Federal Reserve

China is untenable in its current financial position. That is the primary problem, and so long as it remains so whatever the PBOC does will have but a fleeting impact. In more immediate terms, that is being recognized by the “dollar” run which continues to savage not just China but South America (more than just Brazil), Africa, Asia (more than China) and you might even argue Canada and Mexico. From that, we see that it isn’t China that is the problem with the “dollar”, it is the whole damn system.

"Oil goes below $40, it’s frightening for geopolitical behavior. Guess what, folks? It’s below $40 and this frightening political behavior is upon us.... We could be looking at a really ugly situation during the first quarter of 2016... I think we're going to take out the September low of the S&P500."

Rand Paul’s signature “Audit the Fed” legislation failed to garner the 60 votes needed in the Senate to move the measure forward. Of course, this is merely the latest in a never-ending series of banker victories, and a truly devastating blow against liberty, free markets, transparency and any hope for government by the people and for the people. Ensuring that light is never shined on the Fed’s shady, corrupt and unaccountable bailout activities has always been a key goal of the American oligarchy, and they succeeded once again.

After two months of sharp currency devaluation, the market was carefully watching last night's China trade data to see if the Yuan debasement had led to a positive trade outcome to the world's second largest economy, and as reported last night, it was not disappointed when China reported a December trade surplus of $60.09 billion from $54.1 billion in November, as a result of exports beating expectations and rising 2.3%, the first increase since June, while imports declined by just 4%, the smallest drop since 2014 despite China importing a record amount of oil, or 33.2 million tons, in December.

As the towering forces that are prevailing against failing global economic architecture and the pit of debt beneath that structure, as laid out below, it is clear that the 'Epocalypse' - encompassing the roots "economic, epoch, collapse" and "apocalypse" - is here, and it is everywhere. The Great Collapse has already begun. What follows are the megatrends that will increasingly gang up in the first part of 2016 to stomp the deeply flawed global economy down into its own hole of debt.

Jamie Dimon, JP Morgan Chase
Brian T. Moynihan, Bank of America
Michael Corbat, Citigroup

I am writing to you to warn you about the disruption that is about to occur in banking.

The Fed is, indeed, a political, oligarchic force, and a key part of what looks and functions like a banking cartel. During the 2007-08 financial crisis, the Fed’s true nature was clear to anyone paying attention. We can’t really know what we don’t know until we look. We owe it to the “swindled futurity” of the next generation to take a long, hard look through a full and independent audit of the Fed.

The Real Economy Is Depressed-er

The problem is that when this sucker goes down, to paraphrase the immortal words of George W. Bush, you have to wonder how much other stuff of everyday life for everyday people it will take down with it. The discovery phase of our predicament began ever so crisply in the very first business week of the new year. The loss of faith in value of all kinds will play out sequentially. It is starting in financial “assets” because so many of these are just faith-based stories, and in this quant-and-algo age it has gotten awfully hard to tell what is good story and what is just a swindle.

The risk of a fracture in risk markets when lower liquidity meets forced selling, is high in our view. Should this weakening of spread sectors in fixed income continue, we will see a further rally in Treasuries – back in Aug/ Sep, 10y USTs broke below 2%, and there is no reason we can’t get there later this month.

On Tuesday, it was announced that over seventeen million new vehicles were sold in 2015, the highest it’s ever been in United States history. While the media claims that this record has been reached because of drastic improvements to the US economy, they are once again failing to account for the central factor: credit expansion. The auto bubble has yet to burst, but its negative effects are already starting to gradually appear.

One thing my years in Washington taught me is that most politicians are followers, not leaders. Therefore we should not waste time and resources trying to educate politicians. Politicians will not support individual liberty and limited government unless and until they are forced to do so by the people.

It was an ominous beginning to what is poised to be a most tumultuous year. Market participants are quickly coming to appreciate that China does in fact matter. Few understand why. Most – from billionaires to fund managers to retail investors – will “Do Nothing.” This has worked just fine in the past – repeatedly. Not understanding and not doing anything will be detriments going forward.

High finance isn't the cure - it's the disease.

"Some people are never too old to find new ways to lose money."