Checkers Vs Chess: The Reason Europe Is Imploding On "Russian" Sanctions

The West's leaders are full of lawyers, Putin is ex-KGB. If ever there was an example of him playing chess while the West plays checkers, the following chart is it. Despite Western protestations that its sanctions will hurt Russia more than Europe this morning, one look at Europe's huge net trade balance with Russia for food and it's clear who is really going to feel the pain. As Martin Armstrong noted previously, "Putin has responded to [Western] sanctions as any really smart chess-player would - you get the supporters of your adversary to jump-ship." What better way to crack the 'stop-Putin' alliance than to force Europe into trade deficits and squeeze their economies (especially Germany)?

Martin Armstrong Warns Italy's Recession Means "The End Of Democracy"

For the second time this year, Italy experienced a slump of its gross domestic product by 0.3% year on year. The economic data is so bad that Italy's economy is the smallest in 14 years. The advantage of Italy and its legendary corruption has been its equally inefficient government that has allowed the people to just ignore it and get along with life in the real world of the underground economy. The solution for Italy? The politician’s dream. Brussels want to take away the right of the Italian people to vote on anything meaningful. Italy is where the Republic was born. The land that had inspired the American Revolution against monarchy is now itself surrendering the last vestige of democratic process yield to the growing tyranny of Brussels under the pretense of saving the Euro.

70% Of Americans Believe Illegal Immigrants Threaten Way Of Life

In recent weeks, Bloomberg Businessweek reports, President Obama and congressional Republicans have begun to offer the same simple-sounding solution for dealing with the flood of children crossing the U.S. border alone: Send the kids home. But with tens of thousands of them churning through the system, some just toddlers, the logistics are overwhelming. Since October, more than 57,000 children have arrived by themselves, most from Central America (as we show below), and 22,000 more have been detained with their parents (mostly children under 12). The American people appears considerably more concerned than the politicians - a Reuters/Ipsos poll shows 70% of Americans - including 86% of Republicans - believe undocumented immigrants threaten traditional U.S. beliefs and customs.

First BRICS Bank, Now BRICS Food Bank

Despite President Obama's dictating that Russia is increasingly "isolated," it appears they have found a whole new set of friends to play with in the global trade sandpit. In retaliation to Western sanctions, Putin yesterday unveiled a total food import ban from all sanctioning nations, and, just as the BRICS created their own 'IMF-lite' away from Washington's prying eyes, Russia plans to substitute banned goods with not just domestic supplies but imports from Latin America, China, and several other nations. Agriculture Minister Nikolai Fedorov said "no food shortages are expected," but more isolation for the West...

US Begins Dropping Humanitarian Supplies In Iraq, It May Also be Dropping Bombs

While we await the latest nationally televized appearance of the teleprompter telling Obama just what the US is doing in Iraq at some point over the next 60 minutes, there are conflicting reports about what may or may not be happening in Iraq right now. On one hand there appears to be confirmation that the US has begun airdropping humanitarian supplies to the thousands trapped in the Iraqi mountains, as we earlier reported would likely happen. On the other hand, the NYT also blasted that the US is now also bombing ISIS targets in Iraq.

It Begins: Canada To Send Military Equipment To Ukraine

Moments ago Bloomberg reported, citing Defense minister Rob Nicholson speaking in Trenton, Ontario, that Canada, a NATO member, will send military equipment to Ukraine. Ukraine will in turn supposedly use supplies to protect eastern border Nicholson speaking to reporters, although perhaps one should ask ISIS where US military equipment that was meant for Al-Qaeda, pardon, Syrian rebels to dethrone Assad ended up...

High-Yield Bond Funds Smashed With Record $7.1 Billion Outflows

High-Yield bonds funds saw record outflows of $7.1 billion this week - the fourth week running - as the slow-motion train crash in credit starts to accelerate. As Forbes reports, the huge redemption blows out past the prior record outflow of $4.63 billion in June 2013. The full-year reading is now deeply in the red, at $5.9 billion, with 43% of the withdrawal tied to ETFs. Simply put, everyone in the bond market knew 'not' to sell because liquidity is simply not there; but game theory's first mover advantage finally broke as retail investors run and create a vicious cycle of 'liquid' ETF selling forcing 'illiquid' underlying bond selling... just as we warned here and here. Why should equity investors care? See chart below...

Retiring Early Is Un-American

Retiring early means calculating more years into the equation - how much you'll need to fund your lifestyle for as long as you (and your partner) will live. "Once you know your "number," there are only two other steps to commit to memory: Start saving and stop spending. Put another way: Live not just within your means, but well below," says Rick Miller, president of Sensible Financial Planning. Living "well below" your means really is un-American – it goes against the fundamental American cultural values of consumerism and debt.

Bonds & Bullion Bid As Dow Dumps To 4-Month Lows Amid Geopolitical Chaos

A day dominated by geopolitical headlines saw stocks hit 4-month lows, gold jump to 3-week highs, and bond yields tumble to 14-month lows. The Dow made new "sell in May" lows today, now -1.5% from end-April (joined in weakness since then by the Russell). The S&P 500 broke its 100-day moving-average (and did not bounce) as USDJPY broke the critical 102.00 level. The Dow stalled at its 200-day moving-average (16343).  10Y Treasury yields continued to plunge pressing a 2.41% handle - new 14-month closing low-yields. Gold jumped above $1315 closing near the highs of the day (and silver above $20). The USD ended up on the day but JPY carry unwinds continued. VIX broke back above 17 (and remains inverted for the 10th day in a row). Equities continues to catch down to high-yield credit's weakness. A late-day buying-panic, sparked by VIX-slamming, was triggered as S&P futures broke 1900.

