WITHOUT FEAR

Why do people doubt science? Because it 's been a false God, held up to be the savior of all saviors in the modern world not to be questioned and, in many ways, like the religion it warred with centuries ago that wasn't supposed to be questioned either.

In some ways scientific zealots have replaced their old religious foes.

Yet science can be--and is manipulated--by many. Hardly a month goes past that some scientific data, it turns out, is proved to have been manipulated.

Is this more a statement about humans rather than science? We don't think so. Science often turns out to be incorrect. A few decades ago science labeled cholesterol a villain. That proved wrong with time. Science despite its reverence for truth and law changes.

In the early days of the cholesterol frenzy eggs were the villain of choice. Later it became red meat. Now it's something else.

Science despite what its believers claim is subject to the same human frailties like greed and pride as any other discipline. Big pharmaceuticals is a classic example. Anyone who believes it takes three oral hypoglycemic medicines to control non-insulin diabetes is smoking the good stuff regularly on the way to their ATM.

A full 30% of the current flu vaccine making the rounds doesn't work. Why? Because the viruses are like you and me; they want to survive. But unlike you and me they're much better at mutating. 

Bacteria and viruses just bring the point home. So-called super bugs are testimony to man's folly of putting all their scientific eggs in one basket.

Screwing around with Mother Nature is never free. And that brings us to the latest popular frenzy pushed by the so-called scientific elite and MSM, climate change. Is the climate changing? Of course. Is it changing for the reasons these groups claim? Our response, not so fast.

Part of all frenzies is to force everyone on board, dissenters beware. A lot of the climate-change crowd come from the left--a fact, not a partisan statement. Dissenters absent the requisite doctorate get marginalized as ill-informed, non-experts.

So here's reminder for those on the left from one of their all-time idolized political icons, John F. Kennedy after his Bay of Pigs debacle, "How could I have been so stupid?"warning to "never trust the experts." 

Economists are supposed to be experts given all the time most spend in their econometric cellars. The air down there can get pretty thin. Maybe that's an excuse.

One answer can be gleaned from previous forecasts. Back in 1995, economist and Financial Times columnist John Kay examined the record of 34 British forecasters from 1987 to 1994, and he concluded that they were birds of a feather. They tended to make similar forecasts, and then the economy disobligingly did something else, with economic growth usually falling outside the range of all 34 forecasters.

http://www.slate.com/articles/arts/the_undercover_economist/2008/08/the_wisdom_of_crowds.html 

The Queen of England famously asked why economists failed to foresee the financial crisis in 2008. "Why did nobody notice it?" was her question when she visited the London School of Economics that year

Economists' failure to accurately predict the economy's course isn't limited to the financial crisis and the Great Recession that followed. Macroeconomic computer models also aren't very useful for predicting how variables such as GDP, employment, interest rates and inflation will evolve over time. 
http://www.cbsnews.com/news/why-are-economic-forecasts-wrong-so-often/

Economics is often described as the ‘dismal science’. Unlike other traditional sciences, economics rarely provides a simple solution to present day issues. Furthermore economists have a poor record of predicting the future. Even notable economists such as Joe Stiglitz agree that economists only get it right at best around 3 or 4 times out of ten. However it should be acknowledged that economic forecasting is a difficult art at best – human behavior is forever changing and the economy is a complex mechanism with many working parts. Nevertheless I thought it would be entertaining to highlight some of the most wildly inaccurate forecasts in recent times. Here are some of the best… https://shaundacosta.wordpress.com/2013/06/30/when-economists-get-it-wrong-the-worst-economic-predictions-of-all-time

So how does this fit with Chairwoman Yellen's recent revelation that from here on out it all depends on the data? That should strike a cord of confidence in you as you drift off to sleep every night.

Predicting the courses of diseases or disease outbreaks isn't any better. And that includes those experts in epidemiology.

THE EBOLA epidemic that took off last year in three west African countries—Guinea, Liberia and Sierra Leone—is finally fading. The last three weeks have each seen around 120 new cases, the lowest level since July 2014. In total, around 22,000 people are thought to have been infected, and 9,000 to have died. But predictions last year were much higher, including a worst-case scenario by America’s Centres for Disease Control and Prevention (CDC) of 1.4m cases, reported and unreported, by January 20th. How are such predictions made, and how can they go wrong?

Disease predictions come from mathematical models that group the population at risk of a disease into categories and describe how people move between them. Both the categories and the flows depend on the disease. With Ebola, there is a long lag between infection and the first symptoms, during which it is not contagious. And recovered sufferers are immune. So an Ebola model will group the “susceptible” (who have not yet had the disease), “exposed” (infected but not yet showing signs of the disease), “infectious” (ill and contagious) and “removed” (no longer infectious because they have recovered or died). Estimates for the sizes of these groups and how people move between them—including how many people catch the disease from each infectious person, how long people remain infectious and how likely they are to die—are used to build a computer model showing how the spread of the disease is likely to unfold. The CDC’s Ebola model also sub-divided infectious people into three smaller groups: isolated in hospital, partially isolated at home or elsewhere in the community, and unisolated. And its highest predictions were swollen by the assumption that for every reported case, 1.5 more went unreported.

http://www.economist.com/blogs/economist-explains/2015/02/economist-explains-3

But let's now leave out the current tribe of revered MSM favorites, central bankers.

Four months ago, when unemployment stood at 7.8%, the Bank of England issued forward guidance on interest rates. Threadneedle Street said it would not even start to muse about an increase in interest rates until the jobless rate hit 7%. According to the Bank, this was likely to be in early 2016.
 
