China Downturn Could Last Five Years Warns Central Bank
An advisor to the People’s Bank of China (PBoC) said China’s economy might not recover for the next five years, reported Reuters.
Liu Shijin, a policy adviser to the PBoC, said the country’s GDP will decelerate through 2025 and could print in a range of 5 to 6%.
Shijin warned that excessive monetary policy is failing to stimulate the economy and could cause it to rapidly decelerate.
Last month, we noted that China’s credit growth plunged to the weakest pace since 2017 as a continued collapse in shadow banking, weak corporate demand for credit, and seasonal effects all signaled that China’s economy, nevertheless, the global economy, will continue to slow.
The latest Q3 GDP figure recorded a further drop in growth, now printing at 6% YoY, the weakest expansion since the early 1990s.
China will continue decelerating into 1H20 — thanks to ineffective monetary policy but could stabilize in a target range of 5.8% to 6% YoY.
A further economic slowdown in Chinese growth could ruin the party for equity bulls, who have already priced in a massive 2016-style rebound in the global economy. A slowing China means the world will fail to rebound, though we don’t discount the stabilization narrative.
With China’s economy unlikely to sharply rebound early next year, global investors will shortly have to reprice growth, which could result in a move down in global equities.
To gain more color on China’s extended slowdown, we turn to Fathom Consulting’s China Momentum Indicator (CMI), which provides a more in-depth view of China’s economic activity than the official Chinese GDP statistics.
CMI is based on ten alternative indicators for economic activity; some of those indicators include railway freight, electricity consumption, and the issuance of bank loans.
Fathom has stated that in CMI, the calculation of the index avoids measuring construction activity, and instead focuses on shadow measures of economic activity. The consulting group says this allows the index to be “less prone to manipulation than the headline GDP figures.”
“In 2014, when China’s traditional growth model was running out of steam and vulnerabilities were rising, authorities toyed with credit tightening and an enforced rebalancing. But at the end of 2015, when growth slowed too sharply, they quickly threw in the towel, resorting to the old growth model of credit-fuelled growth. With growth once again slowing, and past precedent suggesting credit has neared its limit, China finds itself at a crossroad,” Fathom recently said.
China’s failure to stimulate its economy suggests CMI will continue a downward trajectory that has been underway for the last decade.
We’ve recently outlined the bust of the global auto industry has weighed down the Chinese economy. With no signs of an upswing in the auto market, China’s economy will remain depressed in the years ahead.
As China’s economy slows, global commodity prices are stuck in a deflationary spiral.
China’s slowing economy warns that global equities have mispriced growth for early 1Q20.
Chinese stocks could see downside in the year ahead as the economy slows.
Looking for signs of life in the Chinese economy — there aren’t any at the moment.
Société Générale’s latest report shows employment in China contracting across manufacturing and non-manufacturing, outlining how the slowdown is broad-based.
It’s becoming increasingly clear that China’s economy is decelerating and could be locked in a downward spiral until 2025. This means without China being the beating heart of the global economy, which created 60% of all new global debt over the past decade – there can be no global recovery. Maybe the world has just transitioned into a period of low or below trend growth that could be the onset of a worldwide trade recession.
Rep. Tulsi Gabbard (D-HI), the outspoken, independent thinker from Hawaii running for the loftiest perch in the land, has just said “no” to taking the next Democratic presidential primary debate stage. This signals either a surrender or a strategic end-run around the field. Yes, we’ve been down this road before. It is the same sentiment she expressed prior to the last debate; although she threatened to boycott the circus, she did qualify, show up, and rebuke the other candidates and the Democratic Party.
Gabbard has been Public Enemy #1 in those circles since. Instead of playing into the cemented narrative, Tulsi, who has not so far reached the conditions imposed for participation in the next round, is not wasting her time.
The Most Repetitive Show On Earth
As the sixth platform for national domination looms, Gabbard tweeted a different plan, saying:
“For a number of reasons, I have decided not to attend the December 19th ‘debate’ — regardless of whether or not there are qualifying polls. I instead choose to spend that precious time directly meeting with and hearing from the people of New Hampshire and South Carolina.”
Whether her bold decision is based on not quite reaching the necessary baseline requirements, or because she has had enough of the game playing, Tulsi seems indifferent to striving for inclusion. And we all know Gabbard is not one to tread water in the shallow end of the pool when a good, strong crawl will cover more territory.
Tulsi Gabbard
The Democratic National Committee (DNC) has upped the ante for primetime pandering by requiring candidates to have a minimum of 4% support in selected national polls and 6% in two state polls of the early primary states Iowa, New Hampshire, South Carolina, or Nevada.
The deadline for polling qualification is Dec. 12 at the witching hour of 11:59 p.m. in the Eastern time zone. How dramatic for what is likely to be a boring rehash of Trump-bashing, held a scant week later.
Although Tulsi has the sheer donor numbers needed – the support of at least 200,000 unique donors – her national polling numbers haven’t yet reached the threshold. Those on the survey leaderboard are Sens. Bernie Sanders (I-VT), Elizabeth Warren (D-MA), Amy Klobuchar (D-MN), former Vice President Joe Biden, Mayor Pete Buttigieg, billionaire Tom Steyer, and businessman Andrew Yang.
A Diverse Or One-Note Race?
