en Global Warming Scam Exposed <p><a href=""><em>Submitted by Michael Shedlock via,</em></a></p> <p>When you are <strong>willing to pay for global warming &ldquo;research&rdquo; that has a predetermined outcome,</strong> all you do is open the door for fraud.</p> <p><span id="more-41640">&nbsp;</span>Please consider <a href="" target="_blank">Top University Passed Off Rivals&rsquo; Research to Bankroll Climate Change Agenda</a>.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>One of the world&rsquo;s leading institutes for researching the impact of global warming has repeatedly claimed credit for work done by rivals &ndash; and used it to win millions from the taxpayer.</p> <p>&nbsp;</p> <p>An investigation by The Mail on Sunday also reveals that when the Centre for Climate Change Economics and Policy (CCCEP) made a bid for more Government funds, it claimed it was responsible for work that was published before the organisation even existed. Last night, our evidence was described by one leading professor whose work was misrepresented as &lsquo;a clear case of fraud &ndash; using deception for financial gain&rsquo;. The chairman of the CCCEP since 2008 has been Nick Stern, a renowned global advocate for drastic action to combat climate change.</p> <p>&nbsp;</p> <p>On Friday, the CCCEP &ndash; based jointly at the London School of Economics and the University of Leeds &ndash; will host a gala at the Royal Society in London in the peer&rsquo;s honour. Attended by experts and officials from around the world, it is to mark the tenth anniversary of the blockbuster Stern Review, a 700-page report on the economic impact of climate change. The review was commissioned by Tony Blair&rsquo;s Government.</p> <p>&nbsp;</p> <p>Last night, CCCEP spokesman Bob Ward admitted it had &lsquo;made mistakes&rsquo;, both in claiming credit for studies which it had not funded and for papers published by rival academics. &lsquo;This is regrettable, but mistakes can happen&hellip; We will take steps over the next week to amend these mistakes,&rsquo; he said.</p> <p>&nbsp;</p> <p>The Mail on Sunday investigation reveals today that:</p> <ul> <li>The Economic and Social Research Council (ESRC), which has given the CCCEP &pound;9 million from taxpayers since 2008, has never checked the organisation&rsquo;s supposed publication lists, saying they were &lsquo;taken on trust&rsquo;;</li> <li>Some of the papers the CCCEP listed have nothing to do with climate change &ndash; such as the reasons why people buy particular items in supermarkets and why middle class people &lsquo;respond more favourably&rsquo; to the scenery of the Peak District than their working class counterparts;</li> <li>Papers submitted in an explicit bid to secure further ESRC funding not only had nothing to do with the CCCEP, they were published before it was founded;</li> <li>The publication dates of some of these papers on the list are incorrect &ndash; giving the mistaken impression that they had been completed after the CCCEP came into existence.</li> </ul> <p>&nbsp;</p> <p>Academics whose work was misrepresented reacted with fury. Professor Richard Tol, a climate change economics expert from Sussex University, said: &lsquo;It is serious misconduct to claim credit for a paper you haven&rsquo;t supported, and it&rsquo;s fraud to use that in a bid to renew a grant. I&rsquo;ve never come across anything like it before. It stinks.&rsquo;</p> <p>&nbsp;</p> <p>Prof Tol said: &lsquo;Our paper had no relationship to the CCCEP. It came out of David Anthoff&rsquo;s masters thesis. At the time, the CCCEP did not exist, and it only came into existence after the paper was published. Fraud means deception for financial gain. That is what this is.&rsquo;</p> </blockquote> <p><span style="text-decoration: underline;"><strong>Fake Research</strong></span></p> <p>The Daily Caller reports <a href="" target="_blank">Top University Stole Millions From Taxpayers By Faking Global Warming Research</a>.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>A global warming research center at the London School of Economics got millions of dollars from UK taxpayers by taking credit for research it didn&rsquo;t perform, an investigation by The Daily Mail revealed.</p> <p>&nbsp;</p> <p>The UK government gave $11 million dollars to the Centre for Climate Change Economics and Policy (CCCEP) in exchange for research that the organization reportedly never actually did.</p> <p>&nbsp;</p> <p>Studies that&nbsp;receive financial&nbsp;support from the public sector don&rsquo;t have to disclose it as an ethical conflict of interest, even when that support is in the millions of dollars. Recent studies in the U.S. &mdash; which the Environmental Protection Agency (EPA) uses to support the scientific case for its Clean Power Plan &mdash; saw the agency give&nbsp;<a href="" target="_blank">$31.2 million</a>, <a href="" target="_blank">$9.5 million</a>, and&nbsp;<a href="" target="_blank">$3.65 million</a>&nbsp;in public funds to&nbsp;lead authors, according to EPA public disclosures.</p> <p>&nbsp;</p> <p>The author who received $3.65 million, Charles&nbsp;Driscoll, <a href="" target="_blank">even admitted&nbsp;to the Pittsburgh Post-Gazette</a>&nbsp;that the result of his&nbsp;study was predetermined, saying &ldquo;in doing this study we wanted to bring attention to the additional benefits from carbon controls.&rdquo;</p> <p>Universities typically received <a href="" target="_blank">about 50 percent of the money</a>&nbsp;their researchers get in public funds if their investigations find positive results, making them&nbsp;deeply dependent upon federal funding&nbsp;and likely to encourage&nbsp;studies that will&nbsp;come to&nbsp;conclusions the government&nbsp;wants.</p> </blockquote> <p><span style="text-decoration: underline;"><strong>Predetermined Outcome</strong></span></p> <blockquote class="twitter-tweet" data-lang="en"><p dir="ltr" lang="en"><a href="">#GlobalWarming</a> Short of proposing moon is made of green cheese, it&#39;s easy to get research that supports desired view <a href=""></a></p> <p>&mdash; Mike Mish Shedlock (@MishGEA) <a href="">October 24, 2016</a></p></blockquote> <script async src="//" charset="utf-8"></script><p>.All you have to do is pay for it.</p> <p>&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="455" height="320" alt="" src="" /> </div> </div> </div> Global Warming Tue, 25 Oct 2016 12:29:47 +0000 Tyler Durden 575807 at Caterpillar Warns Of "Economic Weakness Throughout Much Of The World", Cuts Guidance <p>As we <a href="">previewed yesterday </a>when we showed that for 46 consecutive months industrial bellwether Caterpillar has failed to post a retail sales increase...</p> <p>&nbsp;</p> <p><a href=""><img src="" width="500" height="285" /></a></p> <p>... it should probably not come as a surprise that moments ago CAT not only badly missed revenues, reporting $9.2 billion well below the $9.80 billion expected (courtesy of the usual non-GAAP fudging, CAT managed to "boost" its EPS enough to beat estimates, reporting adjusted earnings of $0.85, above the $0.76 consensus), but it also once again slashed full year guidance, now expecting revenue of $39 billion, and EPS of $3.25 per share excluding restructuring costs, down from the guidance of $40.0 to $40.5 billion and EPS of $3.55 provided just three months ago.&nbsp; </p> <p>But it was outgoing CEO Doug Oberhelman's commentary in the release that was more troubling, to wit: </p> <p>"<strong>Economic weakness throughout much of the world persists and, as a result, most of our end markets remain challenged</strong>.&nbsp; In North America, the market has an abundance of used construction equipment, rail customers have a substantial number of idle locomotives, <strong>and around the world there are a significant number of idle mining trucks</strong>."</p> <p><strong>"While we are seeing early signals of improvement in some areas, we continue to face a number of challenges.&nbsp; </strong>We remain cautious as we look ahead to 2017, but are hopeful as the year unfolds we will begin to see more positive momentum.&nbsp; <strong>Whether or not that happens, we are continuing to prepare for a better future.&nbsp; </strong>In addition to substantial restructuring and significant cost reduction actions, we've kept our focus on customers and on the future by continuing to invest in our digital capabilities, connecting assets and jobsites and developing the next generation of more productive and efficient products"... "Many of our businesses, including mining, oil and gas, rail and construction, are currently operating well below historical replacement demand levels in many parts of the world."</p> <p>That said, it was not all gloom: </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>"there were a few bright spots this quarter.&nbsp; Both the construction industry and our machine market position improved in China.&nbsp; Most commodity prices, while low, seem to have stabilized.&nbsp; Parts sales have increased sequentially in each of the last two quarters.&nbsp; Our machine market position and quality remain at high levels and our work on Lean and restructuring are continuing to help us lower costs.</p> </blockquote> <p>Caterpillar’s results are closely followed by investors as the company is viewed as a bellwether of global construction and manufacturing activity. </p> <p>In pre-market trading, shares of the company were down about 2%. Year-to-date, the stock is up about 25%.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="640" height="480" alt="" src="" /> </div> </div> </div> China Tue, 25 Oct 2016 12:14:50 +0000 Tyler Durden 575806 at Largest Dow Component 3M Reports In Line Earnings, Cuts Top End Of Guidance <p>In what has so far been the busiest day for earnings in the third quarter reporting season, where we got earnings misses from the likes of Eli Lilly (EPS $0.88, Exp. $0.98) and revenue misses from CAT ($9.16bn vs $9.8bn) as well as beats from Merck (EPS $1.07, Exp. $0.98) and GM ($1.72, Exp. $1.44), much of the early attention today was focused on 3M - at least before AAPL's report after the close - as the conglomerate is the largest component of the Dow Jones. </p> <p>The company reported in line earnings, with Q3 EPS beating expectations of $2.14 by one cent, with revenues of $7.71 printing on top of consensus estimates as industrials segment sales rose 1% in U.S. The company also reported slightly disappointing capital expenditures of $347 mm vs&nbsp; est. $357 million, and a 3Q operating margin of 24.7%. </p> <p>And while the current quarter data was good, 3M confirmed a recurring trend observed among other reporting companies, namely skepticism about the future, when it trimmed the upper end of its full year EPS guidance:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>For full-year 2016, 3M updated its forecast for earnings per share to be in the range of $8.15 to $8.20 versus a prior range of $8.15 to $8.30</strong>. <strong>The company now expects organic local-currency sales growth to be approximately flat versus a previous range of 0 to 1 percent</strong>. 