Tag: finance

Authored by Marc Orsley of PrismFP

• Better data recently begs the question if this is a temporary bounce or a trend change to reflation
• Potential for China stimulus and the dovish global CB pivot to slow the data deterioration
• Despite the better data, FOMC voting members are still talking extremely dovish
• FF/IOER spread widening indicative of why the Fed will cut even if the data firms (don’t fight the Fed)

Since the July 5th Payroll day, the US has seen a mini run of better data. Therefore, the question du jour has become: is this another temporary blip up in the data (like we saw in January and May) inside the larger downtrend of data deterioration, or is there truly a real turn in the data developing?

The first thing to note is that after more than a year of the US data disappointing; economic surprise indices have entered the zone where the index tends to mean revert.

That’s not to say the data can’t still be weak. It’s just economist, who tend to be overly optimistic and playing from behind, catch up to the narrative that the data trend is lower and thus they downgrade all their forecast and voilà; surprise indices bounce.

In order to identify if the better data is a blip or a reversal, there needs to be a catalyst. Let’s identify a few major potential catalyst to a data pivot and assess if it can drive a reversal:

1) US/China Trade Wars – since the G20 “truce” that in reality yielded no progress, the news flow has worsened. To name a few…

• The Chinese insertion of Zhong Shan (considered a hawk) into the negotiating team suggests China is taking a harder line
• China now denying making any explicit commitment to buy more US agricultural products as the administration has previously said China would
• US officials pushing for sanctions on China over oil purchases from Iran
• AFL-CIO labor union threatening to end their support for Trump if he takes a softer stance

Bottom line – there is no progress to speak of and the two sides seem to be digging in. Therefore, considering trade wars have been a major cause of the data deterioration, this is will only lead to continued weakness not a reversal. Throw trade wars out as a catalyst for a data reversal for now.

2) China stimulus – since Q4 2018, China has instituted something like 88 incremental stimulus measures and there is always a multi month lag between the stimulus and the economic data. Here is an easy way to show the effects of stimulus to the data….

Additionally, on the liquidity front, the PBoC yesterday began injecting liquidity via 7-day reverse repos for the first time in 16 sessions. Over the past two days, the PBoC has injected CNY260b. That is a trend change.

Bottom line – it is entirely possible the 88 incremental stimulus measures is beginning to feed into the economic data and the renewed liquidity injections will also aid the economy. This bears watching.

3) The global Central Bank dovish pivot – We already know the PBoC, Fed, ECB, and BOJ have turned dovish out of the major central banks, and after last week we can add the BoC to the list as Poloz indicated the markets “aren’t factoring in the complexity of trade wars.” While not moving to an easing bias quite yet, the BoC has moved away from its tightening bias.

Only the Norges bank remains the lone G10 stand out towards hiking but even they could pivot shortly given the CPI “miss” last week.

The Baltic Dry has long been thought of as a read through to global growth (note: I have never been able to validate this but the market talks about it so let’s highlight it). Perhaps the global dovish pivot has started to feed through into better activity that could lead to a bounce in the sagging PMI’s.

Bottom line – with almost all CB’s moving to a dovish bias it will, at the very least, help stabilize the economic data/slow the rate of change of the deterioration.

Putting all that together, there is some scope for China stimulus and dovish central banks to slow the data deterioration theme we have spoken about for months now. However as long as trade wars languish, it will be very difficult to see a major reflationary turn.

* * *

The better data does not mean the Fed will not still cut rates. With good data in hand, we have received that confirmation from voting members of the FOMC in the past few days:

1) Chair Powell – continuing his staggering dovish comments:

“Sees June Core PCE running 1.7% YTD” (so still below their mandate and talking down the stronger CPI data last week)

• “Factors holding down the neutral rate is likely to persist” (this suggest more than an insurance cut)
• “We must continue to assess additional policy strategies (so AIT and YCC?)

2) Evans – along with Bullard signals there is at least 50bps of cuts coming:

• “Says he forecasts 50bps of accommodation to lift inflation”
• “Fed may need more than 50bps of cuts in cumulative easing” (that doesn’t sound like a one-time insurance cut)

3) The other FOMC voting members’ comments I showed in Friday’s note from Williams, Clarida, Brainard, and the FOMC minutes that all showed they will cut despite better payroll and CPI data.

