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With The Wall Street Journal once again playing down any precious metals strength and Goldman explicitly saying "sell," RBC Capitalo Markets' Tyler Broda and Alexandra Slattery are considerably more positive…

Retro Gold – Are we heading back to the 1970s?

Gold is often considered as a strong hedge for inflationary environments. The 1970s are the most commonly cited example of this phenomenon (in the US at least). Our analysis suggests that inflation is only part of the equation. As US inflation begins to re-emerge, and monetary policy around it continues to remain accommodative, the potential for lower real interest rates, at least over the medium-term, is increasing. In our view, this could create similar dynamics for the gold market as what occurred in the mid-to-late 1970s.

The recent statements from the Chairwoman of the US FOMC, Janet Yellen, suggest that global risks and the lack of central bank firepower in a low interest rate environment will likely mean that interest rates will be held lower for longer. In her speech to the Economic Club of New York in March, Ms. Yellen stated that the neutral “real Fed funds rate” (the level at which monetary policy would be neither expansionary nor contractionary) is likely close to zero. When using the core PCE measure, the current rate at -1.25% is even lower. In addition, concerns are beginning to mount for the FOMC that inflation may be coming unanchored to longer-term stable levels but to the downside. This implies the probability for lower real interest rates is likely to increase. This change in stance, and the market’s anticipation of this outcome following significant global market volatility in January/February, have helped to spur what appears to be the first sustained gold ETF buying since 2011.

Gold’s two key characteristics determining rates of investment (the most price insensitive demand category) are:

1) Positive – its ability to hold (or increase) in value through periods of market volatility and economic downturns and it is slightly Beta negative to the broader markets.

 

2) Negative – its lack of yield.

In a normal environment, when inflation expectations are positive, but contained or falling, real interest rates (nominal rate – inflation) have tended to be positive. In an environment such as this, the cost of owning gold is equal to this real interest rate or what is being given up vs. other yielding assets (after inflation).

In the 1970s, when inflation and inflation expectations ran sharply higher, there was little that could be done from a monetary policy perspective, as any hikes in interest rates would have meant a serious recession (not to mention the impact from other external shocks). In this environment, where accelerating inflation caused real interest rates to fall below the neutral 2% level (after moving sharply negative for a time), gold rose from ~$125/oz in 1976 to a peak of ~$800/oz in 1980.

Since 2008, the correlation between gold and real interest rates (using 10 yr US bond yields and 5yr5yr inflation swaps as a proxy for medium-term inflation) has been high. The Rsquared is 60%, with higher correlations in periods of rapid movements in real rates. This high correlation makes logical sense in a period of lower interest rates as well as lower inflation expectations. In 2012-2013, the expectations that monetary policy was on the cusp of normalising (or at least normalising over the longer-term) saw a sharp recovery in real interest rates and a declining gold price. This coincided with the sharp selloff of gold ETFs in 2013. Real rates are now trending back down again along with an increase in gold ETF demand and the gold price.

Determining the correct methodology for calculating real interest rates is difficult (in fact there are many different real rates across the curve), but for the purposes of this analysis we have used the US5yr5yr inflation swaps as the expected level of inflation and we are using the US 10 year treasury yield as the long-run interest rate.

Based on a regression analysis holding gold as the independent variable, a negative 0.5% real rate level would suggest a gold price of $1,380/oz and a negative 1.0% real rate level would suggest a gold price $1,546/oz. (Currently, we would calculate this real rate proxy as -34bp, which implies a gold price of $1,326/oz). The potential for inflation rates to move upwards and match US Treasury yields, which continue to be held down in the short-term, could create a 1970s-esque phase in real rates, in which our analysis suggests could move gold prices higher from here. We have published a global gold update increasing our price forecasts for 2016 to $1,250/oz and from 2017 onwards to $1,300/oz.

Gold investment appears to be moving towards stronger fundamentals than we have seen over the past few years
In summary, should US monetary policy not be on the path to normalization, a fundamental change in the benefit of gold ownership is taking place, and this increased investment demand should lead to higher gold prices. There is increasing upside risk to gold prices.

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As @TheChartMeister notes, sometimes a picture helps…

via Zero Hedge http://ift.tt/1TN9mfI Tyler Durden

We reported in 2010 that the American Dream has moved abroad.

We provided additional details in 2013 and 2014.

