Brexit Post-Mortem

By Alasdair Macleod  Re-Blogged From GoldMoney

It is a month after Britain’s surprise vote to leave the EU. A new Conservative Prime Minister and Chancellor are in place, both David Cameron and George Osborne having fallen on their swords. The third man in the losing triumvirate, Mark Carney, is still in office. Having taken a political stance in the pre-referendum debate, there can be little doubt the post-referendum fall in sterling was considerably greater than if he had kept on the side-lines.

This article takes to task the Treasury’s estimates of the effect of Brexit on the British economy and Mr Carney’s role in the affair, then assesses the actual consequences.

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Voter IDs and Voter Fraud

By Michael Ware – Re-Blogged From http://www.Constitution.com

One of the greatest concern for conservatives in the upcoming election is that of voter fraud. And to alleviate that fear, many states have crafted and passed voter Id laws. These laws in their various forms require a photo identification for a person to be able to vote. This would be one more safeguard against one side stealing the race from the other. But this is not how some see the law.

From the beginning, many have claimed that this had racial motives. The argument is simple enough. The states that are seeking to enact these laws are Republican-led Legislatures, and they are trying to dampen the black vote. Now, appeals courts are saying the same thing.

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Weekly Climate and Energy News Roundup #233

The Week That Was: July23, 2016 – Brought to You by www.SEPP.org

By Ken Haapala, President, Science and Environmental Policy Project

Political Fads: Roy Spencer has written a 22-page booklet, “A Guide to Understanding Global Temperature Data,” published by the Texas Public Policy Foundation and available on the web at no cost. The booklet covers some of the scientific research that demolish a number of fashionable beliefs on global warming/climate change. First and foremost is the fad seized upon by some politicians that global warming skeptics are funded, or paid-off, by Exxon or other oil companies, etc. The recent antics by certain Senators and state attorneys general failed to present convincing evidence. In fact, later it was claimed that the purpose of the investigations was to find evidence – as if IRS filings of Exxon are not available or not reviewed. The US Government has spent over $40 Billion since 1993 on what it calls climate science. Comparable spending by Exxon cannot be hidden.

Unlike the US government, which has not undergone a full audit since the 1990s, stockholder-held corporations are subject to rigorous audits. Conversely, a February 26, 2015 report by the U.S. Government Accountability Office (GAO) states that major impediments, uncertainties, and material weaknesses prevent its ability to conduct an effective audit. The IRS and the SCC would not permit such a report from Exxon.

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Corrupt Or Just Stupid? Markets Hand Corporations An Unlimited Credit Card

By John Rubino – Re-Blogged From Dollar Collapse

In the sound money community it’s generally understood that abandoning the last vestige of the gold standard in 1971 gave major countries effectively-unlimited credit cards – which corrupted them irredeemably.

Now – with government bonds yielding either next to or less than nothing – that corruption has begun to spread to corporations, whose bonds are being snapped up by yield-deprived investors. For example:

Japan stock investors learn to love corporate debt

(Nikkei) — A shift is taking place in the Japanese stock market. Companies that take risks rather than playing it safe and transform themselves to seize growth opportunities are the new darlings among investors.

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Zero Percent Mortgages Debut Setting Up The Next Stage For This Stock Market Bull

By Sol Palha – Re-Blogged From http://www.Silver-Phoenix500.com

Economists stated that main trigger for the financial crisis of 2008 was the issuance of mortgages that did not require down payments.  The ease at which one could get mortgages in the past is what drove housing prices to unsustainable levels. Post-crisis all banks vowed to end the practice forever, or that is what they wanted everyone to believe.   When the credit markets froze, we openly stated that the 1st sign that banks were getting ready to lower the bar again would come in the form of Zero percent balance transfer offers that had all but vanished after 2008.  A few years after 2008, banks started to mail these offers out. Consequently now, everywhere you look you can find 0 % balance transfer offers ranging from 12 months to 18 months.  The next step after that would be for banks to lower the 20% down payment required to something much lower. Currently, Bank of America and a few other banks are offering 3% down mortgages.

Now Barclays Bank has become the first British bank to turn back the hands of time; it has started to issue 0% down Mortgages under a program called “family springboard”.  There is, however, one small difference. In this instance, a parent would put 10% of the down payment into an account. If payments are made in a timely fashion, this amount is returned in three years with interest.

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Romania Did This…And Now It’s Among The Fastest Growers In Europe

By Frank Holmes – Re-Blogged From http://www.Gold-Eagle.com

In 1974 the American economist Arthur Laffer, then a professor at the University of Chicago, was having dinner with his friend Jude Wanniski, an associate editor of the Wall Street Journal. They were joined by Donald Rumsfeld and Dick Cheney, both of whom worked at the time in the Gerald Ford administration. The topic at hand was President Ford’s Whip Inflation Now, or WIN, initiative, which included proposed tax increases.

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The Fed’s Loud Talk Policy

By Peter Schiff – Re-Blogged From Euro Pacific Capital

Theodore Roosevelt’s famous mantra “speak softly and carry a big stick” suggested that the United States should seek to avoid creating controversies and expectations through loose or rash pronouncements, but be prepared to act decisively with the most powerful weaponry, when the time came. More than a century later, the Federal Reserve has stood Teddy’s maxim on its head. As far as Janet Yellen and her colleagues at the Fed are concerned, the Fed should speak as loudly, frequently, and as circularly as possible to conceal that they are holding no stick whatsoever.

Roosevelt’s “stick” was America’s military might, which in his day largely boiled down to the US Navy, which he had enlarged and modernized. To demonstrate to a potential adversary that he was prepared to use these weapons, Roosevelt sent the fleet around the world in a massive show of force. However, he took care to couch the expedition in soothing rhetoric. He even ordered the battleships to be painted white to create the impression that they were angels of mercy rather than instruments of power. The combination proved effective. America’s global influence increased dramatically during his presidency even though few shots were fired.

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Don’t Buy The SPX Hope Rally!

By Chris Vermeulen – Re-Blogged From http://www.Gold-Eagle.com

All bubbles burst; the question is when? Quantitate Easing (QE) is much like an addiction. One needs more and more to get the initial effect. However, this becomes an “asymptotic” result…whereas eventually one needs an infinite amount that will no longer give a positive effect! So, now that QE has failed, I believe there will now be the introduction of “Helicopter Money.”

Global Central Bankers constantly continue to spend their way out of their “contracting economies” which are now resulting in large ‘budget deficits’. The deficits that these policies have produced are “unsustainable” and have now created a new “fiscal crisis” within their countries. A second response has been to expand the Central Banks’ balance sheet as a way of providing liquidity to the private sector. These policies have also sent interest rates into “unprecedented” historical lows.

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Japan’s “Helicopter Money” Play: Road To Hyperinflation Or Cure For Debt Deflation?

[I DO NOT agree with the Helicopter Money thesis. Governments’ expansions of their money supplies unrestrictedly were the cause of every Hyperinflation the world has known, as for example in Wiemar Germany and more recently in Zimbabwe. –Bob]

By Ellen Brown – Re-Blogged From http://www.Silver-Phoenix500.com

Fifteen years after embarking on its largely ineffective quantitative easing program, Japan appears poised to try the form recommended by Ben Bernanke in his notorious “helicopter money” speech in 2002. The Japanese test case could finally resolve a longstanding dispute between monetarists and money reformers over the economic effects of government-issued money.

When then-Fed Governor Ben Bernanke gave his famous helicopter money speech to the Japanese in 2002, he was talking about something quite different from the quantitative easing they actually got and other central banks later mimicked. Quoting Milton Friedman, he said the government could reverse a deflation simply by printing money and dropping it from helicopters. A gift of free money with no strings attached, it would find its way into the real economy and trigger the demand needed to power productivity and employment.

