Category: zerohedge

It should come as no surprise to most that the United States’ over 18-year long war in Afghanistan is a continual nightmare wrought with endless difficulties, earning America’s lengthy post 9/11 quagmire the moniker of “the forever war”.

But a new Pentagon inspector general report has confirmed the situation to be even worse than commonly perceived: the war to roll back the Taliban is not merely stalled, but there’s indicators suggesting jihadist insurgents are actually winning. The report finds Afghan national forces backed by the US have seen a 31% surge in casualties in recent months. 

The Pentagon watchdog concluded the following, according to Bloomberg:

Casualties among Afghan National Defense and Security Forces rose 31 percent from December 2018 to February 2019 over the same period a year earlier, while troop levels fell short again of authorized strength for the first quarter of this year.

Further alarming is that after the US-led NATO and western coalition forces have spent nearly two decades attempting to stabilize the country under the government in Kabul, massive swathes of the country are still under Taliban rule, with about 35% of the nation’s population still not under the Afghan national government. 

The assessment by the Special Inspector General for Afghanistan Reconstruction found further that from November 2016 through October 2018, “the Afghan government controlled or influenced between 64 percent and 66 percent of the population.”

The dour data points from the assessment come just as the Trump administration is engaged in uneasy negotiations with the Taliban, through special envoy on Afghan reconciliation, Zalmay Khalilzad, hosted in Qatar. Crucially, the report highlights that the US-supported side is not entering talks from a position of strength, but instead Afghan national forces are taking “more casualties as they seek greater leverage at the negotiating table.”

“If negotiators fail to secure a peace agreement, the ANDSF will be hard pressed to increase its control over Afghanistan’s population, districts, and territory,” the inspector general said, referring to the the Afghan National Security Forces.

All of this makes the prospect of Trump’s desired relatively quick US exit from the conflict highly unrealistic, especially in terms of getting his generals on board and the political expediency of the move. 

Map of Taliban vs. national government control in Afghanistan as of Fall 2018. 

Things have been so bad for US strategy there that the Pentagon has simply stopped tracking the amount of territory controlled by the Taliban. Inspector General for Afghanistan Reconstruction John F. Sopko put it as follows: “It’s like turning off the scoreboard at a football game and saying scoring a touchdown or field goal isn’t important.”

Secretary of State Michael Pompeo addressed the Afghanistan issue on on Monday, saying, “We are working to achieve a reconciliation so that this conflict, now coming on two decades, can be resolved.” He seemed to indirectly reference an increasingly negative Pentagon outlook concerning the war: “We can take down the violence level, we can get a political outcome,” he said, and added the near-term goal is to stabilize the country enough to prevent “an attack on the homeland from Afghanistan.”

Currently US military analysts put the total number of Taliban fighters at about 60,000 – which even after successful deconfliction negotiations would have to be reintegrated into Afghan society for the long-term. 

via ZeroHedge News http://bit.ly/2V8Aiip Tyler Durden

One week ago, when discussing how the Fed had lost control of rates specifically highlighting the recent spike in the Effective Fed Funds rate above the IOER, i.e., the traditional ceiling in the Fed Funds corridor, which today hit an all time high of 5bps…

… we said that “the Fed might consider an imminent IOER reduction, possibly at the May meeting next week.”

And as we learned today, not only did the Fed consider this, but went so far as to stun markets by pulling the trigger, or rather, the market may have been shocked, but our readers certainly were prepared for this “surprising” development. Confirming this initial “shock”, the market’s reaction suggested that its take on the Fed’s announcement was seen as one of profound dovishness, only to sharply reverse just moments after, when Powell confirmed that the IOER move was entirely related to the clogged piping in funding markets, following his discussed of the “transitory” nature of inflation, sending the dollar and yields surging, and stocks tumbling as the Fed suddenly sounded like its old, mid-2018 hawkish self. 

