As we reported yesterday, President Donald Trump is receiving flack from hysterical liberals for reportedly advising CIA Director Mike Pompeo to meet with former senior NSA official Bill Binney, whom the media has labeled a conspiracy theorist for his belief that Russia wasn’t responsible for hacking the DNC – or at least, if it was, it was the work of a deep-cover agent – because the files, according to Binney, were manually loaded onto a thumb drive, meaning the theft was likely the work of a disgruntled insider.

Binney discussed the meeting during an appearance on NBC, where he confirmed that Trump was probably made aware of his theory by watching one of his appearances on Fox News.

"He's trying to find some factual evidence," said Bill Binney, a former code-breaker at the National Security Agency.

Binney, a widely respected NSA whistleblower, left the agency in 2000 and has made claims that the NSA is capturing and storing nearly every US communication.

Binney told NBC News that Pompeo informed him that the CIA director took the meeting at the urging of the president.

Mike Pompeo

In a statement, a CIA spokeswoman did not dispute that, but declined to comment.

“The Director stands by and has always stood by the January 2017 intelligence community assessment," on Russian election interference, spokeswoman Nicole de Haay said.

She added, “The director has been adamant that CIA officers have the time, space and resources to make sound and unbiased assessments that are delivered to policy makers without fear or favor."

The intelligence community released a multilateral report in January 2017 concluding that Russia had sought to interfere in the 2016 election, which was won by Trump in a historic upset. One of the tactics, the intelligence community alleged, was the hack of the DNC, which was a massive public relations embarrassment for Clinton and eventually led to the resignation of former DNC Chairwoman Debbie Wasserman Schultz.

Trump has repeatedly criticized the intelligence community and claimed its conclusion is unfounded. And Pompeo, a former Army officer and Harvard Law School graduate who gives Trump his intelligence briefing nearly every day, is suspected of kowtowing to Trump in his tepid approach to the issue.

Last month, the CIA had to correct Pompeo's erroneous statement that the intelligence assessment found that the Russian interference campaign did not alter the outcome of the election. No such conclusion was made.

NBC pointed out that it is extremely unusual for a CIA director to meet with someone like Binney, who for years has accused US intelligence agencies of subverting the constitution and violating the civil rights of Americans. However, Binney – while a controversial figure in the US – has been praised abroad as a whistle blower and truth teller.

However, the meeting to discuss the narrative that directly contravenes the findings of the US intelligence community was so productive that Pompeo is already arranging further meetings between NSA and FBI officials and Binney to discuss his analysis. Binney said two unnamed CIA analysts accompanied Pompeo during the meeting at CIA headquarters.

Binney reportedly also raised the death of DNC staffer Seth Rich as a suspicious, given its proximity to the release of the hacked documents. There has been speculation that Rich was the one who leaked the emails.

Binney said he did not discuss with Pompeo his longstanding allegations that U.S. intelligence agencies have been acting illegally. Binney said he voted for Trump, because he considered Democrat Hillary Clinton "a war monger.

via http://ift.tt/2yJXfNm Tyler Durden

Authored by Michael Snyder via The American Dream blog,

Everybody agrees that healthcare costs are way too high.  Back in 1960, healthcare spending accounted for approximately 5 percent of GDP, and by 2020 it is being projected that healthcare spending will account for 20 percent of GDP.  And when you break those numbers down into actual dollars, they become even more staggering.  Back in 1960, an average of $146 was spent on healthcare per person for the entire year, but today that number has skyrocketed to $9,990.  On a per capita basis, we spend far more than anyone else in the world on healthcare.

  In fact, we spend almost twice as much as most other industrialized nations on a per capita basis.  Something has gone terribly wrong, and we desperately need to get this fixed.

Just between the years of 1996 and 2013, our spending on healthcare rose by a whopping 900 billion dollars, and it is estimated that healthcare spending now accounts for nearly one-fifth of the entire U.S. economy.  The following comes from the Daily Mail…

US healthcare spending rocketed $900 billion between 1996 and 2013, staggering new data reveal.

 

Americans spend more money on healthcare than any other population, and increasingly so.

 

By 2013, total healthcare spending hit $2.1 trillion, according to the study published today in the Journal of the American Medical Association. The researchers say that figure has now likely soared to more than $3.2 trillion, which equates to 18 percent of the country’s economy.

So why is healthcare spending going up so much?

