Month: July 2016

Submitted by Eric Peters via EricPetersAutos.com,

The Fourth of July has become like Christmas – a kind of ersatz celebration with forms but not much significance.

What is it we’re celebrating, exactly?

A historical event – the successful separation of the colonies from the British empire.

The secession of the colonies. Their rejection of the arbitrary authority of the British king and parliament.

Good for the colonists.

What about us?

Do we not also live under the authority of arbitrary government? A president and Congress?

An endless conga line of bureaucrats and apparatchiks?

Sometimes, we get to vote for some of them. Our vote made effectively meaningless by the thousands – the hundreds of thousands and tens of millions of other votes.

The king or parliament would issue an edict and the colonists were legally required to obey it. Are we not legally required to obey whatever edicts the Congress pass and president decrees?

Can anyone explain the difference?

Moral law no longer governs. Only the law. And that can be anything. There are no limits whatsoever on what may be done to us; only that a law be enacted (and not even that).

We are bound to obey, regardless.

The king’s men could simply take our things, search our persons on whim. The colonists objected to such treatment and cited such treatment among the reasons for their decision to secede.

Is it not a fact that the government’s men (and women) can simply take our things? Search us on whim? Have you traveled recently?

Can anyone explain the difference?

The colonists under the king and parliament could own property. Meaning really own it. They were not required to send annual/regular payments in to the king in order to be permitted to remain in homes for which they’d paid or carriages they’d purchased.

We are.

The colonists – under the king and parliament – had an unquestioned right to own and bear (carry on their persons) firearms. Without permission.

Are we allowed such freedom?

The king and parliament did not concern themselves with the colonists’  “safety.” If a colonists wished, he could ride his horse as fast as he liked, eat what he liked, smoke what he liked. No authority pestered him about his choices. He was not told with whom he must do business, or forced to build his house a certain way or forbidden from planting a vegetable garden on his property. He was not compelled to purchase insurance of any kind whatsoever.

How about today?

In most parts of the Land of the Free, you and I are not even free to purchase fireworks to celebrate our supposed freedom. We’re allowed “safe” sparklers and such. But nothing that flies or explodes. To possess or use such constitutes a crime in most states.

The irony of this is lost on most people.

So, celebrating our freedoms strikes me as hollow and pathetic. Like holiday greetings instead of merry Christmas!

I plan to stay home and read a book.

via http://ift.tt/29pW5KP Tyler Durden

The pain for Europe’s banks, and especially those in Italy, continues this morning following the latest news surrounding the Italian bank sector.

As a reminder, the Euro Stoxx Banks index was down -0.88% last week and is nearly 19% down from its pre-referendum levels. Italian Banks are at the heart of that weakness with the likes of Unicredit, Intesa, Banco Monte dei Paschi and UBI down -9.78%, -3.44%, -15.79% and -6.11% respectively last week, in the process sending Italian stocks to levels not seen since Draghi’s famous “whatever it takes” speech.

As we documented recently, there has been plenty in the press about possible liquidity guarantees and recaps for Italian Banks (not to mention yet another quiet Atlante-funded bailout on Friday) and it looks like this one still has plenty of room to run. Following reports that Italy was planning either a direct €40BN liquidity injection, a plan reportedly shot down by Merkel, as well as an EU cleared proposal for a €150 billion liquidity backstop, last night the FT ran a story suggesting that Italy PM Renzi is prepared to defy Brussels to inject public funds into the banking system should it come under severe systematic stress, and so break the bail-in principles of EU regulation following the upcoming European stress tests which, at least based on Italy’s panicked response, suggest many Italian banks will fail.

That story, however, was denied today when La Repubblica reported that Renzi will respect European Union rules on state aid for banks, an Italian official said on Monday. It remains to be seen he will stick to this commitment especially if the collapse in Italy’s banking sector continues. Overnight DB also said that, “while UK politics has dominated headlines for the last few weeks it feels like the health of Italian Banks could well takeover in the near term.“

Which brings us to the latest catalyst, namely reports that the ECB has asked perpetually troubled, insolvent and repeatedly bailed out Banca Monte dei Paschi di Siena, the world’s oldest bank, to draw up a plan for tackling its bad-loan burden, asking the lender to reduce its load of soured debt to 14.6 billion euros ($16.2 billion) in 2018 from 24.2 billion euros at the end of 2015, Italy’s third-biggest bank said in a statement Monday.

As a result, Monte Paschi was halted after tumbling for yet another day to fresh new record lows, while the Italian bank sector tumbled in Milan on Monday amid fresh concerns the country’s lenders are under pressure to raise capital to bolster their finances.

