Tag: news

In what is astoundingly awkward and embarrassing timing, pro-Haftar LNA forces besieging Tripoli have now admitted they ‘mistakenly’ shot down a US military drone over the Libyan capital last week.

The incident occurred just as Trump admin officials were holding an unprecedented series of meetings with an official representing Gen. Khalifa Haftar’s political team named Aref al-Nayed even though Washington still gives official recognition to the UN-backed GNA government in Tripoli (Trump began praising Haftar, however, last April).

Over the weekend US Africa Command (AFRICOM) stated in a press release that an unarmed, likely a surveillance drone was lost over Tripoli last Thursday [Nov. 21]. However at the time it remained a mystery as to how the some $16 million drone was downed, with the Pentagon giving very few details other than to say the incident remains under investigation.

And now mystery solved:

A senior official in the LNA’s general command said they mistook the U.S. drone for a Turkish-made drone used by the Tripoli-allied militias. The LNA also downed an Italian drone southeast of Tripoli in recent days.

Pro-Haftar forces have essentially imposed a ‘No Fly Zone’ over Tripoli as their air power, which includes Russian MiG fighters and their own drone arsenal, is considered superior to that the the besieged Government of National Accord.

According to the Associated Press the LNA apologized for downing the American drone and has “agreed with the Americans to coordinate their operations over Tripoli and its surrounding areas to avoid similar incidents in the future.”

“The LNA fighters did not share photographs of the U.S. drone online as they usually do when they shoot down drones, including the Italian one last week,” another official was quoted by the AP as saying.

Oil-rich Libya was thrown into civil war nearly a decade ago when NATO forces overthrew Moammar Gadhafi. It’s been another great blunder in Western military forces who’ve spent the last several decades crusading around the Middle East, sparking wars across the continent. 

The latest outbreak of fighting has been based in Tripoli. Since about 2015, Libya has seen its government splintered into two, one based in Tripoli and the other in the country’s east. The eastern government forces have been attempting to recapture Tripoli since April, and fierce fighting in the capital continues into the late year.  

The other embarrassing contradiction in this latest drone shoot down incident is that Khalifa Haftar holds American citizenship (after his over two decades in exile in D.C. during the latter part of Gadhafi’s rule). So basically a dual US citizen is commanding forces that just shot down a US drone. 

Authored by Simon Black via SovereignMan.com,

Late last week, Amazon founder Jeff Bezos gave away nearly $100 million to more than a dozen charities across the United States.

It would take the average person more than 1,000 centuries to accumulate that much money. Yet Bezos gave it away in a single day.

And it’s not like that was the first time he’d ever given to charity. Bezos has already donated billions of dollars to other philanthropic endeavors.

You’d think that such generosity would be appreciated. Yet when Forbes announced Bezos’ gift last week, Twitter user punkassbamboo complained:

“A whopping .09% of his net worth. Thanks so much Jeff.”

This is classic Bolshevik mentality: punkassbamboo and his fellow Bolsheviks see themselves as victims… and everyone else as the enemy. And no matter what the enemy does, it’s never enough.

So despite giving away $98.5 million to help the homeless, Bezos is just a stingy billionaire asshole.

The legions of Bolsheviks like punkassbamboo, of course, have absolutely no trouble finding sympathetic politicians who threaten to confiscate the wealth of businesses, entrepreneurs, and anyone who has achieved success.

Every single Bolshevik politician plays the same tune: rich people are selfish, corporations are bad, and there’s too much wealth concentrated in the hands of the few.

Bernie Sanders constantly tells his supporters that the 3 wealthiest people in the country have more money than the bottom 50%.

He’s right; the wealth gap in the United States hasn’t been this extreme since right before the Great Depression.

And these Bolsheviks feel compelled to ‘fix’ this.

US Presidential candidate Cory Booker, for example, absurdly proposes to tax unrealized capital gains, while Elizabeth Warren wants a wealth tax.

They’re both remarkably stupid ideas, but they’re essentially different variations of the same concept: confiscating legitimately earned wealth.

