NO STRINGS ATTACHED NEWS THAT MAINSTREAM JUST WON'T COVER.
Former Vice President and leading 2020 Democrat presidential candidate Joe Biden is vowing to greatly increase the number of legal immigrants admitted to the United States every year.
http://feedproxy.google.com/~r/breitbart/~3/57U6O3zX5Fg/
3 Polls Show Majority Of Americans Now Support Impeachment As Constitutional Crisis Looms
Authored by Michael Snyder via The Economic Collapse blog,
The mainstream media is relentlessly trying to convince the American people that President Trump did something wrong, and to a certain degree it appears to be working.
As you will see below, 3 major polls have found that a majority of Americans now support impeachment. But according to the U.S. Constitution, President Trump cannot be impeached unless he is convicted of a crime.
Article II, Section 4 of the U.S. Constitution sets a very high standard for impeachment:
“The President, Vice President and all Civil Officers of the United States, shall be removed from Office on Impeachment for, and Conviction of, Treason, Bribery, or other high Crimes and Misdemeanors.”
Top Democrats love to give interviews about impeachment, but you will notice that none of them ever point to a specific federal law that President Trump violated, and none of them ever bother to explain how President Trump’s specific behavior fits the elements of any particular federal statute. As a former lawyer, this disturbs me greatly, because the law is supposed to be applied impartially. Either President Trump is guilty of breaking a specific law or he isn’t. You can’t just impeach someone because you don’t like that particular individual, but that appears to be what the Democrats are doing, and in the process they are absolutely trampling on the Constitution.
Unfortunately, a slim majority of the U.S. population now appears to be on the side of the pro-impeachment forces. A little over a week ago, a Fox News survey was the first poll to show this…
A new high of 51 percent wants Trump impeached and removed from office, another 4 percent want him impeached but not removed, and 40 percent oppose impeachment altogether. In July, 42 percent favored impeachment and removal, while 5 percent said impeach but don’t remove him, and 45 percent opposed impeachment.
President Trump blasted that poll on Twitter, but then earlier this week Gallup released a survey with even worse results…
Currently, 52% say Trump should be impeached and removed from office, while 46% say he should not be. This is roughly the opposite of what Gallup found in June when asked in the context of special counselor Robert Mueller’s investigation.
Subsequently, the highly respected Pew Research Center released their own startling poll…
The new survey by Pew Research Center, conducted Oct. 1-13 among 3,487 adults, finds that 54% currently approve of the House’s decision to conduct an impeachment inquiry, while 44% disapprove.
Neither party engenders a great deal of confidence that they will be “fair and reasonable” during the impeachment inquiry, the survey finds. About four-in-ten (43%) expect that the Republicans in Congress will be fair in handling the inquiry, while slightly more (47%) say the same about the Democrats in Congress.
Once can be a coincidence, twice is a trend, and three times means that we have a major problem on our hands.
In fact, an average of all the latest national polls about impeachment shows that “a majority of Americans” now support this process…
For the first time, a majority of Americans said this week that they supported the impeachment of President Trump. Not just in one, outlying poll — in an average of all current national polls compiled by the data journalists at FiveThirtyEight.
From a historical perspective, this is really stunning, because during Richard Nixon’s impeachment process a majority of Americans never supported his impeachment until the very end.
And in Bill Clinton’s case, public support for his impeachment never even reached the 40 percent mark.
So to see that more than 50 percent of Americans are in favor of impeaching Trump is rather stunning, and it shows that the mainstream media still possesses an immense amount of influence in our society.
But even if everything that the Democrats are alleging that President Trump did is 100 percent true, there is still no impeachable offense here.
Whether you are a fan of Trump or not, you should want to see justice done in this case. Ultimately, our representatives in Washington are supposed to be our “public servants”, and they should be treated just like everyone else.
If it can be shown that President Trump’s behavior specifically fits the elements of a specific federal crime, and if that specific federal crime rises to the level of a “high crime or misdemeanor”, then President Trump should accept his fate.
I have gone over all of the “crimes” that the Democrats are accusing Trump of committing, and they must not be reading the federal statutes regarding these crimes very carefully, because Trump’s actions don’t fit any of those statutes.
