Enjoy Your Weekend Reading

If you've ever had any questions about how down and dirty national politics are in general and the Democrat party in particular, here's some copy you won't want to skip.

There is one blurb in here about a billionaire level-three sex offender who the Democrat National Committee okayed to still accept donations from and cleared to attend events. Former President Bill Clinton is noted to have flown on the billionaire sex offender's private jet "up to 26 times." What's that told saying about birds of.....

This close to the Democrat Convention no doubt the minimalists and parse jockeys will be out in force. Perhaps the worse part is the obvious attempt to derail the Sanders' campaign, noted in these emails, in what many will see as obvious collusion between parts of the MSM and the DNC. Sanders' voters wer4 not just cut off at the pass, they were stopped dead in their tracks by obvious DNC favoritism.

Here are some sample quotes. Wasserman Schultz and Miranda brainstormed ideas to attack Sanders’ position on the Israel/Palestine conflict with her communications team in one thread, with Wasserman Schultz saying that "the Israel stuff is disturbing” in reference to Sanders’ platform committee appointees attempts to include language denouncing the occupation of Palestinian territory in the Democratic platform.

An email titled 'Bernie narrative' sent by DNC National Press Secretary Mark Paustenbach to Miranda indicates that top officials in the party were trying to find an angle to disparage the Vermont senator in the media.

“Wondering if there's a good Bernie narrative for a story, which is that Bernie never ever had his act together, that his campaign was a mess,” Paustenbach wrote in the May 21 message. “Specifically, [Debbie Wasserman Schultz] had to call Bernie directly in order to get the campaign to do things because they'd either ignored or forgotten to something critical.”

“It's not a DNC conspiracy, it's because they never had their act together,” Paustenbach suggested.

Wasserman Schultz seemed to have already counted Sanders out of the race in a May 21 email, when there were still nine primaries to go. “This is a silly story,” the chairwoman said. “He isn't going to be president.”  

Further evidence of the DNC's extensive "content control" over mass media was revealed when Wasserman Schultz sent an email to NBC anchor Chuck Todd with the subject line "Chuck, this must stop," and set up a time for the two to talk about MSNBC’s “Morning Joe” co-host Mika Brzezinski calling on Wasserman Schultz to step down.



In an email that concerned Sanders out-polling Clinton in Rhode Island, where the state reportedly only had a fraction of voting stations open, one staffer took a contemptuous tone of Sanders’ supporters,  speaking about them more as a nuisance than an arm of the party. “If she outperforms this polling, the Bernie camp will go nuts and allege misconduct,” the staffer writes, “They’ll probably complain regardless, actually.” 

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Another email shows similar 'us and them' language being directed at Sanders supporters. “We have the Sanders folks admitting that they lost fair and square, not because we 'rigged' anything,” the email said. “Clinton likely to win the state convention with a slim margin and we'll send a release with final delegate numbers.”

There is much more here.zerohedge.com/news/2016-07-23/leaked-dnc-emails-confirm-democrats-rigged-primary-reveal-extensive-media-collusion

Enjoy you're weekend reading.

Get A Handle

As we've said before this is an analysis-paralysis. sit-on-its-thumb-do-nothing- Federal Reserve that's been way behind the curve way too long. It's really a disgraceful outfit that increasingly provides proof for it's being put into economic mothballs once and for all. To say it's an enemy of the people is, if it got any more straight forward, it would be an example of a declarative sentence on the your  kid's soon-to-be-free college entrance exam.

Central banking has been one of the main weapons ruling globalists use to control and keep the  rabble in their place. It's good for all.They have more power over your life and economic future than you'd ever imagine. And that's exactly what they and their cohorts want. Central banks have done more to create the current gap between the rich and the poor than any other single institutional entity on the planet. And that covers some serious bureaucratic ground.

These are bumbling, stumbling non-elected bureaucrats who are bereft of either courage or direction. These are bobbling-headed pawns appointed by the big banking elites who buy their friendships in the nation's capitol. This is the Hilary Clinton's of the world. Not to suggest for one cool summer evening second that the other side is any different or better. It isn't. The idea of a lessor of two evils is bogus to the bone. There is only one evil. And the people around the globe, thanks in part to the Internet, are getting it.

