en Earnings Still Matter <p style="line-height: 1.71429; margin: 0px 0px 1.71429rem; color: #444444; font-family: 'Open Sans', Helvetica, Arial, sans-serif; font-size: 14px;"><em><strong><a href="" target="_blank">From the Slope of Hope: </a></strong></em>Many years ago, if you asked someone what drove stock prices, they would give you a simple, honest answer:&nbsp;<strong>earnings</strong>. If a company had strong earnings, and those earnings were projected to grow, then the stock price was strong. If not, then not.</p> <p style="line-height: 1.71429; margin: 0px 0px 1.71429rem; color: #444444; font-family: 'Open Sans', Helvetica, Arial, sans-serif; font-size: 14px;">Take a time machine back to that same person and tell them about the new world in which what drives stock prices is the USD/JPY. Yep, the ratio of the US dollar to the Japanese Yen is what everyone follows, pip by pip (tonight being yet another example, as everyone is tied up in knots as to what that chortling buffoon Kurado is going to announce). What the USD/JPY has to do with honest-to-God equity value is beyond me.</p> <p style="line-height: 1.71429; margin: 0px 0px 1.71429rem; color: #444444; font-family: 'Open Sans', Helvetica, Arial, sans-serif; font-size: 14px;">In spite of this, earnings still matter, and as we head into another earnings season, the bulls better pray to whatever pagan gods they worship that company after company magically defy the downturn that the economy is quite obviously entering. It isn't off to a good start this evening, however, as the charts below show.</p> <p style="line-height: 1.71429; margin: 0px 0px 1.71429rem; color: #444444; font-family: 'Open Sans', Helvetica, Arial, sans-serif; font-size: 14px;">First off, there is YUM, which is the organization that&nbsp;owns the fine dining establishments Kentucky Fried Chicken, Taco Bell, and Pizza Hut. I guess even the morbidly obese typical American gastropod&nbsp;has had&nbsp;his&nbsp;fill over low-quality, over-salted, over-greased crap that these dreadful little venues crank out, as the stock has lost nearly one-<strong>fifth</strong>&nbsp;of its market cap after hours (after having&nbsp;<em>already</em>&nbsp;dropped substantially in recent months):</p> <p style="line-height: 1.71429; margin: 0px 0px 1.71429rem; color: #444444; font-family: 'Open Sans', Helvetica, Arial, sans-serif; font-size: 14px;"><img src="" alt="1006-YUM" width="923" height="440" style="height: auto; max-width: 100%; border-radius: 3px; box-shadow: rgba(0, 0, 0, 0.2) 0px 1px 4px;" class="alignnone size-full wp-image-49485" /></p> <p style="line-height: 1.71429; margin: 0px 0px 1.71429rem; color: #444444; font-family: 'Open Sans', Helvetica, Arial, sans-serif; font-size: 14px;">Software make Adobe is having a relatively gentle time of it, as its percentage loss is (as of this writing, at least) still confined to the single digits. All the same, it's pretty ugly out there.</p> <p style="line-height: 1.71429; margin: 0px 0px 1.71429rem; color: #444444; font-family: 'Open Sans', Helvetica, Arial, sans-serif; font-size: 14px;"><img src="" alt="1006-ADBE" width="770" height="443" style="height: auto; max-width: 100%; border-radius: 3px; box-shadow: rgba(0, 0, 0, 0.2) 0px 1px 4px;" class="alignnone size-full wp-image-49486" /></p> <p style="line-height: 1.71429; margin: 0px 0px 1.71429rem; color: #444444; font-family: 'Open Sans', Helvetica, Arial, sans-serif; font-size: 14px;">These are just two companies out of the thousands that will be reporting in the weeks ahead. Let's hope this is representative of plenty of bad news to come.</p> After Hours CRAP Slope of Hope Yen Tue, 06 Oct 2015 21:03:09 +0000 Tim Knight from Slope of Hope 514467 at SocGen Models A Chinese Hard-Landing; Sees The S&P Crashing 60% <p>Now that even permabulls are openly discussing a recession as a possibility for the US economy, a comparable and far more dire scenario is making the mainstream rounds: <strong>a China hard-landing. </strong></p> <p>Earlier today, SocGen decided to model out what what would happen to equities in just such a scenario. In fact, it took it one step further and combined this with what an "EM lost decade", one which increasingly looks more realistic, would look like. </p> <p>This is what it found:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Our model indicates the <strong>US equity market could potentially drop by 30% in the event of an ‘EM lost decade’ and by 60% in the event of a China hard landing (i.e. S&amp;P 500 back to its lows).</strong></p> </blockquote> <p>The silver lining will depend on just how aggressive the response to such a collapse will be:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>The amplitude of the correction would be a function of the policy response. In both scenarios, we think global equities would rebound strongly after<br /> having overshot (i.e. equities to price in a more optimistic scenario).</p> </blockquote> <p>SocGen then provides the following seven investment recommendations for what would be more or less an apocalypse for risk assets:</p> <p><a href=""><img src="" width="600" height="359" /></a></p> <p>While the above are largely self-exlanatory, SocGen adds the following explainer:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>The 2015 summer sell-off highlighted how nervous the markets are regarding any risk coming from China: the S&amp;P 500 index lost 11% in one week, the Eurostoxx 50 fell 16% and the Nikkei was down 13%. Whatever the scenario (hard landing or EM lost decade), if China’s GDP growth were to drop by c. 2% between 2015 and 2016, volatility would jump and the equity market would price in a lack of future growth (i.e. via a spike in the risk premium).</p> </blockquote> <p><a href=""><img src="" width="600" height="318" /></a></p> <p>And some more details:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>‘EM lost decade’ scenario: a square root-shaped equity market</strong></p> <p>&nbsp;</p> <p>Stressing our equity risk premium model indicates that the S&amp;P 500 could potentially drop by 30% to 1400pts due to a strong move in the risk premium during 2016. In such a scenario, the market could quickly rebound (by year-end 2016) in line with commodity prices. We would expect support from central banks and the resilience of the US and European economies to support developed equity markets, which should gradually recover, albeit to a lower level. We thus imagine a square root-shaped scenario in which European equities would underperform US equities, but would then rebound stronger (on the back of a lower oil price, weaker currency, a more aggressive ECB and more attractive valuations).</p> <p>&nbsp;</p> <p><strong>‘Chinese hard-landing’ scenario: a V-shaped equity market trend</strong></p> <p>&nbsp;</p> <p>In our hard-landing scenario, a theoretical drop in China’s GDP growth from 6.9% in 2015 to 3.0% in 2016 and its consequences would have a major impact on global corporate earnings. We would expect a sharp sell-off of global equities in such a scenario. Our risk premium model indicates that the S&amp;P 500 could in theory return to its lows (around 800pts). But then again the deflationist shock could prompt the central banks to turn more aggressive and support the equity markets to prevent the S&amp;P 500 from sliding into such a bear market. We think that after such a shock the global equity market would rebound strongly on a return to growth in China and central banks actions.