Thomas Sowell Asks "Who Is Racist?"

"I am so old that I can remember when most of the people promoting race hate were white;" Thomas Sowell begins in this poignant essay amid the protests across the nation this evening. Apparently other Americans also recognize that the sources of racism are different today from what they were in the past. According to a recent Rasmussen poll, 31 percent of blacks think that most blacks are racists, while 24 percent of blacks think that most whites are racist. The time is long overdue to stop looking for progress through racial or ethnic leaders. Such leaders have too many incentives to promote polarizing attitudes and actions that are counterproductive for minorities and disastrous for the country.

China's Goal(seek)dilocks: GDP "Just Right"

Despite the Schrodinger PMIs that the nation continues to pump-out in less and less transparent nature, and the leadership's seeming desire to use the early years to 'soft-land' the bubble-economy created by their predecessors, it seems the most recent trade data (disappointment) was more an indication of reality (along with the recent jawboning) than the hopes of so many talking-heads in the West. GDP met lowered expectations of 7.5% YoY (but is down from last month's and lowest since Sep12), Industrial Production missed expectations for the 4th month in a row (8.9% vs 9.1% YoY expectations) at its lowest since April 2009, and Retail Sales beat expectations by the most in 9 months! Of course, the 'goldilocks' will be seen as instantly indicative of either 'all is well with global growth so don't sweat it' or of a need for an avalanche of stimulus to save the world, but as we noted here, China is way past the point of worrying about a few percentage points of GDP. AUD popped higher before the data and leaked back on the goldilocks reality; S&P futures testing spike highs from Friday; and gold pressing higher to $1295.

Why Tonight's China GDP Number Is Meaningless: "The Economy Is Already In A Financial Crisis"

When it comes to economic data, in China whatever the Politburo's Goalseek.xls model says is what goes, and credibility - especially in the context of a historic CNY1 trillion deleveraging - is irrelevant. But one reason why today's GDP print is even more irrelevant than ever, is becuase as Xia Bin, an economist with the State Council's Development Research Center and government advisor, said "Arguments about whether China will grow at 7% or 7.5% are "pointless" because the economy is already in a financial crisis which may only worsen if the government doesn't address the country's crippling debt problem."

The Top-Down "Un-Reality"

US equities closed the week at new all-time highs - and yay-verily the world of long-only asset-gethering talking heads celebrated this as in some way confirming their long-held 'belief' that the US is the cleanest dirty shirt and where-else are you going to invest (you dummy!!). Of course, reality is far different - as Seth Klarman noted, if it's all so great then why did Bernanke need to stick-save us again this week? The bottom-line from the top-down is that the US is in fact the 2nd worst performing macro-economy of the year of the majors (2nd only to China) compared to expectations. What the following charts indicate though, is an interesting divergence between macro-reality and market-perception that is evident among the nations of the world that print money to save themselves... and those that are not (yet)...

Bill Black: The Banks Have Blood On Their Hands

In the US, our regulators have publicly embraced a "too big to prosecute" doctrine. We are restraining, underfunding and dismantling regulatory oversight in the interests of short-term stability for the status quo. Which as a criminologist, Black knows with certainty creates an environment where bad actors will act in their self-interest with assumed (and likely real, at this point) impunity... And so there is no more destructive asset against trust than elite fraud.

Guest Post: The Wages Of Overconfidence Is Success

Many of us have worked with or for individuals who have confidence in wild disproportion to their actual talent.  They bubble endlessly with exaggerated claims of their skills and achievements, and congratulate themselves publicly for even the most trivial of accomplishments. It’s as if by broadcasting the certainty of their own superiority, they can somehow possibly mask their own often lackluster record of performance and dearth of talent. Yet of course, it works quite well! The specter of watching mediocre self-promoters brashly stomping their unremarkable way to the top of some pecking order, org chart, or political office is overfamiliar to most all of us...

Obama Statement On Zimmerman Verdict: "Death Of Trayvon Martin Was A Tragedy"

"The death of Trayvon Martin was a tragedy. Not just for his family, or for any one community, but for America.  I know this case has elicited strong passions.  And in the wake of the verdict, I know those passions may be running even higher.  But we are a nation of laws, and a jury has spoken.  I now ask every American to respect the call for calm reflection from two parents who lost their young son.  And as we do, we should ask ourselves if we’re doing all we can to widen the circle of compassion and understanding in our own communities.  We should ask ourselves if we’re doing all we can to stem the tide of gun violence that claims too many lives across this country on a daily basis.  We should ask ourselves, as individuals and as a society, how we can prevent future tragedies like this.  As citizens, that’s a job for all of us.  That’s the way to honor Trayvon Martin."

