January 23: Daily Contrarian Reads

Trump Will Make Volatility Great Again

It remains my view that volatility and risk are materially underpriced in today’s markets.  While animal spirits have taken over the markets, abetted by machines and algorithms that often create an artificial market setting by exaggerating market moves, I will remind all that there is a reason why they are called animal spirits and not human spirits. Animals, you see, are mostly a lot dumber than humans. I am as bearish on stocks as I have been in months based on the following…

US Government Caught Massively Fabricating Student Loan Default Data

Many more students have defaulted on or failed to pay back their college loans than the U.S. government previously believed. Last Friday, the Education Department released a memo saying that it had overstated student loan repayment rates at most colleges and trade schools and provided updated numbers. When The Wall Street Journal analyzed the new numbers, the data revealed that the Department previously had inflated the repayment rates for 99.8% of all colleges and trade schools in the country.

Below The Headlines—-How Corporate America Is Playing Trump

But are Trump’s efforts to bring jobs back to the U.S. equally impressive below the surface?  To satisfy our insatiable curiosity, we scratched off the top layer of curd to see what we could find. In the case of Bayer and Monsanto, we discover their pronouncement is more than simply an act benevolence.  In fact, the two companies are awaiting regulatory approval of their agreed $66 billion deal from Trump’s incoming administration.  What’s more, the $8 billion investment pledge is equal to what they’d already planned to spend. The pledges made by Wal-Mart and General Motors are also less impressive below the surface.  Namely, the new jobs pledges ain’t new.  Reuters reports: “Both Wal-Mart and GM’s new U.S. job plans are also part of previously announced investment.

The Non-Cyclical Cycle Repeats

This lack of recovery after these variable declines is essentially the economy, or the related parts represented by whatever account, shrinking and remaining shrunk. That just isn’t supposed to happen, yet here it is in vibrant detail. From capacity utilization to motor vehicle assemblies, even crude oil production, there is a decline followed by sideways nearly every time.

McCain’s Hypocrisy Knows No Bounds

TechDirt writer Mike Masnick is so disgusted with fake-patriot politicians that he stopped writing about tech dirt and instead wrote about human dirt: Senator John McCain…..Someone should call up the Guinness World Record folks, because the wrong-per-sentence ratio of McCain’s angry statement might just set a  new world record. Let’s dig in.

Ideological Civil War in Davos: Dutch Premier Labels “Political Union a Dangerous Romantic Fantasy, Gone, Buried

European solidarity erupted in a full scale Ideological Civil War in Davos today as Dutch prime minister Mark Rutte called the EU’s dreams a “dangerous romantic fantasy”. “The whole idea of an ever-closer Europe has gone, it’s buried,” said Dutch premier Mark Rutte, dismissing calls for full political union as a dangerous romantic fantasy.“The fastest way to dismantle the EU is to continue talking about a step-by-step move towards some sort of superstate,” he said at the World Economic Forum.

Does the Deep State Have It in for Trump?

First, you gotta hand it to Wall Street. The financial elite were 1,000% behind Hillary. Then, when Donald Trump won the White House, within minutes, they were in his cabinet. During the campaign, not only were they loading Hillary up with millions of dollars in funding, but they also regularly predicted doom if “The Donald” were to win. Then, apparently within seconds, in the middle of the night, they saw a great dollar sign in the sky… “By this sign will you conquer” was written upon it. Not since the conversion of Constantine has a turnaround been so abrupt and so complete. Mirabile dictu!

The Obama Administration’s Parting Blow At Personal Liberty

On Jan. 3, outgoing Attorney General Loretta Lynch secretly signed an order directing the National Security Agency — America’s 60,000-person-strong domestic spying apparatus — to make available raw spying data to all other federal intelligence agencies, which then can pass it on to their counterparts in foreign countries and in the 50 states upon request. She did so, she claimed, for administrative convenience. Yet in doing this, she violated basic constitutional principles that were erected centuries ago to prevent just what she did.

Pax Americana Is Over

“I believe that the Pax Americana, as of tomorrow, is over,” Ian Bremmer, president of Eurasia Group, said in an interview with Business Insider on Thursday at the World Economic Forum in Davos, Switzerland. “I think that we can actually close the book on that chapter and that we enter into a new world order,” he said…… Trump’s “America first” philosophy sees multilateral institutions and international affairs as transactional — that is, rather than aiming for longer-term global order and common values, Trump believes the US should act on near-term national interests and be more flexible in dealing with rapid shifts on the global stage. “With it ends a 70-year geopolitical era of Pax Americana, one in which globalization and Americanization were tightly linked and American hegemony in security, trade, and promotion of values provided guardrails for the global economy….

Here They Go Already—–Rick Perry Disavows Stand on Eliminating Energy Department

Former Texas governor Rick Perry expressed regret Thursday for saying he wanted to abolish the Energy Department, an agency that President-elect Donald Trump has now tapped him to lead. “My past statements made over five years ago about abolishing the Department of Energy do not reflect my current thinking,” Perry said during his confirmation hearing. “In fact, after being briefed on so many of the vital functions of the Department of Energy, I regret recommending its elimination.”