“Washington Intends Russia’s Demise” Warns Paul Craig Roberts

Submitted by Paul Craig Roberts,

Washington has no intention of allowing the crisis in Ukraine to be resolved. Having failed to seize the country and evict Russia from its Black Sea naval base, Washington sees new opportunities in the crisis.

One is to restart the Cold War by forcing the Russian government to occupy the Russian-speaking areas of present day Ukraine where protesters are objecting to the stooge anti-Russian government installed in Kiev by the American coup. These areas of Ukraine are former constituent parts of Russia herself. They were attached to Ukraine by Soviet leaders in the 20th century when both Ukraine and Russia were part of the same country, the USSR.

Essentially, the protesters have established independent governments in the cities. The police and military units sent to suppress the protesters, called “terrorists” in the American fashion, for the most part have until now defected to the protesters.

With Obama’s incompetent White House and State Department having botched Washington’s takeover of Ukraine, Washington has been at work shifting the blame to Russia. According to Washington and its presstitute media, the protests are orchestrated by the Russian government and have no sincere basis. If Russia sends in military units to protect the Russian citizens in the former Russian territories, the act will be used by Washington to confirm Washington’s propaganda of a Russian invasion (as in the case of Georgia), and Russia will be further demonized.

The Russian government is in a predicament. Moscow does not want financial responsibility for these territories but cannot stand aside and permit Russians to be put down by force. The Russian government has attempted to keep Ukraine intact, relying on the forthcoming elections in Ukraine to bring to office more realistic leaders than the stooges installed by Washington.

However, Washington does not want an election that might replace its stooges and return to cooperating with Russia to resolve the situation. There is a good chance that Washington will tell its stooges in Kiev to declare that the crisis brought to Ukraine by Russia prevents an election. Washington’s NATO puppet states would back up this claim.

It is almost certain that despite the Russian government’s hopes, the Russian government is faced with the continuation of both the crisis and Washington puppet government in Ukraine.

On May 1 Washington’s former ambassador to Russia, now NATO’s “second-in-command” but the person who, being American, calls the shots, has declared Russia to no longer be a partner but an enemy. The American, Alexander Vershbow, told journalists that NATO has given up on “drawing Moscow closer” and soon will deploy a large number of combat forces in Eastern Europe. Vershbow called this aggressive policy deployment of “defensive assets to the region.”

In other words, here we have again the lie that the Russian government is going to forget all about its difficulties in Ukraine and launch attacks on Poland, the Baltic States, Romania., Moldova, and on the central Asian states of Georgia, Armenia, and Azerbaijan. The dissembler Vershbow wants to modernize the militaries of these American puppet states and “seize the opportunity to create the reality on the ground by accepting membership of aspirant countries into NATO.”

What Vershbow has told the Russian government is that you just keep on relying on Western good will and reasonableness while we set up sufficient military forces to prevent Russia from coming to the aid of its oppressed citizens in Ukraine. Our demonization of Russia is working. It has made you hesitant to act during the short period when you could preempt us and seize your former territories. By waiting you give us time to mass forces on your borders from the Baltic Sea to Central Asia. That will distract you and keep you from the Ukraine. The oppression we will inflict on your Russians in Ukraine will discredit you, and the NGOs we finance in the Russian Federation will appeal to nationalist sentiments and overthrow your government for failing to come to the aid of Russians and failing to protect Russia’s strategic interests.

Washington is licking its chops, seeing an opportunity to gain Russia as a puppet state.

Will Putin sit there with his hopes awaiting the West’s good will to work out a solution while Washington attempts to engineer his fall?

The time is approaching when Russia will either have to act to terminate the crisis or accept an ongoing crisis and distraction in its backyard. Kiev has launched military airstrikes on protesters in Slavyansk. On May 2 Russian government spokesman Dmitry Peskov said that Kiev’s resort to violence had destroyed the hope for the Geneva agreement on de-escalating the crisis. Yet, the Russian government spokesman again expressed the hope of the Russian government that European governments and Washington will put a stop to the military strikes and pressure the Kiev government to accommodate the protesters in a way that keeps Ukraine together and restores friendly relations with Russia.

