President Obama

Whatever the deteriorating economy could not achieve (courtesy of Ben Bernanke's relentless bubble blowing and pumping of the S&P 500-driven "wealth effect" distraction) for the past four years, one NSA whistleblower succeeded in a few short days, when earlier today, CNN - hardly a media known for its criticism of the administration - released a new poll according to which not only did Obama's approval rating drop by 8% in the past month, "one of the sharpest, fastest plunges in his presidency" to 45% from 53% (the first time the majority had a negative opinion of the president), not only did the majority find Obama to not be honest and trustworthy for the first time ever in his presidency, but Obama's support with one of his core constituencies - young Americans under 30 - imploded, plunging by 17 points. CNN adds: "That's particularly discouraging heading into 2014 because Democrats have felt they have a lock on the youth vote after the 2012 elections. "The drop in Obama's support is fueled by a dramatic 17-point decline over the past month among people under 30, who, along with black Americans, had been the most loyal part of the Obama coalition," CNN Polling Director Keating Holland said."

Almost three years ago we first highlighted the real math behind the surging entitlement class that America has become. So why does a large portion of the population choose not to work when there are many jobs available? The answer is simple. If you can receive 2-3 times as much money from unemployment, disability, and/or welfare benefits (subsidized housing, food stamps, free cellphones, etc.) as you can from a temporary or part-time job, and live a life of leisure, why work? This is the ugly reality we illustrated just six months ago and the situation - amid what is apparently called a 'recovery' remains a depressingly real sign of the times. The political allure of free is so strong that an alarming number of people choose to become wards of the entitlement/welfare state rather than captain their own destiny. Indeed, while many are 'proud', 49% of American households now receive one or more government transfer benefits amounting to 18% of all personal income and a burden of $7,400 for every American - seemingly threatening the supposed self-reliance that has long characterized the American national psyche.

There is no way to unwind. 

France vetoed the launch of free-trade negotiations between the EU and the US (forgot that it racked up a big trade surplus with the US)

"Information about the usage of chemical weapons by Assad is fabricated in the same way as the lie about Hussein's weapons of mass destruction.” Alexei Pushkov, head of the Russian lower house of parliament’s international affairs committee, said on Twitter.

Thursdays may be the new Tuesdays (if only this week), but so far Fridays are still just Fridays, and no mysterious overnight levitation is here to open the market 0.5% higher. The Nikkei 225 retraced a fraction of Thursday’s losses overnight as the positive close on Wall Street and a dovish interpretation of Hilsenrath’s WSJ piece yesterday allowed the Japanese indices to recover from the worst levels of the week. USD/JPY has pared Thursday’s bounce and trades lower as the Bank of Japan’s minutes showed one member of the board proposing the advantages of limiting the bank’s QQE program to just two years in order to avoid financial imbalances. Overnight in China, as we warned yesterday, the liquidity situation got even worse, when the PBOC's attempt to drain liquidity failed to sell some 30% of the planned 15 billion yuan in 273-day bills (more on this shortly), leaving the banks screaming Uncle and on the verge of a full-blown liquidity crisis: we expect rumors, and news, of more banks failing to roll over overnight liquidity to hit the tape shortly.

Are Emergency Plans Meant Only for Nuclear War the Real Justification for Spying?

Obama Indistinguishable from Bush ... Or Stasi East Germans

The disclosures involving this (and the prior) administration's Big Brother surveillance state, which would make Nixon blush with envy are now coming fast and furious (one wonders - why now: even that bastion of liberalism the NY Times, has turned against Obama). Although while the Guardian's overnight news that Verizon (and most certainly AT&T as well among others) was cooperating with the NSA on spying on US citizens, so far at least the internet seemed, if only to the great unwashed masses, immune. That is no longer the case following news from the WaPo exposing PRISM, a highly classified program, which has not been disclosed publicly before. "Its establishment in 2007 and six years of exponential growth took place beneath the surface of a roiling debate over the boundaries of surveillance and privacy." What PRISM does is to allow the NSA and the FBI to tap directly "into the central servers of nine leading U.S. Internet companies, extracting audio, video, photographs, e-mails, documents and connection logs that enable analysts to track a person’s movements and contacts over time."

The IRS has a known history of scandalous behavior. With Nixon, Johnson, Hoover, Kennedy, and the FBI using the IRS to intimidate their enemies, it's no surprise that people have their eye on the IRS. Now under President Obama, they're at it again, which begs the question: bureaucratic blunder or political profiling?

Nothing like a solid dose of schizophrenia to start the week, following Chinese PMI news which showed that once again the Chinese economy was both contracting and expanding at the same time. Sure, one can justify it by saying HSBC looks at smaller companies while the official data tracks larger SMEs but the reality is that just like in the US, so China has learned when all else fails, baffle with BS is the best strategy. As a result the media is attributing he drop in European stocks to the weaker than expected China PMI, while the green prints in US futures are due to... stronger than expected China PMI. There were no split-personalities in Japan, however, where Mrs. Watanable's revulsion with recent euphoria led the Nikkei to tumble over 500 points, to closed down another 3.72%, and is now on the verge from a 20% bear market from its May 23 multi-year highs. The fact that the USDJPY reached within 3 pips of the Abenomics "fail" zone of USDJPY 100 didn't help overnight sentiment.

Here is what is shaping the global capital markets.

The old idiom “you can lead a horse to water, but not make him drink” has proven itself true in the course of human learning. Or rather, it would be more accurate to label it man’s inability to learn from mistakes. You can hold a mirror up to grotesque instances of hypocrisy, but most men will remain mules – stubborn in their prejudice and beliefs. The ability to heed lessons from blunders is, often times, a skill unable to be mastered by the mass populace. The mule, being a universal symbol for stubbornness, has become indistinguishable from the average news and politics ingester. Toeing the carefully-planned ideological path of media personalities, divergence from party line is a hurdle most pedestrians are incapable of clearing. What’s not done is a forthright attempt to continually rectify our wrongs and pursue truth – even when it conflicts with inner bias. It’s far less painful to not acknowledge faulty logic.

...It seemed like every week we would hear about some terrorist with a suitcase-sized bomb, and the bureaucrats would dive into a lively debate about whether or not to evacuate the Americans. One day, I remember, my friend who was the senior ranking non-commissioned officer interrupted and said, “What about the Swedes? Do we evacuate the Swedes too?” The embassy staff looked at each other, shrugged a bit, “Oh sure, sure, we’ll coordinate with Washington on that.” And the discussion continued. “What about the Saudis?” Silence again. And then he really made his point. “It’s not just about Americans, you know. [others] blood is worth something too.”

One can read "The Lethal Presidency of Barack Obama" to get a true sense of Obama's "the best defense is a relentless drone everyone offense, ignore collateral damage and take out a few Americans in the process" policy. Or one can stare at rising stawks and enjoy their Obamaphones. Obe can't have both.