Is Bernie Sanders Staying in the Race Because of Hillary Clinton’s FBI Investigation?

Til the bitter end.Mainstream Democrats have had enough of Bernie Sanders’ campaign and would like him to graciously, but expediently, fold up his democratic socialist tent and invite the more than 9 million people who voted for him to drop their #NeverHillary postures and do the right thing by Team Blue. 

Recent polls show anywhere from twenty-five to forty-five percent of Sanders supporters saying they would not vote for Clinton in the general election. Sanders, for his part, has insisted he would support Clinton if she were the Democratic nominee, but asking his supporters to do the same before the end of the primary process is something he has adamantly refused to do. 

With only twelve primaries to go, trailing by nearly 300 in the pledged delegate count and having received more than 3 million fewer votes than the former secretary of state, why does Sanders insist he still has a path to the nomination?

Writing in Forbes, Euel Elliot suggests Sanders might be waiting for a “black swan” moment, which at this point is the only realistic path for him to secure the nomination: 

That black swan, of course, goes by the name “FBI.” While an indictment of Clinton in the email controversy is highly unlikely (since any indictment by a grand jury would require approval at the highest levels of the Justice Department and the president himself), anything that tarnishes her reputation, or that suggests recklessness in an official capacity, could be politically debilitating—if not disastrous. Under those circumstances, however unlikely any of them might be, why should Sanders not hang in and wait it out? If Clinton’s poll numbers really did start to go south, the Convention just might turn to Sanders. If the shoe was on the other foot, does anyone doubt that Clinton certainly would hang in there?

In the waning days of the 2008 Democratic primary process, Clinton had arguably her most notorious moment of the campaign when she said she couldn’t understand why people wanted her to concede to then-Sen. Barack Obama (D-Ill.), and speculated that a black swan moment could bail out her losing campaign at any moment. To make her case, she regrettably referenced the June 1968 assassination of Sen. Robert F. Kennedy (D-N.Y.) as an example of how anything can happen before the convention.

Though she apologized for the remark, there can be no doubt that Clinton would absolutely “hang in there” until the end if she were trailing an opponent being investigated by the FBI. 

For all the complaining from Clinton’s camp about the “tone” of Sanders’ critiques, Sanders has never made an issue out of the investigation into Clinton’s use of a private email server while she was secretary of state, even pledging at an early debate to not bring up her “damn emails.”

But that doesn’t mean that this mess of Clinton’s own making isn’t something the Sanders campaign should pretend isn’t there. Earlier this week, FBI Director James Comey said the Bureau’s investigation will take as long as it needs to, meaning Clinton will have it hanging over her head while running for president whether Sanders is in the race or not. 

Sanders also has nothing to lose by staying in the race. He clearly doesn’t care if he alienates centrist Democrats in Congress — he’s been a thorn in their sides for two-and-a-half decades — and has been transparent in his deliberate attempt to blow up the status quo of the Democratic Party. By staying in the race, Sanders keeps his passionate supporters mobilized and maintains the leverage he needs to continue to push Clinton to the left, demand a prime-time speaking role at the Democratic National Convention in July, and force certain parts of his agenda into the party’s official platform.

Rather than worrying that Clinton can’t turn her attention to Donald Trump for six months rather than the four months she would have following the convention, Democrats should be grateful that Sanders intends to reward his supporters’ loyalty by honoring his commitment to stay in the race “until the last vote is cast.” If Sanders were to abandon his campaign now, it is entirely possible that the white, working-class, lunch-pail populists (a subset which Reason‘s Jesse Walker recently reported on) numbered among his supporters could end up voting for Trump. 

Though Sanders stands almost no chance of overtaking Clinton in pledged delegates, he has repeatedly noted that Clinton will be unable to clinch the nomination without the support of superdelegates — the party elites who can support whomever they choose right up until the convention.

