Category: zerohedge

With stocks erasing their early-day losses and the VIX tumbling once again, CNBC – the go-to resource for retirees and other retail investors – was back to reassuring investors that this month’s explosion of volatility was just another dip deserving to be bought.

But Embark Capital CIO Peter Toogood offered an important counterpoint during an appearance this morning where he warned his audience against exactly this kind of credulousness by ignoring the fundamental growth global growth story that seemingly every other portfolio manager has been relying on and instead pointing to one simple fact: “Everybody is already invested”.

But even with positioning stretched to such an exaggerated degree, that doesn’t necessarily mean a crash is right around the corner. Instead, Toogood foresees a “step bear market” that will continue until the PPT, newly reconstituted under the leadership of Jerome Powell, realizes that they must once again intervene…because with so much systemic debt and myriad other risks – like the dangerously underfunded pensions that we’ve highlighted  again and again – a sustained selloff would be far too risky to countenance.

“I noticed Dudley the other day say ‘this is small potatoes’ and warning investors not to worry about it. And I would accept that’s all true, if everybody wasn’t already invested. And I want to know who the marginal buyer of this story is. Everyone is in. Look at consumer sentiment surveys, loo at professional money managers, everyone is in. So who’s the buyer? It’s very 2007-2008.”

He added that hedge fund managers are now “sitting around scratching their heads” because even European high yield bonds – the debt of some of the worst companies on Earth – are yielding a staggeringly low 2%.

Toogood also pointed out that stocks are breaking through important technical levels…

“You’re breaking some very major levels in most markets outside of the US still, and that is very, very significant. That is the test of where you’d think a bear market is coming; I still do, just on valuation alone. I think this market is nuts,” Toogood said.

Which is leaving asset managers in a bind…

“It’s one of those extremely unpleasant moments when people need income but income is expensive and that’s the other problem we see … We are forced into high yield (bonds) and we don’t want to be there,” Toogood said.’

Indeed, just on valuations alone, “I think this market’s nuts,” Toogood said.

via Zero Hedge http://ift.tt/2EH25gS Tyler Durden

Authored by Byron York, op-ed via The Washington Examiner,

If there is an obstruction of justice case to be made against the president in the Trump-Russia affair, James Comey is in the middle of it.

President Trump’s decision to fire the FBI director is often cited as Exhibit A for obstruction, and the foundation for that case is a set of seven memos Comey wrote describing conversations he had with the president between Jan. 6 and April 11, 2017.

The memos are critically important. Portions of them have been leaked to the press, given to a Comey friend, discussed in congressional testimony, and read by a few Capitol Hill lawmakers and staff. Sometimes it seems the only people who have never had a chance to see the Comey memos are the millions of Americans who are trying to make sense of the daily firehose of Trump-Russia news.

They’re not likely to see the memos anytime soon. The FBI and the office of Trump-Russia special counsel Robert Mueller have imposed tight restrictions on access to the memos, holding them even more closely than some documents that are classified at a far higher level. Now, with speculation about obstruction ever present in the media, some lawmakers are calling for the memos to be released. It’s time for Americans to know what’s going on, they say.

The public part of the memo story began on May 16, 2017, when the New York Times published a story headlined, “Comey Memo Says Trump Asked Him to End Flynn Investigation.” The paper reported that a Comey-penned memo detailing a Trump-Comey conversation the day after the firing of national security adviser Michael Flynn was “part of a paper trail Mr. Comey created documenting what he perceived as the president’s improper efforts to influence a continuing investigation.”

“An FBI agent’s contemporaneous notes are widely held up in court as credible evidence of conversations,” the Times added.

Members of Congress investigating the Trump-Russia affair, both House and Senate, Democrat and Republican, clamored to see the Comey memos. In a letter dated May 17, 2017 — the day after the Times report — Senate Judiciary Committee Chairman Chuck Grassley, R-Iowa, and committee member Sen. Lindsey Graham, R-S.C., joined ranking Democrats Sens. Dianne Feinstein of California and Sheldon Whitehouse of Rhode Island to ask the FBI to “produce all such memos, if they exist.”

Other committees made similar requests. As has been the case throughout the investigation, the FBI was not immediately forthcoming. When Comey made a hugely anticipated, post-firing appearance before the Senate Intelligence Committee on June 8, 2017, senators still had not seen the memos. They were forced to ask Comey questions not knowing what he had already written down.

Some lawmakers felt particularly aggrieved at the FBI’s refusal to turn over the memos when they learned that Comey had given some of the documents to a friend, Columbia University law professor Daniel Richman, for the specific purpose of being leaked to the New York Times, with the ultimate hope that exposure would spur the appointment of a special prosecutor in the Trump-Russia case.

“I asked a friend of mine to share the content of the memo with a reporter,” Comey told the Senate last June. “Didn’t do it myself, for a variety of reasons. But I asked him to, because I thought that might prompt the appointment of a special counsel. And so I asked a close friend of mine to do it.”

Within hours of Comey’s testimony, the bipartisan group on the Senate Judiciary Committee fired off a letter to Richman asking for the memos Comey sent him. Richman said no. He wouldn’t even say if he still had any of the memos. A few months later, the committee asked Richman to come in for an interview. He refused. Later, he claimed to be one of Comey’s attorneys.

Finally, in July 2017, the FBI allowed lawmakers to see the memos. But the bureau made sure the information in the memo was severely restricted.

For the Senate Judiciary Committee, which directly oversees the FBI, the bureau allowed only two committee staffers to see the memos. They had to go to the FBI, and an FBI minder was in the room at all times. They were not allowed to make copies or take notes. The FBI later took the memos to the Senate to allow Grassley to read them. But the same rules applied: FBI minder, no copies, no notes.