The Bottom-Up "Miracle"

As we head into the heart of earnings season, amid the drastic slashes in guidance that we have seen in the last few weeks (for example here and here), we thought the following six charts may shed some further light (in addition to this eye-opening chart) on what is going on under the covers of the multiple-expanding, fundamentals-don't-matter, unreality that is the US equity market...

European Political Crisis Spreads - Leaked Texts Prove Rajoy Link To Illegal Party Funding

Amid the turmoil in Portugal, the Barcenas-Affair in Spain had dropped to the back-pages of the European press... until now. The illegal party-funding that ex-Treasurer Barcenas is now whistle-blowing on has been linked directly to Spanish prime-minister - despite Rajoy's ongoing denial of everything - via text messages uncovered by Spain's El Mundo newspaper. The opposition leadership is demanding Rajoy's "immediate resignation," noting he "is incapacitated," amid the damage that the texts - which prove an ongoing and direct link to the man at the hub of the funding debacle for at least the last two years (when Rajoy has expressly denied any relationship). "You cannot govern well," another congressman noted, when there is "very clear data" linking Barcenas with the PP (Rajoy's party) and the alleged illegal funding. Only a few screen shots have been released of the dozens of texts that the paper has apparently received...

Israeli Subs Destroy Russian Missiles In Syria; Russia Holds Largest Post-Soviet Military Drill

While the (chemical) dust over Syria has yet to settle, one country is not waiting around before in tried and true fashion it kicks the proverbial hornets nest. Only this time the recipient of Israeli aggression is not some small country that can hardly afford to defend itself against made in the US, state-of-the-art weapons: it is Russia, if only indirectly. Last Friday, July 5, in the fog of the Egyptian coup, a contingent of 50 Russian-made Yakhont P-800 anti-ship missiles at the Syrian port-city of Latakia was destroyed. It has since become clear that the attack was launched by none other than an Israeli Dolphin-class (German-made) submarine according to a report in the British Sunday Times, which in turn contradicts a previous report that the attack had been the work of the Israeli air force. Fast forward one week when we learn that in a perfectly unrelated event, a massive military drill involving naval forces, strategic bomber aircraft, missile-defense teams, tactical and strategic missiles, infantry, and armored vehicles took place in Russia's far east: a perfectly unrelated exercise that just happened to be the largest  in the post-Soviet period.

Assad Army Discovers Syrian Rebels' Chemical Weapons Cache

While it has become difficult to distinguish fact from fiction from mere propaganda when it comes to events in Syria, the general plot line is a simple one: "X/Y has chemical weapons so the ["free and democratic world"|Russia] has the moral authority to provide military assistance to Y/X." Recently, it was the "free and democratic world" that decided that the general public has forgotten the epic Iraq WMD disinformation campaign, and ploughed into a decision to arm the Syrian rebels who are really nothing more than Qatar-funded mercenaries led by Al Qaeda, as it was finally ascertained that it was the Assad regime that had used chemical weapons. Well, the "free and democratic world" may have some serious explaining to do if the latest news out of Syria is confirmed, namely that the the Syrian army has discovered rebels' storehouse in the Damascus area, where toxic chemical substances, including chlorine, have been produced and kept, State TV reported.

Oops.

Greenwald: "The US Government Should Be On Its Knees Every Day Praying That Nothing Happens To Snowden"

Edward Snowden may be America's persona most non grata in the entire world, but he has an insurance policy against "accidents": a treasure trove of supposedly damaging secrets about the US that will hit the public domain if something were to happen to the 30 year old whistleblower. A trove is so damaging that according to Glenn Greenwald, Snowden "poses more of a threat to the U.S. than anyone in the country’s history." Well, maybe a threat to the "government" which now only represents the interests of various corporations and Wall Street, but certainly not to what the US was supposed to be before it was hijacked by special interests, lobbies and the creature from Jekyll Island.

10 Reasons Why Sharknado Is Coming To The Global Economy

Have you ever seen a disaster movie that is so bad that it is actually good? Unfortunately, we are witnessing something just as ridiculous in the real world right now.  In the United States, the mainstream media is breathlessly proclaiming that the U.S. economy is in great shape because job growth is "accelerating" (even though we actually lost 240,000 full-time jobs last month) and because the U.S. stock market set new all-time highs this week.  The mainstream media seems to be absolutely oblivious to all of the financial storm clouds that are gathering on the horizon.  The conditions for a "perfect storm" are rapidly developing, and by the time this is all over we may be wishing that flying sharks were all that we had to deal with.