The Euro is on the Verge of a Total Breakdown

The dichotomy of Europe spending $80b per mo on QE and US policy to tighten rates is having a profound effect on the euro, which is plunging again today to 104.

To put the decline in context, it’s important to note the currency is down about 50% from its peak and is now entering levels unseen since the early 2000s.

This trend, naturally, will cause many European asset managers to conduct carry trades, like greedy goblins — borrowing in euros to buy US stocks, which at some point in the future will become a tinder box of volatility when the dollar stops rising.

For now, this trade is dominant and no one seems to care how much the dollar goes up, most likely because foreign interests are making an absolute killing buying American stocks and enjoying the dual benefits of a soaring dollar.

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Just in case you forgot to pay attention to actual facts, inflation is a fiction, something made up by Central Bankers to validate their rate hikes, which in turn have helped blow out yield spreads for the direct benefit of your local billionaire bankers.

Back in the real world, there’s no basis for a super tight Fed policy. Based off today’s CPI readings, inflation grew by just 0.2% for the month, 1.7% for all of 2016.

Over in Exodus, we have a raw commodity index. I view it as a real time gauge on inflation. We definitely saw a bounce this year, higher by 8.5% — but still well off 2014 levels.

Again, the assumption for higher growth is predicated off the thesis that Trump will deliver on tax cuts, huge fiscal stimulus program, and domestic productivity gains. By factoring in earnings and discounting valuations at much lower tax rates, there’s certainly a bull case to be made, even at 18x earnings. However, the Fed’s mandate of keeping the inflation genie in the box is going to begin looking ridiculous if we don’t start to see some actual inflation. Otherwise, they’ll be hard pressed to hike in 2017.

The 10yr bond yields have risen from a low of 1.55% to 2.6% since late September, nearly a 100bps move while inflation was running cold at just 1.7%.

Boolish.

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If, in fact, it bears truth that the diabolical, all powerful, Vlad Putin was responsible for redpilling the American people via Podesta’s email box, then I’ll report on it. But, thus far, zero American intelligence agencies have made that claim. The only proof that Russia was the source that leaked to Wikileaks is some shrill writers at the Washington Post.

The Kremlin responded to the absurd claim leveled by a Washpo blogger, writing for NBC last night, who said Putin was personally involved in the hacking, calling it ‘amusing rubbish.’

Source: Bloomberg

“This is amusing rubbish that has no basis in fact,” Putin’s spokesman Dmitry Peskov said Thursday on a conference call with reporters, while accompanying the Russian president on a trip to Japan. Foreign Minister Sergei Lavrov also told reporters in Japan that he was “stunned” by the NBC News report, which cited two unidentified U.S. officials with direct access to the information.

“I think it’s clear that it’s stupid and absolutely pointless to try to convince anyone of this,” Lavrov said of the allegation, which NBC said came from diplomatic sources and spies working for U.S. allies.

What’s amazing to me are the amount of people who accept being lied to in such an incredulous, sophomoric, manner and never call bullshit on it. The state run media outlets are brazenly making stuff up and then calling out those who tell that truth as ‘fake news.’

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None of this stuff means anything to anyone, because Dow 20,000, Santa Claus, and lots and lots of cocaine. I’ve never seen anything like this in all of my years doing this shit. The complacency and disconnect from reality is both an epic achievement of dissonance and also the most retarded shit ever.

Gold and silver walked into this session already hobbled, in a wheeled chair, injured. This morning said wheeled chair has been tossed into a fucking fire. Silver is off by 6%.

America’s borrowing costs continue to skyrocket. The Yellen Fed is out to fuck Trump and the economy. That is not hyperbole.

The euro is quickly moving towards parity with the dollar and look at the God damned yen. Japan is raping us.

All of that above was really bad. Does the market care? Not a fucking chance in red hell. A 12 handle on the VIX. Fuck me.

If that wasn’t enough, the yuan is down 0.44% v the dollar this morning.

Go buy some stocks. Get ’em boys.

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European QE is a perversion of modern finance, as evidenced by the widening, or blowing out to use Wall Street vernacular, of yields.

Case in point, back in October German bunds were yielding -0.15%, while the US 10yr yielded 1.55% for a spread of 170bps.

Today, however, after the seemingly endless reservoir of optimism over Trumpism and fiscal stimulus, bunds are yielding 0.37% and US 10yr 2.60%, for a spread of 223bps.

Makes sense? Why the fuck should it? It’s not like finance is a logical sandbox anymore. Instead, it’s just a bunch of emotions filled in with random occurrences that people backfit in order to create a narrative.

By definition, the widening of US-German spreads indicates the US is becoming a riskier place to invest. As such, Germany is afforded cheaper credit and can finance at much lower rates — all thanks and praise to the abomination of grotesque proportions called QE.

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How do I introduce someone who claims he was a hitman for Bill Clinton? I can feel the concern trolling from the comments section now. But Larry Nichols says Hillary will flip the electors to her side, thereby snatching Trump’s chain and thrusting America into the dark ages.

