Kavanaugh, The Disgust Circuit, And The Limits Of “Nuts & Sluts”

Authored by Tom Luongo,

The Ragin’ Cajun, I believe, coined the phrase “Nuts and Sluts” to succinctly describe the tactic used by the elites I call The Davos Crowd to smear and destroy someone they’ve targeted.

Brett Kavanaugh is the latest victim of this technique.  But, there have been dozens of victims I can list from Gary Hart in the 1980’s to former IMF head Dominique Strauss-Kahn to Donald Trump.

“Nuts and Sluts” is easy to understand.  Simply accuse the person you want to destroy of being either crazy (the definition of which shifts with whatever is the political trigger issue of the day) or a sexual deviant.

This technique works because it triggers most people’s Disgust Circuit, a term created by Mark Schaller as part of what he calls the Behavioral Immune System and popularized by Johnathan Haidt.

The disgust circuit is easy to understand.

It is the limit at which behavior in others triggers our gut-level outrage and we recoil with disgust.

The reason “Nuts and Sluts” works so well on conservative candidates and voters is because, on average, conservatives have a much stronger disgust circuit than liberals and/or libertarians.

This is why it always seems to be that anyone who threatens the global order or the political system always turns out to have some horrible sexual deviance in their closet.

It’s why the only thing any of us remember about the infamous Trump Dossier is the image of Trump standing on a bed in a Moscow hotel room urinating on a hooker.

The technique is used to drive a wedge between Republican voters and lawmakers and make it easy for them to go along with whatever stupidity is brought forth by the press and the Democrats.

And don’t think for a second that, more often than not, GOP leadership isn’t in cahoots with the DNC on these take-downs.  Because they are.

But, here’s the problem.  As liberals and cultural Marxists break down the societal order, as they win skirmish after skirmish in the Culture War, and desensitize us to normalize ever more deviant behavior, the circumstances of a “Nuts and Sluts” accusation have to rise accordingly.

It’s behavioral heroin.  And the more tolerance we build up to it the more likely people are to see right through the lie.

It’s why Gary Hart simply had to be accused of having an affair in the 1980’s to scuttle his presidential aspirations but today Trump has to piss on a hooker.

And it’s why it was mild sexual harassment and a pubic hair on a Coke can for Clarence Thomas, but today, for Brett Kavanaugh, it has to be a gang-rape straight out of an 80’s frat party in a Brett Eaton Ellis book — whose books, by the way, are meant to be warnings not blueprints.

Trump has weathered both the Nuts side of the technique and the Sluts side.  And as he has done so The Resistance has become more and more outraged that it’s not working like it used to.

This is why they have to pay people to be outraged by Kavanaugh’s nomination.  They can’t muster up a critical mass of outrage while Trump is winning on many fronts.  Like it or not, the economy has improved.  It’s still not good, but it’s better and sentiment is higher.

So they have to pay people to protest Kavanaugh. And when that didn’t work, then the fear of his ascending to the Supreme Court and jeopardizing Roe v. Wade became acute, it doesn’t surprise me to see them pull out Christine Blasie Ford’s story to guide them through to the mid-term elections.

And that was a bridge too far for a lot of people.

The one who finally had enough of ‘Nuts and Sluts’ was, of all people, Lindsey Graham.  Graham is one of the most vile and venal people in D.C.  He is a war-mongering neoconservative-enabling praetorian of Imperial Washington’s status quo.

But even he has a disgust circuit and Brett Kavanaugh’s spirited defense of himself, shaming Diane Feinstein in the process, was enough for Graham to finally redeem himself for one brief moment.

When Lindsey Graham is the best defense we have against becoming a country ruled by men rather than laws, our society hangs by a thread.

It was important for Graham to do this.  It was a wake-up call to the ‘moderate’ GOP senators wavering on Kavanaugh.  Graham may be bucking for Senate Majority Leader or Attorney General, but whatever.  For four minutes his disgust was palpable.

The two men finally did what the ‘Right’ in this country have been screaming for for years.

Fight back.  Stop being reasonable.  Stop playing it safe.  Trump cannot do this by himself.

