In a Fed Staff working paper released over the weekend titled “Gauging the Ability of the FOMC to Respond to Future Recessions” and penned by deputy director of the division of research and statistics at the Fed, the author concludes that “simulations of the FRB/US model of a severe recession suggest that large-scale asset purchases and forward guidance about the future path of the federal funds rate should be able to provide enough additional accommodation to fully compensate for a more limited [ability] to cut short-term interest rates in most, but probably not all, circumstances.”

So far so good, however, there are some notable problems with the paper’s assumptions, as Citi head of G10 FX, Steven Englander, observes.

He writes that the paper’s basic framework is to take the standard US economic model used by the Fed, give it a negative shock big enough to push the unemployment rate up by 5 percentage points (big but not unprecedented over the last 50 years) and deploying the Fed’s policy rate, QE and forward guidance tools to see if they are adequate to get the economy back on track. Negative rates and helicopter money are not used.

The two simulations assume:

1. the economy is in equilibrium initially with inflation at 2%, r* at 1%, so equilibrium nominal fed funds is 3%
2. the economy is in equilibrium initially with inflation at 2%, r* at zero (secular stagnation) and equilibrium nominal fed funds at 2%

He compares three policy approaches. The first assumes a linear world where fed funds can go into negative territory but there is no breakdown in the structure of economic relationships. It is probably not a realistic view of policy ineffectiveness at negative rates, but it is mean to be a baseline. The second just takes fed funds down to zero and keeps it there long enough for unemployment to return to baseline.

The third takes fed funds down to zero and augments it with additional USD2trn of QE and forward guidance. A variation on the third policy response function doubles the amount of QE in the second simulation.

In other words, the Fed is already factoring in a scenario in which a shock to the economy leads to additional QE of either $2 trillion, or in a worst case scenario, $4 trillion, effectively doubling the current size of the Fed’s balance sheet.

He continues his critique of the Fed’s argument as follows:

In the simulations. QE and forward guidance take 10yr yields down 225-300 bps depending on the starting point for fed funds and whether you do $2 trillion or $4 trillion for QE. But that is not going to work very well if by design fed funds and 10yr yields can’t go below zero. And if expected rates are already low then forward guidance does not have much room. Fed official will gave to keep a straight face while saying they we will keep rates at zero … forever.

 

What makes it work is that QE and committing to low rates for longer gets the long rate down quickly and this compensates for the inability to take short rates down as far as you would want. In the unconstrained model, the maximum drop in short rates is almost 9 percentage points, almost twice as much as in the constrained model, but the QE/forward guidance  lower takes (and keeps) long rates 75bps lower than when the Fed takes rates to zero and stops. When the Fed is starting from 3% fed funds, the combo can almost entirely offset the zero constraint, but only if the full $4 trillion QE is brought to bear. Starting from 2%, QE of $2 trillion is not enough to get long rates down far or fast enough to offset the shock.

All of which brings Englander to the following stunning conclusion:

I would have rewritten the conclusion as: “large-scale asset purchases and forward guidance about the future path of the federal funds rate have almost no ability to offset a shock in current circumstances, but down the road may be able to provide enough additional accommodation to fully compensate for a more limited [ability] to cut short-term interest rates in some, but not all and maybe even not most, circumstances.” The italics and colors show my changes.

Just as troubling, Englander admits that the nuanced read of the Fed paper admits it is effectively powerless to withstand a sharp recession: “The key policy issues and what drives the paper’s conclusions and my variant is the starting point. Were we to have a recession today or a year (or even two years) from now, it is very unlikely that the Fed weapons have anywhere near the potency that the paper describes. The FOMC had an end-2018 median fed funds rate of 2.4% at the June meeting and my guess is that it is lower now. Markets don’t price in even 100bps in fed funds till the end of 2019 (taking Eurodollar rates and subtracting 40bs or so.) That said, a 5% shock to the unemployment rate is pretty extreme, if the Fed is not stepping on the brakes hard or world not falling apart for other reasons.”

How much room does the Fed have? Very little:

In the simulation is looks as if it takes about 160-180bps of fed funds reductions (peak response) to offset an 1% UR shock, so right now they could offset maybe an 0.20% shock to the UR with the rates room that they have.

But most troubling of all, is just how critical starting conditions are for further easing; considering monetary conditions right now are unprecedented, it means the Fed has its work cut out for it:

The problem the paper outs in relief is that the effectiveness of rate cuts/QE/rate guidance goes up with the starting point of rates – so the combined policy tools are much more effective if the fed funds rate is 3% than if it is 2% and certainly a lot more than if it is 40bps. There is a good reason the paper does not examine the options for fighting recessions under current conditions. The drop in fed funds also takes 10 year yields down, and roughly 30-40bps in 10s for every 100 bps in fed funds,  so if you are starting with fed funds at 40bps and 10yr yields at 160bps, rates policy/QE/forward guidance are not going to do much. Short rates, long rates and rate expectations have nowhere to go, unless you bring negative rates into the discussion, which does not occur.

And, as noted above, not less than $4 trillion in QE would be enough to “get long rates down far or fast enough to offset the shock.”

What are the implications for the Fed, and thus to the market, as a result of the paper? It depends on whetyher one is a hawk or a dove:

To the doves fast growth and higher inflation inoculates the Fed and the economy from policy ineffectiveness at the zero bound so it is a very dovish outcome. Insofar as having 2.5% or 3% inflation makes policy more effective in a downturn there is a case for loosening the target, or not admitting to loosen but reacting to an overshoot anyway.

 

Hawks may argue that there is a case for raising rates faster, not slower, but the argument has to be made carefully. Assume that the next recession comes in a year from a source not related to Fed policy – the EU falling apart or a major geopolitical event. If fed funds is at 100bps, for example, they may have a meeting or two to stimulate by taking policy rates down while laying the ground for the much bigger stimulus from fiscal or helicopter money that would  be needed. If fed funds are very low, investors, households and firms may lose confidence when they recognize that policy has nowhere to go. But this logic depends crucially on this confidence effect which may or may not exist. Hawks can at any point argue that the risks of the zero bound are overstated or that easy Fed policy makes the next recession more likely by making a financial crisis more likely at some point, but that is outside the scope of the paper.

Incidentally, all of the above is a long-winded way of saying the Fed hiked rates, only to be forced it will have to not only cut them, as Japan did 7 months after its ill-fated August 2000 rate hike as we cautioned last August…

… but that when the US economy slides into the next sharp recession, no less than $4 trillion in QE will be needed to stabilize the economy, bringing the Fed’s total holdings of government bonds to well over 30%. And with that in mind, we look forward to what “upside rate hike surprises” Yellen has in store for the market this coming Friday, especially if the politically-tasked Bureau of Labor Services continues to surprise to the upside with fresh record numbers of minimum-wage restaurant workers and bartenders.

via http://ift.tt/2bguRnO Tyler Durden

 This article by David Haggith published first on The Great Recession Blog.

