en Deutsche Bank Explains Why Central Banks Are Stuck <p>We have spent a lot of time talking about the unintended consequences of accommodative global central banking policies.&nbsp; Skyrocketing pension liabilities and the numerous corresponding reach for yield/duration trades, which have resulted in several of their own off-shooting market bubbles (in fact we just wrote about how one of the bubbles is bursting just yesterday &quot;<a href="">P2P Meltdown Continues: LoanDepot&#39;s CDO Collapses Just 10 Months After Issuance</a>&quot;), is just one of the many unintended consequences.&nbsp;</p> <p>But, as Deutsche Bank&#39;s European equity strategist, Sebastian Raedler, points out today, even if central banks wanted to steepen the yield curve they likely can&#39;t.&nbsp; Raedler disputes the common explanation that low bond yields are due to discretionary central bank policies and argues instead that the recent fall in bond yields has been due to sustained weak global growth.&nbsp; This suggests low bond yields are not principally due to discretionary central bank policies (which could be reversed at will), but to the weakened global growth picture, to which central banks have only responded by making policy more accommodative.&nbsp; Of course, if Raedler is correct, the question then becomes <strong>why continue with accommodative policies if they&#39;re not driving incremental economic growth but clearly creating detrimental asset bubbles?</strong></p> <p>Raedler argues that global bond yields have fallen with central banking target rates but both have really just followed slowing global economic growth.</p> <p><a href=""><img alt="DB" height="369" src="" width="600" /></a></p> <p>&nbsp;</p> <p>And accomodative policies can&#39;t be removed because expectations for future growth continue to decline.&nbsp;</p> <p><a href=""><img alt="DB" height="376" src="" width="600" /></a></p> <p>&nbsp;</p> <p>Meanwhile, DB points out that despite accommodative policies the US economy has now activated all 4 of their &quot;recession warning indicators&quot; a condition which has resulted in a recession every time it&#39;s occurred over the past 30 years with the exception of 1986.</p> <p><a href=""><img alt="DB" height="381" src="" width="600" /></a></p> <p>&nbsp;</p> <p>But, of course, as we&#39;ve noted many times, <strong>central banks are stuck with their accommodative policies because any efforts to unwind them would result in a simultaneous unwind of the equity bubble they&#39;ve facilitated.</strong></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Central banks are running out of road. They would like to engineer higher nominal bond yields to protect bank profitability. However, without stronger growth and higher inflation expectations, the only way to do so (less QE, faster hikes) would also push up real bond yields. Given that the fall in real bond yields has been a key driver in boosting asset prices (pushing the European P/E 20% above its 10-year average and US HY credit spreads far below the level suggested by fundamentals), a rise in real bond yields would likely lead to a negative re-pricing of global risk assets. This would tighten financial conditions, further weaken growth and force central banks to ease policy again, leading to a renewed fall in nominal bond yields.</p> </blockquote> <p><a href=""><img alt="DB" height="380" src="" width="600" /></a></p> <p>&nbsp;</p> <p>As Raedler points out, equities are more overvalued than at any other point since 1800 with the majority of the valuation premium explained by artificially low bond yields resulting in lower discount rates.</p> <p><a href=""><img alt="DB" height="377" src="" width="600" /></a></p> <p>&nbsp;</p> <p>And, based on the thesis that Central Banks are stuck with their current policies, Raedler concludes that<strong> investors have no choice but to stick with the status quo of buying high dividend &quot;bond proxies&quot; and selling financials.</strong></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Remain cautious on equities: central banks&rsquo; willingness to underwrite low real bond yields has protected asset valuations even as global growth has slowed. Yet, with central banks unwilling to lower bond yields further (because of the impact on financial sector profitability), the upside from this factor is increasingly capped, while slower global growth means downside risk for equities. We maintain our Stoxx 600 year-end target of 325 (5% below current levels).</p> <p>&nbsp;</p> <p>Remain overweight bond proxies: our basket of sustainable dividend payers and real estate should benefit if bond yields remain low due to the dynamics discussed above. Consumer staples should also benefit, though we&rsquo;re concerned about the risk from EM FX exposure (40% of sales), with our FX strategists still seeing downside for the RMB.</p> <p>&nbsp;</p> <p>Financials will likely continue to struggle if bond yields remain low. This should also been a problem for stocks with large pension deficits and Europe&rsquo;s performance relative to global equities, which continues to track bond yields.</p> </blockquote> <p><a href=""><img alt="DB" height="381" src="" width="600" /></a></p> <p>&nbsp;</p> <p>Which, of course, works until it doesn&#39;t.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="1190" height="595" alt="" src="" /> </div> </div> </div> Bond CDO Central Banks Deutsche Bank Meltdown Real estate Recession Yield Curve Tue, 27 Sep 2016 23:35:00 +0000 Tyler Durden 573381 at Don't Blame "Baby Boomers" For Not Retiring - They Can't Afford To! <p><em><a href="">Submitted by Lance Roberts via</a></em></p> <p>In business, the 80/20 rule states that 80% of your business will come from 20% of your customers. <strong>In an economy where more than 2/3rds of the growth rate is driven by consumption, an even bigger imbalance of the “have” and “have not’s” presents a major headwind.</strong></p> <p>I have often written about the disconnect between Wall Street and Main Street. As shown in the chart below, while asset prices were inflated by continued interventions of monetary policy from the Federal Reserve, it only benefited the small portion of the population with assets invested in the market.<strong> Cheap debt, excess liquidity and a buyback spree, led to soaring Wall Street and corporate profits, surging executive compensation and rising incomes for those in the top 10%. Unfortunately, the other 90% known as “Main Street” did not receive many benefits.</strong></p> <p><a href=""><img src="" alt="RIA" width="600" height="378" /></a></p> <p>&nbsp;</p> <p>This divide is clearly seen in various data and survey statistics such as the recent survey from <a href="">National Institute On Retirement Security</a> which showed the typical working-age household has only $2500 in retirement account assets. <strong>Importantly, “baby boomers” who are nearing retirement had an average of just $14,500 saved for their “golden years.”</strong></p> <p><a href=""><img src="" alt="RIA" width="600" height="389" /></a></p> <p>&nbsp;</p> <p>Further evidence of the failure of ongoing Central Bank interventions to spark a broad economic recovery that lifted “all boats” is shown in the chart below. <strong>4-0ut-of-5 working-age households have retirement savings of less than one times their annual income.</strong> This does not bode well for the sustainability of living standards in the “golden years.”</p> <p><a href=""><img src="" alt="RIA" width="600" height="363" /></a></p> <p>&nbsp;</p> <p>Here is the problem that is unfolding for investors going forward. <strong>While the mainstream financial press continues to extol the virtues of investing in the financial markets for the “long-term”, the assumptions are based on historical data that is not likely to repeat itself in the future. </strong></p> <p>Jeff Saut, Liz Ann Sonders, and others have continued to prognosticate the financial markets have entered into the next great “secular” bull market. <strong><a href="">As I have discussed previously</a>, this is not likely to the be case based upon valuations, debt and demographic headwinds that are currently facing the economy.