Enemies of Humanity

By Steven Lyazi  Re-Blogged From http://www.WattsUpWithThat.com

Mosquitoes and uncaring environmental activists perpetuate poverty, disease and death

After being infected again with malaria last July, I spent almost a month in a Kampala hospital. Paying for my treatment was extremely difficult, as it is for most Ugandan and African families. I was lucky I could scrape the money together. Many families cannot afford proper treatment.

Where and how can they get the money to go back to the hospital again and again, every time a family member gets malaria, when they also need food, clothes and so many other things – or malaria makes them so sick that they can’t work for weeks or even months? Many parents can do nothing except watch their loved ones die in agony, and then give them a simple burial.

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World’s first floating wind farm emerges off coast of Scotland

– Re-Blogged From http://www.bbc.com

The world’s first full-scale floating wind farm has started to take shape off the north-east coast of Scotland.

The revolutionary technology will allow wind power to be harvested in waters too deep for the current conventional bottom-standing turbines.

The Peterhead wind farm, known as Hywind, is a trial which will bring power to 20,000 homes.

Manufacturer Statoil says output from the turbines is expected to equal or surpass generation from current ones.

It hopes to cash in on a boom in the technology, especially in Japan and the west coast of the US, where waters are deep.

“This is a tech development project to ensure it’s working in open sea conditions. It’s a game-changer for floating wind power and we are sure it will help bring costs down,” said Leif Delp, project director for Hywind.

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Fed QT Bearish For Stocks

By Adam Hamilton – Re-Blogged From http://www.Gold-Eagle.com

Ominously for the stock markets, the Federal Reserve is warning that quantitative tightening is coming later this year.  The Fed is on the verge of starting to drain its vast seas of new money conjured out of thin air over the past decade or so.  The looming end of this radically-unprecedented easy-money era is exceedingly bearish for these lofty stock markets, which have been grossly inflated for years by Fed QE.

Way back in December 2008, the first US stock panic in an entire century left the Fed frantic.  Fearful of an extreme negative wealth effect spawning another depression, the Fed quickly forced its benchmark federal-funds rate to zero.  Once that zero-interest-rate policy had been implemented, no more rate cuts were practical.  ZIRP is terribly disruptive economically, fueling huge distortions.  But negative rates are far worse.

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10 Tips to Improve Your Memory

By Brenda Kennedy (https://stonebrakerracing.com/)

The issue of memory training is relevant not only for students and schoolchildren. Overloaded with work, tormented and under fulfilled, residents of metropolitan areas from time to time complain that sometimes they do not understand why they came into any room in their house. A lot of people face difficulties when doing homework in foreign language courses or preparing for exams at the university. The last problem can be solved with the help of Primetimeessay. However, improving memory is a personal responsibility.

Here are 10 simple working memory-training steps to force memory work.

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Why Economists Cannot Forecast Recessions

By Alasdair Macleod – Re-Blogged From http://www.Silver-Phoenix500.com

The purpose of this article is to draw the widest attention to the chronic inability of the economic establishment to forecast recessions. Next time you hear an economist make a prediction on mainstream media, your default assumption should be he or she is simply wrong.

Why do I allege this? An IMF economist, Prakash Loungani, did some interesting research in 2000 about the accuracy of economists’ forecasts. Using data taken from a publication called Consensus Forecasts (published by Consensus Economics), which is widely used as a source of independent estimates of economic growth by individual governments, Loungani found that of the 60 recessions recorded since 1989 in the 63 countries sampled, only two were forecast in April the year before and two-thirds remained undetected in the April of the year they occurred. Furthermore, analysts’ forecasts emanating from both private and public sector economists were little different, and had a strong bias towards optimism.

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MICHELLE BACHMANN: Islam Has Transformed My State

Re-Blogged From Liberty Headlines

Shariah law. Female genital mutilation. Terror attacks.

Minnesota was a cozy, quiet environment before the introduction of massive Third World immigration, but that has changed with the arrival Somali refugees, according to former U.S. Rep. Michele Bachmann.

“Minnesota is no longer the state I moved to in the mid 1960s,” Bachmann told WND in an exclusive interview. “Then, we were a well-ordered society with a high-functioning population.”

Now Minnesota has the largest Somali [mostly Muslim] community in the United States, with Census numbers putting the population around 40,000.

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U.S. Becomes Global Fossil Energy Giant

Re-Blogged From http://www.WattsUpWithThat.com

U.S. evolves into coal, gas and oil global energy giant supplying world’s hungry energy markets

David Middleton’s excellent WUWT article addressing the resurgence of the American coal industry as well as the growing role of U.S. natural gas production in creating global gas export markets hits the nail on the head in demonstrating how dominant the U.S. has become in producing and supplying global energy markets at home and abroad with growing demands for fossil fuels.

The IEA agency clearly recognizes the U.S. as the global driver of a huge transformation of the world’s natural gas energy markets.

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Do “Stocks Always Come Back”

By Jeff Clark – Re-Blogged From http://www.Gold-Eagle.com

It was a pretty simple inquiry on my part: Mike Maloney predicts the stock market is facing the mother of all crashes—if he’s right, then how long before the average stock investor would get back to even?

I wanted to know not only for myself, but because I have a daughter just starting in her career. I also have a wife with a 401k and over a decade to retirement. I have a son in college. I handle my retired parents’ money. And I have other family and friends who follow traditional brokerage advice and have 60% of their portfolios in stocks (or more in some cases).

So, if the stock market crashes, how long does history say it’ll take for their stock holdings to return to pre-crash levels… months? Years? Or—gulp—decades?

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Weekly Climate and Energy News Roundup #278

By Ken Haapala, President, Science and Environmental Policy Project

Brought to You by www.SEPP.org


Quote of the Week.

“…it was clear that the first and greatest need was to establish the facts of the past record of the natural climate in times before any side effects of human activities could well be important.”

– H.H. Lamb on forming the Climatic Research Unit [H/t Tim Ball]

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Something Big, Bad And Ugly Is Taking Place In The US Retirement Market

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

While the highly inflated value of the U.S. Retirement Market reached a new high this year, something is seriously wrong when we look behind the scenes.  Of course, Americans have no idea that the U.S. Retirement Market is only a few steps from falling off the cliff, because their eyes are focused on the shiny spinning roulette wheel called the Wall Street Stock Market.

Yes, everyone continues to place their bets, hoping and praying that they will win it big, so they can retire in style.  Unfortunately, American gamblers at the casino have no idea that the HOUSE is out of money.  The only thing remaining in their backroom vaults is a small stash of cash and a bunch of IOU’s and debts.

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The Cost of Intervention

Re-Blogged From Stratfor

What North Korea lacks in sophistication it makes up for in guile. Its answer to any attack would go beyond conventional means to include its experienced commando force, cyberwarfare capability and submarine force, at the very least. Though North Korea has chemical weapons, they are probably no more effective than its air force and surface navy. Still, there’s a psychological shock value attached to their use.

Pyongyang will do everything it can to impose a cost on any belligerent force. If the United States wishes to denuclearize North Korea, it will have to accept the consequences, as will South Korea and possibly even Japan. The United States would greatly prefer a diplomatic solution, but this has not worked well in the past. Even tougher sanctions imposed in March did little but harden Pyongyang’s resolve. And in avoiding a messy, if short-lived conflict, the United States and South Korea may have set themselves up for future angst when Pyongyang unveils a strategic nuclear deterrent.

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Tesla Battery, Subsidy and Sustainability Fantasies

By Paul Driessen – Re-Blogged From http://www.WattsUpWithThat.com

More subsidies from exhausted California taxpayers cannot compensate for hard realities

The first justification was that internal combustion engines polluted too much. But emissions steadily declined, and today’s cars emit about 3% of what their predecessors did. Then it was oil imports: electric vehicles (EVs) would reduce foreign dependency and balance of trade deficits. Bountiful oil and natural gas supplies from America’s hydraulic fracturing revolution finally eliminated that as an argument.

Now the focus is on climate change. Every EV sale will help prevent assumed and asserted manmade temperature, climate and weather disasters, we’re told – even if their total sales represented less than 1% of all U.S. car and light truck sales in 2016 (Tesla sold 47,184 of the 17,557,955 vehicles sold nationwide last year), and plug-in EVs account for barely 0.15% of 1.4 billion vehicles on the road worldwide.

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5 Reasons to Fear the Fall

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

This powerful and protracted bull market has made Cassandras look foolish for a long time. Those who went on record predicting that massive central bank manipulation of markets would not engender viable economic growth have been proven correct. However, these same individuals failed to fully anticipate the willingness of momentum-trading algorithms to take asset prices very far above the underlying level of economic growth.

