04/25/17

Will The Unthinkable Occur?

By: Kent Engelke | Capitol Securities

In the early 1980s, during an “Introduction to Political Science Class,” I was introduced to the concept that there are generational geopolitical/sociological changes every 35-40 years. I vividly recall discussing LBJ’s “Great Society” programs, the social angst of the Vietnam War, the nascent rise of globalism and the beginning of the close collusion between big government and big business and how such commenced a new era of activist and redistributionist government.

The professor stated these trends stay in place until there is some finale equivalent to the conclusion of a Fourth of July fireworks display where the current trend goes on steroids believing the status quo is all knowing and powerful. Radical change then occurs.

I believe I live in the congressional district that commenced the battle against the Establishment. David Brat defeated House Majority Leader Eric Cantor in a primary, a primary that Cantor all but dismissed as meaningless and unthreatening.

This was first time that a major leader was defeated in a primary since the late 1800s. Brat won because Cantor’s constituents — one of which is me — believed that Cantor lost contact with the electorate. That Cantor was all about himself and the perpetuation of the Establishment.

The professor dogmatically stated these changes will occur, not questioning as to if, but rather as to when.

Fast forward to today. Brexit. Trump. Italy. And now France.

For the first time in many generations, a candidate from a major political party is not in contention for France’s presidency. This would be equivalent to neither a Republican or a Democratic candidate being a candidate for the US Presidency.

On May 7th, France’s citizenry is faced with a dichotomy. The choice is a far right populist, who espouses economic nationalism and “Frexit,” or a moderate who supports closer ties to the EU. Neither candidate is from a national party and the moderate is a political neophyte who most thought had little chance of succeeding to the “finals” as little as 60 days ago.

In other words, a strong argument can be made the survival of “The Federation” is at hand. There is a clear battle between a commitment to dramatically changing the current economic system or one to maintain the existing structure.

To write the obvious, the entire Establishment is supporting the moderate and at this juncture is projected to win by a considerable margin.

Will Le Penn do the unthinkable and win?

Why the attention on this election? Today’s financial system is predicated upon globalism. The top performing equity issues are mega capitalized global growth issues, a term that I find oxymoronic. According to Bespoke Investment Corporation, the concentration of wealth into a handful of mega sized global growth companies is unprecedented. What happens if globalism dies an inglorious death in 2 weeks?

Perhaps the only certainty to write is that regardless who is France’s next president, today is radically different than yesterday. The electorate is speaking very loudly and it is very anti-Establishment.

Equities advanced on the French election with many declaring that Le Penn will lose by a wide margin. I think I wrote these same words in late June 2016 referencing Brexit.

Last night the foreign markets were up. London was up 0.26%, Paris was up 0.38% and Frankfurt was up 0.03%. China was up 0.16%, Japan was up 1.08% and Hang Sang was up 1.31%.

The Dow should open nominally higher, perhaps the result of tax reform optimism. The 10-year is off 8/32 to yield 2.31%.

04/24/17

The March to War? Entire US Senate Called to White House for North Korea Briefing [VIDEO]

By: Terresa Monroe-Hamilton | I Have The Truth

Just when you thought the whole North Korea debacle was stagnating, things unfortunately got interesting this weekend. The first thing that happened is we found out that the US is sending 1,250 Marines to Australia. The North Koreans are claiming that we are staging our troops there for an invasion of the Hermit Kingdom. They are threatening to hit Sydney with nukes. I kind of doubt that they can, but who knows? As regional tensions escalate and a US carrier strike group approaches the Korean peninsula, Australian Foreign Minister Julie Bishop said the secretive regime “must be stopped” as it represented a threat to the region and, potentially, globally. The NoKos have also threatened the USS Carl Vinson, vowing to strike and sink it.

But wait… there is much more afoot. China ostensibly cut off North Korea’s oil and gas supplies this weekend. Gas prices rose by 85% there and all gas stations were shuttered. Then China froze and disabled all Chinese ATMs in the country. How do you spell panic? There’s more you aren’t hearing out there. President Trump called both China and Japan last night. No reason or transcript has been released. Chinese president Xi Jinping released a statement afterwards that said China opposed any actions that went against UN security council resolutions, as Japan confirmed it was joining drills with the strike group led by the USS Carl Vinson that is headed to Korean waters.