The reversal was painful enough to give traders whiplash, and as BMO’s Ian Lyngen and Jon Hill wrote after the press conference, “we’ll be the first to acknowledge surprise (though not total shock) at the FOMC’s cut of IOER” although as they also note, the logic holds that the Fed wants to separate the “fine-tuning” being accomplished (i.e. keeping effective fed funds within the target range) from actual policy rate decisions. This point, Lyngen notes, was driven home during the press conference, adding that “the communications risk was always Powell’s biggest challenge for such an action and in this context, 2-year yields temporarily touching 2.20% and 25 bp on 2s/10s seems a small price to pay for the ‘needed’ policy tweak (not tweet).”

Additionally, as the BMO rates team observes, this was all completely reversed for an 11 bp round-trip for 2s, and summarizes that its biggest takeaway is that “Powell offered a material challenge for the cyclical resteepener and a ~5 bp range for 2s/10s.“

Here’s what else the BMO rates team though of today’s violent reversal in the market’s perception of the Fed:

There are two primary explanations for the initial bid; first, simply ‘the math’ of a drop of IOER and what that implies for a lower effective funds rate going forward (or at least a limit on how close to the top of the target range rates will be allowed to drift). The second driver is concern is that IOER has become the defacto policy rate – an assumption that Powell made great efforts to counteract during the press conference. The post-meeting volatility was extremely telling as the initial steepening was challenged as Jerome characterized the no-cut cut as ‘just technical’ in a remarkably matter-of-fact tone. Hats off for the delivery; the market responded quickly by cheapening up the front-end of the curve rather dramatically.

Powell noted the Fed doesn’t see a strong case for either a cut or a hike. This strikes us pretty intuitive; after all if there was a compelling reason, wouldn’t they have acted? More to the point, the Chair is trying to avoid pre-committing to any course of action at this stage. The conversation around inflation was similarly informative and with core-PCE currently at 1.55%, the groundwork for an ease is rapidly developing, we’ll argue at least, though if Q1 does turn out to be transitory the period on hold will be extended.

In the press conference, Powell was also directly asked about the possibility of a repo facility (which could help reduce the demand for reserves in equilibrium), and signaled two things. First, the FOMC is certainly going to be studying the topic at future meetings, as was previously hinted at in the March minutes. Second, however, Powell demurred on his bias as to whether such a facility was warranted, and indicated that he has no obvious leaning either way. This is consistent with our previous assumption that the introduction of this facility is far from imminent, though there are better than 50/50 odds that it will be rolled out by the end of 2020.

Tactical Bias: In classic ‘when the dust finally settles’ fashion we expect the true market impact from Wednesday’s events will not be known until after Friday’s employment report is released and wage data revealed. The focus on inflation isn’t a game-changer by any means; although it does deemphasize the strength in Q1 real GDP. Moreover, it offers another opportunity to re-trade the Fed into the weekend as AHE provides the next incremental piece of pricing pressure data. 10-year yields remain well-anchored to 2.50% — yawn. The bulk of the Treasury volatility has occurred in 2s with an impressive 10 bp range (between 2.20% and 2.30%) speaking to the Fed-dependent nature of the rates market at this juncture.

We would also note an important nuanced counterfactual. Imagine that the FOMC hadn’t acknowledged the descent in core PCE in the statement – the immediate takeaway would have been that the Fed has blinders on and isn’t being flexible to lower inflation. Risk assets would have underperformed as calls of a policy error bounced around the echo chamber. Rather, the acknowledgment of disappointing inflation data helped provide a semblance of comfort to the market; Powell is clearly cautious to avoid a repeat of December.

In keeping with the message that the downward adjustment to IOER is more of a funding-market plumbing consideration than a true reflection of the stance of monetary policy, the reaction in the fed funds futures market to Wednesday’s decision was telling. The December ’19 contract was trading with an implied yield of 2.20% in the lead up to the technical adjustment, or pricing 25 bp of easing when taken against 2.45% EFFR. The reaction after the release of the statement was a 5 bp drop, and while dovish read on that move may be tempting, in fact the takeaway should be a net unchanged direction for policy. The adjustment to 2.15% on the Dec ’19 contract still reflects 25 bp of easing if the assumption is that EFFR will move back to 2.40% now that IOER has been adjusted to 2.35%.

