The U.S. Bureau of Economic Analysis (BEA) has published gross domestic product (GDP) figures for the fourth quarter of 2016 by state. According to the BEA data released on Thursday, real GDP increased in every state and the District of Columbia for that time period.

GDP by state growth ranged from 3.4 percent in Texas to 0.1 percent in Kansas and Mississippi. Finance and insurance; retail trade; and professional, scientific, and technical services were the leading contributors to U.S. economic growth in the fourth quarter.

Overall, growth was pretty even when states are combined to regions. The GDP share of those regions didn’t change much, comparing year-over-year fourth quarter figures.

You will find more statistics at Statista

As shown in the Statista chart above, the GDP has a strong correlation with how many people live in those areas. It doesn’t come as much of a surprise that the Southeast, which has the combined population of 12 states, amounting to approximately 83 million (or a quarter of U.S. citizens), also has the biggest GDP share, standing at 21.4 percent of total GDP. The thinly populated Rocky Mountain area (12 million inhabitants) has a share of 3.4 percent of the GDP.

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Correspondents from Time Magazine recently dined at the White House in the famed ‘blue room’ and were treated like savage animals. All went well with the enemies of America until dessert was prepared and served. As unbelievable as it might seem, the President made sure he was served not one, but TWO, scoops of iced cream, while everyone else got just 1.

These revelations have led to new outrage on the left, with the people demanding swift resignation from the President.

Trump takes TWO scoops of ice cream while everybody else gets ONE! Arrogant Asshole! #impeachTrump #IceCreamGate

— Impeach Donald Trump (@ImpeachPOTUS) May 13, 2017

Others on the right point out that President Obama was once seen with two scoops inside of a waffled cone.

THIS JUST IN: Shocking Photo Reveals Obama Got 2 Scoops AND a Waffle Cone! Possible 3rd Scoop in Cone? #LockHimUp #ScoopGate @TIME @CNN http://pic.twitter.com/SK9zR8LUUE

— ??Nikki (@Snikk) May 14, 2017

Personally, I think the President was being generous, as I’d ensure the bastards from Time would’ve received nothing at all.

At dinner parties, especially when hosting, I am served 3 scoops of iced cream, everyone else 00.00

— The_Real_Fly (@The_Real_Fly) May 13, 2017

CNN provides coverage on this important topic.

Content originally published at iBankCoin.com

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Authored by Brian Cloughley via The Strategic Culture Foundation,

In the week of World Press Freedom Day the New York Times carried one of its holier-than-thou and unintentionally ironical editorials, this time titled «Donald Trump Embraces Another Despot». Seeing the headline, the world could be forgiven for asking which one it might be, this time, and eventually the Editorial Board revealed the target of their displeasure to be President Duterte of the Philippines, an unpleasant morsel of filth who had just been invited to visit the United States by President Donald Trump, who is also an unpleasant morsel of filth.

In the run-up to identifying Mr Duterte as the object of its disapproval, the Times observed that «for the most part American presidents, Republican and Democratic, have believed that the United States should provide a moral compass to the world».

A moral compass? That rang a bell, because one person who used this phrase recently was the US Ambassador to the United Nations, the egregious Nikki Haley, who declared at her confirmation hearing that she will «speak up against anything that goes against American values», because «we have always been the moral compass of the world». What nonsense.

Many Americans have been horrified at the way in which their leaders have spun America’s moral compass over the years, and it is barely credible that anyone could utter such a phrase with sincerity.

Past presidents may have paid lip-service to such ideals, but few have pursued policies that would in any way indicate that the United States of America was providing a global moral compass. Post World War II, Washington’s ethics were blasted into pieces by the Pentagon’s evil fandangos in Vietnam and surrounding countries, where the effects of its massacres, bombings of cities and towns, and use of the chemical Agent Orange are still being suffered.

Ironically, the New York Times carried a piece in 2014 titled Agent Orange’s Long Legacy, for Vietnam and Veterans, which stated that «the war has not ended for many of the 2.8 million [US] servicemen and women who went to Vietnam. These ailing veterans are convinced that their cancers and nervous disorders and skin diseases — not to mention congenital maladies afflicting some of their children — are a result of their contact with Agent Orange». The writer claimed that «Often enough, that linkage has not been established incontrovertibly», which is a contemptible get-out, but the swinging moral compass went off the wall when he averred that the «Vietnamese accept almost as an article of faith that America’s aerial and ground spraying poisoned their environment, perhaps for decades to come, and is to blame for severe birth defects that afflict hundreds of thousands of their children. Whether that is indeed a reality has not been definitively established».

