http://www.zerohedge.com/fullrss2.xml/etf_headlines/etf_headlines/ETF-in-Focus-GXC-March-11-2013.html en America Has A Hole In It's Head http://www.zerohedge.com/news/2017-02-27/america-has-hole-its-head <p><a href="http://kunstler.com/clusterfuck-nation/a-hole-in-the-head/"><em>Via Howard Kunstler of Kunstler.com,</em></a></p> <p>We need a new civil war like we need a hole in the head. But that&rsquo;s just it: <strong>America has a hole in its head.</strong> It&rsquo;s the place formerly known as The Center. It didn&rsquo;t hold.<strong> It was the place where people of differing views could rely on each other to behave reasonably around a touchstone called the National Interest. </strong>That abandoned place is now cordoned off, a Chernobyl of the mind, where figures on each side of the political margin fear to even sojourn, let alone occupy, lest they go radioactive.</p> <p>Anyway, <strong>the old parties at each side of the political transect, are melting down in equivalent fugues of delusion, rage, and impotence</strong> &mdash; as predicted here through the election year of 2016. They can&rsquo;t make anything good happen in the National Interest. They can&rsquo;t control the runaway rackets that they engineered in legislation, policy, and practice under the dominion of each party, by turns, going back to Lyndon B. Johnson, and so they have driven themselves and each other insane.</p> <p><strong>Trump and Hillary perfectly embodied the climactic stage of each party before their final mutual sprint to collapse.</strong> Both had more than a tinge of the psychopath. Trump is the bluff that the Republicans called on themselves, having jettisoned anything identifiable as coherent principles translatable to useful action. Hillary was an American Lady Macbeth attempting to pull off the ultimate inside job by any means necessary, her wickedness so plain to see that even the voters picked up on it. These two are the old parties&rsquo; revenge on each other, and on themselves, for decades of bad choices and bad faith.</p> <p>The anti-intellectual Trump is, for the Right, the answer to the Intellectual-Yet-Idiots (IYIs) that Nassim Taleb has so ably identified as infesting the Left. It is a good guess that President Trump has not read a book since high school, and perhaps never in his entire life. <strong><em>But are you not amazed at how the IYIs of the Left have savaged the life-of-the-mind on campus, and out in the other precincts of culture where free inquiry once flourished?</em></strong> From the craven college presidents who pretend that race-segregated &ldquo;safe spaces&rdquo; represent &ldquo;inclusiveness,&rdquo; to <em>The New York Times</em> editors who pretend in headlines that illegal immigrants have done nothing illegal, the mendacity is awesome.</p> <p><u><strong>Something like this has happened before in US history and it may be cyclical. </strong></u>The former Princeton University professor and President, Woodrow Wilson, dragged America into the First World War, which killed over 53,000 Americans &nbsp;(as many as Vietnam) in only eighteen months. He promulgated the Red Scare, a bit of hysteria not unlike the Race and Gender Phobia Accusation Fest on the Left today. Professor Wilson was also responsible for creating the Federal Reserve and all the mischief it has entailed, especially the loss of over 90 percent of the dollar&rsquo;s value since 1913. Wilson, the perfect IYI of that day.</p> <p>The reaction to Wilson was Warren Gamaliel Harding, the hard-drinking, card-playing Ohio Main Street boob picked in the notorious &ldquo;smoke-filled room&rdquo; of the 1920 GOP convention. He invoked a return to &ldquo;normalcy,&rdquo; which was not even a word (try <em>normality</em>), and was laughed at as we now laugh at Trump for his idiotic utterances such as &ldquo;win bigly&rdquo; (or is that big league?). Harding is also known for confessing in a letter: &ldquo;I am not fit for this office and should never have been here.&rdquo; Yet, in his brief term (died in office, 1923), Harding navigated the country successfully through a fierce post-World War One depression simply by not resorting to government intervention.</p> <p><strong>Something like the same dynamic returned in 1952 when General Eisenhower took over from Harry Truman and the defeated Democratic nominee Adlai Stevenson quipped, &ldquo;The New Dealers have been replaced by the car dealers.&rdquo;</strong> Ha! If he only knew! After all, who was on board as Ike&rsquo;s Veep? None other than Tricky Dick Nixon, soon to be cast as America&rsquo;s quintessential used car salesman.</p> <p>Well, those were the days, and those days are over. So much has gone wrong here in the past thirty years and the game of <em>salugi</em> being played by the Dems and the GOP is not helping any of it. And that is why the two parties are heading toward extinction. We&rsquo;re in the phase of intra-party factional conflict for now. Each party has its own preliminary civil war going on. The election of Obama era Labor Secretary and party hack, Tom Perez, as DNC chair yesterday has set the Bernie Sanders Prog troops into paroxysms of animadversion. They&rsquo;re calling out all up-and-down the Twitterverse for a new party of their own. Trump faces his own mutineers on the Right, and not just the two cheerleaders for World War Three, John McCain and Lindsey Graham. Coming out of the Conservative CPAC meeting last week, just about his whole agenda was written off as (<em>cough cough</em>) politically impractical by the poobahs in attendance: reform-and-replacement of the Affordable Care Act, tax reform, the promised massive infrastructure-building stimulus orgy, the border wall, the trade blockages.</p> <p><strong>Anon, comes the expiration of the current debt ceiling, at around $20 trillion, in mid-March. Do you imagine that the two parties warring with each other in congress will be able to come to some resolution over that? Fuggeddabowdit.</strong> The Democrats have every incentive to let President Trump stew in this fatal brine like a Delancey Street corned beef. What it means, of course, is that the US Treasury runs out of ready cash in mid-summer and some invoices just don&rsquo;t get paid, maybe even some bigly ones like social security checks and Medicare bills. Won&rsquo;t that be a spectacle? That&rsquo;s where Trump becomes a political quadriplegic and the voters start jumping off the dying parties like fleas off of two dead dogs.</p> <p><strong>By then, plenty of other mischief will be afoot in the world, including the fractious outcome of elections in France and the Netherlands, with the European Union spinning into its own event horizon, and currency instability like the world has never seen before. Enjoy the remaining weeks of normality.</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="251" height="149" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20170227_hole.jpg?1488215915" /> </div> </div> </div> http://www.zerohedge.com/news/2017-02-27/america-has-hole-its-head#comments American people of German descent B+ Bernie Sanders Business Climate change skepticism and denial Debt Ceiling Donald Trump Donald Trump presidential campaign European Union European Union Federal Reserve France headlines John McCain Labor Legal affairs of Donald Trump Main Street Medicare Medicare Nassim Taleb Netherlands New York Times None Ohio Politics Politics of the United States Princeton University Republican Party The Apprentice Tricky Dick U.S. Treasury United States US Federal Reserve WWE Hall of Fame Mon, 27 Feb 2017 20:22:47 +0000 Tyler Durden 589053 at http://www.zerohedge.com You Can’t Make the Fed Better Just by Hiring Different People http://www.zerohedge.com/news/2017-02-27/bush-flogs-book-he-probably-didn%E2%80%99t-write-talks-down-trump-lauer <div id="article_main" class="article_text" style="box-sizing: border-box; font-size: 16px; line-height: 24px; padding-bottom: 8px; color: #303030; font-family: Georgia, &quot;Times New Roman&quot;, Times, serif;"> <div id="watch-description-text" style="box-sizing: border-box;"> <blockquote style="box-sizing: border-box; padding: 10px 20px; margin: 0px 0px 20px; font-size: 17.5px; border-left: 5px solid #eeeeee;"> <p id="eow-description" style="box-sizing: border-box; font-size: 16px; line-height: 24px; padding-bottom: 8px;">Via <a href="http://www.thedailybell.com">The Daily Bell</a></p> <blockquote style="box-sizing: border-box; padding: 10px 20px; margin: 0px 0px 20px; border-left: 5px solid #eeeeee;"><p style="box-sizing: border-box; font-size: 16px; line-height: 24px; padding-bottom: 8px;">Trump’s Fed Can Start a Central Bank Revolution … President Donald Trump will select three members of the Federal Reserve board during his term in office, including a replacement chair for Janet Yellen when her appointment expires early next year. He should seize the chance to refresh the Fed with faces from the business community, adding executives to the roster of PhD economists who currently run monetary policy in most of the world. -Bloomberg</p> </blockquote> <p style="box-sizing: border-box; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px;">The Federal Reserve and its defenders are changing the subject. At one point Trump had talked about auditing the Fed and others had talked about using the audit to damage the Fed so badly that it would have to shut down.