Tag: finance

Submitted by Lance Roberts via RealInvestmentAdvice.com,

At the beginning of this month, I discussed the monthly statistics for March. To wit:

“It is often the case that the month following a negative return month will post a positive return as markets bounce from oversold conditions. However, as shown below, this is not always the case.

 

The chart below shows both February and March returns going back to 1957. During that period, the month of March has posted gains following a February loss 15 times, and losses following a February decline 13 times. Again, at 53.6%, the odds aren’t much better than a coin toss at best.”

One interesting note about the chart above is the sharp increase in monthly market volatility since the turn of the century as computers, online-trading, and algorithms took over the markets. Also, QE programs accelerated returns during the post-financial crisis period which has positively skewed the statistical analysis.

While the month is not over as of yet, the current 5.37% advance is within the context of previous market rallies since 1997.

With the majority of short-covering appearing to be complete, and volume on a steady decline, we may have seen a bulk of the reflexive bull rally already. As noted by Dana Lyons earlier today:

Always useful to observe behavior on days like yest: e.g. Rydex traders covered signif % of shorts;bear assets not low, but lowest since 2/1

— Dana Lyons (@JLyonsFundMgmt) March 24, 2016

 

With April wrapping up the seasonally strong period of the year, the seasonal adjustment boost to economic data coming to an end, and earnings growth remaining elusive – the summer months could prove to be problematic. For now, we will have to wait and see what develops.

With that, I just want to wish you all a very happy, safe and joyful Easter weekend.

---

CENTRAL BANKING

• How To Rob A Central Bank by Bloomberg
• New Rules For The Monetary Game by Raghuram Rajan via Project Syndicate
• Fed Funds Fanaticism Will Keep Failing by Louis Woodhill via RCM
• Central Banks Are Doing The Unthinkable by Mehreen Kahn via The Telegraph
• Why Janet Yellen Is Toast by Pater Tenebrarum via Acting-Man
• The Biggest Short by Robert Gore via The Burning Platform

---

MARKETS

• April Will Decide Markets Fate by Avi Gilburt via MarketWatch
• Here’s Why Nobody Believes This Rally by Tyler Durden via ZeroHedge
• Dividend Cut List Continues To Grow by Ironman via Political Calculations
• It’s Time – The Rally Is Finished by Macroman 
• 2016-2018 Looking A Lot Like 2007-08 by Doug Kass via Real Clear Markets
• Profits Gap Is A Warning To Investors by Alex Dumortier via Motley Fool
• Odey: “No Longer A Market But A Battlefield” by Julia LaRoche via BI
• Clark: The Nikkei Leads The Bust In The S&P 500 by Tyler Durden via Zerohedge

---

OIL

• Saudis Won’t Let Oil Stay Above $40 by Panos Mourdoukoutas via Forbes
• How Bad Will Losses To Banks & Investors Be? by Yves Smith via Naked Capitalism
• Why Oil Prices Are About To Plunge by Tyler Durden via ZeroHedge
• Don’t Be Fooled By Spike In Oil Prices by Matt Egan via CNN Money

---

OTHER GOOD READS

• Americas’s Retirement Crisis Getting Worse by Philip Moeller via Money
• Why A 100% Stock Portfolio Could Hurt You by John Coumarianos via MarketWatch
• Market Remains Obscenely Overvalued by John Hussman via Hussman Funds
• Yellen – Armed, Dangerous & Lost by David Stockman via Contra Corner
• Mind The Gap by Salil Mehta of Statistical Ideas
• It’s Hard Being A Bear by Joe Calhoun via Alhambra Partners
• Bollinger Band Squeeze Signaling A Change? by Steve Deppe via SeeItMarket
• 3 Critical Things To Know Before Investing by Capitalist Exploits via ValueWalk
• The Wealth Effect Could Shift Into Reverse by Jesse Felder via The Felder Report
• Stock Rally Getting Too Complacent via Dana Lyons via Tumblr

---

“Successful preservation of capital must overcome the handicaps of socialistic governments, supposedly to help the masses.” – Gerald Loeb

via Zero Hedge http://ift.tt/1WOXNTX Tyler Durden

“It’s almost like the timing belt on the global growth engine is a bit off or the cylinders are not firing as they should.”

That’s from WTO chief economist Robert Koopman, and it’s a quote we’ve used on a number of occasions. Koopman is referring to the fact that for several years in a row, the rate of growth in global trade has lagged GDP growth. That’s a problem for two reasons: 1) GDP growth is hardly robust as it is, and 2) before the recent downturn, the last time trade growth underperformed the rate of economic expansion was two decades ago.

