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For the latest confirmation of just how trapped in a corner of its own making the Fed now finds itself, look, or rather read no further than the presentation given moments ago by St. Louis Fed president James Bullard before the CFA Society in St. Louis which was circular, confusing, illogical, and thus a splendid summary of the Fed’s “thinking” from beginning to end.

In it Bullard, who one month ago said he favors 4 rate hikes in 2016, said that it would now be “unwise” for the Fed to continue hiking interest rates given declining inflation expectations and recent equity market volatility, in comments that mark a stark change of direction for one of the Fed’s more hawkish inflation foes. 

What he really meant is that having digested the Fed’s policy error which was the decision to hike rates in December in the middle of a global recession (as warned here quite explicitly) not only did global markets tank, but so did inflation expectations (the 5Y5y inflation outlook for the US was lower than that for Europe as recently as one week ago) with the market now pricing in not only a halt to rate hikes, but a return to ZIRP if not Negative rates in the U.S.

And here comes the first confirmation of just how confused the Fed is:

• BULLARD SAYS FED HAD GOOD REASONS TO HIKE IN DECEMBER AND DOES  NOT CONSIDER THE MOVE A MISTAKE

Yes, the Fed it hiked: and the hike itself led to the collapse in not only inflation expectations but markets, and the latest devaluation of the Yuan. But one clearly can not be a Fed economist to realize all these very simple things.

The ironies continues: Bullard, who for much of last year argued for an earlier rate hike, said he now feels key assumptions supporting higher rates have been undermined.

Inflation expectations have fallen “too far for comfort,” making it more probable inflation itself will fall and continue to miss the Fed’s 2 percent target, Bullard said in remarks prepared for delivery to a gathering of financial analysts.

“I regard it as unwise to continue a normalization strategy in an environment of declining market-based inflation expectations,” Bullard said. In addition, declining equity prices and other tightened financial conditions have made dangerous asset bubbles “less of a concern over the medium term.”

As a result, it would be “unwise” for the Fed to continue hiking interest rates given declining inflation expectations and recent equity market volatility.

And just like that, Bullard admits that just like all throughout the 2009-2015 period, the Fed remains hostage to the market’s every whim.

Then there was the topic of bubbles, which was mentioned on at least 8 separate occasions in his presentation. His point here was simple: at 2100, the S&P is too high and so the Fed was justified to hike; at 1900 the S&P is too low and the bubbles have popped. It appears that for the Fed, the Fed balance sheet implied fair value of 2,000 for the S&P is the perfect sweet spot of “fair value”. 

This lunacy is best summarized by the following tweet:

Bullard says one reason for hiking was to prevent bubbles. Then after they hike and stocks fall he says they should pause hiking. Circular?

— GreekFire23 (@GreekFire23) February 18, 2016

Here is one of the Fed’s biggest fake hawks justifying the need for a full Fed relent, and halting the rate hike cycle until risk asset prices increase:

• BULLARD:TIPS SPREADS DOWN 100 BP; WANT TO SEE COME BACK UP

But what about the Fed’s own inflation survey which suggest far higher inflation expectation?

• BULLARD:DON’T TRUST SURVEY MEASURES OF INFL EXPCNS; TOO STATIC

Translation: these aren’t influenced by the S&P500 so ignore them.

Another question: what if the market is simply reflecting the slide of the world into another recession?

• BULLARD: DON’T THINK GLOBAL MKT SELL-OFF PREDICTING RECESSION

Oh ok. But what if it is?

• BULLARD: PLENTY OF CAPACITY TO EASE IF NEED TO

Yeah, 25 basis points.

But the punchline, and why tonight’s speech was a rerun of the first Bullard moment from October 15, 2014 when the market soared after Bullard hinted at QE4 was the following:

• BULLARD: MOST NATURAL OPTION IF NEED WOULD BE FURTHER Q.E.

And there it is: the first admission that the Fed is not only contemplating NIRP – in the middle of a rate-hike cycle no less – but also QE.

What should be most troubling for the Fed is that while any other time a Fed hint of more QE would have sent futures soaring, that this time nothing is happening as a result of the “second Bullard moment” is the most disturbing sign that not only can the Fed can no longer jawbone the market higher, even with the most nonsensical statements and hidden promises, but that the Fed is on the verge of losing control of the market.

For those who wish to waste 5 minutes of their life, his presentation is below (pdf)

via Zero Hedge http://ift.tt/1Ohb0OI Tyler Durden

Submitted by James Brovard via The Mises Institute,

In Iraq and Afghanistan, US military officers routinely handed bundles of cash to local residents to buy influence and undermine resistance to the American occupation. Such payments came in especially handy after US troops inadvertently killed innocent civilians or sheep. Billions of dollars were shoveled out with little or no oversight as part of the Pentagon’s “Money as a Weapon System” program.