</p> <p style="box-sizing: border-box; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px;">But now the end result has shifted. The idea is not to shut it down but to make it better by hiring people from the business community instead of from academia.</p> <p style="box-sizing: border-box; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px;">More:”</p> <blockquote style="box-sizing: border-box; padding: 10px 20px; margin: 0px 0px 20px; border-left: 5px solid #eeeeee;"><p style="box-sizing: border-box; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px;">Appointing executives to the Fed who’ve had to take fiscal and monetary policy into account when making decisions on where and when to build new factories or make other capital expenditure decisions makes sense.</p> <p style="box-sizing: border-box; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px;">Torsten Slok, the chief international economist for Deutsche Bank AG, sent around a chart last week showing how the composition of the Fed has become increasingly focused on PhD economists:</p> <p style="box-sizing: border-box; font-size: 16px; line-height: 24px; padding-bottom: 8px;">It’s little wonder that in this populist age central bank independence is under attack. As Bloomberg News reported on Monday, the rise of populism is putting pressure on central banks as “institutions stuffed with unelected technocrats wielding the power to affect the economic fate of millions.”</p> </blockquote> <p style="box-sizing: border-box; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px;">The emphasis on hiring business people for the Fed comes at a very good time. The Fed is in a great deal of trouble and only will become &nbsp;even more mired in difficulty,</p> <p style="box-sizing: border-box; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px;">We read somewhere that pre-Internet it was easy to confuse people about what the Fed did. But now with the Internet a click away, it is very easy. Everybody knows or seems to know.</p> <p style="box-sizing: border-box; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px;">The Fed basically fixes the volume and price of money. That’s indefensible. Price fixing is anti-market. It makes no sense to have an agency fixing the price of the US dollar.</p> <p style="box-sizing: border-box; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px;">But the Fed will fight to the bitter end to keep its anti-market privileges, which it pretends benefits the market.</p> <p style="box-sizing: border-box; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px;">There can be some changes of course. Perhaps the Fed has hired too many academics and not enough business people. That’s what the book “Fed UP” by Danielle DiMartino Booth maintains.</p> <p style="box-sizing: border-box; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px;">She believes if more business people are hired, the Fed will recover its former glory. How is this possible. The Fed was never glorious. It was always an entity that tried to fix prices for a small group of bankers.</p> <p style="box-sizing: border-box; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px;">Making the Fed better means making it better at stealing.</p> <p style="box-sizing: border-box; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px;">Ms. Booth came along at a good time. Her book is being lifted up by desperate Fed workers who are trying to change the subject from shutting the Fed down to improving it.</p> <p style="box-sizing: border-box; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px;">It may result in a bestselling book but it won’t make a bit of difference for the Fed. So long as the Fed continues to fix the volume and value of money, impoverishing the middle class in the process, nothing is going to change.</p> <p style="box-sizing: border-box; margin-bottom: 10px; font-size: 16px; line-height: 24px; padding-bottom: 8px;"><span style="box-sizing: border-box; font-weight: bold;">Conclusion:</span>&nbsp;The Fed will remain an evil, price fixing entity. Any changes will be merely cosmetic.</p> </blockquote> <p style="box-sizing: border-box; margin-top: 0.25em; margin-bottom: 0.75em; font-style: inherit; font-variant: inherit; font-weight: inherit; font-stretch: inherit; line-height: 1.3; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; color: #333333;"><span style="box-sizing: border-box; font-style: inherit; font-variant: inherit; font-weight: inherit; font-stretch: inherit; font-size: 24px; line-height: inherit; font-family: Roboto, sans-serif; color: #303030;"><a href="http://www.thedailybell.com/news-analysis/the-world-needs-globalization-it-needs-trade/" style="box-sizing: border-box; font-style: inherit; font-variant: inherit; font-weight: inherit; font-stretch: inherit; font-size: inherit; line-height: 1.2; font-family: inherit; word-wrap: break-word; color: #222222; outline-style: none; outline-width: 0px;">‘The World Needs Globalization, It Needs Trade’</a>&nbsp;</span></p> <p style="box-sizing: border-box; margin-top: 0.25em; margin-bottom: 0.75em; font-style: inherit; font-variant: inherit; font-weight: inherit; font-stretch: inherit; line-height: 1.3; font-family: Georgia, &quot;Times New Roman&quot;, &quot;Bitstream Charter&quot;, Times, serif; color: #333333;"><span style="box-sizing: border-box; font-style: inherit; font-variant: inherit; font-weight: inherit; font-stretch: inherit; font-size: 24px; line-height: inherit; font-family: Roboto, sans-serif; color: #303030;"><a href="http://www.thedailybell.com/news-analysis/republicans-reeling-in-fed/" style="box-sizing: border-box; font-style: inherit; font-variant: inherit; font-weight: inherit; font-stretch: inherit; font-size: inherit; line-height: 1.2; font-family: inherit; word-wrap: break-word; color: #1e439a; outline-style: none; outline-width: 0px;">Republicans Reeling in Fed?</a></span></p> <div class="top-article-title" style="box-sizing: border-box; font-style: inherit; font-variant: inherit; font-weight: inherit; font-stretch: inherit; font-size: 24px; line-height: 26px; font-family: Roboto, sans-serif; text-shadow: rgba(255, 255, 255, 0.247059) 0px 1px 0px;"><a href="http://www.thedailybell.com/news-analysis/trumps-complications-in-draining-the-swamp/" style="box-sizing: border-box; font-style: inherit; font-variant: inherit; font-weight: inherit; font-stretch: inherit; font-size: inherit; line-height: 1.2; font-family: inherit; word-wrap: break-word; color: #1e439a; outline-style: none; outline-width: 0px;">Trump’s Complications in Draining the Swamp<br style="box-sizing: border-box;" />&nbsp;</a></div> <div class="top-article-title" style="box-sizing: border-box; font-style: inherit; font-variant: inherit; font-weight: inherit; font-stretch: inherit; font-size: 24px; line-height: 26px; font-family: Roboto, sans-serif; text-shadow: rgba(255, 255, 255, 0.247059) 0px 1px 0px;"><em style="box-sizing: border-box; font-variant: inherit; font-weight: inherit; font-stretch: inherit; font-size: inherit; line-height: inherit; font-family: inherit;">and many more, just a click away ...</em></div> </div> </div> http://www.zerohedge.com/news/2017-02-27/bush-flogs-book-he-probably-didn%E2%80%99t-write-talks-down-trump-lauer#comments American people of German descent American studies Bloomberg News Bush family Business Business Central bank Central Banks Conservatism in the United States Deutsche Bank Donald Trump Donald Trump Economics Economy Fed UP Federal Reserve Federal Reserve System George H. W. Bush George W. Bush Janet Yellen Janet Yellen Livingston family Monetary Policy North American Union Pentagon Politics Schuyler family Trump: The Art of the Deal United States US Federal Reserve W. Mon, 27 Feb 2017 20:16:59 +0000 TDB 589067 at http://www.zerohedge.com 'Out Of The Blue', March Rate Hike Odds Soar To Cycle Highs http://www.zerohedge.com/news/2017-02-27/out-blue-march-rate-hike-odds-soar-cycle-highs <p>Having drifted flat for weeks at around a 1-in-3 chance - despite endless jawboning from The Fed - March rate hike odds <span style="text-decoration: underline;">suddenly </span>surged higher today (to up to a 50% probability), or as Reuters put it "<strong>out of the blue."</strong></p> <p>Dallas Fed's Kaplan said this morning that a rate increase should happen sooner than later, adding that<strong><em> "[The Fed] wants to prevent a situation where we fall behind the curve."</em></strong> As Reuters notes this is entirely consistent with his and colleagues' recent comments, but somehow strikes a chord on otherwise uneventful day.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/02/27/20170227_march1.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/02/19/20170227_march1_0.jpg" width="600" height="254" /></a></p> <p>It seems the Fed Funds futures market suddenly decided to catch up to stocks?</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/02/19/20170227_march.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/02/19/20170227_march_0.jpg" width="600" height="299" /></a></p> <p><span style="font-size: 13.008px;">On very heavy volume.</span></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/02/27/20170227_march3.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/02/27/20170227_march3_0.jpg" width="600" height="311" /></a></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/02/27/20170227_march2.