American farmers have some of the most corn acres left to plant, last week, than any other date on record, reported the Crop Progress Report -written by the United States Department of Agriculture (USDA).
The USDA warned corn planting is currently at 49% complete, behind the 80% five-year average.
Corn emerged from the ground 19% vs. 10% last week, 47% a year ago
Soybeans planted 19% vs. 9% last week and 53% a year ago
Soybeans emerged 5% vs. 24% a year ago
Spring wheat planted 70% vs. 45% last week, and 76% a year ago
Spring wheat emerged 26% vs. 10% last week and 34% a year ago
Cotton planted 44% vs. 26% last week and 50% a year ago
Winter wheat 66% g/e vs. 64% last week, and 36% a year ago
Kansas 60% g/e vs. 56% a week ago
As of last weekend, Iowa farmers had 70% of their corn planted versus the 89% five-year average. Illinois farmers had 24% of their corn planted versus the 89% five-year average. Indiana farmers had 14% planted versus the 73% five-year average. In the western Corn Belt, farmers had 70% of their corn planted versus the 86% five-year average.
“Disastrous weather conditions have led to an anomalous amount of corn yet to be planted across the United States. After 10-20 inches of rainfall since the beginning of April, field are wet and even flooded in parts of the corn belt. This has prevented farmers from planting corn this Spring, forcing a decision between planting into June (very late for healthy corn), switching their planting to soybeans, or taking prevent plant insurance to cover portions of their crop losses. With the trade war ongoing and impacting price, switching to soybeans is not as attractive as it would be in a typical planting year, putting farmers in a precarious situation, having to choose between the choices discussed above. Heading into June, the weather may become a bit more favorable, but wet risks still exist across the US Ag Belt, adding more frustration to an already frustrated ag sector,” said Meteorologist and owner of Empire Weather LLC., Ed Vallee.
Corn futures moved up 2.33% in 69 hours since the report was published, hitting levels not seen last May when the trade war escalation crashed the commodity 20% in 33 days.
Corn future markets gave “[exploded] higher as of late based off late planting figures,” said Jason Rotman, president of Lido Isle Advisors.
“The market is very short these markets so don’t be surprised to see continued rallies in wheat and corn,” he said, adding that “there is still a big surplus of soybeans.”
Sal Gilbertie, president and chief investment officer at Teucrium Trading, said: “Too much rain in all the wrong places, both over the weekend and in the current forecasts, have traders concerned about late planting for corn and potentially poor wheat quality.”
— Ed Vallee | Empire Weather LLC (@EdValleeWx) May 21, 2019
A perfect storm is developing across the Midwest: farmers are having difficulty planting corn because the weather is too wet. So the alternative is soybean, but because of the trade war, the grain’s export to China has been cut off, which means oversupply conditions will remain. On top of that, if farmers want to collect a government farm bailout, they will need to plant soybean, again, will lead to oversupply conditions.
via ZeroHedge News http://bit.ly/2wjqEul Tyler Durden
So much for the border crisis being a charade – Gov. Grisham went to the Swamp to beg for help.
The radical-leftist governor of New Mexico, who sent National Guard troops packing in February, needs federal help now, it seems. She’s in the Swamp to beg for funding as illegal immigrants overwhelm the state. After months of neglecting the border cities and towns, toeing the DC elite party line of no “crisis” here, and facing a veritable citizens’ revolt in the Land of Enchantment, Governor Michelle Lujan Grisham is demanding federal government assistance for the dire situation – one she exacerbated through indifference to constituents.
Michelle Lujan Grisham
And it comes on the heels of yet another county drawing a line in the sand and refusing any further influx of illegal immigrants seeking asylum. Sierra County, boasting a population 11,116 and a 21% poverty rate, joined Otero and Lincoln counties in passing resolutions opposing the relocation of migrants to their communities.
This isn’t just happening in these three counties, either – it’s an untenable and cruel situation being thrust on an impoverished state by government officials who seem to be mere puppets for the Democratic Party.
According to Deming City Administrator Aaron Sera, in Luna County, buses unload between 300 and 500 immigrants each day. As a town of a 14,183, it has been mercilessly overwhelmed by the governor’s dangerous game of partisan politics. Even larger enclaves, such as Las Cruces, have been overrun with illegal aliens, completely depleting community and local government resources as they’re forced to house and care for 6,000 asylum seekers – and all in a matter of four short weeks.
Drawing An Uncrossable Line
Otero County Commission Chairman Couy Griffin is a vocal detractor of what he believes are dangerous decisions coming from Grisham. Griffin is an advocate of legal immigration and stands firm in the belief that sheltering illegals sends the wrong message to other Central Americans, who see an opportunity to enter the United States illegally. “If you begin to feed pigeons in the parking lot, pretty soon you have every pigeon in town,” Griffin said. He has asked President Trump to close the border after resources were removed from a local, heavily trafficked checkpoint.
Tripp Stelnicki, the governor’s spokesman, claims there is no evidence humanitarian aid would encourage other Guatemalans, El Salvadorans, or Hondurans to make the trek north. Well, it isn’t much of a deterrent, either.
The Watershed Decision
In February, Grisham made national news for thumbing her nose at the president, her citizens, and national security when she sent the National Guard packing. She blithely stated: “New Mexico will not take part in the president’s charade of border fear-mongering,” and received a blast of positive kudos from Democrat toadies in the Swamp. It fit their narrative perfectly and from a border state to boot.
But three short months later, after recall and impeachment petitions, shameful national news coverage of cities and towns overwhelmed by the “charade,” and 31 of 33 counties expressing their disdain for Grisham through resolutions, the governor is now asking President Trump and the Department of Homeland Security for their help.
“The governor wants to continue to urge the federal government to increase its personnel on the border as a means of improving the logistical and communications output,” said spokesman Tripp Stelnicki, whose head must be spinning like a top after Grisham’s desperate about face. He also hinted that the events in Otero County may be spiking fear in Grisham as other municipalities and counties are jumping on Griffin’s bandwagon. And frankly, no one is buying what Grisham is selling anymore.
