Authored by Kent Moors via OilPrice.com,

Two crucial things happened last week.

The first you may have noticed – oil prices moved back up briefly.

As for the second, most so-called “experts” seemed to have missed.

See, the environment we’re seeing in energy markets is very different from what we saw only a week ago, when oil prices were also rising.

Because last week also saw – for the first time in world history – a reigning Saudi Arabian monarch in Moscow for talks with Russia’s head of state.

Historically, Russia has been much closer to Iran – Saudi Arabia’s main regional enemy.

Now, King Salman and President Putin are expected to endorse the plan to extend the OPEC-Russia deal to cut oil production and boost prices beyond the current end date of March 2018.

But that’s not all they’re going to talk about…

Other, more far-ranging matters will also be on the agenda, including the war in Syria.

And the catalyst for this huge shift in global geopolitics is surprisingly simple.

It’s all about America’s record-breaking oil exports…

Russia and Saudi Arabia Need Each Other… for Now

Now, there’s no indication that Russia and Saudi Arabia are on the road to an alliance on anything beyond oil prices.

Even then, that accord remains only as long as it is in the subjective interest of the parties.

Nonetheless, it is disquieting to Washington that any such prospects may be on the horizon… or that U.S. oil exports may be introducing a range of foreign policy concerns.

From an energy perspective, the main issue at hand is the OPEC-Russian deal to cap oil production, which is now almost certain to continue further than the agreed-on end date of March next year.

And after some concerns had been raised over individual OPEC members exceeding the quotas the deal assigned them, evidence is now emerging that the restraint is holding.

As I’ve several times before here in Oil & Energy Investor, there’s no genuine alternative.

The major global sources of oil need to allow the worldwide market to rebalance.

That’s the only genuine basis for stability and a slow increase in prices.

Now, with some of Libya’s oil production coming back on line, it may seem like there’s less flexibility for some producers to increase their crude output and still “hide” within the overall figures set by the cap accord.

But that’s ignoring four major factors that could cut into oil supply, and send prices higher…

Massive problems are accelerating in Venezuela, Nigerian extraction levels remain under threat from domestic instability, non-OPEC producer Mexico faces a continuing shortfall, and even the news from Libya – that a major field is coming back online – belies the ongoing civil unrest there, and lack of forward production expectations.

The international balance between supply and demand will provide a rising price.

Yet that rise will remain a gradual one.

And this balance doesn’t actually mean that there will only be exactly as much oil available as is needed at any given time.

That kind of “just in time” availability, where crude is lined only to meet immediate demand, is a certain recipe for high volatility and huge spikes in price.

Even a minor problem could create chaos in the markets.

Rather, a stable balance presupposes a continuing surplus of excess market volume.

That not only cushions the pricing dynamics from wide swings in demand, but it also allows producers the luxury of being able to predict the price range.

Anybody in the business will tell you that this predictability is far more important to maintaining profit margins than are the occasional large jumps in price.

An operator’s financial survivability requires that futures sales be calculated into the estimate of the cost of producing the oil and selling it on.

These prices, called “wellhead prices,” are the real revenue a producer receives in the first arms-length transaction as oil comes out of the ground.

These prices are also well below the market price quoted throughout a trading day.

U.S. Oil Production is at Record Highs

But the primary caveat in all of this talk about an emerging balance remains U.S. production.

It’s once again increasing and now has a more immediate impact on global pricing levels than has been the case previously.

That’s because American exports have become a major factor in the global market.

For some time, oil prices have not been determined by what occurs in developed markets of North America and Western Europe.

West Texas Intermediate (WTI) and Brent, the benchmark crude rates set in New York and London, may dictate daily trade. Yet the demand fueling the market is generated in developing areas worldwide.

Until recently, the U.S. only indirectly impacted upon the international determination of price.

In the past, the only effect came from how much the American market imported from elsewhere.

For over four decades, Congress banned the export of crude oil from the country on national security grounds.

Those restrictions resulted from the Arab oil embargo boycott of the U.S. during the 1973-74 Arab-Israeli War.