Nevertheless, there are five reasons to believe that this fall will finally bring stock market valuations down to earth, and vindicate those who have displayed caution amidst all the frenzy.

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China Builds Maritime Muscle

Re-Blogged From Stratfor

China recently reached a new milestone on its path toward military modernization. On June 28, the country launched the first Type 055 warship from the Jiangnan Shipyard on Shanghai’s Changxing Island. The vessel is China’s first heavy destroyer, and it is the largest surface combatant warship built by an Asian power since the end of World War II. With the Type 055, China shows how far it has come in its efforts to expand its maritime capabilities.

The Type 055 warship is a large and heavy vessel, with a full displacement — or weight — of more than 12,000 tons, a length of about 180 meters (590 feet) and a beam of roughly 20 meters. In fact, the U.S. military classifies the Type 055 as a cruiser, a class of warship larger than a destroyer. And despite its size, the new ship is sleek and modern in its design. For instance, it incorporates numerous features that reduce its visibility on radar, such as a fully enclosed foredeck and an integrated mast.

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China and India are Edging Closer to a War in Asia

By Alex Lockie From Reuters – Re-Blogged From Yahoo!

Buried in the Himalayas in the Siliguri Corridor, also known as the Chicken’s neck, Chinese and Indian military forces sit on the respective sides of their vague borders and entrench themselves for what could become a shooting war between nuclear powers.

Both Beijing and New Delhi see the conflict as a shoving match for dominance in the Himalayas, an age-old struggle between the two states that most recently went hot in 1962, before either state had perfected nuclear bombs.

But now a Chinese construction project aiming to build a road that can support 40 ton vehicle traffic threatens a critical passage in India and risks alienating New Delhi from its ally, Bhutan.

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If You’re Going to get Sick – Better do it Before Single Payer

By The Common Constituionalist – Re-Blogged From http://www.iPatriot.com

On his radio program  Monday evening, Mark Levin was discussing the ghastly way the Republican Party has treated us regarding the whole healthcare debacle. Mark said, “It’s amazing to me that a man can remain the Majority Leader, McConnell, when the man controlling the Senate, for all intents and purposes, is Chuck Schumer.”

Levin said, “we thought Republicans would repeal ObamaCare – we thought that would be a no-brainer.”

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Are US Equities In A Bubble?

By Rudi Fronk and Jim Anthony –  Re-Blogged From http://www.Silver-Phoenix500.com

As we have noted, there is a very important difference between a bull market and a bubble. Valuations are certainly one means of distinguishing them. In retrospect, we can recognize previous historic bubbles such as 1929 and 2000. When basic ratios such as Price-to-Sales and Tobins’ Q have reached the levels that marked these bubbles, as they have, we can make a reasonable inference that another bubble has formed.

But there are other measures besides valuation. The most characteristic indicator of a bubble vs. a bull market is that bubbles ignore risk. Bubbles don’t discount risk, they don’t sniff out the next recession, they ignore or even fight the Fed, they don’t fall when earnings do and they do not herd into the long end of the Treasury curve for safety.

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The Age of Modern Warfare

By Ian Morris – Re-Blogged From Stratfor

Historians love anniversaries, and this year we’re having a lot of them. In an earlier column I looked back exactly 100 years to April 1917, when Lenin made his famous journey from Zurich to Petrograd. This laid the foundation for a distinctive kind of illiberal modern state that now seems to be making a comeback. But in this column, I want to consider a second set of events in 1917 that arguably played an even bigger role in creating today’s world: the invention of a new way of fighting wars. Military leaders began exploiting the fact that modern states had effectively created a new kind of human being — the educated, independent-minded citizen who could do much more than just follow orders — without whom modernity would look very different indeed.

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Larry Kudlow: Democrat Plan for Government-Run Healthcare a ‘Disaster’

By Rob Williams – Re-Blogged From Newsmax

Larry Kudlow, the economist and former adviser to President Ronald Reagan, said the economic agenda spearheaded by Senate minority leader Chuck Schumer, D-N.Y., will be a “disaster,” if Medicaid is any guide.

“A government plan is not going to work. Medicaid, which is a disaster and has spiraled out of control and has expanded and expanded and expanded with no eligibility requirements anymore – that’s the perfect example,” Kudlow said on CNBC. “If you want a Democratic program that is going to be government-run, single payer – take a look at Medicaid, which has been a disaster.”

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The Foibles of Climate Research

By Dr. Tim Ball – Re-Blogged From http://www.WattsUpWithThat.com

Government Created Misuse of Climate Research; Even a Little More Government is Not the Solution.

Environmental Protection Agency (EPA) Administrator Scott Pruitt wants to set up a Red and Blue team approach to climate research. It appears to be a commendable goal given the effective exclusion of one of the teams to date. The problem is it perpetuates another artificial division created by government involvement in climate science in the first place. David Middleton’s article comments on Pat Michaels’ proposed, “A Climate Roadmap for Pres. Trump” and identifies the legal problems of rescinding the US Supreme Court (SCOTUS) ruling on CO2 as a “harmful substance.” The EPA provided the ‘scientific’ definition used by SCOTUS, so the simple solution is for EPA to change it. Both stories miss the real issues. First, governments should not be involved in scientific research at all because, if nothing else, the freedom of the scientist bureaucrat is inherently compromised. Second, it doesn’t matter what process of analysis you establish, there is insufficient data to prove anything.

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Here’s The True Definition Of A Recession

By Frank Shostak – Re-Blogged From http://www.Silver-Phoenix500.com

According to the National Bureau of Economic Research (NBER), the institution that dates the peaks and troughs of the business cycles,

A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. A recession begins just after the economy reaches a peak of activity and ends as the economy reaches its trough.

In the view of the NBER dating committee, because a recession influences the economy broadly and is not confined to one sector, it makes sense to pay attention to a single best measure of aggregate economic activity, which is real GDP. The NBER dating committee views real GDP as the single best measure of aggregate economic activity.

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Alarums And Excursions

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

My friend Dr. Willie Soon is both a charming man and a most courageous scientist, who has taken a lot of heat for his principled stands on climate issues. He recently wrote a piece about climate alarmism along with Kesten Green and J. Scott Armstrong which deserves much wider circulation, which WUWT is glad to provide.

the sky is falling

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How the Electric Car Revolution Could Backfire

By Matt Ridley – Re-Blogged From The Rational Optimist

The British government is under pressure to follow France and Volvo in promising to set a date by which to ban diesel and petrol engines in cars and replace them with electric motors. It should resist the temptation, not because the ambition is wrong but because coercion could backfire.

The electric motor is older than the internal combustion engine by about half a century. Since taking over factories from the steam piston engine at the end of the 19th century, it has become ubiquitous. Twinned with its opposite number, the turbine (which turns work into electricity, rather than vice versa), it drives machines in factories, opens doors, raises lifts, prepares food, brushes teeth and washes plates.

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The Elephant In The Room: Debt

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

It’s the elephant in the room; the guest no one wants to talk to—debt! Total global debt is estimated to be about $217 trillion and some believe it could be as high as $230 trillion. In 2008, when the global financial system almost collapsed global debt stood at roughly $142 trillion. The growth since then has been astounding. Instead of the world de-leveraging, the world has instead leveraged up. While global debt has been growing at about 5% annually, global nominal GDP has been averaging only about 3% annually (all measured in US$). World debt to GDP is estimated at about 325% (that is all debt—governments, corporations, individuals). In some countries such as the United Kingdom, it exceeds 600%. It has taken upwards of $4 in new debt to purchase $1 of GDP since the 2008 financial crisis. Many have studied and reported on the massive growth of debt including McKinsey & Company www.mickinsey.com, the International Monetary Fund (IMF) www.imf.org, and the World Bank www.worldbank.org.

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The Fed May Show Trump No Love

By Peter Schiff – Re-Blogged From http://www.Gold-Eagle.com

Typically, US Presidents are wary of claiming stock market performance as a referendum on their success. Most have seemed to understand that taking credit also means accepting blame, and no one would want to make the tortured argument that the positive moves reflect well on their presidency but that the negative moves do not. But Donald Trump has shown no reluctance to make any argument that suits his political purpose of the day, no matter its absurdity, and no matter if he has to contradict the arguments he made last year, or last week. Perhaps he assumes, as most investors seem to, that the risks are minimal because the Federal Reserve will jump in to save the markets if things turn bad. But in binding his performance so closely to the markets he overlooks the possibility that the Fed will be far less charitable to him than it was to Obama.

