by Zero Hedge - July 22nd, 2016 11:39 pm
By the SRSrocco Report,
The U.S. financial system continues to disintegrate even though most Americans hardly notice. The system is being gutted from the inside out… much the same way a chronic disease weakens a patient even before any symptoms are felt. However, we are already experiencing painful symptoms as U.S. economic indicators continue to weaken.
Here are just a few of the recent headlines:
These are just some of the recent headlines pointing to BIG TROUBLE AHEAD. However, the U.S. financial system is in dire shape due to the SUBPRIMING of the entire economy. Today, anyone can purchase a car for little or nothing down and finance it for 84 months. The U.S. housing market is also in the same predicament.
According to the article, Are We Heading for Another Housing Crisis?, published on May 12th this year:
While the economy and home prices have both rebounded, some people have expressed concern we are headed for a repeat housing bubble. As of January 2016, home prices were rising at a rate twice that of inflation, according to the S&P/Case-Shiller U.S. National Home Price Index.
What’s more, Fannie Mae and Freddie Mac have unveiled programs to allow first-time homebuyers to make a purchase with only 3 percent down. Plus, some lenders are using alternate credit scores, which may make loans available to those who can’t get one under conventional credit scoring methods.
So, here we are heading down the same path as we did prior to the 2008 U.S. Investment Banking and Housing collapse. However, this time around its both a Subprime Auto & Housing problem. But, that is just part of the Subprime mess.
As most of you already know, many of the world’s sovereign bonds have negative yields. According to the article, The Financial System Is Breaking Down At An Unimaginable Pace:
by Zero Hedge - July 22nd, 2016 10:00 pm
Artificial measures to stave off a downturn will only make it much worse.
Describing what he called the “crack-up boom”, Ludwig von Mises, the great Austrian economist, said:
The boom cannot continue indefinitely. There are two alternatives. Either the banks continue the credit expansion without restriction and thus cause constantly mounting price increases and an ever-growing orgy of speculation – which, as in all other cases of unlimited inflation, ends in a “crack-up boom” and in a collapse of the money and credit system.
Or the banks stop before this point is reached, voluntarily renounce further credit expansion, and thus bring about the crisis. The depression follows in both instances. (emphasis added)
Although it would be the wiser policy, there is no evidence that the world’s central bankers have the wisdom, either individually or collectively, to select the second alternative. More specifically, they lack “the courage to act” (as Ben Bernanke’s recent, self-congratulatory memoir was so ironically titled); they and their political, big finance and big business cronies are afraid to swallow the “d-pill”, the economic medicine named “depression”.
A good, old-fashioned, pre-1929 depression (like the short-lived, eleven-month depression in 1920-1921, before the days of “modern” central banking and “enlightened” Keynesian intervention “cures”) is the only tonic that can clear out the malinvestment built up since the beginning of the fiat money era. That era began in August of 1971. That is when Richard Nixon, informed that U.S. gold reserves were precipitously declining as a result of President Johnson’s March 1968 action to reduce the gold reserve ratio from 25 percent to zero, “temporarily” suspended the convertibility of the U.S. Dollar into gold. That “temporary” measure has been in effect for forty-five years.
Finally freed from the constraints of what they could not print (i.e., gold), central bankers and their cronies in government, finance and big business were given a license to debase all formerly hard currencies. (Such currencies were “hard”, as they were linked, via the Bretton Woods arrangement, to the dollar, which was backed by gold.) And debase they did: they replaced real investment capital (i.e. actual savings) with cheap, invented credit; they replaced market-derived price (of money) discovery, i.e., market-derived interest rates, with central-bank-proclaimed interest rates.
The actions of
by Zero Hedge - July 22nd, 2016 9:06 pm
Moments ago the worst kept secret in Washington was confirmed when Hillary Clinton announced on Twitter she has picked Virginia senator Tim Kaine as her running mate in an attempt to bolster her support among blue-collar workers and maximize votes from US Latinos dismayed by Donald Trump.
