Every time we’ve reached this level in history, a recession followed shortly thereafter.
As Gluskin Sheff’s David Rosenberg notes“there’s no turning back from this level.”
“Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, one by one.” – Charles MacKay, Extraordinary Popular Delusions and the Madness of Crowds
We have already experienced the longest economic expansion in history.
As Ron Stoeferle notes, the 12-mo change in business activity by country “is looking very very worrisome.”
“In reading The History of Nations, we find that, like individuals, they have their whims and their peculiarities, their seasons of excitement and recklessness, when they care not what they do. We find that whole communities suddenly fix their minds upon one object and go mad in its pursuit; that millions of people become simultaneously impressed with one delusion, and run after it, till their attention is caught by some new folly more captivating than the first.” – Charles MacKay, Extraordinary Popular Delusions and the Madness of Crowds
We will enter this next recession with the highest level of debt in history and a Fed with very few bullets left in their gun.
So now must be the best time ever to buy stocks at all-time highs, when every valuation reading points to a 50% decline.
Go for it baby!!! And don’t forget to buy on margin.
via ZeroHedge News https://ift.tt/2lNoJMN Tyler Durden
If Trump is Tariff-Man, then Powell is Rocket-Man, sending stocks to the moon Alice (but today his chatter could not hold markets green)…
Trump tamped down stocks by raising concerns about the China trade truce, Powell promised to save the world in a speech in Paris… but it wasn’t enough…
S&P broke a 5-day win streak but Nasdaq was worst on the day with Trannies soaring…
FANG Stocks appears to have hit the wall again…
German stocks dominated Europe’s continued dip-buying bounce…
But Chinese stocks went nowhere after Monday’s mysterious panic bid…
Credit markets decompressed notably on the day (though rallied back a little in the afternoon)…
Treasury yields were up 2-3bps across the curve today but 30Y remains lower (in yield) on the week…
The dollar surged back up near last week’s Powell comments levels…
Cryptos were clubbed today as the Facebook Libra hearings raised the specter of further regulatory panic among US lawmakers…Ethereum has bloodbath’d down almost 30% since Friday…
With Bitcoin battered back below $10k, near one-month lows…
Big day for silver as crude prices were pummeled…
Oil prices plummeted as positive words from Pompeo on Iran derisked any geopol premium in crude…
Gold was down on the day but futures remained above $1400…
Silver is dramatically outperforming gold (after the ratio hit 26 year highs)
Finally, Deutsche is not Lehman, ok!
And Tesla is not Enron.
And 2019 is not 1998…
Trade accordingly.
via ZeroHedge News https://ift.tt/2jR47CE Tyler Durden
A Fox 10 host in Phoenix whose bosses asked her to hide her account on “right-wing” social media platform Parler because a left-wing outlet might notice it had a terse response; “F*ck them”.
Fox 10’s Emmy Award-winning anchor Kari Lake dropped the f-bomb on camera as she was preparing to do a Facebook Live broadcast and the clip was subsequently leaked online.
The video shows her co-host John Hook suggesting that station managers wanted her to hide her Parler account because of potential bad press from left-wing outlet the Phoenix New Times.
“I think they just think it’s been branded as a far-right kind of place,” Hook said, to which Lake responded, “Jesus”.
“So they don’t want you tied in with anything like that, where you’re going to get blowback from the New Times or whoever it is,” said Hook.
“Fuck them. They’re 20-year-old dopes,” Lake responded. “That’s a rag for selling marijuana ads”.
“I know,” Hook said. “But then you’re in a position where they’ve gotta explain it or you’ve gotta explain it”.
“I’m reaching people,” Lake said.
The issue was raised after FTV Live published an article revealing that Lake maintained an account on Parler (as if this was some terribly evil deed).
After her outburst, Lake was not on air in her usual 5pm time slot. Her Parler account is still active.
* * *
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via ZeroHedge News https://ift.tt/2jPntIj Tyler Durden
Escalation appears back on in the Persian Gulf as the question of the “disappeared” UAE tanker remains unanswered, and as US intelligence officials point the finger at Iran’s IRGC for “forcing” the tanker into Iranian waters just before its tracking transponder mysteriously switched off over two days ago.
And now Britain has announced it will send a third warship and a navy tanker to the gulf, even though the Ministry of Defence is downplaying tensions with Iran. “These long-planned movements do not reflect an escalation in the UK posture in the region and are routine,” the MoD said as it announced that the HMS Duncan, a type 45 frigate, is transiting to the region for general maritime security, also as the currently deployed HMS Montrose undergoes maintenance. The HMS Kent is also said to have been freshly deployed, though it will take much longer to reach the Middle East.
Prime Minister Theresa May’s office said Tuesday that Britain wanted to avoid escalation. “Escalation in the Gulf is not in anyone’s interests and we have repeatedly stressed that to the Iranians,” May’s spokesman, James Slack, told reporters in London. However, Iranian officials had just days ago warned Britain to avoid sending more warships, saying it’s playing a “dangerous game” in following the US lead of military build-up.