I’ve never seen anything so surreal as the United States’ current political circus of unelectable and undelectable candidates offered as each party’s top of the crop. I can’t stop wondering if the Trump is Clinton’s decoy, gathering all the Republiducks into one place so the Democats can slaughter them. Yet, as surely as Trump looks like he’s trying to throw the election, Hillary looks like she’s going to fall over unconscious from a brain aneurysm on the dawn of election day … or on midnight after the votes are in and counted, depending on which conspiracy you like best.

Equally weird is the certain fact that the Democrat’s Chosen One was assured her party’s worship through inside engineering. I’m not surprised such maneuvering happens inside political parties but that, after it came fully into the open, Hillary seems more likely to win.

That she was able to take the Democrat who was most to blame (and who resigned because of it) and raise her quite publicly and immediately to the top of her campaign goes to show how voters believe this is just the way party politics works all the time. Hillary made that move openly, knowing that most people in her party couldn’t care less about such things. She even got a big bump in popularity after the move. That’s how little such shenanigans mattered to her supporters.

 

 

By DonkeyHotey [CC BY-SA 2.0 (http://ift.tt/KcQbXG)], via Wikimedia Commons

 

The Trump — What a card!

 

That the irony is everywhere is unsettling. If I were writing a novel, I couldn’t pick a better name for an unlikable, self-aggrandizing, megalomaniac presidential candidate than “Trump.” He has the sole virtue of sounding anti-establishment at a time when people crave a strongman who can save the nation from its own craven greed now that it has lived for decades above its means.

Then there is the irony that, having been clobbered by a rich, self-serving one percent who were too big to fail, the masses run to whom? A billionaire who is a member of the one percent who has spent his entire life serving only himself and bragging to the world that he’s the greatest man who ever lived. The more he brags that he’s rich, “really rich,” the more people flock to him to save them from a world dying under the strains of unbridled greed.

And, yes, there is the irony that the man named “Trump” spends his entire life blowing his own horn as brazenly as he can.

I’m not suggesting the Trump should stay with statements the mainstream media will approve, but his move toward more extreme statements as he nears the main election looks a lot like a guy whose plan is to throw the election by becoming less likable, as if he never really wanted to win. I wonder Is this all just another clownish Trump publicity stunt like his past pretenses of running? (Speaking out against crying babies is hardly a bold policy statement. It just seemed cold and clumsy. Awkward!)

Clearly, this is far from a normal election year:

 

Republican officials are exploring how to handle a scenario that would be unthinkable in a normal election year: What would happen if the party’s presidential nominee dropped out? ABC News has learned that senior party officials are so frustrated — and confused — by Donald Trump’s erratic behavior that they are exploring how to replace him on the ballot if he drops out.(ABC)

 

Even if you were looking for an anti-establishment Republican candidate that most Republicans would hate, Trump certainly doesn’t look like one now that he has come out with a stimulus tax plan that is almost straight out of the establishment-Republican, thirty-year-old play book.

In a nutshell, his plan to save America’s economy is to give deep tax breaks to the top one percent by establishing the cheapest capital-gains tax in decades. That assures the rich continue of paying less in taxes than the middle class (since they make their money off of capital gains, not wages). Then Trump intends to balance this tax cuts (bigger than the Bush tax cuts that helped bankrupt the nation) with huge spending increases in order to assure enormous deficits from here to kingdom come.

Having been sold that bill of goods by Reagan and Bush who assured us the economic benefit of tax cuts would outweigh the tax losses to such a degree that we could increase our spending without running the national debt up (and having seen that prove outrageously false … twice!), it looks like we are about to take that same ride for a third time around the block as everyone waves their hands and screams, Salvation is here! Throw us some candy!”

The only major change to the Republican plan of the past thirty years is that we’ll be running up massive deficits on projects at home rather than on foreign wars. The plan assures we’ll move further than we’ve ever been from paying as we go for the things we want to do. That’s what got us here, and it looks like we’re as determined as ever to hit the throttle as the bus heads straight for the cliff. A vote for Tump assures that we’ll continue to hand the bill for all of our overspending to our children and grandchildren at least until the ground leaves the wheels of our bus behind. Praise Trump!

Trump also blew his horn over and over about how he could fund his entire campaign so as to be owned by no one and then made a lot of noise about how bad hedge-fund guys are; but then he hired a top hedge-fund mogul and partner at Goldman Sachs to be his campaign finance chair to help raise funding. Really? A partner in Goldman Sachs — the company that gift-wrapped the Great Recession for us — will make him less beholden to the corrupt one-percenters who got us where we are?

Yikes!

 

Feeling Pencive about Trump

 

In an odd marriage of opposites, Trump chose a running mate whose history demonstrates he stands for everything Trump has railed and rallied against. Being the quintessential establishment neocon, Pence never saw a war he wouldn’t approve or a tax he wouldn’t cut or free-trade deal that he didn’t vote for or a bank he wouldn’t further deregulate or a major corporation whose greed he would stand up to. He’s Bush to the core.

Trump chose Pence to soften the Republican establishment’s opposition to his campaign. So, he’s already caved in to the establishment.

Pence is such a champion of the free-trade deals that moved jobs out of America (the free-trade deals Trump hates). Pence supported and voted for NAFTA. He has even spoken in support of Obama’s Trans-Pacific Partnership plan. So, he has heralded free-trade agreements from the start to finish.

Pence has also spoken in favor of more open borders. While Trump sounds like an isolationist, Pence is pure globalist believing that American companies win with open borders and free trade, but blind to the fact that only the shareholders win. The workers wind up competing against lower wages from immigrants who come across those open borders or seeing there jobs move out of the country entirely. So, the top ten percent grow wealthier under these deals because of cheaper labor while the middle class fades.

Pence also fully supported George Bush’s regime-change experiment in Iraq, which we are still fighting more than a decade later. I cannot see any manner in which the US is better off with Iraq as it is today than it was with Iraq as it was over a decade ago, having spent more than two trillion dollars there. Costs over the years ahead are estimated to total more than 6 trillion dollars. And that doesn’t cover the economic costs to Iraq. Total dead, nearly a quarter of a million people! What on earth did either the US or Iraq gain that was worth all of that?

The amount already spent on our pre-emptive war against a nation with no weapons of mass destruction, which posed almost no threat to the US at all, totals ten percent of all the decades of accumulated national debt. That’s for just one war in one little country … for which we have NOTHING to show.

Yet, Pence, in a nation that the Republican Speaker of the House called “broke,” has called for “dramatically” increasing military spending. Apparently no cost of war is too great for America, even when it fails to buy us an ounce of security and appears to have turned Iraq into an incubator for ISIS by removing the one strongman whom the US originally set up there to keep a heavy hand on such movements.

Throughout the Bush years and beyond, Pence, as vice chair of the House Foreign Affairs Committee, continued to champion the Iraq war as a virtuous spread of democracy. Trump, on the other hand, strongly spoke against the Iraq war leading up to the primaries but now seems comparatively quiet about it, lest people point fingers at his running mate. (The cost of sucking up to the establishment.)

I think the only Obama plan that Pence every heartily agreed with was getting the US involved in a civil war in Libya. So, Pence is a US imperialist to the core, who has said a number of times that US should impose democracy wherever it can in the middle east (apparently even at the cost of trillions of dollars).

