New York Times

What will $1 million buy in New York City? A diamond-encrusted Cartier men’s watch. A small fleet of 2014 Bentley Continentals. Or maybe your very own parking spot in SoHo... "Parking is in serious demand and has proven an excellent investment with no sign of a decline."

Plus: Exclusive Interview with FBI Whistleblower

For the terrorist group known as the Islamic State, Syria and Iraq were a good place to start their campaign, but in order to survive and prosper it knew from the outset that it had no choice but to set its sights on the ultimate prize: the oil fields of Saudi Arabia.

The memory hole is working overtime in the USA zeitgeist these days. Shit happens and a week or so later, it unhappens. So it goes, as the late, great Vonnegut always said. All of these stories have something in common: tons of unanswered questions, which the news media shows no interest whatsoever in following up on. And no consequences. People die, nations rise and fall, money disappears, and everybody forgets. The memory hole is the truest signifier of the times we live in: the Age of Anything Goes and Nothing Matters... but that may be changing.

After being solidly ignored for weeks, suddenly the Scottish independence referendum is all anyone can talk about, manifesting itself in a plunge in the GBPUSD which ha slide over 100 pips in the past 24 hours, adding to the slide over the past week, and is now just above 1.61, the lowest since November 2013. In fact, the collapse of the unionist momentum has managed to push back overnight news from Ukraine, major Russian sanction escalations, Japan GDP as well as global trade data on the back burner. Speaking of global trade, with both China and Germany reporting a record trade surplus overnight, with the US trade deficit declining recently, and with not a single country in the past several month reporting of an increase in imports, one wonders just which planet in the solar system (or beyond) the world, which once again finds itself in a magical global trade surplus position, is exporting to?

Google "grocery prices last 12 months" and it's post after post beginning with "Consumer prices rise" or "Rising food prices bite." One person who is happy about this is the New York Times’ Paul Krugman, for instead of being like Europe, that is “clearly in the grip of a deflationary vortex,” America only teeters on the edge of a general price plunge. “And there but for the grace of Bernanke go we,” writes the voice of Grey Lady economics wisdom. However, Mr. Krugman shouldn’t declare defeat to the deflationists just yet. Bankers are learning to say ‘yes’ again, and that means velocity and price increases.

Has there ever been a nation more hooked on drugs than the United States? And we are not just talking about illegal drugs – the truth is that the number of Americans addicted to legal drugs is far greater than the number of Americans addicted to illegal drugs. They trusted that their doctors would never prescribe something for them that would be harmful, and they trusted that the federal government would never approve any drugs that were not safe. And once the drug companies get you hooked, they often have you for life. Very powerful people will often do some really crazy things when there are hundreds of billions of dollars at stake. The following are 22 facts about America’s endless pharmaceutical nightmare that everyone should know...

Here are some of the choice excerpts from the man who is baffled by a new effort to punish him, proud of past triumphs and incensed by criticism: “You’ll have to ask those people, ‘What do you have against Mozilo, what did he do?’” he said in a 30-minute call with Bloomberg News before Labor Day, one of his few interviews since the firm’s downfall. “Countrywide didn’t change. I didn’t change. The world changed.”  Mozilo doesn’t understand why he and his firm, blamed by lawmakers and authorities for lax underwriting and predatory lending, have been seen as villains. “No, no, no, we didn’t do anything wrong,” he said, adding that a real estate collapse was the root of the crisis. “Countrywide or Mozilo didn’t cause any of that.” Yes, the Moz talks about himself in the third person.

Don’t be surprised to lose if you don’t make an effort at being competitive. And if you go out of your way to make yourself less competitive, expect to lose. If that sounds like simple common sense, that’s because it is. But it’s also exactly what the US has been doing for years...

