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Is Hillary Clinton The Democrats' Richard Nixon?

Authored by Eric Zuesse,

Richard Nixon’s similarities to Hillary Clinton are remarkable:

1: Both were highly successful politicians who had exceptionally negative net-approval ratings from the U.S. public, but were viewed highly favorably by the voters within their own Party.

2: Both were unsuccessful in their first run for the Presidency, but managed to come back and ran considerably more successful campaigns the second time around.

3: Both were highly distrusted, except by the voters within their own Party.

4: Both went into their Presidential campaign years (especially the second time around) as being “the candidate with experience.”

5: Both were war-hawks and proponents of a big military, but were also liberals on social policies and regulatory policies (for example, Nixon signed into law the National Environmental Policy Act, several environmental initiatives including the Clean Air and Clean Water Acts, the Mammal Marine Protection Act, and the creation of the Environmental Protection Agency; and, he started the Earned-Income Tax Credit, which "now lifts more children out of poverty than any other government program”).

6: Whereas Nixon, running during the Cold War against the sitting Vice President Hubert Humphrey in 1968, lied that he had ‘a secret plan to end the Vietnam war' (he actually had — and applied — a secret plan to extend the Vietnam war), and he won the Presidency on the basis of that lie; Hillary Clinton, running against the anti-restoration-of-the-Cold-War progressive Bernie Sanders in 2016, lies by saying that she has a plan to end the war in Russia-allied Syria. Sanders says: “Of course Assad is a terrible dictator. But I think we have got to get our foreign policies and priorities right. The immediate — it is not Assad who is attacking the United States. It is ISIS. And ISIS is attacking France and attacking Russian airliners. The major priority, right now, in terms of our foreign and military policy should be the destruction of ISIS.” Clinton says an emphatic no to that: "Assad has killed, by last count, about 250,000 Syrians. The reason we are in the mess we're in, that ISIS has the territory it has, is because of Assad.” So, she is promising regime-change in Syria and saying that it’s the prerequisite to defeating ISIS — which is an absurd lie, since ISIS, and Al Qaeda, and all the other jihadist groups who have flocked into Syria to overthrow and replace Assad, are certainly not the way to defeat ISIS, nor to defeat the other jihadist groups there, all of which are anti-Assad, as is Clinton herself. Clearly, then, her ‘plan’ to win the war in Syria is, essentially, to replace Assad with jihadists — to whom the U.S. is sending thousands of tons of weapons. Her Big Lie there is merely stupider than Nixon’s (it’s transparently stupid, because both she and ISIS aim, above all, to overthrow Assad), but it’s just as much a lie about war-and-peace as was Nixon’s ’secret plan to end the Vietnam war’; and, in that sense, it is remarkably similar and (like Nixon’s lie was) can be believed only by liar-trusting fools, including virtually all members of the candidate’s own Party, plus a large percentage of political independents.

7: Both Richard Nixon and Hillary Clinton were/are famous for being secretive, and for distrusting everyone except his/her proven-loyal personal entourage — loyalty is a higher value to them than is any other. They are paranoid — very us-versus-‘them’ — and all-too-willing to use unethical means of defeating ‘them’ (not really the American people’s foreign ‘enemy’, but, above all, their own domestic “enemies-list”).

8: Both Nixon and Clinton famously use curse-words profusely in private, and treat their subordinates like trash, and rule them by fear.

9: Both of them had/have established records backing coups abroad, in order to impose the will of America’s President, no matter how bloody (such as the coups that overthrew Mossadegh in Iran in 1953 and Allende in Chile in 1973, and the coups that overthrew Zelaya in Honduras in 2009, and Yanukovych in Ukraine in 2014).

*  *  *

Investigative historian Eric Zuesse is the author, most recently, of  They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010, and of  CHRIST’S VENTRILOQUISTS: The Event that Created Christianity.

Denver Schools To Arm Guards With Military-Style Rifles

Submitted by Mac Slavo via,

Are children safe in public schools?

If the answer seems pretty obvious, it is confirmation that society has definitely gone to extremes that would not have been recognizable in past decades of American history.

Now Denver-area schools are becoming the first to guard their student populations with military-style semiautomatic rifles, and things certainly appear to be escalating.

via NBC News/AP:

A suburban Denver school district is arming its security staff with military-style semiautomatic rifles in case of a school shooting or other violent attack, a move that appears unprecedented even as more schools arm employees in response to mass violence elsewhere.


The guards, who are not law enforcement officers, already carry handguns.




The move raised new questions about how far school officials should go in arming employees, a practice that has become standard in the aftermath of the 2012 Sandy Hook Elementary School shootings.

One can only hope that these weapons would stop a shooter before they could hurt anyone, but there isn’t any guarantee.

Active shooters, mass killings and militarized police and security now haunt the halls where education and learning is supposed to be taking place. More children than ever before are on pharmaceutical medications, despite the known links to suicide and homicide. Between Common Core and politically-correct policies, these institutions are teaching that up-is-down, and down-is-up like never before.

One school in Florida even punished a 16-year old student for wrestling a gunman threatening other students to the ground and preventing a shooting. Active shooter and martial law drills have become commonplace, and many of them have been unannounced, causing terror and panic in students and teachers.

While most schools remain “gun-free zones” and have been reluctant to allow teachers to be armed in the case of the worst incidents, many have readily invested in armed security, surveillance technology and counter-terrorism approaches to “safety” in schools.

The result has been a heightened atmosphere that is increasingly paranoid, and ready to treat anyone and everyone as potential suspects – including children:

Ken Trump, a school safety consultant in Cleveland, said the Douglas County case may mark the first time a district has equipped its in-house security officers with semiautomatic rifles.


“Taking this step certainly ratchets up a notch the whole idea, the question of what’s reasonable, what’s necessary in terms of arming officers,” Trump said.

But are they being protected from potential violence, or indoctrinated in a police state society where even children are under sharp suspicion, and misbehavior is criminalized? Can we see down the road as to whether this is likely to tend towards more freedom, or less? More armed citizens is positive, but more guns only in the hands of police, but private and public, may prove not be.

Regardless, it is a precedent for the growing police state society that expects individuals to conform to the masses, and obey authorities at all costs. Michael Snyder argued that public schools are purposely preparing students to live in such a society:

Our children are the future of America, and our public schools are systematically training them to become accustomed to living in a “Big Brother” police state. All across the United States today, public schools have essentially become “prison grids” that are run by control freaks that are absolutely obsessed with micromanaging the lives of their students down to the smallest detail. As you will read about below, students all over the country are now being monitored by RFID microchips, their lunches are being inspected on a daily basis by school administrators, and the social media accounts of students are being constantly monitored even when they are at home.


[…] One thing that was unheard of back when I was in high school was “active shooter drills”. They are being held in school districts all over the nation today, and they often involve the firing of blanks and the use of fake blood.

In typical fashion, Snyder goes on to make a long list of bizarre school practices that will make your head spin, and are, frankly, teaching the future members of society how to become helpless slaves.

Everyone can see that there is a problem, but nobody seems to know the way to fix it.

There is a fine line somewhere in there…

Hundreds Of Chinese Children Mysteriously Fall Ill Suffering From Nose Bleeds, Rashes, Coughing

Hundreds of school children in East China's Jiangsu Province have fallen mysteriously ill, suffering from nose bleeds, itching, rashes, coughing, and other complicated symptoms, whose cause has not been determined.

CRI reports that some of the parents alleged that they noticed irritant smells at the school. They suspect that the smell comes from chemical factories near the school, which they believe are the main causes of their children's symptoms.

This is the second week in a row where students were found to be suffering from the same symptoms in the same province.

As a result, local authorities have mandated that five chemical factories near the school suspend operations. Meanwhile, the school insists on continuing all school activities as usual.


Mckinsey estimated in a 2013 study that China would drive roughly 60% of global chemical market demand growth from 2011 to 2020. As firms scramble to get chemical plants up and running in China, it appears that "safety" was conveniently brushed aside and is now leading to dramatic consequences for all those in the vicinity .

Caught On Tape: When A Humvee Paradrop Goes Terribly Wrong

Forget helicopter money, in Germany it's raining Humvees...

During an airdrop in Hohenfels, Germany, three HMMWV’s (Humvees) detached from their parachutes and plummeted to the ground.

As The Tactical Air Network reports that the 173rd Airborne Brigade dropped HMMWVs from their C130 aircraft, only to lose three “Hummers” to our good friend “gravity.”

It all looked so easy in Furious 7? On the bright side, Keynesians will be rejoicing!! Think of the clean-up involved and the demand for labor that creates and the need to spend to replace those 3 piles of trash - otherwsie known as The Broken Humvee Fallacy.


China's Other Big Problem - Porkflation

For those who believe that broad-based stimulus is coming to save the world from China (via RRR cuts or even pure QE) - as opposed to the hole-filling credit pump they just supported - think again. As we warned last year, this is 'western' thinking as the go to policy of the rest of the world's central banks has been - put on pants, print money, paper over cracks, proclaim victory. However, in China there is one big problem with this... stoking inflation... and most crucially the social unrest concerns when suddenly a nation of newly minted equity - and now bond - losers can no longer afford their pork - which is surging to record highs.

Amid slowing global reports,

According the latest pork outlook report from the USDA, the global production of pig meat is forecast to drop by 1% to 109.3 million tonnes (mt) in comparison to last year.


This, according to Stephen Howarth, market intelligence manager at UK levy board AHDB Pork, is around 2% lower than estimates from October 2015 on the production of pork internationally.


The slight decline in global pork production is largely the fault of several challenges facing the world’s largest pig meat producer, China. It’s economy has cooled and is now only growing at a rate of about 7% annually – causing widespread panic in global stock markets. But pressures on the profitability of domestic production, coupled with complex issues on environmental regulation, have caused China to ease off on its pork business.

The usually seasonally slow first quarter is seeing prices surge...


To recod highs for both retail...


and wholesale...


Pork’s “overly sensitive” role in CPI has also been felt this year, one anlyst noted, and broad-based China CPI is starting to creep up..


So a slowing Chinese supply - which in the new normal demands policy stimulus - is causing priecs to surge - which extinguishes hopes of policy stimulus.

Therefore, as SocGen warned, fiscal policy has to step up, and monetary policy is likely to play an assisting role by providing targeted liquidity. It seems that the focus at the moment is on the indirect channels of policy bank funding support to infrastructure investment... and even that is now slowing after a record trillion dollar pump in Q1.

In other words, do not expect some broad based liquidity infusion (RRR cuts or QE) - policy reaction, just as we have seen in the stock market manipulation, will be piecemeal and focused

April Cheers Bring May Tears - Something To Keep You Up At Night

Submitted by Thad Beversdorf via,

When people stop trusting a market they stop using that market.  Trust is at near 20 year lows.  The conundrum is that as volumes decline it becomes ever easier for price insensitive participants to manipulate the market only furthering the distrust.  This first three charts depict the deterioration of volumes and capital outflows in the face of a ‘7 year bull’.  A hard to explain phenomenon.

Raw Price to Monthly Volume:

And the capital outflows….

Now I heard Rick Santelli yesterday discuss whether the market can continue its run to new all time highs.  And with the obvious caveat of completely accepting that the fundamentals no longer have any correlation or relevance whatsoever to the market then yes, Santelli believes the market can reach all new highs.  On what, one may reasonably ask?  Well “kinetic energy”, he says, otherwise known as ‘Animal Spirits’ on Wall Street.

But it’s not so much kinetic energy that is levitating this market devoid of any supportive fundamentals, it is the fact that volumes are thin enough and technology has progressed enough that it has become entirely viable for existing policy champions (NY Fed/Citadel algos) to halt even drastic downward momentum runs and then for corporate treasury departments to grind the markets higher through record buybacks.  What we have left is a market of price insensitive participants i.e. corporate treasury departments and the Fed’s cronies (who incidentally make a fortune enacting the manipulation on behalf of the Fed).

Now I know that the last few remaining true believers, because I’ve talked to several, will suggest this explanation is just fancy talk.  But I ask you to look at the above charts and explain to me how else a market runs higher for 7 years in the face of the capital and volume exodus that has taken place?  Further explain who is stepping in on a 10% or 15% falling knife each time when the market has record short positions on and thus should profit handsomely from a continued (fundamentally sound) price reset?

We can continue to believe the hype but I expect most, and just about everyone I speak to privately, believes the efficient market is dead today just as sound banking died in 1999. And when guys like Santelli start talking about kinetic energy being the driving force behind all new highs, well you better start looking for a place to hide, it’s about to get ugly.  These April cheers are about to bring us some gut-wrenching  May tears.

I’ve said it a thousand times, you can bend but cannot break natural laws.  And while technology and lack of broad participation in the markets can facilitate a bending of the natural laws at some point the fundamentals will release that grim swan upon the world.   And so if you are still buying into the idea that the worst is over and we are now bound for the next 7 year bull, let me give you something to think about as you lay in bed tonight.

Here’s a look at the S&P 500: Jan – April 19, 2016 (top panel) vs Jan to May 19, 2008 (bottom panel).

You can see they are almost identical and you can imagine the pundits had very similar sound bites in April 2008, purporting that all the worst was finally behind us.  But there were a few that, despite the big spring 2008 rally, were giving words of caution.  Here is a short clip of Marc Faber on CNBC, May 19, 2008:

And how did the S&P 500 perform over the 10 months following that interview and the big spring rally of 2008?  It lost 52% of its value.


In other words, you are here...


A Terrible Start To 2016 Turns Absolutely Brutal For Odey Who Refuses To Stop "Fighting The Fed"

For some people, such as the Horseman Global hedge fund which has been net short since 2012, fighting the Fed can be profitable (even if March was a different story). For others, it is become a nightmare. One such person is Crispin Odey who has - so far - had a truly terrible year.