</strong></p> <p><strong>Let’s set aside valuations and look strictly at the main driver of economic growth – the consumer. </strong></p> <p><span style="text-decoration: underline;"><strong>Demographics Don’t Add Up</strong></span><br />&nbsp;<br />One of the big problems for the “secular bull market” story is the transition of a large mass of individuals heading into retirement years from accumulation to spending mode. <strong>The chart below shows the number of elderly versus young in millions in the U.S. through the last OECD survey ending in 2014.</strong></p> <p><a href=""><img src="" alt="RIA" width="600" height="341" /></a></p> <p>&nbsp;</p> <p>The gap between the young and elderly population has shrunk dramatically in recent years as the demographic trends have shifted. Old people are living longer and young people are delaying marriage and children. <strong>This means fewer people paying into a social welfare system, while more or taking out.</strong> Of course, the burden on the social safety net remains the 800-lb gorilla in the room no one wants to talk about. <strong>But with the insolvency of the welfare system looming in less than a decade, I am sure it will become a priority soon enough. </strong></p> <p>Of course, as we will discuss in a moment, the problem is that while the “baby boom” generation may be heading towards retirement years, <strong>there is little indication a large majority of them will be actually retiring</strong>.&nbsp; With a large majority of individuals being dependent on the welfare system in retirement, the burden will fall on those next in line.</p> <p><strong>Welcome to the “sandwich generation” when more individuals will be “sandwiched” between supporting both parents and children in the same household.</strong> It should be no surprise multi-generational households in the U.S. are at their highest levels since the “Great Depression.” </p> <p><a href=""><img src="" alt="RIA" width="600" height="389" /></a></p> <p>&nbsp;</p> <p>Given the sharp declines in fertility rates over the last 30-years, it is not surprising those over the age of 54 is now at its highest level, as a percentage of those between 25 and 54, in history.</p> <p><a href=""><img src="" alt="RIA" width="600" height="341" /></a></p> <p>&nbsp;</p> <p>This demographic problem is not going to be fixed anytime soon and has manifested itself in lower rates of household formations.&nbsp; More importantly, the drag from the elderly on the financial system is going to be a much bigger problem than most currently expect.</p> <p><span style="text-decoration: underline;"><strong>Employment Is A Problem</strong></span><br />&nbsp;<br />But let’s get back to that “secular bull market” theory for a moment. The consumer currently makes up almost 70% of economic growth. More importantly, that consumption is what drives changes in private and fixed investment, imports, and exports all of which feed into the economic growth story. However, in order for the consumer to do their part, they need a “job.” <strong>Consumption can not occur without production coming first. In other words, if you don’t have a J.O.B. – you don’t have a P.A.Y.C.H.E.C.K. with which to spend. </strong></p> <p>Recent employment increases, while encouraging, have been little more than a function of population growth. <strong>As the population grows, incremental demand increases caused by that increase in population will create employment needs in areas most impacted by that population growth. This is why job formation has been primarily focused in retail, service and hospitality areas.</strong></p> <p><a href=""><img src="" alt="RIA" width="600" height="351" /></a></p> <p>&nbsp;</p> <p>The Census Bureau and Bureau of Labor Statistics provide some fairly comprehensive data about employment that can help us understand the current state of labor force participation. <strong>Is it really just an issue of masses of “baby boomers” retiring?&nbsp; Or is it something potentially more structural in nature.</strong></p> <p>Let’s start with the retirement of the boomer generation. <strong>In addition to the survey above, recent <a href="">statistics show</a> the average American is woefully unprepared for retirement.</strong> On average, 40% of American families <strong>are NOT saving for retirement</strong>, and of those who are, it is primarily about one year’s worth of income. Furthermore, important to this particular conversation, <strong>one-fourth of those at retirement age postponed retirement with only 18% being confident of having enough saved for retirement.</strong></p> <p><a href=""><img src="" alt="RIA" width="600" height="167" /></a></p> <p>&nbsp;</p> <p>For the purposes of this analysis, I am going to exclude all of the “seasonal adjustments” that tend to be a focal point of many of the arguments and utilize a simple 12-month average to smooth the non-adjusted data.</p> <p>With 24% of “baby boomers” postponing retirement, due to an inability to retire, it is not surprising <strong>the employment level of individuals OVER the age of 65, as a percent of the working-age population 16 and over, has risen sharply in recent years.</strong></p> <p><a href=""><img src="" alt="RIA" width="600" height="385" /></a></p> <p>&nbsp;</p> <p>This should really come as no surprise as decreases in economic and personal income growth was offset by surges in household debt to sustain the standard of living. <strong>Notice the surge in 65-year and older employment corresponds with the decline of prosperity in the chart below.</strong></p> <p>During the last “secular bull market,” the “consumption function” was not driven by rising wages, higher interest rates, or strong economic growth. In reality, the economy has been in a weakening trend since 1980. <strong>The “illusion” of the last great secular bull market was driven almost entirely by the expansion of credit and financial engineering</strong>. In other words, people used credit to make up the difference between their standard of living and weakening levels of wage growth. <strong>We have now come to the end of that game.</strong></p> <p><a href=""><img src="" alt="RIA" width="600" height="359" /></a></p> <p>&nbsp;</p> <p>The problem with the “secular bull market” thesis currently is solely the inability of the consumer to re-leverage another $11 Trillion to support economic growth. <strong>With corporations having levered back up to historic peaks to fund share buybacks, dividend payouts, and acquisitions, there is likely little fuel in the tank to support another massive leg higher in the equity markets. </strong></p> <p>What seems to be missed by the majority of analysis, in my opinion, is whether the economic viability for the average American has improved? <strong>The fact social benefits as a percentage of real disposable incomes has risen to an all-time record certainly suggests that it has not.</strong></p> <p><a href=""><img src="" alt="RIA" width="600" height="470" /></a></p> <p>&nbsp;</p> <p>It would seem to me this would be a much more salient question considering the importance of the consumer on the economic equation and, ultimately, corporate profits and asset prices.</p> <p>While the Fed has inflated asset prices to the satisfaction of Wall Street, as shown in the first chart above,<strong> it has done little to improve real employment or consumption for the vast majority of Americans.</strong></p> <p>However, my concern is that despite much hope the current breakout of the markets is the beginning of a new secular “bull” market – the economic and fundamental variables suggest that this may not yet be the case. Valuations and sentiment are elevated and interest rates, inflation, wages and savings rates are all at historically low levels. <strong>These are the variables which are normally seen at the end of secular bull market periods rather than the beginning.