• Tim Knight from...
    09/16/2014 - 21:37
    What if it had gone differently? What if, six years ago, in the throes of the financial crisis, the political leaders in D.C. had decided that enough was enough, and they were going to seize the...

Corruption

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Japan’s Keynesian Demise: A Cautionary Tale For Our Times





The ragged Keynesian excuse that all will be well in Japan once the jump in the consumption tax from 5% to 8% is fully digested is false. Here’s the problem: this is just the beginning of an endless march upwards of Japan’s tax burden to close the yawning fiscal gap left after the current round of tax increases, and to finance its growing retirement colony. There is no possibility that Abenomics will result in “escape velocity” Japan style and that Japan can grow its way out of it enormous fiscal trap. Instead, nominal and real growth will remain pinned to the flatline owing to peak debt, soaring retirements, a shrinking tax base and a tax burden which will rise as far as the eye can see. Call that a Keynesian dystopia. It is a cautionary tale for our times. And Japan, unfortunately, is just patient zero.

 
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2016 Presidential Hopeful, Texas Governor Rick Perry Indicted For Abuse Of Power





Texas Governor, and 2016 Presidential hopeful, Rick Perry has been indicted by a grand jury. Rather ironically, as AP reports, Perry carried out a threat to veto funding for state prosecutors investigating public corruption, promising publicly to nix $7.5 million over two years for the public integrity unit unless District Attorney Rosemary Lehmberg (who pled guilty to drunk driving) resigned. He was indicted by an Austin grand jury on felony counts of abuse of official capacity (maximum punishment 5-99 years in prison) and coercion of a public servant (2-10 years in prison). Perry is the first Texas governor indicted since 1917. Full indictment below. We have one word... oops!

 
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Frontrunning: August 11





  • Maliki digs in as U.S. pushes for new Iraq government (Reuters)
  • Ukraine's forces say close to taking rebel-held Donetsk (Reuters)
  • Anger Over Michael Brown Shooting Leads to Looting (WSJ)
  • German Economy Backbone Bending From Lost Russia Sales (BBG)
  • Kinder Morgan to Consolidate Empire (WSJ)
  • Early Failure to Detect Gaza Tunnel Network Triggers Recriminations in Israel (WSJ)
  • You’ll never guess how much BuzzFeed raised from Horowitz (FT)
  • The dumb money is now chasing Chinese oligarchs: Norway’s Wealth Fund Buys $576 Million of Mayfair Area (BBG)
  • Clinical trial to start soon on GSK Ebola vaccine (Reuters)
  • No drone skeet shooting any time soon (WSJ)
 
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Organized Community Defense Is America’s Last Hope





When people ask for solutions to the collapse of America, often they are looking for a predetermined top-down magic bullet response. There is no such thing, nor will there ever be. There is no scenario in which we will escape unscathed. There is no cartoon-land happy ending at the finale of this story. The “solution,” as it were, is ultimately something that many do not want to hear about; namely, hard work, sacrifice and a willingness to put everything on the line for the future. Our only advantage is that we still have some time, and any time is better than no time.

 
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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.

 
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WTF Headline Of The Day: US Forfeits $480 Million Loss On Nigerian Dictator Scam





While we assumed everyone knew that correspondence from Nigerian leaders requesting funds were always fradulent, it appears the US government decided the opportunity was worth the risk...

*U.S. FORFEITS OVER $480 MILLION STOLEN BY FORMER NIGERIAN DICTATOR

The DoJ describes it as "the largest forfeiture ever." Oh well - we hear Rwanda is looking to issue some bonds..."We might go for double that or more, up to $1 billion."

 
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Futures Tumble On Abysmal European Data, Euro Stocks Turn Red For 2014; German 2Y Bunds Negative





With everyone focused on China as the source of next systemic risk, most forgot or simply chose to ignore Europe, which through Draghi's verbal  magic was said to be "fixed." Or at least everyone hoped that the rigged European bond market would preserve the "recovery" illusion a little longer giving the world some more time to reform pretend it is doing something to fix it. Turns out that was a mistake, confirmed earlier not only by the plunge in German Factory Orders which cratered -4.3%, down from 7.7% and below the 1.1% revised, and UK Industrial production which missed expectations of a 0.6% boost, rising only 0.3%, but most importantly Italy's Q2 GDP shocker, which as we reported earlier, dropped for the second consecutive quarter sending the country officially into recession. As a result, European stock markets, Stoxx600, has joined the DJIA in the red for the year while Germany's 2 Year Bund just went negative on aggressive risk aversion, the first time since 2012.

 
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Mapping China's Zhou Yongkang's Web Of Power, Money, & Connections





Having folded like a lawn chair over economic reforms, and instead done the exact opposite with a QE-lite, Xi Jinping is pressing ahead with his anti-graft, power-centric corruption probes. We recently introduced Zhou Yongkang, China's ex-defense chief, whose net worth is estimated at a stunning $14 billion... but as The South China Morning Post exposes, his sprawling empire runs deep...

 
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Quote Of The Day: John Kerry Hypocrisy Edition





John Kerry is at it again... Speaking at the US-Africa Summit, the US Secretary of State explained:

*KERRY STRESSES NEED FOR COUNTRIES TO OBSERVE HUMAN RIGHTS

Which is odd, given that: a) Obama admitted we tortured some "folk"; and b) when countries refuse to observe human rights - the US drones them?

 
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The "Do-Over" - Groupthink, Mass Delusion, And "Hell To Pay"





"By all measures, the U.S. stock market is currently frothy," warns Paul Singer, founder of $24.8 billion hedge fund firm Elliott Management, ominously concluding, "The apparent stability of the world financial system is superficial – financial asset prices are not real, the equilibrium is temporary, the lack of volatility is a trap, and when the whole thing goes haywire, there will truly be hell to pay."

 
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