The G-20s Big Fat Zero – – Now Comes The Bubble’s Demise!

The tens of millions of taxpayer money wasted at the G-20′s Shanghai soire had a silver lining. The assembled masters of world finance came up with a big fat zero on the coordinated global stimulus front.
So doing, they essentially admitted that their money printing central banks are out of dry powder (‘…but monetary policy alone cannot lead to balanced growth’) and that they are divided and confused on the fiscal front.
Indeed, the best result of the weekend is that the gaggle of G-20 statists acquiesced to Germany’s absolute ‘nein’ on the foolish notion that a world self-evidently drowning in debt can still borrow its way back to prosperity. With respect to that ragged Keynesian shibboleth, Germany’s intrepid finance minister left nothing to the imagination:
Germany had made it clear it was not keen on new stimulus, with Finance Minister Wolfgang Schaeuble saying on Friday the debt-financed growth model had reached its limits.
‘It is even causing new problems, raising debt, causing bubbles and excessive risk taking, zombifying the economy,’ he said…….’Fiscal as well as monetary policy has reached their limit.’
So this is not about a failed G-20 meeting; its about the end of a vast, long-running policy scam conducted by global officialdom and their central bankers. In a word, they did not save the world in 2008-2009 with the ‘courage’ of extraordinary policies. They just temporarily buried the symptoms by resort to crank monetary theories and fiscal snake oil.

This post was published at David Stockmans Contra Corner by David Stockman ‘ February 29, 2016.

The Clinton’s And Wall Street – -24 Years of Conjugal Relations

For twenty four years the Clintons have orchestrated a conjugal relationship with Wall Street, to the immense financial benefit of both parties. They have accepted from the New York banks $68.72 million in campaign contributions for their six political races, and $8.85 million more in speaking fees. The banks have earned hundreds of billions of dollars in practices that were once prohibited – until the Clinton Administration legalized them.
The extraordinary ambition displayed in the careers of Bill and Hillary Clinton defies description. They have spent much of their adult lives soliciting money from others for their own benefit. A 2014 story in Timemagazine said this:
‘Few in American history have collected and benefited from so much money in so many ways over such a long period of time…the Clintons have attracted at least $1.4 billion in contributions…’
Time failed to dig deeply enough. A more thoroughly researched expose’ in the Washington Post a year later doubles the amount to $3 billion.
Ruthless ambition put Bill Clinton into the White House twice, sent Hillary Clinton twice to the Senate, and now has her poised on the cusp of the American presidency. It also made the Clintons one of the wealthiest couples in the nation.

This post was published at David Stockmans Contra Corner on February 29, 2016.

Ron Paul: First They Came for our iPhones…

The FBI tells us that its demand for a back door into the iPhone is all about fighting terrorism, and that it is essential to break in just this one time to find out more about the San Bernardino attack last December. But the truth is they had long sought a way to break Apple’s iPhone encryption and, like 9/11 and the PATRIOT Act, a mass murder provided just the pretext needed. After all, they say, if we are going to be protected from terrorism we have to give up a little of our privacy and liberty. Never mind that government spying on us has not prevented one terrorist attack.
Apple has so far stood up to a federal government’s demand that it force its employees to write a computer program to break into its own product. No doubt Apple CEO Tim Cook understands the damage it would do to his company for the world to know that the US government has a key to supposedly secure iPhones. But the principles at stake are even higher. We have a fundamental right to privacy. We have a fundamental right to go about our daily life without the threat of government surveillance of our activities. We are not East Germany.
Let’s not forget that this new, more secure iPhone was developed partly in response to Ed Snowden’s revelations that the federal government was illegally spying on us. The federal government was caught breaking the law but instead of ending its illegal spying is demanding that private companies make it easier for it to continue.

This post was published at David Stockmans Contra Corner by Ron Paul ‘ February 29, 2016.