Look, if Trump was really guilty of a “high crime or misdemeanor”, there would be plenty of Republicans in Congress turning on him by now. And I am not talking about turncoats like Mitt Romney that have their own political agendas.
If President Trump was really guilty, a large number of Republicans would turn on him just like we witnessed during the Nixon saga. When it become clear that Nixon was guilty, members of his own party rapidly abandoned him, and Nixon was forced to resign.
But that hasn’t happened in this case, and it is not going to happen because Trump is not guilty.
Unfortunately, the Democrats are going to draft articles of impeachment anyway, and at this point it looks like the vote in the House is going to go against Trump.
So then the drama will move to the Senate, and Mitch McConnell is telling everyone to be ready for a trial “as soon as Thanksgiving”…
Majority leader Mitch McConnell told Republican senators Wednesday to be ready for an impeachment trial of President Trump as soon as Thanksgiving, as the Senate began to brace for a political maelstrom that would engulf the nation.
An air of inevitability has taken hold in Congress, with the expectation that Trump will become the third president in history to be impeached — and that Republicans need to prepare to defend the president. While McConnell briefed senators on what would happen during a Senate trial, House GOP leaders convened what they expect will be regular impeachment strategy sessions.
The good news is that McConnell has pledged to protect Trump, and that almost certainly means that the effort to remove Trump from office will fail.
But the uproar that the Democrats and the mainstream media are creating over all of this is going to divide this nation even more deeply, and it is setting the stage for the kind of civil unrest that I have long warned about.
When this process is finally over, about half the country is going to end up believing that Trump committed some sort of major crime but that justice was kept from being done by Trump’s Republican friends in the Senate.
There is going to be so much anger on the left, and what makes this situation even more volatile is the fact that we are heading into an election year.
We have never seen anything like this before in American history, and things are about to get very, very ugly.
Tyler Durden Fri, 10/18/2019 - 11:57 Tags PoliticsElon Musk Testifies Under Oath That He's "Financially Illiquid"
Despite being worth about $23 billion, Elon Musk recently testified under oath that he was "financially illiquid".
The revelation came to light as part of a Bloomberg story about whether or not AIG could be on the hook for a claim in Musk's ongoing "Pedo Guy" lawsuit, wherein he is being sued for baselessly insulting British cave diver Vern Unsworth, calling him a "pedo" and "child rapist", before taunting Unsworth to sue him.
Which, of course, Unsworth did.
Musk's lawyers sparred with Unsworth's lawyer, L. Lin Wood, about insurance policies that could cover claims made in the suit.
Unsworth's lawyer wrote on September 20:
"Given Musk's sworn testimony that he is financially illiquid, Mr. Unsworth is entitled to know whether AIG has accepted coverage of the claims, denied coverage of the claims, or has reserved its rights to contest coverage of the claims."
To which Musk's lawyers glibly responded:
"Mr. Musk's insurance carrier was notified of the money-grab. It is a non-event."
We'll see how much of a non-event it turns out to be, especially given the fact that the billionaire, according to him, apparently doesn't have any quick access to cash.
And this isn't the first strange revelation to come from pre-trial litigation that has turned into a field day for Unsworth and his attorney. Last month, we highlighted some of the most bizarre lines from Musk's deposition and discovery, including Musk referring to himself as a "fucking idiot".
The trial is set to start on December 3.
Tyler Durden Fri, 10/18/2019 - 11:36 Tags Law CrimeFed's Second "Not QE" T-Bill POMO Is 4.8 Oversubscribed
Just hours after the Fed announce that it accepted $56.65BN in collateral in its latest overnight repo operation ($47.95BN in TSYs, $8.2BN in MBS), which was a modest decline from Thursday's operation, which as we noted at the time was on the verge of being oversubscribed...
... the Fed announced the results of its second "NOT A QE" Treasury-Bill POMO, which showed that Dealers submitted $36BN in bids for the maximum $7.5BN in purchases.
As such, the operation was 4.8x oversubscribed, a notable increase from the first POMO conducted on Wednesday when Dealers indicated they wanted to purchase $32.6BN in Treasuries, or "only" 4.3x oversubscribed.