Steve Pearce, Chairman of the New Mexico Republican Party, who ran against Grisham in 2018 for the role of governor, reminded:
“She declares there’s no crisis. She removes the National Guard and now she’s there asking for money. Everything in her actions indicate that she believes there’s a crisis, but yet she will not dedicate the resources or request to her colleagues in Congress to start passing the laws that will change the situation there.”
The Trump administration will ensure that resources for the state are granted but it won’t come for free – there will a pound of flesh extracted from the foolish New Mexico governor to be spiked and paraded through the 2020 election. Perhaps after a disastrous first quarter in office, Grisham will begin to listen to her constituents. But it’s doubtful – which is why a recall or impeachment is still being pursued by citizens. What should terrify the governor is this highly motivated electorate, bent on removing her from office – and that describes the uprising in the Land of Enchantment to a “T.”
via ZeroHedge News http://bit.ly/30MIeFa Tyler Durden
Tehran and Washington haven’t had formal diplomatic relations since the Iranian Islamic Revolution deposed the Shah back in 1980. And according to one senior official with the Islamic Revolutionary Guard Corps., there’s good reason for that.
Negotiating with the US, said IRGC Rear Admiral Ali Fadavi, is like “negotiating with the devil,” and negotiating with the devil, as the Quran says, “bears no fruit.” Fadavi was quoted by Iran’s Fars News agency during a discussion of the longstanding rupture in diplomatic relations between the two countries. Last month, President Trump designated the IRGC a “foreign terrorist organization.”
Fadavi went on to denounce the growing American military presence in the region as the “weakest in its history,” and added that the influence of Iran’s regional arch-rival Saudi Arabia was “the weakest in its history,” according to RT.
Because of unspecified “credible” threats involving Iran, the Pentagon has been steadily expanding its military presence in the region. The USS Abraham Lincoln carrier strike group, stationed near the Persian Gulf, was recently joined by three guided-missile destroyers. A B-52 bomber squadron is on alert at a base in nearby Qatar, and Trump has reportedly signed off on a plan to send another 1,500 troops to the region to reinforce the American presence in Iraq, as well as a dozen fighter jets and a drone fleet.
Washington has claimed that its latest show of force has helped stave off the Iranian threat and deterred attacks, according to Acting Defense Secretary Patrick Shanahan.
But as long as Iran is threatening to start stockpiling enriched uranium again, it’s unlikely Washington will back down. Europe, Russia and China have tried to mediate the conflict, but with both sides growing ever-more-belligerent, the prospect of a full-on military conflict looms larger by the day.
via ZeroHedge News http://bit.ly/2JI5Kh1 Tyler Durden
I’ve been making arguments for months that Donald Trump’s trade war with China is the height of stupidity. While Trump has the power to do what he’s been doing – sanctioning actors and applying tariffs – some power is best left not used.
The simple fact is that America is uncompetitive. This is at a deep and structural level. It’s at an education level. And this is something Trump’s trade team and his adherents refuse to admit.
When it comes to manufacturing and assembly, U.S. workers are not worth the money they are paid. Period.
And China has an abundance of skilled labor unseen elsewhere, says Cook:
“The products we do require really advanced tooling, and the precision that you have to have, the tooling and working with the materials that we do are state of the art. And the tooling skill is very deep here. In the US you could have a meeting of tooling engineers and I’m not sure we could fill the room. In China you could fill multiple football fields.”
Cook credits China’s vast supply of highly skilled vocational talent:
“The vocational expertise is very very deep here, and I give the education system a lot of credit for continuing to push on that even when others were de-emphasizing vocational. Now I think many countries in the world have woke up and said this is a key thing and we’ve got to correct that. China called that right from the beginning.”
Is this Tim Cook talking or Mike Rowe?
Rowe argues all the time that “we don’t value work, anymore.” VoTech schools struggle. Thousands of solid, honest jobs go unfilled. Kids are sold on the idea of college as the only path to a good job and a stable future.
And that is simply not true. The reason it is no longer true is because of the simple adage of Ron Paul’s, “When you subsidize something, you get more of it.”
We have diverted so much money and capital to education that we have cheapened its value in the labor market while encouraging two generations of kids to go heavily into debt to chase some dream of fame or fortune that had an ever-shrinking probability of ever coming true.
$100,000 for a Women’s Studies degree will not train you to run a production line. It won’t get your air-conditioner fixed. And it won’t prepare you to take responsibility for your wasted time and energy.
We hear this all the time. “Job Openings are at record levels” and they are according to the BLS.
But the flip side is that wage growth has been stagnant. And it is only just now approaching something close to sustainable. This speaks to a labor market completely out of phase with the needs of the society. You can laud Trump for fixing some of this, certainly, but it’s not going to fix the underlying structural problem of malinvestment.
This is not China’s fault. This is our fault. It’s our fault for diverting trillions upon trillions to uneconomic and wasteful projects and staggering amounts of bureaucracy to administer them over the past two generations.
It’s our fault that a cultural malaise of self-indulgence begun by the Baby Boomers has had the downstream effects of growing nihilism among their children and grandchildren who face a lifetime of debt slavery and poor mate-choice selections.
It’s our fault that we fueled an empire with cheap debt and cheaper attitudes towards life and are now angry that many Americans don’t have a viable future as the wealth of the nation was sucked up into the ruling class and its quislings.
Don’t worry, China’s headed down the same road we are on, they just are just getting hitting the on-ramp while we’re heading for the unfinished overpass.
But blaming China for this loss of expertise in things we used to be great at is the wrong approach to solving the underlying problem. We have to address the way money flows through this society. We have to admit that central planning doesn’t work.
I laugh when I hear commenters on my YouTube videos or on Zerohedge in response to my articles complain about the ‘dirty ChiComs stealing our tech’ and all the rest of the insanely stupid, xenophobic talking points spoon-fed to these oh-so-original thinkers by the very banksters and oligarchs they think they’re fighting.
They are no better than the special snowflakes on the left screaming about ‘white privilege’ and ‘the patriarchy.’ It’s all just a reflection of a society unwilling to look itself in the mirror and realize that we’ve met the enemy and he is us.
All things come in cycles. We grew so rich rebuilding the world after World War II that we thought we could have not only guns and butter but that we were entitled to it because we were the instrument of goodness in a blighted planet.
