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Authored by Ben McDonald via Campus Reform,

orried that “non-Mexican individuals” might partake of Cinco de Mayo festivities, Gonzaga University is telling students, “Don’t you dare put on that ‘sombrero.’”

In an email to the student body Wednesday, VP of Student Development Judi Biggs Garbuio notes that Cinco de Mayo is “a relatively minor holiday” in Mexico, but “has evolved into a commemoration of Mexican culture and heritage” in the United States.

“Unfortunately, the celebrations have become less about the appreciation of Mexican heritage, and instead has become more about drinking and partying especially by non-Mexican individuals,” she continued. “Because of this, there are many instances when Cinco de Mayo becomes a holiday that is full of cultural appropriation.

“At some college campuses, including our own,” she warned, “students create ‘theme’ parties or dress in costumes that are insensitive and offensive to the Mexican-American and more broadly the Latinx culture.”

Biggs Garbuio concluded by suggesting that students go to the Facebook page of the the Unity Multicultural Education Center (UMEC), which includes a graphic and link to a website listing “6 Ways To Celebrate Cinco de Mayo Without Appropriating The Mexican Culture.” 

The website gives tips which include, “It’s a good thing to ask yourself if what you’re wearing may be offensive to the culture you’re celebrating. And if you have to ask, you should probably refrain,” as well as, “especially don’t say things like ‘drinko’ or ‘eato’ or decide to bust out ‘andale’ or ‘hola.’”

The graphic on the UMEC Facebook provided additional advice for “alternative ways to celebrate Cinco de Mayo,” starting with “don’t you dare put on that ‘sombrero.’”

Instead, it suggests that students “learn about the history of Cinco de Mayo and how it became a part of US popular culture.” While they are doing that, it adds, they should try to “acknowledge the stereotypes you have internalized and discover why they are problematic.”

It then recommends that students “support AUTHENTIC Mexican businesses,” but immediately clarifies that “CHIPOTLE DOESN’T COUNT,” apparently because it does not employ “actual Mexican people.”

“Try a family-owned restaurant run by actual Mexican people (They have better food anyway. We promise.),” the flyer says. “Maybe even enjoy some authentic Mexican music.”

It then goes on to list various other forms of cultural appropriation that students should avoid along with sombreros.

“No serapes. No fake mustache. Avoid every party store. No ‘Cinco de Drinko.’ No disrespectful use of Spanish. No homogenizing Latinx communities,” it dictates. “Oh, and hold your friends accountable when they do any (or all) of these.”

Interestingly, the flyer concludes by urging students to “donate to organizations working for immigrant rights.”

“If you celebrate this holiday while disrespecting the people whom it belongs to, shame on you,” it states. “Any day is a good day to start recognizing the equality of all people, no matter where they’ve come from.”

Campus Reform reached out to Biggs Garbuio for comment regarding her email but she did not respond.

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While it is largely accepted as a done deal that the ECB will, over the next year, fully phase out its QE, what there is far less agreement on, is what impact this tapering will have on risk assets, and linked to that, when it will happen.  However, whether it takes place in 8 months or 18, the market has already been able to observe first hand what will happen when one of the last 2 central banks to inject trillions into the market, calls it a day.

As Bank of America’s Chief Investment Strategist Micheal Hartnett shows in his latest Flow Show, the marginal impact of the ECB’s direct monetization of private, corporate sector bonds has been declining less and less with every passing year, and in 2018, spreads have actually blown out by 67bps YTD, despite the ECB having injected a near record €70BN in the private sector (much of which in the primary market, i.e. paying corporate issuers directly).

There is a word for this lack of return on central bank intervention: “Quantitative Failure.”

This is, of course, a problem, for both the markets and the feedback loop that has been at the basis of risk asset price formation for the past decade: if and when the market realizes that central banks are pushing on a string and both their actions and words are no longer able to serve as a backstop, it’s game over, and it manifests itself in a run for the exits.

Which, incidentally, is precisely what is happening.

According to Hartnett, “Europe’s cyclical capitulation” has started to unfold and in just the past 7 weeks, investors have unwound a 1/3 of inflows that have taken place into EU equities over the 15 months as “ECB QE failing to reduce credit spreads.”

What happens next?