Rodong Sinmun, the official paper of the Worker’s Party of North Korea, highlighted the US Marines arrival in northern Australia on April 18th. The Marines will be joined by 12 military helicopters including five Cobra helicopters and four Osprey carriers. “This is the largest scale US military presence in Australia after World War 2,” the newspaper reported on Monday. Tomorrow is a another holiday for North Korea and America is watching to see if missiles are launched or a nuke is tested. Either will be seen as a provocation to war. U.S. commercial satellite images indicated increased activity around North Korea’s nuclear test site, while Kim has said that the country’s preparation for an ICBM launch is in its “final stage.” South Korea has said that something could now happen at any time.

From Fox News:

The entire U.S. Senate has been invited to the White House for a briefing Wednesday on the North Korea situation, amid escalating tensions over the country’s missile tests and bellicose rhetoric.

White House Press Secretary Sean Spicer confirmed the upcoming briefing, for all 100 senators, on Monday.

Secretary of State Rex Tillerson, Secretary of Defense Jim Mattis, Chairman of the Joint Chiefs of Staff Gen. Joseph Dunford and Director of National Intelligence Dan Coats plan to provide the update to lawmakers.

It is rare for the entire Senate to be invited to such a briefing.

Spicer clarified that while the event will take place on the White House campus, it is technically a Senate briefing and Majority Leader Mitch McConnell, R-Ky., is the one who convened it.

The briefing, first reported by Reuters, was confirmed after President Trump earlier spoke to the leaders of both China and Japan.

A rare briefing will be held Wednesday to brief all 100 Senators at the White House. Mitch McConnell will chair the briefing as Majority Leader. The President himself has called this meeting along with his military leaders. Some say it is for sanctions against the NoKos, but that would be overkill. These types of briefings are called when a President is seeking permission to go to war. Whether that is what this is or not is yet to be seen. A similar briefing of all House members is also being arranged.

All 100 senators have been asked to the White House for the briefing by Secretary of State Rex Tillerson, Secretary of Defense Jim Mattis, Director of National Intelligence Dan Coats and General Joseph Dunford, chairman of the Joint Chiefs of Staff, the aides said. I don’t know about you, but the war drums just got deafening over here. The briefing will be at 3 pm EST. Tensions over North Korea have been escalating higher and higher over the last couple of weeks. It looks like we may be getting ready to dance after all.

04/24/17

Possible Reasons For Hedge Fund Bearishness

By: Kent Engelke | Capitol Securities

More and more high profile hedge fund managers are warning about stock valuations. The reason for the concern is the breakdown of globalism, the concentration of wealth in a handful of companies, rising interest rates that will impact valuations, especially those issues trading at huge multiples, rising input prices that may not be able to be passed onto the end user and rising wages.

There is also rising concern about “portfolio insurance,” the domination of moving average lines to make instantaneous trading decisions and the total capitalization of the S & P 500 as compared to the size of the economy.

Those who are cynical are perhaps thinking current hedge fund bearishness could be the result of the lack of performance as compared to the benchmarks. The last major era of hedge fund out performance ended in 2007.

Passive portfolio management via ETFs has dominated since the financial crisis, a style that focuses more on size rather macroeconomic and geopolitical analysis.

I ask however if the change in today’s environment is indeed tectonic via the collapse of globalism, should this not create a more bullish environment for hedge funds that utilize an overriding thesis and research, thus becoming significant?

Several weeks ago, I noted the collapse of the security research industry, the result of the proliferation and domination of passive ETFs. Some believe such a collapse has created an opportunity for those firms that still follow trends and companies. This group believes the ETF/mega capitalization trade has become very crowded. When anything becomes this crowded, the next path is typically down.

The question at hand is if this trade collapses, what happens to all other issues?

I will argue it depends upon tax and regulatory reform. If reform occurs, such reform will directly benefit “The Main Street Issues” versus “The Wall Street Issues” for a myriad of reasons.

What will happen this week? Earnings season accelerates. The economic calendar is comprised of several regional manufacturing indices, consumer confidence, trade and more housing data, inventories and initial estimates of first quarter GDP.

Last night the foreign markets were up. London was up 1.72%, Paris was up 4.51% and Frankfurt was up 3.0%. China was down 1.37%, Japan was up 1.37% and Hang Sang was up 0.41%.

