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Authored by Charles Hugh Smith via OfTwoMinds blog,

Humanity appears to default to magical thinking when faced with untenable situations that demand systemic change.

How would extraterrestrial anthropologists characterize Earth's dominant socio-economic system? It's not difficult to imagine their dismaying report:

"Earth's economy glorifies waste. Its economists rejoice when a product is disposed as waste and replaced with a new product. This waste is perversely labeled 'growth.'

 

Aimless wandering that consumes fossil fuels is likewise rejoiced as 'growth.'

 

The stripping of the planet's oceans for a few favored species of edible fish is also considered 'growth' as the process of destroying the ocean ecosystem generates sales of the desired seafood.

 

Even more perversely, the resulting shortages are also causes of rejoicing by the planet's elites, as their ability to purchase the now-scarce resources boosts their social status and grandiose sense of self-worth.

 

This glorification of waste is the same dynamic that destroyed the civilization on Zork.

 

Earth's economy also glorifies exploitation, as this maximizes profits, which appears to be the planetary equivalent of a secular religion that everyone believes as a Natural Law.

 

Thus slavery and monopoly are highly valued as the most reliable sources of profits. If ethical concerns limit the actual ownership of humans, Earth's economy incentivizes feudal arrangements that share characteristics of servitude and bondage. In the current era, the favored mechanisms are over-indebtedness (debt-serfdom) and taxation by the state, which extracts approximately 40% of all labor via threat of imprisonment.

 

Earth's elites exhibit a pathological preference for micro-managing the commoners via criminalizing much of everyday life and imposing extremely harsh punishments for any dissent or resistance to elite domination.

 

This is the same dynamic that doomed planetary civilizations in the Blug system.

 

Earth's economy is currently dependent on depleting fossil fuels and borrowing from the future to fund consumption in the present, i.e. debt. Rather than face the reality that this is not sustainable and pursue other arrangements, Earth's elites have chosen expediency, responding to the inevitable crises caused by depletion and dependence on debt with expedient but ultimately destructive policies that paper over the crises but at the cost of generating greater crises in the next iteration.

 

Humanity appears to default to magical thinking when faced with untenable situations that demand systemic change. This is eerily parallel to the now-lost civilization of Frum.

 

It seems Earth's dominant species has selected the most destructive policies and mindsets to glorify and worship. Earth's current civilization is doomed, with near-zero prospects for the necessary transition to a more sustainable, less exploitive arrangement.

 

Earth's decline is a tragi-comedy, much like the one on Ononon that entertained our home planet audiences for a time."

In case you missed it, here's a snapshot of total debt as a percentage of median household income: from 79% to 584%.

If this strikes you as "healthy growth" because "debt doesn't matter"– welcome to the Wonderland of Magical Thinking.

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Ole Doc Copper has had its head in the sand over the past 6-years, creating lower highs since 2011. Over the past three years it also has created another series of lower highs reflected in the chart below. Doc Copper could be attempting to do something it hasn’t for years in the chart below.

 

CLICK ON CHART TO ENLARGE

A breakout attempt could be in play this week, as Doc Copper is testing falling resistance line (1) at (2). A breakout here and above highs hit earlier this year, would send bullish message to Copper.

Copper can be played in a few ways, with our favorite being Freeport McMoran (FCX). Below looks at the performance of FCX since Premium & Metals Members bought FCX on May 19th.

 

CLICK ON CHART TO ENLARGE

Over the past 60-days (since FCX) was purchased it is gained nearly 7% more than the S&P 500 and 13% more than Gold miners GDX.

 

This information is coming to you from Kimble Charting Solutions.  We strive to produce concise, timely and actionable chart pattern analysis to save people time, improve your decion-making and results

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

 

Website: KIMBLECHARTINGSOLUTIONS.COM

 

Questions: Email services@kimblechartingsolutions.com or call us toll free 877-721-7217 international 714-941-9381

 

 

 

 

 

 

 

 

 

 

 

 

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Ole Doc Copper has had its head in the sand over the past 6-years, creating lower highs since 2011. Over the past three years it also has created another series of lower highs reflected in the chart below. Doc Copper could be attempting to do something it hasn’t for years in the chart below.

