http://www.zerohedge.com/fullrss2.xml/contributed/contributed/news/speaking-credibility-here-cbos-2001-forecast-which-predicted-negative-25-trillion-net-debt-2011 en Heads Up: Taiwan Mistakenly Fires Missile Toward China http://www.zerohedge.com/news/2016-07-01/heads-taiwan-mistakenly-fires-missile-toward-china <p>The recent <a href="http://www.zerohedge.com/news/2016-06-04/us-says-china-building-great-wall-self-isolation">back and forth</a> events between China, the US, and various other countries including <a href="http://www.zerohedge.com/news/2016-06-09/new-tensions-erupt-east-china-sea-time-russian-twist">Japan</a> as it relates to the South China Sea are well known at this point, however <strong>Taiwan has now entered into the picture as well</strong>.</p> <p>Last Saturday, the Chinese government said it had stopped a communication mechanism with Taiwan because of the <strong>refusal of the self-ruled island&#39;s new government to recognize the &quot;one China&quot; principle.</strong></p> <p>Reuters <a href="http://www.reuters.com/article/us-china-taiwan-idUSKCN0ZB05R">explains</a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>China, which regards Taiwan as wayward province, is deeply suspicious of Taiwan President Tsai Ing-wen, who took office last month, as they suspect she will push for formal independence</strong>.</p> <p>&nbsp;</p> <p>Tsai, who heads the pro-independence Democratic Progressive Party, says she wants to maintain the status quo with China and is committed to ensuring peace.</p> <p>&nbsp;</p> <p>But China has insisted she recognize something called the &quot;1992 consensus&quot; reached between China&#39;s Communists and Taiwan&#39;s then-ruling Nationalists, under which both agreed there is only one China, with each having their own interpretation of what that means.</p> <p>&nbsp;</p> <p>In a brief statement carried by the official Xinhua news agency, China&#39;s Taiwan Affairs Office said that since May 20, when Tsai took office, Taiwan has not affirmed this consensus.</p> <p>&nbsp;</p> <p>&quot;Because the Taiwan side has not acknowledged the 1992 consensus, this joint political basis for showing the one China principle, the cross Taiwan Strait contact and communication mechanism has already stopped,&quot; spokesman An Fengshan said.</p> </blockquote> <p>Just days later, it was <a href="https://www.yahoo.com/news/taiwan-test-fire-missiles-us-china-tensions-rise-112351298.html">reported</a> that <strong>Taiwan planned to test-fire its newest anti-missile system for the first time in the United States in the coming months.</strong> Although the missile system was purchased in 2008, before Tsai&#39;s leadership, the testing of the missiles coupled with the fact that it would be in the United States surely annoyed China further.</p> <p>Speaking of missiles, as Communist Party rulers in Beijing celebrated the party&#39;s 95th birthday on Friday, <span style="text-decoration: underline;"><strong>Taiwan&#39;s Navy fired a supersonic missile allegedly in error and hit a Taiwan fishing boat in waters separating the island from China</strong></span>.</p> <p>As Reuters <a href="http://www.reuters.com/article/us-taiwan-missile-idUSKCN0ZH4CH">reports</a>, the<strong> missile did not explode but pierced the boat and killed one Taiwan fisherman</strong>. The ship-to-air missile was mis-fired from a 500-ton Navy patrol vessel during pre-inspection in southern Taiwan ahead of a mock exercise Taiwan&#39;s Navy Chief of Staff Mei Chia-shu told reporters.</p> <p>&quot;<strong>That this is politically motivated, or this is to create crisis in the surrounding situation, this is not the case</strong>&quot; said Taiwan Defense Ministry spokesman Chen Chung-chi.</p> <p>Taiwan&#39;s Defense Ministry also said that it had not detected irregular movements by China&#39;s military after the accident.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user51698/imageroot/2016/07/01/20160701_missile1_0.JPG"><img height="347" src="http://www.zerohedge.com/sites/default/files/images/user51698/imageroot/2016/07/01/20160701_missile1_0.JPG" width="600" /></a></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user51698/imageroot/2016/07/01/20160701_missile2_0.JPG"><img height="362" src="http://www.zerohedge.com/sites/default/files/images/user51698/imageroot/2016/07/01/20160701_missile2_0.JPG" width="600" /></a></p> <p>* * *</p> <p>We&#39;re not sure what to be more concerned about for Taiwan, the fact that its presumably very expensive missile didn&#39;t actually explode upon impact, or that China will become even more annoyed - then again, both should probably be on their list of things to worry about.</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="569" height="343" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20160701_missile2.JPG?1467410371" /> </div> </div> </div> http://www.zerohedge.com/news/2016-07-01/heads-taiwan-mistakenly-fires-missile-toward-china#comments China Japan Reuters Fri, 01 Jul 2016 23:30:00 +0000 Tyler Durden 564958 at http://www.zerohedge.com Martin Armstrong Asks "Is Hillary The Most Devious Politician Of All Time?" http://www.zerohedge.com/news/2016-07-01/martin-armstrong-asks-hillary-most-devious-politician-all-time <p><a href="https://www.armstrongeconomics.com/international-news/north_america/2016-u-s-presidential-election/hillary-the-most-devious-politician-of-all-time/"><em>Via ArmstrongEconomics.com,</em></a></p> <p>QUESTION:&nbsp;<em><span style="text-decoration: underline;"><strong>Mr. Armstrong; Have you ever met or advised Hillary Clinton?</strong></span></em></p> <p><a href="https://armstrongmedia.s3.amazonaws.com/wp-content/uploads/2016/03/Hillary-Laughing.jpg" rel="attachment wp-att-47778" target="_blank"><img alt="Hillary Laughing" height="457" src="https://armstrongmedia.s3.amazonaws.com/wp-content/uploads/2016/03/Hillary-Laughing.jpg" width="329" /></a></p> <p>&nbsp;</p> <p><strong>ANSWER:</strong>&nbsp;No. I was asked to meet with Bill when he was first elected in Arkansas after he invited hundreds of people for a dog and pony show. <strong>I declined.</strong></p> <p><strong>There is nothing I could advise Hillary on, for it is never about the country; it is just about her.</strong></p> <p>The latest scandal surfacing is her&nbsp;<a href="http://www.nationalreview.com/article/437312/hillary-clinton-emails-secret-meetings-clinton-foundation-donors" target="_blank">schedule as Secretary of State</a>,&nbsp;which a judge has now ordered must be turned over. <strong>Hillary&rsquo;s scheduled meetings while she was Secretary of State shows she was devious and untrustworthy</strong>.</p> <p><strong>At least 75 meetings were identified with longtime loyal donors, corporate contributors, </strong>and others that were not recorded in her agenda or were listed with identifying details removed.</p> <p>Hillary appeared on the central balcony of the New York Stock Exchange in September 2009 to ring the opening bell. <strong>Then, minutes later, Hillary attended a private breakfast with influential Wall Street and business leaders</strong>. She withheld the identities of those people she met with. <strong>These omissions are just the tip of the iceberg of names and events she omitted from her historical record of meetings.</strong></p> <p>This is typical of Hillary who <strong>represents the climax of arrogance and corruption among career politicians.</strong> These types of people have been<strong> getting away with this for so long that they cannot imagine running a government for any reason other than personal gain.</strong></p> <p>No, there is nothing I would be able to advise her on because <strong>she is not interested in the country</strong>. It has always been about her being the first woman president and nothing else. <strong>It&rsquo;s all about paying her for favors.</strong> There is nothing I need from Hillary.