en Does Britain Have The World's Best Health System? Only If You Ignore Outcomes <p><a href=""><em>Authored by George Pickering via The Mises Institute,</em></a></p> <p><em><strong>&ldquo;The National Health Service is the closest thing the English have to a religion,&rdquo; </strong></em>Margaret Thatcher&rsquo;s Chancellor Nigel Lawson famously once observed. However, <strong>given the swivel-eyed fanaticism with which its supporters will defend it, even from the overwhelming evidence of its shortcomings, at this point it might be more accurate to describe the NHS as Britain&rsquo;s national cult.</strong></p> <p><a href=""><strong><img alt="" src="" style="width: 589px; height: 296px;" /></strong></a></p> <p><strong>The utterly unparalleled degree of moral outrage which greets any criticism of the NHS bespeaks the decades of propaganda - in the state&rsquo;s schools, from the state&rsquo;s politicians, and on the state&rsquo;s news and media outlets - which have taught the British people to believe that the only alternative to a state-controlled healthcare monopoly is for the poor to die in the streets. </strong>So pervasive has this myth become that the Labour party has been able to base its entire electoral strategy, for decades, on painting themselves as the only party that truly cares about &lsquo;our NHS&rsquo;, and <a href="" target="_blank">a recent survey</a> found that, when asked &lsquo;What makes you proud to be British&rsquo;, the NHS was the nation&rsquo;s most common answer by a considerable margin. All this has led to a situation wherein the desperately needed reforms to Britain&rsquo;s healthcare system cannot even be discussed, due to the irrational overflowing of blind rage and uncomprehending contempt that greets any criticism of Britain&rsquo;s ultimate sacred cow.</p> <p>This <strong>baseless self-satisfaction and refusal to consider change</strong> is in no way helped by <strong>studies such as one which has recently made <a href="" target="_blank">headlines across the British press</a>, which placed the NHS as &ldquo;the number one health system&rdquo;</strong>. The study in question ranked the healthcare systems of 11 countries, and found that Britain&rsquo;s NHS fulfilled the study&rsquo;s criteria of success most adequately, followed by Australia and the Netherlands, with Canada, France, and the United States languishing at the bottom of its rankings. This positive result might come as a surprise even to those who usually accept the mainstream narrative surrounding the NHS.<strong> Indeed, even at the bottom of <a href="" target="_blank">the BBC&rsquo;s own triumphalist article</a> on the study in question, they link to related stories with headlines such as &ldquo;<a href="" target="_blank">NHS rationing leaves patients in pain</a>&rdquo;, and &ldquo;<a href="" target="_blank">Long waits for surgery have tripled in four years</a>&rdquo;!</strong></p> <p>These two headlines hint at the perennial problem of shortages due to price controls which must inevitably exist in a system such as the NHS. <strong>For as long as the price of healthcare services is held artificially low (or free) by state intervention, individual consumers will no longer have an incentive to economise and question whether they really need a given service, or whether those scarce resources should go to others in more desperate need. </strong>This inevitably leads to a greater number of people clamouring to extract services than the supply can handle, leading to the shortages, long waiting times, and rationing which have characterised the piteous state of NHS services <a href="" target="_blank">throughout its history</a>. So immutable is the economic law that price controls lead to shortages that, in the words of Ludwig von Mises, &ldquo;even capital punishment could not make price control work, in the days of Emperor Diocletian and the French Revolution.&rdquo; The fact that public support for the NHS remains so high, despite these major problems inherent in the nature of the system itself, provides a stark real-life example of the dangers of choosing to ignore the insights of economics.</p> <p><strong>Unfortunately however, price controls and shortages are far from the only problems which stem from Britain&rsquo;s state monopoly of healthcare.</strong> As Kristian Niemietz of the Institute of Economic Affairs highlighted in an <a href="" target="_blank">excellent recent article</a>, the characteristics of the NHS which Britons mistakenly believe to be a unique source of pride, are actually present in almost every other healthcare system in the developed world; yet these other systems lack the NHS&rsquo;s hostility to innovation in medicines and practices. Furthermore, the high number of avoidable infant deaths in some of its trusts led to the NHS being brought under government investigation in April for standards of maternal care which regulators described as &ldquo;truly shocking&rdquo;. I eagerly await the fundamental reforms that will surely result from the state regulators&rsquo; suggestion of a state investigation into the wrongdoings of the state&rsquo;s own healthcare system.</p> <p>How is it possible, then, that the NHS should have ranked so highly in this recent study by the influential Commonwealth Fund health think tank, despite all these major problems? The answer is in <strong>the study&rsquo;s careful selection of the criteria used as metrics of success, in order to give the most weight to the few areas in which the NHS actually does succeed</strong>. Indeed, the study stands out considerably from all other healthcare system comparisons by the great weight it places on procedure and general system characteristics, with relatively little weight given to the actual outcomes. One might think that the <a href="" target="_blank">NHS&rsquo;s place in the bottom 20%</a> for both cancer survival rates and medically avoidable death rates would be seen as a statistic too important to be swept under the rug by the technicalities of this study&rsquo;s method. The Commonwealth Fund also gives surprisingly little weight to the NHS&rsquo;s dismally low efficiency in terms of healthcare bang per buck, a fact which undermines those who claim that simply throwing more taxpayers&rsquo; money at the system would solve its problems.</p> <p><u><strong>In terms of its health outcomes across most common ailments, Britain&rsquo;s NHS ranks closer to former communist bloc countries like Slovenia than to its Western European neighbours. </strong></u>Even a country like Spain, whose GDP per capita is fully 25% lower than Britain&rsquo;s, has healthcare outcomes so much higher than those of the NHS that, if the British system were able to improve even to the point that it was merely equal with Spain, 10,000 fewer Britons would die of medically preventable causes every single year. Even the Commonwealth Fund study in question concedes that, while they ranked the NHS as the number one health system overall, its competence in the small matter of actually keeping its patients alive was the second-worst of any country under consideration.</p> <p><strong>The boundaries of socially acceptable debate still have a considerable distance to shift in Britain before the desperate need for fundamental NHS reform can be calmly acknowledged and reasonably discussed.</strong> Until such time, no amount of minor tweaking or extra funding will be able to address the rot at the heart of the system, from which so many of its avoidable failures stem: namely its status as a taxpayer-funded state monopoly. Until this fundamental aspect of British healthcare can be criticised without incurring excommunication from public life, the NHS will continue to fail the British people, just as Britain&rsquo;s state monopolies in coal, shipbuilding, automobiles, and other industries failed in the 1970s.</p> <p>In the words of the great Chicago economist Thomas Sowell,<strong><em> &ldquo;You will never understand bureaucracies until you understand that, for bureaucrats, procedure is everything and outcomes are nothing.&rdquo;</em></strong> Indeed, you can never understand the NHS until you understand that, for as long as British healthcare continues to be run as a government bureaucracy rather than a consumer-facing business, <strong>the very lives of British people will continue to be just another &lsquo;outcome&rsquo; for the state to ignore.