with another prominent warning signal about the economic outlook: the yield curve has flattened and ultimately inverted.

What is the take home message from this amazing “discovery”? That the surging ZLB probability (according to market if not Fed estimates) and the inverted Treasury yield curve “suggest some growing concerns about the sustainability of the expansion, the possibility of a future recession, and a resulting easing of monetary policy that could push short-term rates back to their lower bound.“

While it is difficult to disentangle the exact drivers of the changes in ZLB risk, data indicating weakening economic conditions and increasing macroeconomic uncertainty appear to have played a major role. For example, the first peak in ZLB probability on January 3, 2019, coincided with a lower-than-expected Institute for Supply Management manufacturing data. The second significant spike occurred in March when the term spread turned negative for the first time since the Great Recession. And the most recent spikes this summer coincided with further deteriorating macroeconomic data, increased trade tensions, and rising global uncertainties.

In short, the market is saying the odds that the Fed is wrong are soaring by the day, and not only that, it is warning that whereas the Fed’s dot plot sees a rate of 2.15% by 2021, the probability of 0%, as calculated by the market, is now 24% and rising.

With that in mind, and in light of the San Fran Fed’s recent “discovery” that negative rates are actually, gasp, bad, the authors’ unspoken conclusion is simple: the Fed is shocked that the market is increasingly saying that it is not only trapped, but about to lose control. With that said, we eagerly look forward to what “research” papers the brain trust of San Fran Fed economists will be writing in 1 year when the Fed has not only launched NIRP but also QE.

Authored by Bruce Wilds via Advancing Time blog,

House Arrest An Odd Twist Of Orwellian Oversight

Over the years technology has greatly expanded the ability of government to watch the movements and control individuals. During this time I have encountered several people that have run afoul of the law in some way or other the way the legal system deals with people is also changing. While many of us see house arrest as a great option to throwing minor offenders into a prison system filled with hardcore criminals it does have shades of totalitarianism. A recent article on this site explored the difficulty society is having in getting people to obey its rules and laws. Without a doubt, the failure to enforce laws to deter minor acts of stealing and such impacts our culture over time. Sadly, this is not a problem just in America but across the world. as the cost of enforcement has soared and the system struggles to dole out justice.

House Arrest Turns Your Home Into A Jail

The focus of this article is to explore how sophisticated the state has become and its ability to turn your home into an Orwellian prison. Crumbling justice systems have forced courts to prioritize crimes by seriousness and explore new ways of getting people to behave. This translates into petty criminals being allowed to walk free for crimes such as shoplifting, minor assault, vandalism, fraud, and DUIs. A rapidly growing alternative to throwing a person convicted of a crime in jail is some form of house arrest. This is a term most of us heard but do not understand the full scope of what it may encompass.

House arrest typically isn’t a judge’s first choice for punishment but it is becoming more common as the cost of incarceration rises. This is considered a privilege normally requested by the defendant’s attorney, who would then have to establish to the court’s satisfaction that it’s a good idea and why. Sometimes, house arrest is issued as a condition of bail. Bernie Madoff, charged with defrauding investors of billions of dollars, was released on $10 million bail and house arrest pending his trial. House arrest rules and regulations tend to vary widely from state to state and county to county but one common factor is the Orwellian nature of near-total control.

Make no mistake, the abilities and options available to the government to enforce turning your home into a jail can boggle the mind. House arrest is only one of the alternatives to jail including a suspended sentence, probation, fines, and community service. Most offenders eligible for house arrest are confined to their home instead of spending time  in jail. Depending on their situation and the ruling of the court a person on house arrest is usually electronically monitored through an ankle monitor with a GPS tracking system. It can’t be removed and is electronically connected to local police headquarters giving off signals when it goes out of its allowed area. The word arrest is somewhat misleading in that it is really house sentencing and many variations of it exist.

One thing is clear when looking into this issue and that is Orwellian control is almost complete. The extent of control depends on the sophistication of the technology employed. Some electronic transmission systems worn in addition to the ankle monitor are equipped with breathalyzers which the prisoners are required to breathe into.periodically. The data is transmitted back to the agency. Some monitors measure alcohol concentration in the blood 24/7. Also, court representatives can do surprise visits for random testing. Drug and alcohol use is not permitted during house arrest, even if the underlying crime did not involve substance abuse. The frequency of such testing is generally increased when issues of abuse do exist.

