Author: admin

Authored by Simon Black via SovereignMan.com,

Well, it happened. Yesterday the US stock market broke the all-time record for the longest bull market ever.

This means that the US stock market has been generally rising for nearly a decade straight… or even more specifically, that the market has gone 3,453 days without a 20% correction.

That’s a pretty big milestone. And there’s no end in sight. So it’s possible this market continues marching higher for the foreseeable future.

But if you step back and really look at the big picture, there are a lot of things that might make a rational person scratch his/her head.

For example– the Russell 2000 index (which is comprised of smaller companies whose shares are listed on various US stock exchanges) is currently right at its all-time high.

Yet simultaneously, according to the Wall Street Journal, a full SIXTY PERCENT of corporate debt issued by companies in the Russell 2000 is rated as JUNK.

How is that even possible– a junk debt rating coupled with an all-time high? It’s as if investors are saying, “Well, there’s very little chance these companies will be able to pay their debts… but screw it, I’ll pay a record high price to buy the stock anyhow.”

It just doesn’t make any sense.

Looking at the larger companies in the Land of the Free (which make up the S&P 500 index), the current ‘CAPE ratio’ is now the second highest on record.

‘CAPE’ stands for ‘cyclically-adjusted price/earnings ratio’. Essentially it refers to how much investors are willing to pay for shares of a company, relative to the company’s long-term average earnings.

And right now investors are willing to pay 33x long-term average earnings for the typical company in the S&P 500.

The median CAPE ratio based on data that goes back to the 1800s is about 15.6.

So at 33, investors are literally paying more than TWICE as much for every dollar of a company’s long-term average earnings than they have throughout all of US market history.

And it’s only been higher ONE other time– just before the 2000 stock market crash (when the dot-com bubble burst).

33 is higher than right before the 2008 crisis. It’s even higher than it was before the Great Depression.

In addition to the CAPE ratio, the average company’s Price-to-Book ratio is also the highest since the 2000 crash.

In other words, investors are not only paying a near record amount for every dollar of a company’s long-term average earnings, but they’re also paying a near record amount for every dollar of a company’s net assets.

The list of these record / near-record ratios goes on and on. Investors are also paying, for example, an all-time record Price-to-Revenue ratio… meaning that investors have never paid a higher price for every dollar of a company’s revenue… EVER.

The general narrative is that everything is awesome in the US economy and will apparently remain that way forever and ever until the end of time.

I certainly agree that there’s a lot of surface-level strength in the US economy right now.

But I really wonder about the long-term.

Just look at the average US consumer: despite the ultra-low unemployment rate in the US, average wages have barely budged.

Pew Research released a great article earlier this month showing that, for most US workers, their wages have been stagnant for DECADES after you adjust for inflation.

Plus we’ve all seen the statistics about how little the average American has stashed away in savings.

Federal Reserve data from the Survey of Consumer Finances shows the median bank account balance is just $2,900. And for those under 35 it’s just $1,200.

Overall the average US consumer has stagnant wages, little savings, almost nothing put away for retirement, record high credit card debt, record high student debt… and now rising inflation.

So I’m just curious where all these companies are going to get their long-term revenue growth. Who is going to be buying all their products? Because the US consumer seems pretty tapped.

(And if things are that bad in the boom times, just imagine what’s going to happen to US consumer behavior when recession hits again…)

And aside from the US consumer, there are also a lot of companies that are going deeper into debt.

I write about Netflix quite often, which has to take on billions of dollars of debt each year just to stay afloat.

But even bigger companies have bizarre, head-scratching problems.

Coca Cola is a great example– one of the oldest, most stable companies in the US market.

Back in 2006 Coca Cola earned over $5 billion in profit. Last year Coca Cola earned $1.3 billion in profit.

In 2006 Coca Cola had $1.3 billion in long-term debt. Last year Coca Cola had $31 billion in long-term debt.

Yet Coca Cola’s stock price is near a record high, more than double its stock price in 2006.

How does that make any sense?

What’s more– Coca Cola’s ‘Free Cash Flow Yield’ is now 2.8%.

This means that, after all expenses, accounting adjustments, and investments, the business generates enough money to pay investors a cash dividend worth 2.8% of the current share price.

Yet Coca Cola’s -actual- dividend yield is 3.4%.

How is it possible that that Coca Cola consistently pays its investors more money than the business generates? Easy. They just go into debt.

General Motors is another great example: GM pays its investors a dividend yield of 4.1%. And that’s super attractive. Yet GM’s Free Cash Flow is actually NEGATIVE.

There’s so much of this nonsense going on right now– companies going deeper into debt to pay dividends and support their share prices despite lackluster business performance.

