Educated Points Of View

They say people who can make a living doing what they love are blessed. If you get paid to pen this drivel,"The Perils of Populism," that's a good gig, man. If I were you I'd hold onto it.

I was wondering as I read when you'd roll out one of your profession's favorite terms, visceral. In your vernacular that means: bereft of reason; ill-rational, lack of common sense. When are you people ever going to stop hiding behind semantic covers, get enough testosterone to stand up straight, high water blue jeans or no, and tell the rabble what you really think of them: a hoard of knaves and dolts who spent most of their lives reading public bathroom graffiti instead Ricardo or Samuelson. If your contempt and arrogance were any thicker, sir, one would need a chainsaw to cut it.

But you don't disappoint with this next gem. "Against such emotion it's very difficult," you say, "to introduce studied reflection to the discussion."  One can only marvel at how long it probably took you to come up with that beauty. Concrete?  Abstract? It's a real cutie. And quite obviously it's in the province of only the chosen few.

There are other schools than the ones you note. Two that we know of both begin with the letter S: Streets and Survival, ones we have a nudging feeling you wouldn't excel at. Those are the streets where most of the rabble you and your elitist brethren are so contemptuous of spend most of their existence trying to survive.

It's generous that you grant them your permission. "It's certainly proper and desirable for citizens to question the existing order. And there are certainly policies to aid economic growth and allocate it proceeds equitably," you write. You've nicely set up your straw man here, sir. You're are so subtle. "But we will try to look at things dispassionately." One assumes that "dispassionately," like "studied reflection," is another genetic gift limited to those chosen few. It isn't nerdiness that's a disadvantage to your profession, sir. It's the pseudo-science itself and its pitiful track record. Life teaches many things. One of them is all talk in all breakups ends at some point.

Peddlers come in all sizes, shapes and occupations. Economics is no exception. A better, more accurate title for your piece would've been "Peddling the Perils of Populism." This is just an observation and intended as nothing more. But in case you've yet to notice, the gauntlet in the sand is down. And it's a global gauntlet. Thank whatever powers might be you and your kind are on the other side because it is fruitless to try to introduce studied reflection to the discussion.

advisorperspectives.com/commentaries/20160723-northern-trust-the-perils-of-populism

We publish the link to this article by Carl Tannenbaum of Northern Trust so you can read it for yourself and decided who is out of touch with whom. Northern Trust of Chicago is a firm noted for catering to its wealthy clients, no crime in that, just a fact. But to borrow one of economists' favorite ploys and hedge a bit, there might be some snootiness there.

Speaking of hedges, note Mr.Tannenbaum's last sentence in the article's second paragraph: "But the population's complete detachment from educated points of view could be an unfortunate overcorrection."

Few things in life are given, but here is one: Any time one differs with the educated entrenched, one is completely detached.

Threat No Part

If you look at the recent WikiLeaks, like them or otherwise, you can see they are attempts to demonize. In this case Hilary opponent Vermont Senator Bernie Sanders. Now to put it mildly we're hardly Sanders supporters. But that's not the point.

With the threat to the global ruling elites growing, the demonizing continues to grow. There remains many suspicious questions around the recent tragedies in Nice, Orlando and Dallas, to name just a few. The truck that supposedly mauled to death 84 innocent people in the pictures we saw showed no blood on it. The bullet holes were prominent. Now one can say why show the world such a horrible site. But one can just easily say, why not? There were plenty of disturbing pictures of bodies in the street just as there were in the recent Munich tragedy. Just today another story in southern Germany broke about a supposed Muslim hacking to death a woman with a machete.

We've said before the globe is up to its earlobes in debt, much of it never going to be repaid. That debt is as much a threat to the ruling class and their control as any Islamic threat. One favorite way to wipe out debt is to create wars. We know that following the tragic WWI America was an isolationist nation. Former Princeton professor Woodrow Wilson's attempt's to create the League of Nations failed miserably. It mostly forgotten that Wilson did something no American president had ever done before--personally went to Versailles to argue his case. Sort of reminds of another U.S. president a short while ago setting another precedent by going to the UK to personally persuade another nation's voters.

The American people were in a deep isolationist frame of mind. One of the most noted isolationists of the era was Charles Lindbergh, Lucky Lindy, whose child was kidnapped by a German. FDR and Churchill tried their damnedest to bring America in to the European conflict. Roosevelt sent supply ships to England that were repeatedly torpedoed by German U-boats, but the American people failed to bite. The 1890s had there "Remember the Maine." Laying ground work takes some time.

There is more than sufficient evidence to suggest that Pearl Harbor was planned. That might be hard for Americans to swallow, but we don't know any decent person who saw that huge hole in the ground in New York City when those twin towers collapsed who found that easy to swallow either. One could argue that incident more than anything led to one of this century's greatest fantasies so far, the creation of WMDs.

You might like or hate the demonizing of Trump. We don't have a pony in that race. We're just like a modern-day de Tocqueville, traveling through this dimension. And what's clear to us, as it turned out in the French Revolution in the end, today's demonizers can easily become tomorrow's demons. What's also clear to us is many of the global leaders today are too insular, too obtuse or just plain too arrogant to realize that if this whole thing comes crashing down, like another once admired world leader, they could be only one lamp post away from a similar fate.