Ankle Monitor With A GPS Required

Not only can the electronic monitoring prove a person’s location within his residence but it can tell the agency exactly where the convict is and whether he’s done anything to the ankle monitor. Some of these systems are even equipped with photographic capabilities so if the agency calls the convict, the system will snap a picture of him answering the telephone.GPS can also be included which allows the agency to track the convict and locate him on a map if the person is granted permission to leave their residence. People under house arrest are sometimes permitted to leave home to take care of certain family responsibilities or to attend religious services.

One disadvantage to house arrest for the offender is the person won’t be able to take advantage of good time credits. This is the incentive system that allows them to serve less of a jail sentence as a reward for good behavior. Below are a few of the options or things people on house arrest face. Many people think that house arrest is like being in jail and they will have to be there all day, every day. This is not always the case. Depending on your circumstances, the severity of the crime, and a person’s criminal record, the judge may allow “breaks” from house arrest. This means a person may be able to go to work, school, doctors appointments, counseling sessions, community service, and other court-approved activities. The court may also order a curfew requiring you return directly from the allowed activity.

Another twist is a person under house arrest should expect to pay some of the costs. House arrest is cheaper for the court system than putting you in jail. Incarcerating a person in prison can cost over $20,000 a year. Confining a person at home can be as cheap as $6,000 a year. Most of the time, you will be required to pay a weekly or monthly amount towards the cost of an ankle monitor, or electronic monitoring transmitter 24/7. Other costs are also involved. The price of house arrest varies from probation department to probation department. Some have a set price for everybody. Some determine the price on a sliding scale based on an offenders ability to pay.

Just like parole, if an offender violates any condition of house arrest they can be immediately arrested and sent to jail to serve out their sentence in captivity. Leaving the house, if allowed, is restricted for a person on house arrest. Some offenders are allowed to be employed, this can go either way with some states and courts allowing it while others do not. Some allow regular visits such as the doctor’s office but these must be scheduled and approved in advance. Other times they may be permitted to attend counseling in cases where drug or alcohol abuse are involved or to perform community service as part of their sentences. Exceptions are also made in order to attend court-mandated appearances or activities such as meeting with a probation or parole officer.

Programs might also allow for some offenders to do laundry, attend religious services and go food shopping. Offenders generally have a curfew and whenever they are allowed to leave their home the person is required to report in upon return. People under house arrest also have access to television and the Internet but in many cases, they do not have access to a telephone and if they do the conversations are monitored. Visits from close family members or friends may be permitted, but this depends on the convicted individual’s specific situation and factors like his state’s laws.

The court has the discretion to set restrictions on visitors, meaning a friend or loved might need to get permission from the convicted individual’s assigned officer. Minors on house arrest are more or less subject to the same rules as adults but generally allowed to go to school and sometimes allowed to leave home when they’re in the company of a parent or legal guardian. Some states require that the parent check with the probation officer first, and if the child breaks the rules they must report it to the authorities. Typically minors can’t have friends stop by to visit but are sometimes allowed to engage in phone communications with an approved list of people.

This is a glimpse of government’s ability to totally control our lives. This picture of your home as a prison may eventually be extended to include your city or country if the government continues to expand its reach. Signs of this happening can now be seen in China where a surge in facial recognition and social point system has begun to reshape society. It is interesting how few people have commented on the way passport requirements and higher cost have reduced the ability of many people to travel. If this continues there may come the day when only the elite and wealthy are allowed to cross borders.

Political unrest in Ukraine has forced the organizers of a Kiev sex party to resort to handpicking its guests, instead of allowing public ticket sales, according to the NY Post. 

Many of the expected guests at an upcoming orgy organized by sex-party group Snctm were said to be “rich, powerful Russians”, who aren’t in favor in Ukraine at the moment. 

This has the party’s organizers on edge.

One sex party insider said:

 “We’re concerned that heavily armed groups of Ukrainian police will come in and zip tie and detain everyone at gunpoint. This happens.”

The insider continued:

 “These parties are tolerated when the attendees are aligned with the political groups in power. When that ceases to be the case, we become a target for political [and] law-enforcement harassment.”

Even though Snctm hosted parties in Kiev in January and May, the company’s new management has grown weary about the idea of risking another ticketed event in the midst of the current geopolitical climate. 

The insider concluded: 

“Many of our attendees are politically exposed, and a group of rich, powerful Russians having a sex party in Ukraine right now is something we have to keep discrete and underground. They just had a war; Kremlin-Ukraine relations are a bit touchy.”

Previous Snctm parties in the United States have been held in the Hamptons, New York City and Miami and have been attended by celebrities like Gwyneth Paltrow and Bill Maher. 