The idea of globalizing the globe is hardly a new one. It's the same old scheme wrapped in different packaging. International trade deals that benefit the few and harm the many. Many of these deals are formed, signed and delivered in private. You don't have to ask why. It's an age old ploy, better to ask for forgiveness than permission. The entrenched and the scaremongers will tell you scrapping these will put an end to cheap product prices, a bane for the already dispossessed. To show you just how confused these so-called experts are, yesterday you had the President of France, currently the second largest economy in the EU, greeting the new UK Prime Minister with this admonishment: "Don't delay the exit."

Not too far away the same day, ECB President Mario"Whatever Doesn't Work" Draghi disappointed many by holding the lid on further monetary expansion, saying it was too early to gauge Brexit's full impact. In Japan, a nation that's been depressed for so long, rumors  are afloat that big pharma is secretly working on an anti-depressant, possibly a trillion dollar darling, they're considering labeling, the Japanese Jolt, further confusion reins. China's phony one unified leadership front seems to have caught the American disease, my incompetent leader is less incompetent than yours. That can cause a brouhaha. In a decade China went from being an economy tenth in size.to the globe's second largest. Even in a decade that's big meal to digest.

Somebody got terribly rich along the route. Now we have Wall Street bankers like Jamie Dimon tossing a pay raise bone to a group of workers who have been overworked and pathetically underpaid since the late JC plied  his craft near Bethlehem. Here's a guy who a while back put $20 million supposedly of his own money to prop up confidence in his company's stock. Banks in case you have not noticed, despite the Fed's near decade long largess, weren't doing so well at the time. Word at the time was his bonus for the previous year hit $30 million. So how much of it was really his own lucre?

Now back to the Fed. MSM wants people to believe their main meme: Be happy. Be grateful. The long-elusive inflation just peeked around the corner from it's hiding place as did recent job numbers, China really isn't a mess, the only bubbles around the globe are those in your bath water and your fantasies, debt levels are high but so what, everyone gets high once in a while, stock markets are setting new records, GMOs are good for the soul and some pocketbooks, just not yours, but we've got a handle on this. Be happy. Don't worry.

Well, here's something as an investor you might want to get a handle on--taking the other side of that trade.

Overnight

No helicopter money for now says Bank of Japan Governor Haruhiko Kuroda. Helicopter money is a term used to describe money-financed fiscal programs of which the government undertakes. The Nikkei 225 was down just under 1.0% at 0.93% ad the yen strengthened against the U.S. dollar ealry Friday at 105.78 as opposed to 107.15 Thursday. Two week ago it traded near 100.

Other Asian shares were also off with the Hang Seng Index lower 0.4%, the Australian ASX 200 slightly lower at 0.19%, The Shanghai and Shenzhen were down 0.21% and 0.11% with the Korean Kospi flat. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS traded down 0.4 percent, but still close to its nine-month high seen on Thursday, and is headed for a fractional 0.1 percent gain on the week, according to Reuters.

Part of the Asian story centered on the European Central Bank story when ECB President noted the bank was leaving interest rates unchanged. He also pointed out it was too early to assess the Brexit full impact. There was some who felt investors had built up expectations from both the Bank of Japan and the ECB for more monetary stimulus and it may still happen but stock markets, even some emerging market ones, have surprised officials of late by blowing off much of the Brexit fears.


Reuters reported: The pull back in stocks and dollar gave gold a boost. Spot gold XAU= jumped 1.2 percent overnight, but inched down 0.2 percent to $1,328.22 an ounce. Thursday's gains helped shrink losses for the week to 0.8 percent.

Overnight

The Nikkei hit a seven week high overnight owing to a weaker yen and gains in the U.S. stock market plus word about a huge stimulus package coming from the Bank of Japan in a few weeks, according to reports floating around.