</p> </blockquote> <p>* * *</p> <p>So while hardly coming as a surprise to anyone, the resultant devastation across global equity markets will mean that more than even a US recession, this explains why the Fed's 4th mandate is precisely one that focuses on both Chinese markets and the economy, because suddenly the Fed has realized that the biggest risk to the S&amp;P 500 is not domestic, but one stemming from China whose jugging of a real estate, credit, investment, banking and equity bubble will surely take up all the Fed's resources in the coming years.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="864" height="458" alt="" src="" /> </div> </div> </div> Bear Market Central Banks China Equity Markets Nikkei Real estate Recession Risk Premium SocGen Volatility Tue, 06 Oct 2015 21:00:29 +0000 Tyler Durden 514466 at Silver Coin Premiums Soar Above 50% <p>Courtesy of <a href="">Sharelynx' Nick Laird </a>who tracks precious metal premium by vendor, we continue our recent series showing the discrepancy between paper and physical metals, in this case silver. As Nick notes, APMEX price premiums are a lot higher than the Monex. And as can be seen in the charts below, premiums rose above 50% for 1-19 coins &amp; above 40% for 500 plus coins.</p> <p><a href=""><img src="" width="500" height="378" /></a></p> <p>&nbsp;</p> <p>For now, gold is stable.</p> <p><a href=""><img src="" width="500" height="378" /></a></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="500" height="378" alt="" src="" /> </div> </div> </div> Tue, 06 Oct 2015 20:38:20 +0000 Tyler Durden 514465 at Biotechs Butchered As Oil Orgasms In Otherwise Uneventful Day <p><em><strong>Update: </strong></em>both YUM and ADBE are crashing at this moment, the first down 16%, the second down 11%, after both admitted they had been "overoptimistic" and cut and guided lower. YUM Q3 revenue was $3.43bn, vs Exp. $3.66bn and EPS was $1.00 vs Exp. $1.06, while ADBE said it now expecteds EPS of $2.70 vs previous expectations of $3.20, on revenue of $5.7bn vs $5.94bn prior.</p> <p>***</p> <p>After soaring some 100 points since the terrible Friday payrolls data, and nearly 6% in the past week...</p> <p><a href=""><img src="" width="600" height="255" /></a></p> <p>&nbsp;</p> <p>... today the S&amp;P went very much nowhere, even despite yet another solid push in the USDJPY overnight...</p> <p><a href=""><img src="" width="600" height="252" /></a></p> <p>&nbsp;</p> <p>... which was subsequently picked up by the 5Y as the correlation between TSYs and equities promptly became dominant while the announcement of the 12% cut in DuPont EPS served to push the stock as much as 12% higher on hopes the company will promptly agree to become the latest actvist fodder, one which will issue billions in debt to fund stock buybacks. </p> <p><a href=""><img src="" width="600" height="253" /></a></p> <p>&nbsp;</p> <p>All throughout the day, the dollar index (DXY) continued to slide, and closed at the LOD, rapidly approaching the pre-FOMC level.</p> <p><a href=""><img src="" width="600" height="254" /></a></p> <p>But the real story of the day was the bifurcation between momo stocks, manifested in this case by biotechs which were mauled once again, tumbling over 6% at the lows, and down 24% from the recent highs, closing fractionally down for the year...</p> <p><a href=""><img src="" width="600" height="253" /></a></p> <p>&nbsp;</p> <p>... and crude oil, which soared over 6% from the day lows without a clear catalyst although there was speculation that geopolitical risks out of Syria where US and Russian planes are literally within dogfight distance, are finally catching up to oil traders.</p> <p><a href=""><img src="" width="600" height="258" /></a></p> <p>&nbsp;</p> <p>But perhaps the biggest, and most under-reported story, remains the unexpected demand for safety in the shape of 3Month bills, whose yields tumbled following the FOMC and have been increasingly negative in the days since, closing at -0.005%. Is the bond market really hinting at NIRP?</p> <p><a href=""><img src="" width="600" height="255" /></a></p> <p>And now all eyes to the BOJ when tonight around 11pm Eastern, Japan's central bank is expected do and say precisely... <strong>nothing</strong>. After all, as we explained, this is the last bullet both the BOJ and the ECB have, and they will delay <em>as long as possible </em>before boosting QE, and would much rather leave the heavy lifting to the Fed.</p> Bond Crude Crude Oil Momo Tue, 06 Oct 2015 20:08:30 +0000 Tyler Durden 514464 at Prominent Permabull Says Correction Not Over Yet, Expect "Final Capitulation" <p>Back in January 2012, all was well with the centrally-planned world: Gluskin Sheff's David Rosenberg was staunchly bearish, while his arch-nemesis, Wells Capital's Jim Paulsen, was the opposite. This rivalry culminated with Rosenberg writing an extensive breakdown of his showdown with "bullish strategist" Paulsen at a CFA event (see "<a href="">David Rosenberg Explains What (If Anything) The Bulls Are Seeing</a>") in which he said that the one thing that he could "identify as market positive" was valuations, to wit: "we do understand that P/E ratios at current low levels do serve up a certain degree of confidence that there is some downside protection to the overall market here."</p> <p>Fast forward three years, and the world, while still centrally-planned more so than ever now that the BOJ has and the ECB is about to join the massive monetization fray, has been thrown into conventional wisdom turmoil. The reason is that while David Rosenberg infamously flip-flopped from bear to bull (although supposedly he may be <a href="">contemplating turning bearish again</a>, though who knows after the last 3-day rally) three years ago, none other than permabull Jim Paulsen has come out with a very uncharacteristic and skeptical assessment of the market, in which he does <em><strong>not </strong></em>urge readers of his monthly letter on economic and market perspectives to yet again go all-in and BTFD, but to instead realize that the correction is not yet over and that he expects "<strong>a more fearful investment culture suggesting a final capitulation and more importantly, a lower stock market valuation level able to withstand a less hospitable recovery.</strong>"</p> <p>First, Paulsen's take on the torrid market rally unleashed by the worst jobs report in years:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Finding a bottom in the stock market may well be a fool’s game, but that does not stop us fools from trying. A strong rally last week accentuated by a surprisingly weak jobs report on Friday allowed the stock market to successfully retest its initial August correction low for the second time. This show of technical strength has buoyed expectations of a coming year end market rally.