In the same way, politicians have long relied on money as a weapon system to buy votes or to undermine resistance to Washington. Presidents and congressmen are not carrying out a formal counterinsurgency against the American people. But they realize that addicting citizens to government handouts is the easiest way to breed mass docility and stretch their power.

Politicians are dividing Americans into two classes — those who work for a living and those who vote for a living. Federal food programs are now feeding more than 100 million Americans. Since 1983, the number of people receiving aid from the federal government has more than doubled — rising from 66 million to 153 million people. The number of people tapping means-tested handout programs has soared from 42 million to 109 million. Dependency has skyrocketed during an era of relative prosperity.

In the same way that King Henry VIII cemented his power by distributing seized monasteries to his supporters in the early 1500s, contemporary politicians buttress their power by showering hundreds of billions of dollars on likely voters.

Like medieval kings who distributed land to any favored lackey, today’s politicians feel entitled to redistribute income to any group they please. Nowadays, there is no property title half as sacrosanct as a politician’s decree that some group deserves more handouts. But every new benefit program increases political control over recipients and over the people forced to finance the benefits.

Handouts provide cheap halos for politicians. Some people view government handouts as if they are nothing more than good intentions made manifest. But every government aid intervention shifts the incentives on how millions of people live. Federal student aid drove up college tuition which is helping spawn demands for federally-paid free tuition for all students. Medicaid and Medicare roiled the health care system and sparked perpetual inflation that spurs demands for nationalized health care. ObamaCare is spawning millions of new dependents who will view politicians as saviors in the coming years.

Politicians and bureaucrats strive to undermine traditional American virtues and maximize the number of people on the dole. The Agriculture Department is financing propaganda recruiting programs for food stamps. Recent reforms in most states allow people to snare food stamps merely by making a phone call or filling out an online application. That is far less bothersome than going to a job interview.

The Obama administration claims that the surge of food stamp dependency is making America prosperous because each dollar given in food stamps supposedly generates $1.84 in economic activity. If that was true, then government could make us all rich by giving food stamps to everyone. In reality, handouts are merely political multipliers.

Good faith government handouts are almost as rare as good faith wars. The welfare state buttresses itself with an array of statistical sleights intended to make citizens appear worse off than they are. USDA conducts an annual “food security” survey whose results are widely reported (including by Obama) as a proxy for the number of hungry Americans. If someone feared running out of food on a single day (but didn’t run out), that is an indicator of being “food insecure” for the entire year. If someone craved organic kale but could only afford conventional kale, that is another “food insecure” indicator. However, families receiving food stamps are over 50 percent more likely to be ”food insecure” than similar low-income households not on food stamps, according to a analysis. And “Food insecurity” was far more widespread in 2013 (14.3 percent of all households) than in 2007 (11.1 percent) even though the number of food-stamp recipients rose from 26 million to 47 million in the same period.

H.L. Mencken quipped that “every election is a sort of advanced auction of stolen goods.” The more politicians promise to some people, the more they entitle themselves to seize from everyone else. The federal government poached more than $3 trillion in taxes last year — largely to bankroll payments and services to its dependents.

The more people who depend on Washington, the more difficult it becomes to leash politicians. For scores of millions of voters, the biggest peril from Washington is that politicians may curtail their handouts. The more people who receive government aid, the less attention will likely be paid to government abuses.

Handouts tamper with elections as effectively as passing out hundred dollar bills at the polling booth. Unfortunately, using tax dollars to buy reelection is perfectly legal under federal campaign finance rules. And as long as government dependents are political assets, it is absurd to expect politicians to make reasonable or fair decisions on who gets what. Ironically, some of the politicians who want to effectively make work optional also want to make voting mandatory.

Politicians have a long history of pauperizing the public to perpetuate their power. Plutarch observed of the dying days of the Roman Republic, “The people were at that time extremely corrupted by the gifts of those who sought office, and most made a constant trade of selling their voices.” Montesquieu warned in 1748: “It is impossible to make great largesses to the people without great extortion: and to compass this, the state must be subverted. The greater the advantages citizens seem to derive from their liberty [of voting], the nearer they approach towards the critical moment of losing it.”

Politicians cannot undermine self-reliance without subverting self-government. The ultimate victim of handouts is democracy itself. The more important entitlement reform is to prohibit politicians from buying one person’s vote with another person’s paycheck.

via Zero Hedge http://ift.tt/1Qn2VJN Tyler Durden

Maybe because between the specter of defaulting in under three months, the threat of handing over its gold to Deutsche Bank, or the reality of rampant hyperinflation and a collapsing society, the already crushed population of Venezuela did not have enough things to worry about, moments ago Venezuela’s Nicolas Maduro unveiled a double whammy of “shock and awe” when the socialist president not only announced the latest devaluation of the country’s official currency, but also presented his countrymen with the first gasoline price increase since 1996.

These moves represent the latest attempt to stem a widening economic crisis, though critics of the socialist leader quickly dismissed the moves as insufficient.