The Dow should open sharply higher on the results of the French election. The populist Le Penn is thought not to have a chance against the centralist Macron, a person she is casting as an oligarch. The election is on May 7th. The 10-year is off 15/32 to yield 2.31%.

04/21/17

Bill de Blasio Is Right

By: Kent Engelke | Capitol Securities

Did NYC’s mayor Bill de Blasio just make the Democratic Party case for lower taxes? The mayor is pushing to raise the price of cigarettes from $10.50 to $13.00 in an attempt to drastically reduce the number of smokers by 2020. The “progressive” mayor stated higher prices will cause lower demand, thus saving lives.

I do not know if the 25% increase will be treated as a tax—something in itself… it is very regressive given the preponderance of smokers earn less than $48,000 a year and can least afford an increase — but his rationalization is correct based upon Econ 101.

Higher prices/taxes dictate less demand.

Based upon almost every sentiment survey, President Trump is The Hope and Change President. Can this sentiment be transformed into increased economic activity?

I believe it depends upon tax and regulatory change. Perhaps the most progressive American mayor, the mayor of the nation’s largest city, inadvertently just made a strong case for lower taxes—tax something more, there is less demand and vice versa.

Will tax reform occur? The Establishment is against this type of change. Society is for it. Much emphasis has been placed upon the first 100 days of any administration, a vestige of FDR’s “first one hundred days” eighty-five years ago. Today, nothing occurs in 100 days, except major market transitions, the result of technology based trading where momentum is the primary variable. In my view, rarely is there any type of macroeconomic thesis followed.

The explosion of the ETF industry is incredible over the past decade. According to Credit Suisse, in 2006 there were 16 iShares funds globally that had more than $1 billion in assets and traded an average of more than $100 million day. Ten years later, 77 funds meet those criteria. Seven of the 10 most actively traded securities in the US last year were ETFs.

Wow!

Yesterday, stocks staged an advance predicated by Treasury Secretary Mnuchin comments that a tax reform proposal will be made shortly. The comments had a large impact on the small capitalized issues. The Russell 2000 was precariously on support near the lows of the year. This small cap index is now bumping against the downtrend line off of the early March highs.

Last week I had referenced a Bloomberg article stating that short futures contracts on the Russell 2000 had grown the most since 2008.

I ask how much of the change is the result of algorithmic trading? What happens if ETFs enter the fray, the result of tax and regulatory reform that would greatly benefit Main Street America?

Based upon yesterday’s market action, Bill de Blasio is right. The more you tax an item, the less demand there is for that item. And vice versa.

Last night the foreign markets were up. London was up 0.10%, Paris was down 0.12% and Frankfurt was up 0.4`5. China was up 0.03%, Japan was up 1.03% and Hang Sang was down 0.06%.

The Dow should open flat ahead of Sunday’s vote in France. Earnings are continuing to paint a mixed picture on the health of the economy. The 10-year is unchanged at 2.24%.

04/21/17

Questioning the Trump Doctrine on Iran

By: Roger Aronoff | Accuracy in Media

Recent comments by Secretary of State Rex Tillerson warning that Iran could follow North Korea’s path of nuclear belligerence, and the Trump administration’s certification, in turn, that Iran is complying with the Joint Comprehensive Plan of Action (JCPOA), seem to send mixed messages. However, any guarantee of Iran’s compliance must grapple with the fact that the International Atomic Energy Agency (IAEA) inspectors can only inspect declared, and not military or undeclared, nuclear development sites.

“An unchecked Iran has the potential to follow the same path as North Korea and take the world along with it,” said Tillerson at the State Department. “The United States is keen to avoid a second piece of evidence that strategic patience is a failed approach.”

In other words—as we have often argued—the path of “patience,” or waiting, toward Iran means that this totalitarian regime is virtually guaranteed to eventually develop nuclear weapons. The unsigned Iran deal actually legitimizes Iran’s nuclear aspirations by condoning its enrichment of uranium.

The Iranian regime has also been emboldened by this unsigned deal because it supposedly binds the hands of both Congress and President Donald Trump. On April 20, Iran’s foreign minister, Mohammad Javad-Zarif, tweeted that “Worn-out US accusations can’t mask its admission of Iran’s compliance w/ JCPOA, obligating US to change course & fulfill its own commitments.”