The no-notes restriction was unusual, because committee staff had been allowed to take notes from the Trump-Russia Foreign Intelligence Surveillance Act, or FISA, applications, which were highly classified. Some of the Comey memos were not classified at all.

And, of course, both Republicans and Democrats on the Judiciary Committee had asked to be given the memos, not be given a chance to read them. That still hasn’t happened. “The chairman and ranking member asked for copies of the memos,” said a committee spokesperson Wednesday. “The FBI has yet to actually turn over those documents to the congressional committee tasked with overseeing the bureau and the Justice Department.”

On the House side, Republican Rep. Trey Gowdy, R-S.C., among a few others, was allowed to read the memos under the same conditions: FBI minder, no copies, no notes.

What struck Gowdy was the general absence of classified information in the memos or any other reason they should remain secret. Out of a total of seven memos, the FBI had marked four as classified at the “secret” or “confidential” levels — not the highest level — but even with those memos, it appeared to Gowdy that they could be released publicly with only minimal blacking-out.

“What would need to be redacted would be incredibly small and really would not interfere with the substance of the memos,” Gowdy told me in a phone conversation Wednesday. “I read them a long time ago, and I still don’t know why they’re not in the public domain. If they were really helpful for the Democrats, they would have been leaked a long time ago.”

Rep. Devin Nunes, R-Calif., chairman of the House Intelligence Committee, has the same view. “Seeing as Comey already admitted leaking information from his memos to the press, I do think the memos should be released publicly,” he said in a statement Wednesday.

So why the secrecy? Especially since the presence of what little classified material there is in the memos doesn’t seem to present a problem.

A Justice Department spokesman did not answer an inquiry, but the FBI and Mueller have taken the position that secrecy is necessary because the Trump-Russia probe is an ongoing investigation. Mueller received support two weeks ago when a federal court in Washington denied a Freedom of Information Act request by news organizations to make the memos public. After repeated presentations from Mueller’s office, Judge James Boasberg wrote, “the Court is now fully convinced that disclosure ‘could reasonably be expected to interfere’ with that ongoing investigation.”

Boasberg wrote a detailed analysis of the legal arguments in the case. But with Capitol Hill involved, there is always a political side, too. And politically, there are at least five reasons why the memos should not remain secret.

First is the public’s right to know, which is strong in a matter of this importance.

Second is the fact that there is not going to be an obstruction of justice trial for Trump; if there is any action against him, it will be the political process of impeachment, beginning in the House of Representatives, and the memos could play a key role.

Third, Comey himself has already leaked portions of the memos.

Fourth, Comey has already testified publicly about some of the same topics covered by the memos.

And fifth, the FBI has already conceded the principle that Congress has a right to see the memos.

Mueller and the FBI remain unconvinced. That could be a matter of principle, or it could be that keeping the Comey memos secret protects Comey’s — the star witness’s — credibility. It’s hard for anyone in public to test the memos’, and Comey’s, credibility while the documents remain hidden.

And then there is the public impression the memos might make. No one knows whether that would help or hurt Mueller’s case. Comey told the Senate that he found some of Trump’s statements “very disturbing” and “very concerning.” But did he write in the memos that he felt pressured or pushed or that Trump was making an effort to obstruct the investigation? The answer is not clear. If there were an impeachment trial for Trump, it’s uncertain whether the memos would prove more valuable to the prosecution or to the defense.

“I have read the memos,” Gowdy said on Fox News “Special Report” Monday. “They would be defense Exhibit A in an obstruction of justice case — not prosecution exhibit, defense Exhibit A. If Comey felt obstructed, he did a masterful job of keeping it out of the memos.”

Meanwhile, Congress is still trying to learn more about the documents. Last month, Grassley sent the Justice Department another letter trying to figure out who at the Justice Department had handled the memos. Judging by the committee’s record, the chairman will keep at it until the public gets a chance to learn the whole story.

via Zero Hedge http://ift.tt/2EFYPSX Tyler Durden

Treasury Secretary Steve Mnuchin called on Congress Thursday to address issues related to gun violence less than 24 hours after 17 people were murdered in a Florida school shooting.

“I will say, personally, I think the gun violence its a tragedy what weve seen yesterday, and I urge Congress to look at these issues,” said Mnuchin, while addressing a question from Rep. John Lewis (D-GA) during a House Ways and Means Committee hearing about whether Trump’s new budget addressed gun violence.

While Mnuchin first stumbled through his response, “Um, I, I don’t, I’m not aware of that level of detail in the budget for me to be the expert to attest on that,” he then shifted into his personal views on the matter when he asked Congress to look into the issue of gun violence.

A spokesman for the Treasury, Tony Sayegh, told Politico that Mnuchin’s testimony was taken out of context:

Instead, according to a Treasury official, Mnuchin was referring to whether there was money in the federal budget to examine the proliferation of mass shootings in the United States, not whether Congress should consider new gun control laws.

Secretary Mnuchin was directly addressing Congressman [John] Lewis question about availability of funds in the budget to address the issue of gun violence. He also reflected the feelings shared by all Americans that yesterdays school shooting was a profound tragedy, said Treasury spokesman Tony Sayegh.

While Mnuchin is notably the first senior official in the Trump administration to suggest Congress look into “these issues,” one should note that the former Goldman alum turned Hollywood financier may be one of the more liberal members of Trump’s cabinet – having contributed heavily to Democrats prior to the 2016 election, including the campaigns of Hillary Clinton, Al Gore, John Kerry and Barack Obama.

Mnuchin also worked for SFM Capital, a firm backed by billionaire George Soros – who is known for bankrolling liberal causes such as gun control. Mnuchin told Bloomberg News that his Democratic donations were mostly done as favors to Democrat friends. 

Whatever the case, it appears that Mnuchin may catch a little flack from both sides on this one. 