Happily, the Old Lady's forecasts have proved spectacularly wrong. The recovery in the economy since the spring has proved to be jobs rich, with the latest report from the Office for National Statistics (ONS) showing that employment was up by 250,000 in the three months to October. Unemployment fell by almost 100,000 over the same period and the average jobless rate for the three months from August to October dropped to 7.4%.

The chart below is from the Washington Post, hardly a right wing publication. It's a scribe owned outright by a well-known lefty named Warren Buffet.



We could go on, but we won't. The purpose is a quote from an article from today's "Daily Bell," about the generically modified grains Monsanto produces: "Monsanto Laments Dwindling Faith in Science."

The Bell is a libertarian site and the Post a liberal one as is Slate and CBS.

On Twitter recently, someone asked the question "Why do people doubt science?" Accompanying the tweet was a link to an article in National Geographic that implied people who are suspicious of vaccines, genetically modified organisms (GMOs), climate change, fluoridated water and various other phenomena are confused, adhere to conspiracy theories, are motivated by ideology or are misinformed as a result of access to the 'University of Google.' ... Who tweeted the question and posted the link? None other than Robert T Fraley, Monsanto's Vice President and Chief Technology Officer. 
  
Our experience in science might not invalidate yours. But in no way does yours invalidate ours.

If you allow MSM and its scientific cohorts to silence you on these issues with their marginalizing tactics, you'll be doing a grave disservice to yourself and your loved ones. 

This is about much more than truth. It's about your legal right to openly dissent without fear of any private or government retribution.

LOSS OF LOCAL

A friend toils on the workman’s compensation side of medicine. He’s been doing it for nearly three decades.

For the unfamiliar WC is all about work-related injuries. When people are injured on the job their employer usually pays for work-related medical care. And a claim gets filed with the state and insurers.

Each state has its own regulations and each state is different. But it’s big business that involves essentially the public trough, a place where many sup, perhaps not the least of whom are PI or personal injury attorneys.

You might remember the name of John Edwards, the former Democrat candidate for president a few elections back. That's what he did, personal injury, where he made his millions. 

You might also recall he was the guy who got his paramour pregnant, cheating on his wife while she was dying of cancer, the sort of guy you want to find yourself sitting next to in your pew next time you venture to church. Excellent presidential timber.

Drive into or out of just about any airport in America and you’ll see the billboards. On the rare chance you miss them there, check out late night infomercials and talk radio. Vultures can smell decay. 

My friend though he owns three clinics is a mom-and-popper in a declining mon-and-popper industry that’s being swallowed whole by big conglomerates. Just like Costco and Walmart in retail to farming and pharmacies like CVS and Walgreens to you name it, the genie is out of the neighborhood bottle.

And if you're an animal lover it's happening in the veterinarian world also. Like most things in life there's good and bad here. Loss of choice or some might say freedom is one bad aspect.

Price monopoly is another. The good part? Maybe you spend a few minutes less than you would waiting in an emergency room. These conglomerates are profit driven, run by bean counters.

This is not to suggest that profit is a nasty word, just to point out despite much of Hollywood's misguided themes, greed is alive and well in more places than Wall Street.

It’s a big, cold, indifferent business despite the marketing. Vultures can also smell money. But we’ll leave that for another time.

There's another point here, about the loss of local. Local, whether you realized it or not, is about sovereignty, choice and globalization. Local and globalization are antonyms. Remember that the next time you head to the polls.  

Besides worker-related injuries most of these clinics do other tasks like pre-employment physical exams and drug screens and even urgent care to a degree. In some ways they are far more sensitive to changes in the economic landscape than all the economists with all their econometric minutiae together.

Pre-employment physicals have to do with jobs. And the number fluctuates not only with the seasons but the times. Even drugs screens are a decent economic indicator. A positive test usually results in a non-hire, especially in harder times like the low point of the recession.

But before the recession when the economy was percolating things were so tight employers were hiring applicants with positive tests. They needed bodies. In short, it’s a cycle. 

The other neat feature is one gets to talk to lots of business owners, large and small. It’s an informal survey, a snapshot, but it’s much closer to where the surf and the sand unite than econometric models.

During good times work-related injuries usually increase. And foot traffic, not unlike, say, retail, tends to decrease during slower periods. It probably makes too much common sense for the cognoscenti.

And besides it’s much more difficult for them and MSM to manipulate.

REPRESSION ON THE RISE

 
Some Americans would have trouble locating Venezuela on the map let alone spelling it.

There might not be trouble in paradise yet, but if the country with one of the largest oil reserves in the world and an OPEC member pictured your idea of paradise, then there's trouble, serious trouble.

Suppression of dissent, not too different from what's going on in China, represents serious trouble. Last week Venezuelan police jailed Caracas Mayor Antonio Ledezma. Ledezma's alleged crime, plotting with again the alleged help of U.S. aid to dismantle Venezuelan President Nicolas Maduro's presidency.

Jailing opposition leaders seems to be a registered patent for the Maduro administration as Ledezma in not the first to be carted off to the clinker. In the meantime, the bolivar sank from 50 to 170 to the U.S. dollar. That's a big devaluation.

As the country struggles with a collapsing economy and falling support for the incumbent administration, Maduro has increased repressive measures against his dissenters bringing criticism from outside the country. 

Repression of dissenters appears to be on the rise. And it's not just rising in what many view as third world nations.