I get what animates Trump to do what he’s doing. But it’s not going to work.
You can’t take back by force that which was freely given away. You have to work for it. You have to earn it. It doesn’t matter if you were screwed over by your government and employer. That’s not China’s fault.
China’s earned its wealth. Has some of that money that came in over the past thirty years been malinvested? Absolutely.
But listen to Tim Cook and listen hard. Most of its hasn’t. All I ever hear about is the ghost cities and the highways to nowhere. The trillions in shadow banking debt and the imminent (since 2012, btw) housing collapse.
And yet, that is all simply projection for the crumbling infrastructure, hollowed out rural towns, and yawning funding deficits that all this debt created here at home.
If you want to fix America. Fix America. But don’t punish the Chinese while we’re at it. To fix America will require access to that market in a web of mutually beneficial trade with them not shutting us out of it.
Tim Cook understands this. Trump’s rampage against China will hurt Apple in ways that won’t be reversible. If you think Trump will stop with his blacklisting Huawei you aren’t paying attention.
And no matter what happens, he won’t pay the price. We will. Because for all of the money we over-invested in education the one thing we didn’t do was teach the basics of economics, knock-on effects and the opportunity costs of putting faith in the hands of the most venal people on the planet, politicians.
It looks as though everybody, including the media, is starting to understand that Elon Musk’s once grandiose “Hyperloop” idea, to be built by The Boring Company, isn’t the futuristic game changer that it was pitched as. In fact, it’s looking more and more like a very rudimentary idea that’s been around for decades: a car in a tunnel.
And people are catching on that this is not what Musk repeatedly talked about when baffling the public with bullshit publicly describing the idea of a Hyperloop. Over the weekend, the author of a new article for Jalopnik about the Hyperloop couldn’t help but simply refer to it as “a scam” on Twitter.
Indeed, 6 months ago the world laughed heartily in unison when the idea of mass transit via electrified skates for frictionless movement was instead substituted by a Tesla Model X bumping its way through an underground tunnel like an amusement park ride at about 50 miles an hour.
Back then, Musk claimed that the bumpiness was only temporary: “That bumpiness will definitely not be there down the road—it will be smooth as glass.”
And a new video on The Boring Company’s Twitter account does seem to show that the track has been paved. It shows a vehicle purportedly traveling at 127 miles an hour through a single file tunnel, ostensibly beating out traffic and ushering in a new era of transportation – right?
— The Boring Company (@boringcompany) May 24, 2019
Wrong. That one video hasn’t stopped people from noticing that the vision of a network of underground futuristic tunnels has simply turned into one small paved tunnel that can fit one car at a time. And of course it beats traffic above ground: the car has the right of way, the whole way, and there’s no wait to use the tunnel and no traffic underground.
And now that the company has signed a $48.6 million contract to build a “people mover” – whatever the hell that means – through Las Vegas, others are noticing that the vision of the Hyperloop idea, seen here in this graphic…
…is likely going to be very different from the reality: cars, doing regular car things, underground.
And why the switch, according to Elon Musk? It’s “simple and it just works,” he said on his Twitter.
And how bad can your futuristic green energy project be when the liberals over at the San Francisco BART Twitter account are trolling you?
We carry 28,000 people per hour through our Transbay Tube under the bay because of the capacity of a train. That’s nearly twice as much as cars over the bay. Why wouldn’t you prioritize something that carries far more (and safely with automatic train control) over cars? https://t.co/2Hu3uzu2ND
Sorry no weekend video this weekend, instead I just wanted to offer some commentary on some of the macro charts I recently posted on twitter. The larger message of all of these charts: Intervention is ultimately coming be it in the form of rate cuts and/or QE. It’s just a matter of the how and the when. Intervention is needed as the macro wheels are turning. Like it or not intervention remains the lifeblood of these markets, they just can’t do without and every bull case in the past 10 years has remained entirely dependent on it.
To perhaps most succinctly summarize the state of markets:
Support of equities and remaining in control so far: The Fed, buybacks and political jawboning.
Going against equities: Macro reality.
Upside triggers this year: Potential miracle saves in form of a China deal and somehow a Brexit deal by the end of October perhaps with new political leadership.
Potential downside triggers this year: The weight of the emerging macro picture wrestling control away from the forces of intervention.
And this macro reality is painting a consistent picture across the board and I’m just highlighting a few of these:
Durable goods year over year:
No expansion, regressive growth similar to the lead up to the 2008 recession.
Median sales prices of homes sold year over year:
It’s the 3rd largest reversion to negative since 1970, the previous 2 examples of this magnitude coincided with recessions.
Real retail sales growth year over year:
Anemic and regressive, there’s no evidence of expanding growth, rather it’s flirting with negative territory.
Blame the $AMZN factor all you want, but note the above data also correlates with jobs in the retail trade:
It’s also flirting with recessionary precedent.
Real gross private investment year over year:
There’s zero evidence that tax cuts have supported any investment growth at all. It remains weak and shows no expansion. We all know where the tax cut money went: Buybacks.
So consumers are not expanding their sales activities and businesses are not expanding their investments.
But unemployment is so low, isn’t that great?
Yes it is at the moment, but it’s always great at the end of a cycle. The problem with the lowest unemployment rate in 50 years is that there is no history that suggests it can last for an extended period of time. If you’re lucky maybe a year or 2, maybe, if you’re very lucky.
Cycles end, that’s a fact of life. Also a fact: 99.9% of time unemployment is higher than the current data point which means the next big move in the data is up not down.
And where exactly is the great expansion in employment growth? Considering all the supposed tax cuts and ‘greatest economy ever’ it all looks rather muted and stalled:
Where is the net employment growth to come from? It’s not from demographics, in fact demographics are a ticking time bomb:
Not only has the growth rate been declining for years it’s dropped to negative. Without population growth the entire growth curve is running into trouble. You think it’s an accident that real growth has continued to decline for decades from cycle to cycle?
No, it’s no accident. Demographics are the big thing driving it all. Scream curbing immigration all you want, but the fact is fertility rates are dropping hard. 2018 saw the lowest birth rate in 32 years. Blame technology, blame economics and housing prices, blame whatever, but the fact is birth rates are declining, working population growth has been declining and is now negative. Best of luck financing entitlements, pensions, social security, the whole works.
