en Examining The Most Hated Bull Market Ever <p><a href=""><em>Authored by Lance Roberts via,</em></a></p> <p>From <a href="" rel="noopener" target="_blank">last<strong>&nbsp;</strong>week:</a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em><strong>&ldquo;The seemingly &ldquo;impervious&rdquo; advance since the election last November, has had an interesting &ldquo;stair step&rdquo; pattern with each advance commencing from a breakout of a several month 3%-ish consolidation range.</strong> Furthermore, each advance then pushes to a 3-standard deviation extreme, black circles, of the 50-dma before beginning the next consolidation trading range.&rdquo;</em></p> </blockquote> <p><a href=""><img class="alignnone size-full wp-image-24999" src="" style="width: 600px; height: 264px;" /></a></p> <p>The last leg higher has been directly responsive to the ramp up in the political <em>&ldquo;marketing surge&rdquo;</em> surrounding <em>&ldquo;tax cuts and tax reform.&rdquo; </em>With the House having already passed their respective budget resolutions, late Thursday, the Senate&nbsp;passed a budget blueprint for the next fiscal year. <strong>With both of the <em>&ldquo;budget resolutions&rdquo;</em> in place, it was&nbsp;seen as clearing a hurdle to the goal of overhauling the tax code.</strong></p> <p>This is not new, of course, as the entire rally for the markets since the election has been driven by hopes of lower taxes, despite disaster, floods, fires and Central Bank threats of liquidity extraction.</p> <p><a href=""><img class="alignnone size-full wp-image-25017" src="" style="width: 601px; height: 385px;" /></a></p> <p>The bulls are clearly in charge which keeps us allocated to towards equity risk currently.</p> <p>Do not be mistaken, this <em>&ldquo;rally&rdquo;</em>&nbsp;<strong>IS</strong> all about tax cuts. <strong>Despite many who are suggesting this has been a &ldquo;<em>rational rise&rdquo;</em> due to strong earnings growth, that is simply not the case as shown below.</strong> <em>(I only use &ldquo;reported earnings&rdquo; which includes all the &ldquo;bad stuff.&rdquo; Any analysis using &ldquo;operating earnings&rdquo; is misleading.)</em></p> <p><a href=""><img class="alignnone size-full wp-image-25003" src="" style="width: 599px; height: 337px;" /></a></p> <p>Since 2014, the stock market has risen <em>(capital appreciation only)&nbsp;</em>by 35% while reported earnings growth has risen by a whopping 2%. <strong>A 2% growth in earnings over the last 3-years hardly justifies a 33% premium over earnings.&nbsp;</strong></p> <p>Of course, even reported earnings is somewhat misleading due to the heavy use of share repurchases to artificially inflate reported earnings on a per share basis. However, corporate profits after tax give us a better idea of what profits actually were since that is the amount left over after those taxes were paid.</p> <p><a href=""><img class="alignnone size-full wp-image-25002" src="" style="width: 599px; height: 337px;" /></a></p> <p><strong>Again we see the same picture of a 32% premium over a 3% cumulative growth in corporate profits after tax.</strong> There is little justification to be found to support the idea that earnings growth is the main driver behind asset prices currently.</p> <p>We can also use the data above to construct a valuation measure of price divided by corporate profits after tax. As with all valuation measures&nbsp;<a href="" rel="noopener" target="_blank">we have discussed as of late,</a> and forward return expectations from such levels, the P/CPATAX ratio just hit the second highest level in history.</p> <p><a href=""><img class="alignnone size-full wp-image-25001" src="" style="width: 601px; height: 362px;" /></a></p> <p><strong>The reality, of course, is that investors are simply chasing asset prices higher as exuberance overtakes logic and their actions prove the case.&nbsp;</strong>&nbsp;According to data from FactSet, stock-based exchange-traded funds have seen nearly $16 billion in inflows over the past week, which represents an acceleration from recent positioning. Over the past month, about $31.3 billion has gone into stock-based ETFs. The chart below of data from ICI shows much of the same with monthly equity ETF inflows surging since the election.</p> <p><a href=""><img class="alignnone size-full wp-image-25005" src="" style="width: 601px; height: 330px;" /></a></p> <p>The same is seen when we also add in equity mutual funds for a look at total equity asset flows.</p> <p><a href=""><img class="alignnone size-full wp-image-25006" src="" style="width: 600px; height: 329px;" /></a></p> <p>Not surprisingly, those actions have been backed by their massive elevation in bullish sentiment.</p> <p><a href=""><img class="alignnone size-full wp-image-25007" height="311" src="" width="600" /></a></p> <p>As UMich noted:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>&ldquo;Consumer sentiment surged in early October, reaching its highest level since the start of 2004.&nbsp;<strong>The October gain was broadly shared, occurring among all age and income subgroups and across all partisan viewpoints</strong>.</em></p> <p>&nbsp;</p> <p><em><strong>There is an unmistakable sense among consumers that economic prospects are now about as &lsquo;good as it gets.&#39;&rdquo;</strong></em></p> </blockquote> <p style="text-align: center;"><em><span style="color: #ff0000;"><strong>Most hated bull market ever&hellip;hardly.</strong></span></em></p> <p>Historically speaking,<strong> you only witness such exuberance in the latter stages of an expansion, not the beginnings of one. </strong>The latest&nbsp;survey indicates that consumers do not anticipate an economic downturn anytime in the foreseeable future, which from a contrarian perspective may be a clear warning sign.</p> <p><strong>Clearly, the&nbsp;expected benefits of tax cuts and reforms is leading investors to overpay for something today they are hoping will become fairly valued tomorrow.</strong> In other words, instead of prices catching <em>&ldquo;down&rdquo;</em> to market fundamentals, investors are hoping fundamentals will <em>&ldquo;catch up&rdquo;</em> to prices.</p> <p>Unfortunately, there isn&rsquo;t a previous case in history where this has been the case.</p> <p><a href=""><img class="alignnone size-full wp-image-25008" src="" style="width: 600px; height: 316px;" /></a></p> <p>Also, when we look at 20-year trailing returns, there is <strong>sufficient historical evidence to suggest total, real returns, will decline towards <span style="color: #993300;">zero</span> over the next 3-years from 7% annualized currently.&nbsp;</strong></p> <h5><em>(These are trailing 20-year total real returns, not forward)</em></h5> <p><a href=""><img class="alignnone size-full wp-image-25009" src="" style="width: 600px; height: 315px;" /></a></p> <p>Re-read that last sentence again and look closely at the chart above. From current valuation levels, the annualized return on stocks by the end of the current 20-year cycle will be close to 0%. <strong>A decline in the next 3-years of only 30%, the average drawdown during a recession, will achieve that goal.&nbsp;</strong></p> <p>For investors, this is crucially important. In the article <em><a href="" rel="noopener" target="_blank">&ldquo;Apathy &amp; The Death Of Your Financial Goals,&rdquo;</a> </em>I discussed the reality of the damage caused by market drawdowns. As I stated:</p> <p><em>&ldquo;Crashes matter, a lot.&rdquo;&nbsp;</em></p> <p><a href=""><img class="alignnone size-full wp-image-25010" src="" style="width: 601px; height: 370px;" /></a></p> <p><strong>While investors may <em>&ldquo;get back to even,&rdquo;</em> eventually, following a crash, the shortfall from their actual financial goal continues to build.</strong></p> <p>This is why using some method of risk management, such as a simple moving average crossover, can help alleviate some of the financial damage caused by drawdowns.</p> <ul> <li><em><strong>YES!</strong> You will miss out on some gains in the market.</em></li> <li><em><strong>YES!</strong> Sometimes you will be &ldquo;stopped out&rdquo; and have to &ldquo;buy back in.&rdquo;&nbsp;</em></li> <li><em><strong>YES!</strong> You will be much more successful in obtaining your financial goals long-term. </em></li> </ul> <p>After all, isn&rsquo;t that why you invest in the first place?</p> <p><strong>What I can assure you of is that you WILL be wrong from time to time and you WILL lose money. But that is the inherent nature of investing. It is a <em>&ldquo;RISK&rdquo;</em> based endeavor.</strong></p> <p>However, I can absolutely guarantee that trying to <em>&ldquo;passively index&rdquo;</em> in the current market environment will absolutely wind up screwing up your long-term goals.</p> <p>Think about it this way.<strong> IF investing was as easy as just buying a bunch of stuff and sitting on it, then why are so many Americans dependent on Social Security for retirement?</strong> Via Jared Dillian:</p> <p><a href=""><img class="alignnone size-full wp-image-25011" src="" style="width: 599px; height: 372px;" /></a></p> <ul> <li><em>19.7% of retirees get 100% of their income from Social Security.</em></li> <li><em>A full third (33.4%) depend on it for 90% of their income.</em></li> <li><em>And 61.1% get at least half their income from Social Security.</em></li> </ul> <p><strong>The federal government&rsquo;s unfunded 75-year liability for Social Security and Medicare combined is $46.7 trillion.</strong></p> <p>Are you absolutely sure you want to rely on the Government for your retirement?</p> <p>Think about it the next time someone tells you to just <em>&ldquo;buy and hold.