Well, the truth is that our population is aging, obesity is certainly on the rise, and medical care has become much more expensive.  In addition, we should acknowledge there are a couple of other major factors that we should acknowledge as well…

First, the United States relies on company-sponsored private health insurance. The government created programs like Medicare and Medicaid to help those without insurance. These programs spurred demand for health care services. That gave providers the ability to raise prices. Other efforts to reform health care and cut costs raised them instead.

 

Second, chronic illnesses, such as diabetes and heart disease, have increased. They are responsible for 85 percent of health care costs. Almost half of all Americans have at least one of them. They are expensive and difficult to treat.

 

As a result, the sickest 5 percent of the population consume 50 percent of total health care costs. The healthiest 50 percent only consume 3 percent of the nation’s health care costs.

Healthcare costs are only expected to rise even more in the years ahead, and so we desperately need to reform our system.

Because as it is, health insurance premiums are becoming completely unaffordable.  According to CNBC, health insurance premiums for plans purchased through an employer will be higher than ever next year…

Next year, employers expect to spend $8,527 per enrolled employee, according to data form the National Business Group on Health. Meanwhile, workers themselves will contribute an average of $2,752 toward their premiums.

And for those that have to purchase their own health insurance, things are even worse.  In fact, it is being projected that the average rate increase for Obamacare plans will be 37 percent in 2018.

When I get elected to Congress, I am going to make repealing Obamacare and fixing our broken healthcare system one of my highest priorities.

We need a system that is focused on the relationship between doctors and patients.  Compared to the rest of the world, we spend way too much on administrative costs, and we desperately need legal reform.  I would like to see Congress legalize the kind of association buying groups that Rand Paul has been proposing, and I would like to see exciting new models such as direct primary care used much more extensively.

There is no way that we should be spending nearly twice as much on healthcare as everyone else in the industrialized world on a per capita basis.  We must streamline the system, and we need to start using some common sense.

Unfortunately, common sense is in short supply in Washington D.C. these days, but hopefully we can start to change that.

*  *  *

Michael Snyder is a Republican candidate for Congress in Idaho’s First Congressional District, and you can learn how you can get involved in the campaign on his official website. His new book entitled “Living A Life That Really Matters” is available in paperback and for the Kindle on Amazon.com.

via http://ift.tt/2ArCCmp Tyler Durden

Hours before President Donald Trump landed in Beijing earlier today, news of a potential diplomatic crisis in the making emerged when the Wall Street Journal and other media outlets reported that three UCLA college basketball players had been detained in China for shoplifting.

While authorities wouldn’t confirm if the three players – allegedly including high-profile freshman LiAngelo Ball, a member of a prominent college-basketball family – were detained in China, WSJ managed to confirm the news with several sources, including the staff at the hotel where the  Bruins, ranked No. 21, were staying before beginning their college basketball season Saturday in Shanghai against Georgia Tech.

Sources said the other two players detained were Cody Riley and Jalen Hill.

UCLA has acknowledged the incident.

LiAngelo Ball

“We are aware of a situation involving UCLA student-athletes in Hangzhou, China,” UCLA said in a statement. “The university is cooperating fully with local authorities on this matter, and we have no further comment at this time."

The team was staying at a hotel  in Hangzhou, where a representative of the team said:  “We are not taking questions right now."

Details on the alleged shoplifting were unclear, though ESPN reported that the incident occurred at a Louis Vuitton store. A spokeswoman for the luxury brand said by email: “There is an investigation going on at the moment and we are not able to further comment."

It was unclear where the three players are, or if they’re in the custody of Chinese authorities. According to WSJ, Hangzhou police have been involved in an investigation that began Monday and included the questioning of three players at a station-house but they, along with a team staff member, have returned to their hotel in the city as evidence is being gathered, according to a person in the news department of the local Public Security Bureau. She said the three aren’t formally under arrest. “We didn’t limit their personal freedom."

Three Georgia Tech players were questioned by local authorities at their hotel, according to a Georgia Tech spokesman, and it was determined they “were not involved in the activities being investigated.” Those players have resumed their activities with the team.

Speaking in Beijing, a Chinese Foreign Ministry spokeswoman, without confirming details on the matter, said “China will handle this case in accordance with the law and ensure the legitimate rights and interests of the people involved."

A US State Department official told WSJ via email “We are aware of reports of three U.S. citizens arrested in China. We stand ready to provide consular assistance for U.S. citizens. Due to privacy considerations we have no further comments."

A representative of the Hyatt Regency Hangzhou hotel said the UCLA team had stayed there and three players were detained by local police. She said she had no further information.

