Inside Janet Yellen’s Brain at 4 a.m …

Submitted by William Bonner, Chairman – Bonner & Partners

No Return to Sanity

GUALFIN, Argentina – Poor Janet Yellen. Usually, we reserve our pity for the poor, the downtrodden, and the hopeless. But today, we spare a thought for the clueless… and feel Yellen’s pain. Markets are tense. Investors seem to be holding their breath. Everyone is waiting to see what the Fed will do.

There must be hundreds of thousands – if not millions – of well-educated adults sitting on the edges of their seats… eager to hear what this rather ordinary functionary will say.

fall womanTry to spot the patsy/ fall guy…

Photo credit: Mark Wilson / Getty Images

Will Janet Yellen proudly put the Fed on the side of the angels, announcing that she and her crew have decided to move the Fed’s key interest rate to a more normal level… regardless of how much it costs the cronies?

Will she admit that the Fed’s ZIRP and its three QE programs have been failures? Or that they have shifted trillions of dollars toward the rich while leaving Main Street poorer? Will she beg forgiveness for such errant policy decisions over such a long time and vow publicly never to interfere with the market again? No, she won’t.

She will say the outlook is favorable – generally, clearing skies and fair weather is in the forecast. But there are some clouds forming out to the east that could lead to stormy weather. So she will urge a cautious return to normalcy.

She may be feeling confident and allow for a small rate increase… or she may be feeling fearful and decide to hold off for a while. We don’t know. And it probably doesn’t matter much. Continue reading

Trump for Prezz

Submitted by Dmitry Orlov  –  The ClubOrlov Blog

Go ahead, elect, appoint, anoint—whatever it is you do with Prezzidents. It won’t matter. Because it didn’t matter who was President, and will matter even less who plays “The Prezz” on reality TV for the next four years.

As far as actual Presidents, we had Bush, who told lies about Iraq and Afghanistan (to name a few), who was owned by a bunch of Wall Street insiders and whose foreign policy team was stocked with murderous Neocons. And then we had Obama, who told lies about Libya, Syria and the Ukraine (to name a few), who was owned by a bunch of Wall Street insiders and whose foreign policy team was stocked with murderous Neocons. The only difference is that Obama promised a bunch of things—you know, “Change!”—and they didn’t happen. Bush played dumb, Obama pretended to be smart, but both are just sleazy. To find a President who wasn’t a sleazy slimeball, you have to go all the way back to Jimmy Carter. But it didn’t matter that he was President either; everything he did was undone by the next sleazebag in line.

But Trump is different. He is actually a good fit, as an ornamental figurehead, for what the United States has become in its senescence and decrepitude. Here is a short list of things that make him an ideal pick for the role of “the Prezz” on reality TV.

1. Trump is just a brand—a picture of his likeness with the word “Trump” over it, and a salesman’s cant: I am a smart guy, I know how to strike deals, blah blah blah. And, it turns out, by this point in time the United States is also just a brand—a stripey flag and some verbiage that rings increasingly hollow: indispensable nation, freedom and democracy, world policeman, blah blah blah. Now, the United States did at some point stand for something: the rule of law, the right to mind your own business, the ability to get things done. But now it stands for lawlessness. How many Wall Street types got jailed for their transgressions in recent years? None. They don’t even get juvenile detention; they just get off by paying a fine. How many unarmed people got shot by police lately? Lots. Do the cops get any jail-time for what amounts to murder? No. It also stands for a surveillance state that would make Stalin blush: your right to privacy has been eliminated. And the ability to get things done has moved overseas; all that’s left in the US is a bunch of corporate scams—in medicine, in education, in housing, in energy, plus a hyped-up “tech bubble” based on short-lived imported widgets and bits of software cludged together by overcaffeinated hipsters. Do any of these things make you want to jump up and down and yell “Rah-rah?” or “USA #1?” Well, no, so all you have left is the stripey flag; go and wave it about then! Continue reading

Will The Fed Pick A Winning Combination?

Submitted by Raúl Ilargi Meijer  –  The Automatic Earth


NPC Fire at S. Kanns warehouse, Washington, DC 1908It’s highly amusing to read all the ‘expert’ theories on a Federal Reserve hike or no hike tomorrow, but it’s also obvious that nobody really has a clue, and still feel they should be heard. Don’t know if that’s so smart, but I guess in that world being consistently wrong is not that big a deal.

