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Wall Street’s Most Bearish Analyst Asks “What Did I Miss”

Authored by Wall Street’s most bearish sellside strategist, Morgan Stanley’s Michael Wilson As a macro strategist, my job is to try to make a very complex world easier to understand – something that’s very difficult to do. In an era of financial repression and seemingly elevated political uncertainty, the level of complexity has felt elevated too. This has created great opportunities for the past several years as a macro strategist – first to be more bullish than the consensus in 2016-17 when markets were overly worried about the outcomes, and then last year to be more bearish when risks were priced out. On the surface, 2019 has been much easier, with the consensus generally getting it right to be more bullish on risk assets as the Fed pivoted aggressively and valuations had a long way to recover. While I was on board with this bullish outlook earlier in the year, I underestimated how far the revaluation would go. What did I miss? Mainly, I interpreted the fall in global long-term interest rates to their lowest levels since 2016 as a confirming signal that growth would disappoint investors and not reaccelerate in the second half of the year. Instead, equity markets have generally dismissed the potentially negative growth signal from lower long-term interest rates and taken the lower rates as simply a positive for equity valuations. As always, the answer...

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Lawrence Wilkerson Warns The US Is Driving Down A Highway To War With China

Authored by Adam Dick via The Ron Paul Institute for Peace & Prosperity, Former Army Colonel Lawrence Wilkerson, who was chief of staff for Secretary of State Colin Powell in the George W. Bush administration, warns in a new The Real News interview with host Sharmini Peries that the United States government is driving down a “highway to war” with China — a war for which Wilkerson sees no sound justification. The drive toward war is not undertaken in response to a real threat posed by China to the people of America. Instead, argues Wilkerson, the US government is moving toward war for reasons related to money for both the military and the broader military-industrial complex, as well to advance President Donald Trump’s domestic political goals. Wilkerson, who is a member of the Ron Paul Institute for Peace and Prosperity’s Academic Board, elaborates on the US military’s money-seeking motivation to advance the new China scare, stating: All of this right now, first and foremost, is a budget ploy. They want more money. And that’s largely because their personnel costs are just eating their lunch. And, second, it’s an attempt to develop – and this has something to do with money too of course – another threat, another cold war, another feeding system. The military just hooks up like it is hooking up to an intravenous, you know, an IV...

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Billionaire Commencement Speaker Shocks Grads With Promise To Pay Off Student Loans

A billionaire philanthropist and technology investor told the graduating class of Morehouse College that he would wipe out the student debt of the entire graduating class, estimated to be around $40 million, according to Time.  Robert F. Smith, this year’s commencement speaker, made the announcement Sunday morning while addressing nearly 400 graduating seniors of the all-male historically black college in Atlanta. Smith is the Founder and CEO of Vista Equity Partners, a private equity firm that invests in software, data, and technology-driven companies. –Time “On behalf of the eight generations of my family that have been in this country, we’re gonna put a little fuel in your bus,” said Smith, adding “This is my class, 2019. And my family is making a grant to eliminate their student loans.”  Stunned students looked around in disbelief upon the announcement, before breaking into wild applause. Morehouse said it is the single largest give to the university.  Smith – who received an honorary doctorate from Morehouse as part of the ceremony, had already announced a gift of $1.5 million to the college. He said he expected the graduates to “pay it forward,” and said he hoped that “every class has the same opportunity going forward.” In the weeks before graduating from Morehouse on Sunday, 22-year-old finance major Aaron Mitchum drew up a spreadsheet to calculate how long it would take him to pay back his $200,000 in student...