Recall it was Odey who last February predicted that the "shorting opportunity is as great as 2007-2009",  when he said that "we used all our monetary firepower to avoid the first downturn in 2007-09, so we are really at a dangerous point to try to counter the effects of a slowing China, falling commodities and EM incomes, and the ultimate First World effects. This is the heart of the message. If economic activity far from picks up, but falters, then there will be a painful round of debt default."

He continued:

We have seen though some strange things, with economics 101 turned on its head. We’ve seen that falling prices produce more supply, as the biggest producers see that they can take market share and use the opportunity by reducing average costs through excess production. We’ve seen that in the oil, minerals and iron ore industries. We have also seen in the last couple of years that as bond yields fall, governments are able to issue more debt.


But this time round the problem we have as well is that politics will start to rear its head and we are left to deal with politicians who are increasingly critical of the capitalist system’s ability to allocate capital and provide for society. For me the shorting opportunity looks as great as it was in 07/09, if only because people are still looking at what is happening and believe that each event is an individual, isolated event. Whether it’s the oil price fall or the Swiss franc move, they’re seen as exceptions.

His bearish strategy worked in 2015... in 2016 not so much.

One month ago, we updated on his performance when we noted something startling:  after starting off the year with a P&L bang, things quickly turned sour and Odey by mid-March Odey was suffering daily AUM swings of more than 5%.  The billionaire was stunned, and used the famous line that "this was no longer an investment market but a battlefield."

Markets need equilibrium to prosper. When the authorities have a problem, markets have a problem. We have been hurt by this rally in China-related companies, and indeed we reduced the gross and net positioning of the fund significantly in mid-March, to help reduce the short term volatility of the fund, but we remain convinced that China is in many ways in an even greater bind over policy than the developed world. By mid-March the fund was rising and falling by over 5% per day. At which point this was no longer an investment market but a battlefield. On the day that Draghi came out with his massive market support operation, the stock markets rose 2.5% and then closed down 1.5% on their lows. Imagine how painful it was to see the markets bounce the next day and celebrate his success. At that point I reduced the short book by a third and the long book by 10%.

It was not enough, and as the FT reports today, what until now was merely a terrible start to the year has turned absolutely brutal for Odey's European fund, which is now down nearly a third, or 31%, in the first four months of the year, wiping out almost half a decade of trading profits in his flagship hedge fund in less than four months. His more popular EOC MAC Macro Fund did not do much better, and plunged a whopping 24.4% in the month, one of its worst monthly performances in history, pushing the YTD total to -26.8% which is shaping up to be the worst year for Odey since its inception year of 1994.


According to the FT, the value of the €729m Odey European Fund has now fallen 31.1 per cent to the middle of April, dragging it back to its lowest level since January 2012. His large bets against currencies and equities have gone awry, making his stockpicking fund one of the worst performers among large vehicles this year.

Odey's story is well known to Zero Hedge regulars. "Mr Odey, who has been among the most prominent British financiers to back the country voting to leave the EU, has held strongly bearish views on emerging markets and China for more than a year." And following the massive coordinated reflation attempt by not just the Fed but all central banks, Odey has learned the hard way what it means to fight not just the Fed but all central banks.

What, however, makes the loss especially painful is that as Odey's latest March letter (below) explains, he is spot on. The only problem as noted previously, is that he picked the absolutely worst time to fight not one but all central banks.

Then again, he remains optimistic and as he concludes his letter, he believes that he will have the last laugh over the rotting carcases of central banks:

Losses in the banking sector at this point in the cycle are really bad news because banks are already suffering from weakening margins. They need rights issues to deal with these losses, but why should anyone subscribe to a rights issue when zero interest rates promise no let up to a fall in profits? The only way that banks could become attractive to underwriters of the shares are if profits are rising and the only way that profits can rise is if their loan book gets repriced. Yes, only higher interest rates would make banks attractive, but higher interest rates would bring on the recession that has been kept at bay by QE and zero interest rates. Less QE and more QED.


QE does however have an important effect. It drives all savings to embrace higher yielding assets globally. Life insurance companies and pension funds push more money into faraway places. However if the credit transmission is not there to support increased activity, QE is merely encouraging misdirected investment. Recovery rates from EM destinations are more in the teens that the twenty percents. Is this good signalling by central banks? Remember it was Keynes, the architect of their think-ing, who said, “It is good for people to travel, goods to travel but not for savings to travel.” The disconnect between travelling and arriving may be coming home to roost. It will make the retreat from Moscow appear painless.

Good luck!

* * *

From his manager's report.

QE came out of Fisher’s work on business cycles in 1935. For him what created the depression was the cycle of over-indebtedness allied to overcapacity, which ensured that when prices declined, loans could only be repaid by assets being sold off. The debt paid back made the debt still owing that much more expensive, because in a deflationary age, zero interest rates still meant that money remained too costly.


QE involved lowering interest rates from nearly 5% to almost zero very quickly, taking over the weaker financial intermediaries – AIG, Washington Mutual in the USA and, in the UK, Northern Rock, Lloyds and RBS – so that assets did not have to be sold and the debt deflationary cycle did not have its pernicious way. Central banks in a world of QE have become obsessive of where they perceive the ‘risk premium’ to be too high. Where interest rates payable by industries or by banks are seen as too high, central banks intervene and buy the bonds and in the process grow their own balance sheets.


The idea behind all of this is that by keeping interest rates low, slowly the economies of the world can recover and that hopefully this recovery would not be led, as it had for the 20 years before 2008, by debt that grew faster than incomes.


Newspapers are still full of central bank promises that interest rates can go negative and that if the worst comes to the worst, money could be helicoptered into the  economy; a method that would involve increased government expenditure financed by the printing press. Quite apart from the practicality of charging individuals negative rates on their positive balances, there is a growing body of people believing that QE and zero interest rates have already done as much as they can.


For, by the nature of QE and zero rates, central banks put themselves in competition with the clearing banks. They are eating the same food. Banks make their money in two ways. Maturity transformation and credit spread. However in a world of per-sistent low rates, assets (loans) will reprice downwards following liabilities (deposits) that reprice more quickly. Net interest margins will fall and in the absence of costs falling, so do profits. Secondly, central banks buy sovereign bonds and then later corporate bonds, driving down yields and again driving down the profitability of investing in these assets by banks.


In a world of QE and low interest rates, banks become increasingly unprofitable which may lead them to become that much more reckless in pursuit of higher yields to expand into subprime, auto loans, leveraged loans and credit cards. It certainly does not encourage them to lend naturally. Without lending and credit however, economies will find it, as Japan has shown since 1996, difficult to grow. They can only grow as fast as productivity will allow. Factor outputs rising faster than factor inputs.


However a side effect of zero interest rates is that companies that would have gone to the wall, remain and help to keep compe-tition intense. Profit margins suffer. Equally, in the USA, low interest rates have served to encourage quoted corporate Ameri-ca to buy back shares with debt rather than invest. Why invest when competition is driving down prices, when buying back shares helps management to realise profits on their share options? So now zero rates are leading to weak investment spending.


For the first time, productivity globally has fallen either to zero or even below that. This tells a story of misallocated capital – again very likely in a world of zero rates – but more tellingly it reflects that now, where there has been overinvestment, and here China is the worst culprit, that overcapacity is leading industries – oil, iron ore, steel, coal, shipping – to sell their goods and services at prices below cost. These losses have to be financed in some way and in the end these bad debts end up with the banks.


However losses in the banking sector at this point in the cycle are really bad news because banks are already suffering from weakening margins. They need rights issues to deal with these losses, but why should anyone subscribe to a rights issue when zero interest rates promise no let up to a fall in profits? The only way that banks could become attractive to underwriters of the shares are if profits are rising and the only way that profits can rise is if their loan book gets repriced. Yes, only higher interest rates would make banks attractive, but higher interest rates would bring on the recession that has been kept at bay by QE and zero interest rates. Less QE and more QED.


QE does however have an important effect. It drives all savings to embrace higher yielding assets globally. Life insurance companies and pension funds push more money into faraway places. However if the credit transmission is not there to support increased activity, QE is merely encouraging misdirected investment. Recovery rates from EM destinations are more in the teens that the twenty percents. Is this good signalling by central banks? Remember it was Keynes, the architect of their think-ing, who said, “It is good for people to travel, goods to travel but not for savings to travel.” The disconnect between travelling and arriving may be coming home to roost. It will make the retreat from Moscow appear painless.

* * *

Finally, here is what Odey disclosed are his top 10 holdings in OEI Mac.

Additional Evidence Of Mind-Boggling Fraud Emerges from The New York Primary

Submitted by Mike Krieger via Liberty Blitzkrieg blog,

For the past week or so, I’ve been warning readers that the supposedly “liberal” state of New York has some of the most repressive voting laws in the country. Before reading the rest of this post, I suggest refreshing your memory on just how undemocratic New York is by checking out the following:

Published April 13th: Hillary Clinton Will Win New York, Because New York is Running a Banana Republic Primary

Published yesterday: As Expected, New York’s Primary is Already a Pathetic Mess

As such, two things were obvious going into the New York primary: 1) Hillary Clinton would win. 2) There would be an enormous amount of voter suppression and fraud.

Well the results are in, and the state of the state in New York is very, very bad.

The Daily Beast reports:

Alba Guerrero was dumbfounded. She’d arrived at her polling place in Ozone Park, Queens only to be told that she had been registered as a Republican since 2004.


That was news to her. She remembers registering to vote for the first time as a Democrat so she could vote for Barack Obama in the general election in 2008. When she recently moved from Manhattan to Ozone Park, in Queens, she re-registered at the DMV, she says, and even checked online on March 9th to be sure she was registered at her new address.


But when she showed up to vote for Bernie Sanders at PS63 on Tuesday, she says she was told she couldn’t. New York is a closed primary, where only registered Democrats can vote in the Democratic Primary—and voters had to be registered by last October. She was told—very politely, she wants to make clear—by poll workers to take it up with a judge. She was given a court order in nearby Forest Hills.


Guerrero drove to the Queens County Board of Elections and pled her case, but Judge Ira Margulis initially turned her away.


“The judge tells me, ‘No, that’s it—2004.’ He shows me, I’m registered as a Republican. He says there’s nothing we can do,” she said.


But on her way out she saw a Board of Elections worker holding something with her name on it. It was her 2004 voter registration, replete, she remembers, with her name, her social security number, her birthday—and someone else’s signature.


“I said, ‘Excuse me, that’s not my signature,’” she said. “It’s not my handwriting. It showed completely different signatures.”

Sure enough, the signatures are strikingly different. Next to a box checked “Republican,” her 2004 signature is written in clear, deliberate, legible cursive and includes her middle name. Her more recent signature is a loopy, illegible scrawl. She insists she’s never changed it in her life, and says she can produce old tax forms to prove it.


So Guerrero went back to to Judge Margulis and showed him the discrepancy.


“He allowed me to change for that day,“ she said.


Mayor Bill de Blasio, who tweeted at 11:50 a.m., “There’s nothing more punk rock than voting. #GetOutAndVote”, had to change his tune by the end of the day. WNYC reported this morning that 126,000 Brooklyn Democrats had been removed from the voting rolls since last fall.

What a fake liberal clown.

“It has been reported to us from voters and voting rights monitors that the voting lists in Brooklyn contain numerous errors, including the purging of entire buildings and blocks of voters from the voting lists,” he said in a statement released after 5 p.m. on Election Day. “I am calling on the Board of Election to reverse that purge and update the lists again using Central, not Brooklyn borough, Board of Election staff.”


A spokesperson for New York Attorney Eric Schneiderman told the New York Daily News that his office received “by far the largest volume of complaints we have received for an election since Attorney General Schneiderman took office in 2011.”


Some polling sites did not open on time, citing too few election workers. Others had faulty voting machines, or were delivered half the number of promised voting machines.


“I spent three hours this morning trying to vote,” he said. “I’m at a loss for words. I don’t understand that in the 21st century you have to stand in front of a judge to get to vote. It was laughable.”


Gershman was peeved by what happened to him, but he wonders what would’ve happened if he didn’t have a car, or the ability to miss a morning of work to fight for his ballot. And he’s also confounded by what happened to Guerrero’s voter registration form, which he shared on YouTube and calls “pretty clear fraud.”


Guerrero calls the whole incident “creepy.” She has “no idea” who might want to forge her signature on a voter registration form.


“It’s just disheartening. We’re supposed to be the number one country in the world, but things like this you’d imagine would happen in a second or third-world country,” she said. “What happened to me, basically, was fraud.”

Welcome to the real America, Alba Guerrero.

Pimco Economist Has A Stunning Proposal To Save The Economy: The Fed Should Buy Gold

Back in December 2014, just before the ECB officially launched its initial phase of QE in which it would monetize government bonds, Mario Draghi was asked a very direct question: what types of assets could the ECB buy as part of its quantitative easing program. He responded, "we discussed all assets but gold."

The reason for his tongue in cheek response was because over the past few weeks speculation had arisen that gold could be part of the central bank’s asset purchases after Yves Mersch, a member of the ECB executive board and former Governor of the Central Bank of Luxembourg, said on November 17 that "theoretically the ECB could purchase other assets such as gold, shares, ETFs to fulfill its promise of adopting further unconventional measures to counter a longer period of low inflation."

Mario Draghi promptly shot down that idea.

But according to a provocative paper released by none other than Pimco's strategist Harley Bassman, Yves Mersch's inadvertent peek into what central bankers are thinking, may have been on to something. 

In "Rumpelstiltskin at the Fed", Bassman goes down the well-trodden path of proposing Fed asset purchases as the last ditch panacea for the US economy, however instead of buying bonds, or stocks, or crude oil, Bassman has a truly original idea: "the Fed should unleash a massive Fed gold purchase program that could echo a Depression-era effort that effectively boosted the U.S. economy."

He is of course, referring to FDR's 1933 Executive Order 6102, which made it illegal for a citizen to own gold bullion or coins or risk prison time. Americans promptly sold their gold to the government at the official price of $20.67, with the resulting hoard of gold was then placed in Fort Knox.