</p> <p>&nbsp;</p> <p>While equities may be finding renewed upward momentum in the current quarter, our guess (and it is just that) is the stock market correction is not yet over. In our view, a quick recovery back near all-time highs would leave the stock market with many of the same vulnerabilities that started the correction. <strong>Consequently, we would not be surprised if the stock market tests its correction low yet again and perhaps even fails before reaching a final bottom</strong>.</p> </blockquote> <p>Paulsen addresses what he views as the four main challenges for the market:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Despite the weak jobs report last week, the U.S. unemployment rate remains poised to fall below 5 percent within months. Consequently, even modest economic growth can now produce wage and price pressures, mandate higher interest rates, lower both stock and bond valuations and force Wall Street to finally wave goodbye to its great liquidity friend. Simply reviving Chinese economic growth or bottoming commodity prices may not end this stock market swoon. Today’s turbulence is more about correcting market vulnerabilities built up over the past six years, and finding a new foundation that will allow this bull market to resume as the U.S. economy moves toward full employment.</p> <p>&nbsp;</p> <p>In our view, the stock market faces four major challenges.</p> <p>&nbsp;</p> <p>First, in recent years investors have become more calm and confident than at any time in this recovery. Undoubtedly, investor confidence has cracked a bit during this correction. Some quantitative measures of investor sentiment now suggest bearishness (a positive for the stock market).</p> <p>&nbsp;</p> <p>However, while debatable, our current qualitative assessment of investor mindsets is that they remain fairly constructive about the future. Most media stories are not preaching the end of the world and most Wall Street strategists have maintained bullish year end targets. Moreover, financial market action is not consistent with real fear. There has been no huge and sustained rush to the safe haven U.S. treasury, U.S. dollar or gold. Finally, cyclical stock sectors have done as well or better than traditional defensive sectors in the last couple months. Industrials, consumer discretionary and emerging market stocks have been outperforming in the last couple months. Since its start, the premise behind this bull market has been “climbing a perpetual wall of worry”. Today, though, rather than&nbsp; a risk, most seem to perceive the current correction more as a buying opportunity in an ongoing bull market. <strong>Once this correction finds its final bottom, we suspect many more investors will likely fear a full-fledged bear market and a heightened risk of recession</strong>.</p> <p>&nbsp;</p> <p>Second, at its recent peak, the trailing price-earnings multiple on the U.S. stock market reached almost 19 times earnings and is still about 17.6 times today. Trading at 19 times earnings in a recovery with a zero interest rate, low and stable inflation and no cost-push pressures is not problematic. <strong>However, the stock market is likely to go searching for better valuation support if the normal tensions associated with a recovery nearing full employment begin pressuring the financial markets.</strong></p> <p>&nbsp;</p> <p>Third, after six years, the U.S. earnings recovery is showing signs of aging. Profit margins are near all time record highs&nbsp; and compared to the last few years, earnings are likely to grow much more slowly during the balance of this recovery. Since profit margins cannot rise much higher, should sales&nbsp; growth remain tepid so will earnings results. Alternatively, should sales growth accelerate, pressures on profit margins are likely to intensify nullifying much of the positive impact of stronger economic growth and keeping earnings performance tepid.</p> <p>&nbsp;</p> <p>Finally, whether it is this year yet or in 2016, the U.S. is imminently headed toward an interest rate reset. <strong>Does the current relatively high price-earnings multiple, an investment community which mostly perceives the correction as a great buying opportunity, a recovery with amazingly weak productivity and an aging corporate earnings cycle represent a good foundation for stocks to withstand a rate hike?</strong></p> </blockquote> <p>Where does Paulsen see the market heading in the near-term:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Most likely, the contemporary bull market is not over. <strong>However, the current correction may prove deeper and longer than most now expect.</strong> Should the stock market quickly return to its recent highs, the vulnerabilities that produced this correction will remain challenging.</p> <p>&nbsp;</p> <p>* * * </p> <p>&nbsp;</p> <p><strong>Maybe the S&amp;P 500 declines below 1800 before this correction finds a final bottom. </strong>A second break below the initial crash low in August would produce widespread fears of recession and calls for the end of this bull market rather than the popular "buy on the dip” mentalities recently evident. Moreover, and perhaps most importantly, near 1800, the S&amp;P 500 would be selling about 15 times trailing earnings (close to its long-term 145 year historical average), which represents a much more sustainable level in an economy facing slower earnings growth, somewhat higher inflation and rising shortterm and long-term interest rates.</p> <p>&nbsp;</p> <p>Admittedly, there is nothing scientific about 15 times earnings. Perhaps, the stock market will find good support at 16 times or maybe it will need to fall to 14 times? Who knows? It is guesswork at best. However, we think the stock market still faces some vulnerability and until it achieves a better fundamental footing, it is not likely to sustain a meaningful advance.</p> </blockquote> <p>As a reminder, it was none other than David Tepper who one month ago infamously lowered his own "fair value" P/E multiple from 18x to a range of 14x-16x, noting that under these parameters the S&amp;P 500 would trade between 1680 and 1920 within the next six to twelve months, or 1800 at the mid-point, using a $120 2016E EPS. We wonder if Paulsen was listening...</p> <p>Finally, Paulsen's summary:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>The strong stock market rally during the last few days has pushed the S&amp;P 500 near its highest closing level since the correction began in late August. This has boosted optimism that the recent selloff may be ending. While this could certainly prove to be the case<strong>, we remain less sanguine that the vulnerabilities, which initially produced this correction, have yet to be resolved. </strong></p> <p>&nbsp;</p> <p>Ultimately, we expect a more fearful investment culture<strong> suggesting a final capitulation and more importantly, a lower stock market valuation level able to withstand a less hospitable recovery as the economy nears full employment</strong>.