But in the unlikely (though not impossible) event that Clinton is indicted, where else would those superdelegates go if not to Sanders?

from Hit & Run http://ift.tt/1s6oUQL
via IFTTT

The Destabilizing Consequences Of Globalization

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

It is not possible to coherently discuss the "New Normal" economy without discussing financialization–the substitution of credit expansion and speculation for productive investments in the real economy–and its sibling: globalization.

Globalization is the result of the neoliberal push to lower regulatory barriers to trade and credit in overseas markets. The basic idea is that global trade lowers costs and offers more opportunities for capital to earn profits. This expansion of credit in developing markets creates more employment opportunities for people previously bypassed by the global economy.

Though free trade is often touted as intrinsically positive for both buyers and sellers, in reality trade is rarely free, in the sense of equally powerful participants choosing to trade for mutual benefit. Rather, “free trade” is the public relations banner for the globalization of credit and markets that benefit the powerful and wealthy, not the impoverished.

Financialization and mobile capital exacerbate global imbalances of power and wealth.

Trade is generally thought of as goods being shipped from one nation to another to take advantage of what 18th century economist David Ricardo termed comparative advantage: nations would benefit by exporting whatever they produced efficiently and importing what they did not produce efficiently.

While Ricardo’s concept of free trade is intuitively appealing because it is win-win for importer and exporter, it doesn’t describe the consequences of financialization and the mobility of capital. In a world dominated by mobile capital, mobile capital is the comparative advantage.

The mobility of capital radically alters the simplistic 18th century view of free trade.

What do we mean by mobile capital? Capital–cash, credit and the intangible capital of expertise–moves freely around the globe seeking the highest possible return. Globalization is the ultimate expression of capital’s prime directive: expand profits by seeking the highest available return on capital invested anywhere on the planet.

In today's world, trade cannot be coherently measured as goods moving between nations, as capital from the importing nation often owns the productive assets in the exporting nation. If Apple owns a factory (or joint venture) in China and collects virtually all the profits from the iGadgets produced there, this reality cannot be captured by the simple trade model described by Ricardo.

Trying to account for trade in the 18th century manner of goods shipped between nations is nonsensical when components come from a number of nations and profits flow not to the nation of origin but to the owners of capital.

Based on the antiquated model of trade between nations, the Apple iGadget creates a $200 trade deficit between the U.S. and China when it lands on an American dock. But this doesn’t account for the fact that components for the device were manufactured in five different nations, or that the majority of the value of the device is in the intellectual capital: the software, the interface and the design.

Once these factors are considered, it’s been calculated that as little as $10 of the value of every Apple product actually ends up in the Chinese economy. Virtually all the profit flows to Apple in Cupertino, California, not to joint venture partners in China or the workers who assembled the components in China.

Expanding profits by moving production to locales with lower labor costs is known as labor arbitrage. Arbitrage is the process of exploiting the difference in prices of labor, currencies, goods, services, assets, interest rates or credit.

In today's globalized version of "free trade," mobile capital can arbitrage the varying costs of labor, currencies, interest rates, taxes, environmental regulations and political favors by shifting capital between nations.

In the global economy, trade is not conducted between equals; those with access to the unlimited credit of financialization can outbid domestic capital for assets, labor and political favors.

The mobility and scale of capital give it outsized influence in small, credit-starved local markets.

Mobile capital, with its essentially unlimited line of credit, can overwhelm the local political system, buying favors and cutting deals to limit costs and competition. Local elites are soon co-opted, and people starved for cash income are easily recruited as labor.

Local assets–priced for the local economy where credit and cash are both limited–are snapped up on the cheap by global capital, and sold for immense profits.

Credit–scarce in traditional self-sufficient economies–offers maximum leverage to global capital, which can borrow money in distant markets at low costs and use the cash to outbid local buyers to snap up local resources that are still cheap compared to the resources in other globalized markets.

The influx of credit also fuels a destabilizing explosion of credit-based consumption in the local economy, causing people with little experience with credit to become over-indebted.

As the over-indebted default, their land and other possessions are confiscated by offshore lenders, further impoverishing the local populace and enriching global capital.