The Gold Reserve Act of 1934 raised the official price of gold to $35.00, a near 70% increase. It also resulted in an implicit devaluation of the US dollar. As Bassman points out, over the three years from January 1934 to December 1936, GDP increased by 48%, the Dow Jones stock index rose by nearly 80%, and most salient to our topic, inflation averaged a positive 2% annually, despite a national unemployment rate hovering around 18%.

In short, a brief economic nirvana which was unleashed by the devaluation of the dollar confiscation of gold. In fact, we have frequently hinted in the past that another Executive Order 6102 is inevitable for precisely these reasons. However this is the first time when we see a "respected economist" openly recommend this idea as a matter of monetary policy.

Bassman says that the Fed should "emulate a past success by making a public offer to purchase a significantly large quantity of gold bullion at a substantially greater price than today’s free-market level, perhaps $5,000 an ounce? It would be operationally simple as holders could transact directly at regional Federal offices or via authorized precious metal assayers."

What would the outcome of such as "QE for the goldbugs" look like? His summary assessment:

A massive Fed gold purchase program would differ from past efforts at monetary expansion. Via QE, the transmission mechanism was wholly contained within the financial system; fiat currency was used to buy fiat assets which then settled on bank balance sheets. Since QE is arcane to most people outside of Wall Street, and NIRP seems just bizarre to most non-academics, these policies have had little impact on inflationary expectations. Global consumers are more familiar with gold than the banking system, thus this avenue of monetary expansion might finally lift the anchor on inflationary expectations and their associated spending habits.


The USD may initially weaken versus fiat currencies, but other central banks could soon buy gold as well, similar to the paths of QE and NIRP. The impactful twist of a gold purchase program is that it increases the price of a widely recognized “store of value,” a view little diminished despite the fact the U.S. relinquished the gold standard in 1971. This is a vivid contrast to the relatively invisible inflation of financial assets with its perverse side effect of widening the income gap.

And before Krugman accuses Bassman of secretly being on our payroll, this is how Pimco's economist defends his unorthodox idea:

Admittedly, this suggestion is almost too outrageous to post under the PIMCO logo, but NIRP surely would have elicited a similar reaction a decade ago. But upon reflection, it could be an elegant solution since it flips the boxes on a foreign currency “prisoner’s dilemma” (more on this below). Most critically, a massive gold purchase has the potential to significantly boost inflationary expectations, both domestic and foreign.


* * *


Many people will rightfully dismiss the gold idea as absurd, as just another fanciful strategy to print money; why not just buy oil, houses or some other hard asset? In fact, why fool around with gold; why not just execute helicopter money as originally advertised? I would answer the former by noting that only gold qualifies as money; and as for the latter, fiscal compromise on that order seems like a daydream in Washington today – don’t expect a helicopter liftoff anytime soon.


Let’s be honest; most people thought NIRP was just as nonsensical a few years ago, yet it has now been implemented by six central banks with little evidence it is effective. And while a gold purchase program should qualify as a fairy tale, what is unique here is that it actually occurred with a confirmed positive effect on the U.S. economy.

We agree, if for no other reason than everything central banks have done and tried in history has been a disastrous mistake, leading to either huge asset bubbles or massive busts, which in turn have needed even more spectacular bubbles to be reflated and so on. As such, the one thing that central banks should do is that which they are "genetically" against - purchasing the one asset class which is their inherent nemesis, the one Ben Bernanke said had value only because of "tradition": Gold.

Of course, all of the above assumes Americans would be willing to sell their gold to the Fed at any prices, but as Bassman finally lays it out, it is worth finding out. Janet, are you listening?

* * *

From PIMCO, by Harley Bassman

Rumpelstiltskin at the Fed

Though it seems incredibly farfetched, a massive Fed gold purchase program could echo a Depression-era effort that effectively boosted the U.S. economy.

As our title alludes, I am about to spin a monetary policy fairy tale, a fantasy that could certainly never occur … except for the small detail that it’s happened before.

First I must remind you there are only two avenues out of a debt crisis – default or inflate – and inflation is just a slow-motion default. Thus in the darker days of the global financial crisis, the U.S. Federal Reserve set sail on a monetary experiment tangentially suggested by late Nobel laureate Milton Friedman, the original coiner of the phrase “helicopter money.” (Ben Bernanke borrowed this clever construct in his famous November 2002 speech, “Deflation: Making Sure ‘It’ Doesn’t Happen Here.”)

The notion was simple: Increase monetary velocity via financial repression to create inflation, depreciate nominal debt and deleverage both the public and private economies of the U.S. The toolkit of financial repression would include, but not be limited to, near-zero overnight interbank borrowing rates, massive asset purchase programs (also known as quantitative easing or QE), term surface restructuring (known as Operation Twist) and good old-fashioned jawboning, in this case taking the form of distant forward guidance.

Notwithstanding various political exhortations, there can be little doubt the Fed’s aggressive monetary policies after the collapse of Lehman Brothers were quite effective in cushioning the macro economy from the financial turmoil. Would the economy have cured itself without the Fed? We can’t prove a negative, but up until China allowed the devaluation of the yuan last August and Japan implemented negative interest rates in January, the Fed’s “Plan A” was working reasonably well.

But we do not operate in a vacuum, and various monetary machinations from the eurozone, Japan and China are now working in concert to export deflation to the U.S. This is quite worrisome as it may well hinder the U.S. economy from reaching the Fed’s target inflation level (2%) and escape-velocity economic growth.

Thus did Fed Chair Janet Yellen, in her most recent visit to Congress, tentatively start to explore a “Plan B” (which looks like Plan A on steroids) that includes, if only in theory, the barest remote possibility of a negative interest rate policy (NIRP).

There are a host of reasons PIMCO believes NIRP would be not only ineffective, but also possibly harmful to the U.S. economy, and these have been detailed by CIOs Scott Mather and Mihir Worah. But this does raise the question as to whether the Fed has indeed reached the bottom of its toolkit. Many things are possible, at least in theory, including the famous helicopter drop. Another option is to resurrect a plan that was actually implemented (with great success) 83 years ago.

The real fairy tale

From shortly after the October 1929 stock market crash to just before Franklin Delano Roosevelt became president in 1933, U.S. gross domestic product (GDP) declined by nearly 43%; during a similar timeframe, consumer prices declined by nearly 24%.

Employing what can only be described as force majeure politics, in April 1933 the U.S. government issued Executive Order 6102, which made it illegal for a citizen to own gold bullion or coins. Lest they risk a five-year vacation in prison, citizens sold their gold to the government at the official price of $20.67. This hoard of gold was then placed in a specially built storage facility – Fort Knox.

The Gold Reserve Act of 1934 raised the official price of gold to $35.00, a near 70% increase; positive results were almost immediate. Over the three years from January 1934 to December 1936, GDP increased by 48%, the Dow Jones stock index rose by nearly 80%, and most salient to our topic, inflation averaged a positive 2% annually, despite a national unemployment rate hovering around 18%.

Such a pity that these halcyon days were soon sullied as the government tightened financial conditions (both fiscal and monetary) from late 1936 to early 1937, which many point to as the precipitant of the Dow’s 33% decline. Additionally, the 1938 calendar reported a 6.3% decline in GDP and a 2.8% deflation in consumer prices. (Many suspect it is the fear of a 1937 redux that motivates the Fed to contemplate additional extraordinary actions, including NIRP.)

So in the context of today’s paralyzed political-fiscal landscape and a hyperventilated election process, how silly is it to suggest the Fed emulate a past success by making a public offer to purchase a significantly large quantity of gold bullion at a substantially greater price than today’s free-market level, perhaps $5,000 an ounce? It would be operationally simple as holders could transact directly at regional Federal offices or via authorized precious metal assayers.

Admittedly, this suggestion is almost too outrageous to post under the PIMCO logo, but NIRP surely would have elicited a similar reaction a decade ago. But upon reflection, it could be an elegant solution since it flips the boxes on a foreign currency “prisoner’s dilemma” (more on this below). Most critically, a massive gold purchase has the potential to significantly boost inflationary expectations, both domestic and foreign.

Asset or currency?

While never an officially stated policy, there has been a slow-moving, low-intensity currency war taking place over the past decade. The U.S. was the first mover, implementing QE in 2009, which had the effect of depreciating the trade-weighted U.S. dollar (USD) by 16%. Japan was next, implementing “Abenomics” in 2012; this helped depreciate the yen (JPY) versus the USD by over 30% in eight months. Europe went last when Mario Draghi followed through on “whatever it takes” in 2014; the euro devalued versus the USD from peak to trough by 24%. China had pegged the yuan to the USD to help maintain a stable trading environment, however, the increasing value of their currency against their other trading partners was hindering growth, and thus the motivation for a slight realignment last August.

The problem the world’s major economies now face is that any attempt to depreciate their currencies to improve the terms of trade must effectively come out of the pockets of their partners; this creates a classic prisoner’s dilemma. Thus the interesting twist of a Fed gold purchase program.

Warren Buffett famously railed against the shiny yellow metal in 2012 when he noted all the gold in the world could be swapped for the totality of U.S. cropland and seven ExxonMobils with $1 trillion left over for “walking-around money.” His point was that these assets can generate significant returns while owning gold produces no discernable cash flow.

While this observation is certainly true, the rub is that this is not a fair comparison since gold is not an asset; rather, it should be considered an alternate currency. Pundits often describe the five factors that define “money”:

  1. Its supply is controlled or limited,
  2. It is fungible/uniform – this is why diamonds cannot qualify,
  3. It is portable – this is why land cannot qualify,
  4. It is divisible – thus art cannot be money, and
  5. It is liquid – this means people will readily accept it in exchange.

By this definition, gold is certainly a form of money, and to Mr. Buffett’s point, one also earns no cash flow on paper dollars, euros, yen or yuan.

Raising expectations

A massive Fed gold purchase program would differ from past efforts at monetary expansion. Via QE, the transmission mechanism was wholly contained within the financial system; fiat currency was used to buy fiat assets which then settled on bank balance sheets. Since QE is arcane to most people outside of Wall Street, and NIRP seems just bizarre to most non-academics, these policies have had little impact on inflationary expectations. Global consumers are more familiar with gold than the banking system, thus this avenue of monetary expansion might finally lift the anchor on inflationary expectations and their associated spending habits.

The USD may initially weaken versus fiat currencies, but other central banks could soon buy gold as well, similar to the paths of QE and NIRP. The impactful twist of a gold purchase program is that it increases the price of a widely recognized “store of value,” a view little diminished despite the fact the U.S. relinquished the gold standard in 1971. This is a vivid contrast to the relatively invisible inflation of financial assets with its perverse side effect of widening the income gap.

In coda I would respond to the argument that a central bank cannot willfully create inflation – I disagree; it just depends upon how hard one tries. There are plenty of examples ranging from Weimar Germany to Zimbabwe where central banks have unleashed uncontrolled hyperinflations.

The more interesting question is not whether the Fed can create a 15% to 20% price spiral, but rather can they implement policies that will result in a somewhat gentle and controlled 2% to 3% inflation rate that will slowly deleverage the U.S. debt load while simultaneously increasing middle class nominal wages.

Many people will rightfully dismiss the gold idea as absurd, as just another fanciful strategy to print money; why not just buy oil, houses or some other hard asset? In fact, why fool around with gold; why not just execute helicopter money as originally advertised? I would answer the former by noting that only gold qualifies as money; and as for the latter, fiscal compromise on that order seems like a daydream in Washington today – don’t expect a helicopter liftoff anytime soon.

Let’s be honest; most people thought NIRP was just as nonsensical a few years ago, yet it has now been implemented by six central banks with little evidence it is effective. And while a gold purchase program should qualify as a fairy tale, what is unique here is that it actually occurred with a confirmed positive effect on the U.S. economy.

So when the next seat for a Fed governor becomes available, I would nominate Rumpelstiltskin … just a thought.

JPM Emails High Net Worth Clients, Urging Them To "Stay Invested"

It appears Bank of America's high net worth private clients (who together with hedge funds and institutional make up the so-called "smart money" investor category) are not the only ones who have been quietly offloading stocks.

Moments ago, in an email blast to JPMorgan Chase's own high net worth "Private Clients", the bank issued an "Update on Market Volatility for Chase Private Clients", in which it advised clients that while "recent volatility in the markets reminds us that investing can sometimes be unpredictable", it is encouraging clients to "stay invested." Perhaps Chase is worried that with the market back to all time highs on nothing but central bank intervention, some of the "more timid elements" are running for cover. One wonders how substantial the liquidations must have been for JPM to send the following email:

Here are some of the hints from the linked pdf:

Recent volatility has reminded investors that markets behave in unpredictable ways. The S&P 500 fell more than 10% last August and again early this year—and regained most of its value in a matter of weeks both times.


Even the most experienced investors find this kind of volatility unsettling. Yes, you may know volatility is part of investing, and risk is a necessary part of reward, but knowing it is one thing—and living with it is another.


It’s no surprise that many investors question themselves during bouts of volatility. But too often they ask the wrong question: “Should I stay in the market…or get out?” Moving in and out of financial markets can actually work against you. “Time in the market”—not “timing the market”—is what ultimately leads to successful investing.

That and of course betting that central banks will keep blowing the biggest bubble in history even bigger.

Some other tips:

  • Create a plan—and keep it up to date
  • Let time smooth out your returns
  • Don’t mistake a bad month for a bad year

  • Diversify, diversify, diversify
  • Be prepared for the turnaround
  • Meet with your advisor at least once a year

Not convinced yet? Read the following 4 page pdf and never sell again.

The Party Is Over: Regulators Propose To Cap, Defer And Clawback Wall Street Bonuses

Coming off a year in which Wall Street experienced the lowest average bonus since 2012, it now has to brace itself for new regulation on incentive compensation. One of the last pieces of Dodd-Frank to be written and implemented, regulators are looking to firm up the rules surrounding incentive pay for banks. The final regulation, once agreed upon, will not just apply to banks, it will also apply to investment advisers, broker dealers, credit unions, and executives at mortgage finance companies Fannie Mae and Freddie Mac according to the Wall Street Journal.

