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Is This The Scariest Chart In IBM's History?

Moments ago IBM reported revenues and EPS that both beat expectations and yet the stock is sliding after hours. We may have an idea why, and it has to do with the scariest chart in IBM's history, which we first revealed three months ago and which just got scarier.

It's not this chart of IBM's ninth consecutive decline in revenues, which was scary enough in its own right:


Nor this chart showing the ridiculous amounts of money IBM has spent each quarter on artificially boosting its EPS through stock buybacks, reducing the total number of Big Blue shares to below 1 billion for the first time in years:


Or this chart showing that every dollar of debt IBM has raised since 2012 has gone toward buying back stock and then some:


Nor even this chart showing that the Net Debt of IBM has risen by a ludicrous 55% in the past year to a record $36.8 billion (but... but... record cash on the sidelines)...

It is this chart, indicating that as of Q2, IBM had a higher total debt/equity ratio than just after the Lehman collapse and, after last quarater's already record high ratio.

One of these days even the criminally corrupt and always amusing chimps at S&P and Moody's will finally have to notice what is going on here.

The Reasons We Fight The New World Order

Submitted by Brandon Smith of Alt-Market blog,

“Countless people … will hate the new world order … and will die protesting against it.” H.G. Wells, The New World Order (1940)

Throughout our lives and throughout our culture, we are conditioned to rally around concepts of false division. We are led to believe that Democrats and Republicans are separate and opposing parties, yet they are actually two branches of the same political-control mechanism. We are led to believe that two nations such as the United States and Russia are geopolitical enemies, when, in fact, they are two puppet governments under the dominance of the same international financiers. Finally, we are told that the international bankers themselves are somehow separated by borders and philosophies, when the reality is all central banks answer to a singular authority: the Bank Of International Settlements (BIS).

We are regaled with stories of constant conflict and division. Yet the truth is there is only one battle that matters, only one battle that has ever mattered: the battle between those people who seek to control others and those people who simply wish to be left alone.

The “New World Order” is a concept created not in the minds of “conspiracy theorists” but in the minds of those who seek to control others. These are the self-appointed elite who fancy themselves grandly qualified to determine the destiny of every man, woman and child at the expense of individual freedom and self-determination.  Such elites are often very open about their globalist intentions and ambitions, much like author H.G. Wells, a socialist member of the Fabian Society and friend to the internationalist establishment who put forth his blueprint for world governance in the book quoted above.  In this article, I would like to examine the nature of our war with the elite and why their theories on social engineering are illogical, inadequate and, in many cases, malicious and destructive.

The ‘Greater Good’

I have always found it fascinating that while elitists and NWO champions constantly proclaim that morality is relative and that conscience is not inherent, somehow they are the ones who possess the proper definition of the “greater good.” If “good” is in all cases relative, then wouldn’t the “greater good” also be entirely relative? This inconsistency in their reasoning does not seem to stop them from forcing the masses through propaganda or violence to accept their version of better judgment.

As many psychologists and anthropologists (including Carl Jung and Steven Pinker) have proven over decades of study, moral compass and conscience are not mere products of environment; they are inborn ideals outside of the realm of environmental influences. The greater good is inherently and intuitively felt by most people. Whether one listens to this voice of conscience is up to the individual.

It is no accident that NWO elites end up contradicting themselves by claiming morality to be meaningless while pronouncing THEIR personal morality to be pure. In order to obtain power over others, they must first convince members of the public that they are empty vessels without meaning or direction. They must convince the masses to ignore their inner voice of conscience. Only then will the public sacrifice freedoms to purchase answers they don’t really need from elites who don’t really have them.


I don’t claim to know what ideology would make a perfect society, and I certainly don’t know the exact solutions needed to get there. What I do know, though, is that no one else knows either. Whenever anyone takes a stage to announce that only he has the answers to the world’s problems, I cannot help but be suspicious of his motives. Rarely, if ever, do I hear these people suggest that more liberty and more individualism will make a better future. Instead, their solution always entails less freedom, more control, and more force in order to mold society towards their vision.

The utopia offered by the power elite invariably demands a collectivist mindset that the individual must give up his self-determination and independence so the group can survive and thrive. The problem is no society, culture or collective can exist without the efforts and contributions of individuals. Therefore, the liberty and prosperity of the individual is far more important than the safety or even existence of the group.

The elites understand this fact, which is why they do reserve some individuality (for their own tiny circle).

No matter the guise presented — whether it be socialism, communism, fascism or some amalgamation of each — the goal is always the same: collectivism and slavery for the masses and unrestrained gluttony for the oligarchs.

The Philosophy Of Force

If your idea of a better society is a good and rational one, you should not need to use force in order to get people to accept it. Only intrinsically destructive ideas require the use of force to frighten the public into compliance. The NWO is an idea that relies entirely on force.

Globalization has been consistently sold to us as part of the natural progression of mankind, yet this “natural progression” is always advanced through the use of lies, manipulation, fear and violence. The NWO concept is one of complete centralization, a centralization that cannot be achieved without the use of terror, for who would support the creation of a malicious global power authority unless he was terrorized into doing so?

The only morally acceptable use of force is the use of force to defend against attack. As the NWO relentlessly presses forward its attack on our freedoms, we, the defenders, are labeled “violent extremists” if we refuse to go along quietly. The NWO’s dependency on force to promote its values makes it an inherently flawed methodology derived from ignorance and psychopathy, rather than wisdom and truth.

Dishonesty As Policy

As with the use of violence, the use of lies to achieve success automatically poisons whatever good may have been had through one’s efforts. The elites commonly shrug off this logic by convincing each other that there is such a thing as a “noble lie” (both Saul Alinsky and Leo Strauss, the gatekeepers of the false left/right paradigm, promoted the use of “noble lies”) and that the masses need to be misled so that they can be fooled into doing what is best for themselves and the world. This is, of course, a sociopathic game of self-aggrandizement.

Lies are rarely, if ever, exploited by people who want to make the lives of other men better; lies are used by people who want to make their own lives better at the expense of others. Add to this the egomaniacal assertion that the elites are lying for “our own good” when they are actually only out to elevate their power, and what you get is a stereotypical abusive relationship on a global scale.

Methodologies that have legitimate benefits to mankind deliberately seek truth and do not need to hide behind a veil of misinformation and misdirection. If a methodology requires secrecy, occultism and deceit in order to establish itself in a culture, then it is most likely a negative influence on that culture, not a positive one.