&nbsp; </strong></p> <p>As stated above, the consumer, the main driver of the economy, will not be able to once again become a significantly larger chunk of the economy than today as the fundamental capacity to re-leverage to similar extremes is no longer available.</p> <p><strong>There is a huge difference between an organically driven secular bull market in stocks supported by underlying economic strength as opposed to an asset price inflation derived from direct liquidity injections. The former is sustainable, the latter is only sustainable as long as the ability to continue to “juice” the markets remain. </strong></p> <p>The last point is key. <strong>Central Bank interventions are finite</strong>. There is a limit to the number of bonds that can be swapped for cash before the credit market seizes entirely. <strong>There is also a limit to the ability of the world to operate within the context of a negative interest rate environment. </strong></p> <p>While stock prices can certainly be driven higher through more global Central Bank interventions, the inability for the economic variables to “replay the tape” of the 80’s and 90’s increases the potential of a rather nasty mean reversion in the future. <strong>However, it is precisely such a reversion that will create the “set up” necessary to start the next great secular bull market.</strong></p> <p><strong>But as was seen at the bottom of the markets in 1942 and 1974, there were few individual investors left to enjoy the beginning of that ride.</strong> In the meantime, stop blaming “baby boomers” for not retiring – <strong>they simply can’t afford to.</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="773" height="554" alt="" src="" /> </div> </div> </div> B+ Bureau of Labor Statistics Census Bureau Demographics Equity Markets Federal Reserve fixed Main Street Mean Reversion Monetary Policy Personal Income Reality recovery Salient Tue, 27 Sep 2016 23:10:00 +0000 Tyler Durden 573429 at SocGen Explains The Recent Surge In Health Care Costs <p>There was one topic prominently missing from last night's debate - Obamacare and soaring US healthcare costs- and with good reason: with most middle-class Americans suffering as a result of surging premiums, and even the Obama administration admitting, if only behind the scenes, that Obamacare needs a major overhaul, why tempt the presidential candidates with a topic that would sour the public's mood about the defender of the status quo on the first debate. </p> <p>After all, anyone who points out all that is wrong with Obama's recovery is "peddling fiction."</p> <p>Unfortunately, its omission from the debate does not mean it is going away. On the contrary, as the following analysis from SocGen shows, what may now be the most important topic for not only the well-being but also the wallet of America's middle class - as well as the presidential debates - is only going to get worse.</p> <p>As SocGen writes, the jump in medical care services this year has been driven "in large part by soaring health insurance premiums, but more recently, both physician and hospital services prices have accelerated. In August, hospital services prices in particular soared, notching their largest increase since October 2015. In short, <strong>rising out-of-pocket payments and perhaps higher insurance reimbursements </strong><strong>could continue to drive the medical care services index higher this year.</strong>" </p> <p>The details:</p> <p>In August, the core CPI climbed by 0.25%, <strong>with about 41% of that increase coming from a 1.0% surge in the cost of medical care, which was driven largely by a 0.9% rise in the medical care services gauge. </strong>Health insurance costs continued to accelerate, rising by 1.1% (the data are only on a not seasonally adjusted basis) in the month and by 9.1% yoy, <strong>the fastest rate of growth since December 2012. </strong>While in recent months rising health costs were mostly the result of health insurance, more recently, and especially in August, other components of the medical care services index have begun to accelerate.</p> <p>Most of the 0.9% jump in medical care services in August was due to a 1.7% increase in the cost of hospital services. H<strong>ospital services accounted for about 46% of the increase in total medical care services, and they accounted for around 19% of the total rise in the core CP</strong>I. That is a hefty contribution from a component that makes up about 2.8% of the core index.</p> <p><a href=""><img src="" width="500" height="186" /></a></p> <p>So what is driving these hospital services costs higher?</p> <p>Like other components of medical care services, the hospital services index measures the cost of providing certain services to patients. That cost includes not only out-of-pocket payments by consumers but reimbursements to hospitals for services provided. Those reimbursements are set by contracts with health insurers. </p> <p>Frankly, it is not clear exactly why the hospital services index surged as much as it did in August, but it may be the case that reimbursements to hospitals accelerated when new contracts were established this year. In fact, those contracts typically go into effect in January or July, so higher reimbursement rates set in July may have filtered into the CPI in August. On a yoy basis, the hospital services index increased 6.2% in August, the fastest rate of growth since May 2014.</p> <p><strong>In addition to higher reimbursements, consumers are paying more out of their own pockets. </strong>A shift to high-deductible health insurance plans in recent years means that <strong>consumers are contributing more to the cost of health care. </strong>According to a recent report by the Kaiser Family Foundation, <strong>approximately 29% of workers are in high-deductible plans, up from 20% two years ago. </strong>Moreover, worker contributions for health insurance for a single individual rose by 5.4% this year compared to a 0.9% drop in 2015. Thus, higher out-ofpocket payments by consumers could also be contributing to the acceleration in medical care services.</p> <p>SocGen also notes that while it may be tempting to dismiss the August increase in hospital services as a temporary blip, data from the PPI also back up the recent jump. In August, the PPI index measuring hospital inpatient costs for privately insured individuals climbed by 1.0%, in line with the CPI’s inpatient index, which registered a&nbsp; 1.1% NSA advance. Meanwhile, the PPI index measuring hospital outpatient prices for those with private insurance jumped by 2.0% in August, somewhat higher than the CPI’s 1.4% NSA advance. Both the PPI and the CPI show noticeable increases in hospital services prices in August.</p> <p><a href=""><img src="" width="500" height="186" /></a></p> <p>Worse, the geographic distribution of the pricing surge shows that some regions were impacted far more than others. <strong>In August, medical care services prices in the South surged by 1.2% NSA</strong>, <strong>the biggest increase in any August since at least 1990. </strong>Medical care services in the South region make up about a third of the national medical care services index, but the 1.2% jump in August made up 54% of the rise in the national medical care services measure. Again, the cause is not certain, but here again the Kaiser Foundation data provide a clue. <strong>Worker contributions to health insurance for a single person increased by 9.3% in 2016 compared to a 10.0% decline last year, so it seems that higher out-of-pocket payments may be in part to blame for the acceleration in the cost of hospital services</strong>.