President Starts A War – Congress Yawns? Threatens To End One – Condemnation!

Authored by Ron Paul via The Ron Paul Institute for Peace & Prosperity,

Last week’s bipartisan Senate vote to rebuke President Trump for his decision to remove troops from Syria and Afghanistan unfortunately tells us a lot about what is wrong with Washington, DC. While the two parties loudly bicker about minor issues, when it comes to matters like endless wars overseas they enthusiastically join together. With few exceptions, Republicans and Democrats lined up to admonish the president for even suggesting that it’s time for US troops to come home from Afghanistan and Syria.

The amendment, proposed by the Senate Majority Leader and passed overwhelmingly by both parties, warns that a “precipitous withdrawal of United States forces from the on-going fight…in Syria and Afghanistan, could allow terrorists to regroup.” As one opponent of the amendment correctly pointed out, a withdrawal of US troops from Afghanistan is hardly “precipitous” since they’ve been there for nearly 18 years! And with al-Qaeda and ISIS largely defeated in Syria a withdrawal from that country would hardly be “precipitous” after almost five years of unauthorized US military action.

Senators supporting the rebuke claim that US troops cannot leave until every last ISIS fighter is killed or captured. This is obviously a false argument. Al-Qaeda and ISIS did not emerge in Iraq because US troops left the country – they emerged because the US was in the country in the first place. Where was al-Qaeda in Iraq before the 2003 US invasion the neocons lied us into? There weren’t any.

US troops occupying Iraqi territory was, however, a huge incentive for Iraqis to join a resistance movement. Similarly, US intervention in Syria beginning under the Obama Administration contributed to the growth of terrorist groups in that country.

We know that US invasion and occupation provides the best recruiting tools for terrorists, including suicide terrorists. So how does it make sense that keeping troops in these countries in any way contributes to the elimination of terrorism? As to the “vacuum” created in Syria when US troops pull out, how about allowing the government of Syria to take care of the problem? After all, it’s their country and they’ve been fighting ISIS and al-Qaeda since the US helped launch the “regime change” in 2011. Despite what you might hear in the US mainstream media, it’s Syria along with its allies that has done most of the fighting against these groups and it makes no sense that they would allow them to return.

Congress has the Constitutional responsibility and obligation to declare war, but this has been ignored for decades. The president bombs far-off lands and even sends troops to fight in and occupy foreign territory and Congress doesn’t say a word. But if a president dares seek to end a war suddenly the sleeping Congressional giant awakens!

I’ve spent many years opposing Executive branch over-reach in matters where the president has no Constitutional authority, but when it comes to decisions on where to deploy or re-deploy troops once in battle it is clear that the Constitution grants that authority to the commander-in-chief. The real question we need to ask is why is Congress so quick to anger when the president finally seeks to end the longest war in US history? 


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Venezuelan Colonel Urges Soldiers To Help US Aid Enter, Says 90% Of Army Against Maduro

The latest senior military officer to defect from the Nicolas Maduro government claims that 90% of the armed forces are “unhappy” with Maduro and stand ready to defect, according to The Times

Colonel Rubén Paz Jimenez posted a short video to social media over the weekend declaring his support for US-backed opposition leader Juan Guaidó. “Ninety per cent of us in the armed forces are really unhappy,” he said in the video message. “We are being used to keep them in power.” He further urged soldiers to resist orders to block humanitarian aid shipped by the United States and to instead facilitate its entry into the country

Venezuela’s Bolivarian Armed Forces, via Ultimas Noticias

According to The Times Col. Paz is a military doctor and appears to be taking advantage of Guaido’s offer of amnesty to army officers who switch loyalties to him as interim president:

A stockpile of US aid — medicines, medical equipment and nutritional supplements — is in the Colombian border city of Cucuta. Colonel Paz, a doctor, urged soldiers to help the aid get into Venezuela. Mr Guaidó has offered amnesty to those in the army who abandon Mr Maduro, 56, peacefully.

He’s been further described as deputy of the Directorate of the Military Hospital in Maracaibo and the timing of his defection is interesting given the contested issue of US humanitarian aid. 

Trump administration officials like John Bolton have also of late actively encouraged Venezuelan military defections, something that so far has been limited to a tiny handful of officers, at least one of them an Air Force commander — while also attempting to force the issue of American aid delivery. 

Colonel Ruben Paz Jimenez, deputy of the Directorate of the Military Hospital in Maracaibo, announced his support for Guaido and urged others to follow:

[youtube https://www.youtube.com/watch?v=qG0FUQ_CrB0]

Bolton recently invoked the “authorization” of Interim President Juan Guaido to ship humanitarian aid into the country including “medicine, surgical supplies, and nutritional supplements for the people of Venezuela” according to his statement. He urged Maduro “to get out of the way”.

The Times report noted the Venezuelan pharmaceutical association has put the situation of medicine access to the population at extreme crisis levels

The Venezuelan pharmaceutical association has said that 80 per cent of medicines are in short supply. Most Venezuelans report involuntary weight loss over the past two years, and three million people — almost a tenth of the population — have left since 2014. The economy has collapsed and inflation is estimated at 2.7 million per cent.

Meanwhile the socialist government in Caracas insists it isn’t experiencing a humanitarian crisis; instead Maduro has slammed US aid to the country as a “political show”.

The United States urged the UN to act by presenting a draft resolution before the security council demanding that Venezuelan forces unblock the aid at the border, reportedly coming via Brazil and US ally Colombia, in order for the people to access it. Russia is expected to block the resolution. 

Interestingly, prior to this latest defection of military doctor Col. Paz, another high ranking officer had cited the exact same “90 percent” figure describing armed forces who are actually against Maduro. The highest ranking armed forces member to defect thus far, Air Force General Francisco Yanez, who was part of the air force’s high command, in his own video message early this month claimed a wave of defections is coming.

The obvious question remains: is this a mere opposition propaganda talking point employed in the hopes of gaining momentum? Given the scant number of high level officers willing to abandon Maduro over the past two weeks as international pressure grows, it appears merely an empty scripted claim. 

Last month National Assembly leader and now US-recognized “Interim President” Guaido first began appealing to the military to switch sides following a local and short-lived attempt of 27 officers to lead a revolt on Jan. 21, quickly put down by security forces after they stormed an armory and police checkpoint.