</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="320" height="227" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20160701_hill.jpg?1467405220" /> </div> </div> </div> http://www.zerohedge.com/news/2016-07-01/martin-armstrong-asks-hillary-most-devious-politician-all-time#comments Corruption Martin Armstrong New York Stock Exchange Fri, 01 Jul 2016 23:00:00 +0000 Tyler Durden 564954 at http://www.zerohedge.com Kyle Bass Shares The "Stunning" Thing A Central Banker Once Told Him http://www.zerohedge.com/news/2016-07-01/kyle-bass-shares-stunning-thing-central-banker-once-told-him <p>If you ever wanted to get a look inside the mind of Kyle Bass, founder and CIO of Hayman Capital Management, here is your chance. In a wide-ranging discussion with Grant Williams, author of Things that Make You Go Hmm and co-founder of Real Vision TV, he shared his thoughts on position-sizing, China, the appeal of holding gold, central banking, interest rates – and much, much more. </p> <p>Predictably, the one topic that got the most attention was China, where as widely known Bass has made his next "career" wager, expecting a substantial devaluation of the currency, a process which had stalled out in recent months but has once again picked up speed. </p> <p>Looking at recent data, and specifically something we <a href="http://www.zerohedge.com/news/2016-06-15/something-unexpected-emerges-chinas-latest-money-and-credit-data">pointed out two weeks ago, </a>Bass said the country’s $3 trillion corporate bond market is “freezing up” amid rising defaults and canceled debt sales. <strong>“We’re starting to see the beginning of the Chinese machine literally break down.”&nbsp;</strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/06/27/china%20corporate%20bonds.png"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/06/27/china%20corporate%20bonds_0.png" width="500" height="281" /></a></p> <p>Bass reiterated that China’s lending binge in recent years is unsustainable and it is only a matter of time before this bubble, bigger than the US bubble of 2005/2006 which brought Bass fame and fortune, bursts. He expects bank losses of $3 trillion to trigger a bailout, with the central bank slashing reserve requirements, cutting the deposit rate to zero and expanding its balance sheet - all of which will weigh on the yuan, and lead to a dramatic devaluation.</p> <p><strong>“They’re going to do everything the U.S. did in our crisis,” </strong>said Bass, who has gone public with his China views since at least October. “Every single thing the Chinese central bank and central planners have to do is currency negative for them.”&nbsp; He added that the Chinese government wants a devaluation, but “they just want to do it on their terms." By this he is of course referring to the vast exodus of domestic capital as the local population sees the endgame and is scrambling to park its funds offshore (mostly in UK, US and Canadian real estate as well as US M&amp;A, and more recently, in bitcoin), something Beijing is terrified of and is doing all in its power to prevent. </p> <p>An interesting theme here was Kyle Bass's devaluation thesis as a contrast to <strong>Hugh Hendry</strong>'s recent Chinese optimistic euphoria. This is what Bass told Williams:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>Williams: </strong>China is something else that you've been very vocal about recently. You and this gang of nefarious Texas hedge fund managers who are trying to take down the People's Bank of China. And again, it's another, in my reckoning, very well argued case for the devaluation of the yuan. <strong>And Hugh Hendry was on talking to Raoul, said, "It'll never happen. The world's over if it happens</strong>." And I can see where he's coming from, but it seems to me that the people that debate on the "they won't devalue" side are assuming it's going to be a voluntary devaluation, something that they choose to do, rather than they have to do.</p> <p>&nbsp;</p> <p><strong>Kyle: </strong>That's a perfect point, perfect point.</p> <p>&nbsp;</p> <p><strong>Grant: </strong>Because that seems to me, they're going to have to do it to recap the banks. There's going to be a reason for them to do it, not a choice.</p> <p>&nbsp;</p> <p><strong>Kyle: </strong>Well, it's going to happen to them. And again, even in your soliloquy there, you say, "They're going to have to do it." They're going to have to allow it to happen. It's going to happen.<strong> I love Hugh, we've had a number of debates throughout history, and he's a fantastic individual and a brilliant mind. But if the reason that it's not going to happen is because "it can't happen, because the rest of the world's going to have so much trouble with it," that doesn't give me any solace whatsoever</strong>. In fact, you look back to the U.S. financial crisis when I would go meet with various heads of investment banks or investors, and I would say, "This is what's going to happen, and this is why, and this is how the structures are structured." And some would look at me and say, "Well, that means Fannie and Freddie will be out of business. And so therefore, the government will never let that happen." I said, "Well, the government doesn't have a choice here. It's too late." The credit excesses had already been built. And in China, the credit excesses are already built. They've got, we can go into numbers, but they have asset-liability mismatches in their system, in the wealth management products, that are more than 10% of their system. <strong>And our asset-liability mismatches were two and a half percent of our system, and you know what they did. So their excesses are already, they're already so far ahead of the world's excesses in prior crises that we're facing the largest macro imbalance in world history. And to this day, I can't figure out why people don't see it for what it is.</strong></p> </blockquote> <p>At this point Bass proceeds to discuss some interesting behavioral bises inherent in investing: </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>Bass:</strong> I think the behavioral psychology plays a huge part. And you've hit it right on the head. I give you an interesting anecdote. Again, back to the U.S. subprime crisis, I went all over the country raising money for a subprime, two subprime funds and some advisor relationships. And what was absolutely hilarious to me, looking back at the meetings that we had, is we would go to Chicago, and we would say...we'd lay out the thesis, and they would say, <strong>"You're exactly right, this is absolutely going to happen." It's not going to happen here in Chicago because of one, two, three and four these points. But that's because they live there, the NIMBY, the not in my back yard scenario or psychological profile of events, was not going to happen. But it was going to happen to everyone else but them. </strong>And then I'd go to Seattle and I'd lay that thesis out and they'd say, "Oh, you're absolutely right. Never going to happen here because Microsoft's here and Amazon's here, and but our houses are fine, but everybody else's homes, they're going to drop 35%, and we're going to invest with you." And then I'd go to Southern California and I'd go to Texas, and everywhere I went, not one organization or group of investors would agree that it would happen to them, but it was going to happen to everyone else. And that's again, I think the beginning of what you and I were just discussing with regard to the psychological profile, or more importantly, the behavioral psychology that plays into one's thought process. Because the first thing...I think the first inalienable right of human nature is self-preservation, <strong>and when you get into a thought of, okay, Hugh's position, is if it...if this were to happen, it would be so globally terrible that therefore, they're going to not let this happen. </strong>I understand that logic <strong>and I think you do too, but I believe it's flawed</strong>. And the reason it's flawed is again, it's just this...It's almost like the Kahneman's availability heuristic, where you only have this certain data set, and you only look at history back...I think the brevity of financial memory is only about three years.</p> <p>&nbsp;</p> <p>* * *</p> <p>What's fascinating to me, Grant, is outside of Hugh Hendry, behind the scenes, when you talk with some of the largest asset managers in the world and the largest investors in the world, and you lay out a hundred page PowerPoint of exactly how their banking system and credit system works, and how they are putting off the final day of just realizing a loss cycle. <strong>You mentioned Armageddon. It's not Armageddon.