World Trade Falls 13.8% In Dollar Volume

Weaker demand from emerging markets made 2015 the worst year for world trade since the aftermath of the global financial crisis, highlighting rising fears about the health of the global economy.
The value of goods that crossed international borders last year fell 13.8 per cent in dollar terms – the first contraction since 2009 – according to the Netherlands Bureau of Economic Policy Analysis’s World Trade Monitor. Much of the slump was due to a slowdown in China and other emerging economies.
The new data released on Thursday represent the first snapshot of global trade for 2015. But the figures also come amid growing concerns that 2016 is already shaping up to be more fraught with dangers for the global economy than previously expected.
Those concerns are casting a shadow over a two-day meeting of G20 central bank governors and finance ministers due to start on Friday. Mark Carney, the Bank of England governor, was set to warn the gathering that the global economy risked ‘becoming trapped in a low growth, low inflation, low interest rate equilibrium’.
His comments will echo the International Monetary Fund, which this week warned it was poised to downgrade its forecast for global growth this year, saying the world’s leading economies needed to do more to boost growth.

This post was published at David Stockmans Contra Corner on February 29, 2016.

The Libyan Fiasco Is On You, Hillary – -The Slaughter Email Proves It

Hillary Clinton has spent much of herpresidential campaign running away fromher responsibility for the United States’ disastrous 2011 intervention in Libya. The February 19 release of more emails from her private server may make it harder for her to do so.
In an email with the subject ‘bravo!’ sent on March 19, 2011 – the day the United States and its allies began bombing Libya – Clinton confidant and former employee Anne-Marie Slaughter appears to praise then-Secretary of State Clinton for convincing a reluctant President Obama to take military action in Libya.
‘I cannot imagine how exhausted you must be after this week, but I have NEVER been prouder of having worked for you,’ writes Slaughter, who worked as an advisor to Clinton in the State Department from 2009 to February 3, 2011, and then remained a consultant to the policy planning bureau. ‘Turning POTUS around on this is a major win for everything we have worked for.’ An earlier email release, which I reported on previously, showed that Slaughter had spent February 2011 imploring Clinton to involve the United States militarily in Libya, insisting that it would ‘change the image of the United States overnight.’
‘Keep your fingers crossed and pray for a soft landing for everyone’s sake,’ Clinton replies.

This post was published at David Stockmans Contra Corner on February 29, 2016.

Gold Is Back – -Up 15% YTD And Leading All Asset Classes

Gold’s comeback is dominating 2016.
The precious metal is the year’s best-performing major asset. Its 16 percent gain is topping gauges of high-yield and investment grade bonds, Treasuries, all currencies and major stock indexes in developing and emerging countries.
Turmoil across global equity and currency markets has sparked demand for a haven. Speculators raised their net-long position in gold to the highest in a year. SPDR Gold Shares, the world’s largest bullion exchange-traded fund, attracted $4.55 billion of new money in 2016, the most among all U. S.-listed ETFs, according to Bloomberg data as of Feb. 28. It’s a turnaround from just a few months ago, when investors were selling the metal, sending prices in December to a five-year low.
‘Gold has been the biggest story of this year,’ said Dan Denbow, a portfolio manager at the USAA Precious Metals & Minerals Fund in San Antonio, which oversees $600 million. ‘Last summer, people were calling it a barbaric relic, and nobody could care less about gold. Now, it’s slowly generating more and more buying.’
February Gains
Futures advanced 10 percent since the end of January to $1,230.70 an ounce, poised for the biggest February gain since futures trading data began in 1975. This year, U. S. treasuries rose 2.9 percent, while the MSCI All-Country World Index of shares fell 6.7 percent. The yen, 2016′s best-performing major currency, rose 6.5 percent against the dollar.

This post was published at David Stockmans Contra Corner on February 29, 2016.