The Washington Post said Steve Mnuchin came out for gun control this morning. His office’s response was just basically, “nahhhhh…” https://t.co/rTM7Z2FGjg pic.twitter.com/8vClBsA1xo

Christian Datoc (@TocRadio) February 15, 2018

 

 

 

via Zero Hedge http://ift.tt/2svXV6t Tyler Durden

Special Counsel Robert Mueller and his staff must’ve broken a record for the fastest-ever leak of “closed-door” Congressional testimony because NBC News – one of the team’s go-to leak receptacles – has already published details gleaned from parts of Bannon’s multiday meeting with the Mueller team this week, which only wrapped up this morning.

Given that Bannon has burned his bridges with the Republican party establishment AND the party’s pro-Trump wing, Mike Conway, the Republican leading the House investigation after Devin Nunes’ recused himself last year over allegations he went over his colleagues’ heads and shared information with the White House before giving it to them.

Steve Bannon, who served as President Trump’s chief strategist, was interviewed by special counsel Robert Mueller over multiple days this week, NBC News has learned from two sources familiar with the proceedings.

Bannon spent a total of some 20 hours in conversations with the team led by Mueller, who is investigating possible collusion between the Trump campaign and Russia as well as other issues that have arisen around the probe.

Bannon left his job as a senior White House adviser in August and returned to a leadership role at Brietbart, the right-wing news site based out of Washington. But he fell out of favor with the site’s financial backers, the Mercer family, after criticizing the president and his family in “Fire and Fury,” a book about the Trump administration published earlier this year by author Michael Wolff.

Bannon has reportedly been asked by the White House not to share details about his time in the West Wing, and to invoke executive privilege – an ask with which he has complied as he insists that he still thinks the president is a “great man” who has his full support.

And after reportedly sitting through 20 hours of testimony this week, the questions apparently touched on some of these sensitive issues, because, according to Schiff, Bannon refused to answer all but 25 questions (although Conway said Bannon answered at least 25 questions).

The former White House chief strategist was also booted out of Breitbart, where he was the executive chairman, after Michael Wolff’s “Fire and Fury” book quoted him as saying he would have support from the Mercer family to run against Trump in 2020.

Meanwhile, Intel Committee ranking member Adam Schiff claimed the committee’s investigation showed “ample evidence” of collusion…

“There is already, in my view, ample evidence in the public domain on the issue of collusion if you’re willing to see it,” Schiff told reporters.

“If you want to blind yourself, then you can look the other way.”

If what Schiff says about the evidence is true, maybe he could point out the specifics to us.

via Zero Hedge http://ift.tt/2syPgAg Tyler Durden

Authored by Mike Krieger via Liberty Blitzkrieg blog,

Oligarchs, though they speak of deconstructing the administrative state, actually increase deficits and the size and power of law enforcement and the military to protect their global business interests and ensure domestic social control. The parts of the state that serve the common good wither in the name of deregulation and austerity. The parts that promote the oligarchs’ power expand in the name of national security, economic growth and law and order.

– Chris Hedges, The Deadly Rule of the Oligarchs

If you’ve been checking in with this site in recent days, you may have wondered if I was on vacation. I’m not. Rather, I’ve been suffering from a bit of sluggishness and writers block, and it wasn’t until I took some time to think about why earlier this morning that I was able to determine the cause of my affliction. The best way to describe what I’ve been dealing with in recent days is insanity fatigue.

It’s not as if there’s been a lack of news or things to talk about. There’s plenty. The problem is I’ve once again become exhausted and overwhelmed by the superficial stupidity and narcissism of our national political dialogue. I first expressed this sentiment about a year ago in the piece, Lost in the Political Wilderness, and the feeling came back in spades in recent days.

It’s been a year since I wrote that post and not much has changed. The political conversation, if you can call it that, remains largely polarized between two groups primarily focused on whether they support Trump or swear he’s Putin’s devilish puppet. One side insists he’s going to Make America Great Again, while the other thinks everything was perfectly fine before his election, and all will be well as long as we can rid ourselves of his presence. Meanwhile, the oligarch class continues to loot and pillage at will.

It’s actually quite extraordinary that a people so systemically and obviously preyed upon cannot see what’s right in front of them. It’s mind-boggling that tens of millions are so easily divided and conquered into manufactured tribes intent on avoiding at all costs what’s really going on in this country, such as a fraudulent financial system, endless imperial wars and the ever encroaching surveillance state. Long story short, we as a people simply refuse to accept what’s really causing the rot in this country and continue to be mesmerized by bread, circuses and opportunistic pundits leading us straight into oblivion.

I suppose this is always the way it is at the end of a failing and bankrupt empire, it’s just extraordinary to watch it happen in real time.

The total insanity of the political debate in the U.S., and a lack of any willingness to admit our real systemic problems — let alone face them — is what convinces me without a doubt that this train is headed straight into a brick wall.

That’s not to say other countries are in fine shape, they aren’t. The whole planet’s become entangled in America’s increasingly corrupt, militaristic and fraudulent imperial financial system. Escape will not be clean or easy for anybody. Nevertheless, the U.S. has the furtherest to fall given it is the world’s dominant power armed with the global reserve currency. An empire with such an overwhelming structural advantage can last a lot longer than it should in the face of monumental incompetence, but the day of reckoning is coming.

Meanwhile, Trump isn’t addressing any of the major structural issues we face like our fraudulent and corrupt financial system, endless and pointless imperial wars or the ever-expanding surveillance panopticon managed and controlled by the unelected “deep state.” Sure, he talks a good game sometimes, but the core elements of the U.S. empire continue to expand in power and hubris with virtually zero resistance. Hillary Clinton would’ve done much the same while deflecting criticism as “sexist.” If the general public refuses to confront our real issues,the politicians and bureaucrats sure as heck aren’t going to. As such, it appears imperial implosion is inevitable at this point.

