Inconvenient? Record Arctic Sea Ice Growth In September

According to data from The Danish Meteorological Institute, since hitting its earliest minimum extent since 1997, Arctic sea ice has been expanding at a phenomenal rate.

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As notalotofpeopleknowthat blog details, it is already greater than at the same date in 2007, 2008, 2010, 2011, 2012 and 2015.

Put another way, it is the fourth highest extent in the last ten years.

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Even more remarkably, ice growth since the start of the month is actually the greatest on record, since daily figures started to be kept in 1987.

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Experts call this phenomenon the final collapse of sea ice!

*  *  *

While we are sure this is just 'transitory', it appears the 'science' is not as 'settled' as we thought…

Source: Branco

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“Tremendous” Demand For 7Y Treasurys; Second Largest Buyside On Record

An ugly 2Y auction (with the highest yield since 2008) on Tuesday, a mediocre 5Y auction yesterday, and now a blistering 7Y auction, in which the Treasury sold $28 billion in “curve belly” notes at a high yield of 2.13%, stopping through the When Issued by a surprisingly strong 1.1bps, the highest since April.

As Stone McCarthy described the auction in one word, “Tremendous”, noting it a buyside takedown which was the second largest on record.

The internals were impressive: the bid to cover of 2.70 surged from last month’s 2.46, was solidly above the 2.55 six month average, and was the highest since April. It was also the third highest in the past 5 years. Indirect bidders couldn’t get enough, and were awarded 70.6% of the takedown, their highest allotment since April, and above the 69.3% 6MMA. Likewise, Directs waved it in, and took down 19.0%, the highest since December 2016, leaving Dealers holding only 10.4%, the second lowest award for the class on record, higher only than the 8.8% this past April. 

In short, a very strong auction, whether or not driven by China as SocGen speculated earlier, and one which not only pushed the curve lower, but also sent the USDJPY to session lows, validating one of the strongest correlations we have observed in recent months.

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Mnuchin Begins Selection Process For Trump’s New IRS-Auditor-In-Chief

In just over six weeks, IRS Commissioner John Koskinen’s term expires. This allows President Trump to choose a new IRS chief who may have two high-profile and sensitive jobs: helping implement the the president’s proposed tax cuts and overseeing an audit of his tax returns.

Trump hasn’t nominated anyone to replace Koskinen yet, but as Bloomberg reports, Koskinen, who was hired by President Barack Obama and is loathed by congressional Republicans, who tried to impeach him in 2016, is unlikely to be reappointed.

Treasury Secretary Steven Mnuchin, whose department includes the Internal Revenue Service, is said to be in the early stages of the selection process, according to two people familiar with the matter.

We would imagine this will be the next target for the left – potentially leading to demands of recusal as the slightest perception that Trump is trying to influence the agency overseeing his audit or any tax-related probes of his campaign’s ties to the Russian government would ignite a furor in Congress.

A commissioner who tried to interfere in either the Russia investigation or Trump’s audit would likely be foiled, former leaders of the agency told Bloomberg.

“The career folks at the IRS are not going to let anybody come into the organization, appointee or not, and tell them who and what they have to do in the way of examining someone,” said Lawrence Gibbs, who worked at the IRS for 17 years, including as the commissioner in the 1980s.

 

That didn’t stop former President Richard Nixon, whose attempts to manipulate tax investigations were cited by Congress in one of his articles of impeachment in 1974.

 

“The IRS pushed back when Nixon tried to exert political influence; that reinforced the probity of the IRS,” said Mark Iwry, who served as a senior adviser and deputy assistant secretary for tax policy at the Treasury during the Obama administration.

 

“IRS personnel know very well that improperly favoring or disfavoring a particular taxpayer would be absolutely wrong and contrary to IRS’s mission and decades of IRS practice and adherence to principle.”

Notably, while a permanent replacement for Koskinen must be confirmed by the Senate, by law the job can’t remain vacant.

The Internal Revenue Code requires the president to appoint an acting head of the agency.

“We are actively focused on nominating a new IRS commissioner. We will put someone in on a temporary basis if needed,” White House spokeswoman Natalie Strom said.