Tulsi has been tilting at the DNC and its primary prerequisites since the get-go, claiming the surveyors they used weren’t “accurate” enough, or that the venues were biased. Gabbard’s campaign released a statement in August, which said:
“Many of the uncertified polls, including those conducted by highly reputable organizations such as The Economist and the Boston Globe, are ranked by Real Clear Politics and FiveThirtyEight as more accurate than some DNC ‘certified’ polls.”
The DNC was insistent that its criteria for inclusion have been fair and balanced. Just ask the committee’s spokeswoman Xochitl Hinojosa, who responded:
“This has been the most inclusive debate process with more women and candidates of color participating in more debates than billionaires. We are proud of this historic and diverse field with 20 candidates participating in the first two debates and at least 10 candidates in each debate after that.”
What’s ironic is that no people of color – because of the strident stipulations imposed – will be at the Dec. 19 debate hosted by PBS NewsHour and Politico at the Loyola Marymount University in Los Angeles. PBS is set to broadcast the debate, and most likely, fewer people will watch the event than Gabbard can reach by holding town halls or meet and greets. Perhaps she’s on to something, after all.
TV Ad Sales Tumble To 2009 Levels Amid Cord Cutting And Recession Threat
The Interpublic Group of Companies’ research unit Magna has reported global television advertising sales plunged 4% in 2019, one of the steepest declines since the financial crisis as the global economy continues to decelerate through Q4, first reported by Bloomberg.
Magna estimates that global television ad sales contracted by 4% in 2019, one of the worst years since the 2008/9 financial crisis, as advertisers pulled back on spending and also shifted ad spending to the internet.
Recent declines in TV viewership have suppressed television ad sales. It was determined that viewership plunged during the year in the US, Europe, China, and Australia.
“Almost everywhere now, we have linear viewing declining double digits, or high single digits,” said Vincent Letang, EVP of global market intelligence at Magna.
Cord-cutting has been a significant driver of the demise of cable television. Consumers are opting for online streaming services, not just in the US, but across the world.
Even with a 19.6% plunge in global print ad sales and 3.6% slide in global traditional television ad sales over the year, the industry as a whole was propped up by tremendous growth in global digital ad sales.
Magna said global ad sales spending would increase by 4.6% in 2020, though at a much slower rate than 5.2% so far recorded in 2019.
National television ad sales in the US saw a drop over the year, estimated to be around -3% to $42 billion, and will likely slow in 2020 as a mild recession could appear in the back half of the year. A slowdown in the economy could further dent television ad sales; one of the sectors pressuring the decline is the automotive industry.
US TV ad sales will remain slower in 2020 but could see artificial boosts at specific periods during the year thanks to the presidential election and the Summer Olympics. Technology and entertainment ad spending could offset weakness in print and television ad sales.
As the overall global ad industry slows with the threat of a worldwide trade recession next year, the cracks are already beginning to show as print and television ad sales stumble. Slowing global trade in the quarters ahead will continue to compress profit margins for companies across the world and lead to declining advertisement spending. The world is entering a period of ‘slowbalisation.’
Today’s environment is drastically different than it was in the late ‘70’s and early ‘80s when inflation was nearly out of control. Today, disinflation is the primary challenge central banks face, not inflation.
It’s impossible to imagine another Volcker today. Today’s markets depend on the artificially low interest rates that the Fed’s been generating since 2009. Raising interest rates would devastatingly pop the asset bubbles in stocks and elsewhere.
Remember how markets revolted against the possibility of further rate increases last December, when rates were still under 3%? Imagine 20% interest rates.
But the problems in the economy today are structural, not liquidity-related. Federal Reserve officials have of course misperceived the problem. The Fed is trying to solve structural problems with liquidity solutions. That will never work, but it might destroy confidence in the dollar in the process.
Fiat money can work but only if money issuance is rule-based and designed to maintain confidence. Today’s Fed has no rules and is on its way to destroying confidence. Based on present policy, a complete loss of confidence in the dollar and a global currency crisis is just a matter of time.
Consumer price inflation has remained persistently low, despite the Fed’s best efforts. This has led many people to ask where the inflation is, because the Fed has created trillions of dollars since the financial crisis.
But there has been inflation. It’s just been in assets like stocks, bonds, real estate, etc. The market’s back to record highs again, in case you haven’t heard.
The bottom line is, we’ve seen asset price inflation, and lots of it, too.
But the question everyone wants to know is when will we finally see consumer price inflation; when will all that money creation catch up at the grocery store and the gas pump?
The Fed is aiming for sustained 2% inflation. But it’s proven extremely difficult to accomplish.
Personal consumption expenditures (PCE) is the core price deflator, which is what the Fed looks at. Currently, it’s stuck below 2%. It hasn’t gone much of anywhere. But the Fed continues to try everything possible to get it to 2% with hopes to hit 3%.
But the reason the Fed has struggled to attain its goals is that inflation is not purely a function of monetary policy. It’s a partial function of monetary policy. Psychology is the other factor.
Milton Friedman had a famous quote, that inflation is always and everywhere a monetary phenomenon. But it’s not really true.
Inflation is also a partial function of behavioral psychology. It’s very difficult to get people to change their inflation expectations after a trend has continued for a long time. So it’s very hard to raise inflation from under 2% to 3%.
But once it does, a psychological shift could occur, and it could lead to expectations of further inflation to come.
That’s because double-digit inflation is a non-linear development. What I mean is, inflation doesn’t go simply from 2%, to 3%, to 4%, to 5%, etc.
Inflation can really spin out of control very quickly if expectations change. In other words, it can gap higher very quickly. Inflation can go from 3% to 5% to 7% or more fairly quickly. Double-digit inflation could quickly follow.