Fight for what this country was supposed to stand for.

Because as Graham said, this is all about regaining power and they don’t care what damage they do to get it back.

The disgust circuit can kick in a number of different ways.  And Thursday it kicked in to finally call out what was actually happening on Capitol Hill.  This was The Swamp in all its glory.

And believe me millions were outraged by what they saw.

It will destroy what is left of the Democratic Party.  I told you back in June that Kanye West and Donald Trump had won the Battle of the Bulge in the Culture War.  Graham and Kavanuagh’s honest and brutal outrage at the unfairness of this process was snuffing out of that counter-attack.

The mid-terms will be a Red Tide with the bodies washing up on the shore the leadership of the DNC and the carpet-baggers standing behind them with billions in money to buy fake opposition.

The truth is easy to support.  Lies cost money. The more outrageous the lie the more expensive it gets to maintain it.

Because the majority of this country just became thoroughly disgusted with the Democrats.  And they will have no one to blame but themselves.

*  *  *

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US Retailers Warn Trade Wars Will Unleash “Unavoidable” Price Hikes Before Holidays

While it seems that trade disputes between the US, Mexico, and Canada are de-escalating, the trade conflict with China is not. President Trump ramped up the trade war on Monday as $200 billion in Chinese imports took effect. This is the third round of US tariffs on Chinese imports, a significant escalation of the conflict between the world’s two largest economies.

And caught in the middle of the crossfire are US retailers, who have spent a great deal of time on investor conference calls warning about imminent price hikes during the upcoming holiday season, which could send shock waves through the wallets of American consumers.

The chief executives from Walmart, Target, Gap Inc. and Best Buy, among others, have been some of the most vocal companies warning about “unavoidable” price hikes.

According to a letter from Robert Lighthizer, the US Trade Representative, tariffs on some $200 billion worth of Chinese imports took effect Monday. There are several hundred items on the list, including electronics, kitchenware, tools, and food. The taxes are set around 10 percent but will jump to 25 percent at the beginning of 2019.

The resulting margin compression will force retailers to either eat the cost of the tariffs or pass it along to consumers, right before the critical holiday season: “The new tariffs are bad news for the retail sector, especially as the latest round seems to extend the tax to a vast array of consumer goods,” GlobalData Retail Managing Director Neil Saunders said in comments emailed to Retail Dive.

“Many retailers will now be faced with a difficult choice of whether to pass the cost increases across to consumers or to take a hit on their margins. The exact response will vary from retailer to retailer but, both strategies are likely to be used.”

In a late cycle economic environment, tariffs are especially dangerous for retailers because it could exacerbate the effects of other rising costs, “including more spending on technology, elevated logistics costs, higher gas prices, and rising labor expenses. In short, additional tariffs are the last thing the retail sector wants,” according to Saunders.

The new duties are across a wide assortment of goods, from apparel to appliances, mainly covering consumer products. Retail Dive said some retailers are working with suppliers on how to respond to their impact, while others look to shift their manufacturing bases.

Reshifting supply chains takes time and are very costly. Some small and medium-sized companies could face financial hardship due to the disruptions.

“Of course, it’s also related to the ability of our vendors to observe the tariffs, and of course we are having negotiations, or over time, usually not in the short term but over time, to diversify the supply base,” Best Buy CEO Hubert Joly told investors last month, according to a conference call transcript. “So, it’s a complex undertaking.”

Before the holidays, low-margin consumer goods, price hikes are inevitable. “As we said many times, as a guest-focused retailer, we’re concerned about tariffs because they would increase prices on everyday products for American families,” Target CEO Brian Cornell said last month, according to a conference call transcript.

“In addition, a prolonged deterioration in global trade relationships could damage economic growth and vitality in the United States. Given these risks, we have been expressing our concerns to our leaders in Washington, both on our own and along with other retailers and trade association partners,” Cornell said.

Last week, Walmart sent a letter to the Office of the United States Trade Representative, warning that the trade war impact will soon lead to price hikes.