Six agencies have joint responsibility for rewriting the original government plan on Wall Street pay: FDIC, the OCC, the NCUA, the Federal Reserve, the SEC, and the Federal Housing Finance Agency. The National Credit Union Administration plans to meet today to unveil their latest proposal, with the rest of the regulators expected to follow shortly thereafter.

At the heart of the NCUA proposal are three main components: Bonus deferrals, Bonus clawbacks, and Risk Management and Controls. These are all slightly different for each level, defined by total assets of the firm.

Here are the three levels, according to the NCUA proposal

  • Level 1: Greater than or equal to $250 billion
  • Level 2: Greater than or equal to $50 billion and less than $250 billion
  • Level 3: Greater than or equal to $1 billion and less than $50 billion

Below is a quick summary of the key takeaways from each component.

Bonus Deferrals

The key takeaway here is that for Level 1 firms, 60% of a senior executive's qualifying incentive-based compensation and 50% of a significant risk-taker's qualifying incentive-based compensation would have to be deferred for at least four years.


The proposed rule would require clawback provisions that, at a minimum, allow the covered institution to recover incentive-based compensation from a current or former senior executive officer or significant risk-taker for seven years following the date on which such compensation vests, if the covered institution determines that the employee engaged in misconduct that resulted in significant financial or reputational harm.

Risk Management and Controls

Under the proposal, all Level 1 and Level 2 institutions would have to create and implement risk management frameworks and internal controls around incentive based compensation programs. These controls would ensure that incentive based compensation plans are monitored and that the plans appropriately balance risk and reward, as well as ensuring the compliance of the incentive based compensation programs with the institution's policies and procedures. [ZH: SOX 2.0].

Anyone who wishes to actually read the NCUA's 278 page proposal in its entirety can do so here.

While we understand the motive behind such policies, the reality of the situation is that instead of incentive based pay, executives and managers will just begin to require (and receive) higher base salaries, as they did after the financial crisis when . This will inevitably put the government in a difficult situation, as the narrative thus far has been that it doesn't want to dictate how much someone can get paid, it just wants to ensure that risk taking will be closely tied to incentive compensation.

As a reminder, here is a chart showing total and average Wall Street bonus over the years.


* * *

Here is a CNBC clip on the topic

When Doves Die: Stocks, Bonds, Oil Slump As Silver Pumps'n'Dumps

Stocks suffer their biggest down day in 2 weeks...


It all looked so hopeful early this morning as those pajama-players bid us back to cycle highs...and then it all fell apart...


As metals were smacked lower by a China margin hike...


Dow lost 18,000, S&P lost 2,100 but Trannies were the worst on the day...Nasdaq managed tro get green at the death...


The last few minutes saw a Dow 18k hunt as VIX was slammed again...and WTYF was that at the close - total fail to clam VIX to get Dow >18k


And Dow and S&P rapidly caught down to Nasdaq's weakness on the week...


Energy and Financials were red today but so were Utes...


Banks weakened today -= is time to catch down to yield curve reality?


And investors flooded out of AAPL (back into bear market territory), rushing into the 'safety' of Biotechs again...


Stock index and VIX ETFs have decoupled again...


Treasuries were also dumped today (a message from The Saudis? or heavy rate locks as issuers cramble to take advantage of recent market openness) - notable steepening today...


The USD Index plunged (as Draghi disappointed and EUR surged) then shot back higher as algos panic-sold EUR when Draghi uttered the magic word - "more"...USD Indexc ended the day unch (and week)


Here's a close up of EURUSD - just for fun, try trading that...Stops run top and bottom...


Crude fell on the day (topping around 815ET) but gold and silver managed to hold small gains as the entire commodity complex was smacked lower around 9amET...


Gold and Silver have had a turbulent week...


As the Gold/Silver ratio jerked higher for the first time in over 2 weeks...


Charts: Bloomberg

Cycles, Bounces, & The Only Question That Matters

Submitted by Lance Roberts via,

Market Cycles And Expected Outcomes

The “Visual Capitalist” website had a terrific market diagram explain the “best time to buy stocks.”

“Is it possible to time the market cycle to capture big gains?


Like many controversial topics in investing, there is no real professional consensus on market timing. Academics claim that it’s not possible, while traders and chartists swear by the idea.


The following infographic explains the four important phases of market trends, based on the methodology of the famous stock market authority Richard Wyckoff.


The theory is: the better an investor can identify these phases of the market cycle, the more profits can be made on the ride upwards of a buying opportunity.”

So, the question to answer, obviously, is:

“Where are we now?”

I’m glad you asked.

Let’s take a look at the past two full-market cycles, using Wyckoff’s methodology, as compared to the current post-financial-crisis half-cycle. While actual market cycles will not exactly replicate the chart above, you can clearly see the Wyckoff’s theory in action.


The accumulation phase, following the 1991 recessionary environment was evident as it preceded the “internet trading boom” and rise of the “” bubble from 1995-1999.

The distribution phase became evident in early-2000 as stocks began to struggle as Enron and WorldCom because poster children for “greed and excess” of the preceding bull market frenzy. It is worth remembering that during this phase the media and Wall Street were touting the continuation of the bull market indefinitely into the future. (Jim Cramer published his list of 10 Tech Companies for the next decade.)

Then, the decline.


Following the “” crash investors had all learned their lessons about the value of managing risk in portfolios, not chasing returns and focusing on capital preservation as the core for long-term investing.

Okay. Not really.

It took about 27 minutes for investors to completely forget about the previous pain of the bear market and jump headlong back into the creation of the next bubble leading to the “financial crisis.” 

Once again, during the distribution phase of the market, analysts, media, Wall Street and now a rise of bloggers, all touted “this time was different,” “green shoots,” “Goldilocks economy,” and “no recession in sight.” 

They were disastrously wrong.


More than 7-years into the current economic recovery the headlines ring of “no recession in sight,” “the bull market is still cheap” and “this time is different because of Central Banking.”

Need I say more.

Bounces Do Not Imply Ends

There has been a good bit of discussion as of late about the bounce in manufacturing data over the last couple of months as a sign that the “manufacturing recession was now at an end.”To wit:

“The U.S. manufacturing sector just batted five-for-five in its version of spring training.


Since mid-2014, the collapse in oil prices has hit manufacturers tied to the energy industry while the rise of the U.S. dollar was broadly crimping activity. These headwinds are no longer strong enough to dim Goldman Sachs Group Inc.’s “near-term optimism” on U.S. manufacturing.”

This is an extremely short-sighted and ill-thought out view.

First, the manufacturing reports are “seasonally adjusted.” These seasonal adjustments are designed to smooth the data over time to account for DECLINES in manufacturing activity during seasonally cold times of they year when inclement weather normally shutters in manufacturing activity.

However, given that the economy just experienced one of the most unseasonably WARM winters in 122 years, activity ran ahead of normal seasonal tendencies. When combined with the normal seasonal adjustments manufacturing data saw extremely sharp, and abnormal increases.

This is clearly seen in the chart below which is a composite economic output indicator which is comprised of the Fed Regional Manufacturing Surveys, Chicago Fed National Activity Index, Chicago PMI, ISM surveys, NFIB Survey and the Leading Economic Indicators.

Secondly, these bounces are simply normal restocking cycles as inventories are drawn down during protracted declines in activity. Furthermore, as with all economic data, nothing travels in a straight line either up or down.

However, in particular, the recent bounce in manufacturing data was a clear anomaly caused by the extremely warm winter weather. This could be seen in the recent slate of data points from the Fed Philadelphia Region as shown below:

  • February: -2.8
  • March: 12.4
  • April: -1.6

The weakness in the manufacturing data will likely reassert itself as the seasonal cycle realigns with the seasonal adjustments.

However, if we compare the Economic Output Cycle Index (EOCI) above to both GDP and the Leading Economic Indicator Index, we see a clearer picture of what is currently happening in the economy.

Not surprisingly, the EOCI has bottomed coincident with Central Bank interventions which drag forward future consumption. Unfortunately, when you “drag forward” future consumption today, you leave a “void” in the future that must be filled.

That future “void” continues to expand each time activity is dragged forward until, inevitably, it can not be filled. This is currently being witnessed in the overall data trends which are being reflected in the deterioration in corporate earnings and revenues.

While the media continues to “protest too much,” the reality is that earnings and revenue are a  direct reflection of real economic activity.

The only question is whether Central Banks can continue to support asset prices long enough for the economic cycle to catch up.

Historically, such is a feat that has never been accomplished.

Futures, Crude Unchanged Ahead Of Draghi As Parabolic Move In Steel, Iron Ore Continues

One day after stocks were this close from hitting new all time highs on what have been either ok earnings, if looking at non-GAAP data, or atrocious earnings, based on GAAP, and where any oil headline is now immediately translated as bullish by the oil algos, so far futures are relatively flat, while European stocks were at their moments ago in anticipation of the latest ECB announcement due out in just one hour.  However, unlike last month's "quad-bazooka", this time the market expects far less from Draghi.

“Having pulled put the monetary bazooka in March, the market is sensibly expecting no further policy measures from the ECB,” said Michael Ingram, a market strategist at BGC Partners in London. “Investors are understandably reticent in making big bets ahead of what is on paper, likely to see policy makers firmly on hold.”

Draghi will come and go, but attention will remain on oil and all other commodities, where the Bloomberg Commodity Index headed for a five-month high, spurred by gains from metals to soy beans, and weighing on government bonds.

Nowhere was the ongoing surge more obvious than in the construction complex, where steel reinforcement bars jumped to a 19-month high in Shanghai, buoyed by an improving Chinese property market, supporting the Australian dollar. As seen on the chart below, both iron ore and steel have gone parabolic this year despite, as reported previously, China's increase in steel output to record highs. “You’ve got a tight market, you’ve got momentum, and you’ve got this fundamental driver for steel in the government boosting the infrastructure and housing side of things,” Chris Weston, chief market strategist at IG Ltd. in Melbourne told Bloomberg. “The rebar price is really leading the iron ore price at the moment.”


Following yesterday's latest surge in oil which saw WTI overtake the "Gartman doomsday" level of $44, it has since leveled off while Brent fluctuated near $46 a barrel after data showed U.S. production slipped and Iraq said talks to freeze output may occur next month.

Commodity gains boosted the outlook for inflation, sending German bund yields to a four-week high. Sweden’s krona rose after the Riksbank expanded bond buying less than some investors expected. Metal increases boosted European miners, while most industries on the Stoxx Europe 600 Index declined.

"The rally in commodities is making people a bit more positive,” Robin Bhar, an analyst at Societe Generale SA in London, told Bloomberg. "The base metals are gaining on a view that the industrial cycle is strengthening. There’s broad-based buying in commodities, and that suggests that sentiment is starting to turn. This would have drifted across into mining shares and energy stocks."

Meanwhile in stocks, Europe's Stoxx 600 slipped 0.5%, after closing at its highest level since January. Miners in the gauge are heading for six-month high. Carmakers rallied, boosted by a 5.1 percent jump in Volkswagen AG after a person familiar with the matter said it agreed to set aside at least $10 billion to resolve civil claims by the U.S. government and lawsuits by American car owners over diesel vehicles rigged to cheat pollution controls.

The MSCI Asia Pacific Index was 1.2 percent higher. Japan’s Topix index climbed 2 percent to a two-month high, buoyed by prospects the Bank of Japan will boost stimulus at a monetary policy review next week. The authority is likely to increase asset purchases, Goldman Sachs Group Inc. analysts wrote in a report published Wednesday. Mitsubishi Motors Corp. tumbled by the 20 percent daily limit in Tokyo after the automaker said it manipulated fuel-economy tests.

S&P 500 index futures were unchanged, indicating U.S. equities will hold a four-month high as investors assess earnings before making a break for fresh all time highs. General Motors Co., Microsoft Corp. and Visa Inc. are among companies announcing quarterly results Thursday.

Where Markets Stand Now

  • S&P 500 futures up less than 0.1% to 2100
  • Stoxx 600 down 0.4% to 350
  • FTSE 100 down 0.5% to 6379
  • DAX up 0.1% to 10434
  • German 10Yr yield up 6bps to 0.21%
  • Italian 10Yr yield up 6bps to 1.46%
  • Spanish 10Yr yield up 7bps to 1.6%
  • S&P GSCI Index up 0.2% to 353.2
  • MSCI Asia Pacific up 1.2% to 134
  • Nikkei 225 up 2.7% to 17364
  • Hang Seng up 1.8% to 21622
  • Shanghai Composite down 0.7% to 2953
  • S&P/ASX 200 up 1.1% to 5273
  • US 10-yr yield up less than 1bp to 1.85%
  • Dollar Index up 0.1% to 94.59
  • WTI Crude futures down 0.2% to $44.07Brent Futures down 0.3% to $45.67
  • Gold spot up 1.1% to $1,258
  • Silver spot up 2.5% to $17.39

Global Top News

  • Draghi Can Argue Glass Is Half Full as ECB Pumps Up Stimulus: unemployment is falling and euro-area growth is continuing
  • Oil Trades Near 5-Month High as U.S. Crude Production Declines: U.S. crude output falls to lowest since Oct. 2014: EIA
  • VW Said to Pay At Least $10 Billion in U.S. Cheating Deal: carmaker’s plan covers lawsuit claims by government, motorists
  • Qualcomm Forecasts Are In Line on Progress in China Dispute: stock falls on concern chipmaker may lose Apple orders
  • AmEx Profit Beats Estimates as Purchases Climb; Shares Rise: revenue advances 1.6% to $8.09b, in line with estimates
  • Yum Brands Profit Tops Estimates as China Unit’s Sales Gain: company raises its annual forecast for operating profit
  • Vale Profit Prospects Bolstered by Record Output in Iron Rally: iron output of 77.5m tons is highest for first quarter
  • Wal-Mart to Cut Board to 12 Directors as Four Members Retire: board to maintain independent majority at 67% of its members
  • BHP Expects Iron Ore Prices to Drop as More Supply Swamps China: co. sees mergers and acquisitions as being unlikely
  • Sony Operating Profit Misses Forecast on Smartphone Slump: co. revises outlook ahead of April 28 earnings announcement
  • Saudi Arabia Mulls Dual Listing, Traded Fund for Aramco IPO: kingdom seeking ways to broaden investor base for huge IPO
  • Companies reporting earnings today include Alphabet, Microsoft, Verizon, Visa, Starbucks, GM

Looking at regional markets, stocks in Asia continued to trade higher as energy continued to drive sentiment following yesterday's near 4% advance in oil on speculation of a possible producers meeting in May. This saw the energy sector outperform in the ASX 200 (+1.1%) with several firm earnings reports also underpinning sentiment. Nikkei 225 (+2.7%) led the region amid a weaker JPY to climb back above 17000, while Shanghai Comp (-0.7%) is also positive after a larger liquidity injection by the PBoC, although overheating credit concerns capped gains. JGBs saw mixed trade with 10yr JGBs mildly lower amid strength in Japanese stocks, while yields in the super-long end declined with the 30yr yield at fresh record lows. Furthermore, today's 20yr auction was better received but failed to provide lasting support.