</strong> They're going to have a loss cycle. They'll recap their banks, their currency will depreciate, pretty materially. It will export deflation to the world one last time. And if you have any money left, it will be the best time in the world to invest, and we both know this.</p> </blockquote> <p>Bass also sees the humor in shorting China:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>Bass: </strong>I know there are permabears on China. But from my perspective, it's just a scenario that I see has come to a head. And one other point that you made...one of my good friends, Dan Loeb, says all the time to me that <strong>"there are no short sellers on the Forbes 400 list, so be careful." </strong>And a friend I think told you, don't invest in Armageddon, it only happens once in a blue moon. All of those things are absolutely true. But to check caution to the wind and hope the central banks get it right from here, I think is an outsized risky proposition.</p> </blockquote> <p>Bass doesn't just limit himself to China: he also touches on arguably the most controversial asset of all time - gold.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>Williams: </strong>What's your current thinking on gold? Because I know it's something you've had thoughts in the past, but it's not something I've heard you talk about for a while. </p> <p>&nbsp;</p> <p><strong>Bass: </strong>Yeah. I look at Global M2, being just under a hundred trillion. And the total amount of mined gold in world history is somewhere around seven trillion. And there's about...and then gold that's kind of in circulation in use. We studied...we did a deep dive on gold a few years ago. They call it the yellow metal that has no yield, <strong>but with the entire world going to negative rates, then on a relative basis, it's probably one of the better currencies to own. I buy that wholeheartedly. And seeing which way the central banks are going, you're going to have to own something. </strong></p> </blockquote> <p>He also touches on the future of interest rates:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>Bass: </strong>The spreads between U.S. 30 year treasuries and 10 year treasuries, and Japanese 30 years and 10 years, and European 30 years and 10 years, is as wide as it's ever been. And so what does that mean? That means <strong>that I think U.S. rates are coming down, regardless of what kind of inflationary pressures we have, which is something that we've never seen before</strong>. Again, a new paradigm given the global central banking conundrum. So when you ask me whether stocks have peaked or not in the U.S., look, if China has the comeuppance we think they're going to have, soon, then that's not going to be an equity positive environment.</p> </blockquote> <p>Bass also discusses the recent collapse in central bank confidence:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>Williams: </strong>When you talk about this handicapping the central banks, which we've all had to do, and it's essentially impossible. <strong>How do a group of free market capitalists handicap a group of academics? </strong>We speak different languages. So as we watch this thing move forwards, the guys in the markets assume to a cliff somewhere out yonder in the fog. What do you think tips this thing on? Because to me, it's purely confidence now. There's nothing left but confidence in these guys that they can do this. And you bring up the reaction to Kuroda-San going negative in January. And I think the instant reaction of the markets, people are going to look back on that, when the Nikkei fell a thousand points and the yen strengthened by a full bip. That, to me, was the start of people going, "You know, maybe these guys are just throwing things at the wall." </p> <p>&nbsp;</p> <p><strong>Kyle: </strong>You're right. <strong><span style="text-decoration: underline;">That was the first time I've seen investors show a disbelief in the markets, in central banks</span>. </strong>And I agree with you. <strong>That was a watershed moment in our business, in attempting to see when there's a tectonic shift in the belief systems, because we all know that that one of the central banks' objectives is price stability, whatever that means</strong>. I think that means each relevant industry that they oversee trading higher and not lower, it equals price stability. And they didn't get it, Kuroda-San didn't get it then, and since then Japan struggled. And this concept of Ricardian equivalence, where you're issuing debt to quantitatively ease on the monetary policy side, and maybe even allowing, right, the fiscal authorities to continue to spend, it comes into play where people just start saving more. And this idea of negative interest rates realize...it's interesting, academically negative interest rates look like they work on paper. And in reality, what these central bank heads are realizing, whether you're in Denmark or Japan or any of these economies, is savers think, "Well, I just need to save more if I'm not going to earn anything on my savings."</p> <p>&nbsp;</p> <p>* * * </p> <p>&nbsp;</p> <p>We're already crossing the Rubicon of the helicopter money. And Japan's talking about a negative lending facility from the BOJ to the banks. So we're starting to see...the academics will never turn and say, "We were wrong." The academics will go "more," and they'll just go unsterilized. And in the end, we know where that gets all of us.</p> </blockquote> <p>But the punchline is beyond gold, beyond China, beyond even investing, and has to do with something a central banker once told Bass in what the hedge fund manager describes as an "<em>out of body" epiphany</em>:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>Grant: </strong>this idea of helicopter money, and the idea of banning cash, and all these things that, when you sit here in the cold like that, you can see exactly why they need to do these things. You watch the narrative unfold in the media, and then the trial balloons get floated. But you're right, they have to go to helicopter money, they're really not going to have a choice. And it seems to me that they are going to have to try to ban cash. Because, as you say, the U.S. savings rate has tripled since 2007, and that's literally the last thing they want or need. So is there any way out for these guys? Because that's the thesis that I keep checking. I can't see a way out, absent cold fusion. </p> <p>&nbsp;</p> <p><strong>Kyle: </strong>Look, I had a <strong>fascinating out of body experience meeting with one of the world's top central bankers in a private meeting about three years ago. And he said, "You know Kyle, quantitative easing only works when you're the only country doing it." </strong>He would never say that publicly. And I'll protect his name, because it was a private meeting. But it was one of those moments where I...it was one of those epiphanies almost, where it's something you and I knew, but hearing him say it, <strong>call it one of the four top central bankers in the world</strong>, it was a jarring experience for me, because when I look around the world&nbsp; today, everyone's in the same boat. <strong>So we're all trying...we're attempting through our treasury and our Fed to get the rest of the world to not devalue against us, while we quietly attempt to devalue ourselves against them, and it's all this...it is the race to the bottom</strong>, it is the beggar thy neighbor policies that we all talk about. <strong><span style="text-decoration: underline;">And I believe that there is no way out</span>.</strong></p> </blockquote> <p>* * *</p> <p>A 5 minutes excerpt of the full interview can be watched below:</p> <p><iframe src="https://www.youtube.com/embed/muHaeTOFYDs" width="500" height="281" frameborder="0"></iframe></p> <p>&nbsp;</p> <p>The full hour-long interview is available to Zero Hedge readers with a free 7-day trial subscription <a href="https://realvisiontv.com/landing/kyle-bass">to Real Vision TV at the following page.