Category: zerohedge

Authored by Charles Hugh Smith via OfTwoMinds blog,

The reality is there is no avenue left for advocacy, grievances or redress in a system dominated by global corporations and self-serving political insiders.

What’s striking about the protests in Paris against higher fuel taxes is the universality of the protesters’ expressions of being fed up with a status quo that no longer listens to them. Their commentaries of frustration are echoed around the world, from the U.S. to China: ‘People are in the red. They can’t afford to eat’.

The basic problem is obvious: wages have stagnated while taxes, interest on debt and costs of essentials have soared. When officialdom claims the higher fuel taxes are an expression of concern for the environment, it’s difficult not to gag at the hypocrisy: where are the higher taxes on the corporate and private jets, and the bunker-fuel burning freighters that ply the seas in service of globalization?

People are frustrated because debt-serfs and tax donkeys don’t have any real political options: with all the political parties mere variations of a sclerotic, self-serving elite, our only choice is to either not vote at all or vote for the least bad option.

In the original version of feudalism, peasants armed with pitchforks knew where to go for redress or regime change: the feudal lord’s castle on the hill. Though you won’t find this in conventional narratives of the Middle Ages, peasant revolts were a common occurrence; serfs weren’t always delighted to toil for their noble masters.

In the present era of corporate dominance, where can serfs go to demand redress and financial freedom from the neofeudal system? Nowhere. The global corporations that own the land and the productive assets have no castle that can be stormed; they exist in an abstract financial world of stock shares, buybacks, bonds, lobbyists and political influence.

The reality is there is no avenue left for advocacy, grievances or redress in a system dominated by global corporations and self-serving political insiders.The castle on the hill doesn’t exist; it is diffused all over the planet, and well protected by state minions who listen only to neofeudal corporate interests.

The problem for well-meaning politicos is the system cannot be reformed or repaired: the cartel-state socio-economic system is now the wrong unit size and the wrong structure. As I explain my my new book, the cost of buying political influence is a small fraction of the gains reaped from buying the influence.

Mere debt-serfs and tax donkeys cannot compete with campaign contributions and influence purchased with tens of millions of dollars in cartel profits. The system isn’t simply rigged to benefit insiders–it’s incapable of listening to debt-serfs and tax donkeys because their demands would collapse the system.

Corporate power and self-serving insiders destroy democracy. That is the heart of neofeudalism, which is the only possible output of the status quo.

*  *  *

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Galvanizing support by warning about an imminent Russian invasion, Ukrainian President Petro Poroshenko managed to win approval from the Ukrainian Parliament in a midnight vote on Monday following five hours of contentious debate.

Unwilling to simply accept Poroshenko’s claims that he had heard reliable whispers about an imminent Russian invasion, opposition figures pressed Poroshenko on his reasoning for the emergency measures, and ultimately succeeded in forcing him to water down the proposal. But even before Poroshenko’s decree won the approval of lawmakers, the Ukrainian president had already started deploying troops into the streets of his country.

Now in a state of martial law, Ukraine has called up its reservists and deployed all available troops to join the mobilization. Initially expected to last for two months, Poroshenko revised his degree to avoid accusations that he would try to interfere in the upcoming Ukrainian election. The decree passed by the Rada will leave martial law in effect for 30 days. The country has also started restricting travel for Russian nationals. NATO Commander Jens Stoltenberg told the Associated Press that Poroshenko had given his word that the order wouldn’t interfere with the upcoming vote.

#BREAKING: After hours of debate the #Ukrainian Parliament has just voted on activating Martial Law for 30 days beginning November 28. Reservists will be called up as a part of it. #Russia #Ukraine

— Instant News Alerts (@InstaNewsAlerts) November 26, 2018

The conflict between the Ukraine and Russia exploded into life on Sunday when Russian ships fired on two Ukrainian artillery ships and rammed a tugboat as the ships traveled toward the Kerch Strait, which connects the Sea of Azov to the Black Sea. Russia’s mighty Black Sea fleet has taken the three ships and their crew into custody, and has so far ignored calls to release the soldiers by the UN, European leaders and Poroshenko himself.