You know what this all means. You do, because you’ve already seen the impact of these long term trends. In order to keep the growth illusion alive ever more debt has to be taken on to sustain it all. Hence you have this:
Ever higher debt to GDP and again expanding deficits which will balloon much higher when the next cycle turns in earnest.
Slowing growth, expanding deficits, regressive population growth models, vast debt expansion and it’s reflected in the data everywhere:
The world has run into a growth wall with no central bank having been able to normalize policy. It’s an epic historic failure the consequences of which will come to bear on the world in the years to come.
How to handle the next economic crisis? Frankly I don’t think anybody knows and nobody wants to see it happening on their watch, hence all the desperate efforts to extend the cycle with easy money.
And all of this is happening with rates still a historic low. And when I say historic, here’s a broader context of the absurdity of it all:
There is ZERO evidence that any of these markets can sustain themselves on an upward trajectory without intervention. And this too we already know, because we’ve seen it time and time again:
General aside comment on the chart above: If price can stay above the middle trend line, bulls should be ok for now, see a sustained close below it: Watch out.
But now we are at the end of a long cycle and they’ve done their best to re-inflate asset prices following the December correction.
Yet the data sets above are overtly flirting with recessionary territory.
And so are some of the yield curves:
And markets so far this year: New highs in select indices on negative divergences with a MACD cross-over looking to fail into month end (unless we see a big mark-up rally) coinciding with a rejection of the 2009 trend line, while the 10 year is dropping despite new highs with unemployment at a cycle low:
Why does it matter? Because that too happens at the end of each cycle:
Relative to the January 2018 highs most market indices remain weak:
And recent highs on $SPX and $NDX have masked the pronounced weakness in equal weight:
What we’re witnessing now is a battle for control of price. Remember: Supportive of equites: The Fed, buybacks and political jawboning. And these forces all want equities higher, because they need them higher.
And hence perhaps it’s no accident that $SPX once again closed the week right at the monthly 5 EMA a key pivot of support, but also note the the monthly bearish engulfing candle.
Close May above the monthly 5EMA and the June/July seasonality window may once again drift markets higher and fill some of the open gaps above.
Close May below the monthly 5EMA, or worse, below 2800 on $SPX and more weakness may unfold that could set off technical patterns with much further downside to come, i,e. the 0.5 fib, the implied technical target of this potential pattern:
Such a move would represent macro reality asserting control. But, by that time, be assured that the screams for intervention would be deafening.
Bottomline: The macro data is stating clearly the slowdown did not end in Q1. It has extended into Q2. GDP looks to have a 1% handle. Without a China deal uncertainty will remain, given the negativity surrounding such a deal a positive resolution would trigger a massive rally, without such a deal equity prices may have to contend with further downside if certain levels break to the downside. But China deal or not and with apologies to Tina Turner: The larger macro wheels are turning, markets keep on burning, and before you know it they’re rolling, rolling toward the next round of intervention.
* * *
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via ZeroHedge News http://bit.ly/2whPwmc Tyler Durden
Along with the cookouts and beautiful Memorial Day Weekend weather, President Trump offered plenty of distractions for any Americans still tuned into their news feeds – from photos of his golf outing with Shinzo Abe to his presentation of the ‘first-ever’ US President’s Cup.
Tonight in Tokyo, Japan at the Ryōgoku Kokugikan Stadium, it was my great honor to present the first-ever U.S. President’s Cup to Sumo Grand Champion Asanoyama. Congratulations! A great time had by all, thank you @AbeShinzo!! pic.twitter.com/nwwxJl6KXH
Meanwhile, in China, President Xi was busy exhorting the rest of the world (presumably excluding the US) to cooperate with Beijing in developing new Internet, big data and artificial intelligence resources in a letter to the China International Big Data Industry Expo, which kicked off Sunday in the southwestern city of Guiyang, according to state-run business newswire Xinhua.
Beijing has an obvious use-case for improved big-data resources: Optimizing its growing surveillance apparatus. And with the White House reportedly mulling Huawei-style bans on companies involved in building said apparatus, it’s unsurprising that Beijing is already casting about for international support.
Chinese tech and Internet giants dominated the big data expo, which drew some 26,000 representatives from nearly 55 countries to marvel at China’s emerging leadership in the big data industry. Huawei, Tencent, Alibaba and other Chinese firms were heavily represented.
China also used the opportunity to denounce Washington’s blacklisting of Huawei.
The Huawei ban is a “rough” disruption to the market, Wang Zhijun, vice head of the Ministry of Industry and Information Technology, said in an interview on state broadcaster China Central Television. He urged the U.S. government to stop “unreasonable suppression” of China’s integrated circuit and electronic companies.
While Trump and Abe were on their golf outing, Global Times Editor-in-Chief Hu Xijin trolled Abe on Twitter.
President Trump’s Japan visit lasts 4 days. The special attention Washington attaches to Tokyo is largely a result of tense China-US ties. Japan should make more requests of Trump. Don’t be afraid of him. Trump will take efforts now to maintain stability of US-Japan alliance.😀
Bottom line: As Washington steps up its aggressive trade rhetoric, Beijing is stepping up its efforts to recruit more geopolitical allies to free itself of its reliance on American tech – while reminding the world that it can create serious disruptions in the global supply chain with very little effort.
via ZeroHedge News http://bit.ly/2HCNTG7 Tyler Durden
After posting a video of a young recruit talking to the camera about how service allows him to better himself “as a man and a warrior”, the US Army tweeted, “How has serving impacted you?”
As of this writing, the post has over 9,600 responses. Most of them are heartbreaking.
“My daughter was raped while in the army,” said one responder. “They took her to the hospital where an all male staff tried to convince her to give the guy a break because it would ruin his life. She persisted. Wouldn’t back down. Did a tour in Iraq. Now suffers from PTSD.”
“I’ve had the same nightmare almost every night for the past 15 years,”said another.
Tweet after tweet after tweet, people used the opportunity that the Army had inadvertently given them to describe how they or their loved one had been chewed up and spit out by a war machine that never cared about them.
