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Friday, September 23, 2016

OMG!!!!!!!!!!!!!!!!!!!!!! MORE Proof to what I have been saying since I Started this Blog..................Hillary "IS" the MOST Dangerous Woman on Planet EARTH!!!!!!!!!!!!!!!!!!!!!!!!!

Most Dangerous Person On the Planet Today: Hillary Clinton
By Mike "Mish" Shedlock

On Monday, Hillary Clinton accused Donald Trump of giving “aid and comfort” to Islamic terrorists, and that terrorists use his rhetoric to recruit fighters.

On fighting terrorism, she chastised Trump “I Know How to Do This“.

“I’m the only candidate in this race who’s been part of the hard decisions to take terrorists off the battlefield. I have sat at that table in the Situation Room,” said Clinton.

Here’s my counterclaim: Hillary Clinton not only sponsors terrorism, she is a terrorist.

I sent this as an Op-Ed to the New York Times. Rejected as expected.

Irony of the Year

The irony of the day, week, month and year is Hillary’s statement “I Know How to Do This“.

    Hillary supported Bush’s inane war in Iraq.
    Hillary supported Bush’s inane war in Afghanistan.
    Hillary was the mastermind of US failed strategy in Libya.
    Hillary is the single person most responsible for Benghazi.
    Hillary supports president Obama’s drone policy.
    There has never been a war Hillary did not support.

The most surefire way to make a terrorist out of a non-terrorist is to kill an innocent child or bomb an innocent person’s home. Doing so is sure to radicalize friends and family.

String of US Terrorism

There is nothing more un-American or unconstitutional than bombing other countries indiscriminately with no declaration of war, and with little or no regard to the lives of innocent victims.

Hillary Clinton supported those policies as Secretary of State. Hillary Clinton, like George Bush, like Dick Cheney, and like president Obama are all guilty of terrorism.

If you disagree, please put yourself in the shoes of a mother whose 4-year old daughter was “accidentally” killed by a US drone. Envision your neighbor’s house “accidentally” blown to smithereens by drones.

Is it not terrorism because it’s an accident? What practical difference does it make?

In the eyes of the families of innocent victims, no words better describe such actions than “US terrorism“. I guarantee that is precisely how you would feel if it was your son or daughter killed, or it was your house blown up.

On April 23, 2015 the New York Times reported Drone Strikes Reveal Uncomfortable Truth: U.S. Is Often Unsure About Who Will Die.
As Rouhani Prepares to Address UN, Iran’s Military Threatens to Turn Israeli Cities to ‘Dust’
By Patrick Goodenough

( – On the eve of Iranian President Hasan Rouhani’s address to the United Nations, military parades back home Wednesday featured ballistic missiles on a truck draped with a banner threatening to turn a fellow U.N. member state’s cities to “dust.”

“If the leaders of the Zionist regime make a mistake then the Islamic Republic will turn Tel Aviv and Haifa to dust,” read the banner, according to Reuters.

Iranian media outlets including state-run Al-Alam TV and Tehran Times published multiple images of the Zolfaqar missiles and the banner.

The Fars news agency, affiliated with the Islamic Revolutionary Guard Corps (IRGC), quoted IRGC aerospace force commander Brig. Gen. Amir Ali Hajizadeh as saying the Zolfaqar was capable of hitting targets up to 466 miles (750 kms) “with a zero margin of error.” Tel Aviv lies roughly 650 miles from the nearest Iranian territory.

Another ballistic missile on display in Wednesday’s parades, however, the liquid-fueled Qadr, boasts a range of up to 1,240 miles (2,000 kms), potentially threatening Israel, Saudi Arabia, U.S.  forces in the Gulf, and south-eastern Europe.

Also on display was the Russian-supplied S-300 surface-to-air missile defense system, which Iran recently deployed at a key underground nuclear facility.

The parades – near the mausoleum of Ayatollah Ruhollah Khomeini in Tehran, and in other locations – were held to mark the beginning of “Sacred Defense Week,” commemorating the 1980-1988 Iran-Iraq war.

Iran has used military displays before to send propaganda messages to its people and its foes. Last March it test-fired a Qadr missile, engraved with the words, in Hebrew, “Israel should be wiped from the earth.”

The unveiling earlier this month of a new IRGC Navy vessel was accompanied by a message advising the U.S. Navy to “go to the Bay of Pigs; the Persian Gulf is our home.”

In a speech at the Tehran parade – delivered in the place of Rouhani, who is at the U.N. – armed forces chief of staff head Maj. Gen. Mohammad Hossein Baqeri said Iran’s military capabilities are designed to give a “timely response to the enemy threats.” 

Iran Military Parade Showcases Missile That Threatens to Turn Israel to 'Dust

The Iranian military has unveiled its latest missiles, accompanied by threats to use them against Israel.

On Wednesday, Iran conducted a military parade through its capital. On display were a wide variety of tanks and warplanes alongside troops.

But the parade also featured Tehran’s 16 ballistic missiles, as well as new projectile featuring multiple warheads, known as the Zolfaghar. According to a message written on the side of the truck transporting this missile, the Zolfaghar is intended for Israel.

View image on Twitter 
Sign on Iran's new long-range ballistic Zolfaqar missile: If attacked, Iran will destroy Israel cities of Tel Aviv and Haifa

North Korea-Iran Missile Cooperation
By Michael Elleman

North Korea’s ground test of a powerful, liquid-fueled engine on September 20, and the launch of three modified-Scud missiles earlier this month renewed allegations that Pyongyang and Tehran are collaborating on ballistic-missile development. The accusations are mostly speculative, based largely on the apparent similarities of ballistic missiles and satellite launchers appearing in both Iran and North Korea. A detailed examination of the designs employed by the two countries casts doubt on claims that the two countries are co-developing missiles and satellite launchers, exchanging detailed design data, and testing prototypes for each other. Pyongyang and Tehran may share test data on a limited basis, and perhaps trade conceptual ideas. But there is little evidence to indicate the two regimes are engaged in deep missile-related collaboration, or pursuing joint-development programs.


During its war with Iraq in the 1980s, Iran’s cities and petroleum infrastructure were repeatedly attacked by Baghdad, which possessed a sizable arsenal of Soviet-supplied aircraft and Scud-B ballistic missiles. Lacking reliable access to the skilled technicians and spare parts needed to maintain and fly its Western-supplied aircraft in the aftermath of the 1979 Islamic Revolution, Iran was unable to respond to and punish Iraq for the assaults. Tehran was thusly driven to acquire ballistic missiles and artillery rockets from willing exporters for its counter-strike capabilities. Libya and Syria initially shipped a limited number of Scud-B missiles to Iran, with allowed the Islamic regime to target Baghdad and other large Iraqi cities in the mid-1980s. In need of a much larger arsenal of missiles, Iran turned to North Korea for its longer-term requirements. Pyongyang shipped between 200 and 300 Soviet-built Scud-B and Scud-C missiles to Iran during the latter years of the war and into the early 1990s. Iran renamed the missiles Shahab-1 and -2, respectively.

The transactional relationship between Iran and North Korea continued throughout the 1990s, with Pyongyang providing missile-maintenance infrastructure and training, as well as medium-range Nodong missiles, which Iran dubbed Shahab-3. When Tehran test fired its Shahab-3 in July 1998, it was only the second known launch of the Nodong, with North Korea having successfully flown the missile just once, in 1993. Iran continued to flight test the Shahab-3, as did Pakistan, another recipient of the Nodong, which it calls Ghauri. The preliminary flight trials conducted by Iran and Pakistan showed promise, though Iran was concerned that the Shahab-3’s maximum range was less than 1,000 km. Consequently, Tehran’s engineers and missile specialists modified the Shahab-3 to create the 1,600-km range Ghadr missile, which was initially test flown in 2004.

It is unclear how deeply involved North Korea was in Iran’s program to modify the Shahab-3, and create the Ghadr missile. While it is reasonable to assume that some flight-test data were shared, interviews with Russian and Ukrainian specialists aiding the Iranian missile program during the late-1990s suggest that cooperation between Pyongyang and Tehran was isolated and not comprehensive. Iran’s compartmentalisation of the missile programs would have impeded deep technical collaboration with North Korea, if not preventing it altogether. Moreover, if the security procedures in Iran continue today, it is unlikely Pyongyang and Tehran are actively cooperating on missile and satellite-launcher development, though critical materials and components may continue to flow from one country to the other.

Four Allegations of Possible Collaboration and Cooperation

Those arguing that Iran and North Korea are cooperating on missile development cite four observations. Two of them center on the similarities in the evolutionary versions of Pyongyang’s Nodong missiles and Tehran’s Shahab-3 and Ghadr systems. The third observation focuses on the solid-propellant technology recently used by North Korea to propel its submarine-launched ballistic missile, the KN-11, which some argue is identical to that employed by Iran’s two-stage, medium-range Sajjil missile. The fourth, and most often citied observation, and the one said to be corroborated by official US government sanctions, claims that Tehran and Pyongyang are cooperating on the development of large rockets used to loft satellites into orbit.

As discussed above, to overcome shortfalls in the reliability and reach of the Nodong missiles imported from North Korea, Iran modified the Nodong/Shahab-3 to create the Ghadr missile. The evolution in design was incremental, with several versions of the improved Shahab-3 tested in Iran. North Korea, which launched only one Nodong prior to 2006, presumably retained the original design. There are no publicly available photographs of the Nodongs tested in 2006, so it is impossible to know if any modifications were introduced by North Korea. The first public appearance of the missile occurred in 2010, when the Nodong was seen during in a military parade in Pyongyang. The Nodong that appeared in the parade was a mock-up, though, at first glance, it looked similar to the Ghadr, including the complex shape of the nosecone. This led some to conclude that North Korea and Iran collaborated on its design, and by extrapolation, possibly the flight-trials conducted in Iran during the 2000s.

In August 2016, North Korea’s KCTV aired video of Nodong missiles being fired from their respective mobile launchers near Hwangju and roughly 40-km south of Pyongyang. The missiles resembled those seen in the 2010 parade, with the Ghadr-like nosecone design. It is reasonable to conclude from these occasions that engineers from the two countries shared at least some nosecone-design information. However, a closer examination of 2016 launches reveals definitively that the similarities between the North Korea’s new Nodong missile and Iran’s Ghadr do not extend beyond the shape of their nosecones. Indeed, the external dimensions and features, other than the similar nosecones, are quite different. Figure 1 illustrates two prominent differences. The Ghadr’s rear fins are much smaller than those found on either version of the Nodong, and the Ghadr’s airframe and propellant tanks have been lengthened to carry more fuel. The original and new Nodong airframes appear to be the same, only the nosecone has been altered.

Iran’s Ghadr missile body is longer than either the original Nodong or Shahab-3. North Korea’s latest version of the Nodong, tested in 2016, incorporates a nosecone very similar to that on the Ghadr, yet it retains the shorter airframe used on the original Nodong design. Note also, the Ghadr has smaller fins mounted on the tail, relative to those seen on either Nodong version. It is unclear if the new Nodong airframe is constructed with an aluminium alloy, like the Ghadr, or with steel, like the original version of the Nodong.

It is interesting to note that the minimum distance between North Korean territory and Tokyo is just over 1,000 km. If the new Nodong is a clone of the original version, but with a new nosecone and smaller warhead, it has a maximum range of about 1,000 km, when launched with a 700 kg payload. To ensure pre-launch survival, Pyongyang would presumably want to deploy and fire the missile from deep within its territory, which requires a reach of 1,200 km or greater. In other words, North Korea has great incentive to extend the Nodong’s range, yet it does not appear to have adopted the Ghadr’s design.

In September 2016, North Korea fired three missiles, again from mobile launchers situated on a highway near Hwangju. The missiles travelled about 1,000 km before crashing into the East Sea, though within Japan’s air defense identification zone. Most observers initially suspected that the missiles launched were Nodongs because the longest-range alternative is the Scud-D, which has a range limit of just over 700 km. Pyongyang reportedly developed a Scud-D missile with a range of just over 700 km. Video of the launch appear to show a Scud-B warhead placed on a Nodong airframe, with a short flange connecting the two. An Iranian missile with a similar nosecone and airframe configuration was seen in Tehran a dozen years ago, leading one analyst to conclude that North Korea and Iran collaborated on the design. But again, closer scrutiny of the missiles and an analysis of the trajectories expose a different story (see Figure 2). The missiles were extended range Scud missiles, or Scud-ER, having a diameter of 1.0 m, and an overall length of about 12.6 m. The diameter and length of the Scud-B and –C are 0.88m and 10.944 m, respectively. The Scud-D has the same diameter as the –B and –C versions, though its length is 12.4 m. The Scud-ER is very different than the Shahab-3—with the so-called NRV nosecone—seen in Iran in 2004.

Iran’s Shahab-3 missile is outfitted with a Scud-B warhead. The warhead has a base diameter of 0.88 m, and is mated to the 1.25-m diameter airframe by a skirt-like flange section. The North Korean Scud-ER has a 1.0-m diameter airframe, and thus a tighter skirt-like flange. Iran is not known to have flown a Scud-ER missile, though one could appear in the future.

Iran, unlike North Korea, has pursued both liquid- and solid-fueled missiles since its dual-track approach to missile acquisition started in the early 1980s. Iran now possesses a family of short-range missiles, including the Fateh-110 and Fateh-313, which were developed over a period of at least two dozen years. Tehran is also developing a two-stage, medium-range missile, the Sajjil. The Sajjil program likely began in or about the year 2000. The first ground tests of the 13.5-metric ton, stage-one motor reportedly occurred in 2005. The Sajjil, though dubbed Ashoura at the time, underwent its initial flight test, which failed, in 2007; a successful test occurred in 2008, though only the first stage was active. Flight-testing continued until 2011, when launches abruptly stopped before the missile was fully developed. The reasons behind the halt in testing remain unclear.

