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Stocks Slide, Bonds Soars, Dollar Rebounds As Traders Have A Question For Powell

Something is off. Over the past decade, any time the Fed, BOJ or ECB surprised the market dovishly, risk assets surged. And yet, when the ECB did just that on March 9, when Draghi unveiled TLTRO prematurely, the Stoxx slumped. And, more concerningly, after a brief rally yesterday at 2pm in kneejerk response to a Fed that has now fully capitulated on normalizing monetary policy and announced it will end its balance sheet runoff by September, US markets not only faded all gains, but closed sharply lower. When commenting on the Fed’s decision, and the market’s surprising reaction, we said that it was too early to draw conclusions from the S&P’s reaction, where a blast of selling took place at precisely 3:30pm setting the dour mood into the last 30 minutes of trading. However, the overnight session which saw both European stocks struggle and U.S. equity futures slide despite some bullish sentiment in Asia, it appears that investors still have a some questions for Powell, among which the most important one: “What does the Fed know that nobody else does for it to capitulate so abruptly”, and what might be lurking in the shadows. So far that answer is missing, and it explains why US equity futures have continued to sink despite a Fed which is now all in on reflating if not the economy, which by now it...

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Why The Fed Keeps Propping Up The Market

Authored by Jesse Colombo via RealInvestmentAdvice.com, The bull market of the past decade since the Great Recession has been an unusual one: despite all of the economic damage that occurred during the global financial crisis and rising risks (including global debt rising by $75 trillion), it has been the longest bull market in history. The explanation for this paradox is simple: it’s not an organic bull marketbecause the Fed and other central banks keep stepping in to prop up the market every time it stumbles. Though the Fed has two official mandates (maintaining stable consumer prices and maximizing employment), it has taken on the unofficial third mandate of supporting and boosting the stock market since the Great Recession. The chart below, which was inspired by market strategist Sven Henrich, shows how the Fed or other central banks have stepped in with more monetary stimulus (quantitative easing, promises to keep interest rates low, etc.) every time the S&P 500 has stumbled over the past decade: As we noted in this past weekend’s newsletter (subscribe for free e-delivery): “An economy that is growing at 2%, inflation near zero, and Central banks globally required to continue dumping trillions of dollars into the financial system just to keep it afloat is not an economy we should be aspiring to. But despite commentary the financial system has been ‘put back together again,’ then why are Central Banks acting? Via Bloomberg: ‘Led by the Fed,...

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New Zealand Bans Guns After Mass Shooting; All “Military-Style” And “Assault Rifles” Outlawed

New Zealand Prime Minister Jacinda Ardern announced the “first tranche” to reforms on gun laws – beginning with the immediate ban on the sale of semi-automatic and ‘assault’ rifles, six days after attacks on two mosques in Christchurch left 50 people dead. Notably, accused gunman Brenton Tarrant – specifically hoped his attack would lead to the restriction of gun rights.  “On 15 March, our history changed forever. Now, our laws will too,” said Ardern. “We are announcing action today on behalf of all New Zealanders to strengthen our gun laws and make our country a safer place.” “The effect of this will mean that no one will be able to buy these weapons without a permit to procure from the police. I can assure people that there is no point in applying for such a permit,” she said, adding “In short, every semi-automatic weapon used in the terrorist attack on Friday will be banned in this country.”   The ban will apply to all firearms currently defined as “Military Style” or “Semi-Automatic” (MSSA), defined as a semi-automatic firearm – including shotguns – capable of being used with a detachable magazine that holds more than five rounds.  National Rifle Association of New Zealand president Malcolm Dodson holding a bolt-action rifle not subject to the new ban. (ROBERT KITCHIN/STUFF) Guns which are not affected by the ban include semi-automatic .22 caliber rimfire firearms with a magazine holding...

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Empire Of Chaos Crumbles As Iran Outflanks US In Iraq & Beyond

Authored by Tom Luongo, Iran has successfully navigated the first phase of its resistance to U.S. sanctions pressure. The U.S. State Department has admitted it’s goal of reducing Iran’s oil exports to zero is not feasible. The goal now is a 25% drop to 800,000 barrel per day. And that is no joke. It’s a big drop from where Iran was looking to produce in the coming years under the auspice of the JCPOA. The U.S. will not stop until all avenues have been exhausted or Trump fires his current cabinet. Iran’s total non-oil exports have suffered as well, since gas condensate exports have also dropped along with the crude oil numbers. But Iran is finding friends in other places. They are currently finalizing a free trade agreement with the Eurasian Economic Union (EAEU) with Belarus leading the talks at the 15th meeting between their Joint Economic Committee. Iran’s non-oil exports, however, are still just one-fifth of their peak exports. Like Russia it is working quickly with regional partners to change that dynamic. It won’t be enough to overcome the U.S.’s economic pressure in the short term. But as I always say if it survives the initial onslaught then market forces open up opportunities for change. Things like INSTEX, the EU special purpose vehicle for getting around U.S. sanctions, is a perfect example. Bilateral trade outside of the U.S. dollar is another....

