Market Breadth Plunges; VIX Spikes

The Dow isn’t even down 100, but there is panic in the streets. Market breadth stands at a paltry 24% and the VIX is spiking today. With markets down 5 out of the past 6 days, investors are starting to take journeys to the Joshua Tree, or the Burning Man, in order to find the definition of life.

Investing isn’t supposed to be filled with pauses and downfalls. It’s supposed to be gay giraffes driving iced cream trucks, while listening to Cold Play.

You little shits have had it too good for too long. It’s time for a little risk reversion.

The stupid VIX index is lifting, but nowhere near panic levels.

Here are today’s leading ETFs, all of which are bearish.

So who did it?

The media was sucking Obama’s dick yesterday for killing an ISIS leader. Today, Russia issues a statement, calling bullshit on US reports, suggesting it was their raids that killed him.

This appeared to contradict the US statement which said that Adnani was targeted by coalition forces conducting a ‘precision strike near Al Bab, Syria’, 16 miles from where the Russians said they had killed him.

The Pentagon said yesterday: ‘We are still assessing the results of the strike, but Al-Adnani’s removal from the battlefield would mark another significant blow to ISIL. Al-Adnani has served as principal architect of ISIL’s external operations and as ISIL’s chief spokesman. He has coordinated the movement of ISIL fighters, directly encouraged lone-wolf attacks on civilians and members of the military and actively recruited new ISIL members.’

Maybe Obama should press the reset button with Putin again.

There was nothing good about this report, because the world is awash in crude. During the decline in crude, thus far, only marginal players, pikers who are rarely invited to galas in Houston, have been wiped out. All of the majors are drilling more than fucking ever, including all of OPEC.

Crude oil inventories had a build of +2.276 mln (consensus called for a build of +0.921 mln barrels)

Keep buying crude, you stupid shits. By fall, you’re gonna get the skin from your face ripped off and your skull stomped out into clown dust.

The Saudi Prince owns a little more than 5% of Twitter. The platform is the single best and fastest conduit for news and information. It should come as no surprise to anyone that Twitter is a very valuable commodity, but not for the reasons you might think.

It isn’t a very good business and growth has been slowing for sometime now. So why the fuck would anyone want to buy this huge piece of money losing shit?

To control the narrative.

Buying Twitter ensures that you are able to control the political jargon,  understand the direction the winds are blowing and believe me there are gale force winds emanating from the east now.

Last night in a BBG interview, co founder of Twitter, Evan Williams said the company would do whatever it thought it should to maximize shareholder value, nothing too crazy. Ordinary shit.

Early this morning, people are buying calls and spreading scandalous rumors that TWTR is gonna catch a buyout bid.

If so, it’d be a mercy kill–because current management has no idea how to create value.

In his investment outlook letter to investors for the month of August, Bill Gross took direct aim at Yellen and the cabal of central bankers who’ve made it their duty to become the put for equity markets, instead of being true to their mantra, which has greatly favored income inequality due to low and negative rates.

On the topic of negative rates, Gross said $11 trillion in assets have become liabilities. He cited former Fed’s Warsh WSJ Oped piece, which took the Fed to task, and was generally grim in his assessment of what the Fed has been doing.

He likened himself and others who’ve been warning of disaster to a broken clock, but said that the high levels of debt and fucked up central bank policies are legitimate reasons for concern. Eventually, the gig will be up and central banks will lose control, essentially.

Speaking of practice, and mastering a game, Fed Chairwoman Janet Yellen has been at it a long time, as have her predecessors and contemporaries in other central banks. All have mastered the art of market manipulation and no — that’s not an unkind accusation — it’s one in fact that Ms. Yellen and other central bankers would plead guilty to over a cocktail at Jackson Hole or any other get together of Ph.D. economists who have lost their way. With Yellen, there is no right or left hand — no “on the one hand but then on the other” — there are only decades of old orthodoxy that follows the tarnished golden rule of lowering interest rates to elevate asset prices, which in turn could (should) trickle down to the real economy.