So is double-digit inflation rate within the next five years in the future?
It’s difficult to say exactly. But it is possible. If it does happen, inflation will likely strike with a vengeance.
Please understand, I am not forecasting it. But if it happens, it would happen very quickly. We would see a struggle from 2% to 3%, and then jump to 6%, and then jump to 9% or 10%.
Everyday people would be the greatest casualties.
Central bankers try to use inflation to reduce the real value of the debt to give debtors some relief in the hope that they might spend more and help the economy get moving again.
Of course, this form of relief comes at the expense of savers and investors who see the value of your assets decline.
It’s part of what I call the “money illusion.”
Money illusion has four stages.
In stage one, the groundwork for inflation is laid by central banks but is not yet apparent to most investors. This is the “feel good” stage where people are counting their nominal gains but don’t see through the illusion.
Stage two is when inflation becomes more obvious. Investors still value their nominal gains and assume inflation is temporary and the central banks “have it under control.”
Stage three is when inflation begins to run away and central banks lose control. Now the illusion wears off. Savings and other fixed-income cash flows such as insurance, annuities and retirement checks rapidly lose value.
If you own hard assets prior to stage three, you’ll be spared. But if you don’t, it will be too late because the prices of hard assets will gap up before the money illusion wears off.
Finally, stage four can take one of two paths.
The first path is hyperinflation, such as Weimar Germany or Zimbabwe. In that case, all paper money and cash flows are destroyed and a new currency arises from the ashes of the old.
The alternative is shock therapy of the kind Paul Volcker imposed in 1980. In that case, interest rates are hiked as high as 20% to kill inflation, but nearly kill the economy in the process.
Right now, we are in late stage one, getting closer to stage two. Inflation is here in small doses and people barely notice. Savings are being slowly confiscated by inflation, but investors are still comforted by asset bubbles in stocks and real estate.
That’s why you should begin to buy some inflation insurance in the form of hard assets before the Stage Three super-spike puts the price of those assets out of reach.
This is why having a gold allocation now is of value. Because if and when these types of development begin happening, gold will be inaccessible.
I’m on record predicting that gold will go to $10,000 an ounce. To this point, I am often asked, “How can you say gold prices will rise to $10,000 without knowing developments in the world economy, or even what actions will be taken by the Federal Reserve?”
Well, the number is not made up. I don’t throw it out there to get headlines, et cetera. It’s the implied non-deflationary price of gold. Everyone says you can’t have a gold standard, because there’s not enough gold. But there’s always enough gold, you just have to get the price right.
That was the mistake made by Churchill in 1925, as described above. The world is not going to repeat that mistake. I’m not saying that we will have a gold standard. I’m saying if you have anything like a gold standard, it will be critical to get the price right. Paul Volcker said the same thing.
The analytical question is, you can have a gold standard if you get the price right; what is the non-deflationary price? What price would gold have to be in order to support global trade and commerce, and bank balance sheets, without reducing the money supply?
The answer, based on today’s money supply, is $10,000 an ounce.
The now impending question is, are we going to have a gold standard?
That’s a function of collapse of confidence in central bank money, which we’re already seeing. But monetary resets have happened three times before, in 1914, 1939 and 1971. On average, it happens about every 30 or 40 years. We’re going on 50.
From “Locked & Loaded” To UN ‘Unable’ To Link Aramco Attacks To Iran: More War Lies Debunked
Based on the usual jingoistic rhetoric and threats out of Washington at the time of the Sept. 14 drone and missile strikes on Saudi Aramco facilities, it’s clear the major incident which temporarily knocked out Saudi Arabia’s ability to process oil brought the US and Iran to the brink of war.
It must be recalled that US administration officials had without a shred of evidence (in those early hours after the attack) dismissed the almost immediate Yemeni Houthi official military statements proudly owning up to the attack, instead, blaming Iran directly. It’s possible that this event and others blamed on Tehran could still lead to a US and allied war on Iran. US and Saudi officials had subsequently claimed “confirmation” based on rocket debris that the Islamic Republic was indeed behind it. Remember too that Trump had stated days after that the US military was “locked and loaded”.
But after an independent United Nations examination of weapons debris from the attack sites at facilities in Khurais and Abqaiq has failed to link the incident to Iran, this appears yet another case of US ‘rush to war’ lies debunked.
Remains of the missiles which the Saudi government says were used to attack an Aramco oil facility, via Reuters.
As US-funded official media wing RFERL has been forced to admit, there’s no evidence the weapons were “of Iranian origin” and UN investigators remain unable to link the attacks to Iran:
The United Nations has so far been unable to confirm Iran’s involvement in drone and cruise missile attacks on two Saudi oil facilities in September, Secretary-General Antonio Guterres has said.
In a report presented to the Security Council on December 10, Guterres wrote that UN investigators examined debris of weapons used in the attacks on the Saudi Aramco oil facilities.
The report summarizing the experts’ initial findings said they were not able to “independently corroborate” that those weapons were “of Iranian origin.”
US war drums had been beating steadily in the days following the attack, and the president had reportedly ordered ‘war plans’ to be drawn up by the Pentagon.
Trump had also tweeted that the US was “locked and loaded” but would await a response on the desired path forward from Saudi leadership.
Saudi Arabia oil supply was attacked. There is reason to believe that we know the culprit, are locked and loaded depending on verification, but are waiting to hear from the Kingdom as to who they believe was the cause of this attack, and under what terms we would proceed!