But again, despite the rising debt (and the rising level of JUNK debt), investors are still willing to pay record high multiples for their investments.

This just doesn’t strike me as a great way to generate wealth and prosperity.

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John Maynard Keynes would be thrilled to hear about the brilliant solution Chicago has come up with to help solve its pension deficit: issue a $10 billion bond and take on more debt.

Chicago’s pension deficit has been a problem that we’ve been covering at length. The stunning funding gap, which comes in at about $28 billion, is an issue that Chicago Mayor Rahm Emanuel campaigned on fixing, along with the rest of the city’s finances.  “It’ll be a big test for sure,” said Vikram Rai, head of municipal strategy at  Citigroup Inc. “But if it works it’ll set a good precedent for the other cities and states that have pension problems.”

It won’t work.

Absent dramatic haircuts to pension promises, it’s simply impossible to resolve the third largest US city’s pension crisis: as we noted last month when looking at the broader pension problems faced by Illinois, in 1987, pension promises made to active workers and retirees in the state’s five state-run pension plans totaled just $18 billion. By 2016, they had ballooned to $208 billion. That’s a cumulative 1,067 percent increase.

Contrast that to the state’s budget (general fund revenues) which was up just 236 percent over the same time period. Or household incomes, which were up just 127 percent. Or inflation, up just 111 percent. Promised pension benefits have blown past any ability of the state, the economy or taxpayers to pay for them.

Which leaves only debt as the “solution”, one which reportedly came after Chicago leaders gave up on actual long-term economic solutions such as budget cuts, reductions in benefits and tax increases. With those pesky old “traditional” ways to shore up in the city’s finances seemingly causing too much austerity for America’s third largest city, they have instead embraced the new school of economics in the form of considering a $10 billion bond issuance, one which would push pension obligation bond issuance in Chicago to a 15 year high.

The city’s deep and thoughtful plans for the proceeds of the bond offering are simple: invest (i.e., gamble) and try and earn more from the bond proceeds than they will have to pay out. And what better time to gamble than 10 years into a bull market and a credit cycle that hasn’t corrected in any meaningful way yet?

The Wall Street Journal points out that the track record of these bonds is mixed. They have helped catalyze bankruptcies in Detroit, Stockton, California and San Bernardino, California.

With that being said, these bonds have been a popular tool to attempt to solve pension gaps: more than 400 governments have issued these types of bonds over the last 30 years. The state of Illinois issued a $10 billion bond back in 2003, which has so far been the largest by any US city or state.

But that bond did not help out Illinois, as now the state has reportedly just 35% of what it needs to afford what it owes to its workers. Stunningly, that failure has apparently spurred talks of a $107 billion pension obligation bond deal which was first floated first in January,  but believe it or not, hasn’t gained momentum according to the WSJ – maybe because  not even $107 billion would be enough to fully fund the Illinois pension system, which owes over $129 billion after years of failing to make adequate annual contributions.

That said, these bonds, like any refi, can be beneficial when done in conjunction with cost cutting and increasing revenue. Houston is a great example, where a $1 billion bond that they issued in 2017 was called a “credit positive” event by Moody’s – because it was part of a much larger systemic change. Obviously, taking on more debt without making other changes isn’t a credit positive event in any situation. It’s simply more debt, on worse terms.

More importantly, the performance of these bonds is highly correlated to how the stock market is doing. For instance, the WSJ article notes that pension obligation bonds issued since 1986 had mostly lost money for the borrowers. It was only in 2014 that it was reported that these losses had reversed and the returns were exceeding borrowing costs.

The one obvious major change is likely the fact that the stock market had nearly doubled over the prior 6 years.

Meanwhile, Chicago’s real problem, as in the case of many other cities, is that its pension mess is of the government’s own making. The $28 billion shortfall emerged from ignoring financial basics: too few contributions, optimistic assumptions and overpromising on benefits. Not only that, but Rahm Emanuel has also already lobbied for tax increases as a part of his attempt to right the city’s finances. 

Issuing debt became an option in 2017 after GCM Grosvenor Chairman Michael Sacks, who acts as an advisor to Emanuel, made a presentation to him about the city’s potential options. The presentation assumed that the bond would carry a 5.25% interest-rate.

There seemed for a second to be one voice of reason, when as the WSJ describes, the director of municipal bond research at Evercore Wealth Management, Howard Cure, was asked about the deal and he simply stated that it would weaken the city’s credit. But, like any good banker, he then went back on his statement and said that if the rate was high enough, he wouldn’t rule out buying it (and perhaps underwriting it for a handsome fee).