This is a false hope. It assumes that the Wolfowitz doctrine is just words, but it is not. The Wolfowitz doctrine is the basis of US policy toward Russia (and China). The doctrine regards any power sufficiently strong to remain independent of Washington’s influence to be “hostile.” The doctrine states:

“Our first objective is to prevent the re-emergence of a new rival, either on the territory of the former Soviet Union or elsewhere, that poses a threat on the order of that posed formerly by the Soviet Union. This is a dominant consideration underlying the new regional defense strategy and requires that we endeavor to prevent any hostile power from dominating a region whose resources would, under consolidated control, be sufficient to generate global power.”

The Wolfowitz doctrine justifies Washington’s dominance of all regions. It is consistent with the neoconservative ideology of the US as the “indispensable” and “exceptional” country entitled to world hegemony.

Russia and China are in the way of US world hegemony. Unless the Wolfowitz doctrine is abandoned, nuclear war is the likely outcome.




via Zero Hedge http://ift.tt/1q8j52r Tyler Durden

The Complete Ira Sohn Conference Post-Mortem

From 110 slides of Ackman-inspired Fannie Mae bullishness to Tudor-Jones "Central Bank Viagra", and from Jim Grant's "Buy Gazprom because it's the worst-managed company in the world" to Jeff Gundlach's housing recovery bearishness and "never seeing 1.5 million home starts ever again"… there was a little here for every bull, dick, and harry at the Ira Sohn conference. Perhaps noted behavioral psychologist said its best though: "be careful about the quality of advice you get."

 

*NOVOGRATZ: EXPECTS MAJOR RALLY IN BRAZILIAN ASSETS

  • *NOVOGRATZ SAYS BRAZIL IS SO BAD ELECTIONS WILL SEE CHANGE
  • *NOVOGRATZ SAYS ROUSSEFF WILL PROBABLY LOSE ELECTION
  • *NOVOGRATZ SAYS BRAZIL WILL HAVE TEMPORARY SPIKE IN INFLATION
  • *NOVOGRATZ SAYS HEDGE FUNDS WILL HAVE TOUGH YEAR
  • *NOVOGRATZ SAYS LOTS OF SMART MONEY, HUMAN CAPITAL ON BITCOIN
  • *NOVOGRATZ PREDICTS DEMOCRATIZATION OF FINANCE; INC. BITCOIN
  • *NOVOGRATZ SAYS BANKS WILL LOOK MORE LIKE UTILITIES
  • *NOVOGRATZ SAYS BANKS WILL BE IN LESS SEXY BUSINESSES

 

*SHUMWAY SAYS MOODY’S COULD RISE TO $80-$113/SHR AT IRA SOHN

  • *SHUMWAY CAPITAL’S SHUMWAY: UKRAINE IS BIGGEST RISK IN THE WORLD
  • *SHUMWAY: CHINA IS AN AREA OF CONCERN
  • *SHUMWAY SAYS SHORT OFFSHORE CHINA RMB SPOT AT SOHN
  • *SHUMWAY: MOODY’S IS A GREAT BUSINESS: IRA SOHN CONF

*GUNDLACH RECOMMENDS SHORTING XHB HOMEBUILDER ETF AT IRA SOHN

  • *DOUBLELINE’S GUNDLACH SAYS SINGLE FAMILIY HOUSING OVERRATED
  • *GUNDLACH SAYS HOME PURCHASES BUOYED BY CASH TRANSACTIONS
  • *GUNDLACH: SAYS IF FANNIE, FREDDIE WIND DOWN MORTGAGE RATES RISE
  • *DOUBLELINE’S GUNDLACH SAYS OWNERSHIP RATES WILL GO TO NEW LOWS: IRA SOHN
  • Gundlach: 'For the rest of my career we will never see a year of 1.5 million housing starts again.'

Dan Ariely: "We should be careful about the quality of advice we get when we have trouble evaluating it"

 

*LAFFONT SAYS LIBERTY GLOBAL COULD EASILY GO ABOVE $100/SHR

  • *COATUE’S LAFFONT SAYS GO LONG LIBERTY GLOBAL AT IRA SOHN CONF
  • *LAFFONT SAYS VALUE OF LIBERTY GLOBAL NOL IS $8B AT IRA SOHN
  • *LAFFONT SAYS VODAFONE MAY BUY LIBERTY GLOBAL
  • *LAFFONT SAYS AT&T COULD OWN A MERGED VODAFONE AND LIBERTY