Pompeo at the time was also the first top official to specifically name Iran as the culprit. He did so while visiting Saudi and Emirati leaders in a trip to assess the security situation on the ground.
Iran’s reaction to the US ‘readying’ military strike plans was to warn it would mean “All-out war,”according to statements at the time from Foreign Minister Zarif.
The Houthis owned up the attack the very day it happened, but US officials dismissed it, though some claiming Iran “ordered” it and supplied the weaponry.
All of this means the world was again dangerously close to the start of yet another ‘regime change’ war in the heart of the Middle East, despite defense officials’ assurances any potential strike would be ‘limited’ (we’ve all heard such false promises many times before).
The final report, worked on by a team of international exports is expected out soon. But this week Secretary-General António Guterres announced, “At this time, it is unable to independently corroborate that the cruise missiles and unmanned aerial vehicles used in these attacks are of Iranian origin,” in a preliminary report.
Also interesting is that the report noted that Yemen’s Houthis “have not shown to be in possession, nor been assessed to be in possession” of the types of drones used in the attack.
Likely the White House will reject the UN’s findings regardless, in a situation eerily similar to the years prior to the 2003 Iraq invasion.
The near-homogeneity of Silicon Valley political beliefs has gone from wry punchline to national crisis in the United States. The monoculture of virtue signaling and high- and heavy-handed woke corporate leftism at places like Google, Twitter, and Facebook was once a source of chagrin for those who found themselves shut out of various internet sites for deviating from the orthodoxies of the Palo Alto elites. After the 2016 presidential election, however, it became obvious that the digitalistas were doing a lot more than just making examples of a few handpicked “extremists.”
From the shadow banning of non-leftist sites and views to full-complement political propagandizing, Bay Area leftists have been so aggressive in bending the national psyche to their will that there is talk in the papers and on the cable “news” channels of “existential threats to our democracy.”
It is tempting to see this as a function of political correctness. Americans, and others around the world, who have found themselves on the “wrong side of history” (as determined by the cultural elite in an endless cycle of epistemological door closing) have long been shut out of conversations, their views deemed beyond the pale of acceptable discourse in enlightened modern societies. Google, Facebook, Twitter — are these corporations, and their uber-woke CEOs, just cranking the PC up to eleven and imposing their schoolmarmish proclivities on the billions of people who want to scrawl messages on their electronic chalkboards?
Not so, says reformed leftist — and current PC target — Michael Rectenwald. The truth of Stanford and Harvard alumni’s death grip on global discourse is much more complicated than just PC run amok. It is not that the Silicon Valley giants are agents of mass surveillance and censorship (although mass surveillance and censorship are precisely the business they’re in). It’s that the very system they have designed is, structurally, the same as the systems of oppression that blanketed and smothered free expression in so much of the world during the previous century. In his latest book, Google Archipelago, Rectenwald outlines how this system works, why leftism is synonymous with oppression, and how the Google Archipelago’s regime of “simulated reality” “must be countered, not only with real knowledge, but with a metaphysics of truth.”
Google Archipelago is divided into eight chapters and is rooted in both Rectenwald’s encyclopedic knowledge of the history of science and corporate control of culture, as well as in his own experiences. Before retiring, Rectenwald had been a professor at New York University, where he was thoroughly entrenched in the PC episteme that squelches real thought at universities across North America and beyond. Gradually, Rectenwald began to realize that PC was not a philosophy, but the enemy of open inquiry. For this reason, and because Rectenwald is an expert in the so-called digital humanities and the long history of scientific (and pseudo-scientific) thinking that feeds into it, Google Archipelago is not just a dry monograph about a social issue. By turns memoir, Kafkaesque dream sequence, trenchant rebuke of leftist censorship, and intellectual history of woke corporate political correctness, Google Archipelago is a welcoming window into a mind working happily in overdrive.
There is much in Google Archipelago addressing the lie that Google, Facebook, and Twitter are neutral platforms for free-ranging debate. This is not so much, because, statistically and empirically, it is irrefutable that Silicon Valley is hostile to non-Beltway-leftist opinions, but because, much more damningly, their woke-capital corporate structures are themselves iterations of massification, propaganda, and deep social control. For Rectenwald, the “Google archipelago” is not PC version 2.0; it is Marxism, version 1,000 (and raised by several orders of magnitude to boot).
For example, in the first and second chapters of Google Archipelago, Rectenwald lays out how the various elements of woke-capitalist ideological repression work together in actual practice. Rectenwald’s chief example is the Gillette ad campaign of January 2019, in which a company whose products (razor blades and shaving cream) are purchased, of course, was said to insult the very essence of its customers by belittling manhood as “toxic.” Why would a razor blade company go out of its way to alienate the people who buy the majority of razorblades? The answer is surprising. Rectenwald tells us Gillette was not simply responding to a renewed PC craze by running the “toxic masculinity” ad. Gillette, from the beginning, has been a pioneer in designing systems to mold public opinion and shape individuals into easily pliable socialist masses. King Camp Gillette, the founder of what is now the Gillette company, hated competition and sought to make, as he put it, a “world corporation.” Through this corporation, the ignorant plebs around the globe could be impelled to do what their social and intellectual superiors — the leaders of the “world corporation” — thought was in their best interest. This “singular monopoly,” as Rectenwald puts it, would control the material and mental makeup of the entire world. Quoting King Camp Gillette’s biographer, Rectenwald adds, “It was almost as if Karl Marx had paused between The Communist Manifesto and Das Kapital to develop a dissolving toothbrush or collapsible comb.”