As WSJ noted last autumn, trade growth has averaged just 3% per year. That’s half of the 1983-2008 average.

“It’s fairly obvious that we reached peak trade in 2007,” Scott Miller, trade expert at the Center for Strategic and International Studies, a Washington, D.C., think tank told the Journal.

Since then, the evidence has continued to pile up that global trade has flatlined. Freight volume in the US fell for the first time in three years in November, while monumental declines for Class 8 truck sales vividly demonstrate the extent to which commerce is simply grinding to a halt across the US economy. As for global trade, well, the Baltic Dry speaks for itself.

“It is worse than in 2008. The oil price [is low] and freight rates are lower. The external conditions are much worse,” Maersk CEO Nils Andersen said, just last month. Maersk Line – the company’s golden goose and the world’s largest container operator – racked up $182 million in red ink last quarter alone.

In this environment the “answer” has been competitive devaluation – i.e. a currency war. Although this is, in the end anyway, a zero sum game, until recently there was still some hope that key EMs could rely on devlaued currencies to help cushion their current accounts from the slowdown and restore some semblance of balance and competitiveness.

However, it would appear that, as outlined above, the link between output and trade growth might have been severed sometime in the post-crisis world. If that’s the case, the FX wars may be largely futile and what looks like an undervalued currency might have much, much further to fall – or could simply decline in virtual perpetuity. That’s a rather disconcerting proposition to say the least. Especially for EM.

Below, find excerpts from a new note out of Deutsche Bank where FX strategist Gautam Kalani believes the fundamental relationships officials all take for granted and use to justify the whole “devalue our way to propsperity” line may no longer hold. 

*  *  *

From Deutsche Bank

1) Is the currency war futile? It looks increasingly so.

The fundamental currency-current account relationship is as follows: large currency undervaluation current account improvement currency appreciation. The first link describes the ‘currency war’ argument, whereby a weaker currency leads to an exports pickup and thus a boost to growth. The second link underlines how current account improvement in response to a large undervaluation is an important channel through which large undervaluations can trigger FX appreciation.

There is a concern that this competitive devaluations channel (the first link) may have broken down (to a large extent) because of the collapse in global trade. Global growth today is generating much less trade growth than in the past (chart below). As a result, currency adjustment is not enough to spur growth significantly because global trade is increasingly less important to the overall makeup of GDP. This raises the possibility that the currency war is largely futile, as currency depreciation does not give much of a boost to exports/growth, and certainly much less impetus than in the past.

2) What is the implication of a futile currency war for EM FX? Beware of going long currencies purely on the basis of fundamental undervaluation.

Focusing on EM, lingering growth concerns further increase the perceived need for currency depreciation. However, since currency depreciation does not translate easily into exports improvement, more currency adjustment is probably required than in the past to obtain the same growth/current account impetus; currencies must be more undervalued before substantially improving the current account. In sum, a significant undervaluation of an EM currency may not be sufficient to drive appreciation via the current account channel; rather, even more currency adjustment may be required for some undervalued currencies.

Current accounts, especially in LatAm but also in high-yielding EMEA, still reflect excessive domestic absorption. Improvements have been limited despite large scale FX depreciation. Further, what current account improvement has taken place has been mainly on account of import compression rather than exports – perhaps FX weakness has played some role in this as imports become more expensive with a weaker currency, but a majority of it reflects demand slowdown in EM. Therefore, for currencies running large current account deficits, more FX adjustment may be on the cards before undervaluations start providing material support.

3) Which currencies to be wary of going long purely on the basis of fundamental undervaluation? In EMEA, ZAR stands out as an example.

If global trade growth has collapsed and the currency war is futile, a currency that is heavily undervalued on a fundamental model like BEER or PPP could easily become more undervalued. In this context, the FEER model, which estimates misalignments based purely on the distance of the cyclically- adjusted current account balance from its long-term average, could provide an appropriate warning signal. That is, one should be wary about long a currency on the basis of BEER undervaluation if it is also showing FEER overvaluation, as FEER overvaluation signals that the current account balance is still below its long-term average and therefore has not adjusted by ‘enough’.

*   *   *

We’ve said it before and we’ll say it again: central banks better figure out how to print trade, and fast.

via Zero Hedge http://ift.tt/1SbMK38 Tyler Durden

The “wife” feud, which initially many though was merely a sideshow between Donal Trump and Ted Cruz, has taken a quick turn for the ugly and is escalating dramatically with every passing day, and now that even the National Enquirer has entered the fray, has rapidly devolved to nothing less than the surreal twilight zone.

