ISIS Declares A Caliphate; Crucifies 9 Syrian Rebels For Being "Too Moderate"

Erstwhile leader of ISIS, Sheikh Abu Bakr Al-Baghdadi has declared himself Caliphate, Amir Al-Mu'minin - Leader of Believers, as militants bear down on Baghdad. This comes as the extremist group demands that all Al-Qaeda and Jihadi branches must now pledge allegiance to ISIS.. if not there are consequences as nine rebels have been crucified for being too 'moderate' or accused of receiving support from Western powers. We suspect this may slow 'demand' for Obama's latest cunning plan to offer 'aid' to only "moderate" terrorists.

Axel Merk: The Fed's Next Move? "If You're Not Concerned, You're Not Paying Attention"

"If you're not concerned, you're not paying attention" say Axel Merk, founder and Chief Investment Officer of Merk Funds (and former President of the Federal Reserve Bank of St Louis and a former FOMC member). Like many, he sees today's excessive high-price, low-volume, zero-volatility markets as an unnatural and dangerous result of misguided intervention by the Federal Reserve... "Now, the capital base and the equity of the Fed is very small. Odds are that the losses would wipe out the equity at the Fed."

When "Financial Innovation" Trumps Math

Is it any wonder we are where we are when no lesser esteemed group than The American Bankers Association Education Foundation offers this sound advice for 'divvying up a dollar'...

Martin Armstrong Warns Civil Unrest Is Rising Everywhere: "This Won't End Pretty"

The greatest problem we have is misinformation. People simply do not comprehend why and how the economic policies of the post-war era are imploding. This whole agenda of socialism has sold a Utopian idea that the State is there for the people yet it is run by lawyers following their own self-interest. Even confiscating all the wealth of the so-called rich will not sustain the system. Consequently, we just have to crash and burn and start all over again.

The Delusion Of Perpetual Motion; Bob Shiller Warns "I'm Definitely Concerned"

"I am definitely concerned. When was [the cyclically adjusted P/E ratio or CAPE] higher than it is now? I can tell you: 1929, 2000 and 2007;" warned Bob Shiller this week, adding that "it's likely to turn down again, just like it did the last two times." As John Hussman reminds us this week, stock valuations now reflect not only the absence of any interest-competitive component of expected returns, but the absence of any expected compensation for the greater risk of stocks, which is not insignificant – as investors might remember from 2000-2002 and 2007-2009 plunges, despite aggressive easing by the Federal Reserve throughout both episodes. Investment decisions driven primarily by the question “What other choice do I have?” are likely to prove regrettable.

The Great War’s Aftermath: Keynesianism, Monetary Central Planning & The Permanent Warfare State

The Great Depression did not represent the failure of capitalism or some inherent suicidal tendency of the free market to plunge into cyclical depression - absent the constant ministrations of the state through monetary, fiscal, tax and regulatory interventions.  Instead, the Great Depression was a unique historical occurrence - the delayed consequence of the monumental folly of the Great War, abetted by the financial deformations spawned by modern central banking. But ironically, the “failure of capitalism” explanation of the Great Depression is exactly what enabled the Warfare State to thrive and dominate the rest of the 20th century because it gave birth to what have become its twin handmaidens - Keynesian economics and monetary central planning. Together, these two doctrines eroded and eventually destroyed the great policy barrier - that is, the old-time religion of balanced budgets - that had kept America a relatively peaceful Republic until 1914. The good Ben (Franklin that is) said,” Sir you have a Republic if you can keep it”. We apparently haven’t.

Dear US Soldiers And Veterans: Avoid The Following Hospitals Like The Plague

The VA scandal was just the beginning. According to Internal documents obtained by New York Times, US military healthcare is "a system in which scrutiny is sporadic and avoidable errors are chronic." As the NYT reports In Military Care, a Pattern of Errors but Not Scrutiny, "the military system has consistently had higher than expected rates of harm and complications in two central parts of its business — maternity care and surgery."

Shinzo Abe And The Three Magic Arrows

Abe’s arrows have been praised in the media by the economically ignorant, the politically motivated, and those who believe prosperity is parceled out by some all powerful shaman. However, the arrows, seen in the harsh light of reality, turn out to be counterfeiting schemes, “investing” in money losing ventures, taking money from the productive, and squabbling with the neighbors. These counterproductive political actions won’t ever result in a stronger economy and have instead left the Japanese people with a crushing debt and tax burden. Don’t get taken in by the hogwash you read in mainstream media propaganda pieces. Abe’s policies are complete and utter failures.