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Destroying Crude Oil Price Rally – Something Dark Emerges from the Tar Pits and Oil Sands

By David Haggith – Re-Blogged From Great Recession Blog

The crude oil price rally has been completely destroyed, though I’ll admit I was wrong when I predicted crude oil prices would plummet in March or April as the perfect storm developed against oil prices. Instead, they rallied. In spite of that, I continued to believe my error was in timing and not in fact — not in the fact that another harsh fall in oil prices was beating a path to our doors.

Crude oil prices beaten down by a storm still building

So, I continued to write articles about the forces building against oil prices, even in the face of a strong rally, which many believed would set a new position for oil for the remainder of 2016. That storm has, as of today, completely clawed back the post-March rally by taking crude oil prices back to a three month low and to where they stood at the start of the year as well. West Texas Intermediate just struck $42/barrel today.

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Electrical Power Consumption & Stock Markets

By Mark Lundeen – Re-Blogged From http://www.Gold-Eagle.com

…. I haven’t covered electrical power consumption (EP) for a few months, making this a good time for an update.  Electrical power consumption is just that, the power required to drive the economy from one day to the next.  EP is an excellent metric for measuring economic growth (or its contraction), as it’s measured in the kilowatt (KW); an engineering unit that cannot be manipulated by Washington’s statisticians at the Labor Department.  The reason for this is simple; calculating EP comes down to a simple law of nature: Ohm’s Law or E=I*R.  Where E is voltage, I is the amperage demanded by the electrical grid, and R is the electrical grid’s resistance to the flow of the amperage.

A simple example of EP is as follows:  E(120 volts) = I(2 amps) * R(60 ohms).  If the demand for electrical power were to double, we would see 120V = 4 amps * 30 ohms.  You see, to maintain 120 volts, the utility would have to double the amps as resistance to the flow would be halved by the utility’s customer base demanding more amps at 120V.  Engineers and electricians understand what most people don’t about electricity; voltage is cheap.  However, to drive current (amperage) down the line you have to burn coal or fuel oil and build infrastructure, and that cost money.

From the stand point of Ohm’s Law, the electrical utility is obligated to maintain the electrical grid’s rated voltage.  The grid’s “load” is 100% determined by the utility’s customers.  Whenever someone turns on a light bulb, or starts a 500HP electrical motor to drive an assembly line, the utility must send additional amperes down the line if it’s to maintain the grid’s rated voltage.  So, it’s easy to understand that when the economy is growing, its demand for EP grows too.  When the economy is contracting, its demand for EP contracts like wise.

Barron’s has published weekly EP consumption statistics since August 1929.  In the chart below the blue plot is the actual weekly data points, the red plot is its 52Wk MA.  Before the 1970s, seasonal factors for heating and air conditioning were minimal.  After 1970 these seasonal factors became significant as residential and commercial air conditioning became a fact of life for most Americans, and to electrical utilities in all fifty states.

From 1929 to the 1960s, weekly variances in EP were insignificant, as EP was primarily used for industrial and commercial purposes.  However after 1970, to filter out the growing seasonal factors in EP, a 52Wk MA is needed to measure actual economic demand; not perfect, but good enough.

Looking at the chart’s red plot (52Wk MA), we see EP’s last all-time high in demand for power occurred eight years ago in August 2008.  Also, peak demand for electrical power was ten years ago in August 2006.  The summer of 2006 must have been a hot one!  Looking at the economy by its demand for electrical power, there has been no economic growth during the entire Obama Presidency.

Below is a Bear’s Eye View of the 52Wk MA for US EP demand (Red Plot above).  Let’s take a look at its upper portion for a historical review.  During the Great Depression demand for EP contracted by brutal 17.32%.  The 1930s also saw a smaller, yet still painful 6.58% economic contraction in 1938.

The next contraction in EP occurred in 1946.  But this 8.21% contraction was a result of shutting down American’s production lines to retool factories for peace time production, as tanks were out and automobiles were back in.  Interestingly, this second largest decline in EP didn’t come from a post war recession, or so said the editors of Barron’s at the time who were a bit amazed at this.

From 1946 to 1980, except on rare occasions, demand for electrical power saw new all-time highs on a weekly basis.  Then a significant contraction in EP occurred during the early years of the Reagan Administration.  In the early 1980s as interest rates soared to double digits, EP contracted by 4.12%.  It may not look like much, but that 4% reduction in EP caught everyone’s attention!

The popping of the high-tech bubble resulted in a 2.45% contraction in EP in 2002, but then things became weird.   Up to this point, all economic contractions in EP formed V shaped declines in the BEV plot.  A last all-time high in EP occurred, economic demand for EP then contracts as the recession develops, which ultimately reached a bottom, where demand for EP once again increased to new all-time highs as the economy recovered.

As you can see below, all that changed in August 2008.  I believe the major cause for this has been the Federal Reserve’s Zero Interest Rate Policy, which began in December 2008, and the three doses of QE the FOMC had injected into the economy.

Had the “policy makers” allowed Mr Bear to take out the trash from the sub-prime mortgage debacle, I suspect we’d have seen an economic contraction in EP of over 10%.  As you see that didn’t happen.  However, since 2008 there hasn’t been a real economic recovery either.

Before Mr Bear and his cleanup crew finally pack up and leave, expect a contraction in the demand for EP to go straight down through Mr. Obama’s photo in the chart below.

The question these charts beg to be asked is; how can Washington’s statisticians report record levels of economic growth?  That’s simple, “economic growth”, as measured by the Labor Department, is measured in dollars, not kilowatts.   And as is painfully evident in the chart below, since August 1971 when the dollar was decoupled from the Bretton Woods $35 gold peg, there has been no shortage of “economic growth” (Red Plot) for Washington’s statisticians to measure.  Though the growth in the economic demand for EP (Blue & Green Plots), has fallen far behind.

As EP has seasonal factors for heating and air conditioning, its data of summer peaks provides us with impartial observations to confirm or refute claims of “global warming.”  In the charts below I’ve plotted the weekly EP data to its 52Wk M/A.  There are two seasonal peaks for EP demand.  The smaller winter peaks occur near the vertical-grid lines (January), while the summer peaks are found between them.  Take a moment to study these charts.  As far as the demand for EP to satisfy summer cooling requirements, the data makes a better case for global cooling than warming.

This season’s peak demand for the summer has yet to pass.  This should happen sometime before mid-September.  Hopefully, the northern hemisphere sees its thermal peak soon, as “scientists” investigating the effects of “global warming” on the Arctic Ocean have gotten stuck in the ice not far north of Murmansk, Russia.

“An expedition to the North Pole intended to measure the effects of global warming ground to a halt this month when the scientist’s ship got blocked by the ice packs near Murmansk, Russia, reports reveal.” – Breitbart / Big Government 21 July 2016

http://www.breitbart.com/big-government/2016/07/21/global-warming-expedition-stuck-in-arctic-sea-because-of-too-much-ice/

This is embarrassing!  And not the first time “scientists” investigating “global warming” have been exposed as gullible dolts.  These people only do this because some governmental bureaucracy is funding their research with tax money, but only if the “scientists” objective is to find data to confirm dubious allegations of global warming.  Global warming skeptics need not apply for the funds.

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The 3 Big Stories NOT Being Covered (Part 1)

By Andy Sutton & Graham Mehl – Re-Blogged From http://www.Silver-Phoenix500.com

Anyone who has read this publication for any length of time knows that topics range from mainstream to the totally uncovered stories. As we look out not just across the economic landscape, but across the world in general, we are seeing an alarming increase of serious situations that are receiving little or no coverage at all from the western media. Thankfully there are hundreds if not thousands of reliable people who chip in with analysis and stories of their own on some of these topics.

We’ll start out by saying there many, many more uncovered stories, but these are the three we feel could be game changers in the near to medium term. We picked these three themes because, in terms of magnitude, they will have the biggest impact on the world if they continue on their present trajectories. Given the length of each analysis, we are going to break this into a three-part series.

