Oct 032017
 
 October 3, 2017  Posted by at 9:28 am Finance Tagged with: , , , , , , , ,  


Fan Ho Obsession 1964

 

Who Will Be There To Buy When Everyone Wants To Sell? – Howard Marks (FuW)
The Pricing of Risk is Kaput (WS)
Art Cashin: “I’ve Never Seen Anything Like Today’s Market Before” (ZH)
What You Are Not Being Told About The Economy – Steve Keen (RT)
An Accountant Smells a Rat in Our Global Credit Bubble (WS)
26 Recession-Free Years Hide a Darker Picture for Australia (BBG) >
Russia’s Rush For Gold Sees Record Reserves For Putin Era (II)
Fall of the Great Pumpkin (Jim Kunstler)
Spain’s Crisis Deepens as Catalonia Secession Clock Ticks Down (BBG)
Catalonia Set For General Strike Over Independence Poll Violence (AFP)
100,000s Of Puerto Ricans To Flee To Florida, New York (ZH)

 

 

 

 

A point I made again recentlly “It will continue to go up, but I will get out in time.» People overestimate their ability to get out in time. Who will be there to buy when everyone wants to sell? That’s wishful thinking.”

Who Will Be There To Buy When Everyone Wants To Sell? – Howard Marks (FuW)

It would be a dangerous bet to say interest rates are going to stay low forever, but I don’t see many people taking that bet. And you see, even if interest rates were to stay where they are, that would argue for P/E ratios to stay where they are. And if they do, then stocks will only appreciate at the same rate as earnings, which is not really fast; there would be no multiple expansion. This market is not built on some euphoric view of the future, but mainly on the unwillingness to accept zero or negative returns on cash and safe instruments. It’s based on the view that there is no alternative: people are afraid to be out of the market. But then again, a perceived lack of alternatives is not a good argument for chasing yield and taking big risks. That’s why I think this is the time to turn cautious.

It’s not smart, but people think that’s what they have to do now. You remember Chuck Prince, the CEO of Citigroup, who in July of 2007 said «when the liquidity dries up, this will end badly, but as long as the music is playing, you have to dance?» What does that even mean? People always say they’ll stay in the market, thinking it has further to go, but if it starts to turn down they will get out. Maybe that’s what people are thinking in today’s stock market: «It will continue to go up, but I will get out in time.» People overestimate their ability to get out in time. Who will be there to buy when everyone wants to sell? That’s wishful thinking.

[..] I see a lot of worries. One example: What’s going to happen when central banks start unwinding their balance sheets? We have no clue. There is no historical precedent for the measures they used to stimulate the economies in the past years, so we don’t know what will happen when they unwind them. If QE was stimulative, won’t the unwinding of it be the opposite of stimulative? I don’t know where the money came from for the QE programs, and I don’t know where the money will go to next. We don’t know what it will mean for interest rates and inflation.

Another worry is the low economic growth, combined with politics. All these right-wing populist movements – what are the implications of that? This is not imaginary. Where will the person with a low education level get a job in ten or twenty years, when all the cars are self-driving and all the stores have no clerks? I don’t know what the solution is. But I see a lack of political leadership around the world. Another worry concerns our pension systems. In the US and in other countries, defined benefit systems are hundreds of billions of dollars in the red. What’s going to happen to the people who expect to get their promised retirement payments? But today, nobody’s talking about the problems in our pension systems.

Read more …

“..when markets can no longer price risks, they cannot price anything at all because the price of risk underlies all prices in the financial markets.”

The Pricing of Risk is Kaput (WS)

US Treasury Securities with longer maturities fell this morning, with the 10-year Treasury yield rising above 2.37% early on and currently trading at 2.34%. This is still low by historical standards, and it’s still in denial of the Fed’s monetary tightening: Four rate hikes since it started this cycle, and the QE unwind has commenced as of today. But it cannot hold a candle to the Draghi-engineered negative-yield absurdity still unfolding in the Eurozone. The average yield of junk bonds denominated in euros hit a new all-time record low at the close on Friday of 2.30%. Let that sink in a moment. These euro corporate bonds are rated below investment grade. Companies, unlike the US, cannot print their own money to prevent default.

There is little liquidity in the junk bond market, and selling these bonds when push comes to shove can be hard or impossible. The reason they’re called “junk” is because of their high risk of default. And yet, prices of these junk bonds have been inflated by the ECB’s policies to such a degree that their yield, which falls as prices rise, is now lower than that of 10-year US Treasury securities that are considered the most liquid securities with the least credit risk out there. The average yield of the euro junk bonds is based on a basket of below-investment-grade corporate bonds denominated in euros. Issuers include junk-rated American companies with European subsidiaries – in which case these bonds are called “reverse Yankees.”

They include the riskiest bonds. Plenty of them will default. Losses will be painful. Investors know this. It’s not a secret. But they don’t mind. They’re institutional investors plowing other people’s money into these bonds, and they don’t need to mind, but they have to buy these bonds because that’s their job. This chart, based on BofA Merrill Lynch Euro High Yield Index Effective Yield via the St. Louis Fed, shows that the average euro junk bond yield is on the way to what? Zero?

During the peak of the Financial Crisis, the average junk bond yield hit 25%. During the dog days of the euro debt crisis in the summer of 2012, when Draghi pronounced the magic words that he’d do “whatever it takes,” these bonds yielded about 9%. The yield dropped below 5% in October 2013, for the first time ever. This juxtaposition of the already low 10-year US Treasury yield and the even lower euro junk bond yield creates one of the most fascinating WTF-charts for our amusement at central-bank absurdist policies – and we’d be laughing at these bond investors gone nuts, if it weren’t so serious:

.. this is Draghi’s ultimate accomplishment in his nutty bailiwick: The total destruction of the market’s risk-pricing mechanism at the expense of other people’s money – this includes pension funds and life insurance companies that play a large role in Europe’s private pension system. They have to buy corporate bonds. Their beneficiaries that paid into the systems will have to bear the costs in future years. And then there’s the comforting thought that when markets can no longer price risks, they cannot price anything at all because the price of risk underlies all prices in the financial markets.