And this is the part that I find truly incredible– because, when you think about it, there are actually TWO ways of closing the wealth gap.

1. You could either make wealthy people less wealthy.

2. Or you can help poor people become less poor.

But they never, ever once, have considered the second approach. They ONLY focus on the first one. Raise taxes on rich people. Raise taxes on corporations.

Wealthy people are wealthy for a reason: they’ve either started a successful business, or they have incredible financial acumen.

Yet the Bolsheviks never say, “Let’s make it easier for punkassbamboo to build relevant skills, raise capital, start a business, and become a successful millionaire entrepreneur.”

But do you know who has done that? Jeff Bezos.

Amazon is such a massive economic force that it has spawned entire industries of people who earn a good living providing services and selling products through the platform.

Bezos has made it possible for anyone with zero skills, poor education, and almost no capital, to start a business selling products on Amazon.

There are thousands of websites and YouTube videos to learn how to do this FOR FREE. And Bezos has made it so easy that a budding Amazon entrepreneur can be up and running in a matter of hours.

And the amount that you can earn online is substantial.

I’ve mentored dozens of Amazon business owners at my annual entrepreneurship workshop–

One former student was selling more than $20 million of products per year with just one employee, and others became so successful that they sold their Amazon businesses for several million dollars.

None of these entrepreneurs came from money. They built successful businesses from scratch by educating themselves and capitalizing on the opportunity that Jeff Bezos created.

Something tells me that no one has ever become a millionaire because of Elizabeth Warren… and no one ever will.

Elizabeth Warren lists more than 50 detailed plans on her website. They include things like breaking up tech companies, taxing wealthy people, keeping low-paying manufacturing jobs in the US, etc.

But not a single plan focuses on closing the wealth gap by making it easier for people like punkassbamboo to become successful.

Frankly that doesn’t fit the Bolshevik agenda.

Success has a funny way of building someone’s confidence and independence. When you work hard and become successful, you begin to see yourself achieving even more.

But Bolshevik politicians depend on their supporters seeing themselves as victims, not as champions.

Their power comes from keeping people angry, afraid, and downtrodden.

So they’ll never aim to close the wealth gap by helping poor people become successful.

With interest (even among Democrats) in the impeachment process sliding, the House Judiciary Committee is set to take over the impeachment probe of President Trump next week, scheduling a Dec. 4 hearing.

As The Hill reports, behind Judiciary Chairman Jerrold Nadler (D-N.Y.), the committee will hear from legal scholars as Democrats weigh whether the evidence turned up in their weeks-long impeachment inquiry warrants the drafting of articles aimed at removing the president from office.

The hearing, scheduled for next Wednesday, will focus on the definition of an impeachable offense and the formal application of the impeachment process. The panel will invite White House lawyers to attend and participate.

Ahead of the hearing, Nadler wrote to Trump requesting his participation – or that of White House counsel – as part of ensuring “a fair and informative process.”

Nadler announces first Judiciary Committee impeachment hearing and tells Trump he can participate. https://t.co/WsVyodGwSj pic.twitter.com/mgUEmD3Efo

— Dan Friedman (@dfriedman33) November 26, 2019

And onwards the circus goes…

Via SaraACarter.com,

“Adam Schiff has been my congressman since 2012. He became my congressman through the redistricting process,” said Jennifer Barbosa, an independent who is challenging Rep. Adam Schiff (D-CA). Schiff is wasting federal funds trying to impeach President Trump, while his state continues to suffer from an unprecedented homelessness crisis, pointed Barbosa.

“Since he became my congressman he has not presented any legislation that’s become law. In terms of homelessness, what he’s done is he’s basically rubber-stamped Maxine Waters’ bill to deal with homelessness, and her bill essentially replicated the same failed policies that [L.A.] Mayor [Eric] Garcetti has implemented in our city over the past few years.”

“We know they’re not working,” Barbosa continued.

“So, what we need to do in terms of homelessness… we need to stop allocating federal funds for affordable housing which costs $500,000-700,000 per unit and really focus on mental health services for the people who are living on the street.”