The result of $200 billion in new tariffs “will be to raise prices on consumers and tax American business and manufacturers,” Walmart said in the letter. “As the largest retailer in the United States and a major buyer of U.S. manufactured goods, we are very concerned about the impacts these tariffs would have on our business, our customers, our suppliers and the U.S. economy as a whole.”

In an interview last Thursday, Gap Inc. CEO Art Peck told Bloomberg’s Emily Chang, the company is watching the trade situation closely, but implications are not as great for Gap because apparel is not on the list. The company has spent years diversifying its manufacturing plants across many countries. But Peck said a jump in prices would eventually hit the consumer’s wallet as a result of President Trump’s trade wars.

So from now until the rest of the year, retailers will factor in about 10% tariffs. But when 2019 comes around, the tariffs are set to rise to 25%. “Should an agreement between China and the U.S. not be found before the New Year, retailers could well start 2019 on a gloomy note,” Saunders warned.

An all-out trade war between the US and China is emerging as the most plausible scenario for 2019 and beyond, a risk that could severely impact US retailers and the American consumer.

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Marty Feldstein Warns “Another Recession Looms…” And The Fed’s Out Of Ammo

Authored by Martin Feldstein, op-ed via The Wall Street Journal,

And unlike in the past, the Federal Reserve has little room to encourage growth by reducing rates…

Ten years after the Great Recession’s onset, another long, deep downturn may soon roil the U.S. economy. The high level of asset prices today mirrors the earlier trend in house prices that preceded the 2008 crash; both mispricings reflect long periods of very low real interest rates caused by Federal Reserve policy. Now that interest rates are rising, equity prices will fall, dragging down household wealth, consumer spending and economic activity.

During the five-year period before the last downturn, the Fed had decreased the federal-funds rate to as low as 1%. That drove down mortgage interest rates, causing home prices to rise faster than 10% a year. When the Fed raised rates after 2004, the housing-price bubble burst within two years.

As housing prices plummeted, homeowners with highly leveraged mortgages found themselves owing substantially more than their homes were worth. They defaulted in droves, causing lenders to foreclose on their properties. Sales of the foreclosed properties forced prices even lower, leading the national house-price index to decline 30% in three years.

Banks that held mortgages and mortgage-backed bonds saw their net worths decline sharply. A total of 140 U.S. banks failed in 2009, and those that survived were terrified by how much further the market might slide. To avoid risky bets, they shied away from lending to businesses and home buyers and refused to lend to other banks whose balance sheets were also declining.

The fall in home prices from 2006-09 cut household wealth by $6 trillion. Coinciding with a stock-market crash, the erased wealth caused consumer spending to drop sharply, pushing the economy into recession. The collapse of bank lending deepened the decline and slowed the recovery to a sluggish pace.

Fast forward to today.

Homes aren’t as overvalued as they were in 2006, so there’s little chance of an exact replay of the 2008 crisis. The principal risk now is that a stock-market slowdown could shrink consumer spending enough to push the economy into recession. Share prices are high today because long-term interest rates are extremely low. Today the interest rate on 10-year Treasury notes is less than 3%, meaning the inflation-adjusted yield on those bonds is close to zero. The hunt for higher yields drives investors toward equities—driving up share prices in the process.

But long-term rates are beginning to rise and are likely to increase substantially in the near future. Though the 3% yield on 10-year Treasurys is still low, it’s still twice as high as it was two years ago. It will be pushed higher as the Fed raises the short-term rate from today’s 2% to its projected 3.4% in 2020. Rising inflation will further increase the long-term interest rate as investors demand compensation for their loss of purchasing power. And as annual federal spending deficits explode over the coming decade, it will take ever-higher long-term interest rates to get bond buyers to absorb the debt. It wouldn’t be surprising to see the yield on 10-year Treasurys exceed 5%, with the resulting real yield rising from zero today to more than 2%.

As short- and long-term interest rates normalize, equity prices are also likely to return to historic price-to-earnings ratios. If the P/E ratio of the S&P 500 regresses to its historical average, 40% below today’s level, $10 trillion of household wealth would be wiped out. The past relationship between household wealth and consumer spending suggests such a decline would reduce annual spending by about $400 billion, shrinking gross domestic product by 2%. Add in the effects on business investment, and this spending crunch would push the economy into recession.