On the campaign trail Donald Trump described the Iran Deal as “the worst deal ever negotiated” and threatened to rip it up. Trump’s actions certifying Iran’s compliance appear to be a marked departure from his earlier campaign promises. But in reality it amounts to a 90-day extension of sanctions relief, part of a review process that was one of few concessions to Congress having a role. Trump said at his press conference with the Italian prime minister on April 20 that Iran has “not lived up to the spirit of the agreement. They have to do that. They have to do that.” Trump said that “they are doing a tremendous disservice to an agreement that was signed. It was a terrible agreement. It shouldn’t have been signed.”

First of all, President Trump, no, it wasn’t signed. It was never signed. And here is the proof. It is a letter from then-Secretary of State John Kerry’s State Department to then-Rep. Mike Pompeo (R-KS), who at the time was on the House Select Committee on Intelligence, and is now the CIA director.

Pompeo responded to the State Department letter by posting a press release on his congressional website stating that the “unsigned” deal was “nothing more than a press release and just about as enforceable.” He added that “For the State Department to try to defend the unsigned and non­binding Iran nuclear agreement by calling it a ‘political commitment’ is about as absurd as the terms of the deal itself.” So why is the Trump administration participating in this sham agreement?

As the Times of Israel reports, “he [Trump] is looking for another way to ratchet up pressure on Tehran.” It looks like Trump wants to take a closer look before deciding how to proceed, and this certification that Iran is in compliance was more of a strategic pause than a seal of approval that Iran is living up to its end of the deal. According to the Times of Israel, “Tillerson said the administration has undertaken a full review of the agreement to evaluate whether continued sanctions relief is in the national interest. Tillerson noted that Iran remains a leading state sponsor of terrorism and that President Donald Trump had ordered the review with that in mind.”

What Trump should do is rip up the deal and end sanctions relief toward Iran. New, harsher sanctions should be imposed on this totalitarian dictatorship. At the end of the day, the only real solution to the Iranian problem is regime change.

Yet The Washington Post claims, “If the administration were to decide to walk away or otherwise renege on its commitments, it would open the door for Iran to cast aside its own promises and resume the unfettered development of its nuclear program.” What commitments are these? Refusing to impose more sanctions on Iran despite its sponsorship of terror and human rights abuses?

In fact, the Post reports that the Republican-led Congress is working on extending a number of sanctions, but they have delayed the legislation in order to limit the effect on Iran’s presidential election, “which is scheduled for next month.” Iran shouldn’t just be punished for pursuing nuclear weapons, it should also be punished for its state sponsorship of terror.

While former President Barack Obama also acknowledged that Iran is indeed a state sponsor of terrorism, it is one of only three nations that still remain on the State Department list. Obama said “It helps prop up the Assad regime in Syria. It supports Hezbollah in Lebanon and Hamas in the Gaza Strip. It aids the Houthi rebels in Yemen. So countries in the region are right to be deeply concerned about Iran’s activities, especially its support for violent proxies inside the borders of other nations.” When Obama said it, the media used it to show that he wasn’t trying to appease Iran. That he was tough on Iran. But coming from the Trump administration such a suggestion smacks of reckless belligerence, at least to the establishment media.

Last month, the U.S. and Iran engaged in a tit for tat with sanctions: “Iran hit Raytheon Co., United Technologies Corp. and 13 other U.S. companies with sanctions on Sunday for ‘propping up the Zionist regime’ of Israel, according to Iranian state media, retaliating against U.S.-imposed penalties on entities accused of aiding Iran’s missile program.”

Lost in the reporting is the media’s refusal to admit that Obama’s highly touted nuclear deal with Iran is nothing more than an unsigned collection of political commitments which can be broken by any party at any time. In fact, the media continue their fake news reporting by calling this deal “signed” in order to preserve the integrity of what is commonly viewed by his supporters as Obama’s signature foreign policy achievement. But it’s not clear why Trump calls it “signed.” Maybe he doesn’t know.

Warnings from newspapers such as the Post that a lack of good faith on the part of Trump will lead to a nuclearized Iran ignore the obvious conclusion that Iran will eventually become a nuclear power, and that in its current form the so-called agreement is virtually unenforceable.

