Liberal Media Has ‘Completely Ignored’ Biden Cognitive Decline: Rogan

Liberal Media Has ‘Completely Ignored’ Biden Cognitive Decline: Rogan

Tyler Durden

Fri, 06/19/2020 – 17:40

Bernie Sanders fan Joe Rogan – who admitted in April that he’d rather vote for President Trump Trump over former Vice President Joe Biden – says the left-wing media is ignoring Biden’s cognitive decline.

In a conversation highlighted by Breitbart‘s Josh Caplan, Rogan tells evolutionary biologist Bret Weinstein:

JOE ROGAN: I’m seeing this one thing that I keep hearing over and over again from people of the left that really disturbs me is this concession that what you’re voting for is the Cabinet, you’re voting for the Supreme Court, you’re voting for someone who’s not going to reverse Roe vs. Wade. That’s what I keep hearing from my friends on the left. They’ve basically made this concession in their head like, “Hey, you know, this is what I’m voting for now.” And the news media on the left has completely ignored all of these Biden speeches that clearly show some kind of cognitive decline.

Like David Pakman, who I respect a lot, he was kind of arguing against it, that it didn’t show his decline. I was trying to look at it in a way that made sense, I was trying to be rational about it, like maybe, “Okay, maybe he’s just exhausted, maybe this, and maybe it’s pressure.” Sometimes people get really tongue-tied and panic under pressure, and words come out all fucked up. That is possible. But there’s a trend. If you go back to when he was a younger man that trend didn’t exist. You’re seeing a change. The idea that as you get older you become less comfortable with the media, less comfortable with speaking publically, that doesn’t jive with me. That doesn’t make any sense.

BRET WEINSTEIN: I agree with you. I see a decline. But irrespective of what that is, Joe Biden is an influence peddler. He’s not an idea guy, right? He’s the same idea as Hillary Clinton in a different morphology.

In April, Rogan told Weinstein’s brother and Thiel Capital MP Eric Weinstein that Democrats are “making us all look dumb over Biden,” adding that he “could not” vote for the former Vice PResident.

As The Epoch Times’ Katabella Roberts noted, Rogan, who previously endorsed Biden’s primary rival, Sen. Bernie Sanders (I-Vt.), went on to speak about Trump’s ability to handle the pressure that comes with being president of the United States, noting that the role appeared to take a visible toll on previous Presidents George W. Bush and Barack Obama.

“The pressure of being the president of the United States is something that no one has ever prepared for. The only one who seems to be fine with it is Trump, oddly enough. He doesn’t seem to be aging at all, or in any sort of decline. Obama, almost immediately, started looking older. George W, almost immediately, started looking older,” Rogan added.

Speaking of Biden, Rogan also noted that the former vice president can “barely talk,” and “forgets what he is saying halfway in the conversation.”

Meanwhile, Biden’s latest senior moment:

via ZeroHedge News https://ift.tt/2NfhTtC Tyler Durden

BofA: There Is Just One Bull Market To Short … And The Fed Won’t Let You

BofA: There Is Just One Bull Market To Short … And The Fed Won’t Let You

Tyler Durden

Fri, 06/19/2020 – 17:18

Is it time to go short?

With the Fed’s balance sheet posting its biggest weekly drop in 11 years, and hitting a plateau of sorts (at least until the next major QE push)…

… coupled with an ominous reversal on today’s quad-witch expiration, which saw stocks slump despite opening sharply higher, investors are starting to ask if it is once again time to start shorting (especially with Robin Hood realizing it is time to pull in the reins on its teenage trading army).

Well, at least according to Bank of America’s CIO Michael Hartnett the answer is, for now at least, no.

Writing in his latest Flows and Liquidity report titled “Only bull to short is credit…and Fed won’t let you”, Hartnett proposes that according to the Fed, it is still too early for Big Short: “Fed is “all-in” and will remain in that stance until US unemployment rate falls to acceptable level i.e. <5% (or claims <400k)."

Hartnett also warns that Fed rhetoric has been bigger than wallet thus far, which means Powell can easily crush shorts. Here’s why – the Fed’s facilities are operating at just a fraction of potential, and as Table 1 below shows, the Fed has spent just $173bn out of its potential $495bn in firepower (and it can always add more).

It’s not just the Fed: there is also the 2020 fiscal bazooka which has a way to go.