New York Times Rethinks Hillary Clinton for President

You know there is something bizarre going on in American politics when the New York Times endorses Hillary Clinton for President at the end of January and then begins to question her judgment before a month goes by. What message does it send to voters when a major newspaper sounds like it has endorser’s remorse and we’re still in the primary season?
One month ago, the Old Gray Lady said that Democratic primary voters ‘have the chance to nominate one of the most broadly and deeply qualified presidential candidates in modern history.’ Unfortunately, they weren’t talking about Senator Bernie Sanders of Vermont, who has served with distinction in Congress for 25 years (16 years in the House and the last nine years in the Senate). The Times was speaking about Hillary Clinton, whose actual tenure in Washington feels like it is one endless episode of a bawdy reality TV show based on ‘The Scandals of Hill and Bill.’
The reader reaction to its endorsement likely stunned the editorial page editors at the Times. Over 5700 comments appeared over the next eight days with many running along the lines of Marian from New York City, who wrote:
‘Throughout the decades, The Times has erroneously endorsed the Clintons in spite of their corruption.
‘This endorsement not only suffers from the same error, it is also dishonest. In the past, The Times gave full-throated acknowledgment of Clinton corruption, but argued, erroneously, that ‘good policy’ trumps character.’
Marion perfectly captures the anti-establishment outrage across the country. How dare the New York Times shove a candidate at us who has wallowed in Wall Street money from firms charged with felonies while she is under an FBI investigation for transmitting sensitive government communications over a household server.
If good character no longer matters to the New York Times – what does that say about media ethics in America?

This post was published at Wall Street On Parade By Pam Martens and Russ Marte.

The Long History of Government Meddling in the American Marketplace

Although the causes of economic crises reoccurring throughout US history and often spreading worldwide can’t be proven using empirical means, oppressive government regulations favoring special interests in relevant industries have preceded every crisis.
Typically, cronyism involves support of politicians in exchange for regulations denying others the freedom to compete with the moneyed interests (e.g., monopolies). Less competition leads to higher costs and lower quality. It reduces economic growth, jobs, wages, innovation, and productivity. Attempts to control economic growth through government spending and/or manipulating interest rates (e.g., stimulate growth with low rates) generally leads to more severe crises.
None of these things are recent phenomena, but can be found again and again throughout American history.
Mercantilism After the Revolutionary War, when the agrarian economy was beginning to industrialize, politicians pursued British-style mercantilism, including colonialism, against natives and regulations blocking competition in banking and manufacturing. Financial panics and depressions resulted under a national bank in 1792 and from 1819 – 21 and state-regulated banks from 1837 – 43 and 1857 – 59.

This post was published at Ludwig von Mises Institute on FEBRUARY 29, 2016.

Ukraine Collapse Is Now Imminent

Two years have passed since Yanukovich was deposed and, as it turns out, another ruthless clan of oligarchs has taken power. No wonder then that Ukraine is heading for a new wave of violence and chaos. Oligarchs are fighting each other, the IMF is pulling out of the country, officials issue laws and regulations only to see them repealed within a day or two by others, and raided European companies are leaving the country after being robbed by the so-called pro-Brussels oligarchic elite.
It was evident from the beginning that the US and NATO-sponsored power transition was doomed to fail. Prime Minister Yatsenyuk made no secret on his personal website about his principal partners, NATO and Victor Pinchuk’s foundation. Victor Pinchuk is a link between the Ukraine corrupt oligarchic establishment and the Western political elite. In 2005, the BBC depicted him as a paragon of Ukraine’s kleptocracy:
‘Ukraine’s largest steel mill has been bought by Mittal Steel for $4.8bn (2.7bn) after an earlier sale was annulled amid corruption allegations. The Kryvorizhstal mill was originally sold to the son-in-law (Mr. Pinchuck) of former President Leonid Kuchma for $800m.

This post was published at Zero Hedge on 02/28/2016 –.

