from Dark Journalist:
It’s official: as of midnight Saturday, the US government has shut down following a failure in the Senate to strike a funding deal. Government funding was due to run out after Dec. 8 but was twice extended, most recently through Jan. 19, at which point the US encountered what’s officially called a “spending gap,” which triggers an official halt to Washington’s work.
In retrospect, this is hardly a novel development, as history shows there have been 18 previous closures starting in 1976, with the last one taking place in September 2013. Almost all of the funding gaps occurred between FY1977 and FY1995. During this 19-fiscal-year period, 15 funding gaps occurred.
Additionally, seven of the funding gaps commenced with the beginning of the fiscal year on October 1. The remaining 11 funding gaps occurred at least more than one day after the fiscal year had begun. Ten of the funding gaps ended in October, four ended in November, three ended in December, and one ended in January.
According to the CRO, funding gaps have ranged in duration from one to 21 full days, with six of the eight lengthiest funding gaps, lasting between eight days and 17 days, occurred between FY1977 and FY1980—before the Civiletti opinions were issued in 1980 and early 1981. After the issuance of these opinions, the duration of funding gaps in general shortened considerably, typically ranging from one day to three days. Of these, most occurred over a weekend.
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So now that the US government is taking some time off for only the second time this century, here is a summary of what actually is shut down until the funding gap is closed, courtesy of Bloomberg.
1. What happens if the government shuts down?
Many, though not all, federal government functions are frozen, and many, though not all, federal employees are furloughed. Agencies in the executive branch, the one with the largest workforce and budget, regularly review shutdown plans that spell out what work must continue, and how many employees will be retained, during a “short” lapse (one to five days) and one that lasts longer.
Read More @ ZeroHedge.com
by Dave Kranzler, Investment Research Dynamics:
People who look for easy money invariable pay for the privilege of proving conclusively that it cannot be found on this earth. – Jesse Livermore
Boeing’s stock has gone parabolic. It’s doubled since April 2017:
The stock now trades at a 31x PE ratio, for whatever that’s worse. I’m sure if I went through the numbers closely, I could find numerous accounting manipulations which added a copious amount of non-cash income to BA’s numbers. BA’s revenues on a trailing 12 month basis are flat. From 2015 to 2016, its revenues declined 1.7%. On a trailing twelve month basis vs. 2016, its revenues have dropped 3.2%.
Historically paying a nose-bleed PE ratio for a company with deteriorating revenues and an enormous amount of debt does not produce a good result. Chasing the price-momentum higher and waiting for a bigger idiot to buy shares from you works well until the music stops. Then everyone gets hurt.
The Dow moved up an average of 120 pts per day in the nine trading days since the end of 2017. This includes one day in which the Dow dared to close 12 pts lower. That one day felt like a bear market. Over this entire period the Dow has appreciated 4.4%. Since the election, including the 1,000 pt plunge in the Dow futures that occurred when it was apparent Trump would win, the Dow has soared nearly 50%.
What’s driving this? Since late August, the public has literally thrown money blindly into passively managed ETFs which automatically distribute the cash inflow by market cap weighting into the stocks in the index that underlies the ETF. This means that most of the gains are concentrated in the stocks in the Dow/SPX with the largest market caps, which then drives the Dow/SPX higher. For instance, last Friday, the Dow was up 0.89% but AMZN was up 2.2%, Netflix was up 1.8%, GOOG was up 1.5% etc.
There’s no telling how much longer this can persist without some type of accident. Judging by the data on cash in customer brokerage accounts at the big online brokers , I would have to believe that this last push from the retail investor is nearing its completion. Data from the fund industry has shown a massive migration of investor cash moving out of actively managed mutual funds and into passive index funds. This would include money managed on behalf of individuals by registered investment advisors.
Most investor sentiment indicators are showing extreme levels of bullishness – historically unprecedented levels. The short interest on the NYSE has melted down nearly to zero. The Acting Man blog has written an excellent post which details the sentiment indicators flashing bright red warning lights – I recommend a perusal: Mother Of All Blow-Offs
For now, the raging bulls chasing momentum conveniently ignore the deterioration in “new orders” and “employment” numbers in deference to the statistically manipulated headline reports that purport to show economic growth. Most of the bullish reports are overweighted with “sentiment” and “hope” metrics that offset declining real economy statistics. Credit card and auto loan delinquencies – both subprime and “prime” – continue to increase a double-digit rates (see WFM or COF’s latest quarterlies, for instance). As for the “prime” credit rating designation of 2017, it’s not your mother’s “prime” credit rating.