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Weekly Climate and Energy News Roundup #277

The Week That Was: July 15, 2017 Brought to You by www.SEPP.org

By Ken Haapala, President, The Science and Environmental Policy Project

Models v. Atmospheric Temperatures: Roy Spencer has further comments regarding the recalculated atmospheric temperatures recently produced by Mears and Wentz, who are principals in Remote Sensing Systems (RSS), competitors with the Earth System Science Center at the University of Alabama in Huntsville (UAH). Spencer points out that despite claims in the press, the new (more warming) RSS dataset does not resolve the discrepancy between observed temperature trends in the lower troposphere.

It is in the lower troposphere that greenhouse gas warming occurs. Discussions about surface warming or deep ocean warming are secondary to the issue: are greenhouse gases causing dangerous global warming? According to the greenhouse gas theory, and reports by the UN Intergovernmental Panel on Climate Change (IPCC), and its followers, this warming trend is to be most pronounced over the tropics (roughly 20 degrees South and North of the Equator. As Spencer writes “Even the New RSS Satellite Dataset Says the Models are Wrong.”

The new lower troposphere dataset “(Version 4, compared to Version 3.3) didn’t really change in the tropics.” Spencer produces a chart demonstrating how wrong the models are. See links under Challenging the Orthodoxy.

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The Walmart Guy vs Anti-Capitalism Millennials

By Lloyd Marcus – Re-Blogged From iPatriot

Though we have never met, I smiled recently seeing my favorite Walmart employee. For over ten years, I witnessed him gathering shopping carts in the parking lot. He is a white millennial who only has the use of one arm, walks with a severe limp and appears slightly mentally challenged. I once saw him leaving work driving a new looking compact car. My wife Mary prepared his taxes when she worked for a tax preparation company. I thought, “Hey, this brother has got it goin’ on — doin’ his thing.”

The Walmart guy could easily qualify for disability; sit home on his butt allowing taxpayers to take care of him. Far too many able-bodied millennials feel entitled, believing government should provide them free everything.

The Walmart guy’s work-ethic, self-reliance and pride in earning his own way is truly refreshing. The Obama Administration practically begged Americans, even non-citizens http://bit.ly/1ixsqOm, to get on food stamps and to apply for as many government freebies as possible. This addicts voters to government handouts and keeps them voting for their Democrat dealers. Disability claims skyrocketed under Obama. http://bit.ly/1ts1LYs

Disturbingly, polls say a majority of millennials reject Capitalism. http://wapo.st/2mINyo7 They believe Socialism is fair and compassionate and Capitalism is selfish and cruel. This explains “yutes” hero worship of socialist/democrat presidential candidate Bernie Sanders. Millennials love Sanders’ promise to take the hard earned wealth of achievers to redistribute to lazy pot-smoking losers. Former British Prime Minister Margaret Thatcher said, “The trouble with Socialism is that eventually you run out of other people’s money.”

Socialism always ends up spreading mediocrity and misery equally among the masses while the rulers live high on the hog. Have you noticed that Hollywood Leftists and socialist politicians want government to force us to drive tiny tin-can cars, surrender our guns and lower our carbon footprint? Meanwhile, they travel in gas-guzzling limos and private jets with armed guards.

Capitalism gives everyone a shot at achieving their American dream. I will slap the next fellow black person who whines to me about how whitey has stacked the deck again us. Capitalism birthed America’s first female millionaire, a black woman born in 1867. Madam C. J. Walker was an entrepreneur, philanthropist, and a political and social activist. http://bit.ly/2byUBOr Socialism would have enslaved Madam Walker to the government system, giving her just enough free stuff to get by. Okay, I promise not to slap anyone.

It was depressing hearing it reported that a large number of Americans support taxing income over a million dollars at 100%. First of all, confiscating that money would generate around $616 billion which only covers a third of our annual deficit. http://bit.ly/2tGS3CR

But what is most troubling is the disgusting class envy loser mindset of those who believe it is right for government to take people’s hard earned money. They do not realize that such financial tyranny would kill jobs and the incentive to be all one can be. How dare government place limits on success. Such thinking is un-American, counter to our God inspired founding.

We allowed Leftists’ silent-coup-takeover of public education decades ago. Consequently, Leftists have produced an army of stealth Leftist sleeper-cell operatives against their parents. Remember when Leftists instructed kids to steal their parent’s guns and turn them in to their teaches? http://bit.ly/2vgZ3bj Remember Michele Obama instructing students to report politically incorrect speech at the dinner table? http://bit.ly/1qL62Dz

Outrageously, white students are taught beginning in kindergarten that they were born racist. http://dailym.ai/29AwJVZ In essence, white students are taught to feel ashamed and hate themselves for their unfair white privilege. The Walmart guy is on Leftists’ excrement list simply for being a working class white male. http://bit.ly/2tfHN58 It angers me envisioning Leftist bullies getting into the grill of my Walmart guy, scolding him about his evil white privilege.

Students support black college student’s demand for free tuition and housing. http://fxn.ws/2kPQEWP

Black students also expect academic and behavioral standards lowered for them. I’m a 68 year old black man. I would be highly offended having standards lowered for me. Millennials quickly embrace Leftists twisting everything into evidence of unfairness and white American racism.

Years ago, a white friend shared that her son came home from middle-school in tears about how white men abused everyone; blacks, women, native Americans and so on. Today her son is an America hating Communist who still believes European white men are the greatest source of evil in the world.

Folks, we much turn this mess around regarding Leftists’ indoctrination of our kids. Trump appointing Betsy DeVos as Secretary of Education is a major step in the right direction. DeVos favors restoring power back to parents regarding the education of their children.

Oh, we’re out of milk. I’m confident I will see my Walmart guy diligently working.

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Jobs and Inflation: Gradually and Then Suddenly

By Ben Hunt – Re-Blogged From Wolf Street

If you’ve been reading my notes immediately before and after the June Fed meeting (“Tell My Horse” and “Post-Fed Follow-up”), you know that I think we now have a sea change in what the Fed is focused on and what their default course of action is going to be. Rather than looking for reasons to ease up on monetary policy and be more accommodative, the Fed and the ECB (and even the BOJ in their own weird way) are now looking for reasons to tighten up on monetary policy and be more restrictive. As Jamie Dimon said the other day, the tide that’s been coming in for eight years is now starting to go out. Caveat emptor.

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Are More Bankruptcies Next for US Shale Oil Drillers?

By Irina Slav – Re-Blogged From Wolf Street

Something that’s been whispered about in the last few months is now being talked about loudly: U.S. oil drillers’ debts. There have been a few notable warnings that shale boomers might want to slow down their production boost lest they bring on another price crash, but the truth seems to be that they can’t do it: they have debts to service.

Now that international oil prices are once again on a downward spiral, drillers are facing a new challenge, according to Bloomberg: their bondholders are no longer optimistic.

Shareholders were the first to start doubting the recovery as it became increasingly evident that OPEC’s production cut agreement is failing to have the effect that everyone—or almost everyone—expected. Energy stocks have generally been on a slide since the start of the year.

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Gold/Silver Shorts Extreme

By Adam Hamilton – Re-Blogged From http://www.Gold-Eagle.com

The gold-futures and silver-futures short positions held by speculators have rocketed up to extremes in recent weeks. These elite traders are aggressively betting for further weakness in gold and silver prices. But history has proven extreme shorts are a powerful contrarian indicator. Right as speculators wax the most bearish as evidenced by their collective bets, gold and silver decisively bottom and birth major new rallies.

Futures trading has a wildly-outsized impact on gold and silver prices, especially over the short term. It is amazing how much volatility futures speculators’ collective buying and selling generates, often drowning out everything else. Two factors are responsible for this dominance. The extreme leverage inherent in futures trading and the unfortunate fact the resulting gold and silver prices are the world’s reference ones.

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World’s Nations Building Huge Numbers of New Coal Plants Despite Emissions Growth

By Larry Hamlin – Re-Blogged From http://www.WattsUpWithThat.com

A recent article discussed at Watts Up With That? exposed that many of the world’s largest CO2 emitting nations are proceeding with energy policies involving the building of huge numbers of new coal plants without regard to increasing CO2 emissions completely contradicting the aims of the Paris Climate Agreement.

These nations actions clearly show the Paris Climate Agreement is meaningless in addressing global emissions and that President Trump was very wise to reject it’s oppressive provisions that were imposed on the U.S.

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How Can The Fed Possibly Unwind QE?

By Alasdair Macleod – Re-Blogged From http://www.Silver-Phoenix500.com

There are currently two important items on the Fed’s wish list. The first is to restore interest rates to more normal levels, and the second is to unwind the Fed’s balance sheet, which has expanded since the great financial crisis, principally through quantitative easing (QE). Is this not just common sense?