</p> <p>In summary: given the rise in out-of-pocket payments by consumers, <strong>increases in medical care services will continue to push the medical care index higher in the coming months. </strong></p> <p>When? Recall that as <a href="">we reported in May, </a>many consumers won’t see actual insurance rates until the insurance marketplaces open Nov. 1 — a week before they go to the polls. Could the sticker shock from the Obamacare price increase be the real catalyst that forces millions of "undecided" Americans to vote for the candidate who promises to eliminate Obamacare?</p> <p>&nbsp;</p> <p>&nbsp;</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="562" height="421" alt="" src="" /> </div> </div> </div> Core CPI CPI Obama Administration Obamacare recovery SocGen Tue, 27 Sep 2016 22:43:40 +0000 Tyler Durden 573428 at Why There Is Trump <p><a href=""><em>Submitted by Raul Ilargi Meijer via The Automatic Earth blog,</em></a></p> <p><strong>It&rsquo;s over!</strong> The entire model our societies have been based on for at least as long as we ourselves have lived, is over! <strong>That&rsquo;s why there&rsquo;s Trump.</strong></p> <p>There is no growth. There hasn&rsquo;t been any real growth for years. All there is left are empty hollow sunshiny S&amp;P stock market numbers propped up with ultra cheap debt and buybacks, and employment figures that hide untold millions hiding from the labor force. And most of all there&rsquo;s debt, public as well as private, that has served to keep an illusion of growth alive and now increasingly no longer can.</p> <p>These false growth numbers have one purpose only: for the public to keep the incumbent powers that be in their plush seats. But <strong> they could always ever only pull the curtain of Oz over people&rsquo;s eyes for so long, and it&rsquo;s no longer so long. </strong></p> <p><strong>That&rsquo;s what the ascent of Trump means, and Brexit, Le Pen, and all the others. It&rsquo;s over. </strong>What has driven us for all our lives has lost both its direction and its energy.</p> <p>We are smack in the middle of the most important global development in decades, in some respects arguably even in centuries, a veritable revolution, which will continue to be the most important factor to shape the world for years to come, and I don&rsquo;t see anybody talking about it. That has me puzzled.</p> <p><strong>The development in question is the end of global economic growth, which will lead inexorably to the end of centralization (including globalization). It will also mean the end of the existence of most, and especially the most powerful, international institutions.</strong></p> <p>In the same way it will be the end of -almost- all traditional political parties, which have ruled their countries for decades and are already today at or near record low support levels (if you&rsquo;re not clear on what&rsquo;s going on, look there, look at Europe!)</p> <p>This is not a matter of what anyone, or any group of people, might want or prefer, it&rsquo;s a matter of &lsquo;forces&rsquo; that are beyond our control, that are bigger and more far-reaching than our mere opinions, even though they may be man-made.</p> <p><strong>Tons of smart and less smart folks are breaking their heads over where Trump and Brexit and Le Pen and all these &lsquo;new&rsquo; and scary things and people and parties originate, and they come up with little but shaky theories about how it&rsquo;s all about older people, and poorer and racist and bigoted people, stupid people, people who never voted, you name it.</strong></p> <p>But nobody seems to really know or understand. Which is odd, because it&rsquo;s not that hard. That is, this all happens because growth is over. And if growth is over, so are expansion and centralization in all the myriad of shapes and forms they come in.</p> <p><strong>Global is gone as a main driving force, pan-European is gone, and whether the United States will stay united is far from a done deal.</strong> We are moving towards a mass movement of dozens of separate countries and states and societies looking inward. All of which are in some form of -impending- trouble or another.</p> <p>What makes the entire situation so hard to grasp for everyone is that nobody wants to acknowledge any of this. Even though tales of often bitter poverty emanate from all the exact same places that Trump and Brexit and Le Pen come from too.</p> <p><u><strong>That the politico-econo-media machine churns out positive growth messages 24/7 goes some way towards explaining the lack of acknowledgement and self-reflection, but only some way. </strong></u>The rest is due to who we ourselves are. We think we deserve eternal growth.</p> <p>And of course it&rsquo;s confusing that the protests against the &lsquo;old regimes&rsquo; and the growth and centralization -first- manifest in the rise of faces and voices who do not reject all of the above offhand. That is to say, the likes of Marine Le Pen, Donald Trump and Nigel Farage may be against more centralization, but none of them has a clue about growth being over. They don&rsquo;t get that part anymore than Hillary or Hollande or Merkel do.</p> <p>So why these people? Look closer and you see that<strong> in the US, UK and France, there is nobody left who used to speak for the &lsquo;poor and poorer&rsquo;. While at the same time, the numbers of poor and poorer increase at a rapid clip. </strong>They just have nowhere left to turn to. There is literally no left left.</p> <p>Dems in the US, Labour in the UK, and Hollande&rsquo;s &lsquo;Socialists&rsquo; in France have all become part of the two-headed monster that is the political center, and that is (held) responsible for the deterioration in people&rsquo;s lives. Moreover, at least for now, the actual left wing may try to stand up in the form of Jeremy Corbyn or Bernie Sanders, but they are both being stangled by the two-headed monster&rsquo;s fake left in their countries and their own parties.</p> <p>Donald Trump, and I say this mere hours after the first debate, may still lose the election, but it doesn&rsquo;t truly matter. He&rsquo;s just the figure head -dare we say bobble head?- for a development, even a revolution, that he doesn&rsquo;t control any more than you and I do. He&rsquo;s got a role to play but he didn&rsquo;t write it.</p> <p><strong>If he wins, his program too, like all the others, will be targeted towards more growth, and there&rsquo;s no such thing available.</strong> And while in a no-growth scenario it&rsquo;ll be a good thing for America to bring jobs back home, as is trump&rsquo;s message, they won&rsquo;t spell anything that even comes close to growth.</p> <p>&lsquo;Leaders&rsquo; such as Trump and Le Pen can only be seen as intermediate figures necessary for nations, and indeed the world, to adapt to an entirely different paradigm. One that is at best based on consolidation, on trying not to lose too much, instead of trying to conquer the world.</p> <p><em><u><strong>But also one that is likely to lead to warfare and mayhem, because nobody&rsquo;s been willing to address even the possibility of no more growth, and therefore everyone will be looking to squeeze growth out of any available place, starting with their neighbors, and the globe&rsquo;s weakest. It&rsquo;s the Roman empire all over again, where the core strangled the periphery ever harder until the Barbarians and the Visigoths decided it was enough and then some.</strong></u></em></p> <p>That is the meaning of Donald Trump, and of Brexit. You&rsquo;re not going to understand these things without taking a few steps back, and without looking at history, and especially without acknowledging the possibility that, in economics, perpetual growth may indeed be what physics has always said it was: an impossible pipedream.</p> <p>Trump has a role to play in this whether he wins the election or not. He&rsquo;s the big red flashing American warning sign that the increase in poverty that has so far been felt only among those who it has hit, will shake the familiar political landscape on its foundations, and that this landscape will never return.