</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="723" height="404" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/kyle%20bass%20.jpg?1467407178" /> </div> </div> </div> http://www.zerohedge.com/news/2016-07-01/kyle-bass-shares-stunning-thing-central-banker-once-told-him#comments Bitcoin Bond Central Banks China Hayman Capital Hugh Hendry Hugh Hendry Japan Kyle Bass Kyle Bass M2 Monetary Policy Nikkei People's Bank Of China Quantitative Easing Real estate Reality Savings Rate Yen Yuan Fri, 01 Jul 2016 22:28:04 +0000 Tyler Durden 564956 at http://www.zerohedge.com Brexit & The Crisis Of Capitalism http://www.zerohedge.com/news/2016-07-01/brexit-crisis-capitalism <p><a href="http://charleshughsmith.blogspot.com/2016/07/brexit-and-crisis-of-capitalism.html"><em>Submitted by Charles Hugh-Smith of OfTwoMinds blog,</em></a></p> <p><em>If you collapse these extractive, debt-dependent crony-capitalist cartels, you collapse the entire status quo. </em></p> <p><strong>Thousands of commentaries have been issued about Brexit in the past week.</strong> I&#39;ve written four myself. Most discuss Brexit as the result of immigration issues, class war, political theater, a reaction against the European Union&#39;s bureaucratic power, sovereignty, etc. Other essays focus on the potential upsides or downsides of Brexit.</p> <p><strong>What few if any commentators present is the idea that Brexit is a symptom of the Crisis of Capitalism</strong>.</p> <p>The current global version of Capitalism is characterized by these overlapping dynamics:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>1. Replacing stagnant real growth and income (and thus taxes) with debt.</p> <p>&nbsp;</p> <p>2. Replacing investment in real-world productivity with speculation (i.e. financialization)</p> <p>&nbsp;</p> <p>3. Replacing &ldquo;everyone must have skin in the game&rdquo; free-market capitalism with <em>protected, privileged Elites crony capitalism</em> in which the few benefit at the expense of the many.</p> <p>&nbsp;</p> <p>4. Replacing local, decentralized democracy and ownership with central planning.</p> <p>&nbsp;</p> <p>5. Using &ldquo;extend and pretend&rdquo; financial trickery to mask insolvency, impaired assets/ collateral and non-performing loans rather than address the debt overhang directly via write-downs and liquidations of impaired assets.</p> </blockquote> <p><strong>If real (adjusted for inflation) growth and wages were increasing organically</strong> (i.e. as the result of free-market dynamics rather than central-planning manipulation) <strong>there would be no need for financialization, &ldquo;extend and pretend&rdquo; or central planning.</strong></p> <p>These ills are the status quo&#39;s &quot;fixes&quot; to the Crisis of Capitalism, which arises from these causes:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>1. It is no longer profitable to hire people to do an expanding range of work</strong>, from minding the jumble store on high street to writing software code that has been automated.</p> <p>&nbsp;</p> <p><strong>There is no fix for this.</strong> As I explain in my book <a href="http://www.amazon.com/gp/product/B01FYBYQZ4/ref=as_li_tl?ie=UTF8&amp;camp=1789&amp;creative=9325&amp;creativeASIN=B01FYBYQZ4&amp;linkCode=as2&amp;tag=charleshughsm-20&amp;linkId=AXNFHTKZO2653EFV" target="resource">A Radically Beneficial World</a>, the idea that we can &quot;tax the robots&quot; to generate the $2.4 trillion we&#39;d need to make a Universal Guaranteed Income a reality in the U.S. is pure fantasy, as profits collapse as the cost of those commoditized tools decline.</p> <p>&nbsp;</p> <p>Paying people to do nothing looks like a grand benefit but it is actually terribly destructive because people need purposeful work and a sense of contributing to something meaningful. Paying the majority of people to do nothing is a destructive and financially impossible fantasy.</p> <p>&nbsp;</p> <p><strong>2. Consumer demand is not infinite, and modern production can over-supply the demand of an aging populace.</strong> The supply-demand curve has shifted for demographic and structural reasons. The idea that consumer demand can be endlessly goosed higher is false. As demand stagnates and the tools of production are commoditized, production increases (because the money needed to expand production is essentially free) and profits and wages both decline.</p> <p>&nbsp;</p> <p><img align="middle" border="0" class="wide" src="http://www.oftwominds.com/photos2016/wages-GDP5-16a.png" /></p> <p>&nbsp;</p> <p><strong>3. What cannot be over-produced burdens the system with a higher cost structure.</strong> The core fantasy of neoliberalism is that everything can be made abundant once it is commoditized on a global scale. But this is simply not true of resources such as potash, lithium or ocean fisheries.</p> <p>&nbsp;</p> <p>As scarcities arise from the fact that the planet we inhabit is not infinite, these scarcities tend to drive innovation and a search for substitutes. But substitutes have limits, too. As costs rise, there is less disposable income to pay interest on rising debt or consume more. Spending and consumption stagnate, along with profits and wages.</p> <p>&nbsp;</p> <p><strong>4. The status quo is dominated by cartels and crony-state-capital arrangements that raise systemwide costs to benefit the few at the expense of the many.</strong> Healthcare (specifically, Obamacare) is a prime example: costs are soaring because the pool of taxpayer money that can be devoted to healthcare is assumed to be limitless.</p> <p>&nbsp;</p> <p>College costs $150,000 for four years not because education &quot;must cost&quot; $150,000; it costs $150,000 because students can borrow $150,000 from the federal-higher-education cartel. the actual cost is unknown because the cartel has been able to impose staggering price increases for decades.</p> <p>&nbsp;</p> <p>(I make the case that a four-year college degree should cost no more than a few thousand dollars in my book <a href="http://www.amazon.com/gp/product/1491222212/ref=as_li_qf_sp_asin_tl?ie=UTF8&amp;camp=1789&amp;creative=9325&amp;creativeASIN=1491222212&amp;linkCode=as2&amp;tag=charleshughsm-20" target="resource">The Nearly Free University and the Emerging Economy</a>.)</p> <p>&nbsp;</p> <p><strong>5. If you collapse these extractive, debt-dependent crony-capitalist cartels, you collapse the entire status quo.</strong> All the finance, debt-dependent production and consumption, pensions, insurance and tax revenues that the majority depend on for their income implode once you take away the cartel&#39;s monopoly pricing.</p> </blockquote> <p><strong>Reforming the system implodes the system.</strong> This is why Brexit has limited scope to fix the structural causes of Crisis of Capitalism.</p> <p>*&nbsp; *&nbsp; *<br /><em><a href="http://www.amazon.com/gp/product/B01FYBYQZ4/ref=as_li_tl?ie=UTF8&amp;camp=1789&amp;creative=9325&amp;creativeASIN=B01FYBYQZ4&amp;linkCode=as2&amp;tag=charleshughsm-20&amp;linkId=AXNFHTKZO2653EFV" target="resource">A Radically Beneficial World: Automation, Technology and Creating Jobs for All</a> is now available as an Audible audio book.</em></p> <p><em><strong>My new book is #14 on Kindle short reads -&gt; politics and social science: <a href="http://www.amazon.com/gp/product/B01ELXQZGE/ref=as_li_tl?ie=UTF8&amp;camp=1789&amp;creative=9325&amp;creativeASIN=B01ELXQZGE&amp;linkCode=as2&amp;tag=charleshughsm-20&amp;linkId=33DAOPEVGBNGBS37" target="resource">Why Our Status Quo Failed and Is Beyond Reform</a></strong> ($3.95 Kindle ebook, $8.95 print edition) <strong>For more, please visit the <a href="http://www.oftwominds.com/SQ-book.html" target="resource">book&#39;s website</a>.</strong></em></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="475" height="284" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20160701_crisis.jpg?1467404963" /> </div> </div> </div> http://www.zerohedge.com/news/2016-07-01/brexit-crisis-capitalism#comments ETC European Union non-performing loans Obamacare Reality Fri, 01 Jul 2016 22:00:00 +0000 Tyler Durden 564953 at http://www.zerohedge.com Breuphoria - Stocks Explode Higher On Biggest Short Squeeze In 7 Years http://www.zerohedge.com/news/2016-07-01/breuphoria-stocks-explode-higher-biggest-short-squeeze-7-years <p>We hope this helps...</p> <p><iframe allowfullscreen="" frameborder="0" height="315" src="https://www.youtube.com/embed/92i5m3tV5XY" width="560"></iframe></p> <p>&nbsp;</p> <p>Quite a week!!!