For those who need a primer of what is rapidly becoming the biggest “issue” in the presidential race, here is a reminder, courtesy of our post from last night “Tough Guy Ted Warns “Sniveling Coward” Trump: “Leave My Wife Alone“:

• Phase 1: Cruz Reps “Cross The Line”, when a “SuperPAC” run by a Cruz supporter launched a Trump ad campaign showcasing a naked posing Melania Trump
• Phase 2: Trumps Warns Cruz: “Lyin’ Ted Cruz just used a picture of Melania from a G.Q. shoot in his ad. Be careful, Lyin’ Ted, or I will spill the beans on your wife!”
• Phase 3: Cruz firez back, warning Trump: Don’t Do The Same Thing To Me That [My Reps] Just Did To You (Or Else!).
• Phase 4: Trump Goes There, retweeting an image “comparing” Heidi Cruz and Melania Trump
• Phase 5: Cruz Goes Full Rambo, says  ‘Donald, you’re a sniveling coward and leave Heidi alone.’

Or, as we summed up, “a Cruz fan uses naked images of Trump’s wife to disparage him to saintly ‘Utah-ans’; Trump pissed; Cruz warns Trump not to reciprocate; Trump shows ugly picture of Cruz’s wife; Cruz unleashes inner Hulk as Trump dares to do what Cruz reps did to him.”

That was just the last few days.

And then the tabloids jumped on board.

Overnight, Trump-linked National Enquirer, alleged that the Texas senator is “hiding five different mistresses.” According to its source, identified as a “Washington insider,” “private detectives are digging into at least five affairs Ted Cruz supposedly had,” and “the leaked details are an attempt to destroy what’s left of his White House campaign.” The supposed affairs are detailed in the Enquirer’s most recent print issue.

National Enquirer: Ted Cruz had 5 affairs – Idk if true (but they did break the Tiger Woods affairs). http://pic.twitter.com/Olof2tPJA8

— Secular Talk (@KyleKulinski) March 25, 2016

Though unconfirmed, the rumor sparked chatter across social media Friday with the hashtag #CruzSexScandal, with reactions, as expected, ranging from one end of the spectrum to the other. 

Considering the source, we doubt there is much veracity to the alleged “Cruz sex scandal”, although the tabloid has had its share of “broken” news stores in the past.

As was to be expected, Cruz immediately denounced the article as “garbage, complete and utter lies” and accused his opponent Donald Trump of being the source of the story as Reuters reports.

“It’s tabloid smear, and it is a smear that has come from Donald Trump and his henchmen,” a clearly perturbed Cruz told reporters at a press conference in Wisconsin, as the battle for the Republican presidential nomination reached new levels of personal rancor.

Trump issued a statement saying he was not responsible for the article.

“I have nothing to do with the National Enquirer and unlike Lyin’ Ted Cruz I do not surround myself with political hacks and henchman and then pretend total innocence,” Trump said in the statement. “Ted Cruz’s problem with the National Enquirer is his and his alone, and while they were right about O.J. Simpson, John Edwards, and many others, I certainly hope they are not right about Lyin’ Ted Cruz.”

In other words, just as Cruz had “nothing” to do with the first naked photo of Melania that started off this latest scandal, so Trump had “nothing” to do with the Enquirer article.

Alas, the damage for Cruz may already have been done: the article exploded on Twitter overnight on Thursday. By Friday morning #CruzSexScandal was a worldwide trending topic on Twitter.

And while Trump has distanced himself from the Enquirer article, very much the same way Cruz distanced himself from the original attack ad, an aide to Donald Trump on Friday did fulfil the businessman’s threat to “spill the beans” on Republican presidential rival Ted Cruz’s wife, Heidi.

As The Hill first reported, Trump spokeswoman Katrina Pierson rattled off a list of attacks three days after Trump first made the threat. 

“Spilling the beans is quite simple when it comes to Heidi Cruz,” Pierson said in an interview with MSNBC’s Steve Kornacki. 

“She is a Bush operative; she worked for the architect of NAFTA, which has killed millions of jobs in this country; she was a member on the Council on Foreign Relations who — in Sen. Cruz’s own words, called a nest of snakes that seeks to undermine national sovereignty; and she’s been working for Goldman Sachs, the same global bank that Ted Cruz left off of his financial disclosure,” Pierson said. 