Maybe. It is one thing to wish, another to achieve. The Fed has demonstrated only one skill, and that is to ensure the quantity of money continually expands, yet they are now saying they will attempt to achieve the opposite, at least with base money, while increasing interest rates.

Both these aims appear reasonable if they can be accomplished, but the game is given away by the objective. It is the desire to return the Fed’s interest rate policies and balance sheet towards where they were before the last financial crisis, because the Fed wants to be prepared for the next one. Essentially, the Fed is admitting that its monetary policies are not guaranteed to work, and despite all the PhDs employed in the federal system, central bank policy remains stuck in a blind alley. Fed does not want to institute a normalised balance sheet just for the sake of it.

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Never Go Full California

By David Archibald – Re-Blogged From http://www.WattsUpWithThat.com

It used to be said that Australia was usually 5 years behind the US in adopting new trends; in turn the US was led by what happened in California. The beauty of that was that California’s taxpayers would pay for experiments in public policy and the rest of us could pick and choose from what worked. Unfortunately Australia is now in the lead in self-inflicted wounds resulting from faith-based public policy. One Australian state, South Australia, now has the dubious distinction of the world’s highest power prices. Four months from now, South Australia hits its peak summertime power consumption for which the grid operator projects there is simply insufficient supply … at any price. And this is in a country with plenty of coal reserves – 200 billion tonnes of lignite in the adjoining state of Victoria as well as all the black coal deposits scattered around the country.

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Did The Fed Just Ring A Bell At The Top?

By Graham Summers – Re-Blogged From http://www.Gold-Eagle.com

Very few investors caught on to it, but a few weeks ago the Fed made its single largest announcement in eight years.

First let me provide some context.

For eight years now, the Fed has propped up the stock market. In terms of formal monetary policy the Fed has:

  • Kept interest rates at ZERO for seven years making money virtually free and forcing investors into stocks and junk bonds in search of yield.
  • Engaged in over $3.5 TRILLION in Quantitative Easing or QE, providing an amount of liquidity to the US financial system that is greater than the GDP of Germany.

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Weekly Climate and Energy News Roundup #276

By Ken Haapala, President, Science and Environmental Policy Project

The Week That Was: July 8, 2017 – Brought to You by www.SEPP.org,

*************

 

Quote of the Week. “Whoever is careless with the truth in small matters cannot be trusted with important matters: “– Albert Einstein

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Number of the Week: 39%

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New Atmospheric Data? Roy Spencer responds to the recent paper by Mears and Wentz, who are principals in Remote Sensing Systems (RSS), competitors with the Earth System Science Center at the University of Alabama in Huntsville (UAH). As speculated in last week’s TWTW, this may be part of an effort to discredit John Christy’s effective testimony on Capitol Hill that global climate models greatly overestimate the warming trend of the atmosphere. Spencer states:

“Before I go into the details, let’s keep all of this in perspective. Our globally-averaged trend is now about +0.12 C/decade, while the new RSS trend has increased to about +0.17 C/decade.

“Note these trends are still well below the average climate model trend for LT [Lower Troposphere], which is +0.27 C/decade.” [Boldface was italic in the original.]

What we see is that extending warming trends for a century, the models calculate a century-long trend of 1 degree C above the RSS calculations and 1.5 degrees C above the UAH calculations. The so-called “corrections” of 0.5 degrees C to the RSS data are not that significant when compared with the overestimates of the average of the global climate models.

Among other points, Spencer discusses the different techniques used by the two groups to adjust for the error in the diurnal cycle (daily pattern) in the climate models. UAH uses empirically derived adjustments, RSS uses model derived adjustments. As Spencer states:

“In general, it is difficult for us to follow the chain of diurnal corrections in the new RSS paper. Using a climate model to make the diurnal drift adjustments, but then adjusting those adjustments with empirical satellite data feels somewhat convoluted to us.”

See links under Challenging the Orthodoxy.

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Surface Data: For some years, independent meteorologists such as Joseph D’Aleo have noticed a disturbing trend in historic data reported by certain government entities, such as NOAA, Ashville (previously called the National Climatic Data Center, now called the National Centers for Environmental Information). These historic data are used by NOAA, NASA and the Hadley CRU. Hadley CRU is a dataset developed at the Climatic Research Unit at the University of East Anglia in England and the Hadley Centre (the UK Met Office). In general, multiple adjustments were made to the historic data that reduced past warm periods. The net effect was to give a greater present day warming trend, than in the past.

For example, in the US, many long-term records were set in the 1930s, but the current, adjusted data does not show that decade as particularly hot, when compared to today. And, the US was the world-wide gold standard for temperature measurements.

A new study by Wallace, D’Aleo, and Idso systematically analyzes the Global Average Surface Temperatures reported by NOAA, NASA, and Hadley CRU. The results are striking. For example, Figure IV-1 shows five different plots of 5-year temperature trends by NASA-GISS (Goddard Institute for Space Studies on Broadway) produced from 1980 to 2015. The period around 1940 became progressively cooler in these plots. Similar adjustments have been made to the other datasets as well as to datasets for specific locations.

The study recognizes that adjustments to surface data may need to be changed, but the overall trend reflected in the changes appears to create a bias in the data. Further, strong cyclical patterns that once appeared are muted. A comprehensive review of the adjustments is in order.

Side note: Some of those who established the standards for US weather stations, which became the world-wide gold standard, were members of the oldest science society of Washington. As a past president of that society, this author finds the tarnishing of that standard particularly disturbing. See links under Challenging the Orthodoxy.

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Red Team / Blue Team: In several instances in congressional testimony, John Christy has called for a Red Team/Blue Team approach for addressing the US issues regarding climate science. The UN Intergovernmental Panel on Climate Change (IPCC) and its followers such as the US Global Change Research Program (USGCRP) are well funded by government. They attribute climate change to primarily human activities, particularly carbon dioxide emissions.

As Christy points out, what is lacking is a well-funded Red Team:

“…[to] look at issues such as natural variability, the failure of climate models and the huge benefits to society from affordable energy, carbon-based and otherwise. I would expect such a team would offer to congress some very different conclusions regarding the human impacts on climate.”

One can liken this approach to the adversarial arguments in a criminal court of law. (CO2 is a criminal?) The reports of the Nongovernmental International Panel on Climate Change were intended to have a Red Team approach. However, the publisher, The Heartland Institute and other groups, do not have the deep, multi-billion-dollar pockets enjoyed by the IPCC, USGCRP, etc.

This idea appears to be gaining attention. In Climate Etc. Judith Curry discusses the idea more fully. We have had decades of spurious claims about the dangers of carbon dioxide, which is essential for life as we generally understand it. Such an approach may help dispel decades of myths such as a 97% consensus, CO2 can be seen from smoke-stacks, etc. It would be important to establish solid rules of evidence, such as unvalidated models are not hard evidence, and to avoid dogmatic participants. See links under Challenging the Orthodoxy and Seeking a Common Ground.

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Executive Actions: The Constitution is a practical guide for government, limiting the powers of its branches. From this comes the popular term “checks and balances.” Increasingly, some of the executive actions of the prior administration are being discarded. Since these actions are not law, there is no reason for the current administration to keep them, should it so choose to change them. Increasingly, the Trump administration is reversing executive actions under the Obama administration.

The same can be said for the Paris Accord (Agreement) which the Obama administration sold to the public as an executive action and did not send to the Senate for two-thirds approval, as required by the Constitution for a treaty. The cries of those who expected great sums of money through the Paris agreement, such as Christiana Figueres, formerly Executive Secretary of the UN Framework Convention on Climate Change (UNFCCC), are not significant. They knowingly played a game, and lost. As discussed in last week’s TWTW, Ms. Figueres formed an organization expecting up to One Trillion Dollars a year. See Article # 1 and links under After Paris!

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Economic Return on Energy Investment: Writing for the Global Warming Policy Forum, Economics Professor Michael Kelly brings up an important concept that many writers on energy issues fail to consider: Economic Return on Energy Investment.

In the US, following the Civil War, fossil fuels such as coal quickly replaced biomass (wood) and muscle power (animal and human). The economy boomed. People found the care and feeding of a steam engine is much easier than the care and feeding of horses. City streets became much cleaner, and boots were no longer needed. What was important was not the number of people employed in a particular energy sector, but the employment the energy sector created in other economic sectors.

Kelly’s Economic Return on Energy Investment is a measure of the productivity of various energy types. He finds that 9% of the global GDP is tied up in energy, yielding a return of about 11:1. For coal and gas power plants, the return is about 50:1. For nuclear power plants it is about 70:1. The low values of traditional biomass, and other external issues bring the global value down to 11:1.