*GLENVIEW'S ROBBINS SAYS HUMANA PROFITS LIKELY TO ACCELERATE

  • *GLENVIEW’S ROBBINS TO DISCUSS HUMANA, WELLPOINT, MONSANTO
  • *ROBBINS: HUMANA LIKELY TO PARTNER WITH A PBM
  • *ROBBINS: SUGGESTS MONSANTO BE LEVERED MORE LIKE PRAXAIR
  • *ROBBINS: SAYS GMOS ARE ‘HERE TO STAY’
  • *GLENVIEW'S ROBBINS SAYS FOOD AVAILABILITY REQUIRES GMOS
  • *GLENVIEW'S ROBBINS SAYS GMOS UNLOCK THE KEY TO FOOD SUPPLY
  • *GLENVIEW’S ROBBINS RECENTLY PURCHASED ENDO INTL: BLOOMBERG INTV
  • *GLENVIEW’S ROBBINS LIKE HERTZ, OWNS IT: BLOOOMBERG INTERVIEW

*POINTSTATE’S SHREIBER SAYS NET SHORT CRUDE OIL AT IRA SOHN

  • *SCHREIBER: SEES OIL GOING MUCH LOWER AT IRA SOHN
  • *SCHREIBER: SAYS GO LONG ADVANTANGED U.S. REFINERS AT IRA SOHN
  • *SCHREIBER:OVERSUPPLY OF NORTH AMERICAN CRUDE HAS YET TO BE FELT

*GRANT’S INTEREST RATE OBSERVERS’S GRANT SAYS GO LONG GAZPROM AT IRA SOHN CONFERENCE

  • Grant says "Tesla is Herbalife without Carl Icahn"
  • Grant says "Gazprom is polar opposite of Tesla"
  • Grant says "Gazprom is worst-managed company on the planet"
  • *GRANT: GAZPROM COULD CONTEMPLATE RAISING DIVIDEND: AT IRA SOHN
  • *GRANT: GAZPROM’S ‘MANY IMPERFECTIONS’ SEEM TO BE PRICED IN

*ACKMAN: FANNIE, FREDDIE WORTH $23-$47/SHR OVER TIME

  •  Bill Ackman began with 110 Slides on FNMA
  • *ACKMAN DISCUSSING FANNIE MAE AT IRA SOHN CONF
  • Ackman: Fannie & Freddie "are more important today in the mortgage market than they've ever been"
  • *ACKMAN: BANKS NOT LIKELY TO STEP IN TO PROVIDE MORTGAGES
  • Ackman: "Owning royalty on every mortgage" is a great business
  • *ACKMAN: FANNIE, FREDDIE SHOULD BE MASSIVELY OVERCAPITALIZED
  • *ACKMAN: FANNIE, FREDDIE SHOULD CLOSE FIXED INCOME ARBITRAGE BIZ
  • *ACKMAN: FANNIE-FREDDIE SHOULD GO BACK TO GUARANTEEING MORTGAGES
  • *ACKMAN: ‘IT’S TIME TO GET OFF OUR FANNIE’’ AT IRA SOHN

*JONES: WAIT UNTIL YOU SEE WHITES OF EYES BEFORE SELLING BONDS

  •  Paul Tudor Jones: "Macro trading is about as difficult as I've ever seen it in my career,"
  • Paul Tudor Jones: "Central bank interest policy about as boring as a Jo Biden speech"
  • *TUDOR’S JONES:NEEDS MACRO DR. TO PRESCRIBE CENTRAL BANK VIAGRA
  • Jones: "If you actually knew when the fed was going to hike, what would you do?
  • Jones: "We've probably got people in this audience that were not born when the BOJ last hiked rates"
  • *JONES: FRIDAY WAS ONE OF GREATEST MACRO DAYS I CAN REMEMBER – super strong econ data, yet bonds closed up
  • Jones: "Fixed income is broadly in balance for the first 7 months of this year…" until taper

*IRA SOHN CONF CONTEST WINNER SEES FIAT HITTING EU16.50

 

Daruma's Mariko Gordon Like 3 LT "Longs: EFII, FUL, & PCRX

  • Mariko Gordon says its easier to find a unicorn than an investment edge
  • Gordon: "we've developed a really bad case of short-term-itis "
  • Gordon: "at some point the average holding period for a stock was 22 seconds."
  • Gordon: Even stock pickers have become very short term due to fear of putting foot wrong
  • *DARUMA’S GORDON LIKES ELECTRONICS FOR IMAGING AT IRA SOHN
  • *DARUMA’S GORDON HAS $60 PT ON ELECTRONICS FOR IMAGING (Dream big target $75)
  • *DARUMA’S GORDON LIKES HB FULLER
  • *DARUMA’S GORDON: HB FULLER PT IS $70, DREAM PRICE IS $90
  • *DARUMA’S GORDON LIKES PACIRA PHARMA AT IRA SOHN CONF PCRX (Target $150)