Top Asia News

  • Soros Says China’s Debt-Fueled Economy Resembles U.S. in 2007-08: Surging new credit is warning sign, Soros says
  • The 54% Rally in Steel Prices That Points to China’s Rapid Shift: Iron ore, steel demand getting better, Credit Suisse says
  • Japanese Funds Return to Overseas Bonds After Two Weeks of Sales: Purchases total net 844.7b yen in latest week, MOF says
  • Hony Capital Is Said to Raise $2.7 Billion for Yuan-Dollar Fund: Will be first dual-currency fund raised by large PE firm
  • Hong Kong Stocks Scorn Economic Gloom as Bull Market Approaches: MSCI gauge of city’s shrs has rallied 17% since January low
  • ‘Shameful’ Mitsubishi Fraud Risks Pushing Carmaker to Brink: Data manipulation affects ~625,000 minicars in Japan
  • ‘Black Box’ India States Thwart Modi Moves to Lower Debt Costs: Nomura sees deficits of major states widening to 3.3% of GDP

Equity specific news has taken focus so far in European hours, with macro news relatively light as participants await the ECB rate decision and press conference later today. In terms of European equities, this morning has been mixed in terms of indices, with Euro Stoxx higher by around 0.25%. Earning season appears in full flow, with Ericsson lower by around 10% after announcing a profit warning pre-market, with the likes of Pernod Ricard also among the worst performers after a pre-market earnings update. Separately, Volkswagen are the best performing stock in Europe today after agreeing a deal with the US regarding the emissions scandal.

Bunds have grinded lower throughout the session so far, with a number of analysts attributing the move below 163.00 to technical selling and positioning ahead of the ECB meeting later today. The commodity complex has seen WTI trade in a relatively tight range this morning in the wake of the significant gains seen so far this week, with the US benchmark remaining above the USD 44/bbl level.

European Top News

  • Novartis Profit Falls as Blockbuster Cancer Drug Sales Drop: company reiterates full-year forecast for sales and earnings
  • Ericsson Shares Drop Most in Year After Sales Miss Estimates: competition from Nokia, Huawei putting pressure on margins
  • Billionaire Slim Said to Weigh Stake Sale of Dutch Carrier KPN: sale could attract phone companies, such as Orange
  • SABMiller Sales Advance on Gains in Africa, Latin America: organic beer volumes rise 3% in fourth quarter
  • Pernod Ricard Suffers China Setback as Scotch Demand Ebbs: sales in China unexpectedly dropped 5% on weak New Year orders
  • Anglo’s Refined Platinum Output Drops as All Forecasts Kept: quarterly diamond production fell 10% as De Beers cut supply
  • Fnac Bids $1.1 Billion for Darty, Countering Steinhoff Offer: investors would receive 145 pence in cash or share alternative
  • U.K. Retail Sales Fall More Than Forecast; Budget Target Missed: U.K. retail sales fell for a second month in March
  • Sweden Fights Currency Market With More Monetary Stimulus: Riksbank to increase quantitative easing program by SK45 bln
  • Hapag-Lloyd Said to Be in Merger Talks With Competitor UASC: cos. said to be in talks as they fight increasing competition
  • Italy Bank Fund Approved by Regulator, Reaches Money Target: Atlante fund exceeded goal of raising EU4b

In FX, fresh EUR sales seen ahead of the ECB meeting today, where little change is expected to the current measures in place, but all the focus on the following press conference — from which we saw the huge FX moves in March. Moves lacking any momentum though as yet, and through 1.1300, fresh lows are met with snapbacks to highlight indecision. UK retail sales were the key data release, coming in weaker than expected, but were offset by lower public borrowing requirements. GBP was sold into the release aggressively, but after a reluctant dip under 1.4300, we are back in the mid 1.4300's. Ongoing consolidation in the commodity linked currencies, with USD/CAD finding some support ahead of 1.2600 and now edging back towards 1.2700. WTI
(Jun) is still trading on a $44.0 handle — just — but near term calm is enough ease CAD strength for now. USD/JPY continues to hold off 110.00, but is equally well bid on modest dips, with positive equities and the BoJ meeting next week lending some support

In commodities, WTI may have met a key resistance level of USD 44/bbl (which is also the 50% retracement from the Apr'15 highs to the Feb'16 lows) after yesterday's strong rally after OPEC announced they are set to call another meeting to revive output freeze/cut talks. Also of note today sees the release of the EIA natural gas with the previous result at -3 this comes after NatGas futures have slightly retraced after declines in recent months . Gold has been moving higher and has now broken a key resistance level of USD 1257.90/oz, also Silver has been making strong gains breaking through the USD 17.50/oz this morning , this comes amid broad-based strength across commodities which also saw copper and iron ore extend on gains, with Dalian iron ore futures hitting limit-up at a 19-month high alongside Shanghai rebar's 7% advance, following supply cuts by large industry names.

The US calendar picks up notably today. We kick off with the Chicago Fed national activity index, Philly Fed manufacturing survey and the latest initial jobless claims data, before there’s more house price data in the form of the FHFA house price index, before concluding this afternoon with the Conference Board’s leading index (where a +0.4% mom gain is expected). The BoE’s Carney is due to speak again this afternoon, while it’s a bumper day for earnings across the pond. 37 S&P 500 companies are scheduled to report including Alphabet, General Motors, Verizon, Microsoft and Schlumberger.

Bulletin Headline Summary from Bloomberg and RanSquawk

  • European equites trade in a relatively tentative manner ahead of the ECB rate decision and press conference with Bunds slipping below 163.00
  • Ahead of the ECB, FX moves are currently lacking any momentum with fresh lows in EUR/USD met with snapbacks, thus highlighting indecision
  • Focus going forward though will remain on the ECB, although other highlights include Philadelphia Fed business outlook and possible comments from BoE's Carney
  • Treasuries rise during overnight trading, a continuation of the late afternoon selloff in New York amid rising commodities and equities; ECB policy announcement due at 7:45am ET, followed by press conference at 8:30am.
  • With no new measures expected at Thursday’s meeting, Mario Draghi may use his press conference to point to signs that negative rates, free bank loans and a 1.7 trillion-euro ($1.9 trillion) bond-buying program should be enough to revive euro-area inflation
  • Swedish policy makers delivered a little more stimulus and made a few predictions about the future though all they can do now is hope ECB President Mario Draghi doesn’t upend everything for those outside the euro zone struggling to protect their currencies
  • Bank of Japan Governor Haruhiko Kuroda’s concerns about a rising yen are shared by senior officials at the central bank, according to people familiar with the discussions
  • Gold may advance to as much as $1,400 an ounce over the next 12 months, according to BNP Paribas SA, which cited rising investor concern about the efficacy of central banks’ policies to sustain growth
  • Global investors have cheered the recent signs of economic pickup in China. Andrew Colquhoun is unimpressed. The head of Asia Pacific sovereigns at Fitch Ratings sees the growth spurt, fueled by a resurgence in borrowing, threatening to wreak havoc on the financial system
  • Billionaire investor George Soros said China’s debt-fueled economy resembles the U.S. in 2007-08, before credit markets seized up and spurred a global recession; said China’s March credit-growth figures should be viewed as a warning sign
  • China’s top fixed-income fund manager said she may cut holdings of onshore corporate notes after defaults surged in the world’s third-biggest debt market
  • U.K. retail sales posted their biggest monthly decline in more than two years in March as Britons bought less of everything from food to clothing; Office for National Statistics also revealed that debt as a share of the economy rose
  • Sovereign 10Y bond yields higher; European, Asian equity markets mostly lower; U.S. equity-index futures rise. WTI crude oil, metals mostly higher

US Event Calendar

  • 8:30am: Chicago Fed National Activity Index, March (prior -0.29)
  • 8:30am: Initial Jobless Claims, April 16, est. 265k (prior 253k)
    • Continuing Claims, April 9 (prior 2.171m)
  • 8:30am: Philadelphia Fed Business Outlook, April, est. 8 (prior 12.4)
  • 9:00am: FHFA House Price Index, Feb., est. 0.4% (prior 0.5%)
  • 9:45am: Bloomberg Economic Expectations, April (prior 42); Bloomberg Consumer Comfort, April 17 (prior 43.6)
  • 10:00am: Leading Index, March, est. 0.4% (prior 0.1%)

Central Banks

  • 7:45am: ECB Deposit Facility Rate, est. -0.4% (prior -0.4%)
  • 8:30am: Mario Draghi speaks


DB's Jim Reid concludes the overnight wrap

Welcome to ECB meeting day, 6 weeks on from Draghi's policy bazooka. In the PDF today we've updated our performance review chart to track global assets since this point. Of particular interest to us is where European assets are in the mix. When we last ran this nearly two weeks ago returns for European assets had been relatively weak post-ECB with many of the areas of the market Draghi had tried to help having underperformed. The last 14 days have seen a marked turnaround in sentiment however and now all of the European assets we look at are back in positive territory over the relative time frame. In bond markets Bunds have returned just shy of 1% with Spanish bonds now catching up and matching on a total return basis. BTP’s are just in positive territory (+0.3%) but have underperformed with the Italian banking concerns. Performance for equity markets has been strong with the Stoxx 600 now up +4% which is a marked turnaround from -3% of two weeks ago. Regionally it’s the DAX (+7%) which leads the way (and ahead of the S&P 500 which is up +6%), followed closely by the peripheral bourses of Portugal (+6%), Greece (+6%) and Spain (+5%) with the FTSE MIB (+3%) lagging behind. European banks have staged a huge turnaround of late also and are now positing a +2% gain, which is an +11% or so swing from two weeks ago. It won’t come as much surprise to hear that EUR credit has continued to remain well supported with EUR HY (+4%), EUR IG Non-Fin (+2%) and EUR Fin Sub (+2%) all in low single digit return territory and out-performing bunds. That said it’s interesting to see that EUR credit has generally underperformed its US counterparts by a percent or so, reflecting the lower energy exposure over a period of a large rally in Oil prices (WTI +11%).

Perhaps of most interest to us today will be evidence of any logistical progress on the corporate bond purchasing program (CSPP). Since the announcement date details for the program have been thin with the hope that today will bring greater clarity around the potential size, split between primary and secondary markets and the finer details around bond eligibility. It might still be too early to hear much though. A report from Michal Jezek in my team, which we attach the link below to, shows that ECB eligible eurozone bonds initially outperformed post the ECB CSPP announcement and in the two weeks or so after. However since then they have underperformed non-eurozone bonds almost to the same magnitude. The turnaround has coincided with a higher beta global rally over the last two weeks or so, so that’s certainly helped the performance of the generally wider higher beta non-eurozone issues. We also provide a list of the top and bottom 100 bonds by performance since the ECB announcement.

Outside of the ECB today the main topic for markets continues to be Oil which is clearly the dominant driver for price action at the moment. Last night saw WTI close +3.77% at $42.63/bbl and so eclipsing the highest price for the year. That means Oil is now just over +13.5% up from the post-Doha early Monday morning lows now, or nearly $5. It’s worth noting that we roll onto the June contract today which is currently trading around $44/bbl this morning (and unchanged). Yesterday the early concerns from the announcement of the end of the Kuwait oil strike was quickly forgotten about post the latest EIA data which showed inventory levels coming in lower than expected and which appeared to be enough to fuel the rally. Later on we also saw headlines filter through suggesting that OPEC and other crude producers could meet as soon as next month in Russia in a bid to restart production freeze talks according to Iraq’s deputy oil minister.

With little other news flow, the rally in Oil has seen most markets in Asia this morning get off to a solid start. It’s Japan which is currently leading the way with the Nikkei +2.51%, while elsewhere there are decent gains for the Hang Seng (+1.79%), Kospi (+0.63%) and ASX (+0.91%). Bourses in China are back to flat after initially opening in the red while credit markets in Australia and Asia are generally a couple of basis points tighter.

In fact it was a broadly better day for commodities all round yesterday. The rest of the energy complex rallied in vain, while base metals also bounced (Aluminium +2.21%, Copper +0.91%, Nickel +0.59%). Iron ore also rallied another 3% and has quietly surged over 11% this week alone to the highest level since June last year. A big rise in Chinese steel demand has coincided with the rally, while the supply side of the equation has also been given a boost with production reports from the big mining names this week (BHP, Rio Tinto and Vale) all hinting at lower production guidance this year and next.