Coming as it does just a week after special counsel Mueller is reportedly gaining cooperation from the IRS, this will be one to grab the popcorn for as we are sure the mainstream media will find no end of conspiracy to chase.

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$7,700 Is Your Share of the Wars in Afghanistan, Iraq, and Syria So Far

WarOnTerrorDanaRothsteinDreamstimeHow much have our post-9/11 wars on terror cost? This year’s National Defense Authorization Act ordered the government to collect and calculate that information, and the results are in. The Pentagon estimates that so far the war in Afghanistan has cost $753 billion, amounting to a cumulative cost per taxpayer of $3,785. Iraq and Syria are $770 billion, or $3,955 per taxpayer. That adds up to a grand total of more than $1.5 trillion and $7,740 per taxpayer. So far.

At Defense One, Marcus Weisberger notes: “Americans paid the most for the wars in 2010, an average of $767 apiece. The annual amount declined through 2016 to $204 per taxpayer, before growing again as the U.S. ramped up its airstrike campaign against the Islamic State in Iraq and Syria.”

These figures vastly understate the ultimate monetary costs of the wars. In Reason piece last year headlined “The High Price of Security Theater,” James Bovard included the costs of Homeland Security, Transportation Security Agency harassment at airports, and FBI, CIA, and NSA surveillance to come up with a total cost of $4 trillion.

The Costs of War Project at the Watson Institute of International and Public Affairs at Brown University calculates that “through 2017, the US federal government has spent or been obligated to spend $4.8 trillion on the post-9/11 wars, including medical and disability payments to veterans over the next forty years.” The researchers at the Watson Institute further noted that the wars had generally been financed by borrowing. “Unless the US changes the way it manages that debt, future interest will exceed $8 trillion by the 2050s,” they report.

DefenseOneWarCosts

Assuming 210 million taxpayers, the Watson Institute figures suggest that, if these trends continue, that the cost of our wars in Afghanistan, Iraq, and Syria will amount to $61,000 per individual taxpayer by 2050.

President Donald Trump wants to increase the Pentagon’s budget by $54 billion. Below see Reason TV’s “3 Reasons Conservatives Should Cut Defense Spending Now”:

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California Wants to Ban All Gas-Powered Cars

Gov. Jerry Brown and Al GoreCalifornia Gov. Jerry Brown is reportedly considering a ban on all gas-powered cars.

No, seriously.

Mary Nichols, head of California’s Air Resources Board, told Bloomberg News this week that Brown has been pestering her about getting a gas-car ban on the books.

“I’ve gotten messages from the governor asking, ‘Why haven’t we done something already?'” she said, adding that Brown is particularly worried that his planet-saving efforts might be outshined by those of other countries.

The United Kingdom and France have both said they will ban the sale of gas and diesel by 2040. Norway’s transportation plan calls for all new passenger vehicles to be zero-emission by 2025. India wants to make the switch to electric by 2030.

But it’s the People’s Republic of China, currently drafting its own ill-defined ban on the production and sale of fossil-fuel-powered vehicles, that is giving Brown the most grief.

Says Nichols, “The governor has certainly indicated an interest in why China can do this and not California.”

Apart from envying the autocratic powers of a communist dictatorship, Brown has not said what a ban on gas and diesel vehicles might look like. Nichols herself offers scant detail, other than saying that a complete ban on the sale of new combustion-powered vehicles could arrive as early as 2030 and that all combustion would have to be phased out by as early as 2040.

That’s…optimistic. California currently has a goal of getting 1.5 million zero-emission vehicles (ZEVs) on the road by 2025, and the prospects of reaching even this far more modest goal are in question.

Despite generous subsidies, purchases of ZEVs still hover below 3 percent of new vehicles sales. Only 13,804 were sold in California in the first quarter of 2017, out of 506,745 in total new vehicle sales.

Only 300,000 “clean vehicles,” of which roughly half are partially gas-powered hybrids, have been sold in California. Purely electric vehicles are about .4 percent of the nearly 35 million registered vehicles on the state’s roads.

To achieve Brown’s goals, he will have to compel 99.6 percent of California drivers to trade in their gas guzzlers for electric vehicles that they currently find too expensive or too impractical. And that doesn’t even touch on the issue of providing enough charging stations for these vehicles, or of generating enough electricity to power those stations.