</strong></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="589" height="296" alt="" src="" /> </div> </div> </div> Australia Commonwealth Fund Fail Five Year Forward View France headlines Health Healthcare in the United Kingdom Institute of Economic Affairs Labour Party Ludwig von Mises Mises Institute Mises Institute National Health Service National Health Service National Health Service Netherlands NHS Scotland United Kingdom Sat, 22 Jul 2017 18:36:06 +0000 Tyler Durden 600272 at Market "Paralysis" Confirmed - Squeezed Shorts And Anxious Longs Are Fleeing Stocks <p>For the last two years, <strong>short interest in the US stock market&#39;s largest ETF has collapsed </strong>as bears have been squeezed back to their lowest level of negativity since Q2 2007 (the prior peak in the S&amp;P). But, there&#39;s a bigger issue - despite record highs and &#39;no brainer&#39; dip-buying, <strong>anxious longs have dumped S&amp;P ETF holdings for four straight months - the longest streak since 2009</strong> - seemingly confirming <a href="">Canaccord</a>&#39;s recent finding that<strong><em> &quot;it&#39;s not complacency, it&#39;s paralysis.&quot;</em></strong></p> <p>Bearish investors say they are scaling back on these bets not because their view of the market has fundamentally changed, but because it is difficult to stick to a money-losing strategy when it seems stocks can only go up.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em><strong>&ldquo;There seems to be an overall view that people are invincible, that things will always go up, that there are no risks and no matter what goes on, no matter what foolishness is in play, people don&rsquo;t care,&rdquo; </strong></em>said Marc Cohodes, whose hedge fund focused on shorting stocks closed in 2008.</p> </blockquote> <p>The absolute number of SPY shares short has not been this low since Q2 2007.</p> <p><a href=""><img src="" style="width: 600px; height: 321px;" /></a></p> <p><a href="">The Wall Street Journal</a> points out that<strong> &#39;times are tough for skeptics of the bull market&#39;. </strong>Flummoxed by the endurance of a 2017 rally that produced its 27th S&amp;P 500 record this week, investors are backing off bets that major indexes are headed downward. Bets against the SPDR S&amp;P 500 exchange-traded fund, the largest ETF tracking the broad index, fell to $38.9 billion last week, the lowest level of short interest since May 2013, and remained near those levels this week, according to financial-analytics firm S3 Partners.</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 313px;" /></a></p> <p><em><strong>&ldquo;The shorts have been frustrated now for quite a while,&rdquo; s</strong></em>aid Scott Minerd, global chief investment officer at Guggenheim Partners, which has $260 billion in assets under management.</p> <p>And as we detailed earlier in the week, in one sign of capitulation among the bears, <strong>stock pullbacks have been getting shorter</strong>. This year&#39;s 2.8% maximum drawdown (for now), continues a 6 year streak of drawdowns that are <strong>dramatically below the longer-term average of 14.1% drops intra-year. </strong></p> <p><strong><img height="435" src="" width="600" /></strong></p> <p><a href="">The Journal notes that</a>, <strong>if it finishes 2017 that way, it would be the second-smallest decline in a calendar year over the past 60 years,</strong> according to LPL Financial, an independent brokerage and investment firm.&nbsp;</p> <p><u><strong><em>So shorts have covered drastically... What about the longs?</em></strong></u></p> <p><a href=""><em>As Bloomberg reports,</em></a> even as the S&amp;P 500 Index clawed its way to a fresh record and squeezed out a third consecutive weekly gain, signs of fading enthusiasm in U.S. stocks have become increasingly difficult to ignore. The latest can be seen in the SPDR S&amp;P 500 Trust, the biggest exchange-traded fund tracking the U.S. equity benchmark. As of now,<strong> investors have pulled over half a billion dollars out of the ETF in July. That puts the fund on pace for a fourth consecutive monthly outflow, which would be the longest streak since the start of the bull rally in 2009.</strong></p> <p><a href=""><img height="314" src="" width="600" /></a></p> <p><u><strong>So shorts are out, longs are fleeing.. so who is buying?</strong></u></p> <p>Simple - recall that as we showed earlier in the week, <a href="">using a Credit Suisse chart</a>, <strong>there has been just one buyer of stocks since the financial crisis: corporations themselves.</strong></p> <p><img src="" style="width: 600px; height: 570px;" /></p> <p>As we have shown in the past, and as Canaccord points out again, these relentless credit flows have fueled stock buybacks, &quot;which have been the driving force for higher stock prices.&quot;</p> <p>And yet, despite those record buybacks, stock market volume has been anemic. Since the winter of 2016 panic, the 200-day moving average of NYSE volume, shown in yellow in the next chart, has been in steady decline. This mirrors what was seen in the years following the &ldquo;London Whale&rdquo; panic. To Reynolds, <span style="text-decoration: underline;"><strong>this lack of volume is more reflective of paralysis than complacency among equity investors</strong></span>.</p> <p><a href="^VIX canaccord 2.jpg"><img src="" style="width: 599px; height: 422px;" /></a></p> <p>Ane even hedge funds have given up trading...</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 520px;" /></a></p> <p>&nbsp;</p> <p><a href="">Canaccord&#39;s Reynolds</a> tied it all together last week:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Those opposing forces have led to a compression of volatility. <strong>When stocks have rallied strongly, they have then been met with investor selling. When stocks sell off, the buybacks have picked up after the selling runs its course. </strong>That has been the case for more than eight years. Those forces have led to an equity bull market that moves higher in fits and starts, with some brief pullbacks from time to time.<strong> Given the positioning of equity investors and continued flows into credit, we do not see that pattern changing for some time.</strong>&quot;</p> </blockquote> <p>If Reynolds is right, and he may well be, there is just one catalyst that can break this chain of events: <strong><em>a forceful Fed intervention which will make it all too clear that what has worked until now, no longer will.</em></strong> To be sure, the Fed has made several very pointed statements in that regard in recent weeks, however as has been the case for the past 8 years, it still has to actually do something to prevent what increasingly more banks are openly calling an asset bubble and in some cases, <a href="">even begging the Fed to intervene</a>.</p> <p><img src="" style="width: 599px; height: 164px;" /></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="1180" height="618" alt="" src="" /> </div> </div> </div> Business Credit Suisse Exchange-traded funds Finance Hedge fund Investment IShares Money S&P S&P 500 Short Interest Source UK Services SPDR SPY US Federal Reserve Volatility Wall Street Journal Sat, 22 Jul 2017 17:55:00 +0000 Tyler Durden 600271 at Moscow, Baghdad Sign Huge Arms Deal <p><em><a href="">Authored by Peter Korzun via The Strategic Culture Foundation,</a></em></p> <p><strong>It was reported on July 20 that Russia and Iraq have struck a deal on supplying a large batch of T-90 tanks.</strong> Vladimir Kozhin, the Russian president&rsquo;s aide for military technical cooperation, confirmed the agreement but declined to provide details, saying only &laquo;the number of tanks is substantial&raquo;. Russian military analyst Ruslan Pukhov&nbsp;<a href="" target="_blank">told</a>&nbsp;Russian newspaper&nbsp;Izvestia&nbsp;that the deal might cover deliveries of several hundred T-90 tanks, and that <strong>the contract may exceed $1 billion.</strong></p> <p><strong>The T-90 is among the best-selling tanks in the world. </strong>Hundreds of vehicles have been sold to India, Algeria, Azerbaijan and other countries. A small number of tanks has been delivered to Syria to reinforce the military&rsquo;s capabilities of combatting Islamic State (IS). Kuwait, Vietnam and Egypt are considering the option of purchasing T-90s.</p> <p>Known for its firepower, enhanced protection and mobility, the&nbsp;<a href="" target="_blank">T-90</a>&nbsp;features a smoothbore 2A46M 125mm main gun that can fire both armor-piercing shells and anti-tank missiles and the 1A45T fire-control system. Standard protective measures include sophisticated armor, ensuring all-round protection of the crew and critical systems, including Kontakt-5 explosive reactive armor and active infrared jammers to defend the T-90 from inbound rocket-propelled grenades, anti-tank missiles and other projectiles.</p> <p><iframe allowfullscreen="" frameborder="0" height="315" src="" width="560"></iframe></p> <p><em>During the battle for Aleppo, Syria, a T-90 was hit by US-made BGM-71 TOW missile. The direct impact caused no damage</em></p> <p><strong>The agreement to purchase the tanks was also confirmed by the Iraqi Ministry of Defense.</strong>&nbsp;The T-90s will reinforce the Iraqi M1A1 Abrams fleet damaged in the fight against the Islamic State (IS) militants. The decision to buy the Russian tanks was prompted by the successful performance of T-90s in Syria. During the battle for Aleppo, Syria, a T-90&nbsp;<a href="" target="_blank">was hit</a>&nbsp;by US-made BGM-71 TOW missile. The direct impact caused no damage. For comparison, in October last year, an M1 Abrams&nbsp;<a href="" target="_blank">was hit</a>&nbsp;by a 9M133 Kornet anti-tank missile at the Qurayyah crossroads south of Mosul. The missile rammed into the turret from behind to make the ammunition compartment explode.