The city’s finance Chief is expected to decide on the idea next week. 

via RSS https://ift.tt/2MvF6tB Tyler Durden

Authored by Raul Ilargi Meijer via The Automatic Earth blog,

If there’s one thing that is exposed in the sorry not-so-fairy tale of former Trump aides Paul Manafort and Michael Cohen, it’s that Washington is a city run by fixers. Who often make substantial amounts of money. Many though by no means all, start out as lawyers and figure out that let’s say ‘the edges of what’s legal’ can be quite profitable.

And it helps to know when one steps across that edge, so having attended law school is a bonus. Not so much to stop when stepping across the edge, but to raise one’s fees. There’s a lot of dough waiting at the edge of the law. None of this should surprise any thinking person. Manafort and Cohen are people who think in millions, with an easy few hundred grand thrown in here and there.

But sometimes the fixers happen to come under scrutiny of the law, like when they get entangled in a Special Counsel investigation. Both Manafort and Cohen now rue the day they became involved with Trump, or rather, the day he was elected president and solicited much more severe scrutiny.

Would either ever have been accused of what they face today had Trump lost to Hillary? It’s not too likely. They just gambled and lost. But there are many more just like them who will never be charged with anything. Still, a new fixer name has popped up the last few days who may, down the line, not be so lucky.

And that’s not even because Lanny Davis is a registered foreign agent for Dmytro Firtash, a pro-Russia Ukrainian oligarch wanted by the US government. After all, both Manafort and Cohen have their contacts in that part of the world. Manafort made tens of millions advising then-president Yanukovich in the Ukraine before the US coup dethroned the latter. Cohen’s wife is Ukrainian-American.

Lanny Davis is a lawyer, special counsel even, for the Clintons. Has been for years. Which makes it kind of curious that Michael Cohen would pick him to become his legal representation. But that’s not all Davis is involved in. Like any true fixer, he has his hands in more cookie jars than fit in the average kitchen. Glenn Greenwald wrote this in August 2009 about the health care debate:

Lanny Davis Disease

After Tom Daschle was selected to be Barack Obama’s Secretary of Health and Human Services and chief health care adviser, Matt Taibbi wrote: “In Washington there are whores and there are whores, and then there is Tom Daschle.” One could easily have added: “And then there’s Lanny Davis.” Davis frequently injects himself into political disputes, masquerading as a “political analyst” and Democratic media pundit, yet is unmoored from any discernible political beliefs other than: “I agree with whoever pays me.”

It’s genuinely difficult to recall any instance where he publicly defended someone who hadn’t, at some point, hired and shuffled money to him. Yesterday, he published a new piece simultaneously in The Hill and Politico – solemnly warning that extremists on the Far Left and Far Right are jointly destroying democracy with their conduct in the health care debate and urging “the vast center-left and center-right of this country to speak up and call them out equally” – that vividly illustrates the limitless whoring behavior which shapes Washington generally and specifically drives virtually every word out of Lanny Davis’ mouth.

Davis’ history is as long and consistent as it is sleazy. He was recently hired by Honduran oligarchs opposed to that country’s democratically elected left-wing President and promptly became the chief advocate of the military coup which forcibly removed the President from office. He became an emphatic defender of the Israeli war on Gaza after he was named by the right-wing The Israel Project to be its “Senior Advisor and Spokesperson.” He has been the chief public defender for Joe Lieberman, Jane Harman and the Clintons, all of whom have engaged his paid services.

And as NYU History Professor Greg Grandin just documented: “Recently, Davis has been hired by corporations to derail the labor-backed Employee Free Choice Act, which would make it easier for unions to organize, all the while touting himself as a “pro-labor liberal.” Davis was also the chief U.S. lobbyist of the military dictatorship in Pakistan in the late 90s and played an important role in strengthening relations between then President Bill Clinton and de facto president General Perez Musharraf.”

There’s much more in that article, but you get the drift. And now Davis, the Clinton fixer, is Michael Cohen’s lawyer. The fixer defending a fixer. So who pays the bill? Well, ostensibly no-one, because Davis started a Go Fund Me campaign where people can donate so Cohen “can tell people the truth about Trump”. The goal is $500,000. Which goes to .. Lanny Davis.

On TV yesterday he apparently promoted a wrong URL, which was promptly picked up by someone else who had it redirect to the Trump campaign. Even fixers screw up, right? Still, there’s already well over $100,000 donated for Cohen Davis. But why $500,000? One of the accusations against Cohen concerns lying to a bank for a $20 million loan. He bought an apartment not long ago for $6.7 million. He owned multiple apartments in Trump buildings.

