Category: zerohedge

Over 500,000 Syrian Refugees Return To Government-Controlled Areas Of Syria

Authored by Whitney Webb via TheAntiMedia.org,

Crucial to the Western narrative of the Syrian conflict is the assertion that Syrian President Bashar al-Assad is a brutal dictator who has taken to killing his own people over the course of Syria’s six-year-long conflict. This allegation has been the crux of the “humanitarian” justification for foreign military intervention in Syria that would seek to depose Assad’s government, a justification frequently used by the U.S. and its allies prior to an invasion or the toppling of an extant regime.

While this narrative has been pervasive in media coverage of the Syrian conflict, it is now being debunked by the very Syrian refugees that the media purported were fleeing Assad in the first place. According to a recent statement from Andrej Mahecic, a spokesman for the UN High Commissioner for Refugees, an estimated 440,000 displaced Syrians who remained in the country have returned to their homes since the year began. In addition, 31,000 refugees in neighboring countries also returned to Syria in the first half of the year, with 260,000 having returned to Syria from other nations since 2015.

Though Mahecic noted that these refugees represent only a “fraction” of the five million Syrian refugees living in neighboring countries, what is notable is that nearly all of those who have decided to come back are settling in areas of Syria controlled by the government or where the Syrian government has made major territorial gains against ISIS and US-backed militants like al-Nusra Front in recent months – namely Aleppo, Hama, Homs and Damascus.

Even with the conflict in Syria still raging, thousands of the displaced are eagerly returning to their homes under the control of the Syrian government. This may seem strange, as the U.S. media has long suggested that most refugees were fleeing Assad, not foreign-backed terrorists like Daesh (ISIS) and Al-Nusra.

Of course, this assertion was based on “polls” of refugees conducted by the Syria Campaign, a USAID-funded organization that has long pushed for U.S. military intervention in Syria.

This begs the question: why would refugees choose to return to territory controlled by the person they supposedly sought to flee, as the mainstream media portrays?

These latest figures from the UN suggest that many refugees were not fleeing their government, but rather the violence caused by a foreign-funded insurgency intended to topple the popular Assad government. As Middle East Eye noted in 2015, prior to the outbreak of the conflict, Assad was widely popular, though his popularity allegedly evaporated as the 2011 Saudi- and U.S.-funded uprising began.

Did Assad’s popularity with the Syrian people ever really go away? Western media reports containing interviews with the handful of Syrians who support Assad as dictator claim it is so. But the evidence has long suggested that the majority of Syrians have continued to approve of their president throughout the conflict.

Indeed, there is plenty of evidence that the “popular uprisings” against the Assad government in 2011 were staged on behalf of foreign mercenaries largely backed by Saudi Arabia, Qatar and Turkey – governments that have long sought to remove Assad from power. Assad’s popularity prior to the outbreak of violence likely remained unchanged after the fact.

Polling within Syria has consistently shown this to be true. Even polls funded by anti-Assad nations like Qatar have also found that the majority of Syrians continue to overwhelmingly support Assad. Indeed, when elections were last held in 2014, the Western media could not hide the large crowds that came to vote, as the population re-elected Assad, who won with 88 percent of the vote. By contrast, voter turnout was 55.7 percent in the last U.S. Presidential election, suggesting that Assad has a stronger democratic mandate than U.S. President Donald Trump.

Six years into the conflict, video footage, and photographs clearly show that Assad and his wife regularly walk among the Syrian people in Damascus with little to no security detail. The Assads even drive their own cars – without security – through the countryside.

This seems like a difficult feat for a “hated” and “feared” dictator to perform on a regular basis. By contrast, some Western leaders can hardly spend a few minutes among their constituents – even with a massive security detail in tow – without being sped away for their own protection.

Even U.S. politicians who have traveled to Syria have come back acknowledging Assad’s popularity. For instance, Virginia State Senator Richard Black has cited internal reports from U.S. intelligence which state that, were an election in Syria to be held today, Assad would likely be reelected with 90 percent of the vote, including in areas occupied by terrorists.