</p> <p><strong>In 2014-2016, Iraq&nbsp;<a href="" target="_blank">received</a>&nbsp;15&nbsp;<a href="" target="_blank">Mi-28 NE Night Hunter</a>&nbsp;attack helicopters from Russia.</strong> The delivery was&nbsp;<a href="" target="_blank">part of a wider $4.2 billion defense package</a>&nbsp;signed in 2012. The deal included a combination of 43&nbsp;<a href="" target="_top">Mi-35</a>&nbsp;(28) and&nbsp;<a href="" target="_blank">Mi-28NE</a>&nbsp;(15) attack helicopters, plus 42-50&nbsp;<a href="" target="_blank">Pantsir-S1</a>&nbsp;combined short to medium range surface-to-air missile and anti-aircraft artillery weapons systems. The contract was fulfilled in October, 2016, as the attack helicopters and anti-aircraft systems had been delivered to the Iraqi military.</p> <p><strong>In 2014, Russia urgently sent several Su-25 aircraft upon the request of Iraqi government when the country&rsquo;s military was losing ground during the IS offensive.</strong> The Iraqi military also uses Russia-produced TOS-1A Buratino heavy flamethrowers, Grad truck-mounted 122mm multiple rocket launchers, 152mm MSTA howitzers, Su-25 attack planes and armored vehicles.</p> <p><strong>Russia-made weapons were widely used in the battle for Mosul. </strong>One of the systems vastly used in the operation was TOS-1A 220mm 24-barrel multiple rocket launcher and thermobaric weapon mounted on&nbsp;the T-72 tank chassis designed for&nbsp;defeating enemy personnel in&nbsp;fortifications, in&nbsp;open country, and in&nbsp;lightly armored vehicles and transport. It can fire incendiary and thermobaric rockets. The munitions disperse a cloud of&nbsp;flammable liquid into&nbsp;the air around&nbsp;the target, and then ignite it to produce an explosion significantly longer and stronger in comparison to a conventional warhead. This is an effective weapon to strike terrorists hidden in&nbsp;bunkers and caves. Iraqi Russia-made&nbsp;Mi-28 and&nbsp;Mi-35 helicopters also effectively&nbsp;<a href="" target="_blank">launched attacks</a>&nbsp;against IS positions in Mosul.</p> <p><strong>A joint Baghdad-based Russia-Iraq-Iran-Syria operational center was established in 2015 to exchange intelligence and coordinate activities against terrorists.</strong> Iraq has allowed the Russian Air Space Forces to use its airspace for airstrikes against Islamists in Syria.</p> <p>Trade turnout between the two countries is roughly $2 billion, mostly made up of Russian exports. In early 2016, a delegation of nearly 100 government and business officials headed by Deputy Prime Minister Dmitry Rogozin, visited Iraq to boost cooperation on all spheres. The officials signed a wide-ranging memorandum of understanding that included measures to more than double bilateral trade and boost Iraq&#39;s electricity production, which only meets around 60 percent of its peak demand during the hot summer months. The head of the delegation said Russia was ready to sell Sukhoi Superjet civil airliners to Iraq and keep providing it with military aid to fight Islamic State. Moscow has invested millions of dollars in Iraq&#39;s energy sector.</p> <p><strong>Moscow and Baghdad&nbsp;<a href="" target="_blank">are in talks</a>&nbsp;on opening of a direct air line between Baghdad and Moscow and the abolition of visas for diplomats.</strong></p> <p>The US still has large influence in Iraq but it does not own it. The impressive performance of Russian weapons in Syria makes them in high demand among the countries facing the terrorist threat. <strong>The tank deal between Russia and Iraq reflects the trend. It also serves as an example of Russia&rsquo;s&nbsp;<a href="" target="_blank">growing clout</a>&nbsp;in the Middle East and North Africa.</strong></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="621" height="343" alt="" src="" /> </div> </div> </div> 9M133 Kornet Anti-tank warfare Battle of Mosul BGM-71 TOW East Africa India Iraq Iraqi government Iraqi military Iraqi Ministry of Defense Iraq–United States relations Izvestia Kuwait M1 M1 Abrams Middle East Middle East Mil Mi-28 Military Newspaper North Africa Politics Strategic Culture Foundation T-72 T-90 Thermobaric weapon TOS-1 War Sat, 22 Jul 2017 17:19:54 +0000 Tyler Durden 600268 at How Accurate Are CBO Forecasts? The Answer In Two Charts <p>Even as the Republican effort to repeal Obamacare in recent months has suffered one humiliating loss after another, at the hands of none other than the very same Republican party, one government agency has been repeatedly scapegoated for the GOP's failure to come up with a credible and passable alternative to Obamacare: the Congressional Budget Office. Then agan, while hardly an excuse for their sheer incompetence, the GOP is certainly right to point the finger at the CBO's track record of "forecasts", one which we have mocked here on <a href="">occasion </a>after <a href="">occasion </a>after <a href="">occasion</a>. </p> <p>And here, in just two charts, is why when it comes to matters of predictive accuracy, the CBO is almost as bad as the Federal Reserve.</p> <p>First, here is the CBO's history of Obamacare enrollment forecasts...</p> <p><a href=""><img src="" width="500" height="375" /></a></p> <p>... and here is its projection on the trajectory of US debt.</p> <p><a href=""><img src="" width="500" height="462" /></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="960" height="720" alt="" src="" /> </div> </div> </div> 111th United States Congress Business Congressional Budget Office Congressional Budget Office Congressional Budget Office Entertainment Federal Reserve Internal Revenue Code Internal Revenue Service None Obamacare Omnibus legislation Patient Protection and Affordable Care Act Politics Presidency of Barack Obama Republican Party Statutory law US Federal Reserve Sat, 22 Jul 2017 16:43:17 +0000 Tyler Durden 600269 at The Rollover Trio <p style="line-height: 1.71429; margin-top: 0px; margin-bottom: 1.71429rem; color: #444444; font-family: &quot;Open Sans&quot;, Helvetica, Arial, sans-serif; font-size: 14px;"><strong><a href="" target="_blank">From the Slope of Hope: </a></strong>Let's take a step back - -- &nbsp;a few thousand steps back, actually - - and drink in a very long view of the stock market. We'll use the S&amp;P 500 as our observed entity.&nbsp;<strong>Here it is below, spanning several decades, with three major tops tinted.</strong></p> <p style="line-height: 1.71429; margin-top: 0px; margin-bottom: 1.71429rem; color: #444444; font-family: &quot;Open Sans&quot;, Helvetica, Arial, sans-serif; font-size: 14px;"><a href="" style="color: #21759b; outline: none;" rel="attachment wp-att-67822"><img src="" alt="0721-trio" width="848" height="483" 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-67822" /></a></p> <p style="line-height: 1.71429; margin-top: 0px; margin-bottom: 1.71429rem; color: #444444; font-family: &quot;Open Sans&quot;, Helvetica, Arial, sans-serif; font-size: 14px;">You will notice something distinct that that third "top", which is that, unlike its green-tinted predecessors, it didn't mark a top at all. It was&nbsp;<strong>shaped</strong>&nbsp;like a top. It was&nbsp;<strong>timed</strong>&nbsp;like a top. It was just about as good a top as the market gods can create.&nbsp;<strong>And yet it merely preceded another 35% rise in the market in a mere eighteen months.</strong>&nbsp;I've marked with an arrow that fateful day, February 11, 2016, which in hindsight marked one hell of a risk-free buying opportunity.</p> <p style="line-height: 1.71429; margin-top: 0px; margin-bottom: 1.71429rem; color: #444444; font-family: &quot;Open Sans&quot;, Helvetica, Arial, sans-serif; font-size: 14px;"><a href="" style="color: #21759b; outline: none;" rel="attachment wp-att-67823"><img src="" alt="0721-abortion" width="735" height="323" 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-67823" /></a></p> <p style="line-height: 1.71429; margin-top: 0px; margin-bottom: 1.71429rem; color: #444444; font-family: &quot;Open Sans&quot;, Helvetica, Arial, sans-serif; font-size: 14px;">Turning the pages back on&nbsp;<em>Slope</em>, I took a look to see what kinds of things were being written. Here's an item from MPTrader which lays out precisely the same stuff I was thinking:</p> <p style="line-height: 1.71429; margin-top: 0px; margin-bottom: 1.71429rem; color: #444444; font-family: &quot;Open Sans&quot;, Helvetica, Arial, sans-serif; font-size: 14px;"><a href="" style="color: #21759b; outline: none;" rel="attachment wp-att-67824"><img src="" alt="0721-top" width="741" height="312" 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-67824" /></a></p> <p style="line-height: 1.71429; margin-top: 0px; margin-bottom: 1.71429rem; color: #444444; font-family: &quot;Open Sans&quot;, Helvetica, Arial, sans-serif; font-size: 14px;">Of course, that notation about "..