PART 1 – Russia: Tensions, Turmoil and Western Hubris

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Japan’s Lemming Syndrome

By Michael Pento – Re-Blogged From http://www.gold-eagle.com

The financial world is buzzing about former Fed chairman Ben Bernanke’s recent trip to Japan, where he advised Japan’s central bank chief Haruhiko Kuroda on how to manage his nation out of multi-decades of stagnant growth. Channeling economist Milton Friedman, Bernanke warned that Japan was vulnerable to perpetual deflation and stagnate growth and that helicopter money–where the government issues non-marketable bonds with no maturity date and the Central Bank buys them with counterfeited credit–was the most useful tool in overcoming this condition.

Bernanke encouraged Japan to carry on with the Abenomics policies that have failed to date by supplementing monetary policy with even more fiscal stimulus—as if Japan’s 230% debt to GDP ratio wasn’t enough. And he assured Abe and his staff that the Bank of Japan (BOJ) has instruments to ease monetary policy yet further.

And in case this village needed another idiot, Nobel laureate Paul Krugman, also chimed in. Arguing that Japan should raise its inflation target to 4 percent and embark on a significant but temporary fiscal stimulus to boost prices in the economy. Speaking at a conference on Thursday in Singapore, Krugman called for “a big burst of government spending and maybe also cash donations.”

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John Kerry: Air Conditioners as Big a Threat as ISIS

By Eric Worrall – Re-Blogged From http://www.WattsUpWithThat.com

US Secretary of State John Kerry has set his sights on the nation’s air conditioners, claiming that the climate impact of air conditioners are as big a threat to life as the Islamic State terrorist group.

kerry-on-isis-and-air-conditioning

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Investors Weekly Update

By Jack Chan – Re-Blogged From http://www.Silver-Phoenix500.com

Our equity/bond model – This long-term reliable investing model provides investors with simple decision making in the markets:

  • When the model favors stocks, investors should overweigh in equities for maximum growth.
  • When the model favors bonds, investors should overweigh in bonds for safety.

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On Sea Level Rise

By Rud Istvan – Re-Blogged From http://www.WattsUpWithThat.com

Background

There is no doubt that interglacials change sea level (SL). And that sea level rise (SLR) can be dramatic on millennial interglacial time scales. That’s what happens when the vast Laurentide ice sheet (among others) melts. But sea level has changed relatively little in the past 7 millennia. We know from archeology that it rose somewhat in the Medieval Warm Period, dropped some during the Little Ice Age, and has been rising slowly since based on tide gauge records. This mostly natural variation is, from 1950-2000, about +1.8mm/year to 2.2mm/year (discrepancy explanation and references follow below). That rate is no cause for alarm. We coped with it for the past century, and can cope with it for the next.

clip_image002

The anthropogenic global warming (AGW) question is whether SLR will accelerate into catastrophic AGW (CAGW) requiring urgent mitigation? Warmunists argue yes, with many alarming images such as National Geographic’s photoshopped Statue of Liberty half submerged (which would require that all of Greenland and Antarctica melts before the next

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Don’t Get Sucked Back Into The Stock Market

By Justin Spittler – Re-Blogged From http://www.Gold-Eagle.com

The S&P500 hit a new all-time high. It topped 2,130 for the first time since May 2015. The benchmark index is now up 6.9% over the past two weeks.

All good, right?

It might seem that way…if we were only analyzing US stocks.

The thing is, in nearly every other market, stocks are still headed lower:

  • The Japanese Nikkei 225 is down 15% this year. It’s down 28% since last June.
  • The STOXX Europe 600, which tracks 600 large European stocks, is down 9% this year. It’s fallen 20% since April 2015.
  • The FTSE 100, Great Britain’s version of the S&P500, is down 6% since last April.

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Relationship Between Money Supply And Stock Prices

By IM Vronsky – Re-Blogged From http://www.Gold-Eagle.com

Internationally known bond strategist Hunkar Ozyasar makes a scholarly and comprehensive description of the material influence Money Supply has on Stock Prices:

“Money supply is one of the most basic parameters in an economy and measures the abundance or scarcity of money. Stock prices tend to move higher when the money supply in an economy is high. Plenty of money circulating in the economy both makes more money available to invest in stocks and also makes alternative investment instruments, such as bonds less attractive.

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Was Turkey Coup Staged?

By Michael Snyder – Re-Blogged From Economic Collapse Blog

Barack Obama’s “friend” in Turkey is a deeply corrupt radical Islamist dictator that has just staged a coup to consolidate his grip on power.  As I have reported previously, 1,845 “journalists, writers and critics” have been arrested for “insulting” President Erdogan over just the past two years, and a couple of years ago he had a monstrous 1,100 room presidential palace built for himself that is 30 times larger than the White House.  With each passing day, more evidence emerges which seems to indicate that the recent “coup” was a staged event meant to enable Erdogan and his allies to eliminate their enemies and solidify their stranglehold over the nation.  At this point the number of victims of “Erdogan’s purge” has hit 50,000, but the final number will not be known for quite some time.

Of course there is a possibility that the coup was not staged, but if it wasn’t staged it was the worst military coup that I have seen in my entire lifetime.  As Fox News has pointed out, not a single high level member of government was killed or detained…

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Analysis of Washington Post Police-Shootings Data Reveals Surprising Result – Nearly 2x More Whites than Blacks Shot by Police

When Arrests Go Bad

By Willis Eschenbach – Re-Blogged From http://www.WattsUpWithThat.com

I got to thinking about the issues of race regarding the recent tragic police shootings, both the shootings of police and the shootings by police. The best data is from the Washington Post, which has a detailed site listing all of the people killed by police, which begins in 2015 and goes to the present. I thought I’d analyze their data. I looked at the data for the year 2015 because the full 2016 data is not in yet, and also in order to be able to compare it to other annual datasets.

First, there were 990 fatal police shootings in 2015. How does this compare to other causes of death? Well, I can’t tell you because so few people are killed by police. The number is so small that it is outside the range of the usual mortality lists. I can say that death by police is not in the top fifty causes of death in the US, so it is relatively rare. It is extremely rare for women, because the overwhelming majority of those killed by police were men.  And I would be greatly remiss if I did not highlight that in addition to the 990 civilian deaths, there were 51 police deaths in 2015 …

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Weekly Climate and Energy News Roundup #232

The Week That Was: July16, 2016 – Brought to You by www.SEPP.org

By Ken Haapala, President, Science and Environmental Policy Project

The Frederick Seitz Memorial Award: At the 34th Annual Meeting of the Doctors for Disaster Preparedness (DDP), SEPP Chairman Fred Singer presented the annual Frederick Seitz Memorial Award to John Christy for his outstanding contributions to empirical science. No stranger to the readers of TWTW, Dr. Christy is the Distinguished Professor of Atmospheric Science and Director of the Earth System Science Center, part of the National Space Science & Technology Center, at the University of Alabama in Huntsville and the State Climatologist for Alabama. The National Space Science & Technology Center is funded by both NASA and the National Weather Service (NOAA).

In 1989, Christy and Roy Spencer (then a NASA/Marshall scientist) co-developed the method of measuring global atmospheric temperatures from satellite data. The data goes back to December 1978. Their landmark paper, “Precise Monitoring of Global Temperature Trends from Satellites,” was published by Science in March 1990. The abstract read, in part:

“Passive microwave radiometry from satellites provides more precise atmospheric temperature information than that obtained from the relatively sparse distribution of thermometers over the earth’s surface. Accurate global atmospheric temperature estimates are needed for detection of possible greenhouse warming, evaluation of computer models of climate change, and for understanding important factors in the climate system.”

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‘Boy Who Cried Wolf’ Syndrome

By Rod Martin, Jr. – Re-Blogged From http://www.WattsUpWithThat.com

Climate Scares—The New Fable

climate-boogeyman

Climate scares are like the old Greek fable. Most of us learned about Aesop’s fables long ago, likely in grade school. But just in case you don’t know the story of the boy who cried “wolf,” here’s a very short synopsis.