Pence is as blind as Bush was to the reality that democracy is only as good as its people. So, if the people in a nation hate you, that democracy will also hate you and oppose you. Hardly sounds like a plan in the United State’s best interest, and it hasn’t turned out too good for the country’s we’ve tried to bring democracy to either.

Pence is a neocon’s neocon and stands for everything Trump has proclaimed he stands against. Totally bizarre.

None of that would matter if Pence were just a token vice president, as many have been; but, according to the NY Times, Trump lured Pence with a promise that he will be put in charge of of all domestic policy and all foreign policy if Trump is elected and will become “the most powerful vice president in history.” Well, that’s “in charge of everything.”

While the NY Times has only a single source for the statement that Trump promised Pence the full power of president, and the Trump campaign now says that isn’t true, such a move would be consistent with Trump’s direction in his tax plan and his embrace of a neocon running mate. All of his actual actions to date reek of the moldy hash of the Repub establishment. The reality that is unfolding around Trump is consistent with putting an establishment Republican in charge of everything.

Trump doesn’t sound like a man who wants to actually do the work of president nor even like a man with any actual anti-establishment ideas of his own for saving the economy. He’s just great at saying, “It’s great. It’ll be great. It’ll be the best, the best plan anyone ever saw.”

While Pence runs the country and attempts to run the world, what will The Trump actually be doing to make America great again? Keeping his eye on the big picture as an idea man while he continues to build his corporate empire? Creating a bigger and better Miss USA pageant so the world can see how great America truly is by how beautiful its women are?

Apparently, running the nation is something one of Trump’s peons can do, since Trump has an entire corporation to look out for and a name to keep building. So, maybe the presidency is just part of building that name:

 

All Dick Cheney jokes aside, let’s remember that the real job of the vice president is actually something like, “being alive on the off-chance the president is not,” not “assuming the duties of the presidency in toto for the duration of the president’s term.” (Huffington Post )

 

So, this is the year in which the antiestablishment candidate came out with the biggest establishment economic plan in the history of the nation — the same old buy-everything-without-paying-for-it stimulus, but on steroids at a level the would make the Russian Olympic team envious. (I plan to write more on the Trump tax plan at a later date, but it’s the same old never-trickle-down major tax breaks to the rich while buying lots and LOTS of stuff to stimulate the economy.)

Republicans have fallen for this candy for thirty years, so it will probably sell like circus peanuts. And who better to sell the nation on circus peanuts than a pompous con artist who has defaulted on debts due to failed plans more often and more spectacularly than any candidate in history — the Don of Debt, a joker for a trump card and a lifetime blow hard, Donald Trump, a man who has no record of ever standing in business for anything higher than himself?

 

Hillary or Billary or Pillary or Shillary or Chillary or Killary

 

A thorn by any other name.

Whatever you want to call her — and they all fit to a tee — the possible next world leader from the Clinton dynasty seems well qualified for the starring role in Weekend at Bernies or Waking Ned Divine. If her head bobbles anymore, her neck will fatigue and her cranium will fall off, revealing the burned wiring that extends up to her motherboard from that dead battery pack she calls a heart.

Already, the shorting circuitry causes her to smile and laugh uproarously like she’s going to eat the person she’s looking at everytime someone accuses her of misconduct. I’m sorry, but an “I’m going to eat you” smile chills the heart and fits all that’s been rumored about her and the worst of what her many bad actions have shown.

She also appears to be ready to join the plight of some big Russian leaders of the past and cough herself out of existence. Even her fans at major networks have raised questions about her brain injuries being the source of her abundant coughing, her unsteadiness, and her sometimes bobbling head.

Speaking of Russian, I think Hillary pushed the wrong red button when she reached for the reset button on relations with Vladimir Putin. It appears she pushed the nuclear button with Russia, as the US moved during her time as Secretary of State all the faster into racing Russia to arms in Europe. While Bush was sophomoric in his relations with Russia, giving foreign leaders high-schoolish nicknames like “Putie,” Hillary helped frost the entire nation over like Elsa, the ice princess in Frozen. Relations with Russia haven’t been this icy since the cold war.

Follow Ms. Clinton’s trail as Secretary of State, and it looks like a scorched-earth scar across the globe. Nations that were unstable before she stepped foot there are now deep in war. She takes personal responsibility for counseling President Obama to jumpstart Libya’s civil war, and President Obama gladly agrees it was her idea. There you also find her apparent Benghazi flameout.

 

Clinton viewed “smart power” as the strategy for asserting U.S. leadership and values—in a world of varied threats, weakened central governments, and increasingly important nongovernmental entities—by combining military hard power with diplomacy and U.S. soft power capacities in global economics, development aid, technology, creativity, and human rights advocacy.As such, she became the first secretary of state to methodically implement the smart power approach. In debates over use of military force, she was generally one of the more hawkish voices in the administration. In August 2011 she hailed the ongoing multinational military intervention in Libya and the initial U.S. response towards the Syrian Civil War as examples of smart power in action. (Wikipedia)

 

Libya became another failed state that may not regain health for another fifty years, and Syria has already become another Middle East quagmire where US involvement has slowly escalated, and costs are endlessly growing. Russia has done more to stop ISIS in Syria than the US because of conflicts in the United States’ hard-to-describe Syrian policy that seems more intent on regime change than on stopping ISIS, America’s true enemy.

Hillary advocates the “We’ll stuff democracy down your throats or kill you trying” approach that Pence favors. At the global level, you see, the establishment in both parties is the same.

Clinton engineered Obama’s Middle East policy from the start of the Arab Spring. She moved Obama against Hosni Mubarak in Egypt in favor of an “orderly transition [to] a democratic participatory government.” She advocated greater force in Afghanistan than either President Obama or VP Joe Biden were in agreement with.

Throughout her life, Clinton also never saw a scandal to which she couldn’t find a way to attach her name. From White Water to keeping someone she knew was a rapist out of prison by destroying the female victim’s reputation t0 destroying the feeble reputations of any women in later years who accused her husband of infidelity to the growing scandal around the Clinton Foundation, her name is right there again and again.

She disregarded US security with her emails and then lied about it repeatedly to such an extent that FBI director Jame Comey struggled to find enough loathing adjectives to describe her incompetence:

 

There is evidence that they were extremely careless in their handling of very sensitive, highly classified information…. There is evidence to support a conclusion that any reasonable person in Secretary Clinton’s position … should have known that an unclassified system was no place for that conversation…. Their presence [on an unclassified system] is especially concerning because all of these emails were housed on unclassified personal servers not even supported by full-time security staff, like those found at agencies and departments of the United States government…. We also developed evidence that the security culture of the State Department [under Clinton’s leadership] … was generally lacking in the kind of care for classified information that is found elsewhere in the government…. We do assess that hostile actors gained access to the private commercial email accounts of people with whom Secretary Clinton was in regular contact from her personal account. We also assess that Secretary Clinton’s use of a personal email domain was both known by a large number of people and readily apparent. She also used her personal email extensively while outside the United States, including sending and receiving work-related emails in the territory of sophisticated adversaries. Given that combination of factors, we assess it is possible that hostile actors gained access to Secretary Clinton’s personal email account. (CNN)

 

That’s the kind of foresight, attention to security and forthrightness I want to see in a president of the United States.