</p> <ul> <li><strong>S&amp;P +3.3% - best week since Oct 2014 Bullard Bounce</strong></li> <li><strong>&quot;Most Shorted&quot; stocks =10.1% in last 4 days - biggest squeeze since May 2009</strong></li> <li><strong>Financials +3% - best week in 3 months</strong></li> <li><strong>30Y Treasury yield to record low - best week in 3 months</strong></li> <li><strong>Silver +11.25% - best week since Aug 2013</strong></li> <li><strong>Gold up 5 weeks in a row</strong></li> <li><strong>Oil +3.2% - best week in six weeks</strong></li> <li><strong>Copper +5.5% - best week in 3 months</strong></li> </ul> <p>Since Brexit, bonds and bullion remain best and stocks tried their best to scramble back to unch...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/01/20160701_EOD14.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/01/20160701_EOD14_0.jpg" style="width: 600px; height: 468px;" /></a></p> <p>&nbsp;</p> <p>The Dow has been the best post-Brexit performer... gettuing with 9 Dow points of the pre-Brexit close...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/01/20160701_EOD13.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/01/20160701_EOD13_0.jpg" style="width: 600px; height: 375px;" /></a></p> <p>&nbsp;</p> <p>S&amp;P at 2,100 and Dow at 18,000 were as crucial as getting green to Brexit...</p> <p>TS S&amp;P/DOW</p> <p>&nbsp;</p> <p><strong>On a yuuge short squeeze...</strong>(biggest weekly rise in &quot;Most Shorted&quot; in 4 months)</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/01/20160701_EOD9.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/01/20160701_EOD9_0.jpg" style="width: 600px; height: 315px;" /></a></p> <p>&nbsp;</p> <p>BUT<strong> the last 4 days&#39; 10.1% surge is the biggest since May 2009!</strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/01/20160701_EOD10.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/01/20160701_EOD10_0.jpg" style="width: 600px; height: 299px;" /></a></p> <p>&nbsp;</p> <p>On no volume...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/01/20160701_EOD11.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/01/20160701_EOD11_0.jpg" style="width: 600px; height: 312px;" /></a></p> <p>&nbsp;</p> <p>It&#39;s been quite a few weeks for VIX... its biggest drop in history this week</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/01/20160701_vix3.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/01/20160701_vix3_0.jpg" style="width: 600px; height: 395px;" /></a></p> <p>&nbsp;</p> <p>While financials had a great week, they are still down over 2% from Brexit...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/01/20160701_EOD6.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/01/20160701_EOD6_0.jpg" style="width: 600px; height: 311px;" /></a></p> <p>&nbsp;</p> <p>And the curve just keeps running away from them...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/01/20160701_EOD7.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/01/20160701_EOD7_0.jpg" style="width: 600px; height: 310px;" /></a></p> <p>&nbsp;</p> <p>Treasury yields have tumbled since Brexit, reaccelerating lower today...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/01/20160701_EOD5.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/01/20160701_EOD5_0.jpg" style="width: 600px; height: 318px;" /></a></p> <p>&nbsp;</p> <p>To record lows for 10Y and 30Y...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/01/20160701_EOD2.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/01/20160701_EOD2_0.jpg" style="width: 600px; height: 314px;" /></a></p> <p>&nbsp;</p> <p><strong>As 2s30s curve crahses to its lowest since Jan 2008</strong> - when the last recession was underway...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/01/20160701_EOD3.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/01/20160701_EOD3_0.jpg" style="width: 600px; height: 318px;" /></a></p> <p>&nbsp;</p> <p>FX markets were choppy but volatility dropped as The USD Index slid 4 days in row...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/01/20160701_EOD8.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/01/20160701_EOD8_0.jpg" style="width: 600px; height: 311px;" /></a></p> <p>&nbsp;</p> <p>Commodities all rose on the week but Crude remain slower post-Brexit as Silver explodes...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/01/20160701_EOD12.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/01/20160701_EOD12_0.jpg" style="width: 600px; height: 315px;" /></a></p> <p>&nbsp;</p> <p>Crude rallied thgrough the NYMEX close for the 10th day of the last 11 and extended on...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/01/20160701_EOD4.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/01/20160701_EOD4_0.jpg" style="width: 600px; height: 576px;" /></a></p> <p>&nbsp;</p> <p>Silver is up 14% in the last 6 days post-Brexit... pushing for $20... the biggest surge since August 2013...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/01/20160701_EOD1.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/01/20160701_EOD1_0.jpg" style="width: 600px; height: 526px;" /></a></p> <p>&nbsp;</p> <p><em>Charts: Bloomberg</em></p> <p><strong>Bonus Chart: What Happens Next?</strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/01/20160701_EOD15.jpg"><strong><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/01/20160701_EOD15_0.jpg" style="width: 600px; height: 313px;" /></strong></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="600" height="71" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20160701_EOD.jpg?1467402033" /> </div> </div> </div> http://www.zerohedge.com/news/2016-07-01/breuphoria-stocks-explode-higher-biggest-short-squeeze-7-years#comments 2s30s Crude NYMEX Recession Volatility Fri, 01 Jul 2016 21:55:12 +0000 Tyler Durden 564949 at http://www.zerohedge.com Obamacare Enrollment Drops To 11.1 Million, Government Calls It "Sign Of Success" http://www.zerohedge.com/news/2016-07-01/obamacare-enrollment-drops-111-million-government-calls-it-sign-success <p>By nearly all accounts, Obamacare has been a <strong>spectacular failure.</strong> Whether it&#39;s the fact that half of the cooperatives created by Obamacare <a href="http://www.zerohedge.com/news/2016-05-11/obamacare-rules-change-opens-door-state-bailouts">had to shut down</a> costing taxpayers roughly $1.2 billion, or that insurance premiums are<a href="http://www.zerohedge.com/news/2016-05-26/how-much-your-health-insurance-payment-about-jump"> exploding higher</a>, or perhaps just having to find a new healthcare plan since the largest US health insurer decided to <a href="http://www.zerohedge.com/news/2016-05-31/largest-us-health-insurer-exits-california-illinois-obamacare-markets">divorce itself</a> from the Obamacare exchanges, it all points to disaster.</p> <p>When it comes to the latest Obamacare enrollment figures, the story remains the same. As The Hill <a href="http://thehill.com/policy/healthcare/286208-obamacare-enrollment-drops-to-111m">reports</a>, <strong>Obamacare enrollment dropped to about 11.1 million people at the end of March, down from the 12.7 million who signed up for coverage before the January 31 deadline</strong>.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user51698/imageroot/2016/07/01/20160701_Obama_0.JPG"><img height="326" src="http://www.zerohedge.com/sites/default/files/images/user51698/imageroot/2016/07/01/20160701_Obama_0.JPG" width="600" /></a></p> <p>The Centers for Medicare and Medicaid Services (CMS) said that a dropoff was expected, and has occurred in previous years as well, given that some people who sign up do not pay their premiums - <a href="http://www.zerohedge.com/news/2016-05-26/how-much-your-health-insurance-payment-about-jump">we wonder why that is</a>. The administration says it projects that about 10 million people will remain signed up by the end of the year.<span style="text-decoration: underline;"> <strong>Said otherwise, they government is planning on another 1.1 million dropping out of Obamacare before the end of the year</strong></span><strong>.