Nor does it cover the issue of affordability. Right now, electric cars are the domain of the well-to-do. A 2016 Berkeley study found that 83 percent of those making use of California’s electric vehicle subsidy program made over $100,000.

Getting the rest of the state into these cars would require massive subsidies. Even then, many might end up going without personal transportation.

How any of these practical considerations might be addressed is unknown. Right now, the ban is still just talk. But it’s talk that Brown and his subordinates are taking seriously.

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The “Wolf Of Wall Street” Says Jamie Dimon Is Right About Bitcoin

The guy who made tens of millions of dollars misleading American retirees into buying worthless pink sheet stocks says he agrees with J.P. Morgan Chase & Co. CEO Jamie Dimon’s comment that bitcoin is “a fraud.”

Jordan Belfort, the inspiration for Leonardo DiCaprio’s character in the 2013 Martin Scorsese film “The Wolf of Wall Street,” told the Street that he believes Dimon is right, adding that bitcoin “isn’t a great model.”

In what may eventually be revealed as an important distinction, Belfort’s take was somewhat more nuanced than Dimon’s. While the JPM CEO predicted that all digital currencies would eventually become worthless, Belfort said there might be room for one.

"I'm not saying cryptocurrencies, there won't be one – there will be one – but there has to be some backing by some central governments out there.

 

If any digital currency demonstrates long-term viability, it will probably be one that’s backed by a central bank."

Two weeks ago, Dimon sent the price of bitcoin tumbling when he called the digital currency a fraud and said he would fire any JPM traders caught trading it. He added that it made people like his daughter feel like “geniuses” for buying in early.  

"It’s a fraud. It’s making stupid people, such as my daughter, feel like they’re geniuses. It’s going to get somebody killed. I’ll fire anyone who touches it."

Surprisingly, given bitcoin’s role in helping disrupt the financial services industry, not every Wall Street CEO shares Dimon’s dim view on the digital currency. Two days ago, Morgan Stanley CEO James Gorman told WSJ that he believes Dimon is wrong and that "bitcoin is certainly more than a fad.” However, he conceded that “there is a government risk to it” – alluding to Chinese authorities’ decision to shutter local bitcoin exchanges. Joining Dimon and Belfort in the skeptics’ corner is Bridgewater Associates Founder Ray Dalio, who said last week that he believes bitcoin is in a bubble.

Circling back to Belfort, he explained to the Street that he just couldn’t wrap his head around bitcoin…

“Basically, the idea that it’s being backed by nothing other than a program that creates artificial scarcity it seems kind of bizarre to me.”

He also claimed that he knows people who lost money in the Mt. Gox hack, and that the incident served as a wakeup call.

“They could steal it from you I know people who have lost all their money like that…"

Of course, Dimon’s statement didn’t stop JP Morgan Securities from transacting in a bitcoin-linked exchange-traded product traded on Nasdaq Stockholm, prompting an algorithmic liquidity provider called Blockswater to sue Dimon for "spreading false and misleading information" about bitcoin.

Traders, meanwhile, have continued to vote with their wallets: Bitcoin finally filled the “Dimon gap” yesterday, and has continued to climb on Thursday…

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How Ron Paul Gets the NFL “Take the Knee” Controversy Wrong

Ron Paul appeared on Alex Jones’s InfoWars to weigh in on the controversy that has the nation pointlessly aggrieved: some football players aren’t happy with how often police kill black men and choose to express this by kneeling rather than standing when the national anthem is played before football games.

Paul, the former Republican congressman (and two-time Republican, and one-time Libertarian, presidential candidate) seemed to see other things worth being angry about in the kneeling NFLers behavior and in the team owners’ tolerating it, for various unconvincing and poorly expressed reasons.

President Donald Trump has chosen to cynically and idiotically fan the flames of this phony controversy, dividing the nation roughly between those who either agree that cops violently misbehave too often or that Americans should be able to peacefully and symbolically express that opinion during the national anthem at a football game, and those who think public and presidential pressure should force everyone to “show respect for the flag” in one proscribed ritual way.