The poison of Agent Orange has indeed continued, as evidenced by many reports, one of the latest being on 4 April 2017 that «on a hill above his home, former soldier Do Duc Diu showed me the cemetery he built for his twelve children, who all died soon after being born disabled. There are a few extra plots next to the existing graves for where his daughters, who are still alive but very sick, will be buried». And it was Presidents Kennedy, Johnson and Nixon who bore responsibility for the vile despoliation of a region and the deaths of so many of its innocent citizens.

Moral compass? You’ve got to be joking.

Then the Editorial Board excelled itself by pronouncing that the Presidents of the United States have been «encouraging people to pursue their right to self-government and human dignity and rebuking foreign leaders who fall short».

The list of countries whose people have been actively discouraged by US Administrations from «pursuing their right to self-government» is long and depressing, and when there was movement to support people who want democracy the usual result was catastrophe. That this statement was made during Press Freedom Week was indeed ironic, because it was also reported that «Washington is working to push through contracts for tens of billions of dollars in arms sales to Saudi Arabia, some new, others in the pipeline, ahead of President Donald Trump's trip to the kingdom this month». He is visiting a dictatorship where, as his own State Department acknowledges, «civil law does not protect human rights, including freedoms of speech and of the press». Moral compass, anyone?

President Duterte is a gross violator of human rights and entirely without any moral sense. As noted on CNN, he is «the thug President of the Philippines — our ally. Here’s a man who has bragged about committing murder . . . and who just happens to be presiding over an anti-drug operation that by some estimates has involved the extrajudicial killing of some 7,000 people».

But there have been and continue to be many similar despots around the world whom the United States and the New York Times have supported for years. Take the truly evil Park Chung-Hee of South Korea with whom President Kennedy «reaffirmed the strong bonds of friendship traditionally existing between the two countries» and who lasted through Presidents Johnson, Nixon, Ford and even the faintly morally-conscious Carter, until Park’s assassination in 1979. Where was the moral compass in these hideous years in which Park was a valued ally of the United States?

Then there was the brutal Suharto of Indonesia (1967 to 1998; Johnson, Nixon, Ford, Carter, Reagan, Bush the First, Clinton) about whom in 2015, fifty years after Suharto’s most appalling massacres, the New York Times carried a piece acknowledging that «with American support, more than 500,000 people were murdered by the Indonesian Army and its civilian death squads. At least 750,000 more were tortured and sent to concentration camps, many for decades». Reagan liked Suharto and in a speech went so far as to spin his moral compass back-to-front and say that «tonight we welcome good friends back to the White House» because he considered his dictator guest to have «clear-sighted recognition of where the interests of both our nations lie».

Of course Suharto recognised American interests — just as present-day dictators recognise them and know that although Nikki Haley and Secretary of State Rex Tillerson and the Tweeter-in Chief, Donald Trump, should, as Haley proudly announced, «speak up against anything that goes against American values», they’ll do that selectively. They adopt this approach because although US values are Constitutionally and morally at variance with those of all the Gulf dictatorships, for example, they are subject to modification in interpretation as they go up the gently-sloped moral ladders of the Congress and the Administration.

There are never any public rebukes for the Gulf dictators, in spite of the State Department recording that they are intolerant bigots with no regard for human rights.

Washington declares Saudi Arabia to be «a strong partner» in spite of it being noted in the report on human rights that its citizens have no «ability and legal means to choose their government» while there are «restrictions on universal rights, such as freedom of expression, including on the internet, and the freedoms of assembly, association, movement, and religion; and pervasive gender discrimination and lack of equal rights that affected most aspects of women’s lives».

It would be refreshing if the New York Times Editorial Board were to get hold of America’s moral compass and encourage the President to rebuke the monarchy of Saudi Arabia for its long-standing, embedded and comprehensive contempt for the rights of Saudi citizens.

By all means criticize Trump for cosying up to the savage Duterte – but spare us the claptrap about moral compasses.