Read more …

“..when we had the taper tantrum they hadn’t even done anything yet, they’d just threatened to taper..”

Art Cashin: “I’ve Never Seen Anything Like Today’s Market Before” (ZH)

Market veteran Art Cashin, the head of NYSE floor operations for UBS, made an interesting observation earlier today just minutes before the close, as US stocks headed for another record finish after shrugging off the worst mass shooting in US history. Asked by CNBC’s Kelly Evans to explain how US stocks have continued to outperform while the 10-year Treasury yield has remained anchored below 2.5%, Cashin acknowledged that, during a career that’s spanned more than six decades, he’s never seen anything like today’s market. “I’ve been doing this for over 50 years and I’ve never seen anything like it so it is rather odd.” And given global stocks’ strong performance this year, with markets weathering a series of political crises, natural disasters, terror attacks and other nominally destabilizing events (with a little help from central banks, of course) – Cashin says the outlook isn’t as dire as some would believe.

“Right now, Europe’s doing all right emerging markets are okay, and maybe they’re not going to take away the punchbowl that quickly – so we’ll see,” Cashin said. In September, the Fed suggested that while it would likely raise interest rates more quickly than previously believed during the coming quarters, median forecasts for the Fed funds rate in 2019, as well as the longer-run median target, declined compared with a set of forecasts released in July. Looking ahead to the fourth quarter, the most pressing questions that investors should be asking themselves is ‘is this the quarter where tapering – or the expectation of further tapering – finally triggers a market correction.

“What’s really going to be interesting to watch in this final quarter, is will there be an impact of quantitative tightening. As Peter Boockvar points out…it’s only going to be a token amount. But when we had the taper tantrum they hadn’t even done anything yet they’d just threatened to taper. When asked what it would take to spark a meaningful correction in stocks, Cashin said he expects investors will take notice once the 10-year yield climbs above 3%. “I think we’ve got to get a bit higher. Probably up around 3% you start to get everybody’s attention and you’ll start to hear that in the conversation more and more.”

Read more …

Are you rational? Economics is not.

What You Are Not Being Told About The Economy – Steve Keen (RT)

As Karl Marx’s ‘Das Kapital’ turns 150 and the global financial crisis enters its tenth year, we ask why it is that we are still no closer to creating an economy that actually works. Perhaps more importantly, why do mainstream economists continue to miss the fundamental drivers of financial instability? Host Ross Ashcroft talks about what’s next for the global economy with Professor Steve Keen, an economist who correctly predicted the financial crisis and the author of ‘Debunking Economics.’

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“Economists can’t see it. They can’t model money and credit. ”

An Accountant Smells a Rat in Our Global Credit Bubble (WS)

Twenty years ago Doug Noland was so worried about imbalances surrounding the dot.com boom that he began to title his weekly reports “The Credit Bubble Bulletin. Years later, he warned the world about the impending 2008 crisis. However a coming implosion, he says, could be the biggest yet. “We are in a global finance bubble, which I call the grand-daddy of all bubbles,” said Noland. “Economists can’t see it. They can’t model money and credit. However, to those outside the system, the facts are increasingly clear.” Noland points to inflating real estate, bond and equity prices as key causes for concern. According to the Federal Reserve’s September Z.1 Flow of Funds report, the value of US equities jumped $1.5 trillion during the second quarter to $42.2 trillion, a record 219% of GDP.

Noland may be right. A report by the International Institute of Finance released in June estimated that global government, business and personal debts totaled $217 trillion earlier this year. That’s more than three times (327%) higher than global economic output. Adding to the complexity is the fact that not all debts are fully recorded. For example, according to a World Economic Forum study, the world’s six largest pension saving systems – the US, UK, Japan, Netherlands, Canada and Australia – are expected to experience a $224 trillion funding shortfall by 2050. Noland’s warnings come during a time of exceptional public trust in governments, central banks, regulators and other institutions. Market volatility is trending at near record lows. In June, Federal Reserve Chair Janet Yellen spoke for many when she said that she did not see a financial crisis occurring “in our lifetimes.”

So why would Noland, who during his day job runs a tactical short book at McAlvany Wealth Management, see things that government, academic, and central bank economists don’t? One possibility is because Noland, who studied accounting and finance in college and began his career as a CPA at Price Waterhouse, is not an economist. He is thus not burdened with the “dismal science’s” limitations. Although Noland eventually completed an MBA and some doctoral studies, he was never forced to buy into the econometrics groupthink that plagues the profession. Noland is thus free to incorporate historical, financial, geographical and other data into his analyses. Another possible reason is that Noland (unlike almost all professional economists who missed both major market implosions/recessions of the last two decades) doesn’t hide it when he makes a bad call.

Read more …

 

 

But Australians won’t believe it until it hits them in the head.

26 Recession-Free Years Hide a Darker Picture for Australia (BBG)

The global crown for the longest stretch of uninterrupted economic growth is within sight for Australia. But it’s limping to the line as policy paralysis weighs on the nation’s prospects. Twenty-six years without recession have put Australia within two years of overtaking the Netherlands’ record growth streak and government, central bank and economist forecasts all suggest it’ll take the mantle. After all, the economy has a head start with 2.5% growth virtually baked in – 1.5% from population gains that are among the developed world’s quickest and 1% from resource exports feeding Asia’s giant economies. Yet the reliance on rapid immigration is straining infrastructure, while mining profits fuel riches for stakeholders but do little for the vast majority of Australians living in major cities.