</p> <p>Look at European political parties established for decades and you see the exact same thing. Only there you often have other &lsquo;escape valves&rsquo;, because new parties are easier to form and get onto national forums. But it&rsquo;s still the same thing.</p> <p><strong>Centralization, globalization, UN, NATO, IMF, all these &lsquo;principles&rsquo; and organizations will see their influence and support dwindle, and rapidly. It&rsquo;s really over. Debt did it. Or rather, our doomed mission to hide our downfall behind a veil of ever more debt did.</strong></p> <p>And Donald Trump has a role to play in that. <strong>If Hillary wins, it&rsquo;ll only be more, and ever more, and spastically more, attempts to convince everyone that more globalization is the way to go, and that going to war with Putin and sending young Americans into battle in fields lost before they enter is the way of the future.</strong></p> <p>Both will be failures. All we really get to do is try to decide who may be the lesser failure.</p> <p>But anyway, that&rsquo;s where Trump comes from, and he doesn&rsquo;t understand the half of it.<u><strong> Trump is there because everything else failed. And he will fail too, win or lose.</strong></u></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="234" height="153" alt="" src="" /> </div> </div> </div> Bernie Sanders Donald Trump Fail France None Roman Empire Tue, 27 Sep 2016 22:20:00 +0000 Tyler Durden 573427 at This Is What Trump Should Do In The Second Debate <p>Last night&#39;s debate has sparked a tsunami of conversations over who won, who looked more presidential, who coughed more, and who had bigger hands. What is more useful, however, is <strong>what can the candidates learn from this debate. </strong>Here are three readers&#39; comments that summed up perfectly what trump should do in the second debate.</p> <p>&quot;The_Dude&quot; was disappointed but had some useful questions for Trump to ask...</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>Do your homework Donald!&nbsp; This isn&#39;t a game...</strong></p> <p>&nbsp;</p> <p>Does this guy prep at all or is he trying to throw it?</p> <p>&nbsp;</p> <p>Question: Internet play into her hand discussing Russia and you don&#39;t fucking mention her server.</p> <p>&nbsp;</p> <p>Question: Policing...she talks &quot;training&quot; cops...and you don&#39;t raise the issue of Fed overreach into local police forces?</p> <p>&nbsp;</p> <p>Question: Iran..took him 3/4 if his time before mentioning $150B that will be used to build them nukes?</p> <p>&nbsp;</p> <p>Question: Your taxes...hmm...I can show mine. about we discuss the taxes of the Clinton Foundation and misappropriation?</p> <p>&nbsp;</p> <p>Question: Your business bankruptcy...shit happens, let&#39;s talk about how this cunt made $150M without even having a business.</p> <p>&nbsp;</p> <p>I could go on and on. ..WTF!!!!!!!!!</p> <p>&nbsp;</p> <p><em><strong>PS...Donald. next time Lester says anything outside of a question,&nbsp; point out to him that it is not his fucking job.</strong></em></p> </blockquote> <p>But &quot;VinceFostersGhost&quot; offers a less aggressive suggestion of what the Trump casmpaign should do between now and the next debate...</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>Fuck all these skewed polls. The debate didn&#39;t matter, and it didn&#39;t change anyone&#39;s mind. </strong>That said, Hillary was well prepared for Trump, while Trump performed as if didn&#39;t prepare at all. Hillary kept Trump on the defensive all night long. Trump defends his ego against anything that makes him look small, and Hillary used that character flaw against him.</p> <p>&nbsp;</p> <p>Trump should have been hammering the Clintons (that&#39;s right, Hillary and Bill) on putting Wall Street in change of America&#39;s economy, but he spent far too much time defending himself, so he didn&#39;t get that message out. Bernie Sanders proved that going after Hillary&#39;s being in Goldman Sachs&#39; pocket was the most effective way to keep her on the ropes. When Sanders let up on those Wall Street attacks, his campaign, that had been succeeding against all the odds, crashed and burned.</p> <p>&nbsp;</p> <p><strong>Trump needs to paint the Clintons as the tag team that gave the country away to the banksters, and forced 76% of Americans into living a paycheck to paycheck lives.</strong> The Clintons allowed the banksters to steal not just the interest on our savings, but our savings in total, our pensions, our homes, our futures, and our children&#39;s children&#39;s futures. Proving this should not be difficult for Trump to do, if he would just spend more time exposing the Wall Street criminals, that own the Clintons, and less time defending his ego.</p> </blockquote> <p>But &quot;sessinpo&quot; sees the endgame...</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>The country is already lost. </strong>The simple fact is we have a national debt that is unrepayable and <strong>no potus can change that.</strong></p> <p>&nbsp;</p> <p>Even if every current politician were removed, the FRB system were audited and changed, it would not change the fact we have an unrepayable debt and based upon that, a doomed us dollar. So many would agree that thrid world status is inevitable for this nation yet they still think trump can change that. That is not an awake person. That is a person frustrated and desperate. <strong>Some are just wanting trump for spite, to get those corrupt people that have destroyed this nation and I understand that. I want them punished too.</strong></p> <p>&nbsp;</p> <p>But if you are awake, you know where america is heading and you have been preparing no matter who is potus.</p> </blockquote> <p>GOP republicans, unhappy with Trump&#39;s lack of preparedness, quipped what Trump should have hammered Hillary on, <a href="">courtesy of The HIll</a>:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;Trump got off to a good start, but it was obvious he wasn&#39;t prepared,&rdquo; one House Republican who publicly supports Trump told The Hill. &ldquo;His performance was scattered. <strong>He didn&#39;t drive home [questions about Clinton&rsquo;s] honesty and missed great opportunities.&rdquo; </strong></p> <p>&nbsp;</p> <p><strong>&ldquo;He only mentioned her email scandal once,&rdquo; </strong>the GOP lawmaker lamented.</p> <p>&nbsp;</p> <p><strong>&ldquo;There is no better question to be able to pivot on when she completely failed on her own cybersecurity when she was secretary of State,&rdquo; </strong>added Rep. Rodney Davis (R-Ill.). Davis, who backed Trump after he won the nomination, said the businessman should have done a better job prosecuting foreign policy failures that occurred while her husband, Bill Clinton, was president and while she was running the State Department.</p> <p>&nbsp;</p> <p>&ldquo;<strong>If Hillary Clinton is trying to own the successes of the Bill Clinton presidency, she&rsquo;s gonna have to own the failures</strong>,&quot; Davis said. &quot;<strong>And a complete failure was negotiating with North Korea.&rdquo;</strong></p> <p>&nbsp;</p> <p>&ldquo;Those are two points I think [Trump] could have hit and he didn&rsquo;t,&rdquo; Davis continued. &ldquo;<strong>And I think he took things a little too personal and missed a lot of opportunities to make very good debate points that could have scored him much higher in the eyes of the American public.&rdquo;&nbsp; </strong></p> <p>&nbsp;</p> <p>&ldquo;I wish that he&rsquo;d say something, stick with it, and then move on to something else instead of saying the same thing over and over and over,&rdquo; Salmon said in an interview Tuesday without giving specific examples. &ldquo;It was just throughout the entire debate.&rdquo;</p> <p>&nbsp;</p> <p>Speaker Paul Ryan who has denounced Trump&rsquo;s comments on Muslims, Mexicans and white supremacists, argued that Trump &ldquo;met expectations&rdquo; and gave a &ldquo;spirited argument&rdquo; against Democrats&rsquo; tired policies.