 

CLICK ON CHART TO ENLARGE

A breakout attempt could be in play this week, as Doc Copper is testing falling resistance line (1) at (2). A breakout here and above highs hit earlier this year, would send bullish message to Copper.

Copper can be played in a few ways, with our favorite being Freeport McMoran (FCX). Below looks at the performance of FCX since Premium & Metals Members bought FCX on May 19th.

 

CLICK ON CHART TO ENLARGE

Over the past 60-days (since FCX) was purchased it is gained nearly 7% more than the S&P 500 and 13% more than Gold miners GDX.

 

This information is coming to you from Kimble Charting Solutions.  We strive to produce concise, timely and actionable chart pattern analysis to save people time, improve your decion-making and results

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

 

Website: KIMBLECHARTINGSOLUTIONS.COM

 

Questions: Email services@kimblechartingsolutions.com or call us toll free 877-721-7217 international 714-941-9381

 

 

 

 

 

 

 

 

 

 

 

 

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It started two weeks ago, when Turkey warned publicly it was preparing for military intervention in Syria, while accusing the US of creating a “terrorist army” (it wasn’t referring to ISIS, but US-backed Syrian Kurdish militia YPG). As a reminder, YPG forms a major part of the U.S.-backed campaign to capture Islamic State’s stronghold of Raqqa, and whose forces are seen as a terrorist organization by Turkey. The group currently controls a pocket of territory in Afrin, about 200 km (125 miles) west of Raqqa.

Tensions between Turkish forces and the YPG have been mounting in the Afrin region in recent weeks: Turkey’s military, which launched an incursion last August into part of northern Syria which lies between Afrin and a larger Kurdish-controlled area further east, has said that it has returned fire against members of YPG militia near Afrin several times in the last few weeks.

Furthermore, last month the Turkish defence ministry slammed the Pentagon decision to arm theYPF, and mocking Washington’s assurances that it would retrieve weapons provided to the YPG after Islamic State fighters were defeated: “There has never been an incident where a group in the Middle East has been armed, and they returned the weapons,” Kurtulmus said. The United States “have formed more than a terrorist organisation there, they formed a small-scale army.” 

Then overnight, Ilnur Cevik, a senior adviser to President Recep Tayyip Erdogan, spoke to Bloomberg and said that while Turkey has no immediate plans for an operation in the Syrian Kurdish-run region of Afrin, its army is preparing for action and the military buildup on the border is “serious.” 

 “PYD militants are also harassing the people of Idlib to the south and the people in the areas which Turkey liberated from Daesh,” Cevik says and alleged that PYD’s goal is to “dislodge Turkey from areas that the Free Syrian Army and Turkey liberated,” making their actions “an elevated threat.”

“They want to create a string of cantons in northern Syria and they feel the areas that were liberated with the Euphrates Shield operation should be theirs”; says group wants to “throw Turkey out of there and connect all their cantons in northern Syria and create a mini state. It’s not only Afrin, the threat comes from Kobani, the threat comes from Qamishli, the areas to the east of the Euphrates river until the Iraqi border from areas controlled by the PYD/YPG. Turkey feels threatened from that area as well but the immediate concern is Afrin.”

He concluded by cryptically saing that while “Turkey does not have immediate plans to enter Afrin but Turkey feels that sooner or later we have to do something. This buildup is necessary. And the president said that we are not going give a date or anything, but suddenly one night we may do something there.”

Or perhaps during the day, because according to Rudaw, just hours after Celik’s interview, Turkey commenced bombing YPG positions in Azaz, roughly 5 miles northeast of Afrin in north east Syria, and in immediate proximity to the Turkish border.

#BREAKING: Turkey bombs #YPG positions near Azaz in #Syria — Turkish army. http://pic.twitter.com/mL048Flmwb

— Rudaw English (@RudawEnglish) July 17, 2017

Separately Conflict News reported that on Monday morning there has been heavy Turkish artillery shelling of US-backed Syrian YPG/SDF forces in the region:

VIDEO: Heavy Turkish artillery shelling of US-backed SDF in Ain Daqnah, N. #Aleppo – @QalaatAlMudiq http://pic.twitter.com/EsUbAyX5Eb

— Conflict News (@Conflicts) July 17, 2017

So far there has been no response from either the US or NATO, to what appears to be increasing hostilities between NATO member Turkey and US-ally YPG.