HMS Duncan file photo: Royal Navy
The prime minister’s office remarks were in response to Iran’s supreme leader warning on Tuesday that Iran’s military is ready to retaliate if the UK doesn’t immediately release its tanker which was boarded and detained by Royal Marines off Gibraltar earlier this month. The UK had accused the Panamanian-flagged vessel carrying 2 million barrels of Iranian oil of seeking to violate EU oil sanctions on Syria. Tehran has accused Britain and its allies, chiefly the US, of “piracy”.
“The vicious British… have committed piracy and stolen our ship… God willing, the Islamic Republic will not leave these vicious acts unanswered,” Khamenei said in a speech in Tehran on state television.
He also pledged to “certainly continue” to renege on Iran’s commitments under the 2015 nuclear accord, calling out Europe for failing to protect Iran from US sanctions and failing to meet its own terms under the JCPOA:
“You did not carry out a single one (of your commitments), why do you want us to stick to our commitments?” Khamenei said.
“We have just started to decrease our commitments (in the deal) and this process will certainly continue,” he added.
A month ago Britain announced it would deploy 100 Royal Marines to the Persian Gulf in order to form a “rapid reaction force” to protect UK assets in the region.
UK deployed 100 elite Royal Marines to the Gulf last month following tanker attackers. File image.
The Sunday Times had described the deployment, which is likely already on the ground at this point, as follows: “Military sources said that 100 marines from 42 Commando, based near Plymouth, will form a rapid reaction force, Special Purpose Task Group 19. They will operate from ships patrolling the region from Britain’s new naval base in Bahrain.”
So ultimately despite PM May’s claims that Britain is attempting to deescalate, wanting to avoid conflict with Iran, by all appearances the UK is certainly escalating its force build-up in the region alongside its number one ally the United States.
via ZeroHedge News https://ift.tt/2jL3dr6 Tyler Durden
CNN has published an unbelievably brazen and dishonest smear piece on Julian Assange, easily the most egregious article of its kind since the notoriously bogus Assange-Manafort report by The Guardian last year. It contains none of the “exclusive” documents which it claims substantiate its smears, relying solely on vague unsubstantiated assertions and easily debunked lies to paint the WikiLeaks founder in a negative light.
And let’s be clear right off the bat, it is most certainly a smear piece. The article, titled “Exclusive: Security reports reveal how Assange turned an embassy into a command post for election meddling”, admits that it exists for the sole purpose of tarnishing Assange’s reputation when it reports, with no evidence whatsoever, that while at the Ecuadorian embassy Assange once “smeared feces on the walls out of anger.” Not “reportedly”. Not “the Ecuadorian government claims.” CNN reported it as a fact, as an event that is known to have happened. This is journalistic malpractice, and it isn’t an accident.
Whenever you see any “news” report citing this claim, you are witnessing a standard smear tactic of the plutocratic media. Whenever you see them citing this claim as a concrete, verified fact, you are witnessing an especially aggressive and deliberate psyop. The Ecuadorian embassy was easily the most-surveilled building in the world during Assange’s stay there, and the Ecuadorian government has leaked photos of Assange’s living quarters to the media in an attempt to paint him as a messy houseguest in need of eviction, so if the “feces on the walls” event had ever transpired you would have seen photos of it, whether you wanted to or not. It never happened.
SCOOP: New documents obtained exclusively by CNN reveal that Assange received in-person deliveries, potentially of hacked materials related to the 2016 election, during a series of suspicious meetings at the Ecuadorian Embassy in London. w/ @kguerrerocnnhttps://t.co/OqC9GBsIKl
“New documents obtained exclusively by CNN reveal that WikiLeaks founder Julian Assange received in-person deliveries, potentially of hacked materials related to the 2016 US election, during a series of suspicious meetings at the Ecuadorian Embassy in London,” the article begins.
In its very first sentence the article invalidates all the claims which follow it, because its use of the word “potentially” means that none of the documents CNN purports to have contain any actual evidence. It’s worth noting at this time that there is to this day not one shred of publicly available evidence that any of the Democratic Party emails published by WikiLeaks in 2016 were in fact “hacked” at all, and could very well have been the result of a leak as asserted by former British ambassador Craig Murray, who claims to have inside knowledge on the matter.
The glaring plot holes in the Mueller report’s assertions about Russia being the source of the 2016 WikiLeaks drops have already been ripped wide open by journalist Aaron Maté’s meticulous analysis of the report’s timeline in an article accurately titled “CrowdStrikeOut: Mueller’s Own Report Undercuts Its Core Russia-Meddling Claims”. The CNN smear piece, which claims to “add a new dimension to the Mueller report”, is entirely relying on this porous timeline for its reporting. Plot holes include the fact that Mueller claims (and CNN repeats) that the Russians transferred the emails to WikiLeaks on or around July 14, which Maté notes is “a full month after Assange publicly announced that he had them.”