Seriously? With over three-hundred-million people to choose from in the US, these Trump and Hillary are the best and brightest saviors that either party can put forward? That this is what rises to the top is one of the scariest thoughts on earth.

 

An Epocalypse upon us all

 

Meanwhile Barrack Obama is ceding US power to the UN with his TPP to such a level that it would appear he is setting up his next office as Sec’y General of the UN. He appears to be readying that office with the power it will need for him to operate without US interference.

Unless, of course, the deep plan is that Hillary goes into a coma after winning the election that The Don of Debt is throwing her way so that Obama can manufacture an excuse for maintaining the office of president during a protected emergency election. So say some conspiracy theorists, though there is no constitutional basis for that. Still the political world is so bizarre right now to where my stomach is queasy enough that I even find conspiracy theories plausible.

On the other side of the pond, Merkel appears to self-destructing by turning Germany into a European Islamic Caliphate. The EU appears more likely than ever to self-destruct along with her now that the Brits pulled the plug at the center of the cess pool, giving rise to other European nations to do likewise. All this happens as the world’s oldest banks in Europe now glow in the dark as if nuclear explosions are going off inside their vaults.

No matter how you look at it, it is truly a bizarre election year where the main characters in the US have big plastic heads that seem to be occupied by tiny alien operators.

To cap this whirling dervish all off, a virtual Who’s Who of Republican leaders have stated on record they will vote for a liberal Democrat for president — a woman whom they usually talk about with complete derision. Hate her as they do, they’d rather have her than one of their own. How surreal is that?

It’s a year like none other in my lifetime, and it certainly all fits the Epocalypse that I have been saying all year is building around us. We are walking through the gates of a new world order that is forming and falling apart at the same time. It is a time of great conflicts as globalizing forces clash against local resistance, resulting in crumbling unions and reforming alliances.

It happens as there deep economic faults show up everywhere while neither of the two people rising to the world’s dominant leadership role look remotely suitable to the task. On one side we have a “very rich” narcissist with a red squirrel for a wig who can never stop boasting about how great he is while he defaults on debts all over the world. On the other side, we have a stumbling, coughing, fainting bobble head who leaves a slime trail of fire wherever she has travelled this earth.

I’m going to bed now. Hopefully to dream sweeter dreams of times long past or far — very far — ahead, for the next four years look like the four horsemen of the Apocalypse.

via http://ift.tt/2bK5hIu Knave Dave

Submitted by Lance Roberts via RealInvestmentAdvice.com,

“Bears are like broken clocks, they are only right twice a day.”

This is a statement that is often thrown out during rising bull markets by the inherently optimistic crowd. However, such a statement really points to the ignorance of those that make such a claim. Why? Because if the “bears” are right twice a day, then the “bulls,” logically speaking, are wrong twice a day as well. In the game of investing, it is the timing of being “wrong” that is the most critical.

The chart below shows the bullish and bearish cycles, in terms of “real,” inflation-adjusted price, for the S&P 500 from 1871-present.

Throughout history, bull market cycles are only one-half of the “full market” cycle. This is because during every “bull market” cycle the markets and economy build up excesses that are then “reverted” during the following “bear market.” In the other words, as Sir Issac Newton once stated:

“What goes up, must come down.” 

The next chart shows the full market cycles over time. Since the current “full market” cycle is yet to be completed I have drawn a long-term trend line with the most logical completion point of the current cycle.

[Note: I am not stating that I “believe” the markets are about to crash to the 700 level on the S&P 500.  I am simply showing where the current uptrend line intersects with the price. The longer that it takes for the markets to mean revert the higher the intersection point will be. Furthermore, the 700 level is not out of the question either. Famed investor Jack Bogle stated that over the next decade we are likely to see two more 50% declines.  A 50% decline from current levels would put the market below 1000 which would likely be in the “ballpark” of completing the current full market cycle.)

The Problem Of Time

The biggest fallacy perpetrated on investors today is how long-term investing is promoted. A quick glimpse at the chart above tells you that if you had just invested in stocks in 1871, and held them, that you would be wealthy beyond imagination today. Unfortunately, you died long before you ever realized such wealth.

During my morning routine of caffeine supported information injections, I ran across several articles that just contained generally bad investment advice and poorly formed analysis. Each argument was hinged on the belief that bull markets last indefinitely, bear markets are simply an opportunity to “buy” more, and investing for the long term always works.

This got me to thinking about the how we are told to invest in the markets. When markets are rising, and valuations are increasing, individuals are berated by financial media and Wall Street into shoving their hard earned “savings” into a rising risk environment. They are always told to “buy” but never to “sell.” When markets invariably revert, they are told to “hold on,” “average down,” or “buy more.” After all, you are investing for the long term, right?

There are several problems which need to be addressed. First, while markets have indeed risen over long-term time frames, the markets have spent roughly 95% of their time making up for previous losses. The chart below shows this fairly clearly.

Secondly, exactly how much time do individuals really have? While it certainly sounds charming “youngsters” should throw their money into the Wall Street casino, the reality is this is hardly the case. Youngsters rarely have sufficient levels of investible savings to actually invest. Between starting a career, raising a family and maintaining their specific standard of living there is rarely little remaining to be “saved.” For most, it is not until the late 30’s or early 40’s that individuals are earning enough money to begin to save aggressively for retirement and have enough investable capital to actually make investing work for them after fees, expenses and taxes. Therefore, by the time most achieve a level of income and stability to begin actually saving and investing for retirement – they have, on average, about 40 years of investable time horizon before they expire.

I have prepared two different charts to show you the impact of investing over 40-year time spans. I used an initial investment of $1000 at the beginning of each decade and analyzed the capital appreciation for the ensuing 40-year period. In this regard, we can garner a clearer picture about the impact of both secular bull and bear market cycles on the total investment returns. [Note:  The data below uses Shiller’s price data on a nominal basis and is based on monthly capital appreciation only.]

The first chart shows the average annual return for each starting decade.

The next chart shows the capital appreciation of a $1000 initial investment.

“Importantly, the major difference on the ending result depends greatly on ‘WHEN’ you start investing. If you started investing during the 50’s and 60’s, then you were lucky enough to capture the raging ‘bull market’ of the 80’s and 90’s which offset the secular bear market of the 70’s. However, if you started in 1990, so far, results haven’t been all that great as the secular bear market of the 21st century has slowly chipped away at the gains of the 90’s.”

The problem for most is time. While we can manufacture more “money,” we can not create more “time.” 

The reality is that no one has 100 years to invest to achieve the long-term investment returns often touted on Wall Street. What all investors do face is the reality of the incredible time crunch between the beginning and end of the “accumulation phase.” The problem is that the “accumulation phase” is generally much shorter than the “distribution” phase particularly as life expectancy creeps ever closer to 100 years of age. Therefore, investing mistakes made early on have a tremendous impact on the end result due to the lack of “time.”