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/02/27/20170227_march2_0.jpg" width="600" height="314" /></a></p> <p>Did someone get the nod today? Another Fed leak?</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="957" height="501" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20170227_march2.jpg?1488226180" /> </div> </div> </div> http://www.zerohedge.com/news/2017-02-27/out-blue-march-rate-hike-odds-soar-cycle-highs#comments Business Dallas Fed Economic policy Economy Entertainment FED Federal Reserve System Futures market Jawboning Mass media Odds Reuters Reuters US Federal Reserve Mon, 27 Feb 2017 20:04:59 +0000 Tyler Durden 589066 at http://www.zerohedge.com Trump: "Nobody Knew That Healthcare Could Be So Complicated" http://www.zerohedge.com/news/2017-02-27/trump-nobody-knew-healthcare-could-be-so-complicated <p>After meeting with GOP governors <a href="http://www.zerohedge.com/news/2017-02-26/it-was-pretty-disturbing-briefing%E2%80%9D-why-state-governors-suddenly-got-cold-cold-about-">who, as discussed yesterday, </a>appeared to have gotten cold feet about repealing and replacing Obamacare (or repairing and renaming) if it means millions of Americans - and potential voters - losing coverage, not to mention the end of billions in Federal funding for various projects, President Trump reached an important conclusion: Reforming the health care system is extremely difficult and as he admitted, "nobody knew that healthcare could be so complicated," as Republicans have been slow to unite around a replacement plan for ObamaCare.</p> <p>"I have to tell you, it's an unbelievably complex subject," Trump said after a meeting with conservative governors at the White House.&nbsp; The GOP governors were in D.C. this weekend for their annual conference and met with Trump to talk about various topical issues, however the focus of the conversation appeared to focus largely on healthcare. </p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/02/19/20170227_obo.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/02/19/20170227_obo_0.jpg" width="500" height="376" /></a></p> <p>As reported on Sunday, <a href="http://www.zerohedge.com/news/2017-02-26/it-was-pretty-disturbing-briefing%E2%80%9D-why-state-governors-suddenly-got-cold-cold-about-">governors - as well as Congressional republicans - have been split </a>on what should be done with ObamaCare's Medicaid expansion, which brought health coverage to many even in deep-red states. While Trump didn't publicly address that issue Monday morning, he said ObamaCare's repeal and replacement will give states more flexibility "to make the end result really, really good for them." </p> <p>He had some encouraging words, however, saying that "we have come up with a solution that's really, really good I think. Very good." </p> <p>One hopes that the rest of the governors, not to mention Congress, share his sentiment: after as all Trump himself admitted, it now appears that tax reform is being held hostage by the Obamacare repeal process, as the White House first needs claity on the revised Obamacare costs before it can propose a tax plan, "phenomenal" or otherwise. </p> <p>Trump also dismissed the latest poll which showed support for ObamaCare at an all-time high - to be <a href="http://www.zerohedge.com/news/2017-02-24/msm-touts-new-poll-showing-record-obamacare-support-ignores-14-point-dem-oversample">expected with a 14 Democrat oversample </a>- with 48% viewing the law favorably compared to the 42% who don't. The president responded to this as follows: "People hate it but now they see that the end is coming and they say, 'Oh ,maybe we love it.' There's nothing to love. It's a disaster, folks." </p> <p><iframe src="http://launch.newsinc.com/?type=VideoPlayer/Single&amp;widgetId=1&amp;trackingGroup=69016&amp;playlistId=19132&amp;siteSection=thehill2300_nws_pol_sec&amp;videoId=32048503" width="500" height="281" frameborder="no" scrolling="no"></iframe></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="790" height="428" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/trump%20healthcare%20complicated.jpg?1488223904" /> </div> </div> </div> http://www.zerohedge.com/news/2017-02-27/trump-nobody-knew-healthcare-could-be-so-complicated#comments Business Congress Donald Trump Donald Trump presidential campaign Economic policy of the Donald Trump administration Obamacare Patient Protection and Affordable Care Act Patient Protection and Affordable Care Act replacement proposals Political positions of Donald Trump Politics Republican Party Statutory law The Apprentice United States White House White House WWE Hall of Fame Mon, 27 Feb 2017 19:42:07 +0000 Tyler Durden 589064 at http://www.zerohedge.com Swap Spreads Surge To 5-Year Highs As Debt Ceiling Despair Strikes http://www.zerohedge.com/news/2017-02-27/swap-spreads-surge-5-year-highs-debt-ceiling-despair-strikes <p>It appears <a href="1250ET **&quot;George W. Bush On Trump's Alleged Ties To Russia &quot;We All Need Answers&quot;&quot; 1310ET &quot;Have The Majors Given Up On Canada's Oil Sands&quot; 1330ET &quot;European Gold Nears Brexit Highs As Elections Loom&quot; 1350ET &quot;America Has A Hole In It's Head&quot; 1410ET &quot;Swap Spreads Surge As Debt Ceiling Despair Strikes&quot; 1430ET &quot;Trump To States With Recreational Pot: Drop Dead&quot; 1450ET **&quot;Gas Taxes Set To Surge In Roughly A Dozen States&quot; 1510ET &quot;Ron Paul: On Military And Spending, It's Trump Versus Trump&quot; 1530ET &quot;Dr. Doom's Back: Marc Faber Warns Markets Will Fall &quot;Like An Avalanche... Trump Can't Stop It&quot;&quot; 1550ET &quot;Here's One Alternative; But It's Extremely Unpopular&quot; 1610ET EOD 1630ET &quot;Debunking The Big Lie&quot; 1700ET &quot;Artist's Impression Of The Oscars&quot; 1730ET &quot;France: Deradicalization Of Jihadists A &quot;Total Fiasco&quot;&quot; 1800ET **&quot;GM Pickup Incentives Surge Over 80% As Auto Bubble Continues To Show Signs Of An Imminent Bust&quot; 1830ET &quot;The Cultural Purge Will Not Be Televised&quot; 1900ET &quot;Minimum Wage Massacre - Wendy's Unleashes 1,000 Robots To Counter Higher Labor Costs&quot; 1930ET 2000ET 2030ET 2100ET 2130ET 2200ET 2230ET &quot;Here's How The Deep State Is Trying To Lead Trump Into A Nuclear War&quot; ~~~~~~ 0200ET 0300ET 0400ET &quot;Romania's Unrevolutionary Revolution&quot;">David Stockman&#39;s warnings over the looming debt ceiling debacle</a> has sparked some investors to face up to reality once again. The Treasury-Bill yield curve has <strong>inverted </strong>further and <strong>swap spreads soared to five-year highs</strong>.</p> <p><span>The difference between 2-year swap rates and Treasury yields has widened back to 37.5 basis points which is the <strong>highest since March 2012.</strong> Societe Generale analysts led by<span>&nbsp;</span></span><span>Subadra Rajappa</span><span><span>&nbsp;</span>expect <strong>net bill issuance to drop by about $150 billion as Treasury shrinks its cash balance to $23 billion by the March 15 deadline</strong>.</span></p> <p><span><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/02/19/20170227_debt1.jpg"><img height="313" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/02/19/20170227_debt1_0.jpg" width="600" /></a></span></p> <p><span>And to make things even more clear, s<span>omething odd is going on in the Treasury bill market..</span></span></p> <p><span><span>Bloomberg notes that <strong>investors are willing to pay more for bills maturing in three weeks instead of two.</strong> </span></span></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/02/19/20170227_debt2.jpg"><img height="315" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/02/19/20170227_debt2_0.jpg" width="600" /></a></p> <p><span><span>That&rsquo;s because they don&rsquo;t want to be caught empty handed while the Treasury slows debt sales to push its cash balance lower as part of the 2015 pact to suspend the debt ceiling. <strong>The spread between the March 9 and March 16 bills may get a &ldquo;a little more noticeable&rdquo; as Treasury cuts issuance and provides a &ldquo;clearer sense of how long bill supply is going to be lower than normal&rdquo; going into the March 15 deadline,</strong> Jefferies economist<span>&nbsp;</span></span><span>Thomas Simons</span><span><span>&nbsp;</span>said in a phone interview.</span></span></p> <p><a href="http://www.zerohedge.com/news/2017-02-26/stockman-after-march-15-everything-will-grind-halt">As Stockman warned over the weekend:</a></p> <p><strong>&nbsp;</strong></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>&ldquo;I think what people are missing is this date, March 15<sup>th</sup> 2017.&nbsp; That&rsquo;s the day that this debt ceiling holiday that Obama and Boehner put together right before the last election in October of 2015.</strong>&nbsp; That holiday expires.&nbsp; The debt ceiling will freeze in at $20 trillion.&nbsp; It will then be law.&nbsp; It will be a hard stop.&nbsp; The Treasury will have roughly $200 billion in cash.&nbsp; We are burning cash at a $75 billion a month rate.&nbsp; By summer, they will be out of cash.&nbsp; <strong>Then we will be in the mother of all debt ceiling crises.&nbsp; Everything will grind to a halt.&nbsp; I think we will have a government shutdown.&nbsp; There will not be Obama Care repeal and replace.&nbsp; There will be no tax cut.&nbsp; There will be no infrastructure stimulus.&nbsp; There will be just one giant fiscal bloodbath over a debt ceiling that has to be increased and no one wants to vote for.