Kaine, 58, a Catholic former governor of Virginia, has described himself in the past as “boring”, and is seen as a safe, moderate if unexciting option, but his everyman roots, executive experience and fluent Spanish are assets that could strengthen the Democratic ticket. By choosing Kaine, 58, a moderate Democrat from a battleground state, Clinton has passed up the chance to pick a left-winger such as senator Elizabeth Warren.
“I am boring,” he said on NBC in June, but then joked, “Boring is the fastest-growing demographic in this country.”
Others on her list presented risks. For instance, some thought an all-women ticket with Sen. Warren could turn off potential backers. Clinton also looked at a political novice, retired Adm. James Stavridis, who is an expert in foreign policy but hasn’t faced the rigors of a political campaign.
According to the FT, Clinton has matched Trump by picking a seasoned elected official who has served as both a governor and a member of Congress. But while the main role of Mike Pence, the Indiana governor chosen by Trump, is to shore up support from conservatives within the Republican party, Kaine will aim to broaden support for Clinton beyond the Democratic base.
“He’s from a working-class background, so he understands the difficulties of blue-collar people and others who don’t have a lot of economic resources,” said Carl Tobias, a University of Richmond law professor who has known Mr Kaine since he taught at the college in the late 1980s.
“He’d be very good with the kind of voters Trump is attracting, but he can also reach out to lawyers and elites.”
Clinton announced the move Friday via Twitter, moments after the tragic shooting in Munich got the “all clear”, and following the Republican National Convention that adjourned with Donald Trump as the GOP nominee. Democrats hoped the announcement would blunt any momentum Trump gained from his convention. Clinton is expected to campaign with Kaine on Saturday in Miami.
“I’m thrilled to announce my running mate, @TimKaine,
by Zero Hedge - July 22nd, 2016 9:00 pm
Hillary Clinton said Monday that Donald Trump, the presumptive Republican nominee, was the most dangerous presidential candidate in the history of the United States. -CNN
Clinton, in an interview with CBS News’ Charlie Rose, believes Donald Trump has “no self-discipline, no self-control, no sense of history, no understanding of the limits of the kind of power that any president should impose upon himself.”
All of this could be applied to Clinton. She is by far the more dangerous of the two candidates.
If Clinton gets into office, she will start or expand wars and through large economic programs will ensure the US’s quasi-depression deepens and that the economy never truly recovers at all (even though it may seem to.)
If things aren’t getting worse, Hillary’s power is not advancing. She is good at making things worse.
As her opponent, Donald Trump’s main recommendation is that he has not been a politician before.
Donald Trump has chiefly been a builder and businessman.
But Hillary has basically been a politician.
Economically speaking, politics is price fixing. Laws are price-fixes, forbidding people from taking certain actions in favor of other ones.
We may agree or disagree with these price-fixes, but they exist and are a function of lawmaking.
Price-fixes always distort and degrade economies. The more laws you have, the more price-fixing and the more degradation.
We’ve often argued for private justice for instance in which individuals work out their own civil and criminal differences.
The less price-fixing (state control), the better.
The modern state – with its massive economic, political and judicial interference – is already well on its way to toppling.
Hillary Clinton has done well in the current system. She and her husband have built a gigantic non-profit and reportedly use it to trade favors with powerful people around the world.
She and Bill are connected at the highest levels and can influence US political and military decisions.
People will pay lots of money to anyone with this sort of clout. But the money does not apparently go directly to the Clintons. Instead it reportedly goes to their non-profit, so it does not seem as if the Clintons are accepting payments for their “help.”
How well is this non-profit run? Here, from an April 2015 New York Post
by Chart School - July 22nd, 2016 8:32 pm
Courtesy of Doug Short’s Advisor Perspectives.
We continue to receive requests for updates to the “Best Stock Market Indicator”, which used to be a regular guest post from John Carlucci. Here is an update of the “Carlucci” indicator along with a summary of John’s explanation on how he uses it.
As John described it: “The $OEXA200R (the percentage of S&P 100 stocks above their 200 DMA) is a technical indicator available on StockCharts.com used to find the “sweet spot” time period in the market when you have the best chance of making money.”