North Korea, on the other hand, has limited experience developing and producing solid-fueled missiles. The largest solid-rocket motor manufactured by Pyongyang before 2016 weighs only one-metric ton and propels the KN-02 missile, a copy of the Soviet Tochka. The KN-02 has a maximum range of about 100 km, though versions of the original Tochka can reach beyond 120 km. In April 2016, North Korea conducted a ground test of a large solid-fueled motor and test launched at least two solid-propellant missiles from an underwater platform, likely its GORAE-class submarine. The KN-11, submarine-launched ballistic missile (SLBM) is a two-stage system. Each stage consists of a solid-propellant rocket motor substantially larger than any tested by the North before, excepting the April ground test. Learning to manufacture large-diameter, solid-fueled rocket motors typically requires decades of effort, as illustrated by the history of Iran’s program, as well as others. Yet, with no public reporting of large solid-motor development in North Korea prior to 2016, the KN-11 emerged suddenly and flies successfully to a distance of 500-600 km.

The sudden, unexpected appearance of the solid-fueled KN-11 led to speculation that Iran may have aided Pyongyang’s efforts to design, develop and manufacture large-rocket motors, or perhaps supplied the motors to North Korea outright. Tal Inbar, an Israeli analyst who closely follows the missile and space programs of Iran and North Korea, asserts that the KN-11’s 1.25 m diameter motors are the same as those found on Iran’s Sajjil missile. He further states that the KN-11 is built using a propellant that is “identical to the technology developed in Iran.”

The exact dimensions of the KN-11 are difficult to extract from the photos and videos released by Pyongyang. However, the relative dimensions are readily derived from the photos. Based on the performance of the KN-11, the missile’s diameter is likely between 1.2 and 1.5 m. The length of the KN-11’s first stage is then between 3.5 and 4.4 m; the second stage is between 1.5 and 1.9 m long. The Sajjil has a diameter of 1.25 m, with first- and second-stage lengths of 9 m and 5.6 m, respectively. The relative dimensions—the ratio of the length to the diameter—of the KN-11 stages are clearly different from those of Iran’s Sajjil. Further, the external features of the Sajjil reveal stage separation apparatus that are not visible on the KN-11, indicating differing design philosophies. Both missiles do use jet vanes for steering during the boost phase of flight, though the vanes themselves are slightly different. Finally, it is possible that the propellant formulation used by the KN-11 and Sajjil are very similar, though this should be expected. Most solid-fueled rockets use a variation of what is called a composite propellant formulation, so it would be surprising if the KN-11 and Sajjil differed significantly.

Iran’s two-stage, medium-range Sajjil missile employs two solid-propellant motors, as does the North Korean KN-11 submarine-launch ballistic missile, or SLBM. The Sajjil’s diameter is 1.25 m, while the KN-11 is believed to be about 1.5 m in diameter, though it could be less according to some analysts.  Regardless of the KN-11’s absolute dimensions, it is obvious that relative dimensions, most notably the ratio of the length to diameter of each stage, are substantially dissimilar to the length-to-diameter ratios of the Iranian Sajjil. The KN-11 does not employ rocket motors similar to those found on the Sajjil.

Lastly, many observers note the similarity between the satellite-launch vehicles, or SLVs, used by Iran and North Korea, and speculate that the two countries are collaborating on large rocket development. It is true that the Taepodong-1 SLV launched by Pyongyang in 1998, and Iran’s Safir SLV have first stages powered by the Nodong engine. It is also true that the first stage of the North Korea’s Unha SLV and Iran’s Simorgh SLV use a cluster of four-Nodong engines, and the upper-most stages of both SLVs are propelled by the steering engines originally employed by the now-retired Soviet R-27 SLBM. But a closer look at the SLVs reveals differences inconsistent with close cooperation between Pyongyang and Tehran.

The most obvious difference is that the two North Korean SLVs operate using three stages, whereas Iran’s two SLVs are two-stage systems. This likely reflects the more conservative design approach taken by North Korea, where until late-2015, engineers had limited experience developing new missiles and launchers. The paucity of missile-development testing, and learned knowledge accrued from testing activities, likely led North Korean specialists to over design the Taepodong-1 and Unha launchers to ensure each succeeded in lofting a specified payload to a certain orbit. There may, however, be other reasons behind the decision to employ three rather than two stages. Regardless, the divergent design philosophies argue against deep cooperation.

The decision to power the first stage of the Taepodong-1 and Safir with a Nodong engine was very likely driven by that lack of viable alternatives. Neither North Korea nor Iran have the experience and wherewithal to design and develop a powerful liquid-propellant engine indigenously, so therefore each had to rely on the engines available for use. The roughly 27-ton thrust Nodong engine was a logical engineering choice for small SLVs. The alternative would have been to cluster two or four Scud engines together to form the power unit for a first stage, though such configurations would have required a new and larger diameter airframe.

When North Korea, and later Iran, began the design of the Unha and Simorgh SLVs, respectively, the most powerful engine available was still that associated with the Nodong missile. Again, the lack of viable alternatives drove both countries to design a first stage powered by a cluster of four Nodong engines, with each engine relying on its own turbo-pump assembly to deliver propellant to the combustion chamber. It was, and remains today, beyond the technical capacity of either country to design, develop and build a larger pump capable of simultaneously feeding all four engines.

The Unha and Simorgh both employ four small engines to steer the first stage. Arguably, this feature suggests some level of design cooperation. However, beyond the use of four small engines, the two designs diverge. Each steering engine of the Unha receives its propellant from the turbo-pump of an adjacent Nodong engine by tapping into the fuel and oxidizer lines of the nearby engine and diverting a small portion of the flow. In other words, each Nodong turbo-pump feeds a Nodong engine and a steering engine. Iranian engineers, on the other hand, adopted a different design for the Simorgh. All four steering engines of the Simorgh are supplied propellant by a single Scud-engine turbo-pump assembly placed at the center of the Nodong engine cluster. The Iranian design delivers up to 13 tons of additional thrust compared to the Unha.

Covert Development of Long-Range Rocket Booster

In November 2013, Bill Gertz reported that Iranian missile technicians had visited North Korea in secret to jointly develop a new “80-ton rocket booster” for long-range missiles or SLVs. Two months later the US Treasury Department issued sanctions against several persons and entities, including the Shahid Hemmat Industrial Group, or SHIG, the firm responsible for development of Iran’s liquid-fueled missiles, and two individuals, Seyed Mirahmad Nooshin and Sayyed Medhi Farahi. The Treasury Department notice specifically mentions that Nooshin and Farahi had travelled to North Korea, and that the two “have been critical to the development of the 80-ton rocket booster.”

It is unclear if the 80-ton rocket booster specified in the media and Treasury Department reports describes the overall size of multi-stage booster rocket, or just that of the single stage of a larger SLV. In either case, the description might apply to the Unha or Simorgh SLV. The overall mass of the Unha SLV is about 87 metric tons, and the Simorgh SLV is roughly 85 metric tons. The first-stage masses of the Unha and Simorgh are approximately 70 and 76 metric tons, respectively. It is within reason to conclude that the reports apply to either the first stages of the two SLVs, or the multi-stage configuration of the Unha or Simorgh. It would not be surprising if Iran and North Korea held discussions about their respective space programs, and the general technical details of their SLVs. Iran has, in the past, presented technical papers about its space program and SLVs at international meetings, so sharing general design and performance information is not unprecedented. However, as discussed above, the significant design differences of the Unha and Simorgh first stages indicate that the two countries are not co-developing rockets and that there may be limits to just how much technical information Tehran and Pyongyang share, or employ.

The recent ground test of an 80-ton thrust engine by North Korea raises additional questions, and might be the focus of the Gertz article and the Treasury Department notice. The engine tested is likely a version of China’s YF-20 design, of which there are several varieties. The YF-20 engine uses high-energy propellants, similar to the combination employed by North Korea’s Musudan, or KN-10, intermediate-range ballistic missile, and generates roughly 80 tons of thrust. North Korea announced that the engine tested produces 80 tons of thrust, and was for lifting satellites into geosynchronous orbit. The Treasury notice specifically mentioned an 80-ton booster; it did not refer to an engine. Nonetheless, perhaps the intelligence reporting that informed the sanctions lacked the necessary detail to distinguish between a rocket and engine, or the authors of the notice did not appreciate the differences. If the report was referring to the amount of thrust produced by the booster’s engine, then it is possible that Iran and North Korea are working together on a new rocket. If so, the booster rocket itself would necessarily weigh fewer than about 65 metric tons, and even less if it is the first stage of a larger system.


Evidence available in the public domain indicates that North Korea has, for several decades, supplied Iran with complete missiles and critical components for larger missiles and SLVs. The transactional relationship very likely results in information exchanges, including the sharing of flight-test data, possibly more. But, the evidence to date is inconsistent with design collaboration or joint-development efforts between the two countries. This could change, especially as North Korea presents new capabilities. Given Pyongyang’s history of shipping missile components to Iran and others, and its willingness to support the secret construction of a nuclear reactor in Syria, it is possible, if not likely, that North Korea would ship advanced engines to Tehran, including the engine most recently tested. Therefore, the international community must remain vigilant and closely monitor the missile and SLV activities in both countries. Signs of deeper collaboration between Iran and North Korea must also be closely monitored, since deeper cooperation has the potential to accelerate the development efforts on both parties. 

Hyten: Reaction to North’s ICBM is priority

Stratcom commander nominee discusses need to be prepared

It is a top priority to address the possibility of North Korea striking the United States with an intercontinental ballistic missile, said the incoming commander of the U.S. Strategic Command (Stratcom), Air Force Gen. John E. Hyten, calling this his “biggest concern.”

When asked during a confirmation hearing at the Senate Armed Services Committee on Tuesday if North Korea is developing the ability to strike the United States, Hyten, who has served as commander of the U.S. Air Force Space Command since 2014, responded, “I believe that they are developing that capability.”

He added, “There was news of a test of a new, very large rocket engine, a rocket engine that [North Korea] said would be capable of going to the geosynchronous orbit in space. If it has that capability, it has the capability to reach the United States. So I’m very concerned about that.”

North Korea on Tuesday announced it had successfully ground tested a new high-powered engine designed for a geostationary satellite at Sohae Space Center in North Pyongan Province, seen as its latest move to enhance its ballistic missile technology.

Should this prove to be true, the North will have come closer to being able to mounta miniaturized nuclear warhead and deliver it on an intercontinental ballistic missile, or ICBM, that could potentially reach the United States.

Hyten went on to name Russia as “the most dangerous threat,” followed by China as a close second.

“But the most likely threats and the most concerning are North Korea and then Iran,” he added, “because North Korea is very unpredictable.”

While North Korea’s nuclear and missile programs may still be behind other countries, he pointed out, “When we started building those capabilities, we had failure after failure... but we ended up getting there.”

He continued, “Once they have those capabilities, what are they going to do with them? That’s my biggest concern, and if I am confirmed as commander of Stratcom, that will be at the top of my list to figure out how we best respond to that threat at hand.”

When asked how soon it would be until North Korea’s ICBM could strike mainland United States, Hyten responded that while he could not put a date on it, this capability was “not a matter of if but when,” adding, “We need to start preparing for that.”

As for the deployment of the U.S.-led Terminal High Altitude Area Defense, or Thaad, system in South Korea, Hyten said, “From my military perspective, the Thaad missile battery does not change the strategic deterrence equation because … it doesn’t impact the ability of the strategic force to effectively operate.”

Ten years after, the threat of another conflict is real
By Nicholas Blanford

This month marks the tenth anniversary of the 33-day conflict between Hizbollah and Israel. The 2006 war caused massive physical destruction in Lebanon, and led to 1,109 Lebanese deaths, the vast majority of whom were civilians, and an estimated 1 million displaced.

Hizbollah’s rocket attacks on Israel, which brought normal life to a halt in the Jewish state for more than a month, killed 43 Israeli civilians and 12 Israel Defence Force soldiers. These numbers could pale in comparison, however, to those of another round, given Hizbollah’s much improved and increased military capabilities and an increasingly uncertain regional security environment.

Over the last decade, a balance of terror between Hizbollah and Israel has helped preserve the fragile peace. Neither side wants another costly confrontation, and both are aware of the risks of miscalculation. However, mutual deterrence is inherently unstable, and the chances of one side misreading the actions of the other are much higher now due to the spillover of the conflict in Syria, where Hizbollah is involved militarily. Hizbollah’s presence in the Israel-occupied Golan Heights is a major complicating factor that has put Israel on edge.

Iran North Korea ""Nuclear Bomb""!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Israel vs. Iran...........................It's going to Happen thanks to Obama!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
World Trade Grinds Lower, Hits 2014 Levels
By Wolf Richter

Volatile and ugly.

World trade in merchandise is a reflection of the global goods-producing economy. And it just can’t catch a break.

The CPB Netherlands Bureau for Economic Policy Analysis, a division of the Ministry of Economic Affairs, just released the preliminary data of its Merchandise World Trade Monitor for July. The index fell 1.1% from June to 113.4, the lowest since May 2015 – a level it had first reached on the way up it in September 2014.

The chart shows that merchandise world trade isn’t falling off a cliff, as it had done during the financial crisis, when global supply chains suddenly froze up. But it’s on a slow volatile grind lower. And compared to the fanciful growth after the Financial Crisis, it looks outright dismal:


Container Freight Index...................Global Trade "IS" Collapsing!!!!!!!!!!!!!!!!!!!!!! 

State Street: "Move Over Zero Hedge, There Is A New Bear In Town"
By Mr. Risk - State Street Global Markets 

Thanks for nothing, central banks!

If central banks provided the prototypical inflection point, risk assets should get destroyed next week.

Feast your eyes on a compendium of volatility charts. The beast wants out.

Keys to watch: DXY, EURAUD, and 10-year yields. Move over ZEROHEDGE. There is a new BEAR in town,

* * *

Ahead of the BOJ and Fed meetings, volumes slowed to a trickle, traders got back to flat, and algos reached for the offswitch. Now that event risk is in the rear view mirror, it is time to vote. Buy-the-dip or ‘‘sell everything?’’ If classic market reflexes are in play, a market meltdown following the passing of event risks is by far the more likely outcome. That US equities launched higher is nothing, because it  always does that on Fed day. The obligatory central bank forensic is a good place to begin.