The two teams were in the country as guests of Hangzhou-based Alibaba Group Holding Ltd. and its billionaire co-founder, who recently bought into the Brooklyn Nets professional basketball team. Alibaba has since 2015 sponsored an annual regular-season Pacific-12 Conference basketball game in Shanghai.

While the incident may not have received so much attention under normal circumstances, the timing – coinciding with Trump’s first official visit to China – and Ball’s celebrity have become complicating factors, as WSJ explains.

Lonzo’s rise to stardom was accompanied—and in the eyes of many, superseded—by the brash outspokenness of LaVar Ball, his father, who entertained and infuriated fans as he loudly promoted his family, himself and their brand. He became a celebrity in his own right by making the boldest, headline-grabbing claims to anyone who would listen. He said he could have beaten Michael Jordan in 1-on-1 and that his son would be better than Golden State Warriors superstar Stephen Curry.

 

These theatrics combined with Lonzo’s ability made the Ball family a national phenomenon—especially with Lonzo’s two younger brothers, LiAngelo and LaMelo, talented basketball players set to follow in Lonzo’s foot steps by playing at UCLA. LaMelo is still in high school.

 

LaVar converted the family’s fame into a Facebook reality series “Ball in the Family” that has drawn tens of millions of viewers. He and Lonzo also eschewed the mega shoe deals that players of his caliber typically get out of college to start their own venture—Big Baller Brand—with a signature shoe that cost $495, a decision that only added to the spectacle.

 

LaVar Ball didn’t respond to messages left at his Shanghai hotel room.

Even if Chinese authorities give them a pass, by the sound of it, the three players will face some type of disciplinary action when they return to California.

In a statement, Pac-12 Commissioner Larry Scott said: “We are very disappointed by any situation that detracts from the positive student-athlete educational and cultural experience that this week is about.” He said players are expected to uphold the highest standards and that the league is monitoring the situation.

Luckily for the players, Trump's fueding with athletes has been confined mostly to professional sports leagues. Let’s hope, for their sake, that Trump has three extra seats on Air Force One. If the three get jammed up, maybe Trump can work something out – assuming they're prepared to promise never to kneel during the National Anthem.
 

via http://ift.tt/2j9Vi5Z Tyler Durden

Authored by Simon Black via SovereignMan.com,

About twelve years ago, at the height of the real estate boom in the United States, banks began issuing what became known as NINJA loans.

You’ve probably heard the term before– NINJA stood for No Income, Job, or Assets.

These were the famed ‘no money down’ loans at low, teaser interest rates given to borrowers with pitiful credit and little hope of being able to make the payments.

One of the best examples of this absurdity was the case of Johnny Moon, a bankrupt, homeless man in Florida with no job history who was able to borrow hundreds of thousands of dollars to buy real estate.

Unsurprisingly, the market eventually crashed, dragging down the entire financial system with it.

Looking back it’s so obvious. I mean… duh… who would possibly think it was a good idea to give no money down loans to homeless, jobless, assetless borrowers?

Or the infamous ‘stated income’ loans, where the lender doesn’t bother to verify anything the borrower says (so the borrower can just make up their income and asset levels).

But back then, even some of the most conservative banks were doing it.

And hard core, seasoned financial professionals packaged all these toxic loans together into enormous, AAA-rated financial securities that were incredibly popular among institutional investors.

It’s not like these were stupid people. Bankers, brokers, investors, real estate professionals… many of them were incredibly astute.

But everyone was making so much money that they didn’t want to see the obvious truth. And the entire financial system paid the price for it.

Candidly, there are a number of similar signs today.

Snapchat is a great example.

The sexting social media app that’s so popular with pedophiles young people released rather disappointing quarterly results yesterday.

User growth is falling. Revenue growth is falling. And the company is hemorrhaging cash.

Snapchat has negative free cash flow. It has negative operating cash flow.

It has lost a total of $4.3 billion of its shareholders’ money since the company was founded in 2011– and more than $3 billion (nearly 70%) of that total loss is from this year alone.

In other words, the rate at which Snapchat is losing money… is INCREASING. Quickly.

Meanwhile the company continues to shower its employees with generous stock options despite its prodigious losses, ultimately forcing investors to suffer the consequences.

Snapchat’s shares took a big tumble yesterday after releasing its underwhelming quarterly report, and the share price is down more than 50% since it’s IPO.

Gee, what a surprise– a massively loss-making company that treats its investors like doormats has turned out to be a bad investment! How could anyone have possibly anticipated this?!?!

And Snapchat isn’t alone.