Today’s situation, where America has huge domestic extractable reserves of shale and tight oil, combined with significant improvements in production efficiency, has turned those security concerns obsolete.

There’s also the simple fact that no producing country in the world (with the possible exception of Iran, for political reasons) can afford not to sell to the U.S.

As a result, as part of a budget reconciliation two years ago, Congress lifted the ban on crude exports.

American refineries by that point were already leading the world in the export of processed oil products.

What followed was a quick move of American crude oil production back into the market…

Despite the Hurricanes, Oil Exports are Breaking Records

Exports had risen to a 1.1 million barrel a day level by the time Hurricane Harvey hit the Texas coast.

The hurricane slashed exports 60 percent. Refineries were also taken off line.

That combination should have pulverized crude oil prices, at least if you listened to the so-called “experts” on TV.

But that didn’t happen.

Instead, what happened next was nothing short of astounding.

Exports swiftly returned. Record levels were reached in each of the last two weeks.

As of last Friday, the U.S. was exporting 1.98 million barrels a day. The rising level of American volume in the broader market now has an impact on global price and the saliency of the OPEC-Russian agreement limiting production.

Because remember, U.S. production is not a party to that agreement.

The rising spread between WTI and Brent has also served as an additional inducement to increasing U.S. exports. The more international Brent prices have been increasing quicker than America’s WTI.

The difference, calculated as a percentage of WTI (the more accurate way of doing this), has now averaged more than 10 percent for the past 30 consecutive daily sessions – something that has not happened in over six years. Related: OPEC Producers Unmoved By U.S. Shale Threat In Asia

The advantage to American producers is simple. Exporting oil that costs less to produce at home into markets were the oil price is higher is a direct route to improving bottom lines.

As long as this situation remains, there will be additional U.S. production coming, because it’s profitable to extract and export.

And the more U.S. oil is exported, the less immediate effect higher production here has on domestic prices.

But this is also resulting in changes to foreign expectations.

Some of these are having spillover effects in other quarters…

Including sending Saudi Arabia and Russia into each other’s arms…

At least for now.

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

Content originally published at iBankCoin.com

 

Over the weekend it was announced that President Trump was going to ditch restrictions that banned people from buying health instance across state lines. For the love of God, he’s going to allow competition and not force you to buy from your state monopoly. While this might sound wonderful, it will expedite the death of Obamacare — which is probably the gameplay here.

Trump can’t get his way, so he’s gonna burrrrn the whole kit and caboodle down.

Source: Washington Examiner

The plans offered by associations would be less expensive because they wouldn’t have the same requirements as Obamacare coverage. For instance, they wouldn’t be required to cover customers with pre-existing illnesses and could either deny coverage or charge these customers more. They also would not be required to provide coverage for a range of medical care, from addiction to maternity services. Insurers would be likely to sell coverage from a state with the fewest restrictions, which is why its supporters bill it as a move that would allow a long-stated conservative goal to sell health insurance across state lines.
 
Association health plans used to be more common before Obamacare, which placed restrictions on their use.
 
Lifting these protections would offer less comprehensive coverage, but would also make health plans less expensive. Critics worry that they set people up for “junk insurance” and would further destabilize the Obamacare exchanges, which already are plagued with mass exits by insurers and double-digit premium hikes. The move, critics say, could result in an even sicker population on the exchanges while healthier customers are picked off into the association health plans.
 
Still, the proposal is popular with conservatives. Middle class customers who don’t receive subsidies under Obamacare are facing the prospect of buying more expensive coverage in 2018 through Obamacare’s exchanges, and could avail themselves of the option. Through a short-term health insurance option, they face similar coverage as those sold on association health plans.
 
The increases these customers face come as a result of lack of profitability in the markets as well as vast uncertainty over what the Republican-controlled Congress and the Trump administration would do about the law as they sought for months to repeal or overhaul portions of it.

 
A backdoor way of totally destroying Obamacare and there is nothing anyone can do about it — chaos theory.