As Hartnett adds, the fiscal stimulus is taking 3 forms in 2020… spending, credit guarantees, loans & equity. BIS data shows US & Australia lead spending (>10% GDP), Europe is using aggressive credit guarantees (e.g. Italy 32% GDP), while Japan/Korea are stimulating via government loans/equity injections.

And while Hartnett echoes what we said last month, that it is “notable how Emerging Markets lagging in terms of fiscal ability to address pandemic/recession”, recall that last night we reported that China has now vowed to inject global credit amounting to 30% of GDP in the economy this year.

So does that mean don’t short under any conditions? Not exactly. As Hartnett summarizes, the tactical risk remains to the upside: 

positioning, policy, credit markets all still point to potential for or above 30Y TSY above 2%, IG CDX 60, SPX 3250, while credit markets are still too strong (see LQD, PFF, CWB)…

… to short stocks, even if like stocks, junk has only retraced partially versus quality bonds (see relative performance of CCC HY bonds vs 30-year Treasury – Chart 9); summer risk remains to upside driven by central bank repression of credit spreads (positive for “growth”…see world’s best performing market, Chinese Nasdaq (ChiNext), threatening to breakout to new highs – Chart 10), or via big RoW macro surprise to upside via fiscal stimulus (see soaring Baltic Freight Index); barbell of credit/tech and EU/US small cap value & banks.

But the structural risk is to the downside: Fall 2020 risks will be 1. Fear of double-dip recession & default risk, 2. Debasement of US dollar & disorderly bond markets, 3. Politics threatening 2021 EPS;

His parting advice for a tipping point back into shorts: watch the yield curve: a failure of the curve to steepen >80bps in June/July would signal “peak policy stimulus” and reinvigorate shorts.

via ZeroHedge News https://ift.tt/30YfCLz Tyler Durden

WHO Chief: “The Pandemic Is Accelerating,” Warns of “New & Dangerous Phase”

WHO Chief: “The Pandemic Is Accelerating,” Warns of “New & Dangerous Phase”

Tyler Durden

Fri, 06/19/2020 – 17:00

Authored by Andrea Germanos via CommonDreams.org,

The head of the World Health Organization warned Friday that humanity is facing “a new and dangerous phase” of the coronavirus crisis.

“The pandemic is accelerating,” said WHO Director-General Tedros Adhanom Ghebreyesus. The remarks from came at a media briefing in Geneva where Tedros announced a grim milestone. “More than 150,000 new cases of Covid-19 were reported to WHO yesterday — the most in a single day so far,” he said.

WHO Director-General Tedros Adhanom Ghebreyesus attending a press briefing on Covid-19 at the WHO headquarters in Geneva. Image: AFP via Getty

Tedros acknowledged that people worldwide were eager to be free from lockdown restrictions but warned that “the virus is still spreading fast” and is “still deadly.”

He added that “strict and sustained implementation” of public health measures to curb the spread of the virus remains essential but also noted the difficulty of carrying out such efforts in refugee camps, where migrants face huge risks of being sickened by Covid-19.

The new comments come as a tally from Johns Hopkins University shows there have been 8,520,761 confirmed cases of the coronavirus and 454,889 deaths from Covid-19. The total cases include 2,203,659 just from the United States, where the virus has claimed the lives of 118,519.

Tedros, in his Friday comments, stessed the need for countries to focus on “the basics” to tackle the public health crisis, including testing.

President Donald Trump, meanwhile, told the Wall Street Journal this week that testing for Covid-19 is “overrated.”

via ZeroHedge News https://ift.tt/3fFnfup Tyler Durden

Robinhood Tightens Up Options Platform After Trader Suicide

Robinhood Tightens Up Options Platform After Trader Suicide

Tyler Durden

Fri, 06/19/2020 – 16:34

In the wake a young user’s suicide, popular trading platform Robinhood has decided to tighten up its options platform.

As we sadly detailed here, the devastating suicide of 20-year-old Alex Kearns, after discovering he faced a loss of over $700,000 on his massively-levered options account, exposed the very real downside of the speculative mania occurring in American stock and option markets currently; and facing the potential of some seriously bad PR, Vlad Tenev & Baiju Bhatt, Co-Founders and Co-CEOs of Robinhood wrote in a blog post how they have worked to improve the customer experience (presumably in the hope of avoiding sudden suicide-inducing collapses in net worth?).