Via Greg Hunter’s USAWatchdog.com,

Analyst and entrepreneur Karl Denninger says the economy is good for some people but not so good for others.

Denninger explains, “I think it is very good for people in the top couple of percent.  I think it is moderately okay for people in the top 10%. It is terrible for people that are further down the line…”

“The real problem is not that it is good or bad for any particular group, but it is the entire thing is running on borrowed funds.  In other words, the days of you going and working and you saving your economic surplus, that’s gone.  You don’t have an economic surplus.  If you look at the statistics and they say the majority of Americans cannot come up with $400 for an emergency, please tell me how we can have a great economy if the majority of people cannot fix a transmission if it blew up in their car tomorrow.”

So, why are big money managers and investors like Ray Dalio and Mark Mobius telling people to buy precious metals?  Do they see the economy hitting the wall? Denninger says, “Everyone sees the wall…”

“Everyone sees the problem.  The monthly Treasury statements are public.  Go pull it up on a computer. . . . It is the general ledger of the federal government, and it’s terrible.  The thing is everyone knows it is terrible, and it has been terrible for a long time.  It was terrible when Obama was President, and it is terrible now.”

Denninger contends that there is so much debt and leverage in the world that the whole economy could turn dramatically worse without much warning.  He also thinks we would not just face a financial calamity as in 2008, but possibly extreme social unrest given the partisan political environment. Denninger says,

“You need to be looking at what sort of exposure do you have if everything goes down the toilet.  Also, we don’t just have an economic calamity, but we have a civil order calamity because the people on the Left want that…

We have two candidates running for President, and thank goodness that they are both polling at 1% so they have zero chance of winning, but they say they will start a civil war, and they are willing to kill 15 million Americans, murder them, if they don’t get their way on guns.  I don’t know if anybody understands how dangerous that statement is… That’s a civil war.

That’s what is going on in Yemen right now… Look what just happened in Saudi Arabia.  They had 10 drones, and they blew up some stuff.  How hard would it be for somebody dedicated to do something like that in this country and cripple some of our cities? 

How long would civil order persist if that happened to, let’s say, Chicago, and the official estimate is it will be two or three months before the power comes back on?  I don’t want to see this, but you have politicians that are making noises who are going to try to impose this sort of stuff… If you are dependent on the medical field or you have debt and a job and you can’t make it for three to six months without them, you’ve got a problem and you need to do something about it.”

Join Greg Hunter as he goes One-on-One with Karl Denninger, founder of Market-Ticker.org.

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The truth is emerging four decades after the fact: the Carter administration knew of a clandestine Israeli nuclear test in the 1970s, but turned a blind eye, Foreign Policy reported this weekend, based on new analysis of declassified government documents. 

The report strongly suggests the administration was worried about Carter’s reelection should the Israeli test be revealed, and also about negative impact on the Israel-Egypt peace treaty, only a year old at the time. The FP report begins dramatically: 

Shortly before sunrise on Sept. 22, 1979, a U.S. surveillance satellite known as Vela 6911 recorded an unusual double flash as it orbited the earth above the South Atlantic. At Patrick Air Force Base in Florida, where it was still nighttime on Sept. 21, the staff in charge of monitoring the satellite’s transmissions saw the unmistakable pattern produced by a nuclear explosion — something U.S. satellites had detected on dozens of previous occasions in the wake of nuclear tests. The Air Force base issued an alert overnight, and President Jimmy Carter quickly called a meeting in the White House Situation Room the next day.

Carter wrote in his diary of the September 22, 1979 event: “There was an indication of a nuclear explosion in the region of South Africa – either South Africa, Israel using a ship at sea, or nothing,” according to the report. 

Problem was that under the 1977 Glenn Amendment to the Arms Export Control Act, the United States would have to cease all arms assistance to any nation not a signatory to the Nuclear Non-Proliferation Treaty should they conduct a nuclear test. 

So to deflect the potential for a scandal and forced cessation of US aid to Israel’s military, the administration convened a panel of ‘experts’ and scientists whose job it was to publicly dismiss the possibility that Israel detonated a nuke. This would be the official line of the administration within the DoD: to essentially cover-up the satellite findings and to proclaim is wasn’t a nuclear flash at all detected on that day. 

“It is our collective judgment that the September 22 signal was probably not from a nuclear explosion,” the panel concluded in May 1980. 

And yet, the internal documentary record said otherwise, as indicated by President Carter’s own hand: 

“We have a growing belief among our scientists that the Israelis did indeed conduct a nuclear test explosion in the ocean near the southern end of Africa,” the former president personally recorded in his diary on February 27, 1980.