&rdquo;</strong></p> </blockquote> <p>Stockman also predicts very positive price moves for gold and silver as a result of the coming budget calamity.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/02/19/20170227_debt3.jpg"><img height="316" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/02/19/20170227_debt3_0.jpg" width="600" /></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="504" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20170227_debt2.jpg?1488217903" /> </div> </div> </div> http://www.zerohedge.com/news/2017-02-27/swap-spreads-surge-5-year-highs-debt-ceiling-despair-strikes#comments Business Debt Ceiling Economy Economy of the United States National debt of the United States Presidency of Barack Obama Reality United States United States debt ceiling United States debt-ceiling crisis United States fiscal cliff Yield Curve Mon, 27 Feb 2017 19:30:56 +0000 Tyler Durden 589052 at http://www.zerohedge.com Yes Warren Buffet Stocks Are In A Bubble (Video) http://www.zerohedge.com/news/2017-02-27/yes-warren-buffet-stocks-are-bubble-video <p>By <a href="http://www.econmatters.com/search/label/EconMatters"><span style="text-decoration: underline;"><span style="color: #0066cc;">EconMatters</span></span></a> </p> <p><em><br /></em> </p> <div class="separator" style="clear: both; text-align: center;"><a title="Open in new window" class="external" href="https://4.bp.blogspot.com/-SUM-7TOAOzQ/WLR35WqQrsI/AAAAAAAAOLE/rIjO8l2YO4IG0rQVDLhKzaR4P-B__rcHgCLcB/s1600/e5e8179e4245ab9d1314b214d3c2.jpg" style="margin-left: 1em; margin-right: 1em;" target="_blank"><img src="https://4.bp.blogspot.com/-SUM-7TOAOzQ/WLR35WqQrsI/AAAAAAAAOLE/rIjO8l2YO4IG0rQVDLhKzaR4P-B__rcHgCLcB/s400/e5e8179e4245ab9d1314b214d3c2.jpg" width="400" height="266" border="0" /></a></div> <p> We discuss the valuation question in this video, and Warren Buffet`s assertion that stocks are not in a bubble. Warren didn`t you say to buy when there is Blood in the Streets? Warren Buffet says a lot of contradictory things, take everything he says with a massive grain of Salt. Nobody, professional or amateur investor should be buying stocks at these&nbsp;bubble levels, period!</p> <div class="separator" style="clear: both; text-align: center;"><iframe src="https://www.youtube.com/embed/MTBDbmJGQl0?feature=player_embedded" width="320" height="266" frameborder="0"></iframe></div> <p> © <a href="http://www.econmatters.com/" target="_blank"><span style="text-decoration: underline;"><span style="color: #0066cc;">EconMatters</span></span></a> All Rights Reserved | <a title="Open in new window" class="external" href="http://www.facebook.com/EconMatters" target="_blank"><span style="text-decoration: underline;"><span style="color: #0066cc;">Facebook</span></span></a> | <a title="Open in new window" class="external" href="http://twitter.com/#!/EconMatters" target="_blank"><span style="text-decoration: underline;"><span style="color: #0066cc;">Twitter</span></span></a> | <a title="Open in new window" class="external" href="http://www.youtube.com/c/Econmatters" target="_blank"><span style="text-decoration: underline;"><span style="color: #0066cc;">YouTube</span></span></a> | <a title="Open in new window" class="external" href="http://feedburner.google.com/fb/a/mailverify?uri=EconForecast" target="_blank"><span style="text-decoration: underline;"><span style="color: #0066cc;">Email Digest</span></span></a> | <a title="Open in new window" class="external" href="http://astore.amazon.com/econforecast-20?_encoding=UTF8&amp;node=80" target="_blank"><span style="text-decoration: underline;"><span style="color: #0066cc;">Kindle</span></span></a><strong>&nbsp;</strong><em>&nbsp;</em><span style="text-decoration: underline;">&nbsp;</span></p> http://www.zerohedge.com/news/2017-02-27/yes-warren-buffet-stocks-are-bubble-video#comments Buffet Economic bubble Economy Equity securities Finance Financial markets Hospitality Money Stock Stock market Twitter Twitter Valuation Warren Buffett Mon, 27 Feb 2017 19:17:56 +0000 EconMatters 589062 at http://www.zerohedge.com David Tepper Asks "Why Are Stocks And Bonds Acting So Differently" http://www.zerohedge.com/news/2017-02-27/david-tepper-asks-why-are-stocks-and-bonds-acting-so-differently <p>With bond and stock markets having recently bifurcated, signalling two distinctly different outlooks on the future of the reflation trade, the confusion among the "smartest money" persists. </p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/02/08/bonds%20vs%20stocks.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/02/08/bonds%20vs%20stocks_0.jpg" width="500" height="276" /></a></p> <p>Close up this looks even more divergent.</p> <p>&nbsp;</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/02/19/20170227_3charts1.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/02/19/20170227_3charts1_0.jpg" width="500" height="263" /></a></p> <p>Friday was the 6th day in a row that The Dow and the Long Bond have<br /> risen in price together... <strong>equal record longest streak (1989 and 1994)</strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/02/19/20170224_EOD17.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/02/19/20170224_EOD17_0.jpg" width="500" /></a></p> <p>As we <a href="http://www.zerohedge.com/news/2017-02-26/gundlach-there-stealth-flight-safety-going-and-stocks-are-out-sync">noted last night</a>, in his latest statement to Reuters, DoubleLine's Jeffrey Gundlach sided with bonds, pointing out that "stocks are out of sync with the stealth flight to safety. Lots of hope built in" and adding that "the 10-year Treasury will go below 2.25 percent ... not below 2 percent."&nbsp; </p> <p>On the other hand, speaking to CNBC on Monday, another investing titan, Appalooosa's David Tepper disagreed with Gundlach and said that he remains bullish on the stock rally. </p> <p><strong>"Still long stocks. Still short bonds," </strong>Tepper told CNBC's Scott Wapner. Just like Gundlach, Tepper mused rhetorically "<strong>why are stocks and bonds acting differently? It's as if they're reacting to two different economies."</strong></p> <p>As noted over the past few weeks, as of mid-February, bond prices and stock prices have been moving higher together again, breaking from the so-called "Trumflation" trade that marked the period from the election through the end of January. One explanation for this bifurcation is that as retail investors, inspired by record gains, have been flooding the market using ETFs, even as other institutional clients have been selling, <a href="http://www.zerohedge.com/news/2017-02-25/jpmorgan-institutions-and-hedge-funds-are-using-rally-sell-retail-investors">something JPM noted over the weekend</a>.</p> <p>For Tepper the answer may hide elsewhere, namely in residual central bank liquidity: "<strong>Could be there's too much monetary policy still around the globe? Reaction in markets suggests it's affecting the bond market more.</strong>" This echoes an observation made <a href="http://www.zerohedge.com/news/2017-02-24/german-2y-yield-plunges-record-095-citi-explains-why-it-will-keep-dropping">last week by Citi: </a>the bank's analysts noted that yields on German bunds have been tumbling as a result of the ECB potentially running out of monetizable bonds as soon as the end of the year, prompting traders to frontrun the ECB's purchases, and dragging the 2Y Schatz just shy of -1.00% on Friday.</p> <p>Tepper was not the only one who remains bullish on stocks: also on Monday Warren Buffett, talked up stocks and bashed bonds. U.S. stock prices are "on the cheap side" with interest rates at current levels, Buffett told CNBC's "Squawk Box" on Monday morning, adding there is no sign of a bubble, although he warned that there is always a risk the market "could go down by 20% tomorrow." For now, however, that does not appear to be a concern for the market which remains blanketed by a record sense of complacency about the near-term future, and certainly does not anticipate a bear market any time soon.</p> <p><iframe src="http://player.cnbc.com/p/gZWlPC/cnbc_global?playertype=synd&amp;byGuid=3000596638&amp;size=500_281" width="500" height="281"></iframe></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="1200" height="743" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/tepper%20teaser_2.jpg?1488222671" /> </div> </div> </div> http://www.zerohedge.com/news/2017-02-27/david-tepper-asks-why-are-stocks-and-bonds-acting-so-differently#comments Bear Market Bond Bond Business Capitalism CNBC David Tepper Dow 30 Economy European Central Bank Finance Financial markets Flight to Safety Gundlach Investment Jeffrey Gundlach Monetary Policy Money Reuters Short Stock market Warren Buffett Mon, 27 Feb 2017 19:12:17 +0000 Tyler Durden 589060 at http://www.zerohedge.com George W. Bush On Trump's Alleged Ties To Russia: "We All Need Answers" http://www.zerohedge.com/news/2017-02-27/george-w-bush-trumps-alleged-ties-russia-we-all-need-answers <p>Upon leaving office in 2009, former President George W. Bush pledged to reserve criticism of his successor, despite the fact that Obama, a junior Senator from Chicago, had been openly and extremely critical of his presidency over the preceding couple of years.&nbsp; In fact, when pressed on the issue in an interview with Sean Hannity in 2014, Bush said simply, <strong>“I don’t think it’s good for the country to have a former president undermine a current president...I think it’s bad for the presidency, for that matter.”