Thing is, US economic numbers are so ‘massaged’ and unreliable, the Fed can pick whichever way the wind blows to argue whatever decision it makes. As long as jobs numbers get presented for instance without counting the 90-odd million Americans who are not in the labor force, and a majority of new jobs are waiters, just about anything goes in that area. Numbers on wages are just as silly.

And people can make inflation a big issue, but hardly anyone even knows what inflation is. Wonder if the Fed does. It had better, because if you don’t look at spending, prices don’t tell you a thing. They surely must look at velocity of money charts from time to time?!

The biggest thing for the Fed might, and perhaps must, be the confidence factor. It’s been talking about rate hikes for so long now that if it decides to leave rates alone, it will only create more uncertainty down the road. Uncertainty about the economy (no hike would suggest a weak economy), and also about its own capabilities. Continue reading

FOURTH TURNING: CRISIS OF TRUST – PART 2

Submitted by Jim Quinn  –  The Burning Platform

In Part 1 of this article I discussed the catalyst spark which ignited this Fourth Turning and the seemingly delayed regeneracy. In Part 2 I will ponder possible Grey Champion prophet generation leaders who could arise during the regeneracy.

The nearly seven year reign of Barack Obama has resulted in furthering wealth inequality, in spite of his socialistic rhetoric. Notwithstanding his Nobel Peace Prize, military spending is at all-time highs and we are engaged in actual and proxy wars across the Middle East and in the Ukraine. Race relations have never been worse. Poverty levels have never been worse. Real median household income is lower than it was in 1989. Real hourly wages are at 50 year lows. Home ownership has plunged to 50 year lows, as middle class workers have been kicked out of their homes and young people are saddled with so much student loan debt and bleak job opportunities they will never have an opportunity to own. The ownership society pushed by Clinton and Bush, with the proliferation of Wall Street created “exotic” subprime mortgages, peddled to people incapable of paying their mortgages, blew up the world in 2008, and the fall out will last for decades.

Meanwhile, Wall Street banks have reaped $700 billion of ill-gotten profits since 2010 as the Federal Reserve has handed them trillions of interest free funds to gamble with, while rigging the financial markets, and paying their executives obscene bonuses. The hubris and arrogance of the Wall Street titans is appalling, as they buy politicians, write toothless financial regulations (Dodd Frank) for their bought off politicians to pass, report fraudulent financial results with the stamp of approval from the FASB, blatantly rig interest rate, currency, stock and commodities markets, and use deception and propaganda to distract and mislead the public through their corporate media mouthpieces – dependent upon Wall Street advertising revenue to thrive.

And still, Obama has not prosecuted one banker for the largest control fraud in world history, as he assumed the role of useful puppet to the vested financial interests. I’m sure he will be paid handsomely after he leaves office in 2017, just as Bill Clinton, Alan Greenspan, and Ben Bernanke have been richly rewarded by their Deep State benefactors for a job well done.

Continue reading

Crude Oil – a “Ray of Hope”

Submitted by Pater Tenebrarum  –  The Acting Man Blog

Why Technical Developments Shouldn’t be Ignored

This is a little addendum to our recent comments on the crude oil market (which you can see here, here andhere, in chronological order). Apparently Goldman Sachs just published a research report calling for $20 oil – which strikes us as a bookend to their infamous $200 call in 2008, which preceded the ultimate peak at $149 by just one or two weeks if memory serves (readers may remember this call by GS – it did get a lot of press at the time).

13328798Photo credit: fmh

The recent sharp reversal after a seeming break of support definitely deserves attention, especially as everybody seems certain that after having declined some 75% from its peak, the price of oil can only go down further. Obviously, no such certainties were in evidence anywhere near the peak or when WTI crude was still trading near $100 a year ago (even though the supply-demand situation had quite obviously deteriorated gravely already).

WTIC weeklyWTIC crude, weekly – a lateral support level was broken amid a price/RSI divergence, and then prices reversed back up. There hasn’t been any follow-through buying since then, so this reversal may yet fail, but it seems to us that the market is ripe for an upward correction even if the longer term bear market isn’t over yet – click to enlarge. Continue reading

The Truly Stupid Case For More ZIRP

I know it’s not fair to pick on an old guy who should have been put out to pasture long ago. But the chief economist for Dow Jones/MarketWatch, Irving Kellner, posted something this morning so truly stupid that he deserves a smackdown——especially after 40 years on Wall Street as top economist at Chase, Chemical and Manufacturers Hanover etc.