Seven of the 10 biggest decliners in the STOXX 600 Banks Index were Italian lenders, with Monte Paschi dropping 8.2 percent as of 9:40 a.m., while UniCredit SpA fell 3.3 percent. The benchmark index, which tracks 48 banks, dropped 1.1 percent.

Cited by Bloomberg, Vincenzo Longo, a strategist at IG Markets in Milan said that selling such a large stock of soured loans “could lead the bank to seek additional capital that investors are not available to provide. The government’s moves to seek easier rules to support Italian banks underscores the difficulty of the weakest ones, adding pressure to the industry.”

Italian Prime Minister Matteo Renzi is weighing injecting capital into the nation’s banks after Britain’s vote to leave the European Union jolted stock markets, aggravating the decline in Italy’s lenders. The plan has drawn opposition from Germany and is pitting Renzi against the EU amid concern government funding would violate the region’s state-aid rules.

Monte Paschi, which has dropped 70% this year, has sold 2 billion euros of bad loans since 2015, toward a goal of 5.5 billion euros in such disposals by 2018. Chief Executive Officer Fabrizio Viola said in May that he is considering accelerating the effort. Clearly, the ECB’s insistence that the bank offload more than €9 billion over this time period is not doing well with the company’s shareholders, as well as those of other Italian banks who are looking at Italy’s bad debt load of €360 billion and wondering who is next.

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Nigel Farage, UKIP leader and passionate advocate for the UK to leave the European Union, announced unexpectedly today that he is stepping down as party leader, just days after he led a successful, and historic, campaign to Leave the European Union. Speaking in Westminster, Farage said the Brexit referendum was about Britons taking their country back, and having succeeded at that, Farage now “wants his life back.” His resignation completes the recent chaos in UK politics which has seen both the Conservative and Labour parties scramble to find new leadership in the aftermath of the Brexit vote.

Farage has resigned before, in May 2015, following the U.K. general election. On that occasion he returned a few days later when the party rejected his resignation. This time however, he said, “I won’t be changing my mind again, I can promise you.” Farage said his reason for getting into politics was to get Britain out of the European Union, and with that achieved, “I feel I’ve done my bit.”

He said UKIP had “clearly established ourselves as the third political force in this country,” and should the Brexit exit negotiations not prove satisfactory “then in 2020 watch this space.”

“I have never been, and I’ve never wanted to be a career politician. My aim in being in politics, was to get Britain out of the European Union. That is what we voted for in that referendum two weeks ago, and that is why I now feel that I’ve done my bit, I couldn’t possibly achieve more than we managed to get in that referendum, and so I feel it’s right that I should now stand aside as leader of UKIP.”

 

“I will continue to support the party, I will support the new leader. I will watch the renegotiation process in Brussels like a hawk, and perhaps comment in the European Parliament from time to time. I’m also very keen to help the independence movements that are springing up in other parts of the European Union because I’m certain of one thing, you haven’t seen the last country that wants to leave the EU.“

Nonetheless he said that he “will watch the renegotiation process in Brussels like a hawk, and perhaps comment in the European Parliament from time to time.” The move sees UKIP, the United Kingdom Independence Party, join the Labour and Conservative Parties in looking for a new leader.

“During the referendum campaign I said ‘I want my country back’, but what I’m saying today is ‘I want my life back’, and it begins right now – thank you.”

In a statement, Farage said that UKIP is in a good position, and its best days  may be yet to come.

I have decided to stand aside as Leader of UKIP. The victory for the  ‘Leave’ side in the referendum means that my political ambition has been  achieved. I came into this struggle from business because I wanted us  to be a self-governing nation, not to become a career politician.

 

UKIP is in a good position and will continue, with my full support to  attract a significant vote. Whilst we will now leave the European Union  the terms of our withdrawal are unclear. If there is too much  backsliding by the Government and with the Labour Party detached from  many of its voters then UKIP’s best days may be yet to come.

 

I would like to take this opportunity to thank you the membership for  your extraordinary support and generosity over the many years, I could  not have done it without you.

Thank you to all my supporters in @UKIP and beyond. Delighted with the result we fought for so long to achieve. #BrexitBritain

— Nigel Farage (@Nigel_Farage) July 4, 2016

One of Farage’s main internal critics, and UKIP’s only MP, tweeted his simple response:

????