Last week, CIA Director Pompeo told a Center for Strategic and International Studies (CSIS) audience that “We should all be mindful, given what took place in Syria, and go back and read that JCPOA when it talks about declared facilities and undeclared facilities and how much access the IAEA will have to each of those two very distinct groups.”

“So that might suggest to you what level of certainty we could ever hope to present to the commander in chief,” Pompeo continued. In other words, there is no certainty: if the intelligence community cannot guarantee knowledge of what is happening at undeclared facilities, then Trump, and America as a whole, will be left in the dark about Iran’s nuclear weapons progress. Iran could build the bomb without us finding out until it’s too late. In fact, intelligence experts that I have spoken with believe that Iran may already possess nuclear weapons. The unsigned deal is a document based on trust between the parties, yet Iran is clearly not worthy of such trust.

What we do know is that German intelligence found that Iran sought illegal nuclear technology in 2015. Similarly, Iran continues its ballistic missile tests. As Fred Fleitz—previously of the CIA, the DIA, the State Department and the House Intelligence Committee—has said, “The deal dumbed down the IAEA’s quarterly Iran reports…making it difficult for the world to know the true extent of Iran’s compliance.” The media urgently need to report that the inspections, and unsigned deal, are fatally flawed. But don’t look to a complicit, incestuous media to do anything that might undermine Obama’s legacy.


Roger Aronoff is the Editor of Accuracy in Media, and a member of the Citizens’ Commission on Benghazi. He can be contacted at [email protected]. View the complete archives from Roger Aronoff.

04/21/17

“Queer Communism” Finds its Voice

By: Cliff Kincaid | Accuracy in Media

Since MSNBC’s Rachel Maddow is still preoccupied with the supposed influence of Russia on President Donald Trump and the American political process, we suggest that the publication of a new book called Communism for Kids by MIT Press is worthy of her attention. On the occasion of the 100th anniversary of the 1917 Russian revolution, this book offers a glimpse into an uprising that was global in scope and which has not only destroyed the moral fiber of Russia, but has also done enormous damage to America.

The author of Communism for Kids, Bini Adamczak, writes that “the Russian revolution instilled new hope, particularly in women and people who did not identify themselves within the hetero-normative paradigm.” The “destruction of the family,” she writes, was the goal. “With the revolution, the right to legal abortion, both sexes’ right to divorce, the decriminalization of adultery, and the annulment of the sodomy law (which had previously prohibited homosexuality) were implemented and enforced,” she explains.

“In Moscow, one could find international communes led by gay communists,” she says. “Drag kings could become legitimate members of the Red Army. Participants of the revolutionary debates decided upon the destruction of the family, demanded the legalization of incest, and advertised the practice [of] polygamy.”

“Queer communism” is the battle cry of these modern Marxists, who label themselves “Queer communists” and identify with the origins of the Russian revolution.

It’s doubtful that Maddow, despite her “obsession” with Russia, will turn to this fascinating topic, since she is one of the liberal media’s open advocates of the homosexual lifestyle. She is a favorite of the National Lesbian & Gay Journalists Association (NLGJA), which now calls itself the Association of LGBTQ Journalists.

On Thursday, in New York City, CNN’s Don Lemon will host a “star-studded event” for the NLGJA designed to raise tens of thousands of dollars for the organization’s programs. “More than 350 journalists, news executives, dignitaries and allies attend this event each year in what has become one of New York City’s must-attend media events,” the advertisement for NLGJA says.

The corporate media sponsors include Comcast/NBC Universal, Fox News, ABC News, CNN, CBS News and the New York Post.

Despite the virtual integration of the corporate media and the gay rights movement here in the U.S., Communism for Kids author Bini Adamczak writes that more advances have to be made in the field of “queer politics,” using the strategies of Marxist revolution. Eventually, she says, “modern reproduction technologies” could be used to “completely abolish the sexes.”

Transgender liberation is the next major frontier. She notes that “In her autobiographically inspired novel Stone Butch Blues, Leslie Feinberg grants readers a powerful insight into the connectedness of queer politics.” Feinberg, a Marxist member of the Workers World Party, was identified as “an anti-racist white, working-class, secular Jewish, transgender, lesbian, female, revolutionary communist.” Her last words before she died were, “Remember me as a revolutionary communist. Hasten the revolution!”