“Her entire career has been spent working against everything Ted Cruz says that he stands for,” she added. 

Cruz spokeswoman Alice Stewart responded to the remarks in a statement to The Hill, saying, “There’s no low the Trump campaign won’t go.”

Earlier in the MSNBC interview, Pierson said “this isn’t about Heidi Cruz, this is about Melania Trump. Melania Trump was the one that was attacked.”

Incidentally, she is right, even though that means that this most hypnotic scandal in the republican presidential primary race – and perhaps any US presidential race yet – is nowhere close to over as neither candidate can possibly concede defeat on a topic that is “near and dear” to the heart as one’s wife.

via Zero Hedge http://ift.tt/1MHnC2w Tyler Durden

Submitted by Patrick Buchanan via Buchanan.org,

“We are not at war with Islam,” said John Kasich after the Brussels massacre, “We’re at war with radical Islam.”

Kasich’s point raises a question: Does the Islamic faith in any way sanction or condone what those suicide bombers did?

For surely the brothers and their accomplice who ignited the bombs in the airport and set off the explosion on the subway did not do so believing they were blasting themselves to hell for all eternity.

One has to assume they hoped to be martyrs to their faith if they slaughtered infidels to terrify and expel such as these from the Islamic world and advance the coming of the caliphate of which the Prophet preached.

And where might they have gotten such ideas?

Kasich’s word, radical, comes from the Latin “radix,” or root.

And if one returns to the roots of Islam, to the Quran, does one find condemnation of what the brothers did — or justification?

Andrew McCarthy was the prosecutor of the “Blind Sheikh” whose terrorist cell tried to bring down a World Trade Center tower in 1993, and plotted bombings in the Holland and Lincoln tunnels.

The U.S. government depicted the sheikh as a wanton killer who distorted the teachings of his faith.

Yet, McCarthy discovered that Sheikh Omar Abdel Rahman was no imposter-imam, but “a globally renowned scholar — a doctor of Islamic jurisprudence who graduated from al-Azhar University in Cairo, the seat of Sunni Islamic learning for over a millennium.”

Seeking to expose the sheikh as a fraud who had led his gullible followers into terrorism, against the tenets of their faith, McCarthy discovered that “Abdel Rahman was not lying about Islam.”

“When he said the scriptures command that Muslims strike terror into the hearts of Islam’s enemies, the scriptures backed him up. When he said Allah enjoined all Muslims to wage jihad until Islamic law was established throughout the world, the scriptures backed him up.”

“[T]he Blind Sheikh’s summons to Islam was rooted in a coherent interpretation of Islamic doctrine. He was not perverting Islam,” writes McCarthy in the Hillsdale College letter Imprimis. McCarthy goes on:

“Islam is not a religion of peace. … Verses such as ‘Fight those who believe not in Allah,’ and ‘Fight and slay the pagans wherever ye find them, and seize them, beleaguer them, and lie in wait for them in every stratagem of war’ are not peaceful injunctions….”

In its formative first century, Islam conquered the Middle and Near East, North Africa and Spain with sword and slaughter, not persuasion and conversion.

Undeniably, there are millions of Muslims in America who love this country and have served it in every walk of life, from cops, firemen and soldiers, to doctors, scholars and clergy.

Yet when “moderate, peaceful Muslims” were called to testify as defense witnesses, says McCarthy, they could not contradict the Blind Sheikh’s claim that he had correctly interpreted the Quran.

The questions that arise are crucial.

When we call Islam a “religion of peace,” are we projecting our own hopes? Are we deceiving ourselves? Are the Muslims we respect, admire and like, as friends and patriots, assimilated and “Americanized” Muslims who have drifted away from, set aside, or rejected many core beliefs of the Quran and root teachings of their own faith?

Are they simply secularized Muslims?

When the Afghan regime we installed sought to cut off the head of a Christian convert, was that un-Islamic? Or does Islam teach that this is the way to deal with apostates?

Is the hate spewing forth from the Ayatollah toward Americans and Jews un-Islamic? Is the Saudis’ cutting off of heads and hands of adulterers and thieves and suppressing of women un-Islamic?

Or is that what the Quran actually teaches?

Have the Islamists of al-Shabab in Somalia, Boko Haram in Nigeria, Hezbollah in Lebanon, al-Qaida and ISIS in Syria and Iraq — who daily die fighting in the name of Islam — misread their sacred texts?

Are they all heretics who fail to understand the peaceful and loving character of their Islamic faith?