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When we looked at subprime auto delinquencies most recently, we found some troubling trends: first, in February, we showed that 61+ day delinquencies in General Motors’ subprime securitization book would support a rather bleak thesis for future auto sales, and specifically the demand side of the equation, with January 2017 delinquency rates soaring to the highest levels since late 2009/early 2010. 

Ironically, this hasn’t stopped lenders from providing financing, and according to Morgan Stanley since 2010, the share of Subprime Auto ABS origination that has come from deep subprime deals has increased from 5.1% to 32.5%, suggesting that yield-starved buyside will put “other people’s money” into anything as long as it provides a slightly higher yield.

Meanwhile, the subprime shock has already impacted the broader market, observed with the latest monthly auto sales data which declined four month in a row heading into May. An even bleaker picture of the subprime market emerged a month later when looking at the latest securitization analysis from Morgan Stanley which revealed that 60+ day delinquencies at 266 subprime auto ABS deals were surging – despite low unemployment, high consumer confidence and debt-to-income ratios at 30-year lows – back to ‘great recession’ levels. Meanwhile, loss severities were also shooting higher just as used car prices were sliding.

 

In part, this tied in with the overnight look at the “flood of off-lease vehicles“, according to which by the end of 2019, an estimated 12 million low-mileage vehicles are coming off leases inked during a 2014-2016 spurt in new auto sales, which is set to put even more pressure on used (and new) car prices for the foreseeable future.

As Reuters noted, a computer search for available used vehicles within 150 miles of Reel revealed an eye-popping figure: 668 Escapes. That’s enough to put more than 40 percent of the inhabitants of this small northeastern Ohio town, population 1,600, into the popular crossover. A search for the Chevrolet Equinox, a comparable crossover, showed 461 available.

“The automakers have flooded the market,” said Reel, owner of Reel’s Auto in Orwell, Ohio, about 40 miles east of Cleveland.

The above trends validate a recent bearish Morgan Stanley analysis, which forecast that the plunge in used car prices is just getting started, and in a bear case, the bank sees used car prices dropping by up to 50% over the next 5 years.

 

* * *

However, in an even more troubling development for US consumers, it now appears that the other shoe for the US auto market has finally also dropped, and according to analyses by both Morgan Stanley and S&P, losses on prime auto loans are also surging.

In the latest note by Morgan Stanley’s Jeen Ng, the analyst reports that “fundamental performance deterioration has not been confined to Subprime. Both 60+ day delinquencies and default rates in Prime ABS pools have nearly doubled from their post-crisis lows.”

A slightly better picture – at least according to MS data – emerges in terms of loss severities. Still, while subprime losses are far worse, the deterioration among prime loans is unmistakable: compared to peak levels, 60+ day delinquencies in Prime auto loan pools are roughly 65% of the way back, whereas Subprime pools are close to 95% of their peak levels. On the default rate side, the deterioration is somewhat more subdued, with Subprime over 80% of the way back to prior peaks while Prime has yet to reach the 45% mark.

One troubling observation, as confirmed in the recent Fed Senior Loan Officers Survey is that credit standards have continued to ease: as in Subprime, some of the ongoing Prime deterioration can be attributed to a relaxing of credit standards.

 

Aggregate credit scores have decreased by about 5 points, which while easier is not even half as much as the 10+ point deterioration in Subprime. The same is true for longer origination terms. Most Prime issuers have extended loan terms by 3-4 months over the past 5 years. In Subprime, extension in most cases has been longer than 10 months. These easier standards can help explain both why delinquencies and defaults are higher, according to Ng. Also, keep in mind, there is a limit as to how far Prime issuers can expand their credit box in the form of lower credit scores before the deals become Subprime.

Some more observations from Morgan Stanley, which finds a particular deterioration in recent loan issuance at Huyndai and Mercedes:

As auto lenders expand their credit box to weaker credit borrowers, we should expect to see poorer credit performance among more recent deals relative to the more seasoned ones.

 

 

Across the OEM originators above, we see a very consistent shift in lending standards over time – marginally longer loan terms, higher credit scores and lower used car composition. Overall, the longer loan terms and higher credit scores have offsetting effects on fundamental performance. If we look at the 60+ delinquencies and 3-month CDR curves by vintage, we don’t necessarily observe performance  deterioration over time, and for some issuers we even see relative outperformance among recent deals. However, we do see higher severities among recent vintages, which we can at least partly attribute to the decline in used car values.

