April 4: Daily Contrarian Reads

Risible Denial—-Why Central Banks Lie About The Evident Failure Of Their Own Policies

Looking back on late 2015, it is perfectly clear that policymakers had no idea what was going on. It’s always easy, of course, to reflect on such things with the benefit of hindsight, but even contemporarily it was somewhat shocking how complacent they had become as a global group. In the US, the Federal Reserve “raised rates” for the first time in a decade on the same day they released industrial production figures suggesting the grave possibility of looming recession. In Japan, it was merely more of the usual Keystone Cops routine……..But none of these monetary programs ever does what they are supposed to do, and when it is finally accepted as that case they are all treated almost as if they never occurred, erased from the collective memory as if Stalinist Russia. As noted earlier this week, FRBSF President John Williams gave a speech touting recovery in the US without once mentioning QE.

Stockman Issues Urgent Warning: Trump is Doomed

David Stockman, Reagan’s former budget director, has issued an urgent warning. There’s a HUGE event this month that could send shockwaves through the Trump administration. This is a much BIGGER story than anything you might hear in the mainstream media. If he’s right, there’s a bloodbath coming in just a few days.

The Deep State and Russia-Gate

For the Kremlin-done-it crowd, this was proof that Russian intelligence was involved. But this led to another objection: if the hackers were so super-sophisticated, how could they be guilty of such an elementary mistake? Referring to two of Russia’s top intelligence agencies, Jeffrey Carr, a well-known cyber-security expert, was unable to restrain his sarcasm: “OK. Raise your hand if you think that a GRU or FSB officer would add Iron Felix’s name to the metadata of a stolen document before he released it to the world while pretending to be a Romanian hacker. Someone clearly had a wicked sense of humor.” Sam Biddle, The Intercept’s formidable tech writer, was equally dismissive: “It’s very hard to buy the argument that the Democrats were hacked by one of the most sophisticated, diabolical foreign intelligence services in history, and that we know this because they screwed up over and over again.” As Gregory Elich noted in an excellent roundup on Counterpunch, disguising the origin of a hack is trivial even for beginners. Referring to half-baked amateurs, James Scott, a senior fellow at the Washington-based Institute for Critical Infrastructure Technology, pokes fun at the very idea of cyber-sleuths claiming to know where one originates.

Three Charts Which Show Why Commercial Real Estate Is The Next “Big Short”

A small but growing group of hedge funds are positioning themselves to profit from the collapse of the real estate market. Sounds like 2007, right? It’s actually happening right now. But this time, hedge funds (along with Deutsche Bank and Morgan Stanley) aren’t targeting subprime mortgages—they’re going after commercial real estate…..As a result of falling sales, retailers are shutting up shop at a rate that has not been seen since the 2008 financial crisis.

It’s Nuts Out There—–Musktopia Here We Come!

It ought to be sign of just how delusional the nation is these days that Elon Musk of Tesla and Space X is taken seriously. Musk continues to dangle his fantasy of travel to Mars before a country that can barely get its shit together on Planet Earth, and the Tesla car represents one of the main reasons for it……. Virtue signaling is a status acquisition racket. In this case, you get social brownie points for indicating that you’re on-board with “clean energy,” you’re “green,” “an environmentalist,” “Earth –friendly.” Ordinary schmoes can drive a Prius for their brownie points. But the Tesla driver gets all that and much more: the envy of the Prius drivers! This is all horse shit, of course, because there’s nothing green or Earth-friendly about Tesla cars, or electric cars in general. Evidently, many Americans think these cars run on batteries. No they don’t. Not really. The battery is just a storage unit for electricity that comes from power plants that burn something.

Retail Bankruptcies March Toward Post-Recession High

The number of retailers filing for Chapter 11 bankruptcy protection is headed toward its highest annual tally since the Great Recession. Nine retailers have filed in just the first three months of 2017, according to data provided exclusively to CNBC from AlixPartners consulting firm. That equals the number for all of 2016. It also puts the industry on pace for the highest number of such filings since 2009, when 18 retailers resorted to that action. The rising number of retail bankruptcies comes as consumers are making more purchases online, and shifting their spending toward travel and other experiences. Meanwhile, the supply of physical stores continues to outweigh shopper demand, putting pressure on the industry’s profits.

B-Dud Utters The Unthinkable——Fed’s Bloated Balance Sheet May Shrink Later This Year

And he said the Fed might start reversing QE this year. With this call to shrink the Fed’s balance sheet, he is following in the footsteps of other Fed heads, including Cleveland Fed President Loretta Mester, San Francisco Fed President John Williams, and most notably Boston Fed President Eric Rosengren – a former “dove” who has been publicly fretting about bubbles in commercial real estate and housing and the risks they pose to “financial stability.” So this theme unraveling QE, not in the foggy future but this year, is picking up momentum…..

Meet America’s # 1 Thief:  The DEA Seized $3.2 Billion  Of Cash Without Bringing Charges

Since 2007, the report found, the DEA has seized more than $4 billion in cash from people suspected of involvement with the drug trade. But 81 percent of those seizures, totaling $3.2 billion, were conducted administratively, meaning no civil or criminal charges were brought against the owners of the cash and no judicial review of the seizures ever occurred.That total does not include the dollar value of other seized assets, like cars, homes, electronics and clothing.

The Russkies Did It—–They Control Everything!

…….we all should know in our properly restructured memory banks and our rearranged sense of reality, it was all Russia’s fault! Russia did it by undermining our democratic process through the clever means of releasing truthful information via WikiLeaks that provided evidence of how the Democratic National Committee rigged the nomination process against Sen. Bernie Sanders, revealed the contents of Clinton’s hidden Wall Street speeches, and exposed pay-to-play features of the Clinton Foundation in its dealings with foreign entities.You see the evil Russians undermined American democracy by arming the American people with truthful information! How dastardly is that!

Car Crash Ahead—-Used Vehicle Prices Could Drop By 50%

For months we’ve been talking about the massive lending bubble propping up the U.S. auto market.  Now, noting many of the same concerns that we’ve highlighted repeatedly, Morgan Stanley’s auto team, led by Adam Jonas, has just issued a report detailing why they think used car prices could crash by up to 50% over the next 4-5 years. 

The Pentagon’s Blank Check—–$54 Billion It Doesn’t Need

The $54 billion defense spending boost that the Trump administration wants for next year is strategically misguided and legislatively doomed, though not for the same reason. It is misguided because none of the standard rationales for increasing the Pentagon’s budget—the grind of ongoing wars, the threats from rival states and terrorists, a “crisis” in military readiness—can justify the more than $600 billion that Americans already spend on defense, let alone a 10 percent increase.