Matt Welch masterfully parsed out nearly all the issues relevant to the libertarian perspective about this dumb controversy at Reason earlier this week. Among his conclusions were that it would be great to get government money and giveaways and crony treatment out of sports, and that it’s a healthy thing for free Americans to react to presidential dudgeon by doing the opposite of what (he claims) he wanted. (Trump, the political imp of the perverse, likely would have been disappointed if everyone had obeyed his command to rise for the anthem.)

On his show, Alex Jones, a popularizer of the idea that the U.S. government conducts baroque and sinister conspiracies with maddening regularity and for tyrannical ends, now seems more worried that “white people” and America are being criticized. Paul, fortunately given the shadow of racist comments that appeared under his name (but were not, he insists, written by him) decades ago in newsletters he issued, doesn’t directly rise to that bait, moving forward as if it wasn’t even said.

But Paul apparently, for reasons he never specifies or makes clear in this interview, finds the display of kneeling by football players to be a distasteful example of a modern right-populist bogeyman, “cultural Marxism,” a (often seen as conspiratorial) movement to overturn all traditional western values in order to soften our underbelly to accept totalitarian communism, through means unspecified.

The Ron Paul who created a stir for a message of small government, sound money, and liberty in his 2008 and 2012 presidential campaigns nearly entirely avoided this kind of cranky right-wing talk. I never heard him claim the free choices of any American to express an anti-government opinion in any context was something to be upset about in any way. (I witnessed dozens of hours of his political speeches while researching my 2012 book Ron Paul’s Revolution: The Man and the Movement He Inspired.)

Being a politician seemed to bring out the best in him, a real rarity. When seeking a national audience as a presidential candidate, the need to appeal outside his pre-existing constituency containing many whose anti-statism had a right-populist streak gave him room to paint a wide and sympathetic vision of liberty, one with no place for griping about “cultural Marxism” or that some people are freely choosing to not embrace those old-time western family values.

That Ron Paul left right-wing culture war nonsense entirely behind, speaking instead of the human tragedies of military empire, the dangers of federal management of the money supply, the stupidity and evil of restricting our free choices that don’t directly harm others, from drug use to raw milk consumption. That Ron Paul celebrated the powers of a free people and free culture to unify us and make us the best we could be, as individuals and as a nation.

His message of peace, prosperity, and a government that no longer went out of its way to help the powerful and harm the powerless seemed designed to appeal to progressive radicals as much as to staunch libertarians or the small-government right, even explaining how programs of direct help to the destitute should not be where limiting government’s reach and spending should start.

In the Jones interview this week, Paul hits the correct note that President Trump should leave the NFL knee controversy alone, saying “the president ought to be a lot less noisy about it” and should not be “threatening people [like] they are committing some crime.”

He also rightly said, “a lot of this got worse once football teams started talking money from government to promote supernationalism and militarism” and that “the American people should not allow government to give one cent to football and allow them to promote militarism.”

Paul has built his entire political and polemical career identifying the moral crimes of the U.S. government in areas both foreign and domestic. Why should he consider it some negative “attack on tradition and culture” via “cultural Marxism” for football players to quietly refuse to show demanded obeisance to the American flag, or the American government?

He gave no hint of an explanation, and there is no decent one from a libertarian perspective I can imagine.

Paul stresses to Jones some points that are technically true, but not terribly relevant from a wide-range libertarian perspective. Pressure or restrictions on free speech not directly from government do not implicate the First Amendment, as Paul says here. True.

Yet the ability to express oneself freely is a good thing, a core part of liberty. That’s why libertarians don’t want government to restrict it. Those concerned with human liberty should value a culture of free expression and defend it against pressures both state and non-state, even though one does not necessarily have an absolute right to express oneself on or with someone else’s property.

But to speak with Jones as Paul does in this interview of the relationship of NFL team owners and players as one of “property” rather than of contract and thus with no implications for a concern for liberty to express one’s objections to government misconstrues the issue. Merely being an employee of a company does not give the company a “property right” to exercise; the employee-employer relationship is a mutual contractual one, implicit or explicit.