And while the Fed kept all Bills that mature in less than a month on the exclusions list as expected, it is perhaps notable that unlike the Wednesday POMO, the number of CUSIPs that were purchased in today's operation was decided greater than the first POMO, with CUSIP TR0 the most active, with $2.04BN of this Bill tendered back to the Fed, while TB5 was the second most active, at $1.035BN.
Composition of today's purchases aside - and expect these to vary substantially as the Fed's POMO lasts well into 2020 - what was most notable is that demand for the Fed's permanent liquidity injection increased notably in its second operation, and that even though the overnight repo saw a modest dip in dealer interest, this was made up by the $3.5BN increase in POMO demand as demand for $28.5 billion in liquidity remained unmet.
As such the question we have been asking for the past month remains: why are banks still so desperate for liquidity even though the Fed has now made clear the Fed's balance sheet will expand to accommodate all reserve needs, and why do they so stubbornly refuse to approach the interbank market for their funding needs? In short, what do they know about the banking system that we don't?
Tyler Durden Fri, 10/18/2019 - 11:27 Tags Business FinanceThe Bursting Of The Bubble In 'BS'!
Authored by David Robertson via RealInvestmentAdvice.com,
On the surface, middle of the road performance for stocks in the quarter indicated relative calm. Especially coming off strong performance in the first half of the year, there was little cause for concern.
Performance was choppy in the quarter, however, as steady, modest gains were repeatedly undermined by significant losses. In addition, a quant quake came out of nowhere and led to massive outperformance of value over growth for a short period of time. Also, out of nowhere overnight repo rates spiked higher until the Fed intervened. Gold prices rose steadily. Under the surface, something seems to be amiss. What is that something and what does it mean for investors?
For a growing number of investors, the answer is a short one: Stocks have overshot their fundamentals and a market crash is imminent. Such concerns are serious partly because they come from some highly respected players and partly because if true, there would be serious consequences for investors. However, stocks have been highly valued for a long time and for the past ten years bumps in the road have always been smoothed over by central banks. Is anything different this time?
It helps to establish some perspective. One of the more prominent themes over the last ten years has been the outperformance of growth stocks relative to value stocks. Rick Friedman of GMO points out that “Over the past 12 years … value stocks have underperformed”.
John Pease, Friedman’s colleague at GMO adds, “All in all, it has been a harrowing decade for those who have sought cheap stocks.”
This recent underperformance of value provides a notable break from its historical pattern. Friedman continues:
“Historically, buying companies with low price multiples has delivered substantially better returns than the overall market, with the added benefit of lower absolute volatility. From the inception of the Russell 3000 Value index through 2006, value stocks outperformed the broad market in the U.S. by 1.1% per year starting in 1978.”
Dan Rasmussen, founder and portfolio manager of Verdad Capital Management, described just how unusual this performance has been in the September 20, 2019 edition of Grant’s Interest Rate Observer:
“What has been abnormal … is the remarkable performance of growth stocks. That has really been driven by the very largecap tech companies, which have had this amazing combination of high growth, high profitability, high and sustained growth, high and sustained profitability (and starting to actually dividend out money). That historically is very, very anomalous. You don’t typically see the largest stocks grow the fastest.”
Indeed, Friedman explains that the reason value stocks tend to outperform is because they offer an attractive tradeoff:
“While value companies did in fact under-grow the market, their cheaper valuations, higher yields, and a number of other factors more than made up for their weaker fundamentals.”
The “engine of returns behind value portfolios is ‘the replacement process, whereby a formerly disappointing company sees its fortunes change and its prices respond (à la General Electric in the 80s).’
“Investors systematically underestimate the ability of weaker and distressed companies to mean revert to profitability and reasonable growth levels. Instead, they overpay for growth by extrapolating relatively strong growth too far into the future.” notes Friedman.