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One reason why Tesla may be trading over 3% lower this morning is a report in the Star Tribune, according to which a Twin Cities man whose Tesla overturned in a central Minnesota marsh, is blaming the crash on the car’s “autopilot”, according to authorities. David Clark, 58, of Eden Prairie, said he was driving Saturday evening before sunset on a country road 18 miles northeast of Willmar, when the car “suddenly accelerated” and overturned in the marsh, the Kandiyohi County Sheriff’s Office said in a statement Sunday.

The crash occurred after “Clark … engaged the autopilot feature,” sending the car off eastbound 172nd Avenue NE. and rolling into the marsh, the Sheriff’s Office statement continued.  

Deputies found the 2016 Tesla upside-down. It was not immediately clear what Tesla model it was.

He told police: ‘When he engaged the auto pilot (sic) feature, that the vehicle suddenly accelerated causing the car to leave the roadway and overturn.

Clark had put the electric car into its autopilot feature, and was approaching
the intersection of 141st Street and 172nd Avenue in Irving Township

Clark and four adults in the vehicle were slightly hurt.

Alleged malfunctions have plagued Tesla’s autopilot in the past, most notably in May 2016, when a motorist near Gainesville, Florida, was killed when his Tesla collided with a semitrailer truck while in the self-driving mode. The crash brought intense scrutiny on the technology and whether the car’s manufacturer overstated the capability of the autopilot feature. A review by Federal investigators of the crash concluded there was no safety defect involved in the crash, and chose not to impose a recall. At the same time, regulators in January warned the vehicle’s operators to not treat the semiautonomous cars as if they are fully self-driving.

Other recent cases include the moment a Tesla Model S crashed into a highway barrier in Dallas in March, when its autopilot failed to spot the merging of traffic lanes and when a Model X crashed into a beauty salon in California.  In most cases, Tesla was able to pull the data logs from the car and found that the driver was actually to blame for ignoring alerts or not keeping their hands on the steering wheel.

A Tesla spokesperson told Jalopnik they have launched an investigation into the incident.

We are glad the driver and passengers are safe. We are working to establish the facts of the incident and have offered our full cooperation to the local authorities. We have not yet established whether the vehicle’s Autopilot feature was activated, and have no reason to believe that Autopilot, which has been found by NHTSA to reduce accident rates by 40 percent, worked other than as designed.

 

Every time a driver engages Autopilot, they are reminded of their responsibility to remain engaged and to be prepared to take immediate action at all times, and drivers must acknowledge their responsibility to do so before Autopilot is enabled. ?

Tesla has an impressive safety record and have scored high on rollover safety tests due to the vehicle’s low center of gravity, weight and they also have a strong roof structure.Tesla’s autopilot mode is not intended to be fully automated driving and the driver is required to keep hold of the steering wheel and stay alert at all times, according to the company’s website. If they take their hands off the wheel, the driver receives a number of prompts and alerts to remind them to keep hold. Tesla’s website also states that drivers must take command of their cars after exiting highways.

‘When you reach your exit, your Tesla will depart the freeway, slow down and transition control back to you,’ the website said.

It’s unclear whether a police investigation or Tesla’s data will be able to reveal more information about the incident. For now, however, shareholders are not taking any chances.

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With the 24/7 pump from mainstream media that everything is awesome (look at record high stocks) – despite President Trump – it's all too easy to ignore collapsing 'hard' data, geopolitical turmoil, and the looming reality that the world's central bankers are taking a distinctly hawkish turn. However, as former fund manager Richard Breslow notes, overnight we just got a big reminder that butterflies' wings are flapping around the world, and no one knows when the chaotic hurricane will follow…

 

Via Bloomberg,

There’s no escaping the fact that the financial world is completely interconnected. Everyday, we say some market was up or down because some other one made a move. In a more direct context, there’s been a lively debate on whether rates can go up in parts of the world and not others. And we’ve pretty much accepted that it will be a global phenomenon, if and when it happens. This morning, I was told that Asian equities were mostly up due to strong economic data from China. And it was good data, so that made sense. But look at the wild ride Chinese equities went on and be reminded that what looks like a hazy, lazy summer Monday is masking a lot of potential volatility out there while markets continue on believing, correctly, that the central bank “puts” are very much still in effect.