Today, a very powerful insider – the President of the most powerful Fed bank, the Federal Reserve Bank of New York, Bill Dudley – confirmed that the American Dream has left the house:

The United States has always prided itself on being “the land of opportunity.” Parents hope that their children can achieve more than they did. Over the course of our history, immigrants have journeyed to America in search of a better life, a chance to live the “American Dream.”

 

What defines the American Dream? President Reagan thought that one element of the American dream is “the opportunity to grow, create wealth, and build a better life for those who follow,” while President Obama has described it as follows: “A child’s course in life should be determined not by the zip code she’s born in, but by the strength of her work ethic and the scope of her dreams.”  One’s destination in life should not depend on where the journey begins.

 

Equal opportunity does not imply equal outcomes—some people may work harder, be more fortunate in terms of their disposition and endowments, or just be luckier in how their lives evolve.  But it does require that income mobility—in particular, upward mobility—be widely evident and remain part of the fabric of the nation.

 

***

I don’t think the issue of income mobility receives the attention it deserves.  It is a foundational element for a well-functioning democratic society and provides evidence about the ability of an economy to provide opportunities for its citizens.

 

***

 

While income mobility in the United States has been relatively unchanged, it remains well below several other nations. According to Stanford economist Raj Chetty, the probability of moving from the bottom quintile to the top quintile is 7.5 percent in the United States, as compared to 11.7 percent in Denmark and 13.5 percent in Canada—two countries with relatively high levels of intergenerational mobility.  So effectively the chance of achieving the American Dream is not the highest for children born in America.

Dudley recommends policy changes that will increase mobility in America:

Some kinds of public policies may exacerbate, rather than lessen, the tendency of the housing market to price some families out of good neighborhoods.

 

***

 

I believe that safe, reliable, affordable and efficient transportation to job locations should be a crucial element in an effective housing policy.

 

***

 

Access to affordable credit is yet another pillar of a policy program that promotes housing affordability.  We at the Federal Reserve have long worked to ensure that credit flows equitably and that financial services are available to all U.S. citizens.

 

***

 

The Federal Reserve has the twin objectives of maximum sustainable employment and price stability.

Ironically, Federal Reserve and government policies of the last 8 years have exacerbated all of these problems and decreased income mobility. 

Bad government policy is responsible for the medieval, king-and-serf levels of inequality and social mobility which are destroying our economy (and see this).

 

via Zero Hedge http://ift.tt/1StWbeg George Washington

From one of the biggest cheerleaders of the stock market, in recent months Jamie Dimon’s JPM has undergone a dramatic anti-Hugh Hendrian metamorphosis, turning increasingly more skeptical on further risk asset upside and as of one month ago, pulled the plug on its former cheerful nature when in early March it announced it had gone Underweight stocks “for the very first time this cycle.”

Today, JPM’s chief equity strategist, Misla Matejka is out with a new note, in which he tackles not the S&P500, where he has repeatedly said to take profits, but the weakest link of the economy, the one which Albert Edwards declared last week was “The “One Failsafe Indicator” Of An Inevitable Recession“, crashing profits. And not just profits of energy companies (which are expected to be down -104% in Q1), but in a total of 7 out of 10 S&P sectors (per Facset).

This is what Matejka has to say about the coming earnings season, and why he believes trouble is coming. First the good, if one may call them so, news:

Will upcoming Q1 results help market sentiment? It is the case that Q1 saw an inflection in some of the headwinds for US earnings – specifically, such as in dollar, oil, corporate pricing and a bounce in manufacturing activity.

 

Also, sharp downgrades to analysts’ estimates seen so far ytd have lowered the hurdle rate materially in the main regions. Consensus is forecasting S&P500 Q1 EPS to fall 6.9% y/y, the lowest run rate since the ’09 recession and down from +2.3% expectation at the start of the year. Seven of the ten US sectors are projected to deliver negative EPS growth. Expectations appear subdued for SX5E as well, at -4.7% ex-Energy, but are much higher for Topix, at +9.8%.

And now the not so good news.

This is where the good news ends. We worry that the top-line outlook, which is the key driver of operating leverage, remains subdued. Despite some improvement in US leading indicators due to temporary restocking, global activity was generally poor in Q1. The March PMIs failed to confirm the rebound in Eurozone and rolled over sharply in Japan, while consumer activity was especially sluggish.

 

USD weakening is a zero-sum game. It helps the US, but hurts Eurozone and Japanese earnings.

 

 

We reiterate our caution on Eurozone and Japanese equities, in part due to the increasing FX headwind. On the flipside, the rollover in USD, combined with improving activity momentum, should help EM, where earnings are still depressed in the historical context. Stay OW the space.