CNN kicks off its smear piece with the inflammatory claim that “Assange met with Russians and world-class hackers at critical moments”, mentioning both “Russians” and “hackers” in the same breath in an attempt to give the impression that the two are related. It’s not until paragraph 43 and 46, long after most people have stopped reading, that the articles authors bother to inform their readers that the “hackers” in question are German and have no established connection to the Russian government whatsoever. The “Russians” counted among Assange’s scores of visitors consist of RT staff, who have always consistently reported on WikiLeaks, and a “Russian national” about whom almost nothing is known.
The article falsely labels Assange a “hacker”, a defamatory claim the mass media circulates whenever it wants to tarnish Assange’s reputation. Assange, of course, is a publisher. WikiLeaks publishes materials which are given to it, it doesn’t “hack” them.
That is a LIE that’s been debunked over and over. We published ONE article about the emails that were RELEASED already, just not TWEETED about yet, because WikiLeaks had been releasing them like clockwork and we paid attention. It’s called journalism, they should try it sometime.
CNN also repeats the long-debunked lie that RT “published articles detailing the new batches of emails before WikiLeaks officially released them” during the 2016 election, citing no evidence because this never happened. RT reported on a WikiLeaks release in October 2016 after it had been published by WikiLeaks but before the WikiLeaks Twitter account had tweeted about it, and western propagandists willfully conflated WikiLeaks publications with tweets from the WikiLeaks Twitter account in order to make it look like RT had insider knowledge about the publications.
In reality, RT was simply watching the WikiLeaks site closely for new releases in order to get an early scoop before other outlets, because Podesta email leaks had been dropping regularly.
“That is a LIE that’s been debunked over and over,” tweeted RT America editor Nebojša Malić in response to the smear. “We published ONE article about the emails that were RELEASED already, just not TWEETED about yet, because WikiLeaks had been releasing them like clockwork and we paid attention. It’s called journalism, they should try it sometime.”
“Yes that is fake news,” tweeted RT’s Ivor Crotty. “I was the editor on the team that monitored wikileaks and by Podesta 6 we knew they tweeted at 9am EST each day (1pm Dublin) — so we checked the database by reverse searching and discovered a new dump, tweeted about it, and the conspiracy theorists jumped.”
“RT already addressed this in 2016, convincingly if you read the sequence of events they lay out: the Podesta emails appeared on the WikiLeaks website before WikiLeaks sent a tweet about it,” Maté tweeted at CNN’s Marshall Cohen. “Ignoring that allows for the conspiracy theory you propose. It’s ridiculous to suggest that RT-Wikileaks ‘were coordinating behind the scenes’ based on the fact that RT tweeted about the Podesta emails AFTER they appeared on WL’s site, but BEFORE WL tweeted about them. You’re implicating RT in a conspiracy… for doing journalism.”
It’s not possible to research the “RT had advance knowledge of WikiLeaks drops” conspiracy theory without running across articles which debunked it at the time, so the article’s authors were likely either knowingly lying or taking dictation from someone who was.
“Spanish newspaper El Pais on July 9: ‘Spanish security company spied on Julian Assange’s meetings with lawyers’. Add little security state propaganda and 6 days later you get from CNN: ‘How Julian Assange turned an embassy into command post for election meddling’,” notedShadowproof managing editor Kevin Gosztola in response to the CNN smear, a reminder of how a little narrative tweaking can turn a story on its head in support of the powerful.
This would be the same CNN who told its viewers that it’s against the law to read WikiLeaks, with Democratic Party prince Chris Cuomo lying “Remember, it’s illegal to possess these stolen documents; it’s different for the media, so everything you learn about this you’re learning from us.” The same CNN which falsely reported that Assange is a pedophile not once, but twice. The same CNN which has been caught blatantly lying in its Russiagate coverage, which has had to fire journalists for misreporting Russiagate in a media environment where that almost never happens with Russia stories, which has deleted evidence of its journalistic malpracticeregarding Russiagate from the internet without retraction or apology.
So this latest attempt to tarnish Julian Assange’s reputation from CNN is not surprising. Nor is it surprising that the article contains exactly zero of the “exclusive documents” which it says validate its claims and insinuations. Nor is it surprising that CNN is using invisible evidence which almost certainly came into its hands through a government agency to give weight to its smear. But the sheer volume of disinformation and deceit they were able to pack into one single article this time around was just jaw-dropping. Even for CNN.
* * *
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Things are getting uglier by the second in American politics and the sheer awfulness of the current moment perfectly illustrates why I’m libertarian. Do you really want to live in a world where you’re constantly living inside either Donald Trump’s mind or that of Rep. Alexandria Ocasio-Cortez’s (D–N.Y.) democratic socialist “squad”?
Our lives are too short, too fleeting, too important to spend all of our waking hours engaged in the systematic organization of hatreds, which is as good a working definition of politics as there is. There’s ultimately not a lot of wiggle room between Trumpian conservatism, which demands complete reverence for the Donald and includes bolder and bolder threats to stifle free speech along with free trade, and Ocasio-Cortez’s Green New Dealism, which explicitly uses the totalist regimentation of all aspects of American life during World War II as its model. If I wanted to deal with politics all the time, I’d move to a totalitarian country already.