3M also updated its tax rate to be approximately 29 percent versus a prior range of 29.0 to 29.5 percent. Lastly, the company continues to expect free cash flow conversion in the range of 95 to 105 percent.</p> </blockquote> <p>It is this caution about the future that prompted JPM strategists Emmanuel Cau, Mislav Matejka to write in an novernight note that “while we believe that corporates will likely deliver their typical beats of heavily reduced estimates, we think that they will fail to drive upgrades for 4Q and for next year." </p> <p>Indeed, as a result of increasingly opaque visibility about the year's last calendar quarter - much of the result of ongoing FX fluctuations and rising costs due to increasing wages, traders will be careful with trading purely on Q3 earnings as the current quarter may be an inflection point for the recent upward swing in corporate profitability. Add the risk of another rate hike in December, and higher interest costs, as well as declining PE multiples, and the recent thesis that much stronger than expected Q3 earnings which may finally end the 5-quarter long earnings recession will unlock the next move higher in stocks suddenly looks in doubt. </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="800" height="531" alt="" src="" /> </div> </div> </div> Capital Expenditures Fail Recession Tue, 25 Oct 2016 12:00:05 +0000 Tyler Durden 575803 at German Police Conduct 13 Anti-Terrorism Raids Across 5 States Citing "Imminent Terror Threat" <p>German police on Tuesday conducted numerous raids across five federal states and stormed an accommodation facility for refugees and 12 homes around the country that were believed to house people suspected of financing terrorism. Police searched residences in the eastern states of Thuringia and Saxony as well as in Bavaria, the western state of North Rhine-Westphalia and in Hamburg, police in Thuringia said in a statement. </p> <p>Bild magazine cited “an imminent terror threat” as a trigger for the operation. The large-scale operation reportedly targeted “Islamist-linked terror suspects,” local broadcaster MDR reported. </p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en"><a href="">#BREAKING</a>: German Police are conducting several anti-terror-operations in <a href="">#Thuringia</a> <a href="">#Germany</a></p> <p>— I.E.N. (@GoldenKrant) <a href="">October 25, 2016</a></p></blockquote> <script src="//"></script><blockquote class="twitter-tweet"> <p dir="ltr" lang="en"><a href="">#BREAKING</a>: German authorities have conducted 13 counterterrorism raids in five federal states, police in the eastern state of Thuringia say. <a href=""></a></p> <p>— dpa international (@dpa_intl) <a href="">October 25, 2016</a></p></blockquote> <script src="//"></script><p>The police have been investigating a 28-year-old Russian citizen of Chechen origin since the second half of 2015 who was suspected of preparing "a serious act of violent subversion", the statement said. They believed he intended to fight for Islamic State in Syria. During the course of investigations, suspicion arose that that person as well as 10 other men and three women - all Russian citizens of Chechen origin - were financing terrorism. </p> <p>According to <a href="">Reuters</a>, the suspects were living in Thuringia, Hamburg and Dortmund, <strong>are asylum seekers with unclear residency status, and are aged between 21 and 31, police said.</strong></p> <p>Police forces deployed sniffer dogs to detect potential explosives. At least one suspect is reported to have been placed under arrest in the central Thuringia city of Suhl, where “white powder” of unknown origin was found <a href="">reported RT</a>.</p> <p>Later, Thuringia criminal police said there is no threat of a terror attack, adding that preliminary outcomes of the operation would be released "in a matter of days." Unlike neighboring France and Belgium, Germany had seen no large-scale terrorist attacks until the summer of this year. </p> <p>In late July, however, it suffered a suicide bombing attempt and three lone-wolf assaults in the space of a week. In all cases, the perpetrators either had direct links to IS or were inspired by radicalism. The suspect, identified as Jaber al-Bakr, was on the run after German police discovered “highly sensitive explosives” in his flat. Al-Bakr committed suicide while in custody. The authorities said later he had considered a “big airport in Berlin” as a “better target" than trains.</p> <p>One of the most recent terrorist plots was foiled in early October in the eastern city of Chemnitz, when a 22-year-old Syrian national was captured after a two-day manhunt. Although a special operation had been launched by the authorities, the man was only detained when three fellow Syrians tied him up and alerted police. </p> <p>Earlier this month a Syrian refugee who was arrested on suspicion of planning a major attack in Berlin was found dead in prison after he initially evaded police during a raid on his apartment where 1.5 kg of explosives were found. Authorities said he had committed suicide.</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="634" height="384" alt="" src="" /> </div> </div> </div> Belgium France Germany Reuters Twitter Twitter Tue, 25 Oct 2016 11:43:52 +0000 Tyler Durden 575802 at Frontrunning: October 25 <ul> <li>Hilsenrath: Fed’s Task Ahead: How Best to Signal Year-End Rate Move (<a href="">WSJ</a>)</li> <li>Fed Inclined to Raise Rates If Next President Pumps Up Budget (<a href="">BBG</a>)</li> <li>World stocks, commodities climb as economic confidence lifts (<a href="">Reuters</a>)</li> <li>Ahead of earnings: Apple Boosted by IPhone 7 Demand, Slowing Pace of Sales Decline (<a href="">BBG</a>)</li> <li>Campaigns Brace for Election-Day Legal Battles (<a href="">WSJ</a>)</li> <li>Philippines Duterte tells U.S. to forget about defense deal 'if I stay longer' (<a href="">Reuters</a>)</li> <li>China’s Aggressive New Deal Makers: $199 Billion This Year and Counting (<a href="">WSJ</a>)</li> <li>Inside Trump Tower, the Skyscraper Where Trump Is Already King (<a href="">BBG</a>)</li> <li>On the ballot: two clashing visions of how America will powers its cars, homes (<a href="">Reuters</a>)</li> <li>Sunni Arabs forced to leave Kirkuk after Islamic State attack, residents say (<a href="">Reuters</a>)</li> <li>Xiaomi Goes Upmarket With New Devices to Arrest Sales Slide (<a href="">BBG</a>)</li> <li>Credit-Card Scammers Flock to Online Shopping (<a href="">WSJ</a>)</li> <li>Ratings Inflation Is Back, Subprime Style (<a href="">BBG</a>)</li> <li>Islamic State claims attack on Pakistan police academy, 59 dead (<a href="">Reuters</a>)</li> <li>Four killed on river ride at Australia's biggest theme park (<a href="">Reuters</a>)</li> <li>DuPont Raises Profit Forecast as Margins Widen Before Dow Merger (<a href="">BBG</a>)</li> <li>'Siri, catch market cheats': Wall Street watchdogs turn to A.I. (<a href="">Reuters</a>)</li> </ul> <p>&nbsp;</p> <p><strong>Overnight Media Digest</strong></p> <p><em><span style="text-decoration: underline;">WSJ</span></em></p> <p>- AT&amp;T Inc's $85.4 billion deal to buy Time Warner Inc sails toward two cresting waves of opposition: resurgent antitrust enforcement in Washington and politicians fired by a new bipartisan populist rage.</p> <p>- Microsoft CEO Satya Nadella is pushing the company to shed its not-invented-here approach and learn where it can improve.</p> <p>- TD Ameritrade agreed to acquire Scottrade Financial Services for $4 billion in a deal that merges two online discount brokerages facing pressures from declining trading volumes and shifts in technology.</p> <p>- Federal Reserve officials, wary of raising short-term interest rates amid the uncertainty surrounding the U.S. presidential election, are likely to stand pat at their November policy meeting and remain focused on lifting them in December.</p> <p>- Former Pennsylvania Attorney General Kathleen Kane was sentenced Monday to 10 to 23 months in prison, in a rebuke for the state's former top prosecutor following her recent conviction for engaging in a political payback scheme.</p> <p>- Genworth Financial Inc's proposed buyout by a Chinese conglomerate drew skepticism in the market that the deal would get done, even as some state regulators are privately embracing the possible acquisition.</p> <p>- Melinda Gates says she is concerned about the fact that more than a billion women in the developing world don't have access to cellphones.</p> <p>- Militants stormed a police academy in southwestern Pakistan late Monday, killing at least 59 and injuring more than 100, government officials said.</p> <p>- Belgium said it would not support a trade deal between the European Union and Canada after one of its regions continued to block the pact, dashing hopes of signing the accord later this week.</p> <p>- The Venezuelan government and the leading opposition alliance said they would meet to resolve the country's deep economic and political crisis.</p> <p>&nbsp;</p> <p><em><span style="text-decoration: underline;">FT</span></em></p> <p>- China based HNA Group is buying a 25 percent stake in Hilton for $6.5 billion. The deal to buy the stake from Blackstone values the US hotel chain at a 14 percent premium to Hilton's closing price.</p> <p>- World's largest independent oil trader Vitol said it is selling a 50 percent stake in its VTTI oil tank business to Buckeye Partners for $1.15 billion.</p> <p>- Rating agency S&amp;P warned that it may cut AT&amp;T's credit rating by one notch because of its deal to buy Time Warner, that would add to its debt.