Or is the West deluding itself? Is it possible we are the ones misreading the sacred books of Islam and what the triumph of Islam would mean for our civilization — because we lack the courage to face the truth and do what is necessary to avoid our fate?

Islam is rising again. Of its 1.6 billion adherents worldwide, many are returning to the roots of their faith, seeking to live their lives as commanded by the Prophet, the Quran and Sharia.

Western survival would seem to dictate a halt to all immigration from lands where this deadly virus we call “radical Islam” — with which Kasich concedes we are at war — is rampant, just as we would halt immigration from lands where the bubonic plague was rampant.

That would surely contradict the cherished beliefs of Western liberals.

But, then, as James Burnham reminded us, “Liberalism is the ideology of Western suicide.”

via Zero Hedge http://ift.tt/1SbExMD Tyler Durden

Back in January 2015, when we looked at the utterly disconnected fundamentals of the energy sector, we were stunned to note that the forward 12-month P/E for the Energy sector has risen above 22.4, the first time it had done so since April 8, 2002. On that date, the closing price of the Energy sector was 225.15 and the forward 12-month EPS estimate was $10.05.

Our amazement was contained in the following summary: “using the S&P Energy Sector Index data, the sector’s forward multiple is now an absolutely ridiculous, mindblowing 23x.“

This was 14 months ago. Where do we stand now?

The snapshot answer comes courtesy of the latest Factset weekly earnings insight, according to which as of this moment, the forward P/E of the Energy sector is no longer “an absolutely ridiculous and mindblowing 23x“…. it is, in fact, more than double that at 58.7x, which also happens to be more than four times higher than the 15 year average.

There is no longer a word to describe the lunacy where the forward P/E multiple was literally “off the chart” until the Y-axis was doubled.

 

Where it gets even more surreal is when looking at the forward energy sector P/E (as defined by Bloomberg) charted over time. Yes, we laughed long and hard.

 

What is beyond strange is that while forward earnings have imploded in just the past three months, prices of energy companies have actually gone up as the next Factset chart shows! In other words, the market’s discounting mechanism is not onlyl broke but is now going in reverse, where the worse the projected earnings, the better for stock prices.

 

However, this type of disconnect – especially when it is as glaring as this – never lasts.

In that vein, one year ago, when oil had first crashed hard and when the S&P energy sector was trading at 550, we calculated that “Either Oil Soars Back To $88, Or Energy Stocks Have To Tumble By Over 40%” Energy stocks indeed tumbled, and at one point the drop was nearly 40% as predicted, but have since jumped higher on more artificial central bank manipulation of prices.

 

Unfortunately for those buying, this rebound won’t last because while central banks may have goosed asset prices, they have failed to stimulate the price of the one all important commodity, the one which flows through to earnings: oil.

Which leads us to a redo of the simple calculation we did one year ago: what does the current disconnect between the price of oil, energy stock prices and valuations mean? The answer, like last January, is simple: either the long-term PE multiple is now null and void, and the “New Normal” forward PE of not only 20x+, but almost 60x, is “realistic”, which of course is ridiculous, or there are two alternatives:

• Energy sector earnings have to surge by 275%, implying oil prices have to more than triple to $148, for the forward P/E multiple to return to normal, or
• The Energy sector price has to crash from 461 today to 123 where it would trade down to its historic forward 14x P/E multiple, suggesting a price drop of over 70%!

This is shown visually on the table below:

We’ll let the algos decide which option works.

 

via Zero Hedge http://ift.tt/1ZBaBii Tyler Durden

Submitted by Bill Bonner of Bonner & Partners (annotated by Acting-Man/com's Pater Tenebrarum),

Who’s Anti-American?

Maryland!
The Old Line bugle, fife, and drum,
Maryland!
She is not dead, nor deaf, nor dumb.
Huzza! She spurns the Northern scum!
She breathes! She burns! She’ll come! She’ll come!
Maryland! My Maryland!

– Maryland’s State Song

 

J’accuse…

Guilty as Charged

Yesterday, one dear reader wrote in to say we were “cynical” and “anti-American.”

Today, we rise to defend our reputation… such as it is. Cynical? Nah… We’d need a big dose of positive thinking and earnest optimism to be cynical. According to the Oxford English Dictionary, people who are cynical are “suspicious,” “doubting,” and “skeptical.”

We’re way beyond that. We’re pretty sure that the system is rigged… and rotten. Elections are exercises in solemn deceit. And the Fed’s management of the economy is a mixture of delusion and self-serving scam. We don’t have much doubt about it. That’s just the way it is.