Meantime, wages are barely growing, households carry some of the world’s heaviest debt loads, and productivity gains from the economic reforms of the 1980s and early 1990s have petered out. There’s been no major economic reform since the turn of the century, with just about every attempt reversed or cannibalized by toxic politics. And the impact is starting to show. Just when the economy needs growth drivers outside of mining, a slide in global rankings for innovation and education suggest living standards could decline. The miracle economy that shrugged off the global recession is turning mediocre. “Now that we don’t have the benefit of the mining boom, there’s nothing really that replaces it in terms of driving economic activity,” said Jeremy Lawson, chief economist at Aberdeen Standard Investments in Edinburgh and a former Reserve Bank of Australia economist.

“The really big task of governments over the next 5 to 10 years is to deal with these big structural issues that Australia is facing. Potential growth is relatively weak.” A decade of political infighting has seen the nation change prime ministers five times since 2007 and sidelined substantive policy debate. Meanwhile, attempts at reform have been held hostage by populists and single-issue parties who’ve harnessed voter frustration with mainstream politicians to take the balance of power in parliament’s upper house. That political dysfunction is threatening the nation’s prospects. A policy vacuum around energy has seen electricity prices surge to among the highest in the world, despite Australia holding some of the largest coal and gas reserves on the planet.

Read more …

“The gold rush is allowing the Bank of Russia to continue growing its reserves while abstaining from purchases of foreign currency for more than two years. ”

Russia’s Rush For Gold Sees Record Reserves For Putin Era (II)

Vladimir Putin is doing his part to keep the upswing in gold alive. Since the Russian president went on a geopolitical offensive in Ukraine in 2014, the haven asset had its first annual gain in four years in 2016 and is on track for another in 2017. A beneficiary of economic and political perils from North Korea to Brexit, it’s among the top-performing commodities this year. Meanwhile, the Bank of Russia has more than doubled the pace of gold purchases, bringing the share of bullion in its international reserves to the highest of Mr Putin’s 17 years in power, according to World Gold Council data. In the second quarter alone, it accounted for 38pc of all gold purchased by central banks. The gold rush is allowing the Bank of Russia to continue growing its reserves while abstaining from purchases of foreign currency for more than two years.

It’s one of a handful of central banks to keep the faith as global demand for the precious metal fell to a two-year low in the second quarter. But what may matter most is that gold is as geopolitics-proof an investment as any in the age of sanctions and a deepening rift with the US. “Gold is an asset that is independent of any government and, in effect, given what is usually held in reserves, any Western government,” said Matthew Turner, metals analyst at Macquarie Group in London. “This might appeal given Russia has faced financial sanctions.” Besides being the largest official buyer of gold, Russia is also among the world’s three biggest producers, with the central bank purchasing from domestic miners through commercial banks and not in the open market. Since starting to accelerate bullion purchases in 2007, Russia’s holdings have more than quadrupled to 1,556 tonnes at the end of June, just behind China and more than Turkey, India and Mexico combined, bringing its share in Russia’s $427bn (€361bn) reserves to near 17pc.

Read more …

 

 

“Trump travels there this week. That may be exactly the moment that the Deep State moves to take him down.”

Fall of the Great Pumpkin (Jim Kunstler)

Welcome to the witching month when America’s entropy-fueled death-wish expresses itself with as much Halloween jollity and merriment as the old Christmas spirit of yore. The outdoor displays alone take on a Babylonian scale, thanks to the plastic factories of China. I saw a half-life-size T-Rex skeleton for sale at a garden shop last week surrounded by an entire crew of moldering corpse Pirates of the Caribbean in full costume ho-ho-ho-ing among the jack-o-lanterns. What homeowner in this sore-beset floundering economy of three-job gig-workers can shell out four thousand bucks to decorate his lawn like the set of a zombie movie? The overnight news sure took on that Halloween tang as the nation woke up to what is probably a national record for a civilian mad-shooter incident.

So far, fifty dead and two hundred wounded at the Las Vegas at the Route 91 Harvest Festival (one up in fatalities from last year’s Florida Pulse nightclub massacre, and way more injured this time). The incident will live in infamy for maybe a day and a half in the US media. Stand by today as there will be calls far and wide, by personas masquerading as political leaders, for measures to make sure something like this never happens again. That’s rich, isn’t it? Meanwhile, the same six a.m. headlines declared that S &P futures were up in the overnight markets. Nothing can faze this mad bull, apparently. Except maybe the $90 trillion combined derivatives books of CitiBank, JP Morgan, and Goldman Sachs, who have gone back whole hog into manufacturing the same kind of hallucinatory collateralized debt obligations (giant sacks of non-performing loans) that gave Wall Street a heart attack in the fall of 2008.

Europe’s quaint doings must seem dull compared to the suicidal potlatch of life in the USA, but, believe me, it’s a big deal when the Spanish authorities start cracking the heads of Catalonian grandmothers for nothing more than casting a ballot. The video scenes of mayhem at the Barcelona polls looked like something out of the 1968 Prague uprising. And now that the Catalonia secession referendum passed with a 90% “yes” vote, it’s hard to imagine that a good deal more violent mischief will not follow. So far, the European Union stands dumbly on the sidelines. (For details, read the excellent Raul Ilargi Meijer column on today’s TheAutomaticEarth.)

[..] Finally — well, who know what else may pop up now — there is the matter of Puerto Rico. Halloween there is not like New England, with our nippy fall mornings, steaming mugs of hot cider, and quickening fall color. It will remain 90-degrees-plus down there in the fetid, stinking ruins, with lots of still-standing water, broken communications, shattered supply lines, and very little electricity. FEMA and the US Military may be doing all they can now, but they must be on watch for the ominous blossoming of tropical disease epidemics. The story there is far from over. Trump travels there this week. That may be exactly the moment that the Deep State moves to take him down.

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Catalonia wants to talk. But it will no longer accept many of the things it would have before Sunday.