At this point I don’t want to speculate on how much longer that Dow/SPX/Naz can go straight up. Historically this is the type of market behavior which has marked the blow-off top of speculative manias and has preceded serious market accidents.
Read More @ InvestmentResearchDynamics.com
from The Sleuth Journal:
Not enough Americans know that in 1999 a jury in a civil suit brought by the family of the Rev. Dr. Martin Luther King, Jr., ruled that a retired Memphis cafe owner was part of a conspiracy in his 1968 assassination.
During the trial, which received almost no media attention, the legal team representing the King family also implicated the U.S. intelligence apparatus. Among the startling and provocative assertions made in the courtroom, included the claim that the U.S. 111th Military Intelligence Group were at Dr. King’s location during the assassination, and that the 20th Special Forces Group had an 8-man sniper team there as well. What is more, the King’s legal team presented a number of questions regarding the unusual behavior of the Memphis Police special body guards, who were advised they “weren’t needed” that day. Across the board, regular and constant police protection for King was removed, so that at the time of the shooting he had almost no official shield of defense.
The lawyers also set out to demonstrate that military intelligence set up photographers on a roof of a fire station with a clear view to Dr.
King’s balcony; that Dr. King’s room was changed from a secure 1st-floor room to an exposed balcony room; and that the Memphis police ordered the cutting down of bushes that could have hid a sniper. Along with sanitizing the crime scene, the police also neglected to carry our ordinary investigative procedures such as interviewing witnesses who lived by the scene of the shooting.
After four weeks of testimony from over 70 witnesses and just three hours of deliberation, the jury of six whites and six blacks in the wrongful-death case found that Loyd Jowers, as well as “others, including governmental agencies” had been part of a conspiracy. The jury awarded the King family the damages they had sought: $100, which was then donated to charity.
Rather than explain and inform the public about the jury’s decision, mainstream news outlets such as the New York Times merely summarized the purpose behind the lawsuit in the first place. According to their feature story, the King family had long questioned Mr. Ray’s conviction and hoped the suit would change the legal and historical record of the assassination. “This is a vindication for us,” said Dexter King, MLK’s youngest son.
It has now been almost 50 years since the execution of America’s greatest citizen and the truth about his murder has continued to be covered up by almost every institution in our society. To be fair, hardly any of these institutions (e.g., universities, high schools, churches, museums, historical societies) know that they are part of a cover up, they just believe and teach what they have been allowed to know.
But what they “know” about the MLK assassination is mostly false. There can be no peace without justice. Until the nation is able to come to terms with the facts of MLK’s murder, our nation cannot properly honor his legacy.
Service projects are wonderful. Candlelight vigils are beautiful.
Concerts and fundraisers are inspiring. I am sure that Dr. King would be pleased with all of these positive actions to help build the “Beloved Community.” But until our country is able to come to terms with the real circumstances of his death, we will not be able to fight for what he stood for-at least not with the fortitude needed.
Read More @ TheSleuthJournal.com
by Wolf Richter, Wolf Street:
The US government bond market has further soured this week, with Treasuries selling off across the spectrum. When bond prices fall, yields rise. For example, the two-year Treasury yield rose to 2.06% on Friday, the highest since September 2008.
In the chart, note the determined spike of 79 basis points since September 8, 2017. That was the month when the Fed announced the highly telegraphed details of its QE Unwind.
September as month of the QE-Unwind announcement keeps cropping up. All kinds of things began to happen, at first quietly, without drawing much attention. But then the trajectory just kept going.
The three-year yield, which had gone nowhere for the first eight months of 2017, rose to 2.20% on Friday, the highest since October 1, 2008. It has spiked 82 basis points since September 8:
The ten-year yield – the benchmark for financial markets that most influences US mortgage rates – jumped to 2.66% late Friday.
This is particularly interesting because the 10-year yield had declined from March 2017 into August despite the Fed’s three rate hikes last year, and rising short-term yields.
At 2.66%, the 10-year yield has reached its highest level since April 2014, when the “Taper Tantrum” was winding down. That Taper Tantrum was the bond market’s way of saying “we’re shocked and appalled,” when Chairman Bernanke dropped hints the Fed might eventually begin tapering what the market had called “QE Infinity.”
Read More @ WolfStreet.com
by Pam Martens and Russ Martens, Wall St On Parade:
Since the inauguration of Donald Trump on January 20, 2017, the stock market has performed as if it is operating in an alternative universe, regularly setting new record highs despite unprecedented chaos coming from the White House. Now, a new Gallup poll is calling into question how long the divergence between the market’s view of Trump and the world view of Trump can continue.