To encourage more such defections, which so far hasn’t appeared to penetrate the top layers of military leadership, Guaido has offered amnesty protection to any officer previously accused of corruption or human rights abuses should they defect. 

But so far there’s been a tiny – we might even say insignificant – trickle as the country’s most powerful institution continues to stand by Maduro’s side against “foreign aggression” and the regime change rhetoric issuing from the White House.  


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How About A Red, White, And Blue New Deal?

Authored by Kurt Schlichter, op-ed via Townhall.com,

I know many Americans are chomping at the bit to turn our entire economy over to a bunch of coastal blue city hipsters and college professors, along with all our money and our personal freedom, because of a dubious moral panic over future weather, but I’d like to suggest a better idea.

I call it the Red, White and Blue New Deal, and it’s a little different than the proposed Green New Deal that seems to benefit only virtue signaling limo libs, crony capitalists, and aspiring commissars. The Red, White and Blue New Deal would, instead, be directed at benefiting Normal Americans – you know, those people who built our country, feed it, fuel it and defend it. People like you and me. So, here it is. All of it:

Support your own damn self and leave me the hell alone.

That’s it. That’s my Red, White and Blue New Deal.

What do you think?

Now, one of the virtues of my innovative proposal is its simplicity. It requires no “massive” mobilization of our whole society in a collective campaign to pursue some arbitrary goal that a bunch of liberals who never ran anything but their lying mouths picked out for us. It requires no additional national debt. It requires no huge, unresponsive deadweight bureaucracy to implement. In fact, it requires nothing at all besides what you and me have always done – work for a living.

Here it is again, in its entirety:

Support your own damn self and leave me the hell alone.

Now, the left is going to find this comprehensive scheme problematic for many reasons, primarily among them because it does not take the fruits of our labor and our freedom and hand them over to those very same leftists. As you look at the Green New Deal, you may wonder, “How does this plan make me freer or more prosperous?” But, of course, it does neither. Neither your freedom nor your prosperity is the purpose of the Green New Deal, nor the purpose of any of the other countless moral equivalents of war they are always proposing. Climate change is just the latest excuse for their pinko power grab. If it wasn’t the fake weather religion, it would be some other imminent danger of certain doom that required you to give up your money and freedom RIGHT NOW NO TIME TO THINK THE CHILDREN THE CHILDREN THE CHILDREN!

It’s funny how the solution to every problem the left obsesses over is having leftists take away your money and your freedom. 

But, in my Red, White and Blue New Deal, no one takes anything from anyone else. You take care of yourself, and you get left alone, which is frustrating for the left because the left exists to steal what you have earned to redistribute as the left sees fit, and to command you to do, think, say, and feel as the left sees fit.

Again, here is my Red, White and Blue New Deal:

Support your own damn self and leave me the hell alone.

Now, my plan differs from the Green New Deal in several other key ways. The Green New Deal provides that at some point in the next few years America will end fossil fuel use, meaning you will no longer be able to drive your awesome Mustang or BMW. But with my Red, White and Blue New Deal, you can drive whatever you please. You just have to pay for your own car and the gas and stuff.

The Green New Deal would transition from airplanes to high speed rail, which we Californians have seen transform our state into a Utopia by costing tens of billions of dollars to make travel between Bakersfield and Fresno slightly faster. But under my plan, you could still fly in airplanes if you buy a ticket with the money you earned. Or you could take a train, also if you buy a ticket with the money you earned. It’s your decision because it’s your money.

Flatulent cattle is a challenge the Green New Deal is ready to face, presumably by transitioning you away from delicious beef into some lesser food the leftists decide you can consume. But with my Red, White and Blue New Deal, you could buy, with the money you earned, whatever you felt like eating. You might choose a delicious steak, or you may select whatever hideous tofu garbage the leftists think you should be eating. You would support yourself, and other people would leave you alone to choose how you spend the money you earn.

The Green New Deal, which is supposed to be about fighting the pressing threat of slightly different temperatures in the next century, also contains a bunch of other stuff that one might not think play a part in controlling the climate. Odd, but these prescriptions to reach whatever perfect temperature we are supposed to reach (the creepy weather cultists never seem to tell us what the “right” temperature is) correspond exactly to the classic Marxist wish list – redistribution, nationalization, and the central planning of the economy. Strange how that works. 

Presumably the people who make the DMV a delight and made Obamacare a smashing success will totally get it right this time if we only give them exponentially more power. Hey, no one pay attention to the Venezuela behind the curtain!

The Green New Deal is all about its version of “economic justice,” so under the plan we taxpayers would provide an income to those “unwilling” to work. How freebies for malingerers cools the planet is unclear. Regardless, my Red, White and Blue New Deal – which isSupport your own damn self and leave me the hell alone – takes a slightly different approach. That is, if you are unwilling to work, you get nothing.

And it’s not just money that you would not get. You would not get a free apartment or free medical care or a free iPhone either. See, under my plan, you work, and what you earn you can choose to spend on things that are important to you. For example, you may choose to spend your money on booze and drugs, in which case you would get fewer things like food and vacations and doctor visits. Or you may save your money, and buy a nicer car or a better home or get that weird mole removed. It’s all up to you! This radical idea of allowing you to set your priorities and then choose how to achieve them, like by working harder or saving your money, really annoys leftists because it leaves no place for them to tell you what to do.

Now, some people who choose not to support themselves by working would experience what’s called “consequences” of their decision. This would manifest as things like hunger, being cold and/or generally not having the stuff other people who actually work to support themselves have. But one of the innovations of the Red, White and Blue New Deal is that it harnesses the potent incentive power of hunger, cold and generally not having the stuff other people who actually work to support themselves have, to get people to embrace the pride and dignity that come with supporting themselves. This is as opposed to us people who do support ourselves having to give up a portion of what we have earned to subsidize the deadbeats, bums, chiselers, and other key components of the Democrat Party base.

Of course, charity would still exist. I, for instance, do give now, and would continue to choose to give, to help people down on their luck by circumstance to get back on their feet and back to supporting themselves, at which point they would be left alone because they are now supporting themselves, as every self-respecting American citizen should.

Unlike the Green New Deal, under the Red, White and Blue New Deal, not forcing hardworking Americans to support the laziness of shiftless lay-abouts is the foundation of “economic justice.”

