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Authored by Howard Kunstler via Kunstler.com,

A most curious feature in the current low state of American politics is the delusional thinking at both ends of the political spectrum. Both factions have gone off the rails mentally, and the parties they represent race toward oblivion like Thelma and Louise in their beater car. More ominously, there are no new factions with a grip on reality even beginning to form anywhere in the background – as in the 1850s when the Whigs foundered and the party of Lincoln segued into power.

To see the Democrats go on about “Russian collusion” you would think we were watching a rerun of the John Birch Society in its heyday. Americans who have done business in Russia as private citizens are being persecuted as though they were trading with the enemy in wartime. Newsflash: we are not at war with Russia, which, by the way, is no longer the Soviet Union. It is one of many European countries that Americans are entitled to do business in — even in the case of General Mike Flynn accepting a $20,000 speaking fee from the RT news company. Has anyone noticed that Ben Bernanke routinely  takes $200,000-plus speaking fees in many foreign countries whose interests are not identical to ours and no one is persecuting him.

Likewise, the insane idea that it is malfeasant for high public officials to speak to Russian officials, or for the president to share sensitive strategic information with them, especially about genuine mutual enemies such the various Islamic jihad armies. Since when is that beyond the pale? Well, since January of this year when the Democrat Party ordained that members of the Trump transition team were forbidden to speak to Russian diplomats at the highest level. Do you suppose that, in the hothouse of Washington, incoming foreign policy officers of Obama’s government had no conversations with foreign diplomats between the election of 2008 and Obama’s inauguration? The idea is laughable.

Even more disturbing to me personally, as someone who registered as a Democrat back in 1972, are the disgraceful and dangerous ideas emanating from the university world, which is universally dominated by the Left. For example, the recent movement on several campus to re-segregate student housing by race — in the name of “diversity and inclusion.” This is a species of doublethink that would make George Orwell gasp, and I have yet to hear of a college president or dean who dares to object. The sanctioning of this deranged hypocrisy is shaping a generation that could easily turn into political monsters when they eventually come into power — and that coming-to-power may coincide with much more desperate economic conditions on the road ahead.

Not long ago, the Dem-Progs’ mouthpiece The New York Times ran a front-page story (a video, actually, on their Web edition) titled A Gender Fluid Mother’s Day, featuring a man pretending to be a woman reading to children. Notice that The Times’ official link actually says “mothers-day-gender-drag-queen-story-hour.” I didn’t make this up. It’s part of the newspaper’s long campaign to erase the boundary between the sordid and the normative, and to ram it down the public’s throat as good medicine. Doesn’t the newspaper of record have better things to devote its front page to? Are there not other issues of public life more urgent than valorizing drag queens? And to what end are they campaigning for this? A utopian extinction of sexual categories?

The party of the right, the Republicans, have made themselves hostages to the marginal personality of Donald Trump, who prevailed over a cast of Republican empty suits in the pathetic and appalling primary contests of last spring. The Republican party has not demonstrated that it has the dimmest idea what is going on “out there” in the very flyover districts its minions and flunkies pretend to represent, or that they believe in anything not cynically calculated to bamboozle the economically immiserated classes left behind by their deliberate asset-stripping approach to the public interest. Since the very get-go of Trumptopia, it appears that the Golden Golem of Greatness will finally sink the Republican Party — or perhaps just drown it in Grover Norquist’s famous bathtub.

My own guess is that in last-ditch desperation, the Republicans will not just abandon the president but actively join his adversaries on the other side to drive him out of the White House.

And then, rightly, wrongly, or foolishly, you will see the immiserated former working class actually take up arms against the government for toppling their hero, and that will be the end of the fake faux-financialized economy that ought to be the real news you’re not reading about in The New York Times.

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Content originally published at iBankCoin.com

 

This is splendid. Hillary addressed her alma mater, Wellesley College, telling the students how fucked up Trump’s budget was — because it didn’t include all sort of spendthrift allocations into ruinous programs that have laid waste of the federal balance sheet over the past 15 years.

She said Trump was going after heroin addicts, retards, kids in school, sowing division by pitting neighbor against neighbor. She called the budget an ‘unimaginable cruelty’ because it specifically goes after poor people and the elderly.

MORE IMPORTANTLY, Trump’s refusal to bend the knee to the environmental mafia can only mean he’s a grave danger to the country and the world.