Full post (emphasis ours):

On Saturday, we learned that Alex Kearns, a Robinhood customer, died by suicide and left a note citing confusion with our product. We quickly reached out to Alex’s family to share our condolences and offer to speak. We are personally devastated by this tragedy. 

Over the past week, our team at Robinhood has been focused on identifying how we can improve Robinhood’s customer experience, specifically around our option flows involving multi-leg exercise and assignment. We want to share with you today what we are committing to as a company moving forward:

  1. Eligibility: We are considering additional criteria and education for customers seeking level 3 options authorization to help ensure customers understand more sophisticated options trading. 

  2. Educational resources: We are expanding our educational content related to options trading. We have added information on early options assignments to our help center and we will be hiring an Options Education Specialist to further enhance education related to our options offering.

  3. User Interface: In the near term, we are rolling out improvements to in-app messages and emails we send customers about their multi-leg options spreads. We are also adding detail to the in-app history page to help users understand the mechanics of early options assignments. We are also working on changes to our user interface, including the way buying power is displayed. These changes will take a bit of time to roll out, but our teams are hard at work. 

While we recognize that nothing can ease the pain that Alex’s family is feeling now, in addition to the steps above, Robinhood is making a $250,000 donation to the American Foundation for Suicide Prevention. If you or anyone you know is in crisis, please reach out for help

It is not lost upon us that our company and our service have become synonymous with retail investing in America, and that this has led to millions of new investors making their first investments through Robinhood. We recognize this profound responsibility, and we don’t take it lightly. Our aspiration is to innovate, lead, and go beyond the status quo.

We remain ever committed to providing the best investing experience as well as the resources customers need to get and stay informed.

So, is this an advertisement too?

As a family member said at the time, here’s the truth. AND PLEASE PAY ATTENTION TO THIS IF YOU’RE YOUNG.

The markets are bananas right now. It’s not the time for amateurs. Really really pay attention to position sizing. Stay away from exotic instruments like options and futures.

These are the times Buffett talks about being more careful because others aren’t.

Almost everything you see on this platform is coming from someone with a bias, myself included. Don’t pay attention to how many followers someone has, where they work, etc.

Judge investments on their own merits, as you understand them.

And, if you find yourself in a world of shit please talk to your family. Listen to @QTRResearch and @sanglucci pod about blowing up. Shit, hit me up. You are not alone. Finance isn’t worth losing your life over.

I do have one ask- if you know of Robinhood willingly extending way too much credit/margin please let me know. They are squarely on my radar and I have time for a research project.

Alex, R.I.P. You will forever be missed.

Once again we note that while it is all well and good to mock the likes of Dave Portnoy who has become the poster-child for the current round of speculative mania (picking stock tickers at random from a scrabble bag today for instance)…

the fact of the matter is that the dollars being levered into worthless stocks (and options) are real to many people and when this liquidity-fueled shitshow ends, there will be hell to pay… and this time everyone knows The Fed is responsible for enabling it.

via ZeroHedge News https://ift.tt/3fKPE2p Tyler Durden

For The Rich To Keep Getting Richer, We Have To Sacrifice Everything Else

For The Rich To Keep Getting Richer, We Have To Sacrifice Everything Else

Tyler Durden

Fri, 06/19/2020 – 16:25

Authored by Charles Hugh Smith via OfTwoMinds blog,

They’re hoping the endless circuses and trails of bread crumbs will forever distract us from their plunder and the inequalities built into America’s financial system..

The primary story of the past 20 years is the already-rich have gotten much richer, with destabilizing economic, social and political consequences. The Federal Reserve and its army of academic / think-tank / financier apologists, lackeys, toadies, apparatchiks and sycophants have several rather thin excuses to explain this away, including:

1. Gee, wealth/income inequality isn’t quite as bad as everyone claims. (Actually, it’s worse, but never mind unwelcome reality. Let us prove yet again how statistics can always be gamed.)

2. Wealth/income inequality is bad, but it’s not the Fed’s or policymakers’ faults; the causes are all beyond our control: globalization, winner-take-all disruptive technologies, etc. We’re just little old innocent bystanders. It’s like blaming us for gravity, for goodness sakes.

3. Gosh darn it, the Fed is just trying to help the little gal and guy by digitally printing $6.4 trillion and giving it to parasitic, predatory financiers, banks, corporations and speculators; we’re mystified how giving trillions to the already-super-wealthy somehow made them richer.