<strong>.the Fed is not actively and overtly buying assets</strong>" were like famous last words, because the central bankers of the entire planet piled in and did just that. As for myself, on February 11th 2016, I made this foolish mistake:</p> <p style="line-height: 1.71429; margin-top: 0px; margin-bottom: 1.71429rem; color: #444444; font-family: &quot;Open Sans&quot;, Helvetica, Arial, sans-serif; font-size: 14px;"><a href="" style="color: #21759b; outline: none;" rel="attachment wp-att-67825"><img src="" alt="0721-fate" width="740" height="465" 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-67825" /></a></p> <p style="line-height: 1.71429; margin-top: 0px; margin-bottom: 1.71429rem; color: #444444; font-family: &quot;Open Sans&quot;, Helvetica, Arial, sans-serif; font-size: 14px;">That probably marked, within moments, the precise bottom. Suffice it to say that my pledge to never show&nbsp;<em>Chocolate Rain</em>&nbsp;or&nbsp;<em>Let 'Em Burn</em>&nbsp;is quite clearly important to heed.</p> <p style="line-height: 1.71429; margin-top: 0px; margin-bottom: 1.71429rem; color: #444444; font-family: &quot;Open Sans&quot;, Helvetica, Arial, sans-serif; font-size: 14px;">Of course, over in ZeroHedge, the massive top was not lost upon them either:</p> <p style="line-height: 1.71429; margin-top: 0px; margin-bottom: 1.71429rem; color: #444444; font-family: &quot;Open Sans&quot;, Helvetica, Arial, sans-serif; font-size: 14px;"><a href="" style="color: #21759b; outline: none;" rel="attachment wp-att-67826"><img src="" alt="0721-zero" width="791" height="279" 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-67826" /></a></p> <p style="line-height: 1.71429; margin-top: 0px; margin-bottom: 1.71429rem; color: #444444; font-family: &quot;Open Sans&quot;, Helvetica, Arial, sans-serif; font-size: 14px;"><strong>So, yeah, we permabear pornsters were all excited, and we were also dead wrong.</strong>&nbsp;But let's examine these last three tops in a bit of detail.</p> <p style="line-height: 1.71429; margin-top: 0px; margin-bottom: 1.71429rem; color: #444444; font-family: &quot;Open Sans&quot;, Helvetica, Arial, sans-serif; font-size: 14px;">The first top was the Internet bubble. Now keep in mind, since we're looking at the S&amp;P 500, and not the NASDAQ, the gyrations aren't as extreme, but there was still a squeaky-clean equity top. We can see the&nbsp;<strong>peak in March 2000</strong>&nbsp;tinted in yellow, but as the arrow points out, the market didn't really commit itself to an oh-my-God-everything-is-falling market for another fourteen months. At the arrow mark, the S&amp;P was down, yes, but only<strong>&nbsp;14%</strong>, and it was about to embark on a much bigger fall (including this little thing called 9/11 which was going to take place a few months later).</p> <p style="line-height: 1.71429; margin-top: 0px; margin-bottom: 1.71429rem; color: #444444; font-family: &quot;Open Sans&quot;, Helvetica, Arial, sans-serif; font-size: 14px;"><a href="" style="color: #21759b; outline: none;" rel="attachment wp-att-67827"><img src="" alt="0721-firstpeak" width="735" height="684" 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-67827" /></a></p> <p style="line-height: 1.71429; margin-top: 0px; margin-bottom: 1.71429rem; color: #444444; font-family: &quot;Open Sans&quot;, Helvetica, Arial, sans-serif; font-size: 14px;">Seven years after the first top, the second one formed. The peak was<strong>&nbsp;October 2007</strong>, and as before, even though it started getting pretty wild, there was still plenty of "fight' left in the market, and 10 months later, it was like a carbon copy of the first top: a drop of about&nbsp;<strong>14%</strong>&nbsp;which would soon to followed by something truly cataclysmic.</p> <p style="line-height: 1.71429; margin-top: 0px; margin-bottom: 1.71429rem; color: #444444; font-family: &quot;Open Sans&quot;, Helvetica, Arial, sans-serif; font-size: 14px;"><a href="" style="color: #21759b; outline: none;" rel="attachment wp-att-67828"><img src="" alt="0721-secondpeak" width="678" height="683" 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-67828" /></a></p> <p style="line-height: 1.71429; margin-top: 0px; margin-bottom: 1.71429rem; color: #444444; font-family: &quot;Open Sans&quot;, Helvetica, Arial, sans-serif; font-size: 14px;">Which brings us to the third top, which I like to think of as an aborted top. (To quote Kay from the Godfather Part 2: "<em>Michael, you are blind. It wasn't a miscarriage. It was an abortion. An abortion, Michael. Just like our marriage is an abortion. Something that's unholy and evil</em>.") The market peaked in&nbsp;<strong>May 2015</strong>. It fell - - yep, you guessed it - -&nbsp;<strong>14%</strong>.......</p> <p style="line-height: 1.71429; margin-top: 0px; margin-bottom: 1.71429rem; color: #444444; font-family: &quot;Open Sans&quot;, Helvetica, Arial, sans-serif; font-size: 14px;"><a href="" style="color: #21759b; outline: none;" rel="attachment wp-att-67829"><img src="" alt="0721-thirdpeaek" width="741" height="326" 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-67829" /></a></p> <p style="line-height: 1.71429; margin-top: 0px; margin-bottom: 1.71429rem; color: #444444; font-family: &quot;Open Sans&quot;, Helvetica, Arial, sans-serif; font-size: 14px;">......and then&nbsp;<strong>THIS</strong>&nbsp;shit happened..........</p> <p style="line-height: 1.71429; margin-top: 0px; margin-bottom: 1.71429rem; color: #444444; font-family: &quot;Open Sans&quot;, Helvetica, Arial, sans-serif; font-size: 14px;"><a href="" style="color: #21759b; outline: none;" rel="attachment wp-att-67830"><img src="" alt="0721-dfift" width="758" height="677" 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-67830" /></a></p> <p style="line-height: 1.71429; margin-top: 0px; margin-bottom: 1.71429rem; color: #444444; font-family: &quot;Open Sans&quot;, Helvetica, Arial, sans-serif; font-size: 14px;">It's often stated that "It's different this time" are the most dangerous words in the world of trading. Well, not this instance, huh? Because it WAS different this time, and those who foolishly bought stocks when it looked like the world was going to collapse a third time have made out like bandits.</p> <p style="line-height: 1.71429; margin-top: 0px; margin-bottom: 1.71429rem; color: #444444; font-family: &quot;Open Sans&quot;, Helvetica, Arial, sans-serif; font-size: 14px;"><strong>So what now?</strong>&nbsp;Well, as you might imagine the utter failure of the can't-miss, totally perfect stock market top has rattled my confidence just a touch. So my honest answer is:</p> <p style="line-height: 1.71429; margin-top: 0px; margin-bottom: 1.71429rem; color: #444444; font-family: &quot;Open Sans&quot;, Helvetica, Arial, sans-serif; font-size: 14px;"><img src="" width="569" height="393" style="height: auto; max-width: 100%; border-radius: 3px; box-shadow: rgba(0, 0, 0, 0.2) 0px 1px 4px;" class="alignnone" /></p> <p style="line-height: 1.71429; margin-top: 0px; margin-bottom: 1.71429rem; color: #444444; font-family: &quot;Open Sans&quot;, Helvetica, Arial, sans-serif; font-size: 14px;">I will say this, however:<strong>&nbsp;I do believe history repeats itself</strong>. And I further believe that what the market SHOULD have been allowed to do was, God forgive me, actually be allowed to do what markets do and&nbsp;<strong>act as a tool for honest price discovery.</strong></p> <p style="line-height: 1.71429; margin-top: 0px; margin-bottom: 1.71429rem; color: #444444; font-family: &quot;Open Sans&quot;, Helvetica, Arial, sans-serif; font-size: 14px;">It wasn't allowed to do this, however, and I'm pretty sure I know why:<strong>&nbsp;the financial crisis scared the holy hell out of the entire world</strong>, particularly the central bankers. They have pledged - - and have demonstrated their commitment to this pledge - - that&nbsp;<strong>they will never, ever, EVER, allow such a thing to happen again</strong>. They will do whatever it takes, sacrifice any future, and use whatever "tools" they can create to prevent such a thing. It's almost like what is said of the holocaust: "NEVER AGAIN."</p> <p style="line-height: 1.71429; margin-top: 0px; margin-bottom: 1.71429rem; color: #444444; font-family: &quot;Open Sans&quot;, Helvetica, Arial, sans-serif; font-size: 14px;">This was expressed quite honestly by Yellen when she made the jaw-dropping declaration that&nbsp;<strong>there would not be another financial crisis in our lifetimes.