A boy was given the responsibility to guard the town’s flock of sheep. Boring work. So boring in fact, that the boy was motivated to stir up some excitement by yelling, “Wolf!” You see, he knew the townspeople would come running to help protect their flock from the ravenous predator. No wolf—merely a shepherd boy who could not contain his laughter at the townspeople’s gullibility. After a few times of being tricked, the townspeople started to turn a deaf ear. The boy couldn’t be trusted. His warnings were hollow. When the wolf did show up, sheep died.

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Record Bond And Stock Prices Sending the Same Message

By Michael Pento – Re-Blogged From http://www.Silver-Phoenix500.com

The S&P500 is trading near an all-time record high. But investors should not take this as the all clear signal. According to most indicators, the market is now more overvalued than ever before.

The Cyclically Adjusted Price to Earnings Ratio analyzes the value of the S&P500 Index with the 10-year average of “real” (inflation-adjusted) earnings as the denominator to determine if the market as a whole is overvalued or undervalued. Today this ratio sits at 26.73, close to the short-term high of 27.2 seen in 2007 and well above its historic average of around 16.

Then we have the Q ratio, developed by James Tobin. This metric takes the total price of the market divided by the replacement cost of all its companies’ assets. The average Q ratio is .68, but the latest estimate of the Q ratio .98.  This suggests that the S&P 500 is currently dramatically above the mean.

Adding to this, the total market cap of U.S. stocks is now 122.5% of GDP. This is the highest level since mid-2000, which was during the NASDAQ bubble. This measure reached its peak at 142%, before crashing back to the more traditional level of just 70% by 2002.

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Stats, Europe, & US Markets

By David Chapman – Re-Blogged From http://www.Gold-Eagle.com

More Questionable Numbers – The Latest US Jobs Report

The June nonfarm payrolls came in at a stunning up 287,000, following a revised downward May nonfarm payrolls of 11,000. The surprise number gave way to a ‘wow’ moment, and the stock market soon rallied to new all-time highs.

The Bureau of Labor Statistics (BLS) conducts two job surveys each month. Actually, one is carried out by the US Census Bureau (household survey), and the other by the BLS (establishment survey). The two reports don’t necessarily jibe, as differences abound. The household survey conducts interviews with individual households, while the establishment survey does the same, only with businesses. Two surveys, two separate results.

The nonfarm payrolls reported is from the establishment survey, but the household survey determines the unemployment rate and other statistics. The key to the most recent numbers is that many of the jobs were in leisure and hospitality, which tend to be low paying and part-time. The labour force participation rate rose, as more people came looking for work and that helped push up the unemployment rate.

Canada’s equivalent of nonfarm payrolls were not encouraging. Job loss was small, but full-time jobs were replaced with part-time jobs. Not a healthy sign.

The Economist and the Italian Job

Esteemed magazine The Economist has joined the ranks of the concerned over the deteriorating banking situation in Italy, where there are some US$400 billion of non-performing loans (20% of Italy’s GDP) on Italian banks’ books. The Economist points out many of the same problems we noted a week earlier, including the inability under current EU rules to provide a direct taxpayer bailout to the banks. Instead it has to be a bail-in.

Trouble is, much of the non-performing loans are held not by institutions as one would expect, but by individuals. Previous attempts at bail-ins have resulted in suicides and demonstrations. What the article does not get into is the potential for contagion, and the growing problem of EU banks in general, where many of the biggest banks are in trouble as their stock prices have plunged precipitously.

The EU is plagued with infighting, anemic growth, high debt, deflation and some $10 to $12 trillion of debt trading at negative interest rates. Bonds issued by the EU, Germany, Switzerland and the Netherlands trade at negative yields. And then there is Brexit, and maybe even an Auxit (Austria).

Brexit Revisited

A week can’t go by without talking about Brexit. The United Kingdom has a new prime minister in, Theresa May, and how she got there was worthy of the Kremlin. She has promised to be a tough negotiator on Brexit, but so has the EU. The UK powers want to take their time. The EU wants to hurry. The clash could be interesting, and the Brexit promises to be with us for some time.

US Election Season – Now the Real Fun Begins

The final run of the US election season kicks off next Monday July 18, with the Republican National Convention (RNC) in Cleveland. The Democratic National Convention (DNC) kicks off on July 25 in Philadelphia. Once the conventions are out of the way, three months of mudslinging will follow. The conventions themselves could be controversial, with heavily armed police and protestors preparing to clash.

Both current candidates for president are extremely low in approval polls, with the winner likely to be whoever is less despised than the other. Currently the Democratic candidate (Hillary Clinton) leads the Republican candidate (Donald Trump) by either a wide margin or a narrow margin. The final leg of the campaign to Election Day on November 8, 2016 promises to be volatile and potentially violent.

Weekly Market Review

Stocks

The US stock market (S&P500 and Dow Jones Industrials) has roared to new all-time highs. Ok not all of it, as the NASDAQ and especially the Dow Jones Transportations have not yet joined the party. A divergence? A non-confirmation? Time will tell.

The roaring jobs market and the realization that the Fed is probably one and done with regards to interest rate hikes have helped fuel the run to new all-time highs. But the rally to new highs has been very narrow, reminiscent of the famous ‘nifty-fifty’ rally of 1972-1973 that culminated in a 50% collapse in the markets into 1974. There have also been net withdrawals from equity funds, and some evidence that it is instead central banks buying.

The market rallied to new all-time highs, with only shallow corrections seen in the past couple of years (under 20%). We take a look at the various cycles impacting the US stock markets and muse about a possible 90-year cycle of major depressions, with the last one seen in the ‘dirty thirties’ with the 89% drop in the markets into 1932.

Currencies

The US Dollar Index continues to tread water following Brexit, with little movement this past week. The euro also had little movement, although the Japanese yen fell quickly from its high. We look once again at the Canadian dollar and its amazing tracking with WTI oil prices. The fact that the Canadian economy continues to be weak and the BoC has lowered its growth forecast has not helped.

Gold and Precious Metals

Gold had a corrective week, but so far it is shallow and all trends remain intact. Silver actually gained small on the week, and the gold stocks hit new 52-week highs once again before closing off small. Platinum and palladium joined the party, and both made new 52-week highs, joining gold, silver and the gold stocks.

Gold has been rising on negative interest rates, anemic growth, high debt and the central banks running out of ammunition to deal with the crisis. But the market has at short term become overextended, so a correction would be healthy. We examine two schools of thought about the current market:

One that believes that the current rally is a correction to the long breakdown from the highs of September 2011, and the other that believes that the correction down from September 2011 was itself a major correction to the bull market of 2001-2011. We are now embarking on a new bull phase to the upside.

Strangely, both scenarios are generally aligned — and both could see new all-time highs for gold and silver in the end. The recovery in gold stocks has been remarkable. Moreover, in a space of 9 months the TSX Gold Index (SPTTGD) has already recovered 50% of what it lost from September 2011 to its bottom in September 2015.

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Great Numbers, Curious Timing

By John Rubino – Re-Blogged From Dollar Collapse

Pretend you’re running a corrupt government and something big and scary happens in another part of the world. Brexit, for instance. You’re quite naturally worried about the impact on your local economy and political system. What do you do?

Well, one obvious thing would be to call the statisticians who compile your economic reports and tell them to fudge the next batch of numbers. Since you already do this prior to most major elections, they’re neither surprised by the request nor concerned with how to comply. They simply go into the black boxes that control seasonal adjustments or fabricate things like “hedonic quality” or “imputed rent,” and bump up the near-term levels. Later revisions will lower them to their true range but by that time, hopefully, the danger will have passed and no one will be paying attention.

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$14,000 per MWh

green_money_windmills

The South Australian Government been forced to beg fossil fuel operators to bring mothballed plants back online, to contain wild swings in electricity spot price caused by unstable renewable production, prices which last month peaked at $14,000 / MWh – up from more normal prices of $100 / MWh which prevailed before political favouritism towards renewables messed up the market.

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Vanishing Lady Liberty

By Guy Christopher – Re-Blogged From http://www.Gold-Eagle.com

The very first word anyone ever saw on a circulating United States coin was the word “LIBERTY.”