Another prominent advocate of “transgender liberation” is Bradley/Chelsea Manning, the former U.S. Army analyst sentenced to prison for espionage for his/her collaboration in the release by WikiLeaks of thousands of top secret intelligence reports. Former President Obama commuted Manning’s sentence, which was originally 35 years in prison for espionage, and he/she will now be released on May 17, after only seven years in prison. Manning was an open homosexual in the Army before deciding to become a woman.

“WikiLeaks walks like a hostile intelligence service and talks like a hostile intelligence service,” declared President Trump’s new CIA director, Mike Pompeo. “It has encouraged its followers to find jobs at CIA in order to obtain intelligence. It directed Chelsea Manning in her theft of specific secret information. And it overwhelmingly focuses on the United States, while seeking support from anti-democratic countries and organizations.”

Yet Pompeo has not indicated whether the lax rules that are in place at the CIA and other intelligence agencies, permitting mentally disordered and confused transgender individuals to gain employment and get top secret security clearances, will be changed.

“It is time to call out WikiLeaks for what it really is—a non-state hostile intelligence service often abetted by state actors like Russia,” Pompeo said. “In January of this year, our Intelligence Community determined that Russian military intelligence—the GRU—had used WikiLeaks to release data of U.S. victims that the GRU had obtained through cyber operations against the Democratic National Committee. And the report also found that Russia’s primary propaganda outlet, RT, has actively collaborated with WikiLeaks.”

In his article for AIM, “CIA Funding and Recruiting LGBT,” Alex Nitzberg wrote about how the CIA maintains its own employee organization called “ANGLE,” which stands for the “Agency Network for Gay, Lesbian, Bisexual, and Transgender Officers and Allies.” Last December 16, the CIA itself announced that ANGLE had received an award for “promoting LGBT issues.”

Obama’s CIA Director John O. Brennan was quoted as saying, “It is difficult to overstate how heartening this progress has been to me. Indeed, one of the highlights of my tenure has been seeing the LGBT community blossom under the leadership of ANGLE and its cadre of devoted allies—a group to which I proudly belong.”

Brennan was also an ally of Muslim and pro-communist CIA employees. He personally voted communist before joining the agency in 1980.

The CIA has released a documentary “ANGLE of Ascent,” highlighting “the key role CIA leaders have played in building inclusive environments” and focusing on “the cultural shift that occurred within the Agency since the signing of Executive Order 12968, which gave LGBT officers the right to obtain a security clearance and serve openly in the Federal Government.”

“The CIA exists to gather and assess intelligence in order to protect America’s national security,” wrote Nitzberg. “Americans must decide whether they believe the CIA’s involvement in recruiting from and funding LGBT events serves to advance those objectives.”

But Americans are not given the opportunity to pass judgement because they are kept in the dark by elements of the news media in bed with the homosexual and transgender movements. As part of this collusion, Pompeo will be encouraged to continue Brennan’s pro-LGBT policies at the CIA. He will be threatened with the charge of “homophobia” if he decides to return the CIA to its mission of protecting America’s secrets.

  • The growing list of special guests at Thursday’s NLGJA event includes:

Dari Alexander, WNYW; Jason Bellini, The Wall Street Journal; Gio Benitez, ABC News; Dan Bowens, WNYW; Frank Bruni, The New York Times; Kenneth Craig, CBS News; John Bannon Dias, News 12; Willie Geist, MSNBC; Kendis Gibson, ABC News; Sunny Hostin, The View; Preston Konrad, celebrity stylist; Steve Lacy, WNYW; Brett Larson, FOX News Headlines 24/7; Kyle Marimon, Fresco News; Jared Max, FOX News Headlines 24/7; John Meyer, Fresco News; Michael Musto, OUT.com; Court Passant, CBS Corporation; Lydia Polgreen, The Huffington Post; Caroline Que, The New York Times; Gus Rosendale, WNBC; Carolyn Ryan, The New York Times; Michelangelo Signorile, SiriusXM; Baruch Shemtov, WNYW; Lauren Simonetti, FOX Business Network; Steve Sosna, NBC4; Joanna Stern, The Wall Street Journal; Joe Toohey, WNYW; Kris Van Cleave, CBS News; and Jana Winter, investigative reporter.