Up 1.45 the Nikkei traded at 16,908.25 after being at least 30 points higher earlier, a high not since since June 1. The stimulus package is reputed to be 20 trillion yen as the Japanese economy struggles to shed it long bout of deflation. One poll of analyst suggested the big surge in monetary policy will come around the end of this month. Couple that with the fiscal spending Prime Minister Shinzo Abe expected to announced later this month and it should be a party stock investors like.

Meanwhile, Hong Kong stocks rallied heading toward what many are calling a bull market owing to expected central bank measures that they hope with stimulate economies. The Hang Seng moved up 0.6%  to 22003.65, heading higher for six of the last seven sessions. The Australian S&P ASX 200 was also up 0.6% while the Kospi stayed flat

The outlook for gold, however, wasn't so bright as The All Ordinaries Gold Index, which serves as a broad market indicator for the gold industry, was down 4.7 percent, while the materials sub-index fell 0.45 percent. In the currency markets the euro traded lower at $1.1016 as investors will no doubt dial in on the ECB monetary policy meeting later today, the first ECB meeting since Brexit. The Australian dollar dropped to $0.7466, down from Monday's $0.76  level.
 

Symbol	Name	Price		Change	%Change
NIKKEI	NIKKEI	16750.88		68.99	0.41%
HSI	HSI	22029.30		146.82	0.67%
ASX 200	S&P/ASX 200	5506.50		17.78	0.32%
SHANGHAI	Shanghai	3050.47		22.57	0.75%
KOSPI	KOSPI Index	2009.42		-6.04	-0.30%

Please Tell Us, Joe!

The recent brouhaha over Melania Trump's convention speech raises lots of issues, not the least of which is intent. We have read much of the criticisms from the natty-headed academics to the agenda-driven partial crowd pretending impartiality to the Washington wonks and the editorial page hackneyed blokes.

It's troubling, to be sure. One would've thought given the controversy of this upcoming election the Trump people would have proofed the material better, but maybe it was left in there on purpose. If one believes the incessant MSM and disgruntled, displaced old fogy neocons like Romney, McCain and Rove who have been celebrating Trump's, to use a kind term, non-classic style of lying to people by looking them directly in the face, it's possible. Anything is possible isn't it?. Did you witness those twin towers in NYC almost 16 years ago?

But when something of this cosmic import crops up we need to go to a real expert. A plagiarism specialist. Joe Biden, are you still out there. Settle this for us, will you, Joe? Get the folks off these grammatical tenterhooks. This nation can't take too much more angst. We've now endured a president who denied getting his hat cleaned in the White House, another who had nocturnal visions of WMDs, one who couldn't pronounced the term government correctly and still another who promised to unite us. It's sincerely problematical if this nation could withstand a plagiarist, wife or no wife, in the White House.

So tell us, Joe. Is this really plagiarism?

When Is Debt Too Much?

Here's a follow up to our recent "The Unexpected" post, financialspuds.blogspot,
about why central banks have been and are on the wrong track and just a few of the dangers of what's ahead, one of which is the central bank agendas mentioned. zerohedge.com/news/2016-07-20/worlds-central-banks-are-making-big-mistake.

One thing we don’t have to wonder about is the impact of rising debt. The world is just as addicted to debt today as it used to be addicted to OPEC oil. You might think the pace at which we take on debt would slow as regulators crack down post-crisis. Not so.
Total debt in all categories (except households, whose debt has shrunk only a very little in the advanced economies since 2010) is still growing at a steady clip relative to GDP.

The right-hand chart above shows global debt growing. Pretty much everyone is in hock to someone. Pay down private debt, and government debt goes up. Reduce government debt, and household debt rises. This is what addictive behavior looks like. Forget heroin and OxyContin; debt is the world’s favorite drug by far.
Periodically, addicts concerned about outcomes try to get clean. The results are never pretty at first. Our politicians, unwilling or unable to go through the painful detox process, always go back for another fix. Dealers are always happy to provide. The dealers, in this context, are banks—and central banks more than private ones.
This addiction to debt is one reason we keep having market tantrums. Last year, people got concerned about China. Before that it was Greece. Now China is off the radar (even as its currency drops more than it did during our tantrum last summer); and we’re obsessed with the UK, Germany, and Italy.
BIS says the results of this oscillating calm and turbulence are troubled equity markets, wider creditspreads, a stronger dollar, and lower long-term interest rates.