My latest novel, Wildfire, and the earlier installments People’s Republic and Indian Country, show the Green New Deal in action after America splits up between the blue and the sensible states. Heck, I thought it was a bit edgy to predict the left banning private cars and requiring permission to fly on planes (assuming you have the carbon credits!), yet these commie dorks overcame my books with their reality. 

But hey, they’re destroying everything else, so why not also the ability to write right-wing action thrillers? But I’ll keep working, and I’ll keep doing as I please. 

One last time, here is my Red, White and Blue New Deal, in its entirety:

Support your own damn self and leave me the hell alone.


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Dollar Jumps, Yuan Dumps, Dow Slumps As Chinese Return To Work

The Lunar New Year celebrations are over – China was up… Europe was up… But The Dow closed down – is that even allowed?

[youtube https://www.youtube.com/watch?v=M5QGkOGZubQ]

 

Chinese traders returned from their week-long vacation and played catch up to global stocks, with tech-heavy CHINEXT soaring 3.5%…

 

Having drifted lower during the lunar new year celebrations, Offshore Yuan spiked at the open, but then plunged as the day wore on…

 

European markets surged out of the gate after China’s gains…

 

US equities surged overnight as Europe opened then dumped it all back as the US cash markets opened…Futures show the late-Friday-close panic-buying gains evaporated…

 

In cash markets, Trannies soared, Nasdaq and S&P struggled all day and The Dow was red…

 

“Most Shorted” stocks were squeezed again – erasing the drop from last Thursday

 

S&P is holding just above its 100DMA…

 

Equity and credit protection costs were higher on the day but faded (improved) into the close…

 

Treasury yields ended the day higher, despite equity weakness (and dollar gains)…

Chatter of a huge investment grade calendar likely prompted the marginal weakness in bonds as rate-locks set

However, 30Y held just below 3.00%…

 

The dollar index surged by the most in 3 months for its 8th daily gain in a row into the green for 2019 – the longest win streak since Jan 2016…

This is the biggest 8-day gain in the dollar since June 2018.

The last few times that the dollar has surged at this pace, things reversed rather quickly…

 

Ugly day for cable today…

 

Emerging Market FX was hammered also…

 

In cryptos, Litecoin continues to rise (admittedly with plenty of vol) along with Ethereum…Bitcoin was deadstick…

 

Commodities and Bonds have already started to reject the rampant buying panic in stocks…

 

Commodities were all lower on the strong dollar but gold dropped the least…

 

Magical comeback in WTI rescued it from a $51 handle…

 

Gold was down on the day as the dollar spiked but the precious metal managed to bounce…

 

As the dollar has surged back into the green for 2019, Platinum has been punished most (but Palladium remains the best performer of the year)…

 

Finally, we note that the fun-durr-mentals are not getting any better…

Even The Fed’s model is starting to signal recession looms…


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California's New Governor To Pull Troops From Border To Protest Trump's "Manufactured Crisis"

In the ultimate signaling of virtue – in favor of illegal immigrants and against the safety of Americans – newly-elected Democrat California Governor Gavin Newsom, desperate for some distraction from the state’s likely bailout of PG&E, has decided to withdraw nearly 400 of his state’s National Guard troops from deployment along the border with Mexico and assign them to other duties, according to aides to the governor.

As The NY Times reports, the step to rescind state authorization for the border deployment is a sharp rebuke of President Trump’s continued warnings that undocumented migrants present a national security risk to the United States.

It follows a similar move last week by Gov. Michelle Lujan Grisham of New Mexico.

Under a “general order” that Mr. Newsom plans to sign on Monday, 110 California National Guard troops will be redirected to support the state’s central fire agency, Cal Fire, and another 100 will work on statewide “intelligence operations” aimed at international criminal drug gangs.

Fox News reports that Newsom is preparing to blast Trump on Tuesday when the governor delivers a State of the State address that will belittle Trump’s warnings of a border crisis as a “manufactured crisis” while declaring that “California will not be a part of this political theater.”

The move comes despite his predecessor’s agreement – along with other past and current border state governors – to send troops to the border at the Trump administration’s request. Former California Gov. Jerry Brown originally approved the mission through the end of March, but qualified that the state’s troops “will not be enforcing federal immigration laws.”

What could go wrong? What’s the worst that could happen?

Let’s ask Dan Ferguson, an angel dad whose daughter Amanda was killed in a hit-and-run accident in November 2018 by Joel Velazquez, 24, who was in the U.S. illegally and had been drinking the night he allegedly ran several red lights and hit and killed Amanda.

[youtube https://www.youtube.com/watch?v=6KmmnRIIdto]

And then there are the 42 million other reasons…


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All The Ways Gen X Is Financially Wrecked

Authored by Catey Hill via MarketWatch.com,

Though they’re struggling financially, they’re far less likely than millennials to plan to spend less and save more this year…

Reality bites.

While millennials garner much of the negative press around financial issues – they live with their parents because they can’t get jobs! They spend all their money on avocado toast! – Gen Xers may be the ones who are really in trouble.

Just 16% of Gen Xers say that they included financial planning in their 2019 goals, according to a recent survey from Allianz Life. That’s compared with 27% of millennials. And when asked what 2019 resolution they were most likely to make, and to keep, just 38% mentioned managing money better and saving more; meanwhile 50% of millennials said that.

That lack of planning and goal-keeping could make a bad situation worse — as Gen X may already be financially worse off than other generations in a number of ways.

They’ve got the most credit card debt of anyone — yet still spend more than anyone on non-essentials. Members of Gen X have higher levels of credit card debt — which tends to carry a higher interest rate than most other debt — than other generations. Indeed, credit card debt levels peak between the ages of 45-54 at $9,096, with the second highest levels of debt being or those who are 35-44 at $8,235. Meanwhile, the under 35 set has just $5,808.

“Millennials and individuals over 74 years old held the least credit card debt. These two groups are also among the least likely to have a credit card, which can serve as a potential explanation behind the trend we are seeing here,” ValuePenguin explains of their data.

Despite their sky high credit card debt, Gen X spends big on non-essentials, according to data released in 2018 from finance site Bankrate.com. Indeed, “Gen Xers (ages 38-53) spend $3,473 annually on restaurant food, prepared beverages and lottery tickets, the most of any generation,” the report reveals. Meanwhile, millennials spend just $2,758.