Psychological Failure

In reality, the problem is far worse than what is shown. Dalbar Research produces an annual report on investor behavior that clearly shows investors compound their investment problems by “buying high and selling low.”  The growth of the markets, as shown in the charts above, has NEVER been achieved by investors when including the impact of fees, expenses, taxes and emotional mistakes.

Despite the media’s commentary that ‘if an investor had ‘bought’ the bottom of the market…’ the reality is that few, if any, actually did.  The biggest drag on investor performance over time is allowing ‘emotions’ to dictate investment decisions. Investor studies show “psychological factors” account for between 45-55% of underperformance. From Dalbar:

“Analysis of investor fund flows compared to market performance further supports the argument that investors are unsuccessful at timing the market. Market upswings rarely coincide with mutual fund inflows while market downturns do not coincide with mutual fund outflows.”

In other words, investors consistently bought the ‘tops’ and sold the ‘bottoms.’  The other two primary reasons of underperformance from the study related to a lack of capital to invest.  This is also not surprising given the current economic environment where roughly 80% of Americans lack sufficient savings to meet a $500 emergency. 

These psychological investment mistakes are never discussed by the mainstream media, but they are real and extremely destructive to long-term returns. What is interesting is that these investment mistakes are generally made during the first half of the full-market cycle as “greed” overtakes a logical and disciplined investment process. Those mistakes, however, are only recognized during the second half of the cycle as the “panic to sell” overwhelms individuals.

The Fallacy Of The “Broken Clock”

In this past weekend’s newsletter, I quoted John Hussman who put a very fine point on the importance of understanding the “full market cycle:”

“Put simply, most apparent “opportunities” to obtain investment returns above zero in conventional assets over the coming decade are based on a misunderstanding of valuations, total returns, and historical yield relationships. At current valuations, virtually everything is priced for a decade of zero. The unwinding of these speculative extremes is likely to be chaotic, and will likely occur over a shorter horizon than investors imagine. That chaos, driven not by central bank tightening but by an emerging default cycle, will usher in fresh investment opportunities in conventional assets, where presently there are none.

 

Looking beyond the near-term, my view is that a ‘permanently high plateau’ is unlikely, and we will instead see a violent unwinding of recent speculative extremes over the completion of the current market cycle, even if central banks ease aggressively, as they did throughout the 2000-2002 and 2007-2009 collapses. Corporate income growth and profit margins have already begun to narrow from their extremes, and the default cycle has already turned higher. The completion of this cycle won’t arrive because central banks suddenly become enlightened enough to abandon their recklessness. It will arrive precisely because they have sustained yield-seeking speculation for too long already; because they have amplified the vulnerability of the debt and equity markets to normal economic fluctuations; and because the consequences of this fragility are now fully baked in the cake.”

While John is absolutely correct, he is often dismissed because of his bearish overtone. In my opinion, this is a mistake. However, it is exactly that dismissal which is indicative of the willful blindness to the underlying problems and the inherent disaster to long-term goals that awaits many unwary individuals in the markets currently. 

As I have often stated, I am not bullish or bearish. My job as a portfolio manager is simple; invest money in a manner that creates returns on a short-term basis but reduces the possibility of catastrophic losses which wipe out years of growth.

In the end, it does not matter IF you are “bullish” or “bearish.” The reality is that both “bulls” and “bears” are owned by the “broken clock” syndrome during the full-market cycle. However, what is grossly important in achieving long-term investment success is not necessarily being “right” during the first half of the cycle, but by not being “wrong” during the second half.

via http://ift.tt/2bZG9R3 Tyler Durden

Ryan Lochte’s drunken night out with his fellow US olympic team swimmers, culminating with a fabricated explanation of what happened at a particular Rio gas station, may end up being the costliest “fib” in the history of the Olympics.  The reason: Lochte has already lost two of his core sponsors, when first swimwear maker Speedo USA said earlier today it had decided to end its sponsorship of Ryan Lochte, two days after the U.S. Olympic gold medalist swimmer admitted to exaggerating his story about being robbed at gunpoint in Rio de Janeiro, followed promptly by luxury retailer Ralph Lauren Corp, which also said it would not be renewing its contract with the swimmer.

Speedo USA said it would donate $50,000 of Lochte’s fee to Save The Children, a global charity partner of Speedo USA’s parent company.  “We cannot condone behavior that is counter to the values this brand has long stood for,” Nottingham, UK-based Speedo’s U.S. unit said in a statement on Monday.

Later Monday, Ralph Lauren issued a statement saying it would not be renewing Lochte’s contract.  “Ralph Lauren continues to proudly sponsor the U.S. Olympic and Paralympic Team and the values that its athletes embody,” the statement read. “Ralph Lauren’s endorsement agreement with Ryan Lochte was specifically in support of the Rio 2016 Olympic Games and the company will not be renewing his contract.” The company had taken down any reference to the gold medalist from its website.

Ryan Lochte’s name & image has been taken off the Olympic endorser page on Ralph Lauren’s website http://pic.twitter.com/NKZhTm8peU

— Darren Rovell (@darrenrovell) August 21, 2016

Lochte, who admitted he was drunk in the early-morning hours of Aug. 14, destroyed a sign at a gas station. He and the swimmers were then held by security guards with guns at the gas station and released after they paid a fee. Lochte later said in an interview with NBC how the swimmers were robbed at gunpoint, however after video evidence emerged refuting his story, he subsequently apologized on Saturday in an interview to Brazil’s largest broadcaster, Globo TV. “I wasn’t lying to a certain extent,” he said. “I over-exaggerated what was happening to me.”  Today, he made more statements, saying “I respect Speedo’s decision and am grateful for the opportunities that our partnership has afforded me over the years. I am proud of the accomplishments that we have achieved together.”

While Lochte’s little stint has likely cost him millions in endorsements, the silver lining is that he still has two other deals, one with mattress company Airweave and another with Gentle Hair Removal.

According to ESPN, Airweave CEO Motokuni Takaoka said last week in a statement that Lochte “will remain a US ambassador for Airweave as long as our partnership agreement remains effective.”

Syneron-Candela, the parent company of Gentle Hair Removal, said last week said that the company would “reserve decisions until we have a more complete understanding of the situation.”

The bad news should not come as a surprise to Lochte who when asked by NBC’s Matt Lauer if his original version of the story could cost him his endorsements, Lochte answered it could. “And that’s something I’m going to have to live with,” Lochte said.

The loss of endorsements may not be all the bad news: Lochte also faces potential disciplinary action from the U.S. Olympic Committee, with CEO Scott Blackmun saying Sunday that further action was coming. USA Swimming and the IOC could both sanction Lochte.

And now that the US public has finally gotten Lochte out of its system, it can resume its focus on the daily sitcom that is the presidential election, where lies far greater and more damaging than anything Lochte came up with, continue to be lobbed by the hour.

via http://ift.tt/2buTrQE Tyler Durden

Submitted by Michael Shedlock via MishTalk.com,

Forget about what the oddsmakers say about Trump’s election chances. Instead, let’s focus on polls at the state and national level, and assess the election from a pragmatic point of view.