Expectations as measured by overnight volatility ahead of the BOJ were the third highest in 3-years. Notably, 7 out of the 10 highest readings have occurred in 2016, which says something about the growing perception about policy failure. Expanding monetary base has not delivered higher inflation expectations or a weaker currency. Just about every 2016 meeting USDJPY sunk like the proverbial stone.

The ‘‘monetary assessment’’ conducted by the BOJ was an admission that QQE was unsustainable, and needed to be tweaked. Plan B is ‘‘QQE with yield curve control.’’ No, that is not a new shampoo. Here is the stripped down ghetto-economist version. 

I Love the SMELL of ""Burning ASSETS"" in the Morning!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 

China’s toxic debt pile may be 10 times official estimates: Fitch
By Katy Barnato   

Toxic loans in the Chinese financial system could be 10 times as high as official estimates suggest, Fitch Ratings has warned.

The international ratings agency said in a report on Thursday that, as a proportion of China's total loan pool, non-performing loans (NPLs) could be as high as 15-21 percent. By comparison, official data put the NPL ratio for commercial banks at 1.8 percent at the end of June 2016.

"There seems a high likelihood that banks' NPL ratios will continue rising over the medium term, in light of this discrepancy. There are already signs of stress, most obviously in the increased frequency with which banks are writing off or offloading loans, such as those to asset-management companies," the report said.

Solving China's bad loan problem would result in a capital shortfall of 7.4 trillion-13.6 trillion yuan ($1.1-2.1 trillion), equivalent to around 11-20 percent of China's economy, Fitch said. 

Friday Threat - China's $2.1 Trillion Debt Bomb Is Ticking Away
By Philip Davis


China's bad debt level soars to $2.1Tn.

Debt to GDP now tied with Japan at 250%.

China is responsible for 1/2 of total economic growth.

Yes, China again.

Don't blame me, blame Ambrose Pritchard, who decided today would be a good day to talk about China's continuing bad debt crisis, with non-performing loans now approaching 20% of all loans and that number would be much WORSE if it were not for the fact that overall loan growth jumped 25% this year, from $8Tn to over $10Tn. That made the $2.1Tn in bad loans shrink back from 25% of $8Tn to "just" 20% of $10Tn - see, problem solved!

"The longer debt grows, the greater the risk of asset quality and liquidity shocks to the banking system," said Fitch. "Capital shortfalls are currently 11% to 20% of GDP, but this threatens to hit 33% in a worst case scenario by the end of 2018. Defaults in China could lead to mutual credit guarantees in the background pulling other firms into distress. A large increase in real defaults risks triggering a chain of bankruptcies that magnifies the potential for financial instability," it said.

Steel merger casts bad light on China’s economic reform
By Shirley Yam

If the merger of China’s two largest steel mills is a showcase of President Xi Jinping’s economic reform, it is showing a bad face.

It is a classic case of the good boy bailing out the bad one that would do little for the reduction of excessive capacity while hurting minority shareholders and discouraging the management.

Those who talked about synergy and streamlining must realise that the marriage of Baosteel Group and Wuhan Iron & Steel Co (Wisco) is not between No 1 and No 2, but the merger of a Ferrari with a made-in-China Volkswagen.

The difference between the gross profit of 631 yuan per tonne of Baosteel’s listed arm and the 140-yuan loss of its Wuhan counterpart is a result of product mix, technology and physical location.

There may be a chance if factories can be scrapped. Yet the proposed corporate structure of the merged entity gives little hope.

Under the proposal, Wisco will not be merged into Baosteel. Instead, it will become a standalone subsidiary of the new controlling empire. The same goes for its listed arm, Wuhan Steel, which comes under listed unit Baoshan Iron & Steel.

That means the Wuhan camp would get to preserve its autonomy and establishment at all levels. The addition of two new layers pointed to more red tape, power play and inefficiency, not the closure of excess capacity.

The Bank For International Settlements Warns That A Major Debt Meltdown In China Is Imminent
By Michael Snyder

The pinnacle of the global financial system is warning that conditions are right for a “full-blown banking crisis” in China.  Since the last financial crisis, there has been a credit boom in China that is really unprecedented in world history.  At this point the total value of all outstanding loans in China has hit a grand total of more than 28 trillion dollars.  That is essentially equivalent to the commercial banking systems of the United States and Japan combined.  While it is true that government debt is under control in China, corporate debt is now 171 percent of GDP, and it is only a matter of time before that debt bubble horribly bursts.  The situation in China has already grown so dire that the Bank for International Settlements is sounding the alarm…

""A key gauge of credit vulnerability is now three times over the danger threshold and has continued to deteriorate, despite pledges by Chinese premier Li Keqiang to wean the economy off debt-driven growth before it is too late. 

BANKING Crisis II...............................Coming at YOU!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 

FDIC Flags Deutsche Bank's Wild Leverage Ratio—But It's Not the Only One

Sept. 22, 2016 (EIRNS)—Deutsche Bank was fingered again as the riskiest bank in the world, in data released Tuesday by the Federal Deposit Insurance Corporation (FDIC). According to the FDIC's calculation (using the International Financial Reporting Standards or IFRS), Deutsche Bank's leverage ratio—a lender's equity capital measured against its assets—is the lowest of the rest of the world's "Global Systemically Important Banks" (G-SIB's). The FDIC includes the amount of derivatives which banks have on their books in its calculations of a leverage ratio, which shows how much equity capital a lender has against assets such as loans.

A low ratio means that a bank has less of a cushion if a crisis arises. DB's leverage was estimated at a miniscule 2.68% as of June 30. That means DB has leveraged its capital 37:1 with debt, a slightly worse leverage position than that of Lehman Brothers in mid-2008 before its bankruptcy.

The risks of Deutsche "Bunk," as Lyndon LaRouche has dubbed it, were the subject of a closed session of German Social Democratic lawmakers on Tuesday, Bloomberg reported today, citing reports from two unnamed "people familiar with the matter." Few details were reported, other than that partipants discussed the coming U.S. Department of Justice fine and the bank's financial reserves. Bloomberg contrasted that discussion, however, with the public silence maintained by the Merkel government on this looming blowout; Bloomberg's sources say the topic was not raised at a closed-door session of the German parliament's Finance Committee with Finance Minister Wolfgang Schaeuble the same day.

DB may be the worst—and the IMF has called it the most dangerous spreader of bank risk in the world when it does blow up. But it is not the only "G-SIB" without much "cushion," FDIC figures showed. Banco Santander of Spain, France's BNP Paribas and Société Générale, Sweden's Nordea Bank, Switzerland's UBS, and Italy's UniCredit were all under 4%—i.e., debt-leveraged by more than 25:1—and Goldman Sachs was only a hair over, at 4.14%.

FDIC Vice Chairman Thomas Hoenig warned, in releasing the FDIC'S Semi-Annual Update of the Global Capital Index, that "the degree of leverage within the global financial system increased in the first half of 2016," as a whole. He made clear that U.S. big banks are included in that increased leverage—i.e., speculation. 

German Politicians Are Getting Nervous About Deutsche Bank

Just a few short days after Germany's premier financial publication Handelsblatt dared to utter the "n"-word, when it said that in the aftermath of last week's striking $14 billion DOJ settlement proposal, "some have even raised the possibility of a government bailout of Germany’s largest bank, which would be a defining event and a symbolic blow to the image of Europe’s largest economy", German lawmakers are finally starting to get nervous.

According to Bloomberg, Deutsche Bank’s suddenly troubling finances, impacted by the bank's low profitability courtesy of the ECB's NIRP policy as well as mounting legal costs courtesy of years of legal violations, "are raising concern among German politicians." At a closed session of Social Democratic finance lawmakers on Tuesday, Deutsche Bank’s woes came up alongside a debate over Basel financial rules. Participants discussed the U.S. fine and the financial reserves at Deutsche Bank’s disposal if it had to cover the full amount. 

Deutsche Bank Woes Sparks Concern Among German Lawmakers
By Birgit Jennen

Deutsche Bank AG’s finances, weakened by low profitability and mounting legal costs, are raising concern among German politicians after the U.S. sought $14 billion to settle claims related to the sale of mortgage-backed securities.

At a closed session of Social Democratic finance lawmakers this week, Deutsche Bank’s woes came up alongside a debate over Basel financial rules, according to two people familiar with the matter. Participants discussed the U.S. fine and the financial reserves at Deutsche Bank’s disposal if it had to cover the full amount, according to the people, who asked not to be identified because the meeting on Tuesday was private.

While the participants -- members of the junior party in Chancellor Angela Merkel’s government -- didn’t reach any conclusions on the likely outcome, the discussion signals that the risks have the attention of Germany’s political establishment. The German Finance Ministry last week called on the U.S. to ensure a “fair outcome” for Deutsche Bank, citing cases against other banks where the government settled for reduced fines. A spokesman for Deutsche Bank declined to comment.

Pressure on Germany’s biggest lender has increased since German Finance Minister Wolfgang Schaeuble told Bloomberg Television on Feb. 9 that he has “no concerns about Deutsche Bank.”

Deutsche Bank was already ranked among the worst-capitalized lenders in European stress tests before U.S. authorities demanded $14 billion during initial talks to settle a probe into how it handled mortgage securities during the 2008 financial crisis. The announcement led the bank’s riskiest bonds to plunge.

“It would certainly help Deutsche Bank in their negotiations to get some political involvement,” said Dieter Hein, an analyst who follows German and Swiss financial firms at Fairesearch-Alphavalue in Kronberg near Frankfurt. “BNP Paribas for example was also well advised to get some political help with litigation in the past.”

Italian Banks

Europe Is Facing a Fiscal Meltdown
By The Foundation for Economic Education

Europe Is Facing a Fiscal Meltdown

When I tell journalists and politicians that the European fiscal situation is worse today than it was immediately prior to the crisis, they don’t believe me. What about all the spending cuts, they ask? What about the draconian austerity? And the Troika-imposed fiscal restraint?

I tell them it’s mostly been a mirage. It turns out that “austerity” in Europe is simply another way of saying massive tax increases. National governments have boosted tax burdens substantially, but there hasn’t been much spending restraint.

This is a topic I spoke about earlier today at a conference in Prague, which was hosted by the European Conservatives and Reformers bloc of the European Parliament.

My panel’s topic was “Current Challenges to the Transatlantic Partnership” and I focused on economic stagnation and fiscal crisis. 

Draghi, Resign NOW because YOUR going to be BLAMED for the Collapse of the European Banking System!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Tuesday, September 20, 2016

Obamacare "IS" going to TEAR a NEW ASSHOLE into the U.S. Economy in 2017 and I'm going to Enjoy the HELL Out Reminding every ""LAB RAT"" in America that it WAS ""LIBERALS"" that SCREWED YOU with the WORSE ""Big Government"" Idea in American HISTORY!!!!!!!!!!!!!!!!!!!!!!!!! 

Democrats resurrect public option battle for ObamaCare

One economist says the government-run health insurer would help reduce costs; Rich Edson has the details for 'Special Report' 

ObamaCare's Death Spiral Has Begun
Investor's Business Daily

Will the last one out of ObamaCare please turn off the lights?

That's a question that health insurers and individual Americans both may want to start pondering. Recent events such as the departure of the insurance company Aetna from the vast majority of state exchanges show that ObamaCare is entering the death spiral that experts have long predicted. Insurers are now heading for the exit, fast — and consumers won't be far behind them.

In the wake of massive losses, insurance companies are instinctively engaging their fight-or-flight instincts. The two big insurers remaining on state exchanges — Anthem Blue Cross and Blue Shield, and Cigna — are still evaluating the risks of a collapsing system, trying to determine if they should abandon the ObamaCare exchanges altogether or cope with the realities of increasingly high-cost care and coverage.

ObamaCare's tailspin is the manifestation of mounting tensions between health insurance companies, their customers, and the federal health care bureaucracy. The inevitable losers in this fight? Those who were promised reliable, affordable coverage for their health needs.

Premiums are widely projected to skyrocket in 2017, but many Americans have already seen firsthand how ObamaCare has further entangled them and their doctors in a maze of red tape.

In recent weeks, insurers in 43 states proposed similar hikes, with the average rate increase falling in the double digits for individual plans, according to data collected on the Rate Review tool at  For example, Blue Cross Blue Shield of Texas, facing a massive $770 million loss for its ObamaCare exchange plans, requested a 58% premium hike for over 600,000 customers.

In New Mexico, Blue Cross Blue Shield has requested an 82% rate increase for an individual HMO plan sold on the exchange. But nothing comes close to the increase requested by insurer Phoenix Health Plans of Arizona: a whopping 122.8% average rate hike for all of its plans.

Recent analysis shows that the average rate increase requested by insurers across the country is 24%. This is a stunning increase since initial rate requests were filed this summer. At that time, the Kaiser Family Foundation found that rate hikes for the "most common plan choices" in 14 major cities averaged about 10%. But insurers have adjusted their expectations, and their rate requests, since then. 

Shaky Obamacare Market Adds to 'Death Spiral' Fears
By Tatiana Darie

Failing insurers. Rising premiums. Financial losses. The deteriorating Obamacare market that the health insurance industry feared is here.

As concerns about the survival of the Affordable Care Act’s markets intensify, the role of nonprofit “co-op” health insurers -- meant to broaden choices under the law -- has gained prominence. Most of the original 23 co-ops have failed, dumping more than 800,000 members back onto the ACA markets over the last two years.

Many of those thousands of people were sicker and more expensive than the remaining insurers expected -- and they’re hurting results. With more of the nonprofits on the brink of folding, the situation for the remaining providers looks dire. Anthem Inc., for example, is facing an estimated $300 million in losses on its exchange business for individual plans this year, after turning a profit in 2014 and almost breaking even on the program in 2015, according to the company.

“These co-ops have attracted, we think, disproportionately high health-care utilizers,” Gary Taylor, an analyst with JPMorgan who follows the industry, said in a telephone interview. Their former members “are now enrolled in these for-profit health plans. That’s been a factor driving the deterioration in their profitability.”

‘Death Spiral’

Large insurers including Aetna Inc. and UnitedHealth Group Inc. have already pulled back from Obamacare’s markets, citing losses. Anthem has said it remains committed to the program.