Spain’s Crisis Deepens as Catalonia Secession Clock Ticks Down (BBG)

In Madrid, Barcelona, Bilbao and beyond, the question is the same: Now what? Sunday’s vote for independence in Catalonia, one of Spain’s most populous and prosperous regions, has thrust the country into its gravest political crisis since the days of the dictator Francisco Franco. Few see an easy way out. The results of the referendum give Prime Minister Mariano Rajoy stark choices – try to deal a blow to the independence movement by suspending Catalonia’s semi-autonomous status, or meet the secessionists halfway and start talks with Catalan President Carles Puigdemont. Puigdemont said the vote, rejected by the central government as illegal, justifies a unilateral declaration of independence. That could come by the end of the week, if the regional parliament agrees.

The European Union refused to recognize the rebel region’s bid, but Spanish bonds and stocks fell Monday as the risks of a breakaway rose. The clash puts Rajoy in a tight corner. Head of a minority government that relies on support from regional parties to rule, he has pledged to protect Spain’s territorial integrity. His main ally in parliament, Ciudadanos party leader Albert Rivera, called on the prime minister to invoke a never-before-used article of the 1978 constitution and pull Catalonia’s special regional standing, which gives it certain administrative powers. “It’s the moment to act with calm but with firmness,” said Rivera, who is Catalan, after meeting with Rajoy on Monday. Rivera said an independence declaration may be 72 hours away and suggested invoking Article 155 would cut off any attempt to make such a move.

But Pedro Sanchez, head of the main Socialist opposition party, said after his own meeting with Rajoy that the central government should hold talks with the secessionists. While Sanchez made no mention of Article 155 in the statement he issued, socialists in Catalonia said the party wouldn’t support the prime minister taking that step. That means Rajoy will have little political cover if he opts to suspend Catalan self-government – the most powerful card he has left. The crisis has already caused him problems: Last week, he had to withdraw plans to present his 2018 budget after allies in the Basque PNV party withheld their support as they criticized his position on Catalonia.

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The Guardia Civil will have to leave Catalonia at some point. And what then?

Catalonia Set For General Strike Over Independence Poll Violence (AFP)

Large numbers of Catalans are expected to observe a general strike on Tuesday to condemn police violence at a banned weekend referendum on independence, as Madrid comes under growing international pressure to resolve its worst political crisis in decades. Flights and train services could be disrupted as well as port operations, after unions called for the stoppage to “vigorously condemn” the police response to the poll, in which Catalonia’s leader said 90% of voters backed independence from Spain. Barcelona’s public universities are expected to join the strike, as is the contemporary art museum, football club FC Barcelona and the Sagrada Familia, the basilica designed by Antoni Gaudi and one of the city’s most popular tourist sites. “I am convinced that this strike will be widely followed,” Catalan leader Carles Puigdemont said ahead of the protest.

The central government has vowed to stop the wealthy northeastern region, which accounts for a fifth of Spain’s GDP, breaking away from Spain and has dismissed Sunday’s poll as unconstitutional and a “farce”. Violent scenes played out in towns and cities across the region on Sunday as riot police moved in on polling stations to stop people from casting their ballots, in some cases charging with batons and firing rubber bullets to disperse crowds. UN rights chief Zeid Ra’ad Al Hussein said he was “very disturbed” by the unrest while EU President Donald Tusk urged Madrid to avoid “further use of violence”. The European Parliament will hold a special debate on Wednesday on the issue. “We call on all relevant players to now move very swiftly from confrontation to dialogue. Violence can never be an instrument in politics,” European Commission spokesman Margaritis Schinas said, breaking weeks of virtual EU silence on the Catalan issue.

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“Florida Gov. Rick Scott has declared a state of emergency in Florida..”

100,000s Of Puerto Ricans To Flee To Florida, New York (ZH)

As mayors of cities with large Puerto Rican populations continue to advocate for federal assistance to help with the resettlement of hundreds of thousands of Puerto Ricans who are expected to temporarily seek shelter with friends and families in the US, Florida Gov. Rick Scott has declared a state of emergency in Florida, allowing state agencies to take extraordinary measures to assist families that will soon be arriving in droves to cities like Orlando and Miami, both of which feature large Puerto Rican populations. The Orlando Sentinel reports that Scott announced that disaster relief centers will be set up at Orlando International Airport and in Miami to help those seeking refuge in Florida. “Puerto Rico is absolutely devastated and so many families have lost everything,” Scott said in a released statement.

“Our goal is to make sure that while [Puerto Rican] Governor [Ricardo] Rosselló is working to rebuild Puerto Rico, any families displaced by Maria that come to Florida are welcomed and offered every available resource from the state.” The relief center at OIA, and two others at Miami International Airport and the Port of Miami, open Tuesday, according to a release from Scott’s office, just days after Puerto Rican airports reopened following the devastation caused by Hurricane Maria. [..] Scott’s emergency order will allow state agencies broad autonomy to waive regulations and do whatever is necessary to help Puerto Ricans. Importantly, it could also help bring more federal funding to help the state cope with aid efforts.

State lawmakers have said they expect at least 100,000 Puerto Ricans to flee to Florida because of Maria, forcing the state to step up its education, housing and job-placement offerings. It’s expected that some of those displaced by the storm could resettle permanently, as the reconstruction effort in Puerto Rico is expected to take months, if not years. State Rep. Carlos Guillermo Smith, D-Orlando, said the Legislature should hold a special session, as he estimates hundreds of thousands of Puerto Ricans are coming to Florida. The 2018 regular session starts in January. “FL needs 2 deal w/humanitarian crisis + over 100K Boricuas who’ll seek refuge here right now, not in Jan.,” he tweeted.

We now wait to hear from New York Gov. Andrew Cuomo and New York City Mayor Bill De Blasio. NYC officials have said more than 100,000 Puerto Ricans could arrive in NYC alone.

