Currency War Resumes – China Devalues Yuan To 5-Year Lows

After a brief hiatus from the ongoing currency wars, China fired another salvo at The Fed tonight by devaluing the Yuan fix to 6.5693 – its weakest against the USD since March 2011. After eight days higher in a row for The USD Index, it seems PBOC has turned its currency liberalization plan off, stabilizing the broad Renminbi basket (which has been steadily devalued) and turning its attention to devaluing against the USD. Having unleashed turmoil in August (pre-Sept FOMC) and January (post Dec rate-hike), it appears the rising rate-hike probabilities jawboned by The Fed are decidedly disagreeable to "authoritative persons" in China.

 

The Yuan Fix was driven down to March 2011 lows…

Front-running?

“It could be because the authorities want to alleviate some of the depreciation pressure before the Fed interest rate decision in June," said Christy Tan, head of markets strategy at National Australia Bank Ltd. in Hong Kong. "If there are signs of panic dollar buying, the PBOC will step in."

As it seems maintaining some 'stability' against the USD has lost its appeal as the USD surges once again…

 

What the chart above shows is that the Chinese currency (red) has been devaluing in an orderly and quiet manner for much of the year while maintaining the appearance of stability against the USD (blue). That appears to have changed now and the last time turmoil started to ripple through the CNHUSD markets – it didn't stop until Tom Cook lied to Jim Cramer and The PPT rescued the world.

The irony of the apparent stability in the broad-based Renminbi basket (while devaluing against the USD) is that it comes after a desperate China has reportedly given up on its liberalization goals. As The Wall Street Journal notes,

Behind closed doors in March, some of China’s most prominent economists and bankers bluntly asked the People’s Bank of China to stop fighting the financial markets and let the value of the nation’s currency fall.

 

They got nowhere. “The primary task is to maintain stability,” said one central-bank official, according to previously undisclosed minutes of the meeting reviewed by The Wall Street Journal.

 

The meeting left little doubt China’s top leaders have lost interest in a major policy shift announced in a surprise move just nine months ago. In August 2015, the PBOC said it would make the yuan’s value more market-based, an important step in liberalizing the world’s second-largest economy.

In reality, though, the yuan’s daily exchange rate is now back under tight government control, according to meeting minutes that detail private deliberations and interviews with Chinese officials and advisers who spoke with The Wall Street Journal about the country’s currency policy.

On Jan. 4, the central bank behind closed doors ditched the market-based mechanism, according to people close to the PBOC. The central bank hasn’t announced the reversal, but officials have essentially returned to the old way of adjusting the yuan’s daily value higher or lower based on whatever suits Beijing best.

The flip-flop is a sign of policy makers’ deepening wariness about how much money is fleeing China, a problem driven by its slowing economy. For now, at least, officials believe the benefits of freeing the yuan are outnumbered by the number of threats… though we note that a 3% depreciation of the yuan could add $25.6 billion to Chinese companies’ annual interest payments on dollar debts, according to estimates by analysts at BNP Paribas.

So the question is – will the Yuan turmoil ripple through markets enough to spook The Fed once more and dissolve what little credibility they have left or will Janet and her henchmen stand up to the foreign forces, hike rates to spit their own face, and deal with the aftermath through some more Citadel-driven VIXtermination? With VIX futures near record shorts and S&P futures at their longest in almost 2 years – there's not much easy leveraged money to squeeze there – like there was in August.

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All You Need To Know About The China Boom-Bust Cycle In One Chart

If anyone is still confused about the not so subtle dynamics between markets and monetary policy in China, or the country’s bipolar, and ever more frequent boom and bust cycles, you won’t be after seeing this chart from Socgen.

If still unclear, here is SocGen’s explanation:

Our economists expect China’s structural deceleration to continue over the coming years and it should thus remain a major source of uncertainty for commodity prices and equity markets alike. The recent recovery in Q1 16 was based on a sharp rebound in the property sector and significant credit injections. 

 

This stimulus can only be temporary, as it increases debt in the system, keeps zombie companies alive, and defers reforms, at the cost of higher risk for financial stability in the future. Policymakers are aware of the risks coming from an overheating housing market and excessive debt build-up. As long as the recovery in the property keeps going, the economy could perform more or less in line with market expectations.

 

But, as Chinese authorities will eventually reduce credit easing, we expect the economy to return on its deceleration path in the coming quarters. The economy is thus likely to continue suffering from a series of mini boom-and-bust-cycles that will create repeated periods of volatility.

We just had a 3 months period of stability. Following the latest Yuan fixing released moments ago, which at 6.5693 was the lowest since March 2011, it sounds like we are about to have some volatility.

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What It Takes To Be President Of The American Police State

Submitted by John Whitehead via The Rutherford Institute,

“The qualifications for president seem to be that one is willing to commit mass murder one minute and hand presidential medals of freedom to other war criminals in the next. One need only apply if one has very loose, flexible, or non-existent morality.”—Author and activist Cindy Sheehan

Long gone are the days when the path to the White House was open to anyone who met the Constitution’s bare minimum requirements of being a natural born citizen, a resident of the United States for 14 years, and 35 years of age or older.

Today’s presidential hopefuls must jump through a series of hoops aimed at selecting the candidates best suited to serve the interests of the American police state. Candidates who are anti-war, anti-militarization, anti-Big Money, pro-Constitution, pro-individual freedom and unabashed advocates for the citizenry need not apply.

The carefully crafted spectacle of the presidential election with its nail-biting primaries, mud-slinging debates, caucuses, super-delegates, popular votes and electoral colleges has become a fool-proof exercise in how to persuade a gullible citizenry into believing that their votes matter.

Yet no matter how many Americans go to the polls on November 8, “we the people” will not be selecting the nation’s next president.