“For the average American, a few thousand dollars may not sound like a lot to spend each year on dining out and other financial vices,” said Amanda Dixon, a Bankrate analyst. “However, if a Gen Xer was to invest that $3,473 a year for 10 years at an 8% return, they would end up with just over $50,000 that could go toward their retirement savings or their child’s college fund.”

They’re woefully under-saved for retirement. “While Generation X continues to struggle with saving and spending, millennials — although not without their own unique financial challenges — seem better positioned for retirement than their closest predecessors. Median retirement savings for Gen X is only $35,000, the same median amount as millennials, despite Gen Xers being much closer to retirement,” according to a study of 3,000 Americans by Allianz Life.

Having just $35,000 in retirement savings — especially when you’re a Gen Xer ages 37- 51 — is not even close to enough. Fidelity recommends that by age 40 you have three times your salary saved for retirement. Gen Xers may be so under-saved thanks to the competing financial demands of children — the Census Bureau estimates that will set parents back roughly $245,000 through age 18 — and caring for aging parents.

Their overall debt load is the highest of any generation. Not only is their credit card debt high, the total amount of debt they have is. Those in the 35-44 age group have “the highest debt levels of any age bracket,” SmartAsset notes, citing Federal Reserve data. Their average debt, at least among households with debt. is $152,400, compared to only about $82,000 for the under 35 set.

They’re more likely than other generations to say they can’t meet their financial goals. All of this debt and the lack of savings may explain why fewer than 1 in 3 members of Gen X says they think they can reach their long-term financial goals, according to a survey released in 2017 by FICO. Meanwhile, 45% of millennials and 36% of boomers say they will.


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Salvini Proposes Seizing Control Of Italy's Gold Reserves From The Central Bank

Italy’s populist de facto leader Matteo Salvini seems set on shaking Europe’s financial establishment to the core.

One day after the Italian deputy prime minister and leader of the League party, called for the elimination of Italy’s central bank and the country’s financial regulator, Consob, saying the two institutions should be “reduced to zero, more than changing one or two people, reduced to zero”, or in other words eliminated, and that “fraudsters” who inflicted losses on Italian savers should “end up in prison for a long time”, Salvini prompted fresh shocked gasps in Brussels and Frankfurt when he raised the possibility of seizing Italy’s massive gold reserves away from the country’s central bank.

“The gold is the property of the Italian people, not of anyone else,” Salvini said in comments to reporters on Monday, according to the FT.

The controversial comments, which were seen as threatening the “independence” of the Italian central bank, whose one-time head was none other than Mario Draghi, prompted Giovanni Tria, Italy’s economy minister, to defend the independence of the central bank.

Earlier in the day, Italy’s populists called on lawmakers to pass legislation stating that its gold holdings belong to the state, Bloomberg reported.

The gold ownership bill presented by euroskeptic lawmaker Claudio Borghi of the League adds to an already tense relationship between the Bank of Italy and the coalition government. It’s also sparked criticism from opposition politicians, and some national media argue that it may allow the government to raid the gold reserves to fund spending promises.

Borghi has rejected the accusation and said he’ll ensure Parliament has ultimate power. His concern is that ambiguity of ownership means that a victorious legal action against the central bank — for inadequate supervision, for example — leaves open the possibility of a claimant getting compensation in gold.

“My bill only aims at making clear that the gold belongs to the state, not to the government,” he said in a telephone interview on Monday. “If there are doubts on our intentions, we can also pass another law saying none of the gold reserves can be sold unless there is a majority of two thirds or more of both houses of Parliament.”

According to Bloomberg, Borghi’s bill, being examined by the Lower House’s Finance Committee, calls for an explicit interpretation of legislation that the institute “holds and manages as deposits” the gold, while the state has ownership.

* * *

So why is Salvini seeking to seize the gold and use it “on behalf of the Italian people”? While there was no clear cut answer, the Italian media reported that the coalition government of Salvini’s anti-migration League and the anti-establishment Five Star Movement, may be considering using part of the central bank’s gold to fund their spending plans.

Salvini countered that while he had not studied the notion of selling Bank of Italy reserves to fund additional government spending in detail, he conceded that “it may be an interesting idea.”

Meanwhile, the close economic adviser of Salvini and Eurosceptic League member of parliament, Claudio Borghi, has proposed a law to ensure that the Italian state was recognised as the ultimate owner of Italy’s gold reserves rather than the Bank of Italy.

“Nobody wants to sell the ingots, in fact, quite the opposite, we want to prevent others from having their hands on it,” Mr Borghi wrote on Twitter after Mr Salvini’s comments according to the FT.

The idea to liquidate Italy’s gold in order to fund higher state spending appears to have emerged from Beppe Grillo, the co-founder of Five Star, who last September wrote that “It would allow us to finally put an end to this annoying story about the fact that ‘there is no money’”, adding “why do citizens have to sell their necklaces and not the state?”

If Salvini is indeed serious to monetize its gold, it would bring in a healthy chunk of change for Italy’s populist leadership: the Bank of Italy has the third-largest central bank holding of gold reserves in the world after the US and Germany, owning 2,452 tonnes according to the World Gold Council, which at today’s prices would amount to just over $103 billion.

Of course, even that amount pales in comparison with Italy’s total debt load of €2.35 trillion, which would suggest that if Salvini is indeed focused on tearing up the legacy constraints of his country with some financial establishment, the next step would be declaring the country’s sovereign debt “odious” or null and void, followed ultimately by the Italeave, and the the return of the Italian lira.


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One Trader Rants "It's Time For Central Bankers To Stop Bullshitting & Admit They Failed"

Authored by Sven Henrich via NorthmanTrader.com,

Warning. Rant Alert

The global central bank easy money experiment has failed and it is past time that central bankers stopped bullshitting us and just admitted it.

Europe is about to enter a recession and rates are still negative, the US Fed just tried to reduce its balance sheet with the greatest economic backwind in years (tax cuts, record buybacks, 3% GDP growth) and still they failed miserably, forced once again to halt all rate hike efforts. After 10 years of being non stop “accommodative” the Fed tried for 3 months to not be accommodative and it blew up in their face as the bottom dropped out of markets.

Only emergency liquidity calls from Cabo by Treasury Secretary Mnuchin and a complete 180 degree reversal by the Fed stopped the bleeding. Again.