When in U.S. Congress in @AdamSchiff’s place, I promise to NOT commence $70 million doomed-to-fail Impeachment Hearings less than 1 year before a Presidential Election or 3 weeks before a November 21 government shutdown.
That’s not what representatives are elected or paid to do. pic.twitter.com/S2hFI8XW7V

— Barbosa for Congress (@TeamJenBarbosa) November 6, 2019

President Trump is still playing coy  about whether he plans to sign a bill declaring support for the Hong Kong protesters over the objections of the Chinese government, but the strain that this controversy has caused to the US-China relationship is becoming too difficult to ignore.

An editorial published Tuesday by the Global Times, a popular Chinese tabloid and Communist Party mouthpiece, slammed Ted Cruz over his support for the “Taiwan Symbols of Sovereignty Act.” Among other provisions, the act will legalize the display of the Taiwanese flag at US government agencies.

It might not seem like much, but these changes carry some heavy symbolism: If passed, it will allow heretofore-prohibited deference to the Taiwanese flag, ultimately contributing to the legitimization of Taiwan as an independent state, rather than a rogue province legally ruled by China.

In response, Beijing blasted Cruz and policy advisor and former Trump aide Christian Whiton, accusing them of trying to court relevance by going after China.

In the eyes of certain US politicians like Cruz and Whiton, the one-China policy has inflicted “extreme insults” to Taiwan citizens and set restrictions for the US, but it is exactly this policy that has helped maintain stable China-US ties over the past 40 years. Once Cruz’s ridiculous bill is passed, it would be an overt violation of Washington’s own words, would cast all his predecessors’ efforts to the wind, and lead to disastrous consequences.

China must be and will be reunified – this is Beijing’s persistent position. China has already made it clear that “if anyone dares to split Taiwan from China, the Chinese military has no choice but to fight at all cost for national unity.”

GT called Cruz’s plan “an overt violation” of the “One China” deal, which has maintained peace between the two countries for 40+ years. They added that the bill’s passage would carry “disastrous” consequences for the US.

In the eyes of certain US politicians like Cruz and Whiton, the one-China policy has inflicted “extreme insults” to Taiwan citizens and set restrictions for the US, but it is exactly this policy that has helped maintain stable China-US ties over the past 40 years. Once Cruz’s ridiculous bill is passed, it would be an overt violation of Washington’s own words, would cast all his predecessors’ efforts to the wind, and lead to disastrous consequences.

The rhetoric employed by GT in the editorial was surprisingly violent. At one point, the author even warned that the Chinese army would assassinate American lawmakers like Cruz who get out of line.

The bill is a bare provocation. Anyone who challenges China’s core interests must pay a heavy price. Once Cruz’s proposal becomes a concrete policy, the US will certainly be placed in a dangerous situation. If US politicians continue to interfere in the Taiwan question, they will eventually draw fire against themselves. The worst-case scenario could even be a termination of the US-led order in Asia.

And one more example of Beijing threatening war…

China must be and will be reunified – this is Beijing’s persistent position. China has already made it clear that “if anyone dares to split Taiwan from China, the Chinese military has no choice but to fight at all cost for national unity.”

It happened almost a year ago and it’s easy to forget, but Chinese President Xi Jinping opened the year with a belligerent speech about reunification, something the Taiwanese vehemently oppose, but Xi insists will become a reality before his time on the throne ends.

With the pro-democracy movement in Hong Kong ascendant, and the trade war with the US weighing on the Chinese economy, Beijing has seemingly refocused on Taiwan ahead of a critical election.

And the last thing the pro-independence faction needs is a victory in the form of a legislative win in Washington.

Authored by Lance Roberts via RealInvestmentAdvice.com,

On Monday, the markets jumped on more “trade news,” despite there being no real progress made. However, such wasn’t surprising as we discussed in this past weekend’s newsletter:

“Over the last few weeks, we have been discussing the ‘QE, Not QE’ rally. Regardless of what the Fed wishes to call their bond purchases, the market has interpreted the expansion of their balance sheet as a ‘QE’ program. Given that investors have been ‘trained’ by the Fed’s ‘ringing of the bell,’ the subsequent 6-week advance was not surprising.

