Calling your attention to two recent stories, the debate over the debt limit http://hosted.ap.org/dynamic/stories/U/US_CONGRESS_BUDGET?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2015-10-26-12-34-27 and Russia’s new moves into the Middle East http://www.zerohedge.com/news/2015-10-26/russias-mid-east-takeover-continues-afghanistan-requests-military-assistance-Moscow, are they mutually exclusive or are they somehow connected?
Looking at the debt ceiling first, we are yet again living the lunacy where the U.S. tells its people and the rest of the world “see, we are not broke”! In a sense this is true because when all is said and done, the U.S. can incur any amount of debt required or desired because dollar bills (FRN’s) can be printed or issued to pay for the debt and its service. From a practical point however, this is not true. Should the ceiling be raised to $19.6 trillion and promptly funded to that amount, we will be poking our heads over the 110% debt to GDP level.
Please don’t tell me I am nuts …because the true debt, unfunded liabilities and promises amount to more than $200 trillion …and the GDP number of close to $18 trillion “may” include a bit of “double counting”. Just assuming the official numbers are real at 110% of debt to GDP poses a problem. The problem is this, as previously mentioned 100% debt to GDP is the doorway to becoming a banana republic. And yes, there are “worse” (particularly Japan over 300%) but, we are talking about the issuer of the world’s reserve currency. How can they walk through the banana republic door and still expect any respect from the rest of the world?
Moving on to the next story, a mere month after Russia began aid to Syria’s Assad, Afghanistan is now asking Moscow for aid …and they very well may receive it! But why? And why now? First, “why” is simple, the U.S. has acted like a mob owned cop enforcing only what they wanted and actually stirring the pot so that calm and peace have had no chance in the Middle East. Why now is also simple, the U.S. was scheduled to pull 9,000 of the remaining 10,000 troops put of Afghanistan over the next year. This would have left a void the Afghani government could not fill. This exodus has since been called off, maybe “harvest” season came to mind?
These two stories I do believe have some commonality. They both illustrate “power” slipping from the grasp of the U.S.. The two big sticks, the dollar and military are being seen as weakening. Can you imagine five years ago …or especially 10-20 years ago the Russians militarily entering the Middle East? Or the Chinese importing the current tonnage of “blasphemous gold” or worse, setting up an alternative to the SWIFT clearing system?
I mention these two latest developments and ask you to look back in time because prior, it would be UNBELIEVABLE. Yet now after being in a pot of heated water, we are being boiled while people don’t even question it. It’s like business as usual and no one cares …in the U.S. that is. I assure you many foreigners see this far differently than most Americans! Many foreigners see exactly what is happening, why, how and how it will end. We have gone morally, socially and financially broke slowly to this point …now we await the “then all at once” part.
To finish, the U.S. is being respected like a banana republic who issues hollow threats. The most recent, and we still need to see the outcome are U.S. naval vessels being sent to the South Sea Islands. China has already publicly said “what in the world can the Americans be thinking?” Yesterday president Obama ordered the USS. Lassen to sail within the 12 mile international limit http://www.zerohedge.com/news/2015-10-27/furious-china-slams-obama-decision-threaten-peace-warship-challenge
I hate to say the following but it is obvious. China is the largest creditor to the U.S.. Should they become irritated and angry enough, they could simply sell Treasury securities and cripple our debt markets. For those of you who will surely write me saying “China will never do this and even if they did, the Fed will just buy all the Treasuries sold”, I say this …and what if China sells just a relatively small amount of U.S. Treasuries …and uses that capital to bid for every ounce of gold the West has to offer? Can the Fed “print” tonnage for delivery? How much would this operation take? $5 billion? $10 billion? Does it really matter as China can surely bid for every single Western ounce many times over with money to spare? Do not laugh at this potential as I am sure it has crossed more than one Eastern mind years ago!
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Submitted by Tyler Durden on 10/27/2015 - 18:40 As CNN reports, "the U.S. is considering increasing its attacks on ISIS through more ground action and airstrikes, Defense Secretary Ashton Carter said Tuesday. Carter told the Senate Armed Services Committee that the U.S. 'won't hold back' from supporting partners carrying out such attacks or from 'conducting such missions directly, whether by strikes from the air or direct action on the ground.'"