While voters might care about where a candidate stands on healthcare, Social Security, abortion and immigration—hot-button issues that are guaranteed to stir up the masses, secure campaign contributions and turn any election into a circus free-for-all—those aren’t the issues that will decide the outcome of this presidential election.

What decides elections are money and power.

We’ve been hoodwinked into believing that our votes count, that we live in a democracy, that elections make a difference, that it matters whether we vote Republican or Democrat, and that our elected officials are looking out for our best interests. Truth be told, we live in an oligarchy, and politicians represent only the profit motives of the corporate state, whose leaders know all too well that there is no discernible difference between red and blue politics, because there is only one color that matters in politics—green.

As much as the Republicans and Democrats like to act as if there’s a huge difference between them and their policies, they are part of the same big, brawling, noisy, semi-incestuous clan. Watch them interact at social events—hugging and kissing and nudging and joking and hobnobbing with each other—and it quickly becomes clear that they are not sworn enemies but partners in crime, united in a common goal, which is to maintain the status quo.

The powers-that-be will not allow anyone to be elected to the White House who does not answer to them.

Who are the powers-that-be, you might ask?

As I point out in my book Battlefield America: The War on the American People, the powers-that-be are the individuals and corporations who profit from America’s endless wars abroad and make their fortunes many times over by turning America’s homeland into a war zone. They are the agents and employees of the military-industrial complex, the security-industrial complex, and the surveillance-industrial complex. They are the fat cats on Wall Street who view the American citizenry as economic units to be bought, sold and traded on a moment’s notice. They are the monied elite from the defense and technology sectors, Hollywood, and Corporate America who believe their money makes them better suited to decide the nation’s future. They are the foreign nationals to whom America is trillions of dollars in debt.

One thing is for certain: the powers-that-be are not you and me.

In this way, the presidential race is just an exaggerated farce of political theater intended to dazzle, distract and divide us, all the while the police state marches steadily forward.

It’s a straight-forward equation: the candidate who wins the White House will be the one who can do the best job of ensuring that the powers-that-be keep raking in the money and acquiring ever greater powers. In other words, for any viable presidential candidate to get elected today that person must be willing to kill, lie, cheat, steal, be bought and sold and made to dance to the tune of his or her corporate overlords.

The following are just some of the necessary qualifications for anyone hoping to be appointed president of the American police state. Candidates must:

Help grow the militaryindustrial complex: Fifty-five years after President Dwight D. Eisenhower warned about the growth of the “military-industrial complex” in his farewell address, the partnership between the government, the military and private corporations has resulted in the permanent militarization of America. From militarized police and the explosive growth of SWAT teams to endless wars abroad, the expansion of private sector contractors, and never-ending blowback from our foreign occupations, we have become a nation permanently at war. As the New York Times pointed out, “the military is the true ‘third rail’ of American politics.” The military-industrial complex understands the value of buying the presidency, and has profited from the incessant warmongering of Obama and his predecessors. If money is any indicator of who the defense industry expects to win this November, thus far, Hillary Clinton is winning the money race, having collected more campaign contributions from employees with the 50 largest military contractors.

 

Police the rest of the world using U.S. troops: The U.S. military empire’s determination to police the rest of the world has resulted in more than 1.3 million U.S. troops being stationed at roughly 1000 military bases in over 150 countries around the world, including 48,000 in Japan, 37,000 in Germany, 27,000 in South Korea and 9800 in Afghanistan. That doesn’t include the number of private contractors pulling in hefty salaries at taxpayer expense. In Afghanistan, for example, private contractors outnumber U.S. troops three to one. Now comes the news that the U.S. is preparing to send troops to Libya on a long-term mission to fight ISIS.

 

Sow seeds of discord and foment wars among other nations under the guise of democracy: It’s not enough for the commander-in-chief to lead the United States into endless wars abroad. Any successful presidential candidate also needs to be adept at stirring up strife within other nations under the guise of spreading democracy. The real motive, of course, is creating new markets for the nation’s #1 export: weapons. In this way, the U.S. is constantly arming so-called “allies” with deadly weapons, only to later wage war against these same nations for possessing weapons of mass destruction. It happened in Iraq when the U.S. sold Saddam Hussein weapons to build his war machine. It happened in Syria when the U.S. provided rebel fighters with military equipment and munitions, only to have them seized by ISIS and used against us. Now comes the news that President Obama has agreed to sell weapons to Vietnam, lifting a decades-long embargo against the nation whose civil war claimed the lives of more than 90,000 Americans.

 

Speak of peace while slaughtering innocent civilians: Barack Obama’s campaign and subsequent presidency illustrates this principle perfectly. The first black American to become president, Obama was awarded the Nobel Peace Prize long before he had done anything to truly deserve it. He has rewarded the Nobel committee’s faith in him by becoming one of the most hawkish war presidents to lead the nation, overseeing a targeted-killing drone campaign that has resulted in thousands of civilian casualties and deaths. Ironically, while Obama has made no significant effort to de-escalate government-inflicted violence or de-weaponize militarized police, he has gone to great lengths to denounce and derail private gun ownership by American citizens.

 

Prioritize surveillance in the name of security over privacy: Since 9/11, the Surveillance State has undergone a dramatic boom, thanks largely to the passage of the USA Patriot Act and so-called “secret” interpretations of the mammoth law allowing the NSA and other government agencies to spy on Americans’ electronic communications. What began as a government-driven program under George W. Bush has grown under Obama into a mass surveillance private sector that makes its money by spying on American citizens. As Fortune reports, “In response to security concerns after 9/11, Americans witnessed the growth of a massive domestic security apparatus, fueled by federal largesse.” That profit-incentive has opened up a multi-billion dollar video surveillance industry that is blanketing the country with surveillance cameras—both governmental and private—which can be accessed by law enforcement at a moment’s notice.