David Einhorn: "a narrow group of cool kid stocks have formed a bubble," -Short Athena Health

  • *GREENLIGHT’S EINHORN SAYS HE IS SHORT ATHENAHEALTH
  • Einhorn: AthenaHealth "caught in a bubble"
  • *EINHORN SAYS ATHENAHEALTH AT WRONG PRICE, COULD FALL 80%
  • *ATHENAHEALTH DROPS 5.5% POST-MKT
  • Einhorn: "Depending which stock you're talking about, all of them seem reasonable in relation to each other"
  • Einhorn on the bubble mentality: "As stocks rise…shares disconnect from conventional wisdom"
  • Einhorn: No conventional model can come close to justifying the cost of bubble stocks like ATHN
  • Einhorn: I do not believe "investors can value disconnected stocks using traditional measures"
  • *EINHORN: TALKING POSITIVE ABOUT EPIC SYSTEMS VS ATHENA HEALTH
  • *EINHORN: SAYS ATHENAHEALTH HAS $50/SHR VALUE AT IRA SOHN CONF
  • *EINHORN: ATHN HAS ‘SERIOUS RISKS’ TO ITS BUSINESS MODEL
  • *EINHORN: SAYS ATHENAHEALTH COULD FALL TO $14/SHR AT IRA SOHN

 




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

The Cruelest Month: April Was A Bloodbath For Most Hedge Funds

April was supposed to be, if only based on history, the strongest month for stocks. Instead, it ended up being a hedge fund bloodbath. Of the 40 or so brand name hedge funds we track, only 3 outperformed the S&P, and 33, or over 75%, generated a negative return. Which is to be expected in a month in which the highest beta stock blew up, and an entire industry which now clearly uses alpha and beta interchangeably (as long as it means following the leader right into the comfortable confines of the hedge fund hotel), is stuck with the bill.

 

Ironically, when we previewed the April performance we said that “while one should prepare to hear a litany of how April is historically the best month for stocks ahead of the just as infamous “Sell in May and go away” which has not been the case for the past 4 years, the reality is that this historic patterns such as this, or any others, have zero bearing on the current experiment in “confidence boosting” central planning. In other words, the only thing that continues to “matter” for risk, is what the Chairwoman may have had for dinner.” The vast majority of hedge funds just found out the hard way what this means.

Here are the best and worst performers for the month:

 

And the full breakdown courtesy of HSBC’s hedge fund performance tracker:




via Zero Hedge http://ift.tt/1iW4j56 Tyler Durden

THeRe Is No SuCH THiNG As Too BiG To JaiL…

 

 

“There is no such thing as ‘too big to jail’…No individual or company, no matter how large or how profitable, is above the law.”

–Eric Holder (May 2014)

 


.

 

 

.
.

 

Holder is Too Big To Jail

As DOJ Head – He’s a Fail

Watch Lanny Breuer

Emerge from his sewer

The air was undoubtedly stale

The Limerick King




via Zero Hedge http://ift.tt/1kQhngT williambanzai7

US F-15 Intercepts Russian Strategic Bomber Near Guam

It appears Russian military activities are picking up around the world. As AP reports, the commander of U.S. air forces in the Pacific is reporting a significant increase in activities by Russian planes and ships in the region; adding that “there had been long-range Russian air patrols to the coast of California … and a U.S. F-15 fighter jet intercepted a Russian strategic bomber that had flown to Guam.”

 

As AP reports,

The commander of U.S. air forces in the Pacific is reporting a significant increase in activities by Russian planes and ships in the region.

 

Gen. Herbert Carlisle linked that to the situation in the Ukraine. He said Russia was demonstrating its capabilities and gathering intelligence on U.S. military exercises.

 

Carlisle said there had been long-range Russian air patrols to the coast of California and a circumnavigation of the U.S. Pacific territory of Guam. He said a U.S. F-15 fighter jet intercepted a Russian strategic bomber that had flown to Guam.

 

He also reported a sharp increase in Russian air patrols around Japanese islands and Korea.

 

Carlisle said there was a lot more Russian ship activity too.

 

He was speaking Monday at the Center for Strategic and International Studies think tank.