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Canada Awards Confessed Terrorist $10 Million and an Apology for Violating His Civil Rights

 

Content originally published at iBankCoin.com

This wasn’t a case of mistaken identity or wrongful imprisonment. Omar Khadr admitted to killing an American soldier — but was still awarded $10.5m by Canada’s supreme court, and an official apology by the Canadian government, for violating his civil rights. Nothing can be funnier than the state of doom for the civilization that pretends to exist north of our borders.

Back in 2010, Canada’s supreme court ruled that human rights were being violated at Guantanamo Bay. As such, anyone held there, who happened to be a Canadian citizen, was very likely to win lawsuits.

Enter Omar Khadr.

“The deprivation of [Khadr’s] right to liberty and security of the person is not in accordance with the principles of fundamental justice,” the court ruled.
 
“The interrogation of a youth detained without access to counsel, to elicit statements about serious criminal charges while knowing that the youth had been subjected to sleep deprivation and while knowing that the fruits of the interrogations would be shared with the prosecutors, offends the most basic Canadian standards about the treatment of detained youth suspects.”

 
Poor Omar underwent sleep deprivation. As such, Ottawa awarded him $10.5m.

Omar was 16 when he was picked up by US forces. He’s being described as a ‘child soldier’ by Canadian press — a victim in his own right. The Canadian supreme court stated that in spite of the fact that he was and still is a confessed terrorist, he should retain his rights as a Candian citizen. Moreover, by permitting American forces to detain him in Guantanamo Bay, by extension the Canadian government was complicit in violating his civil rights.

Liberalism is a mental disorder.

In 2010, Khadr pleaded guilty to killing Sgt. Chris Speer, in addition to attempted murder, conspiracy, providing support to terrorists.

“As held by this Court in Khadr 2008, Canada’s participation in the illegal process in place at Guantanamo Bay clearly violated Canada’s binding international obligations,” the Supreme Court wrote in 2010, noting that Khadr had been denied access to counsel and was unable to challenge the legality of his detention.

Khadr did sue for $20m, so the Canadian government did achieve a very minor victory here. Since Omar was released on bail in 2015, he will now get to enjoy his newly minted tax payer fortune without the inconvenience of being imprisoned for crimes he did commit.

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As The S&P 500 Becomes One Giant ETF, BofA Has Four Major Warnings

Over the last few years, as nervous investors worried about a market that has risen to record highs on trillions in central bank liquidity, and seeking some particular market product to which they could transfer their concerns and fears, ETFs quickly emerged as the current generations’ “CDO” – the product that will accelerate the next crash when the BTFD mentality that has defined the market for the past 8 years, finally ends as central bankers pull the rug from under an entire generation of traders.

Two months ago, Arik Ahitov and Dennis Bryan, who run the $789 million FPA Capital fund, took the subconscious fears about ETFs to the next level, when in taking a page out of the Warren Buffett warning books, the duo said that Exchange-traded funds are “weapons of mass destruction” that have distorted stock prices and created the potential for a market selloff.

In an April letter the two warned that “when the world decides that there is no need for fundamental research and investors can just blindly purchase index funds and ETFs without any regard to valuation, we say the time to be fearful is now.”  They also noted a previously voiced warning that that “the flood of money into passive products is making stock prices move in lockstep and creating markets increasingly divorced from underlying fundamentals” and that “as the market moves ever higher, there’s the potential for a sharp decline.”

“This new market structure hasn’t been tested,” Bryan said, noting that the stock market has never gone through a major downturn when passive investors were as important as they are now. “We could get an onslaught of selling.”

The simplest summary of the latent worries about ETFs is that i) they provide phantom liquidity: there when not needed and gone when needed, and ii) as a result of wholesale capital flows, they misprice risk among bulk asset classes, so when selloffs occur, the most liquid underlying stocks – usually the most attractive ones – are hit the most.