Cliff Kincaid is the Director of the AIM Center for Investigative Journalism and can be contacted at [email protected]. View the complete archives from Cliff Kincaid.

04/20/17

A Possible Disconnect

By: Kent Engelke | Capitol Securities

Until an early afternoon sell off, oil prices were around their highest levels of the year. Conversely, oil shares are lagging oil prices and are greatly underperforming. The divergence between crude and share prices does not last for long. Either crude is going to drop or oil equity prices are going to rally.

The reasons for the divergence are numerous. Electronic based trading firms are programmed to interpret a drop in inventories as bearish as such supports a rise in production that will later suppress prices. The belief is that OPEC will not continue with production cuts. Global oil demand will not meet expectations. Or because oil is not technology.

Speaking of technology, according to Bloomberg, the S & P 500 technology index is at its 50 day moving average. As noted several times recently, there has been a major transition out of everything but technology into technology, thus suggesting a very imbalanced market. The Trump trade has been unwound.

Can the following scenario unfold? A mega capitalized technology growth company disappoints, selling commences in the technology sector and funds gravitate to oil and the financials? As noted above, the divergence between crude prices and oil securities normally does not last for long.

Yesterday IBM profits fell short of expectations, the major reason for the 100 point decline in the Dow. Oil also fell about 3.5% on mixed inventory data [note: oil initially advanced on the statistics].

Last night the foreign markets were mixed. London was down 0.04%, Paris was up 0.75% and Frankfurt was unchanged. China was up 0.04%, Japan was down 0.01% and Hang Sang was up 0.97%.

The Dow should open nominally higher partially on the news that the crude producing countries reached an initial agreement to extend output cuts. The 10-year is off 4/32 to yield 2.32%.

04/20/17

New England Patriots rebuff CNN, NYT #FakeNews about White House event

By: Renee Nal | New Zeal

New England Patriots forced to correct the political hacks at NYT Sports

The New England Patriots thankfully corrected an outrageous, politically charged tweet by New York Times Sports which heavily implied that the New England Patriots rebuffed the White House, where they were honored for being the Super Bowl champions this week.

The fake photo continues to be posted all over Twitter.

The original tweet received almost 33,000 retweets at the time of publication:

The New England Patriots responded:

Not to be outdone, the highly partisan Eleanor Mueller of CNN Politics picked up the “news story” with the headline “The Patriots go to Washington — some of them, at least.”

She writes:

“In photos posted to social media Wednesday, the New England Patriots’ turnout at the White House this year seemed to be noticeably smaller than in 2015, when the team last visited the executive residence.

A side-by-side comparison of the teams on both occasions showed a visibly smaller contingent to visit President Donald Trump than former President Barack Obama — a difference first noted by The New York Times.”

But of course, that is just more #FakeNews.

Both the New York Times & CNN updated their stories to reflect the Patriots tweet, but they both heavily downplayed the fact that they were caught in a politically-charged lie.

Look how the New York Times downplayed their #FakeNews:

While Eleanor Mueller updated her “news story” with the Patriots tweet (cached story here), the update is not explained and it is clearly buried. The headline is exactly the same, as is the implication that the New England Patriots took a pass on visiting the White House, a complete fabrication.

04/19/17

Samuel L. Jackson Betrayed Blacks Again in Georgia

By: Lloyd Marcus

Award winning black actor and civil rights activist Samuel L. Jackson cut a radio ad for the congressional special election in Georgia. Jackson urged Georgia voters to vote democrat to stop racist and sexist Trump. http://bit.ly/2pJHfSy

Folks, as an American who happens to be black, I respectfully report that Mr Jackson has a history of delusional thinking in regards to race relations in America. Over the years, Jackson has repeatedly excoriated Americans. Recently, Jackson accused America of being “full of white supremacists” who elected a “white supremacist president.” http://bit.ly/2oinzVG

Everything out of this so-called civil rights activist’s mouth is counter productive to real black empowerment.

I challenge you to name a blockbuster Hollywood movie which does not feature Samuel L. Jackson. Okay, that statement may be a bit over the top, but you get my point. This guy is an awesome actor. His work ethic is legendary. Rather than trashing the millions of white movie goers who purchase tickets to see him, shouldn’t Jackson be focused on encouraging blacks to follow his lead?