Where is the "free trade" in a world in which the comparative advantage is held by mobile capital? And what gives mobile capital its essentially unlimited leverage?

Central banks, which issue nearly-free money to banks which funnel the cash to corporations and financiers, who can then roam the world snapping up assets and arbitraging global imbalances with low-interest money.

There's nothing remotely "free" about trade based on capital flows generated by central bank liquidity.

This mobility of capital is an enormous benefit to the owners of the capital, but it creates extraordinary instability for those who are not mobile. When mobile capital encounters anything that reduces profits–higher taxes and rising labor costs, competition or restrictive regulations–it closes factories and fires workers in that locale and shifts to another locale with greater opportunities for high returns.

The workers left behind have limited means to replace the lost wages, and the local state often has few resources to repair any damage left by the exploitation of resources. The advantage of mobility is reserved for capital, and to the relatively limited cohort of workers who can immigrate to other nations to find work.

This illustrates two key characteristics of financialized globalization: perpetual instability and a never-ending cycle of boom and bust as capital sparks rapid development in one locale and then moves elsewhere once profits decline.

The scale of global capital is difficult to grasp; trillions of central bank-issued dollars, euros, yen and renminbi are sloshing around the global economy, seeking low-risk profits.

Capital has no loyalty to anything but its own expansion, and the damage it leaves in its wake is of no concern to the owners of capital.

There are even less visible consequences to the globalization of markets, capital and labor. Once goods and services are priced globally, local supply and demand no longer set the local price. As a result, measuring inflation and deflation locally is meaningless in a globalized economy.

This globalization of price–for goods, services, credit and currencies–continually creates imbalances that fuel a perpetual instability that gradually impoverishes every sector other than global capital, which being mobile, can exploit the imbalances for its own profit.

Who benefits over the longer term from the permanent instability and boom-and-bust cycles of this arrangement? Only those close to the credit spigots of central banks.

This essay was drawn from my new book, Why Our Status Quo Failed and Is Beyond Reform, which Gordon T. Long and I discuss in a new 34-minute YouTube program.

via http://ift.tt/1UYOYc9 Tyler Durden

Is It Ethical to Synthesize an Entire Human Genome? Yes!

HumaneGenomeDreamstimeAndreusStanford bioetech researcher Drew Endy and Northwestern University bioethicist Laurie Zoloth ask this week, “Should We Synthesize a Human Genome?” They say go slow. My short answer is, yes.

Their question was provoked by their alarm over the fact that a group of 150 biotech researchers from academia and entrepreneurs from industry met behind closed doors in an invitation-only conference earlier this week to discuss, among other things, the possibility of creating a complete human genome from scratch. Back in 2010, a team led by biotech pioneer and provocateur Craig Venter created the first lifeform whose genome was entirely synthesized. Basically the genome of the bacterium Mycoplasma mycoides was constructed from off-the-shelf chemicals.

According to Endy and Zoloth, the group convened earlier this week at Harvard University. The two object that “such an enormous moral gesture should not be discussed behind closed doors.” They acknowledge that “such a synthetic genome could then be tested in a laboratory by replacing the existing genome within a human cell. All this would still be far removed from making a synthetic human.” Well, yes. A human cell is not a human being.

Nevertheless, Endy and Zoloth argue that “the possibility of making a human cell, whose genome is realised from only digital information and raw materials, should trigger broader considerations.” To highlight their concerns they speculate:

Would it be OK, for example, to sequence and then synthesise Einstein’s genome?  If so how many Einstein genomes should be made and installed in cells, and who would get to make them? 

Taking a step back, just because something becomes possible, how should we approach determining if it is ethical to pursue?

Given that human genome synthesis is a technology that can completely redefine the core of what now joins all of humanity together as a species, we argue that discussions of making such capacities real, like today’s Harvard conference, should not take place without open and advance consideration of whether it is morally right to proceed.