We’ve got hundreds of PhD economists working on some arcane mathematical models to help us understand the mystery of why giving trillions to the already-super-wealthy somehow made them richer. It’s a real puzzle, but we have our best people on it– yes siree, our best people.

4. We’re perplexed why so little of the trillions we’ve handed the already-super-rich has trickled down to the little gals and guys struggling to keep their heads above water. We thought the last big tax-cut giveaway would do the trick, but dang, we’re guessing it wasn’t enough.

So we’re thinking that giving the already-super-wealthy another $3 trillion or so might do the trick, and they might tip their maids, dog-walkers, gig drivers, yacht repair people, et al. a few extra bucks–but then maybe not, because the already-super-wealthy tend to be as greedy as all get-out. But we’ll keep trying to shovel a few more trillion their way because there’s just no other way to help the little people except to print up another trillion and give it to the already-super-wealthy.

What the well-paid army of apologists, lackeys, toadies, apparatchiks and sycophants never mention is that we as a nation have had to sacrifice everything else to ensure the rich will always get richer. Democracy was sacrificed so long ago there’s no cultural memory of a time when “democracy” wasn’t a pay-to-play bidding war between vested interests, insiders, billionaires, global corporations and political action committees pushing self-serving agendas.

The entire political order of the U.S. boils down to follow the money, as no cause or policy is what it claims. Somebody is inevitably angling for a self-serving sluice of cash that is politely hidden behind noble-sounding rhetoric (tm) delivered via micro-targeted ads served by the social media and advert-search monopolies.

Social cohesion has also been sacrificed, as there’s nothing binding the nation together except I got mine greed, narcissism and anger, all of which fuel a blood-soaked circus of fragmentation and disorder.

The systemic asymmetries are so vast, so glaring, so sinful, that the nation’s institutions have destroyed their credibility in their frantic efforts to justify the inequalities in wealth, income and power. Alarmingly, institutional insiders are completely tone-deaf when it comes to how their self-justifying bleating plays out in public.

Academics who’ve gorged on the $2 trillion in student loan debt that’s turned the nation’s youth into debt-serfs have no idea how lame they sound when they shrilly insist that their class is so valuable that, well, it’s worth any price. Students should be thankful they received such incredible value for their $100,000. As for how students are supposed to pay it all back with crushing mountains of interest due the predatory lenders–not our problem.

Healthcare and Big Pharma CEOs must not realize how offensively clownish their defense of $1 million medical bills sound to people who are being forced into bankruptcy so the CEOs can collect an extra $20 million in stock options this quarter.

Yeah, we can really tell how much you care about our health. Bleat away, bozos.

So let’s make sure we understand how America’s system works. If you’re a small business owner whose on the ropes, the federal government may loan you some money, but you have to personally guarantee the loan, meaning if your business fails, you’re on the hook as an individual or household to pay the loan back with interest.

If you can’t, then personal bankruptcy is your only alternative, meaning you’re left with the ’97 Corolla and the clothes on your back. Have a nice life, bucko, maybe you’ll restore your credit in five years.

If you’re the CEO of an airline or equivalent Corporate America darling, it’s a much different story. That you borrowed $46 billion and blew it buying back your own stocks so you could cash in millions of dollars in stock options that boosted your personal wealth–never mind that, here’s $50 billion in bailout money that won’t require you to make any personal sacrifice whatsoever.

No clawback on the billions squandered buying back stock to enrich insiders and rapacious financiers: perish the thought that corporate management would ever be held responsible for anything–certainly not for fraud or embezzlement.

Consider this data base of 6,300 major corporate fines and settlements from the early 1990s to 2015 compiled by Jon Morse. Nobody made any personal sacrifices or paid any personal fines or served any prison time for any of these thousands of violations.

If you want $100 million to buy back shares in your own company, the Federal Reserve and the rest of Wall Street is delighted to help you. That the buyback will increase your personal wealth by $50 million for doing absolutely nothing for society or the nation–you generated no new goods, services, innovations, research or jobs–that’s the way our system works.

Generating goods, services and jobs is for chumps. Get over it. The real money is made bellying up to the Fed’s free money for financiers spigot.

If you want to save your small business–well, try working a second shift for free.