* * *

Fast forward to today, when the torch of worries about ETFs was picked up by none other than Bank of America’s Savita Subramanian, who published a research report titled “The ETF-ization of the S&P 500”, in which she warns that higher single-stock volatility, valuation distortions and liquidity concerns could grow due to the surge in popularity of ETFs, which now account for more than a third of U.S. ownership of the S&P 500.

As Subramanian writes, “historically, large cap US equity managers have had the luxury — and curse — of a liquid, efficient market. On the one hand, capacity has been less of an issue for the S&P 500 than it has been for the Russell 2000, but on the other hand, it is much harder to have an edge on large, well-followed stocks than on smaller, less-followed peers.”

And, as the bank warns, “that liquidity is slowly being called into question by the “ETF-ization” of the S&P 500. US trading volume today is now 24% exchange traded funds (ETFs) and 76% single stocks versus 20% ETFs and 80% single stocks three years ago.”

Furthermore, BofA, which echoes Howard Marks 2015 warning that the S&P is not as liquid as it seems, calculates that the proportion of stocks in the S&P now managed passively has nearly doubled since the 2008 crisis to 37 percent while ETF trading accounts for about a quarter of the daily volume across U.S. exchanges.


Just as concerning, the percentage of S&P 500 market cap held by Vanguard alone has doubled since 2010, to 6.8% today. Vanguard currently is a 5%+ shareholder of 491 stocks in the S&P 500, up from just 116 in 2010.

While hardly a surprise, BofA notes that equity client flow data similarly suggests that investors have increasingly shifted to passive investments: clients have been net buyers of over $160bn in ETFs vs. net sellers of over $200bn in single stocks since 2009, and the bank’s Global Wealth & Investment Management clients’ equity and debt ETF allocations have risen to nearly 12% and 10%, respectively, today, from less than 2% in 2005.

* * *

Looking at the potential liquidity implications, BofA also warns that the actual shares available, or “true float” (float shares less shares held by passive funds) for S&P 500 stocks, may be grossly overestimated, and concludes that as these structural changes play out in the market, there are vast implications for US investors.

The next question BofA tackles is how much further this active to passive rotation can go before markets become dysfunctional. It points out In Japan, nearly 70% of the assets under management (AUM) of
Japan-focused equity funds is passive (granted, the BoJ has been buying ETFs) and their markets are still functioning.

This is almost double the proportion of US passive. although the victim in Japan – as is increasingly the case in the US – have been active equity managers.

Japan’s case, the casualties may be the active equity business, where active managers have suffered outperformance rates 12ppt lower over the last three years of accelerating passive inflows vs. over the prior decade (34% of funds outperforming the TOPIX between 2014-2016 vs. 46% outperforming between 2002-2013).

So, as the ETF-ization of US stocks is likely to continue, BofA highlights what it believes as four critical warnings implications as increasingly more market decisions end up in robotic, quant, algo and other non-human hands. From BofA:

1. Avoid crowded stocks (especially right now)

Over the short-term, our work suggests that positioning matters more than fundamentals: buying stocks which are the most underweight by large cap active managers has led to stronger three-month returns than investing in Low P/E stocks or stocks with favorable growth or ROE (Chart 7). Crowded stocks have generally underperformed neglected stocks in recent years as mutual funds are net sellers and passive funds are net buyers. Crowding risk is particularly acute at quarter-end when allocators tend to rebalance: in the first 15 days of the quarter, positioning alpha is 10x higher than average (Table 1).

* * *

2. ETF fads can drive massive PE distortions

ETF trends can dramatically distort multiples: with the meteoric rise in Low Vol ETFs (150% annual asset growth since 2009) low beta stocks saw a >200% surge in relative valuations to never-before-seen premia. Where to spot this next? Our work suggests that the next influx may be into Value ETF strategies, ESG strategies and other quant funds.