&rdquo;</em></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="584" height="316" alt="" src="" /> </div> </div> </div> Business Consumer Sentiment Economy Equity federal government Finance Financial capital Financial markets Fundamental analysis Investment Medicare Medicare Money Reality Recession Risk Management Senate Stock market Stock selection criterion Tax Valuation Sun, 22 Oct 2017 15:16:09 +0000 Tyler Durden 605761 at "It Could Open A Pandora's Box": Italy's 2 Richest Regions Are Voting In Historic Autonomy Referendums <p>Voters in Italy's two wealthiest northern regions of Lombardy and Veneto are voting on Sunday in referendums for greater autonomy from Rome, in which a positive outcome could fan regional tensions in Europe at a time when neighboring Spain is cracking down to prevent Catalonia from breaking away. </p> <p><a href=""><img src="" width="500" height="281" /></a></p> <p>Lombardy, which includes Milan, and Veneto, which houses the tourist powerhouse Venice, <strong>are home to around a quarter of Italy's population and account for 30% of Italy's economy, the Eurozone's third largest</strong>. Unlike Catalonia, the consultative votes are only the beginning of a process which could over time lead to powers being devolved from Rome. Also unlike Catalonia, which held an independence referendum on Oct. 1 despite it being ruled unconstitutional, the Italian referendums are within the law. Like Catalonia, however, Lombardy and Veneto complain they pay far more in taxes than they receive. </p> <p>At its core, today's vote is about whether taxes collected in the two wealthy regions should be used far more for the benefit of the two regions, or diluted among Italy's other, poorer regions, especially in the south. <strong>Lombardy sends €54 billion more in taxes to Rome than it gets back in public spending. Veneto's net contribution is 15.5 billion. </strong>The two regions would like to roughly halve those contributions - a concession the cash-strapped state, labouring under a mountain of debt, can ill afford.<strong><br /></strong></p> <p>The two regions are both run by the once openly secessionist Lega Nord, or Northern League party, which hopes that the result will give it a mandate to negotiate better financial deals from Rome. The Northern League was established in the 1990s to campaign for an independent state of “Padania”, stretching across Italy’s north, from around Lombardy in the west to Venice in the east. It no longer campaigns for secession but argues that taxes the north sends to Rome are wasted by inefficient national bureaucracy.</p> <p>While the twin referendums are non-binding, a resounding "yes" vote would give the presidents of the neighboring regions more leverage in negotiations to seek a greater share of tax revenue and to grab responsibility from Rome. The leaders want more powers in areas such as security, immigration, education and the environment. </p> <p><a href=""><img src="" width="500" height="316" /></a></p> <p>Enthusiasm for today's vote will be critical as the level of turnout will have a direct significance of the results: i<strong>n Veneto, it has to pass 50% for the result to be considered valid. There is no threshold in Lombardy but low voter participation would weaken the region's hand in any subsequent negotiations with the central government.</strong></p> <p>* * * </p> <p>Even though secessionist sentiment in the two wealthy regions is restricted to what has been dubbed "fringe groups" with little following, nonetheless with both regions expected to vote in favour of the principle of greater autonomy, analysts see the referendums as reflecting the pressures that resulted in Scotland's narrowly-defeated independence vote, Britain's decision to leave the EU and the Catalan crisis according to AFP.</p> <p>With dynamic economies and lower unemployment and welfare costs than the Italian average, both regions are large net contributors to a central state widely regarded as inefficient at best.</p> <p>Public opinions covered both extremes of the spectrum: <strong>&nbsp;</strong></p> <p><strong>“Lombardy and Veneto have two efficient administrations and public services work well, much better than in other Italian regions ... this is why I think it is worth asking for greater autonomy,</strong>” said Massimo Piscetta, 49, who voted “Yes” in a small town outside Milan.</p> <p><strong>"Our taxes should be spent here, not in Sicily," </strong>echoed says Giuseppe Colonna, an 84-year-old Venetian, <a href="">speaking to AFP</a>.</p> <p><strong>“I am not going to vote because I think this referendum is useless, expensive, ambiguous and unfair</strong>,” countered Giovanni Casolo, 54, <a href="">speaking to Reuters </a>and expressing concern that the text of the Lombardy referendum did not spell the areas where the region wanted to increase its autonomy.</p> <p>Veneto president Luca Zaia says €30 billion euros are wasted every year at a national level and fiscal rebalancing will be a top priority for him and his Lombardy counterpart Roberto Maroni if the votes go their way.&nbsp; The two regional presidents, both members of the far-right Northern League, plan to ask for more powers over infrastructure, the environment, health and education. They also want new ones relating to security issues and immigration -- steps which would require changes to the constitution.</p> <p>Lombardy’s leader, Roberto Maroni, says a strong victory for “Yes” would give him a mandate to bargain hard in Rome. “It’s obvious that the more negotiating power I have, the more money I can manage to bring home,” Maroni told Reuters in the run-up to the referendum. Lombardy alone wants to keep an additional 27 billion euros ($32 billion) of its own taxes.&nbsp; Maroni said he would be happy if 34 percent of the region's 7.5 million voters cast ballots, equal to the national turnout in a 2001 constitutional referendum. Veneto's aspirations will wither if voter turnout is below 50 percent plus one of the region's 3.5 million voters.</p> <p>Still, political experts say neither region is likely to succeed in wresting much money away from the central government without causing problems for regions in Italy’s poor south. </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Giovanni Orsina, history professor at Rome’s Luiss-Guido Carli University, said a strong “Yes” vote could deepen the old north-south divide which dates back to before Italian unification in the 19th century. </p> <p>&nbsp;</p> <p>“Once you open up the issue of what the northern regions pay, then I expect a backlash in southern Italy,” he said.</p> </blockquote> <p>European Parliament chief Antonio Tajani on Sunday took care to distinguish between Catalan's chaotic independence referendum, deemed illegal by Madrid, and the votes in Italy. "<strong>First of all these two referendums are legitimate, that was not the case in Catalonia," </strong>he told the Rome daily Il Messaggero. "<strong>In Spain, it is not about autonomy, but a proclamation of independence in defiance of the rule of law and against the Spanish constitution."</strong> He said Europe should "fear" the spread of small nations: "It is not by degrading nationhood that we reinforce Europe.</p> <p>* * * </p> <p><strong>Italy's "North-South divide"</strong></p> <p>Enzo Moavero Milanesi, law professor and former cabinet minister, <a href="">told Deutsche Welle that </a>while a development and employment gap between the North and South remains, the resentment of the North toward the South is no longer what it was several decades ago. "The main point is the correct administration," says Milanesi of the move for autonomy. "These two regions have been ruled by the Northern League for years and they are well-managed. There's a good health system, low unemployment rate; so the idea is to draw attention to how managed they are and how much better the country could be managed."</p> <p>Like Fusone, he says the economic crisis in Europe has largely fueled the drive for more regional autonomy in Italy and elsewhere. "It has led some to believe that more local autonomy might be a way to escape a political decision far away," he said. "<strong>But the real question is: What is local? Is a country local with respect to the EU? Is it a region? A town?"</strong></p> <p>The question is hardly rhetorical. Alongside the issue of more regional autonomy in the Veneto referendum, another question was supposed to address whether the city of Venice should separate from the nearby mainland city of Mestre. Venetians in favor of the move say it would allow Venice to tackle the issue of mammoth cruise ships and tourism causing environmental harm to their harbor. But Italy's constitutional court has yet rule on whether the question of municipal separation is legal. Consequently, Governor Zaia excluded it from the ballot, to the bitter disappointment of many.</p> <p>But it's a question that could well re-emerge — and not the only one. <strong>"There are rumors about other regions, such as Emilia-Romagna, wanting autonomy," </strong>says Milanesi. "<strong>So the mosaic is quite colorful."</strong></p> <p>* * * </p> <p>Despite much less angst about today's outcome, <strong>the referendums could have a domino effect </strong>as a similar autonomy vote is being debated in Liguria, the region that includes the Riviera coastline, and Emilia Romagna, another wealthy industrial part of the country, is already trying to negotiate more devolved powers.</p> <p>Economist Lorenzo Codogno says that while Italian unity is not under threat, <strong>"Sunday could mark the opening of a Pandora's box</strong>."