Applying this analysis to solar photovoltaics, he finds a return of less than 4:1; for wind power, a return of less than 8:1. In brief, there is not much opportunity for solar and wind to lift the third world to modern European standards. See links under Questioning European Green.

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Offshore Wind: Often, wind promoters claim offshore wind is reliable, even though it is becoming obvious that onshore wind is not. Writing in Energy Matters, Roger Andrews examines the validity of this claim for the world’s wind nation, Denmark, and finds it wanting – without considering added costs of salt water corrosion.

“Previous Energy Matters posts that highlight the difficulties of integrating intermittent wind power with the grid have been based dominantly on onshore wind data, but claims that offshore wind is significantly less erratic and will therefore be much easier to integrate with the grid have not been checked. This post reviews the question of whether it will. It finds that offshore wind is indeed less erratic than onshore wind but still nowhere near consistent enough to do away with the need for storage or conventional backup generation.”

Finding solid data is always a major problem for such studies, but he succeeds in finding a database for Denmark that separates onshore and offshore production. The analysis covers three years, 2014 to 2016. A small country, Denmark is ringed with offshore wind farms on three sides.

Rogers finds that offshore wind has a capacity factor of 43% as compared with onshore wind of 25%; but, also, that when wind dies onshore it does so offshore as well. Back-up is needed for both. Given that offshore wind costs about twice that of onshore, it is not much of a bargain. See links under Alternative, Green (“Clean”) Solar and Wind.

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Number of the Week: 39%: The island of El Hierro in the Canary Islands was to be a show-case of 100% wind power for electricity. Excess electricity would be used for pumped hydro storage, to be used when the wind failed to meet demand. After two full years of operation, the system provided 39.1% of the electricity needed. The balance came from diesel generators. The reservoirs are inadequate for the hydro component. But the circus continues with plans for wind supplying a higher percentage of total energy needs. Have those in the Pentagon who bragged about weather-dependent wind power helping the nation’s energy security heard of this island? See link under Alternative, Green (“Clean”) Solar and Wind.

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ARTICLES:

1. Pruitt’s Clean Water Break

Obama’s legacy of rule by decree is rapidly being undone.

Editorial, WSJ, July 2, 2017

https://www.wsj.com/articles/pruitts-clean-water-break-1499030184

The editorial states:

“President Trump is having a hard time getting legislation through Congress, but his Administration is moving fast to roll back Barack Obama’s pen- and-a-phone lawmaking. The latest example, which barely registered in the press, is the Environmental Protection Agency’s decision last week to rescind the unilateral rewrite of the Clean Water Act.

“The Obama EPA in 2015 redefined “waters of the United States” under the Clean Water Act to include any land with a “significant nexus” to a navigable waterway. Several arbitrary thresholds were used to determine significance, such as land within a 100-year floodplain and 1,500 feet of the high-water mark of waters under government jurisdiction. The rule extended the government’s writ to prairie potholes, vernal pools and backyard creeks.

“Thirty-one states sued the feds for violating the Administrative Procedure Act, and the Sixth Circuit Court of Appeals enjoined the rule nationwide. Now Administrator Scott Pruitt is putting the rule on ice while the EPA works up a replacement. Supreme Court Justice Anthony Kennedy muddied the waters with his controlling opinion in the 2006 Rapanos v. U.S. case that conceived the new “significant nexus” standard, which the Obama EPA used as a pretext to pursue its water land grab.

Side comment: Piles of wet leaves have been arbitrarily been considered proof of “waters of the United States”, leaving the landowner with no recourse but seeking relief by expensive litigation.

“Mr. Pruitt said the EPA will propose a new rule ‘in accordance with Supreme Court decisions, agency guidance, and longstanding practice’ that would ‘return power to the states and provide regulatory certainty.’ Consider it another lesson in the limits of pen-and-phone rule by decree.”

CONTINUE READING –>

Why Climate Models Run Hot

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

EPA administrator Pruitt wants to “Red Team” the catastrophic anthropogenic global warming (CAGW) consensus best reflected in the IPCC assessment reports (AR). At its core, CAGW rests on just three propositions:

1. CO2 is a ‘greenhouse’ gas retarding radiative cooling. This should not be in serious dispute since Tyndall experimentally proved it in 1859.

2. The Earth is warming. Although the details are in dispute because of temperature data quality problems and ‘adjustments’, the general fact is not. The Earth has been intermittently warming since the Little Ice Age (LIA) ended. For example, the last Thames Ice Fair was in 1814.

3. CO2 and its knock-on effects caused the recent warming, and climate models (such as the CMIP5 archive for IPCC AR5) predict this will continue to catastrophic levels. This is an extremely dubious proposition.

This guest post addresses proposition 3. It does so in a short sound bite ‘abstract’ useful for debating warmunists, and then in a typical WUWT full climate science guest post. It is a modest Red Team contribution.

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Back to Economic Basics

   By Bob Shapiro

My blog is about 2½ years old now, and I’ve had well over 30,000 views. Articles automatically also get posted onto my Facebook page, where a larger number of my friends see them; most of the comments show up on my Facebook page.

While I still write posts myself, the lion’s share are re-posts from friends around the world who write well on the issues which are important to me (hey, it’s my blog). Many times, I fall into the trap of forgetting that many (most?) readers have zero training (and less understanding) of the subjects I blog about.

Because so many people (Americans and not) have no real clue about the good that is Capitalism and the benefits that each person enjoys because of Capitalism, I’d like to go over a few basics. So, this is for the good people out there who say things like, “He can afford it,” and “He’s just greedy and only worrying about making a profit.”

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Study Finds Temperature Adjustments Account For ‘Nearly All Of The Warming’ In Climate Data

By Michael Bastasch – Re-Blogged From The Daily Caller

A new study found adjustments made to global surface temperature readings by scientists in recent years “are totally inconsistent with published and credible U.S. and other temperature data.”

“Thus, it is impossible to conclude from the three published [global average surface temperature (GAST)] data sets that recent years have been the warmest ever – despite current claims of record setting warming,” according to a study published June 27 by two scientists and a veteran statistician.

The peer-reviewed study tried to validate surface temperature datasets managed by NASA, NOAA and the UK’s Met Office, all of which make adjustments to raw thermometer readings. Skeptics of man-made global warming have criticized the adjustments.

Climate scientists often apply adjustments to surface temperature thermometers to account for “biases” in the data. The new study doesn’t question the adjustments themselves but notes adjustments has increased the warming trend in published temperature records over the years.

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“Bigger Systemic Risk” Now Than 2008 – Bank of England

By Mark O’Byrne – Re-Blogged From http://www.Gold-Eagle.com

– Bank of England warn that “bigger systemic risk” now than in 2008
– BOE, Prudential Regulation Authority (PRA) concerns re financial system
– Banks accused of “balance sheet trickery” -undermining spirit of post-08 rules
– EU & UK corporate bond markets may be bigger source of instability than ’08
– Credit card debt and car loan surge could cause another financial crisis

– PRA warn banks returning to similar practices to those that sparked 08 crisis
– ‘Conscious that corporate memories can be shed surprisingly fast’ warns PRA Chair

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CA Solar Power Out During Eclipse

When the sun goes dark, California will lose the equivalent of five nuclear power plants of power.

By Martin Rosenberg – Re-Blogged From http://www.theenergytimes.com

California is bracing for a significant loss of electric power as its fast-growing fleet of solar electric panels plunge into darkness during a major solar eclipse on August 21.

While the eclipse will be partial in the state, energy planners are getting ready to tap 6,000 megawatts of electricity from other sources between 9 a.m. and noon PDT during the eclipse, according to the California ISO which oversees the electricity markets in America’s most populous state.

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Missing Paperwork May Erase $5 Billion in Student Loan Debt

By F McGuire – Re-Blogged From Newsmax

Missing paperwork reportedly may ultimately erase $5 billion dollars of debt for loans that tens of thousands of former students took out over a decade ago.

National Collegiate Student Loan Trusts — a 15-trust company that purchases private student loan debt — reportedly lost the paperwork documenting these loans’ chains of ownership, according to cases brought forward in Pennsylvania and Delaware, the New York Times reported.

The shoddy record-keeping means that if the trust tries to come after students who default on them, they may see the entire debt written off. Judges have dismissed dozens of lawsuits against borrowers who defaulted on student loans from private creditors, the Times reported.

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Senate Pushing Obamacare Bailout

By Bill Hoffmann – Re-Blogged From Newsmax

Sen. Rand Paul, R-Ky., told Newsmax TV on Thursday he remains dead set against the newly tweaked Senate healthcare bill and warned Republicans they will be clobbered with blame when their watered down version of the failing Affordable Care Act similarly begins to collapse.