 

HART (Hyundai) and MBART (Mercedes Benz) serve as exceptions to the above, with a higher % of used vehicles and FICO migration of less than +10 points over the last 7 years. They are also the two shelves which show the most pronounced performance shift. TAOT (Toyota) also extended their credit score by less than 10 points, but their change in origination loan terms has been minimal and they have a lower  composition of used vehicles over time.

Additionally, in terms of loss severities, the bank finds that all originator types appear to be trending higher in similar fashion, with non-bank originators printing the lowest recovery values. OEM originators overtook bank originators to see the highest recovery values last year.

* * *

In a separate, and even more downbeat report, S&P Global Ratings analyst Ann Matin noted that losses in bonds tied to “prime auto loans have surged surged in recent months from a year ago, hurt by falling recoveries” and notes that prime net losses rose to 0.73% in February from 0.57% in same month last year. According to S&P, bonds from some issuers that have become a larger share of the index, including Mechanics Bank’s California Republic and TCF Financial Corp., and both are contributing to those higher losses.  Additionally, the rating agency referred to the abovementioned loan losses at Huyndai, stating that “we’ve increased our expected cumulative net loss levels for certain issuers, including Hyundai’s most recent transaction, HART 2017-A.”

Margin also wrote that prime asset-backed deals issued in 2015 seem to be performing worse, comparatively, than those sold between 2010 and 2014, and the deterioration in loans made to strong credit borrowers has forced S&P to revise its net loss expectations for various bonds.

* * *

To summarize: subprime loan losses have been surging alongside loss severities (with the buyside happy to soak up any and all issuance, regardless of underlying fundamentals), as recoveries slide, and in recent months this deterioration has finally shifted over to prime loans. Meanwhile, used car prices are tumbling, while new car sales have declined for 4 consecutive months as auto loan demand among tapped out consumers has tumbled. Meanwhile, millions of used cars are about to hit the market as they come off lease, which in turn will further pressure used car prices and new car sales.

So what happens next?  Here, we’ll repeat what we concluded last night:

Unstable used car prices will almost certainly reduce OEM reliance on leases as the implied 3-year depreciation (or residual values, if you prefer) will make them all but completely uneconomical: remember, Americans only care about that monthly payment.  Meanwhile, the relative value between used and new cars will tilt heavily in favor of the used market.  Thankfully Americans will still be able to buy that Mercedes they require to get back and forth from their minimum wage jobs, while maintaining a monthly payment of $500 or less, but it will just have to have 30,000 miles on it.

Of course, the OEMs of the world won’t admit that their game is over until it’s way too late.  So, they’ll keep right on producing new cars to cover a 17-18mm SAAR environment up until the point they face an outright revolt from their dealer networks.  At that point, however, dealer inventories will be so high that Detroit will be forced to shutdown for months on end while new car prices are slashed to reduce the massive inventory glut.  Tanking new car prices will put even more pressure on used car prices which will mark the beginning of the death spiral that will result in a new round of inevitable auto bankruptcies, catalyzing the next economic contraction… assuming one hadn’t started already.

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Sound money advocates scored a major victory on Wednesday, when the Arizona state senate voted 16-13 to remove all income taxation of precious metals at the state level. The measure heads to Governor Doug Ducey, who is expected to sign it into law.

Under House Bill 2014, introduced by Representative Mark Finchem (R-Tucson), Arizona taxpayers will simply back out all precious metals “gains” and “losses” reported on their federal tax returns from the calculation of their Arizona adjusted gross income (AGI).

If taxpayers own gold to protect themselves against the devaluation of America’s paper currency, they frequently end up with a “gain” when exchanging those metals back into dollars. However, this is not necessarily a real gain in terms of a gain in actual purchasing power. This “gain” is often a nominal gain because of the slow but steady devaluation of the dollar.  Yet the government nevertheless assesses a tax.

Sound Money Defense League, former presidential candidate Congressman Ron Paul, and Campaign for Liberty helped secure passage of HB 2014 because “it begins to dismantle the Federal Reserve’s monopoly on money” according to JP Cortez, an alumnus of Mises University.