Healthcarefags, BTFO.

ESRX -5%, ABC -3%, CYH -6%, THC -5%, LPNT -3%, CVS -3%, DVA -8.5%, AAC -5.5%, ACHC -4%.

The only outlier: HIIQ.

Health Insurance Innovations: Trump rollback benefits HIIQ — Canaccord Genuity (18.05 +1.15)

Canaccord notes that in light of WSJ reports that President Trump intends to roll back certain health insurance regulations concerning short-term medical insurance, which should have a direct benefit to Tampa-based Health Insurance Innovations (HIIQ), firm feels, “This should be positive for HIIQ: Even though 2Q’17 was still a strong quarter, we believe results would have been even better (specifically at Agile) if the Obama policy did not go into effect; thus, we believe the reversal of the three-month limitation rule will be positive for growth at Agile in addition to providing a greater sense of legitimacy for STM insurance, especially in light of the recent negative sentiment generated by the various short reports. Furthermore, we would point out that a main driver of the stock’s performance since Trump won the election was the potential for him to de-regulate the insurance industry and reverse the three-month limitation; thus, it is encouraging to see this play out.”

via http://ift.tt/2gq6g3b The_Real_Fly

Being dragged off a plane may not be the biggest fear for travellers nowadays…

As passengers waited patiently to board their American Airlines flight from Hong Kong to LA, a few, then all, suddenly noticed the plane  – parked close to the terminal – had caught fire.

As The Mirror reports, footage from inside the airport shows families, including a young child, looking at the huge flames through the glass.

Many people recorded the extraordinary scene on their mobile phones.

One man was injured as he tried to escape the flames, and is being treated for non-life threatening injuries.

The fire was put out by firefighters as passengers watched the drama from the safety of the terminal building.

A spokesman for American Airlines said: "An external piece of loading equipment had a mechanical issue and caught fire while preparing to put cargo in the hold of American Airlines flight 192 from Hong Kong (HKG) to Los Angeles (LAX).

"As a result, a pallet on the loading equipment containing non-hazardous goods also caught fire.

 

"No passengers or crew were onboard or injured.

 

"The operator of loading equipment is being looked after by medical professionals with non-life threatening injuries.

 

"Flight AA192 has been cancelled and customers have been rebooked on other flights."

So that's reassuring then…

 

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Authored by Tom Sanzillo via ValueWalk.com,

President Trump, who knows a thing or two about bankruptcy, says Puerto Rico’s public debt should be wiped out. We agree.

The commonwealth owes bondholders somewhere on the order of $70 billion, with most of that debt tied to general-obligation bonds, revenue bonds and bonds issued by the Puerto Rico Electric Power Authority (PREPA).

Ahead of the wide devastation wrought by Hurricanes Irma and Maria, we were of the view that the commonwealth could manage perhaps 20 to 30 percent of its general-obligation and revenue-bond debt and that PREPA could pay off perhaps 30 percent of its debt.

Now, as the island and its economy reel from the carnage of the hurricanes, we see the only viable way forward as a zeroing-out of the bonds in question and an immediate cessation of interest payments. Puerto Rico’s badly-crippled economy must rebuild, and the only way for that to happen is for legacy governmental debt to be handled in a way that won’t impair the restoration of markets and physical development.

This is a necessary remedy that will affect three sets of bondholders.

First, the large investment houses like Franklin Templeton, Oppenheimer, Citi and JP Morgan, which own large chunks of bonds. These investment houses, however, have vast and diverse holdings in the trillions of dollars that are hedged against just about every eventuality.

 

Second, a host of hedge funds that bought into the Puerto Rico bond market at a discount. These hedge funds have made extraordinary gains on this debt by way of interest-rate payments on the face value of the discounted bonds.

 

Third, small investors who live in Puerto Rico and elsewhere who stand to suffer the most. These investors have no hedges against these losses, and (unlike hedge funds) have not reaped extraordinary gains on Puerto Rican debt.

The way out of this is not pretty but there is ample precedent.