</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>"The issue is likely to spread, and eventually, it will require a generalised approach by the next government and a reform of the constitution."</strong></p> </blockquote> <p>And while the referendums have been driven by the Northern League, which has long abandoned the secessionist principles on which it was founded as observed above, the Yes campaign is backed by most of the centre right and sections of the centre left. Milan's mayor Giuseppe Sala, a member of the ruling Democratic Party, says greater self-rule "is an idea shared by everyone, not one that belongs to the League."</p> <p>As AFP notes, the referendum questions are framed differently in the two regions but both ask voters to say Yes or No to "further forms and special conditions of autonomy". </p> <p>In a first for Italy, voting in Lombardy will be conducted on computer tablets. Acquiring them raised the cost of the ballot but should ensure an early result after polls close at 11 pm.</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="700" height="394" alt="" src="" /> </div> </div> </div> Catalonia Democratic Party Elections in Veneto European Parliament European Union Independence referendum Italy Lega Nord Lombardy Luca Zaia Nomenclature of Territorial Units for Statistics Northern League Northern League party Politics Politics of Italy Politics of Veneto Referendum Referendums in Italy Reuters Rome’s Luiss-Guido Carli University Secession Southern Italy Tax Revenue Unemployment Unification Venetian nationalism Veneto Sun, 22 Oct 2017 14:40:32 +0000 Tyler Durden 605760 at Trump Extends Feud With "Wacky Wilson" To Sixth Day, Says Fake News "Finally Sinking In" <p>In a relatively tame by his weekend standards Twitter outburst, President Trump on Sunday again ripped into Rep. Frederica Wilson, extending his feud with the "wacky" Florida Democrat into its sixth day, over the contents of his call to the widow of a fallen U.S. soldier. "Wacky Congresswoman Wilson is the gift that keeps on giving for the Republican Party, a disaster for Dems. You watch her in action &amp; vote R!" Trump tweeted.</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">Wacky Congresswoman Wilson is the gift that keeps on giving for the Republican Party, a disaster for Dems. You watch her in action &amp; vote R!</p> <p>— Donald J. Trump (@realDonaldTrump) <a href="">October 22, 2017</a></p></blockquote> <script src="//"></script><p>It was the second straight day in which Trump referred to Wilson as "wacky" following up to a Saturday tweet, when he said he hopes the "Fake News Media" keeps talking abut Wilson, whom he claimed is "killing the Democratic Party."</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">I hope the Fake News Media keeps talking about Wacky Congresswoman Wilson in that she, as a representative, is killing the Democrat Party!</p> <p>— Donald J. Trump (@realDonaldTrump) <a href="">October 21, 2017</a></p></blockquote> <script src="//"></script><p>Trump has continued to push back against Wilson's claims, who previously said she was in the car with the widow of Army Sgt. La David Johnson when Trump called and in which she said Trump told the soldier's widow that he "knew what he signed up for...but when it happens it hurts anyway." On Thursday, Trump accused Wilson of lying about the content of the call after "secretly" listening in. Chief of staff John Kelly last week also gave an&nbsp; emotional press conference in which he said he was "stunned" by Wilson's negative description of the call. "I would have thought that was sacred," Kelly said during last week's press conference.</p> <p>In his second tweet, Trump said media organizations have “lost cred,” pointing to a recent poll that found almost half of voters think the media make up stories about him. </p> <p>“It is finally sinking through. 46% OF PEOPLE BELIEVE MAJOR NATIONAL NEWS ORGS FABRICATE STORIES ABOUT ME. FAKE NEWS, even worse!” Trump tweeted. “Lost cred.”</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">It is finally sinking through. 46% OF PEOPLE BELIEVE MAJOR NATIONAL NEWS ORGS FABRICATE STORIES ABOUT ME. FAKE NEWS, even worse! Lost cred.</p> <p>— Donald J. Trump (@realDonaldTrump) <a href="">October 22, 2017</a></p></blockquote> <script src="//"></script><p>Trump was referring to last week's <a href="">Politico/Morning Consult poll </a>which found that 46% of voters think the media fabricate reports about Trump and his administration. Just 37 percent of voters disagree and another 17 percent are undecided. The results predictably broke down by party lines with 76% of Republicans thinking the media fabricate stories about Trump, while just 20% of Democrats agree and 65% of Democrats disagree. The poll was conducted after Trump went after media companies in a series of tweets, saying that their broadcast licenses should be challenged and potentially revoked.</p> <p>"Network news has become so partisan, distorted and fake that licenses must be challenged and, if appropriate, revoked," Trump wrote on Twitter. "Not fair to public!" Trump also called reporters at some news networks “fiction writers” in a tweet last Tuesday.</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="271" height="123" alt="" src="" /> </div> </div> </div> Business Deception Democrat Party Democratic Party Donald Trump Donald Trump on social media Donald Trump presidential campaign Fake news Florida Politics Politics of the United States Republican Party Twitter Twitter Twitter Sun, 22 Oct 2017 14:03:00 +0000 Tyler Durden 605758 at Exit Polls Project Sweeping Victory, Supermajority For Japan's Abe <p>As widely expected, Japan Prime Minister Abe's ruling coalition is set for a sweeping victory in Sunday's general election, and may retain the two-thirds parliamentary majority needed to revise Japan's constitution, according to an NHK exit poll.</p> <p><a href=""><img src="" width="500" height="327" /></a><br /><em>Shinzo Abe during an election campaign rally in Tokyo, on Oct. 21</em></p> <p> Shortly after polls closed at 8pm, an NHK exit poll showed that Abe’s Liberal Democratic Party and coalition partner Komeito are set to win between 281 and 336 seats of the 465 total, boosting Abe's chances of becoming Japan's longest serving political leader: the Prime Minister needs 233 for a simple majority and 310 for a supermajority. Opposition parties are set to split the rest, with the left-leaning Constitutional Democratic Party projected to come in second. Actual results are now being counted.</p> <p>NHK also projected the leftwing Constitutional Democratic party winning 44 to 67 seats, with upstart Tokyo governor Yuriko Koike’s Party of Hope taking 38 to 59 seats. </p> <p>The exit polls are in line with the most recent media seat projections, shown below:<br /><a href=""><img src="" width="500" height="314" /></a></p> <p><em>Source: Nikkei, Mainichi, Asahi, Kyodo, Goldman Sachs </em></p> <p>The vote took place as a typhoon lashed Japan on Sunday, threatening to damp voter turnout for the election that was widely forecast to give Abe a fresh mandate to pursue economic revival and bolster the nation's military.&nbsp; Super Typhoon Lan is one of the strongest to hit Japan in years with heavy rain expected across much of the country. The Japan Meteorological Agency issued severe weather warnings for&nbsp;floods, wind damage and landslides. The typhoon is projected to make landfall near Tokyo on Sunday night.</p> <p>A substantial win for Abe’s coalition would pave the way for more ultra-easy monetary policy and flexible fiscal stimulus that has allowed Japan - Asia’s second-biggest economy - to grow for 6 straight quarters, if only on paper. It would also give President Trump a stable partner in pushing a hardline stance against Kim Jong Un’s regime in North Korea. The LDP is due to hold a leadership election next September. If Abe runs and wins again, he could stay on as prime minister until 2021, <a href="">according to Bloomberg</a>.</p> <p>Ever the opportunist, Abe called today's election last month more than a year before parliament’s term expired, saying he wanted to test public opinion on a proposal to divert some revenue from a planned sales-tax hike to fund education and delay moves to rein in Japan’s swollen public debt. But the timing was really mostly influenced by a recent North-Korea driven uptick in his approval rating after a series of cronyism and corruption scandals hurt his popularity earlier in the year, sending his approval rating to a record low as recently as the summer.</p> <p>As the <a href="">FT notes</a>, Japan’s election has been dominated by chaos among the opposition, which also helped Abe: the Constitutional Democratic Party was set up only about two weeks ago by former Chief Cabinet Secretary Yukio Edano after its predecessor split up. Other opposition lawmakers defected to populist Tokyo Governor Yuriko Koike’s upstart Party of Hope, which briefly jumped in opinion polls before fading. In his final election appearance on Saturday, Abe attacked the opposition for its time in government from 2009-12. “Just because they’ve changed their name, they can’t change that three years and three months. You can’t fool the public,” he said.