‘Queen Of Chaos’……..Hillary Goes To War

An Excerpt From ‘Queen Of Chaos, The Misadventures Of Hillary Clinton’ by Diana Johnstone
When voters elected Bill Clinton president of the United States in 1992, they were also electing his wife. Bill announced the fact himself, but after the failure of her health reform plan, Hillary’s only political success was her excellent performance in the role of a faithful wife who ‘stands by her man’. Her brave defense of her frivolous husband was widely appreciated, but as a qualification for the highest office in the land, it seems a bit skimpy. Having played a part in wars in the former Yugoslavia might seem more presidential.
During the 2008 Democratic Party primaries, Hillary evoked the foreign policy experience she had gained as First Lady by repeatedly regaling audiences with an exciting account of her trip to the Bosnian city of Tuzla in 1996:
‘I certainly do remember that trip to Bosnia,’ she told audiences. ‘There was a saying around the White House that if a place was too small, too poor, or too dangerous, the president couldn’t go, so send the First Lady. I remember landing under sniper fire. There was supposed to be some kind of a greeting ceremony at the airport, but instead we just ran with our heads down to get into the vehicles to get to our base.’
As word got around of what she was telling audiences, Hillary’s story was rapidly denied by numerous eyewitnesses to the event, as well as by television footage showing Ms. Clinton arriving in Tuzla with her daughter Chelsea and being greeted by little children offering flowers.
Cornered by the Philadelphia Daily News editorial board during an interview in late March, 2008, Hillary Clinton was forced to acknowledge that there were no snipers, but eased her way out:

This post was published at David Stockmans Contra Corner on February 27, 2016.

What Durable Goods Rebound – – Actual (NSA) January Number Was Below 2007

Anything with a positive number and the mainstream will jump. The latest was durable goods which only featured a positive number in the seasonally-adjusted series. Still, it was enough to send out the usual notices that the worst is over even for manufacturing.
The U. S. manufacturing sector could be on the mend after struggling for the past year with a strong dollar, weak global demand and plunging commodity prices.
New orders for durable goods – manufactured products designed to last at least three years – rose in January following their worst annual performance since the recession. That improvement, alongside a pickup in a key gauge of business investment, could signal the sector may be preparing to turn a corner.
The bounce in new orders, following two straight months of declines, mostly served to recoup some of those losses. But the rebound in Thursday’s Commerce Department report comes against a backdrop of other improvement in the domestic economy including steady job gains, a firming housing market and resilient consumer spending.
Maybe it’s the qualification ‘could’ that saves the article from complete detachment, but actually examining the data (like ‘job gains’ and that ‘resilient’ consumer) leads to no such conclusion – not even close. The monthly increase in January in new orders was only in the adjusted set; in the unadjusted data there was no improvement to be found. Like retail sales, we are left to wonder how much was just calendar effects in the seasonal imputations. Even so, the adjusted estimate for January was still less than January 2015 along what is an alarmingly persistent trough (so far).

This post was published at David Stockmans Contra Corner on February 25, 2016.

“We Need Shed No Tears For The Capitalists” – Key Highlights From Buffett’s 2015 Annual Letter

Earlier today Berkshire Hathaway released its 2015 annual report, which among other things includes Buffett’s traditional annual observations and insights. Buffett brushes past last year’s disappointing stock performance, muses on the future of America while taking a swipe at Donald Trump, dwells on Berkshire’s ties to Brazilian PE firm 3G, talks about Berkshire’s big 2015 deal, defends manufactured-housing unit Clayton Homes, bashes inequality and capitalists (just not the crony kind), and concludes with a summary of the biggest risks facing America.
Before we get into the meat, a quick summary of the company’s operational results.
In 2015 Berkshire earned $24.08 billion, up from $19.9 billion a year ago, driven by an 8% increase in total revenue to $210.8 billion; however as shown below is notable that in 2015 the amount of revenues from investment and derivative gains rose by more than 150% to $10.3 billion, resulting in $6.7 billion in after tax gains.

This post was published at Zero Hedge on 02/27/2016 –.