This is sloppy ethical thinking. Genomes are not some kind of special “sacred” entities. If it is morally all right to synthesize the genome of a bacterium or even of a mammoth, then it is OK to do the same with the human genome. If is morally OK to know what each and every base pair of a human genome is, there is no ethical reason not to reverse engineer it. It’s the same entity.

The skills and knowledge developed through efforts to synthesize the entire human genome could clearly be put to many therapeutic uses including fixes to genetic disease variants. And yes, it’s pretty clear that the fear lurking behind the article by Endy and Zoloth is that the techniques developed could be used to enable parents in the future to give their children enhanced qualities such as stronger bodies and nimbler brains. What a moral disaster that would be!

Endy and Zoloth assert:

The perspectives of others including self-identified theologians, philosophers, and ethicists from a variety of traditions should be sought out from the very beginning.

Critical voices representing civil society, who have long been sceptical of synthetic biology’s claims, should also be included.  

First and most importantly, promiscuously handing out moral vetoes in advance to technological reactionaries is itself unethical. Human progress does not proceed by committee votes.

Second, not everybody has got to be in every meeting. Endy and Zoloth want a societal conversation (whatever that means) about this prospect. Fine, so just think of the Harvard conference as the preliminary meeting aimed at organizing it. There’s plenty of time for anti-technology activists to jump in and try to stifle progress.

Finally, yes, it is OK for someone to synthesize Einstein’s genome. It’s just one DNA base after another.

from Hit & Run http://ift.tt/23Nx78q
via IFTTT

Friday A/V Club: Jonestown’s In-House R&B Band Performs ‘The Greatest Love of All’

Jim Jones in San FranciscoWhen the Rev. Jim Jones brought his Peoples Temple to Guyana, some of the settlers formed a soul/funk band called the Jonestown Express, which played concerts around the community up until the mass murder/suicide that wiped out the colony in November 1978.

Jonestown is on my mind today, because Mark Lane—mostly remembered these days as a JFK conspiracy writer, but he was also Jones’ attorney—died this week at age 89. With that news in the air, I’ll post one of the most darkly incongruous musical performances of the 1970s: the Jonestown Express, just seven months before the massacre, performing the song that begins “I believe the children are our future…”

More than 900 people died at Jonestown, including 190 under the age of 13.

And Lane? According to this old Mother Jones profile, written by a rival assassinologist, he escaped by telling a guard, “If you kill us, there will be no one left to tell of the glories of Jonestown.” Upon returning to the States, Lane then embarked on a speaking tour titled “The Jonestown Horror: An Eyewitness Account.”

(For the full concert recording from which this track was taken, go to this site and scroll down to tape #Q174. For past editions of the Friday A/V Club, go here.)

from Hit & Run http://ift.tt/1X7hIzm
via IFTTT

Is the Fed Finally Coming Clean About Inflation?

For years the Fed has been lying about inflation.

 

There are many methods of doing this, but the simplest was to use a “measure” of inflation that did not actually measure inflation at all.

 

This is the famous Consumer Price Index of CPI. It is meant to measure inflation, but ignores obvious costs of living items like food and energy usage.

 

Why lie about inflation?

 

Two main reasons:

 

1)   Doing so allows the Fed and others to overstate economic growth in the US.

 

2)   Doing so allows the Fed to hide the fact that living standards have been in sharp decline in the US for decades.

 

Regarding #1, all GDP growth estimates include an inflation component. If GDP grows 10%, and inflation also rises 10%, then REAL GDP growth was zero.

 

But what if GDP growth was 10%, inflation was 10%, but you claim inflation was just 6%.

 

Poof! You’ve got a great GDP growth number of 4% to produce in the media. Also, this supports your claims that your policies are working.

 

The US has been doing this for years. But it’s gotten increasingly worse.

 

Which brings us to #2…

 

Living standards have been in decline in the US for decades. By some measures, incomes peaked in the early ‘70s and have declined by almost 40% since then.

 

Rather than spout off a bunch of detailed metrics to support this, let’s use common sense: in the ‘60s and before, most families lived comfortably off of one working parent. Today more often than not both parents work and can barely scrape by.