The Foreign Policy report revealed, shockingly: “The Carter administration was so afraid to enforce the Partial Test Ban Treaty against Israel’s 1979 violation that it did what it could to erase or keep hidden evidence of its detection of a test.” Thus the hard science and evidence survived in the classified records, while the lie and cover-up attempt did also. 

From there it became an entrenched lie. All future administrations would use it as a smokescreen to shield public attention from what top officials well understood — that close US ally Israel has long been a nuclear power, despite its public stance to the world that it is not. 

Great FP feature on how the Carter administration covered up for a rogue nuclear power in the Middle East. https://t.co/3qLBxP3mat

— James Palmer (@BeijingPalmer) September 22, 2019

“Subsequent administrations, Republican and Democratic alike, went along with this, and the US government still pretends it knows nothing about any Israeli nuclear weapons,” FP concluded further.

The official US government line to this day is that what was recorded by the Vela 6911 satellite was not an Israeli nuclear test. However FP’s team of scientists, academics, and former government officials and nuclear experts that analyzed the declassified record and data have offered their glaring contradiction in a foremost establishment policy magazine. 

“We believe, based on a great deal of documented and anecdotal evidence, that the Vela event was indeed the detection of a low-yield Israeli nuclear test,” the report concluded.

Authored by Mac Slavo via SHTFplan.com,

David Rosenberg, the Gluskin Sheff chief economist and strategist, is warning that a recession is coming. Rosenberg says economic growth in the United States will turn negative sooner than most investors anticipate and the Federal Reserve is powerless.

Even if the central bank lowers interest rates to zero, a recession will still grip the U.S. within 12 months, Rosenberg predicts. “There’s a recession coming in the next 12 months,” he stated with fact last Thursday on CNBC’s “Futures Now. The Fed just lowered its benchmark interest rate last Wednesday by a quarter-point and Fed Chairman Jerome Powell signaled rates would only be cut again if there’s new evidence the economy is softening.

However, Powell said he didn’t expect that to happen. The evidence is showing otherwise.

“The only reason that he said that he’s optimistic on the outlook is because of exactly what the Fed is doing which is breathing stimulus back into the economy,” said Rosenberg, who came into 2019 with a recession warning and has been known as a perma-bear on Wall Street for decades. 

Government numbers show that economic growth has not gone negative yet this year, but Rodenberg says that it is only a matter of time before it does.

Because of the economy slowing, Rosenberg thinks that Federal Reserve chairman, Jerome Powell will continually be lowering rates through 2020.

“I think that they’ll go in October and December and through 2020,” he added of the Fed’s likely decision.

“The economy is already slowing down,” Rosenberg said.

“Earnings are actually contracting.”

Rosenberg stressed that it doesn’t matter how much the Federal Reserve decides to cut rates, and lowering them to zero will end up with the same net result: a massive recession.

E-cigarette maker Juul Labs Inc. is under criminal investigation by federal prosecutors from the US attorney’s office in the Northern District of California, according to the Wall Street Journal, citing people familiar with the matter. 

While the focus of the probe is unknown, the fast-growing company has come under heavy scrutiny by state and federal officials over a rapid rise in vaping among teenagers – with the Federal Trade Commission (FTC), the Food and Drug Administration (FDA) and several state attorneys investigating the company’s marketing practices. To top it off, the Trump administration announced earlier this month that it was planning to ban most flavored e-cigarettes. 

The FTC’s probe is focused on whether Juul used social-media influencers and other marketing to appeal to minors, while the FDA is conducting a more wide-ranging investigation, covering marketing and outreach as well as the high nicotine content of Juul’s refill pods. –Wall Street Journal

The San Francisco-based Juul claims that it has never marketed to teens – despite a Stanford Research white paper which concluded that the company’s marketing “was patently youth-oriented.” 

In the summer of 2015, Juul’s product launch coincided with sampling events in major US cities. Good-looking young people distributed free Juuls at movie and music events. “The principal focus of these activities was to get a group of youthful influencers to accept gifts of Juul products,” the report states, “to try out their various flavors, and then to popularize their products among their peers.”

The same year, Juul launched a “Vaporized” campaign. Again, its colorful ads — blasted out on billboards, in magazines, and on social media — featured happy, playful 20-something models. –Vox

According to the Journal, “While cigarette smoking has dropped among teens, nearly 28% of high school students this year said they had used an e-cigarette at least once in the past 30 days, up from 21% a year earlier, according to a recent federal survey.”