 

Something has to give

Debt is future consumption brought forward. Once debt is incurred, consumption that might have happened in the future won’t happen. And it should come as no surprise that at a certain debt level, growth and income begin to diminish. That is exactly what we are seeing in the real world. There are basically two categories of debt: debt used to purchase or create productive activities (like tools for a carpenter or a new factory for a business) and debt used to consume.
We forget that debt used for consumption doesn’t create new supply. It simply pulls supply forward in time. The problem is that debt can’t do this forever. Pulling your consumption forward to the present means you will consume less later.

What's the author is discussing here is the difference between productive versus non-productive debt. If you buy another pair of blue pumps on credit just because you like them not because you need them and toss them in the closet with your other 97 pairs, that's non-productive debt. That's the history of American consumption and what MSM and its elitist supporters are currently criticizing consumers for not continuing like they have in the past.  It's called amok Keynesianism.

Americans has been the global consumers of last resort. If you think not just visit one of your aging friend's or parent's garage. Hopefully, that is ending. Now that consumers are reluctant to take the usual scraps that MSM and the higher ups always toss their direction in downturns, the fear spreads. Everyday we get closer to point, set, match for a system that is really bankrupt. That's what Brexit is about, Trump traction is about and a whole host of others problems on the global scene including those bankrupt Italian banks and the arrogance of EU bureaucrats. And don't forget political correctness.

China is an economic mess and Japan has been one for years. There is more air in some global property and stock markets than there was in the old Goodyear blimp. You should recall governments always ask their subjects to tighten their belts to help those governments out. But when if ever is the last time they tightened theirs to help you out?

What needed is a good cleansing, like a giant global colonic, high, hot and a lot. A good place to start is those Italian banks. Then the EU. From there just follow your instincts.They won't lead you astray.

The Unexpected

 The news is out. Again.

The Federal Reserve is optimistic. Again. One wonders in their next incarnation if this heady group of central bankers can come back as chameleons, just is their nature. The latest is the end of the year is back on the table for what most likely would be a 25 basis point hike for these brave souls.

Since all the pundits and scaremongers including a certain nation's president turned out so far to be wrong about the Brexit fallout and the U.S. stock market has been artificially pushed to artificial new high records, higher interest rates is back in the air. This group over its tenure has sent more messages than an old time Western Union office.

But as usual in the vernacular of this group there's always a big if in here. If the economy is on more stable footing than when they met in June this could set up a September rate hike. There is, as is usual for these clutch-at-any-straw bureaucrats, much nonsense in here. The June job numbers and a hint of inflation have rendered these nervous Nellies nervous. One governor was recently quoted as saying, "We are basically at full employment. I think the underlying fundamentals remain very sold for the U.S. economy."

That's brings up a couple of questions. First, if after all this massive global money printing this is the best we can get in jobs. The second is the choice of the phrase "remain very solid" when just a short time earlier they looked fairly putrid. One guesses to the Fed aberrations, like Jacks and Queens, never come in pairs.

We think the Fed is so far behind in the count given the global ZIRP and NIRP nonsense, at least three or four bubbles afloat depending on how much one want to contest the point, one should be positioning oneself for the unexpected. The world is drowning is debt. Nearly a decade of monetary madness has only piled up more debt. Much of that will never be repaid. Overt beggar-thy-neighbor tactics proved fruitless, consumers, at least for now, got he message: they're on their own, and central bankers now have about as much credibility as Joe Biden when it comes to plagiarism.

If you like ducks in a row, now might be your time.

Overnight

The Nikkei overnight was trading lower, appently putting an end to a six-day run of market gains. The KOSPI was also down 0.2% and the Shanghai Composite Index slipped 0.3% lower as Asian shares traded mixed. The Hong Kong Hand Aend rallied 0.7%.

A sharp rise in the U.S. dollar sent a cautious message to investors ahead of Japanese earnings reports. According to the WSJ, "The focus in Japan is now switching from expectations of more policy easing to caution ahead of the coming earnings season, with companies likely hurt by a strong local currency."