It was fascinating then to read a lone Fed wolf in wolf’s clothing a week ago on The Wall Street Journal’s op-ed page. Ex-Fed District President Kevin Warsh headlined a think piece titled, “The Federal Reserve Needs New Thinking”. Now despite recent peekaboo ideas advanced by San Francisco Fed President John Williams suggesting a 3% inflation target and a focus on nominal, instead of real GDP growth (using the same old monetary weapons however), Warsh took the Fed and (by proxy) other central banks to task, suggesting that a “numeric change in the inflation target isn’t real reform”. “It serves”, he wrote, “as subterfuge to distract from monetary, regulatory and fiscal errors”. Warsh questioned the Fed’s sincerity in speaking to income inequality while refusing to acknowledge that their polices have unfairly increased asset inequality.

He questioned its mantra of data-dependence and its refusal to acknowledge the Yellen/Bernanke/Greenspan “put” in financial markets. He questioned their ability to maintain that “put” while at the same time subordinating inflation targeting and output-gap modeling to it. All three cannot be done at once, he claims, and one day a Piper will be paid, “perhaps even the Fed’s independence” he cautions, as the public is growing increasingly suspicious of this unelected group of bankers — central as they are.

The primary problem lies with zero/negative interest rates; that not only do they fail to provide an “easing cushion” should recession come knocking at the door, but they destroy capitalism’s business models.

Warsh is a mensch. He’s not smokin’ a Volcker-like cigar I suppose, but he has spoken his mind and risked the calumny of his contemporaries — even those at The Stanford University’s Hoover Institute, where he is a visiting Fellow. What he thinks they should do differently was not well delineated though. I and others however, have for several years now, suggested that the primary problem lies with zero/negative interest rates; that not only do they fail to provide an “easing cushion” should recession come knocking at the door, but they destroy capitalism’s business models — those dependent on a yield curve spread or an interest rate that permits a legitimate return on saving, as opposed to an incentive for spending. They also keep zombie corporations alive and inhibit Schumpeter’s “creative destruction” which many argue is the hallmark of capitalism. Capitalism, almost commonsensically, cannot function well at the zero bound or with a minus sign as a yield. $11 trillion of negative yielding bonds are not assets — they are liabilities. Factor that, Ms. Yellen into your asset price objective. You and your contemporaries have flipped $11 trillion from the left side to the right side of the global balance sheet. In the process, you have deferred long-term pain for the benefit of short-term gain and the hopes that your ancient model renormalizes the economy over the next few years. It likely will not. Japan is the petri dish example for the past 15 years. Other developed market economies since Lehman/2009 are experiencing a similar fungus.

Investors should know that they are treading on thin ice. The problem with Cassandras, such as Gross and Jim Grant and Stanley Druckenmiller, among a host of others, is that we/they can be compared to a broken watch that is right twice a day but wrong for the other 1,438 minutes. But believe me: This watch is ticking because of high global debt and out-of-date monetary/fiscal policies that hurt rather than heal real economies. Sooner rather than later, Yellen’s smooth shot from the fairway will find the deep rough.

Freedom is not on the march.

An elightened man from Saudi Barbaria took to Twitter to deny the mystical and absurd idea of a God and ridiculed the Koran, because of its headstrong stupidity, and has been sentenced to 10 years in prison, on top of a monetary fine, and the prerequisited 2,000 lashes across the back, for crimes against Islam.

A court in Saudi Arabia has sentenced a man to 10 years in prison and 2,000 lashes for expressing his atheism in hundreds of social media posts.

The report carried in Al-Watan says the 28-year-old man admitted to being an atheist and refused to repent, saying that what he wrote reflected his own beliefs and that he had the right to express them. The report did not name the man.

It added that ‘religious police’ in charge of monitoring social networks found more than 600 tweets denying the existence of God, ridiculing the Quranic verses, accusing all prophets of lies and saying their teaching fuelled hostilities. The court also fined him 20,000 riyals – or, just short of £4,000.

Remember, these are our chosen allies. Your leading candidate for President of the United States has received over $25 m in donations for her foundation.

Be careful what you say on Twitter and Facebook. They’re watching (extra Orwellian).

Our good friends at the IRS have been sleeping at the wheel. More than 1 million social security numbers have been pilfered by illegal immigrants, mostly for employment purposes. The IRS knew about it for 5 years and never bothered to let anyone know. After all, it wasn’t their problem. If these illegals and their fraudulent SS #s decided to file their taxes under the fake identity, well then, the IRS could screw you–the original owner of the number. Your credit score and lines of credit would suffer irreparable damage, but the C students at the IRS would keep very busy, indeed, enforcing the tax code for government hacks from coast to coast.