If you can’t pay the staggering medical bills (neatly compiled in an inch thick sheaf of invoices), hey, life isn’t fair, declare bankruptcy and start over, you’re only 63.

What all the entrenched insiders in America’s parasitic, predatory institutions don’t dare admit is that to rig the system so they’ll keep getting richer, we’ve had to sacrifice everything else. Having stripped the society and economy bare, there’s nothing left but sound and fury, as if they’re hoping the endless circuses and trails of bread crumbs will forever distract us from their plunder and the inequalities built into America’s financial system.

Here’s looking at you, Federal Reserve: here’s a chart of your handiwork.

*  *  *

My recent books:

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World ($13)
(Kindle $6.95, print $11.95) Read the first section for free (PDF).

Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic ($6.95 (Kindle), $12 (print), $13.08 ( audiobook): Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake $1.29 (Kindle), $8.95 (print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 (Kindle), $15 (print) Read the first section for free (PDF).

*  *  *

If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

via ZeroHedge News https://ift.tt/30XKbRv Tyler Durden

COVID Concerns, Crude Collapse, & Quad-Witch Craziness Spark Stock Swoon

COVID Concerns, Crude Collapse, & Quad-Witch Craziness Spark Stock Swoon

Tyler Durden

Fri, 06/19/2020 – 16:01

Well that was a week of worrisome headlines (from World War 3 to global COVID reawakenings), awe-inspiring US macro-economic beats (which lose all context in relation to the collapse) as earnings outlooks remain just “off the lows”, and a stock market that refuses to go down despite bonds, the dollar, and commodities all signaling anything but strong growth ahead…

Given the mean-reverting nature of the US macro surprise index (3 standard deviations above the mean), this could be as good as it gets…

Source: Bloomberg

Leaving the gap between macro and micro at its greatest ever…

Source: Bloomberg

All hell broke loose this morning as the June S&P futures contract expired…

The market started lower the moment the June contract expired, but there were a number of triggering headlines for the legs lower…

  • 1055ET *FLORIDA COVID CASES +4.4% VS. PREVIOUS 7-DAY AVG. 3.2%

  • 1125ET *ARIZONA REPORTS A RECORD 3,246 NEW VIRUS CASES: ABC-15

  • 1215ET *APPLE TO CLOSE SOME U.S. STORES AGAIN DUE TO COVID-19 SPIKES

  • 1302ET *Fed’s Quarles Says Market Reaction to Covid-19 Is Not Over

  • 1345ET *CRUISE LINES SUSPEND TRIPS OUT OF US PORTS TIL SEPT. 15: CNBC

  • 1405ET *CALIFORNIA RECORDS LARGEST SINGLE-DAY INCREASE OF COVID CASES

On the week, all the US majors were higher with Nasdaq leading and The Dow lagging…

On the day only Nasdaq managed to close green…

With the late-day panic…

Nasdaq is up 6 days in a row and up 17 of the last 20 days…

The Nasdaq Biotech index spiked 3.5% today to new record high…

The Virus Fear Trade picked up again this week…

Source: Bloomberg

Banks started the weak with a panic-bid off opening weakness but that faded as the week proigressed and yields slid…

Source: Bloomberg

Crude prices crashed intraday, accelerating on heavy volume at 1230ET (After AZ,FL case counts) before bouncing back dramatically (as USO tumbled into red)…

 

Treasury yields fell today to end the week unch…

Source: Bloomberg

The dollar ended the week higher (up 6 of the last 7 days and 2nd up-week in a row)

Source: Bloomberg

Bitcoin ended the week lower but apart from Monday’s dump and pump, traded in a narrow range…

Source: Bloomberg

Gold surged today, back above $1750…

 

Silver rallied but failed to hold $18…

 

And finally, don’t forget, The Fed’s balance sheet shrank the most since 2009 this week…

Source: Bloomberg

Either TSY yields are dramatically too low or Dr.Copper is way over his recovery skis relative to gold…

Source: Bloomberg

Is volatility about the be resurrected?

And here’s a little context…

Source: Bloomberg

via ZeroHedge News https://ift.tt/2YOo3GA Tyler Durden

Major Cruise Lines ‘Voluntarily Suspend’ Trips Out Of US Ports Until Sept. 15

Major Cruise Lines ‘Voluntarily Suspend’ Trips Out Of US Ports Until Sept. 15

Tyler Durden

Fri, 06/19/2020 – 15:50

Cruise Lines International Association (CLIA) announced Friday afternoon that major cruise lines would voluntarily extend the suspension of cruise operations from U.S. ports until September 15. 