</p> <p>&nbsp;</p> <p>Other Republicans on Capitol Hill argued that their constituents had crowned Trump the winner of Monday&rsquo;s 90-minute debate, regardless of what Beltway pundits were saying. &ldquo;Most of my constituents have said that Trump won based solely on one recurring theme: &lsquo;<strong>You have been there for 30 years and nothing has changed</strong>,&rsquo; &rdquo; Rep. Mark Meadows (R-N.C.), a member of the ultraconservative Freedom Caucus, told The Hill. &ldquo;It expressed their frustration with nothing but talk occurring in Washington, D.C.&quot;</p> </blockquote> <p>Then there was FBR analyst Benjamin Salibury who points out that while <em>birtherism </em>was closely covered last night, key topics were notably missing from the debate:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Mr. Trump questioned the independence of the Federal Reserve in last night&rsquo;s debate, but did seem to support a &ldquo;low for longer&rdquo; interest rate environment. We have argued that a Clinton presidency would allow more consistency among the Fed&#39;s leadership, allowing it to continue accommodative monetary policy&mdash;and viewed as more positive by the market...<strong>The debate was almost as notable for what was not covered as for what was covered: Healthcare, immigration, veterans, labor, and homeland security were not mentioned in any meaningful way.</strong></p> </blockquote> <p>If you have your own opinions of <u><strong>what you would ask the candidates...</strong></u></p> <p><a href=""><img alt="" src="" style="width: 600px; height: 746px;" /></a></p> <p>&nbsp;</p> <p><a href="">Finally we leave it to Dilbert creator Scott Adams</a>, who notes that the most interesting question has to do with what problem both of them were trying to solve with the debate.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>Clinton tried to look healthy, and as I mentioned, I don&rsquo;t think she completely succeeded.</strong></p> <p>&nbsp;</p> <p><strong>But Trump needed to solve exactly one problem: Look less scary. </strong>Trump needed to counter Clinton&rsquo;s successful branding of him as having a bad temperament to the point of being dangerous to the country. Trump accomplished exactly that&hellip;by&hellip;losing the debate.</p> <p>&nbsp;</p> <p><strong>Trump was defensive, and debated poorly at points, but he did not look crazy.</strong> And pundits noticed that he intentionally avoided using his strongest attacks regarding Bill Clinton&rsquo;s scandals. In other words, he showed control. He stayed in the presidential zone under pressure. And in so doing, he solved for his only remaining problem. He looked safer.</p> <p>&nbsp;</p> <p><strong>By tomorrow, no one will remember what either of them said during the debate. </strong>But we will remember how they made us feel.</p> <p>&nbsp;</p> <p><strong><u>Clinton won the debate last night. And while she was doing it, Trump won the election.</u> He had one thing to accomplish &ndash; being less scary &ndash; and he did it.</strong></p> <p>&nbsp;</p> <p><a href="">Read more here...</a></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="744" height="502" alt="" src="" /> </div> </div> </div> Bernie Sanders Federal Reserve goldman sachs Goldman Sachs Iran Monetary Policy National Debt Nomination North Korea Washington D.C. Tue, 27 Sep 2016 22:17:07 +0000 Tyler Durden 573415 at Billionaire Capital Turns Into Ghost Town: "Home Contracts Down 80%", Trophy-Cars Pile Up In Showrooms <p>It used to be that a quick walk around downtown Greenwich could pass for an exotic car show but those days seem to be coming to an end as hedge fund returns have suffered and, as one jewelry store owner points out, <strong>"one doesn’t want to become the next episode of ‘Billions.’”</strong>&nbsp; </p> <p><img src="" alt="Greenwich" width="600" height="338" /></p> <p>&nbsp;</p> <p>As recently pointed out by <a href="">Bloomberg</a>, Greenwich has long been one of the most prosperous communities in America with <strong>one out of every $10 in hedge funds in the country being managed there</strong> by the most elite funds like Viking Global, AQR and Steven Cohen's Point72. </p> <p>But these days, as hedge fund returns have suffered and banking bonuses have remained stagnant for years, the <strong>trophy items like expensive jewelry and exotic cars are just piling up in luxurious Greenwich showrooms.&nbsp; </strong></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>The lonely $250,000 S-Class coupe at Mercedes-Benz of Greenwich says it all. For six months, it’s been sitting in the showroom</strong>, shimmering in vain.</p> <p>&nbsp;</p> <p>“We haven’t had anyone come in and look at it,” says Joey Licari, a sales consultant at the dealership, looking over his shoulder at the silver beauty. “I feel like normally they would, maybe a few years ago.”</p> <p>&nbsp;</p> <p>Ten-carat diamonds that can cost in the six figures collect dust in stores on the main drag.</p> </blockquote> <p>But exotic cars and jewelry aren't the only items not moving as real estate brokers say that Greenwich mega mansions are sitting on the market for years amid collapsing prices.&nbsp; As head of Starwood Capital Group, Barry Sternlicht, said the rich are being <strong>maddeningly frugal "you can’t give away a house in Greenwich."</strong>&nbsp; In fact, according to Houlihan Lawrence<strong> contracts for homes between $5 million and $5.99 million are down 80%.</strong></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Many continue to try to sell their real estate holdings. As of Sept. 14, there were 46 homes at $10 million or more on the market, <strong>some that have been lingering since 2014</strong>, according to data from Miller Samuel and Douglas Elliman.</p> <p>&nbsp;</p> <p><strong>Back in the day, “everybody in the world wanted five acres and pillars on their driveways, because that’s what you got when you ‘made it,”</strong>’ says Frank Farricker, a principal with Lockwood &amp; Mead Real Estate who’s chairman of the Connecticut Lottery board. <strong>“Now, ‘made it’ means on the waterfront -- on a small lot with a brand-spanking new house.”</strong></p> </blockquote> <p>On example of the tanking Greenwich real estate market is the following 19,773-square-foot mansion once owned by Republican presidential candidate Donald Trump that has been looking for a buyer for nearly two years.&nbsp; It’s now on the market for $45 million or about <strong>17% less than its original listing price of $54 million</strong>.&nbsp; Shockingly the house has garnered limited interest despite a 3,000-bottle chilled wine cellar, a tennis court that converts to a hockey rink and a globe-shaped observatory with a retractable roof and high-powered telescope.</p> <p><img src="" alt="Greenwich" width="600" height="368" /></p> <p>&nbsp;</p> <p>For those interested in something a bit more "affordable", former Citigroup CEO Sandy Weill is also trying to offload his 16,460-square-foot home at $9.9 million, a "bargain" at a nearly <strong>30% discount to the original listing price of $14 million two years ago</strong>.</p> <p><img src="" alt="Greenwich" width="600" height="385" /></p> <p>&nbsp;</p> <p>Of course, new Connecticut tax hikes are part of the problem as several hedge funds have<strong> shut down shop in Greenwich and moved to Florida</strong> where they can take advantage of better weather and cheaper real estate...oh, and a <strong>0% state income rate doesn't hurt either.</strong>&nbsp; </p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>In 2015,<strong> Connecticut boosted the income tax</strong> for individuals making more than $500,000 and couples above $1 million to<strong> 6.99 percent from 6.7 percent</strong>. <strong>Levies on luxury goods rose to 7.75 percent from 7 percent </strong>on cars over $50,000, jewelry over $5,000 and clothing or footwear over $1,000.