And now the question is how quickly will EFF rebound back to 2.45% even with the IOER freshly trimmed down to 2.35%, confirming that with every passing day the Fed is increasingly losing control of overnight funding rates…

via ZeroHedge News http://bit.ly/2ITkold Tyler Durden

Update: That did not take long – Jerrold Nadler says he hopes Barr reconsiders, may issue a subpoena to force Barr to testify with the next step being a citation if no accommodation is reached.

“He’s trying to blackmail the Committee,” says Judiciary Chair @RepJerryNadler of Atty Gen Barr refusal to testify Thursday, objecting to questioning by Committee staff counsel. Nadler says the Committee has the right to determine its own procedures. pic.twitter.com/KvCSvIqrco

— Mark Knoller (@markknoller) May 1, 2019

*  *  *

Following an extremely contentious hearing today in front of the Republican-controlled Senate Judiciary Committee, resulting in multiple Democrats calling for his resignation, Attorney General William Barr is reportedly not expected to show up for a scheduled hearing about Special Counsel Robert Mueller’s Russia investigation before the Democrat-controlled House Judiciary Committee tomorrow.

PBS reports that: “Per a congressional source, the House Judiciary Committee has been notified by the DOJ that Attorney General Barr is NOT coming to testify tomorrow. DOJ has told the committee to expect a letter officially stating that shortly, according to my source.”

BREAKING: Per a congressional source, the House Judiciary Committee has been notified by the DOJ that Attorney General Barr is NOT coming to testify tomorrow. DOJ has told the committee to expect a letter officially stating that shortly, according to my source.

— Yamiche Alcindor (@Yamiche) May 1, 2019

Additionally, The Hill reports that Rep. Doug Collins (R-Ga.), the top Republican on the House Judiciary Committee, said he does not believe Attorney General William Barr will show up to for Thursday’s scheduled hearing — and does not believe he should.

“No, I do not [think Barr will attend the hearing] — and I don’t encourage him to,” Collins told The Hill.

“If you saw the abuse of power from the chairman [Jerrold Nadler (D-N.Y.)] this morning in the committee hearing, I think that is something that is very disturbing and should be disturbing to all members.”

Bloomberg reports that Barr’s apparent decision not to attend the hearing dramatically escalates tensions with the Justice Department objecting to the format of the hearing, which would let the committee’s Democratic and Republican counsels grill Barr for as long as 30 minutes at a stretch after an initial five-minute exchanges with lawmakers.

Barr was certainly facing down quite a crowd…

via ZeroHedge News http://bit.ly/2J8oq8P Tyler Durden

CNN’s already-dismal prime time ratings dropped 26% in April compared to the same month last year, according to Forbes. The network’s total prime time audience was well under a million viewers at 767,000, while competitors MSNBC and Fox News more than doubled that figure at 1.66 million and 2.395 million viewers respectively. 

April ranks as CNN’s lowest-rated month among total viewers in nearly four years, since October 2015. CNN’s Cuomo Primetime, which has been the network’s highest-rated hour, drew a total audience of 917,000 viewers in April, the show’s worst-ever performance.

Among viewers 25-54, the demographic most coveted by national advertisers, the falloff for CNN was even more stark: down 41 percent. CNN drew 198,000 viewers in the demo, behind MSNBC (255,000) and Fox News (389,000). All three networks saw year-over-year declines in April, with MSNBC down 36% and FNC down 19%. –Forbes

Of the prime time cable news shows, Hannity on Fox News came in first with a total audience of 3.086 million. Tucker Carlson Tonight came in second at 2.834 million, while MSNBC‘s The Rachel Maddow Show came in third at 2.63 million. 

