Corporate America

What It Takes To Be President Of The American Police State

Today’s presidential hopefuls must jump through a series of hoops aimed at selecting the candidates best suited to serve the interests of the American police state. Candidates who are anti-war, anti-militarization, anti-Big Money, pro-Constitution, pro-individual freedom and unabashed advocates for the citizenry need not apply. The carefully crafted spectacle of the presidential election with its nail-biting primaries, mud-slinging debates, caucuses, super-delegates, popular votes and electoral colleges has become a fool-proof exercise in how to persuade a gullible citizenry into believing that their votes matter. Yet no matter how many Americans go to the polls on November 8, “we the people” will not be selecting the nation’s next president.

SEC - Do Your Job!!

It looks like the SEC is finally ready to put a stop to accounting shenanigans.

Even Bill Gross Misunderstands "Free-Market Capitalism"

We have deviated so far from free markets at this point that even the top financial minds no longer have any understanding of what is meant by capitalism. It must be true, for anyone who understands capitalism could never have published such a letter. The logic in Mr. Gross’s argument is beyond invalid, in fact, it is so ludicrous it borders on insane. We mean this quite literally...

Peak Economy - The Failure Of Fed Policy Exposed In 5 Painful P&G Charts

What is taking place in the macro economy is a true demand death spiral and this can be seen very clearly by using Proctor & Gamble’s microeconomic context as a representative model. If one steps back and simply looks at the accuracy of the world’s prominent PhD economists and market pros’ predictions over the past 7 years one can’t help but shake one’s head. And we believe investors have become wise to their ignorance.  We’ve seen a record 15 consecutive weeks of net selling of equities despite these expert pundits continuing on in their attempt to deceive investors into believing we are just one or two quarters away from that (now) proverbial recovery.

Saving Is Dumb... Say The Central Bankers

Central bankers have been waging a war against savers. What those central bankers want you to do is either (1) spend money to increase demand, or (2) buy stocks to increase capital. Well, it sure looks like American consumers are not doing the former...

Trumped! Why It Happened And What Comes Next, Part 1

First there were seventeen. At length, there was one. Donald Trump’s wildly improbable capture of the GOP nomination, therefore, is the most significant upheaval in American politics since Ronald Reagan. And the proximate cause is essentially the same. Like back then, an era of drastic bipartisan mis-governance has finally generated an electoral impulse to sweep out the stables.

The Most Dangerous Divergence

The dangerous divergence will then take a nasty turn. The bottom half of the 1% will now be as angry as the 99%. Any attempt by the establishment to further screw the nation by bailing themselves out will be met with violent disapproval. The country is a powder keg. The upcoming election is guaranteed to inflame opposing factions. A stock market crash in the next six months would sow the seeds of financial, political, and social upheaval not seen in this country since the 1960s. The established social order will be swept away in a swirl of chaos and retribution. The dangerous divergence will be resolved.

Bundesbank Defies Elites: Warns That "Plans To Abolish, Criminalize Cash Out Of Line With Freedom"

With everyone from ivory tower academics to sin-street hookers proclaiming the need for and benefits of a "war on cash" to save the world from criminals and tax-evaders (oh yeah and to stop NIRP-driven savers from hording cash and crushing central planners' dreams), it is perhaps shocking that Bundesbank board member Carl-Ludwig Thiele warned at an event this week that the attempt to abolish and criminalize cash is out of line with freedom. He said that citizens should continue to decide how and in what form they want to use their money.

America's New Impossible Trinity: You Can't Have Higher Wages, Steady Inflation And High Profits At The Same Time

America’s ongoing labour productivity slump has created a new impossible trinity – policymakers can only choose two of the following three desirable outcomes: higher nominal wage growth, steady inflation and high corporate profits. The theory behind this new ‘impossible trinity’ is intuitively simple. If workers’ wages rise faster than their productivity, the companies paying those higher wages face two choices. They can either pass on the extra costs to customers, thereby leading to higher overall prices and rising inflation, or they can absorb the extra costs resulting in lower profit margins.

SocGen: "Now We Know Why The Fed Desperately Wants To Avoid A Drop In Equity Markets"

"The catalyst for a balance sheet crisis is rarely the affordability of interest rates, so a 25bp rise in Fed rates is neither here nor there. Credit market risk is about assessing the likelihood of getting your money back. As such asset prices (i.e. equity markets) and asset price risk (i.e. equity volatility) are far bigger concerns. So all you need for a balance sheet crisis is declining equity markets, a phenomenon the Fed appears desperate to avoid. Now we know why."

Year Of The Outsider: Why Bernie Sanders' Democratic Rebellion Is So Significant

2016 was supposed to have been the year of Jeb Bush versus Hillary Clinton: the year when the established Bush dynasty confronted the upstart rival Clinton Dynasty. But the year of the insider has turned into the year of the outsider. On both sides, voters have unexpectedly given vent to thirty years of accumulated anger with neoliberalism which has downsized their incomes and hopes. Though the Republican rebellion has been more clear-cut in its dismissal of insider candidates, it is Bernie Sanders’ Democratic rebellion that is of potentially far greater historic significance.

A "Generational" Peak In Corporate Profit Margins

Falling profit margins and rising valuations (as earnings fall) make for a pretty bearish one-two punch for the stock market. Investors will surely become less eager to pay higher valuations for companies growing more slowly. That equation usually works in reverse. And there’s no reason we can see to expect these challenges to corporate profit margins to let up any time soon. The S&P 500 now trades at its highest price-to-earnings ratio since the bull market began even as the index remains well off its recent price highs. And profit margins still could have a long way to fall before even reaching their average level since 1950.