This article exists solely to document a few of the things that have been posted in that space, partly to help spread public awareness and partly in case the thread gets deleted in the interests of “national security”. Here’s a sampling in no particular order:
“Someone I loved joined right out of high school even though I begged him not to. Few months after his deployment ended, we reconnected. One night, he told me he loved me and then shot himself in the head. If you’re gonna prey on kids for imperialism, at least treat their PTSD.”
~
“After I came back from overseas I couldn’t go into large crowds without a few beers in me. I have nerve damage in my right ear that since I didn’t want to look weak after I came back I lied to the VA rep. My dad was exposed to agent orange which destroyed his lungs, heart, liver and pancreas and eventually killing him five years ago. He was 49, exposed at a post not Vietnam, and will never meet my daughter my nephew. I still drink to much and I crowds are ok most days but I have to grocery shop at night and can’t work days because there is to many ppl.”
~
“The dad of my best friend when I was in high school had served in the army. He struggled with untreated PTSD & severe depression for 30 years, never told his family. Christmas eve of 2010, he went to their shed to grab the presents & shot himself in the head. That was the first funeral I attended where I was actually told the cause of death & the reasons surrounding it. I went home from the service, did some asking around, & found that most of the funerals I’ve attended before have been caused by untreated health issues from serving.”
~
“My dad was drafted into war and was exposed to agent orange. I was born w multiple physical/neurological disabilities that are linked back to that chemical. And my dad became an alcoholic with ptsd and a side of bipolar disorder.”
~
“i met this guy named christian who served in iraq. he was cool, had his own place with a pole in the living room. always had lit parties. my best friend at the time started dating him so we spent a weekend at his crib. after a party, 6am, he took out his laptop. he started showing us some pics of his time in the army. pics with a bunch of dudes. smiling, laughing. it was cool. i was drunk and didn’t care. he started showing us pics of some little kids. after a while, his eyes went completely fucking dark. i was like man, dude’s high af. he very calmly explained to us that all of those kids were dead ‘but that’s what war was. dead kids and nothing to show for it but a military discount’. christian killed himself 2 months later.”
~
“I didn’t serve but my dad did. In Vietnam. It eventually killed him, slowly, over a couple of decades. When the doctors were trying to put in a pacemaker to maybe extend his life a couple of years, his organs were so fucked from the Agent Orange, they disintegrated to the touch. He died when I was ten. He never saw me graduate high school. He never saw me get my first job or buy my first car. He wasn’t there. But hey! Y’all finally paid out 30k after another vet took the VA to the Supreme Court, so. You know. It was cool for him.”
~
“Chronic pain with a 0% disability rating (despite medical discharge) so no benefits, and anger issues that I cope with by picking fistfights with strangers.”
~
“My parents both served in the US Army and what they got was PTSD for both of them along with anxiety issues. Whenever we go out in public and sit down somewhere my dad has to have his back up against the wall just to feel a measure of comfort that no one is going to sneak up on him and kill him and and walking up behind either of them without announcing that you’re there is most likely going to either get you punch in the face or choked out.”
~
“Many of my friends served. All are on heavy antidepressant/anxiety meds, can’t make it through 4th of July or NYE, and have all dealt with heavy substance abuse problems before and after discharge. And that’s on top of one crippled left hand, crushed vertebra, and GSWs.”
~
“Left my talented and young brother a broken and disabled man who barely leaves the house. Left my mother hypervigilant & terrified due to the amount of sexual assault & rape covered up and looked over by COs. Friend joined right out if HS, bullet left him paralyzed neck down.”
~
“My cousin went to war twice and came back with a drug addiction that killed him. My other cousin could never get paid on time and when he left they tried to withhold his pay.”
~
“It’s given me a fractured spine, TBI, combat PTSD, burn pit exposure, and a broken body with no hope of getting better. Not even medically retired for a fractured spine. WTF.”
~
“Y’all killed my father by failing to provide proper treatments after multiple tours.”
~
“Everyone I know got free PTSD and chemical exposure and a long engagement in their efforts to have the US pay up for college tuition. Several lives ruined. No one came out better. Thank god my recruiter got a DUI on his way to get me or I would be dead or worse right now.”
~
“I have ptsd and still wake up crying at night. Also have a messed up leg that I probably will have to deal with the rest of my life. Depression. Anger issues.”
~
“My grandfather came back from Vietnam with severe PTSD, tried to drown it in alcohol, beat my father so badly and so often he still flinches when touched 50 years later. And I grew up with an emotionally scarred father with PTSD issues of his own because of it. Good times.”
~
“Hmmm. Let’s see. I lost friends, have 38 inches of scars, PTSD and a janky arm and hand that don’t work.”
~
“my grandpa served in vietnam from when he was 18–25. he’s 70 now and every night he still has nightmares where he stands up tugging at the curtains or banging on the walls screaming at the top of his lungs for someone to help him. he refuses to talk about his time and when you mention anything about the war to him his face goes white and he has a panic attack. he cries almost every day and night and had to spend 10 years in a psychiatric facility for suicidal ideations from what he saw there.”
~
“My best friend joined the Army straight out of high school because his family was poor & he wanted a college education. He served his time & then some. Just as he was ready to retire he was sent to Iraq. You guys sent him back in a box. It destroyed his children.”
~
“Well, my father got deployed to Iraq and came back a completely different person. Couldn’t even work the same job he had been working 20 years before that because of his anxiety and PTSD. He had nightmares, got easily violent and has terrible depression. But the army just handed him pills, now he is 100% disabled and is on a shit ton of medication. He has nightmares every night, paces the house barely sleeping, checking every room just to make sure everyone’s safe. He’s had multiple friends commit suicide.”
~
“Father’s a disabled Vietnam veteran who came home with severe PTSD and raging alcoholism. VA has continuously ignored him throughout the years and his medical needs and he receives very little compensation for all he’s gone through. Thanks so much!!”
~
“I was #USNavy, my husband was #USArmy, he served in Bosnia and Iraq and that nice, shy, funny guy was gone, replaced with a withdrawn, angry man…he committed suicide a few years later…when I’m thanked for my service, I just nod.”