Chris Hedges recently wrote a piece on oligarchy at TruthDig and the role it plays in imperial collapse. The excerpt below was particularly poignant.

Oligarchs accelerate social, political, cultural and economic collapse. The unchecked plunder leads to systems breakdown. The refusal to protect natural resources, or the economic engines that sustain the state, means that poverty becomes the norm and the natural world becomes a toxic wasteland. Basic institutions no longer work. Infrastructure is no longer reliable. Water, air and soil are poisoned. The population is left uneducated, untrained, impoverished, oppressed by organs of internal security and beset by despair. The state eventually goes bankrupt. Oligarchs respond to this steady deterioration by forcing workers to do more for less and launching self-destructive wars in the vain attempt to restore a lost golden age. They also insist, no matter how bad it gets, on maintaining their opulent and hedonistic lifestyles. They further tax the resources of the state, the ecosystem and the population with suicidal demands. They flee from the looming chaos into their gated compounds, modern versions of Versailles or the Forbidden City. They lose touch with reality. In the end, they are overthrown or destroy the state itself. There is no institution left in America that can be called democratic, and thus there is no internal mechanism to prevent a descent into barbarity.

This is where we stand now.

The system is breaking down in a very serious and dangerous manner as a result of decades of unaccountable oligarch plunder.

A historic theft aided and abetted by politicians, intelligence agencies and corporate media, which provide the necessary backbone to keep oligarchy entrenched and the public confused and bickering about endless superficialities.

If a thoughtful public backlash based on incisive analysis and energy capable of reforming this imperial oligarchy was coming, it would have arrived by now. It’s not coming, thus, imperial collapse is all but guaranteed.

My guess is it’ll probably all be over by 2025 at the latest.

Although it may appear that way, my message isn’t one of doom and gloom. After all, it’s clear to me that the U.S. empire isn’t helping the typical American anyway. Rather, our system of predatory imperial oligarch is more akin to a parasitic albatross around our collective necks, sucking away our spirit, wealth and liberty to enrich and empower a handful of empty and voraciously greedy sociopaths.

I don’t claim that the transition period will be smooth or painless, but I do harbor a great deal of optimism about what the future can and will look like on the other side. Younger generations understand as much as anyone how corrupt, fraudulent and unsustainable this system and its institutions are. Meanwhile, thoughtful and brilliant people globally are working day and night to create the necessary rails for a decentralized future in which we can reduce the need to trust institutions and individuals, hopefully ushering in a new paradigm characterized by greater transparency, ethics, liberty and an opportunity for a vastly improved experience for humankind.

The current paradigm will end, I’m completely confident of that. The real question is what will we build afterwards. On that front, I remain encouraged and excited, but we must all do our part to create the world we wish to see.

It’s imperative we spread love and knowledge. That we demonstrate through our actions and work what it means to be a courageous, ethical, and honorable human being, brimming with infinite spirit and consciousness. If we accept these challenges, we shall not only overcome, but we shall prosper, leaving our children and grandchildren a world they can be proud of. Nothing is more important and meaningful than that.

*  *  *

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via Zero Hedge http://ift.tt/2EG4HLV Tyler Durden

After being ordered without bond during his first court appearance after murdering 17 of his former classmates and wounding nearly two dozen others, school shooter Nikolas Cruz has been linked by the Anti-Defamation League to a White Supremacist group called the Republic of Florida.

Meanwhile, Cruz made his first court appearance, shackled and “cowering in fear” as the Daily Mail described it. He was wearing an orange jumpsuit and both his hands and ankles were bound.

The ADL said ROF leader Jordan Jereb told them Cruz was associated with his group. Jereb, who is based in Tallahassee, said Cruz was brought into the group by another member and had participated in one or more ROF training exercises in the Tallahassee area, the ADL said.

Law enforcement officials haven’t confirmed the connection, Jereb did publicly disavowed Cruz and his actions, but confirmed that Cruz did train with his militia, according to the New York Post.

The eader of the group told ABC News he has not spoken to Cruz in “some time” but said “he knew he would getting this call.” He would not comment further but emphasized that his group was not a terrorist organization.

Cruz, a 19-year-old orphan with a troubled past, a fascination with weapons and resistance groups, and an AR-15 rifle, was charged with 17 counts of premeditated murder Thursday morning after being questioned for hours by state and federal authorities following the deadliest school shooting in the US in five years.

Cruz’s unsuspecting former classmates thought they were having another drill Wednesday afternoon when a fire alarm sounded, requiring them to file out of their classrooms. That’s when Cruz, equipped with a gas mask, smoke grenades and multiple magazines of ammunition, opened fire with a semi-automatic weapon, killing 17 people and sending hundreds of students fleeing into the streets. Cruz was able to leave the scene and blend in, but was apprehended about an hour after he stopped firing.

The ROF has mostly young members in north and south Florida and calls itself a “white civil rights organization fighting for white identitarian politics” while seeking to build a “white ethnostate” in Florida.

Three former schoolmates of Cruz told ABC News that Cruz was part of the group. They claimed he marched with the group frequently and was often seen with Jereb, who also confirmed to ABC News that Cruz was, at least at one point, part of that group.

In an interview with ABC News’ George Stephanopoulos, an attorney for the family that had taken Cruz in for the past few months said Cruz was “depressed” following his mother’s death but he had been going to therapy.

The family is still “shocked,” he said, that Cruz would allegedly engage in mass violence.

“They indicated they saw nothing like this coming,” Lewis said. “They never saw any anger, no bad feelings about the school.”

A family that had taken Cruz in after the November death of his mother was aware he owned a legally purchased AR-15 within the past year from a federally licensed dealer, but they said it was locked in a safe.

“He brought it into the home and it was in a locked gun safe,” the lawyer said. “That was the condition when he came into their home that the gun was locked away.”