On the devaluation side, the latest measure of desperation will lower the strongest official exchange rate by 37% to 10 bolivars per dollar from 6.3, and streamline the previous three-tiered system into a dual exchange rate mechanism. The weaker of the two rates will be a “free float” based on an existing system that currently sells dollars at around 200 bolivars, Maduro said.

As Reuters reports, critics immediately questioned the latter claim, noting that the government has repeatedly announced “free-floating” systems that withered away precisely because authorities never allowed them to be determined by demand.

Meanwhile, Venezuela’s true “free floating”, market-clearing currency, the black-market “dolar today” recently plunged to over 1,000 per dollar, and was at 1,045.90 as of today. It is this currency that Maduro has sought to eliminate by actually suing the website that reports what it is on a daily basis.

 

That was the largely irrelevant awe, especially since virtually nobody transacts at the official exchange rate which is over 100 times stronger than Venezuela’s true currency level.

As for the shock, it came in the form of 62-fold increase in the price of 95-octane gasoline to 6 bolivars/liter.

The price of premium gasoline will rise by 1,329 percent, but fuel is so heavily subsidized that fueling a small car will still cost about half the price of a soft drink, or about $0.23 based on the black market exchange rate. 91-octane gasoline will cost 1 bolivar per liter

Putting these prices in perspective for western readers should result in laughter: the new price for 95-octane is equivalent to $0.11/gallon using weakest official Simadi FX rate of about 203 VEF/USD, and 5 times less using the black market FX rate. The price previously was 0.097 bolivar/liter or about one-fifth of a U.S. cent per gallon.

And while the price is indeed laughable to western readers, price increases such as this one are all too tragic to the local population which is paid in local currency terms, and for whom this is merely the latest checkmark on the hyperinflationary wall.

Maduro’s attempt to make the price increase more palatable failed: “The time has come for a system that guarantees access to oil products but that covers the cost PDVSA pays to produce it,” Maduro says during a national TV broadcast. “Venezuela has the cheapest gasoline in the world. The cost is almost nothing,” Maduro said before announcing new price.

But if it’s almost nothing then why do it, aside from antagonizing your already miserable people?

The reason is that the measures are meant to help shore up the OPEC nation’s finances as plummeting oil prices and a collapsing state-led economic model have left the country with a severe recession, triple-digit inflation and chronic product shortages.

“This is a necessary measure, a necessary action to balance things, I take responsibility for it,” Maduro said, in reference to the fuel hike during a combative four-hour speech in which he insulted opposition leaders and occasionally used foul language.

The reforms risk fueling triple-digit inflation at a time when millions are struggling to make ends meet, and comes two months after the ruling Socialist Party suffered a blistering defeat in parliamentary elections due to anger over the crisis.

The package will likely be seen by Wall St. investors, who are increasingly concerned about a potential default, as mildly positive but still vastly insufficient to help Venezuela make some $10 billion in debt payments amid a major cash crunch.

“Bottom line is no change to cashflow for this year and hefty year end debt payments,” wrote Siobhan Morden of Nomura in an email.

“The devaluation from 6.3 to 10 will not have a relevant impact,” wrote economist and pollster Luis Vicente Leon on Twitter. “With respect to the gasoline, the only way to consolidate is to adjust (the price) regularly, otherwise it will be pulverized by inflation.”

Critics say the only solution to Venezuela’s economic problems is to entirely dismantle the 13-year-old currency system created during the government of late socialist leader Hugo Chavez.

Which will happen, but not before Maduro first sells all the country’s gold, and then proceeds to obliterate the domestic economy, formerly known as the “socialist paradise” of Latin America.

We hope Bernie Sanders is paying close attention.

via Zero Hedge http://ift.tt/1U9cims Tyler Durden

Late last month, we reported that ISIS has cut its fighters’ salaries in half due to “exceptional circumstances the caliphate is facing.”

Those “exceptional circumstances” include Russia’s unrelenting aerial campaign against the group’s illicit oil trafficking business in Syria. The US-led “coalition” likes to take credit for helping to cripple the oil trade, but in reality it was Vladimir Putin (and Zero Hedge) that put the issue in the spotlight in November.

After Putin’s comments at the G20 summit in Antalya and the subsequent aggressive push by the Russian air force to disable the group’s oil production and transport capabilities, the US was effectively forced to join the party. Asked why The Pentagon hadn’t hit ISIS oil trucks during the 14 months the US has supposedly been bombing the group, Washington responded by claiming that America didn’t want to risk collateral damage. In other words, Washington’s excuse for not targeting Islamic State’s $450 million/year oil trade is that the US was worried about a few truck drivers.

In any event, the group’s ability to fund its activities through the sale of stolen oil has been curtailed and it will be months (at least) before that money can be recouped through the capture of Libyan crude. That means less money for fighters and civil servants.

And it also means no more Gatorade.

And no more Snickers bars.