DOLLAR PAIN

Pain by any other name is pain.

And there's been enough lately to go around on the earnings front for U.S. multinationals like Coca Cola and Mondelez. 

Hewlett-Packard is the latest to queue to the complaint window. 

The perp, as they say in television crime shows, is the rallying dollar.

Unfavorable foreign currency exchange rates were blamed for part of the company's disappointing earnings as approximately 65% of earnings come from outside the U.S. 

Toss in beggar-thy-neighbor currency devaluations and you have the ingredients for more pain. The long U.S. dollar trade some believe is getting long in the tooth and looks a bit overcrowded. 

According to one report, it is now three standard deviations from its 10-year average.

Any disappointment in the consumer price index could cause some scrambling. Meanwhile, HPQ's stock took a bit hit after announcing its recent earnings expectation for the year.

At this stage unexpected events could inflict even more pain.

THEN YOU REALIZE

At first you think they can't be serious. Then you realize they are, those Brussels bureaucrats.

Brussels has granted a reprieve to France and Italy after they violated budget rules, a decision that underlines the readiness of the bloc to bend its fiscal rules to achieve economic growth. The term undermines seems more appropriate given all the Greek mess going on.

The EU decided against fining France under its so-called tougher budget rules, meanwhile claiming France is the "eurozone country in most need of remedial measures to put its public finances in order."

According to the report, France was given until 2017 to meet the EU's limit on debt to three percent of economic output or GDP. Some in France were seeking even longer, lobbying for an additional year to hit the three percent marker.

For the first time ever the new rules allow for fining the recreants who violate fiscal and budget parameters. France is a known recidivist.

Italy's debt level at 130 percent of GDP is second only to Greece.

France and Italy, the second and third largest economies in the a EU. no doubt view themselves as special, a point not lost on those fiscally wayward Greeks.

At first you think they can't be serious. then you realize.....

NOT MUCH

In Texas there's a popular dance called the Texas Two-step

At the Federal Reserve Bank in Washington there's another dance going on, the Yellen Half-step.

Some apparent Yellen fans, like today's editorial in the Financial Times, "Yellen's 'patient' retreat from zero interest rates," note: "Fed chair is right to be open-minded about the turn in US cycle."

Open-minded in some quarters is synonymous with clueless. We'll be a bit kinder and say flying by the seat of her drawers.

So far, Ms Yellen is doing a good job of it. Little by little she is acclimatising us to the prospect of a gradual turn in the US interest rate cycle. The markets this week reacted calmly to her hint that the Fed will drop the word 'patient' from its guidance at its next meeting in March. In other words, the Fed would no longer pledge to keep its policy rate at zero for at least the next two meetings. From now on its actions will be dictated wholly by the data. This keeps open the possibility of a tightening of monetary policy as early as June.

There's so much wrong with this pathetic little-kid-talk paragraph it's difficult to know where to start.

Guidance, the market needs guidance about something that's been rehashed in the news for months? The only folks who don't know about it are those who don't want to know about it.

Some might refer to them as the blessed.

"Actions wholly dictated by the data," what have they been doing all these months, playing a game a economic charades? These folks get paid some decent taxpayer-funded money to collect and decipher data. And yes, lo and behold, occasionally utter some straight forward sentences in straight-forward English.

But taking this stance is not the same as forecasting a definite rate rise. This is how it should be. Ms Yellen deserves credit for sharing a degree of humility about the precise strength of the US recovery. 

In this case, humility is to clueless as the sand is to the sea. Take a look at that "little by little" sentence. There's enough hedging in there to start a Wall Street fund.

If nothing else, this is a good example of what bureaucrats,  politicians and MSM think of the masses. Not much.

BIG BENEFACTOR

Christopher Morley once noted that the only good life is to live it in your own way. The same holds for the truth. If you really want it, you're going to have to look for it yourself.

Here's a read if you have any sense of wanting to ever discover the truth one should plow through. The glorious year of 1913 birthed two huge whammies on the American public, the IRS and the Federal Reserve.                                                       

Some claim it's been downhill ever since. Take the time to do your homework and then decide for yourself. Don't let some MSM wag decide for you. MSM is on its last legs. This is only one reason they're coming after the Internet so strongly.

Given the recent call for auditing, there's a bunch of ruffled Federal Reserve feathers of late. A cynic might ask: "What's up with that?"

Hardly anyone watches television any more and many of those who do program what they watch. Advertising revenue has taken a huge hit and the moguls are getting their silk panties twisted in a bunch.

The panic will arrive later when the end becomes crystal clear. These boys and girls will have to find a new gig, a nettlesome problem for all.

 A recent Financial Times article, "Switch to on-demand TV alarms broadcasters," had the sub-headline: "Concerns grow over falling audiences for 'linear' television and the impact it will have on advertising revenue."

A sidebar noted the growing viewer switch to DVDs, Netflix and catch-up services. Hello Bill O'Reilly and Brian Williams. The nightly news with few exceptions has been a joke for a long time.
If it gets any more filtered it will wind up in its rightful place, a late night infomercial.

With YouTube to watch, Instagram pictures to take and Facebook, Snapchat and other social media platforms to explore, a generation   of young Americans that used to turn on television for entertainment is finding its fix elsewhere.

Isn't that what the so-called news has become, entertainment.

TV executives started  sounding the alarm last autumn when Viacom, 21st Century Fox, Comcast, which owns NBCUniversal, and Walt Disney began reporting lower advertisi9ng revenues for some or all of their networks.

