Archive - Aug 10, 2015

Being a citizen in the American corporate state is much like playing against a stacked deck: you’re always going to lose. The game is rigged, and “we the people” keep getting dealt the same losing hand. Even so, most stay in the game, against all odds, trusting that their luck will change. The problem, of course, is that luck will not save us.

Trainwreck? Rail traffic fell in July from a year ago as WSJ reports an increase in container volumes couldn’t offset a steep decline in oil and coal shipments according to the Association of American Railroads. Despite almost constant reassurance that plunging oil prices are 'unequivocally good" for America, AAR analysts warn "railroads are overexposed, relative to the economy in general, to the energy sector," adding that traffic data indiates "growth is slow and the recovery could be threatened by an interest-rate increase by the Fed."

For the past 8 years, the US consumer has dutifully spent, spent and then spent some more. This all came to a screeching halt earlier today when courtesy of the latest New York Fed Survey of Consumer Expectations, we learned that the US consumer has finally tapped out.  Households reported that they expected to increase their spending by just 3.5% in the next year, a major drop from the 4.3% the month before. This was the lowest reading in series history.

The concept of government is that the people grant to a small group of individuals the ability to establish and maintain controls over them. The inherent flaw in such a concept is that any government will invariably and continually expand upon its controls, resulting in the ever-diminishing freedom of those who granted them the power.

Given everything we know about China’s propensity for censorship, you can imagine that one thing you would not want to do if you were, say, "one of the most recognizable faces" on a state-run television station, is call Mao Zedong "an old son of a bitch," but that’s exactly what Bi Fujian did back in April, and now Beijing’s media watchdog has "recommended" that Bi be "severely punished."

“He should [have] let the south go,” Lerner wrote in response to a friend who disparaged Texas as a “pathetic” state. “We really do seem to have [two] different mind sets.”

The up and coming generations have plenty to blame on the "baby boomer" generation and the scores of bad fiscal and monetary policy decisions that has robbed them of their future. The job of each generation is to leave the world in a better place than they found it. It is clear, we failed.

A new academic study from researchers at Stanford, UCLA, and the Arison School of Business in Israel suggests that ETFs are contributing to a lack of liquidity for the stocks they hold. Essentially, the argument is that increased ETF ownership leads to wider bid-asks, less analyst coverage, and higher correlations with broad market moves.

Normally, candidates that are not part of the “establishment” do not pose much of a threat. In order to win elections in this country, especially on a national level, you need name recognition and you need lots and lots of money. Donald Trump has both, and no matter what you may think of him you have to admit that he has star power. And he was never supposed to run for president. You see, the truth is that only members of “the club” are allowed to play. The elite very carefully groom their candidates, and they are usually able to maintain a very tight grip on both major political parties. This two-headed abomination that we call a “two party system” is in reality just a one party system.

It appears - according to the narrative assigned by the mainstream media - that any weakness in asset prices should be bought because China will inevitably have to unleash pure QE (as opposed to the modestly watered down version currently underway) or some combination of RRR cuts. This is 'western' thinking as the go to policy of the rest of the world's central banks has been - put on pants, print money, paper over cracks, proclaim victory. However, in China there is one big problem with this... stoking inflation... and most crucially the social unrest concerns when suddenly a nation of newly minted equity losers can no longer afford their pork (which is facing record shortages)...

Do you remember when real reporters existed? Those were the days before the Clinton regime concentrated the media into a few hands and turned the media into a Ministry of Propaganda, a tool of Big Brother. The false reality in which Americans live extends into economic life. Last Friday’s employment report was a continuation of a long string of bad news spun into good news.

Ever aware of the potential for change, GOP Presidential candidates face a tough balance currently. As The Washington Post explains, should Trump's 'burn-it-down' aggression ever cross one too many lines, around 20% of Republicans will be looking for someone else to support - someone who didn't think they were a total idiot for supporting Trump in the first place. Based on their responses and statements, WaPo has quantified the "Trumpness Factor" for each of the GOP candidates...

"It is our natural right to reflect our interest in the libor fixing process."

"Yes, ok mate, I am heading out for a run, enjoy, talk tom, get those fixings down."

Given today's extremely technical trading, we thought it appropriate to lay out exactly where the next stop hunts (up and down) will be...

Google is adopting this structure in order to make clearer the difference between its main business and longer-term endeavors, as Page and Brin take on more strategic roles, while leaving operational management to trusted deputies.