Cruz had a history of mental illness and violent threats that had led to him getting in trouble repeatedly at school. One student who participated in Junior ROTC with Cruz described him as a “psycho.” Cruz was a well-known weapons enthusiast, the student said, who once tried to sell knives to a classmate.

Cruz even reportedly threatened to shoot up the school…

“About a year ago I saw him upset in the morning,” student Brent Black told ABC News.

“And I was like, ‘yo what’s wrong with you?’

And he was like ‘umm, don’t know.’

And I was like ‘what’s up with you?’

He’s like ‘I swear to God I’ll shoot up this school.’

And then I was like ‘watch what you’re saying around me,’ and then I just left him after that.

He came up to me later on the day and apologized for what he said.”

But despite these threats, no action was taken other than to bar him from campus and to instruct teachers not to let him near campus with a backpack. Broward County Sheriff also said “disturbing” content was found on Cruz’s social media accounts. The photos released so far depict Cruz with an arsenal of weapons – a common sign among school shooters. the Columbine shooters also took photos of them posing with weapons. 

In a shocking admission, an FBI official also said Thursday that they were warned – not once, but twice – about the shooter. One of the warnings came in September, from a bail bondsman in Mississippi who alerted the feds about an alarming online message Cruz wrote saying he was ‘going to be a professional school shooter’.

Ben Bennight, a Youtube commentator, said he alerted the FBI to a comment shared by Cruz on one of his YouTube videos back in September. He says the FBI was quick to respond to the concerning statement, arriving at his office the very next day to find out if he knew anything about Cruz, but the bureau was ultimately unable to ascertain his identity.

Even the president lamented the lack of action despite so many “disturbing signs”…

 

So many signs that the Florida shooter was mentally disturbed, even expelled from school for bad and erratic behavior. Neighbors and classmates knew he was a big problem. Must always report such instances to authorities, again and again!

— Donald J. Trump (@realDonaldTrump) February 15, 2018

 

Police say they’re “already dissecting” his social media posts.

“We have already begun to dissect his websites and things on social media that he was on, and some of the things that have come to mind are very, very disturbing,” Israel said.

A cowering Cruz was decided to be held without bail during his first court appearance on Thursday, where he was officially charged with 17 counts of premeditated murder.

The 19-year-old who killed 17 and injured more than a dozen in a shooting at Marjory Stoneman Douglas High School in Parkland, Florida on Wednesday did not speak in court today, other than to confirm his name with a polite ‘yes ma’am’ to the judge. Mostly, he he kept his gaze to the ground.

He wore an orange jumpsuit, and had both his hands and ankles shackled. As he took the podium to speak to the judge over livestream video from the Broward County jail, a handful of sheriff’s deputies and prison officials gathered around, as the Daily Mail reported.

A female attorney representing Cruz rested a reassuring hand on his shoulder while the charges were read.

A Broward County official said Cruz has been on suicide watch since being taken into custody because he has threatened to kill himself.

He was initially taken to the hospital for “labored breathing”…police then spent most of the night questioning Cruz about his motives and the possible role of anybody else.

The shooting was the 30th mass shooting in the US this year, and both Connecticut senators Chris Murphy and Richard Blumenthal released videos of them making strident calls for gun control.

Florida Gov. Rick Scott speaks to reporters at a Thursday morning press conference about the shooter, accompanied by Broward County Sheriff Scott Israel and Parkland School Superintendent Robert Runcie.

In another admission that calls into question how, exactly, Cruz managed to legally buy an assault rifle,  Broward County Mayor Beam Furr also revealed that Cruz had been getting treatment at a mental health clinic for a while, but hadn’t been back to the clinic in more than a year.

“It wasn’t like there wasn’t concern for him,” Furr told CNN. “We try to keep our eyes out on those kids who aren’t connected. … In this case we didn’t find a way to connect with this kid.”

President Trump addressed the nation this morning after the shooting, which was the eighth largest mass shooting in US history.

Cruz had been suspended from the school from fighting his ex girlfriend’s new boyfriend and was depressed and having girl problems at the time of the shooting.

Trump ordered all flags to fly at half-mast Thursday…

* * *

Meanwhile, the Mail has published a detailed list of all the alleged “warning signs” about Cruz and his intentions that were simply missed or ignored…

1. ‘I’m going to be a professional school shooter’

Nikolas Cruz left a comment on a YouTube video back in September using his own name that simply read: ‘I’m going to be a professional school shooter’

2. FBI was warned about the comment but couldn’t identify him

Vlogger Ben Bennight alerted the FBI to the comment shared by Cruz. The FBI was quick to respond, arriving at his office the next day but only after Bennight called a local field agent, revealing his initial attempts to send in a screengrab of the comment failed when the email address he found listed on the agency’s website came back with a domain error saying it did not exist. The FBI was unable to identify the person who posted the comment.

3. Bought an AR-15 age 18

After Cruz’s mother died, he eventually moved in the the family of a former classmate, where he brought his AR-15 which was kept in a locked cabinet that he had the key to. He was able to purchase the rifle in the past year and passed a required background check. Federal law allowed people 18 and over to legally purchase long guns. At 21, people can legally buy handguns from a license dealer

4. Troubling Instagram page

Cruz’s Instagram page is filled with disturbing posts of what appears to be himself showing off with weapons with his face covered, asking for advice on buying firearms, and making racist comments about Muslims.

5. Was a member of a white nationalist group and came to training exercises

Jordan Jereb claims that Cruz was a member of the Republic of Florida, which aims to make Florida its own white-entho state. Jereb claimed Cruz, who was adopted, was brought up in the organization by another member and he reportedly carpooled to at least two training exercises held by the group.

6. Boasted about hurting animals

Students who say they knew Cruz claimed he liked to kill animals.

‘He was crazy because he liked to kill small things, like little animals – frogs and other animals like that and he just had a crazy mind,’ one told 10ABC news.

