November 22: Daily Contrarian Reads

Bonfires of The Central Bank Absurdities

Some of what you’ll see depicted in the following charts originated a decade ago in the Global Financial Crisis – or was caused by the reactions of central bankers to that crisis. The many shocking, previously unimaginable acts by central banks and governments left us so numb that I think we started to simply accept them without much thought. That was our mistake: We must confront the unthinkable, not just shrug our shoulders at it. Because when we have our next crisis, I will bet you dollars to donuts that central banks and governments will react in ways that are even more unthinkable.

Existing Home Sales---Far From Awesome, Below The Top Price Points

A little more than half of all home resales take place in those lowest two price tiers. Only 13% of transactions (in October) were for homes sold at $500k and above. The economy cannot be doing all that well for those at the bottom. That’s true of any economic time period, of course, even in the best of times, but what’s different, and what the housing data here helps quantify and signal, is that the proportion of Americans counted at the “bottom” is so much more now than would otherwise be typical – especially at a legitimate 4.1% unemployment rate.

Brennan and Clapper: The Deep State's Serial Fabricators

The Intel bosses continue to believe that they can overcome the lack of evidence by repeating the same claims over and over again. The problem with this theory is that Brennan’s claims don’t match the findings of his own “Gold Standard” report, the so-called Intelligence Community Assessment or ICA which was published on January 6, 2017 and which supposedly provides rock solid evidence of Russian meddling. The greatly over-hyped ICA proves nothing of the kind, in fact, the report features a sweeping disclaimer that cautions readers against drawing any rash conclusions from the analysts’ observations. Here’s the money-quote from the report.

Red Ponzi Update: China's $15 Trillion Problem---Investors Don't Believe in Losses

When China unveiled plans on Friday to end the implicit guarantees underpinning asset-management products worth trillions of dollars, it should have been a bombshell for the nation’s savers. But for Yolanda Yuan and other individual investors who’ve piled into AMPs issued by banks, insurers and securities firms, the government’s announcement was largely a non-event. The reason: they didn’t believe it. “I don’t think any big banks will dare to take the risk of allowing defaults on AMPs, as that will lead to a flood of fund redemptions,” said Yuan, a 29-year-old sales manager.

The US Treasury Market Smells a Rat

Prices of US Treasury securities fell across the spectrum on Monday, and yields rose. From the two-year yield on down, yields set new nine-year highs. This sell-off – and the accompanying surge in yields – has occurred for months without downdraft in stocks and without a slowdown in economic growth. It’s a dreamy scenario where the Fed’s tightening has no negative impact on the economy. But the Treasury market at the longer end smells a rat.

Why the Next US Recession Could Be Worse Than the Last

In truth, we had planned to dive into this subject before we even issued the survey. For all the optimism surrounding low unemployment rates and record-high real median income, there are some signs that something is rotten in the US economy. This isn’t wholly surprising – economic health tends to be cyclical, and the US is due for a recession. But when the next recession comes, there’s reason to believe it won’t be business as usual. The structural problems that led to the 2008 financial crisis haven’t been fixed. If anything, they’ve gotten worse.

Ron Paul: Why Are We Helping Saudi Arabia Destroy Yemen?

No, Washington Post, it’s simpler than that. The tragedy in Yemen is the result of foreign military intervention in the internal affairs of that country. It started with the “Arab Spring” which had all the fingerprints of State Department meddling, and it escalated with 2015’s unprovoked Saudi attack on the country to re-install Riyadh’s preferred leader. Thousands of innocent civilians have been killed and millions more are at risk as starvation and cholera rage.

The Approaching Silicon Valley Meltdown

“The Valley” (and its entire ancillary complex aka “the disruptor class”) is on the verge of receiving a wake-up call, the likes, that may make the dot-com era look relatively “stable” in hindsight......Every-time a unicorn has rung its IPO bell – it’s been marched subtly off the so-called “trading floor”, directly to the glue factory door, onto another floor, aka the “killing floor.” Where it and its so-called “lucky” IPO debut investors, along with their wallets, met the same fate.

Who’s A "Foreign Agent"?

You know life’s become a joke when the US Department of Justice starts requiring foreign media to register as foreign agents. Will the BBC be forced to issue a disclaimer with every broadcast and web posting: “Proceed with caution – British propaganda ahead”? Don’t bet the ranch on it.

Bank Of America Analyst: A "Flash Crash" In Early 2018 "Seems Quite Likely"

Is the stock market bubble about to burst?  I know that I have been touching on this theme over and over and over again in recent weeks, but I can’t help it.  Red flags are popping up all over the place, and the last time so many respected experts were warning about an imminent stock market crash was just before the last major financial crisis.

David Stockman's Contra Corner is the only place where mainstream delusions and cant about the Warfare State, the Bailout State, Bubble Finance and Beltway Banditry are ripped, refuted and rebuked. Subscribe now to receive David Stockman’s latest posts by email each day as well as his model portfolio, Lee Adler’s Daily Data Dive and David’s personally curated insights and analysis from leading contrarian thinkers.