Libertarians are not anarchists but believers in limited government. Certain rights cannot be voted away but we believe that there are areas of life where consensus legitimately rules and that policy should be set by the group rather than the individual. Precisely because politics is a form of force and coercion, though, the parts of our lives governed by consensus should be as small as possible, limited to essential services such as basic infrastructure, law enforcement, safety standards, welfare for the indigent, and some education. The government should treat all people as individuals and all individuals as equal before the law. Over the years, I’ve become less dogmatic about exactly how little or how much the state should do, preferring instead to talk about libertarian as an adjective or a pre-political sensibility, “an outlook that privileges things such as autonomy, open-mindedness, pluralism, tolerance, innovation, and voluntary cooperation over forced participation in as many parts of life as possible.”
Where you and I will draw those lines will likely differ depending on a variety of things and, by all means, let’s have fierce yet civil debates over the scope and efficacy of specific policies and actions. But let’s also avoid the shit show currently on display. Leading the parade of fools is, of course, President Trump, whose recent tweets are not simply racist or in poor taste but deeply un-American.
Where exactly does he get off telling people that if they don’t like everything about the United States, they should leave? That only one of the four Democratic representatives he was originally attacking was actually born in a foreign country underscores his lack of cognitive functioning and the deep-seated nativism of his mindset. Even if you’re born here, he’s saying, you’re not really American unless you look like him.
So interesting to see “Progressive” Democrat Congresswomen, who originally came from countries whose governments are a complete and total catastrophe, the worst, most corrupt and inept anywhere in the world (if they even have a functioning government at all), now loudly……
….and viciously telling the people of the United States, the greatest and most powerful Nation on earth, how our government is to be run. Why don’t they go back and help fix the totally broken and crime infested places from which they came. Then come back and show us how….
More importantly, Trump’s aggressively banal jingoism stands in direct and obvious contradiction to the origins of the United States, both as colonial havens populated by religious dissenters and people seeking economic opportunity, and later as a breakaway republic from an oppressive government. “Our Country is Free, Beautiful and Very Successful. If you hate our Country, or if you are not happy here, you can leave,” the president counseled today, as if exit is the only legitimate option when it comes to lobbying for political change.
If he read books, I’d suggest that Trump pick up a copy of Albert O. Hirschman’s 1970 treatise on “responses to declines in firms, organizations, and states.” Exit, Voice, and Loyalty discusses the different ways individuals can effect change. Leaving to go elsewhere—exit—is indeed an option, but so is basically sucking it up and becoming an uncritical organization man (loyalty), or complaining and working to change the system (voice). Trump’s basic argument is reductio ad Archie Bunkerism—love it or leave it. It’s not worth engaging seriously and indeed, the only reason he isn’t being more roundly mocked is that he’s wrapped his dumb canard in ugly, divisive language that participates in long traditions of racial and ethnic exclusion.
Our Country is Free, Beautiful and Very Successful. If you hate our Country, or if you are not happy here, you can leave!
By the same token, the Ocasio-Cortez squad offers no hope of escaping politics, either. Instead, it seeks to fully regulate expression in the name of political purposes. One of its members, Rep. Ayanna Pressley (D–Mass.), effectively channels Trump’s “you’re with us or against us” mindset when she declares, “We don’t need any more brown faces that don’t want to be a brown voice. We don’t need black faces that don’t want to be a black voice. We don’t need Muslims that don’t want to be a Muslim voice. We don’t need queers that don’t want to be a queer voice.”
Rep Ayanna Pressley (D-MA) “We don’t need any more brown faces that don’t want to be a brown voice. We don’t need black faces that don’t want to be a black voice. We don’t need Muslims that don’t want to be a Muslim voice. We don’t need queers that don’t want to be a queer voice” pic.twitter.com/2NIj5Vvcor
The unwillingness of Ocasio-Cortez to acknowledge good-faith disagreements even with her political allies—she’s accused Rep. Nancy Pelosi (D–Calif.) of “explicitly singling out newly elected women of color,” insinuating that the Democratic Speaker of the House is racist like the president—is a tactic used by Trump and his supporters.
This is politics at its absolute worst. It helps explain why the long-term trend of Americans refusing to identify as a Democrat or a Republican proceeds apace. Last month, Gallup found just 27 percent of respondents admitting that they are Democrats and only 26 percent admitting that they are Republicans. Each of those numbers is at or near historic lows.
Who can blame us, really? Especially when there is a legitimate alternative to reducing your entire existence to political grudge matches between repellent teams who explicitly tell you to check your brain at the door? “The Libertarian Moment” didn’t materialize when Matt Welch and I first coined the phrase in 2008, nor did it materialize when it was being talked about in the pages of The New York Times Magazine, that’s for sure. But the idea of living in a world beyond politics, where we can agree to disagree about how to live most of our lives, is looking better and better all the time.
from Latest – Reason.com https://ift.tt/2jNEZfU
via IFTTT
There are few mistakes more embarrassing for a trader than the so-called “fat finger”. For those unfamiliar with the industry slang, a fat finger happens when a trader accidentally presses the wrong button, increasing the size of a trade by an order of magnitude, or several orders of magnitude.