One thing we know about people when they disagree with you is they tend to put words or meanings into what you say or write. We know what we wrote here and what our intention is. Threat is no part of it. Just fact.

The Upcoming Week

The upcoming week is interesting. On Monday the Democrat Convention, WikiLeaks and all, in Philadelphia begins, Gilead Sciences and Kimberly Clark announce their earnings; and Secretary of State John Kerry attends a summit to put the world all at ease about the South China Sea turmoil.

Tuesday brings the Case-Shiller home prices report for May and the June new home sales; consumer confidence for July and the biggie, the Federal Open Market Committee begins its two-day meeting when the focus will center on will they or won't they and when, a game Fed watchers by now are quite familiar with. For what's it's worth, the consensus is they won't until possibly September. What would this all be without that word, possibly.

Durable goods day for June is Wednesday; another biggie here, the FOMC ends its gathering and announces its decision on interest rates, giving a whole lot of underemployed Fed watchers something to contemplate and gaze over for a few days besides their navels. And who would want to miss this, the President will address the Democrat convention. There's no word yet whether he'll discuss those WikiLeaks.

Thursday is Hilary day as she accepts the mantel as the Democrat nominee for the upcoming fall slugging match. Stand-up comics should take note, this fall promises much good material for your future gigs. We understand John Steward will be tied to his television with some kind of bungee cord. CBC, Dow, Ford and some others report earnings.

And finally, Friday, (Whew! That's a long week.) it's second quarter GDP time. We know most could hardly wait. This, too, is more navel contemplating material for those underemployed Wall Street savants who are mostly frustrated wannabe English majors who love parsley with their daily reading fare. The Bank of Japan speaks on, guess what, interest rates as many economists--you recall those people, the ones who so accurately tell us what all the nuts and bolts mean--expect a new round of monetary stimulus. Not to be upstaged, a San Francisco Fed governor speaks out on--get this topic--"What's Left in the Fed's Tool Kit." The Fed owns a tool kit? And the same day the Dallas Fed President breaks some bread with New Mexico bankers. Well, they don't call it the Land of Enchantment for nothing.

That's A Given

The Los Angeles Times recently allowed one of its columnist to write that a Trump victory and follow-up presidential misstep would seemingly justify a military coup. This is indeed inflammatory language at a deeply inflammatory time. The Times needs to print an explanation for its reckless editorial actions. We hope this writer didn't sincerely mean that. But the Times needs to publish its position on such.

Recently, Americans had to endure a Supreme Court justice spewing forth her personal, hateful political views publicly. Most of us grew up knowing they, being human, had their their personal views but being leaders and public icons had the will power and decency to keep them private. It lent the system, phony or otherwise, an air of impartiality. Once out of the bottle, however, that genie is pretty tough to get back. Over the years we've had radio and television personalities who make no public claim to probity lose their jobs for a lot lessor offenses. In the name of any shred of human decency, RBG needs to take a clue from one of her fellows socialists, Mr. Hollande, and pull her own personal Brexit.  Resign now.

Our contrarian take is a Hilary victory will fuel the flames of anger, resentment and rage more as she and her Wall Street elite friends try to take us closer to one world government, one world currency and global socialism. People around the globe are rebelling against absentee landlord rule.

The system is rigged and more and more are awakening to it. The proximity between the Eccles Building in Washington and Wall Street is more than just geographic as one writer quoted in this weekend's Barron's: "Wall Streeters  have told Trump to 'cool it' in his criticism of Federal Reserve Chair Janet Yellen." Any pretense that the Fed is an independent entity is just that--pretense.

The biggest risk today is for the entrenched elite to overestimate the public's tolerance and patience. People are pissed off, deeply pissed off:  Overtaxed, underrepresented and marginalized, much it owing to the last several years of political correctness. Glass ceilings, to be sure, are limiting. But at least they were once there, a goal one could aim for however limited. What exists now is a profound and quite possibly irreparable chasm between the rich and the poor. And in case the rich are unaware of it, the poor outnumber them quite seriously.

In the the past several months there have been several articles about the rich building their hideaway caves, plotting their escapes. This in itself is an admission of quilt. Underemployment is a serious problem and the robots are not all here yet. Brexit, Trump traction, global push back against centralized authority are just symptoms of the nasty underlying disease that infests society on a world scale today. The big dogs showed up earlier and scared the Scots from exiting the UK.

But the big dogs are losing their influence quicker than Hilary changes her positions. The so-called democratic process has a bad case of pernicious anemia globally. The name calling, epithet-labeling from MSM  and both of these bankrupt political parties is a good way to maybe win a battle but lose the big skirmish. The gauntlet is down. People get it. And contrary to MSM propaganda, it cuts across all racial, religious, educational and party lines.

Feelings run deep. The last time this nation witnessed such a major division on such a major scale was a bit over 150 years ago. Few squabbles ever match the bitterness and acrimoniousness of family ones. That's a given.

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.” 

* *  *
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.