• Please note the Fed’s preferred inflation gauge is Core PCE not the headline CPI data (Powell confirmed this yesterday)
• NFP was likely overstated by the rising number of people who are taking on two jobs – that gets double counted in NFP and is overall not a bullish read on the economy

As you can see above, the FOMC is highly likely to deliver 50bps before the year is out and there is scope for more.

There are other reasons besides weakening data why the Fed will cut. To repeat what I said in Friday’s note:
“You may disagree with my data deterioration theme which gives the Fed reasons to cut, but do not miss this important point why the Fed will cut:

• Rising deficits which causes increase treasury supply at a time when foreigners are losing their appetite to fund the US govt (as noted above in the bond auction) means the Fed needs to talk dovish/cut rates/provide accommodation/inject liquidity in order to keep yields from rising. We saw what happens when front end yields like 1y1y rise above 3% as it did in Q3 2018; the system breaks.”

The Fed Fund (FF)/Interest on Excess Reserve (IOER) spread is the clearest indication that the Fed will have to cut even if the data is turning better. It is the symbolic representation that debt levels are too high to have rising rates.

To recap what is pushing FF over IOER:

1) Deficits are increasing and projected to increase more

2) Increased deficits mean increased Treasury supply to fund the deficit (see chart in point #4)

3) Decreasing foreign demand in UST’s means domestic demand is needed to take down the supply

4) That need for domestic demand is causing repo rates to increase and reserves to shrink. Rising repo rates are taking FF higher it and above IOER:

Therefore, there are only a few ways to stop Fed Funds from rising (since cutting IOER did not help):

• To my point above, the Fed will cut the Fed Fund rate (to the chagrin of those that think the data is strong)
• The government will have to cut the deficit (as Powell stated in his testimony to Congress last week, but unlikely any time soon)
• The Fed will have to institute a standing repo facility (as stated in the Minutes, it is being considered but it is complicated)

Therefore, even if you think the data is not weak enough to warrant Fed cuts, the Fed has to cut to control Fed Effective. You simply cannot have rising yields any more.

What do I mean by you can’t have rising yields? Just look at how S&P’s traded yesterday after the US received its strong retail sales report and fixed income sold off. The 5yr note future made its lows at 9am EST and by 11am, S&P’s were breaking down.

As we saw in December, you can’t have S&P’s falling off a cliff or the whole economy goes with it and that puts the massive credit market also at risk. Therefore……the Fed has to act to compress yields which means whether this is a reversal of the data or not, the Fed will cut rates.

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

Facebook’s second day of Congressional hearings over Libra was by most accounts a total debacle – between Rep. Carolyn Maloney (D-CA) suggesting that the social media giant ‘shouldn’t launch’ the cryptocurrency – as new currencies should be ‘left to democratically accountable institutions,’ and another lawmaker accusing the company of ‘winging it.’ 

“Would you trust your money with a company that is just winging it?” She isn’t buying what they are selling either. pic.twitter.com/zD3tG6zGTZ

— Mister AntiBully (@MisterAntiBully) July 17, 2019

Perhaps the most significant revelation, however, was Facebook executive and Libra head David Marcus giving a disturbing answer over whether individuals banned from Facebook will be allowed to use the digital currency, while also claiming that the Libra Association will remain politically neutral. 

Interesting question
Duffy: “Can Milo Yiannopoulos use Libra? Can Louis Farrakhan? Both of those people are banned from Facebook.”
Marcus: “I don’t know yet.”

— Blake Montgomery 💀 (@blakersdozen) July 17, 2019

⚠️WATCH: FACEBOOK REP **CONTRADICTS** THEMSELVES on political neutrality, when asked about the Libra Association’s ability to EXCLUDE people based on social/political views.

Can they or can’t they? The answer is unclear. pic.twitter.com/4eNGZGDjlL

— NewsChute (@NewsChute) July 17, 2019

Facebook also took flack for being, well, Facebook. 

“Just because we may not fully understand a new technology proposal does not mean we should immediately call for its prohibition,” said Rep. Patrick McHenry of North Carolina – the Committee’s ranking Republican. “But let’s face it, let’s be honest, it’s Facebook, and I’m skeptical.”

Meanwhile, House Financial Services Committee Chair Maxine Waters (D-CA) has already unveiled draft legislation which would block Facebook from creating Libra, and has compared the company to ‘scandal-plagued’ Wells Fargo, per the Washington Post. 