A considerable portion of these bonds are insured by MBIA, Ambac and Assured Guaranty, which are contractually obligated to take over payments, a reality that will cause some shock to their stock prices.

Puerto Rico has made premium payments on its insurance policies and the guarantors must make good on their promise. To help offset their losses, these companies can be given first option on future bond offerings by Puerto Rico.

Bondholders are not without recourse. They can—and should—pursue a course of action against the underwriters, law firms, accountants, financial advisors and credit-rating agencies that put the bond deals together in the first place. Clues on how to proceed can be found in a 2016 audit of PREPA debt. The Securities and Exchange Commission can be pressed now on its investigation of PREPA’s bond deals, and the agency can be instrumental in streamlining a resolution and avoiding needless litigation.

BONDHOLDERS THROUGH THE AVENUES ABOVE CAN RECOVER a modicum of their original investment, and as Puerto Rico emerges from its crisis the its government alongside the federal PROMESA board can establish a claim-resolution process for small investors, who should be paid 100 percent of their principal.

[ZH: as a reminder, Kyle Bass suggested PR bonds as good as worthless…The idea that the island, with a workforce of just 1.4 million people, will ever be able to pay back $70 billion in debt is ridiculous, he said.

These are two different questions – one is, should we help with hurricane? Absolutely. We should do everything possible.

 

Puerto Rico is just a simple math 101 question.

 

But on the debt question I just think you have to be a little crazy to think that $100 billion worth of debt or even $70 billion of on-balance sheet debt is worth anything with 1.4 million workers in an economy like Puerto Rico's.

 

…

 

When you look at sovereigns and you look at history of sovereign defaults, recoveries and wipeouts are $0.10-$0.20 on the dollar – that's what I think people are going to end up with.]

Finally, liability must be apportioned, and criminal action must result so as to restore public trust that has been damaged by the failure of a whole “stakeholder” class that is responsible for what has happened debt-wise.

The PROMESA board, whose job it is to act as a comptroller,  must come forward now and install new budgeting and debt policies, moving with an eye toward rebuilding the economy and supporting the citizenry. The board will need help from outside receivers and/or independent management. My organization, the Institute for Energy Economics and Financial Analysis, has recommended the appointment of a special inspector general.

Bond defaults in the municipal credit market are rare – especially big defaults like this one – but they happen. Moody’s Investors Services publishes an annual history of such events, and since 1970 has covered 84 instances of public bond defaults and bailouts.

Workouts typically allow some recovery by bondholders, but, more important, workouts—which vary widely by circumstance—can set the stage for borrowers to rebuild.

If the Puerto Rico economy is to have any chance of recuperation it cannot be saddled with the crushing effect of decades of bad deals.

The president presents a role model of sorts here, having been tied repeatedly to bankruptcy, and having always come back.

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Et tu, Google?

For the first time since Sen. Mark Warner began questioning whether Silicon Valley tech giants have been “doing enough” to root out and expose examples of alleged Russian interference in the November 2016 election, Google has reportedly discovered that Russia-linked operatives deceptively purchased tens of thousands of dollars’ worth of advertising on YouTube, as well as advertising associated with Google search, Gmail and the company’s DoubleClick ad network, according to the Washington Post. Google operates the largest advertising platform in the world, and YouTube is the world’s largest video-advertising platform.

According to WaPo, Google’s discovery is “significant” because the advertisements in question do not appear to be from the same Kremlin-affiliated troll farm that bought ads on Facebook, which the paper says suggests that Kremlin disinformation efforts were much broader than lawmakers and Silicon Valley had believed.

As WaPo pointed out, Google had previously played down the possibility that nefarious Russian agitators could’ve slipped past the company’s sophisticated monitoring techniques. The company has been criticized for being less willing to cooperate with Congressional investigators than Facebook and Twitter.

Of course, given the scant nature of said evidence, this suggests that reports of a separate interference campaign should be taken with a grain of salt.