* * *

3. Know your risk: a screen for stocks with low “true float”

If passive funds own a large percentage of stocks and will only buy and sell based on changes in market capitalization or other metrics, the actual float of a stock may be far lower than we think. Our analysis of stocks most held by passive funds suggests that the volatility of stocks (measured by both standard deviation and price declines) with a larger proportion of shares held by passive investors has systematically increased, as the market begins to appreciate the fact that the actual liquidity profile is overestimated. In fact, excess price volatility of stocks with low “true float” (i.e. those with a high proportion of float held by passive) tripled in the last twelve months.

But the multiples of stocks with lower “true” float may not be fully reflecting this risk. As their volatility profiles have increased, stocks with low “true float” have seen some multiple compression, but still trade in line with their more liquid peers, where in our view a discount might be warranted.

Moreover, their peak to trough price declines are significantly deeper, further corroborating their impaired relative liquidity.

4. Time horizon arbitrage

Our analysis shows that fundamental signals have significantly improved in efficacy over longer time horizons, whereas algorithm-driven signals perform well in the short term, but the decay rate is extreme (Chart 12-Chart 13).

Valuations explain almost 90% of the S&P 500’s returns variability over a ten-year time horizon (Chart 14) – we have yet to find any signal with even close to that level of predictive power over the short-term.

* * *

Which brings us to BofA’s striking punchline: between central banks, quants, and ETFs, the market is becoming increasingly inefficient:

… ironically, what should be an increasingly efficient market has shown signs of becoming less efficient over the long term – alpha opportunities, measured by the range of market prices, have shrunk on a short-term basis…

… Just as we said would happen back in 2009.

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Our Experience Of The Economy Is Fragmenting

Authored by Charles Hugh Smith via OfTwoMinds blog,

The technocrat and capital-owning class is delighted with the economy, and can't understand why everyone isn't prospering.

You've probably seen some version of this chart of average household income in America before. (You may have seen charts of median household income as well; here's an article on the difference between the two methods of measurement: American families are learning the difference between median and mean)

Here's the data in table format, if you prefer: Household Income Quintiles.

The point is that there is an enormous difference between the average household incomes of the bottom 80% and the top 10%, 5% and 1%. It's important to separate the various income brackets, as including the top households distorts the average. Here we see the average household income of the bottom 80% of households is around $50,000, while the average income of the top 10% (which includes the wealthy 1% and the super-wealthy .1%) is almost four times greater: $185,000.

You've probably seen a version of this chart, too, which shows that the real (inflation adjusted) income of the bottom 90% has gone nowhere for the past 40+ years.

While the mainstream wrings its hands over the political and social fragmentation that is visible everywhere, it ignores the economic fragmentation that's the source: we're fragmenting because our experience of our economy and society is fragmenting.

In the good old days of secular growth of everything–energy consumption, wages, profits, employment, government spending, consumer debt, housing construction, business investment and consumer spending–people in every economic class shared a common experience that the financial future of their household was improving.

The economic pie was expanding, and everyone's slice was getting bigger–some more than others, of course, but there was enough trickling down to expand almost everyone's share of the economy.

That is no longer true. Those in the top 5% live in an entirely different economy than the bottom 80%. If we combine the higher incomes with the rising wealth of the top slice of households, we get an even starker picture of fragmentation.

Those in the bottom 50% live in a different economy than those between 80% and 90%–households that are holding their own–and those in the top 10% that are seeing their income and wealth advance.

The top 5% and above live in a different economy than those between 80% and 95%, as they are seeing their wealth and income rise sharply, even spectacularly if they own the "right" assets and income streams.

Those with gold-plated healthcare insurance live in a completely different world than those with huge deductibles. Those on Medicaid live in a more secure world than those with marginal private-sector coverage.

Households with two secure incomes have a completely different experience of the economy than those with insecure incomes that fluctuate from year to year.

Those who own their homes free and clear have a different reality from those struggling to pay massive mortgages and property taxes.

Those enjoying ample pensions from their federal, state and county/city employment live in a different world than those scraping by on Social Security.

We live in an economy of haves and have-nots, and the ladder between those earning $2,000 a month and those earning $20,000 a month has very few rungs. The pie is shrinking for the vast majority of households, nibbled away by inflation (supposedly near-zero), higher deductibles, fees, taxes, fines, interest and on and on.