Marcus attempted to defend Facebook, telling the lawmakers “I believe we’re owning these mistakes and working hard in remedying them and working hard at improving on all fronts.” 

It doesn’t appear anyone’s buying what Facebook is selling.

Watch what’s left of the hearing below:

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

Authored by Paul Joseph Watson via Summit.news,

A British woman has been awarded for designing a chair that prevents “manspreading” by forcing men to sit as if they don’t have any balls.

I’m not even joking.

“Manspreading,” otherwise known as ‘having a pair of testicles’ – is where men sit with their legs spread apart on public transport.

23-year-old Laila Laurel says she designed the chair “following her own experiences of ‘manspreading’”.

“It came both from my own experiences of men infringing on my space in public, and also from ‘The Everyday Sexism Project’, a website founded by Laura Bates in which women self-testify about sexism they experience,” she told LadBible.

“With my chair set I hoped to draw awareness to the act of sitting for men and women and inspire discussion around this,” added Laurel, who was given the Belmond Award for emerging talent (whatever that is).

But here’s the kicker; Laurel has also designed a chair which encourages women to engage in the very same behavior she complains about the men doing.

If you’re wondering if that makes any sense whatsoever then stop because it doesn’t.

Also, from an aesthetic viewpoint, the designs look absolutely hideous.

Unfortunately, there is no chair being designed to prevent female bagspreading.

Stop the #bagspreading ! #manspreading #Hypocrisy #feminism pic.twitter.com/yKMHu1WReT

— JaiArts (@jaiartz) June 17, 2017

The response to the design was not very sympathetic.

“This is one of the most ridiculous things I’ve read this year. She has made a chair to prevent men from ‘manspreading’ and made one for women which encourages it?” commented one Twitter user.

“She needs to wear that device that simulates having ball(s), maybe then she would learn to have some sympathy toward men instead of feeling entitled to tell them how to sit,” added another.

“Imagine if a man designed something to stop a woman doing ANYTHING…. the feminist and sexist backlash would be unimaginable,” remarked another.

We’ve now reached the stage where identity politics has to be injected into chairs – chairs for fuck’s sake.

As we previously reported, a Transport For London ad lectured men on the tube on how to sit.

Where will the insanity end?

*  *  *

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via ZeroHedge News https://ift.tt/30B78qb Tyler Durden

An Austrian passport found in Jeffrey Epstein’s 21,000 square-foot Manhattan townhome, containing Epstein’s photograph but listing a different name, contains customs stamps indicating that he used it to enter at least four countries, – contradicting a defense argument that it was only on hand in the event of a hijacking.

In a late Wednesday court filing, US Attorney Geoffrey Berman writes “The defendant’s July 16, 2019 letter asserts: “[A]s for the Austrian passport the government trumpets, it expired 32 years ago. And the government offers nothing to suggest — and certainly no evidence — that Epstein ever used it.” 

Berman rebuts this claim, writing: “In fact, the passport contains numerous ingress and egress stamps, including stamps that reflect use of the passport to enter France, Spain, the United Kingdom, and Saudi Arabia in the 1980s.” 

“The Government further notes that the defendant’s submission does not address how the defendant obtained the foreign passport and, more concerning, the defendant has still not disclosed to the Court whether he is a citizen or legal permanent resident of a country other than the United States.” 

On Wednesday, Epstein attorney Marc Fernich wrote in a supplemental filing arguing for why Epstein should be granted house arrest, telling the court that “Epstein – an affluent member of the Jewish faith – acquired the passport in the 1980s, when hijackings were prevalent, in connection to Middle East travel. The passport was for personal protection in the event of travel to dangerous areas, only to be presented to potential kidnapers, hijackers or terrorists should violent episodes occur.“

This was a lie, and should weigh heavily on Judge Richard M. Berman’s Thursday decision over whether or not Epstein should live in the lap of luxury while awaiting trial on charges of sex-trafficking minors. 

via ZeroHedge News https://ift.tt/2Y1F3ej Tyler Durden

Authored by Peter Earle via The American Institute for Economic Research,

U.S. Treasury Secretary Steve Mnuchin piled on to comments made recently by President Donald Trump by calling cryptocurrencies a “national security issue.” Bitcoin and crypto proponents more broadly have long wondered if (and how) the government of the United States would recognize the slow but steady encroachment of decentralized assets, and it appears to have begun. Facebook’s announcement of the Libra project on June 18, 2019, will likely prove the point on countless future historical timelines at which the U.S. government began a slow, ultimately ineffectiveassault upon the cryptocurrency realm.