From half-cents to silver dollars, each featured the likeness of an unnamed woman. The images varied, thanks to different engravers, but together they became recognized as Lady Liberty.

Many, maybe most, of young America’s citizens were illiterate. “Liberty” may have been the first word they ever learned to read.

If not, they surely knew her face. The Revolutionary War for them was not ancient history.

The Founding Fathers knew all gold, silver, and copper is sound money and didn’t mind that American coinage circulated alongside colonial and foreign coins depicting kings and queens.

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Tyrants and War Criminals Demand Climate Action

By Eric Worrall – Re-Blogged From http://www.WattsUpWithThat.com

The Guardian is worried that if Donald Trump is elected as US President, he will reject demands for climate action which are supported by tyrants, war criminals and genocidal maniacs.

Kim Jong-un - by User P388388 on Wikimedia Commons - Own work, CC BY-SA 4.0, https://commons.wikimedia.org/w/index.php?curid=37757238 Bashar Al-Assad by Kremlin.ru, CC BY 4.0, https://commons.wikimedia.org/w/index.php?curid=44370013 Robert Mugabe by Kremlin.ru, CC BY 4.0, https://commons.wikimedia.org/w/index.php?curid=40102783

Kim Jong-un (North Korea)        Bashar Al-Assad (Syria)    Robert Mugabe (Zimbabwe)

Donald Trump would be world’s only national leader to reject climate science

Sierra Club report finds science of climate change accepted by leaders of every country recognized by US – including Bashar al-Assad and Kim Jong-un.

Donald Trump would be the only national leader in the world to dismiss the science of climate change should he become president, putting him out of step even with Syrian president Bashar al-Assad, Zimbabwe’s Robert Mugabe and Kim Jong-un, the leader of North Korea.

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Brexit Shifts the Ground

By Jo Nova – Re-Blogged From http://joannenova.com.au

Don’t underestimate the Brexit effect. The landscape is shifting.

UK FlagThe Paris agreement just became less likely. The UK Dept of the environment will submerge, and Boris Johnson, the outspoken skeptic and Brexit figurehead, has been promoted to foreign minister.

James Delingpole says: Britain’s New Prime Minister Drives A Stake Through The Heart Of The Green Vampire

Britain no longer has“the greenest government ever.”   This is good news. Very good news. The agonised screeching of all the usual suspects in the Environmental movement will be enough to sustain many of us in lols for weeks and months to come.

Five years ago, could we imagine an “infamous climate denier” like Boris rewarded in any Western Government? There were closet skeptics in the cabinet, but that’s not the same. In Australia, Tony Abbott once said climate change was “crap” and somehow still managed to become PM, but once he was, his official line was the permitted global warming story. ( He pandered, but in the most sensible possible way. And because he did not flagrantly add to the climate slush fund they still called him a “denier” but he rarely said anything openly skeptical.).

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Helping China put American Farmers Out of Work

By Eric Worrall – Re-Blogged From http://www.WattsUpWithThat.com

The World Bank, to which the USA is by far the largest contributor, has launched a climate program in rural China, to help Chinese farmers improve infrastructure and productivity. This will in turn help the Chinese drive down the profits and job opportunities in rural America.

Project Helps Farmers Adapt to Climate Change in China

About 380,000 rural households in six Chinese provinces are benefiting from a project that helps build sustainable and climate-smart agriculture. The project is funded by the World Bank and the Government of China, with additional technical expertise from the Investment Centre of the Food and Agriculture Organization (FAO) of the United Nations.

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No Wonder the Stock Market’s So High: It’s All Corporate Buybacks

By John Del Vecchio – Re-Blogged From http://economyandmarkets.com

Not too long ago Carly Fiorina was still in the race. Everyone remembers Carly as the former CEO of Hewlett Packard who lost her job. I remember when Carly took over as the Chief Executive back in 1999. In her six-year tenure, the company bought about $14 billion of its stock, which was $2 billion more than it had made in profits.

Again, that was just in six years. Over the next six years, her first two successors bought back about $53 billion. That was as of 2011. I don’t even want to know how much the current CEO has purchased, as corporate buybacks have only grown more popular in recent years.

I was reading an article about buybacks published in Business Insider this past weekend. It said that they’ve accounted for almost all of the stock market’s gains since 2009.

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Unemployment & Civil Unrest

cropped-bob-shapiro.jpg   By Bob Shapiro

In Summer 1965, the US suffered through much turmoil, including the Watts riots.

Today in the US, we again are having civil unrest, but with a major difference. Today’s unrest appears to be more organized, with police and other authorities as specific targets.

Even the “lone wolf” attacks seem to have a common thread tying them together – Islam. Now, I’m not saying that most American born muslims are set on destroying our country, but before you dismiss me as a racist, you might want to reread the current events of the last couple of years.

Most of the press stories seem to be placing the blame squarely on the Republicans – currently in office and hopefuls on the campaign trail. While many Republicans in Congress are complicit with the policies that are hurting all Americans – including poor blacks – for the most part, they aren’t the ones coming up with these stupid policies.

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The “Mystery” Of Who Is Pushing Stocks To All Time Highs Has Been Solved

By Tyler Durden – Re-Blogged From http://www.ZeroHedge.com

One conundrum stumping investors in recent months has been how, with investors pulling money out of equity funds (at last check for 17 consecutive weeks) at a pace that suggests a full-on flight to safety, as can be seen in the chart below which shows record fund outflows in the first half of the year – the fastest pace of withdrawals for any first half on record…

… are these same markets trading at all time highs?  We now have the answer.

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Brexit & Gold

By Kal Kotecha – Re-Blogged From http://www.Gold-Eagle.com

Since its discovery many centuries ago, gold has managed to maintain its relevance and stature to this day. Used to make royal crowns and other valuable items, the value of gold has been high as from its discovery days. The Greek scientist Archimedes (287-212BC), the inventor of the Archimedes Principle was the first person to find a way to measure the density of gold and other metals without deforming them.

This tale begins when King Hieron II of Syracuse suspected the goldsmith, whom he had commissioned to manufacture the royal crown, and suspected the  gold given to him was replaced with an equal weight of silver. The king therefore asked Archimedes to determine the purity of the gold crown. Being a holy object dedicated to the gods, the crown had to be examined without deformation of any kind. While in a bath, Archimedes noticed that his body displaced more water the more he sank into the tub. He immediately got out and ran home naked shouting “Eureka! Eureka!” which is Greek for “I have found it!”

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62% Of Americans Don’t Have Even $1,000 In Savings

By Sol Palha – Re-Blogged From http://www.Silver-Phoenix500.com

A key sign of financial health is savings; if one does not have a decent amount of money tucked away for a rainy day, it is a sign that all is not well. Americans have a very hard time sticking to a budget and saving, compared to their Asian counterparts. This is reflected in the startling revelation that over 62% of Americans do not even have $1,000 in their savings account.  Foreigners are shocked when they find out that Americans have so little money saved for a rainy day.

“It’s worrisome that such a large percentage of Americans have so little set aside in a savings account,” said Cameron Huddleston, a personal finance expert and columnist for GOBankingRates. “It suggests that they likely don’t have cash reserves to cover an emergency and will have to rely on credit, friends, and family, or even their retirement accounts to cover unexpected expenses.”

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ECB And BOJ Now Trapped In Endless Counterfeiting

By Michael Pento – Re-Blogged From http://www.Gold-Eagle.com

The Fed was able to end its massive $3.7 trillion series of Quantitative Easing campaigns without the stock market and economy falling apart. The end of QE 3, in October of 2014, did cause temporary turmoil in the major averages; but all in all, it did not lead to a protracted market decline, nor did it immediately send the economy into a recession.

The consensus view then became that the Fed’s strategy of unprecedented interest rate and monetary manipulations was a huge success, and it would be able to slowly raise the Fed Funds rate with impunity.