Did he lose everything when Robert Mueller et al raided his office, home and hotel room on April 9 2018? Were all his assets frozen? Possibly. What we do know is that he ‘expected’ the Trump campaign to pay for his legal fees. Which they declined. Or rather, as Fortune reported in June: “The Trump campaign has given some money to Cohen to help cover legal expenses for the Russia investigation. To date, though, it has not offered financial assistance in the investigation of his business practices.”

It seems safe to assume that’s the point where Cohen turned, or was turned, to Lanny Davis. From a full decade of being Trump’s fixer to being fixed by the Clintons’ fixer. That’s a big move. It raises a number of questions:

First, why did Trump not pay Cohen’s legal fees? This is 2 months after the raid on the man’s office, home, hotel room, in which huge amounts of files and disks etc. were seized.

Second question: if Lanny Davis only now sets up a Go Fund Me campaign, who’s been paying him over the past 2 months? Did Cohen sell assets, or is someone else involved?

Anyway, so Davis goes on TV with big words about how Cohen will tell all about Trump -provided people donate half a million- and adding “I know that Mr. Cohen would never accept a pardon from a man that he considers to be both corrupt and a dangerous person in the oval office. And [Cohen] has flatly authorized me to say under no circumstances would he accept a pardon from Mr. Trump.”

Oh, and that “the turning point for his client’s attitude toward Trump was the Helsinki summit in July 2018 which caused him to doubt Trump’s loyalty to the U.S.” That, to my little brain, doesn’t sound like something that would come from Cohen. That sounds more like a political point the likes of which Cohen has never made. That’s plain old Russiagate.

But anyway. So Lanny Davis, fixer of fixers and presidents, goes on a talk-show tour last night and what do you think happens? He walks back just about everything he’s said the previous day. Aaron Maté made a list in this Twitter thread:

1/ In a few minutes of airtime today, Michael Cohen attorney Lanny Davis has rejected a key Steele dossier claim, and, more significantly I think, the basis for all of the ceaseless, frenzied speculation that Cohen has something to offer Mueller on Trump-Russia collusion:

— Aaron Maté (@aaronjmate) August 23, 2018

2/ First, contradicting a 7/27 CNN report (https://t.co/hBw7XxHKxq), Davis tells @andersoncooper that Cohen has *no knowledge* that Trump was aware of Trump Tower meeting in advance: pic.twitter.com/fMvSduM2RV

— Aaron Maté (@aaronjmate) August 23, 2018

3/ Right after, Davis walks back his already heavily qualified innuendo to @Maddow — which generated endless chatter — about Cohen being useful to Mueller’s probe on collusion & knowing of hacking. Now Davis claims he was “tentative”, that Cohen “may or may not be useful”, etc: pic.twitter.com/3nNinTDp9h

— Aaron Maté (@aaronjmate) August 23, 2018

4/ Earlier in the day, Davis also asserted that Cohen was “never, ever” in Prague — undermining a key claim in the Steele dossier that he went there in August/September 2016 as part of the collusion scheme: https://t.co/UvYbfVSDBw

— Aaron Maté (@aaronjmate) August 23, 2018

5/ That Prague undermines a key Steele allegation, one that got amplified in April when McClatchy — without any corroboration since — reported that Mueller has evidence Cohen was in Prague: https://t.co/3pHnz1T28o

— Aaron Maté (@aaronjmate) August 23, 2018

6/ So in short: Lanny Davis has not just denied what was explosively alleged about Cohen-Trump by Steele, CNN, and McClatchy, but has also walked back the explosive speculation about Cohen-Trump that Lanny Davis himself generated.

— Aaron Maté (@aaronjmate) August 23, 2018

Is Michael Cohen sure he wants this guy as his lawyer? Is he watching this stuff?

If Cohen and Manafort have broken laws, they should be punished for it. The same goes for all other Trump campers, including the Donald. But it would be good if people realize that Cohen and Manafort are not some kind of stand-alone examples, that they are instead the norm in Washington. And Moscow, and Brussels, London, everywhere there’s a concentration of power. In all these places, and probably more so in DC, there are these folks specializing in the edge of the law.

What do you think will happen when someone of the stature of Bob Mueller spends 18 months investigating the Clintons and their fixers? Perhaps the events of the past few days won’t bring such a 2nd Special Counsel any closer, but by the same token they might do just that. Offense is the best defense.

I don’t know, we don’t know, what monsters Trump has swept under his luxurious carpets. But we do know that those are not the only monsters in Washington. Meanwhile, the Steele dossier that was used to start the entire Mueller remains just about entirely unverified. The Russian collusion meme he was tasked with investigating has so far come up empty.