— Douglas Carswell MP (@DouglasCarswell) July 4, 2016

We are confident that Farage’s two European bureaucrat archnemeses, Martin Schultz and Jean-Claude Juncker share the sentiment.

via http://ift.tt/29iLRcx Tyler Durden

In today’s US holiday-impacted session, the biggest overnight story was the dramatic surge in precious metals, which saw silver briefly soar above $21 following a Chinese short squeeze sending the metal as much as 7% higher overnight, its biggest one day gain since December 1, 2014. As we reported overnight, silver touched a two-year high and gold rallied for a fourth day after the Brexit vote spurred demand for havens. The catalyst is familiar: speculation central banks in some of the world’s leading economies will step up monetary stimulus in the wake of Britain’s decision to leave the European Union.  The commodity complex helped push the Shanghai Composite higher by 1.9%, closing the SHCOMP just shy of 3,000, the highest since May.

“Investment demand for metals continue on expectations of a dovish Fed, growth worries and central bank policies putting more and more sovereign bonds into negative yields,” said Ole Hansen, head of commodity strategy at Denmark’s Saxo Bank A/S by e-mail. “The policies of the ECB and BOJ are already ultra loose and further stimulus could be added following the Brexit vote.”

Brent crude held above $50 a barrel as Nigerian militants threatened more supply disruptions, while nickel climbed to an eight-month high after the Philippines announced plans to audit all mining operations. Miners in the Stoxx Europe 600 Index traded at the highest level since April, while automakers and builders led the industries lower. Currencies of commodity producers Australia, Canada and New Zealand were the best performers among major peers. The Shanghai Composite Index climbed the most since May.

Meanwhile, things for European, and especially banks, have turned from bad to worse, with Italy’s FTSE MIB Index falling 0.9%, the biggest decline among western-European markets, as Banca Monte dei Paschi di Siena SpA and Banca Popolare dell’Emilia Romagna SC lost more than 3 percent. The catalyst was news that the ECB asked Monte Paschi to draw up a plan for tackling its bad-loan burden, yet another confirmation the nation’s banks are under pressure to bolster their finances. As a result European equities turned lower this morning, having reversed their opening gains as Italian banks drag the region lower amid dampened hopes of further state aid.

The Stoxx 600 slipped 0.2 percent, after posting is biggest four-day rally since February. The volume of shares changing hands was about 20 percent lower than the 30-day average, with the U.S. market closed for the Independence Day holiday. S&P 500 Index futures gained 0.2 percent. The U.K.’s FTSE 100 Index was little changed. The gauge of megacaps is close to entering a bull market, boosted by a weaker pound and a rally in miners of precious metals. Fresnillo Plc and Randgold Resources Ltd. climbed more than 4 percent on Monday.  The MSCI Emerging Markets Index rose 0.5 percent to the highest since April. It is up 6.1 percent in five days, the best performance for the period since March 7.

The US is closed today with all floor exchanges, the CME, CBOT, NYSE and NYMEX dark.

Market Snapshot

• S&P 500 futures up 0.2% to 2101
• Stoxx 600 down 0.2% to 331
• US 10-yr yield unch at 1.44%
• Nikkei up 0.6% to 15,776
• SHCOMP up 1.9% to 2,989
• Dollar Index unch at 95.73
• FTSE down 0.1% to 6,568
• EURUSD down 0.14% to 1 1123
• USDJPY up 0.1% to 102.62
• WTI Crude futures up 0.4% to $49.15
• Brent Futures up 0.5% to $50.58
• Gold spot up 0.7% to $1,351
• Silver spot up 4.0% to $20.27

Looking at regional markets, Asian equity markets traded positive across the board following the biggest weekly YTD advance in the S&P 500 and Dow Jones last week. Nikkei 225 (+0.6%) shrugged off its initial weakness as JPY pared some of its strength, while ASX 200 (+0.6%) has also rebounded, led by materials after continued gains across metals in which silver rallied above the USD 21/oz level for the first time since July 2014. Elsewhere, Chinese markets conformed to the positive sentiment with the Hang Seng (+1.3%) seeing strength as it played catch up to last Friday’s gains and the Shanghai Comp (+1.9%) benefiting from another firm liquidity injection. Finally, 10yr JGBs traded in negative territory amid the improvement in appetite for riskier assets, although 2yr and 20yr yields declined to fresh record lows while today’s BoJ operations were for a paltry JPY 390b1n in government debt.

In Europe, equities are lower this morning, having reversed their opening gains as Italian banks drag the region lower amid dampened hopes of further state aid. This comes after reports that an Italian official has denied that PM Renzi is to challenge the EU and intervene in the banking sector, as such the FTSE MIB has been the notable underperformer. Additionally, Monti Paschi (-7%) plunged to a record low after the ECB demanded that the company reduced its holding of NPLs. However, price action has been contained with volumes lighter as many participants are away for the US Independence Day holiday. While in terms of credit markets, Bunds are a touch softer with the price remaining in close proximity to the 167.00 level.