What would it take for Trump to close the gap? Is it possible?

Let’s start our analysis with a look at a National Poll Average of recent polls by Real Clear Politics.

Momentum Shifts Back to Trump

That chart represents national data. The election will be won or lost at the state level. However let’s dive further into national numbers a bit to see what is happening.

Biased Average of Polls

Some may question the LA Times poll. I sure do. But that 50% mark posted by NBC and Bloomberg for Hillary is equally nonsense as the following image shows.

Four-Way Race Results

Clinton’s real support level is 43-44%, not 50%.

Economist/YouGov

The undecideds and others represents a hefty 20%. Might they break for Trump? Are those voters coming mainly at the expense of Trump or Hillary?

IPOS/Reuters

The IPOS poll is even more interesting.

Check out support for Hillary among Democrats. Is it likely to get any better?

Where Trump Can Pick Up Votes

• 11% of Republicans say they will vote for someone other than Trump or Hillary
• 9% are unsure or refused to answer.
• 22% of Independents say they will vote for someone other than Trump or Hillary
• 12% of Independents are unsure or refused to answer.

That’s one heck of a lot of votes. And they are far more likely to break for Trump than for Hillary.

State Projections

Toss Up State Analysis

Of the eight toss up states, highlighted in yellow, Trump is currently behind in all but Missouri and Arizona.

However, I do expect Trump will win most or all of them. So let’s make that assumption and re-draw the map.

Winning most of the states currently marked toss up will not be good enough for Trump. In fact, winning all of them will not be enough.

In my projections earlier this year, in which I posted a roadmap for a Trump victory, I expected Trump to win either Virginia or Pennsylvania. That task now looks very difficult.

Even if Trump holds all of the above red states, he still needs to convert some other state from blue to red. Any state will do.

Pennsylvania is big enough to cover a loss of some small state like Nevada. New Mexico is a possible shot. So is Michigan. What about Minnesota?

On August 20, Donald Trump Said He Could Win Minnesota. He might have to. And if he did so, he would be the first Republican to carry the state since since Richard Nixon’s landslide victory in 1972.

“If I could win a state like Minnesota, the path is a whole different thing,” Trump told donors at a fundraiser event in Minneapolis.

Expect Race to Tighten Considerably

Trump’s curious focus on Minnesota should now be easy to understand in light of the above math. Trump knows what he has to do.

It’s an uphill battle, but not impossible. I expect a much closer election than the polling odds and mainstream media has you believe.

My rationale?

1. Hillary has likely peaked with Democrats.
2. Trump has not peaked with Republicans.
3. Undecided Republicans are highly likely to break for Trump, and do so in size.

This election is not over yet…

via http://ift.tt/2bgjbkR Tyler Durden

In the most recent escalation involving China’s latest foray into the East China Sea, we reported that Japan’s coast guard released a video of several hundred Chinese ships located near the disputed naval territory, among which 18 patrol vessels of which seven were equipped with what looked like machine guns. “Actions by the Chinese side like this, which will escalate the situation, are not tolerable,” the Japanese Coast Guard said in a statement.

This took place just days after Japan announced it would deploy land-to-sea missiles with a 300 km range to protect the nation’s isolated islands, including the Senkakus, with costs for the deployment borne by the defense ministry’s budgetary request for the March 2018 fiscal year, which means even more bonds for the BOJ to monetize.

China’s nationalist Global Times paper immediately responded, saying :”Japan’s decision to develop surface-to-sea missiles with a range of 300 kilometers to cover the disputed islands shows the country may be eyeing a shift to an offensive posture, analysts said. “Japan is trying to use the missile system to lock down the Miyako Strait and prevent Chinese forces from entering the Western Pacific Ocean,” Zhou Yongsheng, a professor at the Institute of International Relations of China Foreign Affairs University, told the Global Times.

And since neither side was willing to backtrack in this series of escalating threats, earlier today Japan’s Defense Ministry announced it wants its 200 F-15 fighter jets to carry twice as many air-to-air missiles as they do now, in preparation for a possible confrontation with Chinese Air Force around disputed East China Sea islands, RT reported. These upgrades would double the number of air-to-air missiles carried by ASDF F-15s, from eight to 16 per each aircraft. In addition, damaged wings and other parts of the fighter jets will be repaired to extend their lifespan.

Currently, the Japanese Air Force operates 200 F-15s in combat and trainer variants as well as roughly 90 Mitsubishi F-2 multirole fighters, a development of F-16 design. The 2017 military budget worth $51 billion will reportedly include a separate purchase of an undisclosed number of controversial fifth-generation F-35 stealth fighter jets, said to be deployed at the Misawa Airbase at the northern tip of Honshu, Japan’s main island.

Tokyo says China’s “assertive” actions near the disputed Senkaku Islands – or Diaoyu in Chinese – makes Japan’s military to respond with re-deploying forces closer to the troubled area and investing into strengthening combat capabilities. “As the cruising range of Chinese military aircraft has gotten longer, they are coming ever closer to our territories,” a Japanese Defense Ministry official was cited by Nikkei Asian Review.The ministry also added the ASDF has been scrambling fighter jets 199 times from April until June to intercept Chinese planes over the East China Sea, a 75 percent increase from the same period last year.

And while Japan is focusing on expanding its airborne presence in proximity to the disputed islands, China – which would not leave Tokyo have the final word – warned Tokyo of a harsh response if it ever crossed a “red line” in deciding to sail with US warships near disputed waters surrounding China’s artificially reclaimed islands under the pretext of the Freedom of Navigation principle, Japanese media reported.

Tokyo will “cross a red line” if Japan’s Self-Defense Forces sail with the Americans, Chinese Ambassador to Japan Cheng Yonghua allegedly told a Japanese official in Tokyo, Kyodo reported citing a source.

“Japan should not take part in a “joint military action with US forces that is aimed at excluding China in the South China Sea,” Cheng reportedly told Japanese officials late in June. “(China) will not concede on sovereignty issues and is not afraid of military provocations.”

While Japan’s official reassured the ambassador that Japan had no plans to join the US sails, which have intensified lately by constant American warship maneuvering near artificial islands that China has built in the South China Sea, it is unlikely that Japan will hold to its word, especially since earlier this week, Japanese media reported that China continues to expand military infrastructure next to the disputed waters, erecting a military pier on Nanji Island, one of 52 islands in the Nanji chain that are part of China’s Zhejiang Province.

Furthermore, to counter the perceived Chinese threat, Tokyo is seeking a record defense budget of 5.16 trillion yen ($51 billion) for next year to strengthen the Japanese coast guard near the disputed waters with China. Part of the funding will also be spent on neutralizing the North Korean threat by deploying PAC-3 missile defense system and the joint Japanese-US production of the Block IIA version of the Standard Missile-3 system. Japan also seeks to purchase an upgraded version of the F-35 stealth fighter.

Meanwhile, Beijing has finished long-range combat drill in the Sea of Japan with its East China Sea Fleet by launching simulated attacks to improve the capability of continuous strikes at maximum range, CCTV reported. The exercise also included air force simulation of air-to-ship missile launches against enemy vessels. The Chinese navy called the drill “routine” and in accordance with international law.