Most recessions are short and shallow, with an average of less than a year between the start of the downturn and the beginning of the recovery. That’s because the Fed usually responds to recessions by cutting the federal-funds rate substantially. But if one hits in the next few years, the Fed will not have enough room to cut rates, as the fed-funds rate is expected to rise to only 3% by 2020. There also won’t be much room for a major fiscal intervention. Federal deficits are expected to exceed $1 trillion annually in the coming years, and publicly held federal debt is predicted to rise from 75% of GDP to nearly 100% by the decade’s end.

This means a downturn brought on in the next few years by rising long-term interest rates would likely be deeper and longer than your average recession. Unfortunately, there’s nothing at this point that the Federal Reserve or any other government actor can do to prevent that from happening.

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America’s Costliest Stealth Fighter Crashes In South Carolina

“A 2nd Marine Aircraft Wing F-35B belonging to Marine Fighter Attack Training Squadron 501 (VMFAT-501) stationed at Marine Corps Air Station Beaufort crashed in the vicinity of Beaufort, South Carolina at approximately 11:45 a.m. (EST), today,” said a statement from the 2nd Marine Air Wing.

First photo to emerge near the crash site via local news affiliates. 

“The U.S. Marine pilot safely ejected from the single-seat aircraft and is currently being evaluated by medical personnel,” said the statement. “There were no civilian injuries. Marines from MCAS Beaufort are working with local authorities currently conducting standard mishap operations to secure the crash site and ensure the safety of all personnel in the surrounding area.”

The jet was reportedly on a training mission and appears to have gone down over a forested area, as early photos show black smoke rising over a tree line in a rural area. 

The Beaufort County Sheriff’s Office has closed off the area, and an investigation is underway. 

Previously the Beaufort County Sheriff’s Office confirmed that a Marine Corps aircraft had crashed in a rural part of Beaufort County. “The Marine Corps confirmed that it was one of theirs,” a sheriff’s office spokesman told ABC News.

F-35B joint strike fighter file photo

The Pentagon has long planned to make the joint strike fighter the main combat aircraft for the Air Force, Navy and Marine Corps; and the DoD previously announced plans to purchased more the 2,600.

The version of the F-35B that the Marine Corps uses has the ability to take off and land vertically, however, the Marine Corps said Friday’s crash did not occur while attempting either. 

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CBS Receives Subpoena Over Moonves Sexual Misconduct Allegations, “Culture Concerns”

The long arm of the #MeToo movement is knocking on CBS’ door.

In an 8-K filing released late on Friday, CBS announced that it has received subpoenas tied to its probe into reports of alleged sexual misconduct of former Chairman and CEO, Les Moonves, and concerns about the working environment at the company.

The company said that that as it had announced previously on August 1, it hired two law firms to investigate allegations about Moonves as well as into CBS News and “cultural issues at all levels of CBS. This investigation is ongoing.”

It also revealed that it had received subpoenas from the New York County District Attorney’s Office and the New York City Commission on Human Rights “regarding the subject matter of this investigation and related matters,” and that the New York Attorney General’s office has requested information as well.

In early September, CBS announced that former CEO Les Moonves was departing as part of a settlement with National Amusements, members of the Board of Directors of CBS and related parties, but the catalyst were allegations of sexual misconduct from six women, as reported by Ronan Farrow in the New Yorker.

Moonves and CBS would donate $20 million to one or more organizations that support the #MeToo movement and equality for women in the workplace. In retrospect, he may have wanted to throw in a million or two for the NY DA’s office.

The full 8-K filing is below:

 As announced on August 1, 2018, the Board of Directors of CBS Corporation (“CBS” or the “Company”) has retained two law firms to conduct a full investigation of the allegations in recent press reports about CBS’s former Chairman and Chief Executive Officer, CBS News and cultural issues at all levels of CBS. This investigation is ongoing.

The Company has received subpoenas from the New York County District Attorney’s Office and the New York City Commission on Human Rights regarding the subject matter of this investigation and related matters. The New York State Attorney General’s Office has also requested information about these matters. The Company may receive additional related regulatory and investigative inquiries from these and other entities in the future.