 

Promote the interests of Corporate America and Big Money over the rights of the citizenry: Almost every major government program hailed as benefiting Americans—affordable healthcare, the war on terror, airport security, police-worn body cameras—has proven to be a Trojan Horse aimed at enriching Corporate America while leaving Americans poorer, less secure and less free. For instance, the so-called “affordable” health care mandated by Congress has become yet another costly line item in already strained household budgets for millions of Americans.

 

Expand the powers of the imperial president while repeatedly undermining the rule of law: George W. Bush assumed near-absolute power soon after the September 11, 2001, attacks. Unfettered by Congress or the Constitution, Bush led the “war on terror” abroad and championed both the USA Patriot Act and Homeland Security Department domestically. This, of course, led to the Bush Administration’s demand that presidential wartime powers permit the President to assume complete control over any and all aspects of an international war on terrorism. Such control included establishing military tribunals and eliminating basic rights long recognized under American law.

 

When Barack Obama ascended to the presidency in 2008, there was a sense, at least among those who voted for him, that the country might change for the better. Those who watched in awe as President Bush chipped away at our civil liberties over the course of his two terms as president thought that perhaps the young, charismatic Senator from Illinois would reverse course and put an end to some of the Bush administration’s worst transgressions—the indefinite detention of suspected terrorists, the torture, the black site prisons, and the never-ending wars that have drained our resources, to name just a few. As we near the end of Obama’s two terms in office, that fantasy has proven to be just that: a fantasy. Indeed, President Obama has not only carried on the Bush legacy, but has taken it to its logical conclusion. Obama has gone beyond Guantanamo Bay, gone beyond spying on Americans’ emails and phone calls, and gone beyond bombing countries without Congressional authorization. As journalist Amy Goodman warned, “the recent excesses of U.S. presidential power are not transient aberrations, but the creation of a frightening new normal, where drone strikes, warrantless surveillance, assassination and indefinite detention are conducted with arrogance and impunity, shielded by secrecy and beyond the reach of law.”

 

Act as if the work of the presidency is a hardship while enjoying all the perks: The race for the White House is an expensive, grueling horse race: candidates must have at a minimum $200 or $300 million or more just to get to the starting line. The total cost for this year’s election is estimated to exceed $5 billion and could go as high as $10 billion. However, for the winner, life in the White House is an endless series of star-studded dinner parties, lavish vacations and perks the likes of which the average American will never enjoy. The grand prize winner will rake in a $400,000 annual salary (not including $100,000 a year for travel expenses, $19,000 for entertaining, $50,000 for “general” expenses and last but not least, $1,000,000 for “unanticipated” expenses), live rent-free in a deluxe, 6-storey, 55,000 square foot mansion that comes complete with its own movie theater and bowling alley, round-the-clock staff, florists, valets and butlers. Upon leaving the White House, presidents are gifted with hefty pensions, paid staff and office space, travel allowances and lifetime medical care. Ex-presidents can also expand upon their largesse by writing books and giving speeches (Bill Clinton was given a $15 million advance for his memoir and routinely makes upwards of $100,000 per speech).

Clearly, it doesn’t matter where a candidate claims to stand on an issue as long as he or she is prepared to obey the dictates of the architects, movers and shakers, and shareholders of the police state once in office.

So here we are once again, preparing to embark upon yet another delusional, reassurance ritual of voting in order to sustain the illusion that we have a democratic republic when, in fact, what we have is a dictatorship without tears. Once again, we are left feeling helpless in the face of a well-funded, heavily armed propaganda machine that is busily spinning political webs with which the candidates can lure voters. And once again we are being urged to vote for the lesser of two evils.

Railing against a political choice that offers no real choice, gonzo journalist Hunter S. Thompson snarled, “How many more of these stinking, double-downer sideshows will we have to go through before we can get ourselves straight enough to put together some kind of national election that will give me and the at least 20 million people I tend to agree with a chance to vote for something, instead of always being faced with that old familiar choice between the lesser of two evils?”

Remember, the lesser of two evils is still evil.

via http://ift.tt/1NLa4sT Tyler Durden

Eurogroup Agrees To Disburse €7.5BN To Greece Which Will Be Used To Repay Creditors

Once upon a time, markets trembled when Greek bailout implementation headlines were announced, which is what just happened if slightly ahead of our forecast schedule…

… and this time nobody cares. Well maybe the Greeks do, but by now even they realize that most of the “money” they receive will be used to repay creditors and especially the ECB, and they will see virtually none of it.

So, for them, or anyone else who cares, here are the key headlines and details as they come in. Few surprises from what had been leaked previously.

EUROGROUP MEETING ENDS, DEAL ALLOWS LOAN DISBURSEMENT
EU DIJSSELBLOEM: REACHED FULL STAFF LEVEL AGREEMENT ON GREECE

* * *

DIJSSELBLOEM: ESM TO APPROVE E10.3 BLN IN SEVERAL DISBURSEMENT
DIJSSELBLOEM: INSTITUTIONS TO HAVE FINAL CHECK ON LEGISLATION
DIJSSELBLOEM: NEED TO MAKE SURE GREECE STAYS ON FISCAL PATH
DIJSSELBLOEM: AGREED ON METHODOLOGY OF GREECE DEBT SUSTAINBLTY
DIJSSELBLOEM: ASKED ESM TO LOOK AT MEASURES IN DEBT REPAYMENTS
DIJSSELBLOEM: DEBT MID-LONG MEASURES INTO EFFECT JULY 2018
DIJSSELBLOEM: SMP, ANFA PROFITS ALSO PART OF DEBT DEAL
DIJSSELBLOEM: UNUSED ESM FUNDING COULD BE USED TO SWAP GR DEBT
DIJSSELBLOEM: AGREED ON MECHANISM FOR DEBT MEASURES IN L-TERM
DIJSSELBLOEM: IMPORTANT THAT IMF ON BOARD WITH GREECE
DIJSSELBLOEM: IMF TO RECOMMEND NEW PROGRAMME FOR GREECE BY YR END
DIJSSELBLOEM: BUT IMF WILL DECIDE ON NEW DEBT SUSTAINABILITY
DIJSSELBLOEM: DEBT RELIEF WILL BE DELIVERED AT END PROGRAM