The Donald – – The Good And Bad Of It

America will need the Almighty’s unstinting favor if Donald Trump becomes our 45th President. Still, blessed be The Donald for running a demolition derby in the Republican primaries.
There is no hope for the future of capitalist prosperity and a free society at home and world peace abroad unless the Republican Party is destroyed. And, by golly, Trump may well accomplish the deed.
We need to be clear. There is no longer a Republican Party rooted in the main street highways and byways of America. What’s left of it is not really even the xenophobic, nativist, crypto-racist flotsam and jetsam of the populist right that Trump is successfully calling to political arms.
The fact is, the GOP has mutated into the Warfare State party. Nestled comfortably in the Imperial City, it operates a plethora of special interest rackets which underwrite its incumbents’ bi-annual electoral campaigns out in the provinces.
In the interim, GOP politicians idle their time in the capital and on foreign junkets conjuring and embellishing scary stories about terrorist threats and hostile regimes. So doing, they perceive enemies of the American Imperium to be stalking the planet everywhere and even creeping onto these exceptional shores.

This post was published at David Stockmans Contra Corner by David Stockman ‘ February 27, 2016.

The Socialist Lie that We have had Always a Growth Economy Since Roosevelt

A comment by a reader with a philosophy is interesting and delusional at the same time. ‘Armstrong chose not to seek any compromise but to put all the blame on government. In principle, that’s got to be an absurd point of view. So it seems to me. One more thing, to his alleged factual correlation. Government really began to grow during the Roosevelt years, including the war years, and the economy has been growing ever since. Is your buddy playing fast and loose with history and, hence, with reality?’
Corporations only have influence because they buy government and that is possible only because we have career politicians. Corporations cannot run the world for they compete against each other. We do need government, but an honest one. The only way to achieve that is with shorter one-time office terms. It should be more of a citizen government and any conflict of interest is a bar to any office in any capacity. Cruz’s wife works at Goldman Sachs. Hillary will not release transcripts of her speeches for Goldman Sachs. They buy candidates and own Washington, DC. We deserve what we vote for and stupidly believe in. We are the fools who soak up all the lies each and every time and then the press is anything but independent and free. Hillary has raised tens of millions from the very banks on Wall Street she claims she will stand against. Come on. If that was remotely true then they would not give her a dime. They call Sanders and Trump dangerous because they are not bought and paid for by the bankers.

This post was published at Armstrong Economics on Feb 26, 2016.

How The Drug Of QE Enabled BTFD Geniuses… Not.

Over the years since what is now known as ‘The Great Recession.’ There has been one dominant factor that pushed most – if not all – collective business reasoning and acumen aside, while simultaneously, allowing even the most rudimentary ‘investor’ to believe they were a genius. That factor was: The Federal Reserve and its iterations of one QE (quantitative easing) initiative after another.
If you were a public entity for instance (e.g., shares listed on the various stock exchanges) financial engineering tools once inconceivable were now, at-the-ready in both availability and acceptance via the Fed. e.g., Low interest financing for stock buy backs, etc., etc. Along with the rampant acceptance of adulterating true earnings and more by employing Non-GAAP financial measures as one laid off, fired, downsized whatever to give a favorable Wall Street appearance so that the ‘hot money’ being facilitated by the Fed. would find its way into your company lifting shares based solely on ‘momentum’ strategies, rather, than anything resembling true business fundamentals. (Do I need to also point out ‘loan loss reserve’ games?)
However, there was also an overarching meme held by far too many. That meme was: It was all dismissed by most as some sort of ‘Well that pertains to them – and not me’ reason or argument. i.e., It’s about Wall Street and such – not about me and my business, or interests. I argued (and continue to) against that premise.

This post was published at David Stockmans Contra Corner on February 26, 2016.

Bond Vigilantes Push Slam $258 Billion of Oil Debt – -Yields Soaring

They have sold off hundreds of oil fields, eliminated thousands of jobs and slashed millions of dollars from capital spending and dividends.
But in this unforgiving new world of $30-a-barrel oil, it’s barely been enough.
As U. S. oil executives from Anadarko Petroleum Corp. to Hess Corp. take drastic measures to weather the worst slump in a generation and cling to their debt ratings, creditors are already writing some of them off. So much so that late last month, average borrowing costs for energy bonds with the lowest investment grades – issues totaling $258 billion – soared past those of the highest-rated U. S. junk borrowers for the first time. What’s more, debt issuance industry wide has all but ground to a halt after a record year in 2015.