Tensions in the area were heightened even further when four Chinese coastguard ships sailed into territorial waters surrounding the disputed islands in the East China Sea on Sunday morning. The Japanese foreign Ministry responded by issuing a note of protest against the “incursion” and the violation of Japanese sovereignty.

“Despite Japan’s repeated strong protests, the Chinese side has continued to take unilateral actions that raise tensions on the ground, and that is absolutely unacceptable,” the statement said.

As the sabrerattling continues, we anticipate that so will the escalations on both sides, and while these will not spill over into a full blown conflict between the two nations, may result in another collapse in trade between the two nations, in a repeat of events that took place in late 2013, when nationalistic tensions on both sides soared, leading to the boycott of many Japanese goods on mainland China. If this transpires, it will come at a very troubling time for China, which is now growing at a quarter of the pace it did three years ago, and will likely force Beijing to issue even more debt to compensate for the lack of growth, at a time when unofficial estimate calculate China’s total debt at a staggering 350%+ of GDP.

via http://ift.tt/2bJarDP Tyler Durden

Submitted by Thad Beversdorf via FirstRebuttal.com,

Challenge For the Market Pros, CEOs and PhDs…Read and Answer the Last Sentence

Now we’ve all heard a lot of statistics that depict both a good and bad employment picture.  We have 5% U3 (historic lows) but we have 62% labour force participation rate (record lows for double income household era).  We hear Obama suggest he’s created 7 million new jobs but wages are stagnant.  So is the job market good or bad?

Remember job growth figures are irrelevant without the context of the working age population.  It’s all about supply and demand.  That is, if my demand for labour increases, prima facie, that seems to put upward pressure on wages.  But if my supply of labour increases by an even larger amount well that puts downward pressure on wages.  And  real wages are a good proxy for living standards, so this is important stuff.  But jobs and wages have much broader implications than just the inconsequential living standards of the working class.

So let’s use relative comparisons to understand if our probabilities of getting a job, or better yet a breadwinner job, have improved or worsened over time.

The above chart depicts total private and government jobs as a percentage of the total working age population (demand for and supply of, labour).  What we find is that we have a 5% lower probability of getting a job than we did in 1999 (meaning supply of labour has outstripped demand for labour).  Now 5% doesn’t sound like a huge decrease but when the working age population is 204M we are talking about 10M proportionately more people who won’t get a job than in 1999.  Further think about what happens to price of labour in this scenario; exactly what we’ve seen in wages for the past 20 years.  But let’s look at breadwinner jobs specifically.

When we narrow the scope to just breadwinner jobs (above chart), both white and blue collar, we see the same 5% differential between 1999 and today.  The reason is both a reduction of the numerator and an increase in the denominator.

Here’s a look at the numerator, which is actually 1.5 million fewer breadwinner jobs today than in 1999.

And here’s the denominator, which is actually 28 million more working age people.

However, when we look at part time and minimum wage jobs we see that they have almost kept up with working age population growth (.3% decline).

What this means is that while part time and minimum wage jobs have kept up with working population growth there remains a 5% gap overall and that gap is directly within the breadwinner job sector.  Again this means there are proportionately 10M fewer breadwinner jobs for working age people in America today than in 1999.  This is an objective mathematical fact (we like these).  And so when people say “well the jobs market is just transitioning to different types of work” you can say yes, in part that’s correct, to part time and minimum wage work.

But I want to show you it is not just about transitioning from old world to new world the problem is more intricate and we must identify it if we are to first understand it and then to do something about it.  You see there are significantly more consumers in America today than in 1999 because every mouth is a consumer.  And so one would think more domestic consumption equates to more domestic production (jobs).  But here we find the opposite phenomenon.  That is, higher absolute domestic consumption (i.e. higher revenues) but proportionately lower domestic production (lower relative demand for jobs).

Let’s have a quick look at what this looks like in practice.

Below is the 10yr moving average of Industrial Production Index growth.

What we find is that only twice in modern history has this long term average of industrial production gone negative.  First was during the great depression and second was the recent financial crisis.  However, perhaps more concerning is that the ‘recovery’ has failed to produce any recovery in industrial production.  If we look at the above chart you’ll notice the Index growth failed to reach 1% before again rolling over.  We’ve never seen this before.

Let’s add the second derivative, or the rate of change of growth to the above growth chart to see where we’re headed.

The above chart depicts a massive deterioration (red line) in the growth rate (black line) of industrial production.  What’s perhaps most alarming is that each of the previous two times this rate of deterioration has occurred over the past 6 decades, growth was above 3% while today it’s already less than 1% (black arrows).  Think of a 300 lb man suddenly losing 20% of his body weight.  Well he still has 240 lbs of body weight.  However, imagine a 100 lb man suddenly losing 20% of his body weight.  Well he just died.  This is exactly where the US is with Industrial Production.

This really gets at the heart of the problem.  Consumption demand, at least the staples, will be realized to prevent death.  But how is that consumption being realized if we’ve seen that domestic production has not kept up with domestic consumption?  It is realized through current account trade deficits.  Trade deficits (current acct) are what allow an imbalance between domestic consumption and domestic production and the mechanism for ‘balancing’ this imbalance is private and public debt (credit and welfare).

But do understand then, perpetual current account trade deficits simply equate to subsidized corporate revenue and profit by way of subsidized personal consumption.  Another mathematical fact.  And credit and welfare are a function of income in that there is a maximum ratio of credit and welfare to income (income has to be able to pay down the private and public debt).  This means there is a ceiling on consumption in this country and that we must be approaching it.

Now I know in this very high tech new world very few academics or market strategists care much about US production but let me show you why they might want to adjust that perspective.

We can pretend fundamentals don’t matter and sure in the day to day profit taking of Citadel and the like they really don’t matter.  But for investors i.e. savers, the last bastion for returns is equities but now even here we see the long term average returns failing to achieve more than 5% and with a large risk cherry on top.  So while the PhDs may talk big about this new world economy where a move to universal welfare means jobs and wages don’t matter (this means you Bill Gross, Paul Krugman, Kevin Murphy, etc. etc.), well that is nonsense.   Jobs and wages matter and they will always matter.

For those of you that still don’t believe me let me have one more shot at convincing you.  We are all aware of the elephant in the room we simply never mention, namely, almost ubiquitous declining top lines throughout the market.  And why??  Well this ain’t rocket science folks…..

What we find is that long term growth in PCE (red line) has been deteriorating since the early 80’s and currently at a pace (black line) rarely seen before.  So Mr. Market Pro, CEO and PhD, as we quickly and undeniably approach the proverbial ceiling on consumption, where do you set the following parameters, Valuation = Price level/Fundamentals 10 years from now?

via http://ift.tt/2bxwQ7Y Tyler Durden

Updating our earlier note, it appears The State Department's stalling has been disallowed… (as Bloomberg reports)

A judge ordered the State Department to expedite its review of almost 15,000 previously undisclosed documents recovered by the FBI from Hillary Clinton’s private e-mail servers.