Submitted by Tyler Durden on 10/27/2015 - 21:45 Impunity has been the norm. The reason there have been no efforts made to criminally investigate is obvious. Former banking regulator and current securities Professor Bill Black told Bill Moyers that "Timothy Geithner, then Secretary of the Treasury, and others in the administration, with the banks, are engaged in a cover up to keep us from knowing what went wrong."
China Margin Debt Hits 8-Week High, Japan Pumps'n'Dumps As Kyle Bass Fears Looming EM Banking CrisisSubmitted by Tyler Durden on 10/27/2015 - 21:21 Following Marc Faber's reality check on China recently, Hayman Capital's Kyle Bass took a swing tonight noting that "China's 7% GDP growth is a farce," and adding that, just as we detailed previously, China's credit cycle has begun and non-performing loans will rise rapidly leading to an emerging Asia banking crisis ahead. Japanese markets continue to entertain with "someone" insta-ramping NKY Futs 100 points at the open only to give it all back as USDJPY slides back towards 120.00 (and 10Y JGB yields drop below 30bps for the first time in 6 months).
Submitted by Tyler Durden on 10/27/2015 - 20:46 Sorry Fed, here is why your attempt at terminal reflation was doomed from day one.
Submitted by Tyler Durden on 10/27/2015 - 20:20 At the heart of the European Commission's philosophy is the implicit acceptance that investors' rights take precedence over the public's rights -- in this case, those concerning the environment. Everything in the leaked sustainable chapter is couched in terms of aspirations -- the US and EU are encouraged to do the right thing as far as sustainable development is concerned, but there are few, if any, obligations or enforcement mechanisms. When it comes to protecting investors, on the other hand, everything is compulsory, backed up by supranational tribunals that can impose arbitrarily large fines, payable by the public. Although it is true that governments are given the "right" to legislate as they wish when it comes to the environment, investors are given the "right" to sue those governments black and blue if they attempt to do so.
Submitted by Tyler Durden on 10/27/2015 - 19:45 Former head of the NSA, Keith Alexander, has been a busy guy since he left government. Having avoided any accountability whatsoever despite systematically using the U.S. Constitution as toilet paper, Mr. Alexander is doing what every government official does upon leaving office. He’s trying to grab as much money as possible.
Submitted by Tyler Durden on 10/27/2015 - 19:15 Over the course of the past four weeks, Russia has captured the world’s attention with Moscow’s “unexpected” intervention in Syria’s protracted civil war. For those interested, we present the following infographic which endeavors to outline “everything we know” about Russia’s deployment in Syria from sorties flown out of Latakia, to overflight denials, to cruise missile strikes.
China Unleashes The Jingoist Rhetoric: "If U.S. Ships Stop, We Should Lock Them By Fire-Control Radar"Submitted by Tyler Durden on 10/27/2015 - 19:14 "In face of the US harassment, Beijing should deal with Washington tactfully and prepare for the worst. This can convince the White House that China, despite its unwillingness, is not frightened to fight a war with the US in the region, and is determined to safeguard its national interests and dignity. Beijing ought to carry out anti-harassment operations. We should first track the US warships. If they, instead of passing by, stop for further actions, it is necessary for us to launch electronic interventions, and even send out warships, lock them by fire-control radar and fly over the US vessels."
Guest Post: Donald Trump Says The U.S. Should Have Stolen Iraqis' Oil After Destroying Their CountrySubmitted by Tyler Durden on 10/27/2015 - 18:45 What’s refreshing about Trump is the directness with which he expresses his psychopathy. For example, candidates such as Hillary Clinton sugar-coat theirpsychopathy, or even find ways to get their interviewers to join eagerly in their expressions of it (camaraderie with power-holders), but they don’t say such blatant things as (to paraphrase Trump here), “After we raped them — which we shouldn’t have done — we should have stolen from them, and we should still be stealing from them.”