</p> <p>“It’s a very tough result,” Koike was quoted by Bloomberg immediately after the exit poll was released in a televised interview from Paris, where she is attending a conference on climate change. “We have to analyze the reasons properly, but I am sorry that I caused unpleasant feelings through my words and actions.” </p> <blockquote class="twitter-tweet" data-partner="tweetdeck"><p lang="en" dir="ltr">UPDATE: Yuriko Koike, leader of Japan&#39;s upstart Party of Hope, responds to &quot;tough&quot; poll projections <a href=""></a> <a href=""></a></p> <p>&mdash; Bloomberg (@business) <a href="">October 22, 2017</a></p></blockquote> <script async src="//" charset="utf-8"></script><p>In a sign of how little hope opposition parties had of defeating Abe, Koike left the country on Saturday night to attend a mayoral meeting in Paris on climate change. Even after the Democratic party had disbanded&nbsp;to support her, Ms Koike declined to run, leaving the opposition without a credible candidate for prime minister. </p> <p>Meanwhile, almost five years into the job, Abe <a href="">touted his economic record</a>, with unemployment at less than 3 percent and the stock market at its highest level in more than two decades, both of which are largely and exclusively a function of the BOJ monetizing every piece of debt, not to mention ETF, if can find. The massive monetary easing has weakened the yen and bolstered exports while having less success at defeating deflation and boosting pay.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Abe also portrayed his party as best placed to defend Japan against the growing threat from North Korea’s missiles and nuclear bombs. His party is considering a proposal to allow Japan to have an offensive capability for the first time since World War II.</p> </blockquote> <p>Set to become the latest Asian nation to turn to militarism, a two-thirds majority would make it easier for him to revise Japan’s pacifist constitution, a move he sees as necessary to strengthen the military. Any change would also need to pass a public referendum, and recent polls show the public divided over the issue. The ruling coalition currently controls 68% of seats in the lower house, including 288 for the LDP and 35 for its coalition partner Komeito, according to the parliamentary website. </p> <p><strong>What happens next?</strong></p> <p>According to Goldman analyst Naohiko Baba, "a big single-party majority for the LDP would afford the Abe administration stability, leaving the economic policy framework almost intact"</p> <p>Baba adds that his biggest focus is whether the LDP can secure a majority on its own. If the ruling parties attain a majority but the LDP is unable to secure a single-party majority, Prime Minister Abe could come under pressure from within his party to step down in order to take responsibility, even if the LDP/Komeito coalition continued. How the election battle will unfold is anybody’s guess. However, based on exit polls, it appears the LDP is highly likely to secure far more than a majority of votes on its own.</p> <p><strong>Such a result would enhance Prime Minister Abe’s status within the LDP, highly likely enabling him to be reelected for a third term in the LDP presidential election in September 2018 and to maintain the reins of government for longer. </strong>It would also sharply reduce uncertainty surrounding economic policy as a whole since Prime Minister Abe is able to appoint the next BOJ Governor by himself when current Governor Kuroda's term ends in April 2018.</p> <p>With the election now concluded, the calendar below lists all the main political and economic events in Japan over the next four years.</p> <p><a href=""><img src="" width="500" height="291" /></a></p> <p>Finally, here is a breakdown of the key party manifestos of Japan's three main political parties: the LDP, the Party of Hope and the CDP:</p> <p><a href=""><img src="" width="500" height="662" /></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="800" height="413" alt="" src="" /> </div> </div> </div> Abe administration Asia Bank of Japan Chief Cabinet Comfort women Corruption Cronyism Democratic Party Democratic Party goldman sachs Goldman Sachs Historical revisionism Japan Japan Meteorological Agency Japanese nationalists Kib? no T? KIM Komeito LAN Liberal Democratic Party Liberal Democratic Party Liberal Democratic Party Monetary Policy Nikkei North Korea Politics Politics Politics of Asia Politics of Japan Shinz? Abe Twitter Twitter Unemployment Yen Yuriko Koike Sun, 22 Oct 2017 12:40:15 +0000 Tyler Durden 605757 at Trump To Allow Release Of 3,000 Never Before Seen Documents On JFK Assassination <p>Following years of delays, President Trump announced on Twitter on Saturday morning that he will allow the release of more than 3,000 of classified documents from the FBI, CIA, and Justice Department on the assassination of John F. Kennedy. The unexpected announcement means that a trove of previously unseen documents will be released by the National Archives by October 26.</p> <p>“Subject to the receipt of further information, I will be allowing, as President, the long blocked and classified JFK FILES to be opened,” Trump tweeted.</p> <blockquote class="twitter-tweet"><p dir="ltr" lang="en">Subject to the receipt of further information, I will be allowing, as President, the long blocked and classified JFK FILES to be opened.</p> <p>— Donald J. Trump (@realDonaldTrump) <a href="">October 21, 2017</a></p></blockquote> <script src="//"></script><p>In 1992, Congress mandated that all assassination documents be released within 25 years, unless the president asserts that doing so would harm intelligence, law enforcement, military operations or foreign relations. The still-secret documents include more than 3,000 that have never been seen by the public and more than 30,000 that have been released previously, but with redactions, according to CBS. Trump's decision means that thousands of formerly classified documents related to Kennedy’s assassination will be unveiled next week in compliance with the President John F. Kennedy Assassination Records Collection Act of 1992, which states that the federal government must release them by Oct. 26, 2017.</p> <p><a href=""><img src="" width="500" height="283" /></a></p> <p>JFK scholars hope the new documents may provide insight into assassin Lee Harvey Oswald's trip to Mexico City weeks before the killing, during which he visited the Soviet and Cuban embassies. Oswald's stated reason for going was to get visas that would allow him to enter Cuba and the Soviet Union, according to the Warren Commission, the investigative body established by President Lyndon B. Johnson, but much about the trip remains unknown. </p> <p>Among other protected information slated for release are details about the arrangements the U.S. entered into with the Mexican government that allowed it to have close surveillance of those and other embassies, said Tunheim, a federal judge in Minnesota. Jefferson Morley, a former Washington Post reporter who has written extensively about the Kennedy assassination papers, said <strong>the remaining documents might include files on senior CIA officers from the 1960s who likely knew details of the agency’s surveillance of Oswald in Mexico City</strong>.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>“What’s in those files could tell us how those men did their jobs,” said Morley, who wrote a 2008 book on the agency’s Mexico City station chief.&nbsp; “Is there JFK material in there? Could be. There might be stuff on why we were interested in the Cuban consulate, how we surveilled the consulate, how we did our audio work, and how did we recruit spies there? We might understand much better why they were watching Oswald.” </p> <p>&nbsp;</p> <p>Morley is also eager to read a never-before released transcript of testimony given by James Angleton, the CIA’s legendary chief of counterintelligence from 1954 to 1975, to senators in September 1975 investigating abuses committed by the intelligence community. </p> <p>&nbsp;</p> <p>The files on Angleton and the other CIA officers are important because “these are not just major players in the agency’s history, they are major players in the Oswald story,” said Morley, who has a new book on Angleton, “The Ghost,” coming out Oct. 24. “Oswald didn’t come out of nowhere. Angelton was targeting him for intelligence purposes at the Cuban consulate in Mexico City.”</p> </blockquote> <p>Not everyone is happy, however, and many experts fear that such a large release of secret JFK assassination documents will spur “a new generation of conspiracy theories.” </p> <p><a href="">Additionally, Politico reported </a>that Trump administration officials were concerned that some of the documents created in the 1990s contain information on recent U.S. intelligence programs and might not be released. Nonetheless, White House spokeswoman Lindsay Walters said that the White House is aiming “to ensure that the maximum amount of data can be released to the public" under the act. </p> <p>Overnight, <a href="">the WaPo confirmed</a>, reporting that <strong>President Trump is being urged to withhold the last batch of government documents that could shed more light on the 1963 assassination of President John F. Kennedy.</strong></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>A National Security Council official said in an interview that federal agencies are asking the president not to release an unknown number of files held by the National Archives and Records Administration related to Kennedy’s murder. </p> <p>&nbsp;</p> <p>“There will be a request made to the President to withhold documents, absolutely no question about that,” said the NSC official, who agreed to be interviewed only on the condition of anonymity. “There are definitely files related to sources and methods that agencies are asking to withhold.” </p> <p>&nbsp;</p> <p>The official declined to identify which agencies are asking Trump to keep some of the Kennedy files secret, saying only that the security council is coordinating the requests.