Obama Administration

It has been half a year since it was first revealed that the US has been sending non-lethal aid to the Ukraine: recall that it was in early June when Obama announced he had approved $5 million in body armor, night vision goggles and additional communications equipment for the Ukrainian military. However, as lately has been a recurrent theme, the Obama administration may not have been exactly forthright with the public or the facts. At least that is the conclusion based on hacked documents released earlier today by the Ukrainian hackers group CyberBerkut, which reveal that despite assurances to the contrary, the US has in fact been providing substantial lethal aid to Ukraine's armed forces. As Sputniknews reports, "according to the hackers, the information was obtained during the visit of US Vice President Joe Biden to Ukraine last week, when they were able to access confidential State Department documents via a mobile device of a US delegation member."

• Ferguson in Flames (Reuters)
• Ferguson Cop Told Grand Jury He Feared for His Life (BBG)
• Sharpton: Grand Jury Announcement ‘An Absolute Blow’ (Daily Caller)
• Gunshots echo as violence returns to Ferguson, protests across U.S. (Reuters)
• BoJ members warned on costs of more easing (FT)
• Hagel Exit Shows Obama Has Taken Power Away From Pentagon (BBG)
• Ukraine leader, under pressure from West, pledges new government soon (Reuters)
• Eurozone Stagnation Poses Major Risk to Global Growth, OECD Warns (WSJ)
• ECB’s Coeure Says Officials Won’t Rush as They Debate All Assets (BBG)

"In a tense confrontation with President Obama’s closest adviser on Thursday, a group of Senate Democrats accused the White House of trying to censor significant details in a voluminous report on the use of torture by the Central Intelligence Agency."

It is unclear whether the person in charge of the Lois Lerner "disappeared IRS emails" strategy was also Dr. Gruber, but whoever conceived of the idiotic idea that the fatal failure of a local hard disk means that emails which are stored on at least one server miles away, and subsequently downloaded via POP3, IMAP or some other protocol, have vaporized, clearly also relied on the stupidity (and laziness) of the American people. And like in the case of Obamacare, the lies worked, if only for a short period of time. And because when it comes to lies coming from the very top, there is never just one cockroach, and they always inevitably scatter, the latest headache for a scandal-ridden president is that Lois Lerner's email, supposedly gone in perpetuity, have mysteriously reappeared, and as the Washington Examiner reports, "up to 30,000 missing emails sent by former Internal Revenue Service official Lois Lerner have been recovered by the IRS inspector general, five months after they were deemed lost forever."

Two months ago, to much fanfare by the progressive community, HHS, if not Dr. Jonathan Gruber, were delighted to report that as of August 15, Obamacare enrollment had hit 7.3 million sign ups, well above the 7.0 million goal. Then a week ago we learned that "projection mistakes were made" after the "Obama administration revised its estimate for Obamacare enrollment, now saying - with the bruising midterms safely in the rearview mirror - that it expects some 9.9 million people to have coverage through the Affordable Care Act’s insurance exchanges in 2015, millions fewer than outside experts predicted." Fast forward to today when moments ago Bloomberg reported, that "the Obama administration included as many as 400,000 dental plans in a number it reported for enrollments under the Affordable Care Act, an unpublicized detail that helped surpass a goal for 7 million sign-ups."

• Japan Prime Minister Shinzo Abe Calls Snap Election (WSJ) - as repeatedly priced in...
• Flash Boys Raising Volatility in Wild New Treasury Market (BBG)
• Not Greece again: Greek Bailout Review Stalls as Troika Demands Final Steps (BBG)
• Iran uses China bank to transfer funds to Quds-linked companies (Reuters)
• Porn Mags With Free Madrid Theater Tickets in Tax Protest (BBG)
• Hong Kong, China stocks ease on profit-taking after stock connect launch (Reuters) - Hang Seng down 500 points in past 2 days
• Halliburton Mega-Deal Sealed by CEOs Over Coke and Coffee (BBG)
• Wall Street to Reap $316 Million From Day of Mega Deals (BBG)
• Mass murderer Charles Manson gets marriage license, state says (Reuters)