Latest Indicator Position
According to this system, the market is now tradable and a signal to enter and continue all long trading. The OEXA200R is at 84% and all three secondary indicators are positive.
- RSI is POSITIVE (above 50)
- Slow STO is POSITIVE (black line above red line)
- MACD is POSITIVE (black line above red line)
Background on the “Carlucci” Indicator
The OEXA200R is a metric used to assess the state of the market in order to make profitable trading decisions. That is, whether we are in a bull market, a bear market or transitioning from one to the other, as well as market volatility and risk within each of those situations. Historically, it has also given traders a clear early warning signal of impending serious market downturns and later safe re-entry points. While not intended as a day trading tool per se, it can certainly be used as background information by highly speculative traders. Simply put, the OEXA200R gives traders the ability to identify the most opportune conditions within which to execute their various long, short or hold strategies.
Definition of Terms:
“Tradable” refers to the point at which it is most advantageous to enter and continue long trading.
“Un-tradable” refers to the point at which it is advisable to exit all long positions that have not already automatically closed with a trailing stop loss. Please be aware that the OEXA exit points are not always timed at the exact top of any run up, that is impossible to predict. However, a trailing stop will follow the price to the highest point and close out as it falls from there, meaning most positions should have closed before the OEXA exit signal appears and thus should close at a point higher than at the exit…
by Zero Hedge - July 22nd, 2016 8:30 pm
It’s quiet out there, too quiet. With VIX once again testing cycle lows, equity risk is trading below bond risk for the first time since right before markets crashed in August 2015.
S&P 500 implied volatility (VIX) has now been lower than Treasury ETF TLT’s implied volatility for the month of July (since Brexit)…
As FundStrat’s Tom Lee points out in a recent reports, gaps as wide as the current one were followed 68% of the time by S&P 500 Index declines in the next 20 trading days, according to his data… and is clear from above, the last time stocks got this ‘relatively’ complacent, things went south very fast.
by Zero Hedge - July 22nd, 2016 8:00 pm
Given we are eyeballs-deep in the US presidential election cycle, now seems a particularly appropriate time to share some observations on the topic of political propaganda.
As a naturally curious fellow, some years ago – during the Clinton vs. Bush Senior contest – I became interested in the language and techniques used in political campaigning. So much so that I dedicated my daily study period to the topic for the better part of a week.
Since it will be impossible to escape the rhetorical onslaught for the next few months, I thought I might be able to shed some light on what goes on in the battle for your subconscious.
As these insights come from the well-worn pages of playbooks of every politician around the world, I think they are pretty much timeless and cross all borders.
At the core of what I learned in my studies is that the stock and trade of the propagandist revolves around trying to simplify issues, no matter how complex, into easily understood concepts that tap into the existing attitudes and emotions of the target audience.
As an aside, since this topic touches on politics, I may inadvertently gore your ox. For the record, I view most politicians and political parties with disdain, though my disdain is particularly elevated for politicians espousing policies that interfere with my life, liberty, and pursuit of happiness.
With that brief introduction, here are just some of the techniques you can watch for as the election season gains steam.
1. Use stereotypes.
This technique has probably been in active use since humans lived in caves. Successfully drape the opponent in the cloak of a stereotype that triggers a negative image, and you’ve done a good day’s work as a propagandist.
Depending on which side of the political spectrum you swing to, you might trot out old favorites such as “rich fat cat,” or “friend of Wall Street,” or “big-government socialist,” or any one of many handy sterotypes. These stereotypes allow you to instantly tap into powerful underlying prejudices and emotions.
And, for the record, it is a well-documented fact that when we humans are emotionally worked up, we become much more suspectible to follow-on political messaging.
2. Name substitution.
The propagandist will try to label the opponent with an unflattering,
by Chart School - July 22nd, 2016 7:36 pm
Courtesy of Blain.