</p> </blockquote> <p>Meanwhile, as <a href="">we reported last week</a>, longtime Trump adviser Roger Stone was urging Trump to release the files, and said in a recent interview he felt “optimistic” that Trump would make it happen. Stone claimed that the CIA is urging President Donald Trump to delay disclosing some of the files for another 25 years. “<strong>They must reflect badly on the CIA even though virtually everyone involved is long dead.” </strong></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Earlier this month, Roger Stone, the political consultant and Trump confidante, <a href="">reported on his website</a>, “Stone Cold Truth,” that CIA Director Mike Pompeo wants the president to delay the record release for another 25 years. Stone, who co-authored a best-selling book in 2013 called, “The Man Who Killed Kennedy: The Case Against LBJ,” said in a Post interview that he opposes any delay. </p> <p>&nbsp;</p> <p>“<strong>What is the government hiding?” he asked. “The issue now is transparency.”</strong></p> </blockquote> <p>Earlier this week, Stone told <a href="">Alex Jones </a>that&nbsp; he spoke to Trump himself and urged the president to release all the documents.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>“Yesterday, I had the opportunity to make the case directly to the president of the United States by phone as to why I believe it is essential that he release the balance of the currently redacted and classified JFK assassination documents,” Stone said on Jones’s show. “A very good White House source — not the President — told me that the Central Intelligence Agency, specifically CIA director Mike Pompeo, has been lobbying the President furiously not to release these documents. Why? Because I believe they show that Oswald was trained, nurtured and put in place by the Central Intelligence Agency.”<strong>&nbsp;</strong></p> </blockquote> <p>Stone said it wasn’t clear what Trump will do. “He did not tip off his current decision,” Stone told Jones. “We’re going to have to wait .&thinsp;.&thinsp;. but he was all ears. He took it all in .&thinsp;.&thinsp;. I think he’s going to do the right thing.” This morning it appears that Trump has decided to side with Stone over the arguments from the NSC and various other "covert" U.S. agencies.</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="600" height="339" alt="" src="" /> </div> </div> </div> Assassination of John F. Kennedy B+ Central Intelligence Agency Central Intelligence Agency Congress Cuban consulate Cuban consulate in Mexico City Department of Justice Donald Trump Donald Trump FBI Federal Bureau of Investigation federal government James Jesus Angleton JFK John F. Kennedy Lee Harvey Oswald Mexican government Mexico National Archives and Records Administration national security National Security Council Politics Politics President John F. Kennedy Assassination Records Collection Act Roger Stone Testimony Transparency Trump Administration Twitter Twitter U.S. intelligence United States Warren Commission Warren Commission White House White House Sun, 22 Oct 2017 09:45:18 +0000 Tyler Durden 605733 at Xi's Roadmap To The Chinese Dream <p><a href=""><em>Authored by Pepe Escobar via The Asia Times,</em></a></p> <p><strong><em>China&#39;s Belt and Road Initiative - the New Silk Road - will spark the country&#39;s development and turn the dream into reality...</em></strong></p> <p><a href=""><img height="324" src="" width="596" /></a></p> <p><em>It all starts with Hong Kong as a major BRI financing hub.</em></p> <p><strong>Now that President Xi Jinping has been duly elevated to the Chinese Communist Party pantheon in the rarified company of Mao Zedong Thought and Deng Xiaoping Theory, the world will have plenty of time to digest the meaning of &ldquo;Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era.&rdquo; </strong></p> <p>Xi himself, in his 3&frac12;-hour speech at the start of the 19th Party Congress, pointed to a rather simplified &ldquo;socialist democracy&rdquo; &ndash; extolling its virtues as the only counter-model to Western liberal democracy. Economically, the debate remains open on whether this walks and talks more like &ldquo;neoliberalism with Chinese characteristics&rdquo;.</p> <p><strong>All the milestones for China in the immediate future have been set.</strong></p> <ul> <li>&ldquo;Moderately prosperous society&rdquo; by 2020.</li> <li>Basically modernized nation by 2035.</li> <li>Rich and powerful socialist nation by 2050.</li> </ul> <p><strong>Xi himself, since 2013, has encapsulated the process in one mantra; the &ldquo;Chinese dream&rdquo;. </strong>The dream must become reality in a little over three decades. The inexorable modernization drive unleashed by Deng&rsquo;s reforms has lasted a little less than four decades. Recent history tell us there&rsquo;s no reason to believe phase 2 of this seismic Sino-Renaissance won&rsquo;t be fulfilled.</p> <p>Xi emphasized, &ldquo;the dreams of the Chinese people and those of other peoples around the world are closely linked. The realization of the Chinese dream will not be possible without a peaceful&nbsp;international environment and a stable international order.&rdquo;</p> <p>He mentioned only briefly the New Silk Roads, a.k.a. Belt and Road Initiative (BRI) as having &ldquo;created a favorable environment for the country&rsquo;s overall development&rdquo;. He didn&rsquo;t dwell on BRI&rsquo;s ambition and extraordinary scope, as he does in every major international summit as well as in Davos earlier this year.</p> <p><strong>But still it was implicit that to arrive at what Xi defines as a &ldquo;community of common destiny for mankind&rdquo;, BRI is China&rsquo;s ultimate tool. BRI, a geopolitical/geoeconomic game-changer, is in fact Xi&rsquo;s &ndash; and China&rsquo;s &ndash; organizing foreign policy concept and driver up to 2050.</strong></p> <p>Xi has clearly understood that global leadership implies being a top provider, mostly to the global South, of connectivity, infrastructure financing, comprehensive technical assistance, construction hardware and myriad other trappings of &ldquo;modernization&rdquo;.</p> <p>It does not hurt that this trade/commerce/investment onslaught helps to internationalize the yuan.</p> <p><strong>It&rsquo;s easy to forget that BRI, an unparalleled multinational connectivity drive set to economically link all points Asia to Europe and Africa, was announced only three years ago, in Astana (Central Asia) and Jakarta (Southeast Asia).</strong></p> <p><a href=""><img alt="" src="" style="width: 601px; height: 376px;" /></a></p> <p><em><strong>What was originally known as the Silk Road Economic Belt and the 21st Century Maritime Silk Road were endorsed by the Third Plenum of the 18th CCP Central Committee in November 2013. Only after the release of an official document, &ldquo;Visions and Actions on Jointly Building Silk Road Economic Belt and 21st Century Maritime Silk Roads&rdquo;, in March 2015, the whole project was finally named BRI.</strong></em></p> <p>According to the official Chinese timeline, we&rsquo;re only at the start of phase 2. Phase 1, from 2013 to 2016, was &ldquo;mobilization&rdquo;. &ldquo;Planning&rdquo;, from 2016 to 2021, is barely on (and that explains why few major projects are online). &ldquo;Implementation&rdquo; is supposed to start in 2021, one year before Xi&rsquo;s new term expires, and go all the way to 2049.</p> <p><strong>The horizon thus is 2050, coinciding with Xi&rsquo;s &ldquo;rich and powerful socialist nation&rdquo; dream. </strong>There&rsquo;s simply no other comprehensive, inclusive, far-reaching, financially solid development program on the global market. Certainly not India&rsquo;s Asia-Africa Growth Corridor (AAGC).</p> <h3><u>Have BRI, will travel</u></h3> <p><strong>It starts with Hong Kong. </strong>When Xi said, &ldquo;We will continue to support Hong Kong and Macau in integrating their own development into the overall development of the country&rdquo;, he meant Hong Kong configured as a major BRI financing hub &ndash; its new role after a recent past of business facilitator between China and the West.</p> <p><strong>Hong Kong&rsquo;s got what it takes; convertible currency; total capital mobility; rule of law; no tax on interest, dividends and capital gains; total access to China&rsquo;s capital market/savings; and last but not least, Beijing&rsquo;s support.</strong></p> <p>Enter the dream of myriad financing packages (public-private; equity-debt; short-long term bonds). Hong Kong&rsquo;s BRI role will be of the Total Package international financial center (venture capital; private equity; flotation of stocks and bonds; investment banking; mergers and acquisitions; reinsurance) interlinked with the Greater Bay Area &ndash; the 11 cities (including Guangzhou and Shenzhen) of the Pearl River Delta (light/heavy manufacturing; hi-tech venture capitalists, start-ups, investors; top research universities).</p> <p>That ties up with Xi&rsquo;s emphasis on innovation;<strong><em> &ldquo;We will strengthen basic research in applied sciences, launch major national science and technology projects, and prioritize innovation in key generic technologies, cutting-edge frontier technologies, modern engineering technologies, and disruptive technologies.