Submitted by Tyler Durden on 10/27/2015 - 18:15 "... if you look at what is supporting equity prices - how much of that support is coming from real economic activity versus from using stock buybacks, using cash on balance sheet for stock buybacks, or mergers and acquisitions, to reduced competition in the marketplace. These are the sort of stories that if there were a small increase in interest rates, you would temper some of that frothiness. Eliminating the incentive to engage in that kind of activity seems to me to be a good idea... There would be a proportion of the population that would have less capital gains - but they’ve been enjoying very big capital gains, and it is a narrow segment of the population."
Submitted by Tyler Durden on 10/27/2015 - 17:15 The weakness seen in world economic activity is partly the result of the lack of a real purge of the financial system in 2008. It has become unimaginable to let entire parts of the system collapse, and the titling of some financial institutions as “systemic” is part of this logic. Policymakers attempting to keep unhealthy economic and financial institutions alive are making a mistake. The very essence of capitalism lies in the process of creative destruction. What we see here is not a way out of the crisis. Instead, we are on the edge of a new financial disaster.
Submitted by Tyler Durden on 10/27/2015 - 16:52
Submitted by Tyler Durden on 10/27/2015 - 16:43 While lower than last week's levels, API reported a still considerable 4.1 million barrel crude inventory build last week. This is the 5th consecutive inventory build. However, despite the size of the overall build, crude prices are rising (extending gains off NYMEX Close ramp) which may be related to a 748k draw on crude stocks at Cushing.
Submitted by Tyler Durden on 10/27/2015 - 16:32 1,426. That’s the number of Americans who renounced their US citizenship last quarter according to the US government’s report just released this morning. That’s a record high for a single quarter, easily beating the last record high set earlier this year, which beat the previous record high set in 2013.
Yes, the Civil War was about Slavery. Get over it. Stone Mountain can keep its memorial, but it needs a reboot … Yesterday I wrote a piece about how it’s time for the Georgia legislature to stop honoring slavery, and it seems people have taken it way out of context. The first line of that post was “Is it time to put away the war between the states? Yes, it is. It’s way past time.” But some people can’t put the Civil War away. I’m not sure if it just haunts their dreams, or if they’ve got a great-great-grandfather who fought at Antietam, but these people—typically Southerners—can’t rest until they prove that the South was the victim. The Civil War was primarily, and at its root, about slavery. This should be obvious to anyone looking objectively at history. – Redstate
Dominant Social Theme: Lincoln was a hero and saved the union so that the Patriot Act could provide further luster to our freedoms.
Free-Market Analysis: We don’t mean to pick on the author of this article because we chose it simply as a representative text. In the past months, Northern revisionism regarding the Civil War has been powerfully promoted by the mainstream media.
Republican presidential candidate Donald Trump recently reposted a tweet from a follower blaming his trailing numbers in a new Iowa poll on genetically modified corn that “creates issues in the brain.” The GMO issue looms large for the candidates currently in the running.
“@mygreenhippo #BenCarson is now leading in the #polls in #Iowa. Too much #Monsanto in the #corn creates issues in the brain? #Trump #GOP“
— Donald J. Trump (@realDonaldTrump) October 22, 2015
Discussion about whether or not there is a silver shortage has divided the silver community. More information about the situation has recently come out. The discussion usually revolves around to points of view: that there is no silver shortage, merely a coin shortage as certain Mints run out of blanks to mint coins. The other says there is not enough silver in the world. As David Morgan stated:
“A pet peeve of mine is when an article is published talking about a shortage in silver or gold. Recently, we have seen an increase in articles claiming that there is a precious metals shortage simply because both the U.S. Mint and Royal Canadian Mint ran out of blanks. Both Government Mints predetermine a rough amount they will mint at the start of the year. When demand surges, a “bottleneck” can occur and this has happened in the past. Why is this such a pet peeve? Because a shortage in a specific silver product does NOT mean a shortage in the raw material. It would be like saying there is a rice shortage if Rice Krispies stopped being produced momentarily.”