Google previously downplayed the problem of Russian meddling on its platforms. Last month, Google spokeswoman Andrea Faville told The Washington Post that the company is "always monitoring for abuse or violations of our policies and we've seen no evidence this type of ad campaign was run on our platforms."

 

Nevertheless, Google launched an investigation into the matter, as Congress pressed technology companies to determine how Russian operatives used social media, online advertising, and other digital tools to influence the 2016 presidential contest and foment discord in U.S. society.

Like Facebook before it, the ad buys were small in size and probably not large enough to have any meaningful impact on the vote. The purported Russian agents reportedly spent tens of thousands of dollars on these ads, while the Clinton Campaign spent tens of millions of dollars on advertising.

Google declined to provide a comment for this story. The people familiar with its investigation said that the company is looking at a set of ads that cost less than $100,000 and that it is still sorting out whether all of the ads came from trolls or whether some originated from legitimate Russian accounts.

To be sure, the Google probe is still in its early stages, and WaPo suggests that there may still be more questionable ads out there. Google used data provided by Twitter to link some of the individuals operating pro-Russia twitter accounts to purchases of ads on its own platform.

Google discovered the Russian presence on its platforms by siphoning data from another technology company, Twitter, the people familiar with Google's investigation said. Twitter offers outsiders the ability to access a small amount of historical tweets for free, and charges developers for access to the entire Twitter firehose of data stemming back to 2006.

 

Google downloaded the data from Twitter and was able to link Russian Twitter accounts to other accounts that had used Google’s services to buy ads, the people said. This was done without the explicit cooperation of Twitter, the people said.

 

Google's probe is still in its early stages, the people said. The number of ads posted and the number of times those ads were clicked on could not be learned. Google is continuing to examine its own records and is also sharing data with Facebook. Twitter and Google have not cooperated with one another in their investigations.

Some of the ads expressed support for Donald Trump, Bernie Sanders and the Green party candidate Jill Stein. Others appear to have been aimed at fostering division in United States by promoting anti-immigrant sentiment and racial animosity.

Facebook recently handed over 3,000 ads identified as propaganda intended to disrupt the US election to Congress for review. Twitter has identified 200 "fake" accounts with pro-Russia ties, a group that includes accounts for Russia-funded English-language media organization Russia Today. And now Google has confirmed that the Russians were also active on its platform.

Since Facebook first acknowledged that a Russia-linked troll farm had been concealing its identity and purchasing ads under the auspices of fake US groups, leaks describing the content of the ads showed they targeted swing state voters, and also contained pro- and anti-Muslim and Black Lives Matter messages that were purportedly intended to provoke racist or anti-muslim sentiment, thereby “sowing dischord” in the US election process.

As the hysteria about this ostensible election meddling reaches a fever pitch, executives for Facebook and Twitter have agreed to testify before Congressional investigators on Nov. 1. Google has not said whether it will accept a similar invitation to do so.

We now wait for the deluge of outraged comments from Democratic politicians blasting Google for not doing more to screen their customers.

via http://ift.tt/2g55Dze Tyler Durden

Last week, the US Treasury Department issued its second of four reports related to President Trump’s Executive Order 13772 (on regulation in alignment with the Core Principles). The first report was on Banking, this report is on the Capital Markets, and other reports will follow over the coming months (including on asset management, insurance, products, vehicles, non-bank financial institutions, financial technology, financial innovation, and others).

As BofA notes, the main recommendation in this report was to foster growth in-line with the Core Principles. Specifically, the biggest focus was to enhance access to capital and investment opportunities, i.e. increase the number of IPOs. Indeed, the US Treasury recommended changes to encourage companies towards public ownership (particularly given that the number of public companies in the U.S. is down 50% over the past 20 year ), which would create more investment opportunities. In addition, other recommendations including helping entrepreneurs, reviewing proxy advisory firms, and revisiting the accredited investor definition to open private market investment opportunities to more investors.

According to BofA, this reco is one of the most critical for the long term growth of the capital markets and the economy. In addition to the recommendations encouraging companies towards public ownership, institutional investors that allocate capital need to refocus on longer term fundamentals versus short term momentum and the market structure needs to be revamped to benefit corporates and long term investing.