Oh, and his budget is also a trillion dollar mathematical illusion, a parlor trick, sort of like all of the polls that showed her up by 5 points the night before the election.

Hilldawg, talking shit

Not a single god damned man on that stage.

via http://ift.tt/2r4TafW The_Real_Fly

One of the frequent reasons cited for the failure of the US housing sector to rebound to its pre-recession levels, is the lack of household formation among young American adults and specifically the unwillingness, or inability, of Millennials, which last year overtook Baby Boomers as America’s largest generation…

… to move out of their parents’ basement, or stop renting, and purchase their own home. Now, a new study from Apartment List confirms the underlying problem: nearly 70% of young American adults, those aged 18 to 34 years old, said they have saved less than $1,000 for a down payment. This is similar to what a recent GoBanking Survey found last year, according to which 72% of “young millennials”- those between 18 and 24 years old – had $1,000 in their savings accounts and 31% have $0; a sliver (8%) have over $10,000 saved. Of the “older millennials”, those between 25 and 34, 67% had less than $1,000 in their savings accounts, 33% have nothing at all, and 15% have over $10,000.

As the WSJ frames it, with most millennials having saved virtually nothing for a down payment on a home “many will face steep obstacles to homeownership in the years ahead.” It also means that the US housing market, traditionally the bedrock of middle-class American wealth, may never recover to levels seen during the prior economic cycle which incidentally peaked as the housing bubble burst, scarring an entire generation with the vivid memories of what happens when millions of Americans rush to overpay for homes.

Which is not to say that US housing is languishing, on the contrary. As we showed earlier this week, in the first quarter of 2017, the number of California homes that sold for $1 million or more totaled 10,562 up 11.7% year over year and the highest on record for a first quarter.

However, while the 1% (or even 10%) of America’s wealthiest buy and sell trophy real estate among each other (or to Chinese oligarchs) with impunity, creating another bubble in luxury real estate, for the vast majority of America, it’s “middle class”, homeownership is becoming an increasingly elusive dream, forcing many to contend with renting indefinitely.

And, going back to the original study, the culprit appears to be the inability, or unwillingness, or America’s youth to save because according to Apartment List, even senior members of the age group are falling short. Nearly 40% of older millennials, those age 25 to 34, who by historical measures should already own or be a few years away from homeownership, said they are saving nothing for a down payment each month.

Here is the punchline: the vast majority—some 80%—of millennials said they eventually plan to buy a home. But 72% said the primary obstacle is that they can’t afford it.

That’s a pretty big obstacle as the study’s creator admitted. “It’s encouraging that millennials do want to buy homes. It suggests that they are delaying forming households but they’re not giving it up,” said Andrew Woo, director of data science and growth at Apartment List. “The biggest reason [they aren’t buying] is because of affordability.”

This is how America’s most troubled generation sees the problem in their own words: Catie Peterson, a 22-year-old graphic designer in Fort Lauderdale, Fla., said she doesn’t expect to start saving for a down payment for another five years or so. “I barely have enough savings to cover my car if it were to break down,” she said. Peterson said she pays $975 a month in rent for a small one-bedroom apartment, which is about one third of her paycheck, leaving little room to save.

“Once I get settled in my career and settled in my family, I think buying a house would be reasonable.” It would, but good luck finding something that is affordable enough for the bank to give you a mortgage.

As for the main reasons cited by Millennials why they are unable to save any money, these should be familiar to regular readers: they include student loan debt, rising rents and the slow starts many got to their careers during the recession. Furthermore, with many living in vibrant urban centers with ready access to restaurants, bars and entertainment might, saving seems less urgent. Furthermore, many are children of the affluent baby boomer generation and some expect their parents to give them a boost when the time comes, i.e., they expect to inherit their parents wealth. In total, some 25% of millennials ages 25 to 34 expect to receive help from friends or family, according to the survey. Still, three-quarters said they expect to receive less than $10,000, which might not be enough to close the gap.

* * *

It was not all bad news: the study found that some young people, if not nearly enough, may be saving more. On average, millennials who make more money save a smaller share of their incomes. Those making less than $24,000 save about 10% of their incomes, for example, while those making more than $72,000 save just 3.5%, according to the survey. Also, more millennials are finding a way to buy homes than a few years ago. First-time buyers have accounted for 42% of buyers this year, up from 38% in 2015 and 31% at the lowest point during the recent housing cycle in 2011, according to Fannie Mae (still, a first-time buyer is anyone who hasn’t owned a home in the past three years, a group that could include older people as well.)