As a result of gains in the commodity space, along with another decent day for financials, it ended up being another positive day for risk markets generally yesterday. European equity markets rallied back from a weak open, with the Stoxx 600 closing +0.43% for its third consecutive daily gain. A late dip into the close meant gains were more modest in the US (S&P 500 +0.08%) but the Dow and S&P 500 continue to extend the recent highs. US credit markets were the big outperformer. In the CDS space CDX IG closed nearly 3bps tighter and to the strongest level since August last year, while in the cash market we saw US HY energy spreads finished nearly 30bps tighter and are all of a sudden over 60bps tighter in two days. Earnings reports appeared to be less of a factor driving markets yesterday but we’ve got a number of tech heavyweights reporting today as well as the first hint of earnings in the energy sector when Schlumberger report after the close – it’ll be worth keeping an eye on those numbers.

There wasn’t a whole lot of economic data for us to digest yesterday. The only data we did get in the US was in the form of more housing data, although in contrast to some of the softer reports earlier this week, yesterday’s existing home sales print of +5.1% mom was ahead of expectations (+3.9% expected) with the annualized rate ticking up 5.3m from 5.1m in February. Treasury yields moved higher and the benchmark 10y (which rose 6bps) finished at 1.846% and the highest yield since March. Interestingly, we also noted that the Bloomberg US financial conditions index was up nearly 6bps yesterday, indicative of easing of financial conditions, with the current level suggesting that conditions are now easier than when the Fed moved to hike back in December.

The rest of the economic data of interest yesterday was in the UK with the latest employment readings. The unemployment rate was reported as holding steady at 5.1% in February as expected, while the change in employment growth of 20k in the three months to the end of Feb was less than hoped for (60k expected). Of perhaps most importance was the softer than expected earnings data. Average weekly earnings including bonuses printed at +1.8% yoy, well below expectations (+2.3% expected) and down three-tenths from the prior month. That said there was no change in the earnings data stripping out the effect of bonuses.

Taking a look at the day ahead, the highlight this morning datawise will likely be the March retail sales numbers for the UK, while French confidence indicators are also due out. The aforementioned ECB meeting is due at 12.45pm BST with President Draghi due to speak shortly after, while the Riksbank will also hold their own policy rate decision (no move expected). Over in the US the calendar picks up notably today. We’ll kick off with the Chicago Fed national activity index, Philly Fed manufacturing survey and the latest initial jobless claims data, before there’s more house price data in the form of the FHFA house price index, before concluding this afternoon with the Conference Board’s leading index (where a +0.4% mom gain is expected). The BoE’s Carney is due to speak again this afternoon, while it’s a bumper day for earnings across the pond. 37 S&P 500 companies are scheduled to report including Alphabet, General Motors, Verizon, Microsoft and Schlumberger.

One Commodity Trader Writes: "What Is Happening Has Absolutely No "Reasonable" Explanation"

One commodity trader writes in with some very unique observations. From trader "Peter"

* * *

The insanity has now fully spilled into the commodity markets – a market which I professionally made a transition to after the 2008 crisis from the financial markets, simply because I believed it was a market that would still function according to true fundamentals…

I guess that only lasted so long…

The commodity markets have been prone to excessive speculation for years, but at the end, the thought of specializing in something “tangible” that EVENTUALLY would have to revert back to true supply and demand fundamentals made all the sense in the world.  Specially with the true circus that the financial markets have become since 2008…

* * *

To: "Peter"
Sent: Wednesday, April 20, 2016 1:35 PM
Subject: volume totals today

774K of soybeans traded today and that would be a record by nearly 160K contracts as yesterday set the record at 615K.

Over 88K Jly/Nov traded today and 97K May/Jly traded.  Unheard of non-roll numbers.

Meal volume was 270K and we have to think that was a record as well but not 100% on that one.

Lots of ideas around to try and explain the move: from commercial short hedgers blowing out, Chinese pricing, product switching from Argentina to the US.

Not really sure if all or any of this is true but it was quite a wild session

* * *

From: "Peter"
Sent: Wednesday, April 20, 2016 2:41 PM
Subject: RE: Some staggering volume totals today

Man… I would be VERY surprised if this was due to any of the reasons people are mentioning…

    Chinese pricing – I am very positive it does have something to do with it, but for the overnight session – not the daytime.
    Commercial hedgers blowing out – very possibly adding to the mess – but no way commercial volume takes us to these levels of ridiculousness in total volume…
    Product switching from ARG – yep, because we REALLY need to ration our 400+ mb bean stocks… LOL

This is way past insane, ridiculous, etc…

The “fundamental” reasons people are trying to ping to this are simply a nice “window dressing”…

There is nothing else that can explain this other than you know what? 

Here comes my Very-REAL Conspiracy Theory: the stupid FED and other Central Bankers around the world acting in unison to artificially raise inflation so that they can hopefully get out of the F’ing mess they got themselves into with this low/negative rate BS.  Call me crazy, and I am not a “conspiracy theorist” – but what is happening has absolutely no “reasonable” explanation.  So I have to think outside the box…

The FED and other Central Banks have already destroyed the equity and other macro-financial markets… it is now turn for the commodities markets…

I am serious … I really am… I wish I was just being sarcastic… but pause for a moment and think about what is written above…

What explains the move in Crude? Ok, I could try and put some sort of “rationality” on the initial move from $26 - $40 (as crazy as it was), but the action in the oil market since Sunday’s “about face” in Doha?  No way anything other than pure, simple and outright manipulation can explain these last 3 days of action in the crude oil market… nothing…

How about the fact that the main drag on the inflation figures has been what? What? FOOD & ENERGY…

So is it so crazy to think that Central Bankers all got together in early 2016 and came up with the following equation???


Who or what has the power to produce such volume in such short amount of time?????? Not the powerful Chinese, not the commercials, not even the “regular” hedge fund crowd… This is much bigger than that Chris… much bigger…

When you pause and think about what I just wrote – it will not sound that crazy after all…

I truly wish I was joking…

I also wish I could let go of my natural makeup of focusing on “fundamentals” and just go long everything… but I don’t believe I can… and I am frankly and idiot for it…

Don’t write this off as some crazy conspiracy… Think about it… it is almost scary how much sense it makes…
At the end of the day… it is what it is…


The Lie That Corporations Have “Rights”




The Lie That Corporations Have “Rights”

Written by Jeff Nielson (CLICK FOR ORIGINAL)







People have rights – at least we used to have them, until the mythological “War on Terror” was rammed down our throats as a pretext for stripping us of many rights. Corporations cannot have rights, which should be evident to all citizens in our pseudo-democracies.

However, thanks to the endemic brainwashing of the corporate media, this important distinction of law/logic is no longer obvious to many. Indeed, in the United States, corporations have been elevated to a legal status at least equal to that of its citizens – if not above the status of the people.

Precipitating this discussion, we offer a particularly odious piece of propaganda from the mainstream media, where a purported law professor attempts to advance the specious argument that corporations (in the United States) have “free speech rights.”

The scope of the First Amendment [free speech] lies at the heart of my thought experiment. We live in an era when criticisms of corporate speech can become overwrought. Many activists deny that corporations have any free speech rights at all.

Not even the four dissenters [judges] in Citizens United v. Federal Elections Commission took that position. They conceded that corporations possess First Amendment rights . They simply argued that the government, with sufficiently strong reason, can limit some avenues for the expression of those rights as long as it leaves other avenues open.

This is wrong, in every respect. It is “bad law” in every respect. It reflects a refusal of the corrupt U.S. judiciary system to acknowledge the limits of our governments’ authority. It is nothing less than a complete betrayal of the oath these judges take to uphold the law.

Here, the perversion of reality descends to the level of cultural insanity. In the United States, a corporation is “a person.” This is an outrageous distortion of law and reality, particularly once we place this legal perversion into its proper context. In the United States, a fetus is not “a person.”

Irrespective of one’s views on the highly emotionally-charged subject of abortion, one fact is clear. If a human fetus is not legally deemed to be “a person,” then obviously an inanimate corporation could never be deemed as such. As a matter of basic biology and elementary logic, the claim of a fetus to the status of “a person” must be above any claims by mere corporations.

Because of our brainwashing, this point still may not be obvious to some readers, thus a further definition of terms is necessary. We will begin with defining the word “right.” Since our context for examining rights is a legal one, our definition must be legally rather than linguistically oriented.

This is an important point, as the word “right” is used both very loosely and colloquially in our societies. Dictionary definitions are of little help here. Consult a half dozen different dictionaries, and one will see the word “right” defined in six different ways.

To define the word in a legal context requires first answering a preliminary question: from where do our rights originate? Primarily, our rights are derived from the Constitutions of our nations. To a lesser extent, they are also derived from the United Nation’s “Universal Declaration of Human Rights.” However, as this document has (at best) only quasi-official status within our various nations, our rights are primarily derived from the former source.

Our Constitutions exist above the level of our governments. We know this to be true, because we require that any amendments to our Constitution only be enacted via some sort of Super Majority. This is to demonstrate to the people that the proposed change(s) reflects the will of the people, and it is only under such circumstances that we allow our governments to modify our Constitution.

Our rights come from our Constitutions, and our Constitutions have a legal status above that of our governments. Thus our rights exist, legally, above the level of our governments. Why is this point of such great importance? Because it sheds light on the true definition of “a right.”

Because our rights exist above the legal level of our governments, our governments do not (and cannot) bestow rights. Rather, our human rights are intrinsic and inalienable. This conclusion simply mirrors the language of the U.N.’s Universal Declaration:

Whereas recognition of the inherent dignity and of the equal and inalienable rights of all members of the human family is the foundation of freedom, justice and peace in the world.

As a proposition of both law and logic, this makes much of our anti-terrorism laws legally null and void, since they seek to infringe upon, if not eliminate, rights which exist above the authority of our governments.

Governments cannot grant rights. Equally, they cannot take them away, except via Constitutional amendment. Here it is very important that we distinguish the word “right” from a somewhat similar word/concept: “privilege.”

Privileges resemble rights except for one crucial distinction of law/logic. Privileges are revocable. Our governments do have the legal authority to grant privileges, and thus to revoke privileges – something for which they lack the legal authority with respect to rights.

This brings us to another extremely important definition: “corporation.” A corporation is an inanimate, paper entity. More specifically, it is a front for wealth. These paper shells have been created in order to facilitate the deployment of wealth, and thus facilitate commerce. Of equal importance, corporations are a creation of government.

Why are these basic traits of corporations of such great legal relevance to this discussion?

      1) Corporations have a legal status created by our governments, and thus a legal status equal to our governments, but well below the status of our human rights.

      2) In our world of mega-corporations, corporations have become primarily the paper fronts for the ultra-wealthy.

Dealing with the second point first, it should become immediately apparent why – as an issue of justice and equity – a corporation could never have rights. As individuals, the ultra-wealthy already have rights equal to and commensurate with the rights of all other citizens. This is all they could ever be entitled to. If we grant rights to the mega-corporations owned by the ultra-wealthy, we are granting this one class of individuals a second set of rights – in addition to their intrinsic, human rights.

This is obviously unjust and inequitable. When we then examine the first point (above), we see how supposedly granting rights to corporations is clearly illegal.

We have already established that our legal rights exist above the level of our governments. They cannot create or bestow rights, nor can they take them away. Obviously, if they cannot bestow rights to the people, they cannot bestow rights upon inanimate corporations – entities with a legal status equal to that of our governments. They lack the authority.

Similarly, if a government cannot legally bestow rights upon corporations, they cannot elevate corporations to a status equal to that of the people, i.e. by defining a corporation as “a person.” This is simply an indirect means of doing what we have already established is illegal. If we allow our governments to define any entity it chooses as “a person,” we would be giving these governments the back-door power to bestow rights, something which is unequivocally beyond their legal authority.

One does not have to be a judge, or even a law professor in order to understand these elementary points of law, logic, and justice. How could someone who (supposedly) possesses the legal expertise of a law professor have constructed the fallacious and ludicrous argument that “corporations have rights”?

He did so by deliberately refusing to define the terms he was using. It is much easier to lie to people, and to pretend that corporations have rights if you scrupulously avoid any precise definition of what a “right” actually is.

A definition of terms is the foundation of all valid analysis. Refusing to define the terms that one uses in constructing their arguments is the methodology of the propagandist. Most lies and propaganda are couched in semantics, and engaging in semantic deception is impossible if one first precisely (and correctly) defines their terminology.

People have rights. People have a legal status well above that of mere corporations. Corporations can never have rights. Corporations exist at a legal level equal to that of our own governments (another form of paper entity), and well below the level of a person.

A corporation can, at best, have privileges bestowed upon it – privileges which can be taken away by any legislative act. Perhaps the greatest outrage and tragedy of this issue is that it even requires an explanation.

At one time, the citizens of our nations understood that the government serves the people, not the other way around. At one time, the citizens of our nations understood that their own legal status (and the status of their rights) exists above the authority level of our governments.

Instead, we are now mere serfs in the most illegitimate of hierarchies. Corrupt governments regularly pass pseudo-laws, which grossly exceed the level of their legal authority, and are thus null and void. Corrupt judiciaries have abdicated their own legal duty, and now simply rubber-stamp an endless stream of these null-and-void laws.




The people of our nations need to know their rights. But first, they have to understand them.



Please email with any questions about this article or precious metals HERE




The Lie That Corporations Have “Rights”

Written by Jeff Nielson (CLICK FOR ORIGINAL)

Treasury Removes Jackson From $20 Bill, Will Replace Him With Harriet Tubman

Presenting an artist's impression of what your new $20 bill will soon look like.


It's official.

Moments ago Politico reported that the U.S. Treasury will announce that it plans to replace former President Andrew Jackson on the $20 bill with Harriet Tubman, the sources said. There will also be changes to the $5 bill to depict civil rights era leaders including Marian Anderson, Eleanor Roosevelt and Martin Luther King Jr.

Not every dead president is being scraped however: treasury Secretary Jack Lew on Wednesday will announce a decision to keep Alexander Hamilton on the front of the $10 bill and put leaders of the movement to give women the right to vote on the back of the bill.