As for “anti-American,” our accuser needs to clarify the allegation. Is he talking about the Deep State? The empire? Or is he talking about the 50 sovereign states… and the Old Republic? Or the language? The culture? Reality TV… the Kardashians… NASCAR racing… Old Faithful and the mighty Mississip’?

No one can be anti-America; America is too many things to too many people. But if he’s talking about the federales who control half our national output… tie us in knots with Obamacare, National Labor Relations Board rules, and all their other dopey programs… and stomp around the world trying to justify their trillion-dollars-a-year security budget…

…if he’s talking about Hillary, Bernie, The Donald, the Bushes, et al… and all the 535 members of the U.S. Congress… and the 2,783,000 zombies on the U.S. payroll…

…if he’s talking about the connivers who pump out phony credit… stifle real savings… sabotage real wealth creation… and shift trillions of dollars from the people who earned it to the cronies favored by the Establishment…

If he’s talking about THAT America, he’s right. We’re agin’ it. Guilty as charged. And we’re not alone. Apparently, about half the country is “anti-American.” Here’s our friend and Black Swan author Nassim Nicholas Taleb explaining The Donald phenomenon:

The “establishment” composed of journos, BS-vending talking heads with well-formulated verbs, bureaucrato-cronies, lobbyists in training, New Yorker-reading semi-intellectuals, image-conscious empty suits, Washington rent seekers and other “well-thinking” members of the vocal elites are not getting the point about what is happening and the sterility of their arguments. People are not voting for Trump (or Sanders). People are just voting, finally, to destroy the establishment.

 

Nassim Taleb explains the Donald and the Bern – and he’s right.

 

The Failure of NIRP

Yesterday, stocks took a little rest. The Dow went approximately nowhere. At first glance, things don’t look bad. U.S. crude oil is back over $40 a barrel. And U.S. stocks are back in the black for the year.

But China is on a debt binge that is bound to end in a blowup. And U.S. corporate earnings are falling, leaving only borrowing and share buybacks to hold up prices.

Frackers are still operating at a loss. Auto and student debt are going into default. Global trade – as measured by freight indexes – is still sinking.

And Japan – the pacesetter in the race to the bottom – is proving that negative interest rates have an effect exactly opposite to what the meddlers intended. NIRP (negative-interest-rate policy) is supposed to spur lending and spending. In Japan, it has done neither – the yen is strengthening as the economy weakens.

 

Total NIRP fail in Nippon – click to enlarge.

 

NIRP was always an “experimental” policy. Central banks in Sweden, Denmark, Switzerland, the euro zone, and Japan have all pushed their target lending rates into negative territory. All that has been learned so far (apart from that this doesn’t work) is that sales of home safes go up, as people take out cash and keep it at home.

Negative interest rates amount to a tax on savings. You pay to save instead of being paid to save. Whether the people hoarding cash are worried about the prospect of paying a negative interest rate tax on their bank deposits, or anticipating some more awful crisis…we don’t know.

More to come on QE and negative rates and why they really are old-fashioned “money printing” after all –  tomorrow. For now, let us return to the “anti-American” allegation.

 

Anti-American… in Maryland

We’re fond of the place we grew up – the Maryland Tidewater. At least, we are fond of it as it was when we grew up in it. But it has changed. Last week, the Maryland State Senate voted to change the words of the state song, bringing it more in line with the spirit of the Empire.

 

Sheet music of the old song – the one that still said “northern scum”. Huzzah!

 

The song recalls the period – in the early 1860s – in which Maryland was attacked… by the United States of America. “Northern scum,” is how our state song describes its historic enemies. Maryland was a “border” state, not sure how it felt about the secession movement.

Then the Yankees invaded, cutting off civilized discussion on the matter. They arrested Baltimore’s mayor, the city council, the police commissioner, and the entire board of police. All were held without charges. Habeas corpus was suspended.

Then when the Supreme Court ruled that the feds had no power to ignore constitutional protections, Abe Lincoln simply ignored the Supreme Court. He continued to hold his prisoners in the “American Bastille” – Fort McHenry. One of the prisoners – held without charges – was the grandson of Francis Scott Key, who had written the American national anthem.

 

Francis Scott Key – his grandson found out who the “real Lincoln” was.

 

He must have seen the black humor of his situation. In 1814, during Britain’s attack on Fort McHenry, his grandfather had wondered whether the flag still flew “o’er the land of the free and the home of the brave.”

In 1861, Lincoln gave the answer: No.