Unfortunately for the generation that represents America’s future, the bad news dominates, and as the WSJ concludes many millennials face daunting odds: “less than 30% of 25- to 34-year-olds can save enough for a 10% down payment in the next three years, while just 15% could save that much within a year, according to the Apartment List survey.”

Of course, there is a loophole. As we reported last week, programs are being rolled out to allow first-time buyers to purchase homes with even smaller down payments.  In fact, none other than the bank which had to be bailed out less than a decade ago, Bank of America, recently announced intentions to slash down payments to help Millennials. Speaking to CNBC, BofA CEO Brian Moynihan, the proud owner of Countrywide Financial, said that his mission is to reduce mortgage down payment requirements to 10% for traditional loans.  Per CNBC:

“But, you know, I think at the end of the day is people forget that, at different points in your life and different points on what you’re doing in life requires you to think about housing differently as a place for you and your friends, as a place for you and maybe your significant other, and then ultimately, a place for family. That drives change. And so yes, it’s taken more time. And we talked a lot about this, you know, four or five years ago, that if you require a 20% down payment, it takes just a little more time to accumulate 20% than it would 3% or none, which is what the rules were for a short period of time.”

“So our goal, going back to regulatory reform, is should you move the down payment requirement from 20% to 10%? Wouldn’t introduce that much risk.”

Of course, as we pointed out last week, we are certain that Moynihan’s sole purpose for wanting to
lower down payments is to help those poor millennials living in mom’s
basement, and has nothing to do with the fact that’s Bank of America (and Wells Fargo) has lost a ton of
fee revenue to government-backed loans that only require a 3% down
payment.

Why not?  Gradually destroying lending standards worked out really well last time around.

But we digress, so here is 33-year-old data analyst Gina Fontana who explained her problem so simply, even a Fed president could get it: she said she has saved a bit for a down payment but doubts she will use it anytime soon because home prices are so far out of reach. She added that she had saved enough for a 10% down payment on a $200,000 house when she was living in Philadelphia, but couldn’t buy anything in the neighborhoods she liked.

Now she has moved to Berkeley, Calif., and said the area’s home prices—where starter homes can go for close to $1 million—make the odds of buying a home essentially zero. “I don’t see that ever happening,” she said. “I just prefer to travel.”

Which is why it is only a matter of time before everyone throws in the towel on the housing recovery, and Goldman launches its first millennial travel-collaterialized securitization product (and its synthetic derivative).

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

Trump's massive tax reform plan is "just a bunch of happy talk" exclaimed former Speaker of the House John Boehner during a keynote address at an energy conference today adding that "everything else he’s done (in office) has been a complete disaster."

As The Hill reports, Boehner gave a keynote address at KPMG’s annual Global Energy Conference, where he said his faith in the passage of a tax code overhaul is fading.

“I was a little more optimistic about it early in the year; now my odds are 60/40,” the Ohio Republican said, according to energy-sector news publication RigZone.

 

“The border adjustment tax is deader than a doornail. Tax reform is just a bunch of happy talk.”

 

“Everything else he’s done (in office) has been a complete disaster,” the Ohio Republican said, according to the publication.

 

“He’s still learning how to be president.”

Additionally, Boehner said that while Republicans would fix some problems of Obama’s law, repeal and replacement is “not going to happen.”

 He added, “Republicans never ever agree on health care.”

Boehner said he’s been friends with Trump for 15 years, but still has a hard time envisioning him as president. He also said Trump shouldn’t be allowed to Tweet overnight.

As AP adds, the former Speaker also hit back at some House Democrats’ calls for Trump’s impeachment…

“Talk of impeachment is the best way to rile up Trump supporters,” he said.

 

“Remember, impeachment is not a legal process; it’s a political process.”

David Schnittger, a spokesman for Boehner, confirmed the comments on Friday. Boehner made it clear he’s happier now that he’s left Capitol Hill.

“I wake up every day, drink my morning coffee and say, ‘Hallelujah, hallelujah, hallelujah,’” he said, according to Rigzone.

And unsurprisingly, Boehner said he doesn’t want to be president.