The Hands Of The Few

Why does humanity need a select elite at all? What purpose does this oligarchy really serve? Is centralized power really as efficient and practical as it is painted to be? Or is it actually a hindrance to mankind and an obstacle in our quest to better ourselves? Champions of the NOW argue that global governance is inevitable and that sovereignty in any form is the cause of all our ills. However, I find when I look back at the finer points of history (the points they don’t teach you in college textbooks), the true cause of most of the world’s ills is obviously the existence of elitist groups.

The “efficiency” of centralization is useful only to those at the top of the pyramid, because it generally stands on a vast maze of impassable bureaucracy. It has to. No hyper-condensed authority structure can survive if the citizenry is not made dependent on it. Centralization makes life harder for everyone by removing our ability to provide our own essentials and make our own choices. That is to say, centralization removes all alternative options from the system, until the only easy path left is to bow down to the establishment.

I have never seen a solid example of centralization of power resulting in a better society or happier people. I have also never come across a select group of leaders intelligent enough and compassionate enough to oversee and micromanage the intricate workings of the whole of the Earth. There is no use for the elite, so one must ask why we keep them around?

The Opposite View

Arguing over what should be done about the state of the world is a fruitless endeavor until one considers what should be done about the state of his own life. As long as men are stricken by bias, selfish desire and lack of awareness, they will never be able to determine what is best for other people. The opposing philosophy to the NWO, the philosophy of the Liberty Movement, holds that no one has the right to impose his particular version of a perfect society on anyone else. As soon as someone does, he has committed a grievous attack against individual liberty — an attack that must be answered.

Our answer is simply that the people who want to control others be removed from positions of control and that the people who want to be left alone just be left alone. Association and participation should always be voluntary; otherwise, society loses value. This is not anarchy in the sense that consequence is removed. Rather, the rights of the individual become paramount; and the liberties of the one take precedence over the ever vaporous demands of some abstract group.

The most common retort to this principle of valuing the individual over collective fear is that "someone" must apply and enforce a structure of law and accountability, otherwise, society will "fall apart" into a vortex of madness and chaos.  And perhaps that is true, though self-governance has never been allowed to exist in the history of man without immediate interference from elitist groups, so no one really knows for certain what would happen.

Doing away with overt government control, however, does not mean we do away with "law".  Natural law, as with conscience, exists in our very biological and spiritual being, and does not require a central authority in order to be defined.  Natural law supersedes the laws of men.  In fact, the only man-made laws worth following are derived from natural law.  The primary tenet of natural law is that no one has the right to impede or erode the inherent liberties of other individuals, as long as they also respect natural laws.  The second any person violates the inborn rights of another, he has committed a trespass against natural law.  His trespasses against government authority are secondary, if not meaningless.  When one understands the unassailable existence and preeminence of natural law, he quickly discovers how trivial governments really are.

The ONLY reason for any government to exist is to safeguard individual freedom. Period. The original intent of America’s Founding Fathers was to establish a Nation that fostered this ideal. When government or oligarchy steps outside the bounds of this mandate, it is no longer providing the service it was originally designed for; and it must be dismantled. Unfortunately, it is a universal rule that uncompromising tyranny must often be met with uncompromising revolution.

When a new system arises that cannibalizes the old, enslaves our future, uses aggression against us and mutilates our founding principles in the name of arbitrary progress, that new system must be defied and ultimately destroyed. The NWO ideology represents one of the most egregious crimes against humanity of all time, posing in drag as our greatest hope. It is based, fundamentally, on everything that makes life terrible for the common man and everything our inherent conscience fights against.

We would be far better served as a species if we were to turn our back on the NWO altogether and move swiftly in the opposite direction. Imagine what tomorrow would be like if there were no controllers, no statists, no despots and no philosopher kings. Imagine a tomorrow where people respect the natural-born rights of others. Imagine a tomorrow where people’s irrational fears are not allowed to inhibit other people’s freedoms. Imagine a tomorrow where interactions between citizens and government are rare or nonexistent. Imagine if we could live our days in peace, independently building our own destinies, in which our successes and failures are our own, rather than the property of the collective. It may not be a perfect world, or a utopia, but I suspect it would be a much better place than we live in today.

Was Flight MH-17 Diverted Over Restricted Airspace?

While there are various questions that have already emerged from what was supposed to be Ukraine's "slam dunk" proof confirming Russian rebel involvement in today's MH-17 tragedy, perhaps one just as gaping question emerges when one looks at what is clearly an outlier flight path in today's final, and tragic, departure of the Malaysian Airlines Boeing 777.

Perhaps the best visualization of what the issue is, comes from Vagelis Karmiros who has collated all the recent MH-17 flight paths as tracked by Flightaware and shows that while all ten most recent paths pass safely well south of the Donetsk region, and cross the zone above the Sea of Azov, it was only today's tragic flight that passed straight overhead Donetsk.


Why is the diversion from the traditional flight path and passage over the highlighted zone a concern? Because as the following map from the WSJ shows this is precisely where the restricted airspace is.


So perhaps before coming to "certain" conclusion about the involvement of this rebel or that, the key questions one should ask before casting blame, is why did the pilot divert from his usual flight plan, why did he fly above restricted airspace, and just what, if any instructions, did Kiev air control give the pilot in the minutes before the tragic explosion?

Guest Post: Finding Shelter From The Coming Storms Part 2

More basic suggestions for those who are seeking shelter from the coming storms of global financial crisis and recession (part 1 here).

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

Investing your time wisely and productively is a skill that doesn't require any expenditure of cash to learn.

A Reader Asks: How to Find Shelter from the Coming Storms? prompted some excellent follow-on suggestions for what we can do to survive the coming financial storms.

1. Proximity to fresh water, energy and rail transport. (via longtime correspondent J.B.) Recent media stories on the precarious future of Las Vegas' water supply highlight the value of living in a place with access to sustainable fresh water: The race to stop Las Vegas from running dry.

In rural Hawaii, households with no county-supplied water use catchment systems for fresh water. Even homes in drier climes can collect substantial amounts of water in catchment tanks connected to roof gutters.

There are many ways to make better use of water: install low-flow shower heads, collect rinse water from doing dishes and use this to water plants, etc.

Though we take it for granted energy is equally available everywhere in the U.S., it's worth thinking about where your energy comes from and what you can do to consume less of it. A significant percentage of our energy is consumed in transportation and heating/cooling buildings. Super-insulated homes use much less energy (but may trap radon gas--there are always trade-offs).

The ideal arrangement is living above the shop, so to speak--living close enough to work that the commute is a short walk or bike ride. This was once common; my grandparents lived above their business in Los Angeles in the 1960s and 70s.

2. Learn skills that use local/native/re-used materials. (via longtime correspondent Joe H.:) "One action you might consider adding is to bone up on skills/professions that use native or found materials. I think the guy who can bend up metal and join them to bicycle wheels to form push carts will be in high demand. So will anybody who can piece together rocket stoves or water filtration elements. The list of potential projects is endless.