Pease notes, “In the last 13 years,” however, “rebalancing has disappointed somewhat,” and with it, the primary mechanism by which value tends to outperform. Friedman adds that factors that typically inhibit the most outlandish expectations for growth have been unusually weak:
“Of late, expensive stocks have remained expensive for longer than usual. Typically, high growth companies are unable to sustain excessive growth rates for long periods. In the last decade, however, the growth universe has been more retentive than in the past.“
So, one thing that is amiss is exaggerated expectations for growth. One exercise I regularly perform is to identify market-implied growth rates by matching discounted cash flows with current market prices. A couple of patterns are clear. One is that the prices of a lot of companies assume growth rates that are much higher than those that can be sustained by internally generated cash flows. In other words, the company’s growth is entirely dependent on access to outside capital.
Another pattern that is evident is that many implied growth rates are so high as to defy all practical constraints on growth. Historical experience, competitive response, industry size, economic growth, regulatory response, input costs, input availability, discretionary income, changing tastes and preferences, and real cash flows (as opposed to non-gaap earnings) all provide practical limits on growth for various businesses. It usually doesn’t take a ton of math to identify a ballpark range of growth estimates that is reasonable for a company.
As it turns out, the top-down evidence of unrealistic growth expectations corroborates the bottom-up observations. Rasmussen notes:
“You’re at this point … where the spread between the valuations of growth stocks and the valuations of value stocks is near all-time highs. The two times it has been this high in the past 50 years are 2000—the height of the tech bubble—and 1973—the height of the Nifty Fifty boom.”
One implication for investors, then, is the risk of exposure to exaggerated growth expectations is high right now. That risk may well be greatest in the IPO arena. Grant’s surveys the “abnormal” IPO landscape by way of statistics from Jay R. Ritter, chaired professor at the Warrington College of Business at the University of Florida:
“81% of firms that went public in 2018 showed GAAP losses. To date in 2019, 74% of companies debuting in the public-equity market have been similarly loss-making. Each figure is substantially higher than the 39% average of profitless new public companies that IPO-ed between 1980 and 2018.”
While these numbers portray an exceptional level of enthusiasm for IPOs, cracks have been emerging. The high-profile offerings of Uber and Lyft have both performed poorly and more recently, Peloton fell immediately from its offering price and has remained weak. Obviously, something has changed. Richard Waters from the Financial Times ascribes such weakness to a diminishing desire to believe “airy promises”. In other words, the market finally seems to be pushing back on exaggerated claims for growth.
“Airy promises” are not the only thing amiss in the IPO market, however. As Waters also notes, the easy cash available for many IPOs “has bred bad habits.”
The poster child for bad habits is WeWork. When WeWork started the IPO process, its valuation was targeted at $47 billion. After a great deal of pushback ahead of the roadshow and several price cuts, the IPO was finally pulled.
Not only is the company not going public, however, now it is in serious risk of going bankrupt. The FT reports, “Last week rating agency Fitch downgraded WeWork’s credit rating to CCC+, a level at which ‘default is a real possibility’. It said ‘the risk that the company is unable to restructure itself successfully has increased materially’.” How in the world can a company go from hot IPO prospect to bankruptcy candidate in a couple of months?
While WeWork provides plenty of entertaining drama, it also provides instructive lessons for the broader market. Importantly, all the information necessary to assess WeWork as a fragile financial proposition and a low-grade credit was available for all to see prior to its aborted IPO. There were no surprising revelations at the company. The only thing that changed was how people chose to uate the same body of information.
An important part of that body of information, as is the case with many younger companies, is the founder, Adam Neumann. Well known for his quirkiness, outlandish proclamations, and use of recreational drugs, Neumann also successfully crafted himself as a visionary. The balance between visionary and crackpot, however, is often a very tenuous one as Scott Galloway describes:
“Since people want abnormal results, they try to find abnormal thinkers. But no one should be shocked when people who think about the world in unique ways you like also think about the world in unique ways you don’t like. If you want the party, you also get the hangover. Big, bold, visions are important and should be celebrated. But they have to be matched with stable, reality-based operators who have equal power if those visions are to have a fighting chance at surviving outside incubation.”
He elaborated on this tenuous balance in a separate interview in which he was blunter in his assessment:
“The lines between vision, bullsh*t, and fraud are pretty narrow.”