 

By lying about inflation, the Fed and others are able to hide the fact that it is getting harder and harder to get by in the US. This supports the BIG LIE, that the Fed and its monetary policies have been a net positive for the US.

 

They have not.

 

However, cracks are beginning to emerge in the Big Lie.

 

More and more members of the media are beginning to note that the Fed has an incredibly terrible record of forecasting growth. This has lead to increased scrutiny of the Fed’s policies and methods for forecasting.

 

Which is FINALLY leading to some disclosures about how the Fed measures inflation.

 

The precision of the forecasts, or lack thereof, needs to be kept in mind when setting monetary policy. We must be forward looking, which means we must rely on models to forecast inflation, but there is no one model that forecasts with much accuracy. The best we can do in this situation is to recognize that there is uncertainty around our forecasts.

 

Despite the central role inflation expectations play in our theories of inflation dynamics and monetary policy transmission, there is still much we don’t know about how such expectations are formed or even whose expectations matter for forecasting inflation and setting monetary policy.

 

http://ift.tt/1s6cOXy

Here is the Cleveland Fed President admitting in “Fed speak” that the Fed’s forecasts, particularly regarding inflation, are bogus.

The Fed is run by money printers. They cannot generate growth, they can only depreciate the US Dollar to create inflation.

Inflation is coming… you need to prepare now.

We just published a Special Investment Report concerning a secret back-door play on Gold that gives you access to 25 million ounces of Gold that the market is currently valuing at just $273 per ounce.

 

The report is titled The Gold Mountain: How to Buy Gold at $273 Per Ounce

 

We are giving away just 100 copies for FREE to the public.

 

To pick up yours, swing by:

http://ift.tt/1TII1fq

 

Best Regards

 

Graham Summers

Chief Market Strategist

Phoenix Capital Research

 

 

 

via http://ift.tt/1WuzRJ0 Phoenix Capital Research

Trump’s Threat Against The Washington Post Is Yet Another Reminder That He is a Bully and an Authoritarian

In an interview with Fox News last night, Donald Trump issued a thinly veiled threat against The Washington Post, suggesting that the paper’s investigations into his background were in fact part of a tax dodging scheme, and hinting that as president, he would crack down on such behavior. Trump’s remarks were a clear attempt to intimidate his political critics, and they should terrify anyone who is concerned about abuse of government power, executive overreach, or freedom of the press.

Trump’s threat came in response to a question about whether he was ready for the rigors of a campaign in which both his likely general election competitor, Hillary Clinton, and news outlets like The Washington Post would be digging into his past. Here is what he said:

Every hour we’re getting calls from reporters from The Washington Post asking ridiculous questions. And I will tell you, this is owned as a toy by Jeff Bezos, who controls Amazon. Amazon is getting away with murder, tax-wise. He’s using The Washington Post for power so that the politicians in Washington don’t tax Amazon like they should be taxed.

He’s getting absolutely away—he’s worried about me, and I think he said that to somebody, it was in some article—where he thinks I would go after him for antitrust. Because he’s got a huge antitrust problem because he’s controlling so much. Amazon is controlling so much of what they’re doing. And what they’ve done is he bought this paper for practically nothing. And he’s using that as a tool for political power against me and against other people. And I’ll tell you what, we can’t let him get away with it.

So he’s got about 20, 25—I just heard they are taking these really bad stories. I mean, they, you know, wrong, I wouldn’t even say bad, they’re wrong. And in many cases they have no proper information, and they’re putting them together, they’re slopping them together, and they’re going to do a book.

And the book is going to be all false stuff because the stories are so wrong. And the reporters—I mean, one after another. So what they are doing is he’s using that as a political instrument to try and stop antitrust, which he thinks I believe he’s antitrust, in other words, what he’s got is a monopoly. And he wants to make sure I don’t get in. So, it’s one of those things. But I’ll tell you what. I’ll tell you what. What he’s doing’s wrong.