Reading When Money Dies: The Nightmare of Deficit Spending, Devaluation, and Hyperinflation in Weimar Germany by Adam Fergusson suggests that people who can contribute to the economy without high-cost or "foreign" inputs will do relatively well."

I would add another factor, which is adding skills that earn money in a range of sectors. This diversity of skills is one of the traits of the class I call Mobile Creatives:International Workers' Day (May 1) and the New Class: Mobile Creatives (May 1, 2014)

I use the word mobile not to suggest mobility between physical places (though that is one factor in this class's flexibility) but mobility between sectors, tools and ways of earning income. The key characteristic of the Mobile Creative class is that they live by this credo: trust the network, not the corporation or the state. Those who are dependent on the state should note that every government that has promised social benefits (pensions and healthcare) to its populace is already bankrupt; all that's missing is the confessional moment of recognition.

3. Take control of our own health as much as possible. This boils down to: get lean, get fit and eat only real food. We cannot control all disease or illness, but there is overwhelming scientific evidence that roughly 2/3 of our well-being results from our lifestyle and about 1/3 from our genetic makeup. That means our daily habits are the primary influence on our health and well-being. Change our habits and results follow.

4. In general, control as much as you can. Bemoaning our lack of wealth and power is a cop-out; as correspondent Mots noted: "MANY TINY SOLUTIONS EXIST NOW. Many things can be done NOW because transitioning to local generation of wealth/value occurs in stages/by degree to prepare for collapse: accordingly, EVERY person can do many little things to begin walking down this path NOW." Mots included a list of actions divided into three categories: (requires Adobe Reader) Emergency Preparation, Easy/Partial Local Reliance and Reasonable Long Term.

The essence of neofeudalism is dependence on the state and those who own the debt and a concurrent loss of individual initiative and control. The Status Quo encourages our sense of powerlessness; once people surrender their autonomy and initiative, they're easy to exploit.

The essence of state-cartel capitalism (the dominant form of capitalism) is the state dismantles all social connections and wealth between the state and the atomized individual recipient of state welfare so the individual depends entirely on the state for his/her identity and essentials of life.

Where once existed a complex ecosystem of public life, social capital and networks of reciprocity and economic meaning, now lies a wasteland, stripmined by the state to leave nothing but the state and its ever-growing armies of dependents.

The global corporation profits from this same wasteland: the ideal arrangement to maximize debt-based consumption is an atomized individual who has no identity or self-worth other than consumerist worship of brands and corporate-supplied convenience, in other words, a permanent adolescent driven by insecurity, fear and impulse-driven consumption.

The key is to operate outside these two states of dependency. That means taking control of what you can and extending control over what you don't yet control. People email me that they're too poor, old, etc. to do anything on their own behalf. Yes, poverty and old age make things more difficult. Nobody questions that. No matter how poor or old you may be, you have time. You don't have to buy time; it's there for you to invest or spend as you see fit.

Studies have found that modest exercise builds muscle mass even in 90-year olds. Colonel Sanders was 65 when he started to franchise KFC in earnest. He'd been working at a variety of jobs since the age of 14, so he didn't get the memo that he was too old to do something audacious.

As for being poor: it's a free-to-you investment to invest in learning new skills via donating time/energy to community groups. YouTube University is always open and always free to anyone with an Internet connection or a public library with free PCs and Internet access.

Investing your time wisely and productively is a skill that doesn't require any expenditure of cash to learn. It's a skill that can be acquired at any age.

Ukraine Releases YouTube Clip "Proving" Rebels Shot Down Malaysian Flight MH-17

Almost exactly one year ago, the world was nearly brought to the verge of a global war by proxy involving the US and Russia (and Europe and China) over a staged, false flag YouTube clip "proving" the Assad regime had used toxic gas (gas that was made in Britain as it was later revealed) to kill several hundred civilians in the country's ongoing war against what subsequently turned out to be al-Qaeda funded and trained rebels (and which now are fighting across the border with another former US-puppet state, Iraq). Luckily, back then an all out confrontation was averted in the last minute over what was ultimately nothing but a gambit by Qatar to have its gas pipeline enter Europe and leave Gazprom in the cold (literally and metaphorically).

A year later, it is deja vu all over again, when the same energy and geopolitical tensions (Europe, natural gas, etc) are once again at the frontline, and while the theater of combat may be different, the same key players - Russia and the US - are once again behind the proxy conflict in Ukraine, and where Gazprom is once again the fulcrum party. The only missing link was a YouTube clip which would bring the world to the edge of war again.

Moments ago Ukraine released what may be just that missing "YouTube" link, when it unveiled a 2:23 minute video supposedly proving that "militants of "Bes" group shot down with a Russian anti-aircraft missile a Malaysian Airlines Boeing 777 passenger jet heading from Amsterdam to Kuala Lumpur."

In the clip, Ukraine presents what it alleges are several recorded conversations, first of all between a pro-Russian separatist and his coordinator Vasyl Geranin, who is said to be a colonel of the Main Intelligence Directorate of the General Staff of the Russian Armed Forces. In summary, this conversation talks about the downing of a jet. There is no distinction whether this is a civilian or a military jet, and may well refer to the shot down Ukrainian Su-25 which we reported earlier today was shot down overnight, and which Ukraine at first claimed had been shot down by a Russian warplane, something which Russia promptly denied hours later (and before the Malaysian Airline tragedy happened).

The purported smoking gun is "revealed" in the second section which begins 43 seconds and lasting one minute in between a "Major" and "Grek" who are also allegedly Russian rebels. It is here that the conversation goes into explicit detail describing the contents of the downed airplane, and makes it clear that it is a civilian airplane, describing the civilian carnage, and stopping just why of naming this a Malaysian Airlines flight.

This is the key segment as it explicitly makes it clear that the plane the alleged separatists in the first part were talking about was not the Su-25 but MH 17. The only problem is that there is absolutely no way to confirm who "Major" and "Grek" are, and considering the entire Ukraine civil war has been merely one provocation and counter-provocation after another, explicitly staged in advance by either the CIA on the side of Kiev or the Kremlin on the Russian side, one does have to wonder whether the said two "smoking gun" participants aren't merely two random people speaking Russian and reading off a script?

The clip concludes with another unnamed "Militant" who supposedly is speaking to Mykola Kozitsyn, one of the purported leaders of the Cossacks operating in east Ukraine. The Militant makes it clear to Kozitsyn that it is not a military plane and has "Malaysian Airlines" written on the side. One wonders just where one could find such writing on the side of the crashed and exploded fuselage but that one is for the forensics to decide.