</p> </blockquote> <p>So to summarize, among the more prominent recent (perma)bull to bear conversions we have Tepper, Icahn, Gundlach and now, arguably, Paulsen, who may not be "bearish" but who clearly is not a happy buyer here. On the other hand, the bulls are Gartman and Cramer. Trade accordingly</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="530" height="298" alt="" src="" /> </div> </div> </div> Bear Market Bond David Rosenberg Gundlach Investor Sentiment Monetization None Recession recovery Rosenberg Unemployment Tue, 06 Oct 2015 19:52:19 +0000 Tyler Durden 514459 at How and Why Banks Will Seize Deposits During the Next Crisis <p>As we noted last week, one of the biggest problems for the Central Banks is actual physical cash.</p> <p>The financial system is predominantly comprised of digital money. Actual physical Dollars bills and coins only amount to $1.36 trillion. This is only a little over 10% of the $10 trillion sitting in bank accounts. And it&rsquo;s a tiny fraction of the $20 trillion in stocks, $38 trillion in bonds and $58 trillion in credit instruments floating around the system.</p> <p>Suffice to say, if a significant percentage of people ever actually moved their money into physical cash, it could very quickly become a systemic problem.</p> <p>Indeed, this is precisely what caused the 2008 meltdown, when nearly 24% of the assets in Money Market funds were liquidated in the course of four weeks. The ensuing liquidity crush nearly imploded the system.</p> <p><strong>Because of this, Central Banks and the regulators have declared a War on Cash in an effort to stop people trying to get their money out of the system.</strong></p> <p>One policy they are considering is to put a carry tax on physical cash meaning that your Dollar bills would gradually depreciate once they were taken out of the bank. Another idea is to do away with actual physical cash completely.</p> <p><strong>Perhaps the most concerning is the fact that should a &ldquo;systemically important&rdquo; financial entity go bust, any deposits above $250,000 located therein could be converted to equity&hellip; at which point if the company&rsquo;s shares, your wealth evaporates.</strong></p> <p>&nbsp;</p> <p>Indeed, the FDIC published a paper proposing precisely this back in <strong>December 2012</strong>. Below are some excerpts worth your attention.</p> <p style="margin-left:.5in;"><em>This paper focuses on the application of &ldquo;top-down&rdquo; resolution strategies that involve a single resolution authority applying its powers to the top of a financial group, that is, at the parent company level. The paper discusses how such a top-down strategy could be <strong>implemented for a U.S. or a U.K. financial group in a cross-border context&hellip;</strong></em></p> <p style="margin-left:.5in;"><strong><em>These strategies have been designed to enable large and complex cross- border firms to be resolved without threatening financial stability and without putting public funds at risk&hellip;</em></strong></p> <p style="margin-left:.5in;"><strong><em>An efficient path for returning the sound operations of the G-SIFI to the private sector would be provided by exchanging or converting a sufficient amount of the unsecured debt from the original creditors of the failed company into equity.</em></strong><em> In the U.S., the new equity would become capital in one or more newly formed operating entities. </em></p> <p style="margin-left:.5in;"><strong><em>&hellip;Insured depositors themselves would remain unaffected. Uninsured deposits would be treated in line with other similarly ranked liabilities in the resolution process, with the expectation that they might be written down.</em></strong></p> <p style="margin-left:.5in;"><a href=""><em></em></a></p> <p>In other words&hellip; <strong>any liability at the bank is in danger of being written-down should the bank fail.</strong> And guess what? <strong><u>Deposits are considered liabilities according to US Banking Law. In this legal framework, depositors are creditors.</u></strong></p> <p>So&hellip; if a large bank fails in the US, your deposits at this bank would either be &ldquo;written-down&rdquo; (read: disappear) or <em>converted into equity or stock shares in the company</em>. <strong>And once they are converted to equity you are a <em>shareholder</em> not a depositor&hellip; so you are no longer insured by the FDIC.</strong></p> <p>So if the bank then fails (meaning its shares fall)&hellip; so does your deposit.</p> <p>Let&rsquo;s run through this.</p> <p>Let&rsquo;s say ABC bank fails in the US. ABC bank is too big for the FDIC to make hold. So&hellip;</p> <p style="margin-left:.5in;">1)&nbsp;&nbsp; The FDIC takes over the bank.</p> <p style="margin-left:.5in;">2)&nbsp;&nbsp; The bank&rsquo;s managers are forced out.</p> <p style="margin-left:.5in;">3)&nbsp;&nbsp; The bank&rsquo;s debts and liabilities are converted into equity or the bank&rsquo;s stock. And yes, your deposits are considered a &ldquo;liability&rdquo; for the bank.</p> <p style="margin-left:.5in;">4)&nbsp;&nbsp; Whatever happens to the bank&rsquo;s stock, affects your wealth. If the bank&rsquo;s stock falls at this point because everyone has figured out the bank is in major trouble&hellip; your wealth falls too.</p> <p>This is <em>precisely</em> what has happened in Spain during the 2012 banking crisis over there. Since then it&rsquo;s also happened in Cyprus, Greece&hellip;<strong>and it is now perfectly legal in the US courtesy of a clause in the Dodd-Frank bill.</strong></p> <p>This is just the start of a much larger strategy of declaring War on Cash. &nbsp;The goal is to stop people from being able to move their money into physical cash and to keep their wealth in the financial system <strong><u>at all cost.</u></strong></p> <p>&nbsp;</p> <p>This is just the start of a much larger strategy of declaring War on Cash.&nbsp; The goal is to stop people from being able to move their money into physical cash and to keep their wealth in the financial system <strong><u>at all costs</u></strong>.</p> <p>&nbsp;</p> <p>Indeed, we&#39;ve uncovered a secret document outlining how the Fed plans to incinerate savings to force investors away from cash and into riskier assets.</p> <p>&nbsp;</p> <p>We detail this paper and outline <strong><u>three investment strategies </u></strong>you can implement</p> <p>right now to protect your capital from the Fed&#39;s sinister plan in our Special Report</p> <p><strong><em>Survive the Fed&#39;s War on Cash.</em></strong></p> <p>&nbsp;</p> <p>We are making <u>1,000</u> copies available for FREE the general public.</p> <p>&nbsp;</p> <p>To pick up yours, swing by&hellip;.</p> <p><a href=""></a></p> <p>&nbsp;</p> <p>Best Regards</p> <p>Phoenix Capital Research</p> <p>&nbsp;</p> <p>&nbsp;</p> <p>&nbsp;</p> Central Banks Creditors Fail Greece Meltdown Tue, 06 Oct 2015 19:41:04 +0000 Phoenix Capital Research 514462 at This Is How Close US And Russian Jets Are To A Dog Fight Above Syria <p>With Russia now effectively controlling the skies over Syria and with the US chiding Moscow for “targeting” America’s CIA-trained proxy armies, everyone is anxious to know how long it will be before NATO’s F-16s have an actual, live fire run-in with Russian Su-34s.