The technocrat and capital-owning class is delighted with the economy, and can't understand why everyone isn't prospering. Their experience of the economy is that's it's pretty darn amazing and wonderful.

This class dominates the state, the corporate media, the philanthro-capitalist non-profit sector, and the think-tank and academic sectors (I'm not rich, look at the dust on my BMW, Tesla, etc.). As a result, their cluelessness is the dominant narrative.

Our experience of the economy and of social/financial mobility has fragmented, and social and political fragmentation are the inevitable consequence.

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US Factory Orders Tumble Most Since November… “We’re Gonna Need More War”

Despite all the exuberance over ISM 'soft' data, 'hard' data takes another hit today as Factory Orders for May tumbled 0.8% (worse than the 0.5% expected drop) for the biggest slide since November.

This is the second monthly decline in a row, signaling Q2 GDP may be weaker than expected.

Worse still, May saw the biggest (and first) MoM decline in US Manufacturers new Orders (ex-transportation) since Feb 2016…

The biggest culrpits for the decline are:

  • Defense aircraft and parts -30.8%, and
  • Non-defense aircraft and parts -11.6%

We're gonna need moar war.

And the divergence between the 'industrial' economy and the 'industrial' average continues to widen…

But maybe "we just don't get the new economy."

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“Outraged” Trader Asks: “The World’s Coming To An End, When Should We Buy The Dip?”

While Europe censors hate-speak (or any 'speak' they don't agree with), Canada enacts anti-free-speech laws, and Britain is ready and willing to shutdown the internet over what some websites say, one former fund manager has had enough of some other words that are thrown around with abandon.

As Bloomberg's Richard Breslow explains, the last thing I want to be doing the day after July 4th is making any kind of assault on free speech. But I’m going to propose a ban on certain words that no longer pass the plain-speaking test.

As a start, I can no longer stand the word “outraged.” Everyone is absolutely outraged at so many things that they’ve taken an evocative expression and rendered it trite. And it’s a worry because there are a lot of things we should be shouting about.

 

The same goes for “existential.” Not every issue is life or death. And when we overuse the term, we introduce the dangerous notion that events don’t matter anymore other than as short-term fodder to feed the news cycle. Or to churn business. The world’s coming to an end, when should we buy the dip?

 

Two other terms that need to be put on suspension are “safe-haven” and “because.” Havens don’t really exist and make for a very sloppy way of describing the world. You can’t selectively find something that rallies and call that a rush to safety while ignoring contradictory moves in other assets because they don’t fit the story.

 

Take a look at where North Korea and Japan are on a map and ask yourself why repatriation sounds like a great idea.

 

In a true risk-off environment there’s no cherry picking. It’s student body left. And you know it when you live through it. On Tuesday morning there’s a nuclear crisis, but by the afternoon, nerves are no longer frayed because USD/JPY found some bids? Sort of makes a mockery of a really dangerous issue.

 

So why does “because” make the cut? Because (tee hee) if we are going to entertain the notion that years of suppressed rates are coming to an end, we need to be much more careful in saying X led to Y. To consider that the markets may have very different reaction functions than we’ve gotten used to.

 

Gold will certainly trade differently to news. Emerging markets will do well on the notion of healthy global growth, but get sick on any hint of a policy mistake. Geopolitics may start to have real market implications again: well beyond six hours of yen strength.

 

There’ll be more differentiation between credit assets and you’ll be hearing a lot of discussion of fixed versus floating. Suddenly we may be able to talk about the pension crisis rather than ignore too scary a subject. The economic numbers that we need to focus on will rotate as well as change.

As far as today’s FOMC minutes are concerned, it’s old news. You’ve heard the core members speak since the meeting and you’ll get Yellen’s Congressional testimony next week.

If you think a hint at an autumn start to balance sheet reduction is a huge deal then you should be steadfast in ignoring those who tell you it will go seamlessly–and trade accordingly.