Galloway’s uation is not just that of some aggrieved tech investor who lost money either. He was actually a CEO during the internet boom of the 1990s and saw all-too-well what can happen when self-indulgence and fantasy are not only not constrained, but actively encouraged. As he puts it,
“If you tell a 30-year-old male he’s Jesus Christ, he’s inclined to believe you.”
Ostensibly, the task of constraining leaders who are naturally inclined to push limits is at least partly that of the board. Among the reasons to have a board is to ensure good decision making and to maintain corporate decorum. That didn’t happen with WeWork. According to Galloway:
“It’s safe to assume that board members already knew all of the details about Neumann’s antics … his hard partying and yoga babble were seen as features, not bugs, until the market threw up on it. Now, all of a sudden, the board is acting shocked. The board didn’t fire this guy; the board enabled him … Basically, as long as people were willing to buy into this charade, they [the board members] kept it going as long as the music kept playing.”
Two other elements come into play in facilitating such excesses. One is the cyclical view towards charismatic leaders. There are times when dynamic founders are replaced by more experienced managers to run a business as it matures. Recently, however, founders have been allowed more latitude to stay in power longer.
The excesses are also partly a function of the marketplace as Galloway explains:
“It’s frothy, and there’s more capital than operators. Any operator who has a vision and can promise the potential and convince people they can be the next Google or Facebook can attract billions of dollars right now. The reality is there’s more money out there.”
All of this provides useful context from which to uate market conditions. First, there are clear analogies with the subprime crisis. As long as things are working, the vast majority of actors are making money. As long as people are making money, there is little incentive to change things. Positive feedback loops ensure the good times run longer than they should.
This creates an interesting possibility. What if the thing that is amiss is simply an increasingly sober uation of existing conditions? What if investors have become less willing to dismiss math as some kind of weird science and more inclined to seriously apply it to growth expectations? What if, in the context of weakening growth, investors are less willing to believe in “vision” and “airy promises” and more inclined to manage downside risk?
What if a bubble is bursting, but it is not one of stocks per se, but one of bullsh*t?
This would have major implications for investors. First and foremost, any exposure to bold visions, airy promises, and barely credible growth expectations would need to be re-uated and re-calibrated. How many of those growth estimates are realistic? How many are off by a long shot? How many are not even possible? How many are only possible if funded indefinitely with free capital? Such scrutiny is even more likely to increase as earnings growth declines, global growth slows, geopolitical tensions rise, and as the credibility of central bankers fades. The result is likely to be a major rotation from growth into value.
Such a rotation would affect more than just growth investors; it would also have a disproportionate impact on broad index investors. Since capitalization weighted indexes overweight stocks that are overpriced and underweight stocks that are underpriced, broad indexes have become increasingly comprised of inflated growth stocks. That exposure becomes especially painful when the process reverses.
To the extent the primacy of bullsh*t diminishes or even vanishes as a determinant of stock prices, it will also have a significant impact on strategies for investors and advisers. When BS is ascendant, investors need only follow the same trends that everyone else does; it is no more complicated than that. Valuation, however, is a fundamentally different exercise. Determination of reasonable growth estimates is subject to all kinds of research, analysis, and judgment. This will create new opportunities for stock selection, but in doing so, will also leave a lot of people bereft of necessary analytical and investment tools.
Finally, the bursting bubble of BS also has implications for risk management. When the inflated expectations facilitated by BS are the norm, there is little reason to worry about how inflated the expectations are. Rather, the main concern is regarding the catalyst that could change things. The current environment provides many good examples including trade wars, election outcomes and the potential for a recession.
Focusing on a catalyst is a poor way to manage risk for a number of reasons, however. It is very hard to imagine all possible catalysts. Often, catalysts have a different effect than supposed. Thing can happen randomly. Further, the world is a complex place; oftentimes there is no particular, recognizable catalyst at all.
The thing that can usually be judged with far greater confidence than a catalyst is downside risk. You usually have a pretty good idea of what you can lose if things go bad. With that in mind, imagine playing a game of Russian roulette with your investment portfolio. You have one chamber of a gun loaded that you know can destroy your savings. Why would you focus on what might cause the barrel to stop spinning at the filled chamber rather than avoiding the inherent risk of the situation altogether? In other words, if stocks are significantly overvalued, why accept so much risk?