&nbsp;</p> <p>As we noted on Monday, the biggest threat here is the close proximity at which everyone is now operating: "What happens next? Well, with the previously discussed Russian naval blockade of Syria as a likely next step, and with both US and Russian warplanes already flying back and forth above Syria, and now both superpowers having a legitimate, if only in the eyes of their own media, justification to dispatch land troops, <strong>what was until now a mere proxy war is about to become full blown land combat on Syrian soil, one which will soon involve both Russian and US ground, sea and airborne forces."</strong></p> <p>How close to this eventuality are we, you ask? Well, to <a href="">let CBS tell it</a>, about 20 miles:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em>U.S. pilots flying F-16s out of Turkey first picked up the Russian planes on radar. The Russians closed to within 20 miles, at which point the American pilots could visually identify them on their targeting cameras.</em></p> <p>&nbsp;</p> <p><em>Lt. Gen. Charles Brown, commander of the American air campaign, said the Russians have come even closer than that to his unmanned drones.</em></p> <p>&nbsp;</p> <p><strong><em>"The closest has been within a handful of miles of our remotely piloted aircraft," said Brown. "But to our manned aircraft they've not been closer than about 20 miles."</em></strong></p> <p>&nbsp;</p> <p><em>Brown said he intends to simply work around the Russians in Syria, and he doesn't think they will crowd out American operations.</em></p> <p>&nbsp;</p> <p><strong><em>"We're up a lot more often than [the Russians] are so when we do have to move around [them] for safe operation, it's for a small period of time compared to the hours and hours that we're airborne over Iraq and Syria," said Brown.</em></strong></p> </blockquote> <p>A radar map lays this out best: the yellow aircraft are Russian, the green are American.</p> <p><em><a href=""><img src="" width="590" height="342" /></a></em></p> <p>Go ahead and start the countdown to an "accident", false-flagged or otherwise.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="590" height="343" alt="" src="" /> </div> </div> </div> Iraq Turkey Tue, 06 Oct 2015 19:35:40 +0000 Tyler Durden 514441 at The Phrase That Launches Recessions <p><em>Submitted by Pater Tenenbrarum of <a href="">Acting Man</a></em><a href=""></a></p> <p><strong>It Can’t Get Any Worse?</strong></p> <p>On Friday, shortly after the release of the payrolls report, <a href="">we asked half in jest</a> whether the time had finally come for the market to interpret bad news as bad news, and not as an opportunity to speculate on more central bank largesse. As someone remarked to us later: “<a href="">You had to ask</a>”.</p> <p style="text-align: center;"><img src="" width="495" height="329" /></p> <p style="text-align: center;">Photo credit: <a href="" title="Geh zum Fotostream von Paul Cross" class="owner-name truncate">Paul Cross</a></p> <p>&nbsp;</p> <p>Apparently a slightly later released news item informing us that “<a href="">factory orders hit the skids</a>” was taken as a buy signal of the “<em>it can’t get any worse</em>” sort. Normally it is considered bullish when the market rises on ostensibly bad news – and very often, this is actually the correct interpretation of such market action. However, one must be careful when the fundamental backdrop is subject to severe deterioration. Readers may recall that commentary on the markets was brimming over with the same type of argument in late 2007 and early 2008. In October 2007, the market in its unending wisdom priced the shares of Fannie Mae at $73 for instance.</p> <p>&nbsp;</p> <p style="text-align: center;"><a href="" target="_blank"><img src="" alt="S&amp;P 500, 10 minute chart" width="500" height="376" class="aligncenter wp-image-40464" /></a></p> <p style="text-align: center;">SPX, 10 minute chart – after initially sliding on Friday, the market quickly recovered and has rallied quite a bit since then&nbsp; <br />click to enlarge.</p> <p><strong>&nbsp;</strong></p> <p>The point is this: Although as a trader one must always respect market action, especially in the short term, one must at the same time avoid to ascribe to the mass of market participants a degree of wisdom they simply don’t possess. The <a href="">market very often “knows” nothing</a> and frequently tends to get things completely wrong. If that were not so, there would never be any buying or selling opportunities, but plenty of those obviously exist.</p> <p>&nbsp;</p> <p><strong>The “Throwing of the Light Switch”</strong></p> <p>Anyway, over the weekend we caught up a little on our reading, and <em>inter alia</em> came across an <a href="">article at Wolfstreet</a> a friend had pointed out to us, which discusses the recent weakness in US manufacturing data.</p> <p>What struck us was a comment made by the CEO of a manufacturing company in the context of the latest Kansas manufacturing survey release. As Wolf street notes, according to the survey, “<em>the&nbsp;future composite index and the indexes for the future production, shipments, and new orders all&nbsp;dropped to their worst levels since 2009</em>”. Here is what the CEO said:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong><em>“It feels like someone just flipped the switch to ‘off’</em></strong> without any concrete reasoning,” one of the executives commented.</p> </blockquote> <p>(emphasis added)</p> <p>We immediately recognized that phrase – we have heard it twice before, and it has stuck with us ever since. In fact, we have mentioned it a few times when occasion demanded in past articles. The first time we heard this phrase was in late 2000, in an interview with the CEO of a telecom equipment provider. Paraphrasing: “It’s as if someone had just thrown a light switch – orders have suddenly disappeared”.</p> <p>The next time we heard the phrase uttered was in late 2007 – this time in connection with a mortgage credit company. Ever since, we have filed it away as an anecdotal reference to the onset of recessions. And lo and behold, the phrase is popping up again in a district manufacturing survey.</p> <p>Over the weekend we also looked at the latest EWI financial forecast (a monthly publication focused on US markets). In one section, the authors discuss the recent prevalence of individual stocks and corporate bonds crashing even while the market as a whole seems to be holding up relatively well. They also ponder whether certain corners of the bond market that are lately attracting funds from those fleeing the junk bond market for their perceived safety are really as safe as is widely assumed. The following turn of phrase stood out to us in this context:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>“Our view is that <strong><em>Glencore’s “flash crash” will turn out to be one of many “light-switch” declines</em></strong>, and not just in commodity-related businesses. Already, a plethora of stocks in a wide range of industries have quietly crashed over 50% this year. The industries range from specialty retail (Aeropostale, -78%) to coffee (Keurig Green Mountain, -67%) to semiconductors (Micron Technology, -61%) and the Internet (Groupon, -61%).”