Indeed, it would be delightful if “capital markets” once again become discounting mechanisms, that rewarded careful analysis and fundamental stock selection, instead of just rampant capital inflows via passive instruments. Alas, for now that remains a pipe dream.

Meanwhile, the Treasury report recommendations are trying to make it easier for smaller companies to become public, including a review of rules and regulations (including a review of the global research settlement rules given that a common complaint from small companies is the lack of research coverage). Ironically, MiFID II out of Europe, could take research in the opposite direction, and significantly reduce the level of research coverage, particularly for smaller firms. Depending on whether MiFID II is limited to Europe or is implemented globally, as well as how pricing pans outcosts to asset managers would be 0-1% to 2-3%, and for investment banks equity revenues as 1-3% to mid-single digits, though less on total revenues given the broader revenue streams.

Yet while the collapse in IPOs in recent years, alongside shrinking investor participation in equity capital markets, has been extensively discussed, a more compelling observation by the Treasury was its view on market fragmentation, an artifact of broken markets from HFT domination; as a result the Treasury recommends changes (including the tick size) to improve equity market liquidity for small companies given the current market fragmentations (12 exchanges & ~40 alternative trading systems, ATS – Exhibit 3), reduce complexity, and harness competition in some areas (market data, order types, ATS, etc).

As BofA adds, the equity market structure has changed dramatically over the past 20 years, including regulation NMS, ATS, decimalization not to mention microwave and laser-based signal carriers and various HFT intermediaries spend hundreds of millions on the latest and greatest equipment allowing them to frontrun their competitors.

As a result, improving secondary market liquidity for small companies would be a positive for the capital markets, although the offsetting question whether there are any other material traders aside from central banks who would stand to benefit, remains open. Some of the other recommendations around simplifying order types and increasing competition for market data could benefit some areas of the capital market, yet place some pressure on others.

Some other recommendations from the Treasury include:

• Safeguarding the treasury market
• Encouraging lending through quality securitization
• Recalibrating derivatives regulation
• Ensuring proper oversight of CCPs and FMUs
• Modernizing and rationalizing regulatory structure and process
• Promoting U.S. interests and ensuring a level global playing field

And to think the Treasury hopes to get all this done before the next market crash…

via http://ift.tt/2z9NlRW Tyler Durden

Since the first of this year, banks didn’t have much to brag about, as they lagged the broad market to the upside. While lagging, they potentially built a base that could reward the owners of banks for a while going forward.

Below looks at the Bank Index (BKX) over the past 6-years-

CLICK ON CHART TO ENLARGE

Potential that the sideways choppy action in the BKX index this year was an upper-level base to spring higher off of.

This week the BKX index broke out to the upside at (1), which is bullish price action for this key sector.

Full Disclosure- Premium Members are overweight this key sector since the lows earlier this year, they own XLF, C & GS

 

The Power of the Pattern at work to save people time, improve decision-making & results.   

We identify high probability big pattern reversals and breakouts in global indices, sectors, commodities, several metals and select individual stocks

Send us an email if you would like to see sample reports or a trial period to test drive our Premium or Weekly Research

 

 

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Authored by Charles Hugh Smith via OfTwoMinds blog,

Every single line item in our entire Bernie Madoff scam of a system is cooked.

My theme this week is The Great Unraveling, by which I mean the unraveling of our social-political-economic system of hierarchical, centralized power. Let's start by looking at how the basis of governance has transmogrified from consent of the governed to consent of the conned.

In effect, our leadership leads by lying. As we know, when it gets serious, you have to lie to preserve the perquisites and power of those atop the wealth-power pyramid, and well, it's serious all the time now, so lies are the default setting of the entire status quo.

But all too many of us are willing to accept the lies because they're what we want to hear.

As any competent con-man knows, you can only con those who want to be conned. You can only scam the marks who want to believe that what's obviously too good to be true is in fact true.