Another classmate claims he would tell him he shot rats with a BB gun.

7. Took knives and bullets to school

Former classmate Joshua Charo, 16, said all he ‘would talk about is guns, knives and hunting’.

Another student said he started selling knives out of a lunchbox when he started high school.

8. Was banned from carrying a backpack

Jim Gard, a math teacher, who had Cruz in his class last year, said he believes the school sent out an email warning teachers he shouldn’t be allowed on campus with a backpack.

‘There were problems with him last year threatening students and I guess he was asked to leave campus’.

9. Expelled for fighting

The deeply troubled ‘loner’ was expelled last year for ‘fighting over his ex-girlfriend’ with her new boyfriend.

10. Abusive to his ex-girlfriend

Students claim the gunman was abusive to his girlfriend

11. Stalked another girl

Mr Gard also claimed that he was taken with another student ‘to the point of stalking her’, while another student who claims to have been friends with Cruz said he had to cut him off because he started ‘going after’ and ‘threatening’ a female friend of his.

12. Peeping Tom

Neighbor Christine Rosburgh said she, and all the other neighbors, were terrified of the teen who would bang his head against a cement wall if his legal guardians tried to send him to school.

She also claims she caught him peeking in her window and when she confronted him, he said he was looking for golf balls.

‘I said, “This isn’t the golf course”.

13. Stopped his mental health treatment

Cruz had been getting treatment at a mental health clinic, but stopped about a year ago and dropped off the radar. He was showing signs of depression.

Broward County Mayor Beam Furr said: ‘It wasn’t like there wasn’t concern for him. We try to keep out eyes out on those kids who aren’t connected… In this case, we didn’t find a way to connect with this kid.’

14. Possible fetal alcohol syndrome

Natalie Brassard, a program director at the non-profit FASCETS, which works with FASD children, said some of Cruz’s characteristics ‘suggest that he might have been living with an invisible brain-based condition – it could have been FASD or many others.’

Conditions of FASD can range from mild to severe but can include learning disabilities, intellectual disability or low IQ, poor reasoning and judgment and a host of other issues.

15. Orphaned

Cruz’s adoptive mother, Lynda Cruz, 68, died of pneumonia in November last year. She was one of the only people that was remotely close to Cruz. His adoptive father Roger Cruz died of a heart attack several years ago.

After his mother died, he and his brother were left in the care of family friend Barbara Kumbatovich, of Long Island, New York, but unhappy there, he moved in with a former classmate in a mobile home park in northwest Broward.

via Zero Hedge http://ift.tt/2HleuWg Tyler Durden

Recent concerns about a liquidation by China of its US Treasury holdings appear to have been greatly exaggerated because according to the latest TIC data released at 4pm on Thursday, in December, China not only added $8.3 Billion to its holdings, bringing the total to $1184.9BN, or about $26 billion more than a year ago, but for the full year 2017, China added the most Treasury holdings going back seven years.

But while China appears content with its US paper inventory, it was the second largest foreign US creditor, Japan, that has been liquidating in recent months, and in December, Japan sold $22.6 billion in TSYs, bringing its total to $1,061.5BN, the lowest total since the start of 2012.

Other notable holders were mixed:

• Russia sold $3.5BN to $102.2BN
• The United Kingdom added $12.5BN to $250BN
• Belgium, i.e. the proxy for China and other anonymous buyers, rose by $3.9BN to $119.2BN
• Cayman Islands, i.e. hedge funds, also added some $2.5BN to $269.9BN

The good news for all these buyers of US debt is that thanks to Trump’s budget, there’s plenty more where that came from.

Looking at the broader universe of all US International capital transactions, in December, foreign public and private entities sold a total of $16BN in Treasurys while buying $16.4BN in Agencies; they also sold a modest $1.25 BN in corporate bonds.

But the biggest surprise was the surge in US stock purchases by public and private foreign entities, which in December amounted to a whopping $35.1 billion (of which official entities sold $5.3BN while private entities bought $40.3BN), the second highest monthly total on record, and smaller only compared to the record foreign buying in May 2007, when offshore entities bought a record $42 billion.

So in addition to buybacks, algos, CTAs, risk parities and a relentless retail bid, here is another reason for the tremendous equity meltup at the end of 2017: furious buying of US stocks by foreigners, a trend which will likely continue well into 2018.

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Seriously…

 

Stocks are up five days in a row… Nasdaq up 5.6% this week alone…

 

For context, this is the Nasdaq’s best 5-day rally since 2011!!!!

Small Caps got back to even for 2018 (trannies still red)…Nasdaq is up 5% YTD

 

Nasdaq Futures are up 10% off the lows…

 

As “Most Shorted” Stocks soared off the lows… This is the biggest short-squeeze since the election

 

The Dow tested back below its 50% retracement level but rebounded quickly to a new bounce high…(oh, and Gartman nailed it again)

 

The S&P closed above its 50DMA…

 

The Inverse VIX ETF fell today as stocks gained – the first time that has happened since the collapse…

 

VIX was chaotic around the open today…

 

Despite stock strength, VIX ended the day modestly higher and we do note a significant divergence

 

While prices for HY and IG debt have ‘stabilized’ they are not rallying as exuberantly as stocks… perhaps because they just got hit with the biggest ETF fund outflows ever…

And just in case you needed any more confirmation of how nuts the world has become, Emerging Market High-Yield Debt is now trading at a lower yield than US High-Yield Debt…

 

Treasuries were notably mixed today with the long-end rallying and short-end higher in yield… On the week 30Y yields remain lower…

 

Which pushed the yield curve even flatter…

 

The Dollar Index bounced very briefly on BoJ headlines then tumbled back to its lowest close since Dec 2014 – down 5 days in a row…

 

Once Europe closed today, the dollar (lower) and gold and stocks (higher) were locked at the hip…

 

Once the dollar started sliding again this afternoon, commodities were all off to the races…

 

Cryptocurrencies continued their strong run this week…Bitcoin is up 20% on the week…

 

With Bitcoin seemingly tied at the hip to Nasdaq and VIX…

 

As a final reminder, markets are about to somewhat quieter (or at least less liquid) as most of Asia heads into the year of the dog and their celebrations.