Political Calculations
September 15, 2016
ObamaCare Driving Up Cost of Health Insurance

The Consumer Expenditure Survey is a joint project of the U.S. Bureau of Labor Statistics and the U.S. Census Bureau, which documents the amount of money that Americans spend each year on everything from Shelter, which is the biggest annual expenditure for most Americans, to Floor Coverings, which represents the smallest annual expenditure tracked and reported by the survey's data collectors.

The chart below shows the average annual expenditures for the major categories per "consumer unit" (which is similar to a "household"), as reported in the Consumer Expenditure Survey for the years from 1984 through the just reported data for 2015. 

Attention ""LAB RATS"" of The American MIDDLE Class..................Obama, The FED and the ""LIBERALS"" in the House of PAIN(Congress) have FUCKED YOU Like NEVER Before!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! 

The RECESSION Coming at YOU Will make 2008 look like it was nothing more than a ""BAD Weekend in Vegas""!!!!!!!!!!!!!!!!!!!!!!!!!! 

Those of YOU over the AGE of 60 won't have enough ""LIVING"" Left to EVER Recover the WEALTH that's about to be Destroyed when this ""PONZI"" Scheme of the Central Banksters Collapses!!!!!!!!!!!!!!!!!!!!!!!!!!! 

Image result for rotflmao

*****NY Fed Slashes GDP Forecast, Now Sees Weakest Growth Since Financial Crisis

Just in case the Fed needed an "out" to its "hawkishly holdish" December rate hike, it got it moments ago when the NY Fed slashed its Q3 and Q4 GDP estimates, and now expects just 2.3% annualized growth in Q3 and 1.2% Q4, down 0.5% each from the previous forecasts of 2.8% and 1.7%.

In its latest report, the NY Fed explained that "negative news since the report was last published two weeks ago pushed the Nowcast down 0.5 percentage point for both Q3 and Q4.  The largest negative contributions over the last two weeks came from manufacturing, retail sales, and housing and construction data." So, pretty much everything.

As usual, the forecast was overly optimistic, and as a result has been sharply dragged down for both Q3... 

69 Percent of Americans Have Almost No Savings

When it comes to saving money, an alarming number of Americans like to live on the edge and flirt with danger.

According to a new survey from GOBankingRates, 69 percent of Americans have little to no money in savings — in fact, less than $1,000.

Having no financial cushion is risky. A few unexpected expenses have the potential to spell financial ruin.

The GOBankingRates study, which is based on a survey of more than 7,000 people, also found that many Americans have embarrassingly little money saved, regardless of what they’re earning. New York-based certified financial planner Michael Hardy tells GOBankingRates:

“It doesn’t matter if they are making $30,000 per year or $300,000 — people don’t seem to know how to spend less than they make.”

One of the primary reasons Americans are behind on saving is because they are living beyond their means. After all, keeping up with the Joneses often comes with a heavy price tag, according to GOBankingRates. 

69% of Americans Have Less Than $1,000 in Savings

Saving money is still a struggle for many Americans, finds a new survey.
By Cameron Huddleston

Americans are falling short when it comes saving money — specifically, setting aside money in savings accounts — to create a financial cushion. In fact, they’ve gone from bad to worse, according to’s latest survey findings on savings amounts.

In 2015, we asked more than 5,000 adults how much they had saved in a savings account. The results were startling: 62 percent said they have less than $1,000 in savings.

Recently, GOBankingRates asked the question again, this time to more than 7,000 people to see if Americans’ saving rates have improved in the last year or so. But the results are even more surprising — the percentage of Americans with less than $1,000 in savings has jumped to 69 percent.

New Survey Finds More Americans Are Behind on Savings

Not only has the percentage of people with little money in savings accounts grown, but so has the percentage with absolutely nothing in a savings account. In last year’s survey, 28 percent of respondents said they have $0 saved. Now, 34 percent say they have no savings.

“I am not at all surprised that one-third of Americans have nothing at all in their savings account,” said Michael Hardy, a certified financial planner with Mollot & Hardy in Amherst, N.Y. “Most people have not saved nearly enough in their emergency or reserve account.”

One of the big reasons people aren’t saving more is likely because they are living beyond their means. “It doesn’t matter if they are making $30,000 per year or $300,000 — people don’t seem to know how to spend less than they make,” said Hardy.

Plus, credit cards and other cashless payment options such as Apple Pay have made it even easier to spend, added Brandon Hayes, a CFP and vice president of oXYGen Financial.

“Our issue is we’re spending before we even save and then never look back,” he said. “With a cashless society, it’s tough to appreciate a dollar when you never see one.”

Based on the survey findings, though, there are some Americans who appear to be making saving money a priority. Of those surveyed, 15 percent have $10,000 more in a savings account, versus 14 percent in 2015. And although older Americans are more likely to have bigger savings account balances, there are respondents in all age groups with thousands in savings.

UN fears third leg of the global financial crisis, with epic debt defaults 
By Ambrose Evans-Pritchard

The third leg of the world's intractable depression is yet to come. If trade economists at the United Nations are right, the next traumatic episode may entail the greatest debt jubilee in history.

It may also prove to be the definitive crisis of globalized capitalism, the demise of the liberal free-market orthodoxies promoted for almost forty years by the Bretton Woods institutions, the OECD, and the Davos fraternity.

"Alarm bells have been ringing over the explosion of corporate debt levels in emerging economies, which now exceed $25 trillion. Damaging deflationary spirals cannot be ruled out," said the annual report of the UN Conference on Trade and Development (UNCTAD).

We know already that the poisonous side-effect of zero rates and quantitative easing in the US, Europe, and Japan was to flood developing nations with cheap credit, upsetting their internal chemistry and drawing them into a snare. What is less understood is just how destructive this has been.

Much of the money was wasted, skewed towards "highly cyclical and rent-based sectors of limited strategic importance for catching up," it said.

Worse yet, these countries have imported the deformities of western finance before they are ready to cope with the consequences. This has undermined what UNCTAD calls the "profit-investment nexus" that ultimately drives growth and prosperity.

The extraordinary result is that some countries are slipping backwards, victims of "premature deindustrialisation". Many of them have fallen further behind the rich world than they were in 1980 despite opening up their economies and following the global policy script diligently.

The middle income trap closed in on Latin America and the non-oil states of the Middle East a long time ago, but now it is beginning to close in such countries as Malaysia and Thailand, and in some respects China. "The benefits of a rushed integration into international financial markets post-2008 are fast evaporating," it said.

Yet the suffocating liabilities built up over the QE years remain. UNCTAD says corporate debt in emerging markets has risen from 57pc to 104pc of GDP since the end of 2008, and much of this may have to written off unless there is a world policy revolution.

"If the global economy were to slow down more sharply, a significant share of developing-country debt incurred since 2008 could become unpayable and exert considerable pressure on the financial system," it said.

"There remains a risk of deflationary spirals in which capital flight, currency devaluations and collapsing asset prices would stymie growth and shrink government revenues. As capital begins to flow out, there is now a real danger of entering a third phase of the financial crisis which began in the US housing market in late 2007 before spreading to the European bond market," it said.

Get ready for the mother of all stock market corrections once central banks cease their money printing
By Jeremy Warner

Global stock and bond markets have been all over the place of late. Rarely have investors been so lacking in conviction. Confusion as to future direction reigns, and with good reason after the spectacular returns of recent years.

For how much longer can stock markets keep delivering? Is there another recession on the way, or to the contrary, is growth likely to surprise positively, underpinning current valuations? Economic turning points are never easy to spot, but right now it’s proving harder than ever.

The immediate cause of all this uncertainty is, however, fairly obvious. It’s the US Federal Reserve again, and quite how far it is prepared to go with the present tightening cycle. Few expect policy makers to act at this week’s meeting of the Federal Open Market Committee.

Even so, a number of its members have once again been making hawkish noises, and another rise in rates by the end of the year is widely anticipated.

Indeed, it is on the face of it quite hard to see how the Fed can avoid such action. Already at 2.3pc, core inflation in the US is trending higher. The US labour market continues to tighten, and money growth, for some a key lead indicator, is strong.

On the stitch in time principle, the Fed ought to be acting now to head off the possibility of over heating further down the line. Policymakers are also desperate to return to some semblance of “normality” after the long, post financial crisis aberration in rates, if only to give themselves room for monetary stimulus when the next downturn does eventually materialise. If there were a recession now, there’s not a lot in the armoury to throw at it.

None the less, the “R” word is once again on many people’s lips. No policymaker would want to raise rates into an impending downturn, even if, historically, they quite frequently seem to make precisely this mistake. Is the Fed about to conform to type, and tip the economy back into recession?

NOW ""***THIS***"" Really needed to be SAID!!!!!!!!!!!!!!!!!!!!!!!!!!!!

12 Step program – How to f*ck up your country
Guest Post by Billy

1. Take one country built by other people.
2. Have a central bank debase the currency.
3. Inflict metric shit-tons of rules, regulations and taxes on the citizenry, personally.
4. Drive a stake through the beating heart of the economy – small business (See #3).
5. Import millions of illiterate, low-IQ mouth breathers from 3rd world shitholes who have no intention of assimilating or producing.
6. Dump them on the producers – the descendants of those who built the country.
7. When the citizenry have a problem with the flood of mouth-breathers, guilt them into submission. If you can’t guilt them, hoot them into silence by screaming PC-conflict epithets at them.
8. When Government can’t meet payroll – literally paying for all the Free Shit they’ve ‘promised’ to everyone – continue to take out loans you “promise” to pay back (See #2).
9. Play identity politics by pitting racial groups against each other. The winner gets privileged status. (Pro tip: There is no ‘winner’ and will never be one).
10. Use the distraction created by #9 to loot the treasury.
11. Use the friction created by #9 as an excuse to disarm the citizenry using the fig leaf of “safety”.
12. Keep the citizenry distracted by ginning-up useless foreign wars, bread, circuses and a conga-line of retards in the ‘media’…............. 

YEP......................That Pretty Much Covers Everything!!!!!!!!!!!!!!!!!!!!!!!

YOU Folks reading from Japan...............These Articles are for YOU!!!!!!!!!!!!!!!!!!!!!!!!!

Abenomics has Totally FAILED!!!!!!!!!!!!!!!!!!!!!!

THESE Charts are YOUR Truth to the HELL Coming at YOU!!!!!!!!!!!!!!!!!!!!!!

It Doesn’t Work
By Jeffrey P. Snider 

What good is a target or even an emphatic commitment to it if you have already proven you can’t achieve it?

So far the only “market” that really counts isn’t buying the new promises, either. We’ll see if that is just a knee-jerk reaction or if it re-ignites the contrary “dollar” trend that had so plagued Abenomics going back to last summer. 

When It Doesn’t Work, Just Promise To Keep Doing It Until It Does
By Jeffrey P. Snider

On July 14, 2006, the Bank of Japan raised its benchmark overnight rate off zero for the first time since introducing the world to ZIRP in 1999. In doing so, the BoJ noted that the Japanese economy in its view continued to “expand moderately” and that risks inside the economy were “balanced.” The central bank also sought to reassure, further commenting that despite one 25 bps rate hike “an accommodative monetary environment ensuing from very low interest rates will probably be maintained for some time.”

These words, all of them, should sound frighteningly familiar, as they are being redeployed in nearly exactly the same phrasing by the Federal Reserve. Whether or not the FOMC votes for a second rate hike today still remains to be seen, as before that “news” there is first the BoJ once more admitting that its prior efforts didn’t actually work. For the record, Japanese officials actually carried out two hikes, a second coming in February 2007 just in time for the open minded to finally see what really had been going on in the global economy.

In other words, the Japanese policymakers made the same mistakes as are being made today. They assumed absence of further contraction was the same as recovery. In the singularly binary model of orthodox economics, if an economy isn’t in recession it must be growing; so if the economy isn’t in further recession and the economy is barely growing or even stagnating then it is assumed that growth is just being delayed. By the middle of 2006, the Bank of Japan believed there were enough signs the economic postponement had ended.

They took such a stance even though there weren’t many indications quantitative easing in addition to six years of ZIRP achieved anything like their original goals (this, too, should seem eerily recognizable). Writing for the NBER in September 2006, several months after the first rate hike, economists Takatoshi Ito and Andrew K. Rose wrote that the deflationary impulse within the Japanese economy remained. Thus, the Bank should have adhered to its stated purpose:

""When the BOJ adopted ZIRP for the first time in February 1999, the condition for lifting ZIRP was when deflationary concerns were dispelled. When the ZIRP was effectively reintroduced in March 2001, the condition became more concrete: excess reserve targeting, or de facto ZIRP, would not be abandoned until the inflation rate, measured by CPI excluding fresh food, became stably above zero.""

The Japanese CPI in 2006 ended up barely positive on an annual basis, with the index excluding fresh food even less so. While the Bank of Japan viewed that as a favorable outcome, the CPI both overall and without fresh food would fall back to zero again in 2007. Ironically, it wasn’t until 2008 that Japan saw any measurable inflation as the (temporary) effects of the “dollar” were far more potent than any QE.

What Ito and Rose argued was that monetary policy needed(s) to have a credible target in order to achieve its aims. This remains a common critique of Japanese monetary policy going all the way back to Paul Krugman in the late 1990’s (“credibly promise to be irresponsible”), that though they are willing to try new methods and develop different monetary tools they need also the nerve to commit to them. In other words, though BoJ had committed to positive inflation as far back as 1999 they needed to really commit to inflation.  


The BOJ Goes Truly Nuts——-Behold, The Fiat Yield Curve!
By Tyler Durden

Bill Blain: What The BOJ Just Did Is Recipe For Disaster

Some interesting, and accurate, thoughts in this morning’s edition of Bill Blain’s “Morning Porridge”, who – despite calling this website a “tabloid” in the past – now agrees with what we have claimed all along for the past 7 years.

* * *

Mint – Blain’s Morning Porridge  September 21st 2016

After a “comprehensive” review of monetary policy, The Bank of Japan has introduced a new package, including QQE – which boils down to managing the steepness of the yield curve.