Rectenwald outlines a direct line of descent from this earlier corporate socialism of razor blades and “collapsible comb[s]” to the “authoritarian leftism” of the present digital age, authoritarian leftism being “the operational ethos of the Google Archipelago.” The Google Archipelago’s “wokeforce” practices what Rectenwald calls “avant-garde identity politics extremism,” the organizing principle for deciding which parts of society are in revolt against PC and need to be excised from the archipelago of allowed opinion. The internet did create the “information superhighway,” as was endlessly exclaimed by politicians and nascent digitalistas during the late 1990s. But it also amplified the structures of woke corporate control that had been in place since the beginning of globalized leftism, Marxian “capitalist” finance, and elite-led collectivism — precisely the kind of inversion of free enterprise and perversion of the free market practiced by King Camp Gillette and his socialist comrades a hundred and more years before. The Google Archipelago is not a product of the personal computer, but of another kind of political correctness, the PC that is the manifestation of the same old human urge to control others and bring the world under the sway of one’s will.
Other contemporary philosophers, most notably Shoshana Zuboff in The Age of Surveillance Capitalism, have used Marxian categories and terminology to show how Google’s digital collectivism is little more than a bastardization of old-fashioned Marxism-Leninism. Rectenwald, however, has done the truly creative work of exploring how the Google Archipelago re-upping of Marx is not only practically Marxist, but conceptually and structurally so.
Google Archipelago is the record of an individual who fought his way out of the groupthink hive (Rectenwald believes that groupthink now takes the form of a binary reduction of the human person to easily manipulable units rather than the dialectical materialism of the Marxism of yesteryear) and is now trying to piece together the mechanisms of his long season of unfreedom.
But the way out of the Google Archipelago is a narrow strait, and fraught with peril. As Rectenwald writes:
GULAG is an ideological state apparatus, if not the state itself, a state that penetrates deeper by the second, infiltrating the very recesses of cognition, of conscious thought and unconscious potentiality. The culture wars will soon be fought not merely on the college campus or social media networks but in cybernetic circuits that splice will, libidinal desire, perception, and identity into distributed cognitive networks that elide our bodies, while attempting to disguise themselves as our minds.
CFTC Increasingly Monitoring Futures For Suspicious Trading Around Trade Headlines
Ever since the controversial Vanity Fair article back in mid-Oct. suggested that some futures traders profited billions of dollars around trade headlines, there’s been a significant effort by the Commodity Futures Trading Commission (CFTC) to use technology to comb through time and sales for suspicious trades, sources familiar with the investigation told Bloomberg.
Sources said the purpose of the CFTC investigation is to asses whether some traders had insider information on economic data, government policy, and trade headlines.
CFTC began the investigation in mid/late Oct. after the Vanity Fair article went public. The conclusions the CFTC made about mysterious traders profiting around trade headlines, key economic data points, or even policy decisions were inconclusive of any wrongdoing. A similar conclusion was reached at the Securities and Exchange Commission (SEC), one source told Bloomberg.
CFTC and SEC didn’t comment on the Vanity Fair article when asked by Bloomberg.
CFTC Enforcement Director Jamie McDonald did respond by saying: “The early returns on our investments in data analytics have been positive,” he said in a statement. “We expect the longer-term impact of our efforts to be even more substantial, as we continue to prioritize detecting and prosecuting misconduct that can undermine the integrity of our markets, like the various forms of insider trading prohibited in the derivatives and commodities markets.”
Nearly a dozen Democratic lawmakers have asked the SEC to investigate futures and equity markets following the Vanity Fair publication.
In one instance, the article, titled “Trump Chaos Trades,” described how unnamed traders made $1.8 billion in five perfectly-timed trades using S&P 500 e-mini futures as the trading vehicle.
CME Group Inc. Chief Executive Officer Terry Duffy, called the Vanity Fair article “nonsensical.” Others have said the constant trade headlines on a daily basis could be fraught with suspicious trading activity around the release.
It’s possible that the CTFC and SEC will be investigating time and sales of equity futures around President Trump’s tweet this morning, announcing: “Getting VERY close to a BIG DEAL with China. They want it, and so do we!.”
It’s still unclear if the CTFC and SEC examined time and sales of the futures markets for suspicious trading around past trade headlines from the Trump administration about an “imminent trade deal” that has been released over and over again for the last 12 months.
“China talks are going very well” – Trump, 12/7/18
“We’re getting into the final laps” – Mnuchin, 4/29/19
“We are coming down to the short strokes” – Kudlow, 11/15/19
“Getting VERY close to a BIG DEAL” – Trump, 12/12/19
“Our impulses are being redirected. We are living in an artificially induced state of consciousness that resembles sleep… The poor and the underclass are growing. Racial justice and human rights are nonexistent. They have created a repressive society and we are their unwitting accomplices. Their intention to rule rests with the annihilation of consciousness. We have been lulled into a trance. They have made us indifferent to ourselves…, to others…, we are focused only on our own gain. Please understand they are safe as long as they are not discovered. That is their primary method of survival: To keep us asleep, keep us selfish, keep us sedated.”
– “They Live” (1988), John Carpenter, Universal Pictures, Release date: November 4, 1988
John Carpenter’s cult classic film “They Live” foreshadowed our current time in so many ways. The story told of disguised freaks appearing human while consolidating control over the upper echelons of society. To do this, they lulled the masses to sleep via advertising and materialism. The electronic media acted as a hypnotist’s watch on lethargic plebeians as they were cajoled into a dreamlike state, treated like puppets, and surveilled – by flying drones no less.