A new Gallup poll released yesterday puts global approval of US leadership at just 30%, behind China at 31% and Russia at 27%. Germany has moved into the top slot in the world with a leadership approval rating of 41%.
One of the most striking findings from the poll is how far America’s leadership approval has fallen among our closest neighbors. According to Gallup, Canada led declines with U.S. leadership approval sinking 40 points from 60% in 2016 to 20% in 2017. America’s neighbor to the south, Mexico, registered a record low approval rating of U.S. leadership, falling 28 points from 44% in 2016 to 16% in 2017, eight points lower than the previous decade low of 24% in 2008.
Approval rankings in Europe were only slightly less abysmal. Europe now registers a 25% approval and 56% disapproval. The poll notes that these ratings were actually worse during the last year of the George W. Bush administration. (The last year of the Bush administration was 2008, a time when Wall Street was causing cataclysmic financial disasters around the globe.)
Showing a broad consensus across Europe, U.S. leadership approval ratings declined significantly in 21 out of the 28 members of the European Union. The poll notes that “NATO member states led the fall in approval ratings across Europe and the world, with Portugal posting a 51-point decline in approval ratings, followed by a loss of 44 points in Belgium and a 42-point drop in Norway.”
Four of the five countries with the world’s lowest approval ratings of U.S. leadership are in Europe; Portugal (12%), Sweden (11%) join Russia and Iceland (both at 8% approval).
Additional regional highlights from the poll include the following:
The poll was conducted between March and November 2017 and released yesterday. Its results were based on face-to-face and telephone interviews with approximately 1,000 adults, aged 15 and older, in each country or area.
Europe’s handwringing over the Trump presidency began the very day after his win. On November 9, 2017, Michael Knigge, writing on the digital front page of Germany’s Deutsche Welle, critiqued Trump’s victory as follows:
“Trump’s success is a victory for an inflammatory, partly dehumanizing, vulgar populism. It is a sharp slap in the face to the establishment and the political elite in the United States and its representative, Hillary Clinton. As an opponent, Clinton was almost equally as unpopular as Trump. Through her own carelessness, her use of a private email server provided her critics with the ammunition they needed for their constant attacks. But Clinton’s unpopularity alone does not explain Trump’s dramatic election victory.
“Trump’s victory brings to light a long-term and deep dissatisfaction — if not actual hate — present in large sections of the populace. It is a hatred of the status quo, of globalization and the political system in Washington. In numerous polls, many Americans have repeatedly stated that they believe their standard of living and future prospects are worse than they were in their parents’ generation. Trump was the right vehicle and outlet to harness such views, which were especially held by the white working class. And Hillary Clinton was the right opponent.”
On May 19, 2017, two weeks before President Donald Trump announced the U.S. withdrawal from the Paris Climate Accord, Der Spiegel, one of the most influential news magazines in Europe, published a breathtaking assessment of the sitting President of the United States. Written by its Executive Editor, Klaus Brinkbäumer, the editorial read in part:
“Donald Trump has transformed the United States into a laughing stock and he is a danger to the world. He must be removed from the White House before things get even worse…
“Donald Trump is not fit to be president of the United States. He does not possess the requisite intellect and does not understand the significance of the office he holds nor the tasks associated with it. He doesn’t read. He doesn’t bother to peruse important files and intelligence reports and knows little about the issues that he has identified as his priorities. His decisions are capricious and they are delivered in the form of tyrannical decrees…
“Crises, including those in Syria and Libya, are escalating, but no longer being discussed. And who should they be discussed with? Phone calls and emails to the U.S. State Department go unanswered. Nothing is regulated, nothing is stable and the trans-Atlantic relationship hardly exists anymore…”
The hard assessments made early on in Europe about the Trump presidency are now being conveyed by U.S. television anchors on a nightly basis. Trump’s approval ratings among U.S. voters are also at a record low.
The question of how a billionaire real estate mogul who had filed business bankruptcies six times; had zero military or government experience; had a string of women accusing him of sexual assaults; refused to release his tax returns; was caught on audio tape stating that he could grab women by the “p***y” because he was a celebrity – rose to the highest office in the United States is a matter that must be investigated with all the tenacity of a skilled surgeon’s scalpel seeking to eradicate a malignant tumor from a failing patient.
Read More @ WallStOnParade.com