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

Martin Armstrong Exposes The Saddest Side Of The Ukrainian Revolution

Ukrainian soldiers have nothing. People had been donating money to support them. While the West's injection of career politicians only replaced the head – Yanukovich – what is going on now is the corruption the people were revolting against is still in  the first place. Money donated to the soldiers has not been getting to them. Now the Ukrainian people are simply bringing food to their own troops because the corruption takes the money. Ukraine's soldiers have taken to Facebook to ask for help…

Via Martin Armstrong,

Ukrainians abroad do not want to transfer any money more to help UA army, because there is too much corruption. Now they try to create some organized system, which would allow to send concrete things to Ukraine, the soldiers need food, not money to some strange accounts.

 

 

TRANSLATED:

Maximum repost!!

Friends! Many times across the posts to ask for help. We are not living in Ukraine, helping money. But that's me personally send money somehow not very interesting. Namahalova much everywhere and betrayal! I propose to consider the system as much as possible to help things, and not money. For example, such a hundred sleeping bags needed, intercoms, knee pads, etc. Laid entire list (wish list), and you need to make reference to Ukrainian online shops where everything is available at exactly the model of goods which particularly need . Shipping address must be the same in Ukraine.

 

That is to say, you chaps, decide what quality size color, etc you need, give specific references to the right things, and we'll book these things online! Thus it is possible to some extent ot protect yourself from fraud. Address of the recipient must also be specified. And upon receipt of goods, it is desirable to make hundreds of pictures. Perhaps with online shopping, you can arrange to open a savings account they are for the recipient, something like a wish list, and so that people can go to the site and buy from a list of what they currently afford. MUCH nicer people to help really something that you can touch and not corny send money.

 

If you have any ideas on this subject, write, together we are strong, together we can all think properly and really help our guys! Some people can afford to buy only a couple of packs of milk, and someone will azkazat much more. But the sea is composed of drops!

The IMF has done nothing but washes their hands in the blood of Ukrainian Patriots. These people are fighting against corruption… They have no one to turn to because of the usurpation of the government in the political chess game between the USA and Russia.




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

Stocks Avoid Sinko De Mayo With Ye Olde JPY Dump-And-Pump

Thanks to the miracle of VIX slamming, USDJPY-stop-running, CBOE breaking, US equity market opening, “we’re not worried about no stinking Ukraine civil war or Chinese economic collapse”, low volume levitation, stocks knee-jerked off early dumping lows to recover comfortably into the green today. Not everything was exuberant though (as Trannies and the Russell 2000 ended red – bouncing once again off its 200DMA). Gold gained almost 1% today (back over $1310) for its best 2-days since January. The USD closed unch (with notable weakness in SEK). USDJPY ranged down below 102 and rammed stops to lead the charge higher in stocks (even with Japan closed for 2 days). Stocks tracked JPY but benefitted from a dead-cat-bounce in Treasury yields. VIX closed higher on the day (unable to regain the late-slam from Friday). AAPL regains $600 and Biotechs bounced 4.5% – so everything’s fixed.

 

Dump-and-Pump… but didn’t save Trannies or Russell 2000

 

Seems like some TWTR holders wanted out… but the 4.5% bounce in Biotechs is a little hard to swallow…

 

Treasuries and stocks hugged it out all day…

 

As 102.00 USDJPy was all that mattered for momo ignition…

 

HY Credit didn’t play along after Europe closed…

 

VIX’s late day slam on Friday provided the over zealous dump at the open but didn’t wholeheartedly support stocks into the close…

 

The only thing that mattered today for commodities was the US open and EU Close…

 

Chart: Bloomberg




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The Eight Characteristics Of A Stock Market Mania

From GMO’s Edward Chancellor

The Typical Characteristics of a Stock Market Mania

1. This-time-is-different mentality. Throughout history, successive market manias have been rationalized with the argument that history is no longer a reliable guide to the future. Both the “new era” of the 1920s and “new paradigm” of the 1990s were marked by a “this-time-is-different” mentality. The same mode of thinking is evident again today. U.S. profit margins are currently at peak levels and the profit share of GDP in the United States is more than two standard deviations above its long-term mean (based on data going back to the 1920s). The U.S. profits dataset is the most reliably mean-reverting financial series available, claims Andrew Smithers of Smithers & Co. Most commentary, however, assumes that U.S. profits have reached, in Irving Fisher’s immortal phrase, a “permanently high plateau.” As John Hussman of Hussman Funds comments, “Believing that historical tendencies have evolved into a new paradigm will likely have the same results as playing leapfrog with a unicorn.” Painful.