It was a slow and steady uphill climb Friday as the cool and calm rally continues. The S&P 500 popped 0.46% and the NASDAQ 0.52%. This is the fourth straight week of gains as the Brexit was clearly
a devastating blow an overblown financial media event, as it related to markets. Data out of the UK showed a significant slowdown in the services sector. The services and manufacturing composite index in the U.K. fell to its weakest level since early 2009, to 47.7 from 52.4 in June.
“To me the macro picture is improving here and in Europe,” said Art Hogan, chief market strategist at Wunderlich Securities, adding that low global yields helped this week’s rally. “That whole conception that Brexit’s going to happen and we have to go into recession is disappearing.”
While earnings are deteriorating they are “better than expected”!
Second-quarter profits are on track to show a contraction of 4.2% with more than 100 companies in the S&P 500 already out with quarterly results. That compares with an expected fall in profit of 5.3% in the second quarter.
Fun fact: This 25 year old guy is making $500,000 a year posting random facts on the internet.
We are going to show a bit of a longer term chart of the index of the NASDAQ here for a while so you can see why we are at an important juncture. In blue we have a trendline that connects the highs of last summer and winter and this is the resistance the index has been facing this week.
The Russell 2000 is looking quite a bit like the S&P 500 technically in the short term, with a base building.
A little pop in the NYSE McClellan Oscillator today.
General Electric (GE), often looked at as a bellwether for the overall economy, posted earnings five cents a share above estimates and a 15% rise in second-quarter revenue but a 2% decrease in orders from a year ago. Earnings were helped by its aviation, health care and power businesses, GE said, but the current business environment is being affected…
by Zero Hedge - July 22nd, 2016 7:30 pm
“Peddling fiction“ versus “inconvenient truths“…
Presented with little comment – Grabbed from the front page of CNN – ivory tower ignorance or willful blindness, you decide…
But have no fear, America – While Obama says there’s no “doom and gloom”, Hillary is “monitoring” the situation…
Monitoring the horrific situation in Munich. We stand with our friends in Germany as they work to bring those responsible to justice. -H
— Hillary Clinton (@HillaryClinton) July 22, 2016
by Zero Hedge - July 22nd, 2016 7:00 pm
We taste the spices of Arabia, yet never feel the scorching sun which brings them forth.
-Inscribed around the rotunda of the Jefferson Reading Room in the US Library Congress, above the figure of Commerce
The long-overdue release of the classified 28 pages of a 2002 congressional inquiry into the 9/11 attacks represents the fullest public accounting of evidence that certain Saudi nationals potentially assisted some of the hijackers. Any evidence, however, that the Saudi government may have knowingly provided assistance at this point remains circumstantial and unproven, a perspective shared by a 2005 FBI-CIA memo, which was released the same day as the 28 pages. Former Senator Bob Graham, who was a member of the congressional inquiry, along with Terry Strada, the national chairwoman for 9/11 Families United for Justice Against Terrorism, have riposted that the matter of Saudi involvement is long from concluded and that more classified information needs to be issued.
While the 28 pages may provide little closure on how the largest terrorist attack on US soil transpired, its publication is yet another indication that the primacy of Saudi Arabia as irreproachable Middle East ally is in question. The declassification of the 28 pages comes on the heels of other developments that have undermined the carefully manicured image of Saudi Arabia as stalwart and stable ally, such as: the signing of a nuclear accord with Iran in 2015- raising the prospect of increased cooperation with the kingdom’s chief rival; the distribution of a cache of Saudi foreign cables discussing internal matters, which includes monitoring its citizens and attempts to combat critical voices in the media abroad; the unverified court testimony of Zacharias Moussaoui (the “20th hijacker”) detailing potential Saudi governmental involvement in 9/11; a war in Yemen that has caused thousands of civilian deaths and led to a humanitarian crisis, and international concern over the execution of 47 individuals on terrorism charges.
One consequence of these developments is the introduction of bipartisan legislation by members of the U.S. Senate Foreign Relations Committee to curtail American arms support to Saudi Arabia for use in its Yemen campaign. In another case, the U.S. House of Representatives only narrowly