</strong></p> <p><strong>Kevin Counihan, the CEO of the Obamacare marketplaces, said the fact that about a million more people are signed up than at a similar point last year (11.1 million compared to 10.2 million) <span style="text-decoration: underline;">is a sign of success</span></strong>. We suspect Kevin is conveniently forgetting the fact that the <u><strong>CBO <a href="http://thehill.com/policy/healthcare/286208-obamacare-enrollment-drops-to-111m">had projected</a> that 2016 enrollment would be as high as 21 million people</strong></u> - but perhaps missing projections by nearly half is a sign of success in the government&#39;s eyes.</p> <p>Here is how Counihan is spinning the results:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&quot;This increased level of enrollment demonstrates the strength of the Marketplace over time, as millions of Americans continue to have access to quality and affordable coverage when they need it. As of early this year, 20 million Americans had coverage thanks to provisions of the Affordable Care Act, and the Health Insurance Marketplace is an important contributor to that progress.&quot;</p> </blockquote> <p>* * *</p> <p>Then again, despite the incredible miss in enrollment compared to projections, and ignoring the fact that the enrollment level dropped once again, perhaps Obamacare did actually achieve its ultimate goal. As we <a href="http://www.zerohedge.com/news/2016-06-28/obamacare-accounted-58-us-growth-first-quarter">reported</a> earlier this week, <strong>Obamacare accounted for 58% of US growth in Q1</strong>.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user51698/imageroot/2016/07/01/20160701_obamacare.JPG"><img height="340" src="http://www.zerohedge.com/sites/default/files/images/user51698/imageroot/2016/07/01/20160701_obamacare_0.JPG" width="600" /></a></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="630" height="342" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20160701_Obama.JPG?1467403805" /> </div> </div> </div> http://www.zerohedge.com/news/2016-07-01/obamacare-enrollment-drops-111-million-government-calls-it-sign-success#comments Medicare Obamacare Fri, 01 Jul 2016 21:30:00 +0000 Tyler Durden 564950 at http://www.zerohedge.com What Risk? Post-Brexit VIX Crash Is Greatest Ever http://www.zerohedge.com/news/2016-07-01/what-risk-post-brexit-vix-crash-greatest-ever <p>After a wild few weeks...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/01/20160701_vix3.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/01/20160701_vix3_0.jpg" style="width: 600px; height: 395px;" /></a></p> <p>&nbsp;</p> <p>VIX dropped almost 42% this week - its biggest decline in history - as nerves settled over Brits&#39; decision to &quot;leave&quot; the EU.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/01/20160701_VIX1.jpg"><img height="302" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/01/20160701_VIX1_0.jpg" width="600" /></a></p> <p>&nbsp;</p> <p>A bigger &quot;relief&quot; than the end of the Gulf War, than the post-Bear Stearns fund liquidations bounce as Central Banks saved the world, and than the last minute decision to not shut down the US government on Dec 31st 2012,<strong> &quot;Bre-lief&quot; is indeed the great dumping of protection in history...</strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/01/20160701_VIX2.jpg"><img height="162" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/07/01/20160701_VIX2.jpg" width="600" /></a></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="600" height="162" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20160701_VIX2.jpg?1467399879" /> </div> </div> </div> http://www.zerohedge.com/news/2016-07-01/what-risk-post-brexit-vix-crash-greatest-ever#comments Central Banks Fri, 01 Jul 2016 21:00:00 +0000 Tyler Durden 564946 at http://www.zerohedge.com Weekend Reading: Bre-lief? http://www.zerohedge.com/news/2016-07-01/weekend-reading-bre-lief <p><em><a href="https://realinvestmentadvice.com/weekend-reading-bre-lief/">Submitted by Lance Roberts via RealInvestmentAdvice.com</a>,</em></p> <p><strong>Quite a week.</strong></p> <p>Last week, the markets rallied in anticipation Britain would <em>&ldquo;Remain&rdquo;</em> in the European Union which reversed the sell-off from the previous week. Despite a variety of polls and betting sites showing rising odds of Britain remaining in the EU, the <em>&ldquo;inconceivable&rdquo;</em> occurred last Thursday&nbsp;proving everyone wrong.</p> <p>But this week, the markets proved everyone <em>&ldquo;wrong&rdquo;</em> again. <a href="https://realinvestmentadvice.com/technically-speaking-as-expected-central-bank-rescue/" target="_blank">I suggested on Tuesday</a> that Central Banks would come to the rescue once again, that happened yesterday as both the BOE and ECB made announcements hinting at more QE this summer. To wit:</p> <ul> <li><strong>BOE: SOME MONETARY POLICY EASING LIKELY OVER SUMMER</strong></li> <li><strong>BOE: MPC WILL DISCUSS FURTHER POLICY INSTRUMENTS IN AUG</strong></li> <li><strong>ECB: TO WEIGH LOOSER QE RULES AS BREXIT DEPLETES ASSET POOL</strong></li> <li><strong>ECB: OPTIONS TO INCLUDE MOVING AWAY FROM QE CAPITAL KEY</strong></li> <li><strong>ECB: CONCERNED ABOUT SHRINKING POOL OF ELIGIBLE DEBT</strong></li> </ul> <p>For those predicting financial market chaos and mayhem, Central Banks has successfully juiced&nbsp;asset prices erasing the majority of the previous losses.</p> <p><a href="https://realinvestmentadvice.com/technically-speaking-brexit-at-tiffanys/" target="_blank">It is for that reason&nbsp;I stated previously</a>:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><em>&ldquo;There are times in portfolio management where &lsquo;doing nothing&rsquo; is better than &lsquo;doing something.&rsquo; This is one of those times.&rdquo;</em></p> </blockquote> <p>Any action taken over the last two weeks has likely turned out to be wrong. The problem for investors remains that&nbsp;markets have made <em>&ldquo;no progress&rdquo;&nbsp;</em>over the last 13-months. While volatility has increased, returns on assets remain muted which continues to frustrates individuals.</p> <p>Fundamentally and economically there is little cheer about and on a longer-term basis, as shown below, the markets remain in what appears to be a broadening market topping process.</p> <p><a href="https://realinvestmentadvice.com/wp-content/uploads/2016/06/SP500-MarketUpdate-063016-2.png"><img alt="SP500-MarketUpdate-063016-2" class="alignnone size-full wp-image-15770" height="449" src="https://realinvestmentadvice.com/wp-content/uploads/2016/06/SP500-MarketUpdate-063016-2.png" width="600" /></a></p> <p><strong>The question remains whether Central Banks can continue to keep asset prices aloft while the economy and markets go through a recessionary cycle?</strong>&nbsp;Historically, that has never been the case. But then again, we have never had the level of Central Bank interventions currently being witnessed today.</p> <p>Here is your reading list for the weekend.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p style="text-align: left;"><span style="color: #993300;"><em><strong>&ldquo;</strong></em><strong>It&rsquo;s the height of your responsibility to not allow the EU to disintegrate without utilizing all its resources</strong>. Throughout history governments have issued bonds in response to national emergencies, When should the AAA credit of the EU be put to use if not at the moment when <strong>the European Union is in mortal danger</strong>&rdquo; &ndash; George Soros</span></p> </blockquote> <hr /> <h2><strong>BREXIT &ndash; BRELIEF</strong></h2> <ul> <li><strong>Soros: Brexit Has Unleashed Next Crisis</strong>&nbsp;<a href="http://www.zerohedge.com/news/2016-06-30/soros-brexit-has-unleashed-financial-crisis-similar-2008" target="_blank">by Tyler Durden via Zero Hedge</a></li> <li><strong>The Italian Job</strong>&nbsp;<a href="http://dimartinobooth.com/the-italian-job/" target="_blank">by Danielle DiMartino-Booth via Money Strong</a></li> <li><strong>Frightening US Parallels To Brexit</strong> <a href="http://www.thefiscaltimes.com/Columns/2016/06/29/Pushed-Around-and-Left-Out-Frightening-US-Parallels-Brexit" target="_blank">by Liz Peek via Fiscal Times</a></li> <li><strong>Bravo, Brexit!