Another high-flying company that fits this mold is WeWork. If you’re not familiar, WeWork basically subleases short-term office space to other businesses at terms as short as one month.

So if you’re a new startup needing some short-term, non-committal office space…

… or flexible access to a conference room to meet clients…

… or even just a professional address to receive mail.

… that’s essentially what WeWork provides.

It’s important to note that WeWork doesn’t actually own any real estate.

It signs long-term leases, and then sub-leases the space through short-term contracts, which creates a LOT of risk for the company (and its investors).

You might be thinking– that sounds familiar, aren’t there a number of companies already doing that? It seems a lot like Regus’s business model (another company that provides flexible-lease office space).

Yes. It’s like… exactly… what Regus’s business model is.

The big difference is that WeWork is one of the most expensive private companies in the world, with a valuation of $20 billion.

By comparison, the parent company of Regus (IWG) is worth $2 billion (90% LESS than WeWork) despite having 3x as much revenue and 5x as much office space.

It also goes without saying that WeWork has negative cashflow… while Regus is profitable. But that’s apparently an irrelevant detail given that WeWork is worth TEN TIMES as much as Regus.

How can WeWork possibly justify such an enormous valuation?

The CEO/co-founder’s rationale is simple: “Our valuation and size today are much more based on our energy and spirituality than it is on a multiple of revenue.”

Yes I’m serious: that is a direct quote.

We are living in a world where serious financial professionals are investing in loser companies based on “energy and spirituality,” not profit, plan, or cashflow.

(As an aside, WeWork’s CEO is so energetic and spiritual that he’s personally sold $100 million worth of his own shares to buy a number of luxury homes.)

It’s not exactly the same as giving FIVE no-money down loans to a homeless guy. But it’s pretty close.

And this is precisely the sort of nonsense you always see at the top of a market.

Granted, it could keep going like this for YEARS. And it could become even more ridiculous.

No one knows precisely what will happen next, or when. And I acknowledge that I’m always early.

But I do believe that for anyone willing to do a little bit of homework and look beyond what’s sexy and sensational, there are plenty of better options out there.

As an example, we have a number of subscribers earning 5%+ on loan investments they’ve made which are fully backed at a 2:1 margin by gold and silver.

Others are making 12% to 13.5% on other asset-backed loans. We discuss some of these investments here.

They’re not sexy or sensational. There’s no hyped-up CEO promising to change the world, or major headlines on CNBC.

They’re just steady, safe investments… pretty boring by comparison.

But I’ll take safe and boring over a risky loser any day of the week.

Do you have a Plan B?

via http://ift.tt/2zGf7sO Tyler Durden

When the award-winning author of “The Big Short,” “The Blind Side” and “Moneyball,” stopped by Yahoo Finance yesterday to discuss his latest book, “The Undoing Project,” he was predictably asked for his next “Big Short” idea.  And, after downplaying the value of his opinion, and those of everyone else for that matter, Lewis offered up a rather surprising answer: “The NFL.”

On our afternoon live show The Final Round, we asked Lewis what part of the market might become the next “big short.” He was hesitant to answer, saying, “You’re asking the wrong person. Everybody will be a little stupider, if I answer that question. Can I answer this way: When people roll in with some big prediction, and they actually seem really certain about it, be very suspicious of them… When people come at you and say, ‘Oh, this is the short,’ it’s an interesting exercise, but the more serious they are about their prediction, the less seriously you should take them.”

 

But after the live show, Lewis thought of the NFL: “The NFL has real business problems. The CTE issues… I’ll give you the next short: the NFL.”

As we’ve noted multiple times over the past several weeks, as of the halfway point of the current NFL season, television ratings are down an average 5% compared to the same point last year, and nearly 20% from 2015.

Meanwhile, NFL sponsors are reportedly “nervous” amidst the ratings dip and the ongoing political controversy, and at least one, Papa John’s, has publicly said it will pull back on its NFL advertising.

Of course, Lewis noted that his answer was given in jest and admitted that “he’s not sure how a person would go about shorting the NFL just yet”…

Lewis, an influential thinker on sports leagues and their finances, may be on to something. On the other hand, he added that practically speaking, he’s not sure how a person would go about shorting the NFL just yet.

...but, we have an idea…how about all of the media companies that have sold billions of dollars worth of NFL advertisements and are about to get crushed by ‘make goods’ when they don’t deliver the eyeballs they promised ad agencies? 

Yes, we’re looking at your ESPN…perhaps the next ‘Big Short’ has already begun?

Here is the full interview with Lewis:

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Could A Commodity Rally Help Spark Silver?