If You Like Your Exemption, Keep It: 90% Of Uninsured Won't Pay Obamacare Penalties

No insurance, no penalty appears to be Obamacare's new meme as The Wall Street Journal reports almost 90% of the nation's 30 million uninsured won't pay a penalty in 2016 because of a growing batch of exemptions to the health-coverage requirement. In the interests of socialism, the Obama administration has provided 14 ways people can avoid the fine (on top of exemptions carved out under the 2010 law for groups including illegal immigrants, members of Native American tribes and certain religious sects). The exemptions are worrying insurers, as they could make it easier for younger, healthier people to forgo coverage, leaving the pools overly filled with old people or those with health problems. That, in turn, could cause premiums to rise.

Here's The Dumbest Thing You'll Hear All Week

In an unbelievable display of arrogance and self-importance, the Australian government recently announced the most sweeping changes to their national security legislation since 9/11. Basically they’re telling everyone that they should just be afraid… and that the government must spy on citizens in order to protect them. This is how it always happens... and we can watch yet another country slide rapidly into a police state.

Steve Liesman's Worst Nightmare: Consumer Credit Growth Tumbles, Misses By Most In 8 Months

Growth in Consumer Credit dropped for the 2nd month in a row (at $17.25bn) missing expectations by the most since November 2013. The March/April credit impulse has now completely faded. Given that "debt is the great bridge between working hard and playing hard in this country," it would seem this news will disappoint Steve Liesman. Revolving credit dropped to its lowest since February as spend-what-you-don't-have appears to be fading also...

The Financialization Of American Business: How Cheap Debt Fuels The Bubble, Not Growth

Monetary central planning is failing to achieve Keynesian “escape velocity” because it has deeply impaired the engines of capitalist enterprise. Nowhere is this more apparent than in the grotesque financialization of American business that has occurred since the 1980s. As usual, this deformation is rooted in the massive growth of debt carried by non-financial businesses. At the end of the day, there is no mystery as to why trend GDP growth has fallen to just 1.8% per annum since the year 2000 - a rate which is barely half its trend during the previous half-century. Monetary central planning inherently deforms market capitalism by flooding the business sector with cheap debt, thereby turning it into an engine for the redistribution of existing wealth rather than the generation of new growth, jobs and enterprise.

CDC Director Frieden Testifies About "Combating The Ebola Threat" - Live Feed

Top U.S. health official are testifying at a congressional hearing to assess the threat from the Ebola virus ravaging Africa. Chairman Smith begins: “The Ebola virus had been contained in one small area of Central Africa for years. Even when there was an outbreak, such as in Uganda, international cooperation was able to prevent a broader spread of the disease. This hearing will examine current international efforts to meet the challenge of the worst outbreak of Ebola in history.” Speakers include CDC Director Tom Frieden...

Did The Creator Of The Experimental Ebola Drug Joke About Culling 25% Of The World's Population?

Charles Arntzen is the Regents’ Professor and Florence Ely Nelson Presidential Chair of the Biodesign Institute at Arizona State University. Dr. Arntzen is known as a pioneer in the development of edible plant-based vaccines, and he has also been a key collaborator on what appears to be a promising new Ebola drug. The only problem is this guy is kind of creepy. In fact, he was apparently caught in 2012 joking about culling 25% of the world’s population to solve the challenging problem of feeding 8 billion people.

Don't Fight The Fed - Stocks Tumble Post-Yellen "Stretched Valuations" Warning

"Don't fight the Fed," unless she tells you to sell your favorite idiot-maker momo stock. For a few days, investors were anxious after Yellen's July 15th warning, then a barrage of disgruntled asset-gatherers explained how 'she knows nothing about stock valuations' (but we must trust her every word on the economy). Now - 3 weeks later, Dow and Trannies are down 4%, S&P and Russell down 3%, and Nasdaq down 2% from her warnings... still wanna fight the Fed?

Pentagon Confirms Russia Violated US Airspace 16 Times In Last 10 Days, "Not Just Training Missions"

Having admitted that a Russian fighter jet flew within 30 meters of a US spy plane (on the border of Russia) a month ago, The Washington Times reports defense officials confirming Russian strategic nuclear bombers conducted at least 16 incursions into northwestern U.S. air defense identification zones over the past 10 days - an unusually sharp increase in aerial penetrations.

"Iraq Is A Catastrophe", Obama May Announce Iraq Airstrikes Imminently, NYT Reports

White House: Iraq is approaching a "catastrophe"

Just in case there weren't enough potential GDP-boosting war hotzones around the world, Obama is now preparing to go back to ground zero, Iraq, where the NYT just reported he is "considering airstrikes or airdrops of food and medicine to address a humanitarian crisis among as many as 40,000 religious minorities in Iraq who have been dying of heat and thirst on a mountain top after death threats from the Islamic State in Iraq and Syria, administration officials said on Thursday."