Perhaps it was this assurance that gave Ben Bernanke’s successor, Janet Yellen, the temerity to begin liftoff in December of 2015. However, when the Fed commenced its first rate hike, it led to the worst beginning of a year in stock market history, as the Dow Jones industrial average lost more than 10% of its value between January 1st and Feb. 11th. Therefore, while the markets seem to have become somewhat comfortable with the end of QE (at least for now), they have also reached the consensus that a protracted tightening cycle is a completely untenable position for the Fed to hold.

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European Bankers Back to Begging for Bailouts!

By David Haggith – Re-Blogged From Great Recession Blog

Nothing is more shameless in a bedazzling sort of way than rich banksters standing on the public curb with their hands out. First, we had the admission this past week by a major French bank that Italian banks are so sick (and so too big to fail) they could cause systemic banking failure throughout Europe if not bailed out by over-taxed taxpayers.

Lorenzo Bini Smaghi — who was a member of the European Central Bank’s executive board and who is now Chair of French megabank Societe Generale — said the only way to save European banks, if they start to fall like dominoes due to Italy’s banking problems, is with taxpayer-funded bailouts.

Europe’s banking market faces the risk of a systemic crisis unless governments accept the idea of taxpayer money as the ultimate recourse in a crisis, Bini Smaghi said. Any intervention should be as swift as possible, he said. (Newsmax)

A French CEO says his massive bank and others could fall like dominoes due to Italy’s problems? That has to be good for his falling stocks. So, you ask yourself, why would he say something to spook an already scared stock market?

Then we had Italy’s Prime Minister Matteo Renzi, pressuring Europe to bail out Italy’s banks by pointing out that Italian bank problems with bad loans pale in comparison to Deutsche Bank’s towering derivatives problem over in Germany.

“If this non-performing loan problem is worth one, the question of derivatives at other banks, at big banks, is worth one hundred. This is the ratio: one to one hundred,” Renzi said. (Zero Hedge)

Gee, you’d think they were trying to talk the EU into a panic … as if it weren’t already there. Considering that 17% of Italy’s bank loans have gone sour (which sounds monumental to me), Deutsche Bank must be bad beyond belief at a hundred times worse! That’d be an undoable 170% bad, which is pretty dang bad!

Italian banks are deep into the sour apple bin because their solution to bad loans during the last crisis was to just roll them along by not foreclosing and hope that future economic growth would make the borrowers solvent again, but that kind of economic expansion never came. That left a lot of decay down in the apple bin after the Great Recession, and not too surprisingly the rot has spread. The amount of decay is now four times bigger than it was back then … and it was deadly then! As horrible as that sour mess is, Italy’s premier tells us Deutsche Bank is a hundred times more dangerous than that!

Why are banksters and politicians taking this beggar-thy-neighbor approach by pointing out how bad other European banks are — the Frenchy pointing at Italy, the Italian pointing at Germany? Statements like “Our own banks are so bad they need immediate bailouts, but they’re only a hundredth as bad as yours” are not statements that former central bankers, current megabuck megabank CEOs and prime ministers usually make when they all live or die under the same economy.

When you see a lot of rats like that scurrying together up the stairs of the ship, you might want to make a move for the lifeboats.

The answer must be that it’s a desperate play. European bankers are scared spitless at the abyss that is opening around them. They need to drive fear like a stake into the hearts of the masses and their fellow politicians in order to get the immediate bailouts they lust after if they are going to save themselves while keeping the masses from rebelling Brexit-style against them. These are desperate words from desperate rich guys who see their own money going down the drain if the public doesn’t rescue them.

Italy’s premier wants to inject state cash into failing Italian banks to recapitalize them. That’s because the banks can’t recapitalize by issuing stock when their stock is nearly worthless. I’m sure that sea chests full of state money would give his wealthiest friends nice chairs to sit above the waterline in the lifeboats, but public bailouts are now against the EU’s post-Great-Recession regulations so he’s trying to scare the EU into bending on the regs.

Shameless are the banksters and shameless are their political pals with their “your money or our lives” piggy bankster terror.

How close to falling off a cliff is the EU now that Brexit has kicked them in the ankles?

As Jeff Gundlach said this week, Watch Deutsche Bank shares go to single digits and people will start to panic… you’ll see someone say, ‘Someone is going to have to do something’. (Zero Hedge)

They’re not even waiting that long, Jeff. That is what these bankster and politician statements are all about. To keep the masses from revolting, everyone needs to be made intensely afraid of what will happen as the alternative if the dinosaur banks are not given public CPR, and in Deutsche Bank, they have much to be afraid of, as it towers over the world with over $70 trillion of derivatives exposure.

Let’s hope the public has had enough of putting its lips to the dinosaurs’.

Leave it to mega banksters to get the solutions entirely wrong … again

They never learn from their failures, and they’re hoping the public never learns either … or, at least, that the public can be scared beyond its learning curve. (A hope that failed with the brave British exit. So, the banksters are a little afraid now that the smell of revolt fill the air like gun smoke.)

The only solution to the failure of behemoth banks that bloated banksters can come up with is that taxpayers should bail them out in order to save themselves from having the banks collapse on them. It never enters their minds that, if these banks are already known to be too big to fail, the most obvious solution was to break them up a couple of years ago before the bad stuff hit so that they could be parted out in an organized manner. It’s a little late now, but it would still be better than additional conglomeration:

Smaghi wants to go further than just bailing out the failures. Instead of breaking the behemoths up so they don’t roll over and crush entire nations, Smaghi’s answer is to bail them out and make them bigger:

Both Italy and Germany have too many banks that are not profitable and more consolidation is needed, the chairman said.

You would think that, if ever there was a no-brainer for what not to do, making too-big-fail banks bigger would be it; but, as I wrote at the start of the Great Recession, even George Bush’s solution was to double down on the size of banks, which he was first to publicly call “too-big-to fail”:

Whenever one of our economic titans teetered on the edge of bankruptcy this past year, the peril from its collapse to everything in its shadow pressured the executive branch to create a deal over the weekend before the market opened again on Monday. The masterminds of mayhem rushed in to pump some “good” news into Wall Street ahead of the market opening to avert disaster. At every turn, the government’s answer to the risk of corporate obesity was to take two weak and wobbly mammoths and cobble them together into some bigger and more ungainly creature. Each resulting conglomeration came out looking like Frankenstein’s monster with all its seams showing. Thus, many of the following solutions were amalgamated during midnight hours in the board room laboratories of the Washington Wunderkind. (“Collapse of the Colossus“)

They’re too big to fail, so solve their problems by doubling them in size? I don’t know how you get any dumber than that even by hitting yourself over the head repeatedly with suitcases full of money. The solution advocated for busted banks that require taxpayer bailouts is, according to Bush back then and Smaghi now, to conglomerate the failing monstrosities into even larger institutions.

History is repeating itself in such a manner that I could just change the names of banks in my article and republish the same article today that I wrote about this nonsense years ago:

J.P. Morgan Chase and Company, a name that was already a mouthful of earlier conglomerations, gulped down a belly full of Bear. I guess that would make them the J.P. Morgan, Chase, Bear, Stearns, and Company. The Federal Reserve helped prepare the Bear to make it more palatable for Morgan to eat. Apparently that role is the meaning behind their nickname “Fed.” Somehow the Fed thought a dying beast fed on Bear would be an improvement on the “too big to fail” scale.

Fat on Bear, you’d think the beast would have been satisfied for a little while, but within a month it felt the need to digest the largest bank failure in world history — Washington Mutual. Again, the Fed cooked the meal. I won’t even try to squeeze that addition into J.P.’s burgeoning name, except to say that the feeding frenzy was mutual. And with that, J.P and Companies acquired a bank that was even a different breed from itself. An investment bank consumed a consumer bank.

Sighs. We never learn a thing … even on the obvious stuff. The worst part is that nearly a decade on, the public keeps sucking this swill up. Well … until Brexit. Let’s hope Brits stay the course and others join their revolt.