</p> <p>&nbsp;</p> <p><strong>Sternlicht said at a conference two weeks ago that this was why he relocated to the sunshine state. “We used to have no taxes,”</strong> he said wistfully, recalling Connecticut before it enacted its income tax in 1991.</p> </blockquote> <p>Ah, the Sunshine State, Gorgeous!</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="1227" height="787" alt="" src="" /> </div> </div> </div> Citigroup Donald Trump Florida Mercedes-Benz Real estate Starwood Viking Global Tue, 27 Sep 2016 21:55:00 +0000 Tyler Durden 573401 at Stunning University Of Kansas 'Safe Space' Vs. 'Free Speech' Meeting Caught On Tape <p>Ever wondered just what happens when the immovable object of safe-space-demanding social justice warriors collides with the irresistible force of free-speech-seeking American students? Wonder no longer...</p> <p>On Thursday night protestors at Kansas University (KU) hijacked a <a href="">Young Americans for Freedom (YAF) meeting,</a> reportedly unleashing a virulent tirade against the conservative students, providing a glimpse into the crazy arguments of the far Left.</p> <p><a href="">Their entire confrontation was captured on video...</a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Leftists can be seen screaming obscenities, berating the calm YAF students, shouting about privilege, safe spaces, and micro aggressions, and <strong>threatening to &ldquo;tear this motherf***ing school up on a daily motherf****ing basis.&rdquo;</strong></p> <p>&nbsp;</p> <p><strong>&ldquo;I don&rsquo;t study in the library because I don&rsquo;t feel comfortable with people always wondering what my gender identity is and how I express myself, and I don&rsquo;t feel comfortable being in classrooms where I am supposed to speak as a transhuman and as a queer person as all queer people,&rdquo; </strong>one student whined. &ldquo;That shows you that there is a problem with this institution about there not being&mdash;that these students are not being taught that they are supposed to create safe spaces.&rdquo;</p> <p>&nbsp;</p> <p>Cox, who was also present for the conversation,<strong> declared emphatically that &ldquo;safe spaces are a necessity&rdquo; and making clear that she would brook no dissent on the matter.</strong></p> <p>&nbsp;</p> <p>&ldquo;It&#39;s not a question. It&#39;s not for you to say. It&#39;s not for anyone else to say. Safe spaces are necessary because the institution that we&rsquo;re at is not a safe space in its entirety,&rdquo; she claimed. &ldquo;We have to carve out places and fight for places that we feel safe because not only will we get harassed, we&rsquo;ll be murdered, we&rsquo;ll be all this stuff and discriminated against because we have to do that. It&rsquo;s not because we want to.&rdquo;</p> <p>&nbsp;</p> <p>At one point when KU YAF Chairman Gabe Lepinski referred to the protesters as &ldquo;you guys,&rdquo; one leftist completely exploded, screaming,<strong> &ldquo;Do not call us guys! That is a micro aggression!&rdquo;</strong></p> <p>&nbsp;</p> <p><strong>At another point, one of the protestors broke down when asked about safe spaces, pounding fists on the table and shouting, &ldquo;I am not retreating! I&rsquo;m making myself safe and comfortable&hellip; If I want this space, I can have this space! It&rsquo;s my right to have this space!&rdquo;</strong></p> <p>&nbsp;</p> <p><strong><a href=""><img height="231" src="" width="391" /></a></strong></p> <p>&nbsp;</p> <p>The leftists also repeatedly <strong>referred to the YAF students as &ldquo;white supremacists,&rdquo; scolding them by commenting, &ldquo;You still reap the privilege of the genocide of Native Americans and slavery.&rdquo;</strong></p> <p>&nbsp;</p> <p>The<strong> protestors screamed about &ldquo;white fragility,&rdquo;</strong> their preferred gender pronouns, and not calling illegal immigrants &ldquo;illegal.&rdquo;</p> <p>&nbsp;</p> <p>The incident occurred after students attacked KU YAF Chairman Gabe Lepinski for posting the phrase, &ldquo;Facts don&rsquo;t care about your feelings,&rdquo; in a group promoting leftist campus protests for transgender rights on social media.</p> <p>&nbsp;</p> <p><strong>The protestors left the meeting enraged, screaming obscenities as they walked down the hallway.</strong></p> <p>&nbsp;</p> <h2><span style="text-decoration: underline;">&nbsp;</span></h2> <p><img alt="20151114_crybully" class="aligncenter wp-image-44329 size-large" src="" style="width: 600px; height: 437px;" /></p> </blockquote> <p>Here is the full meeting... <strong>we strongly suggest you put down all sharp objects...</strong></p> <p><iframe frameborder="0" height="315" src="" width="560"></iframe></p> <p>&nbsp;</p> <p>But the final 3 minutes is where it gets really heated as snowflake mentality confronts safe-spaces...</p> <p><iframe frameborder="0" height="315" src="" width="560"></iframe></p> <p>* * *</p> <p><a href="">As we have repeatedly noted, </a>no matter where you go in life, someone will be there to offend you.</p> <p><img alt="111315-RickMcKee2" class="aligncenter wp-image-44339 size-large" src="" style="width: 600px; height: 397px;" /></p> <p>Maybe it&rsquo;s a joke you overheard on vacation, a spat at the office, or a difference of opinion with someone in line at the grocery store. Inevitably, someone will offend you and your values. If you cannot handle that without losing control of your emotions and reverting back to your &ldquo;safe space&rdquo; away from the harmful words of others, then you&rsquo;re best to just stay put at home. <em><strong>Remember, though: if people in the outside world scare you, people on the internet will downright terrify you. It&rsquo;s probably best to just accept these harsh realities of life and go out into the world prepared to confront them wherever they may be waiting.</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="375" height="241" alt="" src="" /> </div> </div> </div> Tue, 27 Sep 2016 21:53:00 +0000 Tyler Durden 573306 at US Bonds, Stocks Rally As Most Systemically Dangerous Bank In The World Collapses <p>It&#39;s probably nothing...</p> <p><a href=""><img height="304" src="" width="600" /></a></p> <p>&nbsp;</p> <p>But hey, Hillary &#39;reportedly&#39; won the debate so buy stocks?</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 339px;" /></a></p> <p>&nbsp;</p> <p>Which reminds us...</p> <p><iframe allowfullscreen="" frameborder="0" height="315" src="" width="560"></iframe></p> <p>&nbsp;</p> <p>Don&#39;t think Deutsche Bank matters?</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 446px;" /></a></p> <p>&nbsp;</p> <p>Post-Fed, Gold was shellacked today (despite very modest move higher in the USD Index) leaving long-bonds the big winner...</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 450px;" /></a></p> <p>&nbsp;</p> <p>Post-Fed, Trannies are outperforming&nbsp; with today&#39;s bounce shifting The Dow positive...</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 394px;" /></a></p> <p>&nbsp;</p> <p>On the day Trannies and Nasdaq were best, all helped by a panic bid around 12ET...</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 369px;" /></a></p> <p>&nbsp;</p> <p>VIX was monkey-hammered to a 12 handle once again to ensure momentum carried stocks higher...</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 365px;" /></a></p> <p>&nbsp;</p> <p>The Treasury curve flattened further today with the short-end unch as long-end yields fell 2-4bps...</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 316px;" /></a></p> <p>&nbsp;</p> <p>The USD Index rose very modestly on the day with CAD weakness offset by Yen strength...</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 316px;" /></a></p> <p>&nbsp;</p> <p>Crude whipsawed around again on headlines from Algiers, but ended near the lows on &#39;no deal&#39; but Silver was worst hit...