According the the report the trend has continued to the latest financial results.

BET, which is aimed at African-American audiences, fell 22 per cent, the children's network Nickelodeon was down 17 per cent and MTV fell14 per cent.

As one mogul put it, "Its no secret there are far-reaching shifts taking place in our industry."

Yes, indeed there is. And one of the biggest benefactors with any luck may be the truth. 

.http://themostimportantnews.com/archives/janet-yellen-freaking-audit-fed-100-reasons

OVERSTRETCHED

So the Brussels bureaucrats granted Greece four months to show its true economic colors.

Not that Greece shouldn't have been granted the time, it most likely won't matter, but does anyone think it will really make a difference?  Meanwhile, the market celebrates. That's a pretty thin margin to get all bubbly about.

If there's anything more in the news than deflation it has to be the Janet Yellen circus and interest rates hikes. Central banks have flooded the world with easy money and now Ms Big is about to finally remove the punch bowl.

Once again kudos to Financial Times writer James Mackintosh's "Short View" for calling a lexicographer a lexicographer, apparently a person the Fed doesn't have on staff.

"For lexicographers specializing in central bank-speak, yesterday was a big day," Mackintosh writes. "Janet Yellen, chairwoman of the US Federal Reserve, defined what the Fed means by 'patient': not raising rates for the next two meeting."

Bill Clinton fans will love Yellen for taking a page from the former president's definition of "is" being pretty much what members of the elite class say it is. On this stage Yellen's an elite player, fumbling and stumbling with the purse strings of real people.

So perhaps a bit more bureaucratic confusion is okay. But then again maybe it isn't.

"We have to be forward looking," she noted. "We have highly accommodative policy that has been in place for some time." Yet most of the indicators she and her band of merry bankers use are backward looking.  "Data dependent" is rear view mirror.

The first rate hike won't amount to much. As Mackintosh points out, what's important is the market's perception of the trend. In other words, as in past examples will there be a series of consecutive hikes.

We use the tern examples euphemistically as in past mistakes.

The most hated firm on the planet, Walmart, just hiked wages. Look for the next retail shoe to fall of a lemmings-see-a-lemmings do. The dot plot may misconstrue all those part-timers--firms for obvious reasons love--who actually want full time work.

We had to hazard a guess, once interest rates strart up, the Fed will error on the overdone side and that should cause to think about start placing your portfolio on what's cheap now versus what's, to use a kind term, overstretched. 

NOT SO FAST

Kudos to the Chicago voters who forced their socialist mayor Rahm Emanuel into a spring run-off election.

Hopefully, when the time comes they will find the courage to take back their city and run him off completely.

Emanuel received only 45.4% of the votes, unable to get the required 50% pus one one vote to return to office. The run-off comes despite Emanuel greatly outspending his opponent, Jesus "Chuy" Garcia, a Cook County Commissioner, and bringing in his big brother from Washington, President Obama.
--  


Who says little folks can't do seemingly big things? California is the largest state in the U.S. and home of what many believe is the seventh largest economy on the globe. It's also a trend setter of sorts.

Last year without benefit of a public debate legislators and the governor rammed a bill to ban use of plastic bags in grocery stores through that was set to become law this July. It would be the nation's first statewide ban on use of the bags.

Not so fast. Opponents of the bill--however one feels about it--recently met the qualifications for a referendum on the law to be on the November 2016 ballot. The bill also called for extending the ban to liquor and convenience stores in 2016.
--


From recent letters to the editor, here's one to the WSJ from Pamela S. Hyde, administrator Samhsa U.S. Department of Health and Human Services, Rockville, Md.

Related: http://theeconomiccollapseblog.com/archives/maryland-millionaires-per-capita-answer-might-make-angry

Samhsa is the government acronym for Substance Abuse and Mental Health Services. Hyde, apparently taking objections to a recent comment she claims "mischaracterized the important work" of Samhsa, expresses her disappointment that someone questions Samhsa's work.

Hyde's last paragraph in her rebuttal says everything you want to know about government obfuscation and meaningless verbiage.

We are continually seeking  opportunities to better meet the complex needs of people wuith serious mental illnesses, including individual and systemwide coordination. The president has taken important steps to increase the capacity of the mental-health system in the U.S. We look forward to continuing our work to help all Americans--including those with serious mental illness--lead healthy,m full and productive lives in their communities.

AROUND THE WEB

http://money.cnn.com/2015/02/24/investing/lloyd-blankfein-china-capitalism-goldman-sachs

http://www.bloomberg.com/news/articles/2015-02-25/european-index-futures-little-changed-telefonica-axa-may-move

http://www.wsj.com/articles/fed-changes-its-countdown-signal-heard-on-the-street

http://online.barrons.com/articles/falling-earnings-forecasts-belie-new-highs-in-stocks-

 platts.com/2015/02/25/us-steel-filing-unfair-trade-cases/

.zerohedge.com/news/2015-02-24/secret-black-site-revealed-chicago-when-you-go-you-just-disappear

wolfstreet.com/2015/02/25/junk-bonds-are-extremely-overvalued-bond-guru-fridson/

businessinsider.com/gundlach-on-rates-oil-economy-2015-2

institutvk.cz/texts-in-english/introduction-fraser-institutes-book-essential-hayek

theeconomiccollapseblog.com/archives/maryland-millionaires-per-capita-answer-might-make-angry

naturalnews.com/awareness-skin-cancer-best-precaution/

HELLO LATVIA GOODBYE GREECE

We've said before that the British are masters of understatement. Here's a sample from a recent letter to the Financial Times editor.