 

via Zero Hedge http://ift.tt/2C20FfV Tyler Durden

Authored by Nicholas Colas via DataTrekResearch.com,

Not to be a party-pooper, but we wouldn’t take too much comfort in today’s US stock rally. Wednesday was the expiration day for monthly CBOE VIX Index options. Traders in those instruments have been on a wild ride over the last week. Squaring up positions on expiration day tends to create incremental volatility in normal environments. Add the much higher levels of open interest now, and you have the makings of a “Black Cygnet”, if not “Swan”. We linked to a Bloomberg story yesterday that highlighted this, and include it here.

We’ve seen the volatility market “tail” wag the stock market “dog” a lot recently, so we’re going to chalk up today’s move to the downdraft in the VIX related to expiration. One possible compounding effect: short covering as the S&P went unexpectedly positive just after 10am. While explaining daily moves is hard, we like this narrative better than “Stocks have discounted higher rates already”. That feels premature.

The combination of sluggish retail sales and higher CPI inflation, both out this morning, actually had a whiff of “Stagflation” about them – low economic growth and inflation. That term, by the way, was not invented in 1970s America even though it fit the economic mood of the times. Rather, it was the creation of a colorful British politician named Iain Macleod who used it in a magazine article in 1965.

Now, we aren’t especially worried about the retail sales number (0.3% lower than December, seasonally adjusted) for three reasons:

• We will shortly see the effect of lower tax and withholding payments in worker paychecks from last year’s tax reform. Very little of the reduction in personal tax rates and higher standard deductions appeared in January paychecks. Payroll processors needed more time to adjust withholding tables, but the new rates should be in place by the end of this month. US consumers have a long history of spending “found money” – this time shouldn’t be any different.

• Negative retail sales prints are hardly uncommon, even in economic expansions. There were 3 last year, for example, and 2 the year before that.

• Year on year growth is still 3.6% higher. Yes, that is slower than the +5% prints of Q4 2017, but similar to those from June, July and August of last year.

Now, the CPI inflation story is one that equity investors do need to keep top of mind. A few points here:

• While not part of “Core” inflation, both Food and Energy (21% of the headline CPI number by weighting) are getting more expensive. Food inflation was +1.7% year-on-year in today’s report; it was negative 0.1% a year ago. Gasoline prices (half of the Energy basket) are +8.5% higher than a year ago.

• Owners Equivalent Rent (how the BLS factors inflation for shelter) is an important category – 32% of headline CPI and 42% of core. Inflation here has ticked down from 3.6% at the end of 2016 to 3.2%. Full employment and the stimulus from tax reform should filter through to the housing market quickly enough to see a difference in 2018. Given its importance to the CPI calculation, this is the number to watch.

• Telephone services (mostly wireless plans) are no longer a headwind to higher inflation. This is a small part of CPI – just 2.3% of headline – but it was one explanation the Federal Reserve used last year to explain low inflation. That excuse is slowly receding – the CPI reading here was -6.6% year over year, but off the worst comps of -9.0% from last year.

The upshot here is that the US growth story is fine, but inflation is slowly ticking higher. If that were the end of the story, equity investors and markets would be fine. The great unknown: what will larger worker paychecks, a weaker dollar, further Federal stimulus, and tighter central bank policy do to consumption, inflation and interest rates?

One last point to cap the discussion: today, Fed Funds Futures showed a large increase in the odds that the Federal Reserve hikes rates 4 times or more this year rather than the guidance of 3 bumps. The odds of “4-or-more” increases now stands at 26%. The last time they were in the same neighborhood was last week, right at the start of the equity market decline.

Fed Funds Futures Odds: http://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html/

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For a few days last week, Crispin Odey, arguably the world’s most bearish hedge fund manager, felt vindicated when the very structure of the market appeared to be disintegrating before our very eyes, when a relentless liquidation panic by vol-selling machines seemed unstoppable and humans could only watch in horror and pray that someone would step in and BTFD. Then abruptly as it started, the selling stopped and the relentless low-volume, central-bank mandated grinding levitation that has become the hallmark of this “bull market” returned and last week’s correction is fast on its way to being relegated to the “crash” compost heap of the traders’ collective subconscious.

Or maybe not.

In his latest letter to clients – who were pleasantly surprised to see a modest pick up in Odey’s January performance – Crispin Odey wrote that there is one potential catalyst that will decide over the next few weeks that will determine whether the market slide is indeed over, or if what follows is continued risk asset pain, another market correction, and ultimately a recession: namely, whether investors, comforted by record high credit card balances and the promise of surging stocks, will retrench and start saving again after last week’s stock market scare:

Whether the fall was the herald of more bad news to come out of financial assets, the next few weeks will tell. High asset prices have driven down precautionary savings. Will a fall in those assets be sufficient to cause savings to rise sharply – a classic reason for a recession – that is the question?

The logic is simple: as we showed recently, America’s personal savings rate recently dropped to near all time lows. While this has had a stimulatory effect on the economy – and boosted stocks – there is only so much “deferred spending” that US households can extract from record credit cards balances, while hoping that the S&P will keep rising indefinitely. If and when this process shifts into reverse, is also when the recent economic gains start receding, eventually pushing the economy into contraction, while hurting corporate profits in the process. And since all this is taking place as the Fed continues to hike rates, the concurrent drop in both Earnings and P/E multiples would be sufficient to send stocks substantially lower from here.