</strong></p> <p style="line-height: 1.71429; margin-top: 0px; margin-bottom: 1.71429rem; color: #444444; font-family: &quot;Open Sans&quot;, Helvetica, Arial, sans-serif; font-size: 14px;">As disappointed (and shocked) as I am that the picture-perfect top of 2015/2016 turned out to be a&nbsp;<strong>triple-decker nothing burger with special sauce,</strong>&nbsp;I still hold the perhaps naive viewpoint that<strong>&nbsp;global markets are ultimately larger than those trying to manipulate them</strong>. The decline that the third top&nbsp;<strong>should</strong>&nbsp;have preceded is still waiting in the wings, although it has grown much more powerful, since&nbsp;<strong>the suppression of those natural market forces will simply allow them to be expressed more violently once they are uncontrollable.</strong></p> <p style="line-height: 1.71429; margin-top: 0px; margin-bottom: 1.71429rem; color: #444444; font-family: &quot;Open Sans&quot;, Helvetica, Arial, sans-serif; font-size: 14px;">Prayers delayed are not prayers denied. Neither are market tops.</p> 9 carbon copy Music industry NASDAQ S&P S&P 500 Slope of Hope US Federal Reserve Sat, 22 Jul 2017 16:30:34 +0000 Tim Knight from Slope of Hope 600270 at What To Do With Your Cash? <p><a href=""><em>Authored by Adam Taggart via,</em></a></p> <p><em><strong>Have you moved a material percentage of your financial portfolio to cash? Have you become so concerned about the meteoric ramp upwards in asset prices that you find it wiser instead to move to the sidelines, build &quot;dry powder&quot;, and wait to re-enter the markets at saner valuations?</strong></em></p> <p>If so, you have my sympathies.</p> <p>The past 5+ years have been brutal for savers pursuing this strategy. I know this well, as I&#39;m one of those folks, too.</p> <h2><span style="text-decoration: underline;">The Mother Of All Financial Bubbles</span></h2> <p>As we&#39;ve chronicled for years here at, the global central banking cartel started flooding the world with liquidity (aka, money printed from thin air) in response to the arrival of the Great Financial Crisis in late 2008. And they never stopped.</p> <p>The chart below shows how the combined balance sheets of the major world central banks (Fed, ECB &amp; BOJ) are 3.5x higher today than their pre-crisis levels less than a decade ago. (And if we included the PBOC in this chart, the cumulative total would be 18.8 Trillion!):&nbsp;</p> <p><img src="" style="height: 309px; width: 560px;" /></p> <p class="rtecenter">(<a href="" target="_blank">Source</a>)</p> <p><strong>All that liquidity has to go somewhere.</strong> And, as hoped by the central banking cartel, it has found its way into the financial markets, pushing the price of nearly every asset class to record extremes. And then higher still.</p> <p>Equities have shot the moon, and are now nearly twice as high as they were at the apex of the past two stock market bubbles, as this below chart of the S&amp;P 500 shows (in fact, the S&amp;P price/revenue ratio <a href="" target="_blank">just hit the highest level in history</a>, aside from the week of the March 2000 bubble peak):</p> <p><img src="" style="height: 335px; width: 560px;" /></p> <p>Similarly, bond prices have continued their 30-year march higher, powered by record-low interest rates around the world:</p> <p><img src="" style="height: 489px; width: 560px;" /></p> <p class="rtecenter">(<a href="" target="_blank">Source</a>)</p> <p>And home prices have returned back to the same level seen right before the last housing bubble viciously burst (in <a href="" target="_blank">many high-demand markets</a>, home prices are well in excess of those 2007 highs):</p> <p><img src="" style="height: 405px; width: 560px;" /></p> <p>We&#39;ve written numerous articles about the dangers of the current central banking policies responsible for today&#39;s nosebleed asset prices.<span style="text-decoration: underline;"><strong> But the gist is this: we are currently living within <a href="" target="_blank">the mother of all financial bubbles</a>. These prices are in no way sustainable.</strong></span></p> <p><strong>Why not? While the reasons are legion (and we&#39;ve spilled plenty of ink writing about them all), the big reason is revealed in this chart:</strong></p> <p><img src="" style="height: 330px; width: 560px;" /></p> <p><strong>To support the current level of asset prices, we have been growing our debts more than twice as fast as our national income (GDP). </strong>Any household knows that you can&#39;t do this for long before insolvency occurs. Nations -- even those with a printing press -- can&#39;t escape this same fate in the long run.</p> <p>See that little wiggle in the debt line from 2008-2009? That&#39;s the wiggle that almost destroyed the world during the Great Financial Crisis. Look at those asset price charts above again. See how much higher we are today than we were back in 2008?</p> <p><strong><em>So... are you one of those people wondering how much more painful the next downturn will be, when we fall from even loftier heights this time? Are you one of the few folks who haven&#39;t already forgotten that the S&amp;P declined over 50% in the short time between the end of 2007 and the beginning of 2009?</em></strong></p> <p>If you are, and you&#39;ve decided not to participate in today&#39;s&nbsp;Ponzi&nbsp;scheme markets and instead build cash, it&#39;s been a painful ride watching the prices of nearly every other asset vault higher year-over-year while your cash pile simply sits there.</p> <p>And if the feeling of &quot;missing the rally&quot; isn&#39;t bad enough with the mainstream media and your brother-in-law constantly rubbing your nose in it, there&#39;s a host of new threats besieging&nbsp;cash these days.</p> <h2><span style="text-decoration: underline;">The All-Out War On Savers (aka Financial Repression)</span></h2> <p>Again, as we&#39;ve written about often here at, <strong>those running today&#39;s economy are doing their utmost to keep prudent savers like you from keeping their cash safely on the sidelines. </strong>They desperately want your savings pushed out into the economy so that their over-leveraged casino can continue operating a little bit longer.</p> <p>We discuss this in depth in our recent report <a href="" target="_blank">Less Than Zero: How The Fed Killed Saving</a>, which explains how the Financial Repression playbook is very intentionally designed to transfer the burden of the government&#39;s orgy of debt onto the public. It seeks to do so in a way that is<em> just opaque enough </em>to <em>just enough people</em> that the general public doesn&#39;t catch on to what&#39;s happening.</p> <p>The key elements of Financial Repression are:</p> <ul> <li><strong>Negative interest rates:</strong>&nbsp;These reduce the servicing costs of debt, allowing the system to take on even more. They also destroy any incentive to save, as cash parked in the bank actually loses purchasing power on a real basis. This pushes capital out of savings and into the riskier assets (stocks, bonds, real estate, etc) that all the built-up debt is supporting.</li> <li><strong>Capital controls: </strong>These &quot;ring fence&quot; domestic capital, making it difficult for prudent money to avoid the measures of financial repression. Restrictive legislation on international holdings like <a href="" target="_blank">FATCA</a> and the higher taxes placed on &quot;safe haven&quot; assets like precious metals are examples of these. Other manifestations are bank bail-ins, banking restrictions on withdrawing more than $10,000 (and oftentimes substantially less), civil asset forfeiture, and outlawing bank notes as part of the &quot;war on cash&quot; and the move to a &quot;less cash&quot; or &quot;cashless&quot; economy -- all of these serve to thwart and/or penalize savers who would just rather sit out the current insanity of the markets and accept no return over the risk of substantial loss.</li> </ul> <p>So, with the reckless investors all around us gloating at their returns, with our banks paying us nearly 0.0% on our savings and treating us like criminals if we have the temerity to ask for access to it, and with the government talking about taking it all from us eventually anyways (replacing with <a href="" target="_blank">Fedcoin</a>, perhaps?) -- <strong><em>is it time for us cash savings holders to throw in the towel?</em></strong></p> <h2><span style="text-decoration: underline;">Hussman&#39;s &quot;Choice&quot;</span></h2> <p>In a word: <span style="text-decoration: underline;"><strong><em>No</em></strong></span></p> <p><strong>We have to remember that we are living through a massive bubble market that has no precedent in history.</strong> Bubble markets are nefarious, as they prey on our mind&#39;s hard-wired greed/fear drivers. It is very easy for us be manipulated into thinking &quot;it&#39;s different this time&quot;. Even the genius Isaac Newton fell victim to the mania of the South Sea Bubble:</p> <p><iframe frameborder="0" height="315" src="" width="560"></iframe></p> <p>John Hussman&nbsp;has done perhaps more work than anyone else demonstrating that today&#39;s elevated market pricing is due to pulling future value into today (through debt), <strong>and that the BEST investors can hope for going forward&nbsp;is a decade of 0% gains:</strong></p> <p><img alt="Hussman 12-year projected return chart" src="" style="height: 530px; width: 560px;" /></p> <p class="rtecenter">(<a href="" target="_blank">Source</a>)</p> <p>But I think his real masterwork is his very succinct summary of the situation we are all in at this moment in history:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><span style="text-decoration: underline;"><strong><em>The problem with bubbles is that they force one to decide whether to look like an idiot before the peak, or an idiot after the peak.