Everything that Mnuchin attributed to Bitcoin – for one thing, that it has been used in concert with such “illicit activity [as] cyber crime, tax evasion, extortion… illicit drugs, and human trafficking” – can be said, and to degrees an order of magnitude or more larger, about the U.S. dollar. It’s an argument suitable for children. 

All of this is extremely bullish for Bitcoin and the entire cryptocurrency complex. A bipartisan political salvo against crypto assets will undoubtedly accelerate the pace of innovation as well as increasing the value proposition, and ultimately the market price, of assets that ensure privacy. Higher prices will draw more crypto developers into the market and direct more resources at capturing market share, which means — as in any market — that consumers are the ultimate beneficiaries.

Mnuchin isn’t wrong, though. There is a tremendous risk to American national security where currencies are considered: the dollar. Those who habitually cite its reserve-currency status as a reason not to worry are making an argument that stands on increasingly precarious foundations: since 2010, the U.N. and other groups have cited the dollar’s downward slide in value, urging the adoption of an alternate system of reserves. Earlier this year, the Russian government shifted $100 billion in reserves out of the dollar, into the Chinese yuan. Oil futures denominated in the yuan have been trading for just over one year now, and are steadily gaining liquidity. 

The theoretical framework by which the issuer of the reserve currency is at its most secure holds that it is or should be a creditor nation with a current account surplus, but the U.S. is a debtornation with a current account deficit. More importantly, many have pointed out that the volume of trade is a necessary foundation of reserve status, yet the current administration has both a vocal and policy affinity for interfering with international commerce; the president has famously referred to himself as a “Tariff Man.”

In August 2011 – when the U.S. had a quaint $14 trillion in debt – a crisis over the debt ceiling caused Standard & Poor’s to reduce the credit rating on debt issued by the Treasury. The reduction of the credit rating was tiny, but the knock-on effects were legion. The Dow Jones Industrial Average fell over 2,000 points in the days surrounding the negotiations; within two weeks, a number of Persian Gulf states renewed discussions about diversifying away from the U.S. dollar.

When the pound sterling lost its reserve-currency status to the U.S. dollar, the process took decades: it was an “accumulation of blows” rather than a coup de grace. This is the only realistic way in which such a shift could happen; otherwise, the costs of transacting would suddenly change radically. When the dollar became competitive with the pound, the switch was relatively painless. As the economies of both the Eurozone and China grow, the prospect that either the euro or the yuan — or, more likely, that the similarly disruptive formation of baskets of currencies that include the dollar, albeit in far smaller amounts than are currently held — will take over the dollar’s role becomes increasingly realistic. 

Add to this a 20-year war in Afghanistan with no end in sight, a U.S. military presence in over 150 countries worldwide, a mounting willingness to rattle sabers in regions far from domestic shores, and the increasing evidence that the Federal Reserve is not only not independent but highly susceptible to short-term political influence, and the decline of faith in the U.S. dollar becomes understandable. More so when one considers how many thousands of lives, and trillions of dollars, wouldn’t have been squandered under a commodity-backed or cryptocurrency-based monetary system: because it couldn’t have been. 

Mnuchin would be well advised to leave market forces to work in their inexorable march toward increasingly sound, more functional iterations of cryptocurrencies and other decentralized digital assets, and to shift his attention toward the countless political factors that are eradicating the last vestiges of faith and credit in the dollar. If the current path is maintained (and quite possibly even if it isn’t), the future belongs to truly “dependable and reliable” monetary media: cryptocurrencies and precious metals. 

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

Here at Zero Hedge, we’ve dedicated plenty of attention to signs of “Japanification” in European bond markets…

… with the issue taking on even more urgency now that we have influential bond strategists earnestly advocating the purchase of equities by the ECB, and the Fed in the middle of a policy U-turn that has prompted the market to price in at least three interest rate cuts by the end of the year…

…previously “conspiratorial” ideas like the Fed buying equities to turbocharge its stimulus program are beginning to look eminently plausible.