That he would find something if he tried hard enough was obvious from the start. That is both dangerous in that the mandate of a Special Counsel should be limited lest it becomes endless and veers off the reasons it was initiated, as well as in the risk that it can easily turn into a party-political tool to hurt one’s opponent while one’s own dirt remains unscrutinized.

In the end, I can draw only one conclusion: there are so many sharks and squids swimming in the swamp that either it should be expanded or the existing one should be cleaned up and depopulated. So bring it: investigate the FBI, the Clintons, and fixers like Lanny Davis and Michael Avenatti, the same way the Trump camp has been.

Because if you don’t do that, you can only possibly end up in an even bigger mess. You can’t drain half a swamp.

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President Trump was advised against pardoning his former aide Paul Manafort several weeks ago, admitted Trump’s personal attorney Rudy Giuliani, reports the Washington Post. 

The subject of pardoning Manafort came up while he was on trial for multiple counts of bank fraud and tax evasion and the president was expressing his anger at how federal prosecutors had “beat up” and mistreated Manafort, Trump attorney Rudolph Giuliani said in an interview. –WaPo

Given that this conversation occurred “several weeks ago,” Perhaps Trump had read July reports that Manafort was being held in solitary confinement for 23 hours a day while awaiting trial. (Unfortunately for Manafort he wasn’t running a Jihad camp in New Mexico to train children for mass shootings, allegedly of course).

I feel very badly for Paul Manafort and his wonderful family. “Justice” took a 12 year old tax case, among other things, applied tremendous pressure on him and, unlike Michael Cohen, he refused to “break” – make up stories in order to get a “deal.” Such respect for a brave man!

— Donald J. Trump (@realDonaldTrump) August 22, 2018

A large number of counts, ten, could not even be decided in the Paul Manafort case. Witch Hunt!

— Donald J. Trump (@realDonaldTrump) August 22, 2018

Giuliani says that Trump’s he and fellow Trump attorney Jay Sekulow suggested at least waiting until special counsel Robert Mueller has conducted his investigation into Russian meddling in the 2016 US election – which has suffered perhaps the worst case of mission creep in history considering that we’ve gone from Russian collusion to paying off porn stars over decade-old claims. 

Mueller’s findings will eventually be presented to Deputy Attorney General Rod Rosenstein, who will then decide whether whatever they’ve come up with should be passed to Congress in order to pursue impeachment proceedings. 

“We told him he should wait until all the investigations are over,” Giuliani said of their discussion. “This [Special Counsel] case is a strange case. It won’t be decided by a jury. It will decided by the Justice Department and Congress and ultimately the American people. You have to be sensitive to public optics.”

“He said yes,” Giuliani said. “He agreed with us.”

Arriving in West Virginia for an evening rally, President Trump called his former campaign chairman Paul Manafort a “good man” and said it was a “sad thing” he was convicted in federal court.

“This has nothing to do with Russian collusion. This is a witch hunt and it’s a disgrace,” he told reporters.

“Nothing to do with Russian collusion, continue with the witch hunt.” Trump briefly talks Manafort; mum on Cohen. pic.twitter.com/8x8YswReFQ

— Josh Marshall (@joshtpm) August 21, 2018

“He feels Manafort has been mistreated,” said Giuliani. “Nobody in a case like this get’s raided in the middle of the night, put in solitary confinement,” Giuliani said. “They tried to crack him and it didn’t work. Over the last two to three weeks, he’s expressed anger and frustration about how he’s been treated.”

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Authored by Justin Raimondo via AntiWar.com,

Has there ever been a country so vilified as Russia, a leader so demonized as Vladimir Putin?

It makes me dizzy just to think of all the crimes that have been laid at that particular doorstep. I could spend the rest of this column simply listing them, from the deaths of numerous Russian journalists to the extinction of Hillary Clinton’s presidential ambitions – that and so much more! The omnipotent Russian President has apparently poisoned so many Russian expatriates in Britain that the streets are awash in polonium, novichok, and god knows what else. Why, it only took a few thousand bucks spent on some Facebook ads that practically no one saw to steal the presidential election from the rightful winner. Vlad the Bad is the all-powerful villain at the center of so many sinister conspiracies that it’s hard to keep track of them.

The anti-Russian campaign that the media has been hyping ever since Trump took office isn’t anything new. Those of us born during the cold war years – the first cold war, that is – remember all too well the atmosphere of hysteria and unreason that prevailed in those days. The fear of Communist agents under every bed was exploited by the War Party to no end – no good end, that is – and one would’ve thought that the collapse of communism and the end of the cold war would put a stop to it.

No such luck. It started in 2003, when the neocons declared war on Russia for Putin’s refusal to sign on to the Iraq war. Richard Perle led the charge, demanding Russia’s expulsion from the G-8.