While it is distinctly possible that nothing changes, the downside risk is that if European outflows persist, and if the idea that the ECB is now powerless spreads to other markets, that could well mark the end of the great equity bull market that has been built entirely on the altar of central banks; because once the faith goes away, it’s over. The question then becomes will the flight from equities lead to a bid for stocks, or – with faith in conventional monetary policy fading – also lead to a liquidation of fixed income, something Jeff Gundlach presented as the all too possible endgame to this grand experiment back in January.

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Via DataTrekResearch.com,

There’s an old stock market riddle that asks, “What’s the most important factor that determines where ABC Corp will trade today?” The clever but initiated will reply with “Changes to expected earnings” or “an upcoming product announcement”.

The correct answer: “Yesterday’s closing price for ABC”. I know… It’s more a trader Dad-joke than a riddle….

Like all semi-stale aphorisms, it survives because it reminds us of an easy-to-forget truth: everything happens at the margin. We might think Tesla or Snap or even the entire S&P 500 is wildly overvalued, but the world doesn’t just wake up one day and magically reset to our version of reality. For that, you need a catalyst to pry open the market’s eyes. And the more specific and dramatic your expected unexpected truth telling is, the better your investment case becomes.

All of which brings us to today’s thought: what potential risks sit outside the US equity market’s field of vision? These are the issues NOT baked into today’s close, and therefore unseen by tomorrow’s open. Until, of course, they are.

Three come to mind:

#1. Political Risk.

 The one thing we learned reading through the leaked special counsel’s questions for President Trump is that you never want to be the subject of a Federal investigation. The list is peppered with queries that require you to accurately recall your state of mind months and even years ago. Personally, I can’t remember what I was thinking last week…

Markets have done yeoman’s work ignoring a range of DC-related factors, from tariff/trade disputes to the Russia investigation. The S&P 500 is down all of 1.4% this year, after all, mostly because of rising long-term interest rates.

It is therefore fair to say that US equity markets have precisely zero political risk discounted in stock prices. Investors even seem to have accepted President Trump’s negotiating style (tough at the beginning, but rapidly evolving to near status-quo reality), so there’s less chance of market volatility such as we saw around NAFTA and the steel/aluminum tariffs.

At the same time, the topic nags us on a daily basis. What sequence of events might draw the public’s attention and potentially ding consumer confidence? For all the hand wringing inside the Beltway, that is the only issue that matters to equity prices over timeframes longer than a few hours.

For the moment, the path here is hard to see. We worry, however, that once the first few road signs appear markets will swoon precisely because they thought this risk was already fully discounted at a zero probability.

#2. Seasonal volatility patterns. 

Jessica has been highlighting this topic regularly, but we’ll sum it up in one sentence. The CBOE VIX Index basically never peaks for the year in February. The closing high for 2018 to date was on February 5th, at 37. We sit at less than half that level today.

What could lift volatility later in the year, when it customarily ramps to its annual high? Here is one general scenario:

• As we’ve discussed recently, the marginal buyers of US equities are US public companies. Net investment flows from mutual funds/ETFs are negative, and this is unlikely to shift any time soon given demographic trends. Aging populations tend to buy bonds more than stocks.

• That leaves US stocks to the whims of corporate CFOs and the capital allocation committees of public company Boards of Directors. As long as the near term profit picture remains robust, they will repurchase their stocks. That’s what happening right now.

• As soon as the next economic downturn commences, all bets are off. At the beginning of the last cycle (2003) mutual fund investors were large net buyers of equities. In fact, the largest inflows of the last 20 years occurred just then (ICI data shows that clearly). Given that this cohort has been absent in the current rally, they are unlikely to play the role of early-cycle investor when stocks drop.

Line up the seasonal volatility patterns with investment flows and you get a plausible bear case. Sometime in October (historically a peak month for volatility), markets and corporate boards will both start to discount a recession in 2019. On Q3 earnings calls, CFOs talk about reducing buybacks “until things clear up”. US equities take the news poorly, and stocks decline by 10-15%.

As with Point #1, markets discount zero risk of a reduction in buybacks. Valuations remain at healthy levels by historical standards. Except that historically, actual investors put money to work in equities. Now, companies retire their unneeded capital by repurchasing their own stock. That seems like an important difference when considering cyclical investment flows, but there is no discount in US equity valuations for this factor.

#3. Geopolitical risks that increase the price of oil. 