Smaghi’s got a smoggy brain if he really believes his own solution, but that’s a group-think peril in the banking industry anyway. It’s ludicrous to believe you can make giant corporations more efficient by stuffing two of them into the same suit. It is far beyond merely ludicrous to think that you can take one extremely unhealthy supersized corporation and make it healthier by stuffing another dying giant inside of it! That’s like curing cancer by feeding the patient a diet of fried tumors.

At an early point, sure, making a business bigger creates economies of scale … if both of the businesses you marry together are reasonably healthy. At some point, however, that nasty old Law of Diminishing Returns I keep ragging about kicks in. The periphery of the corporation becomes too far removed from the center to be well managed. No one really understands everything the business is doing. Employees can hide among the masses to where no one knows someone is not working because no one even knows what that guy’s job is. One branch doesn’t know it is repeating the work of another branch. Etc.

If banksters like Smaghi really believe these banks cannot sink without capsizing all of Europe in their wake, then the responsible thing to do is to begin a “Ma Bell” on them — start tearing them down into smaller, more efficient, profitable companies. Time for reorganization. That way they the worst parts can crash safely on their own later on without any help from the rest of us.

The answer is certainly not to start rerevising all the newly revised regulations, as Smaghi and others are rapidly recommending. Why would we want to return to the starting point of the last massive crash?

Will the public be beggared or buggered…British style?

I wonder if European taxpayers are angry enough yet to revolt against Smaghi’s suggestion. The rest of Europe doesn’t seem as brave as the Brits. Take Greece, for example, which chose to stay in perpetual bondage to its German dominatrix. Even in the UK, the peasant revolt is dicey. Brexit was certainly a vote against this kind of elitist arrogance, but already many Brits are scrambling to find ways to overturn their own democratic decision because massive changes inevitably cause a volatile repositioning in markets. Revolts aren’t tidy.

You’d think after the Great Recession all central banks would have stopped allowing consolidation of the massive banks they oversee. Well, you’d think that if you believed they were really all that concerned about banks being too big to fail. That everything they do continues to make big banks bigger shows all they really care about is getting taxpayers to bail out their cronies.

Because taxpayers have not insisted on breaking up big banks for taxpayer protection, it has not happened. Until they demand it, as the Brits demanded Brexit, it never will happen! It is not a concept that would ever occur to imperial banksters. It is not the way their kept politicians think either.

After a decade of unbearable banking behavior that has spiraled right back to where we started … only higher up for a bigger fall, revolt could easily break out everywhere. But don’t expect the public to be smart. They’ve been completely blind while the banksters buggered them so far. Just expect them to be mad as hornets when you stir up their bin of rotten apples.

Brexit is an organized revolt with a clear objective of extraction from a bloated and failing enterprise, but it will still be incredibly messy. The domino effect of what fails because of the extraction will take months to play out. With surgery, there is blood and there is swelling, and there is pain.

I expect a growing number of simply angry revolts to occur from this point forward that will be far messier. They will look more like terrorist explosions than surgery because people don’t know the right answers. As a result, the public anger at getting raped again is not likely to have much helpful focus. People will be right to be angry — very right — but will they have any idea that size reduction is a big part of what really needs to happen? I think they will just be pushed by fear toward even greater globalization as the only answer big enough to save them.

Sadly, big is the problem.

So, back to my economic predictions

Anger may cause more nations to splinter off of Europe, but that depends on how messy Brexit becomes. If the dust settles in Europe in the next few months as it already has here in the US, other nations will be encouraged to break away. But I’m not so sure Europe will let the dust settle.

Right now banksters and politicians appear to be doing their best to kick the dust up into the air in order to terrorize everyone else into fear of breaking away and into giving their money to banksters. I think Europe will make the UK’s break as ugly of a divorce as possible in order to make all other nations afraid of doing the same thing — just as Germany did with Greece when Grexit was essentially being voted upon.

Whatever remains of Europe, you can be certain the central powers that be will use fear to tighten the reins of power. It may be a smaller Europe, but it will be even more centralized. Because of how trends are shaping up, I think we are about to repeat another devastating lesson from history: European power appears likely to become more Germanic, and that has never been a good thing.

For some reason that nation, more than any other, gravitates toward an obsessive-compulsive need to control Europe. Germany continually believes its ways are superior so that it SHOULD control Europe. While Germans may not be thinking of overt control, their thinking seems to run like this: “We must make them see that our ways are economically superior because then they will become as economically sound as we are,” Deutsche Bank notwithstanding.

Thus, Merkel and her German kommandants push Germanic discipline on the rest of Europe like they are force-feeding broccoli to a baby. In doing so they appear completely blind to how they are stoking the fires of enraged rebellion. (For example, Merkel never saw that force-feeding immigration would empower the Brexit vote.) Merkel has already aggregated European power around herself. Even though she doesn’t hold Europe’s most powerful position, she wields more influence over Europe than anyone as she marches them all to the German way.

Ironically, a single bank in that fiscally disciplined nation — Deutsche Bank — appears most likely to be the force that takes the entire European shambles goose-stepping over the cliff:

Today, we got the most definitive confirmation yet that the noose is tightening not only around Italy, but Germany itself … when none other than David Folkerts-Landau, the chief economist of Deutsche Bank, has called for a multi-billion dollar bailout for European banks. Speaking to Germany’s Welt am Sonntag, the economist said European institutions should get fresh capital for a recapitalization following a similar bailout in the US. What he didn’t say is that the US bailout took place nearly a decade ago. In the meantime Europe’s financial sector was supposed to be fixed courtesy of “prudent” fiscal and monetary policy. It wasn’t…. “Europe is seriously ill and needs to address very quickly the existing problems, or face an accident,” said the chief economist. (Zero Hedge)

Yes, the most likely bank to bust first appears to be German, and it is monstrous in size … as Italy more than eagerly pointed out. But that’s what happens when centralized power becomes too disconnected from its periphery because of size. It pushes stubbornly for what the center wants, causing something like Brexit to break off the outer edge. That, in turn causes other fractures that run right back to the center.

David Folkerts-Landau, the chief economist of Deutsche Bank joins French bank CEO Smaghi and Italian Premier Renzi is saying that a bank bailout has become so quickly urgent that Europe must break its new banking regulations to allow a bailout immediately, or the crash will begin. His conclusion does not seem very Germanic:

Strictly adhering to the rules would cause greater harm than if they were suspended.

Rules that Germany championed may have to be broken if they hurt Germany, instead of periphery states like Greece. Apparently, the dominatrix loves to crack the whip but not receive it. I anticipate Merkel will put the whip away now that it appears its sting could snap her own behind, but she may be too slow in giving up her own ideas.

It’s all part of the next leg down in the Epocalypse — first Brexit, then European banking stocks collapse, then some major European bank gives Europe its Lehman Brüders moment … and over the cliff they all go.

Deutsche Bank stock is now worth just 8% of its peak 2007 value. It’s already been a loooong ride downhill for one of Europe’s most iconic banks, but Brexit kicked DB in the crotch, because almost 20% of its revenues came from the UK, bringing its stock down to a groveling “crash value” now of $12.60 a share. One of the world’s largest and oldest banks looks ready to fall into the gaping abyss of the Epocalypse. No wonder European banksters are screaming “Bailout!”

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Major Diseases Are In Decline

By Kip Hansen – Re-Blogged From http://www.WattsUpWithThat.com

Science is a wonderful thing.  As time moves on, in a single direction,  Science, as an endeavor, discovers new things and improves our lives.   Sometimes though, things get better, and we don’t know why.

That’s the news from Gina Kolata,  Health & Science reporter at the NY Times, in an article dated JULY 8, 2016, titled A Medical Mystery of the Best Kind: Major Diseases Are in Decline. [ here ].

The Good News:

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Obama and Israel

cropped-bob-shapiro.jpg   By Bob Shapiro

World politics affects Economics in many ways.

We’ve covered Brexit quite a bit over the last few weeks. We’ve talked about China’s moves to get their currency, the Renminbi, ready for prime time International Reserve Asset status through their massive buildup of Gold over the last decade. And we’ve talked about monetary QE in Japan and many other countries besides the US.