Given our current circumstances today the movie would be considered non-fiction; except with the truth-tellers on the still-free internet acting as the good guy media hackers distributing the sunglasses in the film that allowed the freaks to be seen in all their loathsome hideousness.
In “They Live”, the media hackers and sunglasses allowed the public to see behind the curtain, so to speak, which is a phrase taken from another film, “The Wizard of Oz”. It was when Dorothy and friends could see the wizard after a curtain fell and revealing him to be just a man operating technological buttons, levers, and a microphone in order to cast illusions upon the inhabitants of Oz.
And here’s the point of these cinematic parables: The grotesque freaks from “They Live” and the wizard from the “Wizard of Oz” knew what they were doing as they purposefully deceived the citizens in their respective worlds; and the deceiving con artists did this so as to consolidate power and maintain control over whom they perceived to be dupes.
Sound familiar?
Because whenever we hear elected officials, talking heads in the media, and former and current high-ranking officials in the government pontificating regarding Inspector General Michael Horowitz’s report on FISA abuse as having found no evidence of political bias, we just know it’s a pack of lies.
They know what they are doing. And they know what they have done.
Although Horowitz gave the wizards and freaks the talking points they desired, the report was damning, to say the least, and it validated what we red-pilled denizens on the still-free internet understand happened during the 2016 Presidential Election as well as the ensuing treachery that later became the Mueller investigation.
The Inspector General’s report now makes clear that the FBI launched an intrusive investigation of a U.S. presidential campaign on the thinnest of suspicions that, in my view, were insufficient to justify the steps taken…
– U.S. Attorney General Bill Barr – December 9, 2019
I have the utmost respect for the mission of the Office of Inspector General and the comprehensive work that went into the report prepared by Mr. Horowitz and his staff. However, our investigation is not limited to developing information from within component parts of the Justice Department. Our investigation has included developing information from other persons and entities, both in the U.S. and outside of the U.S. Based on the evidence collected to date, and while our investigation is ongoing, last month we advised the Inspector General that we do not agree with some of the report’s conclusions as to predication and how the FBI case was opened.
– U.S. Attorney John Durham – December 9, 2019
In a later NBC interview, Attorney General Barr further clarified his views on Horowitz’s consistent predilections toward blind, deaf, and dumb justice:
But Barr argued that Horowitz didn’t look very hard, and that the inspector general accepted the FBI’s explanations at face value.
“All he said was, people gave me an explanation and I didn’t find anything to contradict it … he hasn’t decided the issue of improper motive,” Barr said. “I think we have to wait until the full investigation is done.”
Barr said he stood by his assertion that the Trump campaign was spied on, noting that the FBI used confidential informants who recorded conversations with Trump campaign officials.
In his December 11, 2019 testimony tightrope act before the U.S. Senate, Horowitz said he preferred the term “surveillance” over “spying” and, to his credit, retroactively annulled former FBI Director Comey’s self-vindication with this statement:
I think the activities we found here don’t vindicate anybody who touched this FISA.
The Appendix identifies a total of 51 Woods procedure violations from the FISA application the FBI submitted to the court authorizing surveillance of former Trump campaign aide Carter Page starting in October 2016.
A whopping nine of those violations fell into the category called: “Supporting document shows that the factual assertion is inaccurate.”
For those who don’t speak IG parlance, it means the FBI made nine false assertions to the FISA court. In short, what the bureau said was contradicted by the evidence in its official file.
To put that in perspective, former Trump aides Mike Flynn and George Papadopoulos were convicted of making single false statements to the bureau. One went to jail already, and the other awaits sentencing.
The FBI made nine false statements to the court.
And, of course, all of the errors and omissions were made against Team Trump. Does that seem random to you? What were the odds?
But no political bias. Right. Got it.
To be sure, the Wizards of Obama engaged in third world tactics and the unseen freaks in the highest levels of The Establishment planned to consolidate their power under Hillary.
In describing the current narrative of this sordid tale, it would appear that Donald Trump was elected to chew bubble-gum and kick ass. And the president is out of bubble-gum.
The films “They Live” and “The Wizard of Oz” are constructive lens by which to view what’s happening in the ongoing reality TV show of American politics because they distill any psyops and narratives down to true versus false as opposed to Republican versus Democrat; even if the movies arefiction.
Is everything we are now witnessing in American politics occurring naturally? Or is there something else going on?
Regardless, like true versus false, or life versus death, perhaps conservative versus Marxist is also a valid ideological construct upon which we can depend.
To the Hive Mind, politics is survival. It’s why it so passionately politicizes everything from NFL football, to Hollywood, to the weather, to education, to pre-school children’s library readings hosted by gender-fluid freaks.
Maybe this also explains why the Marxists so often win politically in their efforts to repeatedly establish their vision of utopia on this blue orb – because they can’t afford to lose. It is, in fact, the root of Trump Derangement Syndrome, on being “triggered”, and explains snowflakedom: Their worldview is all or nothing; even if only based on delusions, color, and genitals.
It is the new religion. Or, perhaps, even an old one.
These freaks know exactly what they are doing. And they know exactly what they have done. But they would be powerless if not for the dupes.
Indeed. The recently announced articles of impeachment by congressional Democrats, the complete collapse of the corporate mainstream media into Fake News, and the cries of vindication over the Horowitz Report – all represent the revenge of the illusionists by the whim of the deluded. It’s like watching a clown car fueled by the vapid dreams of fools driving over a cliff.