Ron Paul noted, “HB 2014 is a very important and timely piece of legislation. The Federal Reserve’s failure to reignite the economy with record-low interest rates since the last crash is a sign that we may soon see the dollar’s collapse. It is therefore imperative that the law protect people’s right to use alternatives to what may soon be virtually worthless Federal Reserve Notes.” In early March, Dr. Paul appeared before the state Senate committee that was considering the proposal.

“We ought not to tax money, and that’s a good idea. It makes no sense to tax money,” Paul told the state senators. “Paper is not money, it’s a substitute for money and it’s fraud,” he added, referring to the fractional-reserve banking practiced by the Federal Reserve and other central banks.

After the committee voted to pass the bill on to the full body of the Senate, Dr. Paul held a rally on the grounds of the state legislature, congratulating supporters of the measure and of sound money.

Paul told the crowd that “they were on the right side of history” and that even though those working to restore constitutional liberty to Arizona and all the states “had a great burden to bear,” there are “more than you know” working toward the same goal.

Referring to the bill’s elimination of capital gains taxes on gold and silver, the sponsor of the bill, State Representative Mark Finchem, said, “What the IRS has figured out at the federal level is to target inflation as a gain. They call it capital gains.”

Shortly after the vote in the state Senate, the Sound Money Defense League, an organization working to bring back gold and silver as America’s constitutional money, issued a press release announcing the good news.

“Arizona is helping lead the way in defending sound money and making it less difficult for citizens to protect themselves from the inflation and financial turmoil that flows from the abusive Federal Reserve System,” said Stefan Gleason, the organization’s director

As a reminder, in 1813 Thomas Jefferson warned, “paper money is liable to be abused, has been, is, and forever will be abused, in every country in which it is permitted.” This is also why the men who drafted the Constitution empowered Congress to mint gold and silver, sound money, and why they included not a single syllable authorizing the legislature to “surrender that critical power to a plutocracy with a penchant for printing fiat money.”

Slowly, states may be summoning back the days when money was actually worth something. At least 20 states are currently considering doing as Arizona is about to do and remove the income tax on the capital gains from the buying and selling of precious metals: some state legislatures, including Utah and Idaho, have taken steps toward eliminating income taxation on the monetary metals.  Other states are rolling back sales taxes on gold and silver or setting up precious metals depositories to help citizens save and transact in gold and silver bullion. 

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In an apparent snub to the administration's trade policy plans, GE CEO Jeff Immelt – who sits on the Trump-appointed manufacturing council – said he "very supportive" of NAFTA adding that he was "optimistic about Mexico."

Just a day after we showed Mexico's Manufacturing industrial production surge 8.5% year-over-year – the greatest surge since August 2010…

 

And expectations for employment in US manufacturers are tumbling…

 

Reuters reports that GE Chief Executive Officer Jeff Immelt said on a visit that Mexico had great potential and was not properly understood. He touted the conglomerate's Mexican operations and the trade deal binding Mexico, Canada and the United States.

"GE as a company, we're very supportive of NAFTA," Immelt told employees at an event to mark the expansion of operations in the northern city of Monterrey. He said the trade accord could be modernized, as Mexico has argued.

 

The GE boss said trade meant "win-win" opportunities across North America.

 

"We will continue to work constructively in the context of wanting to see a close relationship between the U.S. and Mexico," he said, noting that GE's exports to the rest of the world from Mexico were worth $3 billion.

 

"We're optimistic about Mexico, we're optimistic about what we can do here," Immelt added, saying Latin America's no. 2 economy would be a "big part" of GE's future.

As a reminder, Immelt sits on a Trump-appointed manufacturing council (that Mexico has targeted for lobbying as Mexico and Canada push U.S. business leaders to defend NAFTA).

While Trump touts a "Buy American" policy and has railed against U.S. companies moving operations to Mexico (threatening to ditch NAFTA, a lynchpin of the Mexican economy, if he cannot rework it to secure better terms for the United States), unlike some U.S. companies, GE has not backed off plans in Mexico, risking broadsides from Trump on Twitter.

How long before Mr. Immelt gets a tap on the shoulder?

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Authored by Mike Shedlock via MishTalk.com,

On occasion, I get emails from a commercial banker friend who lives in California. Today he provides anecdotes from a business banker’s perspective.chair
 

Hey Mish

 

It’s been a while since my last email. Here are some views from this business banker’s chair.