For readers who are unfamiliar with the term, “Japanification”, also known as Albert Edwards “Ice Age” concept, it involves the dawn of a new economic paradigm characterized by stagnant growth and pervasive deflation, where central bank debt monetization is needed to finance public spending to keep economies from sliding into contraction.

Already, there’s reason to believe that both the US and Europe are heading for the same monetary policy trap as Japan. Case in point: the neutral rate – or r*, as the economists at the Fed like to call it – has failed to revert back to its pre-crisis level.

And with the Fed likely to cut rates later this month and global bond yields tumbling to levels not seen in years, if ever, hedge fund manager Kyle Bass has revealed his latest trade in an interview with the  FT: Bass is betting that the Fed will slash interest rates to just above zero next year as the US economy slides into a recession, forcing the Fed to restart QE, and possibly even consider more radical alternatives like buying equities.

Though economic data in recent weeks has staged a mild recovery (which ended with Wednesday’s home-sales data), the general trend remains clear: As Powell reminded us last week, all signs point to a slower economy ahead.

To be more precise, Bass believes the longest economic expansion in US history will come to an end next year. And to be fair, this isn’t exactly a radical view: a recent survey that asked CFOs for their outlook on the economy found that two-thirds of them believe the next recession will begin by the first quarter of 2021.

But if you’re inclined to discount the ‘soft’ survey data, the NY Fed’s recession indicator, which, as Morgan Stanley  notes, has proven eerily reliable in the past, is also flashing a warning sign.

However, once the Fed re-launches QE and cuts rates this time, Bass suspects the US economy will become stuck in the “tractor beam” of low rates and QE, and remain stuck in easing mode – much like the BOJ – forever.

“As we have all learned, once an economy falls into the tractor beam of zero rates, it’s almost impossible to escape them,” Bass told the FT. The Heyman Capital founder said his concerns about the economic outlook are rooted in the flattening yield curve, particularly the inversion that saw long-term rates fall below the rate on the three-month T-bill.

“In the long run the US is heading the same way,” he said. “Growth numbers are going to come down and real growth might go to zero. We’re probably never going to go away from zero rates.”

Unlike his contrarian bet on the housing market, Bass is hardly alone in betting on lower interest rates. Unfortunately, if his view turns out to be correct, millions of financially insecure Americans and retirees struggling to live on a fixed income are going to be in for a rough time.

via ZeroHedge News https://ift.tt/2JE5xdG Tyler Durden

Authored by Brandon Smith via Alt-Market.com,

There is a very bizarre narrative being circulated in the mainstream economic media and it goes a little something like this:

“The Federal Reserve has capitulated on liquidity tightening yet the US economy is “stronger than ever”, isn’t that weird?”

There are a couple things wrong with this statement.

First, the Fed has not yet capitulated on its tightening policy. In fact, we have been hearing since last November from the mainstream media and some alternative media that the Fed was going to lower its Fed Funds Rate and end monthly balance sheet cuts at “any moment”, yet several months later it still has not happened. Just last month the Fed cut another $38 billion in assets from its balance sheet; a move that was barely discussed in the mainstream because it does not fit with the prevailing delusion that the Fed has “already capitulated”. When the Fed cuts rates back significantly and the asset dumps stop, then and only then can anyone say with any authority that the Fed has ended its tightening cycle.

Secondly, the US economy is not “stronger than ever”, it is at its weakest since just before the credit crash of 2008.

And here is where the disconnect begins in Fed policy versus public expectations and the behavior of the Trump Administration. Almost EVERYONE, including the Federal Reserve, Donald Trump and the media are talking about how the US economy is “booming”. So why all the fuss over the Fed’s interest rates? The truth is it’s just more theater for the masses.

The battle between Trump and Fed Chairman Jerome Powell over Fed policy is a farce and always has been. Consider the facts – Trump ran his election campaign partly by taking a stance against central bank stimulus measures and ultra low rates. He explicitly attacked the notion that the US economy and stock markets were strong under Barack Obama, warning that the markets were in a bubble created by the Fed’s easing measures. Then, as soon as he entered the White House Trump flipped narratives and claimed the economy and the markets were strong, and that they were strong because of him.

Trump also said a little over a year ago that he wanted a strong US dollar, now he has reversed completely and says he wants a weaker dollar. In an indirect manner Trump has recently called for a monetary race to the bottom in competition with other nations. This display of bewildering policy gymnastics could be taken one of two ways – one, Trump is bipolar, or two, Trump is following the script that is given to him by the money elite day-to-day just like every president before him for at least the past hundred years. But what is the point of this absurd show?