In FX, The Australian, Canadian and New Zealand dollars appreciated at least 0.3 percent, buoyed by the pickup in commodity prices. The British pound was little changed versus the dollar, after Chancellor of the Exchequer George Osborne floated the possibility of a lower corporate tax rate and before Bank of England Governor Mark Carney outlines the available macroprudential tools on Tuesday. The currency tumbled 8.1 percent in June, the most since 2008, as the U.K.’s decision to leave the EU shocked investors and triggered political upheaval in the country. Japan’s yen weakened 0.1 percent to 102.60 per dollar. It declined 0.3 percent last week as BOJ Governor Haruhiko Kuroda said more funds could be injected into the market should they be needed. The haven currency touched 99.02 in the wake of the vote for Brexit, its strongest level since 2014.

In Commodities, silver soared as much as 7 percent, its biggest intraday gain since 2014, before paring its advance to 3 percent as it traded at $20.3404 at 11:28 a.m. in London. Holdings in silver-backed exchange traded funds expanded to a record last month, and assets in gold ETFs are now at the highest since August 2013 as investors bet on a continued low-yield environment. Gold bullion rose 0.7 percent on Monday. “Brexit has created all sorts of fear and loathing across markets,” Commonwealth Bank of Australia analysts, including Tobin Gorey, wrote in a July 4 note, adding that investors are cutting back on risk. “Gold and silver, as we would expect, benefit the most from safe-haven demand flows.”

Brent crude added 0.5 percent to $50.59 a barrel. A militant group operating in Nigeria’s southern oil-producing region said it attacked five crude-pumping facilities, dealing a blow to the government’s effort to enforce a cease-fire. Nickel, which is used in the production of stainless steel, rose 3.6 percent to more than $10,000 a ton in London. It surged 5.6 percent on Friday after the Philippines announced its audit plans, threatening to curb supplies from the southeast Asian country. Less than a third of miners operating in the nation are compliant with international standards for responsible mining, according to the government. Rubber futures climbed 3.7 percent in Tokyo, buoyed by shrinking stockpiles after rains disrupted production in Thailand.

Bulletin Headline Summary from RanSquawk and Bloomberg

• European equities are lower this morning, having reversed their opening gains as Italian banks drag the region lower amid dampened hopes of further state aid
• In FX, we have seen some decent movement in the majors, led by the AUD which has recovered swiftly from the weekend gap lower on the back of the tight election results in Australia
• Looking ahead, there are no major standouts on the data slate

US Event Calendar

• July 4 Holiday

DB’s Jim Reic conludes the overnight wrap

Welcome to Amexit Day, more latterly know as US Independence Day. Happy holidays to our friends stateside. Wherever you are you may have noticed that the EMR has been coming out a bit earlier recently. You may have thought that this was due to extra diligence and professionalism around the Brexit saga. You would be slightly correct but the truth is that it has more to do with a ‘murder’ of crows which is an apt name for a group of them given what they are driving me towards. Every morning at 4am we get woken by crows pecking very aggressively at our windows. After a few days of bad sleeps we researched into it and found that it is currently mating season and a period that the male crows get incredibly territorial. They think the reflection in the window is a love rival and they try to fight with it. They also produce an awful lot of waste whilst doing so. My wife who has far better hearing than me wakes immediately and curses as she’s also been up with Maisie previously. She then typically wakes me to ask if I can hear it!! I usually say no I can’t but I can now that you’ve woken me. Anyway on the advice of the internet we yesterday bought a scarecrow owl that bobs up and down in the wind and also some reflective tape that flutters and apparently scares them.

Anyway I’ll let you know how that goes on Wednesday as today I’m having knee surgery so will leave the reigns fully to Craig tomorrow while I recover. The irony is that as I haven’t been able to do much cardio in recent weeks, I’ve gone back to doing upper body weights to try to stay fit. This weekend I’ve started getting a minor dislocation sensation in my shoulder similar to what happened before I had shoulder surgery 3 years ago. I’m desperately hoping it doesn’t develop into the same problem again. I am falling apart.