In what could be described as a milestone for the still-maturing cryptocurrency market, an embarrassing ‘fat finger’ mistake sowed chaos in the crypto market over the weekend. After the company that manages the stablecoin Tether accidentally doubled the number of tokens in circulation while processing a routine transfer, the price of bitcoin dropped 12% in mere minutes as the snafu spooked the market, according to WSJ.
Here’s an explanation of how the mix-up unfolded, courtesy of CoinTelegraph.
Whale Alert – a Twitter account dedicated to reporting large cryptocurrency transactions – noted that 50 million USDT tokens were transferred from cryptocurrency exchange Poloniex to the Tether Treasury via the Omni protocol on the Bitcoin (BTC) blockchain.
The account subsequently reported that Tether Treasury minted 5 billion USDT tokens on the Tron blockchain, after which it burned them.
Then, Tether minted another 50 million USDT on the same chain, burned another 4.5 billion USDT, and finally transferred 50 million Tron-based USDT tokens to a wallet presumably belonging to Poloniex.
In a nutshell, what happened was Tether (the company that manages the stable coin) was helping crypto exchange Poloniex conduct what’s called a “chain swap” – moving tether tokens from one crypto token’s blockchain to another. At some point during this process, an employee at tether accidentally created $5 billion of the tokens (which are supposed to be 1:1 exchange value to the dollar) instead of $50 million. After realizing their mistake, they went back and ‘burned’ (read: deleted) the extra tokens.
Because of the error, the number of tether tokens in circulation doubled very suddenly, from $3.9 billion to $8.9 billion. When the tokens were deleted by the Tether Treasury, bitcoin tumbled.
Tether’s impact on the price of bitcoin has long been controversial. In a research paper published last year, academics from the University of Texas documented how they claimed Tether was being used to manipulate the price of bitcoin.
Earlier this year, Ben Munster of Decrypt.co documented how the creation of $600 million in tether corresponded with a jump in the price of bitcoin from $8,500 to $11,000.
Paolo Ardino, the CTO of Bitfinex and Tether, offered a kind of half-hearted non-apology for the chaos unleashed by one careless employee.
Unfortunately we have to play with different toolchains across multiple blochains and sometimes issues happen. We’re working anyway to prevent this from happening in the future. @Tether_tohttps://t.co/QxAF0QorY5
Things are getting uglier by the second in American politics and the sheer awfulness of the current moment perfectly illustrates why I’m libertarian. Do you really want to live in a world where you’re constantly living inside either Donald Trump’s mind or that of Rep. Alexandria Ocasio-Cortez’s (D–N.Y.) democratic socialist “squad”?
Our lives are too short, too fleeting, too important to spend all of our waking hours engaged in the systematic organization of hatreds, which is as good a working definition of politics as there is. There’s ultimately not a lot of wiggle room between Trumpian conservatism, which demands complete reverence for the Donald and includes bolder and bolder threats to stifle free speech along with free trade, and Ocasio-Cortez’s Green New Dealism, which explicitly uses the totalist regimentation of all aspects of American life during World War II as its model. If I wanted to deal with politics all the time, I’d move to a totalitarian country already.
Libertarians are not anarchists but believers in limited government. Certain rights cannot be voted away but we believe that there are areas of life where consensus legitimately rules and that policy should be set by the group rather than the individual. Precisely because politics is a form of force and coercion, though, the parts of our lives governed by consensus should be as small as possible, limited to essential services such as basic infrastructure, law enforcement, safety standards, welfare for the indigent, and some education. The government should treat all people as individuals and all individuals as equal before the law. Over the years, I’ve become less dogmatic about exactly how little or how much the state should do, preferring instead to talk about libertarian as an adjective or a pre-political sensibility, “an outlook that privileges things such as autonomy, open-mindedness, pluralism, tolerance, innovation, and voluntary cooperation over forced participation in as many parts of life as possible.”
Where you and I will draw those lines will likely differ depending on a variety of things and, by all means, let’s have fierce yet civil debates over the scope and efficacy of specific policies and actions. But let’s also avoid the shit show currently on display. Leading the parade of fools is, of course, President Trump, whose recent tweets are not simply racist or in poor taste but deeply un-American.
Where exactly does he get off telling people that if they don’t like everything about the United States, they should leave? That only one of the four Democratic representatives he was originally attacking was actually born in a foreign country underscores his lack of cognitive functioning and the deep-seated nativism of his mindset. Even if you’re born here, he’s saying, you’re not really American unless you look like him.
So interesting to see “Progressive” Democrat Congresswomen, who originally came from countries whose governments are a complete and total catastrophe, the worst, most corrupt and inept anywhere in the world (if they even have a functioning government at all), now loudly……
….and viciously telling the people of the United States, the greatest and most powerful Nation on earth, how our government is to be run. Why don’t they go back and help fix the totally broken and crime infested places from which they came. Then come back and show us how….