* * *

MOSCOVICI: GREECE SHOWED POLITICAL RESPONSIBILITY
MOSCOVICI: ESSENTIAL THAT IMF REMAINS IN GREECE PROGRAM
MOSCOVICI: GREECE WILL BE ABLE TO REPAY STATE ARREARS NOW

* * *

REGLING: LOAN TRANCHES LINKED WITH GR PROGRAM IMPLEMENTATION
REGLING: FIRST GREECE LOAN TRANCHE OF E7.5 BLN IN JUNE
REGLING: SECOND LOAN TRANCHE TO BE GIVEN IN AUTUMN
REGLING: GREECE NOW TO IMPLEMENT OUTSTANDING PRIOR ACTIONS

* * *

According to Bloomberg

First set of measures includes:

  • Smoothening the EFSF repayment profile under the current weighted average maturity
  • Use EFSF/ESM diversified funding strategy to reduce interest rate risk without incurring any additional costs for former program countries
  • Waiver of the step-up interest rate margin related to the debt buy-back tranche of the 2nd Greek program for the year 2017
  • “Decision on the smoothening of the EFSF repayment profile and the reduction of interest rate risks should be taken as a matter of priority”

For the medium term, the Eurogroup expects to implement a possible second set of measures following the successful implementation of the ESM program:

  • Abolish the step-up interest rate margin related to the debt buy-back tranche of the 2nd Greek program as of 2018
  • Use of 2014 SMP profits from the ESM segregated account and the restoration of the transfer of ANFA and SMP profits to Greece (as of budget year 2017) to the ESM segregated account as an ESM internal buffer to reduce future gross financing needs.
  • Liability management – early partial repayment of existing official loans to Greece by utilizing unused resources within the ESM program to reduce interest rate costs and to extend maturities
  • If necessary, some targeted EFSF reprofiling (e.g. extension of the weighted average maturities, re- profiling of the EFSF amortization as well as capping and deferral of interest payments) to the extent needed to keep GFN under the agreed benchmark in order to give comfort to the IMF and without incurring any additional costs for former program countries or to the EFSF

For the long term, the Eurogroup also agrees on a contingency mechanism on debt which would be activated after the ESM program to ensure debt sustainability in the long run in case a more adverse scenario were to materialize

  • Such mechanism could entail measures such as a further EFSF reprofiling and capping and deferral of interest payments

Eurogroup mandated finance ministry officials from the currency bloc “to verify in the next few days the full implementation of the outstanding prior actions,” for the conclusion of the Greek bailout review, according to e-mailed statement following meeting of euro area finance ministers in Brussels.

EWG of finance ministry officials have been mandated to verify “in particular the corrections to the legislation on the opening up of the market for the sale of loans, and on the pension reform, as well as the completion of all prior actions related to the government pending actions in the field of privatization”

Following full implementation of all prior actions and subject to the completion of national procedures, governing bodies of the euro area’s crisis fund ESM will approve EU10.3b disbursement of bailout loans to Greece

  • First sub-tranche of EU7.5b to cover debt servicing needs and to allow a clearance of an initial part of arrears as a means to support the real economy
  • “Subsequent disbursements to be used for arrears clearance and further debt servicing needs will be made after the summer”
  • “Disbursements for arrears clearance will be subject to a positive reporting by the European Institutions on the clearance of net arrears”

Eurogroup “recalls” Greece’s medium-term primary budget surplus target of 3.5%/GDP as of 2018

Ministers set benchmark of Greek debt sustainability:

  • Country’s gross debt financing needs, or GFN, “should remain below 15% of GDP during the post program period for the medium term, and below 20% of GDP thereafter”

* * *

And again, here is the punchline:

First sub-tranche of EU7.5b to cover debt servicing needs and to allow a clearance of an initial part of arrears as a means to support the real economy

In other words, all the money Greece just got… will promptly be used to repay its creditors.

The short version: Greece has promised to implement even more Draconian measures (which may or may not happen) in order to get money that was already promised to it, while the Eurogroup disburses just enough cash to cover the immediate funding needs of the creditors with a little left over to pay for government arrears, while future tranches will be paid out if Greece complies with its promises (which will not happen), and meanwhile the Eurogroup promises to maybe someday provide debt relief, once Greece ends its bailout program… which will certainly never happen.

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Political Polarity Shift – “Trigger Happy Hillary” Making Dems The War Party

Authored by Justin Raimondo via AntiWar.com (h/t Contra Corner blog),

Americans are rejecting imperialism – on both sides of the political spectrum

As Bob Dylan put it, “the times they are a changing!” – and that is certainly the case when it comes to the debate over US foreign policy this election season. A recent article in the Boston Globe, summarizing the observations of a group of Brown University students who tracked the foreign policy discourse of the candidates, underscored what is happening on both sides of the partisan divide:

“As we watched, Republican voters rejected every candidate who favored their party’s traditional hardline foreign policies, including Lindsey Graham, Chris Christie, Jeb Bush, and Marco Rubio…. Trump, the presumptive nominee, has broken with foreign policy dogma on a host of issues. He asserts that decades of foreign wars have not been good for the United States – hardly a traditional Republican view.”