Financial markets were certainly more robust last week post Brexit than my failing body. Indeed despite the heavy declines across markets last Monday, markets roared back in style from Tuesday onwards as the focus quickly turned over to the Central Banks reaction function. In fact last week saw a number of European equity markets record their best week in a month. The Stoxx 600 (+0.72% on Friday, +3.19% over the week) had its best week since the end of May along with the DAX (+0.99%, +2.29%) while even more impressively the IBEX (+1.29%, +6.18%) had its best weekly return since October last year. Amazingly the FTSE 100 (+1.13%, +7.15%) had its best one-week gain since 2011 and you’d have to go back to 2008 to find the last time that the index recorded a better four-day gain (Tuesday-Friday). Clearly alot of that has to do with Sterling (-0.33%, -3.01%) which is hovering around 1.3285 this morning although still hasn’t quite got down to those Monday lows. Meanwhile across the pond the S&P 500 (+0.19%, +3.22%) – while enduring a slower session on Friday ahead of the long weekend – still had its best weekly gain this year.

It was much the same in credit markets too. In Europe the iTraxx Main (-5bps Friday) and Xover (-22bps Friday) closed the week just 4bps and 26bps off their pre-referendum levels on the 23rd. The peripherals were the standouts in the sovereign bond market where 10y yields in Italy, Spain and Portugal closed the week 32bps, 48bps and 33bps lower respectively. 10y Gilt yields were 22bps lower over the week and the Swiss yield curve turned completely negative – along with a number of other eye watering record lows being achieved. Commodity markets also joined in the global rally. Gold was up +1.32% over the week, Silver +11.35%, Copper +4.53%, Nickel +10.53% and WTI Oil +2.83%.

One market which is struggling to keep up is European Banks however. The Euro Stoxx Banks index was down -0.88% last week and is nearly 19% down from its pre referendum levels. Italian Banks are at the heart of that weakness with the likes of Unicredit, Intesa, Banco Monte dei Paschi and UBI down -9.78%, -3.44%, -15.79% and -6.11% respectively last week. There’s been plenty in the press about possible liquidity guarantees and recaps for Italian Banks and it looks like this one still has plenty of room to run. The FT ran a story over the weekend suggesting that Italy PM Renzi is set to inject public funds into the banking system should it come under severe systematic stress, and so break the bail-in principles of EU regulation. While UK politics has dominated headlines for the last few weeks it feels like the health of Italian Banks could well takeover in the near term.

The Brexit chat should reduce this week whilst never being too far beneath the surface. As the week builds Friday’s payrolls will also loom large. We should get some payback from last month’s weak 38k headline print and 59k downward revisions to prior months. DB don’t expect a return to prior levels though and are at 155k. Consensus is at 175k while expectations are also for the unemployment rate to creep up one-tenth to 4.8% (DB at 4.9%).

After last month’s payroll report and Brexit, the Fed have been priced out until October 2018 now (the probability of a December hike this year is 12% and a December 2017 hike is 45%) and regular readers will know that we’ve always felt the Fed will struggle to raise rates this cycle. However the pattern has always been under and over pricing the risk and perhaps the market has got a little complacent about the Fed again. If Brexit chat eases for a while and the data is ok, there will be a number of Fed members who start getting hawkishly excited again. So watch out for this, even if we think that they will still struggle to raise rates this cycle.
In terms of the weekend newsflow and unlike in previous weeks there’s not actually a great deal to report. It’s been largely politics orientated again and the biggest perhaps is the news that the UK Chancellor George Osborne is considering a cut in the corporate tax rate to less than 15% (from 20% now) in a bid to deter businesses from leaving the UK.

Glancing at our screens, markets in Asia are opening the week on the front foot and largely following the lead from the European and US sessions on Friday. Bourses in China are leading the way with the Shanghai Comp currently +1.33% and CSI 300 +1.07%, while the Hang Seng (+1.54%) has also risen strongly. Elsewhere the Nikkei (+0.44%), Kospi (+0.35%) and ASX (+0.32%) are also up. Meanwhile the Aussie Dollar has pared early losses after the Australian General Election over the weekend failed to yield a clear winner on election night.

Moving on. This morning we published our latest HY monthly where we’ve highlighted the orderly nature in which markets have handled the outcome of the UK referendum on EU membership. Overall there is evidence that both GBP HY and generally domestically focused UK names have been under pressure since the referendum. Whether this is a trend that continues will probably depend on the ultimate outcome for the UK economy. Near-term there might be some respite for the relative underperformance purely due to a lack of information. Ultimately the Conservative leadership contest and subsequent negotiations with the EU are likely to drive sentiment. See the report from Nick Burns just before this one.

Just when you thought we were done with politics, one interesting development on Friday came in Austria with the news that the Austrian Constitutional Court has decided in favour of the FPO contestation and annulled May 22nd’s election result with a likely new run-off presidential election to be held in autumn according to our European economists. Significantly, our colleagues note that it seems likely that the new election will be neck-and-neck again. As a result political uncertainty has resurfaced as the far right wing populist Hofer again has the chance to become Austria’s president. He had previously caused some uproar with his statement that if he was elected president there would be early parliamentary elections and pointing to a referendum on EU membership (Oxit) in the event EU policy goes in the wrong direction. One to keep an eye on.