More importantly, Trump’s aggressively banal jingoism stands in direct and obvious contradiction to the origins of the United States, both as colonial havens populated by religious dissenters and people seeking economic opportunity, and later as a breakaway republic from an oppressive government. “Our Country is Free, Beautiful and Very Successful. If you hate our Country, or if you are not happy here, you can leave,” the president counseled today, as if exit is the only legitimate option when it comes to lobbying for political change.
If he read books, I’d suggest that Trump pick up a copy of Albert O. Hirschman’s 1970 treatise on “responses to declines in firms, organizations, and states.” Exit, Voice, and Loyalty discusses the different ways individuals can effect change. Leaving to go elsewhere—exit—is indeed an option, but so is basically sucking it up and becoming an uncritical organization man (loyalty), or complaining and working to change the system (voice). Trump’s basic argument is reductio ad Archie Bunkerism—love it or leave it. It’s not worth engaging seriously and indeed, the only reason he isn’t being more roundly mocked is that he’s wrapped his dumb canard in ugly, divisive language that participates in long traditions of racial and ethnic exclusion.
Our Country is Free, Beautiful and Very Successful. If you hate our Country, or if you are not happy here, you can leave!
By the same token, the Ocasio-Cortez squad offers no hope of escaping politics, either. Instead, it seeks to fully regulate expression in the name of political purposes. One of its members, Rep. Ayanna Pressley (D–Mass.), effectively channels Trump’s “you’re with us or against us” mindset when she declares, “We don’t need any more brown faces that don’t want to be a brown voice. We don’t need black faces that don’t want to be a black voice. We don’t need Muslims that don’t want to be a Muslim voice. We don’t need queers that don’t want to be a queer voice.”
Rep Ayanna Pressley (D-MA) “We don’t need any more brown faces that don’t want to be a brown voice. We don’t need black faces that don’t want to be a black voice. We don’t need Muslims that don’t want to be a Muslim voice. We don’t need queers that don’t want to be a queer voice” pic.twitter.com/2NIj5Vvcor
The unwillingness of Ocasio-Cortez to acknowledge good-faith disagreements even with her political allies—she’s accused Rep. Nancy Pelosi (D–Calif.) of “explicitly singling out newly elected women of color,” insinuating that the Democratic Speaker of the House is racist like the president—is a tactic used by Trump and his supporters.
This is politics at its absolute worst. It helps explain why the long-term trend of Americans refusing to identify as a Democrat or a Republican proceeds apace. Last month, Gallup found just 27 percent of respondents admitting that they are Democrats and only 26 percent admitting that they are Republicans. Each of those numbers is at or near historic lows.
Who can blame us, really? Especially when there is a legitimate alternative to reducing your entire existence to political grudge matches between repellent teams who explicitly tell you to check your brain at the door? “The Libertarian Moment” didn’t materialize when Matt Welch and I first coined the phrase in 2008, nor did it materialize when it was being talked about in the pages of The New York Times Magazine, that’s for sure. But the idea of living in a world beyond politics, where we can agree to disagree about how to live most of our lives, is looking better and better all the time.
from Latest – Reason.com https://ift.tt/2jNEZfU
via IFTTT
He is apparently declaring a currency war on the rest of the world. Trump resents China and Europe cheapening the yuan and the euro against the dollar in order to help their exports and hurt ours.
He says it’s time for the U.S. to cheapen the dollar also. Trump has a point. If you put a 25% tariff on many Chinese exports to the U.S. (as Trump has done) or a 25% tariff on German cars exported to the U.S. (as Trump has threatened to do), it can be a powerful way to reduce the U.S. trade deficit and generate revenue for the U.S. Treasury.
But a trading partner can undo the effect of the tariff just by cheapening its currency.
Let’s say a Chinese-made cellphone costs $500 in the U.S. If you slap a 25% tariff on the imported phone, the immediate effect is to raise the price by $125.
A simple solution to tariffs is to devalue your currency by 20% against the dollar. Local currency costs do not change, but the cellphone now costs $400 when the local currency price is converted to U.S. dollars.
A 25% tariff on $400 results in a total cost of $500 — exactly the same as before the tariffs were imposed. Tariff costs have been converted into lower production costs through currency manipulation.
There’s only one problem with Trump’s currency war plan. There’s nothing new about it. The currency wars started in 2010 as described in my 2011 book, Currency Wars.
As soon as one country devalues, its trading partners devalue in retaliation and nothing is gained. It’s been described as a “race to the bottom.” Currency wars produce no winners, just continual devaluation until they are followed by trade wars.
That’s exactly what has happened in the global economy over the past 10 years. But the final step in the sequence is often shooting wars. That’s what happened leading up to WWII. Let’s hope the currency wars and trade wars don’t turn into shooting wars as they did in the 1930s.
Meanwhile, the Fed is a critical player in the currency war because it has a major influence on the dollar.
The world is waiting to see what it does at its policy meeting on July 31. There is almost no chance the Fed will raise rates. The choices are to cut rates or keep rates unchanged. The market is betting heavily on a rate cut, for what it’s worth.