A reader of my blog e-mailed me an article whereby the author phrased it thusly:
While some are waking up to this reality the vast swath of those self-described progressives and liberals are oblivious. Thus, the socialist radicals have power far beyond their numbers.
In other words, those in power and their minions know full well what they are doing and the rest of America is a bunch of f*cking idiots.
Therefore the Kavanaugh-ification of American politics will continue. And, as the nation further declines. Those on the Political Left have progressively politicized, polarized, and pulverized every institution in the United States.
And everything they touch sours.
As Horowitz has proven in his report, the DoJ and FBI were weaponized against a presidential candidate and the FISA process was undermined completely.
Of course John Durham will demonstrate that the U.S. Intelligence agencies utilized foreign agents to undermine a domestic election and, later, a U.S. president. According to Attorney General Barr, we won’t know the exact results of Durham’s investigation until late spring or early summer 2020.
The Democrats in the U.S. House have not only raped the whistleblower statute and protections, but it has turned presidential impeachment into a common political ploy.
Today, House Intelligence Chairman Adam Schiff not only employs the power of the surveillance state to smear his colleagues and press his political agenda, he has set a number of dangerous precedents by “unmasking” his political rivals in an effort to smear them with innuendo.
With the release of the House Intelligence Committee’s impeachment report this week, we learned that Rudolph Giuliani and his corrupt Ukrainian pal Lev Parnas, whose metadata Schiff had legally subpoenaed, were also exchanging calls with former The Hill columnist John Solomon, ranking Intelligence Republican Devin Nunes and the president’s personal attorney Jay Sekulow.
All the while, the mainstream media spouts lie after lie after lie; U.S. elections have been undermined by falsehoods and f*ckery; and as tech giants censor and spin in ways that would cause Orwell to blush in his grave – if only because Epstein didn’t kill himself.
The freaks hide behind electronic spells as the wizards push buttons and pull levers from behind their curtains. Crossfire Hurricane, the Russian election hacking psyop, the Mueller Report, and now the 2019 Ukrainegate Impeach-a-palooza are illusions sold by wizards who know what they are doing to the dolts who have provided them with power.
It could be that history will reveal the election of President Donald J. Trump as the “bleeding of the brake lines before the big stop”. And, it doesn’t matter if he is real, being used unwittingly, or is a wizard himself because either…
1.) The U.S. economy will crash before November 3, 2020 and whatever Leftist Loon inhabits the white house will soon deliver socialist hell
Or
2.) Trump will win and the economy will implode followed by a dollar crash and the remainder of his second term will be devastated by economic hell, war, and societal breakdown.
In either scenario, the Land of Oz will be begging for a new global order, and even more powerful wizardry, by 2024.
Order out of chaos.
America is an empire of debt and slavery is rooted in economics. And the collapse of the everything bubble (i.e USD) is when the real magic will begin.
Until then, however, the technocracy thrives, convenience is monopolized and sold, and power is consolidated.
To Calm Markets, NY Fed Announces New Heads Of The Plunge Protection Team
Zoltan Pozsar “doomsday” report predicting that the Fed is about to lose control over short-term interest rates due to a reserve shortage, resulting in a repo market crisis, surging bond yields and a stock market crash, managed to do something few others have achieved: it caused a full-blown Fed panic.
The result was not only the earlier announcement that the NY Fed would inject over $500 billion in liquidity over the next month to avoid said repo crisis, which as we calculated would blow out the Fed’s above $4.5 trillion to a new all time high…
… but the Fed also remembered that in order to restore confidence that it knows what it is doing to prevent a year-end funding crisis, it has to actually staff the New York Fed’s Market Desk, also known as the Plunge Protection Team, which as a reminder, lost its two top traders in May when both the head of the PPT, Simon Potter, and the head of the Financial Services Group, Richard Dzina, unexpectedly quit as a result of a conflict with the new, and utterly clueless, head of the NY Fed, John Williams.
Simon Potter
And so, just minutes after the NY Fed’s announcement of its gargantuan, $500BN liquidity injection, the NY Fed – in scrambling to prove to markets that it is taking the year-end panic seriously – also announced a new senior leadership for its Markets and Financial Services Groups, as follows:
Daleep Singh has been named Executive Vice President and Head of the Markets Group;
Lorie K. Logan has been named Executive Vice President and Manager of the System Open Market Account (SOMA)
Christopher D. Armstrong has been named Executive Vice President and Head of the Financial Services Group.
“After an extensive and thorough search, we selected three great leaders to head these mission-critical functions. While quite distinct in their experience and backgrounds, the three share several essential attributes. In addition to unmatched expertise and knowledge, they are visionary and collaborative leaders who have track records of inspiring, supporting and developing outstanding teams,” said John C. Williams, President and Chief Executive Officer of the New York Fed.
“I have had the pleasure of working with Lorie and Chris for some time, and am deeply impressed with their professionalism and leadership. Chris stepped in as interim head of the group and quickly gained the respect of his colleagues within the New York Fed and across the System. Lorie, in her role as SOMA Manager pro tem, was steadfast during the recent period of volatility in the repo market, helping the FOMC develop and execute a highly effective plan of action. Daleep has a clear dedication to public service, a record of success, and proven leadership skills, which make him the ideal candidate for this role. I look forward to working with all three in their new roles,” Mr. Williams concluded.