Read more …

 

 

 

Nov 062016
 
 November 6, 2016  Posted by at 10:54 am Finance Tagged with: , , , , , , , , ,  


Ryan Redhawk Standing Rock 2016

David Stockman Warns Both Trump And Clinton Could Lead To 25% Sell-Off (CNBC)
Election Chaos Fears Have Preppers Stockpiling Survival Food (CNBC)
Exposing John Podesta (TeleSur)
The Secret World of the US Election: Julian Assange Talks to John Pilger (RT)
California Secession Group To Meet At State Capitol Day After Election (SFG)
Tech Is Disrupting All Before It – Even Democracy Is In Its Sights (Cadwalladr)
China Premier Li Says Economy To Maintain Steady Growth (R.)
Attempts To Cool Over-Heating Australia Property Market Are Failing (AFR)
May: Parliament Must Accept Brexit Vote Was Legitimate (R.)
Higher Prices And Rising Debt Threaten Millions In UK (G.)
Turkey Is Headed For A Bloodbath (Rubin)
Turkey Was Once A Free Society. Now It Is Rapidly Destroying Itself. (WaPo)
Germany Investigates 60 Possible Islamists In Armed Forces (R.)
German Ministry Wants Migrants Returned To Africa (R.)

 

 

“We are now in Watergate 2.0.” “Government is going to be totally paralyzed regardless of who wins..”

David Stockman Warns Both Trump And Clinton Could Lead To 25% Sell-Off (CNBC)

David Stockman, the man widely credited as the “Father of Reaganomics”, delivered an alarming message to investors. “The markets are hideously inflated,” warned Stockman on CNBC’s “Fast Money” this week. The former Director of the Office of Management and Budget under President Ronald Reagan urged investors to dump stocks and bonds ahead of the dangers that both Donald Trump and Hillary Clinton pose to markets if either is elected as President. “If you don’t sell before the election, certainly do it afterwards. Government is going to be totally paralyzed regardless of who wins,” he said. “There could be a 25% draw down on markets.” Stockman posits that, under a Clinton administration, official investigations and new hacked email disclosures from Wikileaks will be non-stop.

Furthermore, he reasoned that the “house will become a killing field” for anything Clinton is trying to do. Ultimately, Stockman said the Democrat would enter the Oval Office bruised, bloody and all but lacking in legitimacy. “For six months, or even longer, there will acrimony, there will be brinkmanship, there will be paralysis. There will be a swarm of house committees doing investigations from all of these wiki leaks!” Stockman said of Clinton’s hypothetical early days in the White House. “Therefore, there will be no baton handed off from the Fed to fiscal policy as we slide into recession,” he added.

[..] Comparatively, Stockman likes that Trump appears ready to call out the Fed and breakup the “cozy” relationship that exists between Washington and Wall Street. However, that’s where his favorable opinion of the GOP nominee ends. “I like him because he’s against the establishment, but he has no economic program. Yes, he’s a disruptor, but has nothing to disrupt with,” Stockman said. “If elected, it will be partisan warfare and a total disaster,” Stockman explained to CNBC. “Under a Trump victory, all bets are off.”

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And guns, and gold, and fuel, etc.

Election Chaos Fears Have Preppers Stockpiling Survival Food (CNBC)

In case of an election night Doomsday, preppers are running up sales of emergency survival food. While sales for “long term food” typically see an increase around natural disasters and elections, “this is more intense than what we saw in 2012,” said Keith Bansemer, VP of marketing for My Patriot Supply, a manufacturer and seller of survival food. During the previous election his company saw sales double. This time it’s triple. “We have everyone we can on the phones,” he said. “We are overwhelmed.” Purchases at other long term food supply companies are up as well. Emergency preparedness online store TheEpicenter reports a 6% uptick in year over year sales. Another company, Legacy Foods, predicts they’ll see a 1-2 week spike in sales after the election — if Hillary Clinton wins, said owner Phil Cox.

The meals, sold by the plastic bucket or tote bin, are typically dehydrated or freeze-dried food in sealed military-grade Mylar packs. Menu items include pasta primavera, Hawaiian Style Sweet n’ Sour, cheesy broccoli and rice soup, orange energy drink mix and chocolate pudding. They’re sold in bundles based on how long they’ll feed you. For $2,000 spent at Legacy Foods, you could eat three square meals a day for an entire year. That’s 1,080 servings. TheEpicenter has a 14-day supply kit for $235 that’s recently been “selling really well,” said owner Bryan Nelson. The most popular entry-level seller at My Patriot Supply is a 3-month supply for $497. It comes a in nondescript gray slim line totes bin designed to be easy to stack in the back of a closet or slip under your bed.

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Lobbyists inside the government. Good exposé.

Exposing John Podesta (TeleSur)

With the Wikileaks release of thousands of emails belonging to John Podesta, very little is known in US society about Podesta himself. While he’s maintained a low profile, John Podesta is actually considered one of Washington’s biggest players, and one of the most powerful corporate lobbyists in the world. In this episode of The Empire Files, Abby Martin explores John Podesta’s political rise, his vast network of corporate connections and his think tank “Center for American Progress.” Learn why the Podestas and the Clintons are a match made in ruling class heaven.

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“I actually feel quite sorry for Hillary Clinton as a person. Because I see someone who’s eaten alive be their ambition. Tormented literally to the point where they become sick..”

The Secret World of the US Election: Julian Assange Talks to John Pilger (RT)

Whistleblower Julian Assange has given one of his most incendiary interviews ever in a John Pilger Special, courtesy of Dartmouth Films, in which he summarizes what can be gleaned from the tens of thousands of Clinton emails released by WikiLeaks this year.

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“..our continued statehood means California will continue subsidizing the other states to our own detriment, and to the detriment of our children.”