“Due to the ongoing situation within the U.S. related to COVID-19, CLIA member cruise lines have decided to voluntarily extend the period of suspended passenger operations.  The current No Sail Order issued by the U.S. Centers for Disease Control and Prevention (CDC) will expire on July 24, and although we had hoped that cruise activity could resume as soon as possible after that date, it is increasingly clear that more time will be needed to resolve barriers to resumption in the United States.

“Although we are confident that future cruises will be healthy and safe, and will fully reflect the latest protective measures, we also feel that it is appropriate to err on the side of caution to help ensure the best interests of our passengers and crewmembers.  We have therefore decided to further extend our suspension of operations from U.S. ports until September 15.  The additional time will also allow us to consult with the CDC on measures that will be appropriate for the eventual resumption of cruise operations. 

“This voluntary suspension applies to all CLIA members to which the No Sail Order applied (vessels with capacity to carry 250 persons or more). CLIA member cruise lines will continually evaluate the evolving situation and make a determination as to whether a further extension is necessary.” – CLIA statement. 

Carnival Corp., Disney Cruise Line, Holland America Line, Princess Cruises, Royal Caribbean International, and Silversea Cruises are some of the CLIA members that had previously announced a pause of operations in early March. The Centers for Disease Control and Prevention (CDC) extended no sails on April 9 until July 24. Now it appears an extension will last through mid-September. 

Shares of Carnival Corp., Royal Caribbean, and Norwegian Cruise Line are all down about 5% in the final hour of the U.S. cash session on Friday. 

Barstool Sports founder Dave Portnoy, the biggest travel stock bull on Twitter, has been advocating the dip should be bought in these stocks – we wonder if the latest CLIA announcement will change his investment advice to his followers? 

via ZeroHedge News https://ift.tt/3hJsWtg Tyler Durden

The Economy Isn’t Just “Spending Money”; We Need Savings

The Economy Isn’t Just “Spending Money”; We Need Savings

Tyler Durden

Fri, 06/19/2020 – 15:35

Via SchiffGold.com,

Over the last several decades, the Federal Reserve and the US government have almost exclusively directed their policies toward “stimulating” spending. Artificially low interest rates incentivize borrowing and discourage savings.

But spending money isn’t the only thing that makes the economy go around. Savings are crucial and the lack of saving in America has hollowed out the US economy.

Modern economists trained in Keynesian thinking eschew savings. As economist Frank Shostak explains in an article published by the Mises Wire, “It is held by most mainstream economists that spending is the heart of economic activity. Economic activity is depicted as a circular flow of money. Spending by one individual becomes part of the earnings of another individual, and vice versa. In contrast, saving is viewed negatively as it weakens the potential demand for goods and services.”

Driven by this mainstream view, modern monetary policy almost always emphasizes economic stimulus. We see this in the unprecedented Federal Reserve money printing and the massive borrowing and spending binge by the US government in response to the coronavirus pandemic.

But this approach ignores the process of creating goods and services.

One undeniable truth is you have to produce before you can consume. Shostak offers a simple example.

For instance, when a baker produces bread, not everything he produces is for his own consumption. In fact, most of the bread he produces is exchanged for the goods and services of other producers, implying that through the production of bread, the baker generates an effective demand for other goods. In this sense, his demand is fully backed by the bread that he has produced.”

The development of capital goods  – tools and machinery – drives production. But these have to be produced as well. That requires some consumer goods to be sacrificed or diverted for the production of capital goods. As Shostak put it, “In order to make them, people must allocate consumer goods that will sustain those individuals engaged in the production of tools and machinery.”

This allocation of consumer goods is what savings is all about. Since saving enables the production of capital goods, saving is obviously at the heart of the economic growth that raises people’s living standards. Observe that the saved consumer goods support all the stages of production, from the producers of consumer goods to the producers of raw materials, the producers of tools and machinery, and all the other intermediate stages of production and services. Also, note that individuals do not want various tools and machinery as such but rather consumer goods. In order to maintain their life and wellbeing, people require access to consumer goods.”

The introduction of money into the economy tends to obscure this process. But as Shostak observes, it doesn’t fundamentally change the equation.