The hate-on-Russia campaign has been ongoing ever since that time, only increasing in intensity and changing as to the details over the years. The main instrument of this effort has been the “mainstream” media, which, like the “intelligence community,” has now begun openly acting in a coordinated manner, an activist component of the anti-Trump popular front. The Russia-gate hoax is the central narrative of the NeverTrumpers, and hatred of Russia is therefore central to the emerging ideology of #TheResistance – a trend that does not bode well for the future of what was once known as American liberalism.

What does bode well for the country, however, is the fact that the American people aren’t buying the new cold war. After all those years of frenetic propaganda, a new Gallup poll shows that nearly 60% of the American people prefer diplomacy over confrontation with Russia:

“In an era of increasingly tense U.S.-Russian relations marked by allegations of Russian meddling in U.S. elections, Americans believe it is more important to try to continue efforts to improve relations between the countries (58%), rather than taking strong diplomatic and economic steps against Russia (36%).”

Every fifty years or so the War Party migrates to the other side of the political spectrum, and this poll shows that the switching of partisan polarities is well underway. The majority of Democrats – 51% — say it’s more important to impose sanctions and take other hostile actions against Russia than to engage in diplomacy, while a whopping 74% of Republicans take the opposite view of diplomacy over confrontation. The Trumpification of the GOP means a less interventionist Republican electorate, as I’ve been saying for many months. This poll confirms it: the Republicans (in general!) are the party of peace.

The good news doesn’t end there. The really great news is that the Democrats are badly split, with a significant minority choosing diplomacy over sanctions. The clincher is that the independents are with the peaceniks in the GOP: diplomacy, they say, is better than conflict.

The Great American Peace Consensus has spoken! If the Democrats run with this Russia-gate nonsense in 2020 they will lose, bigtime. There’s no way they’re going to sell the American people on a cheap remake of “Red Dawn.”

Oh yes, the good news just keeps coming:

“Just 9% of Republicans agree that Russians interfered and changed the outcome of the election. Rather, the majority of Republicans, 58%, believe Russia interfered but it did not change the outcome. Nearly one in three Republicans reject the idea that Russia interfered.”

On the other hand, the Democrats swallow the Russia-gate myth whole: 78% believe it, despite the lack of publicly available evidence.

What this means is that most Democrats are not only epistemologically challenged but they are also more likely to believe authority figures unquestioningly, whereas Republicans are more prone to freethinking – although there are still a few deadheads among them.

We haven’t heard much about this particular poll, and the reason ought to be clear enough: it illustrates the waning power of the “mainstream” media, underscoring their pathetic weakness even when they act in concert. And if you think their coordinated editorials against Trump the other day was the first instance of their consolidation into a political bloc then you haven’t been paying attention. They’ve been peddling this anti-Russian conspiracy narrative for years – and now to see that it has had almost no effect on the majority of ordinary Americans must be so humiliating. All that effort – for nothing! The American people have far more sense than the political class that purports to rule over them, and that includes the media.

Our journalists are extra sensitive these days, responsive to every slight, both real and imagined, precisely because they sense their own impending irrelevance. Do you wonder why it’s the journalists who scream the loudest in favor of censoring alternative voices like Alex Jones? They hate the competition and would love to stamp it out: Jones’s kookiness gives them the perfect foil and pretext.

Trump called them the “enemy of the people,” but that’s letting them off easy. Our media is the enemy of reality, and the servitor of entrenched Power. They’ve inverted their job description: instead of reporting the facts they are intent on hiding them. That’s why alternative media are growing by leaps and bounds, while the legacy media is on its last legs.

Of course, we here at Antiwar.com saw all this coming many moons ago: that’s why we’re here, and you’re reading this. Which reminds me: have you donated to the cause lately?

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Just when you thought it was safe BTFRH, EM explodes, US macro dumps, and China resumes devaluation…

 

DECOUPLED:

Yuan and US Stocks…

Bonds and US Stocks…

Yield Curve and US Stocks…

Commodities and US Stocks…

World Stocks and US Stocks…

EM Tech Stocks vs US Tech Stocks…

Macro and US Stocks…

And finally – and most importantly – Global Central Bank Balance Sheets and US Stocks…

*  *  *

Ok, having got that off our chests.