Making the case for yet another Fed rate delay, Kellner offered up this gem right out of the gate:

Every day brings another reason why the Federal Reserve should hold off before raising interest rates………First and foremost there was the recent plunge in stock prices.

Huh? Apparently dips are now “plunges” and no longer permitted.

I was actually thinking this was the obligatory hat tip to the casino, and that some better reasons for delay would soon follow. Alas, they got worse!

It wasn’t that Kellner has espied a hair-curling recession lurking around the corner, which might have been flagged by the stock market’s recent 10% “correction”.

No, it was just that the market stumbled for fear that the Fed might stop the juice, and that was reason enough to keep the free money flowing into the 81st month:

There were a number of reasons advanced for its plunge, but when you peel them away one reason stands out: the stock market did not like the idea that the days of easy money, which kept equities afloat, were about to come to an end.

There you have it. The case for ease is that Wall Street prefers ease. Continue reading

Awaiting The Spark?

Submitted by Jeffrey Snider  –  Alhambra Investment Partners

The new week opens much the same as last week traded, with narrow ranges abounding in risky asset prices. From leveraged loans to junk debt, funding markets continue to run the correlations. From this “dollar” view, the lack of “buying” interest in the corporate bubble, bargain value or not, may more properly be understood as lack of “funding” interest. On that point, as noted earlier today, banks are the only aspect to really consider as both the near-term acceleration and long-term decaying structure.

From unsecured eurodollars (LIBOR) to eurodollar futures, the funding market structure remains unkind toward assuming risk again. There is an uncomfortable closeness to the worst parts around August 24 that more than suggests an almost uniform aversion; data and events since then haven’t exactly been reassuring (and not just China), so there is, for once, some sanity and sense here (another indication of how much the cycle has turned already).

ABOOK Sept 2015 Risk Cont 12M LIBORABOOK Sept 2015 Risk Cont LIBOR

Continue reading

Bullion Safe Haven – Gold’s Near Highs In Currencies Globally

Submitted by Mark O’Byrne  –  GoldCore

Gold has risen to near record highs in many currencies internationally. Bullion is again acting as a safe haven for people throughout the world whose currencies are devaluing and for those who are fleeing instability, terrorism and war.

GoldCore: Gold vs Syrian Pound

Gold is not reaching record highs per se, rather these paper currencies are losing their value or are being devalued.  People throughout the world who own safe haven gold are, again, protecting their purchasing power.

Yet you would not know this looking at the many negative headlines and sentiment surrounding gold. Our Western-centric views lead to a simplistic focus on gold solely in dollars, euros and pounds. For most of humanity, gold’s price in dollars is irrelevant. What is relevant is gold in their local currency terms. Continue reading

The Daily Debt Rattle

Submitted by Raúl Ilargi Meijer  –  The Automatic Earth

• Why the Fed Should Raise Rates Now (Brad Brooks) 
• Volatility Seen Lingering No Matter What The Fed Does (Reuters) 
• Kyle Bass: China’s Real Problem Is Its Banking Sector (CNBC) 
• China Braces for Second Onshore Bond Default by State Firm (Bloomberg) 
• Chinese Retreat From Australian Property As Capital Controls Bite (AFR)
• 1,300 Hedge Funds Liquidate Amid China’s $5 Trillion Stocks Selloff (Bloomberg) 
• Chief Of Biggest China Brokerage Swept Up In Stock-Rout Probe (Bloomberg) 
• West ‘Ignored Russian Offer In 2012 To Have Syria’s Assad Step Down’ (Guardian) 
• Hungary Locks Down EU Border, Taking Migrant Crisis Into Its Own Hands (Reuters) 
• Spanish ‘Safe Cities’ Hope To Offer A Haven For Refugees (Le Monde) 
• Refugees May Become Trapped In Greece, Minister Fears (Reuters) 
• Europe’s Frontex Gears Up To Thwart Unwanted Migrants (Reuters) 
• ECB Says Quantitative Easing Relatively Small So Far (Reuters) 
• Ukraine On Brink Of Debt Deal That Greece Can Only Dream Of (Ind.)
• Tuna And Mackerel Populations Suffer Catastrophic 74% Decline (Guardian) 
• Land Degradation Costs World $10.6 Trillion A Year, 17% of World GDP (Guardian) 
• Indigenous Australia Storytelling Accurate on Sea Level Rises 7000 Years Ago (G.)