~
“I’m permanently disabled because I trained through severe pain after being rejected from the clinic for ‘malingering.’ Turns out my pelvis was cracked and I ended up having to have hip surgery when I was 20 years old.”
~
“My brother went into the Army a fairly normal person, became a Ranger (Ft. Ord) & came out a sociopath. He spent the 1st 3 wks home in his room in the dark, only coming out at night when he thought we were asleep. He started doing crazy stuff. Haven’t seen him since 1993.”
~
“Recently attended the funeral for a west point grad with a 4yr old and a 7yr old daughter because he blew his face off to escape his ptsd but thats nothing new.”
~
“I don’t know anyone in my family who doesn’t suffer from ptsd due to serving. One is signed off sick due to it & thinks violence is ok. Another (navy) turned into a psycho & thought domestic violence was the answer to his wife disobeying his orders.”
~
“My dad served during vietnam, but after losing close friends and witnessing the killing of innocents by the U.S., he refused to redeploy. He has suffered from PTSD ever since. The bravest thing he did in the army was refuse to fight any longer, and I’m so proud of him for that.”
~
“My best friend from high school was denied his mental health treatment and forced to return to a third tour in Iraq, despite having such deep trauma that he could barely function. He took a handful of sleeping pills and shot himself in the head two weeks before deploying.”
~
“Bad back, hips, and knees. Lack of trust, especially when coming forward about sexual harassment. Detachment, out of fear of losing friends. Missed birthdays, weddings, graduations, and funerals. I get a special license plate tho.”
~
“My son died 10 months ago. He did 3 overseas tours. He came back with severe mental illness.”
~
“I’m still in and I’m in constant pain and they recommended a spinal fusion when I was 19. Y’all also won’t update my ERB so I can’t use the education benefits I messed myself up for.”
~
“My dad served two tours in middle east and his personality changes have affected my family forever. VA ‘counseling’ has a session limit and doesn’t send you to actual psychologists. Military service creates a mental health epidemic it is then woefully unequipped to deal with.”
~
“My best childhood friend lost his mind after his time in the marines and now he lives in a closet in his mons house and can barely hold a conversation with anyone. He only smokes weed and drinks cough syrup that he steals since he can’t hold a job.”
~
“After coming back from Afghanistan…..Matter fact I don’t even want to talk about it. Just knw that my PTSD, bad back, headaches, chronic pain, knee pain, and other things wishes I would have NEVER signed that contract. It was NOT worth the pain I’ll endure for the rest of life.”
~
“My cousin served and came back only to be diagnosed with schizophrenia and ptsd. There were nights that he would lock himself in the bathroom and stay in the corner because he saw bodies in the bathtub. While driving down the highway, he had another episode and drove himself into a cement barrier, engulfing his Jeep in flames and burning alive. My father served as well and would never once speak of what he witnessed and had to do. He said it’s not something that any one person should ever be proud of.”
~
“I was sexually assaulted by a service member at 17 when I visited my sister on her base, then again at 18. My friend got hooked on k2 and died after the va turned him away for mental health help. Another friend serving was exploited sexually by her co and she was blamed for it.”
~
“I spent ten years in the military. I worked 15 hour days to make sure my troops were taken care of. In return for my hard work I was rewarded with three military members raping me. I was never promoted to a rank that made a difference. And I have an attempt at suicide. Fuck you!”
~
“I actually didn’t get around to serving because I was sexually assaulted by three of my classmates during a military academy prep program. They went to the academies and are still active duty officers. I flamed out of the program and have PTSD.”
~
“My father’s successful military career taught him that he’s allowed to use violence to make people do what he wants because America gave him that power.”
~
“While I was busy framing ‘soliders and families first’ (lol) propaganda posters, my best friend went to ‘Iraqistan’ but he didn’t come back. He returned alive, to be sure, but he was no longer the fun, carefree, upbeat person he’d previously been.”
~
“My husband is a paraplegic and can’t control 3/4 of his body now. Me, I’ve got PTSD, an anxiety disorder, two messed up knees, depression, a bad back, tinnitus, and chronic insomnia. I wish both had never served.”
~
“This is one of the most heartbreaking threads I’ve ever read.”
~
“I am so sorry. The way we fail our service members hurts my heart. My grandfather served in the Korean War and had nightmares until his death at 91 years old. We must do better.”
~
“My Army story is that when I was in high school, recruiters were there ALL the time- at lunch, clubs, etc.- targeting the poor kids at school. I didn’t understand it until now. You chew people who have nothing at home up and spit them out.”
~
“I was thinking about enlisting until I saw this thread. Hard pass.”
~
“I hope to god that the Army has enough guts to read these and realize how badly our servicepeople are being treated. Thank you and god bless you to all of you in this thread, and your loved ones who are suffering too.”
Everyone has my unconditional permission to republish or use any part of this work (or anything else I’ve written) in any way they like free of charge. My work is entirely reader-supported, so if you enjoyed this piece please consider sharing it around, liking me onFacebook, following my antics onTwitter, throwing some money into my hat on Patreon orPaypal, purchasing some of my sweet merchandise, buying my new book Rogue Nation: Psychonautical Adventures With Caitlin Johnstone, or my previous book Woke: A Field Guide for Utopia Preppers. The best way to get around the internet censors and make sure you see the stuff I publish is to subscribe to the mailing list for my website, which will get you an email notification for everything I publish. For more info on who I am, where I stand, and what I’m trying to do with this platform, click here.
After few week lull in Gen. Khalifa Haftar’s Libya National Army (LNA) advance on Tripoli, fighting has once again ripped through the Libyan capital city, in an ongoing renewed civil war between parallel governments in east and west of the country which has now killed over 500 and pushed 75,000 out of their homes,and has again ramped up the migrant crisis in Europe.
Reuters reports, “Heavy fighting raged in the Libyan capital on Saturday as eastern forces made a new push to advance inside the city controlled by the internationally recognized government.” The LNA’s new push began Saturday morning in a southern suburb, and continues the siege which began in early April, and has involved tanks, mortars, heavy urban fighting, and warplanes.
Recent clashes near Tripoli’s old airport. Image source: Al Jazeera
Gen. Haftar — who solidified control of Eastern Libya over the past two years and swept through the south in January, is seeking full control over Tripoli which would secure his hold of the entire country and its vital oil resources, of which he already controls a major chunk of in the east and south.