 

If not, don’t get fooled into thinking you should rush into haven assets because there’s no need to be outraged that the Fed has avoided an existential mistake

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True Religion Files For Bankruptcy As Amazon Claims Another

Nearly one year after rumors about its upcoming bankruptcy first emerged, overnight US-based denim retailer True Religion Apparel finally threw in the towel when it filed for bankruptcy protection, signing a pre-packaged restructuring agreement with most of its lenders.

True Religion, a company whose denims Reuters says have "gradually fallen out of style", filed for Chapter 11 creditor protection in the U.S. bankruptcy court in the District of Delaware (case Case 17-11463), and listed assets and liabilities in the range of $100 million to $500 million (see full filing below). According to the prepack agreement agreed upon by lenders, including TowerBrook Capital Partners, will slash the company's debt by over $350 million. The jean vendor also said it has secured DIP financing from Citizens Bank for up to $60 million.

True Religion Brand Jeans is pleased to announce it has secured critical stakeholder support for a comprehensive financial recapitalization of the Company’s capital structure. In signing a Restructuring Support Agreement (“RSA”) with the substantial majority of its Term Loan Lenders and its Sponsor, TowerBrook Capital Partners, the Company will reduce its debt by over $350 million and convert it into the substantial majority of the reorganized Company’s equity. To implement the terms of the pre-arranged restructuring expeditiously, the Company filed a voluntary Chapter 11 petition in the United States Bankruptcy Court for the District of Delaware, and expects it will take 90 to 120 days to obtain confirmation of its pre-arranged plan by the Bankruptcy Court. Throughout the implementation of this process, True Religion will continue to operate its business without interruption to customers, employees and business partners.

"After a careful review, we are taking an important step to reduce our debt, reinvigorate True Religion's iconic brand and position the company for future growth and success," True Religion Chief Executive John Ermatinger said in a statement. True Religion also said that critical trade creditors are expected to be paid in full and the company would continue to operate business as usual. The restructuring plan provides for full payment of claims of True Religion's continuing trade creditors, which includes continuing vendors, suppliers and landlords.

The company listed Wachtell Lipton and Pachulski Stang as legal advisors, while financial advisor is MAEVA Group.

For those seeking a culprit for the latest bricks-and-mortar bankruptcy, look no further than Amazon. The denim retailer's financial struggles are due in part to consumer tastes shifting toward online shopping and away from the brick-and-mortar shops and department stores where the company's jeans have been primarily sold.

True Religion said the pre-arranged plan could take about 90 to 120 days to receive confirmation from the bankruptcy court.

* * *

Last October, Reuters reported in October that the retailer had hired a legal adviser to explore several debt restructuring options, as such today's filing should come as no surprise.

Finally, with the True Religion bankruptcy filing, here is the full revised Moody's list of which deeply distressed retailer will likely file for bankruptcy next.

  • True Religion Apparel – men's and women's clothing
  • Boardriders SA  – sporting subsidiary of Quiksilver
  • The Bon-Ton Stores – parent of department store chain
  • Fairway Group Holdings – food retailer
  • Tops Holding II – supermarket operator
  • 99 Cents Only Stores – discount retailer
  • TOMS Shoes – footwear company
  • David's Bridal – wedding dresses and formalwear seller
  • Evergreen AcqCo 1 LP – parent of thrift chain Savers
  • Charming Charlie – women's jewelry and accessories
  • Vince LLC – clothing retailer
  • Calceus Acquisition – owner of Cole Haan footwear firm
  • Charlotte Russe – women's clothing
  • Neiman Marcus Group – luxury department store
  • Sears Holdings – owner of Sears and Kmart.
  • Indra Holdings – holding company owner of Totes Isotoner
  • Velocity Pooling Vehicle – does business as MAG, Motorsport Aftermarket Group
  • Chinos Intermediate Holdings – parent of J. Crew Group
  • Everest Holdings – manages Eddie Bauer brand
  • Nine West Holdings – clothing, shoes and accessories
  • Claire's Stores – accessories and jewelry
  • Gymboree – children's apparel

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China Issues Dire Warning On North Korea, Sees “Out Of Control… Disastrous Consequences”

Authored by Mac Slavo via SHTFplan.com,

While the world watches in jest as Japanese residents prepare for the possibility of a confrontation with North Korea by panic buying nuclear shelters and air purifiers, we may soon realize that their efforts to desperately acquire protective gear and equipment for nuclear disaster were quite prescient.