&nbsp;</em></strong></span></p> </blockquote> <p>2008 is not so far in the past that we can&#39;t clearly remember the panic in people&#39;s eyes as they watched their retirement portfolios and home prices get cut in half within a matter of months. That&#39;s what looking like an idiot <span style="text-decoration: underline;">after</span> the peak feels like.</p> <p>As oddball as it may seem to others, as uncomfortable as it may feel as the central bank liquidity party rages on, as painful as it may feel as the system tries its best to separate you from your hard-earned savings, there will come a time when this unsustainable system will falter and then proceed in collapsing on itself.</p> <p>When that happens, those who decided to look like an idiot early on and refuse to join the party (i.e., positioning their capital defensively), are going to look like geniuses. They will avoid the heartbreak of loss, and they will have capital to deploy when the dust settles, purchasing quality assets at (potentially historic) bargain prices.</p> <p><strong>It&#39;s not an easy choice to make, or to remain steadfast in. It takes foresight, courage, and resolve. But it&#39;s a smart choice.</strong></p> <p>Of course, cash savings is just one of a number of options for positioning your financial wealth defensively right now. For those looking to learn more about other ways to do so, we recommend the following progression:</p> <ol> <li>If you haven&#39;t yet ready it, read our free report&nbsp;<a href="" target="_blank">The Mother of All Financial Bubbles</a>&nbsp;to understand the full nature of the situation we&#39;re living through today</li> <li>Read our report <a href="" target="_blank">How To Hedge Against A Market Correction</a>, to understand the most common strategies for protecting your portfolio from downside risk</li> <li>For those interested, I&#39;ve shared how <a href="" target="_blank">my own personal portfolio is positioned</a> (Note: this is not intended as personal financial advice, but as an example to evaluate)</li> <li>Schedule a review focused on downside risk management with your financial adviser. If you&#39;re having difficulty finding one experienced on this topic, we can <a href="" target="_blank">suggest one to consider</a>.</li> </ol> <p>It&#39;s unknowable exactly how much longer our unsustainable markets can remain at their record levels. But there is one thing we know for certain: we&#39;re closer to their day of reckoning than we&#39;ve been at any point over the past seven years. A recession is due soon by historical standards, and long overdue by fundamental ones.</p> <p><em><strong>When it happens, do you want to look like an idiot? Or would you rather choose to look like one now, so that you can look brilliant then?</strong></em></p> <p><span style="text-decoration: underline;"><strong>Choose wisely.</strong></span></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="276" height="161" alt="" src="" /> </div> </div> </div> Bank of Japan Banking Bond Business Central Banks Economic bubbles Economy ETC European Central Bank fed Finance Financial crises Financial crisis Financial market Great Recession Housing Bubble John Hussman Market liquidity Money People's Bank of China Precious Metals Purchasing Power Real estate Real estate bubble Recession Risk Management S&P S&P 500 Systemic risk US Federal Reserve Sat, 22 Jul 2017 16:13:27 +0000 Tyler Durden 600267 at Mueller Tries To Turn Manafort In Trump Russia Probe <p>Special Counsel Robert Mueller&rsquo;s full-court press on anyone and everyone involved with the Trump campaign has finally begun &ndash; and the first target in his sights is, of course, former Trump Campaign Manager Paul Manafort, by far the easiest mark. According to <a href="">Reuters,</a> Mueller and his team are trying to recruit Manafort as a cooperating witness in the Russia investigation in exchange for immunity for possible money laundering charges.</p> <p>The focus on Manafort isn&#39;t a surprise. Not only did Manafort attend the now-infamous June 2016 Russia meeting organized by Donald Trump Jr., but investigators have already been scrutinizing his ties to deposed Ukrainian President Viktor Yanukovych, along with several shady real-estate deals.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;<strong>U.S. investigators examining money laundering accusations against President Donald Trump&rsquo;s former campaign manager Paul Manafort hope to push him to cooperate with their probe into possible collusion between Trump&#39;s campaign and Russia, two sources with direct knowledge of the investigation said.</strong></p> <p>&nbsp;</p> <p>Special Counsel Robert Mueller&#39;s team <strong>is examining Manafort&#39;s financial and real estate records in New York as well as his involvement in Ukrainian politics,</strong> the officials said.&rdquo;</p> </blockquote> <p>Specifically, Special Counsel Robert Mueller&#39;s team is investigating several New York City real estate deals involving Manafort for evidence that the properties might have been paid for with money funneled to Manafort by former Ukrainian President Viktor Yanukovych. The former Ukrainian leader hired Manafort&rsquo;s firm to do political consulting work. <strong>Last summer, ledgers found by Ukrainian investigators surfaced purporting to show millions of dollars in undisclosed payments to Manafort&rsquo;s firm, though they haven&rsquo;t been proved genuine.</strong></p> <p><a href=""><img alt="" src="" style="width: 500px; height: 402px;" /></a></p> <p>According to Reuters&#39; anonymous presumably government sources, <strong>Manafort bought three NYC properties between 2006 and 2013, arousing suspicion from then-US Attorney for the Southern District of New York Preet Bharara, who had been looking into the source of Manafort&rsquo;s funds up until he was fired by President Donald Trump,</strong> along with dozens of other Obama-appointed US attorneys.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;Between 2006 and 2013, Manafort bought three New York properties, including one in Trump Tower in Manhattan. He paid for them in full and later took out mortgages against them. A former senior U.S. law enforcement official said that tactic is often used as a means to hide the origin of funds gained illegally. Reuters has no independent evidence that Manafort did this.&rdquo;</p> </blockquote> <p><strong>Because collusion isn&#39;t a specific crime, obtaining evidence that could justify a criminal charge against Manafort is believed to be crucial if the government wants to turn him against President Donald Trump, or another figure involved in the campaign, </strong><a href="">Reuters</a> noted.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>&quot;If Mueller&#39;s team can threaten criminal charges against Manafort, they could use that as leverage to convince him to cooperate,&quot; </strong>said one of the sources.</p> </blockquote> <p><strong>This should be obvious to anyone who&rsquo;s at all familiar with the workings of the US criminal justice system. </strong>But what&rsquo;s infuriating about this strategy is that the threatened charges don&rsquo;t necessarily need to be related to Manafort&rsquo;s activities as Trump&rsquo;s campaign manager. <strong>Apart from the fact that one of the properties was a condo in Trump Tower, Manafort&rsquo;s dealings with Yanukovych have nothing to do with Trump &ndash; yet hysterical liberals, and now maybe the DOJ, <em>will fixate on the optics of the situation without regarding the facts.</em></strong></p> <p>Not to mention that Manafort was forced out of the Trump campaign after only two months because of his dealings with Yanukovych.</p> <p>Manafort&rsquo;s representatives denied assertions that he is already cooperating with Mueller&rsquo;s team. His spokesman, Jason Maloni, said, <strong>&ldquo;Paul Manafort is not a cooperating witness. Once again there is no truth to the disinformation put forth by anonymous sources and leakers.&rdquo;</strong></p> <p>Mueller is focusing on the Trump associates involved in the June 2016 meeting with Russian lawyer Natalia Veselnitskaya, including the president&rsquo;s eldest son, Donald Trump Jr., Senior Adviser to the President and Trump son-in-law Jared Kushner and Manafort. Kushner has risked losing his security clearance for failing to disclose meetings with certain Russian officials, and Don Jr. set up the meeting with Veselnitskaya and her associates, responding enthusiastically to publicist Rob Goldstone&rsquo;s claim that Trump would be given damaging opposition research on Hillary Clinton that was compiled by Russian intelligence, answering an email with the now-famous line &ldquo;if it&rsquo;s what you say it is, then I love it.