While the NFL could, if it wished, make employment contingent on standing for the anthem, they’ve chosen not to. Paul has provided no argument, and I cannot imagine one within his larger vision of the proper role of government and what makes for a prosperous and free society, as to why the players failure to stand or the owners’ failure to try to make employment as a player contingent on standing is something a libertarian should care about at all, certainly not be “disgusted” about, except possibly to cheer.

Paul encourages a “boycott” to solve this nonsensical, nonexistent “problem,” which creates tensions for those who believe that free markets bind all of us across nations, classes, and creeds into a complicated but delicate system of wealth-creation and betterment for all.

Boycott is indeed anyone’s right within a free market. But encouraging everyone to refuse to do business with those whom we differ ideologically or politically is a losing game for everyone, especially anyone with a radical point of view, left, right, or libertarian. Markets make us partners to mutual advantage; boycotts make us enemies. This does not mean it isn’t within anyone’s rights to do it. No one has a right to our business or our approval. But willfully trying to limit the wealth-generating benefits of markets to those with whom one agrees risks impoverishing us all, as those dedicated to the old-fashioned western values of cosmopolitan free trade across lines of religion, nation, and class should respect.

Thus, advocating a culture of boycott requires more heavy thought from a market advocate than Paul gives it here, especially given that he hasn’t rationally established any good reason why the NFL deserves punishment.

The “Cultural Marxism” he seems to be angered about was of zero concern to candidate Paul. Even current freelance popularizer Paul doesn’t seem to give it very much attention if Google is any guide.

An October 2016 episode of Paul’s “Liberty Report” show, though, was dedicated to a rather rambling and disconnected set of comments on the matter. Paul sees an ill-defined attempt to “undermine the Judeo-Christian moral values of family” as key to imposing authoritarianism on America. He worries harsh social pressure is being aimed at, say, stores selling blue clothes to boys and pink clothes to girls; that campus officials are afraid to speak out against leftist agitation on campus; and that the notion of individual rights is being swamped by a mentality of special group rights. Paul rambles over a lot of other “cultural right-wing” concerns candidate Paul wisely left alone.

But he ends that October show with a message that the Ron Paul who was Alex Jones’ guest this week should have remembered: “nobody can initiate aggression against another person”—the very message NFL’s kneelers are trying to convey about American police. As Paul said in his episode on “cultural Marxism,” in “a free society” one “is allowed to criticize government” and “too many people don’t want that, they want people to toe the line.

“Liberty means allowing [everybody] to make personal choices, social relations, sexual choices, personal economic choices” Paul went on to say, and it should not be a “threat,” it should “bring people together.”

“Peace and prosperity,” Paul said in that October show,” is what he is “waiting for and working for.” He closed with a quote from H.L. Mencken, along the lines of “the most dangerous man to any government” is the man who “without regard to prevailing superstitions and taboos” comes to the conclusion “the government he lives under is dishonest, insane and intolerable.”

One might almost imagine that someone contemplating incidents of police violent abuse and murder of American citizens, might come to Mencken’s conclusion, and thus have a very good reason for not wanting to stand for the national anthem.

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First Sponsor Pulls Ad Dollars From The NFL

It begins. We suspect NFL owners, and their media lapdogs, may be about to start paying attention to what President Trump (and the fans of the game) are saying (and doing).

Over the weekend, Bloomberg reports that fans who agree with Trump shared lists of advertisers on social media networks while calling for boycotts along with hashtags like #PunchThemInTheWallet.

Richard Levick, a crisis communications expert, says the NFL deftly navigated the weekend’s challenges but expects no shortage of hazards ahead.

“They showed a high level of unity and independence, respecting those who participated in the protests and those who didn’t,” says Levick.

 

“In this era of hyper politicization — which is being driven by the White House into everything from the Boy Scouts to the NFL — there is no safe middle of the road.”

But now, following President Trump's warning yesterday that…

"I think The NFL is in a box, the only thing that is doing well for The NFL is the pre-game…

 

They can’t have people disrespecting the national anthem. The NFL has to change or their business is going to go to hell."

At least on major company has pulled his company's advertising and sponsorship moneyAs The Times Free Press reports, two years ago, Cleveland businessman Allan Jones was proudly showing off his newly acquired Hardwick Clothing-brand suits by providing the wardrobe for NBC's on-air talent during the network's broadcasts of NFL football games.