In other words, if indeed all the participants in this YouTube are as they have been presented, then surely this does put the pro-Russian rebel movement in a very unsavory light.


And yet, something here smells very fishy...

First, the Russian version of the clip which was released in parallel, and shown below, there is a major discrepancy in the time stamp, with the English-dubbed version showing the conversation between Major and Grek taking place at 5:11 pm and 5:32 pm, while the original one has it at 4:33 pm, 5:14 pm and 5:32 pm.

Then there is what gmorder has revealed is either a clearly erroneous creation timestamp, or the video was actually uploaded yesterday.

Finally, we clearly have no way of authenticating the recording or the participants, it was just over a month ago, on June 5, when in another attempt to cast blame and discredit the separatists, Ukraine released another trademark YouTube clip seeking to disparage and frame Kozitsyn, titled "Russian Cossack Formations are Responsible For Chaos In Ukraine."

It was released in Ukraine Investigation where the author writes as follows:

Here’s a transcription of the video where one of the Cossack atamans, Kozitsyn Mykola Ivanovych, discredits himself and gives orders to kill people, promises to transfer weapons and supplies on the territory of Ukraine from Russia and mentions that there are people standing above him. From this point goes the video transcription.

The video from June 5 is shown below. 

What is quite striking is that the production quality is identical between the two clips, in everything from the design, to the scene and caption selection to the layout of the dubbing. All done very professionally. The only thing missing in the original clip is that translation which was conveniently added to today's alleged framing of the same Russian forces - after all it is for global consumption - and the very same "cossack" Kozitsyn. A cossack who, the Ukraine defense ministry would want the world to believe, was so stupid he not only knew he was being recorded (as proven explicitly by the pre-existing June 5 recording release, proving every conversation of his was captured "on tape", something he himself most certainly would be aware of), but would also speak unencrypted and on the record - just like Victoria Nuland did back in February when her leaked recording showed it was the US that was the mastermind behind the Ukraine unrest in the first place - going into gruesome detail of just what kind of plane it is that his men had taken down.

Was he really that stupid? Or is this merely yet another false flag provocation from the same "masterminds" that tried to launch another world war to benefit a few billionaire Qatari emirs with nothing but a YouTube clip in the summer of 2013?

Somehow we doubt we will ever know the true answer, but that is largely irrelevant: the opinion of the world as to who is at fault here is most certainly very much made up by now anyway, and if it isn't, the "unbiased" media will certainly help, even it has nothing but repetitive soundbites and speculation presented as fact, in the coming days.

Picturing The Habits Of The Wealthiest People

No one is perfect and there is always room for positive change. If you look on the Internet, you will find a mind-numbing amount of advice from self-proclaimed "success experts" (Google it, we dare you); but when you cut through the fluff, most point towards one key piece of advice...almost all would agree that the single most important thing you have is your time. Life is about balance, too much of anything can be bad and moderation is key (except low rates, printed money, and 100-million-dollar apartments in NYC)...



Source: Visual Capitalist

A Brief Reminder Of Certain Events 100 Years Ago

We thought a reminder of this headline was worthwhile on a day such as this...

The more things change, the more they stay the same. Following today's dramatic geopolitical escalations (which we hope are nothing like an "Archduke Ferdinand" moment); this evening has grown loud with the mainstream business media's deafening roar of BIS-deniers proclaiming that everything bad is priced-in and nothing good is priced-in and how "this is a teflon market." This is nothing new... as no less than The Financial Times proclaims on June 30th 1914 that "stock markets have been scarcely affected by the assassination of the heir to the Austrian throne... there's no evidence that stock holders took fright" as it's priced in (or contained?). It seems things didn't quite work out as 'priced-in'.



h/t @FT

Things were not quite as priced in as 'they' thought...


Israeli Tanks Are Rolling Into Gaza

Residents in the northern Gaza Strip said they could hear the sound of tanks entering from Beit Lahiya as we noted earlier and now the Army has confirmed:


As NY Times reports, the military released a statement saying the goal of the operation was to "establish a reality in which Israeli residents can live in safety and security without continuous indiscriminate terror." Judging by the images and clips below, they are deadly serious.


Raw feed of the invasion from AP:


Hamas response was ominous:

Fawzi Barhoum, a spokesman for Hamas, the Islamic militant group that governs the Gaza Strip, issued a statement calling the invasion “a dangerous step,” and said, referring to Israel, “The occupation will pay its price expensively, and Hamas is ready for confrontation.”

Some images...


@kray_figment @vicenews @VICE this kid was in the beach playing, killed by israel soldiers.

— ccaglak (@ccglk) July 17, 2014

Weekly Wrap - 7/18/2014







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There is no shortage of interesting items to choose from.  The world is unraveling fast and the absurdities just keep piling up.  Here are a few from the last week…


The Wizards of Liberty Street

Big Buyers in a Fool's Paradise

Is the TOP in for European Banks?

Spanish Banks, Lying with Numbers

David Letterman's Top 10 Reasons to vote Democrat

Huckabee and the Truth about the US Border Crisis

The REAL cost of Illegal Immigration

Militarization of the United States

Honest Abe and Three Benedict Arnolds


The Wizards of LIBERTY Street

Most everybody has seen the Wizard of Oz, but most don’t understand that it is a story about the removal of Gold from behind the dollar and the Federal Reserve at that time.  The wizard was supposed to be the Federal Reserve chairman of that time, pulling levers on the economy and managing it from the seat of his pants.  Well, nothing has changed. Fed chair, Yellen, commenting on recent legislation urging the Fed to create some rule like the Taylor rule (mathematical rule to guide interest rate decisions based upon GDP growth and inflation) to guide future interest rate decisions.

"It would be a grave mistake for the Fed to commit to conduct monetary policy according to a mathematical rule," - Janet Yellen

Keep in mind the fed has been flying by the seat of its pants since the Global financial crisis erupted.  Policies previously UNSEEN in history (other than Zimbabwe, the Weimar republic, Argentina and previous hyperinflations) such as UNLIMITED money printing and zero bound interest rates for almost 6 years are illustrations of financial and monetary system on life support.  Money at no cost to the banks and government but priced expensively for the public, and savers who earn nothing on their accumulated life savings.

The very idea that unaccountable mandarins of money need to play with no rules or guidelines should have been halted decades ago.  Now, it is TOO LATE to DO SO.  Normalization of rates will bring down more things than any of us can imagine as the world is awash in financial assets which yield little or nothing.  Malinvestments in the classic Austrian definition.


Big Buyers in a fools paradise

The mortgage markets are dead meat to investors unless the issues are “government guaranteed” and it would appear much of the US treasury market is unattractive to the private sector as well.  Taking a look at treasury issuance since January, the vast majority of them have been hoovered up by central banks, most notably the Federal Reserve, Bank of China and Japan.