California Secession Group To Meet At State Capitol Day After Election (SFG)

An organization hoping to facilitate the secession of California from the Union is holding a meet and greet on the Capitol steps in Sacramento next Wednesday, the day after the presidential election. The Yes California Independence Campaign, which is based in San Diego, is aiming to qualify a citizen’s initiative in 2018 to get a referendum for secession on the ballot in 2019. They’ll be in Sacramento to garner support for their initiative. “In our view,” a statement on its website reads, “the United States of America represents so many things that conflict with Californian values, and our continued statehood means California will continue subsidizing the other states to our own detriment, and to the detriment of our children.” And it appears the organization has been considering its strategy for quite a while now. On its site, you’ll find a link to a 33-page “Blue Book” wherein the organization answers any hypothetical questions about the state becoming its own country.

The details for the secession — dubbed the #CalExit — include such topics such as “Will we join the United Nations?” and “Will we have our own Olympic team?”. While the notion of an independent California does seem well-intended — points about immigration, environmental concerns, and education are thoughtful — the practicality of such a proposal is tenuous at best. Will this secession campaign be viable? In a word: No. As we know from the Civil War, just because a state wants to secede doesn’t mean the Union will let it. As Washington Post writer Philip Bump wrote earlier this year, Congress simply would not, for many reasons, allow it. “There’s no mechanism for Congress to simply say, ‘Sure, off you go.’ Once you’re in, you’re in,” he wrote. “The United States was born an expansionist enterprise, and the idea of contraction, it seems, never really came up.”

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A failed attempt at a promising topic.

Tech Is Disrupting All Before It – Even Democracy Is In Its Sights (Cadwalladr)

[..] ..what the last week of this presidential campaign has shown us is that technology has disrupted, is disrupting, is threatening to upturn the democratic process itself – the best, most stable, most equitable form of governance the world has yet come up with. In many crucial ways, it doesn’t even matter who wins on Tuesday because perhaps the best thing you can say about Trump is that if it hadn’t been him it would have been someone else. It’s the opposite of the Great Man theory of history: a misogynistic ex-reality TV star is not the game-changer here, it’s technology. Two days ago, the same hackers who took down Twitter and Netflix and the Guardian and Reddit and CNN last week in the biggest attack of its kind that the world has ever seen, started practising on a country.

Computer malware had been used to infect inanimate objects in our homes – the connected devices that comprise the so-called internet of things and that, it’s been discovered, a bit late, are hopelessly insecure. It has harnessed these to create a gigantic internet-destroying machine, the so-called Mirai botnet, and it’s honing its power. Last week it took aim at an entire country – Liberia. A huge attack was launched against the two companies that own the only fibre going into the west African country — bringing its entire internet infrastructure to a halt. The worst case scenario? That the hackers behind it are “practising” for Tuesday, when they’ll aim their massed computing power against America. This is everyday objects in our own homes, “smart” objects, intenet-enabled toasters and refrigerators.

Because this is where we are: our toasters and refrigerators may be about to be used to subvert the democratic process of the greatest democracy on Earth. And if that reads like the most lunatic sentence you’ve ever read, you maybe haven’t been paying close enough attention to 2016. Because this is possibly, finally, the year when it hits home that technology is not just some cool titanium-coloured gadget in our pockets. It’s the facilitator of the degraded news space that treats facts and lies the same. That has enabled thousands of Twitterbots – algorithms – to scrape the internet for stories about Trump and then retweet them. It was robot accounts that caused “#TrumpWon” to trend after each TV debate and allowed Trump to claim “victory”.

It’s how a man who hasn’t set foot on the street for four years, can, with just his laptop, create havoc in the critical last week of the campaign. By leaking emails that potentially implicate Hillary Clinton, Julian Assange has inserted himself – like computer malware — into the heart of the American democratic process. He’s infected it. He is, like Donald Trump, the law of unintended consequences writ large, in human form. In 2010, we didn’t mind the fact that the data he leaked was stolen. Here in the liberal press, we championed it. Because it was stolen data that served to underscore our liberal sensibilities. Or, at least mine. And now? Not so much.

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Not a cloud in the sky…

China Premier Li Says Economy To Maintain Steady Growth (R.)

China will maintain steady growth and speed up economic transformation, Chinese Premier Li Keqiang said on Saturday, adding that the world’s No. 2 economy would be able to overcome current challenges, official news agency Xinhua reported. China is trying to rebalance its economy to adapt to slower growth both at home and abroad but policymakers are struggling to contain a range of domestic issues such as surging home prices and rising debt levels. Li said China’s moves to ensure “supply-side structural reform” while appropriately expanding aggregate demand have boosted the domestic economy, and economic restructuring and liberalization have also generated new areas of growth.

Data released last month showed China posted economic growth of 6.7% in the third quarter, steady from the previous quarter, as increased government spending and a property boom offset stubbornly weak exports. China has full confidence in sustaining a “medium-high” growth rate, added Li, speaking on an official visit to Riga. He said that China has consistently followed proactive fiscal policy and prudent monetary policy, and adopted new ways of macroeconomic regulation, reported Xinhua, while using “market-oriented and rules-based methods” to defuse risk.

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“..the number of interest-only loans is rising despite banks increasing interest rates..”

Attempts To Cool Over-Heating Australia Property Market Are Failing (AFR)

Attempts to cool the property market are failing as the number of interest-only loans surges back towards last year’s highs, an analysis of new lending figures reveals. The Reserve Bank of Australia said in its quarterly statement of monetary policy on Friday that despite recent strengthening in Sydney and Melbourne, “overall conditions in the established housing market have eased relative to mid last year”. The RBA said house price inflation remained below the peaks in 2015 and there had been a drop in the share of interest-only loans which raise concerns for regulators because of the risk that borrowers will not be able to repay once the interest-only period ends. Latest analysis, however, shows the number of interest-only loans is rising despite banks increasing interest rates on some products and toughening lending terms and conditions.