We’ve read the idea that “The Federal Reserve kills every bull market” many times in this year. With respect, we disagree. Oil price shocks are the real-world culprit, and 1973, 1979, 1990, and 2001-2002 all support our conclusion. You can even make a case that $140/barrel in early 2008 predestined the US to a recession, even without the Financial Crisis.

For the moment, US equities seem unperturbed by modestly higher oil prices. The recovery in crude this year looks like a natural rise after a long period of stagnation. Putting an exclamation point on this sentiment: large cap Energy stocks have only rallied in the last month. Investors clearly didn’t want to believe the commodity was in an uptrend, and needed to see it stick for a few months before buying the stocks.

How the current administration deals with the Iranian nuclear deal is a wild card, and Israel’s recent actions in Syria point to the chance of a regional military conflict. If you buy into our thought that it is the Middle East, not the Fed, that kills bull markets, it seems remarkable that US stocks place little chance of any broader problem in the region.

Summing up: the purpose of this note is not to bury markets or, for that matter, to praise them. You pay us, in part, to provide some visibility on what others ignore. We can safely say markets are paying little heed to political risk, the market’s over-reliance on buybacks, and Middle East risks. We have no explicit catalysts to prove them wrong. And neither does anyone else at the moment, otherwise markets would be responding.

That doesn’t mean we should ignore them. Sometimes tomorrow’s open isn’t quite too tightly tethered to today’s close.

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Authored by Peter Cook via RealInvestmentAdvice.com,

If a Hall Of Fame existed for financial beliefs, “market-timing is impossible” would rank right up there with “diversification is the only free lunch in finance.”  These statements have been validated by a large volume of peer-reviewed academic studies, so it is widely believed that there is no need to question their legitimacy.  Although the declining value of diversification was addressed in Diversification Can’t Cure Overvaluation Disease, this article concerns the issue of market-timing for investment portfolios.

First, almost all investors are likely to agree that market-timing, as defined over short-term intervals and based on observed historical patterns, is impossible.  In reality, financial markets are enormously complex systems in which a multitude of investors buy and sell in different magnitudes for different reasons on different days.  On top of that, investors may respond (or be forced to respond) differently to a specific stimulus over time.  While some investors may be able to make excess profits based on known anomalies (e.g., seasonality, small capitalization, valuation, momentum) over long periods of time, even these anomalies are unreliable over shorter periods of time.  If some investors can create excess short-term trading profits, they probably do so because of structural advantages (e.g., informational advantages of market-making, or detecting and front-running corporate buyback programs).  If anyone can create short-term excess profits without those advantages, these precious few certainly don’t and won’t advertise how they achieve their success, which means the rest of us might as well continue to assume it is impossible.

In contrast, the study of longer-term business cycles is valuable for the simple reason that business cycles drive capital markets cycles.  Business cycles run for periods of years, not days, weeks, or months.  So business cycle analysis is different from the common definition of market-timing because it is concerned with a much longer time horizon.  It is difficult for anyone other than politicians to deny the existence of a business cycle, which includes both an expansion and a recession phase because they are a fact of economic life.  A recent Goldman Sachs research piece not only acknowledges the existence of cycles but divides them into four phases and produces recommended asset allocations for each phase, as shown below.

Goldman’s investment recommendation for 2018 is based on the belief that 2018 lies within Phase 3, in which the economy is operating above capacity and growing.   More broadly, Goldman’s chart and table show that identifying the Phases is a crucial determinant of investment success.  For example, if 2018 truly lies within Phase 4, cash and bonds would outperform commodities and equities.  The Fed appears to agree with Goldman’s analysis of Phase 3, based on its simultaneous campaigns to lift the Fed Funds rate and to reduce the size of its bond holdings that were acquired during its QE experiment.

In another admission that business cycles exist, Bank of America/Merrill Lynch (BAML) produces a monthly Fund Manager Survey, in which it asks the largest institutional investment managers a simple question; where are we in the business cycle?  The results from the past decade are shown below.