If the Fed cuts rates, we’ll have to see how other central banks react. But the Fed has many factors to consider when it meets later this month…
For the past 10 years, Fed policy changes have been relatively straightforward to forecast, based on a simple model. The model said the Fed would raise rates consistently in 0.25% increments until rates are normalized around 4% (the amount needed to cut in case of recession).
The exceptions (where the Fed would “pause” on rate hikes) would occur when job creation is low or negative, markets are disorderly or strong disinflation threatens to turn to deflation. Markets certainly became disordered late last year, when the U.S. stock market nearly entered a bear market. And so the Fed paused.
None of those conditions apply today. Job creation is strong, markets are at all-time highs and disinflation is mild. But a new factor has entered the model, which is the fear of causing a recession.
Estimated growth for the second quarter of 2019 is 1.3% annualized, compared with 3.1% in the first quarter. Using the Fed’s own models (which are different from mine), the Fed is concerned that if they don’t cut rates, a market correction and recession may occur.
But if they do cut rates, inflation may result due to tight labor markets and higher costs due to tariffs.
This Fed decision will likely come down to the wire. Second-quarter GDP will be reported on July 26, and personal income and outlays will be reported on July 30. Both data points (and underlying inflation data) will be available right before the July 31 decision date.
Markets will cheer a rate cut and probably sell off if the Fed does not cut rates. But both the markets and the Fed itself will have to wait until the last possible minute before this conundrum is resolved.
And the world will be watching very closely.
The dollar price of gold has been on a roller-coaster ride for the past six years. But the past six weeks have been a turbocharged version of that. Investors should expect more of the same for reasons explained below.
The six-year story is the more important for investors and also the more frustrating. Gold staged an historic bull market rally from 1999 to 2011, going from about $250 per ounce to $1,900 per ounce, a 650% gain.
Then, gold nose-dived into a bear market from 2011 to 2015, falling to $1,050 per ounce in December 2015, a 45% crash from the peak and a 51% retracement of the 1999-2011 bull market. (Renowned investor Jim Rogers once told me that no commodity goes from a base price to the stratosphere without a 50% retracement along the way. Mission accomplished!)
During that precipitous decline after 2011, gold hit a level of $1,417 per ounce in August 2013. It was the last time gold would see a $1,400 per ounce handle until last month when gold briefly hit $1,440 per ounce on an intra-day basis. At last, the six-year trading range was broken. Better yet, gold hit $1,400 on the way up, not on the way down.
The range-bound trading from 2013 to 2019 was long and tiring for long-term gold investors. Gold had rallied to $1,380 per ounce in May 2014, $1,300 per ounce in January 2015, and $1,363 per ounce in July 2016 (a post-Brexit bounce).
But, for every rally there was a trough. Gold fell to $1,087 per ounce in August 2015 and $1,050 per ounce in December 2015. The bigger picture was that gold was trading in a range. The range was approximately $1,365 per ounce at the top and $1,050 per ounce at the bottom, with lots of ups and downs in between. Yet, nothing seemed capable of breaking gold out of that range.
The good news is that gold has now broken out to the upside. The $1,440 per ounce level is well within reach and the $1,400 per ounce level seems like a solid floor, despite occasional dips into $1,390 per ounce territory. Gold’s trading at $1,416 today.
More importantly, a new multi-year bull market has now emerged. Turning points from bear to bull markets (and vice versa) are not always recognized in real time because investors and analysts are too wedded to the old story to see that the new story has already started.
But, looking back it’s clear that the bear market ended in December 2015 at the $1,050 per ounce level and a new bull market, now in its fourth year, is solidly intact. The recent break-out to the $1,440 per ounce level is a strong 37% gain for the new bull market. This price break-out has far to run. (The 1971 – 1980 bull market gained over 2,100%, and the 1999 – 2011 bull market gained over 650%).
The price action over the past six weeks has been even wilder than the price action over the past six years. As late as May 29, 2019, gold was languishing at $1,280 per ounce. Then it took off like a rocket to $1,420 per ounce by June 25, 2019, an 11% gain in just four weeks.
Gold just as quickly backed-down to $1,382 per ounce on July 1, rallied back to $1,418 per ounce on July 3, and fell again to $1,398 per ounce on July 5. These daily price swings of 1.5% are the new normal in gold. Again, the good news is that the $1,400 per ounce floor seems intact.
What’s driving the new gold bull market?
From both a long-term and short-term perspective, there are three principal drivers: geopolitics, supply and demand, and Fed interest rate policy; (the dollar price of gold is just the inverse of dollar strength. A strong dollar = a lower dollar price of gold, and a weak dollar = a higher dollar price of gold. Fed rate policy determines if the dollar is strong or weak).
The first two factors have been driving the price of gold higher since 2015 and will continue to do so. Geopolitical hot spots (Korea, Crimea, Iran, Venezuela, China and Syria) remain unresolved and most are getting worse. Each flare-up drives a flight-to-safety that boosts gold along with Treasury notes.