&nbsp;</strong><a href="http://davidstockmanscontracorner.com/bravo-brexit/" target="_blank">by David Stockman via Contra Corner</a></li> <li><strong>Uncertainty Is New Normal&nbsp;</strong><a href="http://www.bloomberg.com/view/articles/2016-06-27/after-brexit-uncertainty-is-the-new-normal-for-investors" target="_blank">by Conor Sen via Bloomberg</a></li> <li><strong>7 Things To Make You Feel Better</strong>&nbsp;<a href="http://time.com/money/4381538/brexit-stock-market-reasons-not-to-panic/?xid=homepage">by Paul Lim via Time/Money</a></li> <li><strong>Brexit, A Rejection Of Globalism</strong>&nbsp;<a href="https://www.theguardian.com/business/2016/jun/26/brexit-is-the-rejection-of-globalisation?CMP=share_btn_fb" target="_blank">by Larry Elliott via The Guardian</a></li> <li><strong>Brexit Fallout Not A Lehman Moment</strong>&nbsp;<a href="http://www.telegraph.co.uk/business/2016/06/26/brexit-fallout-will-not-be-the-lehman-moment-so-many-fear/" target="_blank">by Ben Marlow via The Telegraph</a></li> <li><strong>Brexit REALLY IS A Big Deal</strong>&nbsp;<a href="http://time.com/4383202/brexit-america-fallout-economy-fed/" target="_blank">by Rana Foroohar via Time</a></li> <li><strong>Brexit Impact &amp; Road Ahead</strong><a href="http://blog.pimco.com/2016/06/24/brexit-initial-impact-and-the-road-ahead/" target="_blank">&nbsp;by Mike Amey via Pimco</a></li> <li><strong>How Smart Money Got Brexit Vote Wrong&nbsp;</strong><a href="http://www.strategy-business.com/blog/How-the-Smart-Money-Got-the-Brexit-Vote-Wrong" target="_blank">by Daniel Gross via S+B Blog</a></li> <li><strong>Reaction To Brexit Is Why It Happened&nbsp;</strong><a href="http://www.rollingstone.com/politics/news/the-reaction-to-brexit-is-the-reason-brexit-happened-20160627?page=2" target="_blank">by Matt Taibbi via Rolling Stone</a></li> <li><strong>Brexit: Giant Hoax Or Calm Before The Storm&nbsp;</strong><a href="http://www.telegraph.co.uk/business/2016/06/29/was-brexit-fear-a-giant-hoax-or-is-this-the-calm-before-the-next/" target="_blank">by Ambrose Evans-Pritchard via The Telegraph</a></li> <li><strong>Brelief Rally! More About Yields Than Britain</strong> <a href="http://www.barrons.com/articles/brelief-rally-more-about-low-yields-than-britain-1467239113?mod=rss_barrons_this_week_magazine">by Randall Forsyth via Barron&rsquo;s</a></li> <li><strong>Euro Is Most Serious Threat To EU</strong> <a href="http://econlog.econlib.org/archives/2016/06/could_a_success.html" target="_blank">by Timothy Lee via EconLog</a></li> <li><strong>The Real Lesson From Brexit</strong> <a href="http://econlog.econlib.org/archives/2016/06/could_a_success.html" target="_blank">by Luigi Zingales via ProMarket</a></li> </ul> <hr /> <h2><strong>OTHER THINGS I&rsquo;M READING</strong></h2> <ul> <li><strong><span style="color: #000000;">Oil Still Headed To $10/Barrel</span>&nbsp;</strong><a href="http://www.bloomberg.com/view/articles/2016-06-28/why-oil-is-still-headed-as-low-as-10-a-barrel" target="_blank">by A Gary Shilling via Bloomberg</a></li> <li><strong>Risk Profiles Have Changed</strong>&nbsp;<a href="http://macro-man.blogspot.com/2016/06/asset-market-returns-simple-response-to.html" target="_blank">by Macro Man</a></li> <li><strong>TINA is BS</strong> <a href="http://www.realclearmarkets.com/articles/2016/07/01/why_im_so_aggressively_shorting_bonds_102250.html" target="_blank">by Doug Kass via Real Clear Markets</a></li> <li><strong>10-Point Guide For A Confusing Period</strong> <a href="http://finance.yahoo.com/news/jefferies-richard-handler-brexit-market-volatility-memo-120836957.html" target="_blank">by Julia LaRoche via Yahoo</a></li> <li><strong>Forgotten or&nbsp;Irrelevant&nbsp;Fundamentals&nbsp;</strong><a href="http://blog.gavekalcapital.com/?p=11335" target="_blank">by Jennifer Thomson via GaveKal</a></li> <li><strong>More Important Stuff Than Brexit&nbsp;</strong><a href="http://www.alhambrapartners.com/2016/06/26/bi-weekly-economic-review-25/" target="_blank">by Joe Calhoun via Alhambra Partners</a></li> <li><strong>10M Americans About To Lose Pensions</strong>&nbsp;<a href="http://www.investopedia.com/stock-analysis/062916/are-10-million-americans-about-be-screwed-out-their-pensions-kr-kr.aspx" target="_blank">by Howard Penney via Hedgeye</a></li> <li><strong>Fed Is In Epic Battle With Itself&nbsp;</strong><a href="http://www.bloomberg.com/view/articles/2016-06-29/federal-reserve-is-in-an-epic-battle-with-itself" target="_blank">by Conor Sen via Bloomberg</a></li> <li><strong>Why Public Ignores Economists</strong>&nbsp;<a href="http://www.thefiscaltimes.com/Columns/2016/06/28/Why-Public-Has-Stopped-Paying-Attention-Economists" target="_blank">by Mark Thoma via Fiscal Times</a></li> <li><strong>Calculate The Odds Of Portfolio Disaster&nbsp;</strong><a href="http://www.forbes.com/sites/baldwin/2016/06/27/calculate-the-odds-of-a-portfolio-disaster/#4524179067ea" target="_blank">by William Baldwin via Forbes</a></li> <li><strong>Warning In Interest Rate Fallacy</strong>&nbsp;<a href="http://www.alhambrapartners.com/2016/06/28/the-warning-embedded-within-the-interest-rate-fallacy/" target="_blank">by Jeffrey Snider via Alhambra Partners</a></li> <li><strong>Is The Market In A Bubble Again</strong>&nbsp;<a href="http://money.cnn.com/2016/06/23/investing/market-valuations-fed-bubble/index.html?iid=hp-toplead-dom" target="_blank">by Paul La Monica via CNN Money</a></li> <li><strong>Why You Shouldn&rsquo;t Chase Rally</strong>&nbsp;<a href="http://www.barrons.com/articles/dont-chase-this-rally-weak-outlook-for-stocks-1467314691?mod=rss_barrons_getting_technical" target="_blank">by Michael Kahn via Barron&rsquo;s</a></li> <li><strong>5-Keys To Trading</strong> <a href="http://www.marketwatch.com/story/5-keys-to-a-traders-survival-in-one-handwritten-note-2016-06-29">by Shawn Langlois via Marketwatch</a></li> <li><strong>Bubble In Search Of A Pin</strong>&nbsp;<a href="http://www.hussmanfunds.com/wmc/wmc160627.htm" target="_blank">by John Hussman via Hussman Funds</a></li> <li><strong>Fed Wrong About Natural Rates</strong>&nbsp;<a href="https://mises.org/blog/fed-and-bernanke-are-wrong-about-natural-interest-rate" target="_blank">by Joseph Salerno via Mises</a></li> <li><strong>Price/Sales Ratio: Another Nail In The Coffin&nbsp;</strong><a href="https://realinvestmentadvice.com/price-to-sales-ratio-another-nail-in-the-coffin/" target="_blank">by Michael Lebowitz via RIA&nbsp;</a></li> <li><strong>The Hindenberg Moment&nbsp;</strong><a href="http://jlfmi.tumblr.com/post/146748653865/the-junkie-market-too-many-highs-and-lows" target="_blank">by Dana Lyons via Tumblr</a></li> <li><strong><span style="color: #000000;">Talking Macro Risks W/ Investors Podcasts</span>&nbsp;</strong><a href="https://www.thefelderreport.com/2016/06/13/talking-macro-risks-with-the-investors-podcast/" target="_blank">by&nbsp;Jesse Felder via The Felder Report</a></li> </ul> <hr /> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div> <p class="slide-title"><em><span style="color: #993300;"><strong>&ldquo;There is nothing riskier than the widespread perception that there is no risk.&rdquo; &nbsp;<span style="color: #000000;">&ndash;</span></strong><span style="color: #000000;">&nbsp;Howard Marks</span></span></em></p> </blockquote> <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="712" height="438" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20160701_ria.jpg?1467399091" /> </div> </div> </div> http://www.zerohedge.com/news/2016-07-01/weekend-reading-bre-lief#comments B+ BOE Central Banks Doug Kass European Union Evans-Pritchard George Soros Howard Marks John Hussman Lehman Matt Taibbi Monetary Policy New Normal Smart Money Tyler Durden Volatility Fri, 01 Jul 2016 20:30:00 +0000 Tyler Durden 564943 at http://www.zerohedge.com Oil Market Structure (Video) http://www.zerohedge.com/news/2016-07-01/oil-market-structure-video <p>By <a href="http://www.econmatters.com/search/label/EconMatters"><span style="color: #f24024;">EconMatters</span></a> </p> <p><em><br /></em> </p> <div class="separator" style="clear: both; text-align: center;"><a title="Open in new window" class="external" href="https://1.bp.blogspot.com/-W66-Txv3Fqg/V3bLkQ8DgUI/AAAAAAAAK6w/vK0FgXl5hykZmLnw8cLgm3mGsUTSsM1jgCLcB/s1600/trader-4.jpg" style="margin-left: 1em; margin-right: 1em;" target="_blank"><img src="https://1.bp.blogspot.com/-W66-Txv3Fqg/V3bLkQ8DgUI/AAAAAAAAK6w/vK0FgXl5hykZmLnw8cLgm3mGsUTSsM1jgCLcB/s400/trader-4.jpg" width="400" height="300" border="0" /></a></div> <p> Always avoid the last 45 minutes of the "Pit Close" in the Oil Market, unless you have reached the Master`s skill level as a Oil Trader, and even then you better be on your A-Game as a Trader. Institutional Traders often close out or initiate new positions on the last 5-minute bar of the "Pit Trading Session" which often results in large relative volume to overall market liquidity dynamics and leads to explosive spikes in Oil at the close (1:30 CST).