(I might have missed a couple of ‘trade deal’ headlines but you get the drift.)”

However, this “trade deal” rally was also something we suspected would happen.

“With QE-4 in play, the bias remains to the upside keeping our target of 3300 on the S&P 500 in place. This is particularly the case as we head further into the seasonally strong period combined with an election year cycle.

As shown in the chart below, the breakout to all-time highs was substantial, and regardless of your bias, this was a “bullish” advance and suggests higher prices in the short-term.”

“The correction this past week is likely not yet complete. Our short-term trading indicators are NOT oversold, but it is worth noting they are not as overbought as they were. This suggests the market could certainly muster a post-Thanksgiving rally.

Looking ahead, a subsequent pre-Christmas correction remains likely, particularly as the market drifts between one “trade deal” tweet, to the next. 

For now, we continue to maintain our hedges as all of our indicators are still suggestive of a short-term reversal.”

Yea…I know…“Don’t Fight The Fed.” 

I don’t disagree, and our portfolios remain primarily long exposed despite the short-term hedge we added to reduce the risk of a short-term “reversion.”

Risk Of Correction Remains

In a market that is excessively bullish, and overly complacent, investors are “willfully blind” to the relevant “risks” of excessive equity exposure. The level of bullishness, by many measures, is extremely optimistic. 

Not surprisingly, that extreme level of bullishness has led to some of the lowest levels of volatility and cash allocations in market history.

Of course, these actions must have a supporting narrative. 

Stocks To Be Propelled Higher In 2020: U.S. equity strategist, David Kostin said:

“We expect the current bull market in US equities will continue in 2020. The durable profit cycle and continued economic expansion will lift the S&P 500 index by 5% to 3250 in early 2020.”

The Great Rotation: JP Morgan analyst Nikolaos Panigirtzoglou said:

“Given this year proved to be a strong year for equity markets, helped by institutional investors, then we should see retail investors responding to this year’s equity market strength by turning [into] big buyers of equity funds in 2020. This suggests 2020 could be another strong year for equities driven by retail rather than institutional investors.”

This is an interesting turn of sentiment considering that just a month ago headlines were plastered with “recession” fears. 

Despite the “narrative,” and the “prima facie” evidence you shouldn’t “Fight The Fed,” the current detachment of prices from valuations, and the deviation of price from long-term norms, are concerning. 

CAPE-5 is a modified version of Dr. Robert Shiller’s smoothed 10-year average. By using a 5-year average of CAPE (Cyclically Adjusted Price Earnings) ratio, it becomes more sensitive to market movements. Historically, deviations above +40% have preceded secular bear markets, while deviations exceeding (-40%) preceded secular bull markets.

Also, as I noted in Monday’s missive on “Investing vs Speculation:”

“Regression to the mean is the most powerful law in financial physics: Periods of above-average performance are inevitably followed by below-average returns, and bad times inevitably set the stage for surprisingly good performance.” – Jason Zweig

The chart below is the 3-year average of annual inflation-adjusted returns of the S&P 500 going back to 1900. The power of regression is clearly seen. Historically, when returns have exceeded 10% it was not long before returns fell to 10% below the long-term mean which devastated much of investor’s capital.

Not surprisingly, when the price of the index has deviated significantly from the underlying long-term moving averages, corrections and bear markets have not been too distant.

Combining the above measures (volatility, valuation, and deviation) together shows this a bit more clearly. The chart shows both 2 and 3-standard deviations above the 6-year moving average. The red circles denote periods where valuations, complacency, and 3-standard deviation moves have converged. 

While the media continues to suggest the markets are free from risk, and investors should go ahead and “stick-their-necks-out,” history shows that periods of low volatility, high valuations, and deviations from long-term means has resulted in very poor outcomes.

Lastly, there has been a lot of talk about how markets have entered into a new “secular bull market” period. As I discussed in “Which Secular Bull Market Is It,” I am not sure such is the case. Given the debt, demographic and deflationary backdrop, combined with the massive monetary interventions of global Central Banks, it is entirely conceivable this is more like the 1920-29 advance that led up to the “Great Depression.” 

