October 4: Daily Contrarian Reads

Kevin Warsh On What's Wrong With The Fed----Most Everything

A new inflation target would undermine the Fed’s commitment to any policy framework. It would please the denizens of Wall Street who pine for still-looser Fed policy. And households would be understandably miffed to receive a new lecture on unconventional monetary policy—this one on the benefits of higher prices........First, the economics guild pushed ill-considered new dogmas into the mainstream of monetary policy. The Fed’s mantra of data-dependence causes erratic policy lurches in response to noisy data. Its medium-term policy objectives are at odds with its compulsion to keep asset prices elevated. Its inflation objectives are far more precise than the residual measurement error. Its output-gap economic models are troublingly unreliable.

Dancing On the Rim of a Volcano---Massive Complacency In The Casino

The lack of price swings has investors mired in a sea of complacency, which has them ignoring potential risks, says Societe Generale....... Not only is the so-called fear gauge locked near the lowest levels on record, but hedge funds are betting it'll decline even further. Their VIX positioning is the most bearish on record, according to data compiled by the US Commodity Futures Trading Commission. "Compare that with dancing on the rim of a volcano," a group of SocGen strategists led by Alain Bokobza, the firm's head of global asset allocation, wrote in a client note. "If there is a sudden eruption (of volatility) you get badly burned."

End of The American Empire

The American empire is coming to an end. The U.S. economy is being drained by wars in the Middle East and vast military expansion around the globe. It is burdened by growing deficits, along with the devastating effects of deindustrialization and global trade agreements.......Overseeing this descent at the highest levels of the federal and state governments is a motley collection of imbeciles, con artists, thieves, opportunists and warmongering generals. And to be clear, I am speaking about Democrats, too.

Automakers Plan Electric Car Blitz as Tesla Burns Billions

Here are two facts that defy logic: By the end of the year, electric-car maker Tesla Inc. will have burned through more than $10 billion without ever having made 10 cents. Yet companies around the world are lining up to compete with it. Almost 50 new pure electric-car models will come to market globally between now and 2022, including vehicles from Daimler AG and Volkswagen AG. Even British inventor James Dyson is getting into the game, announcing last week that he’s investing two billion pounds ($2.7 billion) to develop an electric car and the batteries to power it.

Fall of the Great Pumpkin

The incident will live in infamy for maybe a day and a half in the US media. Stand by today as there will be calls far and wide, by personas masquerading as political leaders, for measures to make sure something like this never happens again. That’s rich, isn’t it? Meanwhile, the same six a.m. headlines declared that S &P futures were up in the overnight markets. Nothing can faze this mad bull, apparently. Except maybe the $90 trillion combined derivatives books of CitiBank, JP Morgan, and Goldman Sachs, who have gone back whole hog into manufacturing the same kind of hallucinatory collateralized debt obligations (giant sacks of non-performing loans) that gave Wall Street a heart attack in the fall of 2008.

I Thought I Was Middle Class--Until I Read The Mnuchin/Cohn Tax Plan

When I saw that slimy tentacle of the Goldman Sachs vampire squid, Gary Cohn, bloviating about Trump’s tax plan and how it was going to do wonders for the middle class, I knew I was probably going to get screwed again......

The Enlightened World of 2016: More Americans Busted For Weed Than All Violent Crimes

Despite the further spread of marijuana legalization throughout the U.S., pot-related arrests are on the rise. According to FBI data released on Monday, arrests made for marijuana-related offenses increased by 1.6 percent in 2016....The report indicates that 653,249 arrests were made for pot last year, making for about 42 percent of the total drug busts accounted for. Those total arrests were more than those related to violent crimes including murder, rape, aggravated assault and robbery, the Washington Post noted.

This Is Getting Downright Laughable

Football is a tedious game that fills three-and-a-half hours of airtime with 30 minutes of action, commercials, commentary, instant replays, more instant replays, closeups of pretty cheerleaders, and halftime pageantry. The players are paid great gobs of money but run the risk of rendering themselves concussive basket cases. The super rich owners hold up municipalities for taxpayer-funded stadiums while keeping the TV, ticket, merchandising, and concessions revenues. They’ve also climbed into bed with the federal government, accepting taxpayer money for promoting patriotism. Among other things, this requires players, who until 2009 could stay in the locker room while the National Anthem was played, to be on the field, presumably standing at respectful attention.

Vietnam And Afghanistan----Imperial Folly Redux

The monumentally stupid war mismanagement of Pentagon chief Robert McNamara, a know-it-all who knew nothing, turned the war into a macabre joke.  This was the dumbest command decision since Louis XV put his girlfriend Madame de Pompadour in charge of his armies. We soldiers, both in Vietnam and Stateside, scorned the war and mocked our officers. It didn’t help that much of the US force in ‘Nam’ were often stoned and rebellious.

Declaration of Independence----Coming In Catalonia Soon

Catalan separatist leaders signaled they may be moving toward a unilateral declaration of independence as early as this week after hundreds of activists were injured on Sunday as they sought to stop Spanish police from shutting down an illegal referendum. President Carles Puigdemont appealed to the European Union for support as he pledged to inform the regional parliament of the result of the vote in the coming days. The assembly will then act in line with the referendum law, Puigdemont said -- and that could lead to a unilateral declaration of independence within 48 hours of the notification.

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