 

via Zero Hedge http://ift.tt/1UhMIgh Tyler Durden

When a three star Russian general strolled into the US Embassy in Baghdad on September 30 of last year, US personnel were taken aback by what he said: “If you have forces in the area we request they leave. Airstrikes start in one hour.”

That was the beginning of Russia’s intervention in Syria and it took the US completely off guard. It was vintage Putin and even the Russian President’s detractors couldn’t help but chuckle. Over the next 30 days, a relentless air campaign carried out by Moscow’s warplanes rolled back anti-Assad elements in Latakia while the IRGC and Hezbollah moved into position for an assault on Aleppo.

Then, on November 24, disaster struck. Turkey shot down a Russian Su-24 near the Syrian border. One of the pilots was killed.

In the hours after the plane crashed, the world held its breath. Putin, the West figured, would respond with force. Fears only grew when the FSA’s First Coastal Division published a video on YouTube that appeared to show a fighter using a US-made TOW to destroy a Russian search and rescue helicopter.

And then, just when the it appeared that Turkish President Recep Tayyip Erdogan was set to plunge NATO into a world war with the Russians and the Iranians, Putin did something no one expected. Instead of sending the long range bombers to Ankara, he addressed reporters while sitting next to Jordan’s King Abdullah and flatly said the following: “ISIS gets money by selling oil to Turkey.”

Over the next two weeks, The Kremlin launched a relentless PR campaign complete with satellite images and detailed slide decks showing what the Russians claimed was unequivocal evidence of Erdogan’s complicity in the illicit (and highly lucrative) ISIS oil trade.

Sergei Lavrov and Maria Zakharova heaped on the pressure and before long, the entire international community began to look with skepticism upon Ankara’s contention that Turkey is as an eager and sincere partner in the “war” on ISIS.

By that time, we had of course documented the Turkey connection exhaustively in the following four-part series:

• The Most Important Question About ISIS That Nobody Is Asking
• Meet The Man Who Funds ISIS: Bilal Erdogan, The Son Of Turkey’s President
• How Turkey Exports ISIS Oil To The World: The Scientific Evidence
• ISIS Oil Trade Full Frontal: “Raqqa’s Rockefellers”, Bilal Erdogan, KRG Crude, And The Israel Connection

In the fourth post listed above, we detailed the route by which ISIS transports illegal, undocumented crude to Turkey via Zakho-based smugglers and how that crude ends up at Ceyhan where tanker rates seem to mysteriously spike around ISIS-related oil events. All of this, we suggested, was done with the help of the Turkish government up to and including Erdogan’s son Bilal who owns a shipping company that helps facilitate the transport and sale of oil from the KRG.

(Bilal)

The Iraqi Kurds, we remarked, produce some 600,000 b/d of undocumented, technically illegal oil which everyone knows Turkey transports. Turkey can thus claim plausible deniability given that Islamic State production is but a fraction of that and given that once ISIS crude crosses the border from Iraq into Turkey, it’s indistinguishable from KRG oil.

Lacking in all of this was hard evidence. Sure, Russia had video and images purporting to show oil tankers streaming across Turkey’s highly porous border with Syria, but proving that the government in Ankara was directly involved, let alone buying the oil was well nigh impossible. Now, RT has released a new documentary which, in addition to depicting official ISIS oil ledgers, features interviews with what the filmmakers say are captured ISIS fighters. You can watch the film for yourself below, but suffice to say, it delivers compelling evidence of Turkey’s role in funding and supporting Islamic State:

Meanwhile, even CNBC is running segments implicating Erdogan and his son in the ISIS oil smuggling business and we have to say we’re impressed: the network is only six months behind the curve this time. There’s usually a 2-3 year lag. Watch below as House Democrat Stephen Lynch, Columbia’s David Phillips and even Michelle Caruso-Cabrera indict Anakra in the court of public opinion.

Summing up all of the above in one picture…

via Zero Hedge http://ift.tt/1RDROmO Tyler Durden

It appears 'winter' is coming for The Republican Party. Having already warned "there wil be riots," if he's denied the nomination, Politico reports, a majority of Republican insiders say Donald Trump should not get the GOP presidential nomination if he falls short of winning a majority of delegates – even if Trump amasses more than any of his opponents. 

Despite Trump's yuuge lead in the delegate count…

 

Politico reports,

Roughly six-in-10 Republicans said the party should nominate another candidate if Trump finishes with a plurality, rather than the required 1,237-delegate majority necessary to claim the party nomination.