China’s National Team was back overnight, bidding China stocks after an ugly morning session…

 

Small Caps (Russell 2000) managed a new intraday record high before tumbling. Nasdaq broke its 5-day win streak. Cash equities tumbled into the European close, tried to stage the normal momo-ignited rally, then dumped at the close…

 

Futures show the chaos better… (Aussie political headlines overnight, pure algo chaos at the open, then another ugly close)…

 

 

Once again the S&P failed to make higher highs and extend its record high breakout gains…

 

Tough day for China tech – BABA released earnings (seemed solid), dumped, pumped, and then really plunged…

 

 

Treasury yields were mixed with the long-end lower and short-end higher…extending the week’s trend and flattening dramatically…

 

Flattening the curve further still (2s10s at 20bps)…

 

30Y yields dropped to 5 week lows…

 

The Dollar bounced overnight and extended gains from the kneejerk drop on Fed Minutes…

 

After brief pause from the bloodbathery, Emerging Markets were clubbed like a baby seal today with all EM FX lower…

Led by the Rand (Trump tweets), Real (Lula increasing his lead in polls), Mexican Peso (NAFTA), Turkish Lira (on way back from vacation), and the Fornit and Zloty as Eastern Europe hots up…

Turkish Lira remains relatively quiet as the whole country is on vacation, but did fade today…

PBOC fixed the Yuan weaker overnight for the first time in 6 days, and offshore Yuan is tumbling again as the trade talks come to an end…

 

Crytpocurrencies jolted lower overnight on the SEC ETF headlines but Bitcoin crept back higher to unchanged on the week…before they snapped in the last hour

 

Dollar strength weighed on commodities…

 

Gold futures drifted back below $1200…

 

Finally, 2018’s US Macro data is now the most disappointing since 2004…

With the home sales and Markit PMI weakness, we now have 14 economic indicators for August miss expectations, 5 beat and 3 in-line. Here we have nearly 3 misses for every beat, and yet the bullish chatter on the economy shows no signs of abating. Welcome to the Flat Earth Society

— David Rosenberg (@EconguyRosie) August 23, 2018

So much for the greatest economy ever.

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President Trump’s attorney, Rudy Giuliani, told Sky News on Thursday that Americans would “revolt” if Trump is impeached. 

“I think impeachment would be totally horrible,” Giuliani said. “There’s no reason. He didn’t collude with the Russians, he didn’t obstruct justice. Everything [Michael] Cohen says has been disproved. You’d only impeach him for political reasons. And the American people would revolt against that.“

On Tuesday, Trump’s former longtime attorney and self-described “fixer,” Michael Cohen, said that President Trump directed him to pay off two women who claim to have had affairs with Trump over a decade ago. Cohen’s attorney, Lanny Davis, says its “absolutely clear that Donald Trump committed a felony” by paying hush money to the women during the run-up to the 2016 US election. 

Giuliani, on the other hand, says Trump has been “completely cleared” by Cohen’s testimony. 

“You have this Cohen guy, he doesn’t know anything about Russian collusion, he doesn’t know anything about obstruction, he’s a massive liar,” said Giuliani. 

Evidence against Trump includes a tape recording made before the election in which Trump and Cohen discuss payments to the keep the women’s stories silent. On Thursday, Giuliani downplayed the significance of the tape, saying “The tape recordings say very clearly that Cohen did it on his own, didn’t tell the president until much later.” 

Meanwhile, Giuliani lashed out at the Department of Justice on Thursday for the intense focus on Trump, while Hillary Clinton’s conduct has gone unaddressed – tweeting: “If there is any justice left at DOJ why is payment by Hillary Clinton and DNC to FusionGPS for the phony Steele dossier not under investigation. On your theory in Cohen plea it’s an illegal campaign contribution.Let’s go DOJ wake up. where’s the indictment. Clintons not above law.” 

If there is any justice left at DOJ why is payment by Hillary Clinton and DNC to FusionGPS for the phony Steele dossier not under investigation. On your theory in Cohen plea it’s an illegal campaign contribution.Let’s go DOJ wake up. where’s the indictment. Clintons not above law

— Rudy Giuliani (@RudyGiuliani) August 23, 2018

President Trump said in an interview with Fox News this week that he was doing a “great job” and that the market would crash if he were forced out of office. 

“I think everybody would be very poor,” he said, before pointing to his head. “Because without this thinking, you would see numbers that you wouldn’t believe.”

President @realDonaldTrump: “I don’t know how you can impeach somebody who’s done a great job.” pic.twitter.com/3BZNpSzish

— Fox News (@FoxNews) August 23, 2018

On Thursday, the Wall Street Journal reported that American Media Inc. CEO and longtime friend of President Trump, David Pecker, had been granted immunity in the Trump investigation. 

Pecker reportedly gave prosecutors details about the president’s knowledge of payments former Trump attorney Michael Cohen made to women alleging affairs with Trump – including former Playboy model Karen MacDougal – was paid $150,000 by the National Enquirer, which is owned by American Media, for her story about an alleged affair with Trump. The Enquirer sat on the story in a practice known as “catch and kill.”  