</p> <p>- Easyjet shares rallied on Monday after UBS turned positive on the company. UBS said that since expectation have already fallen more than 40 percent from recent peak, earnings risk is now "at least neutral". </p> <p>&nbsp;</p> <p><em><span style="text-decoration: underline;">NYT</span></em></p> <p>- Three judges at Washington's federal appeals court on Monday questioned the government's analysis that led to MetLife's designation as a "too big to fail" financial company, as the Justice Department appeals a lower court's decision to strip the insurance giant of that label. <a href="" title=""></a></p> <p>- TD Ameritrade announced on Monday that it would acquire Scottrade Financial Services, a rival discount brokerage, for $4 billion, in a bid for scale at a time when small investors are losing their taste for stock trading. <a href="" title=""></a></p> <p>- The New York Times has made another bet on so-called service journalism, with the acquisition of the product recommendation site the Wirecutter and its sibling, the Sweethome. The all-cash transaction, worth slightly more than $30 million, closed on Monday. <a href="" title=""></a></p> <p>- In a surprise move on Monday, the German authorities withdrew approval for the takeover of Aixtron SE, a domestic semiconductor firm, by a Chinese bidder - a deal that was set to be an emblem of a new push by Chinese companies to acquire cutting-edge technology businesses and a sign of Berlin's tolerance for such moves. <a href="" title=""></a></p> <p>&nbsp;</p> <p><em><span style="text-decoration: underline;">Britain</span></em></p> <p>The Times</p> <p>A group of Australian farming families have launched an eleventh-hour bid to keep the world's largest parcel of privately owned land, a string of cattle stations, out of Chinese hands. <a href="" title=""></a></p> <p>Steelworkers at Port Talbot face fresh uncertainty after the chairman of Tata Sons was ousted amid tensions over the conglomerate's poor performance. He has been replaced by Ratan Tata, the magnate who oversaw the group's international expansion. <a href="" title=""></a></p> <p>The Guardian</p> <p>Microsoft Corp will increase the prices it charges British businesses by up to 22 percent to account for the slump in the value of the pound following the EU referendum result. <a href="" title=""></a></p> <p>ITV Plc has announced plans to cut 120 jobs due to political and economic uncertainty, particularly concerns over the possible impact of Brexit. <a href="" title=""></a></p> <p>The Telegraph</p> <p>Cobham Plc, the troubled aerospace and defence manufacturer, has cut its profit forecast for the second time this year, sending its shares plunging. <a href="" title=""></a></p> <p>Donald Trump's presidential campaign is facing a fundraising scandal after a Telegraph investigation exposed how key supporters were prepared to accept illicit donations from foreign backers. <a href="" title=""></a></p> <p>Sky News</p> <p>A series of huge fines from U.S. regulators for mis-selling mortgage securities could be delayed until after next month's presidential election, dealing a blow to Royal Bank of Scotland's hopes of finalising a settlement by the end of the year. <a href="" title=""></a></p> <p>The UK government will make the decision of expanding an airport in southeast England on Tuesday. It is widely expected that Heathrow will be the winner but that Gatwick will be allowed to expand at a later date. <a href="" title=""></a></p> <p>The Independent</p> <p>Banks are planning to move business overseas in the first few months of 2017, Anthony Browne, chief executive officer of the British Bankers' Association, warned on Sunday, and some property investment companies are already looking to acquire new offices for their clients. <a href="" title=""></a></p> Apple Belgium British Bankers' Association China European Union Fail Federal Reserve New York Times Rating Agency ratings Reuters Tata Time Warner Too Big To Fail Tue, 25 Oct 2016 11:30:44 +0000 Tyler Durden 575801 at Monte Paschi Plunges As Much As 39% On Debt-For-Equity Fears After Surging In Past Week <p>After a furious rally in the past week on hopes that Italy's oldest, and most insolvent, bank, Siena's Monte Paschi has turned the corner and would return to profitability while outside investors would finally help it in its seemingly endless quest to find $5 billion in outside capital, today BMPS shares plunged after first opening limit up in what can only be characterized as a roller coast market. </p> <p>The bank's new CEO Marco Morelli, on the job just 6 weeks, announced he would lay off 2,600 as he targets a profit of 978 million euros in 2018 and 1.1 billion euros in 2019. Monte Paschi is also seeking to dispose of €28 billion of bad loans and is committed to raise as much as €5 billion in capital by the end of the year, with Morelli saying he’ll start talks with potential new investors this week.</p> <p>Concern over the terms of the recapitalization broke the ongoing euphoria over hopes for profitability, and Monte Paschi jumped as much as 27% before declining 23 percent to 27 cents at 11:50 a.m. in Milan. The Siena, Italy-based lender surged about 58 percent last week, helping pare losses this year to "only" 64%. The bank’s lower Tier 2 notes due in April 2020 rose 6 cents to about 80 cents, the highest level for the junior bonds since Aug. 2, according to data compiled by Bloomberg.</p> <p><a href=""><img src="" width="500" height="267" /></a></p> <p>What catalyzed the moves was Morelli's statement during a press conference that Monte Paschi plans to offer debt swap to all €5.1b outstanding bonds, adding that the main goal now is bringing bank back to normal and is “Absolutely open” to examine any proposal for bank. The market interpreted this as an aggressive debt-for-equity swap is imminent, one which could lead to even more massive equity dilution, and the result was show in the chart above.</p> <p>Earlier, Monte Paschi announced that in Q3 the bank recorded a loss of €1.15 billion, down from a profit of €255.8 million a year earlier as it set aside another €1.3 billion in provisions for soured loans. The common equity Tier 1 ratio, a measure of financial strength, slipped to 11.5% at the end of September from 12% at the end of 2015. </p> <p>As part of its cost-cutting operation, the bank plans to cut 2,600 jobs by 2019, compared with a previous goal of 2,700 remaining reductions by 2017. As of June 30, the bank counted 25,700 employees. It will shut about 500 branches out of about 1,900 outlets. Under the leadership of Fabrizio Viola, Monte Paschi struggled to reverse a slump in shares, with the bank amassing more than 6 billion euros in annual losses over the past four years.</p> <p>But while the new CEO's ambitious plan to return to profitability is admirable, mcuh more attention will be focused on the bank's far more pressing balance sheet needs. The bank has been struggling to find €5 billion in fresh capital ever since it failed the latest ECB stress test; the lender announced today it was committed to complete the capital raising by the end of the year, possibly in several tranches, include a debt-for-equity swap and a portion reserved for potential anchor investors. Shareholders will meet Nov. 24 to approve the proposed capital increase.</p> <p>Monte Paschi is still waiting for authorization for the planned voluntary debt swap, according to Morelli. The swap, whose terms are still to be defined, will involve all the 5 billion euros of outstanding institutional and retail subordinated bond holders, he added. Translation: more massive dilution for equity holders who will be crammed-down by an amount greater than the bank's entire market cap. </p> <p>Cited by Bloomberg, Miguel Hernandez and Geoffroy de Pellegars, analysts at BNP Paribas SA said that “perhaps the most important disclosure made this morning is the confirmation that retail investors will be involved in the exchange. We expect bonds to stabilize around these levels until we have firm indications of interest in the share sale from institutional investors.”</p> <p>As <a href="">Bloomberg notes</a>, the timing of the rescue offering will probably coincide with a vote on constitutional reform in Italy on Dec. 4 that may spark political uncertainty and market volatility. The bank aims to collect bondholder agreements on the swap before the vote to limit the impact on the recapitalization, according to people with knowledge of the plan. Prime Minister Matteo Renzi, who has made revamping Italy’s troubled banking system a key priority, has previously said he will quit if his reform is rejected.</p> <p>“With the clean-up loss charged in 2016 the key issue of this plan is that we still do not know who is going to underwrite the cash call,” said Fabrizio Bernardi, a Milan-based analyst with Fidentiis Equities. He has a sell recommendation on the shares.</p> <p>In a recent trial balloon by Italy's Il Messaggero newspaper, the sovereign funds of Qatar and Abu Dhabi, as well as the People’s Bank of China were said to be among investors that may be interested in the capital plan. Corriere della Sera, another Italian daily, reported that the sovereign fund of Kuwait may also weigh an investment. “We’re going to start entertaining talks with potential core investors today,” Morelli said, without elaborating. “We received a number of approaches from different parties.” </p> <p>Monte Paschi expects a return on tangible equity, a measure of profitability, of more than 10 percent in 2018 from the 8 percent targeted under a previous plan. As part of the overhaul, the lender is disposing of its debt recovery and merchant units, with Istituto Centrale delle Banche Popolari Italiane SpA having offered to buy the latter for 520 million euros.</p> <p>Monte Paschi’s pains date back a decade, when acquisitions that overstretched its finances and bets on bonds and derivatives by previous managers backfired, forcing the bank to book losses and restate accounts. In 2013, Monte Paschi became the target of national outrage when news broke that it used complex derivatives transactions fashioned by Deutsche Bank AG and Nomura Holdings Inc. to hide millions of euros in losses. In continuing the quiet sweep of the previous management team, the bank said it named Francesco Mele chief financial officer to replace Arturo Betunio who will leave the company on Nov. 25.</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="756" height="403" alt="" src="" /> </div> </div> </div> Abu Dhabi Bond China Deutsche Bank Institutional Investors Italy Kuwait Monte Paschi Newspaper Nomura recovery Stress Test Volatility Tue, 25 Oct 2016 11:00:51 +0000 Tyler Durden 575800 at The Oil-Gas War Over Syria (In 4 Maps) <p><em><a href="">Submitted by Eric Zuesse via Strategic Culture Foundation</a></em></p> <p>Turkey’s Anadolu News Agency, though government-run, is providing <a href="">remarkably clear and reliable diagrammatic descriptions of the current status</a> of the U.S - and - fundamentalist - Sunni, versus Russia - and - Shia - and - NON - fundamentalist - Sunni, sides, in the current oil-and-gas war in the Middle East, for control over territory in Syria, for construction of oil-and-gas pipelines through Syria supplying fuel into the world’s largest energy-market: Europe. Russia is now the dominant supplier of both oil and gas, but its ally Iran is a Shiite gas-powerhouse that wants to share the market there, and Russia has no objection.