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After Multiple Reports About New Zealanders Turning In Guns, Guess How Many Actually Did It? 

Following reports that a flood of New Zealand gun owners have been voluntarily surrending their firearms in the wake of last Friday’s Christchurch mosque attack that left 50 dead, the numbers are in on how many Kiwis actually handed over their weapons.  JP LRP-07 Out of an estimated 1.2 million registered guns, New Zealand police report that as of Tuesday night, 37 firearms have been surrendered nationwide, according to BuzzFeed.  No accounting was provided of how many people owned those guns, the types of firearms, or where they were surrendered. The reports of citizens disarming themselves came after a Monday announcement by Prime minister Jacinda Ardern that several “in principle decisions” on gun control have been made by Cabinet ministers, while praising residents who have surrendered their guns to police.  So far, we know of four people who have; Green Party member John Hart and longtime gun owner “@SirWB” – who each turned in a rifle, a grandmother who goes by the Twitter handle “@FeyHag” who said she requested for her family’s guns to be handed in for destruction, and former New Zealand Army soldier Pete Breidahl – who said he warned local police of extremists at a local rifle club where he said he suspected the shooter was a member.  “All I want is to go back to my horses, say goodbye to firearms and the bullshit shooting community and its drama and let the police and government sort this...

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European Parliamentary Bloc Suspends Fidesz As Hungary’s Feud With Brussels Deepens

With  polls projecting large gains for eurosceptic parties from Italy to Central and Eastern Europe (most notably Hungary and Poland) in the upcoming European Parliamentary Election, Hungarian Prime Minister Viktor Orban and his Fidesz Party on Wednesday were officially suspended from the largest center-right group in the EU Parliament – setting the stage for a complete break between the center-right and the anti-establishment eurosceptics. The suspension is the culmination of a long-running feud between Orban and Manfred Weber, the group’s candidate to succeed Jean-Claude Juncker as the head of the European Commission. Participating MEPs voted almost unanimously in favor of a suspension. #Fidesz will be suspended with immediate effect and until further notice following today’s vote of EPP members (190 in favour, 3 against). The suspension entails: ▪No attendance at any party meeting ▪No voting rights ▪No right to propose candidates for posts — Joseph Daul (@JosephDaul) March 20, 2019 Details of the suspension leaked ahead of the vote. It will involve Fidesz losing all participatory rights in the group while the EPP prepares a final report on Orban’s alleged transgressions. Resolutionsentwurf Seite 2 zu #Orban – Suspendierung ohne Enddatum, Verlust von Stimmrechten, 3 wise men @SPIEGELONLINE pic.twitter.com/Z4swjlpm8E — Peter Mueller (@PeterMueller9) March 20, 2019 Fidesz aroused the anger of its fellow EPP members, Weber in particular, with anti-EU and anti-Soros billboard campaigns, which Fidesz adopted in the run-up...

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Forget ‘Project Fear’, This Is What A “Hard Brexit” Could Mean For The UK

Authored by Patrick Barron via The Mises Institute, When Britons voted on June 23, 2016 on whether or not to leave the EU there was no discussion of a “hard or soft Brexit”. These terms were invented after Brexit passed by a surprisingly large margin and the mostly anti-Brexit Tory Party government, especially its leadership, decided that it needed to negotiate the terms of leaving. Brexit supporters regard such terms as betraying the 2016 Brexit referendum itself. These 17.4 million Britons undoubtedly believed that Brexit would mean exactly that: Britain would no longer be governed by any EU laws, regulations, etc. Nevertheless, all that the world has heard since that day in June 2016 is a debate over the terms of leaving, with any so-called terms being labeled as a “soft Brexit” and leaving without any agreement as a “hard Brexit”. In a “hard Brexit,” Britain just leaves and all EU regulations, etc. are null and void. It’s pretty clear cut. A “soft Brexit” can mean almost anything that is not a “hard Brexit”; i.e., Britain would agree to continue some or all of the manufacturing regulations, tariffs, and intergovernmental agreements — such as ceding jurisdiction to the European Court of Justice — that apply to EU countries. The list is almost endless and the time frame very nebulous, a perfect playground for those who wish to have a Brexit In Name...