“I don’t think some miracle happens with this Republican plan,” Paul, a Kentucky Republican, said on “Newsmax Now” with Bill Tucker. “The main thing that happens is now the . . . dysfunctional part of the marketplace is going to be blamed on Republicans.

Important: Newsmax TV is available on DirecTV Ch. 349, U-verse 1220, and FiOS 615. If your cable operator does not have Newsmax TV just call and ask them to put us on — Call toll-free 1-844-500-6397 and we will connect you right away to your cable operator! Continue reading

The Solar Harbinger

By David Archibald – Re-Blogged From http://www.WattsUpWithThat.com

The people of Canberra are the richest in Australia so they voted in a provincial government that proved how virtuous they were by increasing the proportion of their power supply that came from wind and solar sources. As a consequence, the cost of power went up and the people of Canberra have responded by seeking out warm public buildings in the current southern winter. Respiratory disease load increases in winter and so no doubt there will be some deaths caused by the government’s virtue signalling.

Hundreds of thousands of people in first-world-country Germany have gone off grid because they can’t afford power any more. Of course heat kills too and the biggest heat-related, first-world die-off in recent years was in Europe in 2003. As Dave Rutledge wrote in 2015, “During the great European Heat Wave of 2003, 70,000 people died, most of them indoors. This is a horrible way to die. The people who were indoors could have been saved by a $140 Frigidaire window unit, but only if they could afford to pay for the electricity.”

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Monumental, Unsustainable Environmental Impacts

Replacing fossil fuels with renewable energy would inflict major land, wildlife, & resource damage.

By Paul Driessen- Re-Blogged From http://www.WattsUpWithThat.com

Demands that the world replace fossil fuels with wind, solar and biofuel energy – to prevent supposed catastrophes caused by manmade global warming and climate change – ignore three fundamental flaws.

1) In the Real World outside the realm of computer models, the unprecedented warming and disasters are simply not happening: not with temperatures, rising seas, extreme weather or other alleged problems.

2) The process of convicting oil, gas, coal and carbon dioxide emissions of climate cataclysms has been unscientific and disingenuous. It ignores fluctuations in solar energy, cosmic rays, oceanic currents and multiple other powerful natural forces that have controlled Earth’s climate since the dawn of time, dwarfing any role played by CO2. It ignores the enormous benefits of carbon-based energy that created and still powers the modern world, and continues to lift billions out of poverty, disease and early death.

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US Economy Keeps Moving Into Summer Storm

By David Haggith – Re-Blogged From http://www.Silver-Phoenix500.com

One of the kookiest moments last month came when Fed Chairwoman Yellen spoke about seeing no financial collapse in sight during our lifetimes

“Would I say there will never ever be another financial crisis? No. Probably that would be going a little too far, but I do think that we’re much safer, and I hope that it will not be in our lifetimes, and I don’t believe it will be.”  (CNBC Play video for quote on next crisis.)

That certainly calls to mind the times when Chairman Ben Break-the-banky pontificated about there being no housing bubble and no recession in sight:

Yellen’s predecessor, Ben Bernanke, once famously called problems in the subprime mortgage market “contained,” a statement that would be proven wrong when the collapse of illiquid mortgage-backed securities cascaded through Wall Street and contributed to the worst economic downturn since the Great Depression.

Asked at a recent FOMC meeting about any possible problem with banks still being too big to fail, Yellen only said, “I’m not aware of anything concrete to react to.”

Nice to know she’s sound asleep while sugar plums dance in her head, bringing forth prophecies of good times for the rest of everyone’s foreseeable life … or, at least, the rest of hers.

When a Fed chair says something as audacious as there is no chance of another financial crisis in our lifetimes and when she sees no concrete situations of banks being too big to fail, even when the ones that were too big to fail last time are now twice as big, I think Titanic disaster. I think of all those nuclear experts who said, when three Fukushima reactors were blowing up and melting down, that they saw no chance of meltdown anywhere because these reactors were built too tough to melt down. As they spoke, you could hear the reactors exploding and see tops blowing off the buildings on videos playing behind them and watch people running around in protective suits, which made for quite a spectacular orchestration of expert feel-safe baloney.

“Nothing to see here, folks. Just minor gas venting, typical of reactors in a non-meltdown stage of something. Move along.”

I think minor gas venting is what we are hearing out of Yellen.

The inability of central bankers to see anything coming, even as it is bearing down on top of them, is classic. If recessions were trains, Yellen would be tied to the tracks right now, sipping tea. Her saucer would be rattling on the rails, but you wouldn’t be able to hear the rattle because of the rumbling of a locomotive in the background. Yellen would look up from her tea cup and smile at you like the nice grandmother that she is as the train runs over her.

You can also comfort yourself with this bit of superior Fed protection: All of Yellen’s major underling banks just passed the Fed’s most stringent stress test of their reserves. Because they passed gloriously, Yellen & Co told them they can now reduce their reserves, just as she is talking about strapping the economy with quantitative tightening. This move is for the important reason of freeing up something like $100 billion so they can pay themselves fat bonuses and share the wealth with their stockholders.

Whew! Glad the risk of being too big to fail is over. Maybe she meant she has just removed the risk for banksters and major share holders because they all get their bonuses now before the banking collapse.

If you wonder how blind Grandma Yellen is, look at her following statement, which offers a penetrating glance into the obvious:

Valuation pressures across a range of assets and several indicators of investor risk appetite have increased further since mid-February… (Zero Hedge)

Really? Just since mid-February? That was the first time you noticed that maybe, just maybe, the stock and bond markets were starting to look a little bubbly? These high valuations are just now pressuring the Fed to back off on stimulus because the market started to look a tad inflated in February?

She made this statement in order to justify her other statement ab out the Fed’s following choice to reduce stimulus even though it’s inflation target has not yet been met:

The Committee currently expects to begin implementing the balance sheet normalization program this year provided that the economy evolves broadly as anticipated…

So, the Fed has changed its metric from its mandate of manipulating inflation to setting policy based on curbing overly exuberant market valuations. Once again, we see evidence that the Fed is manipulating markets and setting a course correction on stimulus because of markets.

In other words, the Fed wants you to believe the bubblicious pricing of stocks was not something they rigged by “trying to create a wealth effect” in “front-running the stock market” as former Fed governor Richard Fisher said of the actions he was involved in, but that it is just a side-effect of their stimulus that now pressures them to back down. No, it was dangerous manipulation that is now pressuring the Fed to pursue a course of unwinding stimulus.

The Great Unwind Is About To Begin

The unwinding of the Federal Reserve’s balance sheet has been saved to the end because it is more problematic than either the end of quantitative wheezing or the end of low-interest policy, and it is being carried out be people who have never seen a recession coming in the past and who see no reason to believe we will ever again in our lifetimes see a financial crisis like the last one.

By “the Great Unwind,” I mean the reversal of QE (quantitative tightening). While investors are buoyed a little by Yellen’s dovish indication this week that the Fed will only raise interest one more time, the reversal of QE over time will be by far the Fed’s most difficult change toward normalization to navigate.

JPMorgan Chase & Co. Chairman Jamie Dimon said the unwinding of central bank bond-buying programs is an unprecedented challenge that may be more disruptive than people think.

“We’ve never have had QE like this before, we’ve never had unwinding like this before,” Dimon said at a conference in Paris Tuesday. “Obviously that should say something to you about the risk that might mean, because we’ve never lived with it before…. We act like we know exactly how it’s going to happen and we don’t.”

All the main buyers of sovereign debt over the last 10 years — financial institutions, central banks, foreign exchange managers — will become net sellers now, he said. (Newsmax)

A risk never experienced in the history of the world. Never is a long time. That risk, anticipated to begin at the end of summer, is far greater than the mere termination of QE that already took place or than the incremental rise in interest rates. This change actually sucks liquidity out of the market, versus slowing the expansion of liquidity.

Considering the Fed has pumped $4.5 trillion of liquidity into the economy to help “recover” from the Great Recession, there is potentially a lot of unwinding to now begin, and it starts in an economy that is limping along the ground, not in the kind of recovery the Fed anticipated rewinding from. Between the European Central Bank, the Bank of the Japan and the Fed, there is $14 trillion to unwind … or, at least, some large portion of that.

The Great Unwind happens in a period where global debt has reached $217 trillion, which presents a major problem for the Fed in selling off so many bonds. They will almost certainly have to offer them at better yields more interest in order to attract buyers. That sifts throughout debt markets to raise the interest on carrying or refinancing all of this debt. Nations will have to compete with central bank yields in order to issue new debt or refi old. The European Central Bank and Bank of Japan are also looking like they may start unwinding soon, so compound all of that in your mind.