CNN didn’t have a single show that finished among the top five, while their top-rated hour, Cuomo Primetime, finished in 26th place according to the report. 

According to Nielsen, Fox is now the most-watched cable news network in prime time for 208 consecutive months. 

Broken down by hour between Fox News, CNN and MSNBC, Adweek reported the following on Tuesday: 

via ZeroHedge News http://bit.ly/2Lgx7R9 Tyler Durden

Authored by Michael Snyder via The End of The American Dream blog,

The mainstream media continues to try to convince all of us that the U.S. economy is “booming”, but meanwhile the number of homeless people is setting all-time record highs in major cities all over the nation.  The recent article that I published about how wealthy elitists on the west coast are freaking out as hordes of homeless people take over their neighborhoods received a tremendous amount of attention, but nobody has a worse problem with homelessness than New York City does.  According to the Department of Housing and Urban Development, approximately 14 percent of all the homeless people in the entire country currently live in New York City…

According to the Department of Housing and Urban Development’s most recent assessment report, the number of people experiencing homelessness has been rising. The HUD’s annual survey found that on a single night in January 2018, there were a total of 552,830 homeless people across the country. New York City had 78,676 — or about 14 percent of the nation’s homeless population.

That number, 78,676, was a brand new all-time record high.

And more records are being broken during the early part of this year.

On Tuesday, the Coalition for the Homeless issued a brand new State of the Homeless report for 2019.  According to that report, the number of people living in homeless shelters in New York City has been breaking record after record…

If found that in February 2019, an average of 63,615 men, women, and children slept in New York City shelters each night, just shy of the all-time record set in January.

While the number of families decreased slightly, the number of homeless single adults continues to increase.

An all-time record 18,212 single adults slept in shelters each night in February 2019, up 150 percent from 2009. Between September 2018 and April 2019, the number of single adults in DHS shelters reached a new nightly record high 32 times, according to the report.

If this is what an “economic recovery” looks like, then I shudder to think what will happen when the next recession hits.

Overall, “an all-time record 133,284 unique individuals spent at least one night in a New York City DHS shelter” during fiscal year 2018.

That represents a 61 percent increase since fiscal year 2002.

Obviously very little of the money being made on Wall Street is trickling down to those on the bottom rungs of the economic ladder.  The stock market may be soaring, but more people than ever in New York do not have a place to sleep at night.

In the State of the Homeless report, Mayor de Blasio and Governor Cuomo both received an “F” for their handling of the homelessness crisis.  Obviously this did not please either of them, and both of them are trying to defend their records.

For example, Mayor de Blasio can point to the fact that he just got judicial approval to open a homeless shelter on Billionaire’s Row in midtown Manhattan…

New York City officials received the go-ahead to open a homeless shelter in an old hotel in midtown Manhattan – one which happens to be back-to-back with one of the most luxurious and expensive condo buildings in the world.

A coalition of homeowners on West 58th Street sought an order to block a move by the city and its agencies to open a shelter in the former Park Savoy hotel at 158 West 58th. Among other things, they argued that the building was not up to fire safety codes and that it would create a public nuisance.

Apparently this new homeless shelter literally “stands back-to-back against the iconic One57 apartment building” where Michael Dell purchased a $100 million condo a few years ago.

And just like on the west coast, the wealthy residents of this neighborhood are quite upset about their potential new neighbors…

The West 58th Street Coalition, on its Facebook page, says its neighborhood is “under threat” by the shelter plan.

“While we understand the need to shelter the city’s homeless, we believe the residents on our block deserve to be consulted before one of our buildings is filled with recently released parolees,” the coalition wrote in an April 2018 position statement.

It is easy to laugh at the plight of these condo owners, but there is nothing funny about America’s rapidly exploding homelessness crisis.