What is hard to measure is often hard to manage. Employers using new technologies need to base hiring decisions not just on education, but also on the non-cognitive skills that allow some people to excel at learning on the job; they need to design pay structures to retain workers who do learn, yet not to encumber employee mobility and knowledge sharing, which are often key to informal learning; and they need to design business models that enable workers to learn effectively on the job (see this example). Policy makers also need to think differently about skills, encouraging, for example, industry certification programs for new skills and partnerships between community colleges and local employers. Although it is difficult for workers and employers to develop these new skills, this difficulty creates opportunity. Those workers who acquire the latest skills earn good pay; those employers who hire the right workers and train them well can realize the competitive advantages that come with new technologies.

The Islamic State in Syria (ISIS) is being touted as the newest “threat” to the American homeland. We are told by everyone from the President on down that if we don’t attack them – i.e. go back into Iraq (and even venture into Syria) to root them out – they’ll soon show up on American shores. ISIS didn’t blast Sykes-Picot to pieces: we did, and now we must live with the consequences. Nemesis has taken her pound of flesh. The best course now is to learn the lesson every child has to absorb before he can attain adulthood in more than merely a physical sense: actions have consequences. Applied to the Middle East, this lesson can only have one meaning: stay out and keep out.

• Jackson Hole Theme: Labor Markets Can’t Take Higher Rates (BBG), or anything else for that matter
• Kidnappers free American missing in Syria since 2012 (Reuters)
• More unpatriots: Burger King in merger talks with Canada's Tim Hortons (Reuters)
• California Quake to Cost Insurers Up to $1 Billion, Eqecat Says (BBG)
• Congo declares Ebola outbreak in northern Equateur province (Reuters)
• Missouri Governor Defends Ferguson Prosecutor (BBG)
• Kuroda Douses Japan Stimulus Expectations (WSJ)
• London Jihadi Call Vies With Banks in Canary Wharf Shadow (BBG)
• Netanyahu Signals Expansion of Air Attacks in Gaza (WSJ)
• Libya's Islamist Militias Claim Control of Tripoli (WSJ)

Janet Yellen has essentially confirmed QE’s demise; good riddance. Unfortunately, I don’t think that is the final end of QE in America, just as it hasn’t been the end time after time in Japan (and perhaps now Europe treading down the same ill-received road). The secular stagnation theory, that we think has been fully absorbed in certainly Yellen’s FOMC, sees little gain from it because, as they assume, the lackluster economy is due to this mysterious decline in the “natural rate of interest.” Therefore QE in the fourth iteration accomplishes far less toward that goal, especially with diminishing impacts on expectations in the real economy, other than create bubbles of activity (“reach for yield”) that always end badly. What Krugman and Summers call for is a massive bubble of biblical proportions that “shocks” the economy out of this mysterious rut, to “push inflation substantially higher, and keep it there.” In other words, Abenomics in America. Japanification is becoming universal, and the more these appeals to generic activity and waste continue, the tighter its “mysterious” grip.

UPDATE: Official Russian denial - no YouTube - *CHURKIN: NO PROOF OF RUSSIAN ARTILLERY IN UKRAINE

The Russian military has moved artillery units manned by Russian personnel inside Ukrainian territory in recent days and is using them to fire at Ukrainian forces, New York Times reported, citing NATO officials. The Russian move, NYTimes reports, represents a significant escalation of the Kremlin’s involvement in the fighting there and comes as a convoy of Russian trucks with humanitarian provisions has crossed into Ukrainian territory without Kiev’s permission. The US is now getting involved, as WSJ reports,

• Pentagon calls on Russia to 'Remove Vehicles Immediately' From Ukraine
• Kirby says "very concerned" by Russian convoy in Ukraine.

Ukrainian Security Service chief Valentyn Nalyvaichenko said the move amounted to a "direct invasion," and The Pentagon has warned "failure to [remove its vehicles] will result in further costs and isolation."

The 30 statistics that you are about to read prove beyond a shadow of a doubt that the middle class in America is being systematically destroyed.  Once upon a time, the United States had the largest and most prosperous middle class in the history of the world, but now that is changing at a staggering pace.  Yes, the stock market has soared to unprecedented heights this year and there are a few isolated areas of the country that are doing rather well for the moment.  But overall, the long-term trends that are eviscerating the middle class just continue to accelerate.