Loan volumes, which dropped from 40% to 30% of total lending in the nine months to March, have since risen back to 35% following recent rate cuts and better returns from property than other asset classes, such as shares and savings accounts. Martin North, principal of Digital Finance Analytics (DFA), a consultant to commercial and investment banks, said interest-only loans did fall last year but have since started to raise again. “Loan to value ratios are indeed down but that does not change the interest-only question, how many have a repayment plan and will need one the next loan review,” he said. “The RBA is sanguine on the housing market but ignores the highest ever household debt.”

Meanwhile there are fears thousands of property investors using the interest-only loans could be caught by rules that might force them to make bigger repayments five years into the term of the loan. “There is a trap being set for the unwary investors,” warns Mr North. Some lenders, such as Bankwest, a subsidiary of the Commonwealth Bank of Australia, are telling their mortgage broker network to impose tough new conditions where a borrower wants to switch from a principal-and-interest to interest-only loan, or extend the interest-only period. Confidential documents show borrowers will be required to provide reasons for the change and “must” be informed of their potential repayment at the end of the interest-only period.

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I see a legal quagmire in your future.

May: Parliament Must Accept Brexit Vote Was Legitimate (R.)

Parliament must accept that Britain’s vote to leave the EU was legitimate and let the government get on with delivering Brexit, Prime Minister Theresa May said on Sunday. May has said she is confident of overturning a British court ruling that the government needs parliamentary approval to start the process of leaving the EU. The government, which has given little away about its plans for Britain’s future relationship with the EU, has said that having to set out a detailed negotiating strategy to parliament would put it at a disadvantage in talks with the bloc. “While others seek to tie our negotiating hands, the government will get on with the job of delivering the decision of the British people,” May said in a statement ahead of her first trade trip to India on Sunday.

“It was MPs (members of parliament) who overwhelmingly decided to put the decision in their hands. The result was clear. It was legitimate. MPs and peers who regret the referendum result need to accept what the people decided.” May will use her first bilateral trade trip since taking office to try to boost ties with India before Britain leaves the EU and to pave the way for a free trade deal as soon as possible once Brexit is completed. Parliament could in theory block Brexit as most members supported staying in the EU in June’s referendum, although it is unlikely to do so. The ruling could allow lawmakers to temper the government’s approach, however, making a “hard Brexit” – where tight controls on immigration are prioritized over remaining in the European single market – less likely.

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Of course the headline said ‘higher inflation’, but it’s not. It’s currency devaluation.

Higher Prices And Rising Debt Threaten Millions In UK (G.)

UK households should brace themselves for a combination of rising inflation, low pay and increased debt that will squeeze living standards next year and push more people into financial difficulty, experts have warned. Higher inflation, weak wage growth and rising levels of consumer debt are expected to weigh on households next year as the economy adjusts to the post-referendum environment. Joanna Elson, chief executive of the Money Advice Trust, the charity that runs National Debtline, said: “The spectre of significantly higher inflation is a real concern. Many households have still not recovered from the last big squeeze on incomes in the aftermath of the financial crisis. The risk is that this new pressure on household budgets could tip many more people into financial difficulty.

“As a society we need to prepare for what could be a significant increase in problem debt in the years ahead.” Economists at the National Institute of Economic and Social Research are predicting inflation will rise from a current rate of 1% to almost 4% in 2017, as the sharp fall in the value of the pound since the Brexit vote makes imports more expensive. Wage growth on the other hand is expected to be weaker, as firms seek to control costs amid slowing economic growth and heightened uncertainty. There are also signs that household debt is returning to highs not seen since the financial crisis. The British Bankers’ Association has said that consumer credit is growing at the fastest rate in almost a decade, as record low interest rates fuel demand for personal loans and credit cards.

Gillian Guy, chief executive of Citizens Advice, said the rise in borrowing could lead to difficulties. “More people are turning to credit … While this borrowing might be manageable now, a sudden change in circumstances could lead to debt problems.”

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Sure looks that way.

Turkey Is Headed For A Bloodbath (Rubin)

Turkish President Recep Tayyip Erdogan called the failed July 15 coup attempt a “gift from God.” The Turkish government immediately blamed Erdogan’s former ally-turned-rival Fethullah Gülen for being behind the plot, the genesis of which remains unclear. But the simple fact is that none of the material Turkish officials have given to their U.S. counterparts has yet risen to the standard of proof—let alone credible evidence—to support Erdogan’s charges. It is noteworthy that the Turkish press purports to describe the U.S. reaction as accepting of the Turkish material, yet no American officials have ever been quoted as saying anything near what the Turkish press describes. Indeed, alternate narratives about the July 15 coup attempt are equally compelling.

The only certainty is that the attempted coup became the excuse Erdogan needed or crafted in order to purge those opposed to or insufficiently enthusiastic about his agenda. Much of what has been reported in the Western media has focused on the ongoing purge of teachers and university professors. Certainly, there is a newsworthy irony to a man whose university diploma appears to be forged assuming the right to appoint university presidents through a board he has staffed with his cronies. But it is what Erdogan has done in recent days to the police that should put chills down the spines of those who care about his intent and Turkey’s future. Last week, Erdogan appointed new police chiefs for 61 out of Turkey’s 81 provinces. He also assigned 55 police chiefs to central departments that act as police professional bodies.

Some of the police chiefs Erdogan fired were religious, and some even supported him. None were followers of Gülen, simply because those who were had long ago been purged. Most of the chiefs whom Erdogan has appointed are fiercely nationalist, very young and relatively inexperienced, and so are likely to more easily defer to Erdogan’s orders. The problem seems to be not that Erdogan believed all the sacked chiefs disloyal—most were not, and he had appointed many in the first place. Rather, he considered them soft and unwilling to use the extreme violence he believes will be necessary to exert not only against Turkey’s Kurds but also against many liberal or apolitical Turks as he moves to further consolidate control.