</strong> </p> <p>That said, apparently Bush isn't convinced that the same courtesy afforded to President Obama should be extended to the current administration.&nbsp; In speaking with Matt Luaer of NBC, the former President took several subtle jabs at the current Trump administration on everything from Russia to immigration to his contentious relationship with the media.</p> <p>On Russian involvement in the 2016 election, Bush seemed to lend credibility to the conspiracy theories of the disaffected left by saying that<strong> "we all need answers"</strong> while suggesting that a "special prosecutor" may be warranted.&nbsp; Per <a href="http://thehill.com/homenews/administration/321313-george-w-bush-we-need-answers-on-trump-team-ties-to-russia">The Hill</a>:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>"I think we all need answers</strong>...I'm not sure the right avenue to take. I am sure, though, that that question needs to be answered,” Bush said to NBC's "Today" host Matt Lauer.&nbsp; </p> <p>&nbsp;</p> <p>U.S. intelligence agencies believe Russian-backed hackers attempted to sway the election for Trump, while multiple news reports say that Trump campaign officials had "constant" contact with Russian intelligence during the election.</p> <p>&nbsp;</p> <p>Bush said he trusted Sen. Richard Burr (R-N.C.), the chair of the Senate Intelligence Committee, to select a special prosecutor to investigate the possible ties between Russian officials and Trump’s team saying <strong>"if [Senate Intelligence Committee Chair Richard Burr] were to recommend a special prosecutor, then it'd have a lot more credibility with me."</strong></p> </blockquote> <p> Of course, <strong>no such calls for a special prosecutor were made by Obama or Bush when actual, tangible evidence surfaced that Hillary Clinton knowingly violated multiple federal laws.</strong></p> <p><iframe src="https://www.youtube.com/embed/hHBkCq5Tmso?ecver=2" width="600" height="337" frameborder="0"></iframe></p> <p>&nbsp;</p> <p>But the jabs from Bush didn't end there...</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><span style="text-decoration: underline;"><strong>On freedom of religion</strong></span>: "I think it's very important for all of us to recognize that one of our great strengths is for people to be able to worship the way they want to or not worship at all. <strong>A bedrock of our freedom is the right to worship freely."</strong></p> <p>&nbsp;</p> <p><span style="text-decoration: underline;"><strong>On Trump's immigration ban</strong></span>: "I am for an<strong> immigration policy that's welcoming and upholds the law."</strong></p> <p>&nbsp;</p> <p><span style="text-decoration: underline;"><strong>On the media</strong></span>: "I consider the <strong>media to be indispensable to democracy</strong>…<strong>Power can be very addictive. It can be corrosive, and it's important for the media to hold people to account."</strong></p> </blockquote> <p>Of course, as Trump has repeatedly said, he has no problem with the media holding his administration "to account"...<strong>the problem lies with the media's complete inability to hold <span style="text-decoration: underline;">ALL</span> politicians "to account" in an unbiased way, irrespective of political affiliation.</strong></p> <p>Meanwhile, apparently we weren't the only ones to note the hypocrisy in some of GW's comments...</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">The same George W wanted to jail NYT"s reporter James Risen for reporting about W's use of warantless wiretaps? <a href="https://t.co/mayio7DBAR">https://t.co/mayio7DBAR</a></p> <p>— Lizzy (@lizzie363) <a href="https://twitter.com/lizzie363/status/836256389953642496">February 27, 2017</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><blockquote class="twitter-tweet"><p dir="ltr" lang="en">At no time did any major media outlet call W out on this massive steaming pile of hypocrisy which is why the public doesn't TRUST the media! <a href="https://t.co/bhLSl4m4Ro">https://t.co/bhLSl4m4Ro</a></p> <p>— Lizzy (@lizzie363) <a href="https://twitter.com/lizzie363/status/836258788822896642">February 27, 2017</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script><p>&nbsp;</p> <p>...though we suspect you won't hear the same criticisms from his new best friends in the mainstream media, you know, the guys that would have done anything to undermine his credibility just 8 short years ago.</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">2005: George W Bush is a pillaging, torturing war criminal who let a city drown</p> <p>2017: I may have disagreed with Bush but he was A Good Man™</p> <p>— Glenn Greenwald (@ggreenwald) <a href="https://twitter.com/ggreenwald/status/836245045145563137">February 27, 2017</a></p></blockquote> <script src="//platform.twitter.com/widgets.js"></script> <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="768" height="444" alt="" src="http://www.zerohedge.com/sites/default/files/images/user230519/imageroot/2017.02.27%20-%20Bush%201.JPG?1488213398" /> </div> </div> </div> http://www.zerohedge.com/news/2017-02-27/george-w-bush-trumps-alleged-ties-russia-we-all-need-answers#comments Barack Obama Donald Trump Donald Trump presidential campaign George W. Bush Livingston family NBC Politics President Obama Russian intelligence Senate Intelligence Committee U.S. intelligence United States Mon, 27 Feb 2017 18:52:32 +0000 Tyler Durden 589043 at http://www.zerohedge.com Mexican Drug King Worked for CIA, Says His Son http://www.zerohedge.com/news/2017-02-27/mexican-drug-king-worked-cia-says-his-son <p style="background: rgb(255, 255, 255); border: 0px; margin: 0px 0px 24px; padding: 0px; vertical-align: baseline; color: rgb(51, 51, 51); font-family: Georgia, &quot;Bitstream Charter&quot;, serif; font-size: 16px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: normal; letter-spacing: normal; orphans: 2; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px;">In a brand new book, the son of<span class="Apple-converted-space">&nbsp;</span><span class="st" style="background: transparent; border: 0px; margin: 0px; padding: 0px; vertical-align: baseline;">Medellín<span class="Apple-converted-space">&nbsp;</span></span>drug king Pablo Escobar<span class="Apple-converted-space">&nbsp;</span><a href="http://www.noticias24.com/internacionales/noticia/121173/mi-papa-trabajaba-para-la-cia-afirma-hijo-de-pablo-escobar-en-entrevista/" style="background: transparent; border: 0px; margin: 0px; padding: 0px; vertical-align: baseline; color: rgb(116, 51, 153);" target="_blank" title="says">says</a><span class="Apple-converted-space">&nbsp;</span>that his father worked for the CIA (<a href="https://translate.google.com/translate?hl=en&amp;sl=es&amp;u=http://www.noticias24.com/internacionales/noticia/121173/mi-papa-trabajaba-para-la-cia-afirma-hijo-de-pablo-escobar-en-entrevista/&amp;prev=search" style="background: transparent; border: 0px; margin: 0px; padding: 0px; vertical-align: baseline; color: rgb(116, 51, 153);" target="_blank" title="English translation">English translation</a>).</p> <p style="background: rgb(255, 255, 255); border: 0px; margin: 0px 0px 24px; padding: 0px; vertical-align: baseline; color: rgb(51, 51, 51); font-family: Georgia, &quot;Bitstream Charter&quot;, serif; font-size: 16px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: normal; letter-spacing: normal; orphans: 2; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px;"><a href="http://www.washingtonsblog.com/2015/02/con.html">Sound crazy</a>? Maybe &hellip;</p> <p style="background: rgb(255, 255, 255); border: 0px; margin: 0px 0px 24px; padding: 0px; vertical-align: baseline; color: rgb(51, 51, 51); font-family: Georgia, &quot;Bitstream Charter&quot;, serif; font-size: 16px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: normal; letter-spacing: normal; orphans: 2; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px;">But Time<span class="Apple-converted-space">&nbsp;</span><a href="http://world.time.com/2014/01/14/dea-boosted-mexican-drug-cartel/" style="background: transparent; border: 0px; margin: 0px; padding: 0px; vertical-align: baseline; color: rgb(116, 51, 153);" target="_blank" title="reports">reports</a>:</p> <blockquote style="background: rgb(255, 255, 255); border: 0px; margin: 0px; padding: 0px 3em; vertical-align: baseline; quotes: none; font-style: italic; color: rgb(51, 51, 51); font-family: Georgia, &quot;Bitstream Charter&quot;, serif; font-size: 16px; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: normal; letter-spacing: normal; orphans: 2; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px;"><p style="background: transparent; border: 0px; margin: 0px 0px 24px; padding: 0px; vertical-align: baseline;">The U.S. government allowed the Mexican Sinaloa drug cartel to carry out its business unimpeded between 2000 and 2012 in exchange for information on rival cartels, an investigation by<span class="Apple-converted-space">&nbsp;</span><em style="background: transparent; border: 0px; margin: 0px; padding: 0px; vertical-align: baseline; font-style: normal;">El Universal</em><span class="Apple-converted-space">&nbsp;</span><a href="http://www.eluniversal.com.mx/nacion-mexico/2014/impreso/la-guerra-secreta-de-la-dea-en-mexico-212050.html" style="background: transparent; border: 0px; margin: 0px; padding: 0px; vertical-align: baseline; color: rgb(116, 51, 153);" target="_blank" title="claims">claims</a>.