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1 In 4 Baltimore Hospital Admissions Are Babies Addicted To Opioids

With a bag of heroine now cheaper than a pack of cigarettes, America’s opioid epidemic shows no signs of slowing down.

However, even more worrying is this condition is now spreading to the youngest, as Axios reports, every 15 minutes, a baby is born addicted to opioids

As the following Axios report details, in Baltimore, doctors at Mt. Washington Pediatric Hospital say babies born with Neonatal Abstinence Syndrome – a set of conditions caused by withdrawal from exposure to drugs – now account for 25% of the hospital’s admissions.

Nationally, the number of babies born with the syndrome has increased by over 400 percent since 2004. For Baltimore Health Commissioner Dr. Leana Wen, the community must first recognize addiction as a disease to address the larger trend of the opioid epidemic.

But as drug-related deaths continue to increase, the future remains uncertain.

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Weekend Reading: Fiscal Irresponsibility

Authored by Lance Roberts via RealInvestmentAdvice.com,

Without much fanfare or public discussion, Congress has decided to push the U.S. into deeper fiscal responsibility. Earlier this week, the House passed another Continuing Resolution (CR) to keep the government from “shutting down” prior to the mid-term elections.

“The House on Wednesday passed an $854 billion spending bill to avert an October shutdown, funding large swaths of the government while pushing the funding deadline for others until Dec. 7.

The bill passed by 361-61, a week after the Senate passed an identical measure by a vote of 93-7.”

For almost a decade, Congress has failed to pass, and operate, underneath a budget. Of course, without any repercussions from voters in demanding that Congress “does their job,” the path to fiscal insolvency continues to grow.

The Committee For A Responsible Federal Budget made the following statement:

“We’re pleased policymakers have likely avoided a shutdown and actually appropriated most of this year’s discretionary budget on time. But let’s not forgot that Congress did so without a budget and had to grease the wheels with $153 billion to pass these bills. That isn’t function; it’s a fiscal free-for-all.”

Of course, with trillion-dollar deficits just around the corner, the negative impact from unbridled spending and debt increases will begin to reverse the positive effects from deregulation and tax reform.

The bigger problem with the $854 billion CR just passed by the House, and awaiting the President’s signature, is that it only covers spending from now until December. Such means that by the time we get the full 2019 budget funded, with the annual automatic increases still in place, we will be looking at more than $2 Trillion in annual spending. Such will require further increases in debt issuance at a time when there are potentially fewer buys of Treasuries readily available.

As shown in the chart below, with the major Central Banks reducing their balance sheets simultaneously, some of the more major buyers are being removed from the market.

“Central bank balance sheets have shrunk by over half-a-trillion dollars since March. This decrease in global liquidity – in the face of a global slowdown – raises the risk of policy mistakes much higher than is commonly assumed.” – ECRI

More importantly, next year, sequester-level budget caps will return. The last time budget-caps came into play Ben Bernanke launched QE-3 to offset the economic drag from reduced government spending. Given Central Banks are effectively “out of the game” for now, it is most likely Congress will just bust the budget and then spin it as a “Conservative victory” as they did this year.

As the Committee for a Responsible Federal Budget previously stated:

  • Debt Is Rising Unsustainably

  • Spending Is Growing Faster Than Revenue

  • Recent Legislation Will Substantially Worsen the Long-Term Outlook if Extended. 

  • High And Rising Debt Will Have Adverse and Potentially Dangerous Consequences (Will lead to another financial crisis.)

  • Major Trust Funds Are Headed Toward Insolvency. 

  • Fixing the Debt Will Get Harder the Longer Policymakers Wait. 

While the CRFB suggests that lawmakers need to work together to address this bleak fiscal picture now so problems do not compound any further, there is little hope that such will actually be the case given the deep partisanship currently running the country.

As I have stated before, choices will have to be made either by choice or force.

The CRFB agrees with my assessment.

