January 9: Daily Contrarian Reads

Chairman Powell Spills The Beans—-The Fed Is Short “Vol”

[W]hen it is time for us to sell, or even to stop buying, the response could be quite strong; there is every reason to expect a strong response. So there are a couple of ways to look at it. It is about $1.2 trillion in sales; you take 60 months, you get about $20 billion a month. That is a very doable thing, it sounds like, in a market where the norm by the middle of next year is $80 billion a month. Another way to look at it, though, is that it’s not so much the sale, the duration; it’s also unloading our short volatility position.

Steve Bannon, David Stockman, and The Need to Spill One’s Guts to Liberals

I can come no closer. However, Bannon’s fall reminds me of what happened to David Stockman in the 1980s. In some ways, the comparison seems inapt. Stockman, who served as President Reagan’s director of Office of Management and Budget, was a buttoned-down policy wonk (or so he seemed at the time) with no apparent desire to lead a national political movement, though he had been elected to public office (the U.S. House) — something Bannon has never accomplished.

Cryptos Versus Blockchain

Being built on top of a not-ready-for-prime-time DLP (Bitcoin Blockchain) is just where Bitcoin’s shortcomings begin. The story gets a lot worse.

Now Comes The Hangover—-US Households Are Deep In Hock

Will 2018 be the year of the household hangover? The latest data on the saving rate, which broke under 3 percent to 2.9 percent in November, the lowest since 2007, suggest that an encore to the ebullient buying over the holidays will not happen in the new year.

Goodbye Internet Socialism—-Down With Net Neutrality!

At long last, with the end of “net neutrality,” competition could soon come to the industry that delivers Internet services to you. You might be able to pick among a range of packages, some minimalist and some maximalist, depending on how you use the service. Or you could choose a package that charges based only on what you consume, rather than sharing fees with everyone else. Internet socialism is dead; long live market forces.

From Shahs To The CIA: The History Of Western Intervention In Iran – Part 1

But the Islamic Revolution and subsequent American embassy hostage crisis which shocked the world, catching the West completely off guard, did not materialize in a vacuum. The chaotic domino effect which would lead modern Iran into the hands of the Ayatollahs was set off from the moment the CIA intervened with its 1953 coup d’état in Tehran, which became known as ‘Operation Ajax’.

Why Investors Should be ‘Terrified’ about the ‘Exponential’ Risk Associated with Dow 25,000

“We’re really terrified,” Paul Gambles, managing partner at MBMG Group, told CNBC. When asked why he believed traders should avoid investing in stocks given the “Goldilocks” global growth conditions, Gambles said: “In the first three versions of the Goldilocks story, Goldilocks actually died horribly, and we think that could well happen again [to stocks].”

The QE Party’s Over—-Even At BOJ

In reality, after years of blistering asset purchases, the Bank of Japan disclosed today that total assets on its balance sheet actually inched down by ¥444 billion ($3.9 billion) from the end of November to ¥521.416 trillion on December 31. While small, it was the first month-end to month-end decline since the Abenomics-designed “QQE” kicked off in late 2012.

It’s For Real—North/South Korean Dialogue Could Avoid Disaster

The potential reopening of North-South dialogue is an important development prompting many pundits to speculate as to whether Kim Jong Un is serious or whether it is merely a tactic. Certainly, the North Koreans recognize the potential for driving a “wedge” between Washington and Seoul by launching such an initiative. But this isn’t just a tactic—a close examination of Pyongyang’s January 3 announcement on opening the inter-Korean communication channel makes it clear that this is the “gold standard” when it comes to North Korean initiatives. It is very serious.

New President—Same Old B(L)S

Candidate Trump railed against the fake data put out by the BLS. He railed about the ridiculously low interest rates manufactured by the Fed. He declared the stock market was a bubble ready to burst. That was over 5,000 points ago. As expected, now that he is el presidente, Trump embraces the fake data, low interest rates and the most overvalued stock market in history. He tweets about the great economy and stock market every day. GDP has risen at a scintillating 2.5% pace in 2017. This is up from 2% in the prior two years, driven by people going further into debt to survive or buy sh*t they don’t need.