My Japan Guru, Martin Malone, describes this morning’s news from Tokyo as an all-round WIN – promising inflation by expanding the monetary base to bring down currency, and with the option of lower rates if required. Keeping the curve steep will help banks’ margins as they borrow short and lend long.. BUT! Is it just me thinking that’s a recipe for banking disaster.. “Danger, Danger Will Robinson, Danger”!

It’s a fairly dramatic deep-dive focus from the BoJ – digging even deeper into what I always thought was the function of markets. The BoJ seeks to impose its vision on the Yield curve – which I mistakenly believed was a factor of inflationary expectations and market confidence… rather than government/central banking fiat. Sure, you can set prices through demand (the BoJ now looking to own over 50% of the JGB market), but is monetary distortion now going too far?

I read a quote about how the BoJ is the most “daring” central bank. I was thinking the most “desperate” myself. I’m not in the least convinced you change the function of an economy by randomly yanking the monetary levers! You invigorate it by fueling demand, innovation, growth and, in Japan’s case, structural reform across the board. I’m afraid that’s hardly been touched.

It strikes me the decision to start playing the yield curve and carry on regardless is more about the absence of any other real policy options. Call me a cynic.. but I suspect the BoJ is fearful that doing nothing is no longer an option.

My concern is how the market reacts – will they see the BoJ action as “extraordinary” or “underwhelming”. I suspect the latter – frankly we’re losing confidence in monetary tinkering for the very simple reason it’s not working. It’s a bit like trying to push a boulder up a hill with a length of wet wool! (Fiscal policy, by contrast is very different – it’s pulling the same boulder up same hill with the same soggy wool… again of limited efficacy.)

The backlash is coming – which might explain why governments are discovering that even with QE Infinity, their control of markets is more limited than they think.

Keep a close eye on JGB yields and Yen in coming days to watch how this develops. And buy the Topic – the BoJ is by expanding their ETF buy programme.

Meanwhile, the consensus remains for Janet Yellen to do diddley-squat tonight in terms of US rates – all of which is going to make what the media are breathlessly describing as “Super Wednesday” look a bit pedestrian. I rather wish they’d bite the bullet and get on with normalisation – by hiking rates.

I rather suspect the horrible truth will soon be out. The last 7 years of extreme monetary experimentation has created a mutant economy… where the only beneficiaries have been holders of financial assets. Investors have been loath to invest in real plant, infrastructure or jobs because the returns look so limited by artificially low rates. Instead they invest in financial assets because these returns are being inflated by monetary policy. Doh.. 

QE and ZIRP has the effect of sucking all the financial momentum out of economies – corporates borrow billions; not to invest in creating jobs and wealth, but to buy back their stock – further fuelling financial asset-inflation. Eventually the economy sinks into an entropy-minus state where the only game is financial assets fuelled by increasingly pointless further monetary injections…

Markets are utterly addicted to repeated hits of govt stimulus in the form of artificially low rates and asset purchase programmes – creating a massive moral hazard risk.

It might be time to encourage real investment in the real economy by spanking financial assets into touch – forcing money to back the real world instead. Higher rates will trigger massive correction in bonds and stocks – but that may well be a very very good thing!

What the Next Recession Will Look Like
By Brendan Brown

Some optimists are touting the hypothesis that the weakness of the economic expansion since the last cyclical trough (June 2009) means that the next recession will be mild.

In fact, such a tendency has never been observed in the 140 years of US business cycle history examined famously by University of Chicago Professor Victor Zarnowitz. The only reliable rule which he found was that “the worse the downturn the stronger the subsequent upturn” — a rule that has famously broken down under the onslaught of the Great Monetary Experiment in the present cycle.

So how can we best decipher the future of this cycle including its peak and subsequent trough? In broad terms the best guide is King Solomon “there is nothing new under the sun” on the one hand and the Austrian school and behavioral finance theorists on the other. The latter warn in combination against pseudo-scientific hypothesis making and the perils of making judgment on the basis of those small sample sizes available from the laboratory of history.

Three Reasons We're Told not to Worry

To be fair, the optimists on the shallowness of the next recession are not citing a past historical episode to back their case. Rather they make three claims: (1), because investment spending has been so anemic, its scope to fall is correspondingly limited; (2), the likely tumble in asset prices will not this time cripple the US banking system which is now unusually resilient; and (3), the new tools which the central bankers have tried out during the experiment so far can now be sharpened and adapted to better combat the next recession when it hits. All these claims are unfortunately bogus and they fail to acknowledge a potential recessionary shock from the side of the consumer.

Weak Business Spending, Declining Consumption, Popping Bubbles

The weakness likely has much to do with the uncertainty generated by the monetary experiment. Business decision-makers and their shareholders in thinking about the future can see that the Fed (and central banks abroad) have generated a dangerous asset price inflation disease which will likely end up badly. This will include much evidence of mal-investment, a crash across many asset markets, and a big pull back in consumption as households realize the mistakes of their past credulity.

Given so much fear about the end-destination of the monetary experiment, the road to raising shareholder equity is often not via undertaking long-term investment projects. Rather, companies are paying out cash to shareholders and leveraging up to do so. This tendency to eschew long-run commitments is also attributable to awareness that present equity values contain much froth which may well have vanished by the time the business owners (including executives with share-options) would hope to cash out.    

Yes, the areas of mal-investment during the economic expansion do emit boom-like signals. The speculative stories and the high leverage found there are characteristics of the Hunt for Yield as induced by the income famine conditions prevalent under the Great Monetary Experiment. The eventual plunge of investment in these areas can be large overall in macro-terms even though overall business capital spending across the economy as a whole is sub-normal. We have seen that already for the energy boom and bust in the US. The same may be true further ahead for all the suspect areas of mal-investment, whether commercial real estate construction, Silicon Valley, apartment construction, and any activity related to the biggest bubble of all — private equity.

Why We Should be Skeptical of Claims that There is “No Potential US Banking Crisis” 

What Total BULLSHIT Out of the BoJ Last Night and Yellen 40 Minutes Ago!!!!!!!!!!!!!!!!!!

Planet EARTH...............The Central Banksters are Finished they have NO More ""Magic VooDoo Dust"" to Sprinkle over Our Heads and make US go out and Spend Money. The Global Economy has entered a cycle of Stagflation with a dose of DEFLATION brought to YOU by the Overcapacity that has been built up in Asia!!!!!!!!!!!!!!!!!! 

Folks there "IS" only 3 WAYS this ENDS with the Central Banksters in Charge..............Restructure Sovereign Debt, DEFAULT on Sovereign Debt of INFLATE the SHIT out of YOUR Economy. Well WE All know how the First 2 Events Work out thanks to the ""PIIGS."" So that LEAVES Inflation and that can't happen NO Matter How MUCH ""QE"" the Banksters throws into the System IF there "IS" No DEMAND for the Liquidity the Banksters are Pumping into the Economy. 

This ""PONZI"" Scheme HAS Failed and today's action by the FED Proves it. THEY Will NOT Raise Rates in December and in 2017 THEY Will be Faced with the Fucking Horror of Dealing with a Business Cycle Collapse, RECESSION and the Worst Wave of DEFLATION that will make the 1930s look like it was a Good Time to be Fully Invested!!!!!!!!!!!!!!!!!!!!!!!!!!!! 

Oh, and in the FED's Press Release they have Announced that the Long Term Growth RATE for the U.S. Economy "IS" Now 1.8%!!!!!!!!!!!!!!!!! You Folks in China are Totally FUCKED!!!!!!!!!!!!!!!!!!!!!!!!!!!!

China’s First Half “Credit Deluge” Is At Risk In The Second Half Of 2016
By Gordon L. Johnson of Axiom Capital Research

China’s 1H16 Efforts to Limit Runaway Growth in Home Prices Reflect Failed Tightening Policies (Not Stimulus). A likely acceleration of these efforts in 2H16 (due to record home prices in Aug.), coupled w/ a probable slowdown in bank asset growth (discussed below), we believe, will undermine the key pillars supporting China’s economic “rebound” in 2H16 & rekindle volatility in risky asset classes. That is, while Aug. data was better than expected, perhaps most noteworthy were China’s property prices, which rose for new residential homes m/m, on avg., in 64/70 cities in Aug., the most ever when taking the avg. of all 70 cities. Of course, w/ China’s credit growth up strongly in Aug., we find evidence that some in gov’t continue to support cheap credit to mfr. growth (i.e., total social financing [“TSF”] was +35.4% y/y, local gov’t debt issues YTD total CNY 4.8tn, vs. CNY 3.8tn in ’15, & the PBOC’s medium-term lending facilities [“MLFs”] YTD total CNY 3.0tn, vs. just CNY 0.4tn in ’15).


Not So Fast. While stabilizing to China’s economic malaise in 1H16, when considering: (1) growth in loans to households (dominated by mortgages) increased CNY 3.6tn in YTD ’16 (thru Aug.), vs. CNY 1.9tn in the same YTD ’15 period, or +90.4% y/y, while loans to corporates increased CNY 4.6tn YTD, vs. CNY 5.4tn in YTD ’15, +10.4% y/y, & (2) we find scant evidence of any material increase in China’s tertiary econ. indicators (beyond real estate), we blv this yr.’s record credit growth was largely funneled into the country’s property sector, vs. broad infrastructure spending (suggesting the property mrkt., not gov’t stimulus, contributed to GDP growth in 1H16).

Tertiary Data? With signs of cooling real estate activity showing up since Apr. in land purchases, new starts, space under construction & space sold (Ex. 1), noting the laws of diminishing marginal returns, we are already seeing signs that this cheap credit has run its course; and as buying restrictions are ramped to fight ballooning home prices (e.g., mortgage controls, higher down payments, & residency requirements), we see this slowdown deepening in 2H16.


OECD sees growth flounder as globalisation stalls
Reuters, Paris

Global economic growth will flounder this year and next at rates not seen since the financial crisis as the march of globalisation grinds to a halt, the OECD warned on Wednesday.

Long a motor for the global economy, trade growth is set to lag growth in the broader world economy this year, the Organisation for Economic Cooperation and Development said in an update of its main economic forecasts.

"This is well below past norms and implies that globalisation as measured by trade intensity may have stalled," the Paris-based organisation said.

As a result, the OECD estimated the global economy would muster growth of only 2.9 percent this year, down from a forecast of 3.0 percent in its last estimates in June and the lowest rate since the global financial crisis of 2008-2009.

The OECD said many global supply chains that add economic value at each stage and are often rooted in China and other east Asian countries were unravelling as China sought to wean its economy off of exports for growth and some firms brought back production to their home countries.

A growing backlash against trade liberalisation as well as recessions in some big commodity-producing countries were adding to the trade slowdown, which the OECD warned could erode already flagging productivity and thus ultimately living standards.

"If we could get back on track with the kind of trade growth that we had in the 1990s and 2000s, we would be able to return to productivity growth rates prior to the financial crisis," OECD chief economist Catherine Mann told Reuters in an interview. 

The terrifying signs of a looming housing crisis
By Yoav Gonen

The number of New Yorkers applying for emergency grants to stay in their homes is skyrocketing — as the number of people staying in homeless shelters reached an all-time high last weekend, records show.

There were 82,306 applications for one-time emergency grants to prevent evictions in fiscal 2016, up 26 percent from 65,138 requests the previous year, according to the Mayor’s Management Report.

The city’s fiscal year runs from July 1 to June 30.

Without the aid — which comes from city funds and was approved in roughly two-thirds of the cases — even more families would likely have entered the shelter system.

“I think the need is as high as it’s been over the past several years in terms of folks not being able to afford New York City,” said Giselle Routhier, policy director at Coalition for the Homeless.

The level of need is echoed in the record number of people seeking shelter at city facilities.

On Sunday, Sept. 18, 59,734 people used the city’s shelter system, a total that eclipsed the record of 59,068 set in 2014, officials said. In fact, at least two other days this month also topped the old mark for homelessness.

Officials at the Department of Homeless Services argue there isn’t a direct correlation between evictions and the homeless-shelter population because people enter the system for numerous reasons, including leaving doubled-up apartments.

And they point out the percentage of households receiving emergency assistance edged up in fiscal 2016 by 2.3 percent — meaning more residents were successfully kept in their homes.

“The shelter population more than doubled in the two decades before this administration took over,” said New York City Housing Authority spokeswoman Lauren Gray.

One bit of positive news: Routhier suggested the increase in grant requests could stem from better outreach efforts by the city about its preventative services.

“This should be good news in terms of preventing more people from entering the shelters in future years,” Routhier said. 

People are ditching their apartments to live the 'van life'
By Fernando Hurtado 

The 'van life'

Imagine paying $120 to live in a studio in Los Angeles, California, where the average rent for a one-bedroom apartment is about $2,300.

Sounds nice, huh?

Stephen Hutchins, 22, a freelance animation artist and rapper by the name of Lateral , does just that, except he doesn't live in an apartment -- or a studio, really. He lives in a van. 

U.S. Housing.....................Now Comes the CORRECTION!!!!!!!!!!!!!!!!!!!!!!!!!!! 

"Deutsche Bank May Ultimately Need A State Bailout" - Handelsblatt

While the most recent set of troubles plaguing Deutsche Bank have been duly documented here, most recently yesterday when the stock price tumbled once again just shy of all time lows over fears the bank's multi-billion DOJ settlement could severely impact its liquidity and/or solvency, this may be the first time we have heard the "n"-word tossed around in an official German publication: as Germany's top financial newspaper, Handelsblatt said, "German financial officials reacted with shock and dismay to the leaking of a U.S. government demand for a $14 billion fine against Deutsche Bank, which may ultimately need a state bailout to pay the bill."

Some more details from the article titled "Deutsche Bank in New Existential Crisis":

Discussion of Deutsche Bank’s shaky capitalization has burst back to life, with renewed speculation on whether Chief Executive John Cryan will be forced to raise new capital, which he had previously ruled out, or make emergency asset sales.

Some have even raised the possibility of a government bailout of Germany’s largest bank, which would be a defining event and a symbolic blow to the image of Europe’s largest economy.