The Middle East, sitting at the crossroads of European and Asian Economic and military interests, including their control of a still significant supply of oil,is another area of concern for us. US-Israeli relations have deteriorated during the Obama administration, and the prospects for a Clinton Presidency are likely to continue this downtrend.

I came across this timeline of items about Obama’s actions toward Israel which you might find interesting.

It was written by Ben Shapiro (no relation) on 20 Mar 2015.

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Biggest Change in Human History

By Doug Casey – Re-Blogged From International Man

Today, we’re sharing part two of Casey Research founder Doug Casey’s recent essay on the next industrial revolution. If you missed part one, you can read it by clicking here.

Recently, Doug shared the 10 big trends that are rapidly advancing. Today, he explains how to set yourself up to benefit as directly and immediately as possible.


WHERE THIS IS GOING

You may think I’m pulling your leg and that I’ve gone too far in these projections. But this isn’t just a titillating compilation of cover stories from Popular Science magazine. Our brains are accustomed to thinking arithmetically—1, 2, 3, 4, 5, 6, etc. But technology is compounding geometrically—1, 2, 4, 8, 16, 32, etc. You’ve seen this happen in the realm of computing and electronics just in our lifetimes. But—partially enabled by those things—it’s happening in many areas.

You might analogize this to what happens to water as it gets colder. There’s not much difference between water at, say, 45 and 33 degrees Fahrenheit. But once it gets to 32, it has a change of state, a transformation in what it is, its very nature. And it happens very, very quickly.

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Carbon Permits are Too Cheap to Make a Profit – Traders

By Eric Worrall – Re-Blogged From http://www.WattsUpWithThat.com

h/t JoNova – carbon traders are complaining that over-issuing of carbon permits, a lack of political will to make carbon trading work, has destroyed investor confidence in the industry.

Tough to Keep the World From Warming When Carbon Is This Cheap

Carbon markets, the free-enterprise solution to saving the world from global warming, are now in danger themselves.

The idea was simple enough: Set a cap on carbon emissions, issue enough permits to allow power plants, refineries and the like to stay within those limits and then shrink the cap over time to achieve reductions. The companies whose emissions fall fastest can sell their permits for a profit to slower responders — call it a reward for good behaviour.

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The Inexorable Result Of Modern Central Banking

By David Stockmn – Re-Blogged From Stockman’s Contra Corner

The inexorable effect of contemporary central banking is serial financial booms and busts. With that comes increasing levels of systemic financial instability and a growing dissipation of real economic resources in misallocations and malinvestment. At length, the world becomes poorer.

Why? Because gains in real output and wealth depend upon efficient pricing of capital and savings, but the modus operandi of today’s central banking is to deliberately distort and relentlessly falsify financial prices.

After all, the essence of ZIRP and NIRP is to drive interest rates below their natural market clearing levels so as to induce more borrowing and spending by business and consumers.

It’s also the inherent result of massive QE bond-buying where central banks finance their purchases with credits conjured from thin air. The central banks’ big fat thumb on the bond market’s supply/demand scale results in far lower yields than real savers would accept in an honest free market.

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Can You Imagine The Fed Raising Interest Rates In This World?

By John Rubino – Re-Blogged From Dollar Collapse

Two short months ago it was generally expected that US interest rates would rise for the balance of the year — a move made possible by steady economic growth and general global stability. Here’s a representative piece of reporting from early April:

WSJ Survey: Most Economists Expect Next Fed Rate Increase in June

Most private forecasters surveyed expect the Federal Reserve will leave short-term interest rates unchanged at its April policy meeting, and next raise them in June.

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Stock Markets Erase Brexit Losses: Is the Fallout Already Behind Us?

By Clint Siegner – Re-Blogged From Money Metals Exchange

Nigel Farage toiled for 17 years building a movement to lead the United Kingdom out of the European Union. A week ago, he stood in front hundreds of drab bureaucrats in the EU Assembly, most of whom have done little but snicker at his free-market ideals, and declared victory. He told them, quite plausibly, their political union is dying – and good riddance!

UK Independence leader Nigel FarageUK Independence Party leader Nigel Farage led
Britain to freedom from the EU.

Fans of liberty cheered for Farage and for Brexit. And, after the sharp recovery in equity indexes around the world, it looks like stock investors have begun cheering as well. Many say stock market losses sustained in the first couple of trading days were an overreaction. Maybe. Or maybe not.

It is way too early to sound the “all clear” signal, and the real Brexit fallout may still be ahead. Here are some developments that investors should weigh carefully…

Bond markets are not confirming the move higher in stocks. The yield on a U.S. 10-year bond made a new all-time low on Friday at 1.385%. German 10-year Bunds yield -0.12%. That’s right – a negative yield! Bund investors must pay the German government for the “privilege” of lending them funds.

That doesn’t jive with the rally in stocks. There are essentially two groups of people. One is buying stocks aggressively, shouting “Risk On!” The other is loading up on Treasuries and other “low risk” debt as a safe haven. One of these groups is likely to be horribly wrong.

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Four Winners To Emerge From Brexit

By Frank Holmes – Re-Blogged From http://www.Gold-Eagle.com

Last week my friend John Mauldin, chairman of Mauldin Economics, released a special Brexit edition of his popular investments newsletter Outside the Box. In it he shared a post written by geopolitical strategist George Friedman that describes a recent meeting among six foreign ministers representing the European Union’s founding member states: Belgium, France, Germany, Italy, Luxembourg and the Netherlands. The topic of discussion was the possible causes and implications of the U.K.’s decision to leave the EU.

What George finds extraordinary is that, in their follow-up statement, the ministers appear to capitulate, admitting they “recognize different levels of ambition amongst Member States when it comes to the project of European integration.”

As George puts it, this is their way of acknowledging—finally?—the impossible task of enforcing uniformity across the European continent, home to many different peoples and cultures, all with different goals and aspirations.

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Ready or Not the Recession May Have Already Arrived

By Michael Pento – Re-Blogged From http://www.PentoPort.com

While investors have been focused on the perennial failed hope for a second half economic recovery, they have been missing the most salient point: the US most likely entered into a recession at the end of last quarter.

That’s right, when adjusting nominal GDP growth for Core Consumer Price Inflation for the average of the past two-quarters the recession is already here. But before we look deeper into this, let’s first look at the following five charts that illustrate the economy has been steadily deteriorating for the past few years and that the pace of decline has recently picked up steam.

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Negative US Yields

cropped-bob-shapiro.jpg   By Bob Shapiro

The real – after inflation – yield on US Treasuries is NEGATIVE all the way down the maturity yield curve.

As I write, the 30 year T-Bond is listed at 2.14%. The May CPI came in at 0.2% – in line with the recent trend – showing the CPI rising at a 2.4% annual rate. So a 2.14% yield and a 2.4% CPI indicates a negative real yield of -0.26% per year. Over the 30 year life of a T-Bond, an “investor” would be guaranteed to lose about 7.5% of his capital!

Yields Curve 070516

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Weekly Climate and Energy News Roundup #231

The Week That Was: July 2, 2016 – Brought to You by www.SEPP.org

By Ken Haapala, President, Science and Environmental Policy Project

State Attorneys General: The chronology of the subpoena of certain records of the Competitive Enterprise Institute (CEI) by Attorney General Claude Earl Walker of U.S. Virgin Islands becomes an interesting study of legal over-reach and pull-back. CEI general counsel Sam Kazman has a good re-cap of events in his summary: “Shake-Up in Subpoena Land.” –

“CEI was originally served with its subpoena on April 7. The document was issued by AG Walker, who had a District of Columbia court clerk issue a DC version, which could then be served on CEI. The subpoena demanded a full decade’s worth of CEI’s work on climate change and energy policy, much of which would have contained confidential information on our donors. It was an outrageous violation of both our First Amendment right and those of our supporters, and CEI made it clear that it wouldn’t comply.”

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