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There are two ways to win, at any game: One is by improving one’s own performance. The other is by weakening the performances by all of one’s competitors. The United States is now relying almost entirely upon the latter type of strategy.

"Does this country need a hug?" Well, Jon, actually, yeah, it kinda did.

August 6th and 9th of 2015 mark the 70th anniversary of the U.S. dropping two atomic bombs on Hiroshima and Nagasaki. This was the first and only time a state used a nuclear device on cities (or civilians) of another state. Some conservative estimates put the immediate death toll of the two bombs at 200,000 people. This is more than the total number of American soldiers killed in the Pacific front of World War II. Since the bombs were dropped, the U.S. government, U.S. high school history texts, and the American public have asserted that dropping the bombs was necessary. But was it?

"I’ve just slogged through all ninety-two pages of Donald Trump’s financial disclosure submission to the Federal Election Commission, and I can’t make heads or tails of it. I cannot tell how much Trump is worth, if anything. His empire, if he has one, is as mysterious as his haircut, and as impervious as his skyscraper in Chicago - a gigantic phallic mirror named after himself."

A study by the Illinois Policy Institute shows just how dramatic the impact of the so-called "welfare effect" can be. In one of the most startling findings for instance, if a single mother raising two children were to accept a pay raise from $12 to $18 per hour, her total resources would fall by nearly 33%.

The chart below shows why a Fed rate hike hike in the coming months virtually assures a recession: in July, wages for non-supervisory workers failed to rise once again, increasing by a paltry 1.8% Y/Y after peaking at 2.0% in late 2014. Worse, the current trend suggest the record lows of 1.3% will be revisited in the coming months.

"What can we do?"

A sample of charts currently on our radar

In an attempt to publicly shame CEOs into lowering their pay, or boost the compensation they pay their employees (because the forces of labor supply and demand apparently no longer work) moments ago, in a 3-2 vote, the SEC approved a rule Wednesday requiring companies to reveal the pay gap between the chief executive officer and their typical worker. The problem: this latest attempt at wealth redistribution will backfire massively, lead to even higher comp for executives, while assuring an even faster collapse for the US middle class.

What many have tacitly known for a long time was finally confirmed overnight when an analysis of Federal Election Commission data by Vocativ and The Daily Beast found that of the 60 or so ultra-rich Americans - aka the mega-donors - who have contributed to both Jeb Bush’s and Hillary Clinton’s federal campaigns, seventeen of those contributors have gone one step further and opened their wallets to fund both Bush’s and Clinton’s 2016 ambitions.

The US and Turkey are set to launch a "comprehensive fight against ISIS" with Turkey's Incirlik airbase as the hub, Ankara says. Other countries "interested in joining" the coalition include Jordan, Qatar, and Saudi Arabia. For its part, Syria has a subtle reminder for everyone involved: "we support any effort to combat Daesh in coordination and consultation with the Syrian government, otherwise it will be a breach of Syrian sovereignty." 

• Turkey says coalition to launch 'comprehensive battle' against Islamic State (Reuters)
• Buffett’s Celebration Tempered by 50th Anniversary Stock Slump (BBG)
• SEC Set to Approve CEO Pay-Gap Disclosure Rule (WSJ)
• Greece wants full bailout, not bridge loan, ruling party says  (Reuters)
• Stocks Rise Fueled by Strong European Corporate Earnings and Chinese Data (WSJ)
• JPMorgan Reclaims Place Among U.S.'s Top 10 Biggest Stocks (BBG)
• Eurozone retail sales fall sharply in June (MW)

Just days after China bans Citadel (and its high frequency trading) from trading Chinese markets, US Treasury and Federal Reserve officials have been forced to admit they "need to consider whether the race for speed, at this already advanced stage, helps or hurts market functioning." As WSJ reports, Fed governor Jerome Powell and Antonio Weiss, a senior counselor to U.S. Treasury Secretary Jacob Lew, said Monday that the government should re-evaluate the structure of U.S. markets in light of recent events. They are growing more concerned about signs that financial markets have grown more volatile with the growth of fast trading. As Weiss concludes, "the constant pursuit to save one more millisecond not only consumes resources potentially better invested elsewhere, but increases the pressure on the plumbing of the system to handle ever-increasing speeds and messaging traffic." The pre-emptive blame-mongery is beginning...

Overly myopic investors/creditors will continue to be confident in various drillers, based on the numbers of initial production (IP) data extrapolations and balance sheets, but will in the near future spend sleepless nights wondering why such good IPs and strong balance sheets produces poor or no profits and/or why they do not fully receive the money lent. Their worries will gradually morph from being focused on return on investment to return of investment. The mysteries created by Nature’s lack of cooperation with the balance sheets will surpass any other existential questions.

"Increasingly concerned about the markets, I’ve taken more aggressive action than in 2007, the last time I soured on the equity markets. Let me explain why and what I’m doing to try to profit from what may lie ahead."