</p> <p style="background: transparent; border: 0px; margin: 0px 0px 24px; padding: 0px; vertical-align: baseline;">&nbsp;</p> <p style="background: transparent; border: 0px; margin: 0px 0px 24px; padding: 0px; vertical-align: baseline;">***</p> <p style="background: transparent; border: 0px; margin: 0px 0px 24px; padding: 0px; vertical-align: baseline;">&nbsp;</p> <p style="background: transparent; border: 0px; margin: 0px 0px 24px; padding: 0px; vertical-align: baseline;">Dr. Edgardo Buscaglia, a senior research scholar in law and economics at Columbia University, says that the tactic has been previously used in Colombia, Cambodia, Thailand and Afghanistan.</p> <p style="background: transparent; border: 0px; margin: 0px 0px 24px; padding: 0px; vertical-align: baseline;">&ldquo;Of course, this modus operandi involves a violation of public international law, besides adding more fuel to the violence, violations of due process and of human rights,&rdquo; he told<span class="Apple-converted-space">&nbsp;</span><em style="background: transparent; border: 0px; margin: 0px; padding: 0px; vertical-align: baseline; font-style: normal;">El Universal</em>.</p> <p style="background: transparent; border: 0px; margin: 0px 0px 24px; padding: 0px; vertical-align: baseline;">&nbsp;</p> <p style="background: transparent; border: 0px; margin: 0px 0px 24px; padding: 0px; vertical-align: baseline;">Myles Frechette, a former U.S. ambassador to Colombia, said while that the problem of drug trafficking in Colombia persists, the tactic of secret agreements had managed to reduce it. The period when the relationship between the DEA and Sinaloa was supposed to have been the closest, between 2006 and 2012, saw a<span class="Apple-converted-space">&nbsp;</span><strong style="background: transparent; border: 0px; margin: 0px; padding: 0px; vertical-align: baseline; font-weight: bold;">major surge of violence</strong><span class="Apple-converted-space">&nbsp;</span>in Mexico, and&nbsp;was the time when the&nbsp;Sinaloa cartel rose significantly in prominence.</p> </blockquote> <p style="background: rgb(255, 255, 255); border: 0px; margin: 0px 0px 24px; padding: 0px; vertical-align: baseline; color: rgb(51, 51, 51); font-family: Georgia, &quot;Bitstream Charter&quot;, serif; font-size: 16px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: normal; letter-spacing: normal; orphans: 2; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px;">Business Insider<span class="Apple-converted-space">&nbsp;</span><a href="http://www.businessinsider.com/the-us-government-and-the-sinaloa-cartel-2014-1#ixzz2qOHOp0HI" style="background: transparent; border: 0px; margin: 0px; padding: 0px; vertical-align: baseline; color: rgb(116, 51, 153);" target="_blank" title="writes">writes</a>:</p> <blockquote style="background: rgb(255, 255, 255); border: 0px; margin: 0px; padding: 0px 3em; vertical-align: baseline; quotes: none; font-style: italic; color: rgb(51, 51, 51); font-family: Georgia, &quot;Bitstream Charter&quot;, serif; font-size: 16px; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: normal; letter-spacing: normal; orphans: 2; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px;"><p style="background: transparent; border: 0px; margin: 0px 0px 24px; padding: 0px; vertical-align: baseline;">There have long been allegations that Guzman,<span class="Apple-converted-space">&nbsp;</span><a href="http://www.treasury.gov/press-center/press-releases/Pages/tg1392.aspx" style="background: transparent; border: 0px; margin: 0px; padding: 0px; vertical-align: baseline; color: rgb(116, 51, 153);" target="_blank" title="considered">considered</a><span class="Apple-converted-space">&nbsp;</span>to be &ldquo;<strong style="background: transparent; border: 0px; margin: 0px; padding: 0px; vertical-align: baseline; font-weight: bold;">the world&rsquo;s most powerful drug trafficker</strong>,&rdquo;<span class="Apple-converted-space">&nbsp;</span><a href="http://www.newsweek.com/el-chapo-guzman-mexicos-most-powerful-drug-lord-64321" style="background: transparent; border: 0px; margin: 0px; padding: 0px; vertical-align: baseline; color: rgb(116, 51, 153);" target="_blank" title="coordinates">coordinates</a><span class="Apple-converted-space">&nbsp;</span>with American authorities.</p> <p style="background: transparent; border: 0px; margin: 0px 0px 24px; padding: 0px; vertical-align: baseline;">But the El Universal investigation is the first to publish<span class="Apple-converted-space">&nbsp;</span><a href="http://www.eluniversal.com.mx/graficos/pdf14/guerra_secreta.pdf" style="background: transparent; border: 0px; margin: 0px; padding: 0px; vertical-align: baseline; color: rgb(116, 51, 153);" target="_blank" title="court documents">court documents</a><span class="Apple-converted-space">&nbsp;</span>that include corroborating testimony from a DEA agent and a Justice Department official.</p> </blockquote> <p style="background: rgb(255, 255, 255); border: 0px; margin: 0px 0px 24px; padding: 0px; vertical-align: baseline; color: rgb(51, 51, 51); font-family: Georgia, &quot;Bitstream Charter&quot;, serif; font-size: 16px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: normal; letter-spacing: normal; orphans: 2; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px;">Fox News<span class="Apple-converted-space">&nbsp;</span><a href="http://www.foxnews.com/us/2011/08/05/americas-third-wardid-us-cut-deal-with-sinaloa-cartel/" style="background: transparent; border: 0px; margin: 0px; padding: 0px; vertical-align: baseline; color: rgb(116, 51, 153);" target="_blank" title="reports">reports</a>:</p> <blockquote style="background: rgb(255, 255, 255); border: 0px; margin: 0px; padding: 0px 3em; vertical-align: baseline; quotes: none; font-style: italic; color: rgb(51, 51, 51); font-family: Georgia, &quot;Bitstream Charter&quot;, serif; font-size: 16px; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: normal; letter-spacing: normal; orphans: 2; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px;"><p style="background: transparent; border: 0px; margin: 0px 0px 24px; padding: 0px; vertical-align: baseline;">According to the motion, the deal was part of a &lsquo;divide and conquer&rsquo; strategy, where the U.S. helped finance and arm the Sinaloa cartel, through Operation Fast and Furious, in exchange for information that allowed the D.E.A. and<span class="Apple-converted-space">&nbsp;</span><a href="http://www.foxnews.com/topics/politics/federal-bureau-of-investigation.htm#r_src=ramp" style="background: transparent; border: 0px; margin: 0px; padding: 0px; vertical-align: baseline; color: rgb(116, 51, 153);" target="_blank" title="FBI">FBI</a><span class="Apple-converted-space">&nbsp;</span>to destroy and dismantle rival Mexican cartels.</p> <p style="background: transparent; border: 0px; margin: 0px 0px 24px; padding: 0px; vertical-align: baseline;">&nbsp;</p> <p style="background: transparent; border: 0px; margin: 0px 0px 24px; padding: 0px; vertical-align: baseline;">***</p> <p style="background: transparent; border: 0px; margin: 0px 0px 24px; padding: 0px; vertical-align: baseline;">&nbsp;</p> <p style="background: transparent; border: 0px; margin: 0px 0px 24px; padding: 0px; vertical-align: baseline;">&ldquo;Under that agreement, the Sinaloa Cartel, through Loya, was to provide information accumulated by Mayo, Chapo, and others, against rival Mexican Drug Trafficking Organizations to the<span class="Apple-converted-space">&nbsp;</span><a href="http://www.foxnews.com/topics/u.s.htm#r_src=ramp" style="background: transparent; border: 0px; margin: 0px; padding: 0px; vertical-align: baseline; color: rgb(116, 51, 153);" target="_blank" title="United States">United States</a><span class="Apple-converted-space">&nbsp;</span>government. In return, the United States government agreed to dismiss the prosecution of the pending case against Loya, not to interfere with his drug trafficking activities and those of the Sinaloa Cartel, to not actively prosecute him, Chapo, Mayo, and the leadership of the Sinaloa Cartel, and to not apprehend them.&rdquo;</p> <p style="background: transparent; border: 0px; margin: 0px 0px 24px; padding: 0px; vertical-align: baseline;">&nbsp;</p> <p style="background: transparent; border: 0px; margin: 0px 0px 24px; padding: 0px; vertical-align: baseline;">***</p> <p style="background: transparent; border: 0px; margin: 0px 0px 24px; padding: 0px; vertical-align: baseline;">&nbsp;</p> <p style="background: transparent; border: 0px; margin: 0px 0px 24px; padding: 0px; vertical-align: baseline;">The motion claims Mayo, Chapo and Zambada- Niebla routinely passed information through Loya to the D.E.A. that allowed it to make drug busts. In return,<span class="Apple-converted-space">&nbsp;</span><strong style="background: transparent; border: 0px; margin: 0px; padding: 0px; vertical-align: baseline; font-weight: bold;">the U.S. helped the leaders evade Mexican police</strong>.