And some more troubling truth:

Deutsche Bank in New Existential Crisis
By Jan Hildebrand, Yasmin Osman, Daniel Schäfer and Sven Afhüppe

German financial officials reacted with shock and dismay to the leaking of a U.S. government demand for a $14 billion fine against Deutsche Bank, which may ultimately need a state bailout to pay the bill. 

Deutsche Bank’s Low Capital Makes It No. 1 for Risk, Hoenig Says

Deutsche Bank AG’s status as the riskiest among more than two dozen large banks is worsening, according to a measure of its leverage used by Federal Deposit Insurance Corp. Vice Chairman Thomas Hoenig, adding to woes for Germany’s biggest lender as it braces for a large settlement over mortgage securities.

In a twice-yearly look at what’s known as the leverage ratio -- a lender’s capital measured against its assets -- Deutsche Bank drags behind the rest of the major global banks, according to data released Tuesday by Hoenig. A lower ratio means the bank has less of a cushion if a crisis arises. Deutsche Bank’s ratio of 2.68 percent as of June 30 is about half of the average for the eight biggest U.S.-based firms including JPMorgan Chase & Co. and Citigroup Inc. It also trails its ratio of 3.01 percent from last year.

Hoenig -- among the loudest advocates for stronger bank-capital requirements -- regularly releases a tally of capital levels at the largest banks doing business in the U.S. While it’s not an official scoring by the FDIC, his calculations put more emphasis on derivatives exposure, which Hoenig has said is the best way to figure out the riskiness of each institution. The regulator has said before that Deutsche Bank’s capital ratio is too low.

“As markets have recovered and as central banks around the world continue quantitative easing programs, the incentives for increasing financial leverage have intensified,” Hoenig said in a statement.

Renee Calabro, a spokeswoman for Deutsche Bank, declined to comment.

The bank’s investors welcomed recent indications that the Frankfurt-based firm was considering the sale of some of its asset management operations. But headlines that the Justice Department might seek as much as $14 billion in sanctions against the bank’s mortgage-backed securities business sparked analyst comments that the lender could become significantly under-capitalized in the event of a big settlement and may need to raise capital. 

Deutsche Bank Goes to Crisis-Era Well
By Lisa Abramowicz

What's a bank to do when regulators want it to offload risk to prevent a repeat of the last financial crisis? Why turn to a complicated derivative transaction commonly associated with that same crisis, of course.

Deutsche Bank, which has lost almost half its equity value so far this year, is planning a synthetic collateralized loan obligation to lower the capital requirements tied to a pool of billions of dollars of corporate loans.

Falling Fortunes

Deutsche Bank's shares have fallen almost in half this year amid concerns about its financial promise

The German lender certainly needs some help with its balance sheet. It's one of the worst-capitalized banks in Europe and is negotiating with the U.S. Justice Department over a potential $14 billion fine for mortgage-related activities. So it makes sense for Deutsche Bank to try to get creative to make its books look better.

At first glance, the idea that the bank's managers would turn to derivatives that are closely associated with some of the instruments that nearly brought down the financial system in 2008 is puzzling.

But European regulators seem to welcome these transactions. The logic is that these deals are usually fully funded, with investors posting the full amount that they're on the hook to cover should a lot of a bank's loans go bust. They're not highly leveraged wagers similar to the pre-crisis synthetic collateralized debt obligations, which were backed by who knows what and sold to whomever. 

Is This Why Deutsche Bank Is Crashing (Again)?

Deutsche's dead-bank-bounce is over. The last few days have seen shares of the 'most systemically dangerous bank in the world' plunge almost 20%, back to record lows as the DoJ fine demands reawoken reality that the €42 trillion-dollar-derivative-book bank is severely under-capitalized no matter how you spin asset values.

Deutsche Bank closes at an all-time record low close... 

Deutsche Bank Banking Crisis II...............................coming at YOU!!!!!!!!!!!!!

Attention to ALL ""LAB RATS"" of Planet EARTH..................Holy SHIT, WE have a ""HELL Storm"" coming at US that WILL Have NO Equal when this Recession Sweeps around the World!!!!!!!!!!!!!!!!!!!!!! 

Retirement Crisis Looms As Average U.S. Household Has Saved $2,500 For Retirement

The global demographic crisis expected to play out over the coming years has been a frequent topic of ours (you can read our most recent post on the topic here:  "DB Warns 35-Year Economic Super Cycle Is Officially Ending").  The problem, of course, is that baby boomers all over the globe are on the verge of transitioning out of their highest wage earning years and into retirement.  That transition brings with it all sort of negative consequences ranging from the detrimental impact on average incomes and GDP to exposing the epic ponzi schemes that workers have heretofore referred to by their more common names of pension plans, social security, medicare and medicaid.

A report from the National Institute on Retirement Security (NIRS) recently pointed out just how ill prepared American's are for retirement.  The study by the NIRS found that the average American household has $2,500 saved for their retirement.  Even worse, the study found that even people near retirement (aged 55-64) have only set aside $14,500 which should allow them to live very comfortably for about 2-3 months. 

The State Financial Security Scorecards

A new analysis indicates that Americans in nearly every state will fall far short in meeting their economic needs in retirement.

The State Financial Security Scorecards research project gauges the retirement readiness of future retirees in each of the fifty states and the District of Columbia in three key areas: anticipated retirement income; major retirement costs like housing and healthcare; and labor market conditions for older workers.

The research finds that the lowest ranking states include:

*California due to low potential retirement income, low workplace retirement plan access and high retiree costs.

*Florida due to high retiree costs, low wages for older workers and low workplace retirement plan access.

*South Carolina due to low potential retirement income and low labor market scores.

The highest-ranking states include Wyoming, Alaska, Minnesota and North Dakota due to their relatively strong labor markets and lower retiree costs. However, each of these states with a favorable outlook is weak in terms of potential retirement income for retirees. For example, North Dakotans have an average defined contribution retirement account balance of only $27,700 – nowhere near the level of accumulated savings required to ensure self-sufficiency through retirement.

*Visit the interactive map with State Scorecards here.

*Read the press release here.

*Download the webinar Powerpoint here.

*Watch a replay of the webinar here.

These state scorecards are designed to serve as a tool for policymakers to identify areas of focus for state-based policy interventions that will strengthen Americans’ ability to financially prepare for retirement. The State Financial Security Scorecard project provides a two-page summary of the economic outlook for retirement security in every state. It considers trends in retirement plan participation rates in each state, evaluates average savings levels in individual retirement accounts in relation to median income and considers current poverty levels in each state. 

Retirement Is Looking Even Worse for Americans

A trifecta of grim news for the nation, women, and especially New Yorkers.
By Suzanne Woolley

New York has the dubious distinction of being the worst state to retire in. But that doesn't leave the other 49 off the hook.

Big tax burdens and a high cost of living sank the Empire State to the bottom of the heap, according to consumer website and its 2016 report on the best and worst states for retirement. The best state? Wyoming, which had the overall highest score based on the report's six measures: cost of living, taxes, health care, crime, weather, and the overall well-being of residents.

Regardless of which state you call home, if you're a woman, your chances of living in poverty when you pass 65 are alarmingly high, according to a study released by the National Institute on Retirement Security (NIRS). And a third report, this one a survey, reveals that, man or woman, East Coast or West Coast, it just doesn't matter: Most Americans are nervous about what quality of life they'll have in retirement.

Here are highlights (if you can call them that) from Tuesday's hat trick of retirement news:

*****Public Pensions.............""The Great GREAT Depression"" coming at YOU America!!!!!!!!!!!!!!!!!!!!!

US building up to pension crisis
By Robin Wigglesworth in New York and Barney Jopson in Washington

Every two weeks, Jo Johnson, a 54-year-old digital media project manager in Philadelphia, takes a third of her salary and stashes it away in a retirement account on top of the money contributed by her employer. Her thrift is driven by necessity.

Ms Johnson has bounced between different jobs. Patchy contributions to her pension plan has meant that retirement was looking far leaner than she would have liked, spurring a more thrifty approach three years ago. Her husband, Andrew Marshall, a consultant, makes a good living, but “when I look at the numbers they are a little scary”, she admits.

“We’re doing extremely well, but we’re still playing catch-up. We’re being as frugal as we can be,” she says. “Our retirement plan has simply been glued together over the years.”

The modern US pension system was largely built when people tended to work in one job or company their entire lives. But a mish-mash of unemployment, part-time employment or self-employment is now the norm, and Ms Johnson’s predicament of sporadic contributions is increasingly common. Worse, many Americans have no retirement savings at all, setting the stage for a social crisis as they retire in near-penury.

The numbers are severe. According to the National Institute on Retirement Security, nearly 40m working-age households — 45 per cent of the total — had no retirement savings whatsoever in 2013, whether an employer-sponsored 401(k) plan or an individual retirement account (IRA).

The pensions industry has lately focused on the negative impact of low bond yields and subdued investment return expectations on “defined benefit”, public pension plans and individual “defined contribution” plans like the US 401(k). But the real brewing US retirement crisis is the number of people that have no nest egg whatsoever, argues David Hunt, chief executive of PGIM, Prudential Financial’s asset management arm.

“If you look for the real black hole in the pension system, this is it,” he says. “And these are the most vulnerable people in society.”

Indeed, while younger people are less likely to have some sort of a retirement nest egg than older Americans, the biggest factor is income. Households with a retirement account have a median income of $86,235, while those without one have a median income of $35,509, according to the NIRS. 

This WILL be the FIRST Recession Caused by the Monetary Policies of the Central Banksters of the Largest Economies of Planet EARTH 

Folks, the Global Economy has NEVER Gone into RECESSION with THIS Amount of Global DEBT!!!!!!!!!!!!!!!!!!!!!!!!! 

The ZIRP/NIRP Gods and their PhD Priesthood Have Failed
By Charles Smith
September 20, 2016

The priesthood's insane obsession with forcing people to spend their savings by punishing savers with ZIRP/NIRP has failed spectacularly for a simple reason: it completely misunderstands human psychology.

Let's start with a simple chart of the Fed Funds Rate, which the Federal Reserve has pinned near zero for years. This Zero Rate Interest Policy (ZIRP) is the god the PhD economists in the Fed and other central banks worship as the supreme force in the Universe, along with its even more severe sibling god, NIRP (negative interest rate policy), which demands that banks and depositors must pay for the privilege of holding cash.

Precisely what have ZIRP and NIRP fixed in the global economy? The short answer is "nothing." Instead of fixing what's broken, ZIRP and NIRP have pushed a broken system further along the path of self-destruction.

US federal debt expanding at fastest rate since the crisis
By Simon Black

A few days ago, the federal debt of the United States rather quietly and unceremoniously passed the $19.5 trillion mark.

And while that figure may seem absolutely confounding, what’s even more alarming is how rapidly the US government is racking up this debt.

In fact, for the 2016 fiscal year that ends in just ten more days, the US government’s debt growth of $1.36 trillion is on track to be the third biggest annual increase ever.

The only two years in all of US history that posted higher US debt growth were 2010 and 2011– the peak of the financial crisis.

Even more acutely, last month the US federal debt grew by $151.5 billion.

Not counting the financial crisis, and a few anomalous months following a debt ceiling reset, August 2016 was the single biggest expansion of US debt EVER.

In other words, US federal debt is expanding at its fastest rate since the financial crisis, and one of the fastest rates in all of US history.

This isn’t supposed to be happening. We’re in ‘peacetime’. The financial crisis is over. The economy is supposedly growing, and unemployment is supposedly falling.

None of the normal big deficit triggers exists; if you read the mainstream press, the news about the US economy is all rainbows and buttercups.

You’d think they would actually be running a surplus at this point and paying down the debt. Or at a minimum the rate of debt growth would be shrinking.

But no. Despite all of this good economic news, the government is still piling up debt at record levels.

If the debt is growing this quickly in good times, just imagine how dire the debt situation will become once the economy slows down and recession kicks in. 

Global Bond Bubble has Finally Reached its Apogee
By Michael Pento

Boston Fed President Eric Rosengren recently rattled markets when he warned that low-interest rates were increasing the temperature of the U.S. economy, which now runs the risk of overheating. That sunny opinion was echoed by several other Federal Reserve officials who are trying to portray an economy that is on a solid footing. And thus, prepare investors and consumers for an imminent rise in rates.  But perhaps someone should check the temperatures of those at the Federal Reserve, the idea that this tepid economy is starting to sizzle could not be further from the truth.

In fact, recent data demonstrates that U.S. economic growth for the past three quarters has trickled in at a rate of just 0.9%, 0.8%, and 1.1% respectively. In addition, tax revenue is down year on year, S&P 500 earnings fell 6 quarters in a row and productivity has dropped for the last 3 quarters.  And even though growth for the second half of 2016 is anticipated with the typical foolish optimism, recent data displays an economy that isn’t doing anything other than stumbling towards recession.

The Institute for Supply Management Purchasing Manager’s index for the manufacturing sector during August fell into contraction at 49.4, while the service sector fell to 51.4 compared to 55.5 in July, which was the lowest reading since February 2010 and the biggest monthly drop in eight years. And the recent jobs report was also full of disappointment too, with just 151,000 jobs created in August and a decline in the average work week and aggregate hours worked.

But our Federal Reserve is not the only central bank making statements troubling to stock and bond prices. The President of the European Central Bank (ECB), Mario Draghi, threw all the major averages into a tailspin at a recent press conference by failing to indulge markets with a grander scheme to destroy the euro. When asked if the ECB had talked about extending Quantitative Easing (QE) at its meeting, Draghi had the gall to make the egregiously hawkish announcement that they “did not discuss" anything in that regard. This mere absence of a discussion regarding extending or expanding QE caused the Dow to shed nearly 400 points on Friday and spiked the U.S. Ten-year from 1.52% to 1.68%. Indeed, stock and bond prices plunged across the globe.

It appears that nothing is ever enough to satisfy global stock and bond markets that are completely addicted to central bank stimulus. Mr. Draghi has managed to drive rates so low that they are now in effect paying European companies to borrow--yet markets want even more.

That’s correct, it’s no longer just sovereign debt that offers a negative yield. According to Bloomberg, French drug maker Sanofi just became the first nonfinancial private firm to issue debt at yields less than zero. Also, shorter-term notes of some junk-rated companies, including Peugeot and Heidelberg Cement, are yielding about zero percent.

