While we fully understand that when selling institutionally-priced newsletters to institutions (not retail for one simple reason: lack of "other people's money" to spend) one will have a far more lucrative career as a bull than as a bear simply because insecure (that would be most of them) institutional "strategists" prefer to surround themselves in cognitive bias-reinforcing groupthink just to convince themselves they are right, as the rating-agency era confirmed, one thing we are very confused by is whether David Rosenberg, who famously flipped from bear to bull a little over a year ago (recall David Rosenberg: Here’s why I’m bullish on the US economy), preaching a "wage-inflation" driven bout of economic growth which has not only not materialized, but the 10 Year recently hit 2014 lows, is now back to being a bear.
The White House says President Barack Obama has told congressional leaders he has the authority he needs to take the action against the Islamic State militants that he will outline Wednesday night, according to AP. Following the meeting, the White House said Obama still welcomes action by Congress that would "aid the overall effort" and demonstrate to the world that the United States is united in defeating the threat from the Islamic State. So that's that then... does he also have 'authority' to fund the $5bn (or more) he needs for this crusade?
"...what was once a privilege is now a burden, undermining job growth, pumping up budget and trade deficits and inflating financial bubbles. To get the American economy on track, the government needs to drop its commitment to maintaining the dollar’s reserve-currency status...The privilege of having the world’s reserve currency is one America can no longer afford."
- former Chief Economist and Economic Adviser to Vice President Joe Biden, executive director of the White House Task Force on the Middle Class, and a member of President Obama’s economic team.
We can hear the narrative now... how can Congress turn down President Obama's demands for $5 billion to pay for a 'counter-terrorism' fund that could be used to support operations against Islamic State targets in Iraq and Syria... if they do, are they not supporting terrorism? As The Hill reports, White House press secretary Josh Earnest floated the $5 billion counterterrorism fund as something that “would strengthen the hand of this president and future presidents for dealing with urgent situations like this." We await Wednesday night's unveiling of the long-awaited strategy...
The memory hole is working overtime in the USA zeitgeist these days. Shit happens and a week or so later, it unhappens. So it goes, as the late, great Vonnegut always said. All of these stories have something in common: tons of unanswered questions, which the news media shows no interest whatsoever in following up on. And no consequences. People die, nations rise and fall, money disappears, and everybody forgets. The memory hole is the truest signifier of the times we live in: the Age of Anything Goes and Nothing Matters... but that may be changing.
“I’m beginning a new effort to fix as much of our immigration system as I can on my own, without Congress.... Deputies will identify actions my administration can take on our own, within my existing legal authorities, to do what Congress refuses to do and fix as much of our immigration system as we can. I expect their recommendations before the end of summer and I intend to adopt those recommendations without further delay." - White House, June 30
"Because of the Republicans’ extreme politicization of this issue, the president believes it would be harmful to the policy itself and to the long-term prospects for comprehensive immigration reform to announce administrative action before the elections" - White House, September 6
What does it take to produce prosperity? Property rights – you have to believe that you can control and enjoy what you produce. Stable money – you have to be able to count on the medium of exchange. Freedom of action – you have to be able to go on with your business without too much state intrusion. Meanwhile in the US, the planners… regulators… controllers… meddlers… and zombies – all those who prevent real prosperity – grew bolder and more numerous.
We are not exactly sure why Obama would be "noticeably absent" from the start of this week's NATO-Ukraine commission... but the following could provide some much needed clues (as we noted previously)...
Just when one thought the embarrassment for Obamacare, and its epically flawed website Healthcare.gov, which according to some accounts had over 100 million lines of code, the vast majority of which did not work as it is after all a government project, could not get any worse it just did following a report in the WSJ that the website which is reasonably expected to be the safest in the world (and at a price of over $500 million it should be the safest in the world) considering it holds not only the financial but personal and healthcare data of millions of Americans, has been hacked. According to the WSJ, a hacker broke into part of the HealthCare.gov insurance enrollment website in July and uploaded malicious software. And the punchline: neither the government, nor the security contractor, Blue Canopy Group, found out it had been hacked until two months later.
Bank of England plans to make bondholders and depositors bear the cost of bailing out failing banks has led Moody’s to downgrade its outlook on the UK banking sector.
Heading into the North American open, the bulk of the morning’s price action has been provided by news that Ukrainian President Poroshenko said that he reached an agreement with Russia's Putin on a "permanent cease fire" in Eastern Ukraine's Donbass region. This saw an immediate spike higher in European equities with the DAX future rallying and breaking above its 100DMA seen at 9644.50, thus extending earlier gains that stemmed from the strong performance in Asia-Pacific equities, while the e-mini S&P once again printed a fresh record high. However, these moves staged a partial reversal amid comments from Russia’s Putin that he denied that such an agreement had been reached as Russia is not a party to the Ukraine conflict. In stock specific news, Russian exposed Raiffeisen Bank outperforms Europe (+7%) in reaction to the geopolitical developments, while Hugo Boss have underperformed throughout the session following a share placement which came in at the lower end (-5.3%).
While only 'humanitarian adviser' boots on the ground are present in Iraq (and Syria), Reuters reports that preparations are under way near Ukraine's western border for a joint military exercise this month with more than 1,000 troops from the United States and its allies. As Obama told reporters last week, "that a military solution to this problem is not going to be forthcoming," it seems a little odd 'strategically' to go ahead with the Rapid Trident exercise Sept. 16-26 as a sign of the commitment of NATO states to support non-NATO member Ukraine, entailing the first significant deployment of U.S. and other personnel to Ukraine since the crisis erupted.
As Jon Williams reports, in "Second Message to America" warning governments to back off "this evil alliance with America," the British ISIS 'executioner' says "Obama I'm back..." warns Obama "as your missiles continue to strike our people, our knife will continue to strike necks of your people."
Sotloff asks "why paying price of your interference with my life."
Just hours after the beheading of a 2nd American journalist, The White House has issued a statement:
*U.S. TO SEND ABOUT 350 MILITARY PERSONNEL TO IRAQ: WHITE HOUSE
*WHITE HOUSE SAYS ADDITIONAL FORCES WON'T SERVE IN A COMBAT ROLE
With American non-combat, humanitarian, advisers now being dispersed to the four corners of the world for non-combat, humanitarian, advisory roles; one wonders how long it will be before someone asks President Obama just what these peace-keeping non-combat personnel will be doing in their role "to protect diplomatic facilities and personnel in Baghdad."
Washington’s strategy in Iraq is in shambles, but not just because America’s spanker-in-chief is really a wimp at heart. The problem is far more generic. To wit, the geographic territory of Iraq is not a nation; it is an arbitrary series of lines on a map drawn 100 years ago by dandies in the foreign offices of two fading empires (the British and the French) - which lines encircled numerous tribes, ethnicities and religious confessions which had no interest in sharing a common statehood.