Yesterday, North Korea successfully tested what is reportedly an ICBM (Inter-Continental Ballistic Missile) capable of striking Alaska from the Korean peninsula. Coupled with their purported advancements in nuclear technology, North Korea may now have the ability to launch devastating attacks on their southern neighbor, Japan and even the United States. And if they have not yet achieved the ability to fit a nuclear warhead on an ICBM and deliver it effectively to its target, they are inching closer by the day.

So close, in fact, that Chinese Ambassador Liu Jieyi’s recent remarks on the matter suggest that we are nearing a dangerous breaking point:

“Currently tensions are high and we certainly would like to see a de-escalation,” Liu told a news conference at UN headquarters as China takes over the Security Council presidency in July.

 

“If tension only goes up … then sooner or later it will get out of control and the consequences would be disastrous,” he said.

Earlier this year President Trump deployed three carrier strike groups to the region, signaling the real possibility that the United States will no longer follow what Secretary of State Rex Tillerson calls a policy of “strategic patience” employed by Trump’s predecessors.

Though the threat seems to be muted by global media, China and Russia appear to be taking it very seriously, with both having reportedly deployed tens of thousands of troops and equipment to their respective borders with the North.

All of the signs suggest that military action is about to occur. And while most Americans may think that North Korea would be another Iraq, wherein the battle could be won in a matter days, the fact is that North Korea has a massive military and now, as confirmed yesterday, an ICBM capable of striking long-range targets.

Now may be a good time to imitate the Japanese by preparing for the worst, because the moment the world realizes that war is imminent there will be a run on banks and grocery stores that will likely leave shelves and ATM machines completely empty. Following the Fukushima nuclear disaster, the price of government recommended anti-radiation pills skyrocketed from $15 to over $200 per unit. We expect to see a similar effect in coming weeks and months for preparedness equipment like gas masks and NBC body suits as tensions on the Peninsula heat up.

War is coming. President Trump has made this very clear and North Korea does not appear to be heeding his warning. All bets will be off once the missiles start flying.

Because all three of the world’s major super powers will be involved in one way or another it is not only possible, but quite likely that things could spiral out of control very quickly.

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SocGen: “Are We Just Prisoners Here, Of Our Own QE?”

In the aftermath of recent hawkish jawboning by central bankers around the globe, and especially FOMC members who now appear set to hike even if only to just spite momentum chasing market algos by “shocking” easy liquidity conditions in tightening as Goldman suggested in May, SocGen’s Kit Juckes asks a more existential question: channeling the eagles he wonder if we “Are we just prisoners here, of our own QE?” and points out that as a result of the $15 trillion in CB liquidity injections, the US is “sort of” stuck in a 1990s-style Japanese “lost decade” and the impact on the global economy has been minimal yet “we’ve all seen the political consequences.” As a result, he blasts any idea that the ECB will be able to exit its own “Hotel California” any time soon if ever:

I meet a lot of people while I talk to clients who think the ECB simply won’t be able to escape its current policy setting because a stronger currency is too damaging. I think they’ll try, both to contain the currency, and to exit QE, because pressure within the ECN demands it, and practicality demands that they slow down.

Luckily, thanks to Bullard’s guidance from last week, we already know that when the exit attempt fails, and leads to a sever recession, the Fed and central banks will have no choice but to unleash even more QE, and so back to square one.