&rdquo;</em></strong></p> <p>The integration of the Greater Bay Area is bound to inspire, fuel, and in some cases even mould some of BRI&rsquo;s key projects. The Eurasian Land Bridge from Xinjiang to Western Russia (China and Kazakhstan are actively turbo-charging their joint free trade zone at Khorgos). The China-Mongolia-Russia economic corridor. The connection of the Central Asian &ldquo;stans&rdquo; to West Asia &ndash; Iran and Turkey. The China-Pakistan Economic Corridor (CPEC) from Xinjiang all the way to Gwadar in the Arabian Sea &ndash; capable of sparking an &ldquo;economic revolution&rdquo; according to Islamabad. The China-Indochina corridor from Kunming to Singapore. The Bangladesh-China-India-Myanmar (BCIM) corridor (assuming India does not boycott it). The Maritime Silk Road from coastal southeast China all the way to the Mediterranean, from Piraeus to Venice.</p> <p>Yiwu-London freight trains, Shanghai-Tehran freight trains, the Turkmenistan to Xinjiang gas pipeline &ndash; these are all facts on the ground. Along the way, the technologies and tools of infrastructure connectivity &ndash; applied to high-speed rail networks, power plants, solar farms, motorways, bridges, ports, pipelines &ndash; will be closely linked with financing by the Asia Infrastructure Investment Bank (AIIB) and the security-economic cooperation imperatives of the Shanghai Cooperation Organization (SCO) to build the new Eurasia from Shanghai to Rotterdam. Or, to evoke Vladimir Putin&rsquo;s original vision, even before BRI was launched, &ldquo;from Lisbon to Vladivostok&rdquo;.</p> <p><u><em><strong>Xi did not spell it out, but Beijing will do everything to stay as independent as possible from the Western Central Bank system, with the Bank of International Settlements (BIS) to be avoided in as many trade deals as possible to the benefit of yuan-based transactions or outright barter. The petrodollar will be increasingly bypassed (it&rsquo;s already happening between China and Iran, and Beijing sooner rather than later will demand it from Saudi Arabia.)</strong></em></u></p> <p>The end result, by 2050, will be, barring inevitable, complex glitches, an integrated market of 4.5 billion people mostly using local currencies for bilateral and multilateral trade, or a basket of currencies (yuan-ruble-rial-yen-rupee).</p> <p><strong>Xi has laid China&rsquo;s cards &ndash; as well as the road map &ndash; on the table. As far as the Chinese Dream is concerned, it&rsquo;s now clear; Have BRI, Will Travel.</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="596" height="324" alt="" src="" /> </div> </div> </div> 18th CCP Central Committee AIIB Asia Asia-Africa Growth Corridor Bank of International Settlements BIS Central Asia China China China–Pakistan relations Chinese Communist Party Congress Davos Economy Foreign relations of China frontier technologies Hong Kong India Iran Kazakhstan key generic technologies Mediterranean One Belt One Road Initiative One Belt, One Road Private Equity Reality Saudi Arabia Shanghai Cooperation Organization Shenzhen Silk Road Southeast Asia southeast China Trade routes Turkey Turkmenistan Vladimir Putin West Asia western Russia Xi Jinping Xinjiang Yuan Sun, 22 Oct 2017 02:00:00 +0000 Tyler Durden 605755 at Forget ISIS, "Government Corruption" Tops Americans' Biggest Fears <p>As Americans gear up to celebrate Halloween at the end of October,<a href="" target="_blank">&nbsp;a recent survey</a>&nbsp;has revealed<strong> the fears that really keep people up at night.</strong></p> <p><em>The Chapman University Survey of American Fears polled 1,207 U.S. adults on their levels of fear across 80 different categories. </em></p> <p><a href=""><img alt="" src="" style="width: 598px; height: 390px;" /></a></p> <p><a href="">As Statista&#39;s Niall McCarthy notes, </a><strong>like last year, corruption of government officials came top in 2017, with 74.5 percent of U.S. adults saying it makes them &quot;afraid&quot; or &quot;very afraid&quot;. </strong></p> <p><a href="" title="Infographic: Americans' Top Fears Of 2017 | Statista"><img alt="Infographic: Americans' Top Fears Of 2017 | Statista" src="" style="height: 428px; width: 601px;" /></a></p> <p><em>You will find more statistics at <a href="">Statista</a></em></p> <p><strong>The unrest and uncertainty of&nbsp;<a href="" target="_blank">Donald Trump&#39;s presidency</a>&nbsp;has had a significant influence on this year&#39;s ranking.</strong></p> <p>With the U.S. health system still engulfed by chaos, 55.3 percent of respondents are fearful of the American Healthcare Act/Trumpcare. The president&#39;s decision to withdraw from the Paris Climate Accords has also had an impact with 48 percent afraid of global warming and climate change and 44.9 percent fearful of air pollution.</p> <p><strong>The threat of&nbsp;<a href="" target="_blank">war between the U.S. and North Korea</a>&nbsp;is also starting to touch a nerve.</strong> 48.4 percent of Americans fear U.S. involvement in another world war while <strong>47.5 percent are afraid the regime in Pyongyang will use nuclear weapons.</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="598" height="390" alt="" src="" /> </div> </div> </div> Afraid Chapman University Corruption Donald Trump Environment Global Warming North Korea Politics War Sun, 22 Oct 2017 01:30:00 +0000 Tyler Durden 605753 at "It's A Coup": Catalan President Slams "Worst Attack" By Spain "Since Franco Dictatorship" <p><span style="text-decoration: underline;"><strong>Update:</strong></span> The defiant Catalan leader, Carles Puigdemont, addressed Catalans, Spaniards, and the rest of Europe on TV saying that the Spanish states&#39; imposition of Article 155 means &quot;liquidation of our self-government and cancellation of the democratic will of Catalans&quot;.&nbsp; In other words, he made it quite clear that the region&#39;s leaders would not accept direct rule imposed on the region by the Spanish government, as a political crisis that has rattled the economy and raised fears of prolonged unrest showed no signs of easing.</p> <p>Puigdemont said Rajoy had set out to &quot;humiliate&quot; Catalonia in an &quot;attack on democracy&quot; and said removing powers from Catalonia was the &quot;worst attack against the institutions and the people of Catalonia since the military dictatorship of Francisco Franco&quot;.</p> <p>After taking party in peaceful demonstration, Puigdemont expressed his rejection of Madrid&rsquo;s move, but stopped short of saying he would make good his threat to push ahead with the independence bid before direct rule takes effect.</p> <p>&ldquo;I ask the (Catalan) parliament to meet in a plenary session during which we, the representatives of the citizens&rsquo; sovereignty, will be able to decide over this attempt to liquidate our government and our democracy, and act in consequence,&rdquo; Puigdemont said in a televised address.</p> <p>Puigdemont also said Spain <strong>&quot;closed the doors ot a request for talks, and should set a date to discuss the attack&quot; and &quot;Catalan institutions cannot accept attack by Spain.&quot;</strong></p> <p>In a striking accusation, the Catalan president said that <strong>&quot;Catalan institutions dealt a coup by Spanish state.&quot; </strong>Puigdemont then <strong>switched to English to appeal to Europeans, says democracy also at risk in Europe: &quot;Catalonia is an ancient European nation&quot;. </strong>He also announced a <strong>session in Catalan parliament to debate &quot;the attempt to liquidate our self-government&quot;.</strong></p> <p>Puigdemont concluded by saying <em><strong>&quot;Long live Catalonia&quot;</strong></em> to which a silently listening crowd suddenly burst back into cheers and chanting.</p> <p>However, as noted, Puigdemont <em><strong>did not specifically declare independence, </strong></em>but said Catalonia will not accept Madrid&#39;s plan to curb region&#39;s powers, leaving one tiny, final loophole.</p> <p>The Senate vote that would give Madrid full control of Catalonia&rsquo;s finances, police and public media and curb the powers of the regional parliament for up to six months is scheduled for next Friday. That could give the independence movement room to maneuver.</p> <p>The regional parliament&rsquo;s speaker, <strong>Carme Forcadell, said she would not accept Madrid&rsquo;s move and accused Rajoy of a &ldquo;coup.</strong>&rdquo; &ldquo;Prime Minister Rajoy wants the parliament of Catalonia to stop being a democratic parliament, and we will not allow this to happen,&rdquo; Forcadell said in a televised speech.</p> <p>In the latest can kicking yet, the Catalan assembly is expected to decide on Monday whether to hold a session to formally proclaim the republic of the region. Catalan media have said Puigdemont could dissolve the regional parliament and call elections by next Friday. Under Catalan law, those elections would take place within two months.</p> <p>That would enable Puigdemont to go the polls earlier than envisaged by Rajoy, who spoke of a six-month timetable, and to exploit the anti-Madrid sentiment running high in the region.</p> <p>According to Reuters, pro-independence groups have previously mustered more than 1 million people onto the streets in protest at Madrid&rsquo;s refusal to negotiate a solution.<br />&nbsp;</p> <p>*&nbsp; *&nbsp; *</p> <p>As we detailed earlier, with Spain officially <a href="">pulling the trigger on Article 155</a>, and activating the Spanish Constitutional &quot;nuclear option&quot; this morning, when PM Rajoy said he would seize control of the Catalan government, fire everyone and force new elections in six months, attention has shifted to the Catalan response. And as we waited for the official statement by Catalan separatist president Carles Puigdemont, expected at 9pm local time, we found him taking to the streets, where he led hundreds of thousands of independence supporters in protest around Barcelona on Saturday, shouting &quot;freedom&quot; and &quot;independence&quot; following the stunning news from Madrid earlier on Saturday.