Beginning with the most recent results, a majority of institutional investors currently believe the global economy is “late-cycle” (gold line), which is an analog for Goldman’s Phase 3.  In fact, this belief has been in existence since early 2016, and the belief has increased in popularity over the last six months or so. For most of the period from 2010-2016, a majority of investors believed “mid-cycle” (blue line) was the best description for the state of the global economy, which is an analog for Goldman’s Phase 2.  In 2009, investors didn’t believe the economy was either in mid-cycle or late-cycle, a fact that will be addressed later in this article.   In 2008, 70% of investors believed the global economy was in late-cycle, and relatively few believed the global economy was mid-cycle, which are similar to the current percentages.

Summarizing the results of the chart above, the investors polled by BAML have thus far been largely correct in their assessment of the state of the global economy.  They correctly identified the economy was late-cycle on the eve of the recession of 2008-09, correctly identified an upswing in the business cycle in early 2010.  Whether they are correct that 2016-2018 is late-cycle (Phase 3) is plausible but remains to be seen.

The BAML survey extends further back than 2008, so we can get a better idea of investors’ beliefs leading to the recession of 2008-09, as shown below.  During these years, investors were given two other choices to describe the economy; early-cycle or recession.  A majority of investors believed the economy was late-cycle beginning in 2005, with a peak in that belief occurring in late 2007 (thin black line), which coincided with a continuous decline in the percentage believing the economy was mid-cycle.  During the period 2005-2007, almost no investors believed that the economy was in either in its early-cycle or recession.

By late 2008, investors believed that a late-cycle economy was giving way to a period of recession, as shown by the decline in the black line and ascendance of the red line.  By late 2009, a majority of investors began to describe the economy as early-cycle, as indicated by the ascendant green line.

Summarizing, investors were largely correct in describing the state of the global economy in the years leading up to the recession.  They began to believe the economy had moved into late-cycle by 2005, a couple of years before the recession struck in December 2007.  By late 2008, they began to understand the economy was in recession, and by mid-2009, they understood the economy was early-cycle, which occurs after recessions.

Furthermore, investors seem to firmly grasp the sequence of the phases of the business cycle, as evidenced by the sequential peaks in the black, red, green, and blue lines during the period of 2007-2012.  That is, it makes sense that a peak in late-cycle would be followed by a recession, which would be followed by early-cycle and then mid-cycle.

Investment Implications for 2018

If Goldman is correct that the economy is in Phase 3, and the BAML investor survey is correct that the global economy has been in late-cycle since 2016, then the next stage of the business cycle will be a recession (Phase 4). However, the timing of a potential recession is uncertain.   What isn’t uncertain and of utmost importance to investors is that the performance of asset classes is radically different in Phase 3 than in Phase 4.  It is also not uncertain that economists will be blindsided by any impending recession, just as has occurred before all of the eleven post-WWII recessions.

With the preceding knowledge, an investor should probably be reducing exposure to equities, precisely at a time when persuasive narratives exist to keep an equity investor in the game (e.g., great earnings reports, globally synchronized growth, fiscal stimulus, etc.).  That is not easy to do.

Can we get more specific on the timing?  Interestingly, a majority of the BAML investor survey voted for late-cycle beginning in late 2005, or a couple of years ahead of the recession that began in late 2007.  This time around, voting for late-cycle became a majority in early 2016, which is about two years ago.  So, in each of these two periods, it isn’t a surprise to investors that the economic expansion is long in the tooth, or that a recession will be coming next.  But it is unlikely that recessions will always follow precisely two years after investors declare a beginning to late-cycle.

The question of timing can also be addressed by the fact that both periods (2005-2007 and 2016-2018) share a common fundamental characteristic; in both periods the Fed persistently raised interest rates while the price of crude oil more than doubled.   Every single recession since 1970 has been preceded by a sharp rise in the cost of money and the cost of energy, as explained here (LINK).  It appears that a rise in oil is perceived as inflationary by the Fed, which then raises rates to counteract inflation.  But business owners and consumers, operating in the real world, see the rising costs of energy and interest on debt as costs they must offset by cutting other areas, whether that be in business expenses such as headcount or advertising, or discretionary consumption for consumers. That process sows the seeds of recession.