The economic dataflow on Friday in the US was a bit of a mixed bag. On the positive side the ISM manufacturing reading for June rose 1.9pts to 53.2 (vs. 51.3 expected) which was the best reading since February last year. In the details the employment component rose above 50 (+1.2pts to 50.4) for the first time since November while new orders, production and new export orders also rose. On the negative side however construction spending in May was unexpectedly weak (-0.8% mom vs. +0.6% expected) while total vehicle sales in June declined to an annualized 16.6m rate (vs. 17.3m expected) from 17.4m in the prior month.

Meanwhile in Europe there was a relatively positive read-through from the final manufacturing PMI revisions for June. The Euro area reading was revised up two-tenths to 52.8 while readings for Germany and France were revised up to 54.5 (+0.1pts) and 48.3 (+0.4pts) respectively. The PMI for the UK came in at 52.1 (vs. 50.1 expected) which was a decent increase on the 50.4 in May although it remains to be seen how much of an effect the referendum at the end of the month played a part.

There was a little bit of central bank speak on Friday too. The Cleveland Fed’s Mester (hawkish) said (unsurprisingly) that it is too early to judge the Brexit impact on the US which was a view also shared by Vice-Chair Fischer (centrist to slightly dovish), with Fischer also adding that recent data since the weak payrolls print last month ‘has done pretty well’.

Away from the data we’ve got a number of central bank speakers scheduled through the week. Over at the Fed Dudley is due on Tuesday and Tarullo on Wednesday. The BoE’s Carney will publish the BoE financial stability report tomorrow and the BoJ’s Kuroda is due to speak on Thursday. The latest twist in UK politics sees the Conservative Party begin the process of electing a new leader on Tuesday.

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After last night’s massive suicide bombing in Baghdad which killed over 100, and which ISIS took responsibility for, we doubt the Islamic State will be just as quick to take credit for tonight’s latest terrorist attempt, this time in the Saudi Arabian city of Jeddah, where a suspected suicide bomber was killed in front of the US consulate.

As the Saudi Gazette reports, security authorities have raised the alert in Jeddah to the maximum after a suicide bombing attempt in which an individual blew himself up inside a car in front of the US Consulate in Jeddah.

#BreakingNews Suicider blown up his explosive belt in front of #USA consulate in Jeddah.. #Saudi http://pic.twitter.com/ZjFqUdmHfc

— Rami (@RamiAILoIah) July 4, 2016

A photo circulated today of suicide bomber near US consulate in Jeddah shows man was shot before blowing himself up. http://pic.twitter.com/gMcUFcxpNT

— Wael Mahdi (@WaelMahdi) July 4, 2016

According to Sabq sources two diplomatic security personnel were injured in the blast. They were rushed to the hospital. Security forces in Jeddah surrounded the area and enforced a lockdown where the consulate is located. Security forces are following up on the situation.

BBC adds that two policeman were reportedly injured in the incident and the attacker is said to be dead. The attack came in the early hours of US Independence Day. The Jeddah consulate was the scene of a militant attack in 2004, which left nine people dead.

The attack coming on July 4 is hardly a coincidence.

For now, the market is not reading too much into it, with WTI up just 2 cents; if anything it is silver which is surging which as of moments ago just hit limit up in Shanghaim, surging by 6%.

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Submitted by Laurence Vance via LewRockwell.com,

“Older men start wars, but younger men fight them.” ~ Albert Einstein

 

“Older men declare war. But it is the youth that must fight and die.” ~ Herbert Hoover

 

“I’m fed up to the ears with old men dreaming up wars for young men to die in.” ~ George S. McGovern

One hundred years ago – on July 1, 1916 – thousands of young men died after older men decided, again, to send them to war. On the first day of the Battle of the Somme, the British army suffered 57,470 casualties, of which 19,240 were deaths, the French had 1,590 casualties, and the Germans had over 10,000. It was the single greatest day for casualties in British military history. By the time the Battle of the Somme ended in November, the British had around 420,000 casualties, the French about 200,000, and the Germans about 500,000.

One would think that when almost 20,000 of your young men in the prime of their life die in one battle on one day that the British would simply say “enough is enough” and just tell the army to quit fighting and go home. But no, the British army continued to execute men for desertion like the hundred or more that suffered that fate in the two years before the Battle of the Somme.