</p> <p>&nbsp;</p> <p>[and further below, in the discussion of corporate debt]:</p> <p>&nbsp;</p> <p>“As the charts of Glencore’s stock and its credit default swaps illustrate,<strong><em> the “light switch” moments are starting to appear.” </em></strong></p> </blockquote> <p>(emphasis added)</p> <p>So there you have the same phrase again, only this time in connection with financial market behavior. As the accompanying chart shows, junk bond spreads are exhibiting a distinct similarity to how they looked just ahead of the most recent recessions and bear markets:</p> <p>&nbsp;</p> <p style="text-align: center;"><a href="" target="_blank"><img src="" alt="Spreads" width="500" height="503" class="aligncenter wp-image-40465" /></a></p> <p style="text-align: center;">Junk bond spreads with a proposed wave count by EWI – click to enlarge..</p> <p>&nbsp;</p> <p>This synchronicity in this turn of phrase is of course not a coincidence – both the sudden disappearance of manufacturing orders and the “quiet flash crashes” of individual stocks from a wide range of industries coupled with persistent weakness in junk bonds, are symptoms of the same underlying phenomenon.</p> <p><strong>Conclusion</strong></p> <p>When we see the phrase about a “<em>light switch suddenly being flipped to ‘off’</em>” or a variant thereof popping up in reports about the economy or descriptions of market behavior, our ears are perking up. Admittedly, a sample of two is not exactly the mother of all sample sizes. Then again, anecdotal evidence is by its nature not statistical, but rather reflects the perceptions of people, in this case people intimately involved with the underlying businesses or markets.</p> <p>We tend to believe that such evidence is actually important. Both in 2000 and 2007 we encountered this phrase shortly after the stock market (in the form of the S&amp;P 500) had put in an all time high or a retest of an all time high. Even the very first time in 2000 it struck us as significant. The reason in this case was that only half a year earlier, there had been much talk of “equipment shortages” and even (hold on to your hat ) “DRAM shortages”.</p> <p>When manufacturers see their orders suddenly dry up, something is very wrong in the economy already (note also, this tends to happen before any material effects on employment become evident. A sudden rise in initial claims would definitely cinch it). In light of this, stock market rebounds, even impressive ones, should be viewed with a healthy dose of skepticism.</p> <p><em>Charts by: StockCharts, Elliott Wave International</em></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="640" height="427" alt="" src="" /> </div> </div> </div> Bond Credit Default Swaps default Elliott Wave Fannie Mae Tue, 06 Oct 2015 19:35:33 +0000 Tyler Durden 514461 at Saudi Clerics Call For Jihad Against Russia, Iran; NATO Warns Of Airspace "Violations" <p>It’s now been nearly a week since Russia began its air campaign in Syria and as we’ve documented extensively, both Moscow and the West have put their respective propaganda machines into high gear in an effort to control the narrative and thus dictate how history will remember Syria’s four-year-old, bloody civil war.&nbsp;</p> <p>Lacking viable options in the face of Russia’s rapid military deployment at Latakia, the US has turned to the only thing left in the spin toolbox: the contention that Moscow’s airstrikes are hitting the “good” guys. Here’s <a href="">WSJ</a>:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong><em>Russia has targeted Syrian rebel groups backed by the Central Intelligence Agency in a string of airstrikes running for days, leading the U.S. to conclude that it is an intentional effort by Moscow, American officials said.</em></strong></p> <p>&nbsp;</p> <p><em>The assessment, which is shared by commanders on the ground, has deepened U.S. anger at Moscow and sparked a debate within the administration over how the U.S. can come to the aid of its proxy forces without getting sucked deeper into a proxy war that PresidentBarack Obama says he doesn’t want. The White House has so far been noncommittal about coming to the aid of CIA-backed rebels, wary of taking steps that could trigger a broader conflict.</em></p> <p>&nbsp;</p> <p><em>U.S. officials said Russia’s targeting of its allies on the ground was a direct challenge to Mr. Obama’s Syria policy. Underlining the distrust, the Pentagon decided against sharing any information with Moscow about the areas where U.S. allies were located because it suspected Russia would use that information to target them more directly or provide the information to President Bashar al-Assad’s regime.</em></p> <p>&nbsp;</p> <p><em>American officials and the allied commanders said several other rebel groups covertly backed by the U.S. and its coalition allies have also been targeted by the Russians. They include the First Coastal Division, whose base in northern Latakia province near the Turkish border was struck twice on Oct. 2 starting at 9:45 p.m., according to the group’s commander, Capt. Muhammad Haj Ali.</em></p> <p>&nbsp;</p> <p><strong><em>The Obama administration briefly considered asking the Russians to avoid certain areas inside Syria held by moderate opposition rebels, officials said. But they set aside the idea when it became evident the Russians could use the information to more directly target America’s allies.</em></strong></p> <p>&nbsp;</p> <p><em>There have long been skeptics within the Obama administration and the Congress about the CIA’s arm-and-train program in Syria, reflecting doubts in both branches of government about the ability and the wisdom of trying to build an anti-Assad army from scratch.</em></p> <p>&nbsp;</p> <p><strong><em>“On day one, you can say it was a one-time mistake,” a senior U.S. official said of Russia’s strike on one of the allied rebel group’s headquarters. “But on day three and day four, there’s no question it’s intentional. They know what they’re hitting.”</em></strong></p> </blockquote> <p>Yes, they indeed do “know what they’re hitting.” They’re hitting any and all targets that are strategically significant for Assad’s enemies which means that, as we’ve said repeatedly of late, this is going to be over in a matter of months if not weeks unless the US decides it’s finally time to deploy the best recession cure of all: war.&nbsp;</p> <p>And as unlikely as you may think that is, the media seems to be preparing the American public for a possible direct confrontation with the Russians. As a reminder, Moscow's warplanes allegedly violated NATO member Turkey's airspace on Monday and thanks to Erdogan's need to secure Washington's acquiescence for Ankara's crackdown on the PKK, the US is flying sorties out of Incirlik which means, as we noted earlier today, "close calls" between US and Russian jets are likely to increase. Here’s <a href="">CBS</a>:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em>U.S. pilots flying F-16s out of Turkey first picked up the Russian planes on radar. The Russians closed to within 20 miles, at which point the American pilots could visually identify them on their targeting cameras.</em></p> <p>&nbsp;</p> <p><em>Lt. Gen. Charles Brown, commander of the American air campaign, said the Russians have come even closer than that to his unmanned drones.