In the money economy, ultimate payment is made by exchanging real goods and services for other real goods and services, with this exchange simply being facilitated by money. Thus, a baker exchanges his bread for money and then employs that money to buy other goods and services, implying that he pays for other goods and services with his bread. Money only facilitates this payment.”

Peter Schiff has been saying that money printing doesn’t really add anything to the economy. As he explained in a podcast episode, in effect, money derives its value from the production of goods and services. Everything that’s produced gets divided up based on the amount of money in the system.

Well, if you just increase the supply of money, it doesn’t do anything to change the supply of goods and services. So now, when you divvy those goods and services up, you just have to assign a higher price to all of those goods and services so that the market clears. But nothing of real value is actually added.”

Shostak expands on this point, explaining how money-printing ultimately depletes savings and lowers production – and thus demand.

Contrary to popular thinking, it does not follow that one can lift economic growth via the printing presses. When money is printed—that is, created “out of thin air” by the central bank or through fractional reserve banking—it sets in motion an exchange of nothing for money and then money for something. This results in an exchange of nothing for something.

An exchange of nothing for something amounts to consumption that is not supported by production.

When money “out of thin air” gives rise to consumption that is not supported by preceding production, it lowers the amount of real savings that supports the production of goods of a wealth producer. This, in turn, undermines his production of goods, thereby weakening his effective demand for the goods of other wealth producers.

The other wealth producers are then forced to curtail their production of goods, thereby weakening their effective demand for the goods of yet other wealth producers. In this way, money “out of thin air” that destroys savings sets up the dynamics of the consequent shrinkage of the production flow.

Observe that what has weakened the demand for goods is not the sudden and capricious behavior of consumers, but the increase in money out of “thin air.” Every dollar that was created this way amounts to a corresponding dissaving by that amount.

As long as the pool of real savings is expanding, the central bank and government officials can give the impression that loose monetary and fiscal policies drive the economy. This illusion is shattered once the pool becomes stagnant or starts declining.

What enables the expansion of the flow of production of goods and services is savings. It is through savings, which give rise to production, that demand for goods can be exercised. There can be no effective demand without prior production. If it were otherwise, poverty in the world would have been eradicated a long time ago.

Saving is integral to a sound economy. But the government and central bank policies today undermine savings – and thus the overall economy. Instead of a robust economic system, we end up with a series of bubbles. We get the illusion of wealth without the actual wealth.

via ZeroHedge News https://ift.tt/3hNV4vs Tyler Durden

Navy Flip-Flops, Won’t Reinstate Fired Aircraft Carrier Captain Who Sounded Alarm Over COVID-19

Navy Flip-Flops, Won’t Reinstate Fired Aircraft Carrier Captain Who Sounded Alarm Over COVID-19

Tyler Durden

Fri, 06/19/2020 – 15:20

The US Navy is reversing its decision to reinstate fired Navy captain Brett Crozier, who was relieved of his command after he penned a letter in March criticizing the Trump administration for prioritizing military readiness over the safety of the crew.

In April, a preliminary investigation recommended that Crozier be reinstated.

The results of the investigation justified the relief,” one person who has seen the investigation told Politico. “He failed to take appropriate action, to do the things that the commanding officer of a ship is supposed to do, so he stays relieved.

The Navy will also halt the promotion of Rear Adm. Stuart Baker, the senior officer onboard the Roosevelt, who commands Carrier Strike Group 9, according to the report.

Strike Group Command will also be held accountable for poor decision-making and his second star is being put on hold,” said the source.

After learning of the outbreak on the ship, Crozier argued for evacuating the entire crew as soon as possible. But Baker, Crozier’s superior on the ship, reportedly countered that less drastic measures should be taken.

The news brings to a close a highly publicized chain of events that started with an outbreak of the coronavirus onboard the Roosevelt in late March, which forced the ship to stop in Guam and offload its 5,000 sailors. Crozier caused an uproar when he wrote a letter pleading for help from Navy leadership as the coronavirus spread throughout his ship, which was later leaked to the media. Crozier was fired by then-acting Navy Secretary Thomas Modly, who later stepped down over remarks he made to the ship’s crew criticizing the captain’s actions. –Politico

Following the preliminary investigation, Gen. Mark Milley – Chair of the Joint Chiefs of Staff – pushed for a broader investigation leading to the decision not to reinstate.