</p> <p>Qatar is a Sunni gas-powerhouse and wants to become the main supplier of gas there, and Saudi Arabia is a Sunni oil-powerhouse, which wants to become the major supplier of oil, but Saudi oil and Qatari gas would be pipelined through secular-controlled (Assad's) Syria, and this is <strong>why the U.S. and its fundamentalist-Sunni allies, the Sauds, and Qataris, are using Al Qaeda and other jihadists to conquer enough of a strip through Syria so that U.S. companies such as Halliburton will be able safely to place pipelines there, to be marketed in Europe by U.S. firms such as Exxon.</strong> Iran also wants to pipeline its gas through Syria, and this is one reason why Iran is defending Syria’s government, against the U.S.-Saudi-Qatari-jihadist invasion, which is trying to overthrow and replace Assad.</p> <p>Here are the most-informative of Anadolu’s war-maps:</p> <p>The first presents the effort by many countries to eliminate ISIS control over the large Iraqi city of Mosul. A remarkably frank remark made in this map is "An escape corridor into Syria will be left for Daesh [ISIS] so they can vacate Mosul" - an <strong>admission that the U.S. - Saudi - Qatari team want the ISIS jihadists who are in Mosul to relocate into Syria to assist the U.S. - Saudi - Qatari effort there to overthrow and replace the Assad government:<em>&nbsp;</em></strong></p> <p><a href=""><img src="" alt="Syria" width="600" height="439" /></a></p> <p>&nbsp;</p> <p>The second is about the Egyptian government's trying to assist the Syrian government's defense against the Saudi - U.S. - Qatari invasion of Syria, at Aleppo, where Syria's Al Qaeda branch is trying to retain its current control over part of that large city. The Saud family are punishing the Egyptian government for that:</p> <p><a href=""><img src="" alt="Syria" width="600" height="484" /></a></p> <p>&nbsp;</p> <p>Here is Russia's proposed gas-pipeline, which would enable Russia to reduce its dependence upon Ukraine (through which Russia currently pipes its gas into Europe). Obama <a href="">conquered and took over Ukraine in February 2014 via his coup that overthrew the democratically elected neutralist Ukrainian President there</a>:</p> <p><a href=""><img src="" alt="Syria" width="600" height="466" /></a></p> <p>&nbsp;</p> <p>In addition, there is the following map from <a href=""></a>:</p> <p><a href=""><img src="" alt="Syria" width="600" height="406" /></a></p> <p>&nbsp;</p> <p>That map shows the competing Shiia (Russia-backed) and Sunni (U.S.-backed) gas-pipelines into Europe — the central issue in the invasion and defense of Syria.</p> <p>On 21 September 2016, Gareth Porter headlined <a href="">"The War Against the Assad Regime Is Not a ‘Pipeline War’"</a>, and he pointed out some errors in Robert F. Kennedy Jr.’s account that had been published under the headline <a href="">"Syria: Another Pipeline War"</a>. Porter argued: "It's easy to understand why that explanation would be accepted by many anti-war activists: it is in line with the widely accepted theory that all the US wars in the Middle East have been ‘oil wars’ — about getting control of the petroleum resources of the region and denying them to America's enemies."</p> <p>But the ‘pipeline war’ theory is based on false history and it represents a distraction from the real problem of US policy in the Middle East — the US war state's determination to hold onto its military posture in the region. Porter ignored the key question there, as to why the US war state has a determination to hold onto its military posture in the region. Opening and protecting potential oil-gas-pipeline routes are important reasons why. Clearly, Kennedy’s documentation that the CIA was trying as early as 1949 to overthrow Syria’s secular government so as to allow to the Sauds a means of cheaply transporting their oil through Syria into Europe, remains unaffected by any of the objections that Porter raised to Kennedy’s article. The recent portion of Kennedy’s timeline is affected, but not his basic argument.</p> <p>Furthermore, any military strategist knows that the US war state is intimately connected to the U.S. oil-and-gas industries, including pipelines (oilfield services) as well as marketing (Exxon etc.). And Porter got entirely wrong what that connection (which he ignored) actually consists of: it consists of U.S. government taxpayer-funded killers for those U.S. international corporations. <a href="">Here is how Barack Obama put it</a>, when addressing graduating cadets at West Point, America’s premier military-training institution:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Russia’s aggression toward former Soviet states unnerves capitals in Europe, while China’s economic rise and military reach worries its neighbors. From Brazil to India, rising middle classes compete with us, and governments seek a greater say in global forums. And even as developing nations embrace democracy and market economies, 24-hour news and social media makes it impossible to ignore the continuation of sectarian conflicts and failing states and popular uprisings that might have received only passing notice a generation ago.</p> <p>&nbsp;</p> <p>It will be your generation’s task to respond to this new world. The question we face, the question each of you will face, is not whether America will lead, but how we will lead - not just to secure our peace and prosperity, but also extend peace and prosperity around the globe.</p> </blockquote> <p>He was saying there that America’s military is in service to U.S.-based international corporations in their competition against those of Russia, Brazil, China, India, and anywhere else in which "rising middle classes compete with us". Those places are what Gareth Porter referred to as "America's enemies".</p> <p>Economic competitors are "enemies". Obama thinks that way, and even a progressive journalist such as Porter doesn’t place into a skeptical single - quotation - mark - surround, the phrase ‘America’s enemies’ when that phrase is used in this equational context. On both the right (Obama) and the left (Porter), the equation of a government and of the international corporations that headquarter in its nation — the treatment of the military as being an enforcement-arm for the nation’s international corporations — is simply taken for granted, not questioned, not challenged.</p> <p>RFK Jr. was correct, notwithstanding some recent timeline-errors. Syria is "Another Pipeline War", and Obama is merely intensifying it. (On 9 November 2015, I offered a <a href="">different account</a> than RFK Jr. provided of the recent history — the Obama portion — of the longstanding U.S. aggression against Syria; and it links back to Jonathan Marshall’s excellent articles on that, and to other well-sourced articles, in addition to primary sources, none of which contradict RFK Jr.’s basic view, "Syria: Another Pipeline War").</p> <p>Another portion of Porter’s commentary is, however, quite accurate: America’s ‘Defense’ (or mass-killing-abroad) industries (such as Lockheed Martin) are not merely servants of the U.S. government, but are also served by the U.S. government: "the US war state's determination to hold onto its military posture in the region" is protection of the major market — the Middle Eastern market — for U.S. ‘Defense’ products and services. It’s not only America’s firms in the oil, gas, and pipelines, industries, which benefit from America’s military; it is also America’s firms in the mass-killing industries, that do.</p> <p>To the extent that the public (here including Barack Obama and Gareth Porter) do not condemn the presumption that "the business of America is business", or that a valid function of U.S. - taxpayer - funded military and other foreign-affairs operations is to serve the stockholders of U.S. international corporations, the hell (such as in Syria) will continue. Gareth Porter got lost among the trees because he failed to see (and to point to) that forest.</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="720" height="487" alt="" src="" /> </div> </div> </div> Barack Obama Brazil China ETC Exxon India Iran Middle East None Saudi Arabia Ukraine Tue, 25 Oct 2016 10:50:00 +0000 Tyler Durden 575776 at US Futures, Global Stocks, Metals Rise On Economic Confidence, Upbeat Earnings <p>European, Asian stocks and S&amp;P futures are all up again in early trading, a repeat of the Monday session, buoyed by a generally upbeat corporate earnings season, rising economic confidence and signs of improvement in the world’s biggest economies.&nbsp; The Bloomberg Dollar Spot Index held near its highest level since March as fed fund futures prices Monday indicated there’s a 71 percent chance of a rate increase this year, up from 68 percent last week. The dollar rose after Chicago Fed President Charles Evans said it’s likely that interest rates will be hiked three times by the end of 2017 (although one year ago we were supposed to get 4 rate hikes in 2016). </p> <p>“If we look at the health of the U.S. economy, it just makes absolute sense to hike in December,” said James Woods, a strategist at Rivkin Securities in Sydney. While stocks may head higher, “it would not be a significant rally until we get the U.S. presidential election and rates out of the way,” he said.</p> <p>Factory surveys in the United States and Europe had boasted the best readings of the year so far on Monday and a six-month high for Japanese stocks in Tokyo overnight had followed a record close for the tech-heavy U.S. Nasdaq. European markets started with Germany's Dax nudging its highest level of the year as the closely-watch Ifo sentiment survey beat expectations a day after purchasing manager numbers had done the same.</p> <p>"We are seeing a pick up of economic activity against the backdrop of only one central bank -- the Fed -- that is likely to tighten policy and that is supporting asset markets," said CMC Markets senior analyst Michael Hewson.</p> <p>German business confidence rose to a 2 year high after the German IFO business climate survey rose +1.0pt in October, rising from 109.5 to 110.5. Today's print builds on the strong gain in the previous month and takes the level of the IFO to the highest it has been since April 2014. Yesterday's PMI also showed robust improvement in Germany. As the following chart shows, the various German confidence indices are on a tear recently after yesterday's stronger than expected PMI data. Now if only hard data can confirm the booming "soft" surveys.