But after NFL players and coaches challenged President Donald Trump and many took a knee during the national anthem played before their games over the weekend, Jones said he is through sponsoring the wardrobes or advertising on stations that air the National Football League.

"Our companies will not condone unpatriotic behavior!" said Jones, CEO of the payday lending chain Check Into Cash and owner of Hardwick Clothes – America's oldest suit maker.

 

"For the 29 states we operate in, this isn't much to them, but it's a lot to us. The Tombras Group is our ad agency in Knoxville and our national media buyer for both TV and radio (for Check Into Cash) and don't look for Hardwick on the NFL either."

 

Jones, a strong supporter of Trump, directed his media buyer, the Tombras Group in Knoxville, to remove any commercials for Check Into Cash, Buy Here Pay here USA, or U.S. Money Stores from airing during NFL games "for the entire season."

As a reminder, the league and its 32 teams made $1.25 billion from corporate partners and advertisers last year, according to ESP Properties. For decades, big companies paid vast amounts of money to bask in the associative glow of the NFL’s perceived dynamism, passion and vigor. Now they’re paying vast amounts of money to bask in the fiery hell-broth of the culture wars.

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Kass: “Investors Seemingly Learned Nothing From History”

Authored by Doug Kass via RealInvestmentAdvice.com,

“‘A bull market is like sex. It feels best just before it ends.'” – Warren Buffett

Excuse me for being redundant, but the following Jim Rogers quote that I posted yesterday underscores Mark Twain’s famous quote that “history doesn’t repeat itself, but it often rhymes”:

“When things are going right, we all need a 26-year-old. There’s nothing better than a 26-year-old in a great bull market especially in a bubble. They’re fearless. They don’t know. It will never end. They will tell you why it will never end. They know that it cannot end and will never end. So in the bull market, you’ve got to have a 26-year-old. But when they end you don’t want the 26-year-old around… they make a lot of money. They don’t know why they made money. So they don’t know why they lose money. They don’t know what happened. -Jim Rogers on Realvision

Back in 1997 I wrote this editorial in the Other Voices section of Barron’s that echoed Rogers’ recent quote.

In the difficult business of piling up a fortune everyone has an infallible strategy and a set of assumptions, technical and./or fundamental, that leads them to investment nirvana.

But it is never easy. The rules change and so do the players.

From my perch I steadily have listened to the irrational being rationalized as the bulls declare, with straight-faced confidence, that valuations in the 95% decile should be ignored because a synchronized global expansion will “earn out” from these extended metrics.

This confidence is expressed despite a plethora of possible adverse outcomes, particularly in the interconnected world in which we live.

The positive outcome of steadily expanding global growth coupled with low inflation and equally low interest rates may yet prove to become reality. Geopolitical friction may subside. Political partisanship in Washington, D.C, may succumb to cooperation, leading to the initiation of tax and regulatory reform and the repatriation of overseas corporate cash. The Orange Swan may wake up and reject the extreme influences of the Republican right. Trump may stop threatening a war with North Korea in a ping-pong of outrageous and provocative tweets. The rate of growth in real GDP may expand to 3% and we may be in another new paradigm of uninterrupted growth. S&P profits will grow at a rate of 8% annually, ad infinitum. Natural disasters will be a thing of the past and global warming concerns are nonsensical. The North Korean Rocket Man may be all hat and no cattle. The proliferation of ETFs, which in number now exceed the number of listed equity securities, and the ever-present quant strategies that are ignorant of fundamentals may not yield a “flash crash,” easily accommodating any selling waves. Every dip will continue to be bought. And interest rates and inflation may be in a permanent stage of adolescence.

But, I am blinded by a sense of history, and the belief that few of the conditions in the last paragraph are likely to be met.

In our flat, interconnected and network world, the odds favor less stability over more stability.

To this observer the markets’ dominos are exhibiting signs of falling around all over — in consumer packaged goods, in (T)FANG, in retail and elsewhere. Yet the selective memory of the talking heads in the business media emphasize the narrowing field of outperforming stocks (e.g., Nvidia Corp. (NVDA) and Deere & Co. (DE) ) that have been working, failing to see those falling dominoes around them.