According to the WSJ, Elsewhere in the region, Australia’s S&P/ASX 200 recovered from early weakness and was trading up 0.6%, thanks to higher commodity prices. With the exception of aluminum, copper, nickel and zinc prices recovered. The rise in the dollar had led to weakness in commodity prices earlier in the day.

Earlier in the session the People's Bank of China upset the market applecart by setting the yuan stringer against the U.S. dollar despite the dollar's overnight strength. Some claim the POB's action was a sign to show the government was not not trying to boost its competitiveness by weakening the yuan. Meanwhile, the International Monetary Fund cut its global economic growth outlook for 2016 on Tuesday, citing the uncertain fallout of the Brexit vote. It expects the world economy to grow 3.1% this year, down 0.1 percentage point from the outlook in April. However, it seemed to have little impact on markets, the Journal noted.

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Overnight

Monday in Japan was a public holiday, but the Nikkei 225 struggled a bit to trade 0.5% higher Tuesday as most Asian shares fell on weaker oil prices that toned down some of the hoopla attached to the Dow and the S&P 500 run-ups and many on Wall Street touted the market was on a path to further highs.

Just last week the MSCI's broadest index outside Japan made a new nine-month high, but couldn't sustain the upward trend as it fell 0.6%. In China both the Shanghai and Shenzhen Indexes were off as the Chinese yuan firmed against the U.S. dollar after falling below a psychologically support level of 6.7 for the first time in six years. More than a few hedge fund managers have been predicting a weaker yuan for some time now. apart of the pressure on oil prices stemmed from fear about rising stockpiles. U.S. crude was down 0.4% at $45.07 and Brent was off 0.3% trading at $46.82 a barrel.

The dollar softened against the yen after recently registering a three-week high, trading at 105.90 yen after touching 106.33 earlier in the day. Up later in the week is the ECB meeting on Thursday, it's last one before an eight-week summer break. Brexit is still on the minds of many in the EU and only  time will tell what course they will decide to take to support the EU economy given the vote caught many off guard. The Euro held firm at $1.1076. Gold traded down a bit at $1,327.87 an ounce following its down move Monday when it lost 1%.

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Take Your Choice

Goldman  Sachs has been having a bad time of it all. Recall before Brexit they warned how many jobs would leave London if the vote went the way we now know it did.

Their stock jumped last week owing to some so-called good news in the economy and the financials. Now they've sent out one of their technical water boys to give us all the good news about just how far this recent equity rally can run. Most likely someone here got a call from Fed Chair Yellen over the weekend urging the big Wall Street firm to toss out some positive stuff. the connection between the Fed and Sachs is tighter than the skin on the face of a well known female politician after one of her many facelifts.

After a post-Brexit misstep, the stock market has regained its footing and roared past all-time highs in the past week. 

The strength has been broad-based, and it appears to Sheba Jafari, a technical analyst at Goldman Sachs, that this upward trend in markets could continue for a long time.
"If this is truly a 3rd wave from June, it should really move past 2,191 and eventually reach a 1.618 target at ~2,263," Jafari wrote in a note to clients Sunday.

Jafari, who calls the recent rally "textbook," is using a method of technical analysis that posits that market behavior is orderly and moves in "waves," thus it can be tracked as long as you can read the signals the market is telling you. 

Based on these signals, Jafari believes that not only is there a short-term uptick of at least 100 points in the S&P based on Friday's closing price, but in the long run there is even more good news for stock investors. "Narrowing in even further, the move since February is likely to be wave (5) in a sequence that starting in 2010," Jafari wrote. "As such, the minimum target for wave (5)/III is 2,172 (now effectively satisfied). An extended target goes out to 2,394-2,452." 

 
businessinsider.com/goldman-textbook-rally-in-stocks-2016-7?

For the record here's a link to a Morgan Stanley piece about too bullish everyone is. As they say, you pay your money and take your choice.
businessinsider.com/morgan-stanleys-global-growth-forecasts-2016-7?