“The extremists who once bragged about minting their own currency are having a hard time meeting expenses, thanks to coalition airstrikes and other measures that have eroded millions from their finances since last fall,” AP reports. “Having built up loyalty among militants with good salaries and honeymoon and baby bonuses, the group has stopped providing even the smaller perks: free energy drinks and Snickers bars.”

Yes, no more damn Snickers. And when it comes to taxes and utility bills, it’s now “dollars only.” Here’s AP again:

Within the last two weeks, the extremist group started accepting only dollars for “tax” payments, water and electric bills, according to the Raqqa activist, who asked to be identified by his nom de guerre Abu Ahmad for his safety. “Everything is paid in dollars,” he said. His account was bolstered by another ex-Raqqa resident, who, like Ahmad, also relies on communications with a network of family and acquaintances still in the city.

That’s exceptionally ironic because it was just last August when ISIS released a propaganda video announcing the return on the gold dinar which the group said was set to replace a worthless “piece of paper called the Federal Reserve dollar note.” Back to AP:

“Circumstances include the dramatic drop in global prices for oil — once a key source of income — airstrikes that have targeted cash stores and oil infrastructure, supply line cuts, and crucially, the Iraqi government’s decision to stop paying civil servants in territory controlled by the extremists.

 

A former Raqqa resident now living in Beirut said Syrians abroad are sending remittances in dollars to cover skyrocketing prices for vegetables and sugar. The resident, whose wife and baby still live in the city, did not want his name used for their safety. One of the other ex-residents, now living in Gaziantep, Turkey, said the road to Mosul was cut off late last year, and prices have risen swiftly — gas is up 25 percent, meat up nearly 70 percent, and sugar prices have doubled.

 

In Iraq, where Islamic State has slowly been losing ground over the past year, the Iraqi government in September cut off salaries to government workers within territory controlled by the extremists, after months of wavering about the humanitarian costs paid by those trapped in the region. Iraqi officials estimate that Islamic State taxed the salaries at rates ranging from 20 to 50 percent, and analysts and the government now estimate a loss of $10 million minimum each month.

 

In the Iraqi city of Fallujah, fighters who once made $400 a month aren’t being paid at all and their food rations have been cut to two meals a day, according to a resident. The account of the resident, who spoke on condition of anonymity for fear of death at the hands of extremists, was supported by that of another family trapped in Fallujah that said inhabitants can only leave the city if they pay $1,000 — a sum well beyond the means of most in the Sunni-majority city that was the first in Iraq to fall to Islamic State in 2014.

IS is also allowing Fallujah residents to pay $500 for the release of a detainee, the family in Fallujah told the AP, saying that they believed the new policy was put in place to help the group raise money — a system akin to bail.

 

Mosul residents contacted by AP say IS has begun fining citizens who do not adhere to its strict dress code, rather than flogging them as before. The residents say they believe this is in response to financial problems in part because the group has already confiscated anything valuable, namely cars and other goods that are later resold in Syria.

As an aside, the Assad government still pays the salaries of civil servants in Raqqa. Those salaries are likely also taxed at high rates in order to line the pockets of top ISIS officials and, ironically, to continue the battle to destabilize Syria. 

In any event, one important thing to note here is that to the extent ISIS is running out of cash, it isn’t a consequence of one airstrike on a Mosul cash center as AP and other Western media would have you believe. We’re talking about an organization that brings in a billion dollars a year here, so destroying a few million in hard currency isn’t going to make a difference. 

This is a direct result of Russia’s move to decimate the oil trafficking business and that includes the PR effort to put Turkey’s role in the international spotlight. 

Going forward, the big question is this: to what extent will ISIS be able to plug the funding gaps by commandeering assets in Libya, where the group isn’t subject to Russian airstrikes and where government (to the extent there is a government) forces aren’t backed by a major state actor like Iran? 

Or perhaps the better question is this: how long before Libya becomes yet another theatre in World War III?

*  *  *

For those who might have missed it, here’s the actual ISIS document announcing the pay cuts:

Islamic State

Bayt Mal al-Muslimeen

Wilayat al-Raqqa

Decision no.: n/a

Month of Safr 1437 AH [c. November-December 2015]

In the name of God, the Compassionate, the Merciful

God Almighty has said: “Go forth, lightly or heavily armed. And wage jihad with your wealth and souls in the path of God. That is best for you if you know” (al-Tawba 41) [Qur’an 9:41]. And on the authority of Anas (may God be pleased with him): that the Prophet (SAWS) said: “Wage jihad against the mushrikeen with your wealth, souls & tongues”- Musnad Ahmad: Musnad Anas Malek (11798).