The main question a long-only investor must answer in 2018 is how long Phase 3 (late-cycle) will persist.  If an investor assumes it will persist for several more years, then a large allocation to equity and commodities should provide superior performance.  If the end of Phase 3 is coming soon, those allocations will likely perform relatively poorly.  The following argue for a sooner end to Phase 3:

• The BAML investor survey has described the economy as late-cycle for two years

• Crude oil has almost tripled over the past two years

• The Fed has been raising the Fed Funds rate for three years, and is planning to continue down that path

• The Fed has further tightened liquidity by reducing their balance sheet which in turn decreases the money supply

On the other hand, it is possible that the economy will overcome sharp increases in short-term interest rates and oil prices, delaying the transition from Phase 3 to Phase 4, and extending the stock market advance.  But given the historical record of recessions since 1970 and the investor survey results from 2005-2008, that is a low-probability bet.

Another potential outcome is possible for investors who can implement hedging and/or short sales to their investment strategies.  During both Phase 3 and 4, commodities outperform equities by ~15% per annum.  If Goldman is correct that we are in Phase 3 on the way to Phase 4, AND if historical performance patterns hold, then a long commodities/short equities investment strategy might be rewarding.  In that case, correctly identifying whether the economy is in Phase 3 or 4 is far more important than precisely timing the transition from Phase 3 to Phase 4.

Conclusions

• Business cycles exist, and the progression through phases of the business cycle is recognized by institutional investors

• Business cycles drive financial market cycles, as demonstrated by the radically different pattern of asset class performance during the different phases of the business cycle

• Economists’ views on the potential for a recession will probably be inadequate because they have been unable to predict any Post-WWII recession, so it is unlikely they will do so now

• A majority of BAML’s institutional investors have correctly described the state of the economy over the past 15 years, although they also were late in recognizing the recession of 2008-09

• For the past two years, BAML’s investors have described the global economy as late-cycle, reaching a recent peak of 70+%. The length and magnitude of late-cycle consensus also occurred from 2005-08, which increases the probability of a transition to recession in 2018 or 2019

• The combination of sharply rising costs for money and energy, which occurred before each recession since 1970, increases the probability of a transition to recession in 2018 or 2019

• The increasing probability of recession should be reflected in the structure of investment portfolios, either by reducing equity exposure or by implementing a long commodity/short equity strategy.

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A few simple words and voila… San Francisco Fed’s John Williams says “comfortable overshooting 2% inflation for a while” and stocks are green for the week…

 

 

But it was another Fed head that showed his comedic side… NYFed’s Bill Dudley proclaimed: “I don’t think The Fed cares about financial markets per se…”

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Once again a creeping, years’ long shadow war is expanding from indirect proxy intervention to direct engagement, complete with US “boots on the ground” where no American ground forces were previously thought to exist.

And it’s not Syria, or Libya, or central Africa where the now familiar pattern played out before, but in the Arabian peninsula where the Pentagon has long claimed to merely coordinate intelligence, refuel jets, and provide logistical support to the Saudis which have been bombing Yemen since March of 2015.

On Thursday The New York Times revealed for the first time that US special forces have been on the ground supporting Saudi coalition forces since late last year:

But late last year, a team of about a dozen Green Berets arrived on Saudi Arabia’s border with Yemen, in a continuing escalation of America’s secret wars.

With virtually no public discussion or debate, the Army commandos are helping locate and destroy caches of ballistic missiles and launch sites that Houthi rebels in Yemen are using to attack Riyadh and other Saudi cities.

Details of the Green Beret operation, which has not been previously disclosed, were provided to The New York Times by United States officials and European diplomats.

According to the report, the elite Army operators were sent to assist the Saudis starting in December, weeks after ballistic missiles fired by Yemeni Houthi rebels came close to directly hitting Riyadh’s international airport, though the Saudis claimed to have intercepted it – a claim which was subsequently cast into doubt by weapons experts.

At that point, a worried Crown Prince Mohammed bin Salman reportedly renewed calls for the the United States to send ground troops in order to bolster Saudi-led operations aimed at rooting out the source of the sophisticated Yemeni missile attacks, which have occurred on multiple occasions over the past year of fighting.

Like all administrations going back to 2001, the White House is relying on the the 9/11-era Authorization For Use of Military Force (AUMF) to give legal justification for its actions in the Arabian peninsula. But this time the target is not primarily al-Qaeda, ISIS, or Sunni Islamist militants, but Iran — which the Trump administration has repeatedly accused of supplying Yemen’s Shia Houthis with its ballistic missile arsenal.