Via WashTimes

“Taxpayers identified as victims of employment-related identity theft are not notified,” the inspector general said.

“It is stunning that the IRS has chosen to aid and abet identity thieves for so long instead of protecting the innocent victims of the theft,” said Sen. Daniel Coats, Indiana Republican.

Between 2011 and 2015 the agency flagged nearly 1.1 million returns where someone appeared to have stolen a valid Social Security number, the inspector general said.

The IRS did not have any new comment on the findings, instead referring reporters to an official response filed with the inspector general, in which the agency insisted it’s making progress.

Karen Schiller, commissioner for the IRS‘ small business and self-employed division, said the 2014 pilot program was helpful, even if it didn’t completely solve the notification problem, and said the agency will try to alert all taxpayers beginning next year.
“As we continue to battle and make progress against all strains of identity theft in the tax ecosystem, we recognized that we were missing an important partner in this effort — the taxpaying public,” said Ms. Schiller, who had the task of answering the inspector general.

She also vowed to figure out a system to let the Social Security Administration (SSA) know if someone’s number has been stolen.
Under the 2014 pilot program, the IRS did notify some 25,000 taxpayers whose SSNs were pilfered. The notice they received told them to contact credit-monitoring agencies to try to head off any more damage to their personal finances.

But the IRS said it’s prevented by federal law from telling taxpayers who stole their identity.
The IRS says its role is not to enforce immigration laws but rather to collect taxes. The agency issues ITINs to ensure that unauthorized workers can still file tax returns, even if they aren’t supposed to be working in the U.S.

Taxpayers who use an ITIN are eligible for some tax credits, particularly for their children who are U.S. citizens.
Congressional Republicans have long complained to the IRS that it is protecting illegal immigrants from discovery by allowing the use of ITINs but failing to share the information with other agencies.

Mr. Coats, who has written legislation requiring victims to be notified, even confronted IRS officials about their lax behavior at a hearing in April.
“All of us can agree that victims need to know that they’re victims, and need to know that an agency of the federal government, whether it’s IRS or whether it’s SSA, or both, ought to have some ability to talk to each other,” Mr. Coats said.

IRS Commissioner John G. Koskinen told Mr. Coats at the hearing that in many of the cases, friends or relatives lent their Social Security numbers to the unauthorized workers, and already know their information is being fraudulently used.

He also said the agency struggled to come up with a solution that wouldn’t chase illegal immigrants away from filing their taxes altogether.
“Obviously, priority for taxpayers and the IRS is collecting those taxes,” he said.

In some cases IRS employees said they sent a notice, but the Social Security Administration had no record of it. In other cases, it appears the IRS didn’t even bother to make a notification.

“The lack of a formal process to ensure that the SSA is notified of income not associated with an innocent taxpayer is problematic because this notification is essential to ensure that victims’ Social Security benefits are not affected,” the inspector general said.

Also, IRS audits are at 11 year lows. They seem to be moonlighting over there.

They wouldn’t want to piss 1 million Americans off and alert them to the fact that illegals are actively FUCKING THEM.

For some reason, this doesn’t seem like a feel good story to me. I am not a fervent believer in the drug laws, especially those that send away street pharmacists for 20 years. He isn’t freeing these poor lads, but instead greatly reducing their sentences. You can sift through the rubble here. The vast majority of these criminals are in fact street pharmacists.

Today’s 111 commutation grants underscore the President’s commitment to using his clemency authority to provide a second chance to deserving individuals. To date, President Obama has granted 673 commutations: more commutations than the previous ten presidents combined. More than one-third of the President’s commutation recipients, or 232 individuals, were serving life sentences.

We must remember that these are individuals — sons, daughters, parents, and in many cases, grandparents — who have taken steps toward rehabilitation and who have earned their second chance. They are individuals who received unduly harsh sentences under outdated laws for committing largely nonviolent drug crimes, for example, the 35 individuals whose life sentences were commuted today. For each of these applicants, the President considers the individual merits of each application to determine that an applicant is ready to make use of his or her second chance.