It is senseless slaughter like the Battle of the Somme that led Ernest Hemingway, who was an ambulance driver in Italy toward the end of World War I, to say:

They wrote in the old days that it is sweet and fitting to die for one’s country. But in modern war there is nothing sweet nor fitting in your dying. You will die like a dog for no good reason.

 

Never think that war, no matter how necessary, nor how justified, is not a crime.

Over 115,000 American soldiers would go on to die like dogs for no good reason after the United States foolishly and senselessly entered World War I in April of 1917. The thousands of U.S. troops who in more recent times died in Iraq and Afghanistan likewise senselessly died in vain and for a lie.

How do you prevent such senseless slaughter? How do you stop young men from dying in vain? How do you prohibit young men from dying for a lie? How do you stop making widows and orphans? How do you thwart young men dying like dogs? How do you stop young men from dying for no good reason? How do you end the war once and for all?

It is an uphill battle.

Governments, presidents, politicians, and military officers will continue to send young men to fight and die.

The military establishment will continue to want more money and more weapons of war to try out.

Legislatures will continue to fund bloated military budgets.

Defense contractors—merchants of death—will continue to lobby for more armaments, more military interventions, and more wars.

Uber-patriots, neocons, armchair warriors, just war theorists, progressive hawks, reich-wing nationalists, red-state fascists, pro-lifers for mass murder, and bloodthirsty conservatives will continue to cheer on the military.

Christian Coalition moralists, Old Testament Christians, evangelical warvangelicals, theocon Values Voters, imperial Christians, nuclear Christians, Religious Right warmongers, God and country Christian bumpkins, sniper theologians, and members of the Christian axis of evil—all claiming to worship the prince of peace—will continue to support the troops no matter what.

Some libertarians will continue to write me and say that although they agree with everything I say about the follies of U.S. foreign policy and military interventions none of it is the fault of the troops and I should quit criticizing them even though they enlisted in the U.S. war machine of their own free will.

So, how do you end the war once and for all? Easy. Young men simply need to stop joining the military. It is just as Einstein said:

Nothing will end war unless the people themselves refuse to go to war.

The pioneers of a warless world are the youth who refuse military service.

“War has never been possible,” writes Robert Meagher in Killing from the Inside Out: Moral Injury and Just War, “ unless men have been willing to kill each other and, while they’re at it, possibly to be killed.” And as I have said over and over again: you can’t have a war without soldiers. It is only by young men not enlisting or refusing to enlist that war can be ended once and for all.

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When GDP is falling and the global economy is weak, there are normally many let's say, "out of the box" ideas on how to stimulate growth again – aside from central planners tripping over each other to see who can print money the fastest that is.

For China, one would assume that more ghost cities are being built, or new projects are being constructed in order to stop Beijing from sinking, but one project that has taken place that many may not have known about is the construction of the world's largest radio telescope.

As RT reports, China has now completed construction on the world's largest radio telescope. The Single-Aperture Spherical Radio Telescope (FAST) as it is known, is an enormous dish made up of 4,450 reflector panels with a diameter of a half a kilometer, which is larger than the previous record holder, Puerto Rico's Arcibo Observatory.

It was completed in southwestern China's Guizhou Province on Sunday, when the last reflector was fitted into a natural bunker, which is situated among the mountains of Pingtang County.

The task of the telescope? According to RT, it is to be used to look for intelligent life in deep outer space. Once operational, FAST will be able to detect radio signals from as far away as one thousand light years – evidently that's where the aliens are.

Work began on the project in March of 2011, and was completed Sunday, ahead of the originally planned September date. The project displaced some local residents, who were given $1,800 in compensation and moved to a newly built accommodation.

In total, RT reports that the project cost just over $105 million – while it isn't quite the Death Star we were looking for, this is an excellent start.

Enjoy…

via GIPHY

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Submitted by Tho Bishop via The Mises Institute,

At its best, Independence Day is a celebration of American secession and a testament to individual liberty. At its worst, Independence Day is still a day where government offices are closed, American grills are lit and the evening sky is full of fireworks, which is still pretty good (at least in my subjective value.)

Unfortunately the travel before and after the 4^th of July is a different story, with it widely considered one of the worst travel days of the year. While the desire to take advantage of the holiday to enjoy friends and family is a natural product of humans being inherently social creatures, the degree to which this congestion leads to headache and misery rests solely with the institution responsible for them during the rest of the year – the government.

The Curse of Socialist Highways

The question “who will build the roads?” has become such a statist cliché that it’s perhaps the only libertarian internet meme bigger than “taxation is theft” and Ron Paul informing us that “it’s happening.” It has earned that designation because the entire idea of roads and highways has become so synonymous with government that even Joe McCarthy voted for this form of socialism.