 

 

“Rules is rules. You have to get a majority,” said a Virginia Republican who, like all respondents, completed the survey anonymously. “That's the problem with our country: No one ever wins anymore.”

 

The question is central to the GOP calculus before the Cleveland convention: Should the party award the nomination to the candidate who won the most delegates in total — as Trump himself has advocated — or stick to the rule that a candidate must win at least 1,237 delegates in order to be the nominee?

 

The majority of insiders who want the party to choose someone else if Trump only wins a plurality of delegates said they are motivated by questions of electability, Trump’s capricious campaign style and personality.

 

“I'm firmly in the ‘Never Trump’ camp,” said a New Hampshire Republican. “The GOP gets killed if he's the nominee. We probably get killed if he doesn't support a different nominee anyway. So if it makes no difference to the eventual outcome, my conscience will be clear going down with a responsible nominee instead.”

Will the Great Wall fall?

 

As Trump warned,

Asked by CNN what would happen if he can’t muster the 1,237 delegates he needs to lock up the nomination and ends up getting robbed at the convention in Cleveland, Trump said this:

 

"I think you'd have riots.”

 

“[I’m] representing many millions of people. If you disenfranchise those people, and you say, 'I'm sorry, you're 100 votes short' … I think you'd have problems like you've never seen before. I think bad things would happen."

 

Yes, “bad things.” And if you’ve seen a Trump rally lately, you know just what he’s talking about.

The establishment better brace themselves as "bad things will happen."

via Zero Hedge http://ift.tt/1pMpxy6 Tyler Durden

Submitted by Simon Black via SovereignMan.com,

On Friday March 15, 2013–just over three years ago–people across the entire nation of Cyprus went to bed believing that everything was OK.

The next morning they woke up to a different reality.

It turned out that their banking system was totally broke. After suffering enormous losses, banks no longer had sufficient liquidity or capital to maintain customer account balances.

People realized immediately that just because you can log in to a bank’s website and see an account balance printed on the screen that doesn’t actually mean that the money is there.

To make matters worse for depositors, the government was insolvent and unable to lift a finger to support the banks.

Plus the deposit guarantee from Cyprus’s central bank wasn’t worth the paper it was printed on.

So in order to save the banking system, Cypriot politicians resorted to the unthinkable– freezing every bank account in the country. It all happened overnight.

This is precisely the sort of thing that happens when a poorly structured banking system meets an insolvent government.

And we should expect more of it. Because three years later, much of the West looks like Cyprus did back then.

Western banking systems are extremely illiquid, and many banks are very thinly capitalized with minimal reserves.

Deposit insurance funds are woefully undercapitalized and lack the financial capacity to guarantee the system.

And the governments who stand behind it all are themselves completely insolvent.

Bear in mind, all of these assertions are backed by publicly available data.

It’s not some wild conspiracy theory to suggest that the governments of the United States, Japan, and most of Western Europe are totally bankrupt.

These are facts. And each government publishes its own financial statements attesting to its insolvency.

It’s not crazy to say that the FDIC is undercapitalized and fails to maintain the amount of reserves that are required by law, let alone “the minimum level [of capital] needed to withstand future crises of the magnitude of past crises.”

This information is published in the FDIC’s own annual report.

And you don’t have to be a radical to review your bank’s financial statements and find, for example, that US Bank maintains cash reserves amounting to just 3.5% of its customer deposits.

Or that Italy’s Unicredit Bank holds cash reserves of just 1.7% of its customer deposits.

These numbers are not even remotely conservative. And they’re all available in the banks’ most recent reports.

Looking at the big picture, when it’s clear that your government is broke, your deposit insurance fund is undercapitalized, and your bank is hazardously illiquid, it seems obvious that you shouldn’t hold 100% of your savings in that banking system.

There are a multitude of solutions to reduce this risk.

One option that we have discussed is opening an account at a liquid, well-capitalized foreign bank located in a jurisdiction with no debt.

Banks in Asia tend to have extremely high levels of liquidity and hold generous, conservative reserves to safeguard their customer deposits.

An even easier option is to hold physical cash; buy a safe and start making withdrawals from your bank account.

Even if you’re completely skeptical about everything you’ve just read, you won’t be worse off for having cash instead of bank deposits.

There’s very little consequence to taking action. But the consequences of NOT taking action can be substantial.

Learn from Cyprus. Don’t take it for granted that you’ll go to bed tonight and everything in the financial system will be fine tomorrow morning.

When the data and risks are this obvious, everything can change very quickly.

via Zero Hedge http://ift.tt/1RDNeVo Tyler Durden