Regardless, whenever the RSI (relative strength index) on a 3-year basis has risen above 70, it has usually marked the end of the current advance. Currently, at 75, there is little doubt the market has gotten ahead of itself.

No matter how you look at it, the risk to forward returns greatly outweighs the reward presently available.

Revision Of Belief

Importantly, this doesn’t mean that you should “sell everything” and go hide in cash, but it does mean that being aggressively exposed to the financial markets is likely not wise.

It reminds me much of what Nassim Taleb once penned in his 2007 book “The Black Swan.”

“Consider a turkey that is fed every day. Every single feeding will firm up the bird’s belief that it is the general rule of life to be fed every day by friendly members of the human race ‘looking out for its best interests,’ as a politician would say.

On the afternoon of the Wednesday before Thanksgiving, something unexpected will happen to the turkey.

It will incur a revision of belief.”

Such is the market we live in currently.

It has become a “Turkey” market. Unfortunately, like Turkeys, we really have no clue where we are on the current calendar. We only know that today is much like yesterday, and the “bliss” of calm and stable markets have lulled us into extreme complacency.

You can try and fool yourself that weak earnings growth, low interest rates, and high-valuations are somehow are justified. The reality is, like Turkeys, we will ultimately be sadly mistaken and learn a costly lesson.

“Price is what you pay, Value is what you get.” – Warren Buffett

One day after an impressive 2Y auction, that stopped well through the When Issued and saw a huge spike in Direct bidder demand, today’s sale of $41 billion in 5Y notes was more lukewarm.

The auction stopped at a high yield of 1.587%, 0.3bps above the 1.584% When Issued and 1.7bps higher than the October auction yield of 1.570%.

Perhaps the most remarkable aspect of today’s auction was the jump in the Bid to Cover, which rose from 2.41 last month to 2.50, which was the highest going back all the way to July 2018.

Finally, the internals were generally in line, with Directs today taking down a far more modest 13.5%, about half of their activity in yesterday’s 2Y paper, and while above last month’s 11.5%, it was below the 6 auction average. And with Dealers taking down 21.6%, or modestly below the 25.3% six auction average, Indirects were left holding 64.8%, which while well above the recent average of 58.7%, was below last month’s 65.7%, the highest since August 2018.

Altogether this was another solid auction, despite the modest tail, and the stable demand made sure that the 10Y yield continues to trade just over 1 basis point lower on the day, if off the session lows.

Federal prosecutors have reportedly opened a criminal investigation into whether pharmaceutical companies intentionally allowed opioid painkillers to flood communities.

As The Wall Street Journal notes, the feds are employing laws normally used to go after drug dealers, according to people familiar with the matter.

At least six companies have said in regulatory filings that they received grand-jury subpoenas from the U.S. attorney’s office in the Eastern District of New York:

• drugmakers Teva Pharmaceutical Industries Ltd., Mallinckrodt PLC, Johnson & Johnson and Amneal Pharmaceuticals Inc.

• and distributors AmerisourceBergen Corp. and McKesson Corp.

The Wall Street Journal notes that the probe is in its early stages and prosecutors are expected to subpoena additional companies in the coming months, one of the people said. It wasn’t clear if other companies had received subpoenas.

Virtually every state and more than 2,500 city and county governments have filed lawsuits against players up down the opioid supply chain, accusing them of marketing opioid painkillers too aggressively and failing to stop excessive amounts of pills from flooding into communities. Some of the companies are working with attorneys general on a multibillion-dollar settlement to resolve the entirety of the litigation.

Barack Obama has been frustrating the Democratic establishment of late. By refusing to endorse his former VP Joe Biden – who is barely clinging to his lead as the 2020 frontrunner, while at the same time panning progressive candidates such as Elizabeth Warren and Bernie Sanders, the former president appears to be tacitly admitting that the current pool of Democratic candidates – and Biden in particular, is not worth risking his reputation over.

Politico‘s Ryan Lizza sat down with several people in Obama’s orbit, including former Attorney General Eric Holder – who wanted to run for President in 2020 but couldn’t because of Biden.