&rdquo;</p> <p>Manafort and Trump Jr. have managed to put off a public hearing before the Senate Judiciary Committee by agreeing to provide records to the panel and to be privately interviewed ahead of any public session. But their day in the spotlight likely can&rsquo;t be avoided indefinitely. In the meantime, presuming Mueller comes up short in his investigation into Manafort, we wonder who the special counsel will put the screws to next?<br />&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="481" height="268" alt="" src="" /> </div> </div> </div> American people of German descent Business DOJ Donald Trump Donald Trump Donald Trump Jr. Donald Trump presidential campaign Jared Kushner Judiciary Committee Natalia Veselnitskaya New York City Paul Manafort Politics Politics of the United States Real estate Reuters Russian intelligence Russian interference in the 2016 United States elections Senate Trump Tower United States Sat, 22 Jul 2017 15:35:08 +0000 Tyler Durden 600265 at David Stockman Warns The Market's "Chuck Prince Moment" Has Arrived... "Only More Dangerous" <p><a href="">Authored by David Stockman via Daily Reckoning,</a></p> <p>On July 10, 2007 former Citigroup CEO Chuck Prince famously said what might be termed the &ldquo;speculator&rsquo;s creed&rdquo; for the current era of Bubble Finance. Prince was then canned within four months but as of that day his minions were still slamming the&rdquo;buy&rdquo; key good and hard:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>&ldquo;When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you&rsquo;ve got to get up and dance. We&rsquo;re still dancing,&rdquo; </strong>he said in an <a href="" rel="noopener" target="_blank">interview with the FT</a> in Japan.</p> </blockquote> <p>We are at that moment again. Only this time the danger of a thundering crash is far greater. That&rsquo;s because the current blow-off top comes after nine years of even more central bank policy than Greenspan&rsquo;s credit and housing bubble.</p> <p>The Fed and its crew of traveling central banks around the world have gutted honest price discovery entirely. They have turned global financial markets into outright gambling dens of unchecked speculation.</p> <p>Central bank policies of massive quantitative easing (QE) and zero interest rates (ZIRP) have been sugar-coated in rhetoric about &ldquo;stimulus&rdquo;, &ldquo;accommodation&rdquo; and guiding economies toward optimal levels of inflation and full-employment.</p> <p><strong>The truth of the matter is far different.</strong> The combined $15 trillion of central bank balance sheet expansion since 2007 amounts to monetary fraud of epic proportions.</p> <p>The massive injection of fiat credit has drastically falsified prices in the debt and money markets. <strong>Through the channels of cap rates, carry trades and corporate financial engineering, the prices of equities and all other risk assets, have been falsified too.</strong></p> <p><img alt="20 Years of Massive Central Bank Bond Buying" src="" style="height: 363px; width: 600px;" /></p> <p>Bond and stock prices are way too high, and that reality has infected the very foundations of the financial system. Like the hapless Chuck Prince last time, today&rsquo;s traders and robo-machines have lost all contact with the fundamentals of corporate performance, macroeconomic outlooks and the political risks of a Washington.</p> <p><strong>Traders today are just dancing &ndash; blindly. That&rsquo;s why the Russell 2000 hit 1442 the other day, capitalizing the earnings of small and mid-cap domestic companies at 87.5 times.</strong></p> <p>That&rsquo;s crazy in its own right. As measured by valued added output of the U.S. business sector, the main street economy &ndash; where most of these companies live &mdash;&nbsp;has expanded at a tepid 2.1% &nbsp;annual rate since 2002. By contrast, the RUT index has increased by 10% per annum since then.</p> <p>At the same time, the level of speculation in the hyper-momentum tech stocks is even more stunning.</p> <p><strong>We are in the blow-off stage of the Fed&rsquo;s third and greatest bubble of this century. Yet the stock market has narrowed drastically during the last thirty months, as is typical of a speculative mania. This narrowing means that the price-earnings ratio (PE) among the handful of big winners have soared.</strong></p> <h2><u>FAANGs and Bubble Finance</u></h2> <p>In the case of &nbsp;the so-called &ldquo;FAANGs + M&rdquo; (Facebook, Apple, Amazon, Netflix, Google and Microsoft), the group&rsquo;s weighted average PE multiple has increased by 50%.</p> <p>That&rsquo;s caused the market cap of these six super-momentum stocks to soar from $1.7 trillion to $3.1 trillion during the period or by 82%.</p> <p>The combined earnings of the group have grown by just 20%. 75% of this huge gain in market cap is attributable to multiple expansion, not operating performance.</p> <p><strong>The degree to which the casino&rsquo;s speculative mania has been concentrated in the FAANGs + M &nbsp;can also be seen by contrasting them with the other 494 stocks in the S&amp;P 500. The market cap of the index as a whole rose from $17.7 trillion in January 2015 to $21.2 trillion at present, meaning that the FAANGs + M account for 40% of the entire gain!</strong></p> <p>If this concentrated gain in a handful of stocks sounds familiar that&rsquo;s because this rodeo has been held before. The Four Horseman of Tech (Microsoft, Dell, Cisco and Intel) at the turn of the century saw their market cap soar from $850 billion to $1.65 trillion or by 94% during the manic months before the dotcom peak.</p> <p>At the March 2000 peak, Microsoft&rsquo;s PE multiple was 60 times, Intel&rsquo;s was 50 times and Cisco&rsquo;s hit 200 times. Those nosebleed valuations were really not much different than Facebook today at 40, Amazon at 190 and Netflix at 217 times PE.</p> <p><strong>The point is, even great companies do not escape drastic over-valuation during the blow-off stage of bubble peaks.</strong></p> <p>That spectacular collapse was not due to a meltdown of their sales and profits. Like the FAANGs +M today, the Four Horseman were quasi-mature, big cap companies that never really stopped growing.</p> <p>For example, Cisco&rsquo;s revenues have increased from $15 billion to $50 billion annually during the last 17 years and its net income has tripled to $10 billion. Yet Cisco&rsquo;s market cap today is just $160 billion or only 30% of its 17-years ago bubble peak.</p> <p><strong>The reason is PE normalization. </strong>In this case, the company&rsquo;s hideously inflated 200 times PE multiple imploded with the tech crash. It now stands at 15 times PE.</p> <h2><u>Amazon and the&nbsp;Chuck Prince Market Redux</u></h2> <p><strong>Amazon is now set for that kind of PE implosion during this cycle. It&rsquo;s stock price doubled from $285 per share in January 2015 to $575 by October of that year; and then it doubled again to $1026 in the 20 months since.</strong></p> <p>Along the way it picked up a hefty $350 billion in added market cap. That&rsquo;s nearly $12 billion of value gain per month!</p> <p>Amazon is now 24 years-old, not a start-up; and it hasn&rsquo;t invented anything explosively new like the iPhone or personal computer. Yes, it is taking retail market share by leaps and bounds, but that&rsquo;s inherently a one-time gain that can&rsquo;t be capitalized to infinity.</p> <p>Indeed, 91% of its sales involves sourcing, moving, storing and delivering goods &mdash;&nbsp;a sector of the economy that has grown by just 2.2% annually in nominal dollars for the last decade.</p> <p>Amazon embodies the speculative mania of the current market. It is simply ludicrous to put a multiple of 190 times PE on a company that runs a profitless $130 billion e-Commerce sales juggernaut.</p> <p>Even as its stock price has tripled during the last 30 months, AMZN has experienced two sharp drawdowns of 28% and 12%, respectively. As shown in the first chart below, both times it plunged to its 200-day moving average in a matter of a few weeks.</p> <p><strong>A similar drawdown to its 200-day moving average today would result in an immediate 16% sell-off. But when, not if, the broad market plunges into a long overdue correction the ultimate drop will exceed that by a greater magnitude.</strong></p> <p><img alt="200-day Moving Average Amazon" src="" style="height: 521px; width: 600px;" /></p> <p><strong>In the meanwhile, the market mindlessly melts-up because the Fed has destroyed all of Wall Street&rsquo;s natural forces of financial discipline.