"Sir, Little in life is certain but when a cohort of academic economists coalesce around a consensus (Letter, February 19), the odds historically seem to favor the opposite."

 Discussing the Greek mess--and who doesn't have an opinion these days--the letter continues that "...'democratic demands of citizens' must be respected, but central to the debate on Greece is the implicit democratic bargain that, if voters choose a government, then they are accountable for its actions."

Over the  past five years Greece has spurned the opportunity to match Ireland, Spain and Portugal in reforming its economy. Its citizens cannot escape responsibility for that, and as a consequence voters in Germany and many other EU countries seem to be making their own democratic demand that good money should not be thrown after bad.

If Greece would have acted decisively and could now come to the table seeking relief, because despite its best endeavours the debt burden remained too great, then surely there would have been much more sympathy. 

However, put simply, does anyone really believe that Greece will reform if is given more money.

In 1866 there was an effort--the Latin Monetary Union (1866-1927)--to unify several European currencies similar to the current union. Belgium, Italy, France and Switzerland created the union and agreed to exchange their currencies for certain weights of gold and silver.

The history of that failure reveals Greek footprints, according to the BBC, "with its chronically weak economy meant Greek governments responded by decreasing the amount of gold in their coins."

Monetary unions are hardly new. Here's quote from a 2012 article.

Greece is falling out with its neighbors over their common currency - just as it did about a century ago. But forging closer bonds through shared currencies rarely works for long, says historian David Cannadine.

The continuing travails of the Greek economy and the threat they represent to European Monetary Union may both seem novel and unprecedented, but in several significant ways, we've been there before. 

Far from being a recent innovation, there have been monetary unions for almost as long as there has been money. But across two and a half millennia, and whatever varied forms they may have taken, few of them have endured, which helps explain why they've been so easily and so largely forgotten.
http://www.bbc.co.uk/news/magazine-

Hello Latvia goodbye Greece.

VOLUME AND VOLATILITY

Markets are an ongoing learning curve.

There are things like two Ps, one S and two Vs.

The Ps are about premium and price. The S about spread and there nearly always is one. So pay attention. Tons of money get made daily on the spread. Think wages and productivity here just for one.

Lately, there's been an absence of the two Vs, volatility and volume.

According to the Wall Street Journal, this slowdown might be soothing the nerves of some, but what does it mean for others in particular and the market in general?

Volatility and trading volumes have collapsed this month as U.S. stocks have marched to fresh records, a respite that few investors foresaw and few expect to continue.

For now, the return to placid markets is being welcomed by buy-and-hold investors who have been rewarded in recent years for sitting tight. The Dow Jones Industrial Average notched its first record close of 2015 on Friday, while the S&P 500 posted its third record finish and the Nasdaq Composite is less than 2% from its first record in almost 15 years. 

Yet the February trading environment threatens to deal a new setback for banks and hedge funds that make more money in bumpy markets. Many bankers and short-term traders welcomed a raucous January in which stocks slipped in heavy trading as price swings widened.

Last year, stock-trading volumes increased for the first time since the financial crisis, and the pickup carried over into January. But in February, daily average trading volume slumped 4.8% from the prior month. Two of the three slowest trading days of 2015 came last week.



Like it or not, the big banks have been over-regulated, as is the wont of politicians and bureaucrats and the reactionary world they inhabit, and their trading desks have taken the hit. Volatility and volume are usually event driven.

The list of gray to really dark clouds hovering over global markets seems calm for now, but this could be the big lull before the even bigger storm.

By some accounts, high frequency trading--much in the news last April owing to Michael Lewis' book about it, "accounted for 46% of stock-market trades in January, up roughly two percentage points from last year's average and up about three percentage points from 2013."

In the past low volatility and volume has pushed the market higher on several occasions, but that begs the question about just how stretched valuations are now in this market and, oh yea, some of those gray and dark clouds still hovering out there.

AROUND THE NET

http://www.telegraph.co.uk/finance/personalfinance/money-saving-tips/11410509/When-will-a-loaf-of-bread-cost-22

http://www.marketwatch.com/story/dollar-wary-ahead-of-testimony-from-feds-yellen-2015-02-23

http://fuelfix.com/blog/2015/02/22/no-new-talks-set-between-shell-steelworkers

http://247wallst.com/investing/2015/02/22/top-11-corporate-earnings-for-the-coming-week

http://www.dpa-international.com/news/international/greece-rushes-to-finalize-reform-proposals-ahead-of-monday-deadline-

http://www.spiegel.de/international/europe/what-a-grexit-would-mean-for-greece-and-for-europe-a

http://www.nasdaq.com/article/asian-shares-rise-japan-hits-fresh-15year-high

http://money.cnn.com/2015/02/20/news/economy/venezuela-economy-inflation

http://profitsofchaos.com

http://www.wsj.com/articles/rising-franc-upends-daily-life-in-swiss-borderlands-

http://theeconomiccollapseblog.com/archives/americans-slaves-dont-even-know

http://resourceinsights.blogspot.com/2015/02/what-is-saudi-arabia-not-telling-us.

http://www.bloomberg.com/news/articles/2015-02-22/u-s-gasoline-rises-to-2-3286-a-gallon-in-lundberg-survey

http://www.reuters.com/article/2015/02/22/us-ukraine-crisis

http://www.wsj.com/articles/oils-plunge-could-help-send-its-price-back-up

http://www.naturalnews.com/048722_medical_abuse_government_kidnapping_parental_rights.