As I have examined in depth in past articles, I believe the evidence shows that Trump is a pied piper for conservatives, and his attacks on the Fed are nothing more than world wrestling federation-style dramatics for the benefit of his base supporters.  Does anyone else think it’s rather strange that a supposedly fiscally conservative president is fighting for monetary easing while the Federal Reserve (the KING of easy money for the past decade) is fighting for liquidity tightening?  This only makes sense when you look at Trump’s background…

Trump’s companies have faced at least four separate bankruptcy threats since the 1990’s, yet he has been bailed out on more than one occasion by surprise investors. The most prominent of these investors was the Rothschild family through their agent Wilber Ross. Trump was saved from his vast debts tied to his Taj Mahal casino complex and three other major properties by the Rothschilds in the 1990’s, and some of these properties would go on to face bankruptcy again in 2009. The Taj Mahal would later sell for 4 cents on the dollar, yet Trump would always come out financially unscathed from these events.

Trump’s reputation and perhaps his entire current fortune is owed to the Rothschilds. This is probably the reason why, after becoming president, Trump loaded his cabinet with multiple globalists and banking elites, including Wilber Ross as his Commerce Secretary.

Trump is a perfect foil or catalyst to create the kind of chaos the banking elites need as cover for an event they sometimes refer to as “the global economic reset”. The economic reset is meant to cut a path to complete global centralization; meaning a one world monetary system controlled by the IMF, a one world currency, and ultimately a one world government. The Rothschilds (among many other elites) have publicly admitted to this plan numerous times, displaying their schemes in plain view in publications they own or control, like The Economist magazine.

Trump’s sudden shift from harsh critic of the US economic situation to taking ownership of every facet of the economy as if he is the sole cause of its supposed ascension is entirely deliberate. Trump is MEANT to take ownership of the US economy because he is MEANT to take the blame for its inevitable crash. If we look at almost every fundamental indicator a crash is already taking place now.

We now see the housing market suffering from a 7.8% overall drop in sales and an 8.1% drop in prices. We see auto market sales at the slowest pace in four years as interest rates rise on auto loans. We see historic levels of consumer debt and corporate debt. We see massive retail closures (more than 7500 closures announced so far this year), a grinding halt to shipping and freight, seven year lows in Global manufacturing PMI, the weakest U.S. manufacturing PMI since 2009, and a three month running inversion in the treasury yield curve, etc.

You will not see the Federal Reserve, the mainstream media or Donald Trump mention much about these signals of decline. The media will pay lip service at times while also promoting the notion that employment, GDP and the stock market are sure signs that the economy is “strong”.

Trump no longer argues that these indicators are rigged, even though unemployment stats do not include over 96 million working age Americans that are unemployed and are not counted on the benefits rolls. Even though GDP is calculated to include most government spending as if it is the same a wealth creation rather than wealth confiscation. Even though the stock market is entirely manipulated by unprecedented corporate stock buybacks, as well as levitated by Chinese stimulus measures flooding the global liquidity pool and investor hope that the Fed is about to reintroduce QE “at any moment”.

The Fed continues to claim that the US economy is experiencing a “strong” recovery.  The central bank’s public statements and “Beige Book” reports consistently paint a picture of financial health.  If the Fed was backing off of its tightening cycle, then why do they keep promoting the lie that the economy is stable and growing?

This is where we see the collusion between Trump and the media and the Fed. None of them will admit that the US economy is a fraudulent illusion. All of them are actively hiding the facts from the public. All of them are setting the American people up for an epic fall.

In terms of the fight over interest rates, Trump is playing his role as a bumbling villain; the guy who tried to meddle in economic affairs he did not fully comprehend and then bankrupted the country just like he bankrupted his own properties.

Many conservatives are eating up the propaganda that Trump is anti-fed, with endless stories on how Powell “had better watch out” or Trump will “have his head”. This sets up another false narrative that Trump is somehow in control of the Fed’s behavior. He is not. Trump’s own acting Chief of Staff staff has said “Trump knows he does not have the authority to fire Powell.” And, just last week Jerome Powell stated bluntly that if Trump tried to fire him he simply would not leave.Trump controls nothing when it comes to central bank policy. The Fed does whatever it wants to do.