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“..succumbing to a retro personality cult…”

Turkey Was Once A Free Society. Now It Is Rapidly Destroying Itself. (WaPo)

The speed of Turkey’s decline is mind-boggling, even when you live through its the day-to-day machinations. This week started with the Turkish government announcing plans to reintroduce the death penalty at the urging of the country’s strongman, President Recep Tayyip Erdogan, in order to garner the support of ultra-nationalists in his bid to expand the powers of his presidency. Later in the week came the arrests of the editor-in-chief and columnists of Cumhuriyet, Turkey’s oldest paper and a symbol of its fast-eroding secularism, on trumped-up charges of terrorism. And finally, Thursday night brought the detentions of Selahattin Demirtas, the charismatic leader of the country’s pro-Kurdish party, and Figen Yuksekdag, the co-leader of the party. Ten other elected Kurdish deputies were also arrested.

As I write these lines, citizens cannot communicate to organize demonstrations — Twitter is down in Turkey, Facebook is unreachable, and social media applications such as WhatsApp remain blocked. The social media crackdown is an entirely unnecessary measure; who would go out and risk arrest when there is an emergency rule and a formal ban on protests? Protests happen in free and semi-free societies — or when people have the feeling that they have a chance to make an impact. There was a time when mass urban protests shook the country and pushed the government to announce a series of reforms. Today’s Turkey is a shell of itself. No such optimism remains.

The story of Turkey is fast becoming a heartbreaking saga of a budding Muslim democracy tossing out a historic chance at progress, only to settle for a familiar pattern of Middle East despotism by succumbing to a retro personality cult. A decade ago, Turkey’s ruling Justice and Development Party (AKP) was applauded by the world for the pace of its reforms and advances toward EU membership. I myself was writing in praise of the ruling party AKP’s brand of “Muslim democrats,” which at the time seemed like a hopeful alternative to both the hard-line secularism of Kemalism and Islamic radicalism. A decade later, Turkey is barely able to hold civilized relations with its western allies, experiencing a rapid decline as rule of law, and has become a thorn in Europe’s side.

In this gradual decline, Demirtas was a breath of fresh air and one of the best things that happened in Turkish politics over the past few years. The 43-year-old former human rights lawyer commands only a small coalition of Kurds, leftists and minorities— with barely enough votes to pass the 10% national threshold. But Demirtas was effective with his powerful rhetoric on pluralism and democracy and able to project a power beyond his party’s base. This was a tale of David and Goliath. With his famous “We will not let you become an executive president” speech in March last year, and HDP’s electoral victory in June 2015 elections, Demirtas denied Erdogan the type of constitutional change and sweeping authority he wanted. With Demirtas’s detention, there are no more hurdles to Erdogan’s rise to absolute power.

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While it’s great that German military counter-espionage service is called MAD, this is false flag nonsense. No government agency would ever confirm anything on any such investigations, unless there are political reasons to do so. Merkel should not allow it. But she does.

Germany Investigates 60 Possible Islamists In Armed Forces (R.)

Germany plans security investigations of all military recruits from July 2017 after its military counter-espionage service (MAD) identified 20 Islamists in the country’s armed forces, German media group Funke reported on Saturday. A spokesman for the agency confirmed the figure, adding that 60 additional potential cases were under investigation. Draft legislation to be considered by the German parliament in the coming weeks would mandate investigations of all recruits to counter efforts by Islamic State to infiltrate the military and get weapons training, Funke Mediengruppe reported. A German Defence Ministry spokesman said existing law required investigations of soldiers after they were recruited. Before that, recruits had to provide police records and agree to unlimited access to their records in the federal register.

Recruiting offices had received an undisclosed number of queries from people who wanted to join the military for only a few months and expressed a keen interest in intensive weapons and equipment training, the MAD spokesman said. In a statement provided to the Funke media group, the agency said it was concerned about a July 2014 internet posting by Islamic State in which the group urged those with military training to join its ranks, and other calls for supporters to learn to shoot and to become familiar with weapons. German security services are on high alert after two Islamist militant attacks this summer. Almost 900,000 migrants arrived in Germany last year and while many Germans initially welcomed them, security concerns have since increased.

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And this is tied into the article above. Stoke the fear.

German Ministry Wants Migrants Returned To Africa (R.)

The German Interior Ministry wants to stop migrants ever reaching Europe’s Mediterranean coast by picking them up at sea and returning them to Africa, the Welt am Sonntag newspaper reported on Sunday. In what would be a huge shift for a country with one of the most generous asylum policies, the ministry says the EU should adopt an Australian-style system under which migrants intercepted at sea are sent for processing at camps in third countries. “The elimination of the prospect of reaching the European coast could convince migrants to avoid embarking on the life-threatening and costly journey in the first place,” the paper quoted a ministry spokeswoman as saying. “The goal must be to remove the basis for people-smuggling organizations and to save migrants from the life-threatening journey.”

The ministry’s proposal calls for migrants picked up in the Mediterranean – most of whom set off from conflict-torn Libya – to be sent to Tunisia, Egypt or other north African states to apply for asylum from there. If their asylum applications are accepted, the migrants could then be transported safely to Europe. The ministry is headed by Thomas de Maiziere, a member of Chancellor Angela Merkel’s conservative Christian Democrats. Merkel has been under fire for her open-door refugee policy, with her party losing votes to the anti-immigration Alternative for Germany (AfD) party in recent regional elections. The ministry said there were no concrete plans or discussions at EU-level about the proposal, but opposition politicians condemned the plan. Bernd Riexinger, head of the opposition Left party, said it would be “a humanitarian scandal and a further step toward elimination of the right to asylum.”

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