</p> <p><img src="" width="500" height="355" /></p> <p>Attention has turned to commodities, and especially the metals complex, after iron ore surged by the daily 6% limit on China's Dalian Commodity Exchange, and rising steel prices in China spurred a rally from aluminum to zinc. This boosted the currencies of resource-exporting nations, with South Africa and Australia leading gains versus the dollar. </p> <p><a href=""><img src="" width="500" height="281" /></a></p> <p>Industrial metals have gained steadily this year with an index of London Metal Exchange contracts poised for the first annual increase since 2012 as a pickup in manufacturing in the U.S. and euro area point to an economy that’s getting more robust. A report Tuesday showing German business sentiment rose to the highest level in more than two years in October added to the sense of optimism. </p> <p>“We’ve had a whole host of better-than-expected manufacturing data,” said Ole Hansen, the head of commodity strategy at Saxo Bank A/S in Hellerup, a Copenhagen suburb. “Strong gains in China, led by steel and iron ore, are supporting the sentiment, which in turn has attracted increased speculative trading across the metals space.”</p> <p>What is curious is that the recent bout of strength - compounded with a lack of market volatility - comes at a time when the Chinese currency is plunging again, and just yesterday the offshore traded Yuan tumbled to the lowest on record since it began trading in 2010. The onshore exchange rate declined in all but one of this month’s 11 trading sessions through Monday, a sign the central bank has reduced support since the currency’s inclusion in the International Monetary Fund’s Special Drawing Rights on Oct. 1. Confused traders are wondering if this time really is different or if the market will simply react to this latest sign of deterioration in China's fund flows with its usual delayed reaction time.</p> <p>The Stoxx Europe 600 Index headed for its strongest close in three weeks as earnings reports fueled optimism about the profitability of the region’s companies. Spanish and Italian bonds outperformed top-rated German bunds as the region’s improving political and economic outlook sapped demand for haven assets. </p> <p>The Stoxx 600 rose 0.1 percent, with miners leading gains; 14 out of 19 Stoxx 600 sectors rise with basic resources, banks outperforming and autos, health care underperforming; 59% of Stoxx 600 members gain, 40% decline. Orange SA led the charge among telecommunications stocks, adding 4.7 percent after posting an increase in quarterly profit.&nbsp; Randstad Holding NV rose 1.2 percent after announcing better-than-estimated revenue and saying growth trends were resilient across regions. Luxottica Group SpA jumped 7.7 percent after the maker of Ray-Ban sunglasses said sales growth will accelerate in 2017.</p> <p>S&amp;P 500 Index futures climbed 0.2%. U.S. equities added 0.5 percent on Monday as deal activity boosted sentiment. Earnings remain in focus this week. Visa Inc. posted higher-than-expected profit after the close, and investors will be looking Tuesday to reports from Procter &amp; Gamble Co. and General Motors Co. for indications of the health of corporate America. Caterpillar Inc. is among companies scheduled to release earnings that may provide more insight on the sustainability of the recovery in energy and mining. Apple Inc. is due to announce earnings after markets close Tuesday.</p> <p>In rates, the yield on Italian 10-year bonds declined two basis points to 1.37%, while Spanish 10Y bonds fell three basis points to 1.08%. The yield on benchmark German bunds fell one basis point to 0.17%. Yields on Treasuries due in a decade were steady at 1.76%, after climbing three basis points on Monday. U.S. yields will have to rise if Evans proves to be correct in his 3 rate hikes predictions for 2017, according to Kim Youngsung, head of overseas investment at South Korea’s Government Employees Pension Service in Seoul.&nbsp; After one increase “for sure” in December, two more in 2017 will send the 10-year yield past 2.5 percent, Kim said. Economists predict the benchmark will end next year at 2.14 percent, according to a Bloomberg survey with the most recent forecasts given the heaviest weightings. Japan’s 20-year government bonds rose for a fourth day after demand picked up at an auction of the securities on Tuesday. The yield fell 1/2 a basis point to 0.37 percent, matching its lowest level of the past three weeks.</p> <p>* * * </p> <p><strong>Bulletin Headline Summary from RanSquawk</strong></p> <ul> <li>European equities trade higher across the board as positive earnings continue to guide sentiment</li> <li>The German IFO survey came in higher than expected on all three readings. However, the reaction from the EUR was a tame one at best</li> <li>Looking ahead, highlights include Fed's Lockhart, BoE's Carney and ECB's Draghi</li> </ul> <p><strong>Market Snapshot</strong></p> <ul> <li>S&amp;P 500 futures up 0.2% to 2149</li> <li>Stoxx 600 up 0.3% to 345</li> <li>FTSE 100 up 0.5% to 7019</li> <li>DAX up 0.5% to 10814</li> <li>German 10Yr yield down less than 1bp to 0.02%</li> <li>Italian 10Yr yield down 2bps to 1.37%</li> <li>Spanish 10Yr yield down 3bps to 1.08%</li> <li>S&amp;P GSCI Index up 0.7% to 377.4</li> <li>MSCI Asia Pacific up 0.4% to 141</li> <li>Nikkei 225 up 0.8% to 17365</li> <li>Hang Seng down 0.2% to 23565</li> <li>Shanghai Composite up 0.1% to 3132</li> <li>S&amp;P/ASX 200 up 0.6% to 5443</li> <li>US 10-yr yield down less than 1bp to 1.76%</li> <li>Dollar Index down 0.09% to 98.66</li> <li>WTI Crude futures up 0.8% to $50.92</li> <li>Brent Futures up 0.7% to $51.82</li> <li>Gold spot up 0.5% to $1,270</li> <li>Silver spot up 1.1% to $17.79</li> </ul> <p><strong>Global Headline News</strong></p> <ul> <li>Fed Inclined to Raise Rates If Next President Pumps Up Budget: Shift in policy mix could prove troublesome for markets</li> <li>Monte Paschi Jumps as CEO Pledges to Boost Profit, Cut Branches: Lender targeting annual profit of 1.1 billion euros in 2019</li> <li>Dow Chemical CEO Says DuPont Merger May Be Delayed to February: Regulators’ biggest concern is impact on farming, Liveris says</li> <li>Visa Checkout Opening Its Platform; Android Pay Will Offer: Issuers, digital wallets, payment app providers will have access to APIs to integrate with Visa Checkout open platform; can access Visa Checkout open platform in 1H 2017</li> <li>ASM International Could Be a Potential Takeover Target: Mega-mergers no longer seem feasible in the sector, with two large mergers having been blocked, Kepler says</li> <li>Syngenta Sees ChemChina Approval Delays on Deeper EU Prob</li> <li>U.S. Said to Be Closing in on Venezuelan Asset Seizures, Charges</li> </ul> <p>* * * </p> <p><strong>Looking at regional markets, we start in Asia where stocks were lifted by the improved sentiment globally following the latest batch of firm earnings, </strong>which looks set to continue to dictate price action with Apple due to report later today. Nikkei 225 (+0.8%) is trading with modest gains, while the index has also supported by the weaker JPY. ASX 200 (+0.6%) follows suit with shares paring yesterday's healthcare triggered losses while Chinese markets were indecisive with Shanghai Comp (+0.1%) and Hang Seng (+0.1%) down on mild profit taking after yesterday's outperformance which saw the mainland index print 2-month highs. KOSPI (-0.5%) underperformed on the back of lower than prior Q3 prelim GDP figures, which comes despite beating expectations. Japanese bond yields continued to flatten across the curve, with outperformance yet again in the long end, with JGB's tracking higher post the firm 20-yr auction.</p> <p><em>Asian Top News</em></p> <ul> <li>Offshore Yuan Trades Near Record Low as PBOC Seen Allowing Drop: Authorities are delinking yuan from dollar, focusing on basket</li> <li>China Money Rate Rises to 18-Month High as Yuan Spurs Outflows: Central bank adds most funds in six months to counter drain</li> <li>JR Kyushu Shares Surge in Tokyo Debut After $4 Billion IPO: Stock climbs as much as 20% from sale price of 2,600 yen</li> <li>Lotte Revives Hotel IPO as Group Seeks to Regain Confidence: Group is also plans listings of other Lotte affiliates</li> <li>Turmoil Erupts at Tata as India’s Top Group Ousts Chairman: Ratan Tata returns as interim chairman to fill in for Mistry</li> <li>SK Hynix Profit Beats Estimates as Memory Chip Prices Rally: DRAM shipments rose on demand for mobile devices, PCs</li> </ul> <p><strong>In Europe, bourses trade in positive territory as a slew of earnings help push equities higher (EuroStoxx +0.25%) </strong>with macro newsflow otherwise relatively light. In terms of sectors, the outperformer today is telecommunications, after Orange (ORA FP) posted a beat on expectations and is currently the notable outperformer in the CAC 40 (+0.33%). Also of note, the Wind and Italia 3 merger has been approved by the EU commission which could also contribute to sector bullishness. Fixed income markets have been capped by the gains in equities and supply may also be a factor with a number or corporates entering the market notably, Danone offering a 5 part EUR-deal. PGB's are still benefitting from the positive effects of that DBRS rating and Bono (Spanish) yields continue to perform well after Spanish PM Rajoy announced the formation of a ruling government and the Tesoro confirmed there will be EUR 5bIn less issuance this year. Furthermore, this morning has also seen UK open books on their 2065 Gilt with Austria opening books for their 7 and 70yr issuance.</p> <p><em>European Top News</em></p> <ul> <li>Novartis 3Q Core EPS Beats, Net Sales in Line; Keeps FY Outlook</li> <li>German Ifo Business Confidence Increases to Highest Since 2014: Gauges for current situation, expectations both improve</li> <li>Orange Earnings Rise 1.6% on Mobile Demand in Spain, Africa: Growth outside France helps offset effects of domestic rivalry</li> <li>Julius Baer, DBS Said to Vie for ABN Amro’s Asia Wealth Arm: LGT Bank also weighing bid for Asia private-banking business</li> <li>U.K. to Show Sharpest Slowdown in Europe in Third Quarter: May see growth slow to 0.3 percent from 0.7 percent -- and then to just 0.1 percent in the last three months of the year</li> <li>Swedbank Beats Estimates as Third-Quarter Profit Jumps 23%: CEO says Swedbank will speed up its digital banking push</li> </ul> <p><strong>In FX, the Bloomberg Dollar Spot Index held near its highest level since March as fed fund futures prices Monday indicated there’s a 71 percent chance of a rate increase this year, up from 68 percent last week.