Fear and Doubt Have Left Wall Street

The ever-present risk to the contrarian is that, over the short term, the past literally is repetitive and the crowd typically outsmarts the remnant. Tuesdays always follow Mondays and Wednesdays follow Tuesdays. But as we extend time cycles, history seems to move from repeating itself to rhyming with the past.

History undoubtedly teaches lessons about investment, but it does not say which lesson to apply when. “Find value, always” is as good a precept as any, but value is subjective and its definition is liable to change. In highly speculative markets, value means, to most, “it is going up.”

Stay abreast because in bull markets there is rarely a clear demarcation between progress and fantasy. I remain of the strong belief that we are in a Bull Market in Complacency that likely ends poorly and that has reduced the upside and has expanded the potential market downside.

To the bullish cabal the market “feels” great now (for, as Warren Buffett says, it is because, like sex, if feels best at or near the end), but after an eight-year bull market it may be time to consider the investment contrary. As James Surowiecki wrote in “The Wisdom of Crowds”:

“Diversity and independence are important because the best collective decisions are the product of disagreement and contest, not consensus or compromise.”

Investment returns likely have been pulled forward by central bank liquidity, low interest rates and passive investing. However, over the next five years returns may be substandard at best, but more likely, negative. At worse, we face an incipient bear market.

As expressed in yesterday’s opener, the nature of and players in the investment business have changed. This helps to explain the Teflon nature of the S&P 500 Index.

But as Grandma Koufax used to say, “my matzah brei doesn’t grow to the sky,” and every day we move closer to a Minsky Moment.

The salutary environment perceived by many today may be transitory and weak in foundation.

The potential political, geopolitical, economic and market outcomes are many, and a clear and market-friendly path is not certain.

Bottom Line

The name of the game is money. It was Lord Keynes who first saw that the handling of it is a game. Most discussions of money and investing speak only of economics and statistics, but that’s only a part of the game. The other part is people, individually and together, the emotional investor and the irrational crowd.

And it again might be the market scene that is often (as it was in 2000 and 2007) seen only in kids’ eyes or in the eyes of older investors who behave like 26-year-olds at or near the end of every significant bull market cycle:

“‘See, see,’ said the Great Winfield. ‘The flow of the seasons ! Life begins again! It’s marvelous! It’s like having a son! My boys! My kids!'” -Adam Smith, “The Money Game”

Do some reading over the weekend as it appears that the only thing many investors have learned from history is that they haven’t learned from history.

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Gary Cohn: “I Can’t Guarantee” Taxes Won’t Go Up For The Middle Class

While proclaiming that "the biggest winners will be everyday American workers," President Trump's top economic adviser, Gary Cohn told ABC News' George Stephanopoulos that he can't guarantee that taxes won't go up for some middle-class families under the administration's sweeping tax overhaul.

"The biggest winners will be the everyday American workers as jobs start pouring into our country, as companies start competing for American labor and as wages start going up at levels that you haven't seen in many years," Trump said.

Following Matt Drudge's cries of "betrayal" yesterday, it appears confusion truly reigns as to just who benefits from the so-called 'greatest tax cuts in the history of the world' as we know absolutely nothing because the government has yet to release the income brackets (or get close to guessing at just how 'progressive' and 'punitive' the optional 4th bracket will be).

Reflecting on what President Trump called "The Middle Class Miracle", Cohn remarked…

"I can't guarantee anything," said Cohn, the director of the White House Economic Council. "You can always find a unique family somewhere."

 

He said Trump's plan is "purely aimed at middle-class families." But Cohn acknowledged that "it depends which state you live in."

 

"When we looked at the tax plan and we look at what it does for Americans, we are very confident that Americans are getting a great deal here," he replied.

 

"We've also said that wealthy Americans are not getting a tax cut."

So "everyday Americans" win, "can't guarantee" that the middle-class won't pay more, and the rich will definitely feel the 'progressive' pinch (though definitions of 'everyday', 'middle-class', and 'rich' are unclear). However, it appears clear there is one cohort of 'losers'…

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