Christopher Whittall of The Wall Street Journal reports that as of September 5th, €706 billion worth of investment-grade European corporate debt was trading at negative yields. This figure represents over 30% of the entire market, according to the trading platform Tradeweb. You can attribute this to the fact that global central bank balance sheets have increased to $21 trillion from $6 trillion in 2007, as central banks continue to flood the markets with $200 billion worth of QE every month.

The bond bubble has now reached epic proportions and its membrane has been stretched so thin that it has finally started to burst. As mentioned, not only did U.S. yields spike on the Draghi disappointment but the Japanese Ten-year leaped close to positive territory from the all-time low of -0.3% in late July.  And the German Ten-year actually bounced back into positive territory for the first time since July 22nd.

What did Mario Draghi say that was so unsettling to the Global bond market and caused speculators that have been front-running the central bank’s bid for the last eight years to panic? He didn’t avow to sell assets; he didn’t even promise to reduce the 80 billion euros worth of bond buying each month. All he did was fail to offer a guarantee that the pace of the current bond buying scheme would be increased or extended beyond March 2017. That alone was enough to cause yields around the globe to spike and stock markets to plunge.

This is merely the prelude of what is to come once the ECB and Bank of Japan reverse their monetary stimuli; or when the Fed actually begins its rate normalization campaign. Just for the record, the Fed’s first hike in ten years, which occurred last December, does not count as a tightening cycle.

The bond bubble has grown so immense that if, or when, central banks ever begin to reverse monetary policy it will cause yields to spike across the globe. But as recent trading volatility has proved, it won’t just be bond prices that collapse; it will be every asset that is priced off that so called “risk free rate of return” offered by sovereign debt. The painful lesson will then be learned that negative yielding sovereign debt wasn’t at all risk free. All of the asset prices negative interest rates have so massively distorted including; corporate debt, municipal bonds, REITs, CLOs, equities, commodities, luxury cars, art, all fixed income assets and their proxies, and everything in between will fall concurrently along with the global economy.

Perhaps after this next economic collapse central banks will deploy even more creative ways to increase their hegemony and destroy wealth; such as banning physical currency and spreading electronic helicopter money around the world. In the interim, having a portfolio that hedges against extreme cycles of both inflation and deflation is essential for preserving your wealth. 

China Not China: The Greater ‘Evil’ On Its Balance Sheet
By Jeffrey P. Snider

As if we needed more evidence, the Chinese liquidity system is stuck. As much as authorities in China might complain about the global credit-based reserve currency system, as PBOC Governor Zhou Xiaochuan put it in March 2009, and quietly seek out its replacement, they not only allowed it to happen they quite eagerly participated in it so long as it appeared to fuel their economic “miracle.” The monetary system in China is not Chinese; it is at most translated into RMB as its basis is derived elsewhere. And in the world of the late 20th century and especially the first decade of the 21st that means primarily “dollars.”

It is perhaps one of the biggest shocks to traditional thinking where you can very easily observe the eurodollar system’s decay by looking at nothing more than the People’s Bank of China’s assets. While the 2008 panic is notably absent for various reasons (only somewhat related to this specific examination), its aftermath is the most prominent feature.


By pegging the yuan to the dollar for so long, the central bank essentially obtained any free “dollars” from its exploding merchandise surplus – as well as a great deal unrelated to pure trade (financial). That kept the currency stable, but it also created the Chinese “dollar” short whereby all those “spare” “dollars” were left on account at the PBOC rather than flow, as is commonly believed, to the importers who needed (and still do) them. As the asset side built up due to foreign accumulations, primarily “dollars”, the liability side (China money) could follow along, meaning Chinese money wasn’t purely fiat in the very strict sense of the term. It was “backed” by forex conditions even more than balances.

You can appreciate the willingness of Chinese monetary authorities to incorporate this odd arrangement; before the 1990’s, China’s economy was a basket case of authoritarianism as well as unevenness. That uncertainty was the dominant view of the currency, as well. Thus, to peg CNY meant to do so credibly, and what better short cut than to “back” CNY by “dollars?”

No one envisioned that the credit-based global currency system would ever run so afoul of regular order. Even in March 2009 when Governor Zhou was pleading for Western authorities to actually understand the world’s monetary arrangements he wasn’t at that time doing so with the expectation that the eurodollar, wholesale format was no longer workable; Zhou just wanted a more stable eurodollar. As you can see plainly on the chart above, it wasn’t until September 2011 that it became clear any such hope was a futile one (though it wasn’t until 2013, it appears, that Chinese authorities finally realized it; which still puts the Communists so many years ahead of the “free market” West in terms of figuring out what is actually going on). The Chinese don’t have the luxury of pretending it is still 1950 – not that “we” have any such benefit, either, only the Chinese monetary system is more directly and heavily affected such that they are forced into direct and immediate confrontation with reality whereas the Federal Reserve merely questions the more indirect economic and intermittent financial effects of the global economy slowly suffocating from the tightening.

Without the “dollar” inflow into the PBOC’s asset side, that leaves only fiat as the option for continuing internal RMB expansion (on the liability side, which is “money”). There are other accounts by which the PBOC can expand on the asset side to deliver bank reserves on the liability side. The problem of doing so is the age-old problem of RMB, the reason it took the forex “dollar” short cut in the first place. The “market”, or whatever is left of it, will view any such naked expansion as “inflationary” and thus “weakening” the currency. It will (or at least the PBOC gravely fears that it might be received in such fashion) introduce further negative currency pressures where the Chinese can least afford them.

Thus, China is stuck; they can no longer count on the asset side growing via “dollars” while at the same time they clearly fear expanding in their own RMB terms lest it further push “devaluation” pressures that would make an already dangerous “dollar” situation perhaps explosively so. The result is direct translation of “dollar” pressures into RMB illiquidity.

In 2016, though it may seem much better surely in contrast to the “global turmoil” of last year, the Chinese have not escaped. The PBOC is still being forced to conduct its operations (both “dollars” and RMB) in a very narrow window. If there is a difference this year it is that they are using all possible space within that window, including more RMB-focused endeavors but mostly at the start of the year.


The Bank For International Settlements Warns That A Major Debt Meltdown In China Is Imminent
By Michael Snyder

The pinnacle of the global financial system is warning that conditions are right for a “full-blown banking crisis” in China.  Since the last financial crisis, there has been a credit boom in China that is really unprecedented in world history.  At this point the total value of all outstanding loans in China has hit a grand total of more than 28 trillion dollars.  That is essentially equivalent to the commercial banking systems of the United States and Japan combined.  While it is true that government debt is under control in China, corporate debt is now 171 percent of GDP, and it is only a matter of time before that debt bubble horribly bursts.  The situation in China has already grown so dire that the Bank for International Settlements is sounding the alarm…

""A key gauge of credit vulnerability is now three times over the danger threshold and has continued to deteriorate, despite pledges by Chinese premier Li Keqiang to wean the economy off debt-driven growth before it is too late.

The Bank for International Settlements warned in its quarterly report that China’s “credit to GDP gap” has reached 30.1, the highest to date and in a different league altogether from any other major country tracked by the institution. It is also significantly higher than the scores in East Asia’s speculative boom on 1997 or in the US subprime bubble before the Lehman crisis.

China Not China: The Greater ‘Evil’
By Jeffrey P. Snider

If it was quiet late last week with China dark for its Mid-Autumn festival, the return from holiday shattered the calm and further amplified what is already a significant problem. The activity in CNH markets continues to astound, but I still think it is domestic liquidity that is more significant. Unsecured offshore (CNH) lending (HIBOR) has all but dried up again, with the overnight rate shooting up to 23.683%; only on January 12 has the rate been higher. The 3-month rate, which is more of a benchmark and less prone to huge emotional or operational swings (more depth at 3-month offshore than at overnight or even 1-week), fixed at 5.862% and the highest since spring.


You don’t have to know anything about SHIBOR, HIBOR, or anything renminbi to understand what these charts are showing; the comparisons to last summer and winter are immediately recognizable.  Yet it is the onshore activity especially the overnight SHIBOR rate (which is practically the only rate that moves) that truly makes the comparison. The weekend saw it start at 2.14% and then fix in China trading at 2.154%, more than 10 bps above what was for almost a year a hard ceiling.

With the yuan exchange rate traded (artificially) mostly sideways to higher, it is truly tempting to see especially CNH rates as a means to control the currency (illiquidity as intentional policy targeting “speculators”). But it is the growing illiquidity onshore that continues to suggest, in my view, that this is all one connected deprivation. As much as these elements can appear overwhelmingly complex, there are actually even more facets to consider that make interpretation even more difficult and multi-dimensional. I usually keep those to less public forums (including behind our paywall) for reasons of both their more speculative nature but also as a way to manage what could easily be considered clutter.

In this case, however, I think it important to make an exception particularly about this one point. Interest rate swap trading in China relates to SHIBOR, and I believe the swap curve in O/N SHIBOR is instructive on the point what the PBOC is sacrificing.


China Capital Outflows Bubble Below the Surface

Higher U.S. rates and a stronger dollar are powerful attractive forces for Chinese capital
By Anjani Trivedi


The leakage of China’s capital is unrelenting, even if it’s no longer at the top of investors’ minds. Events beyond Beijing’s control could make matters worse.

Chinese banks’ foreign-exchange data shows that capital continued to leave the economy in August—the 24th straight month of outflows, according to Goldman Sachs ’ gauge. And while at first glance the pace slowed from July, Standard Chartered said that when changes in foreign-exchange reserves are netted off against trade and investment flows, August turns out to have been the worst month since January.

Sliced in different ways, China’s outflows this year are north of $400 billion, which is reflected both in a $190 billion decline in the country’s foreign-exchange reserves and a weaker yuan, down about 3% this year against the dollar and more than 6% against a basket of currencies.

That said, investors have gotten somewhat more comfortable about the yuan’s path. Attempts to get cash out or pay off offshore debt have grown less frenzied, with turnover in China’s onshore market for selling U.S. dollars at its lowest since February, according to the latest data.

Yet with an undercurrent of outflows continuing, the sentiment that the yuan is following a weakening path down remains. What could shake the relative calm is the Federal Reserve. While it isn’t expected to raise rates this month, odds it will do so by December are now reckoned at close to 50%. Higher U.S. rates and a stronger dollar are powerful attractive forces for Chinese capital.

China’s outflow problem hasn’t gone away, and doesn’t look as though it will any time soon. 

Who’s Benefitting From China’s Accelerating Capital Outflow?

Despite Hong Kong’s “bleak” economic outlook, the city boasts simultaneous booms in top-of-the-line commercial space, residential properties, and stocks.

There’s a one-word explanation for these anomalous price movements: China.

Chinese capital outflow has picked up again, and Beijing’s measures to stop the flight have proven—once again—to be ineffective.

Last year, net capital outflow amounted to $676 billion according to the Institute of International Finance, $911 billion according to J Capital Research, and $1 trillion according to Bloomberg.

The general consensus is that Beijing this year has been able to reduce the outbound flood. Citigroup Global Markets estimates there was in the first half of the year net capital outflow of between $281.7 billion and $286.6 billion. It also predicts full-year outflow of $573.2 billion. Citigroup’s annual figure is close to that of the Institute of International Finance, which expects outflow of $530 billion.

In 2015, it appears that outflow increased substantially in the second half, and fragmentary evidence suggests that pattern will repeat this year.

In July, for instance, the gap between China’s imports from Hong Kong, as reported by Beijing’s General Administration of Customs, and Hong Kong’s exports to China, as reported by Hong Kong’s Customs and Excise, hit a record. Hong Kong statistics show exports to China fell 6.2% in the month, but China showed an increase of 122.9% in imports from Hong Kong.

The discrepancy, which should be negligible if it exists at all, was $2.4 billion that month, the biggest since 2006 when these statistics were first tracked. The previous record was set in May: $2.2 billion.

The widely followed discrepancy, which has persisted for months, is thought to show trends in money movement. At times of outflow like the present, Chinese importers overstate on trade documentation the value of goods they buy from abroad so that they can smuggle out cash from the mainland. Hong Kong is part of the People’s Republic—like Macau, it’s called a “special administrative region”—but it is outside Beijing’s customs border.

Analysts have pointed to the surprising uptick in Chinese imports in August—up 1.5%, the first increase since October 2014—as a sign the Chinese economy has stabilized. What the uptick may mean, however, is that Chinese holders of capital are busier faking import documentation, in other words, more pessimistic about their country.

The Chinese are not pessimistic about Hong Kong, however. And they have a right to be upbeat because the markets in the city are now benefitting from a “buying frenzy.”

The China-created boom is affecting many asset classes. Take non-luxury residential property. On the 10th of this month, projects released for sale sold out immediately with “massive over-subscriptions” for flats.

China’s ports hit hard by global trade slowdown
By Ben Bland in Hong Kong


From the window in Jessie Chung’s office, Hong Kong’s container port looks like a thriving hub of activity, funnelling Chinese products and other cargo to the rest of the world.

But Ms Chung, chairman of the container terminal operators’ association, concedes that the global slowdown, China’s shift away from low-cost manufacturing and increased competition from bigger Chinese ports are taking a heavy toll.

In the first half of the year, Hong Kong handled 10 per cent fewer containers than during the same period in 2015 and is on course for its fifth consecutive year of declines.

“While facing lower throughput, we’re also facing the problem of lack of land and waterfront,” says Ms Chung. “It hurts operational efficiency, meaning we’re slower and slower than before.”

While crowded Hong Kong, where containers have to be stacked seven high, has its unique issues, it is also suffering because of overcapacity problems in ports and shipping amid a broad global trade slowdown.

The bankruptcy of Hanjin, the South Korean shipping line, has focused attention on the woes of the shipping industry.

But ports in China, which has seven of the world’s 10 busiest container terminals, have also been hit hard by the global slowdown.

As shipping lines consolidate to mitigate the downturn, analysts fear their increased bargaining power will add to the woes of the port operators.