Japan was on holiday and there isn’t much news on the calendar. Not a Fed speaker in sight. European inflation data was benign and low. Certainly nothing that will light a fire under the ECB later this week. European and U.S. equities are trading quietly and calmly. Emerging markets are reminding us that there are no problems in the world.

 

You really have to be amazed at how effortlessly equity volatility in that second largest economy in the world was utterly ignored. It doesn’t fit the script.

 

After last week’s data and speeches, markets have concluded they have a clear path at least until autumn. The band has been coaxed into playing another set. For now, nothing can go wrong. And if you needed any proof that central bank policy is the ultimate driver of these markets, here you have it.
But can you imagine the hysterics if the U.S. indices had the kind of day their counterparts in China had? No one would be talking about anything else. What was the alleged cause of the sell-off? Tighter regulation and easing of the IPO pipeline. That was one doozy of a reaction. I guess Western investors sure are glad that our regulators are debating how to cut back on all those rules. It’ll keep things bid.

 

At the end of the day, however, we’d better keep an eye on what’s going on in important markets elsewhere. No matter how much we want to lazily enjoy the interregnum before Jackson Hole. We spend a huge amount of time about the search for the canary that warns about market direction. Well we just heard what may be distinct chirping but the mining stocks went up anyway.

 

The Shanghai Composite was saved by a diving catch from its 55-day moving average. How well it continues to define the downside should be a meaningful input to decisions about your trading strategy for the next period. Oh, and did I mention, the Australian dollar just made another new high today.

As a reminder, while last night's Chinese macro data surprised to the upside, it appears unsustainable… As Julian Evans-Pritchard, China economist at Capital Economics, noted, the strength seen in the data seems unlikely to last:

"The recent crackdown on financial risks has driven a slowdown in credit growth, which will weigh on the economy during the second half of this year.

 

"What’s more, the National Financial Work Conference that concluded over the weekend has signaled that further regulatory tightening remains on the horizon."

For the last three months, Chinese data has been disappointing, along with US, as the collapsing credit impulse leaks into reality…

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The Canadian Real Estate Association says home sales in June posted their largest monthly drop since 2010, with the Greater Toronto market leading the decline.

This is the third monthly decline in a row…

 

Under the covers, it's Toronto that is suffering the most…

Toronto existing home sales drop 37.7% y/y

• Average Toronto existing home price fell 5.8% m/m
• Average Toronto existing home price up 6.3% y/y

Vancouver existing home sales drop 12.2% y/y

• Average Vancouver existing home price fell 3.2% m/m
• Average Vancouver existing home price up 2.7% y/y

And as a reminder, there appears to be plenty of room for this to fall further…

 

Looking at the chart above, last month Bloomberg said:

 

 

On a real basis, Canadian housing prices experienced a much smaller, shorter decrease in prices during the financial crisis and a much larger, longer increase in prices during the recovery. When you couple this unfathomable rise in housing prices with near-record high household debt-to-income ratios, the Canadian housing bubble starts to look scary should the tide turn.

… and added:

 

 

No one knows when insanity like this will come to an end. Bubbles are like an avalanche. The longer they build up, the worse they will be when they eventually destabilize.

Well, nobody may know, but as Harley Bassman said yesterday, one can make an educated assumption, and as he said it most likely will be the result of higher rates… which reminds us of last week's decision by the Bank of Canada to hike its rates for only the first time since 2010.

And as US homebuyers from the time period 2004-2006 remember all too vividly, there is nothing that will burst a housing bubble faster than a spike in mortgage rates.

Which is why while Torsten Slok's original warning that "Canada Is In Serious Trouble" two years ago may have been premature, this time it appears all too real thanks to none other than the Canadian central bank, which may just have done the one thing that will finally burst the country's gargantuan housing bubble.

Finally, for those skeptical, here is David Rosenberg explaining why he is 'skeptical' about BoC's view of a robust economy ahead…

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Iconic Private Equity firm Kohlberg Kravis Roberts i.e., KKR, has appointed two executives to succeed co-founders Henry Kravis and George Roberts, in what the FT dubs is a “rare move for an industry where succession plans have not been set out publicly.”