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Trump Admin Kicks Off Plan to Foster Israeli-Palestinian Peace

The Trump administration has started to implement its multi-faceted plan to foster peace between Israel and the Palestinians, a process that will begin in June when Bahrain hosts a forum to promote economic development in key Palestinian territories, according to senior administration officials. The Trump administration’s long rumored peace plan is just beginning to spill into public view, with senior officials organizing a June 25 business forum in Bahrain that will bring together a range of political and business officials in the region to develop methods to spur growth in the Palestinian economy. The economic aspect is just one piece of the plan, officials said, explaining that a political component includes specific details on what peace would look like. Officials were mum on Sunday about specifics regarding that portion of the peace plan. The forum, dubbed “Peace to Prosperity,” will bring together top business leaders with their political counterparts and include workshop sessions with Trump administration officials in which they will present a roadmap to help bolster the perpetually ailing Palestinian economy. The goal, U.S. officials say, is to reform the Palestinian economy so that it can support itself as a functioning state. “The people who have seen the product we put together so far think it’s very thoughtful,” a senior administration official, speaking only on background, told reporters Sunday afternoon. The economic portion of the administration’s plan, which...

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Al Gore Forecast There Would Be No Ice At The North Pole By 2013

Via ArmstrongEconomics.com, Al Gore in 2009 forecast that there would be no more ice by 2013. The BBC reported those crazy forecasts back in 2007. Former US Vice President Al Gore cited Professor Maslowski’s analysis on Monday in his acceptance speech at the Nobel Peace Prize ceremony in Oslo. “Our projection of 2013 for the removal of ice in summer is not accounting for the last two minima, in 2005 and 2007,” the researcher from the Naval Postgraduate School, Monterey, California, explained to the BBC. “So given that fact, you can argue that may be our projection of 2013 is already too conservative.” “The implication is that this is not a cycle, not just a fluctuation. The loss this year will precondition the ice for the same thing to happen again next year, only worse. “There will be even more opening up, even more absorption and even more melting. “In the end, it will just melt away quite suddenly. It might not be as early as 2013 but it will be soon, much earlier than 2040.” I have explained many times that the forecasting methods used is to assume whatever trend is in motion will remain in motion forever. In other words, is the Dow Jones were to rally by 25% in one year, then they would predict that same percentage movement will continue forever. The methodology is completely void of...

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Rocket Fired Toward US Embassy In Central Baghdad, Blast Reported 

Moments ago a blast was reported in central Baghdad close to the fortified ‘Green Zone’ in the Iraqi capital. Several journalistic sources are saying the US embassy there has come under rocket attack, with regional Arabic media confirming a blast was heard in the vicinity of the embassy.  A BBC correspondent in the region, Ali Hashem, reports that “one Katyusha rocket was launched towards the US embassy in the Green Zone in Baghdad, no reports of casualties”. Katyusha rocket, File Photo Reuters has confirmed an emergency security incident unfolding:  Two Baghdad-based diplomatic sources also said they heard the blast close to the Iraqi capital’s fortified Green Zone which houses government buildings and foreign embassies. The U.S. embassy in Baghdad and its consulate in the northern city of Erbil evacuated non-essential staff this week. The Iraqi government has confirmed a rocket was fired toward the embassy, with no further attacks reported and no casualties, per Reuters: A Katyusha rocket reportedly fell in central Baghdad’s Green Zone on Sunday night, Iraq military personnel announced. “A Katyusha rocket fell in the middle of the Green Zone without causing any losses or causalties, further details will come later,” the military said in a statement.Earlier in the evening, a blast was heard in central Baghdad on Sunday night, with its cause and precise location unclear, Reuters witnesses said. Iraqi officials could not immediately be reached for comment. 🛑This a major...

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Rapid DNA-Testing Reveals Third Of Migrants Lying About Family Relationship To Children

Rapid DNA testing has revealed that almost 1/3 of illegal migrants apprehended at the southern US border were not biologically related to the children they were traveling with, nor were they cases of step-fathers or adoptive parents, according to the Washington Examiner. The findings were a result of a pilot program conducted by Immigrations and Customs Enforcement (ICE) in El Paso and McAllen, Texas.   The number of migrants tested and how they flagged people for testing is unknown, while the official added that some migrants refused the cheek-swab test and admitted that they aren’t related to the children they were with after learning that their claim would be subject to DNA proof.  Border Patrol agents are seen processing a family unit in Texas earlier this month.  After analyzing the results of the pilot, the Department of Homeland Security will consider rolling out the rapid DNA tests on a broad-scale, according to ICE.  “This is certainly not the panacea. It’s one measure,” said the official.  One upside, the source said, was that in addition to verifying bogus relationships, it also verified many when Homeland Security personnel were unsure. The Examiner reported in March the Department of Homeland Security and ICE were looking at adopting the test, made by a company called ANDE. On May 1, DHS announced it would launch a pilot of the program in instances where ICE Homeland Security Investigations agents could not verify a family...