 

I had lunch with a financial planner today, and he said the new tax plan coming from DC would eliminate tax-deductibility of state taxes. While Federal tax rates might go down a little, the net impact would be higher total taxes via higher total federal taxes due to the loss of writing off state taxes. At least, that is the view for those of us in high state income tax states like CA. He already had clients exiting the state.

 

The gentleman I had lunch with today is a lifelong financial planner, mostly on the insurance side. He stated that the insurance industry today is in worse shape than that of the banking industry during the prior recession, and yet we hear very little about it. If so, we both agreed that the world isn’t ready for an insurance industry meltdown anything like that of the Banking industry during the last recession.

 

I provide financing to a lot of subcontractors (the trades). While visibility 9-12 months looking forward has looked good for the past few years, I finally have a client (a framing contractor for the major home builders) that has said something to the contrary. He stated that some of his major home builders are starting to see some issues in selling inventory in CA. Without going into specifics, he also stated that he senses something is changing in their world.

 

I’ve seen a spike in the number of unqualified (financially and expertise) in people who want to get into flipping homes. It’s becoming vogue amongst those who lack the qualification to do it at a time when the values in the San Francisco Greater Bay Area have never been higher. Somehow, 2007 peak real estate values were crazy, but the value today that are higher than 2007 are justifiable/sustainable. That’s a classic late cycle red flag.

 

During the last 3-4 years, I’ve seen more people who seek to finance new restaurants than any time in the past 20 years. This industry seems frothy. With rising rental costs for space and higher minimum wages for staff, I’m seeing pressure on the cost structure of existing operators squeeze them, while people are rushing to build out a new restaurant.

 

Finally, for the past 12-18 months, I’ve been flooded with new loan requests. I haven’t been this busy with new loan requests since the last cycle Top. Again, this seems like another last cycle red flag.

 

Hope all is well

 

“BBC”

I had a friend tell me one time: “Mish if you ever get the urge to start a restaurant, please call me. I will talk you out of it. Some succeed, but most lose their investment or struggle for years barely surviving.”

Everyone thinks they are different. But they aren’t. After a run up in property values, rising minimum wages, and increased competition, this is the worst time in the last 10 years.

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I’m making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do… http://ift.tt/2qErQrj

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In the past few months we have extensively covered the end of China's credit impulse…

People Are Suddenly Worried About China (Again)

As the following chart from Goldman demonstrates, it has been China where policy uncertainty has stealthily exploded in the past three months according to policyuncertainty.com, while making virtually no new headlines.

UBS Reveals Who Was Responsible For The Global Reflation

Here is the visual confirmation of where the global reflation trade has "come" from:

China’s Credit Excess Is Unlike Anything The World Has Ever Seen

The chart below shows the amount of credit created as a percentage of GDP during the five years prior to major downturns globally.

UBS Calls It: "The Global Credit Impulse Suddenly Collapsed To Negative"

As a result: whereas back in Jan '16 the global credit impulse was positive to the tune of 3.8% of global GDP (of which China comprised 3.5% of global GDP) it has now fallen back to -0.1% of global GDP (China's contribution is -0.3% of global GDP).

RBC: We Are "Losing The Impulse"

Net / net, “inflation” remains the most critical driver of cross-asset pricing—so if ‘price is news’ and inflation is preparing to fade further (without any seeming ‘US fiscal policy’ booster shot coming near- to medium- term), be ready for negative impact on risk-assets.

*  *  *

But now, as Citi writes, some market commentators in recent weeks have highlighted that perhaps there is a major risk that consensus opinion is again overlooking the influence of China’s credit cycles, and thus perhaps overstating the potential contribution of future Chinese demand growth to the global outlook. And Citi's EM strategists think that the recent macro-prudential tightening in China could possibly contribute to more negative spillovers in the coming months.

As Citi notes, as China turns to tighter monetary conditions, this tends to be quite bearish for the hard data…

Across the board, on average, these charts suggest material downside risks to YoY growth in measures of domestic activity.

As Citi concludes, tighter monetary conditions in China, if sustained, may mean that the period of unexpectedly strong Chinese activity growth, which started in 2016 Q1, is coming to an end. Despite continuing to use higher money-market rates to discourage leverage, the PBoC have enough in their toolkit to ease liquidity conditions if needed. But investors should be warned that volatility may not be contained till the end of the year…

The lagged response of the world's equity markets to Chinese liquidity is hard for even the most ignorant asset-gatherer to ignore – or argue causally.