I would point out that the Fed’s ONLY warnings surrounding the US economy have been rooted in “concerns” over Donald Trump’s policies, and more specifically the trade war.  They are already injecting the idea into the public consciousness that “everything was fine in the US economy until Trump came along”. The stage has been set for the controlled demolition of the US financial system and of conservative ideals of sovereignty.

The elites intend to use Trump as a parable, a warning to future generations. They will say – “You see, this is what happens when you allow populists and nationalists to take power. This is what happens when conservatives are allowed to propagate their crazy ideals. This is what happens when you try to interfere in the autonomy of central bankers who know better than you how to run the economy – You get a catastrophe.”

If the Fed actually does “capitulate” (one of these days), then history can blame Trump for putting political pressure on central bankers who are “supposed to be independent”. If the Fed does not capitulate and Trump continues his attacks on the institution history can still blame Trump for sowing the seeds of doubt and damaging faith in the US financial structure.

In the meantime, the Fed and other central banking institutions have created all the elements necessary to cause a devastating blow to the global economy and most of all the US economy. If Trump were a legitimate patriot and defender of US interests he would detach his administration from the stock markets and openly admit to all the factors that show our financial system is failing. But he will not do this. That is not his job. His job is to act chaotic, to confuse the public, to play shepherd to conservatives while leading them to the slaughterhouse, and to become a scapegoat for a crash the central bankers set in motion over 8 years before Trump became president.

*  *  *

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

It’s finally ‘game over’ for Turkey and the F-35 joint strike fighter program after it received a first batch of S-400 Russian-made air defense components starting last Friday, with Russian military planes continuing deliveries into early this week.  

“Turkey’s decision to purchase Russian S-400 air defense systems renders its continued involvement with the F-35 impossible,” a White House statement read. The official statement added:

“The F-35 cannot coexist with a Russian intelligence collection platform that will be used to learn about its advanced capabilities.”

Purchased F-35 deliveries from their Lockheed Martin producer had already been held up for the past year as Washington and Ankara exchanged threats over the impending S-400 purchase. Up until today it wasn’t clear if the Trump administration would follow through on its promise to indefinitely block the transfer. 

“Turkey has been a longstanding and trusted partner and NATO Ally for over 65 years, but accepting the S-400 undermines the commitments all NATO Allies made to each other to move away from Russian systems,” the statement continued.

The Pentagon will also transfer Turkey’s industrial participation in the F-35 to other countries by 2020, which will cut major Turkish defense contractors Turkish Aerospace Industries, Roketsan and Tusas Engine Industries, and others from development on the F-35 platform — a loss of an estimated $9 billion over the life of the program.

However, according to Defense News the Pentagon hasn’t completely ruled out Turkey rejoining the program should it reverse course on acceptance of the S-400, something not at all likely to happen. 

After in the past week it canceled two press briefings related to Turkey, the Pentagon held a rare on-camera conference immediately following the White House statement. 

“Turkey cannot field a Russian intelligence collection platform in proximity to where the F-35 program makes repairs, and houses the F-35,” Undersecretary of Defense for Acquisition Ellen Lord told reporters. “Much of the F-35′s strength lies in its stealth capabilities, so the ability to detect those capabilities would jeopardize the long term security of the F-35 program. We seek only to protect the long term security of the F-35 program.”

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

Authored by Onar Am via LibertyNation.com,

On July 20, 1969, Apollo 11 took humans to the moon for the first time. Now, 50 years later, an increasing number of people believe that the moon landing was an elaborate hoax.

Some explain this strange conspiracy theory in psychological terms. Being a contrarian can make people feel special, producing a feeling of belonging to a uniquely wise and insightful elite. Others consider it an expression of hatred for America, grasping at any straw that can portray the US in an unfavorable light.

A rarely discussed third reason is the near-religious belief in progress as promoted by the philosophers Georg Wilhelm Friedrich Hegel and Karl Marx, who believed that history inevitably marches toward a better world. But in many areas, we have regressed. NASA no longer is capable of going to the moon, and the last time any human has set foot on our celestial neighbor was in 1972 with the Apollo 17 mission.

If progress is inevitable, why don’t we have hotels on the moon?

For some, it is easier to believe that the moon landing was fake than to accept that technological innovation has just stopped.