Sarajevo Is The Fulcrum Of Modern History: The Great War And Its Terrible Aftermath

One hundred years ago today the world was shook loose of its moorings. Every school boy knows that the assassination of the archduke of Austria at Sarajevo was the trigger that incited the bloody, destructive conflagration of the world’s nations known as the Great War. But this senseless eruption of unprecedented industrial state violence did not end with the armistice four years later. In fact, 1914 is the fulcrum of modern history. It is the year the Fed opened-up for business just as the carnage in northern France closed-down the prior magnificent half-century era of liberal internationalism and honest gold-backed money. So it was the Great War’s terrible aftermath - a century of drift toward statism, militarism and fiat money - that was actually triggered by the events at Sarajevo.

"The Battle For Baghdad" - A Backgrounder On ISIS' Grand Plan

It is no secret that the extremist al-Qaeda Jihadist group known as ISIS for short, which in the span of weeks has overrun the northern part of Iraq, has grand ambitions to not only preserve its power in the north and central regions, as well as the border with Syria, but to ultimately proceed south where not only Baghdad is located but also the great energy infrastructure of the country: "the grand prize" for ISIS as it would make the extremist group viable and financially self-sustaining. But how and when will this "Battle for Baghdad" take place? For the answer we go to a backgrounder prepared by the Institute for the Study of War titled, as expected, "ISIS Battle Plan for Baghdad" which lays it out in detail.

Crushing The Q2 "Recovery" Dream In 1 Simple Chart

For a week or two, the 'news' appeared to confirm the 'hope'; faith that Q1's dysphoria would emerge phoenix-like into Q2 euphoria as a 'hibernating' American public emerging from their weather-shelter and spent-spent-spent all their borrowed-borrowed-borrowed money. That ended last week! Despite the dramatically low volume liftathon in stocks since the FOMC meeting, major risk markets around the world are cracking. European bonds and stocks had a bad week, Treasuries rallied the most in 6 weeks, and the key to it all, USDJPY, slipped to 4 week lows. Why? As the chart below shows, US macro data is collapsing again (right on cue) and stands at 2-month lows... (and is the worst-performing macro nation in the world this year!)

 

Is Obamacare Bad For US Economic Growth?

Following the rather stunning shenanigans of Q1 GDP with regard healthcare spending (as we detailed here), we thought, four years after its passage in 2010, it worth analyzing Obamacare's economic impact? Beforehand, economists generally believed that the broader coverage would raise the demand for healthcare goods and services, although there was some disagreement about related effects on healthcare inflation. In reality, as UBS notes, there was too much optimism about a positive immediate economic impact and a negative price inflation effect.

13 Ways Of Looking At Record Low Volatility

Since everyone and their pundit grandmother has opined on volatility in the past month, we will say no more and instead of Wall Street, we will do a Wallace Stevens, with 13 ways of looking at record low volatility, in charts.

"Massive Change Is Upon Us" - The Three 'E's

"It is fair to say that this particular constellation of issues, problems if you will, has never been faced before at these levels. Never," warns Chris Martenson (of The Crash Course) but what does he mean when he says "Great change is upon us." This brief condensed look at The Three 'E's of - Economy, Energy, and Environment are all one needs to understand the current situation is anything but a sustainable status quo (no matter how reassured by record high stock prices the general public may be).

Q2 Economic "Hope" Misses The Point

As individuals, it is entirely acceptable to be "optimistic" about the future. However, "optimism" and "pessimism" are emotional biases that tend to obfuscate the critical thinking required to effectively assess the "risks". The current "hope" that Q1 was simply a "weather related" anomaly is also an emotionally driven skew. The underlying data suggests that while "weather" did play a role in the sluggishness of the economy, it was also just a reflection of the continued "boom bust" cycle that has existed since the end of the financial crisis. The current downturn in real final sales suggests that the underlying strength in the economy remains extremely fragile.  More importantly, with final sales below levels normally associated with the onset of recessions, it suggests that the current rebound in activity from the sharp decline in Q1 could be transient.

Forget "The January Effect", Fall Is The Season Of Volatility

There are a few “market anomalies” affecting the seasonality of stock returns that have captured some investor attention, like the day-of-the-week effect or the January effect, for example. They are called anomalies because – according to financial theory – the market should arbitrage away the regularity of such patterns. But in reality, it does not. As Goldman notes, there are similar patterns exist with respect to market volatility; and they are equally puzzling.

"To My Fellow Filthy Rich Americans: Wake Up, People. The Pitchforks Are Coming"

To: My Fellow Zillionaires - "You probably don’t know me, but like you I am one of those .01%ers, a proud and unapologetic capitalist. I have founded, co-founded and funded more than 30 companies across a range of industries - from itsy-bitsy ones like the night club I started in my 20s to giant ones like Amazon.com, for which I was the first nonfamily investor... But let’s speak frankly to each other. Seeing where things are headed is the essence of entrepreneurship. And what do I see in our future now? I see pitchforks... And so I have a message for my fellow filthy rich, for all of us who live in our gated bubble worlds: Wake up, people. It won’t last. If we don’t do something to fix the glaring inequities in this economy, the pitchforks are going to come for us."