US officials criticized Russia for its “aggressive” defense of the Kerch Strait, which Ukraine has a right to use according to a bilateral treaty. After Nikki Haley said during an emergency meeting of the UN Security Council that Russia was making it “impossible” to have normal relations with the US, Mike Pompeo said Russia’s “aggressive action” was a “dangerous escalation” and also “violates international law.” He also advocated for Poroshenko and Russian President Vladimir Putin to engage in direct talks.

Russia says the ships disobeyed orders to halt, and that Ukraine had failed to notify Russia of the ships’ advance. Ukraine claims that it did notify Russia, and that the incident is the result of “growing Russian aggression.” Six Ukrainian crewmen were injured in the Russian attack, which was the first act of violence between the two nations since the annexation of Crimea.

Chief diplomats from both countries traded accusations of provocations and “deliberate hostility.”

Ukrainian Foreign Minister Pavlo Klimkin tweeted that the dispute was not an accident and that Russia had engaged in “deliberately planned hostilities,” while Russian Foreign Minister Sergey Lavrov blamed Kiev for what he described as a “provocation,” adding that “Ukraine had undoubtedly hoped to get additional benefits from the situation, expecting the U.S. and Europe to blindly take the provocateurs’ side.”

Poroshenko said the martial law was necessary because Ukraine was facing nothing short of a all-out ground invasion.

Poroshenko said it was necessary because of intelligence about “a highly serious threat of a ground operation against Ukraine.” He did not elaborate.

“Martial law doesn’t mean declaring a war,” he said. “It is introduced with the sole purpose of boosting Ukraine’s defense in the light of a growing aggression from Russia.”

But the president’s plans to impose martial law throughout the country were rebuffed as the opposition forced a compromise where troops will only be deployed in 10 border provinces. These provinces share borders with Russia, Belarus and the Trans-Dniester, a pro-Moscow breakaway region of Moldova. 

Still, many remained skeptical. Opposition figures, including former President Yulia Tymoshenko pointed out that the order would give soldiers broad latitude to do pretty much whatever they want. Furthermore, Ukraine never called for martial law during the insurgency in the east that erupted back in 2014, eventually leading to an armed conflict that killed more than 10,000.

The approved measures included a partial mobilization and strengthening of air defenses. It also contained vaguely worded steps such as “strengthening” anti-terrorism measures and “information security” that could curtail certain rights and freedoms.

But Poroshenko also pledged to respect the rights of Ukrainian citizens.

[…]

Despite Poroshenko’s vow to respect individual rights, opposition lawmaker and former Prime Minister Yulia Tymoshenko warned before the vote that his proposal would lead to the possible illegal searches, invasion of privacy and curtailing of free speech.

“This means they will be breaking into the houses of Ukrainians and not those of the aggressor nation,” noted Tymoshenko, who is leading in various opinion polls. “They will be prying into personal mail, family affairs … In fact, everything that is written here is a destruction of the lives of Ukrainians.”

Poroshenko’s call also outraged far-right groups in Ukraine that have advocated severing diplomatic ties with Russia. Hundreds of protesters from the National Corps party waved flares in the snowy streets of Kiev outside parliament and accused the president of using martial law to his own ends.

But Poroshenko insisted it was necessary because what happened in the Kerch Strait between Crimea and the Russian mainland “was no accident,” adding that “this was not the culmination of it yet.”

His critics reacted to his call for martial law with suspicion, wondering why Sunday’s incident merited such a response. With his approval ratings in free fall following a series of corruption scandals, Poroshenko’s enemies worry that the incident may have been stage-managed to give the president an excuse to crack down on dissent and free movement ahead of the vote.

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So much for any hopes that Trump will push for a trade deal with China at any cost when he meets with the Chinese president later this week.

Minutes after the market closed, the WSJ reported that with just four days to go before his summit with China’s President Xi, Donald Trump said he expects to move ahead with boosting tariff levels on $200 billion of Chinese goods to 25%, calling it “highly unlikely” that he would accept Beijing’s request to hold off on the increase.

In an interview with the WSJ, Trump said that if negotiations don’t work out, he would also put tariffs on the rest of Chinese imports that are currently not subject to duties.

“If we don’t make a deal, then I’m going to put the $267 billion additional on,” at a tariff rate of either 10% or 25%, Trump told the WSJ.

While Chinese officials have said their priority at the meeting between Trump and Xi was to convince the U.S. to suspend the planned Jan. 1 increase in tariffs on $200 billion in imports from China to 25%, from 10% currently, Trump said that the U.S. was unlikely to accede.