“I drink red wine. I smoke cigarettes. I golf. I cut my own grass. I iron my own clothes. And I’m not willing to give all that up to be president,” he said.

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Authored by Charles Hugh Smith via OfTwoMinds blog,

If you want to understand why we're fragmenting as a society, start by looking at the asymmetric burdens imposed by inflation.

In our household, we measure real-world inflation with the Burrito Index: How much has the cost of a regular burrito at our favorite taco truck gone up?

The cost of a regular burrito from our local taco truck has gone up from $2.50 in 2001 to $5 in 2010 to $6.50 in 2016.

That’s a $160% increase since 2001: 15 years in which the official inflation rate reports that what $1 bought in 2001 can supposedly be bought with $1.35 today.

My Burrito Index is a rough-and-ready index of real-world inflation. To insure its measure isn’t an outlying aberration, we also need to track the real-world costs of big-ticket items such as college tuition and healthcare insurance. When we do, we observe results of similar magnitude.

Our money is losing its purchasing power much faster than the government would like us to believe.

According to official statistics, inflation has reduced the purchasing power of the dollar by a mere 6% since 2011: barely above 1% a year. We’ve supposedly seen our purchasing power decline by 27% in the 12 years since 2004—an average rate of 2.25% per year.

But our real-world experience tells us the official inflation rate doesn’t reflect the actual cost increases of everything from burritos to healthcare.

The cost of a regular taco was $1.25 in 2010. By official standards, it should cost a dime more. Oops—it’s now $2 each, a 60% increase, six times the official rate.

The cost of a Vietnamese-style sandwich (banh mi) at our favorite Chinatown deli has jumped from $1.50 in 2001 to $2 in 2004 to $3.50 in 2016. That $1.50 increase since 2004 is a 75% jump, roughly triple the official 27% reduction in purchasing power.

So let’s play Devil’s Advocate and suggest that these extraordinary increases are limited to “food purchased away from home,” to use the official jargon for meals purchased at fast-food joints, delis, cafes, microbreweries and restaurants.

Well, how about public university tuition? That’s not something you buy every week like a burrito. Getting out our calculator, we find that the cost for four years of tuition and fees at a public university will set you back about 8,600 burritos. Throw in books (assume the student lives at home, so no on-campus dorm room or food expenses) and other college expenses and you’re up to 10,000 burritos, or $65,000 for the four years at a public university.

University of California at Davis:
2004 in-state tuition $5,684
2015 in state tuition $13,951

That’s an increase of 145% in a time span in which official inflation says tuition in 2015 should have cost 25% more than it did in 2004, i.e. $7,105. Oops—the real world costs are basically double official inflation—a difference of about $30,000 per four-year bachelor’s degree per student.

Here’s my alma mater (and no, you can’t get a degree in surfing, sorry):

University of Hawaii at Manoa:
2004 in-state tuition: $4,487
2016 in-state tuition: $10,872

Sure, some public and private universities offer tuition waivers and financial aid to needy or talented students, but the majority of households/students are on the hook for a big chunk of these costs. And remember that many students are paying living expenses, which doubles the cost of the diploma.

If you think I cherry-picked these two public universities, check out this article.

So the divergence between real-world costs and official inflation isn’t limited to burritos; it’s just as bad in items that cost tens of thousands of dollars.

As for healthcare: feast your eyes on this chart of medical expenses.

According to official inflation calculations, the $12,214 annual medical costs for a family of four in 2005 "should cost" around $15,000 today.

Oops—the actual cost is $25,826, $10,826 higher than official inflation, which adds over $100,000 in cash outlays above and beyond official inflation in the course of a decade.

So let’s add the $30,000 per university student above and beyond inflation for two college students over a decade and the $100,000 in healthcare costs that are above and beyond inflation over that decade, and we get $160,000.

Since deductions for education and healthcare don’t completely wipe out income taxes, the household has to earn close to $200,000 more over the decade to net out the $160,000 to pay typical college and healthcare costs above and beyond what education and healthcare “should cost” if inflation in big-ticket items had actually tracked official inflation.

$100,000 here, $100,000 there and pretty soon you’re talking real money in a nation in which median household income is around $57,000 annually.

So if a household’s income kept up with official inflation over a decade, that household would have to earn at least $20,000 more per year just to keep pace with real-world, big-ticket cost increases.