 

Overall, we believe that Q1 earnings will not provide much clarity, and we stick to our call from three weeks back that the Feb-March bounce in equities should be faded. Technicals are not supportive anymore and P/E multiples are at ytd highs.

 

 

Bond yields rolled over and the leadership of Defensives, which are beating Cyclicals by 100-150bp in the US and Europe ytd, and by considerably more since the ECB/Fed meetings, should continue. We note that MSCI Growth style is beating Value ytd in Europe by 210bp.

And then, JPM cuts right to the gist of its bearishness: profit margins.

Big picture, one of our key medium-term concerns for equities remains the outlook for US profit margins. We have argued since late ’14 that corporate profit margins appear to be peaking out for this cycle. The latest  NIPA data are confirming the deceleration, with our model pointing to much more downside. Weakness is broad-based, with margin compression seen in all subcategories of profits: domestic, foreign, financial and non-financial.

 

 

We think this deceleration will continue as productivity remains depressed and the top line is unlikely to accelerate. Profit margins are a particularly useful indicator to assess the stage of the business cycle. In the past 60 years, there has never been a recession starting before the peak in profit margins. However, once margins have peaked, the likelihood of a downturn increases materially.

 

We believe that the rollover in profit margins will be a constraint for equities, as profits have tended to drive most economic variables, capex and employment in particular. It will also likely have negative implications for corporate activity, especially as M&A, buybacks and dividends are at cycle highs, and US financing conditions are deteriorating.

 

The conclusion:

We believe that the rollover in profit margins will be a constraint for equities, as profits have tended to drive most economic variables, capex and employment in particular. It will also likely have negative implications for corporate activity, especially as M&A, buybacks and dividends are at cycle highs, and US financing conditions are deteriorating.

Which means one can have rising wages or rising profits (and thus stocks), but one can’t have both. Unless, of course, multiples grow to even more ridiculous levels, and at last check the S&P’s GAAP PE is just shy of 24x.

Which also means the central banks’ mandate is clear: expand multiples to even bubblier levels.

via Zero Hedge http://ift.tt/1TN9lZ0 Tyler Durden

The stock surge from February is at risk, warns BofAML's Stephen Suttmeier as a plethora of bearish divergences could cap further gains from here. 2044-2022 are key nearby S&P 500 support for April, but a loss of 2022 is required to break the last higher low from 3/24 and suggest a deeper decline for the S&P 500. The following 15 risk-factors – from VIX term structure steepness to Dow Theory Sell signals – all point to a retest of the recent 1810-1820 lows.

The double bottom breakout point near 1950 is support ahead of the 1820-1810 lows. The 2067-2075 area highs could provide initial resistance ahead of 2085 (double bottom count) and the 2015 highs of 2100-2135.

Many indicators are flashing tactical bearish divergences that suggest that the rally off the Jan/Feb lows is close to its end. Many had bullish divergences (higher lows) at the Feb 11 low on the S&P 500 vs. bearish divergences (lower highs) as the S&P 500 trended higher into early April.
 
1. New highs for the S&P 500 advance-decline line but SPX EW vs. SPX and NYSE McClellan Oscillator say breadth momentum is diminishing.

Similar to the McClellan Oscillator, the S&P 500 equal-weighted vs. market cap weighted ratio (SPW/SPX) shows a bearish divergence (lower high for SPW/SPX vs. higher high for SPX). Bearish divergences on SPW/SPX suggest limited S&P 500 upside.

2. On-balance-volume and our Volume Intensity Model (VIM) bearishly diverge to place rally from February at risk.

Similar to our Volume Intensity Model (VIM), on-balance-volume (OBV) shows a bearish divergence off the late-March and early-April S&P 500 highs. This is similar to the divergence in late October and early November 2015.

3. The VXV/VIX & the 25-day put/call ratios have shown complacency and are near levels where the S&P 500 typically has had trouble sustaining rallies. The 25-day put/call hit levels associated with the November and May 2015 highs.

A bullish divergence for the VXV/VIX coincided with the Jan/Feb lows and moving into early April, the VXV/VIX has a lower top vs. higher highs in the S&P 500 to set up a bearish divergence. The VXV/VIX reached the overbought zone above 1.20, hitting the highest reading since March 2015. The S&P 500 has generally struggled on these extreme contrarian bearish readings in the VXV/VIX, which is a risk factor.