2. Moral hazard. Speculative bubbles tend to form when market participants believe that financial risk has been underwritten by the authorities. The “Greenspan Put” appeared in the late 1990s after it became clear that the Fed was prepared to support falling markets but wasn’t going to act against the bubble in  technology stocks. Fed policy hasn’t significantly changed since then. Monetary policy in the aftermath of the financial crisis has aimed to put a floor under asset prices, encouraging investors to take on more risk. As a consequence, U.S. household wealth – comprising largely of home equity and stocks – has rebounded to a near-record level of 472% of GDP, nearly 100% above its long-term mean. Whenever a cloud appears over Wall Street, market participants have come to expect more quantitative easing and guarantees of perpetually low interest rates. The personnel may change at the Fed, but the Greenspan Put remains in place.

3. Easy money. Great speculative bubbles have generally been accompanied by periods of low interest rates. Greenspan’s easy money policies in the last decade inflated the U.S. housing bubble, along with numerous other bubbles around the world. Bernanke’s cure for the economy in the wake of the financial crisis has been more of the same. For more than five years, U.S. real interest rates have been maintained at negative levels. An avowed aim of the Fed’s quantitative easing has been to push down long-term interest rates in order to boost both the stock market and home prices. In particular, lowering the long-term discount rate has boosted the valuation of growth stocks.

4. Overblown growth stories. Another common feature of a bubble is the overblown growth story. We witnessed this during the Dotcom bubble, ad nauseam. In the late 1990s we were told that tech stocks were experiencing “S-curve” growth (which posits very rapid growth in the near term); investors were also encouraged to value the “real options” of Internet stocks from future income streams yet to be conceived. Many of today’s high profile growth stocks – operating in fields such as social networking, electric cars, biotechnology, and, of course, the Internet – have been boosted by similar wishful thinking. Just as there were serial railway bubbles over the course of the 19th century, Internet stocks in the age of Dotcom 2.0 appear to be experiencing what my colleague James Montier has termed a “bubble echo.”

5. No valuation anchor. The most speculative markets – from the 17th century Dutch tulip mania onwards – have been marked by the absence of any valuation anchor; when there’s no income to tether the speculator’s imagination, asset prices can become unbounded. Our electronic age has even come up with a digital version of the Semper Augustus tulip. The fact that Bitcoin – the best known among the dozens of competing crypto-currencies – soared by 5,500% during the course of 2013 is testimony to the strength of the recent speculative tempo.

Needless to say, most of the recent stock market darlings – Netflix, Facebook, Tesla, and Twitter – have little or nothing in the way of profits. Internet retailer Amazon.com, whose margins have deteriorated in recent years yet whose stock soared nearly 60% in 2013, is the poster child for a market that is more obsessed with growth than profitability.

6. Conspicuous consumption. Asset price bubbles are associated with quick fortunes, rising inequality, and luxury spending booms. Since the spring of 2009, not only has the Fed engineered a strong rebound in the level of household wealth, but the richest part of the population has enjoyed the greatest share of the gains. Luxury spending has surged globally since the crisis.

The art market provides an excellent barometer of the speculative mood, given art prices depend entirely upon what other people are prepared to pay. A bubble in modern and contemporary art, which was evident before the financial crisis, has returned. Last November, a sculpture by Jeff Koons – Balloon Dog (Orange) – fetched $58 million at auction, a record sum for a work by a living artist. The contemporary collector apparently isn’t fazed by the fact that this dog was one of five “unique” versions or that Koons himself didn’t produce the work by his own hand but had it made in a factory. The same month, a painting by Francis Bacon sold for $142 million, the highest price ever paid for any work at auction.

7. Ponzi finance. Manic markets are often marked by a decline in credit standards. In the last decade, subprime debt inflated the U.S. real estate bubble. The financial crisis may have had many unpleasant after-effects, but it hasn’t diminished the appetite for low quality U.S. credit. In fact, we have recently witnessed the lowest yields for junk bonds in history. The quality of debt issuance has been deteriorating. Last year, nearly two out of three corporate bond issues carried a junk rating. Last year, total issuance of high yield and leveraged loans exceeded $1 trillion. More than half of the 2013 vintage leveraged loans came without the traditional covenants to protect investors. The decline in the quality of credit has attracted the attention of Jeremy Stein, one of the more market-savvy Fed governors. Stein’s boss, Janet Yellen, has also expressed concern about the manic leveraged loan market.

