April 11: Daily Contrarian Reads

Look Out Below!  There’s No “Price Discovery” Under Index/Robo Driven Markets

“Each day since the election $1bln has moved from active to passive management,” said VICE, standing in the shadow of America’s mountain of private wealth assets. When you buy the S&P 500, you pay the prevailing price for every one of those stocks….There is no such thing as price discovery in index investing.” And there will be no price discovery on the downside either. The stocks that have been blindly bought on the way up will be blindly sold on the way down… 

Trump’s Base Revolts Against Syria Strike

President Trump’s former enemies in the mainstream media, which he has characterized as purveyors of “fake news,” turned on a dime the moment he bombed Syria: the Establishment was thrilled that, suddenly, he was acting “presidential.” CNN, a particular target of the President’s ire, was gushing: NBC’s Brian Williams, in a bizarre turn of phrase, hailed the “beauty” of the bombing, which killed a number of civilians. Democratic party politicians, with few exceptions, stood at attention and saluted, while Trump’s Republican critics – notably John McCain and Lindsey Graham – praised the President while taking the opportunity to agitate for more extensive military action………On the other hand, conservative media that has been supportive of Trump reviled the  move: Breitbart readers weren’t happy, and neither were some of the writers. Ann Coulter was furious, and Laura Ingraham was hardly supportive. Michael Savage declared himself a “conservative peacenik,” Tucker Carlson was very skeptical, and on Twitter, the “Trump trolls” were trolling their former hero. British populist Nigel Farage, who led the Brexit referendum to victory, and who endorsed Trump, opined that Trump voters “will be scratching their heads” in bewilderment. Even over at National Review, a neocon redoubt, the voice of dissent was raised.

Citi: Central Banks “Took Over” Markets In 2009; In December The “Unwind” Begins

Citigroup’s crack trio of credit analysts, Matt King, Stephen Antczak, and Hans Lorenzen, best known for their relentless, Austrian, at times “Zero Hedge-esque” attacks on the Fed, and persistent accusations central banks distort markets, all summarized best in the following Citi chart…..

Great Debt Unwind: Consumer Bankruptcies Jump, First since 2010. Commercial Bankruptcies Spike

Commercial bankruptcy filings, from corporations to sole proprietorships, spiked 28% in March from February, the largest month-to-month move in the data series of the American Bankruptcy Institute going back to 2012. They’re up 8% year-over-year. Over the past 24 months, they soared 37%! At 3,658, they’re at the highest level for any March since 2013.

Wonderland On The Potomac

The persistent hyperRussomania of the US Dem-Prog alliance and its sob-sisters in the media seeks to make a bad situation worse in Syria and probably for the worst reasons. How many Americans have even the dimmest idea what’s going on in Syria, who the cast of characters there represent, and where the USA fits into all of it?……One hypothesis is that the struggle is over who gets to run gas and oil pipelines through Syria to get easier access to the Mediterranean Sea and the European energy market. Iran would very badly like to do that. But they are in competition with the Kingdom of Saudi Arabia and Qatar, the little giant emirate of natural gas. So, you have the Iran/Shia gang on one side and the KSA/Qatar/Sunni on the other side.

Getting Real: The Raging Fire In The Hold Of The SS Eutanic

Fascinating new evidence has emerged this year to show that Titanic was not only going far too fast when it entered a known field of icebergs, it also had a raging fire in the coal hold that eventually sealed its fate. While some think the Titanic analogy in relation to the eurozone is overdone, it now looks like it could be uncannily accurate.

Cash Is Dead. Long Live Cash.

As credit card use and digital payment systems like Venmo and Android Pay spread, Americans use less and less cash to buy things. Yet the amount of bills and coins in circulation continues to grow: Hard currency as a percentage of U.S. gross domestic product is now at 8.6%, the highest level since the early 1950s, an era long before the widespread use of plastic and smartphones. Europe, Japan, and Australia have similar trends.

More Evidence Americans are Becoming Obsessed with putting Everything on Credit

After a lull in the wake of the Great Recession, credit cards are once again being used with increased frequency. The Federal Reserve reported last week that collective credit card debt in the U.S. had reached $1 trillion. Credit-card debt and auto loan debt balances for people ages 60 and older have also risen since 2008, that Fed data showed, whereas credit-card debt for those 59 and younger has fallen. The Fed, when describing that phenomenon, said lending standards have tightened since the recession, and those who are older may also be more creditworthy.

Why Is Trump Rescuing Al-Qaeda’s ‘Heartland’ in Syria?

For the al-Qaeda-allied rebels who were ousted from their stronghold in eastern Aleppo in December 2016, and whose gains in a recent series of offensives have been rapidly reversed, Western military intervention is the only hope….. For the al-Qaeda-allied rebels who were ousted from their stronghold in eastern Aleppo in December 2016, and whose gains in a recent series of offensives have been rapidly reversed, Western military intervention is the only hope. The reality is that Idlib is substantially controlled by al-Qaeda’s Syrian affiliate, which has gone through a series of rebranding schemes but remains the same jihadist group it always was: Jabhat al-Nusra. In the province it rules, al-Nusra has imposed what a leading scholar has described as a Taliban-like regime that has ethnically cleansed religious and ethnic minorities, banned music and established a brutal theocracy in which it publicly executes women accused of adultery.

Thanks, Barry! The Donald Adopts Obama’s Rationale For Illegal, Unconstitutional Wars

After arguing for years that America should not intervene in Syria (and thoroughly criticizing Obama along the way), President Donald Trump reversed course and okayed the launch of missile airstrikes against Syria’s government last week….Just Security, a well-respected national security blog run by several law professors and experts in the field, have obtained a memo that reportedly was developed by the Trump administration as talking points and purports to state Trump’s legal justification for Syria. And guess what? Looks like his attorneys stole the legal justification for the attack on Syria right out of the Obama playbook. Obama’s legal reasoning for intervening in Libya and Trump’s justification couldn’t be more similar.