And confirming that the US has no intention of easing its hard line stance, no matter what Larry Kudlow says, Trump made it clear that “the only deal would be China has to open up their country to competition from the United States. As far as other countries are concerned, that’s up to them.”

Adding insult to injury, Trump said that tariffs could also be placed on iPhones and laptops imported from China, a move which would certainly provoke an angry response from China and could result in a collapse in iPhone sales on the mainland. The administration has been worried about a consumer reaction should such items be subject to levies.

“Maybe.  Maybe.  Depends on what the rate is,” the president said, referring to mobile phones and laptops. “I mean, I can make it 10%, and people could stand that very easily.”

The WSJ notes that the mounting tariffs on Chinese imports have prompted many U.S. companies that export to the U.S. from China to examine whether they should put facilities elsewhere.

“What I’d advise is for them to build factories in the United States and to make the product here,” he said. “And they have a lot of other alternatives” Trump said, just hours after GM announced its intentions to shutter numerous US plants and fire thousands of workers, prompting an angry response from the president.

As a reminder, the key reason the Trump administration made a priority of renegotiating the NAFTA was to encourage U.S. companies to shift their production from China to North America, if not the U.S.

So are Trump’s latest belligerent comments just more jawboning or is the president being serious? Judging by the futures response, which have legged sharply lower following the interview…

… coupled with the sharp drop in the Chinese Yuan…

… and Apple stock…

… the market has is not waiting around to find out.

 

 

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Must.Get.Stocks.Higher…

Chinese stocks gave up early gains in the afternoon session to close modestly lower…

 

European stocks surged (led by FTSEMIB) on the heels of hope for an Italian budget deal…

 

US Futures show the ramp around the European open and again at the US open, weakness around the European close, and then an afternoon of low volume bids…

 

On the cash side, Nasdaq was the biggest gainer in the squeeze, Trannies and Small Caps underperformed…

 

S&P high stalled just ahead of the 2017 closing level of 2673.61.

That keeps the index in the red for the year. I know it is somewhat random. Why is the last day more important than the 1st day or the 50th day or the 100th day. But it is. It makes a difference.

Volume was 30% below recent average…

Some context for the bounce…

 

Another ramp ‘funded’ by another ‘short squeeze’…but the squeeze ran out of fuel shortly after the European close…

 

GM was halted on terrible news and soared 7%!!

GE hit new cycle lows…

Apple, however, tumbled on bad news – dropping below MSFT market cap for the first time since May 2010…

 

Credit market compressed on the day, but VIX compression is outpacing them for now…

 

Treasury yields rose on the day with the long-end outperforming (up 1bps vs 2-3bps across the curve)…

 

The dollar extended its gains, rallying to 2-week highs…

 

Cable gave up early gains to fall back to pre-“deal” levels once again…

 

Offshore Yuan also roundtripped today, selling off since the European open after rallying through the Asia session…

 

Cryptocurrencies bounced back a little today after the bloodbath of the weekend…

 

Dollar strength weighed on copper and PMs but crude managed to bounce…

 

Another dead cat bounce in crude…

 

Gold continues to be pegged around 8500 Yuan… (or is it vice versa?)

 

Finally, courtesy of Bloomberg’s Michael McDonough, we suggest the global economy is not doing so great after all…

The biggest collapse in global auto sales since the financial crisis??!! Not exactly reassuring.

And in case you were hoping for this bad news to be good news – forget it – as Morgan Stanley explained:

…we think that a major challenge for US assets next year is that [The Fed] is ‘boxed in’ – better-than-expected growth will simply mean more Fed tightening, while weaker-than-expected growth will raise slowdown risks, with limited scope for policy support. In a major change from the last 10 years, both good news and bad news create problems for US markets.

Retail investors in U.S. stocks are now the most bearish on the market’s direction since February 2016, according to the American Association of Individual Investors weekly survey.

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One of the reasons why Chinese stocks suffered a sharp selloff in mid-October was the result of some 5 trillion yuan in stock-pledged loans issued against stock collateral, and which as a result of the sharp drop in Chinese markets, had gone underwater, prompting banks to remand repayment as LTVs rose above 100%.