</strong> The gauge gained in the last session as Fed Bank of Chicago President Charles Evans said it’s likely that interest rates will be hiked three times by the end of 2017. South Africa’s rand rose 0.5 percent, followed by a 0.4 percent gain for the Australian dollar amid a pickup in commodities prices. They were among the few to advance versus the greenback, which is being supported by speculation that the economy is strong enough for the Federal Reserve to increase interest rates. Canada’s dollar weakened 0.4 percent, erasing most of the last session’s rebound from a seven-month low, after central bank Governor Stephen Poloz clarified earlier remarks that had curbed speculation interest rates will be cut. Poloz said he wasn’t referring to monetary policy when he told lawmakers that the best plan was “to wait for the next 18 months or so.” The yuan held near a six-year low in Shanghai and reached its weakest level on record in the offshore market, which began trading in 2010. The onshore exchange rate declined in all but one of this month’s 11 trading sessions through Monday, a sign the central bank has reduced support since the currency’s inclusion in the International Monetary Fund’s Special Drawing Rights on October 1.</p> <p><strong>In commodities, after three years of slumping prices as mine supply rose and Chinese growth slowed, iron ore has gained 36 percent in 2016. </strong>China steelmakers, which produce half the world’s output, have fired up plants after stronger demand boosted prices and expanded profit margins. Zinc, used to galvanize steel, jumped 2.1 percent at 10:53 a.m. in London after surging to a five-year high on the Shanghai Futures Exchange, while hot rolled steel coil climbed to levels last seen in April. Coking coal, necessary for steel production, rallied to an all-time high on tight supplies. Aluminum, copper and nickel all gained more than 2 percent on the LME. Crude oil rose 0.5 percent to $50.79 a barrel in New York, having declined 0.7 percent on Monday after Iraq said it should be exempted from planned production cuts being orchestrated by the Organization of Petroleum Exporting Countries. The head of OPEC is set to visit Baghdad on Tuesday for talks aimed at resolving the matter.</p> <p><strong>Looking at the day ahead, </strong>it’s mainly second tier data due out in the US today although the highlight will be the October consumer confidence reading. As a reminder the September print unexpectedly surged to 104.1 which is the highest since August 2007 with the improvement fairly evenly split between current conditions and future expectations. The market does expect some moderation in the October level (101.5 expected) although that will still keep it near the top end of the recent range. Also due out this afternoon in the US will be housing market data in the form of the FHFA and S&amp;P/Case-Shiller home price indices. The Richmond Fed manufacturing survey for October is expected to show some improvement, while the IBD/TIPP economic optimism reading is other the data point today. Fedspeak wise the Fed’s Lockhart is scheduled to speak on ‘lending and investing in community development’ at 6pm BST, although the title suggests that it won’t be particularly monetary policy focused. </p> <p>* * * </p> <p><strong>US Event Calendar</strong></p> <ul> <li>8:55am: Redbook weekly sales</li> <li>9am: FHFA House Price Index m/m, Aug., est 0.4% (prior 0.5%)</li> <li>9am: S&amp;P CoreLogic CS Home Price Index m/m (prior 0.41%)</li> <li>10am: Consumer Confidence Index, Oct., est. 101.5 (prior 104.1)</li> <li>10am: Richmond Fed Manufacturing Index, Oct., est. -4 (prior -8)</li> <li>10am: IBD/TIPP Economic Optimism, Oct., est. 47.5 (prior 46.7)</li> <li>1:20pm: Fed’s Lockhart speaks in Atlanta</li> <li>4:30pm: API weekly oil inventories</li> </ul> <p>* * * </p> <p><strong>DB's Jim Reid concludes the overnight wrap</strong></p> <p>This week hasn’t really got going yet and to be honest there’s not a huge amount of news to report of in the last 24 hours. With the ECB meeting behind us and the bigger macro events still to come it does feel like markets are in a bit of a holding pattern right now. Earnings ramp up today though and are headlined by the Apple numbers tonight which are always a bit of a spectacle for markets. So there’s that to look forward to.</p> <p>If there’s one area which has been kept busy in recent days though, it’s M&amp;A. Indeed, hot on the heels of the AT&amp;T/Time Warner and BAT/Reynolds American announcements last week it was very much ‘Merger Monday’ yesterday following a flurry of further deal announcements. Yesterday we saw Chinese conglomerate HNA Group agree to a deal to acquire a stake in Hilton for $6.5bn. Aircraft component maker Rockwell Collins has announced that it is to purchase B/E Aerospace for $6.4bn and in the financial sector TD Ameritrade has agreed to buy Scottrade Financial Services for $4bn.</p> <p>Indeed the window of opportunity for corporates might be narrowing as we approach year-end what with the number of potential risk events on the horizon. The US election is hovering just around the corner now while we’ve also got the Italy referendum to deal with, along with all things Fed, ECB and BoJ related. Not forgetting also the Brexit High Court case which is slowly bubbling below the surface, as well as the ongoing OPEC saga. So it might still be too early to call for any resurgence in animal spirits but yesterday’s announcements still helped to lift US equities. The S&amp;P 500 closed +0.47% with the telecoms sector leading the charge. The Nasdaq (+1.00%) was the standout however after better than expected results from T-Mobile saw the US mobile carrier’s shares rally near 10%. European equities were initially stronger but faded into the close with the Stoxx 600 closing -0.01%. However the news that Rajoy is to take office for a second term in Spain and so ending the political impasse helped the IBEX to climb +1.27% while a decent performance for Spanish Banks also helped wider European Banks (+1.38%) continue their recent strong performance.</p> <p>Refreshing our screens this morning, it’s been a fairly mixed but all-in-all quiet start in Asia. The Nikkei (+0.62%) and ASX (+0.69%) are both tracking higher however the Hang Seng (-0.19%), Shanghai Comp (-0.11%) and Kospi (-0.68%) are all struggling for traction somewhat. Oil has struggled so far this week with WTI down -0.81% from Friday’s close with the focus turning to comments from Iraq’s Oil Minister who suggested that Iraq should be exempt from a production cut deal. More interesting in Asia however is the continued focus on the weakening Chinese Renminbi. The offshore Yuan is hovering around a six-year low of 6.7836 this morning and in the 17 trading days in October so far, has weakened on 14 of them now. Clearly the market and investors have become a lot more accustomed to allowing greater flexibility in China’s currency moves but the latest weakening is starting to attract more and more headlines.</p> <p>Moving on. Away from all things M&amp;A related yesterday, the focus data-wise was on the October flash PMI’s. The data was particularly positive in Europe. Indeed the composite Euro area reading rose 1.1pts to 53.7 (vs. 52.8 expected). Both manufacturing (+0.7pts to 53.3) and services (+1.3pts to 53.5) readings edged higher while by country it was the composite reading for Germany (+2.3pts to 55.1) which impressed. France (-0.5pts to 52.2) was a little more disappointing although there was some upside in the latest manufacturing data there. Our European economists also highlighted that those PMI’s and other indicators suggest some upside risks of 0.1pp to their +0.3% qoq growth forecast for Q4 in the Euro area.</p> <p>Across the pond the flash manufacturing PMI in the US was also up this month after printing at 53.2 (vs. 51.5 expected) following a 51.5 reading in September. Treasuries faded a little with that data, the benchmark 10y yield finishing 3bps lower at 1.766% which is bang in line with where it was this time a week ago. The USD rally took a pause for breath although it was noted that the December Fed hike probability has now crept above 70% versus 66% this time last week. It was a similar story for core government bond markets in Europe yesterday although the periphery outperformed. 10y yields in Portugal were 3.8bps lower yesterday at 3.121% following the DBRS rating announcement we highlighted yesterday, while Spain (-1.2bps) also outperformed slightly on the weekend news. While we’re in the periphery, the latest Italian referendum poll run by EMG Acqua for TG La7 showed that 34.7% of Italians would vote to approve Renzi’s constitutional reform versus 37.8% who would reject. That leaves a sizeable 27.5% that are still undecided and underlines what we have said previously in that the number of undecided voters is still very much elevated.</p> <p>Elsewhere, the Fedspeak didn’t offer a huge amount to the debate yesterday. The usually dovish Chicago Fed President Evans said that ‘I think that there is room for the economy to continue to grow before we see inflation really pick up’ while the St Louis Fed President Bullard reiterated his view that there is no urgency in the Fed’s framework but that a single rate rise, likely in December, is all that is necessary for the time being.</p> <p>Meanwhile, over at the ECB the latest CSPP holdings data is in. The ECB confirmed that it held €35.886bn of bonds as of the end of last week which implies net purchases settled last week of €2.089bn. On a daily run rate basis that works out at €418m per day which is slightly above the €378m average since the start of the program. So another solid week of purchases.</p> <p>Looking at the day ahead, this morning in Europe the day kicks off in France where the various October confidence indicators are due out. Shortly following that we’ll get the October IFO readings in Germany where the market is expecting little change in the headline business climate print. It’s mainly second tier data due out in the US this afternoon although the highlight will be the October consumer confidence reading. As a reminder the September print unexpectedly surged to 104.1 which is the highest since August 2007 with the improvement fairly evenly split between current conditions and future expectations. The market does expect some moderation in the October level (101.5 expected) although that will still keep it near the top end of the recent range. Also due out this afternoon in the US will be housing market data in the form of the FHFA and S&amp;P/Case-Shiller home price indices. The Richmond Fed manufacturing survey for October is expected to show some improvement, while the IBD/TIPP economic optimism reading is other the data point today. Fedspeak wise the Fed’s Lockhart is scheduled to speak on ‘lending and investing in community development’ at 6pm BST, although the title suggests that it won’t be particularly monetary policy focused. In Europe there are a couple of important speakers however. ECB President Draghi speaks at 4.30pm BST on ‘stability, equity and monetary policy’ while BoE Governor Carney is due to appear in front of the House of Lords Economic Affairs Committee on the economic consequences of the Brexit vote. Earnings will be the other big focus today. 