Savings aside, Odey also writes that the key question going forward is whether inflation is truly back. To answer that, one needs to consider three things: central banks and math PhD’s…

QE introduced mathematicians to our market place. With risk doubled down, they had a ball with financial instruments. Their ability to marshal data was game changing but their demand for data was also their weakness. The further back in time they went, the poorer the data they could recover and the sheer amount made it impossible to mine far back.

… and of course, QE:

Monetising has taken many forms in the past, but it rarely lasts more than 2 years before it passes from financial assets into the real economy. For my money the closest fit is with 1971-1974. Like then nobody had witnessed inflation greater than 2%.

Governments reacted to the end of the Bretton Woods exchange rate system (a gold standard) by both monetising and spending on a giant scale. The massive monetary injection was felt firstly in 1972 by the rise of the nifty fifty stocks – those companies whose prospects could never dim – to begin with but by the end of ’73 and into ’74 by a global boom which in the end lifted all commodities and by ’75 had led to wage inflation in the western world of over 8%.

However, unlike the 1970s, assets today are priced far, far higher. In fact, “financial assets – both bonds and equities – react only badly to ever rising inflation and moreover equities, thanks to QE, are as expensively priced as they were in 1928/9 and 1999/2000.“

As for the threat of inflation, recall that as we showed one week ago, after two decades of declines the velocity of money appears to have finally bottomed.

There is also one more parallel to the 1970s: back then, besides the global economic crisis, the world faced a “crisis for capitalism.” Well, according to a growing chorus of skeptics, thanks to the countless passive investing vehicles used today, among them countless levered and inverse ETFs many of which destabilize the market and threaten an illiquid collapse which combines the worst aspects of the August 2015 and February 2018 crashes, the market once again no longer rewards the proper allocation of capital – i.e., the core purpose of “capitalism” – and as such we face a new, and even more serious “crisis of capitalism” today.

This is not a place from which you would like to begin this journey. For the optimists, globalisation and productivity needs to come to their aid. Remember that the 70’s were not just a time of economic crisis. It witnessed a crisis for capitalism as well. Wealth cannot be defended, but capitalism is about competition overcoming rent-seeking and should be defended.

Unfortunately, as last week’s events showed, nobody will care until it is too late, and the accusations, fingerpointing, name-calling and scapegoating will be all the rage… after the crash. Until then, well, stocks are going up so best to keep pretending everything is fine, and all the problems which led to a global, coordinated freak out last week, have magically been fixed.

* * *

Odey’s full January 2018 Fund Manager Report below.

Frankly what happened when the Dow Jones fell by 1400 points in a little under an hour, had nothing to do with humans. A reputation for being safe and secure was enough for mathematicians to build castles in the sky for ‘investors’ to live in. On Monday those castles fell from the sky.

What caused the move? Undoubtedly the rise in bond yields over the last three weeks was responsible, and behind that a conviction that after two years of rampant monetising by the authorities in general, economic activity was picking up quickly and with little give left in global capacity, would result in rising prices and even wages.

Whether the fall was the herald of more bad news to come out of financial assets, the next few weeks will tell. High asset prices have driven down precautionary savings. Will a fall in those assets be sufficient to cause savings to rise sharply – a classic reason for a recession – that is the question? Another, and I think, important angle is whether the printing of so much money over ten years would allow global inflation to become a problem.

24 years after China first burst onto the global trading scene thanks to a devaluation of the Renminbi and the signing of GATT which brought 6 billion people into a trading system of 1.6bn people, there are signs now that the deflation caused by their participation, has well and truly fed through the system.

Recently my investing has taken me into the arcane world of antimony refining. Antinomy is a very small market but like all commodities it is dominated by China who manufacture 50% of it. In 1995 they arrived in this market and quickly drove out western refineries with the low margins they were willing to work for. Twenty three years later the world is running scarce of easily obtained antimony and this is a market in which domination by a country more interested in trading than commercialisation has had a price. From here supply can only be brought on by higher prices and a commercial thinking which develops markets outside of where they currently are. It feels like a microcosm of many commodities’ positioning today. If the world is again full of scarcity, printing money will first lead to inflation and more importantly stagflation.

QE introduced mathematicians to our market place. With risk doubled down, they had a ball with financial instruments. Their ability to marshal data was game changing but their demand for data was also their weakness. The further back in time they went, the poorer the data they could recover and the sheer amount made it impossible to mine far back.

And thankfully so because it allowed historians to study similar times to this and draw out trends that rhyme with today. Monetising has taken many forms in the past, but it rarely lasts more than 2 years before it passes from financial assets into the real economy. For my money the closest fit is with 1971-1974. Like then nobody had witnessed inflation greater than 2%.

Governments reacted to the end of the Bretton Woods exchange rate system (a gold standard) by both monetising and spending on a giant scale. The massive monetary injection was felt firstly in 1972 by the rise of the nifty fifty stocks – those companies whose prospects could never dim – to begin with but by the end of ’73 and into ’74 by a global boom which in the end lifted all commodities and by ’75 had led to wage inflation in the western world of over 8%.

The secret as to why this happened was that the authorities were very slow to tighten monetary policy and were more intent on maintaining full employment than a sound currency. If this all sounds familiar, please remember that the stagflation of the 1970’s came only after 2 years of monetising, not ten years.

Financial assets – both bonds and equities – react only badly to ever rising inflation and moreover equities, thanks to QE, are as expensively priced as they were in 1928/9 and 1999/2000. This is not a place from which you would like to begin this journey. For the optimists, globalisation and productivity needs to come to their aid. Remember that the 70’s were not just a time of economic crisis. It witnessed a crisis for capitalism as well. Wealth cannot be defended, but capitalism is about competition overcoming rent-seeking and should be defended.

Finally, for those curious, here is Odey’s latest summary P&L:

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