Last year, Obama let it be widely known that he would not make his preference known or, in the phrase that his close advisers frequently use, “put his thumb on the scale.” It wasn’t just Biden who was disappointed. Holder was particularly wounded that his close friend wasn’t more encouraging of his own ambitions. ”He’s still pretty sensitive about it,” said someone close to Holder. “He was really frustrated about having arrived at the decision not to run. Holder couldn’t get in because Biden and Holder have the same set of people. Once Biden was getting in then Eric couldn’t get in. So that frustrated Holder. It blocked him. And Biden has turned out the way they all feared, and that’s really frustrating to Eric.” –Politico

The seemingly obvious answer as to why Obama won’t endorse Biden is simple; they worked together for eight years, providing ample insight into Biden’s gaffe-prone mental faculties and tone-deaf opinions – not to mention the whole Ukraine thing. Both Biden and Obama have stated that Biden asked Obama not to endorse him until he’d ‘earned’ it.

Instead, the former president has been dispensing advice to all 2020 candidates who seek it, and “sees his role as providing guardrails to keep the process from getting too ugly and to unite the party when the nominee is clear,” according to the report.

That said, while Obama has been incredibly careful not to speak ill of Biden – he did take a jab at his former VP, suggesting that when it comes to having an ‘intimate bond with the electorate’ (especially in Iowa), Biden ‘really doesn’t have it.’:

With several lesser-known candidates, according to people who have talked to him or been briefed on his meetings, he was blunt about the challenges of breaking out of a large field. His advice is not always heeded. He told Patrick earlier this year that it was likely “too late” for him to secure “money and talent” if he jumped in the race. Occasionally, he can be cutting. With one candidate, he pointed out that during his own 2008 campaign, he had an intimate bond with the electorate, especially in Iowa, that he no longer has. Then he added, “And you know who really doesn’t have it? Joe Biden.” –Politico

More takeaways from Politico:

•  Biden’s camp has been frustrated with Obama’s silence over Ukraine

One person who is very close to both Obama and Biden said the only time the Biden campaign has been disappointed in Obama is over Trump’s Ukraine scandal. “I don’t think anybody in the Biden world challenges Obama’s affection for Biden, or challenges his strategy of not weighing in for anybody,” this person said. ”I do think there’s frustration when Joe Biden and Hunter Biden get attacked by Republicans on the Ukrainian thing and they say, ’Obama and his administration looked the other way back when this was happening,’ and Obama doesn’t say anything. The Biden people ask, ‘Why won’t Obama say something?’”

• If Obama saw Bernie Sanders as a serious threat, he would actively campaign against him.

Obama said privately that if Bernie were running away with the nomination, Obama would speak up to stop him. (Asked about that, a spokesperson for Obama pointed out that Obama recently said he would support and campaign for whoever the Democratic nominee is.)

• Obama offers candidates three big points: “Don’t run if you don’t think you are the best person to be president; make sure you understand the toll a campaign will take on your family; and ask yourself, “Can you win?””

As he put it recently at a donor event in Washington, “Not are you guaranteed a win, but do you have a theory, a pathway whereby you win not just a primary but you also win a general election, because there is not an empty exercise if you, in fact, get in. Your goal should be to actually ultimately become the president and then be able to lead the country and the world in a serious way.”

• Obama planned to focus on setting up his foundation, writing a memoir and dealing with global issues, but feels dragged back in by Trump’s 2016 win.

But the original plan of a relaxed post-presidency of writing and thinking and mentoring, one that was relatively unencumbered by partisan politics, was blown up by the twin surprises of Trump’s victory and Biden’s decision to challenge him in 2020. Instead of remaining above the fray, Obama was forced back into the center of politics by Trump and Biden, who, for opposite reasons, talk about him and his legacy at every opportunity.

“In a perfect world, he would have retreated to a greater degree from public life than he has, much in the same way that I think George W. Bush did in his post-presidency,” Holder told me. “He would have liked to have been, though he’s too young, an elder statesman.”