At a minimum, this is a very entertaining clip.

For the love of Comet Ping Pong Pizza, can the demoncrats admit defeat already?

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The fuckery is indeed very real.

The fervor and energetic effort into preventing Trump from taking the Presidency, has taken on new levels of lunacy by the left — who are absurdly panicked and beguiled by paranoia to the point of making themselves into carnivale clown jackasses — all but assuring the reelection of Trump in 2020 and the Silver Fox in 2024.

Springboarding off the hysterical media and their Russian fairytales of election tampering and raging Putin vendettas, a new organization has appeared — seemingly out of nowhere. They call themselves United For America and they are cucks.

Here is their mission statement.

 

According to their Whois data, the website was launched shortly after Thanksgiving, suggestive that plans to deny Trump the Presidency has been in motion for at least three weeks.

Here is their sparsely followed Twitter account — again indicative of their irrelevancy and newness to the 2016 elections.

And here is their video, a plea for help from the electors — practically begging them to ignore the will of the people and to vote against Trump on 12/19, saying they’d make history doing so and would be considered heroes for ‘voting their conscience’, somehow suggesting that the electors don’t really want to vote for Trump — but only do so because he won the god damned elections.

This video shall forever immortalize the emotional collapse of the left — bedraggled snowflakes, crestfallen, deep in a stupor of their own making.

Acceptance is the final stage of grief, something the illiberal left will soon be forced to endure — whether they want to or not.

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The current hysteria over Russian interference doesn’t infer that they hacked the voting itself, but instead made available true information about the Hillary Clinton campaign, by way of Wikileaks, which then swayed public opinion to vote in favor of Trump. In other words, Podesta, Clinton and their media shills are still corrupt bastards, beholden to Saudi Arabia and China — but had the American people never learned about it via the Wikileaks, well then, they might’ve voted for her instead of Trump.

In a nut shell, that’s the democrat argument for fomenting war against Russia and to overturn the will of the people. Again, no one is questioning the validity of the votes, but the souls of men and how they felt after reading the Wikileaks.

Fox News is reporting the House Committee has abruptly canceled a briefing scheduled for tomorrow — due to the CIA not making anyone available to attend. As of now, the CIA is refusing to comment on the matter, until their full assessment of the situation is made available to President Obama before 1/20/17.

Source: Fox

The House Intelligence Committee abruptly canceled a briefing set for Thursday on alleged Russian interference in the U.S. election, after the CIA declined to provide a briefer for the session, Fox News is told.

Amid concerns about reports that conflict with details previously provided to the committee, Chairman Devin Nunes, R-Calif., had requested a closed, classified briefing Thursday for committee Republican and Democratic members from the FBI, CIA, Office of the Director of National Intelligence and National Security Agency.

But Fox News is told the CIA declined citing its focus on the full review requested by President Obama, and the other agencies did not respond to the committee’s request, which is unusual given the panel is the most-senior committee with jurisdiction.

“It is unacceptable that the Intelligence Community directors would not fulfill the House Intelligence Committee’s request to be briefed tomorrow on the cyber-attacks that occurred during the presidential campaign,” Nunes said in a statement. “The Committee is deeply concerned that intransigence in sharing intelligence with Congress can enable the manipulation of intelligence for political purposes.”

“Last week, the President ordered a full Intelligence Community review of foreign efforts to influence recent Presidential elections – from 2008 to present,” the statement added. “Once the review is complete in the coming weeks, the Intelligence Community stands ready to brief Congress—and will make those findings available to the public consistent with protecting intelligence sources and methods. We will not offer any comment until the review is complete.”

Separately, Fox News has learned additional details about the “full review” President Obama ordered from his intelligence agencies regarding Russian interference.

The review is being led by the Office of the Director of National Intelligence, and is a multi-agency effort. Investigators plan to take existing intelligence and reconstruct what happened.

Fox News is told one focus is on whether there is new intelligence that substantiates analysis the interference was designed to ensure a Trump victory, or whether a review of the existing intelligence with “fresh eyes” leads to new conclusions.

Some lawmakers, on both sides of the aisle, have backed calls for a separate congressional investigation, voicing concern that Obama’s intelligence agencies might not be able to conduct a thorough review before he leaves office.

Given statements from the White House, Fox News is told there is considerable pressure on the intelligence community to declassify as much of the findings as possible before Jan. 20, when Trump is set to take the oath of office.

As of yesterday, 55 electors are asking for information regarding the Russian scare and if Trump knew anything about it. What the fuck?

The Electors require to know from the intelligence community whether there are ongoing investigations into ties between Donald Trump, his campaign or associates, and Russian government interference in the election, the scope of those investigations, how far those investigations may have reached, and who was involved in those investigations. We further require a briefing on all investigative findings, as these matters directly impact the core factors in our deliberations of whether Mr. Trump is fit to serve as President of the United States.

Judging by libtards comments like the one featured below, there are many on the left who believe the election result isn’t conclusive. Thoughts?