He’s long been described by many analysts as “the CIA’s man in Libya”— given he spent a couple decades living in exile a mere few minutes from CIA headquarters in Langley, Virginia during Gaddafi’s rule.
Last month, the White House went from a position of nominal support for the UN-backed government in Tripoli (now under attack by Haftar), to openly backing Haftar for the first time. A White House statement said Trump “recognized Field Marshal Haftar’s significant role in fighting terrorism and securing Libya’s oil resources” during a phone call with the “renegade” general.
Gen. Khalifa Haftar, head of the Benghazi-based Libya National Army (LNA)
Other countries like France and the UAE are also significant backers of Haftar, with the latter coming under fire for shipping banned weapons to the Libyan warlord. However, awkwardly these and other countries stand against the majority UN recognition of the Government of National Accord (GNA) in Tripoli as the legitimate authority over Libya and its prime minister Fayez al-Sarraj.
Interestingly, Gen. Haftar has just publicly accused the UN of seeking to partition in Libya in condemning his attempts to take the capital. Haftar accused the head of U.N. mission to Libya, Ghassan Salame, of not being impartial, while dismissing proposals for a ceasefire, according to Reuters.
“Partition of Libya is maybe what our adversaries want. This is maybe what Ghassan Salame also wants,” Haftar said.
However, the reality is that Libya descended into anarchy and warring factions across the four corners of the country the moment of its “liberation” by the US and NATO, which fought a regime change war against Muammar Gaddafi.
The White House has lately cast the conflict brought on by Haftar’s blitz across the country as part of “ongoing counterterrorism efforts” toward the end of achieving “peace and stability in Libya.”
via ZeroHedge News http://bit.ly/2K5Nqhi Tyler Durden
Over the last several weeks, we have been discussing the potential for a market correction simply due to divergences in the technical indicators which suggested near-term market risk outweighed the reward. As is generally the case, bonds have been warning the bullish bias of equity investors was likely misplaced. I have updated last week’s chart for reference.
The increase in risks has had us rotating exposure in our portfolios to a more defensive tilt. We previously trimmed back our overweight exposure to Technology, Then, two weeks ago, we noted we further tweaked client portfolios by reducing exposure to “trade sensitive” areas by selling half of our holdings in Industrials, Materials, and Discretionary areas.
Last week, we continued to process of the defensive rotation, reducing risk, and rebalancing allocations. (We publish our model changes in real-time for our RIA PRO subscribers.(Try NOW and get 30-days FREE)
“As noted in our newsletter over the last couple of weeks, we are seeing the early signs of a defensive rotation in equities due to the resurgence of the trade war. Therefore, we are moving our allocations accordingly to participate with the rotation.
We are adding to our real estate exposure, which is interest rate sensitive, and we are overweighting our defensive holdings in utilities and staples.
After recently lengthening duration in our bond portfolios, we will look for a short-term reversal in rates, which will coincide with a counter-trend market bounce, to add further to our position in IEF.“
Importantly, we still maintain a long-bias towards equity risk, but that exposure is hedged with cash and bonds which remain at elevated levels. (I published an investing resource for you last week: 10 Illustrated Truths About Investing & The Markets)
Looking Forward
Currently, on a very short-term basis, the markets have worked off some of the overbought condition from last month and, importantly, has held support at the Oct-Nov 2018 highs. There is additional support at the 200-dma just below current support at 2775. These are key support levels for the S&P 500 as we head into the summer months and, if the bulls are going to maintain their stance, must hold.
The reason we maintain a more defensive posture is the triggering of the intermediate-term “sell signal”(yellow highlights above) suggest that prices will remain under pressure for a while longer. (Hence the rotation to defensive positioning.)
Let me reiterate four very crucial points the markets have NOT factored in just yet:
There will be NO TRADE DEAL any time soon. (China is buckling down for a long fight.)
Earnings estimates are still far too high going into the end of 2019 and 2020.
The economy will weaken further as the latest rounds of tariffs, which take effect June 1st, begin to impact the economy headed into the last half of 2019.
The Fed is unlikely to lower rates, or increase their balance sheet, prior to a recessionary start or a substantially deep correction in the market. (i.e. more than 20% from current levels)
For now, as stated, the market is working a corrective process which is likely not complete as of yet. As we head into the summer months, it is likely the markets will experience a retracement of the rally during the first quarter of this year. As shown in a chart we use for position management (sizing, profit taking, sells) the market has just issued a signal suggesting risk reduction is prudent. (This doesn’t mean sell everything and go to cash.)
Just one other thing, I don’t like market comparisons because no two market cycles are alike. However, price patterns are important because they represent the “psychology of the herd.” The chart below shows the market in the months leading up to the Dot.com crash, the Financial Crisis, and where we are currently.
Again, no two market cycles are the same. The drivers which facilitate the bull run, and the catalyst which ends it, are ALWAYS different.
It is just investor behavior which is always the same.
The Bulls Continue To Bet On The Fed
Last week, we noted that the earnings growth story is going to become increasingly difficult to ignore.
“This is particularly the case given that just this past week economic data continues to show weakness. As shown in the following chart, global economic trade has collapsed to levels not seen since prior to the financial crisis.”
Of course, since almost 50% of corporate revenue and profits are generated from international activity, it is not surprising to see a problem emerging. But importantly, watch what is happening domestically as well.
These are early signs of economic weakness.
“But Lance, employment is still very strong. So what gives?”
The employment number from the BLS is adjusted, tweaked, and mathematically abused. As an indicator, it is one of the worst to watch and is subject to very large negative revisions in the future. Most importantly, the labor market is the LAST thing to turn in a cycle as employees are slow to hire and slow to fire. For a better understanding of employment look at the household survey. It is showing signs of weakening employment which supports why companies are now laying off workers.
(Also, notice the rate of change in employment has, not surprisingly, run at roughly the rate of actual economic growth. Given that first quarter GDP was 1.8%, when adjusted for inventories and imports, it aligned with the 1.66% rate in employment. Employment is driven by actual economic strength.)