“It’s been a rotten year for distressed and defaulted loan paper.” That’s how S&P Capital IQ LCD starts out its report on leveraged loans.
“Rotten” may be a euphemism. So far, 2015 has been the worst year for defaulted “leveraged loans” since 2008 when the US financial system imploded under its own excesses.
Leveraged loans are the loan-equivalent to junk bonds.
from ENE News:
New York Times (AP), Oct 25, 2015 (emphasis added): Radioactive Dump That Burned in Nevada Had Past Troubles… State officials said this week they didn’t immediately know what blew up… A state fire inspector, Martin Azevedo, surveyed the site on Wednesday. His report, obtained Friday by The Associated Press, described moisture in the pit and “heavily corroded” 55-gallon drums in and around the 20-foot-by-30-foot crater. Debris from the blast spread 190 feet. Two drums were found outside the fence line… Nevada state emergency management chief Caleb Cage said operating records for the damaged trench…weren’t immediately available… [Former Nevada Governor Robert List] expressed doubt that anyone will ever know what’s really underground at the site.
If you have read my article on the magazine cover of the year for The Economist, January 2015, then you know there is a range of Global Economic Crash dates linked to the magazine cover: http://bit.ly/1M6L5xj
Here is the cover image (pictured).
The first date, October 23, 2015 has come and gone with no crash. That was my first choice of the most likely date for the Crash, for several reasons, mostly prophetic.
The Securities and Exchange Commission will be holding a public meeting today on the structure of today’s opaque and deeply fragmented stock markets (without conceding that they are also rigged, as many informed voices contend). The meeting will begin at 9:30 a.m. and will bewebcast on the SEC’s website.
The meeting is considered by many to be a few crumbs sprinkled about the corrupted landscape by Mary Jo White, Chair of the SEC, in the face of a growing campaign to oust her from office.
by Nadia Prupis, Common Dreams:
In a major setback for net neutrality, the European Parliament on Tuesday passed widely-maligned internet regulations without the amendments that rights groups said were crucial to protect free speech, democracy, and innovation online.
Wide loopholes in the rules open the door for Internet Service Providers (ISPs) to discriminate against networks, speed up or slow down internet traffic, charge companies for faster loading times, and strip users of protections. The legislation passed 500-163.
Having just published The Girl Who Cried Exit Strategy, this context makes the latest from the Federal Reserve (and their media parrots) particularly humorous/absurd. After all the talking-heads were telling us — for nearly a year — that the Fed was going to raise the U.S. interest rate in JUNE, for sure, here we are at the end of October. What are the talking heads telling us now?
Fed set to remain on pause as GDP data expected to show slowdown
Observe as years and years of one set of lies now directly conflict with years and years of other lies. The so-called U.S. Recovery is now supposedly nearly 7 years old. Indeed, it is officially no longer a “recovery”, because officially the U.S. economy has now grown past its level prior to the Crash of ’08. During this 7-year pseudo-recovery, the U.S. economy has supposedly produced more than 10 million “new jobs”.
by Adan Salazar, Infowars:
A restaurant owner in Indiana is offering a discount to customers who bring concealed firearms into his establishment after a robbery that occurred Saturday.
Papa Roux owner Art Bouvier announced on Facebook Saturday night that an armed robber had walked in, threatened his employees and stolen money.
“I have a gun; I’m gonna need all the money out of your registers,” the robber said, according to Bouvier.
After the thief had made off with the money, Bouvier took to Facebook to announce that “until further notice, your concealed carry license earns you 25% off your meal when you dine in.”
If you ever buy kid’s meals at Wendy’s you’ll be happy to know that the apples they serve will not be GM ‘Arctic apples’ as per a recent statement by the company. The company confirmed in April via email to Friends of the Earth that it has no plans to sell Arctic apples. McDonald’s and Gerber have also reportedly stated that they won’t be using this GM apple variety. Can we trust them?
Wendy’s, McDonald’s, and other Big Food companies don’t exactly have the best track record when it comes to serving healthy food, but mega corporations like these are becoming less and less relevant to a public who is increasingly interested in what they are being served.