“CBO continues to remind us what we’ve known for a while and seem to be ignoring: the federal budget is on an unsustainable course, particularly over the long term. If policymakers make the tough decisions now – rather than wait until there’s a crisis point for action – the solutions will be fairer and less painful.”

Just something to think about as you catch up on your weekend reading list.

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“There is only one side to the stock market, and it is not the bull side or the bear side, but the right side.” – Jesse Livermore

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Trade Tantrums & Trump Turmoil Spark Best Quarter For US Stocks In 5 Years

Summing the quarter up nicely…

The World Is Down In 2018…

STOCKS

US stocks are outperforming the world still in 2018 with China worst…

 

US equity markets close the quarter at their most-expensive in history…

 

Best quarter for US stocks in 5 years… (S&P is up 11 of the last 12 quarters)… Dow Transports (green) and Industrials (blue) were best in Q3, Small Caps (red) were worst…

World Stocks (Ex-US) eked out a modest 1.3% gain in Q3 – the first quarterly gain since 2017 – but Chinese stocks fel lfor the 4th quarter in a row…

 

European Stocks were very mixed in Q3 with France’s CAC outperforming and Italy’s FTSEMIB the worst (collapsing in the last few days as budget headlines struck)…

But in September, Italy was best – despite this week’s collapse – and DAX worst…

 

But September was much more mixed in the US…

But Nasdaq closed September red – breaking its 5 month win streak. Small Caps also closed red in Sept, the first down month since February. S&P, however, eked out gains in September for its 6th straight monthly gain in a row…

 

On the week, only Nasdaq closed green (notice the plunge midweek that was caught perfectly at unch)…

 

“Most Shorted” stocks ended lower in September (first monthly drop since Feb) but soared in Q3…

 

US Tech stocks outperformed financials for the 5th quarter in a row, soaring for 7 straight days (relative to financials) into month- and quarter-end…

 

Despite surging rates, banks were battered in September. Only Citi managed to hold on to any gains in September among the big banks with Wells Fargo down almost 10%…

 

FANG Stocks managed to cling to a gain on the quarter – the 7th quarterly gain in a row – and a small loss on the month, but barely…

Tesla stood out in the month and quarter…

Tesla is down 15% today…

 

US Stocks are in a world of their own…

BONDS

Thanks to a bloodbath in September, bonds ended the quarter notably higher in yield…

 

September saw the biggest 10Y bond yield spike since April…

 

The US yield curve flattened for the 7th month in a row (and 12th of the last 13)…

 

And flattened for the 17th quarter in the last 19…

 

On the week, all but 2Y ended the week lower – especially post-FOMC…

 

HY bonds outperformed IG bonds notably for the 4th month in a row (and 3rd quarter in a row)…

 

FX

The Dollar Index ended Q3 unchanged for all intents and purposes – having traded in a very narrow range basically controlled by the ECB spike in Q2 (narrowest since Q2 2014)…

 

Among the majors, Yen was weakest; cable, aussie, and loonie were strongest (marginally though), however, despite its weighting, it was yuan that warranted most attention… PBOC fixed the Yuan at its weakest since Aug 17th and offshore yuan sits right at critical support from its cycle lows…

 

Emerging Market FX fell for the second quarter in a row led by Argentine Peso, Turkish Lira, Indian Rupee, and Russian Ruble (Mexican Peso was best in Q3)…

Emerging Market FX in September was its best month since January, but was mixed under the surface with Argentine Peso worst (down over 10%) and Turkish Lira best (+7.5%)

Cryptos were mixed in Q3 with Bitcoin and Ripple managing gains and Ethereum crashing 45%…

 

Bitcoin is up on the quarter (first quarterly gain since Q4 2017) but down in September…

 

COMMODITIES

WTI dominated commodity-land in Q3 and silver was slammed (but there was some maniacal bid into the quarter-end)…

 

Gold fell for the second quarter in a row (biggest drop since Q4 2016 and first quarterly close below $1200 since Q4 2016)

 

Silver was ugly too – but bounced off its lowest levels since Jan 2009…back up near its 50DMA…

 

And as Gold and silver drop, specs have plunged to unprecedented positioning…

 