This post was published at David Stockmans Contra Corner on February 26, 2016.

‘Man-Up’ My Eye – – -The Germans Got It Right on G-20 Stimulus…..Nein!

Here’s just one more example of how central banks and their governments have turned financial markets into a romper room of crybabies. They just can’t stop demanding another nip on the juice bottle:
As finance chiefs and central bankers from Group of 20 nations gather in Shanghai, Citigroup Inc.’s Steven Englander said a failure to include more explicit support for fiscal stimulus in the closing statement from policy makers would be taken badly by investors……..’Keeping the previous language would be very disappointing and would be viewed as either complacent or reflecting policy paralysis,’ Englander, Citigroup’s head of currency strategy for major developed economies, said in a Feb. 25 report. He urged the G-20 to ‘man up and tell member countries that monetary policy should be accompanied by fiscal expansion.’
C’mon. This cat has the gall to demand that the governments of the world bury themselves even deeper in debt when that’s exactly what they have been doing most of this century?
‘Man-up’ my eye. What’s needed here is for so-called economists like Dr. Englander to crawl out of the rabbit hole they’ve been in for years on end. Indeed, in his case the rabbit hole apparently started at 33 Liberty Street where he was the New York Fed research director; and then tunneled through the bowels of Barclays, Citibank/Salomon Smith Barney and the OECD.
As they say, Englander has never had a real main street job. Nor has he met a ‘market’ that wasn’t medicated and manipulated by agencies of the state; or that the gamblers and punters he writes for didn’t think should be goosed even more.

This post was published at David Stockmans Contra Corner by David Stockman ‘ February 26, 2016.

Citi: Here Comes a Global Recession

‘In our view, global growth is at a highly precarious point, after 2-3 years of relative calm,’ the team of economists led by Willem Buiter said in their note, which is likely to exacerbate concerns about the world’s ability to withstand a pause in China’s stunning economic growth.
‘The long-standing fragilities in the world economy relate to the structural and cyclical slowdowns in China and its unsustainable exchange rate regime, the excessive level of debt across many countries and sectors and ongoing regional and geopolitical uncertainty,’ the economists said. The economists have accordingly revised their forecast for growth this year in advanced economies, from a 2.4 percent in January 2015 to 1.6 percent currently, and warned that the 2016 figure ‘could well be lower.’
When they adjust for what they call ‘true Chinese growth,’ the Citi team finds that global growth might have been as low as 2 percent year-over-year in the final quarter of 2015. That is the lowest since the euro zone recession of 2012-13, and if growth remains at such depressed levels, it would qualify as a global recession according to their measures:

This post was published at David Stockmans Contra Corner on February 26, 2016.

Global Trade Is Collapsing – -Chinese Exports To Brazil Down 60% In January Y/Y; All Containerized Shipments To LatAm Down 50%

Chinese exports to Brazil collapsed last month in the latest dramatic sign of the deepening recession in Latin America’s biggest economy.
Containerised exports from China to Brazil of goods ranging from automotives to textiles fell 60 per cent in January compared with a year earlier as the weak real limits Brazilians’ ability to buy imported goods, according to Maersk Line, the world’s largest shipping company. Total volume of containerised imports into Latin America’s biggest economy halved, data showed.
‘What we are seeing right now from China is not only a phenomenon for Brazil, we are seeing the same all over Latin America, declining [Chinese export] volumes into all the markets,’ said Antonio Dominguez, managing director for Maersk Line in Brazil, Paraguay, Uruguay and Argentina. ‘It has been going on for several quarters but is getting more evident as we move into [2016].’
China is Brazil’s biggest trading partner in a commercial relationship that developed rapidly during the commodity supercycle of the first decade of the century. But China’s economy has slowed since the bursting of a stock market bubble in the middle of last year that has sent shockwaves around the world. The Chinese economy grew at its slowest pace for a quarter of a century in 2015 and is expected to slow again this year.

This post was published at David Stockmans Contra Corner on February 26, 2016.