The electoral college is scheduled to vote on December 19th.

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Let’s crystallize what the media is attempting to do here. Through the revelations of the DNC leaks and the Podesta emails, the American people learned how corrupt the democrats were and how they’ve coopted the media on every level to the point where the major networks are nothing more than state media shills.

Instead of addressing and trying to correct their ill behavior, they’re doubling down on it by blaming the whistleblower and then fomenting hatred against Russia — by accusing them of interfering in our elections because of Putin’s personal ‘vendetta’ against Clinton. It’s equal to a pedophile being caught with unseemly material on his computer and then getting mad at the police for finding it.

Bottom line, democrats, you’re still pedophiles. I meant that anecdotally of course (no Pizzagate).

Here we are, once again, bearing witness to the democrats trying to overturn a democratically elected President and attempting to start World War 3 with a country who has nearly 8,000 ICBMs in their arsenal, using unnamed sources, and zero evidence to do so.

By simply stating ‘the Russians did it, obviously’, isn’t enough evidence to overturn American elections and certainly not grounds for a war that would cost the lives of millions.

Are these people insane?

This from NBC.

U.S. intelligence officials now believe with “a high level of confidence” that Russian President Vladimir Putin became personally involved in the covert Russian campaign to interfere in the U.S. presidential election, senior U.S. intelligence officials told NBC News.

Two senior officials with direct access to the information say new intelligence shows that Putin personally directed how hacked material from Democrats was leaked and otherwise used. The intelligence came from diplomatic sources and spies working for U.S. allies, the officials said.

Putin’s objectives were multifaceted, a high-level intelligence source told NBC News. What began as a “vendetta” against Hillary Clinton morphed into an effort to show corruption in American politics and to “split off key American allies by creating the image that [other countries] couldn’t depend on the U.S. to be a credible global leader anymore,” the official said.

Ultimately, the CIA has assessed, the Russian government wanted to elect Donald Trump. The FBI and other agencies don’t fully endorse that view, but few officials would dispute that the Russian operation was intended to harm Clinton’s candidacy by leaking embarrassing emails about Democrats.

The latest intelligence said to show Putin’s involvement goes much further than the information the U.S. was relying on in October, when all 17 intelligence agencies signed onto a statement attributing the Democratic National Committee hack to Russia.

The statement said officials believed that “only Russia’s senior-most officials could have authorized these activities.” That was an intelligence judgment based on an understanding of the Russian system of government, which Putin controls with absolute authority.

Now the U.S has solid information tying Putin to the operation, the intelligence officials say. Their use of the term “high confidence” implies that the intelligence is nearly incontrovertible.

“It is most certainly consistent with the Putin that I have watched and used to work with when I was an ambassador and in the government,” said Michael McFaul, who was ambassador to Russia from 2012 to 2014.

“He has had a vendetta against Hillary Clinton, that has been known for a long time because of what she said about his elections back in the parliamentary elections of 2011. He wants to discredit American democracy and make us weaker in terms of leading the liberal democratic order. And most certainly he likes President-elect Trump’s views on Russia,” McFaul added. Clinton cast doubt on the integrity of Russia’s elections.

As part of contingency planning for potential retaliation against Russia, according to officials, U.S. intelligence agencies have stepped up their probing into his personal financial empire.

I will summarize the financial media talking points for you, so that you don’t have to consume it on your own.

Higher rates are good because it means the economy is getting stronger.
Lower rates are good because low borrowing costs enables companies to finance share buybacks and economic expansion.

A strong dollar is good because it means our economy is doing well.
A weaker dollar is good because it helps our exporters.

Higher crude is great for stocks, because it helps earnings for energy, industrials and transport companies.
Cheaper crude is good because it gives the consumer more money to shop at the mall.

Trump will be disastrous for Wall Street because of his protectionist policies.
Trump is great for stocks because of fiscal stimulus prospects, lower taxes and less regulations.

Got it?

In light of the hawkish Fed comments, suggesting we’re in for 3 rate hikes in 2017, 2yr bond yields skyrocketed — higher by 10bps to 1.27%, the highest level since 2009. With hawkish Fed policy comes a whirlwind of dollar buying. The greenback soared v the yen by 1.6% to the 117 mark and +0.92% v the euro to 105.

On election night the yen was trading 101 v the dollar. This is an unimaginable boon for Japanese exporters.

Bottom line: the groundworks has been prepared to derail the Trump administration. On the political end, they’ll entangle him with Russian conspiracy theories. And on the economic side, they’ve given him a soaring market based on a fiction. Retails sales are not getting better. As a matter of fact, they’re getting worse. Any push for fiscal stimulus will be met with opposition from both parties, supported by comments from the likes of Yellen — who said we don’t need it. Lastly, the soaring dollar and higher borrowing costs are a negative for the economy, none of which, thus far, haven’t been discussed by our idiotic financial media.

The dollar index is at 102, its highest level since 2002.

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