 Lew's decision comes after he announced last summer that he was considering replacing Hamilton on the $10 bill with a woman. The announcement drew swift rebukes from fans of Hamilton, who helped create the Treasury Department and the modern American financial system. Critics immediately suggested Hamilton take Jackson off the $20 bill given the former president's role in moving native Americans off their land.

Jackson may remain on the $20 bill in some capacity, but will clearly be demoted.

Lew told POLITICO last July that Treasury was exploring ways to respond to critics. “There are a number of options of how we can resolve this,” Lew said. “We’re not taking Alexander Hamilton off our currency.”

* * *

Here is the official statement from the US Treasury:

Treasury Secretary Lew Announces Front of New $20 to Feature Harriet Tubman, Lays Out Plans for New $20, $10 and $5


4/20/2016 ?

WASHINGTON – In a letter to the American people, Treasury Secretary Jacob J. Lew today announced plans for the new $20, $10 and $5 notes, with the portrait of Harriet Tubman to be featured on the front of the new $20.


Secretary Lew also announced plans for the reverse of the new $10 to feature an image of the historic march for suffrage that ended on the steps of the Treasury Department and honor the leaders of the suffrage movement—Lucretia Mott, Sojourner Truth, Susan B. Anthony, Elizabeth Cady Stanton, and Alice Paul.  The front of the new $10 note will maintain the portrait of Alexander Hamilton.


Finally, he announced plans for the reverse of the new $5 to honor events at the Lincoln Memorial that helped to shape our history and our democracy and prominent individuals involved in those events, including Marian Anderson, Eleanor Roosevelt and Martin Luther King Jr.


The reverse of the new $20 will feature images of the White House and President Andrew Jackson.


In his letter, Secretary Lew noted that the Bureau of Engraving and Printing will work closely with the Federal Reserve to accelerate work on the new $20 and $5 notes, with the goal that all three new notes go into circulation as quickly as possible, consistent with security requirements.

Here is Jacob Lew's "explanatory" letter:

An Open Letter from Secretary Lew:


When I announced last June that a newly redesigned $10 note would feature a woman, I hoped to encourage a national conversation about women in our democracy.  The response has been powerful.  You and your fellow citizens from across the country have made your voices heard through town hall discussions and roundtable conversations, and with more than a million responses via mail and email, and through handwritten notes, tweets, and social media posts.  Thank you for sharing this thoughtful and impassioned feedback.


Over the course of the last 10 months, you put forth hundreds of names of people who have played a pivotal role in our nation’s history.  Many of you proposed that our new currency highlight democracy in action and reflect the diversity of our great nation.  Some of you suggested we skip the redesign of the $10 note, which is the next in line for a security upgrade, and move immediately to redesigning the $20 note.  And others proposed unconventional ideas, such as creating a $25 bill.


I have been inspired by this conversation and today I am excited to announce that for the first time in more than a century, the front of our currency will feature the portrait of a woman—Harriet Tubman on the $20 note.


Since we began this process, we have heard overwhelming encouragement from Americans to look at notes beyond the $10.  Based on this input, I have directed the Bureau of Engraving and Printing to accelerate plans for the redesign of the $20, $10, and $5 notes.  We already have begun work on initial concepts for each note, which will continue this year.  We anticipate that final concept designs for the new $20, $10, and $5 notes will all be unveiled in 2020 in conjunction with the 100th anniversary of the 19th Amendment, which granted women the right to vote.


The decision to put Harriet Tubman on the new $20 was driven by thousands of responses we received from Americans young and old.  I have been particularly struck by the many comments and reactions from children for whom Harriet Tubman is not just a historical figure, but a role model for leadership and participation in our democracy.  You shared your thoughts about her life and her works and how they changed our nation and represented our most cherished values.  Looking back on her life, Tubman once said, “I would fight for liberty so long as my strength lasted.”  And she did fight, for the freedom of slaves and for the right of women to vote.  Her incredible story of courage and commitment to equality embodies the ideals of democracy that our nation celebrates, and we will continue to value her legacy by honoring her on our currency.  The reverse of the new $20 will continue to feature the White House as well as an image of President Andrew Jackson.


As I said when we launched this exciting project: after more than 100 years, we cannot delay, so the next bill to be redesigned must include women, who for too long have been absent from our currency.  The new $10 will honor the story and the heroes of the women’s suffrage movement against the backdrop of the Treasury building.  Treasury’s relationship with the suffrage movement dates back to the March of 1913, when advocates came together on the steps of the Treasury building to demonstrate for a woman’s right to vote, seven years prior to the passage of the 19th Amendment.  The new $10 design will depict that historic march and honor Lucretia Mott, Sojourner Truth, Susan B. Anthony, Elizabeth Cady Stanton, and Alice Paul for their contributions to the suffrage movement.  The front of the new $10 will continue to feature Alexander Hamilton, our nation’s first Treasury Secretary and the architect of our economic system.


The reverse of the new $5 will depict the historic events that have occurred at the Lincoln Memorial.  In 1939, at a time when Washington’s concert halls were still segregated, world-renowned Opera singer Marian Anderson helped advance civil rights when, with the support of First Lady Eleanor Roosevelt, she performed at the Lincoln Memorial in front of 75,000 people.  And in 1963, Martin Luther King, Jr. delivered his historic “I Have a Dream” speech at the same monument in front of hundreds of thousands.  Honoring these figures will bring to life events at the Lincoln Memorial that helped to shape our history and our democracy.  The front of the new $5 will continue to feature President Lincoln.


Due to security needs, the redesigned $10 note is scheduled to go into circulation next.  I have directed the Bureau of Engraving and Printing to work closely with the Federal Reserve to accelerate work on the new $20 and $5 notes.  Our goal is to have all three new notes go into circulation as quickly as possible, while ensuring that we protect against counterfeiting through effective and sophisticated production.


This process has been much bigger than one square inch on one bill, and along the way, we heard about countless individuals who contributed to our democracy.  Our website,, will highlight many of the names that we heard throughout this process, and help tell some of the many stories that inspired us.  Of course, more work remains to tell the rich and textured history of our country.  But with this decision, our currency will now tell more of our story and reflect the contributions of women as well as men to our great democracy.


Thank you,


Secretary Jacob J. Lew

* * *

Confused? Disturbed? Angry? You are not alone. The following rant by Mac Slavo expressed many feeling about the proposed change.

Andrew Jackson, Who Fought Central Bank, Removed from $20 As “Public Concern for Liberty” Erased

The War on Cash has many fronts.

The latest battle is for the face of the currency itself, and the central bankers, who control the front anyway, have imposed a symbolic defeat against the leaders in America’s past who have fought against the stranglehold of the money makers.

Naturally, there are liberal politics at play, fighting for every inch of ground in the war for ideological re-engineering. History is being whitewashed, various figures of antiquity rolling in their graves….

At stake is a dispute for the powers of government even better than the more famous duel between Aaron Burr and Alexander Hamilton, of whom we also speak.

The iconic $20 bill, with the face of President Andrew Jackson, and the $10 bill, with the face of the nation’s first Treasury Secretary, Alexander Hamilton, have long pitted two ideological extremes against each other as they pass along as some of the most used denominations in circulation.

But now, the money powers at the Treasury Department have decided that it is time to add a woman’s face to the money supply as well.

As such, the powers-that-bank have decided to oust Andrew Jackson from the line up, and with it, part of his legacy.

It will be “removed in favor of a female representing the struggle for racial equality,” according to CNN, while an early proposal to remove Alexander Hamilton’s bill will be scrapped, though the proposal includes a redesign on the backs of his and several other notes with scenes from the Woman’s Suffrage Movement, Susan B. and all the gals.

Treasury Secretary Jack Lew is expected to announce this week that Alexander Hamilton’s face will remain on the front of the $10 bill and a woman will replace Andrew Jackson on the face of the $20 bill, a senior government source told CNN on Saturday.

Dramatically, it seems that there was a backlash to counter the coup against Hamilton, including support from former Federal Reserve chairman Ben Bernanke:

The decision to make the historic change at the expense of Hamilton drew angry rebukes from fans of the former Treasury Secretary. The pro-Hamilton movement gained steam after the smash success of the hip-hop Broadway musical about his life this year.

Those pressures led Lew to determine that Hamilton should remain on the front of the bill.

And there’s a reason for Bernanke’s bias towards Hamilton.

Here’s the scoop from the Economic Policy Journal, who called it a “despicable decision”:

It was Hamilton, who from the early days of the nation clamored for a central bank and a strong interventionist federal government.


I have quoted Thomas DiLorenzo on the evil Hamilton before:


Hamilton was a compulsive statist who wanted to bring the corrupt British mercantilist system — the very system the American Revolution was fought to escape from — to America. He fought fiercely for his program of corporate welfare, protectionist tariffs, public debt, pervasive taxation, and a central bank run by politicians and their appointees out of the nation’s capital….


Hamilton complained to George Washington that “we need a government of more energy” and expressed disgust over “an excessive concern for liberty in public men”…


The Philadelphie Federal Reserve publication. A History of Central Banking in America, reports:


Alexander Hamilton, the first Secretary of the Treasury, urged Congress to also assume the war debts of the individual states and then create a national bank to help refinance all these debts. Hamilton’s proposal faced major opposition. Critics said that Hamilton’s bank was unconstitutional, would be a monopoly, and would reduce the power of the states. Although Hamilton won, the bank’s charter was limited to 20 years.

And that’s right where Andrew Jackson’s legacy with the banks picks up.

With the charter of the first “Bank of the United States” ending, Jackson was determined to stop the charter of the second “Bank of the United States” and famously stated:

“You are a den of vipers and thieves. I intend to rout you out, and by the eternal God, I will rout you out.” (Andrew Jackson, to a delegation of bankers discussing the recharter of the Second Bank of the United States, 1832)

President Jackson likened their agents to the hydra-beast, with its many heads, and even survived an assassination attempt, by staving off an attacker personally.

The bankers, and the powerful families including the Rothschilds who supported it, wanted a “national bank” because they could load the board with “their” guys and outweigh the will of the people and the normal channels of government.

Of course, the same exact state of affairs has been going on today for more than a century with the Federal Reserve, which is run by the successors to the same exact banking interests, including the still immensely-powerful Rothschild family.

The struggle is depicted well in “The Money Masters,” which spans several centuries of history with the threat of banking powers over individual sovereignty in stark contrast. To be sure, there is an important and nefarious plot afoot to ensnare you, your family and everyone on the block with debt.


There is a line, and you should figure out what side of it you’re going to be on.

Jackson narrowly succeeded in staving off banker domination of the U.S. during his day.

Of course, Andrew Jackson, who was the United States’ seventh president, was also a complete controversy his entire lifetime. It is no surprise that the same people who took down the Confederate flag from the South on the back of a mass shooting tragedy are now trying to tear down the image of a particularly controversial and intriguing figure from the American past.

Jackson was a recalcitrant and unyielding general and war hero, and later an outsider riding a wave of populist support into the White House, bringing in sometimes unscrupulous companions, and plenty of Masons. Many of his backers were diametrically opposed to the entrenched power of New York bankers and speculators, as well as patrician politicians who dominated the first phase of politics in the nation’s history. Jackson played a nasty role in the Trail of Tears affairs with Indians, too, and with the South and Western expansion of slave-friendly territories. Many shades of grey.

Meanwhile, behind the scenes in the founding days of this country, Alexander Hamilton, an advocate of strong central government, and maneuvered on behalf of his banker masters to collectivize the war debt from the states and create a central bank to control the financial strength of the country, and ingrain the early United States with the mindset of the British masters they had just fought to shake off.

After the creation of the Federal Reserve in 1913, and the crisis and consolidation of wealth during the Great Depression, and ever since the 2008 economic collapse, the rule by bankers has become a foregone conclusion, though there will be more chances to shake off their yoke of control. (BitCoin is one possible avenue; Congressionally-controlled greenbacks another; gold and silver yet another…)

Erasing Andrew Jackson from the faces of the fiat funny-money that is passed around by an increasingly ignorant and dependent society (which itself has adopted digital currency as the new norm) will further cut off the past from the masses, and ensure their enslavement.

Meet Trump 2.0: "Be Afraid, Anti-Trump Forces, Be Very Afraid"

Authored by Chris Cillizza, originally posted at The Washington Post,

Gone was "Lyin' Ted."  In its place was "Senator Cruz." Gone was the long-winded speech that went nowhere. In its place was a succinct recitation of states and delegates won. Gone was the two-day vacation as a reward for winning. In its place was an early morning trip to Indiana followed by another planned stop in Maryland.

Donald Trump 2.0 made his official debut Tuesday night following his sweeping victory in New York, a win that looks to net him 90 delegates and reestablishes him as the man to beat in the Republican presidential race.

That version of Trump was markedly more disciplined, gentler and more appealing than the version of Trump we've seen for much of the last year. And, that fact should scare the hell out of establishment Republicans who believed that their efforts to keep Trump from the 1,237 delegates he needs to formally capture the GOP nomination was beginning to catch on.

Why? Because it's clear, at least for now, that Trump is listening to his new political advisers -- chief among them convention manager Paul Manafort and national field director Rick Wiley. Trump's change in tone on Tuesday night was absolutely unmistakeable to anyone who has paid even passing attention to his campaign to date.  The man who had built his frontrunning campaign on a willingness to always and without fail take the race to its lowest common denominator -- was suddenly full of respect for the men he beat and full of facts about the state of the race.

"We have won millions of more votes than Senator Cruz, millions and millions of more votes than Governor Kasich," Trump said. "We've won, and now especially after tonight, close to 300 delegates more than Senator Cruz."

The change in tone is absolutely necessary if Trump wants to not only find a way to 1,237 delegates but also unite the party behind him in any meaningful way heading into the general election campaign this fall. The truth is that Trump has to play an outsider and an insider game from here on out. The outsider game is to keep winning primaries by convincing margins like he did in New York. The insider game is to show unbound delegates as well as party leaders and influencers that he can be magnanimous, that he can be a uniting force within the party.