Jihad of wealth has been mentioned with jihad of soul in the Qur’an in ten cases, and in nine of those cases jihad of wealth has been presented beforehand over jihad of the soul, and only in one case has jihad of the soul been presented beforehand over jihad of wealth. And on the authority of Omar bin al-Khattab (may God be pleased with him): “The Messenger of God (SAWS) ordered us to give charity and that coincided with the time I had some wealth. So I said: ‘Today I will outdo Abu Bakr, if ever I have outdone him.’ So I came with half of my wealth, and so the Messenger of God (SAWS) said: ‘What have you left for your family?’ I said: ‘The same amount.’ And Abu Bakr came with all he had, so he said: ‘Oh Abu Bakr, what have you left for your family?’ He said: ‘I have left for them God and His Messenger.’ I said: ‘By God, I can never outdo him in anything.'” (muttafiq alayhi).

So on account of the exceptional circumstances the Islamic State is facing, it has been decided to reduce the salaries that are paid to all mujahideen by half, and it is not allowed for anyone to be exempted from this decision, whatever his position. Let it be known that work will continue to distribute provisions twice every month as usual.

And God is the guarantor of success.

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

Another month and another massive deflationary print for Chinese Producer Prices. Year-over-year, PPI dropped 5.3% ('better' than the 5.3% drop expected and the 5.9% plunge last month) making this the 47th month in a row of deflation with mining's collapse picking up again to -19.8% YoY. On th emore worrisome side, CPI rose 1.8% YoY, below expectations of +1.9% but still the hottest consumer price rise since August (and this was amid the greatest credit binge in history) driven by the biggest jump in food prices since 2013.

 

47th months and counting of PPI deflation… (all that stimulus is not helping)

 

But it is Consumer Prices that are more worrisome for the "gimme moar easing" brigade as the headline CPI hit 1.8% YoY – th emost since August, driven by a 4.1% surge in food costs – the most since Dec 2013…

 

And the blame for missing expectations – well they learned that from the Americans…

• *CHINA M/M CPI AFFECTED BY COLD WEATHER, CHINESE NEW YEAR

The month-on-month rise in CPI was affected by cold weather which lead to a rise in vegetable and fruit prices, as well as a pork price increase over the Lunar New Year holiday, the National Bureau of Statistics said in statement.

So to summarize, apart from New Years, Weather, and Pork prices, amid the biggest credit binge in recorded history (China January TSF rose half a trillion dollars), PPI continued to limp towards its deflationary hell and PPI missed expectations.. The trouble is of course that with protests already seen in the streets, social unrest will escalate dramatically if food prices start to soar even more.

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

Earlier today, a massive explosion shook the Turkish capital of Ankara, where a vehicle packed with explosives was detonated while military buses were passing by. 

It was “an act of terrorism,” Deputy Prime Minister Bekir Bozdag said. “We reaffirm our strong partnership with our NATO ally Turkey in combating the shared threat of terrorism attacks,” US State Department spokesperson Mark Toner proclaimed.

“The attack targeted a shuttle bus carrying military personnel, and there were several other military vehicles nearby – all of which were waiting at the traffic lights. Most of the casualties are believed to be soldiers,” BBC reports, adding that “the Turkish army strongly condemned the attack and called it ‘a treacherous terror act'”. 

Right. A “treacherous terror act” that’s sure to be trotted out as an excuse for an invasion of Syria where Kurdish forces are looking to close the Azaz corrider and cut off Sunni rebels from their supply lines to Turkey. 

Ankara explosion: Turkish soldiers targeted, PKK or ISIS main suspects. If PKK, Turkish retaliation in Kurdish controlled Syria may follow.

— Jonathan Rugman (@jrug) February 17, 2016

Or, as we put it moments after the blast: “Expect this to be pinned on either ISIS or the PKK. If it’s the latter, Ankara will once again claim that the group is working in concert with the YPG and that will be all the evidence Erdogan needs to march across the border.”

While we wait to see whether this will indeed serve as the excuse Erdogan needs to send troops into Syria, we bring you the following images from the site of the deadly attack which killed “at least” 28 people. 

Via Reuters

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

Submitted by Michael Snyder via The Economic Collapse blog,

After a series of stunning declines through the month of January and the first half of February, global financial markets seem to have found a patch of relative stability at least for the moment.  But that does not mean that the crisis is over.

On the contrary, all of the hard economic numbers that are coming in from around the world tell us that the global economy is coming apart at the seams.  This is especially true when you look at global trade numbers.  The amount of stuff that is being bought, sold and shipped around the planet is falling precipitously. 

So don’t be fooled if stocks go up one day or down the next.  The truth is that we are in the early chapters of a brand new economic meltdown, and I believe that all of the signs indicate that it will continue to get worse in the months ahead.  The following are 21 new numbers that show that the global economy is absolutely imploding…

#1 Chinese exports fell by 11.2 percent year over year in January.

#2 Chinese imports were even worse in January.  On a year over year basis, they declined a whopping 18.8 percent.

#3 It may be hard to believe, but Chinese imports have now plunged for 15 months in a row.

#4 In India, exports were down 13.6 percent on a year over year basis in January.