And so once again the Fed is asking us to play chase the dot plot. Always dangling higher rate forecast targets that never come to fruition:

Not playing anymore. For 10 years we’ve watched the dot plot being moved further and further into the future only to see it all flat line again now with a renewed halt in rate hikes and an end to reducing the balance sheet. The conclusion is pretty clear:

The Fed is trapped, the ECB is trapped, the BOJ is trapped – all doomed to intervene forever and ever amen always afraid to see markets go through a process of repricing and squeezing out the artificial asset inflation that 10 years of permanent intervention have wrought.

All are too afraid of the next recession and aim to avoid it at all costs. And who can blame them? The prospect of entering a global recession without enough ammunition to deal with it is a frightening prospect.

And don’t think for a minute that the next rounds of stimulus, i.e. QE4 and negative rates, will have the same effect as last time. Already the current effect is very questionable. The US has been stumbling from lower highs on the Fed Funds rate for decades with that stimulus of ever lower rates producing ever less real GDP growth:

The trend is so well established it’s no surprise that markets once again puked once the 10 year yield hit its 30+ year trend line:

And hence it’s also no surprise that the Fed, desperate to re-inflate asset prices  and to repair the market damage, once again caved as $SPX broke its trend.

If you look at the world through a linear lens they of course stepped in at precisely the spot where they always step in with no sign that liquidity has ever been normalized:

But unlike 2016 there’s no great new stimulus coming and this is precisely why markets are starting to price in rate CUTS, the end of the rate raising cycle. And it’s why Janet Yellen is also already talking about rate cuts.

That’s called the end of the easing cycle and is practically begging for this conclusion:

https://platform.twitter.com/widgets.js

Bulls will tell you it’s all bullish, because a dovish Fed has been the spark for higher equity prices for the past 10 years. Problem is the last 3 times the Fed has ended its rate hike cycle and proceeded to an easing cycle a recession soon followed. So the same crowd that told you to buy stocks last year because of global synchronized growth is now telling you to buy stocks because the Fed is now easy due to a global synchronized slowdown that will prove to be temporary. Please.

Talk is already of a ‘melt-up’ either now or after a rate cut

“Given their reaction, investors now realize the importance of the ‘Powell Put.’ It even raises the possibility of a late-90s-style ‘meltup.’ The question is whether we need another December-style meltdown and Fed rate cuts before markets get bubbly, or whether the policy shift announced so far is already sufficient.”

Problem with that theory is that the Fed appears to be expecting more than a temporary slowdown. See for now the Fed has signaled it might merely halt its balance sheet reduction program:

But if they intend to merely pause or halt its reduction program why are they openly discussing buying bonds again and not on an emergency basis, but on a regular basis? Not kidding:

“U.S. central bankers are currently debating whether it should confine its controversial tool of bond buying to purely emergency situations or if it should turn to that tool more regularly, San Francisco Federal Reserve Bank President Mary Daly said on Friday.”

Stop bullshitting us.

Reality is what was promised to be emergency measures during the financial crisis have become permanent measures. What was promised to be reverted to normal can’t be reverted. Too great has been the debt expansion during the easy money years giving both governments and corporations license to load up on debt. And now they can’t normalize, they can’t raise rates, and they can’t stop intervening.

The emerging truth: Central banks will never “normalize” rates, they will never revert their balance sheets to pre-crisis levels, and they will never stop interfering with markets.

But they will not admit this to the public. What they will do is sanctimoniously complain about income inequality, the very income inequality they have helped propagate for decades. Powell last week:

“Speaking at a town hall in Washington D.C. to a group of educators, the central bank leader said his greatest economic fears lie outside the Fed’s purview. Specifically, he called for more aggressive policies to address income inequality.

“Wages at the middle and lower levels have “grown much more slowly” than those at the higher end, he said. “We want prosperity to be widely shared. We need policies to make that happen,” Powell added”.

Out of the Fed’s purview? Seriously? That’s revisionist history in the making as central bank policies have helped to greatly exacerbate wealth inequality by inflating the asset classes owned by the few. To not acknowledge this is to be revealed to not be serious about the issue.

After all what has screwed the middle class has helped produce the system we have now, a system that produces ever more wealth for the few at the expense of the many.

But you wouldn’t be able to tell this from the Fed pablum about how it only cares about doing a good job for the American people:

https://player.cnbc.com/p/gZWlPC/cnbc_global?playertype=synd&byGuid=7000062930&size=530_298

Sounds good right? Except public debt to GDP is 104%, corporate debt is over $9 trillion with over half being BBB rated:

But unemployment is low. Times should be good and happy. Instead we see waves of populism borne out of discontentment and fear destabilizing the entire Western World. Populism and nationalism usually come as a result of high unemployment and in the context of recessions and economic angst. It is these environments that breed political extremism and instability. Not now, they are already here.

Why?

Consider how our current form of capitalism works:

Major U.S. banks shaved about $21 billion from their tax bills last year — almost double the IRS’s annual budget — as the industry benefited more than many others from the Republican tax overhaul. On average, the banks saw their effective tax rates fall below 19 percent from the roughly 28 percent they paid in 2016. And while the breaks set off a gusher of payouts to shareholders, firms cut thousands of jobs and saw their lending growth slow“.

Specifically 23 firms boosted dividends and stock buybacks by 23 percent, and they eliminated almost 4,300 jobs. And few have signaled plans to cut thousands more. Why? Because they can and technology enables it, indeed $BAC’s CEO recently boasted how technology allowed him to eliminated over 100,000 jobs at $BAC in the past decade.

The whispers of the future are all around us already: “Artificial intelligence and robotic process automation has helped the firm’s Wall Street divisions cut 84,000 work-hours a year”

His reward? Oh you guessed it:

https://platform.twitter.com/widgets.js

A 15% wage increase in a year when $BAC stock dropped 15% despite dividends and buybacks:

When $22M a year are not enough, you get a corporate tax cut, lay off more people and make $25.6M per year instead.

“Greed, greed and more f***ing greed and cheap money” was the explanation in the rant of the financial crisis:

https://platform.twitter.com/widgets.js

Nothing’s changed.