Looking closely at the purchases reveals the fed is the dominant buyer.  It has monetized over 50% of US debt since 2009.  Is it for quantitative easing purposes as they say or FUNDING of the DEFICIT?  To me, it is the latter, regardless of the story they say.  In real terms, inflation is probably 9 to 10%.



At 2% on a ten year treasury, you are guaranteed to lose half of the purchasing power if held to maturity and CAPITAL risk is enormous as any backup in rates (higher) will rob investors of virtually all the coupons.  But big buyers can be seen globally as a quick glance at global yields REVEALS:



A SHOCKING picture of NOTHINGNESS when it comes to returns and the United States paying the HIGHEST yields of all.  They are all IOU’s denominated in IOU’s.  The markets are saying that the US creditworthiness is the WEAKEST of them all.  No doubt those spreads will be arbed out so lower rates would appear to be on the horizon.  France, a mathematically insolvent sovereign is paying the lowest rate since Napoleon walked the earth.  Japan yields reflect the government controlled market it is.  Is all of this a picture of unfolding deflation?  In contrast to their levels of indebtedness, you would think, "who are these fools?"  Deficits which except for Germany and Switzerland is SPIRALING HIGHER.



This does not include unfunded liabilities such as pensions and healthcare.  It is obvious they are pricing in the money printing to come for the USA versus the others.  This is also a breathtaking display of willful blindness of the buyers of the insolvency of many of the sovereigns as well.  Officially, this is deemed RISK FREE; in REALITY it will never BE REPAID.  The question becomes what happens when they WAKE UP and FLEE?

Is the TOP in for European Banks?

Last week Portugal’s second largest Bank Espirito Santo parent company missed a bond payment and markets reacted accordingly by tanking.  Regular readers to this missive know that none of the banking problems in the European banking systems has even been remotely addressed.  The next exercise in HOT AIR and PR is currently underway as the European Banking Authority and the ECB work together to boost CONFIDENCE with the AQR (asset quality review).  I can confidently tell you in advance that ALL IS WELL.  Maybe one or two banks will fail to provide the veneer of robust exams but the result was written before the test if past episodes are prologue. 

Europe’s problems have not been addressed: Quoting Allianz SE’s chief Investment officer Max Zimmerer (Europe’s largest insurer managing assets of over $757 BILLION dollars) and owner of PIMCO:

“The fundamental problems are not solved and everybody knows it”…  “The euro crisis in not over”… “Countries are still building their debt piles and that’s storing up trouble for the future”.  “There is only one country where the debt level last year was lower than 2012 and this is a signal the debt crisis can’t be over, only a recognition of the debt crisis has changed”… If the debt levels are not going down in the end we will have a problem, that is for sure.”

Thank you Max for a very candid assessment of what lies ahead and Max is NOBODYS FOOL.  Both the banks and Sovereigns are in worse shape than ever.  The only thing that has recovered is the perception of the health of the nations and banks and for that we can thank the main stream media and morally and fiscally bankrupt politicians throughout the continent.  Add to this the $30 Trillion dollars ($30 million million also known as a lot of ROTTING paper/cabbage) created out of thin air since 2008 desperately seeking a home anywhere a yield can be found (regardless of the risk).  Although the markets MAY NOT BE FOOLED:

That’s a BIG head and shoulders TOP and fully active in technical terms projecting a 15%+ decline from here.  We shall soon see if it is reflective of the CREDIT and SOLVENCY crisis returning which is baked in the cake.  The only question is WHEN WILL PEOPLE WAKE UP?  Is the next wave of insolvency beginning NOW?
Spanish Banks, Lying with numbers.

Throughout the EU the official story is one of recovery in economies and the financial system.  Neither could be further from the truth in my opinion.  It is all HOT AIR courtesy of the MAIN STREAM media and the people that control them.  Supposedly Spain has bitten the bullet and is firmly on the road to recovery financially and economically.  But a close look at the banks REAL condition tell a different story.  It is a story of selective presentation of the numbers and SPIN.  Politicians and bank analysts are pointing to a leveling off of NON PERFORMING loans.  Upon closer inspection their condition are barely improving and probably a result of accounting magic.  Take a look at this chart of the 5 biggest banks showing the headline NON PERFORMING LOANS numbers in dark blue and the real numbers in light blue of NON PERFORMING LOANS and ASSETS combined:

“Nonperforming assets are a better measure of banks' health, some analysts say, because the metric shows the full extent of bad debts the lenders have to work through and provide a more realistic picture of the continued drag on earnings that banks face. It captures foreclosed homes a bank will have to try to sell and repeatedly refinanced loans to property developers or other businesses that are unlikely to be paid.”  -  Wall Street Journal

Merrill lynch reports their estimate of total non-performing assets to be euro 433 billion or $588 billion ($588,000 million) dollars or 40% of Spanish GDP.  Doing the math: Non-performing assets are 22% of their balance sheets and their reserves barely 10%, simply doing the math says they are operating in BANKRUPTCY and negative equity of 12%.  When will the RUNS BEGIN?  Loan growth to the private sector is still CONTRACTING and buying of government debt still BALLOONING.  Recent bond offerings of the banks have been gobbled up just as in all of Europe including GREECE.  It’s all a con game.  Who are these FOOLS?
David Letterman’s top 10 reasons to vote democrat

I received this on the internet and sometimes we all need a good laugh...  Enjoy

#10. I vote Democrat because I love the fact that I can now marry whatever I want. I've decided to marry my German shepherd. 
#9. I vote Democrat because I believe oil companies' profits of 4% on a gallon of gas are obscene, but the government taxing the same gallon at 15% isn't. 
#8. I vote Democrat because I believe the government will do a better job of spending the money I earn than I would. 
#7. I vote Democrat because Freedom of Speech is fine as long as nobody is offended by it. 
#6. I vote Democrat because I'm way too irresponsible to own a gun, and I know that my local police are all I need to protect me from murderers and thieves. I am also thankful that we have a 911 service that gets police to your home in order to identify your body after a home invasion. 
#5. I vote Democrat because I'm not concerned about millions of babies being aborted so long as we keep all death row inmates alive and comfy. 
#4. I vote Democrat because I think illegal aliens have rights to free health care, education, and Social Security benefits, and we should take away Social Security from those who paid into it. 
#3. I vote Democrat because I believe that businesses should not be allowed to make profits for themselves. They need to break even and give the rest away to the government for redistribution as the Democrat Party sees fit. 
#2. I vote Democrat because I believe liberal judges need to rewrite the Constitution every few days to suit fringe kooks who would never get their agendas past the voters. 