</p> <p><img height="420" src="" width="500" /></p> <p>The protest in the center of the Catalan capital had initially been called to push for the release of the leaders of two hugely influential grassroots independence organisations, accused of sedition and jailed pending further investigation. <strong>But it took on an even angrier tone after Prime Minister Mariano Rajoy announced his government would move to dismiss the region&#39;s separatist government, take control of its ministries and call fresh elections in Catalonia.</strong></p> <p>According to municipal police, over 450,000 people rallied on Barcelona&#39;s expansive Paseo de Gracia boulevard, spilling over on to nearby streets, many holding Catalonia&#39;s yellow, red and blue Estelada separatist flag.</p> <p><img height="333" src="" width="500" /></p> <p><em>Catalan regional vice-president Oriol Junqueras and Catalan regional president </em><br /><em>Carles Puigdemont attend a demonstration on October 21, 2017 in Barcelona </em></p> <p>Protesters greeted Puigdemont&#39;s arrival at the rally with shouts of &quot;President, President.&quot; The rest of his executive was also there.</p> <p>For at least some locals, the time to split from Spain has come: <strong>&quot;It&#39;s time to declare independence,&quot; </strong>said Jordi Balta, a 28-year-old stationery shop <a href="">employee quoted by AFP</a>, adding there was no longer any room for dialogue.</p> <p>Others disgree: &quot;The Catalans are completely disconnected from Spanish institutions, and particularly anything to do with the Spanish state,&quot; said Ramon Millol, a 45-year-old mechanic.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Meritxell Agut, a 22-year-old bank worker, said she was &quot;completely outraged and really sad.&quot; &quot;They can destroy the government, they can destroy everything they want but we&#39;ll keep on fighting.&quot;</p> </blockquote> <p>Catalonia is roughly split down the middle on independence, but residents cherish the autonomy of the wealthy, northeastern region, which saw its powers taken away under the dictatorship of General Francisco Franco. Which is why, as many have warned, <strong>Madrid&#39;s move could anger even those against independence.</strong></p> <p>Barcelona&#39;s Mayor Ada Colau, who <strong>opposes </strong>the independence drive, tweeted: &quot;<strong>Rajoy has suspended the self-government of Catalonia for which so many people fought. A serious attack on the rights and freedoms of everyone.&quot;</strong></p> <p><strong><a href=""><img height="333" src="" width="500" /></a></strong></p> <p>Meanwhile, the anger keeps rising: as a police helicopter hovered above, protesters booed and gave it the finger. &quot;I wish they would just go,&quot; said Balta, looking up at the sky.</p> <p>The Spanish government&#39;s proposed measures still have to be approved by the Senate. But the upper house is majority-controlled by Rajoy&#39;s ruling Popular Party and he has secured the support of other major parties, meaning they will almost certainly go through.</p> <p><strong>Puigdemont is expected to make a statement at 9 p.m. </strong>For Catalonia, and Spain, it will - literally - mean the difference between independence and remaining part of Spain. It could also mean the difference between peace and a violent crackdown by Madrid on what it has seen since day one as an illegal independence process. For the Catalan leader, the stakes are huge:&nbsp; <strong>El Pais reported Puigdemont faces a charge of sedition, punishable by up to 30 years in prison, if he formally declares independence or tries to change the Spanish constitution.</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="800" height="431" alt="" src="" /> </div> </div> </div> Autonomous communities of Spain Carles Puigdemont Carme Forcadell Catalan government Catalan independence movement Catalan language Catalan parliament Catalans Catalonia Citizens Estelada Europe Generalitat de Catalunya Mariano Rajoy Operation Anubis Oriol Junqueras Politics Politics of Catalonia Popular Party regional parliament Reuters Senate Spanish constitutional crisis Spanish government Sun, 22 Oct 2017 01:28:43 +0000 Tyler Durden 605744 at Mauldin: "Investors Ignore What May Be The Biggest Policy Error In History" <p><em>Submitted by <a href="">John Mauldin </a></em></p> <p>My good friend Peter Boockvar recently shared a chart with me. The University of Michigan&rsquo;s Surveys of Consumers have been tracking consumers and their expectations about the direction of the stock market over the next year. <strong>We are now at an all-time high in the expectation that the stock market will go up.</strong></p> <p><a href=""><img height="355" src="" width="517" /></a></p> <p><strong>The Market Ignores Monetary Uncertainty</strong></p> <p>It is simply mind-boggling to couple that chart with the chart of the VIX shorts (I wrote about the VIX craze in this <a href="" target="_blank">this issue</a> of <a href="" target="_blank"><em>Thoughts from the Frontline</em></a>).</p> <p><img alt="" height="260" src="" width="500" /></p> <p>Peter writes:</p> <p style="margin-left:.5in;">Bullish stock market sentiment has gotten extreme again, according to Investors Intelligence. Bulls rose 2.9 pts to 60.4 after being below 50 one month ago. Bears sunk to just 15.1 from 17 last week. That&rsquo;s the least amount since May 2015. The spread between the two is the most since March, and II said, &ldquo;The bull count reenters the &lsquo;danger zone&rsquo; at 60% and higher. That calls for defensive measures.&rdquo; What we&rsquo;ve seen this year the last few times bulls got to 60+ was a period of stall and consolidation. When the bull/bear spread last peaked in March, stocks chopped around for 2 months. Stocks then resumed its rally when bulls got back around 50. Expect another repeat.</p> <p>Only a few weeks ago the&nbsp;<a href="" target="_blank">CNN Fear &amp; Greed Index</a>&nbsp;topped out at 98. It has since retreated from such extreme greed levels to merely high measures of greed. Understand, the CNN index is not a sentiment index; it uses seven market indicators that show how investors are actually investing. I actually find it quite useful to look at every now and then.</p> <p>The chart below, which Doug Kass found on Zero Hedge, pretty much says it all. Economic policy uncertainty is at an all-time high, yet uncertainty about the future of the markets is at an all-time low.</p> <p><a href=""><img alt="" src="" style="width: 500px; height: 254px;" /></a></p> <p><strong>Why This Is Happening Now</strong></p> <p>At the end of his email blitz, which had loaded me up on data, Dougie sent me this summary:</p> <ul> <li>At the root of my concern is that the Bull Market in Complacency has been stimulated by:</li> <li>the excess liquidity provided by the world&rsquo;s central bankers,</li> <li>serving up a virtuous cycle of fund inflows into ever more popular ETFs (passive investors) that buy not when stocks are cheap but when inflows are readily flowing,</li> <li>the dominance of risk parity and volatility trending, who worship at the altar of price momentum brought on by those ETFs (and are also agnostic to &ldquo;value,&rdquo; balance sheets,&rdquo; income statements),</li> <li>the reduced role of active investors like hedge funds &ndash; the slack is picked up by ETFs and Quant strategies,</li> <li><a href="">creating an almost systemic &quot;buy the dip&quot; mentality and conditioning.</a></li> <li>when coupled with precarious positioning by speculators and market participants:</li> <li>who have profited from shorting volatility and have gotten so one-sided (by shorting VIX and VXX futures) that any quick market sell off will likely be exacerbated, much like portfolio insurance&rsquo;s role in a previous large drawdown,</li> <li>which in turn will force leveraged risk parity portfolios to de-risk (and reducing the chance of fast turn back up in the markets),</li> <li>and could lead to an end of the virtuous cycle &ndash; if ETFs start to sell, who is left to buy?</li> </ul> <p><strong>On the Brink of the Largest Policy Error</strong></p> <p>The chart above, which shows <a href="" target="_blank">the growing uncertainty over the future direction of monetary policy, is both terrifying and enlightening</a>. The Federal Reserve, and indeed the ECB and the Bank of Japan, went to great lengths to assure us that the massive amounts of QE that they pushed into the market would help turn the markets and the economy around.</p> <p>Now they are telling us that as they take that money back off the table, they will have no effect on the markets. And all the data that I just presented above tells us that investors are simply shrugging their shoulders at what is roughly called &ldquo;quantitative tightening,&rdquo; or QT.</p> <p><strong><a href="" target="_blank">I simply don&#39;t buy the notion that QE could have had such an effect on the markets and housing prices while QT will have no impact at all.</a></strong></p> <p>In the 1930s, the Federal Reserve grew its balance sheet significantly. Then they simply left it alone, the economy grew, and the balance sheet became a nonfactor in the following decades. I don&rsquo;t know why today&rsquo;s Fed couldn&rsquo;t do the same thing.