See you can’t lose in corporate America. As to the rest, well your real disposable income is stuck in neutral:

But don’t worry, the Fed is ready to give it back to you, the people:

By doing the same thing they’ve done for the past 10 years: Bullshit the people.

Yesterday the IMF warned of a global economic “storm” as growth undershoots even their downward revisions from January. Paul Krugman is now warning of a recession. Morgan Stanley just slashed euro zone 2019 GDP forecast to 1.0% from 1.6% a not trivial cut. The bank also cut inflation, bond yield & euro forecasts, and pushes out ECB’s first rate hike to June 2020.

Given this backdrop I have to ask this question:

https://platform.twitter.com/widgets.js

And it’s really true, nobody knows and neither would we know the efficacy of any renewed central bank measures, although for now one must acknowledge their awesome power once again as complete policy capitulation has again managed to re-inflate the assets owned by the few:

Wealth inequality is just terrible, but we only care about doing a good job for the American people. Don’t you know?

It all rings hollow. And central bankers can’t be taken seriously on bemoaning wealth/income inequality when they themselves keep perpetuating it. Easy money policies have enabled the greatest debt expansion in our lifetimes, enabled politicians to ignore all meaningful structural reforms and the resulting wealth and income inequality has greatly contributed to political movements of populism and discontentment. But none of this is acknowledged by Powell, or Draghi, or Kuroda, the central bank overlords. Or Yellen or Bernanke. Or anyone in power. None of them bear any responsibility right? Who does? Nobody of course.

But who pays for it all? Everybody, for when the next recession comes corporations will have the greatest incentive ever to automate, downsize, apply new AI technologies etc. The signs are already there, just check the banking sector. There’s always money for dividends and buybacks and CEO pay raises, now watch what we can do with downsizing.

Careful folks, 4% unemployment is not the place to be complacent about coming job gains. Watch those layoff announcements, they are a’ rising, slowly, but surely.

Reality check:

No new highs without dovish capitulating central banks. No new highs without artificial liquidity and/or intervention. 10 years after the financial crisis this remains the primary price discovery dynamic.

Markets remain entirely dependent on running to their central bank daddies for help every time they get in trouble. This is the expectation central banks have set and this is the role they continue to play. Markets are spoiled trust fund kids. The age of permanent intervention began in 2008. The correction of 2018 just made central bankers finally admit it as they failed to stay non accommodative for not even 3 months before caving.

10 years after the financial crisis we are staring at a global economic slowdown with central banks never having normalized and, as a result, having a lot less ammunition at their disposal to react. The global economy is riddled with the highest debt loads ever, while the few have become richer than ever.

Think people are angry now? Watch the next recession.

The saddest part in all this is that the financial crisis gave a loud enough warning and a call to action. We, as a global society, wasted the opportunity for meaningful structural reform, instead we doubled down on the system that was already in place. And now we’re left hoping, hoping that the Powell put will be as good as the Yellen put and the Bernanke put before that. Cause the central bank put is all that’s standing between markets and the great unwind.

Rant Over.

*  *  *

For the latest public analysis please visit NorthmanTrader. To subscribe to our market products please visit Services.


via ZeroHedge News Read More Here..

One Trader Rants "It's Time For Central Bankers To Stop Bullshitting & Admit They Failed"

Authored by Sven Henrich via NorthmanTrader.com,

Warning. Rant Alert

The global central bank easy money experiment has failed and it is past time that central bankers stopped bullshitting us and just admitted it.

Europe is about to enter a recession and rates are still negative, the US Fed just tried to reduce its balance sheet with the greatest economic backwind in years (tax cuts, record buybacks, 3% GDP growth) and still they failed miserably, forced once again to halt all rate hike efforts. After 10 years of being non stop “accommodative” the Fed tried for 3 months to not be accommodative and it blew up in their face as the bottom dropped out of markets.

Only emergency liquidity calls from Cabo by Treasury Secretary Mnuchin and a complete 180 degree reversal by the Fed stopped the bleeding. Again.

And so once again the Fed is asking us to play chase the dot plot. Always dangling higher rate forecast targets that never come to fruition:

Not playing anymore. For 10 years we’ve watched the dot plot being moved further and further into the future only to see it all flat line again now with a renewed halt in rate hikes and an end to reducing the balance sheet. The conclusion is pretty clear:

The Fed is trapped, the ECB is trapped, the BOJ is trapped – all doomed to intervene forever and ever amen always afraid to see markets go through a process of repricing and squeezing out the artificial asset inflation that 10 years of permanent intervention have wrought.

All are too afraid of the next recession and aim to avoid it at all costs. And who can blame them? The prospect of entering a global recession without enough ammunition to deal with it is a frightening prospect.

And don’t think for a minute that the next rounds of stimulus, i.e. QE4 and negative rates, will have the same effect as last time. Already the current effect is very questionable. The US has been stumbling from lower highs on the Fed Funds rate for decades with that stimulus of ever lower rates producing ever less real GDP growth:

The trend is so well established it’s no surprise that markets once again puked once the 10 year yield hit its 30+ year trend line:

And hence it’s also no surprise that the Fed, desperate to re-inflate asset prices  and to repair the market damage, once again caved as $SPX broke its trend.

If you look at the world through a linear lens they of course stepped in at precisely the spot where they always step in with no sign that liquidity has ever been normalized:

But unlike 2016 there’s no great new stimulus coming and this is precisely why markets are starting to price in rate CUTS, the end of the rate raising cycle. And it’s why Janet Yellen is also already talking about rate cuts.

That’s called the end of the easing cycle and is practically begging for this conclusion:

https://platform.twitter.com/widgets.js

Bulls will tell you it’s all bullish, because a dovish Fed has been the spark for higher equity prices for the past 10 years. Problem is the last 3 times the Fed has ended its rate hike cycle and proceeded to an easing cycle a recession soon followed. So the same crowd that told you to buy stocks last year because of global synchronized growth is now telling you to buy stocks because the Fed is now easy due to a global synchronized slowdown that will prove to be temporary. Please.

Talk is already of a ‘melt-up’ either now or after a rate cut

“Given their reaction, investors now realize the importance of the ‘Powell Put.’ It even raises the possibility of a late-90s-style ‘meltup.’ The question is whether we need another December-style meltdown and Fed rate cuts before markets get bubbly, or whether the policy shift announced so far is already sufficient.”