So it’s not just a “Saudi” war. “US Army Special Forces Secretly Help Saudis Combat Threat From Yemen Rebels.” https://t.co/LpbeNRdE2q

— Tim Shorrock (@TimothyS) May 3, 2018

To underscore the US perception that it is fundamentally in a struggle against Iranian influence in Yemen, the Times quotes Secretary of State Mike Pompeo who stated during a visit to Riyadh on Sunday, “Iran destabilizes this entire region.” Pompeo further charged Iran with supporting “militias and terrorist groups” — specifically that it is “an arms dealer to the Houthi rebels in Yemen.”

However, even the usually national security state-friendly New York Times isn’t fully buying the “it’s necessary to counter Iran” narrative spun by the Pentagon, instead calling the Green Beret presence “a marked escalation of Western assistance to target Houthi fighters who are deep in Yemen.”

The NYT further notes that, “There is no evidence that the Houthis directly threaten the United States; they are an unsophisticated militant group with no operations outside Yemen and have not been classified by the American government as a terrorist group.”

* * *

So if we are once again on the slow and creeping path of American “boots on the ground” in yet another Middle East proxy war, how did we get here?

To quickly review, Saudi airstrikes on already impoverished Yemen, which have killed and maimed tens of thousands of civilians (thousands among those are children according to the UN) and displaced hundreds of thousands, have been enabled by both US intelligence and military hardware. Cholera has recently exploded amidst the appalling war-time conditions, and civilian infrastructure such as hospitals and schools have been bombed by the Saudis.

After Shia Houthi rebels overran Yemen’s north in 2014, embattled President Abd-Rabbu Mansour Hadi vowed to “extract Yemen from the claws of Iran” something which he’s repeatedly affirmed, having been given international backing from allies in the West, and a major bombing campaign began on March 2015 under the name “Operation Decisive Storm” (in a cheap mirroring of prior US wars in Iraq, the first of which was “Desert Storm”).

NYT: “There is no evidence that the Houthis directly threaten the United States; they are an unsophisticated militant group with no operations outside Yemen and have not been classified by the American government as a terrorist group.” https://t.co/Z09iFRNjYV

— Max Abrahms (@MaxAbrahms) May 3, 2018

Saudi Arabia and its backers fear what they perceive as growing Iranian influence in the region, something considered by some analysts to be grossly exaggerated, and seek to defend at all costs Yemeni forces loyal to UN-recognized President Hadi – who since 2017 appears to be in some sort of house arrest situation in Riyadh. According to Al Jazeera Saudi Arabia’s King Salman has denied Hadi’s repeat requests to return to Yemen in order to rally forces loyal to him. 

The pro-Saudi coalition goes far beyond US involvement but also includes Bahrain, Kuwait, UAE, Egypt, Sudan, and Britain; and the Saudi initiated war has also received behind the scenes political support from Israel, something recently confirmed by Israeli officials.

Concerning the supposed Iran threat in Yemen, an emergency session of the Arab League held in response to the November 4th Houthi missile attack on Riyadh doubled down on its shared commitment to wage war against Iranian interests after it blamed Tehran for the supplying and advising the attack, which Iran for its part denies playing a role in. 

The attack clearly rattled not just the Gulf allies, but the US itself (concerned chiefly over what it perceived as “Iran’s reach”), which is apparently what led to the relatively quick deployment of the special forces to the Saudi border with Yemen. 

* * *

But for all the international powers involved in the anti-Houthi military alliance, the coalition may be dysfunctional and in shambles, at least according one major Middle East Eye investigation published in late 2017. 

The report predicted that the Saudi military campaign is likely to end in total failure as “more than two years into a disastrous war, the coalition of ground forces assembled by the Saudis is showing signs of crumbling” and as the Saudis have become increasingly reliant on foreign mercenaries for its ground forces, such as a huge contingent of Sudanese mercenaries and UAE officers. 

It is entirely possible and probable that should the coalition suffer continued setbacks, or should at any point Houthis gain in strength and territory, the US would bolster its role by ramping up its current special forces contingent. As recent history has born out — most especially in Syria for example — a tiny “footprint” easily slides into small forward operating bases, and then on to thousands of conventional forces, without so much as a peep from Congress.