And so that is it – the one chart that ties suppressed global equity volatility to the credit cycle in China – this will not end well.

China’s contribution to the broader global recovery may be waning. Further legs to the global reflation theme may now rely even more so on the Trump administration’s ability to deliver on key campaign promises, and gioven this week's debacles, those seem less likely than ever.

And the bottom line is simple – and even if China folds on its monetary tightening path, the next phase of volatility is baked into the cake.

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Authored by Wayne Madsen via The Strategic Culture Foundation,

In testimony before the Senate Armed Services Committee, U.S. National Security Agency (NSA) director Admiral Mike Rogers joined the chorus of other U.S. law enforcement and intelligence officials who are using Russia to leverage their own agencies into having a wider role in U.S. elections. In a statement to the committee on May 9, Rogers positioned NSA to oversee a wider role in conducting surveillance over elections, not only in the United States, but in other countries, including France and Britain.

After accusing Russia of conducting «election hacking» of the 2016 U.S. presidential election, while offering no proof to back up his allegations, Rogers proceeded to tell the committee and its reflexively anti-Russian chairman, John McCain, that NSA also warned France, Britain, and Germany of Russian election penetration and offered up the assistance of the American spy agency to the targeted countries. Of course, there was no mention that NSA, thanks to the revelations by former NSA contractor Edward Snowden, has thoroughly penetrated the communications systems of France, Britain, and Germany and their political leadership.

Rogers stated, «We [NSA] had talked to our French counterparts prior to the public announcements of the events publicly attributed this past weekend and gave them a heads up. 'Look, we're watching the Russians. We're seeing them penetrate some of your infrastructure'». Rogers added, «We're doing similar things with our German counterparts, with our British counterparts, they have an upcoming election sequence». The NSA’s «Tailored Access Operations» branch is strongly believed to have a sub-group that specializes in foreign election tampering, not from a defensive position but as an offensive tactic in conducting clandestine «regime change» operations.

The neoconservative think tank-media consortium in Washington, DC has tried to make Russia the villain in election engineering, although there is no actual evidence to prove it. If Russia, indeed, has the capabilities to influence elections abroad, the world would have witnessed entirely different outcomes since the British people voted in the Brexit referendum to depart the European Union (EU). Domestic British politics, including the sellout to corporations of British workers by the Labor Party, the influx of unskilled workers into the United Kingdom from poorer EU member states, and disgust with decisions made by «Eurocrats» in Brussels, lie at the heart of the Brexit vote, not some nefarious plot cooked up in Moscow.

Neocon circles have attempted to link several elections since the Brexit referendum to Russian interference. When one examines the record, there is not one iota of evidence suggesting any Russian involvement. Two days following the «yes» vote in the Brexit referendum, another NATO nation conducted an election for president. Iceland elected Guthni Johannesson as president. Johanneson’s biggest issue since taking office has not been to take a stand against NATO’s decision to restart operations at its old Keflavik airbase, but by calling on a ban on pineapple as a pizza topping. If Russia wanted a president who would have been beneficial to its interests, it would have actively backed Asthor Magnusson, Iceland’s perennial peace candidate. Magnusson called for the transformation of the NATO military base in Keflavik into the headquarters of a United Nations peacekeeping force. Alas, Mr. Magnusson received 615 votes to Johanneson’s 71,356. It is doubtful that Russia even noticed this election in a strategic NATO member state, let alone interfered in it.

The day following the Icelandic election, Spain, a NATO member, held a parliamentary election. Had Russia possessed the election tampering capabilities claimed by NSA, it is doubtful that the pro-NATO and pro-EU conservative government of Prime Minister Mariano Rajoy would have one. That victory should have gone to the leftist coalition under the «Unidos Podemos» flag. But «Unidos Podemos» won only 71 seats to the conservatives’ 137. The pro-EU/NATO Socialist Party garnered 90 seats. There is not one bit of evidence of Russian involvement in the Spanish election.