Problem with that theory is that the Fed appears to be expecting more than a temporary slowdown. See for now the Fed has signaled it might merely halt its balance sheet reduction program:

But if they intend to merely pause or halt its reduction program why are they openly discussing buying bonds again and not on an emergency basis, but on a regular basis? Not kidding:

“U.S. central bankers are currently debating whether it should confine its controversial tool of bond buying to purely emergency situations or if it should turn to that tool more regularly, San Francisco Federal Reserve Bank President Mary Daly said on Friday.”

Stop bullshitting us.

Reality is what was promised to be emergency measures during the financial crisis have become permanent measures. What was promised to be reverted to normal can’t be reverted. Too great has been the debt expansion during the easy money years giving both governments and corporations license to load up on debt. And now they can’t normalize, they can’t raise rates, and they can’t stop intervening.

The emerging truth: Central banks will never “normalize” rates, they will never revert their balance sheets to pre-crisis levels, and they will never stop interfering with markets.

But they will not admit this to the public. What they will do is sanctimoniously complain about income inequality, the very income inequality they have helped propagate for decades. Powell last week:

“Speaking at a town hall in Washington D.C. to a group of educators, the central bank leader said his greatest economic fears lie outside the Fed’s purview. Specifically, he called for more aggressive policies to address income inequality.

“Wages at the middle and lower levels have “grown much more slowly” than those at the higher end, he said. “We want prosperity to be widely shared. We need policies to make that happen,” Powell added”.

Out of the Fed’s purview? Seriously? That’s revisionist history in the making as central bank policies have helped to greatly exacerbate wealth inequality by inflating the asset classes owned by the few. To not acknowledge this is to be revealed to not be serious about the issue.

After all what has screwed the middle class has helped produce the system we have now, a system that produces ever more wealth for the few at the expense of the many.

But you wouldn’t be able to tell this from the Fed pablum about how it only cares about doing a good job for the American people:

https://player.cnbc.com/p/gZWlPC/cnbc_global?playertype=synd&byGuid=7000062930&size=530_298

Sounds good right? Except public debt to GDP is 104%, corporate debt is over $9 trillion with over half being BBB rated:

But unemployment is low. Times should be good and happy. Instead we see waves of populism borne out of discontentment and fear destabilizing the entire Western World. Populism and nationalism usually come as a result of high unemployment and in the context of recessions and economic angst. It is these environments that breed political extremism and instability. Not now, they are already here.

Why?

Consider how our current form of capitalism works:

Major U.S. banks shaved about $21 billion from their tax bills last year — almost double the IRS’s annual budget — as the industry benefited more than many others from the Republican tax overhaul. On average, the banks saw their effective tax rates fall below 19 percent from the roughly 28 percent they paid in 2016. And while the breaks set off a gusher of payouts to shareholders, firms cut thousands of jobs and saw their lending growth slow“.

Specifically 23 firms boosted dividends and stock buybacks by 23 percent, and they eliminated almost 4,300 jobs. And few have signaled plans to cut thousands more. Why? Because they can and technology enables it, indeed $BAC’s CEO recently boasted how technology allowed him to eliminated over 100,000 jobs at $BAC in the past decade.

The whispers of the future are all around us already: “Artificial intelligence and robotic process automation has helped the firm’s Wall Street divisions cut 84,000 work-hours a year”

His reward? Oh you guessed it:

https://platform.twitter.com/widgets.js

A 15% wage increase in a year when $BAC stock dropped 15% despite dividends and buybacks:

When $22M a year are not enough, you get a corporate tax cut, lay off more people and make $25.6M per year instead.

“Greed, greed and more f***ing greed and cheap money” was the explanation in the rant of the financial crisis:

https://platform.twitter.com/widgets.js

Nothing’s changed.

See you can’t lose in corporate America. As to the rest, well your real disposable income is stuck in neutral:

But don’t worry, the Fed is ready to give it back to you, the people:

By doing the same thing they’ve done for the past 10 years: Bullshit the people.

Yesterday the IMF warned of a global economic “storm” as growth undershoots even their downward revisions from January. Paul Krugman is now warning of a recession. Morgan Stanley just slashed euro zone 2019 GDP forecast to 1.0% from 1.6% a not trivial cut. The bank also cut inflation, bond yield & euro forecasts, and pushes out ECB’s first rate hike to June 2020.

Given this backdrop I have to ask this question:

https://platform.twitter.com/widgets.js

And it’s really true, nobody knows and neither would we know the efficacy of any renewed central bank measures, although for now one must acknowledge their awesome power once again as complete policy capitulation has again managed to re-inflate the assets owned by the few:

Wealth inequality is just terrible, but we only care about doing a good job for the American people. Don’t you know?

It all rings hollow. And central bankers can’t be taken seriously on bemoaning wealth/income inequality when they themselves keep perpetuating it. Easy money policies have enabled the greatest debt expansion in our lifetimes, enabled politicians to ignore all meaningful structural reforms and the resulting wealth and income inequality has greatly contributed to political movements of populism and discontentment. But none of this is acknowledged by Powell, or Draghi, or Kuroda, the central bank overlords. Or Yellen or Bernanke. Or anyone in power. None of them bear any responsibility right? Who does? Nobody of course.

But who pays for it all? Everybody, for when the next recession comes corporations will have the greatest incentive ever to automate, downsize, apply new AI technologies etc. The signs are already there, just check the banking sector. There’s always money for dividends and buybacks and CEO pay raises, now watch what we can do with downsizing.

Careful folks, 4% unemployment is not the place to be complacent about coming job gains. Watch those layoff announcements, they are a’ rising, slowly, but surely.

Reality check:

No new highs without dovish capitulating central banks. No new highs without artificial liquidity and/or intervention. 10 years after the financial crisis this remains the primary price discovery dynamic.

Markets remain entirely dependent on running to their central bank daddies for help every time they get in trouble. This is the expectation central banks have set and this is the role they continue to play. Markets are spoiled trust fund kids. The age of permanent intervention began in 2008. The correction of 2018 just made central bankers finally admit it as they failed to stay non accommodative for not even 3 months before caving.

10 years after the financial crisis we are staring at a global economic slowdown with central banks never having normalized and, as a result, having a lot less ammunition at their disposal to react. The global economy is riddled with the highest debt loads ever, while the few have become richer than ever.