… And, the #1 reason I vote Democrat is because I think it's better to pay $billions$ for oil to people who hate us, but not drill our own because it might upset some endangered beetle, gopher, or fish here in America. We don't care about the beetles, gophers, or fish in those other countries. 

Thinking about it should we laugh or cry? Democrats are Marxist socialist wolves working to rob you of your freedom, Heritage and futures.  Please vote.

"The difference between genius and stupidity is that genius has its limits" - Albert Einstein

 Huckabee and the true story of the border crisis

This weekend’s Huckabee on Fox news was a real eye opener.  A gentleman covering the immigration crisis on the Southern US border reported that the government in DC has placed the Border enforcement headquarters almost 50 miles from the border they are assigned to patrol. 

  Then he showed a film illustrating that they have them working by day and stopping at the end of the day until the following morning.  I bet you can guess what happens then?  A flood of immigrants into the US overnight.  The report highlighted the intent of the Central government in DC: FOMENTING  a HUMANITARIAN DISASTER! Then Jon Voight gave a stirring presentation to the president:

Thank you for covering and saying what the main stream media will not...  of course the MSM stand for none of what Huckabee and Voight do.  True patriots.

The REAL cost of Illegal Immigration 

I am a supporter of immigration reform and legal immigration.  My wife is Chinese and received her citizenship on July 4th; she plays by the rules, pays her taxes and works as a manager for a local company.  The president is asking for $3.7 billion dollars for the crisis on the border his executive orders created.  The money he requests does not go to fix the borders, it goes for the health and welfare of the children going forward to the tune of almost $70,000 dollars per person for healthcare, attorneys, resettlement and other benefits.  Well, who wouldn’t come to the US and get paid for coming?   I received the rest of this in an email and decided to pass it along: Many seniors are losing more and more benefits…. They are getting blamed for the country going broke. It's easy to dismiss individual programs that benefit non-citizens until they're put together and this picture emerges. Someone did a lot of research to put together a lot this data. Often these programs are buried within other programs making them difficult to find. I got this via email from a reader.

WHY is the USA BANKRUPT? Read this: We have been hammered with the propaganda that it was the Iraq war and the war on terror that is bankrupting us. I hope the following 14 reasons are forwarded over and over again until they are read so many times that the readers get sick of reading them. I also have included the URL's for verification of all the following facts.



I support immigration reform that gives current illegals a path to legitimacy.  For my wife the legal path took seven years.  Jeb Bush said illegal immigration was an act of love.  For most illegals, this is a true. The children are just part of the story.   The president needs to just move the budget around. The real crime is a government that fails to create the tax and regulatory structures that allow our economy to thrive and grow.  In a growing country there are jobs for everyone.  Growth in anything but debt (who does this benefit? Can you say banksters?) is prohibited by LAW.  This issue like all of them in the US is a MAN MADE disaster courtesy of Washington DC.   

Author’s Note:  In my opinion the greatest manmade disaster and OPPORTUNITY in history is unfolding in every corner of the world.  Are you diversified or operating with EYES WIDE SHUT?  Are you prepared to turn it into opportunity by properly diversifying your portfolio?  Adding absolute return investments which are designed with the potential to thrive (up and down markets) regardless of what unfolds economically or politically?  This is what I do for investors; help them diversify into investments which are created to potentially thrive in the storm.  For a personal consultation, CLICK HERE!

Militarization of the UNITED STATES

For many years now astute observers of the Government have been watching preparations being made for CONFLICT between Government and the Public at large.  The department of homeland security is nothing but a domestic POLICE force similar to that of the GESTAPO of NAZI Germany.  In fact Gestapo in German is the word for homeland security.  Government CEASED to be the servant to citizens many years ago and now the public serves Leviathan government.  It has taken place slowly but surely since Breton woods II removed the shackles of sound money and created the ability for unlimited borrowing.  Kind of like the frog in water as it slowly rises to boiling, that is what is transpiring today to the middle class.  They are being SLOWLY BOILED into a totalitarian system and are so dumbed down they can’t see it.  Whether it is the 1.5 billion bullets that have been purchased by domestic branches of government, Fema camps, marshal law being imposed on Boston during the bombing, BLM police forces, EPA thugs, or RUNAWAY swat teams it all adds up to very disturbing conclusions.  Now we get this little illustration courtesy of Peter Degraaf’s market report (I highly recommend this commentary very insightful and affordable):

The government is preparing for nationwide martial law when the system collapses, it is called Cloward Piven and Rules for Radicals, (look them up and weep as the fingerprints are clear) The only thing holding them back is the guns you keep in your home and the big collapse has not occurred YET.  Support the NRA.  Vote to limit government and support the constitution.  And PRAY to God..  Now for a History lesson.
Honest Abe and three Benedict Arnolds

If you recall Abraham Lincoln fought the CIVIL war, ENDED SLAVERY and was a God fearing, bible toting leader as so many of our founding fathers that went before him.  To him the thought of slavery and one man taking the fruits of another man’s labor by FORCE was repulsive, Immoral and he died ending it.  Now slavery is commonplace in the US as Government takes at the point of a government gun from the hardest working and most prudent among us and redistributes it to those who REFUSE to live prudent, hard working lives and calls it FAIRNESS.  To him the constitution was inspired by God and I believe this also.  Americans have forgotten the lessons of history, the constitution or should I say many were never taught them.  It extends right up to the man in the white house and those who support him.  This image is from the ROLLS report (I highly recommend it), but it says it all about how far we have slid down the slippery slope to socialism, destroyed the constitutional government we once had and are now led by a quasi-SOCIALIST/Marxist DICTATOR:

I have written regularly about the unfolding constitutional crisis and this is a SMALL example of it and the IGNORANCE and lack of Knowledge of the history and laws of the United States among the electorate.  The constitution, bill of rights and the reasons for divided government were taught to me in civics class in grade school, now it is purposely buried to prevent the ultimate uprising which will occur if we are to regain our freedom, a better future for our children and prosperity.  FYI, money printed out of thin air was also PROHIBITED by the constitution but Woodrow Wilson (created the federal reserve monopoly owned by private banks) and Richard Nixon (converted the last vestiges of sound money to worthless IOU’s at Breton woods II) Betrayed us all.

Now the piper must be paid for all of this BETRAYAL of the people by many generations of leaders and the central government in Washington DC with the blood of patriots, Lets pray to God for their success..  A lot of turmoil and social unrest will unfold as the Socialists/Marxist system IMPLODES under its own weight as they have throughout HISTORY.   