In the old days, strong family units provided a national safety net that the federal government could never match.  If someone was having a really hard time, another member of the extended family would take them in.  But today the traditional family unit is under attack from a thousand different directions, and many homeless people literally don’t have anyone that they can turn to.

In addition, more Americans are hooked on legal and illegal drugs today than ever before in American history, and that is greatly contributing to the homelessness crisis.  A very large percentage of the homeless are addicts, and this is particularly true on the west coast.

Of course many that are living on the streets have simply had a run of bad luck.  Unless your family is independently wealthy, it is likely that you have had some tough times in your own life.  We should never look down on those that are hurting, because with a few bad breaks many of us could end up on the streets ourselves.

We live at a time when literally everything in our society seems to be coming apart.  And unless a miracle happens, things are going to get much, much worse in the months and years ahead.

via ZeroHedge News http://bit.ly/2GO2zRa Tyler Durden

Wall Street legend and former special adviser to President Donald Trump, billionaire Carl Icahn, is out starkly warning against the idea of modern monetary theory, according to Bloomberg. Icahn believes that inflation could revive and “spin out of control” if the tenets of modern monetary theory are embraced.

This makes Icahn the latest in a long line of economic voices to speak out against the progressive “economic doctrine” – if you can even call it that – that has dominated the financial news headlines over the last year.

The idea that a country can’t go broke simply because it prints its own currency has backing from such economic intellectual heavyweights as freshman congresswoman and socialist Alexandria Ocasio-Cortez. The idea that the country can run larger budget deficits as long as prices stay low has made MMT one of the proposed solutions for expensive proposed legislation, like AOC’s Green New Deal.

Icahn, who has been around slightly longer than AOC, disagrees:

 “You can print money up to a point, but after that point, it could become very dangerous. We don’t want to hit a wall that you can’t recover from. Once you get into an inflationary spiral, it’s very difficult to get out of it — and therein lies the danger.”

Icahn’s said three years ago that the obsession with the budget deficit was “ridiculous” and that America’s status as the global reserve currency would help alleviate some concerns over the deficit.

But his unwillingness to accept MMT shows that even the “reserve currency the world” has boundaries and limitations. Icahn’s comments come after Warren Buffett said this year he’s also not a fan of modern monetary theory because it could lead to spiraling inflation. Dozens of policymakers and leaders have also spoken out about MMT. Recent critiques have even come from Federal Reserve Chairman Jerome Powell and International Monetary Fund chief Christine Lagarde. We can’t help but think that when these inflation loving central bankers are the ones critiquing your money printing aspirations, maybe it is a little too much.

However, there are some economists supporting the idea. Olivier Blanchard, the former IMF chief economist, suggested that the money could be used for environmental purposes while bond investor Bill Gross, who just slunk out the back door after a couple years of awful performance retired, said the US could “easily double its deficit”.

The budget gap under Trump has continued to widen and is forecasted to reach $1.1 trillion by 2022, according to the CBO. That’s equivalent to 4.7% of GDP compared to an average of 2.9% over the past half century.

While the obvious result of MMT would be inflation accelerating, if not spiraling out of control, it is these very same basic economic principles that the academics in charge of monetary theory in this country seem unequipped to understand. Our hope is that they listen to some of the actual adults in the room, like Icahn, who are doing their best to guide them in the right direction.

via ZeroHedge News http://bit.ly/2VKvnnm Tyler Durden

Authored by Simon Black via SovereignMan.com,

In the year 1890, according to census records, my great-great-grandfather was spending the final years of his life living with one of his children on a farm in Choctaw County, Oklahoma.

I’ve spent most of the last twenty years doing some hardcore research into my family history– and I’ve identified records going all the way back to 1250 in England.

And one common theme that I’ve noticed: when people reached a certain age, they almost invariably moved in with their kids and grandkids.

This is what ‘retirement’ used to mean; it was simply expected that younger generations would look after older generations.

And back then, since households were quite large, there were usually 4-6 other people in the home to look after great-great-grandpa.