Trump has offered plenty of evidence throughout the campaign that he is a bully who personalizes even the mildest criticism and has no respect for freedom of the press. But even still, this is deeply worrying stuff.

Trump is singling out a media company for its reporting into his candidacy, and then suggesting that the investigations are an attempt the paper’s owner to avoid a federal investigation into another one of the owner’s businesses, Amazon, under a Trump presidency—an investigation that Trump, by saying that Amazon’s behavior is wrong, implies he might undertake. 

As with nearly all Trump remarks, it is a kind of word salad. But even still, it is difficult to read this as anything other than a threat to use the power of the federal government to crack down on a bothersome political critic.

As he has throughout the campaign and his public life, Trump is advertising his authoritarian tendencies. He has a history of berating companies that outsource operations (those that do can “go fuck themselves“) and threatening them with unspecified “consequences” should they leave the country.

And he has repeatedly praised strong authoritarian governments, saying that although the Chinese government’s 1989 massacre of student protesters at Tiananmen Square was “vicious,” it was also an effective response to what he described as a “riot.” “They put it down with strength” Trump told Playboy in 1989. “That shows you the power of strength. Our country is right now perceived as weak.”

Trump’s admiration for authoritarian strength has been most visible in his praise for Russian leader Vladimir Putin, saying last year, “I’ve always felt fine about Putin. He’s a strong leader, he’s a powerful leader,” and praising Putin’s political popularity. And, most tellingly, he has defended Putin against charges that he has had bothersome journalists killed.

“He’s running his country, and at least he’s a leader, unlike what we have in this country,” is how Trump responded when MSNBC host Joe Scarborough brought up Putin’s habit of killing critical journalists. When pressed further, Trump equivocated. “Well I think our country does plenty of killing also, Joe.”

Trump is not floating the possibility of violence against The Washington Post. But there is no doubt that his statement last night was a threat—a threat, to be clear, from a major party nominee for president to use the might of the federal government to target the business operations of a critic for the crime of reporting. It may be a mild form of Putinism, but it is Putinism all the same.

from Hit & Run http://ift.tt/1ZMZMZZ
via IFTTT

The Biggest Threat To Jeff Bezos And Amazon: President Trump

Donald Trump is unhappy with Jeff Bezos, and it now appears that the biggest threat to Amazon isn’t revenue growth and profit margins, it’s a potential future President Trump who may deem AMZN to be anti-competitive and force it to break apart.

In an interview with Sean Hannity, Trump went off on the Amazon founder, accusing Bezos of having The Washington Post (which Bezos purchased for $250 million in late 2013) run political hit pieces on Trump, apparently to stop Trump from going after Bezos for having a monopoly.

“Every hour we’re getting calls from reporters from The Washington Post asking ridiculous questions. This is owned as a toy by Jeff Bezos who controls Amazon. Amazon is getting away with murder tax wise. He’s using the Washington Post for power so that the politicians in Washington don’t tax Amazon the way they should be taxed. He’s worried about me, he thinks I would go after him for anti-trust. He’s got a huge anti-trust problem because he’s controlling so much. Amazon is controlling so much of what they’re doing.”

To be sure, the bad blood between the two is nothing new, and started in 2015 when in response to Trump tweets that “The @washingtonpost, which loses a fortune, is owned by @JeffBezos for purposes of keeping taxes down at his no profit company, @amazon”, Bezos responded with a proplsal to shoot Trump into space.

 

In this specific case, the Donald’s irritation stems from the fact that The Washington Post is putting together a team that will solely focus on Trump and all aspects of his life. “We’re going to do a book, we’re doing articles about every phase of his life.” said Bob Woodward, of Watergate fame. Woodward went on to call Trump’s real estate deals in New York “more complex than the CIA.”

According to Woodward, Bezos has urged the Post to run as many stories as possible about all the presidential candidates so that voters can’t say they were uninformed when they select the next president.

“He said, ‘Look, the job at the Washington Post has to be tell us everything about who the eventual nominee will be in both parties. A 15-part, 16-part series, 20-part series, we want to look at every part of their lives. And we’re never going to get the whole story, of course, but we can get the best attainable.”