Importantly, the first time the household survey was sitting at 0% rate of change was right after QE1 ended, the economy started sliding and Ben Bernanke launched QE2. The second time was during the 2012 manufacturing recession. As the economy was sliding, Ben Bernanke launched QE3 which pulled forward consumption was again. In both previous cases, however, Fed funds were near zero, the Fed’s balance sheet was growing, and recession risks were essentially nil.
Today, recession risks are the highest seen since 2007.
(Important Note: The graph above is based on lagging economic indicators which are subject to huge negative revisions in the future. Therefore, high current risk levels should not be readily dismissed as the recession will have started before the data is revised to reveal the actual start date.)
But more importantly, the Fed is no longer expanding their balance sheet and the Fed Funds rate is near 2.5%. Also, it isn’t just the Fed extracting liquidity, Central Banks globally are curtailing their “emergency measures.”
“I don’t see a world in which we have any form of meaningful contraction nor any form of meaningful expansion. We have completely taken away the toolkit of how normal economies should work when we started with QE. I mean, the odds that there’s a recession anymore in any Western country of the world is almost next to impossible now, save a complete financial externality that we can’t forecast.” – Chamrath Palihapitiya on CNBC last week.
However, this is not likely the case as noted by Lakshman Achuthan of the Economic Cycle Research Institute (ECRI):
“A proposition has taken shape the Fed has eliminated business cycles through quantitative easing (QE) and unconventional monetary policy. As a result, we have credit cycles that can prolong economic expansion, in theory, forever.”
This all sounds so familiar.
“In the late 1990’s, during the longest expansion in U.S. history, the idea of the end of the business cycle went practically mainstream, being written up in the Wall Street Journal and Foreign Affairs. Between glottalization and the tech boom – which led to dramatic improvements in supply chain management, subduing inventory cycles – the argument went that we had arrived at the end of the business cycle.” – ECRI
Of course, just a couple of short years later the business cycle returned with a vengeance.
But, here are once again with the latest iteration of why “this time is different.” The current cycle, which certainly seems never ending, has been built upon on ultra-low interest rates and rising levels of debt. As we discussed last week, the Fed is now tacitly warning about the risks in corporate debt.
“Officials, for the second time in six months, cited potential risks tied to non-financial corporate borrowing, particularly leveraged loans—a $1.1 trillion market that the Fed said grew by 20% last year amid declining credit standards. They also flagged possible concerns in elevated asset prices and historically high debt owned by U.S. businesses.”
Notice that when the Fed starts hiking rates, historically, combined with corporate debt to GDP at peak levels, bad things have tended to occur…repeatedly. Furthermore, the amount of corporate debt is stacked up at the bottom end of the “investment grade” scale.
“Given that downgrades are a real and present danger and there is real potential for a massive imbalance between the number of buyers and sellers of junk debt, we need to consider how close we may be to such an event. To provide perspective, we present a graph courtesy of Jeff Gundlach of DoubleLine.”
“If 50% of BBB-rated bonds were to get downgraded, it would entail a shift of $1.30 trillion bonds to junk status. To put that into perspective, the entire junk market today is less than $1.25 trillion, and the subprime mortgage market that caused so many problems in 2008 peaked at $1.30 trillion. Keep in mind, the subprime mortgage crisis and the ensuing financial crisis was sparked by investor concerns about defaults and resulting losses.”
Why worry? With just under 2/3rd of the BB (junk rated) bonds clustered in the top-15 industry groups what is the worst that could happen?
The problem comes if there is a recession. If that occurs, there will be a massive wave of downgrades of BBB to BB, or less, which means that major pension, institutional, and mutual fund managers will be forced to liquidate their bonds.Since such an event would most likely occur with the onset of a recession, the real risk comes when the junk bond market, which already has thin liquidity, simply becomes illiquid.
It won’t require much of an economic change to ignite the credit issue which currently exists. Once the liquidation process begins, liquidity for companies will quickly evaporate leading to forced bankruptcies. In turn, the stock market will decline as job losses mount and consumption falters.
This is more commonly known as a “recession.”
The “R” Word
Despite hopes to the contrary, the U.S., and the globe, will experience another recession. The only question is the timing.
The Last Two Times the Fed Ended Its Rate Hike Cycle, a Recession and Bear Market Followed
The Strengthening U.S. Dollar
Message of the Bond Market
Untenable Debt Levels
Credit Is Already Weakening
The Abundance of Uncertainties
Political Uncertainties and Policy Concerns
Valuation
Positioning Is to the Bullish Extreme
Rising Bullish Sentiment (and The Bull Market in Complacency)
Non-Conformation of Transports
But herein lies the most important point about recessions, market reversions, and systemic problems.
What Chamrath Palihapitiya said above was both correct and naive.
He is naive to believe the Fed has “everything” under control and recessions are a relic of the past. Central Banks globally have engaged in a monetary experiment hereto never before seen in history. Therefore, the outcome of such an experiment is also indeterminable.
Secondly, when Central Banks launched their emergency measures, the global economies were emerging from a financial crisis not at the end of a decade long growth cycle. The efficacy of their programs going forward is highly questionable.
But what Chamrath does have right were his final words, even though he dismisses the probability of occurrence.
“…save a complete financial externality that we can’t forecast.”
Every financial crisis, market upheaval, major correction, recession, etc. all came from one thing – an exogenous event that was not forecast or expected.
This is why bear markets are always vicious, brutal, devastating, and fast. It is the exogenous event, usually credit related, which sucks the liquidity out of the market causing prices to plunge. As prices fall, investors begin to panic sell driving prices lower which forces more selling in the market until, ultimately, sellers are exhausted.
It is the same every time.
While investors insist the markets are currently NOT in a bubble, it would be wise to remember the same belief was held in 1999 and 2007. Throughout history, financial bubbles have only been recognized in hindsight when their existence becomes “apparently obvious” to everyone. Of course, by that point is was far too late to be of any use to investors who have already suffered a significant destruction of invested capital.
This time will not be different. Only the catalyst, magnitude, and duration will be.
Believing the “Fed has it all under control” has historically been a bad bet.
via ZeroHedge News http://bit.ly/2YMRpDF Tyler Durden