That’s the problem, isn’t it? If the household’s wages only kept up with inflation, there isn’t another $20,000 a year in additional income needed to pay these soaring big-ticket costs. So the shortfall has to be borrowed, burdening the household with debt and interest payments for decades to come, or the kids don’t attend college and the household goes without healthcare insurance.

Once again, real-world costs have soared at a rate that is almost six times higher than the official rate of inflation.

The reality is real-world inflation in big-ticket essentials is crushing every household that doesn’t qualify for government subsidies of higher education, rent and healthcare.

No wonder the political and financial Elites don't care about inflation: their incomes have soared far above mere inflation. When you're skimming millions, who cares about a mere $150,000 for a university education, or $25,000 for healthcare insurance?

Do you reckon the lobbyists for Big Pharma and the rest of the healthcare racket are spending millions lobbying politicians to slash the soaring costs of healthcare? Do you think all the universities collecting billions in government-guaranteed student loans are lobbying politicos to reduce loans to debt-serf students? Sorry, but that's not how pay-to-play "democracy" works.

In pay-to-play "democracy," the goal is to raise prices without improving service, and have the federal government enforce this racket on powerless debt-serfs.

If you want to understand why we're fragmenting as a society, start by looking at the asymmetric burdens imposed by inflation. The Elites aren't worried about inflation because they don't even feel it. And since they rule to benefit the top 5%, they don't really care what the bottom 95% are experiencing.

In other words, "Let them eat cake."

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Earlier this week we highlighted sections of a recently unclassified FISA Court order which found that the Obama administration routinely conducted “widespread” illegal searches of American citizens, an issue which the court described as a “serious fourth amendment issue” (see “FISA Court Finds “Serious Fourth Amendment Issue” In Obama’s “Widespread” Illegal Searches Of American Citizens“). 

Today, as highlighted by Circa, we find the that FBI, led by James Comey, was one of the biggest offenders when it came to improper usage of foreign-sourced intelligence on American citizens.  Per the FISA court order (which can be found here), the DOJ conducted a review of the FBI’s handling of so-called “Section 702-acquired information” beginning on March 9, 2016 and what that review found was fairly disturbing. 

Among other things, the DOJ found that the FBI routinely shared “raw FISA information” on American citizens with “private contractors”…to paraphrase, the FBI took illegally sourced intelligence on American citizens (no warrants required) and shared it with random private citizens working at non-government firms.

“On March 9, 2016, DOJ oversight personnel conducting a minimization review at the FBI’s [redacted] learned that the FBI had disclosed raw FISA information, includined but not limited to Section 702-acquired information, to [redacted]...largely staffed by private contractors.”

 

But it wasn’t just that one time…

“For these reasons, the government concluded that the FBI had given the information to the private entity [redcated], not to an assisting federal agency.”

 

All of which resulted in the following punchline from the FISA Court:

“The Court is nonetheless concerned about the FBI’s apparent disregard of minimization rules and whether the FBI may be engaging in similar disclosures of raw Section 702 information that have not been reported.”

 

But sure, our intelligence agencies should be blindly trusted to spy on American citizens without the hassle of warrants…they would never abuse those powers, right?  Plus, it’s for our own good…

“Those who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety.” – Ben Franklin

via http://ift.tt/2r5vLge Tyler Durden

For weeks I’ve been noting that stocks are being driven by a market rig.

By way of review, that rig is as follows:

1)   Someone slams the VIX lower.

2)   This forces risk-parity funds to buy stocks, usually the FANGs or large-cap Tech names (Facebook, Apple, Netflix, Google).

3)   FANGs rally, which due to the weighting in the S&P 500, forces the overall market higher.

The last point is key.

When you remove the influence of FANG stocks (Facebook, Apple, Netflix, and Google) by giving every company in the index equal weighting, you find that the market has yet to reclaim its former peak May peak.

Why does this matter?

Because ALL market rigs, no matter how clever, ultimately fail. And when they do, the failure can be MASSIVE.

Remember this one? This was a market rig than worked for months… and then failed spectacularly in a single day:

A Crash is coming… it's going to horrific.

We offer a FREE investment report outlining when the bubble will burst as well as what investments will pay out massive returns to investors when this happens. It's called The Biggest Bubble of All Time (and three investment strategies to profit from it).

Today is the last day this report will be available to the public.

To pick up your FREE copy…

CLICK HERE!

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

 

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