August 2: Daily Contrarian Reads

Here Comes The Deluge—US Treasury Wants To Borrow One-Half Trillion In Q4

In the first warning sign that the US Treasury is burning through more cash than previously expected, at 3pm today the Treasury Department announced that in its latest forecast of end-of-September cash balance it anticipated only $60 billion of cash on hand, nearly half the $115 billion it forecast in its previous report in May…… However, the second, and more troubling warning sign was that in its initial forecast of calendar Q4 marketable borrowing needs, the Treasury now expects a near record $501 billion in net marketable debt to be issued from October through December. This amount will be nearly equal to the actual marketable debt borrowed in the last 4 quarters, which amounts to $527 billion.

The Final Sign Of The Impending Silicon Valley Apocalypse Arrives: Get Funded, Get Listed, Get Out!

This final sign isn’t “a rider on a pale horse” signalling the end of times for humanity. No, but the similarities are quite striking, for the way I would describe this revelation is this: a venture capitalist riding a bloated, sickly unicorn, thus signaling the impending end of “it’s different this times” has surely arrived – once again. And the resulting devastation (once again) Will. Be. Legend.

Wall Street Needs You—To Borrow Against Your Inflated Stocks!

Wall Street brokerages have been selling billions of dollars in loans backed by stocks and bonds, a trend that yields lucrative fees for the firms but poses risks for borrowers. While banks don’t always report these loans in the same way, these securities-backed loans total at least $100 billion for the biggest brokerages—up exponentially since the financial crisis—with several billions of dollars of additional debt held at smaller brokerages, banking analysts estimate.

Tesla Q2 Earnings Alert—–An Inflection Point For A Lot Of Bad Trends

Here comes that quarterly tap dance between Tesla’s (TSLA) management team and a group of probing analysts, determined to weed out facts from the raw numbers. Others like myself, too low on the totem pole to be invited, will be listening in to the call hoping one of the analysts asks the questions we would pose to management. We could very well be listening to a defensive Elon Musk and team as they attempt to explain how Tesla managed to lose over $400 million (my guess) in a single quarter, which would be the largest quarterly loss in their short history. They just set a loss record last quarter at $397 million.

Why Trump Cut-Off The CIA’s Syrian Rebels Program—It Was Aiding Child Beheaders

Earlier this year, President Donald Trump was shown a disturbing video of Syrian rebels beheading a child near the city of Aleppo. It had caused a minor stir in the press as the fighters belonged to the Nour al-Din al-Zenki Movement, a group that had been supported by the CIA as part of its rebel aid program. The footage is haunting. Five bearded men smirk as they surround a boy in the back of a pickup truck. One of them holds the boy’s head with a tight grip on his hair while another mockingly slaps his face. Then, one of them uses a knife to saw the child’s head off and holds it up in the air like a trophy. It is a scene reminiscent of the Islamic State’s snuff videos, except this wasn’t the work of Abu Bakr al-Baghdadi’s men. The murderers were supposed to be the good guys: our allies.

The Amazon Effect: Retail Bankruptcies Surge 110% In First Half Of The Year

AS Amazon flirts with a $500 billion market cap, letting Jeff Bezos try on the title of world’s richest man on for size if only for a few hours, for Amazon’s competitors it’s “everything must go” day everyday, as the bad news in the retail sector continue to pile up with the latest Fitch report that the default rate for distressed retailers spiked again in July.

Narratives Are Not Truths

The American polity is not thriving. It has been incrementally failing to meet its needs for quite a while now, playing games with itself to pretend that it is okay while its institutional organs and economic operations decay. It turns this way and that way ever more desperately, over-steering like a drunk on the highway. It is drunk on the untruths it tells itself in the service of playing games to avoid meeting its real needs. Narratives are not truths.

The Red Ponzi’s Gray Rhinos Problem

Let the West worry about so-called black swans, rare and unexpected events that can upset financial markets. China is more concerned about “gray rhinos” — large and visible problems in the economy that are ignored until they start moving fast. The rhinos are a herd of Chinese tycoons who have used a combination of political connections and raw ambition to create sprawling global conglomerates. Companies like Anbang Insurance Group, Fosun International, HNA Group and Dalian Wanda Group have feasted on cheap debt provided by state banks, spending lavishly to build their empires.

How the ‘Center’ Is Spinning Apart

……..Secondly, Hizballah has routed – in just four days – Al Qaeda from the Arsal enclave in north Lebanon. Once again, Lebanon is contiguous with Syria, just as Iraq is now contiguous, adjoining and open to Syria. Aided by the psychological shock to insurgents of the news of the halting of CIA of weapons and salaries supplied to (some, not all) insurgent groups, the Syrian army and its partner forces are quite rapidly taking back the Syrian state. The U.S. has decided, it seems, that there are no good options for America in Syria, either. And that, when Raqa’a falls and ISIS is defeated, the White House may well conclude that U.S. objectives there will have been met.

Killing Them Is Killing Us

The war on terror has laid waste to large swaths of the Middle East and Northern Africa. Cities, towns, and villages have been reduced to smoking, bombed-out rubble, chaos reigns, the carnage is ubiquitous. The US military keeps count of its own personnel wounded and killed, a number in the thousands. Civilian casualties —or collateral damage as the military calls it—across Chaostan (Richard Maybury’s apt coinage) are in the millions, as are the number of people displaced (an estimated 11 million in Syria alone). Imagine the American fury and media sensationalism if a small US town was carpet-bombed by a foreign power. YouTube’s servers would melt from the overflow of viewers watching videos of parents pulling their dead children from collapsed homes.