On that note, however, the New York Times reports the following congressional exception:

Senator Tim Kaine, Democrat of Virginia and a member of the Armed Services Committee, on Thursday called the Green Berets mission a “purposeful blurring of lines between train and equip missions and combat.” He cited the report in The Times and called for a new congressional vote on the authorization for the use of military force — a war powers legislation used by three successive presidents in conflict zones around the world.

And concerning just what the Green Berets have been and will be doing along the Yemeni-Saudi border, the Times continues:

A half-dozen officials — from the United States military, the Trump administration, and European and Arab nations — said the American commandos are training Saudi ground troops to secure their [Saudis] border. They also are working closely with American intelligence analysts in Najran, a city in southern Saudi Arabia that has been repeatedly attacked with rockets, to help locate Houthi missile sites within Yemen.

Along the porous border, the Americans are working with surveillance planes that can gather electronic signals to track the Houthi weapons and their launch sites, according to the officials, all of whom spoke on condition of anonymity because they were not authorized to discuss the mission publicly.

In spite of the usual promises to the contrary, we expect to hear of direct US commando and pro-Iranian Houthi clashes any day now. 

And likely, the currently reported number of about “a dozen” US special forces on the ground is perhaps much higher, as Wednesday’s NYT report itself suggests: On April 17, Robert S. Karem, assistant secretary of defense for international security affairs, told the Senate Foreign Relations Committee that the United States had about 50 military personnel in Saudi Arabia, “largely helping on the ballistic missile threat.”

As we’ve pointed out the obvious many times before, whether it’s the Middle East, Africa, or Eastern Europe, the familiar pattern of American military expansion goes something like this…

First we are promised that US troops are merely in a country for limited “training” missions with “partner” forces; next we are told of “counter-terror” operations which require an increased “footprint”; after which we are assured once again that there are “no boots on the ground” but a “minimal” increase of train and assist missions; finally, US soldiers begin to come home in body bags at which point the 9/11 era AUMF is cynically invoked and Congress passively looks the other way. 

And now it appears the cycle will repeat itself in already war-torn Yemen. 

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Authored by Michael Batnik via TheIrrelevantInvestor.com,

Steven Pinker wrote, “In almost every year from 1992 through 2015, an era in which the rate of violent crime plummeted, a majority of Americans told pollsters that crime was rising. In late 2015, large majorities in eleven developed countries said that “the world is getting worse.”

But crime isn’t rising, and the world is objectively getting better. And while life is improving at the macro level, at the micro level, people aren’t feeling so great. So what gives?

We tend to expect the worst as a way to insulate ourselves from disappointment. Life is not about good or bad, it’s about better or worse, so if things don’t turn out as bad as we imagine, we’re pleasantly surprised.

If you were asked to think about how your life could improve, a few things might come to mind. But imagine how your life could get worse, and a barrage of negative possibilities fills your brain. The risk and reward of every day life is asymmetrical. This is why being a pessimist feels safe and being an optimist feels reckless.

One of the reasons why it seems like the world is getting worse is due to the cacophony of noise coming from the news. Here’s Pinker again:

Whether or not the world is really getting worse, the nature of news will interact with the nature of cognition to make us think that it is. News is about things that happen, nothing things that don’t happen. We never see a journalist saying to the camera, “I’m reporting live from a country where a war has not broken out”- or a city that has not been bombed, or a school that has not been shot up…Bad things can happen quickly, but good things aren’t built in a day, and as they unfold, they will be out of sync with the news cycle. The peace researcher John Galtung pointed out that if a newspaper came out once every fifty years, it would not report half a century gossip and political scandals. It would report momentous global changes such as the increase in life expectancy.

While the news certainly isn’t doing anyone any favors, there are legitimate reasons why people don’t feel like things are getting better. For too many, they aren’t.

The chart below shows the change in real income since 1980. This chart is the root of all the negative things facing our society. People in the top 20% saw their income increase by 60%. People in the bottom 20% saw their income rise by just 5% over the same time. As Leonard Cohen said, “The poor stay poor, the rich get rich. That’s how it goes. Everybody knows.”

Real income increased 38% from 1980-2016, or just 0.87% per year, and 70% of that increase went to people in the top 20%. Things are better, especially around the world, but in our country, way too many people are getting left behind.

Extreme poverty is collapsing, but relative poverty is exploding, and everything in life is relative. If things don’t feel better than they were two hundred years ago, it’s because people compare themselves to their neighbors, not to their ancestors.

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