While we are in agreement with Woodward in theory, in practice, there is a problem: as the recent Facebook fiasco has once again vividly demonstrated, the mainstream media proves again and again that they will suppress what they feel is unimportant, and flat out leave pieces out of a story in order to protect people they support. Trump will no doubt take this in stride, and presumably grow even stronger from it, as he has with every other botched attempt at getting in the way of a Trump presidency.

Furthermore, by the time the book is done, Trump will either be president or be a political cadaver. At which point we hope Bob Woodward will focus his investigatorial skills on the only person who could be president at the time: Hillary Clinton, who oddly enough, has gotten a blank check from the pro-administration WaPo over the past year…

Here is the full interview

via http://ift.tt/1rJYVi2 Tyler Durden

“Hope” Spikes Most Since 2011 As UMich Consumer Confidence Hits 11 Month Highs

Consumer Expectations, according to University of Michigan, soared by the most since Dec 2011 in May’s preliminary data – spiking from 77.6 to 87.5. Despite a modest rise in current confidence, this spike in “hope” was enough to send the headline confidence print to 95.8, 11-month highs and well above expectations of just 89.5. Despite confidence rising, inflation expectations tumbled (1Y from 2.8% to 2.5%).

Hope is not a strategy…

 

Soaring confidence driven by hope…

via http://ift.tt/1Taybl7 Tyler Durden

This Won’t End Well – Business Inventories Signal Recession Imminent

Autos & parts inventories-to-sales ratios soared to 2.30x from 2.18x – levels that have only been higher during the financial crisis. This, combined with a rise in clothing inventories to sales, held overall business inventories at their highest to sales since the crisis and deep in pre-recessionary territory.

Retail inventories rose 1.0% MoM despite a 0.3% drop in sales (with motor vehicles inventories up 2.3% as sales tumbled 3.2%) leaving the inventories to sales ratio at cycle highs…

 

Simply put, this won’t end well.

via http://ift.tt/1X799om Tyler Durden

Chinese Commodity Carnage Unwinds Entire Bubble – Steel Futures Crash Most Since 2009

Well that de-escalated quickly…

 

As Reuters reports,

Chinese steel futures were on course for their biggest weekly fall since 2009 on Friday, as a selloff in the country's commodities showed signs of spreading to other global markets for raw materials such as palm oil and base metals.

 

Weakening fundamentals along with strong measures by Chinese exchanges to stamp out speculative activity have helped reverse momentum in China's massive commodity futures markets from bullish to bearish in less than a month.

 

The deepening losses have started to weigh on global markets elsewhere, in a similar manner to the boom and bust cycle in the country's stock markets last year.

This is what government-intervention-driven malinvestment-creating unintended consequences look like…

 

 

 

 

and just consider what signals the rally sent to the world?

 

Rising levels of open interest, or open contracts, in China's steel and iron ore futures, as prices fall deeper suggest investors are looking at more downside risk.

The sentiment is very bearish now, and investors are looking for opportunities to take more short positions," said Wu Wei, an analyst at Yong'an Futures in China's Hangzhou city.

 

The softer outlook for the Chinese economy, rising steel production and waning seasonal demand have fueled the sharp losses in steel-linked futures, said Wu.

 

"We are now kind of at or past the peak in seasonal demand so prices are coming down. And maybe since we overshot on the upside so we can undershoot on the downside," said Ian Roper, commodity strategist at Macquarie.

And with "authoritative persons" now saying no more stimulus, things do not look good for the "china is recovering" narrative…

As we conclude previously, In general, the "anonymous authory"’s main thesis is that China needs to put structural reform on top of investment driven stimulus and control the risk from high leverage.

Say good bye to the aggressive easing in Q1 and China will enter couple quarters’ “reform” period, until the government cannot stand with the pain and has to use “investment driven stimulus” again.

via http://ift.tt/224nJ0C Tyler Durden