Written by Craig Hemke, Sprott Money News and TF Metals Report 

 

While it is widely believed that commodities are one of the few “undervalued” sectors, sustained rallies have been hard to find over the past few years. Could all that be finally beginning to change?

 

The key to any commodity rally is weakness in the US dollar. Most commodities trade in dollar terms so a rising dollar generally puts pressure on the sector. In contrast, a falling dollar is usually good for the sector. As you can see in the chart below, the general trend since 2015 has been a flat to falling US dollar as measures by the Dollar Index:

 

 

It could be argued that the two most globally-important commodities are copper and crude oil. Let’s start with copper where, for the past year or so, we’ve been following a growing bottom and breakout on the chart. Does this look to you like a bear market or a reversal and switch to a new bull market, instead?

 

 

And now look at WTI crude oil. Note the similar chart pattern to copper. Could a move into the $60s be construed as a breakout and renewed bull market after a three-year bottoming process?

 

 

With dynamic rallies already underway in other commodities such as zinc and palladium, the question becomes…Are we in the early stages of a renewed bull market for commodities, in general? On the chart below of the the Continuous Commodity Index, you can see the possible beginnings of a turnaround.

 

 

What might this mean for silver which, despite its long history as a monetary metal, is now currently perceived primarily as an industrial metal and considered a “commodity”? If we view Comex silver through the same five-year lens, we note a reverse head-and-shoulder bottom, similar to those seen on the charts of copper and crude. However, we also note that unlike copper and crude, silver has yet to begin a rally of any consequence.

 

 

What to make of all this? Actually, it seems rather simple. Should the commodity rally continue, it will begin to take on a life of its own, with global money managers and asset allocators recognizing the new bull market and creating a virtuous cycle of higher prices through their inflows of cash to the “undervalued” sector. In this case, copper will move higher and toward $4.00 while crude oil breaks through $60 and heads toward $80.

 

If this happens, we could imply a price of silver that easily reaches the mid-to-upper $20s sometime in 2018. Is this possible or would/will The Banks be able to keep their collective thumbs on the price? Your answer to that question will depend upon the size and scale of the cash flow into the sector.

 

So again, it may be rather simple. Resolution of this will be a function of the dollar, copper and crude. Forecast those three for 2018 and you’ll likely be able to correctly forecast the price of silver, too.

 

Questions or comments about this article? Leave your thoughts HERE.

 

 

 

Could A Commodity Rally Help Spark Silver?

Written by Craig Hemke, Sprott Money News and TF Metals Report

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Via BusinessCycle.com,

Campaigning to “Make America Great Again,” Donald Trump swept to the presidency last November 8, buoyed by a wave of anger and sense of betrayal in the American heartland.

He knew that, for many, the American Dream had receded inexorably beyond reach, lingering only in distant memories. Critically, American parents no longer expect what had been virtually guaranteed in the mid-20th century – that our children would be better off than we are.

It isn’t just less-educated middle-aged White Americans who believe that American greatness will be restored by pushing back hard against the “other,” including China, India, and immigrants who don’t look like them. A much larger part of America seems open to the simple notion that what ails us is someone else’s fault.

This is because hardly anyone on the right or the left realizes just how fleeting the dominance of the West – and the U.S. in particular – has been in the longer sweep of human history.

Few appreciate the uncomfortable fact that, while China and India have advanced rapidly in recent decades, even this is only a partial reversal back to the historical norm. A two-millennium perspective – derived primarily from the lifework of Angus Maddison – shows that, for more than 90% of the time, China and India dominated the world economy, together accounting for about half or more of global GDP in terms of real purchasing power (Chart 1).

In year 1, India’s share was nearly a third of global GDP and China’s was over a quarter – both bigger than the Roman Empire’s. Rome had a huge trade deficit with China, whose silk was worth about its weight in gold. Pliny the Elder was so incensed that he viewed the diaphanous fabric as “transforming wives into adulteresses and maidens into prostitutes, while also threatening to make Roman men effeminate,” noted one scholar. In turn, the Roman Senate, attempting to staunch the outflow of gold, prohibited the wearing of silk by men. At the time, Asia produced almost three-quarters of global output. A thousand years later, that proportion had declined only a little.

China and India ruled the roost for the vast majority of the last two millennia and, until the late 19th century, each had a bigger global GDP share than the U.S.