Think people are angry now? Watch the next recession.

The saddest part in all this is that the financial crisis gave a loud enough warning and a call to action. We, as a global society, wasted the opportunity for meaningful structural reform, instead we doubled down on the system that was already in place. And now we’re left hoping, hoping that the Powell put will be as good as the Yellen put and the Bernanke put before that. Cause the central bank put is all that’s standing between markets and the great unwind.

Rant Over.

*  *  *

For the latest public analysis please visit NorthmanTrader. To subscribe to our market products please visit Services.


via ZeroHedge News Read More Here..

MSM "Fact Checkers" Reveal Their Anti-Trump Bias With Absurd SOTU Analysis

It’s no secret that the mainstream media largely dislikes Donald Trump. Dubbed the “opposition party” by former Trump chief strategist Steve Bannon, outlets from CNN to MSNBC to the Washington Post and beyond have made minimal efforts to hide their bias against for the President.

With the Mueller investigation looking more and more like the “hoax” Trump claims it is, the MSM passed through the Overton window of credibility long ago – as scores of “anonymously sourced” bombshells have failed to find their target. The result? They’re simply turning Trump into a billionaire martyr.

And now – as columnist David Harsanyi notes in the New York Post – the MSM has resorted to pedantic fact checks of Trump’s State of the Union address that make them look as desperate as they are biased to in their efforts to bring Trump down. 

If media wants to challenge the context and politics of Republican arguments, that’s their prerogative. There are plenty of legitimately misleading statements worthy of fact-checkers’ attention. Yet, with a veneer of impartiality, fact-checkers often engage in a uniquely dishonest style of partisanship. And State of Union coverage gave us an abundance of examples of how they do it: –New York Post

Politico – for example, insinuated that President Trump was lying about the sexual assault of “one in three women” who make the long journey north to cross into the United States illegally. Not so fast – Drumpf, said Politico, which deemed Trump’s statement only “partly true.” It’s actually 31 percent of women, who are sexually abused based on a 2017 Doctors Without Borders report. 

Whether Doctors Without Borders’ scary statistic is accurate or not, is one thing. Trump, however, was being called out for asserting that “one in every three” illegal immigrants has been abused attempting to cross the border rather than “33.333 percent of women” — probably a rounding error in the poll. It is almost surely the case that every past president and every politician has used “one-third” or “one-half” rather than a specific fraction, and walked away without being fact-checked. New York Post

The New York Times flatly interjected their opinion into their “fact check” of Trump’s SOTU address – ruling that Trump’s contention that there is “an urgent national crisis” at the border is “false” because illegal border crossings have been declining for two decades, and Customs and Border Protection agents had arrested just half of the number of people per month as they had in the mid-2000s. 

As Harsanyi points out – the Times can’t simply define a national emergency using pretzel logic

Even if those numbers are correct, there is no way to fact-check urgency. After all, a lessening crisis doesn’t necessarily mean it isn’t a pressing one. We’ve seen a steep decline in gun violence over the past 30 years. Would The New York Times ever “fact-check” a Democrat who argued that gun violence was an “urgent crisis” of public safety? Of course not. But this fluctuating standard allows journalists to “fact-check” any subjective political contention they desire.

If I claim that socialism is the greatest threat to American freedom and prosperity, I may well be right. I may have a lot of historical and economic evidence to back up my assertion. You can argue that I’m wrong. You can lay out statistics that attempt to prove me wrong. You can call me crazy. But you can’t produce an unbiased “fact-check” establishing that my opinion is conclusively false. You’re just writing an op-ed piece. New York Post

NPR was clearly triggered when President Trump praised the number of women in Congress – tweeting: “FACT CHECK: President Trump praised the record number of women in Congress, but that’s almost entirely because of Democrats, not Trump’s party.” 

This isn’t a “fact check.” Trump said: “And exactly one century after Congress passed the Constitutional amendment giving women the right to vote, we also have more women serving in Congress than at any time before. That’s great. Very great. And congratulations. That’s great.”

Trump didn’t take credit for the number of women in Congress whatsoever, and ” their nitpicking created the impression that somehow Trump had misled the public. He did not,” writes Harsanyi. 

The Washington Post, meanwhile, “offered a number of egregious examples of outright misinformation.”  

In one of them, reporter Meg Kelly claimed that, “Abortion legislation in New York wouldn’t do what Trump said.” There are a number of words in her post intimating that Trump lied about the New York and Virginia late-term abortion bills, but none of her words debunk Trump’s core contention. Ramesh Ponnuru has a good rundown here.

Here’s what Trump said: “Lawmakers in New York cheered with delight upon the passage of legislation that would allow a baby to be ripped from the mother’s womb moments before birth. These are living, feeling, beautiful, babies who will never get the chance to share their love and dreams with the world. And then, we had the case of the governor of Virginia where he stated he would execute a baby after birth.” New York Post

And here we get back to the pretzel logic – or a “clue” that you’re about to read a deceptive fact check on the topic of abortion, according to Harsanyi. When an author prefaces their comment by writing that “only” [insert small percentage] of viable babies are aborted, it serves to downplay the “fact check” with their own justification. 

“Indeed,” Kelly writes, “only 1.3 percent of abortions — or about 8,500 a year — take place at or after 21 weeks, according to 2014 data from the Center for Disease Control and Prevention and the Guttmacher Institute.” This number, as Ponnuru points out, is almost surely low. Whatever the case, Trump never claimed “most” abortions were post-20 weeks. Whether 8,500 or 15,000, thousands of viable babies are being aborted. No fact-checker would ever point out that only .0001 percent of legal gun owners commit crimes when talking about more firearm restrictions (and, yes, that’s an approximation).

And despite the Post‘s efforts to downplay Trump’s abortion comments – they did not “fact check” him whatsoever. Nothing the Post wrote countered Trump’s claim that abortion on demand until (and after) crowning is legal in New York. 

How often it happens is up for debate. What the bill says is inarguable,” writes Harsanyi. 

In summary – the mainstream media’s blatantly biased “fact checks” have once again revealed their failure to remain objective, honest and factual. And while those on the left who are deeply mesmerized by partisan echo chambers may let these critiques slide – critical thinkers, particularly swing voters, will see right through the joke that has become modern journalism. 

https://platform.twitter.com/widgets.js
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