What gets me about so many of these mega-wealthy and mega successful blacks is they never say “do what I did to become successful”; work hard, make responsible choices and strive for excellence. No, instead, these rich blacks betray their people by advocating the Democrats’ keep-them-on-our-plantation formula. These powerful black mouthpieces for the Leftist agenda tell blacks, “Y’all should demand more government assistance checks and democrats mandating lower standards for blacks.” Every Democrat so-called black empowerment program subliminally sends blacks the message that they are short-bus-to-school Americans. Leftists are peerless in their bigotry of lowered expectations in regards to black Americans.

This is why as a black conservative, I remain frustrated that Republicans are branded racist. In reality, Democrats are the true racists. My GOP brothers and sisters have never talked down to me or inferred that standards needed to be lowered to give me a fair shot.

That is all my 90 year-old black dad asked for back in 1952, a fair shot at becoming a Baltimore City firefighter. Despite horrific racist working conditions, dad won “Firefighter of the Year” two times without a single standard lowered for him. That’s what I’m talkin’ ’bout! http://bit.ly/2pajirD

By sticking his nose into the Georgia congressional election as a Democrat hack operative, Mr. Jackson is selling-out his people again; helping to falsely brand Trump a racist. Have you checked the numbers Mr. Jackson? Blacks suffered big time under 8 years of Obama; epidemic unemployment; socially and economically going backwards. http://bit.ly/1VJG0jM

Trump will be far better for blacks than Obama. http://bit.ly/2eSpXhS Mr. Jackson, I pray that you will get your head together. Please stop being a puppet, continuing Democrats’ decades of deceiving and exploiting blacks to keep them voting Democrat.

Mr. Jackson, please start proclaiming the truth to black youths, “Do what I did and you can have what I have.” Samuel L. Jackson’s net worth is approximately $165 million.

Lloyd Marcus, The Unhyphenated American
Author: “Confessions of a Black Conservative: How the Left has shattered the dreams of Martin Luther King, Jr. and Black America.”
Singer/Songwriter and Conservative Activist

04/19/17

Change Is The Only Constant

By: Kent Engelke | Capitol Securities

US equities retraced Monday’s light volume advance, an advance I believe was the result of algorithmic or technology based trading. The reason for yesterday’s decline… a mega-sized financial missed profit expectation, a surprise call for an election in Britain to further strengthen Brexit, France’s election on Sunday where the populist and nationalist Le Penn is expected to be one of the two victors leading into the final voting in May and North Korea.

Treasuries continued to rally and are now around mid-November levels.

As written last week, the entire “Trump Trade” has been reversed with mega-capitalized growth issues out-performing. Value and the small caps are performing poorly as the immediate chances of Trump’s pro-growth agenda being passed are slim.

About two months ago, I commented that change will not occur immediately and any type of delay would be met with selling.

I believe the economy/the markets are at a major inflection point. An appropriate response would be no duh! Economic nationalism is gaining further momentum. Brinkmanship and saber rattling is at levels not experienced in almost 30 years.

The Financial Times quoting Bank of America/Merrill Lynch states interest rates are at 5,000 year lows. Moreover, BAML writes fiscal stimulus in the G-7 countries is at a 70-year low, further stating stock valuations are lofty but bank valuations are at 75-year lows, a huge disconnect. The amount of wealth concentrated in a handful of names is exponential.

But a transition to what? First quarter growth is now expected to be under a 1.5% handle, the result of the lack of pro-growth initiatives such as tax and regulatory reform. I believe such is already reflected in the small and value companies for such are the most sensitive to anemic domestic growth.

Most are extrapolating the last eight years, the last 25 years into perpetuity. The world is different today than yesterday. I reiterate because of hope lost in the global administrative state, economic nationalism will continue to evolve into the dominant economic philosophy and the domestic issues, rather than the global leviathans, will consistently outperform. Growth will exceed expectations as part of Trump’s agenda becomes legislated.

Radical thought? Maybe not, if change is the only constant.

Last night the foreign markets were mixed. London was down 0.24%, Paris was up 0.27% and Frankfurt was up 0.19%. China was down 0.81%, Japan was up 0.07% and Hang Sang was down 0.41%.

The Dow should open moderately higher as European data was stronger than expected. The 10-year is off 11/32 to yield 2.21%.