GREECE AND OTHER NO BRAINERS

We've all heard the meme too big to fail.

So when does too miserable or pathetic not to be saved come into play. Well, for now it appears like the recent Greece deal is a case in point.

As one writer put it: "The country's (Greece) departure would undermine the idea that the single currency is irrevocable, possibly setting a precedent for other nations that might run into financial trouble.That is something that euro-zone policy makers are keen to avoid, seemingly at any cost."

The key term here--and by the way the one most dangerous--is at any cost. If it sounds like the old economic moral hazard, you're getting there. It's the moral equivalent of economic unconditional love. "It's all right, Little One, anything you do, we'll be there to bail you out."

To date, this is a victory for the scaremongers, the same ones who scared the Scots into keeping their attachment to the UK at the hip, "...with the eurozone economic recovery still fragile--growth this year is estimated at just 1.3%--a Greek exit could be particularly disabling."

Yes, it could. But just as easily it could surprise to the upside, like riding oneself of a non-compliant, recalcitrant, long-time non-productive employee. Then there's the huge size of the Greece's economic contribution to the overall EU.

Next the writer states, "While the full impact (as if it is ever known in anything beforehand) of a....Greek exit for the eurozone is unclear, it would likely clobber the currency." Is that clobber a
short-term or long-term one?

There's been two bailouts--2010 and 2012--and like another scribe put it: "...the continent, then as now, was itself suffering from slow economic growth." 

That's spells a lot of euros heading south. "Many Europeans are frustrated at seeing their euros flow south to a country whose economy never seems to improve."

And there you have the crux of too-pitiful-to-be rescued.

Meanwhile, the euro is down nearly 6% versus the greenback so far this year adding to the U.S's  buyer-of-last-resort stature. For all those who deny a currency war is alive, afoot and well we say enjoy your economic delusions.

Azerbaijan might not conjure pictures of a big economy but central bankers there just depreciated their currency nearly 34% against the U.S. dollar.
  
According to the bank, the move was aimed at creating additional incentives to diversify the economy, boost the nation's international competitiveness and export potential, ensure strategic stability of the balance of payments and international solvency of the country, one news source reported.

Sounds like a competitive devaluation to us.

On another front, we've said before from the beginning that those billions in consumer savings from lower gas prices won't get spent and it appears they aren't.

Meanwhile, in some areas gas prices are once again up 50 cents off their recent lows. While there's been a run-up in some retail and restaurant equities owing to consumer spending, a meaningful uptick in consumer spending--the Great American past time--is meaningfully AWOL.

January retail sales numbers were unchanged from December. So if consumers keep their wallets closed, another so-called economic no brainer bites the dirt.

OUR VIEW

EDITORIAL ELECTION GARBAGE UK STYLE

There are a lot of stupid editorials in media around the globe everyday. One of the latest and dumbest appeared in the Financial Times, "Britain's parties should be funded by the state."

With an upcoming general election slated for May, concerns grow about private political donations or, in more crude terms, buying political sway. 

Citing a recent report from the so-called independent Election Commission, the editorialist laid out how two groups, business on the right and unions on the left, the two parties are "boosting their coffers."

Why the concern, so asks the writer, because "the main parties are becoming more reliant on a small number of donors to meet their funding needs." The implication here is that this represents something new. It doesn't, not in the UK or the U.S.

Undue political influence, so the claim goes, of individual donors is the risk. The study highlights how narrow the pool of big donors is becoming. To wit, more than half of the funds over the last decade went to Tories and three-quarters to Labour where these so-called grants, more crudely known as bribes, of £50 000 ended up.

Then this brilliant piece of editorial babble states: "Speculation that such donors might be looking to buy access to power have been at the heart of a series of scandals in recent years, such as cash for honours or cash for peerages."

That pathetic, naive sentence is followed up with this one: "If public suspicion grows, trust in politics is inevitably corroded in the end." Really?

Like all good card-carrying Keynesians, the writer then suggests the usual solution, more government intervention by taxing the public to pay for these circuses. Membership in both parties has declined over the years, the writer laments, implying that this is one of the main reasons.

Well, we have another suggestion, one we think much more germane, incompetence.

As with all politics--as most of us already know from long experience--big things always start out small. The sum put on each taxpayer, the writer projects, would be modest. Now there's an abstraction for you. Sure it would. For the nonce.

Then the editorial concludes with this gem.

If the political class at Westminster is to have any chance of winning back public trust, it needs to end the suspicion that the culture of political donation is corruptible. The only way to do this is a system of taxpayer funding that leaves the politicians at arms length from businesses and the unions.

There's at least three things amiss with this beauty.

To begin with, the Brits are masters of understatements. Next the public should be forced to pay up for honest politicians. Sounds a bit like sticking the horse behind the applecart. And finally, though it might remove them to arms length from businesses and unions, it puts then a hell of a lot closer to taxpayer purse strings.

Somehow that hardly sounds like a decent trade off.

That's our view. We hope you know yours.

TEARS, BOREDOM AND CENTRAL BANKS

Kudos to the Financial Times' James Mackintosh's "Short View" today on his point about economists never being renown for their writing style.

After plowing through 40 laborious pages of "dusty prose" from two central banks--the Fed 21 pages and the ECB 19--one can offer a serious suggestion about how to interrogate those captives at Guantanamo. Forget water boarding. Simply make them read these two works of economic pablum.