The Democratic party, too, is experiencing what these youthful observers describe as a “foreign policy identity crisis”:

“Clinton, the likely nominee, is an activist by nature and supports escalation from Afghanistan to Syria to Ukraine. Her opponent, Senator Bernie Sanders, has condemned her ‘very aggressive policy of intervention’ and said he does not believe the United States should be ‘the world’s policeman.’ Yet though Sanders effectively pushed Clinton further left in terms of domestic policy, he was unsuccessful in changing her deeply held foreign policy views.”

The two parties are undergoing a process of “role reversal,” as these students put it, right before our eyes. Trump is now attacking “trigger happy Hillary,” while Mrs. Clinton is parrying these thrusts with accusations that “dangerous Donald” lacks the steadiness of an Establishment politician who sticks with the familiar script that casts America in the role of “the indispensable nation” destined to police the world.

With the fall of the Soviet Union and the evaporation of the international communist movement as a credible threat to US national security,  American conservatives have been steadily moving – in fits and starts – back to their historic position of nonintervention in the affairs of other nations. Neoconservatism was an anomaly, a tangent occasioned by the alleged necessities of the cold war: its life was prolonged by the 9/11 attacks, but as the effect of that signal event wore off, and as the country exhausted itself in a futile (and losing) military campaign to make the Middle East into an Arabic version of Kansas, the rebellion against the neocons gathered strength and finally triumphed. No matter what the fate of Trump’s candidacy, and in spite of his other controversial views, he has succeeded in overthrowing the old GOP foreign policy orthodoxy and replacing it with what he calls a policy of “America First.”

And while this inward-looking nationalism has its problems and contradictions, the direction the Right seems to be moving is an unmistakable victory for anti-interventionists: the terms of the foreign policy discourse have been shifted in a fundamental way, and – much to the neocons’ chagrin – there is no going back.

On the left, too, the anti-interventionists are on the offensive. Although they have not succeeded in overthrowing the Establishment – thanks to a rigged primary system, Mrs. Clinton has all but clinched the nomination – Sanders has directly challenged Clintonian interventionism and he is taking his fight all the way to the Democratic party national convention. Sanders’ critique of the bipartisan foreign policy “consensus” springs from the same roots as Trump’s: correctly perceiving an economic and even a spiritual crisis on the home front, Bernie wants America to come home and concentrate on solving our domestic problems – which threaten to overwhelm us even as we go marching off to “liberate” the world.

This turmoil is cause for optimism – and, indeed, in researching this column, I took at look back at one of my old columns, “The Case for Optimism,” in the course of which I wrote the following:

“To be sure, the military-industrial complex gets rich off our wars, but the fact is that their rising stock values are making the rest of us poorer – and, increasingly, the American people (and people all over the world, for that matter) are well aware of it. Which brings us to the third major factor limiting the War Party’s future prospects: technological advances that make the acquisition of knowledge much easier.

 

“It used to be that we had to rely on government officials and their journalistic camarilla for information about America’s far-flung military interventions: back in 1914, for example, very few Americans could place Sarajevo on a map, and even fewer knew of the complex political and social factors that led to the fateful assassination of an Austrian archduke in that city, an event that eventually dragged us into the Great War. It was easy to fool the people into believing a conflict that would destroy European civilization at its zenith was really a war to ‘make the world safe for democracy.’

 

“Today the job of the war propagandist is much harder, and the reason is the Internet. While most Americans still probably couldn’t place Sarajevo on a map, they could easily choose to do so with a few keystrokes – and therein lies the big problem faced by warmongers these days.”

The case for optimism has never been stronger. The War Party is beleaguered, besieged, and beside itself with panic because the American people are finally waking up. A lot of this is due to the Internet – and the existence of Antiwar.com has played a part in all this.

For twenty years we’ve been debunking the lies of the War Party and building up a slow but steady momentum on behalf of a real movement to change American foreign policy. And now the big breakthrough is coming, with a real mass rebellion against the bipartisan “consensus” that insists America’s proper role is to police the world. With our country facing a growing internal crisis, and the foreign wars we’re engaged in turning into disasters on every front, the American people are rising up and demanding an end to the Empire.

The part Antiwar.com plays in all this is key – because the voters don’t necessarily have the facts on hand. Ordinary folks don’t have the time or the inclination to research what’s really going on in Syria, or what the facts are about who’s paying the lion’s share for NATO. They have jobs, families, lawns to mow and kids to take to soccer practice – they don’t have time to become foreign policy experts!

So when some bought-and-paid for “expert” is cited in the media as being absolutely certain that some tinpot despot has “weapons of mass destruction,” or that Vladimir Putin is definitely plotting to march on Paris tomorrow, they may be skeptical of the need for Uncle Sam to intervene – but they don’t know enough to contest “expert” opinion. This is how the Beltway crowd pulls the wool over people’s eyes every time. Yet there is an antidote for the poisonous lies being spread by the War Party – and that’s Antiwar.com.

via http://ift.tt/1TwuTe3 Tyler Durden

CNN Lashes Out At Trump Over Vince Foster “Conspiracy”, Rushes To Hillary’s Defense

Following Trump’s bombardment of Bill and Hillary Clinton over the past 24 hours, first with a video clip featuring Bill rape accusers Kathleen Willey and Juanita Broaddrick, and shortly thereafter by digging up the most sensitive skeleton in the Clintons’ closet, that of Vince Foster, whose death Trump said he found “very fishy“, we wondered briefly if and how Hillary would respond.

We got our answer moments ago when the response came, only not from Hillary, but from one of her favorite TV outlets, CNN whose Jake Tapper valiantly stepped up to the Clintons’ defense.”

“Once again, journalists are in the unhappy predicament of trying to decide whether and how to cover false allegations raised by a candidate for president of the United States,” Tapper said at the start his show, “The Lead.” He continued: “The notion that this was a murder is a fiction born of delusion and untethered to reality and contradicted by evidence reviewed in at least six investigations, one of them by Ken Starr, hardly a Bill Clinton defender. To say otherwise is ridiculous, and, frankly, shameful.”