Of course, the purpose for the current American interstate system had nothing to do with consumer demand and everything to do with military transportation throughout the country. While some may defend such a project on that basis, it shouldn’t be a surprise that interstates designed to transport tanks and weapons aren’t always the best at facilitating family travel.

As Walter Block has long argued, much of the congestion on these highways is a direct result of their being in the control of government and therefore being unable to have proper pricing. In his article Congestion and Road Pricing, Dr. Block rebuts various arguments defending public management of highways, as well as government-based solutions (such as automobile bans that were in vogue at the time). Block identifies how free market solutions would solve the problem of congestion, such as enabling “travel entrepreneurs” to design and fund higher-cost toll roads for travelers who don’t mind paying extra for a quicker drive. Not only would such a system obviously cut down the congestion for these “luxury drivers”, but their absence from more commonly used roads means less congestion for those who don’t use them. 

We have seen this play out when governments have tried to imitate this highway pricing mechanism with the construction of various higher-cost toll roads across the country. While so called “Lexus lanes” do offer alternatives to traditional highways and thus make some impact on congestion, they still suffer from the same problem inherent with government infrastructure in its lack of real economic calculation. Government allowing taxi’s to charge more when picking up from airports isn’t a replacement for Uber surge pricing, and the USPS charging more for overnight deliver isn’t a replacement for Fed Ex.

While there are a few examples of genuine private roads in America — the Orchard Pond Parkway, Florida’s first privately funded toll road, opened up earlier this year – as long as government roads enjoy the privilege of being subsidized by gasoline taxes over private investment, the highways system will continue to be commanded with all the efficiency of Soviet central planners.

It’s also worth noting the irony that this government project which is often held up by the left as an example of the necessity of government, is also the greatest hindrance to the progressive desire to eliminate gas-burning cars. As libertarians have long pointed out, the Federal highway project was a massive government subsidy to the automobile industry at the expense of alternative travel options – including trains and airplanes. Of course since the government has its own ways of controlling both rails and airspace, we’d likely be suffering from a whole other set of government-caused issues anyway.

Government’s Unfriendly Skies

Speaking of air travel, we would be amiss without highlighting some of the ways government has destroyed the fun of flying.

Some of these are obvious, especially given the number of headlines this spring highlighting how the TSA’s security theater had created unprecedented wait times throughout the country. American Airlines alone reported having 70,000 missed flights due to TSA complications. Even more appalling are the numerous examples of the TSA failing to treat customers with basic human dignity, such as the most recent example of a disabled 19-year old left bloodied after trying to go through airport security in Memphis.

Americans have good reason to be even more livid at these issues than those caused by highway congestion. While government roads have their share of problems, they will at least manage to get you where you need to go. The TSA, on the other hand, doesn’t even succeed at achieving its stated mission. If there is a silver lining to be found in the TSA’s spectacularly incompetence, it’s that the performance has been so abysmal that even government-managed airports are having to seriously consider alternatives.

Subsidizing Terrible Airlines

While the TSA represents an obvious example of government ruining flying, there are a variety of others ways government can ruin air travel. While it may be difficult to rally the public around Murray Rothbard’s calls to abolish the FAA at this time, another program that should infuriate tax payers is the Essential Air Service program. While billed as a way to ensure airlines maintain flights in “underserved” rural communities, in practice it serves as a way for poorly operated airlines to make money in spite of how well they serve their clients.

One airline that received near $18.5 million dollars is Silver Airlines, which recently left my hometown of Panama City Beach, FL and is perhaps the worst company I’ve ever done business with.

During their time in PCB, my family attempted to fly with them four different times for eight different flights. Of those eight times, only two operated without problem. Two flights were cancelled without any notice and the other four suffered delays ranging from three-six hours. While delays and flying weight concerns are part of the operational hazard of flying, Silver Airlines compounded the issue with poor customer service and vouchers that did not adequately cover the expenses of delay. An attempt to resolve these complaints with company management is directed to an automated system as useful as the TSA.

Ludwig von Mises described capitalism as “a social system of consumers’ supremacy.”

As such, following our last experience with Silver, my family agreed to never use them again, the taxes we pay are still going to pad their bottom line.  While Silver’s abysmal record is not an indictment on all the other airlines that utilize the EAS program, it is an example of what happens when government intervention serves to enrich terribly operated companies regardless of consumer demand.

So if you find yourself wasting hours stuck in holiday traffic or at the airport this 4^th of July, remind yourself that the solution to your headache can be found within the reason for this particular season. If we were to claim independence from the modern-day royalty of the beltway, the markets will ensure better holidays in the future.

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