Calling Cruz "Lyin' Ted" is a great laugh line at a Trump rally but accusing the Texas senator of holding up the Bible and then putting it down and lying isn't exactly the sort of rhetoric you need or want from a candidate who needs to bring the party together behind a common enemy in Hillary Clinton. It's the difference between being voted "class clown" and being elected student body president. The former delights in taking the low road for cheap laughs. (I speak from experience.) The latter takes the high road even if it's against his or her own natural instincts.

Can Trump keep it up?  Discipline on a single night or even a single week is one thing. Discipline over several months amid what will be continued attacks from both Cruz and the "stop Trump" movement is something else. And, listening to your new advisers when they are, well, new is easier than listening to them when it's been a few months of biting your tongue and fighting back some of your natural attack instincts.

But, Trump has shown -- both on Tuesday night and over the past week or so -- an ability to reign himself in that suggests he understands that this new and improved version of himself is the one that can actually win the Republican presidential nomination

Be scared, anti-Trump forces. Be very scared.

*  *  *

And as Reuters reports, the message appears to be getting through as U.S. Republican officials began meeting on Wednesday, a day after Donald Trump's crushing victory in a New York presidential nominating contest, and said he has been winning growing acceptance within their ranks - but they want to see the billionaire do more to mend fences with the party establishment.

Trump was the focus for the party's spring meeting of 168 Republican National Committee (RNC) members in Hollywood, Florida. The three-day conclave at an oceanside resort will take stock of the race for the White House and prepare for a possible contested convention in July in Cleveland.


The New York real estate mogul's win Tuesday in his home state over rivals Ted Cruz and John Kasich was an important milestone for RNC members, who said it could put him on a pathway to acquire the 1,237 delegates needed to win the nomination outright without a contested convention.


"There are a fair number of RNC members who were discounting his chances of success when we met in January and now see that he’s building a substantial lead and may in fact get to 1,237 before we get to the convention," said Steve Duprey, an RNC member from New Hampshire.


"The New York results were such an overwhelming win," Duprey said. "It's impressive. That's what I've heard people talking about."

Trump, Cruz and Kasich all sent envoys to the meeting to explain their pathways to the nomination.

South Carolina Republican Party Chairman Matt Moore said Trump's recent hiring of Rick Wiley, a Republican veteran who was former presidential candidate Scott Walker's campaign manager, was a good sign.


"It’s a positive signal despite a lack of general outreach over the past year, and I think the Trump campaign, for all the bluster, recognizes that the RNC will be an integral partner if he is the nominee and it’ll be almost impossible to win the presidency without the RNC as a partner," Moore said.

In a good sign for Trump, there appeared to be no significant move by the Republican leadership, at least at this meeting, to change the rules governing the convention. There has been talk of rewriting the rules in a way that could benefit an establishment-backed candidate like Kasich.

Oil Market Hype And Crisis Signal Greater Troubles Ahead

Submitted by Brandon Smith via,

Most people are not avid followers of economic news, and I don’t blame them. Financial analysis is for the most part boring and tedious and you would have to be some kind of crazy to commit a large slice of your life to it.

However, those of us who are that crazy do what we do (and do it independently) because underneath all the data and the charts and the overnight news feeds we see keys to future events. And if we are observant enough, we might even be able to warn people who don’t have the same proclivities but still deserve to know the reality of the world around them.

Most Americans and much of the rest of the planet probably was not aware of the recent oil producer’s meeting in Doha, Qatar this past Sunday, nor would they have cared. A bunch of rich guys in white dresses talking about oil production levels does not exactly spark the imagination. What the masses missed, though, was an event that could affect them deeply and economically for many months to come.

A little background highly summarized…

After the derivatives and credit crisis launched in 2007/2008 the Federal Reserve responded to disastrous levels of deflation with a fiat money printing bonanza. Everyone knows this. The problem was the central bankers never had any intention of actually using all that “cash” to support Main Street or the fundamentals of the economy.

Instead, they used their printing press and digital loan transfers to artificially re-inflate the coffers of banks and major corporations. It was a blood transfusion for vampires, if you will.

Through the use of TARP (Troubled Asset Relief Program), quantitative easing, artificially low interest rates, and probably a host of secret actions we’ll never hear about, a steady stream of capital (or debt, to be more precise) was pumped through corporate conduits. The goal? To keep the U.S. from immediate bankruptcy through treasury bond purchases, to boost bank credit, and to allow companies to institute an unprecedented program of stock buybacks (a method by which a corporation buys back its own shares to reduce the amount on the market, thereby manipulating the value of the remaining shares to higher prices).

As the former head of the Federal Reserve Dallas branch, Richard Fisher admitted in an interview with CNBC:

“What the Fed did — and I was part of that group — is we front-loaded a tremendous market rally, starting in 2009.


It’s sort of what I call the “reverse Whimpy factor” — give me two hamburgers today for one tomorrow."

Why would the Fed want to engineer a hollow rally in stocks? As I have said in the past, they did this because they know that the average American watches about 15 minutes of television news a day and gauges the health of the economy only on whether the Dow is green or red. From 2009 to 2015, the Fed felt it needed to support markets through fiat and keep the public placated and apathetic.

Stocks and bonds were not the only assets being propped up by the Fed, though. In tandem, oil markets were artificially inflated.

Oil suffered a historic spike in 2008, then collapsed to near $40 (WTI). Starting in 2009 and the initiation of major stimulus measures by the Fed, oil prices came back with a vengeance; almost as if the spike in 2008 was merely a measure to psychologically prepare the public for what was to come. In 2010 prices climbed near the $90 mark, then in 2011 they peaked at around $115 a barrel.

Then, something magical happened - in December, 2013, the Fed announced the Taper of QE3, something very few people predicted would actually happen (you can read this article breaking down why I predicted it would happen).

The taper involved slowly cycling out Fed purchases a month at a time. By mid-2014 the taper was nearing completion. Suddenly, oil markets began to tank. By October, 2014 the Fed finished the taper and oil collapsed, from $95 a barrel to a low of under $30 a barrel at the beginning of 2016. The correlation between the Fed taper and the overwhelming drop in oil prices is undeniable. Clearly, high oil prices were primarily dependent on Fed QE.

While equities fluctuated heavily after the end of QE3, they were still supported by the Fed’s other pillar – near zero interest rates. NIRP allowed the Fed to continue funneling cheap or free money to banks and corporations so they could keep stock buybacks rolling, but oil was done for.

Now, until recently, oil markets have NOT reflected the true state of the global economy. All other fundamental indicators have been in decline since the crash of 2008, including global exports, imports, the Baltic Dry Index, manufacturing, wages, real employment numbers, etc. Oil consumption in the U.S., according to the World Economic Forum, has sunk to lows not seen since 1997. Current levels of oil consumption are FAR below projections made in 2003 by the Energy Information Administration. By most tangible measurements, we never left the crisis of 2008.

Oil demand continued to fall but prices remained high because of Fed intervention. My theory: As with stocks, the Fed at that time needed to pump up the only other indicator the mainstream might notice as a sign of dangerous deflation – energy prices.  Dwindling demand is the real problem being hidden in chaos surrounding arguments over production.  The establishment prefers we focus completely on supply while ignoring the warnings of falling demand.

QE was the first pillar to be pulled from the false recovery, and oil markets plunged. At the end of 2015, the Fed removed the second pillar of NIRP and raised interest rates. OPEC members met to discuss a possible production freeze agreement but the conference failed to produce anything legitimate. This resulted in stocks crashing in extreme volatility to meet up with oil.

Then something magical happened once again. In mid-February, OPEC members and non-members arranged yet another meeting, this time with much fanfare and steady rumors hinting at a guaranteed production freeze deal. Oil began to climb back from the brink, and stocks rallied over the course of six more weeks.  All eyes were on Doha, Qatar and the oil agreement that would "save markets".

I bring up the recent history of oil markets because I want to give some perspective to those people who suffer from a disease I call "ticker tracking".  This disease causes extreme short attention span issues and loss of long term memory.  The dopamine addiction of ticker tracking makes people forget about long term trends and their relation to the events of today, to the point that they ignore all fundamentals in the name of watching little red and green lines day in and day out.

For example, the fact that the Doha meeting failed but did not result in an immediate and massive slide in oil and stocks sent ticker trackers crowing that the market "will never be allowed to fall".  Their affliction keeps them from realizing that the effects of Doha, like any other major financial event in the past, take TIME to set in.  Not to mention, they seem oblivious to the implications of oil struggling to move comfortably beyond $40 a barrel.

Remember, oil was around $60 (WTI) six months ago, and had held over $100 (WTI) for years before then.  The crash in oil markets has ALREADY happened, folks.  What we are witnessing today is the last vestiges of that crash playing out in extreme volatility.  Now we wait for equities to fall and meet oil, as they did at the beginning of 2016, and as they eventually will again.

Are stocks tracking oil prices? It may not be an absolute correlation, and they do tend to decouple at times, but the overall trend has been consistent; when oil falls, stocks loosely follow.

The Doha meeting was always a farce; that much was obvious before it even took place. Bloomberg along with other media outlets were planting rumors of backroom deals between Russia and Saudi Arabia before the Doha event which would solidify a production freeze. Numerous mainstream “experts” claimed an agreement was essentially a sure thing. Even some skeptics within the liberty movement were doubtless that a deal was certain because “the internationalists would never allow oil prices to continue to drag on the public perception of the economy.”

First, I am not a believer in the idea that global economic decisions are really made at these meetings. Any nation that has a central bank that is tied to the Bank of International Settlements and the International Monetary Fund is a CONTROLLED nation. Period. Economic arrangements are handed down from on high, not debated spontaneously in open forums. Read Harper’s 1983 article on the BIS titled “Ruling The World Of Money” for more information on how globalists control the economic policies of nations.

Second, even if a person believes that such vital economic decisions as a global oil production freeze are decided in closed meetings while the press waits just outside, why would anyone buy into the Doha event?

I am not quite sure why some people were gullible enough to think that after 15 YEARS of oil producers refusing to come together on any form of meaningful agreement they would suddenly shake hands this year. The only hope markets had was the possibility that the Doha meeting would result in an empty deal that they could spin in the mainstream news as a legitimate “production freeze.” Apparently they won’t even be getting that.

The Doha talks ended in failure. All the signs said this would happen. As I wrote in my article “Lost Faith In Central Banks And The Economic End Game”:

For anyone who was betting on oil markets to continue their rally past the $40 per barrel mark, there was a lot of bad news. Saudi Arabia crushed optimism by announcing that it would not be entertaining a “production freeze” proposal unless ALL other oil producing nations, including Iran, also agreed to it.


Iran then doubly crushed optimism by announcing an increase in production rather than committing to a freeze.


Russia then administered the final blow by releasing data showing that their oil output had risen to historic levels, indicating that they will not be entering into any agreement on a production freeze.


Besides a recent overly optimistic (and rather suspicious inventory draw) which has caused a short term rebound, all indicators show that oil will be headed back to the lows seen at the beginning of this year.

The effects of the Doha failure were delayed by a convenient labor strike in Kuwait, which caused algo trading computers to buy en masse despite the negative news.  As I pointed out on Monday, though, the Kuwait situation would be very short lived.  Now, it is time to watch and wait for Saudi Arabia and Iran to begin battling over market share and increasing production even more.  These things take a little time to develop.

Currently oil has dropped back below $40(WTI) and markets are extremely volatile. I do not believe the failure of the Doha meeting alone will translate to a fantastic drop in stocks. But, I do believe that it is a very heavy straw added to the camel's back, and there is a negative trend developing before our very eyes that will become apparent in the next couple of months.

As I have said in the past, a market entirely supported by rumors and hearsay can rally quickly, but also lose all gains at the drop of a hat. What the Doha debacle represents is a signal that the establishment is incrementally abandoning support for market systems.  This is translating to a loss of faith in central banks and major financial institutions.

On top of this, look at the incredible amount of misinformation and misdirection that went into Doha, now completely exposed. The truth is crystal; the MSM lied and obfuscated helping the establishment to drive up oil prices and stocks, all for a mere six to eight weeks of market security.  As soon as these lies were revealed, volatility began to return.

If the oil market bubble can implode (as it already has) in such a way due to the striking of fundamentals, then stocks can also be destabilized as well. It will happen, and I believe 2016 is the year it will happen.

There are those out there that miscalled how the Doha meeting would end because they were blinded by a particularly dangerous bias; they have assumed that central banks and internationalists want or need to continue propping up markets indefinitely. This is not necessarily true. In fact, I have outlined time and again evidence showing that they are planning the opposite. That is to say, they are planning to deliberately bring down markets in a controlled manner.

Oil was the most recent system to be undermined, and stocks will likely follow before the year is out. The fall in oil and the circus at Doha signals a change in strategy by the globalists. It signals a shift towards the controlled demolition of our economy and the centralization of fiscal power into a single global administrative entity. Order out of chaos.

There is a steady stream of events in the next few months that can be used as a steam valve for sinking global markets. Watch the April Fed meeting carefully. The Fed recently held two “emergency meetings” along with a third surprise meeting between President Barack Obama and Fed Chair Janet Yellen. The last time such a meeting occurred the Fed hiked rates less than a month later. I expect that the Fed will raise rates once again either this month or in June.

Also, watch for the Brexit (the British exit from the EU) referendum in June. Such a development would greatly shock an already unsteady Europe as well as the rest of the West.

And, of course, watch for trends in oil and stocks, but do not get caught up in the day-to-day mindlessness of ticker tracking. It is pointless and will not help you to understand what is happening economically. In any economic crisis, stocks are the LAST indicator to turn negative and daily analysis by itself is in no way a crystal ball.

The next couple of months should be very interesting. Stay vigilant.