This arrangement might sound quaint and outdated. But it’s still the fundamental premise behind many retirement plans, including Social Security in the Land of the Free.

It’s still the younger generations taking care of the older generations. That’s the way the system functions: younger people pay taxes to fund benefits for older people who have retired.

So you can see the similarities:

Hundreds of years ago it would be your kids doing the work to take care of you in retirement. Today it’s everyone’s kids, collectively, doing the work to take care of every retiree.

Hundreds of years ago it took several other people in a household to care for the elderly. Today it takes a certain number of workers paying into the system to support each retiree receiving benefits.

They call this the ‘worker-to-retiree ratio’.

And the Social Security Administration (SSA) has said that they need a MINIMUM of 2.8 workers paying into the system for every one retiree collecting benefits.

You can probably see that maintaining this delicate balance requires steady population growth; every generation has to be large enough to support the previous generation.

If population growth trends get too far out of whack, it means there will either be too few workers, or too many retirees…

And that’s exactly what’s happening now: people are simply having fewer children.

In the Land of the Free, birth rates are the lowest levels EVER since they started keeping records decades ago.

And this has been a long-term problem: fertility rates were already in decline when the 2008 financial crisis accelerated the trend.

Researchers estimate that 4.8 million babies were never born as a result of the Great Recession.

Some of the reasons are pretty obvious– kids are expensive. And they aren’t getting any cheaper.

You used to be able to raise a family on a single income. Today, the average household can afford one, maybe two kids. And that’s with both parents working.

Unsurprisingly, as the fertility rate has fallen over the years, so has Social Security’s worker-to-retiree ratio.

It’s already dangerously low.

And next year there will be just 2.7 workers paying into Social Security for each retiree – below the minimum necessary to sustain the program. After that it will keep falling.

In 2034, when Social Security estimates its trust funds will run out of money, there will only be 2.3 workers per retiree.

And just to pile it on, technological automation is poised to radically change the workforce.

In 10-15 years, you’ll see entire professions replaced by robots and AI… neither of which pays into the Social Security system.

It’s not just the US that’s grappling with this either.

Finland’s fertility rate is below the US rate. They based their healthcare system on the same faulty assumption, that the population will continue to grow.

Yet now there aren’t enough young people paying into the system to support the older people who use more healthcare.

Most of Europe is even worse off. The combined EU fertility rate is just 1.59 babies over the course of a woman’s lifetime, well below replacement levels.

Japan is far more restrictive on immigration compared to the US and EU, and is on the cutting edge of automation. Japan’s fertility rate is just 1.4 and it has one of the oldest populations in the world.

The one-child policy that China had in place for decades is already putting a strain on the burgeoning middle class. By 2050, 44% of the population is expected to be dependent elderly.

We talk about this issue so much because it’s important to recognize that monumental change is coming. The entire way retirement is structured, since long before Social Security, is coming to an end.

You can’t rely on the next generation for retirement anymore. To be secure, you have to take matters into your own hands.

If you’re retired now, or are about to retire, you might be fine. You can probably ride it out before the entire system has to reset.

But if you’re 50 or younger, Social Security will run out of money before you’re able to start collecting.

The younger you are, the surer you can be that these retirement systems won’t be available to you. But that also means you have time to do something about it.

Several countries have options for self-directed retirement accounts. In the US, a solo-401(k) is a great option for anyone with side or self-employment income.

And in addition to the flexibility and freedom you have to invest with a solo-401(k), you get to contribute money before it’s taxed.

That’s important, because unfortunately, you are still going to be expected to pay into Social Security, even though you might never collect it.

And as the politicians try desperately to save these programs, you can expect to pay higher taxes.

Any money you can save on taxes and funnel into your private retirement account will be compounded year after year instead of flushed down the toilet.

And there is absolutely no downside in doing this. Worst case scenario: Social Security is miraculously saved, and you have extra money for your retirement. Not exactly a bad outcome.