In closing, I hope you enjoyed these short vignettes on unfolding topics.  They are a compendium of my daily exercises at our Austrian Blog: that you can have it daily and so much more by stopping by the website.  The latest TedBits Newsletter will be released tomorrow: Useful Idiots and the Something for Nothing Society.  It is a tour de force on the malignancy which has brought about the demise of almost every great empire in history, and the hows and whys of its evolution.  It’s a man made disaster.  Don’t miss it.  Would you like this delivered into your inbox?  Subscriptions for the weekly wrap and Tedbits Austrian Commentary are free at CLICK HERE.

May God Bless you, Ty

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Putin Says "Ukraine Responsible For Crash... Wouldn't Happen If At Peace"

According to Russian news agency Interfax, Vladimir Putin remarked during a government meeting today that:


But ordered Russia's government to all it can to investigate the crash.

Via The Kremlin,

You know that today in the skies over Ukraine was terrible event, a terrible tragedy - killed a civilian plane, 285 people, according to preliminary data, were killed.


We, on behalf of the Russian government and the Russian government to express condolences to the bereaved families, the governments of those countries whose nationals were on that plane. I ask you to honor their memory.


(Moment of silence.)


In this regard, I note that this tragedy would not have happened if it was on this earth peace, in any case, would not be renewed hostilities in the south-east of Ukraine. And, of course, the State over whose territory it happened, is responsible for this terrible tragedy.


I already gave instructions to the military departments that they have all necessary assistance in the investigation of this crime. And also ask the Government of the Russian Federation through the available opportunities civilian agencies to do everything for a thorough investigation of this event. We will do everything - everything depends on us, anyway - that was the objective picture of what happened and our public domain, and the public in Ukraine and all over the world. This is completely unacceptable things, and no one has the right to pass this without the appropriate conclusions and without having to have all of us there, objective information about the incident.

US Intelligence Confirms Malaysian Jet Brought Down By Surface-To-Air Missile

Details are starting to come together. The WSJ reports that US Intelligence detected a surface missile launch and tracked the explosion of the plane.


However, Intelligence Community Divided Over Whether Missile From Russia or E. Ukraine.

As WSJ earlier noted,

If the Malaysia Airlines passenger jet that crashed in eastern Ukraine was shot down — as US Intelligence has now confirmed — attackers would have had to use a sophisticated surface-to-air missile system, not the shoulder-fired weapons that are more accessible and easier to use.


Those weapons, nicknamed manpads, have been used in attacks against commercial aircraft in the past. But their range is much lower than the approximately 30,000-feet cruising altitude at which the Ukrainian official said Malaysia Airlines Flight 17, a Boeing carrying 295 passengers and crew, was flying.

Manpads in use...

Stocks Plunge, Gold/VIX Spike On Worst Airline Tragedy Since 9/11

Despite an initial attempt to rally after the terrible news out of Ukraine hit, stocks were unable to mount any serious BTFD as uncertainty spread. Despite Bullard's best efforts, bond yields crashed lower (over 7bps today) with 10Y at 2.45% near the lowest close in 13 months. Gold prices jumped over $20 (even as the USD Index flatlined - though JPY strengthened notably as risk-off set in). VIX exploded 3.7 vols (its biggest swing - 45% - since Aug 2011). Equity markets cratered into the close as Israel ground invasion news (A White House Lockdown) added to the concerns leaving all US markets red post-payrolls and red post-Yellen. The S&P 500 dropped 1.18% - its biggest drop in 3 months. The Russell 2000 is now down 2.5% year-to-date.

The S&P dropped more than 1% for the first time in over 3 months...




The Day in VIX and S&P 500...


Credit markets getting very nervous...


Post Payrolls...


Post Yellen...




A gentle reminder of how anxious bonds and JPY carry has been... stocks starting to catch down as repo fails disallow the BTFD move...


VIX exploded...



Despite Bullard's best efforts to explain why bonds are in a bubble.. and BofA's Macneil Curry:


MacNeill Curry says 10Y won't drop below 2.40%. Prepare for the 10Y to drop below 2.40%

— zerohedge (@zerohedge) July 17, 2014


Bond yields collapsed..


Gold ansd silver spiked on the MH17 news and oil surged - adding to gains as Israel new hit..


Summing it all up:


We're gonna need moar buybacks...

CNBC thoughtfully opined "This is the teflon stock market... nothing has hurt it in the past... maybe this is a buying opportunity"


Charts: Bloomberg

Bonus Chart: VIX's 14th biggest gain in history...


Today made the list

— Stalingrad & Poorski (@Stalingrad_Poor) July 17, 2014

And Now The White House Is On Lockdown

A day that couldn't get any more bizarre, just did.


Why, was Obama trying to run away?

* * *

Update: It's all good, Obama is not running away:


Snowden: NSA Employees Routinely Pass Around Nude Photos Obtained Via Mass Surveillance

Edward Snowden just told the Guardian:

Snowden …. Made a startling claim that a culture exists within the NSA in which, during surveillance, nude photographs picked up of people in “sexually compromising” situations are routinely passed around.

NSA employees have also been caught using their mass surveillance powers to spy on love interests, such as girlfriends, obsessions or former wives … and to eavesdrop on American soldiers’ intimate conversations with their wives back home.

By way of background, US and UK intelligence services have gathered millions of webcam images … many nude.  The NSA collects and permanently retains many suggestive photographic images gathered in other ways. And top experts say the NSA is collecting the CONTENT of all of our phone calls and emails.

So NSA employees have access to a lot of nude or suggestive videos, photos, phone calls and emails.

It’s not just NSA … many government agencies have become corrupted.

For example, an employee of the Transportation Security Administration admitted that TSA agents share – and laugh at – nude scans of passengers.

And as we’ve  previously documented:

  • Senior SEC employees spent up to 8 hours a day surfing porn sites instead of cracking down on financial crimes
  • Nuclear Regulatory Commission workers watch porn instead of cracking down on unsafe conditions at nuclear plants
  • Investigators from the Treasury’s Office of the Inspector General found that some of the regulator’s employees surfed erotic websites, hired prostitutes and accepted gifts from bank executives … instead of actually working to help the economy
  • The Minerals Management Service – the regulator charged with overseeing BP and other oil companies to ensure that oil spills don’t occur – was riddled with “a culture of substance abuse and promiscuity”, which included “sex with industry contacts

Malaysia Airlines Management Needs Overhaul

By EconMatters  



On Thursday a Malaysia Airlines flight crashed with 295 people on board over eastern Ukraine near the Russian border, there is a high probability that the conflict in this region caused this plane to be shot down by accident. There are a myriad of scenarios of how this could happen in the confusion of what essentially has been a war zone, an area that the FAA has banned all U.S. commercial flights from flying over since April of this year. These kinds of accidents happen all the time in the confusion of military hotspots if we look back at historical records, the US even shot down a commercial Iranian flight by accident, these things happen. 