The supply/demand situation remains favorable with Russia and China buying over 50 tons per month to build up their reserves while global mining output has been flat for five years.
The third factor, Fed policy, is the hardest to forecast and the most powerful on a day-to-day basis. The Fed has a policy rate-setting meeting on July 31. There is almost no chance the Fed will raise rates. The issue is whether they will cut rates or stand pat.
The case for cutting rates is strong. U.S. growth slowed in the second-quarter to 1.3% (according to the most recent estimate) from an annualized 3.1% in the first-quarter of 2019. Inflation continues to miss the Fed’s target of 2.0% year-over-year and has been declining recently. Trade war fears are adding to a global growth slowdown.
On the other hand, the June employment report showed strong job creation, continued wage gains, and increase labor force participation. All of those indicators correspond to higher future inflation under Fed models. The G20 summit between President Trump and President Xi of China led to a truce in the U.S.-China trade war and the prospect of continued talks to end the trade war.
In short, there’s plenty of data to support rate cuts or no cuts in July. The Fed is biding its time. Meanwhile, the market is highly uncertain. A good headline on trade results in a stronger dollar and weaker gold. The next day, a bad headline on growth results in a weaker dollar and stronger gold.
This dynamic explains the erratic up-and-down price movements of the past week. The dynamic is likely to continue right up until the July 31 Fed meeting in two weeks.
With so much uncertainty and volatility in the dollar price of gold lately, what is the prospect for a rally in precious metals prices and stocks that track them?
Right now, my models are telling us that the gold rally will continue regardless of the Fed’s action on July 31.
Expectations today are that the Fed will cut rates at the next FOMC meeting, but the probabilities are far from a sure thing. If the Fed cuts rates, the market will simply move its expectations of further rate cuts to the next FOMC meeting (September 18). The weak dollar/strong gold rally will continue.
If the Fed does not cut rates, gold may suffer a short-term drawdown, but markets will assume the Fed made a mistake. Expectations for a 50bp (0.5%) rate cut in September will start to build.
That new forward expectation will power gold higher just as surely as the missed July rate cut.
That covers gold. But what about silver?
Many investors assume there is a baseline silver/gold price ratio of 16:1. They look at the actual silver/gold price ratio of 100:1 and assume that silver is poised for a 600% rally to restore the 16:1 ratio. These same investors tend to blame “manipulation” for silver’s underperformance.
That analysis is almost entirely nonsense. There is no baseline silver/gold ratio. (The “16:1 ratio” is an historical legacy from silver mining lobbying in the late 19th century, a time of deflation, when farmers and miners were trying to ease the money supply by inflating the price of silver with a legislative link to gold.
The result was “bimetallism,” an early form of QE. The ratio had nothing to do with supply/demand, geology, or any other fundamental factor. Bimetallism failed and was replaced with a strict gold standard in 1900).
This does not mean there is no correlation between gold and silver prices. As Chart 1 below reveals, there is a moderately strong correlation between the two. The coefficient of determination (expressed as r2) is 0.9.
This means that over 80% of the movement in the price of silver can be explained by movements in the price of gold. The remaining silver price factors involve industrial demand unrelated to gold prices.
Chart 1
Recently, a huge gap has opened up between the rally in gold prices (shown in gold on Chart 1 with a right-hand scale) compared to silver prices (shown in grey on Chart 1 with a left-hand scale).
Given the historically high correlation between gold and silver price movements, and the recent lag in the silver rally, the analysis suggests that either gold will fall sharply or silver will rally sharply.
Since I have articulated the case for continued strength in gold prices, my expectation is that gold will continue to outpace silver.
Either way, both metals are heading higher.
via ZeroHedge News https://ift.tt/2lfswlq Tyler Durden
Here is some good news (for the global economy) that is surely bad news (for stock markets).
Saxobank’s global head of macroeconomic research, Christopher Dembik, confirms in his latest note, that the latest world trade data tend to confirm a stabilization in global trade growth, at least in the short term, mostly resulting from a positive base effect.
The CBP world trade volume is back to positive territory, though it remains very weak compared to levels reached last year. The three-month moving average was out at 0.4% year-on-year in April 2019 versus a lowest point reached this year at minus 0.4% in past February.
The next release of the CPB world trade monitor is scheduled for 25 July 2019.
Looking at more up-to-date trade data, especially weekly cost of freight proxies, the stabilization is more obvious.
After seasonal adjustment, the 20-day moving average of the Baltic Dry Index is likely to turn positive this week. The latest data released last week was out at minus 3% year-on-year. We also notice the same trend towards stabilization for the Harpex index, which is a good measure of trade in consumer goods.
However, there is a silver-lining for stock investors as Dembik warns that this stabilization may be short-lived as risk remain elevated due to the trade war, potential currency war and China’s slowdown that has not stopped yet.
In our view, weak global trade will continue to negatively weigh on growth in H2, despite more dovish central banks and upcoming global fiscal stimulus.
What a strange world we live in…
via ZeroHedge News https://ift.tt/2jNdD9I Tyler Durden