Check out our recent podcast to see how you could use a solo-401(k) to tuck some extra money away for retirement.

And to continue learning how to ensure you thrive no matter what happens next in the world, I encourage you to download our free Perfect Plan B Guide.

via ZeroHedge News http://bit.ly/2UUyOTU Tyler Durden

A leaked FBI document reveals that members of Antifa were plotting to purchase guns from a “Mexico-based cartel associate known as Cobra Commander,” and “stage an armed rebellion at the border,” according to the San Diego Union Tribune, which received a copy of the unclassified report. 

When federal law enforcement officials last year began collecting dossiers on mostly American journalists, activists and lawyers in Tijuana involved with the migrant caravan, one part of their investigation focused on an alleged plot by a drug cartel to sell guns to protesters, according to a Federal Bureau of Investigation report.

A Dec. 18, 2018, document from the FBI, obtained by the Union-Tribune, specifies an alleged plan for activists to purchase guns from a “Mexico-based cartel associate known as Cobra Commander,” or Ivan Riebeling. –San Diego Union Tribune

The document warns that “anti-fascist activists” had “planned to disrupt U.S. law enforcement and military security operations at the US/Mexican border.” 

Of note, the unclassified document labeled “law enforcement sensitive” is a portion of an ongoing investigation in which charges have yet to be filed.

“This is an information report, not finally evaluated intelligence,” reads the six-page report. “Receiving agencies are requested not to take action based on this raw reporting without prior coordination with the FBI.”

The FBI sent its report with “priority” to the Department of Homeland Security, U.S. Customs and Border Protection, the Drug Enforcement Agency, Immigration and Customs Enforcement, the Central Intelligence Agency and the National Security Administration, among other agencies.

Two people named in the report, Ivan Riebeling and Evan Duke, said the accusations are untrue and illogical.

Duke said he never met Riebeling and that Riebeling was not someone he would have associated with. –San Diego Union Tribune

The FBI report also says that a group of pro-migrant activists in Tijuana supporting the recent caravans “were encouraged to bring personally owned weapons to the border and the group also intended to purchase weapons from a Mexico-based cartel associate known as Cobra Commander, AKA the Mexican Rambo, and smuggle the weapons into the United States.”

Mexican Rambo says the FBI’s report is not logical, and that he’s not in the carte. 

“It doesn’t make any sense that someone from the United States would purchase guns in Mexico. And the Hondurans certainly didn’t bring money to buy guns. It doesn’t make any sense; in fact it’s extremely absurd to say the Hondurans wanted to attack the United States at the border,” said Reibeling, who said he had helped an early caravan of mostly women and children who arrived in Tijuana – only to quickly decide that he “no longer wanted to help Hondurans” after he found them selling some of the items he provided them such as blankets, water and shoes. 

“They were exchanging these items for drugs and it made me mad, and I no longer wanted to help them and I was vocal about it,” he said. 

Reibeling then posted a video online in which he encouraged drug cartel members to “hunt down” migrants and take them to Mexican immigration authorities. 

Reibeling said he was never detained or interrogated by the FBI about his involvement with the migrant caravan. He said he took no part in trying to sell guns to anyone and that he’s not a cartel member.

“I am not cartel. I don’t sell drugs. I don’t sell arms,” said Riebeling. “I’m a revolutionary. A man who believes in his ideals, and I’m going to defend Mexico.”

The unclassified FBI report identifies Riebeling as being “associated with the Jalisco New Generation Cartel,” but Riebeling, a Tijuana resident, said he is not.

“If I were selling drugs, or guns, they would kill me,” said Riebeling.

Riebeling said he was upset by the accusations in the report. –San Diego Union Tribune

“The government of the United States knows perfectly well that I am not a member of any cartel,” said Riebeling. “I have associates with several of the cartels, yes I do, but I am not a narco-trafficker and they know that.”