8. Irrational exuberance. Valuation is the truest measure of speculative mood. There are other ways to take the market’s pulse, however. Most conventional measures of market sentiment have become very elevated over the past year. The IPO market in 2013 and into the first quarter of 2014 has become particularly speculative. New IPOs in 2013 rose on average by 20% on their first day’s trading (Twitter rose 74% on the day it came to the market last November). Nearly three-quarters of the IPOs, which were launched in the six months to March, produced no profits. A good portion of these profitless IPOs, in particular those of the biotech variety, hadn’t even got around to generating anything by way of revenue. They are story stocks, pure and simple.

Other sentiment measures have been telling the same story. The trading activity of corporate insiders is a reasonably good indicator of managements’ view on the intrinsic value of their companies. Recently, the ratio of insider sales to purchases has climbed to near record levels. Equity mutual fund flows – another commonly cited sentiment indicator – have also picked up lately, while household cash balances (as a share of total assets) have declined. Margin debt as a share of GDP is close to its peak level. Market volatility has been trending downwards, while the daily correlation of stocks – another useful gauge of the market’s fear level – has also come down.

* * *

And yes: we have all of the above right now, most of which in record amounts. So… buy, buy, buy.




via Zero Hedge http://ift.tt/1mvY14A Tyler Durden

Are They Lying, Or Just Stupid?

Submitted by James H. Kunstler via Kunstler.com,

It’s not always easy to define what exactly is wrong with America, but what ever it is, it’s huge.

— Roel Ilargi Meijer, The Automatic Earth.com

 

Nobody knows, from sea to shining sea, why we’re having all this trouble with our Republic.

— Tom McGuane, Ninety-Two in the Shade

Despite its Valley Girl origins, the simple term clueless turns out to be the most accurate descriptor for America’s degenerate zeitgeist. Nobody gets it — the “it” being a rather hefty bundle of issues ranging from our energy bind to the official mismanagement of money, the manipulation of markets, the crimes in banking, the blundering foreign misadventures, the revolving door corruption in governance, the abandonment of the rule-of-law, the ominous wind-down of the Happy Motoring fiasco and the related tragedy of obsolete suburbia, the contemptuous disregard for the futures of young people, the immersive Kardashian celebrity twerking sleaze, the downward spiral of the floundering classes into pizza and Pepsi induced obesity, methedrine psychosis, and tattooed savagery, and the thick patina of public relations dishonesty that coats all of it like some toxic bacterial overgrowth. The dwindling life of our nation, where anything goes and nothing matters.

It’s not just the individual cluelessness of ordinary people leading lives too frantic for a moment’s reflection about anything, but the appalling institutional cluelessness of enterprises where you’d think combined intellects might tend toward a more faithful view of reality. But these days all we get is a low-order of wishful and clownish group-think, such as this item from today’s New York Times discussing a proposed reversal of Gazprom pipelines along the Ukraine / Slovakian frontier as the solution to the Kiev government’s fuel problem:

Nearly all the gas Washington and Brussels would like to get moving into Ukraine from Europe originally came from Russia, which pumps gas westward across Ukraine, into Slovakia and then on to customers in Germany and elsewhere. Once the gas is sold, however, Gazprom ceases to be its owner and loses its power to set the terms of its sale.

Get that? To avoid depending on Russian gas, they’re going to buy Russian gas from sources other than Russia. What New York Times editor can read this story without spraying her video display with coffee? What genius in John Kerry’s “Haircut-in-Search-of-a-Brain” State Department dreamed up this dodge? Who would think that you could improve a Chinese fire drill by tacking on a Polish blanket trick (i.e. trying to make your blanket longer by cutting a foot from the top and sewing it onto the bottom).

The only conclusion the casual observer can come to is, to put it mildly, these institutions have gone completely meshugga. Since I follow the behavior of these organizations, I know that this is not an isolated example. For the State Department, the entire gambit in Ukraine has been a chain of obvious bungles and miscalculations, starting with our sponsored overthrow of the original elected Kiev government, and the absurd presumption that Russia had no legitimate interest in that region’s stability to the strategy of shoot-yourself-in-the-foot financial sanctions. The New York Times (once America’s “Newspaper of Record”), is now a completely unreliable conduit for un-parsed White House backgrounder propaganda and raw State Department spin, with an overlay of editorial PMS brain fog.