Tapper claims reiterating that his scrutiny of Trump’s comments wasn’t “pro-Clinton” or “anti-Trump” but a “pro-truth position.” Some would beg to differ.

Tapper continued: “Trump called the circumstances surrounding Foster’s death “very fishy” in an interview with The Washington Post, saying the aide had “intimate knowledge” of events surrounding the Clintons. Trump has recently launched personal attacks at Hillary Clinton, the Democratic presidential front-runner.

“I don’t bring [Foster] up because I don’t know enough to really discuss it,” Trump told the newspaper. “I will say there are people who continue to bring it up because they think it was absolutely a murder. I don’t do that because I don’t think it’s fair.”

Tapper’s meltdown at Trump continued for having “lent credence to a bizarre and unfounded conspiracy theory,” saying Trump was “right to say it wasn’t fair to bring up the conspiracies. You’re right, it’s not fair that you did that, certainly not to Mr. Foster’s widow or their three children.”

His conclusion: “The notion that this was a murder is a fiction borne of delusion and untethered to reality and contradicted by evidence in at least six investigations. To say otherwise is ridiculous and frankly shameful. This is not a pro-Clinton position or an anti-Trump position, it is a pro-truth position.

Which, of course, anyone rushing to Hillary’s defense would conclude with.

* * *

We doubt Tapper has brought this, or any other issue to a close, in this most remarkable presidential race in history.

In fact, judging by the speed and severity of his response, the CNN anchor, one of many who still hasn’t grasped how Trump operates, has merely assured that Trump will not only continue to irritate the Tappers of the world by bringing up Foster, but will also push deeper until he penetrates through the thick shield of media defenders surrounding Hillary and forces her to confront demons she was confident has been buried decades ago.

Full clip below.

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

Shootings In Chicago Are Up An Astonishing 50% From This Time Last Year

This past weekend in Chicago saw another five killed and 40 wounded in shootings, slightly down from Mother's day weekend when eight people were killed and 42 wounded. The two weekends are indicative of what's taking place in the homicide riddled city, in which the number of people shot so far this year is running an astonishing 50% above this time last year – what's worse, summer is not even here yet, which is traditionally the city's most violent period.

Recall that 2016 homicides have already been projected to be at the highest levels since 2011, and at this pace, prior projections from just two months ago will prove to be stunningly low. Which is quite a feat for a city which ranks as one of the most regulated cities in the nation for gun control.

So far in 2016, 1,382 people have been shot and 244 have died from the wounds, up from 904 shot and 157 killed over the same period in 2015. Chicago's police superintendent Eddie Johnson proclaimed "as we look toward the summer months, violence will not be tolerated"… as opposed to all of the violence leading up to this summer which apparently was.

Johnson gave no further detail as to just how he planned to back up his claims to stop the violence other than the department is asking for volunteers to work overtime during Memorial Day weekend.

As we noted before, "It's the struggling economy." One way Johnson could perhaps get some relief would be if the economy were to pick up and some of those that have turned to a life of violence and crime would at least have a viable option as a way out of that life.

As a recent Pew survey showed, by 2014 median income had fallen 13 percent from 2004 levels, while expenditures increased by nearly 14 percent, and the change in expenditure-to-income ratio in the years following the financial crisis show households that are increasingly financially strained.

 

In the meantime, history has proven that all of the algorithms and "strategic subject lists" in the world won't be able to stem the violence for those that have no choice but to take to the streets to help make ends meet for their families.

via http://ift.tt/1TyaEr9 Tyler Durden

Japan’s Broken Economy – 25 Years Of Failed “Stimulus” & “Temporary Illusions”

Submitted by Jeffrey Snider via Alhambra Investment Partners,

So thoroughly destroyed is Japan’s economy that some of the numbers it produces are beyond comprehension, just staggering in any meaningful context. For example, Japan’s real GDP (SAAR) for Q1 2016 was ¥530 trillion (chained 2005). That compared to ¥447 trillion in Q1 1994. Over two decades and two additional years the Japanese economy has grown by a grand total of 18.5%. On straight arithmetic alone it doesn’t work out to 1% per year let alone on a compounded basis.

Since the first quarter of 2001, meaning fifteen years, real GDP “advanced” 10.4% total. Clearly the Japanese economy as bad as it was has slowed from even that revolting baseline. We don’t have to venture far or try too hard to guess when this new “slowing” occurred: since the first quarter of 2008, Japanese GDP thanks to Q1’s positive number is now the slightest amount more than eight years ago (¥530.01 trillion now vs. ¥529.63 trillion, or +0.1%). As everywhere else around the world, the Great Recession was not only a global event, it “somehow” broke the global economy in chillingly uniform fashion.

ABOOK May 2016 Japan GDP Trajectory GDP

There is something quite sinister contained within this review, particularly since I haven’t presented the Japanese economy much of any baseline at all. It is fashionable especially of late to believe this is all some trick of slowing demographics and therefore all “stimulus” is to some degree helpless in the face of Japan’s determined self-extinction. There is some truth to the charge, which is the same of any good lie, but it doesn’t amount to a 1% baseline. Capitalism is not strictly population; in fact, that is the true hidden genius and value of capitalism as it creates productive, sustained societal gain well above any demographic shifts. At 1% and less over nearly a quarter century we can safely assume there has been no capitalism practiced in Japan during that time.

For sake of further (and more damning) argument, let’s just assume that the aging population is actually to blame for Japan’s 1% unevenness. That still leaves the final slowing, the right hand side of the chart above where even 1% is now a dream and a seemingly unattainable goal. Retirement and aging didn’t suddenly amplify in 2008 and 2009.