In sum, it is fair to say that something is amiss in the investment landscape. If that something is a bubble in BS rather than a bubble in stocks, the fallout will likely be different. Rather than one big, sudden crash, it will be more like a process of individual balloons popping over time as particular manifestations of BS get called out and re-calibrated.
As this happens, it will create a great deal of pain for sure, but there will be opportunities. The best vantage point will be that from security-specific analysis.
Tyler Durden Fri, 10/18/2019 - 11:08 Tags Business FinanceUS-Brokered Ceasefire In Syria Already Shattered By New Turkish Airstrikes
In an entirely unsurprising development, it only took hours for Turkey to break the US-brokered deal for a 5-day ceasefire in northern Syria. The late Thursday newly inked ceasefire was announced by Vice President Mike Pence following a lengthy meeting with President Erdogan; it crucially involved allowing Kurdish fighters to evacuate battleground border towns and in exchange Turkey would agree to halt its offensive.
But new Turkish air strikes near the border town of Ras al-Ain have shattered the apparently fragile agreement. "Five civilians were killed in Turkish air strikes on the village of Bab al-Kheir, east of Ras al-Ain," one Syrian war monitoring group cited in the AFP said. Four SDF fighters were also reported killed in that strike, according to the report.
Aftermath of Turkish airstrikes on Ras al-Ain earlier this month, via Anodolu Agency/Getty
In an official statement the SDF condemned what it called a clear violation of the terms of the US-Turkish agreement. "Despite the agreement to halt the fighting, air and artillery attacks continue to target the positions of fighters, civilian settlements and the hospital" in Ras al-Ain, spokesman Mustefa Bali said.
This despite no Syrian Kurdish representatives being part of the closed door, last minute deal-making in Ankara on Thursday, and despite international pundits noting neither Washington nor the US-backed Syrian Kurds received anything significant in their favor.
Indeed one Turkish official in the immediate aftermath of the deal had boasted to Middle East Eye "We got exactly what we wanted out of the meeting."
An AFP report described some of the circumstances of the alleged Turkish ceasefire violation as follows:
The incident took place even as a 200-vehicle convoy headed towards Ras al-Ain to evacuate civilians who have been virtually besieged there since the start of Turkey's cross-border assault on October 9.
A central element to the deal is that Kurdish forces would be allowed to withdraw from the border outside a strip 32 kilometers, or 20 miles, deep. This area of the ceasefire zone, once a "pause" in fighting leads to a more permanent ceasefire, is to be the future area of a Turkish administered 'safe zone' where Ankara intends to resettle a million or more refugees.
Yesterday: Ceasefire agreement in northern #Syria Today: Turkish airstrikes kill 5 civilians and wound over 20
— Danny Makki (@Dannymakkisyria) October 18, 2019 https://platform.twitter.com/widgets.jsCritics have noted this will be tantamount to 'legalized' ethnic cleansing, as Erdogan has expressly stated his intent to cleanse it of Kurds while moving Syrian Arab refugees and ethnic Turkmen in.
The Kurdish-led SDF, meanwhile, has agreed only to a ceasefire in the area between Ras al-Ain and Tal Abyad to its west, or in areas that Turkish forces have already effectively captured.
Military situation in northern Syria days before Thursday's US-brokered ceasefire with Ankara, envisioning the 32km-deep 'safe zone' Erdogan desires to establish.
President Trump, for his part has praised the deal as marking "a great day for civilization" and that "millions of lives will be saved" according to a Thursday tweet.
However, Washington's relations with Turkey continue to be at a boiling point, given President Erdogan for the first time lashed out in statements early Friday with respect to Trump's now infamous 'don't be a tough guy or a fool' letter over the deteriorating Syria situation. Erdogan told reporters that his country wouldn’t forget the lack of respect.
“We don’t see this issue as our priority today,” he told reporters in Istanbul. But, “it should be known that when the time comes, necessary action will be taken regarding this issue.” Trump and Erdogan are still expected to meet in Washington on Nov. 13. By then, of course, the big ceasefire deal in northern Syria could be in complete tatters and all but dead.
Tyler Durden Fri, 10/18/2019 - 10:45 Tags Politics
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