However, the picture looks quite different if we zoom in on recent centuries, as most do (Chart 2). By the mid-19th century Britain was waging the Opium Wars – with opium seen as the only commodity that could offset the ruinous trade deficit created by its voracious appetite for imported Chinese silk, ceramics and tea – helping to bring about the collapse of the last Chinese dynasty. And enormous shifts began with the rise of the West – shown by the blue areas of the chart – which then dominated the global economy by the mid-20th century.

Yet, that epic “moment” was the exception in the long history of world GDP. The rapid reversals of fortune depicted in the rightmost section of Chart 1 indicate just how breathtakingly fast the rise of the West was, and how equally swift the reversal of fortune has been.

Europe’s Industrial Revolution, which started in the late 1700s and soon spread to the U.S. – in combination with Western colonial exploitation – caused the plunge in India’s and China’s GDP shares between the early 19th and mid-20th centuries. In a span of just 130 years – from 1820 to 1950 – the GDP share of Asia, excluding the Middle East, plummeted from almost 60% to only 16% (Chart 2).

Following World War II, the U.S. reigned supreme, commanding more than a third of world GDP, while Western Europe’s share fell to well under a quarter. Yet, the combination still accounted for a record 57% of global GDP.

The mid-20th century marked the zenith of the West’s GDP share, which America dominated for decades thereafter. So it’s this period that “Make America Great Again” really harks back to.

For Asia, excluding the Middle East, the comeback started slowly, between 1950 and 1980. The climb then accelerated, with that share surging past 30% by the turn of the century, and standing at 43% today, a 160-year high.

Meanwhile, the combined share of the U.S. and Western Europe has fallen to just one-third – a 166-year low. And the U.S. share is now half of its mid-20th century peak. It’s the headlong pace of this decline that’s worthy of notice.

The far right side of Chart 2 includes the early 21st century, when the reversal of fortune really sped up. Just since the start of this century, Western Europe has lost nearly a third of its global GDP share, while the U.S. has lost more than a fifth – similar to the fastest periods of decline for China and India between the mid-19th and mid-20th centuries. It’s this swift swing of the pendulum, back from its mid-20th century extreme, that provides the necessary historical perspective for understanding the angst in the West today.

Until the mid-20th century, the two key factors driving the rise of the West relative to the rest were the Industrial Revolution and colonialism. But then came the twilight of colonialism, followed in recent decades by rapid technological catch-up in China and India – which isn’t over.

So, has the relative decline of the West and the rise of the rest run its course? If not, it’ll be a tall order for the U.S. to again command over a third of world GDP – or even the 22% share averaged over the Reagan years.

The decline in American dominance is driven by more than China and India’s resurgence.

Separately, there’s been a downshift in U.S. trend growth, driven by demographics and productivity growth, as partly acknowledged by the latest IMF projections of five-year-ahead annual GDP growth:  12/3% for the U.S. – close to Fed and CBO estimates – compared to 5¾% for China and 81/6% for India.

In fact, their combined share of world GDP outstripped America’s in 2008 for the first time in a century, and today is one and a half times as large. In five years – based on IMF projections – it’ll be closer to double the U.S. share, or almost as much even if we sustain 3% growth, as optimists hope. Regardless, China is ready to "take center stage in the world," as President Xi Jinping just announced. India, with more favorable demographics, won’t be far behind.

For us Americans, it isn’t a reversion to mid-20th century levels of U.S. global dominance that matters most, but rather a fair shot at greater prosperity for our children. For sure, that will require more productivity-enhancing investment in physical and human capital. But it’s also critical that the resulting benefits reach the middle and working classes. Only then can the U.S. reclaim the mantle of the greatest land of opportunity the world has ever known.

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The 4-pack below looks at four assets that look to be at key price points that are creating opportunities, from a Power of the Pattern perspective.

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Full Disclosure- Premium and Sector members are taking advantage of these patterns at this time.

 

Why you see chart pattern analysis with brief commentary:   There is a ton of news and opinions about markets and stocks that make the decision-making process more difficult than it needs to be.   

I believe the Power of the chart Pattern provides all you need to see what is taking place in an asset and determine the action to take. 

This approach has worked well for me and our clients and I encourage you to test it for yourself.

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By Chris at http://ift.tt/12YmHT5

…and it’s only getting worse. Bin, by the way, means “son of” in Arabic.