ABOOK May 2016 Japan GDP Trajectory QE Drags

Given the history of intervention and “stimulus”, and more so when it occurs and really re-occurs, any impartial observer would be forgiven if they believed that QE’s were actually constant impediments to growth (a negative multiplier in the parlance of the orthodoxy). The proliferation of “stimulus” after the GR correlates only with this downshift in the Japanese economy that cannot be due to demographics. At best, QE’s have accomplished nothing at all positive, leaving no trace of something actually being stimulated for all the sustained “stimulus”; at worst, QE is the cause of Japan’s further nightmarish descent.

There is an easy case to be made against quantitative easing – starting with the distinct inability of the Bank of Japan (or any central bank inflicting it upon whatever economic system) to get the quantity “right.” If it is supposed to be a precisely-determined amount of precisely-measured “stimulus” then having to do it over and over and over invalidates at least the “Q” if not the “E” too. In Japan, the damage from QE is a little easier to observe than in other places, but as anywhere else it is households/consumers that bear the brunt of these unfortunate distortions that amount to little other than PR stunts (no matter how poorly QE’s perform, the media dutifully and reflexively continues to call it all “stimulus”).

ABOOK May 2016 Japan GDP Trajectory HH

Household spending in Japan has underperformed even overall GDP during these lost decades – not even managing steady 1%. After the rift in 2008 and 2009, HH’s further underperformed like overall GDP though had managed to get close to the pre-crisis trajectory. That was before QQE devastated even that likeness of recovery. Monetarists have claimed that somebody has to lose in these kinds of redistribution schemes, and the elevated quantity of QQE makes clear who that was.

These losers are only supposed to be on the short end for a short while until the stimulated recovery brings the economy roaring back so that they are paid in full for their forced “contributions.” Yet, as is clear of overall GDP, QQE, as the numerous QE’s before it, has been all cost with no recovery at all; in fact, as noted above, the Japanese economy is worse off now than it was before. The massive scale of QQE intrusion and the violent, negative reaction to it in household spending shows the true nature of all QE no longer entangled in other economic factors; the purest distillation of cause and effect. 

What we find, then, of Japan is the combination of factors that are evident almost everywhere else around the world post-Great Recession. Monetary “stimulus” is asking consumers and households to bear the burdens of that “stimulus” in order that the full recovery will take place – except as we find elsewhere, the post-GR environment has already proven that the recovery will never take place. Central banks are thus placing greater burdens upon their people for an outcome that simply can’t happen. I think that easily amounts to “stimulus” that adds only more negative factors to a global economy with already a huge burden.  

The reason for it is straight forward owing to a fallacy about the GR itself. It was never a cyclical event, nor was it the cause of this split in the economy – all economies for that matter. The Great Recession was instead a revelation of the true global economic state that existed for a long time before it. Growth and prosperity, even in Japan where GDP actually accelerated for the briefest of moments near to the 1.25% “upper bound” (a very sad commentary on Japan where just 0.25% more in GDP compounding amounts to a different world entirely) was never more than a temporary illusion.

All the world’s “stimulus” has not been able to budge it since the paper economy of the precrisis evaporated into the credit default swaps of AIG, and the collateral shortage that never has replaced the uniformity of MBS repo; like Humpty Dumpty, all Bernanke’s horses and all Kuroda’s men haven’t been able to put together the one unifying factor from Japan to the United States, from Europe to China. It’s as if there was something else all along that took every monetarism that every central bank offered anywhere it was offered and swallowed it whole without leaving the slightest economic trace, only further and further slowing. What can possibly be bigger than all the world’s QE’s and “stimulus” combined?

ABOOK Apr 2016 Econ Baselines GDP Dark Leverage Supply

ABOOK May 2016 Europe GDP Nominal Baseline

ABOOK May 2016 China Trade Paradigm Shift

via http://ift.tt/1Ty7W4H Tyler Durden

Japan’s Broken Economy – 25 Years Of Failed “Stimulus” & “Temporary Illusions”

Submitted by Jeffrey Snider via Alhambra Investment Partners,

So thoroughly destroyed is Japan’s economy that some of the numbers it produces are beyond comprehension, just staggering in any meaningful context. For example, Japan’s real GDP (SAAR) for Q1 2016 was ¥530 trillion (chained 2005). That compared to ¥447 trillion in Q1 1994. Over two decades and two additional years the Japanese economy has grown by a grand total of 18.5%. On straight arithmetic alone it doesn’t work out to 1% per year let alone on a compounded basis.

Since the first quarter of 2001, meaning fifteen years, real GDP “advanced” 10.4% total. Clearly the Japanese economy as bad as it was has slowed from even that revolting baseline. We don’t have to venture far or try too hard to guess when this new “slowing” occurred: since the first quarter of 2008, Japanese GDP thanks to Q1’s positive number is now the slightest amount more than eight years ago (¥530.01 trillion now vs. ¥529.63 trillion, or +0.1%). As everywhere else around the world, the Great Recession was not only a global event, it “somehow” broke the global economy in chillingly uniform fashion.

ABOOK May 2016 Japan GDP Trajectory GDP

There is something quite sinister contained within this review, particularly since I haven’t presented the Japanese economy much of any baseline at all. It is fashionable especially of late to believe this is all some trick of slowing demographics and therefore all “stimulus” is to some degree helpless in the face of Japan’s determined self-extinction. There is some truth to the charge, which is the same of any good lie, but it doesn’t amount to a 1% baseline. Capitalism is not strictly population; in fact, that is the true hidden genius and value of capitalism as it creates productive, sustained societal gain well above any demographic shifts. At 1% and less over nearly a quarter century we can safely assume there has been no capitalism practiced in Japan during that time.