</p> <p style="background: transparent; border: 0px; margin: 0px 0px 24px; padding: 0px; vertical-align: baseline;">&nbsp;</p> <p style="background: transparent; border: 0px; margin: 0px 0px 24px; padding: 0px; vertical-align: baseline;">It says: &ldquo;In addition, the defense has evidence that from time to time, the leadership of the Sinaloa Cartel was informed by agents of the DEA through Loya that<span class="Apple-converted-space">&nbsp;</span><strong style="background: transparent; border: 0px; margin: 0px; padding: 0px; vertical-align: baseline; font-weight: bold;">United States government agents and/or Mexican authorities were conducting investigations near the home territories of cartel leaders so that the cartel leaders could take appropriate actions to evade investigators</strong>&ndash; even though the United States government had indictments, extradition requests, and rewards for the apprehension of Mayo, Chapo, and other alleged leaders, as well as Mr. Zambada-Niebla.&rdquo;</p> </blockquote> <p style="background: rgb(255, 255, 255); border: 0px; margin: 0px 0px 24px; padding: 0px; vertical-align: baseline; color: rgb(51, 51, 51); font-family: Georgia, &quot;Bitstream Charter&quot;, serif; font-size: 16px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: normal; letter-spacing: normal; orphans: 2; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px;">Salon<span class="Apple-converted-space">&nbsp;</span><a href="http://www.salon.com/2014/01/13/u_s_deal_with_cartel_let_billions_of_dollars_of_drugs_be_smuggled/" style="background: transparent; border: 0px; margin: 0px; padding: 0px; vertical-align: baseline; color: rgb(116, 51, 153);" target="_blank" title="notes">notes</a>:</p> <blockquote style="background: rgb(255, 255, 255); border: 0px; margin: 0px; padding: 0px 3em; vertical-align: baseline; quotes: none; font-style: italic; color: rgb(51, 51, 51); font-family: Georgia, &quot;Bitstream Charter&quot;, serif; font-size: 16px; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: normal; letter-spacing: normal; orphans: 2; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px;"><p style="background: transparent; border: 0px; margin: 0px 0px 24px; padding: 0px; vertical-align: baseline;">Under the remit of the War on Drugs, millions of U.S. citizens have faced arrest and jail time for minor, nonviolent charges. All the while, it has been revealed, the U.S. government has been enabling billions of dollars worth of drugs to flood into the country from Mexico because of shady deals with the notorious Sinaloa cartel.</p> <p style="background: transparent; border: 0px; margin: 0px 0px 24px; padding: 0px; vertical-align: baseline;">&nbsp;</p> <p style="background: transparent; border: 0px; margin: 0px 0px 24px; padding: 0px; vertical-align: baseline;">***</p> <p style="background: transparent; border: 0px; margin: 0px 0px 24px; padding: 0px; vertical-align: baseline;">&nbsp;</p> <p style="background: transparent; border: 0px; margin: 0px 0px 24px; padding: 0px; vertical-align: baseline;">Sinaloa (believed to supply 80 percent of Chicago&rsquo;s street drugs) has been working with U.S. authorities since 2000 to provide information in return for immunity and undisturbed drug trafficking. Court documents obtained by El Universal show testimony from DEA and DOJ officials affirming the relationship.</p> </blockquote> <p style="background: rgb(255, 255, 255); border: 0px; margin: 0px 0px 24px; padding: 0px; vertical-align: baseline; color: rgb(51, 51, 51); font-family: Georgia, &quot;Bitstream Charter&quot;, serif; font-size: 16px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: normal; letter-spacing: normal; orphans: 2; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px;">Indeed, top U.S. government officials say that that the government has<span class="Apple-converted-space">&nbsp;</span><a href="http://www.washingtonsblog.com/2014/01/u-s-backed-murderous-mexican-drug-cartel-decade.html" style="background: transparent; border: 0px; margin: 0px; padding: 0px; vertical-align: baseline; color: rgb(116, 51, 153);" title="long PROTECTED drug cartels">long<span class="Apple-converted-space">&nbsp;</span><strong style="background: transparent; border: 0px; margin: 0px; padding: 0px; vertical-align: baseline; font-weight: bold;">PROTECTED drug cartels</strong></a>.</p> <h3 style="background: rgb(255, 255, 255); border: 0px; margin: 0px 0px 20px; padding: 0px; vertical-align: baseline; clear: both; font-weight: normal; color: rgb(0, 0, 153); line-height: 1.5em; font-family: Georgia, &quot;Bitstream Charter&quot;, serif; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; letter-spacing: normal; orphans: 2; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px;">Watch the Following Videos, and Decide For Yourself &hellip;</h3> <p style="background: rgb(255, 255, 255); border: 0px; margin: 0px 0px 24px; padding: 0px; vertical-align: baseline; color: rgb(51, 51, 51); font-family: Georgia, &quot;Bitstream Charter&quot;, serif; font-size: 16px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: normal; letter-spacing: normal; orphans: 2; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px;">From a 60 Minutes special with Mike Wallace reporting:</p> <p><center><iframe allowfullscreen="allowfullscreen" frameborder="0" height="400.000000001" src="https://www.youtube.com/embed/1wflErIG8Xw" width="710"></iframe></center> </p><p>And see these short video clips:</p> <p><center><iframe allowfullscreen="allowfullscreen" frameborder="0" height="400.000000001" src="https://www.youtube.com/embed/g2MthThXSkE?start=1&amp;end=170" width="710"></iframe></center><center><iframe frameborder="0" height="532" src="http://www.youtube.com/embed/eGpBZl9Llaw" width="710"></iframe></center><center><iframe frameborder="0" height="532" src="http://www.youtube.com/embed/jQ9fgi7IZSk" width="710"></iframe></center><center><iframe allowfullscreen="allowfullscreen" frameborder="0" height="533" src="https://www.youtube-nocookie.com/embed/VNX8XgjjXa0?controls=0&amp;showinfo=0" width="710"></iframe></center><center><iframe allowfullscreen="allowfullscreen" frameborder="0" height="399" src="https://www.youtube-nocookie.com/embed/AuynFhkIXmE?rel=0&amp;controls=0&amp;showinfo=0" width="710"></iframe></center> </p><p>And see<span class="Apple-converted-space">&nbsp;</span><a href="http://www.cbsnews.com/2100-18563_162-5439648.html" style="background: transparent; border: 0px; margin: 0px; padding: 0px; vertical-align: baseline; color: rgb(116, 51, 153);" target="_blank" title="this">this</a><span class="Apple-converted-space">&nbsp;</span>and<span class="Apple-converted-space">&nbsp;</span><a href="http://www.independent.co.uk/news/cia-turned-a-deliberate-blind-eye-to-contras-drug-smuggling-1183305.html" style="background: transparent; border: 0px; margin: 0px; padding: 0px; vertical-align: baseline; color: rgb(116, 51, 153);" target="_blank" title="this">this</a>.</p> <p style="background: rgb(255, 255, 255); border: 0px; margin: 0px 0px 24px; padding: 0px; vertical-align: baseline; color: rgb(51, 51, 51); font-family: Georgia, &quot;Bitstream Charter&quot;, serif; font-size: 16px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: normal; letter-spacing: normal; orphans: 2; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px;">Even if you don&rsquo;t believe that the agencies as a whole engaged in hanky panky, there were certainly rogue agents who did.</p> <p style="background: rgb(255, 255, 255); border: 0px; margin: 0px 0px 24px; padding: 0px; vertical-align: baseline; color: rgb(51, 51, 51); font-family: Georgia, &quot;Bitstream Charter&quot;, serif; font-size: 16px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: normal; letter-spacing: normal; orphans: 2; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px;">For example, agents for the<span class="Apple-converted-space">&nbsp;</span><a href="http://www.washingtonsblog.com/2015/03/government-report-finds-dea-agents-sex-parties-prostitutes-hired-drug-cartels.html" style="background: transparent; border: 0px; margin: 0px; padding: 0px; vertical-align: baseline; color: rgb(116, 51, 153);" title="Drug Enforcement Agency">Drug Enforcement Agency</a><span class="Apple-converted-space">&nbsp;</span>had<span class="Apple-converted-space">&nbsp;</span><a href="http://www.businessinsider.com/r-us-drug-agents-alleged-sex-parties-go-back-to-2001-lawmakers-2015-4" style="background: transparent; border: 0px; margin: 0px; padding: 0px; vertical-align: baseline; color: rgb(116, 51, 153);" target="_blank" title="dozens">dozens</a><span class="Apple-converted-space">&nbsp;</span>of<span class="Apple-converted-space">&nbsp;</span><strong style="background: transparent; border: 0px; margin: 0px; padding: 0px; vertical-align: baseline; font-weight: bold;">sex parties</strong><span class="Apple-converted-space">&nbsp;</span>with<span class="Apple-converted-space">&nbsp;</span><strong style="background: transparent; border: 0px; margin: 0px; padding: 0px; vertical-align: baseline; font-weight: bold;">prostitutes hired by the drug cartels</strong><span class="Apple-converted-space">&nbsp;</span>they were supposed to stop (they also received<span class="Apple-converted-space">&nbsp;</span><strong style="background: transparent; border: 0px; margin: 0px; padding: 0px; vertical-align: baseline; font-weight: bold;">money</strong><em style="background: transparent; border: 0px; margin: 0px; padding: 0px; vertical-align: baseline; font-style: italic;">,<span class="Apple-converted-space">&nbsp;</span></em><strong style="background: transparent; border: 0px; margin: 0px; padding: 0px; vertical-align: baseline; font-weight: bold;">gifts</strong><span class="Apple-converted-space">&nbsp;</span><em style="background: transparent; border: 0px; margin: 0px; padding: 0px; vertical-align: baseline; font-style: italic;">and<span class="Apple-converted-space">&nbsp;</span></em><strong style="background: transparent; border: 0px; margin: 0px; padding: 0px; vertical-align: baseline; font-weight: bold;">weapons</strong><span class="Apple-converted-space">&nbsp;</span>from drug cartel members).