After recovering from COVID-19 on Guam, Crozier was reassigned to desk duty in San Diego during the investigation.

via ZeroHedge News https://ift.tt/2zMKvaB Tyler Durden

One Crisis Is Manageable. Five Might Not Be…

One Crisis Is Manageable. Five Might Not Be…

Tyler Durden

Fri, 06/19/2020 – 15:05

Authored by John Rubino via DollarCollapse.com,

World War One was the most destructive conflict in human history. But before it ended, the Spanish flu came along and claimed an even greater number of victims.

A decade later the Great Depression bankrupted millions. But before our grandparents could dig their way out, World War II dragged them into something even worse.

Why bring up these past examples of multi-part crises? Because the universe seems to like them. And we seem to be entering another one.

Though it’s been largely forgotten in all the recent turmoil, the US financial system was already in crisis last year, as the repo market – where banks lend money to each other – locked up, forcing the Fed to reinstitute quantitative easing. The following chart screams “emergency!”.

Then came the pandemic, which sent the global economy into freefall. The Atlanta Fed’s GDPNow reading currently shows the US contracting at an annual rate of over 45%.

Then riots – initiated by the latest police brutality video but sustained by the frustration of a three-month lockdown in which millions lost their livelihoods while under house arrest — erupted in US cities. Now fully reopening the economy is both more complicated and a lot less certain.

Too much of a bad thing

One of these problems would have been manageable (note in retrospect how smoothly the Fed handled the repo thing in late 2019). Two would have been tougher but doable, with the right combination of focus and humility. Three at the same time might test the system’s tolerance.

So here we are.

  • The Fed can’t print new small businesses once the existing ones die.

  • The police can’t stop riots without shooting the rioters.

  • Corporate profits are cratering with no obvious path to recovery.

  • Stock markets are up, but only because financial asset prices are the sole part of the current mess that monetary policy can influence.

Most Americans are no doubt praying that this is it for a while because really, our plate is more than full and we don’t deserve any more abuse.

But the universe, don’t forget, has a nasty sense of humor. So it might have a few more surprises up its sleeve.

Consider:

Indian and Chinese troops are pouring into a disputed border region and are now apparently killing each other in hand-to-hand combat. Why? One plausible explanation is that China views the US and India (along with Hong Kong and Taiwan) as hobbled by the pandemic and therefore less able than usual to defend their interests, and is taking the opportunity to settle some scores.

This might be an issue for the US because 1) China and India are nuclear powers, and 2) the neocon psychos who still wield influence in the US deep state have never seen a foreign conflict they didn’t want to exploit. Watch them demand that we get involved.

But wait, there’s more. China vs India is the most newsworthy current conflict, but not the only one. See Rumors Of Wars: China, India, North Korea, South Korea, Israel And Turkey All Move Toward War.

And last but not least, the US is now entering its hurricane/wildfire season, which raises the prospect of mass-evacuations during a pandemic:

Hurricane season combined with COVID-19 pandemic could create perfect storm

(Phys.org) – When extreme climate conditions interact with stressors to social systems, such as the COVID-19 pandemic, the consequences could be severe.

The authors focused on four main sectors—food, water, health and infrastructure—where connected extremes often lead to unforeseen impacts.

A present example could be the COVID-19 pandemic and the current hurricane season, says Thomas Wahl, an assistant professor in UCF’s Department of Civil, Environmental and Construction Engineering.

“The COVID-19 crisis will very likely increase the impacts associated with the climatic extreme events that will inevitably occur somewhere across the globe over the next weeks or months or already have occurred,” Wahl says.

“For example, shelters cannot operate at full capacity, health care systems are already under pressure, and emergency funds are depleted.”

Imagine the West Coast battling monster fires like last year’s while a Cat-5 hurricane bears down on Miami — at a time when pandemic, depression, and civil unrest still rage. And toss in a presidential election just for fun. The result will be more complicated than even the past few months.

Now, a reasonable response to this seeming obsession with future threats would be to quote the Biblical verse “Sufficient unto the day is the evil thereof” and then go back to focusing on health, safety, and peace.

But this is a financial site and a flock of black swans still on approach vector has investment implications. Put simply, how can anyone be buying growth stocks and ignoring gold in this world?

via ZeroHedge News https://ift.tt/3hFKJSd Tyler Durden