For sake of further (and more damning) argument, let’s just assume that the aging population is actually to blame for Japan’s 1% unevenness. That still leaves the final slowing, the right hand side of the chart above where even 1% is now a dream and a seemingly unattainable goal. Retirement and aging didn’t suddenly amplify in 2008 and 2009.

ABOOK May 2016 Japan GDP Trajectory QE Drags

Given the history of intervention and “stimulus”, and more so when it occurs and really re-occurs, any impartial observer would be forgiven if they believed that QE’s were actually constant impediments to growth (a negative multiplier in the parlance of the orthodoxy). The proliferation of “stimulus” after the GR correlates only with this downshift in the Japanese economy that cannot be due to demographics. At best, QE’s have accomplished nothing at all positive, leaving no trace of something actually being stimulated for all the sustained “stimulus”; at worst, QE is the cause of Japan’s further nightmarish descent.

There is an easy case to be made against quantitative easing – starting with the distinct inability of the Bank of Japan (or any central bank inflicting it upon whatever economic system) to get the quantity “right.” If it is supposed to be a precisely-determined amount of precisely-measured “stimulus” then having to do it over and over and over invalidates at least the “Q” if not the “E” too. In Japan, the damage from QE is a little easier to observe than in other places, but as anywhere else it is households/consumers that bear the brunt of these unfortunate distortions that amount to little other than PR stunts (no matter how poorly QE’s perform, the media dutifully and reflexively continues to call it all “stimulus”).

ABOOK May 2016 Japan GDP Trajectory HH

Household spending in Japan has underperformed even overall GDP during these lost decades – not even managing steady 1%. After the rift in 2008 and 2009, HH’s further underperformed like overall GDP though had managed to get close to the pre-crisis trajectory. That was before QQE devastated even that likeness of recovery. Monetarists have claimed that somebody has to lose in these kinds of redistribution schemes, and the elevated quantity of QQE makes clear who that was.

These losers are only supposed to be on the short end for a short while until the stimulated recovery brings the economy roaring back so that they are paid in full for their forced “contributions.” Yet, as is clear of overall GDP, QQE, as the numerous QE’s before it, has been all cost with no recovery at all; in fact, as noted above, the Japanese economy is worse off now than it was before. The massive scale of QQE intrusion and the violent, negative reaction to it in household spending shows the true nature of all QE no longer entangled in other economic factors; the purest distillation of cause and effect. 

What we find, then, of Japan is the combination of factors that are evident almost everywhere else around the world post-Great Recession. Monetary “stimulus” is asking consumers and households to bear the burdens of that “stimulus” in order that the full recovery will take place – except as we find elsewhere, the post-GR environment has already proven that the recovery will never take place. Central banks are thus placing greater burdens upon their people for an outcome that simply can’t happen. I think that easily amounts to “stimulus” that adds only more negative factors to a global economy with already a huge burden.  

The reason for it is straight forward owing to a fallacy about the GR itself. It was never a cyclical event, nor was it the cause of this split in the economy – all economies for that matter. The Great Recession was instead a revelation of the true global economic state that existed for a long time before it. Growth and prosperity, even in Japan where GDP actually accelerated for the briefest of moments near to the 1.25% “upper bound” (a very sad commentary on Japan where just 0.25% more in GDP compounding amounts to a different world entirely) was never more than a temporary illusion.

All the world’s “stimulus” has not been able to budge it since the paper economy of the precrisis evaporated into the credit default swaps of AIG, and the collateral shortage that never has replaced the uniformity of MBS repo; like Humpty Dumpty, all Bernanke’s horses and all Kuroda’s men haven’t been able to put together the one unifying factor from Japan to the United States, from Europe to China. It’s as if there was something else all along that took every monetarism that every central bank offered anywhere it was offered and swallowed it whole without leaving the slightest economic trace, only further and further slowing. What can possibly be bigger than all the world’s QE’s and “stimulus” combined?

ABOOK Apr 2016 Econ Baselines GDP Dark Leverage Supply

ABOOK May 2016 Europe GDP Nominal Baseline

ABOOK May 2016 China Trade Paradigm Shift

via http://ift.tt/1Ty7W4H Tyler Durden

With The Lowest Volume Since Q1 2014, The Global M&A Boom May Be Over

Global M&A fell off a cliff in Q1, with volume levels not seen since Q1 2014. Dollar volume was down 49.2 percent sequentially, and 13.8 percent on a YoY basis.

 

According to Goldman Sachs, economic uncertainty, higher levels of volatility, and uncertainty around global central bank activity all played a role in the slowdown.

From Goldman's 10-Q

During the first quarter of 2016, our business activities were negatively impacted by a challenging operating environment characterized by economic uncertainty, higher levels of volatility and significant price pressure across both equity and fixed income markets, particularly during the first half of the quarter. These factors, as well as uncertainty around global central bank activity, impacted investor conviction and risk appetite for market-making activities, and industry-wide equity underwriting and mergers and acquisitions activity for investment banking activities.

The question is whether or not the slowdown is indicative of the M&A boom being over, or is it just a temporary hiccup. Using Goldman's rationale, the boom may just be over.

Economic uncertainty abounds after the US posted a Q1 GDP of dismal .5%, and central bankers are as confused as they ever were, with planners unable to come to a consensus on who can intervene in the markets, or when, and whether or not it's ok for the US to raise rates.

If the M&A boom is over, here are the banks that will be hardest hit by the slowdown

As the WSJ points out, banks such as Goldman Sachs and JP Morgan have diversified enough businesses where they can absorb some of the slowdown in M&A, but the smaller boutique firms such as Lazard, Evercore Partners, Greenhill, Moelis, and Houlihan Lokey don't have that luxury, and may see shares hit the hardest over the coming months because of it.

As the very same conditions persist throughout the second quarter that drove such a severe slowdown in the first quarter, it's reasonable to expect that the M&A boom may have just hit the wall.

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