</em></p> <p>&nbsp;</p> <p><strong><em>"The closest has been within a handful of miles of our remotely piloted aircraft," said Brown. "But to our manned aircraft they've not been closer than about 20 miles."</em></strong></p> <p>&nbsp;</p> <p><em><a href=""><img src="" width="590" height="342" /></a><br /></em></p> <p>&nbsp;</p> <p><em>Brown said he intends to simply work around the Russians in Syria, and he doesn't think they will crowd out American operations.</em></p> <p>&nbsp;</p> <p><strong><em>"We're up a lot more often than [the Russians] are so when we do have to move around [them] for safe operation, it's for a small period of time compared to the hours and hours that we're airborne over Iraq and Syria," said Brown.</em></strong></p> </blockquote> <p>Indeed, NATO is apparently "not buying" Russia's "excuse" that it violated Turkey's airspace by accident. Here's <a href="">Reuters</a>:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em>NATO on Tuesday rejected Moscow's explanation that its warplanes violated the air space of alliance member Turkey at the weekend by mistake and said Russia was sending more ground troops to Syria.</em></p> <p>&nbsp;</p> <p><em>With Russia extending its air strikes to include the ancient city of Palmyra, Turkish President Tayyip Erdogan said he was losing patience with Russian violations of his country's air space.</em></p> <p>&nbsp;</p> <p><em><strong>"An attack on Turkey means an attack on NATO," </strong>Erdogan warned at a Brussels news conference.</em></p> <p>&nbsp;</p> <p><em>NATO Secretary-General Jens Stoltenberg said the alliance had reports of a substantial Russian military build-up in Syria, including ground troops and ships in the eastern Mediterranean.</em></p> <p>&nbsp;</p> <p><em><strong>"I will not speculate on the motives ... but this does not look like an accident and we have seen two of them,"</strong> Stoltenberg said of the air incursions over Turkey's border with Syria. He noted that they "lasted for a long time".</em></p> <p>&nbsp;</p> <p><strong><em>The incidents, which NATO has described as "extremely dangerous" and "unacceptable", underscore the risks of a further escalation of the Syrian civil war, as Russian and U.S. warplanes fly combat missions over the same country for the first time since World War Two.</em></strong></p> </blockquote> <p>Meanwhile, The Kremlin is being careful to preserve its image as the hero in all of this by formally rejecting calls for a no-fly zone, even as Russia's bombing raids have effectively served to keep everyone else out of the skies. Via&nbsp;<a href="">Bloomberg</a>:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em>Russia rebuffed calls for a no-fly zone over Syria as Saudi clerics and Islamist rebels urged for retaliation against its extended bombing campaign that has targeted Islamic State and other militant groups in the Arab country.</em></p> <p>&nbsp;</p> <p><em>Officials from Moscow ruled out sending troops to take part in ground operations in Syria, a day after the head of the Russian parliament’s defense committee said volunteers could go to fight, including some who took part in the conflict in Ukraine. NATO meanwhile said Russian incursions into Turkish airspace in recent days looked deliberate.</em></p> <p>&nbsp;</p> <p><em style="font-size: 1em; line-height: 1.3em;">A no-fly zone would breach Syrian sovereignty and “isn’t based on the UN Charter and international law,” Deputy Foreign Minister Mikhail Bogdanov, who is Russia’s special presidential envoy to the Middle East, said in an interview published Tuesday by the Interfax news service. “Of course, we are against this. You need to respect the sovereignty of countries.”</em></p> <p>&nbsp;</p> <p><em>Russia began its air campaign last week to bomb Islamic State and other jihadist groups in Syria, its first foray outside the former Soviet Union in more than three decades. <strong>Syria’s opposition groups, including Islamist rebels, and anti-Russia fighters with Islamic State have criticized the move, with many likening its intervention in Syria to the Soviet Union’s involvement in Afghanistan that began in 1979.</strong></em></p> </blockquote> <p>"Many" may ideed be likening it to the Soviet-Afghan war but one person who certainly is not is Moscow's spin lady extraordinaire&nbsp;Maria Zakharova:</p> <ul> <li><span style="font-size: 1em; line-height: 1.3em;">RUSSIA WILL NEVER REPEAT AFGHAN EXPERIENCE IN SYRIA: ZAKHAROVA</span></li> </ul> <p>So there you have it. But even if Russia doesn't intend to repeat the Afghan experience, and even if the notion being propogated in the Western media that Moscow's effort to eradicate Assad's opponents will somehow promote terrorism is largely a myth, it looks as though the Saudis are set to promote still more violence in Syria thus creating a kind of self-fulfilling prophecy, and on that note, we close with this from Bloomberg:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em>More than 50 Saudi clerics called on Syrian rebels and Muslim countries on Monday to support a jihad against Syria’s government and its allies.</em></p> <p>&nbsp;</p> <p><strong><em>"This is a real war on Sunnis, their countries and their identities," said the statement. It urged the rebels to join a "jihad against the enemy of God and your enemy and Muslims will back you every way they can."</em></strong></p> </blockquote> <div><span style="font-size: 1em; line-height: 1.3em;"><br /></span></div> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="412" height="241" alt="" src="" /> </div> </div> </div> Afghanistan Iran Iraq Middle East Obama Administration Recession Reuters Turkey Ukraine White House Tue, 06 Oct 2015 19:16:09 +0000 Tyler Durden 514449 at Is Overmedication The Culprit Behind America's Mass-Killing Spree? <p>On Friday, <a href="">we profiled</a> Chris Harper-Mercer, the 26-year old posthumously accused of murdering nine people at an Oregon community college last week.&nbsp;</p> <p>The episode was the latest in a string of mass shootings in the US, all of which raise serious questions about whether the social fabric in America is beginning to rip apart at the seams.&nbsp;</p> <p>As was the case with every similar scenario that’s unfolded on American soil over the past decade, what happened at Umpqua Community College has intensified the debate regarding how these types of events can be avoided. As the <a href="">Washington Post notes</a>, the US has seen more "mass" shootings than it has days in 2015:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em>There have been only 274 days this year. The shootings are captured in this calendar, drawn from the the Mass Shooting Tracker. The tracker draws some criticism because its definition is broader than the FBI's definition, which requires three or more people to be killed by gunfire. But the broader definition is nonetheless a useful one, because it captures many high-profile instances of violence — like the Lafayette theater shootings — that don't meet the FBI's criteria.</em></p> <p>&nbsp;</p> <p><em><a href=""><img src="" width="388" height="610" /></a><br /></em></p> </blockquote> <p>Democrats are quick to pounce on the gun control narrative, which of course leads directly to what they don’t want to see. Case in point (via <a href="">FT</a>):&nbsp;</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em>Business has been brisk for Larry Hyatt, owner of Hyatt Guns in North Carolina, since the Oregon community college shooting last week that left 10 people dead, including the 26-year-old suspect.