June 22: Daily Contrarian Reads

Is Trump a Modern Caesar?

Like Julius Caesar, President Trump has put on the purple. He dares to rule. And now, others – jealous, fearful rivals – sharpen their knives. Here at the Diary, we too have compared the president to Caesar. We did so fancifully. Today, we take up the subject more seriously. Is Trump a modern Caesar? Are his adversaries traitors? Or patriots? Julius Caesar was a remarkable fellow. His father died when he was 16, leaving his son with little money. Worse, he left the family on the wrong side of a civil war.

Ford To The Donald: Here’s Why We Are Going To China

And sure enough, today Ford announced parts of that 100-day plan. “Manufacturing actions centered on improving the company’s operational fitness,” it called them. The biggie was that it would switch production of the “exciting new Focus” from plants in Mexico and Michigan to China, and that it will import those Chinese-made Focuses to the US…..

Washington’s New Rush To War In Syria

The downing of a Syrian fighter jet by the United States – and, more recently, of an Iranian drone – augurs a confrontation that could take us down the road to World War III. The US media is echoing the Pentagon’s explanation, which is that the Syrian jet bombed (or was threatening to bomb) units of the US-supported Syrian Democratic Forces (SDF) around the town of Tanf. The Syrians say they were attacking forces aligned with ISIS, which both the US and the Syrian government are supposedly fighting.

Why The (Collapsing) Global Credit Impulse Is All That Matters: Citi Explains

One week ago, we reported that UBS has some “very bad news for the global economy”, when we showed that according to the Swiss bank’s calculations, the global credit impulse showed a historic collapse, one which matched the magnitude of the impulse plunge in the immediate aftermath of the financial crisis.

SocGen: The Fed Is Raising Rates Too Slowly To Contain Asset Bubbles

Yesterday, when looking at the divergence between the slowing US economy and the Fed’s insistence on hiking rates, Bank of America’s David Woo asked if there is a different motive behind the Fed’s tightening intentions, namely is the Fed trying to pop the market asset bubble: “Can it be the case that its hawkishness was prompted by something other than its reading of the economy? For example, is it possible that the Fed has become concerned about the recent surge in the equity market, especially tech stocks that has been feeding off low interest rates and low volatility? According to our equity strategists, the P/E of the tech sector (19x) is currently at its highest levels post-crisis while the EV/Sales ratio is at the highest sinec the Tech Bubble”

Guess Who Got Immunity—-Robert Mueller III

Robert Mueller III, the former FBI director who now heads the wide-ranging investigation into alleged misdeeds by President Trump and his associates, just dodged a major legal bullet himself. On Monday, the U.S. Supreme Court gave him and other former senior Bush administration officials legal immunity for the vicious abuses committed against more than 700 foreigners who were rounded up with little or no cause after the 9/11 attacks……Dozens of the hapless victims were held at the Administrative Maximum Special Housing Unit in Brooklyn’s Metropolitan Detention Center (MDC), which was the subject of two scathing reports by the Bush Justice Department’s own Inspector General in 2003. Besides documenting a wide range of abuses, the reports concluded that staff members brazenly lied about the rough treatment they meted out.

A World Without 3% Growth

In this context, “reflation” is nothing but a fad – just as the last two were. It is, as noted yesterday, a mischaracterization of the circumstances we find ourselves trapped within. The people are looking at least for answers, that is why Donald Trump was elected and Bernie Sanders, an avowed socialist, nearly made it to the nomination against him. The rest of the so-called establishment has already given up……

2017 Recession Odds—-About 100%!

Tuomas Maln is CEO of GnS Economics. He argues that today’s credit flows of commercial and industrial loans have not been this negative for 27 years… outside a recession anyway. Sometimes credit flows turn negative before a recession, he notes. And sometimes after. During the 2008 crisis for example, Malinen notes that credit flows didn’t veer negative until the economy already entered recession. But before the shorter recessions of 1990 and 2001, he says credit flows started falling three–six quarters before the recession. Overall though, Malinen says the relationship between negative credit flows and recessions holds true since 1948. And here’s where the needle scratches the wax.

Retail Apocalypse, Carmageddon——The Demographic Roots

And we called both decades ago! Autos are the last splurge for aging Baby Boomers. Their kids leave the nest and finally the parents can buy the car they wanted, not that damned minivan to taxi kids around. But as we age, we don’t drive nearly as much and those luxury or mid-life-crisis sports cars last a long time.

Illinois Fiscal Crisis Gets Really Dire—–Powerball And Mega Millions Lottery Sales May Be Halted

The state lotto requires a payment from the legislature each year. The current appropriation expires June 30, meaning no authority to pay prizes. In anticipation of a budget deadlock, the state already is planning to halt Powerball and Mega Millions sales.  “It is disappointing that the legislature’s inability to pass a budget has led to this development and will result in Illinois lottery players being denied the opportunity to play these popular games,” Illinois Lottery Acting Director Greg Smith told Fox News. “We’re like a banana republic,” Rauner said earlier this month, after the General Assembly failed, yet again, to pass a budget package by the regular session deadline. “We can’t manage our money.”