In exchange for immunity, Mr. Pecker, CEO of American Media, Inc., has met with prosecutors and shared details about payments Mr. Cohen arranged in an effort to silence two women who alleged sexual encounters with Mr. Trump, including Mr. Trump’s knowledge of the deals, some of the people said. Prosecutors have indicated that Mr. Pecker won’t be criminally charged for his participation in the deals, the people said. –WSJ

Pecker’s input “appears to have informed the charging documents made public on Tuesday as part of Mr. Cohen’s guilty plea to eight criminal charges, including campaign-finance violations tied to the payments.” 

During his guilty-plea hearing, Mr. Cohen, Mr. Trump’s former personal lawyer, said that at Mr. Trump’s direction, he broke federal laws on campaign contributions by coordinating payments to the two women for the purpose of suppressing negative information about Mr. Trump and influencing the 2016 election.

American Media executives were involved in both hush-money deals that formed the basis of Mr. Cohen’s guilty plea to campaign-finance violations, prosecutors said. One was a $130,000 payment to Stephanie Clifford—a former porn actress who goes professionally by Stormy Daniels—to keep her from publicly discussing an alleged affair with Mr. Trump. 

The second was a $150,000 payment made to former Playboy model Karen McDougal for her exclusive story of an alleged extramarital affair with Mr. Trump, a story that was purchased by American Media in August 2016 at Mr. Cohen’s urging, and then never published. –WSJ

In the recorded conversation between Trump and Cohen, they can be heard discussing purchasing the rights to McDougal’s claim. Cohen can be heard telling Trump that he needs “to open up a company for the transfer of all of that info regarding our friend David,” likely referring to Pecker. 

Will a flipped pecker give Trump the shaft? 

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Authored by Joseph Jankowski via PlanetFreeWill.com,

During a meeting with senior propaganda officials, Chinese President Xi Jinping called for a “clean and righteous” internet and the rejection of “vulgar” content.

“Uphold a clean and righteous internet space,” state media reported Xi saying at the meeting occurring on Tuesday and Wednesday. “Reject the vulgar, the base and the kitsch. Put forward more healthy, high-quality internet works of culture and art.”

Xinhua reports that Xi insisted that propaganda leaders promote “unity of thinking and gathering strength” and, especially “traditional Chinese culture.”

“In order to do a better publicity and ideological work under the new circumstances, Xi underlined holding high the banner of Marxism and socialism with Chinese characteristics,” Xinhua reported Wednesday.

“He also stressed adhering to the path of socialist culture with Chinese characteristics and developing a great socialist culture in China.”

As Breitbart’s Frances Martel notes, Xi’s words reflect a years-old policy of censoring political criticism, Western culture, and anything that could lead to Chinese people questioning the wisdom of their leadership.

Xi has struggled to contain online criticism, which has grown on social media since he announced an end to presidential term limits in February. Criticism has risen to unprecedented levels on social media following the revelation that a Chinese biotech corporation deliberately sold faulty vaccines, resulting in hundreds of thousands of children being essentially unvaccinated.

Xi has also used his power in an attempt to contain the growing popularity of Western culture, particularly rap music and hip-hop culture, which China essentially banned from television in January unless it promotes the Communist Party.

The Chinese President’s statements also come at a time when the communist government is engaging in a broader clamp-down targeting online content from live streams and blogs to mobile gaming in an effort to maintain a grip over a large and diverse cultural scene popular with China’s youth online.

Xinhua reported in January, citing government data, that China shut as many as 128,000 websites that contained obscene and other “harmful” information in 2017.

After Xi came under extensive heat for abolishing presidential term limits, Chinese censors went into overdrive to restrict any speech even mildly criticized the decision over social media.

TechCrunch reported in February:

“I don’t agree”, “migration”, “emigration”, “re-election”, “election term”, “constitution amendment”, “constitution rules”, “proclaiming oneself an emperor” and “Winnie the Pooh” – the Xi’s online nickname – were among a host of phrases to be banned on microblogging site Weibo, according to U.S.-based China Digital Times.

Anyone found trying to enter the Chinese words was greeting with a messaging information that “the content violates the relevant laws and regulations or Weibo’s terms of service.”

Weibo restricting the messages users could post, Weibo also banned certain search terms, according to China Digital Times. In contrast, the top ten trending searches on FreeWeibo, a website that offers an unrestricted view of content on the service, all reflected responses to the news.

China prohibits its citizens from accessing many foreign news outlets, search engines, and social media.

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