So who are these new masters of the centrally-planned markets? Here are their bios:
Daleep Singh
As Head of the Markets Group, Mr. Singh will join the New York Fed in February 2020 and be responsible for the group’s entire portfolio, with a focus on bringing together policy, strategy, analysis and operational effectiveness. As a member of the Executive Committee, he will also play a key role in developing and implementing the New York Fed’s strategic direction and priorities. Mr. Singh is currently Senior Partner and Chief U.S. Economist at SPX Capital, a global investment firm. Previously, he worked at the U.S. Department of the Treasury from 2011 to 2017, serving as Acting Assistant Secretary for Financial Markets and Deputy Assistant Secretary for International Affairs, helping to shape the Department’s crisis response to Ukraine, Russia, Greece, and Puerto Rico. Mr. Singh also directed the Treasury’s Markets Room, which provided real-time and thematic analysis for senior Administration officials.
Lorie K. Logan
As SOMA Manager, effective January 1, 2020, Ms. Logan will be responsible for implementing monetary policy in accordance with the directives of the Federal Open Market Committee (FOMC). She will continue to draw on her deep knowledge of capital markets, market operations, and related policy to provide expert analysis and advice to the FOMC. Ms. Logan has more than twenty years of experience at the New York Fed, serving since 2014 as the Deputy SOMA Manager. In that role, she helped to develop the Federal Reserve’s policy normalization tools, including the establishment of the overnight reverse repo facility, and the long-run monetary policy implementation framework. Ms. Logan played a prominent role in the development and implementation of the Federal Reserve’s crisis-era policies to mitigate systemic risks to the financial system.
Christopher D. Armstrong
As Head of the Financial Services Group, effective January 1, 2020, Mr. Armstrong will be responsible for the suite of products offered by the Wholesale Product Office, which manages the Fedwire Funds Service, the Fedwire Securities Service, and the National Settlement Service on behalf of the Federal Reserve System. He will also be responsible for the New York Fed’s Cash Operations, and serve on the Bank’s Executive Committee. Mr. Armstrong joined the New York Fed more than ten years ago as part of the Cash and Custody services team within the Financial Services Group, drawing on broad industry experience and an education in mechanical engineering to help transform financial services in the Bank. Prior to joining the Bank, Mr. Armstrong worked at Raytheon Integrated Defense Systems, where he held several management roles.
And now traders can be comforted that between new heads of the market formerly known as “free”, and the $500 billion in liquidity injected over the next 30 days, not even one red candle will be allowed well into 2020…
Trade-Deal Rumorgasm Sparks Stock Meltup To Record Highs, Bond Bloodbath
It’s a deal… again…
Oct 11: NEWS “Trump says the US has come to a substantial phase one deal with China”
Dec 12: RUMOR *TRUMP: GETTING VERY CLOSE TO A BIG DEAL WITH CHINA
Dec 12: RUMOR *U.S. NEGOTIATORS OFFER TO CANCEL NEW DEC. 15 CHINA TARIFFS: DJ
Dec 12: NEWS/RUMOR “Trump says he and China reached a ‘phase one’ trade deal in principle”
And that was good enough for new record highs for stocks (for a brief second, Nasdaq was back to unchanged after the early trade deal rumors faded, but that didn’t last)…
After each surge, algos dragged stocks back to VWAP but the last headline barrage sparked buying into the close…
And there’s only one clip that works for today…
Yuan exploded nine handles higher to four-month highs…
Source: Bloomberg
Sending expectations for a trade deal soaring…
Source: Bloomberg
30Y Yields soared the most in 3 months today…
Source: Bloomberg
Since the “phase one deal” was agreed again on Oct 11th, stocks are alone in their exuberance…
Source: Bloomberg
Cyclicals, as expected, dramatically outperformed…
Source: Bloomberg
Bank stocks soared as rates spiked and the yield curve steepened…
Source: Bloomberg
VIX was clubbed back to a 13 handle…
And as Equity protection costs plunged, so did credit with HY plunging back below 300bps…
Source: Bloomberg
Bond yields smashed higher on the initial rumors – dramatically worse reactions than for gold and stocks…
Source: Bloomberg
Treasury yields exploded higher on the day – all higher on the week now…
Source: Bloomberg
Notably 30Y Yields staled at the pre-Oct-FOMC levels as a strong auction stalled the carnage
Source: Bloomberg
The yield curve steepened dramatically…
Source: Bloomberg
The Dollar ended the day marginally higher after a huge rollercoaster…
Source: Bloomberg
Investors in sterling are the most hedged since the referendum…
Source: Bloomberg
USDJPY surged…
Source: Bloomberg
Yuan’s huge spike broke it back above its 200DMA…
Source: Bloomberg
Cryptos rallied on the day but remain lower on the week…
Source: Bloomberg
Copper and Crude soared on the trade rumors, PMs dumped, but silver managed to bounce back…
Source: Bloomberg
Gold was chaotic today – surging above payrolls and running stops before the trade rumors hit and it collapsed…
And while gold was down, silver managed to hold on to decent gains…
Gold also tumbled in yuan terms…
Source: Bloomberg
Finally, as the S&P 500 Index pushes to record highs, trading volume is drying up in typical fashion for the final weeks of a year…
Source: Bloomberg
As Bloomberg notes, in another sign of a slowdown, the SPDR S&P 500 ETF Trust has seen fewer than 100 million shares traded for 42 straight days, the longest stretch since 2007.
Do you believe in miracles (and coincidences)? 2019=2013