</em></p> <p>&nbsp;</p> <p><em>Mr Hyatt saw an even bigger surge in customers after the 2012 massacre at Sandy Hook Elementary School in Connecticut that left 26 people dead, including 20 children, before the gunman killed himself.</em></p> <p>&nbsp;</p> <p><em>After that incident, President Barack Obama made his first major push for stricter gun laws. In the wake of the Oregon shooting, Mr Obama on Friday again urged Americans to challenge the powerful gun lobby, saying he could not do it alone.</em></p> <p>&nbsp;</p> <p><em>However, the calls for tighter gun laws lead to an increase in weapons sales. “Once the public hears the president on the news say we need more gun controls, it tends to drive sales,” said Mr Hyatt, who owns one of the largest gun retailers in the US. <strong>“People think, if I don’t get a gun now, it might be difficult to get one in the future. The store is crowded.”</strong></em></p> </blockquote> <p>Then there are those who frame the shootings as a mental health problem and frankly, they're probably right. At the risk of coming across as overly crass, all kinds of people have guns in the US and they aren't killing people in classrooms, which certainly seems to suggest that it is a combination of media-assissted suggestion (i.e. the copy cat effect) and mental illness of one kind or another that is the proximate cause here. The caveat is that there are obviously a variety of aggravating factors at play, including perceptions of social injustice, alienation, racial tensions, etc., but at the end of the day, it's probably safe to say that many of these shooters are suffering from something far more serious than poverty and racial intolerance. </p> <p>It's with that in mind that we present the following excerpts from <a href="">The New York Times</a>, which has endeavored to take a closer look at Harper-Mercer's mother and the circumstances surrounding last week's tragedy:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><em>When a downstairs neighbor of Laurel Harper learned there was a gunman on the loose at Umpqua Community College here, he ran up to tell her, knowing that her son, Christopher Harper-Mercer, was a student there. Like other parents, Ms. Harper started to set out in a desperate search, fearing her son could be hurt.</em></p> <p>&nbsp;</p> <p><em>“She was very upset,” said the neighbor, who asked not to be named, citing his family’s privacy.</em></p> <p>&nbsp;</p> <p><em>But as she was leaving, the sheriff and his deputies intercepted her and broke the news that her son was the gunman.</em></p> <p>&nbsp;</p> <p><em>Ms. Harper, who divorced her husband a decade ago, appears to have been by far the most significant figure in her son’s troubled life; neighbors say he rarely left their apartment. Unlike his father, who said on television that he had no idea Mr. Harper-Mercer cared so deeply about guns, his mother was well aware of his fascination. In fact, she shared it: In a series of online postings over a decade, Ms. Harper, a nurse, said she kept numerous firearms in her home and expressed pride in her knowledge about them, as well as in her son’s expertise on the subject.</em></p> <p>&nbsp;</p> <p><em><strong>She also opened up about her difficulties raising a son who used to bang his head against the wall, and said that both she and her son struggled with Asperger’s syndrome, an autism spectrum disorder. </strong>She tried to counsel others whose children faced similar problems. All the while, she expressed hope that her son could lead a successful life in finance or as a filmmaker.</em></p> <p>&nbsp;</p> <p><em>In an online forum, answering a question about state gun laws several years ago, Ms. Harper took a jab at “lame states” that impose limits on keeping loaded firearms in the home, and noted that she had AR-15 and AK-47 semiautomatic rifles, along with a Glock handgun. She also indicated that her son, who lived with her, was well versed in guns, citing him as her source of information on gun laws, saying he “has much knowledge in this field.”</em></p> <p>&nbsp;</p> <p><strong><em>“I keep two full mags in my Glock case. And the ARs &amp; AKs all have loaded mags,” Ms. Harper wrote. “No one will be ‘dropping’ by my house uninvited without acknowledgement.”</em></strong></p> <p>&nbsp;</p> <p><em>In addition to talking about guns, Ms. Harper, 64, was a prolific commenter in online forums dealing with medical issues, frequently answering questions from strangers with a tone of empathy and concern. She expressed having expertise in autism, saying that both she and her son — whom she never identified by name — had Asperger’s syndrome.</em></p> <p>&nbsp;</p> <p><em>Consoling another parent seeking help with disruptive behavior by an autistic child, Ms. Harper said that her own son “was, among other things, a head-banger” when he was younger and was initially given a misdiagnosis of attention deficit disorder. But over time, he had learned to cope and was doing better, she wrote: “I was in your shoes and now my son’s in college.”</em></p> <p>&nbsp;</p> <p><em>She expressed frustration with people who questioned how successful a person with autism could be, noting: “I have Asperger’s and I didn’t do so bad. Wasn’t easy (understatement) but it can be done.” She also said she had “dealt with it on a daily basis for years and years” because of her son, who she said was progressing well.</em></p> <p>&nbsp;</p> <p><em>“He’s no babbling idiot nor is his life worthless,” Ms. Harper wrote. “He’s very intelligent and is working on a career in filmmaking. <strong>My 18 years worth of experience with and knowledge about Asperger’s syndrome is paying off.”</strong></em></p> </blockquote> <p>Out of a respect for decency we won't comment on the last bolded passage there, but after reading all of the above one is left with serious questions about mental illness and cause and effect. That is, are these episodes simply the result of someone being "off their meds" (to use the crude cliche) or is it in fact the opposite? That is, is this a feedback loop wherein&nbsp;sick people get sicker as their brain chemistry is constantly altered by increasing the dosage of drugs that doctors don't fully understand?&nbsp;</p> <p>Those questions aren't easily answered, and while we absolutely are not attempting to detract from the scope of the tragedy here, it's worth noting that people are dying every day all over the world in suicide attacks that, false flag or no false flag, appear even more senseless than what happened in Oregon last week. That, in turn, raises questions about society in general, as one is left to ask whether, despite the development of touch screen phones and futuristic SUVs, we might not have come very far as a people after all...&nbsp;</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="215" height="130" alt="" src="" /> </div> </div> </div> Barack Obama Crude ETC New York Times Tue, 06 Oct 2015 19:14:56 +0000 Tyler Durden 514460 at