#5 In Japan, exports declined 8 percent in December on a year over year basis, while imports plummeted 18 percent.

#6 For the sixth time in six years, Japanese GDP growth has gone negative.

#7 In the United States, exports were down 7 percent on a year over year basis in December.

#8 U.S. factory orders have fallen for 14 months in a row.

#9 The Restaurant Performance Index in the United States has dropped to the lowest level that we have seen since 2008.

#10 This month the Baltic Dry Index fell below 300 for the first time ever.

#11 It is now cheaper to rent a 1,100 foot merchant vessel than it is to rent a Ferrari.

#12 Orders for Class 8 trucks in the United States dropped by 48 percent on a year over year basis in January.

#13 Due to a lack of demand for trucks, Daimler just laid off 1,250 U.S. workers.

#14 Even though Saudi Arabia and Russia have agreed to freeze oil production at current levels, the price of U.S. oil has still fallen below 30 dollars a barrel.

#15 It is being reported that 35 percent of all oil and gas companies around the world are at risk of falling into bankruptcy.

#16 According to CNN, 67 oil and gas companies in the United States filed for bankruptcy during 2015.

#17 The number of job cuts in the United States skyrocketed 218 percent during the month of January according to Challenger, Gray & Christmas.

#18 All over America, retail stores are shutting down at a stunning pace.  The following list of store closures comes from one of my previous articles…

-Wal-Mart is closing 269 stores, including 154 inside the United States.

-K-Mart is closing down more than two dozen stores over the next several months.

-J.C. Penney will be permanently shutting down 47 more stores after closing a total of 40 stores in 2015.

-Macy’s has decided that it needs to shutter 36 stores and lay off approximately 2,500 employees.

-The Gap is in the process of closing 175 stores in North America.

-Aeropostale is in the process of closing 84 stores all across America.

-Finish Line has announced that 150 stores will be shutting down over the next few years.

-Sears has shut down about 600 stores over the past year or so, but sales at the stores that remain open continue to fall precipitously.

#19 The price of gold is enjoying its best quarterly performance in 30 years.

#20 Global stocks have fallen into bear market territory, which means that about one-fifth of all global stock market wealth has already been wiped out.

#21 Unfortunately for global central banks, they have pretty much run out of ammunition.  Since March 2008, central banks have cut interest rates 637 times and they have purchased a staggering 12.3 trillion dollars worth of assets.  There is not much more that they can do, and now the next great crisis is upon us.

Without any outside influences, the global economy and the global financial system will continue to rapidly fall apart.

But if we do have a major “black swan event” take place, that could cause the bottom to fall out at any moment.

In particular, I am deeply concerned about the possibility that World War III could be sparked in the Middle East.  In an article that I published earlier today entitled “Turkey Is Asking The United States To Take Part In A Ground Invasion Of Syria“, I included a quote from Turkish Foreign Minister Mevlut Cavusoglu that reveals just how eager Turkey and Saudi Arabia are for war to begin…

“Some countries like us, Saudi Arabia and some other Western European countries have said that a ground operation is necessary,” Turkish Foreign Minister Mevlut Cavusoglu told Reuters in an interview.

 

However, this kind of action could not be left to regional powers alone. “To expect this only from Saudi Arabia, Turkey and Qatar is neither right nor realistic. If such an operation is to take place, it has to be carried out jointly, like the (coalition) air strikes,” he said.

The Turks and the Saudis very much want the United States to take a leading role in any ground invasion of Syria, but the Obama administration is not likely to do that.

So we shall see if the Turks and the Saudis are willing to go ahead without us.  Let us hope that they do not decide to invade Syria, because that could start the biggest war in the Middle East that any of us have ever seen.

Unfortunately, Turkey is already attacking.

Turkey has been shelling Kurdish and Syrian military positions in northern Syria for four days in a row even though the Obama administration has been urging them to stop.

The first month and a half of 2016 has already been quite chaotic, and the stage is set for global events to greatly accelerate during the months ahead.

Sadly, the mainstream media in the United States is largely ignoring the preparations for a ground invasion of Syria, and they keep telling us that the global economy is going to be just fine, so most ordinary Americans are going to be absolutely blindsided by what is about to happen.

via Zero Hedge http://ift.tt/1KXuM7f Tyler Durden

One week ago, we were delighted to report that Australia admitted that its glorious, 6 and 8-sigma outlier job numbers from October and November, were nothing but a “technical issue” glitch, in other words, one big political lie.

 

Specifically it was Treasury Secretary John Fraser, who admitted during testimony to parliamentary committee that jobs growth for the two months in question “may be overstated.”  What’s the reason? The same one the propaganda bureau always uses when its lies are exposed: “technical issues”, 

There were some “technical issues” in October and November that may have made the employment figures “look a little bit better than otherwise would be the case,” he said. The technical issues relate to “rolling off” of participants in the labor survey.