“As I believe the main factor in driving market multiples to historically high levels was QE, ZIRP and NIRP, then yes, the reversal will have major implications for markets and volatility.” Peter Boockvar, chief market analyst at The Lindsey Group, told MarketWatch.

The Fed’s Great Unwind is scheduled to start (if the Fed’s hints bear out) during the stock market’s unwind from Trumphoria, too, and during the retail apocalypse and auto market crash:

Crispin Odey, who made money for a second straight month by sticking to bearish equity bets, said the chance of a market crash is rising as growth slows and the Federal Reserve normalizes interest rates.

The credit cycle boosted by loose monetary policy has peaked and there’s a widespread slowdown in the auto, commodity, industrial and retail sectors, Odey wrote in a letter to investors. Unlike previous dips since the financial crisis, central banks aren’t responding by printing more money.

“This time they are doing the reverse,” which is likely to exacerbate the negative trend, the London-based hedge fund manager wrote. “All this sits very uncomfortably with the fun being felt in the stock markets. When I look at the move up since Trump’s election as president, I detect the walk of a drunken man.”

“The chances of car crashes everywhere are rising,” according to Odey. “Enjoy the hot summer,” (Newsmax)

The timing for the Fed’s Great Unwind does not look fortuitous. Key to understanding why the Federal Reserve always has such bad timing so that it routinely crashes its own recoveries can be found in recognizing that the Fed’s dual mandate — setting monetary guidance based on maximizing jobs and maintaining inflation at a set level — means the Fed is always aiming to create goals that may take a year to develop from the time they make any change.

Inflation is largely dependent on the wage/labor market, and a change in hiring decisions is dependent first on a change in economic conditions; so the movement of these lagging indicators that the Fed monitors the most can easily be a year or more away. Thus, the Fed will continue to move every quarter more and more toward their new bias of stimulus reduction until they see the results in their job and inflation metrics. But they are doing that when the economy is already receding. By the time they see the results in their two sacred metrics, they’ve moved further than they need to and downhill momentum has already built up.

So, they will do it again.

The Death Of Trumphoria

The irrational exuberance that superheated the stock market after Trump’s election is dead right where I said months ago it died. A quick look at any chart of its biometrics proves that:

The patient has been pretty-well flatlining for half a year with a couple of attempted jolts with the paddles that yielded no lasting results. The market has scratched its way sideways in daily tremors up and down ever since, but has gone almost nowhere for more than four months.

While the NASDAQ just looks like a heart attack:

Chris Whalen, a long-time bank analyst, expects [bank] earnings to come in soft enough that the stocks will trade off. “There’s no real growth on the top line,” he told MarketWatch. After several lean years, banks have run out of expenses to cut to boost the bottom line.

And most investors are finally starting to acknowledge that the hoped-for “reflation trade” isn’t coming, Whalen said. “The Trump Bump is dead.”

Hopes that the economy would be boosted by structural reforms, including tax reform, have faded as the administration of President Donald Trump has made little leeway on its plans. (Marketwatch)

The stock market gained a little more headroom in the first half of last month, but has, again, petered out. The market is in its summer doldrums — that hot, sultry period of dead winds before the summer storms — where any gains look like a mirage, typically passing away as soon as they are reached. Relentless stories about Trump’s supposed Russian electioneering collaboration — whether true or fake — also have diminished investor hopes that a fiscal stimulus plan will come about this year, an outcome I’ve suggested is likely all year.

And FAANG stocks — those high-tech draft horses of the stock market — are now weighing down on the market with dead weight, rather than dragging it up. This is a major reversal of the pattern that has supported the market for years when many stocks were in a bear market, but the FAANG’s relentlessly pulled the averages ever skyward.

Bank of America’s chief strategist Michael Harnett sees the top forming in the market and predicts the stock market will crash this fall:

We don’t think this is “big top” in stocks;  greed harder to kill than fear; don’t think this “big top” in stocks…. summer 2017 = significant inflection point in central bank liquidity trade…will likely lead to “Humpty-Dumpty” big fall in market in autumn, in our view. But Big Top likely occurs when Peak Liquidity meets Peak Profits. We think that’s an autumn not summer story. (Zero Hedge)

In BofA’s view, the stagnant humidity we feel in the market now — the doldrums after Trumphoria  — is building toward an autumn storm more likely than a summer storm because it will required the Fed’s move into the Great Unwind to really kick things off. I’ve said summer because I’d rather err’ on the side of safety, miss a part of the ride and be out ahead of the stampede. (And I’m not a trader, just someone who has moved his retirement funds out of stocks. I do not even try to give trading advice. My interest on this blog is macro-economics — where the economy is headed — and the stock markets of this world are only a part of that (a part we now know is rigged by central banks’ direct stock purchases).

Carmageddon 0n Cruise Control

“There’s been a consistent reduction in plant output in the last six months, and what is ahead in the next six months could be pretty startling,” said Ron Harbour, a noted manufacturing analyst….

“The industry has dramatically expanded employment in the United States in the last several years, but the growth is just not there anymore,” said Harley Shaiken, a labor professor at the University of California, Berkeley.

And companies are increasingly looking to build their less profitable car models outside the United States. Ford Motor, for example, said in June that it would move production of its Focus sedan to China from Michigan….

Scaling back jobs in car plants is part of a newfound discipline among automakers to avoid bloated payrolls and inventories when sales start slipping….

Moreover, the Detroit companies have also hired large numbers of lower-wage, entry-level employees with less costly unemployment benefits….

G.M., for example, has reduced the number of shifts at several of its domestic plants….

“We are beginning to enter a period we call the post-peak,” said Jonathan Smoke, chief economist for Cox Automotive, which operates the auto-research sites Kelley Blue Book and Autotrader. (New York Times)

And auto parts are not doing any better than autos. O’Reilly Automotive Inc.’s disappointing sales slammed a sector already seen as Amazon’s next source of fodder, taking a record plunge as it missed its second-quarter projections. Advanced Auto Parts and AutoZone are also continued declining. O’Reilly shares plunged as much as 21%. It is another area where demand is shifting away from brick-and-mortar stores and toward online purchases. Some say that auto manufacturers, seeing that customers are hanging on to their old cars longer, are stiffening up competition from OEM parts, too.

Attempts To Ward Off The “Retail Apocalypse”

Mitigating forces are at work, trying to turn the massive number of closures of mall anchor stores and smaller stores into opportunity for new life, but no one knows yet if these extravagant and creative efforts will work.

Costs are escalating as mall owners’ work to keep their real estate up to date and fill the void left by failing stores. The companies are turning to everything from restaurants and bars to mini-golf courses and rock-climbing gyms to draw in customers who appear more interested in being entertained during a trip to the mall than they are in buying clothes and electronics. The new tenants will pay higher rents than struggling chains such as Macy’s and Sears, and hopefully attract more traffic for retailers at the property, according to Haendel St. Juste, an analyst at Mizuho Securities USA LLC.

“The math is pretty obvious, pretty compelling, but there are risks,” St. Juste said in an interview. “This hasn’t been done before on a broad scale.”

…So far, jettisoning and replacing undesirable tenants has been a successful formula for many landlords, but there is still a lot of work to be done, according to Jeffrey Langbaum, an analyst with Bloomberg Intelligence. Some companies won’t have the cash to keep up amid the relentless pace of store closures, he said.

“For the most part, these companies have been able to redevelop and backfill space,” Langbaum said. “That’s great, but the big wave is still coming.”

…For Ziff of Time Equities, which buys outdated malls and renovates them, it doesn’t matter how you categorize the expenses of making over a center for the modern era, or if there is a linear path to a return on a particular project. Whether it’s installing a fireplace in a new food hall, or buying artwork for the common area, the aim is to drive higher traffic and tenant sales, he said. Ultimately, it’s all cash going out the door. (Newsmax)

The response teams to the retail crisis are already at work on makeovers, but the costs are high, and no one knows yet if it will work beyond a few well-positioned success stories. The fact that they are taking such major risks shows how significance this retail paradigm shift is.