• Scuttled deals worth $580 billion put hedge funds on back foot (Reuters)
• Mounting Pressure on OPEC Spurs More Wagers on Oil Rally (BBG)
• It's not just US real estate: Chinese Students at U.S. Universities Jump 75% in Three Years (BBG)
• Frankfurt Open for Yuan Clearing as Liquidity Rises (BBG)
• Obama defends healthcare law after adviser criticism (Reuters)
• Michael Hasenstab Bets Big in Controversial Places (WSJ)
• Facebook seeks foothold in your office (FT)
• Russia Seen as Greatest Threat in Poll as Oil Erodes Putin Power (BBG)
• Falling Oil Prices Test OPEC Unity (WSJ)

Endless War Is the Agenda

Suddenly it is not just the shale companies that are starting to look impaired as a result of tumbling energy prices. According to a Deutsche Bank analysis looking at what the "tipping point" for highly levered companies is in "oil price terms", things start to get really ugly should crude drop another $15 or so per barrell. Its conclusion: "we would expect to see 1/3rd of US energy Bs/CCCs to restructure, which would imply a 15% default rate for overall US HY energy, and a 2.5% contribution to the broad US HY default rate.... A shock of that magnitude could be sufficient to trigger a  broader HY market default cycle, if materialized. "

• Moar central banks! Asian Stocks Rise Amid Stimulus Speculation; Topix Jumps (BBG)
• Syria rebels in south emerge as West's last hope as moderates crushed elsewhere (Reuters)
• Bufett's Berkshire to Buy Duracell Business From Procter & Gamble in $3B Deal (AP)
• Weak Demand, Real-Estate Slump Signal Headwinds for China (WSJ)
• China Slowdown Deepens as Leaders Said to Mull Cutting Target (BBG)
• Saudis Reject Talk of OPEC Market Share War as Oil Slides (BBG)
• Oil Tankers Stream Toward China as Price Drop Sparks Boom (BBG)

Our political-financial system has gone from the dysfunctional to the failed to the surreal. Speculation, once left to individuals and investors, is now federally sponsored, subsidized and institutionalized. When this sham finally buckles and the next shoe falls and rates do eventually rise, the stock market will tank, liquidity will die, and the broader economy will plunge into a worse Depression than before. We are not there yet because of these coordinated moves and the political force behind them. But we are on a precarious path to that inevitability.

Moments ago the Obama administration revised its estimate for Obamacare enrollment, now saying - with the bruising midterms safely in the rearview mirror - that it expects some 9.9 million people to have coverage through the Affordable Care Act’s insurance exchanges in 2015, millions fewer than outside experts predicted.  And actually it is not even 9.9 million: "Health and Human Services Secretary Sylvia Mathews Burwell said Monday the administration was aiming for 9.1 million paid-up enrollees for 2015, though the range could extend to 9.9 million, according to the agency’s analysis. Ms. Burwell said she respected the work of the Congressional Budget Office and its projections but that she believed HHS figures were based on the best and most up-to-date information." So really 8 million, or less?

Dr. Faber prudently advises clients not only to diversify among asset classes but to also to diversify within asset classes. We share this view. We advise our clients to hold gold and silver in various locations and in various forms but always in secure vaults and safe jurisdictions such as Singapore or Switzerland.

If you like your boots-on-the-ground, you can keep them... and have some more. Whether a strawman or not, Reuters reports that according to US officials, the U.S. military has drawn up plans to significantly increase the number of American forces in Iraq, which now total around 1,400, as Washington seeks to bolster Iraqi forces battling the Islamic State. The White House and Pentagon were expected to announce further details later Friday.

Based on the ridiculous, seasonally-adjusted data released day after day by the various US "Departments of Truth", also known as the BLS, the Census, the Dept of Commerce, UMichigan, ADP, the Conference Board and so on, the US economy is so strong and consumer confidence is so resurgent, America is on the verge of a second golden age. Sadly, for Obama, and last night's epic rout for Democrats, it was all a lie - a lie perpetuated by a manipulated S&P500 which hit daily record highs on unprecedented central bank liquidity injections which have now terminally disconnected the "markets" from the economy, and the welfare of the vast majority of the common "folk" - and said "folk" saw right through it.