They'll tell you everything you want including forfeiting their first born.

To borrow a line from an old English professor who was, as he put it, sentenced after the age of 50 to an academic form of Dante's Inferno, reading freshmen papers, that "bore one to tears." In this case, tears is too generous, too kind.

Investors found market-moving information in the Fed's caution about raising rates while ignoring its long discussion about 'lift-off tools' it will use when it raises rates.

The ECB revealed that it was worried that the market would take it badly if the widely anticipated quantitative easing did not arrive, and that it upped it's proposed €50bn to €60bn, but for less time.

Central bank watchers revel in every dull sentence, and investors, plus the media, typically look in the minutes for an insight into policy mares' thinking. This is dangerous.

...the minutes are usually out of date. The last Fed meeting was before January's blowout jobs data, while the ECB's took place as market-based inflation expectations were rebounding (they have since dropped).

....they are little more than an extension of policy statements, not verbatim record of discussions. This is a form of propaganda, not a true insight. Serious disagreements may be visible in the minutes--but mostly would be obvious from public statements by individual policy makers long before the minutes were published.

Mackintosh further cites the unexpected or unknowns as when policy change their minds as happened in the Swiss National Bank debacle that few if any saw coming when banker suddenly undid the euro peg. It's valid point and further proves any claim to real transparency is just that, lip service.

Any credibility central bankers global wide enjoy depends on having a huge flock of lemmings. As Mackintosh writes: "....central bankers have little idea what they are likely to do than anyone else, as it depends on what happens in the economy--which they, like anyone else, are hopeless at forecasting.  

Some clues to how they might react to new developments may be gleaned from the minutes, but most investors try to draw conclusions about how rates will move instead. Those who still believe the myth of central bank omniscience should look at their record."

Truth be told Mackintosh is only half correct in his assertion. Economists are renown for their distinct lack of writing style. Calling anything prose, dusty or otherwise, from that bleak quarter, is an act of magnanimity more befitting a saint.

AROUND THE NET

http://www.buzzfeed.com/andrewkaczynski/ron-paul-good-news-that-secession-is-happening

http://www.marketwatch.com/story/us-stocks-futures-waver-ahead-of-greece-meeting-pmi-2015-02-20?

 http://www.businessinsider.com/byron-wien-says-market-will-shock-2015-2

http://www.dnsrsearch.com/A//www.scott-mather-discusses-pimcos-total-return

http://www.marctomarket.com/2015/02/great-graphic-unexpected-results-of

http://www.bloomberg.com/news/articles/2015-02-20/yellen-confronts-economists-ignorance-as-she-weighs-higher-rate

http://www.businessinsider.com/its-time-to-break-up-with-american-express-2015-2

http://www.marketwatch.com/story/by-this-measure-winter-has-been-rather-warm-2015-02-19

http://wolfstreet.com/2015/02/19/french-investment-bank-what-the-ecb-has-to-do-to-prevent-a-market-meltdown

http://financialspuds.blogspot.com/2015/02/my-bias-or-yours.

http://www.businessinsider.com/bank-of-america-investor-flows-to-europe-2015-2?

http://www.reuters.com/article/2015/02/20/us-eurozone-greece

AROUND THE WEB

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MY BIAS OR YOURS

One chart doesn't a trend make or, for that matter, a trend reversal.

Here are two charts, however, that make for some interesting reading notwithstanding your bias. And recall everybody has one.

With energy some say the price of crude has further to fall while others argue an uptick to higher prices is near. So who will make the money here, the shorts or the longs?

The  American Petroleum Institute today rattled markets with their crude oil supply numbers.

SAN FRANCISCO (MarketWatch) — The oil market got a bit of a shock late Wednesday, when the American Petroleum Institute’s supply data were released.

U.S. crude-oil supplies as of the week ended Feb. 13 saw a whopping 14.3 million-barrel jump from a week earlier, the trade group reported, according to news reports and various sources.

Analysts polled by Platts forecast an increase of just 3.1 million barrels for the week. Prices for March crude CLH5, -2.90%  on the New York Mercantile Exchange dropped to $50.48 a barrel in electronic trading after the API data, down from a regular-session settlement of $52.14.

The market will have to wait for confirmation from the U.S. Energy Information Administration, which will release its weekly petroleum supply figures at 11 a.m. Eastern time on Thursday. Supply data are delayed by a day this week due to the Presidents’ Day holiday.


 
Everyone knows how far oil has dropped since mid-June. For more on  its possible rebound read
marketwatch.com/story/if-history-is-a-guide-oil-could-rebound-in-may-2015-02-18



As we said earlier it's a matter of which bias one has.

KEEP IN MIND IT'S AN OLD ONE

There's an addiction going on and it has little to do with street drugs although one might say in another way it has everything to do with a street drug.

It this case, it's a six-year addiction. And the drug of choice is low or near zero interest rates. While one of MSM's latest memes, besides the possibility of a Grexit, centers on when the Fed will start jacking up interest rates, it raises the issue of how far and for how long.

The second part of that question is, once started how many rate hikes will there be and over what time span? If history is any guide, taking the last 50 years or so, 26 months is the average once the hikes are underway. 

The last time the Fed started raising rates was 11 years ago. They stopped two years later. Most of us know what followed, a financial crisis.

One of the problems with addictions is they're difficult to break. With investors of all sorts scrambling for yield the past several years, there's a ton of leverage in these markets. A cynic might even describe it as "scary leverage."