This is why there are “Bins” here, there, and everywhere scattered across the Middle East. And some of them are having a rough week. In particular:

• Prince Mansour bin-Muqrin who just died in a helicopter crash near the Yemen border. Could it be…? Nah, I’m sure it was just an accident.
• Prince Abdul Aziz bin Fahd was shot dead as authorities attempted to arrest him.
• Prince Alwaleed bin Talal, the 34th-richest man in the world (eclipsing King Salman himself) with an estimated net worth of US$28 billion, was arrested.
• And 11 other princes have been arrested and bank accounts frozen. (on a side note… I wonder how many wish they’d bought bitcoin?) And here we all thought that capital controls were only a problem for poor and middle class Venezuelans. I guess Jamie Dimon has just been proven wrong.
• Now, this morning I read that hundreds (yes, hundreds) of others have had their accounts frozen.
• Also arrested this week was Miteb bin Abdullah. Now, this guy was the head of the National Guard and a son of the late King Abdullah, who died in 2015. He has long been considered a potential future king, and given that he’s led the military, which involves protecting the royal family, this is pretty simple. This is the removal of obstacles that could prevent Mohammed bin Salman from succeeding the king.
• In June, the former Crown Prince — Prince Nayef, who is still under house arrest, was ousted. Why this matters is because Nayef was next in line to the throne and arguably the closest U.S. ally inside the monarchy.

Shock and awe Vin Diesel style!

Adding fuel to the fire we have declarations of war.

Saudi Arabia amazingly said that Lebanon had declared war against it, blaming attacks against the Kingdom by the Lebanese Shi‘ite group Hezbollah.

As reported by Reuters:

Saudi Gulf affairs minister Thamer al-Sabhan told Al-Arabiya TV that Saad al-Hariri, who announced his resignation as Lebanon’s prime minister on Saturday, had been told that acts of “aggression” by Hezbollah “were considered acts of a declaration of war against Saudi Arabia by Lebanon and by the Lebanese Party of the Devil.

That’s quite a threat and declaration. But wait… there’s more!

As reported by Al Jazeera:

Saudi Arabia blames Iran for missile attack

Saudi Arabia has accused Iran of being responsible for Saturday’s ballistic missile launched from Yemen that targeted Riyadh airport, warning that it could be “considered an act of war”.

Now, if you remember what I said earlier this year when discussing Qatar, which was a trial balloon as I said:

The real issue here isn’t Qatar.

They are merely a pawn in this. The target here is Iran, and now that Chairman Trump just gave the Saudis a “we’ve got your back” pledge, it’s time to move things forward.

So to summarize:

The arrests had been decreed by the monarch, King Salman, and carried out by his increasingly powerful son and heir, Mohammed bin Salman, who, for the sake of brevity, I’ll call MBS. MBS is in the process of completely upturning the established order so this promises to be more exciting than a Hitchcock thriller.

But first, some background…

Tribal Society – A Gang of Thieves

Saudi Arabia is a tribal society where order has been, up until last week, maintained by a consensus amongst the various branches of the Royal family. Up until now it’s been unthinkable to publicly shame, humiliate, and imprison other members of the ruling family, and so fracturing this established order is a big deal. A really big deal!

This is not like admitting at a family gathering to having snuck into auntie’s beach house for a quickie with the cute waitress at the corner coffee shop.

Rather, it’s like telling them you’ve already burnt down their homes after becoming a transvestite. It’d be a huge shock, and that’s exactly what the families are experiencing right now.

You see, the way it’s worked is that the families all have a stake in the system, and this in turn helps secure their loyalty. What MBS has just done is to completely shatter the way things have always worked and in so doing destroyed any loyalty and trust.

So what the hell is happening?

To understand what’s likely taking place let’s follow the money.

Here’s what we do know:

Oil makes up 90% of Saudi government revenue, and the entire place is a giant welfare state. So the price drop has been very painful and they’re bleeding through their reserves.

Source: tradingeconomics.com 

In fact, according to the IMF, Saudi Arabia is set to burn through all of its cash within five years.

This is why the market is putting more pressure on their currency peg than at any time in its history. I wrote about this back in May when I said the Saudi sheikhs only have two options.

This is also why they need to list Aramco — in order to shore up their finances.

Not only have weak oil prices hurt them. They’ve been engaging in futile silly wars… and these things cost billions. Yemen, Syria — both of which they figured would be easily won and over in months. Oops!

So their expense column looks horrible due to their losing billions in wars and welfare, while their revenue column has been under severe pressure due to the price of oil.

Here’s brent:

In fact, their status as swing producer just ain’t what it used to be either. They’ve the US to thank for that.

Here’s US oil production:

What else do we know?

We know that the house of Saud is Sunni in a country predominantly Shia. They are, therefore, the minority. Thus far, they’ve managed to keep the populace at heel with a combination of brutal crackdowns on dissent and, as mentioned, a giant welfare system. People who’re fed well tend not to complain.