The result was a broad liquidation of any unencumbered assets by the creditors, which forced Chinese authorities to intervene and demand that banks become more lenient in demanding loan repayment, effectively implementing yet another stealthy bailout of Chinese markets.

Commenting on China’s broad (ab)use of loans issued with stock as collateral, one month ago Goldman said that “users of financial leverage in equities have shifted from individuals to major shareholders in the form of Stock Pledged Loans (SPL)” this time around with “the risks revolving around SPLs being the major concerns in this market downturn.”

The bank also estimated that roughly 1 trillion in stock-pledged loans currently face a margin call risk, with the threat naturally rising the lower stock prices drop.

The reason we remind readers of this particular episode, is that soon it may be US markets that are affected by underwater margin loans.

According to Jim Steiner, head of Wells Fargo’s ultra-high-net-worth business, billionaires and millionaires in the U.S. are arranging scrambling to arrange the same kinds of stock-loans, to have funds readily available so they won’t have to sell off investments when the next market downturn comes.

“They always want to have lines in place for if markets do turn down and they get capital calls on private investments,” Steiner, who leads Wells Fargo’s Abbot Downing, told Bloomberg Television. “They want to be able to make those capital calls through use of the line as opposed to basically selling equities in the public markets.”

Steiner has the privilege of working at one of Wells Fargo’s units that has seen strong demand for its services: Abbot Downing has expanded into a $43 billion business since the brand started in 2012, and lending has increased by 5% in the past year. According to Bloomberg, Jon Weiss, head of Wells Fargo’s larger wealth and investment-management arm, said earlier this month that he plans to combine Abbot Downing with Wells Fargo’s private bank, which serves clients with at least $2.5 million, under one leader as part of his quest to streamline operations since taking over last year.

As Bloomberg reported recently, at a time when the middle class is generally sinking across the globe and leading to a wave of populism in politics, global personal wealth – which serves ultra high net worth clients – has ballooned to a record $201.9 trillion last year, boon for the private-banking industry. Morgan Stanley and Goldman Sachs are among the other firms seeking to lend more to the ultra-rich, pegging loans as a key area for growth.

So why the surge in demand for stock-pledged loans all of a sudden?

“All crises get more challenging if you have a lack of liquidity and then you also have leverage, and so I think they want to make sure that they’ve got some powder dry – that they don’t have to be selling equities into a down market,” Steiner said, bringing to mind some other vivid examples such as Elon Musk who has taken out hundreds of millions in loans pledged to his Tesla stock.

Of course, what he is describing is the ultimate BTFD trade, one where instead of selling one effectively doubles down with leverage to avoid liquidating assets. While such a bet may prove successful if stocks do indeed stage a rebound, it threatens to lead to even wider losses should a bottom for stocks not emerge, resulting in even broader liquidations as banks force their clients to liquidate the underlying stock collateral, accelerating the market crash.

For an example of just this, look no further than China.

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One of the great unknowns surrounding the outlook for both risk and the global economy, is why China has not been more successful in stimulating both its economy and its stock market. On the first one can point to the collapse in Chinese credit creation, which as we discussed two weeks ago, just posted its lowest growth on record…

…which some have attributed to local banks’ unwillingness to inject new credit as a result of the surge in Chinese corporate defaults coupled with Beijing’s lukewarm willingness to flood the system with another debt tsunami.

But what about local Chinese stocks? While not nearly as important for the local wealth effect as in the US – in China financial assets are at most 30% of household net worth compared to 70% in the US – the continued deterioration in the Shanghai Composite has been welcome by president Trump who frequently highlights the pain in Chinese risk assets as confirmation that  he is winning the trade war with Beijing.

What is even more surprising, is that it now appears that this is precisely what Beijing wants.

According to Goldman, which has analyzed fund flows into and out of Chinese stocks in Q3, the bank finds that overseas investors continued to raise exposure in A shares, perhaps fueled by speculation that Chinese stocks are now sharply undervalued. In fact, China’s A-share ETFs received Rmb80bn inflows in the past 3 months, with both onshore and offshore A-share ETFs seeing net subscription. Also, 28 new passive equity funds (64 ytd) have been set up since July, raising Rmb60bn.