To be sure there are enough white hat boys and girls around to suggest otherwise. One thing looks fairly certain, central bankers are either going to be terribly wrong or terribly correct. 

Those who believe the Fed will break the historical mode and tread more softly versus those who believe the Fed will return to business as usual so as not to toss any unexpected flies into the monetary ointment.

Business as usual just might turn out to be the exact opposite of what the market needs.

Just last week John Williams, head honcho at the San Francisco Federal Reserve Bank, a member some think is Chairwoman Janet Yellen's interest rate clone, warned that the time for higher rates is "closer and closer."

Anyone who pretends to know just how the market in general and investors in particular will react is doing just that, pretending. Keep in mind the S&P 500 suffered only one big break last October when it briefly--and that's the key term here, briefly--dipped below its 200-day moving average.

Keep in mind the S&P 500 eked out a small gain today to close at a record for the second time this year. Keep in mind despite all the hand-wringing about Greece and the Ukraine, there appears to be a large amount of complacency around.

If this were a three-card street shell game, one could say the marks are lining up. Just when they all get in place, well, we'll have to wait and see. 

ENERGY TAKEOVER?

One of the possibilities we've mentioned since oil prices started their swoon mid-last year is takeovers.

As panic among investors sets in over the concern of where the oil price bottom will be, investors often forget that low prices make assets more attractive, increasing the chance for mergers and acquisitions.

Well, now rumors of such grow.

Shares of BP plc (NYSE: BP) spiked higher Thursday, on a report from the Wall Street Journal that ExxonMobil Corporation (NYSE:XOM) may be considering taking advantage of low oil prices and preparing to bid for companies struggling with the downturn. In addition to BP, Chevron Corporation (NYSE: CVX) was mentioned as a possible target.

And there will be more such stories.  Low prices make certain assets attractive.
www.reuters.com/article/2015/02/16/us-japan-economy-gdp- 

AROUND THE NET

                            

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http://wolfstreet.com/2015/02/15/stock-market-leverage-intoxicates-politicians

Rio Wields Cash To Fend Off Swiss Suitor Barron's

theguardian.com/society/2015/feb/16/skunk-cannabis-triples-risk-psychotic-episodes-study

telegraph.co.uk/news/worldnews/islamic-state/11414868/Kayla-Muellers-boyfriend-she-told-the-truth-to-save-me.

http://www.nytimes.com/2015/02/16/world/europe/despite-truce-shelling-continues-in-parts-of-ukraine.

http://www.dpa-international.com/news/international/eurosceptics-win-seats-in-hamburg-election-merkels-party-takes-hit

profitsofchaos.com/2015/02/02/corporate-profits-noise-and-signal/

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moneymorning.com/ext/articles/rickards/cia-insider-breaks-silence-on-global-currency-wars-mobile-lead


247wallst.com/energy-economy/2015/02/15/could-oil-still-drop-to-20

 http://www.latimes.com/world/europe/la-fg-kosovo-refugees-20150215-story.

GOLDMAN GOVERNMENT

Goldman Sachs should really be Goldman Government.

The list of central bankers and others with Goldman connections serving or having served in high government financial positions around the globe is long and lush--Carney, Draghi, Paulson, Rubin, Geithner, to name but a few.

So here's an idea from a recent Wall Street Journal article, "After Crisis, Goldman Goes It  Alone," and "Regulation Is Good For Goldman" in same issue. Read both from a backdoor perspective as a conservative way to play a rebound in commodities.

If this seems like a paradox here you're getting warm.

And for that matter a bit of government backscratching for Goldman. To play pretend for a second, suppose deflation, a current meme that's just about as overdone in MSM as overdone gets, unexpectedly fizzles out and all that global fiat money printing leads to more inflation than central bankers want?

Oil isn't the only commodity down. Copper, iron ore and many others. Trading commodities is a big part of Goldman business. Now that many of the big banks have left the scene, what does Goldman know that others don't?

After all, we've had declining energy prices, a euro that recently hit a 10-year low and interest rates that if they get much lower they'll have to stand tippy-toe on the bottom just to try to touch the top.

Morgan Stanley is trimming the business, Goldman's stock is up 16% in last year, Morgan Stanley's up 23%. As the article noted commodity trading for Goldman brings in more revenue per employee than any of it's other activities.

At another point Goldman CEO Lloyd Blankfein stated with all of its competitors essentially either cutting back or abandoning their commodity trading desks, Goldman is now alone. Make of that what you want.

Here is a piece about Blankfein from celebritynetworth.com

Lloyd Blankfein net worth and salary: Lloyd Blankfein is an American finance executive who has a net worth of $500 million. Lloyd Blankfein is most known for being the chairman and CEO of Goldman Sachs. Prior to his career at Goldman, Lloyd Blankfein worked as a corporate tax lawyer for Donovan, Leisure, Newton and Irvine. Blankfein is one of the highest paid executives on Wall Street and regularly earns over $50 million per year in salary and bonuses alone. He also owns a significant number of Goldman equity.

Blankfein and Goldman Sachs employees have been major contributors for Democratic candidates, such as, Hillary Clinton and Barack Obama. With almost a million dollar contribution from Goldman Sachs employees and Blankfein, their company helped to raise more money than any other entity during the 2008 campaign for Obama. Lloyd Blankfein made a statement, during an interview, that he was doing God's work. He later explained that it was merely a joke and it just came out the wrong way.

http://www.celebritynetworth.com/richest-businessmen/ceos/lloyd-blankfein-net-worth