 

Australia’s economy added 55,000 jobs in October and a further 74,900 in November, before shedding 1,000 in December to produce the record quarterly gain. Questions regarding the accuracy of the data have been raised following acknowledgment by the statistics agency in 2014 of measurement challenges.

In conclusion we asked “why the sudden admission it was all a lie? Simple: weakness in commodity prices “is far greater than people had been expecting,” Fraser said in earlier remarks to the panel. Australia is now “swimming against the tide” because of uncertainties in the global economy, he added.”

What this really meant, as we translated, is that: “we need more easing, and to do that, the economy has to go from strong to crap.” And with the Australian economy suddenly desperate for lower rates from the RBA, one can ignore the propaganda lies, and focus once again on the far uglier truth.

That “far uglier truth” was revealed moments ago, when not only was the “jobs miracle” of October and November buried for good…

 

… but suddenly – as we predicted – the far uglier truth finally emerged, when Australia reported that not only did total jobs tumble by 7,900, far below the +13,000 forecast (down from the December’s 800 job decline)…

 

… but the actual number of full-time jobs plunged by 40,600, the biggest monthly plunge since October 2013!

 

The end result a sudden, and unexpected bounce in the unemployment rate from 5.80% to 6.00%, some 20 basis point above the consensus estimate.

And judging by the corresponding tumble in the AUDUSD, suddenly the realization that the RBA – no longer able to delay reality – will be the next bank to ease as the Chinese deflationary tsunami proves to strong for anyone to resist.

via Zero Hedge http://ift.tt/1XyO6K2 Tyler Durden

Following this morning's weak Starts and Permits data, even homebuilders are starting to lose faith in the recovery meme but there is a long way to go before that is priced in. Perhaps the follwoing two data points will help to wake up the rest of the investing public that all is not as well as hoped. For the 3rd week in a row mortgage applications for purchases slid (reflecting the 'now')…

 

and even more worrying, Architecture Billings tumbled into contraction (below 50) throwing doubt on the imminent future as the inquiry index plunged from 60.5 to 55.3.

 

Still, stocks are surging – led by homebuilders – so everything must be fine, right?

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

While we would be the first to admit that we disagree with Jeffrey Sachs on virtually every other issue, on the topic of Hillary Clinton, the ongoing Syria bloodbath which has come to define the geopolitical situation for the past 3 years, and how this is an event that would  “surely rival Watergate in shaking the foundations of the US establishment” if the truth were fully known, we agree 100 percent. 

Hillary Clinton and the Syrian Bloodbath, by Jeffrey Sachs, originally posted on HuffPo

In the Milwaukee debate, Hillary Clinton took pride in her role in a recent UN Security Council resolution on a Syrian ceasefire:

But I would add this. You know, the Security Council finally got around to adopting a resolution. At the core of that resolution is an agreement I negotiated in June of 2012 in Geneva, which set forth a cease-fire and moving toward a political resolution, trying to bring the parties at stake in Syria together.

This is the kind of compulsive misrepresentation that makes Clinton unfit to be President. Clinton’s role in Syria has been to help instigate and prolong the Syrian bloodbath, not to bring it to a close.

In 2012, Clinton was the obstacle, not the solution, to a ceasefire being negotiated by UN Special Envoy Kofi Annan. It was US intransigence – Clinton’s intransigence – that led to the failure of Annan’s peace efforts in the spring of 2012, a point well known among diplomats. Despite Clinton’s insinuation in the Milwaukee debate, there was (of course) no 2012 ceasefire, only escalating carnage. Clinton bears heavy responsibility for that carnage, which has by now displaced more than 10 million Syrians and left more than 250,000 dead.

As every knowledgeable observer understands, the Syrian War is not mostly about Bashar al-Assad, or even about Syria itself. It is mostly a proxy war, about Iran. And the bloodbath is doubly tragic and misguided for that reason.

Saudi Arabia and Turkey, the leading Sunni powers in the Middle East, view Iran, the leading Shia power, as a regional rival for power and influence. Right-wing Israelis view Iran as an implacable foe that controls Hezbollah, a Shi’a militant group operating in Lebanon, a border state of Israel. Thus, Saudi Arabia, Turkey, and Israel have all clamored to remove Iran’s influence in Syria.

This idea is incredibly naïve. Iran has been around as a regional power for a long time–in fact, for about 2,700 years. And Shia Islam is not going away. There is no way, and no reason, to “defeat” Iran. The regional powers need to forge a geopolitical equilibrium that recognizes the mutual and balancing roles of the Gulf Arabs, Turkey, and Iran. And Israeli right-wingers are naïve, and deeply ignorant of history, to regard Iran as their implacable foe, especially when that mistaken view pushes Israel to side with Sunni jihadists.

Yet Clinton did not pursue that route. Instead she joined Saudi Arabia, Turkey, and right-wing Israelis to try to isolate, even defeat, Iran. In 2010, she supported secret negotiations between Israel and Syria to attempt to wrest Syria from Iran’s influence. Those talks failed. Then the CIA and Clinton pressed successfully for Plan B: to overthrow Assad.