 The CBOE 25-day total put/call ratio has dropped back to the lowest or most complacent levels seen since the S&P 500 highs in early-November at 2116 and late-May 2015 at 2135. This is contrarian bearish with the 25-day put/call reaching 0.93 on March 28 vs. 0.94 in early November and 0.92 in late May. This low put/call ratio is an April risk factor.

4. Daily MACD bearish diverges and triggers a sell signal at 1998-2000 overbought levels.

An overbought sell signal and bearish divergence for daily MACD are warning signs for the rally off the February low. Violent swings in the S&P 500 have pushed daily MACD to oversold extremes similar to 2011 as well as to overbought extremes similar to 1998-2000. Daily MACD is back at these overbought extremes. It took two months for daily MACD to go from oversold to overbought moving into both early November and late March. Investors have moved from the bearish side of the boat to the bullish side or the boat, but the boat has not yet tipped in either direction as the S&P 500 remains range-bound between the 1800 and 2100 areas.

5. A bearish breakdown/retest pattern on S&P 500 VIGOR is an intermediate to longerterm risk factor.

The US 15 Most Active Advance-Decline (A-D) line is a daily cumulative A-D line of the top 15 most heavily traded stocks in the US by share volume. When this A-D is rising, breadth for the most heavily traded stocks is bullish and reflects accumulation or buying. When this A-D line is falling, breadth for the most heavily traded stocks is bearish and reflects distribution or selling. The US most active A-D line broke down late last year and is retesting this breakdown, which is a bearish set-up.

6. A breakdown/retest pattern is a bearish set-up for the most active A-D line. The most active A-D line broke down in late 2015 and breakdowns in 2000 & 2007 preceded SPX breakdowns. This is a warning.

Big breakdowns in the most active A-D line preceded with big breakdowns for the S&P 500 in 2000 and 2007. Moving into 2016, the Most Active A-D line has a big top breakdown in place and we view this as a risk to the cyclical bull market that began in 2009.

7. The Dow Theory Sell Signal intact. Transports show a bearish non-confirmation vs. Industrials moving into April.

8. Monthly MACD remains on a sell signal from last March.

9. Bullish seasonals in April (& 2Q) even after a strong March, but May-Oct is the weakest 6-month period of the year.

10. A rise off extreme lows for net free credit (free credit balances in cash and margin accounts net of the debit balance in margin accounts) could exacerbate an equity market sell-off.

Net free credit is free credit balances in cash and margin accounts net of the debit balance in margin accounts. As of April 2015 net free credit stood at a new record low of -$227b vs. the February 2016 reading of -$148b and the prior record low from August 2014 of -$183b. Similar increases in net free credit in 2000 and 2007 coincided with market peaks and deeper pullbacks. If the market drops and triggers margin calls, investors do not have cash in their accounts and would be forced to sell stocks or get cash from other sources to meet the margin calls. In our view, this would exacerbate an equity market sell-off.

11. The high yield market remains a risk – both the US high yield index (H0A0) and S&P 500 are into resistance. High yield OAS has similar pattern to early 2008, just before the depths of the financial crisis, and may widen further.

The Barclays US Corporate High Yield Average OAS has widened out of a 3-year bottom. The last time this high yield spread widened out of a similar bottom was late 2007/early 2008 when the spread completed a 4-year base. The narrowing of the OAS off the February peak is similar to that of 2008, a pullback after a breakout, which was followed by further widening out in the OAS and deeper weakness in US equities. We view this as a US equity market risk for 2016. A move back below 5.50-5.30 is needed to call this view into question.

12. Speaking of Financials, they are not acting as leadership and are hitting new relative lows in the US and across the global. New all-time relative lows for Japan Financials. This is potentially bearish for global financial markets.

13. NASDAQ 100 leadership at risk and suggests that “Generals” have begun to follow the “Troops”. Big gap resistance from January on the NDX is holding so far. We prefer the 2016 Dogs of the Dow, which have emerged as 2016 market leadership.

14. A Bearish January Barometer.

Does the January Barometer work? Based on S&P 500 data going back to 1928, January is a reasonably good predictor of the year. When January is up, the year is up 80% of the time with an average return of 13.0% and February- December is up 78% of the time with an average rise of 8.6%. When January is down, the year is up only 42% of the time with an average drop of 1.8% and February-December is up 58% of the time with an average rise of 2.1%. This compares to positive annual returns 66% of the time and an average return of 7.4% for the S&P 500 going back to 1928. February-December is up 70% of the time with an average gain of 6.1% going back to 1928. With the first five sessions of January down, the average return for the year could be between -2.2% (if the month of January is down)

15. 2016 is a Presidential Election year. The average return for an Election year with a non-1st term President is -3.2% vs. 14.1% in an Election year with a 1st term President and 7.6% for all Presidential Election years.