51 S&amp;P companies are due to report with the ighlight being Apple after the close. Merck, Caterpillar and P&amp;G will also be worth watching while in Europe Fiat Chrysler report.</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="629" height="447" alt="" src="" /> </div> </div> </div> Across the Curve Apple Australia Australian Dollar B+ BOE Bond Case-Shiller China Chrysler Consumer Confidence Copenhagen Copper Corporate America Crude Crude Oil Fed Fund Futures Federal Reserve fixed France Fund Flows General Motors Germany headlines Housing Market Iraq Italy Jim Reid KIM Monetary Policy NASDAQ Nikkei OPEC Portugal Price Action recovery Renminbi Richmond Fed Saxo Bank Speculative Trading St Louis Fed St. Louis Fed Tata Time Warner Volatility Yuan Tue, 25 Oct 2016 10:41:27 +0000 Tyler Durden 575799 at "Don’t Repeat That To Anybody" - Hillary Clinton And Donna Brazile Personally Implicated In Latest Project Veritas Video <p>Last week, Jame O'keefe and <a href="">Project Veritas Action</a> potentially altered the course of the U.S. election, or at a minimum raised serious doubts about the practices of the Clinton campaign and the DNC, after <strong>releasing two undercover videos that revealed efforts of democrat operatives to incite violence at republican rallies and commit "mass voter fraud."</strong>&nbsp; While democrats have vehemently denied the authenticity of the videos, two democratic operatives, Robert Creamer and Scott Foval, have both been forced to resign over the allegations.</p> <p>Many democrats made the rounds on various mainstream media outlets over the weekend in an attempt to debunk the Project Veritas videos.&nbsp; Unfortunately for them, O'Keefe fired back with warnings that part 3 of his multi-part series was forthcoming and would implicate Hillary Clinton directly.</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">Anything happens to me, there's a deadman's switch on Part III, which will be released Monday. <a href="">@HillaryClinton</a> and <a href="">@donnabrazile</a> implicated.</p> <p>— James O'Keefe (@JamesOKeefeIII) <a href="">October 21, 2016</a></p></blockquote> <script src="//"></script><script src="//"></script><p>&nbsp;</p> <p>Now, we have the 3rd installment of O'Keefe's videos which does seemingly reveal direct coordination between Hillary Clinton, Donna Brazile, Robert Creamer and Scott Foval to organize a smear campaign over Trump's failure to release his tax returns.&nbsp; Per <a href=";">Project Veritas</a>:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Part III of the undercover Project Veritas Action investigation dives further into the back room dealings of Democratic politics. It exposes prohibited communications between Hillary Clinton’s campaign, the DNC and the non-profit organization Americans United for Change. And, it’s all disguised as a duck. In this video, several Project Veritas Action undercover journalists catch Democracy Partners founder <strong>directly implicating Hillary Clinton in FEC violations.</strong> “<strong>In the end, it was the candidate, Hillary Clinton, the future president of the United States, who wanted ducks on the ground,” says Creamer in one of several exchanges. “So, by God, we would get ducks on the ground.”</strong> It is made clear that high-level DNC operative Creamer realized that this direct coordination between Democracy Partners and the campaign would be damning when he said: <strong>“Don’t repeat that to anybody.”</strong>&nbsp; </p> </blockquote> <p>Within the video both Clinton and Brazile are directly implicated by Creamer during the following exchange:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>"The duck has to be an Americans United for Change entity.&nbsp; <strong>This had to do only with some problem between Donna Brazile and ABC, which is owned by Disney, because they were worried about a trademark issue.</strong>&nbsp; That's why.&nbsp; It's really silly.</p> <p>&nbsp;</p> <p>We originally launched this duck because<strong><span style="text-decoration: underline;"> Hillary Clinton wants the duck</span>.</strong></p> <p>&nbsp;</p> <p>In any case, so she really wanted this duck figure out there doing this stuff, so that was fine.&nbsp; So, we put all these ducks out there and got a lot of coverage.&nbsp; And Trump taxes.&nbsp; And then <strong>ABC/Disney went crazy because they thought our original slogan was 'Donald ducks his taxes, releasing his tax returns."</strong></p> <p>&nbsp;</p> <p>They said it was a trademark issue.&nbsp; It's not, but anyway,<strong><span style="text-decoration: underline;"> Donna Brazile</span> had a connection with them and she didn't want to get sued.&nbsp; So we switched the ownership of the duck to Americans United for Change</strong> and now our signs say 'Trump ducks releasing his tax returns.'&nbsp; And we haven't had anymore trouble."</p> </blockquote> <p>As Project Veritas points out, this direct <strong>coordination between Clinton, Brazile and Americans United For Change is a violation of federal election laws:</strong></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>"The ducks on the ground are likely 'public communications' for purposes of the law.&nbsp; It's political activity opposing Trump, paid for by Americans United For Change funds but controlled by Clinton/her campaign."</strong></p> </blockquote> <p><strong>&nbsp;</strong></p> <p>Here is the <a href=";">full video</a> just released:<strong><br /></strong></p> <p><iframe src="" width="600" height="337" frameborder="0"></iframe></p> <p>&nbsp;</p> <p>As a reminder, below are parts 1 &amp; 2 of the Project Veritas series in case you missed them.</p> <p>Video 1 revealed DNC efforts to incite violence at Trump rallies:</p> <p><iframe src="" width="600" height="337" frameborder="0"></iframe></p> <p>&nbsp;</p> <p>Video 2 provided the democrat playbook on how to committ "mass voter fraud":</p> <p><iframe src="" width="600" height="337" frameborder="0"></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="1190" height="595" alt="" src="" /> </div> </div> </div> Tue, 25 Oct 2016 09:07:10 +0000 Tyler Durden 575771 at America's "Two-Party System" Has Jumped The Shark <p><a href=""><em>Submitted by JP Sottile via,</em></a></p> <p><strong>The&nbsp;<a href="" target="_blank">Alfred E. Smith dinner</a> is supposed to put a bipartisan bow on the gift of American democracy.</strong> For decades, the well-heeled and well-connected have come together to laugh <em>at</em> and <em>with</em> the chosen presidential candidates from the two wings of the governing duopoly. It&rsquo;s meant to be a reminder that they are all in the same boat and that politics stop at the water&rsquo;s edge. It supposed to be a reassuring reminder that the system works. It&rsquo;s supposed to be all in good fun.</p> <p><u><strong>But&nbsp;<a href="" target="_blank">this year&rsquo;s dinner</a> turned ugly.</strong></u> Donald Trump was&nbsp;<a href="" target="_blank">resoundingly booed</a> for predictably not knowing the difference between his overwrought, histrionic campaign and self-effacing bipartisan banter. Hillary Clinton jabbed back with sharply written jokes before kibitzing with a bevy of power elites (<a href="" target="_blank">Hello, Kissinger!</a>) as they slowly left the dais after taking turns posing with the Establishment&rsquo;s cardboard cutout.</p> <p>Frankly, it was exactly the sort of &ldquo;dinner theater of the absurd&rdquo; we&rsquo;ve come to expect after sixteen months of petulant name-calling, hacked emails, carnival-like debates, and the media&rsquo;s&nbsp;<a href="" target="_blank">profitable</a> collusion with both candidates. More than ever before, the duopoly is asking voters to render judgment on comically-flawed contestants in what&rsquo;s little more than an overly-produced talent competition between two intolerably bad performers.<strong> It&rsquo;s American democracy as&nbsp;<a href="" target="_blank">The Gong Show</a>.</strong></p> <p><iframe allowfullscreen="" frameborder="0" height="315" src="" width="560"></iframe></p> <p><strong>This ever more divorced from reality show looks like the grand finale of a political system that&rsquo;s finally discarded any lingering pretense of policy proposals, budgetary priorities, and functional governance. </strong>Now it&rsquo;s all come down to a simplistic, binary choice between a bombastic, narcissistic villain and a cold, calculating scoundrel. It&rsquo;s a choice between doom and not doom. It&rsquo;s us versus them.</p> <p><span style="text-decoration: underline;"><strong>And that&rsquo;s because the Two-Party System&trade; has finally jumped the shark.</strong></span></p> <p>&ldquo;Jumping the Shark&rdquo; comes from an&nbsp;<a href="" target="_blank">infamous episode</a> of Happy Days when, in the midst of its 11-year run, the show&rsquo;s brain trust concocted a gimmicky, three-part cliffhanger storyline featuring the Fonz&nbsp;<a href="" target="_blank"><em>literally jumping over a shark&nbsp;</em></a>during the climactic scene of the opening episode of the fifth season. Since then, &ldquo;Jumping the Shark&rdquo; has become shorthand for pointing out the looming bankruptcy of an idea and the last ditch effort to save it with a bizarre, unbelievable, and comically excessive plot device.</p> <p><u><em><strong>Can you say &ldquo;2016 Presidential campaign&rdquo;?</strong></em></u></p> <p>Like the Fonz in a leather jacket on water skis jumping over a dangerous shark, this grotesque campaign looks more and more like one big gimmicky stunt to drum up ratings for a tired, predictable premise. In this year&rsquo;s political episode it&rsquo;s Uncle Sam being whisked around behind the boat wearing an ill-fitting life preserver.</p> <p>The music swells as he gets closer to the ramp.</p> <p>The camera cuts away to the spin room to show us contorted reaction shots on the hammy faces of a familiar cast of campaign surrogates &hellip; just to make sure we remember to feel all that manufactured tension.