The story of scams such as Bernie Madoff's isn't that canny Bernie victimized helpless wealthy people; the untold story is that all those "victims" wanted to believe that something that was obviously too good to be true–incredibly high returns, logged month after month and year after year like clockwork–was in fact true because their greed made them more than just vulnerable to being scammed–they wanted to be bamboozled by Bernie.

Victims of scams naturally deny their own culpability. It's extremely uncomfortable to admit that greed didn't just blind us to a patently impossible yield; we wanted to be conned because it felt so wonderful to believe we richly deserved unearned wealth.

All wealth is "earned" to those doing the skimming. The greatest con machine of all time, Wall Street, judiciously refers to every skim and scam as "earnings."

And so the "victims" blame our lying leaders for telling them what they want to hear. You see how the webs of self-interest reinforce each other: those atop the wealth-power pyramid secure their position by lying persuasively enough to gain The Consent of the Conned–those who give their consent to a visibly corrupt and unsustainable status quo because that status quo is promising to provide too good to be true goodies.

In other words, the lies are constantly compounding: the leadership lies to themselves– we have to lie to keep everything glued together for the good of the people–when their real motivation is to keep the system glued together because the system gives them wealth and power.

If we can be honest for a moment, we might admit that representational democracy encourages leaders to issue too good to be true promises because those promises win votes.

Those on the bottom of the wealth-power pyramid accept the too good to be true assurances because that's exactly want we want to hear: that we all deserve a piece of the unearned wealth that, like Bernie Madoff's painfully impossible scam, flows in permanent abundance via some sort of financial magic.

The books are cooked, people; we embrace a gigantic too good to be true Bernie Madoff scam of a system because it's what we want to believe and what we want to hear. Then, when the whole phantom-wealth con collapses in a heap, we quickly pull on the tattered cloak of victimhood: we were promised, we were lied to, we trusted our leaders to lead us wisely, and so on, as if the con wasn't obvious to anyone who was skeptical of too good to be true claims.

Now that the whole Bernie Madoff scam of a system is unraveling, two self-reinforcing dynamics are in play: our leadership, elected and unelected alike, are doubling down on the lies because there is no alternative–TINA. What does a liar gain by confessing the whole prosperity thing is illusory, and darn it, we can only spend what we produce in real-world surplus? Short answer: nothing, because that's not going to win elections or gain the consent of the governed.

So lies are piled on lies to the point of absurdity. But just as Bernie Madoff's wealthy marks ignored the warnings of the skeptical and mounting evidence that they were being conned, the electorate wants to believe the magical thinking is real, and so they accept the latest statistical flim-flammery as "proof" that the con is not a con.

Once again, we worship the Goddess TINA–there is no alternative. Just as our leaders are now trapped in their web of lies and false assurances, the governed are also trapped in the con because it's too painful and unnerving to admit we've willingly bought into a complete con: we're too smart to be conned, we protest; look, it's not a con, the GDP is growing and unemployment is low–and so on.

Bernie Madoff's marks made the same defensive protests: it can't be a con, look at my statement: the monthly "earnings" keep pouring in.

The books are cooked, folks, at every level of our Bernie Madoff scam of a system: the federal books are cooked; state, county and city books are cooked; corporate books are cooked; the statistical metrics are all cooked; the projections are cooked, and the estimates are cooked.

Every single line item in our entire Bernie Madoff scam of a system is cooked. Wanting to believe a con is true doesn't make it true. The power of a con rests in our great desire to believe that what's too good to be true is magically true. It isn't, but it feel so reassuring and, well, deserved for it to be true.

It's tempting to blame our leadership for perpetrating this systemic con, but every con requires marks who are willing to accept that what's too good to be true is magically true.

*  *  *

If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com. Check out both of my new books, Inequality and the Collapse of Privilege ($3.95 Kindle, $8.95 print) and Why Our Status Quo Failed and Is Beyond Reform ($3.95 Kindle, $8.95 print, $5.95 audiobook) For more, please visit the OTM essentials website.

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