</p> <p></p> <div class="separator" style="clear: both; text-align: center;"><iframe src="https://www.youtube.com/embed/H2CBd__jxX8?feature=player_embedded" width="320" height="266" frameborder="0"></iframe></div> <p> © <a href="http://www.econmatters.com/" target="_blank"><span style="color: #f24024;">EconMatters</span></a> All Rights Reserved | <a title="Open in new window" class="external" href="http://www.facebook.com/EconMatters" target="_blank"><span style="color: #f24024;">Facebook</span></a> | <a title="Open in new window" class="external" href="http://twitter.com/#!/EconMatters" target="_blank"><span style="color: #f24024;">Twitter</span></a> | <a title="Open in new window" class="external" href="http://www.youtube.com/c/Econmatters" target="_blank"><span style="color: #f24024;">YouTube</span></a> | <a title="Open in new window" class="external" href="http://feedburner.google.com/fb/a/mailverify?uri=EconForecast" target="_blank"><span style="color: #f24024;">Email Digest</span></a> | <a title="Open in new window" class="external" href="http://astore.amazon.com/econforecast-20?_encoding=UTF8&amp;node=80" target="_blank"><span style="color: #f24024;">Kindle</span></a><strong>&nbsp;</strong><em>&nbsp;</em><span style="text-decoration: underline;">&nbsp;</span></p> http://www.zerohedge.com/news/2016-07-01/oil-market-structure-video#comments Twitter Twitter Fri, 01 Jul 2016 20:26:35 +0000 EconMatters 564952 at http://www.zerohedge.com Why Trump Is Routing The 'Free Traders' http://www.zerohedge.com/news/2016-07-01/why-trump-routing-free-traders <p><a href="http://buchanan.org/blog/trump-routing-free-traders-125393"><em>Submitted by Patrick Buchanan via Buchanan.org,</em></a></p> <p>In Tuesday&rsquo;s <a href="https://www.donaldjtrump.com/" target="_blank"><strong>indictment of free trade as virtual economic treason</strong></a>, The Donald has really set the cat down among the pigeons.</p> <p>For, in denouncing NAFTA, the WTO, MFN for China and the Trans-Pacific Partnership, all backed by Bush I and II, Mitt Romney and Paul Ryan, Trump is all but calling his own party leaders dunderheads and losers.</p> <p><strong>And he seems to be winning the argument.</strong></p> <p>As <u><strong>he calls for the repudiation of &ldquo;globalism&rdquo; and a return to &ldquo;Americanism,&rdquo; </strong></u>a Republican Congress renders itself mute on whether it will even vote on the TPP this year.</p> <p><strong>On trade, Bernie Sanders is closer to Trump.</strong> Even Hillary Clinton has begun to renounce a TPP she once called the &ldquo;gold standard&rdquo; of trade deals.</p> <p>Where have all the troubadours of free trade gone? Why do economic patriots seem ascendant? Is this like the Cold War, where the other side gets up and goes home?</p> <p>Answer. As Trump pointed out in Monessen in the Mon Valley of Pennsylvania, <u><strong>the returns from free trade are in, and the results are rotten.</strong></u></p> <p>Since Bush I, we have run $12 trillion in trade deficits, $4 trillion with China. Once a Maoist dump, China has become the greatest manufacturing power on earth. Meanwhile, the U.S. has lost 50,000 factories and a third of its manufacturing jobs.</p> <p><em><strong>Trump is going to start a &ldquo;trade war,&rdquo; wail the critics.</strong></em></p> <p>But the damage wreaked upon U.S. industry by free traders already rivals what Arthur &ldquo;Bomber&rdquo; Harris did for German industry in the Ruhr.</p> <p><u><em><strong>In recent decades, every major U.S. trade partner &mdash; China, Japan, Canada, Mexico, EU &mdash; has run annual trade surpluses at our expense. How do 40 years of trade deficits in goods, run by a nation that rarely ran one for a century before, make us stronger or wealthier?</strong></em></u></p> <p><u><strong>Or is what is best for the world now more important than what is best for America?</strong></u></p> <p>And here we come to the heart of the argument.</p> <p>Washington, Hamilton, and Henry Clay, father of the &ldquo;American System,&rdquo; and Lincoln and every Republican president up to Eisenhower, crafted trade policies to promote manufacturing to grow the wealth of the USA.</p> <p><strong>They were patriots not globalists.</strong></p> <p>They knew that America&rsquo;s political independence required economic independence of all other nations. They wanted to build an economy where Americans would cut their bonds to foreign lands and come to rely upon one another for the needs and necessities of their national life. They sought to make us independent, so that we could not be dragged by economic ties into the inevitable wars of the Old World.</p> <p>And they succeeded magnificently.</p> <p>Britain, which embraced free trade in the 1840s, became so reliant on imports that a few dozen German submarines almost knocked her out of World War I. Protectionist America had to come pull her chestnuts out of the fire.</p> <p><strong>Free trade ideology is not America-made.</strong> It is an alien faith, a cargo cult, smuggled in from the old continent, the work of men Edmund Burke called &ldquo;sophisters, economists, and calculators.&rdquo;</p> <p>David Ricardo, James and John Stuart Mill, Richard Cobden, all chatterers and scribblers, none of whom ever built a great nation, declared free trade to be the new New Testament, the salvation of mankind.</p> <p>These men in whose souls the old faith was dying seized on a utopian belief that world government and free trade would be the salvation of mankind. The Economist magazine was founded to preach the heresy.</p> <p><strong>Before the modern era, Americans never bought into it. But now, our elites have. And, undeniably, there are beneficiaries to free trade.</strong></p> <p>There are first the owners, operators and shareholders of companies who, to be rid of high-wage American labor, moved production to China or Mexico or where the costs are lower and regulations near nonexistent.</p> <p>Transnational companies, their K Street lobbyists, and media that survive on their advertising dollars, are the biggest boosters of free trade, as they are the biggest beneficiaries.</p> <p>Consumers, too, at least initially, see more products down at the mall, selling at lower prices. Cheap consumer goods are the bribes free traders proffer to patriots to sell out their country and countrymen to capitalists who have no country.</p> <p><strong>But we are not simply consumers. We are Americans. We are fellow citizens. We are neighbors. We have duties to one another.</strong></p> <p>When a factory shuts down and a town begins to die, workers are laid off. The local tax base shrinks, education and social services are cut. Folks go on unemployment and food stamps. We all pay for that.</p> <p>Wives go to work and kids come home from school to empty houses, and families break up, and move away.<u><strong> Social disintegration follows.</strong></u></p> <p><strong>&ldquo;Creative destruction&rdquo; is the antiseptic term free traders use to describe what they have done and are doing to the America we grew up in.</strong></p> <p><em>Southeast of the old Steel City, in the Mon Valley of Pennsylvania, where my mother and her six brothers and her sister grew up, folks describe what happened more poignantly and graphically.</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="173" height="151" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20160701_free.jpg?1467398829" /> </div> </div> </div> http://www.zerohedge.com/news/2016-07-01/why-trump-routing-free-traders#comments Bernie Sanders China Japan Mexico None The Economist Trade War Unemployment Fri, 01 Jul 2016 19:50:00 +0000 Tyler Durden 564945 at http://www.zerohedge.com