</p> <p>The press gaggle swims around in the muddied waters they&rsquo;ve incessantly chummed with the fetid leftovers from nearly thirty years of the candidates&rsquo; personal and professional peccadilloes.</p> <p><iframe allowfullscreen="" frameborder="0" height="315" src="" width="560"></iframe></p> <p><strong>Then &mdash; as if on cue &mdash; this melodrama is perfectly set up when America&rsquo;s first Celebritician rewrites the script of Election Day into an actual cliffhanger!</strong> Trump&rsquo;s unsurprising recalcitrance in the face of looming defeat was even punctuated with &ldquo;<a href="" target="_blank">I&rsquo;ll keep you in suspense</a>.&rdquo; It&rsquo;s like he&rsquo;s actually directing a bizarre reboot of that infamous Happy Days three-parter! Now, all the audience can hope for is that Uncle Sam is successful and representative democracy lands safely on the other side.</p> <p><strong>Off screen, the Two-Party producers nervously hope their show will be renewed for another season.</strong> And frankly, that&rsquo;s exactly what&rsquo;s at stake. For the first time since the end of World War II, cancellation seems like a real possibility. That&rsquo;s because this election is exposing the extent to which America&rsquo;s Two-Party System&trade; &mdash; like a long-running, woefully worn-out sitcom &mdash; has simply run out of ideas.</p> <p><u><strong>There are no new ideas to free-up a post-Crash economy now &ldquo;<a href="" target="_blank">trapped</a>&rdquo; in a state of suspended animation by&nbsp;<a href="" target="_blank">$3.5 trillion</a> worth of Federal Reserve funny-money.</strong></u> The so-called &ldquo;fundamentals&rdquo; of this&nbsp;<a href="" target="_blank">highly-financialized</a> global system are built on&nbsp;<a href="" target="_blank">mountains of debt</a>, on stock prices&nbsp;<a href="" target="_blank">artificially pumped-up&nbsp;</a>by quantitative easing, and on the&nbsp;<a href="" target="_blank">systematic buying-off</a> of criminal charges to&nbsp;<a href="" target="_blank">ease anxious investors&rsquo; minds</a>. This is all set against the backdrop of an&nbsp;<a href="" target="_blank">increasingly disrupted</a> jobs market teetering on the precipice of a&nbsp;<a href="">radical reorganization</a> at the&nbsp;<a href="" target="_blank">synthetic hands of artificial intelligence</a>.</p> <p><u><strong>There are no new ideas for pulling the neo-imperial thorn out of the side of the Middle East or for de-escalating a now truly global War On Terror that&rsquo;s&nbsp;<a href="" target="_blank">dislocating record numbers</a> of people as it&nbsp;<a href="" target="_blank">quickly approaches</a> the two-decade mark. Instead, America is &ldquo;pivoting&rdquo; like a bloated bull into China&rsquo;s neighborhood shop while also putting the finishing touches on the post-Cold War encirclement of Russia.</strong></u></p> <p>The default to a dangerous reboot of the Cold War shows how completely bereft the Beltway is of imagination or insight. Obviously, the bipartisan foreign policy establishment &mdash; like lipstick-wearing pigs greased-up with defense industry largesse &mdash; simply cannot ponder a world in which the national security trough isn&rsquo;t brimming with taxpayer-funded suet. If nothing else, this campaign&nbsp;<a href="" target="_blank">reaffirmed</a> the sacrosanctity of the defense budget.</p> <p><strong>Most distressingly of all, <u>there are no new ideas</u> for ending the costly war America has waged on itself &mdash; the War on Drugs.</strong> Instead of finding ways to stop arresting drug users at a staggering clip of&nbsp;<a href="" target="_blank">1 person every 25 seconds</a>, loud shouts of &ldquo;law and order&rdquo; ring out at ominous political rallies while the crisis of American policing grinds the wheels of justice into the fertile soil of social unrest.</p> <p>Meanwhile, the national heroin freakout is being assembled by politicians and the media into a&nbsp;<a href="" target="_blank">towering wicker man stand-in</a> for the&nbsp;<a href="" target="_blank">perfectly legal narco-traffickers</a> of Big Pharma. If it all goes according to the usual script, the heroin scapegoat will be unceremoniously burned in the bonfire of our political inanity while human history&rsquo;s most powerful drug gang keeps sending their&nbsp;<a href="" target="_blank">profiteering protection racketeers</a> to Capitol Hill. At the same time, an increasingly extra-constitutional drug war will churn on like a dystopian Black Male Removal System concocted by a science fiction-writing Klansman.</p> <p>This political season&rsquo;s modulations, bloviations, and triangulations do nothing to address these long-festering issues. Then again, the Two-Party System&trade; has been tuning out issues, turning on each other, and dropping out of reality for a long time. But now it&rsquo;s completely lost the plot devices that held their captive audiences, often in spite of their own self-interest. It&rsquo;s even largely stopped fighting the old culture wars over abortion rights and wrongs, creeping godlessness, and those all-too-telling fears of apocalyptic gayness. The ratings are in and those sideshows have been canceled, particularly since they don&rsquo;t really appeal to the&nbsp;<a href="" target="_blank">key 18 &ndash;34-year-old</a> demographic.</p> <p><strong>Let&rsquo;s face it, the ratings have been sliding for a long time.</strong></p> <p>Back in January of 2016 &mdash; right on the eve of this season&rsquo;s premiere in Iowa &mdash; <a href="" target="_blank">Gallup found</a> party affiliation was near an all-time low with 29% of American adults identifying as Democrats, 26% as Republicans, and a robust 42% identifying as independents. As the year entered the&nbsp;<a href="" target="_blank">crucial Fall schedule</a>, Democrats edged up to 32% and Republicans added a point to 27%, but &ldquo;independent&rdquo; is still the winner with at least 40% of Americans rejecting the two parties for the fifth consecutive year.</p> <p>In fact, a <em>New York Times&nbsp;</em><a href="" target="_blank">analysis</a> broke down the numbers. They found <strong>a mere &ldquo;<em>14 percent of eligible adults &mdash; 9 percent of the whole nation &mdash; voted for either Mr. Trump or Mrs. Clinton</em>&rdquo; during the primaries.</strong> In other words, the two main roles in this political psychodrama were cast by just 9% of Americans. Forget the 1%. Consider the power of the 9% and how the duopoly is fundamentally based on misrepresentative democracy.</p> <p><strong>The growing detachment from the Two-Party System&trade; is also reflected in the epically low approval rating for Congress,</strong> which is&nbsp;<a href="" target="_blank">currently at 17%</a> after a decade-long slide from the artificial high of 84% it reached immediately after 9/11. Sadly, that era of triumphal bipartisanship produced the Patriot Act, the surveillance state, and this young century&rsquo;s most egregious international crime &mdash; the wanton destruction of Iraq under false pretenses.</p> <p>But if that&rsquo;s the best idea the governing duopoly can produce, perhaps it&rsquo;s a good thing the Two-Party System&trade; has nothing to say about&nbsp;<a href="">CRISPR</a> or the brave new world of genetic engineering. Nothing to say about&nbsp;<a href="" target="_blank">3-D printing&nbsp;</a>and the coming revolution in manufacturing. Nothing to say about a rapidly accelerating&nbsp;<a href="" target="_blank">Sixth Great Extinction</a> that will radically alter ecosystems around the world. Nothing to say about antibiotic resistant&nbsp;<a href="" target="_blank">superbugs</a>, about migrating and evolving&nbsp;<a href="" target="_blank">diseases like Zika</a>, or about the coming&nbsp;<a href="" target="_blank">scarcity of potable water</a> and&nbsp;<a href="" target="_blank">shift in arable land</a> as&nbsp;<a href="" target="_blank">anthropogenic climate change</a> alters landscapes and pushes populations to flee&nbsp;<a href="" target="_blank">low-lying delta zones</a> like&nbsp;<a href="">Bangladesh</a>.</p> <p><strong>Maybe the future of politics &mdash; if there is a future for politics &mdash; is not the black and white binary system of the governing duopoly, but rather, the&nbsp;<a href="" target="_blank">Venn Diagram</a></strong>. Perhaps if the parties splinter, actual governing can happen when coalitions are built where their issues overlap. For example, Libertarian-leaners and Green-leaners agree on empire, the drug war, the Federal Reserve, crony capitalism, government surveillance, and civil liberties. Even some of the freer thinkers inside the ruling duopoly have agreements on one or more of these issues. <strong>But nothing happens. That&rsquo;s because it cannot happen so long as the entire political system is merely an expression of the duopoly&rsquo;s desire to get picked up for another season.</strong> That means their &ldquo;stars&rdquo; cannot run on issues where issues intersect with the competition because that undermines their sole rationale for being elected &mdash; which is now simply based on being oppositional. The only real reason to vote for us is to stop them.</p> <p>As such, the only real choice is between personas who are little more than human brand identities that somehow express &ldquo;who we are as a party&rdquo; instead of what we want to get done as a society.</p> <p><u><strong>The simple fact is the Two-Party System&trade; simply cannot cope with the complex, issue-based reality of America and the world in the 21st Century.</strong></u> It&rsquo;s old programming that worked when the world was over-simplified by the Cold War into Democracy versus Communism, Freedom versus Totalitarianism, and the Self-Appointed Good versus the Evil Empire. Maybe that&rsquo;s why the duopoly seems so hot for a new Cold War. <u><em><strong>The only way their binary system works is if there is a common enemy to turn into America&rsquo;s common denominator.</strong></em></u></p> <p><strong>And maybe that&rsquo;s why the Al Smith Dinner is no longer a jovial reminder of the grand bipartisan bargain. Like Happy Days, it is a trite, nostalgic reflection of a time long since passed &mdash; except without the laugh-track.</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="527" height="361" alt="" src="" /> </div> </div> </div> China default Donald Trump Federal Reserve Gallup Iraq Middle East national security New York Times Quantitative Easing ratings Reality Totalitarianism Tue, 25 Oct 2016 08:00:00 +0000 Tyler Durden 575790 at