</strong> Eight years of central bank money printing and intrusion have destroyed short-sellers and caused day-traders and robo-machines to be wired to buy every dip.</p> <p>Never mind about the gong show in Washington. Or even the fact that the Keynesian economists in the Fed&rsquo;s Eccles Building does actually intend to normalize rates and shrink the Fed&rsquo;s balance sheet.</p> <p>The talking heads wandering around Wall Street have come to the delusional belief that the bubble can live forever without help from Washington or the Fed.</p> <p><strong>With only a small share of companies having reported, LTM earnings for the S&amp;P 500 have already dropped below $105 per share on a GAAP basis. That&rsquo;s still below the $106 per share posted way back in September 2014 and barely above the $100 per share reported in 2013.</strong></p> <p><img alt="What Earning Growth Oil Material Busy Cycling" src="" style="height: 468px; width: 600px;" /></p> <p><u><strong>Make no mistake, this is the Chuck Prince Market Redux. </strong></u>Only the daredevils and Wall Street dancing machines would dare buy the S&amp;P 500 at 25 times PE, the Russell 2000 at 88 times PE, Amazon at 190 times PE.</p> <p>For everyone else, the present blow-off top is surely a godsend.</p> <p><em><strong>Never has there been a better opportunity to get out of harm&rsquo;s way, nor a clearer warning that a thundering crash is waiting just around the bend.</strong></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="692" height="384" alt="" src="" /> </div> </div> </div> Apple Bond Business Central Banks Citigroup Day trading Dell Economic bubble Economic history of the Netherlands Economy Finance GAAP Gambling Google Housing Bubble Japan Main Street Market capitalization Market Share Meltdown Money PE Multiple Price–earnings ratio Quantitative Easing Real estate bubble Reality Russell 2000 Russell 2000 RUT S&P 500 Short Stock market US Federal Reserve Sat, 22 Jul 2017 15:01:22 +0000 Tyler Durden 600266 at MiNG THe DePLoRaBLe... <p><a href="" title="MING THE DEPLORABLE"><img src="" alt="MING THE DEPLORABLE" width="642" height="1024" /></a></p> <script src="//"></script> Baseball Hall of Fame balloting Education Politics Sat, 22 Jul 2017 14:45:49 +0000 williambanzai7 600264 at Man Behind Trump "Dossier" Subpoenaed After Refusing To Testify, Will Plead The Fifth <p>For all the talk of obstruction and interference by the Trump camp, it's neither Donald Trump Jr. nor Paul Manafort who are challenging their scheduled testimony in the Senate next Wednesday, but rather the man who according to many started the whole "Trump Russia collusion" narrative, who is doing everything in his power to avoid testifying next week. </p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">FUSION GPS head Glenn Simpson won't testify before Senate Judiciary next week, his rep attacks "partisan" hearing and vows to plead Fifth</p> <p>— Manu Raju (@mkraju) <a href="">July 21, 2017</a></p></blockquote> <script src="//"></script><p>On Friday, attorneys for Glenn Simpson, a former WSJ reporter who now runs the infamous Washington political intelligence firm Fusion GPS - best known for compiling the salacious "dossier" of unverified research about President Trump - told the Senate Judiciary Committee in a letter that their <strong>client was on vacation through July 31 and traveling abroad through August 3, and would be unavailable for next week’s hearing. </strong>Perhaps for writers of opposition research fiction, vacations take precedence over being summoned to Congress.</p> <p><a href=""><img src="" width="500" height="333" /></a><br /><em>Fusion GPS co-founder Glenn Simpson</em></p> <p>As a reminder, <strong>Simpson’s Fusion GPS is the firm which hired former British intelligence officer Christopher Steele, and his London-based Orbis Business Intelligence, to conduct opposition research on then presidential candidate Donald Trump, resulting in a 35-page dossier that was widely shared in political and media circles during and after the 2016 election. </strong>Steele and Orbis are currently being sued in the U.S. and U.K. by Aleksej Gubarev, a Russian tech executive who says he was falsely accused in the dossier of hacking the Democratic National Committee’s email systems.<strong><br /></strong></p> <p>McClatchy News recently reported that Steele filed new documents in that lawsuit. In one, dated May 18, Steele says that he was instructed by Fusion GPS to meet with reporters at various outlets in order to publicize some of the allegations made in the dossier. It has been widely known that Fusion GPS and Steele were in contact with reporters to discuss the dossier. It has been reported that rumors of the dossier were floating around in Washington, D.C. political and journalist circles for months prior to BuzzFeed’s decision to publish it on Jan. 10.</p> <p>Intelligence agencies made the existence of the dossier known to Trump in a January meeting. The dossier contains unverified, hyperbolic and in some cases, disproven, information about Trump’s activities and engagement with Russians. It served as a the basis for many of the ongoing allegations of Trump camp collusion with Russia. </p> <p><em><a href=""><img src="" width="510" height="289" /></a><br />Ex-British spy Christopher Steele was the author of the Trump Dossier, which Fusion </em><br /><em>GPS put together as opposition research by Trump political opponents in 2016</em></p> <p>In any case, Simpson's attorneys asked that their client be excused from appearing, adding that allegations he had failed to register as a foreign agent were "nothing more than an effort to smear him."&nbsp; The lawyers also said that they were "profoundly disturbed" that the hearing had been expanded due to "partisan agendas" to include allegations of Russian meddling in the U.S. election and possible ties between the Trump campaign and Russia. <strong>The letter also said they were prepared to fight a subpoena and invoke Mr. Simpson’s constitutional right not to give testimony if compelled to appear.</strong></p> <p>According to the WSJ, <strong>the letter explaining Simpson’s refusal to appear cites his obligations to keep his client information confidential and his First Amendment right under the Constitution to engage in political speech and political activity, </strong>as well as his Fifth Amendment reight to refuse self-incriminating testimony, also known as the "<em>I admit I am guilty"</em> option. </p> <p>His gambit did not work however, and late on Friday the Committee issued a subpoena to compel Simpson to testify next Wednesday. </p> <p>Committee Chairman Chuck Grassley and the committee’s top Democrat, Dianne Feinstein, in a joint statement said: “<strong>Glenn Simpson, through his attorney, has declined to voluntarily attend Wednesday’s Judiciary Committee hearing regarding compliance with the Foreign Agents Registration Act. Therefore, a subpoena has been issued to compel his attendance. Simpson’s attorney has asserted that his client will invoke his Fifth Amendment rights in response to the subpoena.</strong>”</p> <p>Yet while the vacation-challenged Simpson is afraid of revealing the true identity of his "client(s)" who commission the Trump smear piece, also on Wednesday appearing in the Senate will be Donald Trump Jr. and Paul Manafort, along with Russia sanctions activist and businessman Bill Browder. The Judiciary Committee said Messrs. Trump Jr. and Manafort are providing documents to the committee and are still negotiating the terms of their testimonies. </p> <p>As the <a href="">WSJ adds</a>, in addition to the dossier compiled on Trump, Grassley has alleged that Simpson’s firm has worked with a Russian-American lobbyist on a campaign against a package of Russian sanctions that was being considered by Congress. That lobbyist was present in a meeting in Trump Tower in June 2016 with the younger Mr. Trump. <strong>Grassley has raised questions about whether Simpson’s firm should have registered as a foreign agent for its work on the Russia sanctions</strong>. </p> <p>And while Simpson’s attorney called those questions and allegations “nothing more than an effort to smear him and his firm”, many are curious to find out just who it was that worked with Fusion GPS to launch the narrative that Trump's victory in the elections was the result of Kremlin interference.</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="575" height="319" alt="" src="" /> </div> </div> </div> British intelligence Business Business Intelligence Christopher Steele Congress Democratic National Committee Donald Trump Donald Trump Donald Trump–Russia dossier Draft:Timeline of the Trump-Russia Scandal First Amendment Fusion GPS Glenn R. Simpson GPS International relations Judiciary Committee Law Links between Trump associates and Russian officials Paul Manafort Politics Politics of the United States Russian interference in the 2016 United States elections Senate SPY Testimony Washington D.C. Sat, 22 Jul 2017 14:26:48 +0000 Tyler Durden 600263 at