Here is the key excerpt from his morning note:

I was tidying up at home and ran into a copy of International Economy from the summer of 2009, which featured 31 interviews of economists answering the question ‘is America economically headed for a 1990s-style Japanese “lost decade” of stagnant growth?’ I thought the best observations were that the US entered the current cycle with a savings rate that was far too low (Bacon), and that a zero interest rate equilibrium isn’t conducive to innovation (Mann). The answer 8 years on though, is ‘sort of’. GDP growth has averaged 2%, ¾% per annum slower than in 2000-2007, and real wages have grown by 0.6% per annum, compared to 1.3% in the earlier period. We’ve all see the political consequences.

 

 

Apart from being a good read on a day whose economic highlight is apparently going to the FOMC Minutes at 7pm BST, what strikes me, looking back to the immediate post-crisis analysis, is that while several people understood by then that the recessions which follow a financial crisis tend to linger (‘This Time is Different’ was published on September 1 2009), the idea that we could be trapped by zero/low rates(and then by QE) was not yet fashionable. And it’s very relevant now, as the ECB ponders how to taper its bond purchases without causing trouble for Europe’s bond markets and without sending the euro higher. I meet a lot of people while I talk to clients who think the ECB simply won’t be able to escape its current policy setting because a stronger currency is too damaging. I think they’ll try, both to contain the currency, and to exit QE, because pressure within the ECN demands it, and practicality demands that they slow down. The thought the ECB will resist pressure though, is still leading many to look at the way EUR/USD has out-performed the tightening in EUR/USD, and look for cheaper levels to buy Euro. There’s sense in that, but if we break 1.14 in these quiet markets, the danger is that we see another spike higher.

Source: SocGen

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CNN Blackmails Reddit User Over Trump Wrestling Video, Threatens To Expose Identity

originally published at iBankCoin.com,

CNN is taking heat for threatening to publish the identity of a private citizen who posted a video lampooning the network.

Redditor ‘HanAssholeSolo’ is credited as the creator of a clip showing President Trump beating up a man with a CNN logo superimposed over his face, which the President then tweeted on Sunday morning.

 

In response, CNN and it’s MSM brethren caught the vapors – with pundits accusing the President of inciting violence against journalists. CNN media reporter Brian Stelter tweeted this pissy little screed:

 

While the White House has said the video didn’t come from Reddit, CNN’s Andrew Kaczynski  – a total dick, went on a deep dive, uncovering now-deleted posts from ‘HanAssholeSolo’ which the network deemed offensive. CNN decided not to publish the the user’s personal details, for now, because HanAssholeSolo has ‘showed his remorse’ for the ‘offending posts’ and ‘ugly behavior’ – effectively threatening to expose a private citizen if he doesn’t stay in line.

 

Apology

HanAssholeSolo issued an apology on Reddit Tuesday, calling the video a “prank, nothing more.”

“The meme was created purely as satire, it was not meant to be a call to violence against CNN or any other news affiliation… …I had no idea anyone would take it and put sound to it and then have it put up on the President’s Twitter feed.”

Here’s what people thought about that:

 

Meanwhile, CNN’s Andrew Kaczynski has said that people are misinterpreting the article.

 

Sure Andrew… CNN isn’t publishing his name “because he is a private citizen” who “showed remorse,” yet you reserve the right to expose his identity if you don’t like how he behaves in the future. Sounds like a threat.

How did they find him?

While CNN maintains they were able to link HanAssholeSolo’s posts to his Facebook account, a 4chan user claiming to be a CNN insider, suggested that CNN obtained his IP address from his ISP and ‘unmasked’ him.

 

EPIC REACTIONS

CNN’s latest blunder follows a devastating week for the network, whose last shred of credibility was destroyed in a blaze of glory by James O’Keefe last week. Reactions to the network’s threat to expose (or ‘Dox’) Redditor HanAssholeSolo have been hilarious… you can see for yourself by searching the hashtag #CNNBlackMail on Twitter.

 

Finally – 4chan has declared WAR

 

This should go well for CNN…

In summary: 

via http://ift.tt/2sp7Whr Tyler Durden