</p> <p><a href="" target="_blank">There really is no inflation to speak of,</a> except asset price inflation, and nobody really worries about that. We all want our stocks and home prices to go up, so there&rsquo;s no real reason for the central bank to lean against inflationary fears; and raising rates and doing QT at the same time seems to me to be taking a little more risk than necessary.</p> <p>And they&rsquo;re doing it in the midst of the greatest bull market in complacency to emerge in my lifetime.</p> <p><strong>Do they think that taking literally trillions of dollars off their balance sheet over the next few years is not going to have a reverse effect on asset prices? Or at least some effect? Is it really worth the risk? </strong>Remember the TV show&nbsp;<em>Hill Street Blues?</em>&nbsp;Sergeant Phil Esterhaus would end his daily briefing, as he sent the policemen out on their patrols, with the words, &ldquo;Let&rsquo;s be careful out there.&rdquo;</p> <p>* * *</p> <p><em><span style="font-size:10px;">Sharp macroeconomic analysis, big market calls, and shrewd predictions are all in a week&rsquo;s work for visionary thinker and acclaimed financial expert John Mauldin. Since 2001, investors have turned to his&nbsp;Thoughts from the Frontline&nbsp;to be informed about what&rsquo;s really going on in the economy. <a href="" target="_blank">Join hundreds of thousands of readers, and get it free in your inbox every week.</a></span></em></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="600" height="312" alt="" src="" /> </div> </div> </div> Bank of Japan Bank of Japan Behavioral finance Business CNN Doug Kass ECB Economic history of the Netherlands Economy Federal Reserve Finance Financial markets Housing Prices Investment Investors Intelligence Japan Market Sentiment Mathematical finance Michigan Monetary Policy Money Peter Boockvar Risk parity Short Technical analysis the University of Michigan University Of Michigan US Federal Reserve VIX Volatility Volatility Sun, 22 Oct 2017 01:00:22 +0000 Tyler Durden 605749 at Crypto-Currency Calm Before The Storm <p><a href=""><em>Authored by Jeremiah Johnson (nom de plume of a retired Green Beret of the United States Army Special Forces) via,</em></a></p> <p><strong>The United States (and the world) has been using the worthless fiat federal reserve note that is not backed by any true tangible asset.&nbsp;</strong> The only backing is not even the &ldquo;full faith and credit of the United States government,&rdquo; because the government is too far in debt to have any credit.&nbsp; Faith disappeared a long time ago: our faith in elected officials as public servants.&nbsp; Instead, they serve themselves upon the labors of the public, and the public <em>services</em> them, in every sense of the word.</p> <p><a href=""><img alt="" src="" style="width: 560px; height: 299px;" /></a></p> <p><strong>Cryptocurrency is an illusion.&nbsp; The new &ldquo;shell game&rdquo; is to replace one illusion&hellip;the fiat currency&hellip;with another illusion, the &ldquo;bitcoin.&rdquo;&nbsp; </strong></p> <p>Russia announced last week several measures to &ldquo;deal&rdquo; with the Cryptocurrency&hellip;first, by issuing a <strong>Crypto-ruble.</strong>&nbsp; If you read the fine print, the Russian government is moving in to tax and regulate it, at a rate of 13% on trades for profit, as well as &ldquo;Crypto-Rubles&rdquo; that suddenly appear out of nowhere.</p> <p>It won&rsquo;t affect the Black Market as much, because 13% is going to be paid to turn a blind eye to the billions of rubles being stolen by the Russian Mafia and oligarchy alike.&nbsp; The gimmick here is for the government to take a chunk out of it: for now.&nbsp; The reason &ldquo;now&rdquo; is being used, is that eventually they&rsquo;ll shift gears, pass legislation, and eventually outlaw private trading in it that is not government-sanctioned or government-approved.</p> <p>A government is only concerned with perpetuating itself and maintaining power.&nbsp; The most basic way it does this is by controlling the currency of the nation, regulating it, and taxing the citizens.&nbsp; In the United States, it has been reported by several sources that JP Morgan Chase is going to embrace Cryptocurrency.&nbsp; Europe is well on its way to establishing a &ldquo;Euro-BitCoin,&rdquo; and China has recently relaxed some measures regarding it.</p> <p><strong>This is the calm before the storm: the governments are studying it, and studying the masses to find the means to take control of it.</strong></p> <p>The gullible masses are playing right into their hands.&nbsp; The problem with Cryptocurrency is not just in the fact that it is backed by nothing (a fool&rsquo;s errand before it has been started), but there is no privacy.&nbsp; None.&nbsp; If the governments control and monitor all electronic and computer media, then there is no such thing as privacy regarding electronic currency.&nbsp; This will be the death of cash, and thus the death of any privacy for citizens.</p> <p>There will be no hiding from the taxing authorities.&nbsp; All the accounts will be monitored: taxed on any growth, and every single penny accounted for.&nbsp; The government will know what work you do, for how much, and how much &ldquo;Crypto-currency&rdquo; you have in your accounts.&nbsp; All electronic, nebulous, unbacked garbage.&nbsp; How about a nice &ldquo;glitch&rdquo; where suddenly, your entire account falls to a zero balance?&nbsp; That &ldquo;glitch&rdquo; can happen anytime.</p> <p>No, the politicians and the oligarchs will have gold, silver, real estate, mining rights and contracts, and ownership of every utility and municipal function upon which the public is dependent.&nbsp; Eventually the Crypto-Dollars will be handed out sparingly to &ldquo;exchange for food, clothing, and to pay their bills,&rdquo; and the whole thing is designed for one thing:</p> <p><strong>To keep the population at a starveling, subsistence level while those in power own everything, and them as well: Ruled by the politicians and oligarchs, fooled by the press and the religious pulpits, and killed by the enforcement arms of police and military.</strong></p> <p>In 1910, the meeting on Jekyll Island, Georgia took place leading up to 1913.&nbsp; It was then that the framework for the transfer of the power of the U.S. government over the nation&rsquo;s currency to the federal reserve was established.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong><em>&ldquo;The real truth of the matter is, as you and I know, that a financial element in the larger centers has owned the Government ever since the days of Andrew Jackson.&rdquo;</em></strong></p> <p>&nbsp;</p> <p><strong><em>President Franklin D. Roosevelt&rsquo;s letter to Colonel Edward Mandell House, </em></strong></p> <p><strong><em>Fmr. Advisor to President Woodrow Wilson&nbsp;&nbsp;&nbsp; November 21, 1933</em></strong></p> </blockquote> <p><u><em><strong>The aim is global governance.&nbsp; The Cryptocurrencies arose out of a desire to use something other than the dollar and other failing fiat notes not backed by anything.&nbsp; The irony is that the Cryptocurrencies are the vehicle for the globalists.</strong></em></u></p> <p>Once each nation has its Cryptocurrencies in place, they can &ldquo;align&rdquo; them, and virtually abolish all economic buffers and barriers&hellip;which will come crashing down just as the illegal aliens in Europe and the United States are destroying the borders, language, culture, and societies.&nbsp; The whole thing is trumpeted as a recourse, but it is nothing more than an extension of an Alinsky principle &ldquo;organizing the organized.&rdquo;&nbsp; At the right moment, the governments will swoop in, regulate, and tax these Cryptocurrencies.</p> <p><em><strong>Once cash is eliminated, hard assets such as gold, silver, and other resources will be simple to control.&nbsp; Where did you obtain that gold?&nbsp; How did you obtain it, and is it in our records?</strong></em></p> <p>The power lies in the receipt, the payment receipt showing where you obtained that product and how you obtained it&hellip;all based on POS (point of sale), the electronic monitoring of every expenditure at the register.&nbsp; The &ldquo;successful&rdquo; employment of Cryptocurrency will mean that the people have been completely duped and have handed all privacy into the control of the government.&nbsp; Once they control everyone economically, they will use that control to seize other aspects of daily life that are not regulated.&nbsp; <strong>They&rsquo;ll know how much you make, where you work, and how much you have available.</strong></p> <p>Or what you <em>think</em> you have available, because in the blink of an eye, they&rsquo;ll make your Crypto dollars disappear, and you&rsquo;ll have no recourse, just as they have no accountability.&nbsp; If politicians steal money now, while cash still exists, think of how much they&rsquo;ll be able to steal when everything is done electronically&hellip;when all the bankers and oligarchs are under their control/in a symbiotic-parasitic relationship and they can pass any law they wish.&nbsp; <strong>Cryptocurrency is a scam that will eventually lead to the final enslavement of the U.S.</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="230" height="116" alt="" src="" /> </div> </div> </div> Alternative currencies Bitcoin Bitcoin China Crypto Cryptocurrencies Cryptography Digital currency E-commerce Federal Reserve Finance Financial cryptography Money None Politics Real estate Russian government United States Army Special Forces United States government US Federal Reserve US government Sun, 22 Oct 2017 00:40:00 +0000 Tyler Durden 605747 at