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China’s New Silk Road To Extend To Russia’s Crimea

Russian state sources and officials have confirmed closer cooperation between Beijing and the Crimean peninsula on major Belt and Road Initiative (BRI) projects, citing Chinese diplomats, which represents a continued significant shift in Moscow’s priorities which have historically pit Russia in economic competition with China. Any future BRI projects involving Crimea would further solidify and fully integrate the peninsula into Russia’s hold after its annexation from Ukraine following the 2014 referendum. During a ceremony at the Russian Embassy in Beijing on Monday, the head of the association of Chinese compatriots on the peninsula, Ge Zhili, made the following formal statements: “Our organization is bolstering cooperation ties, exchanges and friendly contacts with the Crimean society.” Not incidentally the event marked the “fifth anniversary of Crimea’s reunification with Russia.” The bridge across the Heilong River (an early BRI cooperative project) will connect Tongjiang city in Heilongjiang province with Nizhneleninskoye in Russia. Image source: Russia Business Today Speaking also of increased cultural along with economic contacts, Ge continued to explain the goal “To help people understand what Crimea is, start cooperation with it, establish reliable relations with the peninsula, develop friendly contacts with it and implement joint private projects under the Belt and Road Initiative” — China’s ultra-ambitious development and investment project potentially involving over 150 countries on five continents. Chinese statements at the ceremony underscored establishing and deepening “reliable partner ties” at a moment when Moscow is believed to no longer be pursuing...

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Turkey: Tens Of Thousands Prosecuted For “Insulting” Erdoğan

Authored by Uzay Bulut via The Gatestone Institute, Since Turkish President Recep Tayyip Erdoğan’s 2014 election, there have been 66,691 “insult investigations” launched, resulting in 12,305 trials thus far, and the “numbers are increasing.” – Yaman Akdeniz, professor of law, Istanbul Bilgi University. Ahmet Sever, a spokesperson for Turkey’s former president, Abdullah Gül, authored a book in which he wrote: “We [are] faced with a government or, more precisely, with one man, who considers books to be more dangerous than bombs.” Meanwhile, as Erdoğan continues playing a double game with the West, as part of his decades-long bid to become a member of the European Union. That plan may well be why his justice minister announced in December that he would be unveiling a new strategy for judicial reform. The EU should not fall for this transparent ploy. Instead, it should be demanding that the Turkish government cease prosecuting innocent people — including those whose only “crime” is criticizing Erdoğan. “Insulting the president” is a crime in Turkey. If convicted, violators face up to four years in prison — and longer, when the insult is public. According to Istanbul Bilgi University professor of law, Yaman Akdeniz, since Turkish President Recep Tayyip Erdoğan’s 2014 election, there have been 66,691 “insult investigations” launched, resulting in 12,305 trials thus far, and the “numbers are increasing.” Pictured: Turkish President Recep Tayyip Erdoğan at...

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Chicago Cops Demand DOJ Probe Into Smollett Case Meddling After Ex-Obama Official Called In Favor

The president of the Chicago police union has asked the Justice Department to investigate allegations that Cook County State’s Attorney Kim Foxx interfered in the police investigation of “Empire” actor Jussie Smollett after Michelle Obama’s former Chief of Staff, Tina Tchen, called in a favor, according to WLS-TV.  Jussie Smollett, Cook County State’s Attorney Kim Foxx Foxx recused herself from the case on Feb. 20 “out of an abundance of caution” because of “familiarity with potential witnesses in the case.”  Translation: Michelle Obama’s former CoS contacted Foxx saying that Smollett’s family had “concerns” about the investigation, so Foxx tried to get the case transferred from CPD to the FBI. She was told to pound sand based on “a lack of evidence” that Smollett was the victim of a hate crime.  Smollett claimed that he was the victim of a predawn hate crime on January 29 in which two white men assaulted him while he was on his way home after buying a sandwich; hurling racial and antigay slurs at him, dousing him in a chemical, placing a noose around his neck (which he was still wearing when police arrived later that morning), and punching him in the face.  Police allege that Smollett, who is black and gay, staged the attack because he was unhappy with his salary and wanted to boost his profile. Others have suggested that Smollett wanted to frame Trump supporters as bigots, with some even going so...

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