“Shipping is getting more concentrated, with alliances rationalising their networks, which means fewer port calls and reduced frequency,” says Olaf Merk, a ports expert at the International Transport Forum, part of the OECD, an inter-governmental think-tank. “It’s a dangerous game for ports because if you don’t get one or more of the alliances, you can be a big-time loser.”

As with other state-backed heavy industries, China has a significant overcapacity problem. 

Mind The Incomings—–Port of LA/Long Beach Import Containers Down 4.3% Y/Y, Implying Weak Holiday Outlook Among Retailers

Imports slumped at the nation’s largest port complex in August, a sign that retailers remain cautious in their outlook for holiday sales amid changing patterns in consumer spending.

The nation’s two largest container ports, in neighboring Los Angeles and Long Beach, Calif., imported a combined 732,992 20-foot equivalent units, a standard measure for container cargo, in the month of August. That was down 4.3% from the same month last year. Long Beach’s import volume declined 10.2% while inbound loads in Los Angeles rose less than 1%.

Retailers usually step up imports from Asia in late summer and early fall to prepare for the annual surge in holiday consumer spending. This year’s peak shipping season was expected to be weak as retailers focused on slimming store inventories as more of their customers shop online. U.S. retail sales declined in August, raising concerns about how much consumers would spend for the remainder of the year.

But the volumes coming through Southern California were worse than anticipated. The National Retail Federation and research firm Hackett Associates predicted nationwide imports through major ports would slip 0.4% in August.

Some major East Coast hubs reported strong monthly growth last month. In Virginia, loaded imports rose over 15% from a year ago. In South Carolina, loaded imports rose 7.2% over the same period. And despite the year-over-year decline, the Southern California ports’ August imports were up by more than 7% from 2014.

September volumes could be harder to predict, as they will be the first to reflect the bankruptcy of ocean carrier Hanjin Shipping Co. The shipping line’s failure delayed the delivery of hundreds of thousands of containers and has driven up freight rates on routes spanning the Pacific Ocean. Dockworkers at U.S. ports have faced congestion and delays.

“Millions of dollars worth of merchandise is in limbo at the moment,” the National Retail Federation’s Jonathan Gold said in a statement. He added that many of the delayed containers should be unloaded by the end of the month,, and the NRF predicts imports will rise 5.3% in October compared with last year’s total.

Container Freight Index...................REAd Folks!!!!!!!!!!!!!!!!!!!!!!!!!!

China: Shipbuilding in the doldrums
Global Times

A growing number of shipbuilders in China have gone bankrupt in recent years, plagued by a severe recession in the global shipping industry and capital shortages, industry experts noted.

More than 20 Chinese medium-sized and large shipyards, including Jiangsu Eastern Heavy Industry Co and Sinopacific Shipbuilding Group, have closed since the beginning of 2015, Beijing-based newspaper the Economic Observer reported on Sunday.

Even major companies in East China’s Jiangsu Province, which posted stellar growth in its shipbuilding industry several years ago, are facing tough situations, with some on the brink of collapsing.

For example, leading shipbuilder Huarong Energy posted a loss of 1.96 billion yuan ($293.82 million) in the first half of 2016, according to the company’s financial statement. The shipbuilder’s gross debt totaled 31.12 billion yuan, far exceeding its total assets of 23.44 billion yuan.

“The shipping industry is enduring its worst downturn in its cycle of 200 years, which comes amid a worldwide trade slump,” Wu Minghua, a Shanghai-based independent shipping industry analyst, told the Global Times on Sunday.

The Baltic Dry Index (BDI), a major indicator for the price of transporting iron ore, coal and other raw materials by sea, plunged to an all-time low of 290 points on February 10.

That was far below the 1,500 point threshold at which shipping carriers can make a profit, according to Wu.

The recent collapse of the world’s seventh largest container-shipping line, South Korea’s Hanjin Shipping Co, further shows the difficulty faced by the industry.

“The shipping industry is confronted with overcapacity issues. About 30 percent of the space in ships is empty,” Wu said, noting that the halt of new orders has been a problem for shipyards.

But what’s worse is the capital drain that has hit many shipbuilders, as “shipbuilding is a capital-intensive industry with a cost averaging tens of millions of yuan,” experts noted.

“A shipowner’s down payment for an order has dropped from the previous 20 percent to 30 percent to less than 10 percent this year,” Wu explained, noting that this put strains on shipbuilders’ capital, as they need to pay in advance.

Lenders are gloomy on the prospects of the shipping industry, which makes it difficult for shipbuilders to secure finance through loans. They are left with no option but to undergo bankruptcy, the Economic Observer reported, citing industry players.

It is likely that more shipbuilding companies, especially the private small and medium-sized ones, will meet their demise, experts forecast. 

Once again, the rosy view on U.S. economy wilts

A string of disappointing results on the U.S. economy in the past several weeks has all but ensured that interest rates will remain ultra-low for consumers and businesses for another few months.

Federal Reserve bigwigs meet this week to debate when to raise a key short-term U.S. interest rate. The outcome, however, is not expected to be a cliff-hanger. Wall Street investors only see a 15% chance that the Fed will hike rates.

The final nail in the proverbial coffin may have come with a decline in retail sales and manufactured goods in August, reflecting persistent caution on the part of consumers and businesses.

“The August data have nearly run the table to the disappointing side,” said Douglas Porter, chief economist of BMO Financial Group.

That’s not to say the economy is weak or that it would tank if the Fed gently nudged rates higher. After all, the benchmark fed funds rate sits near a modern historic low that ranges from 0.25% to 0.50%. Consumer and corporate loans are sensitive to changes in the fed funds rate.

All it means is the economy is not so strong that higher rates are a foregone conclusion. While consumers are spending at a moderate pace, businesses have scaled back investment amid a decline in profits. Energy producers, manufacturers and exporters have been particularly hard hit.

With so many key segments of the U.S. struggling, growth is like to average less than 2% in 2016, even if the economy speeds up in the final four months.

A small slice of economic bellwethers this week probably won’t alter the outlook. Housing starts, or new home construction, has been gradually increasing and so have sales of previously owned homes. The housing market is one of the strongest parts of the economy right now.

Yet sales and construction usually slow after kids go back to school as most families try to settle in before the new academic year. Rising prices and a shortage of available properties have also constrained sales even though more families are interested in buying a home.

The two-day meeting of the Fed, on Tuesday and Wednesday, will attract virtually all the attention on Wall Street this week. After the meeting, Chairwoman Janet Yellen could offer more clues on when the Fed will raise rates in her quarterly press conference.

For now, the Fed remains divided. Some senior officials believe the odds of the economy underperforming are much greater than the chances of it overheating. Certainly that’s been the pattern since the U.S. exited the Great Recession in the middle of 2009.

The rosier view takes into account a 4.9% unemployment rate, rising incomes and higher household wealth to support the notion that consumers will continue to carry the economy. The past two years has seen the biggest increase in consumer spending since before the recession.

Even that bit of good news is not entirely positive. Soaring rents and higher health-care costs are taking a bigger bite out of household incomes, according to an index that tracks the cost of living. Rents are rising at the fastest pace since 2008 and medical expenses posted the biggest increase in August since 1984. 

With no growth locomotive, world economy struggles to gain speed
By Rich Miller

WASHINGTON – Here’s what’s wrong with the world economy: No nation has the will or the way to be the locomotive for global growth.

The Federal Reserve looks set to hold off from raising interest rates again this week partly because of concerns that such a move would drive up the dollar and thus boost U.S. imports. China is grabbing a greater share of world markets even as it professes a desire to reorient its economy away from exports. And Europe is also scavenging for demand to help contain Brexit-fed forces that are trying to pull the trading bloc apart.

“I don’t see a locomotive coming down the tracks,” said Professor Barry Eichengreen of the University of California, Berkeley. “The U.S., China and Europe are all preoccupied by local problems.”

The probable result: World growth will remain trapped in the 2 to 3 percent channel that it’s been in since 2010. That is a performance that International Monetary Fund Managing Director Christine Lagarde has derided as “the new mediocre” and compares with the 3.6 percent average that prevailed in the five years prior to the 2008-09 global recession.

“We have at least another year of moving sideways, of being stuck in second gear,” said Nariman Behravesh, chief economist for consultants IHS Inc. in Lexington, Massachusetts. He sees world gross domestic product expanding 2.8 percent next year after climbing 2.4 percent in 2016.

Behind the lackluster out-turn: Monetary policymakers in Japan and the eurozone have “kind of run out of firepower” to spur their economies, said Charles Collyns, chief economist for the Institute of International Finance in Washington. The Bank of Japan is scheduled to report Wednesday on a comprehensive assessment of the efficacy of its monetary measures and decide on its future stance.

While fiscal policy will increasingly come into play, it will be mostly a “holding operation” that will keep growth in mature economies more or less steady, Collyns, a former U.S. Treasury official, added.

As the world’s largest economy, the U.S. has frequently played the role of global locomotive in the past. But with U.S. growth averaging just 2.1 percent since the end of the recession, American policy makers have been reluctant to see the country take on too much of that role.

“What I tell my colleagues around the world is, we can’t be the only engine in the world economy,” U.S. Treasury Secretary Jacob Lew said at a conference in New York on Sept. 13. “There needs to be multiple engines.” 

Oil Under Fire As OPEC Head Sees No Deal
By Evan Kelly

Oil prices dived on Monday after OPEC Secretary General Barkindo downplayed a potential output freeze deal, but rebounded slightly on Tuesday morning.


• The EIA initiated data coverage on drilled but uncompleted wells (DUCs), to be included in its monthly Drilling Productivity Report.

• The current estimates put the DUC list at 4,117 across the four major shale basins (Bakken, Eagle Ford, Niobrara, and Permian). There are also 914 DUCs in the three large natural gas basins (Haynesville, Marcellus, and Utica).

• The DUC list in all of the oil regions increased between 2014 and 2015, but has declined by about 400 over the past five months. The natural gas DUC list, on the other hand, has more or less declined since December 2013.

Market Movers 

How Bad Off Is Oil-Rich Venezuela? It’s Buying U.S. Oil

EL FURRIAL, Venezuela — One oil rig was idle for weeks because a single piece of equipment was missing. Another was attacked by armed gangs who made off with all they could carry. Many oil workers say they are paid so little that they barely eat and have to keep watch over one another in case they faint while high up on the rigs.

Venezuela’s petroleum industry, whose vast revenues once fueled the country’s Socialist-inspired revolution, underwriting everything from housing to education, is spiraling into disarray.

To add insult to injury, the Venezuelan government has been forced to turn to its nemesis, the United States, for help.

“You call them the empire,” said Luis Centeno, a union leader for the oil workers, referring to what government officials call the United States, “and yet you’re buying their oil.”

The declining oil industry is perhaps the most urgent chapter of Venezuela’s economic crisis. Oil accounts for half of the Venezuelan government’s revenues, what former President Hugo Chávez once called an “instrument of national development.” The state oil company poured its profits, more than $250 billion in all from 2001 to 2015, into the country’s social programs, including food imports. 

For Venezuela, a Debt Default Trigger Is Armed

A number of recent developments, protests on Thursday notwithstanding, have raised the odds that Venezuela could default on its foreign debt repayments, triggering a cascade of events that would destabilize the country. Though the country has lived with the specter of default for years, Venezuelan officials have shown a willingness — given the existential threat that a default would pose to the current government — to cut imports and do whatever it takes to raid national coffers so funds will be available to continue making its debt payments. The country's rulers have relied primarily on its security forces to contain the unrest spawned by those tactics. But Venezuela's debt problems have now turned critical, in large part because of the pressure the U.S. government is placing on major banks to keep their distance from illicit Venezuelan financial flows.

In July, U.S.-based Citibank decided to stop processing some debt payments to Venezuela's bondholders by state oil company Petroleos de Venezuela (PDVSA), citing a periodic risk-management review. The institution told bondholders that it would end its role as PDVSA's principal pay agent and suspend its processing of at least seven debt bonds, including some due later this year and in 2017. This will force the oil company to hunt for another institution willing to process those payments. Citibank's decision brings with it considerable risk for Venezuela. If PDVSA is unable to pay bondholders because it cannot find an alternate payment processor, it would effectively be in default. Given the nature of PDVSA debt contracts, a default could trigger a lengthy court battle, which would have significant implications not only for PDVSA's financial future but also for Venezuela's social stability. At the least, a default would spell a volatile financial road ahead for Venezuela.

Citibank's decision appears to have been motivated by its notification of ongoing investigations (particularly by the U.S. departments of Justice and the Treasury) of alleged criminal activities by individuals associated with PDVSA. According to one source, concerns about money laundering involving PDVSA influenced the move. There are also reports that additional sanctions by the United States against additional Venezuelan political figures and state institutions could be forthcoming. The bank's final decision was motivated by the regulatory risk in continuing to process the payments. Several other banks, such as UBS, Santander Private Banking, Banco Safra and HSBC, are also unlikely to process PDVSA debt payments, given the growing risks. PDVSA is currently attempting to execute a bond swap to fulfill debt payments due in 2017, although it is unclear whether its interest in a swap is related to the problems with finding a pay agent or concerns about its financial ability to make upcoming payments.

The decision by Citibank and the rising perception of risk among other financial institutions places the Venezuelan government in a tenuous position. Missing a single foreign debt payment would place PDVSA in default, which would most likely lead to lawsuits by international bondholders and a disorderly legal battle. That process, which could resemble Argentina's nearly 15-year battle with creditors, would open the door for further political and economic chaos in Venezuela. An inability to pay bondholders would eventually lead to a debt restructuring process, but PDVSA, which relies on credit to pay operating costs, would likely suffer a loss of production, as lenders would be less willing to extend credit to a bankrupt company. A significant drop in oil production would exacerbate the country's instability. The flow of dollars to public finances, which are crucial to paying for imports of food and other necessary products, would be reduced, intensifying already extreme inflation and driving more social unrest.

""Falling Crude Oil Prices"" Will lead to Credit DEFAULTS, Bankruptcies and Sovereign Credit Events Around the World!!!!!!!!!!!!!!!!!!!!! 

The Coming CORRECTION Will Unleash the Greatest Cycle of Wealth Destruction in the History of Money!!!!!!!!!!!!!!!!!!!!!!!!!!