KKR announced on Monday that it had named Joseph Y. Bae and Scott C. Nuttall, long rumoured to be favourites to fill the founders’ shoes, as its co-presidents and co-chief operating officers. The appointments will task Nuttall, 44, and Bae, 45, with essentially running the $137 billion firm on a day-to-day basis.  Kravis and Roberts, both of whom are in their early 70s, will continue to lead the group as co-chairmen and co-chief executive officers. This is the first time KKR has openly indicated clear successors to the founders.

“Today’s announcement is about the future and ensuring we have the right team and leadership structure to serve our clients and partners for decades to come,” Mr. Kravis and Mr. Roberts said in a statement.
Continue reading the main story. In naming their successors, Kravis and Roberts are joining other buyout titans in preparing for the not too distant day when they step away from the business.

Kravis and Roberts said: “Having joined the firm together over 20 years ago, Joe and Scott have a strong foundation of trust, professional respect and personal friendship that is critical for success.

Henry R. Kravis, right, and George R. Roberts in 2001

“They think and act globally, they embody KKR’s core values, and they are two of our most accomplished business leaders, with proven track records of managing large teams, building new businesses and driving value for our fund investors and our public unit holders.”

As the NYT reports, other PE firms have already laid out their succession plans: Blackstone has long had an heir apparent in its real estate chief, Jonathan D. Gray, a lifer at the investment giant. Warburg Pincus long ago named Joseph P. Landy and Charles R. Kaye as its chief executives., taking over from the co-founders Lionel I. Pincus and John Vogelstein.

Preparing for succession is not always an easy task. Carlyle hired Adena T. Friedman from Nasdaq in 2011 as its chief financial officer, setting off speculation that she would one day lead the private equity titan. But she left three years later to return to Nasdaq, where she finally took over as chief executive in November. And it had hired Michael Cavanagh, a much-lauded executive at JPMorgan Chase, only for him to leave the firm for Comcast a year later.

The FT adds that “the move will add pressure to other buyout groups, whose founders are reluctant to relinquish power, to outline their own succession plans.”

Private equity investors have grown increasingly concerned about succession with just 12 per cent of funds set to close in less than a decade.

The worry has intensified as limited partners — pension plans and other institutions that lock up their capital in private equity vehicles for years — cut back on under-performing managers.

But for Kravis and Roberts, the anointment of potential successors is perhaps more notable than for most. The men, cousins who co-founded Kohlberg Kravis 41 years ago, helped put private equity on the map.

The pair led the firm’s pursuit of RJR Nabisco and earned the immortal sobriquet “barbarians at the gate.” Since then, the private equity industry has largely shed its reputation as uncouth raiders and become an enormous industry, with some $820 billion in uninvested capital as of Dec. 31, according to Prequin. In recent years, the two men have praised the firm’s growing bench, with Mr. Kravis once saying that any of 15 executives could lead the firm should he and his cousin retire.

As for the new KKR executives, they will have different areas of primary responsibility, KKR said: Nuttall will concentrate on corporate and real estate credit, capital markets, hedge fund and capital raising businesses together with the corporate development, balance sheet and strategic growth initiatives. Bae will focus on global private equity businesses and real asset platforms across energy, infrastructure and real estate private equity.

Of the four major private equity titans that are publicly listed: K.K.R., Blackstone, Carlyle and Apollo Global Management, the share price of K.K.R. has performed second-best, rising almost 50% over the past 12 months.

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Who could have seen this coming?

The latest hot tech IPO just went from bad to worse to worserer as Blue Apron tumbled over 10% in the pre-market (down over 40% from its IPO-day highs) after Amazon filed a trademark for a meal-kit service.

As MarketWatch's Tonya Garcia notes, the filing has the word mark "We do the prep. You be the chef."

And it describes the service as "Prepared food kits composed of meat, poultry, fish, seafood, fruit and/or and vegetables and also including sauces or seasonings, ready for cooking and assembly as a meal."

 

The description also includes "frozen, prepared, and packaged meals," soup and salad ingredients, advertising and "business management for others of retail and online retail stores and supermarkets," customer loyalty programs and other services.

Pets.com anyone?

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