*  *  *

But apart from that, stocks are cheap and fundamentals are strong… oh wait

via Zero Hedge http://ift.tt/1qKDjSA Tyler Durden

As of this moment the world wonders, rightfully so, why Obama has to meet with Janet Yellen in private and just what information is so important that it can only be said behind closed doors. Perhaps sensing this confusion, White House spokesman Josh Earnest apologetically noted that President Obama “cares deeply about preserving both the appearance of and the fact of the independence of both the Federal Reserve” and Fed Chair Janet Yellen, White House Press Sec. Josh Earnest tells reporters in briefing; he added that he wouldn’t anticipate “even in a confidential setting” that Obama “would have a conversation” with Yellen “that would undermine” the ability to make “critical financial decisions independently.”

So with the topic of U.S. presidents preserving the independence of Fed chairs “even in a confidential setting” we recalled this particularly colorful anecdote demonstrating just how “independent” said Fed chairs are in “a confidential setting.”

From the NYT:

… in 1965, President Lyndon B. Johnson, who wanted cheap credit to finance the Vietnam War and his Great Society, summoned Fed chairman William McChesney Martin to his Texas ranch. There, after asking other officials to leave the room, Johnson reportedly shoved Martin against the wall as he demanding that the Fed once again hold down interest rates. Martin caved, the Fed printed money, and inflation kept climbing until the early 1980s.

 

“I hope you have examined your conscience and you’re convinced you’re on the right track.” Lady Bird Johnson said to William McChesney Martin, on his arrival at the LBJ ranch.

We hope this time it’s different.

via Zero Hedge http://ift.tt/1S5DBfg Tyler Durden

Submitted by AnonWatcher via TheAntiMedia.org,

A man in an Anonymous mask, who was sitting peacefully, was harangued by police and arrested. All caught on camera, bystanders recorded the event while a multitude of witnesses yelled out that he did nothing wrong or illegal. The incident took place in the House Gallery, during the Maricopa County hearing over the suspected election fraud.

Two officers attended the arrest of the man. Although the man in question didn’t have his face concealed by the mask—the mask had been resting on the top of his head—the first arresting officer approached from behind and kicked at him lightly until he left his chair.

Bystanders went to the man’s defense, with several phones filming the event. One bystander even said the arrest was made because the man was sporting an Anonymous mask.

In the video, another bystander accuses the police of choking the man as the officers unduly restrained him while he was quietly sitting between the chairs. Chants of “shame” and “the whole world is watching” were cried as the man was forced to his feet and escorted away.

After the removal of the man, one of the bystanders states: “you promised us if we were silent you wouldn’t remove us.” Officials then began to plead with the crowd. At the end of the video, one official agreed that the man with the mask did nothing wrong.

Janet Higgens, who uploaded one of the videos, stated: “We were at the point of chaos. All brought on by the police. For a man sitting quietly. With dreadlocks. His name is Jonathan S. McRae. He is currently in jail, charged with trespassing and resisting arrest. I disagree. He was harassed, held to the floor for over 5 minutes, and kidnapped. I don’t know if he was injured in the attack.”

“We the people of the United States are tired of this stuff,” another witness yelled as a bystander warned that this would all end up on YouTube.

Arrested for wearing an Anonymous mask…

You can view the long version of the video here.

via Zero Hedge http://ift.tt/1XrmBBA Tyler Durden

Just after today's emergency meeting at the Fed, President Obama was set to meet with the "independent" Federal Reserve chair. The White House explained this was to allow the two to "exchange notes" and talk about the state of the US economy. Most crucially, Obama said he "was pleased with the way Yellen had fulfilled her job."

This is what the White House said they would discuss:

• WH SAYS OBAMA TO DISCUSS WORLD ECONOMY AND THE U.S. ECONOMY, AS WELL AS SOME CURRENT REGULATORY ISSUES, IN MEETING WITH FED CHAIR YELLEN
• WHITE HOUSE SPOKESMAN: YELLEN MEETING CHANCE TO 'TRADE NOTES'

Here's a reminder of what has occurred during Obama's reign (and Yellen's)…

 

Near record high stock prices and near 40-year-low employment participation may not sound "pleasing" to some.