The July 2 parliamentary election in America’s ally Australia also saw no provable Russian involvement. The governing Liberal/National coalition of Prime Minister Malcolm Turnbull won 76 seats to the Labor Party’s 69. Both parties are unrestrained sycophants of U.S. foreign policy. The only party that, in any way, might be beneficial to Russian interests, the Greens, won a single seat.

On September 11, 2016, NATO member Croatia held a parliamentary election. This was one election that was very close. However, the right-wing and pro-NATO Croatian Democratic Union (HDZ) edged out the equally pro-NATO/EU Social Democratic Party by three seats, 59 to 56. Although there is little difference between the two main parties on NATO and the EU, the Social Democrats would have been better for Russian interests, inasmuch as the President of Croatia, Kolinda Grabar-Kitarovi?, a former NATO official, is a member of the HDZ and not popular with the Social Democrats.

On October 2, 2016, the Colombian peace referendum with the leftist armed opposition, the Revolutionary Armed Forces of Colombia (FARC), failed in a razor-thin 50.22 to 49.78 percent vote. The agreement was backed by all of Russia’s Latin American friends, including Venezuela, Cuba, Nicaragua, and Ecuador. If any country played a part in engineering the referendum to arrive at a «no» vote, it would have been the United States, which never liked the idea of the FARC playing a legal role in Colombian politics. After all, the CIA and NSA sank billions of dollars into «Plan Colombia», which was designed militarily defeat the FARC.

The same day as the Colombian referendum, Hungary, a NATO nation, held one on whether to reject the EU’s mandatory quotas for relocating mainly Muslim migrants from the Middle East and elsewhere. The government of Prime Minister Viktor Orban, who is friendly to Russia, backed a «no» vote. Although the «Yes» side went down to defeat, garnering only 1.64 percent to an overwhelming 98.36 percent «No» to the EU quotas, only 44 percent of the eligible electorate voted, nullifying the referendum’s decision. If Russia had the capabilities it is accused by the Western intelligence agencies of possessing, clearly it could have engineered an increase in the total number of voters in the Hungarian referendum, ensuring a success for Orban and a bitter defeat for the EU.

On October 16, the Montenegro election resulted in a victory for the pro-NATO membership Social Democrats. The Social Democrats won 36 seats to 18 seats for the opposition Democratic Front, which consists mainly of Serbs and Communists. Not content with its victory, the Social Democrats later claimed that Russia tried to engineer a coup against their pro-NATO Prime Minister, Milo ?ukanovi?. There were practically no substantiated allegations of Russian interference in the October 16 election, so the Sorosites and neocons had to come up with another fake conspiracy to be blamed on Russia.

The October 23 elections in Lithuania resulted in a win for the Farmers and Greens Union, which votes with the generally anti-NATO Green bloc in the European Parliament. However, there were no allegations from the George Soros-controlled media and Western intelligence services that Russia hacked the Lithuanian election. Is that because Soros money constantly flows into the coffers of the Greens in Europe?

After the November 8 upset of Trump over Hillary Clinton, there were two presidential elections in NATO member Bulgaria and non-member Moldova. The victors of both elections were friendly to Russia, resulting in unsubstantiated charges of Russian interference. The second round of the Austrian election on December 4 went to anti-Russian Green candidate Alexander Van der Bellen, a native of Estonia, and not to his Euroskeptic opponent Norbert Hofer. There were no charges that Russia interfered in the 53.8 to 46.2 win by Van der Bellen. Those charges only arise when politicians friendly to Russia and opposed to NATO and the EU are victors. That is the Soros-neocon electoral math.

In 2017, the Dutch parliamentary and French presidential elections, as well as the Italian constitutional referendum, were predicted to be hacked by Russians. The anti-EU right lost in the Netherlands and France. The Italian government reform referendum was defeated with spurious charges of Russian involvement.

With nothing else left in their propaganda bags, people like Admiral Rogers of the NSA are now advancing the goal posts to the British and German elections to accuse Russia of nefarious plans. The record speaks for itself, however. If Russia had such capabilities, why did it not use them in Austria, France, the Netherlands, Montenegro, Iceland, Hungary, Colombia, and Spain where its interests were clearly at stake? The answer is that Russia’s «cyber-election heist» capabilities exist merely in the minds of such Cold War «nervous Nellies» as Admiral Rogers, John McCain and his partner Senator Lindsey Graham, and the recently-fired Federal Bureau of Investigation director James Comey.

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