While I expect that the President will continue to grant commutations through the end of this administration, the individualized nature of this relief highlights the need for bipartisan criminal justice reform legislation, including reforms that address excessive mandatory minimum sentences. Only the passage of legislation can achieve the broader reforms needed to ensure our federal sentencing system operates more fairly and effectively in the service of public safety.

Opinion? Is he power grabbing, over-stepping the boundaries of the executive branch or is he St. Obama? Am I being too cynical or is this gigantic leap in Presidential commutations more Manchurian candidate shit from Obama?

On his radio show today, Sean Hannity went fucking apeshit on Glenn Beck and the Never Trumpers- people like J. Kasich, Beck, Jeb, the National Review etc.

Here is the text. The video clip of his diatribe is below.

“Well, let me just say to all of you. And that includes the commentator class. That includes the Jonah Goldberg class, that includes radio talk show hosts. Glenn Beck is like on a — it’s a holy war for him at this point. I mean, he’s off the rails attacking me every day. Blaming me for Trump. Well, no. I was fair to everybody, Glenn. Whether you want to admit it or not. I know I was fair. My conscience is clear. And I, frankly, I’m proud to pull the lever for Donald Trump with a clear conscience.

“So here’s what I say to all of you Never Trumpers — Glenn Beck, I hope you’re listening. You own Hillary Clinton’s Supreme Court appointments. You own it! You are doing everything you can do to cast doubt in people’s minds! Trump gave us a list. You own her Supreme Court nominees, you own her un-vetted refugees and the 550% increase she will bring into this country. You own the jobs that illegal immigrants will take from the 95 million Americans out of the labor force. You own Obamacare, which is a disaster for this country. You own education because she is beholden to the NEA [National Education Association]. And if we don’t improve the lives of 95 million Americans out of the labor force, I blame you for that, too!

“Because you’re helping elect her. And I’m also saying that, hey, we have a $4,100 increase in healthcare payments since Obama has been president. It’s only going to go higher. You get responsibility for that, too! We have got 12 million more Americans on food stamps. If that increases, I’m going to blame you! We have 46 million total. Eight million more Americans living in poverty. Fifty million Americans in poverty. If that gets worse, I’m blaming you! You know, we have the worst home ownership in 51 years. If that gets worse, guess who I’m blaming? I’m blaming all of you!

“Arrogant, stubborn, lying about what Trump has said and his record. Purposefully distorting, creating doubt, misperception — and you’re so obsessed, some of you with Trump, you don’t even go over how corrupt Hillary is! What a disaster Obama has been. And if we have 1 in 5 American families four years from now, still without a single family member working, I am blaming you. And if in four years from now we have 1 in 6 American men, 18 to 24, in jail or living in mommy’s basement, I’ll blame you. And if we continue to build up more debt than every other president combined like Obama did, well, that’s your debt! And that’s money you are helping to steal from our kids! And we have the lowest labor participation rate since the ’70s, well, I blame you for that!

“And if we elect a president because you are so stubborn, arrogant, and stupid, that can’t say ‘radical Islam’ and can’t engage an enemy and identify it, that’s your fault as well! And if you help elect the single most corrupt person to ever seek the presidency, somebody who lies like she did, somebody who sold out her office for gain like she has, somebody who has failed on Iran and ISIS and radical Islam in general, and Iraq and Iran and Syria and North Africa and Libya, I’m blaming you!

“And you are going to say, ‘Hannity, we blame you. You gave Donald Trump time on your show.’ And I gave every other candidate time. His agenda is infinitely better than hers. And if you can’t see that, then that’s your problem. You own it. You own her. You own every dumb thing she’s about to do. I blame you. Got it? I am going to name names regularly if she wins.”

In an interview with Alex Jones today, Britain’s hero of democracy and independence from EU tyranny, Nigel Farage discussed BREXIT and how a Trump win in the upcoming Presidential elections could be an even bigger blow to the globalist schemes. Being the gentleman that he is, he thanked Hillary Clinton for her recent criticism of him–saying it raised his profile in America greatly and has turned him into a political football.

‘If America, the leader of the western world, once again, becomes the leader of the FREE WORLD, well then, I think, basically, we would have done away with the globalists.’

-Farage