Adding to the confusion, in the third quarter, Goldman counted the largest buybacks in China A shares (Rmb15bn) and 2nd largest for HK (US$2.3bn) on record. At least in the US, this would be sufficient for stocks to if not surge, then at least post modest gains, and yet in Q3, the Shanghai Composite was effectively unchanged.

The reason for this may be in what the Chinese National Team, i.e. Beijing’s Plunge Protection Team, was doing in Q3. And that, in a word, is “selling.”

According to Goldman, the “National Team” was a net seller in 3Q18; the bank says that its bottom-up estimates suggest the “National Team” net sold Rmb104BN in 3Q. This was the biggest quarterly sale by the National Team since the Chinese stock bubble popped in late 2015, and perhaps on record.

Putting the National team’s holdings in context, as of Sept. 30 they accounts for close to 7% of the A-share market, translating into Rmb3 trillion. worth of market cap.

Furthermore, as Goldman calculates, in Q3 the Chinese plunge protectors reduced their holdings in all sectors, dumping financials the most.

Looking at specific names, here is a list of the Top 5 names which saw the most buying and selling in Q3.

Which begs the question: why would Beijing add to its stock market turmoil and embarrassment, if only from a purely political perspective in the ongoing trade war with the US, by not only keeping the price-indescriminate plunge protectors out of the market, but also actively dump a near record amount of shares, making any Chinese stock market gains virtually impossible?

The answer to this very important question may prove elusive, especially since according to Goldman, the National Team may have started buying the market in early/mid Oct. That said, with the Shanghai Composite now below where it was on Sept 30, Beijing may need to double down on its efforts to levitate local stocks… if indeed that is what it hopes to do.

 

 

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Perhaps President Trump was still nursing a grudge from his visit to France earlier this month, or maybe he spent some time ruminating about his low popularity ratings among key US allies. Or maybe he’s still pissed about the whole Jim Acosta thing.

Whatever the reason, the president decided to lash out at CNN on Twitter again Monday afternoon, threatening to create a rival global news network that would help counter CNN’s powerful influence outside the US. While CNN’s ratings in the US are notoriously low, the cable network “has a powerful voice portraying the United States in an unfair and false way” outside the US, where Trump said it has “very little competition.”

“Something has to be done, including the possibility of the United States starting our own Worldwide Network to show the World the way we really are, GREAT!,” Trump concluded.

While CNN doesn’t do great in the United States based on ratings, outside of the U.S. they have very little competition. Throughout the world, CNN has a powerful voice portraying the United States in an unfair….

— Donald J. Trump (@realDonaldTrump) November 26, 2018

….and false way. Something has to be done, including the possibility of the United States starting our own Worldwide Network to show the World the way we really are, GREAT!

— Donald J. Trump (@realDonaldTrump) November 26, 2018

As one reporter pointed out, Trump’s tweets were published while he was speaking to a gaggle of reporters in Washington. This means that either these tweets were sent by a staffer with an eerily similar style of writing to Trump…

These tweets are posting simultaneously with Trump talking to the press as he departs the White House https://t.co/PhLXF9Enmi

— Jennifer Epstein (@jeneps) November 26, 2018

…Or the president has started scheduling his tweets to maximize their potential for distraction.

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Following news of GM’s mass layoffs affecting over 14,000 workers and widespread plant shutterings in the US and abroad, it was only a matter of time before President Trump chimed in with many expecting that today’s news that the icon of US business is not doing well would prompt a less than excited response from Trump. That’s precisely what happened moments ago when Trump, speaking to reporters said he “wasn’t happy” about the General Motors news, noting that the country has done a lot for GM.

He also said that he does not like’s GM’s decision on North American auto production, and said he expects that GM will put something else in Ohio.

• TRUMP SAYS HE WASN’T HAPPY ABOUT GENERAL MOTORS NEWS
• TRUMP SAYS COUNTRY HAS DONE A LOT FOR GM
• TRUMP SAYS DOES NOT LIKE GM’S DECISION ON NORTH AMERICAN AUTO PRODUCTION

Trump also said that he told GM to stop making cars in China, and that he told GM to open a new plant in Ohio “quickly”

Trump also addressed the sharp escalation in tensions between Russia and Ukraine, where the seizure of three Ukraine vessels which allegedly violated Russian territorial waters near the Kerch Strait led Ukraine’s parliament to back president Poroshenko’s proposal to institute a 30-day Martial law on the border with Russia. Trump said that he “doesn’t like” the situation between Ukraine and Russia, and said that the US is working with Europe to resolve it.