</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 321px;" /></a></p> <p>&nbsp;</p> <p>Crude back at where it started last week before the API inventory surge (which hits again tonight)</p> <p><a href=""><img alt="" src="" style="width: 600px; height: 313px;" /></a></p> <p>&nbsp;</p> <p><em>Charts: Bloomberg</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="63" alt="" src="" /> </div> </div> </div> Crude Deutsche Bank headlines NASDAQ Yen Tue, 27 Sep 2016 21:52:27 +0000 Tyler Durden 573424 at Why Did Cheryl Mills Require Criminal Immunity? <p><span style="text-decoration: underline;"><em><strong>If there was no evidence of criminal activity, why all the immunity?</strong></em></span></p> <p><a href=""><img alt="" src="" style="width: 600px; height: 334px;" /></a></p> <p>That is the awkward question that <a href="">William McGurn asks in a Wall Street Journal op-ed today</a>...</p> <p><strong>Why did Cheryl Mills require criminal immunity?</strong></p> <p>This is the irksome question hanging over the FBI investigation into <a href="">Hillary Clinton</a>&rsquo;s home-brew server in the wake of news that Ms. Mills was granted immunity for her laptop&rsquo;s contents.</p> <p>Ms. Mills was a top Clinton aide at the State Department who became Mrs. Clinton&rsquo;s lawyer when she left.<strong> She was also a witness, as well as a potential target, in the same FBI investigation into her boss&rsquo;s emails.</strong> The laptop the bureau wanted was one Ms. Mills used in 2014 to sort Clinton emails before deciding which would be turned over to State.</p> <p><u><strong>Here&rsquo;s the problem.</strong></u> There are two ways a witness can get immunity: <strong><em>Either she invokes the Fifth Amendment on the grounds she might incriminate herself, or, worried something on the laptop might expose her to criminal liability, her lawyers reveal what this might be before prosecutors agree to an immunity deal.</em></strong></p> <p>As with so much else in this investigation, the way the laptop was handled was out of the ordinary. Normally, immunity is granted for testimony and interviews. The laptop was evidence. Standard practice would have been for the FBI to get a grand-jury subpoena to compel Ms. Mills to produce it.</p> <p>Andrew McCarthy, a former U.S. attorney, puts it this way:<strong><em> &ldquo;It&rsquo;s like telling a bank robbery suspect, &lsquo;If you turn over that bag, I&rsquo;ll give you immunity as to the contents&rsquo;&mdash;which means if the money you robbed is in there, I can&rsquo;t use it against you.&rdquo;</em></strong></p> <p><u><strong>The Mills immunity, which we learned of on Friday, has unfortunately been overwhelmed by the first Trump-Clinton debate.</strong></u> But the week is still young. On Wednesday, Congress will have an opportunity to put the Mills questions to FBI director James Comey when he appears before the House Judiciary Committee.</p> <p>Back in July, Mr. Comey must have thought he&rsquo;d settled the issue of Mrs. Clinton&rsquo;s emails with a grandstanding press conference in which he asserted &ldquo;no reasonable prosecutor&rdquo; would bring a case against her based on what the FBI had found. In so doing, he effectively wrested the indictment decision (and any hope for political accountability) from the Justice Department. Plainly even his own agents weren&rsquo;t buying, given that Mr. Comey later felt the need to issue an internal memo whining that he wasn&rsquo;t being political.</p> <p>Now we learn about the multiple immunity deals. <strong>Immunity in exchange for information that will help make the case against higher-ups is not unusual. Even so, the Mills deal carries a special stink.</strong></p> <p>To begin with, Ms. Mills was pretty high up herself. As Mrs. Clinton&rsquo;s chief of staff, she was in the thick of operations. In 2012, while working at State, she traveled to New York to interview candidates for a top job at the Clinton Foundation.</p> <p><strong>More disturbing still, not only was Ms. Mills granted immunity for the content on her laptop, she was permitted to act as Mrs. Clinton&rsquo;s attorney even though she herself was also a witness in the investigation.</strong></p> <p>This was allowed in part because she told the FBI she knew nothing of Mrs. Clinton&rsquo;s private server until after she&rsquo;d left the State Department. But this claim is suspect and contradicted by emails that have since emerged. These include one to Huma Abedin asking, &ldquo;hrc email coming back&mdash;is server ok?&rdquo;</p> <p><strong>The special treatment accorded Ms. Mills also reeks on a more fundamental level. </strong>As a rule, the Justice Department is aggressive about going after lawyers for any perceived conflict of interest. This would include, for example, a lawyer who wanted to represent different parties in a trial.</p> <p><u><strong>By giving Ms. Mills a pass to serve as Mrs. Clinton&rsquo;s attorney in an investigation in which she was a material witness, Justice allowed her to shield her communications with Mrs. Clinton under attorney-client privilege. </strong></u>Indeed, Ms. Mills invoked that privilege during her own FBI interview.</p> <p>Imagine Tom Hagen, the mob lawyer played by Robert Duvall in &ldquo;The Godfather,&rdquo; discussing with Don Corleone who was to get whacked&mdash;and then invoking the lawyer-client relationship to hush it up. Think of it this way and you begin to get the picture.</p> <p>For those who think the fix was in from the start, Ms. Mills&rsquo;s presence at Mrs. Clinton&rsquo;s FBI interview, along with nine other people (not including the two FBI agents) is further evidence of a circus. Judiciary Committee members might do well to ask Mr. Comey why Ms. Mills and so many others were allowed to sit in on that interview.</p> <p><u><strong>In short, far from resolving Mrs. Clinton&rsquo;s email case, the handling of the investigation has provoked questions about integrity of both the FBI and Justice. </strong></u>The big question for Mr. Comey remains this:</p> <p><em><u><strong>You publicly said there was no case for criminal charges. So what did Cheryl Mills need immunity for?</strong></u></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="742" height="413" alt="" src="" /> </div> </div> </div> FBI Testimony Wall Street Journal Tue, 27 Sep 2016 21:30:00 +0000 Tyler Durden 573421 at Bond-Stock Correlation Reaches Record High <p><strong>The correlation between bonds and stocks has never been higher.</strong> In a &#39;normal&#39; world, bond prices and stock prices are strongly inversely correlated (red shaded region in lower pane below) but the<strong> last few weeks have seen a massive regime shift</strong> (in fact the biggest shft in history) as the entire financial market becomes captured by central bank idiocy.</p> <p><a href=""><img height="289" src="" width="600" /></a></p> <p>&nbsp;</p> <p>While this is interesting from a historical perspective, the question is &quot;so what?&quot; Well, <strong>the last few times that bonds and stocks have risen or fallen together with such co-dependence has not ended well for stocks...</strong></p> <ul> <li>May 2004 S&amp;P -6.2%</li> <li>March 2005 S&amp;P -8.1%</li> <li>May 2006 S&amp;P -7.8%</li> <li>Sept 2006 S&amp;P No Drop</li> <li><strong>June 2007 S&amp;P -12.2%... then crash</strong></li> </ul> <p>....Post-Crisis</p> <ul> <li>July 2013 S&amp;P -7.9%</li> <li>March 2015 S&amp;P -3.8%</li> <li><strong>Dec 2015 S&amp;P -14.1%</strong></li> </ul> <p>And with month- and quarter-end looming after an exceptional stock move, we suspect rebalancing flows will not be kind to the sentiment-creating stock market...</p> <p><a href=""><img height="320" src="" width="600" /></a></p> <p>but then again, Yellen, Kuroda, and Draghi may have something to say about that - no matter what.</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="95" alt="" src="" /> </div> </div> </div> Bond Tue, 27 Sep 2016 21:05:00 +0000 Tyler Durden 573419 at