Evan Duke, the other person named in the report, says Riebeling was not someone he would associate with because he didn’t trust him, and because Riebeling had expressed negative views over social media about migrants in the caravan. 

“Here I find the government again trying to tie me into some (stuff) I wasn’t involved in,” said Duke, an anti-Trump activist whose work in Tijuana was monitored by federal authorities. 

“We were warned to look out for him,” Duke said of Riebeling. “We took the precaution to find out who he was and where he was, but we never had any contact with him. And we never saw him around the migrant caravan.” 

Duke thinks it might be possible that “right-wing conspiracy groups” fed false information to authorities about him – noting that a North Dakota radio talk-show host bragged on air about reporting he and his colleagues to law enforcement. 

In mid-November, Duke and a group of activists began renting a house in Tijuana and hosting about 25 volunteers at a time working to counter what they viewed as the U.S. government’s violation of asylum seekers’ human rights.

The FBI’s report says the rental house in Tijuana was guarded by armed group members.

Riebeling, who also goes by the names Ivan del Campo, Ivan Mariano Martin del Campo and Jose Ivan Reiveling Sierra, has criminal records in Mexico and the United States, according to a Mexican state police document and confirmed by the U.S. Drug Enforcement Administration. –San Diego Union Tribune

Who’s telling the truth?  

via ZeroHedge News http://bit.ly/2WdsLv0 Tyler Durden

Despite his best efforts, Fed Chair Powell managed to spoil the party with his use of one of The Fed’s favorite words – “transitory” – signaling that expectations for rate-cuts predicated on inflation staying low are perhaps not as set in stone as the market believes.

The hawkish tilt was very evident in the market’s implied rate-change pricing…

Additionally, Powell commented on “elevated (but not extreme) asset values.”

If Powell is so sure the decline in core inflation is transitory, why wasn’t this mentioned in the press statement?

— David Rosenberg (@EconguyRosie) May 1, 2019

The Dollar spiked, and bonds, stocks, and gold slipped on the “transitory” comment…

 

Trannies were worst performers on the day, but Powell’s comments dragged stocks broadly lower on the day…

 

VIX and Stocks continue to decouple…

 

Credit spreads blew out quite notably Powell’s “transitory” comments…

 

Treasury yields ended the day higher…with the short-end dramatically so…

 

Not that the weak ISM and initial Fed statement sent yields lower before Powell’s “transitory” comment…

 

The dollar followed a similar path, dropping initially and then spiking on “transitory”…

 

Ugly day for Dr.Copper…and Silver…

 

Gold pumped initially, then dumped as the dollar spike on “transitory” comments…

 

Silver snapped below its 200DMA…

 

 

Finally, with today’s ugliness in ISM, ‘soft’ survey data has fallen below its ‘hard’ data…

 

via ZeroHedge News http://bit.ly/2WdLkPS Tyler Durden

It’s that time of year again… but this one may be ‘different‘.

Confirming the old axiom to “sell in May and go away,” LPL Financial notes that the next six months have historically been the worst for stocks (seasonally-speaking).

However, in recent years that saying has not held well for investors.

“Stocks have actually risen over this dreaded six-month stretch in six of the past seven years, while the S&P 500 Index has gained in May six consecutive years,” explained Senior Market Strategist Ryan Detrick. “Blindly going to cash and waiting until after Halloween to re-invest hasn’t been the most profitable strategy lately.”

However, as Bloomberg’s Ye Xie notes, 2019 has been different. The S&P’s 17.3% gain in 2019 through the end of April makes it the fourth best start to a year in history.

And, that may be a bearish signal.

Because historically when the January-April return exceeds 15%, the performance for the rest of the year is paltry at best and, at times, a disaster.

The table above compares the best performing January-April periods and the returns afterwards.

While this may sound too naïve to be scientific, it does show there’s some legitimacy to the “Sell in May” axiom under certain circumstances.

Let’s see if history repeats itself.

via ZeroHedge News http://bit.ly/2WoE9Vb Tyler Durden