</p> <p style="background: rgb(255, 255, 255); border: 0px; margin: 0px 0px 24px; padding: 0px; vertical-align: baseline; color: rgb(51, 51, 51); font-family: Georgia, &quot;Bitstream Charter&quot;, serif; font-size: 16px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: normal; letter-spacing: normal; orphans: 2; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px;">And Drug Enforcement agents also<span class="Apple-converted-space">&nbsp;</span><a href="http://readersupportednews.org/news-section2/318-66/30299-two-dea-agents-ran-new-jerseys-sleaziest-strip-club" style="background: transparent; border: 0px; margin: 0px; padding: 0px; vertical-align: baseline; color: rgb(116, 51, 153);" target="_blank" title="RAN New Jersey’s"><strong style="background: transparent; border: 0px; margin: 0px; padding: 0px; vertical-align: baseline; font-weight: bold;">RAN</strong><span class="Apple-converted-space">&nbsp;</span>New Jersey&rsquo;s</a><strong style="background: transparent; border: 0px; margin: 0px; padding: 0px; vertical-align: baseline; font-weight: bold;"><a href="http://readersupportednews.org/news-section2/318-66/30299-two-dea-agents-ran-new-jerseys-sleaziest-strip-club" style="background: transparent; border: 0px; margin: 0px; padding: 0px; vertical-align: baseline; color: rgb(116, 51, 153);" target="_blank" title=" sleaziest strip club"><span class="Apple-converted-space">&nbsp;</span>sleaziest strip club</a></strong><span class="Apple-converted-space">&nbsp;</span>&ndash; using illegal, undocumented girls &ndash; which included a<span class="Apple-converted-space">&nbsp;</span><strong style="background: transparent; border: 0px; margin: 0px; padding: 0px; vertical-align: baseline; font-weight: bold;">prostitution</strong><span class="Apple-converted-space">&nbsp;</span><strong style="background: transparent; border: 0px; margin: 0px; padding: 0px; vertical-align: baseline; font-weight: bold;">ring</strong></p> <p style="background: rgb(255, 255, 255); border: 0px; margin: 0px 0px 24px; padding: 0px; vertical-align: baseline; color: rgb(51, 51, 51); font-family: Georgia, &quot;Bitstream Charter&quot;, serif; font-size: 16px; font-style: normal; font-variant-ligatures: normal; font-variant-caps: normal; font-weight: normal; letter-spacing: normal; orphans: 2; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 2; word-spacing: 0px; -webkit-text-stroke-width: 0px;">Postscript: Interestingly, Nixon&rsquo;s chief policy officer &ndash; John Ehrlichman &ndash; said that the war on drugs was launched as an<span class="Apple-converted-space">&nbsp;</span><a href="http://www.washingtonsblog.com/2016/03/nixon-chief-policy-officer-created-war-drugs-oppress-blacks-antiwar-movement.html" style="background: transparent; border: 0px; margin: 0px; padding: 0px; vertical-align: baseline; color: rgb(116, 51, 153);" title="excuse to attack the antiwar left and blacks">excuse to attack the antiwar left and blacks</a>.</p> http://www.zerohedge.com/news/2017-02-27/mexican-drug-king-worked-cia-says-his-son#comments Afghanistan Business Central Intelligence Agency Cocaine Columbia University Crime Crime in Mexico DEA Department of Justice DOJ Drug cartel Drug Enforcement Agency FBI Federal Bureau of Investigation Fox News Heroin Ismael Zambada García Juan José Esparragoza Moreno Law Mexican Drug War Mexican police Mexico MS-13 Organized crime Politics Sinaloa Sinaloa Cartel Social Issues Testimony United States government US government Mon, 27 Feb 2017 18:44:05 +0000 George Washington 589051 at http://www.zerohedge.com Fearing A Surge In Inflation, China Launches Probe Into Commodity Futures, "Distorted" Prices http://www.zerohedge.com/news/2017-02-27/fearing-surge-inflation-china-launches-probe-commodity-futures-distorted-prices <p>One and a half years after the Chinese government violently burst the stock market bubble, leading the massive losses among retail investors, and months after China's third housing bubble since the financial crisis appeared to have peaked, also China has found itself with yet another hot-money funded bubble: commodities. And perhaps in hopes of intercepting this latest mania before it gets too big, overnight China’s top economic planner, the National Development &amp; Reform Commission - not a market regulator, but the core agency behind China's goalseeked economic data - announced it is investigating whether speculation has "distorted" commodity futures prices, due to concerns that the recent rally will drive inflation higher, <a href="https://www.bloomberg.com/news/articles/2017-02-27/china-said-to-probe-speculation-in-commodity-futures-amid-rally">according to Bloomberg</a>. </p> <p>In recent weeks, the NDRC has questioned futures brokers whether "price distortion" had occurred, which is a polite way of saying the buying mania has gone too far. <strong>The agency is worried over the potential impact on producer and consumer prices</strong>. China's worries are understandable: with commodity prices surging, whether due to speculators or simply tight supply and rising demand, China's producer prices soared in January by 6.9%, the highest level since the inflationary scare of 2011. </p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/02/08/20170227_chinappi.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/02/08/20170227_chinappi_0.jpg" width="500" height="259" /></a></p> <p>This is the second time China has intervened in the commodity market in the past year: Beijing tightened rules and raised fees on commodities trading last spring, as it sought to clamp down on a speculative frenzy that spurred a rapid run-up in prices and unprecedented volumes. As shown below, when it comes to commodities in China, traders periodically swarm any given asset class, sending it through the roof, only to pull back once the price starts to drop or when the government hints at an imminent crackdown on buyer euphoria.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/02/08/20170227_chinazinc.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/02/08/20170227_chinazinc_0.jpg" width="500" height="261" /></a></p> <p>Despite the government's best efforts however, due to an overabundance of hot money, steel and iron ore futures have continued to rise on government stimulus, capacity cuts and a steadying in the economy of the world’s biggest metals consumer. Despite the occasional wipe out, <a href="http://www.zerohedge.com/news/2016-12-26/commodity-futures-plunge-following-china-growth-downgrade">most recently in </a>December...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/12/25/20161226_comms.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/12/25/20161226_comms_0.jpg" width="498" height="389" /></a></p> <p>... the levitation in China's commodity sector has continued. Steel reinforcement bar on the Shanghai Futures Exchange rose to its best level since Dec. 2013 on Monday, while iron ore on the Dalian Commodity Exchange was close to its May 2014 peak. However, trading in the contracts remains well below last year’s heady heights.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/02/08/china%20metal%20rally.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2017/02/08/china%20metal%20rally_0.jpg" width="500" height="281" /></a></p> <p>On Sunday, Fang Xinhai, vice chairman of market regulator, the China Securities Regulatory Commission, said that China doesn’t want inflated trading volumes, according to an online transcript. </p> <p>Suggesting that yet another government intervention in the commodity market may be imminent, <strong>he said last year’s crackdown on speculation was “satisfactory” and that regulators will “stick to last year’s philosophy” when it comes to supervising futures. </strong>He added that the government will look at new measures to enhance pricing, such as attracting more industrial users to participate in the market.</p> <p>The NDRC has also consulted with institutions including equity brokers on the outlook for commodity prices, according to Bloomberg's sources. That's about as close as Beijing gets to warning the country's brokers that the Politburo is displeased with how high prices have risen. All else equal, the near-term price path for Chinese commodities is likely lower.</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="1200" height="675" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/china%20metal%20rally.jpg?1488220362" /> </div> </div> </div> http://www.zerohedge.com/news/2017-02-27/fearing-surge-inflation-china-launches-probe-commodity-futures-distorted-prices#comments Business China China Securities Regulatory Commission Chinese government Commodity Commodity markets Consumer Prices Dalian Dalian Commodity Exchange Economy Exchange Finance Financial crisis of 2007–2008 Financial markets Futures contract Futures exchange Futures markets Government Stimulus Housing Bubble National Development & Reform Commission Speculation Mon, 27 Feb 2017 18:34:34 +0000 Tyler Durden 589050 at http://www.zerohedge.com