Oil headed for its longest string of quarterly gains in more than a decade as impending supply disruptions threaten to fracture a global market with little margin for error. The current front-month (Nov 18) contract is now up 5 quarters in a row…

 

On the month, Copper and Crude surged (China stimulus hopes?) and Silver spiked into the close to end green…

 

Gold/Silver was crushed on the last day on the month/quarter – the biggest daily drop since Nov 2017…

On the week, Silver and Crude were the best performers…

 

The real PhD in economics – Dr. Lumber – collapsed in Q3 – the biggest drop since 1993! (and September was its worst month since April 2011)

 

Finally, US ‘hard’ economic data fell for the 3rd straight quarter – but stocks don’t care…

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Kavanaugh Nomination Hits Snag After Republicans Agree To FBI Probe

Brett Kavanaugh’s nomination has been stalled on the Senate floor after GOP leadership agreed Friday afternoon to an FBI investigation into allegations of sexual harassment against the Supreme Court nominee. Earlier in the day, the Judiciary Committee approved Kavinaugh’s advancement by a vote of 11-10 along party line. 

Immediately before the Committee voted, GOP Senator Jeff Flake of Arizona – who is not running for reelection – attempted to push for a delay pending an FBI investigation, however he was unsuccessful after Chairman Grassley rushed the vote. 

Flake then vowed to vote no on the full floor decision, and was joined by GOP Senator Lisa Murkowski of Alaska, just one day after Dianne Feinstein cornered her in a hallway for an apparent “talking to.” 

While walking into Senate Majority Leader Mitch McConnell’s office, Sen. Lisa Murkowski of Alaska, a key vote, said “yes,” when asked if she supports Sen. Jeff Flake’s proposal for a delay.

CNN asked: And do you think it should be limited to Ford’s accusations or should it include an investigation into other allegations?

Murkowski responded: “I support the FBI having an opportunity to bring some closure to this.” –CNN

With a slim majority in the Senate of 51-49, the GOP would have been unable to push ahead with a Kavanaugh vote without at least Flake or Murkowski’s support, as Vice President Mike Pence could break a tie in a deadlock. 

The move by Flake, a frequent Trump critic who is retiring from the Senate after this year, was cheered by several Democrats, including Sen. Chris Coons (Del.), a fellow member of the Judiciary Committee.

“He and I dont share a lot of political views but we share a deep concern for the health of this institution and what it means to the rest of the world and the country,” said Coons, who huddled with Flake before he announced his position. –WaPo

When asked Friday afternoon what he thought about the delay, President Trump said “I’m going to let the Senate handle that,” insisting that he would not get involved in pressuring the dissenting GOP senators to vote either way. 

Developing…  

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Small Caps Fail To Break Out

Authored by Steven Vanelli via Knowledge Leaders Capital blog,

Among the major groups of stocks around the world that we follow, US small-cap stocks have been the best performer over the last decade as the USD experienced a strong bull market. US small caps have outperformed our mid/large group of developed companies by almost 40% over the last 10 years.

The relative performance has been highly correlated to the movement of the USD. US small caps made an intermediate high in April 2015 after the USD soared from about 80 to 100. They then tested this high in December 2016 as the USD once again reached new highs. Recently, as the USD was on the rise once again, small caps again tested their decade-long relative highs.

However, over the last few weeks, as the USD slowly rolled over, small caps are down about 3.5%.

When I tune the time-frame in to just this year’s, the relationship with the USD is even more clear. With an 83% correlation, roughly two-thirds of the performance of small caps this year can be attributed to the rise in the USD.

An interesting picture emerges when I compare US small caps to US mid/large cap stocks. All of the relative performance lead that US small caps have on mid/large caps was achieved from November 2008 through April 2011. For the most part, small caps have traded in a 15% band around mid/large caps for seven years. Small caps have actually been underperforming mid/large cap stocks for four years now, tracing out a sequence of lower highs (April 2015, December 2016 and July 2018).

Small caps have underperformed mid/large caps by about 5% since making a relative high June 21, 2018. There is support nearby, but if small caps underperform US mid/large caps by another 5%, then the technical picture could change for the worse.

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