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Market Price Discovery Has Become “A Toxic Mess”

Authored by Sven Henrich via NorthmanTrader.com, Market price discovery has become a toxic mess and traders have to adapt to changing conditions. Fast. Blending an understanding of technicals with a keen awareness of the outside influencing factors on price discovery is becoming an ever more vital combination critical to success in navigating these complex markets. The tape action, long subject to the powerful influences by central banks, computerized trading, buybacks, etc. has in 2019 increasingly become subject to the political sphere taking an overt active role in not only influencing price action, but also directly trying to drive it. A vicious battle between reality and make belief is unfolding before our very eyes. Over the past 10 years markets were subject to $20 trillion in global central bank intervention with many central banks still sitting on negative rates today. Just this year one can only imagine where equity prices would be without the Fed cave in January. On the buyback front one recent study suggests equity prices would be 19% lower than they are now without them: This year alone we’re seeing a record near $100B per month buyback program keeping a bid under markets. In the first quarter political headlines of “trade optimism”, along with the price pivot known as the “Fed cave” helped drive the action relentlessly higher with overnight gap ups producing price action often times...

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More Footage Discovered From Bernie Sanders’ 1988 ‘Honeymoon’ In The USSR

Politico has viewed three-and-a-half hours of footage from Bernie and Jane Sanders’ 1988 ‘honeymoon’ to the Soviet Union, and judging by their description, it looks like the footage might make it difficult for Sanders to distance himself from his support for Communist regimes both the USSR and the Sandinistas in Nicaragua, where he also visited. In the footage, Sanders, often seated under or near portraits of Vladimir Lenin, would extol the virtues of Soviet life. The hours of footage include a scene of Sanders sitting with his delegation at a table under a portrait of Vladimir Lenin. Sanders can also be heard extolling the virtues of Soviet life and culture, even as he acknowledges some of their shortcomings. There are flashes of humor, too, such as his host warning the American guests not to cross the KGB, or else. Sanders and his entourage visited three cities, Yaroslavl, Moscow and Leningrad as they worked to establish a ‘sister city’-type relationship between Yaroslavl and Burlington. The trip happened in 1988, as Sanders was nearing the end of his second term as Burlington’s mayor. The video also paints a fuller picture of why Sanders ventured to the land of America’s No. 1 enemy in the midst of the Cold War, the anti-war idealism that fueled his journey, and what he found when he got there. Over the course of 10 days, Sanders,...

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Jones: Alabama Pro-Lifers Are ‘Extreme’ and ‘Callous’

Sen. Doug Jones (D., Ala.) released a video on Twitter last Monday decrying the recent abortion bill passed in Alabama as “draconian,” calling its supporters “callous” and “extreme.” Jones called out Republican legislators, who stood and applauded when the bill, which essentially criminalizes abortion in Alabama, passed the state Senate. “These Republican legislators, who are overwhelmingly men, are so extreme and so callous that they would support a bill that denies a woman a constitutional right that they have had for decades,” Jones said. “They would take away that right and make their doctors and healthcare providers criminals.” Last week, the Alabama House of Representatives passed a bill threatening a woman’s ability to make her own health care choices. Doug wanted to take a moment to share a few thoughts on why we have to stand united against this extreme attack on women’s rights: pic.twitter.com/ohRH0cU5PQ — Doug Jones HQ (@DougJonesHQ) May 14, 2019 In recent weeks, Jones became embroiled in controversy surrounding the Alabama bill—which female Gov. Kay Ivey signed into law this week—when state Rep. John Rogers (D) criticized the bill during the debate in the state Senate. “Some kids are unwanted, so you kill them now or you kill them later,” Rogers said. “You bring them in the world unwanted, unloved, you send them to the electric chair. So, you kill them now or you kill them...

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