However the real question is why didn`t Malaysia Airlines also reroute flight patterns over this area as records show that other Malaysia Airlines flights have crossed over this highly combative area the last couple of days. How stupid do you have to be to send a commercial flight over what essentially is a warzone? I bet it came down to trying to save some fuel costs for the airline, but come on this is another case of an airline being penny wise and pound foolish. How much do you think the airline actually saved by taking the most direct route? Compare this figure with the amount of money they are going to pay out in liabilities to the families of the passengers on this plane. The trial lawyers must be lining up around the block on this one, not to mention the reputational damage caused by this latest incident with a Malaysia Airlines flight. Why would anybody ever fly this airline again?


Read More >>> China, Vietnam, Russia and U.S. in The South China Sea


I know some may think that I am being too harsh on poor Malaysia Airlines, as they are the victim in this case right, well that is one point of view. But the more logical perspective is that this was just an accident waiting to happen, so much so that the US rerouted flights over this area, and it appears that Malaysia Airlines was just being too cheap to do the same! Talk about gross incompetence at an airline, who knows what went on with that missing flight looking back in retrospect. This airline`s incompetence brings onboard an entirely new batch of possible scenarios of what really happened to that missing Malaysia Airlines flight MH370 in March of this year.


Read More >>> Every Middle East Flare Up Last 5 Years Overblown By Media


One thing is apparent after this latest disaster at the airline, upper management needs to be completely overhauled. Their critical decision making abilities are non-existent, and their ability to manage and evaluate risk scenarios is severely lacking, and the way they handled the entire missing Malaysia Airlines flight MH370 investigation was incompetence at its finest! This management team is singlehandedly going to cause this airline to go out of business at this rate, and by my accounts Malaysia Airlines should go out of business. Let a competent airline buy out their operations, do humanity a favor, I mean come on flying commercial flights routinely over a combat zone, and you are surprised that an accident of this magnitude occurred? The real surprise is why it took this long given the circumstances in the region, what a bunch of idiots at Malaysia Airlines!


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Israel Launches Ground Invasion Of Gaza

While the mainstream media busily speculates on just which Russians (because they are sure it's not the Ukrainians) shot the jet out of the sky, Al Jazeera, via Bloomberg, reports that Israel has decided not to let a crisis go to waste and invade Gaza:


The operation is reportedly on a wide scale.


As Blomberg reports,

Operation includes forces on ground, air, sea, Al Jazeera says, citing its own reporter.


Operation is on a wide scale: Al Jazeera


Israel Army declines to comment on the report when called by Bloomberg News

All of this was confirmed moments ago by none other than the Israel PM:


What The Sky Above Ukraine Looks Like Right Now

With virtually every airline now avoiding to fly above east Ukraine like the airborne version of the plague (observed recently in Denver) for obvious reasons, here is a snapshot of what the sky over east Ukraine looks like courtesy of FlightRadar 24.

It is, in brief, a ghost sky.

The highlighted plane belong to Ukraine Airlines. All the other, yellow, ones are doing their best to fly well inside Russian borders.

The real-time interactive map can be found here.

Fed's Bullard Urges Investors To Sell Bonds (But Not Stocks)

Given the market's rapid surge to dismissing The Fed's stock-selling recommendations, we are stunned by the silence of "market defenders" as once again the Fed takes to the airwaves to demand investors sell their bonds...


Of course we know why they are so desperate for investors to sell their bonds (aside from the economic growth reassuring meme it provides), because they are in full panic mode over the broken repo markets we discussed in detail here.

*  *  *

As if to embarass himself further, Bullard states...


Which is NOT what happened the last 2 times... no matter how well telegraphed or discounted

*  *  *

As we explained previously,

But why do I care about some archaic money-market malarkey? Simple, Without collateral to fund repo, there is no repo; without repo, there is no leveraged positioning in financial markets; without leverage and the constant hypothecation there is nothing to maintain the stock market's exuberance (as we are already seeing in JPY and bonds).

Crucially, it should be inherently obvious to everyone that the moves we see in the stock market is not about mom and pop choosing to invest in the stock market (or not) as the 'cash on the slidelines' fallacy is "completely idiotic' but about the marginal leveraged machine (or human) quickly jumping oin momentum.

The spike in "fails to deliver" highlights a major growing problem in the repo markets that provide that leverage... and thus the glue that holds stock markets together.

Wondering why JPY and bond yields have diverged so notably from stocks in recent days... repo effects (it's just a matter of time before it hits stocks)...


So that explains why the Fed is so desperate to talk you into selling your bonds - most notably the short-end by demanding you listen to what Yellen said about raising rates.. as that reduces the shortfall of collateral that repo needs and restocks the banks with repo-able funds.

*  *  *

Is that why a noted dove like Jim Bullard was so visibly hawkish last time?

The irony of course of the Fed explaining how rates will rise faster is that it spooks stock investors who have grown used to exuberant liquidity supply and roitates them to bonds... which merely exacerbates the problem the Fed has

Ukraine Rebels Find Black Box, Multiple Airlines Halt Routes Over Ukraine: Full MH 17 Update

The plot thickens. Moments ago, after Ukraine emergency services complained the crash probe was being hampered by separatists, it is these same "rebels" that appear to have found a key piece of the puzzle.


The question now is simple: what happens to the black box next, and perhaps more importantly - why anyone thinks a black box will have any information on who shot the missile that allegedly took down flight MH 17.

Here are the other notable updates in the past hour from Bloomberg:

  • Putin’s plane may have been target of Ukrainian rocket: Interfax
    • Russian President Vladimir Putin’s plane crossed route of crashed Malaysian plane near Warsaw, Interfax reports, citing unidentified person in Russian aviation service.
    • Possible that Ukrainian rocket was fired from land or from military plane: Interfax cites source
    • Plane that crashed was similar in size, color: Interfax
      Obama Says U.S. Trying to Determine if U.S. Citizens on Plane
  • Ukraine Crash Kills 23 U.S. Citizens: Interior Ministry Adviser
  • Multiple airlines say they’re avoiding airspace in Eastern Ukraine
  • Lufthansa to avoid E. Ukraine airspace on shot-down plane
  • KLM avoids flying over concerned territory
  • Alitalia says all routes over Ukraine, nearby airspace halted
  • Aeroflot says flights going around Ukraine: RIA Novosti
  • Air France says it’s stopped flying over E. Ukraine
  • Turkish Airlines flights to avoid Ukraine airspace:  Reuters
  • Transaero to avoid flying over Ukrainian territory
  • BA says its flights don’t use E. Ukraine airspace