Importantly, the Wahhabi sect tolerates other religious or ideological beliefs in the same way you and I’d tolerate a cockroach on our kitchen bench: Not so much.

For instance, in all its 50 years, there has not been a single non-Sunni Muslim diplomat in the embassy. These guys are so radical that the branch of Imam Mohamed Bin Saud University in Fairfax, Virginia instructs its students that Shia Islam is a Jewish conspiracy.

It goes without saying therefore that if you’re the ruling elite and you rule over a Shia population, you’re not really liked that much. Less so with views like this.

So with that backdrop: Finances in turmoil, a bunch of rich (15,000 odd) squabbling family members, being a minority, which has ruled brutally over a minority whose religious beliefs aren’t tolerated, what would you be thinking?

I know what I’d be thinking. 

I’d be thinking that the House of Saudi is like an expiring option contract and it’s out of the money. Some in the family realise that, namely MBS.

This is why he’s been pushing forward to liberalise the economy. It’s not hard to look across the pond to the success Dubai has seen to realise that Wahhabism is antithetical to economic growth. And so if Saudi Arabia is to survive and the Royal Family to survive, by default, they need a plan. And fast.

This requires getting rid of some of the clerics and old tribal establishments. This has been taking place ever since MBS moved into the gilded rooms 6 months ago.

What you’ve got to remember is that the old guard don’t want change, and these guys have depended 100% on oil revenues.

It looks to me like MBS sees this for the expiring option contract that it is. My best guess is that he realises that if they wait too long, by the time the welfare money has run out, they’ll all be overthrown. The old guard probably don’t want to hear that, but it is the truth. And because they don’t want to hear it, you need to get rid of them.

So why all the noise about war with Lebanon and Iran?

Certainly, the enemy of my enemy is my friend applies, and Israel and Saudi have formed some sort of unholy alliance. It’s clearly not so secretly backed by Washington because let’s not forget that Saudi Arabia don’t even recognise the Israeli state.

But why all at the same time?

I think Goering nailed it:

The first order of events it so consolidate power, eliminate anyone within the royal family that could pose a threat to what will be some radical changes to what Saudi Arabia looks like.

The second order of priority is to ensure the local populace don’t get any funny ideas. Thus some pretty decent scare tactics. Threats of war will do that perfectly adequately.

And the unholy alliance with the infidels is to ensure that, should the going get tough, they’ll have formidable military power behind them. Who better than the US and Israel?

This is one very risky initiative, but it’s do or die for these guys. History indicates that when despots allow more freedoms and reforms, they are forced to begin using popular support in exchange for welfare. I can’t think of one that’s managed it. Typically, the lose power.

So, what do you think?

Cast your vote here and also see what others think is going on in the House of Saud

– Chris

“The rain begins with a single drop.” — Manal Al Sharif

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Ignoring the surge in junk bond risk and collapse of the yield curve, stock investors were overheard saying…

 

Gold remains the post-Saudi-purge winner…

 

Stocks rebounded today. The Dow has nopw beenup 7 days in a row thanks to today's last second ramp…

 

But despite small caps bounce, they remain red on the week… as Dow, S&P, and Nasdaq scramble green

 

VIX was once again driven back below 10 to ensure a green close for The Dow etc…

 

The Media complex was busy today with rumors and headlines surrounding the AT&T, Time-Warner deal and the removal of CNN…

 

FANG Futures began trading today and FANG stocks ended lower but dip-buyers were evident…

 

Credit Markets continue to collapse… HYG at 3 month lows…

HYG (the high yield bond ETF) has seen outflows for 8 of the last 10 days)

With stocks and bonds notably divergent…

 

Notably the last few days have seen both bonds and stocks bid (just as both were sold in late Oct)

 

Treasury yields rose modestly today…

 

The Treasury yield curve continues to flatten. 5s30s is now down 10 days in a row – the longest flattening streak since March 2011 and Dec 2005 – if it goes 11 days that will be an all-time record.

And even banks are now starting to pay attention…

 

The Dollar Index drifted lower again, hovering at pre-payrolls levels…

 

Chaos in crude markets today as the DOE data sparked WTI selling, RBOB buying but then the machines took over and pumped'n'dumped it…

 

Gold and Silver managed to hold onto gains after selling off non-stop once Europe closed…

 

Finally, Bitcoin saw some crazy moves today after surging on the suspension the SegWit2x hard fork, then collapsing and then jumping back higher again – all on heavy volume…

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