Government Bankruptcies Continue To Grow

I recently reported on the near-default situation of several states, showing how deeply to the core of the state the residual problems of the financial crisis cuts. You can add to that list of serious funding problems, the capital city of Connecticut:

Like many other local governments across the country, Hartford — city of Mark Twain and the young John Pierpont Morgan — has been grappling with budget problems for years. On the same day that Illinois lawmakers finally scrapped together a long-overdue budget, Hartford hired the law firm Greenberg Traurig LLP to evaluate its options, which include bankruptcy. It would be the first prominent U.S. municipality to seek protection from its creditors since Detroit did so in 2013. (Newsmax)

The rise in both corporate and national defaults right now is showing up in other areas of the world, too:

Sovereign government and corporate defaults in both developed and developing economies are beginning to emerge. For example, China has registered in 2017 its highest level of corporate defaults in the first quarter of a calendar year on record. Delinquencies and charge-offs in the United States soared to $US1.4 billion in the first quarter of 2017, the highest recorded level since the first quarter of 2011….

In May 2017, six major Canadian banks were downgraded by Moody’s Investor Service (Moody’s) as concerns rise over soaring Canadian household debt and house prices leave lenders more vulnerable to losses. Moody’s also downgraded China’s sovereign debt in May 2017 for the first time since 1989 and has warned of further downgrades if further reforms are not enacted….

In May 2017, S&P has downgraded 23 small-to-medium Australian financial institutions as the risk of falling property prices increases and potential financial losses start to increase. In June 2017, Moody’s downgraded 12 Australian banks, including Australia’s four major banks.

Standard and Poor’s and Moody’s downgraded bonds for the US State of Illinois down to one notch above junk bond status as the state has over $US 14.5b in unpaid bills. (Zero Hedge)

These pressures are spreading at a rate that could be considered endemic around the world by next year.

More Storm Clouds Keep Gathering

Credit demand for both credit cards and auto loans has gone deeply negative for the first time in years. Credit cards briefly touched into the negative in 2012 with a 4% decline; but this year’s decline of 11% far exceeds that. Auto loans haven’t gone negative since 2011, but are now seeing a 14% decline.

US tax receipts have matched this negative move, also down about 14% this year with an uptick last month. They haven’t gone negative since the Great Recession, other than a brief downtick of about -4% in 2011. Other than that brief downtick, a negative turn of this indicator has exactly matched with every recession in the post WWII era.

Factory orders took their second monthly drop and fell by more than economists expected. Durable goods orders declined in April and May, following a year of steady albeit slight growth.

Even the formerly blind Fed Chair Alan Greenspan sees that we are now entering what he says will be a long, “very tough” period of stagflation. He anticipates GDP will bump up to growth of 3% for the second quarter, but says that is misleading number, “a false dawn,” that is merely born of problematic adjustments happening this quarter. “The presumption that we’re going to come bouncing back is utterly unrealistic.” (Newsmax) That’s quite a change for Greenspan who, like most central-bank chiefs, never saw trouble coming in the past.

Bank of America Merrill Lynch’s “Sellside Indicator” hit its highest level since the official end of the Great Recession in June 2011.  The indicator measures how bullish strategists are on US equities, now showing a strong move toward the “jump out and sell” side.

The Chicago Fed National Economic Activity Index took its biggest drop since August, 2016.

US mortgage applications and home purchases have seen steep declines recently. The week ending the month of June, usually a hot time for buying, dropped week-on-week by the most in half a year, even as interest rates had returned to nearly their lowest levels. Correspondingly, pending home sales fell each month from March through May. A majority of economists polled by Reuters, naturally, forecasted that May sales would increase. Here’s dirt in your eye, Economists.

In summary, nothing happening this summer threatens my forecast from the beginning of the year, which said that a major economic breakdown would become evident by summer and that the stock market would crash sometime between early summer and the start of 2018, with it likely to be earlier than later. I’ve bet my blog on it, and I’ll comfortably stay with that bet. I don’t think the above confluence of forces proves that bet right, by any means; but clearly forces are continuing to build strongly in that direction. There is, in fact, almost nothing on our horizon in the US that looks like a playful summer on the beach. (I hope YOU have such a summer, but I am speaking in terms of the economy.)

CONTINUE READING –>

This Stock Market is Priced to Sell

By Vitaliy Katsenelson – Re-Blogged From IMA

If you feel that you have to own stocks no matter the cost; if you tell yourself, “Stocks are expensive, but I am a long-term investor,” — there’s help for you yet.

First, let’s scan the global economic landscape. The health of the European Union has not improved, and Brexit only increased the possibility of other nation’s “exits” as the structural issues that render this union dysfunctional go unfixed.

Meanwhile, Japan’s population isn’t getting any younger — in fact, it’s the oldest in the world. Japan is also the world’s most-indebted developed nation (though, in all fairness, other countries are desperately trying to take that title away from it). Despite the growing debt, Japanese five-year government bonds are “paying” an interest rate of negative 0.10%. Imagine what will happen to the government’s budget when Japan has to start actually paying to borrow money commensurate with its debtor profile.

Regarding China, the bulk of Chinese growth is coming from debt, which in fact is growing at a much faster pace than the economy. This camel has consumed a tremendous quantity of steroids over the years that have weakened its back — we just don’t know yet which straw will break it.

n the U.S., meanwhile, S&P 500 SPX, -0.12% earnings have stagnated since 2013, but this has not stopped analysts from launching into a new year with forecasts of 10%-20% earnings growth — only to gradually take expectations down to near-zero as the year progresses. The explanation for the stagnation is surprisingly simple: Corporate profitability overall has been stretched to an extreme and is unlikely to improve much, as profit margins are close to all-time highs (corporations have squeezed about as much juice out of their operations as they can). And interest rates are still low, while corporate and government indebtedness is very high — a recipe for higher interest rates and significant inflation down the road, which will pressure corporate margins even further.

I am acutely aware that all of the above sounds like a broken record. It absolutely does, but that doesn’t make it any less true. We are in the final innings of this eight-year-old bull market, which in the past few years has been fueled not by great fundamentals but by a lack of good investment alternatives.

Starved for yield, investors are forced to pick investments by matching current yields with income needs, while ignoring riskiness and overvaluation. Why wouldn’t they? After all, over the past eight years we have observed only steady if unimpressive returns and very little realized risk. However, just as in dating, decisions that are made due to a “lack of alternatives” are rarely good decisions, as new alternatives will eventually emerge — it’s just a matter of time.

The average stock (that is, the market) is extremely expensive. At this point it almost doesn’t matter which valuation metric you use: price to 10-year trailing earnings; stock market capitalization (market value of all stocks) as a percentage of GDP (sales of the whole economy); enterprise value (market value of stocks less cash plus debt) to EBITDA (earnings before interest, taxes, depreciation, and amortization) — they all point to this: stocks were more expensive than they are today only once in the past century — during the late 1990s dot-com bubble.

Investors who are stampeding into expensive stocks through passive index funds are buying what has worked — and will likely stop working. Mutual funds are not much better. When I meet new clients, I get to look at their mutual-fund holdings. Even value-oriented funds, which in theory are supposed to be scraping equities from the bottom of the stock-market barrel, are full of pricey companies. Cash (which is another way of saying, “I’m not buying overvalued stocks”) is not a viable option for most equity-fund managers.

Thus this market has turned professional investors into buyers not of what they like but of what they hate the least. In 2016 less than 10% of actively managed funds outperformed their benchmarks (their respective index funds) on a five-year trailing basis. Unfortunately, the last time this happened was in 1999, during the dot-com bubble, and we know how that story ended.

To summarize the requirements for investing in an environment where decisions are made not based on fundamentals but due to a lack of alternatives, look to Mark Twain: “All you need in this life [read: lack-of-alternatives stock market] is ignorance and confidence, and then success is sure.”

To succeed in the market that lies ahead of us, one will need to have a lot of confidence in his ignorance and exercise caution and prudence, which will often mean taking the much less-traveled path.

So, how does one invest in this overvalued market? Our strategy is spelled out in this fairly lengthy article.

CONTINUE READING –>

Applebee’s Franchise Owner Forced To Cut 1,000 Jobs After New York’s Minimum Wage Hike

By Andrew Kerr – Re-Blogged From Western Journalism

The CEO of Apple-Metro Inc., a company that operates about 40 Applebee’s restaurants in the New York metropolitan area, said he’s been forced to cut at at least 1,000 servers in the past year as a result of New York’s recent minimum wage hike.

“We have 1,000 less servers this time this year than we did this time last year,” Zane Tankel told Fox Business’ Stuart Varney on Monday.

That amounts a two-thirds reduction of his total workforce, Tankel said. Continue reading

Yellen’s Shocking Announcement: The US Dollar Is TOAST

By Graham Summers – Re-Blogged From http://www.Gold-Eagle.com

Fed Chair Janet Yellen just announced that the Fed will be kicking the $USD off a cliff.

She didn’t use those words, but the words she did use weren’t all that different.

But first a little context…

The fact is that the $USD has been falling steadily throughout 2017. At this time of this writing, it was down nearly 7% year to date.

Continue reading