 

And as we noted earlier, the last time Obama "periodically" checked in with the 'independent' Fed head was just days before Yellen's first historic rate rise in years. Have the banks been complaining to Barack?

via Zero Hedge http://ift.tt/1qEgjUU Tyler Durden

Submitted by Howard Kunstler via Kunstler.com,

The mystery is at last revealed: why does the field of candidates for president score so uniformly low in trust, credibility, likability? Why are there no candidates of real substance, principle, and especially of real charm in this scrim of political basilisks? (Surely there are many people of substance and principle elsewhere in America — they just don’t dare seek the job at the symbolic tippy-top of this clusterfuck of faltering rackets.) The reason is that the problems are unfixable, at least not within the acceptable terms of the zeitgeist, namely: the secret wish to keep all the rackets going at all costs.

This is true, by the way, of all parties concerned from the 0.001 percent billionaire grifter class to the deluded sophomores crying for “safe spaces” in their womb-like “student life centers” to the sports-and-porn addled suburban multitudes stuck with impossible mortgage, car, and college loan debts (and, suddenly, no paying job) to the deluded Black Lives Matter mobs who have failed to notice that black lives matter least to the black people slaughtering each other over sneakers and personal slights. None of these groups really want to change anything. They actually wish to preserve their prerogatives.

The interests of the 0.001 percent are obvious: maintain those streams of unearned, rentier, notional wealth as long as possible and convert them as fast as possible into hard assets (Caribbean islands, Cézanne landscapes, gold bars) that will theoretically insulate them from the wrath of history when the center no longer holds. The poor (and ever-poorer) formerly middle class suburban debt serfs, for all their travails, can’t imagine living any other way or putting less of their dwindling capital into the Happy Motoring matrix. The Maoist Social Justice Warrior students are enjoying the surprising power and thrills of coercion, especially as directed against their simpering professors and cringing college presidents anxious to sustain the illusion that something like learning takes place in the money laundering operations of higher ed. The Black Lives Matter crowd just wants to be excused from their failure to follow standards of decent behavior and to keep mau-mauing the other ethnic groups of America for material and political tribute.

It must be obvious that the next occupant of the White House will preside over the implosion of all these arrangements since, in the immortal words of economist Herb Stein, if something can’t go on forever, it will stop. So the only individuals left seeking the position are 1) An inarticulate reality TV buffoon; 2) a war-happy evangelical maniac; 3) a narcissistic monster of entitlement whose “turn” it is to hold the country’s highest office; and 4) a valiant but quixotic self-proclaimed socialist altacocker who might have walked off the set of Welcome Back Kotter, 40th Reunion Special. These are the ones left standing halfway to the conventions. Nobody else in his, her, it, xe, or they right mind wants to be handed this schwag-bag of doom.

On Saturday, the unstoppable Democratic shoo-in Hillary lost her 7th straight contest to the only theoretically electable Vermont Don Quixote, Bernie Sanders. This was a week after it was reported in The Huff-Po that her campaign crew literally bought-and-paid for the entire 50-state smorgasbord of super-delegates who will supposedly compensate for Hillary’s inability to otherwise win votes the old-fashioned way, by ballots cast. Wonder why that didn’t make nary a ripple in the media afterward? Because this is the land where anything goes and nothing matters, and that’s really all you need to know about how things work in the USA these days.

The Republican mandarins are apparently delirious over loose cannon Donald Trump’s flagging poll numbers in the remaining primary states. Should Trump fall on his face, do you think they’ll just hand Ted Cruz the Ronald Reagan Crown-and-Scepter set. (They’d rather lock Ted in the back of a Chevy cargo van with five Mexican narcos and a chain saw.) The GOP establishment insiders are already lighting cigars in preparation for the biggest smoke-filled room in US political history, Cleveland, July 20. But what poor shmo will they have to drag to the podium to get this odious thing done? Who wants to be the guy in the Oval Office when Janet Yellen comes in some muggy DC morning and says, “Uh, sir (ma’am)… that sucker you heard was gonna go down…? Well, uh, it just did.”

As for the Dems: they are about to anoint the most unpopular candidate of our lifetimes. The BLM mobs have promised to deliver mayhem to the streets of the party conventions and don’t think they will spare Hillary in Philary, no matter how many chitlins she scarfed down last month in Carolina. The action in Philly will unleash and reveal all the deadly power of President Obama’s NSA goon squads when the militarized police put down the riots, and Hillary will be tagged guilty by association.

And that is how Kim Kardashian gets elected president.

via Zero Hedge http://ift.tt/1S5waon Tyler Durden