Another humdinger on a somewhat different issue caught my attention the other day in the formerly eminent, now degenerate journal Foreign Affairs (May / June 2014): The United States of Gas, by Robert Hefner III . This idiotic article in the current issue hits on all the usual wishful thinking delusions du jour concerning this country’s energy prospects, namely: due to fracking in shale deposits we’ve entered an energy-and-manufacturing renaissance, we’re soon-to-be the premier energy exporter to the world, and US “consumers” (i.e. citizens) can be assured of driving to WalMart forever — in other words, all economic problems solved. These idiots (editors and fact-checkers included) must get all their information straight out of the Cambridge Energy Research Associates (CERA) PR handouts. CERA, of course, is the official public relations shop of the oil and gas industry.

It’s one thing that this article is patently misleading. What’s worse is the complete absence of any understanding of the fundamental dynamic between the high cost of unconventional oil and gas and its effect on capital formation. In other words, the capital investment for continued future drilling will simply not exist. What a surprise that will be to the people who run this land.

There comes a point in the destiny of a failing nation when official lying is no longer distinct from official stupidity. We’ve crossed that boundary in the USA. It pays to remember that societies get what they deserve, not what they expect.




via Zero Hedge http://ift.tt/Q703ca Tyler Durden

Slavyansk Clashes Kill 20 Rebels, Injure Dozens Of Civilians; White House “Extremely Concerned” Unrest Is Spreading

Ongoing military operations in Slavyansk have left at least 20 rebels dead and dozens more civilians injured according to Interfax.

  • *SLOVYANSK CLASHES KILL 20 REBELS, MANY CIVILIANS WOUNDED: IFX

As RT reports, fatalities are on both sides with little progress reported one way or the other. The White House says it’s “extremely concerned” by the deteriorating situation in southern Ukraine. Perhaps more important for the average American citizen, Klitschko has decided to postpone his planned wedding to Hayden Panettiere due to the conflict… now it’s getting serious!!

 

As RT reports,

There were fatalities among both Kiev loyalists and local militia members after government troops renewed the crackdown on the defiant eastern Ukrainian protester stronghold of Slavyansk. Over a dozen of people have been killed, including some civilians.

 

There was a shooting on the outskirts of Slavyansk as pro-government troops raided a protester checkpoint on Monday.

 

At least 10 self-defense fighters and their unarmed civilian supporters have been killed in the latest clashes, the commander of Slavyansk self-defense, Igor Strelkov, told RIA Novosti.

 

We suffered losses – about 10 people, including civilians, 20-25 people were injured. I do not know the losses of our adversaries; clearly they are smaller than ours, they have armor. Most of our losses came from plainclothes [troops], disguised as civilians. We fell into their ambush near a petrol station,” Strelkov said.

Later confiremed by Interfax,

  • *SLOVYANSK CLASHES KILL 20 REBELS, MANY CIVILIANS WOUNDED: IFX
  • *INTERFAX CITES SLOVYANSK SEPARATISTS ON UKRAINIAN DEATH TOLL

As the physical and emotional stains of Odessa remain…

And, as AP reports, The White House says it’s “extremely concerned” by the deteriorating situation in southern Ukraine.     

The U.S. and Europe have been focused on eastern Ukraine, near Russia, where pro-Russian separatists have been occupying buildings for weeks. But the unrest has spread to Ukraine’s southern port of Odessa, where Ukraine’s government is seeking to re-establish control.

 

White House spokesman Jay Carney says the possible loss of Odessa underscores the need for an immediate de-escalation to the crisis. He’s suggesting Russia still needs to follow through with its part of a diplomatic deal to de-escalate.

 

Riots in Odessa led to 46 deaths Friday when a government building was set on fire. Carney says Ukrainian authorities should launch a full investigation. He says the U.S. mourns with Ukrainians the heartbreaking loss of life.

And then there’s this…

The unrest in the Ukraine is reaching as far as Hollywood — at least, as far as “Nashville” actress Hayden Panettiere’s wedding is concerned.

 

Everything that’s happening in Ukraine definitely put a hold on things, but we have time,” Panettiere, 24, told Parade Magazine about her upcoming nuptials to professional boxer Wladimir Klitschko.




via Zero Hedge http://ift.tt/1kPLs02 Tyler Durden