When the unrest of the Arab Spring broke out in early 2011, the CIA and the anti-Iran front of Israel, Saudi Arabia, and Turkey saw an opportunity to topple Assad quickly and thereby to gain a geopolitical victory. Clinton became the leading proponent of the CIA-led effort at Syrian regime change.

In early 2011, Turkey and Saudi Arabia leveraged local protests against Assad to try to foment conditions for his ouster. By the spring of 2011, the CIA and the US allies were organizing an armed insurrection against the regime. On August 18, 2011, the US Government made public its position: “Assad must go.”

Since then and until the recent fragile UN Security Council accord, the US has refused to agree to any ceasefire unless Assad is first deposed. The US policy–under Clinton and until recently–has been: regime change first, ceasefire after. After all, it’s only Syrians who are dying. Annan’s peace efforts were sunk by the United States’ unbending insistence that U.S.-led regime change must precede or at least accompany a ceasefire. As the Nation editors put it in August 2012:

The US demand that Assad be removed and sanctions be imposed before negotiations could seriously begin, along with the refusal to include Iran in the process, doomed [Annan’s] mission.

Clinton has been much more than a bit player in the Syrian crisis. Her diplomat Ambassador Christopher Stevens in Benghazi was killed as he was running a CIA operation to ship Libyan heavy weapons to Syria. Clinton herself took the lead role in organizing the so-called “Friends of Syria” to back the CIA-led insurgency.

The U.S. policy was a massive, horrific failure. Assad did not go, and was not defeated. Russia came to his support. Iran came to his support. The mercenaries sent in to overthrow him were themselves radical jihadists with their own agendas. The chaos opened the way for the Islamic State, building on disaffected Iraqi Army leaders (deposed by the US in 2003), on captured U.S. weaponry, and on the considerable backing by Saudi funds. If the truth were fully known, the multiple scandals involved would surely rival Watergate in shaking the foundations of the US establishment.

The hubris of the United States in this approach seems to know no bounds. The tactic of CIA-led regime change is so deeply enmeshed as a “normal” instrument of U.S. foreign policy that it is hardly noticed by the U.S. public or media. Overthrowing another government is against the U.N. charter and international law. But what are such niceties among friends?

This instrument of U.S. foreign policy has not only been in stark violation of international law but has also been a massive and repeated failure. Rather than a single, quick, and decisive coup d’état resolving a US foreign policy problem, each CIA-led regime change has been, almost inevitably, a prelude to a bloodbath. How could it be otherwise? Other societies don’t like their countries to be manipulated by U.S. covert operations.

Removing a leader, even if done “successfully,” doesn’t solve any underlying geopolitical problems, much less ecological, social, or economic ones. A coup d’etat invites a civil war, the kind that now wracks Afghanistan, Iraq, Libya, and Syria. It invites a hostile international response, such as Russia’s backing of its Syrian ally in the face of the CIA-led operations. The record of misery caused by covert CIA operations literally fills volumes at this point. What surprise, then, the Clinton acknowledges Henry Kissinger as a mentor and guide?

And where is the establishment media in this debacle? The New York Times finally covered a bit of this story last month in describing the CIA-Saudi connection, in which Saudi funds are used to pay for CIA operations in order to make an end-run around Congress and the American people. The story ran once and was dropped. Yet the Saudi funding of CIA operations is the same basic tactic used by Ronald Reagan and Oliver North in the Iran-Contra scandal of the 1980s (with Iranian arms sales used to fund CIA-led covert operations in Central America without consent or oversight by the American people).

Clinton herself has never shown the least reservation or scruples in deploying this instrument of U.S. foreign policy. Her record of avid support for US-led regime change includes (but is not limited to) the US bombing of Belgrade in 1999, the invasion of Afghanistan in 2001, the Iraq War in 2003, the Honduran coup in 2009, the killing of Libya’s Muammar Qaddafi in 2011, and the CIA-coordinated insurrection against Assad from 2011 until today.

It takes great presidential leadership to resist CIA misadventures. Presidents get along by going along with arms contractors, generals, and CIA operatives. They thereby also protect themselves from political attack by hardline right-wingers. They succeed by exulting in U.S. military might, not restraining it. Many historians believe that JFK was assassinated as a result of his peace overtures to the Soviet Union, overture he made against the objections of hardline rightwing opposition in the CIA and other parts of the U.S. government.

Hillary Clinton has never shown an iota of bravery, or even of comprehension, in facing down the CIA. She has been the CIA’s relentless supporter, and has exulted in showing her toughness by supporting every one of its misguided operations. The failures, of course, are relentlessly hidden from view. Clinton is a danger to global peace. She has much to answer for regarding the disaster in Syria.

via Zero Hedge http://ift.tt/1mIzJ8t Tyler Durden