February 21: Daily Contrarian Reads

Now He Tells Us: Greenspan Says Debt-O-Mania Would Have Been Prevented By Gold Standard

“Today, going back on to the gold standard would be perceived as an act of desperation. But if the gold standard were in place today, we would not have reached the situation in which we now find ourselves,” he said.“[T]here is a widespread view that the 19th Century gold standard didn’t work. I think that’s like wearing the wrong size shoes and saying the shoes are uncomfortable! It wasn’t the gold standard that failed; it was politics.” And the punchline: “We would never have reached this position of extreme indebtedness were we on the gold standard, because the gold standard is a way of ensuring that fiscal policy never gets out of line.”

S&P 500 Earnings Stuck at 2011 Levels, Stocks up 87% Since

The S&P 500 stock index edged up to an all-time high of 2,351 on Friday. Total market capitalization of the companies in the index exceeds $20 trillion. That’s 106% of US GDP, for just 500 companies! At the end of 2011, the S&P 500 index was at 1,257. Over the five-plus years since then, it has ballooned by 87%! These are superlative numbers, and you’d expect superlative earnings performance from these companies. Turns out, reality is not that cooperative. Instead, net income of the S&P 500 companies is now back where it first had been at the end of 2011.

Presidential Spending Champs—-Why Trump Could Easily Top Obama, Bush And Reagan

If these trends — especially those of the George W. Bush years — are any indication of the future, we should now brace ourselves for big increases in government spending under Trump. After all, Trump has given no indication whatsoever of cutting federal spending. He did not run on a campaign of budget cutting, and he has only spoken of increasing government spending whether for a infrastructure projects or as lavish amounts of new spending on military programs.

Housing Bubble 2.0—-FHA Mortgage Delinquencies Jump in Q4

As the boom and bubble persists, we are starting to see more signs that it is 2006 all over again. The Federal Housing Administration (FHA) mortgage delinquencies spiked in the fourth quarter for the time since 2006, a time when the housing bubble was on the cusp of popping. According to a report from the Mortgage Bankers Association (MBA)‘s National Delinquency Survey, the seasonally adjusted FHA delinquency rate jumped to 9.02 percent, up from 8.3 percent in the third quarter.

There’s a Difference: Fake News And Junk News

The mainstream media continues peddling its “fake news” narrative like a desperate pusher whose junkies are dying from his toxic dope. It’s slowly dawning on the media-consuming public that the MSM is the primary purveyor of “fake news”– self-referential narratives that support a blatantly slanted agenda with unsupported accusations and suitably anonymous sources…..Junk news is like junk science–cherry-picked to support a corporate agenda–and like junk food in being digestible but toxic. As this brilliant essay explains, the unemployment rate is an premier example of junk news (and junk economics–a thriving subculture of junk science and junk news–just read any Paul Krugman spew for an example.)

Here Comes Another Populist Takeover—-Renzi’s PD Party Splitting, Paving Way For Beppe Grillo’s Five Star Movement

Eurointelligence goes one further and suggests it’s a done deal, not just a threat….PD is the only major political party that is solidly behind the euro. Moreover, Renzi’s coalition math will plunge with this split…..Whether you label an Italian exit from the eurozone “Italexit” or “Italeave”, those who conclude it cannot happen are barking up the same tree as those who said Trump could never win and Brexit could not happen.

Democrats & Liberals Catch McCarthyite Fever

High-level wrongdoing! Colluding with the enemy! Shock and incredulity! It’s enough to make a concerned citizen reach for the nearest bottle of 151-proof rum. But it’s all nonsense. Liberals are working themselves into a crisis mode on the basis of zero evidence.……High-level wrongdoing! Colluding with the enemy! Shock and incredulity! It’s enough to make a concerned citizen reach for the nearest bottle of 151-proof rum. But it’s all nonsense. Liberals are working themselves into a crisis mode on the basis of zero evidence. 

Stock Investors’ Breathtaking Complacency

This divergence has pushed the so-called complacency index, which relates the ratio between enterprise value and Ebitda in the MSCI World Index to the VIX, to its highest level in at least two decades. The gauge peaked on Jan. 27 at 1.145, but the 1.139 it logged on Tuesday is the third highest since at least 1997. The benchmark has been unusually high over the past two years thanks to the endless generosity of central banks, as I have written about before.

Obama’s 11th House Rule Change For Spy Info Sharing Has Generated A Gusher Of Deep State Leaks

There was a sea-change here at the NSA with an order that came from president Obama 17 days before he left office where he allowed the NSA who used to control the data, it now goes to 16 other agencies and that just festered this whole leaking situation, and that happened on the way out, as the president was leaving the office. Why did the Obama administration wait until it had 17 days left in their administration to put this order in place if they thought it was so important. They had 8 years, they didn’t do it, number one. Number two, it changed the exiting rule which was an executive order dating back to Ronald Reagan, that has been in place until 17 days before the Obama administration was going to end, that said the NSA gets the raw data, and they determine dissemination. Instead, this change that the president put in place, signed off by the way by James Clapper on December 15, 2016, signed off by Loretta Lynch the Attorney General January 3, 2017, they decide that now 16 agencies can get the raw data and what that does is almost creates a shadow government. You have all these people who are not agreeing with President Trump’s position, so it just festers more leaks.

The Founder: Celebrating Entrepreneurial Perseverance

The defining moment in the spectacular new movie “The Founder” has Harry Sonneborn (B.J. Novack), then an executive with Tastee Freeze, explaining to Ray Kroc (Michael Keaton), after going over McDonald’s books, why his (and the McDonald brothers) company was growing like a weed but dying on the vine. Kroc didn’t control any of the real estate, and Sonneborn tells him flatly, “You’re not in the burger business, you’re in the real estate business.”