As reported earlier, martial law is scheduled to be in place from November 26 to January 26, with the Ukrainian army put on full combat alert even before the martial law was declared amid Ukraine rumors that Russia was preparing for a land invasion.

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In late October, as federal officials were hot on the trail of a person who sent at least 14 suspected pipe bombs to Democratic public figures, two Secret Service agents visited actor and comedian Tom Arnold to determine whether he posed a threat to President Trump over tweets he had made. 

According to video recorded by Arnold’s closed-circuit camera system, the agents warned Arnold that his tweets could cause violence. 

During a campaign rally a few days prior, Trump had praised Rep. Greg Gianforte (R-Mont.) for once body-slamming a reporter. Outraged, Arnold reacted by challenging Trump to a fight. He tweeted, “I say put up or shut up @realDonaldTrump Me vs You. For America. First body slam wins. Any Rally. Any Time. Between now & the midterms. #FridayFeeling.” And Arnold, a onetime Trump pal who became a passionate Trump detractor, followed that up with a tweet that referenced the infamous photo of comedian Kathy Griffin holding a bloody replica of Trump’s head: “Next time Kathy won’t be holding his fake head!” –Mother Jones

“We’re not the First Amendment police… You’re free to say whatever you want to say within certain boundaries… In your type of case, what we’re concerned with a lot, too, is the audience it can reach, that it could incite somebody to do something,” the agents told Arnold, adding “You see a lot of times when we’ve had previous attempts on the president’s life, they got motivated by somebody… So that’s the worry. It’s kind of twofold. We’re addressing the tweet, but we also want to make sure what you said, what can be taken as… And then obviously at the end of this whole thing, the biggest thing is to make sure it doesn’t happen again.”

Hey @TomArnold, it’s a Federal crime to threaten POTUS @realDonaldTrump

You asked him to fight you, and responded with “next time Kathy Griffin won’t be holding his fake head”, which suggested you would kill him in your proposed fight @SecretService pic.twitter.com/Mn3A9iOSRG

— Gabe Hoffman (@GabeHoff) October 21, 2018

To Arnold – a former friend of Trump who turned on the billionaire president – hosting a short-lived show revolving around a search for a tape of Trump using the “N” word, the whole thing was a joke. Not so much for the Secret Service, which reached out to Arnold’s agent on October 24 from their office in Los Angeles – acting on instructions from their headquarters in Washington. The next day, the two agents showed up to Arnolds’ home.  

Arnold recorded the hourlong encounter that took place in his living room. According to Arnold, the agents were aware he was filming the conversation with a security camera that was visible to them. He has allowed Mother Jones to review the full video and post a portion of it. (At Arnold’s request, Mother Jones is not identifying the agents.) Asked about the visit to Arnold’s house, a Secret Service spokeswoman said, “For operational security reasons, the Secret Service cannot discuss specifically nor in general terms the means, methods or resources we utilize to carry out our protective responsibilities.” –Mother Jones

 The agents had a list of “routine questions” for Arnold, including (via Mother Jones): “his height, his weight, his Social Security number. They asked whether he had ever been trained in martial arts. (No.) Did he have any intention of attending a Trump rally? (No.) Not even as a publicity stunt? (No.) Did he have any plans to fly to Washington to try to confront Trump? (No.) How does he typically behave when he gets angry in the workplace? (You put it into the performance.) When was the last time he fired a gun? (“I fired for movies.”) Did he know how to make IEDs? (No.) If he saw Trump, would he have an “impulse…to swing at him?” (“I’m not a crazy person.”) Did he have any ex-wives? (Three, including one named Roseanne.)”

Arnold explained that he had known Trump for decades – as the two of them had gone to the Playboy Mansion together, but that he decided to break off the friendship after Trump “began promoting the racist birther conspiracy theory about Barack Obama.” 

Arnold detailed his previous addictions and his efforts to become sober. He explained his Griffin tweet as “a random throw-away” and insisted that he had been appalled by the Griffin photo shoot. “I would never be part of something like that,” said Arnold, who grew up in Iowa. “I worked at a meatpacking plant on the killing floor for three years.” –Mother Jones

Arnolds’ wife Ashley was then told by the agents, “We always are more concerned about who you could motivate or incite to that action,” to which Ashley responded, “That’s how we feel about Trump.”