The Hiatus In Progress

But wait, don’t we have smartphones now, the internet, and all sorts of cool gadgets and apps that didn’t exist 50 years ago? True, the fields of electronics and telecommunications have seen enormous advances, but these few hotspots of innovation cloak the fact that, in almost all other areas, technological development has ceased. Silicon Valley investor Peter Thiel documented this decline in his book Zero to One, in which he describes several surprising facts:

• Consider the average car speed. Due to more traffic and congestion, it takes longer to get to work today than it did in 1970. Air travel takes longer, too. We used to have supersonic airplanes, but the Concorde went out of business in 2003.

• In 1970, a family could afford to buy a house with only one salary. Increasingly this is not true. Health care and education used to be affordable, but the prices keep going up.

• You have perhaps heard of the growing problem of microbial resistance to antibiotics. Maybe that makes more sense if you also knew that no new antibiotic drug has been developed since the 1960s.

• Medical innovation also is slowing down. Despite more and more money being invested in drug development, fewer drugs make it to the market, according to Thiel.

Regulations

Why has innovation nearly stopped? The simple answer is likely regulations.

Regulations slow down and prevent innovation by making every endeavor more expensive and less efficient. Today, for instance, it takes on average ten years and $100 million to get a new drug through the FDA approval process. Unlike many other countries, America has spent much of its wealth on financing bureaucrats that make life difficult for inventors. For that reason, the United States is no longer the freest country in the world.

In fact, the Scandinavian countries that Sen. Bernie Sanders (I-VT) often describes as an ideal typically score higher on economic freedom than the United States. A key factor in their success is a lean government with few and more efficient regulations. Despite being large welfare states, it is easier to do business in these countries than in America.

Great Again?

While perhaps not aware of why it was happening, a lot of Americans sensed the slowing of the US economy. That likely is why so many voters responded to President Donald Trump’s 2016 slogan, Make America Great Again.

He promised to slash regulations, and so far the economy has responded with healthy growth and record-low unemployment numbers. The Daily Wire’s new four-episode documentary Apollo 11: What We Saw featuring Bill Whittle describes a time before all those regulations.

Whittle dismantles the fake moon landing conspiracy theory by showing that before Neil Armstrong took that giant leap for mankind, hundreds of small incremental steps had to be made. Each of those steps would have been impossible if draconian health and safety regulations had been in place.

The greatest lesson of Apollo 11 may be that, once upon a time, before the slow and gradual decay into red tape and socialism, America used to be an engine of innovation and growth. Maybe it can be great again?

via ZeroHedge News https://ift.tt/2XXT6x8 Tyler Durden

AOC is going to have some competition when she runs for re-election in 2020 – and unlike Joe Crowley, the Democratic Party boss she defeated in a historic, upset primary, her next opponent could be a woman of color, an immigrant and – wait for it – a Republican.

Fox News reports that Scherie Murray, a New York businesswoman who immigrated from Jamaica when she was nine, is launching a campaign on Wednesday to take on AOC.

Murray said that her home borough of Queens is facing a “crisis” – and its name is Alexandria Ocasio-Cortez.

“There is a crisis in Queens, and it’s called AOC,” Murray told Fox News. “And instead of focusing on us, she’s focusing on being famous. Mainly rolling back progress and authoring the job-killing Green New Deal and killing the Amazon New York deal.”

She launched her campaign with an introductory video detailing her family’s move to the US, to her business career. In the video, Murray accuses AOC of choosing “self-promotion over service” and said Queens and the Bronx need someone who will bring in jobs, not turn them away – a reference to AOC’s driving Amazon’s HQ2 out of NYC.

When it comes to AOC’s policies, Murray said they are “far, far to the left” and “not connecting with everyday Americans.”

She added that “Medicare-for-all,” which AOC supports, isn’t as popular with Americans who are happy with their current health-insurance plans. As for AOC’s Green New Deal, “we know that it certainly will kill jobs.”

Murray isn’t the only Republican who has declared their intention to run for the seat: Former police officer John Cummings, medical journalist Ruth Papazian, construction contractor Miguel Hernandez and entrepreneur Antoine Tucker have also thrown their hats into the ring.

There’s also been some speculation that establishment Democrats could rally behind Joe Crowley to stage a primary challenge to AOC.

Murray’s campaign materials don’t mention Trump, but when asked if she is a Trump supporter, she replied “yes.” She also said she doesn’t believe President Trump is a racist.

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