 

U.S. District James Boasberg on Monday ordered the State Department to process those recovered records by Sept. 22 and report back to him that day. He didn’t set a schedule for public release. The department raised the possibility of a phased release starting Oct. 14, which left open how many would be disclosed before the Nov. 8 presidential election.

As we detailed earlier, in yet another incident pointing to Hillary's 'above the law' persistent lies, WaPo reports The FBI’s year-long investigation of Hillary Clinton’s private email server uncovered tens of thousands more documents from her time as secretary of state that were not previously disclosed by her attorneys. Worse still, as Judicial Watch details, “it looks like the State Department is trying to slow roll the release of the records."

Having suffered blowback from throwing Colin Powell under the bus over the weekend, The Clinton campaign is likely back in panic mode as The Washington Post reports the number of emails to be released is nearly 50 percent more than the 30,000-plus that Clinton’s lawyers deemed work-related and returned to the department in December 2014…

The State Department is expected to discuss when and how it will release the emails Monday morning in federal court.

 

Monday’s hearing comes seven weeks after the Justice Department on July 7 closed a criminal investigation without charges into the handling of classified material in Clinton’s email set-up, which FBI Director James B. Comey Jr. called “extremely careless.”

 

The FBI on Aug. 5 completed transferring all of what Comey said were several thousand previously undisclosed work-related Clinton emails that the FBI found in its investigation for the State Department to review and make public. Government lawyers until now have given no details about how many emails the FBI found or when the full set would be released. It’s unclear how many of the 15,000 or so documents might be attachments, duplicates or exempt from release for various legal reasons.

 

Government lawyers disclosed last week that the FBI turned over six computer discs of information: one including e-mails and attachments that were sent directly to or from Clinton, or to or from her at some point in an e-mail chain, and not previously turned over by her lawyers; a second with classified documents; another with emails returned by Clinton; and three others containing materials from other individuals retrieved by the FBI.

Judicial Watch president Tom Fitton tweeted Monday morning that…

FBI found almost 15,000 new Clinton documents. When will State release them? Court hearing today.

— Tom Fitton (@TomFitton) August 22, 2016

Adding in an interview that “it looks like the State Department is trying to slow roll the release of the records. They’ve had them for at least a month, and we still don’t know when we’re going to get them.”

The roughly 15,000 documents at issue now come from the first disc, Fitton said.

Lawyers for the State Department and Judicial Watch, the legal group, said in an Aug. 12 court filing that they intended to negotiate a plan for the release, part of a civil public records lawsuit before U.S. District Judge James E. Boasberg of Washington.

The pre-emptive excuse already being pitched by FBI Director Comey is just as disgusting as his previous statement that  investigators found no evidence that the emails it found “were intentionally deleted in an effort to conceal them.”

Clinton's lawyers also may have deleted some of the emails as "personal," Comey said, noting their review relied on header information and search terms, not a line-by-line reading as the FBI conducted.

We are sure this is "probably nothing" – just another factual falsehood from the Clintons and their establishment cronies.

Of course, as Bill Clinton has stated, this will all change…

If [Hillary] is elected, we will immediately implement the following changes: 

 

The Foundation will accept contributions only from U.S. citizens, permanent residents, and U.S.-based independent foundations, whose names we will continue to make public on a quarterly basis. 

 

And we will change the official name from the Bill, Hillary & Chelsea Clinton Foundation to the Clinton Foundation.

 

While I will continue to support the work of the Foundation, I will step down from the Board and will no longer raise funds for it.

But – we presume – if she is not elected then the foreign bribes will continue?

via http://ift.tt/2buLMSa Tyler Durden

Last week Obama took a lot of heat for playing golf with Larry David and attending lavish Hillary fundraisers instead of taking the time to visit Louisiana (see our post "Does Obama Care About Black People? Louisiana Asks The President To Cut Vacation Short"). 

But, it turns out Obama did do something, his DOJ sent Louisiana a 16-page "guidance" letter warning officials not to be racist in their recovery efforts.  According to Breitbart, the "guidance" has struck a nerve with Louisiana residents including Retired Air Force Colonel Rob Maness who is currently running for U.S. Senate:

“The U.S. Department of Justice under President Barack Obama issued letters to the survivors [in] Louisiana of this great flood of 2016 and said ‘you better not be racist down there’… They sent letters that hit the streets a few days ago, maybe yesterday, that basically warned the citizens of Louisiana that you better not be racist when you’re hiring people to fix your homes,” Maness said.

 

“You know what? We’re tired of being called racists. And I think that that’s the number one issue in the United States of America. Those people [at the DOJ] can just go to hell. They’re not my Department of Justice,” the retired Air Force colonel added.

 

“The good folks down here where I live in Southern Louisiana are just absolutely more than appalled. We’re just  livid about it. The man ought to apologize to the people of this great state,” Maness said of the president.

The guidance letter (included in it entirety below) was originated by the Department of Justice and a litany other federal agencies "to ensure that individuals and communities affected by disasters do not face unlawful discrimination on the basis of race, color, or national origin (including limited English proficiency) in violation of Title VI of the Civil Rights Act of 1964 (Title VI)."  The letter points out how the recovery efforts after Hurricane Katrina were found to be discriminatory:

In the aftermath of Hurricanes Katrina and Rita, we have learned many critical lessons about how recipients of federal financial assistance engaged in emergency management activities can more effectively ensure that all members of the community receive services, regardless of race, color, or national origin.

 

The Recovery Framework notes that “care must be taken to assure that actions, both intentional and unintentional, do not exclude groups of people based on race, color, national origin (including limited English proficiency), religion, sex or disability.”

 

While emergencies and disasters affect all people, the ability of communities of color to access critical recovery programs, activities, and services often has been hampered.

The letter goes on to highlight specific instances of "discrimination" in the aftermath of Hurricane Katrina.  As evidence, the letter points to a single, online rental post which said the renter "prefers two white females."  The letter also points out that St. Bernard Parish acted in a discriminatory fashion by passing a law that allowed blood relatives to skip the permitting process in erecting single-family housing units on the property of relatives.

Nondiscriminatory access to housing and shelters in the aftermath of Katrina also posed a major challenge for diverse racial and ethnic communities. Many seeking temporary housing immediately encountered discriminatory rental advertisements that explicitly refused to rent to African Americans.  For example, an advertisement on a website designed to reach Katrina evacuees read: “Provider will provide room and board for $400 but prefers two white females.” Evidence collected by fair housing testers found that in 66% of all tests, White persons were favored over African American persons seeking housing using contacts available to Katrina evacuees. A federal court found evidence of intentional discrimination in actions by St. Bernard Parish, which neighbors New Orleans, when the parish sought to restrict rental housing opportunities, including actions to halt the development of rental housing and enacting a permit requirement for single-family rentals that exempted renters who were “related by blood” to the homeowners.

We suspect that Air Force Colonel Rob Maness isn't the only person in Louisiana who is going to find this "guidance" somewhat offensive.  Should make for an awkward day for Obama as he tours the state tomorrow to survey damage. 

via http://ift.tt/2bctg01 Tyler Durden