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Authored by James Howard Kunstler via Kunstler.com,

Murphy’s Law to the Rescue!

What can go wrong will go wrong. It’s so fundamental to the operation of the universe that Sir Isaac Newton should have installed it between his 2nd and 3rd Laws of Motion — but he had his hands full losing a fortune in Britain’s South Sea Bubble circa 1721, after muttering to a colleague that he “could calculate the motions of the heavenly bodies, but not the madness of the people.” Note to all you hedge fund cowboys out there: Old Isaac was probably smarter than you (and all the algos you rode in on.)

Was it a fretful Thanksgiving this year, a family feud of political recrimination with a lot teeth gnashing through mouthfuls of candied sweets? Well, yes, coming after the extraordinary fiasco of the Kavanaugh hearings and the disputed midterm elections, but the glide path to Yuletide looks kind of bumpy, too, so here’s a short bill or particulars of things tending to go wrong:

Ukraine verges on martial law after a naval incident with Russian ships in the waters off Crimea. Say what? Martial Law? They might as well declare a Chinese Fire Drill. Details of the actual incident in the Straits of Kerch between the Black Sea and the lesser Sea of Azof remain murky besides the fact that two Ukrainian gunships and a tug disobeyed orders from Russian ships to stand down in Russian maritime waters and shots were fired. Who knew that Ukraine even had a navy, and how can they possibly pay for it? But now NATO is trying to get into the act, meaning the USA will get dragged into just the sort unnecessary and idiotic dispute that kicks off world wars. Note to the Golden Golem of Greatness (aka Mr. Trump): this dog-fight is none of our goddam business. Russia, meanwhile, asked the UN Security Council to convene over this, which is the correct response. What could go wrong?

Yesterday, about five hundred Central American migrants rushed the border at Tijuana. The US Border Patrol tear-gassed them and they backed off. Bad optics for those trying to make the case for open borders. Naturally, The New York Times portrayed this as an assault on families, defaulting to their stock sob story, though the mob assembling down there is overwhelmingly composed of young men. Complicating matters, a new Mexican president, Andrés Manuel López Obrador, takes over next Saturday, a Left-wing populist and enemy of Trumpismo. Tijuana is now choking on the thousands of wanderers who were induced to march north to test America’s broken immigration policies. What could go wrong?

Congressional Democrats are said to be “loading the cannons” with subpoenas for Trumpsters to get raked over-the-coals in a circus of committee hearings when they take over the majority in January. They’ll be matched by Senators firing back in hearings controlled by Republicans, setting up the worst political pissing match since the Civil War. In a fair universe, enough dirt would come out on either side to disable the most sinister forces of the Deep State – especially the seditious “intelligence community.” But life is unfair, as Jimmy Carter once observed and the exercise will only fan the flames of already-extreme antipathy. What could go wrong?

The engine pulling that choo-choo train of grievance is Robert Mueller’s Russian Collusion investigation. I expect him to produce mighty rafts of charges against Mr. Trump, his family and associates, and anyone who ever received so much as a souvenir mug from his 2016 campaign. But I doubt that any of it will have a bearing on Russian election “meddling.” And in that case, the charges will be met by counter-charges of an illegitimate investigation, meaning welcome to that constitutional crisis we’ve been hearing about for two years. That’s a mild way of describing anything from a disorderly impeachment to troops in the American streets. What could go wrong there?

Finally, there’s the elephant in the room with the 800-pound-gorilla riding on its back: the economy and its diabolical engine the financial markets. Anyone notice on the lead-up to Thanksgiving and Black Friday that the markets have been going south (and not on holiday to Cozumel)? Stocks are roaring back up again as I write. The TBTF banks and their ringleader, the Federal Reserve, have had a few days to engineer a rally, and the sharper it goes up, the more remaining “greater fools” will get roped in for eventual slaughter. Bond rates are charging back up too, meaning the price is skidding down. Bad combo. The poison cherry-on-top is Bitcoin, which has plunged about 40 percent in ten measly days to a 3000-handle and is headed to zero. So sad, as The Golden Golem might put it. It seemed like such a sure thing less than a year ago. What could have gone wrong?

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