November 23: Daily Contrarian Reads

Why Bond Yields Are Rising—-The End Of The QE Bubble, Not Reflation And Growth

As Filia puts it, “what if consensus is wrong: what if rates are rising due to the end of Quantitative Easing and not because of reflation/escape velocity on growth?” He continues: Rates then rise without growth, perhaps even without much inflation. Indeed, rates started rising back in August, on momentous shifts in policy by BoJ (forced by capacity constraints and collateral damage). Such scenario is not good for equities, contrary to what currently believed by markets.” Indeed, such a scenario would be the worst possible one: with potential stagflation on the horizon, the last thing markets can afford is a withdrawal in central bank support just as US deficit funding needs are set to spike…..

Please, Donald, Pick Military Vet Tulsi Gabbard—–Enough Neocon Interventionism

The latest sign was Trump’s invitation for a meeting with Rep. Tulsi Gabbard, D-Hawaii, on Monday. The mainstream media commentary has almost completely missed the potential significance of this start-of-the-work-week meeting by suggesting that Trump is attracted to Gabbard’s tough words on “radical Islamic terrorism.” Far more important is that Gabbard, a 35-year-old Iraq War veteran, endorsed Sen. Bernie Sanders in the Democratic primaries because of his opposition to neocon/liberal-hawk military adventures…..“Bernie Sanders voted against the Iraq War,” Gabbard says. “He understands the cost of war, that that cost is continued when our veterans come home. …..In the ad, Gabbard threw down the gauntlet to the neocons and their liberal-hawk sidekicks, by accusing them of wasting trillions of dollars “on these interventionist, regime change, unnecessary wars.” Her comments mesh closely with Trump’s own perspective.

Money Market Update—It’s The Dollar Again

Behind it all was this Chinese connection to “dollars”, easily established just in the visualization of the TED spread. Since August 10, 2015, the paradigm has clearly changed; not only is it rising overall, the manner in which it has increased is far more volatile and uneven. The reason for that is this T-bill component, which tells us of Chinese pressure (meaning “dollar” pressure on China). The TED spread rises as a liquidity warning and then falls as liquidity actually and severely strains Chinese abilities, and then manifests in different ways throughout different parts of the “dollar” system transmitted by whatever it is the PBOC does as a coping mechanism.

Threat Inflation and Flynn’s Hysteria About  ‘World War’

Flynn grossly exaggerates the threat and proposes more war for decades to come as the answer, and this is the person whose judgment Trump trusts enough to make him his National Security Adviser. The danger is that Trump either already shares Flynn’s views, or that he is so malleable that he eventually will. Any president advised by someone with such a hard-line and dangerous view of foreign threats would be at risk of making bad decisions because of the terrible advice he would be receiving, but a president with no previous foreign policy or government experience is even more likely to heed that advice.

Donald Trump’s Awesome Opportunity—-Fix The Fed

This means that should Yellen and Fischer follow custom and concede their board seats, Trump will have the opportunity to replace four of the Fed’s seven leading officials with conservative figures during his presidency…..Trump’s appointments can help us win this civil war, shifting the Fed to a conservative majority for the first time in decades (or maybe ever?). The stakes couldn’t be higher. Here’s to hoping that the business mogul listens to his heart, as well as his capable economic advisers, and does the right thing. The fiscal stability of our nation depends on it.

Why A $100 Billion Chinese-Made City Near Singapore Scares The Hell Out Of Everybody

While Chinese home buyers have sent prices soaring from Vancouver to Sydney, in this corner of Southeast Asia it’s China’s developers that are swamping the market, pushing prices lower with a glut of hundreds of thousands of new homes. They’re betting that the city of Johor Bahru, bordering Singapore, will eventually become the next Shenzhen. “These Chinese players build by the thousands at one go, and they scare the hell out of everybody,” said Siva Shanker, head of investments at Axis-REIT Managers Bhd. and a former president of the Malaysian Institute of Estate Agents. “God only knows who is going to buy all these units, and when it’s completed, the bigger question is, who is going to stay in them?”

The Lull Before The Storm—-Financial Carnage Dead Ahead

As Trump focuses on filling his cabinet posts and preparing for his inauguration eight weeks from now, the forces of evil are gathering strength and preparing for battle. We are in the midst of the lull before the storm. Nothing has changed since the election from a debt crisis perspective. It seems the mainstream media pundits are purposely asleep at the wheel as the Obama administration has dialed the government spending up to 11. Obama has made it his mission to reach $20 trillion in debt before he departs. At the current rate of debt accumulation, he will reach his goal by mid-December. The Obama administration has increased the national debt by $324 billion in the first 48 days of the fiscal year. That’s a rate of $6.75 billion per day. The rate of accumulation last year was $3.3 billion per day. This is out of control, and not a peep from the propaganda media, or incoming administration.

When They Come For Your Cash Chaos Ensues—-A Monetary Firestorm Rages In India

Citizens of India learned, with only a few hours’ notice, that their 500 and 1,000-rupee notes were no longer legal tender. Those are—or were—the country’s largest-denomination bills and the foundation of a huge underground economy. Now they’re just paper. The results were what you would expect: confusion, chaos, and fear. Nevertheless, you can bet other governments watched closely. India could be just the first cash domino to fall.

A Foretaste Of The Political Chaos Ahead—-Trump Smacks The Media Bigwigs

Just yesterday Trump called a summit of all the major mainstream media executives and anchors at Trump Tower.  While many expected the meeting to be an oppotunity to ask questions of the president-elect, the media elites apparently got the surprise of their lives when Trump spent the majority of the meeting attacking they’re blatant biased coverage the 2016 presidential elections referring to the room as a bunch of “dishonest, deceitful liars.”  One participant in the meeting described it as af—ing firing squad” after “Trump started with Jeff Zucker and said “I hate your network, everyone at CNN is a liar and you should be ashamed….”  We suspect that was rather less cordial than they expected.

Brexit, Trumped! and Now Frexit—–Anti-EU Marine Le Pen Takes Huge Lead In French Polls

As the Independent writes in “Marine Le Pen takes huge lead over nearest rival in new French presidential election poll“, according to the latest, Nov. 20, Ipsos poll, Le Pen had 29% of the vote when pitted against Nicolas Sarkozy, who was eight points behind, and held a 15-point lead over the Parti de Gauche’s Jean-Luc Mélenchon in the poll released by Ipsos, which analysed five scenarios with different frontrunners.